Altered Receipts

What are the Effects of ALTERED RECEIPTS?

a. Alteration immaterial: whether fraudulent or not, authorized or not, the warehouseman is liable on the altered receipt according to its original tenor;

b. Alteration material: but it was authorized, the warehouseman is liable according to the terms  of the receipts as altered;

c. Material alteration innocently made:  though unauthorized, the warehouseman is liable on the altered receipt according to its original term;

d. Material alteration fraudulently made: warehouseman is liable according to the original tenor to a:

1.    purchaser of the receipt for value without notice; and

2.    to the alterer and subsequent purchasers with notice ( BUT his liability is limited only to delivery as he is excused from any other liability)

* Even a fraudulent alteration cannot divest the title of the owner of stored goods and the warehouseman is liable to return them to the owner.  BUT a bona fide holder acquires no right to the goods under a negotiable receipt which has been stolen or lost or which the indorsement has been forged.

With Regard to Ownership 

a.   Ownership is not a defense for refusal to deliver

·         The warehouseman cannot refuse to deliver the goods on the ground that he has acquired title or right to the possession of it unless such is derived:

1.    directly or indirectly from a transfer made by the depositor at the time of the deposit for storage or subsequent thereto;

2.    from the warehouseman’s lien

b.     Adverse title of a 3^rd person is not a defense for refusal to deliver by a warehouseman to his bailor on demand EXCEPT:

1.   To persons to whom the goods must be livered (Sec. 9)

2.   To the person who wins in the interpleader case (Sec. 17)

3.   To the person he finds to be entitled to the possession after investigation (Sec. 18)

4.   To the buyer in case there was a valid sale of the goods (Sec. 36)