Wyllis v. Haun

Bothrock, J.

1. AqKNowüforged insmi•of officer for cale. I. The action was brought under Sec. 1961 of the Cpde, which provides that: “Any officer, who knowingly misstates a material fact in either of the certificates above contemplated, shall be liable for. all damages caused thereby, and may be indicted, and fined any sum not exceeding the value of the, property conveyed, or otherwise affected by the instrument on which such certificate is indorsed.”

The certificates referred to in this section are certificates of acknowledgments to deeds, conveyances; or other instruments in writing by which real estate is conveyed or incumbered. It does not appear in the evidence that the defendant, Haun, in making the certificate, acted corruptly, or that he was in any way a party to the forgery. The most that can be claimed is that he certified that Edwin K. Scranton was perT sonally known to him to be the person who executed the assignment, which was not true, and that he knew when he made the certificate that he had no personal acquaintance with said Scranton.

The evidence conclusively shows that the forgery and fraud was the result of a conspiracy between Bartlett and Edgitt. Edgitt was a young man of good character up to the time of this transaction. He had been a resident of the same place with the defendant Haun; had studied law, and been admitted to practice, and he and Haun had been for a .time law partners. He introduced Bartlett t,o. Haun under the assumed name of Scranton, on the same day ,or the day before the certificate was made. When Edgitt called upon Ilaun with Bartlett to have the acknowledgment taken he introduced Bartlett to another person as E. IL Scranton, and turned to Haun and said that he had an extensive acquaintance with Mr. Scranton some time .before. With this knowledge of the identity of the party Haun made the certificate, relying upon Edgitt, as he had always done before in business transactions.

If the defendant had made this certificate of acknowledgment to a conveyance of real estate under these circumstances,, upon the faith of which certificate a purchaser had paid his money and. suffered loss (it may be, but'the point we do not decide), a court would not be justified in arresting a judgment and - setting aside a verdict' against him. In such case the person, who accepts the conveyance, and acts upon it, has the right to; rely upon its genuineness. It is the very instrument which. confers title to the land, and if the deed be a forgery the damages are caused by the misstatement of a material fact in the certificate of acknowledgment.

But the assignment of a mortgage is an instrument of an-essentially different character. The mortgage is but a mere incident to the notes which it secures; the defendant can only ■ be held liable for the direct consequences of his willful misstatement in the certificate. It is true the plaintiff was induced to purchase the notes upon the faith that the assignment of the mortgage was genuine; but the defendant did not-certify that E. K. Scranton indorsed the notes, and he would not have been liable under the statute if he had done so,: because they are not instruments affecting real estate. The: legal effect of defendant’s certificate was to make him liable to, innocent purchasers of the mortgage only; his liability cannot be extended to include a loss because of a forged indorsement of the notes. The plaintiff’s loss was not caused by the defective certificate of acknowledgment to the mortgage. If he' had obtained title to the notes, the title to the mortgage would' have passed to him without any written assignment. “The assignment of the debt, it is conceded as a general rule, draws after it the mortgage, as a consequence, or appurtenant to it.” Pope & Slocum v. Jacobus, 10 Iowa, 262.

The converse of this, however, is not true. Suppose Bartlett had sent the notes to Scranton and retained the mortgage, and made this false and forged assignment and' sold it to the' plaintiff; the plaintiff would have- had no remedy against the officer who took the acknowledgment, because if the assign- ■ ment had been genuine he would have had no beneficial in-' terest, nothing but á mere naked trust. Pope & Slocum v. Jacobus, supra.

' The most that plaintiff can claim is that he inferred, from the certificate of acknowledgment, and the signature to the assignment of the mortgage, purporting to be that of Scranton, that the indorsement of the notes, in the same handwriting, was genuine. Haun should not be held liable for that inference.

The statute upon which the action is based is of a highly penal character. If the defendant be liable in a civil action, the same state of facts authorizes an indictment, and punishment; measured by the value of the property affected by the misstatement knowingly made. Liability under this statute should be held to include only such damages as are directly caused by the wrongful act, and necessarily connected with it. As the loss was occasioned by the plaintiff’s failure to obtain title to the notes, it cannot be said that this failure was caused directly by the defendant’s wrongful act.

In our opinion, as a question of law, the plaintiff cannot recover, and the court did not err in arresting the judgment, setting aside the verdict, and rendering judgment against the plaintiff for the costs.

Affirmed.