§12A-7-504.

§12A-7-504.
   
   (1) A transferee of a document, whether negotiable or nonnegotiable,
   to whom the document has been delivered but not duly negotiated,
   acquires the title and rights which his transferor had or had actual
   authority to convey.
   
   (2) In the case of a nonnegotiable document, until 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 Section 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) 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 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 nonnegotiable document may be stopped by a
   seller under Section 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.