1. (a) A person not in possession of an instrument is entitled to enforce the instrument if:

   1. (1) The person seeking to enforce the instrument:

      1. (A) Was entitled to enforce the instrument when loss of possession occurred; or
      2. (B) Has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;
   2. (2) The loss of possession was not the result of a transfer by the person or a lawful seizure; and
   3. (3) The person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
2. (b) A person seeking enforcement of an instrument under subsection (a) of this section must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, section 28:3-308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

Uniform Commercial Code Comment

Under Section 3-309 adequate protection is a flexible concept. For example, there is substantial risk that a holder in due course may make a demand for payment if the instrument was payable to bearer when it was lost or stolen. On the other hand if the instrument was payable to the person who lost the instrument and that person did not indorse the instrument, no other person could be a holder of the instrument. In some cases there is risk of loss only if there is doubt about whether the facts alleged by the person who lost the instrument are true. Thus, the type of adequate protection that is reasonable in the circumstances may depend on the degree of certainty about the facts in the case.

Section 3-309 is a modification of former Section 3-804. The rights stated are those of “a person entitled to enforce the instrument“ at the time of loss rather than those of an ‘’owner“ as in former Section 3-804. Under subsection (b), judgment to enforce the instrument cannot be given unless the court finds that the defendant will be adequately protected against a claim to the instrument by a holder that may appear at some later time. The court is given discretion in determining how adequate protection is to be assured. Former Section 3-804 allowed the court to “require security indemnifying the defendant against loss.”

History

Mar. 23, 1995, D.C. Law 10-249, § 2(d), 42 DCR 467

Apr. 27, 2013, D.C. Law 19-299, § 5(g), 60 DCR 2634

Effect of Amendments

The 2013 amendment by D.C. Law 19-299 rewrote (a).

Prior Codifications

1981 Ed., § 28:3-309.

Section References

This section is referenced in § 28:3-301 and § 28:3-312.