7201. (a) A warehouse receipt may be issued by any warehouse.
(b) If goods, including distilled spirits and agricultural
commodities, are stored under a statute requiring a bond against
withdrawal or a license for the issuance of receipts in the nature of
warehouse receipts, a receipt issued for the goods is deemed to be a
warehouse receipt even if issued by a person that is the owner of
the goods and is not a warehouse.
7202. (a) A warehouse receipt need not be in any particular form.
(b) Unless a warehouse receipt provides for each of the following,
the warehouse is liable for damages caused to a person injured by
its omission:
(1) a statement of the location of the warehouse facility where
the goods are stored;
(2) the date of issue of the receipt;
(3) the unique identification code of the receipt;
(4) a statement whether the goods received will be delivered to
the bearer, to a named person, or to a named person or its order;
(5) the rate of storage and handling charges, unless goods are
stored under a field warehousing arrangement, in which case a
statement of that fact is sufficient on a nonnegotiable receipt;
(6) a description of the goods or the packages containing them;
(7) the signature of the warehouse or its agent;
(8) if the receipt is issued for goods that the warehouse owns,
either solely, jointly, or in common with others, a statement of the
fact of that ownership; and
(9) a statement of the amount of advances made and of liabilities
incurred for which the warehouse claims a lien or security interest,
unless the precise amount of advances made or liabilities incurred,
at the time of the issue of the receipt, is unknown to the warehouse
or to its agent that issued the receipt, in which case a statement of
the fact that advances have been made or liabilities incurred and
the purpose of the advances or liabilities is sufficient.
(c) A warehouse may insert in its receipt any terms that are not
contrary to the provisions of this code and do not impair its
obligation of delivery under Section 7403 or its duty of care under
Section 7204. Any contrary provision is ineffective.
7203. A party to or purchaser for value in good faith of a document
of title, other than a bill of lading, that relies upon the
description of the goods in the document may recover from the issuer
damages caused by the nonreceipt or misdescription of the goods,
except to the extent that:
(1) the document conspicuously indicates that the issuer does not
know whether all or part of the goods in fact were received or
conform to the description, such as a case in which the description
is in terms of marks or labels or kind, quantity, or condition, or
the receipt or description is qualified by "contents, condition, and
quality unknown," "said to contain," or words of similar import, if
the indication is true; or
(2) the party or purchaser otherwise has notice of the nonreceipt
or misdescription.
7204. (a) A warehouse is liable for damages for loss of or injury
to the goods caused by its failure to exercise care with regard to
the goods that a reasonably careful person would exercise under
similar circumstances. Unless otherwise agreed, the warehouse is not
liable for damages that could not have been avoided by the exercise
of that care.
(b) Damages may be limited by a term in the warehouse receipt or
storage agreement limiting the amount of liability in case of loss or
damage beyond which the warehouse is not liable. Such a limitation
is not effective with respect to the warehouse's liability for
conversion to its own use. On request of the bailor in a record at
the time of signing the storage agreement or within a reasonable time
after receipt of the warehouse receipt, the warehouse's liability
may be increased on part or all of the goods covered by the storage
agreement or the warehouse receipt. In this event, increased rates
may be charged based on an increased valuation of the goods.
(c) Reasonable provisions as to the time and manner of presenting
claims and commencing actions based on the bailment may be included
in the warehouse receipt or storage agreement.
(d) This section does not modify or repeal Section 1630 of the
Civil Code nor any of the provisions of the Public Utilities Code or
the Food and Agricultural Code or any lawful regulations issued
thereunder.
7205. A buyer in ordinary course of business of fungible goods sold
and delivered by a warehouse that is also in the business of buying
and selling such goods takes the goods free of any claim under a
warehouse receipt even if the receipt is negotiable and has been duly
negotiated.
7206. (a) A warehouse, by giving notice to the person on whose
account the goods are held and any other person known to claim an
interest in the goods, may require payment of any charges and removal
of the goods from the warehouse at the termination of the period of
storage fixed by the document of title or, if a period is not fixed,
within a stated period not less than 30 days after the warehouse
gives notice. If the goods are not removed before the date specified
in the notice, the warehouse may sell them pursuant to Section 7210.
(b) If a warehouse in good faith believes that goods are about to
deteriorate or decline in value to less than the amount of its lien
within the time provided in subdivision (a) and Section 7210, the
warehouse may specify in the notice given under subdivision (a) any
reasonable shorter time for removal of the goods and, if the goods
are not removed, may sell them at public sale held not less than one
week after a single advertisement or posting.
(c) If, as a result of a quality or condition of the goods of
which the warehouse did not have notice at the time of deposit, the
goods are a hazard to other property, the warehouse facilities, or
other persons, the warehouse may sell the goods at public or private
sale without advertisement or posting on reasonable notification to
all persons known to claim an interest in the goods. If the
warehouse, after a reasonable effort, is unable to sell the goods, it
may dispose of them in any lawful manner and does not incur
liability by reason of that disposition.
(d) A warehouse shall deliver the goods to any person entitled to
them under this division upon due demand made at any time before sale
or other disposition under this section.
(e) A warehouse may satisfy its lien from the proceeds of any sale
or disposition under this section but shall hold the balance for
delivery on the demand of any person to which the warehouse would
have been bound to deliver the goods.
7207. (a) Unless the warehouse receipt provides otherwise, a
warehouse shall keep separate the goods covered by each receipt so as
to permit at all times identification and delivery of those goods.
However, different lots of fungible goods may be commingled.
(b) If different lots of fungible goods are commingled, the goods
are owned in common by the persons entitled thereto and the warehouse
is severally liable to each owner for that owner's share. If,
because of overissue, a mass of fungible goods is insufficient to
meet all the receipts the warehouse has issued against it, the
persons entitled include all holders to which overissued receipts
have been duly negotiated.
7208. If a blank in a negotiable tangible warehouse receipt has
been filled in without authority, a good-faith purchaser for value
and without notice of the lack of authority may treat the insertion
as authorized. Any other unauthorized alteration leaves any tangible
or electronic warehouse receipt enforceable against the issuer
according to its original tenor.
7209. (a) A warehouse has a lien against the bailor on the goods
covered by a warehouse receipt or storage agreement or on the
proceeds thereof in its possession for charges for storage or
transportation, including demurrage and terminal charges, insurance,
labor, or other charges, present or future, in relation to the goods,
and for expenses necessary for preservation of the goods or
reasonably incurred in their sale pursuant to law. If the person on
whose account the goods are held is liable for similar charges or
expenses in relation to other goods whenever deposited and it is
stated in the warehouse receipt or storage agreement that a lien is
claimed for charges and expenses in relation to other goods, the
warehouse also has a lien against the goods covered by the warehouse
receipt or storage agreement or on the proceeds thereof in its
possession for those charges and expenses, whether or not the other
goods have been delivered by the warehouse. However, as against a
person to which a negotiable warehouse receipt is duly negotiated, a
warehouse's lien is limited to charges in an amount or at a rate
specified in the warehouse receipt or, if no charges are so
specified, to a reasonable charge for storage of the specific goods
covered by the receipt subsequent to the date of the receipt.
(b) A warehouse may also reserve a security interest against the
bailor for the maximum amount specified on the receipt for charges
other than those specified in subdivision (a), such as for money
advanced and interest. The security interest is governed by Division
9 (commencing with Section 9101).
(c) A warehouse's lien for charges and expenses under subdivision
(a) or a security interest under subdivision (b) is also effective
against any person that so entrusted the bailor with possession of
the goods that a pledge of them by the bailor to a good-faith
purchaser for value would have been valid. However, the lien or
security interest is not effective against a person that before
issuance of a document of title had a legal interest or a perfected
security interest in the goods and that did not:
(1) deliver or entrust the goods or any document of title covering
the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under Section 7403; or
(C) power of disposition under Section 2403 or 9320 or subdivision
(c) of Section 9321 or subdivision (b) of Section 10304 or
subdivision (b) of Section 10305 or other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee of
any document.
(d) A warehouse's lien on household goods for charges and expenses
in relation to the goods under subdivision (a) is also effective
against all persons if the depositor was the legal possessor of the
goods at the time of deposit. In this subdivision, "household goods"
means furniture, furnishings, or personal effects used by the
depositor in a dwelling.
(e) A warehouse loses its lien on any goods that it voluntarily
delivers or unjustifiably refuses to deliver.
7210. (a) Except as otherwise provided in subdivision (b), a
warehouse's lien may be enforced by public or private sale of the
goods, in bulk or in packages, at any time or place and on any terms
that are commercially reasonable, after notifying all persons known
to claim an interest in the goods. Notification may be made by mail,
personal service, or verifiable electronic mail. The notification
must include a statement of the amount due, the nature of the
proposed sale, and the time and place of any public sale. The fact
that a better price could have been obtained by a sale at a different
time or in a method different from that selected by the warehouse is
not of itself sufficient to establish that the sale was not made in
a commercially reasonable manner. The warehouse sells in a
commercially reasonable manner if the warehouse sells the goods in
the usual manner in any recognized market therefor, sells at the
price current in that market at the time of the sale, or otherwise
sells in conformity with commercially reasonable practices among
dealers in the type of goods sold. A sale of more goods than
apparently necessary to be offered to ensure satisfaction of the
obligation is not commercially reasonable, except in cases covered by
the preceding sentence.
(b) A warehouse may enforce its lien on goods, other than goods
stored by a merchant in the course of its business, only if the
following requirements are satisfied:
(1) All persons known to claim an interest in the goods must be
notified.
(2) The notification must include an itemized statement of the
claim, a description of the goods subject to the lien, a demand for
payment within a specified time not less than 10 days after receipt
of the notification, and a conspicuous statement that unless the
claim is paid within that time the goods will be advertised for sale
and sold by auction at a specified time and place.
(3) The sale must conform to the terms of the notification.
(4) The sale must be held at the nearest suitable place to where
the goods are held or stored.
(5) After the expiration of the time given in the notification, an
advertisement of the sale must be published once a week for two
weeks consecutively in a newspaper of general circulation where the
sale is to be held. The advertisement must include a description of
the goods, the name of the person on whose account the goods are
being held, and the time and place of the sale. The sale must take
place at least 15 days after the first publication. If there is no
newspaper of general circulation where the sale is to be held, the
advertisement must be posted at least 10 days before the sale in not
fewer than six conspicuous places in the neighborhood of the proposed
sale.
(c) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred in complying with this section.
In that event, the goods may not be sold but must be retained by the
warehouse subject to the terms of the receipt and this division.
(d) A warehouse may buy at any public sale held pursuant to this
section.
(e) A purchaser in good faith of goods sold to enforce a warehouse'
s lien takes the goods free of any rights of persons against which
the lien was valid, despite the warehouse's noncompliance with this
section.
(f) A warehouse may satisfy its lien from the proceeds of any sale
pursuant to this section but shall hold the balance, if any, for
delivery on demand to any person to which the warehouse would have
been bound to deliver the goods.
(g) The rights provided by this section are in addition to all
other rights allowed by law to a creditor against a debtor.
(h) If a lien is on goods stored by a merchant in the course of
its business, the lien may be enforced in accordance with subdivision
(a) or (b).
(i) A warehouse is liable for damages caused by failure to comply
with the requirements for sale under this section and, in case of
willful violation, is liable for conversion.
7201. (a) A warehouse receipt may be issued by any warehouse.
(b) If goods, including distilled spirits and agricultural
commodities, are stored under a statute requiring a bond against
withdrawal or a license for the issuance of receipts in the nature of
warehouse receipts, a receipt issued for the goods is deemed to be a
warehouse receipt even if issued by a person that is the owner of
the goods and is not a warehouse.
7202. (a) A warehouse receipt need not be in any particular form.
(b) Unless a warehouse receipt provides for each of the following,
the warehouse is liable for damages caused to a person injured by
its omission:
(1) a statement of the location of the warehouse facility where
the goods are stored;
(2) the date of issue of the receipt;
(3) the unique identification code of the receipt;
(4) a statement whether the goods received will be delivered to
the bearer, to a named person, or to a named person or its order;
(5) the rate of storage and handling charges, unless goods are
stored under a field warehousing arrangement, in which case a
statement of that fact is sufficient on a nonnegotiable receipt;
(6) a description of the goods or the packages containing them;
(7) the signature of the warehouse or its agent;
(8) if the receipt is issued for goods that the warehouse owns,
either solely, jointly, or in common with others, a statement of the
fact of that ownership; and
(9) a statement of the amount of advances made and of liabilities
incurred for which the warehouse claims a lien or security interest,
unless the precise amount of advances made or liabilities incurred,
at the time of the issue of the receipt, is unknown to the warehouse
or to its agent that issued the receipt, in which case a statement of
the fact that advances have been made or liabilities incurred and
the purpose of the advances or liabilities is sufficient.
(c) A warehouse may insert in its receipt any terms that are not
contrary to the provisions of this code and do not impair its
obligation of delivery under Section 7403 or its duty of care under
Section 7204. Any contrary provision is ineffective.
7203. A party to or purchaser for value in good faith of a document
of title, other than a bill of lading, that relies upon the
description of the goods in the document may recover from the issuer
damages caused by the nonreceipt or misdescription of the goods,
except to the extent that:
(1) the document conspicuously indicates that the issuer does not
know whether all or part of the goods in fact were received or
conform to the description, such as a case in which the description
is in terms of marks or labels or kind, quantity, or condition, or
the receipt or description is qualified by "contents, condition, and
quality unknown," "said to contain," or words of similar import, if
the indication is true; or
(2) the party or purchaser otherwise has notice of the nonreceipt
or misdescription.
7204. (a) A warehouse is liable for damages for loss of or injury
to the goods caused by its failure to exercise care with regard to
the goods that a reasonably careful person would exercise under
similar circumstances. Unless otherwise agreed, the warehouse is not
liable for damages that could not have been avoided by the exercise
of that care.
(b) Damages may be limited by a term in the warehouse receipt or
storage agreement limiting the amount of liability in case of loss or
damage beyond which the warehouse is not liable. Such a limitation
is not effective with respect to the warehouse's liability for
conversion to its own use. On request of the bailor in a record at
the time of signing the storage agreement or within a reasonable time
after receipt of the warehouse receipt, the warehouse's liability
may be increased on part or all of the goods covered by the storage
agreement or the warehouse receipt. In this event, increased rates
may be charged based on an increased valuation of the goods.
(c) Reasonable provisions as to the time and manner of presenting
claims and commencing actions based on the bailment may be included
in the warehouse receipt or storage agreement.
(d) This section does not modify or repeal Section 1630 of the
Civil Code nor any of the provisions of the Public Utilities Code or
the Food and Agricultural Code or any lawful regulations issued
thereunder.
7205. A buyer in ordinary course of business of fungible goods sold
and delivered by a warehouse that is also in the business of buying
and selling such goods takes the goods free of any claim under a
warehouse receipt even if the receipt is negotiable and has been duly
negotiated.
7206. (a) A warehouse, by giving notice to the person on whose
account the goods are held and any other person known to claim an
interest in the goods, may require payment of any charges and removal
of the goods from the warehouse at the termination of the period of
storage fixed by the document of title or, if a period is not fixed,
within a stated period not less than 30 days after the warehouse
gives notice. If the goods are not removed before the date specified
in the notice, the warehouse may sell them pursuant to Section 7210.
(b) If a warehouse in good faith believes that goods are about to
deteriorate or decline in value to less than the amount of its lien
within the time provided in subdivision (a) and Section 7210, the
warehouse may specify in the notice given under subdivision (a) any
reasonable shorter time for removal of the goods and, if the goods
are not removed, may sell them at public sale held not less than one
week after a single advertisement or posting.
(c) If, as a result of a quality or condition of the goods of
which the warehouse did not have notice at the time of deposit, the
goods are a hazard to other property, the warehouse facilities, or
other persons, the warehouse may sell the goods at public or private
sale without advertisement or posting on reasonable notification to
all persons known to claim an interest in the goods. If the
warehouse, after a reasonable effort, is unable to sell the goods, it
may dispose of them in any lawful manner and does not incur
liability by reason of that disposition.
(d) A warehouse shall deliver the goods to any person entitled to
them under this division upon due demand made at any time before sale
or other disposition under this section.
(e) A warehouse may satisfy its lien from the proceeds of any sale
or disposition under this section but shall hold the balance for
delivery on the demand of any person to which the warehouse would
have been bound to deliver the goods.
7207. (a) Unless the warehouse receipt provides otherwise, a
warehouse shall keep separate the goods covered by each receipt so as
to permit at all times identification and delivery of those goods.
However, different lots of fungible goods may be commingled.
(b) If different lots of fungible goods are commingled, the goods
are owned in common by the persons entitled thereto and the warehouse
is severally liable to each owner for that owner's share. If,
because of overissue, a mass of fungible goods is insufficient to
meet all the receipts the warehouse has issued against it, the
persons entitled include all holders to which overissued receipts
have been duly negotiated.
7208. If a blank in a negotiable tangible warehouse receipt has
been filled in without authority, a good-faith purchaser for value
and without notice of the lack of authority may treat the insertion
as authorized. Any other unauthorized alteration leaves any tangible
or electronic warehouse receipt enforceable against the issuer
according to its original tenor.
7209. (a) A warehouse has a lien against the bailor on the goods
covered by a warehouse receipt or storage agreement or on the
proceeds thereof in its possession for charges for storage or
transportation, including demurrage and terminal charges, insurance,
labor, or other charges, present or future, in relation to the goods,
and for expenses necessary for preservation of the goods or
reasonably incurred in their sale pursuant to law. If the person on
whose account the goods are held is liable for similar charges or
expenses in relation to other goods whenever deposited and it is
stated in the warehouse receipt or storage agreement that a lien is
claimed for charges and expenses in relation to other goods, the
warehouse also has a lien against the goods covered by the warehouse
receipt or storage agreement or on the proceeds thereof in its
possession for those charges and expenses, whether or not the other
goods have been delivered by the warehouse. However, as against a
person to which a negotiable warehouse receipt is duly negotiated, a
warehouse's lien is limited to charges in an amount or at a rate
specified in the warehouse receipt or, if no charges are so
specified, to a reasonable charge for storage of the specific goods
covered by the receipt subsequent to the date of the receipt.
(b) A warehouse may also reserve a security interest against the
bailor for the maximum amount specified on the receipt for charges
other than those specified in subdivision (a), such as for money
advanced and interest. The security interest is governed by Division
9 (commencing with Section 9101).
(c) A warehouse's lien for charges and expenses under subdivision
(a) or a security interest under subdivision (b) is also effective
against any person that so entrusted the bailor with possession of
the goods that a pledge of them by the bailor to a good-faith
purchaser for value would have been valid. However, the lien or
security interest is not effective against a person that before
issuance of a document of title had a legal interest or a perfected
security interest in the goods and that did not:
(1) deliver or entrust the goods or any document of title covering
the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under Section 7403; or
(C) power of disposition under Section 2403 or 9320 or subdivision
(c) of Section 9321 or subdivision (b) of Section 10304 or
subdivision (b) of Section 10305 or other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee of
any document.
(d) A warehouse's lien on household goods for charges and expenses
in relation to the goods under subdivision (a) is also effective
against all persons if the depositor was the legal possessor of the
goods at the time of deposit. In this subdivision, "household goods"
means furniture, furnishings, or personal effects used by the
depositor in a dwelling.
(e) A warehouse loses its lien on any goods that it voluntarily
delivers or unjustifiably refuses to deliver.
7210. (a) Except as otherwise provided in subdivision (b), a
warehouse's lien may be enforced by public or private sale of the
goods, in bulk or in packages, at any time or place and on any terms
that are commercially reasonable, after notifying all persons known
to claim an interest in the goods. Notification may be made by mail,
personal service, or verifiable electronic mail. The notification
must include a statement of the amount due, the nature of the
proposed sale, and the time and place of any public sale. The fact
that a better price could have been obtained by a sale at a different
time or in a method different from that selected by the warehouse is
not of itself sufficient to establish that the sale was not made in
a commercially reasonable manner. The warehouse sells in a
commercially reasonable manner if the warehouse sells the goods in
the usual manner in any recognized market therefor, sells at the
price current in that market at the time of the sale, or otherwise
sells in conformity with commercially reasonable practices among
dealers in the type of goods sold. A sale of more goods than
apparently necessary to be offered to ensure satisfaction of the
obligation is not commercially reasonable, except in cases covered by
the preceding sentence.
(b) A warehouse may enforce its lien on goods, other than goods
stored by a merchant in the course of its business, only if the
following requirements are satisfied:
(1) All persons known to claim an interest in the goods must be
notified.
(2) The notification must include an itemized statement of the
claim, a description of the goods subject to the lien, a demand for
payment within a specified time not less than 10 days after receipt
of the notification, and a conspicuous statement that unless the
claim is paid within that time the goods will be advertised for sale
and sold by auction at a specified time and place.
(3) The sale must conform to the terms of the notification.
(4) The sale must be held at the nearest suitable place to where
the goods are held or stored.
(5) After the expiration of the time given in the notification, an
advertisement of the sale must be published once a week for two
weeks consecutively in a newspaper of general circulation where the
sale is to be held. The advertisement must include a description of
the goods, the name of the person on whose account the goods are
being held, and the time and place of the sale. The sale must take
place at least 15 days after the first publication. If there is no
newspaper of general circulation where the sale is to be held, the
advertisement must be posted at least 10 days before the sale in not
fewer than six conspicuous places in the neighborhood of the proposed
sale.
(c) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred in complying with this section.
In that event, the goods may not be sold but must be retained by the
warehouse subject to the terms of the receipt and this division.
(d) A warehouse may buy at any public sale held pursuant to this
section.
(e) A purchaser in good faith of goods sold to enforce a warehouse'
s lien takes the goods free of any rights of persons against which
the lien was valid, despite the warehouse's noncompliance with this
section.
(f) A warehouse may satisfy its lien from the proceeds of any sale
pursuant to this section but shall hold the balance, if any, for
delivery on demand to any person to which the warehouse would have
been bound to deliver the goods.
(g) The rights provided by this section are in addition to all
other rights allowed by law to a creditor against a debtor.
(h) If a lien is on goods stored by a merchant in the course of
its business, the lien may be enforced in accordance with subdivision
(a) or (b).
(i) A warehouse is liable for damages caused by failure to comply
with the requirements for sale under this section and, in case of
willful violation, is liable for conversion.
7201. (a) A warehouse receipt may be issued by any warehouse.
(b) If goods, including distilled spirits and agricultural
commodities, are stored under a statute requiring a bond against
withdrawal or a license for the issuance of receipts in the nature of
warehouse receipts, a receipt issued for the goods is deemed to be a
warehouse receipt even if issued by a person that is the owner of
the goods and is not a warehouse.
7202. (a) A warehouse receipt need not be in any particular form.
(b) Unless a warehouse receipt provides for each of the following,
the warehouse is liable for damages caused to a person injured by
its omission:
(1) a statement of the location of the warehouse facility where
the goods are stored;
(2) the date of issue of the receipt;
(3) the unique identification code of the receipt;
(4) a statement whether the goods received will be delivered to
the bearer, to a named person, or to a named person or its order;
(5) the rate of storage and handling charges, unless goods are
stored under a field warehousing arrangement, in which case a
statement of that fact is sufficient on a nonnegotiable receipt;
(6) a description of the goods or the packages containing them;
(7) the signature of the warehouse or its agent;
(8) if the receipt is issued for goods that the warehouse owns,
either solely, jointly, or in common with others, a statement of the
fact of that ownership; and
(9) a statement of the amount of advances made and of liabilities
incurred for which the warehouse claims a lien or security interest,
unless the precise amount of advances made or liabilities incurred,
at the time of the issue of the receipt, is unknown to the warehouse
or to its agent that issued the receipt, in which case a statement of
the fact that advances have been made or liabilities incurred and
the purpose of the advances or liabilities is sufficient.
(c) A warehouse may insert in its receipt any terms that are not
contrary to the provisions of this code and do not impair its
obligation of delivery under Section 7403 or its duty of care under
Section 7204. Any contrary provision is ineffective.
7203. A party to or purchaser for value in good faith of a document
of title, other than a bill of lading, that relies upon the
description of the goods in the document may recover from the issuer
damages caused by the nonreceipt or misdescription of the goods,
except to the extent that:
(1) the document conspicuously indicates that the issuer does not
know whether all or part of the goods in fact were received or
conform to the description, such as a case in which the description
is in terms of marks or labels or kind, quantity, or condition, or
the receipt or description is qualified by "contents, condition, and
quality unknown," "said to contain," or words of similar import, if
the indication is true; or
(2) the party or purchaser otherwise has notice of the nonreceipt
or misdescription.
7204. (a) A warehouse is liable for damages for loss of or injury
to the goods caused by its failure to exercise care with regard to
the goods that a reasonably careful person would exercise under
similar circumstances. Unless otherwise agreed, the warehouse is not
liable for damages that could not have been avoided by the exercise
of that care.
(b) Damages may be limited by a term in the warehouse receipt or
storage agreement limiting the amount of liability in case of loss or
damage beyond which the warehouse is not liable. Such a limitation
is not effective with respect to the warehouse's liability for
conversion to its own use. On request of the bailor in a record at
the time of signing the storage agreement or within a reasonable time
after receipt of the warehouse receipt, the warehouse's liability
may be increased on part or all of the goods covered by the storage
agreement or the warehouse receipt. In this event, increased rates
may be charged based on an increased valuation of the goods.
(c) Reasonable provisions as to the time and manner of presenting
claims and commencing actions based on the bailment may be included
in the warehouse receipt or storage agreement.
(d) This section does not modify or repeal Section 1630 of the
Civil Code nor any of the provisions of the Public Utilities Code or
the Food and Agricultural Code or any lawful regulations issued
thereunder.
7205. A buyer in ordinary course of business of fungible goods sold
and delivered by a warehouse that is also in the business of buying
and selling such goods takes the goods free of any claim under a
warehouse receipt even if the receipt is negotiable and has been duly
negotiated.
7206. (a) A warehouse, by giving notice to the person on whose
account the goods are held and any other person known to claim an
interest in the goods, may require payment of any charges and removal
of the goods from the warehouse at the termination of the period of
storage fixed by the document of title or, if a period is not fixed,
within a stated period not less than 30 days after the warehouse
gives notice. If the goods are not removed before the date specified
in the notice, the warehouse may sell them pursuant to Section 7210.
(b) If a warehouse in good faith believes that goods are about to
deteriorate or decline in value to less than the amount of its lien
within the time provided in subdivision (a) and Section 7210, the
warehouse may specify in the notice given under subdivision (a) any
reasonable shorter time for removal of the goods and, if the goods
are not removed, may sell them at public sale held not less than one
week after a single advertisement or posting.
(c) If, as a result of a quality or condition of the goods of
which the warehouse did not have notice at the time of deposit, the
goods are a hazard to other property, the warehouse facilities, or
other persons, the warehouse may sell the goods at public or private
sale without advertisement or posting on reasonable notification to
all persons known to claim an interest in the goods. If the
warehouse, after a reasonable effort, is unable to sell the goods, it
may dispose of them in any lawful manner and does not incur
liability by reason of that disposition.
(d) A warehouse shall deliver the goods to any person entitled to
them under this division upon due demand made at any time before sale
or other disposition under this section.
(e) A warehouse may satisfy its lien from the proceeds of any sale
or disposition under this section but shall hold the balance for
delivery on the demand of any person to which the warehouse would
have been bound to deliver the goods.
7207. (a) Unless the warehouse receipt provides otherwise, a
warehouse shall keep separate the goods covered by each receipt so as
to permit at all times identification and delivery of those goods.
However, different lots of fungible goods may be commingled.
(b) If different lots of fungible goods are commingled, the goods
are owned in common by the persons entitled thereto and the warehouse
is severally liable to each owner for that owner's share. If,
because of overissue, a mass of fungible goods is insufficient to
meet all the receipts the warehouse has issued against it, the
persons entitled include all holders to which overissued receipts
have been duly negotiated.
7208. If a blank in a negotiable tangible warehouse receipt has
been filled in without authority, a good-faith purchaser for value
and without notice of the lack of authority may treat the insertion
as authorized. Any other unauthorized alteration leaves any tangible
or electronic warehouse receipt enforceable against the issuer
according to its original tenor.
7209. (a) A warehouse has a lien against the bailor on the goods
covered by a warehouse receipt or storage agreement or on the
proceeds thereof in its possession for charges for storage or
transportation, including demurrage and terminal charges, insurance,
labor, or other charges, present or future, in relation to the goods,
and for expenses necessary for preservation of the goods or
reasonably incurred in their sale pursuant to law. If the person on
whose account the goods are held is liable for similar charges or
expenses in relation to other goods whenever deposited and it is
stated in the warehouse receipt or storage agreement that a lien is
claimed for charges and expenses in relation to other goods, the
warehouse also has a lien against the goods covered by the warehouse
receipt or storage agreement or on the proceeds thereof in its
possession for those charges and expenses, whether or not the other
goods have been delivered by the warehouse. However, as against a
person to which a negotiable warehouse receipt is duly negotiated, a
warehouse's lien is limited to charges in an amount or at a rate
specified in the warehouse receipt or, if no charges are so
specified, to a reasonable charge for storage of the specific goods
covered by the receipt subsequent to the date of the receipt.
(b) A warehouse may also reserve a security interest against the
bailor for the maximum amount specified on the receipt for charges
other than those specified in subdivision (a), such as for money
advanced and interest. The security interest is governed by Division
9 (commencing with Section 9101).
(c) A warehouse's lien for charges and expenses under subdivision
(a) or a security interest under subdivision (b) is also effective
against any person that so entrusted the bailor with possession of
the goods that a pledge of them by the bailor to a good-faith
purchaser for value would have been valid. However, the lien or
security interest is not effective against a person that before
issuance of a document of title had a legal interest or a perfected
security interest in the goods and that did not:
(1) deliver or entrust the goods or any document of title covering
the goods to the bailor or the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
(B) power to obtain delivery under Section 7403; or
(C) power of disposition under Section 2403 or 9320 or subdivision
(c) of Section 9321 or subdivision (b) of Section 10304 or
subdivision (b) of Section 10305 or other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee of
any document.
(d) A warehouse's lien on household goods for charges and expenses
in relation to the goods under subdivision (a) is also effective
against all persons if the depositor was the legal possessor of the
goods at the time of deposit. In this subdivision, "household goods"
means furniture, furnishings, or personal effects used by the
depositor in a dwelling.
(e) A warehouse loses its lien on any goods that it voluntarily
delivers or unjustifiably refuses to deliver.
7210. (a) Except as otherwise provided in subdivision (b), a
warehouse's lien may be enforced by public or private sale of the
goods, in bulk or in packages, at any time or place and on any terms
that are commercially reasonable, after notifying all persons known
to claim an interest in the goods. Notification may be made by mail,
personal service, or verifiable electronic mail. The notification
must include a statement of the amount due, the nature of the
proposed sale, and the time and place of any public sale. The fact
that a better price could have been obtained by a sale at a different
time or in a method different from that selected by the warehouse is
not of itself sufficient to establish that the sale was not made in
a commercially reasonable manner. The warehouse sells in a
commercially reasonable manner if the warehouse sells the goods in
the usual manner in any recognized market therefor, sells at the
price current in that market at the time of the sale, or otherwise
sells in conformity with commercially reasonable practices among
dealers in the type of goods sold. A sale of more goods than
apparently necessary to be offered to ensure satisfaction of the
obligation is not commercially reasonable, except in cases covered by
the preceding sentence.
(b) A warehouse may enforce its lien on goods, other than goods
stored by a merchant in the course of its business, only if the
following requirements are satisfied:
(1) All persons known to claim an interest in the goods must be
notified.
(2) The notification must include an itemized statement of the
claim, a description of the goods subject to the lien, a demand for
payment within a specified time not less than 10 days after receipt
of the notification, and a conspicuous statement that unless the
claim is paid within that time the goods will be advertised for sale
and sold by auction at a specified time and place.
(3) The sale must conform to the terms of the notification.
(4) The sale must be held at the nearest suitable place to where
the goods are held or stored.
(5) After the expiration of the time given in the notification, an
advertisement of the sale must be published once a week for two
weeks consecutively in a newspaper of general circulation where the
sale is to be held. The advertisement must include a description of
the goods, the name of the person on whose account the goods are
being held, and the time and place of the sale. The sale must take
place at least 15 days after the first publication. If there is no
newspaper of general circulation where the sale is to be held, the
advertisement must be posted at least 10 days before the sale in not
fewer than six conspicuous places in the neighborhood of the proposed
sale.
(c) Before any sale pursuant to this section, any person claiming
a right in the goods may pay the amount necessary to satisfy the lien
and the reasonable expenses incurred in complying with this section.
In that event, the goods may not be sold but must be retained by the
warehouse subject to the terms of the receipt and this division.
(d) A warehouse may buy at any public sale held pursuant to this
section.
(e) A purchaser in good faith of goods sold to enforce a warehouse'
s lien takes the goods free of any rights of persons against which
the lien was valid, despite the warehouse's noncompliance with this
section.
(f) A warehouse may satisfy its lien from the proceeds of any sale
pursuant to this section but shall hold the balance, if any, for
delivery on demand to any person to which the warehouse would have
been bound to deliver the goods.
(g) The rights provided by this section are in addition to all
other rights allowed by law to a creditor against a debtor.
(h) If a lien is on goods stored by a merchant in the course of
its business, the lien may be enforced in accordance with subdivision
(a) or (b).
(i) A warehouse is liable for damages caused by failure to comply
with the requirements for sale under this section and, in case of
willful violation, is liable for conversion.
