MARVIN MANDEL, Governor

239

but not after the bailee receives notification of the
transfer, the rights of the transferee may be defeated

(a)   By those creditors of the transferor who
could treat the sale as void under § 2—402; or

(b)     By a buyer from the transferor in
ordinary course of business if the bailee has delivered
the goods to the buyer or received notification of his
rights; or

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

(3)     A diversion or other change of shipping
instructions by the consignor in a non—negotiable bill of
lading which causes the bailee not to deliver to the
consignee defeats the consignee's title to the goods if
they have been delivered to a buyer in ordinary course of
business and in any event defeats the consignee's rights
against the bailee.

(4)    Delivery pursuant to a non—negotiable document
may be stopped by a seller under § 2-705, and subject to
the requirement of due notification there provided. A
bailee honoring the seller's instructions is entitled to
be indemnified by the seller against any resulting loss
or expense.

7—505. Indorser not a guarantor for other parties.

The indorsement of a document of title issued by a
bailee does not make the indorser liable for any default
by the bailee or by previous indorsers.

7—506. Delivery without indorsement; right to compel
indorsement.

The transferee of a negotiable document of title has
a specifically enforceable right to have his transferor
supply any necessary indorsement but the transfer becomes
a negotiation only as of the time the indorsement is
supplied.

7—507. Warranties on negotiation or transfer of receipt
or bill.

Where a person negotiates or transfers a document of
title for value otherwise than as a mere intermediary
under the next following section, then unless otherwise
agreed he warrants to his immediate purchaser only in
addition to any warranty made in selling the goods

(a) That the document is genuine; and