Document of Title to Goods Defeated in Certain Cases

  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: Negotiation and Transfer
  6. Document of Title to Goods Defeated in Certain Cases

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  1. A document of title confers no right in goods against a person that before issuance of the document had a legal interest or a perfected security interest in the goods and that did not:
    1. Deliver or entrust the goods or any document of title covering the goods to the bailor or the bailor's nominee with:
      1. Actual or apparent authority to ship, store, or sell;
      2. Power to obtain delivery under Code Section 11-7-403; or
      3. Power of disposition under Code Section 11-2-403, subsection (2) of Code Section 11-2A-304, subsection (2) of Code Section 11-2A-305, Code Section 11-9-320, or subsection (c) of Code Section 11-9-321 or other statute or rule of law; or
    2. Acquiesce in the procurement by the bailor or its nominee of any document.
  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 Code Section 11-7-504 to the same extent as the rights of the issuer or a transferee from the issuer.
  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 Part 4 of this article pursuant to its own bill of lading discharges the carrier's obligation to deliver.

(Code 1933, § 109A-7 - 503, enacted by Ga. L. 1962, p. 156, § 1; Ga. L. 2001, p. 362, § 16; Ga. L. 2010, p. 481, § 1-1/HB 451.)

The 2001 amendment, effective July 1, 2001, in subsection (1), substituted "the bailor's nominee" for "his nominee" in paragraphs (a) and (b) and substituted "Code Section 11-9-320" for "Code Section 11-9-307" in paragraph (a).

The 2010 amendment, effective May 27, 2010, redesignated former subsections (1) through (3) as present subsections (a) through (c), respectively; rewrote present subsection (a); in present subsection (b), substituted "any person to which" for "anyone to whom" in the middle of the first sentence and substituted "That title" for "Such a title" at the beginning of the second sentence; and, in present subsection (c), substituted "any person to which" for "anyone to whom" and substituted "negotiated. However," for "negotiated; but" in the middle. 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

Transferees of nonnegotiable documents.

- O.C.G.A. § 11-7-503 does not apply to protect transferees of nonnegotiable documents. 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.

- 15A Am. Jur. 2d, Commercial Code, § 63. 69 Am. Jur. 2d, Secured Transactions, § 511. 78 Am. Jur. 2d, Warehouses, §§ 75, 77, 78, 217, 218.

C.J.S.

- 13 C.J.S., Carriers, § 394. 80 C.J.S., Shipping, § 256 et seq. 93 C.J.S., Warehousemen and Safe Depositaries, § 32 et seq.

U.L.A.

- Uniform Commercial Code (U.L.A.) § 7-503.


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