Wells Fargo Bank, N.A. v. Perry
23 Misc. 3d 827 · New York Supreme Court · 2009
Facts
Plaintiff sought a default judgment to declare ownership of a $396,000 mortgage on 154 Oak Street, acquired via allonge indorsement, and to have it recorded nunc pro tunc as of May 8, 2006, because the original was lost and never recorded. Defendants defaulted in appearing or answering the complaint.
Issue
Can a plaintiff obtain a default judgment declaring ownership of a mortgage transferred by allonge indorsement, and can the court order the mortgage to be recorded nunc pro tunc to its execution date, thereby accelerating its priority?
Holding
Yes, the court granted a default judgment declaring the plaintiff the valid holder of the mortgage and its lien superior to defendants' claims. No, the court denied the request to record the mortgage nunc pro tunc, finding it would violate recording acts and prejudice unjoined bona fide purchasers.
Rule
An allonge indorsement of a negotiable mortgage note effectively transfers the mortgage as an incident thereof. However, courts will not order nunc pro tunc recording of a lost mortgage if it would circumvent recording statutes and adversely affect the priority rights of bona fide purchasers or encumbrancers who recorded their interests first.
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