238

LAWS OF MARYLAND

[Ch. 49

though the negotiation or any prior negotiation
constituted a breach of duty or even though any person
has been deprived of possession of the document by
misrepresentation, fraud, accident, mistake, duress,
loss, theft or conversion, or even though a previous sale
or other transfer of the goods or document has been made
to a third person.

7—503. Document of title to goods defeated in certain
cases.

(1)    A document of title confers no rights in goods
against a person who before issuance of the document had
a legal interest or a perfected security interest in then
and who neither

(a)     Delivered or entrusted then or any
document of title covering then to the bailor or his
nominee with actual or apparent authority to ship, store
or sell or with power to obtain delivery under this
[subtitle] TITLE (§ 7-403) or with power of disposition
under TITLES 2 AND 9 OF this article (§§ 2-403 and 9-307)
or other statute or rule of law; nor

(b)   Acquiesced in the procurement by the
bailor or his nominee of any document of title.

(2)     Title to goods based upon an unaccepted
delivery order is subject to the rights of anyone to whom
a negotiable warehouse receipt or bill of lading covering
the goods has been duly negotiated. Such a title may be
defeated under the next section to the same extent as the
rights of the issuer or a transferee from the issuer.

(3)   Title to goods based upon a bill of lading
issued to a freight forwarder is subject to the rights of
anyone to whom a bill issued by the freight forwarder
covering such goods has been duly negotiated; but
delivery by the carrier in accordance with [part]
SUBTITLE 4 of this [subtitle] TITLE pursuant to its own
bill of lading discharges the carrier's obligation to
deliver.

7—504. Rights acquired in the absence of due
negotiation; effect of diversion; seller's stoppage of
delivery.

(1)   A transferee of a document, whether negotiable
or non—negotiable, to whom the document has been
delivered but not duly negotiated, acquires the title and
rights which his transferor had or had actual authority
to convey.

(2)   In the case of a non—negotiable document, until