CA Com Code Section 7507

If a person negotiates or delivers a document of title for value, otherwise than as a mere intermediary under Section 7508, unless otherwise agreed, the transferor, in addition to any warranty made in selling or leasing the goods, warrants to its immediate purchaser only that:

(1)

the document is genuine;

(2)

the transferor does not have knowledge of any fact that would impair the document’s validity or worth; and

(3)

the negotiation or delivery is rightful and fully effective with respect to the title to the document and the goods it represents.