Negotiation of negotiablr receipts by delivery.
SEC. 37. Negotiation of negotiablr receipts by delivery.—A negotiable receipt may be negotiated by delivery—
(a) Where, by the terms of the receipt, the warehouseman —by delivery, undertakes to deliver the goods to the bearer, or
(b) Where, by the terms of the receipt, the warehouseman undertakes to deliver the goods to the order of a specified person, and such person or a subsequent indorsee of the receipt has indorsed it in blank or to bearer.
Where, by the terms of a negotiable receipt, the goods are deliverable to bearer or where a negotiable receipt has been indorsed in blank or to bearer, any holder may indorse the same to himself or to any other specified person, and in such case the receipt shall thereafter be negotiated only by the indorsement of such indorsee.
Negotiation of negotiable receipts by indorsement.
SEC. 38. Negotiation of negotiable receipts by indorsement.—A negotiable receipt may be negotiated by the indorsement of the person to whose order the goods are, by the terms of the receipt, deliverable. Such indorsement may be in blank, to bearer or to a specified person. If indorsed to a specified person, it may be again negotiated by the indorsement of such person in blank, to bearer or to another specified person. Subsequent negotiation may be made in like manner.
Transfer of receipts.
SEC. 39. Transfer of receipts.—A receipt which is not in such form that it can be negotiated by delivery may be transferred by the holder by delivery to a purchaser or donee.
A nonnegotiable receipt can not be negotiated, and the indorsement of such a receipt gives the transferee no additional right.
Who may negotiate a receipt.
SEC. 40. Who may negotiate a receipt.—A negotiable receipt may be negotiated—
(a) By the owner thereof, or
(b) By any person to whom the possession or custody of the receipt has been intrusted by the owner, if, by the terms of the receipt, the warehouseman undertakes to deliver the goods to the order of the person to whom the possession or custody of the receipt has been intrusted, or if at the time of such intrusting the receipt is in such form that it may be negotiated by delivery.
Rights of person to whom a receipt has been negotiated.
SEC. 41. Rights of person to whom a receipt has been negotiated.—A person to whom a negotiable receipt has been duly negotiated acquires thereby—
(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 such title to the goods as the depositor or person to whose order the goods were to be delivered by the terms of 'the receipt had or had ability to convey to a purchaser in good faith for value, and
(b) The direct obligation of the warehouseman to hold possession of the goods for him according to the terms of the receipt as fully as if the warehouseman had contracted directly with him.
Rights of person to whom a receipt has been transferred.
SEC. 42. Rights of person to whom a receipt has been transferred.—A person to whom a receipt has been transferred but not negotiated, acquires thereby, as against the transferer, the title of the goods, subject to the terms of any agreement with the transferer.
If the receipt is nonnegotiable such person also acquires the right to notify the warehouseman of the transfer to him of such receipt, and thereby to acquire the direct obligation of the warehouseman to hold possession of the goods for him according to the terms of the receipt.
Prior to the notification of the warehouseman by the transferer or transferee of a nonnegotiable receipt, the title of the transferee to the goods and the right to acquire the obligation of the warehouseman may be defeated by the levy of an attachment or execution upon the goods by a creditor of the transferer, or by a notification to the warehouseman by the transferer or a subsequent purchaser from the transferer of a subsequent sale of the goods by the transferer.
Transfer of neqotiable receipt ivilhout indorsement.
SEC. 43. Transfer of neqotiable receipt ivilhout indorsement.— Where a negotiable receipt is transferred tor value by delivery, and the indorsement of the transferer is essential for negotiation, the transferee acquires a right against the transferer to compel him to indorse the receipt, unless a contrary intention appears. The negotiation shall take effect as of the time when the indorsement is actually made.
Warranties on sale of receipt.
SEC. 44. Warranties on sale of receipt.—A person who for value negotiates or transfers a receipt by indorsement or delivery, including one who assigns for value a claim secured by a receipt, unless a contrary intention appears, warrants—
(a) That the receipt is genuine,
(b) That he has a legal right to negotiate or transfer it,
(cj That he has knowledge of no fact which would impair the validity or worth of the receipt, and
(d) That he has a right to transfer the title to the goods and that the goods are merchantable or fit for a particular purpose whenever such warranties would have been implied, if the contract of the parties had been to transfer without a receipt the goods represented thereby.
Indorser not a guarantor.
SEC. 45. Indorser not a guarantor.—The indorsement of a receipt shall not make the indorser liable for any failure on the part of the warehouseman or previous indorsers of the receipt to fulfill their respective obligations.
No warranty implied from accepting payment of a debt.
SEC. 46. No warranty implied from accepting payment of a debt.—A mortgagee, pledged, or holder for security of a receipt who in good faith demands or receives payment of the debt for which such receipt is 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 the genuineness of such receipt or the quantity or quality of the goods therein described.
When negotiation not impaired by fraud, mistake, or Fraud, mistake, or duress.
SEC. 47. When negotiation not impaired by fraud, mistake, or Fraud, mistake, or duress.—The validity of the negotiation of a receipt is not impaired by the fact that such negotiation was a breach of duty on the part of the person making the negotiation, or by the fact that the owner of the receipt was induced by fraud, mistake, or duress to intrust the possession or custody of the receipt to such person, if the person to whom the receipt was negotiated, or a person to whom the receipt was subsequently negotiated, paid value therefor, without notice of the breach of duty, or fraud, mistake, or duress.
Subsequent negotiation.
SEC. 48. Subsequent negotiation.—Where a person having sold, mortgaged, or pledged goods which are m a warehouse and for which a negotiable receipt has been issued, or having sold, mortgaged, or pledged the negotiable receipt representing such goods, continues in possession of the negotiable receipt, the subsequent negotiation thereof by that person under any sale, or other disposition thereof to any person receiving the 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 the goods or receipt had expressly authorized the subsequent negotiation.
Negotiation defeats vendor's lien.
SEC. 49. Negotiation defeats vendor's lien.—Where a negotiable receipt has been issued for goods, no sellers lien or right of stoppage in transitu shall defeat the rights of any purchaser for value in good faith to whom such receipt has been negotiated, whether such negotiation be prior or subsequent to the notification to the warehouseman who issued such receipt of the seller's claim to a lien or right of stoppage in transitu. Nor shall the warehouseman be obliged to deliver or justified in delivering the goods to an unpaid seller unless the receipt is first surrendered for cancellation.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
