MARVIN MANDEL,

Governor

237

named person is delivered to his 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
established 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-negotiable document
neither Bakes 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 § 7—205 on fungible goods, a holder to whom
a negotiable document 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, 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
[subtitle] 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.

(2)    Subject to the following section, 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