IN THE MATTER OF THE INVOLUNTARY INSOLVENCY OF UMBERTO DE POLI. THE AMERICAN FOREIGN BANKING CORPORATION, CLAIMANT AND APPELLEE, VS. J. R. HERRIDGE, ASSIGNEE OF THE INSOLVENT ES…

OSTRAND, J.:

This is an appeal from the following decision of the Court of First Instance
of Manila, the Honorable George R. Harvey presiding:

“On or about April 28, 1920, the debtor, U. de Poli, a licensed public
warehouseman in the City of Manila, issued warehouse receipt No. A-48, commonly
known as a ‘quedan,’ for 560 bales of tobacco, which tobacco was particularly
described therein as ‘Cagayan tabaco en rama with specified marks thereon. Said
U. de Poli certified over his signature on the face of said quedan as follows:
‘I certify that I am the sole owner of the merchandise herein described,’
(Exhibit A of American Foreign Banking Corporation.) This quedan was endorsed in
blank by U. de Poli, who delivered it to the American Foreign Banking
Corporation as security upon his overdraft, then amounting to about P40,000.

“The claimant bank, by its motion of April 23, 1921, asked that the assignee
be ordered to deliver to said bank the 560 bales of leaf tobacco called for in
said quedan upon surrender of the original of the warehouse receipt.

“In answer to said motion the assignee denied that the 560 bales of Cagayan
tobacco listed in said Exhibit A are now in his possession as assignee of said
insolvent estate, aad denied that said Exhibit A constitutes a negotiable
warehouse receipt under the law, for the reason that it does not comply with the
provisions of sections 2, 4, or 5 of the Warehouse Receipt Act; and that, even
assuming that said 560 bales of leaf tobacco were now in his possession, he
denies that the claimant bank is the owner thereof, or has any lien thereon, or
any rights therein, by virtue of said receipt. Exhibit A; and by his amended
answer alleges that said Exhibit A was not delivered by the insolvent, U. de
Poli, to the claimant for the purpose of transferring the ownership of the
property described therein to it, but only as collateral security for a
preexisting indebtedness by way of overdraft, for which purpose it is under the
law invalid and wholly ineffective as against the general creditors of the said
insolvent estate. Substantially the same answer was made by Wise & Co. as
general creditors.

“There has been no question raised about the authenticity of the quedan. U.
de Poli testified that he issued it to said bank as security for his said
overdraft; that the tobacco was in the bodega on Calle Azcarraga when he gave
the quedan to the bank; that the tobacco had to be stripped and booked, and for
this reason there might have been a slight difference between the quantity given
in the quedan and the quantify at present in existence in the warehouse; that he
knows that the tobacco was in the warehouse at the time he became insolvent,
because he had given an order to fill an order for stripped tobacco, and that
the tobacco was taken from the pile which he had given in guaranty to the
American Foreign Banking Corporation; that Vicente Molina was in charge of the
warehouse, and that he (De Poli) acted upon the data furnished to him by Mr.
Molina.

“The evidence shows that there were only 530 bales of this tobacco. The
quedan (Exhibit A) calls for ‘Cagayan tobacco.’ but it was stipulated in this
case that the 530 bales of tobacco claimed by the American Foreign Banking
Corporation are Isabels tobacco. Mr. De Poli explained this discrepancy in
description by saying that he ‘had the description of grade only and made the
quedan without giving importance if it was Cagayan or Isabela tobacco;’ that he
asked only for grade, and did not ask whether it was Cagayan or Isabela tobacco,
because he had to deliver the security no matter whether it was Isabela or
Cagayan tobacco. The objection and motion of the opposition counsel that this
explanation be stricken out are hereby overruled. “The quedan in question was
issued by J. Magpantay, who was ‘encargado* of all the U. de Poli warehouses,
but he did not have control of the warehouses, according to Mr. De
Poli. Molina did not see the quedan when it was issued, but said that he knew of
the tobacco which Mr. De Poli transferred to the claimant bank, because Mr. De
Poli told him about it; that it was tobacco from Isabela for the year 1919, was
stored in the warehouse on Calle Azcarraga, and that there was no other tobacco
in the warehouse except the 1919 Isabela tobacco.

“The evidence further shows that in December, 1920, Mr. Kaintzler, a
subaccountant of the claimant bank, went to the U. de Poli warehouse on Calle
Azcarraga to have the tobacco covered by this quedan, Exhibit A, pointed out to
him; that the then assignee (Mr. Bayne) and one of his accountants showed him
(Kaintzler) the 530 bales of tobacco with the tag A. F. B. C. on them, and these
bales were pointed out to him by Mr. Bayne as the tobacco which belonged to the
American Foreign Banking Corporation.

“The quedan (Exhibit A) is in the same form as quedan No. A-155, which, in
the case of Felisa Roman vs. Asia Banking Corporation, was declared by
the Supreme Court of the Philippine Islands to be a negotiable warehouse receipt
conveying title to the said bank superior to that of the vendor’s lien of Felisa
Roman (R. G. No. 17825).^[1]

“The evidence shows that said quedan (Exhibit A) was taken by the American
Foreign Banking Corporation for value, believing it to be a negotiable warehouse
receipt, and without reasonable cause to believe that the debtor U. de Poli (who
was operating a public warehouse at the time) was insolvent.

“In view of the decision of the Supreme Court in the Felisa Roman case,
above-mentioned, the only question raised by the attorneys for the assignee and
for the common creditors which will be considered by the court is that as to the
sufficiency of the description of the tobacco in said warehouse receipt. This
lot of tobacco was the only tobacco in the warehouse. The debtor said that it
was the tobacco which he transferred to the claimant bank. The tobacco was
pointed out by the then assignee to the claimant’s representative as the tobacco
covered by said quedan, Exhibit A. Hence, there does not appear to be any doubt
about the identity of the tobacco.

“The only question left for consideration is whether the use of the word
‘Cagayan’ instead of ‘Isabela’ in describing the tobacco in the quedan renders
the quedan null and void as a negotiable warehouse receipt for the tobacco
intended to be covered by it. The insolvent, U. de Poli, testified positively
that this quedan referred to the tobacco in the Azcarraga warehouse, and he
explained the discrepancy in the description. The then assignee (Mr. Bayne) was
evidently convinced that this lot of tobacco belonged to the claimant bank,
because he pointed it out to one of the bank’s employees, who noted the tags
thereon bearing the initials of the claimant bank.

“The court is of the opinion that the intention of the parties to the
transaction must prevail against such a technical objection as to the
sufficiency of the description of the tobacco. It might be different if there
had been Cagayan tobacco in the warehouse at the time of the issuance of the
quedan, Exhibit A, or if there were any doubt whatever as to the identity of the
tobacco intended to be covered by the quedan. The assignee stands in the shoes
of the insolvent, and, while it is his duty to protect the general ereditors, he
is not. in the position of a judgment creditor with an unsatisfied
execution.

“In view of the foregoing considerations, the court is of the opinion that
the quedan, Exhibit A, is a negotiable warehouse receipt which was duly issued
and delivered by the debtor U. de Poli to the American Foreign Banking
Corporation, and that it divested U. de Poli of his title to said tobacco and
transferred the position and the title thereof to the American Foreign Banking
Corporation.

“It is therefore ordered and adjudged that the assignee deliver the said five
hundred and thirty (530) bales of tobacco to the American Foreign Banking
Corporation, upon payment by said bank of any Hens or charges thereon, or, in
the event of said tobacco having been sold, the proceeds thereof, less the
storage and insurance charges paid after the declaration of insolvency; and
thereafter due report will be made to this court of such delivery to the
claimant bank in order that the proceeds be deducted from the balance due to
said claimant bank from the insolvent debtor.”

We find no reversible error in the decision quoted and do not think it
necessary to add anything to the discussion therein contained.

The judgment appealed from is therefore affirmed, with the costs against the
appellants. So ordered.

Street, Malcolm, Avancena, Villamor, and Romualdez, JJ.,
concur.