2018 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 4 - Bank Deposits and Collections
Section 55-4-501 - Handling of documentary drafts; duty to send for presentment and to notify customer of dishonor.

A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not been paid or accepted in due course, shall seasonably notify its customer of the fact even though it may have discounted or bought the draft or extended credit available for withdrawal as of right.

History: 1953 Comp., § 50A-4-501, enacted by Laws 1961, ch. 96, § 4-501; 1992, ch. 114, § 193.

OFFICIAL COMMENTS

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

This section states the duty of a bank handling a documentary draft for a customer. "Documentary draft" is defined in Section 4-104 [55-4-104 NMSA 1978]. The duty stated exists even if the bank has bought the draft. This is because to the customer the draft normally represents an underlying commercial transaction, and if that is not going through as planned the customer should know it promptly. An electronic document of title may be presented through allowing access to the document or delivery of the document. Article 1, Section 1-201 [55-1-201 NMSA 1978] (definition of "delivery").

The 1992 amendment, effective July 1, 1992, made minor stylistic changes.

Seasonable return of documentary drafts. — Payor banks should seasonably return documentary drafts. Shannon v. Sunwest Bank, 1994-NMSC-124, 118 N.M. 749, 887 P.2d 285.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 10 Am. Jur. 2d Banks § 713.

Duties of collecting bank with respect to presenting draft for acceptance, 39 A.L.R.2d 1296.

9 C.J.S. Banks and Banking § 414.