Know About Bailment  Mike Irvin

November '08

One common form of commercial bailment that is important to the agriculture community is storage bailments, such as warehouses.  Examples include: elevators for the storage of grain and cotton gins.  Documents used in this type of exchange are usually warehouse receipts, scale tickets or weight slips.  

If farmers place their crops in an elevator for storage, the elevator may commingle the crops.  Farmers then own the crops in common.  Each farmer owns a pro rata share evidenced by his/her documents of title.  In Kansas, the owner of grain held in storage has a prior right to such grain against any other person, subject to the payment of the warehouse fees, until the grain is either removed from storage by the owner or sold.

No matter how a bailment arises, the bailee (warehouses) has two fundamental obligations, which are both a duty of care and duty to re-deliver the bailment.  The bailee is expected to take (as a minimum) reasonable precautions to safeguard the property, although this standard sometimes varies depending upon who benefits from the bailment.   

In Kansas, the warehouseman is liable for damages for loss of the goods caused by his/her failure to exercise such care in regard to them as a reasonably careful man would exercise under like circumstances. 

For more information, please contact Mike Irvin, Director of the KFB Legal Foundation at (785) 587-6621.

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