§ 25-7-503. Document of title to goods defeated in certain cases. - North Carolina Statutes

§ 25‑7‑503. Document of title to goods defeated in certain cases.

(a)        A document of titleconfers no right in goods against a person that before issuance of the documenthad a legal interest or a perfected security interest in the goods and that didnot:

(1)        Deliver or entrustthe goods or any document of title covering the goods to the bailor or thebailor's nominee with:

a.         Actual or apparentauthority to ship, store, or sell;

b.         Power to obtaindelivery under G.S. 25‑7‑403; or

c.         Power of dispositionunder G.S. 25‑2‑403, 25‑2A‑304(2), 25‑2A‑305(2),25‑9‑320, or 25‑9‑321(c) or other statute or rule oflaw; or

(2)        Acquiesce in theprocurement by the bailor or its nominee of any document.

(b)        Title to goodsbased upon an unaccepted delivery order is subject to the rights of any personto whom a negotiable warehouse receipt or bill of lading covering the goods hasbeen duly negotiated. That title may be defeated under G.S. 25‑7‑504to the same extent as the rights of the issuer or a transferee from the issuer.

(c)        Title to goodsbased upon a bill of lading issued to a freight forwarder is subject to therights of any person to which a bill issued by the freight forwarder is dulynegotiated. However, delivery by the carrier in accordance with Part 4 of thisArticle pursuant to its own bill of lading discharges the carrier's obligationto deliver. (1917,c. 37, s. 41; 1919, c. 65, s. 31; C.S., ss. 313, 4081; 1965, c. 700, s. 1; 2000‑169,s. 20; 2006‑112, s. 25.)