18 April 1996 G.R. No.

119231
Hermosisima, Jr., J.

P N B v. S E , E T A L .
TOPIC:

Special Laws - Warehouse Receipts Law

SUMMARY:

PNB, as endorsee of 5 Warehouse Receipts (quedans), demanded delivery of

sugar stocks covered thereby. Noah's Ark Sugar Refinery refused to comply, alleging
that the original purchasers of the stocks never acquired ownership because of failure
to pay. PNB obtained favorable judgment, but the defendants asserted their
warehouseman's lien. SC upheld the warehouseman's lien in favor of the defendants.
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.
NATURE: Petition to nullify the orders of the respondent Judge Se

1989 - In accordance with the Warehouse Receipts Law, Noah's Ark Sugar Refinary
issued the following Warehouse Receipts (Quedans):
o Receipt No. 18062 - sugar deposited by Rosa Sy;
o Receipt No. 18080, - sugar deposited by RNS Merchandising (Rosa Ng Sy);
o Receipt No. 18081, - sugar deposited by St. Therese Merchandising (STM);
o Receipt No. 18086, - sugar deposited by STM; and
o Receipt No. 18087- sugar deposited by RNS Merchandising.
Warehouse Receipts Nos. 18080 and 18081 were negotiated and endorsed to Luis
Ramos. The other receipts were negotiated and endorsed to Cresencia Zoleta.
Ramos and Zoleta endorsed the quedans to PNB as security for 2 loans
(P15.6M, P23.5M).
They failed to pay the loan. PNB wrote to the Sugar Refinery and demanded
delivery of the sugar stocks, but the latter refused to comply.
PNB filed a verified complaint for "Specific Performance with Damages and
Application for Writ of Attachment" against Noah's Ark Sugar Refinery, Alberto T.
Looyuko (sole proprietor), Jimmy T. Go (managing partner) and Wilson T. Go
(Executive VP).
o RTC Judge Se denied the Application for Preliminary Attachment.
o Sugar Refinery and co-defendants filed an answer with counterclaim and
third-party complaint. They claimed to own the quedans and the sugar
represented therein. Allegedly, RNS and STM purchased the sugar covered
by the quedans but the checks they gave as payment were dishonored.
Considering that the buyers never acquired ownership, their subsequent
endorsers and PNB could not acquire a better right.
o Sy (of RNS) and Ng (of STM) alleged that the transaction was merely
simulated.
PNB filed a Motion for Summary Judgment.
o RTC - Denied. PNB filed a Petition for Certiorari with the CA.
o CA - Reversed; ordered RTC to render summary judgment in favor of PNB.
Effect of ruling: Declared that defendants were not owners but
were only warehousemen with respect to the sugar stocks.
RTC - Did not follow the CA; still dismissed PNB's complaint; also dismissed the
counterclaim and third-party complaint. PNB filed a Petition for Review on Certiorari
at the SC.
SC - Reversed; ordered a new judgment conforming to the CA's decision (in favor of
PNB)
Defendants filed a Motion for Clarification. SC held that the relief granted was
precisely the relief set out in the final and executory decision of the CA.

VILLARAMA, BIANCA DANICA S.

CREDIT CASE # 55

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Defendants filed an Omnibus Motion seeking deferment of the proceedings until

they were heard on their claim for warehouseman's lien.
o Meanwhile, PNB filed a Motion for the Issuance of Writ of Execution
o RTC granted the Omnibus Motion; PNB's motion was deferred.
PNB filed a Manifestation with Urgent Motion to Nullify Court Proceedings.
o RTC held that there exists in favor of the defendants a valid
warehouseman's lien under Sec. 27 of R.A. 2137. Accordingly, execution of
the judgment was ordered stayed and/or precluded until the full amount of
defendants' lien shall have been satisfied.

PETITIONER PNB ARGUES:

Defendants have lost their right to recover their warehousemans lien because they
failed to set up said claim in their Answer before the RTC, and they did not appeal
from the decision.
Denial by the SC of the Motion for Clarification has foreclosed private respondents
right to enforce their warehousemans lien under the Warehouse Receipts Act.
PRIVATE RESPONDENTS ARGUE: They could not have claimed the right to a
warehouseman s lien in their Answer to the complaint before the RTC as it would
have been inconsistent with their original stand (claiming ownership of the stocks
covered by the quedans).
W/N the defendants have lost their right to recover their warehouseman's lien
NO.
In disposing of the private respondents motion for clarification, SC could not
contemplate the matter of warehousemans lien because the issue to be resolved
then was the claim of private respondents for retaining ownership of the stocks of
sugar covered by the endorsed quedans.
(In other words: It was only in the SC's ruling on the Motion for Clarification that it
was finally resolved that defendants were not the owners of the sugar stocks.
Hence, it was only after such ruling that defendants could assert a different claim:
their warehouseman's lien. -B)
W/N Noah's Ark Sugar Refinery has the right to impose
warehouseman's lien YES.
Stipulation in the Warehouse Receipts provides for such right:

and

collect

"Storage of the refined sugar quantities mentioned herein shall be free up to one (1) week from
the date of the quedans covering said sugar and thereafter, storage fees shall be charged in
accordance with the Refining Contract under which the refined sugar covered by this Quedan
was produced."

Even in the absence of such a provision, law and equity dictate the
payment of the warehouseman s lien pursuant to Secs. 27 and 31 of the
Warehouse Receipts Law (R.A. 2137):
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

VILLARAMA, BIANCA DANICA S.

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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.
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.

As warehousemen, private respondents cannot legally be deprived of

their right to enforce their claim for warehousemans lien for reasonable
storage fees and preservation expenses. Pursuant to Sec. 31, they may
refuse to deliver the goods until the lien is satisfied.
PNB cannot disclaim liability for the payment of the storage fees stipulated in the
Warehouse Receipts, which it also uses as basis for its claim for delivery of the
sugar stocks (estopped). Its unconditional presentment of the receipts
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 due private
respondents as warehouseman.
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.
Note: In accordance with Sec. 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.

VILLARAMA, BIANCA DANICA S.

CREDIT CASE # 55

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