900                                LAWS OF MARYLAND                        [CH. 538

consignor in a non-negotiable bill of lading which causes the bailee
not to deliver to the consignee defeats the consignee's title to the
goods if they have been delivered to a buyer in ordinary course of
business and in any event defeats the consignee's rights against the
bailee.

(4) Delivery pursuant to a non-negotiable document may be
stopped by a seller under Section 2—705, and subject to the require-
ment of due notification there provided. A bailee honoring the
seller's instructions is entitled to be indemnified by the seller against
any resulting loss or expense.

7—505. Indorser Not a Guarantor for Other Parties.

The indorsement of a document of title issued by a bailee does not
make the indorser liable for any default by the bailee or by previous
indorsers.

7—506. Delivery Without Indorsement; Right to Compel Indorse-
ment.

The transferee of a negotiable document of title has a specifically
enforceable right to have his transferor supply any necessary in-
dorsement but the transfer becomes a negotiation only as of the time
the indorsement is supplied.

7—507. Warranties on Negotiation or Transfer of Receipt or Bill.

Where a person negotiates or transfers a document of title for
value otherwise than as a mere intermediary under the next follow-
ing section, then unless otherwise agreed he warrants to his imme-
diate purchaser only in addition to any warranty made in selling the
goods

(a)  that the document is genuine; and

(b)  that he has no knowledge of any fact which would impair its
validity or worth; and

(c)  that his negotiation or transfer is rightful and fully effective
with respect to the title to the document and the goods it represents.

7—508. Warranties of Collecting Bank as to Documents.

A collecting bank or other intermediary known to be entrusted
with documents on behalf of another or with collection of a draft
or other claim against delivery of documents warrants by such de-
livery of the documents only its own good faith and authority. This
rule applies even though the intermediary has purchased or made
advances against the claim or draft to be collected.

7—509. Receipt or Bill: When Adequate Compliance With Commer-
cial Contract.

The question whether a document is adequate to fulfill the obliga-
tions of a contract for sale or the conditions of a credit is governed
by the Sub-titles on Sales (Sub-title 2) and on Letters of Credit (Sub-
title 5).