                                 CODE OF VIRGINIA

RIGHTS ACQUIRED BY DUE NEGOTIATION (§ 8.7-502)

1. Subject to §§ 8.7-205 and 8.7-503, a holder to whom a negotiable document
has 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 rights
   to goods delivered to the bailee after the document was issued; and

   d. the direct obligation of the issuer to hold or deliver the goods according
   to the terms of the document free of any defense or claim by him except those
   arising under the terms of the document or under this title. In the case of a
   delivery order the bailee&#8217;s obligation accrues only upon acceptance and
   the obligation acquired by the holder is that the issuer and any endorser will
   procure the acceptance of the bailee.

2. Subject to &#xA7; 8.7-503, title and rights so acquired are not defeated by
any stoppage of the goods represented by the document or by surrender of such
goods by the bailee, and are not impaired even though (a) the negotiation or any
prior negotiation constituted a breach of duty, (b) any person has been deprived
of possession of a negotiable tangible document or control of a negotiable
electronic document by misrepresentation, fraud, accident, mistake, duress,
loss, theft or conversion, or (c) a previous sale or other transfer of the goods
or document has been made to a third person.

HISTORY: Code 1950, §§ 61-44, 61-50 to 61-52; 1964, c. 219; 2004, c. 200.