Opinion ID: 889153
Heading Depth: 1
Heading Rank: 7

Heading: Ratification of Forged Deeds

Text: ¶ 31 Relying primarily on the dissenting opinion in Johnstone v. Sanborn, 138 Mont. 467, 501, 358 P.2d 399, 416 (1960) (a void transfer is, in effect no transfer. A void deed is, in effect no deed. Such a deed is a nullity ab initio. ), Sherick argues that because forged deeds are void ab initio, they effectively do not exist and cannot be ratified. Erler responds that Sherick has not submitted any controlling Montana law which forecloses the possibility that forged deeds can be subject to ratification. In his reply brief, Sherick also offers Hames v. City of Polson, 123 Mont. 469, 215 P.2d 950 (1950), and In re Estate of Griffin, 248 Mont. 472, 812 P.2d 1256 (1991), which made similar statements to those made in the Johnstone dissent. ¶ 32 Hames involved a lease entered by the City of Polson without legal authority, about which the Court concluded that [c]ontracts made in violation of express statutes are contrary to public policy and absolutely and wholly void and of no legal effect. Hames, 123 Mont. at 484, 215 P.2d at 958. The Hames Court added that [a] void contract is no contract at all; it binds no one and is a mere nullity.... It requires no disaffirmance to avoid it and it cannot be validated by ratification. Hames, 123 Mont. at 484, 215 P.2d at 958 (quotation omitted). The purpose of the Court's reference to ratification is unclear, as the opinion does not explain what ratification argument was offered by the City. Regardless, this apparent rejection of the ratification doctrine, facially inconsistent with our longstanding case law, must be viewed in the context of that case, which involved a contract entered in violation of statute. Understandably, ratification cannot validate a contract which would be illegal in any event. ¶ 33 In Estate of Griffin, a surviving spouse, the personal representative of the Estate, entered an agreement on behalf of her minor daughter, an heir, to sell the daughter's interest in an estate business to Appellant, another heir, prior to appointment of the surviving spouse as her daughter's conservator. After being appointed conservator, the surviving spouse sought to withdraw from the agreement, and Appellant argued that her conduct following her appointment as personal representative demonstrated that she had ratified the agreement. The Court rejected Appellant's argument, concluding that because the surviving spouse had no authority to enter the contract on behalf of her minor child prior to her appointment as conservator, the agreement was thus void at its inception. Estate of Griffin, 248 Mont. at 476, 812 P.2d at 1258. Citing the broad language of Hames, the Court concluded that [t]he contract here is void, hence there can be no material fact issue concerning its ratification. Estate of Griffin, 248 Mont. at 476, 812 P.2d at 1258-59. ¶ 34 Without re-deciding the case here, we question whether Estate of Griffin properly applied the doctrine of ratification. At a minimum, Estate of Griffin did not involve a contract which would have remained illegal even if subsequent actions could be said to have ratified it, as in Hames. The Appellant had asserted that the surviving spouse's conduct following her appointment as conservator, after she had obtained appropriate authority, had ratified the contract. As noted above, contracts involving forged signatures have likewise been entered without proper authority, yet courts have commonly concluded that such contracts could be subsequently ratified. In any event, the facts in Estate of Griffin differ substantially from the facts of this case, and the law governing the documents at issue also differs, and we conclude that Estate of Griffin does not control the outcome here. Likewise, we do not find Hames' rejection of ratification to be dispositive here. Neither case involved a forged deed which the original grantor allegedly ratified at a later time. ¶ 35 Though none of our cases have involved a forged deed, other courts faced with the issue have generally accepted ratification of the forgery. See Zurstrassen v. Stonier, 786 So.2d 65 (Fla.App. 4 Dist.2001) (estoppel, waiver, and ratification are all defenses to a deed voided because of forgery); Hockett v. Larson, 742 F.2d 1123, 1125 (8th Cir.1984) (waiver and ratification [are] available in a case involving a forged deed); see also Robert G. Natelson, Modern Law of Deeds to Real Property § 15.2, 394 (Little, Brown & Co. 1992) ([a] grantor may make a deed with an unauthorized signature effective by ratifying it.) In Zurstrassen, the property owner, Klaus, brought an action to quiet title and for rescission after discovering that his brother, Rolf, had forged a deed transferring Klaus's interest in the property to himself, which he later sold to a subsequent bona fide purchaser for value, David Stonier (Stonier). Stonier then sold the property to the Wihlborgs. Klaus claimed that the deed was a forgery and instituted suit to quiet title to the property. The lower court granted summary judgment for Stonier, and Klaus appealed. The appellate court determined that the forged deed was void and thus created no legal title and afforded no protection to those claiming under it. However, the court also determined that equitable estoppel principles apply, even to void deeds. Zurstrassen, 786 So.2d at 68. The court held that the issue of ratification is one of fact, and if a party knows of a fraud, does not reject it, and takes any material act inconsistent with an intent to avoid it or delays in asserting any remedial rights, then that party ratifies the fraud. Zurstrassen, 786 So.2d at 71. The court concluded that the issues of estoppel, waiver, and ratification precluded the lower court's summary judgment ruling, because material issues of fact existed as to all three. ¶ 36 Similarly, in Ferguson v. Golf Course Consultants, Inc., 243 Ga. 112, 252 S.E.2d 907 (1979), the Georgia Supreme Court explained that equity may regard the conduct of an individual whose signature is forged as ratification of the signature. There, Ferguson's agent, Ullman, signed Ferguson's name on an instrument authorizing the conveyance of land. Ferguson, aware of the sale, deposited the money into his bank account and spent a portion of the proceeds. Ferguson later brought suit to quiet title, arguing the forgery had voided the deed. Affirming the lower court's grant of summary judgment against Ferguson, the Georgia Supreme Court held that [e]quity will regard the actions of Ferguson in knowingly consenting to the sale in return for financial benefits as a ratification of the signature of Ullman on the deed. Ferguson, 252 S.E.2d at 908. In sum, the court permitted ratification of a forged deed. ¶ 37 We are not persuaded by Sherick's argument that a forged deed cannot be ratified as a matter of law. Though this particular ratification issue has not previously been addressed in Montana, we have broadly applied the principle with respect to contracts. While acknowledging that void contracts do not legally exist and transfer no rights, we have nonetheless permitted ratification of such contracts. There is clear support from other authorities, cited above, that forged deeds may subsequently be ratified. Principles of equity and justice compel recognition of ratification in order to provide a legal remedy in the appropriate case. Consequently, we conclude that ratification of a forged deed may properly be considered in equity. Accordingly, we turn to the three alternative arguments Sherick raises in challenge to the District Court's conclusion that the void deeds here were properly ratified.