                                                                                                                           Opinions of the United
2003 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-16-2003

Schwab v. GMAC Mtg Corp
Precedential or Non-Precedential: Precedential

Docket No. 02-3989




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Recommended Citation
"Schwab v. GMAC Mtg Corp" (2003). 2003 Decisions. Paper 416.
http://digitalcommons.law.villanova.edu/thirdcircuit_2003/416


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                       PRECEDENTIAL

                                 Filed June 16, 2003

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT


                 No. 02-3989


             WILLIAM G. SCHWAB
                       v.
           GMAC MORTGAGE CORP
      William G. Schwab, Esquire, in his
       capacity as Chapter 7 Trustee,
                               Appellant

               APPEAL FROM THE
       UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
           (D.C. Civ. No. 02-cv-01182 )
  District Judge: Honorable A. Richard Caputo

  Submitted Under Third Circuit L.A.R. 34.1(a)
               April 23, 2003
Before: SCIRICA, Chief Judge, AMBRO and WEIS,
                 Circuit Judges.

         (Opinion filed: June 16, 2003)
                              2


                       William G. Schwab, Esquire
                       In his Capacity as Chapter 7
                        Trustee/Appellant
                       Michelle Wolfe, Esquire
                       811 Blakeslee Boulevard, Drive East
                       Post Office Box 56
                       Lehighton, Pennsylvania 18235
                       Attorneys for Trustee/Appellant
                       William J. Levant, Esquire
                       Kaplin Stewart Meloff Reiter
                        & Stein, P.C.
                       350 Sentry Parkway, Building 640
                       Post Office Box 3037
                       Blue Bell, Pennsylvania 19422
                       Attorneys for Appellee,
                       GMAC Mortgage Corporation


                OPINION OF THE COURT

WEIS, Circuit Judge.
  In this bankruptcy case, we hold that the lien of a
mortgage was not affected by the fact that the notary
public’s embossed seal was not visible in the
acknowledgment on the document filed in the County
Recorder of Deeds Office. Accordingly, we will affirm the
summary judgment in favor of the mortgagee.
  In February 2001, debtor Thomas Galbraith filed a
voluntary petition under Chapter 7 of the Bankruptcy Code
and William G. Schwab was appointed Trustee. In April
2001, GMAC Mortgage Corporation, a secured creditor,
asserted that it was the holder of a mortgage on the
debtor’s premises, and moved for relief from the automatic
stay in order to foreclose on the premises. The Trustee filed
an adversary action to avoid the mortgage owned by GMAC
because the copy in the Recorder of Deeds Office of Carbon
County, Pennsylvania, did not contain the embossment of
the notary public who had acknowledged the execution of
the original document.
                              3


   It appeared that the original mortgage had been lost, and
the copy on record in Carbon County Recorder of Deeds
Office had been made by a photographic process that did
not reveal whether the notary public’s embossment had
been applied to the original document. The Trustee argues
that the mortgage on record was thus invalid and did not
give cognizable notice to creditors of the existence of the
lien.
  The bankruptcy judge and the district court on appeal
concluded that, under Pennsylvania law, the embossment
need not have been capable of photographic reproduction,
and that the mortgage was validly recorded. As a result,
summary judgment was entered in favor of the mortgagee
GMAC. We exercise plenary review. Landon v. Hunt, 977
F.2d 829, 830 (3d Cir. 1992).
   The validity of the lien in this case is governed by
Pennsylvania law. In re Ashe, 712 F.2d 864, 872 (3d Cir.
1983). As the Pennsylvania Supreme Court has said, “[t]he
great object to be obtained, by recording . . . an instrument
affecting the title to real estate, is to give notice of the
incumbrance.” Prouty v. Marshall, 74 A. 550, 551 (Pa.
1901). The requirements for recording mortgages and other
instruments are set out in statutory form at 21 P.S. § 621.
This section provides that, to be valid, a mortgage must be
“acknowledged or proved and recorded.” Generally, the
acknowledgment of the mortgage is performed by a notary
public.
   The statute governing the certificate of an acknowledging
officer requires that it include his signature, official seal,
title of his office and, if a notary public, the date the
commission expires. Significantly, the statute also states
that “[t]he existence or absence of an embossed impression
on documents left for recording . . . may be disregarded by
the Recorder.” 21 P.S. § 291.8.
  The Trustee found some inconsistency between that
provision of the statute and 57 P.S. § 158. That section
requires a notary public to have an official seal in the form
of a rubber stamp which includes, inter alia, the words
“notarial seal,” “notary public,” the name of the notary, and
the date when the commission expires. The seal is to be
                                     4


placed near the notary’s signature on the document and “in
such a manner as to be capable of photographic
reproduction.”
   At the time the mortgage in this case was recorded,
section 158 also required that “in addition to the official
seal” the notary public should use “an embosser upon
which shall be engraved the words ‘notary public,
Commonwealth of Pennsylvania,’ and the name and
surname of the notary.” The statute further provides that
“[a]ll documents executed shall bear a legibly embossed
impression.” 57 P.S. § 158(c).1
  Significantly, there is no requirement that the
embossment be “capable of photographic reproduction.” 57
P.S. § 158(d). The statute thus makes a sharp distinction
between the seal, which must be visible on photographic
recording processes, and the embossing, which need not
have that attribute.
  The recording statute, which permits the Recorder to
disregard the absence of an embossed impression, is a
practical resolution of the difficulty in copying mortgages
and deeds where the duplicating equipment did not
reproduce the embossed portion of the document. It is
obvious that the legislature considered the recording of a
deed or mortgage to be adequate notice to the public when
the acknowledgment includes only the rubber stamp seal
that is visible on the copy of the document.
   We have reviewed the various opinions cited by the
parties and conclude that they are not pertinent to the
issue before us. See Jefferson Bank v. Progressive Cas. Ins.
Co., 965 F.2d 1274 (3d Cir. 1992); In re: Distribution of
Proceeds from Sheriff ’s Sale of Premises 250 Bell Road, 388
A.2d 297 (Pa. 1978); Commonwealth v. Roberts, 141 A.2d
393 (Pa. 1958); Lancaster v. Flowers, 48 A. 896 (Pa. 1901).

1. Section (c) was deleted by Act 151 of 2002 (House Bill 851, P.N. 4679),
section 6. The statute, therefore, no longer requires embossing by a
notary public. The statute is effective July 1, 2003 and is not retroactive.
It does not affect the case before us or the many documents recorded
before the effective date.
                              5


  Accordingly, we conclude that the GMAC mortgage was
properly recorded and constituted an enforceable lien on
the debtor’s property. Finding no error in the judgment of
the District Court, we will affirm.

A True Copy:
        Teste:

                  Clerk of the United States Court of Appeals
                              for the Third Circuit
