PHILIPPINE NATIONAL BANK, petitioner, vs. HON. MARCELINO L.

SAYO, JR.,

FACTS: In accordance with Act No. 2137, the Warehouse Receipts

LawArk Sugar Refinery
issued on several dates, the following Warehouse Receipts (Quedans):

(a) March 1, 1989, Receipt No. 18062, covering sugar deposited by Rosa
Sy;
(b) March 7, 1989, Receipt No. 18080,Covering sugar deposited by RNS
Merchandising (Rosa Ng Sy);
(c) March 21, 1989, Receipt No.18081, covering sugar deposited by St.
Therese Merchandising;
(d) March 31, 1989, Receipt No.18086, covering sugar deposited by St.
Therese Merchandising; and
(e) April 1, 1989, Receipt No. 18087, covering sugar deposited by RNS
Merchandising.

Warehouse receipts were negotiated and endorsed to Luis T. Ramos and

cresencia Zoleta. Then used the quedans as security for two load
agreement for 15.6M and 23.5 M from PNB.

Petitioner PNB wrote to respondents noah’s ark demanding the delivery of

sugar stocks covered by quedans when mortgagor MR. Ramos and Ms
Zoleta failed to pay their obligations. But respondent noah’s ark refused to
comply to the demand in which case the petitioner PNB filed with the RTC
verified complaint for specific performance and application for writ of
attachment against respondent Noah’s ark.

Judge benito sa jr. denied the application for Preliminary attachment.

The respondent file a counterclaim and third party complaint and avers
that they were the owners of the quedans because they sell to Rosa NG
SY of RNS merchandising and teresita NG of St. Therese Merchandising
the total volume of sugar indicated in the quedans for total of
63,000,000,00. However the check paid by Rosa NG sy and Teresita NG
was dishonored b drawee banks. Respondent also prayed that rosa ng
and teresita ng return the quedans to them.
PNB filed a "Motion for Summary Judgment and prayed for the delivery of
the sugar stocks covered by the Warehouse Receipts/Quedans which are
now in the PNB’s possession as holder for value and in due course;
 RTC denied the motion for summary judgment on the ground:
— that there exists conflicting claims among the parties relative to
the ownership of the sugar quedans as to whether or not the
quedans falls within the coverage of the Warehouse Receipt
Law and whether or not the transaction between PNB and third
party defendants (Sy ans Ng) is governed by contract of pledge
that would require PNB’s compliance with Art. 2112, Civil Code
as regards the disposition of the quedans
Petitioner filed petition for certiorari with the CA. the CA nullify the order
of the RTC, the summary judgment be rendered in favour of the
Petitioner PNB.
 Grounds- questions of law should be resolved after and not before, the
questions of fact.
— What is determinative of the propriety of summary judgment is
not the existence fo the pleading, deposition, admission and
documents on file, the defences as to the main issue do not
tender material question of fact. Or the issue thus tendered are
in fact ham, fictitious, contrived set up in bad faith.
—

1. ISSUE: Whether or not PNB as indorsee/ pledgee of quedans was

entitled to delivery of sugar stocks from the warehouseman, Noah's
Ark."

HELD: yes. Art 1520 new civil code which provides that the creditor whose
debtor is the owner of a negotiable document of title shall be entitled to
such aid from courts of appropriated jurisdiction by injunction and otherwise
in attaching such document or in satisfying the claim by means thereof as
is allowed at law of in equity in regard to property which cannot readily
attached upon by ordinary legal process.
In this case Luis t Ramos and Crezencia zoleta obtain loan to the
petitioner secured by quedans. Both of the debtor failed to pay their
obligation to the petitioner hence the petitioner has the right to forfeit the
the mortgage in their favor the satify their claims.

2. Whether the non-payment of the purchase price for the quedans by the
original vendees rendered invalid the negotiation by vendees/first
indorsers to indorsers and the subsequent negotiation of Ramos and
Zoleta to PNB.
1. HELD: The non-payment of the purchase price does not render the
subsequent negotiation invalid. The validity of the negotiation in favour
of PNB cannot be impaired even if the negotiation between Noah and its
first vendees was in breach of faith on the part of the vendees or by the
fact that Noah was deprived of the possession of the same by fraud,
mistake or conversion if PNB paid value in good faith without notice of
such breach of duty, fraud, mistake or conversion. (Article 1518, New
Civil Code).

PHILIPPINE NATIONAL BANK v. PRES. JUDGE BENITO C. SE, GR No.

119231, 1996-04-18
Facts:
In accordance with Act No. 2137, the Warehouse Receipts Law, Noah's
Ark Sugar Refinery issued on several dates, the following Warehouse
Receipts (Quedans): (a) March 1, 1989, Receipt No. 18062, covering sugar
deposited by Rosa Sy; (b) March 7, 1989, Receipt No. 18080, covering...
sugar deposited by RNS Merchandising (Rosa Ng Sy); (c) March 21, 1989,
Receipt No. 18081, covering sugar deposited by St. Therese
Merchandising; (d)March 31, 1989, Receipt No. 18086, covering sugar
deposited by St. Therese Merchandising; and (e) April 1, 1989, Receipt No.
18087,... covering sugar deposited by RNS Merchandising.
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 Noah's Ark Sugar Refinery demanding
delivery of the sugar stocks covered by the quedans endorsed to it by
Zoleta and Ramos. Noah's Ark Sugar Refinery refused to comply with the
demand alleging ownership thereof... the Philippine National Bank filed with
the Regional Trial Court of Manila a verified complaint for "Specific
Performance with Damages and Application for
Writ of Attachment
On January 31, 1991, the Philippine National Bank filed a Motion for
Summary Judgment
On May 2, 1991, the Regional Trial Court issued an order denying the
Motion for Summary Judgment.
the Philippine National Bank filed a Petition for Certiorari with the Court of
Appeals
On December 13, 1991, the Court of Appeals nullified and set aside the
orders of May 2 and July 4, 1990 of the Regional Trial Court and ordered
the trial court to render summary judgment in favor of the PNB. On June
18, 1992, the trial court rendered judgment dismissing... plaintiffs complaint
against private respondents for lack of cause of action and likewise
dismissed private respondents' counterclaim against PNB and of the Third-
Party Complaint and the Third-Party Defendant's Counterclaim. On
September 4, 1992, the trial court denied PNB' Motion for Reconsideration.
Private respondents thereupon filed before the trial court an Omnibus
Motion seeking among others the deferment of the proceedings until
private respondents are heard on their claim for warehouseman's lien.
ISSUE: WON the Petitioner PNB is liable for warehouseman lien payment?

HELD: YES. In accordance to the warehouse receipts law ra2137 sec.31

Provides warehouseman need not deliver until lien is satisfied. In rel. to
sec27 claims that included in warehouseman liens are lawful charges for
storage and preservation of the good; also lawful claims for money
advanced, interest, insurance , transportation, labor, and other charges.

In this case the petitioner PNB where entitled to delivery of the deliver
of sugar covered by the quedans due to the failure of their debtor to fulfill
their obligations. However they have to pay warehouseman’s lien and other
lawful charges as petitioner is bound to stand by the express terms and
condition of the face of warehouse receipts as to the payments of lawful
charges and warehousemen’s lien.

PHILIPPINE NATIONAL BANK, petitioner, vs. HON. MARCELINO L.

SAYO, JR
Facts: In accordance with the Warehouse Receipts Law, Noah's Ark Sugar
Refinery issued on several dates Warehouse Receipts (Quedans) covering
sugar deposited by Rosa Sy, RNS Merchandising, and St. Therese
Merchandising. The receipts are substantially in the form, and contains the
terms, prescribed for negotiable warehouse receipts by Section 2 of the
law.
Subsequently, Warehouse Receipts were negotiated and endorsed to Luis
T. Ramos and to Cresencia K. Zoleta. Ramos and Zoleta then used the
quedans as security for two loan agreements — one for P15.6 million and
the other for P23.5 million — obtained by them from the PNB. The
aforementioned quedans were endorsed by them to PNB.

Ramos and Zoleta failed to pay their loans upon maturity. Hence, PNB
wrote to Noah's Ark Sugar Refinery demanding delivery of the sugar stocks
covered by the quedans endorsed to it by Zoleta and Ramos. Noah's Ark
Sugar Refinery refused to comply with the demand alleging ownership
thereof.
It alleged that the owner of Noah’s Ark, Looyuko, entered into an
agreement with RNS and St. Therese Merchandising to sell the sugar
indicated in the warehouse receipts stored in Noah for an amount of
P63,000,000. Checks were issued but they were dishonored for being
drawn against insufficient funds.
PNB filed with the RTC of Manila a verified complaint for "Specific
Performance with Damages and Application for Writ of Attachment" against
Noah's Ark Sugar Refinery, Alberto T. Looyuko, Jimmy T. Go and Wilson T.
Go, the last three being identified as the sole proprietor, managing partner,
and Executive Vice President of Noah's Ark, respectively.

RTC dismissed said complaint. MR denied.

On appeal to the SC via petition for review on certiorari, the Supreme Court
ordered Noah’s Ark and its owner, Looyuko, to deliver to PNB the sugar
stocks covered by the warehouse receipts in controversy
However, Noah’s Ark filed an Omnibus Motion seeking deferment of the
judgment until it was heard on its warehouseman’s lien. . RTC granted the
order and evidence was received in support thereof.
. RTC adjudged that there existed a valid lien in favor of Noah’s Ark, and
accordingly, execution of the judgment against Noah’s Ark should be
stayed until the full amount of Noah’s lien shall have been satisfied
PNB then filed certiorari proceedings before the Supreme Court. The SC
held that while PNB was entitled to the sugar stocks as endorsee of the
receipts, delivery to it shall only be affected upon payment of the storage
fees. The Supreme Court further ruled that imperative is the right of the
warehouseman to demand payment of his lien because he loses his lien
upon goods by surrendering possession thereof.RTC Judge Sayo, Jr.
allowed a writ of execution in favor of Noah to collect on its
warehouseman’s lien against PNB. Hence, this certiorari proceeding before
the Supreme Court.

ISSUE: won the warehousemen’s lien is lost due to the respondent’s

refusal to deliver the goods?

HELD: NO sec 29 or warehouse receipts law sub sec (b) how to the lien
may be lost (b) by refusiong to deliver the good when a demand is made
with which is bound to comply under the provisions of this act. In rel to
sec31 WRL warehouseman need not to deliver until lien is satisfied.

In this case respondent noah’s ark refused to deliver the sugar

covered by quedans in favor of PNB it was justified because the PNB did
not pay warehouseman lien and other lawful charge for storage and
preservation of sugar and it was provided in the quedans and
corresponding refining contracts. Such lien should be confine to the fees
and charges as of the date in March 1990 when noah’s ark refused to
heed PNB demands for delivery of sugar stocks. However the sc found
that the PNB was denied of due process to present their evidence contrary
to excessive amount of warehouseman;s liens amouting t o P
734,341,595.06 .The petitioner further stated that noarh’s ark had only
1,490. Each 50 kg bags of sugar and not 86,356.41. in which case the
petitioner should not be mad to pay for storage and preservation for non-
existent of goods.