Section 3.-[FORM OF RECEIPTS. WHAT TERMS MAY BE INSERTED.] A warehouseman may insert in a receipt, issued by him, any other terms and conditions, provided that such terms and conditions shall not

(a) Be contrary to the provisions of this act,

(b) In any wise impair his obligation to exercise that degree of care in the safe-keeping of the goods entrusted to him which a reasonably careful man would exercise in regard to similar goods of his own.91

§ 1047. Negotiable and non-negotiable receipts.

NON-NEGOTIABLE

Section 4. [DEFINITION OF RECEIPT.] A receipt in which it is stated that the goods received will be delivered to the depositor, or to any other specified person, is a non-negotiable receipt."

92

Section 5.-[DEFINITION OF NEGOTIABLE RECEIPT.] A receipt in which it is stated that the goods received will be delivered to the bearer, or to the order of any person named in such receipt is a negotiable receipt. No provision shall be inserted in a negotiable receipt that it is non-negotiable. Such provision, if inserted, shall be void.93

own goods, it seemed wise that when they issued negotiable receipts in this way, the document should carry notice of the fact on its face. Certificates issued by a distiller for whiskey stored in his own warehouse were held not "warehouse receipts" under the statute in Moore v. Thomas Moore Distilling Co., 247 Pa. 312, 93 Atl. 347. It is obvious also that negotiable receipts should show on their face what charges are claimed against the goods. See further as to this Section 30, infra, § 1058.

Though it is desirable that all warehouse receipts shall conform to the rules here laid down, the essential thing is that negotiable receipts shall do so, and as to them only is a sanction imposed for failing to insert the statutory terms. A receipt which does not

include all the terms required by this section may nevertheless be governed by the Act. New Jersey &c. Trust Co. v. Rector, 76 N. J. Eq. 587, 75 Atl. 931. See also Manufacturers' Mercantile Co. v. Monarch Refrigerator Co., 266 Ill. 584, 107 N. E. 885.

91 Public policy demands the limitation in (b). See Schouler on Bailments, [1905] §§ 36, 362 et seq. A limitation of liability to $10 in a receipt given on the deposit of a bag at a parcel room was held void as a violation of (b). Healy v. New York Central &c. R. Co., 138 N. Y S. 287, 153 N. Y. App. Div. 516.

92 See Manufacturers' Mercantile Co. v. Monarch Refrigerator Co., 266 Ill. 584, 107 N. E. 885.

93 This Act makes a fundamental distinction throughout between nego

Section 6.-[DUPLICATE RECEIPTS MUST BE SO MARKED.] When more than one negotiable receipt is issued for the same goods, the word "duplicate" shall be plainly placed upon the face of every such receipt, except the one first issued. A warehouseman shall be liable for all damage caused by his failure so to do to any one who purchased the subsequent receipt for value supposing it to be an original, even though the purchase be after the delivery of the goods by the warehouseman to the holder of the original receipt.94

Section 7.-[FAILURE TO MARK "NOT NEGOTIABLE."] A non-negotiable receipt shall have plainly placed upon its face by the warehouseman issuing it " non-negotiable," 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.

This section shall not apply, however, to letters, memoranda, or written acknowledgments of an informal character.95

§ 1048. When the warehouseman is bound to deliver.

Section 8.-[OBLIGATION OF WAREHOUSEMAN TO DELIVER.] A warehouseman, in the absence of some lawful excuse provided by this act, is bound to deliver the goods upon a demand made either by the holder of a receipt for the goods or by the depositor, if such demand is accompanied with—

(a) An offer to satisfy the warehouseman's lien,

tiable and non-negotiable receipts. The former is the negotiable representative of the goods, the latter is merely evidence of an ordinary contract of bailment. This distinction accords with mercantile usage. Hallgarten v. Oldham, 135 Mass. 1, 46 Am. Rep.

433.

94 It is the practice of most if not all careful warehousemen not to issue

duplicate negotiable receipts at all, and such issues are to be discouraged, but following a large number of statutes already existing this act, instead of forbidding the practice altogether, safeguards it by requiring the receipt to be plainly marked.

95 This section like the preceding is aimed at obvious frauds. Both follow much previously existing legislation.

(b) An offer to surrender the receipt if negotiable, with such indorsements as would be necessary for the negotiation of the receipt, and

(c) A readiness and willingness to sign, when the goods are delivered, an acknowledgment that they have been delivered, if such signature is requested by the warehouseman.

In case the warehouseman refuses or fails to deliver the goods in compliance with a demand by the holder or depositor so accompanied, the burden shall be upon the warehouseman to establish the existence of a lawful excuse for such refusal.96

§ 1049. When the warehouseman is justified in delivering, and his liability for misdelivery.

Section 9.-JUSTIFICATION OF WAREHOUSEMAN IN DELIVERING.] A warehouseman is justified in delivering the goods, subject to the provisions of the three following sections, to one who is

(a) The person lawfully entitled to the possession of the goods, or his agent,

(b) A person who is either himself entitled to delivery by the terms of a non-negotiable receipt issued for the goods, or who has written authority from the person so entitled either indorsed upon the receipt or written upon another paper, or

(c) A person in possession of a negotiable receipt by the terms of which the goods are deliverable to him or order or to bearer, or which has been endorsed to him or in blank by the person to whom delivery was promised by the terms of the receipt or by his mediate or immediate indorsee.97

96 See the definition of "holder" in Section 58. The requirement of signing an acknowledgment that the goods have been received is in accordance with universal business usage, though it is doubtful if the usage has been supported by law. As the usage is reasonable it is adopted as the rule of this act. The burden imposed on the warehouseman in the last paragraph agrees with previously existing law. Burnell

v. New York Central R. Co., 45 N. Y. 184. A demand is not a condition precedent to suit by the depositor, if the goods have been destroyed. Buffalo Grain Co. v. Sowerby, 195 N. Y. 355, 358, 88 N. E. 569.

97 This section gives the warehouseman a justification in some cases where he would not under the preceding section be bound to deliver; e. g., if a thief presented a negotiable receipt

owner.

Prior to the enactment of the statute, a bailee might "excuse himself for a failure to deliver the property to the bailor when called for, by showing that the property was taken out of his custody under the authority of valid legal process, and that within a reasonable time he gave notice of that fact to the "98 No doubt the rule is the same under the statute if no negotiable warehouse receipt is outstanding. The officer of the law in the case supposed is a "person lawfully entitled to possession." But under Sections 10, 11 and 25 of the statute a warehouseman, who delivered the goods after garnishment without requiring the surrender of the negotiable receipt, was held liable to the indorsee of the receipt.99

Section 10.-[WAREHOUSEMAN'S LIABILITY FOR MISDELIVERY.] Where a a warehouseman delivers the goods to one who is not in fact lawfully entitled to the possession of them, the warehouseman shall be liable as for conversion to all having a right of property or possession in the goods if he delivered the goods otherwise than as authorized by subdivisions (b) and (c) of the preceding section; 1 and though he delivered the goods as authorized by said subdivisions he shall be so liable, if prior to such delivery he had either

(a) Been requested, by or on behalf of the person lawfully entitled to a right of property or possession in the goods, not to make such delivery, or

(b) Had information that the delivery about to be made was to one not lawfully entitled to the possession of the goods.14

properly indorsed, the warehouseman would be protected if he delivered the goods innocently, though he would not be bound to deliver to him.

98 Roberts v. Stuyvesant Safe Dep. Co., 123 N. Y. 57, 65, 25 N. E. 294, 9 L. R. A. 438, 20 Am. St. Rep. 718. See also Stiles v. Davis, 1 Black, 101, 17 L. Ed. 33; Britton v. Aymar, 23 La. Ann. 63; Schrauth v. Dry Dock Sav. Bank, 86 N. Y. 390; Burton v. Wilkinson, 18 Vt. 186, 46 Am. Dec. 145. See

also Allswede v. Central Warehouse Co. (Mich.), 169 N. W. 13, and analogous cases relating to carriers, infra, § 1094.

99 Manufacturers' Mercantile Co. v. Monarch Refrigerating Co., 266 Ill. 584, 107 N. E. 885.

1 Blaisdell v. Hersum, 233 Mass. 91, 123 N. E. 386.

1a See Schouler, [1905] §§ 44, 45; Velsian v. Lewis, 15 Òreg. 539, 16 Pac. 631.

§ 1050. Cancellation of receipts on delivery of goods.

Section 11.-[NEGOTIABLE RECEIPTS MUST BE CANCELLED WHEN GOODS DELIVERED.] Except as provided in Section 36, where a warehouseman delivers goods for which he has issued a negotiable receipt, the negotiation of which would transfer the right to the possession of the goods, and fails to take up and cancel the receipt, he shall be liable to any one who purchases for value in good faith such receipt, for failure to deliver the goods to him, whether such purchaser acquired title to the receipt before or after the delivery of the goods by the warehouseman. 16

Section 12.-[NEGOTIABLE RECEIPTS MUST BE CANCELLED OR MARKED WHEN PART OF GOODS DELIVERED.] Except as provided in Section 36, where a warehouseman delivers part of the goods for which he had issued a negotiable receipt and fails either to take up and cancel such receipt, or to place plainly upon it a statement of what goods or packages have been delivered he shall be liable, to any one who purchases for value in good faith such receipt, for failure to deliver all the goods specified in the receipt, whether such purchaser acquired title to the receipt before or after the delivery of any portion of the goods by the warehouseman.

§ 1051. Effect of alteration.

Section 13. [ALTERED RECEIPTS.] The alteration of a receipt shall not excuse the warehouseman who issued it from any liability if such alteration was

(a) Immaterial,

(b) Authorized, or

(c) Made without fraudulent intent.

The section does not apply to nonnegotiable receipts, because usage and mercantile necessity frequently require delivery in such cases without surrender of the receipt.

If the alteration was authorized, the warehouseman 16 It is an obvious requirement of the mercantile use of negotiable receipts that the goods shall remain in the warehouse as long as the receipt is outstanding, and statutes similar in effect to this section have been previously in force in some States.