BARCLAYS INVESTMENTS, INC. as successor of Consolidated Realty Corp v. ST CROIX ESTATES v. BRUCE J. WROBEL

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-2111
BARCLAYS INVESTMENTS, INC.
as successor of Consolidated Realty Corp.
v.
ST CROIX ESTATES
v.
BRUCE J. WROBEL,
Intervenor
(D.C. 90-cv-00099)
BRUCE J. WROBEL
v.
FLORIDA RAFFLES, INC.,
F.D.R. HOLDINGS, INC., GEORGE W. HEATON,
RICHARD F. MAZUR, ST. CROIX ESTATES, INC.,
BARCLAYS INVESTMENTS, INC., as successor of
Consolidated Realty Corp.
(D.C. 91-cv-00100)
Barclays Investments, Inc.,
Appellant
On Appeal from the District Court
of the Virgin Islands
(D.C. Civ. Nos. 90-0099 and 91-0100)
District Judge: Honorable Raymond L. Finch, Chief Judge

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2
Argued December 16, 2004
Before: SLOVITER, FUENTES, and GREENBERG, Circuit Judges.
(Filed March 1, 2005)
Edward L. Barry (argued)
Donovan M. Hamm, Jr.
Hamm & Barry
5030 Anchor Way, Gallows Bay
Christiansted, St. Croix
US Virgin Islands 00820
Attorneys for Appellant
Warren B. Cole (argued)
Hunter, Colianni, Cole & Bennett
1138 King Street, Suite 301
Christiansted, St. Croix
US Virgin Islands 00820
Attorneys for Appellee
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This dispute concerns whether a mortgage on a property
located on St. Croix in the Virgin Islands secures a note made after
the mortgage was satisfied. While this appeal’s factual and
procedural background is quite intricate, its central legal issue is
straightforward: Did the district court properly classify the mortgage
as a future advance mortgage? We hold that the record cannot
support the district court’s legal classification and therefore we will
reverse.
I. FACTUAL AND PROCEDURAL BACKGROUND

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1Because Barclays Investments, Inc., the appellant, did not
succeed Consolidated Realty Corp. as a party until March 19, 2004, and
the events we describe relate to Consolidated rather than Barclays, for
clarity we will refer to the Barclays Investments action as the
Consolidated Realty action.
2The district court consolidated the two cases by an order dated
November 4, 1999, stating that “2. The above referenced cases are
consolidated and henceforth the caption shall be as above. 3. This
matter is set for ‘trial’ on . . . .” App. at 376-77. In appellee Bruce J.
Wrobel’s brief he indicates that the November 4, 1999 order
“consolidated [the cases] for trial.” Appellee’s br. at 6. This statement
is not quite complete. In fact, the order is entitled “Order of
consolidation and for trial” and provides that the cases “are
consolidated” without limitation of purpose.
3The parties sought additional forms of relief, but we recite only
the pertinent relief sought.
3
This appeal results from the adjudication of two consolidated
cases, Barclays Investments, Inc. v. St. Croix Estates, Inc., Civ. No.
90-0099 (D.V.I.) (the “Consolidated Realty” action),1 and Wrobel v.
Florida Raffles, Inc, Civ. No. 91-0100 (D.V.I.) (the “Wrobel” action).2
In Consolidated Realty, Consolidated Realty Corp. (“Consolidated”),
predecessor to Barclays Investments, Inc. (“Barclays”), sought a
declaration that a deed in which it was the grantor of certain real
property in St. Croix was void ab initio and also sought an order
directing the recorder of deeds to strike the deed from the public
records. In Wrobel, Bruce J. Wrobel sought payment on a promissory
note and foreclosure of a mortgage on the real property involved in
Consolidated Realty. In addition, Wrobel intervened in Consolidated
Realty, asserting his claim against the property.3 Wrobel was
interested in Consolidated Realty because his mortgage was derived
from the title that Consolidated sought to invalidate in that case.
The real property at the center of this appeal is a luxury
residence in St. Croix commonly known as “The Dome.”
Consolidated held title to The Dome but exchanged it for an interest
in commercial property in Florida, transferring The Dome to St. Croix
Estates, Inc., a Delaware corporation that George Heaton controlled,
by a deed dated July 7, 1989. Consolidated later claimed that Heaton
fraudulently induced it to enter into this transaction.

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4Heaton’s attorney did not identify whether he was representing
Heaton or St. Croix Estates, or both, in his letter. But in an agreement
among St. Croix Estates, Consolidated and Heaton, individually, on
March 20, 1995, that we describe below, the parties indicated that St.
Croix Estates and Heaton requested the assignment. App. at 198. Thus,
we regard the attorney as having acted for both St. Croix Estates and
Heaton.
5The attorney’s letter requesting the assignment reads, in relevant
part: “As you know, my client now has the right to obtain a satisfaction
of the captioned mortgage. My client has requested, however, that the
mortgage be assigned, instead, to Cramer Properties, Inc., a Texas
corporation. To that end, I have prepared an assignment of mortgage
which is enclosed, and an allonge to the note, which as you can see, is
without recourse. Please have your clients execute these two documents
and return same to me as soon as possible. In the event you have already
forwarded to me the satisfaction, I shall hold and return same to you
when I have received the assignment. Also, please forward to me the
original mortgage and the original note.” App. at 174.
4
St. Croix Estates mortgaged The Dome on September 5, 1989,
to secure a loan of $500,000 from James Bouwman and Richard
Mazur (“Bouwman and Mazur” or “B&M”) to two other Heaton
corporations, F.D.R. Steaks, Inc. and Maan, Inc. A promissory note
between F.D.R. Steaks and Maan, as obligors, and Bouwman and
Mazur, as obligees, accompanied this mortgage. St. Croix Estates,
F.D.R. Steaks and Maan were the only mortgagors in the mortgage
deed, and F.D.R. Steaks, and Maan, were the only obligors in the
note. Though Heaton signed both instruments he did so only as
president of the three corporations and not individually.
On October 5, 1989, following payment of the note, Bouwman
and Mazur executed a satisfaction of the mortgage in favor of St.
Croix Estates, F.D.R. Steaks and Maan, but this satisfaction has not
been recorded. Instead, Heaton’s attorney4 on October 17, 1989,
wrote Bouwman and Mazurs’ attorney asking that the mortgage be
assigned to Cramer Properties, Inc., a Texas corporation.5 Bouwman
and Mazur complied with this request as they assigned the mortgage
to Cramer Properties, without recourse as to liability, on or about
October 18, 1989. Nevertheless, on or about November 1, 1989,
Bouwman and Mazur executed a second satisfaction of the St. Croix
Estates mortgage which was recorded on April 19, 1990. The district
court, however, held that this second satisfaction was void. After the

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6Monacelli used the Cramer assignment to secure a short term
loan, known as the Washington loan, before he used the assignment to
obtain funding for Florida Raffles. The Cramer assignment itself states
that the assignment was given to secure payment of a promissory note
made by another Heaton company, F.D.R. Washington, Inc.
5
assignment to it, Cramer Properties executed its own no recourse
assignment of the St. Croix Estates mortgage in blank.
Subsequently, Heaton retained Raymond Monacelli, a loan
broker, to obtain financing for yet another of his companies, Florida
Raffles, Inc.6 Monacelli then obtained possession of both the B&M
and Cramer assignments of the St. Croix Estates mortgage. Wrobel
agreed to make a loan to Florida Raffles and that company executed a
60-day promissory note in his favor on or about February 6, 1990, for
the principal sum of $212,000.00 evidencing the loan. F.D.R.
Holdings, Inc., yet another Heaton company, endorsed the note which
Heaton personally guaranteed on a separate document. On February
8, 1990, Monacelli wrote a letter to Wrobel explaining that he was:
in possession of an Assignment of that certain
mortgage in the original principal amount of
$500,000.00 made by St. Croix Estates, Inc., A
Delaware corporation, F.D.R. Steaks, Inc., A Florida
corporation, and Maan, Inc., a Michigan corporation,
mortgagor, in favor of James P. Bouwman and Richard
F. Mazur, mortgagee . . . . I have been authorized to
retain said Assignment, and will do so, until such time
as that certain note made by Florida Raffles, Inc., in
your favor in the amount of $212,000.00 has been paid
in full and satisfied.
App. at 187. The letter did not say that Wrobel’s note would be
secured by a lien on the property represented by the mortgage and did
not even state what would happen to the mortgage and the assignment
if Florida Raffles defaulted on the loan. In fact, the letter did not
indicate that Monacelli had the mortgage.
Florida Raffles, F.D.R. Holdings, and Heaton all defaulted on
the Wrobel loan. Following the default, Monacelli delivered the
B&M and Cramer assignments to Wrobel and the blank Cramer
assignment was completed to reflect its assignment to Wrobel.
Thereafter it was recorded on August 15, 1990. Neither of the parties

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7The Florida action concerned effects from the alleged fraud
resulting in the property transaction from Consolidated to St. Croix
Estates.
6
on this appeal suggests that Monacelli acted improperly in delivering
the assignments to Wrobel.
While Wrobel was confronted with a default on his note,
Consolidated pursued its own grievances against Heaton and his
companies. Consolidated sued St. Croix Estates on May 11, 1990,
and eventually others, seeking to rescind the real property transaction
conveying The Dome from Consolidated to St. Croix Estates, alleging
that Heaton by fraudulent representations induced Consolidated to
make the conveyance. This complaint marked the beginning of the
Consolidated Realty action. As we have indicated, Wrobel later
intervened in this action, asserting a claim against The Dome resulting
from the default on his loan and the security he believed that the St.
Croix Estates mortgage provided him. Wrobel sued Florida Raffles
and other defendants on April 18, 1991, seeking payment on his loan
and also seeking foreclosure on The Dome, arguing that his rights to
that real property were superior to those of Consolidated. This
complaint marked the start of the Wrobel action. In Wrobel, the
district court, on October 9, 1992, granted partial summary judgment
in Wrobel’s favor for $212,000 plus interest against Florida Raffles,
F.D.R. Holdings and Heaton but not against St. Croix Estates. App. at
185-86. That judgment reserved for later proceedings a determination
of the priority of the claims of Wrobel, St. Croix Estates and
Consolidated Realty to the Dome.
The disputes partially were resolved when Consolidated
entered into an agreement with St. Croix Estates and other parties that
we need not list on or about March 20, 1995. Through the agreement
the parties recognized a $6,779,588.79 judgment Consolidated had
obtained against Heaton in the United States District Court for the
Middle District of Florida,7 agreed to void the deed for The Dome
from Consolidated to St. Croix Estates, and also agreed that “the
‘Heaton Group’ hereby transfers, quit claims and conveys to
Consolidated Realty Corp. any and all right, title and interest they may
have in and to [The Dome] in fee simple forever.” App. at 199.
At this point, Wrobel held a judgment for the amount of the
promissory note which he sought to satisfy via foreclosure of the St.
Croix Estates mortgage of The Dome, even though the monetary

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8Consolidated thought that its appeal was premature because it
believed that the district court’s October 7, 2002 order was not a final
judgment pursuant to 28 U.S.C. § 1291.
7
judgment was not against St. Croix Estates, and Consolidated held a
judgment against Heaton and an interest in The Dome that it obtained
via its agreement with St. Croix Estates. The parties turned to the
district court to define and prioritize their interests in The Dome. On
September 27, 2002, following a bench trial on a paper record, the
district court issued a memorandum opinion in the consolidated action
and on October 7, 2002, the district court issued a judgment of
foreclosure in favor of Wrobel against St. Croix Estates and
Consolidated.
In its memorandum opinion the district court concluded that
Wrobel held a valid and enforceable future advance mortgage on The
Dome and that he thus held a title superior to Consolidated’s in the
property. Consolidated filed an appeal of the October 7, 2002 order to
this court on October 22, 2002, but later filed a motion on notice to
Wrobel’s attorney seeking an order dismissing the appeal on the basis
that it was premature.8 Consolidated extensively briefed its motion.
Wrobel did not oppose the motion or suggest, at least in a document
on record in this court, that the appeal was not premature and the clerk
of this court dismissed the appeal on May 7, 2003. In view of
Wrobel’s failure to object to the motion for dismissal the clerk acted
without referring the motion to a panel of this court.
On May 19, 2003, Consolidated filed a motion in the district
court for entry of certain orders. Consolidated asked the district court
to enter orders for the purposes of entering a final judgment in
Consolidated Realty rescinding the conveyance of The Dome from
Consolidated to St. Croix Estates and to substitute Barclays, as
successor to Consolidated, as a party in its place. Wrobel opposed
Consolidated’s motion, arguing that the district court’s October 7,
2002 order and accompanying September 27, 2002 opinion “resolved
all issues in both of the underlying civil actions and was a final order
in both cases.” App. at 401.
In response to Consolidated’s motion, on March 19, 2004, the
district court substituted Barclays for Consolidated, declared the
conveyance from Consolidated to St. Croix Estates voidable, but
concluded that Wrobel’s mortgage on The Dome is enforceable and
superior to Consolidated’s interest. Barclays, as successor to

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9The district court had jurisdiction under 48 U.S.C. § 1612(a) and
(b) and, if the appeal is timely, we have jurisdiction under 28 U.S.C. §
1291 and 48 U.S.C. § 1613.
10We are disturbed by the circumstance that when Consolidated
moved in this court to dismiss its original appeal as premature and gave
notice of the motion to Wrobel’s attorney, he did not oppose the
dismissal or at least state in a document filed with this court that the
appeal was not premature. We think that if the attorney did not believe
that the first appeal was premature he should have said so when
Consolidated moved in this court to dismiss it. Instead, it appears that
he allowed Consolidated to fall into a trap which he is attempting to
spring by contending that the appeal is late. See Brunswick Hills
Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 864 A.2d 387,
398-400 (N.J. 2005).
8
Consolidated, filed an appeal to this court on April 16, 2004.
II. DISCUSSION
A. Do We Have Jurisdiction Over this Appeal?9
Wrobel asserts that Barclays’ appeal is not timely because
the district court’s October 7, 2002 judgment of foreclosure was a
final judgment under 28 U.S.C. § 1291 and measured from that date
the appeal undoubtedly would be late. While Barclays does not deny
that the October 7, 2002 judgment of foreclosure, if it stood alone,
would be a final judgment, it maintains that the district court entered
its judgment of foreclosure only in Wrobel and that it did not enter a
final judgment in Consolidated Realty until March 19, 2004. Because
the district court consolidated the two actions on November 4, 1999,
according to Barclays “entry of a final judgment in each was a
prerequisite to appellate jurisdiction” in both cases and therefore its
current appeal is timely. Appellant’s reply br. at 1. We point out that
if the time for appeal in both cases is measured from entry of the
March 19, 2004 order then the appeal clearly would be timely.10
The operative legal principle with respect to the timeliness
of this appeal is clear. We set forth the controlling rule in Bergman v.
City of Atlantic City, 860 F.2d 560, 567 (3d Cir. 1988), in which we
held that “where two or more actions are consolidated for all purposes

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11Neither party asserts that the district court certified the October
7, 2002 as final under Rule 54(b).
12Wrobel contends that the March 20, 1995 agreement rendered
the Consolidated Realty action moot but clearly it did not for Wrobel’s
claim against The Dome arose before its reconveyance to Consolidated
and thus, if valid, would survive the reconveyance. Consolidated sought
to circumvent this argument by having its original conveyance to St.
Croix Estates declared void ab initio.
9
of discovery and trial, a judgment in one of those actions is not
appealable either until all of the consolidated actions have been
resolved, or until the district court grants a motion for certification
under Rule 54(b).”11
The judgment of foreclosure of October 7, 2002, did not
resolve Consolidated’s request in Consolidated Realty for a
declaration that the conveyance of The Dome from Consolidated to
St. Croix Estates was void ab initio and that the deed be struck from
the records or set aside. Indeed, the October 7, 2002 judgment of
foreclosure does not mention this issue. Moreover, the district court
acknowledged in its March 19, 2004 order in response to
Consolidated’s motion for entry of orders that it had “never dismissed
the [Consolidated Realty] Complaint nor entered any declaration
concerning the conveyance.” App. at 4a. Similarly, the district
court’s September 27, 2002 opinion, setting forth the basis for the
October 7, 2002 judgment, does not contain a discussion of the
property conveyance from Consolidated to St. Croix Estates.12
Furthermore, the district court’s issuance, at least in part, of the orders
that Consolidated requested after the court entered the judgment of
foreclosure demonstrates that the district court had not resolved all of
the issues between those parties when it entered the judgment of
foreclosure.
Inasmuch as the October 7, 2002 judgment of foreclosure
left claims unresolved in Consolidated Realty, the judgment did not
resolve Consolidated Realty fully even if it resolved Wrobel, the case
with which it was consolidated. Under Bergman, in these
circumstances, the judgment in Wrobel was not appealable until the
resolution of Consolidated Realty inasmuch as the district court
consolidated the two actions without limitation of purpose. Bergman,
860 F.2d at 567. In fact, the district court did not limit the
consolidation of the two cases and we see no reason to treat the two

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13In view of our disposition of the jurisdiction issue we need not
consider whether we should reinstate Barclays’ original appeal.
14Inasmuch as the material facts on this appeal are not in dispute,
we reject Wrobel’s argument that the clearly erroneous standard of
review applies to the district court’s conclusion that Wrobel held a future
advance mortgage on The Dome. Indeed, the lack of factual disputes
probably explains why the parties tried this case with stipulations and
documents rather than live testimonial evidence. Moreover, the district
court started its discussion of the facts in its September 27, 2002 opinion
by indicating “[t]he facts as stipulated to by the parties and found by the
Court are as follows [.]” App. at 13. What is in dispute is the legal effect
the district court gave to those facts. See IPSCO Steel (Alabama), Inc.
v. Blaine Constr. Corp., 371 F.3d 141, 147 (3d Cir. 2004) (explaining
that while factual findings are subject to the clearly erroneous standard,
“conclusions drawn with respect to the legal effect of any agreement are,
however, questions of law and therefore subject to plenary review”). In
any event, even if we used the deferential clearly erroneous standard on
this appeal our result would be the same.
10
actions as distinct for purposes of appeal. Therefore, under Bergman,
this appeal is timely and we may assert jurisdiction under 28 U.S.C. §
1291 and 48 U.S.C. § 1613.13
B. Did Wrobel Hold a Future Advance Mortgage?
We now turn to the central substantive legal issue on this
appeal. Barclays contends that the district court erred in concluding
that Wrobel held a future advance mortgage on The Dome and in
relying on that legal basis to grant a judgment of foreclosure to
Wrobel. Of course, if Barclays is correct then, at least insofar as
Wrobel is concerned, to the extent he is relying on the St. Croix
Estates mortgage as a future advance mortgage Barclays’ title is valid
and the foreclosure was invalid. We review this legal determination
under Virgin Islands law de novo.14 Haugh v. Allstate Ins. Co., 322
F.3d 227, 234 (3d Cir. 2003) (citing Salve Regina College v. Russell,
499 U.S. 225, 231, 111 S. Ct. 1217, 1221 (1991), to explain that “[o]f
course, a court of appeals makes a de novo review of a district court's
determination of state law”); James v. Zurich-Am. Ins. Co. of Illinois,
203 F.3d 250, 254-55 (3d Cir. 2000).
The district court relied on 28 V.I. Code Ann. § 1032 (1996),
and several sections of the Restatement (Third) of Property

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11
(Mortgages) (1997) to reach its legal conclusions. Relying on these
sources, the district court concluded that:
By furnishing Heaton with an assignment of the
[St. Croix Estates] Mortgage, B&M agreed to
allow the [St. Croix Estates] Mortgage to secure a
future advance by some other party. Similarly, by
furnishing Heaton with the Cramer Assignment in
blank, Cramer also agreed to allow the [St. Croix
Estates] Mortgage to secure a subsequent future
advance from another party.
. . . .
By conditionally accepting the Cramer Assignment,
Wrobel agreed with Heaton that the mortgage on
[The Dome] would secure payment of the Wrobel
Note.
Thus, the Wrobel Note is a ‘future advance’ with
respect to the [St. Croix Estates] Mortgage as
assigned via the B&M Assignment and further
assigned via the Cramer Assignment and as
ultimately delivered to Wrobel. Therefore, the [St.
Croix Estates] Mortgage, as assigned, secures
payment of the Wrobel Note notwithstanding the
fact that the loan made by Wrobel was not made in
connection with the original [F.D.R. Steaks and
Maan] Note. It is enough that the parties to the
transaction agreed at the time of Wrobel’s loan that
the [St. Croix Estates] Mortgage, as assigned,
would secure that obligation.
App. at 21-22 (citation omitted). Additionally, the district court
concluded that neither the parol evidence rule nor the statute of frauds
barred enforcement of the Wrobel agreement and, for procedural
reasons, the court would not entertain Consolidated’s argument that
the Wrobel loan was usurious. The district court did not reach the
issue of whether Wrobel was entitled to an equitable remedy and
determined that Consolidated’ s arguments premised on the Uniform
Commercial Code were not relevant in the context of a future advance
mortgage.

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12
1. What is a Future Advance Mortgage?
Virgin Islands statutory law permits future advance
mortgages. 28 V.I. Code Ann. § 1032. In the absence of contrary
Virgin Islands law, the common law, as expressed in the American
Law Institute’s Restatements of the Law, fills the gaps in Virgin
Islands statutory law. 1 V.I. Code Ann. § 4 (2004). According to
Restatement (Third) of Property (Mortgages) (1997), the term “future
advances” refers to:
[A]ll situations in which a mortgagor’s obligation
or the amount or value of a mortgagor’s secured
performance arises or is enlarged after the
mortgage becomes effective. Most future advances
are sums of money disbursed to the mortgagor by
the mortgagee. Typical examples include draws on
construction loans and disbursements under
secured lines of credit. However, an obligation
secured by a mortgage may accrue by virtue of
circumstances other than a monetary advance. For
example, a mortgage may secure the mortgagor’s
guarantee of another person’s debt. If the other
person defaults, the mortgagor’s obligation to pay
accrues. That sort of obligation is governed by the
rules of this and the following sections. Similarly,
a mortgagor and a mortgagee may enter into a
mortgage to secure a particular debt, and may later
agree to extend the mortgage’s coverage to other
debts, either preexisting or incurred at the time of
the modification. Such cases are regarded as future
advances.
Restatement (Third) of Property (Mortgages) § 2.1 cmt. a (1997). In
view of the proliferation of home equity lines of credit the use of
future advance mortgages has become quite widespread.
The statute authorizing the use of future advance mortgages
in the Virgin Islands, 28 V.I. Code Ann. § 1032, reads:
(a) Any mortgage or other instrument given for the
purpose of creating a lien on real property may, and
when so expressed therein or when so expressed in
a separate loan agreement specifically referred to

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13
therein and incorporated by reference (which loan
agreement need not be recorded) shall, secure not
only existing indebtedness, but also future
advances, whether such advances are obligatory or
to be made at the option of the lender, or otherwise,
to the same extent as if such future advances were
made on the date of the execution of such mortgage
or other instrument, although there may be no
advance made at the time of the execution of such
mortgage or other instrument and although there
may be no indebtedness outstanding at the time any
advance is made. Such lien, as to third persons
with or without the actual knowledge therein, shall
be valid as to all such indebtedness as future
advances from the time the mortgage or other
instrument is recorded as provided by this title.
The total amount of the indebtedness that may be
so secured may decrease or increase from time to
time, but the total unpaid balance so secured at any
one time shall not exceed a maximum principal
amount which must be specified in such mortgage
or other instrument, plus interest thereon, service
charges and any disbursements made for the
payment of taxes, assessments, or insurance on the
property covered by the lien, with interest on such
disbursements.
(b) Any such mortgage or other instrument, and all
such existing indebtedness, future advances and
disbursements thereunder, interest thereon, and
service charges, shall have preference to and
priority over any lien which is subsequent in time
to the time such mortgage or other instrument is
recorded as provided by this title.
Nothing herein shall be construed to limit any
agreement between the lender and the borrower as
to the time period for the repayment of such
existing indebtedness, future advances and
disbursement, interest, and service charges.
2. Was the St. Croix Estates Mortgage originally a
Future Advance Mortgage or did it become one?

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15The assignment of mortgage from Bouwman and Mazur to
Cramer transfers “that certain mortgage in the original principal amount
of $500,000.00 made by ST. CROIX ESTATES, INC., a Delaware
corporation, F.D.R. STEAKS, INC., a Florida corporation, and MAAN,
INC., a Michigan corporation, mortgagor, in favor of JAMES P.
BOUWMAN and RICHARD F. MAZUR, mortgagee . . . .” App. at 175
(emphasis added).
16The assignment of mortgage from Cramer in blank, eventually
assigned to Wrobel, transfers “that certain mortgage in the original
principal amount of $500,000.00 made by ST. CROIX ESTATES, INC.,
a Delaware corporation, F.D.R. STEAKS, INC., a Florida corporation,
and MAAN, INC., a Michigan corporation, mortgagor, in favor of
JAMES P. BOUWMAN and RICHARD F. MAZUR, mortgagee . . . .”
App. at 176 (emphasis added).
14
We begin our determination of the extent, if any, of
Wrobel’s interest in The Dome with an analysis of the mortgage
between St. Croix Estates as mortgagor and Bouwman and Mazur as
mortgagees. Bouwman and Mazur assigned their rights under that
mortgage to Cramer, and Cramer in turn assigned its rights, derived
from Bouwman and Mazur, in blank, though the assignment
ultimately was made to Wrobel. The Restatement (Second) of
Contracts explains that “an assignment of a right is a manifestation of
the assignor’s intention to transfer it by virtue of which the assignor’s
right to performance by the obligor is extinguished in whole or in part
and the assignee acquires a right to such performance.” Restatement
(Second) of Contracts § 317 (1981). Therefore, at most, Bouwman
and Mazur could assign to Cramer their right to St. Croix Estates’
performance.15 Similarly, at most, Cramer could assign to Wrobel its
right to that performance.16 Of course, prior to either assignment, St.
Croix Estates had completed the performance the mortgage secured as
it paid the $500,000 promissory note and Bouwman and Mazur had
issued a satisfaction of the mortgage.
To determine the nature of the transferred right to
performance, we examine the mortgage from St. Croix Estates to
Bouwman and Mazur because both assignments assigned “that certain
mortgage.” App. at 175-76. If the mortgage from St. Croix Estates to
Bouwman and Mazur was not a future advance mortgage, then
Bouwman and Mazur, and subsequently Cramer, could not have
assigned a mortgage which, prior to being assigned, somehow had
become a future advance mortgage.

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15
The district court relied on Restatement (Third) of Property
(Mortgages) §§ 2.1 and 2.4 to determine that Wrobel held a future
advance mortgage. Section 2.1, “Future Advances,” states in relevant
part:
(a) A mortgage secures ‘future advances’ if it
secures performance of an obligation that comes
into existence or is enlarged after the mortgage
becomes effective.
(b) As between the parties to a mortgage,
repayment of future advances will be secured by
the mortgage if the parties have so agreed. The
agreement need not be in the mortgage and need
not be written. If a separate agreement for future
advances is made at the time the mortgage becomes
effective, but is unwritten, it will be enforceable
only to the extent permitted by the Parol Evidence
Rule.
(c) As against a person acquiring an interest in the
mortgaged property subsequent to the mortgage,
repayment of future advances will be secured only
if an agreement of the kind described in Subsection
(b) exists and
(1) the mortgage states that repayment of future
advances is secured; or
(2) the person has other notice of the parties'
agreement concerning future advances at the
time the interest is acquired; or
(3) the mortgage states a monetary amount to be
secured.
Restatement (Third) of Property (Mortgages) § 2.1 (emphasis added).
Section 2.4, entitled “Mortgages Securing Future Advances Not Specifically
Described,” provides in relevant part:
A mortgage may secure future advances that are not
made in connection with the transaction in which the
mortgage is given, and that are not specifically described

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16
in the mortgage or other documents executed as part of
that transaction, subject to the following limitations:
(a) The parties must have agreed that such future
advances will be secured. Whether this agreement must
be written and contained in the mortgage is governed by
the principles of § 2.1(b) and (c).
(b) The advances must be made in a transaction similar in
character to the mortgage transaction, unless
(1) the mortgage describes with reasonable specificity the
additional type or types of transactions in which advances
will be secured; or
(2) the parties specifically agree, at the time of the
making of the advances, that the mortgage will secure
them.
Restatement (Third) of Property (Mortgages) § 2.4 (1997) (emphasis
added).
Unfortunately for Wrobel there simply is no expression in the
mortgage from St. Croix Estates to Bouwman and Mazur that it will secure
future advances. It is true that a written expression that a mortgage secures
future advances is not required in the Virgin Islands if the parties have
agreed that it will do so. There is, however, no evidence in the record that
St. Croix Estates and Bouwman and Mazur at the time of the execution of
the mortgage agreed, orally or in writing, that the St. Croix Estates mortgage
would secure future advances. In fact, the mortgage states that “if said
mortgagor shall pay unto said mortgagee the certain promissory note
hereinafter substantially copied or identified, to wit: and shall perform,
comply with and abide by each and every the agreements, stipulations,
conditions and covenants thereof, and of this mortgage, then this mortgage
and the estate hereby created, shall cease, determine and be null and void.”
App. at 168 (emphasis added). Thus, the only evidence in the record
regarding whether the parties to the mortgage originally agreed to create a
future advance mortgage explicitly negates any such intent. Finally, on the
issue of original intent, we point out that if there were any doubt about
whether the original parties to the mortgage intended it to be a future
advance mortgage, which there is not, then surely Bouwman and Mazurs’
action in issuing satisfactions of the mortgage on October 5, 1989, and then
again on November 1, 1989, after it assigned the mortgage, negates that

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17We point out that sometimes parties to a mortgage in situations
in which the mortgagor can satisfy it provide for the mortgagee to assign
the mortgage to the mortgagor so that it remains open on the record for
the purpose of affecting priorities of claims against the property. See
Denzler v. O’Keefe, 34 N.J. Eq. 361 (Ch. 1881).
18In an opinion of April 13, 1998, denying cross motions for
summary judgment addressing Wrobel’s attempt to obtain a judgment of
foreclosure and Consolidated’s attempt to secure an order holding that
Wrobel did not have a lien on the property, the district court indicated
that “there is evidence that the intention of the mortgagor, St. Croix
Estates, was to keep the mortgage alive to be used for a subsequent
assignment.” App. at 138. But a mortgage can be assigned without
being converted into a future advance mortgage.
17
possible intent.
Similarly, there is no evidence that St. Croix Estates and
Bouwman and Mazur, agreed to transform the mortgage into a future
advance mortgage after its creation, particularly at the time that Bouwman
and Mazur assigned it to Cramer. The letter from Heaton’s attorney to
Bouwman and Mazurs’ attorney requesting an assignment rather than a
satisfaction of the mortgage does not mention the assignment’s purpose, for
example, to secure a future advance by some other party. In the
circumstances, there was no basis for the district court’s statement in its
September 27, 2002 opinion that “[b]y furnishing Heaton with an
assignment of the [St. Croix Estates] Mortgage, B&M agreed to allow the
[St. Croix Estates] Mortgage to secure a future advance by some other
party.” App. at 21. At the risk of being regarded unkind, it seems to us that
the court created this finding out of thin air. First, Bouwman and Mazur did
not “furnish[ ] Heaton with an assignment.” Rather, Bouwman and Mazur
signed a document purporting to assign their rights under the original
mortgage agreement to Cramer. Second, and more significantly, there is no
evidence in the record that Bouwman and Mazur or Cramer contemplated
anything other than assignment of Bouwman and Mazurs’ rights, whatever
they were, under the original mortgage.17
Moreover, there is no evidence that, whatever may have been in
Heaton’s mind, when Bouwman and Mazur made the assignment of the St.
Croix Estates mortgage that the then owner of the property and thus the
mortgagor, St. Croix Estates, agreed to change the mortgage into a future
advance mortgage. In fact, the district court in its September 27, 2002
opinion never held that it did.18 Rather, the court held that “[b]y

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19In making this statement we do not disregard the circumstance
that Heaton apparently at the times material to this case was St. Croix
Estates’ sole officer, director and shareholder. App. at 198.
18
conditionally accepting the Cramer Assignment, Wrobel agreed with Heaton
that the mortgage on [The Dome] would secure payment of the Wrobel
Note.” App. at 22. But this finding cannot be justified because Heaton
never held title to the property and thus was not a party to the mortgage and
certainly could not change its terms. After all, we see no basis for us to
disregard St. Croix Estates’ corporate existence and somehow substitute
Heaton for St. Croix Estates as the mortgagor.19 Furthermore, an assigned
mortgage can provide security according to its terms without being
converted into a future advance mortgage so that even if the district court
had found that Wrobel’s agreement was with St. Croix Estates, his mere
acceptance of the Cramer assignment would not have converted the
mortgage into a future advance mortgage.
We emphasize that the mortgagor at all times remained St. Croix
Estates, even after it satisfied the mortgage. But the debt Wrobel held was
that of Florida Raffles, F.D.R. Holdings and Heaton; Wrobel obtained his
October 9, 1992 monetary judgment against those three parties and not St.
Croix Estates. The fact is that there simply is no evidence that St. Croix
Estates created a future advance mortgage. In this regard we point out that
St. Croix Estates adopted a resolution on September 6, 1989, authorizing it
to enter into the September 5, 1989 mortgage that we have called the St.
Croix Estates mortgage. App. at 71. Wrobel does not point to an
equivalent document by which St. Croix Estates converted the mortgage
into a future advance mortgage or attempted to give him a lien on The
Dome. Overall, we are convinced that the district court was wrong as a
matter of law when it found that there was a future advance mortgage in this
case. If the original mortgage did not secure future advances, and the
mortgagor, St. Croix Estates, did not change its terms, we fail to see how
Wrobel, through accepting an assignment of the original mortgage from a
previous assignee, could have obtained a future advance mortgage.
Though our result does not depend on the point, we also observe
that even from Wrobel’s perspective it cannot be said that a future advance
mortgage was created. Wrobel knew that he was to receive an assignment
of the St. Croix Estates mortgage as security but it is not clear that he
thought that the St. Croix Estates mortgage directly would secure his loan as
a lien. In fact, he left the details of the transaction to Monacelli. There is,
of course, no doubt that a mortgagee or a mortgagee’s assignee can assign a
mortgage as security without converting the mortgage into a future advance

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20We are not unaware that a mortgagor’s obligation ordinarily is
stated in an instrument separate from the mortgage, such as a bond or, as
in this case, a note, so that the mortgage itself is merely security.
Nevertheless, when a mortgage is assigned for use as collateral security
we believe that the parties’ intention, ordinarily at least, is that the
assignee be able to enforce the debt the mortgage secures if the assignor
defaults his own debt. As the Restatement (Second) of Contracts § 317
explains, the assignee obtains the assignor’s right to the obligor’s
performance.
21In view of our result we need not address Barclays’ arguments
regarding the effectiveness of the assignments, the application of the
Uniform Commercial Code, and equitable estoppel.
19
mortgage. If there is not a conversion the ultimate assignee’s security is
simply the mortgagor’s obligation to the mortgagee making the
assignment.20
We realize that at the time of the assignment in this case St. Croix
Estates already had paid the loan the mortgage secured so that an
assignment of its obligation would have been worthless. But this
circumstance does not mean that Wrobel must have thought that he was
receiving a future advance mortgage because he confirmed in his deposition
that “at no time before making this loan [did he make] any kind of inquiry
to determine the status of the payments on the original mortgage note.”
App. at 702. Thus, he did not know that his security was a satisfied
mortgage and was worthless. Overall, it is quite clear from Wrobel’s
deposition that he did not know exactly what his security was beyond being
an assignment of the St. Croix Estates mortgage for whatever that was
worth. Certainly his testimony at his deposition did not reflect that he
believed that through its assignment to him the mortgage would become a
future advance mortgage securing his loan. Indeed, we have been surprised
in our study of this case by Wrobel’s rather casual approach when he made
his $212,000 loan.
IV. CONCLUSION
Because we determine that Wrobel did not hold a future advance
mortgage, we will reverse the order of March 19, 2004, insofar as it
concluded that Wrobel’s mortgage was enforceable and superior to
Consolidated’s interest as a future advance mortgage and remand this case
to the district court for further proceedings consistent with this opinion.21

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