Title 11. Trade Regulation — Subtitle 8. Consignees

In this subtitle the following words have the meanings indicated.

“Consignee” means a commercial agent who is:

“Goods” includes wares or merchandise, but does not include agricultural products.

“Person” includes an individual, corporation, business trust, statutory trust, estate, trust, partnership, association, two or more persons having a joint or common interest, or any other legal or commercial entity.

“Possessory document” means a bill of lading, warehouse receipt, order for delivery of goods, or other document which evidences possession.

Except as provided by subsection (b) of this section, a consignee entrusted with and in possession of a possessory document is considered the true owner of the goods described in the document for the purpose of any contract with a third person for:

A contract, pledge, or deposit described in subsection (a) of this section is not valid if the third person has notice that the consignee is not the true owner of the goods.

Except as provided in subsection (b) of this section, if in the ordinary course of business a contract for sale of goods is made between a consignee and a third person, the contract and any payment made in the ordinary course of business for the goods under the contract is valid against the owner of the goods, even if the third person has notice that the seller of the goods is a consignee.

A contract or payment described in subsection (a) of this section is not valid against the owner of the goods if the third person has notice that the seller is not authorized to sell the goods or to receive payments for them, as the case may be.

Except as provided in subsection (c) of this section, if a third person takes goods or a possessory document in deposit or pledge as security for a preexisting debt or demand from any other person entrusted with them or to whom they are consigned or who is entrusted with and in possession of a possessory document, he acquires only the right, title, or interest as was possessed and might have been enforced by the person from whom he received the goods or possessory document.

Except as provided in subsection (c) of this section, if a third person knows that he is dealing with a consignee, he may take goods or a possessory document in deposit or pledge as security for a preexisting debt or demand, but he acquires only the right or interest in the goods or possessory document that was possessed by the consignee at the time of the deposit or pledge.

If a third person has notice that the consignee is not authorized to pledge, deposit, or part with possession of the goods or possessory document, he acquires no right, title, or interest in the goods.

A consignment of agricultural products by the grower, producer, or owner to a consignee for sale for the use and benefit of the consignor does not vest in the consignee any other title or right to the products except to sell and deliver them to a bona fide purchaser for a valuable consideration.

If, without the express consent of the grower, producer, or owner, a consignee mortgages, pledges, deposits, or otherwise disposes of agricultural products consigned only for sale for the use and benefit of the grower, producer, or owner, the disposition is void and title to the products does not pass but remains in the grower, producer, or owner as if no disposition were made.

Nothing in this section impairs any right of any lien which a consignee acquires or is entitled to for bona fide advances made in money or goods to the grower, producer, or owner on the faith and the security of the consignment.

Any consignee, his agent, or employee who converts to his own use goods or agricultural products entrusted to the consignee for sale or the proceeds from the sale of them is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding six months or both.

The failure of a consignee who sells goods or agricultural products on commission to pay the proceeds from the sale, less his charges, to the person entitled to receive the proceeds within five days after receiving the proceeds from the purchaser and after demand for payment is prima facie evidence of conversion of the goods or agricultural products.

After a sale of goods consigned for sale by a person in this State to a person engaged in the business of selling goods on consignment, the consignee shall transmit to the consignor within 24 hours after the sale a full account of the sale, including:

A person who violates this section is guilty of a misdemeanor and on conviction is subject to a fine of $5 for each violation, and court costs.