Opinion
November 21, 1924.
Arthur F. Engel, for the appellant.
Benjamin M. Freeman, for the plaintiff, respondent.
Eben H.P. Squire [ Farrington M. Thompson with him on the brief], for the respondent trust company.
The learned trial court has found that while the bond and mortgage in suit bear defendant's true signature, they were procured through the trick and device of her husband, and that at the time they were signed she neither knew the contents nor purport of the papers and did not intend to sign them as and for her bond and mortgage, but believed she was witnessing other papers. The evidence sustains these findings, but the Special Term has found for plaintiff and decreed foreclosure of the mortgage. The question presented for our determination is upon whom shall the loss fall by reason of the fraud of defendant's husband?
I cannot agree with the conclusion of the learned trial court. The doctrine laid down in Marden v. Dorthy ( 160 N.Y. 39, 58), and followed by this court in Caccioppoli v. Lemmo ( 152 App. Div. 650), to the effect that, where the defendant did not intend to execute the instruments upon which recovery is sought, no valid instruments result, but forgeries, for the consequences of which defendant may not be charged, is controlling in the case at bar. Plaintiff stands in the shoes of her assignor, the trust company, subject to all the equities existing between the original parties. ( Rapps v. Gottlieb, 142 N.Y. 164, 166.) The fact that defendant paid the interest under protest creates no estoppel against her ( Aronoff v. Levine, 105 Misc. 668, 674; affd., 190 App. Div. 172), and judgment should have been directed for the individual defendants.
The judgment appealed from should, therefore, be reversed on the law and the facts, with costs, and judgment decreed for defendants Hoffkins and Hebbard, directing that the record of said mortgage and assignment in the office of the register of the county of Westchester be canceled and discharged, with costs. Findings of fact 2, 3, 4 and 8, and conclusions of law 1 and 2 should be reversed, and defendants' proposed findings of fact 5, 6, 7, 8, 10, 11, 14, 15, 16, 18 and 19, and conclusions of law 2, 4, 6, 7, 9 and 11 found.
KELLY, P.J., JAYCOX, KELBY and YOUNG, JJ., concur.
Judgment reversed on the law and the facts, with costs, and judgment decreed for defendants Hoffkins and Hebbard, in accordance with opinion, with costs. Findings of fact 2, 3, 4 and 8, and conclusions of law 1 and 2, reversed, and defendants' proposed findings of fact 5, 6, 7, 8, 10, 11, 14, 15, 16, 18 and 19, and conclusions of law 2, 4, 6, 7, 9 and 11, found. Settle order on notice.