This Article appears only in New York and Ohio Acts

§330. Negotiable instruments given for patent rights.

§331. Negotiable instruments given for a speculative consideration.

§332. How negotiable bonds are made non-negotiable.

§330. Negotiable instruments given for patent rights. - A promissory note or other negotiable instrument, the consideration of which consists wholly or partly of the right to make, use or sell any invention claimed or represented by the vendor at the time of sale to be patented, must contain the words "given for a patent right" prominently and legibly written or printed on the face of such note or instrument above the signature thereto; and such note or instrument in the hands of any purchaser or holder is subject to the same defenses as in the hands of the original holder; but this section does not apply to a negotiable instrument given solely for the purchase price or the use of a patented article.

§331. Negotiable instruments for a speculative consideration. - If the consideration of a promissory note or other negotiable instrument consists in whole or in part of the purchase price of any farm product, at a price greater by at least four times than the fair market value of the same product at the time, in the locality, or of the membership and rights in an association, company or combination to produce or sell any farm product at a fictitious rate, or of a contract or bond to purchase or sell any farm product at a price greater by four times than the market value of the same product at the time in the locality, the words, "given for a speculative consideration," or other words clearly showing the nature to the consideration, must be prominently and legibly written or printed on the face of such note or instrument above the signature thereof; and such note or instrument, in the hands of any purchaser or holder, is subject to the same defenses as in the hands of the original owner or holder.

§332. How negotiable bonds are made non-negotiable. - The owner or holder of any corporate or municipal bond or obligation (except such as are designated to circulate as money, payable to bearer) heretofore or hereafter issued and payable in this State, but not registered in pursuance of any State law, may make such bond or obligation, or the interest coupon accompanying the same, non-negotiable, by subscribing his name to a statement indorsed thereon that such bond, obligation or coupon is his property; and thereon the principal sum therein mentioned is payable only to such owner or holder, or his legal representatives or assigns, unless such bond, obligation or coupon be transferred by indorsement in blank, or payable to bearer, or to order, with the addition of the assignor's place of residence.

Digest Of The Federal Bill Of Lading Act

Its Importance in Interstate and Foreign Commerce - Origin of Federal Bill of Lading Act Considered second only in commercial importance to the Federal Reserve Act is the Federal Bill of Lading Act, otherwise known as the Pomerene Bill, which came into effect the first day of January, 1917. With its passage, bills of lading were transformed from simple contracts of shipment into important negotiable instruments, and the conditions under which they may be issued, are fully prescribed. Previous to that date, the bill of lading, which is the documentary evidence of the shipment of goods from producer to consumer, afforded no security of any kind to the banker who advanced money thereon.

For a long time prior to the passage of the Pomerene bill, a continued want was felt for legislation which would transform the bill of lading into a negotiable instrument, thereby rendering it capable of being transferred in the same manner as a check or other commercial paper with its attendant advantages to the holder. The various commercial bodies of the country, principally, the Committee of the American Bankers Association, after an energetic campaign to bring about such legislation, were instrumental in having passed, by various States of the Union, from time to time, what is known as the "Uniform Bill of Lading Act", the purposes of which closely resemble the Pomerene bill. However, Acts known as the "Uniform Bill of Lading Act" enacted by the Legislatures of such States and adopted in whole or in part by some others, were found to be at variance with the requirements of a fundamentally sound document, and were far from uniform.

Importance Of Bill Of Lading Greatly Increased By Act

The Federal Bill of Lading Act, however, brought about a complete change in the bill of lading, which, as a receipt for goods delivered, represents ownership as well, and is the basis of acceptance in bills of exchange, both domestic and foreign.

Important Features Of The Federal Bill Of Lading Act

The Federal Bill of Lading Act contains the following important features:

1. Provision is made for a uniform bill of lading.

2. Bills of lading are made easily and safely negotiable.

3. The burden of responsibility is shifted from the bank to the carrier.

4. Fraudulent practices in connection with bills of lading are made criminal and punishment provided therefor.

Digest Of The Federal Bill Of Lading Act

A digest of this Act follows:

§1. Jurisdiction. - This Act exercises jurisdiction over bills of lading issued by any common carrier for the transportation of goods:

(a) Within any territory of the United States or the District of Columbia.

(b) From a State to a foreign country.

(c) From one State to another State.

(d) Between points in the same State through another State or through a foreign country.

§§2 and 3. Kinds of bills to be used. -

(a) Straight bill.

(b) Order bill.

A straight bill is one in which it is stated that the goods are consigned or destined to a specified person. Such bills are non-negotiable and must be so marked.

An order bill is one in which it is stated that the goods are consigned or destined to the order of any person named. Such bills are always negotiable. Any provision in an order bill to the effect that it is non-negotiable shall be void and shall not affect its negotiability unless made non-negotiable by the shipper in agreement in writing.

§4. Order bills not to be issued in part or sets. - Order bills may not be issued in parts or sets, except in the case of shipments to Alaska and Panama, and if so issued, the carrier will be held liable to anyone who purchases a part for value, in good faith, even though such purchase is made after delivery of the goods. The provisions contained in this Section, however, do not forbid the issuance of order bills in parts or sets for the transportation of goods to Alaska, Panama, Porto Rico, Philippines, Hawaii or other foreign countries.

§5. Duplicate necessary when more than one issued. - In the issuance of duplicate order bills for the transportation of goods to any place in the United States or on the continent of North America, excep. Alaska, and Panama, the word "duplicate" must be so marked plainly upon their face.

§6. Straight bill; how to be marked. - A straight bill shall have plainly upon its face by the carrier issuing it "non-negotiable" or "not negotiable."

§7. Effect of insertion of name of person to be notified. - The insertion of the name of a person to be notified of the arrival of the goods shall not limit the negotiability of order bills.

§8. Carrier compelled to make delivery in absence of lawful excuse. - A carrier in the absence of some lawful excuse, is bound to deliver goods upon a demand made by the consignee named in the bill for the goods (straight bill); or, if the bill is an order bill, by the holder thereof. In the latter case such a demand should be accompanied by:

(a) An offer to satisfy the carrier's lawful lien upon the goods.

(b) An offer to surrender the bill properly endorsed.

(c) A readiness and willingness to sign an acknowledgment for the delivery of the goods, and in case of the carrier's refusal or failure to deliver the goods in compliance with the demand by the consignee or holder of the bill, the burden of establishing the existence of a lawful excuse shall be upon the carrier.

§9. When carrier is justified in making delivery. - A carrier is justified in making delivery to:

(a) One who is a person lawfully entitled to the possession of the goods.

(b) A consignee named in a straight bill.

(c) A person possessing an order bill stating that the goods are to be delivered to his order, or which has been indorsed to him or in blank by the consignee.

§10. Liability of carrier when delivery made to person not entitled to goods. - That where a carrier delivers goods to one who is not lawfully entitled to the possession of them, the carrier shall be liable to anyone having a right of property or possession in the goods if he delivered the goods otherwise than as authorized by subdivisions (b) and (c) of the preceding section; and, though he delivered the goods as authorized by either of said subdivisions, he shall be so liable if prior to such delivery he

(a) Had been requested, by or on behalf of a person having a right of property or possession in the goods, not to make such delivery, or

(b) Had information at the time of the delivery that it was to a person not lawfully entitled to the possession of the goods.

Such request or information, to be effective within the meaning of this section, must be given to an officer or agent, of the carrier, the actual or apparent scope of whose duties includes action upon such a request or information, and must be given in time to enable the officer or agent to whom it is given, acting with reasonable diligence, to stop delivery of the goods.

§11. Liability of carrier arising out of failure to cancel order bill. -

A carrier will be held liable if it fails to cancel an order bill on delivery, except when compelled by legal process, and if such bill is later acquired for value and in good faith.

§12. Liability of carrier when making partial delivery. - A carrier will be held liable in cases of partial delivery, except when compelled by legal process or failure to take up and cancel the bill or mark the bill with a description of the partial delivery, or if such bill is later acquired for value and in good faith.

§13. Alterations, additions or erasures. - Any bill which is in any way altered, added to or erased, without authority of the carrier, will be void.

§14. When an order bill is lost, stolen or destroyed. - When a bill is lost, stolen or destroyed, a Court of competent jurisdiction may order the delivery of the goods upon satisfactory proof of such loss upon the giving of an indemnifying bond. In such a case the carrier's costs and counsel fees must be paid. Liability of the carrier is not avoided in case such an order bill has been negotiated for value without notice of delivery.

§15. Liability of carrier when bill marked "duplicate." - A bill marked "duplicate" makes the carrier liable to the extent only of declaring that it is a true copy of the original.

§16. When carrier is liable for non-delivery. - The carrier will be liable for non-delivery when the title has not been transferred by the consignee to carrier or when the carrier has no lien on the goods.

§15. When more than one claims title to goods. - When one or more persons claim title to the goods, the carrier may require all known claimants to interplead either as a defense to an action for non-delivery or as an original suit.

§18. When carrier not liable for non-delivery of goods. - A carrier is not liable for the non-delivery of goods if he has knowledge of some person other than the consignee or holder of the bill, who has a claim, and will be excused from liability for refusing to deliver the goods until he has had a reasonable time to ascertain the validity of the adverse claim.

§19. Carrier not liable for any other circumstances in non-delivery. - Under no other circumstances than those noted in the preceding section, can a carrier be held liable for non-delivery.

§20. Liability for quantity and quality of shipment. - When goods are loaded by a carrier, it shall count the package freight and ascertain the kind and quantity of bulk freight. Insertions in the bill that it is the shipper's weight, load and count will be held to be void.

§21. Liability of carrier in loading. - When goods are loaded by the shipper and the bill states that it is the shipper's weight, load and count, the carrier must ascertain the kind and quantity of goods, and is not liable for the improper loading or the misdescription of goods in the bill of lading. In the case of a carrier having facilities at hand and the shipment being in bulk and requests being made in writing, the shipper's weight, load and count may be verified by the carrier's agent. The shipper's weight shall then not be inserted in the bill.

§22. Liability of carrier when bill is issued by authorized agent. - When a bill is issued by an agent of actual or apparent authority, the carrier is liable to the owner of the goods covered in a straight bill or to the bona fide holder for value of an order bill, although the goods are not received by the carrier or are misdirected.

§23. Rights of debtors and creditors. - While goods are in possession of a carrier, they may not be attached by garnishment or otherwise unless a bill is first surrendered to the carrier or its negotiation is enjoined.

§24. When creditor is entitled to aid of courts against debtor. -A creditor, whose debtor is the owner of an order bill, shall be entitled to the aids of Courts of jurisdiction in attaching such bill.

§25. When lien on goods for payment of freight arises. - When an order bill is issued, a carrier has a lien on the goods for all transportation and delivery charges.

§26. When carrier not liable for non-delivery. - A carrier will not be held liable for non-delivery after the goods have been lawfully sold to satisfy the carrier's lien, and when goods have not been claimed or when goods are perishable or hazardous.

§§27, 28, 29 and 30. Negotiation and transfer of bills. - A bill may be negotiated:

1. By the delivery to an indorsee of an order bill, the indorsement of an order bill in such case being required to be made by a person to whose order the goods are deliverable.

2. Such indorsement may be in blank or to a specified person and subsequent indorsements must be in like manner.

3. The transference of bills may be accompanied with an express or implied agreement to transfer the title to the bill or to the goods represented thereby. A straight bill, however, cannot be negotiated free from existing equities.

4. An order bill may be negotiated by any person possessing same, if the bill requires the carrier to deliver goods to the order of such person or is in such form that it may be negotiated by delivery.

§§31 and 32. Rights under transfer and negotiation. - These Sections regulate the rights of persons and parties under transfer and negotiation of bills. A person to whom a bill has been negotiated acquires thereby such a title to the goods as the person negotiating the bill had or the consignee and consignor had. A person to whom a bill has been transferred but not negotiated acquires as against the transferor the title to the goods, and if it is a straight bill, such person has a right to notify the carrier and becomes direct obligee of the carrier's obligations. A transfer of the bill may be defeated by garnishment proceedings by a creditor by prior notification of the carrier, the notification being required to be made to a proper agent of the carrier and within a reasonable time.

§33. Where order bill is transferred for value by delivery. - Where an order bill is transferred for value by delivery, the transferee acquires a right against a transferor to compel him to indorse the bill, when such is essential for negotiation.

§§34, 35 and 36. Liability of person who negotiates or transfers a bill. - A person negotiating or transferring bills by indorsement, warrants that the bill is genuine; that he has a legal right to transfer it; that he knows of no fact which might impair the validity or worth of the bill, and that he has a right to transfer the title to the goods. The indorser of the bill is not liable for the obligations of prior indorsers or the carrier. A mortgagee, pledgee or holder demanding payment of a debt does not thereby warrant the genuineness of such bill held as security, or quantity or quality of goods.

§§37, 38, 39 and 40. Rights of holders of bills. - The validity of title is not impaired when received in good fatih, for value, even though negotiation was a breach of duty, or in the case of the owner having been deprived of such bill by fraud, accident, mistake, duress, loss, theft or conversion.

Negotiation in the case of a person who has sold, mortgaged or pledged goods which are in the carrier's possession or who has sold, mortgaged, or pledged the order bill, but continued in possession of same, is not considered to have been effected from the first purchaser to the last holder. The rights of a purchaser of an order bill in good faith and for value, to whom such bill has been negotiated, shall not be defeated by the seller's lien or right of stoppage in transitu, whether such negotiation be prior or subsequent to notification to the carrier of the seller's claim. The carrier shall not be obliged to deliver goods to an unpaid seller unless the bill is first surrendered for cancellation. Except as above noted, no right of a mortgagee or lien holder is limited as against a purchaser of a bill for value and in good faith.

§41. Forgeries, etc. - Forgeries are to be adjudged misdemeanors punishable by imprisonment not exceeding five years or by fine not exceeding five thousand dollars or both, where a person with intent to defraud, falsely makes, alters, forges, counterfeits, prints or photographs any bill of lading or publishes as genuine any such forged bill or aids in its forging.

§42. Definitions. - Section 42 defines the following:

"Action" includes counterclaim, set off and suit in equity. "Bill" means bill of lading governed by this Act. "Consignee" means the person named in the bill as the person to whom delivery of the goods is to be made.

"Consignor" means the person named in the bill as the person from whom the goods have been received for shipment.

"Goods" means merchandise or chattels in course of transportation or which have been or are about to be transported.

"Holder of a bill" means a person who has both actual possession of such bill and a right to property therein.

"Order" means an order by indorsement on the bill.

"Person" includes a corporation or partnership or two or more persons having a joint or common interest.

"To purchase" includes to take as mortgagee and to take as pledgee.

"State" includes any territory, district, insular possession or isthmian possession.

§§43 and 44. Effectiveness of Act. - The provisions of this Act do not apply to bills made and delivered prior to the taking effect thereof, and such section and part of this Act is independent and severable, whereby one part, if declared void, does not invalidate the remainder of the Act.

§45. Takes effect January 1st, 1917. - This Section prescribes that this Act shall take effect on January 1st, 1917.