898                                   LAWS OF MARYLAND

Part 5

Warehouse Receipts and Bills of Lading:
Negotiation and Transfer

7—501. Form of Negotiation and Requirements of "Due Negotia-
tion."

(1)  A negotiable document of title running to the order of a named
person is negotiated by his indorsement and delivery. After his in-
dorsement in blank or to bearer any person can negotiate it by
delivery alone.

(2)   (a) A negotiable document of title is also negotiated by de-
livery alone when by its original terms it runs to bearer;

(b) when a document running to the order of a named person is
delivered to him the effect is the same as if the document had been
negotiated.

(3)  Negotiation of a negotiable document of title after it has been
indorsed to a specified person requires indorsement by the special
indorsee as well as delivery.

(4) A negotiable document of title is "duly negotiated" when it
is negotiated in the manner stated in this section to a holder who
purchases it in good faith without notice of any defense against or
claim to it on the part of any person and for value, unless it is estab-
lished that the negotiation is not in the regular course of business
or financing or involves receiving the document in settlement or
payment of a money obligation.

(5)  Indorsement of a non-negotiatble document neither makes it
negotiable nor adds to the transferee's rights.

(6)    The naming in a negotiable bill of a person to be notified of
the arrival of the goods does not limit the negotiability of the bill
nor constitute notice to a purchaser thereof of any interest of such
person in the goods.

7—502. Rights Acquired by Due Negotiation.

(1) Subject to the following section and to the provisions of Sec-
tion 7—205 on fungible goods, a holder to whom a negotiable docu-
ment of title 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, includ-
ing 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 Sub-title. In the case of a delivery order the bailee's obligation
accrues only upon acceptance and the obligation acquired by the
holder is that the issuer and any indorser will procure the acceptance
of the bailee.