NM Stat § 55-2A-308 (2021)
2021 New Mexico Statutes|Chapter 55 - Uniform Commercial Code|Article 2A - Leases|Part 3 - EFFECT OF LEASE CONTRACT|Section 55-2A-308 - Special rights of creditors.

(1) A creditor of a lessor in possession of goods subject to a lease contract may treat the lease contract as void if as against the creditor retention of possession by the lessor is fraudulent under any statute or rule of law, but retention of possession in good faith and current course of trade by the lessor for a commercially reasonable time after the lease contract becomes enforceable is not fraudulent. (2) Nothing in this article impairs the rights of creditors of a lessor if the lease contract (a) becomes enforceable, not in current course of trade but in satisfaction of or as security for a preexisting claim for money, security or the like, and (b) is made under circumstances which under any statute or rule of law apart from this article would constitute the transaction a fraudulent transfer or voidable preference. (3) A creditor of a seller may treat a sale or an identification of goods to a contract for sale as void if as against the creditor retention of possession by the seller is fraudulent under any statute or rule of law, but retention of possession of the goods pursuant to a lease contract entered into by the seller as lessee and the buyer as lessor in connection with the sale or identification of the goods is not fraudulent if the buyer bought for value and in good faith. History: 1978 Comp., § 55-2A-308, enacted by Laws 1992, ch. 114, § 45. ANNOTATIONSOFFICIAL COMMENTS UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. Uniform Statutory Source: — Section 2-402(2) and (3)(b) [55-2-402 NMSA 1978]. Changes: — Rephrased and new material added to conform to leasing terminology and practice. Purposes: — Subsection (1) states a general rule of avoidance where the lessor has retained possession of goods if such retention is fraudulent under any statute or rule of law. However, the subsection creates an exception under certain circumstances for retention of possession of goods for a commercially reasonable time after the lease contract becomes enforceable. Subsection (2) also preserves the possibility of an attack on the lease by creditors of the lessor if the lease was made in satisfaction of or as security for a pre-existing claim, and would constitute a fraudulent transfer or voidable preference under other law. Finally, Subsection (3) states a new rule with respect to sale-leaseback transactions, i.e., transactions where the seller sells goods to a buyer but possession of the goods is retained by the seller pursuant to a lease contract between the buyer as lessor and the seller as lessee. Notwithstanding any statute or rule of law that would treat such retention as fraud, whether per se, prima facie, or otherwise, the retention is not fraudulent if the buyer bought for value (Section 1-201(44)) [55-1-201 NMSA 1978] and in good faith (Sections 1-201(19) and 2-103(1)(b)) [55-1-201 and 55-2-103 NMSA 1978, respectively]. Section 2A-103(3) and (4) [55-2A-103 NMSA 1978]. This provision overrides Section 2-402(2) [55-2-402 NMSA 1978] to the extent it would otherwise apply to a sale-leaseback transaction. Cross References: — Sections 1-201(19), 1-201(44), 2-402(2) and 2A-103(4) [55-1-201, 55-2-402 and 55-2A-103 NMSA 1978, respectively]. "Buyer". Section 2-103(1)(a) [55-2-103 NMSA 1978]. "Contract". Section 1-201(11) [55-1-201 NMSA 1978]. "Creditor". Section 1-201(12) [55-1-201 NMSA 1978]. "Good faith". Sections 1-201(19) and 2-103(1)(b) [55-1-201 and 55-2-103 NMSA 1978, respectively]. "Goods". Section 2A-103(1)(h) [55-2A-103 NMSA 1978]. "Lease contract". Section 2A-103(1)(l) [55-2A-103 NMSA 1978]. "Lessee". Section 2A-103(1)(n) [55-2A-103 NMSA 1978]. "Lessor". Section 2A-103(1)(p) [55-2A-103 NMSA 1978]. "Money". Section 1-201(24) [55-1-201 NMSA 1978]. "Reasonable time". Section 1-204(1) and (2) [55-1-204 NMSA 1978]. "Rights". Section 1-201(36) [55-1-201 NMSA 1978]. "Sale". Section 2-106(1) [55-2-106 NMSA 1978]. "Seller". Section 2-103(1)(d) [55-2-103 NMSA 1978]. "Value". Section 1-201(44) [55-1-201 NMSA 1978]. Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 45 effective July 1, 1992.