Printable Format84-7-206. Termination of storage at warehouse's option. (a) A warehouse, by giving notice to the person on whose account the goods are held and any other person known to claim an interest in the goods, may require payment of any charges and removal of the goods from the warehouse at the termination of the period of storage fixed by the document of title or, if a period is not fixed, within a stated period not less than 30 days after the warehouse gives notice. If the goods are not removed before the date specified in the notice, the warehouse may sell them pursuant to K.S.A. 2025 Supp. 84-7-210, and amendments thereto.
(b) If a warehouse in good faith believes that goods are about to deteriorate or decline in value to less than the amount of its lien within the time provided in subsection (a) and K.S.A. 2025 Supp. 84-7-210, and amendments thereto, the warehouse may specify in the notice given under subsection (a) any reasonable shorter time for removal of the goods and, if the goods are not removed, may sell them at public sale held not less than one week after a single advertisement or posting.
(c) If, as a result of a quality or condition of the goods of which the warehouse did not have notice at the time of deposit, the goods are a hazard to other property, the warehouse facilities, or other persons, the warehouse may sell the goods at public or private sale without advertisement or posting on reasonable notification to all persons known to claim an interest in the goods. If the warehouse, after a reasonable effort, is unable to sell the goods, it may dispose of them in any lawful manner and does not incur liability by reason of that disposition.
(d) A warehouse shall deliver the goods to any person entitled to them under this article upon due demand made at any time before sale or other disposition under this section.
(e) A warehouse may satisfy its lien from the proceeds of any sale or disposition under this section but shall hold the balance for delivery on the demand of any person to which the warehouse would have been bound to deliver the goods.
History: L. 2007, ch. 90, § 12; July 1, 2008.
KANSAS COMMENT, 1996
Subsection (1) is new. It provides the warehouseman with a procedure by which he may terminate storage at any time in the absence of a fixed storage period. The Code, in effect, imposes a required storage period of 30 days after notification of intent to terminate the storage. The warehouseman may thereafter sell the goods in accordance with 84-7-210 on enforcing a warehouseman's lien. It has been held that where a warehouseman had already elected to foreclose his lien under 84-7-210, this section (84-7-206) was no longer available. Hellmann v. Smith-Mayflower, Smith's Moving & Storage Co., Inc., 47 Md. App. 335, 424 A.2d 378 (1980).
Subsections (2) and (3) distinguish between goods which the warehouseman knows are perishable or hazardous at the time he receives them and goods whose hazards are concealed at the time of storage and are discovered later. Subsection (2) expands somewhat the scope of former K.S.A. 82-134 by covering not only goods whose deterioration was caused by the intrinsic nature or quality of the goods, but also goods which will suffer a decline in value as a result of market conditions. However, this subsection is simultaneously more restrictive than the former statute because this subsection permits a public sale but requires at least one week of advertising or posting, while the former statute permitted a sale at public or private sale without advertising.
Subsection (3) authorizes more rapid disposal procedures when the warehouseman had no notice at the time of storage of the hazards involved. Former K.S.A. 82-134 expressly listed the hazards covered: "odor, leakage, inflammability, or explosive nature." This subsection, on the contrary, applies whenever the "goods are a hazard," thus giving the warehouseman the power to defend himself against chemicals, radiation, harmful bacteria, insects, rodents, or other dangers not foreseen by the drafters. Compare K.S.A. 34-273, which authorizes the sale of grain which is "out of condition."
Under subsection (4), the right of redemption is granted to any person entitled to the goods under Article 7. A person may be entitled to the goods by being the holder or other person entitled under the document, see 84-7-403, or by having a prior claim, see 84-7-503, or by other means. Under this subsection, the right of redemption is available at any time "prior to sale or other disposition." Under former K.S.A. 82-134, the right of redemption was cut off at the expiration of the removal time specified in the warehouseman's notice.
Subsection (5) provides for the disposition of the proceeds received from the sale of goods under this section. The warehouseman is entitled to retain enough to satisfy his lien, but is not entitled to the surplus.
Revisor's Note:
Former section 84-7-206 repealed by L. 2007, ch. 90, § 78 and the number reassigned to the current text.
CASE ANNOTATIONS
1. By choosing to pursue a warehouseman's lien under K.S.A. 84-7-210, warehouseman is precluded from seeking a second remedy under K.S.A. 84-7-206. Connery v. Jones Storage & Moving, Inc., 27 Kan. App. 2d 55, 997 P.2d 745 (2000).