PNC Mortg. v. Khalsa, 35,255

In 2006 Khalsa executed a promissory note for $304,500 to National City Mortgage (NCM), secured by a mortgage on his home; he defaulted after 2010.
PNC Mortgage (successor by a series of mergers to National City entities) filed a foreclosure complaint in December 2010 attaching an unindorsed copy of the Note and alleging it was holder in due course.
In 2013 PNC produced the original Note at trial bearing two undated indorsements (one to National City Mortgage Co., and one in blank) that had not been attached to the original complaint.
PNC relied on (1) possession of the indorsed-in-blank Note and (2) status as successor by merger to establish standing; its witness testified about mergers and typical business practice but lacked personal knowledge of the timing of indorsements or continuous possession.
Khalsa contested standing, pointing to prior statements that another bank held the Note and to lack of documentary proof of PNC’s possession at the time suit was filed.
The district court found for PNC; the Court of Appeals reviewed whether PNC proved standing as of the filing date and reversed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether PNC was the holder of the Note at the time the foreclosure suit was filed based on possession of the Note indorsed in blank	PNC: possession of the Note indorsed in blank (produced at trial) made it the holder able to enforce the Note	Khalsa: indorsements were undated and were produced after filing; no proof PNC had possession when suit was filed	Court: Rejected — PNC failed to prove date of indorsements or possession at filing; production after filing insufficient to establish standing
Whether PNC’s status as successor by merger conferred standing to enforce the Note at time of filing	PNC: statutory effect of mergers (12 U.S.C. §215a(e)) vested predecessor’s rights in PNC, so merger proof establishes standing	Khalsa: merger proof alone cannot show holder status without evidence of negotiation/transfer or possession at filing	Court: Rejected — merger documentation without proof of possession or a proper indorsement/transfer at filing was insufficient to establish standing

Deutsche Bank Nat’l Tr. Co. v. Johnston, 369 P.3d 1046 (N.M. 2016) (substantial-evidence standard; proof of standing must show holder status at time suit filed)
Bank of N.Y. v. Romero, 320 P.3d 1 (N.M. 2014) (foreclosing party must demonstrate standing under UCC at time suit was filed)
PNC Mortgage v. Romero, 377 P.3d 461 (N.M. Ct. App. 2016) (successor must provide evidence of indorsement/negotiation or possession at filing; merger proof alone is insufficient)