CO Code § 4-7-601 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 7 - Documents of Title|Part 6 - Warehouse Receipts and Bills of Lading - Miscellaneous Provisions|§ 4-7-601. Lost, Stolen, or Destroyed Documents of Title

  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 (a).    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 that is injured by the delivery and that files a notice of claim within one year after the delivery.     History. Source: L. 2006: Entire article R&RE, p. 488, § 2, effective September 1. L. 2007: Entire section amended, p. 373, § 23, effective August 3.    Cross references:   For offenses relating to this title, see part 5 of article 5 of title 18.   Official Comments   Copyright by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. Reproduced with the permission of the Permanent Editorial Board for the Uniform Commercial Code. All rights reserved. —   Editor's note:   The Official Comments to the Uniform Commercial Code are available only in the printed book form of Colorado Revised Statutes. As noted above, the Official Comments are subject to copyright by the American Law Institute and the National Conference of Commissioners on Uniform State Laws. At this time, Colorado has a license to reprint the Official Comments in the printed book form.   Editor's note:    The “Uniform Commercial Code-Documents of Title”, as adopted by the Colorado General Assembly in 2006, reflects the draft version of the Code and the Comments thereto by the National Conference of Commissioners on Uniform State Laws and American Law Institute dated February 2003.    This article was numbered as article 7 of chapter 155, C.R.S. 1963. The provisions of this article were repealed and reenacted in 2006, resulting in the addition, relocation, and elimination of sections as well as subject matter. For amendments to this article prior to 2006, consult the Colorado statutory research explanatory note and the table itemizing the replacement volumes and supplements to the original volume of C.R.S. 1973 beginning on page vii in the front of this volume. Former C.R.S. section numbers are shown in editor's notes following those sections that were relocated.     Law reviews:   For article, “Documents of Title”, see 11 Colo. Law. 1150 .   Editor's note:   This section is similar to former § 4-7-601 as it existed prior to 2006.   OFFICIAL COMMENT   Prior Uniform Statutory Provision: Former Section 7-601.   Changes: To accommodate electronic documents; to provide flexibility to courts similar to the flexibility in Section 3-309; to update to the modern era of deregulation; and for style.   Purposes:   1. Subsection (a) authorizes courts to order compulsory delivery of the goods or compulsory issuance of a substitute document. Compare Section 7-402. Using language similar to that found in Section 3-309, courts are given discretion as to what is adequate protection when the lost, stolen or destroyed document was negotiable or whether security should be required when the lost, stolen or destroyed document was nonnegotiable. In determining whether a party is adequately protected against loss in the case of a negotiable document, the court should consider the likelihood that the party will suffer a loss. The court is also given discretion as to the bailee's costs and attorney fees. The rights and obligations of a bailee under this section depend upon whether the document of title is lost, stolen or destroyed and is in addition to the ability of the bailee to bring an action for interpleader. See Section 7-603.   2. Courts have the authority under this section to order a substitute document for either tangible or electronic documents. If the substitute document will be in a different medium than the original document, the court should fashion its order in light of the requirements of Section 7-105.   3. Subsection (b) follows prior Section 7-601 in recognizing the legality of the well established commercial practice of bailees making delivery in good faith when they are satisfied that the claimant is the person entitled under a missing (i.e. lost , stolen, or destroyed) negotiable document. Acting without a court order, the bailee remains liable on the original negotiable document and, to avoid conversion liability, the bailee may insist that the claimant provide an indemnity bond. Cf. Section 7-403.   4. Claimants on non-negotiable instruments are permitted to avail themselves of the subsection (a) procedure because straight (non-negotiable) bills of lading sometimes contain provisions that the goods shall not be delivered except upon production of the bill. If the carrier should choose to insist upon production of the bill, the consignee should have some means of compelling delivery on satisfactory proof of entitlement. Without a court order, a bailee may deliver, subject to Section 7-403, to a person claiming goods under a non- negotiable document that the same person claims is lost, stolen, or destroyed.   5. The bailee's lien should be protected when a court orders delivery of the goods pursuant to this section.   Cross References:   Point 1: Sections 3-309, 7-402 and 7-603.   Point 2: Section 7-105.   Point 3: Section 7-403.   Point 4: Section 7-403.   Point 5: Sections 7-209 and 7-307.   Definitional Cross References:   “Bailee”. Section 7-102.   “Delivery”. Section 1-201.   “Document of Title”. Section 1-201.   “Good faith”. Section 1-201 [7-102].   “Goods”. Section 7-102.   “Person”. Section 1-201.