Judicial process against goods covered by negotiable document of title

84-7-602. Judicial process against goods covered by negotiable document of title. Unless a document of title was originally issued upon delivery of the goods by a person that did not have power to dispose of them, a lien does not attach by virtue of any judicial process to goods in the possession of a bailee for which a negotiable document of title is outstanding unless possession or control of the document is first surrendered to the bailee or the document's negotiation is enjoined. The bailee may not be compelled to deliver the goods pursuant to process until possession or control of the document is surrendered to the bailee or to the court. A purchaser of the document for value without notice of the process or injunction takes free of the lien imposed by judicial process. History: L. 2007, ch. 90, § 40; July 1, 2008. KANSAS COMMENT, 1996 This section is in accord with former K.S.A. 82-125 and present K.S.A. 34-264. While the Code is silent on the point, it is well understood that attachment is not prevented by an outstanding nonnegotiable document of title. This section places limitations on seizure by judicial process when a negotiable document of title is outstanding. Former K.S.A. 82-126 allowed a creditor to seek the aid of the courts in attaching a negotiable warehouse receipt of the debtor. Similar authority is found in K.S.A. 34-264 and 34-265. The Code has no such provision, however, and any authorization or procedure for seizure under this section must be found outside the Code. When a negotiable document of title is outstanding, title and rights acquired by due negotiation are not defeated by surrender of the goods by the bailee. To protect both the holder of the document and the bailee, this section follows prior law in providing that no lien attaches by virtue of legal process unless the document is first surrendered or its negotiation is enjoined. A bona fide purchaser of the document takes free of the lien even after an injunction has been granted, unless the document was originally issued upon delivery of the goods by a person who had no power to dispose of them. Revisor's Note: Former section 84-7-602 repealed by L. 2007, ch. 90, § 78 and the number reassigned to the current text.