State v. Ogden

• Decision Date: 11 January 1915
• Docket Number: No. 11324.,11324.
• Parties: STATE ex rel. MATTER v. OGDEN et al.
• Court: Missouri Court of Appeals

172 S.W. 1172

187 Mo. A. 39

STATE ex rel. MATTER v. OGDEN et al.

No. 11324.

Kansas City Court of Appeals. Missouri.

January 11, 1915.

Rehearing Denied February 1, 1915.

1. NOTARIES (§ 11) — LIABILITY ON OFFICIAL BOND — CONTRIBUTORY NEGLIGENCE — STATUTE.

A notary, whose surety bond was conditioned for the performance of his duties "according to law," represented to relator that a customer wanted a loan of $1,800 on the security of certain land, presented an abstract of title, a note for $1,800 purporting to be signed by one H. and wife, who were fictitious persons, and a deed of trust written by himself, regular on its face, but describing his own land, worth not over $600, which he had signed with the names of H. and wife, to which he had attached a false notarial certificate of acknowledgment before himself, and received relator's check for $1,800 and cashed it at the bank of which he was president, and in which relator had that amount on deposit, and thereafter became insolvent. Rev. St. 1909, § 10178, authorizes notaries to take acknowledgments of deeds, etc., and to certify the truth under their seals as to all matters officially done by them, and section 10181 requires them to give a bond, which "may be sued on by any person injured." Held, that the law made the notary's certificate evidence of the fact therein that relator had a right to rely on the certificate of acknowledgment done under color of office, and that the notary and his surety were liable for relator's loss.

2. NOTARIES (§ 11) — LIABILITY ON OFFICIAL BOND — CAUSE OF LOSS.

In such case, where it appeared that relator examined the deed of trust to see if it was acknowledged, and that, if the notary's certificate had not been thereon, he would not have handed over his money, the fraudulent certificate, rather than the notary's personal acts and representations, was not only a cause of relator's loss, but was the proximate cause thereof, even though relator may have believed other statements made by the notary; and the fact that the names which the notary signed to the note and deed of trust were those of fictitious persons did not prevent the false certificate from being the proximate cause of loss, since, if the certificate had not been on the deed, relator would not have lent his money, and since, if the purported grantors had existed, they would not have been bound by the deed.

3. PRINCIPAL AND SURETY (§ 59) — SURETY COMPANIES — CONSTRUCTION OF CONTRACT.

Though the rights of an ordinary surety are considered to be strictissimi juris, contracts of suretyship made by surety companies are construed as are contracts of insurance.

Appeal from Circuit Court, Henry County; C. A. Calvird, Judge.

Proceeding by the State of Missouri, on the relation of Joseph Matter, against John Ogden and the American Surety Company of New York. Judgment for relator, and he appeals. Reversed and remanded.

Parks & Son, of Clinton, for appellant. Robert F. Porter, of Kansas City, and James D. Lindsay, of Clinton, for respondents.

TRIMBLE, J.

This action is upon the official bond of the defendant John Ogden, who, as a notary public, certified a fraudulent acknowledgment to a deed of trust forged by him. His codefendant, the American Surety Company, is the surety on said bond.

Relator is a German 56 years of age, without business training or experience, except in farming, and resides on his farm not far from the town of Deepwater, in Henry county, Mo. The said John Ogden, at the time of the certificate of which relator complains, was, and for some years prior thereto had been, a leading and respected citizen in said town, and president of the Farmers' Bank of Deepwater. He was also, and had been for years, a notary public, and engaged in the real estate, insurance, and loan business.

Relator had $1,800 on deposit in said bank. Ogden, knowing this, went to relator's home and told him he had a customer named Harvey who owned a certain 80 acres of land in St. Clair county worth $4,000, situated 2½ miles southeast of the farm of one Stehwein, about 14 miles from where relator lived. (Relator was well acquainted with the value of farming lands in that neighborhood knew they were worth from $40 to $50 per acre, and that they were good tillable soils.) Ogden further told relator that his customer, Harvey, had an eastern loan on his farm which was about to fall due, and that he wanted to pay it off by getting a new loan, and, as he (Ogden) knew relator had money in the bank, he, on behalf of said customer, applied to relator for a loan on the land.

Later Ogden returned with a note for $1,800 payable to relator, due two years after date, bearing 6 per cent. interest, and purporting to be signed by James Harvey and Mary Harvey. He also brought with him a deed of trust, written by him, which was in every way regular on its face. It purported to be from James Harvey and Mary Harvey, his wife, to John A. Grob, trustee for Joseph Matter, conveying 80 acres of land in St. Clair county, Mo., described as the south half of the northeast quarter of section 14, township 39, range 24, given to secure said $1,800 note, and referring to it in apt and proper terms. The certificate of acknowledgment was in the form required by law, and was signed by John Ogden as notary public under his official seal. He turned the note and deed of trust over to relator. He also showed relator an abstract of title which he had in his pocket, and told relator he had prepared the papers for the loan of which he had theretofore spoken. Relator was not "scholar enough," as he says, to know a piece of land by a description in the terms of a government survey, and therefore could not tell whether or not the description contained in the deed described the farm Ogden had specified as the one on which the loan was to be made, nor could he tell "one thing from another in the abstract," never before having made a loan or transacted business of that nature. He had no suspicions about it, however, but readily took Ogden's word that the land was the farm he had in mind near that of his old friend Charles Stehwein, and that everything was all right. He did, however, examine the note and deed of trust and saw the signatures to them and that the deed of trust was acknowledged before Ogden as notary public.

Ogden allowed relator to keep the note, but retained the abstract and deed of trust for the purpose of recording the latter and having it shown on the former. Relator thereupon drew his check on the Farmers' Bank of Deepwater for $1,800, which Ogden cashed. All this occurred about or near the date of the note and deed of trust, October 8, 1912. About Thanksgiving thereafter, Ogden was arrested for forgery, and was afterwards sent to the penitentiary. The deed of trust was never recorded by Ogden, but was found among his personal effects, and it and the note were introduced in evidence.

It was admitted at the trial that no such persons as James Harvey and Mary Harvey existed; that they were fictitious persons; that the signatures to the papers were forged by Ogden; and that his certificate as notary public that they personally appeared before him as notary, and were known by him to be the persons described in and who executed the said deed of trust and acknowledged it as their free act and deed, was false. It was also admitted that said Ogden was wholly insolvent.

The only answer filed was on the part of the defendant the American Surety Company. This was a general denial, coupled with a plea of contributory negligence, in that relator failed to make any examination of the title to the land, and failed to make any investigation as to whether the Harveys owned the land or were in existence, and also failed to make any investigation as to the character, location, or value of the land described in the deed of trust. Defendant set up that such examination and investigation would have disclosed that the land was not owned by the Harveys, and that they were fictitious persons; that the land described in the deed of trust was not the land relator had in mind and specified to him, and was not anywhere in the neighborhood of the locality 2½ miles southeast of Stehwein, and was rough, broken, and unimproved land, not worth above one-third of the amount lent by relator; that the land described in said deed of trust was in reality owned by defendant Ogden and another; that an investigation would have disclosed such facts to relator, and their discovery would have prevented the loss. The answer further set up that the acts which caused the loss were the acts of John Ogden in his individual capacity and not as a notary. The reply put in issue the new matter set up in the answer.

The case was tried before the court without a jury. At the close of the trial, the defendant surety company asked a peremptory instruction that plaintiff was entitled to nominal damages only as against it. The trial court adopted this theory and gave effect to the instruction by rendering judgment for plaintiff against Ogden for $1,800, but only for $1 and the costs against the surety company. Thereupon relator...