A recurring underwriting question is whether it is appropriate for a notary to “take the signature” of a related party.
The short answer is No.
While Executive Law (§§ 134 through 138) does not specifically prohibit such an act,1 case law holds that “Because of the probative force accorded to the certificate of acknowledgment, as well as the usually important consequences of the instrument itself, public policy forbids that the act of taking and certifying the acknowledgment should be exercised by a person financially or beneficially interested in the transaction.” 2
If it is apparent that the acknowledging officer is related by blood or otherwise to the party whose signature he/she has acknowledged, you must call Company underwriting counsel. The underwriting issue will come down to whether the notary has a current or future beneficial or financial interest in the transaction, and, as importantly, whether the testimony of such a notary would stand up in litigation were the authenticity of the signature to be challenged.
1 • Section 135 of the Executive Law, provides that a notary who is also an attorney duly admitted to practice in this state “…may, in his discretion, administer an oath or affirmation to or take the affidavit or acknowledgment of his client in respect of any matter, claim, action or proceeding”
2 • Armstrong v. Combs, 15 App. Div. 246, 44 N.Y.S. 171, cited by People ex rel. Erie R. Co. v. Board of R.R. Commissioners, 105 App. Div. 273, 93 N.Y.S. 584