warehouse receipts act

7/29/2019 Warehouse Receipts Act

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WAREHOUSE RECEIPTS ACT

ACT NO.2137

SCOPE OF THE LAWThe WRL is a full and complete treatise on the subject. It covers all warehouses whether public

or private, bonded or not.

NATURE AND FUNCTIONS OF WAREHOUSE RECEIPTA warehouse receipt, being a document of title to goods, is a proof of the (1) possession or

control of the goods, or (2) authorizing or purporting to authorize the possessor of the documents

to transfer or receive, either by indorsement or by delivery, good represented by such document.1

Warehouse receipts constituted as Equitable Mortgage2:

GENERAL RULE: The proper negotiation or assignment of a warehouse receipts carrieswith it the transfer of title over the commodities covered by the receipt.

EXCEPTION: Where a negotiable warehouse receipt is indorsed and delivered to a creditoras a collateral for loan, which would then be a species of security, referred to as equitable

mortgage.

[Read: BPI vs. Herridge, 47 PHIL 57 and Martinez vs. PNB 93 PHIL 765]

PURPOSE: The Warehouse Receipt Act [WRA] seeks:

(1) to encourage transactions on negotiable warehouse receipts, which may only be

issued by a warehouseman who is engaged in the business of receiving commodities ondeposit for storage.

(2) to regulate the status, rights, and liabilities of the parties in a warehousing contract;(3) to protect those who in good faith and for value, acquire negotiable warehouse

receipts by negotiation;

(4) to render title to, and right of possession of, property stored in warehouses moreeasily convertible;

(5) to place greater responsibility on the warehouseman.3

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WAREHOUSEMAN: a person lawfully engaged in the business of storing goods for profit.4

For oneto be considered engaged in the warehousing business, therefore, it is sufficient that he receives

1Article 1636(1), New Civil Code

2An equitable mortgage is one which, although it lacks the proper formalities of a mortgage, shows the intention of

the parties to make the property a security for a debt. Cachola vs CA, 208 SCRA 4963

93 CJS 4004

Section 58, WRA


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As instruments of credit, warehouse receipts play an important role in modern commerce and the

present day tendency is towards liberal construction of the law in favor of the bona fide holders

of such receipt.

9

This rule, however, has no application to actions against any party to the transaction other than

the warehouseman. The purchaser of a non-negotiable receipt not marked accordingly from onewho has stolen or found it cannot interpose the defense against the owner of the goods that the

receipt is negotiable and has given him the title to the goods, the warehouseman not being party

to the transaction.

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Principal Obligations of the Warehouseman

(1)To take care of the goods entrusted to his safekeeping;(2)To deliver them to the holder of the receipt to the depositor, provided that the conditions

under Section 8 are fulfilled.

Offer to Satisfy Warehousemans LienA warehouseman having a lien valid against the person demanding the goods may refuse

to deliver the goods to him until his lien is satisfied.10

Furthermore, the warehouseman will becriminally liable of her delivers the goods without obtaining possession of such receipt.11

Lawful Excuses for Refusal to Deliver Goods

Even if the demand is accompanied by the three conditions under Section, the warehousemanmay still validly refuse delivery of goods covered by the warehouse receipt on some lawful

excuses provided in this act, to wit:

9Bank of PI vs. Herridge, 47 PHIL 57 [1924]

10Section 31, WRA

11The warehouseman may be punished for each offense by imprisonment of not exceeding one year or by a fine of

not exceeding two thousand pesos, or by both. Section 54, WRA


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warehouse receipts act

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