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Rights acquired by due negotiation - 13 Pa. Cons. Stat. § 7502

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     § 7502.  Rights acquired by due negotiation.
        (a)  General rule.--Subject to section 7205 (relating to
     title under warehouse receipt defeated in certain cases) on
     fungible goods and section 7503 (relating to document of title
     to goods defeated in certain cases), a holder to whom 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 him except those arising under the
        terms of the document or under this division. In the case of
        a delivery order the obligation of the bailee accrues only
        upon acceptance and the obligation acquired by the holder is
        that the issuer and any indorser will procure the acceptance
        of the bailee.
        (b)  Rights acquired unaffected by certain matters.--Subject
     to section 7503, title and rights so acquired are not defeated
     by any stoppage of the goods represented by the document or by
     surrender of such goods by the bailee, and are not impaired even
     though the negotiation or any prior negotiation constituted a
     breach of duty or even though any person has been deprived of
     possession of the document by misrepresentation, fraud,
     accident, mistake, duress, loss, theft or conversion, or even
     though a previous sale or other transfer of the goods or
     document has been made to a third person.

Last modified: November 27, 2007