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Forgery may be thought of as a variety of fraud, but the law does not treat a forged deed like a fraudulent deed that is not forged. A recent case from New York illustrates the difference.

Percy Gogins and Dorothy Lewis, brother and sister, inherited a house in Brooklyn from their mother; each owned a one-half interest. In May 2000, Lewis conveyed by quitclaim deed her half-interest in the property to her daughter Tonya Lewis. In February 2001, Tonya recorded a deed claiming to correct the prior deed from Lewis. The corrected deed was signed with the name of Percy Gogins and appeared on its face to transfer Gogins’s half-interest in the real property to Tonya, giving Tonya a full fee interest in the property. Gogins died in March, 2001.

Gogins’ daughter, Dorothy Faison, believed that her father’s signature on the corrected deed was a forgery. In 2002, she filed suit to have the forged deed declared invalid, but the suit was dismissed because Faison did not have standing to bring the suit because she was not administrator of the estate—her mother was. Her mother’s lawyer apparently assured Faison and her mother that he had obtained a judgment invalidating the deed. But nothing of the sort had happened: the lawyer, now disbarred, had lied. Tonya Lewis had fee simple title to the property, according to the property records. In 2009, Bank of America issued Lewis a mortgage loan of over $250,000, secured by a mortgage on the property

In 2010, Dorothy Faison was appointed administrator of her father’s estate, and learned that nothing had ever been done about the deed to Lewis that Faison believed was forged. As administrator of the estate, Faison now had standing to sue to seek to have the forged deed declared invalid, and so she sued once again.

Few rules of law are as black-and-white as the rule that a forged deed is invalid. The law treats a forged deed as if the deed never existed. The rule applies even to forged deeds to innocent purchasers who buy property at market price in arms-length transactions: courts will not allow such innocent purchasers to keep title to property under a forged deed, because the innocent purchaser never had title in the first place under the forged deed.

It follows, then, that a lender who takes a mortgage to a property subject to a forged deed is in the deepest of deep trouble: the mortgagor simply doesn’t have anything to mortgage, so the lender’s mortgage is invalid as well. So, if Faison proved to the court’s satisfaction that her father’s signature on the 2001 deed was forged, the outcome for the bank would seem to be clear: their mortgage would be wiped out.

Here, Bank of America had one last argument, however: that Faison (or, more precisely, her mother) was required to have brought the forgery claim within the six-year statute of limitations for fraud, and had failed to do so. To be sure, Faison and perhaps others had been aware of the alleged forgery for far longer than six years when she filed suit in 2010.

But the New York Court of Appeals—New York’s highest court—rejected Bank of America’s statute of limitations argument. Unlike fraudulent documents that are not forged—which are voidable at the option of a defrauded party, and therefore valid if the defrauded parties do not choose that option—a forged deed is void from the start, and cannot ever be revived, the Court ruled.  Faison will now get a chance to prove that the deed is forged, and if she can prove it, the deed is void, and Bank of America’s mortgage is void as well (although perhaps there will be another battle whether the mortgage should be effective as to Lewis’s 1/2 interest she obtained from her own mother).

Of course, in the real world, every courthouse likely has forged deeds on the record that have effectively conveyed interests. Where any witnesses who could prove a forgery are long gone, a forgery is safe from detection and the forged deed effectively becomes a good one. Marketable title acts also may possibly extinguish forgery claims beyond the marketable title period: the Uniform Marketable Title Act “frees the holder of marketable record title from adverse claims antedating his root of title, even if the root of title is a forgery.” And finally, there are some rare instances where the only person who can contest the forged deed had a hand in the forgery, and courts will not allow that person to contest the forged deed under doctrines of estoppel or unclean hands. So sometimes, nothing can turn into something, and a forged deed can eventually become a good deed.