Senate Bill No. 285–Senator Care

 

March 13, 2003

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Makes various changes to provisions pertaining to Uniform Commercial Code. (BDR 8‑360)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to commercial transactions; making various changes to provisions pertaining to the Uniform Commercial Code; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 104.3103 is hereby amended to read as

1-2  follows:

1-3  104.3103  1.  In this article:

1-4  (a) “Acceptor” means a drawee who has accepted a draft.

1-5  (b) “Consumer account” means an account established by a

1-6  natural person primarily for personal, family or household

1-7  purposes.

1-8  (c) “Consumer transaction” means a transaction in which a

1-9  natural person incurs an obligation primarily for personal, family

1-10  or household purposes.

1-11      (d) “Drawee” means a person ordered in a draft to make

1-12  payment.

1-13      [(c)] (e) “Drawer” means a person who signs or is identified in a

1-14  draft as a person ordering payment.

1-15      [(d)] (f) “Good faith” means honesty in fact and the observance

1-16  of reasonable commercial standards of fair dealing.

1-17      [(e)] (g) “Maker” means a person who signs or is identified in a

1-18  note as a person undertaking to pay.

2-1  [(f)] (h) “Order” means a written instruction to pay money

2-2  signed by the person giving the instruction. The instruction may be

2-3  addressed to any person, including the person giving the instruction,

2-4  or to one or more persons jointly or in the alternative but not in

2-5  succession. An authorization to pay is not an order unless the person

2-6  authorized to pay is also instructed to pay.

2-7  [(g)] (i) “Ordinary care” in the case of a person engaged in

2-8  business means observance of reasonable commercial standards,

2-9  prevailing in the area in which he is located, with respect to the

2-10  business in which he is engaged. In the case of a bank that takes an

2-11  instrument for processing for collection or payment by automated

2-12  means, reasonable commercial standards do not require the bank to

2-13  examine the instrument if the failure to examine does not violate its

2-14  prescribed procedures and its procedures do not vary unreasonably

2-15  from general banking usage not disapproved by this article or

2-16  article 4.

2-17      [(h)] (j) “Party” means a party to an instrument.

2-18      [(i)] (k) “Principal obligor,” with respect to an instrument,

2-19  means the accommodated party or any other party to the

2-20  instrument against whom a secondary obligor has recourse under

2-21  this article.

2-22      (l) “Promise” means a written undertaking to pay money signed

2-23  by the person undertaking to pay. An acknowledgment of an

2-24  obligation by the obligor is not a promise unless the obligor also

2-25  undertakes to pay the obligation.

2-26      [(j)] (m) “Prove” with respect to a fact means to meet the burden

2-27  of establishing the fact (subsection 8 of NRS 104.1201).

2-28      [(k)] (n) “Record” means information that is inscribed on a

2-29  tangible medium or that is stored in an electronic or other medium

2-30  and is retrievable in perceivable form.

2-31      (o) “Remitter” means a person who purchases an instrument

2-32  from its issuer if the instrument is payable to an identified person

2-33  other than the purchaser.

2-34      (p) “Remotely created consumer item” means an item drawn

2-35  on a consumer account, which is not created by the payor bank

2-36  and does not bear a handwritten signature purporting to be the

2-37  signature of the drawer.

2-38      (q) “Secondary obligor,” with respect to an instrument, means:

2-39          (1) An endorser or an accommodation party;

2-40          (2) A drawer having the obligation described in

2-41  subsection 4 of NRS 104.3414; or

2-42          (3) Any other party to the instrument that has recourse

2-43  against another party to the instrument pursuant to subsection 2

2-44  of NRS 104.3116.

3-1  2.  Other definitions applying to this article and the sections in

3-2  which they appear are:

 

3-3  “Acceptance.” NRS 104.3409.

3-4  “Accommodated party.” NRS 104.3419.

3-5  “Accommodation party.” NRS 104.3419.

3-6  “Account.” NRS 104.4104.

3-7  “Alteration.” NRS 104.3407.

3-8  “Anomalous endorsement.” NRS 104.3205.

3-9  “Blank endorsement.” NRS 104.3205.

3-10  “Cashier’s check.” NRS 104.3104.

3-11  “Certificate of deposit.” NRS 104.3104.

3-12  “Certified check.” NRS 104.3409.

3-13  “Check.” NRS 104.3104.

3-14  “Consideration.” NRS 104.3303.

3-15  “Draft.” NRS 104.3104.

3-16  “Endorsement.” NRS 104.3204.

3-17  “Endorser.” NRS 104.3204.

3-18  “Holder in due course.” NRS 104.3302.

3-19  “Incomplete instrument.” NRS 104.3115.

3-20  “Instrument.” NRS 104.3104.

3-21  “Issue.” NRS 104.3105.

3-22  “Issuer.” NRS 104.3105.

3-23  “Negotiable instrument.” NRS 104.3104.

3-24  “Negotiation.” NRS 104.3201.

3-25  “Note.” NRS 104.3104.

3-26  “Payable at a definite time.” NRS 104.3108.

3-27  “Payable on demand.” NRS 104.3108.

3-28  “Payable to bearer.” NRS 104.3109.

3-29  “Payable to order.” NRS 104.3109.

3-30  “Payment.” NRS 104.3602.

3-31  “Person entitled to enforce.” NRS 104.3301.

3-32  “Presentment.” NRS 104.3501.

3-33  “Reacquisition.” NRS 104.3207.

3-34  “Special endorsement.” NRS 104.3205.

3-35  “Teller’s check.” NRS 104.3104.

3-36  “Transfer of instrument.” NRS 104.3203.

3-37  “Traveler’s check.” NRS 104.3104.

3-38  “Value.” NRS 104.3303.

 

3-39      3.  The following definitions in other articles apply to this

3-40  article:

 

3-41  [“Bank.” NRS 104.4105.]

3-42  “Banking day.” NRS 104.4104.

4-1  “Clearinghouse.” NRS 104.4104.

4-2  “Collecting bank.” NRS 104.4105.

4-3  “Customer.” NRS 104.4104.

4-4  “Depositary bank.” NRS 104.4105.

4-5  “Documentary draft.” NRS 104.4104.

4-6  “Intermediary bank.” NRS 104.4105.

4-7  “Item.” NRS 104.4104.

4-8  “Payor bank.” NRS 104.4105.

4-9  “Suspends payments.” NRS 104.4104.

 

4-10      4.  In addition , article 1 contains general definitions and

4-11  principles of construction and interpretation applicable throughout

4-12  this article.

4-13      Sec. 2.  NRS 104.3106 is hereby amended to read as follows:

4-14      104.3106  1.  Except as otherwise provided in this section, for

4-15  the purposes of subsection 1 of NRS 104.3104, a promise or order is

4-16  unconditional unless it states:

4-17      (a) An express condition to payment;

4-18      (b) That the promise or order is subject to or governed by

4-19  another [writing;] record; or

4-20      (c) That rights or obligations with respect to the promise or

4-21  order are stated in another [writing.] record.

4-22  A reference to another [writing] record does not of itself make the

4-23  promise or order conditional.

4-24      2.  A promise or order is not made conditional by a reference to

4-25  another [writing] record for a statement of rights with respect to

4-26  collateral, prepayment or acceleration, or because payment is

4-27  limited to resort to a particular fund or source.

4-28      3.  If a promise or order requires, as a condition to payment, a

4-29  countersignature by a person whose specimen signature appears on

4-30  the promise or order, the condition does not make the promise or

4-31  order conditional for the purposes of subsection 1 of NRS 104.3104.

4-32  If the person whose specimen signature appears on an instrument

4-33  fails to countersign the instrument, the failure to countersign is a

4-34  defense to the obligation of the issuer, but the failure does not

4-35  prevent a transferee of the instrument from becoming a holder of the

4-36  instrument.

4-37      4.  If a promise or order at the time it is issued or first comes

4-38  into possession of a holder contains a statement, required by

4-39  applicable statutory or administrative law, to the effect that the

4-40  rights of a holder or transferee are subject to claims or defenses that

4-41  the issuer could assert against the original payee, the promise or

4-42  order is not thereby made conditional for the purposes of

4-43  subsection 1 of NRS 104.3104 , [;] but if the promise or order is an

4-44  instrument, there cannot be a holder in due course of the instrument.

5-1  Sec. 3.  NRS 104.3116 is hereby amended to read as follows:

5-2  104.3116  1.  Except as otherwise provided in the instrument,

5-3  two or more persons who have the same liability on an instrument as

5-4  makers, drawers, acceptors, endorsers who endorse as joint payees,

5-5  or anomalous endorsers are jointly and severally liable in the

5-6  capacity in which they sign.

5-7  2.  Except as otherwise provided in subsection [5] 6 of NRS

5-8  104.3419 or by agreement of the affected parties, a party having

5-9  joint and several liability who pays the instrument is entitled to

5-10  receive from any party having the same joint and several liability

5-11  contribution in accordance with applicable law.

5-12      [3.  Discharge of one party having joint and several liability by

5-13  a person entitled to enforce the instrument does not affect the right

5-14  under subsection 2 of a party having the same joint and several

5-15  liability to receive contribution from the party discharged.]

5-16      Sec. 4.  NRS 104.3119 is hereby amended to read as follows:

5-17      104.3119  In an action for breach of an obligation for which a

5-18  third person is answerable over pursuant to this article or article 4,

5-19  the defendant may give the third person [written] notice of the

5-20  litigation[,] in a record, and the person notified may then give

5-21  similar notice to any other person who is answerable over. If the

5-22  notice states that the person notified may come in and defend and

5-23  that failure to do so will bind the person notified in an action later

5-24  brought by the person giving the notice as to any determination of

5-25  fact common to the two litigations, the person notified is so bound

5-26  unless after seasonable receipt of the notice the person notified does

5-27  come in and defend.

5-28      Sec. 5.  NRS 104.3305 is hereby amended to read as follows:

5-29      104.3305  1.  Except as otherwise provided in [subsection 2,]

5-30  this section, the right to enforce the obligation of a party to pay an

5-31  instrument is subject to the following:

5-32      (a) A defense of the obligor based on:

5-33          (1) Infancy of the obligor to the extent it is a defense to a

5-34  simple contract;

5-35          (2) Duress, lack of legal capacity or illegality of the

5-36  transaction which, under other law, nullifies the obligation of the

5-37  obligor;

5-38          (3) Fraud that induced the obligor to sign the instrument with

5-39  neither knowledge nor reasonable opportunity to learn of its

5-40  character or its essential terms; or

5-41          (4) Discharge of the obligor in insolvency proceedings;

5-42      (b) A defense of the obligor stated in another section of this

5-43  article or a defense of the obligor that would be available if the

5-44  person entitled to enforce the instrument were enforcing a right to

5-45  payment under a simple contract; and

6-1  (c) A claim in recoupment of the obligor against the original

6-2  payee of the instrument if the claim arose from the transaction that

6-3  gave rise to the instrument , [;] but the claim of the obligor may be

6-4  asserted against a transferee of the instrument only to reduce the

6-5  amount owing on the instrument at the time the action is brought.

6-6  2.  The right of a holder in due course to enforce the obligation

6-7  of a party to pay the instrument is subject to defenses of the obligor

6-8  stated in paragraph (a) of subsection 1, but is not subject to defenses

6-9  of the obligor stated in paragraph (b) of subsection 1 or claims in

6-10  recoupment stated in paragraph (c) of subsection 1 against a person

6-11  other than the holder.

6-12      3.  Except as otherwise provided in subsection 4, in an action to

6-13  enforce the obligation of a party to pay the instrument, the obligor

6-14  may not assert against the person entitled to enforce the instrument a

6-15  defense, claim in recoupment or claim to the instrument (NRS

6-16  104.3306) of another person, but the other person’s claim to the

6-17  instrument may be asserted by the obligor if the other person is

6-18  joined in the action and personally asserts the claim against the

6-19  person entitled to enforce the instrument. An obligor is not obliged

6-20  to pay the instrument if the person seeking enforcement of the

6-21  instrument does not have rights of a holder in due course and the

6-22  obligor proves that the instrument is a lost or stolen instrument.

6-23      4.  In an action to enforce the obligation of an accommodation

6-24  party to pay an instrument, the accommodation party may assert

6-25  against the person entitled to enforce the instrument any defense or

6-26  claim in recoupment under subsection 1 that the accommodated

6-27  party could assert against the person entitled to enforce the

6-28  instrument, except the defenses of discharge in insolvency

6-29  proceedings, infancy and lack of legal capacity.

6-30      5.  In a consumer transaction, if law other than this article

6-31  requires that an instrument include a statement to the effect that

6-32  the rights of a holder or transferee are subject to a claim or

6-33  defense that the issuer could assert against the original payee, and

6-34  the instrument does not include such a statement:

6-35      (a) The instrument has the same effect as if the instrument

6-36  included such a statement;

6-37      (b) The issuer may assert against the holder or transferee all

6-38  claims and defenses that would have been available if the

6-39  instrument included such a statement; and

6-40      (c) The extent to which claims may be asserted against the

6-41  holder or transferee is determined as if the instrument included

6-42  such a statement.

6-43      6.  This section is subject to law other than this article that

6-44  establishes a different rule for consumer transactions.

 

7-1  Sec. 6.  NRS 104.3309 is hereby amended to read as follows:

7-2  104.3309  1.  A person not in possession of an instrument is

7-3  entitled to enforce the instrument if:

7-4  (a) He was [in possession of the instrument and] entitled to

7-5  enforce [it] the instrument when loss of possession occurred[;] or

7-6  he has directly or indirectly acquired ownership of the instrument

7-7  from a person who was entitled to enforce the instrument when

7-8  loss of possession occurred;

7-9  (b) The loss of possession was not the result of a transfer by him

7-10  or a lawful seizure; and

7-11      (c) He cannot reasonably obtain possession of the instrument

7-12  because the instrument was destroyed, its whereabouts cannot be

7-13  determined, or it is in the wrongful possession of an unknown

7-14  person or a person that cannot be found or is not amenable to service

7-15  of process.

7-16      2.  A person seeking enforcement of an instrument under

7-17  subsection 1 must prove the terms of the instrument and his right to

7-18  enforce the instrument. If that proof is made, NRS 104.3308 applies

7-19  to the case as if the person seeking enforcement had produced the

7-20  instrument. The court may not enter judgment in favor of the person

7-21  seeking enforcement unless it finds that the person required to pay

7-22  the instrument is adequately protected against loss that might occur

7-23  by reason of a claim by another person to enforce the instrument.

7-24  Adequate protection may be provided by any reasonable means.

7-25      Sec. 7.  NRS 104.3312 is hereby amended to read as follows:

7-26      104.3312  1.  In this section:

7-27      (a) “Check” means a cashier’s check, teller’s check or certified

7-28  check.

7-29      (b) “Claimant” means a person who claims the right to receive

7-30  the amount of a cashier’s check, teller’s check or certified check that

7-31  was lost, destroyed or stolen.

7-32      (c) “Declaration of loss” means a [written] statement, made in a

7-33  record under penalty of perjury, to the effect that:

7-34          (1) The declarer lost possession of a check;

7-35          (2) The declarer is the drawer or payee of the check, in the

7-36  case of a certified check, or the remitter or payee of the check, in the

7-37  case of a cashier’s check or teller’s check;

7-38          (3) The loss of possession was not the result of a transfer by

7-39  the declarer or a lawful seizure; and

7-40          (4) The declarer cannot reasonably obtain possession of the

7-41  check because the check was destroyed, its whereabouts cannot be

7-42  determined, or it is in the wrongful possession of an unknown

7-43  person or a person that cannot be found or is not amenable to service

7-44  of process.

8-1  (d) “Obligated bank” means the issuer of a cashier’s check or

8-2  teller’s check or the acceptor of a certified check.

8-3  2.  A claimant may assert a claim to the amount of a check by a

8-4  communication to the obligated bank describing the check with

8-5  reasonable certainty and requesting payment of the amount of the

8-6  check, if:

8-7  (a) The claimant is the drawer or payee of a certified check or

8-8  the remitter or payee of a cashier’s check or teller’s check;

8-9  (b) The communication contains or is accompanied by a

8-10  declaration of loss of the claimant with respect to the check;

8-11      (c) The communication is received at a time and in a manner

8-12  affording the bank a reasonable time to act on it before the check is

8-13  paid; and

8-14      (d) The claimant provides reasonable identification if requested

8-15  by the obligated bank.

8-16      3.  Delivery of a declaration of loss is a warranty of the truth of

8-17  the statements made in the declaration. If a claim is asserted in

8-18  compliance with this subsection, the following rules apply:

8-19      (a) The claim becomes enforceable at the later of:

8-20          (1) The time the claim is asserted; or

8-21          (2) The 90th day following the date of the check, in the case

8-22  of a cashier’s check or teller’s check, or the 90th day following the

8-23  date of the acceptance, in the case of a certified check.

8-24      (b) Until the claim becomes enforceable, it has no legal effect

8-25  and the obligated bank may pay the check or, in the case of a teller’s

8-26  check, may permit the drawee to pay the check. Payment to a person

8-27  entitled to enforce the check discharges all liability of the obligated

8-28  bank with respect to the check.

8-29      (c) If the claim becomes enforceable before the check is

8-30  presented for payment, the obligated bank is not obliged to pay the

8-31  check.

8-32      (d) When the claim becomes enforceable, the obligated bank

8-33  becomes obliged to pay the amount of the check to the claimant if

8-34  payment of the check has not been made to a person entitled to

8-35  enforce the check. Subject to paragraph (a) of subsection 1 of NRS

8-36  104.4302, payment to the claimant discharges all liability of the

8-37  obligated bank with respect to the check.

8-38      4.  If the obligated bank pays the amount of a check to a

8-39  claimant under paragraph (d) of subsection 2 and the check is

8-40  presented for payment by a person having rights of a holder in due

8-41  course, the claimant is obliged to refund the payment to the

8-42  obligated bank if the check is paid, or pay the amount of the check

8-43  to the person having rights of a holder in due course if the check is

8-44  dishonored.

9-1  5.  If a claimant has the right to assert a claim under

9-2  subsection 2 and is also a person entitled to enforce a cashier’s

9-3  check, teller’s check or certified check which is lost, destroyed or

9-4  stolen, the claimant may assert rights with respect to the check

9-5  either under this section or NRS 104.3309.

9-6  Sec. 8.  NRS 104.3416 is hereby amended to read as follows:

9-7  104.3416  1.  A person who transfers an instrument for

9-8  consideration warrants to the transferee and, if the transfer is by

9-9  endorsement, to any subsequent transferee that:

9-10      (a) The warrantor is a person entitled to enforce the instrument;

9-11      (b) All signatures on the instrument are authentic and

9-12  authorized;

9-13      (c) The instrument has not been altered;

9-14      (d) The instrument is not subject to a defense or claim in

9-15  recoupment of any party which can be asserted against the

9-16  warrantor; [and]

9-17      (e) The warrantor has no knowledge of any insolvency

9-18  proceeding commenced with respect to the maker or acceptor or, in

9-19  the case of an unaccepted draft, the drawer[.] ; and

9-20      (f) With respect to a remotely created consumer item, that the

9-21  person on whose account the item is drawn authorized the

9-22  issuance of the item in the amount for which the item is drawn.

9-23      2.  A person to whom the warranties under subsection 1 are

9-24  made and who took the instrument in good faith may recover from

9-25  the warrantor as damages for breach of warranty an amount equal to

9-26  the loss suffered as a result of the breach, but not more than the

9-27  amount of the instrument plus expenses and loss of interest incurred

9-28  as a result of the breach.

9-29      3.  The warranties stated in subsection 1 cannot be disclaimed

9-30  with respect to checks. Unless notice of a claim for breach of

9-31  warranty is given to the warrantor within 30 days after the claimant

9-32  has reason to know of the breach and the identity of the warrantor,

9-33  the liability of the warrantor under subsection 2 is discharged to the

9-34  extent of any loss caused by the delay in giving notice of the claim.

9-35      4.  A cause of action for breach of warranty under this section

9-36  accrues when the claimant has reason to know of the breach.

9-37      Sec. 9.  NRS 104.3417 is hereby amended to read as follows:

9-38      104.3417  1.  If an unaccepted draft is presented to the drawee

9-39  for payment or acceptance and the drawee pays or accepts the draft,

9-40  the person obtaining payment or acceptance, at the time of

9-41  presentment, and a previous transferor of the draft, at the time of

9-42  transfer, warrant to the drawee making payment or accepting the

9-43  draft in good faith that:

9-44      (a) The warrantor is, or was, at the time the warrantor

9-45  transferred the draft, a person entitled to enforce the draft or

10-1  authorized to obtain payment or acceptance of the draft on behalf of

10-2  a person entitled to enforce the draft;

10-3      (b) The draft has not been altered; [and]

10-4      (c) The warrantor has no knowledge that the signature of the

10-5  drawer of the draft is unauthorized[.] ; and

10-6      (d) With respect to any remotely created consumer item, that

10-7  the person on whose account the item is drawn authorized the

10-8  issuance of the item in the amount for which the item is drawn.

10-9      2.  A drawee making payment may recover from any warrantor

10-10  damages for breach of warranty equal to the amount paid by the

10-11  drawee less the amount the drawee received or is entitled to receive

10-12  from the drawer because of the payment. In addition, the drawee is

10-13  entitled to compensation for expenses and loss of interest resulting

10-14  from the breach. The right of the drawee to recover damages under

10-15  this subsection is not affected by any failure of the drawee to

10-16  exercise ordinary care in making payment. If the drawee accepts the

10-17  draft, breach of warranty is a defense to the obligation of the

10-18  acceptor. If the acceptor makes payment with respect to the draft,

10-19  the acceptor is entitled to recover from any warrantor for breach of

10-20  warranty the amounts stated in this subsection.

10-21     3.  If a drawee asserts a claim for breach of warranty under

10-22  subsection 1 based on an unauthorized endorsement of the draft or

10-23  an alteration of the draft, the warrantor may defend by proving that

10-24  the endorsement is effective under NRS 104.3404 or 104.3405 or

10-25  the drawer is precluded under NRS 104.3406 or 104.4406 from

10-26  asserting against the drawee the unauthorized endorsement or

10-27  alteration.

10-28     4.  If a dishonored draft is presented for payment to the drawer

10-29  or an endorser or any other instrument is presented for payment to a

10-30  party obliged to pay the instrument, and payment is received, the

10-31  following rules apply:

10-32     (a) The person obtaining payment and a prior transferor of the

10-33  instrument warrant to the person making payment in good faith that

10-34  the warrantor is, or was at the time he transferred the instrument, a

10-35  person entitled to enforce the instrument or authorized to obtain

10-36  payment on behalf of a person entitled to enforce the instrument.

10-37     (b) The person making payment may recover from any

10-38  warrantor for breach of warranty an amount equal to the amount

10-39  paid plus expenses and loss of interest resulting from the breach.

10-40     5.  The warranties stated in subsections 1 and 4 cannot be

10-41  disclaimed with respect to checks. Unless notice of a claim for

10-42  breach of warranty is given to the warrantor within 30 days after the

10-43  claimant has reason to know of the breach and the identity of the

10-44  warrantor, the liability of the warrantor under subsection 2 or 4 is

11-1  discharged to the extent of any loss caused by the delay in giving

11-2  notice of the claim.

11-3      6.  A cause of action for breach of warranty under this section

11-4  accrues when the claimant has reason to know of the breach.

11-5      Sec. 10.  NRS 104.3419 is hereby amended to read as follows:

11-6      104.3419  1.  If an instrument is issued for value given for the

11-7  benefit of a party to the instrument (“accommodated party”) and

11-8  another party to the instrument (“accommodation party”) signs the

11-9  instrument for the purpose of incurring liability on the instrument

11-10  without being a direct beneficiary of the value given for the

11-11  instrument, the instrument is signed by the accommodation party

11-12  “for accommodation.”

11-13     2.  An accommodation party may sign the instrument as maker,

11-14  drawer, acceptor or endorser and, subject to subsection 4, is obliged

11-15  to pay the instrument in the capacity in which he signs. The

11-16  obligation of an accommodation party may be enforced

11-17  notwithstanding any statute of frauds and whether or not he receives

11-18  consideration for the accommodation.

11-19     3.  A person signing an instrument is presumed to be an

11-20  accommodation party and there is notice that the instrument is

11-21  signed for accommodation if the signature is an anomalous

11-22  endorsement or is accompanied by words indicating that the signer

11-23  is acting as surety or guarantor with respect to the obligation of

11-24  another party to the instrument. Except as otherwise provided in

11-25  NRS 104.3605, the obligation of an accommodation party to pay the

11-26  instrument is not affected by the fact that the person enforcing the

11-27  obligation had notice when the instrument was taken by that person

11-28  that the accommodation party signed the instrument for

11-29  accommodation.

11-30     4.  If the signature of a party to an instrument is accompanied

11-31  by words indicating unambiguously that the party is guaranteeing

11-32  collection rather than payment of the obligation of another party to

11-33  the instrument, the signer is obliged to pay the amount due on the

11-34  instrument to a person entitled to enforce the instrument only if:

11-35     (a) Execution of judgment against the other party has been

11-36  returned unsatisfied;

11-37     (b) The other party is insolvent or in an insolvency proceeding;

11-38     (c) The other party cannot be served with process; or

11-39     (d) It is otherwise apparent that payment cannot be obtained

11-40  from the other party.

11-41     5.  If the signature of a party to an instrument is accompanied

11-42  by words indicating that the party guarantees payment or the

11-43  signer signs the instrument as an accommodation party in some

11-44  other manner that does not unambiguously indicate an intention

11-45  to guarantee collection rather than payment, the signer is obliged

12-1  to pay the amount due on the instrument to a person entitled to

12-2  enforce the instrument in the same circumstances as the

12-3  accommodated party would be obliged, without prior resort to

12-4  the accommodated party by the person entitled to enforce the

12-5  instrument.

12-6      6.  An accommodation party who pays the instrument is entitled

12-7  to reimbursement from the accommodated party and is entitled to

12-8  enforce the instrument against the accommodated party. In proper

12-9  circumstances, an accommodation party may obtain relief that

12-10  requires the accommodated party to perform its obligations on the

12-11  instrument. An accommodated party [who] that pays the instrument

12-12  has no right of recourse against, and is not entitled to contribution

12-13  from, an accommodation party.

12-14     Sec. 11.  NRS 104.3602 is hereby amended to read as follows:

12-15     104.3602  1.  Except as otherwise provided in subsection [2,]

12-16  5, an instrument is paid to the extent payment is made by or on

12-17  behalf of a party obliged to pay the instrument, and to a person

12-18  entitled to enforce the instrument. [To]

12-19     2.  Except as otherwise provided in subsection 5, a note is paid

12-20  to the extent payment is made by or on behalf of a party obliged to

12-21  pay the note to a person that formerly was entitled to enforce the

12-22  note only if at the time of the payment, the party obliged to pay has

12-23  not received adequate notification that the note has been

12-24  transferred and that payment is to be made to the transferee. A

12-25  notification is adequate only if it is signed by the transferor or the

12-26  transferee, reasonably identifies the transferred note and provides

12-27  an address at which payments subsequently are to be made. Upon

12-28  request, a transferee shall seasonably furnish reasonable proof

12-29  that the note has been transferred. Unless the transferee complies

12-30  with the request, a payment to the person that formerly was

12-31  entitled to enforce the note is effective for purposes of subsection 3

12-32  even if the party obliged to pay the note has received a notification

12-33  under this subsection.

12-34     3.  Except as otherwise provided in subsection 5, to the extent

12-35  of [the payment,] a payment under subsections 1 and 2, the

12-36  obligation of the party obliged to pay the instrument is discharged

12-37  even though payment is made with knowledge of a claim to the

12-38  instrument under NRS 104.3306 by another person.

12-39     [2.] 4.  Except as otherwise provided in subsection 5, a

12-40  transferee, or any party that has acquired rights in the instrument

12-41  directly or indirectly from a transferee, including any such party

12-42  that has rights as a holder in due course, is deemed to have notice

12-43  of any payment that is made under subsection 2 after the date that

12-44  the note is transferred to the transferee but before the party

13-1  obliged to pay the note receives adequate notification of the

13-2  transfer.

13-3      5. The obligation of a party to pay the instrument is not

13-4  discharged under [subsection] subsections 1 to 4, inclusive, if:

13-5      (a) A claim to the instrument under NRS 104.3306 is

13-6  enforceable against the party receiving payment and:

13-7          (1) Payment is made with knowledge by the payor that

13-8  payment is prohibited by injunction or similar process of a court of

13-9  competent jurisdiction; or

13-10         (2) In the case of an instrument other than a cashier’s check,

13-11  teller’s check or certified check, the party making payment

13-12  accepted, from the person having a claim to the instrument,

13-13  indemnity against loss resulting from refusal to pay the person

13-14  entitled to enforce the instrument; or

13-15     (b) The person making payment knows that the instrument is a

13-16  stolen instrument and pays a person he knows is in wrongful

13-17  possession of the instrument.

13-18     6.  As used in this section, “signed,” with respect to a record

13-19  that is not a writing, includes the attachment to or logical

13-20  association with the record of an electronic symbol, sound or

13-21  process to or with the record with the present intent to adopt or

13-22  accept the record.

13-23     Sec. 12.  NRS 104.3604 is hereby amended to read as follows:

13-24     104.3604  1.  A person entitled to enforce an instrument, with

13-25  or without consideration, may discharge the obligation of a party to

13-26  pay the instrument:

13-27     (a) By an intentional voluntary act, such as surrender of the

13-28  instrument to the party, destruction, mutilation or cancellation of the

13-29  instrument, cancellation or striking out of the party’s signature, or

13-30  the addition of words to the instrument indicating discharge; or

13-31     (b) By agreeing not to sue or otherwise renouncing rights

13-32  against the party by a signed [writing.] record.

13-33     2.  Cancellation or striking out of an endorsement pursuant to

13-34  subsection 1 does not affect the status and rights of a party derived

13-35  from the endorsement.

13-36     3.  As used in this section, “signed,” with respect to a record

13-37  that is not a writing, includes the attachment to or logical

13-38  association with the record of an electronic symbol, sound or

13-39  process to or with the record with the present intent to adopt or

13-40  accept the record.

13-41     Sec. 13.  NRS 104.3605 is hereby amended to read as follows:

13-42     104.3605  1.  [In this section, the term “endorser” includes a

13-43  drawer having the obligation described in subsection 4 of

13-44  NRS 104.3414.

14-1      2.  Discharge, under NRS 104.3604, of the obligation of a party

14-2  to pay an instrument does not discharge the obligation of an

14-3  endorser or accommodation party having a right of recourse against

14-4  the discharged party.

14-5      3.] If a person entitled to enforce an instrument [agrees, with or

14-6  without consideration, to an extension of the due date of the

14-7  obligation of a party to pay the instrument, the extension discharges

14-8  an endorser or accommodation party having a right of recourse

14-9  against the party whose obligation is extended to the extent the

14-10  endorser or accommodation party proves that the extension caused

14-11  loss to him with respect to the right of recourse.

14-12     4.  If a person entitled to enforce an instrument agrees, with or

14-13  without consideration, to a material modification of the obligation of

14-14  a party other than an extension of the due date, the modification

14-15  discharges the obligation of an endorser or accommodation party

14-16  having a right of recourse against the person whose obligation is

14-17  modified to the extent the modification causes loss to the endorser

14-18  or accommodation party with respect to the right of recourse. The

14-19  loss suffered by the endorser or accommodation party as a result of

14-20  the modification is equal to the amount of the right of recourse

14-21  unless the person enforcing the instrument proves that no loss was

14-22  caused by the modification or that the loss caused by the

14-23  modification was an amount less than the amount of the right of

14-24  recourse.

14-25     5.  If the obligation of a party to pay an instrument is secured by

14-26  an interest in collateral and a person entitled to enforce the

14-27  instrument impairs the value of the interest in collateral, the

14-28  obligation of an endorser or accommodation party having a right of

14-29  recourse against the obligor is discharged to the extent of the

14-30  impairment. The value of an interest in collateral is impaired to the

14-31  extent the value of the interest is reduced to an amount less than

14-32  the amount of the right of recourse of the party asserting discharge,

14-33  or the reduction in value of the interest causes an increase in the

14-34  amount by which the amount of the right of recourse exceeds the

14-35  value of the interest. The burden of proving impairment is on

14-36  the party asserting discharge.

14-37     6.  If the obligation of a party is secured by an interest in

14-38  collateral not provided by an accommodation party and a person

14-39  entitled to enforce the instrument impairs the value of the interest in

14-40  collateral, the obligation of any party who is jointly and severally

14-41  liable with respect to the secured obligation is discharged to the

14-42  extent the impairment causes the party asserting discharge to pay

14-43  more than he would have been obliged to pay, taking into account

14-44  rights of contribution, if impairment had not occurred. If the party

14-45  asserting discharge is an accommodation party not entitled to

15-1  discharge under subsection 5, he is deemed to have a right to

15-2  contribution based on joint and several liability rather than a right to

15-3  reimbursement. The burden of proving impairment is on the party

15-4  asserting discharge.

15-5      7.  Under subsection 5 or 6, impairing value of an interest in

15-6  collateral includes:

15-7      (a) Failure to obtain or maintain perfection or recordation of the

15-8  interest in collateral;

15-9      (b) Release of collateral without substitution of collateral of

15-10  equal value;

15-11     (c) Failure to perform a duty to preserve the value of collateral

15-12  owed under article 9 or other law to a debtor or surety or other

15-13  person secondarily liable; or

15-14     (d) Failure to comply with applicable law in disposing of

15-15  collateral.

15-16     8.  An accommodation party is not discharged under

15-17  subsection 3, 4 or 5 unless the person entitled to enforce the

15-18  instrument knows of the accommodation or has notice under

15-19  subsection 3 of NRS 104.3419 that the instrument was signed for

15-20  accommodation.

15-21     9.  A party is not discharged under this section if:

15-22     (a) The party asserting discharge consents to the event or

15-23  conduct that is the basis of the discharge; or

15-24     (b) The instrument or a separate agreement of the party provides

15-25  for waiver of discharge under this section either specifically or by

15-26  general language indicating that parties waive defenses based on

15-27  suretyship or impairment of collateral.] releases the obligation of a

15-28  principal obligor in whole or in part, and another party to the

15-29  instrument is a secondary obligor with respect to the obligation of

15-30  that principal obligor, the following rules apply:

15-31     (a) Any obligations of the principal obligor to the secondary

15-32  obligor with respect to any previous payment by the secondary

15-33  obligor are not affected. Unless the terms of the release preserve

15-34  the secondary obligor’s recourse, the principal obligor is

15-35  discharged, to the extent of the release, from any other duties to

15-36  the secondary obligor under this article.

15-37     (b) Unless the terms of the release provide that the person

15-38  entitled to enforce the instrument retains the right to enforce the

15-39  instrument against the secondary obligor, the secondary obligor is

15-40  discharged to the same extent as the principal obligor from any

15-41  unperformed portion of its obligation on the instrument. If the

15-42  instrument is a check and the obligation of the secondary obligor

15-43  is based on an endorsement of the check, the secondary obligor is

15-44  discharged without regard to the language or circumstances of the

15-45  discharge or other release.

16-1      (c) If the secondary obligor is not discharged under paragraph

16-2  (b), the secondary obligor is discharged to the extent of the value

16-3  of the consideration for the release, and to the extent that the

16-4  release would otherwise cause the secondary obligor a loss.

16-5      2.  If a person entitled to enforce an instrument grants a

16-6  principal obligor an extension of the time at which one or more

16-7  payments are due on the instrument and another party to the

16-8  instrument is a secondary obligor with respect to the obligation of

16-9  that principal obligor, the following rules apply:

16-10     (a) Any obligations of the principal obligor to the secondary

16-11  obligor with respect to any previous payment by the secondary

16-12  obligor are not affected. Unless the terms of the extension preserve

16-13  the secondary obligor’s recourse, the extension correspondingly

16-14  extends the time for performance of any other duties owed to the

16-15  secondary obligor by the principal obligor under this article.

16-16     (b) The secondary obligor is discharged to the extent that the

16-17  extension would otherwise cause the secondary obligor a loss.

16-18     (c) To the extent that the secondary obligor is not discharged

16-19  under paragraph (b), the secondary obligor may perform its

16-20  obligations to a person entitled to enforce the instrument as if the

16-21  time for payment had not been extended or, unless the terms of

16-22  the extension provide that the person entitled to enforce the

16-23  instrument retains the right to enforce the instrument against

16-24  the secondary obligor as if the time for payment had not been

16-25  extended, treat the time for performance of its obligations as

16-26  having been extended correspondingly.

16-27     3.  If a person entitled to enforce an instrument agrees, with

16-28  or without consideration, to a modification of the obligation of a

16-29  principal obligor other than a complete or partial release or an

16-30  extension of the due date and another party to the instrument is a

16-31  secondary obligor with respect to the obligation of that principal

16-32  obligor, the following rules apply:

16-33     (a) Any obligations of the principal obligor to the secondary

16-34  obligor with respect to any previous payment by the secondary

16-35  obligor are not affected. The modification correspondingly

16-36  modifies any other duties owed to the secondary obligor by the

16-37  principal obligor under this article.

16-38     (b) The secondary obligor is discharged from any unperformed

16-39  portion of its obligation to the extent that the modification would

16-40  otherwise cause the secondary obligor a loss.

16-41     (c) To the extent that the secondary obligor is not discharged

16-42  under paragraph (b), the secondary obligor may satisfy its

16-43  obligation on the instrument as if the modification had not

16-44  occurred, or treat its obligation on the instrument as having been

16-45  modified correspondingly.

17-1      4.  If the obligation of a principal obligor is secured by an

17-2  interest in collateral, another party to the instrument is a

17-3  secondary obligor with respect to that obligation, and a person

17-4  entitled to enforce the instrument impairs the value of the interest

17-5  in collateral, the obligation of the secondary obligor is discharged

17-6  to the extent of the impairment. The value of an interest in

17-7  collateral is impaired to the extent the value of the interest is

17-8  reduced to an amount less than the amount of the recourse of the

17-9  secondary obligor, or the reduction in value of the interest causes

17-10  an increase in the amount by which the amount of the recourse

17-11  exceeds the value of the interest. For purposes of this subsection,

17-12  impairing the value of an interest in collateral includes failure to

17-13  obtain or maintain perfection or recordation of the interest in

17-14  collateral, release of collateral without substitution of collateral of

17-15  equal value or equivalent reduction of the underlying obligation,

17-16  failure to perform a duty to preserve the value of collateral owed,

17-17  under article 9 or other law, to a debtor or other person

17-18  secondarily liable, and failure to comply with applicable law in

17-19  disposing of or otherwise enforcing the interest in collateral.

17-20     5.  A secondary obligor is not discharged under subsection 1,

17-21  2, 3 or 4 unless the person entitled to enforce the instrument

17-22  knows that the person is a secondary obligor or has notice under

17-23  subsection 3 of NRS 104.3419 that the instrument was signed for

17-24  accommodation.

17-25     6.  A secondary obligor is not discharged under this section if

17-26  the secondary obligor consents to the event or conduct that is the

17-27  basis of the discharge, or the instrument or a separate agreement

17-28  of the party provides for waiver of discharge under this section

17-29  specifically or by general language indicating that parties waive

17-30  defenses based on suretyship or impairment of collateral. Unless

17-31  the circumstances indicate otherwise, consent by the principal

17-32  obligor to an act that would lead to a discharge under this section

17-33  constitutes consent to that act by the secondary obligor if the

17-34  secondary obligor controls the principal obligor or deals with the

17-35  person entitled to enforce the instrument on behalf of the principal

17-36  obligor.

17-37     7.  A release or extension preserves a secondary obligor’s

17-38  recourse if the terms of the release or extension provide that the

17-39  person entitled to enforce the instrument retains the right to

17-40  enforce the instrument against the secondary obligor, and the

17-41  recourse of the secondary obligor continues as though the release

17-42  or extension had not been granted.

17-43     8.  Except as otherwise provided in subsection 9, a secondary

17-44  obligor asserting discharge under this section has the burden of

17-45  persuasion both with respect to the occurrence of the acts alleged

18-1  to harm the secondary obligor and loss or prejudice caused by

18-2  those acts.

18-3      9.  If the secondary obligor demonstrates prejudice caused by

18-4  an impairment of its recourse, and the circumstances of the case

18-5  indicate that the amount of loss is not reasonably susceptible of

18-6  calculation or requires proof of facts that are not ascertainable, it

18-7  is presumed that the act impairing recourse caused a loss or

18-8  impairment equal to the liability of the secondary obligor on the

18-9  instrument. In that event, the burden of persuasion as to any

18-10  lesser amount of the loss is on the person entitled to enforce the

18-11  instrument.

18-12     Sec. 14.  NRS 104.4104 is hereby amended to read as follows:

18-13     104.4104  1.  In this article, unless the context otherwise

18-14  requires:

18-15     (a) “Account” means any deposit or credit account with a bank ,

18-16  including a demand, time, savings, passbook, share draft or like

18-17  account, other than an account evidenced by a certificate of deposit.

18-18     (b) “Afternoon” means the period of a day between noon and

18-19  midnight.

18-20     (c) “Banking day” means that part of any day on which a bank is

18-21  open to the public for carrying on substantially all of its banking

18-22  functions.

18-23     (d) “Clearinghouse” means any association of banks or other

18-24  payors regularly clearing items.

18-25     (e) “Customer” means any person having an account with a

18-26  bank or for whom a bank has agreed to collect items, including a

18-27  bank that maintains an account at another bank.

18-28     (f) “Documentary draft” means a draft to be presented for

18-29  acceptance or payment if specified documents, certificated securities

18-30  or instructions for uncertificated securities, or other certificates,

18-31  statements or the like are to be received by the drawee or other

18-32  payor before acceptance or payment of the draft.

18-33     (g) “Draft” means a draft as defined in NRS 104.3104 or an

18-34  item, other than an instrument, that is an order.

18-35     (h) “Drawee” means a person ordered in a draft to make

18-36  payment.

18-37     (i) “Item” means an instrument or a promise or order to pay

18-38  money handled by a bank for collection or payment. The term does

18-39  not include a payment order governed by article 4A or a credit or

18-40  debit card slip.

18-41     (j) “Midnight deadline” with respect to a bank is midnight on its

18-42  next banking day following the banking day on which it receives the

18-43  relevant item or notice or from which the time for taking action

18-44  commences to run, whichever is later.

19-1      (k) “Settle” means to pay in cash, by clearinghouse settlement,

19-2  in a charge or credit or by remittance, or otherwise as instructed. A

19-3  settlement may be either provisional or final.

19-4      (l) “Suspends payments” with respect to a bank means that it has

19-5  been closed by order of the supervisory authorities, that a public

19-6  officer has been appointed to take it over or that it ceases or refuses

19-7  to make payments in the ordinary course of business.

19-8      2.  Other definitions applying to this article and the sections in

19-9  which they appear are:

 

19-10  “Agreement for electronic presentment.” NRS 104.4110.

19-11  [“Bank.” NRS 104.4105.]

19-12  “Collecting bank.” NRS 104.4105.

19-13  “Depositary bank.” NRS 104.4105.

19-14  “Intermediary bank.” NRS 104.4105.

19-15  “Payor bank.” NRS 104.4105.

19-16  “Presenting bank.” NRS 104.4105.

19-17  “Presentment notice.” NRS 104.4110.

 

19-18     3.  The following definitions in other articles apply to this

19-19  article:

 

19-20  “Acceptance.” NRS 104.3409.

19-21  “Alteration.” NRS 104.3407.

19-22  “Cashier’s check.” NRS 104.3104.

19-23  “Certificate of deposit.” NRS 104.3104.

19-24  “Certified check.” NRS 104.3409.

19-25  “Check.” NRS 104.3104.

19-26  “Good faith.” NRS 104.3103.

19-27  “Holder in due course.” NRS 104.3302.

19-28  “Instrument.” NRS 104.3104.

19-29  “Notice of dishonor.” NRS 104.3503.

19-30  “Order.” NRS 104.3103.

19-31  “Ordinary care.” NRS 104.3103.

19-32  “Person entitled to enforce.” NRS 104.3301.

19-33  “Presentment.” NRS 104.3501.

19-34  “Promise.” NRS 104.3103.

19-35  “Prove.” NRS 104.3103.

19-36  “Record.” NRS 104.3103.

19-37  “Remotely created consumer item.” NRS 104.3103.

19-38  “Teller’s check.” NRS 104.3104.

19-39  “Unauthorized signature.” NRS 104.3403.

 

20-1      4.  In addition, article 1 contains general definitions and

20-2  principles of construction and interpretation applicable throughout

20-3  this article.

20-4      Sec. 15.  NRS 104.4207 is hereby amended to read as follows:

20-5      104.4207  1.  A customer or collecting bank that transfers an

20-6  item and receives a settlement or other consideration warrants to the

20-7  transferee and to any subsequent collecting bank that:

20-8      (a) The warrantor is a person entitled to enforce the item;

20-9      (b) All signatures on the item are authentic and authorized;

20-10     (c) The item has not been altered;

20-11     (d) The item is not subject to a defense or claim in recoupment

20-12  (subsection 1 of NRS 104.3305) of any party that can be asserted

20-13  against the warrantor; [and]

20-14     (e) The warrantor has no knowledge of any insolvency

20-15  proceeding commenced with respect to the maker or acceptor or, in

20-16  the case of an unaccepted draft, the drawer[.] ; and

20-17     (f) With respect to any remotely created consumer item, that

20-18  the person on whose account the item is drawn authorized the

20-19  issuance of the item in the amount for which the item is drawn.

20-20     2.  If an item is dishonored, a customer or collecting bank

20-21  transferring the item and receiving settlement or other consideration

20-22  is obliged to pay the amount due on the item according to the terms

20-23  of the item at the time it was transferred, or if the transfer was of an

20-24  incomplete item, according to its terms when completed as stated in

20-25  NRS 104.3115 and 104.3407. The obligation of a transferor is owed

20-26  to the transferee and to any subsequent collecting bank that takes the

20-27  item in good faith. A transferor cannot disclaim its obligation under

20-28  this subsection by an endorsement stating that it is made “without

20-29  recourse” or otherwise disclaiming liability.

20-30     3.  A person to whom the warranties under subsection 1 are

20-31  made and who took the item in good faith may recover from the

20-32  warrantor as damages for breach of warranty an amount equal to the

20-33  loss suffered as a result of the breach, but not more than the amount

20-34  of the item plus expenses and loss of interest incurred as a result of

20-35  the breach.

20-36     4.  The warranties stated in subsection 1 cannot be disclaimed

20-37  with respect to checks. Unless notice of a claim for breach of

20-38  warranty is given to the warrantor within 30 days after the claimant

20-39  has reason to know of the breach and the identity of the warrantor,

20-40  the warrantor is discharged to the extent of any loss caused by the

20-41  delay in giving notice of the claim.

20-42     5.  A cause of action for breach of warranty under this section

20-43  accrues when the claimant has reason to know of the breach.

 

 

21-1      Sec. 16.  NRS 104.4208 is hereby amended to read as follows:

21-2      104.4208  1.  If an unaccepted draft is presented to the drawee

21-3  for payment or acceptance and the drawee pays or accepts the draft,

21-4  the person obtaining payment or acceptance, at the time of

21-5  presentment, and a previous transferor of the draft, at the time of

21-6  transfer, warrant to the drawee that pays or accepts the draft in good

21-7  faith that:

21-8      (a) The warrantor is, or was at the time he transferred the draft, a

21-9  person entitled to enforce the draft or authorized to obtain payment

21-10  or acceptance of the draft on behalf of a person entitled to enforce

21-11  the draft;

21-12     (b) The draft has not been altered; [and]

21-13     (c) The warrantor has no knowledge that the signature of the

21-14  purported drawer of the draft is unauthorized[.] ; and

21-15     (d) With respect to any remotely created consumer item, that

21-16  the person on whose account the item is drawn authorized the

21-17  issuance of the item in the amount for which the item is drawn.

21-18     2.  A drawee making payment may recover from a warrantor

21-19  damages for breach of warranty equal to the amount paid by the

21-20  drawee less the amount the drawee received or is entitled to receive

21-21  from the drawer because of the payment. In addition, the drawee is

21-22  entitled to compensation for expenses and loss of interest resulting

21-23  from the breach. The right of the drawee to recover damages under

21-24  this subsection is not affected by any failure of the drawee to

21-25  exercise ordinary care in making payment. If the drawee accepts

21-26  the draft:

21-27     (a) Breach of warranty is a defense to the obligation of the

21-28  acceptor; and

21-29     (b) If the acceptor makes payment with respect to the draft, the

21-30  acceptor is entitled to recover from a warrantor for breach of

21-31  warranty the amounts stated in this subsection.

21-32     3.  If a drawee asserts a claim for breach of warranty under

21-33  subsection 1 based on an unauthorized endorsement of the draft or

21-34  an alteration of the draft, the warrantor may defend by proving that

21-35  the endorsement is effective under NRS 104.3404 or 104.3405 or

21-36  the drawer is precluded under NRS 104.3406 or 104.4406 from

21-37  asserting against the drawee the unauthorized endorsement or

21-38  alteration.

21-39     4.  If a dishonored draft is presented for payment to the drawer

21-40  or an endorser, or any other item is presented for payment to a party

21-41  obliged to pay the item, and the item is paid, the person obtaining

21-42  payment and a prior transferor of the item warrant to the person

21-43  making payment in good faith that the warrantor is, or was at the

21-44  time he transferred the item, a person entitled to enforce the item or

21-45  authorized to obtain payment on behalf of a person entitled to

22-1  enforce the item. The person making payment may recover from any

22-2  warrantor for breach of warranty an amount equal to the amount

22-3  paid plus expenses and loss of interest resulting from the breach.

22-4      5.  The warranties stated in subsections 1 and 4 cannot be

22-5  disclaimed with respect to checks. Unless notice of a claim for

22-6  breach of warranty is given to the warrantor within 30 days after the

22-7  claimant has reason to know of the breach and the identity of the

22-8  warrantor, the warrantor is discharged to the extent of any loss

22-9  caused by the delay in giving notice of the claim.

22-10     6.  A cause of action for breach of warranty under this section

22-11  accrues when the claimant has reason to know of the breach.

22-12     Sec. 17.  NRS 104.4212 is hereby amended to read as follows:

22-13     104.4212  1.  Unless otherwise instructed, a collecting bank

22-14  may present an item not payable by, through or at a bank by sending

22-15  to the party to accept or pay a [written] record providing notice that

22-16  the bank holds the item for acceptance or payment. The notice must

22-17  be sent in time to be received on or before the day when

22-18  presentment is due and the bank must meet any requirement of the

22-19  party to accept or pay under NRS 104.3501 by the close of the

22-20  bank’s next banking day after it knows of the requirement.

22-21     2.  If presentment is made by notice and payment, acceptance or

22-22  request for compliance with a requirement under NRS 104.3501 is

22-23  not received by the close of business on the day after maturity or in

22-24  the case of demand items by the close of business on the third

22-25  banking day after notice was sent, the presenting bank may treat the

22-26  item as dishonored and charge any drawer or endorser by sending

22-27  him notice of the facts.

22-28     Sec. 18.  NRS 104.4301 is hereby amended to read as follows:

22-29     104.4301  1.  If a payor bank settles for a demand item other

22-30  than a documentary draft presented otherwise than for immediate

22-31  payment over the counter before midnight of the banking day of

22-32  receipt , the payor bank may revoke the settlement and recover the

22-33  settlement if, before it has made final payment and before its

22-34  midnight deadline, it:

22-35     (a) Returns the item; [or]

22-36     (b) Returns an image of the item, if the party to which the

22-37  return is made has entered into an agreement to accept an image

22-38  as a return of the item and the image is returned in accordance

22-39  with that agreement; or

22-40     (c) Sends [written] a record providing notice of dishonor or

22-41  nonpayment if the item is unavailable for return.

22-42     2.  If a demand item is received by a payor bank for credit on its

22-43  books , it may return the item or send notice of dishonor and may

22-44  revoke any credit given or recover the amount thereof withdrawn by

23-1  its customer, if it acts within the time limit and in the manner

23-2  specified in subsection 1.

23-3      3.  Unless previous notice of dishonor has been sent , an item is

23-4  dishonored at the time when for purposes of dishonor it is returned

23-5  or notice sent in accordance with this section.

23-6      4.  An item is returned:

23-7      (a) As to an item presented through a clearinghouse, when it is

23-8  delivered to the presenting or last collecting bank or to the

23-9  clearinghouse or is sent or delivered in accordance with

23-10  clearinghouse rules; or

23-11     (b) In all other cases, when it is sent or delivered to the bank’s

23-12  customer or transferor or pursuant to his instructions.

23-13     Sec. 19.  NRS 104.4403 is hereby amended to read as follows:

23-14     104.4403  1.  A customer or any person authorized to draw on

23-15  the account if there is more than one person, may stop payment of

23-16  any item drawn on the customer’s account or close the account by

23-17  an order to the bank describing the item or account with reasonable

23-18  certainty received at a time and in a manner that affords the bank a

23-19  reasonable opportunity to act on it before the happening of any of

23-20  the events described in NRS 104.4303. If the signature of more than

23-21  one person is required to draw on an account, any of these persons

23-22  may stop payment or close the account.

23-23     2.  A stop-payment order is effective for 6 months, but it lapses

23-24  after 14 calendar days if the original order was oral and was not

23-25  confirmed in [writing] a record within that period. A stop-payment

23-26  order may be renewed for additional 6-month periods by a [writing]

23-27  record given to the bank within a period during which the stop-

23-28  payment order is effective.

23-29     3.  The burden of establishing the fact and amount of loss

23-30  resulting from the payment of an item contrary to a stop-payment

23-31  order or order to close an account is on the customer. The loss from

23-32  payment of an item contrary to a stop-payment order may include

23-33  damages for dishonor of subsequent items under NRS 104.4402.

23-34     Sec. 20.  NRS 104.9525 is hereby amended to read as follows:

23-35     104.9525  1.  Except as otherwise provided in subsection 5,

23-36  the fee for filing and indexing a record under this part, other than an

23-37  initial financing statement of the kind described in subsection [2 of

23-38  NRS 104.9502,] 3, is:

23-39     (a) Twenty dollars if the record is communicated in writing and

23-40  consists of one or two pages;

23-41     (b) Forty dollars if the record is communicated in writing and

23-42  consists of more than two pages, and $1 for each page over 20

23-43  pages;

23-44     (c) Ten dollars if the record is communicated by another

23-45  medium authorized by filing-office rule; and

24-1      (d) One dollar for each additional debtor, trade name or

24-2  reference to another name under which business is done.

24-3      2.  The filing officer may charge and collect $1 for each page of

24-4  copy or record of filings produced by him at the request of any

24-5  person.

24-6      3.  Except as otherwise provided in subsection 5, the fee for

24-7  filing and indexing an initial financing statement of the following

24-8  kind [described in subsection 3 of NRS 104.9502] is:

24-9      (a) Forty dollars if the financing statement indicates that it is

24-10  filed in connection with a public-finance transaction; and

24-11     (b) Twenty dollars if the financing statement indicates that it is

24-12  filed in connection with a manufactured-home transaction.

24-13     4.  The fee for responding to a request for information from the

24-14  filing office, including for issuing a certificate showing whether

24-15  there is on file any financing statement naming a particular debtor,

24-16  is:

24-17     (a) Twenty dollars if the request is communicated in writing;

24-18  and

24-19     (b) Fifteen dollars if the request is communicated by another

24-20  medium authorized by filing-office rule.

24-21     5.  This section does not require a fee with respect to a

24-22  mortgage that is effective as a financing statement filed as a fixture

24-23  filing or as a financing statement covering as-extracted collateral or

24-24  timber to be cut under subsection 3 of NRS 104.9502. However, the

24-25  fees for recording and satisfaction which otherwise would be

24-26  applicable to the mortgage apply.

 

24-27  H