For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of Section 55-3-302 NMSA 1978 on what constitutes a holder in due course.
History: 1953 Comp., § 50A-4-209, enacted by Laws 1961, ch. 96, § 4-209; 1978 Comp., § 55-4-209, recompiled as 1978 Comp., § 55-4-211 by Laws 1992, ch. 114, § 177.
OFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
The section completes the thought of the previous section and makes clear that a security interest in an item is "value" for the purpose of determining the holder's status as a holder in due course. The provision is in accord with the prior law (N.I.L. Section 27) and with Article 3 (Section 3-303) [55-3-303 NMSA 1978]. The section does not prescribe a security interest under Section 4-210 [55-4-210 NMSA 1978] as a test of "value" generally because the meaning of "value" under other Articles is adequately defined in Section 1-201 [55-1-201 NMSA 1978].
Repeals. — Laws 1992, ch. 114, § 237B repealed former 55-4-211 NMSA 1978, as enacted by Laws 1961, ch. 96, § 4-211, relating to media of remittance, effective July 1, 1992. For provisions of former section, see the 1991 NMSA 1978 on NMOneSource.com.
The 1992 amendment, effective July 1, 1992, substituted "Section 55-3-302 NMSA 1978" for "Section 3-302" and made minor stylistic changes throughout the section.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 10 Am. Jur. 2d Banks § 694; 11 Am. Jur. 2d Bills and Notes §§ 337, 339.
Crediting proceeds of negotiable paper to depositor's account, as constituting bank a holder in due course, 59 A.L.R.2d 1173.
9 C.J.S. Banks and Banking § 383 et seq.; 10 C.J.S. Bills and Notes §§ 185, 186.
Structure 2021 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 4 - Bank Deposits and Collections
Part 2 - COLLECTION OF ITEMS - DEPOSITARY AND COLLECTING BANKS
Section 55-4-202 - Responsibility for collection or return; when action timely.
Section 55-4-203 - Effect of instructions.
Section 55-4-204 - Methods of sending and presenting; sending directly to payor bank.
Section 55-4-205 - Depositary bank holder of unindorsed item.
Section 55-4-206 - Transfer between banks.
Section 55-4-207 - Transfer warranties.
Section 55-4-208 - Presentment warranties.
Section 55-4-209 - Encoding and retention warranties.
Section 55-4-211 - When bank gives value for purposes of holder in due course.
Section 55-4-213 - Medium and time of settlement by bank.
Section 55-4-214 - Right of charge-back or refund; liability of collecting bank; return of item.