1. (a) A document of title confers no right in goods against a person that before issuance of the document had a legal interest or a perfected security interest in the goods and that did not:

   1. (1) Deliver or entrust the goods or any document of title covering the goods to the bailor or the bailor's nominee with:

      1. (A) Actual or apparent authority to ship, store, or sell;
      2. (B) power to obtain delivery under K.S.A. 2025 Supp. 84-7-403, and amendments thereto; or
      3. (C) power of disposition under K.S.A. 84-2-403, 84-2a-304(2), 84-2a-305(2), 84-9-320 or 84-9-321(c), and amendments thereto, or other statute or rule of law; or
   2. (2) acquiesce in the procurement by the bailor or its nominee of any document.
2. (b) Title to goods based upon an unaccepted delivery order is subject to the rights of any person to which a negotiable warehouse receipt or bill of lading covering the goods has been duly negotiated. That title may be defeated under K.S.A. 2025 Supp. 84-7-504, and amendments thereto, to the same extent as the rights of the issuer or a transferee from the issuer.
3. (c) Title to goods based upon a bill of lading issued to a freight forwarder is subject to the rights of any person to which a bill issued by the freight forwarder is duly negotiated. However, delivery by the carrier in accordance with part 4 of this article pursuant to its own bill of lading discharges the carrier's obligation to deliver.

L. 2007, ch. 90, § 32; July 1, 2008.