§ 7-503 — Document of Title to Goods Defeated in Certain Cases

Section 7--503. Document of Title to Goods Defeated in Certain Cases.\n (a) A document of title confers no right in goods against a person\nthat before issuance of the document had a legal interest or a perfected\nsecurity interest in the goods and that did not:\n (1) deliver or entrust the goods or any document of title covering the\ngoods to the bailor or the bailor's nominee with:\n (A) actual or apparent authority to ship, store, or sell;\n (B) power to obtain delivery under Section 7--403; or\n (C) power of disposition under Section 2--403, 2-A--304(2),\n2-A--305(2), 9--320, or 9--321(c) or other statute or rule of law; or\n (2) acquiesce in the procurement by the bailor or its nominee of any\ndocument.\n (b) Title to goods based upon an unaccepted delivery order is subject\nto the rights of any person to which a negotiable warehouse receipt or\nbill of lading covering the goods has been duly negotiated. That title\nmay be defeated under Section 7--504 to the same extent as the rights of\nthe issuer or a transferee from the issuer.\n (c) Title to goods based upon a bill of lading issued to a freight\nforwarder is subject to the rights of any person to which a bill issued\nby the freight forwarder is duly negotiated. However, delivery by the\ncarrier in accordance with Part 4 of this article pursuant to its own\nbill of lading discharges the carrier's obligation to deliver.\n