HARRY HUGHES, Governor                                       2711

Annotated Code of Maryland

(1985 Replacement Volume and 1985 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Commercial Law

1-201.

Subject to additional definitions contained in the
subsequent titles of this article which are applicable to
specific titles or subtitles thereof, and unless the context
otherwise requires, in Titles 1 through 10 of this article:

(5) "Bearer" means the person in possession of an
instrument, document of title, or CERTIFICATED security payable
to bearer or indorsed in blank.

(14) "Delivery" with respect to instruments, documents of
title, chattel paper or CERTIFICATED securities means voluntary
transfer of possession.

(20) "Holder" means a person who is in possession of a
document of title or an instrument or [an] A CERTIFICATED
investment security drawn, issued or indorsed to him or [to] his
order or to bearer or in blank.

5-114.

(2) Unless otherwise agreed when documents appear on their
face to comply with the terms of a credit but a required document
does not in fact conform to the warranties made on negotiation or
transfer of a document of title (§ 7-507) or of a CERTIFICATED
security (§ 8-306) or is forged or fraudulent or there is fraud
in the transaction:

(a) The issuer must honor the draft or demand for
payment if honor is demanded by a negotiating bank or other
holder of the draft or demand which has taken the draft or demand
under the credit and under circumstances which would make it a
holder in due course (§ 3-302) and in an appropriate case would
make it a person to whom a document of title has been duly
negotiated (§ 7-502) or a bona fide purchaser of a CERTIFICATED
security (§ 8-302); and

(b) In all other cases as against its customer, an issuer
acting in good faith may honor the draft or demand for payment
despite notification from the customer of fraud, forgery or other
defect not apparent on the face of the documents but a court of
appropriate jurisdiction may enjoin such honor.

8-101.