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Monday, February 27, 2012

Amed Marzano & Sediva PLLC is an appellate law firm in New York City, and represents clients throughout New York & Connecticut. A short discussion on forged deeds follows.

A forged deed is void ab initio – from the beginning.

Where deeds are void, on the ground of absolute fraud, they are to be considered as void ab initio, and are not allowed to stand as security to the grantee, for advances he may have made, or responsibilities he may have entered into, on account of them. Where the grantor of a deed, made to defeat creditors, afterwards becomes a bankrupt, the grantee is accountable for the rents and profits, subsequent to the act of bankruptcy, or from the time when the right of the creditors to call him to account accrued, and not before.  Sands v. Codwise, 4 Johns 536, 536 [1808]

The Appellate Division, Second Department unambiguously avowed that “a deed based on forgery or obtained by false pretenses is void ab initio, and a mortgage based on such a deed is likewise invalid.”  GMAC Mortgage Corporation v. Chan, 56 A.D.3d 521, 522 [2nd Dept. 2008].  In GMAC, the property was owned jointly by three brothers.  One of the three executed a deed conveying the property to himself and one of his siblings leaving the third off the deed.  The two brothers sans the third then obtained a loan from GMAC secured by a mortgage on the subject property.  The Court refused to reverse the lower court’s denial of Plaintiff’s motion for summary judgment because there were triable issues of fact as to the validity of the deed and the subject mortgage.  The Court ruled that if the deed is forged then the mortgage based on this deed is invalid.

In Cruz v. Cruz, 37 A.D.3d 754 [2nd Dept. 2007], the same Court affirmed the lower court’s cancellation of a deed and mortgage when one sibling executed a deed conveying to himself a premises owned jointly by six surviving children of the decedent.  Milton Brown, the fraudulent signatory to the deed, inherited a one sixth interest in property left by his intestate parent.  Mr. Brown conveyed the entire plot to himself and obtained a loan secured by a mortgage on the property from defendant Long Beach Mortgage Company.  Mr. Brown died leaving title to the property in dispute. 

The First Department does not vacillate from this long standing precept of law.  In Wu v. Wu, 288 A.D.2d 104 [1st Dept. 2001], the Court held that a forged deed is void and conveys no title.  In an action to impose a constructive trust, Plaintiff Yin Wu alleged that his brother forged his name on a deed to property jointly held by them and fraudulently conveyed title to his estranged wife in exchange for her relinquishing her right to seek maintenance and child support.  The First Department reversed the motions court’s dismissal of plaintiff’s action;

A forged deed is void and conveys no title (citations omitted).  A person cannot be a bona fide purchaser through a forged deed since the forger has no title to convey in the first instance (citations omitted).  Real Property Law § 266 applies to fraud situations that are voidable, not those which are void such as here where a forged deed is alleged.  Wu v. Wu, 288 A.D.2d 104, 105 [1st Dept. 2001]


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