Foreclosure defense: Requirements to show the note

Mortgage Securities Inc. v. Harley
                  Lord, No. 4D02-4051. July 23,
2003. Mortgage by assignment brought foreclosure action. The Circuit
Court, 15th Judicial
                  Circuit, Palm Beach County, Edward Fine and
John Wessel II, entered summary judgment for mortgagor. Mortgagor
appealed.
                  The District Court of Appeal, Stone J. held THAT MORTGAGE
COULD NOT MAINTAIN CAUSE OF ACTION TO
ENFORCE MISSING
                  PROMISSORY NOTE OR FORECLOSE MORTGAGE, IN ABSENCE
OF PROOF THAT MORTGAGEE OR ASSIGNOR EVER HAD POSSESSION OF NOTE.

Another Court case: Lorraine C. Tillman v. Virginia Savage
Smith (07/25/85) The purpose of the section is well
                  expressed
by commentator Carl W. Ehrhardt as follows: [21\ The drafters
of the Code excluded from the general rule
                  of admissibility of
duplicates these documents because the possessor of the documents
is the owner of the obligation
                  that they represent and the party
who may bring a case of action based on the document, therefore,
the person who
                  possesses the duplicate may not possess the cause
of action. For example, if A makes a zerox copy of a promissory
note and subsequently negotiates the original to B, under section
90.953(1), A, the transferor, is not able to sue
                  on the Xerox copy
of the promissory note [22]. Ehrhardt, Florida Evidence 953,1 (2d
ed. 1984). See also Lowery V.
                  State, 402 So. 2d 1287 (Fla. 5th DCA
1981). To fall under section 90.953(1), the agreement would have not
only to
                  evidence a right to the payment of money, but be "of a type
that is transferred by delivery in the ordinary course
                  of business
with any necessary endorsement or assignment" (emphasis added).

Another Court case: Mason
                  v. Rubin, 727 So. 2d 283, 37 UCC Rep
Serv. 2d 1087 (Fla. App. Dist. 4 02/10/1999) Establishing a lost
negotiable
                  instrument is governed by a different statute, section
673.3091, Florida Statutes (1993). The later statute contains
                  more
stringent requirement than the former, and the trial court correctly
concluded that the husband did not satisfy
                  section 673.3091.

Figuerredo v. Bank Espirito Santo No. 88-1808. Jan. 31, 1989. FL
Third District. The Plaintiff
                  failed to produce for admission into
evidence the original copy of a negotiable promissory instrument
as is expressly
                  required by section 90.953(1), Florida Statutes
(1987). For this reason, the final judgment of foreclosure is
vacated
                  with directions for the trial court to receive the original
promissory note in evidence.

Another Court Case:
                  SMS Financial LLc. V. Alico Homes
Inc. No. 98-50117. February 18, 1999 (167 F.3d.235; 5th Circuit
Court of Appeals)
                  Where the complaining party cannot 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.
                  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, 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
                  Mort. & 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, but
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), Unequivocally the Court's rule is that
in order
                  to prove the "instrument", possession is mandatory.
In addition to the note, another element of proof is necessary
                  -
an accounting that is signed and dated by the person responsible
for the account. 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

See 90.953, West Fla Stat.
                  Annot. (1979) Sponsor's Note);
C. Ehrhardt, Florida Evidence 953.1 at 605 & n5; Lowery v. State,
402 So.2d 1287,
                  1288-89 (Fla.5th DCA 1981). 90.953(1), Florida
Statutes is misplaced. The purpose of that subsection is to
REQUIRE
                  PRODUCTION OF THE ORIGINAL where there is an action on a
negotiable instrument. In such instances, the original instrument
MUST BE BROUGHT FORWARD both to demonstrate the right to payment
and to preclude the possibility that the instrument
                  has already been
negotiated. [11] State Street sought to establish the promissory note
and mortgage under section
                  71.011, Florida Statutes. State Street
alleged that Hartley executed the note and mortgage and that, after
multiple
                  assignments, the documents were assigned to state Street
by EMC. Mortgage Corporation. Although State Street alleged
                  in its
pleading that the original document were received by it, the record
established that State Street never had
                  possession of the original
note and further, that its assignor, EMC, never had possession of
the note, and thus,
                  was not able to transfer the original note
to State Street. [12] The trial court correctly concluded that
as State
                  street never had actual or constructive possession of the
promissory note, State Street could not, as a matter of law,
                  maintain
a cause of action to enforce the note or foreclose the mortgage.
The rights to enforce the lost instrument
                  was not properly assigned
where neither State Street nor its predecessor in interest possessed
the note and did
                  not otherwise satisfy the requirements of section
673.3091, Florida Statutes, at the time of the assignment. See
Slizyk
                  v. Smilack, 825 So. 2d 428, 430 (Fla. 4th DCA 2002).

In Manon v. Rubin 727 So. 2d 283 Fla. 4th DCA 1999), the appellant
brought a foreclosure action on a second mortgage. The trial court
denied the foreclosure, and this court affirmed
                  on the basis that
the appellant had failed to establish the lost note under section
673.3091. Likewise, here where
                  State Street failed to comply with
section 673.3091, the trial court correctly entered summary judgment
denying
                  its foreclosure claim. In contrast here, the undisputed
evidence was that EMC, the assignor, never had possession of
                  the
notes and thus, could not enforce the note under section 673.3091
governing lost notes. Because EMC could not
                  enforce the lost note
under sections 673.3091, it had no power of enforcement which it
could assign to State Street.

Raymond F. Shores and Marcene G. Shores v. First Florida Resource
Corporation (10/11/72). Appellants are entitled
                  to assurance that
they will not later be sued by a holder of these instruments. If
there are any parties having
                  any claim to these instruments they
should be brought into the action and the matter determined. The
instruments
                  should then be reestablished, recorded and an appropriate
judgment entered.

<http://www.judicial_state.ia.us/appeals/opinions/20040909/02-1889.asp>

No. 4-561/02-1889 Filed September 9, 2004 Chase Manhatten Mortgage
Corporation vs. Lynne E. Goodrich
                  and Leana M. Goodrich Several of
the separate contentions articulated by the Goodriches point that
the summary judgment
                  record was insufficient to support the summary
judgment and decree of foreclosure. Central to these contensions
is
                  the mistaken notion that a judgment of foreclosure could not
be entered because Chase failed to produce the original
                  of the
promissory note. Iowa Rule of Civil Procedure 1.961 contemplates
that judgment on a note may be entered without
                  production of the
original note if the court so orders. The district court did by
order authorize the foreclosure
                  despite Chase's failure to produce
the original note. Thus, we conclude the summary judgment record
was not insufficient
                  to support the judgment of foreclosure despite
Chase's failure to produce the original note .


In a foreclosure,
                  the borrower really doesn't know if the
lender/servicer foreclosing on him has subject matter jurisdiction
or legal
                  standing to even bring an action. This case law that PROVES
THE original note must be shown & produced. This case
                  happened
before the media discovered all of the mortgage fraud of lenders
in 2010. This requirement guarantees that
                  the borrower doesn't end
up paying twice for the original debt.

MCCay v. Capital Resources Company LTD. 96-200
                  S.W. 2d 1997

"Whether appellee apparently never possessed appellant original
note as provided in Ark.
                  Code Ann 4-3-309(a)(i) (Repl. 1991), BUT
WAS REQUIRED, even if it had, to have proven all three factors
specified
                  in 4-3-309 (a) and did not do so, APPELLEE COULD NOT
ENFORCE THE ORIGINAL NOTE'S TERMS BY THE USE OF A COPY, EVEN IF
ALL THREE REQUIREMENTS IN 4-3-309(A) HAD BEEN PROVEN, the trial
court was still obligated to ensure that appellee provided
                  adequate
protection to the appellants from ANY FUTURE CLAIM, and this, too,
was not done. First, as previously discussed,
                  we intention the
unfairness in these circumstances that, if a duplicate was allowed
in place of the original note,
                  the McKays would later be SUBJECTED
TO DOUBLE LIABILITY if the actual holder of the note appeared. Next
we add that
                  the Rules of Evidence are rules of the court involving
legal proceedings, while the UCC is composed of statutes of law
that established the rights and liabilities of persons. Again,
as previously discussed, Capital Resources, as an assignee
                  of the
McKays note, could not sue on the underlying debt the McKays owed
to Landmark Savings. For Capital Resources
                  to have prevailed in
enforcing the McKays note, it was REQUIRED EITHER TO PRODUCE THE
ORIGINAL or ratify the requirements
                  for a lost negotiable instrument
under 4-3-309(a) and (b). Because Capital failed to do either,
we MUST REVERSE
                  AND REMAND."


See <http://www.myprimarytradelines.info/instant_modification.html>
-shows court cases where the banks have lost. Some of the cases
mentioned that the note & the mortgage
                  & all assignments are
necessary to be filed in court to show standing on the foreclosure.

Also go to this
                  website:

foreclosure case law at
<http://privateaudio.homestead.com/Bank-Fraud.html> shows court
cases explaining how the law requires the original note.

Re: Requirement to Produce Original
                  Note Posted by: "Dana Shetterly"
dana.shetterly@gmail.com indio007_2000 Wed Dec 8, 2010 7:48 am (PST)
[Attachment(s)
                  from Dana Shetterly included below]

It's a common law rule and therefore applies to every state.It's
either
                  Produce the original or reestablish the note and give
indemnity. It has to be demanded though. Judge's are lazy and
silence = consent.

There is a caveat though, a plaintiff can prove the debt with other
evidence. The note
                  is simply the best evidence and the reason they
use it is because as we know the Plaintiff is not the original
lender
                  and isn't in possession of evidence of the original loan
i.e. cancelled check, wire transfer record etc...

Here's
                  a Florida case attached . There is a lot of good stuff in
this ruling including a cite that says attorney's must reveal
                  the
correct case law even if it is contrary to their claim.

"In order to prevail in a mortgage foreclosure
                  action, the Plaintiff
must produce the original note or reestablish the note pursuant
to law. National Loan Investors
                  v. Joygpar Association, 767
So. 2d 549 (3d D.C.A. Fla. 2000); Pastore-Borroto Development,
Inc., v. Marevista Apartments,
                  M.B., Inc., 596 So. 2d 526
(3d D.C.A. Fla. 1992); see State Steet Bank and Trust Company
v. Lord, 851 So. 2d 790
                  (4th D.C.A. Fla. 2003); see also, Lawyers
Titles Insurance v. Novastar Mortgage, Inc., 862 So. 2d 793 (4th
D.A.C.
                  Fla. 2004). "

"The heart of all legal ethics is in the lawyers duty of candor to
a tribunal. It
                  is an exacting duty with an imposing burden. Unlike
many provisions of the disciplinary rules, which rely on the
court
                  or an opposing lawyer for their invocation, the duty of
candor depends on self-regulation; every lawyer must spontaneously
disclose contrary authority to a tribimal. It is coimter-intuitive,
cutting against the lawyers principal role as an
                  advocate. It is
also operated most inconvenientlythat is, when victory seems within
grasp. But it is precisely because
                  of these things that the duty
is so necessary. Although we have an adversary system of justice,
it is one founded
                  on the rule of law. Simply because our system is
adversarial does not make it unconcerned with outcomes. Might does
not make right, at least in the courtroom. We do not accept the
notion that outcomes should depend on who is the most
                  powerful,
most eloquent, best dressed, most devious and most persistent
with the last word-or, for that matter,
                  who is able to misdirect
a judge. American civil justice is so designed that established
rules of law will be applied
                  and enforced to insure that justice be
rightly done. Such a system is surely defective, however, if it is
acceptable
                  for lawyers to "suggest" a trial judge into applying a
"rule" or a "discretion" that they
                  knowor should know-is contrary
to existing law. Even if it hurts the strategy and tactics of a
partys counsel, even
                  if it prepares the way for an adverse ruling,
even though the adversary has himself failed to cite the correct law,
the lawyers is required to disclose law favoring his adversary when
the court is obviously under an erroneous impression
                  as to the laws
requirements. Forum, 788 So. 2d 1062 (footnote omitted). E Peter
T. Fay, "Officer of the Court",
                  60 Fla. B.J. 9 (1986)."