Bill 44 (Legislature 11, Session 1)

L11 S1 7166

Alberta — Bills

Bill No. 44 of 1949. A BILL TO MAKE UNIFORM THE LAW RESPECTING WAREHOUSE RECEIPTS. NOTE. This Bill enacts a new Act to be known as "The Ware house Receipts Act". In mercantile usage a practice has grown up of issuing warehouse receipts which are dealt with as documents of title. Both negotiable and non-negotiable receipts are issued and used. In many of the States of the United States of America statutory provisions have been introduced govern ing the rights and liabilities incurred by the use of these warehouse receipts.

The Conference of Commissioners on Uniformity of Legislation in Canada gave consideration to this matter and decided that it would facilitate business practice if uniform laws on this subject were adopted throughout Canada. A uniform Act was prepared and drafted in 1945 and recom mended to all of the provinces for enactment. It has already been adopted by British Columbia, Manitoba, New Bruns wick and Ontario. This Bill codifies the rights and obligations of parties dealing with warehouse receipts, whether negotiable or non negotiable.

Warehouse receipts are transferred from person to person as though they were documents of title and they thereby assist in the financing, production and dis tribution of natural products and manufactured goods throughout the chain of distribution from manufacturer or prod ucer to retailer. The Bill establishes what forn1 warehouse receipts shall take and what particulars they shall contain. The Bill establishes the duties and liabilities of warehousemen in issuing warehouse receipts.

The warehouseman is required, in the case of a negotiable receipt, to deliver the goods re ferred to in the receipt to the bearer of the receipt upon de mand. The warehouseman is justified in delivering to the person in possession of a negotiable receipt. . Such receipts are cancelled on delivery of the goods 01' partially cancelled on delivery of part of the goods. The warehouseman's lia bility for the care of goods is set out in the Act. Special provisions are made relating to perishable and hazardous goods.

Ordinarily, negotiable receipts are negotiated by deliv~ry or by indorsement depending on the nature of the receIpt.

ii Goods covered by a non-negotiable receipt may be trans ferred by delivery to a purchaser of a transfer in writing, a copy of which is given to the warehouseman who is not bound to deliver to the transferor until he has received notice of the transfer. The rights of purchasers of goods by means of a transfer of a non-negotiable receipt are set out. The rights of a person to whom a negotiable receipt has been negotiated are also dealt with in the Bill. The Bill estab lishes certain warranties which are lllade by any person selling a warehouse receipt unless a contrary intention appears or is expressed.

Indorsers do not become guarantors. In certain cases the negotiation of a receipt is not impaired by fraud; mistake or duress. Railways, expresscolllpanies, and grain elevator com panies have been expressly exempted from the provisions of this Bill as they are governed by Dominion legislation and it is not intended to affect their operations. The provisions of .the Bill do not apply to warehouse receipts made and delivered prior to the first day of April, 1949, which is the date upon which the Bill comes into force.

The passage of this Bill has been requested by the Can adian Warehousemen's Association and by warehousemen carrying on business in Alberta who are of the opinion that this legislation will facilitate business and will have beneficial results on commercial enterprises generally. KENNETH A. MCKENZIE, Acting Legislative Counsel. (This note does not form any part of the Bill but is offered in expla;na,tion of its provisions.)

BILL No. 44 of 1949.

An Act to Make Uniform the Law Respecting Warehouse Receipts. (Assented to ,1949.) HIS MAJ~ST~, by and with the advice and consent of the LegIslatIve Assembly of the Province of Alberta, enacts as follows: 1. This Act may be dted as "The Warehouse Receipts Act". 2.

In this Act, unless the context otherwise requires, (a) "action" includes counterclaim and set-off; (b) "fungible goods" means goods of which any unit is, from its nature or by mercantile custom, treated as the equivalent of any other unit; (c) "goods" includes all ,chattels personal other than things in a,ction and money; (d) "holder", as applied to a negotiable receipt, means a person who has possession of the receipt and a right of property therein, and, as applied to a non negotiable receipt, means a person named therein as the person to whom the goods are to be delivered or his transferee; (e) "negotiable receipt" means a receipt in which it is stated that the goods therein specified will be de livered to bearer or to the order of a named person; (/) "non-negotiable receipt" means a receipt in which it is stated that the goods therein specified will be delivered to the holder thereof; (g) "purchaser" includes mortgagee and pledgee; (h) "receipt" means a warehouse receipt; (i) "to 'purchase" includes to take as mortgagee or a pledgee; (j) "warehouse receipt" means an acknowledgment in writing by a warehouseman of the receipt for stor age of goods not his own; (k) "warehouseman" means a person who receives goods for storage for reward. 3.-

(1) A receipt shall contain the following particulars: (

a) the location of the warehouse or other place where the goods are stored;

2 (

b) the nanle of the person by whom or on whose behalf the goods are deposited; (

c) the date of issue of the receipt; (

d) a statement either,- (

i) that the goods received will be delivered to the holder thereof, or (ii) that the goods will he delivered to bearer or to the order of a named person; (

e) the rate of storage charges; (

f) a description of the goods or of the packages con taining them; (

g) the signature of the warehouseman or his author ized agent; and (

h) a statement of the amount of any ~dvance made and of any liability incurred for WhI'ch the ware- houseman claims a lien.

(2) Where a warehouseman omits from a negotiable receipt any of the particulars set forth in subs.ec~ion (1), he shall be liable for damage caused by the omISSIOn.

(3) No receipt shall by reason of the omission of any of the particulars set forth in subsection (1) be deemed not to be a warehouse receipt.

(4) A warehouseman may insert in a receipt issued by him any other term or condition that,- (

a) is not contrary to any provision of this Act; and (

b) does not impair his obligation to exercise such care and diligence in regard to the goods as a care ful and vigilant owner of similar goods would ex ercise in the custody of them in similar circum stances.

(5) S ubj ect to the provisions of this Act, a "\ varehouse receipt issued by a warehousenlan, when delivered to the owner or bailor of the goods or mailed to him at his address last known to the warehouseman, shall constitute the con tract between the owner or bailor and the warehouseman; provided that the owner or bailor may within twenty days after such delivery or mailing notify the warehouseman in writing that he does not accept such contract and thereupon he shall remove the goods deposited subject to the ware houseman's lien for charges and if such notice is not given then the said warehouse receipt so delivered or mailed shall constitute the contract. 4.

Words in a negotiable receipt limiting its negotiability shall be void. 5.-

(1) No more than one receipt shall be issued in respect of the saUle goods except in case of a lost or de stroyed receipt, in which case the new receipt, if one is given, shall bear the Salne date as the original, and shall be plainly-marked on its-face "duplicate" ~

(2) A warehouseluan shall be liable for all damage caused by his failure to observe the provisions of subsection (1) to any person who purchases the subsequent receipt for valuable ,consideration, believing 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.

(3) A receipt upon the face of which the word "dupli cate" is plainly marked is a representation and warranty by the warehouseman that it is an accurate copy of a receipt properly issued and uncancelled at the date of the issue of the duplicate. 6.-

(1) A warehouseman who issues a non-negotiable receipt shall cause to he plainly rI1arked upon its face the words "non-negotiable" or "not negotiable". .

(2) Where a warehouseman fails to comply with sub section (1), a holder of the receipt who purchases it for valuable consideration believing it to be negotiable may, at his option, treat the receipt as vesting in him all rights attaching to a negotiable receipt and imposing upon the warehouseman the same liabilities he would have incurred had the receipt been negotiable, and the warehouseman shall be lia'ble accordingly. 7.-

(1) A warehouseman in the absence of lawful ex cuse, shall deliver the goods referred to therein,- (

a) in the case of a negotiable receipt, to the bearer thereof upon demand made by the bearer and upon the bearer ,- (

i) satisfying the warehouseman's lien; (ii) surrendering the receipt with such indorse ments as are necessary for the negotiation of the receipt; and (iii) acknowledging in writing the delivery of the goods; and (

b) in the case of a non-negotiable receipt, to the holder thereof upon the holder,- (

i) satisfying the warehouseman's lien; and (ii) acknowledging in writing the delivery of the goods.

(2) Where a warehouseman refuse~ or fails to d€liver the O"oods incompliance with subsectIOn (1), the burden shallbe upon the war~housem.an to ~stablish the existence of a lawful excuse for hIS refusal or faIlure. 8. Where a person is in posses.sion o~ a negoti~ble receipt that has been duly indorsed to hIm or ~ndorsed In l;>lank, <?r by the terms of which the goods are dehve~able to hll~ or hIS order or to bearer, if delivel:y is m~de In good faIth and without notice of any defec~ In t~e tI.tle of that person the warehouseman is justified In delIverIng the goods to that person.

4 9.-

(1) Except as provided in

section 19, where a ware houseman delivers goods for which he has issued a negotiable receipt and fails to take up and cancel the receipt, he shall be liable, for failure to deliver the goods, to anyone who purchases the receipt in good faith and for v.aluable con sideration, whether he acquired title to the r~elpt before or after delivery of the goods by the wareh0'useman.

(2) E~cept as provided in secti0'n 19, where a warehouse man delivers

part 0'f the goods f0'r whi,ch he has issued a negotiable receipt and fails either to take up and cancel the receipt, or to place plainly upon it a statement of what goods or packages have been delivered, he shall be liable, for failure to deliver all the goods specified in the receipt, to anyone who purchases the receipt in g00'd faith and for valuable consideration, whether the purchaser acquired title to the receipt before or after the delivery of any P0'rtion of the goods. 10.

Where a negotiable receipt has been l0'st or destroyed a judge of the District Court upon application after notice to the warehouseman by the person lawfully entitled to possession of the goods may upon satisfac.tory proof of such loss or destruction order the delivery of the goods upon the giving of a bond with sufficient sureties to be appr0'ved in accordance with the practice of the court t0' indemnify the warehouseman against any liability, cost or e~pense he may be under or be put to by reason of the original receipt remaining outstanding; and the warehouseman shall be entitled to his costs of the application. 11.

Where a warehouseman has information that a person other than the holder of a receipt daims to be the owner of or entitled to the goods he may refuse to deliver the goods until he has had a reasonable time not e~ceeding ten days, to ascertain the validity of the adverse daim or to ~ommence interpleader pr0'ceedings. 12.

A negotiable receipt shall in the hands of a holder who has purchased it for valuable consideration be con clusive evidence of the receipt by the warehouseman of the goods therein described as against the warehouseman and any person signing the same on his behalf, notwithstanding that the goods or some part thereof may not have been so received unless the holder of the negotiable receipt has actual notice at the time of receiving same, that the goods ha ve not in fa,ct been received. 13. Where goods are described in a receipt merely by a statement,- (

a) of ~ertain marks or labels on the goods 0'r on the packages containing them; (

b) that the goods are said by the depositor to be goods of a certain kind; or

5 (

c) that the packages containing the goods are said by the depositor to contain goods of a certain kind; or by a statement of import similar to that of clause (a), (

b) or (IC) the statement shall not impose any liability on the warehouseman in respect of the nature, kind or quality of the goods, but shall be deemed to be a representa tion by the warehouseman either that the marks or labels were in fa'ct on the goods or packages or that the goods were in fact described by the depositor as stated, or that the packages containing the goods were in fa,ct described by the depositor as containing goods of a certain kind, as the case may be. 14.

A warehousenlan shall be liable for loss of or injury to goods 'caused by his failure to exercise such care and diligence in regard to them as a careful and vigilant owner of similar goods would exercise in the custody of them in similar circumstances. 1,5.

Where authorized by agreement or by custom, a warehouseman may mingle fungible goods with other goods of the same kind and grade; and in that case the holder of the re,ceipts for the mingled goods shall own the entire mass in common, and each holder shall be entitled to such proportion thereof as the quantity shown by his receipt to have been deposited bears to the whole. 16.

Where goods are delivered to a warehouseman by the owner or person whose act in conveying the title to them to a purchaser in good faith for value would bind the owner, and a negotiable receipt is issued for them, they cannot thereafter while in the possession of the warehouseman, be levied under an execution, unless the receipt is first surrendered to the warehouseman. 17.

Where a negotiable receipt is issued for goods, the warehouseman shall have no lien on the goods, except for charges for storage of those goods subsequent to the date of the receipt, unless the receipt expressly enumerates other charges for which a lien is claimed. 18.-

(1) Where goods are of a perishable nature, or by keeping will deteriorate greatly in value, or injure other property the warehouseman may give such notice as is reasonab'le and possible under the circumstances to the holder of the receipt for the goods if the name and address of the holder is known to the warehouseman or if not known to him then to the depositor, requiring him to satisfy the lien upon the goods, and to remove them fro.m the wa~ehouse, and on the failure of such person to satIsfy the hen and remove the goods within the time specified,in the ~otice, the warehouseman may sell the goods at publIc or prIvate sale without advertising.

(2) The notice referred to in subse,ction (1) may be given by sending it by registered letter post addressed to the person to whom it is to be given at the person's last kn?wn place of address and the notice shall be deemed to be gIven on the day following the mailing.

(3) If the warehouseman after a reasonable effort is unable to sell the goods he may dispose of them in any manner he may think fit, and shall incur no liability by reason thereof.

(4) The warehouseman shall from the proceeds of any sale made pursuant to this section, satisfy his lien. and shall hold the balance in trust for the holder of the receIpt. 19. Where goods have been lawfully sold to satisfy a warehouseman's lien, or have been lawfully sold or disposed of pursuant to the provisions of

section 18, the warehouse man shan not be liable for failure to deliver the goods to the holder of the receipt. 20.-

(1) A negotiable receipt may be negotiated by delivery in either of the following cases: (

a) where, by the terms of the receipt the warehouse man undertakes to deliver the goods to the bearer; or (

b) where, by the terms of the receipt, the warehouse man undertakes to deliver the goods to the order of a named person, and that person or a subse quent indorsee has indorsed it in blank or to bearer.

(2) Where, by the terms of a negotiable receipt, the goods are deliverable to bearer or where a negotiable receipt has been indorsed in blank or to bearer the receipt may he negotiated by the bearer indorsing the same to a named person, and in that ;case the receipt shall thereafter be negotiated by the indorsement of the indorsee or a subse quent indorsee, or by delivery if it is again indorsed in blank or to bearer.

(3) Where, by the terms of a negotiable receipt, the goods are deliverable to the order of a named person, the receipt may be negotiated by the indorsement of that person. .

(4) An indorsement pursuant to subsection (3) may be In blank, to bearer or to a named person and if the indorse ment is to a named person, the receipt may be again negotiated by indorsement in blank, to bearer 0'1' to another named person and subsequent negotiation may be made in like manner. 21. The goods covered by a non-negotiable receipt may be transferred by the holder by delivery to a purchaser or donee of the goods of a transfer in writing executed by the holder, but the transfer shall not affect or bind the warehouseman until he is notified in writing thereof.

7 22 •. -

(1) A pers.on to whom the goods covered by a non negotIable receIpt IS transferred acquires, as against the transferor,- (

a) the title to the goods; and (

b) the right to deposit with the warehouseman the tra?~fer or duplicate thereof or to give notice in w'rItIng to the warehouseman of the transfer.

(2) The transferee acquires the benefit of the obligation o~ the war~houseman to hold possession of the goods for hIm ac·cordlng to the terms of the receipt UpOll,- (

a) deposit of the transfer of the goods; or (

b) giving notice in writing of the transfer and upon the warehouseman having a reasonable opportunity of verifying the transfer. 23. A person to whom a negotiable rt~ceipt is duly nego tiated acquires,- (

a) such title to the goods as the person negotiating the receipt to him had or had ability to transfer to a purchaser in good faith for valuable consideration 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 receipt had or had ability to transfer to a purchaser in good faith for valuable considera tion; and (

b) the benefit of the obligation 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. 24. Where a negotiable receipt is transferred for valuable consideration by delivery, and the indorsement of the trans feror is essential for negotiation, the transferee acquires a right against the transferor to compel him to indorse the receipt, unless a contrary intention appears and the negotia tion shall take effect as of the time when the indorsement is made. 2,5.

A person who for valuable consideration negotiates or transfers a receipt by indorsement or delivery, including one who assigns for valuable consideration a claim secured by a receipt, unless a contrary intention appears, war rants,- (

a) that the receipt is genuine; (

b) that he has a legal right to negotiate or transfer it; (

c) that he has no knowledge of any fact that would impair the validity of the receipt; and (cl) that he has a right to transfer the title to the goods and that the goods are merchantable 01' .fit for a particular purpose whenever such warrantIes. \\'ould have been implied, if the contract of the partles had been to transfer without a receipt the goods repre- sented thel'eb~·.

8 26. The indorsement of a receipt shall not make the indorser liable for any failure on the part of the warehouse man or previous indorsers of the receipt to fulfil their re spective obligations. 27.

The validity of the negotiation of a receipt is not impaired by the fact that the negotiation was a breach of duty on the part of the person making the negotiation, or by the fact that the owner of the receipt was induced by fraud, mistake or duress to intrust the possession or custody of the receipt to such person, if the person to whom the receipt was negotiated, or a person to whom the re,ceipt was subsequently negotiated, paid value therefor without notice of the breach of duty, or fraud, mistake or duress. 28.

Where a person having sold, mortgaged or pledged goods that are in a warehouse and for which a negotiable receipt has been issued, or having sold, mortgaged, or pledged a negotiable receipt representing goods, continues in possession of the negotiable receipt, the subsequent negotia tion thereof by that person under any sale, or other dis position thereof to any person receiving the same in good faith, for valuable consideration and without notice of the previous sale, mortgage or pledge, shall have the same effect as if a previous purchaser of the goods or receipt had expressly authorized the subsequent negotiation. 2-9.

Where a negotiable receipt has been issued for goods, no seller's lien or right of stoppage in transitu shall defeat the rights of a purchaser for value in good faith to whom the receipt has been negotiated, whether the negotiation be prior or subsequent to the notification to the warehouseman who issued the receipt to the seller's claim to a lien or right of stoppage in transitu and the warehouseman shall not deliver the goods to an unpaid seller unless the receipt is first surrendered for cancellation. 30.

Nothing herein contained shall be deemed to include or apply to the manager or operator of a grain elevator as "Manager" and "Operator" are defined by the Canada Grain Act or any railway or express company within the jurisdic tion of the Parliament of Canada. 31. The provisions of this Act do not apply to receipts made and delivered prior to the first day of April, 1949. 32. This Act shall be so interpreted and construed as to effect its general purpose of making uniform the law of those provinces whi'ch enact it. 33. This Act shall come into force on the first day of April, 1949.

No. 44 FIRST SESSION ELEVENTH LEGISLATURE 13 GEORGE VI 1949 BILL

An Act to Make Uniform the Law Respecting Warehouse Receipts. Recei ved and read the First time ....................... .. Second time .. Third time ... HON. MR. MAYNARD. Title: 1949 (11th, 1st) Bill 44,

An Act to Make Uniform the Law Respecting Warehouse Receipts

Document details

Collection	Alberta — Bills
Citation	L11 S1 7166
Type	bill
Volume / chapter	L11 S1 7166
Language	en
Format	json
Source	PROVINCIAL
Identifier	4b7eacad086e8ab28b1ae9963272dafd7804fd19

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