Mercantile Law} Credit Trans} Memory Aid} Made 2002} by Ateneo} 21 Pages

8/12/2019 Mercantile Law} Credit Trans} Memory Aid} Made 2002} by Ateneo} 21 Pages

1/21

CREDIT TRANSACTIONS MEMORY AID ATENEOCENTRALBAROPERATIONS2002

Credit Transactions: includes all transactions involving the purchase or loan of goods,services, or money in the present with a promise to pay or deliver in the future (Contract ofSecurity)

Two types of Credit Transactions:

1. secured transactions- those supported by a security or collateral

. unsecured transactions! those supported only by promise to pay

Security:

"t is something given, deposited or serving as a means to ensure the fulfillment or enforcementof an obligation or of protecting some interest in the property

Bai!ent:

"t is the delivery of property of one person to another in trust for a specific purpose, with acontract, e#press or implied, that the trust shall be faithfully e#ecuted and the property returnedor duly accounted for when the special purpose is accomplished or $ept until the bailor reclaimsit.

Parties in Bai!ent:

1. bailor! the giver, the party who delivers possession % custody of the thing bailed

. bailee! the recipient, the party who receives the possession % custody of the thingdelivered

"inds of Contractua Bai!ent wit# reference to co!pensation:

1. for the sole benefit of the bailor (gratuitous)

e.g.gratuitous deposit, mandatum (do dome act with respect to a thing)

2. for the sole benefit of the bailee (gratuitous)

e.g.commodatum, gratuitous simple loan or mutuum

3. for the benefit of both parties

e.g.deposit for compensation, involuntary deposit, pledge and bailments for hire:

a. hire of things ! temporary use

b. hire of service ! for wor$ or labor

c. hire of carriage of goods ! for carriage

d. hire of custody ! for storage

LOAN

C#aracteristics

1. real!delivery is essential for perfection of the loan (&' a promise to lend,being consensual, is binding upon the parties but it is only after deliverythat the real contract of loan arises)

. unilateral! only the borrower has obligation

1


2/21


"inds

1. co!!odatu!: where the bailor delivers to the bailee a non-consummable thing so thatthe latter may use it for a certain time and return the identical thing.

- It may either be:

i. rdinary commodatum* or

ii. +recarium (whereby the bailor may demand the thing loaned at will)

. mutuum or simple loan:where the lender delivers to the borrower money or otherconsumable thing (when it is consumed in a manner appropriate to its purpose) uponthe condition that the latter shall pay the same amount of the same $ind and uality.

$ifferences Between t#e Two "inds:

CO%%O$AT&% %&T&&% 'SI%PLE LOAN(

rdinarily not consumable oney or other consumable thing

wnership is retained by the lender wnership is transferred to the borrower

ssentially gratuitous /ratuitous or onerous, that is with stipulationto pay interest

&orrower must return the same thing loaned &orrower need only pa the same amount ofthe same $ind and uality

ay involve real or personal property nly personal property

0oan for use or temporary possession 0oan for consumption

&ailor may demand the return of he thingloaned before the e#piration of the term incase of urgent need

0ender may not demand its return before thelapse of the term agreed upon

0oss of the subect matter is suffered by thebailor since he is the owner

&orrower suffers the loss even if causede#clusively by a fortuitous event and he is nottherefore discharged from his duty to pay

+urely personal 2ot purely personal

Commodatum

Nature of Co!!odatu!

1. essentially gratuitous (otherwise, if there is compensation, it might be lease)

. temporary use of the thing loaned 3for a certain time4 (otherwise, if the bailee is notentitled to the use of the thing, it might be deposit)

3. subject matter:

a. consumable goods! if the purpose of the contract is not theconsumption of the obect, as when merely for e#hibition (5rticle 1678)

b. movable or immovable

9. bailor need not be the owner (it is sufficient that he has a possessory interest


3/21


5. purely personal

a. death of either party terminates the contract '20SS there isstipulation to the contrary

b. generally, bailee can neither lend nor lease the obect to a 7rdpersonin the absence of some agreement to that effect

c. use of the thing loaned may e#tend to the bailees household (whoare not considered 7rdpersons) except:

1. when there is a contrary stipulation

. nature of the thing forbids such use

8. enjoyment of fruits! a stipulation to ma$e use of fruits is valid, but it is neverpresumed. +; e#penses for the use and preservation of the thing loaned

. ta$e good care of the thing with the diligence of a good father of a family

3. liable for loss, even if through a fortuitous event when:

a. he devotes the thing to any purpose different from that for which ithas been loaned

b. he $eeps it longer than the period stipulated or after the

accomplishment of the use for which the commodatum has beenconstituted

c. the thing loaned has been delivered with appraisal of its value,'20SS there is a stipulation e#empting the bailee fromresponsibility in case of a fortuitous event

d. he lends or leases the thing to a third person who is not a member ofhis household

e. being able to save the thing borrowed or his own thing, he chose tosave the latter

9. doesnt answer for the deterioration of the thing loaned due only to the usethereof and without his fault

?. cannot retain the thing loaned on the ground that the bailor owes him something,even if it may be by reason of e#penses* however, he may have a right to retainthe thing loaned until he is reimbursed for damages only when the bailor,$nowing the flaws of the thing loaned, does not advise the bailee of the sameand the latter suffer damages by reason thereof

8. when there are more bailees, they are liable solidarily

O)i*ations of t#e Baior

$E%AN$ +OR RET&RN:

5. cannot demand the return of the thing loaned till after:1. the e#piration of the period stipulated or

. the accomplishment of the use for which the commodatum has been constituted

7


4/21


@A


5/21


Si!pe Loan or %utuu!

ature of !utuum

a. bilateral- borrower promise to pay is the consideration for the lenders obligation tofurnish the loan

b. no criminal liability upon failure to pay

"ubject !atter

a. fungible or consumable-depending on the intent of the parties, that the return of the thingis euivalent only and not the identical thing

b. money

c. if the transfer of ownership is on a non-fungible thing, with the obligation of the other togive things of the same $ind, uantity and uality, it is a barter

#bligations of a $ebtor

a. to pay the creditor an eual amount of money or if it is a fungible thing,the same $ind and uality even if it should change in value* it is impossible to deliver thesame $ind, its value (monetary) at the perfection of the loans hall be paid

b. to pay in the currency stipulated, if there is none, then in legal tender

Interest

-enera Rue: no interest shall be due unless it has been e#pressly stipulated in writing

E,CEPTION:1. indemnity for damages

. interest accruing from unpaid interest if udicially demanded

-en. Rue: interest due and unpaid shall 2 earn interest E,CEPTION:

1. when udicially demanded

. when there is a stipulation as to compound interest, which mustbe in writing (interest due and unpaid shall be added to the

principal obligation and the resulting total amount shall earninterest)

"f the interest is payable in -ind, its value shall be appraised at the current priceof the products or goods at the time and place of payment.

Remember, that the #sury aw is now legally inexistent such that interest ratesare no longer sub/ect to any ceiling. he rate will depend on the agreement ofthe parties.

Ifinterest is paid by mista-e, the debtor may recover as this would be solutioindebiti. %ut ifinterest is paid voluntarily because the debtor feels morallyobligated to do so, there can be no recovery in accordance with naturalobligations.

?


6/21


$EPOSIT

5 deposit is constituted from the moment a person receives a thing belong to another, with theobligation of safely $eeping it and of returning the same. "f the safe$eeping of the thingdelivered is not t#e principa purposeof the contract, there is no deposit but some othercontract.

NOTE: it is essential that the depository is not the owner of the thing deposited

Characteristics

1. real - because it is perfected only by the delivery of the subect matter &' anagreement to constitute a deposit is binding and enforceable, since it is merelyconsensual

. unilateral - if gratuitous

7. bilateral - if with compensation

$ifferentiate:

$eposit %utuu! Co!!odatu!

+rincipal purpose issafe$eeping or merecustody

+rincipal purpose isconsumption

+rincipal purpose is transfer ofuse

Can demand return of thesubect matter at will

0ender must wait untile#piration of periodgranted to debtor

ay demand return at will(+;C5;"') or only afterthe e#piration of the period oraccomplishment of the use ofthe thing subect to e#ceptions

&oth movable and immovablemay be the obect

&ut in e#traudicial deposit,only s movable (corporeal)thing may be the obect

nly money and any otherfungible thing may bethe obect

&oth movable and immovablemay be the obect

Creation of deposit

1. judicially - when an attachment or seiDure of property in litigation is ordered

2. e&trajudicially

a. /ountarydelivery is made by the will of the depositor or by two or morepersons each of whom believes himself entitled to the thing deposited* depositorhas complete freedom in choosing the depositor

b. necessary made in compliance with a legal obligation, or on the occasion ofany calamity, or by travelers in hotels and inns or by travelers with commoncarriers* depositor lac$s free choice

-enera Rue: 5 deposit is a gratuitous contract

E,CEPTIONS:

a. when there is a contrary stipulation

b. where depositary is engaged in the business of storing goods

c. where property is saved without $nowledge of the owner ininvoluntary deposit, the latter is bound to pay the former ust compensation

8


7/21


Su)1ect !atter of deposit: only corporeal (tangible) things

a. judicial - movable or immovable

b. e&trajudicial - only movable (personal)

ountary $eposit

5. 'eneral roisions:

- =epositor need not be the owner of the thing deposited, in fact the depositary cannotdispute the title of the depositor to the thing deposited.

- Ahen there are several persons claiming the thing deposited, they may deposit it toa 7rdperson who assumes the obligation to deliver it to the one whom it belongs

- he action to compel the depositors to settle their conflicting claims is an

interpeader.

- 5 contract of deposit may be entered into orally or in writing

$epositary capacitated$epositor incapacitated

$epositary incapacitated$epositor capacitated

=epositary is subect to 500 the obligations ofa depositary

=epositary does not incur the obligations of adepositary

)epositary must return the property either to:

a) the legal representative of the

incapacitated, ;

b) the depositor himself if he should acuirecapacity

)epositary, however is liable to:

a) return the thing deposited while still in his

possession* 52=

b) pay the depositor the amount by which hemay have benefited himself with the thing or itsprice subect to the right of any 7rdperson whoacuires the thing in good faith

O)i*ations of t#e $epositary

1. rimary obligation:0afe-eepingwith the depositary e#ercising over the thingdeposited the same diligence as he would e#ercise over his property* the reuireddegree of care is greater if the deposit is for compensation*

. rimary obligation: Return of the thing when reuired to:

a. the depositor* or

b. his heirs or successors* or

c. the person who may have been designated in the contract*

3. bligation not to transfer the deposit to a 3rdperson #*E00 it is stipulated

*iability for loss:

a. he transfers the deposit with a 7rdperson without the authority althoughthere is no negligence on his part and the 7 rdperson*

b. he deposits the thing with a 7rdperson who is manifestly careless orunfit although authoriDed, even in the absence of negligence* or

E


8/21


c. the thing is lost through the negligence of his employees whether thelatter are manifestly careless or not

- &' he is e#empt from liability if the thing is lost without the negligence of the 7rdperson with whom he was allowed to deposit the thing F such 7 rdperson is not3manifestly careless or unfit4

9. bligation not to change the way or manner of the deposit

- &' under the circumstances, he may reasonably presume that the depositor wouldconsent to the change if he $new of the facts of the situation* however, before suchchange, he must notify the depositor, unless delay would cause danger.

?. bligation to things deposited earning interest:

a. collect capital and interest as it becomes due

b. ta$e steps as may be necessary to preserve its value F the right correspondingto it*

#+,: his doesnt apply to contract for the rent of safety deposit bo#esbecause such is a special $ind of deposit.

8. bligation not to commingle things deposited if stipulated

- he /; is that the depositary is permitted to commingle articles of the same $indand uality* the various depositors shall then own the entire mass in common and inproportion.

E. bligation not to ma-e use of the thing deposited

-'nless authoriDed. therwise, the depositary shall be liable for damages. &' hemay ma$e use of the thing deposited even if unauthoriDed where such use isnecessary, but in such case, the use is limited for that purpose only.

1. bligation to return the products, accessories and accessions2

. bligation to pay interest on sums converted to personal use

- "f money is deposited, the depositary has no right to ma$e used thereof andtherefore he is not liable to pay interest. &ut if he be in delay or he used the moneywithout permission, he shall be liable for interest as indemnity on the sums he hasapplied to his own use from the day on which he did so, and those which he still

owes after the e#tinguishment of the deposit.

45. bligation of the depositary where the thing deposited is delivered closed and sealed:

i. return it in the same condition, closed and sealed*

ii. pay damages should the seal or loc$ be bro$en through his fault which ispresumed unless proved otherwise* and

iii. $eep the secret of the deposit when the seal or loc$ is bro$en, with or without hisfault

#+,: 5s for the value of the thing deposited, the statement of the depositorshall be accepted when the forcible opening is imputable to the depositary,should there be no proof to the contrary. 6owever, the courts may pass upon thecreditability of the depositor with respect to the value claimed by him.

#+,: 'he depositary is /ustified in opening the sealed or loc-ed thingswhen:a. there is presumed authority! when the $ey has been delivered to him

G


9/21


b. there is necessity! when instructions of the depositor as regards thedeposit cannot be e#ecuted without opening the bo# or receptacle

Ot#er I!portant %atters Concernin* a $epositary

4. "f permission to use is given, which is not presumed but must be proved, the effects are:

a. non7consumable - the contract loses the character of a deposit and acuiresthat of a commodatum '20SS safe$eeping is still the principal purpose of thecontract*

b. money or consumable - the contract is converted to a simple loan or mutuum.

8#' if safe-eeping is still the principal purpose of the contract, it is an irregulardeposit

Irre*uar $eposit %utuu!ay be demanded at will by the irregular

depositor for whose benefit thedeposit has been constituted

0ender is bound by the provision of thecontract and cannot see$ restitution untilthe time for payment, as provided in thecontract has arisen

nly benefit is that which accrues to thedepositor

"f with interest, benefit if both parties

=epositor has preference over othercreditors

2o preference

9. "nstances when depositary is liable for the loss of the thing through a fortuitous event:

a. if it so stipulated

b. if he uses the thing without the depositors permission

c. if he delays its return

d. if he allows others to use it, even though he himself may have been authoriDed touse the same

3. ixed, savings and current deposits of money in ban-s and similar institutions shall begoverned by the provisions concerning simple loan.

;. )epositor need not prove his ownership of the thing deposited.


10/21


- ach one of the solidary depositors may do whatever may be useful to the othersbut not anything which may be preudicial to the latter

- =epositary may return the thing to any of the solidary depositors unless a demand,udicial or e#traudicial, for its return has been made by one of them in which casedelivery should be made to him.

/. +o 0hom must the return be made

a. depositors, heirs, successors, or person who may have been designated in thecontract

b. if depositor was incapacitated or becomes incapacitated, the thing must bereturned to his legal representative

. here to return

a. at the place agreed upon by the parties, with the depositor bearing thetransportation e#penses*

b. in the absence of stipulation, at the place where the thing deposited might beeven if it should not be the same place where the original deposit was madeprovided the transfer was accomplished without malice on the depositarys part.

. +ime to return

-R:upon demand of the depositor, even though a period has been fi#ed* 8#' if thedeposit is for compensation,the depositary is entitled to the compensationcorresponding to the entire period.

E,CEPTION:

attachment - when the thing is udicially attached

opposition - should the depositary have been notified of the opposition of a 7rdperson to the return or removal of the thing

1H. ;ight of depositary to return the thing deposited notwithstanding a fi#ed period

(does *' apply if the deposit is for valuable consideration in which case, the depositary isbound by the period:

a. when the deposit is gratuitous

b. when there are ustifiable reasons

#+,: "f the depositor refuses to receive the thing, the depositary may deposit thething at the disposal of udicial authority.)

11. "f the thing is lost by force ma/eure or government order and money or another thing isreceived in its place, the depositary shall deliver the sum of thing to the depositor.

1.4lienation by depositarys heir(depositary dies and the obect of the deposit is leftwith his heir who sells it):

a. =ood faith:

a.1 return of the price receiveda. assign the right to collect the same if it has not been paid

#+,:"f purchaser was in bad faith, the depositor may bring an action for recoveryagainst him.

1H


11/21


O)i*ations of t#e $epositor

1. obligation to pay e&penses of preseration

a. deposit is gratuitous - obliged to reimburse a depositary for e#penses ofpreservation whether ordinary or e#traordinary

b. deposit for compensation - depositary bears the e#penses of preservationbecause they are deemed included in the compensation

2. obligation to pay losses suffered due to the character of the thing deposited6

&NLESS:

a. depositor was not aware or was not e#pected to $now the dangerous characterof the thing*

b. depositor notified the depositary of the dangerous character*

c. depositary was aware of the dangerous character without advice from thedepositor*

Ot#er %atters Concernin* a $epositor

4. )epositary has a right to retain the thing in pledge until full payment of what may be duehim by reason of the deposit

2. 4 deposit is e&tinguished:

a. upon the loss or deterioration of the thing deposited*

b. upon the death of the depositary, 20> in gratuitous deposits*

c. other provisions in the Civil Code (novation, merger, etc.)

ecessary $eposit

"n compliance with a legal obligation (governed by the law establishingit, and in case of deficiency, the rules on voluntary deposit e.g.5rts. ?7G, ?G8 and 1H9)

ade on the occasion of any calamity (governed by the rules onvoluntary deposit and 5rt. 18G)

=eposit by travelers (transients) in hotels and inns:

a. +o be liable as depositaries6 the follo0ing elements must concur:

1. they have been previously informed about the effects brought by theguests* and

. the latter have ta$en the precautions prescribed regarding theirsafe$eeping

b. ,&tent of liability:includes those damaged in hotel anne#es e.g. vehicles in hotelsgarages

c. hen is a hotel78eeper liable9

1. the loss or inury is caused by his servants or employees as well as bystrangers,provided that notice has been given and proper precautions ta$en*

11


12/21


. the loss is caused by the act of the thief or robber done without the use ofarms and irresistible force of in this case, the hotel-$eeper is apparentlynegligent

d. hen is a hotel78eeper not liable9

1. the loss or inury is caused by force maeure li$e flood, fire, theft orrobbery by a stranger (not by hotel-$eepers servant or employee) with theuse of arms or irresistible force, etc., unless he is guilty of fault or negligencein failing to provide against the loss or inury from his cause*

. the loss is due to the acts of the guests, his family, servants or visitors*

7. the loss arises from the character of the things brought into the hotel

e. Posting of notices whereby the responsibility of the hotel7-eeper as set forth in !,8, , and ) above is suppressed or diminished shall be >").

f. 'he hotel7-eeper has a right to retain the things brought into the hotel by the guest,as a security for credits on account of lodging, and supplies usually furnished tohotel guests. "n addition, non7payment constitutes estafa.

$eposit )y passen*ers wit# co!!on carriers:'he rules on !, , ) and E above

apply.

"euestration or ;udicial $eposit

Iudicial deposit or seuestration ta$es place when an attachment or seiDure of property

in litigation is ordered by a court.

O)i*ations of depositary 'appointed )y t#e Court( of se3uestered property

a. to ta$e care or the property with the diligence of a good father of a family

b. cannot be relieved of his responsibility until the litigation is ended or the court soorders

!s for matters not provided for in this ode, the Rules of

ourt may be applicable.

4udicia E5tra1udicia

Aill of the court Aill of the parties (contract)

Security and to secure the right of a party torecover in case of a favorableudgment

Custody and safe$eeping of the thing

ovable or immovable nly movable

5lways onerous ay be compensated or not, but generallygratuitous

"n the behalf of the person who, by theudgment, has a right

"n behalf of the depositor or 7rdpersondesignated

1


13/21


14/21


hat terms may be inserted9!*+ other terms or conditionE,CEPT:a. those contrary to this 5ct (e.g. e#emption from liability for misdelivery in Sec. 1H, not

giving statutory notice in case of sale of goods in Sec. 77 and 79)

b. an e#emption from liability and negligence

c. those contrary to law, morals, good customs, public order or public policy$efinitions

a. negotiable receipt 7 receipt in which it is stated that the goods received will bedelivered to the bearer or to the order of any person named in such receipt

b. non7negotiable receipt 7 receipt in which it is stated that the goods received will bedelivered to the depositor or to any other specified person

#+,:1. a provision in a negotiable receipt that it is non-negotiable is


15/21


8#' a warehouseman may still refuse delivery on the grounds of some lawful excuseli-e:

a. Sec. 1H1. he has been reuested by the person lawfully entitled to the goods

not to ma$e delivery*

. he has information that the delivery about to be made was to one notlawfully entitled to the goods*

b. Sec. 18: 6e has acuired title to the goods which was derived from1. transfer made by the depositor at the time of the deposit for storage

or subseuent thereto

. the warehousemans lien

c. Sec. 1G: "f there are several claimants to the goods

d. Sec. 1: "f the goods were lost and he had no fault

e. Sec. 78: @e has already lawfully sold the goods

ersons to 0hom the goods must be deliered

1. +ersons lawfully entitled to the possession of the goods or its agent

. +ersons entitled to deliver under:

a. a non-negotiable receipt* or

b. with written authority

7. person in possession of a negotiable receipt (which was lawfully negotiated)

#+,: a warehouseman does 2 have a cause of action against a person to whomhe misdelivered the thing '20SS the depositor sues him.

Acts for w#ic# a ware#ouse!an is ia)e

(1) ailure to stamp 3duplicate4 on copies of a negotiable receipt (Sec. 8 and 1?)

Ahen more than one negotiable receipts are issued for the same goods, the word

3duplicate4 must be plainly placed by the warehouseman upon the face of every suchreceipt e#cept the 1st.

"n such case, the warehouseman warrants:

a. that the duplicate is an accurate copy of the original receipt

b. such original receipt is uncancelled at the date of the issue of theduplicate

#+,: he duplicate imposes no other liability upon the warehouseman.

() ailure to place 3non-negotiable4 on a non-negotiable receipt (Sec. E)

(7) isdelivery of the goods (Sec. 1H)

a. 'o one not lawfully entitled to possession

1?


16/21


- 0iable for conversion (unauthoriDed assumption and e#ercise of the right ofownership over goods belonging to another through alteration or the e#clusion ofthe owners right)

b. 'o a person entitled to delivery under a non7negotiable receipt or writtenauthoriCation R person in possession of a negotiable receipt

- Still liable for conversion if:

1. prior to delivery, he ad been reuested 2 to ma$e such delivery

. he had received notice of the adverse claim or title of a 7rdperson

(9) ailure to effect cancellation of a negotiable receipt upon delivery of the goods (Sec. 11)

- his is applicable 20> to negotiable receipts but 2 to a situation where there was avalid sale in accordance with Sec. 78

a. ?hen the goods are delivered already: ailure to cancel will ma$e him liable toany one who purchased for value in good faith such receipt

b. ?hen only some of the goods were delivered: ailure to cancel or to state plainlyin the receipt that some goods were delivered will ma$e him liable to any onewho purchased for value in good faith such receipt

(?) "ssuing receipt for non-e#isting goods or misdescribed goods (Sec. H):

': a warehouseman is under obligation to deliver the identical property stored withhim and if he fails to do so he is liable.

,&ception: if the description consists merely of mar$s or labels upon the goods orupon the pac$ages containing them, etc., the warehouseman is 2 liableeven if the goods are not of the $ind as indicated in the mar$s or labels

(8) "n case of lost or destroyed receipts (Sec. 19)

;emember that a warehouseman must deliver to the one who has the receipt but if such

was lost, a co!petent courtmay order the delivery of the goods only:

a. upon proof of the loss or destruction of the receipt* 52=

b. upon giving of a bond with sufficient securities

#+,: the warehouseman is still liable to a holder of the receipt for value without noticesince the warehouseman can secure himself in the bond given.

(E) ailure to ta$e care of the goods (Sec. 1)

(G) ailure to give notice in case of sales of goods to satisfy his lien (Sec. 77) or because thegoods are perishable and haDardous (Sec. 79)

Effects of ALTERE$ RECEIPTS

a.4lteration immaterial:whether fraudulent or not, authoriDed or not, the warehouseman isliable on the altered receipt according to its original tenor*

b.4lteration material:but it was authoriDed, the warehouseman is liable according to the termsof the receipts as altered*

c. !aterial alteration innocently made: though unauthoriDed, the warehouseman is liable onthe altered receipt according to its original term*

18


17/21


d. !aterial alteration fraudulently made:warehouseman is liable according to the originaltenor to a:

1. purchaser of the receipt for value without notice* and

. to the alterer and subseuent purchasers with notice ( &' his liabilityis limited only to delivery as he is e#cused from any other liability)

K ven a fraudulent alteration cannot divest the title of the owner of stored goods and thewarehouseman is liable to return them to the owner. &' a bona fideholder acuires no rightto the goods under a negotiable receipt which has been stolen or lost or which the indorsementhas been forged.

6it# Re*ard to Owners#ip

a. wnership is not a defense for refusal to deliver

he warehouseman cannot refuse to deliver the goods on the ground that he has

acuired title or right to the possession of it unless such is derived:

1. directly or indirectly from a transfer made by the depositor at the time ofthe deposit for storage or subseuent thereto*

. from the warehousemans lien

b. !dverse title of a 3rdperson is not a defense for refusal to deliver by a warehousemanto his bailor on demand E&EP':

1. o persons to whom the goods must be livered (Sec. 6)

. o the person who wins in the interpleader case (Sec. 1E)

7. o the person he finds to be entitled to the possession after investigation (Sec.1G)

9. o the buyer in case there was a valid sale of the goods (Sec. 78)

$uty of ware#ouse!an w#en t#ere are se/era cai!ants

+he 0arehouseman may either:

a. "nvestigate and determine within a reasonable time the validity of the claims, and deliverto the person whom he finds is entitled to the possession of the goods

Effect: @e is 2 e#cused from liability in case he ma$es a mista$e

b. @e may bring a complaint in interpleader

Effect: a) he will be relieved from liability in delivering the goods to the person whomthe court finds to have better right*

b) he is liable for refusal to deliver to the rightful claimant when it is re3uiredtohave an interpleader*

c. @e may not do (a) and (b)

Effect: @e will be liable after a lapse of a reasonable time, of conversion as of the dateof the original demand for the goods.

#+,:his does 2 apply to cases where the warehouseman himself ma$es a claim tothe goods.

1E


18/21


Co!in*in* of deposited *oods

': 5 warehouseman may not co-mingle goods belonging to different depositors.

,&ception: "n case of fungible goods of the same $ind and grade provided:

a. he is authoriDed by agreement

b. he is authoriDed by custom ,ffects:

a. each depositor shall own the entire mass in common and entitled to his portion

b. warehouseman is severally liable to each depositor for the care and redelivery oftheir portion as if the goods had been $ept separate

Attac#!ent or e/y or ne*otia)e receipts

5 warehouseman has the obligation to hold the goods for the owner or for the person to

whom the negotiable receipt has been duly negotiated.

'herefore, the goods cannot be attached or levied upon under an execution #*E00:

a. the document be first surrendered* orb. the negotiation is enoined, orc. the document is impounded by the court

'he warehouseman cannot be compelled to deliver the goods until:

a. the receipt is surrendered to him*b. it is impounded by the court

#+,: his provision does 2 apply if the person depositing is 2 the owner of thegoods or one who has not the right to convey title to the goods binding upon the owner.

Re!edy of creditor w#ose de)tor owns a ne*otia)e receipt

5ttachment of the negotiable receipt (2 the goods)

#+,: the goods themselves cannot readily be attached or levied upon by ordinary legalprocess

E5tent of ware#ouse!an8s ien

a. la0ful charges for1. storage, and. preservation of the goods

b. la0ful claims for1. money advanced ?. labor . interest 8. weighing7. insurance E. cooperating9. transportation

c. other charges and expenses in relation to such goods

d. reasonable charges and expenses for notice and advertisements of sale

e. sale of the goods where defaults has been made in satisfying the lien

E5tent of t#e ien w#en a ne*otia)e receipt #as )een issued

a. charges for storage and preservation of the goods

1G


19/21


b. other charges e5pressyenumerated (from b, c, d and e above) although the amount is2 stated

#+,: or claims not specified, the warehouseman sharespro ratawith the other creditorsof the depositor the balance of the proceeds of the sale for the satisfaction of the claims.

-oods su)1ect to iena. goods of the depositor who is liable to the warehouseman as debtor wherever such

goods are deposited*

b. goods of other persons stored by the depositor who is liable to the warehouseman asdebtor with authority to ma$e a valid pledge

#+,: 5 warehouseman has 2 lien on goods belonging to another and stored by astranger in fraud of the true owners right.

T#e ien !ay )e ost t#rou*#:

a. voluntarily surrendering possession of goods - constitutes a waiver or abandonment

5 warehouseman may 2 claim a lien on other goods of the same depositor forunpaid charges on the goods surrendered if the goods were delivered to him underdifferent receipts.

b. wrongfully refusing to deliver the goods to a person who holds the receipt or thedepositor upon )E$!*) accompanied with:

1. an offer to satisfy the warehousemans lien (because a warehouseman mayrefuse delivery until his lien is satisfied)

. an offer to surrender the receipta. for the protection of the warehouseman and to avoid criminal liabilityb. this is subect to waiver

7. an offer to sign when the goods are delivered, an ac$nowledgment that theyhave been delivered

Re!edies for a ware#ouse!an

1. ven if no lien, all remedies allowed by law to a creditor against his debtor for collection ofcharges*

. &y refusing to deliver the goods until his lien is satisfied*

7. 5ll remedies allowed by law for the enforcement of a lien against personal property and

recovery of any deficiency in case it e#ists after the sale of the property*

9. &y causing the e#traudicial sale of the property and applying the proceeds to the value ofthe lien

#C,"" $ICI4* "4*,:

5. ?ritten notice to the person on whose account the goods are held or to persons who claiman interest in the goods containing:

a. itemiDed statement of warehousemans lien showing the sum due and when itbecame due

b. brief description of the goods

c. a demand that a claim be paid on or before a day mentioned, not less than 1H daysfrom:

1. delivery of notice if personally delivered. the time when notice should reach its destination if sent by mail

16


20/21


d. statement that if the claim is not paid, the goods will be advertised for sale and thensold at a specified time and place

&. !fter the time for payment of the claim if the notice has elapsed, the sale will be advertisedstating:

a. a description of the goods to be soldb. the name of the owner or person on whose account the goods were heldc. time and place of the sale

C. Publication: a. if there is a newspaper published in the place of sale: once a wee$ for consecutive

wee$s and the sale not held less than 1? days from the time of the 1 stpublication

b. if there is no newspaper: posted at least 1H days before the sale in not less than 8conspicuous places in the place of sale

=. 0ale itself in: a. place where the lien was acuired

b. if such place is manifestly unsuitable for the purpose, at the nearest suitable place

. rom the proceeds of the sale: a. the warehouseman shall satisfy his lien

b. including the reasonable charges of notice, advertisement and sale

c. the balance shall be held by the warehouseman and delivered on demand to theperson to whom he should deliver it

. 5ny time before the goods are sold, any person may pay the warehouseman for his lien andthe other e#penses. he warehouseman shall deliver the goods to that person if he is

entitled under this 5ct, to the possession of the goods on payment of the charges.therwise, the warehouseman shall retain ownership of the goods.

?. ?ith regard to perishable and haCardous goodsAarehouseman will give notice to owner or person in whose name the goods are stored:

a. to satisfy his lienb. to remove the goodsc. failure to do a Fb will give the warehouseman authority to sell the goods without

advertisingd. if sale is not possible, he may dispose of the goods in any lawful manner without

liabilityK +roceeds of the sale shall be disposed of in accordance with the +;CSS in the sale of

the goods.

8. Effects of salea. warehouseman is 2 liable for non-delivery even if the receipt was given for the goods

when they were deposited be negotiated

b. when the sale was made without the publication reuired and before the time specifiedby law, such sale is void and the purchaser of the goods acuires no title in them

Ne*otiation and Transfer of Receipts

Ne*otia)e receipts ne*otia)e )y dei/ery

1. if the goods are deliverable to the bearer* or

. when indorsed in blan$* or

7. person to whose order the goods are delivered or by a subseuent indorseeindorsed it to bearer

H


21/21


-ENERAL BON$E$ 6ARE7O&SE LA6

!ny warehouseman receiving commodities for (a% storage2 (b% milling2 (c% co7mingling

must:a. obtain prior license from the &ureau of Commerce

b. file a bond in an amount euivalent to 77 1%7 L of the capacity of the warehouse againstwhich bond depositors may sue directly

c. open to the public, no discrimination allowed

d. liable for double mar$et value should he accept goods in e#cess of the capacity ofwarehouse if goods are damaged or destroyed

2ote: for palay and corn license, a bond with the 2ational /rains 5uthority is reuired*

also an insurance cover is reuired.

Date post:	03-Jun-2018
Category:	Documents
Upload:	bubblingbrook
View:	225 times
Download:	0 times

Mercantile Law} Credit Trans} Memory Aid} Made 2002} by Ateneo} 21 Pages

Documents