(1) It shall be the duty of each farm warehouseman to whom a warehouse receipt or receipts have been issued to maintain the grade of the grain which he certified in his application for a warehouse receipt, as required by Section 75-43-7.
(2) If the farm warehouseman does not maintain the grade of the grain which he certified in the application, he shall be liable on his bond, or on the amount posted in lieu of the bond, to the holder of the warehouse receipt who has made demand for the redemption of the receipt for the amount of the damages sustained by the holder of the receipt. The holder of the receipt shall give notice to the commissioner, and payment shall be made, in accordance with the procedure set forth in Section 75-43-35.
(3) The right of the holder of the warehouse receipt to make a claim against the bond or amount posted in lieu of the bond for failure of the warehouseman to maintain the grade of the grain shall exist only while the grain is still in the warehouse or on the premises of the storage facility. Once the holder of the receipt removes the grain from the premises of the storage facility, he relinquishes all right to make a claim against the bond or amount posted in lieu of the bond for damages sustained because of a decrease in the grade of the grain.
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