SB480,32,21 (2) Title to goods based upon an unaccepted delivery order is subject to the rights of any person to which a negotiable warehouse receipt or bill of lading covering the goods has been duly negotiated. That title may be defeated under s. 407.504 to the same extent as the rights of the issuer or a transferee from the issuer.

SB480,32,25 (3) Title to goods based upon a bill of lading issued to a freight forwarder is subject to the rights of any person to which a bill issued by the freight forwarder is duly negotiated. However, delivery by the carrier in accordance with subch. IV pursuant to its own bill of lading discharges the carrier's obligation to deliver.

SB480,33,5 407.504 Rights acquired in absence of due negotiation; effect of diversion; stoppage of delivery. (1) A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires the title and rights that its transferor had or had actual authority to convey.

SB480,33,8 (2) In the case of a nonnegotiable document of title, until but not after the bailee receives notice of the transfer, the rights of the transferee may be defeated by any of the following:

SB480,33,10 (a) Those creditors of the transferor that could treat the transfer as void under s. 402.402 or 411.308.

SB480,33,12 (b) 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.

SB480,33,14 (c) A lessee from the transferor in ordinary course of business if the bailee has delivered the goods to the lessee or received notification of the lessee's rights.

SB480,33,15 (d) As against the bailee, by good faith dealings of the bailee with the transferor.

SB480,33,20 (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 the goods to the consignee defeats the consignee's title to the goods if the goods have been delivered to a buyer in ordinary course of business or a lessee in ordinary course of business and in any event defeats the consignee's rights against the bailee.

SB480,33,25 (4) Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under s. 402.705 or a lessor under s. 411.526, subject to the requirements of due notification in those sections. A bailee honoring the seller's or lessor's instructions is entitled to be indemnified by the seller or lessor against any resulting loss or expense.

SB480,34,3 407.505 Endorser not guarantor for other parties. The endorsement of a tangible document of title issued by a bailee does not make the endorser liable for any default by the bailee or previous endorsers.

SB480,34,7 407.506 Delivery without endorsement; right to compel endorsement. The transferee of a negotiable tangible document of title has a specifically enforceable right to have its transferor supply any necessary endorsement, but the transfer becomes a negotiation only as of the time the endorsement is supplied.

SB480,34,12 407.507 Warranties on negotiation or delivery of document of title. If a person negotiates or delivers a document of title for value, otherwise than as a mere intermediary under s. 407.508, unless otherwise agreed, the transferor warrants to its immediate purchaser only in addition to any warranty made in selling or leasing the goods that all of the following apply:

SB480,34,13 (1) The document is genuine.

SB480,34,15 (2) The transferor does not have knowledge of any fact that would impair the document's validity or worth.

SB480,34,17 (3) The negotiation or delivery is rightful and fully effective with respect to the title to the document and the goods it represents.

SB480,34,23 407.508 Warranties of collecting bank as to documents of title. A collecting bank or other intermediary known to be entrusted with documents of title on behalf of another or with collection of a draft or other claim against delivery of documents warrants by the delivery of the documents only its own good faith and authority even if the collecting bank or other intermediary has purchased or made advances against the claim or draft to be collected.

SB480,35,3 407.509 Adequate compliance with commercial contract. Whether a document of title is adequate to fulfill the obligations of a contract for sale, a contract for lease, or the conditions of a letter of credit is determined by ch. 402, 405, or 411.

SB480,35,4 Subchapter VI

SB480,35,6 warehouse receipts and bills of lading: Miscellaneous provisions

SB480,35,16 407.601 Lost, stolen, or destroyed documents of title. (1) If a document of title is 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 the order. If the document was negotiable, a court may not order delivery of the goods or issuance of a substitute document without the claimant's posting security unless it finds that any person that may suffer loss as a result of nonsurrender of possession or control of the document is adequately protected against the loss. If the document was nonnegotiable, the court may require security. The court may also order payment of the bailee's reasonable costs and attorney fees in any action under this subsection.

SB480,35,22 (2) A bailee that without court order delivers goods to a person claiming under a missing negotiable document of title is liable to any person injured thereby. If the delivery is not in good faith, the bailee is liable for conversion. Delivery in good faith is not conversion 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 which files a notice of claim within one year after the delivery.

SB480,36,7 407.602 Attachment of goods covered by negotiable document of title. Unless a document of title was originally issued upon delivery of the goods by a person that did not have power to dispose of them, a lien does not attach by virtue of any judicial process to goods in the possession of a bailee for which a negotiable document of title is outstanding unless possession or control of the document is first surrendered to the bailee or the document's negotiation is enjoined. The bailee may not be compelled to deliver the goods pursuant to process until possession or control of the document is surrendered to the bailee or to the court. A purchaser of the document for value without notice of the process or injunction takes free of the lien imposed by judicial process.

SB480,36,12 407.603 Conflicting claims; interpleader. If more than one person claims title to or possession of the goods, the bailee is excused from delivery until the bailee has a reasonable time to ascertain the validity of the adverse claims or to commence an action for interpleader. The bailee may assert an interpleader either in defending an action for nondelivery of the goods or by original action.

SB480, s. 23 Section 23. 408.103 (7) of the statutes is created to read:

SB480,36,15 408.103 (7) A document of title, as defined in s. 401.201 (15), is not a financial asset unless s. 408.102 (1) (i) 1. c. applies.

SB480, s. 24 Section 24. 409.102 (2) (df) of the statutes is created to read:

SB480,36,17 409.102 (2) (df) "Control" (with respect to a document of title) — s. 407.106.

SB480, s. 25 Section 25. 409.203 (2) (c) 4. of the statutes is amended to read: