Michigan Laws 440.7601 – Lost, stolen, or destroyed documents of title; delivery of goods or issuance of substitute document; indemnity
Current as of: 2023 | Check for updates
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Terms Used In Michigan Laws 440.7601
- Bailee: means a person that by a warehouse receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them. See Michigan Laws 440.7102
- Delivery: means either of the following:
(i) With respect to an electronic document of title, a voluntary transfer of control. See Michigan Laws 440.1201Document of title: means a record that in the regular course of business or financing is treated as adequately evidencing that the person in possession or control of the record is entitled to receive, control, hold, and dispose of the record and the goods the record covers and that purports to be issued by or addressed to a bailee and to cover goods in the bailee's possession which are either identified or are fungible portions of an identified mass. See Michigan Laws 440.1201 Good faith: means honesty in fact and the observance of reasonable commercial standards of fair dealing. See Michigan Laws 440.7102 Goods: means all things that are treated as movable for the purposes of a contract for storage or transportation. See Michigan Laws 440.7102 Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, public corporation, or any other legal or commercial entity. See Michigan Laws 440.1201
(1) 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 fees in any action under this subsection.
(2) 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 by that delivery. If the delivery is not in good faith, the bailee is liable for conversion. Delivery in good faith is not conversion if the claimant posts security with the bailee in an amount at least double the value of the goods at the time of posting to indemnify any person injured by the delivery which files a notice of claim within 1 year after the delivery.