1507

NOTE: 1 and 2 must be ALWAYS future delivery to be negotiable.

Document of Title includes:
1. Any bill of lading - Issued by common carriers
2. Dock warrant - Issued by a dock owner
3. Quedan - Issued for rice and sugar (a special type of warehouse receipt)
4. Warehouse receipt or order - Issued by a warehouseman
5. Any other document used as: a. Proof of possession

b. Authority to transfer goods

NOTE: 1-5 are forms of acknowledgment that the owner has goods held in trust by another

1508
• How to make a Deliverable to BEARER Document:
1.Document originally uses deliverable to BEARER clause 

2.When deliverable to NONEXISTENT, DEAD or FICTITIOUS persons 

3.When deliverable to OBJECTS (cash, rocks, water, etc.) 

4.Where document is originally deliverable to ORDER but is indorsed in blank 
(simply signing without
specifying who shall be the next owner or holder) 


1509
• Originally deliverable to ORDER documents may be transformed into deliverable to BEARER by blank
indorsement BUT NOT vice versa. 
NOTE: Originally deliverable to Bearer documents, indorsed
specifically, may still be negotiated by mere delivery. The indorsement has no effect at all. 

• If document is originally deliverable to order, then indorsed in blank, it may still be reverted back to being
deliverable to order by completing the blank indorsement or making a specific indorsement (a new
complete indorsement) 


1510
• The words Non-Negotiable may however limit the obligations of the fiduciary as agreed by the parties.
(Intent is considered) 


1511
• When non-negotiable, indorsement does not give any additional right to that which a mere assignee or
transferee may have 

1512
• a. Document is deliverable to bearer(does not require indorsement)
b. Document is deliverable to order
of the trustee(requires indorsement by 
trustee) 

• The innocent owner bears loss if negotiation is unauthorized as far as other innocent 
parties are
concerned. 

1513

1514
Prior to the notification of the bailee, the creditors of the transferor may levy an attachment upon the goods

1515
• The negotiation will only take effect at the time when the indorsement is actually made. This determines
when the transferee becomes a holder. 


1516 – GERL NO
• The Document is genuine 

• Right to transfer the title of the goods (which must be merchantable/fit) 

• The legal right to negotiate or transfer 

• No knowledge of fact that will impair the validity/worth of the document 


1517
• Present indorsers are not liable to the failure of the previous indorsers or bailee to comply with their
obligations. Indorsers are only liable for their warranties in Article 1516.