CIVIL COURT OF THE CITY OF NEW YORK

COUNTY OF NEW YORK

------------------------------------------------------------ x INDEX NO. 47075-10
:
CHASE BANK USA, N..A. :
Plaintiff :
: NOTICE AND
: MOTION TO DISMISS
-against- : FOR LACK
: OF SUBJECT MATTER
: JURISDICTION
:
:
OSVALDO VALDES :
Defendant :
:
------------------------------------------------------------ x

NOTICE:

The court is hereby noticed that the following motion is before it and to be heard

at the motion hearing 20th day of October, 2010 in room 428, 111 Centre Street, NY, NY.

10013.

Comes now the respondent Osvaldo-Valdés with interest in this matter as grantor/settlor and

beneficiary to OSVALDO VALDES and all variations derived therefrom to appear specially not

generally before this administrative court with administrative judge to recover property and aid

the court and other public trustees in the settlement and closure of this account.

.
THE COURT IS WITHOUT SUBJECT MATTER JURISDICTION

Pursuant to CVP ART 3. CCA, ART 2 Defendant respectfully moves this court to dismiss the

instant case for lack of subject matter jurisdiction for the following reasons:

ARGUMENT I:

47075-1 0 1 of 10
Breach of contract. On 04 May 2010 Defendant sent Plaintiff a NOTICE OF ULTRA

VIRES/VOID AGREEMENT AND CHANGE IN TERMS and a Document Collection Draft,

(Exhibit B).

“It has been settled beyond controversy that a national bank, under Federal law,
being limited in it’s power and capacity, cannot lend it’s credit by guaranteeing
the debt of another. All such contracts being entered into by its officers are ultra
vires and not binding upon the corporation.”Howard & Foster Co. vs. Citizens
National Bank of Union, 133 S.C. 202; 130 SE 758, (1927), it was stated,

Plaintiff was given 30 days to present document collection draft for payment if it disagreed with

defendant's contention that its agreement was ultra vires and void (Exhibit B).

Plaintiff was unable to or refused to present document collection draft for payment.

Plaintiff's failure to present document collection draft is acceptance of defendant's Change

in Terms (Exhibit B).

Plaintiff failed to pay derfendant's monies owed for the use of his property pursuant to amended

agreement, (Exhibit C).

Pursuant to the Change in Terms, Plaintiff has breached its contract with defendant, (Exhibit C).

On 17 June 2010 defendant served plaintiff NOTICE AND JUDGEMENT OF DEFAULT

AND STOPPEL. (Exhibit C).

On 17 June 2010 defendant served plaintiff INVOICE for amounts due, (Exhibit C).

Plaintiff is in Default. It has not paid defendant monies it admits owes. It has refused or is unable

to return title granted to plaintiff by defendant.

ARGUMENT II:

Plaintiff did not lend defendant money, (Exhibit A). It lent the use of its credit via a

card. Pursuant to “The Story of Money” by the Federal Reserve Bank of New York at page 18

47075-10 2 of 10
a credit card is not money:
“A credit card is not money...”

Pursuant to Title 12, Section 24, Seventh banks are not authorized by law to lend credit. The

lending of credit is not included in the list of incidental powers authorized by Congress:

“. . . the bank is allowed to lend money upon personal security; but it must be
money that it loans, not its credit.” Seligman v. Charlottesville Nat. Bank, 3
Hughes 647, Fed Case No.12, 642, 1039.

“In the federal courts, it is well established that a national bank has not power to
lend its credit to another by becoming surety, indorser, or guarantor for him.”
Farmers and Miners Bank v. Bluefield Nat ‘l Bank, 11 F 2d 83, 271 U.S. 669.

“A national bank has no power to lend its credit to any person or corporation.”
Bowen v. Needles Nat. Bank, 94 F 925, 36 CCA 553, certiorari denied in 20 S.Ct
1024, 176 US 682, 44 LED 637.

“It has been settled beyond controversy that a national bank, under federal law
being limited in its powers and capacity, cannot lend its credit by guaranteeing
the debts of another. All such contracts entered into by its officers are ultra vires”
Howard & Foster Co. v. Citizens Nat’l Bank of Union, 133 SC 202, 130 SE
759(1926).

“It is not within those statutory powers for a national bank, even though solvent,
to lend its credit to another in any of the various ways in which that might be
done.” Federal Intermediate Credit Bank v. L ‘Herrison, 33 F 2d 841, 842 (1929).

“A bank can lend its money, but not its credit.” First Nat ‘I Bank of Tallapoosa v.
Monroe, 135 Ga 614, 69 SE 1124, 32 LRA (NS) 550.

"Banking Associations from the very nature of their business are prohibited from
lending credit." West St. Louis Savings Bank vs. Shawnee County Bank 95 U. S.
557

ARGUMENT III:

Plaintiff does not use any of its own money to fund the alleged credit card account. They use

the applicant's property to fund the account”

“Transaction deposits are the modern counterpart of bank notes. It was a small

47075-10 3 of 10
 step from printing notes to making book entries crediting deposits of borrowers,
which the borrowers in turn could “spend” by writing checks, thereby “printing”
their own money” Modern Money Mechanics, Federal Reserve Bank of Chicago,
1994, at page 3. (Exhibit C).

“Of course, they do not really pay out loans from the money they receive as
deposits. If they did this, no additional money would be created. What they do
when they make loans is to accept promissory notes in exchange for credits to the
borrowers' transaction accounts. Loan (assets) and deposits (liabilities) both rise
by $9,000. Reserves are unchanged by the loan transactions. But the deposit
credits constitute new additions to the total deposits of the banking system.”
Modern Money Mechanics, Federal Reserve Bank of Chicago, 1994, at page 6.
(Exhibit C).

“Loans are made by crediting the borrower's deposit account, i.e., by creating
additional deposit money.” Modern Money Mechanics, Federal Reserve Bank of
Chicago, 1994, at page 7. (Exhibit C).

“The FED buys securities with money that it creates, money that didn't exist
before.” The Story of Monetary Policy, Federal Reserve Bank of New York,
2002, at page 11.

“A lot of money is created when the banks, credit unions, and savings and loans
in the United States get involved.” The Story of Banks, Federal Reserve Bank of
New York, 2001, at page 10.

“The FED influences the amount that banks can lend out and the amount of
money that the banking system can create.” The Story of Money, Federal Reserve
Bank of New York, 2001, at page 23.

CHASE BANK has merely exchanged Defendant's credit card application for transaction
account credits.

Exchange. To part with, give or transfer for an equivalent. Kessler v. United

States, C.C.A.Pa., 124 F.2d 152, 154. Black's Law Dictionary, Sixth Edition at
page 562. Pursuant to Title 12, Section 24, Seventh banks are not authorized by
law to create money out of thin air or lend people their own property at interest.
ARGUMENT IV:

The instant court lacks subject matter jurisdiction. Court cannot proceed without subject matter

jurisdiction which cannot be waived but can be raised at any time:

Subject matter jurisdiction is the power to hear and determine cases of the general
class to which the proceedings then before the court belong. Sons v. City of
Crown Point, 691 N.E.2d 1237, 1239 (Ind. Ct. App. 1998). Subject matter

47075-10 4 of 10
 jurisdiction cannot be waived or conferred by agreement. Id. Subject-matter
jurisdiction may be raised by the parties or the court at any time, including on
appeal. Campbell v. Eckman/Freeman & Associates, 670 N.E.2d 925, 929 (Ind.
Ct. App. 1996), trans. Denied.

Subject matter jurisdiction is the power to hear and determine cases of the general
class to which the proceedings then before the court belong. Sons v. City of
Crown Point, 691 N.E.2d 1237, 1239 (Ind. Ct. App. 1998).

Subject matter jurisdiction cannot be waived or conferred by agreement. Id.

Subject-matter jurisdiction may be raised by the parties or the court at any time,
including on appeal. Campbell v. Eckman/Freeman & Associates, 670 N.E.2d
925, 929 (Ind. Ct. App. 1996), trans.

Once the question of subject matter jurisdiction has been raised, the burden of
establishing subject matter jurisdiction rests on the party asserting jurisdiction.
See Thomas v. Gaskill, 315 U.S. 442, 446 (1942).

A district court, however, need not confine its evaluation of subject matter
jurisdiction to the face of the pleadings and may consider affidavits and other
evidence submitted by the parties. See Land v. Dollar, 330 U.S. 731, 735 & n.4
(1947); Exchange Nat’l Bank v. Touche Ross & Co., 544 F.2d 1126, 1130-31 (2d
Cir. 1976); Matos v. United States Dep’t of Hous. & Urban Dev., 995 F. Supp.
48, 49 (D. Conn. 1997).

NovaCare Orthotics & Prosthetics East, Inc. v. Speelman, 137 N.C.App. 471, 528
S.E.2d 918 (2000) (“when an ambiguity is present in a written instrument, the
court is to construe the ambiguity against the drafter--the party responsible for
choosing the questionable language”).

ARGUMENT V:

Plaintiff has not proven the instant court has subject matter jurisdiction.

Once the question of subject matter jurisdiction has been raised, the burden of
establishing subject matter jurisdiction rests on the party asserting jurisdiction.
See Thomson v. Gaskill, 315 U.S. 442, 446 (1942).

ARGUMENT VI:

Plaintiff's consideration is illegal. Pursuant to Title 12, Section 24, Seventh banks are not

authorized by law to lend their debt. The lending of debt is not included in the list of incidental

powers authorized by Congress..

47075-10 5 of 10
Black's Sixth Edition at page 613 defines Federal Reserve Notes as: “Form of currency issued by
Federal Reserve Banks in the likeness of noninterest bearing promissory note payable to bearer
on demand.”

Barron's Dictionary of Banking Terms defines Federal Reserve Notes as: “Federal Reserve notes
are non-interest bearing promissory notes...”

Federal Reserve Banks carry Federal Reserve Notes on their balance sheets as a liability

confirming the notes are an obligation, a debt, of the banks.

“The contract is void if it is only in part connected with the illegal transaction and
the promise single or entire.” Guardian Agency v. Guardian Mutual. Savings
Bank, 227 Wis 550, 279 NW 83.

ARGUMENT VII:

A contract based on illegal consideration is void:

“If any part of the consideration for a promise be illegal, or if there are several
considerations for an unseverable promise one of which is illegal, the promise,
whether written or oral, is wholly void, as it is impossible to say what part or
which one of the considerations induced the promise.” Menominee River Co. v.
Augustus Spies L & C Co., 147 Wis 559, 572; 132 NW 1122

“The contract is void if it is only in part connected with the illegal transaction
and the promise single or entire.” Guardian Agency v. Guardian Mutual. Savings
Bank, 227 Wis 550, 279 NW 83.

“Even though it may be sufficient in other respects a consideration which is

illegal will not render a promise enforceable.” Dennehy v McNulta 86 Fed. 825
59 US App 264 30 CCA 422 41 LRA 609 State Bank of Greentown v Lawrence
177 Ind 515 96 NE 947 42 LRA NS 326 Nicholson v Ellis 110 Md 322 73 Atl 17
132 ASR 445 24 LRA NS 942 Dickson v Kittson 75 Minn 168 77 NW 820 74
ASR 447 Coventry v Barton 17 Johns NY 142 8 Am Dec 376

ARGUMENT VIII:

Plaintiff lacks standing to sue. Plaintiff admits it is a debt collector. There is no proof on the

record that Plaintiff owns the alleged account. There is no proof on the record that plaintiff is a

creditor. There is no proof on the record that plaintiff is an injured party.

Pursuant to Black's Law Dictionary, Sixth Edition, at page 1405:

47075-10 6 of 10
 "Standing to sue" means that party has sufficient stake in an otherwise justiciable
controversy to obtain judicial resolution of that controversy. Sierra Club v.
Morton, 405 U.S. 727, 92 S.Ct. 1361, 1364, 31 L.Ed.2d 636.

Pursuant to Case 1:07-cv-02282-CAB Judge Boyko states:

"Further, the plaintiff “bears the burden of demonstrating standing and must plead
its components with specificity.” Coyne, 183 F. 3d at 494; Valley Forge Christian
College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464
(1982). The minimum constitutional requirements for standing are: proof of injury
in fact, causation, and redressability. Valley Forge, 454 U.S. at 472. In addition,
“the plaintiff must be a proper proponent, and the action a proper vehicle, to
vindicate the rights asserted.” Coyne, 183 F. 3d at 494 (quoting Pestrak v. Ohio
Elections Comm’n, 926 F. 2d 573, 576 (6th Cir. 1991)). To satisfy the
requirements of Article III of the United States Constitution, the plaintiff must
show he has personally suffered some actual injury as a result of the illegal
conduct of the defendant. (Emphasis added). Coyne, 183 F. 3d at 494; Valley
Forge, 454 U.S. at 472."

Quoting Bullock v. Worldwide Asset Purchasing, LLC NO. 2006-CA-001757-MR:

"From a review of the record and from the nature of debt collection cases, in
order to ensure that our courts are reaching the correct conclusion, Worldwide
and other similarly situated plaintiffs must be required to prove three elements of
a claim before a judgment can be entered against a defendant. Worldwide must
produce a bill of sale listing the name and account number of the defendant; it
must produce a document specifically detailing how it reached the principal and
interest amounts that it is suing for; and it must produce documentary evidence
that the defendant is in fact the person responsible for the debt. These
requirements simsimplyimply were not met in this case."

ARGUMENT IX:

Plaintiff is in Breach of Trust. Settlor/grantor Osvaldo Valdés with his signature created

title and conveyed same to Trustee CHASE BANK. Plaintiff is unable or refuses to

return Settlor's property.

ARGUMENT X:

There is no proof on the record that Plaintiff owns the alleged account. There is no proof on the

record that plaintiff has provided consideration. There is no proof on the record that plaintiff is a

creditor. There is no proof on the record that plaintiff is an injured party.

47075-10 7 of 10
 “a void contract is invalid from its inception and cannot be ratified.” Alphonse v.
Northern Telecom, Inc., 776 F. Supp. 1075, 1078-79 (E.D.N.C. 1991) (citing
North Carolina cases)

'There is an important distinction between “void” and “voidable” contracts, and

confusion has resulted from the fact that it is voidable. A void contract is no
contract at all; it binds no one and is a mere nullity. Accordingly, an action cannot
be maintained for damages for its breach. No disaffirmance is required to avoid it,
and it cannot be validated by ratification; life cannot be breathed into it on the
ground of expediency or because its completion would render a useful purpose in
accomplishing desired ends. A contract wholly void is void as to everybody
whose rights would be affected by it if valid. Where one of two mutually
dependent provisions of a contract is void, the parties are not bound by the other
provision.' 17A Am.Jur.2d Contracts § 7, at 31.

In short, a contract that is void has no effect whatsoever.

Subject matter jurisdiction is the power to hear and determine cases of the general class
to which the proceedings then before the court belong. Sons v. City of Crown Point, 691
N.E.2d 1237, 1239 (Ind. Ct. App. 1998).

Subject matter jurisdiction cannot be waived or conferred by agreement. Id. Subject-

matter jurisdiction may be raised by the parties or the court at any time, including on
appeal. Campbell v. Eckman/Freeman & Associates, 670 N.E.2d 925, 929 (Ind. Ct. App.
1996), trans.

Once the question of subject matter jurisdiction has been raised, the burden of
establishing subject matter jurisdiction rests on the party asserting jurisdiction.
See Thomas v. Gaskill, 315 U.S. 442, 446 (1942).

A district court, however, need not confine its evaluation of subject matter
jurisdiction to the face of the pleadings and may consider affidavits and other
evidence submitted by the parties. See Land v. Dollar, 330 U.S. 731, 735 & n.4
(1947); Exchange Nat’l Bank v. Touche Ross & Co., 544 F.2d 1126, 1130-31 (2d
Cir. 1976); Matos v. United States Dep’t of Hous. & Urban Dev., 995 F. Supp.
48, 49 (D. Conn. 1997).

NovaCare Orthotics & Prosthetics East, Inc. v. Speelman, 137 N.C.App. 471, 528
S.E.2d 918 (2000) (“when an ambiguity is present in a written instrument, the
court is to construe the ambiguity against the drafter--the party responsible for
choosing the questionable language”).

ARGUMENT XI:
CHASE failed to verify any debt is in violation of Fair Debt Collecton Practices Act 15 USC

47075-10 8 of 10
§1601, ET SEQ. In violation of my due process rights

CONCLUSION:

Defendant offered payment (Exhibit B) and Plaintiff refused to collect (Exhibit C).

Plaintiff's Complaint alleges a valid enforceable contract and alludes to numerous contrtractual

terms, yet in all respects, the Plaintiff's Complaint is unsopported by any evidence appearing in

this cause of action.

The Plaintiff does not bring any supporting documentation, Plaintiff's Complaint fails to

establish the existence of a valid contract between the parties herein.

Based on the above evidence and arguments and as a matter of law Plaintiff's complaint should

be dismissed for lack of standing and lack of subject matter jurisdiction. Defendant should be

awarded $25,000 and damages as the court sees fit for the use of his property by Plaintiff and

refusal to return same.

Respectfully Submitted,

By: Osvaldo Valdés

--------------------------------------------------------------------------------

CERTIFICATE OF SERVICE I certify that the foregoing was served by mailing a copy by

United States mail, first-class postage prepaid, on 28th day of September , 2010, as follows:

CHASE BANK USA, N.A.

200 WHITE CLAY CENTER DRIVE
NEWARK, DE

__________________________
By: Osvaldo Valdés, 184 East 7th Street, New York City [10009]

47075-10 9 of 10
47075-10 10 of 10