UCC § 2-403
Any entrusting of goods to a merchant that deals in goods of that kind gives the merchant power to transfer all of the entruster's rights to the good and to transfer the goods free of any interest of the entruster to a buyer in ordinary course of business.
"Entrusting" includes and delivery and any acquiescence in retention of possession regardless of any condition expressed between the parties to the delivery or acquiescence and regardless of whether the procurement of the entrusting or the possessor's disposition of the goods was punishable under the criminal law.
Copyright, The American Law Institute
Copyright, The American Law Institute
Merchant still cannot transfer rights that the entruster did not have the power to give.