Brief Fact Summary. Brother Rolf forged his brother Klaus’s signature on a deed and then sold that property Stonier. Klaus brought suit to quiet title upon learning of the forgery. Stonier claims Klaus should be estopped from doing so.
Synopsis of Rule of Law. A person needs actual or constructive knowledge that a forgery occurred in order to have waived his right to claim forgery or to have ratified such actions. In order to be estopped from claiming forgery that particular party must have been part of representations made to injured party.
Issue. Whether a person should be estopped, waives his claim, or ratifies a forgery of a real estate transaction when he agrees to sell the property and failed to take timely action to quiet title.
Held. No. When a deed is void due to a forgery it creates no legal title and anyone claiming protections under that deed will not be afforded any. Stonier and Wihlborgs conceded that the deed was a forgery by Klaus’s brother; however, they claim that Klaus either waived his rights or should be estopped due to untimely action. The elements of estoppel are; when a party makes representation of a material fact to a party, and then later asserts facts that are contrary to that representation, reliance of that representation, and the injured party detrimentally changes his or her position due to such reliance. Here there were no representations made by Klaus to either party, and there is no evidence that when Klaus signed the agreement that he knew his brother had forged the deed. The elements of waiver are; the existence at the time of waiver of a right, privilege, advantage or benefit to be waived, actual or constructive notice of that right, and intention to relinquish that right. Klaus possibly should have investigated once the realtor told him there was a problem but he left immediately for Germany and investigated the matter upon his return. Therefore he did not make any waiver or his rights. The court holds that because Klaus did not know about the forgery he could not possible have ratified such. Ratification requires; full knowledge of all material facts, and makes an affirmative showing or his express or implied intent to adopt such actions, which didn’t occur here.
If the mortgagee, though he does it passively, suffers another to purchase and expend money on land under an erroneous opinion of the title without making known his claims, he shall not afterwards be permitted to exercise his legal rights against such purchaser.View Full Point of Law