CLYDE SALLIE V FIFTH THIRD BANK (Per Curiam Opinion)
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
CLYDE SALLIE,
FOR PUBLICATION
June 19, 2012
9:15 a.m.
Plaintiff-Appellant,
v
No. 302554
Kent Circuit Court
LC No. 10-003496-CH
FIFTH THIRD BANK,
Defendant-Appellee,
Advance Sheets Version
and
FORECLOSURE MANAGEMENT COMPANY,
Defendant.
Before: DONOFRIO, P.J., and MARKEY and OWENS, JJ.
PER CURIAM.
Plaintiff appeals as of right the circuit court’s order granting summary disposition in
favor of defendant Fifth Third Bank in this mortgage foreclosure dispute. Because defendant
was able to pursue foreclosure as a remedy for plaintiff’s default on the mortgage
notwithstanding its loss of the underlying promissory note, we affirm.
In August 2000, plaintiff and his now-deceased wife borrowed $63,665.32 from Old Kent
Bank and granted the bank a mortgage on their home as security for the loan. In 2001, Old Kent
Bank merged with defendant, and, in 2003, plaintiff’s wife died. Plaintiff defaulted on the loan
in September 2009, and defendant, pursuant to the power-of-sale clause contained in the
mortgage, sought to foreclose on plaintiff’s property by advertisement. Although plaintiff and
his wife had signed a promissory note as part of the mortgage loan transaction, defendant was
unable to locate the note at the time that it commenced foreclosure proceedings. Plaintiff
challenged the foreclosure proceedings on the basis that defendant was unable to foreclose on the
mortgage without producing the note. 1 The trial court granted summary disposition for
1
Plaintiff initially denied borrowing $63,665.32 and executing the mortgage, claiming that his
signature had been forged. Thereafter, he abandoned that argument and focused on defendant’s
inability to produce the note.
-1-
defendant, determining that regardless of the note, upon plaintiff’s default defendant was able to
pursue the remedies available under the mortgage, which included foreclosure.
Plaintiff argues that defendant was not entitled to foreclose on the mortgage without
showing that it acquired and had possession of the promissory note, in addition to the mortgage,
after Fifth Third merged with Old Kent Bank. The trial court’s decision granting summary
disposition for defendant on this issue was premised on MCR 2.116(C)(10). We review de novo
a trial court’s decision on a motion for summary disposition. Latham v Barton Malow Co, 480
Mich 105, 111; 746 NW2d 868 (2008). In reviewing a motion for summary disposition under
subrule (C)(10), we consider “the pleadings, admissions, and other evidence submitted by the
parties in the light most favorable to the nonmoving party.” Id. “Summary disposition is
appropriate if there is no genuine issue regarding any material fact and the moving party is
entitled to judgment as a matter of law.” Id. We also review de novo issues involving the
interpretation of statutes. Ford Motor Co v Dep’t of Treasury, 288 Mich App 491, 494; 794
NW2d 357 (2010).
A mortgagee may foreclose on a mortgage without producing the note secured by the
mortgage. Snyder v Hemmingway, 47 Mich 549, 553; 11 NW 381 (1882). In order to do so,
however, the mortgagee must produce a valid mortgage and power of sale. Id. “[I]t is only
under the power of sale that any steps can be taken.” Id. The mortgagee must also give “clear
proof” of the debtor’s default and continuing debt obligation to the mortgagee. Hungerford v
Smith, 34 Mich 300, 301 (1876); see also George v Ludlow, 66 Mich 176, 179; 33 NW 169
(1887); Young v McKee, 13 Mich 552, 556 (1865). This century-old case law is consistent with
our current statutory law, which provides that “[e]very mortgage of real estate, which contains a
power of sale, upon default being made in any condition of such mortgage, may be foreclosed by
advertisement, in the cases and in the manner specified in this chapter.” MCL 600.3201.
Pursuant to MCL 600.3204(1),
a party may foreclose a mortgage by advertisement if all of the following
circumstances exist:
(a) A default in a condition of the mortgage has occurred, by which the
power to sell became operative.
(b) An action or proceeding has not been instituted, at law, to recover the
debt secured by the mortgage or any part of the mortgage; or, if an action or
proceeding has been instituted, the action or proceeding has been discontinued; or
an execution on a judgment rendered in an action or proceeding has been returned
unsatisfied, in whole or in part.
(c) The mortgage containing the power of sale has been properly recorded.
(d) The party foreclosing the mortgage is either the owner of the
indebtedness or of an interest in the indebtedness secured by the mortgage or the
servicing agent of the mortgage.
-2-
Notably, the statute does not require that the mortgagee produce the underlying note in order to
foreclose a mortgage by advertisement.
In the case at bar, defendant met all the requirements to foreclose by advertisement.
Defendant produced a valid, recorded mortgage that contained a power-of-sale clause. The
mortgage explicitly stated: “Warning. This Mortgage contains a power of sale, and, upon
default, may be foreclosed by advertisement.” In addition, a “default in a condition of the
mortgage” occurred, and defendant established plaintiff’s underlying debt and default with “clear
proof.” See MCL 600.3204(1)(a); Hungerford, 34 Mich at 301. Defendant produced
documentary evidence and presented testimony establishing plaintiff’s payment history, his
default, and the amount outstanding on the debt. In fact, plaintiff admitted that he had stopped
making payments on the debt.
Defendant also established that it owned plaintiff’s debt. Defendant provided unrefuted
testimony that the lost note was never transferred, assigned, or sold. By establishing its
continuing ownership of plaintiff’s debt, defendant eliminated the risk that plaintiff would face
multiple collections on the same debt. See George, 66 Mich at 179. Moreover, defendant did
not institute an action to recover the debt secured by the note as described in MCL
600.3204(1)(b). Accordingly, defendant is entitled to foreclose on the mortgage notwithstanding
the loss of the note, and the trial court properly granted summary disposition for defendant. 2
Affirmed.
/s/ Pat M. Donofrio
/s/ Jane E. Markey
/s/ Donald S. Owens
2
The parties’ reliance on MCL 440.3309 is misplaced because that provision pertains to the
enforcement of an instrument that was lost. Because defendant is proceeding on the mortgage
rather than the note, MCL 440.3309 is inapplicable.
-3-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.