Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

RECEIVED

TWENTIETH CONGRESS
First Regular Session
HOUSE BILL No. _E0

INTRODUCED BY REPRESENTATIVE JURDIN JESUS M. ROMUALDO

EXPLANATORY NOTE

This is a refiled bill originally filed in the 18" Congress authored by then Representative
Xavier Jesus D. Romualdo of the Lone District of Camiguin. | refiled this bill in the 19th
Congress, which successfully passed on Third Reading in the House of Representatives
and was transmitted to the Senate. Although two (2) counterpart bills were filed in the
Senate, all remained pending at the committee level alongside the House version

This is a very good platform for transforming the marketing chain in the Agricultural Sector
in the country and providing a legal framework for a warehouse receipt system

| am quoting a portion of the explanatory note of the 18" Congress version authored by
Hon. Xavier Jesus D. Romualdo to substantiate the rationale for its reintroduction:

“The bill seeks to strengthen and modernize the Warehouse Receipts
Law of 1912, as amended, otherwise known as Act No, 2137. The current
law establishes a relatively simple framework that allows farmers and
other stakeholders in the agricultural sector to obtain credit by depositing
their goods in a warehouse and utilizing warehouse receipts as tradable
instruments. It outlines the duties of warehouse operators, defines the
rights of depositors and receipt holders, facilitates the negotiability and
transferability of receipts, and protects good faith purchasers of
warehouse receipts. However, the law has become outdated and is no
longer sufficient to address the demands of today’s economy, particularly
for those in the agricultural sector who need improved access to finance.

This measure proposes the establishment of a modern, centralized,
electronic registry of warehouse receipts to be developed and maintained
by the Securities and Exchange Commission (SEC). This online registry
will eventually be integrated with other relevant registries and databases,
enabling stakeholders to securely and conveniently access, verify, and
transact warehouse receipts. The reform envisions a system in which
producers can deposit goods in accredited warehouses and obtain
warehouse receipts that are reliable, tradable, and acceptable as
collateral by financial institutions. In turn, this will facilitate credit flows to
farmers, agribusinesses, and other producers, reduce transaction costs,
and support rural and agricultural development’.

ON

BAS
a


Among the key features of the bill is the provision that only duly accredited
warehouse operators may issue warehouse receipts. These receipts must
include essential details such as the location of the warehouse, date and number
of issuances, storage charges, insurance coverage, and a description of the
goods. It distinguishes negotiable receipts—those which may be transferred by
indorsement or delivery to the bearer—from non-negotiable receipts that are
limited to a specified recipient. It further requires that non-negotiable receipts be
clearly marked as such to protect good faith purchasers.

The bill designates the SEC as the lead regulatory agency responsible for
warehouse receipts, including the accreditation of warehouse operators and
warehouses. The SEC may consult other relevant government agencies and
industry experts but retains final regulatory authority. All accredited operators are
required to be bonded and insured. The SEC is also authorized to establish
implementing rules and may engage third-party service providers to support the
development and maintenance of the electronic registry.

Additionally, all warehouses must maintain a Sub-Registry to track deposited
goods. Operators will be held liable for the loss or misrepresentation of goods
and must exercise the degree of care expected from a reasonably prudent owner.
Warehouse receipts may be transferred, pledged, or used as collateral, in line
with Republic Act No. 11057, otherwise known as the Personal Property Security
Act. The Philippine Guarantee Corporation (PHILGUARANTEE) is authorized to
extend guarantees for eligible loans secured by warehouse receipts or the
underlying goods, once the registry becomes operational

Warehouse operators shall have a statutory lien over stored goods for lawful
storage charges and other costs. The bill provides detailed mechanisms for
enforcing such liens, including public sale. It also enumerates criminal offenses
such as issuing receipts for goods not actually received, making false entries,
issuing unauthorized duplicates, or releasing goods without proper negotiation of
receipts. Violators are subject to imprisonment of up to ten (10) years or fines of
up to three times the value of the goods involved, or both. Operators found liable
shall also have their accreditation revoked.

Finally, the bill requires all registry entries and lists of accredited and de-
accredited operators to be accessible to the public, in accordance with
transparency standards under Philippine laws. Within ninety (90) days from the
effectivity of the Act, the SEC shall issue the necessary implementing rules and
regulations. Any inconsistencies with prior laws, including Act No. 2137, are
repealed or modified accordingly. The proposed law shall take effect fifteen (15)
days after its publication in the Official Gazette or in two (2) national newspapers
of general circulation.


In view of the foregoing, the swift passage of this measure is earnestly sought to
promote rural development, enhance access to affordable credit for the
agricultural sector, and establish a modern and efficient warehouse receipts
framework in the Philippines.

JURDIN M. ROMUALDO


ear aus wn

10
1
12
13
14
15
16
v7
18
19
20
2
22
23
24

Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session
House Bit No. £0

INTRODUCED BY REPRESENTATIVE JURDIN JESUS M. ROMUALDO

AN ACT
PROVIDING FOR THE REVISED WAREHOUSE RECEIPTS LAW OF THE
PHILIPPINES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:
CHAPTER 1
GENERAL PROVISIONS
SECTION 1. Title. ~ This Act shall be known as the “Revised Warehouse Receipts Law
of the Philippines”.
SEC. 2. Declaration of Poli

activity by increasing access, particularly for entities engaged in agricultural businesses, such as

— It is the policy of the State to promote economic

farming, to least cost credit by establishing a simplified, unified, and moder framework for the
storage of goods in warehouses and the subsequent trading of interests therein.
SEC. 3. Definition of Terms. — As used in this Act:
(a) Action refers to a counterclaim, set-off, or suit in equity as provided by law;
(b) Delivery refers to the voluntary transfer of control from one person to another;
(c) Deposit refers to the act of transferring actual possession of goods to a warehouse
operator:
(d) Electronic warehouse receipt refers to a warehouse receipt in electronic or digital form;
(e) Goods refer to chattel or merchandise in storage or which have been or are about to be
stored;
() Good faith refers to an abstract or comprehensive term that encompasses a sincere belief
‘or motive without any malice or the desire to defraud others, whether it be done
negligently or not;
(g) Guarantee refers to a guarantee specifically issued by the Philippine Guarantee
Corporation;
(h) Holder of a receipt refers to 2 person who has both constructive possession of such
receipt and a right of property therein;
(i) Insurance refers to any form of insurance, whether obtained from a public or private
entity, within the meaning of the Insurance Code of the Philippines;

(j) Modern refers to the adaptation and utilization of modern technology, including


Blockchain technology;

(k) Negotiable receipt refers to a receipt in which it is stated that the goods received will be
delivered to the bearer or to the order of any person named in such receipt;

() Non-Negotiable receipt refers to a receipt in which it is stated that the goods received
will be delivered to the depositor or to any other specified person;

(m) Order refers to an order by indorsement on the receipt;

(n) Owner refers to one who has the right of possession of a warehouse receipt but does not
include a mortgagee;

(0) Person refers to both natural and juridical persons;

(p) Purchase refers to the act of acquiring a warehouse receipt in the form of mortgage or
pledge;

(q) Registry refers to the Electronic Warehouse Receipts Registry;

(1) Release order refers to a written instrument issued by the owner of a receipt directing a
warehouse operator to release his goods to a specific person;

(s) Value refers to any consideration sufficient to support a simple contract. An antecedent
or pre-existing obligation, whether for money or not, constitutes value where a receipt is
taken either in satisfaction thereof ot as security therefor;

() Warehouse refers to a place that houses goods intended to be used for trading or
financing within the territory of the Philippines operated and maintained by a warehouse
operator;

(u) Warehouse operator refers to a person lawfully engaged in the business of housing
goods intended to be used for trading or financing and duly authorized under this Act;

(v) Warehouse receipt or receipt refers to a document issued by a warehouse operator in
accordance with Section 5 of this Act; and

(w) Writing refers to written documents or records, including electronic records.

SEC. 4. Person Who May Issue Receipts. — Warehouse receipts may only be issued by

a duly accredited warehouse operator.

SEC. 5. Form of Receipts. — Every warehouse receipt must contain the following
information:

(a) Location of the warehouse where the goods are stored;

(b) Date of the issue of the receipt;

(c) Consecutive number of the receipt;

(d) Statement whether the goods received will be delivered to the bearer, to a specified
person, or to a specified person or order;

(e) Amount up to which the goods covered by the receipt are insured, and the name of the
insuring entity;

(8) Rate of storage charges;

(g) Description of the goods or of the packages containing them:

(h) Signature of the warehouse operator, which may be made by an authorized agent;

(i) Fact of ownership if the receipt is issued for goods of which the warehouse operator is


2
B
4
15
16
v7
18
19
20
2
2
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
a
2

owner, either solely

tly, or in common with others; and
(j) Statement of the amount of advances made and of liabilities incurred for which the
warehouse operator claims a lien. If the precise amount of such advances made or of such
liabilities incurred is, at the time of the issue of receipt, unknown to the warehouse

ues it, a statement of the fact that advances have been

operator or to the agent who i

made or liabil

's incurred and the purpose thereof is sufficient.

‘A warehouse operator shall be liable to any person injured thereby for all damages caused

by the omission from a warehouse receipt of any of the terms herein required.

SEC. 6. Permissible Insertions. — A warehouse operator may insert in a receipt any
other terms and conditions: Provided, That such terms and conditions shall not:
(a) Be contrary to the provisions of this Act; or
(b) In any way impair the obligation to exercise that degree of care in the
safekeeping of the goods entrusted which a reasonably careful person would exercise in

regard to similar goods one owns.

No provision shall be inserted in a negotiable receipt that itis non-negotiable. Such a

provision, if inserted, shall be void.

SEC. 7. Failure to Mark “Non-Negotiable” or “Not Negotiable”. — A warehouse
operator shall clearly indicate or mark on the face of a non-negotiable receipt that it is “non-
negotiable” or “not negotiable”. In the absence of such marking, the receipt shall be deemed

negotiable.

This section shall not apply, however, to letters, memoranda, or written acknowledgment

of an informal character.

CHAPTER IL
ELECTRONIC WAREHOUSE RECEIPTS REGISTRY

SEC. 8. Electronic Warehouse Receipts Registry. — The Securities and Exchange
ed,

Commission (SEC) is hereby tasked with creating and maintaining a modern, online, centra
and nationwide Registry where all electronic warehouse receipts can be registered and accessed,
as well as rules and regulations pertaining specifically to registration and cancellation of
electronic warehouse receipts. The SEC. is likewise authorized to engage the services of third

parties in creating and maintaining the Registry

SEC. 9. Local Sub-Registry. - In addition to the Registry created and maintained by the
SEC, all warehouses must establish and maintain a Sub-Registry specifically for goods
deposited therein, Failure of a warehouse to keep a Sub-Registry in the warehouse, as well as any

fraud committed thereon, shall be grounds for the revocation of a warehouse’s accreditation.


we one

ee ya

10
i
12
13
14
15
16
7
18
19
20
2
22
23
24
25
26
7
28
29
30
31
32
33
34
35
36
37
38
39
40
4
42

SEC. 10, Transferability of Receipts, ~ All warehouse receipts, regardless of what is

stated upon their face, are transferable at the option of the holder.

SEC. 11. Collateralization of Receipts. — All warehouse receipts, regardless of what is
stated upon their face, may be collateralized in accordance with Republic Act No. 11057,

otherwise known as the Personal Property Security Act.

SEC. 12. Guarantee on All Warehouse Receipts Securing Financial Obligations.
Upon the establishment and operationalization of the Registry, the Philippine Guarantee
Corporation (PhilGuarantee), in accordance with its consolidated mandate under Executive
Order No. 58, Series of 2018, and to the extent allowed by the provisions of applicable laws,
may provide guarantee on eligible loans secured by warehouse receipts or the goods evidenced

thereby

CHAPTER III
ACCREDITATION

SEC. 13. Role of the SEC. — The SEC shall be the primary regulatory body in charge
of all matters related to warehouse receipts, including accreditation of warehouse operators and
warehouses. While the SEC may consult with other regulatory bodies including the Department
of Trade and Industry, the Department of Finance, and the Department of Agriculture,
warehousing experts, and other organizations that are representatives of a particular sector, the
SEC shall, at all times, be the lead agency in ensuring the successful implementation of this
‘Act: Provided, That the regulatory bodies, warehousing experts, and other organization
representative of a particular sector shall only be consulted on goods, crops, and practices they

are familiar with.

SEC. 14, Warehousing Experts. ~ The SEC is authorized to issue rules and regulations
in order to determine who shall qualify as warehousing experts. Warehousing experts must be
persons knowledgeable and with actual experience in operating and maintaining warehouses in

accordance with globally accepted best practices in warehousing.

SEC. 15. Functions and Responsibi
accrediting entity, the SEC shall have the following functions and responsibilities:

(a) Institute and operationalize a system of accreditation for warehouse operators: Provided,
‘That the criteria for accreditation shall include sound and measurable standards relating
to the ability and capacity to handle the storage of goods and the maintenance of the Sub-
Registry;

(b) Issue a certificate of accreditation to qualified warehouse operators and warehouses upon
determination that the requirements and criteria set for this purpose have been fully
satisfied: Provided, That the certificate of accreditation shall be valid only for such

period as may be prescribed under the implementing rules and regulations of this Act;


carvan ee

10
a
12
13
14
1s
16
17
18
19
20
21
2
2B
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39

(c) Monitor the performance of warehouse operators to ensure continuing compliance
with the provisions of this Act and its implementing rules and regulations;

(d) Suspend or revoke any certificate of accreditation upon due determination that a
warehouse operator no longer meets the criteria for accreditation;

(e) Require regular submission of reports by warehouse operators:

(® Collect reasonable accreditation and monitoring fees from warehouse operators which
shall be used for operational requirements:

(g) Submit an annual report to the President of the Philippines and the concerned committees
of both Houses of Congress of the Philippines; and

(h) Perform such other functions as may be necessary to accomplish the purposes and

objectives of this Act in relation to warehouse operators and warehouses.

SEC. 16. Accreditation of Warehouse Operators. — All warehouse operators issuing

warehouse receipts to be used for purposes other than mere storage and facilitation of logistics
are hereby required to seek the accreditation of the SEC. The SEC shall create rules and
regulations to facilitate the accreditation of warehouse operators. All warehouse operators who

are not accredited with the SEC are prohibited from issuing warehouse receipts.

SEC. 17. Screening Process for Warehouse Operators. ~ To ensure the credibility and
integrity of warehouse operators, the SEC is hereby authorized to create a screening process for
warehouse operators, which may include the administration of written examinations. The SEC
shall coordinate with other governmental bodies in order to create a viable screening process for
warehouse operators.

SEC. 18. Warehouse Operator’s Bond. ~ Prior to the operation of the warehouse, a
warehouse operator must post a bond to answer for any liabilities the warehouse operator may
have in the operation of the warehouse during the effectivity of its accreditation. The SEC is
hereby ordered and authorized to come up with rules and regulations concerning the warehouse
operator’s bond.

SEC. 19. Mandatory Insurance. — A warehouse operator shall produce insurance

coverage for his, her or its business and the warehouse or warehouses the warehouse operator
shall operate. No warehouse operator shall be accredited by the SEC unless the warehouse
operator is able to comply with this requirement. The SEC shalll issue the appropriate guidelines
for the mandatory insurance coverage requirement which shall include the minimum insurance
requirements for warehouses and warehouse operators: Provided, That the minimum insurance
requirements are in accordance with globally accepted best practices for warehouse and

warehouse operators.

SEC. 20. Effect of Lapse or Absence of Insurance. — The SEC may revoke the
accreditation of any warehouse operator that is found to be operating without appropriate
insurance coverage or with lapsed insurance policy, or whose warehouses are found to be

operating without a current insurance coverage.


Ce eVanue ene

10
i
2
13
4
45
16
7
18
19
20
21
2
23
24
25
26
7
28
29
30
31
32
33
34
35
36
37
38
39

a1
42

CHAPTER IV
OBLIGATIONS AND RIGHTS OF WAREHOUSE OPERATORS
UPON THEIR RECEIPTS:

SEC. 21. Obligation of a Warehouse Operator to Deliver Goods. — A warehouse
operator, in the absence of a lawful defense provided by this Act, is bound to deliver the goods
upon a demand made either by the holder of a receipt for the goods or by the depositor if such
demand is accompanied with:

(a) An offer to satisfy the warehouse operator's lien, if applicable;

(b) A written offer to surrender control of the receipt and perform all actions necessary to

surrender said control; and
(c) A readiness and willingness to sign an acknowledgement that the goods have been

delivered, if such signature is requested by the warehouse operator.

In case the warehouse operator refuses or fails to deliver the goods in compliance with a
demand by the holder or depositor, the burden shall be upon the warehouse operator to establish

the existence of a lawful defense for such refusal.

SEC. 22. Justification of Warehouse Operator in Delivering Goods. — A warehouse
operator is justified in delivering the goods to one who is:
(a) The person lawfully entitled to the possession of the goods, or one’s agent;
(b) A person who is either entitled to delivery by the terms of a non-negotiable receipt issued
for the goods, or who has written authority from the person so entitled; or
() A person in control of a negotiable receipt by the terms of which the goods are
deliverable, indorsed to, or in blank by the person to whom delivery was promised by the

terms of the receipt or by the immediate indorser.

SEC. 23. Warehouse Operator's Liability for Mis delivery of Goods. — Where a
warehouse operator delivers the goods to one who is not lawfully entitled to the possession
of them, the warehouse operator shall be liable to all persons having a right of the property or
possession of the goods, unless the warehouse operator had: (a) been requested by, or on
behalf of the person lawfully entitled to a right of property or possession of goods, not to
make such delivery; or (b) received verified information that the delivery about to be made was

to one who is not lawfully entitled to the possession of the goods.

SEC. 24. Negotiable Receipt Must be Cancelled for Complete Delivery of Goods.
Except as otherwise provided in this Act, a warehouse operator must cancel a negotiable receipt
once the goods are completely delivered. Failing to do so, the warehouse operator shall be liable
to any person who purchases in good faith such receipt for failure to deliver the goods to the
purchaser, whether the purchaser acquired title to the receipt before or after the delivery of the

goods by the warehouse operator


we evan erw ne

10
1
12
13
14
15
16
17
18
19
20
2a
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
4
42

SEC. 25. Negotiable Receipts Must be Marked for Partial Delivery of Goods. — Except
as otherwise provided in this Act, a warehouse operator must mark a negotiable receipt when
only a part of the goods are delivered. Failing to do so, the warehouse operator shall be liable to
anyone who purchases in good faith such receipt, whether such purchaser acquired title to the

receipt before or after the delivery of any portion of the goods by the warehouse operator.

SEC. 26, Altered Receipts. — The alteration of a receipt shall not excuse the warehouse

operator who issued it from any |

bility if such alteration was:
(a) Immaterial;
(b) Authorized; or

(c) Made without fraudulent intent.

If the alteration was authorized, the warehouse operator shall be liable according to the
terms of the receipt as altered. If the alteration was unauthorized but made without fraudulent
intent, the warchouse operator shall be liable according to the terms of the receipt as they were

before alteration.

Material and fraudulent alteration of a receipt shall not excuse the warehouse operator
who issued it from liability to deliver, according to the terms of the receipt as originally issued,
the goods for which it was issued: Provided, however, That the warehouse operator shall be

excused from any other liability.

SEC. 27. Warehouse Operator Cannot Have Title or Right to the Possession of Goods.
— A warehouse operator shall have no title or right to the possession of goods, unless such title or
right is derived directly or indirectly from a transfer made by the depositor at the time of, or
subsequent to, the deposit for storage, or from the warehouse operator's lien. A warehouse
operator cannot be excused from liability for refusing to deliver the goods according to the terms

of the receipt.

SEC. 28. Interpleader of Adverse Claimants. — \f more than one person claims the title

or possession of the goods, the warehouse operator may, either as a defense to an a

tion brought

against him, her or it for non-delivery of the goods or as an original suit, whichever is

appropriate, require all known claimants to interplead.

SEC. 29. Warehouse Operator Has Reasonable Time to Determine Validity of Claims.
— If aperson other than the depositor or person claiming under him, her or it has a claim
to the title or possession of goods, and the warehouse operator has information of such
claim, the warehouse operator shall be excused from liability for refusing to deliver the
goods, either to the depositor or person claiming under him, her or it to the adverse claimant until
the warehouse operator has had a reasonable time to ascertain the validity of the adverse

claim or to bring legal proceedings to compel claimants to interplead.


10
a
12
13
14
15
16
7
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

SEC. 30. Adverse Title is No Defense Except as Provided in This Act. ~ Except as
provided in this Act, no right or tile of a third person shall be a defense to an action brought by
the depositor or person claiming under him, her or it against the warehouse operator for failure to

deliver the goods according to the terms of the receipt

SEC. 31. Liability for Nonexistence or Misdescription of Goods. — A warehouse
operator shall be liable to the holder of a receipt for damages caused by the
nonexistence of the goods or by the failure of the goods to correspond with the description
thereof in the receipt at the time of its issue. If, however, the goods are described in a receipt
merely by a statement of marks or labels upon them or upon packages containing them
or by astatement that the goods are said to be goods of acertain kind or that the packages
containing the goods are said to contain goods of a certain kind or by words of like purport,
such statements, if true, shall not make liable the warehouse operator issuing the receipt,
although the goods are not of the kind which the marks or labels upon them indicate or of

the kind they were said to be by the depositor

SEC. 32. Liability for Care of Goods. — A warehouse operator shall be liable for any
loss or injury to the goods caused by his, her or its failure to exercise such care in regard to
them as reasonably vigilant owner of similar goods would exercise, but the warehouse
operator shall not be liable, in the absence of an agreement to the contrary, for any loss or injury

to the goods which could not have been avoided by the exercise of such care.

SEC. 33. Goods Must be Kept Separate. — Except as provided in the following section, a
warehouse operator shall keep the goods so far separate from goods of other depositors and from
other goods of the same depositor for which a separate receipt has been issued, as to permit at all

times the identification and redelivery of the goods deposited

SEC. 34. Fungible Goods May Be Commingled if Warehouse Operator Authorized.

If authorized by agreement or by custom, a warehouse operator may mingle fungible goods
with other goods of the same kind and grade. In such case, the various depositors of the mingled
goods shall own the entire mass in common and each depositor shall be entitled to such portion

thereof as the amount deposited by him, her or it bears to the whole.

SEC. 35. Liability of Warehouse Operator to Depositors of Commingled Goods. — The
warehouse operator shall be severally liable to each depositor for the care and redelivery of his,
her or its share of such mass to the same extent and under the same circumstances as if the goods

had been kept separate

SEC. 36. Attachment or Levy upon Goods for which a Negotiable Receipt Has Been
Issued. ~ If goods are delivered to a warehouse operator by the owner or by a person whose act
in conveying the title to them to a purchaser in good faith for value would bind the owner, and a

negotiable receipt is issued for them, they cannot thereafter, while in the possession of the


our ene

10
ca
12
13
14
15
16
7
18
19
20
aa
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

warehouse operator, be attached by garnishment or otherwise, or be levied upon under an
execution unless the receipt be first surrendered to the warehouse operator or its negotiation
enjoined, The warehouse operator shall, in no case, be compelled to deliver the actual possession
of the goods until the receipt is surrendered to the warehouse operator or impounded by the
court.

SEC. 37. Creditor’s Remedies to Reach Negotiable Receipts. ~ A creditor whose debtor
is the owner of a negotiable receipt shall be entitled to such aid from courts of appropriate
jurisdiction, by injunction and otherwise, in attaching such receipt or in satisfying the
claim by means thereof as is allowed by law or in equity within the jurisdiction of the
Philippines in regard to property which cannot readily be attached or levied upon by ordinary

legal process.

SEC. 38. What Claims Are Included in the Warehouse Operator's Lien. — Subject to
the provisions of this Act, a warehouse operator shall have a lien on goods deposited or on the
proceeds thereof in his, her or its hand; for all lawful charges for storage and preservation of the
goods; for all lawful claims for money advanced, interest, insurance, transportation, labor,
weighing, coopering and other charges and expenses in relation to such goods; for all
reasonable charges and expenses for notice, and advertisements of sale; and for sale of the

goods where default had been made in satisfying the warehouse operator's lien.

SEC. 39. Against What Property the Warehouse Operator’s Lien May be Enforced. -
Subject to the provisions of this Act, a warehouse operator’s lien may be enforced:

(a) Against all goods, whenever deposited, belonging to the person who is liable as debtor
for the claims in regard to which the lien is asserted; and

(b) Against all goods belonging to others which have been deposited at any time by the
person who is liable as debtor for the claims in regard to which the lien is asserted if such
person had been so entrusted with the possession of goods that a pledge of the same by
him, her or it at the time of the deposit to one who took the goods in good faith for value

would have been valid.

SEC. 40. How Warehouse Operator’s Lien May be Lost. ~ A warehouse operator loses

his, her or its lien upon goods:

(a) By surrendering possession thereof, or
(b) By refusing to deliver the goods when a demand is made with which the warehouse

operator is bound to comply under the provisions of this Act.

SEC. 41. Negotiable Receipts Must State Charges for Which the Lien is Claimed. —If a
negotiable receipt is issued for goods, the warehouse operator shall have no lien thereon except
for charges for storage of goods subsequent to the date of the receipt unless the receipt expressly
enumerated other charges for which a lien is claimed. In such case, there shall be a lien for the
charges enumerated so far as they are within the terms of Section 25 although the amount of the

charges so enumerated is not stated in the receipt


wey anes ene

10
ote
12
B
4
15
16
7
18
19
20
au
2
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

SEC. 42. Warehouse Operator Need Not Deliver until Lien is Satisfied. — A warehouse
operator having a lien valid against the person demanding the goods may refuse to deliver the

goods to him, her or it until the lien is satisfied.

SEC. 43. Warehouse Operator's Lien Does Not Preclude Other Remedies. — Whether a
warehouse operator has or has not a lien upon the goods, the warehouse operator is entitled to all
remedies allowed by law to a creditor against a debtor for the collection from the depositor of all
charges and advances which the depositor has expressly or impliedly contracted with the

warehouseman to pay.

SEC. 44. Satisfaction of Lien by Sale, — A warehouse operator's lien for a claim which
has become due may be satisfied as follows:

(a) An itemized statement of the warehouse operator’s claim, showing the sum due at the
time of the notice and the date or dates when it becomes due;

(b) A brief description of the goods against which the lien exists;

(c) A demand that the amount of the claim as stated in the notice of such further claim
as shall accrue, shall be paid on or before a day mentioned, not less than ten (10) days
from the delivery of the notice if it is personally delivered, or from the time when the
notice shall reach its destination, according to the due course of post, if the notice is sent
by mail; and

(d) A statement that unless the claim is paid within the time specified, the goods will be

advertised for sale and sold by auction at a specified time and place.

In accordance with the terms of a notice so given, a sale of the goods by auction may be
had to satisfy any valid claim of the warehouse operator for which the warehouse operator has a
lien on the goods. The sale shall be had in the place where the lien was acquired, or, if such
place is manifestly unsuitable for the purpose of the claim specified in the notice to the depositor
has elapsed, and advertisement of the sale, describing the goods to be sold, and stating the name
of the owner or person on whose account the goods are held, and the time and place of the sale,
shall be published once a week for two (2) consecutive weeks in a newspaper published in the
place where such sale is to be held. The sale shall not be held less than fifteen (15) days from the
time of the first publication. If thereis no newspaper published in such place, the advertisement
shall be posted at least ten (10) days before such sale in not less than six (6) conspicuous places

therein.

From the proceeds of such sale, the warehouse operator shall satisfy his, her or its lien
including the reasonable charges of notice, advertisement and sale. The balance, if any, of such
proceeds shall be held by the warehouse operator and delivered on demand to the person to

whom the warehouse operator would have been bound to deliver or justified in delivering goods.

‘At any time before the goods are so sold, any person claiming a right of property or

possession therein may pay the warehouse operator the amount necessary to satisfy his, her or its


Rw Ne

evan

10
u
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

lien and to pay the reasonable expenses and liabilities incurred in serving notices and advertising
and preparing for the sale up to the time of such payment. The warehouse operator shall deliver
the goods to the person making payment if the warehouse operator is a person entitled, under the
provisions of this Act, to the possession of the goods on payment of charges thereon.
Otherwise, the warehouse operator shall retain the possession of the goods according to the terms

of the original contract of deposit.

SEC. 45. Perishable and Hazardous Goods, ~ If goods are of a perishable nature, or by
keeping will deteriorate greatly in value, or, by their order, leakage, inflammability, or explosive
nature, will be liable to injure other property, the warehouse operator may give such notice to the

‘owner or to the person in whose names the goods are stored, as is reasonable and possible under

the circumstances, to satisfy the lien upon such goods and to remove them from the warehouse
and in the event of the failure of such person to satisfy the lien and to receive the goods within
the time so specified, the warehouse operator may sell the goods at public or private
sale without advertising, If the warehouse operator, after a reasonable effort, is unable to sell
such goods, the warehouse operator may dispose of them in any lawful manner and shall incur

no liability by reason thereof.

‘The proceeds of any sale made under the terms of this section shall be disposed of in the

same way as the proceeds of sales made under the terms of the preceding section.

SEC. 46. Other Methods of Enforcing Lien. ~The remedy for enforcing a lien herein
provided does not preclude any other remedies allowed by law for the enforcement of a lien
against personal property nor bar the right to recover so much of the warehouse operator's claim

as shall not be paid by the proceeds of the sale of the property.

SEC. 47. Effect of Sale. — After goods have been lawfully sold to satisfy a warehouse
operator's lien, or have been lawfully sold or disposed of because of their perishable or
hazardous nature, the warehouse operator shall not thereafter be liable for failure to deliver
the goods to the depositor or owner of the goods or to a holder of the receipt given for the

goods when they were deposited, even if such receipt be negotiable.

CHAPTER V
NEGOTIATION AND TRANSFER OF RECEIPTS

SEC. 48. Negotiation of Negotiable Receipt 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.


RW N

eC arvanu

10
1
12
13
4
15
16
aw
18
19
20
a
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39

a
42

SEC. 49. Transfer of Receipt. — A receipt may be transferred by the holder to a

purchaser or donee.

A non-negotiable receipt cannot be negotiated, and the indorsement of such a receipt

gives the transferee no additional right.

SEC. 50. Who May Negotiate a Receipt. ~ A negotiable receipt may be negotiated:

(a) By the owner thereof; or

(b) By any person to whom the constructive possession of the receipt has been entrusted by
the owner, if, by the terms of the receipt, the warehouse operator undertakes to deliver the
goods to the order of the person to whom the constructive possession of the receipt has

been entrusted.

SEC. 51. Rights of a 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, her or it 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 warehouse operator to hold possession of the goods for him,
her or it according to the terms of the receipt as fully as if the warehouse operator

contracted directly with him, her or it.

SEC. 52. Rights of Person to Whom Receipt Has Been Transferred. ~ A person to
whom a receipt has been transferred but not negotiated acquires thereby, as against the

transferor, the title of the goods subject to the terms of any agreement with the transferor.

If the receipt is non-negotiable, such person also acquires the right to notify the

warehouse operator of the transfer to him, her or it of such receipt and thereby to acquire the

direct obligation of the warehouse operator to hold possession of the goods for him, her or it

according to the terms of the receipt.

Prior to the notification of the warehouse operator by the transferor or transferee of a
non-negotiable receipt, the title of the transferee to the goods and the right to acquire the
obligation of the warehouse operator may be defeated by the levy of an attachment or execution
upon the goods by acreditor of the transferor or by a notification to the warehouse operator
by the transferor or a subsequent purchaser from the transferor of a subsequent sale of the goods

by the transferor.

SEC. 53. Transfer of Negotiable Receipt Without Indorsement. — Where a negotiable

receipt is transferred for value and the indorsement of the transferor is essential for negotiation,


Cavan es one

10
i
12
13
14
15
16
wv
18
19
20
a
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

the transferee acquires a right against the transferor to compel him, her or it to indorse the receipt
unless a contrary intention appears. The negotiation shall take effect as of the time when the

indorsement is actually made.

SEC. 54. Warranties of a 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 genuin

(b) That the person has a legal right to negotiate or transfer it;

(c) That the person has knowledge of no fact which would impair the validity or worth of the
receipt; and

(@) That the person 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 of the goods

represented thereby

SEC. 55. Indorser not 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.

SEC. 56. No Warranty Implied from Accepting Payment of a Debt. ~ A mortgagee,
pledge, 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.

SEC. 57. When Negotiation Not Impaired by Fraud, Mistake, or Duress. — The

ion was a

validity of the negotiation of a receipt is not impaired by the fact that such negoti
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 or to entrust the constructive possession 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.

SEC. 58. Subsequent Negotiation. ~ Where a person having sold, mortgaged, or pledged
goods which are in warehouse and for which a negotiable receipt has been issued, or having
sold, mortgaged, or pledged the negotiable receipt representing such goods, continues in
constructive possession of the negotiable receipt, the subsequent negotiation thereof by the
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.


eer anes wn

10
u
12
13
14
15
16
7
18
19
20
2.
2
23
24
25
26
7
28
29
30
31
32
33
34
35
36
37
38
39
40
a
42

SEC. 59. Negotiation Defeats Vendor's Lien. ~ Where a negotiable receipt has been
issued for goods, no seller’s 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 warehouse operator
who issued such receipt of the seller’s claim to a lien or right of stoppage in transitu
Nor shall the warehouse operator be obliged to deliver or justified in delivering the goods to an

seller unless the receipt is first surrendered for cancellation.

CHAPTER VI
CRIMINAL OFFENSES

SEC. 60. Issuance of Receipt for Goods Not Received. — A warehouse operator or his,
her or its agent, officer, or employee who issues or aids in the issuance of a warehouse
receipt, knowing that the goods mentioned therein are not actually in his, her or its
custody, shall be punished by imprisonment of ten (10) years, or a fine equal to triple the value
of the goods involved, or both, at the discretion of the court, and the accreditation of the

warehouse operator shall likewise be revoked.

SEC. 61. Issuance of Receipt Containing False Statement, ~ A warehouse operator ot
his, her or its agent, officer, or employee who fraudulently issues or aids in fraudulent issuance
of a warehouse receipt for goods, knowing that it contains a false statement, shall be
punished by imprisonment of ten (10) years, or a fine equal to triple the value of the goods
involved, or both, at the discretion of the court, and the accreditation of the warehouse

operator shall likewise be revoked.

SEC. 62. Creation of Fraudulent Duplicate Receipt. — A warehouse operator or his, her
or its agent, officer, or employee who issues or aids in issuing a second electronic warehouse
receipt for goods, knowing that there is an existing prior electronic warehouse receipt for the
same goods or any part of them, shall be punished by imprisonment of ten (10) years, or a
fine equal to triple the value of the goods involved, or both, at the discretion of the court, and the
accreditation of the warehouse operator shall likewise be revoked. This provision shall not be
applicable if the issuance of a subsequent warehouse receipt was made on the basis of an order

issued by a court of competent jurisdiction.

SEC. 63. Issue for Warehouse Operator’s Goods or Receipts Which Do Not State That
Fact. — Where goods are deposited with or held by a warehouse operator of which the
warehouse operator is owner, either solely or jointly or in common with others, such
warehouse operator, or any of his, her or its agents, officers, or employees who, knowing
this ownership, issues or aids in issuing a negotiable receipt for such goods which does
not state such ownership, shall be punished by imprisonment of ten (10) years, or a fine
equal to triple the value of the goods involved, or both, at the discretion of the court, and the

accreditation of the warehouse operator shall likewise be revoked.


one wenn

10
1
12
13
14
15
16
17
18
19
20
2
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
a
a2

SEC. 64. Delivery of Goods Without Obtaining Negotiable Receipt. — A warehouse
operator or his, her or its agent, officer, or employee that delivers goods out of the possession
of such warehouse operator, knowing that a negotiable receipt, the negotiation of which would
transfer the right to the possession of such goods is outstanding and uncanceled, without
obtaining the constructive possession of such receipt at or before the time of such delivery,
except as otherwise authorized in this Act, shall be punished by imprisonment of ten (10) years,
or a fine equal to triple the value of the goods involved, or both, at the discretion of the court,

and the accreditation of the warehouse operator shall likewise be revoked.

SEC. 65. Negotiation of Receipt for Mortgaged Goods. — Any person who deposits
goods which the person has no title, or upon which there is a lien or mortgage, and who takes for

such goods a negotiable receipt which w.

afterwards negotiated for value with intent to deceive
and without disclosing the want of title or the existence of the lien or mortgage. shall be
punished by imprisonment of ten (10) years, or a fine equal to triple the value of the goods

involved, or both, at the discretion of the court.

SEC. 66. Unlawful Release of Goods Covered by Warehouse Receipt. — A warehouse
operator or his, her or its agent, officer, or employee that releases, without any legal basis, any
goods covered by an electronic warehouse receipt shall be punished by imprisonment of ten
(10) years, or a fine equal to triple the value of the goods involved, or both, at the

discretion of the court, and the accreditation of the warehouse operator shall likewise be revoked.

CHAPTER VII
FINAL PROVISIONS

SEC. 67. Inter-Connected Registry Information. — Where feasible, the SEC shall
coordinate with other government agencies in order to link up the Registry provided under this,

‘Act with other registries.

SEC. 68. Public Information. — All entries in the Registry of electronic warehouse
receipts shall be available to the public. Likewise, the list of accredited warehouse operators, as

well as the list of warehouse operators whose accreditation have been revoked, shail be available

to the public, The SEC shall formulate the guidelines to facilitate the orderly and expedient
access to such information by the public, in accordance with existing standards under Philippine

laws.

SEC. 69. Dispute Resolution. — Except in cases specifically placed under the jurisdiction
of the SEC under this Act, as well as cases where the electronic warehouse receipt includes a
valid arbitration clause, all actions arising from this Act shall fall under the jurisdiction of the

Regional Trial Courts.


we evan ne one

10
cre
12
13
14
15
16
aw
18
19
20
21
2
23
24
25
26
2
28

SEC. 70, Appropriations. — The initial funding for the implementation of this Act shall
be charged against the current operating budget of the SEC. Thereafter, the amount necessary for
its continued implementation shall be included in the annual operating budget of the SEC.

SEC. 71. Implementing Rules and Regulations, — Within ninety (90) days after the
effectivity of this Act, the SEC shall promulgate rules and regulations for the implementation of

this Act.

SEC. 72. Cases Not Provided For in this Act. — Any case not provided for in this Act

shall be governed by the provisions of existing legislation, or in default thereof, by the

established rules of commerce.

SEC. 73. Application of this Act. — The provisions of this Act do not apply to receipts

made and delivered prior to the taking effect hereof.

SEC. 74. Separability Clause. — If any provision of this Act is declared invalid or
unconstitutional, the other provisions hereof which are not affected thereby shall continue to be

in full force and effect.

SEC. 75. Repealing Clause, — Act No. 2137, otherwise known as the Warehouse
Receipts Law, is hereby repealed. Any law, presidential decree or issuance, executive order,
letter of instruction, administrative order, rule or regulation contrary to or inconsistent with any

provision of this Act is hereby repealed or modified accordingly.

SEC. 76. Effectivity. — This Act shall take effect fifteen (15) days after its publication in

the Official Gazette or in a newspaper of general circulation.

Approved,