400.7-504. Rights acquired in the absence of due negotiation--effect of diversion--seller's stoppage of delivery. - Missouri Statutes

Rights acquired in the absence of due negotiation--effect ofdiversion--seller's stoppage of delivery.

400.7-504. (1) A transferee of a document, whethernegotiable or nonnegotiable, to whom the document has beendelivered but not duly negotiated, acquires the title and rightswhich his transferor had or had actual authority to convey.

(2) In the case of a nonnegotiable document, until but notafter the bailee receives notification of the transfer, therights of the transferee may be defeated

(a) by those creditors of the transferor who could treat thesale as void under section 400.2-402; or

(b) by a buyer from the transferor in ordinary course ofbusiness if the bailee has delivered the goods to the buyer orreceived notification of his rights; or

(c) as against the bailee by good faith dealings of thebailee with the transferor.

(3) A diversion or other change of shipping instructions bythe consignor in a nonnegotiable bill of lading which causes thebailee not to deliver to the consignee defeats the consignee'stitle to the goods if they have been delivered to a buyer inordinary course of business and in any event defeats theconsignee's rights against the bailee.

(4) Delivery pursuant to a nonnegotiable document may bestopped by a seller under section 400.2-705, and subject to therequirement of due notification there provided. A baileehonoring the seller's instructions is entitled to be indemnifiedby the seller against any resulting loss or expense.

(L. 1963 p. 503 § 7-504)