Commercial Law, 2011 Bar — Question 91

MULTIPLE CHOICE

002-38-0001 G, a grocery goods supplier, sold 100 sacks of rice to H who promised to pay once he has sold all the rice. H meantime delivered the goods to W, a warehouseman, who issued a warehouse receipt. Without the knowledge of G and W, H negotiated the receipt to P who acquired it in good faith and for value. P then claimed the goods from W, who released them. After the rice was loaded on a ship bound for Manila, G invokes his right to stop the goods in transit due to his unpaid lien. Who has a better right to the rice? A) P, since he has superior rights as a purchaser for value and in good faith. B) P, regardless of whether or not he is a purchaser for value and in good faith. C) G, since as an unpaid seller, he has the right of stoppage in transitu. D) W, since it appears that the warehouse charges have not been paid.

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