SECTIONS 7601-7603 - California Statutes

COMMERCIAL CODE

SECTION 7601-7603

7601. (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 subdivision.
(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.

7602. Unless a document of title was originally issued upon
delivery of the goods by a person that did not have power to dispose
of them, a lien does not attach by virtue of any judicial process to
goods in the possession of a bailee for which a negotiable document
of title is outstanding unless possession or control of the document
is first surrendered to the bailee or the document's negotiation is
enjoined. The bailee may not be compelled to deliver the goods
pursuant to process until possession or control of the document is
surrendered to the bailee or to the court. A purchaser of the
document for value without notice of the process or injunction takes
free of the lien imposed by judicial process.

7603. If more than one person claims title to or possession of the
goods, the bailee is excused from delivery until the bailee has a
reasonable time to ascertain the validity of the adverse claims or to
commence an action for interpleader. The bailee may assert an
interpleader either in defending an action for nondelivery of the
goods or by original action.