In re Edward James Crim, Sr., and Jayne Crim; Eva M. Lemeh, Trustee v. EMC Mortgage Corporation

Summary

The Tennessee Supreme Court held that a deed of trust was improperly acknowledged because the acknowledgment falsely stated that Edward J. Crim, Sr. personally appeared, even though his wife signed on his behalf under a power of attorney. The defective acknowledgment rendered the deed of trust null and void as to subsequent judicial lien creditors and bona fide purchasers with respect to Edward Crim's interest. The acknowledgment was sufficient as to Jayne Crim's individual signature, so the deed of trust effectively encumbered her right of survivorship in the tenancy-by-the-entirety property.

Holdings

1. The deed of trust was improperly acknowledged as to Edward Crim because the certificate falsely stated that he personally appeared and acknowledged his signature, failed to indicate that Jayne Crim acted as his attorney-in-fact, and did not substantially comply with the statutorily prescribed representative-capacity acknowledgment form.
2. The deed of trust was null and void as to subsequent judicial lien creditors and bona fide purchasers without notice with respect to the transfer of Edward Crim's interest in the property.
3. The deed of trust was valid and not voidable by a subsequent judicial lien creditor or bona fide purchaser without notice insofar as it encumbered Jayne Crim's interest.
4. Because the property was held as a tenancy by the entirety, Jayne Crim acting alone could encumber only her right of survivorship; that survivorship interest was effectively conveyed to EMC.

Questions Presented

1. Whether the deed of trust was improperly acknowledged under Tennessee law when Jayne Crim signed on behalf of Edward Crim but the acknowledgment stated that Edward personally appeared and acknowledged the instrument.
2. Whether the defective acknowledgment rendered the deed of trust void or voidable as to subsequent judicial lien creditors or bona fide purchasers without notice.
3. What interest in tenancy-by-the-entirety property was effectively encumbered by the deed of trust.

Disposition

other