Title under warehouse receipt defeated in certain cases

84-7-205. Title under warehouse receipt defeated in certain cases. A buyer in ordinary course of business of fungible goods sold and delivered by a warehouse that is also in the business of buying and selling such goods takes the goods free of any claim under a warehouse receipt even if the receipt is negotiable and has been duly negotiated. History: L. 2007, ch. 90, § 11; July 1, 2008. KANSAS COMMENT, 1996 Normally, when goods have been stored and a negotiable warehouse receipt covering them is outstanding, the goods are dealt with by means of the warehouse receipt, and the holder of the negotiable warehouse receipt takes priority over a purchaser of the same goods who does not take the warehouse receipt. 84-7-502. The rule stated in this section is an exception to that general principle, and the buyer in the ordinary course of the seller's business, rather than the receipt holder, is protected. The rule of this section is similar to the rule of 84-2-403, protecting buyers of goods in ordinary course of the seller's business from the claims on those entrusting the goods to the seller. "Fungible" is defined in 84-1-201(17), and "fungible grain" is defined in K.S.A. 34-223(c). Revisor's Note: Former section 84-7-205 repealed by L. 2007, ch. 90, § 78 and the number reassigned to the current text. Law Review and Bar Journal References: "Grain Elevator Bankruptcies: How Can the Grain Producer be Better Protected?" Marc E. Elkins, 31 K.L.R. 157, 159 (1982). "Agricultural Credit and The Uniform Commercial Code: A Need for Change?" Keith G. Meyer, 34 K.L.R. 469, 473, 486, 490 (1986).