§ 554.7504

554.7504 Rights acquired in absence of due negotiation — effect of diversion — stoppage of delivery. 1. A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires the title and rights that itstransferor had or had actual authority to convey. 2. In the case of a transfer of a nonnegotiable document of title, until but not after the bailee receives notice of the transfer, the rights of the transferee may be defeated: a. by those creditors of the transferor who could treat the transfer as void under section 554.2402 or 554.13308; 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 the buyer’s rights; c. by a lessee from the transferor in ordinary course of business if the bailee has delivered the goods to the lessee or received notification of the lessee’s rights; or d. as 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 nonnegotiable bill of lading which causes the bailee not to deliver the goods to

alings of the bailee with the transferor.3. A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the bailee not to deliver the goods to the consigneedefeats the consignee’s title to the goods if the goods have been delivered to a buyer inordinary course of business or a lessee in ordinary course of business and, in any event,defeats the consignee’s rights against the bailee. 4. Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under section 554.2705, or a lessor under section 554.13526, subject to the requirementsof due notification in those sections. A bailee that honors the seller’s or lessor’s instructionsis entitled to be indemnified by the seller or lessor against any resulting loss or expense. [S13, §3138-a41, -a42, -b31, -b32; C24, 27, 31, 35, 39, §8276, 8277, 9701, 9702, 9959, 9963; C46, 50, 54, 58, 62, §487.32, 487.33, 542.41, 542.42, 554.31, 554.35; C66, 71, 73, 75, 77, 79, 81,§554.7504] 2007 Acts, ch 30, §34, 45, 46Referred to in §554.7503 Sat Dec 23 01:58:00 2023 Iowa Code 2024, Section 554.7504 (24, 0)