WAREHOUSE RECEIPTS LAW

(ACT NO. 2137)

ATTY. BARBETTE JOANNE BADOCDOC-REPOSAR

 SCOPE OF THE LAW

All warehouses, whether public or private,

bonded or not.
 WHEN THE CIVIL CODE APPLY

The act applies to warehouse receipts issued by

a warehouseman as defined in Section 58(a) of
the Act, while the Civil Code applies to other
cases where the receipts are not issued by a
warehouseman as defined in said section.
 PURPOSE OF THE LAW:

1. To regulate the status, rights and liabilities of the parties in warehousing

contract.
2. To protect those who, in good faith and for value, acquire negotiable
warehouse receipts by negotiation;
3. To render title to, and right of possession of, property stored in warehouses
more easily convertible;
4. To facilitate the use of warehouse receipts as documents of title; and
5. To accomplish these, to place a much greater responsibility on the
warehouseman.
 WHAT IS A WAREHOUSE?

Warehouse means the building or place

where goods are deposited and stored
profit.
 WHO IS A WAREHOUSEMAN?

A person (natural or juridical) lawfully

engaged in the business of storing goods for
profit.
 WHAT IS A WAREHOUSE RECEIPT?

• A written acknowledgment by a warehouseman that he received

and holds certain goods therein described in store for the
person to whom it is issued.
• Simple written contract between the owner of the goods and
the warehouseman to pay the compensation for that service.
• Symbolic representation of the property itself
• Not a negotiable instrument within the meaning of the NIL even
though the Warehouse Receipt Act declares it negotiable.
• Although a WR can be negotiable or at least negotiable, it is
NOT a security in the usually accepted meaning of the terms.
 WHO MAY ISSUE A WAREHOUSE
RECEIPT?

Only a warehouseman may issue a warehouse receipt. Hence,

receipts not issued by a warehouseman are not warehouse
receipts although in the form of warehouse receipt.
Moreover, a duly authorized officer or agent of a warehouseman
may validly issue a warehouse receipt. (National Bank vs.
Producer’s Warehouse Association.)

On the other hand, as a rule, a person who deposit goods with a

warehouseman for storage is ENTITLED TO RECEIPT.
FUNCTIONS:

1. It is a contract – simple contract evidencing the

underlying contract of deposit or of carriage;
2. Evidence of receipt of goods; and
3. Represents the goods and therefore operated as
transferrable Document of title that carries with it
control over the goods.
Note: However, the SC in a number of cases limited the
function to the two-fold function- contract and a receipt.
 WHAT IS A DOCUMENT OF TITLE ?

It is a document issued by a carrier or a warehouseman

reciting the receipt of goods for carriage or keeping and the
terms and conditions thereof. It sets forth the contract
between the bailor and the bailee. It is also the symbol of the
goods themselves whereby they may be transferred.
In commercial life, they are bill of lading and warehouse
receipts.
IS A WAREHOUSE RECEIPT A
NEGOTIABLE INSTRUMENT?
No, WR is not a negotiable instrument under
the NIL because it does not comply with
section 1 (b) of NIL (Act 2031) which
requires an unconditional promise or order
to pay a sum certain in money.
 “NEGOTIABLE” UNDER THE ACT

It is not used in the sense in which it is applied to bills of

exchange or promissory notes but only as indicating that in
the passage of warehouse receipts through the channels of
commerce, the law regards the property which they describe
as following them and gives to their regular transfer by
indorsement the effect of manual delivery of the things
specified in them.
 NEGOTIABLE INSTRUMENT VS.
NEGOTIABLE WAREHOUSE RECEIPT

Negotiable Instrument Negotiable WR

As to subject
Money Merchandise
Object of Value
Instrument itself Goods deposited
Liability of Intermediate Parties
Secondary (NIL) None (for failure to deliver the goods)
Effects of Deliberate Alteration
Null and Void Valid, but enforceable only in
accordance with the original tenor.
 NEGOTIABLE INSTRUMENT VS.
NEGOTIABLE WAREHOUSE RECEIPT

Negotiable Instrument Negotiable WR

Conversion from Bearer to Order
Originally Bearer instrument will be Converted to an order Warehouse
such Receipt if specially endorsed.
Significance of Holder in Due Course
May obtain a better title Obtains only the title which the party
negotiating had over the goods.
 FORMS AND CONTENT OF THE RECEIPT

1. Location of warehouse – to enable them to determine where the

goods are deposited especially when the warehouseman has more
than one warehouse in different places.
2. Date of issue of receipt – the date indicates prima facie the date
when the contract of deposit is perfected.
3. Consecutive number of receipt – to identify each receipt with
the goods for which it was issued.
4. Person to whom goods are deliverable – determines the person
or person who shall prima facie be entitled lawfully to the possession
of the goods deposited.
 FORMS AND CONTENT OF THE RECEIPT

5. Rate of storage charges – consideration for the contract. Absent any

stipulation, the law presumes that the depositor shall pay the customary or
reasonable compensation for the services of the warehouseman.
6. Description of goods or package – It is essential to the validity of a
warehouse receipt that the property for which the receipt is given be
sufficiently described therein to make its identification possible.
7. Signature of the warehouseman – furnishes the best evidence that
the warehouseman has received the goods described in the receipt.
8. Warehouseman’s Ownership of or interest in goods – to prevent
abuses which in the past had arisen from warehouseman issuing receipts on
their goods. Under Section 53, omission to state his ownership of the goods
in the receipt issued by him may render the warehouseman criminally liable.
 FORMS AND CONTENT OF THE RECEIPT

9. Statement of advances made and liabilities incurred –

preserves the lien of the warehouseman over the goods stored or the
proceeds thereof in his hands. If there are no advances or incurs no
liability, there would be nothing to state in the receipt concerning
advances or liabilities.
 EFFECTS OF OMISSION OF ANY
ESSENTIAL TERMS:

1. Validity of the receipt is not affected;

2. It will only render the warehouseman liable for
damages caused by the omission from a negotiable
receipt of any of the terms herein required;
3. The negotiability of the receipt is not affected.
4. The contract converted to that of ordinary deposit.
 MAY A WAREHOUSEMAN
INSERT STIPULATIONS or
TERMS/CONDITION IN THE
WAREHOUSE RECEIPT?
GENERAL RULE : A warehouseman may insert in a receipt, issued by him
any other terms and conditions.

Exception:
1. Those that are contrary to the provision of the WRL;
2. Those which may impair the obligation of the warehouseman to exercise
that degree of care in the safekeeping of the goods entrusted to him which
a reasonable careful man would exercise in regard to similar goods on his
own;
3. Those contrary to law, morals, good customs, public order or public policy;
4. Those exempting the warehouseman from liability for misdelivery or for
not giving statutory notice in case of sales of goods;
5. Those exempting the warehouseman from liability of negligence.
Note: however, a warehouseman may limit his liability for loss to an agreed
valuation, as where the rate charged is based on the value of the article.
 KINDS OF WAREHOUSE RECEIPT

1. Negotiable – where the goods are deliverable to bearer or to the

order of the person specified.
Note:
• A provision in a negotiable WR that the instrument is non-negotiable is
VOID;
• When more than one negotiable receipt is issued for the same goods ,
the word “DUPLICATE” shall be plainly placed upon the face of every
such receipt , except the first one issued. The WHM shall be liable for
damages caused by his failure to do so to anyone who purchased the
subsequent receipt for value supposing it to be the original.
 KINDS OF WAREHOUSE RECEIPT

2. Non-negotiable – the goods received will be delivered

to the depositor or to any specified person.

Note: the receipt must be stamped ”non-negotiable”,

otherwise the holder believing it to be negotiable may treat
the receipt as negotiable.
 NEGOTIABLE WR VS. NON-NEGOTIABLE
WR

Negotiable WR Non-Negotiable WR
How acquired
May be acquired through negotiation May be acquired through transfer or
assignment.
Rights
Rights of the person to whom it is Rights of the Transferee:
negotiated:
1. Title to the goods of the person 1. Title of the goods as against the
negotiation the receipt and title of transferor;
the person to whose order the 2. Right to notify the WHM of the
goods where to be delivered; transfer and acquire the direct
2. Direct obligation of the WHM to obligation of the WHM to hold the
hold possession of the goods for goods for him.
him, as if the WHM directly
contracted with him.
 NEGOTIABLE WR VS. NON-NEGOTIABLE
WR

Negotiable WR Non-Negotiable WR
Effects of Negotiation
Negotiation defeats the lien of the None
seller of the goods
Effects of Attachment/Levy
Goods represented cannot be subject Goods can be subject to attachment or
to attach or levy by execution, unless in levy by execution.
proper circumstances.
 MARKING NEGOTIABLE AND NON-
NEGOTIABLE

GENERAL RULE : It is among the obligation

of the warehouseman to to place “non-
negotiable” or “not negotiable” on non-
negotiable receipts and to stamp “duplicate”
on copies of negotiable receipt.
 EFFECTS OF FAILURE TO MARK
NEGOTIABLE AND NON-NEGOTIABLE

1. Failure to mark “negotiable” does not render

it non-negotiable if it contains words of
negotiability;
2. Failure to mark “non-negotiable” shall make
it negotiable ( if the holder purchased it for
value supposing it to be negotiable.)
 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 such
receipt, except the first one issued.
• A warehouseman shall be held 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.
 NEGOTIATION OF WAREHOUSE RECEIPTS

A.) 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 converting the bearer instrument into an order instrument.
 NEGOTIATION OF WAREHOUSE RECEIPTS

B.) 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.
 E F F E C T O F N E G OT I AT I O N O F WA R E H O U S E R E C E I P T

• Negotiation of the document has the effect of manual

delivery so as to constitute the transferee the owner of
the goods. Negotiation carries with it both the title to and
possession of the property.
• Transfer of title and possession is accomplished because
the person to whom the instrument is negotiated acquired
rights under Sec. 41,WRL.
 R I G H T S O F A P E R S O N TO W H O M A R E C E I P T H A S
B E E N N E G OT I AT E D :

1. 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;
2. 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;
3. 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)
 R I G H T S O F A P E R S O N TO W H O M A R E C E I P T H A S
BEEN TRANSFERRED:

1. The title to the goods as against the transferor with respect to a

negotiable warehouse receipt not duly negotiated (merely steps
into the shoes);
2. The right, thereafter, to acquire the obligation of the
warehouseman to hold the goods for him; and
3. If the receipt is non-negotiable, such person acquires the right to
notify the warehouseman of the transfer thereof. (Sec. 42,WRL)
 R I G H T S O F A P E R S O N TO W H O M A R E C E I P T H A S
BEEN TRANSFERRED:

• Prior to the notification of the warehouseman by the transferor or transferee of a non-

negotiable receipt, the title of the transferee to the goods and the right to acquire the
obligation of the warehouseman may be defeated by:

1. The levy of an attachment or execution upon the goods by a creditor of the transferor; or
2. A notification to the warehouseman by the transferor or a subsequent purchaser from the
transferor of the subsequent sale of the goods by the transferor.
But: 1.)unpaid seller’s lien or right of stoppage in transitu cannot defeat the right of the holder
in good faith of NWR;
2.) Goods covered by NWR cannot be attached or levied upon unless receipt is
surrendered.
 PROBLEM

FACTS:
Maingat deposited her personal computer (PC) machine in
the warehouse of Bodeguero who issued a negotiable
receipt undertaking the delivery of the PC to Mayaman or
bearer. Mayaman entrusted the receipt to Secretario, his
secretary who, in turn, delivered the receipt to Bumibili, a
purchaser for value and in good faith. Secretario needed the
money to pay his gambling debts.
 PROBLEM

ISSUE:
a.) Who has better title to the computer, Mayaman o
Bumibili?
b.) Would the answer be the same if, by the terms of
Bodeguero’s receipt, the computer is delivered to the order
of Mayaman?
 PROBLEM

ANSWER:
a.) Bumibili has a better title. The negotiable receipt
involved is a bearer receipt, hence, whoever, is in
possession of the receipt has title over the property
covered by the receipt. A direct obligation of the
WHM is owed to the bearer of the receipt.
 PROBLEM

ANSWER:
b.) The answer would be different. If the receipt is
an order receipt, indorsement is necessary to
acquire direct obligation of the WHM. In addition,
Bumibili would not be shielded from the previous
transfer which was in breach of faith.
 PROBLEM

FACTS:
X stole certain goods from Y. The goods were then deposited by X
with W, a Warehouseman, for which W issued to X a negotiable
warehouse receipt. Thereafter, X negotiated the receipt to Z, a
purchaser in good faith and for value. W, upon being informed of
the theft of goods and upon demand by Y, deliver the goods to Y,
without the receipt being surrendered to him. Can W be held
liable by Z for his subsequent failure to deliver the goods to him?
 PROBLEM

ANSWER:
No, the WHM would only be liable for his failure to deliver the
goods to Z if the negotiation would transfer the right to the
possession of goods. The Negotiation of the receipt by X to Z did
not transfer such right of possession to Z, the goods having been
stolen by X. Furthermore, a person to whom a negotiable WHR
has been negotiated acquires ONLY such title to the goods as the
person negotiating the receipt to him had or had the ability to
convey to a purchaser in good faith for value.
 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 OBLIGATIONS

A. Under the WRL

1. Deliver the goods upon a demand made either by the holder of a receipt for the
goods or depositor.

NOTE: Obligation to deliver arises only if the demand is accompanied by:

a. An offer to satisfy the warehouseman’s lien;
b. An offer to surrender the receipt, if negotiable, with such indorsement as may
be necessary for the negotiation of the receipt; and
c. 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.
 RIGHTS AND OBLIGATION OF
WAREHOUSEMAN

RIGHTS OBLIGATION
1. To be paid; 1. To issue WR in the required form
2. In case of non-payment, to exercise for goods received;
his lien on the goods deposited; 2. To take care of the goods deposited
3. To refuse delivery in proper legal with ordinary and reasonable
circumstances. diligence;
3. To deliver the goods to the person
lawfully entitled;
4. Not to commingle the goods
deposited, unless goods are fungible
and of the same kind and grade,
giving rise to co-ownership over
commingled mass
RIGHTS AND OBLIGATION OF
WAREHOUSEMAN

RIGHTS OBLIGATIONS
5. To insure the goods in proper
circumstances;
6. To mark a non-negotiable WR as
such;
7. To mark as such the duplicate of a
negotiable WR;
8. To give the proper notice in case of
sale of the goods as provided in the
WRL; and
9. To take up and cancel the WR when
the goods are delivered.
DUTY TO DELIVER

GR: A demand should be made on the WHM in order

that the duty to deliver the goods will arise.

Exception: When the WHM has rendered it beyond

his power to deliver the goods, the demand may be
dispensed with.
 TO WHOM MUST GOODS BE
DELIVERED:

1. Person lawfully entitled to possession of goods or his

agent (person to whom a competent court has ordered
delivery of goods; attaching creditor; purchaser)
2. Person entitled to delivery under a non-negotiable
receipt or with written authority ; or
3. Person in possession of a negotiable receipt.
 PROPERTY TO BE DELIVERED

In general, the WHM is obligated to

deliver, upon due demand, the
identical property stored with him,
as evidence by the WHR.
 RULE ON COMMINGLING OF
GOODS

GR: WHM may not mingle goods belonging to depositors.

Exception:
a.) in case of fungible goods, provided:
1. )If authorized by agreement or custom;
2.) goods of the same kind and grade.
In such case, the depositors of the mingled goods shall own the entire mass
in common and each depositor shall be entitled to such portion thereof as
the amount deposited by him bears to the whole.
 TIME OF DELIVERY

At the time specified in the contract. When

no particular time for redelivery is specified
in the WHR, a WHM must deliver on
seasonable demand for the stored property.
 INSTANCES WHEN A WHM MAY
LEGALLY REFUSE TO DELIVER GOODS:

1. When the holder of the receipt does not satisfy the Conditions prescribed in Section 8
of the Act;
2. If the WHM had been requested by a person lawfully entitled to a right of property or
possession in the goods not to make delivery to any person.
3. If he had the information that the delivery to be made was to one not lawfully entitled
to the possession of the goods;
4. Where the goods have already been lawfully Sold to 3rd person to satisfy the WHM’s
lien or disposed of because of their perishable or hazardous nature.
5. Delivery to a claimant with a Better right;
6. In case of Adverse claimant/s
 INSTANCES WHEN A WHM MAY
LEGALLY REFUSE TO DELIVER GOODS:

7. Attachment or levy of the goods by a creditor where the document is

surrendered or its negotiation is enjoined or the document is impounded;
8. Failure was not due to the fault of the WHM;
9. Where the document of Title is attached by a creditor;
10. When the WHM 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 WHM lien;
11. In the valid exercise of the WHM lien.
 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 WHEN A WHM IS
LIABLE FOR CONVERSION:

1. Where a WHM delivers the goods to one who is not in fact

lawfully entitled to possession of them and the delivery is
otherwise than the as authorized;
2. Even if delivered to persons entitled under section 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.
 DUTY TO TAKE CARE OF THE GOODS
DEPOSITED WITH ORDINARY AND
REASONABLE DILIGENCE;

Q: What is the degree of care expected of

WAREHOUSEMAN?

A: The WHM must exercise ordinary or reasonable care in

the custody of the goods, that is, the care a reasonably
careful owner would exercise over similar good of his own.
Such care is also known as ”the diligence of a good father of
a family.”
 EFFECTS OF ALTERATION OF WHR

A.) Alteration immaterial – if the alteration is immaterial (the

tenor of the receipt is not changed like the substitution of the real
name of a party), whether fraudulent or not, authorized or not –
WHM LIABLE according to its original tenor.
B.) Alteration material – (like the tenor of the receipt is
change in cases like there was an erasure of the name of party or
insertion of another), but authorized - WHM IS LIABLE AS
TO TERMS OF THE RECEIPT AS ALTERED.
 EFFECTS OF ALTERATION OF WHR

C.) Material Alteration innocently made though unauthorized–

WHM LIABLE on the altered receipt according to its original
tenor.
D.) Material Alteration fraudulently made – WHM IS LIABLE AS
TO ORIGINAL TENOR OF THE RECEIPT to a purchaser of the
receipt for value without notice, and even to alterer and
subsequent purchasers with notice except that as regard to the last
two, the WHM’s liability is limited only to delivery as he is excused
from any liability.
 LOST OR DESTROYED WHR

Where a negotiable receipt has been lost or destroyed, a

court of competent jurisdiction may order the delivery of
goods only:
1. Upon proof of the loss or destruction of the
receipt; and
2. Upon giving of a bond with sufficient sureties
to be approved by the court.
 DUTY TO INSURE GOODS

1. Where the law provides;

2. Where it was an inducement for the depositor to enter
into contract;
3. Established practices;
4. Where the WR contains representation to that effect.
 LIABILITY OF WHM FOR LOSS DUE
TO LACK OF CARE

GR: WHM is not liable for loss or injury to, the

goods resulting from a force majeure. But he must:
a.) Show he acted with due care under the
circumstances;
b.) The force majeure was the SOLE cause of
damage.
 WAREHOUSEMAN’S OBLIGATIONS

B. ) Under the General Bonded Warehouse Law (Act No. 9893; R.A. 247)
1. Secure a license from the Department of Trade and Industry;
2. File a bond equivalent to 33 ½ % of the market value of maximum
quantity of goods to be received for the protection of the depositors;
3. Not discriminate and must open his warehouse to the public;
4. Be liable in the amount equivalent to double the market value of the
goods in case of damage to the goods because the warehouseman
accepts goods in excess of the capacity of his warehouse; and
5. Insure the goods against fire.
 WAREHOUSEMAN’S LIEN

• A warehouseman shall have a lien on the goods deposited or on

the proceeds thereof in his hands for:

1. All lawful charges for storage and preservation of the goods;

2. All lawful claims for money advanced, interest, insurance,
transportation, labor, weighing, coopering, and other charges
and expenses in relation to such goods; and
3. 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

1. Refuse to deliver the goods until his lien is satisfied (Sec. 31,WRL);
2. Sell the goods and apply the proceeds thereof to the value of the
lien (Sections 33 & 34,WRL);
3. By other means allowed by law to a creditor against his debtor
(Sec. 32,WRL);
4. 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:

1. Surrendering possession thereof; or

2. 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

A.) Negotiable receipt – A WHM has the direct obligation to hold the
goods for the original owner or the person to whom the negotiable receipt of
title has been duly negotiated. The goods cannot be attached/levied in
execution unless:
1. The receipt is first surrendered
2. Its negotiation is enjoined
3. The receipt is impounded by the court (Sec. 25,WRL)

B.) Non-negotiable – the goods can be attached, provided it is done prior to

the notification of the bailee of the transfer. (Sec. 42, WRL)
 C R E D I TO R ' S R E M E D I E S TO R E A C H N E G O T I A B L E
R E C E I P T:

A creditor whose debtor is owner of a negotiable warehouse receipt may seek for
the attachment of the receipt or seek aid from the courts to compel the debtor to
satisfy claims by means allowed by law in regard to property which cannot readily
be attached or levied upon by ordinary legal process. (Sec. 26,WRL)
It does not apply when:

1. The depositor is not the owner of the goods (thief) or one who has no right to
convey title to the goods binding upon the owner;
2. The action for recovery or manual delivery of goods by the real owner;
3. Where attachment is made prior to the issuance of receipt.
 SCENARIO

Facts:
W appointed M, another corporation, as general manager of its warehouse
business for a certain period, with full power to manage its business only to
control of W’s board of directors. Under such power, M issued in its own name
the quedans of W and pledged them as collateral with B, a bank, which received
them in good faith.
B sued to recover the value of the goods. W alleged that the quedans were
invalidly and wrongfully issued and that the goods were not in W’s warehouse.
 SCENARIO

ISSUE:

Is W bound by the acts of M, its general manager and

estopped to deny its authority to issue such quedans?
 SCENARIO

RULING:
Yes, W having alleged that the quedans were invalid and wrongfully
issued, and that the copra described was not in its warehouse, was
estopped to claim or assert that B did not comply with any
condition precedent. In this action, a person has no legal right to
deny the existence of the instrument on which it is based, and
then claim that the plaintiff has not complied with the provision of
the instrument.
 LIABILITIES OF A WHM

CIVIL CRIMINAL
WHM or his agent
For damages suffered by reason of 1. Issuance of receipts for goods not
failure to comply with legal duties received;
2. Issuance of receipt containing false
statement;
3. Issuance of a negotiable WR not
marked as such
4. Issuance of a negotiable WR for
goods of which he is an owner
without stating such fact of
ownership;
5. Delivery of goods without obtaining
negotiable WR.