Opinion ID: 1386600
Heading Depth: 1
Heading Rank: 2

Heading: Liability of the Albuquerque Bank

Text: The Clovis Bank argues that the responsibility for seeing that the draft was paid or returned should not be on it but should be on the Albuquerque Bank. It reasons that since it does not get paid for the service, it should not have any liability for its gratuitous acts. It claims that the Albuquerque Bank should have sent out tracers on the drafts to determine their status. This reasoning is contrary to the Uniform Commercial Code. Section 50A-4-202 clearly provides that a collecting bank must use ordinary care in presenting the draft for payment, and if the draft is not paid it must use ordinary care in returning the drafts. Ordinary care obligates a collecting bank to take seasonable action on the item. § 50A-4-202(2). The Albuquerque Bank was a collecting bank, § 50A-4-105(d), N.M.S.A. 1953 (Repl. 1962), and could be liable only if it failed to use ordinary care in sending the draft for presentment. § 50A-4-202(1)(a). The trial court found that the Albuquerque Bank did use ordinary care in handling the draft and did not breach the duty it owed to its customers, Engine Parts. We therefore affirm the trial court's decision as to the Albuquerque Bank. Although both Engine Parts and the Clovis Bank raised the issue of whether the Albuquerque Bank's erroneous instruction (that the drafts were payable thru the Clovis Bank) changed the draft's designation of the Clovis Bank as drawee and payor bank, neither raised the issue of whether sending the drafts with the erroneous instruction was a breach of the Albuquerque Bank's duty of ordinary care in passing on the drafts for collection and payment and whether such a breach was a concurrent cause of the Clovis Bank's failure to promptly return the drafts upon dishonor. Since neither party properly raised the issue, we cannot consider it on appeal. The trial court is affirmed in all respects except for its erroneous conclusion that the Clovis Bank could, alternatively, be a collecting bank and its failure to award interest on the judgment. This case is remanded with directions that the trial court enter judgment for Engine Parts against the Clovis Bank together with interest from the day after the Clovis Bank's midnight deadline. IT IS SO ORDERED. McMANUS, C.J., and SOSA and FEDERICI, JJ., concur.