ORS 77.5040¹
Rights acquired in the absence of due negotiation
  • effect of diversion
  • seller’s stoppage of delivery

(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 the 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 ORS 72.4020 (Rights of seller's creditors against sold goods); 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 the buyer’s 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 ORS 72.7050 (Seller's stoppage of delivery in transit or otherwise), 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. [1961 c.726 §77.5040 (Rights acquired in the absence of due negotiation)]

1 Legislative Counsel Committee, CHAPTER 77—Warehouse Receipts, Bills of Lading and Other Documents of Title, https://­www.­oregonlegislature.­gov/­bills_laws/­Archive/­2007ors77.­pdf (2007) (last ac­cessed Feb. 12, 2009).
2 OregonLaws.org contains the con­tents of Volume 21 of the ORS, inserted along­side the per­tin­ent statutes. See the preface to the ORS An­no­ta­tions for more information.
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information