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Kluge v. Fugazy, 145 AD 2d 537 – NY: Appellate Div., 2nd Dept. 1988

Kluge v. Fugazy, 145 AD 2d 537 – NY: Appellate Div., 2nd Dept. 1988


This is a case you may not recognize but NY is very lucky to have.

Thank you for paving the way.

.

145 A.D.2d 537 (1988)

John W. Kluge, Respondent,
v.
William D. Fugazy et al., Appellants, et al., Defendants

Appellate Division of the Supreme Court of the State of New York, Second Department.
December 19, 1988

Mangano, J. P., Thompson, Brown and Kunzeman, JJ., concur.

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 538*538 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.

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