Virginia Code 8.7-502: Rights acquired by due negotiation
(1) Subject to §§ 8.7-205 and 8.7-503, a holder to whom a negotiable document has been duly negotiated acquires thereby:
Terms Used In Virginia Code 8.7-502
- Bailee: means the person who by a warehouse receipt, bill of lading or other document acknowledges possession of goods and contracts to deliver them. See Virginia Code 8.7-102
- Delivery order: means a record that contains an order to deliver goods directed to a warehouseman, carrier or other person who in the ordinary course of business issues warehouse receipts or bills of lading. See Virginia Code 8.7-102
- Document: means document of title as defined in the general definitions in Title 8. See Virginia Code 8.7-102
- Fraud: Intentional deception resulting in injury to another.
- Goods: means all things that are treated as movable for the purposes of a contract of storage or transportation. See Virginia Code 8.7-102
- Issuer: means a bailee who issues a document except that in relation to an unaccepted delivery order it means the person who orders the possessor of goods to deliver. See Virginia Code 8.7-102
- 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: includes any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or any other legal or commercial entity and any successor, representative, agent, agency, or instrumentality thereof. See Virginia Code 1-230
(a) title to the document;
(b) title to the goods;
(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
(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 him except those arising under the terms of the document or under this title. 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 endorser will procure the acceptance of the bailee.
(2) Subject to § 8.7-503, 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 (a) the negotiation or any prior negotiation constituted a breach of duty, (b) any person has been deprived of possession of a negotiable tangible document or control of a negotiable electronic document by misrepresentation, fraud, accident, mistake, duress, loss, theft or conversion, or (c) a previous sale or other transfer of the goods or document has been made to a third person.
Code 1950, §§ 61-44, 61-50 to 61-52; 1964, c. 219; 2004, c. 200.