Documents of Title

DOMINGUEZ, John Valro V.

What is?• Includes any:1. Bill of Lading2. Dock warrant3. Quedan4. Warehouse Receipt• Used in the ordinary course of business in the sale or

transfer of goods, a proof of possession or control of the goods, or authorizing or purporting to authorize the bearer to transfer or receive, either by indorsement or by delivery, such goods represented

• “Goods” includes all personal properties but not things in action or money of legal tender in the Philippines

• Goods are in a “deliverable state”when they are in such a state that the buyer would, under the contract, be bound to take delivery of them.

Kinds

• Negotiable: if by terms of which the carrier or the bailee who issued it undertakes to deliver the subject goods to the bearer of the document itself, or undertakes to deliver the goods to the order of a specified person and such person or a subsequent endorsee ha indorsed it in blank or to bearer. (1508)

Kinds

• Non-negotiable: by the terms of which the subject goods are deliverable to only a specified person. (1511)

• D.O.T. are all receipts of a bailee or orders upon a bailee.

• They are proofs of possession of the goods and are also authority or purporting to be an authority to transfer the goods covered by them.

• Mere clerical incorrectness of the description of the goods, will not affect the negotiability of such document.

Bill of Laiding

• A receipt of the goods shipped, reciting the date, place of shipment and describing the goods as to quantity, weight, dimensions, identification marks, condition, quality and value.

• It is both a receipt and a contract. In the former, it is an acknowledgement of the receipt of the property on board the his vessel by the owner of the vessel. In the latter, it is a contract to carry safely and deliver the said goods.

Dock Warrant

• An instrument given by dock owners to an importer of goods warehoused on the dock as a recognition of the importer’s title to the said goods, upon production of the bill of laiding.

Quedan

• A kind of warehouse receipt from commodities or goods such as:

1.Tobacco2.Rice3.Hemp4.Sugar

Warehouse Receipt

• It states that certain goods were received by the bailee to be delivered to the bearer or to the order of any person named in such receipt or to a specified person

Letters of Credit

• A commitment by the issuer that the party in whose favor it is issued and who can collect upon it will have his credit against the applicant of the letter duly paid in the amount therein specified.

Negotiation; How?

• By mere delivery• By indorsement coupled with deliery

• If the words “non-negotiable” or “not negotiable” are placed upon a document title which is actually negotiable, such words will not impair negotiability.

• A non-negotiable document of title cannot be negotiated by the holder. However, it can be assigned or transferred by delivery to a purchaser or donee.

• A non-negotiable document of title may be indorsed, the transferee, however, acquires no better rights than that of the transferor.

Who may negotiate?

• Owner• Person to whom possession or custody of the

document has been entrusted by the owner.• A mere finder of the document is not included

among those persons who may negotiate a negotiable document of title.

Negotiation; Concept

• The transfer from one person to another in such manner to constitute the transferee a holder thereof.

• Payable to bearer: deliver• Payable to order: indorsement and delivery

Delivery; Concept

• Transfer of possession of the document with the intent to transfer title.

• Every contract on a negotiable document is incomplete and revocable until delivery of the instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto.

Art. 1513• Applies to persons to whom a negotiable document of

title have been properly negotiated. 1. Title to the goods which the person negotiating can

convey to a buyer in good faith and for value and such title which the person to whose order the goods were to be delivered had or which he can convey to a purchaser in good faith and for value.

2. The direct obligation of the bailee issuing the document to hold the possession of th goods for him as fully as the bailee had contracted directly with him

Purchaser in Good Faith

• One who has purchased the property without notice of the defect of title of the seller and for a valuable consideration.

• Negotiation is effected at the time the indorsement is actually made.

Art. 1514

• The person to whom the document has been transferred but not negotiated has the following rights:

1.Title to the goods as against the transferor but subject to the terms of agreement

2.Right to notify the bailee of the transfer and to order to hold possession of the goods for him according to the terms of agreement.

Warranties

• A person who negotiates, transfers or assigns for value a document of title warrants:

1.The document is genuine2.Legal right to negotiate3.No knowledge of any defect of the validity of

the document4.Right to transfer title 5.Goods are fit for the purpose they are

acquired, if implied in the contract

• Person negotiating is not liable for any failure on the part of the bailee who issued the document, or of the previous indorsee of the document to perform their specific obligations.

• A negotiable document of title is not a negotiable instrument.

• The provisions of the Negotiable Instruments Law are not applicable.

Art 1518• The following do not impair the negotiablity of a

negotiable document of title:1.Negotiation constitute a breach of dutyby the

transferor2.Owner of the document was deprived of his

possession over the document by theft, fraud, duress, accident, mistake, or conversion

• The only conditions being required by law is that the transferee has paid a consideration and acted in good faith.

Art. 1519

• Goods in the possession of the bailee may not be attached or levied upon if any of the following exigencies are present:

1.Goods delivered by owner or authorized representative to the bailee or delivered by someone whose act of conveying the title to them would bind the owner

2.A document of title issued for the goods by the bailee

3. Goods are in the possession of the bailee.4. The document of title is not surrendered by the

bailee5. Its negotiation is enjoined or prohibited by the

court The bailee can only be compelled to deliver the

possession of the goods to the attaching creditor of the owner of the goods if the document has been surrendered, or there is a court order enjoining the negotiation of the document or requiring its surrender to the court.

• Attachment or Levy cannot be restricted if:1.Party who deposited is not the owner2.Depositor has no right to convey title to the

goods and his acts are not binding to the owner

3.Owner files the action to recover the goods; no third party is involved

4.Attachment or levy was made prior to the issuance of a negotiable document of title