Court Opinion

ID: 9551636
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:56:35.444077+00
Date Added: 2024-06-11T15:24:18.917950
License: Public Domain

ON MOTION FOR REHEARING OPINION PER CURIAM. The point of appellant’s argument was not made clear to us originally. On rehearing, appellant bank asserts that the point of its argument was that, upon the facts found by the trial court, § 33—1—4, N.M.S.A., 1953 Comp., relieves the bank of liability. The pertinent portion of the statute reads: “If any negotiable instrument payable * * * to his principal is endorsed by a fiduciary empowered to endorse such instrument on behalf of his principal, the endorsee [bank] is not bound to inquire whether the fiduciary is committing a breach of his obligation * * * and is not chargeable with notice that the fiduciary is committing a breach of his obligation * * (Emphasis added.) The bank relies exclusively upon the italicized language above, as affording it protection in accepting the checks for deposit. It points to the trial court’s finding that Peke, along with another officer, were .authorized to endorse the checks, and asserts that a proper construction of the statutory language “empowered to endorse such instrument on behalf of his principal” means that, if the fiduciary has any authority to endorse in any manner, the endorsee (bank) is relieved of any obligation to inquire whether the endorsee is exceeding his .authority. We find the argument to be without merit.  The words “empowered” and “en•dorse” must be construed with reference to the intention or purpose of the legislation to he derived from the whole statute. Allen v. McClellan, 75 N.M. 400, 405 P.2d 405; C. de Baca v. Baca, 73 N.M. 387, 388 P.2d 392; Montoya v. McManus, 68 N.M. 381, 362 P.2d 771; In re Vigil’s Estate, 38 N.M. 383, 34 P.2d 667, 93 A.L.R. 1506.  “Endorse,” as used in the statute, means to transfer a negotiable instrument by signing one’s name on the back thereof. See Webster’s Third International Dictionary, p. 749. The word “empowered” means authorized. 14A Words and Phrases, p. 137.  The obvious intent of the legislature in enacting § 33-1-4, supra, was to relieve the endorsee of the obligation to inquire respecting a breach of duty by a fiduciary endorser, where such fiduciary had authority to transfer the instrument by his endorsement or signature. The trial court, however, expressly found that Peke was not authorized or empowered to transfer these checks by his endorsement alone. Accordingly, the statute did not operate to relieve the bank of its obligation to inquire whether he breached his ditty to his principal. The motion for rehearing is denied. It is so ordered.