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Pear Street LLC v. 818 Pear Street, LLC

A-1494-09T2 (N.J. Super. App. Div. 2011) (Unpublished)

DEEDS; SIGNATURES — Signatures in a deed may be made on behalf of a person, such as by a rubber stamp, and that person need not be present at the time that the deed is signed.

An individual transferred property to a limited liability company of which she was the sole member. The member’s son, who was in the real estate business, was given the authority to use the principal’s signature stamp on checks. The mother would also regularly lend her son large sums of money for business dealings and personal reasons. She gave her son’s employees permission to stay at the subject property and allowed her son to rent out the property and retain the proceeds. Her son insured the property and paid the utilities. The son later committed suicide.

At a trial involving the son’s estate, the primary dispute concerned a deed that transferred ownership of the subject property from the mother’s limited liability company to a separate company owned by her son. The deed was recorded and filed in the clerk’s office, despite not having been dated or acknowledged by a notary public. The son’s administrative assistant at the time the deed was executed testified that the son had used his mother’s signature stamp to sign the deed and transfer the property to his company. When the son asked the assistant to witness the stamping, the assistant telephoned the mother and received permission. According to the witness, the mother told the assistant that the son had her authority to use the signature stamp to transfer the property.

The mother acknowledged that she allowed her son to rent the property and retain the proceeds, but denied ever authorizing the use of her signature stamp to sign a deed. She claimed she did not even learn the property had been transferred to her son’s company until she received a letter from the clerk’s office. At trial, however, evidence was introduced that her attorney was arguing wrongful conveyance even before she received the clerk’s letter. The lower court accepted, as credible, the assistant’s testimony that the mother authorized her son to use her signature stamp, noting that the assistant was not an interested party in the case. Then, the lower court upheld the deed based on a New Jersey statute allowing a signature in the form of a mark made on a document with a person’s authority. Additionally, the lower court noted that the parties acted as if a transfer had occurred, such as when the son was collecting rents.

On appeal, the mother argued that she needed to be present for her signature to be valid. In support, she cited the case upon which the state’s signature statute was based. The mother argued that the case used language indicating that a signature must be made in the presence of the named signer. The Appellate Division disagreed, finding instead that the grantor’s intent was far more important than the physical presence of the grantor. Further, the legislative commission responsible for the statute remarked at the time the statute was passed, that it contemplated signatures made on behalf of a person. If the legislature had intended to require physical presence of the signatory, it would have codified it. Because the Court deferred to the lower court’s credibility assessments, it affirmed the lower court’s holding.

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