2006 New York Code - Negotiation And Transfer

 
  Section 7--503. Document of Title to Goods Defeated in Certain Cases.
    (1) A document of title confers no right in goods against a person who
  before  issuance  of  the  document  had a legal interest or a perfected
  security interest in them and who neither
         (a) delivered or entrusted them or any document of title covering
             them to the bailor or his nominee  with  actual  or  apparent
             authority  to  ship,  store  or  sell or with power to obtain
             delivery under this Article (Section 7--403) or with power of
             disposition under this Act (Sections 2--403  and  9--320)  or
             other statute or rule of law; nor
         (b) acquiesced in the procurement by the bailor or his nominee of
             any document of title.
    (2)  Title to goods based upon an unaccepted delivery order is subject
  to the rights of anyone to whom a negotiable warehouse receipt  or  bill
  of  lading covering the goods has been duly negotiated. Such a title may
  be defeated under the next section 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 anyone to whom a  bill  issued  by
  the freight forwarder is duly negotiated; but 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.