Fla 4th DCA: Original Note Must Be Sequestered with Court

Oct 20, 2010

From Katherine

Editor’s Note: I almost passed on this. Then I started thinking. If the original note must be sequestered with the Court to prevent further negotiation of the note, it locks in the other side pretty early. If you can convince the court that tendering the original note to the court is a condition precedent to getting judgment, then they must come up with it immediately. It also underscores the issue of the burden of proof in a “lost note” situation, which is to prove the entire path that the note took, how it came to be lost, and what assurance you can give to the court that it is not in the hands of someone who could negotiate it.

Once they offer the “original” it can be examined for authenticity. And in discovery you can find out if there are other “originals” that were used in other transactions with insurers, counterparties in credit default swaps, federal bailout, etc.

See: JAMES F. JOHNSTON and SANDRA JOHNSTON, Appellants, v. JEANNE HUDLETT, Appellee. No. 4D08-4636 [March 31, 2010]

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA,

FOURTH DISTRICT, January Term 2010

“Moreover, in the case of original mortgages and Promissory notes, they are not merely exhibits but instruments which must be surrendered prior to the issuance of a judgment. The judgment takes the place of the Promissory note. Surrendering the note is essential so that it cannot thereafter be negotiated.

See Perry v. Fairbanks Capital Corp., 888 So. 2d 725, 726 (Fla. 5th DCA 2004).

The judgment cancels the note.”