AB481-ASA1,31,1515
(b) Title to the goods.
AB481-ASA1,31,1716
(c) All rights accruing under the law of agency or estoppel, including rights to
17goods delivered to the bailee after the document was issued.
AB481-ASA1,31,2318
(d) The direct obligation of the issuer to hold or deliver the goods according to
19the terms of the document free of any defense or claim by the issuer except those
20arising under the terms of the document or under this chapter. In the case of a
21delivery order, the bailee's obligation accrues only upon the bailee's acceptance of the
22delivery order and the obligation acquired by the holder is that the issuer and any
23endorser will procure the acceptance of the bailee.
AB481-ASA1,32,2
24(2) Subject to s. 407.503, title and rights acquired by due negotiation are not
25defeated by any stoppage of the goods represented by the document of title or by
1surrender of the goods by the bailee and are not impaired even if any of the following
2apply:
AB481-ASA1,32,43
(a) The due negotiation or any prior due negotiation constituted a breach of
4duty.
AB481-ASA1,32,75
(b) Any person has been deprived of possession of a negotiable tangible
6document or control of a negotiable electronic document by misrepresentation, fraud,
7accident, mistake, duress, loss, theft, or conversion.
AB481-ASA1,32,98
(c) A previous sale or other transfer of the goods or document has been made
9to a 3rd person.
AB481-ASA1,32,13
10407.503 Document of title to goods defeated in certain cases. (1) A
11document of title confers no right in goods against a person that before issuance of
12the document had a legal interest or a perfected security interest in the goods and
13that did not do any of the following:
AB481-ASA1,32,1814
(a) Deliver or entrust the goods or any document covering the goods to the bailor
15or the bailor's nominee with actual or apparent authority to ship, store, or sell; with
16power to obtain delivery under s. 407.403; or with power of disposition under s.
17402.403, 409.320, 409.321 (3), 411.304 (2), or 411.305 (2), or other statute or rule of
18law.
AB481-ASA1,32,1919
(b) Acquiesce in the procurement by the bailor or its nominee of any document.
AB481-ASA1,32,23
20(2) Title to goods based upon an unaccepted delivery order is subject to the
21rights of any person to which a negotiable warehouse receipt or bill of lading covering
22the goods has been duly negotiated. That title may be defeated under s. 407.504 to
23the same extent as the rights of the issuer or a transferee from the issuer.
AB481-ASA1,33,2
24(3) Title to goods based upon a bill of lading issued to a freight forwarder is
25subject to the rights of any person to which a bill issued by the freight forwarder is
1duly negotiated. However, delivery by the carrier in accordance with subch. IV
2pursuant to its own bill of lading discharges the carrier's obligation to deliver.
AB481-ASA1,33,7
3407.504 Rights acquired in absence of due negotiation; effect of
4diversion; stoppage of delivery. (1) A transferee of a document of title, whether
5negotiable or nonnegotiable, to which the document has been delivered but not duly
6negotiated, acquires the title and rights that its transferor had or had actual
7authority to convey.
AB481-ASA1,33,10
8(2) In the case of a nonnegotiable document of title, until but not after the bailee
9receives notice of the transfer, the rights of the transferee may be defeated by any of
10the following:
AB481-ASA1,33,1211
(a) Those creditors of the transferor that could treat the transfer as void under
12s. 402.402 or 411.308.
AB481-ASA1,33,1413
(b) A buyer from the transferor in ordinary course of business if the bailee has
14delivered the goods to the buyer or received notification of the buyer's rights.
AB481-ASA1,33,1615
(c) A lessee from the transferor in ordinary course of business if the bailee has
16delivered the goods to the lessee or received notification of the lessee's rights.
AB481-ASA1,33,1717
(d) As against the bailee, by good faith dealings of the bailee with the transferor.
AB481-ASA1,33,22
18(3) A diversion or other change of shipping instructions by the consignor in a
19nonnegotiable bill of lading which causes the bailee not to deliver the goods to the
20consignee defeats the consignee's title to the goods if the goods have been delivered
21to a buyer in ordinary course of business or a lessee in ordinary course of business
22and in any event defeats the consignee's rights against the bailee.
AB481-ASA1,34,2
23(4) Delivery of the goods pursuant to a nonnegotiable document of title may be
24stopped by a seller under s. 402.705 or a lessor under s. 411.526, subject to the
25requirements of due notification in those sections. A bailee honoring the seller's or
1lessor's instructions is entitled to be indemnified by the seller or lessor against any
2resulting loss or expense.
AB481-ASA1,34,5
3407.505 Endorser not guarantor for other parties. The endorsement of
4a tangible document of title issued by a bailee does not make the endorser liable for
5any default by the bailee or previous endorsers.
AB481-ASA1,34,9
6407.506 Delivery without endorsement; right to compel endorsement. 7The transferee of a negotiable tangible document of title has a specifically
8enforceable right to have its transferor supply any necessary endorsement, but the
9transfer becomes a negotiation only as of the time the endorsement is supplied.
AB481-ASA1,34,14
10407.507 Warranties on negotiation or delivery of document of title. If
11a person negotiates or delivers a document of title for value, otherwise than as a mere
12intermediary under s. 407.508, unless otherwise agreed, the transferor warrants to
13its immediate purchaser only in addition to any warranty made in selling or leasing
14the goods that all of the following apply:
AB481-ASA1,34,15
15(1) The document is genuine.
AB481-ASA1,34,17
16(2) The transferor does not have knowledge of any fact that would impair the
17document's validity or worth.
AB481-ASA1,34,19
18(3) The negotiation or delivery is rightful and fully effective with respect to the
19title to the document and the goods it represents.
AB481-ASA1,34,25
20407.508 Warranties of collecting bank as to documents of title. A
21collecting bank or other intermediary known to be entrusted with documents of title
22on behalf of another or with collection of a draft or other claim against delivery of
23documents warrants by the delivery of the documents only its own good faith and
24authority even if the collecting bank or other intermediary has purchased or made
25advances against the claim or draft to be collected.
AB481-ASA1,35,3
1407.509 Adequate compliance with commercial contract. Whether a
2document of title is adequate to fulfill the obligations of a contract for sale, a contract
3for lease, or the conditions of a letter of credit is determined by ch. 402, 405, or 411.
AB481-ASA1,35,44
Subchapter VI
AB481-ASA1,35,65
warehouse receipts and bills of
6
lading: Miscellaneous provisions
AB481-ASA1,35,16
7407.601 Lost, stolen, or destroyed documents of title. (1) If a document
8of title is lost, stolen, or destroyed, a court may order delivery of the goods or issuance
9of a substitute document and the bailee may without liability to any person comply
10with the order. If the document was negotiable, a court may not order delivery of the
11goods or issuance of a substitute document without the claimant's posting security
12unless it finds that any person that may suffer loss as a result of nonsurrender of
13possession or control of the document is adequately protected against the loss. If the
14document was nonnegotiable, the court may require security. The court may also
15order payment of the bailee's reasonable costs and attorney fees in any action under
16this subsection.
AB481-ASA1,35,22
17(2) A bailee that without court order delivers goods to a person claiming under
18a missing negotiable document of title is liable to any person injured thereby. If the
19delivery is not in good faith, the bailee is liable for conversion. Delivery in good faith
20is not conversion if the claimant posts security with the bailee in an amount at least
21double the value of the goods at the time of posting to indemnify any person injured
22by the delivery which files a notice of claim within one year after the delivery.
AB481-ASA1,36,7
23407.602 Attachment of goods covered by negotiable document of title. 24Unless a document of title was originally issued upon delivery of the goods by a
25person that did not have power to dispose of them, a lien does not attach by virtue
1of any judicial process to goods in the possession of a bailee for which a negotiable
2document of title is outstanding unless possession or control of the document is first
3surrendered to the bailee or the document's negotiation is enjoined. The bailee may
4not be compelled to deliver the goods pursuant to process until possession or control
5of the document is surrendered to the bailee or to the court. A purchaser of the
6document for value without notice of the process or injunction takes free of the lien
7imposed by judicial process.
AB481-ASA1,36,12
8407.603 Conflicting claims; interpleader. If more than one person claims
9title to or possession of the goods, the bailee is excused from delivery until the bailee
10has a reasonable time to ascertain the validity of the adverse claims or to commence
11an action for interpleader. The bailee may assert an interpleader either in defending
12an action for nondelivery of the goods or by original action.
AB481-ASA1,36,1514
408.103
(7) A document of title, as defined in s. 401.201 (15), is not a financial
15asset unless s. 408.102 (1) (i) 1. c. applies.
AB481-ASA1,36,1717
409.102
(2) (df) "Control" (with respect to a document of title) — s. 407.106.
AB481-ASA1, s. 25
18Section
25. 409.203 (2) (c) 4. of the statutes is amended to read:
AB481-ASA1,36,2219
409.203
(2) (c) 4. The collateral is deposit accounts, electronic chattel paper,
20investment property,
or letter-of-credit rights,
or electronic documents, and the
21secured party has control under s.
407.106, 409.104, 409.105, 409.106, or 409.107
22pursuant to the debtor's security agreement.
AB481-ASA1, s. 26
23Section
26. 409.207 (3) (intro.) of the statutes is amended to read:
AB481-ASA1,37,224
409.207
(3) Duties and rights when secured party in possession or control. 25(intro.) Except as otherwise provided in sub. (4), a secured party having possession
1of collateral or control of collateral under s.
407.106, 409.104, 409.105, 409.106, or
2409.107:
AB481-ASA1,37,94
409.208
(2) (d) A secured party having control of investment property under
5s. 408.106 (4) (b) or 409.106 (2) shall send to the securities intermediary or
6commodity intermediary with which the security entitlement or commodity contract
7is maintained an authenticated record that releases the securities intermediary or
8commodity intermediary from any further obligation to comply with entitlement
9orders or directions originated by the secured party;
and
AB481-ASA1,37,1511
409.208
(2) (e) A secured party having control of a letter-of-credit right under
12s. 409.107 shall send to each person having an unfulfilled obligation to pay or deliver
13proceeds of the letter of credit to the secured party an authenticated release from any
14further obligation to pay or deliver proceeds of the letter of credit to the secured party
. 15; and
AB481-ASA1,37,1817
409.208
(2) (f) A secured party having control of an electronic document shall
18do all of the following:
AB481-ASA1,37,2019
1. Give control of the electronic document to the debtor or its designated
20custodian.
AB481-ASA1,38,221
2. If the debtor designates a custodian that is the designated custodian with
22which the authoritative copy of the electronic document is maintained for the
23secured party, communicate to the custodian an authenticated record releasing the
24designated custodian from any further obligation to comply with instructions
1originated by the secured party and instructing the custodian to comply with
2instructions originated by the debtor.
AB481-ASA1,38,53
3. Take appropriate action to enable the debtor or its designated custodian to
4make copies of or revisions to the authoritative copy which add or change an
5identified assignee of the authoritative copy without the consent of the secured party.
AB481-ASA1, s. 30
6Section
30. 409.301 (3) (intro.) of the statutes is amended to read:
AB481-ASA1,38,97
409.301
(3) Location of property. (intro.) Except as otherwise provided in sub.
8(4), while
tangible negotiable documents, goods, instruments, money, or tangible
9chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:
AB481-ASA1,38,1311
409.310
(2) (e) In certificated securities, documents, goods, or instruments
12which is perfected without filing
, control, or possession under s. 409.312 (5), (6), or
13(7);
AB481-ASA1,38,1715
409.310
(2) (h) In deposit accounts, electronic chattel paper,
electronic
16documents, investment property, or letter-of-credit rights which is perfected by
17control under s. 409.314;
AB481-ASA1,38,2319
409.312
(5) Temporary perfection: new value. A security interest in
20certificated securities, negotiable documents, or instruments is perfected without
21filing or the taking of possession
or control for a period of 20 days from the time it
22attaches to the extent that it arises for new value given under an authenticated
23security agreement.
AB481-ASA1,39,6
1409.313
(1) Perfection by possession or delivery. Except as otherwise
2provided in sub. (2), a secured party may perfect a security interest in
tangible 3negotiable documents, goods, instruments, money, or tangible chattel paper by
4taking possession of the collateral. A secured party may perfect a security interest
5in certificated securities by taking delivery of the certificated securities under s.
6408.301.
AB481-ASA1,39,118
409.314
(1) Perfection by control. A security interest in investment property,
9deposit accounts, letter-of-credit rights,
or electronic chattel paper
, or electronic
10documents may be perfected by control of the collateral under s.
407.106, 409.104,
11409.105, 409.106, or 409.107.
AB481-ASA1,39,1813
409.314
(2) Specified collateral: time of perfection by control;
14continuation of perfection. A security interest in deposit accounts, electronic
15chattel paper,
or letter-of-credit rights
, or electronic documents is perfected by
16control under s.
407.106, 409.104, 409.105, or 409.107 when the secured party
17obtains control and remains perfected by control only while the secured party retains
18control.
AB481-ASA1,39,2520
409.317
(2) Buyers that receive delivery. Except as otherwise provided in
21sub. (5), a buyer, other than a secured party, of tangible chattel paper,
tangible 22documents, goods, instruments, or a security certificate takes free of a security
23interest or agricultural lien if the buyer gives value and receives delivery of the
24collateral without knowledge of the security interest or agricultural lien and before
25it is perfected.
AB481-ASA1,40,72
409.317
(4) Licensees and buyers of certain collateral. A licensee of a
3general intangible or a buyer, other than a secured party, of accounts, electronic
4chattel paper,
electronic documents, general intangibles, or investment property
5other than a certificated security takes free of a security interest if the licensee or
6buyer gives value without knowledge of the security interest and before it is
7perfected.
AB481-ASA1,40,139
409.338
(2) A purchaser, other than a secured party, of the collateral takes free
10of the security interest or agricultural lien to the extent that, in reasonable reliance
11upon the incorrect information, the purchaser gives value and, in the case of
tangible 12chattel paper,
tangible documents, goods, instruments, or a security certificate,
13receives delivery of the collateral.
AB481-ASA1,40,1815
409.601
(2) Rights and duties of secured party in possession or control. A
16secured party in possession of collateral or control of collateral under s.
407.106, 17409.104, 409.105, 409.106, or 409.107 has the rights and duties provided in s.
18409.207.
AB481-ASA1,41,220
411.103
(1) (a) "Buyer in ordinary course of business" means a person who, in
21good faith and without knowledge that the sale to him or her is in violation of the
22ownership rights or security interest or leasehold interest of a 3rd party in the goods,
23buys in ordinary course from a person in the business of selling goods of that kind
24but does not include a pawnbroker. "Buying" may be for cash or by exchange of other
25property or on secured or unsecured credit and includes
receiving acquiring goods or
1documents of title under a preexisting contract for sale but does not include a
2transfer in bulk or as security for or in total or partial satisfaction of a money debt.
AB481-ASA1,41,124
411.103
(1) (o) "Lessee in ordinary course of business" means a person who in
5good faith and without knowledge that the lease to him or her is in violation of the
6ownership rights or security interest or leasehold interest of a 3rd party in the goods
7leases in ordinary course from a person in the business of selling or leasing goods of
8that kind but does not include a pawnbroker. "Leasing" may be for cash or by
9exchange of other property or on secured or unsecured credit and includes
receiving 10acquiring goods or documents of title under a preexisting lease contract but does not
11include a transfer in bulk or as security for or in total or partial satisfaction of a
12money debt.
AB481-ASA1,41,1614
411.514
(2) A lessee's failure to reserve rights when paying rent or other
15consideration against documents precludes recovery of the payment for defects
16apparent
on the face of in the documents.
AB481-ASA1,41,1918
411.526
(2) (c) Acknowledgment to the lessee by a carrier via reshipment or as
19a warehouse
keeper that the carrier holds the goods for the lessee.
AB481-ASA1,41,2221
(1) This act first applies to a document of title that is issued or a bailment that
22arises on the effective date of this subsection.
AB481-ASA1,42,2
1(1) This act takes effect on the first day of the 3rd month beginning after
2publication.