1. (a) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable "as originally drawn" or equivalent terms, (ii) if the acceptance varies the terms of the draft, according to the terms of the draft as varied, or (iii) if the acceptance is of a draft that is an incomplete instrument, according to its terms when completed, to the extent stated in Sections 55-3-115 and 55-3-407 NMSA 1978. The obligation is owed to a person entitled to enforce the draft or to the drawer or an indorser who paid the draft under Section 55-3-414 or 55-3-415 NMSA 1978.

2. (b) If the certification of a check or other acceptance of a draft states the amount certified or accepted, the obligation of the acceptor is that amount. If (i) the certification or acceptance does not state an amount, (ii) the amount of the instrument is subsequently raised, and (iii) the instrument is then negotiated to a holder in due course, the obligation of the acceptor is the amount of the instrument at the time it was taken by the holder in due course.

   OFFICIAL COMMENTS

3. UCC Official Comments © by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
4. Subsection (a) is consistent with former Section 3-413(1) [55-3-413 NMSA 1978]. Subsection (b) has primary importance with respect to certified checks. It protects the holder in due course of a certified check that was altered after certification and before negotiation to the holder in due course. A bank can avoid liability for the altered amount by stating on the check the amount the bank agrees to pay. The subsection applies to other accepted drafts as well. The rule of this section is similar to the rule of Articles 41 of the Convention on International Bills of Exchange and International Promissory Notes. Articles 42 and 43 of the Convention include more detailed rules that in many respects do not have parallels in this Article.

History: 1978 Comp., § 55-3-413, enacted by Laws 1992, ch. 114, § 138.

ANNOTATIONS

Repeals. — Laws 1992, ch. 114, § 237 repealed former 55-3-413 NMSA 1978, as enacted by Laws 1961, ch. 96, § 3-413, relating to contract of maker, drawer and acceptor, effective July 1, 1992. Laws 1992, ch. 114, § 138, enacted a new section, effective July 1, 1992. For provisions of former section, see the 1991 NMSA 1978 on NMOneSource.com.

Maker of promissory note is "primarily liable" thereon although he signs only for accommodation. First Sav. Bank & Trust Co. v. Flournoy, 1917-NMSC-093, 24 N.M. 256, 171 P. 793 (decided under former law).

Effect of acceptance of bill of exchange is to constitute the acceptor the principal debtor. By the act of acceptance, he assumes to pay the order or bill, and becomes the principal debtor for the amount specified; the acceptance being an admission of everything essential to the existence of such liability. Clayton Townsite Co. v. Clayton Drug Co., 1915-NMSC-025, 20 N.M. 185, 147 P. 460 (decided under former law).

Unauthorized grant of extension. — Although a surety or accommodation party to a note may be discharged when the holder unauthorizedly grants an extension, the maker of the note does not have this defense available. Sunwest Bank v. Kennedy, 1990-NMSC-004, 109 N.M. 400, 785 P.2d 740.

Law reviews. — For article, "New Mexico's Uniform Commercial Code: Who Is the Beneficiary of the Stop Payment Provisions of Article 4?" see 4 Nat. Resources J. 69 (1964).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 11 Am. Jur. 2d Bills and Notes §§ 586, 589, 593, 597, 1005.

Insanity of drawer or indorser as defense against holder in due course, 24 A.L.R.2d 1380.

10 C.J.S. Bills and Notes § 12 et seq.