2018 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 9 - Secured Transactions
Section 55-9-307 - Location of debtor.
(a) In this section, "place of business" means a place where a debtor conducts its affairs.
(b) Except as otherwise provided in this section, the following rules determine a debtor's location:
(1) a debtor who is an individual is located at the individual's principal residence;
(2) a debtor that is an organization and has only one place of business is located at its place of business; and
(3) a debtor that is an organization and has more than one place of business is located at its chief executive office.
(c) Subsection (b) of this section applies only if a debtor's residence, place of business or chief executive office, as applicable, is located in a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording or registration system as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral. If Subsection (b) of this section does not apply, the debtor is located in the District of Columbia.
(d) A person that ceases to exist, have a residence or have a place of business continues to be located in the jurisdiction specified by Subsections (b) and (c) of this section.
(e) A registered organization that is organized under the law of a state is located in that state.
(f) Except as otherwise provided in Subsection (i) of this section, a registered organization that is organized under the law of the United States and a branch or agency of a bank that is not organized under the law of the United States or a state are located:
(1) in the state that the law of the United States designates if the law designates a state of location;
(2) in the state that the registered organization, branch or agency designates if the law of the United States authorizes the registered organization, branch or agency to designate its state of location, including by designating its main office, home office or other comparable office; or
(3) in the District of Columbia if neither Paragraph (1) nor Paragraph (2) of this subsection applies.
(g) A registered organization continues to be located in the jurisdiction specified by Subsection (e) or (f) of this section notwithstanding:
(1) the suspension, revocation, forfeiture or lapse of the registered organization's status as such in its jurisdiction of organization; or
(2) the dissolution, winding up or cancellation of the existence of the registered organization.
(h) The United States is located in the District of Columbia.
(i) A branch or agency of a bank that is not organized under the law of the United States or a state is located in the state in which the branch or agency is licensed if all branches and agencies of the bank are licensed in only one state.
(j) A foreign air carrier under the Federal Aviation Act of 1958, as amended, is located at the designated office of the agent upon which service of process may be made on behalf of the carrier.
(k) This section applies only for purposes of Sections 55-9-301 through 55-9-342 NMSA 1978.
History: 1978 Comp., § 55-9-307, enacted by Laws 2001, ch. 139, § 27; 2013, ch. 137, § 5.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
1. Source. Former section 9-103(3)(d), substantially revised.
2. General Rules. As a general matter, the location of the debtor determines the jurisdiction whose law governs perfection of a security interest. See Sections 9-301(1), 9-305(c) [55-9-30155 NMSA 1978]. It also governs priority of a security interest in certain types of intangible collateral, such as accounts, electronic chattel paper, and general intangibles. This section determines the location of the debtor for choice-of-law purposes, but not for other purposes. See Subsection (k).
Subsection (b) states the general rules: An individual debtor is deemed to be located at the individual's principal residence with respect to both personal and business assets. Any other debtor is deemed to be located at its place of business if it has only one, or at its chief executive office if it has more than one place of business.
As used in this section, a "place of business" means a place where the debtor conducts its affairs. See Subsection (a). Thus, every organization, even eleemosynary institutions and other organizations that do not conduct "for profit" business activities, has a "place of business." Under Subsection (d), a person who ceases to exist, have a residence, or have a place of business continues to be located in the jurisdiction determined by Subsection (b).
The term "chief executive office" is not defined in this section or elsewhere in the Uniform Commercial Code. "Chief executive office" means the place from which the debtor manages the main part of its business operations or other affairs. This is the place where persons dealing with the debtor would normally look for credit information, and is the appropriate place for filing. With respect to most multi-state debtors, it will be simple to determine which of the debtor's offices is the "chief executive office." Even when a doubt arises, it would be rare that there could be more than two possibilities. A secured party in such a case may protect itself by perfecting under the law of each possible jurisdiction.
Similarly, the term "principal residence" is not defined. If the security interest in question is a purchase-money security interest in consumer goods which is perfected upon attachment, see Section 9-309(1) [55-9-309(1) NMSA 1978], the choice of law may make no difference. In other cases, when a doubt arises, prudence may dictate perfecting under the law of each jurisdiction that might be the debtor's "principal residence."
Questions sometimes arise about the location of the debtor with respect to collateral held in a common-law trust. A typical common-law trust is not itself a juridical entity capable of owning property and so would not be a "debtor" as defined in Section 9-102 [55-9-102 NMSA 1978]. Rather, the debtor with respect to property held in a common-law trust typically is the trustee of the trust acting in the capacity of trustee. (The beneficiary would be a "debtor" with respect to its beneficial interest in the trust, but not with respect to the property held in the trust.) If a common-law trust has multiple trustees located in different jurisdictions, a secured party who perfects by filing would be well advised to file a financing statement in each jurisdiction in which a trustee is located, as determined under Section 9-307 [55-9-307 NMSA 1978]. Filing in all relevant jurisdictions would insure perfection and minimize any priority complications that otherwise might arise.
The general rules are subject to several exceptions, each of which is discussed below.
3. Non-U.S. Debtors. Under the general rules of this section, a non-U.S. debtor often would be located in a foreign jurisdiction and, as a consequence, foreign law would govern perfection. When foreign law affords no public notice of security interests, the general rule yields unacceptable results.
Accordingly, subsection (c) provides that the normal rules for determining the location of a debtor (i.e., the rules in subsection (b)) apply only if they yield a location that is "a jurisdiction whose law generally requires information concerning the existence of a nonpossessory security interest to be made generally available in a filing, recording, or registration system as a condition or result of the security interest's obtaining priority over the rights of a lien creditor with respect to the collateral." The phrase "generally requires" is meant to include legal regimes that generally require notice in a filing or recording system as a condition of perfecting nonpossessory security interests, but which permit perfection by another method (e.g., control, automatic perfection, temporary perfection) in limited circumstances. A jurisdiction that has adopted this Article or an earlier version of this Article is such a jurisdiction. If the rules in subsection (b) yield a jurisdiction whose law does not generally require notice in a filing or registration system and none of the special rules in subsections (e), (f), (i), and (j) applies, the debtor is located in the District of Columbia.
4. Registered Organizations Organized Under Law of a State. Under subsection (e), a "registered organization" (defined in Section 9-102 [55-9-102 NMSA 1978] so as to ordinarily include corporations, limited partnerships, limited liability companies, and statutory trusts) organized under the law of a "State" (defined in Section 9-102) is located in its State of organization. The term "registered organization" includes a business trust described in the second sentence of the term's definition. See Section 9-102. The trust's public organic record, typically the trust agreement, usually will indicate the jurisdiction under whose law the trust is organized.
Subsection (g) makes clear that events affecting the status of a registered organization, such as the dissolution of a corporation or revocation of its charter, do not affect its location for purposes of subsection (e). However, certain of these events may result in, or be accompanied by, a transfer of collateral from the registered organization to another debtor. This section does not determine whether a transfer occurs, nor does it determine the legal consequences of any transfer.
Determining the registered organization-debtor's location by reference to the jurisdiction of organization could provide some important side benefits for the filing systems. A jurisdiction could structure its filing system so that it would be impossible to make a mistake in a registered organization-debtor's name on a financing statement. For example, a filer would be informed if a filed record designated an incorrect corporate name for the debtor. Linking filing to the jurisdiction of organization also could reduce pressure on the system imposed by transactions in which registered organizations cease to exist as a consequence of merger or consolidation, for example. The jurisdiction of organization might prohibit such transactions unless steps were taken to ensure that existing filings were refiled against a successor or terminated by the secured party.
5. Registered Organizations Organized Under Law of United States; Branches and Agencies of Banks Not Organized Under Law of United States. Subsection (f) specifies the location of a debtor that is a registered organization organized under the law of the United States. It defers to the law of the United States, to the extent that that law determines, or authorizes the debtor to determine, the debtor's location. Thus, if the law of the United States designates a particular State as the debtor's location, that State is the debtor's location for purposes of this Article's choice-of-law rules. Similarly, if the law of the United States authorizes the registered organization to designate its State of location, the State that the registered organization designates is the State in which it is located for purposes of this Article's choice-of-law rules. In other cases, the debtor is located in the District of Columbia.
In some cases, the law of the United States authorizes the registered organization to designate a main office, home office, or other comparable office. See, e.g., 12 U.S.C. Sections 22 and 1464(a); 12 C.F.R. Section 552.3. Designation of such an office constitutes the designation of the State of location for purposes of Section 9-307(f)(2) [55-9-307(f)(2) NMSA 1978].
Subsection (f) also specifies the location of a branch or agency in the United States of a foreign bank that has one or more branches or agencies in the United States. The law of the United States authorizes a foreign bank (or, on behalf of the bank, a federal agency) to designate a single home state for all of the foreign bank's branches and agencies in the United States. See 12 U.S.C. Section 3103(c) and 12 C.F.R. Section 211.22. As authorized, the designation constitutes the State of location for the branch or agency for purposes of Section 9-307(f) [55-9-307(f) NMSA 1978], unless all of a foreign bank's branches or agencies that are in the United States are licensed in only one State, in which case the branches and agencies are located in that State. See subsection (i).
In cases not governed by subsection (f) or (i), the location of a foreign bank is determined by subsections (b) and (c).
6. United States. To the extent that Article 9 governs (see Sections 1-301, 9-109(c) [55-1-301, 55-9-109(c) NMSA 1978]), the United States is located in the District of Columbia for purposes of this Article's choice-of-law rules. See Subsection (h).
7. Foreign Air Carriers. Subsection (j) [(k)] follows former section 9-103(3)(d). To the extent that it is applicable, the Convention on the International Recognition of Rights in Aircraft (Geneva Convention) supersedes state legislation on this subject, as set forth in section 9-311(b), but some nations are not parties to that convention.
Repeals and reenactments. — Laws 2001, ch. 139, § 27 repealed former 55-9-307 NMSA 1978, as amended by Laws 1987, ch. 177, § 15, and enacted a new section, effective July 1, 2001.
The 2013 amendment, effective July 1, 2013, permitted a registered organization to designate its location by designating its main office, home office or other comparable office; and in Paragraph (2) of Subsection (f), after "its state of location", added the remainder of the sentence.
Federal Aviation Act of 1958. — The Federal Aviation Act of 1958, referred to in Subsection (j), was codified primarily as 49 U.S.C. § 1301 et seq. Those provisions have subsequently been revised or repealed, and present comparable provisions appear as 49 U.S.C. § 40101 et seq.
