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G.R. No. L-11776 August 30, 1958

RAMON GONZALES, plaintiff-appellee,
vs.
GO TIONG and LUZON SURETY CO., INC., defendants-appellants.
FACTS:
Go Tiong owned a rice mill and warehouse, located at Mabini, Urdaneta, Pangasinan. On February 4, 1953, he obtained
a license to engage in the business of a bonded warehouseman. To secure the performance of his obligations as such
bonded warehouseman, the Luzon Surety Co. executed Guaranty Bond No. 294 in the sum of P18,334, conditioned
particularly on the fulfillment by Go Tiong of his duty or obligation to deliver to the depositors in his storage
warehouse, the palay received by him for storage, at any time demand is made, or to pay the market value thereof, in
case he was unable to return the same. Go Tiong insured the warehouse and the palay deposited therein with the
Alliance Surety and Insurance Company.
Go Tiong received various deliveries of palay from Gonzales, totaling 492 sacks, for which he issued ordinary receipts
and not the "warehouse receipts" defined by the Warehouse Receipts Act (Act No. 2137), all the grand total of 860
sacks, valued at P8,600 at the rate of P10 per sack.
On or about March 15, 1953, Gonzales demanded from Go Tiong the value of his deposits in the amount of P8,600, but
he was told to return after two days, which he did, but Go Tiong again told him to come back. A few days later, the
warehouse burned to the ground
Gonzales filed the present action against Go Tiong and the Luzon Surety for the sum of P8,600, the value of his palay,
with legal interest . A settlement was discussed, but the same did not push through
Go Tiong claims that since the receipts that were issued were ordinary receipts, it is not covered by the Warehouse
Receipts Act (Act No. 2173), rather should be covered by the Civil Code.
The Court of First Instance of Manila ruled in favor of Gonzales. The CA indorsed the same to the SC as the issue
pertains in pure question of law.
ISSUE: WON the deposits made by Gonzales are covered by the Warehouse Receipts Law.
HELD:
YES. Act No. 3893 as amended is a special law regulating the business of receiving commodities for storage and
defining the rights and obligations of a bonded warehouseman and those transacting business with him. According to
the SC, the kind or nature of the receipts issued by him for the deposits is not very material as quoting Sec 1:
SECTION 1. Persons who may issue receipts. Warehouse receipts may be issued by any warehouseman.,
and the Bonded Warebouse Act as amended permits the warehouseman to issue any receipt, thus:
. . . . "receipt" as any receipt issued by a warehouseman for commodity delivered to him.
In relation to this,Section 2 of Act No. 3893, defined receipt as any receipt issued by a warehouseman for commodity
delivered to him, showing that the law does not require as indispensable that a warehouse receipt be issued.
In addition the SC held that the obligation of the surety includes the duty of the warehouseman to issue the prescribed
receipt, as well as the other duties imposed upon him by the statute.
Other Facts discussed:
Go Tiong has the habit to issue ordinary receipts in the promise that a warehouse receipt will follow

The deposit was not gratuitous as even if Gonzales did not pay yet, it was Go Tiong that induced Gonzales to pay later.
The warehouse was in over capacity as there was 5,847 sacks of palay whereas the it was authorized to handle only
5,000 sacks of palay.



Consolidated Terminals, Inc. v. Artex Development Co., Inc.
Facts:
Consolidated Terminals, Inc. (CTI; Petitioner) was the operator of a customs bonded warehouse.
o It received on deposit 193 bales of high density compressed raw cotton valued at P99,609.76.
o It was understood that CTI was to keep the cotton in behalf of Luzon Brokerage Corporation until
Paramount Textile Mills, Inc. (consignee) had opened a letter of credit in favor of Adolph Hanslik
Cotton of Corpus Cristi, Texas (shipper).
It was alleged that Artex Development Co., Inc (Respondent) was able to obtain delivery of the bales of cotton
by using a forged permit to deliver imported goods, purportedly issued by the Bureau of Customs.
o Artex paid P15,000 as storage and handling charges.
CTI initially filed a complaint seeking to recover possession of the cotton by means of a writ of replevin, but
since the writ could not be executed, it amended its complaint, transforming it to an action for recovery of
damages from Artex. (P99,609.76 as compensatory damages, P10,000 as nominal and exemplary damages and
P20,000 as attorneys fees).
The lower court ruled in favor of Artex. Hence appeal by CTI.
CTI claims:
o That as a warehouseman, it was entitled to repossession of the bales of cotton
o That Artex acted wrongfully in depriving CTI of the possession of the merchandise because Artex
presented a falsified delivery permit.
o It cites Sec. 10 of the Warehouse Receipts Law, which provides:
Where a warehouseman delivers the goods to one who is not in fact lawfully entitled 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.

Issue: Whether CTI, as warehouseman, entitled to possession of the bales of cotton?

Ruling: No.
CTIs amended complaint does not really show that, as warehouseman, it has a cause of action for damages
against Artex.
The real properties interested in the bales of cotton were:
a) Luzon Brokerage Corporation as depositor;
b) Paramount Textile Mills, Inc. as consignee;
c) Adolph Hanslik Cotton as shipper; and
d) Commissioners of Customs and Internal Revenue with respect to duties and taxes.
o These parties have not sued CTI for damages or for recovery of the bales of cotton or the
corresponding taxes and duties.
The case might have been different if it was alleged in the amended complaint that the depositor, consignee,
and shipper had required CTI to pay damages, or that the Commissioners of Customs and Internal Revenue
had held CTI liable for duties and taxes.
o In such a case, CTI may logically go after Artex for having wrongfully obtained custody of the
merchandise.
In this case, CTIs action to recover the value of the merchandise seems untenable. -- It was not the owner of
the cotton. How could it be entitled to claim the value of the shipment.



PNB vs Se
Doctrine: A prior judgment holding that a party is a warehouseman obligated to deliver sugar stocks covered by
the warehouse receipts does not necessarily carry with it a denial of its lien over the same sugar stocks.
Facts:
Noahs Ark Sugar Refinery issued several Warehouse Receipts (quedans). It contains the terms prescribed
in WRL (Sec2)
March 1, 1989 Receipt No. 18062 Covering sugar deposited by ROSA SY
March 7, 1989 Receipt No. 18080 Covering sugar deposited by RNS Merchandising
March 21, 1989 Receipt No. 18081 Covering sugar deposited by St. Therese Merchandising
March 31, 1989 Receipt No. 18086 Covering sugar deposited by St. Therese Merchandising
April 1, 1989 Receipt No. 18087 Covering sugar deposited by RNS Merchandising

Subsequently the Receipt Nos. 18062, 18086 and 1807 were negotiated and endorsed to Cresencia Zoleta
while the Receipt No. 18081 to Luis Ramos
Ramos and Zoleta then used the quedans as security for 2 loan agreements obtained by them from PNB
(for P15.6M and P23.5M)
When Ramos and Zoleta failed to pay their loans upon maturity, PNB wrote to Noahs Ark Sugar Refinery
demanding delivery of the sugar stocks covered by the quedans endorsed to it by Zoleta and Ramos.
Noahs Ark Sugar Refinery refused to comply with demand and claims ownership thereof
PNB filed with RTC complaint for specific performance with damages and application of writ of attachment
against Noahs Ark Sugar Refinery and its EVP and Managing Partners
Noahs Ark and its co-defendants filed and answer with counterclaim and 3
rd
party complaint against Rosa
Sy and Teresita Ng praying for the return quedans
o They alleged that the check issued by SY and NG for payment of the sugar were dishonored hence
defendants refused to deliver them the quantity of sugar covered by the subject quedans
Petitioner claims that the private respondents have lost their right to recover warehousemans lien on the
sugar stocks because they failed to set up tier claim in their answer and that they also did not appeal in
this regard.
BUT Noahs Ark maintains that they could not have claimed the right to warehousemans lien in their
answer for it will be inconsistent with their claim of ownership since the checks issued for payment were
dishonored and if they were still owners, it would be absurd for them to ask for payment for storage fees
and preservation expenses
Trial Court ruled in favor of PNB but Private Respondents filed Omnibus Motion for Reconsideration with
leave of court seeking for deferment of proceedings until they are heard for their claim for
warehousemans lien
Judge Se finds that there exists in favor of private defendants a valid warehouseman lien under Sec 27 of
WRL and execution of judgment is precluded until the full amount of of 5 quedans had been satisfied by
PNB under Sec 31 of WRL. Hence, this petition to nullify the decision of Judge Se Jr.
Issues:
W/N PNB should pay storage fees for sugar stocks covered by 5 warehouse receipts stored in the warehouse of
private respondents? YES
W/N the warehouse man can enforce his warehousemans lien before delivering the sugar stocks as ordered by
the CA? YES, need not to file separate action



Ruling: Petition is dismissed for lack of merit
1. Yes, storage fees are chargeable. PNB is legally bound to stand by the express terms and conditions on the face
of the Warehouse Receipts as to the payment of storage fees.
o Even in the absence of such a provision, law and equity dictate the payment of the warehousemans lien
pursuant to Sections 27 and 31 of the Warehouse Receipts Law (R.A. 2137)
o SECTION 27. What claims are included in the warehousemans lien. Subject to the provisions of
section thirty, a warehouseman shall have lien on goods deposited or on the proceeds thereof in his
hands, for all lawful charges for storage and preservation of the goods; also for all lawful claims for
money advanced, interest, insurance, transportation, labor, weighing coopering and other charges and
expenses in relation to such goods; also for all reasonable charges and expenses for notice, and
advertisement of sale, and for sale of the goods where default has been made in satisfying the
warehousemans lien.
o SECTION 31. Warehouseman need not deliver until lien is satisfied. A warehouseman having a lien
valid against the person demanding the goods may refuse to deliver the goods to him until the lien is
satisfied.
PNB is estopped in disclaiming liability for the payment of storage fees as warehouseman while claiming to be entitled
to the sugar stocks covered by the subject Warehouse Receipts on the basis of which it anchors its claim for payment
or delivery of the sugar stocks.
The unconditional presentment of the receipts by PNB for payment on the strength of the provisions of the
Warehouse Receipts Law (R.A. 2137) carried with it the admission of the existence and validity of the
terms, conditions and stipulations written on the face of the Warehouse Receipts, including the unqualified
recognition of the payment of warehousemans lien for storage fees and preservation expenses.
PNB may not now retrieve the sugar stocks without paying the lien as warehouseman.
o The RULE is While the PNB is entitled to the stocks of sugar as the endorsee of the quedans,
delivery to it shall be effected only upon payment of the storage fees
Imperative is the right of the warehouseman to demand payment of his lien at this juncture, because, in accordance
with Section 29 of the Warehouse Receipts Law, the warehouseman loses his lien upon goods by surrendering
possession thereof. In other words, the lien may be lost where the warehouseman surrenders the possession of the
goods without requiring payment of his lien, because a warehousemans lien is possessory in nature.