MARVIN MANDEL, Governor

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(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
[subtitle] TITLE constitute the transaction a fraudulent
transfer or voidable preference.

2—403. Power to transfer; good faith purchase of goods;
"entrusting."

(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 dishonored, or

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

(d)   The delivery was procured through fraud
punishable as larcenous under the criminal law.

(2)    Any entrusting of possession of goods to a
merchant who deals in goods of that kind gives him 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 [subtitle] TITLE on
secured transactions ([subtitle] TITLE 9), bulk transfers
([subtitle] TITLE 6) and documents of title ([subtitle]
TITLE 7) .

SUBTITLE 5. PERFORMANCE.