AB481,32,66 (g) Any other lawful excuse.
AB481,32,9 7(2) A person claiming goods covered by a document of title shall satisfy the
8bailee's lien if the bailee so requests or the bailee is prohibited by law from delivering
9the goods until the charges are paid.
AB481,32,11 10(3) Unless a person claiming the goods is one against which the document of
11title does not confer a right under s. 407.503 (1), all of the following apply:
AB481,32,1412 (a) The person claiming under a document shall surrender possession or control
13of any outstanding negotiable document covering the goods for cancellation or
14indication of partial deliveries.
AB481,32,1715 (b) The bailee shall cancel the document or conspicuously indicate in the
16document the partial delivery or be liable to any person to which the document is duly
17negotiated.
AB481,32,21 18407.404 No liability for good faith delivery pursuant to document of
19title.
A bailee that in good faith has received goods and delivered or otherwise
20disposed of the goods according to the terms of a document of title or pursuant to this
21chapter is not liable for the goods even if any of the following apply:
AB481,32,23 22(1) The person from which the bailee received the goods did not have authority
23to procure the document or to dispose of the goods.
AB481,32,25 24(2) The person to which the bailee delivered the goods did not have authority
25to receive the goods.
AB481,33,1
1Subchapter V
AB481,33,32 warehouse receipts and bills of
3 lading: negotiation and transfer
AB481,33,5 4407.501 Form of negotiation and requirements of due negotiation. (1)
5The following rules apply to a negotiable tangible document of title:
AB481,33,96 (a) If the document's original terms run to the order of a named person, the
7document is negotiated by the named person's endorsement and delivery. After the
8named person's endorsement in blank or to bearer, any person may negotiate the
9document by delivery alone.
AB481,33,1110 (b) If the document's original terms run to bearer, it is negotiated by delivery
11alone.
AB481,33,1412 (c) If the document's original terms run to the order of a named person and it
13is delivered to the named person, the effect is the same as if the document had been
14negotiated.
AB481,33,1615 (d) Negotiation of the document after it has been endorsed to a named person
16requires endorsement by the named person as well as delivery.
AB481,33,2117 (e) A document is duly negotiated if it is negotiated in the manner stated in this
18subsection to a holder that purchases it in good faith, without notice of any defense
19against or claim to it on the part of any person, and for value, unless it is established
20that the negotiation is not in the regular course of business or financing or involves
21receiving the document in settlement or payment of a monetary obligation.
AB481,33,22 22(2) The following rules apply to a negotiable electronic document of title:
AB481,33,2523 (a) If the document's original terms run to the order of a named person or to
24bearer, the document is negotiated by delivery of the document to another person.
25Endorsement by the named person is not required to negotiate the document.
AB481,34,3
1(b) If the document's original terms run to the order of a named person and the
2named person has control of the document, the effect is the same as if the document
3had been negotiated.
AB481,34,84 (c) A document is duly negotiated if it is negotiated in the manner stated in this
5subsection to a holder that purchases it in good faith, without notice of any defense
6against or claim to it on the part of any person, and for value, unless it is established
7that the negotiation is not in the regular course of business or financing or involves
8taking delivery of the document in settlement or payment of a monetary obligation.
AB481,34,10 9(3) Endorsement of a nonnegotiable document of title neither makes it
10negotiable nor adds to the transferee's rights.
AB481,34,13 11(4) The naming in a negotiable bill of lading of a person to be notified of the
12arrival of the goods does not limit the negotiability of the bill or constitute notice to
13a purchaser of the bill of any interest of that person in the goods.
AB481,34,16 14407.502 Rights acquired by due negotiation. (1) Subject to ss. 407.205
15and 407.503, a holder to which a negotiable document of title has been duly
16negotiated acquires thereby all of the following:
AB481,34,1717 (a) Title to the document.
AB481,34,1818 (b) Title to the goods.
AB481,34,2019 (c) All rights accruing under the law of agency or estoppel, including rights to
20goods delivered to the bailee after the document was issued.
AB481,35,221 (d) The direct obligation of the issuer to hold or deliver the goods according to
22the terms of the document free of any defense or claim by the issuer except those
23arising under the terms of the document or under this chapter. In the case of a
24delivery order, the bailee's obligation accrues only upon the bailee's acceptance of the

1delivery order and the obligation acquired by the holder is that the issuer and any
2endorser will procure the acceptance of the bailee.
AB481,35,6 3(2) Subject to s. 407.503, title and rights acquired by due negotiation are not
4defeated by any stoppage of the goods represented by the document of title or by
5surrender of the goods by the bailee and are not impaired even if any of the following
6apply:
AB481,35,87 (a) The due negotiation or any prior due negotiation constituted a breach of
8duty.
AB481,35,119 (b) Any person has been deprived of possession of a negotiable tangible
10document or control of a negotiable electronic document by misrepresentation, fraud,
11accident, mistake, duress, loss, theft, or conversion.
AB481,35,1312 (c) A previous sale or other transfer of the goods or document has been made
13to a 3rd person.
AB481,35,17 14407.503 Document of title to goods defeated in certain cases. (1) A
15document of title confers no right in goods against a person that before issuance of
16the document had a legal interest or a perfected security interest in the goods and
17that did not do any of the following:
AB481,35,2118 (a) Deliver or entrust the goods or any document covering the goods to the bailor
19or the bailor's nominee with actual or apparent authority to ship, store, or sell; with
20power to obtain delivery under s. 407.403; or with power of disposition under s.
21402.403, 409.320, 411.304 (2), or 411.305 (2), or other statute or rule of law.
AB481,35,2222 (b) Acquiesce in the procurement by the bailor or its nominee of any document.
AB481,36,2 23(2) Title to goods based upon an unaccepted delivery order is subject to the
24rights of any person to which a negotiable warehouse receipt or bill of lading covering

1the goods has been duly negotiated. That title may be defeated under s. 407.504 to
2the same extent as the rights of the issuer or a transferee from the issuer.
AB481,36,6 3(3) Title to goods based upon a bill of lading issued to a freight forwarder is
4subject to the rights of any person to which a bill issued by the freight forwarder is
5duly negotiated. However, delivery by the carrier in accordance with subch. IV
6pursuant to its own bill of lading discharges the carrier's obligation to deliver.
AB481,36,11 7407.504 Rights acquired in absence of due negotiation; effect of
8diversion; stoppage of delivery. (1)
A transferee of a document of title, whether
9negotiable or nonnegotiable, to which the document has been delivered but not duly
10negotiated, acquires the title and rights that its transferor had or had actual
11authority to convey.
AB481,36,14 12(2) In the case of a nonnegotiable document of title, until but not after the bailee
13receives notice of the transfer, the rights of the transferee may be defeated by any of
14the following:
AB481,36,1615 (a) Those creditors of the transferor that could treat the transfer as void under
16s. 402.402 or 411.308.
AB481,36,1817 (b) A buyer from the transferor in ordinary course of business if the bailee has
18delivered the goods to the buyer or received notification of the buyer's rights.
AB481,36,2019 (c) A lessee from the transferor in ordinary course of business if the bailee has
20delivered the goods to the lessee or received notification of the lessee's rights.
AB481,36,2121 (d) As against the bailee, by good faith dealings of the bailee with the transferor.
AB481,37,2 22(3) A diversion or other change of shipping instructions by the consignor in a
23nonnegotiable bill of lading which causes the bailee not to deliver the goods to the
24consignee defeats the consignee's title to the goods if the goods have been delivered

1to a buyer in ordinary course of business or a lessee in ordinary course of business
2and in any event defeats the consignee's rights against the bailee.
AB481,37,7 3(4) Delivery of the goods pursuant to a nonnegotiable document of title may be
4stopped by a seller under s. 402.705 or a lessor under s. 411.526, subject to the
5requirements of due notification in those sections. A bailee honoring the seller's or
6lessor's instructions is entitled to be indemnified by the seller or lessor against any
7resulting loss or expense.
AB481,37,10 8407.505 Endorser not guarantor for other parties. The endorsement of
9a tangible document of title issued by a bailee does not make the endorser liable for
10any default by the bailee or previous endorsers.
AB481,37,14 11407.506 Delivery without endorsement; right to compel endorsement.
12The transferee of a negotiable tangible document of title has a specifically
13enforceable right to have its transferor supply any necessary endorsement, but the
14transfer becomes a negotiation only as of the time the endorsement is supplied.
AB481,37,19 15407.507 Warranties on negotiation or delivery of document of title. If
16a person negotiates or delivers a document of title for value, otherwise than as a mere
17intermediary under s. 407.508, unless otherwise agreed, the transferor warrants to
18its immediate purchaser only in addition to any warranty made in selling or leasing
19the goods that all of the following apply:
AB481,37,20 20(1) The document is genuine.
AB481,37,22 21(2) The transferor does not have knowledge of any fact that would impair the
22document's validity or worth.
AB481,37,24 23(3) The negotiation or delivery is rightful and fully effective with respect to the
24title to the document and the goods it represents.
AB481,38,6
1407.508 Warranties of collecting bank as to documents of title. A
2collecting bank or other intermediary known to be entrusted with documents of title
3on behalf of another or with collection of a draft or other claim against delivery of
4documents warrants by the delivery of the documents only its own good faith and
5authority even if the collecting bank or other intermediary has purchased or made
6advances against the claim or draft to be collected.
AB481,38,9 7407.509 Adequate compliance with commercial contract. Whether a
8document of title is adequate to fulfill the obligations of a contract for sale, a contract
9for lease, or the conditions of a letter of credit is determined by ch. 402, 405, or 411.
AB481,38,1010 Subchapter VI
AB481,38,1211 warehouse receipts and bills of
12 lading: Miscellaneous provisions
AB481,38,22 13407.601 Lost, stolen, or destroyed documents of title. (1) If a document
14of title is lost, stolen, or destroyed, a court may order delivery of the goods or issuance
15of a substitute document and the bailee may without liability to any person comply
16with the order. If the document was negotiable, a court may not order delivery of the
17goods or issuance of a substitute document without the claimant's posting security
18unless it finds that any person that may suffer loss as a result of nonsurrender of
19possession or control of the document is adequately protected against the loss. If the
20document was nonnegotiable, the court may require security. The court may also
21order payment of the bailee's reasonable costs and attorney fees in any action under
22this subsection.
AB481,39,3 23(2) A bailee that without court order delivers goods to a person claiming under
24a missing negotiable document of title is liable to any person injured thereby. If the
25delivery is not in good faith, the bailee is liable for conversion. Delivery in good faith

1is not conversion if the claimant posts security with the bailee in an amount at least
2double the value of the goods at the time of posting to indemnify any person injured
3by the delivery which files a notice of claim within one year after the delivery.
AB481,39,13 4407.602 Attachment of goods covered by negotiable document of title.
5Unless a document of title was originally issued upon delivery of the goods by a
6person that did not have power to dispose of them, a lien does not attach by virtue
7of any judicial process to goods in the possession of a bailee for which a negotiable
8document of title is outstanding unless possession or control of the document is first
9surrendered to the bailee or the document's negotiation is enjoined. The bailee may
10not be compelled to deliver the goods pursuant to process until possession or control
11of the document is surrendered to the bailee or to the court. A purchaser of the
12document for value without notice of the process or injunction takes free of the lien
13imposed by judicial process.
AB481,39,18 14407.603 Conflicting claims; interpleader. If more than one person claims
15title to or possession of the goods, the bailee is excused from delivery until the bailee
16has a reasonable time to ascertain the validity of the adverse claims or to commence
17an action for interpleader. The bailee may assert an interpleader either in defending
18an action for nondelivery of the goods or by original action.
AB481, s. 33 19Section 33. 408.103 (7) of the statutes is created to read:
AB481,39,2120 408.103 (7) A document of title, as defined in s. 401.201 (15), is not a financial
21asset unless s. 408.102 (1) (i) 1. c. applies.
AB481, s. 34 22Section 34. 409.102 (2) (df) of the statutes is created to read:
AB481,39,2323 409.102 (2) (df) "Control" (with respect to a document of title) — s. 407.106.
AB481, s. 35 24Section 35. 409.203 (2) (c) 4. of the statutes is amended to read:
AB481,40,4
1409.203 (2) (c) 4. The collateral is deposit accounts, electronic chattel paper,
2investment property, or letter-of-credit rights, or electronic documents, and the
3secured party has control under s. 407.106, 409.104, 409.105, 409.106, or 409.107
4pursuant to the debtor's security agreement.
AB481, s. 36 5Section 36. 409.207 (3) (intro.) of the statutes is amended to read:
AB481,40,96 409.207 (3) Duties and rights when secured party in possession or control.
7(intro.) Except as otherwise provided in sub. (4), a secured party having possession
8of collateral or control of collateral under s. 407.106, 409.104, 409.105, 409.106, or
9409.107:
AB481, s. 37 10Section 37. 409.208 (2) (d) of the statutes is amended to read:
AB481,40,1611 409.208 (2) (d) A secured party having control of investment property under
12s. 408.106 (4) (b) or 409.106 (2) shall send to the securities intermediary or
13commodity intermediary with which the security entitlement or commodity contract
14is maintained an authenticated record that releases the securities intermediary or
15commodity intermediary from any further obligation to comply with entitlement
16orders or directions originated by the secured party; and
AB481, s. 38 17Section 38. 409.208 (2) (e) of the statutes is amended to read:
AB481,40,2218 409.208 (2) (e) A secured party having control of a letter-of-credit right under
19s. 409.107 shall send to each person having an unfulfilled obligation to pay or deliver
20proceeds of the letter of credit to the secured party an authenticated release from any
21further obligation to pay or deliver proceeds of the letter of credit to the secured party.
22; and
AB481, s. 39 23Section 39. 409.208 (2) (f) of the statutes is created to read:
AB481,40,2524 409.208 (2) (f) A secured party having control of an electronic document shall
25do all of the following:
AB481,41,2
11. Give control of the electronic document to the debtor or its designated
2custodian.
AB481,41,83 2. If the debtor designates a custodian that is the designated custodian with
4which the authoritative copy of the electronic document is maintained for the
5secured party, communicate to the custodian an authenticated record releasing the
6designated custodian from any further obligation to comply with instructions
7originated by the secured party and instructing the custodian to comply with
8instructions originated by the debtor.
AB481,41,119 3. Take appropriate action to enable the debtor or its designated custodian to
10make copies of or revisions to the authoritative copy which add or change an
11identified assignee of the authoritative copy without the consent of the secured party.
AB481, s. 40 12Section 40. 409.301 (3) (intro.) of the statutes is amended to read:
AB481,41,1513 409.301 (3) Location of property. (intro.) Except as otherwise provided in sub.
14(4), while tangible negotiable documents, goods, instruments, money, or tangible
15chattel paper is located in a jurisdiction, the local law of that jurisdiction governs:
AB481, s. 41 16Section 41. 409.310 (2) (e) of the statutes is amended to read:
AB481,41,1917 409.310 (2) (e) In certificated securities, documents, goods, or instruments
18which is perfected without filing, control, or possession under s. 409.312 (5), (6), or
19(7);
AB481, s. 42 20Section 42. 409.310 (2) (h) of the statutes is amended to read:
AB481,41,2321 409.310 (2) (h) In deposit accounts, electronic chattel paper, electronic
22documents,
investment property, or letter-of-credit rights which is perfected by
23control under s. 409.314;
AB481, s. 43 24Section 43. 409.312 (5) of the statutes is amended to read:
AB481,42,5
1409.312 (5) Temporary perfection: new value. A security interest in
2certificated securities, negotiable documents, or instruments is perfected without
3filing or the taking of possession or control for a period of 20 days from the time it
4attaches to the extent that it arises for new value given under an authenticated
5security agreement.
AB481, s. 44 6Section 44. 409.313 (1) of the statutes is amended to read:
AB481,42,127 409.313 (1) Perfection by possession or delivery. Except as otherwise
8provided in sub. (2), a secured party may perfect a security interest in tangible
9negotiable documents, goods, instruments, money, or tangible chattel paper by
10taking possession of the collateral. A secured party may perfect a security interest
11in certificated securities by taking delivery of the certificated securities under s.
12408.301.
AB481, s. 45 13Section 45. 409.314 (1) of the statutes is amended to read:
AB481,42,1714 409.314 (1) Perfection by control. A security interest in investment property,
15deposit accounts, letter-of-credit rights, or electronic chattel paper, or electronic
16documents
may be perfected by control of the collateral under s. 407.106, 409.104,
17409.105, 409.106, or 409.107.
AB481, s. 46 18Section 46. 409.314 (2) of the statutes is amended to read:
AB481,42,2419 409.314 (2) Specified collateral: time of perfection by control;
20continuation of perfection.
A security interest in deposit accounts, electronic
21chattel paper, or letter-of-credit rights, or electronic documents is perfected by
22control under s. 407.106, 409.104, 409.105, or 409.107 when the secured party
23obtains control and remains perfected by control only while the secured party retains
24control.
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