§ 41-07-32 — (7-503) Document of title to goods defeated in certain cases

1. 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 that
did not:
a. Deliver or entrust the goods or any document of title covering the goods to the
bailor or the bailor's nominee with:
(1) Actual or apparent authority to ship, store, or sell;
(2) Power to obtain delivery under section 41-07-28; or
(3) Power of disposition under section 41-02-48, subsection 2 of section
41-02.1-34, subsection 2 of section 41-02.1-35, section 41-09-40,
subsection 3 of section 41-09-41, or other statute or rule of law; or
b. Acquiesce in the procurement by the bailor or its nominee of any document.
2. 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 section 41-07-34 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 any person to which a bill issued by the freight forwarder is duly negotiated.
However, delivery by the carrier in accordance with part 4 pursuant to its own bill of
lading discharges the carrier's obligation to deliver.