This legal case involves a dispute between Hauck, the respondent, and Crawford et al., the appellants, over the cancellation of a mineral deed and other deeds transferring mineral rights due to alleged fraud. The plaintiff, a farmer who owns and operates a farm in South Dakota and North Dakota, unknowingly signed a mineral deed that conveyed half of the minerals in his land to D.W. Crawford, which was then sold to the defendants White and Duncan. The trial court granted the cancellation, but the defendants have appealed, arguing that there was no fraud and that they were bona fide purchasers for value. The court did not determine whether White and Duncan knew about the circumstances under which Crawford obtained the deed, but ruled that they were bona fide purchasers for value.
The Houck case establishes that fraud in the factum or execution renders a contract void, even if the victim was negligent. The grantee under a void deed has no power to transmit title, and the deed is legally analogous to a forged deed. Recording statutes do not protect innocent purchasers under a void or forged deed if the true owner was not negligent or estopped. The plaintiff's negligence does not give validity to the deed, but a purchaser for value without notice may still prevail. The issue is whether the plaintiff was negligent when signing the deed without knowing it was a deed, and it is a question of fact to be determined by the trial court.
The court reverses the trial court's ruling that the plaintiff's signature was obtained through forgery and finds that it was the real signature of the plaintiff, obtained through false representation. All judges concur.
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