Figuers v. Fly

• Decision Date: 10 March 1917
• Citation: 193 S.W. 117,137 Tenn. 358
• Parties: FIGUERS v. FLY ET AL.
• Court: Tennessee Supreme Court

193 S.W. 117

137 Tenn. 358

FIGUERS v. FLY ET AL.

Supreme Court of Tennessee.

March 10, 1917

Appeal from Chancery Court, Maury County; W. S. Bearden, Chancellor.

Suit by H. P. Figuers against W. M. Fly and others. Decree for complainant, and defendants appeal. Decree modified.

WILLIAMS J.

The bill of complaint was filed to hold liable the several defendants for the amount of a check, $1,000, drawn in favor of W. D Bryant and delivered by complainant Figuers in a loan by him of funds purportedly made to one W. D. Bryant and secured by a deed of trust on the lands of the latter.

W. D Bryant is an ex-Confederate soldier, aged 76 years, who resides in Maury county, about 18 miles from Columbia, the county seat. He owns a farm of about 64 acres, of value from $2,500 to $3,000. Two sons, J. G. Bryant and E. M. Bryant, both young men of legal age, were members of his family, and the sons and the father stood high in the regard of their community.

J. G. Bryant became involved in sawmilling transactions, and fell into devious practices. There is more than an intimation in the record that another person who was in his employ at the time, one Morris, since deceased, was used as an aid in his schemes which involved frauds and forgeries, which schemes proved easier of consummation because of the family's reputation for probity and because of J. G. Bryant's own apparent unsophistication. Without being a practiced deceiver he, in the transaction here involved, wove a web so tangled as that a four-cornered litigation has resulted, involving a lawyer, a notary public, and two banks, as parties to this contest.

Hardin P. Figuers, of Columbia, is one of the leading lawyers of the Middle Tennessee bar, and the author of Figuers' Chancery Manual. As a part of his practice he loans, to an unusual extent, the moneys of clients. Knowing this fact, J. G. Bryant approached Figuers, avowedly in behalf of his father, for a loan of $1,000 on the farm as security. He was introduced by Embry, a real estate agent of Columbia, and made application for the loan. Figuers asked for time within which to investigate the proposed lender and the title of the land, improvements, etc. His investigation along all lines proving satisfactory, he informed Embry that he could lend the money, and the latter informed J. G. Bryant, who returned to the city to close the deal.

Figuers took notes for use in the drafting of the deed of trust, and asked J. G. Bryant for the name of his mother. The reply, falsely given, was that she was dead. Bryant then informed Figuers that he had an interest in the land by purchase from his father, but that no deed had been executed to him for it, and that perhaps he (J. G. Bryant) ought to join in the execution of the deed of trust, and it was so drawn. However, the loan, as first proposed and as finally closed, was made to W. D. Bryant as record owner of and on the security of the farm.

J. G. Bryant, referring to the facts that his father was an aged man and lived so far in the country, asked whether the matter of signing and acknowledging could not be attended to without his father coming to town, and Figuers replied that it could if the two Bryants would go before a notary public in their neighborhood. J. G. Bryant left, taking the draft of the deed of trust and a note for $1,000 filled out by Figuers for their signatures. He returned in a few days bringing both instruments, apparently signed by the father and son, the trust deed having attached to it the certificate of defendant Fly, as notary public, which recited according to the prescribed statutory formula, that W. D. Bryant and J. G. Bryant, "the within named bargainors, with whom I am personally acquainted," had personally appeared before Fly and acknowledged its execution. In point of fact W. D. Bryant had not signed or acknowledged either of the documents.

When these were delivered to Figuers and he had seen to the registration of the trust deed, he delivered to J. G. Bryant his check on the Maury National Bank, of Columbia, for $1,000. A short time thereafter Embry called Figuers on the telephone and was out of humor because his commission of $14 had not been retained by Figuers out of the loan sum. Later, Embry and Bryant went to the office of Figuers, and the latter at Bryant's request filled out a check of $14 for Bryant to sign, drawing it on the Ph nix National Bank in favor of Embry as payee. Figuers understood that Bryant had at that time deposited the $1,000 check in that bank to his father's account, influenced to do so by Embry, who was the stepbrother of its cashier, Fulton.

Such a deposit of that check to the account of the father either had been made or was about to be made by J. G. Bryant, who assumed the authority to indorse the name of W. D. Bryant. In fact W. D. Bryant had no knowledge of or participation in any of these transactions. J. G. Bryant merely used his name and credit as means of imposing on the notary, the attorney, and the bank.

The Ph nix Bank accepted such indorsement in the name of W. D. Bryant, the cashier having "very slight acquaintance" with the son, but knowing him to be one of the Bryant boys. J. G. Bryant, after signing his father's name as indorser, affixed his own, "J. G. Bryant."

The Ph nix Bank indorsed the check, setting forth "indorsements guaranteed," and collected the fund from the Maury Bank thereon.

J. G. Bryant for years saw to it that the interest on the $1,000 note was paid annually, but finally allowed default and departed the state. When the truth as to his forgery developed, Figuers filed the bill of complaint against the notary for negligence in the taking of the acknowledgment, and also against the two banks.

The Maury Bank filed a cross-bill, seeking to hold liable the Ph nix Bank on the latter's guaranty of the indorsement, in event the former bank should be held liable on account of honoring and paying its depositor's check on an unauthorized and forged indorsement of the payee's name.

Other facts will be recited in the body of the opinion in the discussion of the questions of liability and defense.

I. As to the liability of the defendant notary public to complainant because of the false certificate:

A lengthy discussion by counsel is entered into in regard to the nature of an act performed by a notary public in taking a single person's acknowledgment--whether ministerial or quasi judicial. That may be here treated as a thing quite aside, as we think that the taking of the acknowledgment in this case was clearly so far ministerial as that the notary may be held to respond under his bond for negligence, if any there be.

By the provisions of Code (Shannon) § 3769, if a clerk who takes the acknowledgment of a deed fails to discharge the duties required of him, he shall be liable to the party injured for all damages he may sustain; and a notary public is likewise liable since by Act 1870, c. 71, they are empowered to take acknowledgments "in the same manner and under the same rules and regulations as govern county court clerks" under existing laws. Code (Shannon) § 3714.

Counsel for complainant have undertaken to assimilate completely the notary to such clerk and to demonstrate that a notary public in taking the acknowledgment of one with whom he is not personally acquainted may be held for a loss due to a failure on his part to identify the acknowledger if he does not require the production of witnesses before him "to prove the identity of the person so offering to acknowledge the same"; referring to Code (Shannon) § 3722. The argument is that liability accrues because the notary did not comply with what is claimed to be the statutory standard of due care in such case--the requirement of sworn proof as to the identity of an acknowledger not known to him.

The common law and the statutory measures of diligence to be observed by a notary are thus correctly stated and contrasted in 1 Corp. Juris, 903:

"Where there is no statute prescribing the manner in which the officer shall ascertain the acknowledger's identity, he is held to the care and diligence of a reasonably prudent man; but he is not an insurer of the truth of his recitals. Where, however, it is prescribed by statute that if the officer does not personally know the acknowledger to be the person described in the instrument, his identity must be established by sworn witnesses, the officer acts at his peril in making the certificate on the strength of a mere introduction or anything short of the evidence required by the statute."

We need not decide whether a notary is within the purview of the Code section (3722) thus relied on, and therefore governed by a statutory standard more stringent than the one of the common law. We are of opinion that if the latter governs, the defendant notary is liable.

The functions of a notary public are not to be lightly assumed; the amount of the bond required of him ($5,000) should indicate as much to one who proposes to perform the duties of the office. A certificate of acknowledgment is an act which must in the nature of things be relied on with confidence by men of business. Those buying or taking security by way of liens on real estate ought not to be required to look with suspicion on such a certificate or compelled to make reproof of its recital as to the notary's personal acquaintance with the acknowledger.

"Personally acquainted with" in such a certificate means a knowledge independent and complete in itself, and existing without other information. Kelly v. Calhoun, 95 U.S. 710, 713, 24 L.Ed. 544.

The phrase imports more than a slight or superficial knowledge. 1 Corp. Juris, 904, and cases cited.

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