(a) A person entitled to enforce an instrument, with or without consideration, may discharge the obligation of a party to pay the instrument: (i) by an intentional voluntary act, such as surrender of the instrument to the party; destruction, mutilation or cancellation of the instrument; cancellation or striking out of the party's signature; or the addition of words to the instrument indicating discharge; or (ii) by agreeing not to sue or otherwise renouncing rights against the party by a signed record. The obligation of a party to pay a check is not discharged solely by destruction of the check in connection with a process in which information is extracted from the check and an image of the check is made and, subsequently, the information and image are transmitted for payment. (b) Cancellation or striking out of an indorsement pursuant to Subsection (a) of this section does not affect the status and rights of a party derived from the indorsement. History: 1978 Comp., § 55-3-604, enacted by Laws 1992, ch. 114, § 154; 2009, ch. 234, § 10; 2023, ch. 142, § 24. OFFICIAL COMMENTS UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. 1. Section 3-604 [55-3-604 NMSA 1978] replaces former Section 3-605 [55-3-605 NMSA 1978. 2. The destruction of a check in connection with a truncation process in which information is extracted from the check and an image of the check is made, and then such information and image are transmitted for payment is not within the scope of this section and does not by itself discharge the obligation of a party to pay the instrument. The destruction of the check also does not affect whether the check has been issued. See Section 3-105(a) and Comment 1. 3. Former subsection (c) has been deleted as unnecessary in view of the revised definition of "sign" in Section 1-201 [55-1-201 NMSA 1978]. Repeals. — Laws 1992, ch. 114, § 237 repealed former 55-3-604 NMSA 1978, as enacted by Laws 1961, ch. 96, § 3-604, relating to tender of payment, effective July 1, 1992. Laws 1992, ch. 114, § 154, enacted a new section, effective July 1, 1992. For provisions of former section, see the 1991 NMSA 1978 on NMOneSource.com . For present comparable provisions, see 55-3-603 NMSA 1978. The 2023 amendment, effective January 1, 2024, clarified that the obligation to pay a check is not discharged solely by destruction of the check in connection with certain processes, and removed a provision related to conduct that constitutes signing with respect to a record that is not a writing; in Subsection (a), added "The obligation of a party to pay a check is not discharged solely by destruction of the check in connection with a process in which information is extracted from the check and an image of the check is made and, subsequently, the information and image are transmitted for payment."; and deleted Subsection (c), which provided "As used in this section, 'signed' with respect to a record that is not a writing includes the attachment to or logical association with the record of an electronic symbol, sound or process with the present intent to adopt or accept the record.". The 2009 amendment, effective January 1, 2010, in Subsection (a), at the end of the subsection, deleted "writing" and added "record" and added Subsection (c). Mistaken, unauthorized, or unintentional cancellation. — A cancellation, release, or surrender of the instrument is ineffective if it is unauthorized, unintentional, or done by mistake. Los Alamos Credit Union v. Bowling , 1989-NMSC-002, 108 N.M. 113, 767 P.2d 352. Bank action compromising and settling note balance amounts to complete discharge of all parties, insofar as the bank is concerned; the bank does not thereby discharge a claim of contribution resulting between parties. Farmington Nat'l Bank v. Basin Plastics, Inc. , 1980-NMSC-092, 94 N.M. 668, 615 P.2d 985. Am. Jur. 2d, A.L.R. and C.J.S. references. — 11 Am. Jur. 2d Bills and Notes §§ 934, 935, 948 to 950, 952. Accord and satisfaction by endorsement and transfer of commercial paper by agent having no authority to compromise, 46 A.L.R. 1523. What constitutes renunciation by surrender of negotiable instrument under U.C.C. § 3-605, 96 A.L.R.3d 1144. Unintentional cancellation of negotiable instrument under UCC Article 3, 59 A.L.R.4th 617. 10 C.J.S. Bills and Notes § 231 et seq.
‹ Prev All New Mexico sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.