Tex. Bus. & Com. Code Section 7.503
Document of Title to Goods Defeated in Certain Cases


(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 covering the goods to the bailor or the bailor’s nominee with actual or apparent authority to ship, store, or sell; with power to obtain delivery under Section 7.403 (Obligation of Warehouse or Carrier to Deliver; Excuse); or with power of disposition under Section 2.403, 2A.304 (Subsequent Lease of Goods by Lessor)(a)(2), 2A.305 (Sale or Sublease of Goods by Lessee)(a)(2), or 9.320 (Buyers of Goods) 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 7.504 (Rights Acquired in Absence of Due Negotiation; Effect of Diversion; Stoppage of Delivery) 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 Subchapter D pursuant to its own bill of lading discharges the carrier’s obligation to deliver.
Amended by Acts 1999, 76th Leg., ch. 414, Sec. 2.25, eff. July 1, 2001.
Amended by:
Acts 2005, 79th Leg., Ch. 122 (S.B. 1593), Sec. 1, eff. September 1, 2005.

Source: Section 7.503 — Document of Title to Goods Defeated in Certain Cases, https://statutes.­capitol.­texas.­gov/Docs/BC/htm/BC.­7.­htm#7.­503 (accessed Jun. 5, 2024).

7.101
Short Title
7.102
Definitions and Index of Definitions
7.103
Relation of Article to Treaty or Statute
7.104
Negotiable and Nonnegotiable Document of Title
7.105
Reissuance in Alternative Medium
7.106
Control of Electronic Document of Title
7.201
Person that May Issue a Warehouse Receipt
7.202
Form of Warehouse Receipt
7.203
Liability for Nonreceipt or Misdescription
7.204
Duty of Care
7.205
Title Under Warehouse Receipt Defeated in Certain Cases
7.206
Termination of Storage at Warehouse’s Option
7.207
Goods Must Be Kept Separate
7.208
Altered Warehouse Receipts
7.209
Lien of Warehouse
7.210
Enforcement of Warehouse’s Lien
7.302
Through Bills of Lading and Similar Documents of Title
7.303
Diversion
7.304
Tangible Bills of Lading in Set
7.305
Destination Bills
7.306
Altered Bills of Lading
7.307
Lien of Carrier
7.308
Enforcement of Carrier’s Lien
7.309
Duty of Care
7.401
Irregularities in Issue of Receipt or Bill or Conduct of Issuer
7.402
Duplicate Document of Title
7.403
Obligation of Warehouse or Carrier to Deliver
7.404
No Liability for Good Faith Delivery Pursuant to Document of Title
7.501
Form of Negotiation and Requirements of Due Negotiation
7.502
Rights Acquired by Due Negotiation
7.503
Document of Title to Goods Defeated in Certain Cases
7.504
Rights Acquired in Absence of Due Negotiation
7.505
Indorser Not Guarantor for Other Parties
7.506
Delivery Without Indorsement
7.507
Warranties on Negotiation or Delivery of Document of Title
7.508
Warranties of Collecting Bank as to Documents of Title
7.509
Adequate Compliance with Commercial Contract
7.601
Lost, Stolen, or Destroyed Documents of Title
7.602
Attachment of Goods Covered by Negotiable Document of Title
7.603
Conflicting Claims

Accessed:
Jun. 5, 2024

§ 7.503’s source at texas​.gov