§ 24-4-17-9 — Funds from sale of item on consignment as trust funds

(a) If an item is trust property under section 8
of this chapter when a retail merchant initially receives it, the item
remains trust property until the balance due the consignor from the sale
of the item is paid in full, even if the retail merchant directly or
indirectly purchases the item for the retail merchant's own account.
(b) If a retail merchant resells an item described in subsection (a) to
a bona fide purchaser before the consignor has been paid in full, the
item ceases to be trust property and the proceeds of the resale are trust
funds in the hands of the retail merchant for the benefit of the
consignor to the extent necessary to pay any balance due the consignor.
The trusteeship of the proceeds continues until the fiduciary obligation
of the retail merchant with respect to the transaction is discharged in
full.

Legislative History

As added by P.L.85-2009, SEC.2. Amended by P.L.1-2010, SEC.95.