Felisa Roman, appellee v.

Asia Banking Corporation, appellant

GR. No. 17825 June 26, 1922

Facts:
Subject 576 tobacco leaf bales were part of the 2,777 bales purchased by Umberto de Poli
from appellee, Roman.

Months after, involuntary insolvency proceeding against U. De Poli was instituted. Poli issued
a quedan to Asia Banking Corporation (ABC) covering said 576 bultos for value.

Roman notified ABC of her contention for her vendor’s lien in proceedings.

CFI found for Roman. CFI Basis: Transfer to ABC was for security of a loan hence vendor’s lien
has better right.

Issues:

1. Whether or not warehouse receipt negotiable.

2. Whether or not vendor’s lien superior over mortgagee.

Held:

YES, warehouse receipt is negotiable.

Although it contained no direct statement showing whether goods received to be delivered to

bearer/specified person/specified person or his order, nevertheless it is negotiable because:

1. It is evident that deposit, as evidenced by receipt here, was intended to be made subject to
the ORDER of depositor and Poli was the authorized person to indorse it;

2. Indorsement in blank and delivery to ABC was made on the same date as issuance of
Warehouse receipt; and,

3. Warehouse receipt not marked “Non-negotiable” or “Not negotiable”

General Rule: If warehouseman fails to indicate “Non-negotiable” on face of warehouse receipt,

holder in good faith and for value, at his election, treat it as negotiable imposing upon
warehouseman same liabilities as if it were one.
Exception: When marked “non-negotiable” on its face by warehouseman issuing it.
Doctrine: A warehouse receipt like any other document must be interpreted according to its
evident intent.

NO, Doctrine: A vendor's lien upon goods stored in a public warehouse cannot prevail against
the rights of a purchaser, mortgagee, or pledgee, for value and in good faith to whom the
negotiable warehouse receipt for such goods has been indorsed.

Here, CFI failed to consider Section 49 of Act No. 2137: “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.”

Art. 58, same Act: “Purchase” includes Mortgagee and Pledgee.

Hence, CFI order reversed.

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