§80105 Title and Rights Affected by Negotiation

Summary

When a negotiable bill of lading is transferred to someone, that person gets legal title to the goods if the person who transferred it could have lawfully sold those goods to a good-faith buyer who paid for them, and if the consignor and consignee could have done the same. The carrier that issued the bill then must hold and deliver the goods to the new holder under the bill’s terms as if the bill had been made out to that person. A good-faith buyer who paid for the bill has stronger rights to the goods than a seller’s lien or a seller’s right to stop shipment, even if the carrier knew about the seller’s claim before or after the transfer. The carrier may deliver the goods to an unpaid seller only if the bill is surrendered and cancelled. Aside from that rule, this law does not reduce the rights of a mortgagee or lien holder who had a mortgage or lien on goods when a buyer paid in good faith and had the goods right before the carrier took them.