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Real Property – Mortgages – Promissory Note ‘Holder’ – Blank Indorsement – Property Address – Scrivener’s Error

Real Property – Mortgages – Promissory Note ‘Holder’ – Blank Indorsement – Property Address – Scrivener’s Error

In re Foreclosure of Reed (Lawyers Weekly No. 14-16-0362, 10 pp.) (Rick Elmore, J.) Appealed from Catawba County Superior Court (Timothy Kincaid, J.) N.C. App. Unpub.

Holding: Even though the copy of respondents’ promissory note that the bank attached to its affidavit in support of foreclosure did not have an indorsement, but the original promissory note that the bank presented to the trial court bore a blank indorsement, there was no “conflicting evidence” as argued by respondents. The bank was the original lender, and it had discretion to determine whether and when to indorse the note; the fact that the copy did not bear a blank indorsement is inconsequential.

We affirm the trial court’s order authorizing foreclosure.

Respondents also contend that “there was no evidence presented that the indorsement was authorized.” As such, they argue that the blank indorsement on the note subjects them to threats of multiple judgments.

The bank was not charged with showing that the indorsement was “authorized.” Again, the bank was the original lender and thus could “authorize” an indorsement at its will. Respondents do not allege that the note was transferred to a third party, and there is no evidence to suggest that a subsequent transfer occurred. Accordingly, respondents’ argument as to the threat of multiple judgments is without merit.

The original note was presented to the trial court for inspection. The note was drawn to the order of the bank and contained an indorsement in blank by the bank. Respondents concede that the original note was indorsed in blank. Further, given that the bank appeared at the hearing and was the original lender, an inference can be made that it was the bank that possessed the original note, making it the “bearer.” Thus, the bank satisfied the definition of note “holder.” G.S. § 25-1-201(b)(21)(a).

In the deed of trust, the subject property’s street address is written as “6965 Navahjo Trail” instead of “6965 Navajo Trail.” We cannot allow a scrivener’s error of this kind to halt the foreclosure action. When viewed together, the correct tax parcel number and legal description contained in the second home rider sufficiently identify the property encumbered by the deed of trust as 6965 Navajo Trail.



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