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.

(Dec. 30, 1963, 77 Stat. 721, Pub. L. 88-243, § 1; Apr. 27, 2013, D.C. Law 19-299, § 9, 60 DCR 2634.)

1981 Ed., § 28:7-208.

1973 Ed., § 28:7-208.

Prior Uniform Statutory Provision: Section 13, Uniform Warehouse Receipts Act.

Changes: Generally revised and simplified; explicit treatment of the situation where a blank in an executed document is filled without authority.

Purposes of Changes: 1. The execution of warehouse receipts in blank is a dangerous practice. As between the issuer and an innocent purchaser the risks should clearly fall on the former.

2. An unauthorized alteration whether made with or without fraudulent intent does not relieve the issuer of his liability on the warehouse receipt as originally executed. The unauthorized alteration itself is of course ineffective against the warehouseman.

Definitional Cross References: “Issuer”. Section 7-102.

“Notice”. Section 1-201.

“Purchaser”. Section 1-201.

“Value”. Section 1-201.

“Warehouse receipt”. Section 1-201.

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.