Both weight and lot notes (no substantial difference existing between the two) are documents referring to a parcel or lot of goods under a warrant, by which the owner restricts his own rights towards a dock company in behalf of a buyer.
A weight or a lot note, therefore, issued by the company at the owner’s request, must bear his signature, and is delivered to the buyer, either by the owner himself or by a broker, through the former’s order.
The employment of such notes takes place whenever goods, lodged at a dock warehouse, are sold under condition of being paid for, partly at the sale and partly within a certain term; which is the usual condition of the public auction sales at the docks, and often of private sales also.
During the term granted for payment, viz., from the sale to the prompt the buyer is entitled to obtain delivery of the goods bought by paying the balance of the purchase money still due.
He has, therefore, a claim on the .roods, although they are not in his possession, nor can the seller dispose of them or remove them from the dock, although they are lodged under his name and therefore, still his property. Such reciprocal rights and claims are embodied in two documents, viz., a weight or a lot note and a sale warrant.
The note contains full particulars of the goods as described in the warrant it refers to, with the addition of a statement under the owner’s hand whereby he engages to hold, up to the prompt day, at the buyer’s disposal, the warrant issued by the company for the parcel or lot of goods therein described, provided the buyer complies with the conditions of the sale.
The note bears also a notice by the company, by which the holder’s right to obtain delivery of the goods is declared, stating, however, that no such delivery will take place without the production of both the note and the corresponding warrant.
On issuing the weight note, the original warrant in the owner’s possession is, on the other hand, exchanged by the company for a sale warrant, also bearing a notice to the effect that, a weight or lot note having been issued, no delivery will be made under such warrant before the expiration of the prompt without note production the corresponding weight or lot note.
Thus the two documents are binding upon each other. The buyer in possession of the weight note has virtually acquired the property of the goods, since he is entitled to have them delivered on paying for them, and may, therefore, dispose of them by transferring his rights with the note to a new buyer; while the owner keeps a hold on the goods sold till they have been paid for.
On or before the prompt day the holder of the note will, by completing payment of the purchase money, obtain delivery of the warrant duly transferred, and is then fully empowered to remove the goods from the warehouse, or to obtain a fresh warrant under his name.
In case of no payment being effected before the expiration of the prompt, the note ceases to be valid, and the owner resumes all his rights under the warrant, the deposit money paid by the buyer being forfeited.
Transfer of Dock Documents.-
The transfer of any dock document, viz., warrants, delivery orders, weight or lot notes, etc., is likewise effected by means of endorsement, that is, by writing on the back the usual form:-Hold the within at the disposal of …. or any other to the same effect, followed by the owner’s signature.
The endorsement is either nominal, to bearer or blank, the latter form being the most customary in trade, to effect which the owner has but to write his name on the back of the document.
Although not strictly required, it is customary for the endorsee (the person to whom it is endorsed) to have the transfer regularly registered at the dock office.
Warrants as Securities.-
A merchant possessing a parcel of goods lodged in a dock warehouse, and wishing to have at his disposal the amount of money thereby represented, or any portion of it, without losing the property of his goods, will easily find a banker, a broker, or any other person, often the dock company itself, ready to advance him the required sum, against payment of the customary interest.
As a security for the loan, he will deliver to the lender, endorsed in blank, the warrant he has obtained on warehousing.
No reference as to the transaction effected is to be made in the endorsement; usually a simple letter of deposit is handed over by the lender to the borrower, describing the nature of the warrant deposited, the debt in security whereof the warrant is given and the terms of the loan, on maturity of which he will, by discharging his debt, get back the warrant and return thereby into possession of his goods.
Pending the said term, the owner would, however, be obliged to keep the mortgaged goods unsold, which may turn out very prejudicial to his interest. To avoid this it is customary to have a weight note issued, which remains in the owner’s hands, while the sale warrant is passed over to the lender.
Up to the prompt day the former may thus dispose of his goods, giving the buyer the corresponding weight note, which he may in his turn endorse to another party, and so on till the debt be discharged by the last holder against restitution of the warrant.
Should not the debt for money advanced on the security of a warrant be discharged within the term agreed on, the lender in possession of the warrant is fully empowered, of course, to dispose of the goods by public sale for the account and risk of his debtor.