(a) 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:

Terms Used In California Commercial Code 7503

  • Bill of lading: means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods. See California Commercial Code 1201
  • Carrier: means a person that issues a bill of lading. See California Commercial Code 7102
  • Delivery order: means a record that contains an order to deliver goods directed to a warehouse, carrier, or other person that in the ordinary course of business issues warehouse receipts or bills of lading. See California Commercial Code 7102
  • Document of title: includes a bill of lading, dock warrant, dock receipt, warehouse receipt, or order for the delivery of goods, and also any other document which in the regular course of business or financing is treated as adequately evidencing that the person in possession of it is entitled to receive, hold, and dispose of the document and the goods it covers. See California Commercial Code 1201
  • Goods: means all things that are treated as movable for the purposes of a contract for storage or transportation. See California Commercial Code 7102
  • Issuer: means a bailee that issues a document of title or, in the case of an unaccepted delivery order, the person that orders the possessor of goods to deliver. See California Commercial Code 7102
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See California Commercial Code 1201
  • Right: includes remedy. See California Commercial Code 1201
  • Security interest: includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Division 9 (commencing with Section 9101). See California Commercial Code 1201
  • Statute: A law passed by a legislature.
  • Warehouse: means a person engaged in the business of storing goods for hire. See California Commercial Code 7102

(A) actual or apparent authority to ship, store, or sell;

(B) power to obtain delivery under Section 7403; or

(C) power of disposition under Section 2403 or 9320 or subdivision (c) of Section 9321 or subdivision (b) of Section 10304 or subdivision (b) of Section 10305 or other statute or rule of law; or

(2) acquiesce in the procurement by the bailor or its nominee of any document.

(b) 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 Section 7504 to the same extent as the rights of the issuer or a transferee from the issuer.

(c) 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 Chapter 4 (commencing with Section 7401) pursuant to its own bill of lading discharges the carrier’s obligation to deliver.

(Repealed and added by Stats. 2006, Ch. 254, Sec. 49. Effective January 1, 2007.)

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