## Facts

- Hauck, a 44-year-old farmer with limited formal education, owned and operated farm land located partly in South Dakota and partly in North Dakota.
- Crawford and two associates approached Hauck about obtaining an oil and gas lease on Hauck’s land.
- Hauck agreed to lease the land for 25¢ per acre.
- The men prepared printed instruments in a car and presented them to Hauck on a board for signature; the forms contained fine print.
- Hauck was directed where to sign and was told the second signature was for another part of the lease; he believed he was signing only lease papers.
- The second instrument Hauck signed was a mineral deed conveying one-half of the minerals in his land to Crawford.
- Hauck received no copies of the instruments he signed.
- Within days, Crawford conveyed the mineral interest to White and Duncan; the conveyance was later recorded.
- Hauck sued to quiet title and to cancel the mineral deed and subsequent conveyances, alleging fraud.

## Issues

1. Whether procuring Hauck’s signature on a mineral deed by representing it as part of an oil and gas lease constituted fraud in the factum rendering the deed void as between Hauck and Crawford.
2. Whether White and Duncan, as subsequent grantees, took protected title as bona fide purchasers for value without notice, despite the void character of the deed between Hauck and Crawford.
3. Whether Hauck’s failure to read the instruments barred relief, either against Crawford or against subsequent purchasers.

## Decision

- The South Dakota Supreme Court reversed the judgment canceling the mineral deed and subsequent deeds.
- The court held that Crawford’s conduct amounted to fraud in the factum: Hauck was tricked into signing a different type of instrument than he believed, making the mineral deed void as between Hauck and Crawford.
- The court concluded that the interests of bona fide purchasers for value without notice (White and Duncan) could not be set aside on Hauck’s claim, so cancellation of their deeds was improper.

## Legal Principles

- Fraud in the factum occurs when a grantor is induced to sign an instrument of a fundamentally different character than the grantor believes; such a deed is void as between the original parties.
- A grantor’s negligence in signing without reading does not cure fraud in the factum between the grantor and the fraudulent grantee.
- A subsequent bona fide purchaser for value without notice may be protected against the grantor’s attempt to disaffirm, even where the original conveyance is void between the grantor and the fraudulent grantee.

## Conclusion

The court treated the mineral deed as void between Hauck and Crawford because Hauck was tricked about the nature of the instrument, but it protected the later conveyance to bona fide purchasers without notice and therefore reversed the cancellation of the subsequent deeds.


Hauck v. Crawford, 62 N.W.2d 92 (S.D. 1953)