Printable Format84-7-601. Lost, stolen or destroyed documents of title. (a) If a document of title is lost, stolen, or destroyed, a court may order delivery of the goods or issuance of a substitute document and the bailee may without liability to any person comply with the order. If the document was negotiable, a court may not order delivery of the goods or issuance of a substitute document without the claimant's posting security unless it finds that any person that may suffer loss as a result of nonsurrender of possession or control of the document is adequately protected against the loss. If the document was nonnegotiable, the court may require security. The court may also order payment of the bailee's reasonable costs and attorney's fees in any action under this subsection.
(b) A bailee that, without a court order, delivers goods to a person claiming under a missing negotiable document of title is liable to any person injured thereby. If the delivery is not in good faith, the bailee is liable for conversion. Delivery in good faith is not conversion if the claimant posts security with the bailee in an amount at least double the value of the goods at the time of posting to indemnify any person injured by the delivery which files a notice of claim within one year after the delivery.
History: L. 2007, ch. 90, § 39; July 1, 2008.
KANSAS COMMENT, 1996
Subsection (1) revises generally former K.S.A. 82-114, and extends the coverage of the prior law. This section applies to both nonnegotiable and negotiable documents, and expands the availability of court orders by providing for issuance of a substitute document as well as for delivery of the goods. In addition, coverage is extended to lost, stolen or destroyed documents. Under prior law, the court could order delivery "upon satisfactory proof of such loss or destruction." While this phrase is omitted, it seems likely that the court would require the same sort of proof before ordering delivery. The posting of security under this subsection is mandatory where the court orders delivery under a lost negotiable document, but is discretionary where the document is nonnegotiable. As under prior law, the court may order payment of the bailee's reasonable costs and counsel fees. The bailee may comply with the court order without liability to any person. A later holder will have recourse against the posted security.
Subsection (2) provides for delivery without a court order. This sort of delivery leaves the bailee liable to any person injured, and if the delivery is made in bad faith, liable for conversion. Under former K.S.A. 82-154, delivery by a warehouseman without a court order was a crime. The second sentence of subsection (2) allows a delivery in accordance with a filed classification or tariff or a delivery pursuant to the required posted security. Such a delivery is deemed to have been made in good faith, and therefore is not conversion.
See also K.S.A. 34-257a, which mandates the procedure to be followed in issuing duplicate negotiable warehouse receipts which have been lost or destroyed.
Revisor's Note:
Former section 84-7-601 repealed by L. 2007, ch. 90, § 78 and the number reassigned to the current text.
Law Review and Bar Journal References:
"Recovery of Attorney Fees in Kansas," Mark A. Furney, 18 W.L.J. 535, 563 (1979).