No Liability for Good-Faith Delivery Pursuant to Document of Title

  1. Law
  2. Georgia Code
  3. Commercial Code
  4. Warehouse Receipts, Bills of Lading, and Other Documents of Title
  5. Warehouse Receipts and Bills of Lading: General Obligations
  6. No Liability for Good-Faith Delivery Pursuant to Document of Title

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A bailee that in good faith has received goods and delivered or otherwise disposed of the goods according to the terms of the document of title or pursuant to this article is not liable for the goods even if:

  1. The person from which the bailee received the goods did not have authority to procure the document or to dispose of the goods; or
  2. The person to which the bailee delivered the goods did not have authority to receive the goods.

(Code 1933, § 109A-7 - 404, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2010, p. 481, § 1-1/HB 451.)

The 2010 amendment, effective May 27, 2010, rewrote this Code section. See the Editor's notes for applicability.

Editor's notes.

- Ga. L. 2010, p. 481, § 3-1, not codified by the General Assembly, provides that: "This Act applies to a document of title that is issued or a bailment that arises on or after the effective date of this Act. This Act does not apply to a document of title that is issued or a bailment that arises before the effective date of this Act even if the document of title or bailment would be subject to this Act if the document of title had been issued or bailment had arisen on or after the effective date of this Act. This Act does not apply to a right of action that has accrued before the effective date of this Act." This Act became effective May 27, 2010.

Ga. L. 2010, p. 481, § 3-2, not codified by the General Assembly, provides that: "A document of title issued or a bailment that arises before the effective date of this Act and the rights, documents, and interests flowing from that document or bailment are governed by any statute or other rule amended or repealed by this Act as if such amendment or repeal had not occurred and may be terminated, completed, consummated, or enforced under that statute or other rule." This Act became effective May 27, 2010.

JUDICIAL DECISIONS

Liability of warehouseman delivering to true owner.

- Paramount title of "true owner" is not cut off by unauthorized bailment or issuance of documents of title, and the true owner may replevy them from warehouseman or from anyone else who has them. If warehouseman delivers the goods to true owner, the warehouseman is relieved from liability even to a good faith purchaser of negotiable receipts and, a fortiori, from liability to any other sort of receipt holder. Citizens Bank & Trust Co. v. SLT Whse. Co., 368 F. Supp. 1042 (M.D. Ga. 1974), aff'd, 515 F.2d 1382 (5th Cir. 1975).

RESEARCH REFERENCES

Am. Jur. 2d.

- 13 Am. Jur. 2d, Carriers, § 474. 78 Am. Jur. 2d, Warehouses, § 201.

C.J.S.

- 13 C.J.S., Carriers, § 394. 80 C.J.S., Shipping, § 260 et seq. 93 C.J.S., Warehousemen and Safe Depositaries, § 41 et seq.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 7-404.

ALR.

- Character of bill of lading contemplated by a guaranty of payment of a draft with bill of lading attached, 13 A.L.R. 166.

Liability of warehouseman, and of surety on bond, in respect of collection and remittance of proceeds of sale of merchandise, 121 A.L.R. 1155.

PART 5 WAREHOUSE RECEIPTS AND BILLS OF LADING: NEGOTIATION AND TRANSFER


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