N.Y. Uniform Commercial Code Law § 7-503: Document of Title to Goods Defeated in Certain Cases

Section 7--503. Document of Title to Goods Defeated in Certain Cases.

(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 that 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 Section 7--403; or

(C) power of disposition under Section 2--403, 2-A--304(2),

2-A--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 Section 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 Part 4 of this article pursuant to its own

bill of lading discharges the carrier's obligation to deliver.