Residential Funding Co. v. Saurman
| Decision Date | 16 November 2011 |
| Docket Number | Docket Nos. 143178,143179.COA Nos. 290248,291443 |
| Citation | 805 N.W.2d 183,490 Mich. 909 |
| Court | Michigan Supreme Court |
| Parties | RESIDENTIAL FUNDING CO., L.L.C., f/k/a Residential Funding Corporation, Plaintiff–Appellant, v. Gerald SAURMAN, Defendant–Appellee.Bank of New York Trust Company, Plaintiff–Appellant, v. Corey Messner, Defendant–Appellee. |
RESIDENTIAL FUNDING CO., L.L.C., f/k/a Residential Funding Corporation, Plaintiff–Appellant,
v.
Gerald SAURMAN, Defendant–Appellee.Bank of New York Trust Company, Plaintiff–Appellant,
v.
Corey Messner, Defendant–Appellee.
Docket Nos. 143178
143179.COA Nos. 290248
291443
Supreme Court of Michigan.
Nov. 16, 2011.
On November 10, 2011, the Court heard oral argument on the application for leave to appeal the April 21, 2011 judgment of the Court of Appeals. On order of the Court, the application is again considered and, pursuant to MCR 7.302(H)(1), in lieu of granting leave to appeal, we REVERSE the judgment of the Court of Appeals. As the Court of Appeals dissenting opinion explained, “pursuant to MCL 600.3204( l )(d), Mortgage Electronic Registration System (MERS) is ‘the owner ... of an interest in the indebtedness secured by the mortgage’ at issue in each of these consolidated cases” because “[MERS'] contractual obligations as mortgagee were dependent upon whether the mortgagor met the obligation to pay the indebtedness which the mortgage secured.” Residential Funding v. Saurman, 292 Mich.App. 321, 343–44, 348, –––N.W.2d ––––, ––– – –––, ––– (2011) (Wilder, J., dissenting). We clarify, however, that MERS' status as an “owner of an interest in the indebtedness” does not equate to an ownership interest in the note. Rather, as record-holder of the mortgage, MERS owned a security lien on the properties, the continued existence of which was contingent upon the satisfaction of the indebtedness. This interest in the indebtedness—i.e., the ownership of legal title to a security lien whose existence is wholly contingent on the satisfaction of the indebtedness—authorized MERS to foreclose by advertisement under MCL 600.3204(1)(d).
Furthermore, we add that the Court of Appeals' conclusion to the contrary is inconsistent with established legal principles governing Michigan's real property law, and specifically foreclosure by advertisement. “Under the settled law of this State, the mortgage and the note are to be construed together.” Guardian Depositors Corp. v. Wagner, 287 Mich. 202, 208, 283 N.W. 29 (1939). “The rule is well-settled that ... the mortgagee has a
[805 N.W.2d 184]
[490 Mich. 910] lien on the land to secure the debt.” McKeighan v. Citizens Commercial & Sav. Bank, 302 Mich. 666, 670, 5 N.W.2d 524 (1942). “It has never been necessary that the mortgage should be given directly to the beneficiaries. The security is...
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