Short answer. Two rights. First, title to the goods — both the title the person who negotiated the document could pass and the title of the person to whose order the goods were deliverable. Second, a direct obligation from the warehouseman or carrier holding the goods, as if that bailee had contracted with the holder personally.
What the law says
The direct obligation of the bailee issuing the document to hold possession of the goods for him according to the terms of the document as fully as if such bailee had contracted directly with him.
Civil Code, Article 1513 — Rights of a Holder by Due Negotiation. Read the full provision →
What a document of title actually is
A negotiable document of title — a warehouse receipt or a bill of lading made out to order or to bearer — is a piece of paper that stands in for goods sitting in someone else's custody. The custodian is the bailee: the warehouse operator or the carrier. Because the paper represents the goods, businesses can sell, pledge and finance the goods by transferring the paper, without anyone moving a crate. Article 1513 is the provision that makes that commercially safe, by telling a person who takes the document what he actually gets.
The title you receive
The Code gives the holder a doubled-up title. He acquires the title the person negotiating the document had or had the ability to convey to a purchaser in good faith for value, and also the title of the person to whose order the goods were to be delivered under the document's own terms. That second limb matters: it lets a holder take clean title even where the immediate negotiator's own position was shaky, so long as the person named in the document could have conveyed good title. The purpose is to make the document trustworthy enough that a bank or a buyer can rely on it without auditing the whole chain of transfers behind it.
The bailee owes you directly
The second right is often the more practical one. The warehouse or carrier becomes obliged to hold the goods for the holder as fully as if such bailee had contracted directly with him. The holder therefore does not have to sue the person he bought from, get an assignment, or prove privity with the depositor. He presents the document and demands the goods on its terms. That directness is what makes documents of title bankable — a lender taking the document as security knows it can reach the goods itself, not merely a claim against a borrower who may be insolvent.
The limits — "due" negotiation is doing real work
These rights belong only to a holder by due negotiation. A document transferred outside the ordinary course of business, or taken by someone who is not acting in good faith or gives no value, does not carry them; the transferee steps into whatever position his transferor actually had, defects and all. The rights are also measured by the terms of the document, so unpaid storage charges, liens noted on the face of the receipt and conditions in a bill of lading still bind the holder. Nor does the article guarantee the goods exist or match their description. Anyone financing against documents should have counsel check the endorsements and the face of the paper before releasing money.