                        IN THE SUPREME COURT OF TENNESSEE
                                   AT KNOXVILLE
                                          September 5, 2002 Session

                              IN RE RONALD LEBRON AKINS, SR.

                                Rule 23 Certified Question of Law
               United States Bankruptcy Court for the Eastern District of Tennessee
                              No. 01-13388     John C. Cook, Judge



                        No. M2002-00337-SC-R23-CQ - Filed November 1, 2002


Pursuant to Rule 23 of the Supreme Court of Tennessee,1 this Court accepted certification of the
following questions from the United States Bankruptcy Court for the Eastern District of Tennessee,
Southern Division:

                   (1) Whether the following acknowledgment on a deed of trust is valid
                   under Tennessee law:

                        State of Tennessee
                        County of Bradley

                        I, Tammy Bentley, a Notary Public of the county and state
                        first above written, do hereby certify that Ronald L. Akins,
                        unmarried, personally appeared before me this day and
                        acknowledged the execution of the foregoing instrument.

                        Witness my hand and official seal, this 12th day of April,
                        2000.

                        //s// Tammy Bentley
                        Notary Public
                        My commission expires: 2/26/2003




         1
          “The Supreme Court may, at its discretion, answer questions of law certified to it by the Supreme Court of the
United States, a Court of Appeals of the United States, a District Court of the United States in Tennessee, or a United
States Bankruptcy Court in Tennessee. This rule may be invoked when the certifying court determines that, in a
proceeding before it, there are questions of law of this state which will be determinative of the cause and as to which it
appears to the ce rtifying court there is no contro lling precedent in the d ecision s of the Supreme C ourt of Ten nessee .”
Tenn. Sup. Ct. R . 23, § 1.
               (2) If the foregoing certificate of acknowledgment is not valid, then
               whether the admittedly valid acknowledgment on the assignment of
               rents cures the defective acknowledgment on the deed of trust under
               the circumstances of this case.

We hold that the deed of trust in this case was properly acknowledged under Tennessee law and is
not voidable by a judicial lien creditor or a bona fide purchaser for value.

                      Tennessee Sup. Ct. R. 23 Certified Question of Law

JANICE M. HOLDER, J., delivered the opinion of the court, in which FRANK F. DROWOTA , III, C.J.,
and E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR., and WILLIAM M. BARKER, JJ, joined.

Linda W. Knight, Nashville, Tennessee, for the appellant, Community Trust & Banking Company.

Christopher Todd Varner and Richard P. Jahn, Jr., Chattanooga, Tennessee, for the appellee, Richard
P. Jahn, Jr.

Amy Pierce and B. Anthony Saunders, Nashville, Tennessee, for the amicus curiae, Tennessee
Bankers Association.

                                             OPINION

                                Factual and Procedural Background

       This matter arises from a federal bankruptcy proceeding. The debtor in the bankruptcy
proceeding, Ronald L. Akins, Sr., filed a voluntary petition for Bankruptcy under Chapter 7 of the
United States Bankruptcy Code on May 25, 2000. In his capacity as appointed bankruptcy trustee,
Richard P. Jahn, Jr. filed an adversary proceeding seeking to set aside a deed of trust executed by Mr.
Akins on April 12, 2000. The defendant in the adversary proceeding, Community Trust & Banking
Company (“CTB”), is the beneficiary of the deed of trust at issue.

        CTB made a loan of $175,000 to Mr. Akins in April of 2000. On April 24, 2000, a deed of
trust was recorded in the Office of the Register of Deeds of Meigs County, Tennessee, securing
payment of the $175,000 note. The clause acknowledging Mr. Akins’ signature on the deed of trust
reads as follows:

               State of Tennessee
               County of Bradley

               I, Tammy Bentley, a Notary Public of the county and state first above
               written, do hereby certify that Ronald L. Akins, unmarried, personally



                                                 -2-
               appeared before me this day and acknowledged the execution of the
               foregoing instrument.

               Witness my hand and official seal, this 12th day of April, 2000.

               //s// Tammy Bentley
               Notary Public
               My commission expires: 2/26/2003

To further secure the loan, Mr. Akins also executed a Collateral Assignment of Rents in favor of
CTB. This document was executed before the same notary public on the same date as the deed of
trust and was also recorded on the same date as the deed of trust. The acknowledgment on the
assignment of rents reads as follows:

               Before me personally appeared Ronald L. Akins, unmarried, to me
               known to be the person(s) described in and who executed the
               foregoing instrument, and acknowledged the execution of the same
               as his free act and deed for the purposes therein contained.

(emphasis added). The Trustee does not dispute the validity of the assignment of rents or its
acknowledgment.

        The Trustee seeks to avoid the lien under the deed of trust of which CTB is the beneficiary
on the grounds that its certificate of acknowledgment is invalid. Specifically, the Trustee argues that
because the certificate does not adequately demonstrate the notary’s knowledge of the identity of the
person appearing before her, the deed of trust is void. Both parties filed motions for partial summary
judgment. In connection with these motions, we accepted the aforementioned questions of law from
the United States Bankruptcy Court for the Eastern District of Tennessee, Southern Division.

      For the following reasons, we hold that the deed of trust was properly acknowledged under
Tennessee law and is not voidable by a judicial lien creditor or a bona fide purchaser without notice.

                                            ANALYSIS

                                     I. First Certified Question

         Chapter 22 of Title 66 of the Tennessee Code Annotated governs the acknowledgment of
instruments. Forms of certificates of acknowledgment for cases in which an individual signs a deed
of trust on his or her own behalf are set forth in Tennessee Code Annotated sections 66-22-107(a)-(b)
and 66-22-114(a). Section 66-22-107 includes the following:

               a) If the acknowledgment is made before a county clerk or deputy, or
               clerk and master, or notary public, or before any of the officers out of


                                                 -3-
             the state who are commissioned or accredited to act at the place
             where the acknowledgment is taken, and having an official seal, viz:
             those named in §§ 66-22-103 and 66-22-104, and, also, any consular
             officer of the United States having an official seal, such officer shall
             write upon or annex to the instrument the following certificate, in
             which the officer shall set forth such officer's official capacity:

                 State of Tennessee )
                 County of ________ )

                 Personally appeared before me, (name of clerk or deputy)
                 clerk (or deputy clerk) of this county, (bargainor's name), the
                 within named bargainor, with whom I am personally
                 acquainted (or proved to me on the basis of satisfactory
                 evidence), and who acknowledged that such person executed
                 the within instrument for the purposes therein contained.

                 Witness my hand, at office, this ___ day of ___, 19__.

             (b) Or, in the alternative, the following certificate, in case of natural
             persons acting in their own right:

                 State of Tennessee )
                 County of ________ )

                 On this ___ day of __________, 19 ___, before me personally
                 appeared __________, to me known to be the person (or
                 persons) described in and who executed the foregoing
                 instrument, and acknowledged that such person (or persons)
                 executed the same as such person (or person's) free act and
                 deed.

(emphasis added). Section 66-22-114(a), which contains an alternative “universal” form of
certificate of acknowledgment, states:

             If the acknowledgment be made before any of the officers who are
             authorized to take such acknowledgment under the provisions of this
             chapter or any consular officer of the United States having an official
             seal, such officer shall write upon or annex to the instrument a
             certificate of acknowledgment. The following form shall constitute
             a valid certificate of acknowledgment:




                                               -4-
                   State of ___________ )
                   County of __________ )

                   Personally appeared before me, (name of officer), (official
                   capacity of officer), (name of the natural person executing the
                   instrument), with whom I am personally acquainted, and who
                   acknowledged that such person executed the within
                   instrument for the purposes therein contained (the following
                   to be included only where the natural person is executing as
                   agent), and who further acknowledged that such person is the
                   (identification of the agency position of the natural person
                   executing the instrument, such as "attorney-in-fact" or
                   "president" or "general partner") of the maker or a constituent
                   of the maker and is authorized by the maker or by its
                   constituent, the constituent being authorized by the maker, to
                   execute this instrument on behalf of the maker.

                   Witness my hand, at office, this ___ day of ___, 19___.

(emphasis added). Missing from the certificate of acknowledgment on the deed of trust in this case
is any prescribed language indicating the notary’s familiarity with the individual who assigned the
deed of trust, Ronald L. Akins. A deed of trust that is not properly acknowledged is “null and void
as to existing or subsequent creditors of, or bona fide purchasers from, the makers without notice.”
Tenn. Code Ann. § 66-26-103 (1993); Limor v. Fleet Mortg. Group (In re Marsh), 12 S.W.3d 449,
454 (Tenn. 2000). Thus, the issue is whether the omission of the prescribed words on the deed of
trust’s certificate of acknowledgment allows the Trustee to avoid CTB’s liens.

                                      Statutory Construction

       Tennessee Code Annotated section 66-26-113 and Tennessee Code Annotated section
66-22-114(b) currently address how to determine the validity of a certificate of acknowledgment that
does not follow one of the aforementioned statutorily prescribed forms. Section 66-26-113 states
the “substantial compliance” test:

               The unintentional omission by the clerk or other officer of any words
               in a certificate of an acknowledgment, or probate of any deed or other
               instrument, shall in nowise vitiate the validity of such deed, but the
               same shall be good and valid to all intents and purposes, if the
               substance of the authentication required by law is in the certificate.

(emphasis added). A predecessor of this statute, with substantially the same language, was first
enacted in 1845. In 1987, the General Assembly added Tennessee Code Annotated section
66-22-114(b), which states the “intent” test:


                                                -5-
                Any certificate clearly evidencing intent to authenticate, acknowledge
                or verify a document shall constitute a valid certificate of
                acknowledgment for purposes of this chapter and for any other
                purpose for which such certificate may be used under the law. It is the
                legislative intent that no specific form or wording be required in such
                certificate and that the ownership of property, or the determination of
                any other right or obligation, shall not be affected by the inclusion or
                omission of any specific words.

(emphasis added). Tennessee Code Annotated section 66-22-114(b) does not contain any provision
that repeals section 66-26-113.

        Statutes addressing the same subject must be construed in connection with all others on the
same subject. See Black v. State, 290 S.W. 20, 21 (Tenn. 1927); Faulkner v. Nashville, 285 S.W.
39, 42 (Tenn. 1926). Furthermore, this Court must interpret statutes on the same subject so that they
operate in harmony, not in conflict with each other. See Parkridge Hospital, Inc. v. Woods, 561
S.W.2d 754, 755 (Tenn. 1978). Finally, the legislature is presumed to know of its prior enactments.
See State v. Hicks, 55 S.W.3d 515, 523 (Tenn. 2001) (citations omitted). Consequently, courts
should find repeals by implication only when statutes cannot be construed harmoniously. See id.

         In this case, the two statutes at issue reasonably can be construed so as to give effect to each.
Tennessee Code Annotated section 66-22-113 addresses the unintentional omission of words by the
officer taking an acknowledgment while Tennessee Code Annotated section 66-22-114(b) addresses
the intent of the person signing a document to properly acknowledge his or her signature. Although
the two statutes are different, they are not necessarily inconsistent. Both statutes in this case are
“savings statutes.” They can be interpreted as simply providing alternative ways in which a
certificate of acknowledgment that does not follow a prescribed form may be found to be valid. The
acknowledgment on the deed of trust in this case does not contain the prescribed words “with whom
I am personally acquainted (or proved to me on the basis of satisfactory evidence)” or “to me known
to be the person (or persons) described in and who executed the foregoing instrument.” Thus, we
may look to either of these two statutes to determine the validity of the acknowledgment.

              Tennessee Code Annotated Section 66-26-113: Substantial Compliance

        Tennessee Code Annotated section 66-26-113 codifies the “substantial compliance” test.
Prior to the enactment of Tennessee Code Annotated section 66-22-114(b), the use of statutorily
prescribed “magic words” was found to be practically indispensable. Substantial compliance was
found lacking in numerous cases in which a certificate of acknowledgment failed to state that the
notary public was “personally acquainted” with the acknowledging party or to include words that
were functionally equivalent. See, e.g., McAllester v. Aldridge (In re Anderson), 30 B.R. 995
(Bankr. M.D. Tenn. 1983); In re Airport-81 Nursing Care, Inc., 29 B.R. 501 (Bankr. E.D. Tenn.
1983); Jefferson County Bank v. Hale, 280 S.W. 408 (Tenn. 1926); Fall & Cunningham v. Roper,
40 Tenn. 485 (1859); Johnson v. Walton, 33 Tenn. 258 (1853); Savings, Bldg., & Loan Ass’n v.


                                                   -6-
McLain, 76 S.W.2d 650 (Tenn. Ct. App. 1934). In Collins v. Binkley, this Court acknowledged in
a footnote that

              [w]hile no question has been raised on appeal as to whether the
              absence of a showing of the acknowledging officer's personal
              acquaintance with the grantor renders the acknowledgement [sic]
              void, it has been held in numerous cases that in the absence of such
              a showing, the acknowledgment is a nullity and so is the registration
              of the instrument. E.g., Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117
              (1916); Bells Administrators v. Lyles, 78 Tenn. 44 (1882); Henderson
              v. McGhee, 53 Tenn. 55 (1871); Harrison v. Wade, 43 Tenn. 505
              (1866).

750 S.W.2d 737, 738 n.1 (Tenn. 1988).

        The aforementioned cases, however, do not construe the meaning of Tennessee Code
Annotated section 66-26-113 after additions to the statutes governing acknowledgments in 1983.
In 1983, the General Assembly relaxed the requirements regarding the extent of a notary’s
knowledge of the identity of an individual who purports to acknowledge his or her signature on an
instrument. Such legislation added the phrase “(or proved to me on the basis of satisfactory
evidence)” after the words “with whom I am personally acquainted” in Tennessee Code Annotated
section 66-22-107(a). 1983 Public Acts, Ch. No. 158. This legislation also added subsections (b)
and (c) to Tennessee Code Annotated section 66-22-106, which provide as follows:

              (b) For purposes of this chapter, "know" or "personally acquainted
              with" means having an acquaintance, derived from association with
              the individual in relation to other people and based upon a chain of
              circumstances surrounding the individual, which establishes the
              individual's identity with at least reasonable certainty.

              (c) For the purposes of this chapter, "satisfactory evidence" means the
              absence of any information, evidence, or other circumstances which
              would lead a reasonable person to believe that the person making the
              acknowledgment is not the individual such person claims to be and
              any one (1) of the following:

              (1) The oath or affirmation of a credible witness personally known to
              the officer that the person making the acknowledgment is personally
              known to the witness.

              (2) Reasonable reliance on the presentation to the officer of any one
              of the following, if the document is current or has been issued within
              five (5) years:


                                               -7-
                   (A) An identification card or driver's license issued by the
                   department of safety; or

                   (B) A passport issued by the United States department of
                   state.

               (3) Reasonable reliance on the presentation of any one (1) of the
               following, if the document is current or has been issued within five
               (5) years and contains a photograph and description of the person
               named on it, is signed by the person, bears a serial or other identifying
               number, and, in the event that the document is a passport, has been
               stamped by the United States immigration and naturalization service:

                   (A) A passport issued by a foreign government;

                   (B) A driver's license issued by a state other than Tennessee;

                   (C) An identification card issued by a state other than
                   Tennessee; or

                   (D) An identification card issued by any branch of the armed
                   forces of the United States.

The General Assembly also added subsection (d) to Tennessee Code Annotated section 66-22-106,
which says “[a]n officer who has taken an acknowledgment pursuant to this section shall be
presumed to have operated in accordance with the provisions of this chapter.” (emphasis added).

        If a notary does not know an individual who intends to acknowledge a document, he or she
must verify the identity of that person by one of several methods enumerated in Tennessee Code
Annotated section 66-22-106(c). The notary in this case could not properly certify that Mr. Akins
personally appeared before her and made the necessary acknowledgment unless she knew him
personally or he proved to her that he was who he claimed to be. In light of the presumption codified
in Tennessee Code Annotated section 66-22-106(d), we must resolve any ambiguity as to whether
the notary in this case performed her duties in the manner prescribed by law in favor of the regularity
of the notary’s act. While the certificate of acknowledgment on the deed of trust in this case does
not include a recital that the notary personally knew the person who executed the deed, it can
reasonably be inferred that Mr. Akins was in some way known to the notary because she included
the word “unmarried” in the certificate. Therefore, the certificate of acknowledgment in this case
is valid because it satisfies the substantial compliance test.




                                                 -8-
                      Tennessee Code Annotated Section 66-22-114(b): Intent

         In addition to the substantial compliance test, Tennessee Code Annotated section
66-22-114(b) sets forth the independent “intent” test. Tennessee Code Annotated section
66-22-114(b) requires only that a certificate of acknowledgment clearly evidence the signer’s “intent
to authenticate, acknowledge or verify a document.” Despite a lack of language evidencing the
extent of the notary public’s knowledge of Mr. Akins’ identity, the certificate of acknowledgment
at issue in this case clearly shows Ronald L. Akins’ intent to acknowledge his signature on the deed
of trust. The notary states in the certificate of acknowledgment that “Ronald L. Akins, unmarried,
personally appeared before me this day and acknowledged execution of the foregoing instrument,”
and on the deed of trust itself the signature of Ronald L. Akins appears directly above a signature
line, below which are typed the words, “Ronald L. Akins, unmarried.” Thus, the certificate of
acknowledgment in this case meets the “intent” criterion of Tennessee Code Annotated section
66-22-114(b).


         Furthermore, the “intent” test substantially relaxes the pre-1987 requirements for certificates
of acknowledgment by directing that they be liberally construed. Tennessee Code Annotated section
66-22-114(b) explicitly provides that “no specific form or wording” is required in a certificate of
acknowledgment. Thus, it is no longer the case in Tennessee that “[t]he language [in a certificate
of acknowledgment] is prescribed and a probating officer has little if any discretion to vary the form
of the certificate.” McAllester v. Aldridge (In re Anderson), 30 B.R. 995, 1001 (Bankr. M.D. Tenn.
1983) (citations omitted). Therefore, consistent with the clear legislative mandate embodied in
Tennessee Code Annotated section 66-22-114(b) that “no specific form or wording” is required in
a certificate of acknowledgment and that “the determination of any other right or obligation, shall
not be affected by the inclusion or omission of any specific words,” we find that the certificate of
acknowledgment in this case is valid. In so holding, we give effect to the plain language of
Tennessee Code Annotated section 66-22-114(b) and avoid exalting form over substance.


         The law remains that a notary must verify the identity of a person appearing before him or
her to acknowledge a document. See Tenn. Code Ann. § 66-22-106. However, we hold that under
Tennessee Code Annotated section 66-22-114(b) the text of an acknowledgment need not explicitly
state that this function was performed. Of course, use of the statutorily prescribed forms is preferred.
Nonetheless, if an individual’s intent to acknowledge the document he or she signed is evident in
the certificate of acknowledgment, then the exact words and phrases recited in the statute are not
required.


                                   II. Second Certified Question


      As indicated above, the certificate of acknowledgment in this case is valid. Consequently,
we need not address the second certified question.


                                                  -9-
                                          CONCLUSION


         In response to the first certified question, we conclude that the certificate of acknowledgment
in this case is valid under Tennessee Code Annotated section 66-26-113 because it substantially
complies with the relevant statutory requirements. Furthermore, the certificate of acknowledgment
in this case meets the criterion in Tennessee Code Annotated section 66-22-114(b) in that it clearly
evidences the intent of the maker of the deed of trust to acknowledge his signature on the instrument.
Therefore, we hold that the deed of trust was properly acknowledged under Tennessee law and is not
voidable by a judicial lien creditor or a bona fide purchaser without notice. Because we conclude
that the certificate of acknowledgment in this case is valid, we need not address the second certified
question.


        Having answered the certified questions, we direct the Clerk to transmit a copy of this
opinion in accordance with Tennessee Supreme Court Rule 23(8). Costs in this Court are taxed to
the respondent, Richard P. Jahn, Jr., Trustee.




                                               ___________________________________
                                               JANICE M. HOLDER, JUSTICE




                                                 -10-
