South Carolina Code of Regulations
Chapter 5 - DEPARTMENT OF AGRICULTURE
Article 13 - WAREHOUSE SYSTEM
Section 5-491 - Inspectors, Warehousemen

A. An adequate number of inspectors shall be employed for the proper inspection of all warehouses and the commodities stored therein at least once every three months.

B. Each inspector shall make a thorough study of the statutes, rules and regulations relating to the administration of State Warehouses. He shall also acquaint himself with the duties and responsibilities imposed on him by law.

C. The inspector shall promptly render a detailed written report of inspections, inventories and physical condition of same to the Director of the Warehouse Division who shall analyze it and report any discrepancies to the Commissioner. The Director shall keep a record of the inspection dates of each warehouse which shall be available to the Commissioner at any time.

D. When an inspector has reason to believe that the moisture content of grain on storage is too high for safe keeping, he shall take a sample of same and submit it to the Department of Agriculture laboratory for analysis and opinion. If in the opinion of the said laboratory, the moisture of said grain is too high for safe keeping, the inspector shall advise the manager of said warehouse to recall the receipts issued therefor and send them to the office of the Commissioner for cancellation.

E. When an inspector has reason to believe that grain classified as seed does not come up to the standard required for such seed, he shall take a sample of same and submit it to the Department of Agriculture laboratory for analysis and opinion. If, in the opinion of the said laboratory, the sample is below the standard for seed, the inspector shall advise the manager of said warehouse to recall the receipts issued therefor and send them to the office of the Commissioner for cancellation.

F. When an application for license to operate a warehouse in the State System is received, it shall be referred to the appropriate inspector who shall, after investigation, make a positive Yes or No recommendation to the Commissioner in writing. He shall constantly be alert to infractions by warehousemen and immediately report in writing any violations to the Warehouse Division.

G. No warehouseman shall be licensed until he shall have given bond as prescribed by Section 39-22-20.

H. No warehouseman shall receive for storage in any warehouse any commodity upon which any mortgage or lien exists unless the owner and holder of said mortgage or lien shall agree to the same in writing, or shall release the same from the effect of lien or mortgage for the purpose of storage; in such case the receipt for the commodity so stored shall be transferred in writing thereon to the owner and holder of the lien or mortgage by the owner of the commodity in the presence of the warehouseman who shall sign such transfer as a witness before the delivery of said receipt.

I. It shall be the duty of every warehouseman licensed by the Commissioner to properly account for every commodity stored in his warehouse so that the same can be released to the lawful owner upon surrender of the warehouse receipt covering the commodity. He shall see to it that same is properly weighed and graded. He shall fill out all the necessary receipts and enter same upon the books furnished him for this purpose. He shall forward a copy of same to the Commissioner by depositing same in his post office on the day the transaction is made. He shall furnish such other certificates and proofs as to weighing and grading as the Commissioner shall require.

J. Each warehouseman must file a financial statement annually with the Commissioner. The statement must be submitted within 90 days of the company's fiscal year end. The statement must be an audited or reviewed level statement prepared by an independent accounting firm in accordance with standards established by the American Institute of Certified Public Accountants and shall include, but not be limited to, a balance sheet, a statement of income (profit or loss), a statement of retained earnings and a statement of changes in financial position. A minimum allowable net worth of twenty-five thousand dollars shall be required of each warehouseman. The allowable net worth shall not be less than twenty-five cents per bushel of capacity for grain warehouses and twelve dollars and fifty cents per bale of capacity for cotton warehouses. A deficiency in net worth may be supplied by in increase of the bond or equivalent security.

K. In case of fire or other hazard resulting in damage to the stored commodities, the warehouseman must immediately notify the Department.

L. If authorized by agreement or custom, a warehouseman may mingle fungible commodities of the same kind and grade. In such case the various depositors of the mingled commodities shall own the entire mass in common and each depositor shall be entitled to such portion thereof as the amount deposited by him bears the whole. The warehouseman shall be severally liable to each depositor for the care and delivery of his share of such mass to the same extent and under the same circumstances as if the commodities had been kept separate.

M. Commodities must be stored in such manner as will permit rapid and accurate count. Commodities in bags shall be clearly identified and of equal weight. Commodities in bulk shall be stored in bins of convenient size for measuring and calculation of quantity. No commodity shall be left lying in or around any warehouse in a promiscuous and careless manner.

N. No person shall be allowed to loiter around any warehouse and as far as possible the manager shall prevent matches or firelighting devices from being carried on the premises; and no fireworks of any kind shall be allowed about the warehouse, nor shall any intoxicated person be permitted on the grounds.

O. All bills presented by the Commissioner shall be paid monthly. The bond of the warehouseman and a lien against the goods on storage shall be responsible for the charges dating from the issuance of the receipt.

P. No warehouseman shall make partial delivery of commodities listed on a warehouse receipt. If the depositor requests partial delivery, the warehouse receipt must be surrendered and cancelled and a new receipt issued for the balance.

Q. All licensed warehousemen storing cotton shall adopt the United States Government Standard of grades and staple to govern the grade and staple entered on each receipt and he shall be responsible for same; provided the grade and staple may be omitted from the receipt at the request of the depositor.

R. It shall be the duty of the warehouseman to look carefully after the physical condition of the house in which commodities evidenced by state receipts are stored so that none of the commodities will become damaged (by leaky roofs, by overflow of water or by excessive moisture, etc.). All warehousemen will be held responsible for the condition, weight and grade of the commodity while in their charge and for delivery of same upon presentation of receipts. Provided, the weights shall not be guaranteed against fluctuations arising from climatic conditions and the grades are subject to such changes as are affected by the nature of such product during the lapse of time.

S. No warehouseman shall allow a warehouse to remain open or doors unlocked except when receiving or delivering commodities from the warehouse and no person or persons shall have access to a warehouse except as authorized by the warehouseman.

T. It shall be the duty of every warehouseman to insure and keep insured against loss or damage all commodities in his custody, whether receipted or not, in accordance with Section 39-22-120. If the insurance coverage is terminated, the Department shall obtain the necessary coverage to protect the depositors until such time as the commodities can be relocated to an approved facility. The Department shall proceed against the warehouseman for payment of the insurance premium and cost of transportation and any other costs involved in relocating the commodities.