Colorado § 4-7-403 - Obligation of bailee to deliver - excuse.

§ 4-7-403. Obligation of bailee to deliver - excuse.

(a) A bailee shall deliver the goods to a person entitled under a document of title if the person complies with subsections (b) and (c) of this section, unless and to the extent that the bailee establishes any of the following:

(1) Delivery of the goods to a person whose receipt was rightful as against the claimant;

(2) Damage to or delay, loss, or destruction of the goods for which the bailee is not liable;

(3) Previous sale or other disposition of the goods in lawful enforcement of a lien or on a warehouse's lawful termination of storage;

(4) The exercise by a seller of its right to stop delivery pursuant to section 4-2-705 or by a lessor of its right to stop delivery pursuant to section 4-2.5-526;

(5) A diversion, reconsignment, or other disposition pursuant to section 4-7-303;

(6) Release, satisfaction, or any other personal defense against the claimant; or

(7) Any other lawful excuse.

(b) A person claiming goods covered by a document of title shall satisfy the bailee's lien if the bailee so requests or if the bailee is prohibited by law from delivering the goods until the charges are paid.

(c) Unless a person claiming the goods is a person against which the document of title does not confer a right under section 4-7-503 (a):

(1) The person claiming under a document shall surrender possession or control of any outstanding negotiable document covering the goods for cancellation or indication of partial deliveries; and

(2) The bailee shall cancel the document or conspicuously indicate in the document the partial delivery or the bailee is liable to any person to which the document is duly negotiated.

Source: L. 2006: Entire article R&RE, p. 483, § 2, effective September 1. L. 2007: IP(a), (a)(6), (b), IP(c), and (c)(2) amended, p. 371, § 17, effective August 3.

Editor's note: This section is similar to former § 4-7-403 as it existed prior to 2006.

ANNOTATION

Release of goods to dealer as defense. In action for conversion of goods stored by plaintiff with named defendant, if the plaintiff either instructed defendant to receive and store the goods for a dealer or delivered them under such circumstances as to give defendant reasonable ground to believe that plaintiff intended that the goods be held for the dealer, and defendant released said goods to the dealer, in good faith, without knowledge or information that plaintiff intended to hold the goods until payment by dealer, such constitutes a defense to plaintiff's action; but defendant warehouseman, having admitted the receipt of goods from plaintiff in the usual course of its warehouse business, the burden of going forward with the evidence is on defendant to justify delivery to one other than plaintiff. Wheelock Bros. v. Bankers Whse. Co., 115 Colo. 197, 171 P.2d 405 (1946) (decided under repealed CSA, C. 173, § 8, uniform warehouse receipts act).