Online DIGESTS – warehouse receipts Bank of P.I. v. Herridge FACTS: The insolvent Umberto de Poli was for several years engaged on an extensive scale in the exportation of Manila hemp, maguey and other products of the country. He was also a licensed public warehouseman, though most of the goods stored in his warehouses appear to have been merchandise purchased by him for exportation and deposited there by he himself.chanr In order to finance his commercial operations De Poli established credits with some of the leading banking institutions doing business in Manila at that time, among them the Hongkong & Shanghai Banking Corporation, the Bank of the Philippine Islands, the Asia Banking Corporation, the Chartered Bank of India, Australia and China, and the American Foreign Banking Corporation. De Poli opened a current account credit with the bank against which he dre w his checks in payment of the products bought by him for exportation. Upon the purchase, the products were stored in one of his warehouses and warehouse receipts issued therefor which were endorsed by him to the bank as security for the payment of his credit in the account current. When the goods stored by the warehouse receipts were sold and shipped, the warehouse receipt was exchanged for shipping papers, a draft was drawn in favor of the bank and against the foreign purchaser, with bill of landing attached, and the entire proceeds of the export sale were received by the bank and credited to the current account of De Poli.chanroble De Poli was declared insolvent by the Court of First Instance of Manila with liabilities to the amount of several million pesos over and above his assets. An assignee was elected by the creditors and the election was confirmed by the court Among the property taken over over the assignee was was the merchandise stored in the various warehouses of the insolvent. insolvent. This merchandise consisted principally of hemp, maguey and tobacco. The various banks holding warehouse receipts issued by De Poli claim ownership of this merchandise under their respective receipts, whereas the other creditors of the insolvent maintain that the warehouse receipts are not negotiable, that their endorsement to the present holders conveyed no title to the property, that they cannot be regarded as pledges of the merchandise inasmuch as they are not no t public documents and the possession of the merchandise was not delivered to the claimants and that the claims of the holders of the receipts have no preference over those of the ordinary unsecured creditors.law lib
ISSSUE: Whether or not the warehouse receipts issued are negotiable? HELD:
Yes, a warehouseman who deposited merchandise in his own warehouse, issued a warehouse receipts therefore and thereafter negotiated the receipts by endorsement. The receipt recites that the goods were deposited “por orden” of the depositor, the warehouseman, but contained no statement that the goods were to be delivered to the bearer of the receipts or to a specified person. It is in the form of a warehouse receipts and was not mark “nonnegotiable”. Therefore the receipts was negotiable warehouse receipts and the words “por orden” must be construed to mean “to the order”.
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. HAWAIIAN-PHILIPPINE COMPANY, respondent. FACTS: The petitioner, a corporation duly organized in accordance with law, is operating a sugar central in the City of Silay, Occidental Negros. It produces centrifugal sugar from sugarcane supplied by planters. The processed sugar is divided between the planters and the petitioner in the proportion stipulated in the milling contracts, and thereafter is deposited in the warehouses of the latter. (Pp. 4-5, t.s.n.) For the sugar deposited by the planters, the petitioner issues the corresponding warehouse receipts of "quedans". It does not collect storage charges on the sugar deposited in its warehouse during the first 90 days period counted from the time it is extracted from the sugarcane. Upon the lapse of the first ninety days and up to the beginning of the next milling season, it collects a fee of P0.30 per picul a month. Henceforth, if the sugar is not yet withdrawn, a penalty of P0.25 per picul or fraction thereof a month is imposed. (Exhibits "B-1", "C-1", "D-1", "B-2", "C-2", p. 10, t.s.n.) The storage of sugar is carried in the books of the company under Account No. 5000, denominated "Manufacturing Cost Ledger Control"; the storage fees under Account No. 521620; the expense accounts of the factory under Account No. 5200; and the so-called "Sugar Bodega Operations" under Account No. 5216, under which is a Sub Account No. 20, captioned, "Credits". (Pp. 16-17, t.s.n., Exhibit "F".) The collections from storage after the lapse of the first 90 days period are entered in the company's books as debit to CASH, and credit to Expense Account No. 2516-20 (p. 18, t.s.n.). The credit for storage charges decreased the deductible expense resulting in the corresponding increase of the taxable income of the petitioner. This is reflected by the entries enclosed in parenthesis in Exhibit "G", under the heading "Storage Charges". (P. 18, t.s.n.) The alleged reason for this accounting operation is that, inasmuch as the "Sugar Bodega Operations" is considered as an expense account, entries under it are "debits". Similarly, since "Storage Charges" constitute "credit", the corresponding figures (see Exhibit "C") are enclosed in parenthesis as they decrease the expenses of maintaining the sugar warehouses. Upon investigation conducted by the Bureau, it was found that during the years 1949 to 1957, the petitioner realized from collected storage fees a total gross receipts of P212,853.00, on the basis of which the respondent determined the petitioner's liability for fixed and percentage taxes, 25% surcharge, and administrative penalty in the aggregate amount of P8,411.99 (Exhibit "5", p. 11, BIR rec.) After due hearing the Court of Tax Appeals ordered the CIR to refund to respondent Hawaiian-Philippine Company the amount of P8,411.99 representing fixed and percentage taxes assessed against it and which the latter had deposited with the City Treasurer of Silay, Occidental Negros
ISSUE: Whether or notpetitioner is a warehouseman liable for the payment of the fixed and percentage taxes prescribed in Sections 182 and 191 of the National Internal Revenue Code HELD: YES. Respondent disclaims liability under the provisions quoted above, alleging that it is not engaged the business of storing its planters' sugar for profit; that the maintenance of its warehouses is merely incidental to its business of manufacturing sugar and in compliance with its obligation to its planters. We find this to be without merit. It is clear from the facts of the case that, after manufacturing the sugar of its planters, respondent stores it in its warehouses and issues the corresponding "quedans" to the planters who own the sugar; that while the sugar is stored free during the first ninety days from the date the it "quedans" are issued, the undisputed fact is that, upon the expiration of said period, respondent charger, and collects storage fees; that for the period beginning 1949 to 1957, respondent's total gross receipts from this particular enterprise amounted to P212,853.00. A warehouseman has been defined as one who receives and stores goods of another for compensation (44 Words and Phrases, p. 635). For one to be considered engaged in the warehousing business, therefore, it is sufficient that he receives goods owned by another for storage, and collects fees in connection with the same. In fact, Section 2 of the General Bonded Warehouse Act, as amended, defines a warehouseman as "a person engaged in the business of receiving commodity for storage." That respondent stores its planters' sugar free of charge for the first ninety days does not exempt it from liability under the legal provisions under consideration. Were such fact sufficient for that purpose, the law imposing the tax would be rendered ineffectual.
Gonzalez vs Go Tiong Facts:
Go Tiong (respondent) owned a rice mill and warehouse, located in Pangasinan. Thereafter, he obtained a license to engage in the business of a bonded warehouseman. Subsequently, respondent Tiong executed a Guaranty Bond with the Luzon Surety Co to secure the performance of his obligations as such bonded warehouseman, in the sum of P18,334, in case he was unable to return the same. Afterwards, respondent Tiong insured the warehouse and the palay deposited therein with the Alliance Surety and Insurance Company. But prior to the issuance of the license to Respondent, he had on several occasions received palay for deposit from Plaintiff Gonzales, totaling 368 sacks, for which he issued receipts. After he was licensed as a bonded warehouseman, Go Tiong again received various deliveries of palay from Plaintiff, totaling 492 sacks, for which he issued the corresponding receipts, all the grand total of 860 sacks, valued at P8,600 at the rate of P10 per sack. Noteworthy is that the receipts issued by Go Tiong to the Plaintiff were ordinary receipts, not the "warehouse receipts" defined by the Warehouse Receipts Act (Act No. 2137).
On or about March 15, 1953, Plaintiff demanded from Go Tiong the value of his deposits in the amount of P8,600, but he was told to return after two days, which he did, but Go Tiong again told him to come back. A few days later, the warehouse burned to the ground. Before the fire, Go Tiong had been accepting deliveries of palay from other depositors and at the time of the fire, there were 5,847 sacks of palay in the warehouse, in excess of the 5,000 sacks authorized under his license. After the burning of the warehouse, the depositors of palay, including Plaintiff, filed their claims with the Bureau of Commerce. However, according to the decision of the trial court, nothing came from Plaintiff's efforts to have his claim paid. Thereafter, Gonzales filed the present action against Go Tiong and the Luzon Surety for the sum of P8,600, the value of his palay, with legal interest, damages in the sum of P5,000 and P1,500 as attorney's fees. While the case was pending in court, Gonzales and Go Tiong entered into a contract of amicable settlement to the effect that upon the settlement of all accounts due to him by Go Tiong, he, Gonzales, would have all actions pending against Go Tiong dismissed. Inasmuch as Go Tiong failed to settle the accounts, Gonzales prosecuted his court action
ISSUE: Whether or not Plaintiff’s claim is governed by the Bonded Warehouse Act due to Go Tiong’s act of issuing to the former ordinary receipts, not warehouse receipts? RULING: YES. SC ruled in favor Plaintiff.
Act No. 3893 provides that any deposit made with Respondent Tiong as a bonded warehouseman must necessarily be governed by the provisions of Act No. 3893. The kind or nature of the receipts issued by him for the deposits is not very material much less decisive since said provisions are not mandatory and indispensable Under Section 1 of the Warehouse Receipts Act, the issuance of a warehouse receipt in the form provided by it is merely permissive and directory and not obligatory. . "Receipt", under this section, can be construed as any receipt issued by a warehouseman for commodity delivered to him As the trial court well observed, as far as Go Tiong was concerned, the fact that the receipts issued by him were not "quedans" is no valid ground for defense because he was the principal obligor. Furthermore, as found by the trial court, Go Tiong had repeatedly promised Plaintiff to issue to him "quedans" and had assured him that he should not worry; and that Go Tiong was in the habit of issuing ordinary receipts (not "quedans") to his depositors. Furthermore, Section 7 of said law provides that as long as the depositor is injured by a breach of any obligation of the warehouseman, which obligation is secured by a bond, said depositor may sue on said bond. In other words, the surety cannot avoid liability from the mere failure of the warehouseman to issue the prescribed receipt. ROMAN V. ASIA BANKING CORPORATION FACTS: U. de Poli, for value received, issued a quedan convering the 576 bultos of tobacco to the Asia Banking Corporation (claimant & appellant). It was executed as a security for a loan. The aforesaid 576 butlos are part and parcel of the 2, 766 bultos purchased by U. de Poli from Felisa Roman (claimant & appellee). The quedan was marked as Exhibit D which is a warehouse receipt issued by the warehouse of U. de Poli for 576 bultos of tobacco. In the left margin of the face of the receipt, U. de Poli certifies that he is the sole owner of the merchandise therein described. The receipt is endorsed in blank; it is not marked”non-negotiable” or “not negotiable”.
Since a sale was consummated between Roman and U. de Poli, Roman’s claim is a vendor’s lien. The lower court ruled in favor of Roman on the theory that since the transfer to Asia Banking Corp. (ASIA) was neither a pledge nor a mortgage, but a security for a loan, the vendor’s lien of Roman should be accorded preference over it. However, if the warehouse receipt issued was non-negotiable, the vendor’s lien of Roman cannot prevail against the rights of ASIA as indorsee of the receipt. ISSUE: WON the quedan issued by U. de Poli in favor of ASIA. is negotiable, despite failure to mark it as not negotiable? HELD: YES. The warehouse receipt in question is negotiable. It recited that certain merchandise deposited in the ware house “por orden” of the depositor instead of “a la orden”, there was no other direct statement showing whether the goods received are to be delivered to the bearer, to a specified person, or t o a specified order or his order. However, the use of “por orden” was merely a clerical or grammatical error and that the receipt was negotiable. As provided by the Warehouse Receipts Act, in case the warehouse man fails to mark it as “non-negotiable”, a holder of the receipt who purchase if 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 appears to have given any warehouse receipt not marked “non-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 p resent case. Hence, the rights of the indorsee, ASIA, are superior to the vendor’s lien.
CONSOLIDATED vs ARTEX Facts: Consolidated Terminals Inc (CTI) operated a customs warehouse in Manila. It received 193 bales of high density compressed raw cotton worth P99k. It was understood that CTI would keep the cotton on behalf of Luzon Brokerage until the consignee Paramount Textile had opened the corresponding letter of credit in favor of Adolph Hanslik Cotton. By virtue of forged permits, Artex was able to obtain the bales of cotton and paid P15k. Issue:
W/N CTI as warehouseman was entitled to the possession of the bales of cotton?
Ruling: No. CTI had no cause of action. It was not the owner of the cotton. It was not a real party of interest in the case. CTI was not sued for damages by the real party in interest.
PNB v. Atendido FACTS: Laureano Atendido obtained from PNB a loan of P3k and pledged 2000 cavans of palay to guarantee payment which were then deposited in the warehouse of Cheng Siong Lam & Co and to that effect the borrower endorsed in favour of the bank the corresponding warehouse receipt. Before the maturity of the loan, the 2000 cavans of palay disappeared for unknown reasons in the warehouse. When the loan matured, the borrower failed to pay obligation
Defendant claimed that the warehouse receipt covering the palay which was given as security having been endorsed in blank in favour 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 2000 cavans of palay given as security, endorsed in blank, to PNB, has the effect of transferring their title or ownership OR it should be considered merely as a guarantee to secure the payment of the obligation of Defendant? HELD:
Nature of contract is Pledge supported by the stipulations embodied in the contract signed by Defendant when he secured the loan from PNB. The 2000 cavans of palay covered by the warehouse receipt were given to PNB only as a guarantee to secure the fulfilment by Defendant in his obligation. This clearly appears in the contract wherein it is expressly stated that said 2000 cavanes of palay were given as collateral security. It follows that by the very nature of the transaction its ownership remains with the pledgor subject only to foreclosure in case of non-fulfillment of the obligation. By this we mean that if the obligation is not paid upon maturity the most that the pledge can do is to sell the property and apply the proceeds to the payment of the obligation and to return the balance, if any, to the pledgor. This is the essence of the contract, for, according to law, a pledge cannot b ecome the owner of, nor appropriate to himself the thing given in pledge. If by the contract of pledge, the pledgor continues to be the owner of the thing pledged during the pendency of the obligation, it stands to reason that in case of loss of the property, the loss should be borne by the pledgor. The fact that the warehouse receipt covering the palay was delivered, endorsed in blank, to the bank does not alter the situation, the purpose of such endorsement being merely to transfer the juridical possession of the property to the pledge and to forestall any possible disposition thereof on the part of the pledgor. 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 is 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 fault or negligence of the mortgagee or pledge 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.
Siy Cong Bien vs HSBC FACTS
Plaintiff is a corporation engaged in business generally, and that the Defendant HSBC is a foreign bank authorized to engage in the banking business in the Philippines. On June 25, 1926, Otto Ranft called the office of the Plaintiff to purchase hemp (abaca), and he was offered the bales of hemp as described in the contested negotiable quedans. The parties agreed to the aforesaid price, and on the same date the quedans, together with the covering invoice, were sent to Ranft by the Plaintiff, without having been paid for the hemp, but the Plaintiff's understanding was o that the payment would be made against the same quedans, o and it appear that in previous transaction of the same kind between the bank and the Plaintiff, quedans were paid one or two days after their delivery to them.
Immediately these Quedans were pledged by Otto Ranft to the Defendant HSBC to secure the payment of his preexisting debts to the latter. The baled hemp covered by these warehouse receipts was worth P31,635; 6 receipts were endorsed in blank by the Plaintiff and Otto Ranft, and 2 were endorsed in blank, by Otto Ranft alone On the evening of the said delivery date, Otto Ranft died suddenly at his house in the City of Manila. When the Plaintiff found out, it immediately demanded the return of the quedans, or the payment of the value, but was told that the quedans had been sent to the herein Defendant as soon as they were received by Ranft. Shortly thereafter the Plaintiff filed a claim for the aforesaid sum of P31,645 in the intestate proceedings of the estate of the deceased Otto Ranft, which on an appeal from the decision of the committee on claims, was allowed by the CFI Manila. In the meantime, demand had been made by the Plaintiff on the Defendant bank for the return of the quedans, or their value, which demand was refused by the bank on the ground that it was a holder of the quedans in due course.
ISSUE Whether or not the Quedans endorsed in blank gave the HSBC rightful and valid title to the goods? HELD YES. SC ruled in favour of Defendant HSBC.
It may be noted, o first , that the quedans in question were negotiable in form; o second , that they were pledged by Otto Ranft to the Defendant bank to secure the payment of his preexisting debts to said bank; o 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; o and fourth, that the two remaining quedans which were duly endorsed in blank by him. The bank had a perfect right to act as it did, and its action is in accordance with sections 47, 38, and 40 of the Warehouse Receipts Act However, the pertinent provision regarding the rights the Defendant bank acquired over the aforesaid quedans after indorsement and delivery to it by Ranft, is found in section 41 o f the Warehouse Receipts Act (Act No. 2137): 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 o f 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. . . . Therefore, 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. Moreover, Plaintiff is estopped to deny that the bank had a valid title to the quedans for the reason that the Plaintiff had voluntarily clothed Ranft with all the attributes of ownership and upon which the Defendant bank relied. Subsequently, Plaintiff in this case has suffered the loss of the quedans, but as far as the court sees it, there is now no remedy available to the Plaintiff equitable estoppel place the loss upon him whose misplaced confidence has made the wrong possible as ruled in National Safe Deposit vs. Hibbs (a US case) o
Lopez v Del Rosario Facts: > Benita Del Rosario is the owner of a bonded warehouse in Manila where copra and other merchandise are deposited. > Among those who had copra deposited in the warehouse was Froilan Lopez, the owner of 14 warehouse receipts with a declared value of P107,990.40 in his name. > Del Rosario secured insurance on the warehouse and its contents with 5 different insurance companies in the amount of P404,800. > All policies were in the name of Del Rosario, except for one (with Nat’l Insurance Co.) for 40T, in favor of Compania Copra de Tayabas. > The warehouse and its contents were destroyed by fire. When Bayne, a fire loss adjuster, failed to effect a settlement between the Insurance companies and Del Rosario, the latter authorized Atty. Fisher to negotiate with the Companies. > An agreement was reached to submit the matter to arbitration. The claims by different people who had stored copra in the warehouse were settled with the exception of Friolan Lopez. > A case was filed in CFI by Lopez. The court awarded him the sum of P88,492.21 with legal interest. Issue: Whether or not Del Rosario acted as the agent of Lopez in taking out the insurance on the contents of the warehouse or whether she acted as the reinsurer of the copra. Held: She acted as the agent of Lopez. The agency can be deduced from the warehouse receipts, the insurance policies and the circumstances surrounding the transaction. Under any aspect, Del Rosario is liable. The law is that a policy effected by a bailee and covering by its terms in his own property and property held in trust, inures, in the event of loss, equally and proportionately to the benefit of all owners of the property insured. Even if one secured insurance covering his own goods and goods stored with him, and even if the owner of the stored goods did not request or know the insurance, and did not ratify it before the payment of the loss, it has been held by a reputable court that the warehouseman is liable to the owner of such stored goods for his share. In a case of contributing policies, adjustments of loss made by an expert or by a board of arbitrators may be submitted to the court NOT as evidence of the facts stated therein, or as obligatory, but for the purpose of assisting the court in calculating the amount of liability.
