8.7-502 - Rights acquired by due negotiation.
§ 8.7-502. Rights acquired by due negotiation.
(1) Subject to §§ 8.7-205 and 8.7-503, a holder to whom a negotiable documenthas been duly negotiated acquires thereby:
(a) title to the document;
(b) title to the goods;
(c) all rights accruing under the law of agency or estoppel, including rightsto goods delivered to the bailee after the document was issued; and
(d) the direct obligation of the issuer to hold or deliver the goodsaccording to the terms of the document free of any defense or claim by himexcept those arising under the terms of the document or under this title. Inthe case of a delivery order the bailee's obligation accrues only uponacceptance and the obligation acquired by the holder is that the issuer andany endorser will procure the acceptance of the bailee.
(2) Subject to § 8.7-503, title and rights so acquired are not defeated byany stoppage of the goods represented by the document or by surrender of suchgoods by the bailee, and are not impaired even though (a) the negotiation orany prior negotiation constituted a breach of duty, (b) any person has beendeprived of possession of a negotiable tangible document or control of anegotiable electronic document by misrepresentation, fraud, accident,mistake, duress, loss, theft or conversion, or (c) a previous sale or othertransfer 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.)