Community Bank v. Far East Capital

Full title: Community Bank Delaware v. Far East Capital, Inc

Court: Superior Court of Delaware, Sussex County

Date published: Jul 6, 2011

C.A. No. S11L-03-022 RFS (Del. Super. Ct. Jul. 6, 2011)

Opinion

C.A. No. S11L-03-022 RFS.

Submitted: May 18, 2011.

Decided: July 6, 2011.

Plaintiff's Motion for Summary Judgment. Denied.

Defendant's Motion to Dismiss. Granted without Prejudice.

David R. Hackett, Esquire, Griffin Hackett, P.A., Georgetown, DE.

Dean A. Campbell, Esquire, Law Office of Dean A. Campbell, LLC, Georgetown, DE.

RICHARD F. STOKES, Judge.

Dear Counsel:

Plaintiff Community Bank Delaware has filed a motion for summary judgment seeking to foreclose on two recorded commercial mortgages and a recorded commercial line of credit mortgage. Defendant Far East Capital, Inc. has filed a motion for summary judgment or, in the alternative, a motion to dismiss because the Defendant's corporate seal is not affixed to any of the instruments. The record shows that this assertion is accurate, rendering each contract an equitable mortgage, over which the Court of Chancery has exclusive jurisdiction.¹

1 Handler Construction, Inc. v. Corestates Bank, N.A., 633 A.2d 356, 363 (Del. 1993).

Although the absence of the corporate seal on a commercial mortgage is a technical defect that precludes enforcement at law, this technicality does not render the mortgages invalid or unenforceable in the Court of Chancery.² The sine qua non of a mortgage is not form, but the parties' intention to secure a debt by a pledge of real property. The form of a mortgage is determinative only of the court in which the mortgage may be enforced.³

2 Id.

3 Id.

Pursuant to 10 Del. C. § 1902, the Complaint is dismissed without prejudice for lack of subject matter jurisdiction. Plaintiff may file an election to transfer in the Court of Chancery within 60 days of this Order becoming final.

Defendant's motion to dismiss is GRANTED without prejudice.

IT IS SO ORDERED.