CASE 1 BPI v Herridge
important role in modern commerce and the present day
Upon hearing, the court below held that the receipts in
question were valid negotiable warehouse receipts and
ordered the distribution of the hemp and maguey covered
by the receipts among the holders thereof proportionately
by grades.
Section 7 of the Act reads:
A nonnegotiable receipt shall have plainly placed upon its
face by the warehouseman issuing it "nonnegotiable," 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.
The receipt is not marked "nonnegotiable" or "not
negotiable," and is endorsed "Umberto de Poli."
As will be seen, the receipt is styled "Quedan" (warehouse
receipt) and contains all the requisites of a warehouse
receipt as prescribed by section 2, supra, except that it
does not, in express terms, state whether the goods
received are to be delivered to bearer, to a specified
person or to his order. The intention to make it a
negotiable warehouse receipt appears, nevertheless, quite
clearly from the document itself: De Poli deposited the
goods in his own warehouse; the warehouse receipt states
that he is the owner of the goods deposited; there is no
statement that the goods are to be delivered to the bearer
of the receipt or to a specified person and the
presumption must therefore necessarily be that the goods
are in the warehouse subject to the orders of their owner
De Poli. As the owner of the goods he had, of course, full
control over them while the title remained in him; we
certainly cannot assume that it was the intention to have
the goods in the warehouse subject to no one's orders.
That the receipts were intended to be negotiable is further
shown by the fact that they were not marked
"nonnegotiable" and that they were transferred by the
endorsement of the original holder, who was also the
warehouseman. In his dual capacity of warehouseman and
the original holder of the receipt, De Poli was the only
party to the instrument at the time of its execution and
the interpretation he gave it at that time must therefore
be considered controlling as to its intent.
As instruments of credit, warehouse receipts play a very
tendency of the courts is towards a liberal construction of
the law in favor of a bona fide holder of such receipts.
CLAIMS OF THE BANK OF THE PHILIPPINE ISLANDS AND
THE GUARANTY TRUST COMPANY OF NEW YORK
On November 16, 1920, De Poli executed and delivered to
said bank a chattel mortgage on the same property
described in the receipts, in which chattel mortgage no
mention was made of the warehouse receipts. This
mortgage was registered in the Office of the Register of
Deeds of Manila on November 18, 1920.
The appellants argue that the obligations created by the
warehouse receipts were extinguished by the chattel
mortgage and that the validity of the claim must be
determined by the provisions of the Chattel Mortgage Law
and not by those of the Warehouse Receipts Act, or, in
other words, that the chattel mortgage constituted a
novation of the contract between the parties.
Novations are never presumed and must be clearly
proven. There is no evidence whatever in the record to
show that a novation was intended.
ROMAN v. ASIA BANKING CORPORATION
Facts:
 That on November 18, 1920, U. de Poli, for value
received, issued a quedan, covering aforesaid 576
bultos of tobacco, to the Asia Banking Corporation
as per copy of quedan attached and marked
Exhibit D.
 That aforesaid 576 bultos of tobacco are part and
parcel of the 2,777 bultos purchased by U. de Poli
from Felisa Roman
 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
endorced in blank "Umberto de Poli;" it is not
marked "non-negotiable" or "not negotiable."
 Though Exhibit A in its paragraph (c) states that
the tobacco should remain in the warehouse of U.
de Poli as a deposit until the price was paid, it
appears clearly from the language of the exhibit as
a whole that it evidences a contract of sale and the
recitals in order of the Court of First Instance,
dated January 18, 1921, which form part of the
printed record, 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.
DOCTRINE:
Where a negotiable receipts 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. (See section 58 (a) of
the same Act.)
 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 indorse of the receipt.
ISSUE: whether the receipt before us is negotiable.
RULING:
Yes. It must be considered a negotiable receipt. A
warehouse receipt, like any other document, must be
interpreted according to its evident intent (Civil Code,
arts. 1281 et seq.) 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 "por orden" are used instead
of "a la orden" is very evidently merely a clerical or
grammatical error. The phrase must be construed to mean
that U. de Poli was the person authorized to endorse 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 endorsement 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 "por
orden del Sr. 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.
Not market as non nego or not nego on face.
PNB v ATENDIDO
FACTS:
 Philippine National Bank a loan of P3,000 payable
in 120 days with interests at 6% per annum from
the date of maturity. To guarantee the payment of
the obligation the borrower pledged to the bank
2,000 cavanes of palay which were then deposited
in the warehouse of Cheng Siong Lam & Co. in San
Miguel, Bulacan, and to that effect the borrower
endorsed in favor of the bank the corresponding
warehouse receipt.
 Before the maturity of the loan, the 2,000 cavanes
of palay disappeared for unknown reasons in the
warehouse. When the loan matured the borrower
failed to pay either the principal or the interest
and so the present action was instituted.
 Defendant claimed that the warehouse receipt
covering the palay which was given as security
having been endorsed in blank in favor of the
bank, and the palay having been lost or
disappeared, he thereby became relieved of
liability.
ISSUE:
Whether the surrender of the warehouse receipt
covering the 2,000, cavanes of palay given as a
security, endorsed in blank, to appellee, has the effect
of transferring their title or ownership to said
appellee, or it should be considered merely as a
guarantee to secure the payment of the obligation of
Appellant.
RULING:
Guaranty. 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 quedan, but he merely retains the right to Otto Ranft to the defendant bank to secure the payment
keep and with the consent of the owner to sell them so as of his preexisting debts to said bank (paragraph 3 of the
to satisfy the obligation from the proceeds of the sale this Stipulation of Facts); third, that such of the quedans as
for the simple reason that the transaction involved is not a were issued in the name of the plaintiff were duly
sale but only a mortgage or pledge, and that if the endorsed in blank by the plaintiff and by Otto Ranft; and
property covered by the quedan or warehouse receipt is fourth, that the two remaining quedans which were duly
lost without the fault or negligence of the mortgagee or endorsed in blank by him.
pledgee or the transferee or endorsee of the quedan, then
SEC. 47. When negotiation not impaired by fraud,
said goods are to be regarded as lost on account of the
mistake, or duress. — The validity of the negotiation of a
real owner, mortgagor or pledgor. The fact that the
receipt is not impaired by the fact that such negotiation
quedan is endorsed in blank, does not alter the situation,
was a breach of duty on the part of the person making the
the purpose of the endorsement being merely to transfer
negotiation, or by the fact that the owner of the receipt
the juridical possession of the property to the pledgee and
was induced by fraud, mistake, or duress to intrust the
to forestall any possible disposition thereof on the part of
possession or custody of the receipt was negotiated, or a
the pledgor. This is true notwithstanding the provisions to
person to whom the receipt was subsequent negotiated,
the contrary of the Warehouse Receipts Law.
paid value therefor, without notice of the breach of duty,
This being so, the ownership remains with the pledgor or fraud, mistake, or duress.
subject only to foreclosure in case of non-fulfillment of
SEC. 38. Negotiation of negotiable receipts by
obligation. The pledgor, continuing to be the owner of the
indorsement. — A negotiable receipt may be negotiated
goods pledged during the pendency of the obligation in
by the indorsement of the person to whose order the
case of the loss of the property, the loss is borne by him.
goods are, by the terms of the receipt, deliverable. Such
SIY CONG BIEN v HSBC indorsement may be in blank, to bearer or to a specified
person. . . . Subsequent negotiation may be made in like
FACTS:
manner.
 This action was brought in the Court of First
SEC. 40. Who may negotiate a receipt.
Instance of Manila to recover the sum of P31,645,
the value of 464 bales of hemp deposited in SEC. 41. Rights of person to whom a receipt has been
certain bonded warehouses as evidenced by the negotiated.
quedans (warehouse receipts) described in the
In its second assignment of error, the defendant-appellant
complaint, said quedans having been delivered as
maintains that the plaintiff-appellee is estopped to deny
pledge by one Otto Ranft to the herein defendant,
that the bank had a valid title to the quedans for the
the Hongkong and Shanghai Banking Corporation,
reason that the plaintiff had voluntarily clothed Ranft
for the guarantee of a preexisting debt of the
with all the attributes of ownership and upon which the
former to the latter.
defendant bank relied. The Supreme Court of the United
 That in the night of June 25, 1926, said Otto Ranft
States through Justice Day applied the familiar rule of
died suddenly at his house in the City of Manila.
equitable estoppel that where one of two innocent
Plaintiff filed its first complaint against the
persons must suffer a loss he who by his conduct made
defendant, wherein it alleged that it has "sold" the
the loss possible must bear it.
quedans in question to the deceased O. Ranft for
cash, but that the said O. Ranft had not fulfilled PNB v SE
the conditions of the sale.
FACTS:
ISSUE: W/N the Quedans endorsed in blank gave HSBC
rightful and valid title to the goods.  Noahs Ark Sugar Refinery issued on several dates,
Warehouse Receipts covering sugar deposited.
RULING: The receipts are substantially in the form, and
contains the terms, prescribed for negotiable
Yes. . It may be noted, first, that the quedans in question
warehouse receipts by Section 2 of the law.
were negotiable in form; second, that they were pledge by
  Subsequently, Warehouse Receipts Nos. 18080
and 18081 were negotiated and endorsed to Luis
T. Ramos; and Receipts Nos. 18086, 18087 and
18062 were negotiated and endorsed 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 Philippine National
Bank. The aforementioned quedans were
endorsed by them to the Philippine National Bank.
 Luis T. Ramos and Cresencia K. Zoleta failed to pay
their loans upon maturity on January 9, 1990.
Consequently, on March 16, 1990, the Philippine
National Bank wrote to Noahs Ark Sugar Refinery
demanding delivery of the sugar stocks covered by
the quedans endorsed to it by Zoleta and Ramos.
Noahs Ark Sugar Refinery refused to comply with
the demand alleging ownership thereof
 Judgement rendered ordering the private
respondents Noahs Ark Sugar Refinery, Alberto T.
Looyuko, Jimmy T. Go and Wilson T. Go, jointly
and severally: (a) to deliver to the petitioner
Philippine National Bank, the sugar stocks covered
by the Warehouse Receipts/ (b) to pay plaintiff
Philippine National Bank attorneys fees, litigation
expenses
 private respondents moved for reconsideration of
this decision, filed a Motion Seeking Clarification
of the Decision
ISSUE:
Can the warehouseman enforce his warehousemans lien
before delivering the sugar stocks as ordered by the Court
of Appeals or need he file a separate action to enforce
payment of storage fees?
RULING:
Yes. While the PNB is entitled to the stocks of sugar as the
endorsee of the quedans, delivery to it shall be effected
only upon payment of the storage fees. Imperative is the
right of the warehouseman to demand payment of his lien
at this juncture, because, in accordance with Section 29 of
the Warehouse Receipts Law, the warehouseman loses his
lien upon goods by surrendering possession thereof. In
other words, the lien may be lost where the
warehouseman surrenders the possession of the goods
without requiring payment of his lien, because a
warehousemans lien is possessory in nature.
SECTION 31. Warehouseman need not deliver until lien is
satisfied. - A warehouseman having a lien valid against the
person demanding the goods may refuse to deliver the
goods to him until the lien is satisfied.
Petitioner is in estoppel in disclaiming liability for the
payment of storage fees due the private respondents as
warehouseman while claiming to be entitled to the sugar
stocks covered by the subject Warehouse Receipts on the
basis of which it anchors its claim for payment or delivery
of the sugar stocks. The unconditional presentment of the
receipts by the petitioner for payment against private
respondents on the strength of the provisions of the
Warehouse Receipts Law (R.A. 2137) carried with it the
admission of the existence and validity of the terms,
conditions and stipulations written on the face of the
Warehouse Receipts, including the unqualified recognition
of the payment of warehousemans lien for storage fees
and preservation expenses. Petitioner may not now
retrieve the sugar stocks without paying the lien due
private respondents as warehouseman.
PNB v SE
FACTS:
 On February 21, 1995, private respondents claim
for lien was heard and evidence was received in
support thereof.
 Pursuant to the abovementioned Supreme Court
Decision, private respondents filed a Motion for
Execution of Defendants Lien as Warehouseman
dated 27 November 1996.
 PNB opposed said Motion on the following
grounds:
(a) The lien claimed by Noahs Ark in the
unbelievable amount of P734,341,595.06 is
illusory; and
(b) There is no legal basis for execution of
defendants lien as warehouseman unless and until
PNB compels the delivery of the sugar stocks.
ISSUES:
1. special civil action the appropriate remedy
2. Has the trial court the authority to issue a writ of
execution on Noahs Arks claims for storage fees?
Is [petitioner] liable for storage fees (a) from the
issuance of the quedans in 1989 to Rosa Sy, St.
Therese Merchandising and RNS Merchandising,
up to their assignment by endorsees Ramos and
 Zoleta to [petitioner] for their loan; or (b) after
[petitioner] has filed an action for specific
performance and damages (Civil Case No. 90-
53023) against Noahs Ark for the latters failure to
comply with [petitioners] demand for the delivery
of the sugar?
3. Did respondent Judge commit grave abuse of
discretion as charged?
RULING:
1. Yes. This Court has original jurisdiction, concurrent
with that of Regional Trial Courts and the Court of
Appeals, over petitions for certiorari, prohibition,
mandamus, quo warranto and habeas corpus,[33]
and we entertain direct resort to us in cases where
special and important reasons or exceptional and
compelling circumstances justify the same.[34]
These reasons and circumstances are present
here.
2. We confirmed petitioners liability for storage fees
in G.R. No. 119231. However, petitioners status as
to the quedans must first be clearly defined and
delineated to be able to determine the extent of
its liability.
In conclusion, we hold that 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 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, this
for the simple reason that the transaction involved
is not a sale but only a mortgage or pledge, and
that 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.
Simply put, where a valid demand by the lawful
holder of the quedans for the delivery of the
goods is refused by the warehouseman, despite
the absence of a lawful excuse provided by the
statute itself, the warehousemans lien is
thereafter concomitantly lost.
The loss of the warehousemans 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 Noahs
Ark to heed the lawful demand by petitioner for
the release of the goods.
3. Yes. We hold that the trial court deprived
petitioner of due process in rendering the
challenged order of 15 April 1996 without giving
petitioner an opportunity to present its evidence.
During the final hearing of the case, private
respondents commenced and concluded their
presentation of evidence as to the matter of the
existence of and amount owing due to their
warehousemans lien.
A warehouseman may enforce his lien under the following
instances: 1) he may refuse to deliver the goods until his
lien is satisfied; 2) he may sell the goods and apply the
proceeds thereof to the value of the lien; 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; or such remedies
allowed by law for the enforcement of a lien against
personal property. (Philippine National Bank vs. Sayo, Jr.,
292 SCRA 202 (1998))
The refusal of the warehouseman to deliver the sugar to
the endorsee of the quedans on the ground that it has
claimed ownership over the sugar by reason of non-
payment of its buyer, not being one of the remedies
available to the warehouseman to enforce his lien, caused
the loss of the warehouseman’s lien. Nevertheless, the
loss did not extinguish the obligation to pay the
warehouseman’s fees but merely caused the fees and
charges to cease to accrue from the date of the rejection
by the warehouseman to heed the previous lawful
demand for the release of the goods. (Philippine National
Bank vs. Sayo, Jr., 292 SCRA 202 (1998))