2005 California Commercial Code Sections 7201-7210 CHAPTER 2. WAREHOUSE RECEIPTS: SPECIAL PROVISIONS

7201.  (1) A warehouse receipt may be issued by any warehouseman.
   (2) Where 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 has like effect
as a warehouse receipt even though issued by a person who is the
owner of the goods and is not a warehouseman.
7202.  (1) A warehouse receipt need not be in any particular form.
   (2) Unless a warehouse receipt embodies within its written or
printed terms each of the following, the warehouseman is liable for
damages caused by the omission to a person injured, thereby:
   (a) The location of the warehouse where the goods are stored;
   (b) The date of issue of the receipt;
   (c) The consecutive number of the receipt;
   (d) A statement whether the goods received will be delivered to
the bearer, to a specified person, or to a specified person or his
order;
   (e) The rate of storage and handling charges, except that where
goods are stored under a field warehousing arrangement a statement of
that fact is sufficient on a nonnegotiable receipt and except that
where goods are stored in a public utility warehouse having a lawful
tariff on file with the Public Utilities Commission, a statement that
the rate of storage and handling charges are as provided in such
tariff is sufficient;
   (f) A description of the goods or of the packages containing them;
   (g) The signature of the warehouseman, which may be made by his
authorized agent;
   (h) If the receipt is issued for goods of which the warehouseman
is owner, either solely or jointly or in common with others, the fact
of such ownership; and
   (i) A statement of the amount of advances made and of liabilities
incurred for which the warehouseman claims a lien or security
interest (Section 7209).  If the precise amount of such advances made
or of such liabilities incurred is, at the time of the issue of the
receipt, unknown to the warehouseman or to his agent who issues it, a
statement of the fact that advances have been made or liabilities
incurred and the purpose thereof is sufficient.
   (3) A warehouseman may insert in his receipt any other terms which
are not contrary to the provisions of this code and do not impair
his obligation of delivery (Section 7403) or his duty of care
(Section 7204).  Any contrary provisions shall be ineffective.
7203.  A party to or purchaser for value in good faith of a document
of title other than a bill of lading relying in either case upon the
description therein of the goods may recover from the issuer damages
caused by the nonreceipt or misdescription of the goods, except to
the extent that the document conspicuously indicates that the issuer
does not know whether any part or all of the goods in fact were
received or conform to the description, as where 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 the like, if such indication
be true, or the party or purchaser otherwise has notice.
7204.  (1) A warehouseman is liable for damages for loss of or
injury to the goods caused by his failure to exercise such care in
regard to them as a reasonably careful man would exercise under like
circumstances but unless otherwise agreed he is not liable for
damages which could not have been avoided by the exercise of such
care.
   (2) 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, and setting forth a specific liability per article or item,
or value per unit of weight, beyond which the warehouseman shall not
be liable; provided, however, that such liability may on written
request of the bailor at the time of signing such storage agreement
or within a reasonable time after receipt of the warehouse receipt be
increased on part or all of the goods thereunder, in which event
increased rates may be charged based on such increased valuation, but
that no such increase shall be permitted contrary to a lawful
limitation of liability contained in the warehouseman's tariff, if
any, nor permit recovery in excess of the actual value of the goods.
No such limitation is effective with respect to the warehouseman's
liability for conversion to his own use.
   (3) Reasonable provisions as to the time and manner of presenting
claims and instituting actions based on the bailment may be included
in the warehouse receipt or tariff.
   (4) This section does not impair or repeal Section 1630 of the
Civil Code nor any of the provisions of the Public Utilities Code or
the Agricultural Code or any lawful regulations issued thereunder.
7205.  A buyer in the ordinary course of business of fungible goods
sold and delivered by a warehouseman who is also in the business of
buying and selling such goods takes free of any claim under a
warehouse receipt even though it has been duly negotiated.
7206.  (1) A warehouseman may on notifying the person on whose
account the goods are held and any other person known to claim an
interest in the goods 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, or, if no period is fixed, within a
stated period not less than 30 days after the notification.  If the
goods are not removed before the date specified in the notification,
the warehouseman may sell them in accordance with the provisions of
the section on enforcement of a warehouseman's lien (Section 7210).
   (2) If a warehouseman in good faith believes that the goods are
about to deteriorate or decline in value to less than the amount of
his lien within the time prescribed in subdivision (1) for
notification, advertisement and sale, the warehouseman may specify in
the notification any reasonable shorter time for removal of the
goods and in case the goods are not removed, may sell them at public
sale held not less than one week after a single advertisement or
posting.
   (3) If as a result of a quality or condition of the goods of which
the warehouseman had no notice at the time of deposit the goods are
a hazard to other property or to the warehouse or to persons, the
warehouseman may sell the goods at public or private sale without
advertisement on reasonable notification to all persons known to
claim an interest in the goods.  If the warehouseman after a
reasonable effort is unable to sell the goods he may dispose of them
in any lawful manner and shall incur no liability by reason of such
disposition.
   (4) The warehouseman must deliver the goods to any person entitled
to them under this division upon due demand made at any time prior
to sale or other disposition under this section and payment of any
amount necessary to satisfy the warehouseman's lien and reasonable
expenses incurred under this section.
   (5) The warehouseman may satisfy his lien from the proceeds of any
sale or disposition under this section but must hold the balance for
delivery on the demand of any person to whom he would have been
bound to deliver the goods.
7207.  (1) Unless the warehouse receipt otherwise provides, a
warehouseman must keep separate the goods covered by each receipt so
as to permit at all times identification and delivery of those goods
except that different lots of fungible goods may be commingled.
   (2) Fungible goods so commingled are owned in common by the
persons entitled thereto and the warehouseman is severally liable to
each owner for that owner's share.  Where because of overissue a mass
of fungible goods is insufficient to meet all the receipts which the
warehouseman has issued against it, the persons entitled include all
holders to whom overissued receipts have been duly negotiated.
7208.  Where a blank in a negotiable warehouse receipt has been
filled in without authority, a purchaser for value and without notice
of the want of authority may treat the insertion as authorized.  Any
other unauthorized alteration leaves any receipt enforceable against
the issuer according to its original tenor.
7209.  (1) A warehouseman has a lien against the bailor on the goods
deposited or on the proceeds thereof in his possession for charges
for storage, processing incidental to storage, or transportation,
including demurrage and terminal charges, insurance, labor, or
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 like charges or expenses in relation to other
goods whenever deposited, the warehouseman also has a lien against
him for such charges and expenses whether or not the other goods have
been delivered by the warehouseman.  But against a person to whom a
negotiable warehouse receipt is duly negotiated a warehouseman's lien
is limited to charges specified on the receipt or if no charges are
so specified then to a reasonable charge for storage of the goods
covered by the receipt subsequent to the date of the receipt.
   (2) The warehouseman may also reserve a security interest against
the bailor for charges other than those specified in subdivision (1),
such as for money advanced and interest, but if a receipt is issued
for the goods such a security interest is not valid as against third
persons without notice unless the maximum amount thereof is
conspicuously specified (Section 1201) on the receipt.  Such a
security interest is governed by the division on secured transactions
(Division 9).
   (3) (a) A warehouseman's lien for charges and expenses under
subdivision (1) or a security interest under subdivision (2) is also
effective against any person who so entrusted the bailor with
possession of the goods that a pledge of them by him to a good faith
purchaser for value would have been valid but is not effective
against a person as to whom the document confers no right in the
goods covered by it under Section 7503.
   (b) A warehouseman's lien on household goods for charges and
expenses in relation to the goods under subdivision (1) is also
effective against all persons if the depositor was the legal
possessor of the goods at the time of deposit.  "Household goods"
means furniture, furnishings and personal effects used by the
depositor in a dwelling.
   (4) A warehouseman loses his lien on any goods which he
voluntarily delivers or which he unjustifiably refuses to deliver.
7210.  (1) Except as provided in subdivision (2), a warehouseman's
lien may be enforced by public or private sale of the goods in bloc
or in parcels, at any time or place and on any terms which are
commercially reasonable, after notifying all persons known to claim
an interest in the goods.  Such 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 different method
from that selected by the warehouseman is not of itself sufficient to
establish that the sale was not made in a commercially reasonable
manner.  If the warehouseman either sells the goods in the usual
manner in any recognized market therefor, or if he sells at the price
current in such market at the time of his sale, or if he has
otherwise sold in conformity with commercially reasonable practices
among dealers in the type of goods sold, he has sold in a
commercially reasonable manner.  A sale of more goods than apparently
necessary to be offered to insure satisfaction of the obligation is
not commercially reasonable except in cases covered by the preceding
sentence.
   (2) A warehouseman's lien on goods other than goods stored by a
merchant in the course of his business may be enforced only as
follows:
   (a) All persons known to claim an interest in the goods must be
notified.
   (b) The notification must be delivered in person or sent by
registered or certified letter to the last known address of any
person to be notified.
   (c) 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.
   (d) The sale must conform to the terms of the notification.
   (e) The sale must be held at the nearest suitable place to that
where the goods are held or stored.
   (f) 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 published
in the judicial district where the sale is to be held.  The
advertisement must include a description of the goods, the name of
the person on whose account they 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 published in the judicial district where the sale is to
be held, the advertisement must be posted at least 10 days before the
sale in not less than six conspicuous places in the neighborhood of
the proposed sale.
   (3) 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 under this section.  In that
event the goods must not be sold, but must be retained by the
warehouseman subject to the terms of the receipt and this division.
   (4) The warehouseman may buy at any public sale pursuant to this
section.
   (5) A purchaser in good faith of goods sold to enforce a
warehouseman's lien takes the goods free of any rights of persons
against whom the lien was valid, despite noncompliance by the
warehouseman with the requirements of this section.
   (6) The warehouseman may satisfy his lien from the proceeds of any
sale pursuant to this section but must hold the balance, if any, for
delivery on demand to any person to whom he would have been bound to
deliver the goods.
   (7) The rights provided by this section shall be in addition to
all other rights allowed by law to a creditor against his debtor.
   (8) Where a lien is on goods stored by a merchant in the course of
his business the lien may be enforced in accordance with either
subdivision (1) or (2).
   (9) The warehouseman 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.