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the court concluded that BAC was required to provide evidence demonstrating how BAC obtained the Note, but did
[9] A deed of trust securing a negotiable promissory note “cannot be transferred like a mortgage; rather, the cor-
responding note may be transferred, and carries with it the security provided by the deed of trust.” Anderson, 424
Md. at 246, 35 A.3d at 460 (citing Le Brun v. Prosise, 197 Md. 466, 474, 79 A.2d 543, 548 (1951)). Thus, once the
at 460. We determine that, contrary to the panel of the Court of Special Appeals, BAC is a holder of the Note and
that, therefore, the remaining disputes of fact are not material to the resolution of this case.
The Commercial Law Article provides that the person or entity obligated on a promissory note FN15 must pay the
obligation to, in relevant part, “a person entitled to enforce the instrument.” Md.Code (1975, 2002 Repl.Vol.), Com.
Pursuant to the Commercial Law Article, a promissory note may be enforced by:
(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or
(iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to § 3–309 or §
ty in possession of the promise or order is entitled to payment; (c) does not state a payee; or, (d) otherwise indicates
that it is not payable to an identified person. Id. at § 3–109(a). Thus, the person in possession of a note, either spe-
cially indorsed to that person or indorsed in blank,FN16 is a holder entitled generally to enforce that note.FN17
Brock contends that, regardless of which entity is the holder of the Note, only the owner may enforce the Note
Cir.1999) (noting that a party's status as a holder and its attendant right to enforce an instrument is separate from the
party's status as the owner of that instrument); In re Walker, 466 B.R. 271, 280 (Bankr.E.D.Pa.2012) (“[T]he bor-
rower's obligation is to pay the person entitled to enforce the note (who need not be the ‘owner’ of the note).”); In
The Court of Special Appeals determined that IMPAC, as the last named entity on the allonge, and not BAC,
was the holder of the Note. Apparently because the Note was not indorsed specially to BAC, the intermediate appel-
late court instead characterized BAC as a nonholder in possession, thus permitted to enforce the Note only so long
as it possessed the rights of a holder and required to “account for possession of the unindorsed instrument by prov-
ing the transaction through which [it] acquired it.” (quoting Anderson, 424 Md. at 249, 35 A.3d at 462). Because the
Note and requiring BAC to prove the Note's transfer history, as in Anderson, the intermediate appellate court ig-
nored the last indorsement on the Note, which read:
PAY TO THE ORDER OF:
2002 Repl.Vol.), Com. Law Art., § 3–205(b). Thus, because there is no dispute that BAC is in possession of the
Note, Petitioners argue, BAC is therefore a holder of the Note and entitled to enforce it, free of any requirement to
prove how it came into possession of the Note.
We agree that the Court of Special Appeals's recourse to Anderson in this context is unhelpful. In Anderson, we
must be proved. Id. We stated, “The transferee does not enjoy the statutorily provided assumption of the right to
enforce the instrument that accompanies a negotiated instrument, and so the transferee ‘must account for possession
of the unindorsed instrument by proving the transaction through which the transferee acquired it.’ ” Id. at 249, 35
it. See Md.Code (1975, 2002 Repl.Vol.), Com. Law Art., § 3–301. Thus, whether the Trust is (or is not) the owner of
the Note is irrelevant for present purposes.
Brock maintains that the existence of the Trust is a material fact because the Deed of Appointment of the Sub-
stitute Trustees was executed by BAC as “attorney in fact” on behalf of the Trust. Brock argues that, if the Trust is
JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED; CASE REMANDED TO THAT
COURT WITH INSTRUCTIONS TO AFFIRM THE JUDGMENT OF THE CIRCUIT COURT FOR
MONTGOMERY COUNTY. COSTS IN THIS COURT AND THE COURT OF SPECIAL APPEALS TO
BE PAID BY RESPONDENT.
FN3. An allonge is generally a “slip of paper sometimes attached to a negotiable instrument for the purpose
of receiving further indorsements when the original paper is filled with indorsements.” Anderson, 424 Md.
at 240 n. 10, 35 A.3d at 457 n. 10 (quoting Black's Law Dictionary 88 (9th ed.2004)). Pursuant to Maryland
Code (1975, 2002 Repl.Vol.), Com. Law Art., § 3–204(a), an allonge is considered to be a part of the Note.
FN5. The record does not indicate definitively the chronological trail of the loan—specifically, when or to
whom Amerifund Mortgage sold the loan, or when or what entity securitized the loan into the Trust. Ac-
cording to an affidavit by Lindsay Weiss, a litigation specialist for BAC, the Trust was formed “through the
FN7. Specifically, the Pooling and Servicing agreement provides, in relevant part:
The Master Servicer may perform its responsibilities relating to servicing through other agents or inde-
pendent contractors, but shall not thereby be released from any of its responsibilities as hereinafter set
other conversion of the ownership of the Mortgaged Property securing a related Mortgage Loan, includ-
ing the employment of attorneys, the institution of legal proceedings, the collection of deficiency judg-
ments, the acceptance of compromise proposals, the filing of claims under any Insurance Policy and any
other matter pertaining to the delinquent mortgage loan.
3 December 2009, which is not included in the record. The Deed of Appointment was signed allegedly by
Darlene Buzzard as “Attorney in Fact” on behalf of BAC, acting as “Servicing Agent” for Deutsche Bank.
BAC does not dispute that it appointed the Substitute Trustees.
FN9. Brock contended that because the deed of trust listed Amerifund Mortgage as the lender and stated
FN11. The Substitute Trustees filed a motion to dismiss the amended complaint on 18 November 2010,
contending that, as a matter of law, it failed to state a claim upon which relief could be granted. At the hear-
ing on December 1, the trial judge stated that he was not considering the Substitute Trustees' motion, but
Court judge at the summary judgment hearing.
FN13. The Court of Special Appeals determined that Brock's contention that Deutsche Bank lacked the au-
thority to appoint the Substitute Trustees was not preserved for appellate review because Brock conceded
before the trial court that it was BAC, and not Deutsche Bank, that possessed the Note and appointed the
dispute as to whether a declaratory judgment should be issued to quiet title. These issues are not before this
Court properly, as they were not considered expressly or raised by the parties in the summary judgment
hearing, nor raised in Petitioners' petition for writ of certiorari.
FN15. The person or entity obligated on a promissory note is referred to generally as the “maker” of the
a “special indorsement”. When specially indorsed, an instrument becomes payable to the identified per-
son and may be negotiated only by the indorsement of that person....
(b) If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a
“blank indorsement”. When indorsed in blank, an instrument becomes payable to bearer and may be ne-
IMPAC was a holder of the Note at the time the final indorsement in blank was made.
Md.,2013.
[9] A deed of trust securing a negotiable promissory note “cannot be transferred like a mortgage; rather, the cor-
responding note may be transferred, and carries with it the security provided by the deed of trust.” Anderson, 424
Md. at 246, 35 A.3d at 460 (citing Le Brun v. Prosise, 197 Md. 466, 474, 79 A.2d 543, 548 (1951)). Thus, once the
at 460. We determine that, contrary to the panel of the Court of Special Appeals, BAC is a holder of the Note and
that, therefore, the remaining disputes of fact are not material to the resolution of this case.
The Commercial Law Article provides that the person or entity obligated on a promissory note FN15 must pay the
obligation to, in relevant part, “a person entitled to enforce the instrument.” Md.Code (1975, 2002 Repl.Vol.), Com.
Pursuant to the Commercial Law Article, a promissory note may be enforced by:
(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or
(iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to § 3–309 or §
ty in possession of the promise or order is entitled to payment; (c) does not state a payee; or, (d) otherwise indicates
that it is not payable to an identified person. Id. at § 3–109(a). Thus, the person in possession of a note, either spe-
cially indorsed to that person or indorsed in blank,FN16 is a holder entitled generally to enforce that note.FN17
Brock contends that, regardless of which entity is the holder of the Note, only the owner may enforce the Note
Cir.1999) (noting that a party's status as a holder and its attendant right to enforce an instrument is separate from the
party's status as the owner of that instrument); In re Walker, 466 B.R. 271, 280 (Bankr.E.D.Pa.2012) (“[T]he bor-
rower's obligation is to pay the person entitled to enforce the note (who need not be the ‘owner’ of the note).”); In
The Court of Special Appeals determined that IMPAC, as the last named entity on the allonge, and not BAC,
was the holder of the Note. Apparently because the Note was not indorsed specially to BAC, the intermediate appel-
late court instead characterized BAC as a nonholder in possession, thus permitted to enforce the Note only so long
as it possessed the rights of a holder and required to “account for possession of the unindorsed instrument by prov-
ing the transaction through which [it] acquired it.” (quoting Anderson, 424 Md. at 249, 35 A.3d at 462). Because the
Note and requiring BAC to prove the Note's transfer history, as in Anderson, the intermediate appellate court ig-
nored the last indorsement on the Note, which read:
PAY TO THE ORDER OF:
2002 Repl.Vol.), Com. Law Art., § 3–205(b). Thus, because there is no dispute that BAC is in possession of the
Note, Petitioners argue, BAC is therefore a holder of the Note and entitled to enforce it, free of any requirement to
prove how it came into possession of the Note.
We agree that the Court of Special Appeals's recourse to Anderson in this context is unhelpful. In Anderson, we
must be proved. Id. We stated, “The transferee does not enjoy the statutorily provided assumption of the right to
enforce the instrument that accompanies a negotiated instrument, and so the transferee ‘must account for possession
of the unindorsed instrument by proving the transaction through which the transferee acquired it.’ ” Id. at 249, 35
it. See Md.Code (1975, 2002 Repl.Vol.), Com. Law Art., § 3–301. Thus, whether the Trust is (or is not) the owner of
the Note is irrelevant for present purposes.
Brock maintains that the existence of the Trust is a material fact because the Deed of Appointment of the Sub-
stitute Trustees was executed by BAC as “attorney in fact” on behalf of the Trust. Brock argues that, if the Trust is
JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED; CASE REMANDED TO THAT
COURT WITH INSTRUCTIONS TO AFFIRM THE JUDGMENT OF THE CIRCUIT COURT FOR
MONTGOMERY COUNTY. COSTS IN THIS COURT AND THE COURT OF SPECIAL APPEALS TO
BE PAID BY RESPONDENT.
FN3. An allonge is generally a “slip of paper sometimes attached to a negotiable instrument for the purpose
of receiving further indorsements when the original paper is filled with indorsements.” Anderson, 424 Md.
at 240 n. 10, 35 A.3d at 457 n. 10 (quoting Black's Law Dictionary 88 (9th ed.2004)). Pursuant to Maryland
Code (1975, 2002 Repl.Vol.), Com. Law Art., § 3–204(a), an allonge is considered to be a part of the Note.
FN5. The record does not indicate definitively the chronological trail of the loan—specifically, when or to
whom Amerifund Mortgage sold the loan, or when or what entity securitized the loan into the Trust. Ac-
cording to an affidavit by Lindsay Weiss, a litigation specialist for BAC, the Trust was formed “through the
FN7. Specifically, the Pooling and Servicing agreement provides, in relevant part:
The Master Servicer may perform its responsibilities relating to servicing through other agents or inde-
pendent contractors, but shall not thereby be released from any of its responsibilities as hereinafter set
other conversion of the ownership of the Mortgaged Property securing a related Mortgage Loan, includ-
ing the employment of attorneys, the institution of legal proceedings, the collection of deficiency judg-
ments, the acceptance of compromise proposals, the filing of claims under any Insurance Policy and any
other matter pertaining to the delinquent mortgage loan.
3 December 2009, which is not included in the record. The Deed of Appointment was signed allegedly by
Darlene Buzzard as “Attorney in Fact” on behalf of BAC, acting as “Servicing Agent” for Deutsche Bank.
BAC does not dispute that it appointed the Substitute Trustees.
FN9. Brock contended that because the deed of trust listed Amerifund Mortgage as the lender and stated
FN11. The Substitute Trustees filed a motion to dismiss the amended complaint on 18 November 2010,
contending that, as a matter of law, it failed to state a claim upon which relief could be granted. At the hear-
ing on December 1, the trial judge stated that he was not considering the Substitute Trustees' motion, but
Court judge at the summary judgment hearing.
FN13. The Court of Special Appeals determined that Brock's contention that Deutsche Bank lacked the au-
thority to appoint the Substitute Trustees was not preserved for appellate review because Brock conceded
before the trial court that it was BAC, and not Deutsche Bank, that possessed the Note and appointed the
dispute as to whether a declaratory judgment should be issued to quiet title. These issues are not before this
Court properly, as they were not considered expressly or raised by the parties in the summary judgment
hearing, nor raised in Petitioners' petition for writ of certiorari.
FN15. The person or entity obligated on a promissory note is referred to generally as the “maker” of the
a “special indorsement”. When specially indorsed, an instrument becomes payable to the identified per-
son and may be negotiated only by the indorsement of that person....
(b) If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a
“blank indorsement”. When indorsed in blank, an instrument becomes payable to bearer and may be ne-
IMPAC was a holder of the Note at the time the final indorsement in blank was made.
Md.,2013.
