Sec. 42a-7-209. Lien of warehouse. (a) A warehouse has a lien against the bailor
on the goods covered by a warehouse receipt or storage agreement or on the proceeds
thereof in its possession for charges for storage or transportation, including demurrage
and terminal charges, insurance, labor, or other charges, present or future, in relation
to the goods, and for expenses necessary for preservation of the goods or reasonably
incurred in their sale pursuant to law. If the person on whose account the goods are held
is liable for similar charges or expenses in relation to other goods whenever deposited
and it is stated in the warehouse receipt or storage agreement that a lien is claimed for
charges and expenses in relation to other goods, the warehouse also has a lien against
the goods covered by the warehouse receipt or storage agreement or on the proceeds
thereof in its possession for those charges and expenses, whether or not the other goods
have been delivered by the warehouse. However, as against a person to which a negotiable warehouse receipt is duly negotiated, a warehouse's lien is limited to charges in an
amount or at a rate specified in the warehouse receipt or, if no charges are so specified,
to a reasonable charge for storage of the specific goods covered by the receipt subsequent
to the date of the receipt.
(b) A warehouse may also reserve a security interest against the bailor for the maximum amount specified on the receipt for charges other than those specified in subsection
(a) of this section, such as for money advanced and interest. The security interest is
governed by article 9.
(c) A warehouse's lien for charges and expenses under subsection (a) of this section
or a security interest under subsection (b) of this section is also effective against any
person that so entrusted the bailor with possession of the goods that a pledge of them
by the bailor to a good faith purchaser for value would have been valid. However, the lien
or security interest is not effective against a person that before issuance of a document of
title had a legal interest or a perfected security interest in the goods and that did not:
(1) Deliver or entrust the goods or any document of title covering the goods to the
bailor or the bailor's nominee with: (A) Actual or apparent authority to ship, store or
sell; (B) power to obtain delivery under section 42a-7-403; or (C) power of disposition
under section 42a-2-403, 42a-2A-404, 42a-2A-405 or 42a-9-320, subsection (c) of section 42a-9-321 or other statute or rule of law; or
(2) Acquiesce in the procurement by the bailor or its nominee of any document.
(d) A warehouse's lien on household goods for charges and expenses in relation to
the goods under subsection (a) of this section is also effective against all persons if the
depositor was the legal possessor of the goods at the time of deposit. In this subsection,
"household goods" means furniture, furnishings or personal effects used by the depositor
in a dwelling.
(e) A warehouse loses its lien on any goods that it voluntarily delivers or unjustifiably refuses to deliver.
(1959, P.A. 133, S. 7-209; P.A. 04-64, S. 15.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-210. Enforcement of warehouse's lien. (a) Except as otherwise provided in subsection (b) of this section, a warehouse's lien may be enforced by public
or private sale of the goods, in bulk or in packages, at any time or place and on any
terms that are commercially reasonable, after notifying all persons known to claim an
interest in the goods. The notification must include a statement of the amount due, the
nature of the proposed sale and the time and place of any public sale. The fact that a
better price could have been obtained by a sale at a different time or in a different method
from that selected by the warehouse is not of itself sufficient to establish that the sale was
not made in a commercially reasonable manner. The warehouse sells in a commercially
reasonable manner if the warehouse sells the goods in the usual manner in any recognized
market therefor, sells at the price current in that market at the time of the sale, or otherwise
sells in conformity with commercially reasonable practices among dealers in the type
of goods sold. A sale of more goods than apparently necessary to be offered to ensure
satisfaction of the obligation is not commercially reasonable, except in cases covered
by the preceding sentence.
(b) A warehouse may enforce its lien on goods, other than goods stored by a merchant in the course of its business, only if the following requirements are satisfied:
(1) All persons known to claim an interest in the goods must be notified.
(2) The notification must include an itemized statement of the claim, a description
of the goods subject to the lien, a demand for payment within a specified time not less
than ten days after receipt of the notification, and a conspicuous statement that unless
the claim is paid within that time the goods will be advertised for sale and sold by auction
at a specified time and place.
(3) The sale must conform to the terms of the notification.
(4) The sale must be held at the nearest suitable place to where the goods are held
or stored.
(5) After the expiration of the time given in the notification, an advertisement of
the sale must be published once a week for two weeks consecutively in a newspaper
of general circulation where the sale is to be held. The advertisement must include a
description of the goods, the name of the person on whose account the goods are being
held, and the time and place of the sale. The sale must take place at least fifteen days
after the first publication. If there is no newspaper of general circulation where the sale
is to be held, the advertisement must be posted at least ten days before the sale in not
fewer than six conspicuous places in the neighborhood of the proposed sale.
(c) Before any sale pursuant to this section, any person claiming a right in the goods
may pay the amount necessary to satisfy the lien and the reasonable expenses incurred
in complying with this section. In that event, the goods may not be sold but must be
retained by the warehouse subject to the terms of the receipt and this article.
(d) A warehouse may buy at any public sale held pursuant to this section.
(e) A purchaser in good faith of goods sold to enforce a warehouse's lien takes
the goods free of any rights of persons against which the lien was valid, despite the
warehouse's noncompliance with this section.
(f) A warehouse may satisfy its lien from the proceeds of any sale pursuant to this
section but shall hold the balance, if any, for delivery on demand to any person to which
the warehouse would have been bound to deliver the goods.
(g) The rights provided by this section are in addition to all other rights allowed by
law to a creditor against a debtor.
(h) If a lien is on goods stored by a merchant in the course of its business, the lien
may be enforced in accordance with subsection (a) or (b) of this section.
(i) A warehouse is liable for damages caused by failure to comply with the requirements for sale under this section and, in case of wilful violation, is liable for conversion.
(1959, P.A. 133, S. 7-210; 1961, P.A. 116, S. 7; P.A. 04-64, S. 16.)
History: 1961 act added receipting requirement of subs. (2) (b); P.A. 04-64 amended section to adopt the 2003 Revision
of Uniform Commercial Code Article 7-Documents of Title.
See Sec. 40-55 re delivery of goods without obtaining negotiable receipt.
PART 3*
BILLS OF LADING: SPECIAL PROVISIONS
*See Secs. 41-47 to 41-53.
Sec. 42a-7-301. Liability for nonreceipt or misdescription; "said to contain";
"shipper's weight, load and count"; improper handling. (a) A consignee of a nonnegotiable bill of lading which has given value in good faith, or a holder to which a negotiable bill has been duly negotiated, relying upon the description of the goods in the bill
or upon the date shown in the bill, may recover from the issuer damages caused by the
misdating of the bill or the nonreceipt or misdescription of the goods, except to the
extent that the bill indicates that the issuer does not know whether any part or all of the
goods in fact were received or conform to the description, such as in a case in which
the description is in terms of marks or labels or kind, quantity, or condition or the receipt
or description is qualified by "contents or condition of contents of packages unknown",
"said to contain", "shipper's weight, load and count" or words of similar import, if that
indication is true.
(b) If goods are loaded by the issuer of a bill of lading:
(1) The issuer shall count the packages of goods if shipped in packages and ascertain
the kind and quantity if shipped in bulk; and
(2) Words such as "shipper's weight, load and count" or words of similar import
indicating that the description was made by the shipper are ineffective except as to goods
concealed in packages.
(c) If bulk goods are loaded by a shipper that makes available to the issuer of a bill
of lading adequate facilities for weighing those goods, the issuer shall ascertain the kind
and quantity within a reasonable time after receiving the shipper's request in a record
to do so. In that case, "shipper's weight" or words of similar import are ineffective.
(d) The issuer of a bill of lading, by including in the bill the words "shipper's weight,
load and count", or words of similar import, may indicate that the goods were loaded
by the shipper, and, if that statement is true, the issuer is not liable for damages caused
by the improper loading. However, omission of such words does not imply liability for
damages caused by improper loading.
(e) A shipper guarantees to an issuer the accuracy at the time of shipment of the
description, marks, labels, number, kind, quantity, condition and weight, as furnished
by the shipper, and the shipper shall indemnify the issuer against damage caused by
inaccuracies in those particulars. This right of indemnity does not limit the issuer's
responsibility or liability under the contract of carriage to any person other than the
shipper.
(1959, P.A. 133, S. 7-301; P.A. 04-64, S. 17.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-302. Through bills of lading and similar documents of title. (a) The
issuer of a through bill of lading, or other document of title embodying an undertaking
to be performed in part by a person acting as its agent or by a performing carrier, is
liable to any person entitled to recover on the bill or other document for any breach by the
other person or the performing carrier of its obligation under the bill or other document.
However, to the extent that the bill or other document covers an undertaking to be
performed overseas or in territory not contiguous to the continental United States or an
undertaking including matters other than transportation, this liability for breach by the
other person or the performing carrier may be varied by agreement of the parties.
(b) If goods covered by a through bill of lading or other document of title embodying
an undertaking to be performed in part by a person other than the issuer are received by
that person, the person is subject, with respect to its own performance while the goods
are in its possession, to the obligation of the issuer. The person's obligation is discharged
by delivery of the goods to another person pursuant to the bill or other document and
does not include liability for breach by any other person or by the issuer.
(c) The issuer of a through bill of lading or other document of title described in
subsection (a) of this section is entitled to recover from the performing carrier, or other
person in possession of the goods when the breach of the obligation under the bill or
other document occurred:
(1) The amount it may be required to pay to any person entitled to recover on the
bill or other document for the breach, as may be evidenced by any receipt, judgment or
transcript of judgment; and
(2) The amount of any expense reasonably incurred by the issuer in defending any
action commenced by any person entitled to recover on the bill or other document for
the breach.
(1959, P.A. 133, S. 7-302; P.A. 04-64, S. 18.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-303. Diversion; reconsignment; change of instructions. (a) Unless
the bill of lading otherwise provides, a carrier may deliver the goods to a person or
destination other than that stated in the bill or may otherwise dispose of the goods,
without liability for misdelivery, on instructions from:
(1) The holder of a negotiable bill;
(2) The consignor on a nonnegotiable bill, even if the consignee has given contrary
instructions;
(3) The consignee on a nonnegotiable bill in the absence of contrary instructions
from the consignor, if the goods have arrived at the billed destination or if the consignee
is in possession of the tangible bill or in control of the electronic bill; or
(4) The consignee on a nonnegotiable bill, if the consignee is entitled as against the
consignor to dispose of the goods.
(b) Unless instructions described in subsection (a) of this section are included in a
negotiable bill of lading, a person to which the bill is duly negotiated may hold the bailee
according to the original terms.
(1959, P.A. 133, S. 7-303; P.A. 04-64, S. 19.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Cited. 207 C. 599, 607.
Sec. 42a-7-304. Tangible bills of lading in a set. (a) Except as customary in international transportation, a tangible bill of lading may not be issued in a set of parts. The
issuer is liable for damages caused by violation of this subsection.
(b) If a tangible bill of lading is lawfully issued in a set of parts, each of which
contains an identification code and is expressed to be valid only if the goods have not
been delivered against any other part, the whole of the parts constitutes one bill.
(c) If a tangible negotiable bill of lading is lawfully issued in a set of parts and
different parts are negotiated to different persons, the title of the holder to which the
first due negotiation is made prevails as to both the document of title and the goods
even if any later holder may have received the goods from the carrier in good faith and
discharged the carrier's obligation by surrendering its part.
(d) A person that negotiates or transfers a single part of a tangible bill of lading
issued in a set is liable to holders of that part as if it were the whole set.
(e) The bailee shall deliver in accordance with part 4 of this article against the first
presented part of a tangible bill of lading lawfully issued in a set. Delivery in this manner
discharges the bailee's obligation on the whole bill.
(1959, P.A. 133, S. 7-304; P.A. 04-64, S. 20.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-305. Destination bills. (a) Instead of issuing a bill of lading to the consignor at the place of shipment, a carrier, at the request of the consignor, may procure
the bill to be issued at destination or at any other place designated in the request.
(b) Upon request of any person entitled as against a carrier to control the goods
while in transit and on surrender of possession or control of any outstanding bill of
lading or other receipt covering the goods, the issuer, subject to section 42a-7-105, may
procure a substitute bill to be issued at any place designated in the request.
(1959, P.A. 133, S. 7-305; P.A. 04-64, S. 21.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-306. Altered bills of lading. An unauthorized alteration or filling in
of a blank in a bill of lading leaves the bill enforceable according to its original tenor.
(1959, P.A. 133, S. 7-306.)
Sec. 42a-7-307. Lien of carrier. (a) A carrier has a lien on the goods covered by
a bill of lading or on the proceeds thereof in its possession for charges after the date of
the carrier's receipt of the goods for storage or transportation, including demurrage and
terminal charges, and for expenses necessary for preservation of the goods incident to
their transportation or reasonably incurred in their sale pursuant to law. However, against
a purchaser for value of a negotiable bill of lading, a carrier's lien is limited to charges
stated in the bill or the applicable tariffs or, if no charges are stated, a reasonable charge.
(b) A lien for charges and expenses under subsection (a) of this section on goods
that the carrier was required by law to receive for transportation is effective against the
consignor or any person entitled to the goods unless the carrier had notice that the
consignor lacked authority to subject the goods to those charges and expenses. Any
other lien under subsection (a) of this section is effective against the consignor and any
person that permitted the bailor to have control or possession of the goods unless the
carrier had notice that the bailor lacked authority.
(c) A carrier loses its lien on any goods that it voluntarily delivers or unjustifiably
refuses to deliver.
(1959, P.A. 133, S. 7-307; P.A. 04-64, S. 22.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-308. Enforcement of carrier's lien. (a) A carrier's lien on goods may
be enforced by public or private sale of the goods, in bulk or in packages, at any time
or place and on any terms that are commercially reasonable, after notifying all persons
known to claim an interest in the goods. The notification must include a statement of
the amount due, the nature of the proposed sale and the time and place of any public
sale. The fact that a better price could have been obtained by a sale at a different time
or in a method different from that selected by the carrier is not of itself sufficient to
establish that the sale was not made in a commercially reasonable manner. The carrier
sells goods in a commercially reasonable manner if the carrier sells the goods in the
usual manner in any recognized market therefor, sells at the price current in that market
at the time of the sale, or otherwise sells in conformity with commercially reasonable
practices among dealers in the type of goods sold. A sale of more goods than apparently
necessary to be offered to ensure satisfaction of the obligation is not commercially
reasonable, except in cases covered by the preceding sentence.
(b) Before any sale pursuant to this section, any person claiming a right in the goods
may pay the amount necessary to satisfy the lien and the reasonable expenses incurred
in complying with this section. In that event, the goods may not be sold but must be
retained by the carrier, subject to the terms of the bill of lading and this article.
(c) A carrier may buy at any public sale pursuant to this section.
(d) A purchaser in good faith of goods sold to enforce a carrier's lien takes the
goods free of any rights of persons against which the lien was valid, despite the carrier's
noncompliance with this section.
(e) A carrier may satisfy its lien from the proceeds of any sale pursuant to this section
but shall hold the balance, if any, for delivery on demand to any person to which the
carrier would have been bound to deliver the goods.
(f) The rights provided by this section are in addition to all other rights allowed by
law to a creditor against a debtor.
(g) A carrier's lien may be enforced pursuant to either subsection (a) of this section
or the procedure set forth in subsection (b) of section 42a-7-210.
(h) A carrier is liable for damages caused by failure to comply with the requirements
for sale under this section and, in case of wilful violation, is liable for conversion.
(1959, P.A. 133, S. 7-308; P.A. 04-64, S. 23.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-309. Duty of care; contractual limitation of carrier's liability. (a)
A carrier that issues a bill of lading, whether negotiable or nonnegotiable, shall exercise
the degree of care in relation to the goods which a reasonably careful person would
exercise under similar circumstances. This subsection does not affect any statute, regulation or rule of law that imposes liability upon a common carrier for damages not caused
by its negligence.
(b) Damages may be limited by a term in the bill of lading or in a transportation
agreement that the carrier's liability may not exceed a value stated in the bill or transportation agreement if the carrier's rates are dependent upon value and the consignor is
afforded an opportunity to declare a higher value and the consignor is advised of the
opportunity. However, such a limitation is not effective with respect to the carrier's
liability for conversion to its own use.
(c) Reasonable provisions as to the time and manner of presenting claims and commencing actions based on the shipment may be included in a bill of lading or a transportation agreement.
(1959, P.A. 133, S. 7-309; P.A. 04-64, S. 24.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Defendant common carrier who received machines and marked bill of lading "received in good order", held liable for
damages found on delivery to destination. Common carrier is an insurer except as to classes of shipment excepted under
standard bill of lading. 5 Conn. Cir. Ct. 93.
PART 4
WAREHOUSE RECEIPTS AND BILLS OF LADING:
GENERAL OBLIGATIONS
Sec. 42a-7-401. Irregularities in issue of receipt or bill or conduct of issuer.
The obligations imposed by this article on an issuer apply to a document of title even if:
(1) The document does not comply with the requirements of this article or of any
other statute, rule or regulation regarding its issue, form or content;
(2) The issuer violated laws regulating the conduct of its business;
(3) The goods covered by the document were owned by the bailee when the document was issued; or
(4) The person issuing the document is not a warehouse but the document purports
to be a warehouse receipt.
(1959, P.A. 133, S. 7-401; P.A. 04-64, S. 25.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-402. Duplicate document of title; overissue. A duplicate or any other
document of title purporting to cover goods already represented by an outstanding document of the same issuer does not confer any right in the goods, except as provided in
the case of tangible bills of lading in a set of parts, overissue of documents for fungible
goods, substitutes for lost, stolen or destroyed documents, or substitute documents issued
pursuant to section 42a-7-105. The issuer is liable for damages caused by its overissue
or failure to identify a duplicate document by a conspicuous notation.
(1959, P.A. 133, S. 7-402; P.A. 04-64, S. 26.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
See Secs. 40-53, 41-49 re issuance of duplicate receipts not marked as such.
Sec. 42a-7-403. Obligation of bailee to deliver; excuse. (a) A bailee shall deliver
the goods to a person entitled under a document of title if the person complies with
subsections (b) and (c) of this section, unless and to the extent that the bailee establishes
any of the following:
(1) Delivery of the goods to a person whose receipt was rightful as against the
claimant;
(2) Damage to or delay, loss or destruction of the goods for which the bailee is not
liable;
(3) Previous sale or other disposition of the goods in lawful enforcement of a lien
or on a warehouse's lawful termination of storage;
(4) The exercise by a seller of its right to stop delivery pursuant to section 42a-2-705 or by a lessor of its right to stop delivery pursuant to section 42a-2A-719;
(5) A diversion, reconsignment or other disposition pursuant to section 42a-7-303;
(6) Release, satisfaction or any other personal defense against the claimant; or
(7) Any other lawful excuse.
(b) A person claiming goods covered by a document of title shall satisfy the bailee's
lien if the bailee so requests or if the bailee is prohibited by law from delivering the
goods until the charges are paid.
(c) Unless a person claiming the goods is a person against which the document of
title does not confer a right under subsection (a) of section 42a-7-503:
(1) The person claiming under a document shall surrender possession or control of
any outstanding negotiable document covering the goods for cancellation or indication
of partial deliveries; and
(2) The bailee shall cancel the document or conspicuously indicate in the document
the partial delivery or the bailee is liable to any person to which the document is duly
negotiated.
(1959, P.A. 133, S. 7-403; P.A. 04-64, S. 27.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
See Sec. 40-55 re delivery of goods without obtaining negotiable receipt.
Annotations to former statutes:
1958 Rev., S. 40-17: Estopped to deny title of depositor of goods. 79 C. 342.
1958 Rev., S. 41-15: Carrier liable for delivery to a dishonest employee of shipper who had caused goods to be shipped
on fictitious orders to a fictitious consignee and had then represented himself as such consignee. 97 C. 4.
Annotation to present section:
Subsec. (1):
Subdiv. (b) cited. 187 C. 405, 410.
Sec. 42a-7-404. No liability for good faith delivery pursuant to document of
title. A bailee that in good faith has received goods and delivered or otherwise disposed
of the goods according to the terms of a document of title or pursuant to this article is
not liable for the goods even if:
(1) The person from which the bailee received the goods did not have authority to
procure the document or to dispose of the goods; or
(2) The person to which the bailee delivered the goods did not have authority to
receive the goods.
(1959, P.A. 133, S. 7-404; P.A. 04-64, S. 28.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Cited. 187 C. 637, 642.
PART 5
WAREHOUSE RECEIPTS AND BILLS OF LADING:
NEGOTIATION AND TRANSFER
Sec. 42a-7-501. Form of negotiation and requirements of due negotiation. (a)
The following rules apply to a negotiable tangible document of title:
(1) If the document's original terms run to the order of a named person, the document
is negotiated by the named person's endorsement and delivery. After the named person's
endorsement in blank or to bearer, any person may negotiate the document by delivery
alone.
(2) If the document's original terms run to bearer, it is negotiated by delivery alone.
(3) If the document's original terms run to the order of a named person and it is
delivered to the named person, the effect is the same as if the document had been negotiated.
(4) Negotiation of the document after it has been endorsed to a named person requires endorsement by the named person and delivery.
(5) A document is duly negotiated if it is negotiated in the manner stated in this
subsection to a holder that purchases it in good faith, without notice of any defense
against or claim to it on the part of any person, and for value, unless it is established
that the negotiation is not in the regular course of business or financing or involves
receiving the document in settlement or payment of a monetary obligation.
(b) The following rules apply to a negotiable electronic document of title:
(1) If the document's original terms run to the order of a named person or to bearer,
the document is negotiated by delivery of the document to another person. Endorsement
by the named person is not required to negotiate the document.
(2) If the document's original terms run to the order of a named person and the
named person has control of the document, the effect is the same as if the document
had been negotiated.
(3) A document is duly negotiated if it is negotiated in the manner stated in this
subsection to a holder that purchases it in good faith, without notice of any defense
against or claim to it on the part of any person, and for value, unless it is established
that the negotiation is not in the regular course of business or financing or involves
taking delivery of the document in settlement or payment of a monetary obligation.
(c) Endorsement of a nonnegotiable document of title neither makes it negotiable
nor adds to the transferee's rights.
(d) The naming in a negotiable bill of lading of a person to be notified of the arrival
of the goods does not limit the negotiability of the bill or constitute notice to a purchaser
of the bill of any interest of that person in the goods.
(1959, P.A. 133, S. 7-501; P.A. 04-64, S. 29.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-502. Rights acquired by due negotiation. (a) Subject to sections 42a-7-205 and 42a-7-503, a holder to which a negotiable document of title has been duly
negotiated acquires thereby:
(1) Title to the document;
(2) Title to the goods;
(3) All rights accruing under the law of agency or estoppel, including rights to goods
delivered to the bailee after the document was issued; and
(4) The direct obligation of the issuer to hold or deliver the goods according to the
terms of the document free of any defense or claim by the issuer except those arising
under the terms of the document or under this article, but in the case of a delivery order,
the bailee's obligation accrues only upon the bailee's acceptance of the delivery order
and the obligation acquired by the holder is that the issuer and any endorser will procure
the acceptance of the bailee.
(b) Subject to section 42a-7-503, title and rights acquired by due negotiation are
not defeated by any stoppage of the goods represented by the document of title or by
surrender of the goods by the bailee and are not impaired even if:
(1) The due negotiation or any prior due negotiation constituted a breach of duty;
(2) Any person has been deprived of possession of a negotiable tangible document
or control of a negotiable electronic document by misrepresentation, fraud, accident,
mistake, duress, loss, theft or conversion; or
(3) A previous sale or other transfer of the goods or document has been made to a
third person.
(1959, P.A. 133, S. 7-502; P.A. 04-64, S. 30.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-503. Document of title to goods defeated in certain cases. (a) A document of title confers no right in goods against a person that before issuance of the document had a legal interest or a perfected security interest in the goods and that did not:
(1) Deliver or entrust the goods or any document of title covering the goods to the
bailor or the bailor's nominee with: (A) Actual or apparent authority to ship, store or
sell; (B) power to obtain delivery under section 42a-7-403; or (C) power of disposition
under section 42a-2-403, 42a-2A-404, 42a-2A-405 or 42a-9-320, subsection (c) of section 42a-9-321 or other statute or rule of law; or
(2) Acquiesce in the procurement by the bailor or its nominee of any document.
(b) Title to goods based upon an unaccepted delivery order is subject to the rights
of any person to which a negotiable warehouse receipt or bill of lading covering the
goods has been duly negotiated. That title may be defeated under section 42a-7-504 to
the same extent as the rights of the issuer or a transferee from the issuer.
(c) Title to goods based upon a bill of lading issued to a freight forwarder is subject to
the rights of any person to which a bill issued by the freight forwarder is duly negotiated.
However, delivery by the carrier in accordance with part 4 of this article pursuant to its
own bill of lading discharges the carrier's obligation to deliver.
(1959, P.A. 133, S. 7-503; P.A. 01-132, S. 145; P.A. 04-64, S. 31.)
History: P.A. 01-132 amended Subsec. (1) to replace reference to Sec. 42a-9-307 with Sec. 42a-9-320; P.A. 04-64
amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents of Title.
Sec. 42a-7-504. Rights acquired in the absence of due negotiation; effect of
diversion; stoppage of delivery. (a) A transferee of a document of title, whether negotiable or nonnegotiable, to which the document has been delivered but not duly negotiated, acquires the title and rights that its transferor had or had actual authority to convey.
(b) In the case of a nonnegotiable document of title, until but not after the bailee
receives notice of the transfer, the rights of the transferee may be defeated:
(1) By those creditors of the transferor which could treat the transfer as void under
section 42a-2-402 or 42a-2A-408;
(2) By a buyer from the transferor in ordinary course of business if the bailee has
delivered the goods to the buyer or received notification of the buyer's rights;
(3) By a lessee from the transferor in ordinary course of business if the bailee has
delivered the goods to the lessee or received notification of the lessee's rights; or
(4) As against the bailee, by good faith dealings of the bailee with the transferor.
(c) A diversion or other change of shipping instructions by the consignor in a nonnegotiable bill of lading which causes the bailee not to deliver the goods to the consignee
defeats the consignee's title to the goods if the goods have been delivered to a buyer in
ordinary course of business or a lessee in ordinary course of business and, in any event,
defeats the consignee's rights against the bailee.
(d) Delivery of the goods pursuant to a nonnegotiable document of title may be
stopped by a seller under section 42a-2-705 or a lessor under section 42a-2A-719, subject
to the requirements of due notification in said sections. A bailee that honors the seller's
or lessor's instructions is entitled to be indemnified by the seller or lessor against any
resulting loss or expense.
(1959, P.A. 133, S. 7-504; P.A. 04-64, S. 32.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Annotations to former statute (1958 Rev., S. 40-43):
Rights of holder of receipt given under "field storage warehousing" agreement. 90 C. 415. Where lumber yard is leased
to warehouseman and receipts issued for lumber. 91 C. 57.
Sec. 42a-7-505. Endorser not guarantor for other parties. The endorsement of
a tangible document of title issued by a bailee does not make the endorser liable for any
default by the bailee or previous endorsers.
(1959, P.A. 133, S. 7-505; P.A. 04-64, S. 33.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-506. Delivery without endorsement: Right to compel endorsement.
The transferee of a negotiable tangible document of title has a specifically enforceable
right to have its transferor supply any necessary endorsement, but the transfer becomes
a negotiation only as of the time the endorsement is supplied.
(1959, P.A. 133, S. 7-506; P.A. 04-64, S. 34.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-507. Warranties on negotiation or delivery of document of title. If
a person negotiates or delivers a document of title for value, otherwise than as a mere
intermediary under section 42a-7-508, unless otherwise agreed, the transferor, in addition to any warranty made in selling or leasing the goods, warrants to its immediate
purchaser only that:
(1) The document is genuine;
(2) The transferor does not have knowledge of any fact that would impair the document's validity or worth; and
(3) The negotiation or delivery is rightful and fully effective with respect to the title
to the document and the goods it represents.
(1959, P.A. 133, S. 7-507; P.A. 04-64, S. 35.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-508. Warranties of collecting bank as to documents of title. A collecting bank or other intermediary known to be entrusted with documents of title on
behalf of another or with collection of a draft or other claim against delivery of documents warrants by the delivery of the documents only its own good faith and authority
even if the collecting bank or other intermediary has purchased or made advances against
the claim or draft to be collected.
(1959, P.A. 133, S. 7-508; P.A. 04-64, S. 36.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-509. Adequate compliance with commercial contract. Whether a
document of title is adequate to fulfill the obligations of a contract for sale, a contract
for lease or the conditions of a letter of credit is determined by article 2, 2A or 5.
(1959, P.A. 133, S. 7-509; P.A. 04-64, S. 37.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
PART 6
WAREHOUSE RECEIPTS AND BILLS OF LADING:
MISCELLANEOUS PROVISIONS
Sec. 42a-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 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.
(1959, P.A. 133, S. 7-601; P.A. 04-64, S. 38.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
See Sec. 40-53 re issuance of duplicate receipts not marked as such.
See Sec. 40-55 re delivery of goods without obtaining negotiable receipt.
Sec. 42a-7-602. Judicial process against goods covered by negotiable document of title. 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.
(1959, P.A. 133, S. 7-602; P.A. 04-64, S. 39.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
Sec. 42a-7-603. Conflicting claims; interpleader. 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.
(1959, P.A. 133, S. 7-603; P.A. 04-64, S. 40.)
History: P.A. 04-64 amended section to adopt the 2003 Revision of Uniform Commercial Code Article 7-Documents
of Title.
PART 7
MISCELLANEOUS PROVISIONS
Secs. 42a-7-701 and 42a-7-702. Reserved for future use.
Sec. 42a-7-703. Applicability. This article and other provisions of this title, as
amended by public act 04-64*, apply to a document of title that is issued or a bailment
that arises on or after October 1, 2004. This article and other provisions of this title, as
amended by public act 04-64*, do not apply to a document of title that is issued or a
bailment that arises before October 1, 2004, even if the document of title or bailment
would be subject to this article and other provisions of this title, as amended by public
act 04-64*, if the document of title had been issued or bailment had arisen on or after
October 1, 2004. This article and other provisions of this title, as amended by public
act 04-64*, do not apply to a right of action that has accrued before October 1, 2004.
(P.A. 04-64, S. 41.)
*Note: Public act 04-64 is entitled "An Act Adopting Revised Article 7 of the Uniform Commercial Code Concerning
Documents of Title". (See Reference Table captioned "Public Acts of 2004" in Volume 16 which lists the sections amended,
created or repealed by the act.)