Warehouse Receipt Law
Warehouse Receipt Law
Warehouse Receipt Law
Warehouse: a building or place where goods are deposited and stored for profit.
Warehouse Receipt: is a written acknowledgment by a warehouseman that:
a. He has received
b. Holds certain goods therein described
c. In storage
d. For the person to whom it is issued.
NATURE OF A WAREHOUSE RECEIPT
1. Bilateral Contract
a. Imports that goods are in the hands of a warehouseman
b. It is a symbolical representation of the property itself.
1. Warehouse man
- Is a person lawfully engaged in the business of storing goods
- He stores good for PROFIT
- He is the only person who can issue warehouse receipts.
B. Essential terms:
4. Person to whom goods are deliverable
- Persons who shall prima facie be entitled lawfully to the possession of the goods deposited.
- If for example, the terms of receipt provide that it is to be delivered to order or to bearer, then it is a
negotiable warehouse receipt.
- Note: notwithstanding the failure to use words of negotiability, the receipt may still be considered negotiable.
(we will explain later)
5. Rate of Storage Charges
- States the consideration
- If consideration is not placed it is the customary or reasonable compensation for the services of the
warehouseman
6. Description of goods or packages
- Purpose is for the identification of property which should be delivered to the rightful owner
- Note: notwithstanding the fact that the goods deposited are incorrectly described does not make ineffective
the receipt when the identity of the goods is fully established by the evidence.
FORM AND CONTENT OF WAREHOUSE RECEIPTS
B. Essential terms:
7. Signature of Warehouseman
- Furnishes the best evidence of the fact that the warehouseman received the goods and has bound himself to
assume all obligations in connection with such.
8. Warehouseman’s ownership of or interest in goods
- Purpose is to prevent abuses which in the past had arisen from warehousemen issuing receipts on their
goods.
Section 53 provides that the omission to state his ownership of the goods in the receipt issued by him, may
render the warehouseman criminally liable.
9. Statement of Advances made and liabilities incurred
- Purpose of this requirement is to preserve the lien of the warehouseman over the goods stored or the
proceeds thereof in his hands.
- This does not need to be placed if such liabilities were never incurred to begin with.
EFFECT OF THE OMISSION OF ANY OF THE ESSENTIAL TERMS
General Rule:
A warehouseman is required to exercise such degree of care which a reasonable careful
owner would exercise over similar goods of his own. He shall be liable for any loss or injury
to the goods caused by his failure to exercise such care.
Exception: He shall not be liable for any loss or injury which could not have been
avoided by the exercise of such care.
4. Not to co-mingle the goods deposited unless goods deposited are fungible and of the same kind and grade giving
rise to ownership over co-mingled mass
General Rule:
A warehouseman may not co-mingle goods belonging to different depositors or belonging to the same
depositor for which separate receipts had been issued. E
Exceptions:
A warehouseman may co-mingle fungible goods of the same kind and grade provided he is authorized by
agreement or by custom. Effect of Co-mingling of Goods:
1. The holder of the receipt does NOT satisfy the CONDITIONS prescribed in Sec. 8
2. When the warehouseman has LEGAL title in himself on the goods, such title or right
being derived directly or indirectly from the transfer made by the depositor at the
time or subsequent to the deposit for storage or from the warehouseman’s lien (Sec
16.)
3. If the warehouseman had been REQUESTED by a person lawfully entitled to a right of
property or possession in the goods no to make delivery to any person (Sec 10.)
4. If he had INFORMATION that the delivery to be made was to one not lawfully
entitled to the possession of the goods (Sec 10.)
5. Where the goods have already been lawfully SOLD to 3rd persons to satisfy the
warehouseman’s lien or disposed of because of their perishable or hazardous nature
(Sec 36.)
LAWFUL EXCUSES TO DELIVER THE GOODS
ALTERATION EFFECT
IMMATERIAL – Fraudulent or not (the tenor of the receipt Warehouseman is liable according to the ORIGINAL tenor
is not changed)
MATERIAL, and FRAUDULENTLY MADE Warehouseman is liable on the altered receipt according to
its original tenor
Warehouseman is liable:
Conversion
An unauthorized assumption and exercise of the right of
ownership over goods belonging to another through the
alteration of their condition or the exclusion of the owner’s
right.
INSTANCES WHERE A WAREHOUSEMAN IS
LIABLE FOR CONVERSION
1. Where the delivery is otherwise than as authorized by subsections (b**) and (c**) of
Sec. 9 (Sec. 10)
**(b) A person who is either himself entitled to delivery by the terms of a non- negotiable receipt
issued for the goods, or who has written authority from the person so entitled either indorsed
upon the receipt or written upon another paper; or
**(c) A person in possession of a negotiable receipt by the terms of which the goods are deliverable to
him or order, or to bearer, or which has been indorsed to him or in blank by the person to whom
delivery was promised by the terms of the receipt or by his mediate or immediate indorser
INSTANCES WHERE A WAREHOUSEMAN IS
LIABLE FOR CONVERSION
2. Even if delivered to persons entitled under Sec 9, he may still be liable for conversion if prior to
delivery:
a. He had been requested not to make such delivery
b. He had received notice of the adverse claim or title of a third person (Sec. 10)