MARVIN MANDEL, Governor

369

EXCEPT AS PROVIDED BY SUBSECTION (B) OF THIS
SECTION, A CONSIGNEE ENTRUSTED WITH AND IN POSSESSION OF
A POSSESSORY DOCUMENT IS CONSIDERED THE TRUE OWNER OF THE
GOODS DESCRIBED IN THE DOCUMENT FOR THE PURPOSE OF ANY
CONTRACT WITH A THIRD PERSON FOR:

(1) THE SALE OR DISPOSAL OF THE GOODS; OR

(2) THE PLEDGE OR DEPOSIT OF THEM AS SECURITY
FOR ANY MONEY OR NEGOTIABLE INSTRUMENT ADVANCED OR GIVEN
ON THE FAITH OF THE POSSESSORY DOCUMENT.

(B) EXCEPTION.

A CONTRACT, PLEDGE,        OR DEPOSIT DESCRIBED IN

SUBSECTION (A) OF THIS SECTION   IS NOT VALID IF THE THIRD

PERSON HAS NOTICE THAT THE     CONSIGNEE IS NOT THE TRUE
OWNER OF THE GOODS.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 2, §3.

11-804. CONTRACT BETWEEN CONSIGNEE AND THIRD PERSON.

(A)   PAYMENT TO CONSIGNEE GOOD AGAINST OWNER.

EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS
SECTION, IF IN THE ORDINARY COURSE OF BUSINESS A CONTRACT
FOR SALE OF GOODS IS MADE BETWEEN A CONSIGNEE AND A THIRD
PERSON, THE CONTRACT AND ANY PAYMENT MADE IN THE ORDINARY
COURSE OF BUSINESS FOR THE GOODS UNDER THE CONTRACT IS
VALID AGAINST THE OWNER OF THE GOODS, EVEN IF THE THIRD
PERSON HAS NOTICE THAT THE SELLER OF THE GOODS IS A
CONSIGNEE.

(B)   EXCEPTION.

A CONTRACT OR PAYMENT DESCRIBED IN SUBSECTION (A) OF
THIS SECTION IS NOT VALID AGAINST THE OWNER OF THE GOODS
IF THE THIRD PERSON HAS NOTICE THAT THE SELLER IS NOT
AUTHORIZED TO SELL THE GOODS OR TO RECEIVE PAYMENTS FOR
THEM, AS THE CASE MAY BE.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 2, §4.

11-805. DEPOSIT OR PLEDGE WITH THIRD PERSON.

(A) DEPOSIT OF PLEDGE BY CONSIGNEE.

EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS
SECTION, IF A THIRD PERSON TAKES GOODS OF A POSSESSORY
DOCUMENT IN DEPOSIT OR PLEDGE AS SECURITY FOR A
PREEXISTING DEBT OR DEMAND FROM ANY OTHER PERSON