• Current through October 23, 2012

Except where the document was originally issued upon delivery of the goods by a person who had no power to dispose of them, no lien attaches by virtue of any judicial process to goods in the possession of a bailee for which a negotiable document of title is outstanding unless the document be first surrendered to the bailee or its negotiation enjoined, and the bailee shall not be compelled to deliver the goods pursuant to process until the document is surrendered to him or impounded by the court. One who purchases the document for value without notice of the process or injunction takes free of the lien imposed by judicial process.

(Dec. 30, 1963, 77 Stat. 731, Pub. L. 88-243, § 1.)



Prior Uniform Statutory Provisions

Section 25, Uniform Warehouse Receipts Act; Section 24, Uniform Bills of Lading Act.


Consolidated and rewritten.

Purposes of Changes

1. The purpose of the section is to protect the bailee from conflicting claims of the document holder and the judgment creditors of the person who deposited the goods. The rights of the former prevail unless, in effect, the judgment creditors immobilize the negotiable document. However, if the document was issued upon deposit of the goods by a person who had no power to dispose of the goods so that the document is ineffective to pass title, judgment liens are valid to the extent of the debtor's interest in the goods.

2. The last sentence covers the possibility that the holder of a document who has been enjoined from negotiating it will violate the injunction by negotiating to an innocent purchaser for value. In such case the lien will be defeated.

Cross Reference

Point 1: Section 7-503.

Definitional Cross References

"Bailee". Section 7-102.

"Delivery". Section 1-201.

"Document". Section 7-102.

"Goods". Section 7-102.

"Notice". Section 1-201.

"Person". Section 1-201.

"Purchase". Section 1-201.

"Value". Section 1-201.

Prior Codifications

1981 Ed., § 28:7-602.

1973 Ed., § 28:7-602.