Foreclosure Defense Florida

Lost Note and the 90 Day Moritorium on Foreclosures in Florida

Foreclosure Fraud Fighter, Founder of JEDTI (Jurists Engaged in the Defense of Title Integrity) and Friend Greg Clark, a Clearwater attorney has been ranting away like a madman about “MERS Splitting” and “Produce the Original Note”….here’s the thing about madmen…..

When they’re brilliant, hard working and careful with their facts, sometimes they need to be listened to.

One of Clark’s main issues has to do with the fact that on the one hand Plaintiffs toss promissory notes into the court file then ask that they be treated with such dignity and respect that nothing else be questioned.   On the other hand, we find that Courts around the state are routinely handing promissory notes back to Plaintiffs and law firms.

The Fourth Circuit Appeals Court opinion, Elliott v. Aurora first published here describes how courts in Broward County, routinely hand the promissory note back over to Plaintiffs right after Summary Judgment is granted…that’s obscenely improper and is a violation of a litigant’s fundamental procedural rights…if the Defendant appeals, the evidence used to convict him is back in the hands of the Plaintiff.

You see in one case, my Motion to Dismiss was granted because the endorsements on the face of the note are questionable.   The thing is, according to the legal reasoning advanced by the Plaintiffs, and routinely accepted by courts is that promissory notes are negotiable instruments….that means they are to be treated like $100,000 or $500,000 bills…

You’re now starting to see title insurance commitments requiring…as a condition of issuing new title insurance..to have the original note in possession or proof that it was destroyed as a condition of issuing the title insurance…such requirements are becoming increasingly common….and they’re based in part on the following Florida Supreme Court case….which is still good law:

SCOTT Ñ‚. TAYLOR.

(Supreme Court of Florida. Feb. 6, 1912.)

A mortgage executed as security for the payment of a negotiable promissory note is a mere incident of and ancillary to such note. When it comes to the payment thereof, the rights of the parties thereto, as well as of third persons, are governed by the rules relating to negotiable paper; in other words, payment to any one other than the holder of the negotiable instrument is at the risk of the payer, and is binding upon the holder of the paper only where express or implied authority to receive such payment is established by the person making the same. Hence payment of a negotiable note secured by mortgage by the mortgagor or his grantee, where made to the original mortgagee who is not in possession of the note and mortgage, is not binding upon an assignee thereof before maturity who was in possession of the papers at the time of such payment, unless he had expressly or impliedly authorized such payment.

The duty of a maker of a negotiable note to see that the person to whom he pays it has it in his possession before making the payment is not affected by the fact that the note was on its face payable at the office of the person to whom he makes the payment.

The maker of a negotiable promissory note can satisfy it only by payment to the owner at the time of such payment, or to such owner’s authorized agent. If the recipient of the money is not actually authorized, the payment is ineffectual, unless induced by unambiguous direction from the owner, or justified by actual possession of the note. This rule applies generally to all negotiable paper, independently of the existence of any mortgage or other security.

TAYLOR, J. The appellee Emma H. Tay: lor filed her bill In equity in the circuit court of Escambla county for foreclosure of mortgage against the appellant J. Conrad Scott and his wife, Alice K. Scott, and the Pensacola Home & Savings Association, a corporation.

The bill alleged, In substance: That the said J. Conrad Scott, being Indebted to D. Hale Wilson In the sum of $400, executed and delivered to the said D. Hale Wilson his promissory note, whereby he did promise to pay to the order of the said D. Hale Wilson “¢?400, with Interest at the rate of 8 per cent, per annum from date until paid, interest payable quarter annually, said principal sum to be paid two years after the date of said note. By the terms of said note it was provided that It should be payable at the office of said D. Hale Wilson & Co., Pensacola, Fla., and that after default In payment, and the note should have been placed In the hands of an attorney for collection, the maker would pay an attorney’s fee of 5 per cent. If paid before suit, and 10 per cent, if paid after suit and all costs of collection. That said note is long since past due aud Is unpaid, and before its maturity for a valuable consideration the same was Indorsed and transferred to your oratrlx, Emma H. Taylor, by the said D. Hale Wilson, aud she Is now the owner and holder of same. That to secure the payment of the said note the said J. Conrad Scott and his wife, Alice K. Scott, on the same day, March 24, 1906, did execute and deliver to the said D. Hale Wilson their certain mortgage deed as security for the payment of the said note, thereby conveying to the said D. Hale Wilson, his heirs and assigns, the following real estate situated in the city of Pensacola, Escambla county, Fla., to wit: Lots 3, 4, and 5, in. block 170, New City tract, according to шар published by Thos. C. Watson in 1SS4.

By the terms of said mortgage it was provided: That it was Intended to secure the payment of the promissory note above mentioned, and that the mortgagors would keep perfect and unimpaired the security thereby given, and that the said Indebtedness covered by said mortgage should become immediately due and said mortgage foreclosable for all sums secured thereby, if the said Indebtedness or any part thereof or the interest or any Installment thereof should not be paid according to the terms of the said note, and that, if foreclosure of said mortgage should be had or a suit to foreclose same be rightfully begun, the mortgagors would pay all costs and expenses of said suit, including an attorney’s fee to the attorney of the complainant foreclosing of $15, and 10 per cent, upon the amount decreed to the complainant, which costs and fees should be included in the lien of said mortgage and In the sum decreed upon foreclosure. That said mortgage was duly recorded on the 20th day of March, 1906, in the clerk’s office of Escambia county. That at the time of the Indorsement, transfer, and assignment of snld nromfsporv note to your oratrlx, Emma H. Taylor, the said D. Hale Wilson transferred and assigned me said mortgage to your oratrix and delivered to her said note and mortgage, and said note and mortgage have been In her possession ever since. That subsequent to the making and recording of said note and mortgage, to wit, on or about March 3, 1909. and long subsequent to the time when вяГЯ note and mortgage had been assigned and Indorsed to your oratrix by the said D. Hale Wilson, and at a time when the said note and mortgage were not in possession of said D. Hale Wilson, but were in possession of your oratrix, the said D. Hale Wilson executed what purported to be a cancellation of said mortgage, and procured same to be entered upon the mortgage cancellation records of Escambia county, Fia., but at the time of the execution of said cancellation the said D. Hale Wilson vras not the agent of your oratrix or authorized to act for her. That the amount due upon the said note and mortgage was reduced by a payment made on July 24, 1908, of $200, but that the balance with interest and attorney’s fees is still due and unpaid. That said cancellation was executed and placed upon record without the knowledge or consent of your oratrix, and without the payment to her of any sum whatever, and she never knew the same until during the summer of the year 1910, when her attention was called to the fact by some person who had examined the records, and found such cancellation apparently of record. The bill expressly waives oath to the answer of the defendant.

The defendants J. Conrad Scott and his wife answered the bill, In which they admit the execution and delivery of the note and mortgage as alleged, but deny that the same is long past due and unpaid, and disclaim any knowledge of the indorsement and transfer of the same to the complainant, or that she is now the owner and holder of said note. The answer further alleges that the defendants on or about March 3, 1909, without any knowledge that the said note and mortgage had been assigned and indorsed to complainant by the said D. Hale Wilson, and without any knowledge that the said note and mortgage was not in the possession of said D. Hale Wilson, and without any knowledge that the said note and mortgage was in the possession of complainant as alleged, paid to said D. Hale Wilson the amount of the said mortgage, and secured a cancellation from the said D. Hale Wilson which was duly recorded upon the mortgage cancellation records of Escambia county. The answer disclaims any knowledge as to whether the said D. Hale Wilson was or not the agent of the complainant And the answer further alleges that the whole of said Indebtedness has been paid, and denies that any part of the original due as alleged. The answer further alleges that until about the time of the filing of complainant’s bill and long after same had been paid they had no knowledge whatever that the said note and mortgage had been sold and transferred by the said D. Hale Wilson to complainant as alleged in her bill, and that such knowledge was acquired after the said note and mortgage had been fully paid and satisfied as hereinbefore alleged.

The answer further asserts that, by reason of complainant’s failure to notify defeudants of said acquisition and ownership of the said note and mortgage as alleged, complainant constituted said D. Hale Wilson as her agent, and the payments so made by defendant on account of the said note and mortgage to the said D. Hale Wilson ae aforesaid were made to complainant’s agent for the use and benefit of complainant. The answer further asserts that the said note contained the statement that “this note secured by mortgage,” and that the note and the mortgage were part and parcel of but one and the same transaction, and that by reason of the conditions contained in the mortgage as to the mortgagor keeping the premises insured for the benefit of the mortgagee, and keeping the taxes on the property paid up, and that, In default In the mortgagor in these respects, the mortgagee might pay the same upon which the mortgage Hen should extend to and cover all such payments for insurance and taxes, and that the said mortgage and all sums secured to be paid thereby should at once become due and foreclosable in the event of default in the payment of any sum due thereon or in the payment of any Installment of interest when due, and the covenant in said mortgage to pay attorney’s fees of $15 and 10 per cent, of the amount duo for principal and interest, all rendered and made the said note nonnegotiable, and that the same was merely assigned by said D. Hale Wilson to complainant, who took the same subject to all equities existing between the said Wilson and defendants, and, because of the assignment of said nonnegotiable note and mortgage to complainant by said Wilson, it became and was the duty of complainant to give the defendants due notice of such assignment, that defendants might make their future payments to complainant. The cause was heard before the chancellor on the bill, and exhibits of the original mortgage and note, and the answer of the defendants, and a final decree rendered in favor of the complainant and against the defendants foreclosing the said mortgage for the total sum of $390.06, inclusive of interest and attorney’s fees, and adjudging the mortgaged property to be sold to pay the same. From this final decree, the defendant J. Conrad Scott took his appeal* to this court, and assigns the said decree to be error.

the payment of a negotiable promissory note Is a mere incident of and ancillary to such note. When it conies to the payment thereof, the rights of the parties thereto, as well as of third persons, are governed by the rules relating to negotiable paper; in other words, payment to any one other than the holder of the negotiable instrument is at the risk of the payer, and is binding upon the holder of the paper only where express or implied authority to receive such payment is established by the person making the same. Payment of a negotiable note secured by mortgage by the mortgagor or his grantee, where made to the original mortgagee who is not In possession of the note and mortgage, is not binding upon an assignee thereof before maturity who was In possession of the papers at the time of payment, unless he had expressly or impliedly authorized such payment. Smith v. First Nat. Bank of Cadiz, Ohio, 23 Okl. 411, 104 Рас. 1080, 29 L. R. Л. (N. S.) 676, and authorities cited in notes, 138 Am. St. Rep. 850.

The duty of a maker of a negotiable note to see that the person to whom he pays it has It In his possession before making the payment is not affected by the fact that the note was on its face made payable at the office of the person to whom he makes the payment Powers v. Woolfolk, 132 Mo. App. 354, 111 S. W. 1187; Hoffmaster v. Black, 78 Ohio St. 1, 84 N. E. 423, 21 L. R. A. (N. S.) 62, 125 Am. St. Rep. 679, 14 Ann. Cas. 877; Baxter v. Little, 6 Mete. (Mass.) 7, 39 Am. Dee. 707.

The maker of a negotiable promissory note can satisfy it only by payment to the owner at the time of such payment, or to such owner’s authorized agent If the recipient of the money is not actually authorized, the payment is ineffectual, unless Induced by unambiguous direction from the owner or justified by actual possession of the note. This rule applies generally to all negotiable paper, Independently of the existence of any mortgage or other security. Marling v. Nonimensen, 127 Wis. 363, 106 N. W. 844, 5 L. R. A. (N. S.) 412, 115 Am. St. Rep. 1017, 7 Ann. Oas. 364 ; Baumgartner v. Peterson. 93 Iowa, 572, 62 N. W. 27 ; Burhans v. Ilutcheson, 25 Kan. 625, 37 Am. Rep. 274; Birket v. El ward, €8 Kan. 295, 74 Рас. 1100, 64 L. R. A. 568, 104 Am. St. Rep. 405, 1 Ann. Cas. 272; Smith v. Lawson, 18 V. Va. 212, 41 Am. Rep. 688 ; Carpenter v. Longan, 16 Wall. 271, 21 L. Ed. 313; Swift v. Bank of Washington, 114 Fed. 643, 52 C. O. A. 339.

Under the rules of law governing negotiable Instruments as announced In the foregoing authorities, we think the decree of the court below appealed from in this case was proper.

“¢ The defendant knew that he had made and delivered to D. Hale Wilson a negotiable promissory note that was transferable by indorsement to another, and yet, without Inquiring as to such transfer and without production of the note and mortgage, he pays the amount due upon such note to Wilson, the original payee, when such note had been transferred to the complainant and was then held and owned by her, and without any delegation of authority from her to said Wilson either express or implied to receive such payment Under these circumstances, such payment to Wilson was unauthorized, and the complainant Is not affected thereby. There is no merit in the contention that the conditions expressed in the mortgage rendered the note nonnegotiable. Neither Is there anything disclosed by the circumstances set forth in the pleadings from which It can legally be Implied that Wilson was authorized to act as agent for the complainant in receiving payment of this note from the defendant

Finding no error, the decree appealed from Is hereby affirmed at the costs of appellant

WHITFIEbD, C. J., and SHACKLEFORD, COCKRELL, and HOCKER, JJ., concur.

3 Comments

  • Greg Clark says:

    The Saga of Mr. and Mrs Conrad Scott is the story of unfair risk for every regular American who borrows money and pays it back without checking first that they are paying the true holder/owner of the obligation, and every new buyer and lender who wants clean title to their investment. Be Forewarned: You may have to pay twice. In today’s real world market of “Loan Servicers” who refuse to show legitmate proof of their authority to collect money for the alleged owners of your debt or refuse to tell you who does in fact own it, you must consider the risk you take when you send in that check.

    The “invisible lender/lienholder” made possible by the MERS strawman mortgage you signed and/or the Securitization trust that transformed and mixed in your loan with tens of thousands, atomized the batter, then sold it in millions of pieces as derivatives, has cloaked from view who you really owe. It places you at risk of double exposure and everyone else who might want clear title, new lenders and buyers alike, to your property.

    JEDTI
    G.
    http://www.gregorydclarklaw.com

  • learning2 says:

    I requested notification and proof of ownership of my note and mortgage in 2 (two) QWR (Qualified Written Requests) to my Lender years ago.

    My QWR were initially made to find out how they lost 3 (three) mortgage payments. After I sent proof of my making payments which were made to the assumed Lender and monies were in fact removed from my checking account, the Lender (?) said they would no longer communicate with me about this matter or any other issues brought to their attention in my QWRs. Instead, they told me to hire an attorney, though I told them in the last QWR to no longer communicate with me but to my attorney (I included his name, address and phone number within the letter).

    I am still trying to find out who owns my note and mortgage. After receiving their last reply that they would no longer address/communicate with me about these issues, I stopped making payments.

    About 5 (five) months of not paying they (lender?) filed a Lis Pendis which included the 2nd mortgage as well. I was current on the 2nd and they stopped taking payments due to ‘non monetary default’.

    The Lender (?) filed a copy of a copy of a mortgage which was materially altered after Closing after my Attorney requested the Original Note and Mortgage be filed with the Court. Also, their Prosecutor still has not filed any ‘proof of the transfer’ to next Lender nor to the next Lender who has filed the Lis Pendis.

    It seems that I took proper action that is required by law (which I learned about from this informative article) by making my inquiries and then discontinuing my payments after their refusal to provide me with evidence of ownership of my Mortgage and Note.

    Matt Weidner, I believe, also brought the case below to my attention around this time period:

    FEDERAL RESERVE SYSTEM
    12 CFR Part 226
    Regulation Z; Docket No. R-1378
    Truth in Lending
    AGENCY: Board of Governors of the Federal Reserve System.
    ACTION: Interim final rule; request for public comment.

    I don’t recall the the link, I just have a pdf file of the page created in 11/2009.

    What a battle. Its important and lucky if one has a strong support group and many distractions/interests so one may keep their sanity (though many would argue I really don’t meet the definition of sanity).

    I am content and staying abreast of the facts and events concerning these matters even if they don’t apply directly to my case.

    The other day I met someone from out-of-state who bought a ‘foreclosure’ property. I didn’t find any evidence of a Lis Pendis being filed, no evidence of a Summary Judgement, nor did I find the deed transfer from the original owner to the 1st bank, to the 2nd bank, nor to the 3rd bank (the loan to the original Owner was a MERs loan and a satisfaction was filed on that loan from the 1st lender). I only found evidence of a transfer from the 3rd bank to the out-of-state new owner(?).

    I told the newest owner about my findings…He’s concerned. He’s most concerned about a Affidavit made by the original owner that debts (any and all) were not his or his wife’s but there Social Security Numbers, address and IDs were not presented to the Notary. However, this Affadavit is filed in the Palm Beach County Clerks’ office.

    So I share my knowledge and sources with others who are, or will be, suffering. All is well, NOT!…More to hit the fan sooner than later.

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