Case Law Summaries

Sudia v. Poreda

• Opinion Date: December 18, 2001
• Real Property Law
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MORTGAGES; CANCELLATION—Where a mortgagee sits on its rights for 27 years, taking no collection action, and where the mortgagor insists the underlying debt has been paid, the Doctrine of Laches can be applied to adjudicate the rights of each party.

A property was purchased and a purchase-money mortgage was given to an 83 year old seller. The mortgage secured a seven year loan that was due in 1980. The seller then granted a power of made third party his agent-in-fact. The seller-mortgagee returned to Russia, and all payments were required to be made to the attorney-in-fact. When the mortgagor died, the property was devised to his wife. On her death, the property was devised to one of her sons. That son sold the property to his brother. At the time of that conveyance, the mortgage had not been discharged. Twenty years after the maturity date of the mortgage and twenty-seven years after the mortgage had been granted, the then owner commenced an action to cancel the mortgage. The attorney-in-fact opposed that action, alleging that the mortgage had not been paid. The lower court canceled and discharged the mortgage. Family members of the original mortgagor certified that the loan had been paid in full. There were no records, but it appeared that in the twenty-seven years that passed since the execution of the mortgage, neither the mortgagee nor any of his successors in interest, nor his attorney-in-fact demanded any payment or initiated a foreclosure action. The Court did not know whether the mortgagee was alive and consequently did not know whether the power of attorney was still valid. With that in mind, the lower court held that even if the mortgage had not been paid, which the lower court strongly doubted, it would be inequitable to allow the original mortgagee or his successors in interest, if any, to maintain an action on the mortgage lien “given that [he] has sat on [his] rights for nearly 30 years, which [the mortgagee] clearly did… .” Essentially, the lower court invoked the Doctrine of Laches, noting “that courts will consider the period of delay in equitable actions, such as, the cancellation of instruments when adjudicating the parties [sic] respective rights therein.” The Appellate Division agreed.

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