South Dakota § 57A-7-504 Rights acquired in absence of due negotiation--Effect of diversion--Stoppage of delivery.

South Dakota Statutes

§ 57A-7-504 — Rights acquired in absence of due negotiation--Effect of diversion--Stoppage of delivery.

South Dakota § 57A-7-504

Title 57AUNIFORM COMMERCIAL CODE

Ch. 57A-6DOCUMENTS OF TITLE

This text of South Dakota § 57A-7-504 (Rights acquired in absence of due negotiation--Effect of diversion--Stoppage of delivery.) is published on Counsel Stack Legal Research, covering South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

S.D. Codified Laws § 57A-7-504 (2026).

Text

(a)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 its transferor had or had actual authority to convey.

(b)In the case 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:

(1)By those creditors of the transferor that could treat the transfer as void under § 57A-2-402 or 57-2A-308;

(2)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;

(3)By a lessee from the transferor in ordinary course of business if the bailee has delivered the goods to the lessee

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(a) 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 its transferor had or had actual authority to convey. (b) In the case 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: (1) By those creditors of the transferor that could treat the transfer as void under § 57A-2-402 or 57-2A-308; (2) 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; (3) 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 (4) As against the bailee, by good faith dealings of the bailee with the transferor. (c) 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 consignee defeats the consignee's title to the goods if the goods have been delivered to a buyer in ordinary course of business or a lessee in ordinary course of business and in any event defeats the consignee's rights against the bailee. (d) Delivery of the goods pursuant to a nonnegotiable document of title may be stopped by a seller under § 57A-2-705 or a lessor under § 57A-2A-526 , subject to the requirements of due notification in those sections. A bailee honoring the seller's or lessor's instructions is entitled to be indemnified by the seller or lessor against any resulting loss or expense.