Wm. Fillmore Wood, J.c.c. (temporarily assigned).
This is a suit by a mortgagee against a notary public for alleged negligence and false representations in connection with the execution of mortgage papers, namely, the mortgage, bond and affidavit of title.
The significant facts are not in substantial dispute. Plaintiff agreed to lend the sum of $9,000 to a corporation by the name of Parkview Grill, Inc., which operated a restaurant in the Township of Union. The loan was negotiated by Constantine Jolas, president of the corporation. As security for the loan plaintiff demanded, and Jolas agreed to furnish, a mortgage executed by the latter's parents, John Jolas and Stella Jolas, on certain real estate owned by them. The mortgage documents were prepared by plaintiff's attorney, Harry Cuttler, now deceased. At the originally scheduled closing time, Jolas appeared at the attorney's office without his parents, claiming that his father was unable to appear because of illness. Thereupon Mr. Cuttler gave the documents to Jolas, with instructions to have them executed by his parents in the presence of a notary public.
Thereafter Jolas, accompanied by a man and a woman, called at the office where defendant (a notary public) is associated with his father, Robert P. Ostertag, in the real estate and insurance business. Defendant had been acquainted with Jolas for several years because Parkview Grill was an insurance customer and defendant had been to the restaurant on occasions to deliver insurance policies and had seen Jolas there. The man and woman were strangers to the defendant. Jolas introduced them as his father and mother and told defendant that they had some papers to sign and requested defendant to notarize the documents. They signed the documents
in defendant's presence. The woman, who (according to information given to defendant by Jolas) was unable to write, signed with an "X" as her mark. Someone (probably Jolas) wrote her name beside her mark. Defendant then executed the acknowledgment certificate on the mortgage, signed the bond as witness and executed the jurat on the affidavit.
The certificate of acknowledgment and the jurat were in the usual form. In the certificate defendant represented, among other things, that John Jolas and Stella Jolas, his wife, "personally appeared" before him and that he was "satisfied" that they were the mortgagors mentioned in the mortgage. In the jurat defendant asserted that the affidavit was "subscribed and sworn to" before him.
However, the man and woman did not actually swear to the truth of the contents of the affidavit. Defendant made no effort even to inform them of, or to find out whether they already knew, the nature or the contents of any of the documents they signed. In fact, there was no conversation whatsoever between them and defendant. They said nothing to him, and he said nothing to them. Nor was anything said by them or to them in defendant's presence.
In reliance upon the above documents as executed before defendant, plaintiff disbursed the proceeds of the loan.
There was a default in the repayment of the loan, and plaintiff attempted to foreclose the mortgage. It was then learned that the above mentioned man and woman were not in fact Jolas' parents. They were mere impostors who had apparently conspired with him to forge his parents' signatures. Their true identities were never ascertained by either plaintiff or defendant. When the forgeries were discovered, Jolas disappeared from this area, presumably to avoid criminal prosecution, and his present whereabouts is unknown. Consequently, he was not available to testify in these proceedings.
Plaintiff now seeks to recover from defendant the balance due on the loan. As already indicated, she charges defendant with negligence and false representations. The negligence
allegedly consisted of failure to exercise reasonable care to ascertain the identities of the persons who executed the documents, and failure to require such persons actually to swear to the truth of the contents of the affidavit. The alleged false statements are the ...