KRS 355.2-403: Power to transfer -- Good faith purchase of goods -- "Entrusting."

(1) A purchaser of goods acquires all title which his transferor had or had power to

transfer except that a purchaser of a limited interest acquires rights only to the

extent of the interest purchased. A person with voidable title has power to transfer a

good title to a good faith purchaser for value. When goods have been delivered

under a transaction of purchase the purchaser has such power even though

(a) the transferor was deceived as to the identity of the purchaser, or

(b) the delivery was in exchange for a check which is later dishonored, or

(c) it was agreed that the transaction was to be a "cash sale," or

(d) the delivery was procured through fraud punishable as larcenous under the

criminal law.

(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind

gives him power to transfer all rights of the entruster to a buyer in ordinary course

of business.

(3) "Entrusting" includes any delivery and any acquiescence in retention of possession

regardless of any condition expressed bet ween the parties to the delivery or

acquiescence and regardless of whether the procurement of the entrusting or the

possessor's disposition of the goods have been such as to be larcenous under the

criminal law.

(4) The rights of other purchasers of goods a nd of lien creditors are governed by the

articles on secured transactions (Article 9) and documents of title (Article 7).