Overseas Bank of Manila vs.

Cordero Facts: Private respondent opened a 1-year time deposit with petitioner bank amounting to P80,000, with interest of 6% p.a. Due to its distressed financial condition, the bank was unable to pay. Cordero instituted an action before the CFI Manila. Petitioner raised the defenses of insolvency and prejudice to other depositors. The lower court, and the Court of Appeals, ruled in favor of Cordero. Hence, the instant petition for review on certiorari. Certain supervening events rendered the issue moot and academic. Respondents brother and attorney-in-fact sent a letter to the Commercial Bank of Manila (petitioners successor-in-interest), acknowledging receipt of P10,000, and another manifestation for P73,840, with waiver of damages. Upon further examination, it was found that the respondents brother has no SPA. Respondents brother submitted the SPA, with explanatory comment that the waiver applies only to third party claims, suits and damages, not to interest and attorneys fees. Issue: Whether respondent is entitled to interest and attorneys fees Held: The obligation to pay interest on the deposit ceases the moment the operation of the bank is completely suspended by the Central Bank. Neither can respondent Cordero recover attorneys fees. Petitioners refusal to pay was not due to a willful and dishonest refusal to comply with its obligation but to restrictions imposed by Central Bank. Bank of P.I. v. Herridge FACTS: The insolvent Umberto de Poli was for several years engaged on an extensive scale in the exportation of Manila hemp, maguey and other products of the country.

He was also a licensed public warehouseman, though most of the goods stored in his warehouses appear to have been merchandise purchased by him for exportation and deposited there by he himself.chanr In order to finance his commercial operations De Poli established credits with some of the leading banking institutions doing business in Manila at that time, among them the Hongkong & Shanghai Banking Corporation, the Bank of the Philippine Islands, the Asia Banking Corporation, the Chartered Bank of India, Australia and China, and the American Foreign Banking Corporation. De Poli opened a current account credit with the bank against which he drew his checks in payment of the products bought by him for exportation. Upon the purchase, the products were stored in one of his warehouses and warehouse receipts issued therefor which were endorsed by him to the bank as security for the payment of his credit in the account current. When the goods stored by the warehouse receipts were sold and shipped, the warehouse receipt was exchanged for shipping papers, a draft was drawn in favor of the bank and against the foreign purchaser, with bill of landing attached, and the entire proceeds of the export sale were received by the bank and credited to the current account of De Poli.chanroble De Poli was declared insolvent by the Court of First Instance of Manila with liabilities to the amount of several million pesos over and above his assets. An assignee was elected by the creditors and the election was confirmed by the court Among the property taken over the assignee was the merchandise stored in the various warehouses of the insolvent. This merchandise consisted principally of hemp, maguey and tobacco. The various banks holding warehouse receipts issued by De Poli claim ownership of this merchandise under their respective receipts, whereas the other creditors of the insolvent maintain that the warehouse receipts are not negotiable, that their endorsement to the present holders conveyed no title to the property, that they cannot be regarded as pledges of the merchandise inasmuch as they are not

public documents and the possession of the merchandise was not delivered to the claimants and that the claims of the holders of the receipts have no preference over those of the ordinary unsecured creditors.law lib

ISSSUE: Whether or not the warehouse receipts issued are negotiable? HELD: Yes, a warehouseman who deposited merchandise in his own warehouse, issued a warehouse receipts therefore and thereafter negotiated the receipts by endorsement. The receipt recites that the goods were deposited por orden of the depositor, the warehouseman, but contained no statement that the goods were to be delivered to the bearer of the receipts or to a specified person. It is in the form of a warehouse receipts and was not mark nonnegotiable. Therefore the receipts was negotiable warehouse receipts and the words por orden must be construed to mean to the order. PNB v PRODUCERS WAREHOUSE ASSOCIATION FACTS: - PNB (P) is a bank in PH, Producers Warehouse Association (D) is a domestic corporation doing general warehouse business and Phil. Fiber and Produce Company (Fiber) is another domestic corporation. - D and Fiber entered into a written contract, wherein Fiber would act as the general manager of the business of D and that Fiber would exercise a general and complete supervision over the management of the business of D. - Nov and Dec 1918 D issued negotiable quedans to Fiber for 15k++ piculs of Copra, which the terms states that o D agreed to deliver that amount of copra to Fiber or its order o D will deliver the packages noted therein upon the surrender of the warrant to D

o No transfer of interest/ownership will be recognized unless registered in the books of D o The words negotiable warrant were printed in red ink in the quedan Fiber then arranged for overdraft with P for P1M and to secure it, the subject quedans were endorsed in blank and delivered by Fiber to P, which became the owner and holder thereof. P later on requested D the delivery of copra described in the quedans, however, D refused to comply despite repeated requests of P, stating that it could not be delivered since the goods mentioned are not in the warehouse. D stated that the quedans were invalid and wrongfully issued and that the copra was not in its warehouse LC ruled in favor of D

ISSUE: WoN the quedans were validly negotiated to P SC: YES! - The quedans have legal force and effect o They were duly executed by Wicks, as treasurer and Torres as warehouseman, for and in behalf of D. o The said quedans were endorsed in blank and physical possession was delivered to P as collateral security for the overdraft of Fiber Company and o That the quedans were in negotiable form. - D cannot now deny the existence of the quedans - Consolidated Terminals vs. Artex Development Co. - 63 SCRA 46 (1975) - Facts: CTI was the operator of a customs bonded warehouse located at Port Area, Manila. It received on deposit of 193 bales of high density compressed raw cotton. It was understood that CTI would keep the cotton in behalf of Luzon Brokerage Corporation until the consignee thereof, Paramount Textile Mills, Inc., had opened the corresponding letter of credit in favor of shipper. -

- Allegedly by virtue of a forged permit to deliver imported goods, purportedly issued by the Bureau of Customs, Artex was able to obtain delivery of the bales of cotton on after paying CTI P15,000 as storage and handling charges. At the time the merchandise was released to Artex, the letter of credit had not yet been opened and the customs duties and taxes due on the shipment had not been paid. - CTI, in its original complaint, sought to recover possession of the cotton by means of a writ of replevin. The writ could not be executed. CTI then filed an amended complaint by transforming its original complaint into an action for the recovery from Artex of P99,609.76 as compensatory damages, P10,000 as nominal and exemplary damages and P20,000 as attorney's fees - It should be clarified that CTI alleged that Artex acquired the cotton from Paramount Textile Mills, Inc., the consignee. Artex alleged in its motion to dismiss that it was not shown in the delivery permit that Artex was the entity that presented that document to the CTI. Artex further averred that it returned the cotton to Paramount Textile Mills, Inc. when the contract of sale between them was rescinded because the cotton did not conform to the stipulated specifications as to quality. - Issue/s: Whether CTI has a cause of action against Artex - Ruling: CTI in this appeal contends that, as warehouseman, it was entitled to the repossession of the bales of cotton; that Artex acted wrongfully in depriving CTI of the possession of the merchandise because Artex presented a falsified delivery permit, and that Artex should pay damages to CTI. - The only statutory rule cited by CTI is section 10 of the Warehouse Receipts Law which provides that "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 as for conversion to all having a right of property or possession in the goods ...". - We hold that CTI's appeal has not merit. Its amended complaint does not clearly show that, as warehouseman, it has a cause of action for damages

against Artex. The real parties interested in the bales of cotton were Luzon Brokerage Corporation as depositor, Paramount Textile Mills, Inc. as consignee, Adolph Hanslik Cotton as shipper and the Commissioners of Customs and Internal Revenue with respect to the duties and taxes. These parties have not sued CTI for damages or for recovery of the bales of cotton or the corresponding taxes and duties. - The case might have been different if it was alleged in the amended complaint that the depositor, consignee and shipper had required CTI to pay damages, or that the Commissioners of Customs and Internal Revenue had held CTI liable for the duties and taxes. In such a case, CTI might logically and sensibly go after Artex for having wrongfully obtained custody of the merchandise. - But that eventuality has not arisen in this case. So, CTI's basic action to recover the value of the merchandise seems to be untenable. It was not the owner of the cotton. How could it be entitled to claim the value of the shipment? - -o- The negotiation of the warehouse receipt by the buyer of goods purchased from and deposited to the warehouse is valid even if the warehouseman who issued a negotiable warehouse receipt was not the buyer. The validity of the negotiation cannot be impaired by the fact that the owner/warehouseman was deprived of the possession of the same by fraud, mistake or conversion. - Lua Kian v. Manila Railroad, 19 SCRA 5 (1967) o FACTS: Lua Kian imported 2,000 cases of Carnation Milk from San Francisco. The said goods were shipped and subsequently discharged to Manila Port Services. However, only 1, 829 were received by the Manila Port Service. From the same vessel, about 3, 171 cases of Carnation Milk were on the other hand discharged to the Manila Port Service for the account of Cebu United Enterprise despite the fact that the bill of lading provides for only 3,000 cases. Lua Kian filed a suit against the Manila Port Service for the undelivered articles. The Manila Port Service on the other hand contends that it actually

delivered 1,913 cases to Lua Kian when it was only bound to deliver 1,829. Thus, it has even over-delivered. o ISSUE: Whether or not the Manila Port Service as an Arrastre Operator is liable to Lua Kian o HELD: Although it is true, that arrastre operators are exempted from responsibility for mis-delivery or non-delivery due to improper or insufficient marking, the defendants cannot invoke such since it is clear from the bills of lading that 2,000 cases has to be delivered to Lua Kian and 3,000 to Cebu United. It should have been sufficient reason for the Manila Port Service to withhold the delivery of the said anomalous goods. The legal relationship between an arrastre operator and the consignee is akin to that of a depositor and a warehouseman. With the given circumstances, the Warehouse Receipts Law provides that the former should have withheld delivery because of the discrepancy between the bill of lading and the markings and called the parties to interplead so as to determine the rightful owner of the goods