South Carolina Code 36-7-504. Rights acquired in the absence of due negotiation; effect of diversion; seller’s stoppage of delivery
(b) 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:
Terms Used In South Carolina Code 36-7-504
- Bailee: means the person who by a warehouse receipt, bill of lading or other document of title acknowledges possession of goods and contracts to deliver them. See South Carolina Code 36-7-102
- Consignee: means the person named in a bill of lading to whom or to whose order the bill promises delivery. See South Carolina Code 36-7-102
- Consignor: means the person named in a bill of lading as the person from whom the goods have been received for shipment. See South Carolina Code 36-7-102
- Document: means document of title as defined in the general definitions in Chapter 1 of this title. See South Carolina Code 36-7-102
- Goods: means all things that are treated as movable for the purposes of a contract for storage or transportation. See South Carolina Code 36-7-102
(1) by those creditors of the transferor which could treat the transfer as void under § 36-2-402 or § 36-2A-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 that causes the bailee not to deliver 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 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 may be stopped by a seller under § 36-2-705 or a lessor under § 36-2A-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.