who may issue warehouse receipt
TRANSCRIPT
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WHO MAY ISSUE WAREHOUSERECEIPT?> A warehouseman is a person lawfully engaged in the business of storing
goods for profit.
> Only a warehouseman may issue warehouse receipts
WHAT SHOULD BE DONE TO PUTTHE RECEIPT WITHIN THE
PURVIEW OF WAREHOUSERECEIPTS LAW?> The warehouse receipt should be issued by the warehouseman
FORM OF RECEIPTS; ESSENTIAL
TERMS1. The location of the warehouse where the goods are stored
2. The date of issue of the receipt
3. Consecutive number of the receipt
4. A statement whether the goods received will be delivered to the bearer, to a
specified person or to a specified person or his order
5. The rate of storage charges
6. A description of the goods or of the packages containing them
7. The signature of the warehouseman which may be made by his
authorized agent
8. If the receipt is issued for goods of which the warehouseman is
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owner, either solely or jointly or in common with others, the fact of such
ownership
9. A statement of the amount of advances made and of liabilities incurred
for which the warehouseman claims as lien. If the precise amount for such
advances made or of such liabilities incurred is, at the same time of the issue of
the receipt, unknown to the warehouseman or to his agent
who issues it, a statement of the fact that advances have been made or liabilities
incurred and the purpose thereof is sufficient
EFFECT OF OMISSION OF THEESSENTIAL CONTENTS> A warehouseman shall be liable to any person injured thereby all
damages caused by the omission from a negotiable receipt of any of the
terms herein required
> Validity of the receipt not affected
> Negotiability of the receipt not affected
TERMS THAT CANNOT BEINCLUDED IN THE WAREHOUSERECEIPT1. Those contrary to any provision of the law
2. In any wise impair the warehousemans obligation to exercise that
degree of care in the safekeeping of the goods entrusted to him which a
reasonably careful man would exercise with regard to similar goods of his own
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NON-NEGOTIABLE WAREHOUSERECEIPT
> Receipt in which it is stated that the goods received will be delivered to the
depositor or to any specified person
NEGOTIABLE WAREHOUSERECEIPT> Receipt in which it is stated that the goods received will be delivered to the
bearer or to the order of any person named in such receipt
> No provision shall be inserted in a negotiable receipt that it is non-negotiable.
Such provision if inserted shall be void.
DUPLICATE RECEIPTS MUST BEMARKED> When more than one is issued for the same goods, the word duplicate
shall be plainly placed upon the face of every such receipt, except the first
one issued
> A warehouseman shall be held liable for damages for failure to do so to
anyone who purchased the subsequent receipt for value supposing it to be
original, even though the purchaser be after the delivery of the goods by
the warehouseman to the holder of the original receipt
OBLIGATIONS AND RIGHTS OF WAREHOUSEMAN UPON THEIR
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RECEIPTS
PRINCIPAL OBLIGATIONS OF THEWAREHOUSEMAN1. To take care of the goods entrusted to his safekeeping
2. To deliver them to the holder of the receipt or the depositor provided
the following conditions are fulfilledthere is demand by the depositor
accompanied by either
a. An offer to satisfy the warehousemans lien
b. An offer to surrender the receipt, if negotiable with such indorsements as
would be necessary for the negotiation of the receipts
c. A readiness and willingness to sign, when the goods are delivered, an
acknowledgement that
they have been delivered, if such signature is requested by the
warehouseman
WHAT SHOULD ACCOMPANY THEDEMAND FOR THE RETURN OFTHE GOODS?1. An offer to satisfy the warehousemans lien
2. An offer to surrender the receipt, if negotiable with such indorsements
as would be necessary for the negotiation of the receipts
3. A readiness and willingness to sign, when the goods are delivered, an
acknowledgement that they have been delivered, if such signature is
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requested by the warehouseman
A WAREHOUSEMAN ISJUSTIFIED IN DELIVERING THEGOODS TO ONE WHO IS1. Person lawfully entitled to the possession of the goods, or his agent
2. Person who either himself entitled to delivery by the terms of the non-
negotiable receipt issued for the goods, or who has written authority from the
person so entitled either endorsed upon the receipt or written on another paper
3. Person in possession of a negotiable receipt by the terms of which the
goods are deliverable to him or order, or to bearer, or which has been
indorsed to him or in blank by the person to whom delivery was promised by the
terms of the receipt or by his mediate or immediate indorser
WAREHOUSEMANS LIABILITY FORMISDELIVERY> Where a warehouseman delivers the goods to one who is not in fact lawfully
entitled to the possession of them, the warehouseman shall be liable for
conversion/estafa to all having a right of property or possession in the goods if
he delivered the goods otherwise than as authorized
> And though he delivered the goods as authorized he shall be so liable if prior to
such delivery he had either
o Been requested, by or on behalf of the person lawfully entitled to a
right of property or
possession in the goods, not to make such delivery
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o Had information that the delivery about to be made was to one not
lawfully entitled to the
possession of the goods
WHAT IS CONVERSION?> Unauthorized assumption and exercise of the right of ownership over
goods belonging to another through the alteration of their condition or the
exclusion of the owners right
NEGOTIABLE RECEIPTS MUSTBE CANCELLED OR MARKEDWHEN GOODS DELIVERED ORWHEN PART OF IT ISDELIVERED. FAILURE TO DOSO WILL MAKE THEWAREHOUSEMAN LIABLE> The warehouseman is liable to any one who purchases for value in good
faith such receipt, for failure to deliver the goods to him, whether such
purchaser acquired title to the receipt before or after the delivery of the
goods by the warehouseman
EFFECT OF ALTERATION ONLIABILITY OF WAREHOUSEMAN
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1. Alteration immaterialwhether fraudulent or not, whether authorized or
not, the warehouseman is liable on the altered receipt according to its original
tenor
2. Alteration materialif the alteration is material, but authorized, the
warehouseman is liable according to the terms of the receipt as altered
3. Material alteration innocently madethe warehouseman is liable on the
altered receipt according to its original receipt
4. Material alteration fraudulently madewarehouseman is liable according
to the original tenor of the receipt to a purchaser of the receipt for value
without notice, and even to the alterer and subsequent purchasers with
notice except that as regards to the last two, the
warehousemans liability is limited only to delivery as he is excused from any
liability
NOTA BENE: it is clear that even a fraudulent alteration cannot divest the
title of the owner of stored goods and the warehouseman is,
therefore, liable to return them to the owner.But a bona fide holder acquires no right to the goods under a negotiable
receipt which has been lost or stolen or to which the endorsement of the
depositor has been forged.
LOST OR DESTROYED RECEIPTS
> The court may order the delivery of the goods upon satisfactory proof ofsuch loss or destruction and upon the giving of a bond with sufficient sureties to
be approved by the court to protect the warehouseman from any liability or
expense, which he or any person injured by such delivery
may incur by reason of the original receipt remaining outstanding
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> The court may also in its discretion order the payment of the warehousemans
reasonable costs and counsel fees
> The order of the court shall not relieve the warehouseman from liability to a
person to whom the negotiable receipt as been or shall be negotiated for
value without notice of the proceedings or of the delivery of the goods
LIABILITY OF WAREHOUSEMAN ASTO DUPLICATEHE WARRANTS1. That the duplicate is an accurate copy of the original receipt
2. Such original receipt is uncancelled at the date of the issue of the duplicate
WAREHOUSEMAN CANNOT SETUP TITLE IN HIMSELF> The warehouseman cannot refuse to deliver the goods on the ground that
he has acquired title or right to the possession of the same unless such
title or right is derived
o Directly or indirectly from a transfer made by the depositor at the time of
the deposit for storage or subsequent thereto
o From the warehousemans lien
INTERPLEADER OF ADVERSECLAIMANTS> If more than one person claims the title or possession of the goods, the
warehouseman may, either as a defense to an action brought against him for
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non-delivery of the goods, or as an original suit, whichever is appropriate,
require all known claimants to interplead
WAREHOUSEMAN HASREASONABLE TIME TODETERMINE VALIDITY OF CLAIMS> If someone other than the depositor or person claiming under him has a
claim to the title or possession of goods, and the warehouseman has information
of such claim, the warehouseman shall be excused from liability for refusing to
deliver the goods, either to the depositor or person
claiming under him or to the adverse claimant, until the warehouseman has
had a reasonable time to ascertain the validity of the adverse claim or to bring
legal proceedings to compel all claimants to interplead
LIABILITY OF WAREHOUSEMAN
FOR NON-EXISTENCE ORMISDESCRIPTION OF GOODS> As a general rule, the warehouseman is under obligation to deliver the identical
property stored with him and if he fails to do so, he is liable directly to the owner
> As against a bona fide holder of a warehouse receipt, the warehouseman is
estopped whether the receipt is negotiable or not, to deny that he has
received the goods described in it
LIABILITY OF WAREHOUSEMANFOR LOSS DUE TO LACK OF CARE
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> The warehouseman is required to exercise ordinary or reasonable care
in the custody of the goods, that is, the care is reasonably careful owner
would exercise over similar goods of his own.
> The warehouseman isnt liable for any loss or injury to the goods, which
couldnt have been avoided by the exercise of such care. Of course,
what constitutes ordinary or reasonable care depends upon the
circumstances such as the character and value of the property and the
character
and location of the warehouse.
COMMINGLING OF DEPOSITEDGOODS> As a general rule, a warehouseman may not mingle goods belonging to
depositors
> In case of fungible goods, the warehouseman may mingle them with the goods
of the same kind and grade provided that he authorized by agreement or custom
> Commingling is intended for the benefit of the warehouseman.
It would, indeed be strange if the warehouseman could escape his liability
to the owner of the goods by the simple process of commingling them
without authorization
ATTACHMENT OR LEVY OF ANEGOTIABLE RECEIPT> The warehouseman has the direct obligation to hold possession of the
goods for the original owner or for the person known the negotiable receipt
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of title has been duly negotiated.
> While in possession of such warehouseman, the goods cannot be
attached or levied upon under an execution unless
o The document is first surrendered
o Its negotiation is enjoined
o The document is impounded by the court
> This shall not apply if the person depositing is not the owner of the goods
or one who has no right to convey title to the goods binding upon the owner.
> Neither shall it apply to actions for recovery or manual delivery of goods
by the real owner nor to cases where the attachment is made before the
issuance of the negotiable receipt of title
CREDITORS REMEDIES TOREACH NEGOTIABLE RECEIPTS> A creditor whose debtor is the owner of negotiable receipt shall be entitled to
such aid from courts of appropriate jurisdiction, by injunction and otherwise, in
attaching such receipt or in satisfying the claim by means thereof as is
allowed by law or in equity in regard to property which cannot be readily
be attached or levied upon by ordinary legal process
WHAT CLAIMS ARE INCLUDED
IN THE WAREHOUSEMANS LIEN1. All lawful charges for storage and preservation of the goods
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2. All lawful claims for money advancedInterests, Insurance,
Transportation, Labor, Weighing, Cooperating and other charges and expenses
in relation to the goods
3. All reasonable charges and expenses for notice and advertisements of
sale
4. Sale of goods where default has been made in satisfying
warehousemans lien
AGAINST WHAT PROPERTY THELIEN MAY BE ENFORCED1. Against all goods, whenever deposited, belonging to the person who is
liable to the debtor for the claims in regard to which the lien is asserted
2. Against all goods belonging to others which have been deposited at any
time by the person who is liable as debtor for claims in regard to which the
lien is asserted if such person had been entrusted with the possession of
the goods that a pledge of the same by him at the time of the deposit to one who
took the goods in good faith for value would have been valid
HOW WAREHOUSEMAN LOSESHIS LIEN1. By surrendering possession thereof
2. By refusing to deliver the goods when a demand is made with which he isbound to comply under the provisions of the law
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LIEN WHERE RECEIPTNEGOTIABLE
> With the exception of the charges for the storage or preservation of
goods for which a negotiable receipt has been issued, the lien exists only
for the other charges expressly enumerated in the receipt so far as they
are written although the amount of the said charge isnt stated
OTHER THINGS IN CONNECTION
TO WAREHOUSEMANS LIEN1. Warehouseman need not deliver lien is satisfied
2. Warehousemans lien doesnt preclude other remedies
SATISFACTION OF LIEN BY SALE1. The warehouseman shall give a written notice to the person on whose
account the goods are held, and to any other person known by the
warehouseman to claim an interest in the goods. Such notice shall be
given by delivery in person or by registered mail addressed to the
last known place of business or abode of the person to be notified.
2. The notice shall contain
a. An itemized statement of the claim, showing the sum due at the time
of the notice and the dates when it became due
b. A brief description of the goods
c. A demand that such amount of the claim as stated shall be paid on or before
the day mentioned, not
less than 10 days from the delivery of the notice if it is personally delivered, or
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from the time when
the notice shall reach its destination, according to due course of post, if the
notice is sent by mail
d. A statement that unless the claim is paid within the time specified, the goods
will be advertised for sale
and sold by auction at a specified time and place
ENFORCEMENT OFWAREHOUSEMANS LIEN1. By refusing to deliver the goods until the lien is satisfied
2. By causing the extrajudicial sale of the property and applying the
proceeds to the value of the lien
3. By filing a civil action for collection of the unpaid charges or by way of
counterclaim in an action to recover the property from him
EFFECT OF SALE OF GOODS1. In case of sale of goods, the warehouseman is not liable for
nondelivery even if the receipt given for the goods when they were
deposited be negotiated.
2. When the sale was made without the publication requirement and
before the time specified by law, such sale is void and the purchaser of
the goods acquires no title in them.
ACTS FOR WHICHWAREHOUSEMAN IS LIABLE
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1. Failure to stamp duplicate on copies of negotiable receipt
2. Failure to place non-negotiable or not negotiable on the not negotiable
receipt
3. Misdelivery of the goods
4. Failure to effect cancellation of a negotiable receipt upon delivery of the
goods
5. Issuing receipt for non-existing goods or misdescribed goods
6. Failure to take care of the goods
7. Failure to give notice in case of sale of goods to satisfy the lien or because
the goods are perishable or hazardous
NEGOTIATION AND TRANSFER
OF RECEIPTS
NEGOTIATION OF NEGOTIABLERECEIPT BY DELIVERY1. Where by the terms of the receipt, the warehouseman undertakes to
deliver the goods to the bearer
2. Where by the terms of the receipt, the warehouseman undertakes to
deliver the goods to the order of a specified person, and such person or a
subsequent indorsee of the receipt has indorsed it in blank or to bearer
a. Where by the terms of the receipt, the goods are deliverable to bearer or
where a negotiable receipt
has been indorsed in blank or bearer, any holder may indorse the same
to himself or to any other
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specified person, and in such case the receipt shall thereafter be negotiated
only by the indorsement
by such indorsee
NEGOTIATION OF NEGOTIABLERECEIPT BY INDORSEMENT1. If indorsed in blank or to bearer, the document becomes negotiable by
delivery
2. If indorsed to a specified person, it may be again negotiated by the
indorsement of such person in blank, to bearer or to another specified person.
Delivery alone isnt sufficient.
TRANSFER OF NON-NEGOTIABLERECEIPT> A non-negotiable receipt of title cannot be negotiated.
> Nevertheless, it can be transferred or assigned by delivery
> The assignee or transferee only acquires the rights of the transferor or
assignor
ADVANTAGES OF A NEGOTIABLE
WAREHOUSE RECEIPT1. It protects a purchaser for value and in good faith
2. The goods covered by the receipt cannot be garnished or levied upon
under execution unless it is surrendered, or impounded, or its negotiation
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enjoined
3. In case of negotiation, the holder acquires the direct obligation of the
warehouseman to hold possession of the goods for him without notice to such
warehouseman
4. The goods it covers arent subject to sellers lien or stoppage in transitu
WHO MAY NEGOTIATE A RECEIPT1. By the owner thereof
2. By any person to whom the possession or custody of the receipt has
been entrusted by the owner, if by the terms of the receipt, the warehouseman
undertakes to deliver the goods to the order of the person to whom the
possession or custody of the receipt has been entrusted, or if at the
same time of such entrusting, the receipt is in such form that it may be
negotiated by delivery
RIGHTS OF PERSON TOWHOM RECEIPT HAS BEENNEGOTIATED1. The title of the person negotiating the receipt over the goods covered
by the receipt
2. The title of the person to whose order by the terms of the receipt the goodswere to be delivered over such goods
3. The direct obligation of the warehouseman to hold possession of the
goods for him, as if the warehouseman directly contracted with him
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RIGHTS OF PERSON TOWHOM RECEIPT HAS BEEN
TRANSFERRED1. Title to the goods as against the transferor
2. The right to notify the warehouseman of the transfer thereof
3. The right thereafter to acquire the obligation of the warehouseman to
hold the goods for him
RIGHTS OF TRANSFEREE OFNEGOTIABLE RECEIPT1. The right to the goods as against the transferor
2. The right to compel the transferor to indorse the receipt
RULE WHERE RECEIPT ISSUBSEQUENTLY INDORSED> For the purpose of determining whether the transferee is a purchaser for
value in good faith without notice, the negotiation shall take effect as of
the time when the indorsement is actually made not at the time the receipt is
delivered
> Reason for the rule: negotiation becomes complete only at the time of
indorsement
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WARRANTIES ON SALE OFRECEIPT
1. That the receipt is genuine
2. That he has a legal right to negotiate or transfer it
3. That he has knowledge of no fact which would impair the validity of the
worth of the receipt
4. That he has a right to transfer the title to the goods and that the goods
are merchantable or fit for a particular purpose, whenever such warranties
would have been implied, if the contract of the parties had been to transfer
without a receipt of the goods represented thereby
INDORSER, NOT A GUARANTOR> The indorsement of a receipt doesnt make the indorser liable for any
failure on the part of the warehouseman or previous indorser of the receipt
to fulfill their respective obligations
NO WARRANTY IMPLIED FROMACCEPTING PAYMENT OF A DEBT> A mortgagee, pledgee or holder for security of a receipt who, in good
faith, demands or receives payment of the debt for which such receipt is
security, whether from a party to a draft drawn for such debt or from any
other person, shall not, by so doing, be deemed to represent or
to warrant the genuineness of such receipt or the quantity or quality of the goods
therein described
> In other words, the holder of a security who in good faith accepts payment of a
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debt from a person doesnt warrant thereby the genuineness of the receipt
nor the quality or quantity of the goods therein described
WHEN NEGOTIATION NOTIMPAIRED BY FRAUD, DURESS,MISTAKE> The validity of the negotiation of a receipt isnt impaired by the fact that such
negotiation was a breach of duty on the part of the person making the
negotiation, or by the fact that the owner of the receipt was induced by
fraud, mistake or duress to entrust the possession or custody of the receipt to
such person, if the person to whom the receipt was negotiated, or to a
person to whom the receipt
is subsequently negotiated paid value therefor, without notice of the breach of
duty, fraud, mistake or duress
EFFECT OF SUBSEQUENTNEGOTIATION BY SELLER, ETC.> The purchaser, mortgagee, or pledgee of goods for which a negotiable receipt
has been issued, or of the negotiable receipt itself, has the duty to require the
negotiation of the receipt to him otherwise, his failure will have the same
effect as an express authorization on his part to the seller, mortgagor, or
pledgor in possession of such receipt to make subsequent negotiation
> The subsequent purchaser must have taken the receipt in good faith and for
value in order to acquire a better right
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INDORSEES RIGHT SUPERIOR TOVENDORS LIEN
> An innocent holder of a negotiable receipt has a better right to the goods
for which the receipt is given than the vendor who has a vendors lien upon such
goods
> Warehouseman isnt obliged to deliver or justified in delivering the goods to
an unpaid seller unless the receipt is first surrendered for cancellation
HOW DO YOU ATTACH ORIMPOSE A LIEN OVER GOODSCOVERED BY A WAREHOUSERECEIPT?If it is not negotiable, the court would issue a writ of attachment. If it is
negotiable, the court should require the surrender of the receipt and restrict
further negotiations.