BUSINESS & COMMERCE CODE
CHAPTER 7. WAREHOUSE RECEIPTS, BILLS OF LADING AND OTHER DOCUMENTS
OF TITLE
SUBCHAPTER A. GENERAL
§ 7.101. SHORT TITLE. This chapter may be cited as
Uniform Commercial Code--Documents of Title.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.102. DEFINITIONS AND INDEX OF DEFINITIONS. (a) In
this chapter, unless the context otherwise requires:
(1) "Bailee" means the person who by a warehouse
receipt, bill of lading or other document of title acknowledges
possession of goods and contracts to deliver them.
(2) "Consignee" means the person named in a bill to
whom or to whose order the bill promises delivery.
(3) "Consignor" means the person named in a bill as the
person from whom the goods have been received for shipment.
(4) "Delivery order" means a written order to deliver
goods directed to a warehouseman, carrier or other person who in the
ordinary course of business issues warehouse receipts or bills of
lading.
(5) "Document" means document of title as defined in
the general definitions in Chapter 1 (Section 1.201).
(6) "Goods" means all things which are treated as
movable for the purposes of a contract of storage or
transportation.
(7) "Issuer" means a bailee who issues a document
except that in relation to an unaccepted delivery order it means the
person who orders the possessor of goods to deliver. Issuer
includes any person for whom an agent or employee purports to act in
issuing a document if the agent or employee has real or apparent
authority to issue documents, notwithstanding that the issuer
received no goods or that the goods were misdescribed or that in any
other respect the agent or employee violated his instructions.
(8) "Warehouseman" is a person engaged in the business
of storing goods for hire.
(b) Other definitions applying to this chapter or to
specified subchapters thereof, and the sections in which they
appear are:
"Duly negotiate". Section 7.501.
"Person entitled under the document". Section 7.403(d).
(c) Definitions in other chapters applying to this chapter
and the sections in which they appear are:
"Contract for sale". Section 2.106.
"Overseas". Section 2.323.
"Receipt" of goods. Section 2.103.
(d) In addition Chapter 1 contains general definitions and
principles of construction and interpretation applicable
throughout this chapter.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.103. RELATION OF CHAPTER TO TREATY, STATUTE, TARIFF,
CLASSIFICATION OR REGULATION. To the extent that any treaty or
statute of the United States, regulatory statute of this state or
tariff, classification or regulation filed or issued pursuant
thereto is applicable, the provisions of this chapter are subject
thereto.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.104. NEGOTIABLE AND NON-NEGOTIABLE WAREHOUSE
RECEIPT, BILL OF LADING OR OTHER DOCUMENT OF TITLE. (a) A
warehouse receipt, bill of lading or other document of title is
negotiable
(1) if by its terms the goods are to be delivered to
bearer or to the order of a named person; or
(2) where recognized in overseas trade, if it runs to a
named person or assigns.
(b) Any other document is non-negotiable. A bill of lading
in which it is stated that the goods are consigned to a named person
is not made negotiable by a provision that the goods are to be
delivered only against a written order signed by the same or another
named person.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.105. CONSTRUCTION AGAINST NEGATIVE
IMPLICATION. The omission from either Subchapter B or Subchapter C
of this chapter of a provision corresponding to a provision made in
the other subchapter does not imply that a corresponding rule of law
is not applicable.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
SUBCHAPTER B. WAREHOUSE RECEIPTS: SPECIAL PROVISIONS
§ 7.201. WHO MAY ISSUE A WAREHOUSE RECEIPT; STORAGE
UNDER GOVERNMENT BOND. (a) A warehouse receipt may be issued by
any warehouseman.
(b) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.202. FORM OF WAREHOUSE RECEIPT; ESSENTIAL TERMS;
OPTIONAL TERMS. (a) A warehouse receipt need not be in any
particular form.
(b) 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:
(1) the location of the warehouse where the goods are
stored;
(2) the date of issue of the receipt;
(3) the consecutive number of the receipt;
(4) a statement whether the goods received will be
delivered to the bearer, to a specified person, or to a specified
person or his order;
(5) 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 non-negotiable receipt;
(6) a description of the goods or of the packages
containing them;
(7) the signature of the warehouseman, which may be
made by his authorized agent;
(8) 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
(9) a statement of the amount of advances made and of
liabilities incurred for which the warehouseman claims a lien or
security interest (Section 7.209). 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.
(c) A warehouseman may insert in his receipt any other terms
which are not contrary to the provisions of this title and do not
impair his obligation of delivery (Section 7.403) or his duty of
care (Section 7.204). Any contrary provisions shall be
ineffective.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.203. LIABILITY FOR NON-RECEIPT OR
MISDESCRIPTION. 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 non-receipt 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.204. DUTY OF CARE; CONTRACTUAL LIMITATION OF
WAREHOUSEMAN'S LIABILITY. (a) 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.
(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, 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. No such limitation is
effective with respect to the warehouseman's liability for
conversion to his own use.
(c) 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.
(d) This section does not impair or repeal Texas Revised
Civil Statutes of 1925, Articles 5545 and 5546.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.205. TITLE UNDER WAREHOUSE RECEIPT DEFEATED IN
CERTAIN CASES. 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.206. TERMINATION OF STORAGE AT WAREHOUSEMAN'S
OPTION. (a) 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 thirty 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 7.210).
(b) 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 Subsection (a) 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.
(c) 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.
(d) The warehouseman must deliver the goods to any person
entitled to them under this chapter upon due demand made at any time
prior to sale or other disposition under this section.
(e) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.207. GOODS MUST BE KEPT SEPARATE; FUNGIBLE
GOODS. (a) 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.
(b) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.208. ALTERED WAREHOUSE RECEIPTS. 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.209. LIEN OF WAREHOUSEMAN. (a)(1) A warehouseman
has a lien against the bailor on the goods covered by a warehouse
receipt or on the proceeds thereof in his possession for charges for
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.
(2) If the person on whose account the goods are held is
liable for like charges or expenses in relation to other goods
whenever deposited and it is stated in the receipt that a lien is
claimed for charges and expenses in relation to other goods, 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 in an amount or at a rate 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.
(b) The warehouseman may also reserve a security interest
against the bailor for a maximum amount specified on the receipt for
charges other than those specified in Subsection (a), such as for
money advanced and interest. Such a security interest is governed
by the chapter on Secured Transactions (Chapter 9).
(c) A warehouseman's lien for a security interest under
Subsection (b) is 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 7.503. However, the
warehouseman's specific lien for charges and expenses under
Subsection (a)(1) is effective against any security interest. If
the warehouseman learns of a perfected security interest owned by a
person as to whom the document confers no right in the goods covered
by it under Section 7.503 against the goods and fails thereafter to
give such secured party (Section 9.105) written notice of the
accrued and unpaid charges and expenses at the time when they have
accrued for between two and six months, then the warehouseman's
specific lien under Subsection (a)(1) is effective as against such
secured party only with respect to unpaid charges and expenses
which have accrued by the end of six months.
(d) A warehouseman loses his lien on any goods which he
voluntarily delivers or which he unjustifiably refuses to deliver.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
Amended by Acts 1971, 62nd Leg., p. 3048, ch. 1010, § 1, eff.
June 15, 1971.
§ 7.210. ENFORCEMENT OF WAREHOUSEMAN'S
LIEN. (a) Except as provided in Subsection (b), a warehouseman's
lien may be enforced by public or private sale of the goods in block
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.
(b) 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:
(1) All persons known to claim an interest in the goods
must be notified.
(2) 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.
(3) 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 ten
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.
(4) The sale must conform to the terms of the
notification.
(5) The sale must be held at the nearest suitable place
to that where the goods are held or stored.
(6) 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 they are being held, and the time and place of the sale. The
sale must take place at least fifteen 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
ten days before the sale in not less 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 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 chapter.
(d) The warehouseman may buy at any public sale pursuant to
this section.
(e) 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.
(f) 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.
(g) The rights provided by this section shall be in addition
to all other rights allowed by law to a creditor against his debtor.
(h) 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 Subsection (a) or (b).
(i) 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
SUBCHAPTER C. BILLS OF LADING: SPECIAL PROVISIONS
§ 7.301. LIABILITY FOR NON-RECEIPT OR MISDESCRIPTION;
"SAID TO CONTAIN"; "SHIPPER'S LOAD AND COUNT"; IMPROPER
HANDLING. (a) A consignee of a non-negotiable bill who has given
value in good faith or a holder to whom a negotiable bill has been
duly negotiated relying in either case upon the description therein
of the goods, or upon the date therein shown, may recover from the
issuer damages caused by the misdating of the bill or the
non-receipt or misdescription of the goods, except to the extent
that the document 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 or condition of contents of packages
unknown", "said to contain", "shipper's weight, load and count" or
the like, if such indication be true.
(b) When goods are loaded by an issuer who is a common
carrier, the issuer must count the packages of goods if package
freight and ascertain the kind and quantity if bulk freight. In
such cases "shipper's weight, load and count" or other words
indicating that the description was made by the shipper are
ineffective except as to freight concealed by packages.
(c) When bulk freight is loaded by a shipper who makes
available to the issuer adequate facilities for weighing such
freight, an issuer who is a common carrier must ascertain the kind
and quantity within a reasonable time after receiving the written
request of the shipper to do so. In such cases "shipper's weight"
or other words of like purport are ineffective.
(d) The issuer may by inserting in the bill the words
"shipper's weight, load and count" or other words of like purport
indicate that the goods were loaded by the shipper; and if such
statement be true the issuer shall not be liable for damages caused
by the improper loading. But their omission does not imply
liability for such damages.
(e) The shipper shall be deemed to have guaranteed to the
issuer the accuracy at the time of shipment of the description,
marks, labels, number, kind, quantity, condition and weight, as
furnished by him; and the shipper shall indemnify the issuer
against damage caused by inaccuracies in such particulars. The
right of the issuer to such indemnity shall in no way limit his
responsibility and liability under the contract of carriage to any
person other than the shipper.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.302. THROUGH BILLS OF LADING AND SIMILAR
DOCUMENTS. (a) The issuer of a through bill of lading or other
document embodying an undertaking to be performed in part by
persons acting as its agents or by connecting carriers is liable to
anyone entitled to recover on the document for any breach by such
other persons or by a connecting carrier of its obligation under the
document but to the extent that the bill covers an undertaking to be
performed overseas or in territory not contiguous to the
continental United States or an undertaking including matters other
than transportation this liability may be varied by agreement of
the parties.
(b) Where goods covered by a through bill of lading or other
document embodying an undertaking to be performed in part by
persons other than the issuer are received by any such person, he is
subject with respect to his own performance while the goods are in
his possession to the obligation of the issuer. His obligation is
discharged by delivery of the goods to another such person pursuant
to the document, and does not include liability for breach by any
other such persons or by the issuer.
(c) The issuer of such through bill of lading or other
document shall be entitled to recover from the connecting carrier
or such other person in possession of the goods when the breach of
the obligation under the document occurred, the amount it may be
required to pay to anyone entitled to recover on the document
therefor, as may be evidenced by any receipt, judgment, or
transcript thereof, and the amount of any expense reasonably
incurred by it in defending any action brought by anyone entitled to
recover on the document therefor.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.303. DIVERSION; RECONSIGNMENT; CHANGE OF
INSTRUCTIONS. (a) Unless the bill of lading otherwise provides,
the carrier may deliver the goods to a person or destination other
than that stated in the bill or may otherwise dispose of the goods
on instructions from
(1) the holder of a negotiable bill; or
(2) the consignor on a non-negotiable bill
notwithstanding contrary instructions from the consignee; or
(3) the consignee on a non-negotiable bill in the
absence of contrary instructions from the consignor, if the goods
have arrived at the billed destination or if the consignee is in
possession of the bill; or
(4) the consignee on a non-negotiable bill if he is
entitled as against the consignor to dispose of them.
(b) Unless such instructions are noted on a negotiable bill
of lading, a person to whom the bill is duly negotiated can hold the
bailee according to the original terms.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.304. BILLS OF LADING IN A SET. (a) Except where
customary in overseas transportation, a bill of lading must not be
issued in a set of parts. The issuer is liable for damages caused by
violation of this subsection.
(b) Where a bill of lading is lawfully drawn in a set of
parts, each of which is numbered and expressed to be valid only if
the goods have not been delivered against any other part, the whole
of the parts constitute one bill.
(c) Where a bill of lading is lawfully issued in a set of
parts and different parts are negotiated to different persons, the
title of the holder to whom the first due negotiation is made
prevails as to both the document and the goods even though any later
holder may have received the goods from the carrier in good faith
and discharged the carrier's obligation by surrender of his part.
(d) Any person who negotiates or transfers a single part of
a bill of lading drawn in a set is liable to holders of that part as
if it were the whole set.
(e) The bailee is obliged to deliver in accordance with
Subchapter D of this chapter against the first presented part of a
bill of lading lawfully drawn in a set. Such delivery discharges
the bailee's obligation on the whole bill.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.305. DESTINATION BILLS. (a) Instead of issuing a
bill of lading to the consignor at the place of shipment a carrier
may at the request of the consignor procure the bill to be issued at
destination or at any other place designated in the request.
(b) Upon request of anyone entitled as against the carrier
to control the goods while in transit and on surrender of any
outstanding bill of lading or other receipt covering such goods,
the issuer may procure a substitute bill to be issued at any place
designated in the request.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.306. ALTERED BILLS OF LADING. An unauthorized
alteration or filling in of a blank in a bill of lading leaves the
bill enforceable according to its original tenor.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.307. LIEN OF CARRIER. (a) A carrier has a lien on
the goods covered by a bill of lading for charges subsequent to the
date of its receipt of the goods for storage or transportation
(including demurrage and terminal charges) and for expenses
necessary for preservation of the goods incident to their
transportation or reasonably incurred in their sale pursuant to
law. But against a purchaser for value of a negotiable bill of
lading a carrier's lien is limited to charges stated in the bill or
the applicable tariffs, or if no charges are stated then to a
reasonable charge.
(b) A lien for charges and expenses under Subsection (a) on
goods which the carrier was required by law to receive for
transportation is effective against the consignor or any person
entitled to the goods unless the carrier had notice that the
consignor lacked authority to subject the goods to such charges and
expenses. Any other lien under Subsection (a) is effective against
the consignor and any person who permitted the bailor to have
control or possession of the goods unless the carrier had notice
that the bailor lacked such authority.
(c) A carrier loses his lien on any goods which he
voluntarily delivers or which he unjustifiably refuses to deliver.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.308. ENFORCEMENT OF CARRIER'S LIEN. (a) A
carrier's lien may be enforced by public or private sale of the
goods, in block 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 carrier is not of
itself sufficient to establish that the sale was not made in a
commercially reasonable manner. If the carrier 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 ensure satisfaction of the
obligation is not commercially reasonable except in cases covered
by the preceding sentence.
(b) 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 carrier subject to the terms of the bill and this
chapter.
(c) The carrier may buy at any public sale pursuant to this
section.
(d) A purchaser in good faith of goods sold to enforce a
carrier's lien takes the goods free of any rights of persons against
whom the lien was valid, despite noncompliance by the carrier with
the requirements of this section.
(e) The carrier 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.
(f) The rights provided by this section shall be in addition
to all other rights allowed by law to a creditor against his debtor.
(g) A carrier's lien may be enforced in accordance with
either Subsection (a) or the procedure set forth in Subsection (b)
of Section 7.210.
(h) The carrier 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.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
Amended by Acts 1983, 68th Leg., p. 1532, ch. 290, § 5, eff. Aug.
29, 1983.
§ 7.309. DUTY OF CARE; CONTRACTUAL LIMITATION OF
CARRIER'S LIABILITY. (a) A carrier who issues a bill of lading
whether negotiable or non-negotiable must exercise the degree of
care in relation to the goods which a reasonably careful man would
exercise under like circumstances. This subsection does not repeal
or change any law or rule of law which imposes liability upon a
common carrier for damages not caused by its negligence.
(b) Damages may be limited by a provision that the carrier's
liability shall not exceed a value stated in the document if the
carrier's rates are dependent upon value and the consignor by the
carrier's tariff is afforded an opportunity to declare a higher
value or a value as lawfully provided in the tariff, or where no
tariff is filed he is otherwise advised of such opportunity; but no
such limitation is effective with respect to the carrier's
liability for conversion to its own use.
(c) Reasonable provisions as to the time and manner of
presenting claims and instituting actions based on the shipment may
be included in a bill of lading or tariff.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
SUBCHAPTER D. WAREHOUSE RECEIPTS AND BILLS OF LADING: GENERAL
OBLIGATIONS
§ 7.401. IRREGULARITIES IN ISSUE OF RECEIPT OR BILL OR
CONDUCT OF ISSUER. The obligations imposed by this chapter on an
issuer apply to a document of title regardless of the fact that
(1) the document may not comply with the requirements
of this chapter or of any other law or regulation regarding its
issue, form or content; or
(2) the issuer may have violated laws regulating the
conduct of his business; or
(3) the goods covered by the document were owned by the
bailee at the time the document was issued; or
(4) the person issuing the document does not come
within the definition of warehouseman if it purports to be a
warehouse receipt.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.402. DUPLICATE RECEIPT OR BILL; OVERISSUE. Neither
a duplicate nor any other document of title purporting to cover
goods already represented by an outstanding document of the same
issuer confers any right in the goods, except as provided in the
case of bills in a set, overissue of documents for fungible goods
substitutes for lost, stolen or destroyed documents. But the
issuer is liable for damages caused by his overissue or failure to
identify a duplicate document as such by conspicuous notation on
its face.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.403. OBLIGATION OF WAREHOUSEMAN OR CARRIER TO
DELIVER; EXCUSE. (a) The bailee must deliver the goods to a
person entitled under the document who complies with Subsections
(b) and (c), unless and to the extent that the bailee establishes
any of the following:
(1) delivery of the goods to a person whose receipt was
rightful as against the claimant;
(2) damage to or delay, loss or destruction of the
goods for which the bailee is not liable, but the burden of
establishing negligence in case of damage or destruction by fire is
on the person entitled under the document;
(3) previous sale or other disposition of the goods in
lawful enforcement of a lien or on warehouseman's lawful
termination of storage;
(4) the exercise by a seller of his right to stop
delivery pursuant to the provisions of the chapter on Sales
(Section 2.705);
(5) a diversion, reconsignment or other disposition
pursuant to the provisions of this chapter (Section 7.303) or
tariff regulating such right;
(6) release, satisfaction or any other fact affording
a personal defense against the claimant;
(7) any other lawful excuse.
(b) A person claiming goods covered by a document of title
must satisfy the bailee's lien where the bailee so requests or where
the bailee is prohibited by law from delivering the goods until the
charges are paid.
(c) Unless the person claiming is one against whom the
document confers no right under Section 7.503(a), he must surrender
for cancellation or notation of partial deliveries any outstanding
negotiable document covering the goods, and the bailee must cancel
the document or conspicuously note the partial delivery thereon or
be liable to any person to whom the document is duly negotiated.
(d) "Person entitled under the document" means holder in the
case of a negotiable document, or the person to whom delivery is to
be made by the terms of or pursuant to written instructions under a
non-negotiable document.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.404. NO LIABILITY FOR GOOD FAITH DELIVERY PURSUANT
TO RECEIPT OR BILL. A bailee who in good faith including
observance of reasonable commercial standards has received goods
and delivered or otherwise disposed of them according to the terms
of the document of title or pursuant to this chapter is not liable
therefor. This rule applies even though the person from whom he
received the goods had no authority to procure the document or to
dispose of the goods and even though the person to whom he delivered
the goods had no authority to receive them.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
SUBCHAPTER E. WAREHOUSE RECEIPTS AND BILLS OF LADING: NEGOTIATION
AND TRANSFER
§ 7.501. FORM OF NEGOTIATION AND REQUIREMENTS OF "DUE
NEGOTIATION". (a) A negotiable document of title running to the
order of a named person is negotiated by his indorsement and
delivery. After his indorsement in blank or to bearer any person
can negotiate it by delivery alone.
(b)(1) A negotiable document of title is also negotiated by
delivery alone when by its original terms it runs to bearer.
(2) When a document running to the order of a named person is
delivered to him the effect is the same as if the document had been
negotiated.
(c) Negotiation of a negotiable document of title after it
has been indorsed to a specified person requires indorsement by the
special indorsee as well as delivery.
(d) A negotiable document of title is "duly negotiated" when
it is negotiated in the manner stated in this section to a holder
who purchases it in good faith without notice of any defense against
or claim to it on the part of any person and for value, unless it is
established that the negotiation is not in the regular course of
business or financing or involves receiving the document in
settlement or payment of a money obligation.
(e) Indorsement of a non-negotiable document neither makes
it negotiable nor adds to the transferee's rights.
(f) The naming in a negotiable bill of a person to be
notified of the arrival of the goods does not limit the
negotiability of the bill nor constitute notice to a purchaser
thereof of any interest of such person in the goods.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.502. RIGHTS ACQUIRED BY DUE
NEGOTIATION. (a) Subject to the following section and to the
provisions of Section 7.205 on fungible goods, a holder to whom a
negotiable document of title has been duly negotiated acquires
thereby:
(1) title to the document;
(2) title to the goods;
(3) all rights accruing under the law of agency or
estoppel, including rights to goods delivered to the bailee after
the document was issued; and
(4) the direct obligation of the issuer to hold or
deliver the goods according to the terms of the document free of any
defense or claim by him except those arising under the terms of the
document or under this chapter. In the case of a delivery order the
bailee's obligation accrues only upon acceptance and the obligation
acquired by the holder is that the issuer and any indorser will
procure the acceptance of the bailee.
(b) Subject to the following section, title and rights so
acquired are not defeated by any stoppage of the goods represented
by the document or by surrender of such goods by the bailee, and are
not impaired even though the negotiation or any prior negotiation
constituted a breach of duty or even though any person has been
deprived of possession of the document by misrepresentation, fraud,
accident, mistake, duress, loss, theft or conversion, or even
though a previous sale or other transfer of the goods or document
has been made to a third person.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.503. DOCUMENT OF TITLE TO GOODS DEFEATED IN CERTAIN
CASES. (a) A document of title confers no right in goods against
a person who before issuance of the document had a legal interest or
a perfected security interest in them and who neither
(1) delivered or entrusted them or any document of
title covering them to the bailor or his nominee with actual or
apparent authority to ship, store or sell or with power to obtain
delivery under this chapter (Section 7.403) or with power of
disposition under this title (Sections 2.403 and 9.320 ) or other
statute or rule of law; nor
(2) acquiesced in the procurement by the bailor or his
nominee of any document of title.
(b) Title to goods based upon an unaccepted delivery order
is subject to the rights of anyone to whom a negotiable warehouse
receipt or bill of lading covering the goods has been duly
negotiated. Such a title may be defeated under the next section to
the same extent as the rights of the issuer or a transferee from the
issuer.
(c) Title to goods based upon a bill of lading issued to a
freight forwarder is subject to the rights of anyone to whom a bill
issued by the freight forwarder is duly negotiated; but delivery by
the carrier in accordance with Subchapter D of this chapter
pursuant to its own bill of lading discharges the carrier's
obligation to deliver.
Amended by Acts 1999, 76th Leg., ch. 414, § 2.25, eff. July 1,
2001.
§ 7.504. RIGHTS ACQUIRED IN THE ABSENCE OF DUE
NEGOTIATION; EFFECT OF DIVERSION; SELLER'S STOPPAGE OF
DELIVERY. (a) A transferee of a document, whether negotiable or
non-negotiable, to whom the document has been delivered but not
duly negotiated, acquires the title and rights which his transferor
had or had actual authority to convey.
(b) In the case of a non-negotiable document, until but not
after the bailee receives notification of the transfer, the rights
of the transferee may be defeated
(1) by those creditors of the transferor who could
treat the sale as void under Section 2.402; or
(2) by a buyer from the transferor in ordinary course
of business if the bailee has delivered the goods to the buyer or
received notification of his rights; or
(3) as against the bailee by good faith dealings of the
bailee with the transferor.
(c) A diversion or other change of shipping instructions by
the consignor in a non-negotiable bill of lading which causes the
bailee not to deliver to the consignee defeats the consignee's
title to the goods if they have been delivered to a buyer in
ordinary course of business and in any event defeats the
consignee's rights against the bailee.
(d) Delivery pursuant to a non-negotiable document may be
stopped by a seller under Section 2.705, and subject to the
requirement of due notification there provided. A bailee honoring
the seller's instructions is entitled to be indemnified by the
seller against any resulting loss or expense.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.505. INDORSER NOT A GUARANTOR FOR OTHER
PARTIES. The indorsement of a document of title issued by a bailee
does not make the indorser liable for any default by the bailee or
by previous indorsers.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.506. DELIVERY WITHOUT INDORSEMENT: RIGHT TO COMPEL
INDORSEMENT. The transferee of a negotiable document of title has
a specifically enforceable right to have his transferor supply any
necessary indorsement but the transfer becomes a negotiation only
as of the time the indorsement is supplied.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.507. WARRANTIES ON NEGOTIATION OR TRANSFER OF
RECEIPT OR BILL. Where a person negotiates or transfers a document
of title for value otherwise than as a mere intermediary under the
next following section, then unless otherwise agreed he warrants to
his immediate purchaser only in addition to any warranty made in
selling the goods
(1) that the document is genuine; and
(2) that he has no knowledge of any fact which would
impair its validity or worth; and
(3) that his negotiation or transfer is rightful and
fully effective with respect to the title to the document and the
goods it represents.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.508. WARRANTIES OF COLLECTING BANK AS TO
DOCUMENTS. A collecting bank or other intermediary known to be
entrusted with documents on behalf of another or with collection of
a draft or other claim against delivery of documents warrants by
such delivery of the documents only its own good faith and
authority. This rule applies even though the intermediary has
purchased or made advances against the claim or draft to be
collected.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.509. RECEIPT OR BILL: WHEN ADEQUATE COMPLIANCE WITH
COMMERCIAL CONTRACT. The question whether a document is adequate
to fulfill the obligations of a contract for sale or the conditions
of a credit is governed by the chapters on Sales (Chapter 2) and on
Letters of Credit (Chapter 5).
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
SUBCHAPTER F. WAREHOUSE RECEIPTS AND BILLS OF LADING:
MISCELLANEOUS PROVISIONS
§ 7.601. LOST AND MISSING DOCUMENTS. (a) If a document
has been lost, stolen or destroyed, a court may order delivery of
the goods or issuance of a substitute document and the bailee may
without liability to any person comply with such order. If the
document was negotiable the claimant must post security approved by
the court to indemnify any person who may suffer loss as a result of
a non-surrender of the document. If the document was not
negotiable, such security may be required at the discretion of the
court. The court may also in its discretion order payment of the
bailee's reasonable costs and counsel fees.
(b) A bailee who without court order delivers goods to a
person claiming under a missing negotiable document is liable to
any person injured thereby, and if the delivery is not in good faith
becomes liable for conversion. Delivery in good faith is not
conversion if made in accordance with a filed classification or
tariff or, where no classification or tariff is filed, if the
claimant posts security with the bailee in an amount at least double
the value of the goods at the time of posting to indemnify any
person injured by the delivery who files a notice of claim within
one year after the delivery.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.602. ATTACHMENT OF GOODS COVERED BY A NEGOTIABLE
DOCUMENT. Except where the document was originally issued upon
delivery of the goods by a person who had no power to dispose of
them, no lien attaches by virtue of any judicial process to goods in
the possession of a bailee for which a negotiable document of title
is outstanding unless the document be first surrendered to the
bailee or its negotiation enjoined, and the bailee shall not be
compelled to deliver the goods pursuant to process until the
document is surrendered to him or impounded by the court. One who
purchases the document for value without notice of the process or
injunction takes free of the lien imposed by judicial process.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
§ 7.603. CONFLICTING CLAIMS; INTERPLEADER. If more
than one person claims title or possession of the goods, the bailee
is excused from delivery until he has had a reasonable time to
ascertain the validity of the adverse claims or to bring an action
to compel all claimants to interplead and may compel such
interpleader, either in defending an action for non-delivery of the
goods, or by original action, whichever is appropriate.
Acts 1967, 60th Leg., p. 2343, ch. 785, § 1, eff. Sept. 1, 1967.
