(a) Except as otherwise provided in the Uniform Commercial Code [Chapter 55, NMSA 1978], a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors.

(b) A transaction subject to Chapter 55, Article 9 NMSA 1978 is subject to any applicable rule of law which establishes a different rule for consumers, and to the provisions of the Oil and Gas Products Lien Act [48-9-1 to 48-9-8 NMSA 1978]; Chapter 56, Article 1 NMSA 1978; the Artists' Consignment Act [56-11-1 to 56-11-3 NMSA 1978]; the Pawnbrokers Act [56-12-1 to 56-12-16 NMSA 1978]; the New Mexico Bank Installment Loan Act of 1959 [58-7-1 NMSA 1978]; the New Mexico Small Loan Act of 1955 [Chapter 58, Article 15 NMSA 1978]; the Motor Vehicle Sales Finance Act [58-19-1 NMSA 1978]; and to rules adopted under those statutes.

(c) In case of conflict between Chapter 55, Article 9 NMSA 1978 and a rule of law, statute or rule described in Subsection (b) of this section, the rule of law, statute or rule controls. Failure to comply with a statute or rule described in Subsection (b) of this section has only the effect the statute or rule specifies.

(d) Chapter 55, Article 9 NMSA 1978 does not:

(1) validate any rate, charge, agreement or practice that violates a rule of law, statute or rule described in Subsection (b) of this section; or

(2) extend the application of the rule of law, statute or rule to a transaction not otherwise subject to it.

(e) The filing provisions set forth in the Farm Products Secured Interest Act [56-13-1 to 56-13-14 NMSA 1978] and in the Public Utility Act [62-13-1 NMSA 1978] are in addition to the filing provisions set forth in Chapter 55, Article 9 NMSA 1978. Failure to comply with the filing provisions in those acts has only the effect specified in those acts.

History: 1978 Comp., § 55-9-201, enacted by Laws 2001, ch. 139, § 11.

OFFICIAL COMMENTS

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

1. Source. Former Sections 9-201 and 9-203(4).

2. Effectiveness of Security Agreement. Subsection (a) provides that a security agreement is generally effective. With certain exceptions, a security agreement is effective between the debtor and secured party and is likewise effective against third parties. Note that "security agreement" is used here (and elsewhere in this article) as it is defined in Section 9-102: "(A)n agreement that creates or provides for a security interest." It follows that subsection (a) does not provide that every term or provision contained in a record that contains a security agreement or that is so labeled is effective. Properly read, former Section 9-201 was to the same effect. Exceptions to the general rule of Subsection (a) arise where there is an overriding provision in this article or any other article of the UCC. For example, Section 9-317 subordinates unperfected security interests to lien creditors and certain buyers, and several provisions in part 3 subordinate some security interests to other security interests and interests of purchasers.

3. Law, Statutes, and Regulations Applicable to Certain Transactions. Subsection (b) makes clear that certain transactions, although subject to this article, also are subject to other applicable laws relating to consumers or specified in that subsection. Subsection (c) provides that the other law is controlling in the event of a conflict, and that a violation of other law does not ipso facto constitute a violation of this article. Subsection (d) provides that this article does not validate violations under or extend the application of the other applicable laws.

Repeals and reenactments. — Laws 2001, ch. 139, § 11 repealed former 55-9-201 NMSA 1978, as enacted by Laws 1961, ch. 96, § 9-201, and enacted a new section, effective July 1, 2001.

Decisions under former 55-9-201 and 55-9-203 NMSA 1978. — In light of the similarity of this section and former Sections 55-9-201 and 55-9-203 NMSA 1978, annotations decided under former 55-9-201 and 55-9-203 NMSA 1978 have been included in the annotations in this section.

Use of traditional security agreements may continue. — The traditional forms of security agreements in use before the enactment of this section may continue to be used after its enactment. Strevell-Paterson Fin. Co. v. May, 1967-NMSC-004, 77 N.M. 331, 422 P.2d 366.

Parol evidence cannot be offered to establish a valid security agreement. First Nat'l Bank v. Niccum (In re Permian Anchor Servs.), 649 F.2d 763 (10th Cir. 1981).

Law reviews. — For comment, "New Mexico's Uniform Commercial Code in Oil and Gas Transactions," see 10 Nat. Resources J. 361 (1970).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 68A Am. Jur. 2d Secured Transactions § 155 et seq.

Violation of statute as to form of, or terms to be included in, conditional sales contract as invalidating entire transaction or merely its effect to reserve title in vendor, 144 A.L.R. 1103.

Validity and nature of trust receipts, 168 A.L.R. 359.

Rights of seller of motor vehicle with respect to purchase price or security on failure to comply with law governing transfer of title, 58 A.L.R.2d 1351.

Attorney's liability for negligence in preparing or recording security document, 87 A.L.R.2d 991.

"Unconscionability" as ground for refusing enforcement of contract for sale of goods or agreement collateral thereto, 18 A.L.R.3d 1305.

Leaving part of loan on deposit with lender as usury, 92 A.L.R.3d 769.