IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
FILED
February 7, 2000
Cecil Crowson, Jr.
IN RE: ) Appellate Court Clerk
) FOR PUBLICATION
HARRY CLARK MARSH and )
TRUDI JANETTE MARSH, )
) FILED: February 7,2000
Debtors, )
_________________________ )
) CERTIFIED QUESTION OF LAW
SUSAN R. LIMOR, TRUSTEE, ) FROM THE UNITED STATES
) BANKRUPTCY COURT, MIDDLE
Petitioner/Plaintiff, ) DISTRICT OF TENNESSEE
) (No. 398-04816-KL3-7)
v. )
)
FLEET MORTGAGE GROUP and ) NO. M1999-02578-SC-R23-CQ
BANK UNITED, )
)
Respondents/Defendants. )
For Petitioner/Plaintiff: For Respondents/Defendants:
SUSAN R. LIMOR MICHAEL GIGANDET
Nashville, TN Nashville, TN
OPINION
BIRCH, J.
I
Pursuant to Rule 23 of the Rules of the Supreme Court of
Tennessee,1 this Court accepted certification of the following
question from the United States Bankruptcy Court for the Middle
District of Tennessee:
Whether the omission of the official
notary seal in the acknowledgment on
a Tennessee deed of trust as
required by Tennessee Code Annotated
§ 66-22-110, renders the instrument
“null and void as to . . .
subsequent creditors . . . or bona
fide purchasers . . . without
notice” as provided in Tennessee
Code Annotated § 66-26-103.
After careful consideration, we conclude that the official seal of
the acknowledging notary public must be affixed to a deed of trust
if that instrument is to constitute notice to subsequent creditors
or bona fide purchasers. Because the deed of trust before us did
not bear the official notary seal, it does not constitute notice to
subsequent creditors and bona fide purchasers without notice.
1
The Supreme Court may, at its discretion, answer questions of
law certified to it by the Supreme Court of the United States, a
Court of Appeals of the United States, a District Court of the
United States in Tennessee, or a United States Bankruptcy Court in
Tennessee. This rule may be invoked when the certifying court
determines that, in a proceeding before it, there are questions of
law of this state which will be determinative of the cause and as
to which it appears to the certifying court there is no controlling
precedent in the decisions of the Supreme Court of Tennessee.
2
II
On May 27, 1988, Harry Clark Marsh and Trudi Janette
Marsh, the debtors, executed a deed of trust on property located in
Robertson County. The original lender-beneficiary of the deed of
trust was Dominion Bankshares Mortgage Corporation. Dominion
assigned the deed of trust and its related promissory note to
defendant Fleet Mortgage Group. The deed of trust and promissory
note are serviced by defendant Bank United. The notary public
attested to the execution of the deed of trust, but he failed to
affix his official seal.2 The deed was subsequently recorded
without a seal in the office of the Register of Deeds of Robertson
County.
On May 18, 1998, Harry and Trudi Marsh filed for Chapter
7 bankruptcy, and Susan R. Limor was appointed trustee. The Marshes
surrendered the property shortly thereafter, and they vacated the
mortgaged premises pursuant to their Statement of Intention.
On September 4, 1998, Limor filed an Adversary Complaint
in the United States Bankruptcy Court under 11 U.S.C. § 544 against
Fleet Mortgage and Bank United seeking to avoid the lien on the
debtor’s real property on the basis that an official notary seal
was missing from the acknowledgment of the deed of trust. Limor
and each defendant filed motions for summary judgment. In
addressing the cross-motions for summary judgment, the United
States Bankruptcy Court, on February 24, 1999, entered an order
2
Neither party contests the authenticity of the documents, the
signatures of the debtors, or the authority of the notary.
3
certifying the above question to this Court. As stated, we
accepted the certified question of law.
III
Limor contends that because the deed of trust lacked an
official notary seal, the acknowledgment is invalid under Tenn.
Code Ann. § 66-22-110. She insists, therefore, that the instrument
is null and void under Tenn. Code Ann. § 66-26-103 as to subsequent
creditors or bona fide purchasers without notice. On the other
hand, Fleet Mortgage and Bank United contend that an official
notary seal is not necessary for valid acknowledgment. The legal
effect of a deed of trust upon which the notary seal has not been
affixed is an issue of first impression in Tennessee.
In Tennessee, a deed of trust is a writing eligible for
registration. Tenn. Code Ann. § 66-24-101(8) (Supp. 1999).3 To
give full legal effect to the registration of a deed of trust, the
instrument must first be acknowledged. See Howard v. United
States, 566 S.W.2d 521, 527 (Tenn. 1978); Haynes v. State, 213
Tenn. 447, 450, 374 S.W.2d 394, 395 (1964).4 Acknowledgment serves
to authenticate the instrument for valid registration. In re
Spears, 39 B.R. 91, 96 (Bankr. E.D. Tenn. 1984). “To authenticate
an instrument for registration, its execution shall be acknowledged
3
Writing eligible for registration.--(a) The following
writings may be registered:
. . .
(8) All mortgages and deeds of trust of either real or
personal property.
4
See also In re Anderson, 30 B.R. 995, 1002 (M.D. Tenn. 1983)
(“[W]here the conditions precedent to recording--such as a proper
acknowledgment--have not been met, the instrument was ‘not entitled
to registration although it was spread on the books of the
register’s office.’”) (emphasis in original and citations omitted).
4
by the maker . . . or proved by two (2) subscribing witnesses.”
Tenn. Code Ann. § 66-22-101 (1993). If the individual executing
the instrument resides in Tennessee, the acknowledgment may be made
before a notary public. Tenn. Code Ann. § 66-22-102 (1993).5 An
acknowledgment taken before a notary public must be made under the
notary’s “seal of office.” Tenn. Code Ann. § 66-22-110 (1993).6
Our analysis begins with the language of the pertinent
statute. Tennessee Code Annotated § 66-22-110 requires that “[a]ll
acknowledgments shall be under the seal of office of the officer
taking same.” Tenn. Code Ann. § 66-22-110 (1993). In addition,
Tenn. Code Ann. § 8-16-302 authorizes a notary public “to
administer oaths, to take depositions, to qualify parties to bills
in chancery and to take affidavits.” In “all such cases the notary
public’s seal shall be affixed.” Tenn. Code Ann. § 8-16-302
(1993).
When a statute is without contradiction or ambiguity,
there is no need to force its interpretation or construction, and
courts are not at liberty to depart from the words of the statute.
Hawks v. City of Westmoreland, 960 S.W.2d 10, 16 (Tenn. 1997).
Moreover, if “the language contained within the four corners of a
statute is plain, clear, and unambiguous, the duty of the courts is
simple and obvious, ‘to say sic lex scripta, and obey it.’” Id.
(quoting Miller v. Childress, 21 Tenn. (2 Hum.) 320, 321-22
5
Persons authorized to take acknowledgments within state.--If
the person executing the instrument resides or is within the state,
the acknowledgment shall be made before the county clerk, or
legally appointed deputy county clerk, or clerk and master of
chancery court of some county in the state or before a notary
public of some county in this state.
6
Acknowledgments under seal.--All acknowledgments shall be
under the seal of office of the officer taking same.
5
(1841)). Therefore, “[i]f the words of a statute plainly mean one
thing they cannot be given another meaning by judicial
construction.” Henry v. White, 194 Tenn. 192, 198, 250 S.W.2d
70,72 (1952).
Reading Tenn. Code Ann. §§ 8-16-302 and 66-22-110 in pari
materia, it appears that every act a notary is statutorily
empowered to perform requires the affixation of the notary’s
official seal. Therefore, under Tenn. Code Ann. § 66-22-110, an
instrument which does not bear a notary’s seal is not properly
acknowledged.
This conclusion is supported by reference to the purpose
of an acknowledgment, the role of the notary, and the reason for
requiring the notary’s official seal. An acknowledgment, as
required by Tenn. Code Ann. § 66-22-101, serves to authenticate an
instrument for registration. The acknowledgment “authenticates the
due execution of a document and is the formal statement of the
person signing the document that his [or her] signature was freely
done.” D. T. McCall & Sons v. Seagraves, 796 S.W.2d 457, 463
(Tenn. Ct. App. 1990). Moreover, the acknowledgment aids in
ensuring that the instrument was not fraudulently executed. In re
Grable, 8 B.R. 363, 364 (Bankr. E.D. Tenn. 1980).
A notary public is one of the individuals statutorily
empowered to take oaths and acknowledgments. Tenn. Code Ann. § 66-
22-102 (1993). A notary is a public official of the state of
6
Tennessee,7 elected by the county legislature,8 and commissioned by
the governor. Tenn. Code Ann. § 8-16-102 (1993). When discharging
his or her duties, a notary public does so under oath that he or
she “will, without favor or partiality, honestly, faithfully, and
diligently discharge the duties of notary public.” Tenn. Code Ann.
§ 8-16-105 (1993). The acts of a notary public are thus presumed
to be performed correctly. Manis, 98 S.W.2d at 314 (citing
Caruthers v. Harbert, 45 Tenn. (5 Cold.) 362, 367 (1868)).
When certifying an act, a notary must affix his or her
official seal. Tenn. Code Ann. § 8-16-301 (1993); Tenn. Code Ann.
§ 66-22-110 (1993). The affixation of the notary’s seal provides
prima facie proof of a notary’s official character or, simply
stated, that the notary is a notary.
The acknowledgment of a deed of trust before a notary and
the affixation of a notary’s seal authenticates the instrument.
“In layman’s terms, a notary public’s certificate means a great
deal more than the ‘Good Housekeeping Seal of Approval.’” Beazley
v. Turgeon, 772 S.W.2d 53, 59 (Tenn. Ct. App. 1989). When a notary
takes an acknowledgment it “says to the world that the execution of
the instrument was carried out according to law.” Id.; see Figures
v. Fly, 137 Tenn. 358, 370, 193 S.W. 117, 120 (1917) (“The
function[] of a notary public [is] not to be lightly assumed[.] A
[notary’s] certificate of acknowledgment is an act which must in
the nature of things be relied on with confidence by [persons] of
business.”).
7
See Krueger v. Miller, 489 F. Supp. 321, 328 (E.D. Tenn.
1977); see also Manis v. Farmers Bank of Sullivan County, 170 Tenn.
656, 659-60, 98 S.W.2d 313, 314 (1936)(citation omitted).
8
Tenn. Code Ann. § 8-16-101 (1993).
7
A creditor or purchaser who examines a deed of trust
should be able to assume that if it contains an acknowledgment to
which a notary’s seal is affixed, then it has been properly
authenticated and is valid, that is, free from apparent forgery or
fraud. This is a legitimate assumption given the purpose of an
acknowledgment, the role of a notary, and the purpose of the
notary’s seal. Without a notary’s seal, however, the creditor or
purchaser may be unsure as to the validity of the instrument.
A legally registered deed of trust places subsequent
creditors and purchasers on constructive notice. Tenn. Code Ann.
§ 66-26-101 (1993);9 Tenn. Code Ann. § 66-26-102 (1993);10 see also
Blevins v. Johnson County, 746 S.W.2d 678, 684 (Tenn. 1988)
(quoting Moore v. Cole, 200 Tenn. 43, 51-52, 289 S.W.2d 695, 698
(1956)). In order for an instrument to be legally registered, it
must bear evidence of proper acknowledgment. See In re Anderson,
30 B.R. at 1001 - 1002. If, however, the deed of trust was
improperly acknowledged, and therefore not legally registered, it
is only effective between the “parties to the same, and their heirs
and representatives.” Tenn. Code Ann. § 66-26-101 (1993).
Moreover, a deed of trust “not so proved, or acknowledged and
registered, or noted for registration, shall be null and void as to
existing or subsequent creditors of, or bona fide purchasers from,
the makers without notice.” Tenn. Code. Ann. § 66-26-103 (1993).
9
Effect of instruments with or without registration.--All of
the instruments mentioned in § 66-24-101 shall have effect between
the parties to the same, and their heirs and representatives,
without registration; but as to other persons, not having actual
notice of them, only from the noting thereof for registration on
the books of the register, unless otherwise expressly provided.
10
Notice to all the world.--All of such instruments so
registered shall be notice to all the world from the time they are
noted for registration, as prescribed in § 8-13-108; and shall take
effect from such time.
8
Therefore, a deed of trust which is improperly acknowledged because
it lacks an official notary’s seal is not legally registered and is
null and void as to subsequent creditors or bona fide purchasers
without notice under Tenn. Code Ann. § 66-26-103.
Fleet Mortgage and Bank United suggest that even though
the deed of trust in question does not bear a notary’s seal, the
instrument is in compliance with all other statutory requirements
for the acknowledgment of a registerable instrument. Because the
acknowledgment substantially complies with the statutory
requirements, they insist that the deed of trust is properly
acknowledged and thus legally registered.
Tennessee courts have found that when an acknowledgment
varies from the statutory form in one respect, but is in compliance
with all other statutory requirements, the acknowledgment has
substantially complied with the acknowledgment statutes. In re
Anderson, 30 B.R. at 1001-02; Hughes v. Powers, 99 Tenn. 480, 485,
42 S.W. 1,2 (1897); Davis v. Bogle, 58 Tenn. 315, 316-17 (1872).
These cases, however, generally involve a defect in language.
Specifically, the language used in the acknowledgment differed from
the language required by the statute, or words required by the
statute were omitted. Nonetheless, the language used was found to
be equivalent to the statutory language or it was determined that
the omission of a statutory word or phrase did not substantively
affect the acknowledgment. Hughes, 42 S.W. at 2; Davis, 58 Tenn.
at 316-17.
The defect in the acknowledgment here is more substantial
than the simple omission of statutory language or the use of a
9
different, yet equivalent, word. Tennessee Code Annotated § 66-22-
110 is clear--a seal is statutorily required for proper
acknowledgment. Moreover, this is not a case where another word or
phrase could have been substituted as the substantive equivalent to
the language required by statute. A seal is either affixed or not
affixed; this requirement is not subject to substantial-compliance
analysis. Finally, given the purpose of a notary seal, its
omission from a deed of trust is fatal to the proper acknowledgment
of an instrument.
IV
We answer the question certified by the United States
Bankruptcy Court for the Middle District of Tennessee as follows:
The omission of an official notary
seal in the acknowledgment on a
Tennessee deed of trust, as required
by Tennessee Code Annotated § 66-22-
110, renders the instrument “null
and void as to . . . subsequent
creditors . . . or bona fide
purchasers . . . without notice” as
provided in Tennessee Code Annotated
§ 66-26-103.
The clerk will transmit this opinion in accordance with
Rule 23, § 8 of the Rules of the Supreme Court. The costs in this
Court will be taxed to the petitioner, Susan R. Limor.
______________________________
ADOLPHO A. BIRCH, JR., Justice
CONCUR:
Anderson, C.J
Drowota, Holder, Barker, JJ.
10