THE WAREHOUSE RECEIPTS LAW Document of Title to Goods Any document used in the
(ACT NO. 2137, AS AMENDED) 1 ordinary course of business, in the sale/transfer of goods, as
PURPOSE OF THE WRL
a. To prescribe the rights and duties of a warehouseman;
b. To regulate the relationship between a warehouseman
and the depositor of goods, or the holder of a warehouse
receipts for the goods, or other persons;
c. To render title to, and right of possession of, property
stored in warehouse more easily convertible;
d. To protect those who, in good faith and for value, acquire
negotiable warehouse receipts by negotiation.
WAREHOUSE RECEIPT
1. It is a written acknowledgement by a warehouseman that
he has received and holds certain goods therein
described in store for the person to whom it is issued.
(Talengtan Bros. & Sons vs. CA, G.R. No. L-110581,
Sept. 21, 1994)
2. It is a simple written contract between the owner of the
goods and the warehouseman to pay the compensation
for that service.
3. It is a bilateral contract. It imports that goods are in the
hands of a warehouseman and is a symbolical
representation of the property itself.
Warehouseman / Bailee A person (natural or juridical)
lawfully engaged in the business of storing goods for profit.
WHO MAY ISSUE WAREHOUSE RECEIPTS
Only a warehouseman may issue warehouse receipts to put
said warehouse receipts within the purview of the WRL.
FORM OF RECEIPTS; ESSENTIAL TERMS
1. 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 package 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 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 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 THE ESSENTIAL CONTENTS
1. A warehouseman shall be liable to any person injured
thereby all damages caused by the omission from a
ngotiable receipt of any of the terms herein required;
2. Validity of receipt not affected;
3. Negotiability of receipt not affected.
TERMS THAT CANNOT BE INCLUDED IN THE
WAREHOUSE RECEIPT
1. Those contrary to any provision of the law;
2. In any wise impair the warehouseman's 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.
Prepared By: C.E.V.A
proof of possession or control of the goods, or authorizing or
purporting to authorize the possessor of the document to
transfer or receive either by indorsement or by delivery, goods
represented by such document. (Art. 1636,NCC)
COMMON TYPES OF DOCUMENT OF TITLE
1. Bill of Lading - written acknowledgement of the receipt
of goods and an agreement to transport and to deliver
them at a specified place to a person named therein or
on his order.
a. On Board Bill of Lading issued when
the goods have been actually placed
aboard the ship with very reasonable
expectation that the shipment is as good
as on its way.
b. Port Bill of Lading issued by the
carrier to whom the goods have been
delivered and the vessel indicated in the
bill of lading by which the goods are to be
shipped is already in the port where the
goods are held for shipment.
2. Quedan warehouse receipt that covers sugar.
3. Dock Warrant warrant given by dock owners to the
owner of merchandise imported and warehoused on the
dock, upon the faith of the bills of lading, as a recognition
of his title to the goods.
FUNCTIONS OF DOCUMENTS OF TITLE
1. Evidence of receipt of goods;
2. Represents the goods and therefore operates as
transferrable document that carries with it the control
over the goods. It is used to pass title to the goods;
3. It is a contract.
MEANING OF NEGOTIABLE UNDER THE ACT
It indicates that in the passage of warehouse receipts through
the channels of commerce, the law regards the property which
they describe as following them and gives to their regular
transfer by indorsement the effect of manual delivery of the
things specified in them.
Negotiable Warehouse Receipts - A negotiable warehouse
receipt is one in which it is stated that the goods received will
be delivered either:
1. To the bearer; or
2. To the order of any person named in such receipt. (Sec.
5, WRL)
Non-Negotiable Warehouse Receipts - A non-negotiable
warehouse receipt is one in which it is stated that the goods
received will be delivered to the depositor or to any specified
person.
DUPLICATE RECEIPTS MUST BE MARKED
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.
NEGOTIATION OF WAREHOUSE RECEIPTS
A. By Delivery
1. Where by the terms of the receipt, the
warehouseman undertakes to deliver the goods
to the bearer; or
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 bearer.
The bearer document is not always a bearer document.
A special indorsement has the effect of converting the
bearer instrument into an order instrument.
B. By Indorsement Coupled with Delivery
1. If the receipt states that the goods are to be
delivered to the order of a person named
therein;
2. Effects when indorsement is necessary but the
negotiable receipt was only delivered:
a. The transferee acquires title against the
transferor;
b. There is no direct obligation of the
warehouseman to deliver the goods to
such holder of the receipt;
c. The transferee can compel the transferor
to complete the negotiation by indorsing
the instrument (Sec.43, WRL).The
negotiation takes effect on the date of the
indorsement only.
EFFECT OF NEGOTIATION OF WAREHOUSE RECEIPT
Negotiation of the document has the effect of manual delivery
so as to constitute the transferee the owner of the goods.
RIGHTS OF A PERSON TO WHOM A RECEIPT HAS BEEN
NEGOTIATED:
1. In case of receipt negotiable by delivery, such title to the
goods as the person negotiating the receipt to him had
or had ability to convey to a purchaser in good faith for
value;
2. In case of receipt negotiable by indorsement coupled by
delivery, such title to the goods as the depositor or
person to whose order the goods were to be delivered
by the terms of the receipt has or had ability to convey to
a purchaser in good faith for value;
3. The direct obligation of the warehouseman to hold
possession of the goods for him according to the terms
of the receipt as fully as if the warehouseman had
contracted directly with him. (Sec.41, WRL)
RIGHTS OF A PERSON TO WHOM A RECEIPT HAS
BEEN TRANSFERRED:
1. The title to the goods as against the transferor with
respect to a negotiable warehouse receipt not duly
negotiated (merely steps into the shoes);
2. The right, thereafter, to acquire the obligation of the
warehouseman to hold the goods for him; and
3. If the receipt is non-negotiable, such person acquires the
right to notify the warehouseman of the transfer thereof.
(Sec. 42, WRL)
Prior to the notification of the warehouseman by the transferor
or transferee of a non-negotiable receipt, the title of the
transferee to the goods and the right to acquire the obligation
of the warehouseman may be defeated by:
1. The levy of an attachment or execution upon the goods
by a creditor of the transferor; or
2. A notification to the warehouseman by the transferor or
a subsequent purchaser from the transferor of the
subsequent sale of the goods by the transferor.
But-
-unpaid sellers lien or right of stoppage in
transitu cannot defeat the right of the holder in good
faith of NWR.
-Goods covered by NWR cannot be attached or
levied upon unless receipt is surrendered.
WAREHOUSEMANS DEFENSES FOR NON-DELIVERY
OR MISDELIVERY
1. Loss or destruction of the goods without the fault of the
bailee
2. Failure to satisfy the bailees lien
Prepared By: C.E.V.A
3. Failure to surrender a negotiable document of title
4. Lack of willingness to sign acknowledgement
5. Delivery to a claimant with better right
6. Where the document of title is attached by a creditor
7. Receipt by the bailee of a request by or on behalf of the
person lawfully entitled to a right of property or
possession in the goods, not to make such delivery
8. The bailee has information that the delivery about to be
made was to one not lawfully entitled to the possession
of the goods
9. Attachment/levy of the goods by a creditor where the
document is surrendered or its negotiation is enjoined or
the document is impounded
IN CASE OF ADVERSE CLAIM, THE BAILEE MAY:
1. Refuse to deliver the goods to anyone of them until he
has had reasonable time to check the validity of the
claims.
2. File as action for interpleader and allow the claimants to
prove their claims or in case an action is filed against the
bailee, he can set up the defense of adverse claims.
WAREHOUSEMANS OBLIGATIONS
A. Under the WRL
1. Deliver the goods upon a demand made either
by the holder of a receipt for the goods or
depositor.
2. Obligation to deliver arises only if the demand
is accompanied by:
a. An offer to satisfy the warehousemans
lien;
b. An offer to surrender the receipt, if
negotiable, with such indorsement as may
be necessary for the negotiation of the
receipt; and
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.
B. Under the General Bonded Warehouse Law (Act No.
9893; R.A. 247)
1. Secure a license from the Department of
Trade and Industry;
2. File a bond equivalent to 33 % of the market
value of maximum quantity of goods to be
received for the protection of the depositors;
3. Not discriminate and must open his
warehouse to the public;
4. Be liable in the amount equivalent to double
the market value of the goods in case of
damage to the goods because the
warehouseman accepts goods in excess of
the capacity of his warehouse; and
5. Insure the goods against fire.
LIABILITY OF WAREHOUSEMAN FOR STOLEN AND
DEPOSITED GOODS
If stolen goods are deposited by the thief with a
warehouseman, the latter shall not be liable to the holder of
the receipt even if he delivers the goods to the real owners
without the receipt being surrendered to him. (Sec.11 and
141, WRL)
WAREHOUSEMANS LIEN
A warehouseman shall have a lien on the goods deposited or
on the proceeds thereof in his hands for:
1. All lawful charges for storage and preservation of the
goods;
2. All lawful claims for money advanced, interest,
insurance, transportation, labor, weighing, coopering,
and other charges and expenses in relation to such
goods; and
3. All reasonable charges and expenses for notice and
advertisements of sale, and for the sale of the goods
where default had been made in satisfying the
warehousemans lien.
REMEDIES OF A WAREHOUSEMAN TO ENFORCE HIS
LIEN
1. Refuse to deliver the goods until his lien is satisfied (Sec.
31, WRL);
2. Sell the goods and apply the proceeds thereof to the
value of the lien (Sections 33 & 34, WRL);
3. By other means allowed by law to a creditor against his
debtor (Sec. 32, WRL);
4. Such other remedies allowed by law for the enforcement
of a lien against personal property (Sec. 35, WRL).
LOSS OF LIEN
Warehousemans lien is lost either by:
1. Surrendering possession thereof; or
2. Refusing to deliver the goods when a demand is made
with which he is bound to comply (Sec. 29, WRL).
Note: When warehouseman withholds the delivery of the
goods without any valid reason, he is liable for the loss of the
goods and the liability cannot be eliminated by proof of
exercise of due diligence.
ATTACHMENT OR LEVY
Negotiable receipt the goods cannot be
attached/levied in execution unless:
1. The receipt is first surrendered
2. Its negotiation is enjoined
3. The receipt is impounded by the court (Sec. 25,
WRL)
Creditor's Remedies To Reach Negotiable
Receipt:
A creditor whose debtor is owner of a
negotiable warehouse receipt may seek for
the attachment of the receipt or seek aid from
the courts to compel the debtor to satisfy
claims by means allowed by law in regard to
property which cannot readily be attached or
levied upon by ordinary legal process. (Sec.
26, WRL)
It does not apply when:
1. The depositor is not the owner of the
goods (thief) or one who has no right to
convey title to the goods binding upon the
owner;
2. The action for recovery or manual
delivery of goods by the real owner;
3. Where attachment is made prior to the
issuance of receipt.
Non-negotiable the goods can be attached, provided it
is done prior to the notification of the bailee of the
transfer. (Sec. 42, WRL)
WARRANTIES OF TRANSFEROR
A person who, for value, negotiates or transfers a receipt by
indorsement or delivery, including one who assigns for value
a claim secured by a receipt, unless a contrary intention
appears, warrants that:
1. The receipt is genuine;
2. He has a legal right to negotiate or transfer it;
3. He has knowledge of no fact which would impair the
validity or worth of that receipt;
4. He has a right to transfer the title to the goods; and
5. 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. (Sec.
44, WRL)
Prepared By: C.E.V.A
REVIEW QUESTIONS1
BQ (1999)
A Warehouse Company received for safekeeping
1,000 bags of rice from a merchant. To evidence the
transaction, the Warehouse Company issued a receipt
expressly providing that the goods be delivered to the
order of said merchant.
A month after, a creditor obtained judgment against
said merchant for a sum of money. The sheriff
proceeded to levy on the rice and directed the
Warehouse Company to deliver to him the deposited
rice.
Q1:What advice will you give the Warehouse Company.
Explain your answer.
Q2:Assuming that a week prior to the levy, the
receiptwas sold to a rice mill on the basis of which it
filed a claim with the sherill. Would the rice mill have
better rights to the rice than the creditor?
A1: The 1,000 bags of rice were delivered to the
Warehouse Company by a merchant, and a
negotiable receipt was issued therefor. The rice
cannot thereafter, while in the possession of the
Warehouse Company, be attached by garnishment
or otherwise, or be levied upon under an execution
unless the receipt be first surrendered to the
warehouseman, or its negotiation enjoined. The
Warehouse Company cannot be compelled to
deliver the actual possession of the rice until the
receipt is surrendered to it or impounded by the
court.
A2: Yes. The rice mill, as holder for value of the receipt,
has a better right to the rice than the creditor. It is the
rice mill that can surrender the receipt which is in its
possession and can comply with the other
requirements which will oblige the warehouseman to
deliver the rice, namely, to sign a receipt for the
delivery of the rice, and to pay the warehousemans
liens and fees and other charges.
*****
BQ (2005)
Jojo deposited several cartons of goods with SN
Warehouse Corporation. The corresponding warehouse
receipt was issued to the order of Jojo. He endorsed the
warehouse receipt to EJ who paid the value of the goods
deposited. Before EJ could withdraw the goods, Melchor
informed SN Warehouse Corporation that the goods
belonged to him snd were taken by Jojo without his
consent. Melchor wants to get the goods, but EJ also
wants to withdraw the same.
Q1: Who has a better right to the goods? Why?
Q2: If SN Warehouse Corporation is uncertain as to who
is entitled to the property, what is the proper
recourse of the corporation? Explain.
A1: EJ has better right to the goods. The goods are
covered by a negotiable warehouse receipt which
was indorsed to EJ for value. The negotiation to EJ
was not impaired by the fact that Jojo took the
goods without the consent of Melchar, as EJ had no
notice of such fact. Moreover, EJ is in possession
of the warehouse receipt and only he can surrender
it to the warehouseman. (Sec. 8, WRL)
A2: Since there are conflicting claims of ownership of
title, SN Warehouse Corporation should file a
complaint in interpleader. The matter involves a
judicial question as to whose claim is valid.
BQ (2007)
Alex deposited goods for which Billy, a warehouseman,
issued a negotiable warehouse receipt wherein the
goods were delivered to Alex or order. Alex negotiated
 the receipt to Caloy. Thereafter, Dario, a creditor,
secured judgment against Alex and served notice of levy
over the goods on the warehouseman.
Q1: To whom should the warehouseman deliver the
goods upon demand?
Q2: Would your answer be the same if the
warehouseman issued a non-negotiable
warehouse receipt? Reason briefly.
A1: The warehouseman should deliver the goods to
Caloy. The goods cannot be attached by
garnishment or otherwise, or levied upon, unless
the receipt be first surrendered to the
warehouseman, or its negotiation is enjoined. (Sec.
25, WRL)
A2: No. The non-negotiable warehouse receipt does not
confer upon the transferee the direct obligation of
the warehouseman to hold possession of the goods
for him. (Sec, 42, WRL). In such a case, the law
provides that when a non-negotiable warehouse
receipt is transferred to Caloy, he only gets such
title to the goods as alex had and aso a right to
notify the warehouseman to hold the goods for
Caloys account. Prior to such notice, Caloys claim
can be defeated by a levy of execution upon the
goods by a creditor of Alex.
*****
Q: Coco was issued by a warehouseman a negotiable receipt
for safekeeping by the latter of his goods. Can the judgment
creditor of Coco levy by execution the goods covered by the
negotiable receipt?
A: The goods cannot, while in the possession of the
warehouseman, be attached by garnishment or otherwise, or
be levied upon under an execution unless the receipt be first
surrendered to the warehouseman, or its negotiation
enjoined. The warehouseman cannot be compelled to deliver
the actual possession of the goods until the receipt is
surrendered to it or impounded by the court.
*****
Q. X deposits his goods in Y's warehouse, for which Y issues
Warehouse receipt No. 00021 which stated that the goods
received will be delivered to the bearer or to the order of any
person named in such receipt.
1. Suppose X negotiates the warehouse receipt to Z,
can Z convert the receipt to a non-negotiable
warehousr receipt by writing on its face the word
"non-negotiable"?
A: No. Z cannot conver the receipt in that manner.
According to Section 5 of the WRL, a negotiable
warehouse receipt cannot be converted into a non-
negotiable warehouse receipt by inserting any
provision in the negotiable receipt that it is non-
negotiable.
2. X negotiates the warehouse receipt to M. M, in
claiming the goods covered by the receipt, does not
bring with him the receipt, but simply makes an oral
demand on Y and nothing more. Can Y validly
refuse to deliverthe goods? Explain.
A: Yes, Y can validly refuse to deliver the goods.
The warehouseman is bound to deliver the goods
upon demand either by the holder of a receipt for
the goods or by the depositor, provided that such
demand is accompanied by:
a. an offer to satisfy the warehouseman lien;
b. an offer to surrender the receipt if it is
negotiable, and
c. a readiness and willingness to sign an
acknowledgement, when the goods are
delivered, that they have been dleivered if such
is requested by the warehouseman.
3. Suppose instead of claiming the goods himself, M
indorses the receipt in blank to N. O, sees this and
waits for an opportunity to steal the receipt. O
succeeds and got to Y, demanding the goods. A
few minutes before, however, Y was informed that
Prepared By: C.E.V.A
Warehouse Receipt No. 00021 had been stolen.
Should Y deliver the goods to O? Explain.
A: No. Y should not deliver the goods to O. If Y were
to deliver the goods to O, Y could be liable for
misdelivery under Sec. 10, WRL, as Y had
information that the delivery about to be made was
to one not lawfully entitled to the possession of the
goods. Y, being aware of the theft, is justified in
refusing delivery to O.
I. Nature and Function2
1. One of these statements is not correct:
a) A warehouse receipt serves as proof of
possession of the warehouseman of the goods
described in it and as authorization for the
possessor of the warehouse receipt to transfer or
receive the goods described in it.
b) A non-negotiable receipt is one in which it is
stated that the goods received will be delivered
to the depositor or to any other specified person.
c) A negotiable receipt is a 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 the receipt.
d) A warehouse receipt is not a document of title
2. One of these statements is not correct:
a) When a negotiable instrument is altered, it
becomes null and void. When a negotiable
warehouse receipt is altered, it is still valid but
may be enforced only in accordance with its
original tenor.
b) A negotiable instrument which is originally
payable to bearer remains so payable even if it is
indorsed specially. A negotiable receipt
deliverable to bearer if indorsed specially
becomes deliverable to order.
c) The holder in due course of a negotiable
instrument may be able to obtain a title better
than that of the indorser. An indorsee of a
negotiable receipt acquires only such title as the
person who negotiated had over the goods even
if he is a holder in due course.
d) Both in a negotiable instrument and in a
negotiable receipt the indorser warrants that all
prior parties had capacity to contract.
II. Duties of Warehouseman
A. Delivery of Goods
1. One of these is not required to bind the
warehouseman to deliver the goods:
a) An offer to satisfy his lien.
b) An offer to surrender the receipt, if it is
negotiable, with indorsements necessary for
its negotiation.
c) A readiness and willingness to sign upon
delivery of the goods, an acknowledgment that
they have been received, if the
warehouseman requests it.
d) An undertaking to hold the warehouseman
harmless from claims of third parties.
2. A warehouseman is not justified in delivering the
goods to one of the following:
a) The person lawfully entitled to the possession
of the goods or his agent.
b) A person entitled to the delivery by the terms
of the non-negotiable receipt for goods or has
written authority from such person.
c) A person in possession of a negotiable receipt
for goods deliverable to him or his order or to
bearer, which has been indorsed to him or in
 blank by the person to whom delivery was
promised or by his indorsee.
d) The pledgee of the goods covered by the
receipt.
3. One of these statements is not correct:
a) The general rule is that a warehouseman
cannot invoke the right or title of a third person
as an excuse for not delivering the goods
covered by a receipt.
b) By way of exception, the warehouseman may
withhold delivery until he has had reasonable
opportunity to ascertain the validity of the
claim of the third party or to file an action for
interpleader.
c) If the goods were lawfully sold to satisfy the
lien of the warehouseman or were lawfully sold
or disposed of because of their perishable or
hazardous nature, the warehouseman is not
liable for not delivering them.
d) If the warehouse receipt was fraudulently
altered, the warehouseman will be discharged
from liability to deliver the goods.
4. One of these statements is not correct:
a) A warehouseman cannot set up title in himself
as an excuse for refusing to deliver the goods
unless the title is directly or indirectly from a
transfer by the depositor or from enforcement
of his lien.
b) If a warehouseman delivers goods covered by
a warehouse receipt and does not take up and
cancel it, he will be liable to anyone who
purchases the warehouse receipt in good faith
and for value.
c) If a warehouseman delivers a part of the
goods for which he issued a negotiable receipt
and did not take up and cancel the receipt or
state plainly upon it what goods were
delivered, he will be liable to anyone who
purchased the receipt in good faith and for
value.
d) A warehouseman is not liable to the holder of
a receipt if the goods do not correspond with
the description in it.
B. Safekeeping of the Goods
1. One of these statements is not correct:
a) A warehouseman is liable for any loss or injury
to the goods caused by his failure to exercise
such care as a reasonably careful owner
would exercise.
b) In the absence of a stipulation to the contrary,
the warehouseman is not liable for any loss or
injury to the goods which could not have been
avoided by exercise of such care.
c) A warehouseman is not liable for loss due to a
fortuitous event.
d) The person claiming the goods has the burden
of proving the loss was due to the fault of the
warehouseman.
III. Warehousemans Lien
A. Claims Included and Properties Covered
1. One of these statements is not correct:
a) A warehouseman has a lien on the goods
deposited or their proceeds in his hands for all
lawful charges for storage and preservation of
the goods, for all lawful claims in relation to the
goods, for all reasonable charges and expenses
for notice and advertisement for sale, and for
sale of the goods.
b) If the receipt is negotiable, the warehouseman
will have no lien on the goods except charges for
Prepared By: C.E.V.A
storage, unless the receipt expressly
enumerates other charges for which a lien is
claimed.
c) A warehouseman has a lien against all goods
belonging to the person liable for the claims with
respect to which a lien is asserted.
d) A warehouseman cannot have a lien against the
goods if the depositor was merely entrusted with
its possession, even if the warehouseman acted
in good faith and for value.
B. Enforcement of Warehousemans Lien
1. One of these statements is not correct:
a) A warehousemans lien may be satisfied by
selling the goods.
b) The warehouseman must give the person for
whose account he is holding the goods or any
other person he knows to claim an interest in the
goods notice to pay within ten days.
c) If the warehouseman is not paid, an
advertisement of the sale must be published
once a week for three consecutive weeks in a
newspaper published in the place of the sale.
d) The sale cannot be made less than 15 days
before the date of the first publication.
2. One of these statements is not correct:
a) If there is no newspaper published in the place of
the sale, the advertisement must be posted at
least 10 days before the sale in six conspicuous
places.
b) A sale held without complying with the
publication and before the prescribed time is
void.
c) In case of deficiency in the proceeds of the sale,
the warehouseman cannot sue for the deficiency.
d) If the proceeds of the sale exceed the amount
due the warehouseman, the excess shall be
delivered to the person entitled to the delivery of
the goods.
IV. Negotiation and Transfer of Warehouse Receipts
A. Negotiation
1. One of these statements is not correct:
a) A negotiable receipt may be negotiated by
delivery if by its terms the goods are deliverable
to the bearer or by its terms the goods are
deliverable to the order of a specified person and
he or a subsequent indorsee indorsed the receipt
in blank or to bearer.
b) If the goods are deliverable to bearer or the
negotiable receipt was indorsed in blank or to
bearer, even if the holder indorsed it to himself or
a specified person, the receipt can be negotiated
further by delivery.
c) The warrant of a negotiable receipt by the person
to whose order the goods are deliverable may be
in blank, to bearer, or to a specified person.
d) Subsequent negotiations may be made in the
same manner.
2. One of these statements is not correct:
a) A negotiable receipt may be negotiated by the
owner.
b) If by the terms of a negotiable receipt, the goods
are deliverable to the order of the person to
whose possession the owner of the receipt
entrusted it, such person cannot negotiate the
receipt.
c) A person to whom a negotiable receipt was
negotiated acquires such title to the goods as the
person negotiating had ability to convey to a
buyer in good faith and for value.
 d) A person to whom a negotiable receipt was
negotiated acquires the direct obligation of the
warehouseman to hold the goods for him.
3. One of these statements is not correct:
a) The negotiation of a negotiable receipt is not
impaired by the fact that it was a breach of duty
of the person negotiating it or that the owner of
the receipt was induced by fraud, mistake or
duress to entrust the receipt to such person if the
person to whom it was negotiated took it in good
faith and for value.
b) If a person who sold goods covered by a
negotiable receipt remained in possession of it,
the negotiation of the receipt to a person who
took it in good faith and for value has the same
effect as if the first buyer had authorized the
negotiation.
c) A sellers lien or right of stoppage in transitu will
defeat the rights of a buyer in good faith and for
value to whom the receipt was negotiated.
d) If a warehouseman who sold sugar covered by a
negotiable receipt was not paid by the buyer, the
negotiation of the receipt by the buyer is valid.
"goods" includes all chattels personal other than things in
action and money;
"holder", as applied to a negotiable receipt, means a person
who has possession of the receipt and a right of property
therein, and, as applied to a non-negotiable receipt, means a
person named therein as the person to whom the goods are
to the delivered or his transferee;
"negotiable receipt" means a receipt in which it is stated that
the goods therein specified will be delivered to bearer or to the
order of a named person;
"non-negotiable receipt" means a receipt in which it is
stated that the goods therein specified will be delivered to the
holder thereof;
"purchase" includes to take as mortgagee or as pledgee;
"purchaser" includes mortgagee and pledgee;
"receipt" means a warehouse receipt;

B. Transfer of Rights "warehouse receipt" means an acknowledgment in writing

1. One of these statements is not correct: by a warehouseman of the receipt for a storage of goods not
a) A non-negotiable receipt may not be transferred his own;
by delivery.
b) The negotiation of a non-negotiable receipt does "warehouseman" means a person who received goods for
not give the transferee any additional right.
storage for reward. R.S., c. 333, s. 1.
c) A person to whom a non-negotiable receipt was
transferred acquires as against the transferor title
to the goods subject to their agreement.
d) A person to whom a non-negotiable receipt was
transferred acquires the right to notify the 1. The Warehouse Receipts Law. Retreived: Dec 14,2013 from http://credit-
warehouseman of the transfer to him and to trans.blogspot.com/2012/09/warehouse-recepts-law.html
acquire the direct obligation of the
2. Bar Reviewer In Mercantile Law. Retreived: Dec 14,2013 from
warehouseman to hold the goods for him. https://www.google.com.ph/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&c
ad=rja&ved=0CEEQFjAE&url=http%3A%2F%2Fxa.yimg.com%2Fkq%2Fgrou
2. One of these statements is not correct: ps%2F22047546%2F1652942981%2Fname%2FMercantile%2BLaw.doc&ei=
v_SrUpa4B4TYigeLloCYAg&usg=AFQjCNEtmGu_M2_ezlRe_i9KQ-
b6fh7YYg&bvm=bv.57967247,d.aGc
a) Before the notification to the warehouseman, the
title of the transferee to the goods maybe 3. Warehouse Receipts Act. Retrieved:Dec 14, 2013 from
defeated by a levy upon them by a creditor of the http://nslegislature.ca/legc/statutes/warerec.htm
goods.
b) Before the notification to the warehouseman, the
title of the transferee to the goods may be
defeated by a notification to the warehouseman
of a subsequent sale of the goods.
c) If a negotiable receipt is transferred for value by
delivery and indorsement is necessary for its
negotiation, the transferee can compel the
transferor to indorse it.
d) The effect of the negotiation will retroact to the
date of the transfer of the receipt.

DEFINITION OF TERMS3

"action" includes counterclaim and set-off;

"fungible goods" means goods of which any unit is, from its
nature or by mercantile custom, treated as the equivalent of
any other unit;

Prepared By: C.E.V.A