11. Negotiability of Bills of Lading.—
In mercantile law certain things have the quality of negotiability, that is, they are like money in that the title may pass from hand to hand by delivery without the necessity of inquiry into the antecedent ownership. Promissory notes, checks and drafts, payable to order or bearer, or so endorsed, are negotiable and the holder's title is not affected by any representations or transactions between the original parties or prior holders, without his knowledge. Many attempts have been made to give bills of lading the full quality of negotiability, but the courts have not favored the effort. Bills of lading are said to be quasi-negotiable. They may be transferred by endorsement and delivery and thereby pass the same title to the goods which they represent as if the goods themselves were handled. But prior to the passage of the Federal Bill of Lading Act, above mentioned, the transferee took only the title of his transferor, subject to all rights which may have been asserted against him. The bill of lading remained a mere substitute for the goods and the purchaser of a stolen bill, for example, acquired no more title than he would in the case of stolen goods. The latest legislation designed to confer upon bills of lading the quality of negotiable paper is that contained in § 22 of the Bill of Lading Act, which is as follows:
That if a bill of lading has been issued by a carrier or on his behalf by an agent or employee the scope of whose actual or apparent authority includes the receiving of goods and issuing bills of lading therefor for transportation in commerce among the several States and with foreign nations, the carrier shall be liable to (a) the owner of goods covered by a straight bill subject to existing rights of stoppage in transition or (b) the holder of an order bill, who has given value in good faith, relying upon the description therein of the goods, for damages caused by the non-receipt by the carrier of all or part of the goods or their failure to correspond with the description thereof in the bill at the time of the issue.
This appears to protect a person to whom a bill of lading has been negotiated for value and who took it in good faith, relying upon representations contained in it. A word of caution, however, is necessary. The provision is recent and has not been construed by the highest courts in a case involving a shipment by sea. The disposition of the courts has been to construe such legislation strictly. The act was intended to reverse the rule laid down in a line of decisions consistently adhered to by the Supreme Court down to the time of its passage. There can be no little doubt that any one seeking to maintain an action under § 22 of the act would have to bring himself strictly within the description of persons embraced in items (a) or (b) contained in the section.