KRS 355.7-403: Obligation of bailee to deliver -- Excuse.

(1) A bailee shall deliver the goods to a person entitled under a document of title if the

person complies with subsections (2) and (3) of this section, unless and to the extent

that the bailee establishes any of the following:

(a) Delivery of the goods to a p erson whose receipt was rightful as against the

claimant;

(b) Damage to or delay, loss, or destruction of the goods for which the bailee is

not liable;

(c) Previous sale or other disposition of the goods in lawful enforcement of a lien

or on a warehouse's lawful termination of storage;

(d) The exercise by a seller of its right to stop delivery pursuant to KRS 355.2 -

705 or by a lessor of its right to stop delivery pursuant to KRS 355.2A-526;

(e) A diversion, reconsignment, or other disposition pursuant to KRS 355.7-303;

(f) Release, satisfaction, or any other fact affording a personal defense against the

claimant; or

(g) Any other lawful excuse.

(2) A person claiming goods covered by a document of title shall satisfy the bailee's

lien if the bailee so request s or the bailee is prohibited by law from delivering the

goods until the charges are paid.

(3) Unless a person claiming the goods is one against which the document of title does

not confer a right under KRS 355.7-503(1):

(a) The person claiming under a doc ument shall surrender possession or control

of any outstanding negotiable document covering the goods for cancellation or

indication of partial deliveries; and

(b) The bailee shall cancel the document or conspicuously indicate in the

document the partial delivery or be liable to any person to which the document

is duly negotiated.