If a blank in a negotiable tangible warehouse receipt has been filled in without authority, a good-faith purchaser for value and without notice of the lack of authority may treat the insertion as authorized. Any other unauthorized alteration leaves any tangible or electronic warehouse receipt enforceable against the issuer according to its original tenor.

History: 1953 Comp., § 50A-7-208, enacted by Laws 1961, ch. 96, § 7-208; 2005, ch. 144, § 64.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Prior Uniform Statutory Provision. — Former Section 7-208 [55-7-208 NMSA 1978].

Changes. — To accommodate electronic documents of title.

1. The execution of tangible warehouse receipts in blank is a dangerous practice. As between the issuer and an innocent purchaser the risks should clearly fall on the former. The purchaser must have purchased the tangible negotiable warehouse receipt in good faith and for value to be protected under the rule of the first sentence which is a limited exception to the general rule in the second sentence. Electronic document of title systems should have protection against unauthorized access and unauthorized changes. See 7-106 [55-7-106 NMSA 1978]. Thus the protection for good faith purchasers found in the first sentence is not necessary in the context of electronic documents.

2. Under the second sentence of this section, an unauthorized alteration whether made with or without fraudulent intent does not relieve the issuer of its liability on the warehouse receipt as originally executed. The unauthorized alteration itself is of course ineffective against the warehouse. The rule stated in the second sentence applies to both tangible and electronic warehouse receipts.

"Good faith". Section 1-201 [55-1-201 NMSA 1978].

"Issuer". Section 7-102 [55-7-102 NMSA 1978].

"Notice". Section 1-202 [55-1-202 NMSA 1978].

"Purchaser". Section 1-201.

"Value". Section 1-204 [55-1-204 NMSA 1978].

"Warehouse receipt". Section 1-201.

Repeals and reenactments. — Laws 2005, ch. 144, § 64, effective January 1, 2006, repealed former 55-7-208 NMSA 1978 as enacted by Laws 1961, ch. 96, § 7-208, and enacted a new section. Pursuant to 12-2A-14 NMSA 1978, the 2005 revision is considered an amendment rather than a new enactment.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Commercial Code §§ 45, 62; 78 Am. Jur. 2d Warehouses § 50.

Rights of purchaser of forged or altered receipt as against warehouseman, 38 A.L.R. 1206.

3A C.J.S. Alteration of Instruments § 1; 93 C.J.S. Warehousemen and Safe Depositaries § 27.