Warehouse Receipt,

Quedans and other

Documents of Title
GROUP 8
 COMMON TYPES OF DOCUMENT OF
TITLE
1. Bill of Landing- written acknowledgement of the receipt of
goods and an agreement to transport and to deliver them at a
specified place to a person named therein or on his order.
 On Board Bill of Lading – issued when the goods have been
actually placed aboard the ship with very reasonable
expectation that the shipment is as good as on its way.
 Port Bill of Lading – issued by the carrier to whom the goods
have been delivered and the vessel indicated in the bill of lading
by which the goods are to be shipped is already in the port
where the goods are held for shipment.
2. Dock Warrant – warrant given by dock owners to the owner of
merchandise imported and warehoused on the dock, upon the
faith of the bills of lading, as a recognition of his title to the goods.
QUEDAN

 A warehouse receipt
that covers sugar.
 Warehouse Receipt
 It is a written acknowledgement by a warehouseman
that he has received and holds certain goods therein
described in store for the person to whom it is issued.
 It is a simple written contract between the owner of
the goods and the warehouseman to pay the
compensation for that service.
 It is a bilateral contract. It imports that goods are in
the hands of a warehouseman and is a symbolical
representation of the property itself.
 Governing Law
 Warehouse Receipts are governed by the
Warehouse Receipts Law (WRL).
 Documents of Title issued by a
warehouseman are governed by the
Warehouse Receipt Law while documents
of title for the storage of goods that are
not issued by a warehouseman are
governed by the New Civil Code.
 PURPOSE OF THE WAREHOUSE RECEIPT LAW

 To prescribe the rights and duties of a warehouseman;

 To regulate the relationship between a warehouseman
and the depositor of goods, or the holder of a warehouse
receipts for the goods, or other persons;
 To render title to, and right of possession of, property
stored in warehouse more easily convertible;
 To protect those who, in good faith and for value, acquire
negotiable warehouse receipts by negotiation
 Who may issue warehouse receipts

 Only a warehouseman may issue

warehouse receipts to put said warehouse
receipts within the purview of the WRL.

*Warehouseman/Bailee- A person
lawfully engaged in the business of
storing goods for profit.
Other Formalities: Form and Content
 Warehouse receipts need not be in particular form, but
certain essential terms must present as provided in Sec
2.
1. Location of warehouse
2. Date of issue and receipt
3. Consecutive number of receipt
4. Person to whom goods are deliverable
5. Rate of storage charges
6. Description of goods or packages
7. Signature of the warehouseman
8. Warehouseman’s ownership of or interest in the goods.
9. Statement of advances made and liabilities
Effect of omission of any essential
terms:

 Validity and Negotiability of

receipt is NOT affected
 Warehouseman will be liable
for damages
 The contract will be converted
to ordinary receipt
What terms may be inserted in a
warehouse receipt?
 ANY other terms and conditions.
 EXCEPT:
a.Those contrary to the provision of
WRL
b.An exemption from liability and
negligence
c.Those contrary to law, morals, good
customs, public order or public policy.
 DUPLICATE RECEIPTS MUST BE MARKED

 When  more  than  one  is  issued  for  the  same 

goods, the word “duplicate” shall be plainly placed
upon the face of every receipt, except the first one
issued.
 A warehouseman shall be liable for damages for
failure to do so to anyone who purchased the
subsequent receipt for value supposing it to be
original, even though the purchaser be after the
delivery of the goods by the warehouseman to the
holder of the original receipt.
 Classes of Warehouse Receipts

NEGOTIABLE NON-
NEGOTIABLE
Is one in which it is is one in which it is
stated that the goods stated that the goods
received will be received will be
delivered either: delivered to the
1. To the bearer; or depositor or to any
2. To the order of any specified person.
person named in such
receipt. (Sec. 5, WRL)
 NEGOTIATION OF WAREHOUSE RECEIPTS
BY DELIVERY
1. Where by the terms of the
receipt, the warehouseman
undertakes to deliver the goods
to the bearer; or
2. Where by the terms of the
receipt, the warehouseman
undertakes to deliver the goods
to the order of a specified
person, and such person or a
subsequent indorsee of the
receipt has indorsed it in blank
or bearer.
The bearer document is not always
a bearer document. A special
indorsement has the effect of
By Indorsement Coupled with
Delivery
1. If the receipt states that the
goods are to be delivered to the
order of a person named therein;
2. Effects when indorsement is
necessary but the negotiable receipt
was only delivered:
a.The transferee acquires title
against the transferor;
b.There is no direct obligation of
the warehouseman to deliver the
goods to such holder of the
receipt;
c.The transferee can compel the
transferor to complete the
negotiation by indorsing the
instrument (Sec.43, WRL).The
negotiation takes effect on the
date of the indorsement only.
 EFFECT OF NEGOTIATION OF WAREHOUSE RECEIPT

 Negotiation of the document has

the effect of manual delivery so as
to constitute the transferee the
owner of the goods.
 RIGHTS OF A PERSON TO WHOM A RECEIPT HAS
BEEN NEGOTIATED:

 In case of receipt negotiable by delivery, 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;
 In case of receipt negotiable by indorsement coupled by
delivery, 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 has or had ability to convey to a purchaser in
good faith for value;
 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. (Sec.41, WRL)
 RIGHTS OF A PERSON TO WHOM  A RECEIPT HAS
BEEN TRANSFERRED:

 The title to the goods as against the transferor with

respect to a negotiable warehouse receipt not duly
negotiated (merely steps into the shoes);
 The right, thereafter, to acquire the obligation of
the warehouseman to hold the goods for him; and
 If the receipt is non-negotiable, such person
acquires the right to notify the warehouseman of
the transfer thereof. (Sec. 42, WRL)
 WAREHOUSEMAN’S DEFENSES FOR NON-DELIVERY
OR MISDELIVERY
 Loss or Destruction of the Goods without the fault of the bailee;
 Failure to satisfy the Bailee’s Lien
 Failure to surrender the negotiable document of title
 Lack of willingness to sign acknowledgement
 Receipt by the Bailee of a request by or on behalf of the person
lawfully entitled to a right of property or possession in the
goods, not to make such delivery
 The Bailee has information that the delivery about to be made
was to one not lawfully entitled to the possession of the goods
 Delivery to a claimant with better right
 Attachment or levy of the goods by a creditor where the
document is surrendered or its negotiation is enjoined or the
document is impounded
 Where the document of title is attached by a creditor.
IN CASE OF ADVERSE CLAIM, THE BAILEE MAY:

 Refuse to deliver the goods to anyone of

them until he has had reasonable time to
check the validity of the claims.
 File as action for interpleader and allow
the claimants to prove their claims or in
case an action is filed against the bailee,
he can set up the defense of adverse
claims.
 Duties of a Warehouseman
 Deliver the goods upon a demand made either by the
holder of a receipt for the goods or depositor.
 Obligation to deliver arises only if the demand is
accompanied by:
 An offer to satisfy the warehouseman’s lien;
 An offer to surrender the receipt, if negotiable, with such
indorsement as may be necessary for the negotiation of
the receipt; and
 A readiness and willingness to sign, when the goods are
delivered, an acknowledgement that they have been
delivered, if such signature is requested by the
warehouseman.
 LIABILITY OF WAREHOUSEMAN FOR
STOLEN AND DEPOSITED GOODS
 If stolen goods are deposited by the
thief with a warehouseman, the latter
shall not be liable to the holder of the
receipt even if he delivers the goods
to the real owners without the receipt
being surrendered to him. (Sec.11
and 141, WRL)
 WAREHOUSEMAN’S LIEN
A warehouseman shall have a lien on the goods deposited
or on the proceeds thereof in his hands for:
 All lawful charges for storage and preservation of the
goods;
 All lawful claims for money advanced, interest, insurance,
transportation, labor, weighing, coopering, and other
charges and expenses in relation to such goods; and
 All reasonable charges and expenses for notice and
advertisements of sale, and for the sale of the goods
where default had been made in satisfying the
warehouseman’s lien.
 REMEDIES OF A WAREHOUSEMAN TO ENFORCE
HIS LIEN

 Refuse to deliver the goods until his lien is satisfied

(Sec. 31, WRL);
 Sell the goods and apply the proceeds thereof to
the value of the lien (Sections 33 & 34, WRL);
 By other means allowed by law to a creditor against
his debtor (Sec. 32, WRL);
 Such other remedies allowed by law for the
enforcement of a lien against personal property
(Sec. 35, WRL).
 LOSS OF LIEN
 Warehouseman’s lien is lost either by:
 Surrendering possession thereof; or
 Refusing to deliver the goods when a demand
is made with which he is bound to comply (Sec.
29, WRL).
*Note: When warehouseman withholds the delivery of
the goods without any valid reason, he is liable for the
loss of the goods and the liability cannot be eliminated
by proof of exercise of due diligence.
 ATTACHMENT OR LEVY
NEGOTIABLE RECEIPT NON-NEGOTIABLE RECEIPT
- the goods cannot be – the goods can be
attached/levied in attached, provided it is
execution unless: done prior to the
The receipt is first notification of the bailee
surrendered of the transfer. (Sec. 42,
Its negotiation is WRL)
enjoined
The receipt is
impounded by the court
(Sec. 25, WRL)
 WARRANTIES OF TRANSFEROR
 A person who, for value, negotiates or transfers a receipt by
indorsement or delivery, including one who assigns for value a claim
secured by a receipt, unless a contrary intention appears, warrants
that:
 The receipt is genuine;
 He has a legal right to negotiate or transfer it;
 He has knowledge of no fact which would impair the validity or worth
of that receipt;
 He has a right to transfer the title to the goods; and
 The goods are merchantable or fit for a particular purpose whenever
such warranties would have been implied, if the contract of the
parties  had been to transfer without a receipt of the goods
represented thereby. (Sec. 44, WRL)
 CASE: G.R. No. L-6342 January 26, 1954
PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs.
LAUREANO ATENDIDO, defendants-appellant.
 FACTS: On June 26, 1940, Laureano Atendido obtained from
the 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
 Defendant set up a special defense and a
counterclaim. As regards the former,
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. And, by way of counterclaim,
defendant claimed that, as a corollary to his
theory, he is entitled to an indemnity which
represents the difference between the value of
the palay lost and the amount of his obligation.
ISSUE: Whether or not 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: "The surrendering of warehouse receipt
No. S-1719 covering the 2,000 cavanes of palay
by the defendant in favor of the plaintiff was not
that of a final transfer of that warehouse receipt
but merely as a guarantee to the fulfillment of
the original obligation of P3,000.00. In other
word, plaintiff corporation had no right to
dispose (of) the warehouse receipt until after the
maturity of the promissory note Exhibit A.
Moreover, the 2,000 cavanes of palay were not
in the first place in the actual possession of
plaintiff corporation, although symbolically
speaking the delivery of the warehouse receipt
 WAREHOUSE RECEIPTS; QUEDANS; INDORSEMENT
THEREON; MORTGAGE OR PLEDGE OF WAREHOUSE
RECEIPT. — 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 if the
property covered by the quedans or warehouse receipts is
lost later 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.
 PNB vs. Hon. Marcelino L. Sayo, Jr, Noah’s
Ark Sugar Refinery, Alberto T. Looyuko,
Jimmy T. Go and Wilson T. Go.
FACTS: Noah's Ark Sugar Refinery issued Warehouse Receipts
(Quedans) covering sugar deposited by Sy, RNS Merchandising,
and St. Therese Merchandising. These Warehouse Receipts
were negotiated and endorsed to Ramos and to Zoleta. Ramos
and Zoleta then used the quedans as security for loan from the
PNB. The quedans were endorsed by them to PNB. Ramos and
Zoleta failed to pay their loans upon maturity. Hence, PNB
wrote to Noah's Ark 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.
ISSUE: Whether or not the
private respondents may
enforce their warehouseman’s
lien.
Ruling:
1. Yes, Private Respondents May Enforce Their
Warehouseman's Lien.
The remedies available to a warehouseman, such as private
respondents, to enforce his warehouseman's lien are:
 (1) To refuse to deliver the goods until his lien is satisfied,
pursuant to Section 31 of the Warehouse Receipt Law;
 (2) To sell the goods and apply the proceeds thereof to the value
of the lien pursuant to Sections 33 and 34 of the Warehouse
Receipts Law; 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 to pay under Section 32 of the
Warehouse Receipt Law; or such other remedies allowed by law
for the enforcement of a lien against personal property under
Section 35 of said law. The third remedy is sought judicially by