FIELD WAREHOUSING

field warehousing.An inventory-financing method by which a merchant pledges its inventory,

which is in the possession of a third person (a warehouser). • This is a method of financing an

inventory that cannot economically be delivered to the creditor or third party. The borrower

segregates part of the inventory and places it under the nominal control of a lender or third party,

so that the lender has a possessory interest. Cf. floor-plan financing under FINANCING;

PLEDGE. “Field warehousing is a way of bringing about the security relationship of a pledge. It is an

arrangement for allowing the pledgor a more convenient access to the pledged goods, while the

goods are actually in the custody and control of a third person on the pledgor’s premises.”

Business Factors, Inc. v. Taylor–Edwards Warehouse & Transfer Co., 585 P.2d 825, 828 (Wash. Ct.

App. 1978).

“Field warehousing is … an arrangement whereby a wholesaler, manufacturer, or merchant

finances his business through the pledge of goods remaining on his premises. The arrangement is

valid and effective where there is an actual delivery to the warehouseman by the bailor who has

hired the warehouseman and given him exclusive possession of the warehouse goods.” In re

Covington Grain Co., 638 F.2d 1362, 1365 (5th Cir. 1981).[Blacks Law 8th]