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Maine: Enforcing Lost, Destroyed, or Stolen Promissory Notes

Posted By USFN, Tuesday, May 6, 2014
Updated: Monday, October 12, 2015

May 6, 2014


by Paula R. Watson & Joshua Saucier
Bendett & McHugh, P.C. – USFN Member (Connecticut, Maine, Vermont)

To enforce a promissory note, a creditor will ideally be in possession of the original instrument. That is, either the note endorsed to the order of the creditor or endorsed in blank. The Uniform Commercial Code (UCC), however, allows a “person” not in possession of a promissory note to enforce that note if certain conditions are met. UCC § 3-309 (2002).

Maine enacted a similar statute, but has not adopted the most recent revision of UCC § 3-309. Under 11 M.R.S.A. § 3-1309, subsection (1), a person who is not in possession of a promissory note may enforce that note if: (a) The person was in possession of the instrument and entitled to enforce it when loss of possession occurred; (b) The loss of possession was not the result of a transfer by the person or a lawful seizure; and (c) The person [cannot] reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts [cannot] be determined or it is in the wrongful possession of an unknown person or a person that [cannot] be found or is not amenable to service of process. It is the creditor’s burden to prove that it meets the requirements of § 3-1309, subsection (1). See 11 M.R.S.A. § 3-1309, subsection (2).

Because Maine has not adopted the most recent UCC revisions, the right to enforce the lost promissory note should not be conveyed by the entity that lost the note. Under M.R.S.A. § 3-1309, only the person who was in possession of the note at the time that it was lost is entitled to enforce that note. Maine currently has no case law on the issue.

A person trying to enforce a lost note must also prove the terms of the promissory note and the person’s right to enforce the note. See R.C. Moore v. Les-Care Kitchens, No. CV-04-390, 2006 Me. Super. LEXIS 104, at *10 n.4 (May 5, 2006) (holding that Wachovia Bank, N.A. could enforce a line of credit, despite losing the promissory note underlying that line of credit, because it complied with § 3-1309). A court may not enter judgment against the borrower unless it finds that the borrower is adequately protected against a later claim on the same note by another party. 11 M.R.S.A. § 3-1309(2).

To enforce a lost promissory note, a creditor must demonstrate by affidavit or testimony that it meets the requirements of § 3-1309. For example, during a foreclosure action a creditor may file a summary judgment motion and include, in partial support thereof, a “lost note affidavit.” See M.R. Civ. P. 56(e).

Lost note affidavits should either be based upon personal knowledge of the missing promissory note and the circumstances surrounding that loss or be based upon a review of the mortgagee’s business records. See M.R. Civ. P. 56(e); M.R. Evid. 803(6); see also Beneficial Maine Inc. v. Carter, 2011 ME 77, ¶¶ 3, 7, 28 A.3d 1260. If a lost note affidavit is based upon a review of business records, then all records relied upon should be attached to the affidavit and the elements of the business records exception to hearsay should be sworn to for those records. See Minary, 2012 Me. Super. LEXIS 105, at *4; see also People’s United Bank v. Bermac Props., No. CV-13-0245, 2014 Me. Super. LEXIS 44, at **3-4 (Feb. 28, 2014). Likewise, a copy of the lost note should be attached to the affidavit. See R.C. Moore, 2006 Me. Super. LEXIS 104, at *10 n.4. By strict compliance with 11 M.R.S.A. § 3-1309 as well as the Maine Rules of Evidence, a creditor may preserve the value of an otherwise lost promissory note.

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