Horton v. Horton

HOWE, Justice

(concurring and dissenting):

I concur in restoring Mr. Horton to his former position which was subordinate to the two earlier mortgages. He should not reap the benefit of the Majestic loan which extinguished the two prior mortgage balances. We recognized this principle in Rosenthyne v. Matthews-McCulloch Co., 51 Utah 38, 168 P. 957 (1917), where we held that a plaintiff, in equity and good conscience, should repay as a condition precedent to having a deed set aside and can-celled amounts paid by the grantee on the mortgage. We explained that ordinarily courts of equity before rescinding deeds, contracts or other instruments endeavor to place the parties to the transaction in their *108former positions and will not permit one of them to reap the benefit from the transaction. Another good example of the application of this rule (but based on an equitable lien theory) is found in Houston v. Mentelos, Fla.App., 818 So.2d 427 (1975). There the court found that a land owner’s signature on a warranty deed was obtained by misrepresentation. The grantee had meanwhile obtained a $55,000 mortgage loan on the property. The court set aside both the warranty deed and the subsequent mortgage, but gave the mortgagee an equitable lien for $20,936.72 which he had expended in satisfying liens which encumbered the property at the time of the conveyance. See generally 12A C.J.S. Cancellation of Instruments § 53, which states that the rule requiring restoration applies irrespective of the ground on which cancellation is sought, “be it for fraud, mistake, misrepresentation, duress, nonperformance, undue influence, or want of consideration.” In the instant ease, Majestic Mortgage, having paid from the proceeds of its mortgage loan some $86,700 to retire prior mortgages to which Mr. Horton had voluntarily subordinated his $30,000 equity interest, should have priority over Mr. Horton to the extent of that amount.

I would go further, however, and reverse the trial court’s judgment setting aside the quitclaim deed. I, therefore, dissent from the refusal of the majority to do so. Contrary to the majority opinion, the trial court did not find that Majestic Mortgage defrauded Mr. Horton into signing the quitclaim deed. Neither did the trial court find the existence of all the elements of fraud as stated by the majority. The finding of the court relating to the signing of the deed was that “when plaintiff signed said quitclaim deed, he was led to believe he was signing something other than the quitclaim deed.” It can hardly be contended that this constitutes a finding of fraud, with all its elements, on the part of Majestic Mortgage. Another finding states that the defendant Granite Title Company, which insured the mortgage executed to Majestic, did not know or have reason to know of the “fraudulent circumstances” surrounding the signing of said quitclaim deed. Again, that finding is conclusory and is completely devoid of a finding on the necessary elements of a fraud cause of action. Further, it fails to specify by whom and on whom the fraud was practiced. That finding apparently relates only to the cross claim of Majestic against Granite Title, although another finding characterizes Majestic’s conduct as “negligence.”

More importantly, Mr. Horton’s own testimony refutes any possible finding of fraud. He testified that he went to the office of Majestic Mortgage thinking that he was going to sign certain loan papers which would make a permanent loan out of the $51,000 loan he and his ex-wife had earlier made with Murray First Thrift. Mrs. Horton met him at the front door, and together they went into an office where she introduced him to Mr. Rohleder. They all sat down at a large desk and Mr. Horton was presented with papers to be signed. They talked a few moments, and he signed them. Mrs. Horton showed him where to sign and took them from him as he signed each one. He read only the paper on top, which he remembered as being a “loan paper.” He thought that paper had the figure $51,000 on it. He admitted that his signature was on the quitclaim deed, but he testified that he did not look at the upper part of the deed when he signed it.

He further testified that there was no conversation regarding a quitclaim deed or a third loan. He read only the top paper and was satisfied that it was a loan. He did not ask any questions of Mrs. Horton or of Mr. Rohleder. He had no conversation with Mr. Rohleder. When he signed the quitclaim deed, he remembered seeing his name typed beneath the signature line. He admitted that he had full opportunity to read any and all documents, but he did not read them because he had complete trust in Mrs. Horton. He further admitted that he was unconcerned with what the documents were. He did not then object to a loan against the property because the value of *109the home had increased and he felt secure even if a foreclosure resulted.

Mrs. Horton testified that when the second loan, or MFT loan, was obtained, she told him that she would later be getting a long-term loan. Soon thereafter she told him that she was getting a loan for $112,-000 because it had to be large enough to pay off the two existing loans. She was present with Mr. Horton when he signed the papers at Mr. Rohleder’s desk. She did not pay much attention to them, but sat back and let him sign. She wrote in his name in the acknowledgment section of the quitclaim deed.

The testimony of Mr. and Mrs. Horton simply does not support a finding of fraud on the part of Majestic. Instead, it portrays Mr. Horton as an unconcerned person who signed a paper or papers presented to him without anyone explaining them to him, without his asking any questions and without his reading them, although he had full opportunity to do so. Neither of them claimed that Majestic made any representations whatever to him as to what he was signing. This cannot be fraud. I would not set aside the deed.

I cannot agree with the statement in the majority opinion that somehow because Mr. Horton did not personally appear before the notary “that goes to and supports the finding of fraud.” Neither can I agree that the deed is defective beause the acknowledgment was not made before the notary at the time it was signed. A deed is valid between the parties thereto without an acknowledgment and as to all other persons who have had actual notice, U.C.A., 1953, § 57-1-6, et seq.; Murray v. Beal, 23 Utah 548, 65 P. 726 (1901). Furthermore, an acknowledgment may be made before a notary at any time subsequent to signing and does not need to be made contemporaneously with the signing. Section 57-2-1, et seq. The majority confuses acknowledgment with attestation. They are not the same act although they can be accomplished at the same time. Thus there is nothing about the acknowledgment in this case which aids the plaintiff.

As to the question of delivery of the deed, it is true that Mr. Horton testified that he did not ever have the intent to sign and deliver a quitclaim deed. However, in view of his testimony that he had every opportunity to read each and every paper that he signed, that no one said anything to him concerning the contents of the documents and that he asked no questions of anyone concerning them, he is not entitled to the equitable relief of cancellation of the deed because of his own negligence. Hennessy v. Holmes, 46 Mont. 89, 125 P. 132 (1912); Golle v. State Bank of Wilson Creek, et al, 52 Wash. 437, 100 P. 984 (1909); Powers v. Powers, 46 Or. 479, 80 P. 1058 (1905); Snelgrove v. Earl, 17 Utah 321, 53 P. 1017 (1898). If written documents are to have any sanctity at all in the law, courts should not set them aside because the signer did not read them nor ask for an explanation and then later contends that he had no intent to sign and deliver those documents.

STEWART, J., concurs in the concurring and dissenting opinion of HOWE, J. ZIMMERMAN, J., does not participate herein.