Tuesday, March 3, 2009

Case law - Original Note required for foreclosure

Trial court erred when it did not proceed to take testimony before it
entered default judgment for plaintiff; unsworn statement of plaintiff's
attorney could not support default judgment rendered.” It is also true,
in mortgage foreclosures, prove up of the claim requires presentment of the
original promissory note and general account and ledger statement. Claim of
damages, to be admissible as evidence, must incorporate records such as a
general ledger and accounting of an alleged unpaid promissory note, the
person responsible for preparing and maintaining the account general ledger
must provide a complete accounting which must be sworn to and dated by the
person who maintained the ledger. See * Pacific** Concrete F.C.U. V.
Kauanoe, * 62 Haw. 334, 614 P.2d 936 (1980), *GE Capital Hawaii, Inc. v.
Yonenaka 25* P.3d 807, 96 Hawaii 32, (Hawaii App 2001), *Fooks** v. Norwich
Housing Authority *28 Conn. L. Rptr. 371, (Conn. Super.2000), and *Town of
Brookfield v. Candlewood Shores Estates, Inc. *513 A.2d 1218, 201 Conn.1
(1986). See also *Solon v. Godbole,* 163 Ill. App. 3d 845, 114 Ill. Dec.
890, 516 N. E.2d 1045 (3Dist. 1987). Siwooganock, in alleged foreclosure
suit, failed or refused to produce the actual note which
Siwooganockalleges Eva J. Lovejoy owed.
Where the complaining party can not prove the existence of the note, then
there is no note. To recover on a promissory note, the plaintiff must prove:
(1) the existence of the note in question; (2) that the party sued signed
the note; (3) that the plaintiff is the owner or holder of the note; and (4)
that a certain balance is due and owing on the note. See *In Re:* *SMS
Financial LLc. v. Abco Homes, Inc*. No.98-50117 February 18, 1999 (5th
Circuit Court of Appeals.), Volume 29 of the New Jersey Practice Series,
Chapter 10 Section 123, page 566, emphatically states, “...; and no part
payments should be made on the bond or note unless the person to whom
payment is made is able to produce the bond or note and the part payments
are endorsed thereon. It would seem that the mortgagor would normally have a
Common law right to demand production or surrender of the bond or note and
mortgage, as the case may be. See Restatement, Contracts S 170(3), (4)
(1932); C.J.S. Mortgages S 469, in *Carnegie Bank v, Shalleck* 256 N.J.
Super 23 (App. Div 1992), the Appellate Division held, “When the underlying
mortgage is evidenced by an instrument meeting the criteria for
negotiability set forth in N.J.S. 12A:3-104, the holder of the instrument
shall be afforded all the rights and protections provided a holder in due
course pursuant to N.J.S. 12A:3-302" Since no one is able to produce the
“instrument” there is no competent evidence before the Court that any party
is the holder of the alleged note or the true holder in due course. New
Jersey common law dictates that the plaintiff prove the existence of the
alleged note in question, prove that the party sued signed the alleged note,
prove that the plaintiff is the owner and holder of the alleged note, and
prove that certain balance is due and owing on any alleged note. Federal
Circuit Courts have ruled that the only way to prove the perfection of any
security is by actual possession of the security. See *Matter of Staff Mortg.
& Inv. Corp., 550 F.2d 1228 (9th Cir 1977).* “Under the Uniform Commercial
Code, the only notice sufficient to inform all interested parties that a
security interest in instruments has been perfected is actual possession by
the secured party, his agent or bailee.” Bankruptcy Courts have followed the
Uniform Commercial Code. *In Re Investors & Lenders, Ltd*. 165 B.R. 389
(Bkrtcy.D.N.J.1994), “Under the New Jersey Uniform Commercial Code (NJUCC),
promissory note is “instrument,” security interest in which must be
perfected by possession ...” Unequivocally the Court’s rule is that in order
to prove the “instrument”, possession is mandatory.

No comments: