Replacement of lost, destroyed, or wrongfully taken security certificate.
(a) If an owner of a certificated security, whether in registered or bearer form, claims that the certificate has been lost, destroyed, or wrongfully taken, the issuer shall issue a new certificate if the owner:
(1) so requests before the issuer has notice that the certificate has been acquired by a protected purchaser;
(2) files with the issuer a sufficient indemnity bond; and
(3) satisfies other reasonable requirements imposed by the issuer.
(b) If, after the issue of a new security certificate, a protected purchaser of the original certificate presents it for registration of transfer, the issuer shall register the transfer unless an overissue would result. In that case, the issuer's liability is governed by section 8-210. In addition to any rights on the indemnity bond, an issuer may recover the new certificate from a person to whom it was issued or any person taking under that person, except a protected purchaser.
Source:Laws 1995, LB 97, § 42.
1. This section enables the owner to obtain a replacement of a lost, destroyed, or stolen certificate, provided that reasonable requirements are satisfied and a sufficient indemnity bond supplied.
2. Where an "original" security certificate has reached the hands of a protected purchaser, the registered owner — who was in the best position to prevent the loss, destruction, or theft of the security certificate — is now deprived of the new security certificate issued as a replacement. This changes the pre-Uniform Commercial Code law under which the original certificate was ineffective after the issue of a replacement except insofar as it might represent an action for damages in the hands of a purchaser for value without notice. Keller v. Eureka Brick Mach. Mfg. Co., 43 Mo.App. 84, 11 L.R.A. 472 (1890). Where both the original and the new certificate have reached protected purchasers the issuer is required to honor both certificates unless an overissue would result and the security is not reasonably available for purchase. See section 8-210. In the latter case alone, the protected purchaser of the original certificate is relegated to an action for damages. In either case, the issuer itself may recover on the indemnity bond.
Definitional Cross References:
"Bearer form". Section 8-102(a)(2).
"Certificated security". Section 8-102(a)(4).
"Issuer". Section 8-201.
"Notice". Section 1-201(25).
"Overissue". Section 8-210.
"Protected purchaser". Section 8-303.
"Registered form". Section 8-102(a)(13).
"Security certificate". Section 8-102(a)(16).