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84-7-207. Goods must be kept separate; fungible goods. (a) Unless the warehouse receipt provides otherwise, a warehouse shall keep separate the goods covered by each receipt so as to permit at all times identification and delivery of those goods. However, different lots of fungible goods may be commingled.

(b) If different lots of fungible goods are commingled, the goods are owned in common by the persons entitled thereto and the warehouse is severally liable to each owner for that owner's share. If, because of overissue, a mass of fungible goods is insufficient to meet all the receipts the warehouse has issued against it, the persons entitled include all holders to which overissued receipts have been duly negotiated.

History: L. 2007, ch. 90, § 13; July 1, 2008.

KANSAS COMMENT, 1996

Subsection (1) expands prior law by authorizing commingling even though there is no agreement or custom. See former K.S.A. 82-123. The scope of this provision is also expanded by the broad definition of "fungible" in 84-1-201(17). Compare the definition of "fungible grain" in K.S.A. 34-223.

Subsection (2) permits all persons to whom over-issued warehouse receipts have been duly negotiated, including the bona fide purchaser of a negotiable receipt which did not in fact represent a deposit of goods, to share in the mass of fungible goods and in the claims against the warehouseman. Former law, K.S.A. 82-123 and 82-124, gave these rights only to depositors of the commingled goods. A bona fide purchaser for value of a blank receipt may enforce it against the warehouseman under the terms of 84-7-208. In In re Bucyrus Grain Co., Inc., 78 B.R. 296 (D. Kan. 1987), the court held that the holders of the over-issued receipts are the owners of the grain in storage as tenants in common. Because there is not enough grain to cover all their claims, the warehouseman, and its trustee, has no interest in the grain or its proceeds.

Revisor's Note:

Former section 84-7-207 repealed by L. 2007, ch. 90, § 78 and the number reassigned to the current text.

Law Review and Bar Journal References:

"Agricultural Credit and The Uniform Commercial Code: A Need for Change?" Keith G. Meyer, 34 K.L.R. 469, 471, 472, 473 (1986).

CASE ANNOTATIONS

1. Owners of commingled grain on deposit in warehouse are tenants in common of entire mass. In re Bucyrus Grain Co., Inc., 78 B.R. 296, 298 (1987).


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