(a) Unless the bill of lading otherwise provides, a carrier may deliver the goods to a person or destination other than that stated in the bill or may otherwise dispose of the goods, without liability for misdelivery, on instructions from:

(1) the holder of a negotiable bill;

(2) the consignor on a nonnegotiable bill, even if the consignee has given contrary instructions;

(3) the consignee on a nonnegotiable bill in the absence of contrary instructions from the consignor, if the goods have arrived at the billed destination or if the consignee is in possession of the tangible bill or in control of the electronic bill; or

(4) the consignee on a nonnegotiable bill, if the consignee is entitled as against the consignor to dispose of the goods.

(b) Unless instructions described in Subsection (a) of this section are included in a negotiable bill of lading, a person to which the bill is duly negotiated may hold the bailee according to the original terms.

History: 1953 Comp., § 50A-7-303, enacted by Laws 1961, ch. 96, § 7-303; 2005, ch. 144, § 69.

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 7-303 [55-7-303 NMSA 1978].

Changes. — To accommodate electronic documents and for style.

1. Diversion is a very common commercial practice which defeats delivery to the consignee originally named in a bill of lading. This section continues former Section 7-303's [55-7-303 NMSA 1978] safe harbor rules for carriers in situations involving diversion and adapts those rules to electronic documents of title. This section works compatibly with Section 2-705 [55-2-705 NMSA 1978]. Carriers may as a business matter be willing to accept instructions from consignees in which case the carrier will be liable for misdelivery if the consignee was not the owner or otherwise empowered to dispose of the goods under Subsection (a)(4). The section imposes no duty on carriers to undertake diversion. The carrier is of course subject to the provisions of mandatory filed tariffs as provided in Section 7-103 [55-7-103 NMSA 1978].

2. It should be noted that the section provides only an immunity for carriers against liability for "misdelivery." It does not, for example, defeat the title to the goods which the consignee-buyer may have acquired from the consignor-seller upon delivery of the goods to the carrier under a non- negotiable bill of lading. Thus if the carrier, upon instructions from the consignor, returns the goods to the consignor, the consignee may recover the goods from the consignor or the consignor's insolvent estate. However, under certain circumstances, the consignee's title may be defeated by diversion of the goods in transit to a different consignee. The rights that arise between the consignor-seller and the consignee-buyer out of a contract for the sale of goods are governed by Article 2.

Point 1: Sections 2-705 [55-2-705 NMSA 1978] and 7-103 [55-7-103 NMSA 1978].

Point 2: Article 2, Sections 7-403 [55-7-403 NMSA 1978] and 7-504(3) [55-7-504(3) NMSA 1978].

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

"Bill of lading". Section 1-201 [55-1-201 NMSA 1978].

"Carrier". Section 7-102.

"Consignee". Section 7-102.

"Consignor". Section 7-102.

"Delivery". Section 1-201.

"Goods". Section 7-102.

"Holder". Section 1-201.

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

"Person". Section 1-201.

"Purchaser". Section 1-201.

"Term". Section 1-201.

Repeals and reenactments. — Laws 2005, ch. 144, § 69, effective January 1, 2006, repealed former 55-7-303 NMSA 1978 as enacted by Laws 1961, ch. 96, § 7-303, 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. — 13 Am. Jur. 2d Carriers § 441.

Right of shipper or consignee to divert shipment, 61 A.L.R. 1309.

Liability for damages from loss of shipper's opportunity to sell or divert goods at intermediate point because of carrier's deviation from route, 33 A.L.R.2d 145.

80 C.J.S. Shipping § 276 et seq.