Gonzales v.

Go Tiong

FACTS:
Go Tiong owned a rice mill and warehouse, located at Mabini, Urdaneta, Pangasinan. On
Feb. 4, 1953, he obtained a license to engage in the business of a bonded warehouseman. To secure
the performance of his obligations, Luzon Surety Co. executed Guaranty Bond No. 294 (in the
sum of Php18,334), conditioned particularly on the fulfillment of Go Tiong of his duty to deliver
to the depositors in his storage warehouse, the palay he received for storage, at any time when
demand is made or to pay the market value thereof if he was unable to do so. The bond was
executed on Jan. 26, 1953. The warehouse and palay were insured with Alliance Surety and
Insurance Company.
However, prior to the issuance of his license, he had received palay for deposit from
Gonzales, totaling 368 sacks, for which he issued receipts. After he was licensed, he received
various deliveries from Gonzales, totaling to 492 sacks, with a grand total of 860 sacks, valued at
Php8600.
On March 15, 1953, Gonzales demanded Go Tiong the value of his deposits, but he was
told to return after two days, which he did, but he was told to return again. A few days later, the
warehouse burned to the ground. Before the fire, Go Tiong received more palay from other people,
totaling 5,847 sacks in his warehouse, which was in excess of his authorized 5000 sacks. However,
the receipts issued by Go Tiong to Gonzales were ordinary receipts, and not warehouse receipts.
Following the burning of the warehouse, the depositors of palay filed their claims before
the Bureau of Commerce. However, the Bureau of Commerce denied Gonzales’ claim. Thus,
Gonzales filed a present action against Go Tiong for the sum of Php8,600.
While the case was pending in Court, Gonzales and Go Tiong entered into a contract of
amicable settlement. However, Go Tiong failed to settle the accounts, and so Gonzales continued.
ISSUE:
W/N the receipts issued by Go Tiong to Gonzales are covered by the Bonded Warehouse
Law even if the receipts issued are ordinary receipts and not warehouse receipts? YES.
HELD:
The Bonded Warehouse Law 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. Any deposit made with him as a bonded warehouseman must
be governed by this law.
The kind or nature of the receipts issued by him is not very material much less decisive.
The provisions in the Warehouse Receipts Law is not mandatory and indispensable as to the kind
or nature of the receipts. The issuance of a warehouse receipt in the form provided is merely
permissive and directory, but not obligatory.
A receipt is any receipt issued by a warehouseman for commodity delivered to him. Thus,
the lwa does not require as indispensable that a warehouse receipt be issued.
Even if the receipts issued by Go Tiong were not “quedans”, it is no valid ground for
defense. Furthermore, the trial Court found that Go Tiong repeatedly promised plaintiff to issue
him “quedans”.
At the same time, even if Gonzales never paid any fees, it was done to attract more
customers to Go Tiong’s business.
 The fact that he also went beyond the authorized deposit increased the risk, and thus, he
must be held liable, even if the fire was fortuitous. Prior to the burning of the warehouse, Gonzales
had repeatedly demanded for the palay, but he was made to return twice for no reason at all.

Consolidated Terminals, Inc v. Artex Dev. Co. Inc.

FACTS:
CTI was the operator of a customs bonded warehouse located at Port Area, Makati. It
received on deposit 193 bales of high density compressed raw cotton valued at Php99,609.76. It
was understood that CTI would keep the cotton in behalf of Luzon Brokerage until the consignee,
Paramount Textile Mills, had opened the letter of credit in favor of shipper, Adolph Hanslik
Cotton.
Due to a forged permit to deliver imported goods, Artex was able to obtain delivery of the
bales of cotton after paying CTI Php15,000 as storage and handling charges. However, at the time
the merchandise was released to Artex, the letter of credit has not yet been opened, and the taxes
due has not been paid yet.
CTI sought to recover possession of the cotton by means of a writ of replevin. However,
this could not be executed. Thus, CTI filed an amended complaint.
CFI dismissed the amended complaint for lack of cause of action.
ISSUE:
W/N CTI, as the warehouseman, is entitled to the possession of the bales of cotton by
virtue of Sec. 10 of the Warehouse Receipts Law? NO.
HELD:
The amended complaint does not show that, as warehouseman, CTI had a cause of action
for damages against Artex. The real parties interested were Luzon Brokerage Corporation and
Paramount Textile Mills, Adolph Hanslik Cotton, and Commissioners of Customs and Internal
Revenue for the duties and taxes. However, these parties did not CTI for damages or for recovery
of the bales of cotton or the corresponding taxes and duties.
The case would have been different if the depositor, consignee, and shipper had required
CTI to pay damages. In such a case, it would have been logical for CTI to go after Artex. But, this
has not yet happened. And thus, CTI’s action to recover the value of the merchandise is untenable
as it was not the owner of the cotton.

PNB v. Se

FACTS:
5 Warehouse Receipts were issued by Noah’s Ark Sugar Refinery, covering sugar deposited
by Rosa Sy, RNS Merchandise (2), and St. Therese Merchandising (2). They were substantial in
form and were negotiable warehouse receipts.
Subsequently, two of them were negotiated and endorsed to Luis T. Ramos, while the
other two were negotiated and endorsed to Cresencia Zoleta. Ramos and Zoleta then used the
quedans as security for two loan agreements with PNB. The said quedans were then endorsed by
them to PNB. However, they failed to pay their loans upon maturity. Thus, PNB wrote to Noah’s
Ark Sugar Refinery, demanding for the delivery of the sugar stocks covered by the quedans that
were endorsed.
Noah’s Ark Sugar Refinery refused, alleging ownership thereof, to which PNB filed a
verified complaint for “Specific Damages” against Noah’s Ark. The Application for Preliminary
Attachment and MR were denied.
Noah’s Ark alleged that they were the owners of the subject quedans as even if they agreed
to sell the total volume of sugar with Rosa Ng Sy and Teresita Ng, they failed to pay as their checks
were dishonored for “payment stopped” and “DAIF”.
Noah’s Ark incorporated a Third Party Complaint against Rosa Ng Sy and Teresita Ng.
PNB filed a Motion for Summary Judgment. However, the RTC denied this Motion.
PNB filed an appeal before the CA, wherein the CA set aside the decisions of the RTC
and ordered the trial court to render summary judgment in favor of PNB.
The trial court dismissed plaintiff’s complaint for lack of cause of action. MR was denied.
SC ruled in favor of PNB, ordering Noah’s Ark to deliver the sugar stocks. MR was denied.
PNB filed a Motion for Execution which was ordered deferred until the private
respondents were heard on their claim for warehouseman’s lien.
The trial court ruled that there was a lien in favor of defendants and it ordered PNB to pay
the full amount of the lien.
ISSUE: W/N PNB should pay storage fees for sugar stocks covered by 5 Warehouse Receipts
stored in the warehouse of the private respondents as PNB is the owner of the said sugar stocks
and ordered the delivery to the bank? YES.
HELD:
The SC’s resolution does not carry with it the denial of the lien. It simply resolved the
propriety of a summary judgment. The SC affirmed the finding that Noah’s Ark was a
warehouseman hat was obliged to deliver the sugar stocks covered by the Warehouse Receipts
pledged by Zoleta and Ramos to PNB.
There was no reason to contemplate the lien at that time, as the issue was on the ownership
of the said sugar stocks. The storage fees were not yet due as no one has been declared as the
owner of the sugar stocks yet.
On the aforementioned warehouse receipts, it placed that storage fees were chargeable. As
PNB are the owners of the sugar stocks, they are legally bound to stand by the express terms and
conditions on the face of the warehouse receipts as to the payment of storage fees. Even in the
absence of such a provision, law and equity dictate the payment of the lien as contained in Secs.
27 and 31 of the Warehouse Receipts Law.
Thus, the goods under storage may not be delivered until the said lien is satisfied. Petitioner
did not deny the existence, validity, and genuineness of the receipts, and thus, it cannot disclaim
liability for the payment of the storage fees stipulated therein.
Petitioner is estopped in disclaiming liability for the payment of storage fees for 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 the petitioner for payment against private respondents 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 warehouseman’s lien
for storage fees and preservation expenses.