Negotiation and Transfer of Warehouse Receipts As to negotiation and transfer of receipts, the Uniform Ware house Receipts Act follows the law of notes and bills. A nego tiable receipt may be negotiated by delivery where, by the terms of the receipt, the warehouseman undertakes to deliver the goods: (t) to the bearer, or (2) to the order of a specified person, and such person or a subsequent indorsee has indorsed it in blank or to bearer. A negotiable receipt may be negotiated by indorse ment of the person to whose order the goods are, by the terms of the receipt, deliverable. If any indorsement of a bearer or order receipt is to a named person the indorsee can negotiate it only by indorsement. A receipt which is not in such form that it can be negotiated by delivery may be transferred by the holder, by delivery, to a purchaser or donee. A non-negotiable receipt cannot be negotiated, but it can be transferred.
A person to whom a negotiable receipt has been duly nego tiated acquires thereby: (I) such title to the goods as the person negotiating the receipt to him had or had ability to convey to a purchaser in good faith for value, and also such title to the goods as the depositor or person to whose order the goods were to be delivered by the terms of the receipt had or had ability to convey to a purchaser in good faith for value; and (2) the direct obliga tion of the warehouseman to hold possession of the goods for him according to the terms of the receipt as fully as if the warehouse man had contracted directly with him.
A person to whom a receipt has been transferred but not negotiated acquires thereby, as against the transferor, the title to the goods, subject to the terms of any agreement with the transferor. If the receipt is non-negotiable such person also acquires the right to notify the warehouseman of the transfer to him of such receipt, and thereby to acquire the direct obligation of the warehouseman to hold possession of the goods for him according to the terms of the receipt. Prior to the notification of the warehouseman by the transferor or transferee of a non-nego tiable receipt, the title of the transferee to the goods, and the right to acquire the obligation of the warehouseman, may be defeated by the levy of attachment or execution upon the goods by the creditor of the transferor, or by a notification to the warehouseman by the transferor or a subsequent purchaser from the transferor of a subsequent sale of the goods by the transferor; that is, the transferee of a non-negotiable receipt gets only the rights at common law of any purchaser of bailed goods, and the warehouse receipt amounts to nothing but evidence. But where
a negotiable receipt is transferred for value by delivery, and the indorsement of the transferor is essential for negotiation, the transferee acquires also a right against the transferor to compel him to indorse the receipt, unless a contrary intention appears; the negotiation then takes effect as of the time when the indorse ment is actually made.
A person who for value negotiates or transfers a receipt by indorsement or delivery, including one who assigns for value a claim secured by a receipt, unless a contrary intention appears, warrants: 1. That the receipt is genuine.
2. That he has a legal right to negotiate or transfer it.
3. That he has knowledge of no fact which would impair the validity or worth of the receipt.
4. That he has a right to transfer the title to the goods, and that the goods are merchantable or fit for a particular purpose whenever such warranties would have been implied, if the contract of the parties had been to trans fer without a receipt the goods represented thereby.
A mortgagee, pledgee, or holder for security of a receipt, who in good faith demands or receives payment of the debt for which such receipt is security, whether from a party to a draft drawn for such debt or from any other person, is not by so doing deemed to represent or to warrant the genuineness of such receipt or the quantity or quality of the goods described in When a person negotiates and sells a warehouse receipt to another for value, he does not as an indorser incur the ordinary liabilities which attach to the indorser of bills and notes in case of default of the maker; he is more like the person who indorses a note "without recourse," for the indorsement of a receipt does not make the indorser liable for any failure on the part of the warehouseman or previous indorsers of the receipt to fulfil their respective obligations.
The Uniform Warehouse Receipts Act makes it criminal for a warehouseman— r. issue a receipt for goods not received or not actually under his control at the time of issuing such receipt. 2. To issue a receipt containing a false statement.
3. To issue duplicate receipts not so marked.
4. To issue receipts for goods owned in whole or part by himself and not stating that fact in the receipt.