J. MILLARD TAWES, Governor                        813

possession by the seller is fraudulent under any rule of law of the
state where the goods are situated, except that retention of possession
in good faith and current course of trade by a merchant-seller for a
commercially reasonable time after a sale or identification is not
fraudulent.

(3) Nothing in this Sub-title shall be deemed to impair the rights
of creditors of the seller

(a)  under the provisions of the Sub-title on Secured Transactions
(Sub-title 9); or

(b)  where identification to the contract or delivery is made not in
current course of trade but in satisfaction of or as security for a
pre-existing claim for money, security or the like and is made under
circumstances which under any rule of law of the state where the
goods are situated would apart from this Sub-title constitute the
transaction a fraudulent transfer or voidable preference.

2—403. Power to Transfer; Good Faith Purchase of Goods; "En-
trusting."

(1)  A purchaser of goods acquires all title which his transferor
had or had power to transfer except that a purchaser of a limited
interest acquires rights only to the extent of the interest purchased.
A person with voidable title has power to transfer a good title to a,
good faith purchaser for value. When goods have been delivered
under a transaction of purchase the purchaser has such power even
though

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

(b)  the delivery was in exchange for a check which is later dis-
honored, or

(c)  it was agreed that the transaction was to be a "cash sale" or

(d)  the delivery was procured through fraud punishable as lar-
cenous under the criminal law.

(2)  Any entrusting of possession of goods to a merchant who deals
in goods of that kind gives Mm power to transfer all rights of the
entruster to a buyer in ordinary course of business.

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

(4) The rights of other purchasers of goods and of lien creditors
are governed by the Sub-title on Secured Transactions (Sub-title 9),
Bulk Transfers (Sub-title 6) and Documents of Title (Sub-title 7).

Part 5
Performance

2—501. Insurable Interest in Goods; Manner of Identification of
Goods.

(1) The buyer obtains a special property and an insurable interest