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*
G.R. No. 119231. April 18, 1996.

PHILIPPINE NATIONAL BANK, petitioner, vs. HON.

PRES. JUDGE BENITO C. SE, JR., RTC, BR. 45,
MANILA; NOAHS ARK SUGAR REFINERY; ALBERTO
T. LOOYUKO, JIMMY T. GO and WILSON T. GO,
respondents.

Warehouse Receipts Law (R.A. 2137); Warehousemans Liens;

Actions; Judgments; A prior judgment holding that a party is a
warehouseman obligated to deliver sugar stocks covered by the
Warehouse Receipts does not necessarily carry with it a denial of
the warehousemans lien over the same sugar stocks.We have
carefully examined our resolution, dated March 9, 1994, which
denied Noahs Arks motion for clarification of our decision, dated
September 1, 1993, wherein we affirmed in full and adopted the
Court of Appeals earlier decision, dated December 13, 1991, in
CAG.R. SP No. 25938.

______________

* FIRST DIVISION.

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Philippine National Bank vs. Se, Jr.

We are not persuaded by the petitioners argument that our said

resolution carried with it the denial of the warehousemans lien
over the sugar stocks covered by the subject Warehouse Receipts.
We have simply resolved and upheld in our decision, dated
September 1, 1993, the propriety of summary judgment which
was then assailed by private respondents. In effect, we ruled
therein that, considering the circumstances obtaining before the
trial court, the issuance of the Warehouse Receipts not being
disputed by the private respondents, a summary judgment in

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favor of PNB was proper. We in effect further affirmed the finding

that Noahs Ark is a warehouseman which was obliged to deliver
the sugar stocks covered by the Warehouse Receipts pledged by
Cresencia K. Zoleta and Luis T. Ramos to the petitioner pursuant
to the pertinent provisions of Republic Act 2137. In disposing of
the private respondents motion for clarification, we could not
contemplate the matter of warehousemans lien because the issue
to be finally resolved then was the claim of private respondents
for retaining ownership of the stocks of sugar covered by the
endorsed quedans. Stated otherwise, there was no point in taking
up the issue of warehousemans lien since the matter of
ownership was as yet being determined. Neither could storage
fees be due then while no one has been declared the owner of the
sugar stocks in question.
Same; Same; Even in the absence of a provision in the
Warehouse Receipts, law and equity dictate the payment of the
warehousemans lien pursuant to Sections 27 and 31 of the
Warehouse Receipts Law.Petitioner anchors its claim against
private respondents on the five (5) Warehouse Receipts issued by
the latter to thirdparty defendants Rosa Ng Sy of RNS
Merchandising and Teresita Ng of St. Therese Merchandising,
which found their way to petitioner after they were negotiated to
them by Luis T. Ramos and Cresencia K. Zoleta for a loan of
P39.1 Million. Accordingly, petitioner PNB is 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 warehousemans lien pursuant to Sections 27 and 31 of the
Warehouse Receipts Law (R.A. 2137).
Same; Same; Contracts; Receipts; As contracts, warehouse
receipts must be respected by authority of Article 1159 of the Civil
Code.Considering that petitioner does not deny the existence,
validity and genuineness of the Warehouse Receipts on which it

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382 SUPREME COURT REPORTS ANNOTATED

Philippine National Bank vs. Se, Jr.

anchors its claim for payment against private respondents, it

cannot disclaim liability for the payment of the storage fees
stipulated therein. As contracts, the receipts must be respected by
authority of Article 1159 of the Civil Code, to wit: ART. 1159.
Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith.

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Same; Same; Same; Same; Estoppel; A party is in estoppel in

disclaiming liability for the payment of storage fees due the
warehouseman while 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.
Petitioner is in estoppel in disclaiming liability for the payment of
storage fees due the private respondents as warehouseman while
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
warehousemans lien for storage fees and preservation expenses.
Petitioner may not now retrieve the sugar stocks without paying
the lien due private respondents as warehouseman.
Same; Same; Imperative is the right of the warehouseman to
demand payment of his lien because he loses his lien upon goods
by surrendering possession thereof.In view of the foregoing, the
rule may be simplified thus: While the PNB is entitled to the
stocks of sugar as the endorsee of the quedans, delivery to it shall
be effected only upon payment of the storage fees. Imperative is
the right of the warehouseman to demand payment of his lien at
this juncture, because, in accordance with Section 29 of the
Warehouse Receipts Law, the warehouseman loses his lien upon
goods by surrendering possession thereof. In other words, the lien
may be lost where the warehouseman surrenders the possession
of the goods without requiring payment of his lien, because a
warehousemans lien is possessory in nature.

PETITION to nullify a decision of the Regional Trial Court

of Manila, Br. 45.

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Philippine National Bank vs. Se, Jr.

The facts are stated in the opinion of the Court.

Rolan A. Nieto for petitioner.
Madella & Cruz Law Offices for private respondents.

HERMOSISIMA, JR., J.:

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The source of conflict herein is the question as to whether

the Philippine National Bank should pay storage fees for
sugar stocks covered by five (5) Warehouse Receipts stored
in the warehouse of private respondents in the face of the
Court of Appeals decision (affirmed by the Supreme Court)
declaring the Philippine National Bank as the owner of the
said sugar stocks and ordering their delivery to the said
bank. From the same facts but on a different perspective, it
can be said that the issue is: Can the warehouseman
enforce his warehousemans lien before delivering the
sugar stocks as ordered by the Court of Appeals or need he
file a separate action to enforce payment of storage fees?
The herein petitioner seeks to annul: (1) the Resolution
of respondent Judge Benito C. Se, Jr. of the Regional Trial
Court of Manila, Branch 45, dated December 20, 1994, in
Civil Case No. 9053023, authorizing reception of evidence
to establish the claim of respondents Noahs Ark Sugar
Refinery, et al., for storage fees and preservation expenses
over sugar stocks covered by five (5) Warehouse Receipts
which is in the nature of a warehousemans lien; and (2)
the Resolution of the said respondent Judge, dated March
1, 1995, declaring the validity of private respondents
warehousemans lien under Section 27 of Republic Act No.
2137 and ordering that execution of the Court of Appeals
decision, dated December 13, 1991, be in effect held in
abeyance until the full amount of the warehousemans lien
on the sugar stocks covered by five (5) quedans subject of
the action shall have been satisfied conformably with the
provisions of Section 31 of Republic Act 2137.
Also prayed for by the petition is a Writ of Prohibition to
require respondent RTC Judge to desist from further
proceeding with Civil Case No. 9053023, except order the
execution

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Philippine National Bank vs. Se, Jr.

of the Supreme Court judgment; and a Writ of Mandamus

to compel respondent RTC Judge to issue a Writ of
Execution in accordance with the said executory Supreme
Court decision.

THE FACTS

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In accordance with Act No. 2137, the Warehouse Receipts

Law, Noahs Ark Sugar Refinery issued on several dates,
the following Warehouse Receipts (Quedans): (a) March 1,
1989, Receipt No. 18062, covering sugar deposited by Rosa
Sy; (b) March 7, 1989, Receipt No. 18080, covering sugar
deposited by RNS Merchandising (Rosa Ng Sy); (c) March
21, 1989, Receipt No. 18081, covering sugar deposited by
St. Therese Merchandising; (d) March 31, 1989, Receipt No.
18086, covering sugar deposited by St. Therese
Merchandising; and (e) April 1, 1989, Receipt No. 18087,
covering sugar deposited by RNS Merchandising. The
receipts are substantially in the form, and contains the
terms, prescribed for negotiable warehouse receipts by
Section 2 of the law.
Subsequently, Warehouse Receipts Nos. 18080 and
18081 were negotiated and endorsed to Luis T. Ramos; and
Receipts Nos. 18086, 18087 and 18062 were negotiated and
endorsed to Cresencia K. Zoleta. Ramos and Zoleta then
used the quedans as security for two loan agreementsone
for P15.6 million and the other for P23.5 millionobtained
by them from the Philippine National Bank. The
aforementioned quedans were endorsed by them to the
Philippine National Bank.
Luis T. Ramos and Cresencia K. Zoleta failed to pay
their loans upon maturity on January 9, 1990.
Consequently, on March 16, 1990, the Philippine National
Bank wrote to Noahs Ark Sugar Refinery demanding
delivery of the sugar stocks covered by the quedans
endorsed to it by Zoleta and Ramos. Noahs Ark Sugar
Refinery refused to comply with the demand alleging
ownership thereof, for which reason the Philippine
National Bank filed with the Regional Trial Court of
Manila a verified complaint for Specific Performance with
Damages and Application for Writ of Attachment against
Noahs Ark Sugar Refinery, Alberto T. Looyuko, Jimmy T.
Go
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Philippine National Bank vs. Se, Jr.

and Wilson T. Go, the last three being identified as the sole
proprietor, managing partner, and Executive Vice
President of Noahs Ark, respectively.
Respondent Judge Benito C. Se, Jr., in whose sala the
case was raffled, denied the Application for Preliminary
Attachment. Reconsideration therefor was likewise denied.
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Noahs Ark and its codefendants filed an Answer with

Counterclaim and ThirdParty Complaint in which they
claimed that they are the owners of the subject quedans
and the sugar represented therein, averring as they did
that:

9. *** In an agreement dated April 1, 1989, defendants agreed to

sell to Rosa Ng Sy of RNS Merchandising and Teresita Ng of St.
Therese Merchandising the total volume of sugar indicated in the
quedans stored at Noahs Ark Sugar Refinery for a total
consideration of P63,000,000.00, *** The corresponding payments
in the form of checks issued by the vendees in favor of defendants
were subsequently dishonored by the drawee banks by reason of
payment stopped and drawn against insufficient funds, ***
Upon proper notification to said vendees and plaintiff in due
course, defendants refused to deliver to vendees therein the
quantity of sugar covered by the subject quedans.
10. *** Considering that the vendees and first endorsers of
subject quedans did not acquire ownership thereof, the
subsequent endorsers and plaintiff itself did not acquire a better
1
right of ownership than the original vendees/first endorsers.

The Answer incorporated a ThirdParty Complaint by

Alberto T. Looyuko, Jimmy T. Go and Wilson T. Go, doing
business under the trade name and style Noahs Ark Sugar
Refinery against Rosa Ng Sy and Teresita Ng, praying that
the latter be ordered to deliver or return to them the
quedans (previously endorsed to PNB and the subject of the
suit) and pay damages and litigation expenses.
The Answer of Rosa Ng Sy and Teresita Ng, dated
September 6, 1990, one of avoidance, is essentially to the
effect

_______________

1 Answer with Counterclaim and ThirdParty Complaint, p. 3; Rollo, p.

47.

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386 SUPREME COURT REPORTS ANNOTATED

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that the transaction between them, on the one hand, and

Jimmy T. Go, on the other, concerning the quedans and the
sugar stocks covered by them was merely a simulated one
being part of the latters complex banking schemes and

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financial maneuvers, and thus, they are not answerable in

damages to him.
On January 31, 1991, the Philippine National Bank filed
a Motion for Summary Judgment in favor of the plaintiff as
against the defendants for the reliefs prayed for in the
complaint.
On May 2, 1991, the Regional Trial Court issued an
order denying the Motion for Summary Judgment.
Thereupon, the Philippine National Bank filed a Petition
for Certiorari with the Court of Appeals, docketed as CA
G.R. SP No. 25938 on December 13, 1991.
Pertinent portions of the decision of the Court of Appeals
read:

In issuing the questioned Orders, the respondent Court ruled

that questions of law should be resolved after and not before, the
questions of fact are properly litigated. A scrutiny of defendants
affirmative defenses does not show material questions of fact as to
the alleged nonpayment of purchase price by the vendees/first
endorsers, and which nonpayment is not disputed by PNB as it
does not materially affect PNBs title to the sugar stocks as holder
of the negotiable quedans.
What is determinative of the propriety of summary judgment is
not the existence of conflicting claims from prior parties but
whether from an examination of the pleadings, depositions,
admissions and documents on file, the defenses as to the main
issue do not tender material questions of fact (see Garcia vs.
Court of Appeals, 167 SCRA 815) or the issues thus tendered are
in fact sham, fictitious, contrived, set up in bad faith or so
unsubstantial as not to constitute genuine issues for trial. (See
Vergara vs. Suelto, et al., 156 SCRA 753; Mercado, et al. vs. Court
of Appeals, 162 SCRA 75). The questioned Orders themselves do
not specify what material facts are in issue. (See Sec. 4, Rule 34,
Rules of Court).
To require a trial notwithstanding pertinent allegations of the
pleadings and other facts appearing on the record, would
constitute a waste of time and an injustice to the PNB whose
rights to relief to

387

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Philippine National Bank vs. Se, Jr.

which it is plainly entitled would be further delayed to its

prejudice.
In issuing the questioned Orders, We find the respondent
Court to have acted in grave abuse of discretion which justify

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holding null and void and setting aside the Orders dated May 2
and July 4, 1990 of respondent Court, and that a summary
judgment be rendered forthwith in favor of the PNB against
Noahs Ark Sugar Refinery, et al., as prayed for in petitioners
2
Motion for Summary Judgment.

On December 13, 1991, the Court of Appeals nullified and

set aside the orders of May 2 and July 4, 1990 of the
Regional Trial Court and ordered the trial court to render
summary judgment in favor of the PNB. On June 18, 1992,
the trial court rendered judgment dismissing plaintiffs
complaint against private respondents for lack of cause of
action and likewise dismissed private respondents
counterclaim against PNB and of the ThirdParty
Complaint and the ThirdParty Defendants Counterclaim.
On September 4, 1992, the trial court denied PNBs Motion
for Reconsideration.
On June 9, 1992, the PNB filed an appeal from the RTC
decision with the Supreme Court, G.R. No. 107243, by way
of a Petition for Review on Certiorari under Rule 45 of the
Rules of Court. This Court rendered judgment on
September 1, 1993, the dispositive portion of which reads:

WHEREFORE, the trial judges decision in Civil Case No. 90

53023, dated June 18, 1992, is reversed and set aside and a new
one rendered conformably with the final and executory decision of
the Court of Appeals in CAG.R. SP. No. 25938, ordering the
private respondents Noahs Ark Sugar Refinery, Alberto T.
Looyuko, Jimmy T. Go and Wilson T. Go, jointly and severally:

(a) to deliver to the petitioner Philippine National Bank, the

sugar stocks covered by the Warehouse Receipts/Quedans
which are now in the latters possession as holder for
value and in due course; or alternatively, to pay (said)
plaintiff actual damages in the amount of P39.1 million,
with legal interest thereon from the filing of the complaint
until full payment; and

_______________

2 Quoted in the Petition, p. 8; Rollo, p. 9.

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(b) to pay plaintiff Philippine National Bank attorneys fees,

litigation expenses and judicial costs hereby fixed at the

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amount of One Hundred Fifty Thousand Pesos

(P150,000.00) as well as the costs.
3
SO ORDERED.

On September 29, 1993, private respondents moved for

reconsideration of this decision. A Supplemental/Second
Motion for Reconsideration with leave of court was filed by
private respondents on November 8, 1993. We denied
private respondents motion on January 10, 1994.
Private respondents filed a Motion Seeking Clarification
of the Decision, dated September 1, 1993. We denied this
motion in this manner:

It bears stressing that the relief granted in this Courts decision

of September 1, 1993 is precisely that set out in the final and
executory decision of the Court of Appeals in CAG.R. SP No.
25938, dated December 13, 1991, which was affirmed in toto by
this Court and which became unalterable upon becoming final
4
and executory.

Private respondents thereupon filed before the trial court

an Omnibus Motion seeking among others the deferment of
the proceedings until private respondents are heard on
their claim for warehousemans lien. On the other hand, on
August 22, 1994, the Philippine National Bank filed a
Motion for the Issuance of a Writ of Execution and an
Opposition to the Omnibus Motion filed by private
respondents.
The trial court granted private respondents Omnibus
Motion on December 20, 1994 and set reception of evidence
on their claim for warehousemans lien. The resolution of
the PNBs Motion for Execution was ordered deferred until
the determination of private respondents claim.

_______________

3 Decision of the Supreme Court in G.R. No. 107243, p. 8; Rollo, p. 64.

4 Resolution of the Supreme Court (Second Division) in G.R. No.
107243; Rollo, p. 71.

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Philippine National Bank vs. Se, Jr.

On February 21, 1995, private respondents claim for lien

was heard and evidence was received in support thereof.

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The trial court thereafter gave both parties five (5) days to
file respective memoranda.
On February 28, 1995, the Philippine National Bank
filed a Manifestation with Urgent Motion to Nullify Court
Proceedings. In adjudication thereof, the trial court issued
the following order on March 1, 1995:

WHEREFORE, this court hereby finds that there exists in favor

of the defendants a valid warehousemans lien under Section 27 of
Republic Act 2137 and accordingly, execution of the judgment is
hereby ordered stayed and/or precluded until the full amount of
defendants lien on the sugar stocks covered by the five (5)
quedans subject of this action shall have been satisfied
conformably with the provisions of Section 31 of Republic Act
5
2137.

Consequently, the Philippine National Bank filed the

herein petition to seek the nullification of the above
assailed orders of respondent judge.
The PNB submits that:

PNBS RIGHT TO A WRIT OF EXECUTION IS SUPPORTED BY

TWO FINAL AND EXECUTORY DECISIONS: THE DECEMBER
13, 1991 COURT OF APPEALS DECISION IN CAG.R. SP NO.
25938; AND, THE NOVEMBER 9, 1992 SUPREME COURT
DECISION IN G.R. NO. 107243. RESPONDENT RTCS
MINISTERIAL AND MANDATORY DUTY IS TO ISSUE THE
WRIT OF EXECUTION TO IMPLEMENT THE DECRETAL
PORTION OF SAID SUPREME COURT DECISION

II

RESPONDENT RTC IS WITHOUT JURISDICTION TO

HEAR PRIVATE RESPONDENTS OMNIBUS MOTION. THE
CLAIMS

_______________

5 Resolution of the RTC in Civil Case No. 9053023, p. 5; Rollo, p. 44.

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Philippine National Bank vs. Se, Jr.

SET FORTH IN SAID MOTION: (1) WERE ALREADY

REJECTED BY THE SUPREME COURT IN ITS MARCH 9, 1994
RESOLUTION DENYING PRIVATE RESPONDENTS MOTION

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FOR CLARIFICATION OF DECISION IN G.R. NO. 107243;

AND (2) ARE BARRED FOREVER BY PRIVATE
RESPONDENTS FAILURE TO INTERPOSE THEM IN THEIR
ANSWER, AND FAILURE TO APPEAL FROM THE JUNE 18,
1992 RTC DECISION IN CIVIL CASE NO. 9052023

III

RESPONDENT RTCS ONLY JURISDICTION IS TO ISSUE

THE WRIT TO EXECUTE THE SUPREME COURT DECISION.
THUS, PNB IS ENTITLED TO: (1) A WRIT OF CERTIORARI TO
ANNUL THE RTC RESOLUTION DATED DECEMBER 20, 1994
AND THE ORDER DATED FEBRUARY 7, 1995 AND ALL
PROCEEDINGS TAKEN BY THE RTC THEREAFTER; (2) A
WRIT OF PROHIBITION TO PREVENT RESPONDENT RTC
FROM FURTHER PROCEEDING WITH CIVIL CASE NO. 90
53023 AND COMMITTING OTHER ACTS VIOLATIVE OF THE
SUPREME COURT DECISION IN G.R. NO. 107243; AND (3) A
WRIT OF MANDAMUS TO COMPEL RESPONDENT RTC TO
ISSUE THE WRIT TO EXECUTE THE SUPREME COURT
JUDGMENT IN FAVOR OF PNB

The issues presented before us in this petition revolve

around the legality of the questioned orders of respondent
judge, issued as they were after we had denied with finality
private respondents contention that the PNB could not
compel them to deliver the stocks of sugar in their
warehouse covered by the endorsed quedans or pay the
value of the said stocks of sugar.
Petitioners submission is on a technicality, that is, that
private respondents have lost their right to recover
warehousemans lien on the sugar stocks covered by the
five (5) Warehouse Receipts for the reason that they failed
to set up said claim in their Answer before the trial court
and that private respondents did not appeal from the
decision in this regard, dated June 18, 1992. Petitioner
asseverates that the denial by this Court on March 9, 1994
of the motion seeking clarification of our decision, dated
September 1, 1993, has

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foreclosed private respondents right to enforce their

warehousemans lien for storage fees and preservation
expenses under the Warehouse Receipts Act.

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On the other hand, private respondents maintain that

they could not have claimed the right to a warehousemans
lien in their Answer to the complaint before the trial court
as it would have been inconsistent with their stand that
they claim ownership of the stocks covered by the quedans
since the checks issued for payment thereof were
dishonored. If they were still the owners, it would have
been absurd for them to ask payment for storage fees and
preservation expenses. They further contend that our
resolution, dated March 9, 1994, denying their motion for
clarification did not preclude their right to claim their
warehousemans lien under Sections 27 and 31 of Republic
Act 2137, as our resolution merely affirmed and adopted
the earlier decision, dated December 13, 1991, of the Court
of Appeals (6th Division) in CAG.R. SP No. 25938 and did
not make any finding on the matter of the warehousemans
lien.
We find for private respondents on the foregoing issue
and so the petition necessarily must fail.
We have carefully examined our resolution, dated March
9, 1994, which denied Noahs Arks motion for clarification
of our decision, dated September 1, 1993, wherein we
affirmed in full and adopted the Court of Appeals earlier
decision, dated December 13, 1991, in CAG.R. SP No.
25938. We are not persuaded by the petitioners argument
that our said resolution carried with it the denial of the
warehousemans lien over the sugar stocks covered by the
subject Warehouse Receipts. We have simply resolved and
upheld in our decision, dated September 1, 1993, the
propriety of summary judgment which was then assailed
by private respondents. In effect, we ruled therein that,
considering the circumstances obtaining before the trial
court, the issuance of the Warehouse Receipts not being
disputed by the private respondents, a summary judgment
in favor of PNB was proper. We in effect further affirmed
the finding that Noahs Ark is a warehouseman which was
obliged to deliver the sugar stocks covered by the

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Philippine National Bank vs. Se, Jr.

Warehouse Receipts pledged by Cresencia K. Zoleta and

Luis T. Ramos to the petitioner pursuant to the pertinent
provisions of Republic Act 2137.
In disposing of the private respondents motion for
clarification, we could not contemplate the matter of
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warehousemans lien because the issue to be finally

resolved then was the claim of private respondents for
retaining ownership of the stocks of sugar covered by the
endorsed quedans. Stated otherwise, there was no point in
taking up the issue of warehousemans lien since the
matter of ownership was as yet being determined. Neither
could storage fees be due then while no one has been
declared the owner of the sugar stocks in question.
Of considerable relevance is the pertinent stipulation in
the subject Warehouse Receipts which provides for
respondent Noahs Arks right to impose and collect
warehousemans lien:

Storage of the refined sugar quantities mentioned herein shall be

free up to one (1) week from the date of the quedans covering said
sugar and thereafter, storage fees shall be charged in accordance
with the Refining Contract under which the refined sugar covered
6
by this Quedan was produced.

It is not disputed, therefore, that, under the subject

Warehouse Receipts provision, storage fees are chargeable.
Petitioner anchors its claim against private respondents
on the five (5) Warehouse Receipts issued by the latter to
thirdparty defendants Rosa Ng Sy of RNS Merchandising
and Teresita Ng of St. Therese Merchandising, which found
their way to petitioner after they were negotiated to them
by Luis T. Ramos and Cresencia K. Zoleta for a loan of
P39.1 Million. Accordingly, petitioner PNB is 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 warehousemans lien pursuant
to Sections 27 and

_______________

6 Comment, p. 5; Rollo, p. 92.

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VOL. 256, APRIL 18, 1996 393

Philippine National Bank vs. Se, Jr.

31 of the Warehouse Receipts Law (R.A. 2137), to wit:

SECTION 27. What claims are included in the warehousemans

lien.Subject to the provisions of section thirty, a warehouseman
shall have lien on goods deposited or on the proceeds thereof in
his hands, for all lawful charges for storage and preservation of
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the goods; also for all lawful claims for money advanced, interest,
insurance, transportation, labor, weighing, coopering and other
charges and expenses in relation to such goods; also for all
reasonable charges and expenses for notice, and advertisement of
sale, and for sale of the goods where default has been made in
satisfying the warehousemans lien.
x x x x x x x x x
SECTION 31. Warehouseman need not deliver until lien is
satisfied.A warehouseman having a lien valid against the
person demanding the goods may refuse to deliver the goods to
him until the lien is satisfied.

After being declared not the owner, but the warehouseman,

by the Court of Appeals on December 13, 1991 in CAG.R.
SP No. 25938, the decision having been affirmed by us on
December 1, 1993, private respondents cannot legally be
deprived of their right to enforce their claim for
warehousemans lien, for reasonable storage fees and
preservation expenses. Pursuant to Section 31 which we
quote hereunder, the goods under storage may not be
delivered until said lien is satisfied.

SECTION 31. Warehouseman need not deliver until lien is

satisfied.A warehouseman having a lien valid against the
person demanding the goods may refuse to deliver the goods to
him until the lien is satisfied.

Considering that petitioner does not deny the existence,

validity and genuineness of the Warehouse Receipts on
which it anchors its claim for payment against private
respondents, it cannot disclaim liability for the payment of
the storage fees stipulated therein. As contracts, the
receipts must be respected by authority of Article 1159 of
the Civil Code, to wit:
394

394 SUPREME COURT REPORTS ANNOTATED

Philippine National Bank vs. Se, Jr.

ART. 1159. Obligations arising from contracts have the force of

law between the contracting parties and should be complied with
in good faith.

Petitioner is in estoppel in disclaiming liability for the

payment of storage fees due the private respondents as
warehouseman while 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
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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 warehousemans lien for storage fees and
preservation expenses. Petitioner may not now retrieve the
sugar stocks without paying the lien due private
respondents as warehouseman.
In view of the foregoing, the rule may be simplified thus:
While the PNB is entitled to the stocks of sugar as the
endorsee of the quedans, delivery to it shall be effected only
upon payment of the storage fees.
Imperative is the right of the warehouseman to demand
payment of his lien at this juncture, because, in accordance
with Section 29 of the Warehouse Receipts Law, the
warehouseman loses his lien upon goods by surrendering
possession thereof. In other words, the lien may be lost
where the warehouseman surrenders the possession of the
goods without requiring payment of his lien, because a
warehousemans lien is possessory in nature.
We, therefore, uphold and sustain the validity of the
assailed orders of public respondent, dated December 20,
1994 and March 1, 1995.
In fine, we fail to see any taint of abuse of discretion on
the part of the public respondent in issuing the questioned
orders which recognized the legitimate right of Noahs Ark,
after being declared as warehouseman, to recover storage
fees
395

VOL. 256, APRIL 18, 1996 395

Philippine National Bank vs. Se, Jr.

before it would release to the PNB sugar stocks covered by

the five (5) Warehouse Receipts. Our resolution, dated
March 9, 1994, did not preclude private respondents
unqualified right to establish its claim to recover storage
fees which is recognized under Republic Act No. 2137.
Neither did the Court of Appeals decision, dated December
13, 1991, restrict such right.
Our Resolutions reference to the decision by the Court
of Appeals, dated December 13, 1991, in CAG.R. SP No.
25938, was intended to guide the parties in the subsequent
disposition of the case to its final end. We certainly did not
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