New York Uniform Commercial Code Code § 7-205

Title Under Warehouse Receipt Defeated in Certain Cases
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Section 7--205. Title Under Warehouse Receipt Defeated in Certain Cases.\n  A buyer in ordinary course of business of fungible goods sold and\ndelivered by a warehouse that is also in the business of buying and\nselling such goods takes the goods free of any claim under a warehouse\nreceipt even if the receipt is negotiable and has been duly negotiated.\n

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