407.501(2)(a)(a) A negotiable document of title is also negotiated by delivery alone when by its original terms it runs to bearer and has not been indorsed to a specified person.
407.501(2)(b)
(b) When a document running to the order of a named person is delivered to the named person the effect is the same as if the document had been negotiated.
407.501(3)
(3) Negotiation of a negotiable document of title after it has been indorsed to a specified person requires indorsement by the special indorsee as well as delivery.
407.501(4)
(4) A negotiable document of title is "duly negotiated" when it is negotiated in the manner stated in this section to a holder who purchases it in good faith without notice of any defense against or claim to it on the part of any person and for value, unless it is established that the negotiation is not in the regular course of business or financing or involves receiving the document in settlement or payment of a money obligation.
407.501(5)
(5) Indorsement of a nonnegotiable document neither makes it negotiable nor adds to the transferee's rights.
407.501(6)
(6) The naming in a negotiable bill of a person to be notified of the arrival of the goods does not limit the negotiability of the bill nor constitute notice to a purchaser thereof of any interest of such person in the goods.
407.501 History
History: 1991 a. 316.
407.501 Annotation
Buyer in ordinary course of business under article 9 of the uniform commercial code (and related matters). Skilton, 1974 WLR 1.
407.502
407.502
Rights acquired by due negotiation. 407.502(1)
(1) Subject to
s. 407.503 and to
s. 407.205 on fungible goods, a holder to whom a negotiable document of title has been duly negotiated acquires thereby:
407.502(1)(c)
(c) All rights accruing under the law of agency or estoppel, including rights to goods delivered to the bailee after the document was issued; and
407.502(1)(d)
(d) The direct obligation of the issuer to hold or deliver the goods according to the terms of the document free of any defense or claim by the issuer except those arising under the terms of the document or under this chapter. In the case of a delivery order the bailee's obligation accrues only upon acceptance and the obligation acquired by the holder is that the issuer and any indorser will procure the acceptance of the bailee.
407.502(2)
(2) Subject to
s. 407.503, title and rights so acquired are not defeated by any stoppage of the goods represented by the document or by surrender of such goods by the bailee, and are not impaired even though the negotiation or any prior negotiation constituted a breach of duty or even though any person has been deprived of possession of the document by misrepresentation, fraud, accident, mistake, duress, loss, theft or conversion, or even though a previous sale or other transfer of the goods or document has been made to a third person.
407.502 History
History: 1991 a. 316.
407.503
407.503
Document of title to goods defeated in certain cases. 407.503(1)(1) A document of title confers no right in goods against a person who before issuance of the document had a legal interest or a perfected security interest in them and who neither:
407.503(1)(a)
(a) Delivered or entrusted them or any document of title covering them to the bailor or the bailor's nominee with actual or apparent authority to ship, store or sell or with power to obtain delivery under
s. 407.403 or with power of disposition under
ss. 402.403 or
409.307 or other statute or rule of law; nor
407.503(1)(b)
(b) Acquiesced in the procurement by the bailor or the bailor's nominee of any document of title.
407.503(2)
(2) Title to goods based upon an unaccepted delivery order is subject to the rights of anyone to whom a negotiable warehouse receipt or bill of lading covering the goods has been duly negotiated. Such a title may be defeated under
s. 407.504 to the same extent as the rights of the issuer or a transferee from the issuer.
407.503(3)
(3) Title to goods based upon a bill of lading issued to a freight forwarder is subject to the rights of anyone to whom a bill issued by the freight forwarder is duly negotiated; but delivery by the carrier in accordance with
ss. 407.401 to
407.404 pursuant to its own bill of lading discharges the carrier's obligation to deliver.
407.503 History
History: 1991 a. 316.
407.504
407.504
Rights acquired in the absence of due negotiation; effect of diversion; seller's stoppage of delivery. 407.504(1)(1) A transferee of a document, whether negotiable or nonnegotiable, to whom the document has been delivered but not duly negotiated, acquires the title and rights which the transferee's transferor had or had actual authority to convey.
407.504(2)
(2) In the case of a nonnegotiable document, until but not after the bailee receives notification of the transfer, the rights of the transferee may be defeated:
407.504(2)(a)
(a) By those creditors of the transferor who could treat the sale as void under
s. 402.402; or
407.504(2)(b)
(b) By a buyer from the transferor in ordinary course of business if the bailee has delivered the goods to the buyer or received notification of the buyer's rights; or
407.504(2)(c)
(c) As against the bailee by good faith dealings of the bailee with the transferor.
407.504(3)
(3) A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the bailee not to deliver to the consignee defeats the consignee's title to the goods if they have been delivered to a buyer in ordinary course of business and in any event defeats the consignee's rights against the bailee.
407.504(4)
(4) Delivery pursuant to a nonnegotiable document may be stopped by a seller under
s. 402.705 or a lessor under
s. 411.526, and subject to the requirement of due notification there provided. A bailee honoring the instructions of the seller or lessor is entitled to be indemnified by the seller or lessor against any resulting loss or expense.
407.504 History
History: 1991 a. 148,
316.
407.505
407.505
Indorser not a guarantor for other parties. The indorsement of a document of title issued by a bailee does not make the indorser liable for any default by the bailee or by previous indorsers.
407.506
407.506
Delivery without indorsement: right to compel indorsement. The transferee of a negotiable document of title has a specifically enforceable right to have the transferee's transferor supply any necessary indorsement but the transfer becomes a negotiation only as of the time the indorsement is supplied.
407.506 History
History: 1991 a. 316.
407.507
407.507
Warranties on negotiation or transfer of receipt or bill. Where a person negotiates or transfers a document of title for value otherwise than as a mere intermediary under
s. 407.508, then unless otherwise agreed that person warrants to that person's immediate purchaser only in addition to any warranty made in selling the goods:
407.507(2)
(2) That that person has no knowledge of any fact which would impair its validity or worth; and
407.507(3)
(3) That that person's negotiation or transfer is rightful and fully effective with respect to the title to the document and the goods it represents.
407.507 History
History: 1991 a. 316.
407.508
407.508
Warranties of collecting bank as to documents. A collecting bank or other intermediary known to be entrusted with documents on behalf of another or with collection of a draft or other claim against delivery of documents warrants by such delivery of the documents only its own good faith and authority. This rule applies even though the intermediary has purchased or made advances against the claim or draft to be collected.
407.509
407.509
Receipt or bill: when adequate compliance with commercial contract. The question whether a document is adequate to fulfill the obligations of a contract for sale or the conditions of a credit is governed by
chs. 402 and
405.
WAREHOUSE RECEIPTS AND BILLS OF LADING:
MISCELLANEOUS PROVISIONS
407.601
407.601
Lost and missing documents. 407.601(1)
(1) If a document has been lost, stolen or destroyed, a court may order delivery of the goods or issuance of a substitute document and the bailee may without liability to any person comply with such order. If the document was negotiable the claimant must post security approved by the court to indemnify any person who may suffer loss as a result of nonsurrender of the document. If the document was not negotiable, such security may be required at the discretion of the court. The court may also in its discretion order payment of the bailee's reasonable costs and counsel fees.
407.601(2)
(2) A bailee who without court order delivers goods to a person claiming under a missing negotiable document is liable to any person injured thereby, and if the delivery is not in good faith becomes liable for conversion. Delivery in good faith is not conversion if made in accordance with a filed classification or tariff or, where no classification or tariff is filed, if the claimant posts security with the bailee in an amount at least double the value of the goods at the time of posting to indemnify any person injured by the delivery who files a notice of claim within one year after the delivery.
407.602
407.602
Attachment of goods covered by a negotiable document. Except where the document was originally issued upon delivery of the goods by a person who had no power to dispose of them, no lien attaches by virtue of any judicial process to goods in the possession of a bailee for which a negotiable document of title is outstanding unless the document be first surrendered to the bailee or its negotiation enjoined, and the bailee shall not be compelled to deliver the goods pursuant to process until the document is surrendered to the bailee or impounded by the court. One who purchases the document for value without notice of the process or injunction takes free of the lien imposed by judicial process.
407.602 History
History: 1991 a. 316.
407.603
407.603
Conflicting claims; interpleader. If more than one person claims title or possession of the goods, the bailee is excused from delivery until the bailee has had a reasonable time to ascertain the validity of the adverse claims or to bring an action to compel all claimants to interplead and may compel such interpleader, either in defending an action for nondelivery of the goods, or by original action, whichever is appropriate.
407.603 History
History: 1991 a. 316.
