Вы находитесь на странице: 1из 13

Nego%Week%14%

%
%
1.%Siy%Bong%Bieng%v.%HSBC%–%Jed%

Emergency:%Ranft%purchased%hemp%and%was%given%a%warehouse%receipt%by%BIENG.%RANFT%HOWEVER%HAS%NOT%PAID%YET%
but%BIENG%still%sent%the%receipts%(FATAL%MOVE).%On%the%same%day,%Ranft%died%and%thereafter,%BIENG%wanted%the%receipt%
back%or%the%purchase%price%however%they%found%out%Ranft%had%already%pledged%the%same%to%HSBC.%RTC%ruled%in%favor%of%
BIENG.%SC%reversed:%if%owner%of%the%goods%permit%another%to%have%the%possession%or%custody%of%negotiable%warehouse%
receipts%running%to%the%order%of%the%latter,%or%to%bearer,%it%is%a%representation%of%title%upon%which%bona%fide%purchasers%
for%value%are%entitled%to%rely,%despite%breaches%of%trust%or%violations%of%agreement%on%the%part%of%the%apparent%owner.%
BIENG% ESTOPPED:% the% plaintiff% had% voluntarily% clothed% Ranft% with% all% the% attributes% of% ownership% and% upon% which% the%
defendant%bank%relied.%

Facts:!
[Initial% action% in% CFI% for% sum% of% 31,645,% the% value% of% 464% bales% of% hemp% deposited% in% certain% bonded%
warehouses%as%evidenced%by%quedans%(warehouse%receipts).%
[They%were%delivered%to%HSBC%as%pledge%for%Otto%Ranft’s%preexisting%debt.%
[June% 25,% 1926:% Ranft% called% the% office% to% purchase% hemp% (abaca).% The% receipt% was% delivered% with% the%
understanding% that% BIENG% would% be% paid% a% day% or% two% after% deliver% as% was% the% same% set% up% as% previous%
transactions.%
[That%night,%on%the%same%day%the%warehouse%receipts%were%pledged%by%Ranft.%ALSO%ON%THAT%NIGHT!!!%He%died.%
(funny%right?%He%died%suddenly%in%their%house%in%Manila)%
[BIENG%immediately%asked%for%the%return%of%the%quedans%or%their%value%but%found%out%that%they%were%already%
pledged.%%
[BIENG%filed%a%claim%for%31,645%in%the%intestate%proceedings%of%Ranft%which%was%allowed%by%the%CFI.%
[In% the% meantime,% BIENG% also% demanded% from% HSBC% for% the% return% of% the% quedans% or% their% value% but% was%
refused%stating%that%they%are%holders%in%due%course.%%
[Complaint%was%filed%BIENG%stated%they%allegedly%“attempted%to%sell”%to%Ranft%for%cash%but%Rnaft%did%not%fulfill%
he%conditions%of%the%sale.%(Initial%statement%was%they%“sold”%it%but%then%they%changed%it%ti%“attempted%to%sell”)%
[TRIAL%COURT:%ruled%in%favor%of%BIENG%on%the%ground%that%HSBC%could%not%have%been%in%good%faith%because%
according%to%the%witness,%a%certain%Thiele,%the%bank,%based%on%the%circumstance%knew%that%they%weren’t%paid%
yet.%Also,%the%belief%that%Ranft%was%the%owner%was%contrary%to%the%facts%proven.%
Issue:%W/N%BIENG%can%recover%the%quedans%
Held:!HELLZ!TO!THE!NO!
! “We%regret%that%the%plaintiff%in%this%case%has%suffered%the%loss%of%the%quedans,%but%as%far%as%we%can%see,%
there% is% now% no% remedy% available% to% the% plaintiff.% The% bank% is% not% responsible% for% the% loss;% the% negotiable%
quedans%were%duly%negotiated%to%the%bank%and%as%far%as%the%record%shows,%there%has%been%no%fraud%on%the%part%
of%the%defendant.”!
Ratio:%
[%First,%that%the%quedans%in%question%were%negotiable%in%form;%%
[Second,%that%they%were%pledge%by%Otto%Ranft%to%the%defendant%bank%to%secure%the%payment%of%his%preexisting%
debts%to%said%bank%(paragraph%3%of%the%Stipulation%of%Facts);%%
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
[Third,%that%such%of%the%quedans%as%were%issued%in%the%name%of%the%plaintiff%were%duly%endorsed%in%blank%by%the%
plaintiff%and%by%Otto%Ranft%
[Fourth,%that%the%two%remaining%quedans%which%were%duly%endorsed%in%blank%by%him.%
[Evidence% shows% that% the% quedans% were% for% security% of% 622,753% debt,% no% evidence% that% bank% was%
bound/promised%to%pay%back%amount%of%quedans%%
[Quedans%were%negotiable%in%form%and%duly%endorsed%in%blank%by%the%plaintiff%and%by%Otto%Ranft,%it%follows%that%
on% the% delivery% of% the%qeudans%to% the% bank% they% were% no% longer% the% property% of% the% indorser% unless% he%
liquidated%his%debt%with%the%bank.%
[On%petitioners%contention%that%bank%should%have%ascertained%the%authority%of%Ranft%to%negotiate:%
% [The%bank%had%perfect%right%to%act%under%section%47,%38%and%40%of%Warehouse%Receipts%Act:%

SEC.!47.!When%negotiation%not%impaired%by%fraud,%mistake,%or%duress.%—%The%validity%of%
the% negotiation% of% a% receipt% is% not% impaired% by% the% fact% that% such% negotiation% was% a%
breach%of%duty%on%the%part%of%the%person%making%the%negotiation,%or%by%the%fact%that%the%
owner%of%the%receipt%was%induced%by%fraud,%mistake,%or%duress%to%intrust%the%possession%
or% custody% of% the% receipt% was% negotiated,% or% a% person% to% whom% the% receipt% was%
subsequent% negotiated,% paid% value% therefor,% without% notice% of% the% breach% of% duty,% or%
fraud,%mistake,%or%duress.%

SEC.!38.!Negotiation%of%negotiable%receipts%by%indorsement.%—%A%negotiable%receipt%may%
be%negotiated%by%the%indorsement%of%the%person%to%whose%order%the%goods%are,%by%the%
terms% of% the% receipt,% deliverable.% Such% indorsement% may% be% in% blank,% to% bearer% or% to% a%
specified%person.%.%.%.%Subsequent%negotiation%may%be%made%in%like%manner.%

!SEC.!40.!Who%may%negotiate%a%receipt.%—%A%negotiable%receipt%may%be%negotiated:%

(a)%By%the%owner%thereof,%or%

(b)%By%any%person%to%whom%the%possession%or%custody%of%the%receipt%has%been%entrusted%by%the%owner,%if,%by%the%
terms%of%the%receipt,%the%warehouseman%undertakes%to%deliver%the%goods%to%the%order%of%the%person%to%whom%
the%possession%or%custody%of%the%receipt%has%been%entrusted,%or%if%at%the%time%of%such%entrusting%the%receipt%is%in%
such%form%that%it%may%be%negotiated%by%delivery.%

[Bank%is%entitled%to%such%rights%under%sec.%41:%

% SEC.% 41.%Rights% of% person% to% whom% a% receipt% has% been% negotiated.% —% A% person% to% whom% a% negotiable%
receipt%has%been%duly%negotiated%acquires%thereby:%

(a) 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,%and%also%such%title%to%the%goods%as%the%depositor%of%person%to%whose%order%
the%goods%were%to%be%delivered%by%the%terms%of%the%receipt%had%or%had%ability%to%convey%to%a%purchaser%in%
good%faith%for%value,%and.%.%.%.%

%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
[Citing%jurisprudence:%%By%sec.%47,%the%negotiation%of%the%receipt%to%a%purchaser%for%value%without%notice%is%not%impaired%
by%the%fact%that%it%is%a%breach%of%duty,%or%that%the%owner%of%the%receipt%was%induced%"by%fraud,%mistake,%or%duress"%to%
intrust%the%receipt%to%the%person%who%negotiated%it.%%

[Under%sec.%41,%one%to%whom%the%negotiable%receipt%has%been%duly%negotiated%acquires%such%title%to%the%goods%as%the%
person%negotiating%the%receipt%to%him,%or%the%depositor%or%person%whose%order%the%goods%were%delivered%by%the%terms%of%
the%receipt,%either%had%or%"had%ability%to%convey%to%a%purchaser%in%good%faith%for%value."%

[WHAT%PROVISIONS%ARE%SAYING:%if%owner%of%the%goods%permit%another%to%have%the%possession%or%custody%of%negotiable%
warehouse% receipts% running% to% the% order% of% the% latter,% or% to% bearer,% it% is% a% representation% of% title% upon% which%bona%
fide%purchasers% for% value% are% entitled% to% rely,% despite% breaches% of% trust% or% violations% of% agreement% on% the% part% of% the%
apparent%owner.%

[BIENG%ESTOPPED:%%the%plaintiff%had%voluntarily%clothed%Ranft%with%all%the%attributes%of%ownership%and%upon%
which%the%defendant%bank%relied.%In%such%case%we%think%the%principles%which%underlie%equitable%estoppel%place%
the%loss%upon%him%whose%misplaced%confidence%has%made%the%wrong%possible.%
%
2.%Martinez%v.%PNB%%[%Jech%
Emergency%Recit:%
• RODRIGUEZ%estate%was%indebted%to%PNB%in%the%amount%of%22K,%representing%its%crop%loan%
• MARTINEZ,%administratrix,%endorsed%and%delivered%two%quedans%to%PNB,%which%covered%2,198.11%piculs%sugar%
o The%quedans%were%issued%by%BOGO[MEDELLIN%MILLING,%the%warehouse%where%the%sugar%was%stored%
• Because%of%the%war,%the%sugar%covered%by%the%quedans%were%lost%
• MARTINEZ%contends%that%had%she%been%allowed%to%sell%the%sugar,%to%which%PNB%refused,%the%estate%could%have%realized%the%
amount%of%over%54K%
• MARTINEZ%sued%for%the%expected%sales%price,%since%it%had%already%paid%the%loan%amount%
• Issue:%Is%PNB%liable?%
• SC% held% that% MARTINEZ’% theory% is% stupid% and% confusing% –% she% contends% that% the% endorsement% of% the% quedan% transferred%
ownership%over%the%sugar%to%PNB,%but,%at%the%same%time,%she%wants%to%recover%the%value%of%the%sugar%
o In%any%case,%the%transfer%of%the%quedans%in%the%case%at%bar%is%not%by%sale,%but%merely%as%security%by%way%of%pledge%or%
mortgage.%Thus,%ownership%was%not%transferred%and%PNB%was%only%given%a%right%to%sell%the%goods%to%apply%it%to%the%
outstanding%debt.%
o Thus,%the%loss%should%be%borne%by%the%owner%–%ESTATE%
• Dissent%of%Paras:%
o PNB%is%liable%for%the%22K,%not%for%the%54K%
o Endorsement% of% the% quedans% transferred% ownership% to% PNB,% pursuant% to% Section% 41% of% the% Warehouse% Receipts%
Law%
o But%since%the%quedans%were%only%given%as%security,%the%case%is%similar%to%that%of%sale%with%right%to%repurchase%
! If% the% seller% successfully% repurchases% (to% get% the% property% back),% but% the% thing% is% lost% before% actual%
delivery,%then%the%buyer%(who%initially%bought%the%property)%is%bound%to%deliver%the%purchase%price;%not%its%
value%
%
[Facts:%
• February%1942:%the%the%estate%of%RODRIGUEZ%was%indebted%to%the%PNB%in%the%amount%of%P22,128.44,%which%represented%the%
balance%of%the%CROP%LOAN%obtained%by%the%estate%upon%its%1941[1942%SUGAR%CANE%CROP%
• MARTINEZ,%late%administratrix%of%the%RODRIGUEZ%estate,%endorsed%and%delivered%to%PNB%two%(2)%QUEDANS%issued%by%the%
BOGO[MEDELLIN%MILLING%CO.,%where%the%sugar%was%stored%
o MARTINEZ:%The%quedans%covered%2,198.11%piculs%%
o PNB:%Only%1%quedan%was%delivered,%which%covered%1,071.04%piculs%
• During%the%last%Pacific%war,%the%sugar%covered%by%the%quedans%was%lost%while%in%the%warehouse%of%BOGO%
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
• According%to%MARTINEZ,%she%asked%PNB%to%release%the%sugar%so%that%it%could%be%sold%at%a%good%price%(P25%per%picul)%to%avoid%
possible%loss%at%the%hands%of%the%Japanese%invasion%
o PNB%refused%and,%as%a%result,%P54,952.75,%representing%the%value%of%said%sugar%was%lost%
• MARTINEZ%filed%suit%against%PNB%to%recover%the%amount%
• CFI:%Dismissed%the%complaint%%
o The%transfer%of%the%quedans%representing%the%sugar%to%PNB%did%not%transfer%ownership%over%the%goods%
o The%loss%of%the%sugar%should%still%be%borne%by%the%owner[estate%
• Present%administrator%MARTINEZ%appealed%
• SC:%CFI%ruling%affirmed%
%
[Issue:% Whether% or% not% the% delivery% (by% MARTINEZ)% of% the% quedans% in% question% transferred% ownership% (to% PNB)% over% the% sugar%
covered%thereby?%
%
[Held:%%
• The%transaction%was%not%a%sale%because%consideration%was%not%present%
%
• PNB,%by%its%charter%is,%not%authorized%to%engage%in%the%business%of%buying%and%selling%sugar.%%
o PNB%only%accepts%sugar%as%security%for%payment%of%its%crop%loans%and%later,%it%sells%said%sugar%for%planters,%or%the%
planters%find%buyers%and%direct%them%to%the%bank.%%
%
• [BOOM]%MARTINEZ%contends%that%the%endorsement%and%delivery%of%the%quedans%to%the%bank%transferred%the%ownership%of%
the%sugar%to%said%bank%so%that%as%owner,%the%bank%should%suffer%the%loss%of%the%sugar%%
o We%take%it%that%by%endorsing%the%quedan,%ESTATE%was%supposed%to%have%sold%the%sugar%to%PNB%for%the%amount%of%
the%outstanding%loan%and%the%interest%then%accrued.%%
o That%would%mean%that%ESTATE’s%account%with%the%bank%has%been%entirely%liquidated%and%their%contractual%relations%
ended,%the%bank,%suffering%the%loss%of%the%amount%of%the%loan%and%interest.%%
o But%MARTINEZ,%in%the%next%breath%contends%that%had%the%bank%released%the%sugar%in%February%1942,%ESTATE%could%
have% sold% it% for% P54,952.75,% from% which% the% amount% of% the% loan% and% interest% could% have% been% deducted,% the!
balance!to!have!been!retained!by!the!ESTATE,%and%that%since%the%loan%has%been%entirely%liquidated%in%1948,%then%
the%whole%expected%sales%price%of%P54,952.75%should%now%be%paid%by%PNB%
! [PATAY]% This% second% theory% presupposes% that% despite% the% endorsement% of% the% quedan,% the% estate% still%
retained%ownership%of%the%sugar,%a%position%that%runs%counter%to%the%first%theory%of%transfer%of%ownership%
to%the%bank.%
%
• In% support% of%the% theory% of% transfer% of% ownership%of%the%sugar%to%the%bank% by% virtue%of% the%endorsement%of%the%quedan,%
reference%was%made%to%Section%41%of%the%Warehouse%Receipts%Law%
o First,%this%claim%is%inconsistent%with%the%very%theory%MARTINEZ%that%the%sugar%far%from%being%sold%to%the%bank%was%
merely%given%as%security%for%the%payment%of%the%crop%loan.%%
o Second,%the%jurisprudence%cited%do%not%directly%apply.%
! In!those!cases,!this!Court!held!that!for%purposes%of%facilitating%commercial%transaction,!the!endorsee!or!
transferee!of!a!warehouse!receipt!or!quedan!should!be!regarded!as!the!owner!of!the!goods!covered!by!
it.!!
• As!regards!the!endorser!or!transferor,!even%if%he%were%the%owner%of%the%goods,%he%may%not%take%
possession%and%dispose%of%the%goods%without%the%consent%of%the%endorsee%or%transferee%of%the%
quedan%or%warehouse%receipt!
o An% in% some% cases,% the% endorsee% may% sell% the% goods% and% apply% the% proceeds% to% the%
payment%of%the%debt%
• As!regards!third!persons,%the%holder%of%a%warehouse%receipt%or%quedan%is%considered%the%owner%
of%the%goods%covered%by%it.%!
o It%is%obvious%that%where%the%transaction%involved%in%the%transfer%of%a%warehouse%receipt%or%quedan%is%not%a%sale%but%
pledge% or% security,% the% transferee% or% endorsee% does% not% become% the% owner% of% the% goods,% but% that% he% may% only%
have%the%property%sold%and%then%satisfy%the%obligation%from%the%proceeds%of%the%sale.%!
! From% all% this,% it% is% clear% that% at% the% time% the% sugar% in% question% was% lost% sometime% during% the% war,%
RODRIGUEZ%estate%was%still%the%owner%thereof.!
o Moreover,%PNB%did%offer%the%sugar%for%sale,%but%there%were%no%buyers.!
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
!
• [DOCTRINE]%Where%a%warehouse%receipt%or%quedan%is%transferred%or%endorsed%to%a%creditor%only%to%secure%the%payment%of%a%
loan%or%debt,%the%transferee%or%endorsee%does%not%automatically%become%the%owner%of%the%goods%covered%by%the%warehouse%
receipt%or%quedan,%!
o But% he% merely% retains% the% right% to% keep% and% with% the% consent% of% the% owner% to% sell% them% so% as% to% satisfy% the%
obligation%from%the%proceeds%of%the%sale!
o In%such%cases,%the%transaction%involved%is%not%a%sale%but%only%a%mortgage%or%pledge;%and%!
o If% the% property% covered% by% the% quedans% or% warehouse% receipts% is% lost% without% the% fault% or% negligence% of% the%
mortgagee%or%pledgee%or%the%transferee%or%endorsee%of%the%warehouse%receipt%or%quedan,%then%said%goods%are%to%
be%regarded%as%lost%on%account%of%the%real%owner%mortgagor%or%pledgor.!
!
MDissent!by!Paras:!
Section%41%of%Act%No.%2137,%otherwise%known%as%the%Warehouse%Receipts%Law;%
"SEC.%41.%Rights%of%person%to%whom%a%receipt%has%been%negotiated.%A%person%to%whom%a%negotiable%receipt%has%been%duly%
negotiated%acquires%thereby:%
"(a)%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,%and%also%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%had%or%had%ability%to%convey%to%a%purchaser%in%good%faith%for%value,%and.%
"(b)%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."%
%
• A%person%to%whom%a%negotiable%receipt%has%been%duly%negotiated%acquires%(1)%title%to%the%goods%covered%by%the%receipt,%as%
well%as%(2)%possession%of%the%goods%through%the%warehouseman,%as%if%the%latter%had%contracted%directly%with%the%person%to%
whom%the%negotiable%receipt%has%been%duly%negotiated.%%
o Consequently,% PNB,% to% whom% the% two% quedans% in% question% have% been% indorsed% and% delivered,% thereby% acquired%
the%ownership%of%the%sugar%covered%by%said%quedans,%with%the%logical%result%that%the%loss%of%the%article%should%be%
borne%by%it.%%
o The%fact%that%the%quedans%were%indorsed%and%delivered%as%a%security%for%the%payment%of%an%indebtedness%did%not%
prevent% the% bank% from% acquiring% ownership,% since% the% only% effect% of% the% transfer% was% that% the% debtor% could%
reacquire%said%ownership%upon%payment%of%his%obligation.%%
o Section!41!of!Act!No.!2137!had!already!been!construed!by!this!court!in!the!sense!that!ownership!passes!to!the!
indorsee,!although%the%quedans%are%indorsed%and%delivered%merely%as%a%security.!(Sy%Cong%Bieng%vs.%Hongkong%&%
Shanghai%Bank,%56%Phil.,%498;%Philippine%Trust%Co.%vs.%Philippine%National%Bank,%42%Phil.,%438;%Bank%of%the%Philippine%
Islands%vs.%Herridge,%47%Phil.,%57;%Roman%vs.%Asia%Banking%Corporation,%46%Phil.,%405.)%
%
• The%relation%of%a%pledgor%of%a%warehouse%receipt,%duly%indorsed%and%delivered%to%the%pledgee,%is%substantially%analogous%to%
the%relation%of%a%vendor%and%vendee,%with%right%of%repurchase.%%
o The%seller%a%retro%actually%transfers%the%ownership%of%the%property%sold%to%the%buyer,%but%the%seller%may%reacquire%
said%ownership%upon%payment%of%the%repurchase%price.%%
! If!the!property!sold!a!retro!is!lost!before!being!repurchased,!the!vendee!naturally!has!to!bear!the!loss,!
with!the!seller!having!nothing!to!repurchase.!!
! But! if! the! loss! should! occur! after! the! repurchase! price! has! been! paid! but! before! the! property! sold! a!
retro!is!actually!reconveyed,!the!buyer!is!bound!to!return!to!the!seller!only!the!repurchase!price!paid,!
and!not!the!value!of!the!property.!
o Thus,%the%loss%of%the%sugar%should%be%for%the%account%of%the%PNB,%which%should%return%to%the%ESTATE%P22,128.44,%
the%amount%of%the%indebtedness%of%the%estate,%which%had%already%been%paid%in%1948,%without%however%being%liable%
for%the%difference%between%P54,952.75%(actual%value%of%the%sugar)%and%the%amount%of%said%payment.%
!
%
3.%Roman%v.%Asia%Banking%–%Maiti%
In!the!matter!of!the!Involuntary!insolvency!of!U.!DE!POLI.!FELISA!ROMAN,!claimantMappellee,!vs.!ASIA!BANKING!CORPORATION,!
claimantMappellant.!
!
ER:%
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
− Umberto%de%Poli%purchased%2,777%bales%of%tobacco%from%Felisa%Roman%
− Of%the%P78,815.69%total%value,%de%Poli%paid%P15,000%in%cash.%He%then%executed%4%notes%of%P15,953.92%to%cover%the%balance%
− Subsequently,%de%Poli,%for%value%received,%issued%a%negotiable%receipt%(quedan)%covering%576%bales%of%tobacco,%to%the%Asia%
Banking%Corporation%
− de%Poli%then%became%insolvent,%thus%insolvency%proceedings%were%instituted%
− in%the%said%insolvency%proceedings,%CFI%Manila%held%that%Roman's%lien%over%the%576%bales%of%tobacco%was%superior%to%that%of%
Asia%Bank.%
− Hence%this%appeal.%
− WON%Roman's%right%over%the%576%bales%of%tobacco%is%superior%to%that%of%Asia%Banking%Corporation?%%
− No.%Sec%49%of%the%Warehouse%Receipts%Law%states:%%
− Where%a%negotiable%receipt%has%been%issued%for%goods,!no!seller's!lien!or!right!of!stoppage!in!transitu!shall!defeat!the!
rights!of!any!purchaser!for!value!in!good!faith!to!whom!such!receipt!has!been!negotiated,%whether%such%negotiation%
be%prior%or%subsequent%to%the%notification%to%the%warehouseman%who%issued%such%receipt%of%the%seller's%claim%to%a%lien%
or%right%of%stoppage%in%transitu.%Nor%shall%the%warehouseman%be%obliged%to%deliver%or%justified%in%delivering%the%goods%to%
an%unpaid%seller%unless%the%receipt%is%first%surrendered%for%cancellation.%
− So%if%the%warehouse%receipt%is%negotiable,%then%Roman's%lien%cannot%be%superior%to%that%of%the%Bank's%
− WON%warehouse%receipt%is%negotiable?%%
− Yes.% A% warehouse% receipt% must% be% interpreted% according% to% its% evident% intent% and% it% is% obvious% that% the% deposit%
evidenced% by% the% receipt% in% this% case% was% intended% to% be% made% subject% to% the% order% of% the% depositor% and% therefore%
negotiable.%%
− Moreover,% the% indorsement% in% blank% of% the% receipt% in% controversy% together% with% its% delivery% by% U.% de% Poli% to% the%
appellant%bank%took%place%on%the%very%of%the%issuance%of%the%warehouse%receipt,%thereby%immediately%demonstrating%
the%intention%of%U.%de%Poli%and%of%the%appellant%bank,%by%the%employment%of%the%phrase%"by%order%of%Mr.%U%de%Poli"%to%
make%the%receipt%negotiable%and%subject%to%the%very%transfer%which%he%then%and%there%made%by%such%endorsement%in%
blank%and%delivery%of%the%receipt%to%the%blank.%
− Any%warehouse%receipt%not%marked%"non[negotiable"%or%"not%negotiable"%practically%has%the%same%effect%as%a%receipt%
which,%by%its%terms,%is%negotiable%provided%the%holder%of%such%unmarked%receipt%acquired%it%for%value%supposing%it%to%be%
negotiable%
%
FACTS:%
%
− This% is% an% appeal% from% an% order% entered% by% the% CFI% of% Manila,% the% insolvency% of% Umberto% de% Poli,% and% declaring% the% lien%
claimed%by%the%appellee%Felisa%Roman%upon%a%lot%of%leaf%tobacco,%consisting%of%576%bales,%and%found%in%the%possession%of%
said%insolvent,%superior%to%that%claimed%by%the%appellant,%the%Asia%Banking%Corporation.%
− Felisa%Roman%(ROMAN)%claims%the%576%bultos%of%tobacco%(Exhibit%A)%
− ROMAN%notified%the%said%Asia%Banking%Corporation%(ASIA%BANK)%of%her%contention.%Asia%Banking%Corporation%replied%%
− At%the%time%the%above%entitled%insolvency%proceedings%were%filed,%the%576%bultos%of%tobacco%were%in%possession%of%U.%de%Poli%
and%now%are%in%possession%of%the%assignee.!
− U.!de!Poli,%for%value%received,%issued%a%quedan,%covering%aforesaid%576%bultos%of%tobacco,%to%the%Asia%Banking%Corporation%%
− That% aforesaid% 576% bultos% of% tobacco% are% part% and% parcel% of% the% 2,777% bultos% purchased% by% U.% de% Poli% from% Felisa%
Roman.%
− The%warehouse%receipt%issued%by%the%warehouse%of%U.%de%Poli%for%576%bales%of%tobacco.%
− In% the% left% margin% of% the% face% of% the% receipts,% U.% de% Poli% certifies% that% he% is% the% sole% owner% of% the% merchandise% therein%
described.%The%receipt%is%endorsed%in%blank%"Umberto%de%Poli;"%it%is%not%marked%"non[negotiable"%or%"not%negotiable”%
− In% Exhibit% A% (which% is% some% kind% of% agreement/contract% between% Roman% and% U% de% Poli),% it% says% that% the% tobacco% should%
remain%in%the%warehouse%of%U.%de%Poli%as%a%deposit%until%the%price%was%paid%
− however,%it%appears%clearly%from%the%language%of%the%exhibit%as%a%whole%that%it%evidences%a%contract%of%sale%

%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
− findings%of%CFI%also%show%that%De%Poli%received%from%Felisa%Roman,%under%this%contract,%2,777%bales%of%tobacco%of%the%
total% value% of% P78,815.69,% of% which% he% paid% P15,000% in% cash% and% executed% four% notes% of% P15,953.92% each% for% the%
balance%
− The%sale%having%been%thus%consummated,%the%only%lien%upon%the%tobacco%which%Felisa%Roman%can%claim%is%a%vendor's%
lien.%
%
− The% order% appealed% from% is% based% upon% the% theory% that% the% tobacco% was% transferred% to% the% Asia% Banking% Corporation% as%
security%for%a%loan%and%that%as%the%transfer%neither%fulfilled%the%requirements%of%the%Civil%Code%for%a%pledge%nor%constituted%a%
chattel%mortgage%under%Act%No.%1508,%the%vendor's%lien%of%Felisa%Roman%should%be%accorded%preference%over%it.%
%
ISSUE:%%
WON%the%warehouse%receipt%is%negotiable?%YES.%
WON%Roman's%right%over%the%576%bales%of%tobacco%is%superior%to%that%of%Asia%Banking%Corporation?%NO.%
%
HELD:%We%therefore%hold%that%the%warehouse%receipts%in%controversy%was%negotiable%and%that%the%rights%of%the%indorsee%(ASIA%BANK)%
thereof,%the%appellant,%are%superior%to%the%vendor's%(ROMAN)%lien%of%the%appellee%and%should%be%given%preference%over%the%latter%
%
Roman's%lien%not%superior%to%Bank%
− It%is%quite%evident%that%the%court%below%failed%to%take%into%consideration%the%provisions%of%section!49!of!Act!No.!2137%which%
reads:%
− Where%a%negotiable%receipt%has%been%issued%for%goods,!no!seller's!lien!or!right!of!stoppage!in!transitu!shall!defeat!the!
rights!of!any!purchaser!for!value!in!good!faith!to!whom!such!receipt!has!been!negotiated,%whether%such%negotiation%
be%prior%or%subsequent%to%the%notification%to%the%warehouseman%who%issued%such%receipt%of%the%seller's%claim%to%a%lien%
or%right%of%stoppage%in%transitu.%Nor%shall%the%warehouseman%be%obliged%to%deliver%or%justified%in%delivering%the%goods%to%
an%unpaid%seller%unless%the%receipt%is%first%surrendered%for%cancellation.%
− The%term%"purchaser"%as%used%in%the%section%quoted,%includes%mortgagee%and%pledgee.%
− In% view% of% the% foregoing% provisions,% there! can! be! no! doubt! whatever! that! if! the! warehouse! receipt! in! question! is!
negotiable,! the! vendor's! lien! of! Felisa! Roman! cannot! prevail! against! the! rights! of! the! Asia! Banking! Corporation! as! the!
indorsee!of!the!receipt.%%
%
The%warehouse%receipt%is%negotiable%
− The%only%question%of%importance%to%be%determined%in%this%case%is,%therefore,%whether%the%receipt%before%us%is%negotiable.%
− The%matter%is%not%entirely%free%from%doubt.%The%receipt%is%not%perfect:%%
− It%recites%that%the%merchandise%is%deposited%in%the%warehouse%"by%order"%instead%of%"to%order"%or%"subject%to%the%order"%
of%the%depositor%and%it%contain%no%other%direct%statement%showing%whether%the%goods%received%are%to%be%delivered%to%
the%bearer,%to%a%specified%person,%or%to%a%specified%person%or%his%order.%
− We%think,%however,%that%it%must%be%considered%a%negotiable%receipt.!
− A!warehouse!receipt,!like!any!other!document,!must!be!interpreted!according!to!its!evident!intent!and!it!is!quite!obvious!
that!the!deposit!evidenced!by!the!receipt!in!this!case!was!intended!to!be!made!subject!to!the!order!of!the!depositor!and!
therefore!negotiable.%%
− That% the% words% "by% order"% are% used% instead% of% "to% order"% is% very% evidently% merely% a% clerical% or% grammatical% error.% If% any%
intelligent% meaning% is% to% be% attacked% to% the% phrase% "Are% deposited% in% these% stores% by% order% of% Mr.% U.% de% Poli"% (google%
translated)%it%must%be%held%to%mean%"Are%deposited%in%these%stores%to%the%order%of%Mr.%U.%de%Poli"%(google%translated)%%
− The%phrase%must%be%construed%to%mean%that%U.%de%Poli%was%the%person%authorized%to%indorse%and%deliver%the%receipts;%any%
other% interpretation% would% mean% that% no% one% had% such% power% and% the% clause,% as% well% as% the% entire% receipts,% would% be%
rendered%nugatory.%
%
− Moreover,!the!indorsement!in!blank!of!the!receipt!in!controversy!together!with!its!delivery!by!U.!de!Poli!to!the!appellant!
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
bank!took!place!on!the!very!of!the!issuance!of!the!warehouse!receipt,!thereby!immediately!demonstrating!the!intention!
of!U.!de!Poli!and!of!the!appellant!bank,!by!the!employment!of!the!phrase!"by!order!of!Mr.!U!de!Poli"!to!make!the!receipt!
negotiable!and!subject!to!the!very!transfer!which!he!then!and!there!made!by!such!endorsement!in!blank!and!delivery!of!
the!receipt!to!the!blank.%
%
− As% hereinbefore% stated,% the% receipt% was% not% marked% "non[negotiable."% Under% modern% statutes% the% negotiability% of%
warehouse% receipts% has% been% enlarged,% the% statutes% having% the% effect% of% making% such% receipts% negotiable% unless% marked%
"non[negotiable."%%
%
− Section%7%of%the%Uniform%Warehouse%Receipts%Act,%says:%
− A%non[negotiable%receipt%shall%have%plainly%placed%upon%its%face%by%the%warehouseman%issuing%it%'non[negotiable,'%or%
'not% negotiable.'% In% case% of% the% warehouseman's% failure% so% to% do,% a% holder% of% the% receipt% who% purchased% it% for% value%
supposing% it% to% be% negotiable% may,% at% his% option,% treat% such% receipt% as% imposing% upon% the% warehouseman% the% same%
liabilities%he%would%have%incurred%had%the%receipt%been%negotiable.%
%
− This%section%appears%to%give%any%warehouse!receipt!not!marked!"nonMnegotiable"!or!"not!negotiable"!practically!the!same!
effect!as!a!receipt!which,!by!its!terms,!is!negotiable!provided!the!holder!of!such!unmarked!receipt!acquired!it!for!value!
supposing!it!to!be!negotiable,%circumstances%which%admittedly%exist%in%the%present%case.%
%
4.%America%Foreign%Banking%v.%Herridge%–%Dondon%
%
Emergency!Recitation!(this!should!be!enough,!short!case)!
• Poli,% a% warehouseman% in% Manila,% had% a% debt% (overdraft% of% Php40,000)% with% American% Bank% and% as% security% he%
issued%a%warehouse%receipt%(quedan)%indorsed%in%blank%representing%560%bales%of%“Cagayan%tobacco%en%rama”%
o Tobacco%is%stored%in%the%bodega%of%Calle%Azcarraga%
• Poli%later%on%became%insolvent%so%his%properties%are%now%administered%by%an%assignee%
• American%Bank%subsequently%wants%the%assignee%to%deliver%the%tobacco%but%the%latter%refuses%stating%
o The%560%bales%are%not%in%his%possession%
o That%the%quedan%issued%is%not%a%negotiable%warehouse%receipt%for%failure%to%comply%with%Secs2,%4,%5%of%
Warehouse%receipt%act%
o Poli%only%issued%it%as%collateral%security%
• 2%issues%posed%used%as%basis%for%assailing%the%warehouse%receipt:%%
o Quedan%stated%560%bales%of%tobacco,%but%the%tobacco%in%the%bodega%of%Calle%Azcarraga%was%only%530%
o American%Bank%claims%Cagayan%tobacco%but%the%ones%in%the%bodega%is%Isabela%tobacco%
• Therefore%the%issue%hinges%on%the%identity%of%the%tobacco%claimed%in%relation%to%what%is%written%in%the%quedan%%
• Issue:%W/N%the%warehouse%receipt%is%valid%despite%the%discrepancies%"%Yes%valid%
• W/N%assignee%must%deliver%goods%to%American%Bank%"%Yes%must%deliver%
• The% facts% clearly% show% that% the% identity% of% the% tobacco% Calle% Azcarraga% is% the% one% referred% to% in% the% quedan,%
despite%the%discrepancy%in%description.%The%evidence%adduced:%
o This%lot%of%tobacco%was%the%only%tobacco%in%the%warehouse.%%
o Poli%admitted%that%it%was%the%tobacco%which%he%transferred%to%the%claimant%bank%–%that%at%the%time,%he%
notified%Molina%(guy%in%charge%of%his%warehouses%then)%to%set%this%tobacco%for%said%security%to%American%
Bank%
o The% bank% sent% its% subaccountant,% Mr.% Kaintzler,% to% check% the% tobacco,% and% Poli% pointed% this% lot% of%
tobacco%to%him%%
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
• Also,% Poli% explained% that% when% he% made% the% quedan,% he% didn’t% ask% or% give% importance% to% the% grade% since%
regardless%of%whether%it%was%Cagayan%or%Isabela,%he%had%to%deliver%the%tobacco%anyway%
• SC% accepts% explanation% and% evidence.% Assignee% must% deliver% the% tobacco,% or% if% sold% already,% the%
proceeds%less%expenses%to%American%Bank%
• The% assignee% stands% in% the% shoes% of% the% insolvent,% and,% while% it% is% his% duty% to% protect% the% general%
creditors,%he%is%not%in%the%position%of%a%judgment%creditor%with%an%unsatisfied%execution.%
• The%intention%of%the%parties%to%the%transaction%must%prevail%against%such%a%technical%objection%as%to%the%
sufficiency%of%the%description%of%the%tobacco.%%
%
FACTS:%
• U.% de% Poli% (Poli),% then% warehouseman% in% Manila,% had% a% debt% (overdraft% amounting% to% Php40,000)% to% American%
Foreign%Banking%Corporation%(American%Bank)%
• April%28,%1920%[%Poli%issued%warehouse%receipt%No.%A[48%(quedan)%and%endorsed%said%quedan%in%question%(Exhibit%
A)%in%blank%and%delivered%it%to%American%Bank%as%security%on%his%overdraft%%
o Quedan% represented% 560% bales% of% tobacco,% particularly% described% a% “Cagayan% tabaco% en% rama”% with%
specified%marks%thereon%
o Poli%certified%over%his%signature:%“I%certify%that%I%am%the%sole%owner%of%the%merchandise%herein%described”%
%
Poli%became%insolvent%and%all%hence%all%his%property,%including%the%warehouses%and%stuff%are%under%the%administration%of%
an%assignee.%%
• April% 23,% 1921% –% American% Bank% asked% that% the% assignee% be% ordered% to% deliver% the% 560% bales% of% leaf% tobacco%
called%for%in%said%quedan%upon%surrender%of%the%original%of%the%warehouse%receipt.%%
%
Assignee%refused,%contending:%
• Denied%that%the%560%bales%of%Cagayan%tobacco%listed%in%said%Exhibit%A%are%now%in%his%possession%as%assignee%of%
said%insolvent%estate%
• Denied%that%said%Exhibit%A%constitutes%a%negotiable%warehouse%receipt%under%the%law,%for%the%reason%that%it%does%
not%comply%with%the%provisions%of%sections%2,%4,%or%5%of%the%Warehouse%Receipt%Act;%%
• And% that,% even% assuming% that% said% 560% bales% of% leaf% tobacco% were% now% in% his% possession,% he% denies% that% the%
claimant%bank%is%the%owner%thereof,%or%has%any%lien%thereon,%or%any%rights%therein,%by%virtue%of%said%receipt;%%
• And%by%his%amended%answer%alleges%that%said%Exhibit%A%was%not%delivered%by%the%insolvent%Poli%to%the%claimant%
for% the% purpose% of% transferring% the% ownership% of% the% property% described% therein% to% it,% but% only% as% collateral%
security%for%a%pre[existing%indebtedness%by%way%of%overdraft,%for%which%purpose%it%is%under%the%law%invalid%and%
wholly%ineffective%as%against%the%general%creditors%of%the%said%insolvent%estate%%
%
However,%the%facts%(as%also%admitted%by%Poli%in%his%testimony)%show%contrary%to%defences%of%assignee:%%
• The%authenticity%of%the%quedan%is%admitted,%Poli%testified%that%he%issued%it%to%said%bank%as%security%for%his%said%
overdraft%%
• That%the%tobacco%was%in%the%bodega%on%Calle%Azcarraga%when%he%gave%the%quedan%to%the%bank;%%
• That%the%tobacco%had%to%be%stripped%and%booked,%and%for%this%reason%there%might%have%been%a%slight%difference%
between%the%quantity%given%in%the%quedan%and%the%quantity%at%present%in%existence%in%the%warehouse%–%instead%
of%560%bales,%only%530%is%present%

%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
• That%he%knows%that%the%tobacco%was%in%the%warehouse%at%the%time%he%became%insolvent,%because%he%had%given%
an%order%to%fill%an%order%for%stripped%tobacco,%and%%
• That%the%tobacco%was%taken%from%the%pile%which%he%had%given%in%guaranty%to%American%Bank;%%
• That%Vicente%Molina%was%in%charge%of%the%warehouse,%and%that%he%(De%Poli)%acted%upon%the%data%furnished%to%him%
by%Mr.%Molina.%
%
2%problems%posed:%%
1) American%Bank%claims%560%bales%of%tobacco,%evidence%shows%that%there%were%only%530%bales%of%tobacco.%%
2) The%quedan%calls%for%'Cagayan%tobacco,'%but%it%was%stipulated%in%this%case%that%the%530%bales%of%tobacco%claimed%
by%American%Bank%are%Isabela%tobacco.%%
%
The%basis%of%the%contentions%therefore%are%based%on%the%identity%of%the%bales%of%tobacco%subject%of%the%quedan.%
%
Poli%provided%sufficient%explanations/justifications%for%both:%%
• Poli%explained%this%discrepancy%in%description%by%saying%that%he%'had%the%description%of%grade%only%and%made%the%
quedan%without%giving%importance%if%it%was%Cagayan%or%Isabela%tobacco;'%%
• That% he% asked% only% for% grade,% and% did% not% ask% whether% it% was% Cagayan% or% Isabela% tobacco,% because% he% had% to%
deliver%the%security%no%matter%whether%it%was%Isabela%or%Cagayan%tobacco.%%
%
Poli%specifically%ordered%Molina%(guy%in%charge%of%his%warehouses%then)%to%set%aside%the%Isabela%tobacco%for%this%purpose%
in%Calle%Azcarraga%at%the%time%he%issued%it%to%American%Bank%
• The%quedan%in%question%was%issued%by%J.%Magpantay,%who%was%'encargado'%of%all%the%U.%de%Poli%warehouses,%but%
he%did%not%have%control%of%the%warehouses,%according%to%Mr.%De%Poli.%%
• Molina% did% not% see% the% quedan% when% it% was% issued,% but% said% that% he% knew% of% the% tobacco% which% Mr.% De% Poli%
transferred%to%the%claimant%bank,%because%Mr.%De%Poli%told%him%about%it;%that%it%was%tobacco%from%Isabela%f%or%the%
year% 1919,% was% stored% in% the% warehouse% on% Calle% Azcarraga,% and% that% there% was% no% other% tobacco% in% the%
warehouse%except%the%1919%Isabela%tobacco.%
%
American%Bank%sent%its%subaccountant,%Mr.%Kaintzler,%who%verified%the%tobacco%which%was%pointed%out%by%Poli%to%him%
• In%December,%1920,%Mr.%Kaintzler,%a%subaccountant%of%the%claimant%bank,%went%to%the%U.%de%Poli%warehouse%on%
Calle%Azcarraga%to%have%the%tobacco%covered%by%this%quedan,%Exhibit%A,%pointed%out%to%him;%%
• That%the%then%assignee%(Mr.%Bayne)%and%one%of%his%accountants%showed%him%(Kaintzler)%the%530%bales%of%tobacco%
with%the%tag%A.%F.%B.%C.%on%them,%and%these%bales%were%pointed%out%to%him%by%Mr.%Bayne%as%the%tobacco%which%
belonged%to%the%American%Foreign%Banking%Corporation.%"The%quedan%(Exhibit%A)%is%in%the%same%form%as%quedan%
No.%A[155,%which,%in%the%case%of%Felisa%Roman%vs.%Asia%Banking%Corporation,%was%declared%by%the%Supreme%Court%
of%the%Philippine%Islands%to%be%a%negotiable%warehouse%receipt%conveying%title%to%the%said%bank%superior%to%that%
of%the%vendor's%lien%of%Felisa%Roman%(R.%G.%No.%17825)%%
%
American%Bank%took%said%warehouse%receipt%for%value%
• The%evidence%shows%that%said%quedan%(Exhibit%A)%was%taken%by%the%American%Bank%for%value,%believing%it%to%be%a%
negotiable% warehouse% receipt,% and% without% reasonable% cause% to% believe% that% the% debtor% U.% de% Poli% (who% was%
operating%a%public%warehouse%at%the%time)%was%insolvent.%
%

%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
The%only%question%raised%by%the%attorneys%for%the%assignee%and%for%the%common%creditors%which%will%be%considered%by%
the%court%is%that%as%to%the%sufficiency%of%the%description%of%the%tobacco%in%said%warehouse%receipt.%%
• This%lot%of%tobacco%was%the%only%tobacco%in%the%warehouse.%%
• The%debtor%said%that%it%was%the%tobacco%which%he%transferred%to%the%claimant%bank.%%
• The%tobacco%was%pointed%out%by%the%then%assignee%to%the%claimant's%representative%as%the%tobacco%covered%by%
said%quedan,%Exhibit%A.%%
Hence,%there%does%not%appear%to%be%any%doubt%about%the%identity%of%the%tobacco.%
%
The%only%question%left%for%consideration%is%whether%the%use%of%the%word%'Cagayan'%instead%of%'lsabela'%in%describing%the%
tobacco%in%the%quedan%renders%the%quedan%null%and%void%as%a%negotiable%warehouse%receipt%for%the%tobacco%intended%to%
be%covered%by%it.%%
The%insolvent,%U.%de%Poli,%testified%positively%that%this%quedan%referred%to%the%tobacco%in%the%Azcarraga%warehouse,%and%
he%explained%the%discrepancy%in%the%description.%%
The%then%assignee%(Mr.%Bayne)%was%evidently%convinced%that%this%lot%of%tobacco%belonged%to%the%claimant%bank,%because%
he%pointed%it%out%to%one%of%the%bank's%employees,%who%noted%the%tags%thereon%bearing%the%initials%of%the%claimant%bank.%%
%
ISSUES:%
• W/N%the%description%of%the%tobacco%in%the%quedan%is%sufficnet%"%Yes%it%is%
• W/N%the%quedan%is%valid%despite%the%warehouse%receipt%referring%to%“Cagayan”%instead%of%“Isabela”%"%Valid%
%
HELD:%CA%judgment%affirmed.%American%Bank%wins.%%
%
RATIO:%
The%intention%of%the%parties%to%the%transaction%must%prevail%against%such%a%technical%objection%as%to%the%sufficiency%of%the%
description%of%the%tobacco.%%
It%might%be%different%if%there%had%been%Cagayan%tobacco%in%the%warehouse%at%the%time%of%the%issuance%of%the%quedan,%
Exhibit%A,%or%if%there%were%any%doubt%whatever%as%to%the%identity%of%the%tobacco%intended%to%be%covered%by%the%quedan.%
The%assignee%stands%in%the%shoes%of%the%insolvent,%and,%while%it%is%his%duty%to%protect%the%general%creditors,%he%is%not%in%
the%position%of%a%judgment%creditor%with%an%unsatisfied%execution.%
%
In%view%of%the%foregoing%considerations,%the%court%is%of%the%opinion%that%the%quedan,%Exhibit%A,%is%a%negotiable%warehouse%
receipt%which%was%duly%issued%and%delivered%by%the%debtor%Poli%to%American%Bank,%and%that%it%divested%Poli%of%his%title%to%
said%tobacco%and%transferred%the%position%and%the%title%thereof%to%the%American%Foreign%Banking%Corporation.%
%
It%is%therefore%ordered%and%adjudged%that%the%assignee%deliver%the%said%five%hundred%and%thirty%(530)%bales%of%tobacco%to%
the%American%Foreign%Banking%Corporation,%upon%payment%by%said%bank%of%any%liens%or%charges%thereon,%or,%in%the%event%
of% said% tobacco% having% been% sold,% the% proceeds% thereof,% less% the% storage% and% insurance% charges% paid% after% the%
declaration%of%insolvency;%and%thereafter%due%report%will%be%made%to%this%court%of%such%delivery%to%the%claimant%bank%in%
order%that%the%proceeds%be%deducted%from%the%balance%due%to%said%claimant%bank%from%the%insolvent%debtor.%
%
%
5.%BPI%v.%Herridge%[%Georgina%
%
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
BPI%vs%Herridge[%FU%
ER:%
• POLI%is%an%exporter%and%license%warehouseman.%%
• He%stores%his%export%goods%in%his%own%warehouse%and%indorsed%the%receipts%to%the%bank.%%
• Poli%became%insolvent.%%
• Creditors%(banks%and%unsecured%creditors)%were%claiming%against%his%estate%and%goods%in%his%warehouse.%%
• The%unsecured%creditors%were%saying%that%the%receipts%%were%not%negotiable,%hence%the%bank%has%no%preference%
of%credit%over%them%
• ISSUE:%WON%the%warehouse%receipts%issued%by%POLI%were%negotiable?%Yes%
• SC:%based%on%sec%7%of%the%Act,%for%a%receipt%to%be%non[%negotiable%the%words%“not%negotiable%“%or%“non[
negotiable”%must%appear%on%the%FACE%of%the%receipts,%which%do%not%appear%here.%
• Also,%it%was%an%order%receipt%
o %“to%the%order”%of%POLI%instrument,%since%he%owns%the%goods,%stores%them%and%indorsed%them%to%the%
bank.%
%
• DOCTRINE:%%Warehouse%receipts%play%an%important%role%in%the%commercial%world,%hence%it%must%be%construed%
liberally%in%favor%of%the%holder,%so,%when%the%words%“not%negotiable”%or%“non%negotiable”%does%not%appear%on%the%
face%of%the%receipts%%it%would%be%considered%as%NEGOTIABLE%RECEIPTS%even%if%there%is%no%statement%that%the%
goods%were%to%be%delivered%to%the%bearer%or%to%a%specified%person.%

%
FACTS:%
• Umberto%de%Poli%(POLI)%is%engaged%in%the%export%business%%
• (hemp,%maguey%and%tobacco.)%%
• He%is%also%a%licensed%warehouseman.%%
%
• To%facilitate%his%business:%
1. he%opened%a%current%account%with%banks%(HSBC,%BPI,%Asia%Banking%Corp,%Chartered%Bank%of%India,%Australia%
and%China,%and%Amercan%Banking%Corporation)%
2. he%drew%checks%against%it%
3. buys%his%goods%
4. issues%warehouse%receipts%for%his%goods,%%
5. indorsed%the%receipts%to%the%bank%
6. when%the%goods%have%been%purchased,%he%would%exchanged%the%warehouse%receipts%in%lieu%of%%
a. shipping!papers,%%
b. Draft,!drawn%against%the%foreign%purchasers%in%favor%of%the%bank%
c. Bill!of!Lading%
7. Banks%would%receive%the%entire%proceeds%of%his%sale%
8. Banks%would%credit%proceeds%to%his%current%account%
• POLI%was%declared%insolvent,%banks%(secured%creditors%due%to%the%warehouse%receipts)%and%unsecured%creditors%
were%claiming%ownership%against%the%goods%stored%in%POLI’s%warehouse%
• Unsecured%crdiors%were%claiming%that%the%receipts%are%%
o Not%negotiable%
o Endoresement%conveyed%no%title%to%the%property%
o Not%pledges,%no%delivery%of%merchendise%
o Hence,%banks%have%no%preference%of%credit%over%them%

ISSUE:%WON%the%warehouse%receipts%are%negotiable?%YES%
RATIO:%%
SC:%The%Warehouse%receipts%issued%by%POLI%are%negotiable,%%
%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%
Nego%Week%14%
%
• Sec%7%of%the%Act%provides%that%in%order%to%be%non[negotiable,%the%instrument%must%contain%on%its%FACE%the%
words%“nonnegotiable”%or%“not%negotiable”%–%nowhere%in%the%face%of%the%instrument%were%these%words%
stipulated%
• The%intention%to%make%it%negotiable%was%clear%from%the%receipts[%%
o Since%POLI%deposited%the%goods%in%his%own%warehouse,%and%it%is%stated%in%the%receipts%that%he%is%the%
owner%of%such,%although%there%is%no%statement%that%the%goods%are%to%be%delivered%to%the%bearer%of%
the%receipt%or%specified%person,%it%must%be%PRESUMED%that%the%goods%are%subject%to%the%order!of!
POLI!(order!receipts)%
• Moreover,%since%warehouse%receipts%play%an%important%role%in%the%commercial%business,%it%must%be%
construed%liberally%in%favor%of%the%holder%

POSSIBLE%questions:%
• Receipt%was%written%in%Spanish,%%
o MAGPANTAY%(agent%of%POLI)%wrote%the%receipts%made%an%error%in%the%translation.%
o PorI%might%mean%in%English%–%by,%for,%for%the%account%of.I%hence%the%court%declared%it%must%be%construed%
to%mean%by%“order%of%POLI”%
• POLI%was%declared%insolvent%to%the%amount%of%several%million%pesos%over%his%asset.%

%
*not%pertinent,%but%nevertheless:%
Unsecured%creditors%made%an%issue%regarding%comingling!of!goods%because%the%receipts%were%issued%by%POLI%prior%to%
possession%
• GR:%Warehouseman%may%not%comingle%goods,%unless%expressly%authorized%by%the%owner.%%
o Here,%since%POLI%was%also%the%owner%of%it,%then%the%banks%share%in%the%goods%would%be%in%proportion%of%
the%mass.%

%%
%

%
%%%%%LEX.%%%%%%%%%ANGEL.%%%%JOBEN.%%%%%GEORGE.%%%%NORBY.%%%%%%%KEITH.%%%%%MAITI.%%%%%%%!KARL.%%%%%%MARIANA.%%DONDON.%%%%%CJ.%%%%%%GASTON.%%%%%%ZEP.%%%%%%%%%%%RIO.%%%%%%%%%%%JECH.%%%%%%%%%%%%JED%

%
2C%2015%

Вам также может понравиться