ACT NO.

2137 – THE WAREHOUSE RECEIPTS LAW

I — THE ISSUE OF WAREHOUSE RECEIPTS

Section 1. Persons who may issue receipts. — Warehouse receipts Sec. 6. Duplicate receipts must be so marked. — When more than
one negotiable receipt is issued for the same goods, the word
may be issued by any warehouseman.
"duplicate" shall be plainly placed upon the face of every such
receipt, except the first one issued. A warehouseman shall be
Sec. 2. Form of receipts; essential terms. — Warehouse receipts
need not be in any particular form but every such receipt must liable for all damages caused by his failure so to do to any one
who purchased the subsequent receipt for value supposing it to
embody within its written or printed terms:
be an original, even though the purchase be after the delivery of
the goods by the warehouseman to the holder of the original
(a) The location of the warehouse where the goods are stored,
receipt.
(b) The date of the issue of the receipt,
Sec. 7. Failure to mark "non-negotiable." — A non-negotiable
receipt shall have plainly placed upon its face by the
(c) The consecutive number of the receipt,
warehouseman issuing it "non-negotiable," or "not negotiable." In
case of the warehouseman's failure so to do, a holder of the
(d) A statement whether the goods received will be delivered to
receipt who purchased it for value supposing it to be negotiable,
the bearer, to a specified person or to a specified person or his
may, at his option, treat such receipt as imposing upon the
order,
warehouseman the same liabilities he would have incurred had
the receipt been negotiable.
(e) The rate of storage charges,
This section shall not apply, however, to letters, memoranda, or
(f) A description of the goods or of the packages containing them,
written acknowledgment of an informal character.
(g) The signature of the warehouseman which may be made by
his authorized agent,
II — OBLIGATIONS AND RIGHTS OF WAREHOUSEMEN UPON
THEIR RECEIPTS
(h) If the receipt is issued for goods of which the warehouseman
is owner, either solely or jointly or in common with others, the
Sec. 8. Obligation of warehousemen to deliver. — A
fact of such ownership, and
warehouseman, in the absence of some lawful excuse provided by
this Act, is bound to deliver the goods upon a demand made
(i) A statement of the amount of advances made and of liabilities
incurred for which the warehouseman claims a lien. If the precise either by the holder of a receipt for the goods or by the depositor;
if such demand is accompanied with:
amount of such advances made or of such liabilities incurred is, at
the time of the issue of, unknown to the warehouseman or to his
agent who issues it, a statement of the fact that advances have (a) An offer to satisfy the warehouseman's lien;
been made or liabilities incurred and the purpose thereof is
sufficient. (b) An offer to surrender the receipt, if negotiable, with such
indorsements as would be necessary for the negotiation of the
A warehouseman shall be liable to any person injured thereby for receipt; and
all damages caused by the omission from a negotiable receipt of
any of the terms herein required. (c) A readiness and willingness to sign, when the goods are
delivered, an acknowledgment that they have been delivered, if
Sec. 3. Form of receipts. — What terms may be inserted. — A such signature is requested by the warehouseman.
warehouseman may insert in a receipt issued by him any other
terms and conditions provided that such terms and conditions In case the warehouseman refuses or fails to deliver the goods in
shall not: compliance with a demand by the holder or depositor so
accompanied, the burden shall be upon the warehouseman to
establish the existence of a lawful excuse for such refusal.
(a) Be contrary to the provisions of this Act.
Sec. 9. Justification of warehouseman in delivering. — A
(b) In any wise impair his obligation to exercise that degree of
care in the safe-keeping of the goods entrusted to him which is warehouseman is justified in delivering the goods, subject to the
provisions of the three following sections, to one who is:
reasonably careful man would exercise in regard to similar goods
of his own.
(a) The person lawfully entitled to the possession of the goods, or
Sec. 4. Definition of non-negotiable receipt. — A receipt in which his agent;
it is stated that the goods received will be delivered to the
depositor or to any other specified person, is a non-negotiable (b) A person who is either himself entitled to delivery by the
terms of a non-negotiable receipt issued for the goods, or who
receipt.
has written authority from the person so entitled either indorsed
upon the receipt or written upon another paper; or
Sec. 5. Definition of negotiable receipt. — A receipt in which it is
stated that the goods received will be delivered to the bearer or to
(c) A person in possession of a negotiable receipt by the terms of
the order of any person named in such receipt is a negotiable
receipt. 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
No provision shall be inserted in a negotiable receipt that it is whom delivery was promised by the terms of the receipt or by his
mediate or immediate indorser.
non-negotiable. Such provision, if inserted shall be void.
 has been lost or destroyed, a court of competent jurisdiction may
Sec. 10. Warehouseman's liability for misdelivery. — Where a order the delivery of the goods upon satisfactory proof of such
warehouseman delivers the goods to one who is not in fact loss or destruction and upon the giving of a bond with sufficient
lawfully entitled to the possession of them, the warehouseman sureties to be approved by the court to protect the
shall be liable as for conversion to all having a right of property or warehouseman from any liability or expense, which he or any
possession in the goods if he delivered the goods otherwise than person injured by such delivery may incur by reason of the
as authorized by subdivisions (b) and (c) of the preceding section, original receipt remaining outstanding. The court may also in its
and though he delivered the goods as authorized by said discretion order the payment of the warehouseman's reasonable
subdivisions, he shall be so liable, if prior to such delivery he had costs and counsel fees.
either:
The delivery of the goods under an order of the court as provided
(a) Been requested, by or on behalf of the person lawfully entitled in this section, shall not relieve the warehouseman from liability
to a right of property or possession in the goods, not to make to a person to whom the negotiable receipt has been or shall be
such deliver; or negotiated for value without notice of the proceedings or of the
delivery of the goods.
(b) Had information that the delivery about to be made was to
one not lawfully entitled to the possession of the goods. Sec. 15. Effect of duplicate receipts. — A receipt upon the face of
which the word "duplicate" is plainly placed is a representation
Sec. 11. Negotiable receipt must be cancelled when goods and warranty by the warehouseman that such receipt is an
delivered. — Except as provided in section thirty-six, where a accurate copy of an original receipt properly issued and
warehouseman delivers goods for which he had issued a uncanceled at the date of the issue of the duplicate, but shall
negotiable receipt, the negotiation of which would transfer the impose upon him no other liability.
right to the possession of the goods, and fails to take up and
cancel the receipt, he shall be liable to any one who purchases for Sec. 16. Warehouseman cannot set up title in himself . — No title
value in good faith such receipt, for failure to deliver the goods to or right to the possession of the goods, on the part of the
him, whether such purchaser acquired title to the receipt before warehouseman, unless such title or right is derived directly or
or after the delivery of the goods by the warehouseman. indirectly from a transfer made by the depositor at the time of or
subsequent to the deposit for storage, or from the
Sec. 12. Negotiable receipts must be cancelled or marked when warehouseman's lien, shall excuse the warehouseman from
part of goods delivered. — Except as provided in section thirty- liability for refusing to deliver the goods according to the terms of
six, where a warehouseman delivers part of the goods for which the receipt.
he had issued a negotiable receipt and fails either to take up and
cancel such receipt or to place plainly upon it a statement of what Sec. 17. Interpleader of adverse claimants. — If more than one
goods or packages have been delivered, he shall be liable to any person claims the title or possession of the goods, the
one who purchases for value in good faith such receipt, for failure warehouseman may, either as a defense to an action brought
to deliver all the goods specified in the receipt, whether such against him for non-delivery of the goods or as an original suit,
purchaser acquired title to the receipt before or after the delivery whichever is appropriate, require all known claimants to
of any portion of the goods by the warehouseman. interplead.

Sec. 13. Altered receipts. — The alteration of a receipt shall not Sec. 18. Warehouseman has reasonable time to determine validity
excuse the warehouseman who issued it from any liability if such of claims. — If someone other than the depositor or person
alteration was: claiming under him has a claim to the title or possession of goods,
and the warehouseman has information of such claim, the
(a) Immaterial, warehouseman shall be excused from liability for refusing to
deliver the goods, either to the depositor or person claiming
(b) Authorized, or under him or to the adverse claimant until the warehouseman
has had a reasonable time to ascertain the validity of the adverse
(c) Made without fraudulent intent. claim or to bring legal proceedings to compel claimants to
interplead.
If the alteration was authorized, the warehouseman shall be liable
according to the terms of the receipt as altered. If the alteration Sec. 19. Adverse title is no defense except as above provided. —
was unauthorized but made without fraudulent intent, the Except as provided in the two preceding sections and in sections
warehouseman shall be liable according to the terms of the nine and thirty-six, no right or title of a third person shall be a
receipt as they were before alteration. defense to an action brought by the depositor or person claiming
under him against the warehouseman for failure to deliver the
Material and fraudulent alteration of a receipt shall not excuse the goods according to the terms of the receipt.
warehouseman who issued it from liability to deliver according to
the terms of the receipt as originally issued, the goods for which it Sec. 20. Liability for non-existence or misdescription of goods. —
was issued but shall excuse him from any other liability to the A warehouseman shall be liable to the holder of a receipt for
person who made the alteration and to any person who took with damages caused by the non-existence of the goods or by the
notice of the alteration. Any purchaser of the receipt for value failure of the goods to correspond with the description thereof in
without notice of the alteration shall acquire the same rights the receipt at the time of its issue. If, however, the goods are
against the warehouseman which such purchaser would have described in a receipt merely by a statement of marks or labels
acquired if the receipt had not been altered at the time of upon them or upon packages containing them or by a statement
purchase. that the goods are said to be goods of a certain kind or that the
packages containing the goods are said to contain goods of a
Sec. 14. Lost or destroyed receipts. — Where a negotiable receipt certain kind or by words of like purport, such statements, if true,
shall not make liable the warehouseman issuing the receipt,
although the goods are not of the kind which the marks or labels (a) Against all goods, whenever deposited, belonging to the
upon them indicate or of the kind they were said to be by the person who is liable as debtor for the claims in regard to which
depositor. the lien is asserted, and

Sec. 21. Liability for care of goods. — A warehouseman shall be (b) Against all goods belonging to others which have been
liable for any loss or injury to the goods caused by his failure to deposited at any time by the person who is liable as debtor for
exercise such care in regard to them as reasonably careful owner the claims in regard to which the lien is asserted if such person
of similar goods would exercise, but he shall not be liable, in the had been so entrusted with the possession of goods that a pledge
absence of an agreement to the contrary, for any loss or injury to of the same by him at the time of the deposit to one who took the
the goods which could not have been avoided by the exercise of goods in good faith for value would have been valid.
such care.
Sec. 29. How the lien may be lost. — A warehouseman loses his
Sec. 22. Goods must be kept separate. — Except as provided in the lien upon goods:
following section, a warehouseman shall keep the goods so far
separate from goods of other depositors and from other goods of (a) By surrendering possession thereof, or
the same depositor for which a separate receipt has been issued,
as to permit at all times the identification and redelivery of the (b) By refusing to deliver the goods when a demand is made with
goods deposited. which he is bound to comply under the provisions of this Act.

Sec. 23. Fungible goods may be commingled if warehouseman Sec. 30. Negotiable receipt must state charges for which the lien is
authorized. — If authorized by agreement or by custom, a claimed. — If a negotiable receipt is issued for goods, the
warehouseman may mingle fungible goods with other goods of warehouseman shall have no lien thereon except for charges for
the same kind and grade. In such case, the various depositors of storage of goods subsequent to the date of the receipt unless the
the mingled goods shall own the entire mass in common and each receipt expressly enumerated other charges for which a lien is
depositor shall be entitled to such portion thereof as the amount claimed. In such case, there shall be a lien for the charges
deposited by him bears to the whole. enumerated so far as they are within the terms of section twenty-
seven although the amount of the charges so enumerated is not
Sec. 24. Liability of warehouseman to depositors of commingled stated in the receipt.
goods. — The warehouseman shall be severally liable to each
depositor for the care and redelivery of his share of such mass to Sec. 31. Warehouseman need not deliver until lien is satisfied. —
the same extent and under the same circumstances as if the goods A warehouseman having a lien valid against the person
had been kept separate. demanding the goods may refuse to deliver the goods to him until
the lien is satisfied.
Sec. 25. Attachment or levy upon goods for which a negotiable
receipt has been issued. — If goods are delivered to a Sec. 32. Warehouseman's lien does not preclude other remedies.
warehouseman by the owner or by a person whose act in — Whether a warehouseman has or has not a lien upon the
conveying the title to them to a purchaser in good faith for value goods, he is entitled to all remedies allowed by law to a creditor
would bind the owner, and a negotiable receipt is issued for them, against a debtor for the collection from the depositor of all
they can not thereafter, while in the possession of the charges and advances which the depositor has expressly or
warehouseman, be attached by garnishment or otherwise, or be impliedly contracted with the warehouseman to pay.
levied upon under an execution unless the receipt be first
surrendered to the warehouseman or its negotiation enjoined. Sec. 33. Satisfaction of lien by sale. — A warehouseman's lien for a
The warehouseman shall in no case be compelled to deliver up claim which has become due may be satisfied as follows:
the actual possession of the goods until the receipt is surrendered
to him or impounded by the court. (a) An itemized statement of the warehouseman's claim, showing
the sum due at the time of the notice and the date or dates when
Sec. 26. Creditor's remedies to reach negotiable receipts. — A it becomes due,
creditor whose debtor is the owner of a negotiable receipt shall
be entitled to such aid from courts of appropriate jurisdiction, by (b) A brief description of the goods against which the lien exists,
injunction and otherwise, in attaching such receipt or in
satisfying the claim by means thereof as is allowed at law or in (c) A demand that the amount of the claim as stated in the notice
equity in these islands in regard to property which can not readily of such further claim as shall accrue, shall be paid on or before a
be attached or levied upon by ordinary legal process. day mentioned, not less than ten days from the delivery of the
notice if it is personally delivered, or from the time when the
Sec. 27. What claims are included in the warehouseman's lien. — notice shall reach its destination, according to the due course of
Subject to the provisions of section thirty, a warehouseman shall post, if the notice is sent by mail,
have a lien on goods deposited or on the proceeds thereof in his
hands, for all lawful charges for storage and preservation of the (d) A statement that unless the claim is paid within the time
goods; also for all lawful claims for money advanced, interest, specified, the goods will be advertised for sale and sold by auction
insurance, transportation, labor, weighing, coopering and other at a specified time and place.
charges and expenses in relation to such goods, also for all
reasonable charges and expenses for notice, and advertisements In accordance with the terms of a notice so given, a sale of the
of sale, and for sale of the goods where default had been made in goods by auction may be had to satisfy any valid claim of the
satisfying the warehouseman's lien. warehouseman for which he has a lien on the goods. The sale
shall be had in the place where the lien was acquired, or, if such
Sec. 28. Against what property the lien may be enforced. — place is manifestly unsuitable for the purpose of the claim
Subject to the provisions of section thirty, a warehouseman's lien specified in the notice to the depositor has elapsed, and
may be enforced:
advertisement of the sale, describing the goods to be sold, and
stating the name of the owner or person on whose account the Sec. 37. Negotiation of negotiable receipt of delivery. — A
goods are held, and the time and place of the sale, shall be negotiable receipt may be negotiated by delivery:
published once a week for two consecutive weeks in a newspaper
published in the place where such sale is to be held. The sale (a) Where, by terms of the receipt, the warehouseman undertakes
shall not be held less than fifteen days from the time of the first to deliver the goods to the bearer, or
publication. If there is no newspaper published in such place, the
advertisement shall be posted at least ten days before such sale in (b) Where, by the terms of the receipt, the warehouseman
not less than six conspicuous places therein. undertakes to deliver the goods to the order of a specified person,
and such person or a subsequent indorsee of the receipt has
From the proceeds of such sale, the warehouseman shall satisfy indorsed it in blank or to bearer.
his lien including the reasonable charges of notice, advertisement
and sale. The balance, if any, of such proceeds shall be held by the Where, by the terms of a negotiable receipt, the goods are
warehouseman and delivered on demand to the person to whom deliverable to bearer or where a negotiable receipt has been
he would have been bound to deliver or justified in delivering indorsed in blank or to bearer, any holder may indorse the same
goods. to himself or to any other specified person, and, in such case, the
receipt shall thereafter be negotiated only by the indorsement of
At any time before the goods are so sold, any person claiming a such indorsee.
right of property or possession therein may pay the
warehouseman the amount necessary to satisfy his lien and to Sec. 38. Negotiation of negotiable receipt by indorsement. — A
pay the reasonable expenses and liabilities incurred in serving negotiable receipt may be negotiated by the indorsement of the
notices and advertising and preparing for the sale up to the time person to whose order the goods are, by the terms of the receipt,
of such payment. The warehouseman shall deliver the goods to deliverable. Such indorsement may be in blank, to bearer or to a
the person making payment if he is a person entitled, under the specified person. If indorsed to a specified person, it may be
provision of this Act, to the possession of the goods on payment again negotiated by the indorsement of such person in blank, to
of charges thereon. Otherwise, the warehouseman shall retain bearer or to another specified person. Subsequent negotiation
the possession of the goods according to the terms of the original may be made in like manner.
contract of deposit.
Sec. 39. Transfer of receipt. — A receipt which is not in such form
Sec. 34. Perishable and hazardous goods. — If goods are of a that it can be negotiated by delivery may be transferred by the
perishable nature, or by keeping will deteriorate greatly in value, holder by delivery to a purchaser or donee.
or, by their order, leakage, inflammability, or explosive nature, will
be liable to injure other property , the warehouseman may give A non-negotiable receipt can not be negotiated, and the
such notice to the owner or to the person in whose names the indorsement of such a receipt gives the transferee no additional
goods are stored, as is reasonable and possible under the right.
circumstances, to satisfy the lien upon such goods and to remove
them from the warehouse and in the event of the failure of such Sec. 40. Who may negotiate a receipt. — A negotiable receipt may
person to satisfy the lien and to receive the goods within the time be negotiated:
so specified, the warehouseman may sell the goods at public or
private sale without advertising. If the warehouseman, after a (a) By the owner thereof, or
reasonable effort, is unable to sell such goods, he may dispose of
them in any lawful manner and shall incur no liability by reason (b) By any person to whom the possession or custody of the
thereof. receipt has been entrusted by the owner, if, by the terms of the
receipt, the warehouseman undertakes to deliver the goods to the
The proceeds of any sale made under the terms of this section order of the person to whom the possession or custody of the
shall be disposed of in the same way as the proceeds of sales receipt has been entrusted, or if, at the time of such entrusting,
made under the terms of the preceding section. the receipt is in such form that it may be negotiated by delivery.

Sec. 35. Other methods of enforcing lien. — The remedy for Sec. 41. Rights of person to whom a receipt has been negotiated.
enforcing a lien herein provided does not preclude any other — A person to whom a negotiable receipt has been duly
remedies allowed by law for the enforcement of a lien against negotiated acquires thereby:
personal property nor bar the right to recover so much of the
warehouseman's claim as shall not be paid by the proceeds of the (a) Such title to the goods as the person negotiating the receipt to
sale of the property. him had or had ability to convey to a purchaser in good faith for
value, and also such title to the goods as the depositor or person
Sec. 36. Effect of sale. — After goods have been lawfully sold to to whose order the goods were to be delivered by the terms of the
satisfy a warehouseman's lien, or have been lawfully sold or receipt had or had ability to convey to a purchaser in good faith
disposed of because of their perishable or hazardous nature, the for value, and
warehouseman shall not thereafter be liable for failure to deliver
the goods to the depositor or owner of the goods or to a holder of (b) The direct obligation of the warehouseman to hold possession
the receipt given for the goods when they were deposited, even if of the goods for him according to the terms of the receipt as fully
such receipt be negotiable. as if the warehouseman and contracted directly with him.

Sec. 42. Rights of person to whom receipt has been transferred. —

A person to whom a receipt has been transferred but not
III — NEGOTIATION AND TRANSFER OF RECEIPTS negotiated acquires thereby, as against the transferor, the title of
the goods subject to the terms of any agreement with the
transferor. mortgaged, or pledged goods which are in warehouse and for
which a negotiable receipt has been issued, or having sold,
If the receipt is non-negotiable, such person also acquires the mortgaged, or pledged the negotiable receipt representing such
right to notify the warehouseman of the transfer to him of such goods, continues in possession of the negotiable receipt, the
receipt and thereby to acquire the direct obligation of the subsequent negotiation thereof by the person under any sale or
warehouseman to hold possession of the goods for him according other disposition thereof to any person receiving the same in
to the terms of the receipt. good faith, for value and without notice of the previous sale,
mortgage or pledge, shall have the same effect as if the first
Prior to the notification of the warehouseman by the transferor or purchaser of the goods or receipt had expressly authorized the
transferee of a non-negotiable receipt, the title of the transferee subsequent negotiation.
to the goods and the right to acquire the obligation of the
warehouseman may be defeated by the levy of an attachment or Sec. 49. Negotiation defeats vendor's lien. — Where a negotiable
execution upon the goods by a creditor of the transferor or by a receipt has been issued for goods, no seller's lien or right of
notification to the warehouseman by the transferor or a stoppage in transitu shall defeat the rights of any purchaser for
subsequent purchaser from the transferor of a subsequent sale of value in good faith to whom such receipt has been negotiated,
the goods by the transferor. whether such negotiation be prior or subsequent to the
notification to the warehouseman who issued such receipt of the
Sec. 43. Transfer of negotiable receipt without indorsement. — seller's claim to a lien or right of stoppage in transitu. Nor shall
Where a negotiable receipt is transferred for value by delivery the warehouseman be obliged to deliver or justified in delivering
and the indorsement of the transferor is essential for negotiation, the goods to an unpaid seller unless the receipt is first
the transferee acquires a right against the transferor to compel surrendered for cancellation.
him to indorse the receipt unless a contrary intention appears.
The negotiation shall take effect as of the time when the
indorsement is actually made. IV — CRIMINAL OFFENSES

Sec. 44. Warranties of a sale of receipt. — A person who, for value, Sec. 50. Issue of receipt for goods not received. — A
negotiates or transfers a receipt by indorsement or delivery, warehouseman, or an officer, agent, or servant of a
including one who assigns for value a claim secured by a receipt, warehouseman who issues or aids in issuing a receipt knowing
unless a contrary intention appears, warrants: that the goods for which such receipt is issued have not been
actually received by such warehouseman, or are not under his
(a) That the receipt is genuine, actual control at the time of issuing such receipt, shall be guilty of
a crime, and, upon conviction, shall be punished for each offense
(b) That he has a legal right to negotiate or transfer it, by imprisonment not exceeding five years, or by a fine not
exceeding ten thousand pesos, or both.
(c) That he has knowledge of no fact which would impair the
validity or worth of the receipt, and Sec. 51. Issue of receipt containing false statement. — A
warehouseman, or any officer, agent or servant of a
(d) That he has a right to transfer the title to the goods and that warehouseman who fraudulently issues or aids in fraudulently
the goods are merchantable or fit for a particular purpose issuing a receipt for goods knowing that it contains any false
whenever such warranties would have been implied, if the statement, shall be guilty of a crime, and upon conviction, shall be
contract of the parties had been to transfer without a receipt of punished for each offense by imprisonment not exceeding one
the goods represented thereby. year, or by a fine not exceeding two thousand pesos, or by both.

Sec. 45. Indorser not a guarantor. — The indorsement of a receipt Sec. 52. Issue of duplicate receipt not so marked. — A warehouse,
shall not make the indorser liable for any failure on the part of the or any officer, agent, or servant of a warehouseman who issues or
warehouseman or previous indorsers of the receipt to fulfill their aids in issuing a duplicate or additional negotiable receipt for
respective obligations. goods knowing that a former negotiable receipt for the same
goods or any part of them is outstanding and uncanceled, without
Sec. 46. No warranty implied from accepting payment of a debt. plainly placing upon the face thereof the word "duplicate" except
— A mortgagee, pledgee, or holder for security of a receipt who, in the case of a lost or destroyed receipt after proceedings are
in good faith, demands or receives payment of the debt for which provided for in section fourteen, shall be guilty of a crime, and,
such receipt is security, whether from a party to a draft drawn for upon conviction, shall be punished for each offense by
such debt or from any other person, shall not, by so doing, be imprisonment not exceeding five years, or by a fine not exceeding
deemed to represent or to warrant the genuineness of such ten thousand pesos, or by both.
receipt or the quantity or quality of the goods therein described.
Sec. 53. Issue for warehouseman's goods or receipts which do not
Sec. 47. When negotiation not impaired by fraud, mistake or state that fact. — Where they are deposited with or held by a
duress. — The validity of the negotiation of a receipt is not warehouseman goods of which he is owner, either solely or
impaired by the fact that such negotiation was a breach of duty on jointly or in common with others, such warehouseman, or any of
the part of the person making the negotiation or by the fact that his officers, agents, or servants who, knowing this ownership,
the owner of the receipt was induced by fraud, mistake or duress issues or aids in issuing a negotiable receipt for such goods which
or to entrust the possession or custody of the receipt to such does not state such ownership, shall be guilty of a crime, and,
person, if the person to whom the receipt was negotiated or a upon conviction, shall be punished for each offense by
person to whom the receipt was subsequently negotiated paid imprisonment not exceeding one year, or by a fine not exceeding
value therefor, without notice of the breach of duty, or fraud, two thousand pesos, or by both.
mistake or duress.
Sec. 54. Delivery of goods without obtaining negotiable receipt. —
Sec. 48. Subsequent negotiation. — Where a person having sold, A warehouseman, or any officer, agent, or servant of a
warehouseman, who delivers goods out of the possession of such "Warehouseman" means a person lawfully engaged in the
warehouseman, knowing that a negotiable receipt the negotiation business of storing goods for profit.
of which would transfer the right to the possession of such goods
is outstanding and uncanceled, without obtaining the possession (b) A thing is done "in good faith" within the meaning of this Act
of such receipt at or before the time of such delivery, shall, except when it is in fact done honestly, whether it be done negligently or
in the cases provided for in sections fourteen and thirty-six, be not.
found guilty of a crime, and, upon conviction, shall be punished
for each offense by imprisonment not exceeding one year, or by a Sec. 59. Application of Act. — The provisions of this Act do not
fine not exceeding two thousand pesos, or by both.
apply to receipts made and delivered prior to the taking effect
hereof.
Sec. 55. Negotiation of receipt for mortgaged goods. — Any
person who deposits goods to which he has no title, or upon
which there is a lien or mortgage, and who takes for such goods a Sec. 60. Repeals. — All acts and laws and parts thereof
negotiable receipt which he afterwards negotiates for value with inconsistent with this Act are hereby repealed.
intent to deceive and without disclosing his want of title or the
existence of the lien or mortgage, shall be guilty of a crime, and, Sec. 61. Time when Act takes effect. — This Act shall take effect
upon conviction, shall be punished for each offense by ninety days after its publication in the Official Gazette of the
imprisonment not exceeding one year, or by a fine not exceeding Philippines shall have been completed.
two thousand pesos, or by both.
Enacted: February 5, 1912

V — INTERPRETATION

Sec. 56. Case not provided for in Act. — Any case not provided for
in this Act shall be governed by the provisions of existing
legislation, or in default thereof, by the rule of the law merchant.

Sec. 57. Name of Act. — This Act may be cited as the Warehouse
Receipts Act.

Sec. 58. Definitions. — (a) In this Act, unless the content or

subject matter otherwise requires:9mk, ii’

;p[;o

"Action" includes counterclaim, set-off, and suits in equity as

provided by law in these islands.

"Delivery" means voluntary transfer of possession from one

person to another.

"Fungible goods" means goods of which any unit is, from its
nature by mercantile custom, treated as the equivalent of any
other unit.

"Goods" means chattels or merchandise in storage or which has

been or is about to be stored.

"Holder" of a receipt means a person who has both actual

possession of such receipt and a right of property therein.

"Order" means an order by indorsement on the receipt.

"Owner" does not include mortgagee.

"Person" includes a corporation or partnership or two or more

persons having a joint or common interest.

To "purchase" includes to take as mortgagee or as pledgee.

"Receipt" means a warehouse receipt.

"Value" is any consideration sufficient to support a simple

contract. An antecedent or pre-existing obligation, whether for
money or not, constitutes value where a receipt is taken either in
satisfaction thereof or as security therefor.
 Act No. 3839 business of receiving rice for storage shall insure the rice so
received and stored against fire.
ACT NO. 3893 - AN ACT TO REGULATE THE BUSINESS OF
RECEIVING RICE FOR STORAGE, GIVING THE DIRECTOR OF Sec. 7. Any person injured by the breach of any obligation to
COMMERCE AND INDUSTRY THE DUTY TO ENFORCE IF, secure which a bond is given, under the provisions of this Act,
PROVIDING PENALTIES FOR VIOLATION OF THE PROVISIONS, shall be entitled to sue on the bond in his own name in any court
EXEMPTING COOPERATIVE MARKETING ASSOCIATIONS OF of competent jurisdiction to recover the damages he may have
RICE PRODUCERS FROM APPLICATION THEREOF, REPEALING sustained by such breach. Nothing contained herein shall except
ACT NUMBERED THIRTY-FOUR HUNDRED AND SIXTY-NINE any property of assets of any warehouseman from being sued on
AND FOR OTHER PURPOSES in case the bond given is not sufficient to respond for the full
market value of the rice received by such warehouseman.
Section 1. This Act shall be known by the short title of
"BONDED WAREHOUSE ACT." Sec. 8. Every warehouseman licensed under this Act shall receive
for storage, so far as his license and the capacity of his warehouse
Sec. 2. As used in this Act, the term "warehouse" shall be deemed permit, any rice, of the kind customarily stored therein by him,
to mean every building, structure, or other protected inclosure in which may be tendered to him in a suitable condition for
which rice is kept for storage. The term "rice" shall be deemed to warehousing, in the usual manner and in the ordinary and usual
mean either palay in bundles, or in grains, or clean rice, or both. course of business, without making any discrimination between
"Person" including corporation or partnership or two or more persons desiring to avail themselves of warehouse facilities.
persons having joint or common interest; "warehouseman"
means a person engaged in the business receiving rice for Sec. 9. Every warehouseman licensed under this Act shall keep a
storage; and "receipt" means any receipt issued by a complete record of the rice received by him, of the receipts issued
warehouseman for rice delivered to him. For the purpose of this therefor of the withdrawals, of the liquidations and of all receipts
Act, the business of receiving rice for storage shall include (1) any returned to and cancelled by him. He shall make reports to the
contract or transaction wherein the warehouseman is obligated Director of Bureau of Commerce and Industry concerning his
to return the very same rice delivered to him or pay its value;(2) warehouse and the conditions, contents, operations, and business
any contract or transaction wherein the rice delivered is to be thereof in such form and at such time as the said Director may
milled for and on account of the owner thereof; (3) any contract require, and shall conduct said warehouse in all other respects in
or transaction wherein the rice delivered is commingled with the compliance with this Act and the rules and regulations made in
rice delivered by or belonging to other persons and the accordance therewith.
warehouseman is obligated to return the rice of the same kind or
pay its value. Sec. 10. The Director of Bureau of Commerce and Industry shall
from time to time make such rules and regulations as he may
Sec. 3. No person shall engage in the business of receiving rice for deem necessary for the efficient execution of the provisions of
storage without first securing a license therefore from the this Act.
Director of the Bureau of Commerce and Industry. Said license
shall be annual and shall expire on the thirty-first day of Sec. 11. Any person engaging in the business of receiving rice for
December. storage in violation of Section three of this Act shall be deemed
guilty of misdemeanor, and upon conviction thereof shall be
Sec. 4. Any person applying for a license to engage in the business punished by imprisonment of not less than one month or by a
of receiving rice for storage shall set forth in the application the fine of not more than five thousand pesos, or both, in the
place or places where the business and warehouse are to be discretion of the court.
established or located and the maximum quantity of rice to be
received. The application shall be accompanied by a cash bond or Sec. 12. Any warehouseman licensed under this Act receiving a
a bond secured by real estate or signed by a duly authorized quantity of rice greater than that specified in his application and
bonding company, the amount of which shall be fixed by the license, shall, upon conviction, be fined double the market value
Director of the Bureau of Commerce and Industry at not less than of the rice so received in excess of the quantity of rice he is
thirty-three and one third percent of the market value of the authorized to receive.
maximum quantity or rice to be received. Said bond shall be so
conditioned as to respond for the market value of the rice actually Sec. 13. Any person entering into connivance or combination with
delivered and received at any time the warehouseman is unable any warehouseman that is not licensed under this Act, with the
to return the rice or to pay its value. The bond shall be approved purpose of evading the provisions of section three of this Act,
by the Director of the Bureau of Commerce and Industry before shall be deemed guilty of misdemeanor, and upon conviction
issuing a license under this Act, to satisfy himself concerning the thereof, shall be fined not more than two hundred pesos or
sufficiency of such bond, and to determine whether the imprisonment for not more than one months, or both, in the
warehouse for which such license is applied for is suitable for the discretion of the court.
proper storage of rice.
Sec. 14. The Director of the Bureau of Commerce and Industry
Sec. 5. Whenever the Director of the Bureau of Commerce and may, after opportunity for hearing has been afforded to the
Industry shall determine that a bond approved by him, is or any license concerned, suspend or revoke any license issued to any
cause, has become insufficient, he may require an additional bond warehouseman, conducting a warehouse under this Act, for any
or bonds to be given by the warehouseman concerned, violation or failure to comply with any provision of this Act or of
conforming with the requirements of the preceding section, and the rules and regulations made by virtue thereof.
unless the same be given within the time fixed by a written
demand therefor the license of such warehouse may be Sec. 15. This Act shall not be applicable to cooperative marketing
suspended or revoked. associations of rice producers organized under Act Numbered
Three Thousand Four Hundred and Twenty-five known as the
Sec. 6. Every person licensed under this Act to engage in the "Cooperative Marketing Law," provided such associations shall
not receive, for storage, rice from non-members which is greater
in quantity than one-half of the total quantity of rice received
from members, at any time.

Sec. 16. If any clause, sentence, or paragraph, or part of this Act

shall, for any reason, be adjusted by any court of competent
jurisdiction to be invalid, such judgment shall not affect, impair,
or invalidate the remainder thereof, but shall be confined in his
operation to the clause, sentence, paragraph or part thereof
directly involved in the controversy in which such judgment shall
have been rendered.

Sec. 17. This Act shall take effect on January First, nineteen
hundred and thirty-two.
 MALACAÑANG (d) "Goods" shall include chattels and personal property other
Manila than: money, things in action, or things so affixed to land as to
become a part thereof.
PRESIDENTIAL DECREE No. 115 January 29, 1973
(e) "Instrument" means any negotiable instrument as defined in
PROVIDING FOR THE REGULATION OF TRUST RECEIPTS the Negotiable Instrument Law; any certificate of stock, or bond
TRANSACTIONS or debenture for the payment of money issued by a public or
private corporation, or any certificate of deposit, participation
WHEREAS, the utilization of trust receipts, as a convenient
certificate or receipt, any credit or investment instrument of a
business device to assist importers and merchants solve their
sort marketed in the ordinary course of business or finance,
financing problems, had gained popular acceptance in
whereby the entrustee, after the issuance of the trust receipt,
international and domestic business practices, particularly in
appears by virtue of possession and the face of the instrument to
commercial banking transactions;
be the owner. "Instrument" shall not include a document as
WHEREAS, there is no specific law in the Philippines that governs defined in this Decree.
trust receipt transactions, especially the rights and obligations of
(f) "Purchase" means taking by sale, conditional sale, lease,
the parties involved therein and the enforcement of the said
mortgage, or pledge, legal or equitable.
rights in case of default or violation of the terms of the trust
receipt agreement; (g) "Purchaser" means any person taking by purchase.
WHEREAS, the recommendations contained in the report on the (h) "Security Interest" means a property interest in goods,
financial system which have been accepted, with certain documents or instruments to secure performance of some
modifications by the monetary authorities included, among obligations of the entrustee or of some third persons to the
others, the enactment of a law regulating the trust receipt entruster and includes title, whether or not expressed to be
transactions; absolute, whenever such title is in substance taken or retained for
security only.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the (i) "Person" means, as the case may be, an individual, trustee,
Constitution, as Commander-in-Chief of all the Armed Forces of receiver, or other fiduciary, partnership, corporation, business
the Philippines, and pursuant to Proclamation No. 1081, dated trust or other association, and two more persons having a joint or
September 21, 1972, and General Order No. 1, dated September common interest.
22, 1972, as amended, and in order to effect the desired changes
and reforms in the social, economic, and political structure of our (j) "Trust Receipt" shall refer to the written or printed document
society, do hereby order and decree and make as part of the law signed by the entrustee in favor of the entruster containing terms
of the land the following: and conditions substantially complying with the provisions of this
Decree. No further formality of execution or authentication shall
Section 1. Short Title. This Decree shall be known as the Trust be necessary to the validity of a trust receipt.
Receipts Law.
(k) "Value" means any consideration sufficient to support a
Section 2. Declaration of Policy. It is hereby declared to be the simple contract.
policy of the state (a) to encourage and promote the use of trust
receipts as an additional and convenient aid to commerce and Section 4. What constitutes a trust receipt transaction. A trust
trade; (b) to provide for the regulation of trust receipts receipt transaction, within the meaning of this Decree, is any
transactions in order to assure the protection of the rights and transaction by and between a person referred to in this Decree as
enforcement of obligations of the parties involved therein; and (c) the entruster, and another person referred to in this Decree as
to declare the misuse and/or misappropriation of goods or entrustee, whereby the entruster, who owns or holds absolute
proceeds realized from the sale of goods, documents or title or security interests over certain specified goods, documents
instruments released under trust receipts as a criminal offense or instruments, releases the same to the possession of the
punishable under Article Three hundred and fifteen of the entrustee upon the latter's execution and delivery to the
Revised Penal Code. entruster of a signed document called a "trust receipt" wherein
the entrustee binds himself to hold the designated goods,
Section 3. Definition of terms. As used in this Decree, unless the documents or instruments in trust for the entruster and to sell or
context otherwise requires, the term otherwise dispose of the goods, documents or instruments with
the obligation to turn over to the entruster the proceeds thereof
(a) "Document" shall mean written or printed evidence of title to
to the extent of the amount owing to the entruster or as appears
goods.
in the trust receipt or the goods, documents or instruments
(b) "Entrustee" shall refer to the person having or taking themselves if they are unsold or not otherwise disposed of, in
possession of goods, documents or instruments under a trust accordance with the terms and conditions specified in the trust
receipt transaction, and any successor in interest of such person receipt, or for other purposes substantially equivalent to any of
for the purpose or purposes specified in the trust receipt the following:
agreement.
1. In the case of goods or documents, (a) to sell the goods or
(c) "Entruster" shall refer to the person holding title over the procure their sale; or (b) to manufacture or process the goods
goods, documents, or instruments subject of a trust receipt with the purpose of ultimate sale: Provided, That, in the case of
transaction, and any successor in interest of such person. goods delivered under trust receipt for the purpose of
manufacturing or processing before its ultimate sale, the
entruster shall retain its title over the goods whether in its instruments in case of non-sale, and to the enforcement of all
original or processed form until the entrustee has complied fully other rights conferred on him in the trust receipt provided such
with his obligation under the trust receipt; or (c) to load, unload, are not contrary to the provisions of this Decree.
ship or tranship or otherwise deal with them in a manner
preliminary or necessary to their sale; or The entruster may cancel the trust and take possession of the
goods, documents or instruments subject of the trust or of the
2. In the case of instruments, proceeds realized therefrom at any time upon default or failure of
the entrustee to comply with any of the terms and conditions of
a) to sell or procure their sale or exchange; or the trust receipt or any other agreement between the entruster
and the entrustee, and the entruster in possession of the goods,
b) to deliver them to a principal; or
documents or instruments may, on or after default, give notice to
c) to effect the consummation of some transactions involving the entrustee of the intention to sell, and may, not less than five
delivery to a depository or register; or days after serving or sending of such notice, sell the goods,
documents or instruments at public or private sale, and the
d) to effect their presentation, collection or renewal entruster may, at a public sale, become a purchaser. The proceeds
of any such sale, whether public or private, shall be applied (a) to
The sale of goods, documents or instruments by a person in the
the payment of the expenses thereof; (b) to the payment of the
business of selling goods, documents or instruments for profit
expenses of re-taking, keeping and storing the goods, documents
who, at the outset of the transaction, has, as against the buyer,
or instruments; (c) to the satisfaction of the entrustee's
general property rights in such goods, documents or instruments,
indebtedness to the entruster. The entrustee shall receive any
or who sells the same to the buyer on credit, retaining title or
surplus but shall be liable to the entruster for any deficiency.
other interest as security for the payment of the purchase price,
Notice of sale shall be deemed sufficiently given if in writing, and
does not constitute a trust receipt transaction and is outside the
either personally served on the entrustee or sent by post-paid
purview and coverage of this Decree.
ordinary mail to the entrustee's last known business address.
Section 5. Form of trust receipts; contents. A trust receipt need
Section 8. Entruster not responsible on sale by entrustee. The
not be in any particular form, but every such receipt must
entruster holding a security interest shall not, merely by virtue of
substantially contain (a) a description of the goods, documents or
such interest or having given the entrustee liberty of sale or other
instruments subject of the trust receipt; (2) the total invoice value
disposition of the goods, documents or instruments under the
of the goods and the amount of the draft to be paid by the
terms of the trust receipt transaction be responsible as principal
entrustee; (3) an undertaking or a commitment of the entrustee
or as vendor under any sale or contract to sell made by the
(a) to hold in trust for the entruster the goods, documents or
entrustee.
instruments therein described; (b) to dispose of them in the
manner provided for in the trust receipt; and (c) to turn over the Section 9. Obligations of the entrustee. The entrustee shall (1)
proceeds of the sale of the goods, documents or instruments to hold the goods, documents or instruments in trust for the
the entruster to the extent of the amount owing to the entruster entruster and shall dispose of them strictly in accordance with
or as appears in the trust receipt or to return the goods, the terms and conditions of the trust receipt; (2) receive the
documents or instruments in the event of their non-sale within proceeds in trust for the entruster and turn over the same to the
the period specified therein. entruster to the extent of the amount owing to the entruster or as
appears on the trust receipt; (3) insure the goods for their total
The trust receipt may contain other terms and conditions agreed
value against loss from fire, theft, pilferage or other casualties; (4)
upon by the parties in addition to those hereinabove enumerated
keep said goods or proceeds thereof whether in money or
provided that such terms and conditions shall not be contrary to
whatever form, separate and capable of identification as property
the provisions of this Decree, any existing laws, public policy or
of the entruster; (5) return the goods, documents or instruments
morals, public order or good customs.
in the event of non-sale or upon demand of the entruster; and (6)
Section 6. Currency in which a trust receipt may be observe all other terms and conditions of the trust receipt not
denominated. A trust receipt may be denominated in the contrary to the provisions of this Decree.
Philippine currency or any foreign currency acceptable and
Section 10. Liability of entrustee for loss. The risk of loss shall be
eligible as part of international reserves of the Philippines, the
borne by the entrustee. Loss of goods, documents or instruments
provisions of existing law, executive orders, rules and regulations
which are the subject of a trust receipt, pending their disposition,
to the contrary notwithstanding: Provided, however, That in the
irrespective of whether or not it was due to the fault or
case of trust receipts denominated in foreign currency, payment
negligence of the entrustee, shall not extinguish his obligation to
shall be made in its equivalent in Philippine currency computed
the entruster for the value thereof.
at the prevailing exchange rate on the date the proceeds of sale of
the goods, documents or instruments held in trust by the Section 11. Rights of purchaser for value and in good faith. Any
entrustee are turned over to the entruster or on such other date purchaser of goods from an entrustee with right to sell, or of
as may be stipulated in the trust receipt or other agreements documents or instruments through their customary form of
executed between the entruster and the entrustee. transfer, who buys the goods, documents, or instruments for
value and in good faith from the entrustee, acquires said goods,
Section 7. Rights of the entruster. The entruster shall be entitled
documents or instruments free from the entruster's security
to the proceeds from the sale of the goods, documents or
interest.
instruments released under a trust receipt to the entrustee to the
extent of the amount owing to the entruster or as appears in the Section 12. Validity of entruster's security interest as against
trust receipt, or to the return of the goods, documents or creditors. The entruster's security interest in goods, documents,
or instruments pursuant to the written terms of a trust receipt
shall be valid as against all creditors of the entrustee for the
duration of the trust receipt agreement.

Section 13. Penalty clause. The failure of an entrustee to turn

over the proceeds of the sale of the goods, documents or
instruments covered by a trust receipt to the extent of the amount
owing to the entruster or as appears in the trust receipt or to
return said goods, documents or instruments if they were not
sold or disposed of in accordance with the terms of the trust
receipt shall constitute the crime of estafa, punishable under the
provisions of Article Three hundred and fifteen, paragraph one
(b) of Act Numbered Three thousand eight hundred and fifteen,
as amended, otherwise known as the Revised Penal Code. If the
violation or offense is committed by a corporation, partnership,
association or other juridical entities, the penalty provided for in
this Decree shall be imposed upon the directors, officers,
employees or other officials or persons therein responsible for
the offense, without prejudice to the civil liabilities arising from
the criminal offense.

Section 14. Cases not covered by this Decree. Cases not provided
for in this Decree shall be governed by the applicable provisions
of existing laws.

Section 15. Separability clause. If any provision or section of this

Decree or the application thereof to any person or circumstance
is held invalid, the other provisions or sections hereof and the
application of such provisions or sections to other persons or
circumstances shall not be affected thereby.

Section 16. Repealing clause. All Acts inconsistent with this

Decree are hereby repealed.

Section 17. This Decree shall take effect immediately.

Done in the City of Manila, this 29th day of January, in the year of
Our Lord, nineteen hundred and seventy-three.