McGinn v. Tobey

Morse, J. The bill of complaint in this cause was filed to-set aside a deed purporting to have been executed by complainant to Thomas J. Navin, of certain premises in the county of Lenawee, being a lot and store building thereon, in the city of Adrian, and a farm in the township of Hudson ; and also to release a mortgage upon the same premises, executed by said Navin to Sylvester B. Smith and Thomas-J. Tobey while he held the apparent record title to said premises, and to have the same decreed and declared to have-no force or validity as a mortgage lien upon the lands: \ Sylvester B. Smith and Thomas J. Tobey were copartners^ in the banking business at the time the mortgage was taken,' and Smith was made a defendant to the bill. During the-taking of proofs he died, and the suit proceeds against Tobey as survivor. ¡ At the time of the execution of this deed the defendant j Navin was a member of the law firm of Merritt & Navin, in-¡ Adrian, and mayor of that city. He had the confidence andt respect of all classes, and was very popular. The complainant, a man about 60 years of age, intrusted some of his busi- \ ness to Navin, and had implicit faith in his honesty and professed friendship. ; The proofs show that.in the spring of 1881 Navin negotiated with complainant for the rent of his store, and a bargain was entered into between them by which Navin waste-lease the store for three years at the rate of $450 per year, — 257 — payable in monthly installments. Navin was to draw the lease in duplicate, each party to hold a copy. On the thirtieth of April, Navin informed complainant that he had the papers drawn, and McGinn went to his office to execute the lease. The copy which complainant took away was read to him by Navin, and he also read it himself, and, after the suggestion of some little change in the instrument, which was made, he signed it. The apparent duplicate lay upon the table, but was not read to or by McGinn. After he signed his copy he signed the other, supposing it to be an exact counterpart of his own, and left it in Navin’s possession. At the time McGinn was in the office to execute the lease Navin did not say to him that the other paper was a copy ; but he laid the two documents together upon the table for McGinn to sign, and complainant supposed it to be a copy from the previous talk that two copies, one for each, were to. be made. The paper signed and left was upon a blank of about the same character and size of the lease, and partly printed and written, as was his copy. Navin paid the rent regularly, monthly in advance, up to February 1, 1882. About six months after the execution of the lease Navin told complainant that he had lost his copy, and wanted his to make out another one for himself. Complainant let him have it, but he did not return it, and afterwards, when rent was paid, Navin would take the lease from his safe, and Mc-Ginn would make the indorsement upon it, and hand it back to Navin, who would return it to the safe. Some time in February, 1882, Navin became involved in numerous forgeries and criminal speculations, and fled the country. It was then soon discovered that he had put upon record a deed from McGinn to him of the store, lot, and the farm, dated June 2, 1881, the words “June 2nd” being written over an erasure. September 29, 1881, Navin executed to Smith & Tobey a mortgage upon the premises described in the deed, which, upon its face, purported to be given as security for the payment of a certain promissory note for $6,000, payable one — 258 — .year from date, with interest at 8 per cent., but in reality executed, as the testimony shows, as collateral security for advances made, and to be made, by the bank of Smith & Tobey to Navin ; they holding, at the same ti me, other collateral security for the same purpose. All the time from the execution of the lease to the flight of Navin, McGinn was in possession of the farm by a tenant. When Smitli & Tobey took the mortgage, they knew of the previous ownership of the farm and store by complainant. They relied upon an abstract of the title from the records of Lenawee county, which showed title in Navin, and had no converse with McGinn about it.' The day Navin left the county he drew $150 from the bank, and about that time his mother deeded to Smith & Tobey a house and lot in Adrian, worth about $8,000, the title being in her, as further security for Navin’s indebtedness to them. This lot was purchased by Havin, and he had nearly completed the house upon it, probably with his own means, or that of persons whom he had swindled. About a month thereafter, Smith & Tobey, for some reason, deeded these premises back to Mrs. Navin, the mother of Thomas J. The counsel for defendant Tobey contend that the bank was innocent of any complicity in the fraud of Navin upon complainant by which the deed was obtained; that it invested its money in good faith upon the security of the mortgage, believing the title to the lands to be in Navin, as it so appeared from the records; and that, under the equitable rule that, when one of two innocent parties must suffer loss, the one must bear the loss who, by his careless or negligent conduct, has made it possible that either should suffer, the mortgage must be considered a valid and subsisting lien upon the premises, and the complainant’s bill dismissed. This was the view of the court below, from which the complainant appeals to this Court. It is claimed by the counsel for complainant that the deed is a forgery, and can pass no title to the most innocent of purchasers or incumbrancers; that, if not technically a false instrument in such a sense as to come within the literal defi — 259 — nition of forgery, it is yet the same as a forged deed in its •effect; that it is absolutely void, and not voidable ; that the deed was never delivered by McGinn, and that, without delivery, it is void from the beginning; that the complainant never intended to sign any such instrument, — his mind did ñot go with the act, — and that, therefore, in contemplation •of the law, he never did sign it; that it is no more his deed ■than if he had signed it in his sleep. It is very evident that the deed of these premises to Navin was not in fact the deed of the complainant. He never meant to execute a deed, and never knew that he had executed one until confronted with his signature to the same, •after Navin had gone away to escape arrest. As was well said by Chief Justice Ryan, in Griffiths v. Kellogg, 39 Wis. 291, the deed, “ if not a forgery, was akin to forgery.” That was a case where a lightning-rod agent induced a woman to sign a promissory note for a greater sum than she owed, by reading the instrument to her as of the less and real sum of her agreed obligation. The court said: “ The note in suit was as little hers as if the transaction between her and the lightning-rod man had not taken place and he had forged the note.” • The person who relies upon the records for the authenticity and validity of a deed does not stand in as favorable a position as a good-faith holder of negotiable paper. In this case, if the name of complainant had been forged by Navin, without the presence or knowledge of McGinn, and ¡placed upon the record, the abstract of title upon which defendant Tobey and his copartner relied would not have disclosed the forgery, any more than it did the fraud, of Navin. It seems to us that, in order to make, them dona fide holders of this mortgage as against the lands of McGinn, they were bound to go further than the abstract, and to examine the ■deed. This they did not do. But we consider this deed clearly a forgery, under the best definitions of that offense. Bishop defines “ forgery” to be the false making or materially altering, with intent to defraud, of any writing, which, if genuine, might apparently — 260 — be of legal efficacy, or the foundation of a legal liability 2?-Bish. Crim. Law (7th ed.), § 623. It is the “fraudulent-making and alteration of a writing, to the prejudice of another man’s rights 4 Bl. Comm. 247. The signature-to this instrument is genuine, but the body of the deed is false, and the signing of complainant’s name, without knowledge of such falsity, cannot cure it and make it a true and-valid instrument in the hands of any one. A genuine signature cannot change the character of an instrument of this kind, unless the intent to do so goes with the signature. It does not seem to me that the question of the complainant’s negligence in signing this supposed copy of the lease without reading it, if this is a forgery, as I think it is, can' be considered in this case ; for, if the deed is in law a forg-1 ery, the question of good faith cannot arise: Camp v. Carpenter, 52 Mich. 375; Austin v. Dean, 40 Id. 386; D’Wolf v. Haydn, 24 Ill. 525; Griffiths v. Kellogg, 39 Wis. 293; Crawford v. Hoeft, 58 Mich. 21. I do not think, either, that Smith & Tobey could be considered good-faith holders by a simple examination of the abstract of title. The alteration in the date of the deed would have appeared upon examination of the original document, but was not shown by the registry. And the singular circumstance of their deeding the house and lot back to Mrs. Navin, and notifying the attorneys of complainant that they were about to do so, and telling them that they did this so-that McGinn might attach Navin’s interest in the same,, coupled with the fact that they knew of McGinn’s occupancy of the farm, and did not ask him about the pretended transfer to Navin, and the further fact that they also knew that the house built upon the- lot deeded by Mrs. Navin to them was paid for, in part, by funds of Navin, drawn out of their own bank, leads me to strongly suspect, to say the least, their entire good faith in the transaction. They are not innocent parties without such fault, in my mind, as to take the value of this mortgage out of this old man, when they could have-easily obtained its amount from Navin’s property, which, they have voluntarily returned to his mother. — 261 — There is no gross negligence shown upon the part of complainant. McGinn was not bound to suppose that a man of the position and character in the community that Navin then held, and who was his professed friend, was likely to thus rob him of his hard earnings. He read the lease, .and it was read to him. What must have been this deed was very similar to the lease. It was placed before him as a copy, and in signing it he only did what the ordinary business man, having any confidence in the honesty and integrity of another, would have done. To require that he should have dealt with Navin upon the principle that “ every man is a rascal,” and none honest, or lose his property, would be to encourage in law a distrust and doubt of human nature not commendable or to be desired. We think, under the circumstances, he had a right to put a little faith in the integrity of one honored and trusted by the community where he lived, and was not so negligent in signing the duplicate without reading it as to lose his rights in the premises against one holding on the faith of the record title, without notice of the fraudulent inception of the deed. The decree of the court below is reversed, with costs of both courts, and a decree will be entered here granting the relief prayed in complainant’s bill. Campbell, O. J., and Champlin, J., concurred. Shebwood, J., concurred in the result.