Title Tips by Tute
Volume 4, Number 2
I recently discovered a power of attorney during a title examination which struck me a just a little bit off. It was a clerk certified true copy from
another jurisdiction, and stated that it was prepared by the attorney in fact (the principal's niece) and was recorded immediately prior to the deed from the principal.
It gave a general grant of power, and then specifically covered specific transactions like real and personal property, banking, safe deposits, insurance, estates, tax, social security, borrowing, investing and reinvesting. In short, it looks like a typical general power of attorney.
It read as follows:
The undersigned . . . appoints . . . as my true and lawful Attorney-in-Fact, for me and in my name, place and stead, to do and perform for me anything of any character which I might do or perform if I were personally present and acting. Without in any way diminishing the broad general power just conferred, which is believed and intended to include all of the following, as well as other powers not mentioned, I specifically grant my Attorney-in-Fact all the powers set forth in the State of Virginia statutes pertaining to granting the Power of Attorney as they exist as of the date I execute this power, and in addition thereto, the following powers:
Real and personal Property Transactions. To lease, purchase, option, exchange and acquire; to agree, bargain and contract for the lease, purchase option, exchange and acquisition of; to accept, take, receive, collect, hold and possess any interest in real or personal property whatsoever . . . on such terms and conditions and under such covenants as my said Attorney-in-Fact shall deem proper.
I keep looking at this, and something just doesn't seem right. What do you think?
I agree that this is just a little bit off. Not to sound too much like an attorney, but this is what happens when people who don't know what they are doing try to draft legal documents.
I'm guessing this came from a forms supply house from out of state. One of the immediate observations is that it grants all the powers set forth in Virginia statutes governing powers of attorney. Virginia, being a minimalist jurisdiction when it comes to things like this, doesn't have a statute setting forth the default powers of an attorney in fact.
The discrepancy you see is in the real estate section. All the specific powers granted have to do with a person who is buying a property. The power of attorney lacks certain key words for a person who is selling property; words like
"sell, convey, or transfer" or concepts like "execute contracts and deeds." If the principal is competent, I would suggest you ask for a deed of confirmation from the principal. If she is not, then you may want to suggest your settlement attorney petition the court for a judicial ratification of the use of the power for a sale, because the express language of the power deals with a purchase. If she is deceased, another solution would be to record disclaimers or quitclaim deeds from her heirs.
Since the enumerated powers are not all of the powers granted, arguably the power is sufficient. The initial grant is of the power to do all things the principal might do if present. Without diminishing the broad general power granted, it goes on to enumerate certain specific powers believed to be included within the general grant. My suggestion is that you, or your settlement attorney, present this issue to the title insurance underwriter, and see if they will insure the transaction. They may want some affidavits or indemnities from the attorney in fact if the principal cannot act and the power must be used.
Keen observation. Internal discrepancies like that make the intent of the parties difficult to fathom, and that is guide that courts follow when they try to interpret ambiguous documents during the ensuing litigation.
I have an underwriting question based on a title report I just received. The title commitment was prepared in connection with the upcoming foreclosure of the property by the first deed of trust
noteholder. The deed of trust was recorded in 1989, and the debt was assumed by the current owner in 1993. The current owner has many judgments against him, including two from 1987. The title examiner suggested that all the judgments after 1989 would be wiped out by the foreclosure, but not the two from 1987. How come? With all the work we have had lately, I could be missing something, but I didn't think those two would survive foreclosure either.
Utterly and terribly exhausted
You are absolutely right. Since the two judgments do not show the United States of America as plaintiff (which is actually a separate question dealing with federal pre-emption of the state law regarding priority of liens), they will not survive foreclosure.
"BUT WAIT," cry the title examiners, "those judgments were docketed before the deed of trust was recorded." Be calm, Oh Best Beloveds, as Tute prepares to tell you a story.
Many years ago, there was a comic strip in the newspapers called "Li'l
Abner." It chronicles the lives of the inhabitants of the quiet hamlet of
Dogpatch, a town populated by any number of strange and remarkable people. Today's character was a ne'er do well by the name of Joe Bfstlk (or something like that). You may remember him, he was the character who always had a little tiny thundercloud over his head, regardless of what the weather was like, or whether he was indoors or out. You don't remember him? Oh, showing my age again, I suppose.
Well, do you remember the Peanuts character "Pigpen?" Wherever he goes, even if he just got out of the bath, he has a little cloud of dust and dirt which follows him everywhere he goes. Ah, this you remember, excellent. Well, judgments are just like the thundercloud in
"Li'l Abner" or the dust cloud in "Peanuts." If you've got them, they follow you around, night and day. Your creditors can't reach anything but you, until and unless you own some asset which they could levy and take away from you and sell in order to get back the money you owe them. It might be your car, or your computer system, or your real estate.
But in this case, Oh Best Beloveds (yes, I've been reading Rudyard Kipling again. You really should re-read
"How the elephant got its trunk," or "How the camel got its hump," or
"How the leopard got its spots." They are excellent! It has been a long time since Tute was down by the
"great grey green greasy Limpopo River, all set about with fever
trees"), the judgments did not attach to the house before the deed of trust being foreclosed.
OK, let's try to explain it this way. A bought the house in 1985. A was transferred and sold the house to B in 1989. B takes out a deed of trust to help pay for the purchase. No judgments yet . . . A and B didn't have any, so there were no dust clouds to mess up the title. B lives in the house until 1993, when a job promotion requires him to leave town, and there's the house, sitting vacant. Along comes C, a generally
"less than perfect" person, the sort of person who couldn't borrow a nickel from his mother. C gives B a few dollars cash money, and assumes the debt already in place.
SLAM. POW. ZING. KABLOWIE. In come all those judgments which had been following C around like yesterdays bad news.
"AH HA!" they say, "an asset to which we can attach." (very erudite these judgments)
But only, Oh Best Beloveds, from the date of C's purchase. Until C owns the real estate, the thunder cloud or the dust cloud must follow C around. They are wandering vagabonds, sort of like Captain Ahab in the story about the Great White Whale, or like the Israelites in the story of Moses, lost out in the dusty desert for 40 years. But come into the Garden, and suddenly (like a swarm of locusts) the judgments attach, and are they hard to get rid of.
For those of you who are more linear in your examples, imagine a clean white box in 1980; still clean and white in 1985; suddenly trashed in 1993, and still that way today.
The deed of trust trustee will take out his 1989-era fire hose/time machine and power washes the title. Using the mystical powers of the trustee, he washes away anything later in time than 1989, and the new purchaser receives a title which we have scrubbed and washed (and maybe thrown on a coat of white wash like Tom Sawyer) until it looks like new.
If you're an X Files fan, there is an even better analogy. It has to do with being abducted, frozen in a time stasis machine for several years, having little black boxes implanted in various portions of your body, and then released, just in time to graduate from the FBI Academy. It is just too weird, even for me.
What is the proper way for a corporate seller to sign a deed? I recently saw a deed from (the names have been changed to protect the innocent) AB Enterprises, Inc.. The deed was signed and notarized, but about the fourth time I looked at the deed, I noticed the hand written signature said
"ABEnterprises, Inc.," rather the signature of the officer, which was typed below
"By: Alpha Bet, President." The acknowledgment is a standard form which says Mr. Bet appeared before the notary and acknowledged the signature. Is this good enough?
We are a keen eyed group this month! Even after you pointed it out, it took me two tries to see that the signature wasn't Mr. Bet's name. While this is not the usual case, I think I would pass this one, too. (Work must be catching up with Tute and I am getting tired. I don’t think I've passed three questions in a row since I was still learning where the grantor's index was.)
There is, sad to say, no absolute requirement that you sign your own name to a deed. The requirement is that it be signed, and acknowledged before a notary public or similar public officer. From the context of the deed, it is clear that Mr. Bet appeared before the notary, and acknowledged that
"ABEnterprises, Inc.," was his signature. The deed's typewritten text states that Alpha Bet was the president of the corporation, an officer generally thought to be authorized to convey corporate assets in the ordinary course of business. I think we would all be a little more comfortable if Mr. Bet had signed his own name. Corporations act through individual officers; he was acting for the company, and the notary is presumed to have verified the identity of the person who appeared before him. If the deed is challenged in litigation, it may be difficult to prove that, since the notary's signature is illegible (and was not typed anywhere on the document), but his identity may be discovered by other means.
If the notary did not verify the identity, or even worse, acted in collusion with the signer of the deed to perpetuate a fraud, there was a recent case which suggested the notary could be facing civil liability for gross negligence or an intentional tort.
Butler v. Hayes, 254 Va. 38, 487 S.E.2d 229 (1997). For those who insist on citations, here are some regarding notaries:
§ 47.1-14. Duty of care. -- A notary shall exercise reasonable care in the performance of his duties generally. He shall exercise a high degree of care in ascertaining the identity of any person whose identity is the subject of a notarial act.
§ 47.1-26. Civil liability of notary. -- A notary public shall be liable for all damages proximately caused by his official misconduct.
§ 47.1-27. Civil liability of employer of notary. -- The employer of a notary public shall also be liable for all damages proximately caused by the official misconduct by such notary if:
1. The notary public was acting within the scope of his employment at the time such damages were caused; and
2. The employer had actual knowledge of, or reasonably should have known of, such notary's misconduct.
§ 47.1-28. Willful misconduct a misdemeanor. --
A. Any notary who knowingly and willfully commits any official misconduct under Chapter 5 (§ 47.1-24 et seq.) of this title shall be guilty of a Class 3 misdemeanor.
B. Any employer of a notary who willfully induces such notary to commit official misconduct under Chapter 5 of this title shall be guilty of a Class 3 misdemeanor.
That's it for this time folks. May the force be with you, and let's be careful out there, shall we? Say good night, Gracie.
"Good night, Gracie."