Rights and Obligations of Warehouseman

What are the Obligation and Rights of a Warehouseman upon their Receipts?

 Principal obligations of a warehouseman

1.    To take care of the goods, and be liable for failure to exercise care (BUT he is not liable for loss or injury which could not have been avoided, unless there is a stipulation to the contrary);

2.    To deliver the goods to the holder of the receipt or the depositor upon DEMAND accompanied with:

a.    an offer to satisfy the warehouseman’s lien- because a warehouseman may refuse delivery until his lien is satisfied

b.    an offer to surrender the receipt- for the protection of the warehouseman and to avoid criminal liability; this is subject to waiver

c.    an offer to sign when the goods are delivered, an acknowledgment that they have been delivered

BUT a warehouseman may still refuse delivery on the grounds of some lawful excuse like:

a. Sec. 10

1.    he has been requested by the person lawfully entitled to the goods not to make delivery;

2.    he has information that the delivery about to be made was to one not lawfully entitled to the goods;

b. Sec. 16:  He has acquired title to the goods which was derived from

1.    transfer made by the depositor at the time of the deposit for storage or subsequent thereto

 2.     the warehouseman’s lien

c. Sec. 18:  If there are several claimants to the goods

d. Sec. 21:  If the goods were lost and he had no fault

e. Sec. 36:  He has already lawfully sold the goods

Who are the Persons to whom the goods must be delivered by the warehouseman

1.    Persons lawfully entitled to the possession of the goods or its agent

2.    Persons entitled to deliver under:

a.    a non-negotiable receipt; or

b.    with written authority

3.    person in possession of a negotiable receipt (which was lawfully negotiated)

NOTE:  a warehouseman does NOT have a cause of action against a person to whom he misdelivered the thing UNLESS the depositor sues him.