(a) Except as provided in subsection (c), a warehouse receipt, bill of lading, or other document of title is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person.
(b) A document of title other than one described in subsection (a) is nonnegotiable. A bill of lading stating that the goods are consigned to a named person is not made negotiable by a provision that the goods are to be delivered only against an order in a record signed by the same or another named person.
(c) A document of title is nonnegotiable if, at the time it is issued, the document has a conspicuous legend, however expressed, that it is nonnegotiable.
HISTORY: 1962 Code Section 10.7-104; 1966 (54) 2716; 2014 Act No. 213 (S.343), Section 2, eff October 1, 2014.
OFFICIAL COMMENT
Prior Uniform Statutory Provision: Former Section 7-104.
Changes: Subsection (a) is revised to reflect modern style and trade practice. Subsection (b) is revised for style and medium neutrality. Subsection (c) is new.
Purposes:
1. This Article deals with a class of commercial paper representing commodities in storage or transportation. This "commodity paper" is to be distinguished from what might be called "money paper" dealt with in the Article of this Act on Commercial Paper (Article 3) and "investment paper" dealt with in the Article of this Act on Investment Securities (Article 8). The class of "commodity paper" is designated "document of title" following the terminology of the Uniform Sales Act Section 76. Section 1-201. The distinctions between negotiable and nonnegotiable documents in this section makes the most important subclassification employed in the Article, in that the holder of negotiable documents may acquire more rights than its transferor had (See Section 7-502). The former Section 7-104, which provided that a document of title was negotiable if it runs to a named person or assigns if such designation was recognized in overseas trade, has been deleted as not necessary in light of current commercial practice.
A document of title is negotiable only if it satisfies this section. "Deliverable on proper indorsement and surrender of this receipt" will not render a document negotiable. Bailees often include such provisions as a means of insuring return of nonnegotiable receipts for record purposes. Such language may be regarded as insistence by the bailee upon a particular kind of receipt in connection with delivery of the goods. Subsection (a) makes it clear that a document is not negotiable which provides for delivery to order or bearer only if written instructions to that effect are given by a named person. Either tangible or electronic documents of title may be negotiable if the document meets the requirement of this section.
2. Subsection (c) is derived from Section 3-104(d). Prior to issuance of the document of title, an issuer may stamp or otherwise provide by a notation on the document that it is nonnegotiable even if the document would otherwise comply with the requirement of subsection (a). Once issued as a negotiable document of title, the document cannot be changed from a negotiable document to a nonnegotiable document. A document of title that is nonnegotiable cannot be made negotiable by stamping or providing a notation that the document is negotiable. The only way to make a document of title negotiable is to comply with subsection (a). A negotiable document of title may fail to be duly negotiated if the negotiation does not comply with the requirements for "due negotiation" stated in Section 7-501.
Cross Reference: Sections 7-501 and 7-502.
Definitional Cross References:
"Bearer". Section 1-201.
"Bill of lading". Section 1-201.
"Delivery". Section 1-201.
"Document of title". Section 1-201.
"Person". Section 1-201.
"Sign". Section 7-102
"Warehouse receipt". Section 1-201.
Editor's Note
2014 Act No. 213, Section 51, provides as follows:
"SECTION 51. This act becomes effective on October 1, 2014. It applies to transactions entered into and events occurring after that date."
Structure South Carolina Code of Laws
Chapter 7 - Commercial Code - Warehouse Receipts, Bills Of Lading And Other Documents Of Title
Section 36-7-101. Short title.
Section 36-7-102. Definitions and index of definitions.
Section 36-7-103. Relation of chapter to treaty, statute, tariff, classification or regulation.
Section 36-7-105. Reissuance in alternative medium.
Section 36-7-106. Control of electronic document of title.
Section 36-7-201. Who may issue a warehouse receipt; storage under government bond.
Section 36-7-202. Form of warehouse receipt; essential terms; optional terms.
Section 36-7-203. Liability for nonreceipt or misdescription.
Section 36-7-204. Duty of care; contractual limitation of warehouse's liability.
Section 36-7-205. Title under warehouse receipt defeated in certain cases.
Section 36-7-206. Termination of storage at warehouse's option.
Section 36-7-207. Goods must be kept separate; fungible goods.
Section 36-7-208. Altered warehouse receipts.
Section 36-7-209. Lien of warehouse.
Section 36-7-210. Enforcement of warehouse's Lien.
Section 36-7-302. Through bills of lading and similar documents.
Section 36-7-303. Diversion; reconsignment; change of instructions.
Section 36-7-304. Tangible bills of lading in a set.
Section 36-7-305. Destination bills.
Section 36-7-306. Altered bills of lading.
Section 36-7-307. Lien of carrier.
Section 36-7-308. Enforcement of carrier's lien.
Section 36-7-309. Duty of care; contractual limitation of carrier's liability.
Section 36-7-401. Irregularities in issue of receipt or bill or conduct of issuer.
Section 36-7-402. Duplicate document of title; overissue.
Section 36-7-403. Obligation of bailee to deliver; excuse.
Section 36-7-404. No liability for good-faith delivery pursuant to document of title.
Section 36-7-501. Form of negotiation and requirements of "due negotiation".
Section 36-7-502. Rights acquired by due negotiation.
Section 36-7-503. Document of title to goods defeated in certain cases.
Section 36-7-505. Indorser not a guarantor for other parties.
Section 36-7-506. Delivery without indorsement; right to compel indorsement.
Section 36-7-507. Warranties on negotiation or delivery of document of title.
Section 36-7-508. Warranties of collecting bank as to documents of title.
Section 36-7-509. Adequate compliance with commercial contract.
Section 36-7-601. Lost, stolen, or destroyed documents of title.
Section 36-7-602. Judicial process against goods covered by negotiable document of title.