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Kluge v. Fugazy

Appellate Division of the Supreme Court of New York, Second Department
Dec 19, 1988
145 A.D.2d 537 (N.Y. App. Div. 1988)

Summary

holding that plaintiff, the assignee of a mortgage without the underlying note, could not bring a foreclosure action

Summary of this case from In re Escobar

Opinion

December 19, 1988

Appeal from the Supreme Court, Dutchess County (Jiudice, J.).


Ordered that the order is reversed, on the law, with costs, and the motion is granted.

As the result of a series of financial transactions, the plaintiff received an assignment of a mortgage as collateral security for a promise of indemnification. The underlying note was not assigned and was expressly excluded from transfer.

The plaintiff's first and second causes of action for foreclosure and a deficiency judgment, respectively, must fail since foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity (Merritt v Bartholick, 36 N.Y. 44, 45; Flyer v Sullivan, 284 App. Div. 697, 698; Beak v Walts, 266 App. Div. 900; Manne v Carlson, 49 App. Div. 276, 278). Moreover, we find that the written agreement and assignment between the parties were clear and unambiguous. They indicate that no delivery of the underlying obligation was intended, and they were entered into by sophisticated, counseled businessmen (see, Chimart Assocs. v Paul, 66 N.Y.2d 570, 573; Nau v Vulcan Rail Constr. Co., 286 N.Y. 188, 198-199, rearg denied 287 N.Y. 630). As a result, the plaintiff's third cause of action, for specific performance, must fail. Mangano, J.P., Thompson, Brown and Kunzeman, JJ., concur.


Summaries of

Kluge v. Fugazy

Appellate Division of the Supreme Court of New York, Second Department
Dec 19, 1988
145 A.D.2d 537 (N.Y. App. Div. 1988)

holding that plaintiff, the assignee of a mortgage without the underlying note, could not bring a foreclosure action

Summary of this case from In re Escobar

holding that the assignment of a mortgage without transfer of the debt is a nullity

Summary of this case from LPP Mtge. Ltd. v. Sabine Props., LLC

finding that “ ‘foreclosure of a mortgage may not be brought by one who has no title to it’ ”

Summary of this case from Savings v. Thompson

finding that “ ‘foreclosure of a mortgage may not be brought by one who has no title to it’ ”

Summary of this case from Eastern Savings, FSB v. Thompson

applying New York law

Summary of this case from 5-Star Management, Inc. v. Rogers

In Kluge v. Fugazy, 145 A.D.2d 537, 538, 536 N.Y.S.2d 92, 93 (2nd Dept. 1988), the plaintiff attempted to foreclose upon a note where it held title to the mortgage, but not the underlying note.

Summary of this case from LNV Corp. v. Madison Real Estate

In Kluge v Fugazy (145 AD2d 537 [2d Dept 1988]) the Court held that the assignment of a mortgage without transfer of the debt is a nullity and a cause of action for foreclosure must fail.

Summary of this case from HSBC Bank USA, National Ass'n v. Miller

In Kluge the court found that, "[a] foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity."

Summary of this case from U.S. Bank National Association v. Daniels
Case details for

Kluge v. Fugazy

Case Details

Full title:JOHN W. KLUGE, Respondent, v. WILLIAM D. FUGAZY et al., Appellants, et…

Court:Appellate Division of the Supreme Court of New York, Second Department

Date published: Dec 19, 1988

Citations

145 A.D.2d 537 (N.Y. App. Div. 1988)

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