Pugh v. Richmond

425 S.W.2d 789, 58 Tenn. App. 62, 1967 Tenn. App. LEXIS 210
CourtCourt of Appeals of Tennessee
DecidedDecember 1, 1967
StatusPublished
Cited by4 cases

This text of 425 S.W.2d 789 (Pugh v. Richmond) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pugh v. Richmond, 425 S.W.2d 789, 58 Tenn. App. 62, 1967 Tenn. App. LEXIS 210 (Tenn. Ct. App. 1967).

Opinion

PURYEAR, J.

For the sake of convenience in this complex case we will refer to the parties as they appeared in the Court below, wherein James Richmond, Jr., Douglas Gilmore, Van Gilmore, 8. Rondall Page, Carolyn R. Page, James B. Turner, Trustee, and Provident Trust Company, were complainants and A. E. Pugh, Dennis Wright, C. 0. Ingram, Trustee, James D. Jones and Doris Jones Realty Company were defendants.

We find an accurate statement of the ease contained in the Chancellor’s memorandum opinion and also in the defendants’ brief and we will closely follow these statements in briefly reciting the facts of the case in this opinion.

In August, 1963, the complainants, James Richmond, Jr., and Douglas Gilmore purchased from the defendants, A. E. Pugh and Dennis Wright eighteen lots, same being Lots numbers two through fourteen and Lots seventeen ■ through twenty-one, inclusive, Twin Bay Subdivision in Sumner County, Tennessee.

The purchase price was $56,000.00 of which $15,000.00 was paid in cash and for the balance of $41,000.00, Richmond and Gilmore executed a promissory note payable only to the grantor, A. E. Pugh, for the principal sum of $41,000.00.

The deed of conveyance, which is dated August 15, 1963, is a combination deed and trust deed in which a [65]*65lien was retained on the property therein conveyed for the purpose of securing payment of deferred purchase money of $41,000.00 and, under the trust provisions of such trust deed, Bichmond and Gilmore conveyed the property to O. O. Ingram, Trustee, for the purpose of securing the payment of the deferred purchase money.

There was a contract made between the parties which was incorporated into this deed and this contract made provisions for the release of lots from time to time upon certain terms and conditions stated as follows:

“Seller agrees to release such lots as the buyer may from time to time request upon the following terms:
(Here follows a schedule of lots and the value of each lot as agreed upon, and provided for payment of one-half the value of each lot in cash and the execution by Bichmond and Gilmore of a 90 day note for the other half).
The above mentioned 90 day notes are to he jointly and severally executed by the buyers and are to hear interest at the rate of 6% per annum. Said notes are to he secured by a second deed of trust.
Buyer agrees that on or before each six-month anniversary of the execution of the deed of conveyance to pay to seller an amount of cash necessary to release four (4) lots as per above Schedule. Seller will not execute further releases while any 90 day note is unpaid.
It is further agreed and understood by and between the seller and buyer, that the terms of this contract with reference to the release of Lots is to be incorporated into the deed of conveyance by reference.” (Tec.Bec. pp. 55, 56)

[66]*66Lots 5, 7, 18, 19 and 21 were released upon the date of execution of this deed in accordance with a provision in the contract for the release of five “off lake’’ lots and no value was placed on these lots.

Thereafter, from time to time, Richmond and Gilmore secured separate releases for Lots 3, 4, 6, 9, 12, 17 and 20 and on the occasion of each release, they made a cash payment and executed the 90 day note required by the contract and they apparently built houses on these released lots or sold them or secured construction loans on them. However, one of the checks they gave Pugh for a cash payment was returned by the bank upon which it was drawn because of insufficient funds.

This left lots 2, 8, 10, 11, 13 and 14 unreleased from the vendor’s lien retained in the aforesaid deed from Wright and Pugh to Richmond and Gilmore.

Some time in March or April, 1963, Richmond and Gilmore commenced construction of houses on Lots 11 and 14 and secured for themselves a loan from Provident Trust Company, on Lot 11 and executed a deed of trust to James B. Turner, Trustee, to secure this loan, which was in the principal amount of $17,000.00. Thereafter, Richmond and Gilmore conveyed Lot No. 14 to S. Rondall Page and wife, Carolyn R. Page, and the Pages also obtained a loan from Provident Trust Company in the sum of $19,000.00 and executed a deed of trust to James B. Turner Trustee, for the purpose of securing payment of this loan.

At the time of making these loans, Provident Trust Company secured title insurance on Lots 11 and 14 from Guaranty Title Company, of Nashville, Tennessee. The person who examined the title for Guaranty Title Com[67]*67pany overlooked the fact that these two lots had not been released from the vendor’s lien retained by Pugh. Therefore, the deeds of trust which Provident Trust Company had upon these lots to secure the payment of their loans were secondary to the lien retained by Pugh upon these lots and others conveyed in the deed from "Wright and Pugh to Richmond and Gilmore, but the fact that their deeds of trusts were secondary to that of Pugh was not at that time known by Provident.

The proceeds of these two loans on Lots 11 and 14 were used for the purpose of constructing houses thereon, hut the houses had not been completed at the time of the foreclosure sales which brought about the filing of this suit.

Richmond and Gilmore defaulted upon payment of their obligation to Provident Trust Company and also upon payment of their obligation to Pugh. Provident Trust Company proceeded to foreclose its deed of trust on Lot 11 and advertised the foreclosure sale to be held at the court house in Gallatin on October 23, 1964.

At about this same time, Pugh instructed Wright, who is an attorney, to proceed with foreclosure on all of the lots, including 11 and 14, which had not been released from the vendor’s lien to secure the deferred purchase money to him, which at that time was approximately $26,000.00.

On October 21, 1964, Mr. Wright went to the court house at Gallatin to check the status of title of the lots upon which Pugh had instructed him to foreclose. He was accompanied on this trip by Mr. Clarence Ingram, who was designated as trustee in the deed from Wright and Pugh to Richmond and Gilmore. While in Gallatin [68]*68on that occasion, "Wright discovered for the first time that Richmond and Gilmore had executed a deed of trust on Lot 11 to Provident Trust Company and had conveyed Lot 14 to the Pages, who in turn had executed a deed of trust to Provident Trust Company. Before leaving Gallatin, Wright and Ingram also discovered for the first time that Provident had advertised and was conducting a foreclosure sale on Lot 11 to be held in Gallatin on October 23, 1964.

Prior to that time, Wright and Ingram had advertised all of the lots unreleased from Pugh’s lien in the Nashville Record and they were proceeding to foreclose Pugh’s deed of trust by selling the property, including Lots 11 and 14 at the court house in Davidson County, Tennessee, on Saturday, October 24, 1964.

It was not until Wright instituted the foreclosure proceedings that he discovered the deed of trust to secure Pugh’s claim provided that the foreclosure sale was to be advertised and conducted in Davidson County instead of Sumner County, and in explaining why this was done Wright testified as follows:

“Q.

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Related

Ferrell v. Southern Financial, Inc. (In Re Ferrell)
175 B.R. 222 (W.D. Tennessee, 1994)
Holt v. Citizens Central Bank
688 S.W.2d 414 (Tennessee Supreme Court, 1984)
Watson v. United American Bank in Knoxville
588 S.W.2d 877 (Court of Appeals of Tennessee, 1979)

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Bluebook (online)
425 S.W.2d 789, 58 Tenn. App. 62, 1967 Tenn. App. LEXIS 210, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pugh-v-richmond-tennctapp-1967.