P N B v . S E , E T A L .18 April 1996 G.R. No. 119231 Hermosisima, Jr., J.

TOPIC: Special Laws - Warehouse Receipts Law

SUMMARY: PNB, as endorsee of 5 Warehouse Receipts (quedans), demanded delivery of sugar stocks covered thereby. Noah's Ark Sugar Refinery refused to comply, alleging that the original purchasers of the stocks never acquired ownership because of failure to pay. PNB obtained favorable judgment, but the defendants asserted their warehouseman's lien. SC upheld the warehouseman's lien in favor of the defendants. While the PNB is entitled to the stocks of sugar as the endorsee of the quedans, delivery to it shall be effected only upon payment of the storage fees.

NATURE: Petition to nullify the orders of the respondent Judge Se

1989 - In accordance with the Warehouse Receipts Law, Noah's Ark Sugar Refinary issued the following Warehouse Receipts (Quedans):

o Receipt No. 18062 - sugar deposited by Rosa Sy;o Receipt No. 18080, - sugar deposited by RNS Merchandising (Rosa Ng Sy); o Receipt No. 18081, - sugar deposited by St. Therese Merchandising (STM); o Receipt No. 18086, - sugar deposited by STM; and o Receipt No. 18087- sugar deposited by RNS Merchandising.

Warehouse Receipts Nos. 18080 and 18081 were negotiated and endorsed to Luis Ramos. The other receipts were negotiated and endorsed to Cresencia Zoleta.

Ramos and Zoleta endorsed the quedans to PNB as security for 2 loans (P15.6M, P23.5M).

They failed to pay the loan. PNB wrote to the Sugar Refinery and demanded delivery of the sugar stocks, but the latter refused to comply.

PNB filed a verified complaint for "Specific Performance with Damages and Application for Writ of Attachment" against Noah's Ark Sugar Refinery, Alberto T. Looyuko (sole proprietor), Jimmy T. Go (managing partner) and Wilson T. Go (Executive VP).

o RTC Judge Se denied the Application for Preliminary Attachment.o Sugar Refinery and co-defendants filed an answer with counterclaim and

third-party complaint. They claimed to own the quedans and the sugar represented therein. Allegedly, RNS and STM purchased the sugar covered by the quedans but the checks they gave as payment were dishonored. Considering that the buyers never acquired ownership, their subsequent endorsers and PNB could not acquire a better right.

o Sy (of RNS) and Ng (of STM) alleged that the transaction was merely simulated.

PNB filed a Motion for Summary Judgment.o RTC - Denied. PNB filed a Petition for Certiorari with the CA.o CA - Reversed; ordered RTC to render summary judgment in favor of PNB.

Effect of ruling: Declared that defendants were not owners but were only warehousemen with respect to the sugar stocks.

RTC - Did not follow the CA; still dismissed PNB's complaint; also dismissed the counterclaim and third-party complaint. PNB filed a Petition for Review on Certiorari at the SC.

SC - Reversed; ordered a new judgment conforming to the CA's decision (in favor of PNB)

Defendants filed a Motion for Clarification. SC held that the relief granted was precisely the relief set out in the final and executory decision of the CA.

Defendants filed an Omnibus Motion seeking deferment of the proceedings until they were heard on their claim for warehouseman's lien.

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o Meanwhile, PNB filed a Motion for the Issuance of Writ of Executiono RTC granted the Omnibus Motion; PNB's motion was deferred.

PNB filed a Manifestation with Urgent Motion to Nullify Court Proceedings.o RTC held that there exists in favor of the defendants a valid

warehouseman's lien under Sec. 27 of R.A. 2137. Accordingly, execution of the judgment was ordered stayed and/or precluded until the full amount of defendants' lien shall have been satisfied.

PETITIONER PNB ARGUES: Defendants have lost their right to recover their warehouseman’s lien because they

failed to set up said claim in their Answer before the RTC, and they did not appeal from the decision.

Denial by the SC of the Motion for Clarification has foreclosed private respondents’ right to enforce their warehouseman’s lien under the Warehouse Receipts Act.

PRIVATE RESPONDENTS ARGUE: They could not have claimed the right to a warehouseman’ s lien in their Answer to the complaint before the RTC as it would have been inconsistent with their original stand (claiming ownership of the stocks covered by the quedans).

W/N the defendants have lost their right to recover their warehouseman's lien ⇒NO. In disposing of the private respondents’ motion for clarification, SC could not

contemplate the matter of warehouseman’s lien because the issue to be resolved then was the claim of private respondents for retaining ownership of the stocks of sugar covered by the endorsed quedans.

(In other words: It was only in the SC's ruling on the Motion for Clarification that it was finally resolved that defendants were not the owners of the sugar stocks. Hence, it was only after such ruling that defendants could assert a different claim: their warehouseman's lien. -B)

W/N Noah's Ark Sugar Refinery has the right to impose and collect warehouseman's lien ⇒YES. Stipulation in the Warehouse Receipts provides for such right:

"Storage of the refined sugar quantities mentioned herein shall be free up to one (1) week from the date of the quedans covering said sugar and thereafter, storage fees shall be charged in accordance with the Refining Contract under which the refined sugar covered by this Quedan was produced."

Even in the absence of such a provision, law and equity dictate the payment of the warehouseman’ s lien pursuant to Secs. 27 and 31 of the Warehouse Receipts Law (R.A. 2137):

SECTION 27. What claims are included in the warehouseman’s lien. Subject to the provisions of section thirty, a warehouseman shall have lien on goods deposited or on the proceeds thereof in his hands, for all lawful charges for storage and preservation of the goods; also for all lawful claims for money advanced, interest, insurance, transportation, labor, weighing coopering and other charges and expenses in relation to such goods; also for all reasonable charges and expenses for notice, and advertisement of sale, and for sale of the goods where default has been made in satisfying the warehouseman’s lien.

SECTION 31. Warehouseman need not deliver until lien is satisfied. A warehouseman having a lien valid against the person demanding the goods may refuse to deliver the goods to him until the lien is satisfied.

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As warehousemen, private respondents cannot legally be deprived of their right to enforce their claim for warehouseman’s lien for reasonable storage fees and preservation expenses. Pursuant to Sec. 31, they may refuse to deliver the goods until the lien is satisfied.

PNB cannot disclaim liability for the payment of the storage fees stipulated in the Warehouse Receipts, which it also uses as basis for its claim for delivery of the sugar stocks (estopped). Its unconditional presentment of the receipts carried with it the admission of the existence and validity of the terms, conditions and stipulations written on the face of the Warehouse Receipts, including the unqualified recognition of the payment of warehouseman’s lien for storage fees and preservation expenses. PNB may not now retrieve the sugar stocks without paying the lien due private respondents as warehouseman.

While the PNB is entitled to the stocks of sugar as the endorsee of the quedans, delivery to it shall be effected only upon payment of the storage fees.

Note: In accordance with Sec. 29 of the Warehouse Receipts Law, the warehouseman loses his lien upon goods by surrendering possession thereof. In other words, the lien may be lost where the warehouseman surrenders the possession of the goods without requiring payment of his lien, because a warehouseman’s lien is possessory in nature.

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