HOUSE BILL 182

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Zachary J. Cook

FOR THE COURTS, CORRECTIONS AND JUSTICE COMMITTEE

AN ACT

RELATING TO PROPERTY; AMENDING THE UNIFORM COMMERCIAL CODE; PROVIDING THAT THE TRANSFEREE OF A NOTE CAN ENFORCE IT IF A DIRECT OR INDIRECT TRANSFEROR COULD HAVE ENFORCED IT; PROVIDING FOR A LOST-NOTE AFFIDAVIT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 55-3-309 NMSA 1978 (being Laws 1992, Chapter 114, Section 122) is amended to read:

      "55-3-309. ENFORCEMENT OF LOST, DESTROYED OR STOLEN INSTRUMENT--LOST-NOTE AFFIDAVIT.--

          (a) A person not in possession of an instrument is entitled to enforce the instrument if (i) the person seeking to enforce the instrument was [in possession of the instrument and] entitled to enforce [it] the instrument when loss of possession occurred or has directly or indirectly acquired ownership of the instrument from a person that was entitled to enforce the instrument when loss of possession occurred, (ii) the loss of possession was not the result of a transfer by the person or a lawful seizure and (iii) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

          (b) A person seeking enforcement of an instrument under Subsection (a) of this section must prove the terms of the instrument and the person's right to enforce the instrument. If that proof is made, Section 55-3-308 NMSA 1978 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

          (c) In an action to foreclose a lien on real property that is secured by the instrument, the creditor must attest to the facts required by Subsection (a) of this section in (i) a verified complaint or (ii) an affidavit or a statement affirmed under penalty of perjury under the law of New Mexico and attached to the complaint. An affidavit substantially in the following form is sufficient:

"LOST-NOTE AFFIDAVIT

                                  [Name of affiant] (Affiant)

_____________________________________________________________ being sworn deposes and says:

1. Affiant is [Title or

________________________________________________________ position] of [Name of creditor]

_____________________________________________________________ (Lender) and is authorized to make this affidavit on Lender's behalf.

2. Lender is the legal owner of a promissory note (Note) executed by

_______________________________________________________________

_______________________________________________________________

[Name(s) of obligor(s)] in the original principal amount of

$ [dollar amount], dated

__________________________________________________________

                    [insert date] and secured by

________________________________________________

                               [Name of instrument] recorded in

_______________________________________________________________

                                 [recording reference]. Lender

_______________________________________________________________

has not sold, assigned, pledged, or otherwise transferred the Note to any person. The Note is free and clear of all claims and encumbrances.

3. The Note is lost, destroyed, or stolen and for this reason cannot be produced.

4. On [insert date], Affiant made a diligent search for the Note by personal examination of the books and records of Lender, as follows:

_______________________________________________________________

_______________________________________________________________

[describe search efforts, including the books and records examined by Affiant]

                                 [Name of affiant].

___________________________________________________

[ADD ACKNOWLEDGMENT]"."SECTION 2. APPLICABILITY.--The provisions of this act apply to:

          A. an instrument if the loss of possession occurred before, on or after January 1, 2018;

          B. an instrument if the right to enforce the instrument was acquired before, on or after January 1, 2018;

          C. a judicial proceeding commenced on or after January 1, 2018; and

          D. a judicial proceeding commenced before January 1, 2018, unless the court finds that a provision of this act would interfere substantially with the effective conduct of the judicial proceeding or would prejudice the rights of a party, in which case the superseded law, and not that provision, applies.

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2018.

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