The following rules apply in an action on a certificated security against the issuer:

1. (1) unless specifically denied in the pleadings, each signature on a security certificate or in a necessary indorsement is admitted;
2. (2) if the effectiveness of a signature is put in issue, the burden of establishing effectiveness is on the party claiming under the signature, but the signature is presumed to be genuine or authorized;
3. (3) if signatures on a security certificate are admitted or established, production of the certificate entitles a holder to recover on it unless the defendant establishes a defense or a defect going to the validity of the security; or

4. (4) if it is shown that a defense or defect exists, the plaintiff has the burden of establishing that the plaintiff or some person under whom the plaintiff claims is a person against whom the defense or defect cannot be asserted.

   OFFICIAL COMMENTS

5. UCC Official Comments © by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
6. This section adapts the rules of negotiable instruments law concerning procedure in actions on instruments, see Section 3-308 [55-3-308 NMSA 1978], to actions on certificated securities governed by this Article. An "action on a security" includes any action or proceeding brought against the issuer to enforce a right or interest that is part of the security, such as an action to collect principal or interest or a dividend, or to establish a right to vote or to receive a new security under an exchange offer or plan of reorganization. This section applies only to certificated securities; actions on uncertificated securities are governed by general evidentiary principles.
7. "Action" Section 1-201(1) [55-1-201 NMSA 1978]
8. "Burden of establishing" Section 1-201(8)
9. "Certificated security" Section 8-102(a)(4) [55-8-102 NMSA 1978]
10. "Indorsement" Section 8-102(a)(11)
11. "Issuer" Section 8-201 [55-8-201 NMSA 1978]
12. "Presumed" Section 1-201(31)
13. "Security" Section 8-102(a)(15)
14. "Security certificate" Section 8-102(a)(16)

History: 1978 Comp., § 55-8-114, enacted by Laws 1996, ch. 47, § 18.