Republic of the Philippines

SUPREME COURT
Manila

to have differed from the ordinary and well known commercial practice in
handling export business by merchants requiring bank credits.

EN BANC
G.R. Nos. L-21000, 21002-21004, and 21006

December 20, 1924

In the matter of the involuntary insolvency of Umberto de Poli. BANK

OF THE PHILIPPINE ISLANDS, ET AL., claimants-appellees,
vs.
J.R. HERRIDGE, assignee of the insolvent estate of U. de Poli,
BOWRING and CO., C.T. BOWRING and CO., LTD., and T.R.
YANGCO, creditors-appellants.
Crossfield and O'Brien, J.A. Wolfson and Camus and Delgado for
appellants.
Hartigan and Welch, Fisher and DeWitt and Gibbs and McDonough for
appellees.

OSTRAND, J.:
The present appeals, all of which relate to the Insolvency of U. de Poli,
have been argued together and as the principal questions involved are the
same in all of them, the cases will be disposed of in one decision.
The insolvent Umberto de Poli was for several years engaged on an
extensive scale in the exportation of Manila hemp, maguey and other
products of the country. He was also a licensed public warehouseman,
though most of the goods stored in his warehouses appear to have been
merchandise purchased by him for exportation and deposited there by he
himself.
In order to finance his commercial operations De Poli established credits
with some of the leading banking institutions doing business in Manila at
that time, among them the Hongkong & Shanghai Banking Corporation, the
Bank of the Philippine Islands, the Asia Banking Corporation, the Chartered
Bank of India, Australia and China, and the American Foreign Banking
Corporation. The methods by which he carried on his business with the
various banks was practically the same in each case and does not appear

De Poli opened a current account credit with the bank against which he
drew his checks in payment of the products bought by him for exportation.
Upon the purchase, the products were stored in one of his warehouses and
warehouse receipts issued therefor which were endorsed by him to the
bank as security for the payment of his credit in the account current. When
the goods stored by the warehouse receipts were sold and shipped, the
warehouse receipt was exchanged for shipping papers, a draft was drawn
in favor of the bank and against the foreign purchaser, with bill of landing
attached, and the entire proceeds of the export sale were received by the
bank and credited to the current account of De Poli.itc-a1f
On December 8, 1920, De Poli was declared insolvent by the Court of First
Instance of Manila with liabilities to the amount of several million pesos
over and above his assets. An assignee was elected by the creditors and
the election was confirmed by the court on December 24, 1920. The
assignee qualified on January 4, 1921, and on the same date the clerk of
the court assigned and delivered to him the property of the estate.
Among the property taken over the assignee was the merchandise stored
in the various warehouses of the insolvent. This merchandise consisted
principally of hemp, maguey and tobacco. The various banks holding
warehouse receipts issued by De Poli claim ownership of this merchandise
under their respective receipts, whereas the other creditors of the insolvent
maintain that the warehouse receipts are not negotiable, that their
endorsement to the present holders conveyed no title to the property, that
they cannot be regarded as pledges of the merchandise inasmuch as they
are not public documents and the possession of the merchandise was not
delivered to the claimants and that the claims of the holders of the receipts
have no preference over those of the ordinary unsecured creditors.
On July 20, 1921, the banks above-mentioned and who claim preference
under the warehouse receipts held by them, entered into the following
stipulation:lawphi1.net
It is stipulated by the between the undersigned counsel, for the
Chartered Bank of India, Australia & China, the Hongkong &
Shanghai Banking Corporation, the Asia Banking Corporation and
the Bank of Philippine Islands that:

Whereas, the parties hereto are preferred creditors of the insolvent

debtor U. de Poli, as evidenced by the following quedans or
warehouse receipts for hemp and maguey stored in the
warehouses of said debtor:

quedans to one of the parties hereto has also been transferred by means
of other quedans to one or more of the other parties hereto and
Whereas, the hemp and maguey covered by said quedans is to a
considerable extent commingled.

QUEDANS OR WAREHOUSE RECEIPTS OF THE CHARTERED BANK

No. A-131 for 3,808 bales hemp.
No. A-157 for 250 bales hemp.
No. A-132 for 1,878 bales maguey.
No. A-133 for 1,574 bales maguey. Nos. 131, 132 and 133 all bear
date November 6, 1920, and No. 157, November 19, 1920.
QUEDANS OR WAREHOUSE RECEIPTS OF THE HONGKONG &
SHANGHAI BANKING CORPORATION

Now, therefore, it is hereby agreed subject to the rights of any other

claimants hereto and to the approval of this Honorable Court that all that
remains of the hemp and maguey covered by the warehouse receipts of
the parties hereto or of any of them shall be adjudicated to them
proportionately by grades in accordance with the quedans held by each as
above set forth in accordance with the rule laid down in section 23 of the
Warehouse Receipts Law for the disposition of commingled fungible
goods.
Manila, P.I., July 20, 1921.

No. 130 for 490 bales hemp and 321 bales maguey.
No. 134 for 1,970 bales hemp.
No. 135 for 1,173 bales hemp.
No. 137 for 237 bales hemp.
QUEDANS OR WAREHOUSE RECEIPTS OF THE ASIA BANKING
CORPORATION

GIBBS, MCDONOUGH & JOHNSON

By A. D. GIBBS
Attorneys for the Chartered Bank
of India, Australia & China
FISHER & DEWITT

No. 57 issued May 22, 1920, 360 bales hemp.

No. 93 issued July 8, 1920 bales hemp.
No. 103 issued August 18, 1920, 544 bales hemp.
No. 112 issued September 15, 1920, 250 bales hemp.
No. 111 issued September 15, 1920, 2,007 bales maguey.
QUEDANS OR WAREHOUSE RECEIPTS OF THE BANK OF THE
PHILIPPINE ISLANDS
No. 147 issued November 13, 1920, 393 bales hemp.
No. 148 issued November 13, 1920, 241 bales hemp.
No. 149 issued November 13, 1920, 116 bales hemp.
No. 150 issued November 13, 1920, 217 bales hemp.
And whereas much of the hemp and maguey covered by the above
mentioned quedans was either non-existent at the time of the issuance of
said quedans or has since been disposed of by the debtor and of what
remains much of the same hemp and maguey transferred by means of

By C.A. DEWITT
Attorneys for the Hongkong & Shanghai
Banking Corporation
WOLFSON, WOLFSON & SCHWARZKOFF
Attorneys for the Asia Banking Corporation
HARTIGAN & WELCH
Attorneys for the Bank of the Philippine Islands
Claims for hemp and maguey covered by the respective warehouse
receipts of the banks mentioned in the foregoing stipulation were presented
by each of said banks. Shortly after the adjudication of the insolvency of
the firm of Wise & Co., one of the unsecured creditors of the insolvent on
June 25, 1921, presented specific written objections to the claims of the
banks on the ground of the insufficiency of the warehouse receipts and

also to the stipulation above quoted on the ground that it was entered into
for the purpose of avoiding the necessity of identifying the property covered
by each warehouse receipt. Bowring & Co., C.T. Bowring Co., Ltd., and
Teodoro R. Yangco, also unsecured creditors of the insolvent, appeared in
the case after the decision of the trial court was rendered and joined with
the assignee in his motion for a rehearing and in his appeal to this court.

Section 2 of the Warehouse Receipts Act (No. 2137) prescribes the

essential terms of such receipts and reads as follows:
Warehouse receipts needed not be in any particular form, but
every such receipt must embody within its written or printed terms

Upon hearing, the court below held that the receipts in question were valid
negotiable warehouse receipts and ordered the distribution of the hemp
and maguey covered by the receipts among the holders thereof
proportionately by grades, in accordance with the stipulation above quoted,
and in a supplementary decision dated November 2, 1921, the court
adjudged the merchandise covered by warehouse receipts Nos. A-153 and
A-155 to the Asia Banking Corporation. From these decisions the assignee
of the insolvent estate, Bowring & Co., C.T. Bowring Co., Ltd., and Teodoro
R. Yangco appealed to this court.

(a) The location of the warehouse where the goods are stored,

The warehouse receipts are identical in form with the receipt involved in
the case of Roman vs. Asia Banking Corporation (46 Phil., 705), and there
held to be a valid negotiable warehouse receipt which, by endorsement,
passed the title to the merchandise described therein to the Asia Banking
Corporation. That decision is, however, vigorously attacked by the
appellants, counsel asserting, among other things, that "there was not a
single expression in that receipt, or in any of those now in question, from
which the court could or can say that the parties intended to make them
negotiable receipts. In fact, this is admitted in the decision by the statement
"... and it contains no other direct statement showing whether the goods
received are to be delivered to the bearer, to a specified person, or to a
specified person or his order." There is nothing whatever in these receipts
from which the court can possibly say that the parties intended to use the
phrase "a la orden" instead of the phrase "por orden," and thus to make
said receipts negotiable. On the contrary, it is very clear from the
circumstances under which they were issued, that they did not intend to do
so. If there was other language in said receipts, such as would show their
intention in some way to make said receipts negotiable, then there would
be some reason for the construction given by the court. In the absence of
language showing such intention, the court, by substituting the phrase "a la
orden" for the phrase "por orden," is clearly making a new contract
between the parties which, as shown by the language used by them, they
never intended to enter into."

(e) The rate of storage charges,

These very positive assertions have, as far as we can see, no foundation in

fact and rest mostly on misconceptions.

(b) The date of issue of the receipt,

(c) The consecutive number of the receipt,
(d) A statement whether the goods received will be delivered to the
bearer, to a specified person, or to a specified person or his order,

(f) A description of the goods or of the packages containing them,

(g) The signature of the warehouseman, which may be made by
his authorized agent,
(h) If the receipt is issued for goods of which the warehouseman is
owner, either solely or jointly or in common with others, the fact of
such ownership, and
(i) A statement of the amount of advances made and of liabilities
incurred for which the warehouseman claims a lien. If the precise
amount of such advances made or of such liabilities incurred is, at
the time of the issue of the receipt, unknown to the warehouseman
or to his agent who issues it, a statement of the fact that advances
have been made or liabilities incurred and the purpose thereof is
sufficient.
A warehouseman shall be liable to any person injured thereby, for
all damage caused by the omission from a negotiable receipt of
any of the terms herein required.
Section 7 of the Act reads:

A nonnegotiable receipt shall have plainly placed upon its face by

the warehouseman issuing it "nonnegotiable," or "not negotiable."
In case of the warehouseman's failure so to do, a holder of the
receipt who purchased it for value supposing it to be negotiable,
may, at his option, treat such receipt as imposing upon the
warehouseman the same liabilities he would have incurred had the
receipt been negotiable.

I certify that I am the sole

owner of the merchandise
herein described.
(Sgd.) "UMBERTO DE POLI

All of the receipts here in question are made out on printed blanks and are
identical in form and terms. As an example, we may take receipt No. A-112,
which reads as follows:

4.a El seguro sera de un octavo por ciento

mensual por el total. Tanto el almacenaje
como el seguro se cobraran por meses
vencidos, y con arreglo a los dias
devengados siendo el minimo para los
efectos del cobro 10 dias.
5.a No seran entregados dichos efectos ni
parte de los mismos sin la presentacion de
este "quedan" para su correspondiente
deduccion.

U. DE POLI
209 Estero de Binondo
BODEGAS

6.a El valor para el seguro de estas

mercancias es de pesos filipinos nueve
mil quinientos solamentes.

Por

7.a Las operaciones de entrada y salida,

seran de cuenta de los depositantes,
pudiendo hacerlos con sus trabajadores, o
pagando los que le sean facilitados, con
arreglo a los tipos que tengo convenido
con los mios.

QUEDAN No. A-112

Almacen Yangco

Marcas Bultos
UDP
250

Clase de
las
mercancia
s
Fardos
abaca

"Quedan depositados en estos almacenes

por orden del Sr. U. de Poli la cantidad de
doscientos cincuenta fardos abaca segun
marcas detalladas al margen, y con
arreglo a las condiciones siguientes:
1.a Estan asegurados contra riesgo de
incendios exclusivamente, segun las
condiciones de mis polizas; quedando los
demas por cuenta de los depositantes.
2.a No se responde del peso, clase ni mal
estado de la mercancia depositada.
3.a El almacenaje sera de quince centimos
fardo por mes.

Valor del Seguro P9,500.

V. B.
(Sgd.) UMBERTO DE POLI

Manila, 15 de sept. de 1920.

El Encargado,
(Sgd.) I. MAGPANTAY

The receipt is not marked "nonnegotiable" or "not negotiable," and is

endorsed "Umberto de Poli."
As will be seen, the receipt is styled "Quedan" (warehouse receipt) and
contains all the requisites of a warehouse receipt as prescribed by section
2, supra, except that it does not, in express terms, state whether the goods
received are to be delivered to bearer, to a specified person or to his order.
The intention to make it a negotiable warehouse receipt appears,
nevertheless, quite clearly from the document itself: De Poli deposited the
goods in his own warehouse; the warehouse receipt states that he is the
owner of the goods deposited; there is no statement that the goods are to
be delivered to the bearer of the receipt or to a specified person and the
presumption must therefore necessarily be that the goods are in the
warehouse subject to the orders of their owner De Poli. As the owner of the

goods he had, of course, full control over them while the title remained in
him; we certainly cannot assume that it was the intention to have the goods
in the warehouse subject to no one's orders. That the receipts were
intended to be negotiable is further shown by the fact that they were not
marked "nonnegotiable" and that they were transferred by the
endorsement of the original holder, who was also the warehouseman. In
his dual capacity of warehouseman and the original holder of the receipt,
De Poli was the only party to the instrument at the time of its execution and
the interpretation he gave it at that time must therefore be considered
controlling as to its intent.
In these circumstances, it is hardly necessary to enter into any discussion
of the intended meaning of the phrase "por orden" occurring in the receipts,
but for the satisfaction of counsel, we shall briefly state some of our
reasons for the interpretation placed upon that phrase in the Felisa Roman
case:
The rule is well-known that wherever possible writings must be so
construed as to give effect to their general intent and so as to avoid
absurdities. Applying this rule, it is difficult to see how the phrase in
question can be given any other rational meaning than that suggested in
the case mentioned. It is true that the meaning would have been more
grammatically expressed by the word "a la orden"; the world "por preceding
the word "orden" is generally translated into the English language as "by"
but "por" also means "for" or "for the account of" (seeVelazquez Dictionary)
and it is often used in the latter sense. The grammatical error of using it in
connection with "orden" in the present case is one which might reasonably
be expected from a person insufficiently acquainted with the Spanish
language.
If the receipt had been prepared in the English language and had stated
that the goods were deposited "for order" of U. de Poli, the expression
would not have been in accordance with good usage, but nevertheless in
the light of the context and that circumstances would be quite intelligible
and no one would hesitate to regard "for order" as the equivalent of "to the
order." Why may not similar latitude be allowed in the construction of a
warehouse receipt in the Spanish language?
If we were to give the phrase the meaning contended for by counsel, it
would reveal no rational purpose. To say that a warehouseman deposited
his own goods with himself by his own order seems superfluous and
means nothing. The appellants' suggestion that the receipt was issued by
Ireneo Magpantay loses its force when it is considered that Magpantay was
De Poli's agent and that his words and acts within the scope of his agency

were, in legal effect, those of De Poli himself. De Poli was the

warehouseman and not Magpantay.
Counsel for the appellants also assail the dictum in our decision in the
Felisa Roman case that section 7 of the Warehouse Receipts Act "appears
to give any warehouse receipt not marked "nonnegotiable" or "not
negotiable" practically the same effect as a receipt which by its terms is
negotiable provided the holder of such unmarked receipt acquired it for
value supposing it to be negotiable." The statement is, perhaps, too broad
but it certainly applies in the present case as against the appellants, all of
whom are ordinary unsecured creditors and none of them is in position to
urge any preferential rights.
As instruments of credit, warehouse receipts play a very important role in
modern commerce and the present day tendency of the courts is towards a
liberal construction of the law in favor of a bona fide holder of such
receipts. Under the Uniform Warehouse Receipts Act, the Supreme Court
of New York in the case of Joseph vs. P. Viane, Inc.
( [1922], 194 N.Y. Supp., 235), held the following writing a valid warehouse
receipt:
"Original. Lot No. 9. New York, November 19, 1918. P. Viane, Inc.,
Warehouse, 511 West 40th Street, New York City. For account of
Alpha Litho. Co., 261 9th Avenue. Marks: Fox Film Co. 557 Bdles
835- R. 41 x 54-116. Car Number: 561133. Paul Viane, Inc. E.A.
Thompson. P. Viane, Inc., Warehouse."
In the case of Manufacturers' Mercantile Co vs. Monarch Refrigerating Co.
( [1915], 266 III., 584), the Supreme Court of Illinois said:
The provisions of Uniform Warehouse Receipts Act, sec. 2 (Hurd's
Rev. St. 1913, c. 114, sec. 242), as to the contents of the receipt,
are for the benefit of the holder and of purchasers from him, and
failure to observe these requirements does not render the receipt
void in the hands of the holder.
In the case of Hoffman vs. Schoyer ( [1892], 143 III., 598), the court held
that the failure to comply with Act III, April 25, 1871, which requires all
warehouse receipts for property stored in Class C to "distinctly state on
their face the brands or distinguishing marks upon such property," for which
no consequences, penal or otherwise, are imposed, does not render such
receipts void as against an assignee for value.

The appellants argue that the receipts were transferred merely as security
for advances or debts and that such transfer was of no effect without a
chattel mortgage or a contract of pledge under articles 1867 and 1863 of
the Civil Code. This question was decided adversely to the appellants'
contention in the case of Roman vs. Asia Banking Corporation, supra. The
Warehouse Receipts Act is complete in itself and is not affected by
previous legislation in conflict with its provisions or incompatible with its
spirit or purpose. Section 58 provides that within the meaning of the Act "to
"purchase" includes to take as mortgagee or pledgee" and "purchaser"
includes mortgagee and pledgee." It therefore seems clear that, as to the
legal title to the property covered by a warehouse receipt, a pledgee is on
the same footing as a vendee except that the former is under the obligation
of surrendering his title upon the payment of the debt secured. To hold
otherwise would defeat one of the principal purposes of the Act, i. e., to
furnish a basis for commercial credit.
The appellants also maintain that baled hemp cannot be regarded as
fungible goods and that the respective warehouse receipts are only good
for the identical bales of hemp for which they were issued. This would be
true if the hemp were ungraded, but we can see no reason why bales of
the same government grade of hemp may not, in certain circumstances, be
regarded as fungible goods. Section 58 of the Warehouse Receipts Act
defines fungible goods as follows:

In the present case the warehouse receipts show how many bales of each
grade were deposited; the Government grade of each bale was clearly and
permanently marked thereon and there can therefore be no confusion of
one grade with another; it is not disputed that the bales within the same
grade were of equal value and were sold by the assignee for the same
price and upon the strength of the Government grading marks. Moreover, it
does not appear that any of the claimant creditors, except the appellees,
hold warehouse receipts for the goods here in question. Under these
circumstances, we do not think that the court below erred in treating the
bales within each grade as fungible goods under the definition given by the
statute. It is true that sections 22 and 23 provide that the goods must be
kept separated and that the warehouseman may not commingle goods
except when authorized by agreement or custom, but these provisions are
clearly intended for the benefit of the warehouseman. It would, indeed, be
strange if the warehouseman could escape his liability to the owners of the
goods by the simple process of commingling them without authorization. In
the present case the holders of the receipts have impliedly ratified the acts
of the warehouseman through the pooling agreement hereinbefore quoted.
The questions so far considered are common to all of the claims now
before us, but each claim has also its separate features which we shall
now briefly discuss:
R.G. Nos. 21000 AND 21004

"Fungible goods" means goods of which any unit is, from its nature
or by mercantile custom, treated as the equivalent of any other
unit.

CLAIMS OF THE BANK OF THE PHILIPPINE ISLANDS AND THE

GUARANTY TRUST COMPANY OF NEW YORK
The claim of the Bank of the Philippine Islands is supported by four
warehouse receipts, No. 147 for 393 bales of hemp, No. 148 for 241 bales
of hemp, No. 149 for 116 bales of hemp and No. 150 for 217 bales of
hemp. Subsequent to the pooling agreement these warehouse receipts
were signed, endorsed and delivered to the Guaranty Trust Company of
New York, which company, under a stipulation of October 18, 1921, was
allowed to intervene as a party claiming the goods covered by said
receipts, and which claim forms the subject matter of the appeal R.G. No.
21004. All of the warehouse receipts involved in these appeals were issued
on November 13, 1920, and endorsed over the Bank of the Philippine
Islands.
On November 16, 1920, De Poli executed and delivered to said bank a
chattel mortgage on the same property described in the receipts, in which
chattel mortgage no mention was made of the warehouse receipts. This

mortgage was registered in the Office of the Register of Deeds of Manila

on November 18, 1920.

R.G. No. 21003

CLAIM OF THE CHARTERED BANK OF INDIA, AUSTRALIA & CHINA

The appellants argue that the obligations created by the warehouse

receipts were extinguished by the chattel mortgage and that the validity of
the claim must be determined by the provisions of the Chattel Mortgage
Law and not by those of the Warehouse Receipts Act, or, in other words,
that the chattel mortgage constituted a novation of the contract between
the parties.
Novations are never presumed and must be clearly proven. There is no
evidence whatever in the record to show that a novation was intended. The
chattel mortgage was evidently taken as additional security for the funds
advanced by the bank and the transaction was probably brought about
through a misconception of the relative values of warehouse receipts and
chattel mortgages. As the warehouse receipts transferred the title to the
goods to the bank, the chattel mortgage was both unnecessary and
inefficatious and may be properly disregarded.
Under the seventh assignment of error the appellants argue that as De Poli
was declared insolvent by the Court of First Instance of Manila on
December 8, 1920, only twenty-five days after the warehouse receipts
were issued, the latter constituted illegal preferences under section 70 of
the Insolvency Act. In our opinion the evidence shows clearly that the
receipts were issued in due and ordinary course of business for a valuable
pecuniary consideration in good faith and are not illegal preferences.
R.G. No. 21002
CLAIM OF THE HONGKONG & SHANGHAI BANKING CORPORATION
The warehouse receipts held by this claimant-appellee are numbered A130 for 490 bales of hemp and 321 bales of maguey, No. A-134 for 1,970
bales of hemp, No. A-135 for 1,173 bales of hemp and No. A-137 for 237
bales of hemp, were issued by De Poli and were endorsed and delivered to
the bank on or about November 8, 1920. The appellants maintain that the
bank at the time of the delivery to it of the warehouse receipts had
reasonable cause to believe that De Poli was insolvent, and that the
receipts therefore constituted illegal preferences under the Insolvency Law
and are null and void. There is nothing in the record to support this
contention.
The other assignments of error relate to questions which we have already
discussed and determined adversely to the appellants.

This claimant holds warehouse receipts Nos. 131 for 3,808 bales of hemp,
A-157 for 250 bales of hemp, A-132 for 1,878 bales of maguey and A-133
for 1,574 bales of maguey. Nos. A-131, A-132 and A-133 bear the date of
November 6, 1920, and A-157 is dated November 19, 1920.
Under the fourth assignment of error, the appellants contend that the court
erred in permitting counsel for the claimant bank to retract a withdrawal of
its claim under warehouse receipt No. A-157. It appears from the evidence
that during the examination of the witness Fairnie, who was the local
manager of the claimant bank, counsel for the bank, after an answer made
by Mr. Fairnie to one of his questions, withdrew the claim under the
warehouse receipt mentioned, being under the impression that Mr.
Fairnie's answer indicated that the bank had knowledge of De Poli's
pending insolvency at the time the receipt was delivered to the bank. Later
on in the proceedings the court, on motion of counsel, reinstated the claim.
Counsel explains that by reason of Mr. Fairnie's Scoth accent and rapid
style of delivery, he misunderstood his answer and did not discover his
mistake until he read the transcript of the testimony.
The allowance of the reinstatement of the claim rested in the sound
discretion of the trial court and there is nothing in the record to show that
this discretion was abused in the present instance.
Under the fifth assignment of error appellants argue that the manager of
the claimant bank was informed of De Poli's difficulties on November 19,
1920, when he received warehouse receipt No. A-157 and had reasonable
cause to believe that De Poli was insolvent and that the transaction
therefore constituted an illegal preference.
Mr. Fairnie, who was the manager of the claimant bank at the time the
receipt in the question was delivered to the bank, testifies that he had no
knowledge of the impending insolvency and Mr. De Poli, testifying as a
witness for the assignee-appellee, stated that he furnished the bank no
information as to his failing financial condition at any time prior to the filing
of the petition for his insolvency, but that on the contrary he advised the
bank that his financial condition was sound.
The testimony of the same witnesses also shows that the bank advanced
the sum of P20,000 to De Poli at Cebu against the same hemp covered by
warehouse receipt No. A-157 as early as October, 1920, and that upon

shipment thereof to Manila the bill of lading, or shipping documents, were

made out in favor of the Chartered Bank and forwarded to it at Manila; that
upon the arrival of the hemp at Manila, Mr. De Poli, by giving a trust receipt
to the bank for the bill of lading, obtained possession of the hemp with the
understanding that the warehouse receipt should be issued to the bank
therefor, and it was in compliance with that agreement previously made
that the receipt was issued on November 19, 1920. Upon the facts stated
we cannot hold that the bank was given an illegal preference by the
endorsement to it of the warehouse receipt in question. (Mitsui Bussan
Kaishavs. Hongkong & Shanghai Banking Corporation, 36 Phil., 27.)
R.G. No. 21006
CLAIM OF THE ASIA BANKING CORPORATION
Claimant holds warehouse receipts Nos. A-153, dated November 18, 1920,
for 139 bales of tobacco, A-154, dated November 18, 1920, for 211 bales
of tobacco, A-155, dated November 18, 1920, for 576 bales of tobacco, A57, dated May 22, 1920, for 360 bales of hemp, A-93, dated July 8, 1920,
for 382 bales of hemp, A-103, dated August 18, 1920, for 544 bales of

hemp, A-112, dated September 15, 1920, for 250 bales of hemp and A-111,
dated September 15, 1920, for 207 bales of maguey.
The assignments of error in connection with this appeal are, with the
exception of the fourth, similar to those in the other cases and need not be
further discussed.
Under the fourth assignment, the appellants contend that warehouse
receipts Nos. A-153, A-154 and A-155 were illegal preferences on the
assumption that the claimant bank must have had reasonable reasons to
believe that De Poli was insolvent on November 18, 1920, when the three
receipts in question were received. In our opinion, the practically
undisputed evidence of the claimant bank sufficiently refutes this
contention.
For the reasons hereinbefore stated the judgments appealed from are
hereby affirmed, without costs. So ordered.
Street, Malcolm, Avancea, Villamor, and Romualdez, JJ., concur.