[legalxml-enotary] notarization literature search

[John Messing <jmessing@law-on-line.com>]

I am attaching a report from Dr. Leff on the results of his literature search on notarization. Many thanks to Dr. Leff for undertaking and completing this important task.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Dear Mr. Messing:

Again, thanks for the opportunity to work with
The OASIS Legal XML Member Section Electronic Notarization Technical Committee and
your soliciting my schedule information for participating in conferences.

Attached, please find a final copy of the text of the report on
a literature search related to notarization.   You will observe that the
report has more references and details--however, the gist of the report
is the same as in tp727.

However, I discovered that Florida repealed its statute
related to the electronic notary.

I am working with Mr. Winters on using the
OASIS DocBook-based templates for Legal XML work product.  When that is done,
I will reformat the enclosed material appropriately.

Sincerely yours,



Laurence L. Leff, Ph.D.
Associate Professor of Computer Science

cc: messing

                        Notaries and Electronic Notarization

1) The Civil Law tradition and history

In many countries, notaries put private transactions in proper legal
format,  authenticate them, and record them.   They often must be graduates
of law schools.  And in many countries, the government limits the number
of positions.  A very competitive exam is used to determine who could fill
such vacancies as do occur.   Thus, in these jurisdictions, notaries
are more prestigious.  In Japan, notaries are frequently former
judges and prosecutors.  [Clos97, Val99] 

These notaries are similar to the Roman tabelliones who drafted deeds and 
wills.  Later in Roman history, tabelliones were allowed to register 
acts directly into public archives without a court proceeding. [Clos97, Val99] 

2) The Modest Role of the American and Scottish Notary 

American notaries' duties were always modest.  At one time, they archived 
documents, and in many states could serve as a kind of public stenographer, 
taking the document down as it was dictated.    (Some state statutes, including
California, still give notaries the power to "take" documents.)
Another obsolete power is to verify the condition of shipped goods, once
important for transatlantic commerce in colonial times.
Washington State has given the notaries the power to "certify" that something
occurred. [Clos97, Val99]  Other states give notaries the authority to solemnize
marriages, inventory bank deposit boxes, and take renunciations of doweries.
[Jac96] also noted that Congress repealed the requirement that trademark
applications and some other federal paperwork be notarized.

The duties of the notary in Scotland are also modest--their services being
required in filing affidavits related to divorce and matrimonial homes.[BRA2000]

However, the "core duty" is to insure that a person who signs the document
is the person purported, is aware and is not under obvious duress.
In some states, another duty is to verify that the person has 
authority to sign the document.  This might include checking a power of 
attorney or partnership agreement.  However, other states such as 
California removed this function.
This creates a problem.  Sometimes, attorneys in state A insist that
a notary in state B certify capacity according to the forms of state A. [Val99]

3) Other potential duty for the notary

[Val99] also points out the National Notary Association notes the following
additional functions that would be useful in interstate and foreign commerce:
1) certifying facts about adoptive parents for foreign adoptions
2) certify that a pensioner receiving a foreign pension is still alive
3) certifying true copies of documents
4) certifying photographs for renewing a foreign passport 
5) certifying age for ordering products such as cigarettes.
[Kor99] also observes that other nations often require suitable validation
of foreign documents including the transfer of real estate, transfers of
corporate shares, wills, trusts,   [Open2000] argues for the use of standard
messages to be used to add people to electronic mailing lists.

Doctors taking the United States Medical Licensing Exam must have 
a notarized photography with a notary seal.  Originally, the language,
"I certify that the  photograph and signatue on this form accurately apply
to the person named above."  Unfortunately notaries did not have the statutory
authority to so certify.   However, the National Board of Medical Examiners
and the National Notary Association worked out the language:

"I certify that on the date set forth below the individual named above did
appear personally before me and that I did identify this applicant by
(a) comparing his/her physical appearance with the photograph on the identifying
document presented by the applicant and with the photograph affixed hereto,
and (b) comparing the applicant's signature made in my presence on this form
with the signature on his/her identifying document."  Mail Order tobacco
companies use notaries to "verify" age using the follownig contortion.
They have the notary identify the purchaser, and copy the age onto the form.
California statutes also provides that notary public check identifying 
information and ages in jurat's against the documents.  [Val99]

4) Electronic Notary Statutes

Florida and Utah have already created statutes authorizing "electronic notaries"who would certify digital signatures (Vall 1998, Lex 2002) These became
Florida statutes section 117.20.  

However, Florida repealed this section in 1998 [West 02].
To become an electronic notary, the person would have to be commissioned
as a regular notary and be issued a private/public key by a certification
authority.  The Florida Secretary of State would "amend" their certificate.
Note, that such notaries would still have to have the person personally
appear and keep a sequential journal of all acts performed.

Arizona also established an electronic notarization.
(Title 41, Chapter 2, Article Three, Arizona Revised Statutes) [Arizona 2002]

Arizona's statute provides for notarization in the presence of the "electronic
notary. 

An electronic notarized document
prepared in the presence of the notary
is required by the statute to contain 
1) the document 
2) time and date stamp 
3) an electronic notary token.
4) signature or mark affixed to the document by the signer.
5) date that the electronic notary commission expires

The electronic notary would have to keep a public record of their acts.

It also allows the electronic notary to give a person a token
by which they can later notarize their own documents without going to
the notary again.  The electronic notary would be responsible for ensuring 
that the party requesting one understands the significance of 
their "notary service electronic signature certificate."

When the person uses their notary service electronic certificate, it would
contain:
1) the document itself
2) the notary service token given to them by their notary
3) a time stamp provided by an "approived time stamp token provider"

The statute also provides for electronic acknowledgments, jurats, and
oaths or affirmations.

[Val99] also notes the relationship between notaries and certificate 
authorities, and notes that Verisign uses notaries to issue its "highest
class of digital ID."  Puerto Rico [Garc 2000] has its Department of State 
register certificate authorities, and has them audited regularly by both 
accountants and experts in computer security.

The certificate authority must check that the person
a) is the party they purport to be
b) they are an authorized agent 
c) the information is correct
d) the subscriber has an appropriate and working private key

The Department can order the certificate authority to revoke certificates
when they do not comply with the law and pose a risk on those who might
rely on them.  The certificate authority might set maximum limits of 
liability.

4) Proposals for a "Cybernotary"

The American Bar Association's Information Security Committee conceived
of a "CyberNotary" who would have both computer and legal specialist.  
They would be similar status to the Latin notaries  and whose main
purpose would be facilitating international commerce [Val99, Jac96].

[Clos97] conceives that the cybernotary role "would be to bind the private
key of the particular sender with the public key of the intended recipient"
and to envelope the entire transaction in an "umbrella of trust."
[Clos97] also concives that the cybernotary would verify the financial
repsonsibility and legal capacity of the parties--leading to the requirement
that electronic notaries be attorneys.  [BRA2000] advocates Scottish 
cybernotaries to verify identity of the parties for electronic 
commerce.

[Kor99] conceives that the Cybernotary can authenticate a document
1) validating its legal contents
2) validating the digital signature
3) validating the identity of the signer
4) validating the capacity of the signer
5) validating the authority of the signer
5) and including the validation of the digital certificate

For example, when an electronic power of attorney is executed and digitally 
signed before a CyberNotary, the CyberNotary will cause an authentication 
message to be appended to the power of attorney validating its legal contents, 
the digital signature used to sign it, as well as the identity, capacity and 
authority of the signing party to execute it and the digital certificate used 
to certify the signer's public key. 

5) Miscellaneous Information

Florida also created a "civil-law notary" who must be a member of the Bar, and
who could issue "authentic acts."  This certifies not only documents, but
transactions, events, conditions or occurrences.  (FLA STAT 118.10)
This is a separate title from both regular notary or cybernotary.  [West02]
Also, the Secretary of State is authorized to issue a certification of
a particular civil law notaries which explains the legal meaning of the
civil-law notarie's certification.

On a related subject, [Val99] noted that many of the  state statutes restrict
notarial fees to very low amounts They also require very small surety bonds.
State set a required bond that ranges between $500.00 and $15,000. no more than a thousand dollars [Clos97,Val99].  No state requires errors and
ommissions insurance [Clos97]. In some cases, the amount of 
these fees have not changed since the state joined the Union.

References:

[Ariz 2002] Arizona State Legislature, Arizona Revised Statutes,
(http://www.azleg.state.az.us/ars/ars.htm), 2002.

[Brand2000] Brand, D. A. "New Life for Notaries? The Challenges for E-Commerce"
The Juridical Review, 2000 Part Three, 149-57.
 
[Clos97] Closen, M. L., Richards, R. J., "Notaries Public--Lost in Cyberspace
or Key Business Professionals of the Future?" John Marshall Journal of
Computer and Information Law Vol XV 1997, 703-758

[Garc2000] Colon Garcia, A . J. "La Ley de Firmas Digitales De Puerto Rico
y el desarollo del notario cibernetico," 39 no 1 Jan/April 2000.

[Jac96] Jacombs, M. A., "Will Notaries Still Reign Over Red Tape When
Documents Move Electronically?"  Wall Treet Journal March 12 1996, B1,6.

[Kor99] Kornowski, J., "The Specter of the CyberNotary: Science Fiction
or New Legal Specialty? (http://www.lacba.org/lalawyer/tech/notary.html), 1999.

[Lex02] LexisNexis State Capital, Florida Bill Tracking ,
(http://web.lexisnexis.com/stcapuniv) 

[Open2000] Open Interchange Consortium, The Role of an Electronic Notary,
Project: Building Consumer Confidence in E-Commerce: Best Practice Model
for business: Discussion Paper 19/01/2000, Document A2ECPAD1, 
http://www.oic.org/3b1a4.htm

[VAL99] Valera, M. G.,
"New Technology and a Global Economy Demand that American Notaries
better Prepare for the Future: Upgrading the Current Common Law
System May Mean Establishing a New Class of Cyber Professional," 
John Marshall Law Review, Summer 1999 32(4), 935-964 

[West02] West's Florida Statutes Annotated, West Group, 2002