Poole v. Hyatt

WILNER, Judge. The question presented here is whether, for there to be a valid acknowledgment of a deed or of a power of attorney authorizing the conveyance of real estate, the person signing the instrument must make an affirmative oral declaration in the presence of the notary public confirming the signatory’s understanding of the instrument and his or her intent in executing it. The answer is “no.” I. BACKGROUND This appeal arises from a dispute over property in Montgomery County, Maryland acquired more than 60 years ago by Ethel J. Poole (Ethel) and her husband, N. Purdum Poole. The Pooles built a home for themselves on the property and later built one for their son, Bernard.

Bernard occupied the second house until his divorce in the 1950’s, when he moved to York, Pennsylvania, never to return. The Pooles thereafter rented the second house. N. Purdum Poole died in 1958. In 1976, Ethel, then 76 years of age, conveyed the entire tract to herself and Bernard, as “joint tenants with the right of survivorship.” She claimed that the purpose of the conveyance was to save estate taxes upon her death.

Bernard neither requested nor received any income from the property, and he made no contribution to its upkeep. Bernard’s health began to fail in 1985. He was, at the time, living with petitioner, Glenda Donivan, now Glenda Poole, whom he married in 1990. When Bernard became unable to work, Ethel began to provide financial assistance, mostly in the form of checks made payable to Bernard.

She claimed that Glenda had informed her that some of the expenses were ⁶²² reimbursable from insurance maintained by Bernard and that Glenda promised to repay those amounts when the insurance proceeds were received. In December, 1991, Glenda hired a Pennsylvania attorney, Robert Clofine, to prepare a durable power of attorney and will for Bernard in favor of herself. Mr. Clofine brought the documents to Bernard’s home where, on December 17, 1991, Bernard signed them. We are informed that, in his will, Bernard left his entire estate to Glenda.

In the power of attorney, Bernard appointed Glenda as his attorney-in-fact, with broad power to manage his real and personal property. The document mentioned the Montgomery County property and gave Glenda the power to sell it “for such consideration and upon such terms as [Glenda] shall think fit” and to execute, acknowledge, and deliver deeds for its conveyance. The power of attorney also purported to give Glenda an unrestricted right “[t]o make gifts.” Bernard’s signature on the power of attorney was notarized by Mr. Clofine. In his certificate, Clofine attested that Bernard, “known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument” had personally appeared “and acknowledged that he executed the same for the purposes therein contained.” Two months later, at Glenda’s request, Mr. Clofine prepared a deed under which Glenda, acting as Bernard’s “duly constituted attorney-in-fact,” conveyed Bernard’s undivided interest in the Montgomery County property, which he then held as joint tenant with Ethel, to Bernard and Glenda, as tenants by the entireties.

Glenda signed that deed, for which there was no consideration, on February 22, 1992. Clofine notarized the document, attesting that Glenda had personally appeared, that she was known or satisfactorily proven to be the person whose name was subscribed to the instrument as attorney-in-fact for Bernard, and that she acknowledged that she executed the deed as the act of her principal for the purposes therein contained. ⁶²³ Bernard died three days later. The deed was recorded in Montgomery County on March 2, 1992, although Ethel did not learn of it until she received her tax bill in July, 1992. Ethel died in October, 1992.

On December 16, her estate filed this action in the Circuit Court for Montgomery County. In Count I, Ethel 1 claimed that the power of attorney was obtained by fraud, duress, and coercion, that Bernard was not competent to sign it, and that it did not authorize Glenda to convey the property. For those reasons, she sought a ruling that the deed executed by Glenda was ineffective and an order requiring her to reconvey the property. On the same allegations and the further averment that, in obtaining the power of attorney, Glenda abused a confidential relationship she had with Bernard and violated the trust reposed in her, Ethel sought, in Count II, a constructive trust on the property.

The remaining three counts concerned the funds advanced by Ethel. She sought an accounting (Count III), compensatory and punitive damages for fraud (Count IV), and compensatory damages for what appears to be an allegation of negligent misrepresentation (Count V). Glenda answered the complaint and filed a counterclaim seeking a partition of the property and an accounting for rents and profits from February 25, 1992—the date Bernard died. After taking Mr. Clofine’s deposition, Ethel filed a motion for partial summary judgment on Counts I and II on a new theory, not pled in the complaint.

She claimed, based on Clofine’s deposition testimony, that neither Bernard nor Glenda had made any oral statement in the presence of Clofine acknowledging that they were signing the respective documents for the purposes contained therein. On that basis, she argued that there was no acknowledgment of either the power of attorney or the deed and, for that reason, both were ineffective. ⁶²⁴ In June, 1994, the court granted that motion, holding that both the power of attorney and the deed were void because of defective acknowledgments. In November, 1994, the court granted Glenda’s motion for summary judgment on Counts III, IV, and V of Ethel’s complaint, essentially upon a finding that all of the funds advanced by Ethel went either to Bernard or for his benefit and that, to the extent Glenda made any promise to repay those funds, it was unenforceable under the Statute of Frauds. Both parties appealed to the Court of Special Appeals.

In a per curiam opinion filed November 27, 1995, that court handed Ethel a nearly complete victory. It affirmed the judgment entered on Counts I and II, concluding that Clofine’s “conceded failure to obtain Glenda’s actual acknowledgment rendered the deed void ab initio and, thus, the attempted conveyance failed.” It vacated the summary judgment entered for Glenda on Counts III, IV, and V, concluding that triable issues were presented on those counts. We granted Glenda’s petition for certiorari to consider the two questions presented therein: (1) Is an acknowledgment on a deed and power of attorney defective if the notary public, having watched the person sign the documents, does not read the language of the acknowledgment certificate aloud to the signatory and ask if the act was free and voluntary—or utilize other such words to further confirm the voluntariness, etc. of the act? (2) If such failure does render the acknowledgment defective, is the defect such to render the deed or other instrument void?

II

DISCUSSION A. Preliminary Issues (1) Curative Act There is one argument that would have absolutely defeated Ethel’s motion for summary judgment on Counts I and II and required a trial on the allegations in her complaint, and ⁶²⁵ possibly on Glenda’s counterclaim as well, but it was never raised by Glenda in her response to the motion. Nor was it raised in the Court of Special Appeals or in Glenda’s petition for certiorari, although counsel conceded at oral argument before us that he was aware of it. Md.Code (1974, 1996 RepLVol.), § 4-109(b) of the Real Property article, provides that, as to a deed recorded after January 1, 1973, any failure to comply with the formal requisites, including a defective acknowledgment, “has no effect unless it is challenged in a judicial proceeding commenced within six months after [the deed] is recorded.” The deed in question was recorded in March, 1992. This action was not filed until December, 1992.

To the extent that Ethel’s claim rested upon the alleged defective acknowledgment, which was the sole basis for her motion for summary judgment, it is unquestionably barred by § 4-109. The problem for us is that the issue of the curative statute was not raised in the petition for certiorari or in the briefs, and it is therefore not really before us. For the reasons shortly to be explained, we shall reverse the judgment entered on Counts I and II, as affirmed by the Court of Special Appeals, on the issues raised in the petition. Had the curative statute been properly raised in the circuit court, neither we nor the Court of Special Appeals would have been put to the trouble of answering what would essentially have been a moot point.

(2) Does Pennsylvania or Maryland Law Apply? A second penumbral annoyance concerns the question of whether this case is to be resolved under Pennsylvania or Maryland law. Two instruments are challenged here—the power of attorney executed by Bernard in December, 1991, and the deed executed by Glenda in February, 1992. Both documents were drafted and executed in Pennsylvaxda.

In the circuit court and in the Court of Special Appeals, Glenda took the position that both documents were subject to Maryland law. The deed obviously pertained to Maryland real estate, and, although the power of attorney was general, it too was ⁶²⁶ required to be recorded in Maryland in order to make the deed effective. Real Prop, art., § 4-107. Presumably on that basis, Glenda agreed that the validity and interpretation of the power of attorney was governed by Maryland law.

Ethel did not argue otherwise. Notwithstanding the lack of any disagreement on this point, the Court of Special Appeals held that the power of attorney was governed by Pennsylvania law, although, because the court concluded that the deed itself was defective, it never addressed whether the power of attorney was valid under Pennsylvania law. In contrast to the position that she took previously, Glenda now contends that the power of attorney should be construed in accordance with Pennsylvania law. It is essentially a non-issue.

Pennsylvania and Maryland have both adopted the Uniform Acknowledgments Act, and neither party has provided us with any authority suggesting that Pennsylvania would construe its statute differently than we propose to construe the Maryland statute. B. Statutory Provisions Maryland has two statutes dealing with the form of acknowledgments on instruments concerning real property. Title 4, subtitle 2 of the Real Property article sets forth a number of forms which § 4-201 declares to be “sufficient for the purpose intended.” Section 4-204 contains three forms of acknowledgment. The pertinent one here is that provided for in § 4-204(c)—an acknowledgment taken out of State: “State of ................

County, to wit: I hereby certify, that on this ..... day of ........, in the year .......,, before the subscriber, (here insert the official style of the officer taking the acknowledgment), personally appeared (here insert the name of the person making the acknowledgment), and acknowledged the foregoing deed to be his act. Seal of the court In testimony whereof I have caused the seal of the court to be affixed (or have affixed by my official seal), this ..... day of........A.D.........” ⁶²⁷ Md.Code (1957, 1995 RepLVol.), art. 18 contains the Uniform Acknowledgments Act. Section 1 states that an instrument may be acknowledged in the manner and form provided by the laws of Maryland (which would include Real Prop, art., § 4-204) or as provided in art. 18. The key provisions are §§ 5 and 7.

Section 5 provides that “[t]he officer taking the acknowledgment shall know or have satisfactory evidence that the person making the acknowledgment is the person described in and who executed the instrument.” Section 7 sets forth forms for acknowledgments. The one for individuals states: “State of........ County of...... On this the .... day of ........., 19..., before me, .......... the undersigned officer, personally appeared .......... known to me (or satisfactorily proven) to be the person whose name ......... subscribed to the within instrument and acknowledged that .... he ... executed the same for the purposes therein contained.

In witness whereof I hereunto set my hand and official seal.” C. The Function Of An Acknowledgment Most of our law governing real property and its conveyancing comes to us from England, and that is the case with respect to acknowledgments as well. Except for conveyances by married women, acknowledgments were not required at common law. 2 They came into use, we are informed, after the enactment of the Statute of Enrolments in 1536 (27 Henry ⁶²⁸ VIII c.16). Under that Act, the conveyance of an estate of inheritance or freehold by bargain and sale was ineffective unless the instrument of conveyance was in writing, indented, sealed, and enrolled with the King’s Court at Westminster or before the Custos Rotulorum and two justices of the peace in the county where the land was located. Although the statute did not, of itself, require that the instrument be acknowledged, it appears that, when presented with a deed for enrolment, the judicial officials began to require evidence that the deed had, in fact, been executed by the grantor, and the practice thus arose of the grantor acknowledging the deed before those officials in order to provide that evidence.

See 1A C.J.S. Acknowledgments, § 3. See also Pidge v. Tyler, 4 Mass. 541 (1808). The Statute of Enrolments is not among the statutes listed in Alexander’s British Statutes as having been incorporated into Maryland law pursuant to Article 5 of the Maryland Declaration of Rights. 3 Nor does it appear that an acknowledgment was ever statutorily required in England. In listing the requisites of a conveyance of real property, Blackstone makes no mention of an acknowledgment.

II W. Blackstone, Commentaries on the Law of England, Ch. XX, 295-308 (Lewis ed.1922). Nonetheless, Maryland and other colonies enacted their own statutes requiring that deeds contain them. In 1766, the Lord Proprietary, with the advice and consent, of the Provincial Assembly, enacted a law providing that no estate of inheritance or freehold or estate for above seven years was effective unless the deed was (1) acknowledged in the Provincial Court, in the county court, or before two justices of the peace, and (2) enrolled in the records of the court.

Act of 1766, ch. 14. If the grantor was unable to appear before the Provincial Court or the county court where ⁶²⁹ the land was located, the acknowledgment could be made in the county court where the grantor resided, but in that event, the clerk had to certify that it was either made in open court or before two duly commissioned and sworn justices of the peace. If the grantor was not a resident of Maryland, the deed could be acknowledged “by letter of attorney, well and sufficiently proved” before the court or the justices of the peace. Although the formality required in the early statutes has abated, as any notary public can now take an acknowledgment wherever the grantor may be, the fundamental purpose seems to be the same, of preventing fraud by providing some evidence of identity and volition—that the person stated in the deed as the grantor has, in fact, signed the deed and understands that what he or she has signed is a deed conveying property.

That purpose is evident not only from § 5 of art. 18 but from the statutory forms themselves. As noted, the form declared acceptable in Real Prop, art., § 4-204 recites only that the grantor personally appeared and acknowledged the deed to be his or her act. The forms provided for in art. 18, § 7 are to the same effect—that the grantor personally appeared and acknowledged that he or she executed the deed for the purposes contained therein. D. What Is Required?

The cases involving the adequacy of acknowledgments fall into two broad categories—those involving the sufficiency of the notary’s certificate, i.e., whether facially it complies with the requirements of the applicable statute, and those involving the accuracy of the certificate, i.e., whether the fact or event attested to actually occurred. The cases in the first category are more numerous and involve such things as a blank where the name of the grantor should be (Thomas v. Davis, 241 Ala.271, 2 So.2d 616 (1941)), a failure to state the expiration date of the notary’s commission (Kelley v. Carter, 216 Ark.491, 226 S.W.2d 53 (1950)), equivocation as to the notary’s knowledge of grantor’s identity (Lindley v. Lindley, 92 Tex.446, 49 S.W.573 (1899), Kenley v. ⁶³⁰ Robb, 245 S.W. 68 (Tex. Comm’n App.1922)), and the failure to state clearly that the grantor personally appeared. Powers v. Hatter, 152 Ala. 636 , 44 So. 859 (1907).

See generally Annotation, Sufficiency of Certificate of Acknowledgment, 25 A.L.R.2d 1124 (1952) and Annotation, Sufficiency of Certificate of Acknowledgment, 29 A.L.R. 919 (1924). We are not concerned here with deficiencies of that kind. Mr. Clofine’s certificates are facially sufficient. Most of the cases in the second category deal with situations in which the person whom the notary certified as having appeared did not, in fact, appear, or allegedly did not appear.

They have arisen in at least two different contexts—a suit for damages against the notary for falsely certifying that the grantor appeared, and an action to invalidate the conveyance or instrument. The cases present a variety of factual situations, from taking an actual acknowledgment from an imposter (Barnard v. Schuler, 100 Minn. 289 , 110 N.W. 966