ROBERT L. EHRLICH, JR., Governor                              Ch. 95

7-503.

(A)     A DOCUMENT OF TITLE CONFERS NO RIGHT IN GOODS AGAINST A PERSON
THAT BEFORE ISSUANCE OF THE DOCUMENT HAD A LEGAL INTEREST OR A
PERFECTED SECURITY INTEREST IN THE GOODS AND DID NOT:

(1)     DELIVER OR ENTRUST THE GOODS OR ANY DOCUMENT OF TITLE
COVERING THE GOODS TO THE BAILOR OR THE BAILOR'S NOMINEE WITH:

(A)     ACTUAL OR APPARENT AUTHORITY TO SHIP, STORE, OR SELL;

(B)     POWER TO OBTAIN DELIVERY UNDER § 7-403; OR

(C)     POWER OF DISPOSITION UNDER § 2-403, § 2A-304(2), § 2A-305(2), §
9-320, OR § 9-321(C) OR OTHER STATUTE OR RULE OF LAW; OR

(2)      ACQUIESCE IN THE PROCUREMENT BY THE BAILOR OR ITS NOMINEE
OF ANY DOCUMENT.

(B)     TITLE TO GOODS BASED UPON AN UNACCEPTED DELIVERY ORDER IS
SUBJECT TO THE RIGHTS OF ANY PERSON TO WHICH A NEGOTIABLE WAREHOUSE
RECEIPT OR BILL OF LADING COVERING THE GOODS HAS BEEN DULY NEGOTIATED.
THAT TITLE MAY BE DEFEATED UNDER § 7-504 TO THE SAME EXTENT AS THE RIGHTS
OF THE ISSUER OR A TRANSFEREE FROM THE ISSUER

(C)     TITLE TO GOODS BASED UPON A BILL OF LADING ISSUED TO A FREIGHT
FORWARDER IS SUBJECT TO THE RIGHTS OF ANY PERSON TO WHICH A BILL ISSUED
BY THE FREIGHT FORWARDER IS DULY NEGOTIATED. HOWEVER, DELIVERY BY THE
CARRIER IN ACCORDANCE WITH SUBTITLE 4 PURSUANT TO ITS OWN BILL OF LADING
DISCHARGES THE CARRIER'S OBLIGATION TO DELIVER.

7-504.

(A)     A TRANSFEREE OF A DOCUMENT OF TITLE, WHETHER NEGOTIABLE OR
NONNEGOTIABLE, TO WHICH THE DOCUMENT HAS BEEN DELIVERED BUT NOT DULY
NEGOTIATED, ACQUIRES THE TITLE AND RIGHTS THAT ITS TRANSFEROR HAD OR
HAD ACTUAL AUTHORITY TO CONVEY.

(B)     IN THE CASE OF A TRANSFER OF A NONNEGOTIABLE DOCUMENT OF
TITLE, UNTIL BUT NOT AFTER THE BAILEE RECEIVES NOTICE OF THE TRANSFER,
THE RIGHTS OF THE TRANSFEREE MAY BE DEFEATED:

(1)      BY THOSE CREDITORS OF THE TRANSFEROR WHICH COULD TREAT
THE TRANSFER AS VOID UNDER § 2-402 OR § 2A-308;

(2)      BY A BUYER FROM THE TRANSFEROR IN ORDINARY COURSE OF
BUSINESS IF THE BAILEE HAS DELIVERED THE GOODS TO THE BUYER OR RECEIVED
NOTIFICATION OF THE BUYER'S RIGHTS;

(3)     BY A LESSEE FROM THE TRANSFEROR IN ORDINARY COURSE OF
BUSINESS IF THE BAILEE HAS DELIVERED THE GOODS TO THE LESSEE OR RECEIVED
NOTIFICATION OF THE LESSEE'S RIGHTS; OR

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