WAREHOUSE RECEIPTS LAW

Q: What is a warehouse receipt?

A: A written acknowledgment by the warehouseman  that he has  received and holds  certain goods therein  described in his  warehouse for the  person to  whom the  document is issued. The warehouse receipt has  two-­‐fold functions, that is, it is a contract and a receipt. (Telengtan Bros. & Sons v. CA, G.R. No. L-­‐110581, Sept 21, 1994)

Q: Coco was issued by a warehouseman a negotiable receipt for safekeeping by the latter of his goods.  Can the judgment creditor of Coco levy by execution the goods covered by the negotiable receipt?

A: The goods cannot, while in the possession of the warehouseman, be attached by garnishment or otherwise, or be levied upon under an execution unless the receipt be first surrendered to the warehouseman, or its negotiation enjoined. The warehouseman cannot be compelled to deliver the actual possession of the goods until the receipt is surrendered to it or impounded by the court.

Q: Coco was issued  by a warehouseman a negotiable receipt for safekeeping by the latter of his goods. Can the judgment creditor of Coco levy by execution the goods covered by the negotiable receipt?

A: The goods cannot, while in the possession of the warehouseman, be attached by garnishment or otherwise, or be  levied upon under an execution unless the receipt be first surrendered to the warehouseman, or its negotiation enjoined. The warehouseman cannot be compelled to deliver the actual possession of the goods until the receipt is surrendered to it or impounded by
the court.

Q: Bon took the goods of Angela without her consent and deposited the same with a warehouseman. The latter issued to Bon a negotiable receipt which she indorsed for value to Ryan. Between Angela and Ryan, who has better right over the goods? Why?

A: Ryan has better right to the goods. The goods are covered by a negotiable warehouse receipt which was indorsed to  Ryan for value. The negotiation to Ryan was not impaired by the fact that Bon took  the goods without the consent of Angela, as Ryan had no notice of such fact. Moreover, Ryan is in possession of the warehouse receipt and only he can surrender it to the warehouseman. (Sec. 8, WRL)