In re Englewood Mfg. Co.

• Decision Date: 31 August 1939
• Docket Number: No. 11714.,11714.
• Citation: 28 F. Supp. 653
• Parties: In re ENGLEWOOD MFG. CO.
• Court: U.S. District Court — Eastern District of Tennessee

28 F. Supp. 653

In re ENGLEWOOD MFG. CO.

No. 11714.

District Court, E. D. Tennessee, S. D.

August 31, 1939.

Jones & Davis, of Athens, Tenn., for petitioners.

H. M. Candler and Frank K. Boyd, both of Athens, Tenn., for bankrupt.

DARR, District Judge.

This is an action in bankruptcy. By proper procedure there is presented to the Court to decide the validity of the registration of a mortgage or deed of trust.

On December 23, 1933, the bankrupt executed a deed of trust to secure certain indebtednesses to the petitioners. The instrument was duly recorded in the register's office of McMinn county, Tennessee, on the same date.

The certificate of acknowledgment is in the statutory form except there is omitted the words, "with whom I am personally acquainted", or words, "to me personally known", or like words showing personal acquaintance by the probating officer with the persons executing the mortgage.

On June 16, 1939, the holders of the obligations secured by the mortgage had placed of record an instrument following the statutory directions to cure the defect in the acknowledgment above set out.

It is practically conceded by the petitioners' counsel in argument that the instrument recorded curing the defect would not relate back to the date of the original instrument. This is unquestionably true. The lien fixed in the trustee by the bankruptcy was prior to the recording of the curative instrument. It would be unreasonable to think that if the recording of the original instrument was not notice which fixed a lien, that it would be notice merely by the fact that the defect had been cured after another lien has been set up against the same property. In other words, that it could be retroactively vital when it was dead originally.

This feature of the complaint will be resolved against the petitioners. Bank of Jellico v. McCarty, 99 Tenn. 469, 42 S.W. 4; Stroud v. McDaniel, 80 Tenn. 617, 12 Lea 617.

The seriously controverted question is whether it is vital to a certificate of acknowledgment for proper authentication for registration that the words, "with whom I am personally acquainted", or words, "to me personally known," or words of like import, be contained therein.

This is an acknowledgment by officials of a corporation. The statutory direction for such acknowledgments is contained in the Tennessee Code, 1932, at Section 7663.

Petitioners claim that there is favorable significance in the fact that the statute provides that the forms may be "substantially the following". This could not be true in view of the fact that Section 7669 of said Code, a much older law, provides that any of the forms of acknowledgments are good if substantially followed. This is also true under reason and by authority. Newton Finance Corporation v. Conner, 161 Tenn. 441, 33 S.W.2d 95; 72 A.L.R. 1289.

It is conceded that the omission of words identifying the signers of the instrument by the probating officer is fatal in an acknowledgment of natural persons. The authority is abundant to sustain this concession. Sufficient to cite Granger v. Webster, 162 Tenn. 459, 36 S.W.2d 883; Newton Finance Corporation v. Conner, supra; Jefferson County Bank v. Hale, 152 Tenn. 648, 280 S.W. 408; Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117.

But the petitioners claim that there is a distinction between an acknowledgment of an individual and a corporate acknowledgment and that the recitation in the certificate by the certifying official that he is personally acquainted with the signing corporation officers is not of substance, but a permissive form.

The idea underlying the holdings to the effect that there must be a personal identification of individual grantors in a certificate of acknowledgment is to prevent fraud. That the very person or persons signing the instrument are personally known to the probating officer and thus prevent unwarranted persons from making illegal transfers. It is not contemplated that this would prevent all fraud but would be a provision that would tend to keep down fraudulent transactions.

In the form of corporate acknowledgment the certifying official is not required to know that the individuals are corporate officers, but they identify themselves as such, with authority to act for the corporation by affidavit in the acknowledgment. And further they acknowledge themselves under oath as having executed the instrument on behalf of the corporation. The only part of the certificate that is of the personal knowledge of the certifying officer is that the corporation officers personally appeared before him and that he was personally acquainted with them and that they made the other acknowledgments under oath.

It is true that a probating officer might personally know the persons representing themselves to be corporation officials, and...