Introduced Version
SENATE BILL No. 419
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 26-1.
Synopsis: Uniform Commercial Code. Modifies the Indiana Uniform
Commercial Code - General Provisions to conform with the Uniform
Commercial Code - General Provisions. Modifies the Indiana Uniform
Commercial Code - Documents of Title to conform with the Uniform
Commercial Code - Documents of Title.
Effective: July 1, 2007.
Simpson
January 11, 2007, read first time and referred to Committee on Insurance and Financial
Institutions.
Introduced
First Regular Session 115th General Assembly (2007)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
this style type, and deletions will appear in
this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
this style type. Also, the
word
NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
this style type or
this style type reconciles conflicts
between statutes enacted by the 2006 Regular Session of the General Assembly.
SENATE BILL No. 419
A BILL FOR AN ACT to amend the Indiana Code concerning
commercial law.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 26-1-1-101; (07)IN0419.1.1. -->
SECTION 1. IC 26-1-1-101 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 101. (1) IC 26-1 shall
be known and may be cited as Uniform Commercial Code.
(2) IC 26-1 applies to a transaction to the extent that it is
governed by another article of the Uniform Commercial Code.
SOURCE: IC 26-1-1-108.2; (07)IN0419.1.2. -->
SECTION 2. IC 26-1-1-108.2 IS ADDED TO THE INDIANA
CODE AS A NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2007]: Sec. 108.2. This article modifies,
limits, and supersedes the Electronic Signatures in Global and
National Commerce Act (15 U.S.C. 7001 et seq.). However, this
article does not:
(a) modify, limit, or supersede 15 U.S.C. 7001(c); or
(b) authorize the electronic delivery of a notice described in 15
U.S.C. 7003(b).
SOURCE: IC 26-1-1-201; (07)IN0419.1.3. -->
SECTION 3. IC 26-1-1-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. Subject to
additional definitions contained in IC 26-1-2 through IC 26-1-10 which
are applicable to specific provisions, and unless the context otherwise
requires, in IC 26-1:
(1) "Action" in the sense of a judicial proceeding includes
recoupment, counterclaim, setoff, suit in equity, and any other
proceedings in which rights are determined.
(2) "Aggrieved party" means a party entitled to resort to a remedy.
(3) "Agreement" means the bargain of the parties in fact as found
in their language or by implication from other circumstances
including course of dealing or usage of trade or course of
performance as provided in IC 26-1-1-205. and IC 26-1-2-208.
Whether an agreement has legal consequences is determined by
the provisions of IC 26-1, if applicable; otherwise by the law of
contracts (IC 26-1-1-103). (Compare "Contract".)
(4) "Bank" means any person engaged in the business of banking.
(5) "Bearer" means the person in possession of an instrument,
document of title, or certificated security payable to bearer or
endorsed in blank.
(6) "Bill of lading" means a document evidencing the receipt of
goods for shipment issued by a person engaged in the business of
transporting or forwarding goods, and includes an airbill. "Airbill"
means a document serving for air transportation as a bill of lading
does for marine or rail transportation, and includes an air
consignment note or air waybill.
(7) "Branch" includes a separately incorporated foreign branch of
a bank.
(8) "Burden of establishing" a fact means the burden of
persuading the triers of fact that the existence of the fact is more
probable than its nonexistence.
(9) "Buyer in ordinary course of business" means a person that
buys goods in good faith without knowledge that the sale violates
the rights of another person in the goods, and in the ordinary
course from a person, other than a pawnbroker, in the business of
selling goods of that kind. A person buys goods in the ordinary
course of business if the sale to the person comports with the
usual or customary practices in the kind of business in which the
seller is engaged or with the seller's own usual or customary
practices. A person that sells oil, gas, or other minerals at the
wellhead or minehead is a person in the business of selling goods
of that kind. A buyer in ordinary course of business may buy for
cash, by exchange of other property, or on secured or unsecured
credit, and may require goods or documents of title under a
preexisting contract for sale. Only a buyer that takes possession
of the goods or has a right to recover the goods from that seller
under IC 26-1-2 may be a buyer in ordinary course of business. A
person that acquires goods in a transfer in bulk or as security for
or total or partial satisfaction of a money debt is not a buyer in
ordinary course of business.
(10) "Conspicuous". A term or clause is conspicuous when it is so
written that a reasonable person against whom it is to operate
ought to have noticed it. A printed heading in capitals (as:
NONNEGOTIABLE BILL OF LADING) is conspicuous.
Language in the body of a form is conspicuous if it is in larger or
other contrasting type or color. But in a telegram any stated term
is conspicuous. Whether a term or clause is conspicuous or not is
for decision by the court.
(11) "Contract" means the total legal obligation which results
from the parties' agreement as affected by this Act and any other
applicable rules of law. (Compare "Agreement".)
(12) "Creditor" includes a general creditor, a secured creditor, a
lien creditor and any representative of creditors, including an
assignee for the benefit of creditors, a trustee in bankruptcy, a
receiver in equity, and an executor or administrator of an
insolvent debtor's or assignor's estate.
(13) "Defendant" includes a person in the position of defendant
in a cross-action or counterclaim.
(14) "Delivery" with respect to instruments, documents of title,
chattel paper, or certificated securities means voluntary transfer
of possession.
(15) "Document of title" includes bill of lading, dock warrant,
dock receipt, warehouse receipt, or order for the delivery of goods
and also any other document, which in the regular course of
business or financing, is treated as adequately evidencing that the
person in possession of it is entitled to receive, hold, and dispose
of the document and the goods it covers. To be a document of
title, a document must purport to be issued by or addressed to a
bailee and purport to cover goods in the bailee's possession which
are either identified or are fungible portions of an identified mass.
(16) "Fault" means wrongful act, omission, or breach.
(17) "Fungible" with respect to goods or securities means goods
or securities of which any unit is, by nature or usage of trade, the
equivalent of any other like unit. Goods which are not fungible
shall be deemed fungible for the purposes of IC 26-1 to the extent
that under a particular agreement or document unlike units are
treated as equivalents.
(18) "Genuine" means free of forgery or counterfeiting.
(19) "Good faith" means honesty in fact in the conduct or
transaction concerned.
(20) "Holder" with respect to a negotiable instrument, means the
person in possession if the instrument is payable to bearer or, in
the case of an instrument, payable to an identified person if the
identified person is in possession. "Holder" with respect to a
document of title, means the person in possession if the goods are
deliverable to bearer or to the order of the person in possession.
(21) To "honor" is to pay or to accept and pay or where a credit so
engages to purchase or discount a draft complying with the terms
of the credit.
(22) "Insolvency proceedings" includes any assignment for the
benefit of creditors or other proceedings intended to liquidate or
rehabilitate the estate of the person involved.
(23) A person is "insolvent" who either has ceased to pay
his the
person's debts in the ordinary course of business or cannot pay
his the person's debts as they become due or is insolvent within
the meaning of the federal bankruptcy law.
(24) "Money" means a medium of exchange authorized or
adopted by a domestic or foreign government and includes a
monetary unit of account established by an intergovernmental
organization or by agreement between two (2) or more nations.
(25) A person has "notice" of a fact when:
(a)
he the person has actual knowledge of it;
(b)
he the person has received a notice or notification of it; or
(c) from all the facts and circumstances known to
him the
person at the time in question
he the person has reason to
know that it exists.
A person "knows" or has "knowledge" of a fact when
he the
person has actual knowledge of it. "Discover" or "learn" or a
word or phrase of similar import refers to knowledge rather than
to reason to know. The time and circumstances under which a
notice or notification may cease to be effective are not determined
by IC 26-1.
(26) A person "notifies" or "gives" a notice or notification to
another by taking such steps as may be reasonably required to
inform the other in ordinary course whether or not such other
actually comes to know of it. A person "receives" a notice or
notification when:
(a) it comes to
his the person's attention; or
(b) it is duly delivered at the place of business through which
the contract was made or at any other place held out by him
the person as the place for receipt of such communications.
(27) Notice, knowledge, or a notice of notification received by an
organization is effective for a particular transaction from the time
when it is brought to the attention of the individual conducting
that transaction and, in any event, from the time when it would
have been brought to his the person's attention if the organization
had exercised due diligence. An organization exercises due
diligence if it maintains reasonable routines for communicating
significant information to the person conducting the transaction
and there is reasonable compliance with the routines. Due
diligence does not require an individual acting for the
organization to communicate information unless such
communication is part of his the person's regular duties or unless
he the person has reason to know of the transaction and that the
transaction would be materially affected by the information.
(28) "Organization" includes a corporation, government or
governmental subdivision or agency, business trust, estate, trust,
partnership or association, two (2) or more persons having a joint
or common interest, or any other legal or commercial entity.
(29) "Party", as distinct from "third party", means a person who
has engaged in a transaction or made an agreement within
IC 26-1.
(30) "Person" includes an individual or an organization. (See
IC 26-1-1-102.)
(31) "Presumption" or "presumed" means that the trier of fact
must find the existence of the fact presumed unless and until
evidence is introduced which would support a finding of its
nonexistence.
(32) "Purchase" includes taking by sale, discount, negotiation,
mortgage, pledge, lien, security interest, issue or reissue, gift, or
any other voluntary transaction creating an interest in property.
(33) "Purchaser" means a person who takes by purchase.
(33a) "Registered mail" includes certified mail.
(34) "Remedy" means any remedial right to which an aggrieved
party is entitled with or without resort to a tribunal.
(35) "Representative" includes an agent, an officer of a
corporation or association, and a trustee, executor, or
administrator of an estate, or any other person empowered to act
for another.
(36) "Rights" includes remedies.
(37) "Security interest" means an interest in personal property or
fixtures which secures payment or performance of an obligation.
The term also includes any interest of a consignor and a buyer of
accounts, chattel paper, a payment intangible, or a promissory
note in a transaction that is subject to IC 26-1-9.1. The special
property interest of a buyer of goods on identification of such
goods to a contract for sale under IC 26-1-2-401 is not a security
interest, but a buyer may also acquire a security interest by
complying with IC 26-1-9.1. Except as otherwise provided in
IC 26-1-2-505, the right of a seller or lessor of goods under
IC 26-1-2 or IC 26-1-2.1 to retain or acquire possession of the
goods is not a "security interest", but a seller or lessor may also
acquire a "security interest" by complying with IC 26-1-9.1. The
retention or reservation of title by a seller of goods
notwithstanding shipment or delivery to the buyer
(IC 26-1-2-401) is limited in effect to a reservation of a "security
interest". Whether a transaction creates a lease or security interest
is determined by the facts of each case. However, a transaction
creates a security interest if the consideration the lessee is to pay
the lessor for the right to possession and use of the goods is an
obligation for the term of the lease not subject to termination by
the lessee and:
(a) the original term of the lease is equal to or greater than the
remaining economic life of the goods;
(b) the lessee is bound to renew the lease for the remaining
economic life of the goods or is bound to become the owner of
the goods;
(c) the lessee has an option to renew the lease for the
remaining economic life of the goods for no additional
consideration or nominal additional consideration upon
compliance with the lease agreement; or
(d) the lessee has an option to become the owner of the goods
for no additional consideration or nominal additional
consideration upon compliance with the lease agreement.
A transaction does not create a security interest merely because
it provides that:
(a) the present value of the consideration the lessee is
obligated to pay the lessor for the right to possession and use
of the goods is substantially equal to or is greater than the fair
market value of the goods at the time the lease is entered into;
(b) the lessee assumes risk of loss of the goods, or agrees to
pay taxes, insurance, filing, recording, or registration fees, or
service or maintenance costs with respect to the goods;
(c) the lessee has an option to renew the lease or to become the
owner of the goods;
(d) the lessee has an option to renew the lease for a fixed rent
that is equal to or greater than the reasonably predictable fair
market rent for the use of the goods for the term of the renewal
at the time the option is to be performed; or
(e) the lessee has an option to become the owner of the goods
for a fixed price that is equal to or greater than the reasonably
predictable fair market value of the goods at the time the
option is to be performed.
For purposes of this subsection:
(x) Additional consideration is not nominal if:
(i) when the option to renew the lease is granted to the lessee
the rent is stated to be the fair market rent for the use of the
goods for the term of the renewal determined at the time the
option is to be performed; or
(ii) when the option to become the owner of the goods is
granted to the lessee the price is stated to be the fair market
value of the goods determined at the time the option is to be
performed.
Additional consideration is nominal if it is less than the
lessee's reasonably predictable cost of performing under the
lease agreement if the option is not exercised.
(y) "Reasonably predictable" and "remaining economic life of
the goods" are to be determined with reference to the facts and
circumstances at the time the transaction is entered into.
(z) "Present value" means the amount as of a date certain of
one (1) or more sums payable in the future, discounted to the
date certain. The discount is determined by the interest rate
specified by the parties if the rate is not manifestly
unreasonable at the time the transaction is entered into.
Otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and
circumstances of each case at the time the transaction was
entered into.
(38) "Send" in connection with any writing or notice means to
deposit in the mail or deliver for transmission by any other usual
means of communication with postage or cost of transmission
provided for and properly addressed and, in the case of an
instrument, to an address specified thereon or otherwise agreed
or, if there be none, to any address reasonable under the
circumstances. The receipt of any writing or notice within the
time at which it would have arrived if properly sent has the effect
of a proper sending.
(39) "Signed" includes any symbol executed or adopted by a party
with present intention to authenticate a writing.
(40) "Surety" includes guarantor.
(41) "Telegram" includes a message transmitted by radio,
teletype, cable, any mechanical method of transmission, or the
like.
(42) "Term" means that portion of an agreement which relates to
a particular matter.
(43) "Unauthorized" signature means one made without actual,
implied, or apparent authority and includes a forgery.
(44) "Value". Except as otherwise provided with respect to
negotiable instruments and bank collections (IC 26-1-3.1-303,
IC 26-1-4-208, and IC 26-1-4-209) a person gives value for rights
if he the person acquires them:
(a) in return for a binding commitment to extend credit or for
the extension of immediately available credit whether or not
drawn upon and whether or not a chargeback is provided for
in the event of difficulties in collection;
(b) as security for or in total or partial satisfaction of a
preexisting claim;
(c) by accepting delivery pursuant to a preexisting contract for
purchase; or
(d) generally, in return for any consideration sufficient to
support a simple contract.
(45) "Warehouse receipt" means a receipt issued by a person
engaged in the business of storing goods for hire.
(46) "Written" or "writing" includes printing, typewriting, or any
other intentional reduction to tangible form.
SOURCE: IC 26-1-1-205; (07)IN0419.1.4. -->
SECTION 4. IC 26-1-1-205 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 205. (1) A course of
dealing is a sequence of previous conduct between the parties to a
particular transaction which is fairly to be regarded as establishing a
common basis of understanding for interpreting their expressions and
other conduct.
(2) A course of performance is a sequence of conduct between
the parties to a particular transaction that exists if the:
(a) agreement of the parties with respect to the transaction
involves repeated occasions for performance by a party; and
(b) other party, with knowledge of the nature of the
performance and opportunity for objection to it, accepts the
performance or acquiesces in it without objection.
(2) (3) A usage of trade is any practice or method of dealing having
such regularity of observance in a place, vocation or trade as to justify
an expectation that it will be observed with respect to the transaction
in question. The existence and scope of such a usage are to be proved
as facts. If it is established that such a usage is embodied in a written
trade code or similar writing the interpretation of the writing is for the
court.
(3) (4) A course of dealing or course of performance between
parties and any usage of trade in the vocation or trade in which they are
engaged or of which they are or should be aware give particular
meaning to and supplement or qualify terms of an agreement.
(4) (5) Except as provided in subsection (8), the express terms of
an agreement and an applicable course of dealing, course of
performance, or usage of trade shall be construed wherever reasonable
as consistent with each other. but when If such a construction is
unreasonable:
(a) express terms control both prevail over course of dealing and
course of performance;
(b) course of performance prevails over course of dealing and
usage of trade; and
(c) course of dealing controls prevails over usage of trade.
(5) (6) An applicable usage of trade in the place where any part of
performance is to occur shall be used in interpreting the agreement as
to that part of the performance.
(6) (7) Evidence of a relevant usage of trade offered by one party is
not admissible unless and until he the party has given the other party
such notice as the court finds sufficient to prevent unfair surprise to the
latter.
(8) Subject to IC 26-1-2-209, a course of performance is relevant
to show a waiver or modification of any term inconsistent with the
course of performance.
SOURCE: IC 26-1-1-301; (07)IN0419.1.5. -->
SECTION 5. IC 26-1-1-301 IS ADDED TO THE INDIANA CODE
AS A
NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2007]:
Sec. 301. (1) As used in this section:
(a) "domestic transaction" means a transaction other than an
international transaction; and
(b) "international transaction" means a transaction that bears
a reasonable relation to a country other than the United
States.
(2) This section applies to a transaction to the extent the
transaction is governed by another article of the Uniform
Commercial Code.
(3) Except as otherwise provided in this section, an agreement
by the parties to:
(a) a domestic transaction that any or all of the rights and
obligations of the parties are determined by the law of
Indiana or another state is effective whether or not the
transaction bears a relation to the state designated; and
(b) an international transaction that any or all of the rights
and obligations of the parties are determined by the law of
Indiana or another state or country is effective whether or not
the transaction bears a relation to the state or country
designated.
(4) In the absence of an agreement under subsection (3) and
except as provided in subsections (5) and (7), the rights and
obligations of the parties are determined by the law that would be
selected by application of Indiana's conflict of laws principles.
(5) If a party to a transaction is a consumer, the following rules
apply:
(a) An agreement described in subsection (3) is not effective
unless the transaction bears a reasonable relation to the state
or country designated.
(b) The application of the law of the state or country
determined under subsection (3) or (4) may not deprive the
consumer of protection of any rule of law governing a matter
within the scope of this section, which is both protective of
consumers and may not be varied by agreement:
(i) of the state or country in which the consumer
principally resides, unless subparagraph (ii) applies; or
(ii) if the transaction is a sale of goods of the state or
country in which the consumer both makes the contract
and takes delivery of those goods, if such a state or country
is not the state or country in which the consumer
principally resides.
(6) An agreement otherwise effective under subsection (3) is not
effective to the extent that application of the law of the state or
country designated would be contrary to a fundamental policy of
the state or country whose law would govern in the absence of an
agreement under subsection (4).
(7) To the extent that IC 26-1 governs a transaction, if one (1) of
the following provisions of IC 26-1 specifies the applicable law, that
provision governs and a contrary agreement is effective only to the
extent permitted by the specified law:
(a) IC 26-1-2-402.
(b) IC 26-1-2.1-105 and IC 26-1-2.1-106.
(c) IC 26-1-4-102.
(d) IC 26-1-4.1-507.
(e) IC 26-1-5.1-116.
(f) IC 26-1-6.1-103.
(g) IC 26-1-8.1-110.
(h) IC 26-1-9.1-301 through IC 26-1-9.1-307.
SOURCE: IC 26-1-1-302; (07)IN0419.1.6. -->
SECTION 6. IC 26-1-1-302 IS ADDED TO THE INDIANA CODE
AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
1, 2007]: Sec. 302. (1) An obligation may be issued as subordinated
to performance of another obligation of the person obligated, or a
creditor may subordinate the creditor's right to performance of an
obligation by agreement with either the person obligated or
another creditor of the person obligated.
(2) Subordination does not create a security interest as against
either the common debtor or a subordinated creditor.
SOURCE: IC 26-1-2-103; (07)IN0419.1.7. -->
SECTION 7. IC 26-1-2-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. (1) In IC 26-1-2,
unless the context otherwise requires:
(a) "Buyer" means a person who buys or contracts to buy goods.
(b) "Good faith" in the case of a merchant means honesty in fact
and observance of reasonable commercial standards of fair
dealing in the trade.
(c) (b) "Receipt" of goods means taking physical possession of
them.
(d) (c) "Seller" means a person who sells or contracts to sell
goods.
(2) Other definitions applying to IC 26-1-2, or to specified parts
thereof, and the sections in which they appear are:
"Acceptance". IC 26-1-2-606.
"Banker's credit". IC 26-1-2-325.
"Between merchants". IC 26-1-2-104.
"Cancellation". IC 26-1-2-106(4).
"Commercial unit". IC 26-1-2-105.
"Confirmed credit". IC 26-1-2-325.
"Conforming to contract". IC 26-1-2-106.
"Contract for sale". IC 26-1-2-106.
"Cover". IC 26-1-2-712.
"Entrusting". IC 26-1-2-403.
"Financing agency". IC 26-1-2-104.
"Future goods". IC 26-1-2-105.
"Goods". IC 26-1-2-105.
"Identification". IC 26-1-2-501.
"Installment contract". IC 26-1-2-612.
"Letter of credit". IC 26-1-2-325.
"Lot". IC 26-1-2-105.
"Merchant". IC 26-1-2-104.
"Overseas". IC 26-1-2-323.
"Person in the position of seller". IC 26-1-2-707.
"Present sale". IC 26-1-2-106.
"Sale". IC 26-1-2-106.
"Sale on approval". IC 26-1-2-326.
"Sale or return". IC 26-1-2-326.
"Termination". IC 26-1-2-106.
(3) The following definitions apply to IC 26-1-2:
"Check". IC 26-1-3.1-104.
"Consignee". IC 26-1-7-102.
"Consignor". IC 26-1-7-102.
"Consumer goods". IC 26-1-9.1-102.
"Dishonor". IC 26-1-3.1-502.
"Draft". IC 26-1-3.1-104.
(4) In addition, IC 26-1-1 contains general definitions and principles
of construction and interpretation applicable throughout IC 26-1-2.
SOURCE: IC 26-1-2-202; (07)IN0419.1.8. -->
SECTION 8. IC 26-1-2-202 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202. Terms with
respect to which the confirmatory memoranda of the parties agree or
which are otherwise set forth in a writing intended by the parties as a
final expression of their agreement with respect to such terms as are
included therein may not be contradicted by evidence of any prior
agreement or of a contemporaneous oral agreement but may be
explained or supplemented:
(a) by course of dealing or usage of trade (IC 26-1-1-205) or by
course of performance (IC 26-1-2-208); (IC 26-1-1-205); and
(b) by evidence of consistent additional terms, unless the court
finds the writing to have been intended also as a complete and
exclusive statement of the terms of the agreement.
SOURCE: IC 26-1-7-101; (07)IN0419.1.9. -->
SECTION 9. IC 26-1-7-101 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 101. IC 26-1-7 shall be
known and This chapter may be cited as Uniform Commercial Code
. Documents of Title.
SOURCE: IC 26-1-7-102; (07)IN0419.1.10. -->
SECTION 10. IC 26-1-7-102 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 102. (1) (a) In
IC 26-1-7, this chapter unless the context otherwise requires:
(a) (1) "Bailee" means the a person who that by a warehouse
receipt, bill of lading, or other document of title acknowledges
possession of goods and contracts to deliver them.
(2) "Carrier" means a person that issues a bill of lading.
(b) (3) "Consignee" means the a person named in a bill of lading
to whom which or to whose order the bill promises delivery.
(c) (4) "Consignor" means the a person named in a bill of lading
as the person from whom which the goods have been received for
shipment.
(d) (5) "Delivery order" means a written record that contains an
order to deliver goods directed to a warehouseman, warehouse,
carrier, or other person who that in the ordinary course of
business issues warehouse receipts or bills of lading.
(e) "Document" means document of title as defined in the general
definitions in IC 26-1-1-201.
(6) "Good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(f) (7) "Goods" means all things which that are treated as
movable for the purposes of a contract of for storage or
transportation.
(g) (8) "Issuer" means a bailee who that issues a document except
that of title or, in relation to the case of an unaccepted delivery
order, it means the person who that orders the possessor of goods
to deliver. Issuer The term includes any a person for whom
which an agent or employee purports to act in issuing a document
if the agent or employee has real or apparent authority to issue
documents, notwithstanding that even if the issuer received no
did not receive any goods, or that the goods were misdescribed,
or that in any other respect the agent or employees employee
violated his the issuer's instructions.
(9) "Person entitled under the document" means the holder,
in the case of a negotiable document of title, or the person to
which delivery of the goods is to be made by the terms of, or
pursuant to instructions in a record under, a nonnegotiable
document of title.
(10) "Record" means information that is inscribed on a
tangible medium or that is stored in an electronic or other
medium and is retrievable in perceivable form.
(11) "Shipper" means a person that enters into a contract of
transportation with a carrier.
(12) "Sign" means, with present intent to authenticate or
adopt a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an
electronic sound, symbol, or process.
(h) "Warehouseman" is (13) "Warehouse" means a person
engaged in the business of storing goods for hire.
(2) (b) Other definitions applying to IC 26-1-7 this chapter and the
sections in which they appear are:
"Duly negotiate". IC 26-1-7-501.
"Person entitled under the document". IC 26-1-7-403(4).
(3) Definitions in IC 26-1-2 applying to IC 26-1-7 and the sections
in which they appear are:
"Contract for sale". IC 26-1-2-106.
"Overseas". IC 26-1-2-323.
"Lessee in the ordinary course of business".
IC 26-1-2.1-103(o).
"Receipt" of goods. IC 26-1-2-103.
(4) (c) In addition, IC 26-1-1 contains general definitions and
principles of construction and interpretation applicable throughout
IC 26-1-7. this chapter.
SOURCE: IC 26-1-7-103; (07)IN0419.1.11. -->
SECTION 11. IC 26-1-7-103 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 103. To the extent that
(a) This chapter is subject to any treaty or statute of the United States
or regulatory statute of this state or tariff, classification, rule, or
regulation filed or issued pursuant thereto is applicable, the provisions
of IC 26-1-7 are subject thereto. to the extent the treaty, statute, or
regulatory statute applies.
(b) This chapter does not modify or repeal any law prescribing
the form or content of a document of title or the services or
facilities to be afforded by a bailee, or otherwise regulating a
bailee's business in respects not specifically treated in this article.
However, violation of such a law does not affect the status of a
document of title that otherwise is within the definition of a
document of title.
(c) This chapter modifies, limits, and supersedes the federal
Electronic Signatures in Global and National Commerce Act (15
U.S.C. 7001 et seq.) but does not modify, limit, or supersede Section
101(c) of that act (15 U.S.C. 7001(c)) or authorize electronic
delivery of any of the notices described in section 103(b) of that act
(15 U.S.C. 7003(b)).
(d) To the extent there is a conflict between IC 26-2-8 and this
chapter, this chapter governs.
SOURCE: IC 26-1-7-104; (07)IN0419.1.12. -->
SECTION 12. IC 26-1-7-104 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 104. (1) (a) Except as
otherwise provided in subsection (c), a warehouse receipt, bill of
lading or other document of title is negotiable
(a) if by its terms the goods are to be delivered to bearer or to the
order of a named person. or
(b) where recognized in overseas trade, if it runs to a named person
or assigns.
(2) Any other (b) A document of title other than one described in
subsection (a) is nonnegotiable. A bill of lading in which it is stated
that states that the goods are consigned to a named person is not made
negotiable by a provision that the goods are to be delivered only against
a written an order in a record signed by the same or another named
person.
(c) A document of title is nonnegotiable if, at the time it is issued,
the document has a conspicuous legend, however expressed, that it
is nonnegotiable.
SOURCE: IC 26-1-7-105; (07)IN0419.1.13. -->
SECTION 13. IC 26-1-7-105 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 105. The omission from
either part 2 (IC 26-1-7-201 through IC 26-1-7-210) or part 3
(IC 26-1-7-301 through IC 26-1-7-309) of a provision corresponding
to a provision made in the other part does not imply that a
corresponding rule of law is not applicable. (a) Upon request of a
person entitled under an electronic document of title, the issuer of
the electronic document may issue a tangible document of title as
a substitute for the electronic document if:
(1) the person entitled under the electronic document
surrenders control of the document to the issuer; and
(2) the tangible document when issued contains a statement
that it is issued in substitution for the electronic document.
(b) Upon issuance of a tangible document of title in substitution
for an electronic document of title in accordance with subsection
(a):
(1) the electronic document ceases to have any effect or
validity; and
(2) the person that procured issuance of the tangible
document warrants to all subsequent persons entitled under
the tangible document that the warrantor was a person
entitled under the electronic document when the warrantor
surrendered control of the electronic document to the issuer.
(c) Upon request of a person entitled under a tangible document
of title, the issuer of the tangible document may issue an electronic
document of title as a substitute for the tangible document if:
(1) the person entitled under the tangible document
surrenders possession of the document to the issuer; and
(2) the electronic document when issued contains a statement
that it is issued in substitution for the tangible document.
(d) Upon issuance of an electronic document of title in
substitution for a tangible document of title in accordance with
subsection (c):
(1) the tangible document ceases to have any effect or validity;
and
(2) the person that procured issuance of the electronic
document warrants to all subsequent persons entitled under
the electronic document that the warrantor was a person
entitled under the tangible document when the warrantor
surrendered possession of the tangible document to the issuer.
SOURCE: IC 26-1-7-106; (07)IN0419.1.14. -->
SECTION 14. IC 26-1-7-106 IS ADDED TO THE INDIANA
CODE AS A
NEW SECTION TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2007]:
Sec. 106. (a) A person has control of
an electronic document of title if a system employed for evidencing
the transfer of interests in the electronic document reliably
establishes that person as the person to which the electronic
document was issued or transferred.
(b) A system satisfies subsection (a), and a person is deemed to
have control of an electronic document of title, if the document is
created, stored, and assigned in such a manner that:
(1) a single authoritative copy of the document exists that is
unique, identifiable, and, except as otherwise provided in
subdivisions (4), (5), and (6), unalterable;
(2) the authoritative copy identifies the person asserting
control as:
(A) the person to which the document was issued; or
(B) if the authoritative copy indicates that the document
has been transferred, the person to which the document
was most recently transferred;
(3) the authoritative copy is communicated to and maintained
by the person asserting control or its designated custodian;
(4) copies or amendments that add or change an identified
assignee of the authoritative copy can be made only with the
consent of the person asserting control;
(5) each copy of the authoritative copy and any copy of a copy
is readily identifiable as a copy that is not the authoritative
copy; and
(6) any amendment of the authoritative copy is readily
identifiable as authorized or unauthorized.
SOURCE: IC 26-1-7-201; (07)IN0419.1.15. -->
SECTION 15. IC 26-1-7-201 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 201. (1) (a) A
warehouse receipt may be issued by any warehouseman. warehouse.
(2) Where (b) If goods, including distilled spirits and agricultural
commodities, are stored under a statute requiring a bond against
withdrawal or a license for the issuance of receipts in the nature of
warehouse receipts, a receipt issued for the goods has like effect as is
considered to be a warehouse receipt even though if issued by a
person who that is the owner of the goods and is not a warehouseman.
warehouse.
SOURCE: IC 26-1-7-202; (07)IN0419.1.16. -->
SECTION 16. IC 26-1-7-202 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 202.
(1) (a) A
warehouse receipt need not be in any particular form.
(2) (b) Unless a warehouse receipt
embodies within its written or
printed terms provides for each of the following, the
warehouseman
warehouse is liable for damages caused
by the omission to a person
injured
thereby: by its omission:
(a) (1) a statement of the location of the warehouse
facility
where the goods are stored;
(b) (2) the date of issue of the receipt;
(c) (3) the
consecutive number unique identification code of the
receipt;
(d) (4) a statement whether the goods received will be delivered
to the bearer, to a
specified named person, or to a
specified
named person or
his the person's order;
(e) (5) the rate of storage and handling charges,
except that where
unless goods are stored under a field warehousing arrangement,
in which case a statement of that fact is sufficient on a
nonnegotiable receipt;
(f) (6) a description of the goods or
of the packages containing
them;
(g) (7) the signature of the
warehouseman, which may be made by
his authorized warehouse or its agent;
(h) (8) if the receipt is issued for goods
of which that the
warehouseman is owner, warehouse owns, either solely,
or
jointly, or in common with others, the fact of
such that
ownership; and
(i) (9) a statement of the amount of advances made and of
liabilities incurred for which the
warehouseman warehouse
claims a lien or security interest
(IC 26-1-7-209). If unless the
precise amount of
such advances made or
of such liabilities
incurred is, at the time of the issue of the receipt is unknown to
the warehouseman warehouse or to his its agent who issues it,
that issued the receipt, in which case a statement of the fact that
advances have been made or liabilities incurred and the purpose
thereof of the advances or liabilities is sufficient.
(3) (c) A warehouseman warehouse may insert in his its receipt any
other terms which that are not contrary to the provisions of IC 26-1 and
do not impair his its obligation of delivery (IC 26-1-7-403) under
section 403 of this chapter or his its duty of care (IC 26-1-7-204).
under section 204 of this chapter. Any contrary provisions shall be
are ineffective.
SOURCE: IC 26-1-7-203; (07)IN0419.1.17. -->
SECTION 17. IC 26-1-7-203 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 203. A party to or
purchaser for value in good faith of a document of title, other than a bill
of lading, relying in either case that relies upon the description therein
of the goods in the document may recover from the issuer damages
caused by the nonreceipt or misdescription of the goods, except to the
extent that:
(1) the document conspicuously indicates that the issuer does not
know whether all or any part or all of the goods in fact were
received or conform to the description, such as where 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, condition, and quality unknown", "said to contain", or
the like, words of similar import, if such the indication be is
true; or
(2) the party or purchaser otherwise has notice of the nonreceipt
or misdescription.
SOURCE: IC 26-1-7-204; (07)IN0419.1.18. -->
SECTION 18. IC 26-1-7-204 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 204.
(1) (a) A
warehouseman warehouse is liable for damages for loss of or injury to
the goods caused by
his its failure to exercise
such care
in with regard
to
them as the goods that a reasonably careful
man person would
exercise under
like similar circumstances.
but Unless otherwise
agreed,
he the warehouse is not liable for damages
which that could
not have been avoided by the exercise of
such that care.
(2) (b) Damages may be limited by a term in the warehouse receipt
or storage agreement limiting the amount of liability in case of loss or
damage
and setting forth a specific liability per article or item, or value
per unit of weight, beyond which the
warehouseman shall warehouse
is not
be liable.
provided, however, that such liability may on written
Such a limitation is not effective with respect to the warehouse's
liability for conversion to its own use. On request of the bailor in a
record at the time of signing such the storage agreement or within a
reasonable time after receipt of the warehouse receipt, the
warehouse's liability may be increased on part or all of the goods
thereunder, in which covered by the storage agreement or the
warehouse receipt. In this event, increased rates may be charged
based on such an increased valuation but that no such increase shall be
permitted contrary to a lawful limitation of liability contained in the
warehouseman's tariff, if any. No such limitation is effective with
respect to the warehouseman's liability for conversion to his own use.
of the goods.
(3) (c) Reasonable provisions as to the time and manner of
presenting claims and instituting commencing actions based on the
bailment may be included in the warehouse receipt or tariff. storage
agreement.
SOURCE: IC 26-1-7-205; (07)IN0419.1.19. -->
SECTION 19. IC 26-1-7-205 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 205. A buyer in the
ordinary course of business of fungible goods sold and delivered by a
warehouseman who warehouse that is also in the business of buying
and selling such goods takes the goods free of any claim under a
warehouse receipt even though it if the receipt is negotiable and has
been duly negotiated.
SOURCE: IC 26-1-7-206; (07)IN0419.1.20. -->
SECTION 20. IC 26-1-7-206 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 206.
(1) (a) A
warehouseman may on notifying warehouse, by giving notice to the
person on whose account the goods are held and any other person
known to claim an interest in the goods,
may require payment of any
charges and removal of the goods from the warehouse at the
termination of the period of storage fixed by the document
of title, or,
if
no a period is
not fixed, within a stated period not less than thirty
(30) days after the
notification. warehouse gives notice. If the goods
are not removed before the date specified in the
notification, notice, the
warehouseman warehouse may sell them
in accordance with the
provisions of the under section
210 of this chapter on enforcement of
a
warehouseman's warehouse's lien.
(IC 26-1-7-210).
(2) (b) If a
warehouseman warehouse in good faith believes that
the
goods are about to deteriorate or decline in value to less than the
amount of
his its lien within the time
prescribed provided in
subsection
(1) for notification, advertisement, and sale, (a) and section
210 of this chapter, the
warehouseman warehouse may specify in the
notification notice given under subsection (a) any reasonable shorter
time for removal of the goods and,
in case if the goods are not
removed, may sell them at public sale held not less than one (1) week
after a single advertisement or posting.
(3) (c) If, as a result of a quality or condition of the goods of which
the warehouseman had no warehouse did not have notice at the time
of deposit, the goods are a hazard to other property, or to the warehouse
facilities, or to other persons, the warehouseman warehouse may sell
the goods at public or private sale without advertisement or posting on
reasonable notification to all persons known to claim an interest in the
goods. If the warehouseman warehouse, after a reasonable effort, is
unable to sell the goods, he the warehouse may dispose of them in any
lawful manner and shall does not incur no liability by reason of such
the disposition.
(4) The warehouseman must (d) A warehouse shall deliver the
goods to any person entitled to them under IC 26-1-7 this chapter
upon due demand made at any time prior to before sale or other
disposition under this section.
(5) The warehouseman (e) A warehouse may satisfy his its lien
from the proceeds of any sale or disposition under this section but must
shall hold the balance for delivery on the demand of any person to
whom he which the warehouse would have been bound to deliver the
goods.
SOURCE: IC 26-1-7-207; (07)IN0419.1.21. -->
SECTION 21. IC 26-1-7-207 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 207. (1) (a) Unless the
warehouse receipt otherwise provides, a warehouseman must
warehouse shall keep separate the goods covered by each receipt so
as to permit at all times identification and delivery of those goods.
except that However, different lots of fungible goods may be
commingled.
(2) (b) If different lots of fungible goods so are commingled, the
goods are owned in common by the persons entitled thereto and the
warehouseman warehouse is severally liable to each owner for that
owner's share. Where If because of overissue, a mass of fungible goods
is insufficient to meet all the receipts which the warehouseman
warehouse has issued against it, the persons entitled include all
holders to whom which overissued receipts have been duly negotiated.
SOURCE: IC 26-1-7-208; (07)IN0419.1.22. -->
SECTION 22. IC 26-1-7-208 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 208. Where If a blank
in a negotiable tangible warehouse receipt has been filled in without
authority, a good faith purchaser for value and without notice of the
want lack of authority may treat the insertion as authorized. Any other
unauthorized alteration leaves any tangible or electronic warehouse
receipt enforceable against the issuer according to its original tenor.
SOURCE: IC 26-1-7-209; (07)IN0419.1.23. -->
SECTION 23. IC 26-1-7-209 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 209.
(1) (a) A
warehouseman warehouse has a lien against the bailor on the goods
covered by a warehouse receipt
or storage agreement or on the
proceeds thereof in
his 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
like similar charges or expenses in
relation to other goods whenever deposited and it is stated in the
warehouse's receipt
or storage agreement that a lien is claimed for
charges and expenses in relation to other goods, the
warehouseman
warehouse also has a lien against
him for such the goods covered by
the warehouse receipt or storage agreement or on the proceeds
thereof in its possession for the charges and expenses, whether or not
the other goods have been delivered by the
warehouseman. But
warehouse. However, as against a person to
whom which a negotiable
warehouse receipt is duly negotiated, a
warehouseman's warehouse's
lien is limited to charges in an amount or at a rate specified
on in the
warehouse receipt or, if no charges are so specified,
then to a
reasonable charge for storage of the
specific goods covered by the
receipt subsequent to the date of the receipt.
(2) The warehouseman (b) A warehouse may also reserve a security
interest against the bailor for
a the maximum amount specified on the
receipt for charges other than those specified in subsection
(1), (a),
such as for money advanced and interest.
Such a The security interest
is governed by IC 26-1-9.1 on secured transactions.
(3) A warehouseman's (c) A warehouse's lien for charges and
expenses under subsection
(1) (a) or a security interest under
subsection
(2) (b) is also effective against any person
who so that
entrusted the bailor with possession of the goods that a pledge of them
by
him the bailor to a good faith purchaser for value would have been
valid.
but However, the lien or security interest is not effective
against a person
as to whom the document confers no right in the goods
covered by it under IC 26-1-7-503. 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 403 of this
chapter; or
(C) power of disposition under IC 26-1-2-403,
IC 26-1-2.1-304(2), IC 26-1-2.1-305(2), IC 26-1-9.1-320, or
IC 26-1-9.1-321 or any other statute or rule of law; or
(2) acquiesce in the procurement by the bailor or its nominee
of any document.
(d) For purposes of this subsection, "household goods" means
furniture, furnishings, or personal effects used by the depositor in
a dwelling. A warehouse's lien on household goods for charges and
expenses in relation to the goods under subsection (a) is also
effective against all persons if the depositor was the legal possessor
of the goods at the time of deposit.
(4) (e) A warehouseman warehouse loses his its lien on any goods
which he that the warehouse voluntarily delivers or which he
unjustifiably refuses to deliver.
SOURCE: IC 26-1-7-210; (07)IN0419.1.24. -->
SECTION 24. IC 26-1-7-210 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 210.
(1) (a) Except as
otherwise provided in subsection
(2), (b), a
warehouseman's
warehouse's lien may be enforced by public or private sale of the
goods, in
block bulk or in
parcels, packages, at any time or place and
on any terms
which that are commercially reasonable, after notifying
all persons known to claim an interest in the goods.
Such 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
method from that selected by the
warehouseman 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
warehouseman either warehouse sells the goods in the usual manner
in any recognized market therefor,
or if he sells at the price current in
such that market at the time of
his the warehouse's sale, or
if he has
otherwise
sold sells in conformity with commercially reasonable
practices among dealers in the type of goods sold.
he has sold in a
commercially reasonable manner. A sale of more goods than apparently
necessary to be offered to
insure ensure satisfaction of the obligation
is not commercially reasonable except in cases covered by the
preceding sentence.
(2) (b) A
warehouseman's warehouse may enforce its lien on
goods other than goods stored by a merchant in the course of
his its
business
may be enforced only as follows: if the following
requirements are satisfied:
(a) (1) All persons known to claim an interest in the goods must
be notified.
(b) The notification must be delivered in person or sent by
registered letter to the last known address of any person to be
notified.
(c) (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 (10) 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.
(d) (3) The sale must conform to the terms of the notification.
(e) (4) The sale must be held at the nearest suitable place to
that
where the goods are held or stored.
(f) (5) After the expiration of the time given in the notification, an
advertisement of the sale must be published once a week for two
(2) 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
they the goods are being held, and the time and place of
the sale. The sale must take place at least fifteen (15) 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 (10) days before the sale in not
less fewer than
six (6) conspicuous places in the neighborhood of the proposed
sale.
(3) (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
under in complying with this
section. In that event, the goods
must may not be sold but must be
retained by the
warehouseman warehouse subject to the terms of the
receipt and
IC 26-1-7. this chapter.
(4) The warehouseman (d) A warehouse may buy at any public sale
held pursuant to this section.
(5) (e) A purchaser in good faith of goods sold to enforce a
warehouseman's warehouse's lien takes the goods free of any rights of
persons against
whom which the lien was valid, despite
noncompliance
by the
warehouseman warehouse's noncompliance with
the
requirements of this section.
(6) The warehouseman (f) A warehouse may satisfy
his its lien
from the proceeds of any sale pursuant to this section but
must shall
hold the balance, if any, for delivery on demand to any person to whom
he which the warehouse would have been bound to deliver the goods.
(7) (g) The rights provided by this section shall be are in addition
to all other rights allowed by law to a creditor against his a debtor.
(8) Where (h) If a lien is on goods stored by a merchant in the
course of his its business, the lien may be enforced in accordance with
either subsection (1) (a) or (2). (b).
(9) The warehouseman (i) A warehouse is liable for damages
caused by failure to comply with the requirements for sale under this
section and, in case of willful violation, is liable for conversion.
SOURCE: IC 26-1-7-301; (07)IN0419.1.25. -->
SECTION 25. IC 26-1-7-301 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 301. (1) (a) A
consignee of a nonnegotiable bill who of lading that has given value
in good faith, or a holder to whom which a negotiable bill has been
duly negotiated, relying in either case upon the description therein of
the goods in the bill or upon the date therein 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 document 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 where 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 the like, words of similar import, if such that indication be
is true.
(2) When (b) If goods are loaded by an the issuer who is a common
carrier, of a bill of lading:
(1) the issuer must shall count the packages of goods if package
freight shipped in packages and ascertain the kind and quantity
if shipped in bulk; freight. In and
(2) words such cases as "shipper's weight, load, and count" or
other words of similar import indicating that the description was
made by the shipper are ineffective except as to freight goods
concealed by in packages.
(3) When (c) If bulk freight is goods are loaded by a shipper who
that makes available to the issuer of a bill of lading adequate facilities
for weighing such freight, an the goods, the issuer who is a common
carrier must shall ascertain the kind and quantity within a reasonable
time after receiving the written shipper's request of the shipper in a
record to do so. In such cases that case, "shipper's weight" or other
words of like purport similar import are ineffective.
(4) (d) The issuer may of a bill of lading, by inserting including in
the bill the words "shipper's weight, load, and count" or other words of
like purport similar import indicate that the goods were loaded by the
shipper, and if such the statement be is true, the issuer shall is not be
liable for damages caused by the improper loading. But their However,
omission of such words does not imply liability for such damages
caused by improper loading.
(5) The (e) A shipper shall be deemed to have guaranteed
guarantees to the an issuer the accuracy at the time of shipment of the
description, marks, labels, number, kind, quantity, condition, and
weight, as furnished by him; the shipper, and the shipper shall
indemnify the issuer against damage caused by inaccuracies in such
those particulars. The This right of the issuer to such indemnity shall
in no way does not limit his the issuer's responsibility and or liability
under the contract of carriage to any person other than the shipper.
SOURCE: IC 26-1-7-302; (07)IN0419.1.26. -->
SECTION 26. IC 26-1-7-302 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 302. (1) (a) The issuer
of a through bill of lading or other document of title embodying an
undertaking to be performed in part by persons a person acting as its
agents agent or by connecting carriers a performing carrier is liable
to anyone any person entitled to recover on the bill or other document
for any breach by such the other persons person or by a connecting the
performing carrier of its obligation under the bill or other document.
but 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.
(2) Where (b) If goods covered by a through bill of lading or other
document of title embodying an undertaking to be performed in part by
persons a person other than the issuer are received by any such that
person, he the person is subject, with respect to his its own
performance while the goods are in his its possession, to the obligation
of the issuer. His The person's obligation is discharged by delivery of
the goods to another such person pursuant to the bill or other
document and does not include liability for breach by any other such
persons person or by the issuer.
(3) (c) The issuer of such a through bill of lading or other document
shall be of title described in subsection (b) is entitled to recover from
the connecting performing carrier or such 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 anyone any person
entitled to recover on the bill or other document therefor, for the
breach, as may be evidenced by any receipt, judgment, or
transcript thereof; of judgment; and
(2) the amount of any expense reasonably incurred by it the
issuer in defending any action brought commenced by any one
person entitled to recover on the bill or other document therefor.
for the breach.
SOURCE: IC 26-1-7-303; (07)IN0419.1.27. -->
SECTION 27. IC 26-1-7-303 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 303. (1) (a) Unless the
bill of lading otherwise provides, the 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:
(a) (1) the holder of a negotiable bill; or
(b) (2) the consignor on a nonnegotiable bill notwithstanding
even if the consignee has given contrary instruction from the
consignee; or instructions;
(c) (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
(d) (4) the consignee on a nonnegotiable bill if he the consignee
is entitled as against the consignor to dispose of them. the goods.
(2) (b) Unless such instructions described in subsection (a) are
noted on included in a negotiable bill of lading, a person to whom
which the bill is duly negotiated can may hold the bailee according to
the original terms.
SOURCE: IC 26-1-7-304; (07)IN0419.1.28. -->
SECTION 28. IC 26-1-7-304 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 304.
(1) (a) Except
where as customary in
overseas international transportation, a
tangible bill of lading
must may not be issued in a set of parts. The
issuer is liable for damages caused by violation of this subsection.
(2) Where (b) If a
tangible bill of lading is lawfully
drawn issued
in a set of parts, each of which
is numbered 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
constitute
constitutes one (1) bill.
(3) Where (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
whom which the first due negotiation
is made prevails as to both the document
of title and the goods even
though if any later holder may have received the goods from the carrier
in good faith and discharged the carrier's obligation by surrender of his
surrendering its part.
(4) Any (d) A person who that negotiates or transfers a single part
of a tangible bill of lading drawn issued in a set is liable to holders of
that part as if it were the whole set.
(5) (e) The bailee is obliged to shall deliver in accordance with
IC 26-1-7-401 through IC 26-1-7-404 sections 401 through 404 of this
chapter against the first presented part of a tangible bill of lading
lawfully drawn issued in a set. Such Delivery in this manner
discharges the bailee's obligation on the whole bill.
SOURCE: IC 26-1-7-305; (07)IN0419.1.29. -->
SECTION 29. IC 26-1-7-305 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 305. (1) (a) Instead of
issuing a bill of lading to the consignor at the place of shipment, a
carrier may at the request of the consignor procure the bill to be issued
at a destination or at any other place designated in the request.
(2) (b) Upon request of anyone any person entitled as against the
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 such the goods, the issuer, subject to section 105 of this
chapter, may procure a substitute bill to be issued at any place
designated in the request.
SOURCE: IC 26-1-7-307; (07)IN0419.1.30. -->
SECTION 30. IC 26-1-7-307 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 307. (1) (a) A carrier
has a lien on the goods covered by a bill of lading or on the proceeds
from the goods for charges subsequent to after the date of its 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. But 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, then to a reasonable charge.
(2) (b) A lien for charges and expenses under subsection (1) (a) on
goods which 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 such those charges and expenses. Any
other lien under subsection (1) (a) is effective against the consignor
and any person who that permitted the bailor to have control or
possession of the goods unless the carrier had notice that the bailor
lacked such authority.
(3) (c) A carrier loses his its lien on any goods which he that it
voluntarily delivers or which he unjustifiably refuses to deliver.
SOURCE: IC 26-1-7-308; (07)IN0419.1.31. -->
SECTION 31. IC 26-1-7-308 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 308.
(1) (a) A carrier's
lien
on goods may be enforced by public or private sale of the goods,
in
block bulk or in
parcels, packages, at any time or place, and on any
terms
which that are commercially reasonable, after notifying all
persons known to claim an interest in the goods.
Such 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
method from that selected by the carrier is not of
itself sufficient to establish that the sale was not made in a
commercially reasonable manner.
If The carrier
either sells
goods in
a commercially reasonable manner if the carrier sells the goods in
the usual manner in any recognized market therefor,
or if he sells at the
price current in
such that market at the time of
his the sale, or
if he has
otherwise
sold sells in conformity with commercially reasonable
practices among dealers in the type of goods sold.
he has sold in a
commercially reasonable manner. 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.
(2) (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
under in complying with this
section. In that event, the goods
must may not be sold but must be
retained by the carrier, subject to the terms of the bill and
IC 26-1-7.
this chapter.
(3) The (c) A carrier may buy at any public sale pursuant to this
section.
(4) (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
whom which
the lien was valid, despite
the carrier's noncompliance
by the carrier
with
the requirements of this section.
(5) The (e) A carrier may satisfy
his its lien from the proceeds of
any sale pursuant to this section but
must shall hold the balance, if any,
for delivery on demand to any person to
whom he which the carrier
would have been bound to deliver the goods.
(6) (f) The rights provided by this section
shall be are in addition to
all other rights allowed by law to a creditor against
his a debtor.
(7) (g) A carrier's lien may be enforced
in accordance with
pursuant to either subsection (1) (a) or the procedure set forth in
IC 26-1-7-210(2). section 210(b) of this chapter.
(8) The (h) A carrier is liable for damages caused by failure to
comply with the requirements for sale under this section and, in case
of willful violation, is liable for conversion.
SOURCE: IC 26-1-7-309; (07)IN0419.1.32. -->
SECTION 32. IC 26-1-7-309 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 309. (1) (a) A carrier
who that issues a bill of lading, whether negotiable or nonnegotiable,
must shall exercise the degree of care in relation to the goods which a
reasonably careful man person would exercise under like similar
circumstances. This subsection does not repeal or change affect any
law, regulation, or rule of law which that imposes liability upon a
common carrier for damages not caused by its negligence.
(2) (b) Damages may be limited by a provision term in the bill of
lading or in a transportation agreement that the carrier's liability
shall may not exceed a value stated in the document bill or
transportation agreement if the carrier's rates are dependent upon
value and the consignor by the carrier's tariff is afforded an opportunity
to declare a higher value or a value as lawfully provided in the tariff,
or where no tariff is filed he and the consignor is otherwise advised of
such the opportunity. but no However, such a limitation is not
effective with respect to the carriers carrier's liability for conversion
to its own use.
(3) (c) Reasonable provisions as to the time and manner of
presenting claims and instituting commencing actions based on the
shipment may be included in a bill of lading or tariff. a transportation
agreement.
SOURCE: IC 26-1-7-401; (07)IN0419.1.33. -->
SECTION 33. IC 26-1-7-401 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 401. The obligations
imposed by IC 26-1-7 this chapter on an issuer apply to a document
of title regardless of the fact that: even if:
(a) (1) the document may does not comply with the requirements
of IC 26-1-7 this chapter or of any other law statute, rule, or
regulation regarding its issue, issuance, form, or content; or
(b) (2) the issuer may have violated laws regulating the conduct
of his its business; or
(c) (3) the goods covered by the document were owned by the
bailee at the time when the document was issued; or
(d) (4) the person issuing the document does not come within the
definition of warehouseman if it is not a warehouse but the
document purports to be a warehouse receipt.
SOURCE: IC 26-1-7-402; (07)IN0419.1.34. -->
SECTION 34. IC 26-1-7-402 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 402. Neither A
duplicate nor or any other document of title purporting to cover goods
already represented by an outstanding document of the same issuer
confers 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, and substitutes for lost, stolen or
destroyed documents, or substitute documents issued under section
105 of this chapter. But The issuer is liable for damages caused by his
its overissue or failure to identify a duplicate document as such by a
conspicuous notation. on its face.
SOURCE: IC 26-1-7-403; (07)IN0419.1.35. -->
SECTION 35. IC 26-1-7-403 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 403.
(1) The (a) A
bailee
must shall deliver the goods to a person entitled under
the a
document
who of title if the person complies with subsections
(2) (b)
and
(3), (c), unless and to the extent that the bailee establishes any of
the following:
(a) (1) Delivery of the goods to a person whose receipt was
rightful as against the claimant.
(b) (2) Damage to or delay, loss, or destruction of the goods for
which the bailee is not liable.
but the burden of establishing
negligence in such cases is on the person entitled under the
document whenever the claimed loss or destruction resulted from
fire, and the amount of the claimed loss or destruction under the
document exceeds the sum of ten thousand dollars ($10,000).
(c) (3) Previous sale or other disposition of the goods in lawful
enforcement of a lien or on
warehouseman's a warehouse's
lawful termination of storage.
(d) (4) The exercise by a seller of
his its right to stop delivery
pursuant to the provisions of IC 26-1-2-705
or by a lessor of its
right to stop delivery under IC 26-1-2.1-526.
(e) (5) A diversion, reconsignment, or other disposition pursuant
to
the provisions of IC 26-1-7-303 or tariff regulating such right.
section 303 of this chapter.
(f) (6) Release, satisfaction, or any other
fact affording a personal
defense against the claimant.
(g) (7) Any other lawful excuse.
(2) (b) A person claiming goods covered by a document of title
must
shall satisfy the bailee's lien
where if the bailee so requests or
where if
the bailee is prohibited by law from delivering the goods until the
charges are paid.
(3) (c) Unless
the a person claiming
the goods is
one a person
against
whom which the document
confers no of title does not confer
a right under IC 26-1-7-503(1), he must section 503(a) of this
chapter:
(1) the person claiming the goods under a document shall
surrender for cancellation possession or notation control of
partial deliveries any outstanding negotiable document covering
the goods for cancellation or indication of partial deliveries;
and
(2) the bailee must shall cancel the document or conspicuously
note indicate in the document the partial delivery thereon or be
the bailee is liable to any person to whom which the document is
duly negotiated.
(4) "Person entitled under the document" means holder in the case
of a negotiable document, or the person to whom delivery is to be made
by the terms of or pursuant to written instructions under a
nonnegotiable document.
SOURCE: IC 26-1-7-404; (07)IN0419.1.36. -->
SECTION 36. IC 26-1-7-404 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 404. A bailee who that
in good faith including observance of reasonable commercial
standards, has received goods and delivered or otherwise disposed of
them the goods according to the terms of the a document of title or
pursuant to IC 26-1-7 this chapter is not liable therefor. This rule
applies for the goods even though: if:
(1) the person from whom he which the bailee received the goods
had no did not have authority to procure the document or to
dispose of the goods; and even though
(2) the person to whom he which the bailee delivered the goods
had no did not have authority to receive them. the goods.
SOURCE: IC 26-1-7-501; (07)IN0419.1.37. -->
SECTION 37. IC 26-1-7-501 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 501.
(a) The following
rules apply to a negotiable tangible document of title:
(1)
A negotiable document of title running If the document's
original terms run to the order of a named person,
the document
is negotiated by
his the named person's endorsement and
delivery. After
his the named person's endorsement in blank or
to bearer, any person
can may negotiate
it the document by
delivery alone.
(2)(a) A (2) If the negotiable
document of title document's
original terms run to bearer, it is
also negotiated by delivery
alone.
when by its original terms it runs to bearer.
(b) When a document running (3) If the document's original
terms run to the order of a named person
and it is delivered to
him the named person, the effect is the same as if the document
had been negotiated.
(3) (4) Negotiation of a negotiable the document of title after it
has been endorsed to a specified named person requires
endorsement. by the special endorsee as well as delivery.
(4) (5) A negotiable document of title is "duly negotiated" when
it is negotiated in the manner stated in this section to a holder who
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 money 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.
(5) (c) Endorsement of a nonnegotiable document of title neither
makes it negotiable nor adds to the transferee's rights.
(6) (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 nor or constitute notice to a purchaser thereof of the bill of any
interest of such that person in the goods.
SOURCE: IC 26-1-7-502; (07)IN0419.1.38. -->
SECTION 38. IC 26-1-7-502 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 502. (1) (a) Subject to
IC 26-1-7-503 and to the provisions of IC 26-1-7-205 on fungible
goods, sections 205 and 503 of this chapter, a holder to whom which
a negotiable document of title has been duly negotiated acquires
thereby:
(a) (1) title to the document;
(b) (2) title to the goods;
(c) (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
(d) (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 him the issuer except those arising under the terms
of the document or under IC 26-1-7. this chapter. 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.
(2) (b) Subject to IC 26-1-7-503, section 503 of this chapter, title
and rights so acquired by due negotiation are not defeated by any
stoppage of the goods represented by the document of title or by
surrender of such the goods by the bailee and are not impaired even
though: if:
(1) the due negotiation or any prior due negotiation constituted a
breach of duty; or even though
(2) any person has been deprived of possession of the a
negotiable tangible document or control of a negotiable
electronic document by misrepresentation, fraud, accident,
mistake, duress, loss, theft, or conversion; or even though
(3) a previous sale or other transfer of the goods or document has
been made to a third person.
SOURCE: IC 26-1-7-503; (07)IN0419.1.39. -->
SECTION 39. IC 26-1-7-503 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 503.
(1) (a) A
document of title confers no right in goods against a person
who that
before issuance of the document had a legal interest or a perfected
security interest in
them the goods and
who neither: that did not:
(a) delivered (1) deliver or
entrusted them entrust the goods or
any document of title covering
them the goods to the bailor or
his
the bailor's nominee with:
(A) actual or apparent authority to ship, store, or sell;
or with
(B) power to obtain delivery under
IC 26-1-7-403 section 403
of this chapter; or
with
(C) power of disposition under IC 26-1-2-403,
IC 26-1-9.1-320, or other statute or rule of law;
nor or
(b) acquiesced (2) acquiesce in the procurement by the bailor or
his its nominee of any document.
of title.
(2) (b) Title to goods based upon an unaccepted delivery order is
subject to the rights of
anyone any person to
whom which a negotiable
warehouse receipt or bill of lading covering the goods has been duly
negotiated. Such a That title may be defeated under IC 26-1-7-504
section 504 of this chapter to the same extent as the rights of the
issuer or a transferee from the issuer.
(3) (c) Title to goods based upon a bill of lading issued to a freight
forwarder is subject to the rights of anyone any person to whom which
a bill issued by the freight forwarder covering such goods has been is
duly negotiated. but However, delivery by the carrier in accordance
with IC 26-1-7-401 sections 401 through IC 26-1-7-404 404 of this
chapter pursuant to its own bill of lading discharges the carrier's
obligation to deliver.
SOURCE: IC 26-1-7-504; (07)IN0419.1.40. -->
SECTION 40. IC 26-1-7-504 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 504. (1) (a) A
transferee of a document of title, whether negotiable or nonnegotiable,
to whom which the document has been delivered but not duly
negotiated, acquires the title and rights which his that the transferor
had or had actual authority to convey.
(2) (b) In the case of a transfer of a nonnegotiable document of
title, until but not after the bailee receives notification notice of the
transfer, the rights of the transferee may be defeated:
(a) (1) by those creditors of the transferor who that could treat the
sale transfer as void under IC 26-1-2-402 or IC 26-1-2.1-308; or
(b) (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 his the buyer's rights; or
(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
(c) (4) as against the bailee by good faith dealings of the bailee
with the transferor.
(3) (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 they 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.
(4) (d) Delivery of the goods pursuant to a nonnegotiable document
of title may be stopped by a seller under IC 26-1-2-705 or a lessor
under IC 26-1-2.1-526 and subject to the requirement requirements
of due notification there provided in those sections. A bailee honoring
that honors the seller's or lessor's instructions is entitled to be
indemnified by the seller or the lessor against any resulting loss or
expense.
SOURCE: IC 26-1-7-505; (07)IN0419.1.41. -->
SECTION 41. IC 26-1-7-505 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 505. 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 by previous endorsers.
SOURCE: IC 26-1-7-506; (07)IN0419.1.42. -->
SECTION 42. IC 26-1-7-506 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 506. The transferee of
a negotiable tangible document of title has a specifically enforceable
right to have his the transferor supply any necessary endorsement but
the transfer becomes a negotiation only as of the time the endorsement
is supplied.
SOURCE: IC 26-1-7-507; (07)IN0419.1.43. -->
SECTION 43. IC 26-1-7-507 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 507. Where If a person
negotiates or transfers delivers a document of title for value, otherwise
than as a mere intermediary under IC 26-1-7-508, then section 508 of
this chapter, unless otherwise agreed, he warrants to his immediate
purchaser only the transferor, in addition to any warranty made in
selling or leasing the goods, warrants to its immediate purchaser
only that:
(a) that (1) the document is genuine; and
(b) that he (2) the transferor has no knowledge of any fact which
that would impair its the document's validity or worth; and
(c) that his (3) the negotiation or transfer delivery is rightful and
fully effective with respect to the title to the document and the
goods it represents.
SOURCE: IC 26-1-7-508; (07)IN0419.1.44. -->
SECTION 44. IC 26-1-7-508 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 508. 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 such delivery of the documents only
its own good faith and authority This rule applies even though if the
collecting bank or other intermediary has purchased or made
advances against the claim or draft to be collected.
SOURCE: IC 26-1-7-509; (07)IN0419.1.45. -->
SECTION 45. IC 26-1-7-509 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 509. The question
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 governed determined by IC 26-1-2, on sales and IC 26-1-2.1,
or IC 26-1-5.1. on letters of credit.
SOURCE: IC 26-1-7-601; (07)IN0419.1.46. -->
SECTION 46. IC 26-1-7-601 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 601.
(1) (a) If a
document
has been 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 such 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 must post claimant's posting security approved by the court
to indemnify unless it finds that any person who 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 not
negotiable, such security may be required at the discretion of
nonnegotiable, the court may require security. The court may also in
its discretion order payment of the bailee's reasonable costs and counsel
attorney's fees in an action under this subsection.
(2) (b) A bailee who 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. and If the delivery is not in good faith,
becomes the bailee is liable for conversion. Delivery in good faith is
not conversion if made in accordance with a filed classification or tariff
or, where no classification or tariff is filed, 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 who that files a notice of claim within one (1) year after the
delivery.
SOURCE: IC 26-1-7-602; (07)IN0419.1.47. -->
SECTION 47. IC 26-1-7-602 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 602. Except where the
Unless a document of title was originally issued upon delivery of the
goods by a person who had no that did not have power to dispose of
them, no a lien attaches 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 be is first surrendered to the bailee or its the document's
negotiation is enjoined. and The bailee shall may not be compelled to
deliver the goods pursuant to process until possession or control of the
document is surrendered to him the bailee or impounded by the court.
One who purchases A purchaser of the document for value without
notice of the process or injunction takes free of the lien imposed by
judicial process.
SOURCE: IC 26-1-7-603; (07)IN0419.1.48. -->
SECTION 48. IC 26-1-7-603 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2007]: Sec. 603. If more than one
(1) person claims title
to or possession of the goods, the bailee is
excused from
delivering delivery until
he the bailee has
had a
reasonable time to ascertain the validity of the adverse claims or to
bring commence an action
to compel all claimants to interplead and
may compel such for interpleader.
The bailee may assert an
interpleader either in defending an action for nondelivery of the goods
or by original action, whichever is appropriate.
SECTION 49. THE FOLLOWING ARE REPEALED [EFFECTIVE
JULY 1, 2007]: IC 26-1-2-208; IC 26-1-2.1-207.