G.R. No. L-11776 Case Digest

G.R. No. L-11776, August 30, 1958

Ramon Gonzales

vs Go Tiong and Luzon Surety Co., Inc.

Facts:

Go Tiong owned a rice mill and warehouse located in Pangasinan. To secure the performance as warehouseman, Luzon Surety executed a guaranty bond in the sum of 18, 334 conditioned particularly on the fulfillment by Go Tiong of his duty to deliver the palay stored in his warehouse upon demand or to pay the market value thereof, in case he cannot return the same.

Before his issuance of license as warehouse, Go Tiong had several palay deposit from Gonzales, totaling 368 sacks for which he issued receipts. After he was licensed, Gonzales deposited 492 sacks more, all the grand total of 860 sacks valued at 8,600.

March 1953, Gonzales demanded from Go Tiong the value of the deposits but he was told to come back 2 days after. A few days later, the warehouse of Go Tiong was burned to the ground.

After the burning, Gonzales, along with other palay depositors filed their claims with the BOC. While the case was pending in court, parties entered into a contract of amicable settlement agrreing that Gonzales will withdraw all actions against Go Tiong once the accounts due were settled.

In this present petition, both parties contend that the governing law shall be the civil code and not the bonded warehouse act for the reson that Go Tiong issued ordinary receipts to Gonzales, and because the deposits were gratuitous.

Ruling:

Act No. 3893 as amended is a special law regulating the business of receiving commodities for storage and defining the rights and obligations of a bonded warehouseman and those transacting business with him. Consequently, any deposit made with him as a bonded warehouseman must necessarily be governed by the provisions of Act No. 3893. The kind or nature of the receipts issued by him for the deposits is not very material much less decisive. Though it is desirable that receipts issued by a bonded warehouseman should conform to the provisions of the Warehouse Receipts Law, said provisions in our opinion are not mandatory and indispensable in the sense that if they fell short of the requirements of the Warehouse Receipts Act, then the commodities delivered for storage become ordinary deposits and will not be governed by the provisions of the Bonded Warehouse Act. Under Section 1 of the Warehouse Receipts Act, one would gather the impression that the issuance of a warehouse receipt in the form provided by it is merely permissive and directory and not obligatory:

SECTION 1. Persons who may issue receipts. — Warehouse receipts may be issued by any warehouseman.,

and the Bonded Warebouse Act as amended permits the warehouseman to issue any receipt, thus:

. . . . "receipt" as any receipt issued by a warehouseman for commodity delivered to him.

As the trial court well observed, as far as Go Tiong was concerned, the fact that the receipts issued by him were not "quedans" is no valid ground for defense because he was the principal obligor. Furthermore, as found by the trial court, Go Tiong had repeatedly promised plaintiff to issue to him "quedans" and had assured him that he should not worry; and that Go Tiong was in the habit of issuing ordinary receipts (not "quedans") to his depositors.

Considering the fact, as already stated, that prior to the burning of the warehouse, plaintiff demanded the payment of the value of his palay from Go Tiong on two occasions but was put off without any valid reason, under the circumstances, the better rule which we accept is the following:

. . . . This rule proceeds upon the theory that the facts surrounding the care of the property by a bailee are peculiarly within his knowledge and power to prove, and that the enforcement of any other rule would impose great difficulties upon the bailors. ... It is illogical and unreasonable to hold that the presumption of negligence in case of this kind is rebutted by the bailee by simply proving that the property bailed was destroyed by an ordinary fire which broke out on the bailee's own premises, without regard to the care exercised by the latter to prevent the fire, or to save the property after the commencement of the fire. All the authorities seem to agree that the rule that there shall be a presumption of negligence in bailment cases like the present one, where there is default in delivery or accounting, for the goods is just a necessary one. . . . (9 A.L.R. 566; see also Hanes vs. Shapiro, 84 S.E. 33; J. Russel Mfg. Co. vs. New Haven, S.B. Co., 50 N.Y. 211; Beck vs. Wilkins-Ricks Co., 102 S.E. 313, Fleishman vs. Southern R. Co., 56 S.E. 974).

Besides, as observed by the trial court, the defendant violated the terms of his license by accepting for deposit palay in excess of the limit authorized by his license, which fact must have increased the risk.

The Luzon Surety claims that the amicable settlement by and between Gonzales and Go Tiong constituted a material alteration of its bond, thereby extinguishing and discharging its liability. It is evident, however, that while there was an attempt to settle the case amicably, the settlement was never consummated because Go Tiong failed to settle the accounts of Gonzales to the latter's satisfaction.