Printable Format84-8-406. Obligation to notify issuer of lost, destroyed or wrongfully taken security certificate. If a security certificate has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact within a reasonable time after the owner has notice of it and the issuer registers a transfer of the security before receiving notification, the owner may not assert against the issuer a claim for registering the transfer under K.S.A. 84-8-404 or a claim to a new security certificate under K.S.A. 84-8-405.
History: L. 1996, ch. 202, § 66; July 1.
KANSAS COMMENT, 1996
This section is a modification of the former 84-8-405(1). It is identical to the Official Text.
An owner who fails to notify the issuer of a lost, destroyed or stolen security certificate within a reasonable time is precluded from claiming rights against the issuer for wrongful registration under 84-8-404 and the owner may not request replacement of the certificate under 84-8-405 if the security has been registered before the owner notifies the issuer of the loss. This section is somewhat analogous to 84-4-406, the bank statement rule. The section will preclude an action by the owner even if the indorsement has been forged. The owner will have an action against the converter.
If the certificated security has not been registered, the section has no operation and the owner can use the procedures in 84-4-8-404 and 84-8-405. If the certificated security was in bearer form, or indorsed in blank, the request for registration would not be appropriate but would be effective (84-8-107) and a registration would not be wrongful.
Revisor's Note:
Former section 84-8-406 was repealed by L. 1996, ch. 202, § 91 and the number reassigned to the current text.