Jones v. Approved Bancredit Corp.

Facts

Jones owned land in Delaware and contracted with Albee Dell Homes, Inc. (“Dell”), a sales agency for pre-cut homes, to build a house on her land. Despite Jones mentioning several times that she would like to have a lawyer review any documents before signing, a Dell representative managed to persuade Jones to sign a mortgage loan for $3,250, convincing her that having a lawyer review the forms would be unnecessary and would cause delays in construction of the home. Immediately after Jones signed the mortgage note and other documents, the note was endorsed and assigned by Dell to Bancredit. Bancredit paid Dell $2,250 for the $3,250 note. After a major incident at the property, the builder abandoned the project and Jones reached out to Dell and Bancredit to inform that had already been built needed to be demolished and the unfinished basement needed to be filled. Jones received no reply and so followed through with the demolition at her own expense. Thereafter, Bancredit commenced a lawsuit against Jones, seeking foreclosure of the mortgage and to recover the unpaid balance of $2,560.23 on the mortgage note. In pretrial discovery, it was revealed that Bancredit and Dell had the same parent company and that potential sales by Dell were approved by Bancredit in advance. The trial court issued a directed verdict in favor of Bancredit, finding that it was a holder in due course of the mortgage note and that Jones’s defenses were unavailable.