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.
HISTORY: 1962 Code Section 10.7-208; 1966 (54) 2716; 2014 Act No. 213 (S.343), Section 2, eff October 1, 2014.
OFFICIAL COMMENT
Prior Uniform Statutory Provision: Former Section 7-208.
Changes: To accommodate electronic documents of title.
Purpose:
1. The execution of tangible warehouse receipts in blank is a dangerous practice. As between the issuer and an innocent purchaser the risks should clearly fall on the former. The purchaser must have purchased the tangible negotiable warehouse receipt in good faith and for value to be protected under the rule of the first sentence which is a limited exception to the general rule in the second sentence. Electronic document of title systems should have protection against unauthorized access and unauthorized changes. See 7-106. Thus the protection for good faith purchasers found in the first sentence is not necessary in the context of electronic documents.
2. Under the second sentence of this section, an unauthorized alteration whether made with or without fraudulent intent does not relieve the issuer of its liability on the warehouse receipt as originally executed. The unauthorized alteration itself is of course ineffective against the warehouse. The rule stated in the second sentence applies to both tangible and electronic warehouse receipts.
Definitional Cross References:
"Good faith". Section 1-201 [7-102].
"Issuer". Section 7-102.
"Notice". Section 1-202.
"Purchaser". Section 1-201.
"Value". Section 1-204.
"Warehouse receipt". Section 1-201.
Editor's Note
2014 Act No. 213, Section 51, provides as follows:
"SECTION 51. This act becomes effective on October 1, 2014. It applies to transactions entered into and events occurring after that date."
Structure South Carolina Code of Laws
Chapter 7 - Commercial Code - Warehouse Receipts, Bills Of Lading And Other Documents Of Title
Section 36-7-101. Short title.
Section 36-7-102. Definitions and index of definitions.
Section 36-7-103. Relation of chapter to treaty, statute, tariff, classification or regulation.
Section 36-7-105. Reissuance in alternative medium.
Section 36-7-106. Control of electronic document of title.
Section 36-7-201. Who may issue a warehouse receipt; storage under government bond.
Section 36-7-202. Form of warehouse receipt; essential terms; optional terms.
Section 36-7-203. Liability for nonreceipt or misdescription.
Section 36-7-204. Duty of care; contractual limitation of warehouse's liability.
Section 36-7-205. Title under warehouse receipt defeated in certain cases.
Section 36-7-206. Termination of storage at warehouse's option.
Section 36-7-207. Goods must be kept separate; fungible goods.
Section 36-7-208. Altered warehouse receipts.
Section 36-7-209. Lien of warehouse.
Section 36-7-210. Enforcement of warehouse's Lien.
Section 36-7-302. Through bills of lading and similar documents.
Section 36-7-303. Diversion; reconsignment; change of instructions.
Section 36-7-304. Tangible bills of lading in a set.
Section 36-7-305. Destination bills.
Section 36-7-306. Altered bills of lading.
Section 36-7-307. Lien of carrier.
Section 36-7-308. Enforcement of carrier's lien.
Section 36-7-309. Duty of care; contractual limitation of carrier's liability.
Section 36-7-401. Irregularities in issue of receipt or bill or conduct of issuer.
Section 36-7-402. Duplicate document of title; overissue.
Section 36-7-403. Obligation of bailee to deliver; excuse.
Section 36-7-404. No liability for good-faith delivery pursuant to document of title.
Section 36-7-501. Form of negotiation and requirements of "due negotiation".
Section 36-7-502. Rights acquired by due negotiation.
Section 36-7-503. Document of title to goods defeated in certain cases.
Section 36-7-505. Indorser not a guarantor for other parties.
Section 36-7-506. Delivery without indorsement; right to compel indorsement.
Section 36-7-507. Warranties on negotiation or delivery of document of title.
Section 36-7-508. Warranties of collecting bank as to documents of title.
Section 36-7-509. Adequate compliance with commercial contract.
Section 36-7-601. Lost, stolen, or destroyed documents of title.
Section 36-7-602. Judicial process against goods covered by negotiable document of title.