Opinion ID: 2626433
Heading Depth: 2
Heading Rank: 6

Heading: fleetwood's counterclaim

Text: {40} The trial court dismissed, without prejudice, Fleetwood's counterclaim to collect on the promissory note signed by Plaintiffs to secure financing for their mobile home. Fleetwood appealed, and the Court of Appeals reinstated the counterclaim, remanding it to the trial court for further proceedings. Chavarria, 2005-NMCA-082, ¶¶ 36-38, 137 N.M. 783, 115 P.3d 799. We uphold the Court of Appeals' decision to reinstate Fleetwood's counterclaim. {41} Plaintiffs argued at the trial level, and continue to argue on appeal, that Fleetwood failed to establish the essential element of its claim that it was the current holder of the promissory note, as required by NMSA 1978, § 55-3-308 (1992). Plaintiffs rely on the Arkansas case of McKay v. Capital Resources Co., 327 Ark. 737, 940 S.W.2d 869, 871 (1997), in which the Arkansas Supreme Court held that a party could not enforce a promissory note when it had failed to produce the original note or explain its absence. We agree with Plaintiffs that a party seeking to enforce a promissory note must generally produce the note or demonstrate a right to enforce it. See § 55-3-308; NMSA 1978, § 55-3-301 (1992). However, in their answer to Fleetwood's counterclaim, Plaintiffs admitted that the note was owned in all respects whatsoever by Fleetwood. Before the start of the trial, the trial court also admitted into evidence a set of original exhibits offered by Plaintiffs. Plaintiffs' set of exhibits contained a copy of the promissory note. The Court of Appeals was correct in concluding that Plaintiffs waived their objection to Fleetwood's failure to produce the original note. See Tassock v. Hogan, 272 Or. 694, 538 P.2d 910, 912 (1975) (holding that a defendant who had admitted that the plaintiff was the owner and holder of a note could not later challenge the plaintiff's failure to produce the note at trial). We affirm the ruling of the Court of Appeals on this issue, and we remand to the trial court for further proceedings on Fleetwood's counterclaim.