SECTIONS 7401-7404 - California Statutes

COMMERCIAL CODE

SECTION 7401-7404

7401. The obligations imposed by this division on an issuer apply
to a document of title even if:
(1) the document does not comply with the requirements of this
division or of any other statute, rule, or regulation regarding its
issuance, form, or content;
(2) the issuer violated laws regulating the conduct of its
business;
(3) the goods covered by the document were owned by the bailee
when the document was issued; or
(4) the person issuing the document is not a warehouse but the
document purports to be a warehouse receipt.

7402. A duplicate or any other document of title purporting to
cover goods already represented by an outstanding document of the
same issuer does not confer any right in the goods, except as
provided in the case of tangible bills of lading in a set of parts,
overissue of documents for fungible goods, substitutes for lost,
stolen, or destroyed documents, or substitute documents issued
pursuant to Section 7105. The issuer is liable for damages caused by
its overissue or failure to identify a duplicate document by a
conspicuous notation.

7403. (a) A bailee shall deliver the goods to a person entitled
under a document of title if the person complies with subdivisions
(b) and (c), unless and to the extent that the bailee establishes any
of the following:
(1) delivery of the goods to a person whose receipt was rightful
as against the claimant;
(2) damage to or delay, loss, or destruction of the goods for
which the bailee is not liable;
(3) previous sale or other disposition of the goods in lawful
enforcement of a lien or on a warehouse's lawful termination of
storage;
(4) the exercise by a seller of its right to stop delivery
pursuant to Section 2705 or by a lessor of its right to stop delivery
pursuant to Section 10526;
(5) a diversion, reconsignment, or other disposition pursuant to
Section 7303;
(6) release, satisfaction, or any other personal defense against
the claimant; or
(7) any other lawful excuse.
(b) A person claiming goods covered by a document of title shall
satisfy the bailee's lien if the bailee so requests or if the bailee
is prohibited by law from delivering the goods until the charges are
paid.
(c) Unless a person claiming the goods is a person against which
the document of title does not confer a right under subdivision (a)
of Section 7503:
(1) the person claiming under a document shall surrender
possession or control of any outstanding negotiable document covering
the goods for cancellation or indication of partial deliveries; and
(2) the bailee shall cancel the document or conspicuously indicate
in the document the partial delivery or the bailee is liable to any
person to which the document is duly negotiated.

7404. A bailee that in good faith has received goods and delivered
or otherwise disposed of the goods according to the terms of a
document of title or pursuant to this division 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.