Duplicate document of title; overissue.
A duplicate or any other document of title purporting to cover goods already represented by an outstanding document of the same issuer 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, substitutes for lost, stolen, or destroyed documents, or substitute documents issued pursuant to section 7-105. The issuer is liable for damages caused by its overissue or failure to identify a duplicate document by a conspicuous notation.
Source:Laws 2005, LB 570, § 83.
Prior Uniform Statutory Provision: Former section 7-402.
Changes: Changes to accommodate electronic documents.
1. This section treats a duplicate which is not properly identified as a duplicate like any other overissue of documents: A
purchaser of such a document acquires no title but only a cause of action for damages against the person that made the deception possible, except in the cases noted in the section. But parts of a tangible bill lawfully issued in a set of parts are not
"overissue" (section 7-304). Of course, if the issuer has clearly indicated that a document is a duplicate so that no one can be
deceived by it, and in fact the duplicate is a correct copy of the original, the issuer is not liable for preparing and delivering
such a duplicate copy.
Section 7-105 allows documents of title to be reissued in another medium. Reissuance of a document in an alternative medium under section 7-105 requires that the original document be surrendered to the issuer in order to make the substitute document the effective document. If the substitute document is not issued in compliance with section 7-105, then the document should be treated as a duplicate under this section.
2. The section applies to nonnegotiable documents to the extent of providing an action for damages for one who acquires an unmarked duplicate from a transferor who knew the facts and would therefor have had no cause of action against the issuer of the duplicate. Ordinarily the transferee of a nonnegotiable document acquires only the rights of its transferor.
3. Overissue is defined so as to exclude the common situation where two valid documents of different issuers are outstanding for the same goods at the same time. Thus freight forwarders commonly issue bills of lading to their customers for small shipments to be combined into carload shipments for which the railroad will issue a bill of lading to the forwarder. So also a warehouse receipt may be outstanding against goods, and the holder of the receipt may issue delivery orders against the same goods. In these cases dealings with the subsequently issued documents may be effective to transfer title; e.g. negotiation of a delivery order will effectively transfer title in the ordinary case where no dishonesty has occurred and the goods are available to satisfy the orders. Section 7-503 provides for cases of conflict between documents of different issuers.
Point 1: Sections 7-105, 7-207, 7-304, and 7-601.
Point 3: Section 7-503.
Definitional Cross References:
"Bill of lading". Section 1-201.
"Conspicuous". Section 1-201.
"Document of title". Section 1-201.
"Fungible goods". Section 1-201.
"Goods". Section 7-102.
"Issuer". Section 7-102.
"Right". Section 1-201.