PNB vs. HON. MARCELINO L. SAYO, JR, NOAH'S ARK SUGAR
129918
REFINERY, ALBERTO T. LOOYUKO, JIMMY T. GO and WILSON
GO
Date July 9, 1998
TOPIC IN SYLLABUS: Warehouse Receipts Law
SUMMARY: Noah's Ark Sugar Refinery issued Warehouse Receipts
Merchandising, and St. Therese Merchandising. These Warehouse
Zoleta. Ramos and Zoleta then used the quedans as security for loan
PNB. Ramos and Zoleta failed to pay their loans upon maturity. Hence, PNB wrotetotoenforce
stocks covered by the quedans endorsed to it by Zoleta and Ramos. Noah's
alleging ownership thereof. SC held that private respondents may enforce
storage fees.
PROCEDURAL ANTECEDENTS:
In this special civil action for certiorari, actually the third
dispute between the same private parties to have reached
this Court, petitioner asks us to annul the orders issued by
the Regional Trial Court, Manila, Branch 45.
FACTS:
In accordance with the Warehouse Receipts Law, Noah's
Ark Sugar Refinery issued on several dates Warehouse
Receipts (Quedans) covering sugar deposited by Rosa Sy,
RNS Merchandising, and St. Therese Merchandising. The
receipts are substantially in the form, and contains the terms,
prescribed for negotiable warehouse receipts by Section 2 of
the law.
Subsequently, Warehouse Receipts were negotiated and
endorsed to Luis T. Ramos and to Cresencia K. Zoleta.
Ramos and Zoleta then used the quedans as security for two
loan agreements — one for P15.6 million and the other for
P23.5 million — obtained by them from the PNB. The
aforementioned quedans were endorsed by them to PNB.
Ramos and Zoleta failed to pay their loans upon maturity.
Hence, PNB wrote to Noah's Ark Sugar Refinery demanding
delivery of the sugar stocks covered by the quedans
endorsed to it by Zoleta and Ramos. Noah's Ark Sugar
Refinery refused to comply with the demand alleging
ownership thereof. It alleged that the owner of Noah’s Ark,
Looyuko, entered into an agreement with RNS and St.
Therese Merchandising to sell the sugar indicated in the
warehouse receipts stored in Noah for an amount of
P63,000,000. Checks were issued but they were dishonored
for being drawn against insufficient funds. PNB filed with the
RTC of Manila a verified complaint for "Specific Performance
with Damages and Application for Writ of Attachment"
against Noah's Ark Sugar Refinery, Alberto T. Looyuko,
Jimmy T. Go and Wilson T. Go, the last three being identified
as the sole proprietor, managing partner, and Executive Vice
President of Noah's Ark, respectively. RTC dismissed said
complaint. MR denied.
On appeal to the SC via petition for review on certiorari, the
Supreme Court ordered Noah’s Ark and its owner, Looyuko,
to deliver to PNB the sugar stocks covered by the warehouse
receipts in controversy. However, Noah’s Ark filed an
Omnibus Motion seeking deferment of the judgment until it
was heard on its warehouseman’s lien. RTC granted the
order and evidence was received in support thereof. RTC
adjudged that there existed a valid lien in favor of Noah’s Ark,
and accordingly, execution of the judgment against Noah’s
Ark should be stayed until the full amount of Noah’s lien shall
have been satisfied. PNB then filed certiorari proceedings
before the Supreme Court. The SC held that while PNB was
entitled to the sugar stocks as endorsee of the receipts,
delivery to it shall only be effected upon payment of the
storage fees. The Supreme Court further ruled that
imperative is the right of the warehouseman to demand
payment of his lien because he loses his lien upon goods by
surrendering possession thereof.RTC Judge Sayo, Jr.
allowed a writ of execution in favor of Noah to collect on its
warehouseman’s lien against PNB. Hence, this certiorari
proceeding before the Supreme Court.
ISSUES: G.R. No. G.R. No.
1. T. WON private respondents may enforce their
warehouseman’s lien. YES.
2. WON PNB is DAVIDE,
Ponente liable for storage
JR. fees. YES.
RULING:
1. Under (Quedans)
the Specialcovering sugar deposited
Circumstances in This Case,by Sy, RNS
Private
Respondents May Enforce Their Warehouseman's Lien.to
Receipts were negotiated and endorsed to Ramos and
from the PNB.
The remedies Thetoquedans
available were endorsed
a warehouseman, such by them to
as private
respondents, Noah'shisArkwarehouseman's
demanding delivery lien of the sugar
are:
Ark Sugar
(1) To refuse Refinery
to deliver therefused
goods to comply
until withisthe
his lien demand
satisfied,
their warehouseman’s lien and that
pursuant to Section 31 of the Warehouse Receipt Law; PNB is liable for
(2) To sell the goods and apply the proceeds thereof to the
value of the lien pursuant to Sections 33 and 34 of the
Warehouse Receipts Law; and
(3) By other means allowed by law to a creditor against his
debtor, for the collection from the depositor of all charges and
advances which the depositor expressly or impliedly
contracted with the warehouseman to pay under Section 32
of the Warehouse Receipt Law; or such other remedies
allowed by law for the enforcement of a lien against personal
property under Section 35 of said law. The third remedy is
sought judicially by suing for the unpaid charges.
CAB: Initially, private respondents availed of the first
remedy. While the most appropriate remedy for private
respondents was an action for collection, SC already
recognized their right to have such charges and fees
determined. The import of SC’s holding was that private
respondents were likewise entitled to a judgment on their
warehouse charges and fees, and the eventual satisfaction
thereof, thereby avoiding having to file another action to
recover these charges and fees, which would only have
further delayed the resolution of the respective claims of the
parties, and as a corollary thereto, the indefinite deferment
of the execution of the judgment. Thus we note that
petitioner, in fact, already acquiesced to the scheduled dates
previously set for the hearing on private respondents'
warehouseman's charges. But, it would be premature to
execute the order fixing the warehouseman's charges and
fees.
2. Petitioner is Liable for Storage Fees.
Petitioner insisted that it was a mere pledgee as the quedans
were used to secure two loans it granted.
The SC agreed with this and held that the indorsement and
delivery of the receipts by Ramos and Zoleta to PNB was not
to convey title to or ownership of the goods but to secure the
loans by way of pledge. The indorsement of the receipts to
perfect the pledge merely constituted a symbolical or
constructive delivery of the possession of the thing thus
encumbered. The creditor, in a contract of real security, like
pledge, cannot appropriate without foreclosure the things
given by way of pledge. Any stipulation to the contrary is null
and void for being pactum commissorio. The law requires
foreclosure in order to allow a transfer of title of the goods
given by way of security from its pledgor, and before any
such foreclosure, the pledgor, not the pledgee, is theowner
of the goods. However, the SC held that the warehouseman
nevertheless is entitled to his lien that attaches to the goods
invokable against anyone who claims a right of possession
thereon.
The SC held that where a valid demand by the lawful holder
of the receipts for the delivery of the goods is refused by the
warehouseman, despite the absence of a lawful excuse
provided by the law itself, the warehouseman’s lien is
thereafter concomitantly lost. As to what the law deems a
valid demand, Section 8 of the Warehouse Receipts Law
enumerates what must accompany a demand; while as
regards the reasons which a warehouseman may invoke to
legally refuse to effect delivery of the goods covered by the
quedans, these are:
(1) That the holder of the receipt does not satisfy the
conditions prescribed in Section 8 of the Act. (See Sec. 8,
Act No. 2137)
(2) That the warehouseman has legal title in himself on the
goods, such title or right being derived directly or indirectly
from a transfer made by the depositor at the time of or
subsequent to the deposit for storage, or from the
warehouseman's lien. (Sec. 16, Act No. 2137)
(3) That the warehouseman has legally set up the title or right
of third persons as lawful defense for non-delivery of the
goods
(4) That the warehouseman having a lien valid against the
person demanding the goods refuses to deliver the goods to
him until the lien is satisfied. (Sec. 31 Act No. 2137)
(5) That the failure was not due to any fault on the part of the
warehouseman, as by showing that, prior to demand for
delivery and refusal, the goods were stolen or destroyed by
fire, flood, etc., without any negligence on his part, unless he
has contracted so as to be liable in such case, or that the
goods have been taken by the mistake of a third person
without the knowledge or implied assent of the
warehouseman, or some other justifiable ground for non-
delivery.
The SC explained that regrettably, the factual settings do not
sufficiently indicate whether the demand to obtain
possession of the goods complied with Sec. 8. The
presumption, nevertheless, would be that the law was
complied with. On the other hand, it would appear that the
refusal of Noah’s Ark to deliver the goods was not anchored
on a valid excuse, i.e., non-satisfaction of the lien over the
goods, but on an adverse claim of ownership. Under the
circumstances, this hardly qualified as a valid, legal excuse.
The loss of the lien, however, does not necessarily mean the
extinguishment of the obligation to pay the warehousing fees
and charges which continues to be a personal liability of the
owners, i.e., the pledgors, not the pledgee, in this case. But
even as to the owners-pledgors, the warehouseman fees
and charges have ceased to accrue from the date of the
rejection by Noah to heed the lawful demand by PNB for the
release of the goods. Hence, the time from which the fees
and charges should be made payable is from the time Noah’s
Ark refused to heed PNB’s demand for delivery of the sugar
stocks and in no event beyond the value of the credit in favor
of the pledgee since it is basic that, in foreclosures, the buyer
does not assume the obligations of the pledgor to his other
creditors even while such buyer acquires title over the goods
less any existing preferred lien thereover.
diligence in the selection and supervision of its employees
particularly defendant Justimbaste. Both failed and refused
to pay its valid, just, and lawful claim despite written
demands.
ISSUE: Is petitioner liable for the loss of See’s vehicle?
RULING: Yes.
Article 1962, in relation to Article 1998, of the Civil Code
defines a contract of deposit and a necessary deposit made
by persons in hotels or inns:
Art. 1962. A deposit is constituted from the moment a person
receives a thing belonging to another, with the obligation of
safely keeping it and returning the same. If the safekeeping
of the thing delivered is not the principal purpose of the
contract, there is no deposit but some other contract.
Art. 1998. The deposit of effects made by travelers in hotels
or inns shall also be regarded as necessary. The keepers of
hotels or inns shall be responsible for them as depositaries,
provided that notice was given to them, or to their
employees, of the effects brought by the guests and that, on
the part of the latter, they take the precautions which said
hotel-keepers or their substitutes advised relative to the care
and vigilance of their effects.
Plainly, from the facts found by the lower courts, the insured
See deposited his vehicle for safekeeping with petitioner,
through the latter’s employee, Justimbaste. In turn,
Justimbaste issued a claim stub to See. Thus, the contract
of deposit was perfected from See’s delivery, when he
handed over to Justimbaste the keys to his vehicle, which
Justimbaste received with the obligation of safely keeping
and returning it. Ultimately, petitioner is liable for the loss of
See’s vehicle.

DURBAN APARTMENTS CORPORATION vs. PIONEER

INSURANCE AND SURETY CORPORATION

G.R. No. 179419, 12 January 2011

FACTS: July 22, 2003, Pioneer Insurance and Surety Corp,

by right of subrogation, filed with the RTC of Makati a
Complaint for Recovery of Damages against Durban
Apartments Corp. (or City Garden Hotel) and defendant
before the RTC, Vicente Justimbaste. Respondent averred
that it is the insurer for loss and damage of Jeffrey S. See’s
2001 Suzuki Grand Vitara in the amount of P1,175,000.00.
On April 30, 2002, See arrived and checked in at the City
Garden Hotel before midnight, and its parking attendant,
Justimbaste got the key to said Vitara from See to park it. On
May 1, 2002, at about 1:00 am, See received a phone call
where the Hotel Chief Security Officer informed him that his
Vitara was carnapped while it was parked unattended at the
parking area of Equitable PCI Bank See went to see the
Security Officer, thereafter reported the incident to the
Operations Division of the Makati City Police Anti-
Carnapping Unit, and a flash alarm was issued. The police
investigated Hotel Security Officer, Ernesto T. Horlador, Jr.
and Justimbaste. See gave his Sinumpaang Salaysay to the
police investigator, and filed a Complaint Sheet with the PNP
Traffic Management Group in Camp Crame. it paid the
P1,163,250.00 money claim of See and mortgagee ABN
AMRO Savings Bank, Inc. as indemnity for the loss of the
Vitara.

The Vitara was lost due to the negligence of Durban

Apartments and Justimbaste because it was discovered
during the investigation that this was the second time that a
similar incident of carnapping happened in the valet parking
service and no necessary precautions were taken to prevent
its repetition. Durban Apartments was wanting in due