Gonzales vs. Go Tiong and Luzon Surety

Gonzales v.
Go Tiong and Luzon Surety
G.R. No. : Ponente: Date: Digested by:

104 Phil 492 MONTEMAYOR, J.: August 30, 1958
Petitioners: Respondents:
RAMON GONZALES GO TIONG and LUZON SURETY CO., INC
TOPIC: Deposit
FACTS:
Go Tiong operated a rice mill and warehouse in Pangasinan and was licensed as a bonded
warehouseman. Luzon Surety Co. issued Guaranty Bond No. 294 worth P18,334 to ensure Go Tiong's
obligation to deliver or pay the market value of stored palay to depositors upon demand. Go Tiong
also insured the warehouse and palay with Alliance Surety and Insurance Company.
Before obtaining his bonded warehouseman license, Go Tiong had on several occasions received
palay for deposit from plaintiff Gonzales, totaling 368 sacks to which he issued receipts. After he was
licensed as bonded warehouseman, Go Tiong again received various deliveries of palay from
Gonzales, totaling 492 sacks, for which he issued the corresponding receipts, all the grand total of 860
sacks, valued at P8,600 at the rate of P10 per sack. On March 15, 1953, Gonzales demanded the value
of his deposits amounting to P8,600. Go Tiong postponed payment twice before the warehouse
burned down. At the time of the fire, the warehouse held 5,847 sacks of palay, exceeding the 5,000
sacks permitted under Go Tiong's license. The receipts Go Tiong gave Gonzales were ordinary and not
compliant with the Warehouse Receipts Act (Act No. 2137).
After the fire, depositors, including Gonzales, filed claims with the Bureau of Commerce. Some claims
were settled using insurance proceeds. Gonzales withdrew his claim, initially citing denial by the
Bureau but later indicating that his efforts to secure payment were fruitless. Subsequently, Gonzales
sued Go Tiong and Luzon Surety for P8,600 plus legal interest, damages of P5,000, and attorney's fees
of P1,500. During the litigation, Gonzales and Go Tiong attempted an amicable settlement, agreeing to
dismiss pending actions upon full settlement of accounts. As Go Tiong failed to settle, Gonzales
proceeded with the court case.
Issue(s):
Whether or not Gonzales's claim is governed by the Civil Code and not by the Bonded Warehouse Act
(Act No. 3893, as amended by Republic Act No. 247), for the reason that what Go Tiong issued to
Gonzales were ordinary receipts, not the warehouse receipts contemplated by the Warehouse
Receipts Law?
Ruling / Ratio:
No, Gonzales's claim is not governed by the Civil Code.
Act No. 3893 (Bonded Warehouse Act) 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 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.
The failure of Go Tiong to issue the warehouse receipts contemplated by the Warehouse Receipts Act,
which failure, according to appellants, precluded plaintiff from suing on the bond, reference may be
made to Section 2 of Act No. 3893, defining receipt as any receipt issued by a warehouseman for
commodity delivered to him, showing that the law does not require as indispensable that a
warehouse receipt be issued. Furthermore, Section 7 of said law provides that as long as the
depositor is injured by a breach of any obligation of the warehouseman, which obligation is secured
by a bond, said depositor may sue on said bond. In other words, the surety cannot avoid liability from
the mere failure of the warehouseman to issue the prescribed receipt.
Fallo:
Important phrases, quotes, terms (not the main doctrine) mentioned in this case:

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Gonzales v.

Go Tiong and Luzon Surety

G.R. No. : Ponente: Date: Digested by:

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