If a security certificate has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the issuer of that fact within a reasonable time after the owner has notice of it and the issuer registers a transfer of the security before receiving notification, the owner may not assert against the issuer a claim for registering the transfer under Section 55-8-404 NMSA 1978 or a claim to a new security certificate under Section 55-8-405 NMSA 1978.

History: 1978 Comp., § 55-8-406, enacted by Laws 1996, ch. 47, § 43.

OFFICIAL COMMENTS

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

An owner who fails to notify the issuer within a reasonable time after the owner knows or has reason to know of the loss or theft of a security certificate is estopped from asserting the ineffectiveness of a forged or unauthorized indorsement and the wrongfulness of the registration of the transfer. If the lost certificate was indorsed by the owner, then the registration of the transfer was not wrongful under Section 8-404 [55-8-404 NMSA 1978], unless the owner made an effective demand that the issuer not register transfer under Section 8-403 [55-8-403 NMSA 1978].

"Issuer" Section 8-201 [55-8-201 NMSA 1978]

"Notify" Section 1-201(25) [55-1-201 NMSA 1978]

"Security certificate" Section 8-102(a)(16) [55-8-102 NMSA 1978]

Repeals and reenactments. — Laws 1996, ch. 47, § 43, repealed former 55-8-406 NMSA 1978, as amended by Laws 1987, ch. 248, § 44, relating to the duties of an authenticating trustee, transfer agent or registrar, and enacted a new section, May 15, 1998.