§490:7-502  Rights acquired by due
negotiation.  (a)  Subject to sections 490:7-205 and 490:7-503, a holder to
which a negotiable document of title has been duly negotiated acquires thereby:



(1)  Title to the document;



(2)  Title to the goods;



(3)  All rights accruing under the law of agency or
estoppel, including rights to goods delivered to the bailee after the document
was issued; and



(4)  The direct obligation of the issuer to hold or
deliver the goods according to the terms of the document free of any defense or
claim by the issuer except those arising under the terms of the document or
under this article, but in the case of a delivery order, the bailee's
obligation accrues only upon the bailee's acceptance of the delivery order and
the obligation acquired by the holder is that the issuer and any indorser will
procure the acceptance of the bailee.



(b)  Subject to section 490:7-503, title and
rights acquired by due negotiation are not defeated by any stoppage of the
goods represented by the document of title or by surrender of the goods by the
bailee and are not impaired even if:



(1)  The due negotiation or any prior due negotiation
constituted a breach of duty;



(2)  Any person has been deprived of possession of a
negotiable tangible document or control of a negotiable electronic document by
misrepresentation, fraud, accident, mistake, duress, loss, theft, or
conversion; or



(3)  A previous sale or other transfer of the goods or
document has been made to a third person. [L 2004, c 163, pt of §1]