Medlin v. Buford

• Decision Date: 27 November 1894
• Citation: 20 S.E. 463,115 N.C. 260
• Court: North Carolina Supreme Court
• Parties: MEDLIN. v. BUFORD et al.

20 S.E. 463

115 N.C. 260

MEDLIN.

v.BUFORD et al.

Supreme Court of North Carolina.

Nov. 27, 1894.

Validity of Mortgage —Fraud—Bona Fide Purchaser.

Where a person who has a good education executes a mortgage without reading it, or requesting that it be read, supposing that it is a "lien" of some kind different from a mortgage, and is induced to execute it by the false representation of a third person that it is not a mortgage, and that they "could do away with it in 30 days, " the mortgage is not void in the hands of an innocent purchaser.

Appeal from superior court, New Hanover county; Connor, Judge.

Action by J. T. Medlln against Mary Buford and others to foreclose a mortgage. From a judgment for defendants, plaintiff appeals. Reversed.

J. D. Bellamy, Jr., for appellant.

T. W. Strange, for appellees.

SHEPHERD, C. J. The first question to be considered is whether the mortgage executed by the defendants to the plaintiff is absolutely void by reason of fraud in the factunt If such be the case, it would be immaterial whether the plaintiff is an innocent party, since, the deed being a nullity, no rights could be asserted under it in favor of any person whomsoever. It is this very serious consequence which influences the courts to adhere strictly to the old and well-settled principle applicable to cases of this character, and, tested by these, we have but little difficulty in reaching the conclusion that the fraud in the present instance was in the representation or treaty, and not in the factum. A deed made by reason of this species of fraud is often said to be void, but it will be found upon examination that this term is indiscriminately used in connection with any deed that may be avoided either at law or in equity. But, as is said In Somes v. Brewer, 2 Pick. 191, the distinction between void and voidable deeds becomes highly important in its consequences to third persons, "because nothing can be founded upon a deed that is absolutely void, whereas from those which are only voidable fair titles may flow." The distinction is clearly drawn in McArthur v. Johnson, Phil. (N. C.) 317. In that case a person proposed to convey a tract of land in trust, and his brother undertook to have the deed drawn, but, without the knowledge of the vendor, inserted therein a conveyance also of another tract in trust for himself, and upon presenting the deed for execution, in reply to a question by the vendor, said that it was "all right, " whereupon the latter executed it without reading it or hearing it read. It was held that the conveyance was valid at law, there being no fraud In the factum. The court after giving the surreptitious substitution of one deed for another, and the false reading of a deed upon request to a blind or illiterate person, as examples of fraud in the factum, then proceeds to speak of what is meant by fraud in the representation or treaty. "In all of the cases it will be seen that the party knowingly executes the very instrument which he intended, but Is induced to do so by means of some fraud in the treaty, or some fraudulent representation or pretense. In this category is included the case of a man who can read the instrument which he signs, seals and delivers, but refuses or neglects to do so. Such a man is bound by the deed at law, though a court of equity may give relief against it." The opinion quotes with approval the following language from 1 Shep. Touch. 56: "If the party that is to seal the deed can read himself, and doth not, or, being an illiterate or a blind man, doth not require to hear the deed read or the contents thereof declared, in these cases, albeit the deed be contrary to his mind, yet it is good and unavoidable at law, but equity may correct mistakes, frauds, " etc. In 3 Washb. Real Prop. 252, it is said: "But, if the party can read, it is not open to him after executing it to insist that the terms of the deed were different from what he supposed them to be when he signed it * * * And one who executes a deed cannot avoid it on the ground of ignorance of its legal effect The rule on the subject is thus stated: 'A deed cannot be avoided in a court of law except for fraud in its execution, or other fraud or imposition practiced upon the grantor in procuring his signature and seal, —a fraud which goes to the question whether the deed ever had any legal existence.' The law does not reach the cases of deeds procured by undue influence over the grantor, if he be of legal capacity. The...