§ 25-2-403. Power to transfer; good faith purchase of goods; "entrusting." - North Carolina Statutes

§ 25‑2‑403.  Powerto transfer; good faith purchase of goods; "entrusting."

(1)        A purchaser ofgoods acquires all title which his transferor had or had power to transferexcept that a purchaser of a limited interest acquires rights only to theextent of the interest purchased. A person with voidable title has power totransfer a good title to a good faith purchaser for value. When goods have beendelivered under a transaction of purchase the purchaser has such power eventhough

(a)        the transferor wasdeceived as to the identity of the purchaser, or

(b)        the delivery was inexchange for a check which is later dishonored, or

(c)        it was agreed thatthe transaction was to be a "cash sale," or

(d)        the delivery wasprocured through fraud punishable as larcenous under the criminal law.

(2)        Any entrusting ofpossession of goods to a merchant who deals in goods of that kind gives himpower to transfer all rights of the entruster to a buyer in ordinary course ofbusiness.

(3)        "Entrusting"includes any delivery and any acquiescence in retention of possessionregardless of any condition expressed between the parties to the delivery oracquiescence and regardless of whether the procurement of the entrusting or thepossessor's disposition of the goods have been such as to be larcenous underthe criminal law.

(4)        The rights of otherpurchasers of goods and of lien creditors are governed by the articles onsecured transactions (article 9) and documents of title (article 7). (1965, c. 700, s. 1; 2004‑190,s. 3.)