Marden v. . Dorthy

This judgment should be reversed. Under the facts, as we must take them, it is a hard case of fraud practiced upon the plaintiff, whereby she was dispossessed of the title to her property, and, as between her and her grantee, doubtless the grant should be set aside. But a different principle operates, where it is sought to attack the rights of the mortgagees. Having in good faith loaned their moneys upon the faith of the record title of the mortgagors, they are entitled, in my opinion, to be protected. The plaintiff should be deemed to be bound by her act and to be estopped from denying it, as to them. Her signature to the deed is genuine and the notarial certificate of her acknowledgment is, also, genuine. The deed was, therefore, entitled to be recorded as a conveyance of real estate and, however open to attack as between the parties, surely the Recording Act may be relied upon to some extent by the bonafide mortgagee. Of course, we are bound by the facts, as found by *Page 61 the trial court and affirmed by the Appellate Division, and we must assume that the plaintiff's signature was procured by trickery and that she never intended to convey her property, and, also, that she did not acknowledge the deed before the notary; but those facts, as applied to the case of bona fide mortgagees, do not compel the legal conclusion that their mortgages should be set aside. They show that the plaintiff by her own act, however procured, enabled the Dorthys to offer the security of a record title for the loans of the appellants' moneys. The deed to them was not void. It was only voidable by force of the facts proved with respect to its making; but its avoidance could only be decreed, under generally settled rules, subject to the intervening equities of mortgagees in good faith. To hold otherwise, is to introduce the element of doubt and insecurity into transactions of enormous magnitude. It seems to me to be just such a case as is contemplated by the equitable rule, that, where one of two innocent parties must suffer from the perpetration of a fraudulent act, he who enabled the act to be done must suffer the loss. The facts, as found in favor of the plaintiff, serve only to make a case for the application of this rule.

I cannot think that it would be a safe precedent to set, to hold that a grantor of property may come into court and nullify the claim of a bona fide mortgagee, who has loaned his moneys upon the faith of a record title in the mortgagor, which is rendered vulnerable by reason of the deceit of the grantee in obtaining his deed. The sentimental view is as little just as it is legal.

From the fraud practiced upon her by her trusted son-in-law, the plaintiff and not the mortgagees should suffer, and, therefore, so far as the latter are concerned, this judgment should be reversed.