Opinion ID: 6471493
Heading Depth: 2
Heading Rank: 3

Heading: Plaintiffs’ Claims to Recover Amounts Represented by Returned Checks.

Text: Plaintiffs on appeal contend that they are entitled to recover certain amounts for checks issued to them by defendants and returned because of insufficient funds. Plaintiffs argue that these claims are based on the checks themselves, and that they should recover the amounts represented by the returned checks in addition to amounts they may recover for sales made within the initial thirty-day periods. Because Section 60-8A-5 expressly provides that no action shall be maintained to recover debts arising from sales contracts made in violation of the statutory requirements for credit sales of alcoholic beverages, no actionable cause arises from such a contract, see Kaiser v. Thomson, 55 N.M. 270, 274, 232 P.2d 142, 144 (1951), even though the transaction has been completed, cf. Capo v. Century Life Ins. Co., 94 N.M. 373, 377, 610 P.2d 1202, 1206 (1980) (illegally coerced purchase of life insurance). If the returned checks were tendered in payment of debts arising from unlawful extensions of credit or agreements to extend credit, plaintiffs could not bring an action based on the checks themselves, for to permit recovery on the returned checks would in effect validate their unlawful extensions of credit, nullify the statutory penalty, and permit plaintiffs to take advantage of their violations of Section 60-7A-9. Cf. id.; cf. also NMSA 1978, §§ 55-3-302, -306 (defenses to payment on check). If, on the other hand, the returned checks were tendered in payment upon lawful C.O.D. sales, Sections 60-7A-9 and 60-8A-5 would not preclude plaintiffs from bringing an action based on the checks. The evidence of plaintiffs’ accounts before the district court on these motions for summary judgment raises genuine issues of material fact regarding whether the returned checks were issued in payment of sales made under unlawful extensions of credit or agreements to extend credit or in payment of lawful C.O.D. transactions. See New Mexico Beverage Co. v. Blything, 102 N.M. at 534, 697 P.2d at 953. The district court therefore erred in granting summary judgment in favor of defendants on plaintiffs’ claims based on the returned checks, and we reverse that part of its judgment. For the foregoing reasons, we reverse in part the summary judgment entered by the district court and remand this case to it for further proceedings consistent with this opinion. IT IS SO ORDERED. WALTERS and RANSOM, JJ„ and MINZER, J., Court of Appeals. SOSA, Senior Justice, dissents.