2018 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 7 - Documents of Title
Section 55-7-505 - Indorser not guarantor for other parties.
The indorsement of a tangible document of title issued by a bailee does not make the indorser liable for any default by the bailee or previous indorsers.
History: 1953 Comp., § 50A-7-505, enacted by Laws 1961, ch. 96, § 7-505; 2005, ch. 144, § 84.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
Prior Uniform Statutory Provision. — Former Section 7-505 [55-7-505 NMSA 1978].
Changes. — Limited to tangible documents of title.
This section is limited to tangible documents of title as the concept of indorsement is irrelevant to electronic documents of title. Electronic documents of title will be transferred by delivery of control. Section 7-106 [55-7-106 NMSA 1978]. The indorsement of a tangible document of title is generally understood to be directed towards perfecting the transferee's rights rather than towards assuming additional obligations. The language of the present section, however, does not preclude the one case in which an indorsement given for value guarantees future action, namely, that in which the bailee has not yet become liable upon the document at the time of the indorsement. Under such circumstances the indorser, of course, engages that appropriate honor of the document by the bailee will occur. See Section 7-502(a)(4) [55-7-502(a)(4) NMSA 1978] as to negotiable delivery orders. However, even in such a case, once the bailee attorns to the transferee, the indorser's obligation has been fulfilled and the policy of this section excludes any continuing obligation on the part of the indorser for the bailee's ultimate actual performance.
Cross References. — Sections 7-106 [ 55-7-106 NMSA 1978] and 7-502 [55-7-502 NMSA 1978].
"Bailee". Section 7-102 [55-7-102 NMSA 1978].
"Document of title". Section 1-201 [55-1-201 NMSA 1978].
"Party". Section 1-201.
Repeals and reenactments. — Laws 2005, ch. 144, § 84, effective January 1, 2006, repealed former 55-7-505 NMSA 1978 as enacted by Laws 1961, ch. 96, § 7-505, and enacted a new section. Pursuant to 12-2A-14 NMSA 1978, the 2005 revision is considered an amendment rather than a new enactment.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Commercial Code § 66; 78 Am. Jur. 2d Warehouses § 71.
Lack of endorsement or irregular endorsement of warehouse receipt or bill of lading as affecting pledge of goods, 18 A.L.R. 588.
93 C.J.S. Warehousemen and Safe Depositaries § 26.
