2018 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 3 - Negotiable Instruments
Section 55-3-108 - Payable on demand or at definite time.

(a) A promise or order is "payable on demand" if it (i) states that it is payable on demand or at sight, or otherwise indicates that it is payable at the will of the holder, or (ii) does not state any time of payment.

(b) A promise or order is "payable at a definite time" if it is payable on elapse of a definite period of time after sight or acceptance or at a fixed date or dates or at a time or times readily ascertainable at the time the promise or order is issued, subject to rights of (i) prepayment, (ii) acceleration, (iii) extension at the option of the holder, or (iv) extension to a further definite time at the option of the maker or acceptor or automatically upon or after a specified act or event.

(c) If an instrument, payable at a fixed date, is also payable upon demand made before the fixed date, the instrument is payable on demand until the fixed date and, if demand for payment is not made before that date, becomes payable at a definite time on the fixed date.

History: 1978 Comp., § 55-3-108, enacted by Laws 1992, ch. 114, § 95.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

This section is a restatement of former Section 3-108 and Section 3-109. Subsection (b) broadens former Section 3-109 somewhat by providing that a definite time includes a time readily ascertainable at the time the promise or order is issued. Subsection (b)(iii) and (iv) restates former Section 3-109(1)(d). It adopts the generally accepted rule that a clause providing for extension at the option of the holder, even without a time limit, does not effect negotiability since the holder is given only a right which the holder would have without the clause. If the extension is to be at the option of the maker or the acceptor or is to be automatic, a definite time limit must be stated or the time of payment remains uncertain and the order or promise is not a negotiable instrument. If a definite time limit is stated, the effect upon certainty of time of payment is the same as if the instrument were made payable at the ultimate date with a term providing for acceleration.

Repeals. — Laws 1992, ch. 114, § 237 repealed former 55-3-108 NMSA 1978, as enacted by Laws 1961, ch. 96, § 3-108, relating to payable on demand, effective July 1, 1992. Laws 1992, ch. 114, § 95, enacted a new section, effective July 1, 1992. For provisions of former section, see the 1991 NMSA 1978 on NMOneSource.com.

Negotiability not destroyed by acceleration clause. — Where mortgage provided that upon default in payments the entire indebtedness might be declared at once due and payable, the negotiability of promissory notes, which it secured, was not destroyed. Durham v. Rasco, 1924-NMSC-049, 30 N.M. 16, 227 P. 599, 34 A.L.R. 838 (1924)(decided under former law).

Nor by extension of time proviso. — A provision in a promissory note that any of the parties to it may extend the note without the knowledge or consent of the other parties, retaining the liability of all parties, does not render it nonnegotiable. First Nat'l Bank v. Stover, 1915-NMSC-032, 21 N.M. 453, 155 P. 905, 1916D L.R.A. 1280 (1915)(decided under former law).

Law reviews. — For article, "Breach of the Peace and New Mexico's Uniform Commercial Code," see 4 Nat. Resources J. 85 (1964).

For article, "Essential Attributes of Commercial Paper - Part I," see 1 N.M. L. Rev. 479 (1971).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 11 Am. Jur. 2d Bills and Notes §§ 88, 166, 169 to 178, 186.

Validity of instrument for payment of money as affected by mere fact that payment is postponed until death, 2 A.L.R. 1471.

Negotiability of instrument as affected by incompleteness of the attempt to fix due date, 19 A.L.R. 508.

Negotiability as affected by provisions for extension of time, 77 A.L.R. 1085.

Provision for post-mortem payment or performance as affecting instrument's character and validity as a contract, 1 A.L.R.2d 1178.

When is instrument "payable on demand or at a definite time" as required to constitute negotiable instrument under §§ 3-104(a)(2), 3-108(a,b) of Uniform Commercial Code, 71 A.L.R.5th 443.

10 C.J.S. Bills and Notes §§ 14, 134.