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Highlighted - Warehouse Receipts Law
Highlighted - Warehouse Receipts Law
RECEIPTS LAW
CONTINUATION
2 Kinds of Warehouse Receipts
DEFINITION
2.To deliver the goods upon a demand made either by the holder of a receipt for the
goods or by the depositor provided that the conditions under Section 8 are fulfilled.
Obligation to Deliver (Sec. 8)
Upon a demand made either by the holder of a receipt for the
goods or by the depositor, unless there is a legal excuse, if such demand is accompanied
with:
(b) An offer to surrender the receipt, if negotiable with such indorsements as would be
necessary for the negotiation of the receipts; and
(c) A readiness and willingness to sign, when the goods are delivered, an acknowledgment
that they have been delivered, if such signature is requested by the warehouseman.
Persons to whom goods must be
delivered (Sec 9)
A warehouseman is justified in delivering the goods to one who is:
1.Person lawfully entitled to possession of goods or his agent.
a. person to whom a competent court has ordered the delivery of the goods
b. to an attaching creditor
c. to the purchaser
d. goods are perishable or hazardous
2.Person entitled to delivery under either a non-negotiable receipt or with written authority.
3.Person in possession of a negotiable receipt
Warehouseman’s liability for
misdelivery* (Sec. 10)
1.Liability similar to a bank paying a forged check.
2.Liability as for conversion.**
Material alteration Liable on the altered receipt according to its original tenor
innocently made
• XPN:
⚬ Fungible goods may be commingled if warehouseman
authorized (Sec. 23) a different owners become co-ownersof the
whole mass
Attachment or levy of negotiable receipt
• Warehouseman has the direct obligation to hold possession of the goods. While in possession of such
warehouseman, the goods cannot be attached or levied upon under an execution unless:
• The receipt be first surrendered; or
• Its negotiation is enjoined; or
• The receipt is impounded by the court. (Sec. 25)
• a qualified right or a proprietary interest, which may be exercised over the property of another
• It signifies a legal claim or charge on property as a collateral or security for the payment of some debt
or obligation
2. By refusing to deliver the goods when a demand is made with which he is bound to
comply under the provisions of the law
Valid reasons for refusing to
deliver goods
• Holder of the receipt does not satisfy the conditions prescribed in Section 8 of this Law
• Warehouseman has legal title in himself on the goods*
• Warehouseman has legally set up the title or right of third person as lawful defense for
nondelivery of the goods
• Warehouseman having a lien valid against the person demanding the goods refuses to deliver the
goods to him unless the lien is satisfied
• Failure was not due to any fault on the part of the warehouseman*
Enforcement of
Warehouseman's Lien
• Refusing to deliver the goods until the lien is satisfied
• Causing the extrajudicial sale of the property and applying the proceeds to the value of the lien
• Filing a civil action* for collection of the unpaid charges
Effect of sale of goods
If indorsed to a specified person, delivery alone is not enough -> may be negotiated again to
another person, or in blank
Transfer of non-negotiable receipt
does not automatically become owner of goods but has the right to keep
• Innocent Third Persons -> if third persons are involved, the indorsee-pledgee of a
• He should have knowledge that nothing would impair the validity of the receipt
• He should have the right to transfer the title to the goods and that the goods are
Double Effect
RULE:
express authorization on his part to the seller, mortgagor or pledgor to make subsequent
negotiation
Indorsee’s Right Superior to Vendor’s Lien
innocent holder of the negotiable instrument has better right to the goods for which the
receipt is given than the vendor who has a vendor’s lien upon such goods
Possession of goods by warehouseman
Goods must be stored in his warehouse, under his care, and under his control at the time the
recieipt is issued
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