ACT NO.

2137 THE WAREHOUSE RECEIPTS LAW (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 reasonably careful
I THE ISSUE OF WAREHOUSE RECEIPTS man would exercise in regard to similar goods of his own.

Section 1. Persons who may issue receipts. Warehouse receipts may be Sec. 4. Definition of non-negotiable receipt. A receipt in which it is stated
issued by any warehouseman. that the goods received will be delivered to the depositor or to any other
specified person, is a non-negotiable receipt.
Sec. 2. Form of receipts; essential terms. Warehouse receipts need not be
in any particular form but every such receipt must embody within its Sec. 5. Definition of negotiable receipt. A receipt in which it is stated that
written or printed terms: the goods received will be delivered to the bearer or to the order of any
person named in such receipt is a negotiable receipt.
(a) The location of the warehouse where the goods are stored,
No provision shall be inserted in a negotiable receipt that it is non-
(b) The date of the issue of the receipt, negotiable. Such provision, if inserted shall be void.
(c) The consecutive number of the receipt, Sec. 6. Duplicate receipts must be so marked. When more than one
negotiable receipt is issued for the same goods, the word duplicate shall
(d) A statement whether the goods received will be delivered to the bearer,
be plainly placed upon the face of every such receipt, except the first one
to a specified person or to a specified person or his order,
issued. A warehouseman shall be liable for all damages caused by his
(e) The rate of storage charges, failure so to do to any one who purchased the subsequent receipt for value
supposing it to be an original, even though the purchase be after the
(f) A description of the goods or of the packages containing them, delivery of the goods by the warehouseman to the holder of the original
receipt.
(g) The signature of the warehouseman which may be made by his
authorized agent, Sec. 7. Failure to mark non-negotiable. A non-negotiable receipt shall
have plainly placed upon its face by the warehouseman issuing it non-
(h) If the receipt is issued for goods of which the warehouseman is owner, negotiable, or not negotiable. In case of the warehousemans failure so
either solely or jointly or in common with others, the fact of such to do, a holder of the receipt who purchased it for value supposing it to be
ownership, and negotiable, may, at his option, treat such receipt as imposing upon the
warehouseman the same liabilities he would have incurred had the receipt
(i) A statement of the amount of advances made and of liabilities incurred been negotiable.
for which the warehouseman claims a lien. If the precise amount of such
advances made or of such liabilities incurred is, at the time of the issue of, This section shall not apply, however, to letters, memoranda, or written
unknown to the warehouseman or to his agent who issues it, a statement acknowledgment of an informal character.
of the fact that advances have been made or liabilities incurred and the
purpose thereof is sufficient. II OBLIGATIONS AND RIGHTS OF WAREHOUSEMEN UPON THEIR RECEIPTS

A warehouseman shall be liable to any person injured thereby for all Sec. 8. Obligation of warehousemen to deliver. A warehouseman, in the
damages caused by the omission from a negotiable receipt of any of the absence of some lawful excuse provided by this Act, is bound to deliver the
terms herein required. goods upon a demand made either by the holder of a receipt for the goods
or by the depositor; if such demand is accompanied with:
Sec. 3. Form of receipts. What terms may be inserted. A warehouseman
may insert in a receipt issued by him any other terms and conditions (a) An offer to satisfy the warehousemans lien;
provided that such terms and conditions shall not:
(b) An offer to surrender the receipt, if negotiable, with such indorsements
(a) Be contrary to the provisions of this Act. as would be necessary for the negotiation of the receipt; and
(c) A readiness and willingness to sign, when the goods are delivered, an for value in good faith such receipt, for failure to deliver the goods to him,
acknowledgment that they have been delivered, if such signature is whether such purchaser acquired title to the receipt before or after the
requested by the warehouseman. delivery of the goods by the warehouseman.

In case the warehouseman refuses or fails to deliver the goods in Sec. 12. Negotiable receipts must be cancelled or marked when part of
compliance with a demand by the holder or depositor so accompanied, the goods delivered. Except as provided in section thirty-six, where a
burden shall be upon the warehouseman to establish the existence of a warehouseman delivers part of the goods for which he had issued a
lawful excuse for such refusal. negotiable receipt and fails either to take up and cancel such receipt or to
place plainly upon it a statement of what goods or packages have been
Sec. 9. Justification of warehouseman in delivering. A warehouseman is delivered, he shall be liable to any one who purchases for value in good
justified in delivering the goods, subject to the provisions of the three faith such receipt, for failure to deliver all the goods specified in the
following sections, to one who is: receipt, whether such purchaser acquired title to the receipt before or after
the delivery of any portion of the goods by the warehouseman.
(a) The person lawfully entitled to the possession of the goods, or his
agent; Sec. 13. Altered receipts. The alteration of a receipt shall not excuse the
warehouseman who issued it from any liability if such alteration was:
(b) A person who is either himself entitled to delivery by the terms of a
non-negotiable receipt issued for the goods, or who has written authority (a) Immaterial,
from the person so entitled either indorsed upon the receipt or written
upon another paper; or (b) Authorized, or

(c) A person in possession of a negotiable receipt by the terms of which the (c) Made without fraudulent intent.
goods are deliverable to him or order, or to bearer, or which has been
indorsed to him or in blank by the person to whom delivery was promised If the alteration was authorized, the warehouseman shall be liable
by the terms of the receipt or by his mediate or immediate indorser. according to the terms of the receipt as altered. If the alteration was
unauthorized but made without fraudulent intent, the warehouseman shall
Sec. 10. Warehousemans liability for misdelivery. Where a be liable according to the terms of the receipt as they were before
warehouseman delivers the goods to one who is not in fact lawfully entitled alteration.
to the possession of them, the warehouseman shall be liable as for
conversion to all having a right of property or possession in the goods if he Material and fraudulent alteration of a receipt shall not excuse the
delivered the goods otherwise than as authorized by subdivisions (b) and warehouseman who issued it from liability to deliver according to the terms
(c) of the preceding section, and though he delivered the goods as of the receipt as originally issued, the goods for which it was issued but
authorized by said subdivisions, he shall be so liable, if prior to such shall excuse him from any other liability to the person who made the
delivery he had either: alteration and to any person who took with notice of the alteration. Any
purchaser of the receipt for value without notice of the alteration shall
(a) Been requested, by or on behalf of the person lawfully entitled to a acquire the same rights against the warehouseman which such purchaser
right of property or possession in the goods, not to make such deliver; or would have acquired if the receipt had not been altered at the time of
purchase.
(b) Had information that the delivery about to be made was to one not
lawfully entitled to the possession of the goods.

Sec. 11. Negotiable receipt must be cancelled when goods delivered.

Except as provided in section thirty-six, where a warehouseman delivers
goods for which he had issued a negotiable receipt, the negotiation of
which would transfer the 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
Sec. 14. Lost or destroyed receipts. Where a negotiable receipt has been the depositor or person claiming under him against the warehouseman for
lost or destroyed, a court of competent jurisdiction may order the delivery failure to deliver the goods according to the terms of the receipt.
of the goods upon satisfactory proof of such loss or destruction and upon
the giving of a bond with sufficient sureties to be approved by the court to Sec. 20. Liability for non-existence or misdescription of goods. A
protect the warehouseman from any liability or expense, which he or any warehouseman shall be liable to the holder of a receipt for damages
person injured by such delivery may incur by reason of the original receipt caused by the non-existence of the goods or by the failure of the goods to
remaining outstanding. The court may also in its discretion order the correspond with the description thereof in the receipt at the time of its
payment of the warehousemans reasonable costs and counsel fees. issue. If, however, the goods are described in a receipt merely by a
statement of marks or labels upon them or upon packages containing them
The delivery of the goods under an order of the court as provided in this or by a statement that the goods are said to be goods of a certain kind or
section, shall not relieve the warehouseman from liability to a person to that the packages containing the goods are said to contain goods of a
whom the negotiable receipt has been or shall be negotiated for value certain kind or by words of like purport, such statements, if true, shall not
without notice of the proceedings or of the delivery of the goods. make liable the warehouseman issuing the receipt, although the goods are
not of the kind which the marks or labels upon them indicate or of the kind
Sec. 15. Effect of duplicate receipts. A receipt upon the face of which the they were said to be by the depositor.
word duplicate is plainly placed is a representation and warranty by the
warehouseman that such receipt is an accurate copy of an original receipt Sec. 21. Liability for care of goods. A warehouseman shall be liable for
properly issued and uncanceled at the date of the issue of the duplicate, any loss or injury to the goods caused by his failure to exercise such care in
but shall impose upon him no other liability. regard to them as reasonably careful owner of similar goods would
exercise, but he shall not be liable, in the absence of an agreement to the
Sec. 16. Warehouseman cannot set up title in himself . No title or right to contrary, for any loss or injury to the goods which could not have been
the possession of the goods, on the part of the warehouseman, unless such avoided by the exercise of such care.
title or right is derived directly or indirectly from a transfer made by the
depositor at the time of or subsequent to the deposit for storage, or from Sec. 22. Goods must be kept separate. Except as provided in the
the warehousemans lien, shall excuse the warehouseman from liability for following section, a warehouseman shall keep the goods so far separate
refusing to deliver the goods according to the terms of the receipt. from goods of other depositors and from other goods of the same depositor
for which a separate receipt has been issued, as to permit at all times the
Sec. 17. Interpleader of adverse claimants. If more than one person identification and redelivery of the goods deposited.
claims the title or possession of the goods, the warehouseman may, either
as a defense to an action brought against him for non-delivery of the goods Sec. 23. Fungible goods may be commingled if warehouseman authorized.
or as an original suit, whichever is appropriate, require all known claimants If authorized by agreement or by custom, a warehouseman may mingle
to interplead. fungible goods with other goods of the same kind and grade. In such case,
the various depositors of the mingled goods shall own the entire mass in
Sec. 18. Warehouseman has reasonable time to determine validity of common and each depositor shall be entitled to such portion thereof as the
claims. If someone other than the depositor or person claiming under him amount deposited by him bears to the whole.
has a claim to the title or possession of goods, and the warehouseman has
information of such claim, the warehouseman shall be excused from Sec. 24. Liability of warehouseman to depositors of commingled goods.
liability for refusing to deliver the goods, either to the depositor or person The warehouseman shall be severally liable to each depositor for the care
claiming under him or to the adverse claimant until the warehouseman has and redelivery of his share of such mass to the same extent and under the
had a reasonable time to ascertain the validity of the adverse claim or to same circumstances as if the goods had been kept separate.
bring legal proceedings to compel claimants to interplead.
Sec. 25. Attachment or levy upon goods for which a negotiable receipt has
Sec. 19. Adverse title is no defense except as above provided. Except as been issued. If goods are delivered to a warehouseman by the owner or
provided in the two preceding sections and in sections nine and thirty-six, by a person whose act in conveying the title to them to a purchaser in
no right or title of a third person shall be a defense to an action brought by good faith for value would bind the owner, and a negotiable receipt is
issued for them, they can not thereafter, while in the possession of the Sec. 30. Negotiable receipt must state charges for which the lien is
warehouseman, be attached by garnishment or otherwise, or be levied claimed. If a negotiable receipt is issued for goods, the warehouseman
upon under an execution unless the receipt be first surrendered to the shall have no lien thereon except for charges for storage of goods
warehouseman or its negotiation enjoined. The warehouseman shall in no subsequent to the date of the receipt unless the receipt expressly
case be compelled to deliver up the actual possession of the goods until enumerated other charges for which a lien is claimed. In such case, there
the receipt is surrendered to him or impounded by the court. shall be a lien for the charges enumerated so far as they are within the
terms of section twenty-seven although the amount of the charges so
Sec. 26. Creditors remedies to reach negotiable receipts. A creditor enumerated is not stated in the receipt.
whose debtor is the owner of a negotiable receipt shall be entitled to such
aid from courts of appropriate jurisdiction, by injunction and otherwise, in Sec. 31. Warehouseman need not deliver until lien is satisfied. A
attaching such receipt or in satisfying the claim by means thereof as is warehouseman having a lien valid against the person demanding the
allowed at law or in equity in these islands in regard to property which can goods may refuse to deliver the goods to him until the lien is satisfied.
not readily be attached or levied upon by ordinary legal process.
Sec. 32. Warehousemans lien does not preclude other remedies.
Sec. 27. What claims are included in the warehousemans lien. Subject to Whether a warehouseman has or has not a lien upon the goods, he is
the provisions of section thirty, a warehouseman shall have a lien on goods entitled to all remedies allowed by law to a creditor against a debtor for the
deposited or on the proceeds thereof in his hands, for all lawful charges for collection from the depositor of all charges and advances which the
storage and preservation of the goods; also for all lawful claims for money depositor has expressly or impliedly contracted with the warehouseman to
advanced, interest, insurance, transportation, labor, weighing, coopering pay.
and other charges and expenses in relation to such goods, also for all
reasonable charges and expenses for notice, and advertisements of sale, Sec. 33. Satisfaction of lien by sale. A warehousemans lien for a claim
and for sale of the goods where default had been made in satisfying the which has become due may be satisfied as follows:
warehousemans lien.
(a) An itemized statement of the warehousemans claim, showing the sum
Sec. 28. Against what property the lien may be enforced. Subject to the due at the time of the notice and the date or dates when it becomes due,
provisions of section thirty, a warehousemans lien may be enforced:
(b) A brief description of the goods against which the lien exists,
(a) Against all goods, whenever deposited, belonging to the person who is
liable as debtor for the claims in regard to which the lien is asserted, and (c) A demand that the amount of the claim as stated in the notice of such
further claim as shall accrue, shall be paid on or before a day mentioned,
(b) Against all goods belonging to others which have been deposited at any not less than ten days from the delivery of the notice if it is personally
time by the person who is liable as debtor for the claims in regard to which delivered, or from the time when the notice shall reach its destination,
the lien is asserted if such person had been so entrusted with the according to the due course of post, if the notice is sent by mail,
possession of goods that a pledge of the same by him at the time of the
deposit to one who took the goods in good faith for value would have been (d) A statement that unless the claim is paid within the time specified, the
valid. goods will be advertised for sale and sold by auction at a specified time
and place.
Sec. 29. How the lien may be lost. A warehouseman loses his lien upon
goods: In accordance with the terms of a notice so given, a sale of the goods by
auction may be had to satisfy any valid claim of the warehouseman for
(a) By surrendering possession thereof, or which he has a lien on the goods. The sale shall be had in the place where
the lien was acquired, or, if such place is manifestly unsuitable for the
(b) By refusing to deliver the goods when a demand is made with which he purpose of the claim specified in the notice to the depositor has elapsed,
is bound to comply under the provisions of this Act. and advertisement of the sale, describing the goods to be sold, and stating
the name of the owner or person on whose account the goods are held,
and the time and place of the sale, shall be published once a week for two
consecutive weeks in a newspaper published in the place where such sale Sec. 36. Effect of sale. After goods have been lawfully sold to satisfy a
is to be held. The sale shall not be held less than fifteen days from the time warehousemans lien, or have been lawfully sold or disposed of because of
of the first publication. If there is no newspaper published in such place, their perishable or hazardous nature, the warehouseman shall not
the advertisement shall be posted at least ten days before such sale in not thereafter be liable for failure to deliver the goods to the depositor or
less than six conspicuous places therein. owner of the goods or to a holder of the receipt given for the goods when
they were deposited, even if such receipt be negotiable.
From the proceeds of such sale, the warehouseman shall satisfy his lien
including the reasonable charges of notice, advertisement and sale. The III NEGOTIATION AND TRANSFER OF RECEIPTS
balance, if any, of such proceeds shall be held by the warehouseman and
delivered on demand to the person to whom he would have been bound to Sec. 37. Negotiation of negotiable receipt of delivery. A negotiable receipt
deliver or justified in delivering goods. may be negotiated by delivery:

At any time before the goods are so sold, any person claiming a right of (a) Where, by terms of the receipt, the warehouseman undertakes to
property or possession therein may pay the warehouseman the amount deliver the goods to the bearer, or
necessary to satisfy his lien and to pay the reasonable expenses and
liabilities incurred in serving notices and advertising and preparing for the (b) Where, by the terms of the receipt, the warehouseman undertakes to
sale up to the time of such payment. The warehouseman shall deliver the deliver the goods to the order of a specified person, and such person or a
goods to the person making payment if he is a person entitled, under the subsequent indorsee of the receipt has indorsed it in blank or to bearer.
provision of this Act, to the possession of the goods on payment of charges
Where, by the terms of a negotiable receipt, the goods are deliverable to
thereon. Otherwise, the warehouseman shall retain the possession of the
bearer or where a negotiable receipt has been indorsed in blank or to
goods according to the terms of the original contract of deposit.
bearer, any holder may indorse the same to himself or to any other
Sec. 34. Perishable and hazardous goods. If goods are of a perishable specified person, and, in such case, the receipt shall thereafter be
nature, or by keeping will deteriorate greatly in value, or, by their order, negotiated only by the indorsement of such indorsee.
leakage, inflammability, or explosive nature, will be liable to injure other
Sec. 38. Negotiation of negotiable receipt by indorsement. A negotiable
property , the warehouseman may give such notice to the owner or to the
receipt may be negotiated by the indorsement of the person to whose
person in whose names the goods are stored, as is reasonable and possible
order the goods are, by the terms of the receipt, deliverable. Such
under the circumstances, to satisfy the lien upon such goods and to
indorsement may be in blank, to bearer or to a specified person. If indorsed
remove them from the warehouse and in the event of the failure of such
to a specified person, it may be again negotiated by the indorsement of
person to satisfy the lien and to receive the goods within the time so
such person in blank, to bearer or to another specified person. Subsequent
specified, the warehouseman may sell the goods at public or private sale
negotiation may be made in like manner.
without advertising. If the warehouseman, after a reasonable effort, is
unable to sell such goods, he may dispose of them in any lawful manner Sec. 39. Transfer of receipt. A receipt which is not in such form that it can
and shall incur no liability by reason thereof. be negotiated by delivery may be transferred by the holder by delivery to a
purchaser or donee.
The proceeds of any sale made under the terms of this section shall be
disposed of in the same way as the proceeds of sales made under the A non-negotiable receipt can not be negotiated, and the indorsement of
terms of the preceding section. such a receipt gives the transferee no additional right.

Sec. 35. Other methods of enforcing lien. The remedy for enforcing a lien Sec. 40. Who may negotiate a receipt. A negotiable receipt may be
herein provided does not preclude any other remedies allowed by law for negotiated:
the enforcement of a lien against personal property nor bar the right to
recover so much of the warehousemans claim as shall not be paid by the (a) By the owner thereof, or
proceeds of the sale of the property.
(b) By any person to whom the possession or custody of the receipt has Sec. 44. Warranties of a sale of receipt. A person who, for value,
been entrusted by the owner, if, by the terms of the receipt, the negotiates or transfers a receipt by indorsement or delivery, including one
warehouseman undertakes to deliver the goods to the order of the person who assigns for value a claim secured by a receipt, unless a contrary
to whom the possession or custody of the receipt has been entrusted, or if, intention appears, warrants:
at the time of such entrusting, the receipt is in such form that it may be
negotiated by delivery. (a) That the receipt is genuine,

Sec. 41. Rights of person to whom a receipt has been negotiated. A (b) That he has a legal right to negotiate or transfer it,
person to whom a negotiable receipt has been duly negotiated acquires
thereby: (c) That he has knowledge of no fact which would impair the validity or
worth of the receipt, and
(a) Such title to the goods as the person negotiating the receipt to him had
or had ability to convey to a purchaser in good faith for value, and also (d) That he has a right to transfer the title to the goods and that the goods
such title to the goods as the depositor or person to whose order the goods are merchantable or fit for a particular purpose whenever such warranties
were to be delivered by the terms of the receipt had or had ability to would have been implied, if the contract of the parties had been to transfer
convey to a purchaser in good faith for value, and without a receipt of the goods represented thereby.

(b) The direct obligation of the warehouseman to hold possession of the Sec. 45. Indorser not a guarantor. The indorsement of a receipt shall not
goods for him according to the terms of the receipt as fully as if the make the indorser liable for any failure on the part of the warehouseman or
warehouseman and contracted directly with him. previous indorsers of the receipt to fulfill their respective obligations.

Sec. 42. Rights of person to whom receipt has been transferred. A person Sec. 46. No warranty implied from accepting payment of a debt. A
to whom a receipt has been transferred but not negotiated acquires mortgagee, pledgee, or holder for security of a receipt who, in good faith,
thereby, as against the transferor, the title of the goods subject to the demands or receives payment of the debt for which such receipt is
terms of any agreement with the transferor. security, whether from a party to a draft drawn for such debt or from any
other person, shall not, by so doing, be deemed to represent or to warrant
If the receipt is non-negotiable, such person also acquires the right to the genuineness of such receipt or the quantity or quality of the goods
notify the warehouseman of the transfer to him of such receipt and thereby therein described.
to acquire the direct obligation of the warehouseman to hold possession of
the goods for him according to the terms of the receipt. Sec. 47. When negotiation not impaired by fraud, mistake or duress. The
validity of the negotiation of a receipt is not impaired by the fact that such
Prior to the notification of the warehouseman by the transferor or negotiation was a breach of duty on the part of the person making the
transferee of a non-negotiable receipt, the title of the transferee to the negotiation or by the fact that the owner of the receipt was induced by
goods and the right to acquire the obligation of the warehouseman may be fraud, mistake or duress or to entrust the possession or custody of the
defeated by the levy of an attachment or execution upon the goods by a receipt to such person, if the person to whom the receipt was negotiated or
creditor of the transferor or by a notification to the warehouseman by the a person to whom the receipt was subsequently negotiated paid value
transferor or a subsequent purchaser from the transferor of a subsequent therefor, without notice of the breach of duty, or fraud, mistake or duress.
sale of the goods by the transferor.
Sec. 48. Subsequent negotiation. Where a person having sold,
Sec. 43. Transfer of negotiable receipt without indorsement. Where a mortgaged, or pledged goods which are in warehouse and for which a
negotiable receipt is transferred for value by delivery and the indorsement negotiable receipt has been issued, or having sold, mortgaged, or pledged
of the transferor is essential for negotiation, the transferee acquires a right the negotiable receipt representing such goods, continues in possession of
against the transferor to compel him to indorse the receipt unless a the negotiable receipt, the subsequent negotiation thereof by the person
contrary intention appears. The negotiation shall take effect as of the time under any sale or other disposition thereof to any person receiving the
when the indorsement is actually made. same in good faith, for value and without notice of the previous sale,
mortgage or pledge, shall have the same effect as if the first purchaser of others, such warehouseman, or any of his officers, agents, or servants
the goods or receipt had expressly authorized the subsequent negotiation. who, knowing this ownership, issues or aids in issuing a negotiable receipt
for such goods which does not state such ownership, shall be guilty of a
Sec. 49. Negotiation defeats vendors lien. Where a negotiable receipt crime, and, upon conviction, shall be punished for each offense by
has been issued for goods, no sellers lien or right of stoppage in transitu imprisonment not exceeding one year, or by a fine not exceeding two
shall defeat the rights of any purchaser for value in good faith to whom thousand pesos, or by both.
such receipt has been negotiated, whether such negotiation be prior or
subsequent to the notification to the warehouseman who issued such Sec. 54. Delivery of goods without obtaining negotiable receipt. A
receipt of the sellers claim to a lien or right of stoppage in transitu. Nor warehouseman, or any officer, agent, or servant of a warehouseman, who
shall the warehouseman be obliged to deliver or justified in delivering the delivers goods out of the possession of such warehouseman, knowing that
goods to an unpaid seller unless the receipt is first surrendered for a negotiable receipt the negotiation of which would transfer the right to the
cancellation. possession of such goods is outstanding and uncanceled, without obtaining
the possession of such receipt at or before the time of such delivery, shall,
IV CRIMINAL OFFENSES except in the cases provided for in sections fourteen and thirty-six, be
found guilty of a crime, and, upon conviction, shall be punished for each
Sec. 50. Issue of receipt for goods not received. A warehouseman, or an offense by imprisonment not exceeding one year, or by a fine not
officer, agent, or servant of a warehouseman who issues or aids in issuing exceeding two thousand pesos, or by both.
a receipt knowing that the goods for which such receipt is issued have not
been actually received by such warehouseman, or are not under his actual Sec. 55. Negotiation of receipt for mortgaged goods. Any person who
control at the time of issuing such receipt, shall be guilty of a crime, and, deposits goods to which he has no title, or upon which there is a lien or
upon conviction, shall be punished for each offense by imprisonment not mortgage, and who takes for such goods a negotiable receipt which he
exceeding five years, or by a fine not exceeding ten thousand pesos, or afterwards negotiates for value with intent to deceive and without
both. disclosing his want of title or the existence of the lien or mortgage, shall be
guilty of a crime, and, upon conviction, shall be punished for each offense
Sec. 51. Issue of receipt containing false statement. A warehouseman, or by imprisonment not exceeding one year, or by a fine not exceeding two
any officer, agent or servant of a warehouseman who fraudulently issues or thousand pesos, or by both.
aids in fraudulently issuing a receipt for goods knowing that it contains any
false statement, shall be guilty of a crime, and upon conviction, shall be V INTERPRETATION
punished for each offense by imprisonment not exceeding one year, or by
a fine not exceeding two thousand pesos, or by both. 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
Sec. 52. Issue of duplicate receipt not so marked. A warehouse, or any thereof, by the rule of the law merchant.
officer, agent, or servant of a warehouseman who issues or aids in issuing
a duplicate or additional negotiable receipt for goods knowing that a Sec. 57. Name of Act. This Act may be cited as the Warehouse Receipts
former negotiable receipt for the same goods or any part of them is Act.
outstanding and uncanceled, without plainly placing upon the face thereof
the word duplicate except in the case of a lost or destroyed receipt after Sec. 58. Definitions. (a) In this Act, unless the content or subject matter
proceedings are provided for in section fourteen, shall be guilty of a crime, otherwise requires:
and, upon conviction, shall be punished for each offense by imprisonment
not exceeding five years, or by a fine not exceeding ten thousand pesos, or Action includes counterclaim, set-off, and suits in equity as provided by
by both. law in these islands.

Sec. 53. Issue for warehousemans goods or receipts which do not state Delivery means voluntary transfer of possession from one person to
that fact. Where they are deposited with or held by a warehouseman another.
goods of which he is owner, either solely or jointly or in common with
Fungible goods means goods of which any unit is, from its nature by WHEREAS, the utilization of trust receipts, as a convenient business device
mercantile custom, treated as the equivalent of any other unit. to assist importers and merchants solve their financing problems, had
gained popular acceptance in international and domestic business
Goods means chattels or merchandise in storage or which has been or is practices, particularly in commercial banking transactions;
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. WHEREAS, there is no specific law in the Philippines that governs trust
receipt transactions, especially the rights and obligations of the parties
Order means an order by indorsement on the receipt. involved therein and the enforcement of the said rights in case of default
or violation of the terms of the trust receipt agreement;
Owner does not include mortgagee.

Person includes a corporation or partnership or two or more persons

having a joint or common interest. WHEREAS, the recommendations contained in the report on the financial
system which have been accepted, with certain modifications by the
To purchase includes to take as mortgagee or as pledgee. monetary authorities included, among others, the enactment of a law
regulating the trust receipt transactions;
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, NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
constitutes value where a receipt is taken either in satisfaction thereof or by virtue of the powers vested in me by the Constitution, as Commander-
as security therefor. in-Chief of all the Armed Forces of the Philippines, and pursuant to
Proclamation No. 1081, dated September 21, 1972, and General Order No.
Warehouseman means a person lawfully engaged in the business of
1, dated September 22, 1972, as amended, and in order to effect the
storing goods for profit.
desired changes and reforms in the social, economic, and political
(b) A thing is done in good faith within the meaning of this Act when it is structure of our society, do hereby order and decree and make as part of
in fact done honestly, whether it be done negligently or not. the law of the land the following:

Sec. 59. Application of Act. The provisions of this Act do not apply to
receipts made and delivered prior to the taking effect hereof.
Section 1. Short Title. This Decree shall be known as the Trust Receipts
Sec. 60. Repeals. All acts and laws and parts thereof inconsistent with Law.
this Act are hereby repealed.

Sec. 61. Time when Act takes effect. This Act shall take effect ninety days
Section 2. Declaration of Policy. It is hereby declared to be the policy of the
after its publication in the Official Gazette of the Philippines shall have
state (a) to encourage and promote the use of trust receipts as an
been completed.
additional and convenient aid to commerce and trade; (b) to provide for
Enacted: February 5, 1912 the regulation of trust receipts transactions in order to assure the
protection of the rights and enforcement of obligations of the parties
PRESIDENTIAL DECREE No. 115 January 29, 1973 involved therein; and (c) to declare the misuse and/or misappropriation of
goods or proceeds realized from the sale of goods, documents or
PROVIDING FOR THE REGULATION OF TRUST RECEIPTS TRANSACTIONS instruments released under trust receipts as a criminal offense punishable
under Article Three hundred and fifteen of the Revised Penal Code.
 (g) "Purchaser" means any person taking by purchase.

Section 3. Definition of terms. As used in this Decree, unless the context

otherwise requires, the term
(h) "Security Interest" means a property interest in goods, documents or
instruments to secure performance of some obligations of the entrustee or
of some third persons to the entruster and includes title, whether or not
(a) "Document" shall mean written or printed evidence of title to goods. expressed to be absolute, whenever such title is in substance taken or
retained for security only.

(b) "Entrustee" shall refer to the person having or taking possession of

goods, documents or instruments under a trust receipt transaction, and (i) "Person" means, as the case may be, an individual, trustee, receiver, or
any successor in interest of such person for the purpose or purposes other fiduciary, partnership, corporation, business trust or other
specified in the trust receipt agreement. association, and two more persons having a joint or common interest.

(c) "Entruster" shall refer to the person holding title over the goods, (j) "Trust Receipt" shall refer to the written or printed document signed by
documents, or instruments subject of a trust receipt transaction, and any the entrustee in favor of the entruster containing terms and conditions
successor in interest of such person. substantially complying with the provisions of this Decree. No further
formality of execution or authentication shall be necessary to the validity
of a trust receipt.
(d) "Goods" shall include chattels and personal property other than:
money, things in action, or things so affixed to land as to become a part
thereof. (k) "Value" means any consideration sufficient to support a simple
contract.

(e) "Instrument" means any negotiable instrument as defined in the

Negotiable Instrument Law; any certificate of stock, or bond or debenture Section 4. What constitutes a trust receipt transaction. A trust receipt
for the payment of money issued by a public or private corporation, or any transaction, within the meaning of this Decree, is any transaction by and
certificate of deposit, participation certificate or receipt, any credit or between a person referred to in this Decree as the entruster, and another
investment instrument of a sort marketed in the ordinary course of person referred to in this Decree as entrustee, whereby the entruster, who
business or finance, whereby the entrustee, after the issuance of the trust owns or holds absolute title or security interests over certain specified
receipt, appears by virtue of possession and the face of the instrument to goods, documents or instruments, releases the same to the possession of
be the owner. "Instrument" shall not include a document as defined in this the entrustee upon the latter's execution and delivery to the entruster of a
Decree. signed document called a "trust receipt" wherein the entrustee binds
himself to hold the designated goods, documents or instruments in trust
for the entruster and to sell or otherwise dispose of the goods, documents
or instruments with the obligation to turn over to the entruster the
(f) "Purchase" means taking by sale, conditional sale, lease, mortgage, or
proceeds thereof to the extent of the amount owing to the entruster or as
pledge, legal or equitable.
appears in the trust receipt or the goods, documents or instruments
themselves if they are unsold or not otherwise disposed of, in accordance
with the terms and conditions specified in the trust receipt, or for other Section 5. Form of trust receipts; contents. A trust receipt need not be in
purposes substantially equivalent to any of the following: any particular form, but every such receipt must substantially contain (a) a
description of the goods, documents or instruments subject of the trust
receipt; (2) the total invoice value of the goods and the amount of the draft
to be paid by the entrustee; (3) an undertaking or a commitment of the
1. In the case of goods or documents, (a) to sell the goods or procure their entrustee (a) to hold in trust for the entruster the goods, documents or
sale; or (b) to manufacture or process the goods with the purpose of instruments therein described; (b) to dispose of them in the manner
ultimate sale: Provided, That, in the case of goods delivered under trust provided for in the trust receipt; and (c) to turn over the proceeds of the
receipt for the purpose of manufacturing or processing before its ultimate sale of the goods, documents or instruments to the entruster to the extent
sale, the entruster shall retain its title over the goods whether in its original of the amount owing to the entruster or as appears in the trust receipt or
or processed form until the entrustee has complied fully with his obligation to return the goods, documents or instruments in the event of their non-
under the trust receipt; or (c) to load, unload, ship or tranship or otherwise sale within the period specified therein.
deal with them in a manner preliminary or necessary to their sale; or

The trust receipt may contain other terms and conditions agreed upon by
2. In the case of instruments, the parties in addition to those hereinabove enumerated provided that
such terms and conditions shall not be contrary to the provisions of this
Decree, any existing laws, public policy or morals, public order or good
a) to sell or procure their sale or exchange; or customs.

b) to deliver them to a principal; or Section 6. Currency in which a trust receipt may be denominated. A trust
receipt may be denominated in the Philippine currency or any foreign
currency acceptable and eligible as part of international reserves of the
Philippines, the provisions of existing law, executive orders, rules and
c) to effect the consummation of some transactions involving delivery to a regulations to the contrary notwithstanding: Provided, however, That in the
depository or register; or case of trust receipts denominated in foreign currency, payment shall be
made in its equivalent in Philippine currency computed at the prevailing
exchange rate on the date the proceeds of sale of the goods, documents or
instruments held in trust by the entrustee are turned over to the entruster
d) to effect their presentation, collection or renewal or on such other date as may be stipulated in the trust receipt or other
agreements executed between the entruster and the entrustee.

The sale of goods, documents or instruments by a person in the business

of selling goods, documents or instruments for profit who, at the outset of Section 7. Rights of the entruster. The entruster shall be entitled to the
the transaction, has, as against the buyer, general property rights in such proceeds from the sale of the goods, documents or instruments released
goods, documents or instruments, or who sells the same to the buyer on under a trust receipt to the entrustee to the extent of the amount owing to
credit, retaining title or other interest as security for the payment of the the entruster or as appears in the trust receipt, or to the return of the
purchase price, does not constitute a trust receipt transaction and is goods, documents or instruments in case of non-sale, and to the
outside the purview and coverage of this Decree. enforcement of all other rights conferred on him in the trust receipt
provided such are not contrary to the provisions of this Decree.
The entruster may cancel the trust and take possession of the goods, Section 10. Liability of entrustee for loss. The risk of loss shall be borne by
documents or instruments subject of the trust or of the proceeds realized the entrustee. Loss of goods, documents or instruments which are the
therefrom at any time upon default or failure of the entrustee to comply subject of a trust receipt, pending their disposition, irrespective of whether
with any of the terms and conditions of the trust receipt or any other or not it was due to the fault or negligence of the entrustee, shall not
agreement between the entruster and the entrustee, and the entruster in extinguish his obligation to the entruster for the value thereof.
possession of the goods, documents or instruments may, on or after
default, give notice to the entrustee of the intention to sell, and may, not
less than five days after serving or sending of such notice, sell the goods,
documents or instruments at public or private sale, and the entruster may, Section 11. Rights of purchaser for value and in good faith. Any purchaser
at a public sale, become a purchaser. The proceeds of any such sale, of goods from an entrustee with right to sell, or of documents or
whether public or private, shall be applied (a) to the payment of the instruments through their customary form of transfer, who buys the goods,
expenses thereof; (b) to the payment of the expenses of re-taking, keeping documents, or instruments for value and in good faith from the entrustee,
and storing the goods, documents or instruments; (c) to the satisfaction of acquires said goods, documents or instruments free from the entruster's
the entrustee's indebtedness to the entruster. The entrustee shall receive security interest.
any surplus but shall be liable to the entruster for any deficiency. Notice of
sale shall be deemed sufficiently given if in writing, and either personally
served on the entrustee or sent by post-paid ordinary mail to the Section 12. Validity of entruster's security interest as against creditors. The
entrustee's last known business address. 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 8. Entruster not responsible on sale by entrustee. The entruster
holding a security interest shall not, merely by virtue of such interest or
having given the entrustee liberty of sale or other disposition of the goods, Section 13. Penalty clause. The failure of an entrustee to turn over the
documents or instruments under the terms of the trust receipt transaction proceeds of the sale of the goods, documents or instruments covered by a
be responsible as principal or as vendor under any sale or contract to sell trust receipt to the extent of the amount owing to the entruster or as
made by the entrustee. 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
Section 9. Obligations of the entrustee. The entrustee shall (1) hold the under the provisions of Article Three hundred and fifteen, paragraph one
goods, documents or instruments in trust for the entruster and shall (b) of Act Numbered Three thousand eight hundred and fifteen, as
dispose of them strictly in accordance with the terms and conditions of the amended, otherwise known as the Revised Penal Code. If the violation or
trust receipt; (2) receive the proceeds in trust for the entruster and turn offense is committed by a corporation, partnership, association or other
over the same to the entruster to the extent of the amount owing to the juridical entities, the penalty provided for in this Decree shall be imposed
entruster or as appears on the trust receipt; (3) insure the goods for their upon the directors, officers, employees or other officials or persons therein
total value against loss from fire, theft, pilferage or other casualties; (4) responsible for the offense, without prejudice to the civil liabilities arising
keep said goods or proceeds thereof whether in money or whatever form, from the criminal offense.
separate and capable of identification as property of the entruster; (5)
return the goods, documents or instruments in the event of non-sale or
upon demand of the entruster; and (6) observe all other terms and Section 14. Cases not covered by this Decree. Cases not provided for in
conditions of the trust receipt not contrary to the provisions of this Decree. 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 Section 17. This Decree shall take effect immediately.
or sections to other persons or circumstances shall not be affected thereby.

Done in the City of Manila, this 29th day of January, in the year of Our Lord,
Section 16. Repealing clause. All Acts inconsistent with this Decree are nineteen hundred and seventy-three.
hereby repealed.