(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:

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Terms Used In Alabama Code 7-7-503

  • Bailee: means a person that by a warehouse receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them. See Alabama Code 7-7-102
  • carrier: means a person that issues a bill of lading. See Alabama Code 7-7-102
  • 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 Alabama Code 7-7-102
  • Good faith: means honesty in fact in the conduct or transaction concerned. See Alabama Code 7-7-102
  • Goods: means all things that are treated as movable for the purposes of a contract for storage or transportation. See Alabama Code 7-7-102
  • 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 Alabama Code 7-7-102
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • 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 a corporation as well as a natural person. See Alabama Code 1-1-1
  • Statute: A law passed by a legislature.
  • Warehouse: means a person engaged in the business of storing goods for hire. See Alabama Code 7-7-102
(1) Deliver or entrust the goods or any document of title covering the goods to the bailor or the bailor’s nominee with:

(A) Actual or apparent authority to ship, store, or sell;
(B) Power to obtain delivery under Section bailee to deliver; excuse” class=”unlinked-ref” datatype=”S” sessionyear=”2020″ statecd=”AL” title=”7″>7-7-403; or
(C) Power of disposition under Section good faith purchase of goods; "entrusting."” class=”unlinked-ref” datatype=”S” sessionyear=”2020″ statecd=”AL” title=”7″>7-2-403, lease of goods by lessor” class=”unlinked-ref” datatype=”S” sessionyear=”2020″ statecd=”AL” title=”7″>7-2A-304(2), 7-2A-305(2), 7-9A-320, or 7-9A-321(c) 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 7-7-504 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 Part 4 pursuant to its own bill of lading discharges the carrier’s obligation to deliver.
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