Chapter 1
Estates in Property

Part 1
General Provisions

66-1-101. Words of inheritance unnecessary to create fee.

The term “heirs,” or other words of inheritance, are not requisite to create or convey an estate in fee.

Code 1858, § 2006 (deriv. Acts 1851-1852, ch. 33); Shan., § 3672; Code 1932, § 7597; T.C.A. (orig. ed.), § 64-101.

Cross-References. Forms of conveyances, § 66-5-103.

Limitation of real actions, title 28, ch. 2.

Textbooks. Tennessee Jurisprudence, 9 Tenn. Juris., Deeds, §§ 24, 27; 11 Tenn. Juris., Estates, § 4; 25 Tenn. Juris., Wills, § 132.

Law Reviews.

Bringing Tennessee into the Twentieth Century Re Possibilities of Reverter, Powers of Termination and Executory Interests When Used as Land Control Devices (Nicholas L. White), 15 Mem. St. U.L. Rev. 555 (1985).

Complexity in Property, 81 Tenn. L. Rev. 79 (2013).

Property: A Bundle of Sticks or a Tree?, 66 Vand. L. Rev. 869  (2013).

Retelling Allotment: Indian Property Rights and the Myth of Common Ownership, 54 Vand. L. Rev. 1559 (2001).

NOTES TO DECISIONS

1. Conveyances or Devises Without Words of Inheritance — Effect of Statute.

Devises in this state, without words of inheritance or the use of the term “heirs,” always passed the devisor's entire estate in the land, and operated to pass a fee simple estate, if the devisor owned such estate in the land, unless the contrary intent plainly appeared in the will. Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844); Thurston v. University of North Carolina, 72 Tenn. 513, 1880 Tenn. LEXIS 55 (1880); King v. Miller, 79 Tenn. 633, 1883 Tenn. LEXIS 117 (1883); Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Since the enactment of §§ 65-1-101 and 66-5-101, an absolute fee simple estate in land may be conveyed to the grantee, without the use of the word “heirs” or other words of inheritance. Wynne v. Wynne, 56 Tenn. 308, 1872 Tenn. LEXIS 146 (1872); Topp v. White, 59 Tenn. 165, 1873 Tenn. LEXIS 43 (1873); Hurd v. French, 2 Cooper's Tenn. Ch. 359 (1875); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908); Travis v. Sitz, 135 Tenn. 156, 185 S.W. 1075, 1915 Tenn. LEXIS 192, L.R.A. (n.s.) 1917A671 (1915); Remke v. Remke, 11 Tenn. App. 301, 1929 Tenn. App. LEXIS 90 (1929).

This section and § 66-5-101 did not change the effect of the use of words of inheritance, but merely provided that they were not necessary to create an estate in fee. Graves v. Graves, 3 Tenn. App. 439, 1926 Tenn. App. LEXIS 121 (1926); Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939); Hamby v. Northcut, 25 Tenn. App. 11, 149 S.W.2d 484, 1940 Tenn. App. LEXIS 87 (Tenn. Ct. App. 1940).

The purpose of §§ 66-1-101 and 66-5-101 was to abolish the common law rule requiring words of inheritance as an indispensable prerequisite to the creation of an absolute estate in fee simple. Nichols v. Todd, 20 Tenn. App. 564, 101 S.W.2d 486, 1936 Tenn. App. LEXIS 48 (Tenn. Ct. App. 1936); Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

Since the passage of §§ 66-1-101 and 66-5-101, a grant to “A” or to “A and his heirs” means one and the same thing and vests in the grantee the same quantum of interest. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

As a result of §§ 66-1-101 and 66-5-101, a fee passes without the use of the word “heirs” or other words of inheritance, unless the intent to pass a less estate appears. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

The vestiture of title “in Mary Hamby,” and the vestiture of title “in Mary Hamby and her heirs,” would be, in legal effect, precisely the same; and either would purport to vest in Mary Hamby an absolute title in fee. Hamby v. Northcut, 25 Tenn. App. 11, 149 S.W.2d 484, 1940 Tenn. App. LEXIS 87 (Tenn. Ct. App. 1940).

2. Rule at Common Law.

At common law, and before the enactment of §§ 66-1-101 and 66-5-101 a conveyance of land without words of inheritance vested only a life estate; and to create an absolute estate in fee simple, it was indispensable that the land be conveyed to the grantee and his heirs, although the deed purported to convey the land to the grantee forever, or to him and his assigns forever. This was a rule of property. Hunter v. Bryan, 24 Tenn. 47, 1844 Tenn. LEXIS 12 (1844); Cromwell v. Winchester, 39 Tenn. 389, 1859 Tenn. LEXIS 233 (Tenn. Apr. 1859); McKinney v. Stacks, 53 Tenn. 284, 1871 Tenn. LEXIS 358 (Tenn. Oct. 7, 1871); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

At common law, a conveyance of land without words of inheritance vested only a life estate, and to create an absolute estate in fee simple, it was indispensable that the land be conveyed to the grantee and his heirs, although the deed purported to convey the land to the grantee forever or to him and his assigns forever. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

3. Intent — Ascertainment — Effectuating.

Under §§ 66-1-101 and 66-5-101, the courts look to the whole of the instrument, without reference to formal common law divisions of deeds and common law rules of construction in order to ascertain the intention of the parties, and will not allow technical rules to override the intent. Kirk v. Burkholtz, 3 Cooper's Tenn. Ch. 421 (1877); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908); Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911); Brier Hill Collieries v. Gernt, 131 Tenn. 542, 175 S.W. 560, 1914 Tenn. LEXIS 126 (1915); Laurenzi v. Atlas Ins. Co., 131 Tenn. 644, 176 S.W. 1022, 1915 Tenn. LEXIS 135 (1915); Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

The entire “terms of the instrument” may be considered in order to ascertain the estate actually intended to be vested in the grantee. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Brier Hill Collieries v. Gernt, 131 Tenn. 542, 175 S.W. 560, 1914 Tenn. LEXIS 126 (1915); Nashville, C. & S. L. R. Co. v. Bell, 162 Tenn. 661, 39 S.W.2d 1026, 1931 Tenn. LEXIS 84 (1931).

In determining what estate the grantor intended to convey, the deed as a whole is to be considered and the intention of the grantor gathered by giving all the words used their appropriate meaning. Nashville, C. & S. L. R. Co. v. Bell, 162 Tenn. 661, 39 S.W.2d 1026, 1931 Tenn. LEXIS 84 (1931); Pryor v. Richardson, 162 Tenn. 346, 37 S.W.2d 114, 1930 Tenn. LEXIS 96 (1930); Lockett v. Thomas, 179 Tenn. 240, 165 S.W.2d 375, 1942 Tenn. LEXIS 17 (1942); Baird v. Southern Ry., 179 Tenn. 366, 166 S.W.2d 617, 1942 Tenn. LEXIS 32 (1942); Archer v. Culbertson, 28 Tenn. App. 52, 185 S.W.2d 912, 1944 Tenn. App. LEXIS 61 (1944).

The merger of an equitable title into the legal title will not be permitted where the result will be to defeat the intention of the grantor or testator. Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562, 1933 Tenn. LEXIS 4, 92 A.L.R. 343 (1933).

In determining whether an instrument is testamentary in character or a deed, the intent of the grantor is controlling. Wright v. Huskey, 592 S.W.2d 899, 1979 Tenn. App. LEXIS 368 (Tenn. Ct. App. 1979).

4. “Assigns” — Use or Omission of Word — Effect.

The use of the word “assigns” in the granting clause and habendum of a deed imports an intention to give the grantee the power to sell and dispose of the property, and, therefore, creates a fee simple estate in the grantee. Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Failure to express “assigns” in conveyance will not defeat curtesy. Travis v. Sitz, 135 Tenn. 156, 185 S.W. 1075, 1915 Tenn. LEXIS 192, L.R.A. (n.s.) 1917A671 (1915).

5. Quitclaim Deed — Effect.

A quitclaim deed conveys all the title then held by the grantor unless its language renders that construction impossible. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

In allowing the witness to testify that it was not the witness's intention to release whatever interest held in the property via the quitclaim deed, the bankruptcy court permitted the witness to contradict the quitclaim deed in violation of the parol evidence rule. Joyner v. Johnson, 187 B.R. 598 (E.D. Tenn. 1994).

6. Conflicting Parts of Deed or Will — Construction.

The first clause in a deed when in conflict with a subsequent clause, and the last clause in a will when in conflict with a preceding clause, must prevail; but this is only where there is an irreconcilable repugnance, and both clauses in the deed or will cannot stand. There is no such repugnance where the last clause in a deed does no more than extend and enlarge the first clause. Meredith v. Owen, 36 Tenn. 223, 1856 Tenn. LEXIS 86 (1856); Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Where the premises convey a life estate, and the habendum enlarges such estate to an absolute estate, the habendum is not repugnant to the premises, because it only extends and enlarges the estate given by the premises. Meredith v. Owen, 36 Tenn. 223, 1856 Tenn. LEXIS 86 (1856); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Where the husband's deed, by its premises, conveyed land to his wife, “and her heirs in fee simple forever,” and, by its first habendum, limited it to her sole and separate use and benefit, “with power to sell, and, by deed made and executed jointly with her husband, convey the said lot of land, and vest the proceeds in other property, to be held for the same sole and separate use as the property herein conveyed,” with the additional provision that, if the husband survived the wife, the land should revert to him in fee simple; and, by its second habendum, limited the land to the wife “and her heirs forever,” the husband, surviving the wife, takes the land, because such was manifestly the intention of the parties. Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Where granting clause conveyed property to husband and wife, and habendum recited that the conveyance was to husband and wife as joint tenants for the period of their lives and upon their death the survivor was to take the estate in fee simple, and further provided that during their lives the land could be conveyed by their joint deed, the deed construed as a whole indicated an intention to vest the grantees a joint estate in fee. Hamilton v. Fowler, 99 F. 18, 1899 U.S. App. LEXIS 2790 (6th Cir. Tenn. 1899), cert. denied, 176 U.S. 685, 20 S. Ct. 1027, 44 L. Ed. 639, 1900 U.S. LEXIS 2769 (1900), cert. denied, Hamilton v. Fowler, 176 U.S. 685, 20 S. Ct. 1027, 44 L. Ed. 639, 1900 U.S. LEXIS 2769 (1900).

Where the granting clause of a deed conveyed land to the grantees, “their heirs and assigns forever,” with the exception of a homestead therein for the grantors, and the habendum was to the grantees “their lifetime and then to their heirs and assigns forever,” the granting and habendum clauses were wholly repugnant, and not being reconcilable by the aid of the context showing the grantor's intention, the granting clause creating a fee simple estate will prevail over the subsequent habendum granting a less estate. Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908). See Laurenzi v. Atlas Ins. Co., 131 Tenn. 644, 176 S.W. 1022, 1915 Tenn. LEXIS 135 (1915).

Where there is an irreconcilable conflict or repugnancy between the premises of a deed and its habendum, the former prevails. Ballard v. Farley, 143 Tenn. 161, 226 S.W. 544, 1920 Tenn. LEXIS 5 (1920); Hicks v. Sprankle, 149 Tenn. 310, 257 S.W. 1044, 1923 Tenn. LEXIS 101 (1924).

7. Subsequent Words Cutting Down Fee.

An estate granted absolutely will not be cut down or destroyed by a subsequent clause in the habendum, which, if it raises any doubt, will be resolved against the limitation and in favor of the estate. Hicks v. Sprankle, 149 Tenn. 310, 257 S.W. 1044, 1923 Tenn. LEXIS 101 (1924).

Where there is primarily a clear and certain devise of a fee about which the testamentary intention is obvious and without ambiguity the estate thus given will not be cut down or lessened by subsequent words which are ambiguous or of doubtful meaning. Smith v. Reynolds, 173 Tenn. 579, 121 S.W.2d 572, 1938 Tenn. LEXIS 45 (1938).

Where granting clause provided for the conveyance of a certain tract of land to a named grantee and the habendum defined the estate granted as “in fee simple” but contained the immediate qualification that if the grantee did not dispose of the property in his lifetime and died seized and possessed thereof, then the fee simple was to pass to the grantee's daughter if she was living at the grantee's death, and where such daughter survived the grantee, the daughter took the land in fee simple on death of the grantee even though the grantee undertook to otherwise dispose of the property by will. Lockett v. Thomas, 179 Tenn. 240, 165 S.W.2d 375, 1942 Tenn. LEXIS 17 (1942).

Courts refuse to cut down an estate already granted in fee or absolutely, when the supposed terms of limitation are to be found in some subsequent portion of the will, and are not, in themselves, clear, unmistakable and certain, so that there can be no doubt of the meaning and intention of the testator. Whitfield v. Butler, 30 Tenn. App. 221, 204 S.W.2d 537, 1947 Tenn. App. LEXIS 79 (1947).

A fee simple title granted in one clause of a will without any power of disposition may be cut down or limited in a subsequent clause by express terms or necessary implication. Whitfield v. Butler, 30 Tenn. App. 221, 204 S.W.2d 537, 1947 Tenn. App. LEXIS 79 (1947).

Where testatrix conveyed her home to the devisee “to live in and not to be sold” the court concluded that testatrix's will passed a fee simple absolute in the home to the devisee, and the attempted restraint on alienation was declared void as inconsistent with the incidents and nature of the estate devised and contrary to public policy. White v. Brown, 559 S.W.2d 938, 1977 Tenn. LEXIS 656 (Tenn. 1977).

8. Doubtful Expressions — Construction.

Following the description, a deed provided: “This conveyance is made to the said Helen C. Graves for the sole use and benefit of herself and her heirs at her death and not to be subject in any way to the debts of her husband. The right to control the same during my natural life is hereby retained.” The remainder of the deed was in the regular form of a warranty deed. Such deed conveyed a fee-simple title. Graves v. Graves, 3 Tenn. App. 439, 1926 Tenn. App. LEXIS 121 (1926).

If the expression in the will is doubtful, the doubt is resolved against the limitation and in favor of the absolute estate, and clause in will of childless wife bequeathing to her husband all her property, real and personal, “to be used by him for his support and comfort during his life” conferred absolute estate upon the husband. Green v. Young, 163 Tenn. 16, 40 S.W.2d 793, 1931 Tenn. LEXIS 87 (1931).

Where the will of a testator aged 94 years, whose children resided with him, devised first the use, improvements, income of his dwelling-house, lands and appurtenances to his children “for and during their natural lives,” and then devised and bequeathed “all the residue of my estate personal or mixed of which I shall die seized or possessed” to his children, followed by pecuniary bequests to grandchildren, and concluding with a bequest to his children of all remainder of “my money at my decease,” the proper construction gives the remainder in the lands to the children, there being no gift over. Williams v. Williams, 167 Tenn. 26, 65 S.W.2d 561, 1933 Tenn. LEXIS 3 (1933).

Doubt as to meaning of a will will be resolved against a limitation and in favor of the vesting of an estate absolute. The testator is presumed to dispose of his entire estate and not to die intestate as to any part or interest therein. Williams v. Williams, 167 Tenn. 26, 65 S.W.2d 561, 1933 Tenn. LEXIS 3 (1933); Cannon v. Cannon, 182 Tenn. 1, 184 S.W.2d 35, 1944 Tenn. LEXIS 294 (1944).

A deed to “Robert L. Johnson and wife Dortha Jane Johnson and her Dortha Jane Johnson's heirs and assigns” vested an estate in fee in the husband and wife as tenants by the entireties as against the contention that the phrase “and her Dortha Jane Johnson's heirs and assigns” manifested an intention to create in the grantees an estate of joint tenancy or tenancy in common, and the latter words were surplusage. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

Will by uneducated man in his own handwriting which read “I want my wife … to then take in her perseson the remainder of all of my property boath real and personal and use as her Own for her surpoard in any way that her needs require until her death” vested the fee in the widow. Cannon v. Cannon, 182 Tenn. 1, 184 S.W.2d 35, 1944 Tenn. LEXIS 294 (1944).

Where grantor transferred land by deed to wife for and during her natural life and upon her death to his daughter if then living or if daughter was dead “to her children then living, or the representatives of such as may be dead, and in the event of the death of … (the daughter) … dying without children, or the representatives of such, then in the event said land is to revert back to my legal heirs…” vested a fee simple absolute in the daughter upon her surviving her mother. Templeton v. Stong, 182 Tenn. 591, 188 S.W.2d 560, 1945 Tenn. LEXIS 257 (1945).

Provision in will providing for division of real estate of testator between two sons after the death of his widow and providing that “if either or one of my sons, or both of them should die without children born to them” the land should go to his stepchildren meant death of one or both of the sons within the lifetime of the testator, and where the sons survived the testator both married son with children and unmarried son without children took an undivided half interest in the realty in fee upon death of the widow. Johnson v. Painter, 189 Tenn. 307, 225 S.W.2d 72, 1949 Tenn. LEXIS 430 (1949).

The words “I give to my daughter all of my property” was sufficient to convey a fee simple title. Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976), aff'd, Harris v. Bittikofer, 562 S.W.2d 815, 1978 Tenn. LEXIS 593 (Tenn. 1978).

9. Conveyances Passing Whatever Interest Grantor Has.

The deed of an executor, conveying “all the right, title, and claim” of his testator holding under registered tax deed purporting to convey the fee, is an assurance of title. Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911).

One who makes a deed conveying all his right, title, estate, and interest in certain described lands, or who uses equivalent words, necessarily refers to his title papers, and the deed conveys whatever interest those title papers show that he has; and where his title papers do not convey a title to him in fact and law, but only purport to do so, the effect would be the same, that is, the deed would carry whatever force or effect such assurance has under our statutes of limitation. Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911); Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912); Brier Hill Collieries v. Gernt, 131 Tenn. 542, 175 S.W. 560, 1914 Tenn. LEXIS 126 (1915); Sequatchie Land Co. v. Sewanee Coal, Coke & Land Co., 137 Tenn. 313, 193 S.W. 106, 1916 Tenn. LEXIS 78 (1916).

Where a deed conveyed “all right, title, claim, and interest being an undivided one half interest in certain lands,” the whole estate in the lands, as such, was conveyed so far as the grantor was concerned, because an instrument should be construed against the grantor where the description of the quantity of the estate affected is doubtful, and where property is sufficiently described as a whole, the description is not restricted by a further general statement which may be given a construction inconsistent with the prior inclusive words of grant. Sequatchie Land Co. v. Sewanee Coal, Coke & Land Co., 137 Tenn. 313, 193 S.W. 106, 1916 Tenn. LEXIS 78 (1916); Pipkin v. Lentz, 49 Tenn. App. 206, 354 S.W.2d 87, 1961 Tenn. App. LEXIS 153 (1961).

10. Executory Devisees or Contingent Remaindermen — Estates Conveyable.

Conveyances by executory devisees and contingent remaindermen may be operative to pass or convey the after acquired estate, interest, or title, if there be a general warranty of title, because such warranty operates as an estoppel to deny the title of the warantee. Henderson v. Overton, 10 Tenn. 394, 1830 Tenn. LEXIS 8, 24 Am. Dec. 492 (1830); Robertson v. Gaines, 21 Tenn. 367, 1841 Tenn. LEXIS 20 (1841); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883); Coal Creek Mining & Mfg. Co. v. Ross, 80 Tenn. 1, 1883 Tenn. LEXIS 133 (1883); Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890); Bruce v. Goodbar, 104 Tenn. 638, 58 S.W. 282, 1900 Tenn. LEXIS 38 (1900); Taylor v. Swafford, 122 Tenn. 303, 123 S.W. 350, 1909 Tenn. LEXIS 24, 25 L.R.A. (n.s.) 442 (1909); Bird v. Cross, 123 Tenn. 419, 131 S.W. 974, 1910 Tenn. LEXIS 15 (1910); Ferguson v. Prince, 136 Tenn. 543, 190 S.W. 548, 1916 Tenn. LEXIS 160 (1916).

The deed of conveyance of land by the executory devisees in the estate, who are ascertained and named, or the deed by the contingent remaindermen, operates to pass their present and future estate or interest acquired upon the happening of any contingency provided for in the will or deed, unless a contrary intent appears. The grantee steps into their shoes, taking their chances for future interests as well as their present estate. Bruce v. Goodbar, 104 Tenn. 638, 58 S.W. 282, 1900 Tenn. LEXIS 38 (1900).

Where daughter took life estate only, with remainder to children, and, in default of surviving children, to brothers and sisters, partition deed from such brothers and sisters conveying all their interest held valid conveyance divesting them of all rights as contingent remaindermen in grantee's estate. Frank v. Frank, 153 Tenn. 215, 280 S.W. 1012, 1925 Tenn. LEXIS 21 (1926).

11. Equity or Redemption — Conveyances Passing.

The conveyance of land in fee, without reservation of any right or interest, operates to pass the grantor's entire interest in the land, and includes his right of redemption, existing under a mortgage or execution sale, though not specially mentioned. Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

12. Vested Remainder — Devise Passing.

A devise of all of testator's “personal property and real estate” passes a vested remainder estate the right to the possession and enjoyment of which has not accrued because the property is still held by the life tenant who survived the testator. Davis v. Bawcum, 57 Tenn. 406, 1873 Tenn. LEXIS 223 (1873).

13. Homesteads and Dower — Conveyances Passing.

Under a deed of conveyance of land, either absolute or as a security for debt, executed by a husband and wife, and duly acknowledged as required by law, or under a judicial decree or judgment in a suit to which the husband and wife are both parties, divesting the title out of them and vesting the same in others, their right of homestead, and the wife's inchoate right to dower, pass to the grantee under the deed, or to the party in whom the title is vested by such decree or judgment, although the deed contains no express stipulation conveying the homestead and dower, and the decree or judgment does not in terms mention the homestead and dower. Lover, Strouse & Co. v. Bessenger, 68 Tenn. 393, 1876 Tenn. LEXIS 28 (1876); Atwater v. Butler, 68 Tenn. 299, 1878 Tenn. LEXIS 13 (1878); Crook v. Lunsford, 70 Tenn. 237, 1879 Tenn. LEXIS 165 (1879); Daly v. Willis, 73 Tenn. 100, 1880 Tenn. LEXIS 90 (1880); Fogg v. Yeatman, 74 Tenn. 575, 1880 Tenn. LEXIS 295 (1880); Nichol v. County of Davidson, 76 Tenn. 389, 1881 Tenn. LEXIS 23 (1881); Parr, Nolen & Co. v. Fumbanks, 79 Tenn. 391, 1883 Tenn. LEXIS 77 (1883), overruled, White v. Fulghum, 87 Tenn. 281, 10 S.W. 501, 1888 Tenn. LEXIS 60 (1889); Smith v. Carter Bros. & Co., 84 Tenn. 527, 1886 Tenn. LEXIS 140 (1886), superseded by statute as stated in, In re Wilson, 347 B.R. 880, 2006 Bankr. LEXIS 1766 (Bankr. E.D. Tenn. 2006); Hall v. Fulghum, 86 Tenn. 451, 7 S.W. 121, 1887 Tenn. LEXIS 61 (1888).

The express conveyance or release of either the homestead or dower in a deed of trust or mortgage leaves the right to the one not so expressly conveyed or released unaffected, for the express conveyance of one is the exclusion of the other. Atwater v. Butler, 68 Tenn. 299, 1878 Tenn. LEXIS 13 (1878); Daly v. Willis, 73 Tenn. 100, 1880 Tenn. LEXIS 90 (1880).

The wife's right to homestead was not defeated by the fact that her husband made to her a voluntary conveyance of the homestead property, which conveyance was subsequently set aside at a suit by the husband's creditors, as the conveyance was merely fraudulent in law; thus her application for assignment of homestead was not barred, after remand to execute the decree, there being no question of homestead made in the original pleadings. Rosenbaum v. Davis, 106 Tenn. 51, 60 S.W. 497, 1900 Tenn. LEXIS 132 (1900).

Where the decree in divorce proceedings is silent upon the question, the homestead will, upon the dissolution of the marriage, remain in possession of the party holding the legal title thereto, discharge from all homestead rights or claims of the other party; thus, a divorced wife could not subsequently, in an independent suit, assert her right to homestead against the husband or his vendee. Moore v. Ward, 107 Tenn. 731, 64 S.W. 1087, 1901 Tenn. LEXIS 125 (1901).

14. Conveyances and Devises to Married Women.

Where property was conveyed to trustees, by the first clause to the mother, and by the second clause “for the only proper use, benefit, and behoof of the said” mother and her children, and by the last clause to the mother and her heirs, these clauses gave her the sole and entire right, and created in her a separate estate, free from the rights of her husband, and her children took no estate in the property. Moore v. Simmons, 39 Tenn. 545, 1859 Tenn. LEXIS 272 (Tenn. Apr. 1959); Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879).

A devise to a married woman and the heirs of her body created an estate tail at common law, but gave her, under § 66-1-102, an absolute fee simple estate; and the addition of the clause “for her own sole and separate use during her natural life,” added after the word “body,” did not show an intention to convey a less estate than a fee simple interest, but merely had the effect of excluding the marital rights of her husband during her life. Skillin v. Loyd, 46 Tenn. 563, 1869 Tenn. LEXIS 99 (1869), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Meacham v. Graham, 98 Tenn. 190, 39 S.W. 12, 1896 Tenn. LEXIS 217 (Tenn. Dec. 1896); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Where a testator gave and devised to his wife all of his estate, real and personal, “for her own individual purposes and property, to have for her benefit to enable her to support his three infant children,” naming them, but with no limitation over to his children, it was held that she took the absolute estate. Davis v. Bawcum, 57 Tenn. 406, 1873 Tenn. LEXIS 223 (1873); Allen v. Westbrook, 84 Tenn. 251, 1886 Tenn. LEXIS 91 (1886), criticized, Sartain v. Dixie Coal & Iron Co., 150 Tenn. 633, 266 S.W. 313, 1924 Tenn. LEXIS 34 (1924). See Maloney v. Hawkins, 77 Tenn. 663, 1882 Tenn. LEXIS 119 (1882).

Under a title bond to husband and wife binding the obligor to convey certain land by warranty deed to the wife, for her sole and separate use, reserving to the husband during his lifetime the control and management of the property for the use and support of the wife and their children, as expressed in one place, and for the use of the wife, himself, and family, as expressed in another place; the wife takes a separate equitable estate, the father the right to control and manage the property during life in trust as provided in the bond, and the children the right to participate in the benefits of the income while members of the family, and, after their mother's death, there being no breach of the bond, the children inherit the equitable estate from their mother, subject to the father's right of control and management of the property for himself and the children constituting the family. Hix v. Gosling, 69 Tenn. 560, 1878 Tenn. LEXIS 140 (1878).

15. Conveyance to Wife — Effect on Curtesy.

Where realty is conveyed by husband to wife, directly, he is not entitled to an estate by the curtesy therein. Bingham v. Weller, 113 Tenn. 70, 81 S.W. 843, 106 Am. St. R. 803, 1904 Tenn. LEXIS 6, 69 L.R.A. 370 (1904); Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

Where a husband pays for realty, directing the grantor to convey to his wife, he has the right of curtesy therein, this section notwithstanding. Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

A husband's general warranty deed to his wife divests him of his curtesy estate in the land conveyed, if same is not excepted or reserved. Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

16. —Subsequent Matters Affecting Rights.

Where a husband bought lands, directing the grantor to convey them to his wife, he acquired an estate by curtesy consummate in such lands of his intestate wife; however, where they had joined in a trust deed for money borrowed by the husband, upon the death of the wife intestate, the husband could not establish tenancy by curtesy consummate without personally discharging the mortgage for protection of their minor children. Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

17. Conveyance in Trust for Benefit of Wife — Effect on Curtesy.

A husband, after the death of his wife, took an estate of curtesy in lands which he had conveyed to a trustee for the benefit of his wife, as the deed made no settlement of the land after the death of the wife, and the husband was taken to have intended that the wife hold the estate subject to curtesy consummate, it not being clearly excluded. Frazer v. Hightower, 59 Tenn. 94, 1873 Tenn. LEXIS 31 (1873).

18. Trust Estate for Support of Children.

While trust fund to mother for support of children may be limited for the education of the children during their minority, yet the trust fund for their maintenance is not so limited, but continues as long as they remain members of the family, especially if there is no reasonable objection to this course, or if the child is a female with no other protection and means of support. Pilcher v. McHenry, 82 Tenn. 77, 1884 Tenn. LEXIS 108 (1884).

19. Trustee's Interest — Duration of Trust.

A trustee takes only the quantity of interest which the purposes of the trust require, and the trust cannot continue after the death of the surviving beneficiary. Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562, 1933 Tenn. LEXIS 4, 92 A.L.R. 343 (1933).

20. Rents and Profits Devised.

A devise or conveyance of the rents and profits, or the income of the land, is equivalent to a devise or conveyance of the land itself; and, if unlimited, there is vested in the devisee or grantee an absolute fee-simple title to the land, without the use of the term “heirs,” or other words of inheritance, notwithstanding no express power of alienation is conferred upon the devisee or grantee. However, the devise or conveyance of the rents and profits may be for life of the devisee or grantee, and then there is vested in him only a life estate in the land; and such devise or conveyance of the rents and profits may be in remainder, and in that case, there is vested in the devisee or grantee a remainder estate in the land. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Settle v. Settle, 29 Tenn. 474, 1850 Tenn. LEXIS 18 (1850); Morgan v. Pope, 47 Tenn. 541, 1870 Tenn. LEXIS 170 (1870); Turley v. Massengill, 75 Tenn. 353, 1881 Tenn. LEXIS 127 (1881), overruled in part, Jourolmon v. Massengill, 86 Tenn. 81, 5 S.W. 719, 1887 Tenn. LEXIS 27 (1887); Davis v. Williams, 85 Tenn. 646, 4 S.W. 8, 1887 Tenn. LEXIS 6 (1887); Jourolmon v. Massengill, 86 Tenn. 81, 5 S.W. 719, 1887 Tenn. LEXIS 27 (1887); Henson v. Wright, 88 Tenn. 501, 12 S.W. 1035, 1889 Tenn. LEXIS 71 (1890); Porter v. Lee, 88 Tenn. 782, 14 S.W. 218, 1890 Tenn. LEXIS 21 (1890); Vick v. Gower, 92 Tenn. 391, 21 S.W. 677, 1892 Tenn. LEXIS 86 (1892); Johnson v. Johnson, 92 Tenn. 559, 23 S.W. 114, 1893 Tenn. LEXIS 13, 22 L.R.A. 179 (1893); Bank of Shelby v. James, 95 Tenn. 8, 30 S.W. 1038, 1895 Tenn. LEXIS 60 (1895); Jobe v. Dillard, 104 Tenn. 658, 58 S.W. 324, 1900 Tenn. LEXIS 40 (1900); Mays v. Beech, 114 Tenn. 544, 86 S.W. 713, 1904 Tenn. LEXIS 110 (1904); Eager v. McCoy, 143 Tenn. 693, 228 S.W. 709, 1920 Tenn. LEXIS 53 (1921).

The rule that a devise or grant of the rents and profits of land is equivalent to a devise or grant of land itself only applies where no active trust is interposed, for, in such case, the devisee or grantee takes only the equitable estate which is not subject to levy and sale under execution at law. Henson v. Wright, 88 Tenn. 501, 12 S.W. 1035, 1889 Tenn. LEXIS 71 (1890); Porter v. Lee, 88 Tenn. 782, 14 S.W. 218, 1890 Tenn. LEXIS 21 (1890); Jobe v. Dillard, 104 Tenn. 658, 58 S.W. 324, 1900 Tenn. LEXIS 40 (1900).

21. Devise of Use and Occupation of Property.

The devise of use and occupation of property constitutes a freehold, and makes the devisee owner of a freehold estate unless a contrary intention appear from the will. Anderson v. Hensley, 55 Tenn. 834, 1875 Tenn. LEXIS 8 (1875).

22. Conveyances and Devises to Parent and Children.

Land devised or personalty bequeathed to a parent and his children, without more, where there are children in existence at the death of the testator, will go to the parent and children equally, unless there is an indication of intention, to be gathered from the whole will, that the parent is to take a life estate, and the children the remainder. A very slight indication of intention will give estate for life, and children the remainder estate. Belote v. White, 39 Tenn. 703, 1859 Tenn. LEXIS 305 (1859); Gannaway v. Tarpley, 41 Tenn. 384, 41 Tenn. 572, 1860 Tenn. LEXIS 110 (1860); Bowers v. Bowers, 51 Tenn. 293, 1871 Tenn. LEXIS 165 (1871); Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Cannon v. Apperson, 82 Tenn. 553, 1885 Tenn. LEXIS 1 (1885); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907).

A devise of land to testator's daughter, “to have and to hold the same to her and her children, to their special use and benefit forever,” vests in the daughter, for life, the legal title to the whole property, in trust as a separate estate for the joint use and benefit of herself and children, that is, vests in her for life an equal equitable interest in the land with each of her children, including her after born children as well as those in existence at the death of the testator and, after her death, vests in her children the legal and equitable title, or the whole estate. Bowers v. Bowers, 51 Tenn. 293, 1871 Tenn. LEXIS 165 (1871); Haywood v. Nash, 1 Cooper's Tenn. Ch. 157 (1873); Arrington v. Roper, 3 Cooper's Tenn. Ch. 572 (1877); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Smith v. Smith, 108 Tenn. 21, 64 S.W. 483, 1901 Tenn. LEXIS 4 (1901); Sanders v. Byrom, 112 Tenn. 472, 79 S.W. 1028, 1903 Tenn. LEXIS 116 (1903).

Where a husband procured a deed of conveyance of land to a trustee “for the benefit of Laura E. Mabry and her children,” as a settlement upon his wife and children, it was held that this constituted a continuing trust, under which after born children will take equally with the children living at the date of the conveyance. Ragsdale v. Mabry, 67 Tenn. 300, 1874 Tenn. LEXIS 377 (1874); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881).

A deed of gift of a husband and father conveying certain land to his wife and her “issues” by him then living, naming the wife and the then living children, with a provision letting in “any further issue or heirs” reserving the right to dispose of the property by the joint consent and signature of the wife, and, in case of her death, by himself “as the trustee” of his children, is, in legal effect a deed of gift to the wife and the children then living, subject to open and let in after born children, with a limited power of sale for the purposes of the trust, and is on its face valid. Hurd v. French, 2 Cooper's Tenn. Ch. 350 (1875).

A note signed by a husband and wife for the rent of land, with the words “I bind my separate estate” written below the wife's signature, will not bind the wife personally, and cannot be enforced against land conveyed by her father to her “and such children as she now has, or may hereafter have,” to their sole and separate use, with power of sale in her for the purpose of reinvestment in other property on the same uses and trusts, the land “in no event to pass out of the hands of her and her children” unless thus invested. Arrington v. Roper, 3 Cooper's Tenn. Ch. 572 (1877).

A deed by a husband to his wife and children, which conveys to his wife by name and his children, “their heirs and assigns forever” passes a present estate to the wife and the then living children as tenants in common. Livingston v. Livingston, 84 Tenn. 448, 1886 Tenn. LEXIS 122 (1886).

While a conveyance of land to a mother and her children, without qualifying words, will generally vest the title in the mother and her then living children as tenants in common, to the exclusion of after born children, a slight indication will induce the courts to adopt the other construction. To effectuate this purpose the mother will be converted into a tenant for life, and the children into remaindermen, the remainders vesting in the children living when the instrument became effective, and the estate opening upon the subsequent birth of children so as to embrace them; or else the mother will be held to be a trustee for herself and her then living children as well as her after born children. Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

23. —Conveyance or Devise to Parent for Life with Remainder to Children.

Under a deed by which the grantor “lends” to his daughter and her husband a slave during the lifetime of the daughter, and after her death, gives the slave to the child or children of the daughter, if any of them reach the age of 21 years, or leave heirs of their body, and, if none, to revert to the grant or, the daughter and mother takes a life estate, with remainder vested in the child or children living at her death, contingent, however, upon their reaching the age of 21 years, or, if dying before that time, upon their leaving children then surviving. Hughes v. Cannon, 21 Tenn. 589, 1841 Tenn. LEXIS 75 (1841).

Where property was devised to a trustee for the sole use and benefit of testator's daughter, who was only 11 years old at her father's death, and to her children, if she should have any; and, if she should die without any child or children, the property to return to testator's children, and be equally divided among them, the equitable title was vested in the daughter for life, and at her death the legal title vested in any child or children she might then have. Turner v. Ivie, 52 Tenn. 222, 1871 Tenn. LEXIS 254 (1871); Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Where the testator directed his property to be kept together by his executors during the life of his widow, and the proceeds and income therefrom to be used for the support and maintenance of the family, and for the education of the children, and, at her death, that the same be sold, and the proceeds be divided equally among his children, the widow was given only a life interest, although no disposition was made of any surplus of such proceeds and income. Andrews v. Andrews, 54 Tenn. 234, 1872 Tenn. LEXIS 42 (1872).

In a conveyance or devise of land to a mother and her children, a very slight indication of an intention that the children shall not take jointly with the mother will suffice to give the estate to the mother for life, with remainder to her children. Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Cannon v. Apperson, 82 Tenn. 553, 1885 Tenn. LEXIS 1 (1885); Williams v. Williams, 84 Tenn. 164, 1885 Tenn. LEXIS 133 (1885); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

The rule that very slight indication of intention will give mother estate for life with remainder to her children applies in case of deeds of conveyance of land as well as in devises by will. Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

Under a conveyance of land to a married woman to “her sole and separate use,” and to the “children upon her body begotten by her then husband,” the wife took only a separate life estate, and on her death the entire estate passed to her children, and the husband had no estate by the curtesy therein. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Stovall v. Austin, 84 Tenn. 700, 1886 Tenn. LEXIS 159 (1886); Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897); Waller v. Martin, 106 Tenn. 341, 61 S.W. 73, 1900 Tenn. LEXIS 165, 82 Am. St. Rep. 882 (Tenn. 1900).

The word children was not surplusage where deed transferred tract of land to daughter “to her use and benefit and her children and their benefit,” and a life estate was created in daughter and a remainder to the children of the daughter living at her death. Cutshaw v. Shelley, 13 Tenn. App. 580, 1931 Tenn. App. LEXIS 97 (1931).

Clause giving children only a lifetime use of property directed by earlier clause to be “equally divided” among the children or their representatives, so that the property might descend unimpaired to the testator's grandchildren, gave the children only a life estate in their several shares of the property. Parker v. Milam, 166 Tenn. 266, 61 S.W.2d 674, 1933 Tenn. LEXIS 90 (1933).

24. Conveyance to Children of Named Person.

A covenant to convey to the “heirs” of a living person is good as to the children of such person, because the word “heirs” is descriptive of the persons to take, and means the children of such living person. Hickman v. Quinn, 14 Tenn. 95, 14 Tenn. 96, 1834 Tenn. LEXIS 57 (Tenn. Mar. 1834).

A deed of gift to a certain person's living children by name, and to any other children that such person may afterwards have, conferred no title whatever upon an after born child. Lillard v. Ruckers, 17 Tenn. 64, 1836 Tenn. LEXIS 17 (1836); Arrington v. Roper, 3 Cooper's Tenn. Ch. 572 (1877). But see Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

Where a grandfather, by deed of gift, gives to his grandchildren by name, “heirs” of his son named, certain slaves, “to have and to hold the same unto the above named children forever; the same to remain in the possession of the son during his life, but not to be subject to his creditors, or liable for the payment of his debts in any way whatever,” and forbidding the son to dispose of the slaves “in any way or manner, either for his life or any number of years,” such deed vested the whole and exclusive legal title to the slaves in the grandchildren, and, if the father had any interest whatever under the deed, it was a mere equitable usufruct, subordinate to their legal title, not liable for his debts, and not available for any purpose in a court of law. Benton v. Pope, 24 Tenn. 392, 1844 Tenn. LEXIS 90 (1844); Bearden v. Taylor, 42 Tenn. 134, 1865 Tenn. LEXIS 30 (1865).

A deed of gift of slaves by a father to his daughter's children, heirs of her body, appointing her their guardian, to manage for them — hire out, if she pleases, or keep them until she pleases to deliver them to her children — vested in her children, then in being, the absolute title at that time, subject to her use and usufruct, with no estate in her. The words “heirs of her body” are descriptive of the persons who are to take, and meant her children then in being in this case. Bearden v. Taylor, 42 Tenn. 134, 1865 Tenn. LEXIS 30 (1865); Johnson v. Hurley, 3 Cooper's Tenn. Ch. 258 (1876).

A deed of conveyance of land, to take effect at once, to the heirs of a certain person then living, vests the title in that person's children then in being, and after born children take no interest in the land. Bearden v. Taylor, 42 Tenn. 134, 1865 Tenn. LEXIS 30 (1865); Grimes v. Orrand, 49 Tenn. 298, 1871 Tenn. LEXIS 9 (1871); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Livingston v. Livingston, 84 Tenn. 448, 1886 Tenn. LEXIS 122 (1886); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

If a deed, when taken altogether, discloses upon the grantor's part that all the children of the mother, without regard to the time of their birth, shall become beneficiaries of the property conveyed, then to effectuate such purpose the mother will be converted into a tenant for life and the children into remaindermen, the remainders vesting in the children living at the time of the instrument and the estate opening to embrace other children subsequently born, at their birth; or else the mother will be held to be a trustee for herself and her then living as well as after born children. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

Where the conveyance of land is to the present and future children of a certain person, to take immediate effect, the title vests at law in the present children to the exclusion of after born children; but it is suggested that perhaps the living children as such grantees would hold the legal title in trust for themselves and the after born children. However, where there is a trust by deed or will, or a remainder is conveyed to present and future children of a certain person, or there is a postponement of the division or enjoyment of the property until they all come into being, the after born children will take with the children in being when the deed or will creating such estate shall become effective. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

25. Remaindermen — Persons Included.

Under a father's deed conveying land to his daughter “for and during the term of her natural life, and after her death to such of her children, their heirs and assigns forever, as she and her first husband shall limit, direct, and appoint, and, for want of such appointment, to all her children equally, their heirs and assigns forever,” the mother took a life estate, with a contingent remainder over to her children, and, upon the birth of a child, the remainder vested in that child, subject to be divested by the birth of other children, or by the exercise, by the mother and her first husband, of their power of appointment. Haywood's Heirs v. Moore, 21 Tenn. 584, 1841 Tenn. LEXIS 74 (1841); Bostick v. Winton, 33 Tenn. 524, 1853 Tenn. LEXIS 82 (1853); Belote v. White, 39 Tenn. 703, 1859 Tenn. LEXIS 305 (1859); Bowers v. Bowers, 51 Tenn. 293, 1871 Tenn. LEXIS 165 (1871); Hurd v. French, 2 Cooper's Tenn. Ch. 350 (1875); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881).

A conveyance of land to a married woman, to have and to hold the same unto her as a separate estate, and to her children by her then husband, with a warranty of title to her, her heirs and assigns, operates to vest in her a life estate, and a remainder estate in her children by her husband, then living or thereafter born, and that may be living at her death. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Statute making it unnecessary to use the word “heir” in conveying a fee did not change the rule that a devise of a remainder to the children of a life tenant inures to the benefit of the survivors of the life tenant, and excludes children of life tenant's deceased children. Neal v. Hodges, 48 S.W. 263, 1898 Tenn. Ch. App. LEXIS 59 (1898).

Devise to named persons “during their natural lives and to descend to their bodily heirs,” created life estate with remainder to such persons as should be bodily heirs at the expiration of the life estate. Stratton v. McKinnie, 62 S.W. 636, 1900 Tenn. Ch. App. LEXIS 166 (Tenn. App. 1900).

Where a father conveyed lands to his certain daughter “and her children, forever” and in a subsequent clause provided that, in case the daughter died before her husband, he should have 400 acres of the lands for use and occupancy during his lifetime, which, at his death should go to “said children, bodily heirs” of the daughter, and that the daughter and husband be put in possession of all the lands and improvements to their own use, and that the husband should have control of the whole during her lifetime, and afterwards of the 400 acres during his lifetime; it was held that the deed created a life estate in the daughter in the whole tract and in her husband to the 400 acres, with vested remainders in her children living when the deed became effective, which opened and admitted the after born children, and that upon the falling in of the life estates, her children then living and a son of a deceased child took the absolute estate in the lands. Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

A devise to a son and to his children, and if he should die during the life of the testator without children, then to his named sister and her children, creates a life estate in the son if he survived the testator with remainder to his children, and at the birth of a child of the son, the remainder would vest, subject to open and let in after born children. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Under a deed giving land to grantor's son for life and providing that on his death it shall “pass to and vest in his issue,” the term “issue” includes grandchildren as well as children, and the children and grandchildren take per capita, unless a contrary intention can be found in the instrument itself; however, as a contrary intention was found, the children and grandchildren took per stirpes. Lea v. Lea, 145 Tenn. 693, 237 S.W. 59, 1921 Tenn. LEXIS 107 (1921).

Where deed provided that the son was to hold the land for his use and benefit for his life, that on his death, it was to vest in his issue, and that, if he died without issue or issue should become extinct within 21 years after his death, the land should revert, it was held that, the conveyance was to the son as trustee and his heirs in fee simple, or fee determinable, and, a subsequent provision limiting the son's estate to life estate, the word “issue” merely limited the heirs to descending heirs and did not give the property to the son's children and grandchildren per capita. Lea v. Lea, 145 Tenn. 693, 237 S.W. 59, 1921 Tenn. LEXIS 107 (1921).

26. Power of Disposition in First Taker.

Where a life estate or other particular estate is conveyed or devised to one, with an executory limitation or remainder over to another, and an absolute, unlimited, or unqualified power of disposition of the whole property or estate is given the first taker, it is a rule of property, regardless of the evident intention, that an executory limitation or remainder over, dependent upon the nondisposition of the first taker, is void, and an absolute estate is vested in the first taker; but, where the power of disposition given the first taker is contingent, limited, or qualified, the executory limitation or remainder over becomes effective when the property has not been disposed of within or according to the power; or where the power of disposition arises, by operation of law, as the mere incident to or consequence of the fee simple estate devised, the subsequent limitation over by way of executory devise is valid. Smith v. Bell, 8 Tenn. 301, 8 Tenn. 302, 1827 Tenn. LEXIS 57, 17 Am. Dec. 798 (1827); David v. Bridgman, 10 Tenn. 558, 1831 Tenn. LEXIS 16 (1831); Campbell v. Taul, 11 Tenn. 548, 1832 Tenn. LEXIS 113 (1832); Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833); Henderson v. Vaulx, 18 Tenn. 30, 1836 Tenn. LEXIS 98 (1836); Davis v. Richardson, 18 Tenn. 290, 1837 Tenn. LEXIS 23, 31 Am. Dec. 581 (1837); Thompson v. McKisick, 22 Tenn. 631, 1842 Tenn. LEXIS 167 (1842); Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844); Deadrick v. Armour, 29 Tenn. 588, 1850 Tenn. LEXIS 39 (1850); Pillow v. Rye, 31 Tenn. 185, 1851 Tenn. LEXIS 44 (1851); Sevier v. Brown, 32 Tenn. 112, 1852 Tenn. LEXIS 30 (1852); Williams v. Jones, 32 Tenn. 620, 1853 Tenn. LEXIS 93 (1853); Ballentine & Spear, 61 Tenn. 269, 1872 Tenn. LEXIS 369 (1872); Fraker v. Fraker, 65 Tenn. 350, 1873 Tenn. LEXIS 363 (1873); McGavock v. Pugsley, 1 Cooper's Tenn. Ch. 410 (1873); Troup v. Hart, 66 Tenn. 188, 1874 Tenn. LEXIS 103 (1874); Pool v. Pool, 78 Tenn. 486, 1882 Tenn. LEXIS 211 (1882); Read v. Watkins, 79 Tenn. 158, 1883 Tenn. LEXIS 32 (1883); Turner v. Durham, 80 Tenn. 316, 1883 Tenn. LEXIS 174 (1883); Lancaster v. Lancaster, 81 Tenn. 126, 1884 Tenn. LEXIS 12 (1884); Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Bradley v. Carnes, 94 Tenn. 27, 27 S.W. 1007, 1894 Tenn. LEXIS 22, 45 Am. St. R. 696 (1894); Meacham v. Graham, 98 Tenn. 190, 39 S.W. 12, 1896 Tenn. LEXIS 217 (Tenn. Dec. 1896); Clark v. Hill, 98 Tenn. 300, 39 S.W. 339, 1896 Tenn. LEXIS 224 (Tenn. Dec. 1896); Young v. Mutual Life Ins. Co., 101 Tenn. 311, 47 S.W. 428, 1898 Tenn. LEXIS 66 (1898); Brien v. Robinson, 102 Tenn. 157, 52 S.W. 802, 1898 Tenn. LEXIS 16 (1899); Waller v. Martin, 106 Tenn. 341, 61 S.W. 73, 1900 Tenn. LEXIS 165, 82 Am. St. Rep. 882 (Tenn. 1900); Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901); Hair v. Caldwell, 109 Tenn. 148, 70 S.W. 610, 1902 Tenn. LEXIS 65 (1902); Carson v. Carson, 115 Tenn. 37, 88 S.W. 175, 1905 Tenn. LEXIS 43 (1905); McKnight v. McKnight, 120 Tenn. 431, 115 S.W. 134, 1907 Tenn. LEXIS 56 (1908); Emert v. Blair, 121 Tenn. 240, 118 S.W. 685, 1908 Tenn. LEXIS 18 (1908); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

It is a rule of property that an unlimited power of disposition gives the first taker an absolute estate, though in contravention of the actual or evident intention it is otherwise if the power of disposition is limited or contingent. McGavock v. Pugsley, 59 Tenn. 689, 1874 Tenn. LEXIS 34 (1874); Pool v. Pool, 78 Tenn. 486, 1882 Tenn. LEXIS 211 (1882); McKnight v. McKnight, 120 Tenn. 431, 115 S.W. 134, 1907 Tenn. LEXIS 56 (1908).

Though the owner of a life estate, empowered to sell the property, thought that she owned the fee and conveyed in fee simple under that impression, without specifically intending to exercise the power to sell and convey, her deed was a sufficient execution of the power, since a grantor parts with all title she may or can convey, unless a contrary intention appears. Young v. Mutual Life Ins. Co., 101 Tenn. 311, 47 S.W. 428, 1898 Tenn. LEXIS 66 (1898); Matthews v. Capshaw, 109 Tenn. 480, 72 S.W. 964, 1902 Tenn. LEXIS 88, 97 Am. St. Rep. 854 (1902).

Where testatrix, having a husband and three children, devised her property to her husband for life with “power by will and testament to dispose of the property hereby willed to him between my children as he may deem proper,” and the husband by will gave the entire property to the surviving child, but charged it with one hundred dollars ($100) in favor of the children of another deceased child, the husband's will was a proper and effective execution of the power conferred upon him by his wife's deed, except for the one hundred dollars ($100) in favor of the grandchildren, as his power of appointment was limited to the wife's children that survived him, and did not extend to her grandchildren. Herrick v. Fowler, 108 Tenn. 410, 67 S.W. 861, 1901 Tenn. LEXIS 42 (1901).

The power of disposition to be implied from the mere ownership has no application to the rule that unlimited power of disposition vests absolute estate in first taker. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Where the testator bequeathed all his estate to his wife and adding “and it is my wish that she do with said property as she may think best, and it is further my wish and desire that at the death of my wife that all our estate …shall go to our adopted daughter Jessie,” he gave the wife unlimited power of absolute disposition, and thereby gave her the absolute estate. Ogilvie v. Wright, 140 Tenn. 114, 203 S.W. 753, 1918 Tenn. LEXIS 26 (1918).

A bequest of $7,000 in trust for testator's son until he reached the age of 50 years, to prevent his squandering it, and providing that “at his death the remaining money to be equally divided between” a brother and sister, impliedly gave full power of disposition to the donee after he reached the age of 50 years; and, since the limitation overtook effect, if at all, not merely at his death before 50, but at his death before or after that period, the limitation over was ineffective, because inconsistent with the previous absolute estate, and, on the donee's death before 50, leaving a wife and minor child, the trust fund passed to them as his distributees. Eaton v. Nashville Trust Co., 145 Tenn. 575, 238 S.W. 865, 1921 Tenn. LEXIS 95 (1921).

A will giving the residue of realty and personalty to testator's daughter for life, with power of disposition by her at death, vests in her but an estate for life, and remainder passes as intestate property where a subsequent provision authorized specific use of testator's stock. Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562, 1933 Tenn. LEXIS 4, 92 A.L.R. 343 (1933).

27. Conditional or Contingent Limitations Over.

A devise or bequest of property to one, with a provision that upon his death it shall go to and descend to his children, vests an absolute estate in the first taker, with a conditional limitation over, in the nature of an executory devise to his children upon his death, and if he dies leaving any children, they will take the property under the will. Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884).

A son's devise of land to his widowed mother “to and for her own use and benefit absolutely, provided that she does not marry again,” with limitation over to another in the event of her remarriage, does not invest her with an absolute estate in fee, but with a contingent estate in fee, determinable upon her remarriage. The estate did not become absolute in the mother, because the power of disposition was not given to her, either expressly or by necessary implication, by superadded words, as required by the rule. The limitation over is valid, and takes effect upon the mother's remarriage. Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901).

A condition that not any of the property devised by a son to his mother shall go, by inheritance, devise, gift, or otherwise, from the mother to a named sister of the testator, or her husband, or their descendants, or any one of their name, and a limitation over that, in the event of any such disposition, the property shall go to another named person, is a valid conditional limitation upon such devise. Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901); Bradford v. Leake, 124 Tenn. 312, 137 S.W. 96, 1912D Am. Ann. Cas. 1140, 1910 Tenn. LEXIS 57 (1910).

Where the testator devised a life estate to his daughters, with remainder in fee to their children, and in default of children by them, then to the testator's children who should then be living, the remainder was vested in such of the testator's grandchildren, children of the daughters, as were in existence when the will became effective and contingent in the case of any daughter who at that time was without children. Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Under a will devising land to testator's mother, coupled with a provision that no part of his estate should come into the possession of his sister or her descendants, and providing that, upon the death of his mother intestate, the property should go to a third person, the condition in the will that none of the property should pass to testator's sister or her descendants did not follow the property into the hands of any one, upon whom the same might be devolved through the operation of the limitation attached to the condition. Bradford v. Leake, 124 Tenn. 312, 137 S.W. 96, 1912D Am. Ann. Cas. 1140, 1910 Tenn. LEXIS 57 (1910).

A conveyance to husband and wife reciting that, if the husband died without bodily heirs, the wife should take by survivorship, and if she died without issue, he should take an undivided moiety, operated to convey to her an undivided half in fee absolutely and to the husband in fee subject to a condition in her favor in case he should die without children, for the term “bodily heirs” means children as used in such deed. Young v. Brown, 136 Tenn. 184, 188 S.W. 1149, 1916 Tenn. LEXIS 115 (1916).

28. —Matters Defeating Limitations Over.

Under a will giving a present vested interest in property, real or personal, whether the estate given be general, equitable, absolute, or for life, with a limitation or executory devise over upon the happening of the contingency of the devisee or legatee dying without children, upon his death with children, his estate in the property becomes absolute. Petty v. Moore, 37 Tenn. 126, 1857 Tenn. LEXIS 91 (1857); Owen v. Hancock, 38 Tenn. 563, 1858 Tenn. LEXIS 228 (Tenn. Dec. 1858); Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (Tenn. Dec. 1858); Puryear v. Edmondson, 51 Tenn. 43, 1871 Tenn. LEXIS 133 (1871); Turner v. Ivie, 52 Tenn. 222, 1871 Tenn. LEXIS 254 (1871); Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888); Nott v. Fitzgibbon, 107 Tenn. 54, 64 S.W. 26, 1901 Tenn. LEXIS 58 (1901); Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901); Katzenberger v. Weaver, 110 Tenn. 620, 75 S.W. 937, 1903 Tenn. LEXIS 80 (1903). See also Williamson v. Tunis, 107 Tenn. 83, 64 S.W. 10, 1901 Tenn. LEXIS 61 (1901), holding that, under such limitations and terms, the birth and survival of a child determines the contingency upon which the estate becomes vested and absolute in the first taker; and there being no express limitation to the children, none will be implied, and they will take nothing as devisees.

Where an absolute estate is given by will, with a provision for a limitation over upon the death of the devisee or legatee, upon a certain contingency, the absolute estate is not defeated where the contingency never happens, and it becomes impossible for the limitation over to take effect. Petty v. Moore, 37 Tenn. 126, 1857 Tenn. LEXIS 91 (1857); Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (Tenn. Dec. 1858); Cowan, McClung & Co. v. Wells, 73 Tenn. 682, 1880 Tenn. LEXIS 198 (1880); Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884); Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888).

Under a devise or bequest of property to one, to be held by trustees for his use and benefit during his natural life, and at his death to be equally divided among his children, the gift becomes absolute upon his death with no children, for the testator did not, in that event, die intestate as to the remainder, so that the same would go to his heirs and distributees under the statutes of descent and distribution. Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (Tenn. Dec. 1858); Stretch v. Gowdey, 1 Cooper's Tenn. Ch. 37 (1872); Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884).

Ordinary words devising an absolute title will not, without superadded words giving unlimited power of disposition, defeat an executory devise. Read v. Watkins, 79 Tenn. 158, 1883 Tenn. LEXIS 32 (1883); Carson v. Carson, 115 Tenn. 37, 88 S.W. 175, 1905 Tenn. LEXIS 43 (1905); McKnight v. McKnight, 120 Tenn. 431, 115 S.W. 134, 1907 Tenn. LEXIS 56 (1908).

In a partition of land among the absolute owners, the fee is not in abeyance while a remainder is contingent under a consent decree vesting in one of the parties a life estate in the part allotted to her, with remainder at her death to her children then living and the issue of such as may be dead, but the fee abides with her during such contingency, and, if the line of remaindermen is extinct so that there is no remainderman to take at her death, the remainder then ceases forever, and her title is freed from the remainder and subject to her disposal, by will, and her will devising the land to her husband becomes operative and passes to him the whole estate. Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897).

29. —Devisee with Limitation Over Making Conveyance.

Under a conveyance by the first taker of an estate for life with an executory devise over, the right of inheritance of her children would be defeated, they being estopped by the deed. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

30. Precatory Trusts.

Where a testator, after giving his wife all his real and personal property, declared that he had sold one relative land accepting notes in payment and requested that when the relative had paid all but the last $1,500 that amount be given him, and stated that he valued land occupied by another relative at $5,000, and requested that such relative be permitted to purchase it on instalments, such two requests must be treated as precatory trusts in favor of the two relatives, as they were definite and certain and left the wife no discretion. Daly v. Daly, 142 Tenn. 242, 218 S.W. 213, 1919 Tenn. LEXIS 53 (1919).

31. Determinable Fees.

Where will bequeathing life estate to son further stated “but should my son … die childless, then and in that event, the land above described shall revert to and become the property of my legal heirs then living” the son became vested with a determinable fee, and if he died with children they would not take under the will but as his heirs, but if he died without children the fee terminated and became vested in heirs at law of his father. Johnson v. Johnson, 4 Tenn. Civ. App. (4 Higgins) 118 (1914).

32. Estate Conditioned to Arise by Way of Executory Devise — Effect of Failure on First Estate.

Where an estate is created in fee or for life, and on this estate another is conditioned to arise, by way of executory devise, on the occurrence of a given event, and that event does not occur, so that the estate cannot vest, then the first estate continues, and if a life estate, it is enlarged into a fee. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976), overruled on other grounds, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

Under a devise to A and after her death to her children, if any, with provision that if she should die without lawful issue, then over to other; and it appeared that A died leaving children, it was impossible for the estate over to vest and fee vested in her, and her children could take no estate under the devise, but only by inheritance from her. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976), overruled on other grounds, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

33. Life Estate With Contingent Remainder — Effect on Fee.

Where land was devised to named devisee for life and provided that “at his death the remainder shall go to the heirs of his body,” the fee or inheritance devised to the bodily heirs of the named devisee passed to the heirs at law of the testatrix immediately upon her death subject to the contingent remainder created by the will. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

34. No Reversion Stipulated — Effect.

Where all title, claim and interest is conveyed by the owner of the fee simple title, without providing for any reversion, the grantee takes full title even though there is a repugnant provision in the habendum clause purporting to limit the estate thus granted to life of grantee, followed by a gift over only in event the grantee dies with issue surviving. The absolute estate first granted was to be limited only in the event there should be surviving issue. Pryor v. Richardson, 162 Tenn. 346, 37 S.W.2d 114, 1930 Tenn. LEXIS 96 (1930).

35. Deed Conditioned for Grantor's Support.

A deed conditioned that the grantee shall support the grantor passes title immediately, provision for a reversion to grantor, and breach, notwithstanding. The remedy of the grantor is in equity for enforcement of a lien on the realty and not for a rescission, even where there is a total breach. Goodman v. Skeleton, 2 Tenn. Ch. App. 283 (1901); Carney v. Carney, 138 Tenn. 647, 200 S.W. 517, 1917 Tenn. LEXIS 71 (1917); Trice v. McGill, 158 Tenn. 394, 13 S.W.2d 49, 1928 Tenn. LEXIS 167 (1928), questioned, Patterson v. Anderson Motor Co., 45 Tenn. App. 35, 319 S.W.2d 492, 1958 Tenn. App. LEXIS 111 (Tenn. Ct. App. 1958).

Death of grantee before that of the grantor, and the fact that he can no longer, or fully, perform will not defeat the estate conditioned on grantor's support as equity will protect the interests of both parties. Carney v. Carney, 138 Tenn. 647, 200 S.W. 517, 1917 Tenn. LEXIS 71 (1917).

36. Right of Way Deed.

Conveyance to a railway company of land “for railroad purposes only,” creates a personal covenant which is fulfilled by the location, of a railroad through grantor's tract of land, and is not to be construed as a limitation on the fee conveyed. Nashville, C. & S. L. R. Co. v. Bell, 162 Tenn. 661, 39 S.W.2d 1026, 1931 Tenn. LEXIS 84 (1931).

Deed which conveyed to railroad company “the right of way and roadbed and 150 feet on east and 50 feet on west of said roadbed” did not purport to convey a right of way only, and under this section title to such land passed to the railroad in fee. Baird v. Southern Ry., 179 Tenn. 366, 166 S.W.2d 617, 1942 Tenn. LEXIS 32 (1942).

Although habendum clause contained language indicative of a fee simple, where granting clause in deed of conveyance to railroad stated that interest involved was a right of way the instrument clearly expressed an intent to pass an estate or interest less than a fee and section did not apply. Smoky Mt. R.R. v. Paine Oil Co., 496 S.W.2d 904, 1972 Tenn. App. LEXIS 300 (Tenn. Ct. App. 1972).

37. Exception of “Lands Adversely Held.”

An exception in a deed of “such parts of said lands as may be adversely held” is an exception of land held adversely to the warranting grantor, and not of land acquired by adverse possession of grantor's predecessor in title and conveyed to the immediate grantor before his own conveyance. Sequatchie Land Co. v. Sewanee Coal, Coke & Land Co., 137 Tenn. 313, 193 S.W. 106, 1916 Tenn. LEXIS 78 (1916).

38. Conveyance of Story of Building.

A building may be divided horizontally and the different floors or the different rooms be separately conveyed and owned and deed was held to convey one story of a building to one person and the other story to another. Townes v. Cox, 162 Tenn. 624, 39 S.W.2d 749, 1931 Tenn. LEXIS 77 (1931).

39. Partition Deed.

The general rule is that a voluntary partition of realty does not confer on the parties any additional title, and a partition instrument executed by devisees and intended only to sever the interest and estate granted to each by the will does not pass the reversion, which was not devised by the will and which the grantors received as heirs by descent, notwithstanding such instrument contained language which, in the absence of anything else, would have passed title. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930). See Frank v. Frank, 153 Tenn. 215, 280 S.W. 1012, 1925 Tenn. LEXIS 21 (1926).

40. Possibility of Interest in Land.

It was not the intention of the legislature that a bare possibility of an interest in land should pass as an “interest therein” under §§ 66-1-101 and 66-5-101. Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

41. Right of Reentry Upon Condition Broken.

This section did not abrogate common law rule that right of reentry upon condition broken is inalienable, however attempted alienation will not operate to extinguish such right but instead such right will pass eo instante to heirs of grantor. Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

Some act of reentry on the part of the heirs is necessary to revest title upon breach of a condition subsequent. Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

42. Reservation of Life Estate.

When a grantor reserves a life estate with unlimited power to sell, he retains the fee — no interest in praesenti passes to the grantee — the instrument is not a deed. Wright v. Huskey, 592 S.W.2d 899, 1979 Tenn. App. LEXIS 368 (Tenn. Ct. App. 1979).

43. Conveyance Conditional upon Spouse Not Remarrying.

Where deed from husband to wife granted wife the property with a condition that if the husband should die before the wife the wife should have full control and power to handle the property “so long as she lives my widow” but if she should remarry the property would go to his children, and she conveyed the property after her husband's death, the grantee acquired the property subject to forfeiture upon the remarriage of the widow. Hall v. Hall, 604 S.W.2d 851, 1980 Tenn. LEXIS 495 (Tenn. 1980).

Collateral References.

Deed as conveying fee or easement. 136 A.L.R. 379.

Fee simple absolute as created by grant to one and heirs if donee should have any heirs. 16 A.L.R.2d 670.

Fee simple conditional, conveyance of, by grantee after birth of issue as passing fee simple title. 114 A.L.R. 612.

Grant to one and his children. 161 A.L.R. 612.

Railroad company's right in respect of material or minerals within right of way. 21 A.L.R. 1131.

Railroad premises, grantee as acquiring fee entitling him to adjoining land upon its abandonment for. 136 A.L.R. 300.

Reverter, release of possibility of, as vesting fee in grantee. 38 A.L.R. 1111.

66-1-102. Estates tail abolished.

Any person seized or possessed of an estate in general or special tail, whether by purchase or descent, shall be held and deemed to be seized and possessed of the same in fee simple, fully and absolutely, without any condition or limitation whatsoever, to that person, that person's heirs and assigns, forever, and shall have full power and authority to sell or devise the same as such person thinks proper; and such estate shall descend under the same rules as other estates in fee simple.

Code 1858, § 2007 (deriv. Acts 1784 (Apr.), ch. 22, § 5); Shan., § 3673; Code 1932, § 7599; T.C.A. (orig. ed.), § 64-102.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 435.

Tennessee Jurisprudence, 9 Tenn. Juris., Deeds, § 27; 11 Tenn. Juris., Estates, §§ 6, 8; 25 Tenn. Juris., Wills, § 134.

Law Reviews.

Future Interests — Tennessee Style, (Jack D. Jones), 54 Tenn. L. Rev. 413 (1987).

NOTES TO DECISIONS

1. Construction of Words — Rules Governing.

This statute, which turns estates tail into a fee simple, creates a rule of property and its application ought not be made difficult by a broad construction of familiar words, which uniformly created an estate tail at common law. Hill v. Maloney, 21 Tenn. App. 216, 108 S.W.2d 791, 1937 Tenn. App. LEXIS 23 (1937).

A word of limitation may be construed as a word of purchase, and a word of purchase may be construed as a word of limitation, where the context of the whole instrument manifestly and clearly requires it. Kay v. Connor, 27 Tenn. 624, 1848 Tenn. LEXIS 10, 49 Am. Dec. 690 (1848); Pierce v. Ridley, 60 Tenn. 145, 1873 Tenn. LEXIS 425, 25 Am. Rep. 769 (1873); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Franklin v. Franklin, 91 Tenn. 119, 18 S.W. 61, 1891 Tenn. LEXIS 84 (1892); Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893); Waller v. Martin, 106 Tenn. 341, 61 S.W. 73, 1900 Tenn. LEXIS 165, 82 Am. St. Rep. 882 (Tenn. 1900); Smith v. Smith, 108 Tenn. 21, 64 S.W. 483, 1901 Tenn. LEXIS 4 (1901); Farley v. Farley, 121 Tenn. 324, 115 S.W. 921, 1908 Tenn. LEXIS 22 (1908).

Where the words “heirs” and “children” are used in different clauses of a deed or will, they will not be construed to mean the same thing, but the legal inference to be drawn is that the maker knew their legal meaning, and used them accordingly. Kay v. Connor, 27 Tenn. 624, 1848 Tenn. LEXIS 10, 49 Am. Dec. 690 (1848); Simpson v. Smith, 33 Tenn. 394, 1853 Tenn. LEXIS 61 (1853); Randolph v. Wendel, 36 Tenn. 646, 1857 Tenn. LEXIS 68 (1857); Wood v. Polk, 59 Tenn. 220, 1873 Tenn. LEXIS 46 (1873); Nott v. Fitzgibbon, 107 Tenn. 54, 64 S.W. 26, 1901 Tenn. LEXIS 58 (1901); Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908).

Since the statute creates a rule of property, its application ought not to be rendered difficult by a latitudinarian construction of familiar words, the technical signification of which uniformly creates an estate tail at common law. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

2. Statute de Donis — Abolition by Section.

The statute coming in aid of the policy of the fictitious action of common recoveries, and of the rule in Shelley's Case, put an end to the effect and operation of the statute of entailments, commonly called the statute de donis. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

3. Estates Tail — Abolition by Section.

The statute abolished estates tail, whether general or special tail, and converted them into estates in fee simple, and gave the absolute title to the first taker; and where the words of the instrument would, at common law, have created an estate tail or a conditional fee, they will, under this statute, create an absolute fee in the first taker. Middleton v. Smith, 41 Tenn. 144, 1860 Tenn. LEXIS 32 (1860); Kirk v. Furgerson, 46 Tenn. 479, 1869 Tenn. LEXIS 83 (1869); Wynne v. Wynne, 56 Tenn. 308, 1872 Tenn. LEXIS 146 (1872); Balch v. Johnson, 106 Tenn. 249, 61 S.W. 289, 1900 Tenn. LEXIS 159 (1901); Bingham v. Weller, 113 Tenn. 70, 81 S.W. 843, 106 Am. St. R. 803, 1904 Tenn. LEXIS 6, 69 L.R.A. 370 (1904); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907); Bailey ex rel. State v. Henry, 125 Tenn. 390, 143 S.W. 1124, 1911 Tenn. LEXIS 35 (Tenn. Dec. 1911); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915); Delk v. Williams, 10 Tenn. App. 246, — S.W.2d —, 1929 Tenn. App. LEXIS 29 (Tenn. Ct. App. 1929).

Fee tail created by use of words “the heirs of her body” in will was converted by statute into fee simple. Hill v. Maloney, 21 Tenn. App. 216, 108 S.W.2d 791, 1937 Tenn. App. LEXIS 23 (1937).

4. “Estates Tail” Defined.

An “estate tail” is an estate of inheritance limited to the heirs of the body, or a particular class of the heirs of the body, of the grantee; and, on the failure of such heirs of the body, the estate shall revert to the grantor. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Kirk v. Furgerson, 46 Tenn. 479, 1869 Tenn. LEXIS 83 (1869); Harwell v. Harwell, 151 Tenn. 587, 271 S.W. 353, 1924 Tenn. LEXIS 88 (1925).

An estate tail may be general or special; it is general where it is limited to the heirs of the body of the grantee; and it is special where the limitation is to a special class of such heirs, as to the heirs of his body by a certain wife named, or to the heirs male or female of the body. Kirk v. Furgerson, 46 Tenn. 479, 1869 Tenn. LEXIS 83 (1869).

To create an estate tail at common law, it was necessary to use technical words designating a class of heirs to take in perpetual succession, or language disclosing a clear intent to that effect. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881).

5. Nature and Object of Rule.

The statute, like the rule in Shelley's Case, is a rule, not of construction, but of property, and, like it, has relation, not to the wishes of the donor, but to the interests of the community. It tends to control individual purpose for the attainment of a public object, namely, the unlocking of property and the subjection of it to the uses of society. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Settle v. Settle, 29 Tenn. 474, 1850 Tenn. LEXIS 18 (1850); Lawrence v. Singleton, 3 Shan. 168, 17 S.W. 265 (1875).

6. Intent of Grantor — Effect.

It matters not how distinctly, in point of intention, it may appear that the grantor means that the first taker shall have a life estate only; if it further appears that, by the use of the terms heirs of the body or issue of the grantee, he means the descendants of the first taker shall take, in their character of heirs, a descendible estate of inheritance, exhausting the lineal stock of the first taker, such purpose, by operation of the rule, will vest the first taker with the inheritance. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Harwell v. Harwell, 151 Tenn. 587, 271 S.W. 353, 1924 Tenn. LEXIS 88 (1925).

7. “Children” Defined.

The word “children” is a technical word, and is always construed to be a word of “purchase,” unless it be so controlled by other words used so as to show that it was intended as a word of “limitation.” Kay v. Connor, 27 Tenn. 624, 1848 Tenn. LEXIS 10, 49 Am. Dec. 690 (1848); Stubbs v. Stubbs, 30 Tenn. 43, 1850 Tenn. LEXIS 47 (1850); Williams v. Sneed, 43 Tenn. 533, 1866 Tenn. LEXIS 84 (1866); Bowers v. Bowers, 51 Tenn. 293, 1871 Tenn. LEXIS 165 (1871); Turner v. Ivie, 52 Tenn. 222, 1871 Tenn. LEXIS 254 (1871); Adylett v. Swope, 1 Shan. 446 (Tenn. 1875); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907).

The word “children” is usually a word of purchase, requiring strong language to change it into a word of “limitation.” Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881).

The word “child” or “children” are words of purchase, not of limitation, unless controlled by other language of the will, and are not equivalent to the terms “heirs” or “heirs of his body,” as used in the statement of the rule in Shelley's Case. Collins v. Williams, 98 Tenn. 525, 41 S.W. 1056, 1896 Tenn. LEXIS 244 (1896).

The technical and legal meaning of the words “child” or “children” is the immediate offspring, and not an indefinite line of heirs. Collins v. Williams, 98 Tenn. 525, 41 S.W. 1056, 1896 Tenn. LEXIS 244 (1896); Bruce v. Goodbar, 104 Tenn. 638, 58 S.W. 282, 1900 Tenn. LEXIS 38 (1900).

8. “Issue” Defined.

Under a deed conveying land to grantor's son for life and providing that on his death it shall “pass to and vest in his issue,” the term “issue” includes grandchildren, and the children and grandchildren take per capita, unless a contrary intention can be found in the instrument itself. Lea v. Lea, 145 Tenn. 693, 237 S.W. 59, 1921 Tenn. LEXIS 107 (1921).

9. “Heirs” Defined.

The word “heirs” is a technical term, and is always construed to be a word of limitation and not of purchase, unless there be other controlling words clearly showing that a contrary meaning was intended by its use. Kay v. Connor, 27 Tenn. 624, 1848 Tenn. LEXIS 10, 49 Am. Dec. 690 (1848); Randolph v. Wendel, 36 Tenn. 646, 1857 Tenn. LEXIS 68 (1857); Cooper v. Coursey, 42 Tenn. 416, 1865 Tenn. LEXIS 83 (1865); Adylett v. Swope, 1 Shan. 446 (Tenn. 1875); Alexander v. Wallace, 76 Tenn. 569, 1881 Tenn. LEXIS 47 (1881); Hamby v. Northcut, 25 Tenn. App. 11, 149 S.W.2d 484, 1940 Tenn. App. LEXIS 87 (Tenn. Ct. App. 1940).

A testator, having only one brother and sister, bequeathed his entire estate to the brother “and his lawful heirs,” and, in the event of the brother's death without “such heirs,” then to the sister. As the testator had no children, the brother and sister would have been his heirs; and, as the sister would have been an heir of her brother, the phrase “lawful heirs” of the will must be taken to mean “children,” otherwise the sister could not take unless she were dead. The bequest to the sister was valid and was neither a perpetuity nor an estate tail which would by the statute be converted into an estate in fee. Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893).

The word “heirs” is a technical term, and is always construed to be a word of limitation and not of purchase, unless there be other controlling words clearly showing that a contrary meaning was intended by its use. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

10. Heirs of the Body — Scope — Technical Use.

Under a devise of land to a son “and the heirs of his body, and if he should die without heirs, then * * * to his sister, Lucinda, and her heirs, that is, the heirs of her body,” there is nothing sufficiently clear to overturn the true technical meaning of the words “heirs of the body,” and nothing to indicate that the words were intended to be used in any other than the technical sense. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Heirs of the body include grandchildren, lineal descendants. Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930).

A conveyance to a named grantee “and at his death to his bodily heirs” vested a life estate in the grantee with a contingent remainder in his heirs under the provisions of § 64-103 (now § 66-1-103) and did not fall within the provisions of this section converting a fee tail into a fee simple. Butler v. Parker, 200 Tenn. 603, 293 S.W.2d 174, 1956 Tenn. LEXIS 445 (1956).

11. Fee Simple Estate — Words Creating — Examples.

Where the conveyance or devise of land is made to a certain person and “his bodily heirs,” or “heirs of his body,” or “his body heirs,” or “his lawful heirs,” or “lawful issues of his body,” or “his heirs, the natural issue of his body forever,” or like words without more, that person takes an absolute estate in fee simple under this section, and his children or heirs take nothing under the deed or will. Middleton v. Smith, 41 Tenn. 144, 1860 Tenn. LEXIS 32 (1860); Kirk v. Furgerson, 46 Tenn. 479, 1869 Tenn. LEXIS 83 (1869); Skillin v. Loyd, 46 Tenn. 563, 1869 Tenn. LEXIS 99 (1869), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Wynne v. Wynne, 56 Tenn. 308, 1872 Tenn. LEXIS 146 (1872); Balch v. Johnson, 106 Tenn. 249, 61 S.W. 289, 1900 Tenn. LEXIS 159 (1901); Bingham v. Weller, 113 Tenn. 70, 81 S.W. 843, 106 Am. St. R. 803, 1904 Tenn. LEXIS 6, 69 L.R.A. 370 (1904); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907).

A deed of land to grantor's certain daughter, and “to her heirs, the natural issue of her body, forever,” if there should be no issue, then such land to descend to grantor's grandchildren, gave to the daughter the absolute title, because she was invested with an estate tail under the common law. Kirk v. Furgerson, 46 Tenn. 479, 1869 Tenn. LEXIS 83 (1869).

A devise to testator's daughter and her “bodily heirs,” with limitation over on her death without heirs, creates estate tail, converted into fee simple and “dying without heirs” means indefinite failure of issue. Harwell v. Harwell, 151 Tenn. 587, 271 S.W. 353, 1924 Tenn. LEXIS 88 (1925).

12. Base or Determinable Fee.

A devise “to my daughter and the heirs of her body” creates a fee tail, which is converted into a fee simple by this section, but a further provision, “if she should die leaving no children it is my will that the land so bequeathed to her shall be divided equally among my surviving children,” cuts down such fee simple to a base or determinable fee. Hill v. Maloney, 21 Tenn. App. 216, 108 S.W.2d 791, 1937 Tenn. App. LEXIS 23 (1937).

13. Estate Over Not Vesting — Effect.

Under a devise to A, and after her death to her children, with a provision that if she should die without lawful issue, then over to others; and it appears that A died leaving children, it was impossible for the estate over to vest, and the fee became vested in her. What at common law would have been an estate tail is by this section not to be deemed an entail. A's children could take only by inheritance from her, and in case of a conveyance by her as first taker such right of inheritance would be defeated and estopped by her deed. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976), overruled, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

14. Life Estates.

As to the rule that the loan of chattels to the lendee for life and then to go to the heirs of his body gives the lendee only a life estate and the remainder estate to his children, see Loving v. Hunter, 16 Tenn. 4, 1832 Tenn. LEXIS 2 (1835); Settle v. Settle, 29 Tenn. 474, 1850 Tenn. LEXIS 18 (1850); Ward v. Saunders, 32 Tenn. 174, 1852 Tenn. LEXIS 44 (1852); Vaden v. Hance, 38 Tenn. 300, 1858 Tenn. LEXIS 178 (1858).

Where the testator “lends” his land to his son for life, which upon the son's death is to go to the heirs of his body, the rule in Shelley's Case, when in force, did not apply; and the son took only an equitable life estate and the legal estate vested in the testator's heirs pending the contingency, and subject to be divested only by the happening of the contingency of the son dying with a child or children or other issue surviving him. Clopton v. Clopton, 49 Tenn. 31, 1870 Tenn. LEXIS 185 (1870); Ryan v. Monaghan, 99 Tenn. 338, 42 S.W. 144, 1897 Tenn. LEXIS 36 (1897).

This statute has no application where one takes only an estate for life, and does not take an estate tail under the common law; as, where there is a devise to one for life, and then to the heirs of his body, and if he die without such heirs, then to another, the first devisee takes only an estate for life, with a contingent remainder over to such heirs, and, in the event of his death without such heirs, then to go to the other, this statute does not apply so as to enlarge the life estate to an absolute estate in the first taker. Williams v. Williams, 57 Tenn. 566, 1873 Tenn. LEXIS 264 (1873); Williams v. Williams, 62 Tenn. 55, 1873 Tenn. LEXIS 137 (1873); Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930); Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

A devise to a grandson “during his life and then to the heirs of his body by a legal marriage,” refers to lawful heirs; and there is created a life estate with a contingent remainder in the heirs of the body of the life tenant. Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930).

Under a conveyance to one “during his life and at his death to his bodily heirs,” the named grantee takes a life estate and his bodily heirs living at the time of his death take the remainder. Guy v. Culberson, 164 Tenn. 509, 51 S.W.2d 500, 1932 Tenn. LEXIS 16 (1932).

15. Personalty.

Where the words, if applied to real property, would create an estate tail, they will, when applied to personalty, vest the absolute property in the first taker. Duncan v. Martin, 15 Tenn. 519, 1835 Tenn. LEXIS 40, 27 Am. Dec. 525 (1835); Loving v. Hunter, 16 Tenn. 4, 1832 Tenn. LEXIS 2 (1835); Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Clark v. Clark, 39 Tenn. 336, 1859 Tenn. LEXIS 219 (39 Tenn. 336).

The rule that where the words, if applied to real property, would create an estate tail, they will, when applied to personalty, vest the entire and absolute property therein was a well established principle of the common law, which was not affected by the rule in Shelley's Case. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

Collateral References.

Grant to one and his children. 161 A.L.R. 612.

Inconsistency between granting and habendum clauses, effect of. 58 A.L.R.2d 1374.

66-1-103. Rule in Shelley's case abolished.

Where a remainder is limited to the heirs or to the heirs of the body of a person, to whom a life estate in the same premises is given, the persons who, on the termination of the life estate, are heirs or heirs of body of such tenant, shall take as purchasers, by virtue of the remainder so limited to them.

Code 1858, § 2008 (deriv. Acts 1851-1852, ch. 91, § 1); Shan., § 3674; Code 1932, § 7600; T.C.A. (orig. ed.), § 64-103.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 437, 438.

Tennessee Jurisprudence, 11 Tenn. Juris., Estates, § 8; 21 Tenn. Juris., Remainders, Reversions and Executory Interests, §§ 7, 19, 23; 25 Tenn. Juris., Wills, § 135.

Law Reviews.

Destructibility of Contingent Remainders in Tennessee, I. Natural Termination (Jack D. Jones and William R. Heck), 42 Tenn. L. Rev. 761 (1975).

NOTES TO DECISIONS

1. Scope and Effect.

The enactment of the statute operated to abolish the rule in Shelley's Case. Williams v. Williams, 57 Tenn. 566, 1873 Tenn. LEXIS 264 (1873); Williams v. Williams, 1 Cooper's Tenn. Ch. 306 (1873); Hurst v. Wilson, 89 Tenn. 270, 14 S.W. 778, 1890 Tenn. LEXIS 46 (Tenn. Sep. 1890); Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908); Union R.R. v. Clifton, 152 Tenn. 572, 280 S.W. 28, 1925 Tenn. LEXIS 103 (1925); Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

The statute abrogating the rule in Shelley's Case gives no rights to “heirs,” to whom no remainder was limited, as against the devisees of one who was not only a life tenant, but in whom the fee abode subject to a contingent remainder to her surviving children or issue of children, when, by the extinction of the line of her descendants during her life, the remainder failed, and her title, at the moment of her death, became absolute. Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915). See Duffy v. Jarvis, 84 F. 731, 1898 U.S. App. LEXIS 2692 (C.C.E.D. Tenn. 1898).

This statute is restricted to interests of remaindermen and does not apply to cases where interest of reversioner is involved. Robinson v. Blankenship, 116 Tenn. 394, 92 S.W. 854, 1906 Tenn. LEXIS 3 (1906).

The statute is not limited in application to cases where there are no heirs of the body of the life tenant, but applies whether the life tenant has such, and the estate of the first taker is limited to the life estate expressly given. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

2. Application.

Where deed granted land to wife during her natural life “or so long as she may remain a widow in the event I should die before she does * * * with a remainder to me in event she should die before I do, and should she survive me, then at her death or marriage to my heirs at law” the estate left in grantor after disposing of life estate though called a remainder was a reversion, and this section did not apply, and grantor could thereafter make a new deed and transfer the fee simple title to his wife. Robinson v. Blankenship, 116 Tenn. 394, 92 S.W. 854, 1906 Tenn. LEXIS 3 (1906).

Where word “assigns” appeared in granting clause and habendum of deed which conveyed estate to grantee during her natural life and at her death to her husband their heirs and assigns forever, it was not necessary to consider applicability of statute abolishing rule in Shelley's Case, as the limitation over was void, the wife taking an estate in fee. Erwin Nat'l Bank v. Riddle, 18 Tenn. App. 561, 79 S.W.2d 1032, 1934 Tenn. App. LEXIS 58 (Tenn. Ct. App. 1934).

Where father devises land to son for the term of his natural life, and at his death to his heirs, such heirs take the remainder in fee as purchasers. Spencer v. Stanton, 46 Tenn. App. 688, 333 S.W.2d 225, 1959 Tenn. App. LEXIS 122 (Tenn. Ct. App. 1959).

3. Rule in Shelley's Case — Statement — Application.

What is pronounced to be a full and accurate statement of the rule in Shelley's Case is as follows: Where any person, by deed, will, or other writing, takes an estate of freehold, either legal or equitable, and in the same instrument there is a limitation by way of remainder, either with or without the interposition of an intervening estate of the same legal or equitable character, to his heirs or heirs of his body, as a class of persons to take in succession, the limitation to the heirs entitles the ancestor or first taker to the whole estate. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Cooper v. Coursey, 42 Tenn. 416, 1865 Tenn. LEXIS 83 (1865); Williams v. Sneed, 43 Tenn. 533, 1866 Tenn. LEXIS 84 (1866); Williams v. Williams, 57 Tenn. 566, 1873 Tenn. LEXIS 264 (1873); Williams v. Williams, 79 Tenn. 652, 1883 Tenn. LEXIS 120 (1883); Hurst v. Wilson, 89 Tenn. 270, 14 S.W. 778, 1890 Tenn. LEXIS 46 (Tenn. Sep. 1890); Butler v. Parker, 200 Tenn. 603, 293 S.W.2d 174, 1956 Tenn. LEXIS 445 (1956).

The rule in Shelley's Case does not apply, and the first taker is not vested with the fee under devise of lands to the testator's two daughters, and to the survivor of them, if either should die without a child, and to be held free from the debts of their husbands, if they should marry, and to descend “to their children,” though the will was made and the testator died before the abolishment of the rule in Shelley's Case. Collins v. Williams, 98 Tenn. 525, 41 S.W. 1056, 1896 Tenn. LEXIS 244 (1896); Bruce v. Goodbar, 104 Tenn. 638, 58 S.W. 282, 1900 Tenn. LEXIS 38 (1900).

4. “Life Estate” Defined.

A “life estate” is not an estate of inheritance, but a freehold for life of a tenant or another. Harwell v. Harwell, 151 Tenn. 587, 271 S.W. 353, 1924 Tenn. LEXIS 88 (1925).

5. Heirs — Construed.

The word “heirs” may be construed to mean children where appearing in a deed. Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893).

6. Lawful Heirs — Meaning.

The phrase “lawful heirs” means children, and hence not an estate tail. Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893).

7. Heirs of Body — Meaning.

“Heirs of the body” include grandchildren. The term is equivalent to lawful heirs or heirs by legal marriage. Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930).

In its primary sense, a remainder to the “heirs of his (life tenant's) body” is a remainder to the life tenant's lineal descendants. Fehringer v. Fehringer, 222 Tenn. 585, 439 S.W.2d 258, 1969 Tenn. LEXIS 465 (1969).

8. Impossibility of Issue on Account of Age.

The remainder to the children of a woman, who has an estate for life in the same property, is not extinguished until her death, although she may be very old and childless, as the law does not assume that there is an impossibility of issue at any age. Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897); Jordan v. Jordan, 145 Tenn. 378, 239 S.W. 423, 1921 Tenn. LEXIS 86 (1922); Barnett v. Daniel, 11 Tenn. App. 443, 1930 Tenn. App. LEXIS 27 (1930). But see Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (1858), holding that where an estate, real and personal, is given by a testator to his daughters and a stepdaughter, to be vested in trustees for them during their natural lives, and, at their deaths, to be equally divided among their “bodily heirs,” and one of the daughters was sixty years old and living, the gift was absolute in her, because the gift over could not take effect for the reason that the time for her bearing children had passed.

9. Conveyances Creating Remainders.

Where a deed conveys a life estate to a person, with the remainder to his heirs, the heirs will, under this statute, take a remainder estate, if that was the grantor's intention as expressed in the deed. Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908); Union R.R. v. Clifton, 152 Tenn. 572, 280 S.W. 28, 1925 Tenn. LEXIS 103 (1925); Delk v. Williams, 10 Tenn. App. 246, — S.W.2d —, 1929 Tenn. App. LEXIS 29 (Tenn. Ct. App. 1929).

Conveyance for life with remainder “to heirs of her body,” gives a remainder to the bodily heirs. Delk v. Williams, 10 Tenn. App. 246, — S.W.2d —, 1929 Tenn. App. LEXIS 29 (Tenn. Ct. App. 1929); Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930); Guy v. Culberson, 164 Tenn. 509, 51 S.W.2d 500, 1932 Tenn. LEXIS 16 (1932).

10. Contingent Remainders.

A devise to testator's grandson for life, then to the heirs of his body by a legal marriage, and in event of his death without such heirs to a residuary legatee, gives the grandson a life estate with contingent remainder in fee to such as at his death might answer the description of such heirs of his body. In default of such, then by executory devise to residuary devisee. Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930).

Where there is a devise to one for life and at his death the remainder expressed to go to the heirs of the life tenant's body, and there is no provision disposing of the reversion and no residuary clause, the named devisee takes a life estate with contingent remainder to his bodily heirs, and the reversion passes as intestate property to heirs at law of testator, ascertained as of date of his death. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

11. Conveyances Creating Life Estate.

Grantee took life estate rather than fee where granting clause of deed read “to her, her lifetime, then to her heirs of her body,” and habendum clause read “to have and to hold the same to her and her heirs and assigns.” Quarles v. Arthur, 33 Tenn. App. 291, 231 S.W.2d 589, 1950 Tenn. App. LEXIS 108 (Tenn. Ct. App. 1950).

12. Conveyance During Life and at Death to Bodily Heirs.

A deed of land to one to be occupied by him and his family as a home during his life, and at his death to his bodily heirs, passed only a life estate, which was all that could be acquired under his trust deed in fee. Guy v. Culberson, 164 Tenn. 509, 51 S.W.2d 500, 1932 Tenn. LEXIS 16 (1932).

13. Applies to Deeds and Wills.

A conveyance to a named grantee “and at his death to his bodily heirs” vested a life estate in the grantee with a contingent remainder in his heirs under the provisions of this section and did not fall within the provisions of § 64-102 (now § 66-1-102) converting a fee tail into a fee simple. Butler v. Parker, 200 Tenn. 603, 293 S.W.2d 174, 1956 Tenn. LEXIS 445 (1956).

Collateral References.

Grant to one life, and afterwards, either absolutely or contingently, to grantor's heirs or next of kin, as leaving reversion or creating remainder. 16 A.L.R.2d 691.

Independent option to purchase real estate as violating rule against perpetuities or restraints on alienation. 66 A.L.R.3d 1294.

Modern status of the rule in Shelley's Case. 99 A.L.R.2d 1161.

66-1-104. Construction of “dying without heirs.”

Every contingent limitation in any deed or will, made to depend upon the dying of any person without heir, or heirs of the body, or without issue of the body, or without children, or offspring, or descendants, or other relative, shall be a limitation to take effect when such person dies without heir, issue, child, offspring, or descendants, or other relative, as the case may be, living at the time of such person's death, or born to such person within ten (10) months thereafter; unless the intention of such limitation be otherwise expressly and plainly declared in the face of the deed or will creating it.

Code 1858, § 2009 (deriv. Acts 1851-1852, ch. 91, § 3); Shan., § 3675; Code 1932, § 7601; T.C.A. (orig. ed.), § 64-104.

Cross-References. Tennessee uniform statutory rule against perpetuities, title 66, ch. 1, part 2.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 172, 173, 435.

Tennessee Jurisprudence, 20 Tenn. Juris., Perpetuities, § 5; 21 Tenn. Juris., Remainders, Reversions and Executory Interests, § 7; 25 Tenn. Juris., Wills, § 149.

Law Reviews.

Wills — Construction of Gift Over on “Death Without Issue,” 16 Tenn. L. Rev. 479 (1940).

NOTES TO DECISIONS

1. Purpose and Effect.

The provision of this section is the equivalent of a conclusive presumption that the maker of the deed or will intended the limitation to take effect within the lawful period unless the contrary is expressly and plainly declared; and if the intention is doubtful, the statute must be applied and the limitation upheld; and no presumption of an intended perpetuity will arise by construction from the use of the terms of the statute. Armstrong v. Douglass, 89 Tenn. 219, 14 S.W. 604, 1890 Tenn. LEXIS 39, 10 L.R.A. 85 (Tenn. Sep. 1890); Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893); Eager v. McCoy, 143 Tenn. 693, 228 S.W. 709, 1920 Tenn. LEXIS 53 (1921).

This section was enacted to change the common-law rule that the words “dying without issue,” and other equivalent terms, imported an indefinite failure of issue, a total extinction of descendants of the first taker, and that a limitation over dependent upon such indefinite failure or extinction, was void for remoteness, and as tending to create perpetuities, to avoid which the first taker was given an absolute estate. Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908). See Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

2. Application.

This section does not apply to a deed of date 1843, before passage of Acts 1851-1852, ch. 91. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

3. Construction of Limitations.

Such terms as “dying without heirs,” or “dying without issue,” import that the first taker is to die without leaving such heirs or issue living at the time of his death, or born to him within 10 months thereafter, as plainly expressed; and the statute applies to, and the legislative construction controls, every contingent limitation within the terms of the statute, “unless the intention of such limitation be otherwise expressly and plainly declared in the face of the deed or will creating it.” Armstrong v. Douglass, 89 Tenn. 219, 14 S.W. 604, 1890 Tenn. LEXIS 39, 10 L.R.A. 85 (Tenn. Sep. 1890); Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893).

A clause in a will, “I further direct that while said rent period is running that if any one or more of my grandchildren shall die, the remaining grandchildren shall receive all of said rents and profits,” was held to apply only to grandchildren living at the death of the testatrix. Eager v. McCoy, 143 Tenn. 693, 228 S.W. 709, 1920 Tenn. LEXIS 53 (1921).

Inasmuch as the heirs do not take by descent but by virtue of the remainder limited to them it follows that by the statute the first taker is deprived of any estate in the inheritance, and his interest is restricted in fact to what, under the rule, it was in form namely, a particular estate for life, and the will provided for a contingent remainder. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930), distinguishing Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918).

The two pertinent rules of construction are: (1) If there is an immediate gift to A, and a gift over in case of his death, or any similar expression implying the death to be a contingent event, the gift over will take effect only in the event of A's death before the testator; (2) If there is an immediate gift to A and if he dies leaving issue, or without issue, over, the gift over will take effect only in the event of A's death before the testator. Johnson v. Painter, 189 Tenn. 307, 225 S.W.2d 72, 1949 Tenn. LEXIS 430 (1949), citing Eckhardt v. Phillips, 176 Tenn. 34, 137 S.W.2d 301, 1939 Tenn. LEXIS 96 (1939).

Where testator used phrase “should either die without issue,” court was required to consider entire will in ascertaining whether testator meant death in his own lifetime or death at any time. Vickers v. Vickers, 205 Tenn. 86, 325 S.W.2d 544, 1959 Tenn. LEXIS 343 (1959).

This section does not require that limitation be construed as requiring death in the lifetime of testator where there is a clear expression by testator to make death of the first taker mean a death at any time. Vickers v. Vickers, 205 Tenn. 86, 325 S.W.2d 544, 1959 Tenn. LEXIS 343 (1959).

Where the first-named devisee was granted only a life estate in the income produced by corpus of a trust with a limitation over in the event of death of the first taker without living children, the rule of construction providing that the limitation over would take effect only in the event of the death of the first-named devisee before the death of the testator did not apply. Shannon v. Union Planters Nat'l Bank, 537 S.W.2d 919, 1976 Tenn. LEXIS 621 (Tenn. 1976).

Where deed contained provision that in the event the grantee should die without issue, the property should revert back to the grantors or their estate to be redistributed between their legal heirs, and also contained provision which would make the gift of the property an advancement to the grantee against her future inheritance from the grantors, it would be presumed that a reversion would take place only if the grantee died without issue before the death of the grantors. Collins v. Smithson, 585 S.W.2d 598, 1979 Tenn. LEXIS 483 (Tenn. 1979).

4. Prior Rule.

Before the enactment of this section, it was held that dying without issue, without heirs, and without heirs of the body, without more, or without any qualifying words to control, imported an indefinite failure of issue, heirs, or heirs of the body, a total extinction of descendants of the first taker; that a limitation over dependent upon such indefinite failure was void for remoteness, as tending to create perpetuities, and that the first taker took an absolute estate. Williams v. Turner, 18 Tenn. 287, 1837 Tenn. LEXIS 22 (1837); Bowman v. Tucker, 22 Tenn. 648, 1842 Tenn. LEXIS 171 (1842); Chester v. Greer, 24 Tenn. 26, 1844 Tenn. LEXIS 5 (1844); Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844); Bramlet v. Bates, 33 Tenn. 554, 1853 Tenn. LEXIS 85 (1853); Randolph v. Wendel, 36 Tenn. 646, 1857 Tenn. LEXIS 68 (1857); Hamner v. Hamner, 40 Tenn. 398, 1859 Tenn. LEXIS 113 (1859), questioned, Stones v. Maney, 3 Tenn. Ch. 731 (1878); Kirk v. Furgerson, 46 Tenn. 479, 1869 Tenn. LEXIS 83 (1869); Williams v. Williams, 57 Tenn. 566, 1873 Tenn. LEXIS 264 (1873); Stones v. Maney, 3 Tenn. Ch. 731 (1878); Armstrong v. Douglass, 89 Tenn. 219, 14 S.W. 604, 1890 Tenn. LEXIS 39, 10 L.R.A. 85 (Tenn. Sep. 1890); Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893); Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908).

5. Perpetuities — Invalidity.

Since, as well as before, the enactment of this section, perpetuities are unlawful, and when expressly and plainly declared, the contingent limitation that can take effect only upon the falling in of the perpetuity, will not be saved by this section, and the first taker will take the absolute title. Armstrong v. Douglass, 89 Tenn. 219, 14 S.W. 604, 1890 Tenn. LEXIS 39, 10 L.R.A. 85 (Tenn. Sep. 1890); Boyd v. Robinson, 93 Tenn. 1, 23 S.W. 72, 1893 Tenn. LEXIS 32 (1893). See Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844); Franklin v. Armfield, 34 Tenn. 305, 1854 Tenn. LEXIS 52 (1854); White v. Hale, 42 Tenn. 77, 1865 Tenn. LEXIS 20 (1865); Turner v. Ivie, 52 Tenn. 222, 1871 Tenn. LEXIS 254 (1871); Davis v. Williams, 85 Tenn. 646, 4 S.W. 8, 1887 Tenn. LEXIS 6 (1887); Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888).

A testator cannot confer upon another power to vest title at such a time as would create a perpetuity. Eager v. McCoy, 143 Tenn. 693, 228 S.W. 709, 1920 Tenn. LEXIS 53 (1921).

6. Time Within Which Interest Must Vest.

Executory limitations, whether of real or personal estate, in order to be valid, must vest in interest, if at all, within a life or lives in being and 21 years and a fraction thereafter, for the term of gestation in cases of posthumous birth. Eager v. McCoy, 143 Tenn. 693, 228 S.W. 709, 1920 Tenn. LEXIS 53 (1921).

7. Heirs — Meaning.

After devising property to his wife and son testator provided that, in case of their deaths “and no heirs to them be left,” the property should revert to his brothers. Executors were authorized to dispose of property left to the son for his maintenance. “Heirs” did not mean children and absolute estates were created in wife and son. It was competent to show the quantity and kind of testator's estate and how lands devised to son were derived. Hennegar v. Deadrick, 54 S.W. 138, 1899 Tenn. Ch. App. LEXIS 118 (Tenn. Ch. App. 1899).

8. Children — Meaning.

While the term “children” may be construed to embrace grandchildren, in view of the context of the instrument, yet such term will not be so construed where there is nothing to authorize its such enlargement; and where the testator devised a life estate to his daughters, with remainder in fee to their children, and in default of children, then to the testator's children who should then be living, the term “children” cannot be enlarged to include the testator's grandchildren. Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908). See Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930).

It is a general rule of common law that the words “child” and “children” do not in their natural sense and proper signification include a grandchild or grandchildren, and that such words mean the immediate offspring of the parent. Hoggatt v. Clopton, 142 Tenn. 184, 217 S.W. 657, 1919 Tenn. LEXIS 47 (1919).

Executory devise over, in the event of death without children and grandchildren of a niece, devising a base or determinable fee to the “children” of a deceased nephew then living, was held not to include grandchildren of such nephew; the word “children” having been used in its ordinary sense, in view of the context. Hoggatt v. Clopton, 142 Tenn. 184, 217 S.W. 657, 1919 Tenn. LEXIS 47 (1919).

9. Valid Executory Devises — Examples.

Limitations over dependent on a definite failure of issue, or a contingency which must happen, if at all, within the period of a life or lives in being, and 21 years and 10 months thereafter, are good executory devises, and will be upheld by the courts. Armstrong v. Douglass, 89 Tenn. 219, 14 S.W. 604, 1890 Tenn. LEXIS 39, 10 L.R.A. 85 (Tenn. Sep. 1890). See Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844); Horton v. Thompson, 3 Cooper's Tenn. Ch. 575 (1877); Cowan, McClung & Co. v. Wells, 73 Tenn. 682, 1880 Tenn. LEXIS 198 (1880); Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888).

A devise to the unborn child of an unborn child, eo nomine, is void, because it may not take effect within the period of a life or lives in being, and 21 years and 10 months thereafter; but when, by the express terms of the devise, the limitation over must take effect within the period of a life or lives of persons in being, then the reason supporting the objection fails, and the limitation over is good. Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888). See Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844).

Under a will giving testator's wife for life half of all his estate in a particular county, and to his niece the other half of such property, the estate to be kept together and managed for the joint benefit of the niece and wife until one should marry, and thereafter, if they chose, the property to go to the niece on the death of the wife, and “in the event of her dying without children or grandchildren the property to go” to the children of a deceased nephew then living, the niece took a base or determinable fee in the property; there being a valid executory devise over in favor of the children of the nephew on the death of the niece at any time without children or grandchildren. Hoggatt v. Clopton, 142 Tenn. 184, 217 S.W. 657, 1919 Tenn. LEXIS 47 (1919).

Where the interests of grandchildren devised are subject to contingencies, but all these events must happen and the various classes must be determined, within lives in being at the death of the testatrix, such interests begin within the limits of the rule against perpetuities. Eager v. McCoy, 143 Tenn. 693, 228 S.W. 709, 1920 Tenn. LEXIS 53 (1921).

Where first-named devisees, testator's wife and children, were granted only a life estate in income produced by corpus of trust, and where it expressly appeared on the face of the will that testator did not intend that the first-named devisees would in any event take an absolute interest, testator's intention was that upon the deaths of his wife and children the trust corpus would pass under his will and not the respective wills of his wife and children. Shannon v. Union Planters Nat'l Bank, 537 S.W.2d 919, 1976 Tenn. LEXIS 621 (Tenn. 1976).

10. Failure of Limitation Over.

Where there is an absolute gift to the first taker, followed with a limitation over upon his death without heirs, the absolute gift to the first taker remains undisturbed upon his death with children surviving him. Cowan, McClung & Co. v. Wells, 73 Tenn. 682, 1880 Tenn. LEXIS 198 (1880); Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888); Nott v. Fitzgibbon, 107 Tenn. 54, 64 S.W. 26, 1901 Tenn. LEXIS 58 (1901); Williamson v. Tunis, 107 Tenn. 83, 64 S.W. 10, 1901 Tenn. LEXIS 61 (1901); Katzenberger v. Weaver, 110 Tenn. 620, 75 S.W. 937, 1903 Tenn. LEXIS 80 (1903).

11. Devises Over — Ineffectiveness Where Devisee Survives Testator.

It is an established rule in the construction of wills that where a devise or bequest is made to a person with a gift over “in case of” the death of the devisee or legatee, the gift over is contingent upon such devisee or legatee dying in the lifetime of the testator. Therefore, where a devise or bequest is made to A, and “in case of” his death, or if he die, to B, A surviving the testator takes the estate devised absolutely. Katzenberger v. Weaver, 110 Tenn. 620, 75 S.W. 937, 1903 Tenn. LEXIS 80 (1903), distinguishing Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (Tenn. Dec. 1858); Cowan, McClung & Co. v. Wells, 73 Tenn. 682, 1880 Tenn. LEXIS 198 (1880); Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884); Stovall v. Austin, 84 Tenn. 700, 1886 Tenn. LEXIS 159 (1886); Armstrong v. Douglass, 89 Tenn. 219, 14 S.W. 604, 1890 Tenn. LEXIS 39, 10 L.R.A. 85 (Tenn. Sep. 1890); Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908).

It is not only a well settled rule of construction of wills, but a rule of property, that the words “die without issue,” as applied to the first taker, and upon the happening of which a contingent remainder or limitation over is to become effective, contemplate and mean the death of the devisee or legatee, without issue surviving him during the lifetime of the testator. This rule is not affected by this section. Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908); Johnson v. Painter, 189 Tenn. 307, 225 S.W.2d 72, 1949 Tenn. LEXIS 430 (1949), distinguishing Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884); Stovall v. Austin, 84 Tenn. 700, 1886 Tenn. LEXIS 159 (1886). See Bramlet v. Bates, 33 Tenn. 554, 1853 Tenn. LEXIS 85 (1853); Vaughn v. Cator, 85 Tenn. 302, 2 S.W. 262, 1886 Tenn. LEXIS 44 (1886); Meacham v. Graham, 98 Tenn. 190, 39 S.W. 12, 1896 Tenn. LEXIS 217 (Tenn. Dec. 1896); Katzenberger v. Weaver, 110 Tenn. 620, 75 S.W. 937, 1903 Tenn. LEXIS 80 (1903); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Where there is a devise to a son and the heirs of his body, followed by a condition that if he should die without heirs, then to his sister, the fee simple estate thus created is not impaired by such limitation over, where the son survived the testator, since under the rule of construction and property these words would import the death of the devisee in the lifetime of the testator. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

The rule that devise over is ineffective where devisee survives testator applies notwithstanding the fact that at the time of making the will, the devisee (the first taker) was only eight years old and the testator died within one year thereafter. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Provision in will providing for division of real estate of testator between two sons after death of testator's widow and providing that “if either one of my sons, or both of them should die without children born to them” the land should go to his stepchildren meant death of one or both of the sons within the lifetime of the testator, and where the sons survived the testator both married son with children and unmarried son without children took an undivided half interest in the realty in fee upon death of the widow. Johnson v. Painter, 189 Tenn. 307, 225 S.W.2d 72, 1949 Tenn. LEXIS 430 (1949).

12. Conveyance of Contingent Remainder.

A devise to testator's grandson during life and then to the heirs of his body, and, in the event of his death without such heirs, to the testator's residuary legatee, operates to give the grandson an estate for life, with a contingent remainder in fee to such persons, as, at his death, might answer the description of heirs of his body; and, if he left no heirs of his body then living, the devise operated to give such residuary legatee an estate in fee, by way of executory devise; and a conveyance by the residuary legatee of this interest to the grandson would vest the latter with the fee subject to the contingent remainder in fee to the heirs of his body living at his death. Williams v. Williams, 57 Tenn. 566, 1873 Tenn. LEXIS 264 (1873); Williams v. Williams, 1 Cooper's Tenn. Ch. 306 (1873); Williams v. Williams, 62 Tenn. 55, 1873 Tenn. LEXIS 137 (1873). See Campbell v. Lewisburg & N. R. Co., 160 Tenn. 477, 26 S.W.2d 141, 1929 Tenn. LEXIS 124 (1930).

A deed of conveyance of land to one for life, and then to his children, with a provision that, if his issue should become extinct within 21 years after his death, the property should revert to one of the grantors, vests a determinable fee in remainder in the life tenant's surviving children, subject to the contingent reversionary estate, upon a failure of the issue of the life tenant within 21 years after his death. Bradford v. Leake, 124 Tenn. 312, 137 S.W. 96, 1912D Am. Ann. Cas. 1140, 1910 Tenn. LEXIS 57 (1910).

In this case the reversionary grantor subsequently devised all her estate, including the contingent reversionary estate, to her husband, the other grantor, who conveyed such contingent estate to his brother, and it was held that the brother took the contingent reversionary interest, and that upon a failure of the issue of the life tenant within 21 years after his death, he would take the absolute estate. Bradford v. Leake, 124 Tenn. 312, 137 S.W. 96, 1912D Am. Ann. Cas. 1140, 1910 Tenn. LEXIS 57 (1910). See Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897).

Collateral References.

Distinction between contingent estates and estates vested subject to defeasance. 131 A.L.R. 712.

Gift to issue, children, wife, etc., as implied from a provision over in default of such persons. 22 A.L.R.2d 177.

Phrase “from and after” death of life beneficiary as affecting character of remainder as vested or contingent. 103 A.L.R. 598.

Possibility of issue extinct, doctrine as to, as affecting property rights. 67 A.L.R. 538, 146 A.L.R. 794, 98 A.L.R.2d 1285.

Right of life tenant with power to anticipate or consume principal to dispose of it by inter vivos gift. 83 A.L.R.3d 135.

Validity and construction of bequest with limitation over to another in event that original beneficiary dies before distribution, payment, or receipt thereof. 59 A.L.R.3d 1043.

Vested or contingent character of remainder which is subject to be defeated by death of remainderman without issue before determination of particular estate. 109 A.L.R. 136.

66-1-105. Contingent remainder supported by less than freehold.

It shall not be necessary, as at common law, that a contingent remainder be supported by a particular estate of the dignity of a freehold, but it shall be sufficient and lawful for contingent remainders to be supported by a preceding estate for years.

Acts 1877, ch. 102, § 1; Shan., § 3676; Code 1932, § 7602; T.C.A. (orig. ed.), § 64-105.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 171.

Law Reviews.

Destructibility of Contingent Remainders in Tennessee (Jack D. Jones and William R. Heck), 42 Tenn. L. Rev. 761 (1975).

66-1-106. Estate with unlimited power of disposition.

When the unlimited power of disposition, qualified or unqualified, not accompanied by any trust, is given expressly, in any written instrument, to the owner of any particular estate for life or years, legal or equitable, such estate is changed into a fee absolute as to right of disposition, and rights of creditors and purchasers, but subject to any future estate limited thereon or executory devise thereof, in event and so far as the power is not executed or the property sold for the satisfaction of debts during the continuance of the particular estate; provided, that any proceeds from the sale of such estate, not needed for the satisfaction of the debts of such owner during the continuance of the particular estate, shall be held in trust by such owner for the beneficiaries of the remainder interest and the purposes stated in such written instrument.

Code 1932, §§ 7603, 8093; Acts 1981, ch. 450, § 1; T.C.A. (orig. ed.), § 64-106.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 162, 432, 999.

Tennessee Jurisprudence, 11 Tenn. Juris., Estates, § 8; 21 Tenn. Juris., Remainders, Reversions and Executory Interests, §§ 17, 28; 25 Tenn. Juris., Wills, §§ 132, 135, 138.

Law Reviews.

Survey of Tennessee Property Law, IV. Transfers of Land (Beverly A. Rowlett), 48 Tenn. L. Rev. 72 (1980).

NOTES TO DECISIONS

1. Application and Effect.

Although a will gives an unrestricted power of disposition of legacies, the limitation over will not be void under this section. Parker v. Milam, 166 Tenn. 266, 61 S.W.2d 674, 1933 Tenn. LEXIS 90 (1933); Abernathy v. Adams, 31 Tenn. App. 559, 218 S.W.2d 747, 1948 Tenn. App. LEXIS 114 (1948).

The rule that “if the first taker is given an estate in fee or for life, coupled with an unlimited power of disposition, the fee or absolute estate vests in the first taker, and the limitation over is void,” is now circumscribed by this section. Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562, 1933 Tenn. LEXIS 4, 92 A.L.R. 343 (1933).

Where life estate was devised to executrix with a limitation over and unlimited power of disposition, there was no significance in the fact that executrix was relieved of the necessity of filing inventory, giving bond or making settlement with court, and this section would convert it into a fee only if she actually disposed of the property and the limitation over would take effect as to the part undisposed of. Abernathy v. Adams, 31 Tenn. App. 559, 218 S.W.2d 747, 1948 Tenn. App. LEXIS 114 (1948).

Where conveyance was executed to husband and wife with unlimited power of disposition with fee simple to go to husband if wife should die first, or, if husband should die first, life estate to vest in wife with fee simple to heirs or husband on death of wife, wife was entitled to share as life tenant where she survived husband and property was condemned by state. Leach v. Dick, 205 Tenn. 221, 326 S.W.2d 438, 1959 Tenn. LEXIS 356 (1959).

The effect of T.C.A. § 66-1-106 is that the estate holder's power of disposition, whether qualified or unqualified, not accompanied by a trust, when given an estate for life or years, was elevated to a fee simple absolute as to creditors and purchasers but subject to any future interests if the power goes unexercised or the lands are not sold in satisfaction of debts. Hall v. Hall, 604 S.W.2d 851, 1980 Tenn. LEXIS 495 (Tenn. 1980).

Conveyance by a life tenant with power to dispose of property cut off remaindermen's interest where the remainder interest was only in the real property owned by the testator at his death. Hobbs v. Wilson, 614 S.W.2d 328, 1980 Tenn. LEXIS 518 (Tenn. 1980).

2. Power of Disposition Contemplated.

The power of unlimited disposition of realty or personalty which will defeat a limitation over must be a power given by the will itself, either directly or by necessary implication and a power attaching merely as a legal incident to the estate given by the will will not defeat a limitation over. Parker v. Milam, 166 Tenn. 266, 61 S.W.2d 674, 1933 Tenn. LEXIS 90 (1933).

Limitation over following an unlimited power of disposition was not void. Leach v. Dick, 205 Tenn. 221, 326 S.W.2d 438, 1959 Tenn. LEXIS 356 (1959).

The power to sell or dispose of assets during lifetime does not include the power to dispose of assets by will. Skovron v. Third Nat'l Bank, 509 S.W.2d 497, 1973 Tenn. App. LEXIS 318, 83 A.L.R.3d 111 (Tenn. Ct. App. 1973).

3. Construction of Wording of Will or Deed.

Clause giving children only a lifetime use of property directed by earlier clause to be “equally divided” among the children or their representatives, so that the property might descend unimpaired to the testator's grandchildren, gave the children only a life estate in their several shares of the property. Parker v. Milam, 166 Tenn. 266, 61 S.W.2d 674, 1933 Tenn. LEXIS 90 (1933).

Where testatrix made bequest of residue to nephew “to handle as he sees fit during his life time; and the balance to go to his two daughters,” and further subject to wish of testatrix that nephew take care of his uncle the nephew received a life estate with power to encroach upon the corpus to the extent required to take care of daughters and the uncle. Redman v. Evans, 184 Tenn. 404, 199 S.W.2d 115, 1947 Tenn. LEXIS 393 (1947).

Where deed transferred land to husband and wife “a one half interest to each. Each one to have full control over the one half interest deeded to them and at the death of either one the survivor to become owner of both interests with power to sell it and make title and use the proceeds as they see proper for their benefit, and at the death of the surviving partner if anything remains the same to go to the legal heirs” of husband and wife, “one half to each one's heirs,” wills executed by wife transferring interest to husband, and by husband to second wife did not pass title and heirs of husband and first wife were entitled to land. Thompson v. Turner, 186 Tenn. 241, 209 S.W.2d 25, 1948 Tenn. LEXIS 543 (1948).

Devise by testator of property to wife “to do with as she sees fit during her life” with provision that at the death of the wife the “remainder” of the estate was to go to named individuals or their heirs gave wife unlimited power of disposition so that she could convey land subject to the devise in absolute fee. Jones v. Jones, 225 Tenn. 12, 462 S.W.2d 872, 1971 Tenn. LEXIS 269 (1971).

Will which stated “I will, devise and bequest to my wife … all of my property … to have and hold during the full term of her natural life …” passed only a life estate to the wife and not a fee absolute estate, even though will gave her right of sale of personal property and charged the estate with monthly payments to decedent's brother. Skovron v. Third Nat'l Bank, 509 S.W.2d 497, 1973 Tenn. App. LEXIS 318, 83 A.L.R.3d 111 (Tenn. Ct. App. 1973).

T.C.A. § 66-1-106 did not apply to deed from husband to wife which granted her the property with a condition that if the husband should die before the wife the wife should have full control and power to handle the property “so long as she lives my widow” but if she should remarry the property would go to his children. Hall v. Hall, 604 S.W.2d 851, 1980 Tenn. LEXIS 495 (Tenn. 1980).

Where in a codicil to the husband's will, wife was given a life estate in the real property owned by her husband at the time of his death and also was expressly authorized to use any and all of the real property she decided was necessary for her comfort and maintenance, with her being the sole judge of her needs, this unlimited power of disposition changed the wife's life estate into a fee simple with power of disposition and placed in her the power to terminate the interest of the remaindermen by executing the power of disposition in her lifetime. Hobbs v. Wilson, 614 S.W.2d 328, 1980 Tenn. LEXIS 518 (Tenn. 1980).

Testator's devise of property to the his wife “for her lifetime and at her death the remainder, if any at that time, to be divided equally” among his children did not give the widow an unlimited power of disposition, qualified or unqualified. The testator devised a life estate to his widow and a vested remainder to his named children. Ogle v. Ogle, 880 S.W.2d 668, 1994 Tenn. LEXIS 197 (Tenn. 1994).

4. Estate Passing to Remaindermen.

If there is found on the face of the bequest of a life estate a power of disposition, “qualified or unqualified,” insofar as the power is not executed, or the property not sold for debts during the continuance of the life estate, the estate will pass to the remaindermen upon the death of the life tenant. Redman v. Evans, 184 Tenn. 404, 199 S.W.2d 115, 1947 Tenn. LEXIS 393 (1947).

The limitation over is not void, but takes effect upon whatever property remains undisposed of at the death of the first taker. Abernathy v. Adams, 31 Tenn. App. 559, 218 S.W.2d 747, 1948 Tenn. App. LEXIS 114 (1948).

Because the pre-1981 version of T.C.A. § 66-1-106 existed when testator died in 1963, the testator's spouse sale of the property terminated the remaindermen's interest in the farm; therefore the remaindermen's interest did not transfer to the proceeds of the sale of the farm. Fell v. Rambo, 36 S.W.3d 837, 2000 Tenn. App. LEXIS 276 (Tenn. Ct. App. 2000), rehearing denied, — S.W.3d —, 2000 Tenn. App. LEXIS 410 (Tenn. Ct. App. June 22, 2000).

Collateral References.

Creditor's attempt to subject property to their claims, validity of provision for limitation over or forfeiture in case of. 80 A.L.R. 1013.

Right of life tenant with power to anticipate or consume principal to dispose of it by inter vivos gift. 83 A.L.R.3d 135.

66-1-107. Survivorship in joint tenancy abolished.

In all estates, real and personal, held in joint tenancy, the part or share of any tenant dying shall not descend or go to the surviving tenant or tenants, but shall descend or be vested in the heirs, executors, or administrators, respectively, of the tenant so dying, in the same manner as estates held by tenancy in common.

Code 1858, § 2010 (deriv. Acts 1784 (Apr.), ch. 22, § 6); Shan., § 3677; Code 1932, § 7604; T.C.A. (orig. ed.), § 64-107.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 439, 629.

Tennessee Jurisprudence, 8 Tenn. Juris., Cotenancy, § 2; 14 Tenn. Juris., Husband and Wife, §§ 7, 11; 25 Tenn. Juris., Wills, §§ 137, 155.

Law Reviews.

Real Property — Tenancy by the Entirety — Joint Rights of Husband and Wife, 42 Tenn. L. Rev. 815 (1975).

NOTES TO DECISIONS

1. In General.

This section extends to all cases, as well by devise as by deed, and cuts down an estate in joint tenancy to an estate in common, and destroys the common-law doctrine of survivorship. Strong v. Ready, 28 Tenn. 168, 1848 Tenn. LEXIS 64 (1848); Dixon v. Cooper, 88 Tenn. 177, 12 S.W. 445, 1889 Tenn. LEXIS 40 (1889), superseded by statute as stated in, Jacobsen v. Flathe, — S.W.2d —, 1997 Tenn. App. LEXIS 635 (Tenn. Ct. App. Sept. 17, 1997); Bennett v. Hutchens, 133 Tenn. 65, 179 S.W. 629, 1915 Tenn. LEXIS 74 (1915); Myers v. Comer, 144 Tenn. 475, 234 S.W. 325, 1921 Tenn. LEXIS 48 (1921).

This section applies to and abolishes technical joint tenancy only. It is not applicable to choses in action. Scholze v. Scholze, 2 Tenn. App. 80, 1925 Tenn. App. LEXIS 96 (1925).

In Tennessee joint tenancies have been converted into tenancies in common by this section. United States v. 654.8 Acres of Land, 102 F. Supp. 937, 1952 U.S. Dist. LEXIS 4824 (E.D. Tenn. Feb. 12, 1952).

Although common-law joint tenancy with right of survivorship has been abolished by statute, it can still be created by contract. Lowry v. Lowry, 541 S.W.2d 128, 1976 Tenn. LEXIS 534 (Tenn. 1976).

The contract necessary to create a joint account with the right of survivorship may be proved by oral testimony and that the right of survivorship may vest in a third party beneficiary who was not a party to the agreement between the bank and the depositor. Simmons v. Foster, 622 S.W.2d 838, 1981 Tenn. App. LEXIS 542 (Tenn. Ct. App. 1981).

2. Effect of Section as to Multiplicity of Suits.

In an action for the breach of a covenant to convey land, the representative of a deceased obligee must join with the survivors in the action and if the survivors sue without the representative of the deceased, they ought to be stopped by plea in abatement from proceeding in the action brought by them alone. Gray v. Wilson, 19 Tenn. 394, 1838 Tenn. LEXIS 67 (1838); Carraway v. Burton, 23 Tenn. 108, 1843 Tenn. LEXIS 29 (1843).

By this section the most important characteristic of joint tenancy — survivorship — has been abolished in this state, but the statute does not abridge the right of the owner of property to expressly provide for survivorship by deed and survivorship must now result from the terms of the grant rather than by operation of law. Jones v. Jones, 185 Tenn. 586, 206 S.W.2d 801, 1947 Tenn. LEXIS 360 (1947).

3. Survivorship — Intent to Create — Effect.

This section does not prohibit the creation of estates of survivorship, and where in the instrument there is an intention to create such, this section is inapplicable, whether the instrument be deed or will. McLeroy v. McLeroy, 163 Tenn. 124, 40 S.W.2d 1027, 1930 Tenn. LEXIS 139 (1930); Jones v. Jones, 185 Tenn. 586, 206 S.W.2d 801, 1947 Tenn. LEXIS 360 (1947); Runions v. Runions, 186 Tenn. 25, 207 S.W.2d 1016, 1948 Tenn. LEXIS 512, 1 A.L.R.2d 242 (1948); Peebles v. Peebles, 223 Tenn. 221, 443 S.W.2d 469, 1969 Tenn. LEXIS 406 (1969).

Where a deed conveyed property to a son and daughter “and to the survivor,” the son became absolute owner on death of daughter. McLeroy v. McLeroy, 163 Tenn. 124, 40 S.W.2d 1027, 1930 Tenn. LEXIS 139 (1930). See Myers v. Comer, 144 Tenn. 475, 234 S.W. 325, 1921 Tenn. LEXIS 48 (1921); Mullens v. Mullens, 161 Tenn. 165, 29 S.W.2d 261, 1929 Tenn. LEXIS 45 (1930).

While this section abolishes joint tenancies, it does not prevent a deed or will from vesting in two or more persons a life estate with a contingent remainder to the survivor or survivors. Watts v. Stanton, 28 Tenn. App. 381, 190 S.W.2d 617, 1945 Tenn. App. LEXIS 79 (Tenn. Ct. App. 1945).

Since the enactment of this section, the common law unities of time, title, interest, and possession requisite to joint tenancy have become academic as applied to that estate, a tenancy in common resulting if no contrary intent is expressed, whether or not the unities are present but when the intent to establish an estate by survivorship is clear, the existence or nonexistence of the unities becomes immaterial upon the idea that the rule fails where the reason fails. Jones v. Jones, 185 Tenn. 586, 206 S.W.2d 801, 1947 Tenn. LEXIS 360 (1947).

Where a brother owning one half of family farm and two sisters owning the other half of family farm signed an instrument wherein the brother reserved a life estate and a remainder in fee contingent upon his survival and conveyed a life estate in his land to each of the sisters as well as a remainder to each in fee contingent upon their survival, and the sisters reserved and conveyed similar interests, each to the other and each to the brother in their lands there was a joint life estate in the whole of the land with remainder in fee in each in the whole of the land contingent upon survival. Jones v. Jones, 185 Tenn. 586, 206 S.W.2d 801, 1947 Tenn. LEXIS 360 (1947).

A tenancy in common may have a right of survivorship attached to it if the grantor expresses an intention that it shall be so. Runions v. Runions, 186 Tenn. 25, 207 S.W.2d 1016, 1948 Tenn. LEXIS 512, 1 A.L.R.2d 242 (1948).

Specifying tenancy by the entirety was the full equivalent of declaring in so many words that there should be a right of survivorship. Runions v. Runions, 186 Tenn. 25, 207 S.W.2d 1016, 1948 Tenn. LEXIS 512, 1 A.L.R.2d 242 (1948).

Husband who upon acquisition of land conveyed a one half undivided interest in the land to his wife and who stated in deed “It is intended to convey the property herein described so that we will hold the same as tenants by the entirety” expressed an intention to create an estate of survivorship, hence on his death the wife was entitled to fee. Runions v. Runions, 186 Tenn. 25, 207 S.W.2d 1016, 1948 Tenn. LEXIS 512, 1 A.L.R.2d 242 (1948).

Where testatrix devised estate to her brother and sister jointly and equally and provided that on death of either the survivor was to take the one half of which the deceased should be the owner, testatrix intended to create a right of survivorship and the surviving sister took her brother's interest in the property. Peebles v. Peebles, 223 Tenn. 221, 443 S.W.2d 469, 1969 Tenn. LEXIS 406 (1969).

T.C.A. § 66-1-107 was not applicable where the evidence established the intent of the depositor; here, the evidence supported finding that certificate of deposit payable to decedent or niece was intended to go to niece when decedent died, rather than to decedent's heirs. Gay v. Phillips, 667 S.W.2d 495, 1983 Tenn. App. LEXIS 679 (Tenn. Ct. App. 1983).

In a case in which the owner of real property conveyed, by quitclaim deed, an interest to herself and her son as joint tenants, with the right of survivorship, and, a year later, the owner then conveyed her interest to her grandson by quitclaim deed, the trial court did not err in granting summary judgment to the son ruling that he owned the property in fee simple because the owner transferred only her right of survivorship to her grandson, but that right did not come into play as she predeceased her son; thus, the son properly exercised his right of survivorship and became the sole owner in fee of the property. Bryant v. Bryant, — S.W.3d —, 2015 Tenn. App. LEXIS 800 (Tenn. Ct. App. Sept. 28, 2015), rev'd, 522 S.W.3d 392, 2017 Tenn. LEXIS 212 (Tenn. Apr. 19, 2017).

4. Estates by Entireties and Joint Tenancy Distinguished.

Estate by entireties is a unit of indivisible parts, differing from a joint tenancy in the fact that the joint tenancy is a unit of divisible parts. The indivisible whole is vested in the husband and wife as two persons who are actually distinct, yet who, according to legal intendment, are one and the same. When one joint tenant died, the survivor took by the right of survivorship; but upon the death of the husband or wife, no new estate arises. There is a mere change in the properties of the legal person holding the originally granted estate, and the survivor takes no new estate or interest, nothing that was not in him or her before. Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); Beddingfield v. Estill & Newman, 118 Tenn. 39, 100 S.W. 108, 1906 Tenn. LEXIS 78 (1907); Bennett v. Hutchens, 133 Tenn. 65, 179 S.W. 629, 1915 Tenn. LEXIS 74 (1915); McGhee v. Henry, 144 Tenn. 548, 234 S.W. 509, 1921 Tenn. LEXIS 55, 18 A.L.R. 103 (1921).

A deed, conveying to one named and his wife, named, “their heirs and assigns forever jointly and severally in equal moieties,” was held to convey to the husband and wife as joint tenants or tenants in common, and not by the entirety; and, survivorship in joint tenancy being abolished, the husband could not convey the full title upon the wife's death, so as to bar her heirs. Myers v. Comer, 144 Tenn. 475, 234 S.W. 325, 1921 Tenn. LEXIS 48 (1921).

5. Estates by Entireties.

The same words of a conveyance which would make two other persons joint tenants under the common law, or tenants in common under this section, will make the husband and wife tenants by the entirety. Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Bennett v. Hutchens, 133 Tenn. 65, 179 S.W. 629, 1915 Tenn. LEXIS 74 (1915); Young v. Brown, 136 Tenn. 184, 188 S.W. 1149, 1916 Tenn. LEXIS 115 (1916).

Tenancy by the entirety may exist whether the estate is in fee, for life, for years, or other chattel interest in land, and whether the property be in possession, reversion, or remainder. Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974).

The granting clause in a conveyance to “William Farley and wife” is just as effective as if it had stated “to William Farley and wife, Cora Farley,” for it is not necessary that the grantee be described by name, if otherwise identified. Ballard v. Farley, 143 Tenn. 161, 226 S.W. 544, 1920 Tenn. LEXIS 5 (1920).

Bequest of money to husband and wife jointly makes the legatees tenants by the entireties. Campbell v. Campbell, 167 Tenn. 77, 66 S.W.2d 990, 1933 Tenn. LEXIS 7 (1934).

6. —Effect of Statute.

This section applies to estates held in joint tenancy, and not to estates by entireties and does not abrogate the common law as to estates held by husband and wife by the entireties, because their such estate is not a joint tenancy. Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Campbell v. Foster, 2 Cooper's Tenn. Ch. 402 (1875); Bennett v. Hutchens, 133 Tenn. 65, 179 S.W. 629, 1915 Tenn. LEXIS 74 (1915); Scholze v. Scholze, 2 Tenn. App. 80, 1925 Tenn. App. LEXIS 96 (1925).

7. —Marriage Relation — Necessity.

Where the rights of a prior purchaser do not intervene, a divorce of the husband and wife owning an estate by the entirety severs and destroys that estate as between them, and they then hold by the moieties or as tenants in common. Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); Gillespie v. Worford, 42 Tenn. 632, 1865 Tenn. LEXIS 106 (1866); Aiken v. Suttle, 72 Tenn. 103, 1879 Tenn. LEXIS 11 (1879); Hopson v. Fowlkes, 92 Tenn. 697, 23 S.W. 55, 1893 Tenn. LEXIS 26, 36 Am. St. Rep. 120, 23 L.R.A. 805 (1893); Brown v. Brown, 160 Tenn. 685, 28 S.W.2d 350, 1929 Tenn. LEXIS 142 (1930).

A marriage must exist when the conveyance is made, in order to create an estate by the entirety, for by a conveyance to a man and woman while single, they take by moieties, and if they afterwards marry they will continue to hold by the moieties, and not by the entirety. Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); Hopson v. Fowlkes, 92 Tenn. 697, 23 S.W. 55, 1893 Tenn. LEXIS 26, 36 Am. St. Rep. 120, 23 L.R.A. 805 (1893).

Where husband had previously parted with his interest in the land before the procurement of the divorce, the decree of divorce is not effective to make the wife and the purchasers of her husband tenants in common. Whitley v. Meador, 137 Tenn. 163, 192 S.W. 718, 1916 Tenn. LEXIS 64, L.R.A. (n.s.) 1917D736 (1917).

Estate by the entireties is not created by a conveyance to a man and a woman who are not under the marital bond, even though they are so described in the instrument; and such grantees would be tenants in common, even though believed by themselves and by the grantor to be husband and wife. McKee v. Bevins, 138 Tenn. 249, 197 S.W. 563, 1917 Tenn. LEXIS 27 (1917).

8. —Allegations in Deed.

The deed need not show upon its face that the grantees are husband and wife, in order to create the estate by entireties. Bennett v. Hutchens, 133 Tenn. 65, 179 S.W. 629, 1915 Tenn. LEXIS 74 (1915).

9. —Survivorship.

By a deed conveying land to a husband and wife, they take but one estate, as a corporation would take, being deemed in law but one person with the legal existence of the wife incorporated into that of the husband; and, if one die, the estate continues in the survivor in the same manner as it would in the corporation, if a corporator should die. Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); Beddingfield v. Estill & Newman, 118 Tenn. 39, 100 S.W. 108, 1906 Tenn. LEXIS 78 (1907). See Berrigan v. Fleming, 70 Tenn. 271, 1879 Tenn. LEXIS 174 (1879); Shields v. Netherland, 73 Tenn. 193, 1880 Tenn. LEXIS 110 (1880); Chambers v. Chambers, 92 Tenn. 707, 23 S.W. 67, 1893 Tenn. LEXIS 27 (1893).

Where the wife is the owner of land, and she and her husband convey it to a third person, who conveys the same back to them they hold the estate by the entirety, and the survivor, though the husband, will take it. Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Young v. Brown, 136 Tenn. 184, 188 S.W. 1149, 1916 Tenn. LEXIS 115 (1916). See § 66-1-109.

The widow could not be compelled to take her homestead or dower in land held by the entireties, because upon the death of the husband, the wife, as survivor, took the entire and absolute estate, and there was no estate left as that of the husband. McRoberts v. Copeland, 85 Tenn. 211, 2 S.W. 33, 1886 Tenn. LEXIS 31 (1886); Jackson v. Shelton, 89 Tenn. 82, 16 S.W. 142, 1890 Tenn. LEXIS 24, 12 L.R.A. 514 (1890); Chambers v. Chambers, 92 Tenn. 707, 23 S.W. 67, 1893 Tenn. LEXIS 27 (1893).

Where in a deed by husband and wife conveying his land, a reservation or exception of a life estate in favor of both is made, such reservation operates as a conveyance; and upon the husband's death, it inures to the sole benefit of the wife in her own right, as survivor, by operation of law. McRoberts v. Copeland, 85 Tenn. 211, 2 S.W. 33, 1886 Tenn. LEXIS 31 (1886).

Where a husband devises to his wife all of his estate, both real and personal, for life, and the only interest the testator had in any land was that in a tract of land held by him and his wife by the entirety, the surviving wife took the entire interest in the tract of land, and was not deprived of her estate therein, notwithstanding she took under the will, and accepted its provisions, for the doctrine of election is not applicable. Walker v. Bobbitt, 114 Tenn. 700, 88 S.W. 327, 1905 Tenn. LEXIS 38 (1905); Rowlett v. Rowlett, 116 Tenn. 458, 95 S.W. 821, 1906 Tenn. LEXIS 9 (1906).

Where land is held by husband and wife, as an estate by the entirety, the survivor, upon the death of the other, becomes vested of the entire estate by virtue of the deed conveying the land to them; and in such case the survivor does not inherit, acquire, or otherwise take any interest or estate in the lands from or through the deceased husband or wife, for the interest of the predeceased was terminated by his or her death. Beddingfield v. Estill & Newman, 118 Tenn. 39, 100 S.W. 108, 1906 Tenn. LEXIS 78 (1907).

The death of one tenant by the entirety effects a change in the properties of the legal person holding, and reduces the legal personage holding the estate to an individuality identical with the natural person, and the estate of the survivor is freed from participation by the other. Whitley v. Meador, 137 Tenn. 163, 192 S.W. 718, 1916 Tenn. LEXIS 64, L.R.A. (n.s.) 1917D736 (1917).

10. —Alienation.

No severance of an estate held by the entirety can be made by either husband or wife, and the alienation of the husband alone will not defeat the wife's title to the whole, if she survives him; neither can make an alienation of such estate to the prejudice of the other, without the concurrence of that other one by a proper deed. Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); McGhee v. Henry, 144 Tenn. 548, 234 S.W. 509, 1921 Tenn. LEXIS 55, 18 A.L.R. 103 (1921).

The purchase of the husband's interest not made in view of the contingency of the wife's divorce at some future period is not affected by an absolute divorce subsequently obtained by her for supervenient causes occurring after the marriage; but where the marriage is declared absolutely void from the beginning, the supposed husband and wife become tenants in common, and the supposed wife is entitled to her moiety of the land as against such purchaser. Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); Gillespie v. Worford, 42 Tenn. 632, 1865 Tenn. LEXIS 106 (1866); Aiken v. Suttle, 72 Tenn. 103, 1879 Tenn. LEXIS 11 (1879); Hopson v. Fowlkes, 92 Tenn. 697, 23 S.W. 55, 1893 Tenn. LEXIS 26, 36 Am. St. Rep. 120, 23 L.R.A. 805 (1893).

The purchaser of an estate held by the entirety, either from the husband or at execution sale, holds the estate independently of the husband and all his future creditors, and entirely free from all future accidents or contingencies that might, as against the husband, if the title had remained in him, have, directly or indirectly, affected the estate. Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); Gillespie v. Worford, 42 Tenn. 632, 1865 Tenn. LEXIS 106 (1866); Aiken v. Suttle, 72 Tenn. 103, 1879 Tenn. LEXIS 11 (1879).

Without the consent or the concurrence of the wife, the husband may convey the estate by entirety, either absolutely or as security for debt, or it may be levied upon and sold under execution for his debts but the conveyee of the husband, or purchaser at the execution sale, or a creditor redeeming from such purchaser, can acquire no other or greater interest than the contingent interest vested in the husband dependent upon his surviving his wife; and, consequently, such purchaser's rights are in subordination to the contingent right of the wife, who is entitled to the possession during the joint lives of herself and husband, and, in case she survives her husband, she becomes the absolute owner of the whole estate. Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974); Berrigan v. Fleming, 70 Tenn. 271, 1879 Tenn. LEXIS 174 (1879); Jackson v. Shelton, 89 Tenn. 82, 16 S.W. 142, 1890 Tenn. LEXIS 24, 12 L.R.A. 514 (1890).

Where husband and wife, by virtue of a stipulation in a deed of trust mortgaging their lands, held by them as tenants by the entirety, become tenants of the purchaser at the foreclosure sale, holding from month to month, at a stipulated rental, with the option in the purchaser to determine the tenancy upon giving a specified notice, such tenancy cannot be terminated as to the wife, and suit for her dispossession maintained, upon notice to the husband alone. Hamilton Bldg. & Loan Ass'n v. Patton, 105 Tenn. 407, 58 S.W. 482, 1900 Tenn. LEXIS 84 (1900).

An interest of a tenant by the entirety cannot be passed by will. White v. Watson, 571 S.W.2d 493, 1978 Tenn. App. LEXIS 301 (Tenn. Ct. App. 1978).

When personalty is jointly acquired by husband and wife without limitations or conditions attached to it, it becomes entirety property with a right of survivorship and does not pass under the will of one of the spouses. White v. Watson, 571 S.W.2d 493, 1978 Tenn. App. LEXIS 301 (Tenn. Ct. App. 1978).

11. —Feloniously Killing Spouse — Effect on Estate.

The husband does not, by feloniously causing the death of his wife, forfeit the estate vested in him as tenant by the entirety. Beddingfield v. Estill & Newman, 118 Tenn. 39, 100 S.W. 108, 1906 Tenn. LEXIS 78 (1907).

12. —Reformation of Deed to Create Estate by Entireties.

Where the wife, whose money was being used in part payment for a farm, willingly and freely consented and agreed that the land was to be conveyed to the husband and wife as tenants by the entirety, without undue advantage being taken of the wife by the husband, equity will not refuse to reform the deed conveying the land to the husband and wife jointly, so as to create an estate by the entirety. Alexander v. Shapard, 146 Tenn. 90, 240 S.W. 287, 1921 Tenn. LEXIS 7 (1921).

Collateral References.

Construction of devise to persons as joint tenants and expressly to the survivor of them, or to them “with the right of survivorship.” 69 A.L.R.2d 1058.

Estates by entirety in personal property. 64 A.L.R.2d 8, 22 A.L.R.4th 459.

66-1-108. Survivorship in partnership property.

Nothing in § 66-1-107 is intended to affect the right of a surviving partner to the joint property of the firm to settle the partnership business; such partner shall account with the heirs and personal representatives of the deceased partner for the surviving partner's share in the surplus.

Code 1858, § 2011 (deriv. Acts 1784 (Apr.), ch. 22, § 6); Shan., § 3678; mod. Code 1932, § 7605; T.C.A. (orig. ed.), § 64-108.

Cross-References. Revised Uniform Limited Partnership Act, death of partner, § 61-2-705.

Revised Uniform Partnership Act, events causing partner's dissociation, § 61-1-601.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 628.

NOTES TO DECISIONS

1. Effect of Section.

This section prevents § 66-1-107 from destroying the right of survivorship in the case of partners and the consequent introduction of all the mischiefs and confusion which the right of survivorship is calculated to avoid in cases of partnership. McAlister v. Montgomery, 4 Tenn. 93, 4 Tenn. 94, 1816 Tenn. LEXIS 28 (1816); Griffey v. Northcutt, 52 Tenn. 746, 1871 Tenn. LEXIS 307 (1871).

2. Rights of Heirs.

This statute saved to the heirs of deceased partners their respective shares of the value of the real estate vested in the surviving partners which should remain unexhausted in the payment of debts. McAlister v. Montgomery, 4 Tenn. 93, 4 Tenn. 94, 1816 Tenn. LEXIS 28 (1816); Yeatman v. Woods, 14 Tenn. 20, 1834 Tenn. LEXIS 45, 27 Am. Dec. 452 (1834); Griffey v. Northcutt, 52 Tenn. 746, 1871 Tenn. LEXIS 307 (1871); Griffy v. Northcut, 3 Shan. 625 (1875).

3. —Time of Attaching.

The right of the heirs of the deceased partner does not attach immediately upon his death, but only after the payment of the debts and settlement of the partnership, and then only to what remains of the partnership lands, or the proceeds thereof. McAlister v. Montgomery, 4 Tenn. 93, 4 Tenn. 94, 1816 Tenn. LEXIS 28 (1816); Griffey v. Northcutt, 52 Tenn. 746, 1871 Tenn. LEXIS 307 (1871); Solomon v. Fitzgerald & Co., 54 Tenn. 552, 1872 Tenn. LEXIS 82 (1872).

Under this section and § 20-1-107, the reconversion of partnership lands into realty in favor of the heir at law does not take place until the partnership is wound up and surplus ascertained. Logan v. Greenlaw, 25 F. 299, 1885 U.S. App. LEXIS 1769 (C.C.D. Tenn. 1885).

66-1-109. Estate by entireties created by direct conveyance.

Any married person owning property or any interest therein in such person's own name, desiring to convert such person's interest in such property into an estate by the entireties with such person's spouse, may do so by direct conveyance to such spouse by an instrument of conveyance which shall provide that it is the grantor's intention by such instrument to create an estate by the entireties in and to the entire interest in the property previously held by the grantor.

Acts 1949, ch. 255, § 1; mod. C. Supp. 1950, § 8461.1 (Williams, § 7605.1); T.C.A. (orig. ed.), § 64-109.

Cross-References. Power of married woman to convey, § 36-3-504.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 440.

Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-215, 8-216.

Law Reviews.

Tenancy by Entirety — Statute Validating Direct Conveyance by One Spouse to the Other, 21 Tenn. L. Rev. 339 (1950).

NOTES TO DECISIONS

1. Application of Section.

This section does not apply to determine whether a joint tenancy was orally or impliedly created in personal property by the joint efforts of a husband and wife since the section is designed only so that either husband or wife can create an estate by the entireties without a deed to a third party to be reconveyed. Oliphant v. McAmis, 197 Tenn. 367, 273 S.W.2d 151, 1954 Tenn. LEXIS 496 (1954).

2. Construction of Language.

Where it was unavoidably manifest by the granting clause of deed by clear and express terms that husband was conveying wife an estate by the entireties in entire tract of land referred to, such estate would not be negated or limited by later inept and incorrect references to one half divided interest in the property which the husband had obtained on the same day. Bible v. State, 222 Tenn. 361, 436 S.W.2d 112, 1968 Tenn. LEXIS 437 (1968).

3. Coverture — Disabilities of Married Women.

Since all vestiges of the common-law disability of coverture have been removed in Tennessee, each tenant in a tenancy by the entireties has a joint right to the use, control, incomes, rents, profits, usufructs and possession of property so held and neither may sell, encumber, alienate or dispose of any portion thereof, except his or her right of survivorship, without the consent of the other, and any unilateral attempt to do so will be wholly and utterly void at the behest of the aggrieved tenant, and any prospective purchaser, transferee, lessee or mortgagee acts at his peril. Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974).

The abolition in Tennessee of the common-law disability of coverture does not abolish the estate of tenancy by the entirety but does strip it of the common-law restrictions on and deprivation of the rights of married women. Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974).

4. Partition Deeds — Effect of Section on Ancient Rules.

Where partition deeds were executed prior to the effective date of T.C.A. § 66-1-109, plaintiff was entitled to rely on the ancient rule, changed by T.C.A. § 66-1-109, that partition deeds create no new title or changes in degree of title; however, the parties could not be viewed as coparceners under that rule since their interests in the land were acquired by contract and purchase rather than by descent. Fraker v. Fraker, 603 S.W.2d 135, 1980 Tenn. LEXIS 478 (Tenn. 1980).

The ancient rule that partition deeds create no new title or changes in degree of title is a remnant of feudalism, and little or no reason exists for its perpetuation beyond the effective date of this section insofar as the inclusion of spouses on partition deeds is concerned. Fraker v. Fraker, 603 S.W.2d 135, 1980 Tenn. LEXIS 478 (Tenn. 1980).

Collateral References.

Character and incidents of estate created by a deed to persons as husband and wife who are not legally married. 9 A.L.R.4th 1189.

Character of conveyance or conveyances necessary to create an estate by entirety. 132 A.L.R. 630, 173 A.L.R. 1216, 44 A.L.R.2d 595.

Conveyance of property of one spouse to himself or herself and other spouse. 44 A.L.R.2d 595.

Deed to persons mistakenly supposed to be husband and wife as creating tenancy by the entireties. 9 A.L.R.4th 1189.

Estate created by conveyance to husband and wife as affected by language used in deed. 161 A.L.R. 457.

Married Woman's Act as affecting creation of estates by entireties. 141 A.L.R. 179.

Statute declaring nature of tenancy under grant or devise to two or more persons as affecting estate by entireties. 32 A.L.R.3d 570.

66-1-110. Conveyance to spouse of interest in entirety.

Where property is held by husband and wife as tenants by the entirety, either spouse may by direct conveyance of such spouse's interest in the property vest the other spouse with title to the property in fee simple.

Acts 1955, ch. 78, § 1; T.C.A., § 64-110.

Cross-References. Tenancies by entirety, § 36-3-505.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 440.

Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-218, 8-219.

Law Reviews.

Survey of Tennessee Property Law, II. Estates in General (Toxey H. Sewell), 46 Tenn. L. Rev. 161 (1978).

NOTES TO DECISIONS

1. Effect of Occupancy.

A husband's conveyance to his wife under this section, in the absence of restrictions or limitations in the deed or private agreement or understanding, was not rendered less absolute by the fact that the husband continued to occupy the property with his wife as their home and, at his death, it formed no part of his estate. Union Planters Nat'l Bank v. United States, 361 F.2d 662, 1966 U.S. App. LEXIS 5837 (6th Cir. Tenn. 1966).

2. Creditors' Rights.

Where husband conveyed realty previously held by him and his wife as tenants by the entirety to wife in fee simple and husband subsequently died, wife took property free of claims of husband's creditors since wife either took fee simple under this section or if conveyance was void in fraud of husband's creditors the estate by the entirety continued in effect and wife took fee simple by operation of law when husband died. Covington v. Murray, 220 Tenn. 265, 416 S.W.2d 761, 1967 Tenn. LEXIS 407 (1967).

Collateral References.

Validity and effect of one spouse's conveyance to other spouse of interest in property held as estate by the entireties. 18 A.L.R.5th 230.

66-1-111. Doctrine of worthier title abolished.

  1. The doctrine of worthier title in both its inter vivos and testamentary branches, as it may apply to any kind of property, and regardless of whether it is applied as a rule of property or of construction, is abolished for all effects and purposes. This section shall not affect any right in property heretofore vested, and shall not affect the reversion of the grantor of any deed heretofore given. The doctrine of worthier title shall not operate to affect the disposition of property by the will of any person dying after July 1, 1983.
  2. The consent of the beneficiaries of any express trust whenever created who are described in the trust only as the heirs of the settlor or the heirs of the settlor's body shall not be required for the termination of such trust during the life of the settlor.

Acts 1983, ch. 242, § 1.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

66-1-112. Alienability of certain future interests for purpose of merger of interests in grantee — Applicability.

  1. A transfer of a possibility of reverter or right of entry by a holder other than the original grantor is invalid; provided, holders of a possibility of reverter or right of entry may freely transfer the interests to the holders of the corresponding fee simple determinable or fee simple subject to condition subsequent for the purpose of merger of the interests in any grantee.
  2. This section applies to future interests regardless of whether the interests were created before, on, or after July 1, 2015; provided, this section does not apply to any future interest, the validity of which has been determined by a final judgment in a judicial proceeding or by a settlement among interested persons prior to July 1, 2015.

Acts 2015, ch. 14, § 1.

Compiler's Notes For the Preamble to the act concerning legislative intent, please refer to Acts 2015, ch. 14.

Effective Dates. Acts 2015, ch. 14, § 2. March 19, 2015.

Part 2
Tennessee Uniform Statutory Rule Against Perpetuities

66-1-201. Short title.

This part shall be known and may be cited as the “Tennessee Uniform Statutory Rule Against Perpetuities.”

Acts 1994, ch. 654, § 1.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

Law Reviews.

Freeing Property Owners From the RAP Trap: Tennessee Adopts the Uniform Statutory Rule Against Perpetuities (Amy Morris Hess), 62 Tenn. L. Rev. 267 (1995).

Symposium: The Role of Federal Law in Private Wealth Transfer: Comment, Perpetuities and the Genius of a Free State, 67 Vand. L. Rev. 1823 (2014).

Collateral References.

Independent option to purchase real estate as violating rule against perpetuities or restraints on alienation, 66 A.L.R.3d 1294.

66-1-202. Validity of nonvested property interests and powers of appointment.

  1. A nonvested property interest is invalid unless one (1) of the following conditions is satisfied:
    1. When the interest is created, it is certain to vest or terminate no later than twenty-one (21) years after the death of an individual then alive;
    2. The interest either vests or terminates within ninety (90) years after its creation; or
    3. The interest satisfies the conditions set forth in subsection (f).
  2. A general power of appointment not presently exercisable because of a condition precedent is invalid unless one (1) of the following conditions is satisfied:
    1. When the power is created, the condition precedent is certain to be satisfied or becomes impossible to satisfy no later than twenty-one (21) years after the death of an individual then alive;
    2. The condition precedent either is satisfied or becomes impossible to satisfy within ninety (90) years after its creation; or
    3. The condition precedent satisfies the conditions set forth in subsection (f).
  3. A non-general power of appointment or a general testamentary power of appointment is invalid unless one (1) of the following conditions is satisfied:
    1. When the power is created, it is certain to be irrevocably exercised or otherwise to terminate no later than twenty-one (21) years after the death of an individual then alive; or
    2. The power is irrevocably exercised or otherwise terminates within ninety (90) years after its creation.
  4. In determining whether a nonvested property interest or a power of appointment is valid under subdivision (a)(1), (b)(1), or (c)(1), the possibility that a child will be born to an individual after the individual's death is disregarded.
  5. If, in measuring a period from the creation of a trust or other property arrangement, language in a governing instrument seeks to disallow the vesting or termination of any interest or trust beyond, seeks to postpone the vesting or termination of any interest or trust until, or seeks to operate in effect in any similar fashion upon, the later of:
    1. The expiration of a period of time not exceeding twenty-one (21) years after the death of the survivor of specified lives in being at the creation of the trust or other property arrangement; or
    2. The expiration of a period of time that exceeds or might exceed twenty-one (21) years after the death of the survivor of lives in being at the creation of the trust or other property arrangement;

      such language is inoperative to the extent it produces a period of time that exceeds twenty-one (21) years after the death of the survivor of the specified lives.

  6. As to any trust created after June 30, 2007, or that becomes irrevocable after June 30, 2007, the terms of the trust shall require that all beneficial interests in the trust vest or terminate or the power of appointment is exercised within three hundred sixty (360) years.

Acts 1994, ch. 654, § 2; 2007, ch. 144, §§ 14-16; 2010, ch. 725, § 20.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

66-1-203. Creation of nonvested property interest or power of appointment.

  1. Except as provided in subsections (b) and (c) of this section and in § 66-1-206(a), the time of creation of a nonvested property interest or a power of appointment is determined by other applicable statutes or, if none, under general principles of property law.
  2. For purposes of this part, if there is a person who alone can exercise a power created by a governing instrument to become the unqualified beneficial owner of:
    1. A nonvested property interest; or
    2. A property interest subject to a power of appointment described in §§ 66-1-202(b) or (c);

      the nonvested property interest or power of appointment is created when the power to become the unqualified beneficial owner terminates.

  3. For purposes of this part, a nonvested property interest or a power of appointment arising from a transfer of property to a previously funded trust or other existing property arrangement is created when the nonvested property interest or power of appointment in the original contribution was created.

Acts 1994, ch. 654, § 3.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

66-1-204. Judicial reformation of property disposition.

Upon the petition of an interested person, a court shall reform a disposition in the manner that most closely approximates the transferor's manifested plan of distribution and is within the ninety (90) years allowed by §§ 66-1-202(a)(2), (b)(2) or (c)(2) if any of the following conditions is satisfied:

  1. A nonvested property interest or a power of appointment becomes invalid under the statutory rule against perpetuities provided in § 66-1-202;
  2. A class gift is not but might become invalid under the statutory rule against perpetuities provided in § 66-1-202, and the time has arrived when the share of any class member is to take effect in possession or enjoyment; or
  3. A nonvested property interest that is not validated by § 66-1-202(a)(1) can vest but not within ninety (90) years after its creation.

Acts 1994, ch. 654, § 4.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

66-1-205. Exceptions to rule.

Section 66-1-202 does not apply to any of the following:

  1. A nonvested property interest or a power of appointment arising out of a nondonative transfer, except a nonvested property interest or a power of appointment arising out of:
    1. A premarital or postmarital agreement;
    2. A separation or divorce settlement;
    3. A spouse's election;
    4. A similar arrangement arising out of a prospective, existing, or previous marital relationship between the parties;
    5. A contract to make or not to revoke a will or trust;
    6. A contract to exercise or not to exercise a power of appointment;
    7. A transfer in satisfaction of a duty of support; or
    8. A reciprocal transfer;
  2. A fiduciary's power relating to the administration or management of assets, including the power of a fiduciary to sell, lease, or mortgage property, and the power of a fiduciary to determine principal and income;
  3. A power to appoint a fiduciary;
  4. A discretionary power of a trustee to distribute principal before termination of a trust to a beneficiary having an indefeasibly vested interest in the income and principal;
  5. A nonvested property interest held by a charity, government, or governmental agency or subdivision, if the nonvested property interest is preceded by an interest held by another charity, government, or governmental agency or subdivision;
  6. A nonvested property interest in or a power of appointment with respect to a trust or other property arrangement forming part of a pension, profit-sharing, stock bonus, health, disability, death benefit, income deferral, or other current or deferred benefit plan for one (1) or more employees, independent contractors, or their beneficiaries or spouses, to which contributions are made for the purpose of distributing to or for the benefit of the participants or their beneficiaries or spouses the property, income, or principal in the trust or other property arrangement, except a nonvested property interest or a power of appointment that is created by an election of a participant or a beneficiary or spouse; or
  7. A property interest, power of appointment, or arrangement that was not subject to the common law rule against perpetuities or is excluded by another statute of this state.

Acts 1994, ch. 654, § 5.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

66-1-206. Application — Retroactivity.

  1. Except as provided in subsection (b), this part applies to nonvested property interests and unexercised powers of appointment regardless of whether they were created before, on, or after July 1, 1994. A property interest shall not be deemed vested merely because it would vest if the common law rule against perpetuities were violated.
  2. This part does not apply to any property interest or power of appointment the validity of which has been determined by a final judgment in a judicial proceeding or by a settlement among interested persons prior to July 1, 1994.

Acts 1994, ch. 654, § 6.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

66-1-207. Preemption of common law.

This part supersedes the common law rule against perpetuities in this state.

Acts 1994, ch. 654, § 7.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

66-1-208. Application and construction.

This part shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this part among the states enacting it.

Acts 1994, ch. 654, § 8.

Cross-References. Construction of “dying without heirs”, § 66-1-104.

Chapter 2
Power to Own and Convey Property

Part 1
Aliens

66-2-101. Alien ownership.

An alien, resident or nonresident of the United States, may take and hold property, real or personal, in this state and dispose of or transmit the same as a native citizen.

Acts 1875, ch. 2, §§ 1, 2; Shan., § 3659; mod. Code 1932, § 7187; T.C.A. (orig. ed.), § 64-201.

Cross-References. Statute of frauds, § 29-2-101.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 92, 95.

Tennessee Jurisprudence, 1 Tenn. Juris., Aliens, §§ 4, 5; 6 Tenn. Juris., Charities, § 21.

NOTES TO DECISIONS

1. Basis of Right of Inheritance by Alien.

An alien has no inheritable blood, under the common law, and, if he take at all, he must do so under statutes of the state where the property is, or by the provisions of treaties. Baker v. Shy, 56 Tenn. 85, 1871 Tenn. LEXIS 429 (1871); Ehrlich v. Weber, 114 Tenn. 711, 88 S.W. 188, 1905 Tenn. LEXIS 39 (1905).

2. Right of State to Declare Alien Capable of Inheriting or Taking Property.

In the absence of a treaty, the right of a state to declare an alien capable of inheriting or taking property and holding the same within its borders is not precluded by U.S. Const., art 1, § 10, declaring that “no state shall enter into any treaty, alliance, or confederation.” Blythe v. Hinckley, 180 U.S. 333, 21 S. Ct. 390, 45 L. Ed. 557, 1901 U.S. LEXIS 1309 (1901).

3. Treaties — Priority over Statutes.

In case of a conflict between the statutes of a state and the terms of a treaty made under the authority of the United States, the treaty must prevail, because, by U.S. Const., art. 6, such treaties are declared to “be the supreme law of the land” binding upon the judges in every state, notwithstanding the Constitution or laws of the state may be to the contrary. Baker v. Shy, 56 Tenn. 85, 1871 Tenn. LEXIS 429 (1871); Ehrlich v. Weber, 114 Tenn. 711, 88 S.W. 188, 1905 Tenn. LEXIS 39 (1905); Couch v. State, 140 Tenn. 156, 203 S.W. 831, 1918 Tenn. LEXIS 31 (1918).

Every treaty concerning the right of ownership or inheritance of property made by the authority of the United States is superior to the Constitution and laws of any individual state, and if the law of a state is contrary to a treaty, it is void. Hauenstein v. Lynham, 100 U.S. 483, 25 L. Ed. 628, 1879 U.S. LEXIS 1841 (Tenn. 1879).

4. Citizens — Who Constitute.

Children born of alien parents in this country and under its jurisdiction become at once, by virtue of such birth, citizens of the United States. Ehrlich v. Weber, 114 Tenn. 711, 88 S.W. 188, 1905 Tenn. LEXIS 39 (1905).

5. Alienage — Presumed Continuance.

The status of alienage of a foreigner is presumed to continue, in the absence of proof that he has denationalized himself or ceased to be a citizen of his native country, and the mere fact of long residence in this country is not sufficient to overcome this presumption. Ehrlich v. Weber, 114 Tenn. 711, 88 S.W. 188, 1905 Tenn. LEXIS 39 (1905).

6. Claim under Treaty — Pleadings.

Where a complainant based his claim upon the provisions of a treaty made under the authority of the United States, it is not necessary to make a formal claim of his rights under the treaty, since “the constitution, laws and treaties of the United States are as much a part of the laws of every state as its own local laws and constitution.” Ehrlich v. Weber, 114 Tenn. 711, 88 S.W. 188, 1905 Tenn. LEXIS 39 (1905).

Collateral References.

Conveyance of “right of way,” in connection with conveyance of another tract, as passing fee or easement. 89 A.L.R.3d 767.

Right of life tenant with power to anticipate or consume principal to dispose of it by inter vivos gift. 83 A.L.R.3d 135.

Treaty regulations, disabilities, and property rights of aliens as proper subjects of. 4 A.L.R. 1391, 134 A.L.R. 882.

66-2-102. Heirs or devisees of alien.

The heir or heirs, devisee or devisees, of such an alien may take any lands, so held by descent or otherwise, as if a citizen or citizens of the United States.

Acts 1875, ch. 2, § 3; Shan., § 3660; mod. Code 1932, § 7188; T.C.A. (orig. ed.), § 64-202.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 92, 95.

Tennessee Jurisprudence, 1 Tenn. Juris., Aliens, § 4.

Collateral References.

Dower of alien widow in estate of deceased husband. 110 A.L.R. 520.

Escheat for alienage of owner, or kindred of owner, who dies intestate. 23 A.L.R. 1237.

Right of alien enemy to take by inheritance or will. 137 A.L.R. 1328, 147 A.L.R. 1297, 150 A.L.R. 1418, 152 A.L.R. 1450.

State statute making right of alien to succeed to property of deceased person dependent upon a reciprocal right in United States citizens, construction and application. 170 A.L.R. 966.

Part 2
Religious Entities

66-2-201. Ownership of land.

Any religious denomination, religious society, or church, whether incorporated or not, may take, by deed or otherwise, and hold any amount of acreage at one (1) place for purposes of public worship, or for a parsonage, or for a burial ground.

Code 1858, § 1508 (deriv. Acts 1843-1844, ch. 110); Acts 1889, ch. 11, § 1; Shan., § 2562; mod. Code 1932, § 4407; Acts 1957, ch. 206, § 1; T.C.A. (orig. ed.), § 64-203.

Cross-References. Cemeteries owned by religious societies, exemption from certain regulations, § 46-1-106.

Not for profit religious corporations, title 48, ch. 67.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 185.

Tennessee Jurisprudence, 5 Tenn. Juris., Cemeteries, § 3; 6 Tenn. Juris., Charities, § 2, 21; 21 Tenn. Juris., Religious Societies, §§ 2, 7.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

NOTES TO DECISIONS

1. Application and Effect of Statute.

This part confers a legal existence and entity upon unincorporated religious associations making them quasi corporations with limited capacity and powers. Sales v. Southern Trust Co., 182 Tenn. 270, 185 S.W.2d 623, 1945 Tenn. LEXIS 217, 1945 Tenn. LEXIS 218 (1945).

This section has no reference to land devised to trustees for the use and benefit of religious denominations. Buchanan v. Willis, 195 Tenn. 18, 255 S.W.2d 8, 1953 Tenn. LEXIS 295 (1953).

2. Power and Authority of Religious Entities.

The trustees of a church are empowered by this section to take a gift of money to be used for the erection of a church house or parsonage on the land that they are authorized to hold, and to take money for the equipment and repair of these edifices. Sales v. Southern Trust Co., 182 Tenn. 270, 185 S.W.2d 623, 1945 Tenn. LEXIS 217, 1945 Tenn. LEXIS 218 (1945).

Authority to erect and hold edifices and use them for the purpose indicated granted by this section carries with it by implication the power to equip the building and keep it in repair. Sales v. Southern Trust Co., 182 Tenn. 270, 185 S.W.2d 623, 1945 Tenn. LEXIS 217, 1945 Tenn. LEXIS 218 (1945).

Unincorporated Catholic church could receive bequest under will, and the bishop of the diocese was a proper person under church organization to receive and apply bequest to benefit of church to which given. Nashville Trust Co. v. Johnson, 34 Tenn. App. 197, 236 S.W.2d 100, 1950 Tenn. App. LEXIS 141 (Tenn. Ct. App. 1950).

3. Collateral Attack on Power to Take and Hold Property.

The power of a charitable institution to take and hold property cannot be collaterally attacked in Tennessee except by the state. Sunday School Union, A. M. E. C. v. Walden, 121 F.2d 719, 1941 U.S. App. LEXIS 3307 (6th Cir. Tenn. 1941).

4. Statement of Purposes of Trust.

An unincorporated religious body may be the beneficiary of a trust when a definite trustee is provided and where the objects and purposes of the trust are defined in the instrument creating it. Sunday School Union, A. M. E. C. v. Walden, 121 F.2d 719, 1941 U.S. App. LEXIS 3307 (6th Cir. Tenn. 1941).

A conveyance of property to a trustee for the use and benefit of a church was not void for uncertainty in the purposes of the trust because it did not delineate the purposes for which the church would use the property. Hill v. Hill, 34 Tenn. App. 617, 241 S.W.2d 865, 1951 Tenn. App. LEXIS 106 (1951).

5. Bequests — Validity.

A bequest of personalty to a church as a voluntary unincorporated religious association, without a trustee, is invalid. A direction to the executors to pay the money over to such legatee does not constitute them the trustees of the fund, but the legatee is constituted the trustee thereof, and where the legatee is incapable of taking, the bequest is invalid. The subsequent appointment, by legislative act, of trustees to take and administer the fund, is ineffective, because such act is unconstitutional insofar as it affects such bequest. Green v. Allen, 24 Tenn. 170, 1844 Tenn. LEXIS 52 (1844); White v. Hale, 42 Tenn. 77, 1865 Tenn. LEXIS 20 (1865); Frierson v. General Assembly of Presbyterian Church, 54 Tenn. 683, 1872 Tenn. LEXIS 106 (1872); Daniel v. Fain, 73 Tenn. 319, 1880 Tenn. LEXIS 130 (1880); Reeves v. Reeves, 73 Tenn. 644, 1880 Tenn. LEXIS 195 (1880); Rhodes v. Rhodes, 88 Tenn. 637, 13 S.W. 590, 1890 Tenn. LEXIS 1 (1890).

A voluntary, unincorporated religious association is not empowered to hold under bequest of government bonds. Rhodes v. Rhodes, 88 Tenn. 637, 13 S.W. 590, 1890 Tenn. LEXIS 1 (1890).

6. Devises — Validity.

A devise of land to a church as a voluntary unincorporated religious denomination or association, for any purpose, beyond the limited quantity (now unlimited) for purposes of public worship or a parsonage, without a trustee named in the will, was not valid, and was nonenforceable, though the will empowered the church association to appoint a trustee or agent, which was subsequently done. White v. Hale, 42 Tenn. 77, 1865 Tenn. LEXIS 20 (1865); Daniel v. Fain, 73 Tenn. 319, 1880 Tenn. LEXIS 130 (1880); Reeves v. Reeves, 73 Tenn. 644, 1880 Tenn. LEXIS 195 (1880).

A devise to a church, a voluntary unincorporated religious denomination or society, of a lot not exceeding the specified quantity (now unlimited) upon which to build a church house was valid as the church is a quasi corporation with power to take such property. Reeves v. Reeves, 73 Tenn. 644, 1880 Tenn. LEXIS 195 (1880); Heiskell v. Chickasaw Lodge, 87 Tenn. 668, 11 S.W. 825, 1889 Tenn. LEXIS 17, 4 L.R.A. 699 (1889); Nance v. Busby, 91 Tenn. 303, 18 S.W. 874, 1891 Tenn. LEXIS 102, 15 L.R.A. 801 (1891).

7. Disputes as to Ownership.

Traditionally, Tennessee courts have not interfered with the internal administration of religious societies. Courts have jurisdiction to adjudge ecclesiastical matters only as a mere incidence to the determination of some property right. Church of God in Christ, Inc. v. Middle City Church of God in Christ, 774 S.W.2d 950, 1989 Tenn. App. LEXIS 247 (Tenn. Ct. App. 1989).

Judicial determination of property rights is inappropriate where local church has not withdrawn from governing ecclesiastical body and there are no genuine property disputes. Church of God in Christ, Inc. v. Middle City Church of God in Christ, 774 S.W.2d 950, 1989 Tenn. App. LEXIS 247 (Tenn. Ct. App. 1989).

Collateral References.

Association of religious societies with society of another denomination for purpose of worship as affecting property rights. 59 A.L.R. 619.

Consolidation or merger of churches of same denomination as affecting property rights. 66 A.L.R. 177.

Deed for church purposes as conveying fee or easement. 136 A.L.R. 410.

Mineral rights in land as affected by conveyance specifying that land is to be used for religious purposes. 5 A.L.R. 1502, 39 A.L.R. 1340.

66-2-202. Title in trustees.

All lands bought or otherwise acquired by any religious denomination or society shall be vested in a board of trustees or other persons designated by the members of such denomination or society, for the use and benefit of the denomination or society.

Code 1858, § 1509 (deriv. Acts 1855-1856, ch. 79, § 1); Shan., § 2563; Code 1932, § 4408; T.C.A. (orig. ed.), § 64-204.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-210.

Tennessee Jurisprudence, 21 Tenn. Juris., Religious Societies, §§ 5, 7.

NOTES TO DECISIONS

1. Trustees — Necessity.

A bequest or devise to two trustees to be appointed by synod, a voluntary and unincorporated religious association, to be used in educating young ministers of the Presbyterian church, is invalid for want of trustees. Ewell v. Sneed, 136 Tenn. 602, 191 S.W. 131, 1917 Tenn. LEXIS 181, 5 A.L.R. 303 (1916).

2. Gift to Trustees — Effect.

A bequest to a particular church is, under this section, vested in trustees and the gift to the trustees of the church is nothing more than a gift to the church. Sales v. Southern Trust Co., 182 Tenn. 270, 185 S.W.2d 623, 1945 Tenn. LEXIS 217, 1945 Tenn. LEXIS 218 (1945).

3. Executors as Trustees.

The executors may be appointed and act as trustees of a charitable or other trust, and the duties imposed may constitute them trustees, though not expressly so named. Gass v. Ross, 35 Tenn. 211, 1855 Tenn. LEXIS 42 (1855); Cobb v. Denton, 65 Tenn. 235, 1873 Tenn. LEXIS 340 (1873); Rhodes v. Rhodes, 88 Tenn. 637, 13 S.W. 590, 1890 Tenn. LEXIS 1 (1890); Johnson v. Johnson, 92 Tenn. 559, 23 S.W. 114, 1893 Tenn. LEXIS 13, 22 L.R.A. 179 (1893).

4. Grantor Conveying to Himself as Trustee.

A creditor who sought to subject to payment of a debt land purchased by debtor and conveyed by such debtor to himself as trustee for a church had no right to question the fact that the trustee was not selected by the membership as provided by this section. Hill v. Hill, 34 Tenn. App. 617, 241 S.W.2d 865, 1951 Tenn. App. LEXIS 106 (1951).

5. Ex-Members of Church — Status.

After a member has voluntarily withdrawn or has been expelled from the church, he ceases to have any right or interest in the church property. Persons who have been expelled or who have withdrawn from church membership are not of the same class with actual members. Nance v. Busby, 91 Tenn. 303, 18 S.W. 874, 1891 Tenn. LEXIS 102, 15 L.R.A. 801 (1891); Rodgers v. Burnett, 108 Tenn. 173, 65 S.W. 408, 1901 Tenn. LEXIS 19 (1901).

6. Invalid Union of Churches — Effect on Status of Members.

Members adhering to the doctrinal standards of their church are entitled to the church property as against members joining another church under an attempted void union of the two churches. Bonham v. Harris, 125 Tenn. 452, 145 S.W. 169, 1911 Tenn. LEXIS 40 (Tenn. Dec. 1911).

Where an attempted union of one religious society with another is invalid because of congregational division, those adhering to the original faith are entitled to the possession of the society's property. Rudolph v. Foust, 147 Tenn. 369, 247 S.W. 987, 1922 Tenn. LEXIS 49 (1922).

7. Diversion of Trust.

Where land is conveyed to the officers of the Cumberland Presbyterian Church at Fayetteville, and their successors in office for the use and benefit of the church, the conveyance creates a trust in favor of the church, that is, the members of that church and their successors composing the congregation of that church; and such land cannot, without a breach of contract, be diverted to the maintenance of a different faith unless the Cumberland Presbyterian faith has been changed into a new form by competent ecclesiastical authority. Landrith v. Hudgins, 121 Tenn. 556, 120 S.W. 783, 1908 Tenn. LEXIS 33 (1907).

8. Suits Involving Church Lands — Members as Jurors.

Church members are so interested that they are incompetent to act as jurors in litigation involving church land held by trustees, though the action be prosecuted in the name of the trustees. Cleage v. Hyden, 53 Tenn. 73, 1871 Tenn. LEXIS 319 (1871).

66-2-203. Conveyance by church officers.

In all cases where any elders, trustees, or other church officers, in any of the churches or organizations of any religious denomination, shall have any lands conveyed to them for the use of their respective churches or congregations as building sites, or for any other purpose, by deed, grant, devise, or in any other manner, they or their successors in office, according to the regulations of such church or congregation, may sell and convey the same by deed, which deed, when officially signed by such elders, trustees, or other church officers, or their successors in office, shall pass the title, whether for life, for years, or in fee, to such land to the purchaser in as full and ample a manner as if the officers held the same as a corporation, and had conveyed it by deed under the corporate name.

Acts 1883, ch. 37, § 1; Shan., § 2564; Code 1932, § 4409; T.C.A. (orig. ed.), § 64-205.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 185.

Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-210.

Tennessee Jurisprudence, 5 Tenn. Juris., Cemeteries, § 3; 6 Tenn. Juris., Charities, § 10; 21 Tenn. Juris., Religious Societies, §§ 2, 5, 7.

NOTES TO DECISIONS

1. Implied Powers of Trustees.

Since among the powers implied are preservation and improvement of realty, the trustees may execute notes for money with which to erect a church building, bind the property for its payment, incur debts for repairs and improvement, no regulation of the body to contrary appearing, and sue and be sued. Wilson v. Clinton Chapel African Methodist Episcopal Zion Church, 138 Tenn. 398, 198 S.W. 244, 1917 Tenn. LEXIS 48 (1917).

Collateral References.

Conveyance or encumbrance by unincorporated religious society otherwise than through trustee. 172 A.L.R. 1049.

Personal liability of members of committee or board who make a contract in name of unincorporated religious society incapable of contracting. 61 A.L.R. 241.

Chapter 3
Fraudulent Conveyances and Devises

Part 1
Conveyances

66-3-101. Conveyances in fraud of creditors or purchasers void.

Every gift, grant, conveyance of lands, tenements, hereditaments, goods, or chattels, or of any rent, common or profit out of the same, by writing or otherwise; and every bond, suit, judgment, or execution, had or made and contrived, of malice, fraud, covin, collusion, or guile, to the intent or purpose to delay, hinder, or defraud creditors of their just and lawful actions, suits, debts, accounts, damages, penalties, forfeitures; or to defraud or to deceive those who shall purchase the same lands, tenements, or hereditaments, or any rent, profit, or commodity out of them, shall be deemed and taken, only as against the person, such person's heirs, successors, executors, administrators, and assigns, whose debts, suits, demands, estates, or interest, by such guileful and covinous practices, shall or might be in any wise disturbed, hindered, delayed, or defrauded, to be clearly and utterly void; any pretense, color, feigned consideration, expressing of use, of any other matter or thing, to the contrary notwithstanding.

Code 1858, § 1759 (deriv. Acts 1801, ch. 25, § 2); Shan., § 3143; Code 1932, § 7832; T.C.A. (orig. ed.), § 64-301.

Cross-References. Conveyance to defeat distributive or elective share voidable, § 31-1-105.

Creditor's bill to set conveyance aside, title 29, ch. 12.

Remedies for fraud under Uniform Commercial Code, § 47-2-721.

Statute of frauds, § 29-2-101.

Transfer of title obtained by fraud under Uniform Commercial Code, § 47-2-403.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 447.

Tennessee Jurisprudence, 3 Tenn. Juris., Attachment and Garnishment, § 14; 13 Tenn. Juris., Fraudulent and Voluntary Conveyances, §§ 1-5, 9, 14; 17 Tenn. Juris., Libel and Slander, § 3.

Law Reviews.

Fraud Imputation Under Section 523(a)(2)(A): Is a Partner Always Liable for Wrongdoing by the Partnership? (Bernice B. Donald), 24 Mem. St. U.L. Rev. 651 (1994).

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).

The Conundrum of Directors' Duties in Nearly Insolvent Corporations (Mike Roberts), 23 Mem. St. U.L. Rev. 273 (1993).

NOTES TO DECISIONS

1. Construction.

Statutes made to suppress fraud are to be liberally expounded. Wilson v. Beadle, 39 Tenn. 510, 1859 Tenn. LEXIS 263 (1859); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873); Parker v. Savage, 74 Tenn. 406, 1880 Tenn. LEXIS 267 (1880).

2. History and Scope.

By construction, the statute embraces voluntary gifts and conveyances of lands, goods, and chattels, made by insolvent debtors, though without intentional fraud; but it does not embrace the absolute gifts of money, corporate stocks, and choses in action, made without any secret trust or intentional fraud, for the reason that, under this statute, there was no jurisdiction in chancery to subject a debtor's money, corporate stocks, choses in action, and the like, to the satisfaction of judgments against him, whether in his own hands, or in the hands of a voluntary donee, however, this jurisdiction was conferred in title 26, ch. 4 and title 29, ch. 12. Erwin v. Oldham, 14 Tenn. 185, 1834 Tenn. LEXIS 61, 27 Am. Dec. 458 (1834); Ewing v. Cantrell, 19 Tenn. 364, 1838 Tenn. LEXIS 64 (1838); Nichol v. Levy, 72 U.S. 433, 18 L. Ed. 596, 1866 U.S. LEXIS 949 (1867); White v. Bettis, 56 Tenn. 645, 1872 Tenn. LEXIS 184 (1872); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873); Creswell v. Smith, 2 Cooper's Tenn. Ch. 416 (1875); Hooberry v. Harding, 3 Cooper's Tenn. Ch. 677 (1878); McKeldin v. Gouldy, 91 Tenn. 677, 20 S.W. 231, 1892 Tenn. LEXIS 35 (1892); Bryan v. Zarecor, 112 Tenn. 503, 81 S.W. 1252, 1903 Tenn. LEXIS 118 (1904).

The first part of this section embraces the essential provisions of the English statute contained in 13th Elizabeth, ch. 5, § 2, and protects creditors against fraudulent conveyances and dispositions of land, chattels, and every species of claims and choses in action; and the second part embraces the essential provisions of 27th Elizabeth, ch. 4, § 2, and protects purchasers against the fraudulent conveyances of lands only. Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896); State v. Nashville Trust Co., 28 Tenn. App. 388, 190 S.W.2d 785, 1944 Tenn. App. LEXIS 79 (Tenn. Ct. App. 1944).

The principle of our cases makes no distinction between voluntary conveyances of realty and personalty. Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Ramsey v. Quillen, 73 Tenn. 184, 1880 Tenn. LEXIS 109 (1880); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

The current version of T.C.A. § 66-3-101 first appeared in 1858. In 1919 the Tennessee legislature enacted a uniform fraudulent conveyance law, which supplements but does not replace its older relative. Gigandet v. Covington, 171 B.R. 294, 1994 Bankr. LEXIS 1296 (Bankr. M.D. Tenn. 1994).

3. Purpose and Effect.

A conveyance of land to defraud, hinder, and delay creditors is void as to creditors and bona fide purchasers, without notice. Hubbs v. Brockwell, 35 Tenn. 574, 1856 Tenn. LEXIS 100 (1856).

The law sanctions and commands diligence and vigilance on the part of creditors, in securing their just demands; but in the race amongst them for priority, it forbids all resorts to covinous, guileful, or fraudulent devices and this section was intended to secure entire fairness amongst creditors in their efforts to secure their debts. Hickerson v. Blanton & Co., 49 Tenn. 160, 1870 Tenn. LEXIS 207 (1870).

The widow was not a creditor under T.C.A. § 66-3-101 so as to have standing for an action to have husband's transfer of property declared fraudulent with intent to defeat wife's distributive share of his estate. McClure v. Stegall, 729 S.W.2d 263, 1987 Tenn. App. LEXIS 2538 (Tenn. Ct. App. 1987).

Beneficiary was not entitled to relief under the fraudulent conveyances and devices statutory scheme set forth in T.C.A. § 66-3-101 et seq. as the rights and remedies afforded under T.C.A. § 66-3-101 et seq. were expressly reserved for creditors or purchasers; the beneficiary was neither a creditor nor purchaser, and thus did not have standing to assert a claim that the decedent's conveyances were fraudulent conveyances under T.C.A. § 66-3-101 et seq.Perkins v. Brunger, 303 S.W.3d 688, 2009 Tenn. App. LEXIS 373 (Tenn. Ct. App. June 10, 2009).

4. Nature of Section.

This is not a statute of limitation. O'Brien v. Waggoner, 20 Tenn. App. 145, 96 S.W.2d 170, 1936 Tenn. App. LEXIS 11 (Tenn. Ct. App. 1936).

5. Effect of Uniform Law.

The uniform law relating to fraudulent conveyances as set out in part 3 of this chapter did not repeal this section but merely enlarged thereon. Scarborough v. Pickens, 26 Tenn. App. 213, 170 S.W.2d 585, 1942 Tenn. App. LEXIS 34 (1942).

6. Jurisdiction.

Chancery courts have jurisdiction to set aside fraudulent conveyances, and to subject property to demands of creditors. Anderson v. Stribling, 160 Tenn. 453, 26 S.W.2d 131, 1929 Tenn. LEXIS 121 (1930).

Suit by Kentucky receiver to recover personal property allegedly transferred to defendant corporations in satisfaction of open account covering purchase of property which was based on contention that transfer was contrary to Kentucky statutes as preferential conveyance in contemplation of insolvency could not be maintained as a matter of courtesy or comity since it was inimical to the interests of defendants as Tennessee creditors and contrary to Tennessee public policy and statutes permitting good faith transfers to secure antecedent debts. De Laney Furniture Co. v. Magnavox Co. of Tennessee, 222 Tenn. 329, 435 S.W.2d 828, 1968 Tenn. LEXIS 511 (1968), overruled in part, Davenport v. State Farm Mut. Auto. Ins. Co., 756 S.W.2d 678, 1988 Tenn. LEXIS 160 (Tenn. 1988).

7. Laches.

Where a speculator in the commodities market transferred real and personal property to his wife and subsequently became bankrupt, it not having been shown that he was insolvent at the time of such transfers, and his creditors did not challenge such transfers until 13 years later when they contended the transfers were fraudulent under this section and former §§ 66-3-306 and 66-3-307, in view of the speculative nature of the transferor's business, the court held it unnecessary to decide this contention on the merits, since the claim was barred either by the equitable doctrine of laches or by the limitation of actions provisions of §§ 28-2-103, 28-3-109 and 28-3-110. Louis Dreyfus Corp. v. Butler, 496 F.2d 806, 1974 U.S. App. LEXIS 8973 (6th Cir. Tenn. 1974).

8. Fraudulent Conveyances Generally.

A bill of sale of goods made to defraud any existing creditors is void as to all existing and subsequent creditors. Greenlee v. Hays' Adm'r, 1 Tenn. 300, 1808 Tenn. LEXIS 23 (1808); Young v. Pate, 12 Tenn. 164, 1833 Tenn. LEXIS 35 (1833).

Every conveyance without a fair consideration is fraudulent if the conveyor is thereby rendered insolvent, or if he is engaged or about to engage in a business or transaction for which his remaining property is an unreasonably small capital, or if he intends or believes that he will incur debts beyond his ability to pay; the second situation making the conveyance fraudulent as to creditors and as to persons who become creditors during the continuance of such business transaction, and the third as to both present and future creditors. State v. Nashville Trust Co., 28 Tenn. App. 388, 190 S.W.2d 785, 1944 Tenn. App. LEXIS 79 (Tenn. Ct. App. 1944).

Transfers are fraudulent if they either are without fair consideration and leave the grantor insolvent or are made with actual intent to hinder, delay or defraud creditors. In re Shelton, 33 B.R. 377, 1983 U.S. Dist. LEXIS 15699 (M.D. Tenn. 1983); Macon Bank & Trust Co. v. Holland, 715 S.W.2d 347, 1986 Tenn. App. LEXIS 2968 (Tenn. Ct. App. 1986); United Nat'l Real Estate v. Thompson, 941 S.W.2d 58, 1996 Tenn. App. LEXIS 634 (Tenn. Ct. App. 1996).

In accord with Macon Bank & Trust Co. v. Holland. See United Nat'l Real Estate v. Thompson, 941 S.W.2d 58, 1996 Tenn. App. LEXIS 634 (Tenn. Ct. App. 1996).

Whether or not a particular transfer is declared fraudulent is determined by the facts and circumstances of each case. Stevenson v. Hicks, 176 B.R. 466, 1995 Bankr. LEXIS 336 (Bankr. W.D. Tenn. 1995).

The person who acquires property by fraud merely obtains title or a possessory interest in the property, and is said to hold this property in trust for its rightful owner. Such a trust is referred to as a “constructive trust” because it is “constructed” by a court of equity “to satisfy the demands of justice” and to prevent unjust enrichment. Stevenson v. Hicks, 176 B.R. 466, 1995 Bankr. LEXIS 336 (Bankr. W.D. Tenn. 1995).

The record contained clear and convincing evidence that the brother-in-law was a party, along with the deceased, to a conveyance to the brother-in-law undertaken for the sole purpose of enabling the deceased and the widow to qualify for governmental assistance to which they would not otherwise have been entitled; because of the fraudulent character of the conveyance and the brother-in-laws' role in it, the brother-in-law was not entitled to gain personally from the transfer of funds by being permitted to retain the money, and the trial court did not err by setting aside the transaction and ordering the brother-in-law to return the unspent remainder of the certificate of deposit. In re Conservatorship Groves, 109 S.W.3d 317, 2003 Tenn. App. LEXIS 112 (Tenn. Ct. App. 2003).

Defendants' claim of fraudulent conveyance, presumably made under T.C.A. § 66-3-101, fell short of the specific pleading requirements of Fed. R. Civ. P. 9; defendants' counterclaim and third party complaint failed to allege the time, place, and amount of the conveyance, or the injury defendants suffered. Eastwood v. United States, — F. Supp. 2d —, 100 A.F.T.R.2d (RIA) 6161, 2007 U.S. Dist. LEXIS 71892 (E.D. Tenn. Sept. 25, 2007).

Where a Chapter 7 debtor transferred real property to her husband and herself as tenants by the entirety, claiming that she transferred the property, because she thought he would be less worried about obtaining a large loan for her benefit if he had an ownership interest in the real property securing the debt, neither the trustee nor the husband were entitled to summary judgment in the trustee's fraudulent transfer claim under T.C.A. § 66-3-101 and T.C.A. § 66-3-305(a)(1), because there was a genuine issue of material fact as to whether the debtor's intent was fraudulent. Farinash v. Silvey (in re Silvey), 378 B.R. 186, 2007 Bankr. LEXIS 4345 (Bankr. E.D. Tenn. Oct. 10, 2007).

Proposed settlement between debtor's estate and debtor's spouse was not approved because Trustee failed to meet his burden to show that proposed settlement would likely benefit estate more than probability and costs of success in fraudulent conveyance litigation or collection of judgment against spouse. In re Stanfill, — B.R. —, 2016 Bankr. LEXIS 2535 (Bankr. E.D. Tenn. July 8, 2016).

9. —Standard of Proof.

Actual intent to defraud must be shown by a preponderance of the evidence. Stevenson v. Hicks, 176 B.R. 466, 1995 Bankr. LEXIS 336 (Bankr. W.D. Tenn. 1995).

10. —Nature of Fraud Required to Warrant Relief.

Fraud, to be relieved against, must be operative and injurious to the party seeking relief, for fraud without damage, or damage without fraud, gives no cause of action. Cunningham v. Shields, 5 Tenn. 43, 5 Tenn. 44, 1817 Tenn. LEXIS 41 (1817); Union Bank v. Osborne, 23 Tenn. 413, 1843 Tenn. LEXIS 130 (1843); Cunningham v. Edgefield & K.R.R., 39 Tenn. 23, 1858 Tenn. LEXIS 245 (Tenn. Dec. 1858); Whitson v. Gray, 40 Tenn. 441, 1859 Tenn. LEXIS 124 (1859); Waterbury v. Netherland, 53 Tenn. 512, 1871 Tenn. LEXIS 389 (1871); Flippin v. Knaffle, 2 Cooper's Tenn. Ch. 238 (1875); Nichol v. Davidson County, 3 Cooper's Tenn. Ch. 547 (1877), aff'd, Nichol v. County of Davidson, 76 Tenn. 389, 1881 Tenn. LEXIS 23 (1881); Rodgers v. Dibrell, 74 Tenn. 69, 1880 Tenn. LEXIS 212 (1880); Hamilton v. Gleaves, 44 Tenn. App. 642, 316 S.W.2d 335 (1958).

11. —Effect of Fraud on Right to Relief.

It is settled in this state by an unbroken line of decisions that a party guilty of fraud is not entitled to be relieved from its consequences. Thomas v. Hedges, 27 Tenn. App. 585, 183 S.W.2d 14, 1944 Tenn. App. LEXIS 97 (1944).

12. —Fraud in Law.

A deed of trust for the benefit of creditors securing to the maker the use and enjoyment of the property conveyed is, upon its face, fraudulent in law as against his other creditors. Galt v. Dibrell, 18 Tenn. 146, 1836 Tenn. LEXIS 111 (1836); Doyle v. Smith, 41 Tenn. 15, 1860 Tenn. LEXIS 4 (1860); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873).

A conveyance not fraudulent in fact, or not fraudulent in law apparent upon the face of the instrument, but only fraudulent by construction of law, as to certain debts secured, will be good to the extent of the bona fide debts secured, whether they be separate and distinct claims, or any separable part thereof. Neuffer, Hendrix & Co. v. Pardue, 35 Tenn. 191, 1855 Tenn. LEXIS 38 (1855); Lasell v. Tucker, 37 Tenn. 33, 1857 Tenn. LEXIS 72 (1857).

Where the conveyance is only fraudulent in law, the purchaser will be protected to the extent of refunding his purchase money, or allowing the conveyance to stand as a security for it. Alley v. Connell, 40 Tenn. 578, 1859 Tenn. LEXIS 173 (1859); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Cunningham v. Campbell, 3 Cooper's Tenn. Ch. 708 (1878).

Where a bill attacks a deed of trust charging fraud and alleging no specific facts which call for proof, but alleging that it is a general assignment, that it was not properly acknowledged for registration, that it stipulated for greater delay than the law permits, that it made unlawful reservations for the benefit of the debtors, that it gave preferences, that the grantors were insolvent, and that the trustee had not given bond, the attack is for fraud in law, and not fraud in fact. Reed Fertilizer Co. v. Thomas, 97 Tenn. 478, 37 S.W. 220, 1896 Tenn. LEXIS 169 (1896).

13. —Fraud in Fact.

The payee of a note made, without consideration, to hinder and delay his creditors, cannot have any recovery against the maker. Walker v. McConnico, 18 Tenn. 228, 1836 Tenn. LEXIS 126 (1836); Parks v. McKamy, 40 Tenn. 297, 1859 Tenn. LEXIS 80 (1859).

A deed absolute upon its face, but intended as a security for some fraudulent purpose, will not be converted into a mortgage; and the courts will not interpose to grant relief. Nichols v. Cabe, 40 Tenn. 92, 1859 Tenn. LEXIS 28 (1859); Kelton v. Millikin, 42 Tenn. 410, 1865 Tenn. LEXIS 82 (1865).

A conveyance fraudulent in fact is absolutely void, and is not permitted to stand as security for any purpose of reimbursement or indemnity to the grantee for advances actually made, responsibilities assumed in consequence of the conveyance, or for purchase money paid. Brooks v. Caughran, 40 Tenn. 464, 1859 Tenn. LEXIS 131 (1859); Alley v. Connell, 40 Tenn. 578, 1859 Tenn. LEXIS 173 (1859); McCutchen v. Pigue, 51 Tenn. 565, 1871 Tenn. LEXIS 206 (1871); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873); Cunningham v. Campbell, 3 Cooper's Tenn. Ch. 708 (1878); Shepherd v. Woodfolk, 78 Tenn. 593, 1882 Tenn. LEXIS 229 (1882).

Where the maker of and the payee of a note alike participated in the illegal transaction in connection with which the note was given, equity will not aid the maker by restraining an action at law against him to enforce the payment of the note. Osborne v. Allen, 143 Tenn. 343, 226 S.W. 221, 1920 Tenn. LEXIS 23 (1920).

In suit by creditor of insolvent corporation to set aside transfer of property to another corporation where agreement as to transfer included agreement that insolvent corporation was to discharge of all its debts upon certain escrow funds being released to it, evidence was not sufficient to establish actual fraud as to creditor where the amount of the funds released to the insolvent corporation was more than the value of the assets transferred. Hamilton v. Gleaves, 44 Tenn. App. 642, 316 S.W.2d 335 (1958).

14. —Relative Rights of Creditors and Family of Debtor.

The debtor is certainly under a moral obligation, to use all reasonable exertions to satisfy the just claims of his creditors; but he is under a positive obligation, both in law and morals, to support and maintain his family, which is his first and most imperative duty. Hamilton v. Zimmerman, 37 Tenn. 39, 1857 Tenn. LEXIS 73 (1857); Leslie v. Joyner, 39 Tenn. 514, 1859 Tenn. LEXIS 264 (Tenn. Apr. 1859); Van Vleet v. Stratton, 91 Tenn. 473, 19 S.W. 428, 1892 Tenn. LEXIS 17 (1892).

A debtor cannot be coerced to labor for the benefit of his creditor, and may dispose of the products of the labor of his wife and minor children. Leslie v. Joyner, 39 Tenn. 514, 1859 Tenn. LEXIS 264 (Tenn. Apr. 1859); Glasgow v. Turner, 91 Tenn. 163, 18 S.W. 261, 1891 Tenn. LEXIS 89 (1891).

As the future comfort and support of the wife and minor children shall be provided for, when a settlement made for that purpose is attacked for fraud, the fraud must be made to appear by clear and satisfactory evidence. White v. Bettis, 56 Tenn. 645, 1872 Tenn. LEXIS 184 (1872).

A debtor has no right to settle upon his family his property of a stable character, and leave to his creditors the property of an uncertain and doubtful character. Spence v. Dunlap, 74 Tenn. 457, 1880 Tenn. LEXIS 273 (1880). See Allen v. Walt, 56 Tenn. 242, 1872 Tenn. LEXIS 136 (1872); Levering v. Norvell, 68 Tenn. 176, 1877 Tenn. LEXIS 12 (1877).

Land purchased and paid for by the husband who, for the purpose of defeating his creditors, fraudulently procures the same to be conveyed to his wife, will be subjected to the payment of his debts, upon a bill filed for that purpose. Hartnett v. Doyle, 16 Tenn. App. 302, 64 S.W.2d 227, 1932 Tenn. App. LEXIS 6 (1932).

Although a Chapter 7 trustee's claims seeking avoidance under 11 U.S.C. § 548 and the Tennessee Uniform Fraudulent Transfer Act of transfers a debtor made to her daughter in 2007 and 2008 were time-barred, the trustee's claims seeking avoidance of those transfers under 11 U.S.C. § 544 and T.C.A. § 66-3-101 were not time-barred because T.C.A. § 28-2-103 allowed claims for recovery of real property under § 66-3-101 to be filed within seven years; however, there were issues of fact concerning the debtor's intent in transferring fifteen houses to her daughter which precluded the court from granting summary judgment to the trustee or the daughter on the trustee's claims seeking avoidance of the transfers. Paris v. Walker (In re Walker), 566 B.R. 503, 2017 Bankr. LEXIS 929 (Bankr. E.D. Tenn. Apr. 3, 2017).

15. —Hinder and Delay — Meaning — Effect on Conveyance.

A deed of conveyance not operating as an illegal preference of creditors, but in fact hindering and delaying the creditors of the maker is void, no matter what were the intentions of the grantor, the grantee, or beneficiary. Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833); Spence v. Dunlap, 74 Tenn. 457, 1880 Tenn. LEXIS 273 (1880).

The words “hinder and delay” are to be taken in their legal sense, and not in their literal sense. The statute only refers to an improper hindrance or delay, and not to such as is reasonable and fair in the exercise of the well established right to prefer creditors. Hefner v. Metcalf, 38 Tenn. 577, 1858 Tenn. LEXIS 230 (Tenn. Dec. 1858).

16. —Transferor and Transferee Fraudulent.

Where a deed of trust is made to hinder, delay, or defeat creditors, and such fraud is actively participated in by the beneficiaries, the deed is fraudulent and void as against the grantor's other unsecured creditors, although it was made upon full consideration and to secure debts due to the beneficiaries. Boils v. Boils, 41 Tenn. 284, 1860 Tenn. LEXIS 64 (1860).

17. —Effect of Action of Agent on Rights of Debtor.

The mere possession of an agent, without any authority to sell, actual or apparent, from the owner, and without any apparent title conferred on him by the owner, will not enable such agent to confer upon his agent, a power to sell and defeat the title of the owner, and under such circumstances it is impossible to impute to the owner any fraud or to repeal him of the right to assert his title. Taylor, Cole & McLeod v. Pope, 45 Tenn. 413, 1868 Tenn. LEXIS 23 (1868), overruled, A. J. Roach & Co. v. Turk, 56 Tenn. 708, 1872 Tenn. LEXIS 196, 24 Am. Rep. 360 (1872), overruled, A. J. Roach & Co. v. Turk, 56 Tenn. 708, 1872 Tenn. LEXIS 196, 24 Am. Rep. 360 (1872).

18. —Fraudulent Conveyance by Surety.

Sureties are as much prohibited from making fraudulent conveyances to defeat creditors as the principal debtors. Russell v. Stinson, 4 Tenn. 1, 1816 Tenn. LEXIS 2 (1816).

19. —Contract to Purchase — Transfer of Title to Another.

Where husband and wife had entered into contract for purchase of land and before payment for such land was completed or title transferred truck belonging to husband was involved in collision which resulted in several judgments against him, and thereafter a deed was obtained to the property in the name of the wife alone, the husband was held to be the owner of the property for the purpose of satisfying the judgments. Gemignani v. Partee, 42 Tenn. App. 358, 302 S.W.2d 821, 1956 Tenn. App. LEXIS 142 (1956).

20. —Solvency of Debtor — Determination.

The question of the solvency of a debtor depends upon whether enough can be realized from his property to pay his liabilities, and not upon the nominal value of his unsalable goods or property. Churchill v. Wells, 47 Tenn. 364, 1870 Tenn. LEXIS 156 (1870); Allen v. Walt, 56 Tenn. 242, 1872 Tenn. LEXIS 136 (1872); Weaver v. Hawley, 2 Shan. 176 (1876); Levering v. Norvell, 68 Tenn. 176, 1877 Tenn. LEXIS 12 (1877).

21. —Insolvent's Good Faith Belief of Solvency in Making Gift.

A voluntary gift by a son to his mother, or by a husband to his wife, in the way of improving her real estate, done in good faith when both thought the donor to be absolutely solvent, though in fact he was insolvent, is not fraudulent as against his creditors; and the creditors of a husband cannot subject his wife's land in order to reach the money invested in the improvements by him, where the wife was not guilty of any fraudulent participation on her part, and was not guilty of positive fraud in the particular case. Ewing v. Cantrell, 19 Tenn. 364, 1838 Tenn. LEXIS 64 (1838); Wilkinson v. Wilkinson, 38 Tenn. 305, 1858 Tenn. LEXIS 179 (Tenn. Dec. 1858); McFerrin v. Carter, 62 Tenn. 335, 1874 Tenn. LEXIS 52 (1874); Holder v. Crump, 78 Tenn. 320, 1882 Tenn. LEXIS 184 (1882); Federlicht v. Glass, 81 Tenn. 481, 1884 Tenn. LEXIS 60 (1884).

22. —Estoppel of Fraudulent Donor.

Fraudulently giving up a note to defraud the donor's wife of her alimony estops the donor himself or his distributees to recover the note or the amount due on the same. Mulloy v. Young, 29 Tenn. 298, 1859 Tenn. LEXIS 1 (1859); Rowland v. Rowland, 34 Tenn. 543, 1855 Tenn. LEXIS 94 (1855), superseded by statute as stated in, Warren v. Compton, 626 S.W.2d 12, 1981 Tenn. App. LEXIS 558 (Tenn. Ct. App. 1981).

23. —Badges of Fraud.

Circuity of conveyance may constitute a badge of fraud. Jones v. Read, 20 Tenn. 335, 1839 Tenn. LEXIS 58 (1839).

Where vendor, indebted to insolvent, conveys to three persons jointly property not convenient to be enjoyed in that mode and which they pretend to rent to the insolvent, such facts are badges of fraud. Tubb v. Williams, 26 Tenn. 367, 1846 Tenn. LEXIS 139 (1846).

The following facts are either badges of fraud or circumstances which awaken suspicion:

Unusual and unnecessary clauses. Langford v. Fly, 26 Tenn. 585, 1847 Tenn. LEXIS 27 (1847).

Insufficient evidence of the fairness of the transaction to overcome the fraudulence of a conveyance otherwise appearing. McCutchen v. Pigue, 51 Tenn. 565, 1871 Tenn. LEXIS 206 (1871).

The pecuniary inability of the purchaser to pay the purchase price. McCutchen v. Pigue, 51 Tenn. 565, 1871 Tenn. LEXIS 206 (1871); Robinson v. Frankel, 85 Tenn. 475, 3 S.W. 652, 1886 Tenn. LEXIS 72 (1886); Dillard & C. Co. v. Smith, 105 Tenn. 372, 59 S.W. 1010, 1900 Tenn. LEXIS 81 (1900).

No limitation as to the time in which the trust shall be closed. Overton v. John H. Holinshade & Co., 52 Tenn. 683, 1871 Tenn. LEXIS 295 (1871); Woodward v. Goodman, 3 Shan. 483 (1875).

Suspicion cast upon the genuineness and validity of the debts secured, without proof showing them to be bona fide. Overton v. John H. Holinshade & Co., 52 Tenn. 683, 1871 Tenn. LEXIS 295 (1871).

A conveyance of personalty given in connection with a secret agreement to keep its existence secret for purpose of protecting the mortgagor's credit is fraudulent. Moore v. Wood, 61 S.W. 1063, 1901 Tenn. Ch. App. LEXIS 11 (Tenn. Ch. App. 1900).

Where circumstances under which a debtor transfers property are suspicious, failure of the parties to testify or produce an available explanation or rebutting evidence is a badge of fraud. Gurlich's, Inc. v. Myrick, 54 Tenn. App. 97, 388 S.W.2d 353, 1964 Tenn. App. LEXIS 148 (Tenn. Ct. App. Dec. 10, 1964).

Transactions between husband and wife whereby husband's property is placed beyond the reach of his creditors generally excites suspicion and should be carefully scrutinized, and where complainant introduces evidence casting suspicion on the transaction and warranting a suspicion of fraud the burden of proof shifts to the defendant. Gurlich's, Inc. v. Myrick, 54 Tenn. App. 97, 388 S.W.2d 353, 1964 Tenn. App. LEXIS 148 (Tenn. Ct. App. Dec. 10, 1964).

Badges of fraud identified to assist trial courts in determining a debtor's intent for fraudulent conveyance purposes are as follows: (1) The transferor is in a precarious financial condition; (2) The transferor knew there was or soon would be a large money judgment rendered against the transferor; (3) Inadequate consideration was given for the transfer; (4) Secrecy or haste existed in carrying out the transfer; (5) A family or friendship relationship existed between the transferor and the transferee(s); (6) The transfer included all or substantially all of the transferor's nonexempt property; (7) The transferor retained a life estate or other interest in the property transferred; (8) The transferor failed to produce available evidence explaining or rebutting a suspicious transaction; (9) There was a lack of innocent purpose or use for the transfer. Stevenson v. Hicks, 176 B.R. 466, 1995 Bankr. LEXIS 336 (Bankr. W.D. Tenn. 1995).

Transfers were made with the intent to defraud for purposes of 11 U.S.C. § 548 and T.C.A. § 66-3-101 and T.C.A. § 66-3-305 where there was testimony that the debtor's chief scientific officer frequently mentioned the need to protect his assets, that he failed to properly separate the debtor's assets from his “entangled web” of business entities, and his outright fraud in directing the involuntary bankruptcy filing. Holcomb Health Care Servs., LLC v. Quart Ltd., LLC (In re Holcomb Health Care Servs., LLC), 329 B.R. 622, 2004 Bankr. LEXIS 2378 (Bankr. M.D. Tenn. 2004).

24. — —Description of Property.

Want of sufficient description of the debts intended to be secured may constitute a badge of fraud or suspicious circumstance. Barcroft, Beaver & Co. v. Snodgrass, 41 Tenn. 430, 1860 Tenn. LEXIS 87 (1860); D.R. Young & Co. v. Gillespie, Warren & Co., 59 Tenn. 239, 1873 Tenn. LEXIS 48 (1873).

Too general, indefinite, or meager a description of the property conveyed, though not so insufficient as to render the conveyance invalid, may amount to a badge of fraud. Overton v. John H. Holinshade & Co., 52 Tenn. 683, 1871 Tenn. LEXIS 295 (1871); Atwood v. Brown, 1 Shan. 639 (1876); Woodward v. Goodman, 3 Shan. 483 (1875); Williamson v. Steele, 71 Tenn. 527, 1879 Tenn. LEXIS 111, 31 Am. Rep. 652 (1879); Scheibler v. Mundinger, 86 Tenn. 674, 9 S.W. 33, 1888 Tenn. LEXIS 23 (1888).

25. — —Consideration.

The following facts are either badges of fraud or circumstances which awaken suspicion:

Colorable, inadequate, or small consideration. Cains v. Jones, 13 Tenn. 249, 1833 Tenn. LEXIS 155 (1833); Alley v. Connell, 40 Tenn. 578, 1859 Tenn. LEXIS 173 (1859).

The recital of a fictitious consideration in a conveyance for the benefit of creditors. Peacock v. Tompkins, 19 Tenn. 317, 1838 Tenn. LEXIS 60 (1838); Gibbs v. Thompson, 26 Tenn. 179, 1846 Tenn. LEXIS 96 (1846); Neuffer, Hendrix & Co. v. Pardue, 35 Tenn. 191, 1855 Tenn. LEXIS 38 (1855); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Thurman v. Jenkins, 61 Tenn. 426, 1873 Tenn. LEXIS 199 (1873); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873); R. W. McCrasly & Co. v. Hasslock, 63 Tenn. 1, 1874 Tenn. LEXIS 191 (1874).

A display of various considerations stated in the deed. Jones v. Read, 20 Tenn. 335, 1839 Tenn. LEXIS 58 (1839).

Mere inadequacy of consideration is, as a general rule, no ground for setting aside a contract; but gross inadequacy of consideration raises a presumption of imposition, oppression, and fraud, and is ground for setting aside a contract. Inadequacy of consideration, coupled with other circumstances, such as misplaced confidence, overreaching, weakness of mind, and the like, may be ground for setting aside a contract. Wright v. Wilson, 10 Tenn. 294, 1829 Tenn. LEXIS 12 (1839); Birdsong v. Birdsong, 39 Tenn. 289, 1859 Tenn. LEXIS 214 (Tenn. Apr. 1859); Coffee v. Ruffin, 44 Tenn. 487, 1867 Tenn. LEXIS 72 (1867); Hamilton v. Saunders, 3 Shan. 789 (1870); Meath v. Porter, 56 Tenn. 224, 1872 Tenn. LEXIS 133 (1872); Mound City Mut. Life Ins. Co. v. Hamilton, 3 Cooper's Tenn. Ch. 228 (1876); Mann v. Russey, 101 Tenn. 596, 49 S.W. 835, 1898 Tenn. LEXIS 107 (1898); Talbott v. Manard, 106 Tenn. 60, 59 S.W. 340, 1900 Tenn. LEXIS 133 (1900); Stephens v. Ozbourne, 107 Tenn. 572, 64 S.W. 902, 1901 Tenn. LEXIS 111, 89 Am. St. Rep. 957 (1901); Stamper v. Venable, 117 Tenn. 557, 97 S.W. 812, 1906 Tenn. LEXIS 67 (1906).

Any conveyance is fraudulent if the fair salable value of the conveyor's assets is less than the amount necessary to pay his liabilities on his absolute liabilities as they mature. Citizens & S. Nat'l Bank v. Auer, 514 F. Supp. 638, 1981 U.S. Dist. LEXIS 11966 (E.D. Tenn. 1981), rev'd on other grounds, Citizens & S. Nat'l Bank v. Auer, 640 F.2d 837, 1981 U.S. App. LEXIS 20446 (6th Cir. 1981), rev'd, Citizens & S. Nat'l Bank v. Auer, 514 F. Supp. 631, 1977 U.S. Dist. LEXIS 15593 (E.D. Tenn. 1977).

26. — —Debtor's Retention of Possession.

See also notes under headings 41-43 infra.

The following facts are either badges of fraud or circumstances which awaken suspicion:

The vendor's retention of the possession of personal property after his absolute sale thereof. Callen v. Thompson, 11 Tenn. 474, 11 Tenn. 475, 1832 Tenn. LEXIS 98, 24 Am. Dec. 587 (1832); Darwin v. Handley, 11 Tenn. 502, 1832 Tenn. LEXIS 104 (1832); Young v. Pate, 12 Tenn. 164, 1833 Tenn. LEXIS 35 (1833); Maney v. Killough, 15 Tenn. 440 (1835); Wiley v. Lashlee, 27 Tenn. 717, 1848 Tenn. LEXIS 30 (1848); Shaddon v. Knott, 32 Tenn. 358, 1852 Tenn. LEXIS 83 (1852); Grubbs v. Greer, 45 Tenn. 160, 1867 Tenn. LEXIS 111 (1867).

The grantor's retention of the possession of personal property conveyed to secure creditors, continued after the maturity of the debt and default of payment on his part. Darwin v. Handley, 11 Tenn. 502, 1832 Tenn. LEXIS 104 (1832); Maney v. Killough, 15 Tenn. 440 (1835); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873).

Retention of the possession of personal property after its sale under an execution by debtor who confessed judgment, when purchased by the judgment creditor. Floyd v. Goodwin, 16 Tenn. 484, 1835 Tenn. LEXIS 112 (1835).

Embarrassment; relationship; no money paid; nominal ownership changed by deeds and forms of law, possession, and real ownership continuing as before. Grannis, White & Co. v. Smith, 22 Tenn. 179, 1842 Tenn. LEXIS 62 (1842).

The retention of the possession and control of the land and personalty as his own by the grantor in an absolute conveyance, his sale of the crops and stock, and his acting in every respect as owner. Langford v. Fly, 26 Tenn. 585, 1847 Tenn. LEXIS 27 (1847).

The grantor's continuance in possession of the property, a stock of merchandise goods, conveyed in a deed of trust to secure certain creditors, without any limitation as to his discretion in appropriating the proceeds of sales. R. W. McCrasly & Co. v. Hasslock, 63 Tenn. 1, 1874 Tenn. LEXIS 191 (1874); Bank of Cookville v. Brier, 95 Tenn. 331, 32 S.W. 205, 1895 Tenn. LEXIS 94 (1895).

27. — —Facts Not Constituting.

The mere relationship between the parties to a conveyance is not, of itself, a badge of fraud; but it is a circumstance which naturally awakens suspicion, and lends greater weight to other unfavorable circumstances. Bumpas v. Dotson, 26 Tenn. 310, 1846 Tenn. LEXIS 132 (1846); Sporrer v. Eifler, 48 Tenn. 633, 1870 Tenn. LEXIS 125 (1870); Bank of Tenn. v. Erwin, 2 Shan. 442 (1877); Robinson v. Frankel, 85 Tenn. 475, 3 S.W. 652, 1886 Tenn. LEXIS 72 (1886); Blackmore v. Parkes, 81 F. 899, 1897 U.S. App. LEXIS 1912 (6th Cir. 1897); First Nat'l Bank v. Wilkins, 11 Tenn. App. 9, 1929 Tenn. App. LEXIS 70 (1929).

The fact that purchaser had no use for the property conveyed may engender suspicion but is not itself evidence of fraud. Grubbs v. Greer, 45 Tenn. 160, 1867 Tenn. LEXIS 111 (1867).

Where purchaser takes immediate possession of property transferred in payment of a debt which exceeds the value of the property, and the instrument sets forth the articles conveyed, fraud is not presumed from fact that purchaser is unable to specify all articles received. Bank of Madisonville v. McCoy, 42 S.W. 814, 1897 Tenn. Ch. App. LEXIS 79 (Tenn. Ch. App. 1897).

28. — —Rebuttal of Inference of Fraud.

If the deed of trust be proved to have been made in good faith for a valuable consideration, such evidence rebuts and repeals all inferences of fraud from the existence of facts usually considered badges of fraud; but proof of a bona fide valuable or full consideration does not rebut and repel the evidence of actual fraud. Trotter v. Watson, 25 Tenn. 509, 1846 Tenn. LEXIS 31 (1846).

29. —Consideration.

A conveyance made by an individual or the members of a partnership firm to secure the debt of another then created, or in consideration of an extension of time for the payment of an existing debt, is supported by a valuable consideration, and is not voluntary and fraudulent as against the individual or firm creditors of the grantor or grantors. Allen, Asher & Co. v. Morgan, 24 Tenn. 624, 1845 Tenn. LEXIS 148 (1845).

30. — —Conveyance of Expectancy Without Consideration.

Where an insolvent heir apparent made an assignment without consideration of his estate in expectancy, such assignment was fraudulent as to his existing creditors and would be set aside at their instance, and the property descended subject to payment of their debts. Read v. Mosby, 87 Tenn. 759, 11 S.W. 940, 1889 Tenn. LEXIS 25, 5 L.R.A. 122 (1889).

31. — —False Consideration — Effect.

Where property is sold under several executions, some valid, and some colorable because contrived for the fraudulent purpose to defraud, a purchase by the execution creditors under the colorable and void executions, for the purpose of assisting in the scheme to defraud is fraudulent as against other creditors, because a purchase based on a consideration partly fair and partly colorable and fraudulent is within the statute. Floyd v. Goodwin, 16 Tenn. 484, 1835 Tenn. LEXIS 112 (1835). But see Saylors v. Saylors, 50 Tenn. 525, 1871 Tenn. LEXIS 109 (1871).

In the absence of intentional fraud, or fraud in fact, or fraud in law apparent upon the face of the instrument, a deed will be held good as a security for the debts really due at the time of its execution, despite its recital of fictitious consideration. Peacock v. Tompkins, 19 Tenn. 317, 1838 Tenn. LEXIS 60 (1838); Bumpas v. Dotson, 26 Tenn. 310, 1846 Tenn. LEXIS 132 (1846); Neuffer, Hendrix & Co. v. Pardue, 35 Tenn. 191, 1855 Tenn. LEXIS 38 (1855); Lasell v. Tucker, 37 Tenn. 33, 1857 Tenn. LEXIS 72 (1857); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Thurman v. Jenkins, 61 Tenn. 426, 1873 Tenn. LEXIS 199 (1873); Blizzard v. Craigmiles, 75 Tenn. 693, 1881 Tenn. LEXIS 172 (1881); Leech v. Hillsman, 76 Tenn. 747, 1882 Tenn. LEXIS 5 (1882).

A mistake as to the amount of a claim secured where the amount is not capable of exact computation, as a surety's liability for a guardian's unsettled liability, not assumed to be stated accurately, but stated to be about double what it really was afterwards ascertained to be, does not render the deed fraudulent. Bumpas v. Dotson, 26 Tenn. 310, 1846 Tenn. LEXIS 132 (1846).

The recital of a false and fictitious consideration in a conveyance for the benefit of creditors renders the deed fraudulent as against them. Gibbs v. Thompson, 26 Tenn. 179, 1846 Tenn. LEXIS 96 (1846); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Thurman v. Jenkins, 61 Tenn. 426, 1873 Tenn. LEXIS 199 (1873); R. W. McCrasly & Co. v. Hasslock, 63 Tenn. 1, 1874 Tenn. LEXIS 191 (1874); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873).

A false and fictitious statement of the amount of debts secured by a deed of trust will not render the deed fraudulent as to the actual amount of valid debts shown to exist, where the creditors did not participate in the intentional fraud of the grantor, or where the discrepancy was the result of mere inadvertence without fraudulent design. A. & J. Troustine & Co. v. Lask, 63 Tenn. 162, 1874 Tenn. LEXIS 222 (1874).

An intentional fraud by the maker of a trust deed, as to a portion of the debts provided for, but not participated in by other beneficiaries, whose debts are valid, renders the deed void only as to so much as is embraced by the fraudulent purpose of the maker, and concurred in by the beneficiaries, whose debts are false and fictitious, but such deed is good as to the claims of other beneficiaries. A. & J. Troustine & Co. v. Lask, 63 Tenn. 162, 1874 Tenn. LEXIS 222 (1874); Jones v. Cullen, 100 Tenn. 1, 42 S.W. 873, 1897 Tenn. LEXIS 86 (1897).

32. — —Evidence Disproving Payment of Consideration.

Recital of payment in a deed is prima facie evidence of the fact requiring clear and satisfactory evidence to disprove it. Gaugh v. Henderson, 39 Tenn. 628, 1859 Tenn. LEXIS 293 (1859); Bayliss v. Williams, 46 Tenn. 440, 1869 Tenn. LEXIS 79 (1869); McKissick v. Martin, 59 Tenn. 311, 1873 Tenn. LEXIS 63 (1873).

Proof that the party, by whom it is recited that the payment was made, had not sufficient means to make the payment raises a presumption against the payment. Dunlap v. Haynes, 51 Tenn. 476, 1871 Tenn. LEXIS 189 (1871).

33. — —Grantee Having No Visible Means of Paying.

A conveyance of land made by an insolvent debtor to his son in consideration of the satisfaction of the father's alleged indebtedness and of the son's note, claimed to have been paid before the filing of the bill, will be set aside as fraudulent against the father's creditors, where the son at the date of the conveyance was but a few months over age, and had no visible means wherewith he could pay the price, since the notes were in fact executed for no actual indebtedness, the conveyance was made to hinder and defeat the father's creditors. Hillsman v. Blackwell, 57 Tenn. 480, 1873 Tenn. LEXIS 245 (1873).

34. —Voluntary Conveyances or Settlements Not Void Per Se.

Indebtedness at the time of a voluntary conveyance, which bears an inconsiderable proportion in amount to the property reserved, does not, of itself, render such conveyance void; if the property retained be entirely ample to pay all demands, the gift is good. Burkey v. Self, 36 Tenn. 121, 1856 Tenn. LEXIS 67 (1856); Perkins v. Perkins, 1 Cooper's Tenn. Ch. 537 (1874); Welcker v. Price, 70 Tenn. 666, 1879 Tenn. LEXIS 217 (1879); Sanders v. Logue, 88 Tenn. 355, 12 S.W. 722, 1889 Tenn. LEXIS 57 (1890). See Allen v. Walt, 56 Tenn. 242, 1872 Tenn. LEXIS 136 (1872).

Voluntary conveyances or settlements are not void per se as against the grantor's creditors. Burkey v. Self, 36 Tenn. 121, 1856 Tenn. LEXIS 67 (1856); Ricketts v. McCully, 54 Tenn. 712, 1872 Tenn. LEXIS 108 (1872); Perkins v. Perkins, 1 Cooper's Tenn. Ch. 537 (1874); Welcker v. Price, 70 Tenn. 666, 1879 Tenn. LEXIS 217 (1879); Lippman v. Boals, 84 Tenn. 283, 1886 Tenn. LEXIS 97 (1886).

35. —Voluntary Conveyances Without Fraud or Prejudice at Time — Validity.

A registered voluntary conveyance of personalty or realty, made in consideration of blood or other relationship, and without fraud as against subsequent creditors or purchasers, will protect the grantee as against subsequent creditors or purchasers for value, and without actual notice of the registered conveyance; but such consideration is not good as to existing creditors. Bank of United States v. Lee, 38 U.S. 107, 10 L. Ed. 81, 1839 U.S. LEXIS 419 (1839); Marshall v. Booker, 9 Tenn. 13, 1820 Tenn. LEXIS 10 (1820); Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

The statute does not discountenance a voluntary conveyance to a child or relative, or even to a stranger, if it be not, at the time, prejudicial to the rights of any other person, or in execution of any meditated scheme of future fraud or injury to other persons. Nicholas v. Ward, 38 Tenn. 323, 1858 Tenn. LEXIS 181, 73 Am. Dec. 177 (1858); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871).

A voluntary conveyance by husband to his wife, when solvent, and not in anticipation of insolvency, and without any intent to defraud existing or subsequent creditors, is not fraudulent as against creditors, especially is it not fraudulent against the creditors of a firm of which he is a member, debts of which were contracted without knowledge of the property conveyed to the wife. Nelson v. Kinney, 93 Tenn. 428, 25 S.W. 100, 1893 Tenn. LEXIS 70 (1893).

36. —Retention of Sufficient Property to Pay Debts upon Making Voluntary Conveyance — Necessity — Proof.

Where the maker of a voluntary conveyance or settlement was indebted at the time of the making of the same, it should satisfactorily appear that abundant means were reserved, and that the maker of the conveyance was not indebted to an amount sufficient for it to have the effect of delaying and defeating his creditors. Smith v. Greer, 22 Tenn. 118, 1842 Tenn. LEXIS 41 (1842); Allen v. Walt, 56 Tenn. 242, 1872 Tenn. LEXIS 136 (1872); White v. Bettis, 56 Tenn. 645, 1872 Tenn. LEXIS 184 (1872); Weaver v. Hawley, 2 Shan. 176 (1876).

A voluntary conveyance of land is not fraudulent, where the grantor retains sufficient property to pay his debts. Ricketts v. McCully, 54 Tenn. 712, 1872 Tenn. LEXIS 108 (1872).

Where a person making a voluntary settlement of $15,000 or $16,000 is indebted to the extent of $45,000 or $50,000, and his assets are vaguely and indefinitely shown to be worth $75,000 or $80,000, without showing that the notes and accounts are solvent and collectable, nor showing the amount or quantity of the assets, the conveyances will be set aside. Allen v. Walt, 56 Tenn. 242, 1872 Tenn. LEXIS 136 (1872).

The inquiry is limited to the circumstances of the grantor at the time of the execution of the conveyance. Liabilities as an endorser, when there is no evidence that the persons for whom he was liable were unable to pay them, cannot be taken into account. Weaver v. Hawley, 2 Shan. 176 (1876); Lippman v. Boals, 84 Tenn. 283, 1886 Tenn. LEXIS 97 (1886).

In order to sustain a voluntary conveyance to a wife or child, the proof must show, not merely a sufficiency of property retained to pay the creditors assailing the conveyance, but that ample property was reserved to pay all existing creditors at the time of the conveyance. Weaver v. Hawley, 2 Shan. 176 (1876).

Where the responsible and solvent member of a partnership makes a voluntary conveyance to his wife and children of all his individual property, or practically all, worth from $60,000 to $100,000, while his firm owes at least $40,000, with assets of the nominal value of $90,000, consisting principally of notes and accounts not shown to be available to creditors, the conveyance will be set aside at the instance of the creditors of the firm. The court found that there was fraud in fact in this case. Levering v. Norvell, 68 Tenn. 176, 1877 Tenn. LEXIS 12 (1877).

37. —Conveyances to Settle Debts.

The fact that a debtor corporation conveyed all its property to another corporation in an effort to settle its debts and for a consideration in excess of the reasonable value of the same is no evidence of fraud. Hicks v. Whiting, 149 Tenn. 411, 258 S.W. 784, 1923 Tenn. LEXIS 105 (1923).

38. —Conveyance to Supposed Creditors Fraudulently Procured.

Where a father, an old and ignorant man, moved by misrepresentation and false information of the existence of a judgment and execution against him, the whole thing being a conspiracy against him, for the purpose of extracting money from him, executed a deed to all of his property to one of his children, retaining for himself a life estate, and simultaneously took a bond from the grantee obligating herself to convey to each of his other children, at the death of her father, an equal share of the property, such deed and bond constituted a conveyance and settlement of his property upon all his children at his death, and will be enforced as between the children, because there were in fact no creditors. Such contract would be enforced, although designed to defraud the creditors of the father. Graham v. Lambert, 24 Tenn. 595, 1845 Tenn. LEXIS 141 (1845).

Conveyance or sale procured by fraud from one not in pari delicto by falsely creating an unfounded apprehension of some ill defined and imaginary liability will be set aside at the instance of the maker or his representatives, where he was overreached through the weakness of his mind. Davis v. McNalley, 37 Tenn. 583, 1858 Tenn. LEXIS 67 (1858); Tally v. Smith, 41 Tenn. 290, 1860 Tenn. LEXIS 66 (1860). See Johnson v. Chadwell, 27 Tenn. 145, 1847 Tenn. LEXIS 62 (1847); Martin v. Martin, 48 Tenn. 644, 1870 Tenn. LEXIS 127 (1870).

39. —Conditional Sales.

The written retention of title in conditional sales of chattels or merchandise, to secure the payment of the purchase price, with power in the purchaser to sell, whether express or by necessary implication, is contrary to public policy, and void as to creditors of the purchaser. Nailer v. Young, 75 Tenn. 735, 1881 Tenn. LEXIS 181 (1881); Star Clothing Mfg. Co. v. Nordeman, 118 Tenn. 384, 100 S.W. 93, 1906 Tenn. LEXIS 106 (Tenn. Dec. 1906).

40. —Retention of Property After Sale or Conveyance.

The vendor's retention of the use of personal property, after a sale thereof, with the consent of the purchaser, is strong evidence of fraud, but not fraud in itself. The presumption may be repelled by proof of fairness in the transaction. The burden of proof rests upon the purchaser. Ragan v. Kennedy, 1 Tenn. 91, 1804 Tenn. LEXIS 34 (1804); Callen v. Thompson, 11 Tenn. 474, 11 Tenn. 475, 1832 Tenn. LEXIS 98, 24 Am. Dec. 587 (1832); Darwin v. Handley, 11 Tenn. 502, 1832 Tenn. LEXIS 104 (1832); Young v. Pate, 12 Tenn. 164, 1833 Tenn. LEXIS 35 (1833); Maney v. Killough, 15 Tenn. 440 (1835); Simpson v. Mitchell, 16 Tenn. 417, 1835 Tenn. LEXIS 96 (1835); Richmond v. Crudup, 19 Tenn. 581, 1838 Tenn. LEXIS 92 (1838); Wiley v. Lashlee, 27 Tenn. 717, 1848 Tenn. LEXIS 30 (1848); Shaddon v. Knott, 32 Tenn. 358, 1852 Tenn. LEXIS 83 (1852); Grubbs v. Greer, 45 Tenn. 160, 1867 Tenn. LEXIS 111 (1867); Bank of Tenn. v. Erwin, 2 Shan. 442 (1877).

The grantor's retention of some of the conveyed property consumable or destructible in its use, in the absence of an express reservation or stipulation therefor, is only a strong badge of fraud in fact, but not in law. Darwin v. Handley, 11 Tenn. 502, 1832 Tenn. LEXIS 104 (1832); Charlton v. Lay, 24 Tenn. 496, 1844 Tenn. LEXIS 118 (1844); Bank of Tenn. v. Erwin, 2 Shan. 442 (1877); Lincoln Sav. Bank v. Ewing, 80 Tenn. 598, 1883 Tenn. LEXIS 211 (1883); Reeves v. John, 95 Tenn. 434, 32 S.W. 312, 1895 Tenn. LEXIS 112 (1895).

The grantor's retention after the execution of a bill of sale therefor, absolute on its face, but proved to be intended by the parties as a security only for debt, creates no presumption of fraud. Wiley v. Lashlee, 27 Tenn. 717, 1848 Tenn. LEXIS 30 (1848).

41. — —Retention of Possession upon Conveyance to Secure Debt.

See also notes under heading 26.

Where personal property is conveyed to secure the payment of debts already due, without any provision for further indulgence, and with the consequent right to sell immediately, the maker's retention of possession is prima facie evidence of fraud, which may be rebutted. Darwin v. Handley, 11 Tenn. 502, 1832 Tenn. LEXIS 104 (1832); Maney v. Killough, 15 Tenn. 440 (1835); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873).

Where a conveyance is fraudulent as to some of the property conveyed, it is void as to all; as where there is a stipulation for the grantor's retention of the possession and use of property consumable or destructible in its use, the deed is fraudulent and void as to all of the property. Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833); Simpson v. Mitchell, 16 Tenn. 417, 1835 Tenn. LEXIS 96 (1835); Floyd v. Goodwin, 16 Tenn. 484, 1835 Tenn. LEXIS 112 (1835).

Where personal property is conveyed to secure debts, the grantor's retention of the possession after default in payment, raises a presumption of fraud; but this presumption may be rebutted. Maney v. Killough, 15 Tenn. 440 (1835); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873).

Where the instrument conveying personal property to secure the payment of debts is silent as to the possession thereof, the retention of the possession by the debtor, from the execution of the deed till default of payment of the debts secured, is presumed to be by the assent of the trustee or mortgagee, and is not inconsistent with the deed, and is no evidence of fraud. Maney v. Killough, 15 Tenn. 440 (1835); Reeves v. John, 95 Tenn. 434, 32 S.W. 312, 1895 Tenn. LEXIS 112 (1895).

The fact that the maker of the instrument retains the possession of the property, consistently with the deed, is not fraudulent per se, nor is it prima facie evidence of fraud, where the time of indulgence is equivalent only to the probable “law's delay.” Mitchell v. Beal, 16 Tenn. 134, 1835 Tenn. LEXIS 59 (1835); Hartman v. Allen, 77 Tenn. 657, 1882 Tenn. LEXIS 118 (1882). See Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871); Masson v. Tarver, 62 Tenn. 290, 1873 Tenn. LEXIS 189 (1873).

The mere fact that the mortgagor was permitted to retain the possession of the personal property conveyed by the mortgage, and that he afterwards disposed of it without the consent of the mortgagee, will not render the mortgage void as to the land conveyed by the same. Saylors v. Saylors, 50 Tenn. 525, 1871 Tenn. LEXIS 109 (1871).

42. — — —Retaining Use of Consumable Property.

A mortgage, deed of trust, or trust assignment to secure the payment of the grantor's debts, conveying property in its nature necessarily consumable or destructible in its use, or any part of which is so consumable, and stipulating that the grantor shall retain the possession and use of the same, is, upon its face, fraudulent in law, not only as to the property so consumable, but also as to the nonconsumable property. Darwin v. Handley, 11 Tenn. 502, 1832 Tenn. LEXIS 104 (1832); Young v. Pate, 12 Tenn. 164, 1833 Tenn. LEXIS 35 (1833); Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833); Simpson v. Mitchell, 16 Tenn. 417, 1835 Tenn. LEXIS 96 (1835); Richmond v. Crudup, 19 Tenn. 581, 1838 Tenn. LEXIS 92 (1838); Wade v. Green, 22 Tenn. 547, 1842 Tenn. LEXIS 143 (1842); Sugg v. Tillman, 32 Tenn. 208, 1852 Tenn. LEXIS 52 (1852); Bank of Rome v. Haselton, 83 Tenn. 216, 1885 Tenn. LEXIS 45 (1885).

A conveyance to secure debts stipulating for the possession and use of property consumable or destructible in its use is good only as between the parties, and as against volunteers and third persons having no superior equity to the beneficiaries. Wade v. Green, 22 Tenn. 547, 1842 Tenn. LEXIS 143 (1842).

The fact that some of the property included in a mortgage was consumable in its use, and was retained by the mortgagor, in the absence of an express reservation in the deed of the possession and use in favor of the grantor, would be only a badge of fraud as a matter of fact, and not such as a matter of law. Lincoln Sav. Bank v. Ewing, 80 Tenn. 598, 1883 Tenn. LEXIS 211 (1883).

43. — — —Failure to Consume Consumable Property.

The fact that the property, necessarily consumable in its use, the retention of the possession and use of which by the debtor is stipulated for in the conveyance for creditors, is not consumed by the debtor, but is afterwards sold, and the proceeds applied to the payment of the debts secured, does not restore the deed. Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833); Trabue v. Willis, 19 Tenn. 583; Sugg v. Tillman, 32 Tenn. 208, 1852 Tenn. LEXIS 52 (1852).

Corn and pork. Simpson v. Mitchell, 16 Tenn. 417, 1835 Tenn. LEXIS 96 (1835).

44. —Property Consumable or Destructible in Use.

Property in its nature held to be necessarily and absolutely consumable or destructible in its use is such as follows:

Whisky, vinegar, flour, brandy, wines, coffee, sugar, bacon, dried beef, candles, wood, corn, and hay. Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833).

Meat, corn, and fodder. Richmond v. Crudup, 19 Tenn. 581, 1838 Tenn. LEXIS 92 (1838); Trabue v. Willis, 19 Tenn. 583; Charlton v. Lay, 24 Tenn. 496, 1844 Tenn. LEXIS 118 (1844).

Hay. Bank of Tenn. v. Erwin, 2 Shan. 442 (1877).

Corn. Lincoln Sav. Bank v. Ewing, 80 Tenn. 598, 1883 Tenn. LEXIS 211 (1883).

45. — —Terms Describing.

The various expressions in the several cases as to the character of property subject to consumption or destruction by its use are as follows:

Property, use of which, from its nature, was its destruction or exhaustion. Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833).

Property necessarily consumed in the using. Simpson v. Mitchell, 16 Tenn. 417, 1835 Tenn. LEXIS 96 (1835).

Property consumable in the using. Richmond v. Crudup, 19 Tenn. 581, 1838 Tenn. LEXIS 92 (1838).

Property necessarily consumable in the use. Trabue v. Willis, 19 Tenn. 583; Ross v. Young, 37 Tenn. 627, 1858 Tenn. LEXIS 81 (1858).

Property in its nature consumable in the use of it. Hunter v. Foster, 23 Tenn. 211, 1843 Tenn. LEXIS 55 (1843).

46. —Property Not Consumable in Use.

The following are examples of property not consumable or destructible in use:

Household goods and furniture. Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833).

Land, horses, cattle, and furniture. Maney v. Killough, 15 Tenn. 440 (1835).

Hogs, sheep, lambs, bee hives, and vinegar kegs. Ross v. Young, 37 Tenn. 627, 1858 Tenn. LEXIS 81 (1858).

Wagons and windmills. Bank of Tenn. v. Erwin, 2 Shan. 442 (1877).

47. —Mortgages, Deeds of Trust and Assignments.

The mortgage or deed of trust of a mining and manufacturing corporation, conveying its mineral lands, furnaces, and equipment for the purpose of securing its bonded indebtedness, is valid as against subsequent creditors, when construed not to include cash on hand, commissary stock, iron ore, pig iron, accounts receivable, income, issues and profit, until default and possession taken thereunder by the trustee. Morgan Bros. v. Dayton Coal & Iron Co., 134 Tenn. 228, 183 S.W. 1019, 1915 Tenn. LEXIS 160 (1916).

48. — —Conveyances to Prevent Sacrifice of Property and Race Among Creditors.

A deed of trust made to prevent creditors from sacrificing the property of the debtor, by execution sales, or to prevent a race of diligence among his creditors for his property, by appropriating it to preferred creditors, is valid. Hefner v. Metcalf, 38 Tenn. 577, 1858 Tenn. LEXIS 230 (Tenn. Dec. 1858). See Mitchell v. Beal, 16 Tenn. 134, 1835 Tenn. LEXIS 59 (1835); Wiley v. Lashlee, 27 Tenn. 717, 1848 Tenn. LEXIS 30 (1848).

49. — —Conveyances Purporting to Secure Existing Debt but Covering Future Debts.

A deed of trust, purporting to secure an existing debt, but intended by parol agreement to secure a debt to be contracted in the future, is, as to the future debt, fraudulent and void as against the grantor's creditors; but, in the absence of fraud in fact, such deed of trust is valid as to any existing debt. Neuffer, Hendrix & Co. v. Pardue, 35 Tenn. 191, 1855 Tenn. LEXIS 38 (1855); McGavock v. Deery, 41 Tenn. 265, 1860 Tenn. LEXIS 62 (1860); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871).

50. — —Assignment for Benefit of Creditors — Assignee Empowered to Continue Business.

An assignment for the benefit of creditors may be drawn with a stipulation for the continuance of the debtor's business by the assignee, with the view of more effectually promoting the interests of creditors, and such assignment will be sustained. Doyle v. Smith, 41 Tenn. 15, 1860 Tenn. LEXIS 4 (1860); Reeves v. John, 95 Tenn. 434, 32 S.W. 312, 1895 Tenn. LEXIS 112 (1895).

A deed of trust for the benefit of all creditors, but which gives a preference to certain creditors, and stipulates that the merchandising business is to be continued for two years and three months, the stock conveyed in the deed replenished from the proceeds of sale of goods, and the assignor retained to assist in management of the business, is void on its face, because the stipulation for continuation of the business is for the benefit of the debtor, not the creditors. Lowenstein v. Love, 84 Tenn. 658, 1886 Tenn. LEXIS 152 (1886).

51. — —Stock in Trade Conveyed to Certain Creditors with Right to Conduct Business Reserved.

A mortgage, deed of trust, or trust assignment conveying a stock of merchandise, intended to secure certain debts, with the possession and power of sale or disposition, and the right to carry on the business in the usual course of trade, and to replenish the stock, all retained in the maker, and the new stock so acquired by replenishment to be covered by the mortgage, is fraudulent in law as against creditors. Doyle v. Smith, 41 Tenn. 15, 1860 Tenn. LEXIS 4 (1860); Tennessee Nat'l Bank v. Ebbert & Co., 56 Tenn. 153, 1872 Tenn. LEXIS 119 (1872); R. W. McCrasly & Co. v. Hasslock, 63 Tenn. 1, 1874 Tenn. LEXIS 191 (1874); Phelps v. Murray, 2 Cooper's Tenn. Ch. 746 (1877); Bank of Rome v. Haselton, 83 Tenn. 216, 1885 Tenn. LEXIS 45 (1885); Lowenstein v. Love, 84 Tenn. 658, 1886 Tenn. LEXIS 152 (1886); Bank of Cookville v. Brier, 95 Tenn. 331, 32 S.W. 205, 1895 Tenn. LEXIS 94 (1895); Rodes v. Haynes, 95 Tenn. 673, 33 S.W. 564, 1895 Tenn. LEXIS 141 (1895); Morgan Bros. v. Dayton Coal & Iron Co., 134 Tenn. 228, 183 S.W. 1019, 1915 Tenn. LEXIS 160 (1916).

The mortgagor's power of continuation of the business by the sale of the goods mortgaged in the usual course of trade renders the mortgage fraudulent in law, and void as against his creditors; and it is immaterial whether such power is expressly retained upon the face of the mortgage, or is made to appear, aliunde, by other proof, either direct or circumstantial, as by the express oral declaration of the mortgagee, or by inference from the relation and conduct of the parties. Bank of Rome v. Haselton, 83 Tenn. 216, 1885 Tenn. LEXIS 45 (1885).

Where a deed of trust conveying a stock of goods or merchandise to secure certain debts is fraudulent in law upon its face, and void as against creditors, as to the stock of goods so conveyed, because of a stipulation for a continuation of the business for the benefit of the debtor, and not the creditors, it is also void as to the real estate conveyed by the same conveyance for the same purpose. Bank of Cookville v. Brier, 95 Tenn. 331, 32 S.W. 205, 1895 Tenn. LEXIS 94 (1895).

The reservation of the right of possession and the power of sale in the grantor, so as to render the deed of trust on a stock of goods or merchandise fraudulent in law, and void as against creditors, will not be implied from provisions for a public sale by the trustee for failure to pay the debts within six months, and for the inclusion of any other goods thereafter purchased and added to the stock by the grantor, where there is no provision that the trustee shall defer to take possession until after default, and his power to make private sales before that time is not negatived. Reeves v. John, 95 Tenn. 434, 32 S.W. 312, 1895 Tenn. LEXIS 112 (1895).

Where the pledgor of lumber remained in the actual possession of the lumberyard, in which the lumber was stored, and carried on the business of a dealer, bought and sold at will, with outward show of ownership, and was enabled to incur additional debt for that reason, neither the lease of the yard to the pledgee nor contracts pledging the lumber having been registered, the pledge was fraudulent and void as against other creditors. Williams v. First Nat'l Bank, 150 Tenn. 15, 261 S.W. 973, 1923 Tenn. LEXIS 59 (1923).

52. — —Time of Foreclosure Considered with Value of Property Conveyed to Creditor.

See also notes under heading 87.

A deed of trust including all the debtor's property, double or greatly exceeding in value the debt secured, with time of indulgence three years, with no annual payments stipulated for, and the possession and use of the property for that time expressly reserved to the debtor, and put beyond the control of the trustee, with power of sale reserved to the debtor to sell on credit for three years, with no other restriction but that he should pay the proceeds to the trustee, is at least fraudulent in law. Mitchell v. Beal, 16 Tenn. 134, 1835 Tenn. LEXIS 59 (1835); Young v. Hail, 74 Tenn. 175, 1880 Tenn. LEXIS 226 (1880); Hartman v. Allen, 77 Tenn. 657, 1882 Tenn. LEXIS 118 (1882).

Inclusion in the conveyance of considerably more property in value than the amount of the creditor's claim is not a decisive circumstance in the creation of constructive fraud, if the time of indulgence in the conveyance is usual and reasonable. Bennett v. Union Bank, 24 Tenn. 612, 1845 Tenn. LEXIS 146 (1845); Roane v. Bank of Nashville, 38 Tenn. 526, 1858 Tenn. LEXIS 218 (Tenn. Dec. 1858); Stewart v. Cockrell, 70 Tenn. 369, 1879 Tenn. LEXIS 183 (1879). See Mitchell v. Beal, 16 Tenn. 134, 1835 Tenn. LEXIS 59 (1835).

If all the debtor's property, or a greater portion of it, be included in the conveyance, and if its value be greatly or considerably beyond the amount of the debt to be secured, the period of indulgence to the debtor becomes material; and if the indulgence is for an unreasonable time, the conveyance is fraudulent as against other creditors; but if the deed includes property of insufficient or only sufficient value to secure the debt, time ceases to be decisive, and would not of itself render the conveyance fraudulent. Bennett v. Union Bank, 24 Tenn. 612, 1845 Tenn. LEXIS 146 (1845); McCasland v. Carson, 38 Tenn. 117, 1858 Tenn. LEXIS 134 (Tenn. Sep. 1858); Roane v. Bank of Nashville, 38 Tenn. 526, 1858 Tenn. LEXIS 218 (Tenn. Dec. 1858); Stewart v. Cockrell, 70 Tenn. 369, 1879 Tenn. LEXIS 183 (1879); Young v. Hail, 74 Tenn. 175, 1880 Tenn. LEXIS 226 (1880); Hartman v. Allen, 77 Tenn. 657, 1882 Tenn. LEXIS 118 (1882); Reed Fertilizer Co. v. Thomas, 97 Tenn. 478, 37 S.W. 220, 1896 Tenn. LEXIS 169 (1896).

Where both the excess in value of the property over the debt is considerable, and the time of indulgence is long, the evidence of a fraudulent purpose on the face of the instrument becomes greater, and that evidence becomes more and more pregnant in proportion as the excess in value increases and the time of indulgence is prolonged. Bennett v. Union Bank, 24 Tenn. 612, 1845 Tenn. LEXIS 146 (1845); Doyle v. Smith, 41 Tenn. 15, 1860 Tenn. LEXIS 4 (1860); Hartman v. Allen, 77 Tenn. 657, 1882 Tenn. LEXIS 118 (1882).

The extension of credit or the time of closing the trust for five years cannot affect other creditors injuriously, and does not vitiate a deed of trust, where it conveys property of no greater value than the debts secured. Roane v. Bank of Nashville, 38 Tenn. 526, 1858 Tenn. LEXIS 218 (Tenn. Dec. 1858).

Excess of property, where not too excessive, and extension of time for five years, will not render a deed of trust fraudulent as against creditors not provided for; especially where the excess of property is covered by a subsequent deed of trust for other creditors before the contesting creditors filed their bills. Roane v. Bank of Nashville, 38 Tenn. 526, 1858 Tenn. LEXIS 218 (Tenn. Dec. 1858).

A stipulation for indulgence of two years before closing the trust is not unreasonable, where the value of the property embraced is not disproportionate to the debts secured, and such deed is not fraudulent in law on its face. Masson v. Tarver, 62 Tenn. 290, 1873 Tenn. LEXIS 189 (1873). See also Hartman v. Allen, 77 Tenn. 657, 1882 Tenn. LEXIS 118 (1882); Reed Fertilizer Co. v. Thomas, 97 Tenn. 478, 37 S.W. 220, 1896 Tenn. LEXIS 169 (1896).

Where in a general assignment for the benefit of creditors, conveying all of the grantor's property subject to execution, a stipulation for a delay of nearly four years and six months is made, such deed hinders and delays creditors, and is fraudulent in law, and cannot be sustained. Young v. Hail, 74 Tenn. 175, 1880 Tenn. LEXIS 226 (1880).

A deed of trust conveying land, which is all the property of the grantor that may be subjected to his debts, to secure debts of less than one-third its value, and stipulating for a delay of two and one half years before closing the trust, necessarily hinders and delays the unsecured creditors unreasonably, and is fraudulent in law. Hartman v. Allen, 77 Tenn. 657, 1882 Tenn. LEXIS 118 (1882).

53. — —Right to Extend Time of Indulgence.

A deed of trust in which indulgence is given to the debtor for one year, with liberty to extend the time, from year to year, for four years longer, by paying the debt in five yearly installments, and foreclosure to be made in default of payment of any installment, is not necessarily fraudulent. Bennett v. Union Bank, 24 Tenn. 612, 1845 Tenn. LEXIS 146 (1845); McCasland v. Carson, 38 Tenn. 117, 1858 Tenn. LEXIS 134 (Tenn. Sep. 1858); Roane v. Bank of Nashville, 38 Tenn. 526, 1858 Tenn. LEXIS 218 (Tenn. Dec. 1858); Stewart v. Cockrell, 70 Tenn. 369, 1879 Tenn. LEXIS 183 (1879).

Extension of time for five years, where the excess of property is not too great, will not render a deed of trust fraudulent as against creditors not provided for; especially where the excess of property is covered by subsequent deed of trust for other creditors made before the contesting creditors filed their bills. Roane v. Bank of Nashville, 38 Tenn. 526, 1858 Tenn. LEXIS 218 (Tenn. Dec. 1858).

54. —Exempt Property.

55. — —Disposition.

A disposition of property which creditors cannot subject to the payment of their debts, whatever may be the intent, is not fraudulent and void. Planters' Bank v. Henderson, 23 Tenn. 75, 1843 Tenn. LEXIS 21 (1843); Fitzgerald v. Vestal, 36 Tenn. 258, 1856 Tenn. LEXIS 92 (1856); Leslie v. Joyner, 39 Tenn. 514, 1859 Tenn. LEXIS 264 (Tenn. Apr. 1859); Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871); McCord v. Moore, 52 Tenn. 734, 1871 Tenn. LEXIS 304 (1871); Wagner v. Smith, 81 Tenn. 560, 1884 Tenn. LEXIS 71 (1884); Harvey v. Harrison, 89 Tenn. 470, 14 S.W. 1083, 1890 Tenn. LEXIS 73 (1891); Maples v. Rawlins, 105 Tenn. 457, 58 S.W. 644, 1900 Tenn. LEXIS 92, 80 Am. St. Rep. 903 (1900).

The gift of exempt personalty to take effect at the donor's death, when the exemption ceases to exist, the sole object of which is to defraud the donor's creditors, may be set aside at the suit of the administrator of the deceased donor for the benefit of creditors. Martin v. Crosby, 79 Tenn. 198, 1883 Tenn. LEXIS 41 (1883).

56. — —Converting Property or Funds into Exempt Property.

A debtor cannot convert property which is subject to execution into a homestead and hold same as exempt from his debts to which the converted property was subject; however, it seems if he should buy a homestead with money which he has on hand, that he might hold same as against his creditors. Hollins, Burton & Co. v. Webb, 2 Shan. 581 (1877).

Debtor's prebankruptcy purchase of a single premium insurance policy and transfer to family members of a remainder interest in real property were avoidable by Chapter 7 trustee. Gigandet v. Covington, 171 B.R. 294, 1994 Bankr. LEXIS 1296 (Bankr. M.D. Tenn. 1994).

Trustee had not established that debtor's decision to take an annuity and to establish an IRA shortly before debtor filed for bankruptcy was a fraudulent conveyance that needed to be set aside because debtor indicated that she made the transfers to provide some protection for her children; reviewing the evidence against the badges of fraud supported the conclusion that no fraudulent conveyance occurred. In re Blackburn, — B.R. —, 2007 Bankr. LEXIS 4640 (Bankr. M.D. Tenn. May 1, 2007).

57. — —Valid Reservation of Exempt Property in Conveyance to Secure Debts.

Where the property conveyed and that reserved as exempt is not separated, there should be such a description of each in the deed that anyone can separate the same from the description given, or the separation should be made in fact immediately after the execution of the deed, and before any execution or attachment is levied on the same. Sugg v. Tillman, 32 Tenn. 208, 1852 Tenn. LEXIS 52 (1852); Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871); Overton v. John H. Holinshade & Co., 52 Tenn. 683, 1871 Tenn. LEXIS 295 (1871); McCord v. Moore, 52 Tenn. 734, 1871 Tenn. LEXIS 304 (1871).

If the exempt property reserved, whether consumable in its use or not, is so described as to be distinguishable from the property of like character not exempt, no inference of fraud will arise. Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871).

In the absence of fraud, the exception or reservation of the exempt property, without separation from the other property, does not affect the validity of the deed for fraud. Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871).

The grantor's reservation or exception of his property exempt from execution from the operation of his conveyance of property to secure the payment of debts does not render the deed fraudulent in law. Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871); McCord v. Moore, 52 Tenn. 734, 1871 Tenn. LEXIS 304 (1871). See Overton v. John H. Holinshade & Co., 52 Tenn. 683, 1871 Tenn. LEXIS 295 (1871).

A conveyance of land, subject to the grantor's homestead exemption allowed by law, to secure the payment of debts, is not fraudulent on its face. Carter Bros. & Co. v. Hicks, 70 Tenn. 511, 1879 Tenn. LEXIS 189 (1879); Puckett v. Richardson, 74 Tenn. 49, 1880 Tenn. LEXIS 210 (1880).

58. — —Fraudulent Reservation of Exempt Property in Conveyance to Secure Debts.

A deed of trust conveying all the debtor's property with the reservation of the exemptions allowed by law, without further description of them, and without separation in fact from the property conveyed, is fraudulent. Sugg v. Tillman, 32 Tenn. 208, 1852 Tenn. LEXIS 52 (1852); Overton v. John H. Holinshade & Co., 52 Tenn. 683, 1871 Tenn. LEXIS 295 (1871); Thurman v. Jenkins, 61 Tenn. 426, 1873 Tenn. LEXIS 199 (1873); Williamson v. Steele, 71 Tenn. 527, 1879 Tenn. LEXIS 111, 31 Am. Rep. 652 (1879); Puckett v. Richardson, 74 Tenn. 49, 1880 Tenn. LEXIS 210 (1880).

Where the object of the grantor in a deed of trust is to use the exemption laws as a mask for protecting his property subject to execution, by so mingling the exempt and nonexempt property as to hinder and embarrass his creditors, the deed is fraudulent. Sugg v. Tillman, 32 Tenn. 208, 1852 Tenn. LEXIS 52 (1852).

59. —Revesting Property in Vendor.

Where the fraudulent vendee relinquishes all claim to the property, and declares that it belongs to the vendor and not to him, there is nothing to resist vendor's claim as the rightful owner; and certainly a stranger to that contract, who may have possessed himself of the property, cannot resist the owner's title, on the ground that such property had once been the subject of a fraudulent contract. Walker v. McConnico, 18 Tenn. 228, 1836 Tenn. LEXIS 126 (1836); Sharp v. Caldwell, 26 Tenn. 415, 1846 Tenn. LEXIS 146 (1846); Trafford v. Austin, 3 Cooper's Tenn. Ch. 492 (1877).

To obliterate the effect of the fraud in a sale or conveyance made to defeat creditors, and to revest the fraudulently conveyed property in the original owner, it must be actually surrendered and reconveyed; and a promise or expressed willingness to surrender the property is not sufficient. Battle v. Street, 85 Tenn. 282, 2 S.W. 384, 1886 Tenn. LEXIS 43 (1886).

60. —New Conveyance After Fraudulent Conveyance — Effect.

A conveyance, without consideration, and tainted with fraud, cannot be purified by the payment of an honest consideration, accompanied by a new conveyance, nor is such conveyance capable of confirmation to the prejudice of creditors, though the vendor is bound by it. Jones v. Read, 20 Tenn. 335, 1839 Tenn. LEXIS 58 (1839); Jacobi v. Schloss, 47 Tenn. 385, 1870 Tenn. LEXIS 159 (1870).

61. —Evidence.

Evidence of transaction with family members held sufficient to constitute fraud. Weaver v. Nelms, 750 S.W.2d 158, 1987 Tenn. App. LEXIS 3118 (Tenn. Ct. App. 1987).

62. Rights and Liabilities of Grantee, Vendee or Purchaser.

A bona fide purchaser under a trust deed gets a good title to the property so purchased, whether the deed was fraudulent or not. Richards v. Ewing, 30 Tenn. 327, 1850 Tenn. LEXIS 126 (1850).

63. —Nonfraudulent Transferee of Fraudulent Debtor.

A sale and conveyance for a fair price by a debtor, though intentionally fraudulent upon his part, is not void as against his creditors, where the vendee and conveyee did not participate in the selling debtor's fraud. Peck v. Carmichael, 17 Tenn. 325, 1836 Tenn. LEXIS 55 (1836); Wiley v. Lashlee, 27 Tenn. 717, 1848 Tenn. LEXIS 30 (1848); C. H. Mills & Co. v. Haines, 40 Tenn. 332, 1859 Tenn. LEXIS 91 (1859); Keith v. Proctor, 67 Tenn. 189, 1874 Tenn. LEXIS 352 (1874). See Trotter v. Watson, 25 Tenn. 509, 1846 Tenn. LEXIS 31 (1846); Gage v. Epperson, 39 Tenn. 669, 1859 Tenn. LEXIS 298 (Tenn. Apr. 1859); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Jones v. Cullen, 100 Tenn. 1, 42 S.W. 873, 1897 Tenn. LEXIS 86 (1897).

In a contest between the general unsecured creditors and the creditors secured in a deed of trust, fraud on the part of the maker, or of the maker and trustee combined, will not deprive the beneficiaries of the security or preference provided for them in the conveyance, unless they have participated in the fraud. Trotter v. Watson, 25 Tenn. 509, 1846 Tenn. LEXIS 31 (1846); C. H. Mills & Co. v. Haines, 40 Tenn. 332, 1859 Tenn. LEXIS 91 (1859); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); A. & J. Troustine & Co. v. Lask, 63 Tenn. 162, 1874 Tenn. LEXIS 222 (1874); Keith v. Proctor, 67 Tenn. 189, 1874 Tenn. LEXIS 352 (1874); Jones v. Cullen, 100 Tenn. 1, 42 S.W. 873, 1897 Tenn. LEXIS 86 (1897).

No fraud can be attributed to a creditor for purchasing goods from his embarrassed debtor; and he is not liable to the debtor's other creditors, on the ground of participating in the debtor's fraud by aiding him where, with a knowledge that the debtor was much embarrassed, and probably was contemplating a fraudulent disposition of his property, but without intending to aid him in consummating his fraudulent purpose, or to hinder and defeat his creditors, he bought a stock of goods from the debtor, especially where the money thus paid by the purchasing creditor was used by the selling debtor in paying some of his other creditors. A. & J. Troustine & Co. v. Lask, 63 Tenn. 162, 1874 Tenn. LEXIS 222 (1874).

Where a debtor's deed conveyed land to his creditor, with the intent in fact, but not expressed in the deed, to secure a debt due from the grantor to the grantee, and recited a false consideration, not originally or primarily participated in by the grantee, and unknown to him until the deed was afterwards sent to him, the legal title to the land thus vested in him may be retained, as against the grantor and his other creditors, to secure the payment of his debt against the grantor. Keith v. Proctor, 67 Tenn. 189, 1874 Tenn. LEXIS 352 (1874).

A deed of trust to secure a debt for trust funds embezzled or appropriated by fraudulent breach of trust is not rendered fraudulent as against the other creditors of the maker, upon the ground that he executed it in the hope and expectation that he would thereby avoid a prosecution where the secured creditor did nothing to excite such hope, and the deed was made and accepted by him without any knowledge of the existence of such hope and expectation on the part of the maker, or without any agreement, express or implied, to forbear or suppress the prosecution. Jones v. Cullen, 100 Tenn. 1, 42 S.W. 873, 1897 Tenn. LEXIS 86 (1897).

Where the husband fraudulently transferred to his wife certificates of stock in a corporation, but she did not participate in the fraud, and, in consideration for such transfer, she joined with her husband in the assignment of a life policy on her husband in which she was the sole and irrevocable beneficiary, and the notes, after the husband's death, were satisfied with the proceeds of the policy, the wife was entitled to credit for such payments in a suit to compel her to account for the value of such certificates of stock. Elledge v. Sumpter, 140 Tenn. 11, 203 S.W. 346, 1917 Tenn. LEXIS 141 (1918).

When personal property pledged to secure the payment of a valid debt is fraudulently transferred by the owner, his creditors are not, upon setting aside the transfer, entitled to recover from the nonfraudulent transferee the full value of the pledged property, but only its value after deducting the amount secured by the pledge. Elledge v. Sumpter, 140 Tenn. 11, 203 S.W. 346, 1917 Tenn. LEXIS 141 (1918).

Where a nonfraudulent transferee pays unsecured creditors of the transferor, after notice that the transfer was a fraud on such creditors, he is entitled to be subrogated to the rights of such creditors on a pro rata basis. Elledge v. Sumpter, 140 Tenn. 11, 203 S.W. 346, 1917 Tenn. LEXIS 141 (1918).

64. —Purchaser from Fraudulent Grantor and Grantee.

Where A conveyed land to B to avoid his debts, and afterwards sold the same to C, informing him of the fact, and agreeing to procure a deed from B, who accordingly executed a deed, but made a mistake in giving the boundaries, so as to leave out of the conveyance half of the lot or more, including the buildings thereon, which gave the land its chief value; and afterwards A conveyed the part so omitted from the deed to D, and D conveyed to E; whereupon C filed his bill for the correction of the mistake and the reformation of the deed, it was held that he was entitled to the relief sought, or at least that D and E could interpose no valid objection to such relief. Parish v. Scott, 57 Tenn. 438, 1873 Tenn. LEXIS 232 (1873).

65. —Purchasers from Fraudulent Grantee or Vendee.

An innocent purchaser, for a valuable consideration, without notice, from the fraudulent vendee of personalty, will be protected against the creditors of the fraudulent vendor. Williams v. Lowe, 23 Tenn. 62, 1843 Tenn. LEXIS 16 (1843); Simpson v. Simpson, 26 Tenn. 275, 1846 Tenn. LEXIS 124 (1846), questioned, Daly v. Sumpter Drug Co., 127 Tenn. 412, 155 S.W. 167, 1912 Tenn. LEXIS 39 (1912); Lazell v. Powell, 1 Shan. 132 (1859).

Where one who acquired property by fraud sells the same to an innocent purchaser, without knowledge or notice of the fraud, for a full consideration, the title of such bona fide purchaser cannot be defeated. Arendale v. Samuel D. Morgan & Co., 37 Tenn. 703, 1857 Tenn. LEXIS 124 (1857); Goff v. Gott, 37 Tenn. 562, 1858 Tenn. LEXIS 62 (1858); Gage v. Epperson, 39 Tenn. 669, 1859 Tenn. LEXIS 298 (Tenn. Apr. 1859); Parham v. Riley, 44 Tenn. 5, 1867 Tenn. LEXIS 5 (1867); Hawkins v. Davis, 64 Tenn. 698, 1875 Tenn. LEXIS 163 (1875); Biggs v. Johnson, 1 Shan. 622 (Tenn. 1876); Atlanta Guano Co. v. Hunt, 100 Tenn. 89, 42 S.W. 482, 1897 Tenn. LEXIS 92 (1897); National Bank of Commerce v. Chatfield, Woods & Co., 118 Tenn. 481, 101 S.W. 765, 1907 Tenn. LEXIS 58, 10 L.R.A. (n.s.) 801 (1907).

The purchaser of goods, with notice that his vendor had procured them by fraud, or under circumstances failing to show himself to be a bona fide purchaser, for a valuable consideration paid for them, is liable therefor to the original owner, upon the ground that his reception of the goods to his own use operated in law as a conversion. Arendale v. Samuel D. Morgan & Co., 37 Tenn. 703, 1857 Tenn. LEXIS 124 (1857); Gage v. Epperson, 39 Tenn. 669, 1859 Tenn. LEXIS 298 (Tenn. Apr. 1859); Dillard & C. Co. v. Smith, 105 Tenn. 372, 59 S.W. 1010, 1900 Tenn. LEXIS 81 (1900).

Purchaser with notice from one procuring realty by fraud is liable to the original owner as for a conversion. Anderson v. Ammonett, 77 Tenn. 1, 1882 Tenn. LEXIS 7 (1882); Williamson v. Williams, 79 Tenn. 355, 1883 Tenn. LEXIS 74 (1883).

The burden rests upon a second purchaser to show that he is an innocent purchaser. National Bank of Commerce v. Chatfield, Woods & Co., 118 Tenn. 481, 101 S.W. 765, 1907 Tenn. LEXIS 58, 10 L.R.A. (n.s.) 801 (1907).

66. —Voluntary Conveyance to Defraud — Effect Against Subsequent Purchasers.

The statute may operate in favor of a person having a legal title, so as to enable him to avoid a prior conveyance, in a court of law, on the ground of fraud, as the statute makes such prior conveyance absolutely void; but the operation of the statute can never create a legal conveyance. Stinson's Lessee v. Russell, 2 Tenn. 40, 1809 Tenn. LEXIS 3 (1809); Hopkins v. Webb, 28 Tenn. 519, 1848 Tenn. LEXIS 115 (1848).

A subsequent purchaser seeking to set aside the previous voluntary deed as fraudulent must be a bona fide purchaser for a good or valuable consideration. Cains v. Jones, 13 Tenn. 249, 1833 Tenn. LEXIS 155 (1833).

The heirs of the fraudulent grantee of land, who never took possession, cannot recover the land from a subsequent purchaser, without actual notice of the first deed from the fraudulent grantor in possession, although the prior deed had been registered, and was fraudulent only as to creditors. Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

67. —Fraudulent Grantee — Rights Against Third Persons.

In all sales and purchases of personalty made with actual intent to defraud, indemnity or reimbursement is not the policy of the law but the rule does not apply where there was merely fraud in law. Lazell v. Powell, 1 Shan. 132 (1859).

A purchaser of a stock of goods for an inadequate consideration paid, with the knowledge that the seller is largely indebted and in failing circumstances, and that his creditors are about to attach his property, is guilty of aiding the seller in perpetrating a fraud on his creditors, and acquires no title as against the seller's creditors. Carny, Howe & Co. v. Palmer, 42 Tenn. 35, 1865 Tenn. LEXIS 9 (1865).

The fraudulent grantee cannot, in chancery, recover the land from a third person who has possession of it; and, in such case, the defendant may allege the fraud in defense, and, by an answer filed as a crossbill, have a discovery, from the complaint in the original bill, of the facts constituting fraud. Swan v. Castleman, 63 Tenn. 257, 1874 Tenn. LEXIS 240 (1874); Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

68. —Fraudulent Grantee or Subgrantee — Personal Liability.

Where the fraudulent vendee of personalty has so concealed, sold, or disposed of the property that it cannot be reached or identified, the creditors of the fraudulent vendor may, in equity, recover the proceeds or value thereof as against the fraudulent vendee. Lazell v. Powell, 1 Shan. 132 (1859); Chalfant, Cox & Co. v. Grant, 71 Tenn. 118, 1879 Tenn. LEXIS 44 (1879); Williamson v. Williams, 79 Tenn. 355, 1883 Tenn. LEXIS 74 (1883); Solinsky v. Lincoln Sav. Bank, 85 Tenn. 368, 4 S.W. 836, 1886 Tenn. LEXIS 58 (1887); German Bank v. Haller, 101 Tenn. 83, 52 S.W. 807, 1898 Tenn. LEXIS 33 (1898); Dillard & C. Co. v. Smith, 105 Tenn. 372, 59 S.W. 1010, 1900 Tenn. LEXIS 81 (1900).

A creditor of a fraudulent donor or grantor may sue the fraudulent donee or grantee and recover the value or proceeds of the property fraudulently given or granted to the extent of his debt. German Bank v. Haller, 101 Tenn. 83, 52 S.W. 807, 1898 Tenn. LEXIS 33 (1898); Dillard & C. Co. v. Smith, 105 Tenn. 372, 59 S.W. 1010, 1900 Tenn. LEXIS 81 (1900).

A fraudulent grantee and a purchaser from him with notice may both be held personally liable, at the same time and concurrently, to a creditor of the fraudulent grantor to the extent of his debt, though there can be but one satisfaction. Dillard & C. Co. v. Smith, 105 Tenn. 372, 59 S.W. 1010, 1900 Tenn. LEXIS 81 (1900).

69. —Restitution Note of Grantee — Liability Thereon.

If property was conveyed to the defendant to prevent the grantor's creditors from reaching it, the defendant could not escape liability on a note executed by him to the grantor by way of turning back to the grantor part of the proceeds of the lands, though a purchaser of the note knew of the fraudulent transaction, as the note was not in furtherance of the fraud, but in disaffirmance. Peoples Bank v. True, 144 Tenn. 171, 231 S.W. 541, 1920 Tenn. LEXIS 69 (1921).

70. Creditors' Rights.

71. —Who Are Creditors.

72. — —Litigants as Creditors.

One who has been slandered, and is prosecuting a suit therefor, is a creditor. Farnsworth v. Bell, 37 Tenn. 531, 1858 Tenn. LEXIS 56 (1858).

A creditor is a person who has a just demand or right, recognized by law, to recover for any demand in the nature of a debt, or for an injury to his person or property, in a pending or even expected and contemplated suit; and a plaintiff in a pending action for slander is also a creditor in the sense of this statute. Farnsworth v. Bell, 37 Tenn. 531, 1858 Tenn. LEXIS 56 (1858); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Parker v. Savage, 74 Tenn. 406, 1880 Tenn. LEXIS 267 (1880); Bryan v. Norfolk & W. R. Co., 119 Tenn. 349, 104 S.W. 523, 1907 Tenn. LEXIS 10 (1907).

One entitled to a right of action for damages for a tort is not a creditor, in the sense of this statute, before the institution of suit therefor. Sanders v. Logue, 88 Tenn. 355, 12 S.W. 722, 1889 Tenn. LEXIS 57 (1890); Rosen v. Levy, 120 Tenn. 642, 113 S.W. 1042, 1908 Tenn. LEXIS 49 (1908); Oliphant v. Moore, 155 Tenn. 359, 293 S.W. 541, 1926 Tenn. LEXIS 54 (1926).

A plaintiff in a pending action for tort, brought to recover damages for a tort committed against him, is an existing creditor of the defendant, and the defendant's conveyance of property, fraudulent in fact or in law, or voluntarily made, without the retention of sufficient property to pay his debts, will be set aside, at the instance of such creditor, after the obtainment of his judgment. Rosen v. Levy, 120 Tenn. 642, 113 S.W. 1042, 1908 Tenn. LEXIS 49 (1908).

73. — —Sureties and Accommodation Endorsers.

A surety or accommodation endorser, before his payment of the debt, or loss, or the rendition of a judgment against him, is such a creditor that he may maintain a bill in chancery to set aside fraudulent conveyances made by his principal, and subject the property, or its proceeds, in the hands of anyone who is not a bona fide purchaser, without notice, but the creditor, the principal debtor, and the fraudulent conveyee must all be made parties to the suit. Greene v. Starnes, 48 Tenn. 582, 1870 Tenn. LEXIS 117 (1870); Saylors v. Saylors, 50 Tenn. 525, 1871 Tenn. LEXIS 109 (1871); Miller v. Speed, 56 Tenn. 196, 1872 Tenn. LEXIS 128 (1872); McBee v. Bearden, 75 Tenn. 731, 1881 Tenn. LEXIS 180 (1881); Oneal v. Smith, 78 Tenn. 340, 1882 Tenn. LEXIS 188 (1882); Howell v. Thompson, 95 Tenn. 396, 32 S.W. 309, 1895 Tenn. LEXIS 107 (1895).

74. — —Wives Claiming Alimony.

The claims of the husband's bona fide creditors, or liabilities properly incurred on his behalf, existing prior to the application for divorce, must prevail over the rights of a wife for alimony; and such creditors who assert their rights by suit before her claim for alimony is ripened into a decree, or within proper time thereafter, have rights prior to hers where they are not parties to the divorce suit. McGhee v. McGhee, 34 Tenn. 221, 1854 Tenn. LEXIS 37 (1854); Greene v. Starnes, 48 Tenn. 582, 1870 Tenn. LEXIS 117 (1870); Smith v. Johnson, 49 Tenn. 225, 1870 Tenn. LEXIS 220 (1870); Wilhoit v. Castell, 62 Tenn. 419, 1874 Tenn. LEXIS 72 (1874); Aiken v. Suttle, 72 Tenn. 103, 1879 Tenn. LEXIS 11 (1879); White v. Bates, 89 Tenn. 570, 15 S.W. 651, 1890 Tenn. LEXIS 80 (1891). See Ames v. Norman, 36 Tenn. 683, 1857 Tenn. LEXIS 70 (1857), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974).

Fraudulent conveyances or assignments made to defeat alimony are void as to the wife of the maker and will not even stand for the purchase money advanced on the same by the grantee, nor for advances he may have made, or responsibilities he may have entered into, on account of them. Brooks v. Caughran, 40 Tenn. 464, 1859 Tenn. LEXIS 131 (1859); Boils v. Boils, 41 Tenn. 284, 1860 Tenn. LEXIS 64 (1860); Nix v. Nix, 57 Tenn. 546, 1873 Tenn. LEXIS 257 (1873); Wilhoit v. Castell, 62 Tenn. 419, 1874 Tenn. LEXIS 72 (1874); Taylor v. Taylor, 6 Tenn. Civ. App. (6 Higgins) 268 (1915).

A wife suing for divorce and alimony to which she is entitled is a creditor; and the husband's conveyance of his land thereafter made to a purchaser with actual notice of her bill will, upon her amended bill, be set aside, and the land subjected to her decree for alimony. Boils v. Boils, 41 Tenn. 284, 1860 Tenn. LEXIS 64 (1860); Taylor v. Taylor, 6 Tenn. Civ. App. (6 Higgins) 268 (1915).

75. —Existing Creditors.

76. — —Voluntary Conveyance in Fraud of Existing Creditors.

Where the grantee under a voluntary conveyance duly registered, with a secret agreement to reconvey to the grantor, obtains credit on the faith of his apparent ownership being real, his voluntary reconveyance, in accordance with such agreement, is fraudulent in law, if not in fact, as against his such existing creditors. Susong v. Williams, 48 Tenn. 625, 1870 Tenn. LEXIS 124 (1870); Welcker v. Price, 70 Tenn. 666, 1879 Tenn. LEXIS 217 (1879); Trezevant v. Terrell, 96 Tenn. 528, 33 S.W. 109, 1896 Tenn. LEXIS 2 (1896).

Land purchased and paid for by the husband who, for the purpose of defeating his creditors, fraudulently procures the same to be conveyed to his wife, will be subjected to the payment of his debts. Brooks v. Gibson, 3 Shan. 760 (1877); Yost v. Hudiburg, 70 Tenn. 627, 1879 Tenn. LEXIS 208 (1879).

A voluntary registered deed of conveyance by an insolvent husband to his wife, attempting to convey to her his estate in expectancy in his father's estate, is fraudulent in law, whether so intended or not, as against his creditors, whose debts were in existence, both at the date of the deed and at the time the grantor, by descent, became seized of the title to the property sought to be conveyed. Read v. Mosby, 87 Tenn. 759, 11 S.W. 940, 1889 Tenn. LEXIS 25, 5 L.R.A. 122 (1889); Gore v. Howard, 94 Tenn. 577, 30 S.W. 730, 1894 Tenn. LEXIS 71 (1895).

77. — —Voluntary Conveyance Raising Presumption of Fraud.

A voluntary conveyance, made by person who is at the time heavily indebted, and of such a proportion of his property that it must necessarily operate to delay or defeat his existing creditors, is to be presumed fraudulent as to them. Smith v. Greer, 22 Tenn. 118, 1842 Tenn. LEXIS 41 (1842); Burkey v. Self, 36 Tenn. 121, 1856 Tenn. LEXIS 67 (1856); Churchill v. Wells, 47 Tenn. 364, 1870 Tenn. LEXIS 156 (1870); Ramsey v. Quillen, 73 Tenn. 184, 1880 Tenn. LEXIS 109 (1880); Spence v. Dunlap, 74 Tenn. 457, 1880 Tenn. LEXIS 273 (1880).

A voluntary conveyance made by a husband to his wife and children is not void per se as to his creditors, but it will be presumed to be fraudulent as against his existing creditors, which presumption may be rebutted by showing the reservation or retention of sufficient property or assets to pay all his existing debts. Ricketts v. McCully, 54 Tenn. 712, 1872 Tenn. LEXIS 108 (1872); Perkins v. Perkins, 1 Cooper's Tenn. Ch. 537 (1874); Cheatham v. Hess, 2 Cooper's Tenn. Ch. 763 (1877); Yost v. Hudiburg, 70 Tenn. 627, 1879 Tenn. LEXIS 208 (1879); Welcker v. Price, 70 Tenn. 666, 1879 Tenn. LEXIS 217 (1879); Spence v. Dunlap, 74 Tenn. 457, 1880 Tenn. LEXIS 273 (1880); Lippman v. Boals, 84 Tenn. 283, 1886 Tenn. LEXIS 97 (1886); Sanders v. Logue, 88 Tenn. 355, 12 S.W. 722, 1889 Tenn. LEXIS 57 (1890); Trezevant v. Terrell, 96 Tenn. 528, 33 S.W. 109, 1896 Tenn. LEXIS 2 (1896); Crane & Co. v. Hall, 141 Tenn. 556, 213 S.W. 414, 1919 Tenn. LEXIS 10 (1919).

As against existing creditors, a voluntary conveyance or settlement will be presumed to be fraudulent. Nicholas v. Ward, 38 Tenn. 323, 1858 Tenn. LEXIS 181, 73 Am. Dec. 177 (1858); Susong v. Williams, 48 Tenn. 625, 1870 Tenn. LEXIS 124 (1870); Cheatham v. Hess, 2 Cooper's Tenn. Ch. 763 (1877); Welcker v. Price, 70 Tenn. 666, 1879 Tenn. LEXIS 217 (1879); Spence v. Dunlap, 74 Tenn. 457, 1880 Tenn. LEXIS 273 (1880); Lippman v. Boals, 84 Tenn. 283, 1886 Tenn. LEXIS 97 (1886); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

A voluntary conveyance was prima facie fraudulent in fact against existing creditors under this section before the passage of the Uniform Fraudulent Conveyance Act. Bowery v. Vines, 178 Tenn. 98, 156 S.W.2d 395, 1941 Tenn. LEXIS 36 (1941).

As to existing creditors, a voluntary transfer is presumed fraudulent and is avoidable unless the debtor proves that his financial condition was such that the transfer did not have the effect of hindering or delaying creditors; a subsequent creditor does not have the benefit of this presumption unless it is relying on the rights of an existing creditor. In re Turner, 78 B.R. 166, 1987 Bankr. LEXIS 1521 (Bankr. E.D. Tenn. 1987).

78. — —Existing Creditor with Subsequent Debt.

A voluntary conveyance made to defraud subsequent creditors, though registered, is void as to such creditors, if they relied on the property, and had no actual knowledge or notice of the conveyance, and had no cause to suspect any fraudulent disposition of the property, or had the positive assurance of the debtor, given shortly before the creation of the subsequent debts, that all his property was in his own name and should so remain during his life, and be subject to his debts, especially where such creditors were existing creditors at the time of such conveyance and resided and did business in another state. Churchill v. Wells, 47 Tenn. 364, 1870 Tenn. LEXIS 156 (1870); Levering v. Norvell, 68 Tenn. 176, 1877 Tenn. LEXIS 12 (1877).

A voluntary conveyance, made by one heavily indebted at the time, and disposing of such a proportion of his property that it must necessarily operate to delay or defeat his creditors, is fraudulent as to debts subsequently created with existing creditors, though the existing debts are paid, and though the deed is duly registered, where the creditors, residing and doing business in another state, have no actual knowledge or notice of it, and have no cause to suspect any fraudulent disposition of the property, or have the positive assurances of the debtor, given shortly before the creation of the subsequent debts, that all his property was in his own name and should so remain during his life, and be subject to his debts. Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Trezevant v. Terrell, 96 Tenn. 528, 33 S.W. 109, 1896 Tenn. LEXIS 2 (1896).

An existing creditor does not lose his right against a voluntary conveyance for an existing debt by taking notes for it and a subsequently created debt bearing date after the conveyance, for if it is fraudulent as to the existing debt, it is likewise fraudulent as to the subsequent debt. Trezevant v. Terrell, 96 Tenn. 528, 33 S.W. 109, 1896 Tenn. LEXIS 2 (1896).

Existing creditors whose debts were paid off, and who subsequently contracted other debts, are subsequent creditors in a bill to set aside a voluntary conveyance. Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

79. —Subsequent Creditors.

A voluntary conveyance will not be presumed fraudulent as to subsequent creditors, but fraud in fact must be established; and one who gives credit to the grantor of a duly registered voluntary conveyance six months after its registration cannot claim that he relied on the security of the property conveyed. Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

Although subsequent creditors may impeach a voluntary conveyance by showing antecedent debts to afford reasonable evidence of fraudulent intent, the mere existence of debts at the time of such conveyance is insufficient for this purpose, if amply sufficient property was retained to meet the indebtedness. Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

Subsequent creditor had the burden of proving debtor's financial condition or prospects. In re Turner, 78 B.R. 166, 1987 Bankr. LEXIS 1521 (Bankr. E.D. Tenn. 1987).

80. — —Voluntary Conveyance to Defraud.

As to subsequent creditors, fraud in fact must be established in order to set aside a voluntary conveyance or settlement. Nicholas v. Ward, 38 Tenn. 323, 1858 Tenn. LEXIS 181, 73 Am. Dec. 177 (1858); Susong v. Williams, 48 Tenn. 625, 1870 Tenn. LEXIS 124 (1870); Cheatham v. Hess, 2 Cooper's Tenn. Ch. 763 (1877); Welcker v. Price, 70 Tenn. 666, 1879 Tenn. LEXIS 217 (1879); Spence v. Dunlap, 74 Tenn. 457, 1880 Tenn. LEXIS 273 (1880); Lippman v. Boals, 84 Tenn. 283, 1886 Tenn. LEXIS 97 (1886); Nelson v. Kinney, 93 Tenn. 428, 25 S.W. 100, 1893 Tenn. LEXIS 70 (1893); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

A voluntary deed, made to defraud a subsequent purchaser for value, is void as against him, with or without registration, and with or without notice. Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

Where the complainant knew of a fraudulent conveyance by defendant Long to his codefendant True to defraud Long's creditors, and assisted Long in the transaction, the complainant was not entitled as judgment creditor of Long, to reach funds owing from True to Long under the transaction and to subject those funds to complainant's judgment against Long, especially where complainant's judgment was rendered subsequent to the conveyance, and was founded on notes of Long acquired after such fraudulent conveyance. Long v. True, 149 Tenn. 673, 261 S.W. 669, 1923 Tenn. LEXIS 124 (1923).

If, upon the eve of an indebtedness about to be increased, and with a view thereto, and without the knowledge of the creditor, the debtor makes a voluntary conveyance of property, upon which he knows his contemplated creditor relies or has a right to rely, this is an actual fraud, producing the same results both upon existing and subsequent creditors; and such conveyance is not relieved from its fraudulent character from the fact that it has been registered, if the creditor has no actual notice, and the conveyance, without his negligence, operates as a surprise upon him. Hartnett v. Doyle, 16 Tenn. App. 302, 64 S.W.2d 227, 1932 Tenn. App. LEXIS 6 (1932).

81. — —Voluntary Conveyance Fraudulent as to Existing Creditors.

If a voluntary conveyance is fraudulent in fact as to existing creditors, it will, in general, be held void as to subsequent creditors; but if the deed was made under circumstances which repel any presumption of fraudulent intention, the subsequent creditors must establish the fraud in fact. Young v. Pate, 12 Tenn. 164, 1833 Tenn. LEXIS 35 (1833); Nicholas v. Ward, 38 Tenn. 323, 1858 Tenn. LEXIS 181, 73 Am. Dec. 177 (1858); Spence v. Dunlap, 74 Tenn. 457, 1880 Tenn. LEXIS 273 (1880); Trezevant v. Terrell, 96 Tenn. 528, 33 S.W. 109, 1896 Tenn. LEXIS 2 (1896); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

Although the maker may not have been indebted at the time of making the voluntary gift or conveyance, if it was made with any design of fraud or collusion, or injury to other persons in the future, it would be void; and it is likewise true that, if the conveyance is made intentionally to defraud existing creditors, it will, in general, be held void as to subsequent creditors. Nicholas v. Ward, 38 Tenn. 323, 1858 Tenn. LEXIS 181, 73 Am. Dec. 177 (1858).

The question whether a voluntary conveyance made by a husband to his wife can be set aside at the suit of subsequent creditors, upon the ground that the husband was, at the time of the conveyance, in debt to existing creditors who remained unpaid, was reserved. Nelson v. Kinney, 93 Tenn. 428, 25 S.W. 100, 1893 Tenn. LEXIS 70 (1893).

A subsequent purchaser, without actual notice of a prior registered voluntary deed made with intent to defraud existing creditors, is not protected as an innocent purchaser, and cannot, even as against the volunteer, obtain affirmative relief setting aside such conveyance. Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

A voluntary conveyance is valid as to a subsequent creditor who had actual or constructive notice of the conveyance when the debt was contracted, and no actual fraud was practiced upon him, although existing creditors remain unpaid, and the conveyance is fraudulent as to them. Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

82. — —Voluntary Conveyance Without Fraud.

A duly registered voluntary conveyance, made by a person not indebted at the time, in favor of his wife, children, relative, or even a stranger, cannot be impeached by subsequent creditors or purchasers upon the mere ground of its being voluntary, unless the intent to defraud them affirmatively appears. Hester v. Wilkinson, 25 Tenn. 215, 1845 Tenn. LEXIS 64, 44 Am. Dec. 303 (1845); Martin v. Olliver, 28 Tenn. 561, 1848 Tenn. LEXIS 123 (1848); Nicholas v. Ward, 38 Tenn. 323, 1858 Tenn. LEXIS 181, 73 Am. Dec. 177 (1858); Churchill v. Wells, 47 Tenn. 364, 1870 Tenn. LEXIS 156 (1870); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Ricketts v. McCully, 54 Tenn. 712, 1872 Tenn. LEXIS 108 (1872); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897); Rosen v. Levy, 120 Tenn. 642, 113 S.W. 1042, 1908 Tenn. LEXIS 49 (1908).

A duly registered voluntary conveyance cannot be impeached by subsequent creditors, when not fraudulent as to existing creditors, and not made with a view to defraud subsequent creditors; for, in such case, registration is constructive notice affecting subsequent creditors. Martin v. Olliver, 28 Tenn. 561, 1848 Tenn. LEXIS 123 (1848); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); White v. Bettis, 56 Tenn. 645, 1872 Tenn. LEXIS 184 (1872); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

A voluntary conveyance, duly registered before the creation of the debt, in the absence of clear and satisfactory proof, aliunde, of an actual intent to defraud subsequent creditors, is not fraudulent or void as to subsequent creditors who had not previously extended credit to the debtor, whether they had actual notice or not of the conveyance. Martin v. Olliver, 28 Tenn. 561, 1848 Tenn. LEXIS 123 (1848); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); White v. Bettis, 56 Tenn. 645, 1872 Tenn. LEXIS 184 (1872); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

Subsequent creditors are conclusively presumed to have had notice of a registered voluntary conveyance, where the credit was not given upon the faith of the property conveyed. White v. Bettis, 56 Tenn. 645, 1872 Tenn. LEXIS 184 (1872); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

A duly registered voluntary conveyance is valid as to a subsequent creditor who had notice, actual or constructive, of the conveyance at the time the debt was contracted, and no actual fraud was practiced on him, although existing creditors remain unpaid, and the conveyance is fraudulent as to them. Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

83. — —Unregistered Deeds.

An unregistered voluntary conveyance will be held to be fraudulent as against a subsequent purchaser, without actual notice of it. Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871).

84. —Creditor Without Judgment.

A creditor, without first obtaining a judgment, may maintain a bill in chancery to set aside the debtor's fraudulent conveyances of property of any description — real, personal, or mixed and legal or equitable — and obtain satisfaction of his debt out of the property so fraudulently conveyed. Hervey & New v. Champion, 30 Tenn. 569, 1851 Tenn. LEXIS 106 (1851); Fay v. Jones, 38 Tenn. 442, 1858 Tenn. LEXIS 209 (1858); Wilson v. Beadle, 39 Tenn. 510, 1859 Tenn. LEXIS 263 (1859); Armstrong v. Croft, 71 Tenn. 191, 1879 Tenn. LEXIS 56 (1879); McBee v. Bearden, 75 Tenn. 731, 1881 Tenn. LEXIS 180 (1881); Battle v. Street, 85 Tenn. 282, 2 S.W. 384, 1886 Tenn. LEXIS 43 (1886); Howell v. Thompson, 95 Tenn. 396, 32 S.W. 309, 1895 Tenn. LEXIS 107 (1895); Citizens' Nat'l Bank v. Watkins, 126 Tenn. 453, 150 S.W. 96, 1912 Tenn. LEXIS 71 (1912).

85. —Property to Which Creditor May Resort.

The general rule is that the property must be of a kind to which a creditor may resort for satisfaction. Wagner v. Smith, 81 Tenn. 560, 1884 Tenn. LEXIS 71 (1884).

86. —Conveyances to Secure Certain Creditors Reserving Benefits to Maker — Effect Against Other Creditors.

A conveyance to secure certain creditors, which secures, whether expressly or secretly, any benefit or advantage to the debtor making it, is fraudulent in law as against the other unsecured creditors. Darwin v. Handley, 11 Tenn. 502, 1832 Tenn. LEXIS 104 (1832); Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833).

Where a deed of trust undertakes to secure debts largely in excess of the value of the property conveyed, and covers up none of the debtor's other property, if he has any, but leaving that subject to his other debts, his other creditors have no right to complain because of the fact that some benefit or advantage is given to the grantor in the use of the property and in the delay of time in closing the trust. Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833).

A stipulation in a deed of trust that the grantor shall be employed as salesman by the trustee, and that he shall be allowed compensation out of the trust fund, does not of itself vitiate the deed. Saunders v. Turbeville, 21 Tenn. 272, 1840 Tenn. LEXIS 73 (1840); Lockhard v. Brodie, 1 Tenn. Ch. 384 (1873).

The stipulation that any surplus remaining after paying the debts specified shall be paid to the grantor, or his order, does not raise a presumption of fraud. Austin v. Johnson, 26 Tenn. 191, 1846 Tenn. LEXIS 101 (1846); Jones v. Hamlet, 34 Tenn. 256, 1854 Tenn. LEXIS 45 (1854).

87. —Trust Deeds Regulating Creditors' Rights.

A condition excluding suing creditors, or a provision for preferences in a deed of trust executed under a power of attorney not authorizing the same, is void, and is not a part of the deed; and, therefore, such a provision does not render the deed fraudulent. Gimell, Simicker, Storms & Co. v. Adams, 30 Tenn. 283, 1850 Tenn. LEXIS 113 (1850).

A condition in a deed of trust excluding from benefits all secured creditors who shall bring suit for their debts, or prohibiting their suing under penalty of forfeiture of all interest under the deed, rendered the deed fraudulent. Wilde v. Rawlings, 38 Tenn. 34, 1858 Tenn. LEXIS 110 (Tenn. Sep. 1858).

A deed of trust conveying property insufficient in value to satisfy the debts, and stipulating that the fund shall be divided pro rata among the creditors, and that all creditors accepting such pro rata shall take in absolute acquittance of their debts, or otherwise receive nothing, and that, if the fund should be more than sufficient to pay the claims of creditors accepting the terms of the deed, the surplus shall be paid to the debtor, and not appropriated for the benefit of the other creditors, is fraudulent in law. Wilde v. Rawlings, 38 Tenn. 34, 1858 Tenn. LEXIS 110 (Tenn. Sep. 1858).

A provision that only those creditors who shall present their claims within a certain specified reasonable time shall share in the benefits of the deed does not render the deed void, especially where the trustee is required to notify the creditors. L. Mayer & Co. v. Pulliam, 39 Tenn. 346, 1859 Tenn. LEXIS 222 (Tenn. Apr. 1859).

88. —Time of Foreclosure — Effect on Validity of Conveyances to Creditor.

See also notes under heading 52.

The fact that a deed of trust contains no limitation as to the time in which the trust shall be closed is not a conclusive circumstance of fraud, but one to be considered as a badge of fraud. Overton v. John H. Holinshade & Co., 52 Tenn. 683, 1871 Tenn. LEXIS 295 (1871); Woodward v. Goodman, 3 Shan. 483 (1875); Morris v. Clark, 62 S.W. 673, 1901 Tenn. Ch. App. LEXIS 62 (Tenn. Ch. App. 1901).

A deed of trust on hotel furniture to secure 60 monthly rent notes for a five year lease of a hotel is not fraudulent, either in law or in fact, where the beneficiary (the lessor) acted in good faith, and without knowledge of the financial embarrassment of the maker. Stewart v. Cockrell, 70 Tenn. 369, 1879 Tenn. LEXIS 183 (1879).

A delay of two years and six months of itself would not ordinarily be regarded as unreasonable. Hartman v. Allen, 77 Tenn. 657, 1882 Tenn. LEXIS 118 (1882); Reed Fertilizer Co. v. Thomas, 97 Tenn. 478, 37 S.W. 220, 1896 Tenn. LEXIS 169 (1896).

89. —Stipulation for Sale on Credit in Conveyance to Creditor — Effect on Validity.

A deed of trust stipulating that, in default of payment, the property should be sold on a credit, would not be fraudulent for that reason. Gimell, Simicker, Storms & Co. v. Adams, 30 Tenn. 283, 1850 Tenn. LEXIS 113 (1850).

The fact that a credit of one, two, and three years is given upon a sale of land by a debtor will not, of itself, render such sale fraudulent in law. McCasland v. Carson, 38 Tenn. 117, 1858 Tenn. LEXIS 134 (Tenn. Sep. 1858).

Where a general assignment postpones the sale of the land for two years, and then provides that it shall be sold for one third cash and the balance on a credit of one and two years, it is fraudulent in law. Farmers' & Traders' Bank v. Martin, 96 Tenn. 1, 33 S.W. 565, 1895 Tenn. LEXIS 1 (1896).

90. —Preference of Creditors.

A debtor may prefer one creditor and pay or secure his debt though others may suffer loss, but he cannot cover a much larger amount of property than will satisfy such debt and postpone its appropriation for an unreasonable time beyond what would be equivalent to the probable law's delay. Mitchell v. Beal, 16 Tenn. 134, 1835 Tenn. LEXIS 59 (1835).

A father becoming insolvent may prefer his daughter as a creditor by conveying to her his property, and such conveyance, made in good faith, is not fraudulent as against his other creditors or the creditors of a firm of which he is a member. Nelson v. Kinney, 93 Tenn. 428, 25 S.W. 100, 1893 Tenn. LEXIS 70 (1893).

The mortgages or deeds of trust of a hopelessly insolvent corporation conveying practically all of its property, for the purpose of winding up its affairs in such manner as to secure preferences to a creditor who was an officer and director, and ceasing to do business with no intention of resuming again, are fraudulent. Smith v. Bradt Printing Co., 97 Tenn. 351, 37 S.W. 10, 1896 Tenn. LEXIS 149 (1896).

91. — —Confessions of Judgment as Preference — Validity.

A debtor may, at any time before a lien has been acquired on his property by a judgment, or by a judgment and levy where the judgment would create no lien, confess judgment in favor of another and surrender his property in satisfaction thereof, so as to defeat the suing creditors. Hefner v. Metcalf, 38 Tenn. 577, 1858 Tenn. LEXIS 230 (Tenn. Dec. 1858).

A confession of judgment by a debtor is fraudulent as against his other creditors, where the debtor and creditor collude together, and, by fraudulent practices, resort to the confessed judgment, with the purpose of defeating the debtor's other creditors, as where a creditor by notes not due procures the debtor to make past due notes in lieu thereof, and to confess judgment thereon, and causes executions to be levied on land as that of the confessed judgment debtor, though previously conveyed by unregistered deed with a vendor's lien retained, all of which was known to such judgment creditor, and done for the purpose of defeating the lien debt held by the assignees of the judgment debtor. Hickerson v. Blanton & Co., 49 Tenn. 160, 1870 Tenn. LEXIS 207 (1870). See also Floyd v. Goodwin, 16 Tenn. 484, 1835 Tenn. LEXIS 112 (1835).

92. Setting Aside Conveyances.

A conveyance of land as part of the consideration for a stock of goods sold and purchased to defeat creditors will be canceled, where the creditors attach and recover the goods or their proceeds, and subject and appropriate the same to the satisfaction of their debts. Lazell v. Powell, 1 Shan. 132 (1859).

A bill to set aside a conveyance of land as being fraudulent as to creditors must describe the property, and mere reference to book and page of register's office where deed is recorded does not suffice. Stacker v. Wilson, 52 S.W. 709, 1899 Tenn. Ch. App. LEXIS 30 (Tenn. Ch. App. 1899).

93. —Duty of Courts as to Discovery of Fraud.

The courts are not required to be laboriously astute and subtle in search of hypotheses by which to discover that that which began honestly might in the end be applied to dishonest uses, so as to avoid a solemn conveyance, for the contrary is the duty of the courts, namely, to let a conveyance stand if it seems fair and honest. Bennett v. Union Bank, 24 Tenn. 612, 1845 Tenn. LEXIS 146 (1845); Stewart v. Cockrell, 70 Tenn. 369, 1879 Tenn. LEXIS 183 (1879).

94. —Right to Impeach Fraudulent Conveyances.

Conveyances and sales voidable at the instance of the creditors are valid between the parties themselves and all persons claiming under them, and will not be set aside by the courts, except at the instance of the creditors of the grantor or vendor. Greenlee v. Hays' Adm'r, 1 Tenn. 300, 1808 Tenn. LEXIS 23 (1808); Walker v. McConnico, 18 Tenn. 228, 1836 Tenn. LEXIS 126 (1836); Byrd v. Curlin, 20 Tenn. 466, 1840 Tenn. LEXIS 2 (1840); Coleman v. Pinkard, 21 Tenn. 185, 1840 Tenn. LEXIS 63 (1840); Wade v. Green, 22 Tenn. 547, 1842 Tenn. LEXIS 143 (1842); Gilliam v. Spence, 25 Tenn. 160, 1845 Tenn. LEXIS 53 (1845); Mulloy v. Young, 29 Tenn. 298, 1859 Tenn. LEXIS 1 (1859); Rowland v. Rowland, 34 Tenn. 543, 1855 Tenn. LEXIS 94 (1855), superseded by statute as stated in, Warren v. Compton, 626 S.W.2d 12, 1981 Tenn. App. LEXIS 558 (Tenn. Ct. App. 1981); Hubbs v. Brockwell, 35 Tenn. 574, 1856 Tenn. LEXIS 100 (1856); McCutchen v. Pigue, 51 Tenn. 565, 1871 Tenn. LEXIS 206 (1871); Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Parish v. Scott, 57 Tenn. 438, 1873 Tenn. LEXIS 232 (1873); Swan v. Castleman, 63 Tenn. 257, 1874 Tenn. LEXIS 240 (1874); Parker v. Freeman, 2 Cooper's Tenn. Ch. 612 (1876); Trafford v. Austin, 3 Cooper's Tenn. Ch. 492 (1877); Nichol v. Davidson County, 3 Cooper's Tenn. Ch. 547 (1877), aff'd, Nichol v. County of Davidson, 76 Tenn. 389, 1881 Tenn. LEXIS 23 (1881); Ramsey v. Quillen, 73 Tenn. 184, 1880 Tenn. LEXIS 109 (1880); Battle v. Street, 85 Tenn. 282, 2 S.W. 384, 1886 Tenn. LEXIS 43 (1886); German Bank v. Haller, 101 Tenn. 83, 52 S.W. 807, 1898 Tenn. LEXIS 33 (1898).

Where a note was without consideration, and was executed to hinder and delay the creditors of the maker, the promise to pay, being executory, cannot be enforced at the suit of the payee, but the enforcement of a deed of trust made to secure such a note cannot be resisted by the maker, because the parties cannot invoke the aid of the courts to undo it. Walker v. McConnico, 18 Tenn. 228, 1836 Tenn. LEXIS 126 (1836); Parks v. McKamy, 40 Tenn. 297, 1859 Tenn. LEXIS 80 (1859); Swan v. Castleman, 63 Tenn. 257, 1874 Tenn. LEXIS 240 (1874); Derrington ex rel. Waterfield v. Ellis, 2 Shan. 643 (1878).

A fraudulent vendor cannot impeach his conveyance for fraud. Moody v. Fry, 22 Tenn. 567, 1842 Tenn. LEXIS 147 (1842); Maley v. Barrett, 34 Tenn. 501, 1855 Tenn. LEXIS 88 (1855).

The fraudulent vendee cannot impeach a conveyance to him for fraud. Maley v. Barrett, 34 Tenn. 501, 1855 Tenn. LEXIS 88 (1855); Searcy v. Carter, 36 Tenn. 271, 1856 Tenn. LEXIS 95 (1856).

Where a husband conveyed land to defeat his wife's dower right, such conveyance is void as to the right protected; however, such conveyance cannot be set aside at the suit of the heirs, upon the death of the vendor, as it is not void as to them, but only as to the widow. Rowland v. Rowland, 34 Tenn. 543, 1855 Tenn. LEXIS 94 (1855), superseded by statute as stated in, Warren v. Compton, 626 S.W.2d 12, 1981 Tenn. App. LEXIS 558 (Tenn. Ct. App. 1981).

None but creditors or those who represent them may impeach a conveyance of their debtor for fraud. Lewis v. Gibson, 1 Shan. 163 (1860).

A conveyance or assignment made in violation of an injunction sued out by the wife is void against her, but it is valid as against the maker, and may be valid as against his other creditors. Wilhoit v. Castell, 62 Tenn. 419, 1874 Tenn. LEXIS 72 (1874).

In administrator's suit, brought after suggestion of insolvency of estate, to set aside his intestate's fraudulent conveyance of lands, and subject them to payment of debts, where indebtedness is denied, the complainant is not entitled to relief unless he shows, by satisfactory evidence, that there are subsisting and unpaid debts against the estate; and if claims had been reduced to judgment, or allowed by the clerk of the court as uncontested, such might be sufficient. Pitt v. Poole, 91 Tenn. 70, 17 S.W. 802, 1891 Tenn. LEXIS 78 (1891).

Fraudulent conveyance of land could not be set aside where the grantee had been in continuous adverse possession of the land for more than seven years before suit brought as grantee's title was perfected by the statute of limitations. Stacker v. Wilson, 52 S.W. 709, 1899 Tenn. Ch. App. LEXIS 30 (Tenn. Ch. App. 1899).

The rule that, where the parties are in pari delicto in an illegal contract, complainant cannot rescind is of general application, where the illegal contract involves no consideration of the public welfare, but there is an exception to the rule where the public good is to be promoted by permitting a disaffirmance of the contract and recovery of the consideration paid. Darnell-Love Lumber Co. v. Wiggs, 144 Tenn. 113, 230 S.W. 391, 1921 Tenn. LEXIS 32 (1921).

95. — —Estoppel.

A creditor who accepts a note for his debt is not estopped to set aside a fraudulent conveyance. Nichol v. Nichol, 63 Tenn. 145, 1874 Tenn. LEXIS 221 (1874).

96. —Evasive Answers and Answers Not Denying Charge.

Evasive statement in the answer, or statement of a legal conclusion, or the expression of an opinion without giving any fact to justify it, does not deny the charge in the bill. Welcker v. Price, 70 Tenn. 666, 1879 Tenn. LEXIS 217 (1879).

Answer evasively denying the fraud charged in the bill casts the burden on the defendant. Hartnett v. Doyle, 16 Tenn. App. 302, 64 S.W.2d 227, 1932 Tenn. App. LEXIS 6 (1932).

97. —Burden of Proof.

Where the facts and circumstances raise a suspicion of fraud which is equivalent to a presumption of fraud, it is incumbent upon the party, though a defendant, claiming under the conveyance, to remove such presumption and to show the good faith and fairness of the transaction, and the actual payment of the consideration. Jones v. Read, 20 Tenn. 335, 1839 Tenn. LEXIS 58 (1839); Smartt v. Watterhouse, 25 Tenn. 158, 1845 Tenn. LEXIS 52 (1845); Farnsworth v. Bell, 37 Tenn. 531, 1858 Tenn. LEXIS 56 (1858); Alley v. Connell, 40 Tenn. 578, 1859 Tenn. LEXIS 173 (1859); Dunlap v. Haynes, 51 Tenn. 476, 1871 Tenn. LEXIS 189 (1871); Robinson v. Frankel, 85 Tenn. 475, 3 S.W. 652, 1886 Tenn. LEXIS 72 (1886); Taylor v. Taylor, 6 Tenn. Civ. App. (6 Higgins) 268 (1915).

If the answer not only denies the fraud as charged, but goes further, and gives the details of the transaction, and admits the embarrassment, relationship and sale on long credit, any legitimate inference may be drawn to establish the existence of fraud in the face of the general denials of the answer, and to cast the burden of proof upon the defendant. Grannis, White & Co. v. Smith, 22 Tenn. 179, 1842 Tenn. LEXIS 62 (1842); Yost v. Hudiburg, 70 Tenn. 627, 1879 Tenn. LEXIS 208 (1879); Rhodes v. Wood, 93 Tenn. 702, 28 S.W. 294, 1894 Tenn. LEXIS 18 (1894).

Where a bill is filed by a creditor attacking a conveyance as fraudulent against creditors, and the answer responsively denies the fraud, or the facts charged as constituting the fraud, without more, the burden rests upon the complainant to prove the fraud. Washington v. Ryan, 64 Tenn. 622, 1875 Tenn. LEXIS 144 (1875); Cox v. Scott, 68 Tenn. 305, 1878 Tenn. LEXIS 14 (1878); Yost v. Hudiburg, 70 Tenn. 627, 1879 Tenn. LEXIS 208 (1879); Williamson v. Williams, 79 Tenn. 355, 1883 Tenn. LEXIS 74 (1883); Rhodes v. Wood, 93 Tenn. 702, 28 S.W. 294, 1894 Tenn. LEXIS 18 (1894); City Nat'l Bank v. Barnes, 164 Tenn. 450, 51 S.W.2d 503, 1932 Tenn. LEXIS 9 (1932).

It is only where the answer expressly or impliedly admits material matter which tends to support the allegation of the bill that the burden shifts to the defendant, to make proof of explanatory matter set up in avoidance. Farmers Bank of Lynchburg v. Farrar, 4 Tenn. App. 186, 1926 Tenn. App. LEXIS 180 (1926); City Nat'l Bank v. Barnes, 164 Tenn. 450, 51 S.W.2d 503, 1932 Tenn. LEXIS 9 (1932).

Where the bill anticipates the defense and such defense is made in answer, then as to such matter the burden is on the complainant. Farmers Bank of Lynchburg v. Farrar, 4 Tenn. App. 186, 1926 Tenn. App. LEXIS 180 (1926); City Nat'l Bank v. Barnes, 164 Tenn. 450, 51 S.W.2d 503, 1932 Tenn. LEXIS 9 (1932).

Inference of fraud may be drawn from facts and circumstances admitted in answer, and the burden of proof put on defendant, though the answer explicitly denies the fraud. Hartnett v. Doyle, 16 Tenn. App. 302, 64 S.W.2d 227, 1932 Tenn. App. LEXIS 6 (1932).

Suspicious circumstances creating a suspicion or presumption of fraud must be rebutted by the defendant claiming under a conveyance. Hartnett v. Doyle, 16 Tenn. App. 302, 64 S.W.2d 227, 1932 Tenn. App. LEXIS 6 (1932).

98. —Evidence and Proof.

Proof that a voluntary conveyance was made to defeat unjust demands against him is not sufficient proof that there were legal or just demands against him, and some existing debt must be proved to render the conveyance fraudulent as against existing or subsequent creditors. Greenlee v. Hays' Adm'r, 1 Tenn. 300, 1808 Tenn. LEXIS 23 (1808).

The law will not presume fraud; and while the law requires fraud to be proved by facts sworn to, or circumstances arising from and connected with the facts sworn; yet, in most instances, the evidence of it must be gathered more from the circumstances attending the transaction than upon tangible proof, as such things are not generally told or done openly. Fraud will, in most instances, though ever so artfully and secretly contrived, leave its slime by which it may be traced. Floyd v. Goodwin, 16 Tenn. 484, 1835 Tenn. LEXIS 112 (1835); Harris v. Smith, 42 Tenn. 306, 1865 Tenn. LEXIS 63 (1865); Kelton v. Millikin, 42 Tenn. 410, 1865 Tenn. LEXIS 82 (1865); Parrott v. Parrott, 48 Tenn. 681, 1870 Tenn. LEXIS 133 (1870); Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

It is not necessary to prove, by direct and express evidence, the intent to defraud, for this would be impracticable in many instances. The intent may be collected from the circumstances of the case and such badges of fraud as the transaction wears. Nelson v. Vanden, 99 Tenn. 224, 42 S.W. 5, 1897 Tenn. LEXIS 28 (1897).

99. — —Declarations of Grantor or Vendor — Admissibility Against Purchaser.

Where one sells personalty absolutely, or sells and conveys land absolutely, and retains the possession of the property inconsistently with the terms of the sale or the terms of the deed, his declarations made, even in the absence of the purchaser, in reference to the ownership, contract, the character of his possession, or the terms upon which he holds, may be received in evidence against the purchaser, as part of the res gestae. But where his possession is consistent with the terms of the sale or deed, such statements and declarations of his, made in the absence of the purchaser and without his knowledge, are not admissible as evidence as against the purchaser. Trotter v. Watson, 25 Tenn. 509, 1846 Tenn. LEXIS 31 (1846); Carnahan v. Wood, 32 Tenn. 500, 1852 Tenn. LEXIS 105 (1852); Farnsworth v. Bell, 37 Tenn. 531, 1858 Tenn. LEXIS 56 (1858); Neal v. Peden, 38 Tenn. 546, 1858 Tenn. LEXIS 223 (Tenn. Dec. 1858); McClellan v. Cornwell, 42 Tenn. 298, 1865 Tenn. LEXIS 62 (1865); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Carney v. Carney, 66 Tenn. 284, 1874 Tenn. LEXIS 125 (1874); Williamson v. Williams, 79 Tenn. 355, 1883 Tenn. LEXIS 74 (1883); Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

The right of a party to property bona fide purchased by him cannot be prejudiced by the declarations of the vendor after the transaction, not made in the presence of the purchaser, even where the vendor retains possession consistently with the rights of the purchaser, and according to the terms of the contract. Carnahan v. Wood, 32 Tenn. 500, 1852 Tenn. LEXIS 105 (1852); Neal v. Peden, 38 Tenn. 546, 1858 Tenn. LEXIS 223 (Tenn. Dec. 1858); McClellan v. Cornwell, 42 Tenn. 298, 1865 Tenn. LEXIS 62 (1865); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Wright v. Hessey, 62 Tenn. 42, 1873 Tenn. LEXIS 135 (1873); Carney v. Carney, 66 Tenn. 284, 1874 Tenn. LEXIS 125 (1874).

A valid deed of trust to secure creditors cannot be invalidated by subsequent declarations or acts of the maker. Wilson v. Eifler, 47 Tenn. 31, 1869 Tenn. LEXIS 5 (1869); Jones v. Cullen, 100 Tenn. 1, 42 S.W. 873, 1897 Tenn. LEXIS 86 (1897).

Declarations of a former owner are not admissible against his purchaser. Collger v. Francis, 61 Tenn. 422, 1873 Tenn. LEXIS 198 (1873).

Subsequent statements of grantor are not admissible to defeat purchaser's title until it is shown that the purchaser participated in or was connected with the fraud. First Nat'l Bank v. Wilkins, 11 Tenn. App. 9, 1929 Tenn. App. LEXIS 70 (1929).

100. —Division of Proceeds upon Setting Aside Conveyance.

Where a voluntary conveyance is set aside for fraud in fact, the proceeds of the property become assets for the benefit of creditors generally, and all the creditors, including subsequent creditors, will be allowed to share in the proceeds. Churchill v. Wells, 47 Tenn. 364, 1870 Tenn. LEXIS 156 (1870); Levering v. Norvell, 68 Tenn. 176, 1877 Tenn. LEXIS 12 (1877).

101. —Purchase Money Notes — Cancellation upon Setting Aside Conveyance.

Where a conveyance of land made to defraud the grantor's creditors is set aside at the suit of such creditors, and the land is subjected and appropriated to the satisfaction of their debts, the notes given by the fraudulent grantee for the purchase money will be canceled. Lazell v. Powell, 1 Shan. 132 (1859).

102. —Appeal.

The grantor has no right of appeal from a decree setting aside his conveyance as fraudulent against creditors, and subjecting the land to the satisfaction of the debts against him. The grantee is the only person that has a right to complain. Hunt v. Childress, 73 Tenn. 247, 1880 Tenn. LEXIS 118 (1880).

Cause came to court of appeals with a presumption of correctness of chancellor's finding that conveyance was fraudulent, unless the preponderance of the evidence was to the contrary. Gurlich's, Inc. v. Myrick, 54 Tenn. App. 97, 388 S.W.2d 353, 1964 Tenn. App. LEXIS 148 (Tenn. Ct. App. Dec. 10, 1964).

103. Levy on Property.

104. —Levy on Insolvent's Property.

Levy on property of insolvent corporation after it ceases to do business gives the execution creditor no advantage over other creditors. Memphis Barrel Co. v. Ward, 99 Tenn. 172, 42 S.W. 13, 1897 Tenn. LEXIS 21, 63 Am. St. Rep. 825 (1897); Voightman & Co. v. Southern R. Co., 123 Tenn. 452, 131 S.W. 982, 1910 Tenn. LEXIS 17 (1910).

105. —Levy on Fraudulently Conveyed Property.

Personal property fraudulently sold to defeat the seller's creditors is subject to levy for the creditors of either the seller or purchaser, and, as between their respective creditors, it is a race of diligence, without any priority of rights; but there is such title in the fraudulent purchaser that the execution creditor of the fraudulent seller has no lien on the property, and after a sale by the fraudulent purchaser to an innocent purchaser for a valuable consideration without notice, the property cannot be levied on under an execution against the original fraudulent seller, though it be tested before such sale. Russell v. Stinson, 4 Tenn. 1, 1816 Tenn. LEXIS 2 (1816); Williams v. Lowe, 23 Tenn. 62, 1843 Tenn. LEXIS 16 (1843); Simpson v. Simpson, 26 Tenn. 275, 1846 Tenn. LEXIS 124 (1846), questioned, Daly v. Sumpter Drug Co., 127 Tenn. 412, 155 S.W. 167, 1912 Tenn. LEXIS 39 (1912); Richards v. Ewing, 30 Tenn. 327, 1850 Tenn. LEXIS 126 (1850); Parker v. Freeman, 2 Cooper's Tenn. Ch. 612 (1876); Cryer v. Mayfield, 5 Tenn. Civ. App. (5 Higgins) 537 (1914).

Where a slave (a chattel) was conveyed and received to defraud creditors, and by the conveyee exchanged for another slave which was conveyed to him as trustee for the debtor (the original grantor), the latter slave was not subject to levy as that of the debtor (the original grantor), because the legal title was in the trustee. Childs v. Derrick, 9 Tenn. 78, 9 Tenn. 79, 1824 Tenn. LEXIS 2 (1824); Allen v. Holland, 11 Tenn. 342, 11 Tenn. 343, 1832 Tenn. LEXIS 58 (1832); Gray v. Faris, 15 Tenn. 154, 15 Tenn. 155, 1834 Tenn. LEXIS 31 (1834).

The execution sale of land levied on as that of the grantor, after his fraudulent conveyance made to defeat his creditors, cannot be enforced, nor can such fraudulent conveyance be removed as a cloud upon the title of the purchaser at such execution sale; but in chancery the fraudulent conveyance will be set aside, and the land will be subjected to the payment of the grantor's debts; and such relief will be granted under a bill seeking the enforcement of the execution sale, or the removal of the fraudulent conveyance as a cloud upon the execution purchaser's title, where the bill seeks such relief alternatively. Smith v. Hinson, 51 Tenn. 250, 1871 Tenn. LEXIS 155 (1871); Hoyal v. Bryson, 53 Tenn. 139, 1871 Tenn. LEXIS 332 (Tenn. Sep. 27, 1871); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883); Ballard v. Scruggs, 90 Tenn. 585, 18 S.W. 259, 1891 Tenn. LEXIS 47, 25 Am. St. Rep. 703 (1891).

Land purchased by an indebted father, and paid for by him, and conveyed by his procurement to his infant children, for the avowed purpose of protecting the same against his own creditors, and with the intent to defraud and defeat his creditors, is not subject to be levied on as his property, but in chancery such conveyance will be declared fraudulent as against creditors, and the land will be subjected to the payment of the debts of the father. Smith v. Hinson, 51 Tenn. 250, 1871 Tenn. LEXIS 155 (1871); Hoyal v. Bryson, 53 Tenn. 139, 1871 Tenn. LEXIS 332 (Tenn. Sep. 27, 1871); Anderson v. Lyons, 2 Cooper's Tenn. Ch. 61 (1874); Weakley v. Cockrill, 2 Cooper's Tenn. Ch. 316 (1875), reversed on other grounds, Weakley v. Cockrill, 74 Tenn. 270, 1880 Tenn. LEXIS 246 (1880). See Gaugh v. Henderson, 39 Tenn. 628, 1859 Tenn. LEXIS 293 (1859).

While the legal title is in the fraudulent grantee, the land is subject to be levied on for his debts, but after his conveyance to the true owner, without fraudulent intent and while abundantly able to pay all of his debts, the land cannot be subjected to the payment of his debts. Where the purchaser of land fraudulently procures the title to be made to a third person to hinder and delay his creditors, the creditors of such third person may subject the same to the payment of their debts against him while the title remains in him, yet if, before any proceedings against him by his creditors, he reconveys the property to the true purchaser and owner, without fraudulent intent and while abundantly able to pay all of his debts, the land cannot be reached in satisfaction of debts by his creditors. Stanton v. Shaw, 62 Tenn. 12, 1873 Tenn. LEXIS 126 (1873).

106. —Purchase of Land Previously Levied On.

Where one purchases land with actual knowledge that it has been levied on by virtue of an execution, the purchase must be made with the intent to defeat the creditor in the collection of his debt, for which reason the sale will be void by force of this statute, and such purchaser will obtain no title. Overton v. Perkins, 8 Tenn. 367, 1828 Tenn. LEXIS 14 (1828); Miller's Lessee v. Estill, 16 Tenn. 452, 1835 Tenn. LEXIS 106 (1835).

Collateral References.

Admissibility of testimony of transferee as to his knowledge, purpose, intention, or good faith on issue whether conveyance was in fraud of transferor's creditors. 52 A.L.R.2d 418.

Assumption of mortgage as consideration for conveyance attached as in fraud of creditors. 6 A.L.R.2d 270.

Attorney's compensation for services in matters involving fraudulent conveyances, amount of. 143 A.L.R. 798, 56 A.L.R.2d 13, 57 A.L.R.3d 475, 57 A.L.R.3d 550, 58 A.L.R.3d 317, 10 A.L.R.5th 448, 17 A.L.R.5th 366, 23 A.L.R.5th 241, 86 A.L.R. Fed. 866.

Cloud on title, fraudulent conveyance as. 78 A.L.R. 250.

Conveyance as fraudulent where made in contemplation of possible liability for future tort. 38 A.L.R.3d 597.

Husband's agreement that wife shall receive proceeds of sale of homestead as fraud on his creditors. 6 A.L.R. 574.

Insurance, validity as against creditors of change of beneficiary of policy from estate to individual or assignment of policy payable to estate. 6 A.L.R. 1173, 106 A.L.R. 596.

Judgment for fine or penalty as supporting creditors' bill or other suit to avoid, as fraudulent, conveyance or transfer before its entry. 48 A.L.R. 605.

Lis pendens as applicable to actions to avoid conveyance or transfer in fraud of creditors or to prevent such conveyance. 74 A.L.R. 690.

Purchase of homestead as fraud on creditors. 161 A.L.R. 1287.

Receivership or liquidation of debtor as affecting right of individual creditor or creditors to maintain bill to set aside conveyance or transfer in fraud of creditors. 119 A.L.R. 1339.

Redemption from, acquisition or extinction of, outstanding rights, title or interest, by grantee or transferee in fraud of creditors, right of creditor to benefit of. 87 A.L.R. 830.

Resulting trust in property conveyed by third person to debtor's spouse and attacked by creditors as fraudulent. 35 A.L.R.2d 8.

Right of creditor to set aside transfer of property as fraudulent as affected by the fact that his claim is barred by statute of limitations. 14 A.L.R.2d 598.

Right of tort claimant, prior to judgment, to attack conveyance or transfer as fraudulent. 73 A.L.R.2d 749.

Services of debtor, gift of, to third person as fraud on creditors. 28 A.L.R. 1046.

Stockholder's conveyance or transfer as fraudulent as regards his liability as stockholder to creditors of corporations. 89 A.L.R. 751.

Support, who may attack conveyance in consideration of. 2 A.L.R. 1452, 23 A.L.R. 584.

Tort claimant's right to attack conveyance or transfer as fraudulent. 73 A.L.R.2d 749.

Use of debtor's individual funds or property for acquisition, improvement of, or discharge of liens on, property held in estate by entireties as fraud upon creditors. 7 A.L.R.2d 1104.

When statute of limitations or laches commences to run against action to set aside fraudulent conveyances or transfer in fraud of creditors. 100 A.L.R.2d 1094.

Will, creditors' right to complain of or control debtor's renunciation of benefit under, or his election to take under or against. 39 A.L.R.4th 633.

Wills: undue influence in gift to testator's attorney. 19 A.L.R.3d 575.

66-3-102. Personal property conveyed without consideration.

If a conveyance be of goods or chattels, and be not on consideration deemed valuable in law, it shall be taken to be fraudulent, unless the same be by will duly proved and recorded, or by bill of sale or other instrument acknowledged or proved and registered according to law, or unless possession remain with the donee.

Code 1858, § 1760 (deriv. Acts 1801, ch. 25, § 2); Shan., § 3151; mod. Code 1932, § 7833; T.C.A. (orig. ed.), § 64-302.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 454.

NOTES TO DECISIONS

1. Registered Conveyance — Validity.

A registered voluntary conveyance of property, either personal or real, is good as against subsequent purchasers for value. Marshall v. Booker, 9 Tenn. 13, 1820 Tenn. LEXIS 10 (1820); Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871).

A registered voluntary conveyance of property, either personal or real, is good as against subsequent creditors, when not fraudulent as to existing creditors, and not made with a view to defraud subsequent creditors. Martin v. Olliver, 28 Tenn. 561, 1848 Tenn. LEXIS 123 (1848); Churchill v. Wells, 47 Tenn. 364, 1870 Tenn. LEXIS 156 (1870); Vance v. Smith, 49 Tenn. 343, 1871 Tenn. LEXIS 16, 73 Am. Dec. 177 (1871); Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871).

2. —Registration of Fraudulent Gift.

A gift valid under this section, by compliance with its every requirement, may be fraudulent as against the donor's creditors, for a conveyance may be free from objection under this section, and yet be void as against creditors for fraud under § 66-3-101. Perkins v. Perkins, 1 Cooper's Tenn. Ch. 537 (1874); Martin v. Crosby, 79 Tenn. 198, 1883 Tenn. LEXIS 41 (1883).

If fraud is intended or practiced, the registration will not affect the subsequent creditors. Levering v. Norvell, 68 Tenn. 176, 1877 Tenn. LEXIS 12 (1877).

3. Unregistered Conveyance.

4. —Facts Constituting Completed Gift — Validity of Conveyance.

Where plaintiff's brother purchased car, had bill of sale recite that automobile was transferred to plaintiff and delivered the bill of sale to the plaintiff, but the bill of sale was not registered and she did not retain possession of the automobile although both used it, the conveyance was a completed gift and did not fall within this section and could not be set aside by one claiming title by subsequent gift. Marlin v. Merrill, 25 Tenn. App. 328, 156 S.W.2d 814, 1941 Tenn. App. LEXIS 113 (Tenn. Ct. App. 1941).

5. —Possession Remaining in Donor.

Unregistered voluntary conveyances of goods and chattels, where the possession remains with the donor, shall be taken to be fraudulent, that is, void as to the creditors of the donor only. Dillard v. Dillard, 22 Tenn. 41, 1842 Tenn. LEXIS 19 (1842); Moses v. Marcrief, 2 Shan. 181 (1876).

Where a father advances the money to pay for a chattel and procures the bill of sale, which was not registered to be made directly to his five year old daughter, at a time when he has ample property to satisfy every demand against him, and afterwards becomes insolvent, the daughter is vested with the legal title; and the subsequent insolvency of her father cannot affect her rights. The possession of the father for his infant daughter, and not for himself, instead of operating against her, is in confirmation of her title. Dillard v. Dillard, 22 Tenn. 41, 1842 Tenn. LEXIS 19 (1842).

6. —Unregistered Gifts Known to Creditors.

The donor's creditors will not be affected by actual notice or knowledge of the existence of unregistered deeds of gift, or other instruments. Douglas v. Morford, 16 Tenn. 373, 1835 Tenn. LEXIS 91 (1835); Lillard v. Ruckers, 17 Tenn. 64, 1836 Tenn. LEXIS 17 (1836); Banks v. Thomas, 19 Tenn. 28, 1838 Tenn. LEXIS 7 (1838).

7. Gift Without Delivery and During Insolvency.

A gift, without delivery, by husband to wife when husband is insolvent is invalid as to creditors. State v. Caldwell, 21 Tenn. App. 396, 111 S.W.2d 377, 1937 Tenn. App. LEXIS 42 (Tenn. Ct. App. 1937)

8. Intent to Defraud — Effect.

A voluntary conveyance with actual intent to defraud either existing or subsequent creditors is void as to the creditors to whom the fraudulent intent extends. Churchill v. Wells, 47 Tenn. 364, 1870 Tenn. LEXIS 156 (1870).

Collateral References.

Annuity, purchase of, by debtor as fraud on creditors. 154 A.L.R. 727.

Antenuptial agreement, conveyance pursuant to, as fraud on creditors. 41 A.L.R. 1163.

Barred debt, conveyance to pay or secure. 109 A.L.R. 1220.

Conveyance in consideration of future support as fraudulent against creditors. 2 A.L.R. 1438, 23 A.L.R. 584.

Excessive security for debt as affecting question of fraud upon creditors. 138 A.L.R. 1051.

Illegal consideration, right, of creditor or one representing him, to recover money paid or property transferred by debtor on. 34 A.L.R. 1297.

Liability of one who assists or encourages a preference to a third person. 112 A.L.R. 1250.

Promise by beneficiary of, to insured, to pay proceeds of policy in whole or in part to third person, as effecting transfer in fraud of creditors. 102 A.L.R. 559.

Trust, validity, as against creditors of trustee, or one deriving his right from trustee, of conveyance or transfer to carry out terms of unenforceable parol trust. 64 A.L.R. 576.

66-3-103. Presumption of ownership from possession of personal property.

Possession of goods and chattels continued for five (5) years, without demand made and pursued by due process of law, shall, as to the creditors of the possessor or purchasers from the possessor, be deemed conclusive evidence that the absolute property is in such possessor, unless the contrary appear by bill of sale, deed, will, or other instrument in writing, proved or acknowledged and registered.

Code 1858, § 1761 (deriv. Acts 1801, ch. 25, § 2); Shan., § 3152; mod. Code 1932, § 7834; T.C.A. (orig. ed.), § 64-303.

Cross-References. Adverse possession of real property, § 28-2-101.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Bankruptcy, § 9; 13 Tenn. Juris., Fraudulent and Voluntary Conveyances, § 36; 14 Tenn. Juris., Gifts, § 11; 18 Tenn. Juris., Loans, § 4.

Law Reviews.

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399.

NOTES TO DECISIONS

1. Purpose and Effect.

This section converts neglect and delay into a positive presumption of fraud, and thus, without his consent, divests the lender of his property, so far as the creditors of the possessor or purchasers from him are concerned. Hallum v. Yourie, 33 Tenn. 369, 1853 Tenn. LEXIS 57 (1853).

The policy of this section has never been controverted. The possession of property so long is calculated to give credit, and men may reasonably consider the right with the possession, when the same is permitted to remain undisturbed for so long a time. Gunn v. Mason, 34 Tenn. 637, 1855 Tenn. LEXIS 110 (1855).

This section was enacted for the benefit of creditors of the possessor and the purchasers from him, and not for the benefit of the possessor of chattels, unless the contrary appears by bill of sale, acknowledged and registered. O'Brien v. Waggoner, 20 Tenn. App. 145, 96 S.W.2d 170, 1936 Tenn. App. LEXIS 11 (Tenn. Ct. App. 1936).

This section was enacted for the protection of parties who had innocently purchased property and parties who had advanced credit upon the showing of apparent ownership in a party in possession, and it was not designed to regulate title as between the true owner and a person to whom property might have been loaned or otherwise held in bailment. Thach v. Brown Knitting Co., 23 Tenn. App. 317, 132 S.W.2d 228, 1939 Tenn. App. LEXIS 39 (1939).

T.C.A. § 66-3-103, an “ostensible ownership” statute, is a creditors' statute, not a statute of adverse possession, in that it creates no rights in the possessor of the property but only in his creditors. In re Hall, 5 B.R. 120, 1980 B.R. LEXIS 4940 (Bankr. M.D. Tenn. 1980).

2. Application.

This section does not apply to contracts of hiring. Porter v. Armstrong, 10 Tenn. 74, 1820 Tenn. LEXIS 9 (1820); Gunn v. Mason, 34 Tenn. 637, 1855 Tenn. LEXIS 110 (1855).

The provisions of this section were not applicable to machinery whose possession by a corporation was not shown to have continued for a period of five years preceding the date of such corporation's bankruptcy, it appearing in fact that possession had terminated before bankruptcy and before the rights of creditors attached by surrender of such machinery to its true owner. Thach v. Brown Knitting Co., 23 Tenn. App. 317, 132 S.W.2d 228, 1939 Tenn. App. LEXIS 39 (1939).

This section can have no application without the intervention of the rights of third parties, where the party in possession continues to recognize the title of the true owner. Thach v. Brown Knitting Co., 23 Tenn. App. 317, 132 S.W.2d 228, 1939 Tenn. App. LEXIS 39 (1939).

3. Methods of Obviating Statute — Validity.

A contract of hiring of property, with no intention of collecting the hire, but without contract to that effect, a method resorted to for the purpose of obviating this section and protecting the property from the creditors of the hirer, is not a fraud upon the law. Gunn v. Mason, 34 Tenn. 637, 1855 Tenn. LEXIS 110 (1855).

4. Character of Possession Required.

To make this section effective and to give the possessor a salable title, or one that may be subjected to the payment of his debts, the five years' possession must be one which the lender can put an end to by suit, an indefinite possession depending on the will of the lender, and not one founded upon contract, which cannot be put an end to at pleasure by the lender. Porter v. Armstrong, 10 Tenn. 74, 1820 Tenn. LEXIS 9 (1820); Gunn v. Mason, 34 Tenn. 637, 1855 Tenn. LEXIS 110 (1855).

5. Loans of Property.

This section has no application to contracts or loans for a definite time; and a loan for a definite period, by contract not in writing, though for more than five years, does not vest title in the lendee, even as in favor of his creditors or purchasers. Porter v. Armstrong, 10 Tenn. 74, 1820 Tenn. LEXIS 9 (1820); Hallum v. Yourie, 33 Tenn. 369, 1853 Tenn. LEXIS 57 (1853); Gunn v. Mason, 34 Tenn. 637, 1855 Tenn. LEXIS 110 (1855).

This section does not apply where the loan of goods and chattels was made in another state, or where the limitation or reservation was made by deed or will in another state, in which the property was at the time situate, so as to require the registration of such instruments in this state. Crenshaw v. Anthony, 8 Tenn. 101, 8 Tenn. 102, 1827 Tenn. LEXIS 17 (1827); Loving v. Hunter, 16 Tenn. 4, 1832 Tenn. LEXIS 2 (1835); Gilliam v. Spence, 25 Tenn. 160, 1845 Tenn. LEXIS 53 (1845); Finch v. Rogers, 30 Tenn. 559, 1851 Tenn. LEXIS 104 (1851).

The owner of the property loaned must be a party to the deed or will declaring the loan, and such a declaration by a stranger in interest will be invalid, and will not prevent the operation of this section. Wade v. Green, 22 Tenn. 547, 1842 Tenn. LEXIS 143 (1842).

6. —Lender's Disposition of Property within Period.

Where the lender, within the five years from the date of the loan, conveys the property by a deed properly registered, or bequeaths the same by will duly probated, recognized by the borrower, the loan is terminated, and the subsequent possession of the borrower is under the deed or will, and in subordination to it. To give such borrower the title, his possession must be adverse to the deed or will for the requisite period from the date of the registration of the deed or probate of the will. Gilliam v. Spence, 25 Tenn. 160, 1845 Tenn. LEXIS 53 (1845); Gardenhire v. Hinds, 38 Tenn. 402, 1858 Tenn. LEXIS 202 (Tenn. Dec. 1858).

7. —Lender and Creditor — Respective Rights After Period.

Where borrowed property is held by the borrower, continuously and uninterruptedly, for the period of five years, it becomes liable for his debts, but he cannot hold it as against the lender, who may, as against the borrower, before a levy or sale, regain the possession of the property. Andrews v. Hartsfield, 11 Tenn. 38, 11 Tenn. 39, 1832 Tenn. LEXIS 14 (1832); Walker v. Wynne, 11 Tenn. 61, 11 Tenn. 62, 1832 Tenn. LEXIS 19 (1832); Dowell v. Bailey, 18 Tenn. 489, 1837 Tenn. LEXIS 64 (1837); Peters v. Chares, 12 Tenn. 176, 1833 Tenn. LEXIS 44 (1833); Twiss v. Martin's Adm'rs & Distribs., 20 Tenn. 189, 1839 Tenn. LEXIS 38 (1839); McDougal v. Armstrong, 25 Tenn. 428, 1846 Tenn. LEXIS 10 (1846).

8. —Interruption of Possession — Effect.

If, after five years, the lender regains possession of the property and holds it bona fide as his own for any length of time, and then again lends the property to the same person, the borrower must hold the possession, continuously and uninterruptedly, for another five years, before his subsequent creditors can subject the property to the satisfaction of their debts against him. Walker v. Wynne, 11 Tenn. 61, 11 Tenn. 62, 1832 Tenn. LEXIS 19 (1832); Peters v. Chares, 12 Tenn. 176, 1833 Tenn. LEXIS 44 (1833); Dowell v. Bailey, 18 Tenn. 489, 1837 Tenn. LEXIS 64 (1837); Twiss v. Martin's Adm'rs & Distribs., 20 Tenn. 189, 1839 Tenn. LEXIS 38 (1839).

9. Gifts of Property.

T.C.A. § 66-3-103 converts the rebuttable presumption that an unexplained transfer of property from a parent to a child was intended as a gift to a conclusive presumption when possession has continued for a period of five years. In re Hall, 5 B.R. 120, 1980 B.R. LEXIS 4940 (Bankr. M.D. Tenn. 1980).

10. —Presumed Gift.

Where a parent places personalty in the possession of his child, without any explanation as to the manner in which the latter is to hold it, the law will presume it to be a gift; but the presumption only holds in the absence of proof showing a contrary intention. Porter v. Armstrong, 10 Tenn. 74, 1820 Tenn. LEXIS 9 (1820); Stewart v. Cheatham, 11 Tenn. 59, 11 Tenn. 60, 1832 Tenn. LEXIS 18 (1832); Wade v. Green, 22 Tenn. 547, 1842 Tenn. LEXIS 143 (1842); Turner v. Grainger, 24 Tenn. 347, 1844 Tenn. LEXIS 74 (1844); McKissick v. McKissick, 25 Tenn. 75, 1845 Tenn. LEXIS 26 (1845).

11. —Gift Elsewhere — Possession within State.

The statutes of limitations of this state will run in favor of a verbal gift of property (slaves) under the North Carolina statute, where the same is subsequently brought and held here for the requisite period according to our statutes of limitations. Hardeson v. Hays, 12 Tenn. 506, 12 Tenn. 507, 1833 Tenn. LEXIS 87 (1833); McDonald v. McDonald, 16 Tenn. 145 (1835); McKisick v. McKisick, 19 Tenn. 427, 1838 Tenn. LEXIS 72 (1838); McKissick v. McKissick, 25 Tenn. 75, 1845 Tenn. LEXIS 26 (1845); Stevens v. Bomar, 28 Tenn. 546, 1848 Tenn. LEXIS 120 (1848); Finch v. Rogers, 30 Tenn. 559, 1851 Tenn. LEXIS 104 (1851); Hallum v. Yourie, 33 Tenn. 369, 1853 Tenn. LEXIS 57 (1853).

12. —Possession Under Verbal Gift Which Should Be in Writing.

The donee's possession of personalty under a verbal gift would, from the nature of the transaction, be for himself exclusively, and the statute of limitation contained in § 28-3-105 would commence running; and if such possession be held by the donee for three years, and if the donor does not, by suit or otherwise, reclaim the property, the title, not, indeed, by operation of the gift and delivery, but by the adverse possession under the statute, would be vested in the donee as against the donor and others, for while the verbal gift, in such case, is invalid as conferring title, still it would serve to manifest and establish the nature and character of the donee's possession. Turner v. Grainger, 24 Tenn. 347, 1844 Tenn. LEXIS 74 (1844); McKissick v. McKissick, 25 Tenn. 75, 1845 Tenn. LEXIS 26 (1845); James v. Patterson's Lessee, 31 Tenn. 309, 1851 Tenn. LEXIS 74 (1851); Hallum v. Yourie, 33 Tenn. 369, 1853 Tenn. LEXIS 57 (1853).

13. Remainderman's Rights.

A remainder in slaves, after a life estate, created by an unregistered deed, was cut off, and the absolute title was vested in the life tenant, by his possession for five years, so far as his creditors and purchasers were concerned. Kenner v. Smith, 16 Tenn. 206, 1835 Tenn. LEXIS 76 (1835).

A remainderman in personalty under a registered deed or probated will is not affected by the possession of the borrower for five years under a loan made by the life tenant; and in a proper case, the rights of the remaindermen will be protected in chancery. McDougal v. Armstrong, 25 Tenn. 428, 1846 Tenn. LEXIS 10 (1846); Williams v. Conrad, 30 Tenn. 412, 1850 Tenn. LEXIS 140 (1850); Henderson v. Tipton, 88 Tenn. 255, 14 S.W. 380, 1889 Tenn. LEXIS 44 (Tenn. Sep. 1889).

66-3-104. Conveyance by general warranty deed with knowledge of existing liens — Conveyance with knowledge of lack of legal or equitable interest to convey.

  1. Any person who transfers land by execution of a general warranty deed with knowledge of outstanding liens, mortgages, deeds of trust or other claims against such transferred land with the intent to defraud, commits a Class E felony.
  2. Any person who transfers or applies for recordation of any transfer of land by execution of either a general warranty deed or quitclaim deed, or any other devise, with knowledge that the transferor or grantor has no legal or equitable interest to convey such land commits a Class A misdemeanor.

Acts 1978, ch. 743, §§ 1, 2; 1978, ch. 917, § 1; T.C.A., § 64-322; Acts 1989, ch. 591, § 87; 2011, ch. 399, § 2.

Cross-References. Penalty for Class A misdemeanor, § 40-35-111.

Penalty for Class E felony, § 40-35-111.

Part 2
Devises

66-3-201. Devises declared void.

All devises of lands, tenements, and hereditaments, or of any rent, profit, term, or charge out of the same, contrived and made to defraud creditors of their just debts, shall be deemed and taken to be null and void only as against such creditors, their heirs, successors, executors, administrators, and assigns, and every one of them.

Code 1858, § 1762 (deriv. Acts 1789, ch. 39, § 2); Shan., § 3153; Code 1932, § 7835; T.C.A. (orig. ed.), § 64-304.

Cross-References. Statute of frauds, § 29-2-101.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 854.

NOTES TO DECISIONS

1. Scope of Statute.

The provisions apply only to cases of fraudulent devises of lands. Buntyn v. Holmes, 77 Tenn. 319, 1882 Tenn. LEXIS 57 (1882).

Collateral References.

Executor's or administrator's right to attack conveyance or transfer by decedent. 91 A.L.R. 133, 150 A.L.R. 508.

Heirs and distributees, right to set aside for benefit of, a conveyance or transfer by decedent in fraud of his creditors. 148 A.L.R. 230.

66-3-202. Action against devisees.

Every such creditor may maintain an action or suit against such devisee, and, severally or jointly, against the debtor and the heirs at law of the debtor, in all cases, and in like manner, as such action or suit could be brought or maintained against the debtor's heirs at law.

Code 1858, § 1763 (deriv. Acts 1789, ch. 39, § 2); Shan., § 3154; Code 1932, § 7836; T.C.A. (orig. ed.), § 64-305.

Cross-References. Creditor's bill to set aside conveyance, § 29-12-101.

Statute of frauds, § 29-2-101.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 854.

NOTES TO DECISIONS

1. Remedy Against Heir Assumed.

The provision in this section for the remedy against the devisee assumes as a matter of course that the same exists as against the heir. Gibson v. Jones, 81 Tenn. 684, 1884 Tenn. LEXIS 87 (1884).

2. Presumption of Descent and Intestacy.

Descent and intestacy are presumed in the absence of a contrary showing. Wright v. Eakin, 151 Tenn. 681, 270 S.W. 992, 1924 Tenn. LEXIS 95 (1925).

66-3-203. Execution for value of alienated lands.

If the devisee sells, aliens, or makes over the lands so devised, before an action is brought or process sued out against the devisee, such devisee shall be answerable for such debt to the value of the lands, sold, aliened, or made over; and execution shall be taken out upon the judgment or decree obtained against such devisee to the value of the lands, as if the same were the devisee's own proper debt.

Code 1858, § 1764 (deriv. Acts 1789, ch. 39, § 3); Shan., § 3155; Code 1932, § 7837; T.C.A. (orig. ed.), § 64-306.

Cross-References. Attachment and replevy, title 29, ch. 6.

Execution, title 26, ch. 1.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 854.

NOTES TO DECISIONS

1. “Execution” — Scope and Application.

The word “execution” must be held to include any legal proceeding intended to effectuate the creditor's right, and lands not bona fide aliened may be subjected by bill in chancery for the debts of the ancestor where the personal estate is insufficient. Gibson v. Jones, 81 Tenn. 684, 1884 Tenn. LEXIS 87 (1884).

2. Heirs and Devisees Comprehended.

Suits may be prosecuted against heirs as well as devisees. Gibson v. Jones, 81 Tenn. 684, 1884 Tenn. LEXIS 87 (1884).

3. Debts Comprehended.

The section, it seems, comprehends and relates to all cases of debts not reduced to judgments against the ancestor during his lifetime. Ward v. Southerland, 7 Tenn. Appx. 1 (1823).

4. Lien of Ancestor's Debts.

Under the statutes, the debts of the ancestor are a lien on the devised or descended lands from the date of the commencement of the action or the suing of process against the devisee or heir, even as against subsequent purchaser; and as against devisee or heir, the lien is recognized to the extent that, if he should alien the devised or descended lands before the commencement of the action or the suing out of process against him, he shall be answerable for the ancestor's debts to the value of the lands so aliened. Porter's Lessee v. Cocke, 7 Tenn. 29, 7 Tenn. 30, 1823 Tenn. LEXIS 2 (1823); Smith v. Stump's Heirs, 7 Tenn. 278, 1823 Tenn. LEXIS 55 (1823); Ward v. Southerland, 7 Tenn. Appx. 1 (1823).

5. Extent of Heirs' Liability.

Where the heirs alien the inherited land to a bona fide purchaser, the title is vested in him to the exclusion of the ancestor's creditors whose remedy is against each heir for his proportionate part of the ancestor's debts which his personal estate is insufficient to pay; and no heir is liable for more than his proportionate share measured by the value of his share of the land so sold, and no heir is liable beyond the value of his such share. Livingston v. Noe, 69 Tenn. 55, 1878 Tenn. LEXIS 42 (1878); Neilson v. Weber, 107 Tenn. 161, 64 S.W. 20, 1901 Tenn. LEXIS 68 (1901).

Where the descended or devised land has been sold by the heirs or devisees before suit is brought to subject it to the payment of the ancestor's debts, the chancery court may, upon proper pleadings, render personal decrees against the heirs or devisees for such portion of the proceeds received by them respectively as may be required for the payment of the ancestor's debts. Maxwell v. Smith, 86 Tenn. 539, 8 S.W. 340, 1888 Tenn. LEXIS 7 (1888); Neilson v. Weber, 107 Tenn. 161, 64 S.W. 20, 1901 Tenn. LEXIS 68 (1901).

6. Affirmative Showing of Absence of Debts.

Devise of land after payment of debts and legacies vests no title in devisee until it is affirmatively shown that the debts and legacies are paid. Gordon v. Overton, 16 Tenn. 121, 1835 Tenn. LEXIS 57 (1835).

7. Part of Devise Unaliened.

Unsold shares are liable for the ancestor's entire indebtedness which the personal estate is insufficient to pay, and not merely for their ratable proportion thereof. As between the heirs or devisees, the burden should be borne ratably, and they are entitled, as among themselves, to have the lands marshaled, upon a bill filed for that purpose; but the right will not interfere with the right of the creditors. Jordan v. Maney, 78 Tenn. 135, 1882 Tenn. LEXIS 154 (1882); Maxwell v. Smith, 86 Tenn. 539, 8 S.W. 340, 1888 Tenn. LEXIS 7 (1888).

8. Rents and Profits.

Rents becoming due or maturing before the death of the landlord go to his personal representative as assets of the personal estate. Rowan v. Riley, 65 Tenn. 67, 1873 Tenn. LEXIS 301 (1873).

Where the administrator receives the rents of land descended to minor heirs, he will be treated as a guardian by intrusion on their estate, and such rents will be treated as having passed to the proper possession of the minor heirs for whom they were held, so as to prevent the appropriation of the same to the payment of the ancestor's debt for the purchase money constituting a vendor's lien on the land. Moore v. Knight, 74 Tenn. 427, 1880 Tenn. LEXIS 270 (1880).

The heirs will lose the rents where the administrator is permitted to appropriate them to the payment of the debts of their ancestor. Grimstead v. Huggins, 81 Tenn. 728, 1884 Tenn. LEXIS 93 (1884).

The devisee is entitled to the rents and profits of the land devised to him until the same is sold to pay the debts of the testator. Smith v. Heirs & Creditors of Thomas, 82 Tenn. 324, 1884 Tenn. LEXIS 130 (1884); Neilson v. Weber, 107 Tenn. 161, 64 S.W. 20, 1901 Tenn. LEXIS 68 (1901).

9. Partition Sale — Effect.

There is no lien for the debts of a decedent on his lands, after a partition sale thereof, made before the commencement of an action or the suing out of process against the heirs, even though the lands were purchased by the heirs, with knowledge of the existence of unpaid claims, where it appeared at the time that the personal estate was sufficient to pay the debts, as alleged in the petition for the partition sale, joined in by the personal representative. However, the heirs were personally liable for their respective proportionate shares of the ancestor's debts which his personal estate was insufficient to pay. Livingston v. Noe, 69 Tenn. 55, 1878 Tenn. LEXIS 42 (1878).

66-3-204. Bona fide purchasers protected.

Lands, tenements, and hereditaments, bona fide aliened before the action brought, shall not be liable to such execution.

Code 1858, § 1765 (deriv. Acts 1789, ch. 39, § 3); Shan., § 3156; Code 1932, § 7838; T.C.A. (orig. ed.), § 64-307.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 854.

NOTES TO DECISIONS

1. Alienation — What Constitutes.

The term “alien” implies the absolute divestiture of all title in the grantor and the vesting of it in the grantee, and also a surrender of the possession of the land conveyed. A conveyance by mortgage or deed of trust is not an alienation, and such conveyance to secure a preexisting debt does not constitute a bona fide alienation. The alienation must not only be bona fide, but it must be absolute to protect the grantee. Maydwell v. Maydwell, 56 Tenn. 571, 1872 Tenn. LEXIS 177 (1872); Camp v. Sherley, 77 Tenn. 255, 1882 Tenn. LEXIS 48 (1882); Buntyn v. Holmes, 77 Tenn. 319, 1882 Tenn. LEXIS 57 (1882).

2. Alienation by Heir or Devisee of Ancestor's Heir or Devisee.

Where the heir or devisee dies without alienating the land, his heir or devisee cannot, even before action brought or process sued out to subject the land to the payment of the ancestor's debts, alienate the same so as to defeat the claims of the creditors of the original ancestor. The statute applies only to the ancestor's own immediate heir or devisee, and not to the heir or devisee of the ancestor's heir or devisee. Maydwell v. Maydwell, 56 Tenn. 571, 1872 Tenn. LEXIS 177 (1872).

3. Bona Fide Purchaser — Status.

The heir or devisee is so far the owner of the land that if, before any proceeding or suit is instituted to subject the same to sale for the payment of the ancestor's debts, he makes a bona fide conveyance of the land, the bona fide purchaser, paying for the same before notice of the indebtedness of the ancestor's estate, gets a good title. Smith v. Heirs & Creditors of Thomas, 82 Tenn. 324, 1884 Tenn. LEXIS 130 (1884); Maxwell v. Smith, 86 Tenn. 539, 8 S.W. 340, 1888 Tenn. LEXIS 7 (1888); Raht v. Meek, 89 Tenn. 274, 14 S.W. 777, 1890 Tenn. LEXIS 47 (1890); Neilson v. Weber, 107 Tenn. 161, 64 S.W. 20, 1901 Tenn. LEXIS 68 (1901).

4. —Discovery of Will After Purchase from Heir.

Title acquired 11 years after testator's death by an innocent purchaser from the heir of such testator, who was supposed to have died intestate, prevails over the rights of remaindermen under a will later discovered and probated 19 years after testator's death. Wright v. Eakin, 151 Tenn. 681, 270 S.W. 992, 1924 Tenn. LEXIS 95 (1925).

5. —Debt Known to Purchaser's Attorney — Effect.

A bona fide purchaser of lands will not be charged with notice of his attorney's knowledge of the existence of the indebtedness against the ancestor's estate, where it does not appear that the attorney had this knowledge at the date of the purchase, or that he acquired it in the matter and course of his employment. Neilson v. Weber, 107 Tenn. 161, 64 S.W. 20, 1901 Tenn. LEXIS 68 (1901).

6. Suggestion of Insolvency of Estate — Effect.

Though there is a suggestion of insolvency of the decedent's estate, made on the day after the grant of administration, but not followed by any subsequent step for more than 15 months, a purchaser from the heir previous to any further steps is not affected with constructive notice of indebtedness of the estate for which the lands might be held liable, for the suggestion of insolvency, in a large number of cases, is merely a precautionary measure. The foregoing rule was applied where the purchaser knew nothing of any debts against the estate when he bought the land, and was assured by his vendor, one of the heirs, that there were no such debts. Neilson v. Weber, 107 Tenn. 161, 64 S.W. 20, 1901 Tenn. LEXIS 68 (1901).

7. Partition Sale Purchaser with Knowledge of Debts.

A purchaser of a decedent's lands at a partition sale thereof, made before the commencement of an action or the suing out of process against the heirs, even though the purchaser be one of the heirs, with knowledge of the existence of unpaid claims, where it appeared at the time that the personal estate was sufficient to pay debts, as alleged in the petition for the partition sale, joined in by the personal representative, may be a bona fide purchaser within the sense of the statute. Livingston v. Noe, 69 Tenn. 55, 1878 Tenn. LEXIS 42 (1878).

8. Burden of Proof.

In order to avoid the subjection of land purchased from the heir or devisee to the payment of the ancestor's debts, even though such purchase was made before action brought or process sued out to subject the land to the payment of debts, the burden is upon such purchaser to show that his purchase was bona fide, which could not be the case, if he purchased with notice of debts due from the ancestor, that might be made a charge against the land in the hands of the heir or devisee by any proceeding known to our law. Gibson v. Jones, 81 Tenn. 684, 1884 Tenn. LEXIS 87 (1884); Raht v. Meek, 89 Tenn. 274, 14 S.W. 777, 1890 Tenn. LEXIS 47 (1890); Neilson v. Weber, 107 Tenn. 161, 64 S.W. 20, 1901 Tenn. LEXIS 68 (1901); National Bank of Commerce v. Chatfield, Woods & Co., 118 Tenn. 481, 101 S.W. 765, 1907 Tenn. LEXIS 58, 10 L.R.A. (n.s.) 801 (1907).

Burden of proof is upon purchaser of land from heir where estate of decedent is insolvent to show that he purchased land in good faith. Yager v. Turbeville, 1 Tenn. Ch. App. 227 (1901).

Collateral References.

Corporation which subsequently becomes insolvent, right of subsequent creditors or their representatives to complain of voluntary transfer by. 117 A.L.R. 1266.

Good faith of grantee as affecting right to attack voluntary conveyance. 17 A.L.R. 732.

Insurance by insolvent on his life, for benefit of relatives, right of subsequent creditors to complain of. 31 A.L.R. 75, 34 A.L.R. 838.

Notice of fraud to purchaser from or through bona fide purchaser as affecting former's right to protection. 63 A.L.R. 1367.

Right as between creditors of grantor or transferor and those of grantee or transferee. 148 A.L.R. 520.

Right of grantee, mortgagee, or transferee in instrument fraudulent as to creditors to protection to extent of consideration paid by him. 79 A.L.R. 132.

Right of grantee, or his privies, to maintain suit or proceeding for affirmative relief where claim is made or anticipated that conveyance was made with intention on part of grantor, but without actual fraud by grantee, to defraud former's creditors. 128 A.L.R. 1504.

Rights as between creditors of fraudulent grantor where one or more of them, in payment of or as security for his debt, received deed or mortgage from fraudulent grantee. 114 A.L.R. 406.

Surety or one secondarily liable, right of, to bring an action before payment of obligation to set aside fraudulent conveyances by principal. 71 A.L.R. 354.

Taxes or encumbrances, right of grantee or transferee to be reimbursed for expenditures in payment of, where conveyance or transfer is in fraud of creditors. 8 A.L.R. 527.

Part 3
Uniform Fraudulent Transfer Act

66-3-301. Short title.

This part may be cited as the “Uniform Fraudulent Transfer Act.”

Acts 2003, ch. 42, § 1.

Compiler's Notes. Former Part 3, §§ 66-3-30166-3-325 (Acts 1919, ch. 125, §§ 1-12; Shan. Supp., §§ 3143a1 — 3143a12; Code 1932, §§ 7271-7282; T.C.A. (orig. ed.), §§ 64-308 — 64-321; Acts 1998, ch. 902, § 1), concerning the uniform law of fraudulent conveyances and devises, was repealed by Acts 2003, ch. 42, § 1, effective July 1, 2003. See this part for similar provisions.

Acts 2003, ch. 42, § 2 provided that the Tennessee Code Commission was requested to include the official comments of the National Commissioners on Uniform State Laws in any publication containing the Tennessee Uniform Fraudulent Transfers Act.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 24.

Tennessee Jurisprudence, 13 Tenn. Juris., Fraudulent and Voluntary Conveyances, §§ 2, 4, 41, 42.

Law Reviews.

Creditors' Rights and Security Transactions — 1961 Tennessee Survey (II) (Forrest W. Lacey), 15 Vand. L. Rev. 856 (1962).

Attorney General Opinions. Return of campaign contributions, OAG 07-101, 2007 Tenn. AG LEXIS 99 (7/9/07).

Collateral References.

Rights in respect of engagement and courtship presents when marriage does not ensue. 44 A.L.R.5th 1.

66-3-302. Part definitions.

As used in this part:

  1. “Affiliate” means:
    1. A person who directly or indirectly owns, controls, or holds with power to vote, twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person who holds the securities:
      1. As a fiduciary or agent without sole discretionary power to vote the securities; or
      2. Solely to secure a debt, if the person has not exercised the power to vote;
    2. A corporation twenty percent (20%) or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor or a person who directly or indirectly owns, controls, or holds with power to vote, twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person who holds the securities:
      1. As a fiduciary or agent without sole power to vote the securities; or
      2. Solely to secure a debt, if the person has not in fact exercised the power to vote;
    3. A person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or
    4. A person who operates the debtor's business under a lease or other agreement or controls substantially all of the debtor's assets;
  2. “Asset” means property of a debtor, but the term does not include:
    1. Property to the extent it is encumbered by a valid lien;
    2. Property to the extent it is generally exempt under nonbankruptcy law; or
    3. An interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one (1) tenant;
  3. “Claim” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured;
  4. “Creditor” means a person who has a claim;
  5. “Debt” means liability on a claim;
  6. “Debtor” means a person who is liable on a claim;
  7. “Insider” includes:
    1. If the debtor is an individual:
      1. A relative of the debtor or of a general partner of the debtor;
      2. A partnership in which the debtor is a general partner;
      3. A general partner in a partnership described in subdivision (7)(A)(ii); or
      4. A corporation of which the debtor is a director, officer, or person in control;
    2. If the debtor is a corporation:
      1. A director of the debtor;
      2. An officer of the debtor;
      3. A person in control of the debtor;
      4. A partnership in which the debtor is a general partner;
      5. A general partner in a partnership described in subdivision (7)(B)(iv); or
      6. A relative of a general partner, director, officer, or person in control of the debtor;
    3. If the debtor is a partnership:
      1. A general partner in the debtor;
      2. A relative of a general partner in, or a general partner of, or a person in control of the debtor;
      3. Another partnership in which the debtor is a general partner;
      4. A general partner in a partnership described in subdivision (7)(C)(iii); or
      5. A person in control of the debtor;
    4. An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and
    5. A managing agent of the debtor;
  8. “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien;
  9. “Person” means an individual, partnership, corporation, association, organization, government or governmental subdivision or agency, business trust, estate, trust, or any other legal or commercial entity;
  10. “Property” means anything that may be the subject of ownership;
  11. “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree;
  12. “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance; and
  13. “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

Acts 2003, ch. 42, § 1.

Law Reviews.

Yes, Virginia, Tax Loopholes Still Exist: An Examination of the Tennessee Community Property Trust Act of 2010 (J. Paul Singleton), 42 U. Mem. L. Rev. 369 (2011).

NOTES TO DECISIONS

1. Insiders.

With the exception of arguing that all of the company's transfers were made to an insider, the insurance agency, T.C.A. § 66-3-302, the plaintiff failed to show how each of the transfers triggered any of the factors that may be considered in determining actual intent under T.C.A. § 66-3-305(a). However, even with the existence of at least one such factor, the evidence preponderated against a finding that the transfers were made with the actual intent to defraud the plaintiff; indeed, given the evidence offered at trial concerning the checks, it appeared more likely than not that the transfers were made by the company to the insurance agency for a whole host of business reasons, and thus, the transfers were not fraudulent under T.C.A. § 66-3-305(a)(1). Nippert v. Jackson, 860 F. Supp. 2d 554, 2012 U.S. Dist. LEXIS 35109 (M.D. Tenn. Mar. 15, 2012).

2. Fraudulent Transfer.

Trial court properly denied a decedent's daughter and her husband a new trial because material evidence supported the verdict that the daughter transferred her certificate of deposit (CD) and combined it with the husband's CD to create a joint CD with the actual intent to hinder, delay, or defraud the decedent's estate; the consolidation of the CDs allowed either the daughter or the husband, an insider, to cash the CD out, and there was no credible explanation for the consolidation of the CDs. Teague v. Kidd, — S.W.3d —, 2017 Tenn. App. LEXIS 351 (Tenn. Ct. App. May 25, 2017).

Government was permitted to recover unpaid taxes from the widow and estate under Tennessee law, because the widow and estate's extensive emphasis on their due diligence and lack of knowledge of illegality did not shield them from the sham nature of the transaction and absolve them of transferee liability. Hawk v. Comm'r,  — F.3d —, 2019 FED App. 92P, 2019 U.S. App. LEXIS 14365 (6th Cir. May 15, 2019).

COMMENTS TO OFFICIAL TEXT

  1. The definition of “affiliate” is derived from § 101(2) of the Bankruptcy Code [11 U.S.C. § 101(2)].
  2. The definition of “asset” is substantially to the same effect as the definition of “assets” in § 1 of the Uniform Fraudulent Conveyance Act [former § 66-3-301(1)]. The definition in this Act, unlike that in the earlier Act, does not, however require a determination that the property is liable for the debts of the debtor. Thus, an unliquidated claim for damages resulting from personal injury or a contingent claim of a surety for reimbursement, contribution, or subrogation may be counted as an asset for the purpose of determining whether the holder of the claim is solvent as a debtor under § 2 of this Act [T.C.A. § 66-3-303], although applicable law may not allow such an asset to be levied on and sold by a creditor. Cf.  Manufacturers & Traders Trust Co. v. Goldman (In re Ollag Construction Equipment Corp.), 578 F.2d 904, 907-09 (2d Cir. 1978).

    Subparagraphs (i), (ii), and (iii) provide clarification by excluding from the term not only generally exempt property but also an interest in a tenancy by the entirety in many states and an interest that is generally beyond reach by unsecured creditors because subject to a valid lien. This Act, like its predecessor and the Statute of 13 Elizabeth, declares rights and provides remedies for unsecured creditors against transfers that impede them in the collection of their claims. The laws protecting valid liens against impairment by levying creditors, exemption statutes, and the rules restricting levyability of interest in entireties property are limitations on the rights and remedies of unsecured creditors, and it is therefore appropriate to exclude property interests that are beyond the reach of unsecured creditors from the definition of “asset” for the purposes of this Act.

    A creditor of a joint tenant or tenant in common may ordinarily collect a judgment by process against the tenant's interest, and in some states a creditor of a tenant by the entirety may likewise collect a judgment by process against the tenant's interest. See 2 American Law of Property 10, 22, 28-32 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy, 48 Am.Bankr.L.J. 255, 258-59 (1974). The levyable interest of such a tenant is included as an asset under this Act.

    The definition of “assets” in the Uniform Fraudulent Conveyance Act excluded property that is exempt from liability for debts. The definition did not, however, exclude all property that cannot be reached by a creditor through judicial proceedings to collect a debt. Thus, it included the interest of a tenant by the entirety although in nearly half the states such an interest cannot be subjected to liability for a debt unless it is an obligation owed jointly by the debtor with his or her cotenant by the entirety. See 2 American Law of Property 29 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy, 48 Am.Bankr.L.J. 255, 258 (1974). The definition in this Act requires exclusion of interests in property held by tenants by the entirety that are not subject to collection process by a creditor without a right to proceed against both tenants by the entirety as joint debtors.

    The reference to “generally exempt” property in § 1(2)(ii) [T.C.A. § 66-3-302(2)(B)] recognizes that all exemptions are subject to exceptions. Creditors having special rights against generally exempt property typically include claimants for alimony, taxes, wages, the purchase price of the property, and labor or materials that improve the property. See Uniform Exemptions Act § 10 and the accompanying Comment. The fact that a particular creditor may reach generally exempt property by resorting to judicial process does not warrant its inclusion as an asset in determining whether the debtor is insolvent.

    Since this Act is not an exclusive law on the subject of voidable transfers and obligations (see Comment (8) to § 4 [T.C.A. § 66-3-305, Comment (8)] infra ), it does not preclude the holder of a claim that may be collected by process against property generally exempt as to other creditors from obtaining relief from a transfer of such property that hinders, delays, or defrauds the holder of such a claim. Likewise the holder of an unsecured claim enforceable against tenants by the entirety is not precluded by the Act from pursuing a remedy against a transfer of property held by the entirety that hinders, delays, or defrauds the holder of such a claim.

    Nonbankruptcy law is the law of a state or federal law that is not part of the Bankruptcy Code, Title 11 of the United States Code. The definition of an “asset” thus does not include property that would be subject to administration for the benefit of creditors under the Bankruptcy Code unless it is subject under other applicable law, state or federal, to process for the collection of a creditor's claim against a single debtor.

  3. The definition of “claim” is derived from § 101(4) of the Bankruptcy Code [11 U.S.C. § 101(5)]. Since the purpose of this Act is primarily to protect unsecured creditors against transfers and obligations injurious to their rights, the words “claim” and “debt” as used in the Act generally have reference to an unsecured claim and debt. As the context may indicate, however, usage of the terms is not so restricted. See, e.g.  §§ 1(1)(i)(B) and 1(8) [T.C.A. § 66-3-302(1)(A)(ii) and (8)].
  4. The definition of “creditor” in combination with the definition of “claim” has substantially the same effect as the definition of “creditor” under § 1 of the Uniform Fraudulent Conveyance Act [former § 66-3-301(3)]. As under that Act, the holder of an unliquidated tort claim or a contingent claim may be a creditor protected by this Act.
  5. The definition of “debt” is derived from § 101(11) of the Bankruptcy Code [11 U.S.C. § 101(12)].
  6. The definition of “debtor” is new.
  7. The definition of “insider” is derived from § 101(28) of the Bankruptcy Code [11 U.S.C. § 101(31)]. The definition has been restricted in clauses (i)(C), (ii)(E), and (iii)(D) [T.C.A. § 66-3-301(7)(a)(iii), (7)(B)(v), and (7)(C)(iv)] to make clear that a partner is not an insider of an individual, corporation, or partnership if any of these latter three persons is only a limited partner. The definition of “insider” in the Bankruptcy Code does not purport to make a limited partner an insider of the partners or of the partnership with which the limited partner is associated, but it is susceptible of a contrary interpretation and one which would extend unduly the scope of the defined relationship when the limited partner is not a person in control of the partnership. The definition of “insider” in this Act also differs from the definition in the Bankruptcy Code in omitting the reference in 11 U.S.C. § 101(28)(D) [11 U.S.C. § 101(31)(D)] to an elected official or relative of such an official as an insider of a municipality. As in the Bankruptcy Code (see 11 U.S.C. § 102(3)), the word “includes” is not limiting, however. Thus, a court may find a person living with an individual for an extended time in the same household or as a permanent companion to have the kind of close relationship intended to be covered by the term “insider.” Likewise, a trust may be found to be an insider of a beneficiary.
  8. The definition of “lien” is derived from paragraphs (30), (31), (43), and (45) of § 101 of the Bankruptcy Code [11 U.S.C. § 101(36), (37), (51), and (53)], which define “judicial lien,” “lien,” “security interest,” and “statutory lien” respectively.
  9. The definition of “person” is adapted from paragraphs (28) and (30) of § 1-201 of the Uniform Commercial Code [T.C.A. § 47-1-201], defining “organization” and “person” respectively.
  10. The definition of “property” is derived from § 1-201(33) of the Uniform Probate Code. Property includes both real and personal property, whether tangible or intangible, and any interest in property, whether legal or equitable.
  11. The definition of “relative” is derived from § 101(37) of the Bankruptcy Code [11 U.S.C. § 101(45)] but is explicit in its references to the spouse of a debtor in view of uncertainty as to whether the common law determines degrees of relationship by affinity.
  12. The definition of “transfer” is derived principally from § 101(48) of the Bankruptcy Code [11 U.S.C. § 101(54)]. The definition of “conveyance” in § 1 of the Uniform Fraudulent Conveyance Act [former § 66-3-301(2)] was similarly comprehensive, and the references in this Act to “payment of money, release, lease, and the creation of a lien or incumbrance” are derived from the Uniform Fraudulent Conveyance Act. While the definition in the Uniform Fraudulent Conveyance Act did not explicitly refer to an involuntary transfer, the decisions under that Act were generally consistent with an interpretation that covered such a transfer. See, e.g. , Hearn  45 St. Corp. v. Jano, 283 N.Y. 139, 27 N.E.2d 814, 128 A.L.R. 1285 (1940) (execution and foreclosure sales); Lefkowitz v. Finkelstein Trading Corp., 14 F.Supp. 898, 899 (S.D.N.Y. 1936) (execution sale); Langan v. First Trust & Deposit Co., 277 App.Div. 1090, 101 N.Y.S.2d 36 (4th Dept. 1950), aff'd , 302 N.Y. 932, 100 N.E.2d 189 (1951) (mortgage foreclosure); Catabene v. Wallner, 16 N.J.Super. 597, 602, 85 A.2d 300, 302 (1951) (mortgage foreclosure).
  13. The definition of “valid lien” is new. A valid lien includes an equitable lien that may not be defeated by a judicial lien creditor. See, e.g., Pearlman v. Reliance Insurance Co., 371 U.S. 132, 136 (1962) (upholding a surety's equitable lien in respect to a fund owing a bankrupt contractor).

66-3-303. Insolvency.

  1. A debtor is insolvent if the sum of the debtor's debts is greater than all of the debtor's assets, at a fair valuation.
  2. A debtor who is generally not paying such debtor's debts as they become due is presumed to be insolvent.
  3. A partnership is insolvent under subsection (a) if the sum of the partnership's debts is greater than the aggregate of all of the partnership's assets, at a fair valuation, and the sum of the excess of the value of each general partner's nonpartnership assets over the partner's nonpartnership debts.
  4. Assets under this section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this part.
  5. Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.

Acts 2003, ch. 42, § 1.

Textbooks. Tennessee Jurisprudence, 13 Tenn. Juris., Fraudulent and Voluntary Conveyances, § 4.

COMMENTS TO OFFICIAL TEXT

  1. Subsection (a) is derived from the definition of “insolvent” in § 101(29)(A) of the Bankruptcy Code [11 U.S.C. § 101(32)(A)]. The definition in subsection (a) and the correlated definition of partnership insolvency in subsection (c) contemplate a fair valuation of the debts as well as the assets of the debtor. As under the definition of the same term in § 2 of the Uniform Fraudulent Conveyance Act [former § 66-3-302] exempt property is excluded from the computation of the value of the assets. See § 1(2) supra  [T.C.A. § 66-3-302(2)]. For similar reasons interests in valid spendthrift trusts and interests in tenancies by the entireties that cannot be severed by a creditor of only one tenant are not included. See the Comment to § 1(2) supra  [T.C.A. § 66-3-302, Comment (2)]. Since a valid lien also precludes an unsecured creditor from collecting the creditor's claim from the encumbered interest in a debtor's property, both the encumbered interest and the debt secured thereby are excluded from the computation of insolvency under this Act. See § 1(2) supra  [T.C.A. § 66-3-302(2)] and subsection (e) of this section.

    The requirement of § 550(b)(1) of the Bankruptcy Code [11 U.S.C. § 550(b)(1)] that a transferee be “without knowledge of the voidability of the transfer” in order to be protected has been omitted as inappropriate. Knowledge of the facts rendering the transfer voidable would be inconsistent with the good faith that is required of a protected transferee. Knowledge of the voidability of a transfer would seem to involve a legal conclusion. Determination of the voidability of the transfer ought not to require the court to inquire into the legal sophistication of the transferee.

  2. Section 2(b) [T.C.A. § 66-3-303(b)] establishes a rebuttable presumption of insolvency from the fact of general nonpayment of debts as they become due. Such general nonpayment is a ground for the filing of an involuntary petition under § 303(h)(1) of the Bankruptcy Code [11 U.S.C. § 303(h)(1)]. See also U.C.C. § 1-201(23) [T.C.A. § 47-1-201], which declares a person to be “insolvent” who “has ceased to pay his debts in the ordinary course of business.” The presumption imposes on the party against whom the presumption is directed the burden of proving that the nonexistence of insolvency as defined in § 2(a) [T.C.A. § 66-3-303(a)] is more probable than its existence. See Uniform Rules of Evidence (1974 Act), Rule 301(a). The 1974 Uniform Rule 301(a) conforms to the Final Draft of Federal Rule 301 as submitted to the United States Supreme Court by the Advisory Committee on Federal Rules of Evidence. “The so-called ‘bursting bubble’ theory, under which a presumption vanishes upon the introduction of evidence which would support a finding of the nonexistence of the presumed fact, even though not believed, is rejected as according presumptions too ‘slight and evanescent’ an effect.” Advisory Committee's Note to Rule 301. See also 1 J.Weinstein & M.Berger, Evidence 301 [01] (1982).

    The presumption is established in recognition of the difficulties typically imposed on a creditor in proving insolvency in the bankruptcy sense, as provided in subsection (a). See generally Levit, The Archaic Concept of Balance-Sheet Insolvency, 47 Am.Bankr.L.J. 215 (1973). Not only is the relevant information in the possession of a noncooperative debtor but the debtor's records are more often than not incomplete and inaccurate. As a practical matter, insolvency is most cogently evidenced by a general cessation of payment of debts, as has long been recognized by the laws of other countries and is now reflected in the Bankruptcy Code. See Honsberger, Failure to Pay One's Debts Generally as They Become Due: The Experience of France and Canada, 54 Am.Bankr.L.J. 153 (1980); J. MacLachlan, Bankruptcy 13, 63-64, 436 (1956). In determining whether a debtor is paying its debts generally as they become due, the court should look at more than the amount and due dates of the indebtedness. The court should also take into account such factors as the number of the debtor's debts, the proportion of those debts not being paid, the duration of the nonpayment, and the existence of bona fide disputes or other special circumstances alleged to constitute an explanation for the stoppage of payments. The court's determination may be affected by a consideration of the debtor's payment practices prior to the period of alleged nonpayment and the payment practices of the trade or industry in which the debtor is engaged. The case law that has developed under § 303(h)(1) of the Bankruptcy Code [11 U.S.C. § 303(h)(1)] has not required a showing that a debtor has failed or refused to pay a majority in number and amount of his or her debts in order to prove general nonpayment of debts as they become due. See, e.g. , Hill v. Cargill, Inc. (In re Hill), 8 B.R. 779, 3 C.B.C.2d 920 (Bk.D.Minn. 1981) (nonpayment of three largest debts held to constitute general nonpayment, although small debts were being paid); In re All Media Properties, Inc., 5 B.R. 126, 6 B.C.D. 586, 2 C.B.C.2d 449 (Bk.S.D.Tex. 1980) (missing significant number of payments or regularly missing payments significant in amount said to constitute general nonpayment; missing payments on more than 50% of aggregate of claims said not to be required to show general nonpayment; nonpayment for more than 30 days after billing held to establish nonpayment of a debt when it is due); In re Kreidler Import Corp., 4 B.R. 256, 6 B.C.D. 608, 2 C.B.C.2d 159 (Bk.D.Md. 1980) (nonpayment of one debt constituting 97% of debtor's total indebtedness held to constitute general nonpayment). A presumption of insolvency does not arise from nonpayment of a debt as to which there is a genuine bona fide dispute, even though the debt is a substantial part of the debtor's indebtedness. Cf. 11 U.S.C. § 303(h)(1), as amended by § 426(b) of Public Law No. 98-882, the Bankruptcy Amendments and Federal Judgeship Act of 1984.

  3. Subsection (c) is derived from the definition of partnership insolvency in § 101(29)(B) of the Bankruptcy Code [11 U.S.C. § 101(32)(B)]. The definition conforms generally to the definition of the same term in § 2(2) of the Uniform Fraudulent Conveyance Act [former § 66-3-303].
  4. Subsection (d) follows the approach of the definition of “insolvency” in § 101(29) of the Bankruptcy Code [11 U.S.C. § 101(32)] by excluding from the computation of the value of the debtor's assets any value that can be realized only by avoiding a transfer of an interest formerly held by the debtor or by discovery or pursuit of property that has been fraudulently concealed or removed.
  5. Subsection (e) is new. It makes clear the purpose not to render a person insolvent under this section by counting as a debt an obligation secured by property of the debtor that is not counted as an asset. See also Comments to §§ 1(2) and 2(a) supra  [§§ 66-3-302, Comment (2), and 66-3-303, Comment (1)].

66-3-304. Value.

  1. Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the promisor's business to furnish support to the debtor or another person.
  2. For the purposes of §§ 66-3-305(a)(2) and 66-3-306, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust, or security agreement.
  3. A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.

Acts 2003, ch. 42, § 1.

Law Reviews.

Rights of Creditors in Insurance — The Tennessee Exemption Statutes (Paul J. Hartman), 5 Vand. L. Rev. 760 (1952).

NOTES TO DECISIONS

1. Sufficiency of Consideration.

Where a bankruptcy debtor issued quit claim deeds to lenders in lieu of foreclosure to obtain an extension of the date of a foreclosure sale, and the deeds were retrieved from escrow and recorded after the debtor failed to satisfy the mortgage debts before expiration of the period of extension, T.C.A. § 66-3-304(b) did not apply to establish that the lenders gave reasonably equivalent value for the deeds for purposes of fraudulent transfer, since recording of the deeds even when consensual, did not by itself effectuate a regularly conducted, non-collusive foreclosure sale. Webb Mtn, LLC v. Exec. Realty P'ship, L.P. (in re Webb Mtn, LLC), 414 B.R. 308, 2009 Bankr. LEXIS 399 (Bankr. E.D. Tenn. Feb. 11, 2009).

Collateral References.

Transaction in consideration of discharge of antecedent debt owed by one other than grantor as constituting “fair consideration” under Uniform Fraudulent Conveyance Act. 30 A.L.R.2d 1209.

COMMENTS TO OFFICIAL TEXT

  1. This section defines “value” as used in various contexts in this Act, frequently with a qualifying adjective. The word appears in the following sections:

    4(a)(2) [T.C.A. § 66-3-305(a)(2)](“reasonably equivalent value”);

    4(b)(8) [T.C.A. § 66-3-305(b)(8)] (“value.… reasonably equivalent”);

    5(a) [T.C.A. § 66-3-306(a)] (“reasonably equivalent value”);

    5(b) (“present, reasonably equivalent value”);

    8(a) [T.C.A. § 66-3-309(a)] (“reasonably equivalent value”);

    8(b), (c), (d), and (e) [T.C.A. § 66-3-309(b), (c), and (d)] (“value”);

    8(f)(1) [T.C.A. § 66-3-309(f)(1)] (“new value”); and

    8(f)(3) [T.C.A. § 66-3-309(f)(3)] (“present value”).

  2. Section 3(a) [T.C.A. § 66-3-304] is adapted from § 548(d)(2)(A) of the Bankruptcy Code [11 U.S.C. § 548(d)(2)(A)]. See also § 3(a) of the Uniform Fraudulent Conveyance Act [former § 66-3-304(1)]. The definition in Section 3 [T.C.A. § 66-3-304] is not exclusive. “Value” is to be determined in light of the purpose of the Act to protect a debtor's estate from being depleted to the prejudice of the debtor's unsecured creditors. Consideration having no utility from a creditor's viewpoint does not satisfy the statutory definition. The definition does not specify all the kinds of consideration that do not constitute value for the purposes of this Act — e.g., love and affection. See, e.g. , United States v. West, 299 F.Supp. 661, 666 (D.Del. 1969).
  3. Section 3(a) [T.C.A. § 66-3-304(b)] does not indicate what is “reasonably equivalent value” for a transfer or obligation. Under this Act, as under § 548(a)(2) of the Bankruptcy Code [11 U.S.C. § 548(a)(2)], a transfer for security is ordinarily for a reasonably equivalent value notwithstanding a discrepancy between the value of the asset transferred and the debt secured, since the amount of the debt is the measure of the value of the interest in the asset that is transferred. See, e.g. , Peoples-Pittsburgh Trust Co. v. Holy Family Polish Nat'l Catholic Church, Carnegie, Pa., 341 Pa. 390, 19 A.2d 360 (1941). If, however, a transfer purports to secure more than the debt actually incurred or to be incurred, it may be found to be for less than a reasonably equivalent value. See e.g. , In re Peoria Braumeister Co., 138 F.2d 520, 523 (7th Cir. 1943) (chattel mortgage securing a $3,000 note held to be fraudulent when the debt secured was only $2,500); Hartford Acc. & Indemnity Co. v. Jirasek, 254 Mich. 131, 140, 235 N.W. 836, 839 (1931) (quitclaim deed given as mortgage held to be fraudulent to the extent the value of the property transferred exceeded the indebtedness secured). If the debt is a fraudulent obligation under this Act, a transfer to secure it as well as the obligation would be vulnerable to attack as fraudulent. A transfer to satisfy or secure an antecedent debt owed an insider is also subject to avoidance under the conditions specified in Section 5(b) [§ 66-3-306(b)].
  4. Section 3(a) of the Uniform Fraudulent Conveyance Act [former § 66-3-304(1)] has been thought not to recognize that an unperformed promise could constitute fair consideration. See McLaughlin, Application of the Uniform Fraudulent Conveyance Act, 46 Harv.L.Rev. 404, 414 (1933). Courts construing these provisions of the prior law nevertheless have held unperformed promises to constitute value in a variety of circumstances. See, e.g. , Harper v. Lloyd's Factors, Inc., 214 F.2d 662 (2d Cir. 1954) (transfer of money for promise of factor to discount transferor's purchase-money notes given to fur dealer); Schlecht v. Schlecht, 168 Minn. 168, 176-77, 209 N.W. 883, 886-87 (1926) (transfer for promise to make repairs and improvements on transferor's homestead); Farmer's Exchange Bank v. Oneida Motor Truck Co., 202 Wis. 266, 232 N.W. 536 (1930) (transfer in consideration of assumption of certain of transferor's liabilities); see also Hummel v. Cernocky, 161 F.2d 685 (7th Cir. 1947) (transfer in consideration of cash, assumption of a mortgage, payment of certain debts, and agreement to pay other debts). Likewise a transfer in consideration of a negotiable note discountable at a commercial bank, or the purchase from an established, solvent institution of an insurance policy, annuity, or contract to provide care and accommodations clearly appears to be for value. On the other hand, a transfer for an unperformed promise by an individual to support a parent or other transferor has generally been held voidable as a fraud on creditors of the transferor. See, e.g.,  Springfield Ins. Co. v. Fry, 267 F.Supp. 693 (N.D.Okla. 1967); Sandler v. Parlapiano, 236 App.Div. 70, 258 N.Y.Supp. 88 (1st Dep't 1932); Warwick Municipal Employees Credit Union v. Higham, 106 R.E. 363, 259 A.2d 852 (1969); Hulsether v. Sanders, 54 S.D. 412, 223 N.W. 335 (1929); Cooper v. Cooper, 22 Tenn.App. 473, 477, 124 S.W.2d 264, 267 (1939); Note, Rights of Creditors in Property Conveyed in Consideration of Future Support, 45 Iowa L.Rev. 546, 550-62 (1960). This Act adopts the view taken in the cases cited in determining whether an unperformed promise is value.
  5. Subsection (b) rejects the rule of such cases as Durrett v. Washington Nat. Ins. Co., 621 F.2d 201 (5th Cir. 1980) (nonjudicial foreclosure of a mortgage avoided as a fraudulent transfer when the property of an insolvent mortgagor was sold for less than 70% of its fair value); and Abramson v. Lakewood Bank & Trust Co., 647 F.2d 547 (5th Cir. 1981), cert. denied, 454 U.S. 1164 (1982) (nonjudicial foreclosure held to be fraudulent transfer if made without fair consideration). Subsection (b) adopts the view taken in Lawyers Title Ins. Corp. v. Madrid (In re Madrid), 21 B.R. 424 (B.A.P. 9th Cir. 1982), aff'd on other grounds, 725 F.2d 1197 (9th Cir. 1984), that the price bid at a public foreclosure sale determines the fair value of the property sold. Subsection (b) prescribes the effect of a sale meeting its requirements, whether the asset sold is personal or real property. The rule of this subsection applies to a foreclosure by sale of the interest of a vendee under an installment land contract in accordance with applicable law that requires or permits the foreclosure to be effected by a sale in the same manner as the foreclosure of a mortgage. See G.Osborne, G.Nelson, & D.Whitman, Real Estate Finance Law  83-84, 95-97 (1979). The premise of the subsection is that “a sale of the collateral by the secured party as the normal consequence of default … [is] the safest way of establishing the fair value of the collateral.…” 2 G.Gilmore, Security Interests in Personal Property, 1227 (1965).

    If a lien given an insider for a present consideration is not perfected as against a subsequent bona fide purchaser or is so perfected after a delay following an extension of credit secured by the lien, foreclosure of the lien may result in a transfer for an antecedent debt that is voidable under Section 5(b) infra  [T.C.A. § 66-3-306(b)]. Subsection (b) does not apply to an action under Section 4(a)(1) [T.C.A. § 66-3-305(a)(1)] to avoid a transfer or obligation because made or incurred with actual intent to hinder, delay, or defraud any creditor.

  6. Subsection (c) is an adaptation of § 547(c)(1) of the Bankruptcy Code [11 U.S.C. § 547(c)(1)]. A transfer to an insider for an antecedent debt may be voidable under § 5(b) infra  [T.C.A. § 66-3-306(b)].

66-3-305. Transfers fraudulent as to present and future creditors.

  1. A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
    1. With actual intent to hinder, delay, or defraud any creditor of the debtor; or
    2. Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
      1. Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
      2. Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due.
  2. In determining actual intent under subdivision (a)(1), consideration may be given, among other factors, to whether:
    1. The transfer or obligation was to an insider;
    2. The debtor retained possession or control of the property transferred after the transfer;
    3. The transfer or obligation was disclosed or concealed;
    4. Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
    5. The transfer was of substantially all the debtor's assets;
    6. The debtor absconded;
    7. The debtor removed or concealed assets;
    8. The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
    9. The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
    10. The transfer occurred shortly before or shortly after a substantial debt was incurred; and
    11. The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.

Acts 2003, ch. 42, § 1.

Attorney General Opinions. Creditors' claims under the Tennessee Investment Services Act of 2007.  OAG 11-79, 2011 Tenn. AG LEXIS 81 (11/17/11).

NOTES TO DECISIONS

1. Fraudulent Transfers Not Found.

Transfers were made with the intent to defraud for purposes of 11 U.S.C. § 548 and T.C.A. § 66-3-101 and T.C.A. § 66-3-305 where there was testimony that the debtor's chief scientific officer frequently mentioned the need to protect his assets, that he failed to properly separate the debtor's assets from his “entangled web” of business entities, and his outright fraud in directing the involuntary bankruptcy filing. Holcomb Health Care Servs., LLC v. Quart Ltd., LLC (In re Holcomb Health Care Servs., LLC), 329 B.R. 622, 2004 Bankr. LEXIS 2378 (Bankr. M.D. Tenn. 2004).

Even if the court were to assume that the  insurance agency's stock transfer was made by the owner with the actual intent to hinder, delay, or defraud the plaintiff, T.C.A. § 66-3-305(a)(1), the fact remained that the owner was no longer a defendant in the lawsuit. As to the actual defendant, the insurance agency, the owner's son's status as an insurance agency employee could not, by itself, automatically make the insurance agency a conspirator in a scheme to defraud the plaintiff, and the plaintiff failed to show that the owner's son acted on behalf of the agency when he participated in discussions concerning the underlying transaction. Nippert v. Jackson, 860 F. Supp. 2d 554, 2012 U.S. Dist. LEXIS 35109 (M.D. Tenn. Mar. 15, 2012).

Beginning in 2005, the owner caused the company to write checks to another entity he controlled that totaled $53,632, and without offering many details, the plaintiff claimed that each of those funds transfers was made in furtherance of a conspiracy between the company, the insurance agency, and the other entity to defraud him. Because the evidence in the record did not establish that any of those transfers was fraudulent, the plaintiff's civil conspiracy claim as to those transfers failed; with the exception of arguing that all of the transfers were made to an insider, the plaintiff failed to show how each of those transfers implicated any of the other factors considered in determining actual intent under the Uniform Fraudulent Transfers Act, and there was ample evidence establishing that each of the checks constituted repayments of a loan. Nippert v. Jackson, 860 F. Supp. 2d 554, 2012 U.S. Dist. LEXIS 35109 (M.D. Tenn. Mar. 15, 2012).

With the exception of arguing that all of the company's transfers were made to an insider, the insurance agency, T.C.A. § 66-3-302, the plaintiff failed to show how each of the transfers triggered any of the factors that may be considered in determining actual intent under T.C.A. § 66-3-305(a). However, even with the existence of at least one such factor, the evidence preponderated against a finding that the transfers were made with the actual intent to defraud the plaintiff; indeed, given the evidence offered at trial concerning the checks, it appeared more likely than not that the transfers were made by the company to the insurance agency for a whole host of business reasons, and thus, the transfers were not fraudulent under T.C.A. § 66-3-305(a)(1). Nippert v. Jackson, 860 F. Supp. 2d 554, 2012 U.S. Dist. LEXIS 35109 (M.D. Tenn. Mar. 15, 2012).

Chapter 11 debtor's suit to recover prepetition payments of tax penalties to IRS as fraudulent transfers under 11 U.S.C. § 548(a)(1)(B) and the Tennessee Uniform Fraudulent Transfer Act, T.C.A. § 66-3-301 et seq., was properly dismissed because the fraudulent-transfer statutes were not meant to provide debtors with either a means to avoid tax penalties legitimately imposed or a means to recover prepetition payments made in satisfaction of those penalties. Southeast Waffles, LLC v. United States Dep't of Treasury (In re Southeast Waffles, LLC), 2012 FED App. 402P, 2012 U.S. App. LEXIS 24991 (6th Cir. Dec. 6, 2012).

As defendant received a reasonably equivalent value for defendant's membership interests in a limited liability company (LLC), defendant's sale of defendant's LLC membership units to a grantor retained annuity trust was not improper; the sale of defendant's membership units required majority shareholder approval, which was provided in writing by plaintiff. Ingram v. Sohr, — S.W.3d —, 2013 Tenn. App. LEXIS 510 (Tenn. Ct. App. July 31, 2013), appeal denied, — S.W.3d —, 2013 Tenn. LEXIS 1061 (Tenn. Dec. 10, 2013).

Business proved the transfer of the company was to the owner's son, and before the transfer, the owner had been sued or threatened with suit, but the son testified that the owner was 69 years old and not in good health, the parties went to an attorney for advice on the transfer, and the statement of evidence did not show that the business presented any contrary evidence, and thus the business failed to prove that the owner transferred the company to his son with the actual intent to defraud the business. Delta Gypsum, LLC v. Felgemacher, — S.W.3d —, 2017 Tenn. App. LEXIS 261 (Tenn. Ct. App. Apr. 26, 2017).

2. Fraudulent Transfer Found.

Doctor, who sought to recover judgment against corporation, alleged that the owner of the corporation was involved in a fraudulent transfer and that he was entitled to judgment against the owner; the owner took $100,000 from the corporation's accounts receivable and deposited it into his personal bank account and he completely liquidated the remaining assets of the corporation during the litigation. The trial court did not err in finding that the owner's actions were not done in good faith; therefore, the trial court properly found that the corporation made a fraudulent conveyance to the owner and it properly assessed the judgment against the owner, personally. McGehee v. Plunk, 165 S.W.3d 267, 2004 Tenn. App. LEXIS 503 (Tenn. Ct. App. 2004), appeal denied, — S.W.3d —, 2005 Tenn. LEXIS 87 (Tenn. Jan. 31, 2005).

Where debtor made transfers to defendant within applicable reach-back period, trustee established prima facie case for avoidance because he had shown that transfers were made pursuant to Ponzi scheme and thus with actual intent to defraud creditors. Tabor v. Kelly (In re Davis), — B.R. —, 2013 Bankr. LEXIS 5768 (Bankr. W.D. Tenn. Mar. 8, 2013).

Bankruptcy trustee was awarded summary judgment on his claim that he was allowed under 11 U.S.C.S. § 544 and T.C.A. § 66-3-305 to avoid payments a Chapter 7 debtor made to a bank using money he derived from operating a Ponzi scheme because the payments were fraudulent transfers, and that he could recover the amount of payments the debtor made to the bank from the debtor's wife, pursuant to 11 U.S.C.S. § 550, because the payments were made for her benefit; however, the same facts that allowed the trustee to avoid the payments as fraudulent transfers were not sufficient to show that the payments were preferential transfer that could be avoided under 11 U.S.C.S. § 547. Tabor v. Davis (In re Davis), — B.R. —, 2016 Bankr. LEXIS 2311 (Bankr. W.D. Tenn. June 14, 2016).

Trustee who administered a debtor's Chapter 7 bankruptcy estate was awarded a default judgment on her claim that transfers of real and personal property the debtor made to a living trust less than four years before he declared bankruptcy could be avoided under 11 U.S.C.S. § 544 and T.C.A. § 66-3-308 because they were fraudulent; the trust admitted the trustee's allegations that the debtor made the transfers with intent to hinder or defraud his creditors, and that the transfers were constructively fraudulent because the debtor received no consideration for them, when it failed to answer the trustee's complaint, and those admissions were sufficient to establish that the transfers were fraudulent under T.C.A. § 66-3-305. Edwards v. Arledge (In re Arledge), — B.R. —, 2016 Bankr. LEXIS 4014 (Bankr. E.D. Tenn. Nov. 18, 2016).

Trustee who was appointed to administer a debtor's Chapter 7 bankruptcy estate was awarded summary judgment on her claim that the beneficiary of a living trust had to return real and personal property the debtor transferred to the trust less than four years before he declared bankruptcy because the transfers were fraudulent and could be avoided under 11 U.S.C.S. § 544 and T.C.A. § 66-3-308; the beneficiary admitted facts the trustee alleged in her motion for summary judgment when he failed to respond to the motion, and an allegation that the debtor was aware of a pending lawsuit and transferred the property to hinder his creditors was sufficient to establish that the transfers were fraudulent under T.C.A. § 66-3-305. Edwards v. Arledge (In re Arledge), — B.R. —, 2016 Bankr. LEXIS 4015 (Bankr. E.D. Tenn. Nov. 18, 2016).

Trial court properly denied a decedent's daughter and her husband a new trial because material evidence supported the jury's verdict that the daughter transferred her certificate of deposit (CD) and combined it with the husband's CD to create a joint CD with the actual intent to hinder, delay, or defraud the decedent's estate; the consolidation of the CDs allowed either the daughter or the husband to cash the CD out, and there was no credible explanation for the consolidation of the CDs. Teague v. Kidd, — S.W.3d —, 2017 Tenn. App. LEXIS 351 (Tenn. Ct. App. May 25, 2017).

3. Summary Judgment Denied.

Where a Chapter 7 debtor transferred real property to her husband and herself as tenants by the entirety, claiming that she transferred the property, because she thought he would be less worried about obtaining a large loan for her benefit if he had an ownership interest in the real property securing the debt, neither the trustee nor the husband were entitled to summary judgment in the trustee's fraudulent transfer claim under T.C.A. § 66-3-101 and T.C.A. § 66-3-305(a)(1), because there was a genuine issue of material fact as to whether the debtor's intent was fraudulent. Farinash v. Silvey (in re Silvey), 378 B.R. 186, 2007 Bankr. LEXIS 4345 (Bankr. E.D. Tenn. Oct. 10, 2007).

4. Statute of Limitations.

Debtor could amend answer to add cross-claim for fraudulent transfer because it did not unduly delay, transferee did not allege lack of notice, there was no bad faith, filing of bankruptcy and additional fiduciary responsibilities imposed on debtor were significant changes in circumstances that counterbalanced transferee's argument that too much time had passed, there should not be significant additional burden placed on transferee to prepare defense, allowing amendment was not futile given prospect that debtor was not barred by four year statute of limitations and could step into creditor's shoes to pursue fraudulent transfer, and allowing amendment was in best interests of justice given debtor's fiduciary obligations to creditors. River City Resort, Inc. v. Frankenberg (In re River City Resort, Inc.), — B.R. —, 2014 Bankr. LEXIS 2946 (Bankr. E.D. Tenn. July 9, 2014).

5. Transfer Must Be by Debtor.

T.C.A. § 66-3-305 clearly and unambiguously provides that only transfers made by a debtor may be found to be fraudulently conveyed. Therefore, in a case seeking to enforce a judgment for child support and alimony, a trustee was not personally liable under § 66-3-305 based on an allegation that she worked with a debtor/beneficiary to deplete trust assets because the transfers at issue were made by the trustee to the debtor/beneficiary. Taylor v. George, — S.W.3d —, 2015 Tenn. App. LEXIS 119 (Tenn. Ct. App. Mar. 16, 2015), appeal dismissed, — S.W.3d —, 2015 Tenn. LEXIS 481 (Tenn. June 11, 2015).

6. Presumption And Burden of Proof.

Once the business proved two of the statutory factors, the presumption of actual fraud was established and the burden of disproving fraudulent intent shifted to the owner's son. Delta Gypsum, LLC v. Felgemacher, — S.W.3d —, 2017 Tenn. App. LEXIS 261 (Tenn. Ct. App. Apr. 26, 2017).

COMMENTS TO OFFICIAL TEXT

  1. Section 4(a)(1) [T.C.A. § 66-3-305(a)(1)] is derived from § 7 of the Uniform Fraudulent Conveyance Act [former § 66-3-308]. Factors appropriate for consideration in determining actual intent under paragraph (1) [T.C.A. § 66-3-305(A)(1)] are specified in subsection (b).
  2. Section 4(a)(2) [T.C.A. § 66-3-305(a)(2)] is derived from §§ 5 and 6 of the Uniform Fraudulent Conveyance Act [former §§ 66-3-305 — 66-3-307] but substitutes “reasonably equivalent value” for “fair consideration.” The transferee's good faith was an element of “fair consideration” as defined in § 3 of the Uniform Fraudulent Conveyance Act [former § 66-3-304], and lack of fair consideration was one of the elements of a fraudulent transfer as defined in four sections of the Uniform Act [former §§ 66-3-305 through 66-3-308]. The transferee's good faith is irrelevant to a determination of the adequacy of the consideration under this Act, but lack of good faith may be a basis for withholding protection of a transferee or obligee under § 8 infra  [T.C.A. § 66-3-309].
  3. Unlike the Uniform Fraudulent Conveyance Act as originally promulgated, this Act does not prescribe different tests when a transfer is made for the purpose of security and when it is intended to be absolute. The premise of this Act is that when a transfer is for security only, the equity or value of the asset that exceeds the amount of the debt secured remains available to unsecured creditors and thus cannot be regarded as the subject of a fraudulent transfer merely because of the encumbrance resulting from an otherwise valid security transfer. Disproportion between the value of the asset securing the debt and the size of the debt secured does not, in the absence of circumstances indicating a purpose to hinder, delay, or defraud creditors, constitute an impermissible hindrance to the enforcement of other creditors' rights against the debtor-transferor. Cf . U.C.C. § 9-311 [T.C.A. § 47-9-311].
  4. Subparagraph (i) of § 4(a)(2) [T.C.A. § 66-3-305(a)(2))(A)] is an adaptation of § 5 of the Uniform Fraudulent Conveyance Act [former § 66-3-306] but substitutes “unreasonably small [assets] in relation to the business or transaction” for “unreasonably small capital.” The reference to “capital” in the Uniform Act is ambiguous in that it may refer to net worth or to the par value of stock or to the consideration received for stock issued. The special meanings of “capital” in corporation law have no relevance in the law of fraudulent transfers. The subparagraph focuses attention on whether the amount of all the assets retained by the debtor was inadequate, i.e. , unreasonably small, in light of the needs of the business or transaction in which the debtor was engaged or about to engage.
  5. Subsection (b) is a nonexclusive catalogue of factors appropriate for consideration by the court in determining whether the debtor had an actual intent to hinder, delay, or defraud one or more creditors. Proof of the existence of any one or more of the factors enumerated in subsection (b) may be relevant evidence as to the debtor's actual intent but does not create a presumption that the debtor has made a fraudulent transfer or incurred a fraudulent obligation. The list of factors includes most of the badges of fraud that have been recognized by the courts in construing and applying the Statute of 13 Elizabeth and § 7 of the Uniform Fraudulent Conveyance Act [former § 66-3-308]. Proof of the presence of certain badges in combination establishes fraud conclusively — i.e. , without regard to the actual intent of the parties — when they concur as provided in § 4(a)(2) or in § 5 [T.C.A. § 66-3-305(a)(2) or § 66-3-306]. The fact that a transfer has been made to a relative or to an affiliated corporation has not been regarded as a badge of fraud sufficient to warrant avoidance when unaccompanied by any other evidence of fraud. The courts have uniformly recognized, however, that a transfer to a closely related person warrants close scrutiny of the other circumstances, including the nature and extent of the consideration exchanged. See 1 G. Glenn, Fraudulent Conveyances and Preferences § 307 (Rev. ed. 1940). The second, third, fourth, and fifth factors listed are all adapted from the classic catalogue of badges of fraud provided by Lord Coke in Twyne's Case, 3 Coke 80b, 76 Eng.Rep. 809 (Star Chamber 1601). Lord Coke also included the use of a trust and the recitation in the instrument of transfer that it “was made honestly, truly, and bona fide,” but the use of the trust is fraudulent only when accompanied by elements or badges specified in this Act, and recitals of “good faith” can no longer be regarded as significant evidence of a fraudulent intent.
  6. In considering the factors listed in § 4(b) [§ 66-3-305(b)] a court should evaluate all the relevant circumstances involving a challenged transfer or obligation. Thus the court may appropriately take into account all indicia negativing as well as those suggesting fraud, as illustrated in the following reported cases:
  1. Whether the transfer or obligation was to an insider: Salomon v. Kaiser (In re Kaiser), 722 F.2d 1574, 1582-83 (2d Cir. 1983) (insolvent debtor's purchase of two residences in the name of his spouse and the creation of a dummy corporation for the purpose of concealing assets held to evidence fraudulent intent); Banner Construction Corp. v. Arnold, 128 So.2d 893 (Fla.Dist.App. 1961) (assignment by one corporation to another having identical directors and stockholders constituted a badge of fraud); Travelers Indemnity Co. v. Cormaney, 258 Iowa 237, 138 N.W.2d 50 (1965) (transfer between spouses said to be a circumstance that shed suspicion on the transfer and that with other circumstances warranted avoidance); Hatheway v. Hanson, 230 Iowa 386, 297 N.W. 824 (1941) (transfer from parent to child said to require a critical examination of surrounding circumstances, which, together with other indicia of fraud, warranted avoidance); Lumpkins v. McPhee, 59 N.M. 442, 286 P.2d 299 (1955) (transfer from daughter to mother said to be indicative of fraud but transfer held not to be fraudulent due to adequacy of consideration and delivery of possession by transferor).
  2. Whether the transferor retained possession or control of the property after the transfer: Harris v. Shaw, 224 Ark. 150, 272 S.W.2d 53 (1954) (retention of property by transferor said to be a badge of fraud and, together with other badges, to warrant avoidance of transfer); Stephens v. Reginstein, 89 Ala. 561, 8 So. 68 (1890) (transferor's retention of control and management of property and business after transfer held material in determining transfer to be fraudulent); Allen v. Massey, 84 U.S. (17 Wall.) 351 (1872) (joint possession of furniture by transferor and transferee considered in holding transfer to be fraudulent); Warner v. Norton, 61 U.S. (20 How.) 448 (1857) (surrender of possession by transferor deemed to negate allegations of fraud).
  3. Whether the transfer or obligation was concealed or disclosed: Walton v. First National Bank, 13 Colo. 265, 22 P. 440 (1889) (agreement between parties to conceal the transfer from the public said to be one of the strongest badges of fraud); Warner v. Norton, 61 U.S. (20 How.) 448 (1857) (although secrecy said to be a circumstance from which, when coupled with other badges, fraud may be inferred, transfer was held not to be fraudulent when made in good faith and transferor surrendered possession); W.T. Raleigh Co. v. Barnett, 253 Ala. 433, 44 So.2d 585 (1950) (failure to record a deed in itself said not to evidence fraud, and transfer held not to be fraudulent).
  4. Whether, before the transfer was made or obligation was incurred, a creditor sued or threatened to sue the debtor: Harris v. Shaw, 224 Ark. 150, 272 S.W.2d 53 (1954) (transfer held to be fraudulent when causally connected to pendency of litigation and accompanied by other badges of fraud); Pergrem v. Smith, 255 S.W.2d 42 (Ky.App. 1953) (transfer in anticipation of suit deemed to be a badge of fraud; transfer held fraudulent when accompanied by insolvency of transferor who was related to transferee); Bank of Sun Prairie v. Hovig, 218 F.Supp. 769 (W.D.Ark. 1963) (although threat or pendency of litigation said to be an indicator of fraud, transfer was held not to be fraudulent when adequate consideration and good faith were shown).
  5. Whether the transfer was of substantially all the debtor's assets: Walbrun v. Babbitt, 83 U.S. (16 Wall.) 577 (1872) (sale by insolvent retail shop owner of all of his inventory in a single transaction held to be fraudulent); Cole v. Mercantile Trust Co., 133 N.Y. 164, 30 N.E. 847 (1892) (transfer of all property before plaintiff could obtain a judgment held to be fraudulent); Lumpkins v. McPhee, 59 N.M. 442, 286 P.2d 299 (1955) (although transfer of all assets said to indicate fraud, transfer held not to be fraudulent because full consideration was paid and transferor surrendered possession).
  6. Whether the debtor had absconded: In re Thomas, 199 F. 214 (N.D.N.Y. 1912) (when debtor collected all of his money and property with the intent to abscond, fraudulent intent was held to be shown).
  7. Whether the debtor had removed or concealed assets: Bentley v. Young, 210 F. 202 (S.D.N.Y 1914), aff'd, 223 F. 536 (2d Cir. 1915) (debtor's removal of goods from store to conceal their whereabouts and to sell them held to render sale fraudulent); Cioli v. Kenourgios, 59 Cal.App. 690, 211 P. 838 (1922) (debtor's sale of all assets and shipment of proceeds out of the country held to be fraudulent notwithstanding adequacy of consideration).
  8. Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred: Toomay v. Graham, 151 S.W.2d 119 (Mo.App. 1941) (although mere inadequacy of consideration said not to be a badge of fraud, transfer held to be fraudulent when accompanied by badges of fraud); Texas Sand Co. v. Shield, 381 S.W.2d 48 (Tex. 1964) (inadequate consideration said to be an indicator of fraud, and transfer held to be fraudulent because of inadequate consideration, pendency of suit, family relationship of transferee, and fact that all nonexempt property was transferred); Weigel v. Wood, 355 Mo. 11, 194 S.W.2d 40 (1946) (although inadequate consideration said to be a badge of fraud, transfer held not to be fraudulent when inadequacy not gross and not accompanied by any other badge; fact that transfer was from father to son held not sufficient to establish fraud).
  9. Whether the debtor was insolvent or became insolvent shortly after the transfer was made or obligation was incurred: Harris v. Shaw, 224 Ark. 150, 272 S.W.2d 53 (1954) (insolvency of transferor said to be a badge of fraud and transfer held fraudulent when accompanied by other badges of fraud); Bank of Sun Prairie v. Hovig, 218 F.Supp. 769 (W.D. Ark. 1963) (although the insolvency of the debtor said to be a badge of fraud, transfer held not fraudulent when debtor was shown to be solvent, adequate consideration was paid, and good faith was shown, despite the pendency of suit); Wareheim v. Bayliss, 149 Md. 103, 131 A. 27 (1925) (although insolvency of debtor acknowledged to be an indicator of fraud, transfer held not to be fraudulent when adequate consideration was paid and whether debtor was insolvent in fact was doubtful).
  10. Whether the transfer occurred shortly before or shortly after a substantial debt was incurred: Commerce Bank of Lebanon v. Halladale A Corp., 618 S.W.2d 288, 292 (Mo.App. 1981) (when transferors incurred substantial debts near in time to the transfer, transfer was held to be fraudulent due to inadequate consideration, close family relationship, the debtor's retention of possession, and the fact that almost all the debtor's property was transferred).

The effect of the two transfers described in § 4(b)(11) [T.C.A. § 66-3-305(b)(11)], if not avoided, may be to permit a debtor and a lienor to deprive the debtor's unsecured creditors of access to the debtor's assets for the purpose of collecting their claims while the debtor, the debtor's affiliate or insider, and the lienor arrange for the beneficial use or disposition of the assets in accordance with their interests. The kind of disposition sought to be reached here is exemplified by that found in Northern Pacific Co. v. Boyd, 228 U.S. 482 (1913), the leading case in establishing the absolute priority doctrine in reorganization law. There the Court held that a reorganization whereby the secured creditors and the management-owners retained their economic interests in a railroad through a foreclosure that cut off claims of unsecured creditors against its assets was in effect a fraudulent disposition (id. at 502-05). See Frank, Some Realistic Reflections on Some Aspects of Corporate Reorganization, 19 Va. L.Rev. 541, 693 (1933). For cases in which an analogous injury to unsecured creditors was inflicted by a lienor and a debtor, see Jackson v. Star Sprinkler Corp. of Florida, 575 F.2d 1223, 1231-34 (8th Cir. 1978); Heath v. Helmick, 173 F.2d 157, 161-62 (9th Cir. 1949); Toner v. Nuss, 234 F.S. 457, 461-62 (E.D.Pa. 1964); and see In re Spotless Tavern Co., Inc., 4 F.Supp. 752, 753, 755 (D.Md. 1933).

Nothing in § 4(b) [T.C.A. § 66-3-305(b)] is intended to affect the application of § 2-402(2), 9-205, 9-301, or 6-105 of the Uniform Commercial Code [T.C.A. §§ 47-2-402(2), 47-9-205, 47-9-301, or former § 47-6-105]. Section 2-402(2) [T.C.A. § 47-2-402(2)] recognizes the generally prevailing rule that retention of possession of goods by a seller may be fraudulent but limits the application of the rule by negating any imputation of fraud from “retention of possession in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification.” Section 9-205 [T.C.A. § 47-9-205] explicitly negates any imputation of fraud from the grant of liberty by a secured creditor to a debtor to use, commingle, or dispose of personal property collateral or to account for its proceeds. The section recognizes that it does not relax prevailing requirements for delivery of possession by a pledgor. Moreover, the section does not mitigate the general requirement of § 9-301(1)(b) [T.C.A. § 47-9-301] that a nonpossessory security interest in personal property must be accompanied by notice-filing to be effective against a levying creditor. Finally, like the Uniform Fraudulent Conveyance Act this Act does not pre-empt the statutes governing bulk transfers, such as Article 6 of the Uniform Commercial Code [former §§ 47-6-101 et seq.]. Compliance with the cited sections of the Uniform Commercial Code does not, however, insulate a transfer or obligation from avoidance. Thus a sale by an insolvent debtor for less than a reasonably equivalent value would be voidable under this Act notwithstanding compliance with the Uniform Commercial Code.

66-3-306. Transfers fraudulent as to present creditors.

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.

A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent.

Acts 2003, ch. 42, § 1.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 451.

Tennessee Jurisprudence, 13 Tenn. Juris., Fraudulent and Voluntary Conveyances, § 3.

Law Reviews.

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).

Attorney General Opinions. Creditors' claims under the Tennessee Investment Services Act of 2007.  OAG 11-79, 2011 Tenn. AG LEXIS 81 (11/17/11).

NOTES TO DECISIONS

1. Summary Judgment Denied.

Where a Chapter 7 debtor transferred real property to her husband and herself as tenants by the entirety, claiming that she transferred the property, because she thought he would be less worried about obtaining a large loan for her benefit if he had an ownership interest in the real property securing the debt, neither the trustee nor the husband were entitled to summary judgment in the trustee's fraudulent transfer claim under T.C.A. § 66-3-305(a)(2) and T.C.A. § 66-3-306, because there was a genuine issue of material fact as to whether the value provided by the husband was reasonably equivalent to the value of the property transferred to him, and whether the debtor was insolvent at the time of the transfer. Farinash v. Silvey (in re Silvey), 378 B.R. 186, 2007 Bankr. LEXIS 4345 (Bankr. E.D. Tenn. Oct. 10, 2007).

2. Illustrative Cases.

Transfer of debtor's property by quit claim deeds securing a debt was not avoidable under 11 U.S.C. § 544(b) because the transfer was not constructively fraudulent under either T.C.A. § 66-3-305 or § 66-3-306(a). The debtor received reasonably equivalent value given that the debt owed on the property was greater than its value. Webb Mtn, LLC v. Exec. Realty P'ship, L.P.,  420 B.R. 418, 2009 Bankr. LEXIS 3897 (Bankr. E.D. Tenn. Nov. 25, 2009), aff'd, Webb Mtn, LLC v. Exec. Realty P'ship, L.P. (In re Webb Mtn, LLC), — F. Supp. 2d —, 2010 U.S. Dist. LEXIS 38295 (E.D. Tenn. Apr. 19, 2010).

Plaintiff claimed that a violation of T.C.A. § 66-3-306 could form the underlying basis for his civil conspiracy claim, and thus, he was arguing that the insurance agency and a related entity could be held liable for conspiring to commit constructive fraud. Yet, a civil conspiracy required that the alleged conspirators possessed the specific intent to commit an unlawful act or a lawful act by unlawful means, and since constructive fraud required no intent to deceive, a violation of T.C.A. § 66-3-306 could not form the underlying basis for the plaintiff's civil conspiracy claim. Nippert v. Jackson, 860 F. Supp. 2d 554, 2012 U.S. Dist. LEXIS 35109 (M.D. Tenn. Mar. 15, 2012).

Debtor could amend answer to add cross-claim for fraudulent transfer because it did not unduly delay, transferee did not allege lack of notice, there was no bad faith, filing of bankruptcy and additional fiduciary responsibilities imposed on debtor were significant changes in circumstances that counterbalanced transferee's argument that too much time had passed, there should not be significant additional burden placed on transferee to prepare defense, allowing amendment was not futile given prospect that debtor was not barred by four year statute of limitations and could step into creditor's shoes to pursue fraudulent transfer, and allowing amendment was in best interests of justice given debtor's fiduciary obligations to creditors. River City Resort, Inc. v. Frankenberg (In re River City Resort, Inc.), — B.R. —, 2014 Bankr. LEXIS 2946 (Bankr. E.D. Tenn. July 9, 2014).

Without evidence of such insolvency, the business was unable to prevail on its claim of constructive fraud. Delta Gypsum, LLC v. Felgemacher, — S.W.3d —, 2017 Tenn. App. LEXIS 261 (Tenn. Ct. App. Apr. 26, 2017).

Government was permitted to recover unpaid taxes from the widow and estate under Tennessee law, because the widow and estate's extensive emphasis on their due diligence and lack of knowledge of illegality did not shield them from the sham nature of the transaction and absolve them of transferee liability. Hawk v. Comm'r,  — F.3d —, 2019 FED App. 92P, 2019 U.S. App. LEXIS 14365 (6th Cir. May 15, 2019).

3. Burden of Proof.

Plaintiff was required to prove the owner's insolvency, not defendant. Delta Gypsum, LLC v. Felgemacher, — S.W.3d —, 2017 Tenn. App. LEXIS 261 (Tenn. Ct. App. Apr. 26, 2017).

COMMENTS TO OFFICIAL TEXT

  1. Subsection (a) is derived from § 4 of the Uniform Fraudulent Conveyance Act [former § 66-3-305]. It adheres to the limitation of the protection of that section to a creditor who extended credit before the transfer or obligation described. As pointed out in Comment (2) accompanying § 4 [§ 66-3-305, Comment (2)], this Act substitutes “reasonably equivalent value” for “fair consideration.”
  2. Subsection (b) renders a preferential transfer — i.e. , a transfer by an insolvent debtor for or on account of an antecedent debt — to an insider vulnerable as a fraudulent transfer when the insider had reasonable cause to believe that the debtor was insolvent. This subsection adopts for general application the rule of such cases as Jackson Sound Studios, Inc. v. Travis, 473 F.2d 503 (5th Cir. 1973) (security transfer of corporation's equipment to corporate principal's mother perfected on eve of bankruptcy of corporation held to be fraudulent); In re Lamie Chemical Co., 296 F. 24 (4th Cir. 1924) (corporate preference to corporate officers and directors held voidable by receiver when corporation was insolvent or nearly so and directors had already voted for liquidation); Stuart v. Larson, 298 F. 223 (8th Cir. 1924), noted 38 Harv.L.Rev. 521 (1925) (corporate preference to director held voidable). See generally 2 G. Glenn, Fraudulent Conveyances and Preferences 386 (rev. ed. 1940). Subsection (b) overrules such cases as Epstein v. Goldstein, 107 F.2d 755, 757 (2d Cir. 1939) (transfer by insolvent husband to wife to secure his debt to her sustained against attack by husband's trustee); Hartford Accident & Indemnity Co. v. Jirasek, 254 Mich. 131, 139, 235 N.W. 836, 389 (1931) (mortgage given by debtor to his brother to secure an antecedent debt owed the brother sustained as not fraudulent).
  3. Subsection (b) does not extend as far as § 8(a) of the Uniform Fraudulent Conveyance Act [former § 66-3-309] and § 548(b) of the Bankruptcy Code [11 U.S.C. § 548(b)] in rendering voidable a transfer or obligation incurred by an insolvent partnership to a partner, who is an insider of the partnership. The transfer to the partner is not vulnerable to avoidance under § 4(b) [§ 66-3-305(b)] unless the transfer was for an antecedent debt and the partner had reasonable cause to believe that the partnership was insolvent. The cited provisions of the Uniform Fraudulent Conveyance Act and the Bankruptcy Act make any transfer by an insolvent partnership to a partner voidable. Avoidance of the partnership transfer without reference to the partner's state of mind and the nature of the consideration exchanged would be unduly harsh treatment of the creditors of the partner and unduly favorable to the creditors of the partnership.

66-3-307. When transfer is made or obligation is incurred.

For the purposes of this part:

  1. A transfer is made:
    1. With respect to an asset that is real property other than a fixture, but including the interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against whom applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and
    2. With respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this part that is superior to the interest of the transferee;
  2. If applicable law permits the transfer to be perfected as provided in subdivision (1)(A) and the transfer is not so perfected before the commencement of an action for relief under this part, the transfer is deemed made immediately before the commencement of the action;
  3. If applicable law does not permit the transfer to be perfected as provided in subdivision (1)(A), the transfer is made when it becomes effective between the debtor and the transferee;
  4. A transfer is not made until the debtor has acquired rights in the asset transferred; or
  5. An obligation is incurred:
    1. If oral, when it becomes effective between the parties; or
    2. If evidenced by a writing, when the writing executed by the obligor is delivered to or for the benefit of the obligee.

Acts 2003, ch. 42, § 1.

Cross-References. Creditors' bills, setting aside fraudulent conveyances, § 29-12-101.

Grounds for attachment, § 29-6-101.

Law Reviews.

Rights of Creditors in Insurance — The Tennessee Exemption Statutes (Paul J. Hartman), 5 Vand. L. Rev. 760 (1952).

COMMENTS TO OFFICIAL TEXT

  1. One of the uncertainties in the law governing the avoidance of fraudulent transfers and obligations is the difficulty of determining when the cause of action arises. Subsection (b) clarifies this point in time. For transfers of real estate Section 6(1) [T.C.A. § 66-3-307(1)] fixes the time as the date of perfection against a good faith purchaser from the transferor and for transfers of fixtures and assets constituting personalty, the time is fixed as the date of perfection against a judicial lien creditor not asserting rights under this Act. Perfection typically is effected by notice-filing, recordation, or delivery of unequivocal possession. See U.C.C. §§ 9-302, 9-304, and 9-305 [T.C.A. §§ 47-9-302, 47-9-304, and 47-9-305] (security interest in personal property perfected by notice-filing or delivery of possession to transferee); 4 American Law of Property § 17.10-17.12 (1952) (recordation of transfer or delivery of possession to grantee required for perfection against bona fide purchaser from grantor). The provision for postponing the time a transfer is made until its perfection is an adaptation of § 548(d)(1) of the Bankruptcy Code [11 U.S.C. § 548(d)(1)]. When no steps are taken to perfect a transfer that applicable law permits to be perfected, the transfer is deemed by paragraph (2) to be perfected immediately before the filing of an action to avoid it; without such a provision to cover that eventuality, an unperfected transfer would arguably be immune to attack. Some transfers — e.g., an assignment of a bank account, creation of a security interest in money, or execution of a marital or premarital agreement for the disposition of property owned by the parties to the agreement — may not be amenable to perfection as against a bona fide purchaser or judicial lien creditor. When a transfer is not perfectible as provided in paragraph (11), the transfer occurs for the purpose of this Act when the transferor effectively parts with an interest in the asset as provided in § 1(12) supra [§ 66-3-302(12)].
  2. Paragraph (4) requires the transferor to have rights in the asset transferred before the transfer is made for the purpose of this section. This provision makes clear that its purpose may not be circumvented by notice-filing or recordation of a document evidencing an interest in an asset to be acquired in the future. Cf . Bankruptcy Code § 547(e) [11 U.S.C. § 547(e)]; U.C.C. § 9-203(1)(c) [T.C.A. § 47-9-203].
  3. Paragraph (5) is new. It is intended to resolve uncertainty arising from Rubin v. Manufacturers Hanover Trust Co, 661 F.2d 979, 989-91, 997 (2d Cir. 1981), insofar as that case holds that an obligation of guaranty may be deemed to be incurred when advances covered by the guaranty are made rather than when the guaranty first became effective between the parties. Compare Rosenberg, Intercorporate Guaranties and the Law of Fraudulent Conveyances: Lender Beware, 125 U.Pa.L.Rev. 235, 256-57 (1976).

    An obligation may be avoided as fraudulent under this Act if it is incurred under the circumstances specified in § 4(a) or § 5(a) [T.C.A. § 66-3-305(a) or T.C.A. § 66-3-306(a)]. The debtor may receive reasonably equivalent value in exchange for an obligation incurred even though the benefit to the debtor is indirect. See Rubin v. Manufacturers Hanover Trust Co., 661 F.2d at 991-92; Williams v. Twin City Co., 251 F.2d 678, 681 (9th Cir. 1958); Rosenberg, supra at 243-46.

66-3-308. Remedies of creditors.

  1. In an action for relief against a transfer or obligation under this part, a creditor, subject to the limitations in § 66-3-309, may obtain:
    1. Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim;
    2. An attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the procedure prescribed by title 26;
    3. Subject to applicable principles of equity and in accordance with applicable rules of civil procedure:
      1. An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;
      2. Appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or
      3. Any other relief the circumstances may require.
  2. If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.

Acts 2003, ch. 42, § 1.

Cross-References. Attachment, title 29, ch. 6.

Creditors' bills, title 29, ch. 12.

Law Reviews.

Enforcement of Judgments in Tennessee, 22 Tenn. L. Rev. 873 (1953).

Certiorari to In re BFP: The Eve of Decision to a Dozen Years of Durett Conflict — Will Resolution of the Issue Solve the Real Problem?, 24 Mem. St. U.L. Rev. 773 (1994).

NOTES TO DECISIONS

1. Application.

Remedies provided under the Uniform Fraudulent Transfers Act (UFTA), T.C.A. § 66-3-301 et seq., were limited to creditors of debtors and the beneficiary, as the sole beneficiary of the decedent's estate, was not and never had been a creditor of the decedent's; therefore, he was not entitled to any relief under the UFTA. Perkins v. Brunger, 303 S.W.3d 688, 2009 Tenn. App. LEXIS 373 (Tenn. Ct. App. June 10, 2009).

Trial court did not award a specific monetary judgment in favor of the Bureau of TennCare and the record did not reveal the exact amount of TennCare's claims; therefore, on remand, the trial court had to determine the amount TennCare was entitled to recover as a creditor of the decedent's, award a judgment in favor of TennCare in that amount, and then determine how to satisfy the monetary judgment awarded to TennCare pursuant to the criteria and remedies set forth in T.C.A. § 66-3-308(a). Perkins v. Brunger, 303 S.W.3d 688, 2009 Tenn. App. LEXIS 373 (Tenn. Ct. App. June 10, 2009).

Trustee who administered a debtor's Chapter 7 bankruptcy estate was awarded a default judgment on her claim that transfers of real and personal property the debtor made to a living trust less than four years before he declared bankruptcy could be avoided under 11 U.S.C.S. § 544 and T.C.A. § 66-3-308 because they were fraudulent; the trust admitted the trustee's allegations that the debtor made the transfers with intent to hinder or defraud his creditors, and that the transfers were constructively fraudulent because the debtor received no consideration for them, when it failed to answer the trustee's complaint, and those admissions were sufficient to establish that the transfers were fraudulent under T.C.A. § 66-3-305. Edwards v. Arledge (In re Arledge), — B.R. —, 2016 Bankr. LEXIS 4014 (Bankr. E.D. Tenn. Nov. 18, 2016).

Trustee who was appointed to administer a debtor's Chapter 7 bankruptcy estate was awarded summary judgment on her claim that the beneficiary of a living trust had to return real and personal property the debtor transferred to the trust less than four years before he declared bankruptcy because the transfers were fraudulent and could be avoided under 11 U.S.C.S. § 544 and T.C.A. § 66-3-308; the beneficiary admitted facts the trustee alleged in her motion for summary judgment when he failed to respond to the motion, and an allegation that the debtor was aware of a pending lawsuit and transferred the property to hinder his creditors was sufficient to establish that the transfers were fraudulent under T.C.A. § 66-3-305. Edwards v. Arledge (In re Arledge), — B.R. —, 2016 Bankr. LEXIS 4015 (Bankr. E.D. Tenn. Nov. 18, 2016).

Chancery court erred in dismissing plaintiff's Tennessee's Uniform Fraudulent Transfer Act claim; debtor removed $ 1.4 million in equity from properties and made that sum available to defendants, and by adding them to the complaint, plaintiff was simply following the money and transactional trail. Bavelis v. Doukas, — S.W.3d —, 2018 Tenn. App. LEXIS 569 (Tenn. Ct. App. Sept. 27, 2018), appeal denied, — S.W.3d —, 2019 Tenn. LEXIS 45 (Tenn. Jan. 18, 2019).

2. Construction.

Statutory provisions indicate that an innocent purchaser of a fraudulently transferred asset may be protected to the extent that he or she paid for the asset; however, such purchaser must have purchased in good faith. Bavelis v. Doukas, — S.W.3d —, 2018 Tenn. App. LEXIS 569 (Tenn. Ct. App. Sept. 27, 2018), appeal denied, — S.W.3d —, 2019 Tenn. LEXIS 45 (Tenn. Jan. 18, 2019).

Collateral References.

Attachment, action by creditor to set aside fraudulent conveyance as one for money only. 76 A.L.R. 1449.

Corporation, disregarding existence of, in case of conveyance of property to corporation to defraud creditors. 1 A.L.R. 611, 34 A.L.R. 597.

Decedent, right of creditor of, before perfecting his claim or after loss of recourse against decedent's estate, to pursue remedy against property conveyed by decedent in fraud of creditor. 103 A.L.R. 555.

Executor or administrator, applicability of statute forbidding suit against, until expiration of prescribed period, to suit to set aside fraudulent conveyance. 49 A.L.R. 1168, 107 A.L.R. 749.

Executor's or administrator's right to benefit of successful attack by creditors on conveyance by deceased grantor. 91 A.L.R. 133.

Joinder of grantees in different conveyances in suit to avoid them. 69 A.L.R. 229.

Jurisdiction of equity to sequester, seize, or otherwise provisionally secure assets for application upon money demand which has not been reduced to judgment. 116 A.L.R. 270.

Nonresidence or absence of defendant from state as suspending statute of limitations in action to set aside fraudulent conveyances and to subject land so conveyed to creditors' demand. 119 A.L.R. 371.

Reconveyance or retransfer of property to grantor, executed as part of, or as contemplated at time of, the fraudulent transaction, as affecting principle which denies relief to party who has conveyed or transferred property in fraud of his creditors. 89 A.L.R. 1166.

Remedy of general creditor as affected by Uniform Fraudulent Conveyance Act. 65 A.L.R. 25.

Third persons, Uniform Fraudulent Conveyance Act as applied to conveyance between, upon consideration furnished by debtor.

COMMENTS TO OFFICIAL TEXT

  1. This section is derived from §§ 9 and 10 of the Uniform Fraudulent Conveyance Act [former §§ 66-3-310 and 66-3-312]. Section 9 of that Act specified the remedies of creditors whose claims have matured, and § 10 enumerated the remedies available to creditors whose claims have not matured. A creditor holding an unmatured claim may be denied the right to receive payment for the proceeds of a sale on execution until his claim has matured, but the proceeds may be deposited in court or in an interest-bearing account pending the maturity of the creditor's claim. The remedies specified in this section are not exclusive.
  2. The availability of an attachment or other provisional remedy has been restricted by amendments of statutes and rules of procedure to reflect views of the Supreme Court expressed in Sniadach v. Family Finance Corp. of Bay View, 395 U.S. 337 (1969), and its progeny. This judicial development and the procedural changes that followed in its wake do not preclude resort to attachment by a creditor in seeking avoidance of a fraudulent transfer or obligation. See, e.g. , Britton v. Howard Sav. Bank, 727 F.2d 315, 317-20 (3d Cir. 1984); Computer Sciences Corp. v. Sci-Tek Inc., 367 A.2d 658, 661 (Del. Super. 1976); Great Lakes Carbon Corp. v. Fontana, 54 A.D.2d 548, 387 N.Y.S. 2d 115 (1st Dep't 1976). Section 7(a)(2) [T.C.A. § 66-3-308(a)(2)] continues the authorization for the use of attachment contained in § 9(b) of the Uniform Fraudulent Conveyance Act [former § 66-3-310(2)], or of a similar provisional remedy, when the state's procedure provides therefor, subject to the constraints imposed by the due process clauses of the United States and state constitutions.
  3. Subsections (a) and (b) of § 10 of the Uniform Fraudulent Conveyance Act [former § 66-3-312] authorized the court, in an action on a fraudulent transfer or obligation, to restrain the defendant from disposing of his property, to appoint a receiver to take charge of his property, or to make any order the circumstances may require. Section 10, however, applied only to a creditor whose claim was unmatured. There is no reason to restrict the availability of these remedies to such a creditor, and the courts have not so restricted them. See, e.g. , Lipskey v. Voloshen, 155 Md. 139, 143-45, 141 Atl. 402, 404-05 (1928) (judgment creditor granted injunction against disposition of property by transferee, but appointment of receiver denied for lack of sufficient showing of need for such relief); Matthews v. Schusheim, 36 Misc. 2d 918, 922-23, 235 N.Y.S.2d 973, 976-77, 991-92 (Sup.Ct. 1962) (injunction and appointment of receiver granted to holder of claims for fraud, breach of contract, and alimony arrearages; whether creditor's claim was mature said to be immaterial); Oliphant v. Moore, 155 Tenn. 359, 362-63, 293 S.W. 541, 542 (1927) (tort creditor granted injunction restraining alleged tortfeasor's disposition of property).
  4. As under the Uniform Fraudulent Conveyance Act, a creditor is not required to obtain a judgment against the debtor-transferor or to have a matured claim in order to proceed under subsection (a). See § 1(3) and (4) supra  [T.C.A. § 66-3-302(3) and (4)]; American Surety Co. v. Conner, 251 N.Y. 1, 166 N.E. 783, 65 A.L.R. 244 (1929); 1 G. Glenn, Fraudulent Conveyances and Preferences 129 (Rev.ed. 1940).
  5. The provision in subsection (b) for a creditor to levy execution on a fraudulently transferred asset continues the availability of a remedy provided in § 9(b) of the Uniform Fraudulent Conveyance Act [former § 66-3-310]. See, e.g. , Doland v. Burns Lbr. Co., 156 Minn. 238, 194 N.W. 636 (1923); Montana Ass'n of Credit Management v. Hergert, 181 Mont. 442, 449, 453, 593 P.2d 1059, 1063, 1065 (1979); Corbett v. Hunter, 292 Pa.Super. 123, 128, 436 A.2d 1036, 1038 (1981); see also American Surety Co. v. Conner, 251 N.Y. 1, 6, 166 N.E. 783, 784, 65 A.L.R. 244, 247 (1929) (“In such circumstances he [the creditor] might find it necessary to indemnify the sheriff and, when the seizure was erroneous, assumed the risk of error”); McLaughlin, Application of the Uniform Fraudulent Conveyance Act, 46 Harv.L.Rev. 404, 441-42 (1933).
  6. The remedies specified in § 7 [T.C.A. § 66-3-308], like those enumerated in §§ 9 and 10 of the Uniform Fraudulent Conveyance Act [former §§ 66-3-310 and 66-3-312], are cumulative. Lind v. O. N. Johnson Co., 204 Minn. 30, 40, 282 N.W. 661, 667, 119 A.L.R. 940 (1939) (Uniform Fraudulent Conveyance Act held not to impair or limit availability of the “old practice” of obtaining judgment and execution returned unsatisfied before proceeding in equity to set aside a transfer); Conemaugh Iron Works Co. v. Delano Coal Co., Inc., 298 Pa. 182, 186, 148 A. 94, 95 (1929) (Uniform Fraudulent Conveyance Act held to give an “additional optional remedy” and not to “deprive a creditor of the right, as formerly, to work out his remedy at law”); 1 G. Glenn, Fraudulent Conveyances and Preferences 120, 130, 150 (Rev.ed. 1940).

66-3-309. Defenses, liability, and protection of transferee.

  1. A transfer or obligation is not voidable under § 66-3-305(a)(1) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee.
  2. Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under § 66-3-308(a)(1), the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor's claim, whichever is less. The judgment may be entered against:
    1. The first transferee of the asset or the person for whose benefit the transfer was made; or
    2. Any subsequent transferee other than a good-faith transferee or obligee who took for value or from any subsequent transferee or obligee.
  3. If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.
  4. Notwithstanding voidability of a transfer or an obligation under this part, a good-faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to:
    1. A lien on or a right to retain any interest in the asset transferred;
    2. Enforcement of any obligation incurred; or
    3. A reduction in the amount of the liability on the judgment.
  5. A transfer is not voidable under § 66-3-305(a)(2) or § 66-3-306 if the transfer results from:
    1. Termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or
    2. Enforcement of a security interest in compliance with title 47, chapter 9 of the Uniform Commercial Code.
  6. A transfer is not voidable under § 66-3-306(b):
    1. To the extent the insider gave new value to or for the benefit of the debtor after the transfer was made unless the new value was secured by a valid lien;
    2. If made in the ordinary course of business or financial affairs of the debtor and the insider; or
    3. If made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.

Acts 2003, ch. 42, § 1.

NOTES TO DECISIONS

1. Inadequate Consideration — Effect.

Where one buys land in good faith, but does not pay a fair consideration, the conveyance may be treated as a fraud in law and the conveyance may be set aside, the property sold, and out of the proceeds the vendee may be repaid what he had paid in good faith for the land, and the balance applied on the debts of the creditors. But this rule does not apply where the purchaser paid in good faith and without notice a fair consideration for the property. First Nat'l Bank v. Wilkins, 11 Tenn. App. 9, 1929 Tenn. App. LEXIS 70 (1929) (decision under prior law).

2. Good Faith.

Where debtor made transfers to defendant within applicable reach-back period, although defendant had shown that he gave reasonably equivalent value for the transfers insofar as his claim for restitution was reduced by the amount of the transfers, he had not conclusively demonstrated as a matter of law that he received the transfers in good faith. Tabor v. Kelly (In re Davis), — B.R. —, 2013 Bankr. LEXIS 5768 (Bankr. W.D. Tenn. Mar. 8, 2013).

Statutory provisions indicate that an innocent purchaser of a fraudulently transferred asset may be protected to the extent that he or she paid for the asset; however, such purchaser must have purchased in good faith. Bavelis v. Doukas, — S.W.3d —, 2018 Tenn. App. LEXIS 569 (Tenn. Ct. App. Sept. 27, 2018), appeal denied, — S.W.3d —, 2019 Tenn. LEXIS 45 (Tenn. Jan. 18, 2019).

COMMENTS TO OFFICIAL TEXT

  1. Subsection (a) states the rule that applies when the transferee establishes a complete defense to the action for avoidance based on Section 4(a)(1) [T.C.A. § 66-3-305(a)(1)]. The subsection is an adaptation of the exception stated in § 9 of the Uniform Fraudulent Conveyance Act [former § 66-3-310]. The person who invokes this defense carries the burden of establishing good faith and the reasonable equivalence of the consideration exchanged. Chorost v. Grand Rapids Factory Showrooms, Inc., 77 F. Supp. 276, 280 (D.N.J. 1948), aff'd, 172 F.2d 327, 329 (3d Cir. 1949).
  2. Subsection (b) is derived from § 550(a) of the Bankruptcy Code [11 U.S.C. § 550(a)]. The value of the asset transferred is limited to the value of the levyable interest on the transferor, exclusive of any interest encumbered by a valid lien. See § 1(2) supra  [T.C.A. § 66-3-302(2)].
  3. Subsection (c) is new. The measure of the recovery of a defrauded creditor against a fraudulent transferee is usually limited to the value of the asset transferred at the time of the transfer. See, e.g. , United States v. Fernon, 640 F.2d 609, 611 (5th Cir. 1981); Hamilton Nat'l Bank of Boston v. Halstead, 134 N.Y. 520, 31 N.E. 900 (1892); cf.  Buffum v. Peter Barceloux Co., 289 U.S. 227 (1932) (transferee's objection to trial court's award of highest value of asset between the date of the transfer and the date of the decree of avoidance rejected because an award measured by value as of time of the transfer plus interest from that date would have been larger). The premise of § 8(c) [T.C.A. § 66-3-309(c)] is that changes in value of the asset transferred that occur after the transfer should ordinarily not affect the amount of the creditor's recovery. Circumstances may require a departure from that measure of the recovery, however, as the cases decided under the Uniform Fraudulent Conveyance Act and other laws derived from the Statute of 13 Elizabeth illustrate. Thus, if the value of the asset at the time of levy and sale to enforce the judgment of the creditor has been enhanced by improvements of the asset transferred or discharge of liens on the property, a good faith transferee should be reimbursed for the outlay for such a purpose to the extent the sale proceeds were increased thereby. See Bankruptcy Code § 550(d) [11 U.S.C. § 550(e)]; Janson v. Schier, 375 A.2d 1159, 1160 (N.H. 1977); Anno., 8 A.L.R. 527 (1920). If the value of the asset has been diminished by severance and disposition of timber or minerals or fixtures, the transferee should be liable for the amount of the resulting reduction. See Damazo v. Wahby, 269 Md. 252, 257, 305 A.2d 138, 142 (1973). If the transferee has collected rents, harvested crops, or derived other income from the use or occupancy of the asset after the transfer, the liability of the transferee should be limited in any event to the net income after deduction of the expense incurred in earning the income. Anno., 60 A.L.R.2d 593 (1958). On the other hand, adjustment for the equities does not warrant an award to the creditor of consequential damages alleged to accrue from mismanagement of the asset after the transfer.
  4. Subsection (d) is an adaptation of § 548(c) of the Bankruptcy Code [11 U.S.C. § 548(c)]. An insider who receives property or an obligation from an insolvent debtor as security for or in satisfaction of an antecedent debt of the transferor or obligor is not a good faith transferee or obligee if the insider has reasonable cause to believe that the debtor was insolvent at the time the transfer was made or the obligation was incurred.
  5. Subsection (e)(1) rejects the rule adopted in Darby v. Atkinson (In re Farris), 415 F.Supp. 33, 39-41 (W.D.Okla. 1976), that termination of a lease on default in accordance with its terms and applicable law may constitute a fraudulent transfer. Subsection (e)(2) protects a transferee who acquires a debtor's interest in an asset as a result of the enforcement of a secured creditor's rights pursuant to and in compliance with the provisions of Part 5 of Article 9 of the Uniform Commercial Code. Cf.  Calaiaro v. Pittsburgh Nat'l Bank (In re Ewing), 33 B.R. 288, 9 C.B.C.2d 526, CCH B.L.R. 69,460 (Bk.W.D.Pa. 1983) (sale of pledged stock held subject to avoidance as fraudulent transfer in § 548 of the Bankruptcy Code [11 U.S.C. § 548]), rev'd , 36 B.R. 476 (W.D.Pa. 1984) (transfer held not voidable because deemed to have occurred more than one year before bankruptcy petition filed). Although a secured creditor may enforce rights in collateral without a sale under § 9-502 or § 9-505 of the Code, the creditor must proceed in good faith (U.C.C. § 9-103 [T.C.A. § 47-9-102(43)]) and in a “commercially reasonable” manner. The “commercially reasonable” constraint is explicit in U.C.C. § 9-502(2) and is implicit in § 9-505. See 2 G. Gilmore, Security Interests in Personal Property 1224-27 (1965).
  6. Subsection (f) provides additional defenses against the avoidance of a preferential transfer to an insider under § 5(b) [T.C.A. § 66-3-306(b)].

    Paragraph (1)  [T.C.A. § 66-3-309(f)(1)] is adapted from § 547(c)(4) of the Bankruptcy Code [11 U.S.C. § 547(c)(4)], which permits a preferred creditor to set off the amount of new value subsequently advanced against the recovery of a voidable preference by a trustee in bankruptcy to the debtor without security. The new value may consist not only of money, goods, or services delivered on unsecured credit but also of the release of a valid lien. See, e.g. , In re Ira Haupt & Co., 424 F.2d 722, 724 (2d Cir. 1970); Baranow v. Gibraltor Factors Corp. (In re Hygrade Envelope Co.), 393 F.2d 60, 65-67 (2d Cir. 1968), cert. denied, 393 U.S. 837 (1968); In re John Morrow & Co., 134 F.686, 688 (S.D.Ohio 1901). It does not include an obligation substituted for a prior obligation. If the insider receiving the preference thereafter extends new credit to the debtor but also takes security from the debtor, the injury to the other creditors resulting from the preference remains undiminished by the new credit. On the other hand, if a lien taken to secure the new credit is itself voidable by a judicial lien creditor of the debtor, the new value received by the debtor may appropriately be treated as unsecured and applied to reduce the liability of the insider for the preferential transfer.

    Paragraph (2)  [T.C.A. § 66-3-309(f)(2)] is derived from § 546(c)(2) of the Bankruptcy Code [11 U.S.C. § 547(c)(2)], which excepts certain payments made in the ordinary course of business or financial affairs from avoidance by the trustee in bankruptcy as preferential transfers. Whether a transfer was in the “ordinary course” requires a consideration of the pattern of payments or secured transactions engaged in by the debtor and the insider prior to the transfer challenged under § 5(b) [T.C.A. § 66-3-306(b)]. See Tait & Williams, Bankruptcy Preference Laws: The Scope of Section 547(c)(2), 99 Banking L.J. 55, 63-66 (1982). The defense provided by paragraph (2) [T.C.A. § 66-3-309(f)(2)] is available, irrespective of whether the debtor or the insider or both are engaged in business, but the prior conduct or practice of both the debtor and the insider-transferee is relevant.

    Paragraph (3)  [T.C.A. § 66-3-309(f)(3)] is new and reflects a policy judgment that an insider who has previously extended credit to a debtor should not be deterred from extending further credit to the debtor in a good faith effort to save the debtor from a forced liquidation in bankruptcy or otherwise. A similar rationale has sustained the taking of security from an insolvent debtor for an advance to enable the debtor to stave off bankruptcy and extricate itself from financial stringency. Blackman v. Bechtel, 80 F.2d 505, 508-09 (8th Cir. 1935); Olive v. Tyler (In re Chelan Land Co.), 257 F.497, 5 A.L.R. 561 (9th Cir. 1919); In re Robin Bros. Bakeries, Inc., 22 F.S. 662, 663-64 (N.D.Ill. 1937); see Dean v. Davis, 242 U.S. 438, 444 (1917). The amount of the present value given, the size of the antecedent debt secured, and the likelihood of success for the rehabilitative effort are relevant considerations in determining whether the transfer was in good faith.

66-3-310. Extinguishment of cause of action.

A cause of action with respect to a fraudulent transfer or obligation under this part is extinguished unless action is brought:

  1. Under § 66-3-305(a)(1), within four (4) years after the transfer was made or the obligation was incurred or, if later, within one (1) year after the transfer or obligation was or could reasonably have been discovered by the claimant;
  2. Under § 66-3-305(a)(2) or § 66-3-306(a), within four (4) years after the transfer was made or the obligation was incurred; or
  3. Under § 66-3-306(b), within four (4) years after the transfer was made or the obligation was incurred.

Acts 2003, ch. 42, § 1.

NOTES TO DECISIONS

1. Statute of Limitations.

Debtor could amend answer to add cross-claim for fraudulent transfer because it did not unduly delay, transferee did not allege lack of notice, there was no bad faith, filing of bankruptcy and additional fiduciary responsibilities imposed on debtor were significant changes in circumstances that counterbalanced transferee's argument that too much time had passed, there should not be significant additional burden placed on transferee to prepare defense, allowing amendment was not futile given prospect that debtor was not barred by four year statute of limitations and could step into creditor's shoes to pursue fraudulent transfer, and allowing amendment was in best interests of justice given debtor's fiduciary obligations to creditors. River City Resort, Inc. v. Frankenberg (In re River City Resort, Inc.), — B.R. —, 2014 Bankr. LEXIS 2946 (Bankr. E.D. Tenn. July 9, 2014).

COMMENTS TO OFFICIAL TEXT

  1. This section is new. Its purpose is to make clear that lapse of the statutory periods prescribed by the section bars the right and not merely the remedy. See Restatement of Conflict of Laws 2d § 143 Comments (b) and (c) (1971). The section rejects the rule applied in United States v. Gleneagles Inv. Co., 565 F.S. 556, 583 (M.D.Pa. 1983) (state statute of limitations held not to apply to action by United States based on Uniform Fraudulent Conveyance Act).
  2. Statutes of limitations applicable to the avoidance of fraudulent transfers and obligations vary widely from state to state and are frequently subject to uncertainties in their application. See Hesson, The Statute of Limitations in Actions to Set Aside Fraudulent Conveyances and in Actions Against Directors by Creditors of Corporations, 32 Cornell L.Q. 222 (1946); Annos., 76 A.L.R. 864 (1932), 128 A.L.R. 1289 (1940), 133 A.L.R. 1311 (1941), 14 A.L.R.2d 598 (1950), and 100 A.L.R.2d 1094 (1965). Together with § 6 [T.C.A. § 66-3-307], this section should mitigate the uncertainty and diversity that have characterized the decisions applying statutes of limitations to actions to fraudulent transfers and obligations. The periods prescribed apply, whether the action under this Act is brought by the creditor defrauded or by a purchaser at a sale on execution levied pursuant to § 7(b) [T.C.A. § 66-3-308(b)] and whether the action is brought against the original transferee or subsequent transferee. The prescription of statutory periods of limitation does not preclude the barring of an avoidance action for laches. See § 10 [T.C.A. § 66-3-311 and Comment] and the accompanying Comment infra .

66-3-311. Supplementary provisions.

Unless displaced by the provisions of this part, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement its provisions.

Acts 2003, ch. 42, § 1.

NOTES TO DECISIONS

1. Fraudulent Transfer.

Government was permitted to recover unpaid taxes from the widow and estate under Tennessee law, because the widow and estate's extensive emphasis on their due diligence and lack of knowledge of illegality did not shield them from the sham nature of the transaction and absolve them of transferee liability. Hawk v. Comm'r,  — F.3d —, 2019 FED App. 92P, 2019 U.S. App. LEXIS 14365 (6th Cir. May 15, 2019).

COMMENTS TO OFFICIAL TEXT

This section is derived from § 11 of the Uniform Fraudulent Conveyance Act [former § 66-3-313] and § 1-103 of the Uniform Commercial Code [T.C.A. § 47-1-103]. The section adds a reference to “laches” in recognition of the particular appropriateness of the application of this equitable doctrine to an untimely action to avoid a fraudulent transfer. See Louis Dreyfus Corp. v. Butler, 496 F.2d 806, 808 (6th Cir. 1974) (action to avoid transfers to debtor's wife when debtor was engaged in speculative business held to be barred by laches or applicable statutes of limitations); Cooch v. Grier, 30 Del.Ch. 255, 265-66, 59 A.2d 282, 287-88 (1948) (action under the Uniform Fraudulent Conveyance Act held barred by laches when the creditor was chargeable with inexcusable delay and the defendant was prejudiced by the delay).

66-3-312. Uniformity of application and construction.

This part shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this part among states enacting it.

Acts 2003, ch. 42, § 1.

Law Reviews.

Rights of Creditors in Insurance — The Tennessee Exemption Statutes (Paul J. Hartman), 5 Vand. L. Rev. 760 (1952).

NOTES TO DECISIONS

1. Fraudulent Transfer.

Government was permitted to recover unpaid taxes from the widow and estate under Tennessee law, because the widow and estate's extensive emphasis on their due diligence and lack of knowledge of illegality did not shield them from the sham nature of the transaction and absolve them of transferee liability. Hawk v. Comm'r,  — F.3d —, 2019 FED App. 92P, 2019 U.S. App. LEXIS 14365 (6th Cir. May 15, 2019).

66-3-313. Official comments.

In any dispute as to the proper construction of one or more sections of this part, the official comments pertaining to the corresponding sections of the Uniform Fraudulent Transfers Act, official text, as adopted by the National Conference of Commissioners on Uniform State Laws and as in effect on July 1, 2003, shall constitute evidence of the purposes and policies underlying such sections, unless:

  1. The sections of this part that are applicable to the dispute differ materially from the sections of the official text that would be applicable thereto; or
  2. The official comments are inconsistent with the plain meaning of the applicable sections of this part.

Acts 2003, ch. 42, § 1.

Chapter 4
Contracts to Convey Real Property

Part 1
Conveyances by Deceased Persons

66-4-101. Execution by personal representative of deceased vendor.

In all cases of written agreements or contracts for the conveyance of land in this state, where the person executing the agreement or contract dies before final conveyance is made, the decedent's personal representatives may execute the conveyance to the person with whom such agreement or contract was made, or the decedent's heirs or assigns, according to the forms prescribed for the conveyance of real estate.

Code 1858, § 2025 (deriv. Acts 1794, ch. 5, § 1); Shan., § 3692; Code 1932, § 7614; T.C.A. (orig. ed.), § 64-401.

Cross-References. Forms for conveyance, § 66-5-103.

Inventory and management of estates, title 30, ch. 2, part 3.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 614, 731.

Tennessee Jurisprudence, 12 Tenn. Juris., Executors and Administrators, § 43.

NOTES TO DECISIONS

1. Extent of Representative's Power.

The personal representative is the mere statutory conduit through whom the title of the heirs may pass. Hale v. Darter, 24 Tenn. 79, 1844 Tenn. LEXIS 24 (1844).

The statute confers on the personal representative a mere naked power. It constitutes him a mere agent or attorney to execute a conveyance in the case provided for. Bartlett v. Watson, 35 Tenn. 287, 1855 Tenn. LEXIS 55 (1855).

A personal representative is not authorized to execute a deed where a deed was made to the decedent and another as individuals, and not in trust, in pursuance of a collateral agreement in writing between eleven persons, including among them the grantees, whereby land purchased by the eleven partners was to be conveyed to the grantees in trust for the use and benefit of all the partners, although the partnership was subsequently merged into a chartered corporation, and the deed was made by the personal representative of the decedent to the corporation, especially where there was nothing to show that the members of the partnership ever transferred their rights in the land to the corporation or that they ever demanded the execution of the deed to it. Byrd v. Phillips, 120 Tenn. 14, 111 S.W. 1109, 1907 Tenn. LEXIS 36 (1907).

2. Title Bond — Necessity.

The existence of the obligation, or title bond, is indispensable to the exercise of the power, and to the validity of the deed. Hence, in order to make the deed operative, the bond must be produced, or its existence, at the time of the execution of the deed by the personal representative, must be established by the proof. Bartlett v. Watson, 35 Tenn. 287, 1855 Tenn. LEXIS 55 (1855).

3. Recital as to Bond — Sufficiency.

As against third persons, perhaps, the recital of the obligation, or bond, in the conveyance, if sufficiently full and explicit, would be prima facie sufficient. Bartlett v. Watson, 35 Tenn. 287, 1855 Tenn. LEXIS 55 (1855).

4. Representative Refusing Conveyance — Liability.

The personal representative may protect the personal estate which he represents by making a conveyance in fulfillment of the decedent's contract, if properly demanded, and if he refuses to do this in a proper case, he is liable at common law for damages. Hale v. Darter, 24 Tenn. 79, 1844 Tenn. LEXIS 24 (1844).

5. Compelling Conveyance — Parties.

The heirs of the deceased maker of a written contract or title bond for the conveyance of land must be made parties to a bill to compel the personal representative to make a deed, because the title is in them by descent. Hale v. Darter, 24 Tenn. 79, 1844 Tenn. LEXIS 24 (1844).

The court of chancery has no power to compel the execution of a deed by a personal representative unless the heirs are made a party. Hale v. Darter, 24 Tenn. 79, 1844 Tenn. LEXIS 24 (1844).

Suit for specific performance of contract for sale of land was properly brought against administrator of deceased landowner and also against his heirs who were necessary parties. Brister v. Estate of Brubaker, 47 Tenn. App. 150, 336 S.W.2d 326, 1960 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1960).

6. Statute of Limitations.

After the expiration of seven years from the death of the maker of the contract or title bond, the personal representative has no power to make a deed, and specific performance will not be decreed against the heirs where they rely upon the statute of limitation of seven years. Smith v. Hickman's Heirs, 3 Tenn. 330, 1 Cooke 330, 1813 Tenn. LEXIS 25 (1813); Lewis's Ex'rs v. Hickman's Heirs & Adm'rs, 2 Tenn. 316, 2 Tenn. 317, 1814 Tenn. LEXIS 24 (1814).

A suit by a creditor against the heirs of a testator to recover real property is not barred by a seven year statute of limitations when a judgment has been recovered against the personal representative of the estate within the seven years if the suit against the heirs is commenced within seven years after recovery of the judgment against the personal representatives. Wooldridge v. Page, 68 Tenn. 325, 1878 Tenn. LEXIS 17 (1878); Woolridge v. Page, 69 Tenn. 135, 1878 Tenn. LEXIS 64 (1878).

The ancestor took and in writing agreed to hold the title of land in trust for himself and others, his heirs claiming and holding the land, for seven years after the ancestor's death, are protected, without having had any actual possession of the land, notwithstanding the recognition of such trust by the ancestor's personal representative, having only a naked power to sell the land; and notwithstanding such recognition by the heirs themselves, unless it is equivalent to a valid assumption of the claim or trust on the part of the heirs. Henderson v. Tipton, 88 Tenn. 255, 14 S.W. 380, 1889 Tenn. LEXIS 44 (Tenn. Sep. 1889).

A suit to foreclose a mortgage or deed of trust against the heirs of a mortgagor brought by a trustee more than seven years after the death of the mortgagor, was not barred by statute of limitations of seven years for protection of estates of decedents. Smith v. Goodlett, 92 Tenn. 230, 21 S.W. 106, 1892 Tenn. LEXIS 67 (1893).

Collateral References.

Option for renewal of lease or purchase of property, to whom notice of, must be given in event of death of lessor or owner who granted option. 148 A.L.R. 172.

Parties to action for specific performance of contract for conveyance of realty after death of party to the contract. 43 A.L.R.2d 453.

Real property, right or duty of executor or administrator of, to complete or enforce decedent's executory contract for purchase of. 58 A.L.R. 436.

Venue of action for specific performance of contract pertaining to real property. 63 A.L.R.2d 456.

66-4-102. Registration of contract required.

The personal representative cannot be required to execute a conveyance under § 66-4-101, unless the written agreement or contract, duly registered, or a certified copy of the agreement or contract from the register's books, is produced and delivered to the representative.

Code 1858, § 2028 (deriv. Acts 1794, ch. 5, § 1); Shan., § 3695; Code 1932, § 7617; T.C.A. (orig. ed.), § 64-402.

Cross-References. Index of public records, title 10, ch. 7, part 2.

Registration of instruments, title 66, ch. 24.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 614, 732.

Tennessee Jurisprudence, 12 Tenn. Juris., Executors and Administrators, § 43.

NOTES TO DECISIONS

1. Necessity of Registration.

It is not necessary that the contract or title bond of the deceased be registered in order to give validity to the deed of his personal representative. While the personal representative is not bound to make the deed until the title bond is registered, yet if he should do so, the deed is good. Carter v. Parrot, 1 Tenn. 237, 1807 Tenn. LEXIS 14 (1807); Den ex rel. Demise of Haggard v. Mayfield, 6 Tenn. 121, 1818 Tenn. LEXIS 46 (1818); Butterfeild v. Miller, 195 F. 200, 1912 U.S. App. LEXIS 1362 (6th Cir. Tenn. 1912).

Suit for specific performance of contract for sale of land would lie against administrator and heirs of deceased landowner even though such contract was not properly authenticated for registration and consequently improperly registered since, under § 66-26-101, if a contract relied on by a complainant is otherwise sufficient it is binding between the parties, their heirs and representatives without registration. Brister v. Estate of Brubaker, 47 Tenn. App. 150, 336 S.W.2d 326, 1960 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1960).

In an action for specific performance of a contract to sell land, the personal representative could be required to execute the conveyance although the written agreement was not recorded. Wright v. Universal Tire, Inc., 577 S.W.2d 194, 1978 Tenn. App. LEXIS 333 (Tenn. Ct. App. 1978).

Collateral References.

Recorded real property instrument as charging third party with constructive notice of provisions of extrinsic instrument referred to therein. 89 A.L.R.3d 901.

66-4-103. Deed by one of several representatives.

If there are several personal representatives, a deed by any of the representatives will be as valid as if executed by all.

Code 1858, § 2027 (deriv. Acts 1794, ch. 5, § 3); Shan., § 3694; Code 1932, § 7616; T.C.A. (orig. ed.), § 64-403.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 614, 733.

Tennessee Jurisprudence, 12 Tenn. Juris., Executors and Administrators, § 52.

66-4-104. Description of land used in deed.

In case the agreement or contract is for part of a tract of land, not ascertained by metes and bounds, the personal representative shall execute the conveyance according to the description given in the contract.

Code 1858, § 2029 (deriv. Acts 1794, ch. 5, § 4); Shan., § 3696; Code 1932, § 7618; T.C.A. (orig. ed.), § 64-404.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 614, 735.

Law Reviews.

The Common Law “Duty to Serve” and Protection of Consumers in an Age of Competitive Retail Public Utility Restructuring (Jim Rossi), 51 Vand. L. Rev. 1233 (1998).

Collateral References.

Description in deed as relating to magnetic or true meridian. 70 A.L.R.3d 1220.

Description of land conveyed by reference to river or stream as carrying to thread or center or only to bank thereof — modern status. 78 A.L.R.3d 604.

Measure and elements of damages recoverable from vendor where there has been a mistake as to amount of land conveyed. 94 A.L.R.3d 1091.

66-4-105. Execution of contract with personal representative.

If the person with whom such agreement or contract was made is also the personal representative, the court granting administration may appoint a guardian or representative of the heirs, who shall make the conveyance according to the written agreement.

Code 1858, § 2026 (deriv. Acts 1794, ch. 5, § 2); Shan., § 3693; Code 1932, § 7615; impl. am. Acts 1980, ch. 875, § 2; T.C.A. (orig. ed.), § 64-405.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), §§ 614, 734.

Part 2
Champertous Sales

66-4-201. Champertous sales of pretended interest prohibited.

No person shall agree to buy, or to bargain or sell any pretended right or title in lands or tenements, or any interest in such pretended right or title.

Code 1858, § 1776 (deriv. Acts 1821, ch. 66, § 1); Shan., § 3171; Code 1932, § 7823; T.C.A. (orig. ed.), § 64-406.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Champerty and Maintenance, §§ 3, 5-7, 9, 10, 13; 12 Tenn. Juris., Executions, § 47; 25 Tenn. Juris., Witnesses, § 54.

Law Reviews.

Champerty as We Know It (R.D. Cox), 13 Mem. St. U.L. Rev. 139 (1983).

NOTES TO DECISIONS

1. Deed of Adversely Held Land Void.

Trial court erred in ruling for a landowner in his action against an adjacent landowner to quiet title to a strip of land, which the parties'  referred to as the interlock, because the landowner's deed to the interlock was champertous and thus, void; the adjacent landowner's act of enclosing a portion of the interlock in a fence constituted actual possession of that portion of the interlock, and the adjacent landowner held the entire interlock under color of title because the metes and bounds description of the land conveyed to him contained the interlock, which meant that he was in constructive possession of the entire interlock when a purchaser purportedly conveyed it to the landowner. Foust v. Metcalf, 338 S.W.3d 457, 2010 Tenn. App. LEXIS 693 (Tenn. Ct. App. Nov. 8, 2010).

Collateral References.

Tax sale, execution sale, or judicial sale, or conveyances by persons claiming under such sales, champerty rule or statute as applicable to. 71 A.L.R. 592.

66-4-202. Sale without possession.

Any such agreement, bargain, sale, promise, covenant or grant shall be utterly void where the seller has not personally, or by the seller's agent or tenant, or the seller's ancestor, been in actual possession of the lands or tenements, or of the reversion or remainder, or taken the rents or profits for one (1) whole year next before the sale.

Code 1858, § 1777 (deriv. Acts 1821, ch. 66, § 1); Shan. § 3172; Code 1932, § 7824; T.C.A. (orig. ed.), § 64-407.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Champerty and Maintenance, § 10.

Law Reviews.

Champerty — Land Conveyed While in Adverse Possession, 15 Tenn. L. Rev. 719 (1939).

NOTES TO DECISIONS

1. History and Scope.

The statute contained in this section is substantially a reenactment of the statute of 32 Henry VIII, ch. 9. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835); Kincaid v. Meadows, 40 Tenn. 188, 1859 Tenn. LEXIS 51 (1859).

History and scope of champerty statutes. Staub v. Sewanee Coal, Coke & Land Co., 140 Tenn. 505, 205 S.W. 320, 1917 Tenn. LEXIS 156 (1918).

2. —Proceedings at Common Law.

At common law, maintenance was an officious intermeddling in a suit that in no way belonged to one, by maintaining or assisting either party, with money or otherwise, to prosecute or defend it, and signified the maintenance of a suit or quarrel to the disturbance or hindrance of right. But this rigid doctrine, as it was held at an early period, has been greatly modified in modern decisions, so that a man may maintain the suit of his near kinsman, servant, or poor neighbor, out of charity and compassion, with impunity. Sherley v. Riggs, 30 Tenn. 53, 1850 Tenn. LEXIS 51 (1850); Hayney v. Coyne, 57 Tenn. 339, 1872 Tenn. LEXIS 430 (1872).

At common law, if a suit was founded upon a champertous contract, such suit would be dismissed upon the champerty appearing, but not merely because there was a champertous contract, with relation to its prosecution, between the plaintiff and his attorney, or between the plaintiff and another layman. Robertson & Hobbs v. Cayard, 111 Tenn. 356, 77 S.W. 1056, 1903 Tenn. LEXIS 30 (1903); Staub v. Sewanee Coal, Coke & Land Co., 140 Tenn. 505, 205 S.W. 320, 1917 Tenn. LEXIS 156 (1918).

3. —Repeal of Former Champerty Laws — Effect.

By the repeal of the champerty laws contained in §§ 3176-3184 of the Code of 1896, the state changed its policy on that subject. Heaton v. Dennis, 103 Tenn. 155, 52 S.W. 175, 1899 Tenn. LEXIS 94 (1899).

The question whether the repeal of former champerty laws operated to revive the common law of champerty is reserved, and it is held to be clear that the repeal did not leave in force a penalty which existed only by virtue of the repealed statutes. Robertson & Hobbs v. Cayard, 111 Tenn. 356, 77 S.W. 1056, 1903 Tenn. LEXIS 30 (1903).

Since the repeal of the former champerty law, a suit will not be dismissed by reason of a champertous contract between plaintiff and his attorney or a third person. Staub v. Sewanee Coal, Coke & Land Co., 140 Tenn. 505, 205 S.W. 320, 1917 Tenn. LEXIS 156 (1918).

4. Object and Purpose.

The object and policy of the champerty statute is that those in actual possession of land shall not be molested by suits founded upon pretended or dormant claims, unless such suits shall be instituted and conducted, bona fide, by the proper owners, upon whom the law has cast the title, for their own proper benefit and at their own proper risk and costs. Williams v. Hogan, 19 Tenn. 187, 1838 Tenn. LEXIS 44 (1838); Ruffin v. Johnson, 52 Tenn. 604, 1871 Tenn. LEXIS 291 (1871); Lenoir v. Mining Co., 88 Tenn. 168, 14 S.W. 378, 1889 Tenn. LEXIS 39 (1889). See Todd v. Cannon, 27 Tenn. 512, 1847 Tenn. LEXIS 119 (1847).

The object is to prevent fraud and oppression in the buying up of outstanding titles of a doubtful and disputed character, whereby to harass those in possession, who are often poor and ignorant, and unable to protect themselves against a rich and powerful antagonist. Chairs v. Hobson, 29 Tenn. 354, 1849 Tenn. LEXIS 84 (1849). See Sims's Lessee v. Cross, 18 Tenn. 460, 1837 Tenn. LEXIS 54 (1837).

The champerty statutes prohibit the sale of a pretended interest in real property. Burnette v. Pickel, 858 S.W.2d 319, 1993 Tenn. App. LEXIS 15 (Tenn. Ct. App. 1993), appeal denied, 1993 Tenn. LEXIS 265 (Tenn. July 6, 1993).

5. Construction.

This section and § 66-4-201 make utterly void every sale or grant of land adversely held, while § 66-4-204 makes an exception in the case of a nonresident's sale of his land of which no person at the time of sale holds adverse possession. Jones v. Mosley, 29 Tenn. App. 559, 198 S.W.2d 652, 1946 Tenn. App. LEXIS 91 (Tenn. Ct. App. 1946).

Sound policy does not require the champerty statutes to be extended upon doubtful construction. McCoy's Lessee v. Williford, 32 Tenn. 642, 1853 Tenn. LEXIS 99 (1853).

This statute makes utterly void every sale or grant of land adversely held without regard to the length of adverse possession and without regard to whether the vendor's title is valid or invalid where the vendor is out of possession at the time of making the deed. Blair v. Gwosdof, 46 Tenn. App. 314, 329 S.W.2d 366, 1959 Tenn. App. LEXIS 101 (1959).

6. Statute of Limitation.

Ignorance of champertous nature of transaction will not prevent the running of the statute of limitations unless induced by fraudulent representation and concealment. Kitchen-Miller Co. v. Kern, 170 Tenn. 10, 91 S.W.2d 291, 1935 Tenn. LEXIS 101 (1936).

In a suit by a grantee to recover the purchase price paid the grantor, the fact that grantee elected to contest the suit filed by the persons who held the land adversely at the time of the conveyance could not change the fact that the deed was champertous and void when executed or to extend the limitation within which the action for recovery of the purchase price must be brought. Kitchen-Miller Co. v. Kern, 170 Tenn. 10, 91 S.W.2d 291, 1935 Tenn. LEXIS 101 (1936).

7. Persons Affected by Champerty.

Champerty affects all persons joining in a champertous deed conveying land adversely held. Greeno v. Ellas, 1 Tenn. Ch. App. 165 (1901). See Scott v. Mangrum, 7 Tenn. App. 437, — S.W.2d —, 1928 Tenn. App. LEXIS 63 (Tenn. Ct. App. 1928).

A champertous sale is void as to strangers as well as to the parties themselves. Scott v. Mangrum, 7 Tenn. App. 437, — S.W.2d —, 1928 Tenn. App. LEXIS 63 (Tenn. Ct. App. 1928).

8. Transactions Covered.

The champerty statutes for the suppression of the sale and purchase of pretended titles have no application to sales of personal property. Goodwin v. Floyd, 18 Tenn. 520, 1837 Tenn. LEXIS 75 (1837); Kimbro ex rel. Bugg v. Hamilton, 32 Tenn. 190, 1852 Tenn. LEXIS 48 (1852).

The champerty laws have no application to judicial sales of property or deeds of conveyance wherein the state is the vendor. Whitaker v. House, 213 Tenn. 61, 372 S.W.2d 194, 1963 Tenn. LEXIS 495 (1963).

9. Litigants Guilty of Champerty — Effect.

Litigants guilty of champerty will be expelled from the court, whenever the fact appears. Cole v. Stewart's Heirs, 49 Tenn. 510, 1871 Tenn. LEXIS 38 (1871); Heaton v. Dennis, 103 Tenn. 155, 52 S.W. 175, 1899 Tenn. LEXIS 94 (1899).

10. Deed as Basis of Champerty.

Champerty cannot be predicated in a deed void for uncertainty, vagueness, and insufficiency of description, so that it identifies no particular tract or parcel of land; and a possession under such deed will protect the possessor only to the extent of his actual possession or enclosures, and a conveyance of the land by a third person will be champertous only to the extent of the actual possession or enclosures. Goodloe v. Pope, 3 Shan. 634 (1875).

11. Adverse Possession.

Where the adverse claimant has kept up, on the land for about 20 years or more, a house, stable, and lot fenced and cattle were kept thereon, cabins built, coal openings made, and kept up; such possession is held to be open, obvious, notorious, continuous, and adverse. Savage v. Bon Air Coal, Land & Lumber Co., 2 Tenn. Ch. App. 594 (1902).

Where the defendant, holding title to the land in controversy under a prior unregistered deed, attempted to defeat complainant's title under a subsequent and registered deed, upon the ground that defendant's adverse possession at the time of the execution of such subsequent deed rendered it champertous, such occupancy was not sufficiently open and adverse to render the deed, under which complainant claimed, void for champerty, where it appeared that defendant's occupation consisted merely of a bridge extending a few feet over the land, and also the piling of some refuse lumber thereon, without showing how long the lumber remained thereon, or whether it was there when such subsequent deed was executed. Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912). See also Gernt v. Floyd, 131 Tenn. 119, 174 S.W. 267, 1914 Tenn. LEXIS 92 (1915).

The adverse possession, in order to make a conveyance void for champerty, must at least be as high in character as the adverse possession necessary to give title by its continuance under the statute of limitations. Gernt v. Floyd, 131 Tenn. 119, 174 S.W. 267, 1914 Tenn. LEXIS 92 (1915), approving Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912).

Where a tract of land was capable of cultivation in ample part, and the possession consisted of intermittent cuttings of timber and the erection of an unenclosed and unlocked lumber shack for use as “bachelor quarters” during the logging season only, which structure even was not openly or notoriously occupied at the date of the alleged champertous conveyance, there was no such adverse possession as would make a conveyance by the owner champertous. Gernt v. Floyd, 131 Tenn. 119, 174 S.W. 267, 1914 Tenn. LEXIS 92 (1915). See also Savage v. Bon Air Coal, Land & Lumber Co., 2 Tenn. Ch. App. 594 (1902); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912).

Where occupants of land were in actual adverse possession of land at time deed was made from record owner to complainant in ejectment action, deed was champertous and void as to portion of land adversely held. Davidson v. Foley, 57 Tenn. App. 22, 414 S.W.2d 123, 1966 Tenn. App. LEXIS 196 (Tenn. Ct. App. 1966).

12. —Actual Adverse Possession of Only Part of Lands.

A person claiming land, without any color or assurance of title describing the boundaries to which he claims, is in possession only to the extent of his actual possession; and a sale and conveyance of the tract of land by a person not in possession is champertous only to the extent of the actual possession, and is valid as to the remaining portion of the tract conveyed. Pickens v. Delozier, 21 Tenn. 400, 1841 Tenn. LEXIS 27 (1841); Goodloe v. Pope, 3 Shan. 634 (1875); Slatton v. Tennessee C., I. & R. Co., 109 Tenn. 415, 75 S.W. 926, 1902 Tenn. LEXIS 85 (1902). See Allis v. Hunt, 155 Tenn. 155, 294 S.W. 509, 1926 Tenn. LEXIS 30 (1927); Davidson v. Foley, 57 Tenn. App. 22, 414 S.W.2d 123, 1966 Tenn. App. LEXIS 196 (Tenn. Ct. App. 1966).

Where a person holds, under assurance or color of title, the adverse possession of a smaller tract within the boundaries of a larger one, a sale and conveyance of the larger tract, without excluding the smaller one, is champertous only to the extent of the smaller tract, and is valid as to the other portion of the larger tract. Smith v. Nashville & K. R. Co., 88 Tenn. 611, 13 S.W. 128, 1889 Tenn. LEXIS 81 (1890).

Where there is an actual adverse possession of some part of the tract of land held under an assurance of title, the possessor has such constructive possession of the rest of the tract superior and adverse to that which results merely from the ownership of the legal title as renders a conveyance of land so held, made by the real owner out of possession void for champerty, as to the whole tract, and not merely to the extent of the actual possession. Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903); Lieberman, Loveman & O'Brien v. Clark, 114 Tenn. 117, 85 S.W. 258, 1904 Tenn. LEXIS 77 (1904); Kittel v. Steger, 121 Tenn. 400, 117 S.W. 500, 1908 Tenn. LEXIS 26 (1909); Deaderick v. State, 122 Tenn. 222, 122 S.W. 975, 1909 Tenn. LEXIS 18 (1909).

Open and adverse possession of two small tracts under color of title to all of land in question extended such adverse possession by construction to the whole tract and rendered a later deed champertous and void as to whole tract. Kitchen-Miller Co. v. Kern, 170 Tenn. 10, 91 S.W.2d 291, 1935 Tenn. LEXIS 101 (1936).

Where the defendant had legal title and constructive possession of all the land in controversy except as to little clearings actually enclosed on the date of the sale of the land in controversy from a third party to the complainants, the deed to the complainants was champertous as to the land not actually enclosed. Harrison v. Beaty, 24 Tenn. App. 13, 137 S.W.2d 946, 1939 Tenn. App. LEXIS 5 (Tenn. Ct. App. 1939).

13. —Length of Possession Required to Make Sale Champertous.

It does not require any length of adverse possession, even by a disclaiming tenant, to make a sale and conveyance of land, or of any interest therein, or a lease thereof champertous when the land is so adversely possessed by another. The fact that the land is adversely held is enough, and that fact occurs in the case of a tenant as soon as his disclaimer is known to the landlord. Bullard v. Copps, 21 Tenn. 409, 1841 Tenn. LEXIS 30, 37 Am. Dec. 561 (1841); Stephenson v. Richmond, 30 Tenn. 591, 1851 Tenn. LEXIS 110 (1851); Kincaid v. Meadows, 40 Tenn. 188, 1859 Tenn. LEXIS 51 (1859); Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903).

No period of time of adverse possession by a third party is required to make a sale and conveyance of land held by another champertous. Kitchen-Miller Co. v. Kern, 170 Tenn. 10, 91 S.W.2d 291, 1935 Tenn. LEXIS 101 (1936).

14. Counter Adverse Possessions.

In order that the constructive possession of one claimant shall neutralize the constructive possession of the other, where both claim and hold under color of title, both must be in the actual possession of some part of the disputed land; and when only one of them is in the adverse possession of part of such disputed land, a sale and conveyance thereof by the other out of possession is champertous as to all such land, not only to the extent of the actual adverse possession, but to the whole of the disputed land. Mitchell v. Churchman's Lessee, 23 Tenn. 218, 1843 Tenn. LEXIS 58 (1843); Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903).

15. Conveyances or Transactions Amounting to Champerty.

The true owner's sale and conveyance of land held by him under a perfect title, but in the adverse possession of another at the time, though in fact real and not pretended, is, within the meaning of the champerty statutes, the sale and conveyance of a pretended title or right, and is void. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835); Elliott v. Boren, 34 Tenn. 662, 1855 Tenn. LEXIS 114 (1855); Kincaid v. Meadows, 40 Tenn. 188, 1859 Tenn. LEXIS 51 (1859); Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903).

Where limited estate covers only a part of the tract of land, and the owner of the limited estate sold and conveyed to a railroad company a right of way, as an easement in fee, over and across the entire tract and over the part not covered by the limited estate, and the railroad company had taken and was holding adversely the actual possession of such easement, a conveyance of the entire tract, then made by the owner thereof subject to such limited or life estate covering only part of the tract, was champertous to the extent of the right of way over that part of the tract not covered by the limited estate. Smith v. Nashville & K. R. Co., 88 Tenn. 611, 13 S.W. 128, 1889 Tenn. LEXIS 81 (1890).

Conveyance of land held by a third party in adverse possession under color of title was champertous and void even though the vendor was unaware of such adverse possession. Kitchen-Miller Co. v. Kern, 170 Tenn. 10, 91 S.W.2d 291, 1935 Tenn. LEXIS 101 (1936).

Deeds from portion of heirs of former owner were champertous and void where grantee had notice before taking deeds from heirs that other persons claimed entire estate adversely to grantors under other deeds and tax deed. Young v. Little's Unknown Heirs, 34 Tenn. App. 39, 232 S.W.2d 614, 1949 Tenn. App. LEXIS 139 (1949).

Where plaintiff was conveyed land a strip of which was adversely held by the defendant under fence on and before the date of the conveyance to plaintiff, plaintiff's deed was champertous and void as to the inclosed land. Frumin v. May, 36 Tenn. App. 32, 251 S.W.2d 314, 1952 Tenn. App. LEXIS 92 (1952).

Trial court erred in ruling for a landowner in his action against an adjacent landowner to quiet title to a strip of land, which the parties'  referred to as the interlock, because the landowner's deed to the interlock was champertous and thus, void; the adjacent landowner's act of enclosing a portion of the interlock in a fence constituted actual possession of that portion of the interlock, and the adjacent landowner held the entire interlock under color of title because the metes and bounds description of the land conveyed to him contained the interlock, which meant that he was in constructive possession of the entire interlock when a purchaser purportedly conveyed it to the landowner. Foust v. Metcalf, 338 S.W.3d 457, 2010 Tenn. App. LEXIS 693 (Tenn. Ct. App. Nov. 8, 2010).

16. —Executor's Sale of Adversely Held Lands.

The sale of land by an executor, while adversely held by a third party, is champertous. Peck v. Peck, 17 Tenn. 301, 1836 Tenn. LEXIS 47 (1836); Henderson & M'Dermott v. Peck, 22 Tenn. 247, 1842 Tenn. LEXIS 82 (1842).

17. —Deed of Trust for Benefit of Creditors of Lands Adversely Held.

A sale and conveyance of land made under a deed of trust for the benefit of creditors, while the land is adversely held, is champertous though the deed of trust contained a covenant to convey the land to him who might purchase at the trust sale. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835); Peck v. Peck, 17 Tenn. 301, 1836 Tenn. LEXIS 47 (1836).

Sale and conveyance of land under a deed of trust is champertous, if made during adverse possession, unless the adverse claimant is in privity or collusion with the grantor. Knox v. Keith, 9 Tenn. App. 614, 1929 Tenn. App. LEXIS 120 (1929).

18. —Mortgage of Realty in Possession of Another.

In Tennessee where real property is in the possession of another at the time a mortgage or deed of trust is executed, such mortgage or deed of trust is champertous under our statutes. Knox v. Keith, 9 Tenn. App. 614, 1929 Tenn. App. LEXIS 120 (1929).

19. Conveyances or Transactions Not Constituting Champerty.

Evidence did not support a violation of T.C.A. § 66-4-202 where grantor was actual owner and possessor of the land sold. Burnette v. Pickel, 858 S.W.2d 319, 1993 Tenn. App. LEXIS 15 (Tenn. Ct. App. 1993), appeal denied, 1993 Tenn. LEXIS 265 (Tenn. July 6, 1993).

20. —Lands Not Adversely Held.

Lands may be sold and conveyed without violating the champerty statute, when unpossessed, or when possessed by others not holding adversely to the bargainor, and in other cases as provided in § 66-4-204. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835).

Where the purchaser at a sheriff's execution sale of land, after taking the sheriff's deed, and while the judgment debtor remains in possession, but without actual disclaimer, sells and conveys the same, his deed is not champertous, for the reason that the debtor's possession after the sale is consistent with the title of the purchaser, under whom he holds as quasi tenant at will, until an actual disclaimer by him. Mitchell v. Lipe, 16 Tenn. 179, 1835 Tenn. LEXIS 72 (1835); Vance's Heirs v. Johnson, 29 Tenn. 214, 1849 Tenn. LEXIS 51 (1849); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

Where the owner, with whom his sister lives, sells and conveys to her the land on which he lives, and on which he continues to live, and of which he remains in the actual possession until he sells and conveys the same to another party, who had his deed registered at once, and before the sister had hers registered, the second sale and conveyance is not champertous, because the sister was not shown to be in the actual adverse possession of any part of the land, and because the possession and registered title were in the seller and conveyor in the second deed of conveyance. Bledsoe v. Rogers, 35 Tenn. 466, 1856 Tenn. LEXIS 10 (1856).

21. —Land Adversely Held — Sale under Prior Contract.

A conveyance of lands adversely held by another at the time, made in pursuance and fulfillment of a previous bona fide contract entered into prior to the adverse possession, is valid. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835); Sims's Lessee v. Cross, 18 Tenn. 460, 1837 Tenn. LEXIS 54 (1837); Hale v. Darter, 29 Tenn. 92, 1849 Tenn. LEXIS 15 (1849); McCoy's Lessee v. Williford, 32 Tenn. 642, 1853 Tenn. LEXIS 99 (1853); Augusta Mfg. Co. v. Vertrees, 72 Tenn. 75, 1879 Tenn. LEXIS 7 (1879).

Conveyance of land, adversely held, to assignee of title bond or bona fide contract made before the adverse possession is not champertous, though the assignment, as well as the conveyance, was made after the adverse possession had commenced, and during its existence. McCoy's Lessee v. Williford, 32 Tenn. 642, 1853 Tenn. LEXIS 99 (1853).

A conveyance of land in fulfillment of a previous bona fide contract, evidence by a previous deed, rendered ineffective by reason of its misdescription, and entered into before the adverse possession commenced, is not within the operation of the champerty statutes, and is valid, though made after and during the adverse possession. So, if it be considered as a deed of confirmation, as it may be, notwithstanding the words of positive grant, although the purchaser took no estate in the land under the original deed, it will not be void for champerty. Augusta Mfg. Co. v. Vertrees, 72 Tenn. 75, 1879 Tenn. LEXIS 7 (1879).

22. — —Bona Fide Contract Defined.

A bona fide contract, agreement, or covenant means one that is legal, valid, and subsisting, such as imposes legal obligations, and may be enforced in the courts; and it is one in writing, when required by law to be in writing. Hale v. Darter, 29 Tenn. 92, 1849 Tenn. LEXIS 15 (1849).

23. —True Owner's Sale after Regaining Possession.

The true owner of land who has the title may eject him who has none, and sell and convey the land immediately after the possession is regained. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835).

24. —Purchase of Land Without Knowledge that Adversely Claimed Tract was Within Boundaries.

Where one purchases real estate without knowledge of an actual adverse possession of part of it, or that the land claimed adversely is within his boundaries, the doctrine of champerty has no application. Sewell v. Draughn, 44 S.W. 210, 1897 Tenn. Ch. App. LEXIS 99 (Tenn. Ch. App. 1897).

25. —Owner of Limited Estate in Possession.

In cases of mortgagor and mortgagee, parties to a deed of trust, heir at law and dowager, landlord and tenant, and in the last case, whether the relation is created by the parties or by the mere operation of law, the possession will be presumed to be in subordination to the legal title, or subservient to the title in fee, until proof of actual disclaimer; and, therefore, a sale and conveyance of the fee or legal title by the owner thereof while so possessed is not champertous. Vance's Heirs v. Johnson, 29 Tenn. 214, 1849 Tenn. LEXIS 51 (1849); Chairs v. Hobson, 29 Tenn. 354, 1849 Tenn. LEXIS 84 (1849).

A sale and conveyance of land in which there is an assigned dower interest or estate in the possession of the dowager, and which interest is not excluded in the deed, is not champertous, because the possession of the dowager is not adverse to the title in fee, but subservient to it; and the grantor warranting the title is liable for the breach of his warranty in the failure of title to the extent of the dower estate. Therefore, the remainderman or reversioner may sell his estate, notwithstanding the possession of the owner of the less and limited estate. Chairs v. Hobson, 29 Tenn. 354, 1849 Tenn. LEXIS 84 (1849).

26. —Release of Unassigned Dower to Heirs Out of Possession.

Where a widow to whom dower has not been assigned, and who is, therefore, not in possession thereof, transfers or releases her dower right to the heirs who are not in possession, such release seems not to be within the purview of the champerty statutes, and it seems that her deed will not be champertous, for it gives to the heirs no more title or capacity to sue than they had before, and perhaps it operates only by way of estoppel against the widow. Ross v. Blair, 19 Tenn. 525, 1838 Tenn. LEXIS 85 (1838). See Guthrie v. Owen, 18 Tenn. 339, 1837 Tenn. LEXIS 31 (1837); Robertson v. Simmons, 51 Tenn. 135, 1871 Tenn. LEXIS 145 (1871); Bennett v. Coldwell, 67 Tenn. 483, 1875 Tenn. LEXIS 71 (1875).

27. —Trustee's Sale Under Deed of Trust During Collusive Adverse Possession.

The sale of land by the trustee under a deed of trust for the benefit of creditors, while the land is in the possession of a third party claiming under a sheriff's deed, is not champertous, where the possession was acquired pending the grantor's unsuccessful suit to prevent a sale under the deed of trust, upon the ground that it was champertous, while the trustee was temporarily enjoined from selling, and with the consent and by the collusion of the attorney acting for both the grantor and such third party. Fenner v. Robertson, 1 Shan. 485 (1875).

28. —Interest in Option to Purchase.

A person having an “option” to purchase certain lands may raise the money to pay for the same, by making an agreement with third parties to convey a portion of the land to them in the consideration of their furnishing the money necessary to complete the purchase, for such an arrangement is not champertous, and the agreement is nothing more nor less than the sale of an interset in the option. Bradford v. Foster, 87 Tenn. 4, 9 S.W. 195, 1888 Tenn. LEXIS 27 (1888).

29. Transaction Doubtful as to Champerty.

Where the testator was in the requisite possession by his tenant and receiving the rents up to his death, and the executor continued the tenant in possession and received from him rent for one half the premises, and would have received the rents for the whole premises but for the unwarranted intrusion of some of the heirs, it may be well doubted whether, under these circumstances a sale made by the executor during such unwarranted intrusion or prevention of the collection of rents was champertous. Henderson & M'Dermott v. Peck, 22 Tenn. 247, 1842 Tenn. LEXIS 82 (1842).

30. Seller and Purchaser Under Champertous Deed — Action Against Third Party.

When the conveyance is void for champerty, the title remains in the grantor, so as to enable him to maintain an action of ejectment upon it, and the void deed cannot be set up by a third person to the prejudice of his title; and, therefore, he may sue and recover the land, though such recovery inures to the benefit of the purchaser, by way of estoppel against the grantor; or the purchaser may maintain an action of ejectment, joining a count on the demise of the grantor, and in this mode recover the lands conveyed to him. Wilson & Wheeler v. Nance & Collins, 30 Tenn. 189, 1850 Tenn. LEXIS 88 (1850); Nance's Lessee v. Thompson, 33 Tenn. 321, 1853 Tenn. LEXIS 49 (1853); Cole v. Stewart's Heirs, 49 Tenn. 510, 1871 Tenn. LEXIS 38 (1871); Fowler v. Nixon, 54 Tenn. 719, 1872 Tenn. LEXIS 110 (1872); Hardwick v. Beard, 57 Tenn. 659, 1873 Tenn. LEXIS 284 (1873); Augusta Mfg. Co. v. Vertrees, 72 Tenn. 75, 1879 Tenn. LEXIS 7 (1879); Lenoir v. Mining Co., 88 Tenn. 168, 14 S.W. 378, 1889 Tenn. LEXIS 39 (1889); Key v. Snow, 90 Tenn. 663, 18 S.W. 251, 1891 Tenn. LEXIS 61 (1891); East Tennessee Iron & Coal Co. v. Broyles' Heirs, 95 Tenn. 612, 32 S.W. 761, 1895 Tenn. LEXIS 136 (1895); Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903).

Where the complainant becomes the purchaser of land sold under a decree of the chancery court to enforce his lien for unpaid purchase money, which land is in the actual adverse possession of defendant at the time of the decree and sale, and no writ of possession is sought or awarded in the final decree confirming the sale and vesting the title in complainant as purchaser; and where complainant as such purchaser sells and conveys the land while so adversely held; and, after several successive sales and conveyances of the same, while such adverse possession continues, and more than three years after the final disposition of the entire cause, complainant as such purchaser files his petition in the court for a writ of possession for the benefit of the last vendee, the court will refuse to entertain the same. Planters' Bank v. Fowlkes, 36 Tenn. 461, 1857 Tenn. LEXIS 35 (1857). See Lenoir v. Mining Co., 88 Tenn. 168, 14 S.W. 378, 1889 Tenn. LEXIS 39 (1889).

Where the declaration in an action of ejectment contains but a single count, in which the grantor and grantee in a champertous deed join as plaintiffs to recover the land, the whole suit must fail. There should be two counts, one in the names of the grantor and grantee as joint plaintiffs, and the other in the name of the grantor only. Cole v. Stewart's Heirs, 49 Tenn. 510, 1871 Tenn. LEXIS 38 (1871); Lenoir v. Mining Co., 88 Tenn. 168, 14 S.W. 378, 1889 Tenn. LEXIS 39 (1889); Key v. Snow, 90 Tenn. 663, 18 S.W. 251, 1891 Tenn. LEXIS 61 (1891).

Where the plaintiff in an ejectment suit makes a conveyance of the land sued for, or any part of it, pending the suit, such conveyance does not constitute an outstanding adverse title, but one in harmony and privity with the plaintiff's title; and, if such conveyance is champertous, the title to the property attempted to be thereby conveyed remains in the grantor, and, in either case, the prosecution of the suit may be continued in his name, but the recovery, if any, will inure to the benefit of plaintiff's grantee. Fowler v. Nixon, 54 Tenn. 719, 1872 Tenn. LEXIS 110 (1872); Gheen v. Osborne, 58 Tenn. 61, 1872 Tenn. LEXIS 228 (1872); Bird v. Cross, 123 Tenn. 419, 131 S.W. 974, 1910 Tenn. LEXIS 15 (1910).

Where the grantor and grantee in a champertous deed join as complainants in an ejectment bill in chancery to recover, in the name of the grantor, for the use and benefit of the grantee, the land so conveyed, which bill shows upon its face the champertous character of the sale and conveyance, the court will refuse the relief, and dismiss the bill. Lenoir v. Mining Co., 88 Tenn. 168, 14 S.W. 378, 1889 Tenn. LEXIS 39 (1889); East Tennessee Iron & Coal Co. v. Broyles' Heirs, 95 Tenn. 612, 32 S.W. 761, 1895 Tenn. LEXIS 136 (1895).

Separate counts are necessary for the several plaintiffs in an action of ejectment, where there is a champertous deed between the plaintiffs; and it is not decided in any of the cases that a recovery would be allowed even at law, where there is a joint count showing the champerty between the parties so joined. It is doubtful whether the rule allowing the grantor to recover in ejectment at law from a third party the land conveyed by his champertous deed ever had an application to a case where the pleadings disclosed where the true title was vested by the champertous deed. Lenoir v. Mining Co., 88 Tenn. 168, 14 S.W. 378, 1889 Tenn. LEXIS 39 (1889). See Williams v. Hogan, 19 Tenn. 187, 1838 Tenn. LEXIS 44 (1838); Cole v. Stewart's Heirs, 49 Tenn. 510, 1871 Tenn. LEXIS 38 (1871).

Where the grantor files his ejectment bill in chancery to recover the land so conveyed, but does not show in his bill the champertous deed, it cannot be set up by way of defense to defeat his suit though it be shown that the suit is, in fact, prosecuted in the name of the champertous grantor for the use and benefit of the champertous grantee, and at the latter's cost and expense. Key v. Snow, 90 Tenn. 663, 18 S.W. 251, 1891 Tenn. LEXIS 61 (1891).

The grantor in a champertous deed may disregard it, and in his own name sue in ejectment to recover the land from a third party; and, if the defendant proves the existence of such conveyance, the grantor may show its champertous character, and consequent invalidity in avoidance, and he may do this without specially pleading the invalidity of such conveyance. Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903).

31. Rights of Grantee of Adversely Held Land.

An action at law cannot be maintained against the grantor in a champertous deed for the breach of his covenant of the warranty of title; and if the fact of the adverse possession at the time of the execution of the deed appears in the declaration, a demurrer thereto will be sustained. Williams v. Hogan, 19 Tenn. 187, 1838 Tenn. LEXIS 44 (1838); Waters v. Hutton, 85 Tenn. 109, 1 S.W. 787, 1886 Tenn. LEXIS 18 (1886); Rich v. Scales, 116 Tenn. 57, 91 S.W. 50, 1905 Tenn. LEXIS 6 (1905).

The true rule in chancery should be that if the land adversely held was really sold and taken into the account in estimating the price, the vendor ought not to be allowed to retain that part of the purchase money represented by the lost land, and that chancery should entertain a bill for compensation in such case, upon the ground that the sale and conveyance, to the extent that it was thus champertous, is void. But, if the purchaser knew at the time that the land was adversely held, and that, too, by a paramount title, and this part of the land was not really intended to be sold or estimated in fixing the price, then the vendor ought not, in equity, to be liable upon his covenant or otherwise. Bradley v. Dibbrell, 50 Tenn. 522, 1871 Tenn. LEXIS 108 (1871); Ruffin v. Johnson, 52 Tenn. 604, 1871 Tenn. LEXIS 291 (1871); Williams v. Burg, 77 Tenn. 455, 1882 Tenn. LEXIS 83 (1882); Waters v. Hutton, 85 Tenn. 109, 1 S.W. 787, 1886 Tenn. LEXIS 18 (1886); Rich v. Scales, 116 Tenn. 57, 91 S.W. 50, 1905 Tenn. LEXIS 6 (1905).

Where at the time of the execution of a warranty deed the land was in the adverse possession of others under color of title, the deed was champertous and void so that the grantee had no right of action on the covenant of warranty but could maintain a suit in equity for recovery of the purchase price if it had no actual knowledge of the adverse possession at the time it took the deed and if the suit was brought within the period of limitation after discovery of the champertous nature of the transaction. Kitchen-Miller Co. v. Kern, 170 Tenn. 10, 91 S.W.2d 291, 1935 Tenn. LEXIS 101 (1936).

Quitclaim grantees from grantor out of possession without valid title at that time violates this section by taking possession of lot, even before receiving deed, with knowledge that possession and title were in a third party. Winborn v. Alexander, 39 Tenn. App. 1, 279 S.W.2d 718, 1954 Tenn. App. LEXIS 155 (Tenn. Ct. App. 1954).

32. Adverse Possessor — Action Against Claimant under Champertous Deed.

Where the plaintiff in an action of replevin to recover timber was in the adverse possession of the land from which the timber was taken, by actual possession of part and the consequent constructive possession of the rest to the extent of the boundaries in his title papers, a deed made by a person out of possession, under which the defendant entered on the land and removed the timber from that part so adversely held by such constructive possession, cannot, regardless of the superiority of title, protect the defendant against a recovery, because such deed is champertous as to the whole tract so adversely held, and the adverse possessor will be protected in his such possession so as to enable him to maintain a replevin suit for the timber felled and removed therefrom by the defendant claiming under such champertous deed. Lieberman, Loveman & O'Brien v. Clark, 114 Tenn. 117, 85 S.W. 258, 1904 Tenn. LEXIS 77 (1904); Kittel v. Steger, 121 Tenn. 400, 117 S.W. 500, 1908 Tenn. LEXIS 26 (1909); Deaderick v. State, 122 Tenn. 222, 122 S.W. 975, 1909 Tenn. LEXIS 18 (1909).

33. Adverse Possessor — Right to Sell.

A sale by a wrongdoer in possession for less than one year is void as a conveyance of a pretended title or right. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835); Kincaid v. Meadows, 40 Tenn. 188, 1859 Tenn. LEXIS 51 (1859); Green v. Cumberland Coal & Coke Co., 110 Tenn. 35, 72 S.W. 459, 1902 Tenn. LEXIS 34 (1903).

A wrongdoer, holding possession by a pretended title, must have been possessed, by himself or others, one whole year, before he can sell or contract to sell. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835); Kincaid v. Meadows, 40 Tenn. 188, 1859 Tenn. LEXIS 51 (1859).

34. Estoppel as Between Parties.

A champertous conveyance is good, as between the parties, by way of estoppel. Wilson & Wheeler v. Nance & Collins, 30 Tenn. 189, 1850 Tenn. LEXIS 88 (1850); Ruffin v. Johnson, 52 Tenn. 604, 1871 Tenn. LEXIS 291 (1871); Fenner v. Robertson, 1 Shan. 485 (1875); Williams v. Burg, 77 Tenn. 455, 1882 Tenn. LEXIS 83 (1882); Waters v. Hutton, 85 Tenn. 109, 1 S.W. 787, 1886 Tenn. LEXIS 18 (1886); Ferguson v. Prince, 136 Tenn. 543, 190 S.W. 548, 1916 Tenn. LEXIS 160 (1916).

The maker of a deed of trust for the benefit of creditors, conveying land adversely held at the time, cannot maintain a bill to enjoin the trustee's sale thereunder, on the ground that the trust deed is champertous, because a champertous conveyance is good, as between the parties, at least by way of estoppel. Ruffin v. Johnson, 52 Tenn. 604, 1871 Tenn. LEXIS 291 (1871); Fenner v. Robertson, 1 Shan. 485 (1875); Williams v. Burg, 77 Tenn. 455, 1882 Tenn. LEXIS 83 (1882); Waters v. Hutton, 85 Tenn. 109, 1 S.W. 787, 1886 Tenn. LEXIS 18 (1886).

The principle that grantors of champertous deed cannot be heard to say that their deed was champertous, applies where the grantors seek in a court of equity some affirmative relief by reason of its champertous nature. Kitchen-Miller Co. v. Kern, 170 Tenn. 10, 91 S.W.2d 291, 1935 Tenn. LEXIS 101 (1936).

35. Estoppel of Purchaser under Execution Against Grantor.

The purchaser of land at a sheriff's sale under an execution against the maker of a champertous deed of trust, estopped to actively set up the champerty against his own deed, issued from a judgment obtained after the making of the deed of trust, and when the grantor therein is contesting the deed, though holding the sheriff's deed, stands in no better position than the grantor in the deed of trust, through whom his title comes, and cannot take advantage of the champerty to defeat the title of the trustee or those deriving title under him. Fenner v. Robertson, 1 Shan. 485 (1875).

36. Estoppel of Adverse Possessor.

Where the person in the adverse possession of land agrees that a certain person may purchase it, or afterwards becomes a tenant of the purchaser, he is estopped to set up champerty in the sale and conveyance. McIntire v. Patton, 28 Tenn. 447, 1848 Tenn. LEXIS 100 (1848).

37. Cocomplainant Not Affected By Champerty — Decree as to all Parties.

Where the court is compelled to examine the merits of the cause, in order to determine the rights of a cocomplainant not affected with champerty, the court may, in the interest of shortening litigation, enter a decree on the merits as to all the parties, where such decree is adverse to the right claimed, though part of the complainants are affected with champerty. Greeno v. Ellas, 1 Tenn. Ch. App. 165 (1901).

38. “Or Taken the Rents or Profits” — Suggested Meaning.

It is difficult to understand what the words, “or taken the rents or profits for one whole year next before the sale,” as used, mean; but, without adjudicating the question, it seems to be conceded that they are applicable to a tortious possession, obtained wrongfully by a pretended title, by which the wrongdoer must hold possession, by himself or others, one whole year before he can sell or contract to sell. Kincaid v. Meadows, 40 Tenn. 188, 1859 Tenn. LEXIS 51 (1859).

39. Contingent Attorney Fees.

There is no law in force against contracts making attorneys' fees contingent and dependent upon the recoveries sought in suits to be conducted by them. Ducktown Sulphur, Copper & Iron Co. v. Fain, 109 Tenn. 56, 70 S.W. 813, 1902 Tenn. LEXIS 57 (1902).

Attorney's contract with a trustee in bankruptcy to prosecute suits for him to recover land belonging to the bankrupt's estate and to indemnify the trustee against the expenses of the suits for a percentage of the recovery is invalid under the common law, but does not defeat the attorney's right to recover reasonable compensation for the services rendered. Watkins v. Sedberry, 261 U.S. 571, 43 S. Ct. 411, 67 L. Ed. 802, 1923 U.S. LEXIS 2589 (1923).

66-4-203. Dismissal of suit on disclosure of facts.

Any suit at law or equity brought for the recovery of the lands or tenements bargained or contracted for, whether the agreement, sale, bargain, covenant, grant, or promise be executed or executory, shall be forthwith dismissed, with costs, by the court in which such suit may be pending, upon the facts being disclosed.

Code 1858, § 1778 (deriv. Acts 1821, ch. 66, § 1); Shan., § 3173; Code 1932, § 7825; T.C.A. (orig. ed.), § 64-408; modified.

NOTES TO DECISIONS

1. Ejectment — Champerty Not on Face of Bill.

Though a suit in ejectment cannot be successfully prosecuted where champerty appears upon the face of the bill, such suit may be maintained where champerty does not appear upon the face of the bill, despite the fact that a champertous deed is outstanding. Witt v. Siler, 12 Tenn. App. 116, — S.W.2d —, 1928 Tenn. App. LEXIS 204 (Tenn. Ct. App. 1928).

2. Conveyance Pending Litigation.

The complainant's sale and conveyance of the land in controversy, pending the litigation, is no ground for dismissing the bill as for champerty. Gheen v. Osborne, 58 Tenn. 61, 1872 Tenn. LEXIS 228 (1872). See Wills v. Whitmore, 68 Tenn. 198, 1877 Tenn. LEXIS 17 (1877).

3. Assignment of Bid after Biddings Reopened.

The assignment of a bid, made after the sale has been set aside and the biddings reopened, and after another sale has been made, is the sale of a “pretended claim,” and is illegal, though the decree setting aside the sale and reopening the biddings was entered at the next term, nunc pro tunc; and such assignee's appeal from the decree refusing to allow him to become the purchaser, and confirming the sale to the purchaser under the reopened biddings, will be dismissed. Newland v. Gaines, 48 Tenn. 720, 1870 Tenn. LEXIS 138 (1870).

4. Dismissal of Suit Based Upon Champertous Deed.

Landowner's action against an adjacent landowner to quiet title to a strip of land, which the parties'  referred to as the interlock, had to be dismissed because the landowner's deed to the interlock was champertous and thus, void; the adjacent landowner's act of enclosing a portion of the interlock in a fence constituted actual possession of that portion of the interlock, and the adjacent landowner held the entire interlock under color of title because the metes and bounds description of the land conveyed to him contained the interlock, which meant that he was in constructive possession of the entire interlock when a purchaser purportedly conveyed it to the landowner. Foust v. Metcalf, 338 S.W.3d 457, 2010 Tenn. App. LEXIS 693 (Tenn. Ct. App. Nov. 8, 2010).

66-4-204. Bona fide sales unimpaired.

This part shall not prevent an absolute and bona fide sale or mortgage of lands or tenements not possessed and held adversely at the time of such sale or mortgage; nor a sale by execution; nor a sale and conveyance by a nonresident of this state, of lands which such nonresident may own, and of which lands no person, at the time of such sale, holds adverse possession by deed, devise, or inheritance.

Code 1858, § 1779 (deriv. Acts 1821, ch. 66, § 1); Shan., § 3174; Code 1932, § 7826; T.C.A. (orig. ed.), § 64-409.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Champerty and Maintenance, § 9; 12 Tenn. Juris., Executions, § 47.

NOTES TO DECISIONS

1. Applicability.

Law of champerty did not apply because the church legally purchased the property in 1974 and, thus, the church was the rightful owner of the property, although it did not record its deed. As the rightful and legal owner of property, it could not adversely possess against his own interest in the land. Milledgeville United Methodist Church v. Melton, 388 S.W.3d 280, 2012 Tenn. App. LEXIS 638 (Tenn. Ct. App. Sept. 14, 2012).

2. “Not Possessed and Held Adversely” — Meaning.

The meaning of the words “not possessed and held adversely at the time of such sale” unquestionably is that the possession of the occupier shall not be adverse to the title of the grantor, not antagonistic to it, but a possession in accordance with it. The conveyance of land is not champertous, where the possession of the occupier is in accordance with the grantor's title. Chairs v. Hobson, 29 Tenn. 354, 1849 Tenn. LEXIS 84 (1849).

3. Conveyance Without Title or Possession — Effect.

Under this section a conveyance by one without title or possession is not champertous, unless the land was held adversely at the time. Ferguson v. Prince, 136 Tenn. 543, 190 S.W. 548, 1916 Tenn. LEXIS 160 (1916).

4. Court Sales.

A sale made under a decree, although there was an adverse holding at the time of filing the bill and making the decree, is not champertous. Sims's Lessee v. Cross, 18 Tenn. 460, 1837 Tenn. LEXIS 54 (1837).

5. Execution Sales.

The champerty statutes do not apply to execution sales. The exception was not necessary, for such sales would have been exempted by the construction of the statute. Park's Lessee v. Larkin, 1 Tenn. 101, 1805 Tenn. LEXIS 3 (1799); Kelly v. Morgan's Lessee, 11 Tenn. 437, 1832 Tenn. LEXIS 86 (1832); Sims's Lessee v. Cross, 18 Tenn. 460, 1837 Tenn. LEXIS 54 (1837); Todd v. Cannon, 27 Tenn. 512, 1847 Tenn. LEXIS 119 (1847); McClain v. Easly, 63 Tenn. 520, 1874 Tenn. LEXIS 298 (1874).

The rule of caveat emptor is not applicable to execution sales. Hames v. Archer Paper Co., 45 Tenn. App. 1, 319 S.W.2d 252, 1958 Tenn. App. LEXIS 108 (Tenn. Ct. App. 1958).

6. —Assignment of Bid of Execution Purchaser.

The champerty statutes do not apply to the assignment of the bid of the purchaser at execution sale, though the sale, the purchaser's assignment, and the sheriff's deed to the assignee are all made while the land is in the adverse possession of a purchaser from the judgment debtor holding under a deed made after the levy of the execution, and before the execution sale. When the execution sale took place, the title of the purchaser or his assignee related to the date of the levy and overreached the title under the intervening conveyance. McClain v. Easly, 63 Tenn. 520, 1874 Tenn. LEXIS 298 (1874).

7. —Agreement Between Purchaser at Own Execution and That of Another.

An execution creditor purchasing land under his execution and the execution of another person is not affected with champerty by an agreement or understanding between himself and such other person that the former should pay no money on the purchase and that the latter would pay a portion of the cost of a suit to test the validity of a previous conveyance made by the judgment debtor and attacked for fraud. Tilman v. Searcy, 26 Tenn. 347, 1846 Tenn. LEXIS 134 (1846).

8. Naked Adverse Possession of Nonresident's Land.

Mere naked adverse possession of a nonresident's land without color or assurance of title, will not render the deed champertous. Whiteside v. Martin, 15 Tenn. 383, 15 Tenn. 384, 1835 Tenn. LEXIS 15 (1835); McCoy's Lessee v. Williford, 32 Tenn. 642, 1853 Tenn. LEXIS 99 (1853); Cole v. Stewart's Heirs, 49 Tenn. 510, 1871 Tenn. LEXIS 38 (1871); Hardwick v. Beard, 57 Tenn. 659, 1873 Tenn. LEXIS 284 (1873); Bleidorn v. Pilot Mountain Coal & Mining Co., 89 Tenn. 166, 15 S.W. 737, 1890 Tenn. LEXIS 36 (1890).

9. Foreclosure and Sale by Nonresident Mortgagee.

Where nonresident mortgagee foreclosed and purchased mortgaged property at sheriff's sale and then transferred it to a third person, the deed from the mortgagee was not champertous where the mortgagor who remained in possession never actually disclaimed and was only a tenant at will. Whitson v. Johnson, 22 Tenn. App. 427, 123 S.W.2d 1104, 1937 Tenn. App. LEXIS 77 (1937).

10. Holding under Deed — Meaning.

A decree vesting title, or a grant, is a deed within the meaning of this statute. If the possession is under any conveyance purporting to convey title, the holding is under a deed. Cole v. Stewart's Heirs, 49 Tenn. 510, 1871 Tenn. LEXIS 38 (1871); Bleidorn v. Pilot Mountain Coal & Mining Co., 89 Tenn. 166, 15 S.W. 737, 1890 Tenn. LEXIS 36 (1890).

11. Deed Need Not be Registered.

This section makes an exception in the case of a nonresident's sale of his land of which “no person, at the time of such sale, holds adverse possession by deed, devise, or inheritance” and does not provide that the deed must be registered so that where the land is adversely held “by deed,” registered, or unregistered, the sale is champertous. Jones v. Mosley, 29 Tenn. App. 559, 198 S.W.2d 652, 1946 Tenn. App. LEXIS 91 (Tenn. Ct. App. 1946).

66-4-205. Presumption of champerty from sale of land adversely held by another.

If any person sells any lands or tenements, not having possession of them personally or by agent or tenant, the same being adversely held by color of title, champerty shall be presumed until the purchaser shows that such sale was bona fide made.

Code 1858, § 1780 (deriv. Acts 1821, ch. 66, § 1); Shan., § 3175; Code 1932, § 7827; T.C.A. (orig. ed.), § 64-410.

Cross-References. Adverse possession, limitations, § 28-2-101.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Champerty and Maintenance, §§ 3, 5, 6, 7, 9, 13; 12 Tenn. Juris., Executions, § 47; 25 Tenn. Juris., Witnesses, § 54.

NOTES TO DECISIONS

1. Application.

This section does not apply to execution sales. Hames v. Archer Paper Co., 45 Tenn. App. 1, 319 S.W.2d 252, 1958 Tenn. App. LEXIS 108 (Tenn. Ct. App. 1958).

Trial court erred in ruling for a landowner in his action against an adjacent landowner to quiet title to a strip of land, which the parties'  referred to as the interlock, because the landowner's deed to the interlock was champertous and thus, void; the adjacent landowner's act of enclosing a portion of the interlock in a fence constituted actual possession of that portion of the interlock, and the adjacent landowner held the entire interlock under color of title because the metes and bounds description of the land conveyed to him contained the interlock, which meant that he was in constructive possession of the entire interlock when a purchaser purportedly conveyed it to the landowner. Foust v. Metcalf, 338 S.W.3d 457, 2010 Tenn. App. LEXIS 693 (Tenn. Ct. App. Nov. 8, 2010).

2. Burden of Proof.

In an action of ejectment, the burden of proof rests upon the defendant to show the requisite adverse possession when a deed in the complainant's chain of title was made, so as to render it void for champerty; and this adverse possession must be established by clear proof of positive facts, rather than by inference or conjecture. Gernt v. Floyd, 131 Tenn. 119, 174 S.W. 267, 1914 Tenn. LEXIS 92 (1915).

3. “Bona Fide” Sale.

The sale must be bona fide, not merely as between the seller and purchaser, but also with reference to the policy and provisions of the champerty statutes, and a sale which comes within the inhibitions will be absolutely void, without respect to the good faith of the parties. Gass v. Malony, 20 Tenn. 452, 1839 Tenn. LEXIS 77 (1839); Bleidorn v. Pilot Mountain Coal & Mining Co., 89 Tenn. 166, 15 S.W. 737, 1890 Tenn. LEXIS 36 (1890).

Part 3
Loans by Nonprofit Lenders

66-4-301. Restrictive covenants on loans by nonprofit lenders at a zero or low interest rate.

  1. All contracts for home loans made by a nonprofit lender with a zero percent (0%) interest rate or low interest rate loan must contain the following restrictive covenant:

    This zero percent (0%) interest or low interest rate loan cannot be refinanced, replaced or consolidated without the prior, written approval of the local board of directors of the nonprofit lender that financed the loan so long as this initial, zero percent (0%) interest or low interest rate loan is in existence.

  2. As used in this section:
    1. “Home loan” means a term loan which secures a one (1) to four (4) family dwelling used as the primary residence of the borrower; and
    2. “Low interest loan” means a home loan that carries an interest rate that is two (2) percentage points or more below the yield on United States treasury securities with a comparable maturity at the time the loan is made.
  3. Each mortgage or deed of trust securing a home loan as provided in subsection (a) shall state on the face of the instrument prominently displayed:

    THIS INSTRUMENT SECURES A ZERO INTEREST OR LOW INTEREST RATE LOAN AS DEFINED UNDER TENNESSEE CODE ANNOTATED SECTION 66-4-301 AND IS SUBJECT TO THE RESTRICTIONS THEREIN.

  4. A lender may reasonably rely on such statement or lack thereof appearing on the face of the instrument as conclusive proof of the existence or nonexistence of a restricted home loan as provided in subsection (a).

Acts 2004, ch. 657, § 1.

Chapter 5
Conveyances of Property

Part 1
General Provisions

66-5-101. Grants or devises passing full estate.

Every grant or devise of real estate, or any interest therein, shall pass all the estate or interest of the grantor or devisor, unless the intent to pass a less estate or interest shall appear by express terms, or be necessarily implied in the terms of the instrument.

Code 1858, § 2006 (deriv. Acts 1851-1852, ch. 33); Shan., § 3672; Code 1932, § 7597; T.C.A. (orig. ed.), § 64-501.

Cross-References. Deeds of officers as prima facie evidence of facts recited, § 24-5-101.

Estates in property, title 66, ch. 1.

Estate with unlimited power of disposition, § 66-1-106.

Execution by minor veterans, § 58-3-103.

Operation of devise, §§ 32-3-101, 32-3-102.

Transfer to class of persons, effect of death of one person before time of enjoyment, § 32-3-104.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 98.

Tennessee Jurisprudence, 1 Tenn. Juris., Adverse Possession, § 34; 9 Tenn. Juris., Deeds, §§ 22, 25; 11 Tenn. Juris., Evidence, § 45; 21 Tenn. Juris., Remainders, Reversions and Executory Interests, §§ 15, 35; 25 Tenn. Juris., Wills, § 132.

Law Reviews.

Survey of Tennessee Property Law, II. Estates in General (Toxey H. Sewell), 46 Tenn. L. Rev. 161.

NOTES TO DECISIONS

1. Conveyances or Devises Without Words of Inheritance — Effect of Statute.

Devises in this state, without words of inheritance or the use of the term “heirs,” always passed the devisor's entire estate in the land, and operated to pass a fee simple estate, if the devisor owned such estate in the land, unless the contrary intent plainly appeared in the will. Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844); Thurston v. University of North Carolina, 72 Tenn. 513, 1880 Tenn. LEXIS 55 (1880); King v. Miller, 79 Tenn. 633, 1883 Tenn. LEXIS 117 (1883); Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Since the enactment of § 66-1-101 and this section, an absolute fee simple estate in land may be conveyed to the grantee, without the use of the word “heirs” or other words of inheritance. Wynne v. Wynne, 56 Tenn. 308, 1872 Tenn. LEXIS 146 (1872); Topp v. White, 59 Tenn. 165, 1873 Tenn. LEXIS 43 (1873); Hurd v. French, 2 Cooper's Tenn. Ch. 359 (1875); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908); Travis v. Sitz, 135 Tenn. 156, 185 S.W. 1075, 1915 Tenn. LEXIS 192, L.R.A. (n.s.) 1917A671 (1915); Remke v. Remke, 11 Tenn. App. 301, 1929 Tenn. App. LEXIS 90 (1929).

This section and § 66-1-101 did not change the effect of the use of words of inheritance, but merely provided that they were not necessary to create an estate in fee. Graves v. Graves, 3 Tenn. App. 439, 1926 Tenn. App. LEXIS 121 (1926); Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939); Hamby v. Northcut, 25 Tenn. App. 11, 149 S.W.2d 484, 1940 Tenn. App. LEXIS 87 (Tenn. Ct. App. 1940).

The purpose of this section and § 66-1-101 was to abolish the common law rule requiring words of inheritance as an indispensable prerequisite to the creation of an absolute estate in fee simple. Nichols v. Todd, 20 Tenn. App. 564, 101 S.W.2d 486, 1936 Tenn. App. LEXIS 48 (Tenn. Ct. App. 1936); Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

Since the passage of § 66-1-101 and this section, a grant to “A” or to “A and his heirs” means one and the same thing and vests in the grantee the same quantum of interest. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

As a result of § 66-1-101 and this section, a fee passes without the use of the word “heirs” or other words of inheritance, unless the intent to pass a less estate appears. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

The vestiture of title “in Mary Hamby,” and the vestiture of title “in Mary Hamby and her heirs,” would be, in legal effect, precisely the same; and either would purport to vest in Mary Hamby an absolute title in fee. Hamby v. Northcut, 25 Tenn. App. 11, 149 S.W.2d 484, 1940 Tenn. App. LEXIS 87 (Tenn. Ct. App. 1940).

2. Rule at Common Law.

At common law, and before the enactment of § 66-1-101 and this section a conveyance of land without words of inheritance vested only a life estate; and to create an absolute estate in fee simple, it was indispensable that the land be conveyed to the grantee and his heirs, although the deed purported to convey the land to the grantee forever, or to him and his assigns forever. This was a rule of property. Hunter v. Bryan, 24 Tenn. 47, 1844 Tenn. LEXIS 12 (1844); Cromwell v. Winchester, 39 Tenn. 389, 1859 Tenn. LEXIS 233 (Tenn. Apr. 1859); McKinney v. Stacks, 53 Tenn. 284, 1871 Tenn. LEXIS 358 (Tenn. Oct. 7, 1871); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

At common law and before the enactment of the statute, a conveyance of land without words of inheritance vested only a life estate, and to create an absolute estate in fee simple, it was indispensable that the land be conveyed to the grantee and his heirs, although the deed purported to convey the land to the grantee forever or to him and his assigns forever. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

3. Intent — Ascertainment — Effectuating.

Under § 66-1-101 and this section, the courts look to the whole of the instrument, without reference to formal common law divisions of deeds and common law rules of construction in order to ascertain the intention of the parties, and will not allow technical rules to override the intent. Kirk v. Burkholtz, 3 Cooper's Tenn. Ch. 421 (1877); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908); Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911); Brier Hill Collieries v. Gernt, 131 Tenn. 542, 175 S.W. 560, 1914 Tenn. LEXIS 126 (1915); Laurenzi v. Atlas Ins. Co., 131 Tenn. 644, 176 S.W. 1022, 1915 Tenn. LEXIS 135 (1915); Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

The entire “terms of the instrument” may be considered in order to ascertain the estate actually intended to be vested in the grantee. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Brier Hill Collieries v. Gernt, 131 Tenn. 542, 175 S.W. 560, 1914 Tenn. LEXIS 126 (1915); Nashville, C. & S. L. R. Co. v. Bell, 162 Tenn. 661, 39 S.W.2d 1026, 1931 Tenn. LEXIS 84 (1931).

In determining what estate the grantor intended to convey, the deed as a whole is to be considered and the intention of the grantor gathered by giving all the words used their appropriate meaning. Nashville, C. & S. L. R. Co. v. Bell, 162 Tenn. 661, 39 S.W.2d 1026, 1931 Tenn. LEXIS 84 (1931); Pryor v. Richardson, 162 Tenn. 346, 37 S.W.2d 114, 1930 Tenn. LEXIS 96 (1930); Lockett v. Thomas, 179 Tenn. 240, 165 S.W.2d 375, 1942 Tenn. LEXIS 17 (1942); Baird v. Southern Ry., 179 Tenn. 366, 166 S.W.2d 617, 1942 Tenn. LEXIS 32 (1942); Archer v. Culbertson, 28 Tenn. App. 52, 185 S.W.2d 912, 1944 Tenn. App. LEXIS 61 (1944).

The merger of an equitable title into the legal title will not be permitted where the result will be to defeat the intention of the grantor or testator. Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562, 1933 Tenn. LEXIS 4, 92 A.L.R. 343 (1933).

In determining whether an instrument is testamentary in character or a deed, the intent of the grantor is controlling. Wright v. Huskey, 592 S.W.2d 899, 1979 Tenn. App. LEXIS 368 (Tenn. Ct. App. 1979).

4. “Assigns” — Use or Omission of Word — Effect.

The use of the word “assigns” in the granting clause and habendum of a deed imports an intention to give the grantee the power to sell and dispose of the property, and, therefore, creates a fee simple estate in the grantee. Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Failure to express “assigns” in conveyance will not defeat curtesy. Travis v. Sitz, 135 Tenn. 156, 185 S.W. 1075, 1915 Tenn. LEXIS 192, L.R.A. (n.s.) 1917A671 (1915).

5. Quitclaim Deed — Effect.

A quitclaim deed conveys all the title then held by the grantor unless its language renders that construction impossible. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

In allowing the witness to testify that it was not the witness's intention to release whatever interest held in the property via the quitclaim deed, the bankruptcy court permitted the witness to contradict the quitclaim deed in violation of the parol evidence rule. Joyner v. Johnson, 187 B.R. 598 (E.D. Tenn. 1994).

Trustee was entitled to summary judgment when the grantor sought to set aside a quitclaim deed, which the grantor admittedly executed after discussions with the grantor's attorney, because the grantor intentionally made an irrevocable gift of property when the grantor established an irrevocable gift trust and executed a quitclaim deed transferring title of property to the trustee and the deed was, thereafter, recorded. 2012 Irrevocable Gift Trust, — S.W.3d —, 2018 Tenn. App. LEXIS 381 (Tenn. Ct. App. July 2, 2018).

6. Conflicting Parts of Deed or Will — Construction.

The first clause in a deed when in conflict with a subsequent clause, and the last clause in a will when in conflict with a preceding clause, must prevail; but this is only where there is an irreconcilable repugnance, and both clauses in the deed or will cannot stand. There is no such repugnance where the last clause in a deed does no more than extend and enlarge the first clause. Meredith v. Owen, 36 Tenn. 223, 1856 Tenn. LEXIS 86 (1856); Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Where the premises convey a life estate, and the habendum enlarges such estate to an absolute estate, the habendum is not repugnant to the premises, because it only extends and enlarges the estate given by the premises. Meredith v. Owen, 36 Tenn. 223, 1856 Tenn. LEXIS 86 (1856); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Where the husband's deed, by its premises, conveyed land to his wife, “and her heirs in fee simple forever,” and, by its first habendum, limited it to her sole and separate use and benefit, “with power to sell, and, by deed made and executed jointly with her husband, convey the said lot of land, and vest the proceeds in other property, to be held for the same sole and separate use as the property herein conveyed,” with the additional provision that, if the husband survived the wife, the land should revert to him in fee simple; and, by its second habendum, limited the land to the wife “and her heirs forever,” the husband, surviving the wife, takes the land, because such was manifestly the intention of the parties. Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908).

Where granting clause conveyed property to husband and wife, and habendum recited that the conveyance was to husband and wife as joint tenants for the period of their lives and upon their death the survivor was to take the estate in fee simple, and further provided that during their lives the land could be conveyed by their joint deed, the deed construed as a whole indicated an intention to vest the grantees a joint estate in fee. Hamilton v. Fowler, 99 F. 18, 1899 U.S. App. LEXIS 2790 (6th Cir. Tenn. 1899), cert. denied, 176 U.S. 685, 20 S. Ct. 1027, 44 L. Ed. 639, 1900 U.S. LEXIS 2769 (1900), cert. denied, Hamilton v. Fowler, 176 U.S. 685, 20 S. Ct. 1027, 44 L. Ed. 639, 1900 U.S. LEXIS 2769 (1900).

Where the granting clause of a deed conveyed land to the grantees, “their heirs and assigns forever,” with the exception of a homestead therein for the grantors, and the habendum was to the grantees “their lifetime and then to their heirs and assigns forever,” the granting and habendum clauses were wholly repugnant, and not being reconcilable by the aid of the context showing the grantor's intention, the granting clause creating a fee simple estate will prevail over the subsequent habendum granting a less estate. Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908). See Laurenzi v. Atlas Ins. Co., 131 Tenn. 644, 176 S.W. 1022, 1915 Tenn. LEXIS 135 (1915).

Where there is an irreconcilable conflict or repugnancy between the premises of a deed and its habendum, the former prevails. Ballard v. Farley, 143 Tenn. 161, 226 S.W. 544, 1920 Tenn. LEXIS 5 (1920); Hicks v. Sprankle, 149 Tenn. 310, 257 S.W. 1044, 1923 Tenn. LEXIS 101 (1924).

7. Subsequent Words Cutting Down Fee.

An estate granted absolutely will not be cut down or destroyed by a subsequent clause in the habendum, which, if it raises any doubt, will be resolved against the limitation and in favor of the estate. Hicks v. Sprankle, 149 Tenn. 310, 257 S.W. 1044, 1923 Tenn. LEXIS 101 (1924).

Where there is primarily a clear and certain devise of a fee about which the testamentary intention is obvious and without ambiguity the estate thus given will not be cut down or lessened by subsequent words which are ambiguous or of doubtful meaning. Smith v. Reynolds, 173 Tenn. 579, 121 S.W.2d 572, 1938 Tenn. LEXIS 45 (1938).

Where granting clause provided for the conveyance of a certain tract of land to a named grantee and the habendum defined the estate granted as “in fee simple” but contained the immediate qualification that if the grantee did not dispose of the property in his lifetime and died seized and possessed thereof, then the fee simple was to pass to the grantee's daughter if she was living at the grantee's death, and where such daughter survived the grantee, the daughter took the land in fee simple on death of the grantee even though the grantee undertook to otherwise dispose of the property by will. Lockett v. Thomas, 179 Tenn. 240, 165 S.W.2d 375, 1942 Tenn. LEXIS 17 (1942).

Courts refuse to cut down an estate already granted in fee or absolutely, when the supposed terms of limitation are to be found in some subsequent portion of the will, and are not, in themselves, clear, unmistakable and certain, so that there can be no doubt of the meaning and intention of the testator. Whitfield v. Butler, 30 Tenn. App. 221, 204 S.W.2d 537, 1947 Tenn. App. LEXIS 79 (1947).

A fee simple title granted in one clause of a will without any power of disposition may be cut down or limited in a subsequent clause by express terms or necessary implication. Whitfield v. Butler, 30 Tenn. App. 221, 204 S.W.2d 537, 1947 Tenn. App. LEXIS 79 (1947).

Where testatrix conveyed her home to the devisee “to live in and not to be sold” the court concluded that testatrix's will passed a fee simple absolute in the home to the devisee, and the attempted restraint on alienation was declared void as inconsistent with the incidents and nature of the estate devised and contrary to public policy. White v. Brown, 559 S.W.2d 938, 1977 Tenn. LEXIS 656 (Tenn. 1977).

8. Doubtful Expressions — Construction.

Following the description, a deed provided: “This conveyance is made to the said Helen C. Graves for the sole use and benefit of herself and her heirs at her death and not to be subject in any way to the debts of her husband. The right to control the same during my natural life is hereby retained.” The remainder of the deed was in the regular form of a warranty deed. Such deed conveyed a fee-simple title. Graves v. Graves, 3 Tenn. App. 439, 1926 Tenn. App. LEXIS 121 (1926).

If the expression in the will is doubtful, the doubt is resolved against the limitation and in favor of the absolute estate, and clause in will of childless wife bequeathing to her husband all her property, real and personal, “to be used by him for his support and comfort during his life” conferred absolute estate upon the husband. Green v. Young, 163 Tenn. 16, 40 S.W.2d 793, 1931 Tenn. LEXIS 87 (1931).

Where the will of a testator aged 94 years, whose children resided with him, devised first the use, improvements, income of his dwelling-house, lands and appurtenances to his children “for and during their natural lives,” and then devised and bequeathed “all the residue of my estate personal or mixed of which I shall die seized or possessed” to his children, followed by pecuniary bequests to grandchildren, and concluding with a bequest to his children of all remainder of “my money at my decease,” the proper construction gives the remainder in the lands to the children, there being no gift over. Williams v. Williams, 167 Tenn. 26, 65 S.W.2d 561, 1933 Tenn. LEXIS 3 (1933).

Doubt as to meaning of a will will be resolved against a limitation and in favor of the vesting of an estate absolute. The testator is presumed to dispose of his entire estate and not to die intestate as to any part or interest therein. Williams v. Williams, 167 Tenn. 26, 65 S.W.2d 561, 1933 Tenn. LEXIS 3 (1933); Cannon v. Cannon, 182 Tenn. 1, 184 S.W.2d 35, 1944 Tenn. LEXIS 294 (1944).

A deed to “Robert L. Johnson and wife Dortha Jane Johnson and her Dortha Jane Johnson's heirs and assigns” vested an estate in fee in the husband and wife as tenants by the entireties as against the contention that the phrase “and her Dortha Jane Johnson's heirs and assigns” manifested an intention to create in the grantees an estate of joint tenancy or tenancy in common, and the latter words were surplusage. Bost v. Johnson, 175 Tenn. 232, 133 S.W.2d 491, 1939 Tenn. LEXIS 34 (1939).

Will by uneducated man in his own handwriting which read “I want my wife … to then take in her perseson the remainder of all of my property boath real and personal and use as her Own for her surpoard in any way that her needs require until her death” vested the fee in the widow. Cannon v. Cannon, 182 Tenn. 1, 184 S.W.2d 35, 1944 Tenn. LEXIS 294 (1944).

Where grantor transferred land by deed to wife for and during her natural life and upon her death to his daughter if then living or if daughter was dead “to her children then living, or the representatives of such as may be dead, and in the event of the death of …(the daughter) … dying without children, or the representatives of such, then in the event said land is to revert back to my legal heirs…” vested a fee simple absolute in the daughter upon her surviving her mother. Templeton v. Stong, 182 Tenn. 591, 188 S.W.2d 560, 1945 Tenn. LEXIS 257 (1945).

Provision in will providing for division of real estate of testator between two sons after the death of his widow and providing that “if either or one of my sons, or both of them should die without children born to them” the land should go to his stepchildren meant death of one or both of the sons within the lifetime of the testator, and where the sons survived the testator both married son with children and unmarried son without children took an undivided half interest in the realty in fee upon death of the widow. Johnson v. Painter, 189 Tenn. 307, 225 S.W.2d 72, 1949 Tenn. LEXIS 430 (1949).

The words “I give to my daughter all of my property” was sufficient to convey a fee simple title. Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976), aff'd, Harris v. Bittikofer, 562 S.W.2d 815, 1978 Tenn. LEXIS 593 (Tenn. 1978).

9. Conveyances Passing Whatever Interest Grantor Has.

The deed of an executor, conveying “all the right, title, and claim” of his testator holding under registered tax deed purporting to convey the fee, is an assurance of title. Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911).

One who makes a deed conveying all his right, title, estate, and interest in certain described lands, or who uses equivalent words, necessarily refers to his title papers, and the deed conveys whatever interest those title papers show that he has; and where his title papers do not convey a title to him in fact and law, but only purport to do so, the effect would be the same, that is, the deed would carry whatever force or effect such assurance has under our statutes of limitation. Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911); Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912); Brier Hill Collieries v. Gernt, 131 Tenn. 542, 175 S.W. 560, 1914 Tenn. LEXIS 126 (1915); Sequatchie Land Co. v. Sewanee Coal, Coke & Land Co., 137 Tenn. 313, 193 S.W. 106, 1916 Tenn. LEXIS 78 (1916).

Where a deed conveyed “all right, title, claim, and interest being an undivided one half interest in certain lands,” the whole estate in the lands, as such, was conveyed so far as the grantor was concerned, because an instrument should be construed against the grantor where the description of the quantity of the estate affected is doubtful, and where property is sufficiently described as a whole, the description is not restricted by a further general statement which may be given a construction inconsistent with the prior inclusive words of grant. Sequatchie Land Co. v. Sewanee Coal, Coke & Land Co., 137 Tenn. 313, 193 S.W. 106, 1916 Tenn. LEXIS 78 (1916); Pipkin v. Lentz, 49 Tenn. App. 206, 354 S.W.2d 87, 1961 Tenn. App. LEXIS 153 (1961).

10. Executory Devisees or Contingent Remaindermen — Estates Conveyable.

Conveyances by executory devisees and contingent remaindermen may be operative to pass or convey the after acquired estate, interest, or title, if there be a general warranty of title, because such warranty operates as an estoppel to deny the title of the warantee. Henderson v. Overton, 10 Tenn. 394, 1830 Tenn. LEXIS 8, 24 Am. Dec. 492 (1830); Robertson v. Gaines, 21 Tenn. 367, 1841 Tenn. LEXIS 20 (1841); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883); Coal Creek Mining & Mfg. Co. v. Ross, 80 Tenn. 1, 1883 Tenn. LEXIS 133 (1883); Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890); Bruce v. Goodbar, 104 Tenn. 638, 58 S.W. 282, 1900 Tenn. LEXIS 38 (1900); Taylor v. Swafford, 122 Tenn. 303, 123 S.W. 350, 1909 Tenn. LEXIS 24, 25 L.R.A. (n.s.) 442 (1909); Bird v. Cross, 123 Tenn. 419, 131 S.W. 974, 1910 Tenn. LEXIS 15 (1910); Ferguson v. Prince, 136 Tenn. 543, 190 S.W. 548, 1916 Tenn. LEXIS 160 (1916).

The deed of conveyance of land by the executory devisees in the estate, who are ascertained and named, or the deed by the contingent remaindermen, operates to pass their present and future estate or interest acquired upon the happening of any contingency provided for in the will or deed, unless a contrary intent appears. The grantee steps into their shoes, taking their chances for future interests as well as their present estate. Bruce v. Goodbar, 104 Tenn. 638, 58 S.W. 282, 1900 Tenn. LEXIS 38 (1900).

Where daughter took life estate only, with remainder to children, and, in default of surviving children, to brothers and sisters, partition deed from such brothers and sisters conveying all their interest held valid conveyance divesting them of all rights as contingent remaindermen in grantee's estate. Frank v. Frank, 153 Tenn. 215, 280 S.W. 1012, 1925 Tenn. LEXIS 21 (1926).

11. Equity or Redemption — Conveyances Passing.

The conveyance of land in fee, without reservation of any right or interest, operates to pass the grantor's entire interest in the land, and includes his right of redemption, existing under a mortgage or execution sale, though not specially mentioned. Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

12. Vested Remainder — Devise Passing.

A devise of all of testator's “personal property and real estate” passes a vested remainder estate the right to the possession and enjoyment of which has not accrued because the property is still held by the life tenant who survived the testator. Davis v. Bawcum, 57 Tenn. 406, 1873 Tenn. LEXIS 223 (1873).

13. Homesteads and Dower — Conveyances Passing.

Under a deed of conveyance of land, either absolute or as a security for debt, executed by a husband and wife, and duly acknowledged as required by law, or under a judicial decree or judgment in a suit to which the husband and wife are both parties, divesting the title out of them and vesting the same in others, their right of homestead, and the wife's inchoate right to dower, pass to the grantee under the deed, or to the party in whom the title is vested by such decree or judgment, although the deed contains no express stipulation conveying the homestead and dower, and the decree or judgment does not in terms mention the homestead and dower. Lover, Strouse & Co. v. Bessenger, 68 Tenn. 393, 1876 Tenn. LEXIS 28 (1876); Atwater v. Butler, 68 Tenn. 299, 1878 Tenn. LEXIS 13 (1878); Crook v. Lunsford, 70 Tenn. 237, 1879 Tenn. LEXIS 165 (1879); Daly v. Willis, 73 Tenn. 100, 1880 Tenn. LEXIS 90 (1880); Fogg v. Yeatman, 74 Tenn. 575, 1880 Tenn. LEXIS 295 (1880); Nichol v. County of Davidson, 76 Tenn. 389, 1881 Tenn. LEXIS 23 (1881); Parr, Nolen & Co. v. Fumbanks, 79 Tenn. 391, 1883 Tenn. LEXIS 77 (1883), overruled, White v. Fulghum, 87 Tenn. 281, 10 S.W. 501, 1888 Tenn. LEXIS 60 (1889); Smith v. Carter Bros. & Co., 84 Tenn. 527, 1886 Tenn. LEXIS 140 (1886), superseded by statute as stated in, In re Wilson, 347 B.R. 880, 2006 Bankr. LEXIS 1766 (Bankr. E.D. Tenn. 2006); Hall v. Fulghum, 86 Tenn. 451, 7 S.W. 121, 1887 Tenn. LEXIS 61 (1888).

The express conveyance or release of either the homestead or dower in a deed of trust or mortgage leaves the right to the one not so expressly conveyed or released unaffected, for the express conveyance of one is the exclusion of the other. Atwater v. Butler, 68 Tenn. 299, 1878 Tenn. LEXIS 13 (1878); Daly v. Willis, 73 Tenn. 100, 1880 Tenn. LEXIS 90 (1880).

The wife's right to homestead was not defeated by the fact that her husband made to her a voluntary conveyance of the homestead property, which conveyance was subsequently set aside at a suit by the husband's creditors, as the conveyance was merely fraudulent in law; thus her application for assignment of homestead was not barred, after remand to execute the decree, there being no question of homestead made in the original pleadings. Rosenbaum v. Davis, 106 Tenn. 51, 60 S.W. 497, 1900 Tenn. LEXIS 132 (1900).

Where the decree in divorce proceedings is silent upon the question, the homestead will, upon the dissolution of the marriage, remain in possession of the party holding the legal title thereto, discharge from all homestead rights or claims of the other party; thus, a divorced wife could not subsequently, in an independent suit, assert her right to homestead against the husband or his vendee. Moore v. Ward, 107 Tenn. 731, 64 S.W. 1087, 1901 Tenn. LEXIS 125 (1901).

14. Conveyances and Devises to Married Women.

Where property was conveyed to trustees, by the first clause to the mother, and by the second clause “for the only proper use, benefit, and behoof of the said” mother and her children, and by the last clause to the mother and her heirs, these clauses gave her the sole and entire right, and created in her a separate estate, free from the rights of her husband, and her children took no estate in the property. Moore v. Simmons, 39 Tenn. 545, 1859 Tenn. LEXIS 272 (Tenn. Apr. 1959); Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879).

A devise to a married woman and the heirs of her body created an estate tail at common law, but gave her, under § 66-1-102, an absolute fee simple estate; and the addition of the clause “for her own sole and separate use during her natural life,” added after the word “body,” did not show an intention to convey a less estate than a fee simple interest, but merely had the effect of excluding the marital rights of her husband during her life. Skillin v. Loyd, 46 Tenn. 563, 1869 Tenn. LEXIS 99 (1869), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Meacham v. Graham, 98 Tenn. 190, 39 S.W. 12, 1896 Tenn. LEXIS 217 (Tenn. Dec. 1896); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Where a testator gave and devised to his wife all of his estate, real and personal, “for her own individual purposes and property, to have for her benefit to enable her to support his three infant children,” naming them, but with no limitation over to his children, it was held that she took the absolute estate. Davis v. Bawcum, 57 Tenn. 406, 1873 Tenn. LEXIS 223 (1873); Allen v. Westbrook, 84 Tenn. 251, 1886 Tenn. LEXIS 91 (1886), criticized, Sartain v. Dixie Coal & Iron Co., 150 Tenn. 633, 266 S.W. 313, 1924 Tenn. LEXIS 34 (1924). See Maloney v. Hawkins, 77 Tenn. 663, 1882 Tenn. LEXIS 119 (1882).

Under a title bond to husband and wife binding the obligor to convey certain land by warranty deed to the wife, for her sole and separate use, reserving to the husband during his lifetime the control and management of the property for the use and support of the wife and their children, as expressed in one place, and for the use of the wife, himself, and family, as expressed in another place; the wife takes a separate equitable estate, the father the right to control and manage the property during life in trust as provided in the bond, and the children the right to participate in the benefits of the income while members of the family, and, after their mother's death, there being no breach of the bond, the children inherit the equitable estate from their mother, subject to the father's right of control and management of the property for himself and the children constituting the family. Hix v. Gosling, 69 Tenn. 560, 1878 Tenn. LEXIS 140 (1878).

15. Conveyance to Wife — Effect on Curtesy.

Where realty is conveyed by husband to wife, directly, he is not entitled to an estate by the curtesy therein. Bingham v. Weller, 113 Tenn. 70, 81 S.W. 843, 106 Am. St. R. 803, 1904 Tenn. LEXIS 6, 69 L.R.A. 370 (1904); Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

Where a husband pays for realty, directing the grantor to convey to his wife, he has the right of curtesy therein, this section notwithstanding. Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

A husband's general warranty deed to his wife divests him of his curtesy estate in the land conveyed, if same is not excepted or reserved. Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

16. —Subsequent Matters Affecting Rights.

Where a husband bought lands, directing the grantor to convey them to his wife, he acquired an estate by curtesy consummate in such lands of his intestate wife; however, where they had joined in a trust deed for money borrowed by the husband, upon the death of the wife intestate, the husband could not establish tenancy by curtesy consummate without personally discharging the mortgage for protection of their minor children. Hull v. Hull, 139 Tenn. 572, 202 S.W. 914, 1918 Tenn. LEXIS 7 (1918).

17. Conveyance in Trust for Benefit of Wife — Effect on Curtesy.

A husband, after the death of his wife, took an estate of curtesy in lands which he had conveyed to a trustee for the benefit of his wife, as the deed made no settlement of the land after the death of the wife, and the husband was taken to have intended that the wife hold the estate subject to curtesy consummate, it not being clearly excluded. Frazer v. Hightower, 59 Tenn. 94, 1873 Tenn. LEXIS 31 (1873).

18. Trust Estate for Support of Children.

While trust fund to mother for support of children may be limited for the education of the children during their minority, yet the trust fund for their maintenance is not so limited, but continues as long as they remain members of the family, especially if there is no reasonable objection to this course, or if the child is a female with no other protection and means of support. Pilcher v. McHenry, 82 Tenn. 77, 1884 Tenn. LEXIS 108 (1884).

19. Trustee's Interest — Duration of Trust.

A trustee takes only the quantity of interest which the purposes of the trust require, and the trust cannot continue after the death of the surviving beneficiary. Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562, 1933 Tenn. LEXIS 4, 92 A.L.R. 343 (1933).

20. Rents and Profits Devised.

A devise or conveyance of the rents and profits, or the income of the land, is equivalent to a devise or conveyance of the land itself; and, if unlimited, there is vested in the devisee or grantee an absolute fee-simple title to the land, without the use of the term “heirs,” or other words of inheritance, notwithstanding no express power of alienation is conferred upon the devisee or grantee. However, the devise or conveyance of the rents and profits may be for life of the devisee or grantee, and then there is vested in him only a life estate in the land; and such devise or conveyance of the rents and profits may be in remainder, and in that case, there is vested in the devisee or grantee a remainder estate in the land. Polk v. Faris, 17 Tenn. 209, 1836 Tenn. LEXIS 32, 30 Am. Dec. 400 (1836), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976); Settle v. Settle, 29 Tenn. 474, 1850 Tenn. LEXIS 18 (1850); Morgan v. Pope, 47 Tenn. 541, 1870 Tenn. LEXIS 170 (1870); Turley v. Massengill, 75 Tenn. 353, 1881 Tenn. LEXIS 127 (1881), overruled in part, Jourolmon v. Massengill, 86 Tenn. 81, 5 S.W. 719, 1887 Tenn. LEXIS 27 (1887); Davis v. Williams, 85 Tenn. 646, 4 S.W. 8, 1887 Tenn. LEXIS 6 (1887); Jourolmon v. Massengill, 86 Tenn. 81, 5 S.W. 719, 1887 Tenn. LEXIS 27 (1887); Henson v. Wright, 88 Tenn. 501, 12 S.W. 1035, 1889 Tenn. LEXIS 71 (1890); Porter v. Lee, 88 Tenn. 782, 14 S.W. 218, 1890 Tenn. LEXIS 21 (1890); Vick v. Gower, 92 Tenn. 391, 21 S.W. 677, 1892 Tenn. LEXIS 86 (1892); Johnson v. Johnson, 92 Tenn. 559, 23 S.W. 114, 1893 Tenn. LEXIS 13, 22 L.R.A. 179 (1893); Bank of Shelby v. James, 95 Tenn. 8, 30 S.W. 1038, 1895 Tenn. LEXIS 60 (1895); Jobe v. Dillard, 104 Tenn. 658, 58 S.W. 324, 1900 Tenn. LEXIS 40 (1900); Mays v. Beech, 114 Tenn. 544, 86 S.W. 713, 1904 Tenn. LEXIS 110 (1904); Eager v. McCoy, 143 Tenn. 693, 228 S.W. 709, 1920 Tenn. LEXIS 53 (1921).

The rule that a devise or grant of the rents and profits of land is equivalent to a devise or grant of land itself only applies where no active trust is interposed, for, in such case, the devisee or grantee takes only the equitable estate which is not subject to levy and sale under execution at law. Henson v. Wright, 88 Tenn. 501, 12 S.W. 1035, 1889 Tenn. LEXIS 71 (1890); Porter v. Lee, 88 Tenn. 782, 14 S.W. 218, 1890 Tenn. LEXIS 21 (1890); Jobe v. Dillard, 104 Tenn. 658, 58 S.W. 324, 1900 Tenn. LEXIS 40 (1900).

21. Devise of Use and Occupation of Property.

The devise of use and occupation of property constitutes a freehold, and makes the devisee owner of a freehold estate unless a contrary intention appear from the will. Anderson v. Hensley, 55 Tenn. 834, 1875 Tenn. LEXIS 8 (1875).

22. Conveyances and Devises to Parent and Children.

Land devised or personalty bequeathed to a parent and his children, without more, where there are children in existence at the death of the testator, will go to the parent and children equally, unless there is an indication of intention, to be gathered from the whole will, that the parent is to take a life estate, and the children the remainder. A very slight indication of intention will give estate for life, and children the remainder estate. Belote v. White, 39 Tenn. 703, 1859 Tenn. LEXIS 305 (1859); Gannaway v. Tarpley, 41 Tenn. 384, 41 Tenn. 572, 1860 Tenn. LEXIS 110 (1860); Bowers v. Bowers, 51 Tenn. 293, 1871 Tenn. LEXIS 165 (1871); Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Cannon v. Apperson, 82 Tenn. 553, 1885 Tenn. LEXIS 1 (1885); Speight v. Askins, 118 Tenn. 749, 102 S.W. 74, 1907 Tenn. LEXIS 77 (Tenn. Apr. 1907).

A devise of land to testator's daughter, “to have and to hold the same to her and her children, to their special use and benefit forever,” vests in the daughter, for life, the legal title to the whole property, in trust as a separate estate for the joint use and benefit of herself and children, that is, vests in her for life an equal equitable interest in the land with each of her children, including her after born children as well as those in existence at the death of the testator and, after her death, vests in her children the legal and equitable title, or the whole estate. Bowers v. Bowers, 51 Tenn. 293, 1871 Tenn. LEXIS 165 (1871); Haywood v. Nash, 1 Cooper's Tenn. Ch. 157 (1873); Arrington v. Roper, 3 Cooper's Tenn. Ch. 572 (1877); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Smith v. Smith, 108 Tenn. 21, 64 S.W. 483, 1901 Tenn. LEXIS 4 (1901); Sanders v. Byrom, 112 Tenn. 472, 79 S.W. 1028, 1903 Tenn. LEXIS 116 (1903).

Where a husband procured a deed of conveyance of land to a trustee “for the benefit of Laura E. Mabry and her children,” as a settlement upon his wife and children, it was held that this constituted a continuing trust, under which after born children will take equally with the children living at the date of the conveyance. Ragsdale v. Mabry, 67 Tenn. 300, 1874 Tenn. LEXIS 377 (1874); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881).

A deed of gift of a husband and father conveying certain land to his wife and her “issues” by him then living, naming the wife and the then living children, with a provision letting in “any further issue or heirs” reserving the right to dispose of the property by the joint consent and signature of the wife, and, in case of her death, by himself “as the trustee” of his children, is, in legal effect a deed of gift to the wife and the children then living, subject to open and let in after born children, with a limited power of sale for the purposes of the trust, and is on its face valid. Hurd v. French, 2 Cooper's Tenn. Ch. 350 (1875).

A note signed by a husband and wife for the rent of land, with the words “I bind my separate estate” written below the wife's signature, will not bind the wife personally, and cannot be enforced against land conveyed by her father to her “and such children as she now has, or may hereafter have,” to their sole and separate use, with power of sale in her for the purpose of reinvestment in other property on the same uses and trusts, the land “in no event to pass out of the hands of her and her children” unless thus invested. Arrington v. Roper, 3 Cooper's Tenn. Ch. 572 (1877).

A deed by a husband to his wife and children, which conveys to his wife by name and his children, “their heirs and assigns forever” passes a present estate to the wife and the then living children as tenants in common. Livingston v. Livingston, 84 Tenn. 448, 1886 Tenn. LEXIS 122 (1886).

While a conveyance of land to a mother and her children, without qualifying words, will generally vest the title in the mother and her then living children as tenants in common, to the exclusion of after born children, a slight indication will induce the courts to adopt the other construction. To effectuate this purpose the mother will be converted into a tenant for life, and the children into remaindermen, the remainders vesting in the children living when the instrument became effective, and the estate opening upon the subsequent birth of children so as to embrace them; or else the mother will be held to be a trustee for herself and her then living children as well as her after born children. Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

23. —Conveyance or Devise to Parent for Life with Remainder to Children.

Under a deed by which the grantor “lends” to his daughter and her husband a slave during the lifetime of the daughter, and after her death, gives the slave to the child or children of the daughter, if any of them reach the age of 21 years, or leave heirs of their body, and, if none, to revert to the grant or, the daughter and mother takes a life estate, with remainder vested in the child or children living at her death, contingent, however, upon their reaching the age of 21 years, or, if dying before that time, upon their leaving children then surviving. Hughes v. Cannon, 21 Tenn. 589, 1841 Tenn. LEXIS 75 (1841).

Where property was devised to a trustee for the sole use and benefit of testator's daughter, who was only 11 years old at her father's death, and to her children, if she should have any; and, if she should die without any child or children, the property to return to testator's children, and be equally divided among them, the equitable title was vested in the daughter for life, and at her death the legal title vested in any child or children she might then have. Turner v. Ivie, 52 Tenn. 222, 1871 Tenn. LEXIS 254 (1871); Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Where the testator directed his property to be kept together by his executors during the life of his widow, and the proceeds and income therefrom to be used for the support and maintenance of the family, and for the education of the children, and, at her death, that the same be sold, and the proceeds be divided equally among his children, the widow was given only a life interest, although no disposition was made of any surplus of such proceeds and income. Andrews v. Andrews, 54 Tenn. 234, 1872 Tenn. LEXIS 42 (1872).

In a conveyance or devise of land to a mother and her children, a very slight indication of an intention that the children shall not take jointly with the mother will suffice to give the estate to the mother for life, with remainder to her children. Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Cannon v. Apperson, 82 Tenn. 553, 1885 Tenn. LEXIS 1 (1885); Williams v. Williams, 84 Tenn. 164, 1885 Tenn. LEXIS 133 (1885); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

The rule that very slight indication of intention will give mother estate for life with remainder to her children applies in case of deeds of conveyance of land as well as in devises by will. Bunch v. Hardy, 71 Tenn. 543, 1879 Tenn. LEXIS 114 (1879); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

Under a conveyance of land to a married woman to “her sole and separate use,” and to the “children upon her body begotten by her then husband,” the wife took only a separate life estate, and on her death the entire estate passed to her children, and the husband had no estate by the curtesy therein. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Stovall v. Austin, 84 Tenn. 700, 1886 Tenn. LEXIS 159 (1886); Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897); Waller v. Martin, 106 Tenn. 341, 61 S.W. 73, 1900 Tenn. LEXIS 165, 82 Am. St. Rep. 882 (Tenn. 1900).

The word children was not surplusage where deed transferred tract of land to daughter “to her use and benefit and her children and their benefit,” and a life estate was created in daughter and a remainder to the children of the daughter living at her death. Cutshaw v. Shelley, 13 Tenn. App. 580, 1931 Tenn. App. LEXIS 97 (1931).

Clause giving children only a lifetime use of property directed by earlier clause to be “equally divided” among the children or their representatives, so that the property might descend unimpaired to the testator's grandchildren, gave the children only a life estate in their several shares of the property. Parker v. Milam, 166 Tenn. 266, 61 S.W.2d 674, 1933 Tenn. LEXIS 90 (1933).

24. Conveyance to Children of Named Person.

A covenant to convey to the “heirs” of a living person is good as to the children of such person, because the word “heirs” is descriptive of the persons to take, and means the children of such living person. Hickman v. Quinn, 14 Tenn. 95, 14 Tenn. 96, 1834 Tenn. LEXIS 57 (Tenn. Mar. 1834).

A deed of gift to a certain person's living children by name, and to any other children that such person may afterwards have, conferred no title whatever upon an after born child. Lillard v. Ruckers, 17 Tenn. 64, 1836 Tenn. LEXIS 17 (1836); Arrington v. Roper, 3 Cooper's Tenn. Ch. 572 (1877). But see Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

Where a grandfather, by deed of gift, gives to his grandchildren by name, “heirs” of his son named, certain slaves, “to have and to hold the same unto the above named children forever; the same to remain in the possession of the son during his life, but not to be subject to his creditors, or liable for the payment of his debts in any way whatever,” and forbidding the son to dispose of the slaves “in any way or manner, either for his life or any number of years,” such deed vested the whole and exclusive legal title to the slaves in the grandchildren, and, if the father had any interest whatever under the deed, it was a mere equitable usufruct, subordinate to their legal title, not liable for his debts, and not available for any purpose in a court of law. Benton v. Pope, 24 Tenn. 392, 1844 Tenn. LEXIS 90 (1844); Bearden v. Taylor, 42 Tenn. 134, 1865 Tenn. LEXIS 30 (1865).

A deed of gift of slaves by a father to his daughter's children, heirs of her body, appointing her their guardian, to manage for them — hire out, if she pleases, or keep them until she pleases to deliver them to her children — vested in her children, then in being, the absolute title at that time, subject to her use and usufruct, with no estate in her. The words “heirs of her body” are descriptive of the persons who are to take, and meant her children then in being in this case. Bearden v. Taylor, 42 Tenn. 134, 1865 Tenn. LEXIS 30 (1865); Johnson v. Hurley, 3 Cooper's Tenn. Ch. 258 (1876).

A deed of conveyance of land, to take effect at once, to the heirs of a certain person then living, vests the title in that person's children then in being, and after born children take no interest in the land. Bearden v. Taylor, 42 Tenn. 134, 1865 Tenn. LEXIS 30 (1865); Grimes v. Orrand, 49 Tenn. 298, 1871 Tenn. LEXIS 9 (1871); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Livingston v. Livingston, 84 Tenn. 448, 1886 Tenn. LEXIS 122 (1886); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

If a deed, when taken altogether, discloses upon the grantor's part that all the children of the mother, without regard to the time of their birth, shall become beneficiaries of the property conveyed, then to effectuate such purpose the mother will be converted into a tenant for life and the children into remaindermen, the remainders vesting in the children living at the time of the instrument and the estate opening to embrace other children subsequently born, at their birth; or else the mother will be held to be a trustee for herself and her then living as well as after born children. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

Where the conveyance of land is to the present and future children of a certain person, to take immediate effect, the title vests at law in the present children to the exclusion of after born children; but it is suggested that perhaps the living children as such grantees would hold the legal title in trust for themselves and the after born children. However, where there is a trust by deed or will, or a remainder is conveyed to present and future children of a certain person, or there is a postponement of the division or enjoyment of the property until they all come into being, the after born children will take with the children in being when the deed or will creating such estate shall become effective. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

25. Remaindermen — Persons Included.

Under a father's deed conveying land to his daughter “for and during the term of her natural life, and after her death to such of her children, their heirs and assigns forever, as she and her first husband shall limit, direct, and appoint, and, for want of such appointment, to all her children equally, their heirs and assigns forever,” the mother took a life estate, with a contingent remainder over to her children, and, upon the birth of a child, the remainder vested in that child, subject to be divested by the birth of other children, or by the exercise, by the mother and her first husband, of their power of appointment. Haywood's Heirs v. Moore, 21 Tenn. 584, 1841 Tenn. LEXIS 74 (1841); Bostick v. Winton, 33 Tenn. 524, 1853 Tenn. LEXIS 82 (1853); Belote v. White, 39 Tenn. 703, 1859 Tenn. LEXIS 305 (1859); Bowers v. Bowers, 51 Tenn. 293, 1871 Tenn. LEXIS 165 (1871); Hurd v. French, 2 Cooper's Tenn. Ch. 350 (1875); Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881).

A conveyance of land to a married woman, to have and to hold the same unto her as a separate estate, and to her children by her then husband, with a warranty of title to her, her heirs and assigns, operates to vest in her a life estate, and a remainder estate in her children by her husband, then living or thereafter born, and that may be living at her death. Beecher v. Hicks, 75 Tenn. 207, 1881 Tenn. LEXIS 97 (1881); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Statute making it unnecessary to use the word “heir” in conveying a fee did not change the rule that a devise of a remainder to the children of a life tenant inures to the benefit of the survivors of the life tenant, and excludes children of life tenant's deceased children. Neal v. Hodges, 48 S.W. 263, 1898 Tenn. Ch. App. LEXIS 59 (1898).

Devise to named persons “during their natural lives and to descend to their bodily heirs,” created life estate with remainder to such persons as should be bodily heirs at the expiration of the life estate. Stratton v. McKinnie, 62 S.W. 636, 1900 Tenn. Ch. App. LEXIS 166 (Tenn. App. 1900).

Where a father conveyed lands to his certain daughter “and her children, forever” and in a subsequent clause provided that, in case the daughter died before her husband, he should have 400 acres of the lands for use and occupancy during his lifetime, which, at his death should go to “said children, bodily heirs” of the daughter, and that the daughter and husband be put in possession of all the lands and improvements to their own use, and that the husband should have control of the whole during her lifetime, and afterwards of the 400 acres during his lifetime; it was held that the deed created a life estate in the daughter in the whole tract and in her husband to the 400 acres, with vested remainders in her children living when the deed became effective, which opened and admitted the after born children, and that upon the falling in of the life estates, her children then living and a son of a deceased child took the absolute estate in the lands. Blackburn v. Blackburn, 109 Tenn. 674, 73 S.W. 109, 1902 Tenn. LEXIS 98 (1902).

A devise to a son and to his children, and if he should die during the life of the testator without children, then to his named sister and her children, creates a life estate in the son if he survived the testator with remainder to his children, and at the birth of a child of the son, the remainder would vest, subject to open and let in after born children. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Under a deed giving land to grantor's son for life and providing that on his death it shall “pass to and vest in his issue,” the term “issue” includes grandchildren as well as children, and the children and grandchildren take per capita, unless a contrary intention can be found in the instrument itself; however, as a contrary intention was found, the children and grandchildren took per stirpes. Lea v. Lea, 145 Tenn. 693, 237 S.W. 59, 1921 Tenn. LEXIS 107 (1921).

Where deed provided that the son was to hold the land for his use and benefit for his life, that on his death, it was to vest in his issue, and that, if he died without issue or issue should become extinct within 21 years after his death, the land should revert, it was held that, the conveyance was to the son as trustee and his heirs in fee simple, or fee determinable, and, a subsequent provision limiting the son's estate to life estate, the word “issue” merely limited the heirs to descending heirs and did not give the property to the son's children and grandchildren per capita. Lea v. Lea, 145 Tenn. 693, 237 S.W. 59, 1921 Tenn. LEXIS 107 (1921).

26. Power of Disposition in First Taker.

Where a life estate or other particular estate is conveyed or devised to one, with an executory limitation or remainder over to another, and an absolute, unlimited, or unqualified power of disposition of the whole property or estate is given the first taker, it is a rule of property, regardless of the evident intention, that an executory limitation or remainder over, dependent upon the nondisposition of the first taker, is void, and an absolute estate is vested in the first taker; but, where the power of disposition given the first taker is contingent, limited, or qualified, the executory limitation or remainder over becomes effective when the property has not been disposed of within or according to the power; or where the power of disposition arises, by operation of law, as the mere incident to or consequence of the fee simple estate devised, the subsequent limitation over by way of executory devise is valid. Smith v. Bell, 8 Tenn. 301, 8 Tenn. 302, 1827 Tenn. LEXIS 57, 17 Am. Dec. 798 (1827); David v. Bridgman, 10 Tenn. 558, 1831 Tenn. LEXIS 16 (1831); Campbell v. Taul, 11 Tenn. 548, 1832 Tenn. LEXIS 113 (1832); Sommerville v. Horton, 12 Tenn. 540, 12 Tenn. 541, 1833 Tenn. LEXIS 91 (1833); Henderson v. Vaulx, 18 Tenn. 30, 1836 Tenn. LEXIS 98 (1836); Davis v. Richardson, 18 Tenn. 290, 1837 Tenn. LEXIS 23, 31 Am. Dec. 581 (1837); Thompson v. McKisick, 22 Tenn. 631, 1842 Tenn. LEXIS 167 (1842); Booker v. Booker, 24 Tenn. 505, 1844 Tenn. LEXIS 121 (1844); Deadrick v. Armour, 29 Tenn. 588, 1850 Tenn. LEXIS 39 (1850); Pillow v. Rye, 31 Tenn. 185, 1851 Tenn. LEXIS 44 (1851); Sevier v. Brown, 32 Tenn. 112, 1852 Tenn. LEXIS 30 (1852); Williams v. Jones, 32 Tenn. 620, 1853 Tenn. LEXIS 93 (1853); Ballentine & Spear, 61 Tenn. 269, 1872 Tenn. LEXIS 369 (1872); Fraker v. Fraker, 65 Tenn. 350, 1873 Tenn. LEXIS 363 (1873); McGavock v. Pugsley, 1 Cooper's Tenn. Ch. 410 (1873); Troup v. Hart, 66 Tenn. 188, 1874 Tenn. LEXIS 103 (1874); Pool v. Pool, 78 Tenn. 486, 1882 Tenn. LEXIS 211 (1882); Read v. Watkins, 79 Tenn. 158, 1883 Tenn. LEXIS 32 (1883); Turner v. Durham, 80 Tenn. 316, 1883 Tenn. LEXIS 174 (1883); Lancaster v. Lancaster, 81 Tenn. 126, 1884 Tenn. LEXIS 12 (1884); Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Bradley v. Carnes, 94 Tenn. 27, 27 S.W. 1007, 1894 Tenn. LEXIS 22, 45 Am. St. R. 696 (1894); Meacham v. Graham, 98 Tenn. 190, 39 S.W. 12, 1896 Tenn. LEXIS 217 (Tenn. Dec. 1896); Clark v. Hill, 98 Tenn. 300, 39 S.W. 339, 1896 Tenn. LEXIS 224 (Tenn. Dec. 1896); Young v. Mutual Life Ins. Co., 101 Tenn. 311, 47 S.W. 428, 1898 Tenn. LEXIS 66 (1898); Brien v. Robinson, 102 Tenn. 157, 52 S.W. 802, 1898 Tenn. LEXIS 16 (1899); Waller v. Martin, 106 Tenn. 341, 61 S.W. 73, 1900 Tenn. LEXIS 165, 82 Am. St. Rep. 882 (Tenn. 1900); Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901); Hair v. Caldwell, 109 Tenn. 148, 70 S.W. 610, 1902 Tenn. LEXIS 65 (1902); Carson v. Carson, 115 Tenn. 37, 88 S.W. 175, 1905 Tenn. LEXIS 43 (1905); McKnight v. McKnight, 120 Tenn. 431, 115 S.W. 134, 1907 Tenn. LEXIS 56 (1908); Emert v. Blair, 121 Tenn. 240, 118 S.W. 685, 1908 Tenn. LEXIS 18 (1908); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

It is a rule of property that an unlimited power of disposition gives the first taker an absolute estate, though in contravention of the actual or evident intention it is otherwise if the power of disposition is limited or contingent. McGavock v. Pugsley, 59 Tenn. 689, 1874 Tenn. LEXIS 34 (1874); Pool v. Pool, 78 Tenn. 486, 1882 Tenn. LEXIS 211 (1882); McKnight v. McKnight, 120 Tenn. 431, 115 S.W. 134, 1907 Tenn. LEXIS 56 (1908).

Though the owner of a life estate, empowered to sell the property, thought that she owned the fee and conveyed in fee simple under that impression, without specifically intending to exercise the power to sell and convey, her deed was a sufficient execution of the power, since a grantor parts with all title she may or can convey, unless a contrary intention appears. Young v. Mutual Life Ins. Co., 101 Tenn. 311, 47 S.W. 428, 1898 Tenn. LEXIS 66 (1898); Matthews v. Capshaw, 109 Tenn. 480, 72 S.W. 964, 1902 Tenn. LEXIS 88, 97 Am. St. Rep. 854 (1902).

Where testatrix, having a husband and three children, devised her property to her husband for life with “power by will and testament to dispose of the property hereby willed to him between my children as he may deem proper,” and the husband by will gave the entire property to the surviving child, but charged it with one hundred dollars ($100) in favor of the children of another deceased child, the husband's will was a proper and effective execution of the power conferred upon him by his wife's deed, except for the one hundred dollars ($100) in favor of the grandchildren, as his power of appointment was limited to the wife's children that survived him, and did not extend to her grandchildren. Herrick v. Fowler, 108 Tenn. 410, 67 S.W. 861, 1901 Tenn. LEXIS 42 (1901).

The power of disposition to be implied from the mere ownership has no application to the rule that unlimited power of disposition vests absolute estate in first taker. Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Where the testator bequeathed all his estate to his wife and adding “and it is my wish that she do with said property as she may think best, and it is further my wish and desire that at the death of my wife that all our estate … shall go to our adopted daughter Jessie,” he gave the wife unlimited power of absolute disposition, and thereby gave her the absolute estate. Ogilvie v. Wright, 140 Tenn. 114, 203 S.W. 753, 1918 Tenn. LEXIS 26 (1918).

A bequest of $7,000 in trust for testator's son until he reached the age of 50 years, to prevent his squandering it, and providing that “at his death the remaining money to be equally divided between” a brother and sister, impliedly gave full power of disposition to the donee after he reached the age of 50 years; and, since the limitation overtook effect, if at all, not merely at his death before 50, but at his death before or after that period, the limitation over was ineffective, because inconsistent with the previous absolute estate, and, on the donee's death before 50, leaving a wife and minor child, the trust fund passed to them as his distributees. Eaton v. Nashville Trust Co., 145 Tenn. 575, 238 S.W. 865, 1921 Tenn. LEXIS 95 (1921).

A will giving the residue of realty and personalty to testator's daughter for life, with power of disposition by her at death, vests in her but an estate for life, and remainder passes as intestate property where a subsequent provision authorized specific use of testator's stock. Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562, 1933 Tenn. LEXIS 4, 92 A.L.R. 343 (1933).

27. Conditional or Contingent Limitations Over.

A devise or bequest of property to one, with a provision that upon his death it shall go to and descend to his children, vests an absolute estate in the first taker, with a conditional limitation over, in the nature of an executory devise to his children upon his death, and if he dies leaving any children, they will take the property under the will. Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884).

A son's devise of land to his widowed mother “to and for her own use and benefit absolutely, provided that she does not marry again,” with limitation over to another in the event of her remarriage, does not invest her with an absolute estate in fee, but with a contingent estate in fee, determinable upon her remarriage. The estate did not become absolute in the mother, because the power of disposition was not given to her, either expressly or by necessary implication, by superadded words, as required by the rule. The limitation over is valid, and takes effect upon the mother's remarriage. Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901).

A condition that not any of the property devised by a son to his mother shall go, by inheritance, devise, gift, or otherwise, from the mother to a named sister of the testator, or her husband, or their descendants, or any one of their name, and a limitation over that, in the event of any such disposition, the property shall go to another named person, is a valid conditional limitation upon such devise. Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901); Bradford v. Leake, 124 Tenn. 312, 137 S.W. 96, 1912D Am. Ann. Cas. 1140, 1910 Tenn. LEXIS 57 (1910).

Where the testator devised a life estate to his daughters, with remainder in fee to their children, and in default of children by them, then to the testator's children who should then be living, the remainder was vested in such of the testator's grandchildren, children of the daughters, as were in existence when the will became effective and contingent in the case of any daughter who at that time was without children. Frank v. Frank, 120 Tenn. 569, 111 S.W. 1119, 1908 Tenn. LEXIS 44 (1908); Scruggs v. Mayberry, 135 Tenn. 586, 188 S.W. 207, 1915 Tenn. LEXIS 197 (1915).

Under a will devising land to testator's mother, coupled with a provision that no part of his estate should come into the possession of his sister or her descendants, and providing that, upon the death of his mother intestate, the property should go to a third person, the condition in the will that none of the property should pass to testator's sister or her descendants did not follow the property into the hands of any one, upon whom the same might be devolved through the operation of the limitation attached to the condition. Bradford v. Leake, 124 Tenn. 312, 137 S.W. 96, 1912D Am. Ann. Cas. 1140, 1910 Tenn. LEXIS 57 (1910).

A conveyance to husband and wife reciting that, if the husband died without bodily heirs, the wife should take by survivorship, and if she died without issue, he should take an undivided moiety, operated to convey to her an undivided half in fee absolutely and to the husband in fee subject to a condition in her favor in case he should die without children, for the term “bodily heirs” means children as used in such deed. Young v. Brown, 136 Tenn. 184, 188 S.W. 1149, 1916 Tenn. LEXIS 115 (1916).

28. —Matters Defeating Limitations Over.

Under a will giving a present vested interest in property, real or personal, whether the estate given be general, equitable, absolute, or for life, with a limitation or executory devise over upon the happening of the contingency of the devisee or legatee dying without children, upon his death with children, his estate in the property becomes absolute. Petty v. Moore, 37 Tenn. 126, 1857 Tenn. LEXIS 91 (1857); Owen v. Hancock, 38 Tenn. 563, 1858 Tenn. LEXIS 228 (Tenn. Dec. 1858); Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (Tenn. Dec. 1858); Puryear v. Edmondson, 51 Tenn. 43, 1871 Tenn. LEXIS 133 (1871); Turner v. Ivie, 52 Tenn. 222, 1871 Tenn. LEXIS 254 (1871); Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888); Nott v. Fitzgibbon, 107 Tenn. 54, 64 S.W. 26, 1901 Tenn. LEXIS 58 (1901); Overton v. Lea, 108 Tenn. 505, 68 S.W. 250, 1901 Tenn. LEXIS 51 (1901); Katzenberger v. Weaver, 110 Tenn. 620, 75 S.W. 937, 1903 Tenn. LEXIS 80 (1903). See also Williamson v. Tunis, 107 Tenn. 83, 64 S.W. 10, 1901 Tenn. LEXIS 61 (1901), holding that, under such limitations and terms, the birth and survival of a child determines the contingency upon which the estate becomes vested and absolute in the first taker; and there being no express limitation to the children, none will be implied, and they will take nothing as devisees Williamson v. Tunis, 107 Tenn. 83, 64 S.W. 10, 1901 Tenn. LEXIS 61 (1901).

Where an absolute estate is given by will, with a provision for a limitation over upon the death of the devisee or legatee, upon a certain contingency, the absolute estate is not defeated where the contingency never happens, and it becomes impossible for the limitation over to take effect. Petty v. Moore, 37 Tenn. 126, 1857 Tenn. LEXIS 91 (1857); Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (Tenn. Dec. 1858); Cowan, McClung & Co. v. Wells, 73 Tenn. 682, 1880 Tenn. LEXIS 198 (1880); Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884); Brown v. Brown, 86 Tenn. 277, 6 S.W. 869, 1887 Tenn. LEXIS 48 (1888).

Under a devise or bequest of property to one, to be held by trustees for his use and benefit during his natural life, and at his death to be equally divided among his children, the gift becomes absolute upon his death with no children, for the testator did not, in that event, die intestate as to the remainder, so that the same would go to his heirs and distributees under the statutes of descent and distribution. Alston v. Davis, 39 Tenn. 266, 1858 Tenn. LEXIS 291 (Tenn. Dec. 1858); Stretch v. Gowdey, 1 Cooper's Tenn. Ch. 37 (1872); Hottell v. Browder, 81 Tenn. 676, 1884 Tenn. LEXIS 86 (1884).

Ordinary words devising an absolute title will not, without superadded words giving unlimited power of disposition, defeat an executory devise. Read v. Watkins, 79 Tenn. 158, 1883 Tenn. LEXIS 32 (1883); Carson v. Carson, 115 Tenn. 37, 88 S.W. 175, 1905 Tenn. LEXIS 43 (1905); McKnight v. McKnight, 120 Tenn. 431, 115 S.W. 134, 1907 Tenn. LEXIS 56 (1908).

In a partition of land among the absolute owners, the fee is not in abeyance while a remainder is contingent under a consent decree vesting in one of the parties a life estate in the part allotted to her, with remainder at her death to her children then living and the issue of such as may be dead, but the fee abides with her during such contingency, and, if the line of remaindermen is extinct so that there is no remainderman to take at her death, the remainder then ceases forever, and her title is freed from the remainder and subject to her disposal, by will, and her will devising the land to her husband becomes operative and passes to him the whole estate. Bigley v. Watson, 98 Tenn. 353, 39 S.W. 525, 1896 Tenn. LEXIS 230, 38 L.R.A. 679 (1897).

29. —Devisee with Limitation Over Making Conveyance.

Under a conveyance by the first taker of an estate for life with an executory devise over, the right of inheritance of her children would be defeated, they being estopped by the deed. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

30. Precatory Trusts.

Where a testator, after giving his wife all his real and personal property, declared that he had sold one relative land accepting notes in payment and requested that when the relative had paid all but the last $1,500 that amount be given him, and stated that he valued land occupied by another relative at $5,000, and requested that such relative be permitted to purchase it on instalments, such two requests must be treated as precatory trusts in favor of the two relatives, as they were definite and certain and left the wife no discretion. Daly v. Daly, 142 Tenn. 242, 218 S.W. 213, 1919 Tenn. LEXIS 53 (1919).

31. Determinable Fees.

Where will bequeathing life estate to son further stated “but should my son…die childless, then and in that event, the land above described shall revert to and become the property of my legal heirs then living” the son became vested with a determinable fee, and if he died with children they would not take under the will but as his heirs, but if he died without children the fee terminated and became vested in heirs at law of his father. Johnson v. Johnson, 4 Tenn. Civ. App. (4 Higgins) 118 (1914).

32. Estate Conditioned to Arise by Way of Executory Devise — Effect of Failure on First Estate.

Where an estate is created in fee or for life, and on this estate another is conditioned to arise, by way of executory devise, on the occurrence of a given event, and that event does not occur, so that the estate cannot vest, then the first estate continues, and if a life estate, it is enlarged into a fee. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976), overruled on other grounds, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

Under a devise to A and after her death to her children, if any, with provision that if she should die without lawful issue, then over to other; and it appeared that A died leaving children, it was impossible for the estate over to vest and fee vested in her, and her children could take no estate under the devise, but only by inheritance from her. Anderson v. Lucas, 140 Tenn. 336, 204 S.W. 989, 1918 Tenn. LEXIS 47 (1918), overruled in part, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976), overruled on other grounds, Harris v. Bittikofer, 541 S.W.2d 372, 1976 Tenn. LEXIS 543 (Tenn. 1976).

33. Life Estate With Contingent Remainder — Effect on Fee.

Where land was devised to named devisee for life and provided that “at his death the remainder shall go to the heirs of his body,” the fee or inheritance devised to the bodily heirs of the named devisee passed to the heirs at law of the testatrix immediately upon her death subject to the contingent remainder created by the will. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

34. No Reversion Stipulated — Effect.

Where all title, claim and interest is conveyed by the owner of the fee simple title, without providing for any reversion, the grantee takes full title even though there is a repugnant provision in the habendum clause purporting to limit the estate thus granted to life of grantee, followed by a gift over only in event the grantee dies with issue surviving. The absolute estate first granted was to be limited only in the event there should be surviving issue. Pryor v. Richardson, 162 Tenn. 346, 37 S.W.2d 114, 1930 Tenn. LEXIS 96 (1930).

35. Deed Conditioned for Grantor's Support.

A deed conditioned that the grantee shall support the grantor passes title immediately, provision for a reversion to grantor, and breach, notwithstanding. The remedy of the grantor is in equity for enforcement of a lien on the realty and not for a rescission, even where there is a total breach. Goodman v. Skeleton, 2 Tenn. Ch. App. 283 (1901); Carney v. Carney, 138 Tenn. 647, 200 S.W. 517, 1917 Tenn. LEXIS 71 (1917); Trice v. McGill, 158 Tenn. 394, 13 S.W.2d 49, 1928 Tenn. LEXIS 167 (1928), questioned, Patterson v. Anderson Motor Co., 45 Tenn. App. 35, 319 S.W.2d 492, 1958 Tenn. App. LEXIS 111 (Tenn. Ct. App. 1958).

Death of grantee before that of the grantor, and the fact that he can no longer, or fully, perform will not defeat the estate conditioned on grantor's support as equity will protect the interests of both parties. Carney v. Carney, 138 Tenn. 647, 200 S.W. 517, 1917 Tenn. LEXIS 71 (1917).

36. Right of Way Deed.

Conveyance to a railway company of land “for railroad purposes only,” creates a personal covenant which is fulfilled by the location, of a railroad through grantor's tract of land, and is not to be construed as a limitation on the fee conveyed. Nashville, C. & S. L. R. Co. v. Bell, 162 Tenn. 661, 39 S.W.2d 1026, 1931 Tenn. LEXIS 84 (1931).

Deed which conveyed to railroad company “the right of way and roadbed and 150 feet on east and 50 feet on west of said roadbed” did not purport to convey a right of way only, and under this section title to such land passed to the railroad in fee. Baird v. Southern Ry., 179 Tenn. 366, 166 S.W.2d 617, 1942 Tenn. LEXIS 32 (1942).

Although habendum clause contained language indicative of a fee simple, where granting clause in deed of conveyance to railroad stated that interest involved was a right of way the instrument clearly expressed an intent to pass an estate or interest less than a fee and section did not apply. Smoky Mt. R.R. v. Paine Oil Co., 496 S.W.2d 904, 1972 Tenn. App. LEXIS 300 (Tenn. Ct. App. 1972).

37. Exception of “Lands Adversely Held.”

An exception in a deed of “such parts of said lands as may be adversely held” is an exception of land held adversely to the warranting grantor, and not of land acquired by adverse possession of grantor's predecessor in title and conveyed to the immediate grantor before his own conveyance. Sequatchie Land Co. v. Sewanee Coal, Coke & Land Co., 137 Tenn. 313, 193 S.W. 106, 1916 Tenn. LEXIS 78 (1916).

38. Conveyance of Story of Building.

A building may be divided horizontally and the different floors or the different rooms be separately conveyed and owned and deed was held to convey one story of a building to one person and the other story to another. Townes v. Cox, 162 Tenn. 624, 39 S.W.2d 749, 1931 Tenn. LEXIS 77 (1931).

39. Partition Deed.

The general rule is that a voluntary partition of realty does not confer on the parties any additional title, and a partition instrument executed by devisees and intended only to sever the interest and estate granted to each by the will does not pass the reversion, which was not devised by the will and which the grantors received as heirs by descent, notwithstanding such instrument contained language which, in the absence of anything else, would have passed title. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930). See Frank v. Frank, 153 Tenn. 215, 280 S.W. 1012, 1925 Tenn. LEXIS 21 (1926).

40. Possibility of Interest in Land.

It was not the intention of the legislature that a bare possibility of an interest in land should pass as an “interest therein” under § 66-1-101 and this section. Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

41. Right of Reentry Upon Condition Broken.

This section did not abrogate common law rule that right of reentry upon condition broken is inalienable, however attempted alienation will not operate to extinguish such right but instead such right will pass eo instante to heirs of grantor. Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

Some act of reentry on the part of the heirs is necessary to revest title upon breach of a condition subsequent. Pickens v. Daugherty, 217 Tenn. 349, 397 S.W.2d 815, 1965 Tenn. LEXIS 547 (1965).

42. Reservation of Life Estate.

When a grantor reserves a life estate with unlimited power to sell, he retains the fee — no interest in praesenti passes to the grantee — the instrument is not a deed. Wright v. Huskey, 592 S.W.2d 899, 1979 Tenn. App. LEXIS 368 (Tenn. Ct. App. 1979).

43. Conveyance Conditional upon Spouse Not Remarrying.

Where deed from husband to wife granted wife the property with a condition that if the husband should die before the wife the wife should have full control and power to handle the property “so long as she lives my widow” but if she should remarry the property would go to his children, and she conveyed the property after her husband's death, the grantee acquired the property subject to forfeiture upon the remarriage of the widow. Hall v. Hall, 604 S.W.2d 851, 1980 Tenn. LEXIS 495 (Tenn. 1980).

44. Fee Simple.

There was a statutory presumption that the 1921 deed conveyed to the grantee the entirety of the grantors'  interest, and while defendants attempted to rebut that presumption by claiming the deed showed an intention to grant a mere easement for railroad purposes, the use of the phrase right of way in the descriptive clause was merely intended to describe rather than to limit the use of the railroad corridor conveyed in the granting clause. The trial court did not err in finding that plaintiff owned the land in fee simple. KT Grp., LLC v. Lowe, — S.W.3d —, 2018 Tenn. App. LEXIS 611 (Tenn. Ct. App. Oct. 19, 2018).

Collateral References.

Affirmative covenants as running with the land. 68 A.L.R.2d 1022.

Breach of warranty in sale, installation, repair, design, or inspection of septic or sewage disposal systems. 50 A.L.R.5th 417.

Conflict between granting and habendum clauses as to estate conveyed. 58 A.L.R.2d 1374.

Conveyance of “right of way,” in connection with conveyance of another tract, as passing fee or easement. 89 A.L.R.3d 767.

Covenant as aid in interpretation of deed as to quantum of estate granted. 47 A.L.R. 872.

Deed as conveying fee or easement. 136 A.L.R. 379.

Fee simple conditional, effect of conveyance of by grantee. 114 A.L.R. 612.

Grant of gift or income of land as carrying absolute interest in property. 174 A.L.R. 323.

“Land” or “loan” use of, as affecting estate or interest created. 34 A.L.R. 956.

Liability of purchaser of real estate for interference with contract between vendor and real estate broker. 29 A.L.R.3d 1229.

Marriage, effect of condition in restraint of, on nature of estate taken. 122 A.L.R. 75.

Real-estate broker's liability to purchaser for misrepresentation or nondisclosure of physical defects in property sold. 46 A.L.R.4th 546.

Real estate broker's right to compensation as affected by failure or refusal of principal's spouse to join in contract of sale. 10 A.L.R.3d 665.

Recorded real property instrument as charging third party with constructive notice of provisions of extrinsic instrument referred to therein. 89 A.L.R.3d 901.

Reverter, release of possibility of, as vesting fee in grantee. 38 A.L.R. 1111.

Severance or termination of joint tenancy by conveyance of divided interest directly to self. 7 A.L.R.4th 1268.

Sufficiency of delivery of deed where grantor retains, or recovers, physical possession. 87 A.L.R.2d 787.

Validity and effect of provision in deed attempting to make reservation or exception in favor of grantor's spouse. 52 A.L.R.3d 753.

Will devising property, effect of doubtful construction on marketability of title. 65 A.L.R.3d 450.

66-5-102. Mineral estates in coal.

  1. In any instrument heretofore or hereafter executed purporting to sever the surface and mineral estates which does not describe the manner or method of mineral extraction in express and specific terms, it shall be presumed that the intention of the parties to the instrument was that the minerals be extracted only in the principal manner and method of mineral extraction prevailing in this state at the time the instrument was executed.
  2. This section is not intended to exclude evidence that would otherwise be admissible to show the intentions of the parties.
  3. This section shall only apply to mineral estates in coal.

Acts 1977, ch. 164, §§ 3, 4; T.C.A. (orig. ed.), § 64-511.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mines and Minerals, § 14.

Law Reviews.

Essay: Lawyering, Power, and Reform: The Legal Campaign to Abolish the Broad Form Mineral Deed (Dean Hill Rivkin), 66 Tenn. L. Rev. 467 (1999).

Legislative Clarification of the Correlative Rights of Surface and Mineral Owners (J. Stephen Dycus), 33 Vand. L. Rev. 871 (1980).

NOTES TO DECISIONS

1. Constitutionality.

Strip mining regulation contained in former § 59-8-205(1)(F)(ii) and in T.C.A. § 66-5-102 does not deny equal protection, as the legislative classification is reasonably related to legitimate public interests. Doochin v. Rackley, 610 S.W.2d 715, 1981 Tenn. LEXIS 397 (Tenn. 1981).

Since neither the plaintiff miners nor their predecessor in title was ever conveyed the legal right to strip mine, T.C.A. § 66-5-102 and former § 59-8-205(1)(F)(ii) concerning surface mining of coal did not unconstitutionally affect plaintiffs' contract rights or deprive them of property without due process, for the statutes merely codified the common law governing the construction of deeds and other such contracts. Doochin v. Rackley, 610 S.W.2d 715, 1981 Tenn. LEXIS 397 (Tenn. 1981).

T.C.A. § 66-5-102 and former § 59-8-205(1)(F)(ii) concerning surface mining of coal do not encroach upon the domain of the judiciary but rather codify the age-old, common-law rule that the intent of the parties governs in the construction of contracts, deeds, wills and the like; the statutes create no irrebuttable presumptions and exclude no evidence from consideration and thus do not affect the courts' customary function of ascertaining the parties' intent based upon all the evidence. Doochin v. Rackley, 610 S.W.2d 715, 1981 Tenn. LEXIS 397 (Tenn. 1981).

2. Presumed Intention.

Since strip mining was unknown in county when the mineral and surface estates at issue were severed, the contracting parties could not be presumed to have intended for one party to own the right to use and enjoy the surface of the land and for another party to own the right to completely disrupt that surface, and consequently no right to strip mine accompanied ownership of the mineral rights where there was no evidence that the parties had intended a contrary result. Doochin v. Rackley, 610 S.W.2d 715, 1981 Tenn. LEXIS 397 (Tenn. 1981).

Collateral References.

Production on one tract as extending term on other tract, where one mineral deed conveys oil or gas in separate tracts for as long as oil or gas is produced. 9 A.L.R.4th 1121.

66-5-103. Forms of conveyances.

The following or other equivalent forms, varied to suit the precise state of facts, are sufficient for the purposes contemplated, without further circumlocution:

    1. For a deed in fee with general warranty: “I hereby convey to A. B. the following tract of land (describing it), and I warrant the title against all persons whomsoever;”
    2. Covenants of seisin, possession, and special warranty: “I covenant that I am seized and possessed of this land, and have a right to convey it, and I warrant the title against all persons claiming under me;”
  1. For a quitclaim deed: “I hereby quitclaim to A. B. all my interest in the following land” (describing it);
  2. For a mortgage: “I hereby convey to A. B. the following land (describing it), to be void upon condition that I pay,” etc; and
  3. For a deed of trust: “For the purpose of securing to A. B. a note of this date, due at twelve (12) months, with interest from date (or as the case may be), I hereby convey to C. D., in trust, the following property (describing it). And if the note is not paid at maturity, I hereby authorize C. D. to sell the property herein conveyed (stating the manner, place of sale, notice, etc.), to execute a deed to the purchaser, to pay off the amount herein secured, with interest and costs, and to hold the remainder subject to my order.”

Code 1858, § 2013; Shan., § 3680; Code 1932, § 7607; T.C.A. (orig. ed.), § 64-502.

Cross-References. Conveyance by partner or partnership, § 61-1-109.

Conveyances of property to state, §§ 12-2-10412-2-109.

Deed on execution sale, §§ 26-5-11126-5-113.

Judicial conveyances, §§ 16-1-10716-1-110.

Partnership property, §§ 61-1-203, 61-1-204.

Privilege tax on conveyances, § 67-4-409.

Use of Tennessee coordinate system in conveyances, § 66-6-106.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 76.

Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-201, 8-204.

Law Reviews.

Power of Sale Foreclosure in Tennessee, 8 Mem. St. U.L. Rev. 871 (1978).

Tennessee Homeowners' Post Foreclosure Auction Right to Cure Under 11 U.S.C. §§ 1322(b) and (c), 27 U. Mem. L. Rev. 453 (1997).

NOTES TO DECISIONS

1. Purpose.

The statutory provisions disclose a clear legislative intent to reduce the forms of conveyance to their simplest elements, and to give the largest meaning to granting words, unless limited by the instrument itself. Daly v. Willis, 73 Tenn. 100, 1880 Tenn. LEXIS 90 (1880); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883). See Fogarty v. Stack, 86 Tenn. 610, 8 S.W. 846, 1888 Tenn. LEXIS 14 (1888); Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484, 1908 Tenn. LEXIS 11 (1908); Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911).

Successor developer validly succeeded to the rights of a prior developer because the deed between the developers identified the real property at issue and conveyed that property with the appurtenances, estate, title and interest thereto, as the deed stated the successor took title to the real property subject to a declaration, which, in turn, clearly (1) spoke to the development of the real property owned at the time by the prior developer, (2) referred to the impending creation of a charter, bylaws, a homeowners'  association, and a board, and (3) identified the “developer” as the prior developer “and its successors and assigns.” Hughes v. New Life Dev. Corp., 387 S.W.3d 453, 2012 Tenn. LEXIS 819 (Tenn. Nov. 19, 2012).

2. Form of Conveyance.

A deed written by the grantor himself, and containing his signature in the usual granting clause, namely, “I, A B, have sold, and do hereby sell and convey,” would be good, if actually delivered to the grantee as the deed of the grantor. Saunders v. Hackney, 78 Tenn. 194, 1882 Tenn. LEXIS 163 (1882).

A quitclaim deed is a form of conveyance; and like other deeds, it conveys whatever interest the grantor has in the land, unless otherwise specially limited by its terms. Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912); Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

Where an instrument contained a recital of the consideration, the retention of a lien to secure deferred payments, the conveying clause, the covenants of seizin, possession, against incumbrances and general warranty, and it was executed, acknowledged for registration and registered in the form and manner prescribed for deeds of conveyance, it had all the essentials for the conveyance of a present interest and estate against the contention that the instrument was a will. Smith v. Prichard, 22 Tenn. App. 321, 122 S.W.2d 829, 1938 Tenn. App. LEXIS 34 (1938).

3. —Agreement to Execute Deed.

Agreement to execute and deliver a deed at some time in the future that would convey an interest in the property in question was not an expression of the debtor's present and actual intent to convey an interest in the property. Limor v. Daniel (In re Gee), 166 B.R. 314, 1993 Bankr. LEXIS 2142 (Bankr. M.D. Tenn. 1993).

4. —Description of Property.

Because the description contained in the deed failed to identify a particular tract of land, extrinsic evidence was not admissible to supply the location of the land in question, and thus the description was insufficient under Tennessee law. CC Holdings (Tenn.), Inc. v. Tennessee Gas Transp., Inc., 169 B.R. 643, 1994 Bankr. LEXIS 1177 (Bankr. M.D. Tenn. 1994).

Deed of trust referred necessarily to some existing tract of land, and its terms could be applied to that one tract only. The outcome therefore, had to be the same as in ABN AMRO Mortgage Group, Inc. v. Southern Security Federal Credit Union, 372 S.W.3d 121 (Tenn. Ct. App. 2011): the deed of trust sufficiently designated the land intended to be mortgaged with reasonable certainty as required under Tennessee law. Jahn v. FirstBank (in re Jones), — B.R. —, 2013 Bankr. LEXIS 3972 (Bankr. E.D. Tenn. Sept. 23, 2013).

Because an appellate court was unable to determine whether a deed conveyed a tract of land to the grantees, the court remanded the case to the trial court for a determination of whether the tract was included in a referenced estate. If the trial court determined that tract was, in fact, included in the estate, then the property description was adequate to convey the tract to the grantees. Valentine v. Holt, — S.W.3d —, 2020 Tenn. App. LEXIS 25 (Tenn. Ct. App. Jan. 22, 2020).

5. Wording of Conveyance.

The words “bargained and sold” may operate as a conveyance of land. Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Southern Iron & Coal Co. v. Schwoon, 124 Tenn. 176, 135 S.W. 785, 1910 Tenn. LEXIS 51 (1911).

6. Intent of Maker — Significance — Showing.

No particular form or appropriate words are essential to indicate the grantor's intention, for it is sufficient if the deed, however short and inartfully drawn it may be, contains words showing it to be the intention of the maker to pass an estate from himself to the other party. Jackson v. Dillon's Lessee, 2 Tenn. 261, 1814 Tenn. LEXIS 14 (1814).

The same words may be construed as an agreement to convey, or as operating as an actual conveyance, according to the intention of the parties to be gathered from the context. Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883).

Where the vendor accepted the cash payment on land and, at the request of the agent for both parties, signed the deed to the grantees paying the consideration, which deed had been prepared by the common agent, it was immaterial whether the vendor knew the exact names of the grantees or not, since she clearly intended to convey to the customers produced by the agent. Gill v. McKinney, 140 Tenn. 549, 205 S.W. 416, 1918 Tenn. LEXIS 55 (1918), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974), superseded by statute as stated in, Third Nat'l Bank v. Knobler, — S.W.2d —, 1988 Tenn. App. LEXIS 655 (Tenn. Ct. App. Oct. 21, 1988), overruled on other grounds, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974).

7. Consideration — Necessity — Recital.

It is not essential to its validity to express any consideration in a deed; and it is not necessary that it be grounded upon a valuable consideration, if it be supported by a good consideration. Jackson v. Dillon's Lessee, 2 Tenn. 261, 1814 Tenn. LEXIS 14 (1814); Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Whitby v. Whitby, 36 Tenn. 473, 1857 Tenn. LEXIS 39 (1857), overruled in part, Blair v. Brownson, 197 S.W.3d 681, 2006 Tenn. LEXIS 603 (Tenn. 2006); Gass v. Hawkins, 1 Shan. 167 (1860); Perry v. Central S.R.R., 45 Tenn. 138, 1867 Tenn. LEXIS 105 (1867); Mowry v. Davenport, 74 Tenn. 80, 1880 Tenn. LEXIS 213 (1880); White v. Blakemore, 76 Tenn. 49, 1881 Tenn. LEXIS 9 (1881); Hill v. McLean, 78 Tenn. 107, 1882 Tenn. LEXIS 151 (1882).

The recital of a consideration in a title bond is not essential to its validity. Whitby v. Whitby, 36 Tenn. 473, 1857 Tenn. LEXIS 39 (1857), overruled in part, Blair v. Brownson, 197 S.W.3d 681, 2006 Tenn. LEXIS 603 (Tenn. 2006); Perry v. Central S.R.R., 45 Tenn. 138, 1867 Tenn. LEXIS 105 (1867); White v. Blakemore, 76 Tenn. 49, 1881 Tenn. LEXIS 9 (1881).

8. Omission of Name of Grantor from Body.

It is sufficient, although the name of the signer does not appear in the body or operative parts of the deed, and the pronoun “I” is, by an evidently clerical error, omitted in one place, but the omission is supplied by the context and other recitals and parts of the deed. Insurance Co. of Tennessee v. Waller, 116 Tenn. 1, 95 S.W. 811, 1905 Tenn. LEXIS 1 (1905).

9. —Wife's Deed of Homestead.

The name of the wife need not appear in the body of a deed in order to bind her as grantor of the homestead right. Kelton v. Brown, 39 S.W. 541, 1897 Tenn. Ch. App. LEXIS 3 (1897).

10. Erasure of Grantee's Name after Delivery — Effect.

Where a deed to husband and wife had been delivered, the subsequent erasing of the wife's name from the deed had no effect on her title. Gill v. McKinney, 140 Tenn. 549, 205 S.W. 416, 1918 Tenn. LEXIS 55 (1918), overruled in part, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974), superseded by statute as stated in, Third Nat'l Bank v. Knobler, — S.W.2d —, 1988 Tenn. App. LEXIS 655 (Tenn. Ct. App. Oct. 21, 1988), overruled on other grounds, Robinson v. Trousdale County, 516 S.W.2d 626, 1974 Tenn. LEXIS 452 (Tenn. 1974).

11. Trust Agreement With Covenant to Stand Seized.

A trust agreement containing a covenant on part of declarant to stand seized of property to the use of his wife and daughters for their several lives, while an ancient form of conveyance and no longer in general use, is recognized and made valid as a deed by this section, and is good as between the parties though unrecorded. Rose v. Commissioner, 65 F.2d 616, 1933 U.S. App. LEXIS 3095 (6th Cir. 1933).

12. Estates Subject to Conveyance or Assignment.

Estate of remainder is subject to conveyance though remaindermen are children of the life tenant, though they predecease him. Bowers v. Moore, 138 Tenn. 132, 196 S.W. 147, 1917 Tenn. LEXIS 13 (1917).

Possibility of reversion may not be assigned. Yarbrough v. Yarbrough, 151 Tenn. 221, 269 S.W. 36, 1924 Tenn. LEXIS 62 (1925).

An estate in reversion is vested, and, therefore, assignable by conveyances. Manhattan Sav. Bank & Trust Co. v. Bedford, 161 Tenn. 187, 30 S.W.2d 227, 1929 Tenn. LEXIS 49 (1930).

Collateral References.

Description of land conveyed by reference to river or stream as carrying to thread or center or only to bank thereof — Modern status. 78 A.L.R.3d 604.

What constitutes a “structure” within restrictive covenant. 75 A.L.R.3d 1095.

Which of conflicting descriptions in deeds or mortgages of fractional quantity of interest intended to be conveyed prevails. 12 A.L.R.4th 795.

66-5-104. Execution by agent or attorney.

Instruments in relation to real or personal property, executed by an agent or attorney, may be signed by such agent or attorney for the principal, or by writing the name of the principal by that person as agent or attorney; or by simply writing the agent's or attorney's own name or the principal's name, if the instrument on its face shows the character in which it is intended to be executed.

Code 1858, § 2012 (deriv. Acts 1841-1842, ch. 153, § 1); Shan., § 3679; Code 1932, § 7606; T.C.A. (orig. ed.), § 64-503.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agency, §§ 11, 26; 9 Tenn. Juris., Deeds, § 8.

Law Reviews.

Agency — 1957 Tennessee Survey (F. Hodge O'Neal), 10 Vand. L. Rev. 973 (1957).

NOTES TO DECISIONS

1. Purpose.

This section was enacted for the protection of ordinary agents and attorneys from personal liability upon the contracts of their principals, when executed in accordance with the statute, which is in accord with the ancient common law in Comb's Case, 9 Coke's Rep., which protects all trustees alike from personal liability when the face of the paper itself shows clearly that they do not intend to bind themselves personally. Wyatt v. Davidson, 1 Shan. 613 (1876).

The purpose of this section is not to limit the mandatory forms of execution of an instrument by an agent to those specified, but is intended to protect agents from personal liability on instruments executed in their fiduciary capacities. Bush v. Cathey, 598 S.W.2d 777, 1979 Tenn. App. LEXIS 385, 11 A.L.R.4th 881 (Tenn. Ct. App. 1979).

2. Authority by Deed to Execute Deed.

To authorize the execution of a deed in the name of another, the authority must be by deed; and no previous parol assent or subsequent adoption will bind the party, unless the deed be acknowledged and redelivered. Turbeville v. Ryan, 20 Tenn. 113, 1839 Tenn. LEXIS 27, 34 Am. Dec. 622 (1839); Napier v. Catron, 21 Tenn. 534, 1841 Tenn. LEXIS 62 (1841); Boyd v. Dodson, 24 Tenn. 37, 1844 Tenn. LEXIS 6 (1844); Smith v. Dickinson, 25 Tenn. 261, 1845 Tenn. LEXIS 75, 44 Am. Dec. 306 (1845); Mosby v. Arkansas, 36 Tenn. 324, 1857 Tenn. LEXIS 3 (1857); McNutt v. McMahan, 38 Tenn. 98, 1858 Tenn. LEXIS 127 (Tenn. Sep. 1858); Cain v. Heard, 41 Tenn. 163, 1860 Tenn. LEXIS 37 (1860).

To authorize an agent to execute a deed in the name of another as his principal the authority must be by deed or by writing of equal formality with a deed. Lowe v. Wright, 40 Tenn. App. 525, 292 S.W.2d 413, 1956 Tenn. App. LEXIS 156 (Tenn. Ct. App. 1956).

3. Mode of Signing.

A deed, showing on its face that it is executed by the grantor as attorney in fact, but signed by attorney's name only, conveys the title of his principal. McCreary v. McCorkle, 54 S.W. 53, 1899 Tenn. Ch. App. LEXIS 105 (1899).

Although the plain meaning of the statute would seem to indicate that the instrument on its face must reflect the agency when executed by an agent who simply writes the name of the principal, the act of a husband in affixing his wife's initials to a counter-offer at her request was well within the spirit of the statute. Bush v. Cathey, 598 S.W.2d 777, 1979 Tenn. App. LEXIS 385, 11 A.L.R.4th 881 (Tenn. Ct. App. 1979).

4. —Corporate Deed Signed by Officers.

A deed binds a corporation, though not signed by the corporate name, where it purports on its face to be the deed of the corporation, recites in the testimonial clause that the corporation has caused its corporate seal and the names of its president and secretary to be attached thereto, and which in fact bears the corporate seal, and is signed by its president and secretary in their official capacities. Rawlings v. New Memphis Gaslight Co., 105 Tenn. 268, 60 S.W. 206, 1900 Tenn. LEXIS 76, 80 Am. St. Rep. 880 (1900); Turner v. Kingston Lumber & Mfg. Co., 106 Tenn. 1, 58 S.W. 854, 1900 Tenn. LEXIS 126 (1900).

5. Ineffectual Corporate Deed.

The deed of a private corporation is ineffectual to pass legal title to realty where it recites no authority for its execution and is signed by an individual as president without affixing a corporate seal, and which purports to be acknowledged by him personally, only. Garrett v. Belmont Land Co., 94 Tenn. 459, 29 S.W. 726, 1894 Tenn. LEXIS 59 (1895).

6. Contract by Agent in Principal's Name.

Under this statute, contracts relating to real or personal property may be executed by an agent in the name of his principal alone. Wilkerson v. Dennison, 113 Tenn. 237, 80 S.W. 765, 1904 Tenn. LEXIS 20, 106 Am. St. Rep. 821 (1904).

7. Deed Not Showing Name of Principal.

A deed signed in his own name by an attorney in fact is good notwithstanding he did not sign the name of his principal thereto, the deed showing on its face the capacity in which he was acting. McCreary v. McCorkle, 54 S.W. 53, 1899 Tenn. Ch. App. LEXIS 105 (1899).

Where a deed is executed by a trustee, and it appears on its face that it was executed by him in the character of trustee, the principle of this section applies, though deed be signed and acknowledged as an individual only. Renner v. Marshall, 58 S.W. 863, 1900 Tenn. Ch. App. LEXIS 52 (Tenn. Ch. App. 1900).

8. Illustrative Cases.

Trial court should not have answered a jury question during deliberations as to whether, if the decedent's adult stepchild had a power of attorney, could the stepchild sign a will and deed for the decedent in the affirmative or negative, and it should not have given a supplemental instruction concerning instruments to real property that were signed by an agent or attorney for a principal, but, instead, should have merely instructed the jury to render a verdict based on the jury instructions previously given. However, the error was harmless. Johnson-Murray v. Burns, 525 S.W.3d 625, 2017 Tenn. App. LEXIS 168 (Tenn. Ct. App. Mar. 14, 2017).

Collateral References.

Sufficiency of execution of deed by agent or attorney in fact in name of principal without his own name appearing. 96 A.L.R. 1252.

66-5-105. [Repealed.]

Compiler's Notes. Former § 66-5-105 (Acts 1977, ch. 224, §§ 1, 2; T.C.A., § 64-512), concerning the effect of mental and physical disability on powers of attorney, was repealed by Acts 1983, ch. 299, § 11, effective July 1, 1983, which also provided that any powers granted while this section was in effect shall remain in full force and in effect until otherwise terminated. For new law see title 34, ch. 6.

66-5-106. Authentication and registration required — Formal ceremonies unnecessary.

No deed of conveyance for lands, in whatever manner or form drawn, shall be good and available in law, as to strangers, unless it is acknowledged by the vendor, or proved by two (2) witnesses upon oath, in the manner prescribed in chapters 22 and 23 of this title, and registered by the register of the county where the land lies. All deeds so executed shall be valid and pass estates in land, or right to other estates, without livery of seisin, attornment, or other ceremony in the law whatever.

Code 1858, § 2005 (deriv. Acts 1715, ch. 38, § 5); Shan., § 3671; Code 1932, § 7596; T.C.A. (orig. ed.), § 64-504.

Cross-References. Effect of authentication and registration, title 66, ch. 26.

Extract copies from records as evidence, § 24-6-106.

Index of public records, title 10, ch. 7, part 2.

Notary's fees, § 8-21-1201.

Place of registration, § 66-24-103.

Registration fees, § 8-21-1001.

Statute of frauds, title 29, ch. 2.

Transfer of lots in unrecorded subdivisions restricted, § 13-3-410.

Writings eligible for registration, § 66-24-101.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 8; 21 Tenn. Juris., Recording Acts, §§ 6, 15; 24 Tenn. Juris., Vendor and Purchaser, § 8.

Law Reviews.

Recording Acts — Heir's Interest in Land After an Unrecorded Deed Executed by the Ancestor, 8 Tenn. L. Rev. 282 (1930).

Attorney General Opinions. A deed transferring ownership of land from an applicant for TennCare long-term care benefits to another party does not constitute a valid transfer of property on the date of execution of the deed absent registration of the instrument in the county register's office, and such a deed does not preclude the TennCare Bureau from pursuing estate recovery against the property. OAG 04-161, 2004 Tenn. AG LEXIS 173 (11/10/04).

NOTES TO DECISIONS

1. Effect of Statute on Other Methods of Conveyance.

The statute abolished the old English modes of conveyance, and excluded all modes other than that by deed, and has formed a common law on the subject in this state, which cannot be disregarded. Upon this statute, all our registry acts are grounded, and registration is substituted for the livery of seizin and for the attornment of the tenants on the land. Hampton's Lessee v. M'Ginnis, 1 Tenn. 286, 1808 Tenn. LEXIS 15 (1808); Peeler v. Norris' Lessee, 12 Tenn. 331, 1833 Tenn. LEXIS 71 (1833); Thomas' Lessee v. Blackemore, 13 Tenn. 113, 1833 Tenn. LEXIS 119 (1833); Taul v. Campbell, 15 Tenn. 318, 15 Tenn. 319, 1835 Tenn. LEXIS 8 (1835); Hays v. McGuire, 16 Tenn. 92, 1835 Tenn. LEXIS 51 (1835); Miller v. Miller, 19 Tenn. 484, 1838 Tenn. LEXIS 79, 33 Am. Dec. 157 (1838); Wallace v. Hannum, 20 Tenn. 443, 1839 Tenn. LEXIS 76, 34 Am. Dec. 659 (1839); Ward v. Daniel, 29 Tenn. 603, 1850 Tenn. LEXIS 40 (1850); Saunders v. Hackney, 78 Tenn. 194, 1882 Tenn. LEXIS 163 (1882).

Transactions other than the giving of a deed may amount to a “sale or transfer” of some part of a property for purposes of a due-on-sale clause in a note. Hodge v. DMNS Co., 652 S.W.2d 762, 1982 Tenn. App. LEXIS 455 (Tenn. Ct. App. 1982).

2. Consideration — Expression Unnecessary.

It is not necessary to express any consideration in deed. Jackson v. Dillon's Lessee, 2 Tenn. 261, 1814 Tenn. LEXIS 14 (1814).

3. Registration — Necessity.

Deeds are good as between the parties, without registration, and registration is only necessary to protect the grantee against the grantor's creditors and purchasers from him without actual notice of the deed. Rogers' Lessee v. Cawood, 31 Tenn. 142, 1851 Tenn. LEXIS 36 (1851); Lessee of Stewart v. Harris, 32 Tenn. 656, 1853 Tenn. LEXIS 102 (1853); Ready v. Bragg, 38 Tenn. 511, 1858 Tenn. LEXIS 215 (Tenn. Dec. 1858); Wilkins v. May, 40 Tenn. 173, 1859 Tenn. LEXIS 47 (1859); Green v. Goodall, 41 Tenn. 404, 1860 Tenn. LEXIS 83 (1860); Coward v. Culver, 59 Tenn. 540, 1873 Tenn. LEXIS 107 (1873); Sanders v. Everett, 3 Cooper's Tenn. Ch. 520 (1877); Saunders v. Hackney, 78 Tenn. 194, 1882 Tenn. LEXIS 163 (1882); Templeton v. Twitty, 88 Tenn. 595, 14 S.W. 435, 1889 Tenn. LEXIS 80 (Tenn. Dec. 1889); Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890); Bridges v. Cooper, 98 Tenn. 394, 39 S.W. 723, 1896 Tenn. LEXIS 233 (1897); King v. Coleman, 98 Tenn. 561, 40 S.W. 1082, 1897 Tenn. LEXIS 145 (1897); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904); Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912).

Registration is not necessary to perfect the legal title, and to make deeds admissible in evidence, as against a party claiming under an entirely different title. Self v. Haun, 2 Shan. 123 (1876); Templeton v. Twitty, 88 Tenn. 595, 14 S.W. 435, 1889 Tenn. LEXIS 80 (Tenn. Dec. 1889); Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890); King v. Coleman, 98 Tenn. 561, 40 S.W. 1082, 1897 Tenn. LEXIS 145 (1897); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

Where purchaser at execution sale under decree of federal court failed to record his deed to the land, the deed was void as to creditors. Shea v. Rucker, 167 Tenn. 550, 72 S.W.2d 551, 1933 Tenn. LEXIS 65 (1933).

Even though deed could not be registered because acknowledgment was void it would still be valid as between parties who were creditors and had actual notice. Hinton v. Robinson, 51 Tenn. App. 1, 364 S.W.2d 97, 1962 Tenn. App. LEXIS 90 (1962).

4. Prior Registration — Effect Between Rival Instruments.

In case of rival conveyances, the one first registered or noted for registration, though subsequently made, has preference, unless in a court of equity it is proved that the one claiming under the subsequent instrument had previous notice of the earlier unregistered instrument. Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912).

5. Registration as Notice to Creditors.

A duly registered valid deed imparts the same notice to a creditor that it imparts to a purchaser of the land. Phoenix Mut. Life Ins. Co. v. Kingston Bank & Trust Co., 172 Tenn. 335, 112 S.W.2d 381, 1937 Tenn. LEXIS 83 (1938).

Registration based upon a defective certificate of acknowledgment does not constitute notice to strangers to the instrument registered. In re Airport-81 Nursing Care, Inc., 29 B.R. 501, 1983 Bankr. LEXIS 6536 (Bankr. E.D. Tenn. 1983); In re Airport-81 Nursing Care, Inc., 36 B.R. 370, 1984 Bankr. LEXIS 6427 (Bankr. E.D. Tenn. 1984).

6. Execution Against Land Conveyed by Unregistered Deed.

It has always been held that an unregistered deed vests such title in the grantee that the land so conveyed and held may be levied on and sold as his property. Vance's Heirs v. M'Nairy, 11 Tenn. 170, 1832 Tenn. LEXIS 34 (1832), limited, Helms v. Alexander, 29 Tenn. 44, 1849 Tenn. LEXIS 4 (1849); Shields v. Mitchell, 18 Tenn. 1, 1836 Tenn. LEXIS 95 (1836); Rochell v. Benson, Hunt & Co.'s Lessee, 19 Tenn. 3, 1838 Tenn. LEXIS 2 (1838); Kimbrough v. Benton, 22 Tenn. 110, 1842 Tenn. LEXIS 40 (1842), questioned, Mays v. Wherry, 3 Tenn. Ch. 80 (1875); Simmons v. McKissick, 25 Tenn. 259, 1845 Tenn. LEXIS 74 (1845); Ready v. Bragg, 38 Tenn. 511, 1858 Tenn. LEXIS 215 (Tenn. Dec. 1858); Wilkins v. May, 40 Tenn. 173, 1859 Tenn. LEXIS 47 (1859); Coward v. Culver, 59 Tenn. 540, 1873 Tenn. LEXIS 107 (1873); Bridges v. Cooper, 98 Tenn. 381, 39 S.W. 720, 1896 Tenn. LEXIS 232 (1897); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

Land conveyed by an unregistered deed is subject to levy and sale under execution or attachment, and to the judgment lien, as the property of the grantor. Stanley v. Nelson & Dickinson, 23 Tenn. 484, 1844 Tenn. LEXIS 145 (1844); Butler v. Maury, 29 Tenn. 420, 1850 Tenn. LEXIS 3 (1850); Ocoee Bank v. Nelson, 41 Tenn. 186, 1860 Tenn. LEXIS 43 (1860); Kinsey v. McDearmon, 45 Tenn. 392, 1868 Tenn. LEXIS 20 (1868); Charles v. Taylor, 48 Tenn. 528, 1870 Tenn. LEXIS 105 (1870); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Wilson v. Eifler, 58 Tenn. 179, 1872 Tenn. LEXIS 244 (1872); Buchanan v. Kimes, 61 Tenn. 275, 1872 Tenn. LEXIS 370 (1872); Coward v. Culver, 59 Tenn. 540, 1873 Tenn. LEXIS 107 (1873); Lyle v. Longley, 65 Tenn. 286, 1873 Tenn. LEXIS 346 (1873); Sanders v. Everett, 3 Cooper's Tenn. Ch. 520 (1877); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883); Lookout Bank v. Noe, 86 Tenn. 21, 5 S.W. 433, 1887 Tenn. LEXIS 19 (1887).

7. Ejectment on Unregistered Deed.

One may maintain ejectment on an unregistered deed, but if not registered the deed must be proven. Williams v. Williams, 25 Tenn. App. 290, 156 S.W.2d 363, 1941 Tenn. App. LEXIS 108 (Tenn. Ct. App. 1941).

8. Deed with Insufficient Description — Validity.

Deeds with insufficient description of property are not valid conveyances, and though registered, leave the property open to levy in favor of grantor's creditors. Phoenix Mut. Life Ins. Co. v. Kingston Bank & Trust Co., 172 Tenn. 335, 112 S.W.2d 381, 1937 Tenn. LEXIS 83 (1938).

66-5-107. Correction of errors.

  1. Whenever an error or mistake is made in any deed of conveyance, or in the registration thereof, either in courses, distances, or names, the person liable to injury by such error or mistake may prefer a petition to the circuit court of the county in which the land is situated, setting forth the nature of the mistake or error, and all and singular the matters relative thereto.
  2. Before the petition shall be heard and determined, the petitioner shall advertise in a newspaper published in the judicial district in which the land is situated; and if no newspaper is published in the district, then in a newspaper in the adjoining district, setting forth the substance of the petition, and the term at which petitioner will make application for a hearing, three (3) weeks in succession, at least thirty (30) days before the petition shall be heard.
  3. The court may also direct written notice to be served upon such persons as may be interested in or affected by the relief sought, unless such notice shall appear to the court to have been previously given.
  4. When any person chooses to oppose the granting of the petition, that party may personally enter as a defendant, and, each party having given security for cost, the cause shall stand for hearing as other argument cases.
  5. The court shall examine such testimony as the petitioner may produce; and whenever it shall appear evident, from such testimony, that there was an error or mistake committed in drawing the deed of conveyance, the court shall order the same to be rectified, so as to comport with the intention of the parties; and shall further order the register of the county, in which the land is situated, to register the conveyance agreeably to the correction.
  6. Either party may appeal from the judgment of the court, or prosecute a writ of error thereto.

Code 1858, §§ 2014-2019 (deriv. Acts 1813, ch. 83, §§ 1-3); Shan., §§ 3681-3685; Code 1932, §§ 7608-7613; T.C.A. (orig. ed.), §§ 64-505 — 64-510.

Cross-References. Correction of errors in acknowledgment or probate, §§ 66-26-11366-26-115.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Public Lands, § 10; 22 Tenn. Juris., Rescission, Cancellation and Reformation, § 47.

Law Reviews.

Daigle v. Shell Oil Company and the Bumpy Road to the Recoverability of Medical Monitoring Expenses Under CERCLA, 47 Vand. L. Rev. 235 (1994).

The Tennessee Court System — Circuit Court (Frederic S. LeClercq), 8 Mem. St. U.L. Rev. 241 (1978).

NOTES TO DECISIONS

1. Jurisdiction.

The only essential facts to give jurisdiction are that an error has been committed by an officer mentioned and that the land lies in the county. Overton's Lessee v. Lackey, 3 Tenn. 193, 1 Cooke 193, 1812 Tenn. LEXIS 54.

Remedy is applicable whether petitioner be in or out of possession. American Asso. v. Williams, 166 F. 17, 1908 U.S. App. LEXIS 4831 (6th Cir. Tenn. 1908).

2. Wrong County.

Mistake in naming the county in which the land lies is not covered. Pile v. Crawford, 160 Tenn. 358, 24 S.W.2d 892, 1929 Tenn. LEXIS 113 (1929).

3. Correction of Grant.

Phrase “any deed of conveyance” used in this section includes “grant,” and this section covers correction of a grant. Dearing v. Brush Creek Coal Co., 182 Tenn. 302, 186 S.W.2d 329, 1945 Tenn. LEXIS 222 (1945).

In a proceeding under this section a grant could be corrected so as to include two calls within the courses and distances which were carried in original survey but omitted by mistake from grant, since omissions as well as commissions can be corrected. Dearing v. Brush Creek Coal Co., 182 Tenn. 302, 186 S.W.2d 329, 1945 Tenn. LEXIS 222 (1945).

4. Decree of Court As Evidence.

In ejectment proceeding a decree issued by circuit court correcting description in deed was properly read in evidence. Lewis v. Oakley, 57 Tenn. 483, 1873 Tenn. LEXIS 246 (1873).

5. Procedure.

Statute does not expressly provide for a bar to the validity of a deed of trust if the procedure for correction of errors is not followed. Tenn. State Bank v. Mashek, — S.W.3d —, 2020 Tenn. App. LEXIS 228 (Tenn. Ct. App. May 21, 2020).

Collateral References.

Annuity agreement, mistake as ground for cancellation of deed given in consideration of. 131 A.L.R. 448.

Conscious ignorance of fact, as distinguished from mistake of fact, as ground for reformation of contract. 137 A.L.R. 908.

Measure and elements of damages recoverable from vendor where there has been mistake to amount to land conveyed. 94 A.L.R.3d 1091.

Reformation as against third persons of instrument mistakenly describing property as affected by its record. 44 A.L.R. 118, 79 A.L.R.2d 1180.

Survival to heir of grantor's right to maintain suit in equity to set aside his conveyance on ground of mistake. 2 A.L.R. 437, 33 A.L.R. 51.

66-5-108. Preservation, or extinguishment and reversion of mineral interests.

    1. The general assembly finds that many owners of agricultural property who have separated titles have difficulty acquiring loans and in other ways have been hindered in fully developing the surface of land.
    2. The general assembly further finds that there are mineral estates, separated from the surface, that have not been properly registered in the counties in which they are located, and are, therefore, not on the tax rolls, causing a significant loss of revenue to many Tennessee counties.
    3. Further, the general assembly finds that many surface owners cannot discover from records at their courthouses whether they own the underlying mineral estate, or if they do not, who does, and that this situation causes undue hardship and title uncertainty for surface owners.
    4. The general assembly further finds that where there are abandoned mineral estates, those on which no development has taken place, no taxes paid and no claim filed pursuant to this section, the rational development of minerals in Tennessee is hindered.
    5. Thus, to promote commerce and agriculture and proper development of surface and mineral estates and to remedy uncertainties in title, the general assembly adopts this section.
  1. For the purposes of this section and §§ 67-5-804(b), 67-5-809 and 67-5-2502(e):
    1. “Mineral interest” means the interest which is created by an instrument, transferring either by grant, assignment, or reservation, or otherwise, an interest, of any kind, in coal, oil and gas, and other minerals;
    2. “Statement of claim” means a document or instrument to be filed by the owner of a mineral interest in real property to make claim to that mineral interest; and
    3. “Use of mineral interest” means that a mineral interest shall be deemed to be used when there are any minerals being produced thereunder or when operations are being conducted thereon for injection, withdrawal, storage or disposal of water, gas or other fluid substances, or when rentals or royalties are being paid to the owner thereof for the purposes of delaying or enjoying the use or exercise of such rights, or when any such use is being carried out on any tract with which such mineral interest may be unitized or pooled for production purposes, or when taxes are paid on such mineral interest by the owner of the land.
  2. Any interest in coal, oil and gas, and other minerals shall, if unused for a period of twenty (20) years, be extinguished, unless a statement of claim is filed in accordance with subsection (d), and the ownership of the mineral interest shall revert to the owner of the surface.
    1. The statement of claim provided in subsection (c) shall be filed by the owner of the mineral interest prior to the end of the twenty-year period set forth in subsection (c) or within three (3) years after July 1, 1987, whichever is later.
    2. The statement of claim shall contain the name and address of the owner or owners of such mineral interest. The claim shall cite tax maps and parcel numbers for the owner or owners of surface above the mineral estate, and a reference to the instrument under which the interest is claimed.
    3. The statement of claim shall be filed with the office of the register of deeds in the county in which such land is located.
    4. Upon filing of the statement of claim within the time provided, it shall be prima facie evidence in any legal proceedings that such mineral interest was being used on the date the statement of claim was filed.
    1. Any person who will succeed to the ownership of any mineral interest upon the lapse thereof may commence such lapse by filing, with the clerk and master of the county in which the mineral interest is located, a complaint of claim of abandoned mineral interest which may be in the following or a similar form:

      COMPLAINT FOR CLAIM OF ABANDONED MINERAL INTEREST I,  , after being duly sworn according to law, would state to the Court as follows: 1. My full name is   and I reside at  .      (address) 2. I am the current owner of record of a surface estate located at   of record in Book  , Page  , Register's Office of   County, Tennessee. 3. After inquiring with the county property assessor, I am not aware of any tax being paid for the mineral estate which underlies my surface estate. The mineral estate is of record (if known) in Book  , Page  , Register's Office of   County, Tennessee. The name of the mineral interest owner (if known) is   and the address (if known) is  . 4. Upon reasonable inquiry, I am not aware of any use being made of the mineral estate underlying my surface estate as defined in  Tennessee Code Annotated, § 66-5-108 . 5. I believe the mineral interest is abandoned. 6. Upon the publishing of notice as required by  Tennessee Code Annotated, § 66-5-108  and the failure of the mineral interest owner to file a statement of claim, plaintiff demands that the mineral interest be declared to be abandoned, that the interest lapse and be reunited with the above-mentioned surface estate. This   day of  , 20 . (Signature of surface owner) State of Tennessee County of  Personally appeared before me,               (name of clerk or deputy) of the county,  ,  the within named plaintiff,      (plaintiff's name) having been duly sworn who acknowledged that plaintiff executed the within instrument for the purposes therein contained. Witness my hand, this   day of  , 20 . My commission expires:  .

      Click to view form.

    2. The complaint shall be verified and filed by the clerk and master upon payment of the fee provided in subdivision (e)(8).
    3. Upon the filing of a complaint of claim of abandoned mineral interest the clerk and master shall give notice that the mineral interest identified in the complaint shall lapse in sixty (60) days by publishing the same once a week for three (3) consecutive weeks in a newspaper of general circulation in the county in which such mineral interest is located, and shall send by certified mail within ten (10) days after such publication a copy of such notice to the owner of such mineral interest identified by the plaintiff in the complaint of claim of abandoned mineral interest.
    4. If, within sixty (60) days after publication provided in subdivision (e)(3), the mineral interest owner does not file with the clerk and master an answer alleging a claim to the mineral interest, the clerk and master shall so certify to the chancellor who shall enter the following order declaring the mineral interest has lapsed and vesting title to the mineral interest in the owner of the surface estate:

      Order The cause came to be heard this   day of  , 20 , before the Honorable  , Chancellor of the Chancery Court for   County, upon the Complaint for Claim of Abandoned Mineral Interest pursuant to  Tennessee Code Annotated, § 66-5-108 , and certification by the Clerk and Master that no answer has been filed after providing the notice required by that statute. The Court, therefore, finds that there has been no use of the mineral interest located at   of record, if known, in Book  , Page  , Register's Office of   County, Tennessee, as defined in  Tennessee Code Annotated, § 66-5-108 ; and the mineral interest has been abandoned. IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the mineral interest located at  (Address) , of record, if known, in Book  , Page  , Register's Office of   County, Tennessee, is abandoned and that mineral estate shall be reunited to the surface interest titled to  (name of surface owner)  of record in Book  , Page  , Register's Office of   County, Tennessee. Chancellor

      Click to view form.

    5. All notices provided for in this section shall state the name of the owner of the mineral interest, if known, as shown of record, a description of the land and the name of the person filing the complaint of claim of abandoned mineral interest.
    6. In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census, upon the filing of the statement of claim provided in subsection (d) or the order provided in subdivision (e)(4) in the register of deeds office for the county where such interest is located, the register shall record the same in a book to be kept for that purpose, which shall be known as the “Dormant Mineral Interest Record,” and shall indicate by marginal notation on the instrument creating the original mineral interest and the instrument creating the interest of the current surface owner, the filing of the statement of claim or order.
    7. In order for the judicially determined lapse to be effective as to the subsequent interest holders, a certified copy of the final order evidencing the same must be recorded in the register of deeds office in the county where the property is located.
    8. The clerk and master shall charge a fee of thirty dollars ($30.00) for the filing of the complaint of claim of abandoned mineral interest and the order provided for in this section and shall collect the fees necessary for the publication required in this section.
    9. No complaint for claim of abandoned mineral interest shall be accepted for filing prior to July 1, 1990.
    1. Upon the filing of the statement of claim as provided in subsection (c), the register shall record the same in a book to be kept for that purpose which shall be known as the “Dormant Mineral Interest Record” and shall enter in the index where the instrument creating the original mineral interest is indexed a notation referencing the statement of claim. Upon the filing of the order as provided in subdivision (e)(4), the register shall record the order in the Dormant Mineral Interest Record and shall enter the filing of the order in the indexes referencing the instrument creating the original mineral interest and the instrument creating the interest of the current surface owner.
    2. In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census, upon the filing of the statement of claim as provided in subsection (c) or the proof of service of notice as provided in subsection (e) in the register of deeds office for the county where such interest is located, the register shall record the same in a book to be kept for that purpose, which shall be known as the “Dormant Mineral Interest Record,” and shall indicate by marginal notation on the instrument creating the original mineral interest the filing of the statement of claim or affidavit of publication and service of notice.
  3. The provisions of Acts 1987, chapter 282, may not be waived at any time prior to the expiration of the twenty-year period provided in subsection (c).
  4. This section applies in all ways to property owned by the state.
  5. This section may not be waived at any time prior to the expiration of the twenty-year period provided in subsection (c).
  6. No action shall be brought by any person to contest the lapse of a mineral interest pursuant to this section after three (3) years from the date such interest lapsed.
    1. Any person who prevails in an action to quiet title to challenge a statement of claim or a complaint for claim of abandoned mineral interests filed pursuant to this section may be awarded reasonable attorney's fees and costs if the court finds that the statement of claim or the complaint was not filed in good faith. A court may find that a statement of claim or the complaint was not filed in good faith if such was filed without reasonable inquiry, with no factual basis, and for purposes of harassment.
    2. If the court finds no record of taxes paid or statement of claim filed for the lapsed mineral interests which references the mineral estate by tax map and parcel number, then a complaint for claim of abandoned mineral interest shall be deemed to have been filed in good faith.
  7. The only parties of interest pursuant to this section shall be an owner of the mineral interest and a person who shall succeed to the ownership of the mineral interest upon its lapse. Any third person claiming title or interest in any matter pursuant to this section shall prove by verified complaint, affidavit or other evidence that the third person's rights are or will be violated and that such third person will suffer injury, loss or damage if not allowed to become a party thereto.

Acts 1987, ch. 282, §§ 1, 2, 7, 9, 12; 1988, ch. 636, §§ 15, 16; 1988, ch. 702, §§ 1, 2; 1990, ch. 902, §§ 17, 18.

Compiler's Notes. Acts 1990, ch. 902, § 19 provided that the amendment by that act shall serve to ratify transactions occurring on or after July 1, 1988.

For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Cross-References. Classification and assessment, mineral interests, back assessments, location, § 67-5-809.

Classification and assessment, records, identification and registration of mineral interests, § 67-5-804.

Limitation of actions, lapse of mineral interests, § 28-2-110.

Notice of sale of land, mineral interests, § 67-5-2502.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-227, 8-431, 8-1112.

Law Reviews.

CERCLA Liability of Mineral Rights Owners — Another Pocket to Pick?, 19 Mem. St. U.L. Rev. 77 (1989).

When Policies Collide: The Conflict Between the Bankruptcy Code and CERCLA, 24 Mem. St. U.L. Rev. 739 (1994).

NOTES TO DECISIONS

1. “Use of Mineral Interest.”

Trial court correctly concluded that appellant abandoned its interest, if any, in the separated mineral interests underlying a portion of appellee's property, and that the separated mineral interests reverted to appellee as appellant failed to show a use of the property in the 20 years preceding the filing of its statement of claim in 2008 because, if any payments were made during the statutory period, the payments could not constitute “royalties” as there was no dispute that no oil, gas, or minerals were ever produced by appellant from appellee's property; and there were no payments made at any time during the relevant period that could possibly constitute the payment of rentals regarding appellee's property. Currence v. Harrogate Energy, LLC, — S.W.3d —, 2015 Tenn. App. LEXIS 318 (Tenn. Ct. App. May 11, 2015).

66-5-109. Effective date of conveyance.

  1. The effective date of any conveyance of real property in this state is presumed to be the date of the instrument of conveyance, and shall not be affected by a notary acknowledgment in such conveyance which may be dated prior or subsequent to the date of the conveyance.
    1. If an instrument conveying real property is not dated, but contains a notary acknowledgment which is dated, the effective date of the instrument shall be the date of the notary acknowledgment.
    2. If the instrument is not dated, but contains more than one (1) notary acknowledgment, containing more than one (1) date, the latest date of a notary acknowledgment in the instrument shall be the effective date of the instrument.

Acts 1989, ch. 483, §§ 1, 2.

66-5-110. [Repealed.]

Compiler's Notes. Former § 66-5-110 (Acts 1991, ch. 125, § 1), concerning the transfer of realty and the non-disclosure of real estate's prior occupation by a person with AIDS or of realty's criminal history, was repealed by Acts 1994, ch. 828, § 12, effective July 1, 1994.

66-5-111. Identification of specific mineral interests to be conveyed.

Notwithstanding any law to the contrary, where an owner of surface and mineral rights to real property enters into a contract for the conveyance of mineral rights in such property resulting in a severance of such interests, the parties to such conveyance shall identify the specific mineral interests to be conveyed to the purchaser of the mineral rights. The purchaser of the mineral interests shall identify such interests purchased by providing a deed reference number in accordance with § 67-5-804(c) for the mineral interest with the property assessor in the county in which the interests are located as prescribed in this section. For the purposes of this section, “specific mineral interests” means only those minerals listed in the deed as contemplated by the parties. All rights to minerals not described in the deed shall remain with the surface owner. This section shall apply to all contracts entered into on or after July 1, 2011, and shall not impair the obligation of any existing contract or be construed to direct courts in determining the intent of the parties who entered into a contract prior to such date.

Acts 2011, ch. 341, § 4.

Part 2
Residential Property Disclosures

66-5-201. General provisions.

This part applies only with respect to transfers by sale, exchange, installment land sales contract or lease with option to buy residential real property consisting of not less than one (1) nor more than four (4) dwelling units, including site-built and nonsite-built homes, whether or not the transaction is consummated with the assistance of a licensed real estate broker or salesperson. The disclosure statement referenced in § 66-5-202 is not a warranty of any kind by a seller and is not a substitute for inspections either by the individual purchasers or by a professional home inspector. The disclosure required by this part shall be provided to potential buyers for their exclusive use and may not be relied upon by purchasers in subsequent transfers from the original purchaser who received the property disclosure. The required disclosure shall be given in good faith by the owner or owners of property that is being transferred and shall be subject to the requirements of this part.

Acts 1994, ch. 828, § 1; 2000, ch. 771, § 1.

NOTES TO DECISIONS

1. Tolling of Statute of Limitations.

Insofar as the buyers' claims under the Tennessee Residential Property Disclosures Act, T.C.A. § 66-5-201 et seq., related to the buyers' claim of fraudulent concealment against the sellers, the trial court's grant of summary judgment in favor of the sellers on statute of limitations grounds was reversed, as the applicable statute of limitations was tolled by the sellers' alleged fraudulent concealment of termite damage to the home it sold to the buyers. Patel v. Bayliff, 121 S.W.3d 347, 2003 Tenn. App. LEXIS 207 (Tenn. Ct. App. 2003), appeal denied, — S.W.3d —, 2003 Tenn. LEXIS 921 (Tenn. 2003).

2. Duties of Real Estate Licensee.

Claim for a violation of the Tennessee Residential Property Disclosure Act, T.C.A. § 66-5-201 et seq., is not the sole avenue for recovery against a real estate licensee; pursuant to T.C.A. § 66-5-208(d), the licensee is not excused from making the disclosures required by T.C.A. § 62-13-403 of the Tennessee Real Estate Broker License Act of 1973, and the Disclosure Act does not remove or otherwise affect any remedy provided by law for such a failure to disclose. Ledbetter v. Schacht, 395 S.W.3d 130, 2012 Tenn. App. LEXIS 604 (Tenn. Ct. App. Aug. 31, 2012), appeal denied, — S.W.3d —, 2013 Tenn. LEXIS 23 (Tenn. Jan. 9, 2013).

Real estate licensee's duty under the Tennessee Residential Property Disclosures Act encompassed a duty to advise his or her client/seller to disclose known material defects; however, the record contained no proof that the log construction of the home, in and of itself, was a material defect that the sellers were required to disclose, and the log construction was not in itself an adverse fact which the real estate agent or the real estate agency had a duty to disclose to the buyers. Oliver v. Pulse, — S.W.3d —, 2020 Tenn. App. LEXIS 156 (Tenn. Ct. App. Apr. 14, 2020).

66-5-202. Required disclosures or disclaimers.

With regard to transfers described in § 66-5-201, the owner of the residential property shall furnish to a purchaser one of the following:

  1. A residential property disclosure statement in the form provided in this part regarding the condition of the property, including any material defects known to the owner. Such disclosure form may be as included in this part and must include all items listed on the disclosure form required pursuant to this part. The disclosure form shall contain a notice to prospective purchasers and owners that the prospective purchaser and the owner may wish to obtain professional advice or inspections of the property. The disclosure form shall also contain a notice to purchasers that the information contained in the disclosure are the representations of the owner and are not the representations of the real estate licensee or sales person, if any. The owner shall not be required to undertake or provide any independent investigation or inspection of the property in order to make the disclosures required by this part; or
  2. A residential property disclaimer statement stating that the owner makes no representations or warranties as to the condition of the real property or any improvements thereon and that purchaser will be receiving the real property “as is,” that is, with all defects which may exist, if any, except as otherwise provided in the real estate purchase contract. A disclaimer statement may only be permitted where the purchaser waives the required disclosure under subdivision (1). If the purchaser does not waive the required disclosure under this part, the disclosure statement described in subdivision (1) shall be provided in accordance with the requirements of this part.

Acts 1994, ch. 828, § 2.

NOTES TO DECISIONS

1. Material Defects.

In a suit regarding the sale of a condominium unit that the buyers purchased from the sellers, the sellers affirmatively negated an essential element of the buyers' Tennessee Residential Property Disclosures Act, T.C.A. § 66-5-201 et seq., claim, specifically, that the alleged material defects were known to the owner. Additionally, the buyers failed to carry their burden to set forth specific facts establishing the existence of disputed, material facts which had to be resolved by the trier of fact; thus, there were no genuine issues with regard to the material facts and the sellers were entitled to summary judgment on that claim. Robinson v. Currey, 153 S.W.3d 32, 2004 Tenn. App. LEXIS 411 (Tenn. Ct. App. 2004), appeal denied, — S.W.3d —, 2004 Tenn. LEXIS 1104 (Tenn. Dec. 6, 2004).

Real estate licensee's duty under the Tennessee Residential Property Disclosures Act encompassed a duty to advise his or her client/seller to disclose known material defects; however, the record contained no proof that the log construction of the home, in and of itself, was a material defect that the sellers were required to disclose, and the log construction was not in itself an adverse fact which the real estate agent or the real estate agency had a duty to disclose to the buyers. Oliver v. Pulse, — S.W.3d —, 2020 Tenn. App. LEXIS 156 (Tenn. Ct. App. Apr. 14, 2020).

2. Punitive Damages.

Court reversed an award of punitive damages against a real estate agent because the finding that the agent's conduct was so intentionally egregious as to justify the award of punitive damages was not supported by clear and convincing evidence; although the home at issue had undergone repairs as recommended by structural engineers, the engineering reports available to the agent clearly indicated that, once the repairs had been made, the house would be considered structurally sound. Goodale v. Langenberg, 243 S.W.3d 575, 2007 Tenn. App. LEXIS 326 (Tenn. Ct. App. May 23, 2007), appeal denied, — S.W.3d —, 2007 Tenn. LEXIS 1063 (Tenn. Nov. 19, 2007).

3. Disclosure.

Trial court properly granted a seller and a licensed affiliate broker summary judgment because the broker did not have knowledge of “adverse facts” within the meaning of the Tennessee Residential Property Disclosure Act and the Tennessee Real Estate Broker License Act of 1973; nothing in the record created a genuine issue of material fact as to whether the broker knew that a cabin had been left vacant without a roof, doors, windows, or a deck or was otherwise exposed to the elements. Haynes v. Lunsford, — S.W.3d —, 2017 Tenn. App. LEXIS 69 (Tenn. Ct. App. Feb. 2, 2017).

Trial court properly granted a seller and a licensed affiliate broker summary judgment because there were no genuine issues of material fact as to whether they violated the Tennessee Residential Property Disclosure Act and the Tennessee Real Estate Broker License Act of 1973; even though the broker testified the warranty deed transferring the property from the bank to the seller could have meant the property had been involved in a foreclosure, that information had been provided to the buyers. Haynes v. Lunsford, — S.W.3d —, 2017 Tenn. App. LEXIS 69 (Tenn. Ct. App. Feb. 2, 2017).

66-5-203. Delivery of disclosure or disclaimer statement.

  1. The owner of residential real property subject to this part shall deliver to the purchaser the written disclosure or disclaimer statement, if agreed upon by the purchaser required by this part prior to the acceptance of a real estate purchase contract. For purposes of this part, a “real estate purchase contract” means a contract for the sale, exchange or lease with option to buy of real estate subject to this part, and “acceptance” means the full execution of a real estate purchase contract by all parties. The residential property disclaimer statement or residential property disclosure statement may be included in the real estate purchase contract, in an addendum to the contract, or in a separate document.
  2. Failure to provide the disclosure or disclaimer statement required by this part shall not permit a purchaser to terminate a real estate purchase contract; however, a purchaser shall not be restricted by this part from bringing such other actions at law or in equity that are otherwise permitted.

Acts 1994, ch. 828, § 3.

66-5-204. Liability for errors or omissions — Experts' reports.

  1. The owner shall not be liable for any error, inaccuracy or omission of any information delivered pursuant to this part if:
    1. The error, inaccuracy or omission was not within the actual knowledge of the owner or was based upon information provided by public agencies or by other persons providing information as specified in subsection (b) that is required to be disclosed pursuant to this part, or the owner reasonably believed the information to be correct; and
    2. The owner was not grossly negligent in obtaining the information from a third party and transmitting it.
  2. The delivery by a public agency or other person, as described in subsection (c), of any information required to be disclosed by this part to a prospective purchaser shall be deemed to comply with the requirements of this part, and shall relieve the owner of any further duty under this part with respect to that item of information.
  3. The delivery by the owner of a report or opinion prepared by a licensed engineer, land surveyor, geologist, wood destroying insect control expert, contract or other home inspection expert, dealing with matters within the scope of the professional license or expertise, shall satisfy the requirements of subsection (a) if the information is provided to the owner pursuant to request therefor, whether written or oral. In responding to such a request, an expert may indicate, in writing, an understanding that the information provided will be used in fulfilling the requirements of this part and, if so, shall indicate the required disclosure or portions thereof, to which the information being furnished is applicable. Where such a statement is furnished, the expert shall not be responsible for any items of information, or portions thereof, other than those expressly set forth in this statement.

Acts 1994, ch. 828, § 4.

66-5-205. Liability for changed circumstances.

If information disclosed in accordance with this part is subsequently rendered or discovered to be inaccurate as a result of any act, occurrence, information received, circumstance or agreement subsequent to the delivery of the required disclosures, the inaccuracy resulting therefrom does not constitute a violation of this part; provided, however, that at or before closing, the owner shall be required to disclose any material change in the physical condition of the property or certify to the purchaser at closing that the condition of the property is substantially the same as it was when the disclosure form was provided. If, at the time the disclosures are required to be made, an item of information required to be disclosed is unknown or not available to the owner, the owner may state that the information is unknown or may use an approximation of the information; provided, that the approximation is clearly identified as such, is reasonable, is based on the actual knowledge of the owner and is not used for the purpose of circumventing or evading this part.

Acts 1994, ch. 828, § 5.

66-5-206. Duties of real estate licensees.

A real estate licensee representing an owner of residential real property as the listing broker has a duty to inform each such owner represented by that licensee of the owner's rights and obligations under this part. A real estate licensee representing a purchaser of residential real property or, if the purchaser is not represented by a licensee, the real estate licensee representing an owner of residential real estate and dealing with the purchaser has a duty to inform each such purchaser of the purchaser's rights and obligations under this part. If a real estate licensee performs those duties, the licensee shall have no further duties to the parties to a residential real estate transaction under this part, and shall not be liable to any party to a residential real estate transaction for a violation of this part or for any failure to disclose any information regarding any real property subject to this part. However, a cause of action for damages or equitable remedies may be brought against a real estate licensee for intentionally misrepresenting or defrauding a purchaser. A real estate licensee will further be subject to a cause of action for damages or equitable relief for failing to disclose adverse facts of which the licensee has actual knowledge or notice. “Adverse facts” means conditions or occurrences generally recognized by competent licensees that significantly reduce the structural integrity of improvements to real property, or present a significant health risk to occupants of the property.

Acts 1994, ch. 828, § 6.

NOTES TO DECISIONS

1. Duty to Disclose.

Summary judgment was properly awarded to a real estate company and a real estate agent in home buyers'  action for violation of the Tennessee Residential Disclosure Act because there was no genuine issue of material fact as to whether the company and the agent should have known that a log home with vinyl siding caused structural problems. Odom v. Oliver, 310 S.W.3d 344, 2009 Tenn. App. LEXIS 103 (Tenn. Ct. App. Mar. 17, 2009), appeal denied, — S.W.3d —, 2009 Tenn. LEXIS 814 (Tenn. Nov. 23, 2009).

Buyers'  claim that sellers'  real estate agent violated T.C.A. § 66-5-208(d) of the Tennessee Residential Property Disclosure Act, T.C.A. § 66-5-201 et seq., by failing to disclose defects in the home's foundation did not survive summary judgment, as the agent averred that she had no knowledge of adverse facts affecting the home's structural integrity, and plaintiffs submitted no evidence to the contrary. Ledbetter v. Schacht, 395 S.W.3d 130, 2012 Tenn. App. LEXIS 604 (Tenn. Ct. App. Aug. 31, 2012), appeal denied, — S.W.3d —, 2013 Tenn. LEXIS 23 (Tenn. Jan. 9, 2013).

Trial court properly granted a seller and a licensed affiliate broker summary judgment because the broker did not have knowledge of “adverse facts” within the meaning of the Tennessee Residential Property Disclosure Act and the Tennessee Real Estate Broker License Act of 1973; nothing in the record created a genuine issue of material fact as to whether the broker knew that a cabin had been left vacant without a roof, doors, windows, or a deck or was otherwise exposed to the elements. Haynes v. Lunsford, — S.W.3d —, 2017 Tenn. App. LEXIS 69 (Tenn. Ct. App. Feb. 2, 2017).

Real estate licensee's duty under the Tennessee Residential Property Disclosures Act encompassed a duty to advise his or her client/seller to disclose known material defects; however, the record contained no proof that the log construction of the home, in and of itself, was a material defect that the sellers were required to disclose, and the log construction was not in itself an adverse fact which the real estate agent or the real estate agency had a duty to disclose to the buyers. Oliver v. Pulse, — S.W.3d —, 2020 Tenn. App. LEXIS 156 (Tenn. Ct. App. Apr. 14, 2020).

2. Punitive Damages.

Court reversed an award of punitive damages against a real estate agent because the finding that the agent's conduct was so intentionally egregious as to justify the award of punitive damages was not supported by clear and convincing evidence; although the home at issue had undergone repairs as recommended by structural engineers, the engineering reports available to the agent clearly indicated that, once the repairs had been made, the house would be considered structurally sound. Goodale v. Langenberg, 243 S.W.3d 575, 2007 Tenn. App. LEXIS 326 (Tenn. Ct. App. May 23, 2007), appeal denied, — S.W.3d —, 2007 Tenn. LEXIS 1063 (Tenn. Nov. 19, 2007).

66-5-207. Liability for nondisclosure of communicable diseases or criminal acts on property.

Notwithstanding any of the provisions of this part, or any other statute or regulation, no cause of action shall arise against an owner or a real estate licensee for failure to disclose that an occupant of the subject real property, whether or not such real property is subject to this part, was afflicted with human immunodeficiency virus (HIV) or other disease which has been determined by medical evidence to be highly unlikely to be transmitted through the occupancy of a dwelling place, or that the real property was the site of:

  1. An act or occurrence which had no effect on the physical structure of the real property, its physical environment or the improvements located thereon; or
  2. A homicide, felony or suicide.

Acts 1994, ch. 828, § 7.

66-5-208. Remedies for misrepresentation or nondisclosure.

  1. The purchaser's remedies for an owner's misrepresentation on a residential property disclosure statement shall be either:
    1. An action for actual damages suffered as a result of defects existing in the property as of the date of execution of the real estate purchase contract; provided, that the owner has actually presented to a purchaser the disclosure statement required by this part, and of which the purchaser was not aware at the earlier of closing or occupancy by the purchaser, in the event of a sale, or occupancy in the event of a lease with the option to purchase. Any action brought under this subsection (a) shall be commenced within one (1) year from the date the purchaser received the disclosure statement or the date of closing, or occupancy if a lease situation, whichever occurs first;
    2. In the event of a misrepresentation in any residential property disclosure statement required by this part, termination of the contract prior to closing, subject to  § 66-5-204; or
    3. Such other remedies at law or equity otherwise available against an owner in the event of an owner's intentional or willful misrepresentation of the condition of the subject property.
  2. No cause of action may be instituted against an owner of residential real property subject to this part for the owner's failure to provide the disclosure or disclaimer statement required by this part. However, such owner would be subject to any other cause of action available in law or equity against an owner for misrepresentation or failure to disclose material facts regarding the subject property that exists on July 1, 1994.
  3. No cause of action may be instituted against a closing agent or closing attorney for the failure of an owner to provide the disclaimer or disclosure required by this part or for any misrepresentations made by a seller on the disclosure form supplied to the purchaser pursuant to this part.
    1. No cause of action may be instituted against a real estate licensee for information contained in any reports or opinions prepared by an engineer, land surveyor, geologist, wood destroying inspection control expert, termite inspector, mortgage broker, home inspector, or other home inspection expert. A real estate licensee may not be the subject of any action and no action may be instituted against a real estate licensee for any information contained in the form prescribed by § 66-5-210, unless the real estate licensee is signatory to such.
    2. Nothing in this subsection (d) shall be construed to exempt or excuse a real estate licensee from making any of the disclosures required by § 62-13-403, § 62-13-405 or § 66-5-206, nor shall it be construed to remove, limit or otherwise affect any remedy provided by law for such a failure to disclose.
  4. The failure of an owner to provide a purchaser the disclosure or disclaimer required by this part shall not have any effect on title to property subject to this part and the presence or absence of such disclosure or disclaimer is not a cloud on title and has no effect on title to such property.

Acts 1994, ch. 828, § 8; 2003, ch. 263, § 1.

NOTES TO DECISIONS

1. Claims Against Real Estate Licensee.

Buyers'  claim that sellers'  real estate agent violated T.C.A. § 66-5-208(d) of the Tennessee Residential Property Disclosure Act, T.C.A. § 66-5-201 et seq., by failing to disclose defects in the home's foundation did not survive summary judgment, as the agent averred that she had no knowledge of adverse facts affecting the home's structural integrity, and plaintiffs submitted no evidence to the contrary. Ledbetter v. Schacht, 395 S.W.3d 130, 2012 Tenn. App. LEXIS 604 (Tenn. Ct. App. Aug. 31, 2012), appeal denied, — S.W.3d —, 2013 Tenn. LEXIS 23 (Tenn. Jan. 9, 2013).

Claim for a violation of the Tennessee Residential Property Disclosure Act, T.C.A. § 66-5-201 et seq., is not the sole avenue for recovery against a real estate licensee; pursuant to T.C.A. § 66-5-208(d), the licensee is not excused from making the disclosures required by T.C.A. § 62-13-403 of the Tennessee Real Estate Broker License Act of 1973, and the Disclosure Act does not remove or otherwise affect any remedy provided by law for such a failure to disclose. Ledbetter v. Schacht, 395 S.W.3d 130, 2012 Tenn. App. LEXIS 604 (Tenn. Ct. App. Aug. 31, 2012), appeal denied, — S.W.3d —, 2013 Tenn. LEXIS 23 (Tenn. Jan. 9, 2013).

Trial court properly granted a seller and a licensed affiliate broker summary judgment because the broker did not have knowledge of “adverse facts” within the meaning of the Tennessee Residential Property Disclosure Act and the Tennessee Real Estate Broker License Act of 1973; nothing in the record created a genuine issue of material fact as to whether the broker knew that a cabin had been left vacant without a roof, doors, windows, or a deck or was otherwise exposed to the elements. Haynes v. Lunsford, — S.W.3d —, 2017 Tenn. App. LEXIS 69 (Tenn. Ct. App. Feb. 2, 2017).

2. Sellers Not Liable.

Because the buyers were aware of the right-of-way by their observation of the railroad, as well as receiving notice through the sellers'  deed and their own deed, the sellers were not liable under the Tennessee Residential Property Disclosure Act. Dixon v. Chrisco, — S.W.3d —, 2018 Tenn. App. LEXIS 527 (Tenn. Ct. App. Sept. 7, 2018).

66-5-209. Exempt property transfers.

The following are specifically excluded from this part:

  1. Transfers pursuant to court order including, but not limited to, transfers ordered by a court in the administration of an estate, transfers pursuant to a writ of execution, transfers by foreclosure sale, transfers by a trustee in bankruptcy, transfers by eminent domain and transfers resulting from a decree of specific performance;
  2. Transfers to a beneficiary of a deed of trust by a trustor or successor in interest who is in default; transfers by a trustee under a deed of trust pursuant to a foreclosure sale; or transfers by a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a foreclosure sale under a deed of trust or has acquired the real property by a deed in lieu of foreclosure;
  3. Transfers by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship or trust;
  4. Transfers from one (1) or more co-owners solely to one (1) or more co-owners. This subdivision (4) is intended to apply and only does apply in situations where ownership is by a tenancy by the entirety, a joint tenancy or a tenancy in common and the transfer will be made from one (1) or more of the owners to another owner or co-owners holding property either as a joint tenancy, tenancy in common or tenancy by the entirety;
  5. Transfers made solely to any combination of a spouse or a person or persons in the lineal line of consanguinity of one (1) or more of the transferors;
  6. Transfers between spouses resulting from a decree of divorce or a property settlement stipulation;
  7. Transfers made by virtue of the record owner's failure to pay any federal, state or local taxes;
  8. Transfers to or from any governmental entity of public or quasi-public housing authority or agency;
  9. Transfers involving the first sale of a dwelling provided that the builder offers a written warranty;
  10. Any property sold at public auction;
  11. Any transfer of property where the owner has not resided on the property at any time within three (3) years prior to the date of transfer; and
  12. Any transfer from a debtor in a chapter 7 or a chapter 13 bankruptcy to a creditor or third party by a deed in lieu of foreclosure or by a quitclaim deed.

Acts 1994, ch. 828, § 9; 2000, ch. 771, §§ 2-4.

66-5-210. Disclosure form.

Following is the form prescribed by the general assembly which is necessary to comply with this part. The form used does not have to be the one included in this section, but it is the intent of the general assembly that any such form includes all items contained in the form below with all acknowledgement provisions of such form:

Tennessee Residential Property Condition Disclosure The Tennessee Residential Property Disclosure Act states that anyone transferring title to residential real property must provide information about the condition of the property. This completed form constitutes that disclosure by the seller. This is not a warranty, or a substitute for any professional inspections or warranties that the purchasers may wish to obtain.  Buyers and sellers should be aware that any sales agreement executed between the parties will supersede this form as to any obligations on the part of the seller to repair items identified below and/or the obligation of the buyer to accept such items “as is.” Instructions to the Seller: Complete this form yourself and answer each question to the best of your knowledge. If an answer is an estimate, clearly label it as such. The seller hereby authorizes any agent representing any party in this transaction to provide a copy of this statement to any person or entity in connection with any actual or anticipated sale of the subject property. Property Address  City  Seller's Name(s)  Property Age  Date Seller Acquired the Property  Do You Occupy the Property?  If Not Owner-Occupied, How Long Has It Been Since the Seller Occupied the Property?  The property is a   site-built home   nonsite built-home (Check the one that applies) A. The Subject Property Includes the Items Checked Below:  Range  Oven  Microwave  Dishwasher  Garbage Disposal  Trash Compactor  Water Softener  220 Volt Wiring  Washer/Dryer Hookups  Central Heating  Heat Pump  Central Air Conditioning  Wall/Window Air Conditioning  Window Screens  Rain Gutters  Fireplace(s) (Number  )  Gas Starter for Fireplace  Smoke Detector/Fire Alarm  Burglar Alarm  Patio/Decking/Gazebo  Irrigation System  Sump Pump  Garage Door Opener(s) (Number of openers   )  Intercom  TV Antenna/Satellite Dish  Pool  Spa/Whirlpool Tub  Hot Tub  Sauna  Current Termite Contract  Access to Public Streets  Other   Other  Garage: Attached Not Attached Carport Water Heater:  Gas Solar Electric Water Supply: City Well Private Utility Other Waste Disposal: City Sewer Septic Tank Other Gas Supply: Utility Bottled Other Roof(s): Type   Age (approx.)  Other Items:  To the best of your knowledge, are any of the above NOT in operating condition?  YES  NO If YES, then describe (attach additional sheets if necessary): B. Are You (Seller) Aware of Any Defects/Malfunctions in Any of the Following? Interior Walls YES NO UNKNOWN Ceilings YES NO UNKNOWN Floors YES NO UNKNOWN Windows YES NO UNKNOWN Doors YES NO UNKNOWN Insulation YES NO UNKNOWN Plumbing YES NO UNKNOWN Sewer/Septic YES NO UNKNOWN Electrical System YES NO UNKNOWN Exterior Walls YES NO UNKNOWN Roof YES NO UNKNOWN Basement YES NO UNKNOWN Foundation YES NO UNKNOWN Slab YES NO UNKNOWN Driveway YES NO UNKNOWN Sidewalks YES NO UNKNOWN Central heating YES NO UNKNOWN Heat pump YES NO UNKNOWN Central air conditioning YES NO UNKNOWN If any of the above is/are marked YES, please explain:    C. Are You (Seller) Aware of Any of the Following? 1. Substances, materials or products which may be an environmental hazard such as, but not limited to: asbestos, radon gas, lead-based paint, fuel or chemical storage tanks and/or contaminated soil or water on the subject property? YES NO UNKNOWN 2. Features shared in common with adjoining land owners, such as walls, but not limited to, fences, and/or driveways, with joint rights and obligations for use and maintenance? YES NO UNKNOWN 3. Any authorized changes in roads, drainage or utilities affecting the property, or contiguous to the property? YES NO UNKNOWN 4. Any changes since the most recent survey of the property was done? YES NO UNKNOWN Most recent survey of the property:   (check here if unknown.)  5. Any encroachments, easements, or similar items that may affect your ownership interest in the property? YES NO UNKNOWN 6. Room additions, structural modifications or other alterations or repairs made without necessary permits? YES NO UNKNOWN 7. Room additions, structural modifications or other alterations or repairs not in compliance with building codes? YES NO UNKNOWN 8. Landfill (compacted or otherwise) on the property or any portion thereof? YES NO UNKNOWN 9. Any settling from any cause, or slippage, sliding or other soil problems? YES NO UNKNOWN 10. Flooding, drainage or grading problems? YES NO UNKNOWN 11. Any requirement that flood insurance be maintained on the property? YES NO UNKNOWN 12. Property or structural damage from fire, earthquake, floods or landslides? YES NO UNKNOWN If yes, has such damage been repaired?  13. Any zoning violations, nonconforming uses and/or violations of “setback” requirements? YES NO UNKNOWN 14. Neighborhood noise problems or other nuisances? YES NO UNKNOWN 15. Subdivision and/or deed restrictions or obligations? YES NO UNKNOWN 16. A Homeowners Association (HOA) which has any authority over the subject property? YES NO UNKNOWN Name of HOA:  HOA Address:  Monthly Dues:   Special Assessments:  17. Any “common area” (facilities such as, but not limited to, pools, tennis courts, walkways, or other areas co-owned in undivided interest with others)? YES NO UNKNOWN 18. Any notices of abatement or citations against the property? YES NO UNKNOWN 19. Any lawsuits or proposed lawsuits by or against the seller which affects or will affect the property? YES NO UNKNOWN 20. Is any system, equipment or part of the property being leased? YES NO UNKNOWN If yes, please explain, and include a written statement regarding payment information.  21. Any exterior wall covering of the structures covered with exterior insulation and finish systems (EIFS), also known as “synthetic stucco”? YES NO UNKNOWN If yes, has there been a recent inspection to determine whether the structure has excessive moisture accumulation and/or moisture related damage? (The Tennessee Real Estate Commission urges any buyer or seller who encounters this product to have a qualified professional inspect the structure in question for the preceding concern and provide a written report of the professional's finding.) YES NO UNKNOWN If yes, please explain. If necessary, please attach an additional sheet.    D. Certification: I/We certify that the information herein, concerning the real property located at  , is true and correct to the best of my/our knowledge as of the date signed. Should any of these conditions change prior to conveyance of title to this property, these changes will be disclosed in addendum to this document. Transferor (Buyer) Date Transferor (Buyer) Date Parties may wish to obtain professional advice and/or inspections of the property and to negotiate appropriate provisions in the purchase agreement regarding advice, inspections or defects. Transferee/Buyer's Acknowledgement: I/We understand that this disclosure statement is not intended as a substitute for any inspection, and that I/we have a responsibility to pay diligent attention to and inquire about those material defects which are evident by careful observation. I/We acknowledge receipt of a copy of this disclosure. Transferee (Buyer) Date Transferee (Buyer) Date  If the property being purchased is a condominium, the transferee/buyer is hereby given notice that the transferee/buyer is entitled, upon request, to receive certain information regarding the administration of the condominium from the developer or the condominium association, as applicable, pursuant to Tennessee Code Annotated, § 66-27-502.

Click to view form.

Acts 1994, ch. 828, § 10; 1998, ch. 727, § 1; 2000, ch. 771, § 5; 2008, ch. 766, § 2.

Law Reviews.

The Hazards of Taxing Contaminated Properties: Owners Beware! (Darlene Marsh, Byron Taylor and Andy Raines), 37 No. 5 Tenn. B.J. 21 (2001).

Collateral References.

Landlord's liability for injury or death of tenant's child from lead paint poisoning. 19 A.L.R.5th 405.

66-5-211. Disclosure of impact fees or adequate facilities taxes — Definitions.

  1. In transfers involving the first sale of a dwelling, the owner of residential property shall furnish to the purchaser a statement disclosing the amount of any impact fees or adequate facilities taxes paid to any city or county on any parcel of land subject to transfer by sale, exchange, installment land sales contract, or lease with an option to buy.
  2. For the purpose of this section, unless the context otherwise requires:
    1. “Adequate facilities tax” means any privilege tax that is a development tax, by whatever name, imposed by a county or city, pursuant to any act of general or local application, on engaging in the act of development;
    2. “Development” means the construction, building, reconstruction, erection, extension, betterment, or improvement of land providing a building or structure, or the addition to any building or structure or any part of any building or structure that provides, adds to, or increases the floor area of a residential or nonresidential use; and
    3. “Impact fee” means a monetary charge imposed by a county or municipal government pursuant to any act of general or local application, to regulate new development on real property. The amount of impact fees are related to the costs resulting from the new development and the revenues for this fee are earmarked for investment in the area of the new development.

Acts 2005, ch. 171, § 1.

66-5-212. Disclosure of known percolation tests or soil absorption rates — Disclosure of foundation move — Disclosure of presence of sinkhole.

  1. In addition to any other disclosure required by this part, the seller shall, prior to entering into a contract with a buyer, disclose in the contract itself or in writing, including acknowledgement of receipt, the presence of any known exterior injection well and the results of any known percolation test or soil absorption rate performed on the property that is determined or accepted by the department of environment and conservation.
  2. Prior to entering into a contract with a buyer on or after May 20, 2009, the seller shall, where such information is known to the seller, also disclose in the same manner whether any single family residence located on the property has been moved from an existing foundation to another foundation.
    1. In addition to any other disclosure required by this part, the seller shall, prior to entering into a contract with a buyer, disclose in the contract or in writing, including acknowledgment of receipt, the presence of a known sinkhole on the property.
    2. For purposes of this section, “sinkhole”:

Means a subterranean void created by the dissolution of limestone or dolostone strata resulting from groundwater erosion, causing a surface subsidence of soil, sediment, or rock; and

Is indicated through the contour lines on the property's recorded plat map.

Acts 2006, ch. 699, § 1; 2007, ch. 244, § 1; 2009, ch. 231, § 1; 2015, ch. 262, § 1.

Compiler's Notes Acts 2015, ch. 262, § 2 provided that the act, which added (c), shall apply to any contract entered into on or after July 1, 2015.

Amendments. The 2015 amendment added (c).

Effective Dates. Acts 2015, ch. 262, § 2. July 1, 2015.

66-5-213. Disclosure requirement where property is located in a planned unit development.

  1. As used in this section, unless the context otherwise requires:
    1. “Bylaws” mean guidelines for the operation of a homeowner's association that define the duties of the various offices of the board of directors, the terms of the directors, the membership's voting rights, required meetings and notices of meetings and the principal office of the association, as well as other specific items that are necessary to run the homeowner's association as a business;
    2. “Planned unit development (PUD)” means an area of land, controlled by one (1) or more landowners, to be developed under unified control or unified plan of development for a number of dwelling units, commercial, educational, recreational or industrial uses, or any combination of these, the plan for which does not correspond in lot size, bulk or type of use, density, lot coverage, open space or other restrictions to the existing land use regulations; and
    3. “Restrictive covenant” means any written provision that places limitations or conditions on some aspect of use of the property, such as size, location or height of structures, materials to be used in structure exterior, activities carried out on the property or restrictions on future subdivision or land development.
  2. In addition to any other disclosures required in this part with regard to transfers described in § 66-5-201, the owner of the residential property shall, prior to entering a contract with a buyer, disclose in the contract itself or in writing, including acknowledgement, if the property is located in a PUD, and make available to the buyer a copy of the development's restrictive covenants, homeowner bylaws and master deed upon request.

Acts 2009, ch. 112, § 1.

Chapter 6
Tennessee Coordinate System

66-6-101. Designation of geodetic survey system.

  1. The most recent system of plane coordinates which has been established by the United States Department of Commerce, National Oceanic and Atmospheric Administration's National Geodetic Survey, based on the National Spatial Reference System, and known as the State Plane Coordinate System, for defining and stating the geographic positions or locations of points on the surface of the earth within the State of Tennessee shall hereafter be known as the Tennessee State Plane Coordinate System.
  2. The system of plane coordinates, known as the North American Datum of 1983, which has been established by the United States Department of Commerce, National Oceanic and Atmospheric Administration's National Geodetic Survey, formerly the United States Coast and Geodetic Survey, for defining and stating the geographic positions or locations of points on the surface of the earth within this state is hereafter to be known and designated as the Tennessee Coordinate System of 1983.
  3. The system of plane coordinates which was established in 1927 by the United States Coast and Geodetic Survey for defining and stating the positions or locations of points on the surface of the earth within this state is hereafter to be known and designated as the Tennessee Coordinate System of 1927.
  4. For the purpose of the use of either system, this state has one (1) zone as defined by the National Geodetic Survey.
  5. After December 31, 2022, the “Tennessee State Plane Coordinate System” is the sole system recognized and utilized in Tennessee for the purposes of this chapter. Any use prior to December 31, 2022, may continue to use the Tennessee Coordinate System of 1927 or the Tennessee Coordinate System of 1983 in its applications relative to redistricting.

Acts 1991, ch. 42, § 2; 2019, ch. 213, § 1.

Compiler's Notes. Former §§ 66-6-10166-6-107 (Acts 1947, ch. 179, §§ 1-6); C. Supp. 1950, §§ 1034.17-1034.22 (Williams, §§ 630.35-630.40), T.C.A. (orig. ed.), §§ 64-601 — 64-607), concerning the Tennessee system of coordinates, was repealed by Acts 1991, ch. 42, § 8.

Amendments. The 2019 amendment rewrote (a) and (b) which read: “(a)  The system of plane coordinates, known as the North American Datum of 1983, which has been established by the national ocean survey/national geodetic survey, formerly the United States coast and geodetic survey, for defining and stating the geographic positions or locations of points on the surface of the earth within this state is hereafter to be known and designated as the ‘Tennessee Coordinate System of 1983.’“(b)  The system of plane coordinates which was established in 1927 by the United States coast and geodetic survey for defining and stating the positions or locations of points on the surface of the earth within this state is hereafter to be known and designated as the ‘Tennessee Coordinate System of 1927.’”; added present (c) and redesignated former (c) and (d) as present (d) and (e), respectively; in present (d), substituted “this state” for “the state” and substituted “National Geodetic Survey” for “national ocean survey” at the end; and, in present (e), substituted “After December 31, 2022, the ‘Tennessee State Plane Coordinate System’ is” for “After December 31, 1992, the Tennessee Coordinate System of 1983 shall be” at the beginning of the first sentence, and, in the last sentence, substituted “Any use prior to December 21, 2022” for “Any computer software designed prior to such date” and inserted “or the Tennessee Coordinate System of 1983”.

Effective Dates. Acts 2019, ch. 213, § 7. April 23, 2019.

Cross-References. County meridian lines, §§ 8-12-1108-12-114.

66-6-102. Coordinates used.

The plane coordinate values for a point on the earth's surface, used to express the geographic position or location of such point, shall consist of two (2) distances expressed in United States survey feet and decimals of a foot when using the Tennessee Coordinate System of 1927, expressed in either United States survey feet and decimals of a foot or meters and decimals of a meter when using the Tennessee Coordinate System of 1983, and expressed in either United States survey feet and decimals of a foot or meters and decimals of a meter when using the Tennessee State Plane Coordinate System. When the values are expressed in United States survey feet, they shall be used as the standard foot for the Tennessee State Plane Coordinate System. One of these distances, to be known as the “East X-coordinate,” shall give the distance east of the Y axis; the other, to be known as the “North Y-coordinate,” shall give the distance north of the X axis. The Y axis of any zone shall be parallel with the central meridian of that zone. The X axis of any zone shall be at right angles to the central meridian of that zone.

Acts 1991, ch. 42, § 3; 2019, ch. 213, § 2.

Compiler's Notes. Former §§ 66-6-10166-6-107 (Acts 1947, ch. 179, §§ 1-6); C. Supp. 1950, §§ 1034.17-1034.22 (Williams, §§ 630.35-630.40), T.C.A. (orig. ed.), §§ 64-601 — 64-607), concerning the Tennessee system of coordinates, was repealed by Acts 1991, ch. 42, § 8.

Amendments. The 2019 amendment rewrote the section which read: “The plane coordinate values for a point on the earth's surface, used to express the geographic position or location of such point, shall consist of two (2) distances expressed in United States survey feet and decimals of a foot when using the Tennessee Coordinate System of 1927, and expressed in meters and decimals of a meter when using the Tennessee Coordinate System of 1983. Coordinate values may also be expressed in United States survey feet and decimals of a foot for the Tennessee Coordinate System of 1983 as specified in § 66-6-103(c). One (1) of these distances, to be known as the ‘x-coordinate,’ shall give the position in an east-and-west direction; the other, to be known as the ‘y-coordinate,’ shall give the position in a north-and-south direction. These coordinates shall be made to depend upon and conform to plane rectangular coordinate values for certain monumented points of the North American horizontal geodetic control network as published by the national ocean survey/national geodetic survey, formerly the United States coast and geodetic survey, or its successors, and whose plane coordinates have been computed on the systems defined in this chapter. Such monumented points of the North American horizontal geodetic control network shall be those existing or newly established in conformity with the standards of accuracy for first or second order geodetic surveying as prepared and published by the federal geodetic control committee (FGCC) of the United States department of commerce.”

Effective Dates. Acts 2019, ch. 213, § 7. April 23, 2019.

66-6-103. Technical definitions of systems.

  1. For purposes of more precisely defining the Tennessee Coordinate System of 1927, the following definition by the United States coast and geodetic survey, now the national ocean survey/national geodetic survey, is adopted:

    The “Tennessee Coordinate System of 1927” is a Lambert conformal conic projection of the Clarke spheroid of 1866, having standard parallels at north latitudes 35° 15' and 36° 25', along which parallels the scale shall be exact. The origin of coordinates is at the intersection of the meridian 86° 00' west of Greenwich and the parallel 34° 40' north latitude. This origin is given the coordinates: x (easting) = two million feet (2,000,000') and y (northing) = one hundred thousand feet (100,000').

  2. For purposes of more precisely defining the Tennessee Coordinate System of 1983, the following definition by the national ocean survey/national geodetic survey is adopted:

    The “Tennessee Coordinate System of 1983” is Lambert conformal conic projection of the North American Datum of 1983, having standard parallels at north latitudes 35° 15' and 36° 25', along which parallels the scale shall be exact. The origin of coordinates is at the intersection of the meridian 86° 00' west of Greenwich and the parallel 34° 20' north latitude. This origin is given the coordinates: x (easting) = six hundred thousand meters (600,000 m.) and y (northing) = zero meters (0 m.).

  3. The definition of the “U.S. Survey Foot” is exactly 1,200/3,937 meters.

Acts 1991, ch. 42, § 4; 2010, ch. 1139, § 2.

Compiler's Notes. Former §§ 66-6-10166-6-107 (Acts 1947, ch. 179, §§ 1-6); C. Supp. 1950, §§ 1034.17-1034.22 (Williams, §§ 630.35-630.40), T.C.A. (orig. ed.), §§ 64-601 — 64-607), concerning the Tennessee system of coordinates, was repealed by Acts 1991, ch. 42, § 8.

66-6-104. Proximity to horizontal control monuments required for use of coordinates.

Unless established by Global Navigation Satellite Systems (GNSS) methods, no coordinates based on the systems of plane coordinates defined in this chapter, purporting to define the position of a point on a land boundary, shall be presented to be recorded in any public land records or deed records unless such point is within ten kilometers (10 km) of a horizontal control monument existing or newly established in conformity with the standards of accuracy for first or second order geodetic surveying as prepared and published by the federal geodetic control committee of the United States department of commerce. Standards of the federal geodetic control committee or its successor in force on the date of such survey shall apply. The accuracy limitations described in this section may be modified by any governmental agency to meet local conditions.

Acts 1991, ch. 42, § 5; 2019, ch. 213, § 3.

Compiler's Notes. Former §§ 66-6-10166-6-107 (Acts 1947, ch. 179, §§ 1-6); C. Supp. 1950, §§ 1034.17-1034.22 (Williams, §§ 630.35-630.40), T.C.A. (orig. ed.), §§ 64-601 — 64-607), concerning the Tennessee system of coordinates, was repealed by Acts 1991, ch. 42, § 8.

Amendments. The 2019 amendment, in the first sentence, added “Unless established by Global Navigation Satellite Systems (GNSS) methods,” at the beginning, substituted “the systems of plane coordinates defined in this chapter,” for “either Tennessee coordinate system”, and substituted “ten kilometers (10 km)” for “five kilometers (5 km)”.

Effective Dates. Acts 2019, ch. 213, § 7. April 23, 2019.

66-6-105. Description of location of survey stations or land boundary corners — Reliance on system not required.

  1. For purposes of describing the location of any survey station or land boundary corner in this state, it is considered a complete, legal, and satisfactory description of such location to give the position of such survey station or land boundary corner on any system of plane coordinates defined in this chapter; provided, that any person choosing to use a system of plane coordinates to describe any such survey station or land boundary after December 31, 1992, shall use the Tennessee Coordinate System of 1983 and after December 31, 2022, shall use the Tennessee State Plane Coordinate System.
  2. Nothing contained in this chapter requires a purchaser or mortgagee of real property to rely wholly on a property description, any part of which depends exclusively upon any Tennessee coordinate system.

Acts 1991, ch. 42, § 6; 2019, ch. 213, § 4.

Compiler's Notes. Former §§ 66-6-10166-6-107 (Acts 1947, ch. 179, §§ 1-6); C. Supp. 1950, §§ 1034.17-1034.22 (Williams, §§ 630.35-630.40), T.C.A. (orig. ed.), §§ 64-601 — 64-607), concerning the Tennessee system of coordinates, was repealed by Acts 1991, ch. 42, § 8.

Amendments. The 2019 amendment, in (a), substituted “it is considered” for “it shall be considered” and “any system” for “either system” and added “and after December 31, 2022, shall use the Tennessee State Plane Coordinate System” at the end; and, in (b), substituted “this chapter requires” for “this chapter shall require” and substituted “any Tennessee coordinate system” for “either Tennessee coordinate system” at the end.

Effective Dates. Acts 2019, ch. 213, § 7. April 23, 2019.

66-6-106. Use of term system on documents — Designation of system used.

  1. The terms Tennessee Coordinate System of 1927, Tennessee Coordinate System of 1983, or Tennessee State Plane Coordinate System must not be used on any map, report of survey, or other document, unless the coordinates contained within such document are based on the Tennessee coordinate system as defined in this chapter.
  2. Any document containing coordinates based upon a system of plane coordinates defined in this chapter shall contain a statement that indicates whether the Tennessee Coordinate System of 1927, the Tennessee Coordinate System of 1983, or the Tennessee State Plane Coordinate System was used.
  3. This chapter must not be construed to prohibit the appropriate use of other datums and other geodetic reference networks.

Acts 1991, ch. 42, § 7; 2019, ch. 213, § 5.

Compiler's Notes. Former §§ 66-6-10166-6-107 (Acts 1947, ch. 179, §§ 1-6); C. Supp. 1950, §§ 1034.17-1034.22 (Williams, §§ 630.35-630.40), T.C.A. (orig. ed.), §§ 64-601 — 64-607), concerning the Tennessee system of coordinates, was repealed by Acts 1991, ch. 42, § 8.

Amendments. The 2019 amendment substituted “The terms Tennessee Coordinate System of 1927, Tennessee Coordinate System of 1983, or Tennessee State Plane Coordinate System must not” for “The term ‘Tennessee Coordinate System of 1927’ or ‘Tennessee Coordinate System of 1983’ shall not” in (a); in (b), substituted “a system” for “either system” and substituted “, the Tennessee Coordinate System of 1983, or the Tennessee State Plane Coordinate System” for “or the Tennessee Coordinate System of 1983” near the end; and added (c).

Effective Dates. Acts 2019, ch. 213, § 7. April 23, 2019.

Chapter 7
Leases

66-7-101. Writing required for long term leases — Authentication and registration.

Leases for more than three (3) years shall be in writing, and, to be valid against any person other than the lessor, the lessor's heirs and devisees, and persons having actual notice thereof, shall be proved and registered as provided in chapters 22-24 of this title.

Code 1858, § 2002 (deriv. Acts 1841-1842, ch. 12, § 4); Shan., § 3663; Code 1932, § 7191; T.C.A. (orig. ed.), § 64-701.

Cross-References. Assignment of interest in lease, § 66-26-116.

Landlord not liable for tax on leasehold, § 67-5-2102.

Landlord's crop lien, title 66, ch. 12.

Minimum health standards for rental property, title 68, ch. 111.

Statute of frauds, § 29-2-101.

Uniform Residential Landlord and Tenant Act, title 66, ch. 28.

Writings eligible for registration, § 66-24-101.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-404, 8-407, 8-432.

Tennessee Jurisprudence, 11 Tenn. Juris., Evidence, § 130; 13 Tenn. Juris., Frauds, Statute of, § 16; 17 Tenn. Juris., Landlord and Tenant, § 6.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Writing and Registration — Necessity.

Leases of land for more than one year from the inception of its performance must be in writing under § 29-2-101(a)(4), and if for more than three years must be registered under this section in order to be valid as against third parties without actual notice thereof, but a verbal lease for one year to begin in the future, and to be performed within three years from the making thereof, may be valid. Hayes v. Arrington, 108 Tenn. 494, 68 S.W. 44, 1901 Tenn. LEXIS 50 (1902).

2. Unrecorded Leases — Status.

An unrecorded junior lease is inferior to an unrecorded senior lease, but the junior lease, if recorded, may become fastened upon the property and defeat the unrecorded senior lease. Langos v. Jacobs, 7 Tenn. App. 206, 1928 Tenn. App. LEXIS 30 (1928).

3. Assignment of Rents.

An assignment of future rents to accrue within a period of three years is not required to be registered. Schmid v. Baum's Home of Flowers, Inc., 162 Tenn. 439, 37 S.W.2d 105, 1930 Tenn. LEXIS 108, 75 A.L.R. 261 (1931).

Collateral References.

Lease for term of years, or contract therefor, as violating rule against perpetuities. 66 A.L.R.2d 733.

Parol agreement for written lease for years as within statute of frauds. 58 A.L.R. 1020.

Parol lease for term of a year to commence in future as within statute of frauds. 111 A.L.R. 1465.

Validity of lease or sublease subscribed by one of the parties only. 46 A.L.R.3d 619.

66-7-102. Effect of injury to buildings.

  1. Where any building which is leased or occupied is destroyed or so injured by the elements, or any other cause, as to be untenantable and unfit for occupancy, and no express agreement to the contrary has been made in writing, the lessee or occupant may, if the destruction or injury occurred without fault or neglect by the lessee, surrender possession of the premises, without liability to the lessor or owner for rent for the time subsequent to the surrender.
  2. A covenant or promise by the lessee to leave or restore the premises in good repair shall not have the effect to bind the lessee to erect or pay for such buildings as may be so destroyed, unless in respect of the matter of loss or destruction there was neglect or fault on the lessee's part, or unless the lessee has expressly stipulated in writing to be so bound.

Code 1932, §§ 7619, 7620; T.C.A. (orig. ed.), §§ 64-702, 64-703.

Cross-References. Failure of tenant to maintain dwelling, § 66-28-506.

Fire or casualty damage, § 66-28-503.

Maintenance by landlord, § 66-28-304.

Maintenance by tenant, § 66-28-401.

Wrongful failure to supply essential services, § 66-28-502.

Law Reviews.

Avoiding Lease-Drafting Pitfalls (C. Dewees Berry IV), 19 No. 2 Tenn. B.J. 11 (1983).

NOTES TO DECISIONS

1. Effect of Section on Rental Notes.

This section permitting lessee to surrender premises in event of injury or destruction to premises as result of the elements becomes a part of all rental notes where notes on face show that they are given for rent of premises and such rental notes are nonnegotiable. Robbins v. Life Ins. Co., 169 Tenn. 507, 89 S.W.2d 340, 1935 Tenn. LEXIS 76, 104 A.L.R. 1376 (1935).

2. Lessee's Liability for Acts of Sublessee.

Lessee of building was liable to landlord when building was destroyed by fire purposely set by sub-lessee where under contract of lease on termination of lease the property was to be returned in a reasonably good state of repair “ordinary wear and tear and damages by fire and the elements” specifically excepted. Bishop v. Associated Transp., Inc., 46 Tenn. App. 644, 332 S.W.2d 696 (1959).

3. Lessor's Covenant to Rebuild.

This section provides an optional remedy of a tenant, not compulsory, and does not of itself relieve the lessor of a covenant to rebuild or replace. Evco Corp. v. Ross, 528 S.W.2d 20, 1975 Tenn. LEXIS 618 (Tenn. 1975).

The tenant may surrender the premises without restoration, which act does not of itself relieve the lessor of a covenant to rebuild or replace. Evco Corp. v. Ross, 528 S.W.2d 20, 1975 Tenn. LEXIS 618 (Tenn. 1975).

4. Termination of Lease.

Lessee properly terminated a lease and surrendered the leased property to the lessor and was not required to rebuild the motel facilities on the property that were destroyed by wildfires because any obligation to rebuild the motel was removed by statute and the parties did not contract otherwise. Johnson Real Estate L.P. v. Vacation Dev. Corp., — S.W.3d —, 2018 Tenn. App. LEXIS 323 (Tenn. Ct. App. June 12, 2018).

Collateral References.

Condition of premises within contemplation of provision of lease or statute for termination of lease in event of destruction of, or damage to, property as result of fire. 118 A.L.R. 106, 61 A.L.R.2d 1445.

Extent of lessee's obligation under covenant to surrender premises in prescribed condition of repair. 45 A.L.R. 28, 20 A.L.R. 782, 106 A.L.R. 1361, 20 A.L.R.2d 1339.

Fixtures, right to remove, as affected by renewal, or new lease without reservation of right to remove, and containing covenant to surrender in good condition. 110 A.L.R. 490.

Gasoline station, damage to, or destruction of, premises as terminating lease of. 83 A.L.R. 1442, 126 A.L.R. 1391.

Measure and elements of damages for lessee's breach of covenant as to repairs. 45 A.L.R.5th 251.

“Unavoidable casualty or accident,” what is, within exception in provision in lease as to tenant's duty to turn over premises in good condition. 20 A.L.R. 1101, 24 A.L.R. 1461.

What constitutes reasonably necessary use of the surface of the leasehold by a mineral owner, lessee, or driller under an oil and gas lease or drilling contract. 53 A.L.R.3d 16.

66-7-103. Maximum term of oil and gas leases.

    1. Any lease of oil or natural gas rights or any other conveyance of any kind separating such rights from the freehold estate of land shall expire at the end of ten (10) years from the date executed, unless, at the end of such ten (10) years, natural gas or oil is being produced from such land for commercial purposes. If, at any time after the ten-year period, commercial production of oil or natural gas is terminated for a period of six (6) months, all such rights shall revert to the owner of the estate out of which the leasehold estate was carved. No assignment or agreement to waive this subsection (a) shall be valid or enforceable.
    2. This subsection (a) shall not be construed to affect the validity or the expiration date of any lease or other instrument executed prior to March 16, 1939, nor shall it be construed to affect the validity or the expiration date of any lease, conveyance or other instrument insofar as it may convey underground natural gas storage rights, or otherwise separate such rights from the freehold estate, whenever executed.
    1. For a period of one (1) year after the ten-year period provided for in subsection (a) has expired, “production,” as used in subsection (a), includes the actual production of minerals under any lease hereof or by the owner of any mineral interest, or when operations are being conducted by any owner of a lease or mineral interest for injection, withdrawal, storage, or disposal of water, gas, or other fluid substances, or when rentals or royalties are being paid by the owner of such leases for the purpose of delaying or enjoying the use of exercise of the rights thereunder or when the same is being carried out on any tract with which such leasehold interest may be unitized or pooled for production purposes. During the one-year period provided for in this subsection (b), any act by the owner of any leasehold or mineral interest pursuant to or authorized by the instrument creating such interest shall be effective to continue in force all rights granted by such instrument, notwithstanding subsection (a).
    2. This subsection (b) applies to a drilling unit of no more than the number of acres provided for under the pooling clause of the lease and provided there is compliance with the rules of the Tennessee oil and gas board as set forth in paragraph 1040-2-4-01 of such rules (well spacing).

Acts 1939, ch. 89, §§ 1-3; C. Supp. 1950, § 7620.1 (Williams, § 7620.1); Acts 1963, ch. 69, § 1; 1978, ch. 945, §§ 1, 2; T.C.A. (orig. ed.), § 64-704.

Cross-References. Printed contract forms for products extracted from or beneath the earth, § 47-50-110.

Regulation of production, title 60, ch. 1.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-1112.

Tennessee Jurisprudence, 18 Tenn. Juris., Mines and Minerals, §§ 11, 13.

Law Reviews.

Duration of Oil and Gas Leases in Tennessee — Commentary on Section 66-7-103 of the Tennessee Code (Thomas B. Preston), 3 Mem. St. U.L. Rev. 13 (1972).

NOTES TO DECISIONS

1. Construction.

The language “revert to the owner of the estate out of which” indicates that the lease of oil and gas rights is carved from an estate that may not be the entire fee simple. Layne v. Baggenstoss, 640 S.W.2d 1, 1982 Tenn. App. LEXIS 383 (Tenn. Ct. App. 1982) (estate of mineral rights).

2. Necessary Parties.

In suit for declaratory judgment to effect that oil and gas lease had expired for failure to produce oil or gas on the land subject to the lease, it was necessary to join original lessees and party to whom one of the original lessees assigned his interest but it was not necessary to join each of some 522 individuals or entities who may have had some sort of subordinate interest because of assignments or subassignments on interests under the lease. David v. Coal Creek Mining & Mfg. Co., 224 Tenn. 636, 461 S.W.2d 29, 1970 Tenn. LEXIS 366 (1970).

66-7-104. Physically disabled persons' access to housing accommodations.

  1. Totally or partially blind persons and other physically disabled persons shall be entitled to full and equal access, as other members of the general public, to all housing accommodations offered for rent, lease or compensation in this state, subject to the conditions and limitations established by law and applicable to all persons.
  2. “Housing accommodations” means any real property or portion thereof which is used to occupy or is intended, arranged or designed to be used or occupied, as the home, residence or sleeping place of one (1) or more human beings, but does not include any single family residence, the occupants of which rent, lease or furnish for compensation not more than one (1) room in the residence.
    1. Nothing in this section shall require any person renting, leasing, or providing for compensation any real property to modify such property in any way or manner or to provide a higher degree of care for a totally blind or partially blind person or other physically disabled person than for a person who is not blind or disabled.
      1. Notwithstanding subdivision (c)(1), any person renting, leasing, or providing for compensation any real property that is three (3) or more stories tall shall give priority in access to housing units on floors one (1) and two (2) of such property to physically disabled persons whose disability would prevent such persons from having reasonable access to units located on higher floors; provided, that the person shall not be required to seek out physically disabled occupants or forego occupancy of the unit for any period of time if a physically disabled occupant is not available. Nothing in this subdivision (c)(2) shall prevent the lessor from using or applying other factors in determining whether or not to rent to a disabled person.
      2. A violation of subdivision (c)(2)(A) is a Class C misdemeanor punishable only by a fine not to exceed fifty dollars ($50.00).
  3. Every totally blind or partially blind person who has a guide dog, or who obtains a guide dog, shall be entitled to full and equal access to all housing accommodations included within subsection (a) or any accommodations provided for in §§ 71-4-201, 71-4-202 and this section, and such person shall not be required to pay extra compensation for such guide dog, but shall be liable for any damages done to the premises by such animal.

Acts 1972, ch. 480, § 3; T.C.A., § 64-705; Acts 2005, ch. 215, § 1.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

66-7-105. Adult bookstores and movie houses — Leases unenforceable.

Hereby declared against public policy and unenforceable are all leases or rental contracts, whether or not in writing, on real estate or buildings which are used for the purpose of sale, display, distribution or exhibition of obscene live performances or obscene material of any other kind including, but not limited to, the business of operating a store or house for the sale, or the commercial display, distribution or exhibition of an obscene book or magazine or other printed matter, motion pictures or peep shows. Occupants claiming the right to possess, use or occupy any building or real estate because of such an unenforceable lease or rental contract shall be immediately subject to eviction for unlawful detainer thereof in a suit by the owner of the building or real estate or by the state or by the county or by the incorporated municipality in which the building or real estate is located. Any person, firm, partnership or corporation that knowingly leases or rents any real estate or building to any person, firm, partnership or corporation for such purpose shall not have standing to use the courts or legal processes to enforce such lease or rental contract or to collect rentals or any other consideration because of such an unenforceable lease or rental contract.

Acts 1973, ch. 184, § 2; T.C.A., § 64-706; Acts 1996, ch. 1071, § 1.

Compiler's Notes. Acts 1996, ch. 1071, § 2 provided that this section shall apply to leases or rental contracts to which this section applies, entered into or renewed on or after May 15, 1996.

66-7-106. Leasing to blind persons.

  1. Any legally blind person in this state whose loss of sight necessitates a guide dog for mobility purposes, which has been obtained from a recognized school of training for such purposes, may not be denied the right to lease an apartment or other types of dwellings as a consequence of having a guide dog.
  2. Because the guide dog is essential to the mobility of its master, no deposit may be required to be paid, with respect to the dog, by the legally blind person to the owner, manager, landlord or agent of any such attendance.
  3. No restrictions may be imposed upon the legally blind person regarding the whereabouts of the animal so long as its master is in attendance.
  4. Any owner, manager, landlord or agent who refuses to lease living space to any legally blind person because of a guide dog, or violates this section, commits a Class C misdemeanor.

Acts 1982, ch. 951, § 1; 1989, ch. 591, § 113.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

Physically disabled persons' access to housing accommodations, § 66-7-104.

66-7-107. Termination for knowing controlled substance or prostitution violations.

    1. An occupant's tenancy may be terminated where the premises or the area immediately surrounding the premises is knowingly used or occupied in whole or in part to violate § 39-13-513, § 39-13-515 or § 39-17-417.
    2. The identity of any person who provides evidence or other information that results in an eviction or other termination of residency pursuant to this section shall be kept confidential and shall not be made a public record by the law enforcement agency or the district attorney general.
  1. The district attorney general for the district in which the real property is located may serve personally upon the owner or landlord of the premises so used or occupied, or upon the owner's or landlord's agent, or may send by registered return receipt or certified return receipt mail, a written notice requiring the owner or landlord to inform such district attorney general in writing of the owner's or landlord's intent to diligently and in good faith seek the eviction of the tenants or occupants so using or occupying the premises. If the owner or landlord or the owner's or landlord's agent does not so inform such district attorney general in writing within five (5) days of receiving written notice or, having so done, does not in good faith diligently prosecute such eviction, the district attorney general may bring a proceeding under this section in general sessions court, specifically including any general sessions court designated as an environmental court, or circuit court for such eviction as though the district attorney general was the owner or landlord of the premises, and such proceeding shall have precedence over any similar proceeding thereafter brought by such owner or landlord or to a proceeding previously brought by such owner or landlord and not prosecuted diligently and in good faith. The person in possession of the property and the owner or landlord shall be made respondents in such a proceeding.
  2. A court granting relief pursuant to this section may order, in addition to any other costs provided by law, the payment by the respondent or respondents of reasonable attorney fees and the prepaid costs of the proceeding to the district attorney general. In such cases, multiple respondents are jointly and severally liable for any payment so ordered. Any costs collected shall be remitted to the office of the district attorney general, and any attorney fees collected shall be remitted to the general fund of the county where the proceeding occurred.
  3. A proceeding brought under this section for possession of the premises does not preclude the owner or landlord from recovering monetary damages from the tenants or occupants of such premises in a civil action.
  4. The owner or landlord of the real property is obligated to pay the costs required to physically remove the tenant's personal belongings from the rental property in compliance with an eviction order of the court in all eviction proceedings brought under this section by the district attorney general; such costs not to exceed two hundred dollars ($200) for each such eviction order.

Acts 1997, ch. 203, § 1; 1998, ch. 703, § 1; 1998, ch. 885, § 1; 1999, ch. 319, § 1; 2000, ch. 591, § 1; 2003, ch. 133, § 1.

Cross-References. Certified mail, § 1-3-111.

Confidentiality of public records, § 10-7-504.

66-7-108. Commercial lease disclosure statement — Remedies for misrepresentation.

  1. At the request of a prospective tenant, the owner of commercial or industrial real property where the commercial property space is one thousand five hundred square feet (1,500 sq. ft.) or less, and the industrial real property is five thousand square feet (5,000 sq. ft.) or less, shall furnish to such prospective tenant a signed disclosure statement detailing the extent to which such real property is understood by the owner to be in compliance with local and state fire, plumbing, and electrical codes for a building of the type under construction. If, at the time such disclosure is made, an item of information required to be disclosed is unknown or not available to the owner, the owner may state that such information is unknown.
  2. If the owner knowingly misrepresents information required to be disclosed by this section, the lessee's remedies, at the option of the lessee, for such misrepresentation on the disclosure statement shall be either:
    1. An action for actual damages suffered as a result of known defects existing in the property as of the date of execution of the lease. Any action brought under this subdivision (b)(1) shall be commenced within one (1) year from the date the lessee received the disclosure statement or the date of occupancy, whichever occurs first; or
    2. Termination of the lease.
  3. Nothing in this section shall affect other remedies at law or equity otherwise available against an owner in the event of an owner's intentional or willful misrepresentation of the condition of the subject property.

Acts 1999, ch. 122, §§ 1-3.

66-7-109. Notice of termination by landlord.

    1. Except as provided in this section, fourteen (14) days' notice by a landlord shall be sufficient notice of termination of tenancy for the purpose of eviction of a residential tenant, if the termination of tenancy is for one of the following reasons:
      1. Tenant neglect or refusal to pay rent that is due and is in arrears, upon demand;
      2. Damage beyond normal wear and tear to the premises by the tenant, members of the household, or guests; or
      3. The tenant or any other person on the premises with the tenant's consent willfully or intentionally commits a violent act or behaves in a manner which constitutes or threatens to be a real and present danger to the health, safety or welfare of the life or property of other tenants, the landlord, the landlord's representatives or other persons on the premises.
    2. If the notice of termination of tenancy is given for one of the reasons set out in subdivision (a)(1)(A) or (a)(1)(B) and the breach is remediable by repairs or the payment of rent or damages or otherwise and the tenant adequately remedies the breach prior to the date specified in the notice from the landlord, the rental agreement will not terminate. If substantially the same act or omission which constituted a prior noncompliance of which notice was given recurs within six (6) months, the landlord may terminate the rental agreement upon at least fourteen (14) days' written notice specifying the breach and the date of termination of the rental agreement.
  1. For all other defaults in the lease agreement, a thirty (30) day termination notice from the date such notice is given by the landlord shall be required for the purpose of eviction of a residential tenant.
  2. This section shall not apply to a tenancy where the rental period is for less than fourteen (14) days.
  3. Notwithstanding § 66-7-107 or this section to the contrary, three (3) days' notice by a landlord is sufficient notice of termination of tenancy to evict a residential tenant in a housing authority created pursuant to title 13, chapter 20, part 4 or 5, or a residential tenant, who is not mentally or physically disabled, in a rental property located in any county not governed by the Uniform Residential Landlord and Tenant Act, compiled in chapter 28 of this title, if the tenant, in either case, or any other person on the premises with the tenant's consent, willfully or intentionally:
    1. Commits a violent act;
    2. Engages in any drug-related criminal activity; or
    3. Behaves in a manner that constitutes or threatens to be a real and present danger to the health, safety, or welfare of the life or property of other tenants, the landlord, the landlord's representatives, or other persons on the premises.
    1. If domestic abuse, as defined in § 36-3-601, is the underlying offense for which a tenancy is terminated, only the perpetrator may be evicted. The landlord shall not evict the victims, minor children under eighteen (18) years of age, or innocent occupants, any of whom occupy the subject premises under a lease agreement, based solely on the domestic abuse. Even if evicted or removed from the lease, the perpetrator shall remain financially liable for all amounts due under all terms and conditions of the present lease agreement.
    2. If a lease agreement is in effect, the landlord may remove the perpetrator from the lease agreement and require the remaining adult tenants to qualify for and enter into a new agreement for the remainder of the present lease term. The landlord shall not be responsible for any and all damages suffered by the perpetrator due to the bifurcation and termination of the lease agreement in accordance with this section.
    3. If domestic abuse, as defined in § 36-3-601, is the underlying offense for which tenancy could be terminated, the victim and all adult tenants shall agree, in writing, not to allow the perpetrator to return to the subject premises or any part of the community property, and to immediately report the perpetrator's return to the proper authority, for the remainder of the tenancy. A violation of such agreement shall be cause to terminate tenancy as to the victim and all other tenants.
    4. The rights under this section shall not apply until the victim has been judicially granted an order of protection against the perpetrator for the specific incident for which tenancy is being terminated, a copy of such order has been provided to the landlord, and the order:
      1. Provides for the perpetrator to move out or vacate immediately;
      2. Prohibits the perpetrator from coming by or to a shared residence;
      3. Requires that the perpetrator stay away from the victim's residence; or
      4. Finds that the perpetrator's continuing to reside in the rented or leased premises may jeopardize the life, health, and safety of the victim or the victim's minor children.
    5. Failure to comply with this section, or dismissal of an order of protection that allows application of this section, abrogates the rights provided to the victim, minor children, and innocent occupants under this section.
    6. The rights granted in this section shall not apply in any situation where the perpetrator is a child or dependent of any tenant.
    7. Nothing in this section shall prohibit the eviction of a victim of domestic abuse for non-payment of rent, a lease violation, or any violation of this chapter.
  4. Three-days' notice by a landlord is sufficient notice of termination of tenancy for the purpose of eviction of an unauthorized subtenant or other unauthorized occupant, if the termination of tenancy is for refusal by the unauthorized subtenant or other unauthorized occupant to vacate the premises.
  5. Nothing in this section shall apply to rental property located in any county governed by the Uniform Residential Landlord and Tenant.
  6. [Deleted by 2019 amendment.]

Acts 1999, ch. 451, §§ 1, 2; 2007, ch. 75, § 1; 2015, ch. 172, §§ 1, 2; 2016, ch. 895, § 2; 2018, ch. 960, § 1; 2019, ch. 236, § 2; 2020, ch. 528, § 2.

Compiler's Notes Acts 2015, ch. 172, § 3 provided that the act, which amended this section, shall apply to all residential leases entered into or renewed on or after April 16, 2015.

Acts 2016, ch. 895, § 2 purported to add new subsections (e) and (f); however, the text of  subsection (f) already existed as former subsection (e).

Acts 2018, ch. 960, § 4 provided that the act, which amended this section, shall apply to any rental agreement entered into or renewed on or after July 1, 2018.

Acts 2019, ch. 236, § 6 provided that the act shall apply to any rental agreement entered into, amended, or renewed on or after July 1, 2019, and any request for an exception to a landlord's policy that prohibits or limits animals on the property made on or after July 1, 2019.

Amendments. The 2015 amendment substituted “Except as provided in this section, fourteen (14) days’ notice” for “Fourteen (14) days’ notice” in (a); and rewrote (d), which read: “Notwithstanding the provisions of § 66-7-107 or this section to the contrary, three (3) days' notice by a landlord shall be sufficient notice of termination of tenancy for the purpose of eviction of a residential tenant in a housing authority created pursuant to title 13, chapter 20, part 4 or 5, if the tenant or any other person on the premises with the tenant's consent willfully or intentionally commits a violent act, or has engaged in any drug-related criminal activity, or behaves in a manner that constitutes or threatens to be a real and present danger to the health, safety or welfare of the life or property of other tenants, the landlord, the landlord's representatives or other persons on the premises.”

The 2016 amendment added (e) and (f).

The 2018 amendment added (g).

The 2019 amendment deleted former (g), which read: “(g)(1)  It is deemed to be material noncompliance and default by the tenant with the rental agreement, if the tenant pretends to have a disability-related need for an assistance animal in order to obtain an exception to a provision in a rental agreement that prohibits pets or establishes limits on the types of pets that tenants may possess on residential rental property. As used in this subsection (g), ‘assistance animal’ means an animal that works, provides assistance, or performs tasks for the benefit of a person with a disability, or provides emotional support that alleviates one (1) or more identified symptoms or effects of a person's disability.“(2)  The landlord may recover damages and obtain injunctive relief for any noncompliance and default by the tenant with the rental agreement under this subsection (g). The landlord may recover reasonable attorney's fees for breach of contract and nonpayment of rent as provided in the rental agreement.“(3)  A provision in a rental agreement that authorizes a landlord to hold a tenant in breach or default of the rental agreement in accordance with this subsection (g) is not unconscionable and is fully enforceable.”

The 2020 amendment added (f) and redesignated former (f) as (g).

Effective Dates. Acts 2015, ch. 172, § 3. April 16, 2015.

Acts 2016, ch. 895, § 3. July 1, 2016.

Acts 2018, ch. 960, § 4. July 1, 2018.

Acts 2019, ch. 236, § 6. July 1, 2019.

Acts 2020, ch. 528, § 3. July 1, 2020.

66-7-110. Rental termination rights for persons with physical disabilities.

A person with a physical disability shall be permitted to terminate a rental lease relative to such person's primary residence without incurring penalties or being obligated to pay rent after ceasing to occupy the property if such person is accepted as a resident of a public housing facility, unless the person's current landlord has made significant modifications to the residence to address issues of accessibility for persons with a physical disability. The person with a physical disability who terminates a rental lease pursuant to this section shall present written evidence of the public housing facility acceptance to the rental leaseholder and the rental leaseholder shall provide written acknowledgement of the lease termination to the lessee. For the purposes of this section, a “person with a physical disability” means a person who meets the standard for being “permanently and totally disabled” under § 71-4-1102.

Acts 2001, ch. 169, § 1; 2011, ch. 47, § 70.

Compiler's Notes. Acts 2011, ch. 47, § 107 provided that nothing in the legislation shall be construed to alter or otherwise affect the eligibility for services or the rights or responsibilities of individuals covered by the provision on the day before the date of enactment of this legislation, which was July 1, 2011.

Acts 2011, ch. 47, § 108 provided that the provisions of the act are declared to be remedial in nature and all provisions of the act shall be liberally construed to effectuate its purposes.

Cross-References. Aid to disabled persons, general financial assistance, title 71, ch. 4, part 11.

Aid to disabled persons, personal care services subsidies, title 71, ch. 4, part 12.

66-7-111. Exception to policy prohibiting or limiting, or requiring payment for, animals or pets for tenant or prospective tenant with disability who requires use of service animal or support animal.

  1. As used in this section:
    1. “Disability” means:
      1. A physical or mental impairment that substantially limits one (1) or more major life activities;
      2. A record of an impairment described in subdivision (a)(1)(A); or
      3. Being regarded as having an impairment described in subdivision (a)(1)(A);
    2. “Health care” means any care, treatment, service, or procedure to maintain, diagnose, or treat an individual's physical or mental condition;
    3. “Healthcare provider” means a person who is licensed, certified, or otherwise authorized or permitted by the laws of any state to administer health care in the ordinary course of business or practice of a profession;
    4. “Reliable documentation” means written documentation provided by:
      1. A healthcare provider with actual knowledge of an individual's disability;
      2. An individual or entity with a valid, unrestricted license, certification, or registration to serve persons with disabilities with actual knowledge of an individual's disability; or
      3. A caregiver, reliable third party, or a governmental entity with actual knowledge of an individual's disability;
    5. “Service animal” means a dog or miniature horse that has been individually trained to work or perform tasks for an individual with a disability; and
    6. “Support animal” means an animal selected to accompany an individual with a disability that has been prescribed or recommended by a healthcare provider to work, provide assistance, or perform tasks for the benefit of the individual with a disability, or provide emotional support that alleviates one (1) or more identified symptoms or effects of the individual's disability.
  2. A tenant or prospective tenant with a disability who requires the use of a service animal or support animal may request an exception to a landlord's policy that prohibits or limits animals or pets on the premises or that requires any payment by a tenant to have an animal or pet on the premises.
  3. A landlord who receives a request made under subsection (b) from a tenant or prospective tenant may ask that the individual, whose disability is not readily apparent or known to the landlord, submit reliable documentation of a disability and the disability-related need for a service animal or support animal. If the disability is readily apparent or known but the disability-related need for the service animal or support animal is not, then the landlord may ask the individual to submit reliable documentation of the disability-related need for a service animal or support animal.
  4. A landlord who receives reliable documentation under subsection (c) may verify the reliable documentation. However, nothing in this subsection (d) authorizes a landlord to obtain confidential or protected medical records or confidential or protected medical information concerning a tenant's or prospective tenant's disability.
  5. A landlord may deny a request made under subsection (b) if a tenant or prospective tenant fails to provide accurate, reliable documentation that meets the requirements of subsection (c), after the landlord requests the reliable documentation.
    1. It is deemed to be material noncompliance and default by the tenant with the rental agreement, if the tenant:
      1. Misrepresents that there is a disability or disability-related need for the use of a service animal or support animal; or
      2. Provides documentation under subsection (c) that falsely states an animal is a service animal or support animal.
    2. In the event of any violation under subdivision (f)(1), the landlord may terminate the tenancy and recover damages, including, but not limited to, reasonable attorney's fees.
  6. Notwithstanding any other law to the contrary, a landlord is not liable for injuries by a person's service animal or support animal permitted on the premises as a reasonable accommodation to assist the person with a disability pursuant to the Fair Housing Act, as amended, (42 U.S.C. §§ 3601 et seq.); the Americans with Disabilities Act of 1990 (42 U.S.C. §§ 12101 et seq.); Section 504 of the Rehabilitation Act of 1973, as amended, (29 U.S.C. § 701); or any other federal, state, or local law.
  7. Only to the extent it conflicts with federal or state law, this section does not apply to public housing units owned by a governmental entity.

Acts 2019, ch. 236, § 3.

Compiler's Notes. Acts 2019, ch. 236, § 6 provided that the act shall apply to any rental agreement entered into, amended, or renewed on or after July 1, 2019, and any request for an exception to a landlord's policy that prohibits or limits animals on the property made on or after July 1, 2019.

Effective Dates. Acts 2019, ch. 236, § 6. July 1, 2019.

Cross-References. Confidentiality of public records, § 10-7-504.

Chapter 8
Redemption of Real Estate Sold for Debt

66-8-101. Right of redemption — Waiver.

Real estate sold for debt shall be redeemable at any time within two (2) years after such sale:

  1. Where it is sold under execution;
  2. Where it is sold under any decree, judgment, or order of a court of chancery, whether founded upon a foreclosure of a mortgage, or deed of trust, or otherwise, unless, upon application of the complainant, the court orders that the property be sold on a credit of not less than six (6) months, nor more than two (2) years; and that, upon confirmation thereof by the court, no right of redemption or repurchase shall exist in the debtor or the debtor's creditor, but that the title of the purchaser shall be absolute; and
  3. Where it is sold under a deed of trust or mortgage without a judicial sentence, unless the right of redemption is expressly waived by the deed or mortgage; and a waiver of the “equity of redemption,” or a waiver using words of similar import, shall be sufficient to waive the right of redemption afforded by this section in all deeds of trust and mortgages, whether heretofore or hereafter existing.

Code 1858, § 2124 (deriv. Acts 1820, ch. 11, § 2; 1823, ch. 24, § 2; 1832, ch. 36, §§ 1, 2; 1833, ch. 47, § 2; 1842 (E.S.), ch. 6, § 3; 1857-1858, ch. 46, § 1); Shan., § 3811; mod. Code 1932, § 7736; mod. C. Supp. 1950, § 7736; T.C.A. (orig. ed.), § 64-801; Acts 1984, ch. 774, § 1; 1991, ch. 470, § 4.

Cross-References. Deed on redemption, § 26-5-113.

Injunction against sale under trust deed or mortgage, title 29, ch. 23, part 2.

Judgment by motion, title 25, ch. 3.

Redemption of property sold to collect on forfeiture of recognizance, § 40-11-215.

Right to redeem from sale to enforce vendor's lien, § 66-10-105.

Sale on execution, title 26, ch. 5.

Suspension of foreclosure proceeding for active military personnel, § 26-1-111.

Tax sales, title 67, ch. 5, part 25.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), §§ 277, 278, 476.

Tennessee Jurisprudence, 1 Tenn. Juris., Adverse Possession, § 25; 12 Tenn. Juris., Executions, § 48; 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, §§ 2, 5-17, 25, 29; 24 Tenn. Juris., Trusts and Trustees, § 19.

Law Reviews.

Judicial Notice in Tennessee (Robert Banks, Jr. and Elizabeth T. Collins), 21 Mem. St. U.L. Rev. 431 (1991).

Simple Real Estate Foreclosures Made Complex: The Byzantine Tennessee Process (John A. Walker, Jr.), 62 Tenn. L. Rev. 231 (1995).

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

Tennessee Homeowners' Post Foreclosure Auction Right to Cure Under 11 U.S.C. §§ 1322(b) and (c), 27 U. Mem. L. Rev. 453 (1997).

Waiver of Redemption Rights in Tennessee Mortgages: Discarding the Contracts Clause and Common-Law Concepts, 55 Tenn. L. Rev. 733 (1989).

Attorney General Opinions. Constitutionality of waiver provisions, OAG 84-122, 1984 Tenn. AG LEXIS 224 (4/11/84); OAG 84-267, 1984 Tenn. AG LEXIS 80 (9/21/84).

NOTES TO DECISIONS

1. Constitutionality.

Acts 1984, ch. 774, adding the language relating to the waiver of equity of redemption, is constitutional. Swift v. Kirby, 737 S.W.2d 271, 1987 Tenn. LEXIS 958 (Tenn. 1987).

2. Object and Purpose.

Manifestly, the leading object of the statute is to protect the rights and interests of the debtor, to secure to him the redemption of his land, if practicable, and, if not, then the extinction of as large an amount of his bona fide debts as possible or practicable. Woods v. McGavock, 18 Tenn. 133, 1836 Tenn. LEXIS 109 (1836); Pillow v. Langtree, 24 Tenn. 389, 1844 Tenn. LEXIS 89 (1844); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886).

3. Nature and Application.

Land purchased under execution sale subject to redemption is not held like mortgaged property as security, and loss before redemption is that of the purchaser. Hawkins v. Jamison, 8 Tenn. 83, 1827 Tenn. LEXIS 14 (1827).

The law of redemption is not a statute of limitation, but it is treated and classified as a law of property, and not of remedy. Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Trim v. McPherson, 47 Tenn. 15, 1869 Tenn. LEXIS 2 (1869).

The statutory right of redemption is not an equitable estate or equity of redemption in the sense of the equitable estate or equity of redemption remaining in a mortgagor, for the sale and conveyance under a judgment or decree vests the whole estate in the purchaser, and nothing remains to the debtor save the statutory right of redemption, which is strictly a right of repurchase. The statutory right, from the supposed analogy between it and the equity of redemption of a mortgagor, has been sometimes spoken of as an equitable right or equitable estate. Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886).

The right of redemption given by statute to both the judgment debtor and his judgment creditors (and creditors by debts acknowledged by deed as provided by statute) is not an equitable right, but a legal right to be exercised as prescribed by statute. Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886).

The statute is the only authority for redemption and for advancing bid. It is not a question of equity, but of strict law. Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

Right of redemption from execution sale is personal to debtor and does not depend upon actual ownership of land at time of sale since the right is predicated on the sale of the judgment debtor's interest in the land whatever that might be. Shea v. Rucker, 167 Tenn. 550, 72 S.W.2d 551, 1933 Tenn. LEXIS 65 (1933).

Where commissioner of insurance and banking (now commissioner of commerce and insurance) instituted proceedings against insurance company on the grounds that such company was insolvent but where there was no matured indebtedness of record against such company sale of real property of such insurance company under court authority was not a sale of real property for debt so as to subject such sale to the requirements of this section that such property be sold subject to a two year right of redemption since the proceedings under which such sale arose were by an officer of the state to enforce a police measure enacted for the protection of the insuring public and not by a debtor. State ex rel. Tobin v. Independent Life Ins. Co., 171 Tenn. 13, 100 S.W.2d 228, 1936 Tenn. LEXIS 54 (1937).

This section does not apply to strangers to title. State ex rel. Mathes v. Gilbreath, 181 Tenn. 498, 181 S.W.2d 755, 1944 Tenn. LEXIS 269 (1944).

The statutory right to redeem within two years from sale is not a statute of limitations but a law of property, it is not a cause of action at law or in equity, to perfect the right requires no action at law or in equity, but merely a tender of the money. Hunt v. Liles, 35 Tenn. App. 173, 243 S.W.2d 149, 1950 Tenn. App. LEXIS 132 (Tenn. Ct. App. 1950).

The right of redemption formerly allowed where property was sold for taxes was not an equity of redemption in the sense of the law of mortgages, because the whole estate passed by the sale to the purchaser leaving in the taxpayer a right to repurchase by tendering the money. Hunt v. Liles, 35 Tenn. App. 173, 243 S.W.2d 149, 1950 Tenn. App. LEXIS 132 (Tenn. Ct. App. 1950).

A necessary condition to the right to redeem is that there must have been a sale at which a purchaser took title and the redemptioners take through him. Cannon Mills, Inc. v. Spivey, 208 Tenn. 419, 346 S.W.2d 266, 1961 Tenn. LEXIS 301 (1961).

Where there was no valid sale no right to redeem existed as a result thereof. Cannon Mills, Inc. v. Spivey, 208 Tenn. 419, 346 S.W.2d 266, 1961 Tenn. LEXIS 301 (1961).

Where a bankruptcy debtor issued deeds to properties in lieu of foreclosure to obtain an extension of a scheduled foreclosure date, the recordation of the deeds after the debtor failed to satisfy the mortgage debt before expiration of the period of extension did not impermissibly clog the debtor's redemption rights under T.C.A. § 66-8-101, since there was no non-consensual sale of the properties for debt to implicate such rights, and the date of the foreclosure sale was extended rather than the maturity dates of notes. Webb Mtn, LLC v. Exec. Realty P'ship, L.P. (in re Webb Mtn, LLC), 414 B.R. 308, 2009 Bankr. LEXIS 399 (Bankr. E.D. Tenn. Feb. 11, 2009).

4. —Equity of Redemption.

The debtors' waiver of the equity of redemption in a deed of trust effectively waived the statutory right of redemption granted in title 66, chapter 8. Swift v. Kirby, 737 S.W.2d 271, 1987 Tenn. LEXIS 958 (Tenn. 1987); Nichols v. Springfield Production Credit Asso., 737 S.W.2d 277, 1987 Tenn. LEXIS 964 (Tenn. 1987).

The expression “equity of redemption” by common usage throughout the period from 1820 to date has been sufficiently pervasive to include within its meaning the statutory right of redemption granted in title 66, chapter 8 and its use fulfills the requirement of an express waiver required by T.C.A. § 66-8-101(3). Swift v. Kirby, 737 S.W.2d 271, 1987 Tenn. LEXIS 958 (Tenn. 1987).

No rule exists in Tennessee validating a waiver of the equity of redemption in a mortgage or deed of trust, the effectiveness of which is limited to the period between default and consummation of a foreclosure sale. Swift v. Kirby, 737 S.W.2d 271, 1987 Tenn. LEXIS 958 (Tenn. 1987).

5. Lands and Interests in Which Right Exists.

An equitable interest in land is subject to redemption as well as a legal interest. Freeland v. Harris, 35 Tenn. 264, 1855 Tenn. LEXIS 51 (1855); Beason v. Porterfield, 40 Tenn. 363, 1859 Tenn. LEXIS 100 (1859).

The right of redemption does not exist in the land of a decedent, sold under a decree of court for the payment of his debts. Love v. Williams, 70 Tenn. 226, 1879 Tenn. LEXIS 162 (1879); Maxwell v. Smith, 86 Tenn. 539, 8 S.W. 340, 1888 Tenn. LEXIS 7 (1888).

Where, in a divorce case, certain lands of the husband, for the purpose of providing alimony for the wife, are ordered to be sold, and the proceeds, or a certain proportion of them, are decreed to be paid to the wife as her alimony, no right of redemption exists, though the decree is silent as to exemption, because such sale was not for a debt. A decree for alimony becomes a debt only when it is for a specific sum to be paid by the husband as a personal obligation or liability. White v. Bates, 89 Tenn. 570, 15 S.W. 651, 1890 Tenn. LEXIS 80 (1891). See McBee v. McBee, 48 Tenn. 558, 1870 Tenn. LEXIS 111 (1870).

6. Strict Compliance — Necessity.

The right of redemption is like a defeasible sale, where the offer to repurchase must be made by the day limited, or the right is gone forever. In cases of sales with the liberty to repurchase, it is well settled that the condition must be strictly performed by the day, and so, the redemption must be made strictly within the prescribed time. Lowry v. McGhee, 16 Tenn. 242, 1835 Tenn. LEXIS 87 (1835); Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Hill v. Walker, 46 Tenn. 424, 1869 Tenn. LEXIS 77 (1869).

7. Exemption of Right from Judicial Sale — Extent.

The right of redemption is not subject to levy under execution or attachment at law. Wilson v. Carver, 5 Tenn. 90, 1817 Tenn. LEXIS 59 (1817); Hurt v. Reeves, 6 Tenn. 49, 6 Tenn. 50, 1818 Tenn. LEXIS 21 (1818); Combs v. Young's Widow & Heirs, 12 Tenn. 218, 1833 Tenn. LEXIS 57 (1833); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883).

Right or equity of redemption in land descended is not subject to execution by scire facias against the heirs. Combs v. Young's Widow & Heirs, 12 Tenn. 218, 1833 Tenn. LEXIS 57 (1833).

A judgment creditor, even where his execution has been returned nulla bona and unsatisfied, cannot by bill in chancery subject the judgment debtor's equity of redemption to the satisfaction of his judgment debt, because he is in condition to redeem the land, and in that way subject the equity of redemption to his debt. Herndon v. Pickard, 73 Tenn. 702, 1880 Tenn. LEXIS 201 (1880); Weakley v. Cockrill, 74 Tenn. 270, 1880 Tenn. LEXIS 246 (1880); Baxter v. Nashville & Hillsboro Tpk. Co., 78 Tenn. 488, 1882 Tenn. LEXIS 212 (1882); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Templeton v. Mason, 107 Tenn. 625, 65 S.W. 25, 1901 Tenn. LEXIS 117 (1901); Bryan v. Zarecor, 112 Tenn. 503, 81 S.W. 1252, 1903 Tenn. LEXIS 118 (1904).

Under § 29-12-109, the right of redemption may be subjected to sale by bill in chancery, filed by a general creditor of a nonresident debtor, because such creditor does not stand in a legal condition to exercise the right of redemption. Herndon v. Pickard, 73 Tenn. 702, 1880 Tenn. LEXIS 201 (1880); Weakley v. Cockrill, 74 Tenn. 270, 1880 Tenn. LEXIS 246 (1880); Baxter v. Nashville & Hillsboro Tpk. Co., 78 Tenn. 488, 1882 Tenn. LEXIS 212 (1882); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Templeton v. Mason, 107 Tenn. 625, 65 S.W. 25, 1901 Tenn. LEXIS 117 (1901); Bryan v. Zarecor, 112 Tenn. 503, 81 S.W. 1252, 1903 Tenn. LEXIS 118 (1904).

Where the debtor has fraudulently conveyed or disposed of his equity of redemption, a judgment creditor will not be compelled to pursue the statutory remedy by exercising the right of redemption, because that would impose upon him the necessity of filing a bill to remove a cloud from his title, or to set aside the fraudulent conveyance, but he may subject such equity of redemption to sale by attachment in chancery. Templeton v. Mason, 107 Tenn. 625, 65 S.W. 25, 1901 Tenn. LEXIS 117 (1901).

In absence of fraud in fact, judgment debtor's statutory right of redemption is a legal right which cannot be subjected to sale upon bill of judgment creditor whose execution has been returned nulla bona. Fite v. Jennings, 193 Tenn. 250, 246 S.W.2d 1, 1952 Tenn. LEXIS 289 (1952).

8. Conveyance and Descent of Right.

The right of redemption, whether existing under statute and in consequence of judicial or sheriff's sale, or under mortgage or deed of trust, is an estate or interest in the land, which may be sold, assigned, or devised, and it will descend to the debtor's heirs. The conveyance may be absolute or as a security for debt; and a conveyance of the entire interest or estate in the land, or of the land simply, without more, operates to convey only the right of redemption, and conveys such right, though it be not named by apt words. Elliot v. Patton, 12 Tenn. 9, 12 Tenn. 10, 1833 Tenn. LEXIS 4 (1833); Pillow v. Langtree, 24 Tenn. 389, 1844 Tenn. LEXIS 89 (1844); Jones v. Planters' Bank, 24 Tenn. 619, 1845 Tenn. LEXIS 147 (1845); Hepburn v. Kerr, 28 Tenn. 726, 1849 Tenn. LEXIS 115, 51 Am. Dec. 685 (1849); Huffaker v. Bowman, 36 Tenn. 89, 1856 Tenn. LEXIS 60 (1856); Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865); Toombs v. Palmer, 51 Tenn. 331, 1871 Tenn. LEXIS 170 (1871); Greenwald v. Roberts, 51 Tenn. 494, 1871 Tenn. LEXIS 193 (1871); Stark v. Cheathem, 2 Cooper's Tenn. Ch. 300 (1875); Bledsoe v. McCorry, 68 Tenn. 320, 1878 Tenn. LEXIS 16 (1878); Lincoln Sav. Bank v. Ridgway, 71 Tenn. 623, 1879 Tenn. LEXIS 123 (1879); Herndon v. Pickard, 73 Tenn. 702, 1880 Tenn. LEXIS 201 (1880); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

Under the federal bankruptcy laws, the right of redemption, existing in the bankrupt debtor, passes to the assignee in bankruptcy, and vests in him the right of redemption, and deprives the creditors of the bankrupt debtor of that right, except the right of a purchasing creditor to advance his own bid within 20 days. Pillow v. Langtree, 24 Tenn. 389, 1844 Tenn. LEXIS 89 (1844); Toombs v. Palmer, 51 Tenn. 331, 1871 Tenn. LEXIS 170 (1871).

A sale and conveyance of the land, or the equity of redemption by the debtor, by conveyance absolute or as security for the payment of debts, does not affect the right of his creditors to redeem from the purchaser at the execution sale, or of one creditor to redeem from another who has previously redeemed from the purchaser or from another previously redeeming creditor, for the debtor cannot release his equity of redemption so as to defeat his creditors' right to redeem. Carden v. Spilman, 1 Shan. 10 (1847); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

Heirs of deceased purchaser at execution sale in federal court who failed to record deed were entitled to redeem from purchaser at subsequent execution sale in state court where judgment debtor had assigned right of redemption to heirs. Shea v. Rucker, 167 Tenn. 550, 72 S.W.2d 551, 1933 Tenn. LEXIS 65 (1933).

An intervening judgment does not constitute a lien on land subsequently sold in satisfaction of a prior judgment, and in absence of fraud in fact, judgment debtor had absolute right to sell statutory right of redemption. Fite v. Jennings, 193 Tenn. 250, 246 S.W.2d 1, 1952 Tenn. LEXIS 289 (1952).

9. Purchasers of Land — Rights.

The legal title vests in the purchaser, with the right of possession, rents, and profits, by virtue of the sale and the deed from the sheriff, or by confirmation of the report of sale and the divestiture and vestiture of title in court sales, subject to be divested by redemption, and, following the redemption, the rents and profits must be accounted for to the original debtor only. Hawkins v. Jamison, 8 Tenn. 83, 1827 Tenn. LEXIS 14 (1827); Lowry v. McDurmott, 13 Tenn. 225 (1833); Kannon v. Pillow, 26 Tenn. 281, 1846 Tenn. LEXIS 127 (1846); Burk v. Bank of Tennessee, 40 Tenn. 686, 1859 Tenn. LEXIS 201 (1859); Farnsworth v. Howard, 41 Tenn. 215, 1860 Tenn. LEXIS 50 (1860); Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Hill v. Walker, 46 Tenn. 424, 1869 Tenn. LEXIS 77 (1869); Mabry v. Churchwell, 53 Tenn. 417, 1871 Tenn. LEXIS 375 (Tenn. Oct. 18, 1871); Shelton v. Sears, 57 Tenn. 303, 1872 Tenn. LEXIS 425 (1872); Bumpass v. Alexander, 57 Tenn. 542, 1873 Tenn. LEXIS 256 (1873); Miller v. Buchanan, 61 Tenn. 390, 1873 Tenn. LEXIS 190 (1873); Easley v. Tarkington, 64 Tenn. 592, 1875 Tenn. LEXIS 133 (1875); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883).

Before receiving the sheriff's deed, the execution purchaser has the equitable title only, with the right to call for the legal title, and, after receiving the deed, he has the legal title, but both the equitable title and legal title are subject to be divested by redemption. Hawkins v. Jamison, 8 Tenn. 83, 1827 Tenn. LEXIS 14 (1827); Harrell v. Harrell, 44 Tenn. 377, 1867 Tenn. LEXIS 59 (1867), overruled, Rose v. Rose, 53 Tenn. 533, 1871 Tenn. LEXIS 391 (1871); Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Mabry v. Churchwell, 53 Tenn. 417, 1871 Tenn. LEXIS 375 (Tenn. Oct. 18, 1871); Rose v. Rose, 53 Tenn. 533, 1871 Tenn. LEXIS 391 (1871); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881); Lunsford v. Jarrett, 79 Tenn. 192, 1883 Tenn. LEXIS 40 (1883).

10. Federal Courts — Application of Redemption Right.

The right of redemption, existing in judicial sales and foreclosure sales under mortgages and deeds of trust, is obligatory in the federal courts. The redemption in sales under mortgages and deeds of trust exists by implied contract under the law, unless it be expressly or by necessary implication cut off by the provisions of the instrument, and the federal courts must enforce the contract. Hepburn v. Kerr, 28 Tenn. 726, 1849 Tenn. LEXIS 115, 51 Am. Dec. 685 (1849); Brine v. Hartford Fire Ins. Co., 96 U.S. 627, 24 L. Ed. 858, 1877 U.S. LEXIS 1707 (1877); Swift v. Smith, 102 U.S. 442, 26 L. Ed. 193, 1880 U.S. LEXIS 2052 (Tenn. Nov. 13, 1880); Hammock v. Loan & Trust Co., 105 U.S. 77, 26 L. Ed. 1111, 1881 U.S. LEXIS 2094 (1881); Burley v. Flint, 105 U.S. 247, 26 L. Ed. 986, 1881 U.S. LEXIS 2113 (1881); Mason v. Northwestern Mut. Life Ins. Co., 106 U.S. 163, 1 S. Ct. 165, 27 L. Ed. 129, 1882 U.S. LEXIS 1527 (1882).

Where the right of redemption is wrongly cut off by the decree of the federal court, a bill of review will lie to reverse such decree, and so will an appeal, but a bill of review, filed after the expiration of the redemption period, without any tender of the redemption money within such time, and without any such tender made in and accompanying the bill, seeking to let the original decree stand, and to let the sale stand, but seeking a declaration of the court that the order foreclosing the right of redemption be reversed, will not avail anything. Burley v. Flint, 105 U.S. 247, 26 L. Ed. 986, 1881 U.S. LEXIS 2113 (1881).

11. Impairment of Contract Obligation.

A statute which gives time to redeem land which right did not previously exist in the debtor impairs obligation of a preexisting contract. Greenfield v. Dorris, 33 Tenn. 548, 1853 Tenn. LEXIS 84 (1853); Lake County v. Morris, 160 Tenn. 619, 28 S.W.2d 351, 1930 Tenn. LEXIS 146 (1930).

Where mortgage or trust deed provides for sale for cash and free from equity, the decree in bill to foreclose will so order. The obligation of contract cannot be interfered with in absence of some controlling equity. Knox v. McCain, 81 Tenn. 197, 1884 Tenn. LEXIS 23 (1884); Clark v. Jones, 93 Tenn. 639, 27 S.W. 1009, 1894 Tenn. LEXIS 9, 42 Am. St. Rep. 931 (1894).

12. Intervening Judgment After Execution of Sheriff's Deed — Effect.

Where land was sold under execution without delivery of sheriff's deed to purchasers, an intervening judgment did not constitute lien upon naked legal title and right of redemption remaining in judgment debtor. Fite v. Jennings, 193 Tenn. 250, 246 S.W.2d 1, 1952 Tenn. LEXIS 289 (1952).

13. Statute of Limitations.

The sheriff's deed relates to the sale in all cases, and relates to the levy in some cases, and relates to the judgment when the judgment is a lien on the land, and vests the purchaser with the legal title, at least from the date of the sale. The deed relates to the levy on which it is based, so as to overreach and nullify all conveyances and other levies made subsequent to such levy, but for the purpose of vesting the legal title in the purchaser, it relates only to the date of the sale, from which date, and not before, the statutes of limitations may become operative in favor of or against the debtor or purchaser, or those claiming under them respectively, as the one or the other may be holding the actual possession and claiming adversely against the other out of possession. Garner's Lessee v. Johnston, 7 Tenn. 23, 7 Tenn. 24, 1822 Tenn. LEXIS 7 (1822); Porter's Lessee v. Cocke, 7 Tenn. 29, 7 Tenn. 30, 1823 Tenn. LEXIS 2 (1823); Farquhar v. Toney, 24 Tenn. 502, 1844 Tenn. LEXIS 120 (1844); Keaton v. Thomasson's Lessee, 32 Tenn. 138, 1852 Tenn. LEXIS 34 (1852); Thomasson's Lessee v. Keaton, 33 Tenn. 155, 1853 Tenn. LEXIS 22 (1853); Bangess v. Partee, 2 Shan. 264 (1877); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883).

The debtor's possession after the sale, whether the sheriff's deed has been taken or not, is consistent with the title of the purchaser, under whom he is presumed to hold as quasi-tenant at will, and does so hold until actual disclaimer, and a sale and conveyance by the purchaser under the execution sale, made before the disclaimer and adverse holding, is not champertous. When the disclaimer is made, the debtor's possession becomes adverse, and the statutes of limitations begin to run against the purchaser and those claiming under him. Mitchell v. Lipe, 16 Tenn. 179, 1835 Tenn. LEXIS 72 (1835); Vance's Heirs v. Johnson, 29 Tenn. 214, 1849 Tenn. LEXIS 51 (1849); Keaton v. Thomasson's Lessee, 32 Tenn. 138, 1852 Tenn. LEXIS 34 (1852); Thomasson's Lessee v. Keaton, 33 Tenn. 155, 1853 Tenn. LEXIS 22 (1853); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

A cause of action does not arise until there has been a refusal to accept the tender, and from that point only does a statute of limitations begin to operate and until tender and refusal the debtor had no right of action against the purchaser. Hunt v. Liles, 35 Tenn. App. 173, 243 S.W.2d 149, 1950 Tenn. App. LEXIS 132 (Tenn. Ct. App. 1950).

14. Redemption Period.

15. —Time for Redemption — Computation.

Where the right of redemption exists in the sales of land, made under decrees of the chancery court, the time allowed for redemption is computed from the date of the confirmation of the report of sale. Henderson v. Lowry, 13 Tenn. 239, 13 Tenn. 240, 1833 Tenn. LEXIS 153 (1833); Lowry v. McGhee, 16 Tenn. 242, 1835 Tenn. LEXIS 87 (1835); Wood v. Morgan, 23 Tenn. 371, 1843 Tenn. LEXIS 117 (1843); Burrow v. Henson, 34 Tenn. 658, 1855 Tenn. LEXIS 113 (1855); Parsons v. McNickle, 1 Shan. 264 (1873); Marlowe v. Kingdom Hall of Jehovah's Witnesses, 541 S.W.2d 121, 1976 Tenn. LEXIS 532 (Tenn. 1976).

In computing the time allowed for redemption, the day of the sale must be excluded. This is done upon the principle that time will be so computed as to save the right intended to be favored by the law, or to be secured by the parties to a contract. Jones v. Planters' Bank, 24 Tenn. 619, 1845 Tenn. LEXIS 147 (1845); Elder v. Bradley, 34 Tenn. 247, 1854 Tenn. LEXIS 43 (1854).

Where the purchaser, upon his refusal of the debtor's request for an extension of the redemption period, informed the debtor that the time of redemption would expire on a certain day subsequent to the true time, and agreed that the redemption might be made on or before that day, the right of redemption continued until and inclusive of that day. Pearson v. Douglass, 60 Tenn. 151, 1873 Tenn. LEXIS 426 (1873).

Where the party entitled to redeem is misled by the sheriff's false return of the date of sale, he may redeem at any time within the two years from such false date, although the return is, without his knowledge, and by permission of the court, afterwards amended and changed to the true date, and especially is this the rule where the act of the purchaser in a sense was the cause of it. Alexander v. Bailey, 70 Tenn. 636, 1879 Tenn. LEXIS 210 (1879).

The period for redemption does not begin to run until the sale is completed by valid decree confirming the sale and divesting and vesting title. Tennessee Marble & Brick Co. v. Young, 179 Tenn. 116, 163 S.W.2d 71, 1941 Tenn. LEXIS 100 (1941); Marlowe v. Kingdom Hall of Jehovah's Witnesses, 541 S.W.2d 121, 1976 Tenn. LEXIS 532 (Tenn. 1976).

16. — —Infant's Land.

Under former provision allowing redemption of land sold for taxes, no special protection was accorded an infant although the general statute of limitations preserves the right of action of a minor until after the removal of disability and despite the fact that under § 54-12-421 relating to assessments for road improvement districts, the right of redemption of lands is extended for the period of one year after the removal of the disability of an infant as this section contains no such exemption. McGee v. Carter, 31 Tenn. App. 141, 212 S.W.2d 902, 1948 Tenn. App. LEXIS 78 (Tenn. Ct. App. 1948).

17. —Failure to Redeem on Time — Sufficiency of Excuse.

It is no sufficient excuse for failure to redeem the land within the time allowed, that the purchaser could not be found, for, in such case, the redemption money may be paid to the clerk of the court under whose judgment or decree the land was sold, and, in all other cases, to the clerk of the circuit court of the county in which the land lies. Rothwell v. Gettys, 30 Tenn. 135, 1850 Tenn. LEXIS 76 (1850); Maupin v. Blanton, 93 Tenn. 422, 25 S.W. 99, 1893 Tenn. LEXIS 69 (1893).

It is not a sufficient excuse for failing to redeem within the time allowed that, until after the expiration, the purchaser was asserting, by suit, his claim that he owned, by purchase, the debtor's equity of redemption, while the debtor was denying this, which suit was, after the expiration of the redemption period, adjudged in favor of the debtor and against the purchaser. Griffin v. Haines, 65 Tenn. 409, 1873 Tenn. LEXIS 375 (1873).

18. —Redemption in Chancery After Expiration of Time.

Where the party entitled to redeem is prevented from doing so until after the expiration of the period allowed, by the fraud of the purchaser, or by an agreement for an extension, or, perhaps, by duress, imprisonment, and the like, or a dangerously and violently raging war, or possibly where the failure to redeem was produced by causes which would authorize relief against forfeiture, the chancery court will, upon a bill filed within a reasonable time, permit the redemption from the purchaser or anyone claiming under him except an innocent purchaser. Kennedy v. Howard, 25 Tenn. 64, 1845 Tenn. LEXIS 24 (1845); Haywood v. Ensley, 27 Tenn. 460, 1847 Tenn. LEXIS 106 (1847); Parker v. Bragg, 30 Tenn. 212, 1850 Tenn. LEXIS 95 (1850); Guinn v. Locke, 38 Tenn. 110, 1858 Tenn. LEXIS 131 (Tenn. Sep. 1858); Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Lock v. Edmundson, 60 Tenn. 282, 1872 Tenn. LEXIS 489 (1872); Pearson v. Douglass, 60 Tenn. 151, 1873 Tenn. LEXIS 426 (1873); Hays v. Worsham, 77 Tenn. 591, 1882 Tenn. LEXIS 107 (1882); Woodfin v. Marks, 104 Tenn. 512, 58 S.W. 227, 1900 Tenn. LEXIS 22 (1900).

The right to redeem under chancery decree after expiration of time under the decree will not be defeated by a sale and conveyance by such purchaser to a third party, in payment of a preexisting debt, or with actual notice of such equity. Guinn v. Locke, 38 Tenn. 110, 1858 Tenn. LEXIS 131 (Tenn. Sep. 1858); Sharp v. Fly, 68 Tenn. 4, 1876 Tenn. LEXIS 15 (1876); Anderson v. Ammonett, 77 Tenn. 1, 1882 Tenn. LEXIS 7 (1882).

19. —Extension of Redemption Period — Rules Governing.

The agreement for extension, made by the purchasing creditor upon the request of the debtor, will not operate as a legal estoppel, preventing the defendants in an action of ejectment by the purchaser of the land at execution sale from relying upon defects in the purchaser's title, because of defects in the proceeding under which the land was sold; for any question raised by the fact that the execution debtor, the ancestor of the defendants, applied to the creditor to purchase the land and give the debtor further time to redeem, and that the creditor agreed, and purchased accordingly, is a matter exclusively of equitable cognizance. Maples v. Tunis, 30 Tenn. 108, 1850 Tenn. LEXIS 69 (1850).

Chancery has no jurisdiction of a bill seeking to keep open the right of redemption, until a judgment or decree of the court can be obtained removing all embarrassments and clouds from the title of the land. Alexander v. Colcock, 61 Tenn. 282, 1872 Tenn. LEXIS 372 (1872).

20. —Surrender of Benefit of Time Extension — Proof.

The law favors the right of redemption, and where the time has been clearly enlarged by the purchaser, before the expiration of the redemption period allowed by law, there should be unequivocal proof that this benefit to the debtor was surrendered by him, before he can be deprived of it. Lock v. Edmundson, 60 Tenn. 282, 1872 Tenn. LEXIS 489 (1872).

21. —Voluntary Agreement to Redemption After Period.

Widow's redemption after expiration of the redemption period, made by the voluntary agreement of the parties in interest, is the same in effect as if done within the period, if the intention was such, but otherwise if there be no such intention. Clark v. Cantwell, 40 Tenn. 202, 1859 Tenn. LEXIS 54 (1859); Keele v. Cunningham, 49 Tenn. 288, 1871 Tenn. LEXIS 7 (1871); Hudson v. Conway, 77 Tenn. 410, 1882 Tenn. LEXIS 76 (1882). See Adams v. Brown, 63 Tenn. 124, 1874 Tenn. LEXIS 218 (1874).

22. —Redemption Pending Bill to Force Sale of Equity.

The pendency of a suit in chancery by a judgment creditor to force a sale of the debtor's right of redemption constitutes no obstacle to a redemption by either the debtor or any of his other judgment creditors (or creditors by debts acknowledged by deed). Lincoln Sav. Bank v. Ridgway, 71 Tenn. 623, 1879 Tenn. LEXIS 123 (1879); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886).

23. Tender.

The tender of the amount of the debt, secured by a deed of trust waiving the equity of redemption, though its reception is wrongfully refused by the creditor, preserves the debtor's right of redemption; for the waiver of such right in the deed of trust had reference only to a redemption after a sale lawfully made. The tender took away the power of sale, and the sale made thereafter did not operate to bar the equity of redemption so waived in the deed of trust; and the possession of the purchaser, taken under such sale, was wrongful, and renders him liable for the rents. Welch v. Greenalge, 49 Tenn. 209, 1870 Tenn. LEXIS 214 (1870).

24. —Tender on Time — Necessity.

To effect a redemption, the tender of the amount of the purchase money and interest must be made within the time allowed for redemption, although the annual rental value of the property is greater than that sum, and the purchaser has had the possession from the date of the sale, for the law expressly and imperatively requires the debtor to make the payment or the tender within the prescribed time, or he forfeits the benefit provided for him, and he cannot stand by and take no active steps to enforce his right until the two years have expired, and then assert it. Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Mabry v. Churchwell, 53 Tenn. 417, 1871 Tenn. LEXIS 375 (Tenn. Oct. 18, 1871); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883).

25. —Premature Tender.

A tender in redemption before the confirmation of the report of sale, made under a decree of court, is premature, and confers no rights, because the sale is not complete until such confirmation. Wood v. Morgan, 23 Tenn. 371, 1843 Tenn. LEXIS 117 (1843).

26. —Kind of Money to Be Tendered.

A tender of current bank notes or other current money, though not legal tender, will be good when no objection is made on that account but the objection is placed solely on the ground that more was due, or upon some different ground. Ball v. Stanley, 13 Tenn. 199, 1833 Tenn. LEXIS 136, 26 Am. Dec. 263 (1833); Cooley v. Weeks, 18 Tenn. 141, 1836 Tenn. LEXIS 110 (1836); Noe v. Hodges, 22 Tenn. 162, 1842 Tenn. LEXIS 56 (1842); Crutchfield v. Robins, Tingley & Co., 24 Tenn. 15, 1844 Tenn. LEXIS 3 (1844); McDowell, McGaughey & Co. v. Keller, 44 Tenn. 258, 1867 Tenn. LEXIS 44 (1867); Rogers v. Rogers, 35 S.W. 890, 1895 Tenn. Ch. App. LEXIS 27 (Tenn. Ch. App. 1895); Memphis City Bank v. Smith, 110 Tenn. 337, 75 S.W. 1065, 1903 Tenn. LEXIS 65 (1903).

The tender must be in legal tender money, if objection is made to the tender of any other kind of money, though it be equal in value to the legal tender money. Lowry v. McGhee, 16 Tenn. 242, 1835 Tenn. LEXIS 87 (1835).

27. —Sufficiency of Tender.

The tender in redemption is sufficient where a more formal tender is prevented by the purchaser refusing to remain until the money can be counted out and offered to him, as where the debtor tenders the money, invites him into a public office for the purpose of counting it and paying it to him, but he refuses to receive it unless a condition he had no right to make was complied with, and abruptly turns off. Raines v. Jones, 23 Tenn. 490, 1844 Tenn. LEXIS 148 (1844); Farnsworth v. Howard, 41 Tenn. 215, 1860 Tenn. LEXIS 50 (1860).

Where the maker of a deed of trust has died intestate, leaving minor heirs, a tender by his father as their next friend is good to prevent a sale and to preserve the equity of redemption waived in such deed. Welch v. Greenalge, 49 Tenn. 209, 1870 Tenn. LEXIS 214 (1870).

28. —Actual Production of Money — Necessity.

The purchaser's refusal to treat with the party entitled to redeem and seeking to do so does away with the necessity of an actual tender, and also with the necessity of offering to credit his judgment. Carden v. Spilman, 1 Shan. 10 (1847); Burton v. Robinson, 68 Tenn. 364, 1878 Tenn. LEXIS 27 (1878).

Where the debtor paid a part of the redemption money, and a third person advanced the balance for him, and the redemption was made for the debtor, but the third person, acting as agent for the debtor, caused the conveyance to be made to his brother-in-law who took it for a preexisting debt and with notice, and without protection as against such debtor, and the third party misled the debtor, a confiding old man, and induced him not to redeem, under assurances that he would hold the land for him, and that he might repay the money at his convenience, until the redemption period had expired, the relation of mortgagor and mortgagee was established, and it was not necessary to bring the money into court. Guinn v. Locke, 38 Tenn. 110, 1858 Tenn. LEXIS 131 (Tenn. Sep. 1858).

A redemption bill alleging that complainant was ignorant of the amount due to the purchaser, and offering to pay it into court when the amount is ascertained, and praying that it be ascertained, and, if not paid, that the land be sold for its satisfaction, is sufficient, though no tender was made before the filing of the bill. Lock v. Edmundson, 60 Tenn. 282, 1872 Tenn. LEXIS 489 (1872).

Where the debtor, with sufficient money, went to the purchaser to redeem the land, but his right of redemption was denied and the money refused, it was unnecessary actually to produce and tender the redemption money. Pearson v. Douglass, 60 Tenn. 151, 1873 Tenn. LEXIS 426 (1873). See Bradford v. Foster, 87 Tenn. 4, 9 S.W. 195, 1888 Tenn. LEXIS 27 (1888); Memphis City Bank v. Smith, 110 Tenn. 337, 75 S.W. 1065, 1903 Tenn. LEXIS 65 (1903).

29. —Payment into Court.

Where the purchaser has been in possession, and the debtor's assignee the right of redemption, by virtue of the debtor's deed, made before the sale, but after the attachment under which the land was sold, duly tendered the purchaser the proper amount, which was refused, such assignee may file his bill, paying into court the amount of the previously tendered money, less the rents due from the purchaser, and it will be sufficient. Greenwald v. Roberts, 51 Tenn. 494, 1871 Tenn. LEXIS 193 (1871). But see Mabry v. Churchwell, 53 Tenn. 417, 1871 Tenn. LEXIS 375 (Tenn. Oct. 18, 1871).

30. — —Objection to Amount.

Where a tender of the money is refused, and the record under a bill does not disclose that any objection was made in the court below as to the amount tendered, an objection made in argument in the Supreme Court for the insufficiency of the amount tendered to cover registration fees and other charges will not be available. Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865).

31. —Failure to Pay into Court.

Where the bill to redeem alleges that the redemption money was tendered, and offers to pay it into court, and shows other grounds of equity besides the question of tender alleged to have been made, it is error to dismiss the bill for failure to pay the redemption money into court upon an order directing it, made upon motion of defendant before answering the bill, for complainant is entitled to an answer and investigation of the facts charged in the bill. Mabry v. Churchwell, 53 Tenn. 417, 1871 Tenn. LEXIS 375 (Tenn. Oct. 18, 1871).

The objection to a bill upon the ground that the redemption money did not accompany the bill, and was not brought into court, as offered to be done, if tenable, is a matter of demurrer, and is waived if not taken advantage of by demurrer. Polk v. Mitchell, 85 Tenn. 634, 4 S.W. 221, 1887 Tenn. LEXIS 5 (1887); Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

Where the bill tenders the money previously tendered, but does not state that the money accompanies the bill, but only offers to pay it in as the court may direct, or upon final hearing, the objection to the bill for its failure to state the tender and payment into court is waived, if not relied on by demurrer. Polk v. Mitchell, 85 Tenn. 634, 4 S.W. 221, 1887 Tenn. LEXIS 5 (1887); Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

32. —Receipt of Rents — Effect.

The purchaser's reception of the rents, within the redemption period, amounting to more than the redemption money, did not obviate the necessity of the tender and payment of the redemption money, especially where the debtor's heir seeks to redeem, for the original debtor only, and not his heir, is entitled to rents from the purchaser in possession. Mabry v. Churchwell, 53 Tenn. 417, 1871 Tenn. LEXIS 375 (Tenn. Oct. 18, 1871).

33. —Tender Refused — Remedy.

The tender does not, of itself, divest the legal title out of the purchaser or the last redeeming creditor and vest it in the debtor or his creditor proposing to redeem, so as to entitle him to recover the land by ejectment. The remedy is by a bill in chancery tendering the redemption money, which must be paid into court with the filing of the bill, or at least before any decree of redemption is made, and must be paid in subject to the order of the defendant. A decree ordering the land to be sold to raise the redemption money is erroneous. Hawkins v. Jamison, 8 Tenn. 83, 1827 Tenn. LEXIS 14 (1827); Elliot v. Patton, 12 Tenn. 9, 12 Tenn. 10, 1833 Tenn. LEXIS 4 (1833); Simmons v. Marable, 30 Tenn. 436, 1850 Tenn. LEXIS 147 (1850); Mitchell v. Brown, 46 Tenn. 505, 1869 Tenn. LEXIS 88 (1869); Burton v. Robinson, 68 Tenn. 364, 1878 Tenn. LEXIS 27 (1878); Polk v. Mitchell, 85 Tenn. 634, 4 S.W. 221, 1887 Tenn. LEXIS 5 (1887).

34. —Redemption Bill After Refusal of Tender — Time for Filing.

The tender of the redemption money within the prescribed time, though it be refused, establishes the right of redemption, and the redemption bill need not be filed within the redemption period, but may be filed at any time before barred by the appropriate statute of limitation, which begins to run from the date of the tender and refusal. Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869).

35. Persons Entitled to Redeem.

36. —Tenants in Common.

Where several tenants in common are entitled to redeem with the right of redemption descending to them, each has the right to redeem, and the redemption money having been tendered by one within the redemption period, each of them may maintain a suit to enforce the redemption, and when the redemption is effected, it inures to the benefit of all. Gentry v. Gentry, 33 Tenn. 87, 1853 Tenn. LEXIS 11, 60 Am. Dec. 137 (1853).

Where two persons purchased land and took a deed for it, after a lien had attached to the same as the land of their grantor, by reason of a previous judgment or the levy of an execution, but before a sale thereunder, and, after the expiration of the redemption period, one of such purchasers bought the land from the purchaser under the execution sale, or from the one finally redeeming, and took the title in his own name by a deed executed by the sheriff, upon the order of such execution or redemption purchaser, there was no ground for the contention that such purchase was a redemption inuring to the joint benefit of the two former tenants in common. Adams v. Brown, 63 Tenn. 124, 1874 Tenn. LEXIS 218 (1874). See Gentry v. Gentry, 33 Tenn. 87, 1853 Tenn. LEXIS 11, 60 Am. Dec. 137 (1853); Clark v. Cantwell, 40 Tenn. 202, 1859 Tenn. LEXIS 54 (1859).

Where several judgment creditors redeem, they are tenants in common, each having an interest in proportion to the amount of the money paid by him, and the amount of his judgment debt credited and advanced. Hoffman v. Lyons, 73 Tenn. 377, 1880 Tenn. LEXIS 144 (1880).

37. —Agent of Debtor.

While the debtor, and not a purchaser from him before the execution sale, and after the rendition of the judgment which is a lien on the land, may redeem the land yet, when the redemption is made by the purchaser as agent of the debtor and in the debtor's name, the right thereby secured inures to the benefit of such purchaser. Jones v. Planters' Bank, 24 Tenn. 619, 1845 Tenn. LEXIS 147 (1845).

A debtor may contract with another to redeem land in his stead, even verbally, and, if the contract is executed by the redemption of the land, the party so redeeming under such contract is a trustee for the debtor, and, if the title be in his own name, he must convey the land to the debtor or his assignee. Kennedy v. Howard, 25 Tenn. 64, 1845 Tenn. LEXIS 24 (1845); Guinn v. Locke, 38 Tenn. 110, 1858 Tenn. LEXIS 131 (Tenn. Sep. 1858).

38. — —Parol Proof of Agency.

Parol evidence is admissible to show that another redeemed the land for the debtor owner, and to divest out of him the legal title so vested in him by the sheriff's deed. Kennedy v. Howard, 25 Tenn. 64, 1845 Tenn. LEXIS 24 (1845); Guinn v. Locke, 38 Tenn. 110, 1858 Tenn. LEXIS 131 (Tenn. Sep. 1858).

39. —Purchaser or Assignee of Debtor.

The purchaser or assignee of the equity of redemption stands in the shoes of the debtor, his vendor or assignor, and is affected by the equities existing against such debtor, and has the same right of redemption as such assignor had before the assignment, which is worth nothing to him (the assignee) unless he exercises the right within the prescribed period. Hurt v. Reeves, 6 Tenn. 49, 6 Tenn. 50, 1818 Tenn. LEXIS 21 (1818); Hepburn v. Kerr, 28 Tenn. 726, 1849 Tenn. LEXIS 115, 51 Am. Dec. 685 (1849); Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865); Mitchell v. Brown, 46 Tenn. 505, 1869 Tenn. LEXIS 88 (1869); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884).

Redemption by the debtor's assignee. Pillow v. Langtree, 24 Tenn. 389, 1844 Tenn. LEXIS 89 (1844); Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865); Toombs v. Palmer, 51 Tenn. 331, 1871 Tenn. LEXIS 170 (1871); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Campbell v. Atwood, 47 S.W. 168, 1897 Tenn. Ch. App. LEXIS 135 (1897).

A purchaser of land, pending an injunction and in violation of it, may, by virtue of his purchase, redeem the land from the purchaser of the land sold, subject to redemption, as that of his grantor, under the injunction bill. Greenwald v. Roberts, 51 Tenn. 494, 1871 Tenn. LEXIS 193 (1871); Terrell v. Ingersoll, 78 Tenn. 77, 1882 Tenn. LEXIS 145 (1882); Herman Bros. v. Sartor, 107 Tenn. 235, 63 S.W. 1120, 1901 Tenn. LEXIS 75 (1901).

40. —Widow.

The widow of a deceased debtor may redeem, but she will hold the land charged with an implied trust in favor of the heirs, in whom the title vests subject to her dower and her lien for reimbursement for their just proportion of the redemption money paid by her. Clark v. Cantwell, 40 Tenn. 202, 1859 Tenn. LEXIS 54 (1859); Hudson v. Conway, 77 Tenn. 410, 1882 Tenn. LEXIS 76 (1882).

While the purchaser of land at an execution sale, without the sheriff's deed, has only an equitable title, still he has the right to call for the legal title by taking the sheriff's deed, and there remains in the debtor only the naked legal title and the right of redemption, and, if he dies without redeeming, his widow is not entitled to dower, unless she or the heirs redeem within the prescribed time. Rose v. Rose, 53 Tenn. 533, 1871 Tenn. LEXIS 391 (1871); Lunsford v. Jarrett, 79 Tenn. 192, 1883 Tenn. LEXIS 40 (1883).

41. —Heirs.

The heirs of a deceased debtor may redeem as he could have done, had he lived. Elliot v. Patton, 12 Tenn. 9, 12 Tenn. 10, 1833 Tenn. LEXIS 4 (1833); Bledsoe v. McCorry, 68 Tenn. 320, 1878 Tenn. LEXIS 16 (1878).

If one heir alone redeems, the presumption is that he redeems the same for all the heirs, who, in such case, must contribute their respective portions, but this presumption may be rebutted. Tisdale v. Tisdale, 34 Tenn. 596, 1855 Tenn. LEXIS 105 (1855); Sanders v. J.H.S. Woolman & Co., 75 Tenn. 300, 1881 Tenn. LEXIS 119 (Tenn. 1881).

A purchaser under a conveyance, fraudulent as against the grantor's creditors, made before a judicial sale of the land as that of the grantor, and legally subject to such sale, may redeem from such purchaser at the sale made subject to redemption. Greenwald v. Roberts, 51 Tenn. 494, 1871 Tenn. LEXIS 193 (1871).

A grantee under a deed of conveyance void as fraudulent against the grantor's creditors is not authorized as the debtor's assignee to redeem the land from a purchaser thereof. Cooke, Settle & Co. v. Walters, 70 Tenn. 116, 1878 Tenn. LEXIS 193 (1878).

Until the purchaser of the equity of redemption exercises his right to redeem, any judgment creditor (or creditor by debt acknowledged by deed) has the right to redeem the land from the last redeeming creditor. Lincoln Sav. Bank v. Ridgway, 71 Tenn. 623, 1879 Tenn. LEXIS 123 (1879); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884).

One heir redeeming land sold for ancestor's debts, and wrongfully selling the same to an innocent purchaser, will be compelled to account to the other heirs for the profits, where the redemption is held to be for all the heirs, otherwise where redemption was for the redeeming heir himself. Sanders v. J.H.S. Woolman & Co., 75 Tenn. 300, 1881 Tenn. LEXIS 119 (Tenn. 1881).

42. —Parol Purchaser from Heirs.

Where the parol purchaser of land from heirs redeems the same from a purchaser at a judicial sale for the payment of the ancestor's debts, but made expressly subject to redemption by the heirs, by taking the assignment of his certificate of purchase, not as purchaser from him but for the benefit of the heirs, he cannot, after the expiration of the redemption period, assert an adverse claim against such heirs, under his redemption, on the alleged ground that it was an independent purchase, but if he elects to take the land under the parol contract, under the offer of the heirs in their bill, he must, after deducting the amount of the redemption money, pay the balance of the purchase price, and if he elects to avoid the parol contract, then he will be entitled to an account and a lien as upon rescission. Hays v. Worsham, 77 Tenn. 591, 1882 Tenn. LEXIS 107 (1882).

43. —Holder of Purchase Money Lien Notes.

Where the owner conveyed his land to secure a certain debt, and then conveyed it to another in fee and absolutely, subject to such encumbrance, under which the land was sold subject to the right of redemption, while he was still holding the purchase money lien notes, he or his personal representative may redeem the land from the purchaser at such sale. Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

44. —Purchaser under Deed Unregistered at Time of Levy.

A purchaser of land, by a deed not registered until after the levy of an execution thereon as the land of his grantor, does not occupy such a position as authorizes him to redeem the land from a purchaser under the execution sale. Stanley v. Nelson & Dickinson, 23 Tenn. 484, 1844 Tenn. LEXIS 145 (1844).

45. —Trustee under Deed of Trust.

Where the right of redemption is vested in the trustee under a deed of trust for the benefit of creditors, he may redeem the land for the benefit of the beneficiaries, though they are not judgment creditors. Birdwell v. Cain, 41 Tenn. 301, 1860 Tenn. LEXIS 67 (1860); Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

The right of a trustee under debtor's deed of trust to redeem from a purchaser or redeeming creditor does not prevent the redemption thereof by some other judgment creditor, or creditor by debt acknowledged by deed, otherwise standing in a position to redeem, nor does such trustee's right prevent a redeeming creditor's advancement of his own bid within 20 days, especially where there was no priority existing under such deed of trust barring such redemption or advancement by such other creditors. McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

46. —Creditor.

Where land was sold under a deed of trust, and a judgment creditor, wishing to redeem by an agreement between all the parties, becomes the purchaser by paying the debtor a consideration and by advancing to the purchasing creditor the amount of his bid and debt, and the conveyance is effected by the purchasing creditor conveying the land back to the original debtor owner, who conveys to the third party so purchasing the equity of redemption and furnishing the redemption money, the transaction being an entire and continuous one, in consummation of the previous agreement of the parties, the mere momentary and transitory seizin of the original debtor owner, as the conduit through which the title passes, vests in him no interest or title to which a judgment lien may attach. In the absence of actual fraud, such transaction is not fraudulent in law as against other creditors. Huffaker v. Bowman, 36 Tenn. 89, 1856 Tenn. LEXIS 60 (1856); Birdwell v. Cain, 41 Tenn. 301, 1860 Tenn. LEXIS 67 (1860); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Gordon v. Cox, 110 Tenn. 306, 75 S.W. 925, 1903 Tenn. LEXIS 62, 100 Am. St. Rep. 812 (1903).

47. Fraudulent Redemption.

Where the redemption by debtor's son is in fraud of the debtor's bona fide creditors, it will be held void as against them, and the son, if guilty of fraud in fact, will not be entitled to have the redemption money refunded to him. Shepherd v. Woodfolk, 78 Tenn. 593, 1882 Tenn. LEXIS 229 (1882).

48. Dower Right Where Debtor Dies After Levy and Before Sale.

The levy of an execution upon land does not divest the title and seizure out of the owner, nor does such levy followed by condemnation in the circuit court, and if such owner dies before a sale, his widow will be entitled to dower in such land. Rutherford v. Read, 25 Tenn. 423, 1846 Tenn. LEXIS 8 (1846); Harrell v. Harrell, 44 Tenn. 377, 1867 Tenn. LEXIS 59 (1867), overruled, Rose v. Rose, 53 Tenn. 533, 1871 Tenn. LEXIS 391 (1871); Rose v. Rose, 53 Tenn. 533, 1871 Tenn. LEXIS 391 (1871); McEwen v. Brandeau, 2 Shan. 48 (1876); Atwater v. Butler, 68 Tenn. 299, 1878 Tenn. LEXIS 13 (1878).

49. Chancery Sales.

50. —Object of Provision Barring Redemption.

The statute barring the equity of redemption in chancery sales of land, made on the prescribed credit, was intended to benefit both the debtor and the creditor. It was intended to benefit the debtor by exposing to sale his property under such circumstances as to make it bring approximately its value, by giving time for payment to the purchaser, and it was intended to benefit the creditor by an assurance that an absolute sale will more nearly pay his debt, because buyers will give more for an absolute estate than for a contingent one. Hodges v. Copley, 58 Tenn. 332, 1872 Tenn. LEXIS 267 (1872).

51. —Statutory Compliance — Necessity.

Where the equity of redemption is not waived in the mortgage, it is error to decree a sale in bar of the equity of redemption, except upon the credit as prescribed, and upon application of the complainant in the bill, to be shown by the decree. Chadbourn v. Henderson, 61 Tenn. 460, 1873 Tenn. LEXIS 206 (1873).

52. —Implied Incorporation of Statutory Provisions in Contract.

Where a deed of trust provides for a sale of the land for cash, without expressly reserving the right of redemption, the right of redemption implied from the provision for a cash sale is overcome by the provision of the statute impliedly incorporated in the contract, authorizing a chancery sale on a credit in bar of the equity of redemption, and upon a foreclosure bill filed by the beneficiary under the deed of trust, the court may order a sale on a credit and free from the equity of redemption, where the requisites for barring redemption exist. Mitchell v. McKinny, 53 Tenn. 83, 1871 Tenn. LEXIS 321 (1871).

53. —Barring Equity — Discretion of Court.

It is not imperative upon the court to bar the equity of redemption, when ordering a sale on time in accordance with the prayer of the bill, but it is a matter of sound discretion, to be exercised in view of the facts of the case, and, upon appeal, the supreme court may modify the chancery decree, by directing the sale to be made subject to redemption. Hoyal v. Bryson, 53 Tenn. 139, 1871 Tenn. LEXIS 332 (Tenn. Sep. 27, 1871).

54. —Contract of Parties — Binding Effect on Chancery Court.

By the chancery court's foreclosure decree of sale the obligation of the contract of the parties cannot be interfered with, in the absence of some controlling equity. Knox v. McCain, 81 Tenn. 197, 1884 Tenn. LEXIS 23 (1884).

55. —Decree Barring Redemption — Appeal to Modify.

Where the lower court wrongly cuts off the equity of redemption, the supreme court will enter a decree allowing the right of redemption from the date of the confirmation of the report of sale. Hodges v. Copley, 58 Tenn. 332, 1872 Tenn. LEXIS 267 (1872); Frierson v. Blanton, 60 Tenn. 272, 1872 Tenn. LEXIS 488 (1872), questioned, Knox v. McCain, 81 Tenn. 197, 1884 Tenn. LEXIS 23 (1884); Tomkins v. Roscoe, 2 Shan. 255 (1877); Hughes Bros. Mfg. Co. v. Conyers, 97 Tenn. 274, 36 S.W. 1093, 1896 Tenn. LEXIS 139 (1896).

Where land has been sold under a chancery decree wrongly cutting off the equity of redemption, and the report of sale has been confirmed, the Supreme Court will not, in the absence of any allegation or complaint that the property did not sell for its full value, order a resale, but will order that the sale stand as made, subject to the right of the debtor to redeem within two years from the date of the affirmance of the decree in the Supreme Court, for the decree of confirmation in the court below, when appealed from, only becomes final upon affirmance in the appellate court. Tomkins v. Roscoe, 2 Shan. 255 (1877); Hughes Bros. Mfg. Co. v. Conyers, 97 Tenn. 274, 36 S.W. 1093, 1896 Tenn. LEXIS 139 (1896).

As a general rule, where the complainant asks in his bill for a sale in bar of the equity of redemption he is clearly entitled to a decree accordingly, and an appeal to modify the decree in that respect will not be sustained, unless it is a very exceptional case. Gibbs v. Patten, 70 Tenn. 180, 1879 Tenn. LEXIS 152 (1879); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883).

56. —Requisites in Bill and Decree to Cut Off Right.

The equity of redemption is a favorite of the chancery court, and, to cut it off, the statute must be strictly pursued. Therefore, in order to make a decree operative and effective in destroying the right of redemption, three things must distinctly appear in it, namely as follows: (1) That the complainant made application in his bill for a sale on credit prescribed in the statute to bar the equity of redemption, and this fact so recited in the decree must also appear in the bill; (2) The specific land to be sold must be described in the decree of sale; and (3) The decree must direct that the sale be made on a credit, stating the time, which must not be less than six months nor more than two years, and the decree must in explicit terms cut off or bar the equity of redemption. Unless these facts appear in the decree, the sale will, on appeal, be set aside and a resale ordered. Burrow v. Henson, 34 Tenn. 658, 1855 Tenn. LEXIS 113 (1855); Cherry, Caldwell & Co. v. Bowen, 36 Tenn. 415, 1857 Tenn. LEXIS 22 (1857), questioned, Hill v. Walker, 46 Tenn. 424, 1869 Tenn. LEXIS 77 (1869); McBee v. McBee, 48 Tenn. 558, 1870 Tenn. LEXIS 111 (1870); Carter v. Sims, 49 Tenn. 166, 1870 Tenn. LEXIS 208 (1870); Hoyal v. Bryson, 53 Tenn. 139, 1871 Tenn. LEXIS 332 (Tenn. Sep. 27, 1871); Bank of Louisville v. Leftwick, 56 Tenn. 471, 1872 Tenn. LEXIS 162 (1872); Hodges v. Copley, 58 Tenn. 332, 1872 Tenn. LEXIS 267 (1872); Frierson v. Blanton, 60 Tenn. 272, 1872 Tenn. LEXIS 488 (1872), questioned, Knox v. McCain, 81 Tenn. 197, 1884 Tenn. LEXIS 23 (1884); Lock v. Edmundson, 60 Tenn. 282, 1872 Tenn. LEXIS 489 (1872); Thruston v. Belotte, 59 Tenn. 249, 1873 Tenn. LEXIS 51 (1873); Chadbourn v. Henderson, 61 Tenn. 460, 1873 Tenn. LEXIS 206 (1873); Merrill v. Elam, 63 Tenn. 235, 1874 Tenn. LEXIS 236 (1874); P.T. Glass & Co. v. Porter, 66 Tenn. 114, 1874 Tenn. LEXIS 89 (1874); Wood v. Neely, 66 Tenn. 586, 1874 Tenn. LEXIS 184 (1874); Gibbs v. Patten, 70 Tenn. 180, 1879 Tenn. LEXIS 152 (1879); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883); Turner v. Argo, 89 Tenn. 443, 14 S.W. 930, 1890 Tenn. LEXIS 68 (1890).

Where no equity of redemption exists, there need be no application in the bill to cut it off; and the fact that a sale free from the equity of redemption was decreed, without any prayer therefor in the bill, is immaterial. Maxwell v. Smith, 86 Tenn. 539, 8 S.W. 340, 1888 Tenn. LEXIS 7 (1888).

57. —Compliance with Statute — Sufficiency of Showing.

A statement in the decree, made at its conclusion, that “at the special instance and request of the complainant, the said land shall be sold without the equity of redemption,” is sufficient to show a substantial compliance with the requisites of the statute, and that the equity of redemption was cut off upon the application of the complainant. McBee v. McBee, 48 Tenn. 558, 1870 Tenn. LEXIS 111 (1870); Myers v. Wolf, 162 Tenn. 42, 34 S.W.2d 201, 1930 Tenn. LEXIS 61 (1931).

58. —Failure of Decree to Show Application — Effect.

Where the decree of sale barring the equity of the redemption does not show that the redemption was cut off on application of the complainant, it will not be void except as against those who stand in a position to redeem. Carter v. Sims, 49 Tenn. 166, 1870 Tenn. LEXIS 208 (1870); Bank of Louisville v. Leftwick, 56 Tenn. 471, 1872 Tenn. LEXIS 162 (1872).

59. —Cash Payment — Decree Requiring.

Where the decree of sale requires a cash payment, and bars the equity of redemption, it is not erroneous where the proof in the record at the time the decree was rendered shows that the requirement of the cash payment would not interfere with the obtaining of a full and fair price, and it is so adjudged in the decree; but the requirement of the cash payment shall not in any case exceed the amount of the costs and reasonable counsel fees, where the equity of redemption is cut off. The requirement of a cash payment will not be improper or erroneous, if the debtor or his counsel agreed to it, and the decree is based expressly upon such agreement. The application for such cash payment should be made in the bill, and its propriety should be shown by the proof; for the defendant may oppose the order requiring such cash payment. McBee v. McBee, 48 Tenn. 558, 1870 Tenn. LEXIS 111 (1870); Hodges v. Copley, 58 Tenn. 332, 1872 Tenn. LEXIS 267 (1872); Hughes Bros. Mfg. Co. v. Conyers, 97 Tenn. 274, 36 S.W. 1093, 1896 Tenn. LEXIS 139 (1896).

Where the trust deed authorizes a sale for cash, free from the equity of redemption, and a foreclosure bill is filed by the beneficiary, the court may decree a sale for cash and free from the equity of redemption, because the terms of the chancery sale under a mortgage or deed of trust must conform to the contract of the parties. Knox v. McCain, 81 Tenn. 197, 1884 Tenn. LEXIS 23 (1884); Clark v. Jones, 93 Tenn. 639, 27 S.W. 1009, 1894 Tenn. LEXIS 9, 42 Am. St. Rep. 931 (1894).

Where the land in which the homestead exists is decreed to be sold for debts, or for other purposes, the payment of $1,000 in cash may be required for reinvestment in land for another homestead, and the residue in installments on time, free from the equity of redemption. Bentley v. Jordan, 71 Tenn. 353, 1879 Tenn. LEXIS 88 (1879).

60. Second Sale to Enforce Lien of Decree.

Where land has been sold under a decree of court, and the purchaser has failed to pay the purchase money, and the land has been resold, whether for cash or on time, to pay the same, the original purchaser at the judicial sale is not entitled to redeem the land from the second purchaser. Beason v. Porterfield, 40 Tenn. 363, 1859 Tenn. LEXIS 100 (1859); Mosby v. Hunt, 56 Tenn. 675, 1872 Tenn. LEXIS 190 (1872); Holman v. Green, 63 Tenn. 135, 1874 Tenn. LEXIS 219 (1874); Lucas v. Moore, 70 Tenn. 1, 1878 Tenn. LEXIS 175 (1878).

After the second sale to enforce lien of decree of court, it makes no difference to the first purchaser, after the confirmation of the sale to him and the expiration of the time of redemption, that the original sale was made without the right of redemption, when the bill had not so prayed, and he cannot avoid his purchase upon such ground. Lucas v. Moore, 70 Tenn. 1, 1878 Tenn. LEXIS 175 (1878).

61. Land Held by Purchaser to Secure Advance — Redemption.

The purchase of land sold for debt, under an agreement, made about the time the land was to be sold, that the land should be held by the purchaser as a security for the money advanced in such purchase, is an enforceable trust, and redemption in such case, by analogy to the case of a mortgage, is to be favored, and will be decreed in chancery, if asserted or sought in a reasonable time. Haywood v. Ensley, 27 Tenn. 460, 1847 Tenn. LEXIS 106 (1847); Parker v. Bragg, 30 Tenn. 212, 1850 Tenn. LEXIS 95 (1850); Reynolds v. Baker, 46 Tenn. 221, 1869 Tenn. LEXIS 54 (1869); Hays v. Worsham, 77 Tenn. 591, 1882 Tenn. LEXIS 107 (1882); Woodfin v. Marks, 104 Tenn. 512, 58 S.W. 227, 1900 Tenn. LEXIS 22 (1900); Mee v. Mee, 113 Tenn. 453, 82 S.W. 830, 1904 Tenn. LEXIS 36, 106 Am. St. Rep. 865 (1904); Insurance Co. of Tennessee v. Waller, 116 Tenn. 1, 95 S.W. 811, 1905 Tenn. LEXIS 1 (1905).

62. Impeachment of Mortgage for Usury.

The purchaser of an equity of redemption subject to a prior mortgage or other lien cannot impeach the same for usury, nor is the purchaser of the land entitled to a deduction for the usury included in the debt secured by a prior mortgage, though not assumed by the purchaser. Shankland v. Nelson, 1 Cooper's Tenn. Ch. 459 (1873); Nance v. Gregory, 1 Cooper's Tenn. Ch. 636 (1874); Nance v. Gregory & Pettus, 74 Tenn. 343, 1880 Tenn. LEXIS 258, 40 Am. Rep. 41 (1880); Christian v. John, 111 Tenn. 92, 76 S.W. 906, 1903 Tenn. LEXIS 6 (1903).

Collateral References.

Applicability of tax redemption statutes to separate mineral estates. 56 A.L.R.2d 621.

Construction and application of statute giving former owner right to purchase tax-acquired property while in public ownership. 126 A.L.R. 649.

Equitable conversion, doctrine of, as affecting right of redemption from sale on foreclosure. 138 A.L.R. 1296.

Foreclosure, covenant in mortgage to pay taxes as surviving. 99 A.L.R. 581.

Homestead right in equity of redemption. 89 A.L.R. 521, 74 A.L.R.2d 1355.

Judgment on debtor's equity of redemption. 30 A.L.R. 521.

Mortgagee who redeems from tax sale of mortgaged property, for protection of his security, rights and remedies of. 84 A.L.R. 1384, 123 A.L.R. 1248.

Necessity and sufficiency of tender of payment by one seeking to redeem property from mortgage foreclosure. 80 A.L.R.2d 1317.

Public officer's redemption from tax sale for benefit of owner. 66 A.L.R. 1035.

Purchaser under irregular or imperfect foreclosure sale, rights and remedies of, as against redemptioner. 73 A.L.R. 635.

Quitclaim deed by mortgagor as passing equity of redemption. 44 A.L.R. 1273, 162 A.L.R. 556.

Rents and profits, or rental value, during the redemption period, following tax sale, who entitled to. 147 A.L.R. 1084.

Right of junior mortgagee, whose mortgage covers only a part of land subject to first mortgage to redeem pro tanto, where he was not bound by foreclosure sale. 46 A.L.R.3d 1362.

Trust arising from oral agreement to permit owner to redeem property or to redeem it for him. 27 A.L.R.2d 1285.

Who may redeem, from a tax foreclosure or sale, property to which title of record ownership is held by corporation. 54 A.L.R.2d 1172.

66-8-102. Period in which redeemable.

Real estate sold for debt and made redeemable shall continue redeemable to the debtor and the debtor's creditors for two (2) years after the sale, upon the terms set forth in this chapter, no matter how often it had been previously redeemed.

Code 1858, § 2130 (deriv. Acts 1820, ch. 11, § 5; 1842 (E.S.), ch. 6, § 9); Shan., § 3817; Code 1932, § 7742; T.C.A. (orig. ed.), § 64-802.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 619.

Tennessee Jurisprudence, 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, § 9.

Law Reviews.

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

NOTES TO DECISIONS

1. Sale for Debt.

Lands are not sold for debt when sale made for alimony in a divorce case, under a decree awarding no specific sum to the wife, but directs that land be sold and one half proceeds be paid to her. White v. Bates, 89 Tenn. 570, 15 S.W. 651, 1890 Tenn. LEXIS 80 (1891).

2. Different Rights of Redemption Distinguished.

The statute giving the right of redemption to the debtor gives a similar right to his creditors. The inducement prompting the creation and bestowal of these two rights are different. The one is to enable the debtor to regain his land, and the other is to enable the creditor to secure his debt. These two rights of redemption exist independently of each other, and the one right is in no manner affected by the other. The redemption rights of the debtor and his creditors are distinct and independent rights in each to acquire the legal title of the purchaser, or last redeeming creditor, without in any manner obstructing the rights of the other. Bledsoe v. McCorry, 68 Tenn. 320, 1878 Tenn. LEXIS 16 (1878); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884).

3. Sale by Execution Debtor — Effect on Judgment Creditor's Rights.

An execution debtor cannot, even by an absolute deed for a valuable consideration, release his equity of redemption so as to defeat judgment creditor's right to redeem. Carden v. Spilman, 1 Shan. 10 (1847).

4. Judgment Creditor as Debtor's Administrator — Rights.

Where the son is a judgment creditor of his deceased father, and is the administrator of his estate, he may redeem land which belonged to his father and had been sold for the payment of his debts, and hold the same as any other redeeming creditor, his fiduciary relation as administrator does not alter the case. Harris v. Harris, 67 Tenn. 474, 1875 Tenn. LEXIS 69 (1875).

5. Redemption by Debtor or Assignee — Effect on Creditor's Rights.

If the debtor himself exercises the right of redemption, and thus gets the title back in himself, the right of redemption by his creditors is gone, because entirely unnecessary, as the land is immediately subject to levy, but the debtor's assignment of his right of redemption, or his sale and conveyance purporting to convey the absolute title, without any previous redemption by himself, does not defeat the right of his creditors to redeem the land until such assignee or purchaser exercises the right. McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Pearcy v. Tate, 91 Tenn. 478, 19 S.W. 323, 1892 Tenn. LEXIS 18 (1892).

Collateral References.

Constitutionality of statute extending period for. 1 A.L.R. 143, 38 A.L.R. 229, 89 A.L.R. 966.

Emergency legislation extending time for redemption. 86 A.L.R. 1539, 88 A.L.R. 1519, 96 A.L.R. 312, 96 A.L.R. 826.

Extension of time to redeem from mortgage foreclosure sale, by agreement or other acts of one person entitled to redeem, as inuring to benefit of other person entitled to redeem. 161 A.L.R. 201.

Financial depression as justification for extending time for redemption or other relief to mortgagor. 90 A.L.R. 1330, 94 A.L.R. 1352, 96 A.L.R. 853, 97 A.L.R. 1123, 104 A.L.R. 375.

Imprisonment as extending time for. 18 A.L.R. 531.

Junior lienor, time for redemption by, as affected by failure to make him a party to suit to foreclose senior mortgage or properly to serve him with process in such suit. 134 A.L.R. 1516.

Oral agreement, effect of, to enlarge time for redemption of real property from sale under mortgage or other lien. 54 A.L.R. 1207.

Soldiers' and Sailors' Civil Relief Act as extending redemption period. 158 A.L.R. 1456.

66-8-103. Waiver of right in mortgage or trust deed.

The right of redemption does not extend to any sale under and by virtue of a power contained in any deed of trust, mortgage, or other instrument, whereby the right is waived or surrendered by such mortgage or conveyance.

Code 1858, § 2125 (deriv. Acts 1857-1858, ch. 46, § 1); Shan., § 3812; Code 1932, § 7737; T.C.A. (orig. ed.), § 64-803.

Cross-References. Waste and trespass, title 29, ch. 36.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Adverse Possession, § 25; 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, §§ 24, 25.

Law Reviews.

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

Waiver of Redemption Rights in Tennessee Mortgages: Discarding the Contracts Clause and Common-Law Concepts, 55 Tenn. L. Rev. 733 (1989).

Collateral References.

Appeal or staying execution on judgment, constitutionality and construction of statute as to effect of, on right to redeem from judicial sale. 107 A.L.R. 879.

Deed from mortgagor or privy to mortgage holder as extinguishing equity of redemption. 129 A.L.R. 1435.

Junior mortgagee's equity of redemption as affected by reacquisition by mortgagor or his grantee of title through foreclosure of first mortgage. 51 A.L.R. 445, 111 A.L.R. 1285.

66-8-104. Timber on land subject to redemption — Waste.

No person holding the temporary title to real estate, subject to redemption, shall use more of the wood growing thereon than the timber required to keep the improvements in good repair, and firewood necessary for those occupying the same; nor shall that person destroy or remove from the land any fencing or buildings.

Code 1858, § 2133 (deriv. Acts 1843-1844, ch. 170, § 1); Shan., § 3820; Code 1932, § 7745; T.C.A. (orig. ed.), § 64-804.

Collateral References.

Purchaser of timber from mortgagor, rights and liabilities of. 57 A.L.R. 454.

Right of mortgagor or owner of equity of redemption to cut timber. 57 A.L.R. 451.

66-8-105. Remedies against waste.

The person having the right to redeem such real estate may file a bill in chancery for an injunction to restrain waste; and, after redemption, may recover damages occasioned by such waste.

Code 1858, § 2134 (deriv. Acts 1843-1844, ch. 170, § 2); Shan., § 3821; Code 1932, § 7746; T.C.A. (orig. ed.), § 64-805.

Collateral References.

Oil or gas resources of land, exploitation of, by mortgagor, or purchaser or lessee subsequently to mortgage, as waste as against mortgagee. 95 A.L.R. 957.

Receiver, right of mortgagee to appointment of, to prevent waste. 26 A.L.R. 55, 36 A.L.R. 609, 55 A.L.R. 533, 87 A.L.R. 1008, 111 A.L.R. 730, 82 A.L.R.2d 1075.

Third person, remedy of mortgagee or other holder of lien on real property against, for damage to or trespass on property. 37 A.L.R. 1120, 48 A.L.R. 1156.

Trustee's duty to bondholders to prevent waste. 90 A.L.R.2d 501.

66-8-106. Purchase price paid on redemption.

Any debtor whose interest in real estate has been so sold, and is subject to redemption, may redeem the interest by paying to the purchaser, or to anyone claiming under the purchaser, the amount bid or paid by the purchaser, with interest thereon at the current composite prime rate as published by the federal reserve board as of the date of purchase per annum, together with all other lawful charges.

Code 1858, § 2126 (deriv. Acts 1820, ch. 11, § 2; 1842 (E.S.), ch. 6, § 6); Shan., § 3813; Code 1932, § 7738; T.C.A. (orig. ed.), § 64-806; Acts 1983, ch. 182, § 1.

Cross-References. Deed on redemption, § 26-5-113.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, §§ 9-21.

Law Reviews.

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

NOTES TO DECISIONS

1. Required Payments by Debtor.

A debtor seeking, through chancery, to enforce the redemption under a proper tender previously made, must pay the amount for which the land sold and also any judgment which the party, from whom the redemption is sought to be made, may enforce against the land after redemption. Cooley v. Weeks, 18 Tenn. 141, 1836 Tenn. LEXIS 110 (1836).

2. “All Other Lawful Charges” — Meaning.

The question, whether the words “all other lawful charges” in this section include the cost of the probate and registration of the sheriff's deed, is reserved. Smith v. Kincaid, 29 Tenn. 73, 1849 Tenn. LEXIS 11 (1849); Graves v. McFarlane, 42 Tenn. 167, 1865 Tenn. LEXIS 36 (1865).

3. To Whom Payment Made.

Upon the redemption of land, made after the death of the purchasing creditor, the redemption money must be paid to his personal representative, and not to his heirs, where he had not taken the sheriff's deed, but if he had taken such deed, and had thus become vested with the legal title, then the money should be paid to his heirs. Campbell v. Campbell, 40 Tenn. 325, 1859 Tenn. LEXIS 89 (1859).

Where the words “agent for the plaintiff” appear after the name of the purchaser in the sheriff's return, the money may be paid to such purchaser and the redemption of the land be thus effected. Darling v. Lewis, 58 Tenn. 125, 1872 Tenn. LEXIS 236 (1872).

4. Partial Payments in Redemption.

The purchaser may receive partial payments from the debtor, or demand the full amount in one payment. If the partial payments made within the prescribed time repay the purchase money, with interest and other lawful charges, the redemption is complete, but if such payments do not so repay such sum, the purchaser, in the absence of any agreement to the contrary, becomes debtor to him whose land he has purchased for the amount of the partial payments, for such indulgence cannot be construed as a waiver of his title acquired by the purchase, and its conversion into a mortgage. Rambo v. Donelly, 68 Tenn. 418, 1877 Tenn. LEXIS 38 (1877).

5. Rights of Judgment Debtor.

A redeeming judgment debtor does not hold his redeemed land subject to further redemption by a bona fide creditor. Fite v. Wood, 194 Tenn. 308, 250 S.W.2d 543, 1952 Tenn. LEXIS 430 (1952).

6. Adverse Possession as Bar to Right to Redeem.

The purchase of the estate of a tenant by the curtesy, made by a cotenant at an execution sale, is an admission of such tenant's title at that time, so that such purchaser cannot set up adverse possession previous to such purchase in bar of such tenant's right of redemption. Smith v. Kincaid, 29 Tenn. 73, 1849 Tenn. LEXIS 11 (1849).

7. Assignee of Judgment Debtor's Right of Redemption — Rights.

Where a judgment debtor assigns his right of redemption for a valuable consideration and without fraud, his assignee acquires whatever right of redemption the assignor had and when such assignee redeems the land it is not subject to further redemption by a creditor of the judgment debtor. Fite v. Wood, 194 Tenn. 308, 250 S.W.2d 543, 1952 Tenn. LEXIS 430 (1952).

8. Judgment Debtor's Grantee — Rights.

The redemption must be made in the name of the debtor for the benefit of a previous purchaser and grantee. While a purchaser, with a conveyance, from the debtor, after a judgment lien attached to the land and previous to the execution sale, cannot redeem in his own name, yet he may redeem in the name of the debtor, and, when such redemption is made by payment, the right secured inures to the benefit of such previous purchaser, who may file a bill to enforce the right by compelling a conveyance from the purchasing creditor, without making the debtor a party. Jones v. Planters' Bank, 24 Tenn. 619, 1845 Tenn. LEXIS 147 (1845).

When purchaser at sale was assignee of judgment under which sale was made and bid its amount and added the amount of another judgment in his hands for collection, but paid no cash on his bid, the grantee of the judgment debtor not a party will be permitted to redeem upon payment of the judgment under which property was sold. Campbell v. Atwood, 47 S.W. 168, 1897 Tenn. Ch. App. LEXIS 135 (1897).

9. Debtor's Vendee After Agent's Redemption — Rights.

Where a father made to his son a parol gift of land and put him in possession, which he enjoyed as his own for several years, but about six years thereafter, the land was sold under execution as the land of the father and purchased by the execution creditor, and thereafter, in the same year, a third person, as the agent of the father, or on his behalf paid the redemption money to such purchasing creditor, but took from him a written direction to the sheriff to make himself a title to the land, which the sheriff accordingly did, and, subsequently, the father gave the son his title bond reciting the payment of a money consideration, after which the son, with the knowledge of the father and the third party, and as owner of the land, made valuable and expensive improvements, and, within the redemption period, tendered to the third party the redemption money, which he refused, and denied the right of redemption, the son may, upon a bill filed against such third person and the father, with a pro confesso against the father, draw from such third person to himself the legal title so outstanding in him, upon the payment of the amount of such redemption money. Kennedy v. Howard, 25 Tenn. 64, 1845 Tenn. LEXIS 24 (1845); Hepburn v. Kerr, 28 Tenn. 726, 1849 Tenn. LEXIS 115, 51 Am. Dec. 685 (1849); Guinn v. Locke, 38 Tenn. 110, 1858 Tenn. LEXIS 131 (Tenn. Sep. 1858).

10. Redemption Money in Court — Exemption from Levy.

Money tendered in redemption of land and refused, and paid into court under a bill filed to enforce the redemption, is in the custody of the law, and is not subject to garnishment or attachment. Pennebaker v. Tomlinson, 1 Cooper's Tenn. Ch. 111 (1873).

11. Cotenant's Agreement.

Where a cotenant of land about to be sold contracted with defendant to redeem and hold it as security, the contract inured to the benefit of all cotenants. Hall v. Calvert, 46 S.W. 1120 (Tenn. Ch. App. 1897).

Collateral References.

Extension of existing mortgage by subsequent agreement, necessity that redemptioner pay additional indebtedness covered by. 76 A.L.R. 590.

Junior lienor's right in respect of redemption as affected by failure to make him a party to suit to foreclose senior mortgage or properly to serve him with process in such suit. 134 A.L.R. 1507.

66-8-107. Advance on bid by purchasing creditor.

If the purchaser is a bona fide creditor by judgment, decree, or debt acknowledged by deed, and, within twenty (20) days after the sale, the purchaser makes an advance on the purchaser's bid, and credits the purchaser's debt by depositing a receipt therefor with the clerk of the court in which the judgment or decree was rendered, or, if the sale was under a deed of trust or mortgage, the purchaser acknowledges a receipt for such advance before the county clerk for registration, and causes the same to be registered in the county where the land lies, then the purchaser shall hold the property subject to redemption at the price bid and such an advance, just as if the whole sum had been bid at the time of the sale.

Code 1858, § 2127 (deriv. Acts 1820, ch. 11, § 4; 1842 (E.S.), ch. 6, §§ 6, 7); Shan., § 3814; Code 1932, § 7739; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-807.

Rule Reference. This section is referred to in Rule 12 of the Rules of Practice and Procedure of the Shelby County Chancery Court.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, §§ 4, 10, 12, 14, 21.

NOTES TO DECISIONS

1. Advance Bid — Nature.

The advance bid, within 20 days after the sale, is to be treated as if it were his original bid, and the title acquired by a purchasing creditor so advancing cannot be divested out of him except by the payment of both sums. Toombs v. Palmer, 51 Tenn. 331, 1871 Tenn. LEXIS 170 (1871); Cooper v. Murfreesboro Sav. Bank, 64 Tenn. 636, 1875 Tenn. LEXIS 145 (1875).

2. Exclusiveness of Statutory Remedy.

A purchasing creditor in a legal condition to advance his own bid, or to redeem from another redeeming creditor, cannot, by bill in chancery, subject the debtor's right of redemption to the satisfaction of the balance of his debt. The statutes have prescribed a simple and economical mode of procedure for the redemption of land by the debtor and his creditors. Herndon v. Pickard, 73 Tenn. 702, 1880 Tenn. LEXIS 201 (1880); Weakley v. Cockrill, 74 Tenn. 270, 1880 Tenn. LEXIS 246 (1880); Templeton v. Mason, 107 Tenn. 625, 65 S.W. 25, 1901 Tenn. LEXIS 117 (1901).

This provision excludes other modes of effecting redemption by a creditor who has become the purchaser at the sale. Weakley v. Cockrill, 74 Tenn. 270, 1880 Tenn. LEXIS 246 (1880); Templeton v. Mason, 107 Tenn. 625, 65 S.W. 25, 1901 Tenn. LEXIS 117 (1901).

3. Procedure.

Land was sold to a judgment creditor, who within 20 days appeared before the clerk and master to advance his bid, the official made and signed an entry, under the sheriff's return, on the docket to the effect that the creditor raised the bid to cover the balance of cost and debt. This entry was not a compliance with the statute and was ineffectual. The statute must be strictly followed, and applies to all judgment creditors alike. The entry was not equivalent to the receipt required, not being assigned by the creditor, and was not definite or determinate as to the amount advanced. Rogers v. Rogers, 35 S.W. 890, 1895 Tenn. Ch. App. LEXIS 27 (Tenn. Ch. App. 1895).

A purchasing creditor must advance his bid, if he desires to advance it at all, within 20 days after the sale, and an advance made after the expiration of the 20 days allowed by the statute is void. Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

4. Duration of Time to Advance.

The right of the purchasing creditor to advance his own bid is continuous and exclusive for the whole 20 days, at least until once exercised within such period, as against the debtor proposing to redeem as well as against a bona fide creditor, with a legally ascertained debt, proposing to redeem; and, if such right is exercised at any time within that period, it will render nugatory a previous tender in redemption, whether made by the debtor or his judgment creditor, or by a creditor having a debt acknowledged by deed. Hawkins v. Jamison, 8 Tenn. 83, 1827 Tenn. LEXIS 14 (1827); Cooley v. Weeks, 18 Tenn. 141, 1836 Tenn. LEXIS 110 (1836); Killibrew v. Elliott, 30 Tenn. 442, 1850 Tenn. LEXIS 149 (1850); Hill v. Walker, 46 Tenn. 424, 1869 Tenn. LEXIS 77 (1869); Holmes v. Jarrett Moon & Co., 54 Tenn. 506, 1872 Tenn. LEXIS 79 (1872); Anderson, Green & Co. v. Ryan & Co., 69 Tenn. 658, 1878 Tenn. LEXIS 151 (1878); Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

5. Persons Entitled to Advance Bid.

To entitle the purchasing creditor to advance his bid he must be a bona fide creditor by judgment, or decree, or by debt acknowledged by deed, and to entitle a creditor to redeem from the purchaser or a redeeming creditor, he must likewise be such a bona fide creditor. Woods v. McGavock, 18 Tenn. 133, 1836 Tenn. LEXIS 109 (1836); Chester v. Greer, 24 Tenn. 26, 1844 Tenn. LEXIS 5 (1844); Battle v. Shute, 40 Tenn. 547, 1859 Tenn. LEXIS 159 (1859).

A purchasing creditor, whether he be the creditor at whose instance the land was sold for the payment of his debt or some other bona fide creditor, may advance his bid. Killibrew v. Elliott, 30 Tenn. 442, 1850 Tenn. LEXIS 149 (1850).

The purchasing creditor entitled to advance his bid must be such a creditor at the time he makes the purchase, and he cannot, after his purchase, acquire, by purchase and assignment, judgments or decrees or such acknowledged debts, and advance his bid with them. Killibrew v. Elliott, 30 Tenn. 442, 1850 Tenn. LEXIS 149 (1850).

A surety upon a debt secured by the principal debtor's deed of trust and who purchases the land at the trustee's sale, is not a creditor of such principal debtor by “debt acknowledged by deed,” so as to be entitled to advance his bid as a purchasing creditor. Such surety could only become the creditor of such principal debtor, because of the suretyship, by the payment of the debt, which fact of indebtedness should have been acknowledged by deed. Settle v. Wendel, 68 Tenn. 577, 1877 Tenn. LEXIS 53 (1877).

6. Joint Purchasing Creditors — Mode of Advancing Bid.

The right of advancing their own bid by joint purchasing creditors may be exercised by each of them advancing the bid by the amount of his separate or several judgment or judgments, so that they jointly advance their joint bid by the aggregate amount of each of their separate or several judgments, as shown by their receipts filed as required. Anderson, Green & Co. v. Ryan & Co., 69 Tenn. 658, 1878 Tenn. LEXIS 151 (1878).

7. Exercise of Right to Advance — Effect.

The right is to advance, and not to make successive advances as other creditors may come forward to redeem the land, and the right would probably be extinguished by a single exercise of the power. Anderson, Green & Co. v. Ryan & Co., 69 Tenn. 658, 1878 Tenn. LEXIS 151 (1878).

8. Failure to Advance Bid — Effect on Rights.

Where the purchasing creditor fails to advance his bid within the 20 days, and thereupon another judgment creditor of the debtor redeems from him, he may then redeem the land from the redeeming creditor. Holmes v. Jarrett Moon & Co., 54 Tenn. 506, 1872 Tenn. LEXIS 79 (1872).

The only right which the purchasing creditor loses by failing to advance his bid within 20 days is the special preference during that time. Afterwards, he has the same rights as other judgment creditors. Holmes v. Jarrett Moon & Co., 54 Tenn. 506, 1872 Tenn. LEXIS 79 (1872); Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

9. Protection of Prior Liens.

A purchasing creditor has no right to advance his bid by crediting his mortgage debt, to the prejudice of a prior mortgage or lien in favor of another party, who may redeem the land from him within two years by paying him the amount of his original bid at the execution sale, or by tendering the same to him and filing a bill in chancery to enforce the redemption. Cooper v. Murfreesboro Sav. Bank, 64 Tenn. 636, 1875 Tenn. LEXIS 145 (1875).

Where a subsequent mortgagee became the purchaser, at a sale under an execution issued upon a judgment that was a prior lien on the land, at a sum equal to the judgment debt and costs, and within 20 days advanced his bid to a certain sum by crediting the mortgage debt with the sum advanced, and thereafter the administrator of a creditor secured by a deed of trust prior to the mortgage, but inferior to the judgment lien so enforced by the execution sale, caused the trustee to sell the land, and became the purchaser thereof, and, within the redemption period, tendered to the execution purchaser and subsequent mortgagee the amount of his original bid at the execution sale, which was refused, with the claim that he was entitled, not only to that sum, but also to the amount of his advance bid, and upon a bill filed by the administrator to enforce the redemption, the court held that he was entitled to enforce the redemption, but on account of particular circumstances the supreme court gave the execution purchaser so advancing his bid the option to pay to the administrator the debt secured by the deed of trust, with interest, or to convey the land to the trustee upon the payment of the sum bid at the execution sale, with interest. Cooper v. Murfreesboro Sav. Bank, 64 Tenn. 636, 1875 Tenn. LEXIS 145 (1875).

Where state, county and municipality have taxes to same delinquent, a municipality cannot by advancing its bid at sale, secure satisfaction in whole to the exclusion of the state and county, both having superior claims. Dyersburg v. Anderson, 164 Tenn. 495, 51 S.W.2d 495, 1932 Tenn. LEXIS 14 (1932).

10. Bankruptcy — Effect.

A creditor secured by a deed of trust and purchasing at the sale thereunder is not prevented from advancing his bid, within the 20 days, by the fact that, subsequent to the execution of the deed of trust and before the sale thereunder, the makers of the deed of trust became bankrupts, and their equity of redemption passed to the assignee in bankruptcy, because such advance bid made by the purchasing creditor is to be treated as if it were his original bid. However, no other redemption can be made by such debtors or their creditors; but the assignee in bankruptcy may redeem from such purchasing creditor by tendering and paying to him the amount of his original bid and advance bid within the 20 days. Toombs v. Palmer, 51 Tenn. 331, 1871 Tenn. LEXIS 170 (1871).

11. Impeachment of Sheriff's Return.

Where the creditor purchases the land for a certain sum, and, thereafter, within the 20 days, he undertakes to advance his bid by procuring the sheriff to make a false return of sale to him at a price equal to the amount of the judgment debt and costs, a sum more than thrice the amount of the original bid, the sheriff's return may be impeached, and such advance will be held to be a fraud upon the redemption right of the debtor, and, where the purchasing creditor associated with himself a third person, who was not a creditor of the indebted landowner, as a joint purchaser with himself, by directing and procuring the sheriff's deed to be made to them jointly, such third party acquired no right to the land that he could assert after the purchasing creditor allowed the debtor to redeem the land, though the redemption period had expired, but such third party is entitled to reimbursement alone upon the principle that the complainant seeking equity must do equity, because the excess over the original bid advanced for the land inured to his benefit by extinguishing the balance of the judgment against him. Wood v. Chilcoat, 41 Tenn. 423, 1860 Tenn. LEXIS 86 (1860).

66-8-108. Redemption from redeeming creditor.

A bona fide creditor, who redeems from the purchaser at the sale, shall hold the property subject to redemption by the original debtor, or any other of the original debtor's creditors, upon the same terms on which it was redeemable in the hands of the first purchaser or any person claiming under that purchaser; that is to say, by the party proposing to redeem paying or tendering to the person holding the land the amount of money paid or credited by that purchaser, with interest at the current composite prime rate as published by the federal reserve board as of the date of purchase per annum thereon, and also agreeing to pay to the debtor the further sum of ten percent (10%) or more on the sum bid for the land when sold, or crediting the debtor with that amount or more on the debt owing to the purchaser by the debtor, or with a sum equal to ten percent (10%) or more upon the judgment of the creditor, at the election of the creditor.

Code 1858, § 2128 (deriv. Acts 1820, ch. 11, § 3; 1842 (E.S.), ch. 6, §§ 6, 9); Acts 1859-1860, ch. 84; Shan., § 3815; Code 1932, § 7740; T.C.A. (orig. ed.), § 64-808; Acts 1983, ch. 182, § 2.

Cross-References. Deed on redemption, § 26-5-113.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, §§ 12, 21.

Law Reviews.

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

NOTES TO DECISIONS

1. Redeeming Creditor — Status and Rights.

The redeeming creditor is substituted to the place of the purchaser, and is, by operation of law, the assignee of the purchaser's bid, and acquires no better title than the purchaser acquired. Keeling v. Heard, 40 Tenn. 592, 1859 Tenn. LEXIS 175 (1859); Edwards v. Ervin, 2 Shan. 510 (1877); McClean v. Harris, 82 Tenn. 510, 1884 Tenn. LEXIS 153 (1884); Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886).

When the right of redemption is once exercised by the debtor or his assignee, no creditor can thereafter redeem. Reaves v. Bank of Hartsville, 64 S.W. 307, 1900 Tenn. Ch. App. LEXIS 182 (Tenn. Ch. App. 1900); Fite v. Wood, 194 Tenn. 308, 250 S.W.2d 543, 1952 Tenn. LEXIS 430 (1952).

Until the right of redemption is exercised by judgment debtor or his assignee any bona fide creditor has the right under this section to redeem the land from the purchaser at the execution sale. Fite v. Wood, 194 Tenn. 308, 250 S.W.2d 543, 1952 Tenn. LEXIS 430 (1952).

A bona fide creditor who redeems the land must hold it subject to redemption by any other such creditor of the judgment debtor. Fite v. Wood, 194 Tenn. 308, 250 S.W.2d 543, 1952 Tenn. LEXIS 430 (1952).

2. Duties of Creditor Prerequisite to Redemption.

The redeeming creditor, whose tender in redemption has been accepted by the purchaser, must actually make the payment or give the credit as a condition precedent to the effectuation of the redemption. Elliot v. Patton, 12 Tenn. 9, 12 Tenn. 10, 1833 Tenn. LEXIS 4 (1833); Cooley v. Weeks, 18 Tenn. 141, 1836 Tenn. LEXIS 110 (1836); Hill v. Walker, 46 Tenn. 424, 1869 Tenn. LEXIS 77 (1869); Hurt v. Brien, 1 Cooper's Tenn. Ch. 443 (1873); Burton v. Robinson, 68 Tenn. 364, 1878 Tenn. LEXIS 27 (1878).

A judgment creditor may redeem his debtor's land from a purchaser at judicial sale, without paying the amount secured by the debtor's unregistered deed of trust given thereon to such purchaser subsequently to such judicial sale. Polk v. Mitchell, 85 Tenn. 634, 4 S.W. 221, 1887 Tenn. LEXIS 5 (1887).

3. Assignee of Judgment Debt — Right to Redeem.

The assignee may redeem from the last redeeming creditor. Neal v. Read, 66 Tenn. 333, 1874 Tenn. LEXIS 138 (1874).

The assignee of a judgment debt may redeem the land from the purchaser, though it was assigned to him on the day the redemption was made, the last day of the redemption period. Bledsoe v. McCorry, 68 Tenn. 320, 1878 Tenn. LEXIS 16 (1878).

4. Creditor by Judgment in Name of Himself and Wife.

One is a bona fide creditor by judgment in favor of himself and wife, and is entitled to exercise the right of redemption from a purchaser or holder of the land, by the payment or tender of the redemption money, and by crediting such judgment as required by statute, for he has the right to collect such judgment, and he might be treated as the agent of his wife, if necessary, in such case. Burton v. Robinson, 68 Tenn. 364, 1878 Tenn. LEXIS 27 (1878).

5. Creditors Jointly Redeeming.

Where judgment creditors join in the redemption of land, the one advancing the redemption money, or more than his share, must be reimbursed before there is any money to be applied to their judgments credited and advanced, after which any balance will be applied proportionately to their judgments, and, if, after satisfying the judgments, there should be any balance, they will share in the same jointly, and the reimbursement must be made before the creditors of the other redeeming creditor can receive anything. Withers v. Pemberton, 43 Tenn. 56, 1866 Tenn. LEXIS 15 (1866); Pearl v. Pearl, 1 Cooper's Tenn. Ch. 206 (1873); Brown v. Bigley, 3 Cooper's Tenn. Ch. 618 (1878).

6. Creditor Redeeming After Debtor's Death.

Where a judgment debtor dies after the sale of his land for the payment of another judgment, it is not necessary for the judgment creditor to revive his judgment against the heirs, in order to be entitled to redeem the land from the purchaser. Bledsoe v. McCorry, 68 Tenn. 320, 1878 Tenn. LEXIS 16 (1878); Puckett v. Richardson, 74 Tenn. 49, 1880 Tenn. LEXIS 210 (1880); Hudson v. Conway, 77 Tenn. 410, 1882 Tenn. LEXIS 76 (1882).

A creditor by debt acknowledged by deed need not, after the debtor's death, obtain judgment against the personal representative, and take other proceeding by scire facias, or otherwise, against the heirs, to entitle him to redeem the debtor's land sold subject to redemption. Hudson v. Conway, 77 Tenn. 410, 1882 Tenn. LEXIS 76 (1882).

7. Redemption from Joint Purchasers.

Redemption from the joint purchasers of land, sold subject to redemption, may be effected by payment or tender, to each, of his share of the purchase price paid, and as they are tenants in common, a tender in redemption may be effective as to one, though noneffective as to the other. Polk v. Mitchell, 85 Tenn. 634, 4 S.W. 221, 1887 Tenn. LEXIS 5 (1887).

8. Credit to Debtor by Redeeming Creditor — Mode of Giving.

The redeeming creditor, after paying the money to the purchaser or holder of the land, must, by some positive act, give the debtor the required credit. The statute does not prescribe any mode in which the credit must be given to the debtor. Section 66-8-107 prescribed the mode of giving the credit, where the purchaser advances his own bid, but this provision is not held to be applicable in redemption by a creditor, for the question is reserved. However, it is stated that the mode, prescribed in § 66-8-107 should be adopted and pursued by the redeeming creditor, as the safer course. Hill v. Walker, 46 Tenn. 424, 1869 Tenn. LEXIS 77 (1869); Hurt v. Brien, 1 Cooper's Tenn. Ch. 443 (1873); Burton v. Robinson, 68 Tenn. 364, 1878 Tenn. LEXIS 27 (1878).

The receipt of a redeeming creditor, purporting to give the judgment debtor the required credit, filed with the clerk, without personal or actual notice to the debtor, must contain on its face sufficient information to be operative to give him notice that the credit is given to him on certain judgments in the redemption of certain land, so as to enable him to redeem the land, otherwise the redemption will not be operative against the debtor, and recoveries in ejectment against such debtor's tenants will be set aside, and the title divested out of such redeeming creditor and vested in the debtor, and such redeeming creditor will be accountable for rents, but will be entitled to credit for the redemption money so paid, with interest, and costs. Instances of receipts held to be void. Hurt v. Brien, 1 Cooper's Tenn. Ch. 443 (1873).

9. Purchaser's Unsatisfied Judgments No Bar to Redemption.

A judgment creditor, who has purchased or redeemed his debtor's lands and who has taken the sheriff's deed therefor, but who has not advanced his bid within the time and upon the terms prescribed, cannot hold the land against his debtor, or the assignee of his debtor's right of redemption, upon payment or tender of the amount of his bid, with interest and costs, because of unsatisfied judgments held by him against the redeeming debtor or his assignee, but he will be compelled to submit to the redemption, and will not be permitted, after such tender, to withhold the legal title from the debtor or his assignee, as security for other unsatisfied judgments he may hold against the debtor or his assignee. Ewing v. Cook, 85 Tenn. 332, 3 S.W. 507, 1886 Tenn. LEXIS 50, 4 Am. St. Rep. 765 (1886); Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

10. Void or Voidable Sale — Rights of Redeeming Creditors.

Where the redeeming creditor acquires no title to the land, for the reason that the purchaser acquired no title, because the judgment upon which the execution issued was previously extinguished by payment, he may recover the redemption money from such purchaser, especially where he was the plaintiff in the judgment. Keeling v. Heard, 40 Tenn. 592, 1859 Tenn. LEXIS 175 (1859); Edwards v. Ervin, 2 Shan. 510 (1877).

Where the purchaser acquired no title, for the reason that the judgment of condemnation, though pronounced, was not entered of record, but was omitted from the entry of the justice's papers on the minutes, and not on account of the judgment debtor's defective or imperfect title to the land, a creditor who is induced to redeem upon the misrepresentations of such party that the proceedings were regular, may recover the redemption money so paid by him, and he is not barred of a recovery by the rule of caveat emptor. Neal v. Read, 66 Tenn. 333, 1874 Tenn. LEXIS 138 (1874).

Whether a sale of separate and distinct lots, or parcels of land, in gross for an aggregate sum, be considered as absolutely void or only voidable by the debtor, his creditors cannot safely redeem the land, because they cannot assume that the debtor may not afterwards elect to treat the sale as void, and thus defeat their title. Mount, Hall & Co. v. Hall & Hall, 3 Shan. 568 (1875); Cooke, Settle & Co. v. Walters, 70 Tenn. 116, 1878 Tenn. LEXIS 193 (1878).

The rule of caveat emptor applying to purchasers at execution sales of lands applies to the redemption made by a creditor, and the last redeeming creditor has no right to recover the money paid by him, whether there was failure of title because there was no title in the debtor, or because the proceedings were so defective as not to pass his title, where there were valid and subsisting judgments upon which the sales and previous redemptions were based, and where there was no fraud or misrepresentation. Edwards v. Ervin, 2 Shan. 510 (1877).

Where the title has failed, the last redeeming creditor is entitled to have the satisfaction of his own judgment against the debtor set aside, as well as the judgment upon which the original sale was made, and the judgments of all previously redeeming creditors against the common debtor whose supposed land was so attempted to be sold and redeemed, and to have the judgments revived for his benefit. Edwards v. Ervin, 2 Shan. 510 (1877).

As a necessary condition of the right to redeem there must be a sale at which the purchaser took title and the redemptioners take through him. Cannon Mills, Inc. v. Spivey, 208 Tenn. 419, 346 S.W.2d 266, 1961 Tenn. LEXIS 301 (1961).

11. Creditor's Estoppel to Redeem.

The creditor, for the payment of whose debt the debtor's land was sold, cannot enforce a redemption from the purchaser who became such at his solicitation, and under a promise from him not to redeem the land, and who, by such promise, repeated after the purchase, was induced to expend considerable sums in improvements. Woods v. McGavock, 18 Tenn. 133, 1836 Tenn. LEXIS 109 (1836).

12. Receipt for Redemption Money.

The receipt for the redemption is properly written on the execution docket, and may be signed by the party from whom the land is redeemed, or by his attorney, and, when such party is a nonresident, then it may be signed by the clerk to whom the money is paid, but the validity of the redemption does not depend upon the entry of the evidence of it on the docket, or the proper execution of the receipt. Holmes v. Jarrett Moon & Co., 54 Tenn. 506, 1872 Tenn. LEXIS 79 (1872).

13. Facts Authorizing Sheriff's Deed to Redeeming Creditor.

Where the purchaser's receipt to a redeeming creditor recites all the facts necessary to show a complete redemption from him, and the redeeming creditor had otherwise complied with the statute in crediting and paying the debtor, the sheriff is authorized to make him a deed, without a transfer of the certificate of sale, and without any formal direction from the purchaser. Bledsoe v. McCorry, 68 Tenn. 320, 1878 Tenn. LEXIS 16 (1878).

14. Judgment — What Constitutes.

Question is reserved by treating it as if conceded that judgments entered on the execution docket after condemnation in cases of land levied on under a justice's executions are judgments rendered in the circuit court within the meaning of the law. Hurt v. Brien, 1 Cooper's Tenn. Ch. 443 (1873).

Collateral References.

Assignor or one who had parted with his interest in the property, effect of redemption by. 57 A.L.R. 1021.

Creditor or encumbrancer redeeming from mortgage sale as acquiring title and rights of sale purchaser. 135 A.L.R. 196.

Lien intervening that under which property was sold and that under which it was redeemed as affected by the redemption. 26 A.L.R. 435.

Mortgagee's redemption of mortgaged property from prior foreclosure sale as affecting his right to personal judgment for mortgage debt. 95 A.L.R. 105.

Mortgages: Effect on subordinate lien of redemption by owner or assignee from sale under prior lien. 56 A.L.R.4th 703.

Right of junior mortgagee, whose mortgage covers only a part of land subject to first mortgage to redeem pro tanto, where he was not bound by foreclosure sale. 46 A.L.R.3d 1362.

Rights and remedies of mortgagee where mortgaged property is bid in on foreclosure at less than mortgage debt and it is redeemed by mortgagor or latter's grantee. 128 A.L.R. 796.

Satisfaction in whole or in part of debt due to redeeming creditor, redemption as, where property is worth more than the redemption cost. 138 A.L.R. 949.

66-8-109. Advance on redemption price by redeeming creditor.

When any such creditor has redeemed land from the original purchaser, or from one who has previously redeemed, that creditor may, within twenty (20) days after such redemption, advance upon the bid any sum to the extent of that creditor's debt or debts, just as if such creditor had been the original purchaser.

Code 1858, § 2129 (deriv. Acts 1851-1852, ch. 181, § 2); Shan., § 3816; Code 1932, § 7741; T.C.A. (orig. ed.), § 64-809.

NOTES TO DECISIONS

1. Redeeming Creditor — Status.

A redeeming creditor stands in the shoes of the original purchaser, and may advance his own bid, within 20 days, but not thereafter, as if he had been the original purchaser, and he holds the land as such, and takes only such title as the original purchaser acquired. Gray v. Baird, 72 Tenn. 212, 1879 Tenn. LEXIS 23 (1879); Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

2. Time Limit.

This statute gives the redeeming creditor the right, within 20 days, to advance his bid, but it gives only 20 days to advance the bid after each purchase or redemption. Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

66-8-110. Total amount payable on redemption.

The person proposing to redeem shall always pay, or tender, to the holder of the land, the amount of money lawfully paid by the holder, with interest thereon, at the current composite prime rate as published by the federal reserve board as of the date of purchase per annum; and, if the holder is a creditor, shall pay to the debtor or credit the debtor's debt with a sum equal to ten percent (10%) or more on the sum bid at the original sale, or with a sum equal to ten percent (10%) or more upon the judgment of the creditor, at the election of the creditor.

Code 1858, § 2131 (deriv. Acts 1820, ch. 11, § 4; 1842 (E.S.), ch. 6, § 9); Acts 1859-1860, ch. 84; Shan., § 3818; Code 1932, § 7743; T.C.A. (orig. ed.), § 64-810; Acts 1983, ch. 182, § 3.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, §§ 21, 22.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

NOTES TO DECISIONS

1. Tender.

Redemption offer conditioned on an allowance or credit for rent of premises due debtor was not a proper tender, since debtor must offer amount of debt and no condition can be attached to tender. Bumpass v. Alexander, 57 Tenn. 542, 1873 Tenn. LEXIS 256 (1873).

66-8-111. Unauthorized increase of bid.

In no case shall the holder or claimant of the property increase such holder's or claimant's bid against the debtor, or any bona fide creditor offering to redeem the real estate, except as provided in § 66-8-110.

Code 1858, § 2132 (deriv. Acts 1842 (E.S.), ch. 6, § 9); Shan., § 3819; Code 1932, § 7744; T.C.A. (orig. ed.), § 64-811.

NOTES TO DECISIONS

1. “Except as Above Provided” — Meaning.

The prohibition in this section against the increase in bid against the debtor or his creditor offering to redeem, “except as above provided,” prohibits the increase in the bid except in the mode and within the time provided in §§ 66-8-107 and 66-8-109. Killibrew v. Elliott, 30 Tenn. 442, 1850 Tenn. LEXIS 149 (1850); Rogers v. Tindall, 99 Tenn. 356, 42 S.W. 86, 1897 Tenn. LEXIS 39 (1897).

2. Period of Continuous Right of Advance.

A purchasing or redeeming creditor has a continuous right during the whole 20 days in which to advance his bid, and he cannot be forced to do so at an earlier day, by another creditor proposing to redeem the land from him. If another creditor makes a tender in redemption within the 20 days, his action would be rendered nugatory by a subsequent advance made within the 20 days. The right of advancement is continuous during the 20 days, whether exclusive or not, and, if made within that time, displaces and annuls any tender made by another creditor, whatever may be the rights of other creditors acquired by tenders during that period. Anderson, Green & Co. v. Ryan & Co., 69 Tenn. 658, 1878 Tenn. LEXIS 151 (1878).

66-8-112. Rent during redemption period.

The debtor, permitted by the purchaser to remain in possession, shall not be liable for rent from the date of the sale to the time of the redemption; and if the purchaser or the purchaser's assignee takes possession under the purchase, upon redemption by the debtor, the debtor shall have a credit for the fair rent of the premises during the time they were in the purchaser's possession.

Code 1858, § 2135 (deriv. Acts 1849-1850, ch. 121); Shan., § 3822; Code 1932, § 7747; T.C.A. (orig. ed.), § 64-812.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 476.

Tennessee Jurisprudence, 12 Tenn. Juris., Executions, § 48; 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, § 33.

NOTES TO DECISIONS

1. Application.

The section applies to all sales where the right of redemption exists, and the same rule as to the rents applies alike to all sales under executions, and to judicial sales and sales under deeds of trust, when made without barring the right of redemption. Freeland v. Harris, 35 Tenn. 264, 1855 Tenn. LEXIS 51 (1855); Burk v. Bank of Tennessee, 40 Tenn. 686, 1859 Tenn. LEXIS 201 (1859); Shelton v. Sears, 57 Tenn. 303, 1872 Tenn. LEXIS 425 (1872); Easley v. Tarkington, 64 Tenn. 592, 1875 Tenn. LEXIS 133 (1875).

2. Purchaser's Right to Take Deed and Possession.

This statute does not affect the right of the purchaser to procure his deed from the sheriff and enter into possession. Shelton v. Sears, 57 Tenn. 303, 1872 Tenn. LEXIS 425 (1872).

3. Debtor in Possession After Sale — Status.

The debtor's possession after the sale is consistent with the title of the purchaser, under whom he holds as quasi-tenant at will until an actual disclaimer of the purchaser's title. Mitchell v. Lipe, 16 Tenn. 179, 1835 Tenn. LEXIS 72 (1835); Keaton v. Thomasson's Lessee, 32 Tenn. 138, 1852 Tenn. LEXIS 34 (1852); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

4. Redeeming Debtor in Possession — Nonliability for Rents.

If the debtor in possession redeems the land, he shall not be liable for rent up to the time of redemption, when he again becomes the absolute owner. Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

5. Redeeming Debtor or Assignee Out of Possession — Right to Rents.

After a tender of the amount secured by a deed of trust, the trustee has no power or right to sell the land, and a sale made by him may be set aside upon the payment of the secured debt, less the amount of the rents accruing after the sale. The waiver of the right of redemption in such deed of trust was effective only upon a sale lawfully made, and was not barred by the trustee's sale, made after the refusal of a proper tender to the secured creditor, and, upon a redemption enforced in chancery at the suit of the debtor's heirs and administrator, the purchaser under the deed of trust, though a third person, will be compelled to account for the rents accruing while the land was in his possession, to be credited on the secured debt, the payment of the amount of which complainants were required to make as a condition of vesting the title in them. Welch v. Greenalge, 49 Tenn. 209, 1870 Tenn. LEXIS 214 (1870).

The purchaser of the land from the debtor, before the sale and in subordination to it, becomes in effect the assignee of the debtor's right of redemption, and upon such assignee's redemption, he is entitled to recover rents from the purchaser in possession, and, upon a redemption bill filed to enforce the redemption wrongfully denied by the purchaser upon a sufficient tender of the full amount of the redemption money, without any deduction for rents, it was held that such assignee was entitled to an account for rents against the purchaser in possession, and that a tender and payment into court, with and under the bill, of the amount of the previous tender, less the estimated value of the rents, was sufficient. Greenwald v. Roberts, 51 Tenn. 494, 1871 Tenn. LEXIS 193 (1871).

If the debtor out of possession redeems the land, he can recover rent from the purchaser in possession. Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

6. Nonredeeming Debtor in Possession — Liability for Rents.

The purchaser may receive the debtor as his tenant by contract, and recover the rents, and, if there be no redemption, all right of the debtor to a reclamation of the rents is forever gone. Burk v. Bank of Tennessee, 40 Tenn. 686, 1859 Tenn. LEXIS 201 (1859); Miller v. Buchanan, 61 Tenn. 390, 1873 Tenn. LEXIS 190 (1873); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

Where a nonredeeming debtor in possession does not disclaim or repudiate the purchaser's title, and, for a stronger reason, where he recognizes it by negotiating for the redemption of the land and by surrendering possession to the purchaser, the latter, after so obtaining the possession and the sheriff's deed, may recover from such debtor the rents, by an action for the use and occupancy of the land, although he failed to obtain the sheriff's deed until after the expiration of the time for redemption. Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

7. Purchaser at Void Tax Sale.

A purchaser at a void tax sale or his successor is liable for rent but entitled to reimbursement of the purchase price and all amounts expended for the owner's benefit, such as taxes and lien debts, and for the enhanced value of the property due to his improvements. Hunt v. Liles, 35 Tenn. App. 173, 243 S.W.2d 149, 1950 Tenn. App. LEXIS 132 (Tenn. Ct. App. 1950).

8. Rents Inoperative as Redemption.

The statute is imperative that the debtor's payment or tender in redemption must be made within the prescribed time, otherwise he forfeits the benefit provided for him, and the title of the purchaser becomes absolute, and this is so, even where the annual rental value of the land is greater than the amount required for redemption, especially where the debtor stands by and takes no active step to enforce his right until after expiration of the redemption period. Mabry v. Churchwell, 53 Tenn. 417, 1871 Tenn. LEXIS 375 (Tenn. Oct. 18, 1871).

9. Purchaser Recovering Possession — Action Maintainable.

In the absence of a contract, express or implied, and for a stronger reason, where the debtor disclaims or repudiates the purchaser's title, the latter cannot maintain an action against the former for the recovery of rents until he recovers the possession of the land by ejectment, when he may sue for mesne profits. Odonnell v. McMurdie, 25 Tenn. 134, 1845 Tenn. LEXIS 44 (1845); Burk v. Bank of Tennessee, 40 Tenn. 686, 1859 Tenn. LEXIS 201 (1859); Miller v. Buchanan, 61 Tenn. 390, 1873 Tenn. LEXIS 190 (1873); Wright v. Williams, 75 Tenn. 700, 1881 Tenn. LEXIS 173 (1881).

Collateral References.

Mortgagee's duty to account for rents and profits or for use and occupation for benefit of owner of equity of redemption or junior lienor. 46 A.L.R. 138.

Rents collected by mortgagor in possession, right to. 4 A.L.R. 1427, 55 A.L.R. 1020, 87 A.L.R. 625, 91 A.L.R. 1217.

66-8-113. Payment of redemption money through clerk of court — Failure of clerk to pay over.

  1. Where the purchaser is absent from the purchaser's usual place of residence, so that personal tender to the purchaser is prevented, or resides out of the county where the land lies, the debtor, or party entitled to redeem, may pay the redemption money to the clerk of the circuit court of the county in which the land lies, or in case the land is sold by the judgment or decree of a court, then to the clerk of the court from which the same is sold, to be held by the clerk for the person entitled to it, and such payment shall be good to all intents and purposes.
  2. If the clerk fails or refuses to pay over such money to the person entitled to it, on application, it may be recovered by motion, in the same way as money paid to the clerk on execution, and not paid over on demand.

Code 1858, §§ 2136, 2137 (deriv. Acts 1843-1844, ch. 179, §§ 2, 3); Acts 1870, ch. 111, § 1; 1889, ch. 83, § 1; 1897, ch. 132, § 1; Shan., §§ 3823, 3824; Code 1932, §§ 7748, 7749; T.C.A. (orig. ed.), §§ 64-813, 64-814.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 3.

Tennessee Jurisprudence, 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, §§ 20, 21.

Law Reviews.

Inadequate Trust Deed Waivers of the Statutory Right of Redemption: The Nightmare Reoccurs (George T. Lewis, III), 22 No. 5, Tenn. B.J. 27 (1986).

NOTES TO DECISIONS

1. Application.

The statute applies to all sales made subject to redemption. Rothwell v. Gettys, 30 Tenn. 135, 1850 Tenn. LEXIS 76 (1850); Maupin v. Blanton, 93 Tenn. 422, 25 S.W. 99, 1893 Tenn. LEXIS 69 (1893).

2. Procedure.

The entering of decrees setting aside tax sales upon redemption payments being made by taxpayers was improper where decrees confirming the tax sales and vesting title to the properties in the purchasers had been entered months prior to the redemption, since the proper procedure was to enter decrees ordering purchasers to convey properties to the taxpayer. In re Delinquent Taxpayers, 529 S.W.2d 48, 1975 Tenn. LEXIS 575 (Tenn. 1975).

3. Payment to Clerk — Facts Warranting.

A bill to enforce redemption was properly dismissed where it was based upon the fact that the debtor went to the house of the purchaser, with the redemption money, for the purpose of exercising the right of redemption, three days before the expiration of the redemption period, and again the day before the expiration of such period, the purchaser being casually absent on both occasions, but somewhere in the neighborhood and in the county, and without any fraudulent purpose to defeat the redemption, and no further effort was made to redeem the land. The redemption money should have been paid to the clerk. Rothwell v. Gettys, 30 Tenn. 135, 1850 Tenn. LEXIS 76 (1850).

When the purchaser of land sold under an execution resides out of the county in which the land lies, a judgment creditor of the debtor whose land was sold may pay the redemption money to the clerk, and, upon doing so within the time prescribed by law and depositing a receipt as required by law for the requisite credit on the judgment, the redemption may be effected. Anderson, Green & Co. v. Ryan & Co., 69 Tenn. 658, 1878 Tenn. LEXIS 151 (1878).

The debtor whose land has been sold may always make certain his redemption by paying the redemption money to the clerk of the court under judgment or decree of which the land was sold, and, in other cases, to the clerk of the circuit court of the county in which the land lies, and, in this way, the peril of deciding an actual or possible controversy between the purchaser and a claimant under him by transfer or otherwise as to which is entitled to the redemption money may be avoided, although the redemption money may in all cases be paid to the purchaser or to the rightful claimant under him, but this is done at the peril of the party attempting to redeem, and, if he should pay the money to the wrong party, the redemption would not be made effective. Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911).

It is proper for redemption money to be paid to the clerk of the court in which the land was sold even where the purchaser is available. In re Delinquent Taxpayers, 529 S.W.2d 48, 1975 Tenn. LEXIS 575 (Tenn. 1975).

4. Payment in Money Required.

The clerk of a court cannot receive anything but money in redemption of land, and his receipt of a check on a bank for the required amount, marked “good,” though received as money, but not paid was not sufficient to authorize a redemption. Lytle v. Etherly, 18 Tenn. 389, 1837 Tenn. LEXIS 42 (1837); Farnsworth v. Howard, 41 Tenn. 215, 1860 Tenn. LEXIS 50 (1860).

Redemption may be made in paper currency issued by authority of the United States of America, whether legal tender or not, unless the officer whose duty it is to receive it demands legal tender. Rogers v. Rogers, 35 S.W. 890, 1895 Tenn. Ch. App. LEXIS 27 (Tenn. Ch. App. 1895).

5. Receipt for Redemption Money.

The receipt for the redemption money is properly signed by the party from whom the land is redeemed, or his attorney, and when the redemption money is properly paid to the clerk of a court, then his receipt is proper. The validity of the redemption does not depend upon its signature by the clerk. Holmes v. Jarrett Moon & Co., 54 Tenn. 506, 1872 Tenn. LEXIS 79 (1872).

6. Entry of Receipt on Execution Docket.

It is proper to enter the receipt for the redemption money on the execution docket, but the validity of the redemption does not depend upon such entry. Holmes v. Jarrett Moon & Co., 54 Tenn. 506, 1872 Tenn. LEXIS 79 (1872).

66-8-114. Enforcement of right to redemption.

  1. If the purchaser, or the purchaser's vendee, fails or refuses to reconvey to such party entitled and offering to redeem, as set forth in this chapter, such party so paying or tendering payment shall have the right to file in the chancery court a bill to enforce the purchaser's rights of redemption.
    1. In any suit to enforce a right of redemption brought by a transferee from the debtor:
      1. The debtor shall be made a party;
      2. The suit shall be dismissed on the motion of any party if it appears that the transferee is engaged in speculation or profiteering in such rights of redemption;
      3. Such speculation and profiteering shall be presumed if it appears that the transfer of the right of redemption was made for a consideration less than the fair market value of the real property minus the amount the debtor would have been required to pay to redeem the property under this chapter; and
      4. The party seeking to redeem the real property shall complete the tender required by this chapter by paying the amount required for redemption to the clerk of the court.
    2. It is the intent of this subsection (b) to further the public policy of the state to protect the interests of owners of real property subject to debt and to prohibit the profiteering and speculation in rights of redemption.
    3. The purpose of this subsection (b) is remedial and it shall be construed to apply to any existing rights of redemption. This subsection (b), however, shall not apply to any rights of redemption arising out of judicial foreclosures or tax sales.

Code 1932, § 7750; T.C.A. (orig. ed.), § 64-815; Acts 1987, ch. 385, §§ 1-3.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Redemption of Real Estate Sold for Debt, § 23.

Law Reviews.

Property — Mortgages — State Redemption Statutes Not Applicable to Foreclosure by the United States on FHA Insured Mortgages, 23 Vand. L. Rev. 1384 (1970).

Collateral References.

Damages recoverable for real estate mortgagee's refusal to discharge mortgage or give partial release therefrom. 8 A.L.R.4th 853.

Chapter 9
Easements and Restrictive Covenants

Part 1
Preservation Restrictions

66-9-101. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Historically significant” means any structure more than fifty (50) years old; and
  2. “Preservation restriction” means a right, whether or not stated in the form of a restriction, easement, covenant or condition, in any deed, will or other instrument executed by or on behalf of the owner of the land or in any order of taking, appropriate to preservation of either a structure or a structure and the land upon which such structure is located, historically significant for its architecture or archaeology, to prohibit or limit any or all of the following:
    1. Alterations in exterior or interior features of the structure;
    2. Changes in appearance or condition of the land upon which such structure is located;
    3. Uses not historically appropriate; or
    4. Other acts or uses detrimental to appropriate preservation of the structure, or land upon which such structure is located.

Acts 1979, ch. 45, § 1; T.C.A., § 64-9-101.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-309.

66-9-102. Enforceability of preservation restrictions.

No preservation restriction held by any governmental body or by any nonprofit corporation or trust not for profit shall be unenforceable because of lack of privity of estate or contract, or lack of benefit to particular land, or assignability of the benefit.

Acts 1979, ch. 45, § 2; T.C.A., § 64-9-102.

66-9-103. Enforcement of preservation restriction — Entry on land — Recovery of damages.

A preservation restriction may be enforced by injunction or other proceeding in equity, and shall entitle representatives of the holder of such restriction to enter the land in a reasonable manner and at reasonable times to assure compliance. Nothing in this section shall prevent the holder from also recovering any damages to which the holder may otherwise be entitled.

Acts 1979, ch. 45, § 3; T.C.A., § 64-9-103.

Part 2
Solar Access Law of 1979

66-9-201. Short title.

This part shall be known and may be cited as the “Solar Access Law of 1979.”

Acts 1979, ch. 259, § 1; T.C.A., § 64-9-201.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-311.

Law Reviews.

The Easement in Gross Revisited: Transferability and Divisibility Since 1945, 39 Vand. L. Rev. 109 (1986).

66-9-202. Legislative findings and declarations.

The general assembly finds that the use of solar energy can help reduce reliance on depletable energy resources such as oil, natural gas and coal, and that solar energy development should, therefore, be encouraged. Further, that as the use of solar energy systems increases, the possibility of future shading of such systems by buildings or vegetation will also increase. Therefore, the general assembly declares that solar easements may be established to allow the owner of a solar energy system to negotiate for assurance of continued access to sunlight. The general assembly further finds that encouragement and protection of solar energy systems is a valid objective which counties and municipalities may consider in promulgating zoning regulations.

Acts 1979, ch. 259, § 2; T.C.A., § 64-9-202.

66-9-203. “Solar energy system” defined.

As used in this part, “solar energy system” means any device, mechanism, structure, apparatus, or part thereof, whose primary purpose is to collect solar energy and convert and store it for useful purposes including heating and cooling buildings or other energy saving processes, or to produce generated power by means of any combination of collecting, transferring, or converting solar generated energy.

Acts 1979, ch. 259, § 3; T.C.A., § 64-9-203.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-311.

66-9-204. Instruments creating solar easements — Contents.

  1. Any instrument creating a solar easement shall include, but the contents need not be limited to:
    1. A description of the real property subject to the solar easement and a description of the real property benefiting from the solar easement;
    2. The vertical and horizontal angles, expressed in degrees or otherwise, at which the solar easement extends over the real property subject to the solar easement;
    3. Any terms or conditions, or both, under which the solar easement is granted or will terminate;
    4. Any provisions for compensation of the owner of the property benefiting from the solar easement in the event of interference with the enjoyment of the solar easement or compensation of the owner of the property subject to the solar easement for maintaining the solar easement; and
    5. The period of time for which the easement shall run.
  2. The office of energy programs of the department of environment and conservation, pursuant to powers granted in §§ 4-3-510 and 4-3-512(8), is directed to prepare a sample solar easement instrument for use in this state.

Acts 1979, ch. 259, § 4; T.C.A. (orig. ed.), § 64-9-204; Acts 1983, ch. 429, § 24; 2016, ch. 743, § 17.

Amendments. The 2016 amendment rewrote (b), which read, “The division of energy of the department of economic and community development, pursuant to powers granted in §§ 4-3-708 and 4-3-710(8), is directed to prepare a sample solar easement instrument for use in Tennessee.”

Effective Dates. Acts 2016, ch. 743, § 18. April 7, 2016.

Cross-References. Protective easements authorized, title 11, ch. 15.

Statute of frauds, § 29-2-101.

66-9-205. Easement to run with the land — Abandonment of easement.

A solar easement shall be presumed to run with the land or lands benefited and burdened, unless the parties to the easement provide otherwise in writing, and shall be deemed to pass with the property when title is transferred unless stated to the contrary in § 66-9-204(a)(3). Any solar easements granted under this part may be abandoned in the same manner as other easements as provided by law.

Acts 1979, ch. 259, § 5; T.C.A., § 64-9-205.

66-9-206. Writing and recordation required.

Any easement obtained pursuant to this part shall be in writing and shall be recorded with the register of deeds in the county in which the land is situated.

Acts 1979, ch. 259, § 6; T.C.A., § 64-9-206.

Cross-References. Index of public records, title 10, ch. 7, part 2.

Statute of frauds, § 29-2-101.

Part 3
Conservation Easement Act of 1981

66-9-301. Short title.

This part shall be known as the “Conservation Easement Act of 1981.”

Acts 1981, ch. 361, § 1; T.C.A., § 64-9-301.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-309, 8-310.

NOTES TO DECISIONS

1. Standing.

Trial court erred in dismissing conservationists' complaint regarding landowners' use of conservation easement; the appellate court held that any resident of Tennessee was a beneficiary of the easement, and thus had standing to enforce it. Tenn. Envtl. Council, Inc. v. Bright Par 3 Assocs., L.P., — S.W.3d —, 2004 Tenn. App. LEXIS 155 (Tenn. Ct. App. Mar. 8, 2004), appeal denied, Tenn. Envtl. Council v. Bright Par 3 Assocs., L.P., — S.W.3d —, 2004 Tenn. LEXIS 1200 (Tenn. Oct. 4, 2004).

66-9-302. Legislative findings.

It is the finding of the general assembly that the protection of the state's land, water, geological, biological, historical, architectural, archaeological, cultural, and scenic resources is desirable for the purposes of maintaining and preserving the state's natural and cultural heritage, and for assuring the maintenance of the state's natural and social diversity and health, and for encouraging the wise management of productive farm and forest land.

Acts 1981, ch. 361, § 2; T.C.A., § 64-9-302.

66-9-303. Part definitions.

As used in this part, unless the context otherwise requires:

    1. For purposes of easements granted before July 1, 2005, “conservation easement” means an easement in land or structures which:
      1. Is held for the benefit of the people of Tennessee;
      2. Is specifically enforceable by its holder or beneficiary;
      3. Limits or obligates the holder of the servient estate, the holder's heirs, and assigns with respect to the use and management of the servient land, structures or features thereon, and/or activities conducted thereon, which limitations and obligations are intended to preserve, maintain or enhance the present condition, use or natural beauty of the land, geological, biological, historic, architectural, archaeological, cultural or scenic resources of the state of Tennessee; and
      4. Is recorded in the register's office of the county in which the easement is located;
    2. For purposes of easements granted on or after July 1, 2005, “conservation easement” means a nonpossessory interest of a holder in real property imposing limitations or affirmative obligations on the owner of the servient estate, the owner's heirs, and assigns with respect to the use and management of the servient land, structures or features thereon, and/or activities conducted thereon, which limitations and affirmative obligations are intended to preserve, maintain or enhance the present condition, use or natural beauty of the land, the open-space value, the air or water quality, the agricultural, forest, recreational, geological, biological, historic, architectural, archaeological, cultural or scenic resources of the servient estate and is recorded in the register's office of the county in which the easement is located;
    3. “Conservation easement” also means an easement of view over the facade, or restrictions on the use of a structure included in the National Register or Tennessee Register whereby the external appearance of the structure is preserved by the sale, donation, or other surrender by the owner of the easement to a public body or exempt organization either:
      1. In fee simple;
      2. For the owner's life or the life of another; or
      3. For a term of years; and
      4. Is recorded in the register's office of the county in which the easement is located;
  1. “Exempt organization” includes any organization which has received a determination of exemption from the Internal Revenue Service under § 501(c)(3) and § 509(a)(1) or (a)(2) of the Internal Revenue Code (26 U.S.C. §§ 501, 509);
  2. For purposes of conservation easements granted on or after July 1, 2005:
    1. “Holder” means a public body empowered to hold an interest in real property under the laws of the state or the United States; or
    2. “Holder” means a charitable corporation, charitable association, or charitable trust, the purposes or powers of which include retaining or protecting the natural, scenic, or open-space values of real property, assuring the availability of real property for agricultural, forest, recreational, or open-space use, protecting natural resources, maintaining or enhancing air or water quality, or preserving the historical, architectural, archaeological, or cultural aspects of real property;
  3. “National Register of Historic Places,” or “National Register,” means that listing of the state's historic, archaeological, architectural, cultural, and environmental resources as nominated by the state's liaison officer and which is kept by the national park service, the United States department of the interior, pursuant to the National Historic Preservation Act of 1966 (P.L. 89-665) (16 U.S.C. § 470 et seq.). Such listing is published in the federal register on a regular basis;
  4. “Public body” means the United States, states, counties, municipalities, metropolitan governments, the historic commission of any state, county, municipal, or metropolitan government, park or recreation authorities, and any other state, federal or local governmental entity;
  5. “Tennessee Register of Historic Places,” or “Tennessee Register,” means that listing of districts, sites, buildings, structures, and objects significant in Tennessee history, architecture, archaeology, and culture kept by the Tennessee historical commission pursuant to title 4, chapter 11, part 2; and
  6. “Third-party right of enforcement” means a right expressly provided in a conservation easement to enforce any of its terms granted to a public body, charitable corporation, charitable association, or charitable trust that, although eligible to be a holder, is not a holder.

Acts 1981, ch. 361, § 3; T.C.A., § 64-9-303; Acts 1988, ch. 807, § 1; 2005, ch. 205, §§ 1-3.

Cross-References. Protective easements, title 11, ch. 15.

66-9-304. Easement severed from fee — Right of entry.

  1. A conservation easement shall remain severed from the fee unless returned by specific conveyance to the holder of the fee.
  2. Conservation easements may contain public use clauses.
  3. The holder of a conservation easement shall maintain the right of entry at reasonable times for inspection whether or not the easement specifically permits such rights of entry.

Acts 1981, ch. 361, § 4; T.C.A., § 64-9-304.

66-9-305. Acquisition by public bodies.

  1. In order to carry out the purposes of this part, any public body or organization may acquire and dispose of interests in land or structures or features thereon in the form of conservation easements. No conservation easement shall be acquired by eminent domain unless such easement is necessary for the accomplishment of a specific public project which has been authorized by statute. Any such acquisition by a state entity shall be subject to approval by the state building commission.
  2. No private nonprofit organization shall exercise a power of eminent domain to acquire an easement under this part even though such organization may otherwise have such power.
  3. Any public body may designate a conservation easement in any real property in which it has an interest, if such property is listed on the National Register or the Tennessee Register, in order to provide protection to and assist in the preservation and protection of such property.
  4. A public body has all powers necessary or convenient to carry out the purposes and provisions of this chapter, including the following powers in addition to others granted by this chapter:
    1. Appropriate or borrow funds and make expenditures necessary to carry out the purposes of this chapter; and
    2. Apply for and accept and utilize grants and any other assistance from the federal government and any other public or private source, to give such security as may be required and to enter into and carry out contracts or agreements in connection with such grants or assistance.

Acts 1981, ch. 361, § 5; T.C.A., § 64-9-305; Acts 1988, ch. 807, § 2.

Cross-References. Eminent domain by public agencies, title 29, ch. 17.

66-9-306. Validity of easement.

No conservation easement shall be held unenforceable because of privity of estate or contract or lack of benefit to any other land, whether or not appurtenant to the servient land. No conservation easement shall be held automatically extinguished because of violation of its terms or frustration of its purposes.

Acts 1981, ch. 361, § 6; T.C.A., § 64-9-306.

66-9-307. Enforcement.

  1. An action affecting any conservation easement granted on or after July 1, 2005, may be brought by:
    1. An owner of an interest in the real property burdened by the easement;
    2. A holder of the easement;
    3. A person having third-party right of enforcement;
    4. The attorney general and reporter, if the holder is no longer in existence and there is no third-party right of enforcement; or
    5. A person authorized by other law.
  2. Conservation easements granted before July 1, 2005, may be enforced by the holders or beneficiaries of the easement, or their bona fide representatives, heirs, or assigns.
  3. Conservation easements may be enforced by injunction, proceedings in equity, or actions at law.

Acts 1981, ch. 361, § 7; T.C.A., § 64-9-307; Acts 2005, ch. 205, § 4.

66-9-308. Assessment for taxation purposes.

    1. When a conservation easement is held by a public body or exempt organization for the purposes of this chapter, the subject real property shall be assessed on the basis of the true cash value of the property or as otherwise provided by law, less such reduction in value as may result from the granting of the conservation easements.
    2. The value of the easement interest held by the public body or exempt organization shall be exempt from property taxation to the same extent as other public property.
    3. If a conservation easement in a structure is held by a public body or exempt organization for the term of a person's life or a term of years, the exemption shall apply for the length of the term and no longer.
  1. The owner of the fee shall have all rights and powers to appeal any assessment of such interest on the same basis as provided by law for property tax assessment appeals.

Acts 1981, ch. 361, § 8; T.C.A., § 64-9-308; Acts 1988, ch. 807, § 3.

Cross-References. Tax assessment of protective easements, § 11-15-105.

66-9-309. Applicability.

This part shall not affect any easement entered into prior to July 1, 1981, nor any rights, privileges or duties pursuant to such easements.

Acts 1981, ch. 361, § 14; T.C.A., § 64-9-309.

Part 4
Restrictive Covenants

66-9-401. Effect of waiver.

Any waiver of a restrictive covenant applicable to a subdivision lot, when granted for a specifically named business, shall be effective as a waiver for any other business, regardless of name, which operates substantially the same type of business as the business for which the waiver was originally granted.

Acts 1992, ch. 686, § 1.

66-9-402. Exemptions from actions.

No action shall lie in any court of law or equity against an owner or lessee of real property whose use of real property satisfies the conditions established in § 66-9-401 and in which it is alleged that the owner or lessee of the real property has violated restrictive covenants as to the use of property.

Acts 1992, ch. 686, § 2.

66-9-403. Applicability.

This part shall not be construed to apply to preservation restrictions, solar easements, or conservation easements, as defined in this chapter, or to any waiver of a restrictive covenant which by its express terms states that this part shall not be applicable.

Acts 1992, ch. 686, § 3.

Chapter 10
Vendor's Liens

66-10-101. Right to sell land for payment of vendor.

The vendor of land, as each payment of the purchase money becomes due, may bring an action to enforce such vendor's lien as vendor, and may have so much of the land sold as may be necessary to pay the money then due.

Code 1858, § 3563 (deriv. Acts 1857-1858, ch. 50, § 1); Shan., § 5326; Code 1932, § 8037; T.C.A. (orig. ed.), § 64-1002.

Cross-References. Limitation of action to enforce lien, § 28-2-111.

Priority of lien for improvements, § 66-11-109.

Priority over employees' lien, § 66-13-101.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), §§ 470, 471.

Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-207.

Tennessee Jurisprudence, 24 Tenn. Juris., Vendor and Purchaser, §§ 55, 57, 74.

Law Reviews.

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

NOTES TO DECISIONS

1. Purpose.

This section was enacted to provide for those cases where no acceleration option had been given by the contract, a situation formerly quite common when purchase money was secured by vendor's liens, as distinguished from the more modern use of securing the debt by mortgage in trust deed form. Lawman v. Barnett, 180 Tenn. 546, 177 S.W.2d 121, 1944 Tenn. LEXIS 321, 153 A.L.R. 772 (1944).

2. Application.

The statute does not apply where the vendor has negotiated some of several notes which are outstanding. Green v. Jarvis, 42 S.W. 165, 1897 Tenn. Ch. App. LEXIS 36 (Tenn. Ch. App. 1897).

This statute by its terms is limited to vendor's liens and does not include mortgages and trust deeds. Lawman v. Barnett, 180 Tenn. 546, 177 S.W.2d 121, 1944 Tenn. LEXIS 321, 153 A.L.R. 772 (1944).

3. Parties.

It is the general rule that all parties having an equitable or legal right in the subject of litigation should be made parties, and it is directly held that this rule applies to suits to enforce the vendor's lien. Steele v. Satterfield, 148 Tenn. 649, 257 S.W. 413, 1923 Tenn. LEXIS 51 (1923).

While subsequent purchasers are not always necessary parties to a suit by a vendor to enforce the vendor's express lien, it is always necessary to make them parties defendant, if they are to be bound by the decree, so as to authorize a writ of possession to issue against them where they have gone into possession before the commencement of the suit. Steele v. Satterfield, 148 Tenn. 649, 257 S.W. 413, 1923 Tenn. LEXIS 51 (1923).

4. Right to Object to Noncompliance.

This section is for the benefit of the vendor and the vendee cannot object to noncompliance therewith. Kerns v. Perry, 48 S.W. 729, 1898 Tenn. Ch. App. LEXIS 110 (Tenn. Ch. App. 1898).

5. Tender of Deed Unnecessary.

A vendor who contracts to execute a deed for land, after payment by the vendee of the notes, given for the purchase price, is not required to tender a deed before or in suit brought to enforce his vendor's lien and collect the notes. Johnson v. Kurtz, 97 Tenn. 503, 37 S.W. 222, 1896 Tenn. LEXIS 173 (1896).

6. Amount of Land Sold.

It was error to sell all of a tract of 135 acres for the satisfaction of one of a series of notes, which one, alone, was due, where it did not appear that the land could not be divided without material injury, nor that the vendee had so directed. Rigsby v. Marler, 17 Tenn. App. 136, 66 S.W.2d 232, 1932 Tenn. App. LEXIS 45 (Tenn. Ct. App. 1933).

7. Acceleration.

Where there has been default at date of maturity on two of three notes for purchase price of land, and the third has become payable under right of holder to declare it due and payable because of default on the previous notes, the entire debt is due and payable, and the vendor's lien is enforceable on the entire tract. In such case, this section and §§ 66-10-103 and 66-10-104 are inapplicable. Myers v. Wolf, 162 Tenn. 42, 34 S.W.2d 201, 1930 Tenn. LEXIS 61 (1931).

8. Notes and Interest Due at Time of Decree — Recovery.

Where one of the lien notes and a year's interest on all the lien notes were past due and unpaid at time bill to foreclose the lien was filed, chancellor was not in error in including in the recovery all the notes and interest which were past due and unpaid at the time of his decree. Vaughn v. Reagan, 7 Tenn. App. 194, 1928 Tenn. App. LEXIS 28 (1928).

9. Distribution of Proceeds of Sale.

Proceeds of sale of real estate secured by vendor's lien were equally divisible among holders of notes regardless of dates of maturity or assignment. Andrews v. Hobgood, 69 Tenn. 693, 1878 Tenn. LEXIS 160 (1878).

10. Attorney's Fees.

Where the deed of conveyance described the purchase money notes sufficiently to identify same, and retained a lien on the land for their due payment, the lien necessarily covers any provision for reasonable fees of attorneys for their collection, if sued on. Clark v. Carlton, 72 Tenn. 452, 1880 Tenn. LEXIS 44 (1880). See Moore v. Cary, 138 Tenn. 332, 197 S.W. 1093, 1917 Tenn. LEXIS 38, L.R.A. (n.s.) 1918D963 (1917).

Collateral References.

Death of vendee under executory contract as affecting right of vendor to enforce his lien. 35 A.L.R. 932.

Deed from purchaser to vendor as merger of vendor's lien as regards intervening liens. 95 A.L.R. 628, 148 A.L.R. 816.

Different classes of vendors' liens. 91 A.L.R. 148.

Dower, right of widow of purchaser to exoneration of property from vendor's lien. 66 A.L.R. 75.

Executor or administrator, applicability of statute prohibiting suit against, until expiration of prescribed period, to suit to foreclose vendor's lien. 104 A.L.R. 894.

Heir's or devisee's right to have real property exonerated from vendor's lien at expense of personal estate. 4 A.L.R.3d 1023.

Inverse order of alienation, rule as to sale of land in, on enforcement of vendor's lien. 131 A.L.R. 39.

Legacy, which one receiving quitclaim from legatee agrees to pay, vendor's lien to secure. 2 A.L.R. 810.

Marketability of title as affected by vendor's lien. 57 A.L.R. 1406, 81 A.L.R.2d 1020.

Municipality, right to enforce vendor's lien against property owned or purchased by. 76 A.L.R. 695.

Nonresidence or absence of defendant from state as suspending running of limitations against action to enforce vendor's lien. 119 A.L.R. 374.

Personalty and realty, vendor's lien against realty in case of combined sale of. 88 A.L.R. 92.

Political subdivision, right of one conveying property to, under invalid contract, to foreclose vendor's lien for unpaid purchase money. 93 A.L.R. 449.

Presentation of claim to executor before bringing action to enforce vendor's lien. 34 A.L.R. 392.

Priority as between a purchaser of notes given under contract for sale of land and mortgagee or grantee from vendor. 35 A.L.R. 28.

Priority as between holders of different notes or obligations secured by the same vendor's lien. 50 A.L.R. 543, 108 A.L.R. 485, 115 A.L.R. 40.

Priority as between vendor's lien and mortgage or deed of trust to third person furnishing purchase money. 55 A.L.R.2d 1119.

Real estate broker's right to vendor's lien as security for payment of his compensation. 125 A.L.R. 921.

Release of part of property covered by lien, doctrine of inverse order of alienation as affected by. 110 A.L.R. 65.

Release of vendee as indorser of note as waiver of vendor's lien. 1 A.L.R. 1638.

Standing timber, sale of, as affecting vendor's lien upon the land. 122 A.L.R. 517.

Support, conveyance in consideration of, as creating lien or charge upon the land conveyed. 64 A.L.R. 1250.

Tender of deed as condition precedent to suit to foreclose vendor's lien. 35 A.L.R. 127.

Unperformed agreement as to security for, or creation of fund for payment of, purchase price, as waiver of vendor's lien. 119 A.L.R. 1180.

Unsecured note or other personal obligation of vendee, acceptance of, as waiver or discharge of vendor's lien. 132 A.L.R. 440.

66-10-102. Jurisdiction to enforce against land.

The court of chancery has jurisdiction to enforce the vendor's lien when the amount due is fifty dollars ($50.00) and over.

Code 1932, § 8041; Acts 1933, ch. 96, § 1; C. Supp. 1950, § 8041; T.C.A. (orig. ed.), § 64-1003.

Cross-References. Enforcement of lien, § 66-21-101.

Textbooks. Tennessee Jurisprudence, 24 Tenn. Juris., Vendor and Purchaser, § 66.

66-10-103. Successive sales to meet installments.

The suit shall be retained in court, and, as each of the payments becomes due, the court shall direct a sufficient quantity of the land to be sold to satisfy the same.

Code 1858, § 3564 (deriv. Acts 1857-1858, ch. 50, § 1); Shan., § 5327; Code 1932, § 8038; T.C.A. (orig. ed.), § 64-1004.

Textbooks. Tennessee Jurisprudence, 24 Tenn. Juris., Vendor and Purchaser, § 74.

NOTES TO DECISIONS

1. Application.

The statute is not applicable to sales under mortgages. Myers v. Wolf, 162 Tenn. 42, 34 S.W.2d 201, 1930 Tenn. LEXIS 61 (1931).

2. Right to Object to Noncompliance.

This section is for the benefit of the vendor, and the vendee cannot object to noncompliance therewith. Kerns v. Perry, 48 S.W. 729, 1898 Tenn. Ch. App. LEXIS 110 (Tenn. Ch. App. 1898).

3. Decree for Sale of Land — Recitals.

An order of sale is not vitiated because the exact amount has not been ascertained, if the amount can be arrived at from mathematical calculation; such as the calculation of interest on a note which is set out in the decree. Tomkins v. Roscoe, 2 Shan. 255 (1877).

A decree for sale of land for enforcement of vendor's lien may be rendered without any formal personal recovery for amount due, where it recites and adjudges the amount due on the notes given for the purchase price, and orders the land to be sold, if this ascertained sum is not paid within a specified time. Watkins v. Clifton Hill Land Co., 91 Tenn. 683, 20 S.W. 246, 1892 Tenn. LEXIS 36 (1892).

4. Sale for Matured Portion of Debt Only.

The trust deed providing for a sale for satisfaction of installments of a mortgage debt that are mature at the time, in a court foreclosure of its lien, will be decreed for the satisfaction of only matured installments, subject to continuing lien for subsequent installments. Alleged prejudicial effect of so selling in that purchasers would be slow to bid on the property at the first sale, cannot affect the rule. Fox v. River Heights, Inc., 22 Tenn. App. 166, 118 S.W.2d 1104, 1938 Tenn. App. LEXIS 14 (Tenn. Ct. App. 1938).

5. Retention as to Nonmatured Installment Notes After Foreclosure — Amended or Supplemental Bill Not Required.

Where in a cause for the foreclosure of a mortgage lien, there is a retention of jurisdiction to decree as to defaults on nonmatured installment notes, the chancery court was authorized to decree and confirm a sale for installments which subsequently became delinquent without any filing of an amended or supplemental bill praying therefor. Fox v. River Heights, Inc., 22 Tenn. App. 166, 118 S.W.2d 1104, 1938 Tenn. App. LEXIS 14 (Tenn. Ct. App. 1938).

6. Judgment on Notes Not Due Improper.

In suit on notes not due, the court is without authority, after exhausting proceeds of land sale, leaving a balance due on purchase price, to enter judgment on notes not due although prematurity has not been pleaded. Watkins v. Clifton Hill Land Co., 91 Tenn. 683, 20 S.W. 246, 1892 Tenn. LEXIS 36 (1892).

7. Appeal from Judgment on Notes Not Due.

Where judgment was rendered on the note before its maturity, in the court below, the same will be affirmed on appeal, where the note is overdue when heard in the Supreme Court, no execution having been issued. Watkins v. Clifton Hill Land Co., 91 Tenn. 683, 20 S.W. 246, 1892 Tenn. LEXIS 36 (1892).

66-10-104. Sale of land as a whole.

If the land cannot be divided without material injury to the parties, or, if the vendee so direct, the court shall order it all to be sold at one (1) time, making the payments to fall due at such times as the purchaser has agreed to pay the vendor; and the money, as collected, shall be applied to the payment of the installments due the vendor.

Code 1858, § 3565 (deriv. Acts 1857-1858, ch. 50, § 2); Shan., § 5328; mod. Code 1932, § 8039; T.C.A. (orig. ed.), § 64-1005.

Textbooks. Tennessee Jurisprudence, 24 Tenn. Juris., Vendor and Purchaser, § 74.

NOTES TO DECISIONS

1. Application.

Where all notes are due the statute providing for a sale of a sufficient quantity of the land as payments become due is not applicable. Myers v. Wolf, 162 Tenn. 42, 34 S.W.2d 201, 1930 Tenn. LEXIS 61 (1931).

In the absence of a showing that the land is incapable of division, this section does not apply. Rigsby v. Marler, 17 Tenn. App. 136, 66 S.W.2d 232, 1932 Tenn. App. LEXIS 45 (Tenn. Ct. App. 1933).

2. Prerequisites to Objection to Noncompliance with Section.

This is a provision for benefit of the vendee but conditioned on his requesting or directing that the sale be made as provided herein. In absence of such request, vendee cannot object that section was not complied with. Kerns v. Perry, 48 S.W. 729, 1898 Tenn. Ch. App. LEXIS 110 (Tenn. Ch. App. 1898).

3. Divisibility of Land — Determination.

Whether the land sought to be sold to enforce the vendor's lien can be divided, or should be sold in a body, is not a matter in issue on the merits, and may be ascertained by a reference after a hearing on the merits. Clark v. Carlton, 72 Tenn. 452, 1880 Tenn. LEXIS 44 (1880).

4. Sale of Whole of Indivisible Lands.

Where only one of several notes for purchase money is due, the whole of the land may be sold to pay the note due, and the others as they fall due, where the land is not susceptible of division into parts to correspond with the several notes. Martin v. Rainey, 3 Shan. 47 (1878).

5. Terms of Payment.

There is a sufficient compliance with this section where the terms of payment under the sale correspond approximately with the terms of payment to the vendor. Kerns v. Perry, 48 S.W. 729, 1898 Tenn. Ch. App. LEXIS 110 (Tenn. Ch. App. 1898).

6. Deferred Payments upon Sale of Indivisible Lands.

Where land is decreed to be sold for the payment of purchase money notes, some of which are due and some are not, it is not essential that any of the deferred payments shall be made, by the decree of sale, to fall due precisely at the maturity of the notes not due at date of decree. The defendant cannot complain that a more liberal credit is given for his benefit than that provided by the statute. Watkins v. Clifton Hill Land Co., 91 Tenn. 683, 20 S.W. 246, 1892 Tenn. LEXIS 36 (1892).

66-10-105. Redemption.

Whether the land is all sold, or is sold in parcels, the defendant shall have the right of redemption, as in other cases.

Code 1858, § 3566 (deriv. Acts 1857-1858, ch. 50, § 3); Shan., § 5329; Code 1932, § 8040; T.C.A. (orig. ed.), § 64-1006.

Cross-References. Redemption, title 66, ch. 8.

Textbooks. Tennessee Jurisprudence, 24 Tenn. Juris., Vendor and Purchaser, § 55.

Law Reviews.

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

Chapter 11
Mechanics' and Materialmen's Liens

Part 1
General Provisions

66-11-101. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Contract” means an agreement for improving real property, written or unwritten, express or implied, and includes extras as defined in this section;
  2. “Contract price” means the amount agreed upon by the contracting parties to be paid for performing work or labor or for furnishing materials, machinery, equipment, services, overhead and profit, included in the contract, increased or diminished by the price of extras or breach of contract, including defects in workmanship or materials. If no price is agreed upon by the contracting parties, “contract price” means the reasonable value of all work, labor, materials, services, equipment, machinery, overhead and profit included in the contract;
  3. “Extras” means labor, materials, services, equipment, machinery, overhead and profit, for improving real property, authorized by the owner and not included in previous contracts;
    1. “Furnish materials” means:
      1. To supply materials that are intended to be and are incorporated in the improvement;
      2. To supply materials that are intended to be and are delivered to the site of the improvement and become normal wastage in construction operations;
      3. To specially fabricate materials for incorporation in the improvement and, if not delivered to the site of the improvement, are not readily resalable by the lienor;
      4. To supply materials that are used for the construction and do not remain in the improvement, subject to diminution by the salvage value of such material; or
      5. To supply tools, equipment, or machinery as permitted by § 66-11-102(g);
    2. The delivery of materials to the site of the improvement shall be prima facie evidence of incorporation of such materials in the improvement;
  4. “Improvement” means the result of any action or any activity in furtherance of constructing, erecting, altering, repairing, demolishing, removing, or furnishing materials or labor for any building, structure, appurtenance to the building or structure, fixture, bridge, driveway, private roadway, sidewalk, walkway, wharf, sewer, utility, watering system, or other similar enhancement, or any part thereof, on, connected with, or beneath the surface; the drilling and finishing of a well, other than a well for gas or oil; the furnishing of any work and labor relating to the placement of tile for the drainage of any lot or land; the excavation, cleanup, or removal of hazardous and nonhazardous material or waste from real property; the enhancement or embellishment of real property by seeding, sodding, or the planting on real property of any shrubs, trees, plants, vines, small fruits, flowers, nursery stock, or vegetation or decorative materials of any kind; the taking down, cleanup, or removal of any existing shrubs, trees, plants, vines, small fruits, flowers, nursery stock, or vegetation or decorative materials of any kind then existing; excavating, grading or filling to establish a grade; the work of land surveying, as defined in § 62-18-102, and the performance of architectural or engineering work, as defined in title 62, chapter 2, with respect to an improvement actually made to the real estate. As the context requires, “improvement” also means the real property thus improved;
  5. “Laborer” means any individual who, under contract, of any degree of remoteness, personally performs labor for improving real property on the site of the improvement;
  6. “Lienor” means any person having a lien or right of lien on real property by virtue of this chapter, and includes the person's successor in interest;
  7. “Owner” includes the owner in fee of real property, or of a less estate in real property, a lessee for a term of years, a vendee in possession under a contract for the purchase of real property, and any person having any right, title or interest, legal or equitable, in real property, that may be sold under process;
  8. “Owner-occupant” means any owner of real property who, at the time the owner contracts for the improvement of the real property, occupies the real property as the owner's principal place of residence;
  9. “Perform”, when used in connection with the words labor or services, means performance by the lienor or by another for the lienor;
  10. “Person” means an individual, corporation, limited liability company, partnership, limited partnership, sole proprietorship, joint venture, association, trust, estate, or other legal or commercial entity;
  11. “Prime contractor” means a person, including a land surveyor as defined in § 62-18-102, a person licensed to practice architecture or engineering under title 62, chapter 2, and any person other than a remote contractor who supervises or performs work or labor or who furnishes material, services, equipment, or machinery in furtherance of any improvement; provided, that the person is in direct privity of contract with an owner, or the owner's agent, of the improvement. A “prime contractor” also includes a person who takes over from a prime contractor the entire remaining work under such a contract;
  12. “Real property” includes real estate, lands, tenements and hereditaments, corporeal and incorporeal, and fixtures and improvements thereon;
  13. “Remote contractor” means a person, including a land surveyor as defined in § 62-18-102 and a person licensed to practice architecture or engineering under title 62, chapter 2, who provides work or labor or who furnishes material, services, equipment or machinery in furtherance of any improvement under a contract with a person other than an owner;
  14. “Single family residence” means any real property owned and occupied by no one other than the owner and the owner's immediate family; and
  15. “Visible commencement of operations” means the first actual work of improving upon the land or the first delivery to the site of the improvement of materials, that remain on the land until actually incorporated in the improvement, of such manifest and substantial character as to notify interested persons that an improvement is being made or is about to be made on the land, excluding, however, demolition, surveying, excavating, clearing, filling or grading, placement of sewer or drainage lines or other utility lines or work preparatory therefor, erection of temporary security fencing and the delivery of materials therefor.

Code 1932, § 7913; Acts 1965, ch. 312, §§ 1, 2; 1968, ch. 587, § 1; 1975, ch. 264, § 1; T.C.A. (orig. ed.), § 64-1101; Acts 1990, ch. 641, §§ 1, 2; 2007, ch. 189, § 1; 2013, ch. 469, § 4.

Compiler's Notes. Acts 2013, ch. 469, § 6 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after July 1, 2013, and to liens filed for construction performed on or after July 1, 2013.

Cross-References. Abandonment defined, § 66-11-112.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 8.

Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-701, 8-703, 8-704, 8-1101.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 3-6, 8-12; 21 Tenn. Juris., Railroads, § 55.

Law Reviews.

Mechanics' and Materialmen's Liens, 45 Tenn. L. Rev. 741.

The Art of Perfecting Mechanics' and Materialmens' Liens in Tennessee (Arthur M. Fowler III), 40 No. 3 Tenn. B.J. 17 (2004).

NOTES TO DECISIONS

1. Construction of Chapter.

Enforcement of a mechanic's or materialman's lien is a statutory right and strict compliance with title 66, ch. 11 is required. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

The mechanics' and materialmen's lien statute is to be construed liberally in favor of employees. First Nat'l Bank v. Prairie Corp., 547 F. Supp. 14, 1982 U.S. Dist. LEXIS 14720 (E.D. Tenn. 1982).

If the supplier fails to comply with the requirements of title 66, ch. 11, the supplier has no materialmen's lien against the owner's property; it is impermissible to circumvent these sections by allowing recovery against the “principal” under an agency theory upon showing only that the contractor had authority to purchase materials, although not on credit. Edmond Bros. Supply Co. v. Boyle & Adams, 44 S.W.3d 530, 2000 Tenn. App. LEXIS 737 (Tenn. Ct. App. 2000), review or rehearing denied, — S.W.3d —, 2001 Tenn. LEXIS 363 (Tenn. Apr. 23, 2001).

T.C.A. §§ 66-11-10166-11-146 set forth two types of liens, with the distinction between the two turning not on whether goods or services are supplied as the heading suggests, i.e., a “materialman's lien” or a “mechanic's lien,” but on whether the entity contracted directly with the owner of the real property as opposed to a contractor or a subcontractor. Durkan Patterned Carpet, Inc. v. Premier Hotel Dev. Group (In re Premier Hotel Dev. Group), 270 B.R. 234, 2001 Bankr. LEXIS 1576 (Bankr. E.D. Tenn. 2001).

From the use of the words “in direct privity of contract” in one section of the statute and “in contractual privity” in another section, it is fair to assume the legislature did not intend the two phrases to have the same meaning. Diaz Constr. v. Indus. Dev. Bd. of the Metro. Gov't of Nashville & Davidson County, — S.W.3d —, 2015 Tenn. App. LEXIS 107 (Tenn. Ct. App. Mar. 6, 2015).

2. Materialman or Furnisher.

This section contemplates that the delivery of materials giving rise to a furnisher's lien may be made to a contractor or subcontractor at a place other than the site of the improvement, if delivery is made with the intent that the materials will be later delivered without intermingling by the contractor or subcontractor to the job, and if they are later so delivered and used on the improvement. Dealers Supply Co. v. First Christian Church, 38 Tenn. App. 568, 276 S.W.2d 769, 1954 Tenn. App. LEXIS 142 (1954).

Where a race-car simulator was installed by plaintiff construction company as part of improvements it made to defendant's commercial property, plaintiff filed a notice of mechanic's lien against the property owner under T.C.A. § 66-11-101, et seq. in the amount of $ 70,583 for labor and/or material furnished to the leasehold; the trial court erred by awarding plaintiff a judgment against the simulator to satisfy its mechanic's lien. A secured party properly filed a financing statement and perfected its security interest in the simulator prior to the attachment of plaintiff's interest as a lien creditor. Metro Constr. Co., LLC v. Sim Attractions, LLC, — S.W.3d —, 2009 Tenn. App. LEXIS 320 (Tenn. Ct. App. June 9, 2009).

3. Improvement.

A road is neither a building, structure, erection, alteration, demolition, or excavation; therefore, complainant is not entitled to a lien upon the land of defendants for construction of a road leading to the residence of the defendants, the road not being an “improvement.” Britt v. McClendon, 213 Tenn. 232, 373 S.W.2d 457, 1963 Tenn. LEXIS 483 (1963).

Where there was no evidence that lumber was delivered by the supplier to the job site, that it was ever used in fabrication of window panels delivered to the job site or that it was specially selected and prepared for the job, there was no evidence, direct or circumstantial, which could satisfy a reasonable mind that the lumber was incorporated into the improvement, and thus the supplier had no lien against the property. McCoy Lumber Indus., Inc. v. Parkview Towers, Inc., 567 S.W.2d 475, 1978 Tenn. App. LEXIS 365 (Tenn. Ct. App. 1978).

4. Persons.

T.C.A. § 66-11-101 does not define a “person” for the purposes of the mechanics' lien law. In re Just for Fun of It, Inc., 7 B.R. 166, 1980 Bankr. LEXIS 4487 (Bankr. E.D. Tenn. 1980).

5. Furnished Materials.

In materialmen's liens, materials are not furnished until the materials are actually delivered to the job site, no matter when the transfer of the title to the goods occurs. “Furnished,” as used in the labor and material payment bond, also refers to the date that the goods are actually delivered to the job site. Andrews Distrib. Co. v. Oak Square at Gatlinburg, 757 S.W.2d 663, 1988 Tenn. LEXIS 274 (Tenn. 1988), overruled in part, Spence v. Allstate Ins. Co., 883 S.W.2d 586, 1994 Tenn. LEXIS 251 (Tenn. 1994).

Materials are not “furnished” and the contract of the materialman does not expire for the purpose of T.C.A. § 66-11-115(b) until the materials are delivered to the job site, regardless of when the transfer of title from the materialman to the contractor or subcontractor occurs. Andrews Distrib. Co. v. Oak Square at Gatlinburg, 757 S.W.2d 663, 1988 Tenn. LEXIS 274 (Tenn. 1988), overruled in part, Spence v. Allstate Ins. Co., 883 S.W.2d 586, 1994 Tenn. LEXIS 251 (Tenn. 1994).

Collateral References.

Attorney's compensation for services in matters involving mechanics' liens, amount of. 143 A.L.R. 796, 56 A.L.R.2d 13, 57 A.L.R.3d 475, 57 A.L.R.3d 550, 58 A.L.R.3d 317, 10 A.L.R.5th 448, 17 A.L.R.5th 366, 23 A.L.R.5th 241, 86 A.L.R. Fed. 866.

Enforceability of mechanic's lien attached to leasehold estate against landlord's fee. 74 A.L.R.3d 330.

Exclusion of liability for defects, liens, or encumbrances created, suffered, assumed, or agreed to by the insured. 87 A.L.R.3d 515.

Landlord's liability to third party for repairs authorized by tenant. 46 A.L.R.5th 1.

“Owner,” scope and import of term in mechanics' lien statutes. 2 A.L.R. 794, 95 A.L.R. 1085.

66-11-102. Lien for work and materials.

  1. There shall be a lien on any lot or tract of real property upon which an improvement has been made by a prime contractor or any remote contractor; provided, that the lienor has complied with title 62, chapter 6. If the lienor has not fully complied with title 62, chapter 6, no lien is established by this chapter. The lien shall secure the contract price.
  2. The lien established by this section shall include a lien on any lot or tract of real property in favor of any land surveyor who has, by contract with the owner or agent of the owner of the real property, performed on the property the practice of land surveying, as defined in § 62-18-102. The lien shall secure the contract price.
    1. The lien established by this section shall include a lien on any lot or tract of real property upon which an improvement has been made, by contract with the owner or the owner's agent, in favor of any person licensed to practice architecture or engineering under title 62, chapter 2, for architectural or engineering services performed with respect to the improvement actually made. The lien shall secure the contract price.
    2. The lien provided for in subdivision (c)(1) shall attach as of the time of visible commencement of operations as provided in § 66-11-104.
    3. This subsection (c) shall not apply to owner-occupants of one-family or two-family detached unit homes.
  3. Notwithstanding any other provision of this chapter, no prime contractor or remote contractor of a lessee of real property may encumber the fee estate unless the lessee is deemed to be the fee owner's agent. In determining whether a lessee is the fee owner's agent, the court shall determine whether the fee owner has the right to control the conduct of the lessee with respect to the improvement and shall consider:
    1. Whether the lease requires the lessee to construct a specific improvement on the fee owner's property;
    2. Whether the cost of the improvement actually is borne by the fee owner through corresponding offsets in the amount of rent the lessee pays;
    3. Whether the fee owner maintains control over the improvement; and
    4. Whether the improvement becomes the property of the fee owner at the end of the lease.
  4. A lien arising under this chapter shall not include in the lien amount any interest, service charges, late fees, attorney fees, or other amounts to which the lienor may be entitled by contract or law that do not result in an improvement to the real property or are otherwise not permitted by this chapter.
  5. When a lienor, without default, is prevented from completely performing the lienor's part, the lienor is entitled to a lien for as much of the contract price as the lienor has performed in proportion to the contract price for the whole, and the lienor's claim shall be adjusted accordingly.
  6. A lien for furnishing tools, equipment, or machinery arises under this chapter to the following extent:
    1. For the reasonable rental value for the period of actual use and any reasonable period of nonuse taken into account in the rental contract; except that the reasonable rental value and reasonable periods of use and nonuse need not be determined solely by the contract; or
    2. For the purchase price of the tools, equipment or machinery, but the lien for the price only arises if the tools, equipment or machinery were purchased for use in the course of the particular improvement and have no substantial value to the lienor after the completion of the improvement on which they were used.

Code 1858, § 1981 (deriv. Acts 1845-1846, ch. 118, §§ 1, 2); Acts 1859-1860, ch. 114, § 1; Shan., § 3531; mod. Code 1932, § 7914; Acts 1977, ch. 380, § 1; T.C.A. (orig. ed.), § 64-1102; Acts 1982, ch. 639, §§ 1, 2; 1990, ch. 854, § 2; 2007, ch. 189, § 2; 2013, ch. 469, § 3.

Compiler's Notes. Acts 2013, ch. 469, § 6 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after July 1, 2013, and to liens filed for construction performed on or after July 1, 2013.

Cross-References. Notice to landowner, effect, §§ 66-11-20366-11-207.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Tennessee Jurisprudence, 8 Tenn. Juris., Liens, § 2; 18 Tenn. Juris., Mechanics' Liens, §§ 2-4, 6-12, 13, 14, 17-19.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

NOTES TO DECISIONS

1. Construction.

The rule is that the statute must be strictly construed as to the parties who are entitled to the mechanic's lien, and the existence of the lien must be clearly established by proof of the facts necessary to constitute the lien, but when the existence of the lien is determined, and the party claiming the same is determined to be entitled to it, the statute will be liberally construed as regards the subject matter to which the lien should attach, and as to the remedy for its enforcement. Dunn v. McKee, 37 Tenn. 657, 1858 Tenn. LEXIS 89 (1858); Luter & Daniel v. Cobb, 41 Tenn. 525, 1860 Tenn. LEXIS 100 (1860); Kay v. Smith, 57 Tenn. 41, 1872 Tenn. LEXIS 392 (1872); Steger v. Arctic Refrigerating Co., 89 Tenn. 453, 14 S.W. 1087, 1890 Tenn. LEXIS 70, 11 L.R.A. 580 (Tenn. Dec. 1890); Thompson v. Baxter, 92 Tenn. 305, 21 S.W. 668, 1892 Tenn. LEXIS 77, 36 Am. St. Rep. 85 (1892); Nanz v. Cumberland Gap Park Co., 103 Tenn. 299, 52 S.W. 999, 1899 Tenn. LEXIS 108, 47 L.R.A. 273, 76 Am. St. Rep. 650 (1899); In re Am. Lime Co., 201 F. 433, 1912 U.S. Dist. LEXIS 1040 (E.D. Tenn. 1912); Chickasaw Hotel Co. v. C.B. Barker Constr. Co., 135 Tenn. 305, 186 S.W. 115, 1916 Tenn. LEXIS 28, 1916F L.R.A. (n.s.) 106 (1916); Richardson v. Lanius, 150 Tenn. 133, 263 S.W. 799, 1923 Tenn. LEXIS 70 (1923); Ford v. Whittle Trunk & Bag Co., 12 Tenn. App. 486, 1930 Tenn. App. LEXIS 91 (1930); Arnstein Realty Co. v. Williams, 163 Tenn. 69, 40 S.W.2d 1007, 1931 Tenn. LEXIS 89 (1931); Nicks v. W. C. Baird & Co., 165 Tenn. 89, 52 S.W.2d 147, 1931 Tenn. LEXIS 175 (1932).

The statute will not be extended by construction to draw in for protection those who are excluded. Pillow v. Kelly, 155 Tenn. 597, 296 S.W. 11, 1926 Tenn. LEXIS 84 (1926); Allen v. Brown, 14 Tenn. App. 405, 1932 Tenn. App. LEXIS 49 (Tenn. App. Mar. 19, 1932).

While statutes are to be construed strictly in determining right to a lien, they are to be construed liberally in respect to the remedy. Arnstein Realty Co. v. Williams, 163 Tenn. 69, 40 S.W.2d 1007, 1931 Tenn. LEXIS 89 (1931).

A mechanic's or materialman's lien should not be subjected to dangerous niceties in its enforcement, nevertheless the lien is purely statutory and it is not to be liberally construed to embrace others than those enumerated therein. Bell Bros. & Co. v. Arnold, 17 Tenn. App. 493, 68 S.W.2d 958, 1933 Tenn. App. LEXIS 84 (1933).

An unnoticed architectural lien is inferior to any mortgage; to limit the “any mortgage” language to any mortgage in place at the time the architectural lien attaches would unduly restrict T.C.A. § 66-11-102(c) in contravention of the intent of the legislature. CainRash Architectural Group, Inc. v. Premier Hotel Dev. Group (In re Premier Hotel Dev. Group), 271 B.R. 813, 2002 Bankr. LEXIS 36 (Bankr. E.D. Tenn. 2002).

2. Applicability.

T.C.A. § 66-11-102 does not contemplate protection for a person who voluntarily pays for materials ordered to take advantage of the deduction of sales tax for income tax purposes. Goodfriend v. United Am. Bank, 637 S.W.2d 870, 1982 Tenn. App. LEXIS 378 (Tenn. Ct. App. 1982).

3. Governmental Entities Excluded.

Governmental entities cannot avail themselves of the mechanic's and materialmen's statute. In re Just for Fun of It, Inc., 7 B.R. 166, 1980 Bankr. LEXIS 4487 (Bankr. E.D. Tenn. 1980).

4. Retroactive Application of Amendments.

Provisions added in 1982 relating to liens for architects were not applied retroactively because amendment was substantive, not procedural, and there was no legislative intent that it be applied retroactively. In re Airport-81 Nursing Care, Inc., 32 B.R. 960, 1983 Bankr. LEXIS 5408 (Bankr. E.D. Tenn. 1983).

5. Special Contract — Meaning — Necessity.

While the words “special contract” are construed to mean nothing more than an employment and undertaking to do the work or to furnish the materials, there must be a contract, which implies the mutual assent of persons competent to contract. Barnes v. Thompson, 32 Tenn. 313, 1852 Tenn. LEXIS 72 (1852); Alley & Bush v. Lanier, 41 Tenn. 540, 1860 Tenn. LEXIS 103 (1860), overruled in part, Prowell v. Fowlkes, 64 Tenn. 649, 1875 Tenn. LEXIS 148 (1875); McLeod v. Capell, 66 Tenn. 196, 1874 Tenn. LEXIS 105 (1874); O'Malley v. Coughlin, 3 Cooper's Tenn. Ch. 431 (1877); Mills v. Terry Mfg. Co., 91 Tenn. 469, 19 S.W. 328, 1892 Tenn. LEXIS 16 (1892); Reed v. Estes, 113 Tenn. 200, 80 S.W. 1086, 1904 Tenn. LEXIS 16 (1904); McDonald v. Cady, 9 Tenn. App. 354, 1928 Tenn. App. LEXIS 244 (1928); Province v. Mitchell, 44 Tenn. App. 115, 312 S.W.2d 861, 1958 Tenn. App. LEXIS 136 (Tenn. Ct. App. Mar. 27, 1958).

One who agrees with the owner of a lot that he will erect improvements thereon and then turn the lot over to a purchaser from the owner is a contractor entitled to the lien. Haynes v. Holland, 48 S.W. 400, 1898 Tenn. Ch. App. LEXIS 100 (Tenn. Ch. App. 1898); Arnstein Realty Co. v. Williams, 163 Tenn. 69, 40 S.W.2d 1007, 1931 Tenn. LEXIS 89 (1931).

Where the owner ordered material from a dealer in materials who in turn ordered it from another materialman, the latter has no lien for the material though used in the construction of the building, he being without a special contract with the owner. Carolina Portland Cement Co. v. Hitt Lumber & Box Co., 141 Tenn. 210, 208 S.W. 336, 1918 Tenn. LEXIS 82 (1918).

Contractual privity is sufficiently established by proof that the erection of the building was a part of the property owner's lease and that the owner approved the specifications for the work. Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

Where after defendant's building was damaged by fire, contractor commenced repair work without having submitted a specific estimate and later submitted estimate to insurance adjuster but not to defendant and insurance company thereafter issued check to defendant in the amount of the estimate, facts of case were not sufficient to establish contract between contractor and defendant and contractor was only entitled to recover on quantum meruit. Province v. Mitchell, 44 Tenn. App. 115, 312 S.W.2d 861, 1958 Tenn. App. LEXIS 136 (Tenn. Ct. App. Mar. 27, 1958).

6. Interest in Land Prerequisite to Lien.

In order to subject land to the mechanic's lien, there must be an ownership of some interest in the land, and the permission to occupy the land of another with portable machinery for the purpose of sawing his timber into lumber is not such interest in the land that may be subjected to the lien. Truxall v. Williams, 83 Tenn. 427, 1885 Tenn. LEXIS 62 (1885).

7. Estate or Title to Which Lien Attaches.

The mechanic's lien attaches to the existing title of the person having the improvements made, such as it was when the improvements were commenced. Gillespie v. Bradford, 15 Tenn. 167, 15 Tenn. 168, 1834 Tenn. LEXIS 33, 27 Am. Dec. 494 (1834); H.E. Daniel & Co. v. Weaver, 73 Tenn. 392, 1880 Tenn. LEXIS 147 (1880).

The lien attaches to whatever estate the furnishee has in the property. The lienor has a right to rely upon the record title of the property. Thomas v. Setliffe, 160 Tenn. 689, 28 S.W.2d 344, 1929 Tenn. LEXIS 143 (1930).

8. Effect of Lien as to Particular Estates and Property.

9. —Equitable Estates.

An equitable estate is subject to the lien, and its owner is the one to be served with notice. Niehaus v. C. B. Barker Const. Co., 135 Tenn. 382, 186 S.W. 461, 1916 Tenn. LEXIS 34 (1916).

10. —Homestead.

The mechanic's lien for material furnished for improvements on the land claimed as a homestead prevails over the homestead right. Thompson v. Wickersham, 68 Tenn. 216, 1877 Tenn. LEXIS 21 (1877).

The homestead is not exempt from sale for the satisfaction of any debt or liability contracted or legally incurred for improvements made thereon, although the creditor may have lost his lien as a mechanic. Miller v. Brown & Forsythe, 79 Tenn. 155, 1883 Tenn. LEXIS 31 (1883).

11. —Leasehold.

A leaseholder, the owner of a leasehold estate or lessee for a term of years, is an “owner” within the meaning of this statute, and the mechanic's lien attaches to such estate, in the hands of the lessee or his assignee. Alley & Bush v. Lanier, 41 Tenn. 540, 1860 Tenn. LEXIS 103 (1860), overruled in part, Prowell v. Fowlkes, 64 Tenn. 649, 1875 Tenn. LEXIS 148 (1875); Burr v. Graves, 72 Tenn. 552, 1880 Tenn. LEXIS 63 (1880); H.E. Daniel & Co. v. Weaver, 73 Tenn. 392, 1880 Tenn. LEXIS 147 (1880); Reed v. Estes, 113 Tenn. 200, 80 S.W. 1086, 1904 Tenn. LEXIS 16 (1904); Thomas & Turner v. National Conservation Exposition Co., 137 Tenn. 1, 191 S.W. 348, 1916 Tenn. LEXIS 48 (1916); Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

The purchaser under a proceeding to enforce mechanic's lien against leasehold estate will acquire only such estate therein as was held by the lessee, subject to all the terms and provisions of the lease. Reed v. Estes, 113 Tenn. 200, 80 S.W. 1086, 1904 Tenn. LEXIS 16 (1904).

Where the lessor by agreement allowed the lessee to make certain improvements on the leased premises, and agreed to contribute a certain sum towards the costs thereof, and accordingly paid the sum, the contractor making the improvements, under a contract with the lessee alone, has no lien upon the property of the lessor as the owner of the fee. Reed v. Estes, 113 Tenn. 200, 80 S.W. 1086, 1904 Tenn. LEXIS 16 (1904); Thomas & Turner v. National Conservation Exposition Co., 137 Tenn. 1, 191 S.W. 348, 1916 Tenn. LEXIS 48 (1916); Roehl v. Henck, 5 Tenn. App. 153, 1926 Tenn. App. LEXIS 141 (1926).

Where at time the contract was let the party held only a leasehold estate, but thereafter acquired a deed in connection with a parol trust, the fee was not so acquired as that a lien of a mechanic would attach and defeat the beneficiary of such trust. Roehl v. Henck, 5 Tenn. App. 153, 1926 Tenn. App. LEXIS 141 (1926).

Term “agent” as used in the statute in referring to special contract with owner or agent includes a lessee required by the terms of the lease to make permanent improvements on the leased premises. Knox-Tenn Rental Co. v. Sarbec Corp., 59 Tenn. App. 564, 442 S.W.2d 652, 1968 Tenn. App. LEXIS 359 (1968).

Under a lease requiring the lessee to make improvement the lessee is the agent of the lessor and the lien attaches but under a lease merely permitting the lessee to make improvements the lien does not attach. Knox-Tenn Rental Co. v. Sarbec Corp., 59 Tenn. App. 564, 442 S.W.2d 652, 1968 Tenn. App. LEXIS 359 (1968).

Where assignable lease provided but did not require that improvements could be made by lessee, contractor who made certain improvements pursuant to contract with sublessee could not impress mechanic's lien on fee. Kalthoff, Inc. v. Southside Leasing Co., 63 Tenn. App. 618, 477 S.W.2d 15, 1971 Tenn. App. LEXIS 235 (1971).

Where lessee of real property was free to select the contractor, make change orders without consulting lessors, and deal independently with the contractor, the lessor did not maintain sufficient control over the lessee's actions to establish an agency relationship which would enable the contractor to claim a lien on lessor's property for the unpaid balance due on the work. Venture Constr. Co. v. Apple Music City, Inc., 847 S.W.2d 509, 1992 Tenn. App. LEXIS 653 (Tenn. Ct. App. 1992).

12. — —Levy on Leasehold Estate.

The attachment may be levied on a leasehold estate without going on the premises or taking actual possession of the property, because a leasehold estate is real estate. Burr v. Graves, 72 Tenn. 552, 1880 Tenn. LEXIS 63 (1880).

13. —Life Estate.

A life tenant cannot by his contract for improvements bind the estate in remainder or reversion. Allen v. Brown, 14 Tenn. App. 405, 1932 Tenn. App. LEXIS 49 (Tenn. App. Mar. 19, 1932).

14. —Married Woman's Property.

The lien since the married woman's emancipation statute, § 36-3-504, attaches to the general or separate estate of a married woman, as if she were a feme sole. Gould v. Frost, 138 Tenn. 467, 196 S.W. 949, 1917 Tenn. LEXIS 57 (1917); Phillip Carey Co. v. Harrison, 138 Tenn. 697, 200 S.W. 829, 1917 Tenn. LEXIS 79 (1917).

A mechanic's lien or materialman's lien will attach to a married woman's land the same as if she were unmarried, but in order to create a lien there must have been a special contract with her or her agent for the erection of the building. Bell Bros. & Co. v. Arnold, 17 Tenn. App. 493, 68 S.W.2d 958, 1933 Tenn. App. LEXIS 84 (1933).

15. —Personalty Temporarily Used on Third Party's Land.

The mechanic's lien does not exist on mere personalty as such while being temporarily used on a third party's land by permission of the landowner. For illustration, a mechanic employed by the owner of a portable engine, boiler, and appurtenance, to take the same down from one place and remove and erect them temporarily upon the land of a third party, by his permission, is not entitled to a lien, either upon the land or the machinery. Truxall v. Williams, 83 Tenn. 427, 1885 Tenn. LEXIS 62 (1885).

16. —Trade Fixtures Owned by Lessee.

Mechanics' or furnishers' liens do not embrace trade fixtures owned by lessee, situated upon property in possession of lessee under a month to month tenancy. Liles v. Peiser, 173 F.2d 882, 1949 U.S. App. LEXIS 3538 (6th Cir. 1949).

17. Nonlienable Items.

A florist did not acquire a mechanic's lien against a hotel or its real property for landscaping the property under contract with the owner. Nanz v. Cumberland Gap Park Co., 103 Tenn. 299, 52 S.W. 999, 1899 Tenn. LEXIS 108, 47 L.R.A. 273, 76 Am. St. Rep. 650 (1899).

The statute formerly did not cover the boring of a well and the furnishing of pipes and pumps therefor. Pillow v. Kelly, 155 Tenn. 597, 296 S.W. 11, 1926 Tenn. LEXIS 84 (1926).

Temporary heating, telephone for contractor, temporary lights, tarpaulin for covering materials, plate glass insurance, contractor's stationery, water, and sharpening saws are not lienable items, nor is premium paid on contractor's bond. Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

An architect's account for supplying plans and specifications for structural steel work for building and for superintending the placing of the steel in the building and the mixing and pouring of the concrete used affords no basis for maintenance of mechanic's lien. Howe v. Kaucher-Hodges & Co., 13 Tenn. App. 367, 1930 Tenn. App. LEXIS 144 (1930).

Moveable machinery placed on real property cannot be regarded as a permanent benefit to the real property within the meaning of this lien statute. Liles v. Peiser, 173 F.2d 882, 1949 U.S. App. LEXIS 3538 (6th Cir. 1949).

18. Furnishing for Improving Specified Property.

The furnisher of materials has no lien unless they are furnished to be used for improving certain specified property, and then the lien attaches to that property and the material so furnished. S.C. Gillespie & Co. v. Stanton, 67 Tenn. 284, 1874 Tenn. LEXIS 373 (1874); H.E. Daniel & Co. v. Weaver, 73 Tenn. 392, 1880 Tenn. LEXIS 147 (1880); Mills v. Terry Mfg. Co., 91 Tenn. 469, 19 S.W. 328, 1892 Tenn. LEXIS 16 (1892); Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); In re Am. Lime Co., 201 F. 433, 1912 U.S. Dist. LEXIS 1040 (E.D. Tenn. 1912); Pidgeon-Thomas Iron Co. v. McKnight, 8 Tenn. Civ. App. 1 (1918).

A person, by contract furnishing and laying subterranean pipes in the streets of a city and connecting them with the plant of a factory, as a cold storage factory and plant, for the purpose of distributing its product, cold storage vapor, to its customers, has a lien upon the factor, plant, pipes, and the like, and upon the lot on which they are situated, as an entirety. Steger v. Arctic Refrigerating Co., 89 Tenn. 453, 14 S.W. 1087, 1890 Tenn. LEXIS 70, 11 L.R.A. 580 (Tenn. Dec. 1890).

Furnisher of lumber in good faith, believing that it was to be used in a permanent structure, is entitled to a lien, although the lumber was used in making forms for concrete, and at least 75 per cent was usable at another place, after completion of the work for defendants. York Lumber & Mfg. Co. v. McKnight & Merz, 139 Tenn. 687, 203 S.W. 254, 1918 Tenn. LEXIS 14 (1918).

A vacuum cleaning plant operated by electricity, requiring special wiring, and consisting of certain parts permanently attached at the theater, and other parts which are loose, but can be attached to and detached from the parts attached to the building, as the use of the plant requires, is material used in the construction, and constitutes a lien for its installation. Tuec Co. v. McKnight & Merz, 140 Tenn. 67, 203 S.W. 338, 1918 Tenn. LEXIS 20 (1918).

A trucking company that hauled stone to a construction site was entitled to a lien against the property where its activities relating to the spreading and compaction of the stone was work on the site of the improvement and qualified it as a laborer. Winter v. Smith, 914 S.W.2d 527, 1995 Tenn. App. LEXIS 553 (Tenn. Ct. App. 1995).

19. Use of Materials Immaterial.

It is not the actual use of the materials in the improvements by the owner that constitutes the furnisher's lien, and if the furnished materials are not used, the lien exists on the materials and the property to be improved, to the same extent as if the materials had been used. H.E. Daniel & Co. v. Weaver, 73 Tenn. 392, 1880 Tenn. LEXIS 147 (1880); Jonte v. Gill, 39 S.W. 750, 1897 Tenn. Ch. App. LEXIS 12 (Tenn. Ch. App. Feb. 8, 1897); Hercules Powder Co. v. Knoxville, L. & J. R. Co., 113 Tenn. 382, 83 S.W. 354, 1904 Tenn. LEXIS 32, 106 Am. St. Rep. 836, 67 L.R.A. 487 (1904); S. B. Luttrell & Co. v. Knoxville L. & J. R. Co., 119 Tenn. 492, 105 S.W. 565, 1907 Tenn. LEXIS 18, 123 Am. St. Rep. 737 (1907); Voightman & Co. v. Southern R. Co., 123 Tenn. 452, 131 S.W. 982, 1910 Tenn. LEXIS 17 (1910); York Lumber & Mfg. Co. v. McKnight & Merz, 139 Tenn. 687, 203 S.W. 254, 1918 Tenn. LEXIS 14 (1918).

20. Notice.

The giving of the legal notice required in order to acquire a lien for labor performed or material furnished is a prerequisite to the filing of a bill to enforce the lien. Conger Lumber & Supply Co. v. White, 17 Tenn. App. 206, 66 S.W.2d 999, 1933 Tenn. App. LEXIS 56 (1933).

The filing of a suit to enforce a materialman's lien, within the time prescribed by the statute for filing notice of lien, and the service of summons on defendant, are not a sufficient compliance with the requirements of the statutes as to the giving of written notice of intention to hold lien on the property for material furnished, within a prescribed time. Conger Lumber & Supply Co. v. White, 17 Tenn. App. 206, 66 S.W.2d 999, 1933 Tenn. App. LEXIS 56 (1933).

21. Parties.

22. —Owner of Record.

For the purpose of making an owner of property to be subjected a party to the attachment suit, a claimant is entitled to rely upon the record showing of ownership to show the ownership. Fischer Lime & Cement Co. v. Kaucher, 164 Tenn. 657, 51 S.W.2d 492, 1931 Tenn. LEXIS 66 (1931).

23. —Principal Contractor.

Since the principal contractor has the right to contest the indebtedness claimed by a subcontractor, to the foreclosure of the latter's lien, the principal contractor is a necessary party as one entitled to his day in court. Warner v. A.H. Yates & Co., 118 Tenn. 548, 102 S.W. 92, 1907 Tenn. LEXIS 62 (Tenn. Apr. 1907).

Error in failing to join the contractor as a party defendant may be waived. S. B. Luttrell & Co. v. Knoxville L. & J. R. Co., 119 Tenn. 492, 105 S.W. 565, 1907 Tenn. LEXIS 18, 123 Am. St. Rep. 737 (1907).

24. Tenant by Entireties — Consent to Improvement.

Where a materialman's lien is sought to be foreclosed upon land held by the husband and wife as tenants by the entireties, and the wife defends on the ground that she did not consent to the erection of the building or the furnishing of the material for the building, either in person or by her husband as her agent, the liability of her interest in the property is established by the fact that she took active part in supervising the construction of the building, and was glad to have it constructed on the land in which she had an interest as a tenant by the entireties, and joined her husband in executing a trust deed on the property, and did not object to the construction of the building. Bell Bros. & Co. v. Arnold, 17 Tenn. App. 493, 68 S.W.2d 958, 1933 Tenn. App. LEXIS 84 (1933).

25. Contractor as Agent of Owner.

The contractor may be agent of the owner where owner contracts that a building shall be erected on his land. Jonte v. Gill, 39 S.W. 750, 1897 Tenn. Ch. App. LEXIS 12 (Tenn. Ch. App. Feb. 8, 1897).

Where an owner sold lots to the contractor, with lien for purchase money retained on lot, but by agreement that the lot should be improved by the construction of a building and then sold, the expenses of construction paid, and the vendor's notes paid, any surplus to be the contractor's profit, the contractor was but an agent of the owner and the latter's lien was subject to the lien of mechanics and materialmen who aided in construction. In such case materialmen and laborers need not give notice within 30 days after completion. Jonte v. Gill, 39 S.W. 750, 1897 Tenn. Ch. App. LEXIS 12 (Tenn. Ch. App. Feb. 8, 1897).

A contractor or materialman, who had a contractual agreement with a lessee, did not have a lien on the lessor's interest in lessee's bankruptcy proceedings and was not an agent of the lessor where under the lease the lessor had no control over the lessee's equipment, did not require any improvements be made, there was no pass-through provision in the lease whereby the lessor agreed to pay for a lessee's improvements, and the lease specifically provided that the lessee, at its option, could remove any of the improvements made at the end of the lease. Hussmann Refrigeration, Inc. v. South Pittsburg Associates, 697 S.W.2d 588, 1985 Tenn. App. LEXIS 2941 (Tenn. Ct. App. 1985).

26. —Failure to Prove Contractor Agent of Owner — Effect.

Where complainant sought to establish a lien on real property for materials furnished a contractor as agent of the land owner but the evidence showed the contractor to be an independent contractor and not an agent of the owner, the suit was based on sale of materials to the owner through its agent and such suit failed because an essential fact was not proved. W.T. Hardison & Co. v. Harding Court Co., 36 Tenn. App. 98, 251 S.W.2d 829, 1952 Tenn. App. LEXIS 97 (1952).

27. Status of Mechanic's Lien as to Prior and Subsequent Liens.

The mechanic's lien will hold against a subsequent purchaser from owner and against a lien by subsequent judgment against him, but it is inferior to existing liens for purchase money, by mortgage, judgment, or otherwise. Gillespie v. Bradford, 15 Tenn. 167, 15 Tenn. 168, 1834 Tenn. LEXIS 33, 27 Am. Dec. 494 (1834); H.E. Daniel & Co. v. Weaver, 73 Tenn. 392, 1880 Tenn. LEXIS 147 (1880). But see § 66-11-110.

28. —Vendor's Lien.

Where unrecorded contract for sale of land was executed by vendor, although title was in vendor's grantor, and provided that purchaser was to construct building thereon, that balance due was to be secured by vendor's lien and that there was to be no liability on part of vendor for material or labor furnished and where vendor was on property during construction but did not inform furnishers or workmen of his rights under the contract, furnishers and workmen were entitled to lien against vendor superior to such vendor's lien where vendee disappeared after construction of building without paying any of the parties involved and vendor thereafter, recorded deed of his grantor and took possession. Rowland v. Lowe, 46 Tenn. App. 60, 326 S.W.2d 681, 1959 Tenn. App. LEXIS 88 (1959).

29. —Subsequent Mortgage.

The lien of a furnisher, which attached prior to the registration of a mortgage, has priority over the lien of the mortgage. Bristol-Goodson Elec. Light & Power Co. v. Bristol Gas, Elec. Light & Power Co., 99 Tenn. 371, 42 S.W. 19, 1897 Tenn. LEXIS 42 (1897).

A subsequently recorded mortgage whose holder was not provided written notice of the architectural lien has priority over an earlier in time unrecorded lien of an architect. CainRash Architectural Group, Inc. v. Premier Hotel Dev. Group (In re Premier Hotel Dev. Group), 271 B.R. 813, 2002 Bankr. LEXIS 36 (Bankr. E.D. Tenn. 2002).

30. —Subsequent Purchase.

A lienor may preserve the priority of a contractor's lien as to subsequent purchasers or encumbrancers within the meaning of T.C.A. § 66-11-112(a) by filing suit within 90 days of when work is completed. Don Huckaby Plumbing Co. v. Cardinal Industries Mortg. Co., 848 S.W.2d 57, 1993 Tenn. LEXIS 14 (Tenn. 1993), rehearing denied, 848 S.W.2d 57, 1993 Tenn. LEXIS 101 (Tenn. 1993).

31. Respective Rights of Conditional Vendee and Subsequent Mortgagee.

The rights of an innocent subsequent mortgagee prevail over the rights of the seller of machinery sold under conditional sale, with retention of title until paid for, where the machinery is put into the purchaser's building, and intended to be permanently attached to the freehold. Union Bank & Trust Co. v. Fred W. Wolf Co., 114 Tenn. 255, 86 S.W. 310, 1904 Tenn. LEXIS 86, 108 Am. St. Rep. 903, 4 Ann. Cas. 1070 (1904).

Where seller retained title to furnace installed by him in a private residence, and the furnace could be removed without serious injury to the realty, the seller's right was superior to that under mortgage of the realty executed before installation of the furnace. Lenois Land Co. v. Haynes Heating Co., 166 Tenn. 494, 63 S.W.2d 659, 1933 Tenn. LEXIS 105 (1933).

32. Respective Rights of Attorney and Lienor.

Fees to attorney for filing a bill to sell the property and adjust all liens and claims cannot have priority over a mechanic's lien that had previously attached. Steger v. Arctic Refrigerating Co., 89 Tenn. 453, 14 S.W. 1087, 1890 Tenn. LEXIS 70, 11 L.R.A. 580 (Tenn. Dec. 1890).

33. Mechanic Taking Property in Payment.

A mechanic who takes machinery in payment for his work loses priority to a bona fide mortgagee who advanced money on the property after, and in reliance on, such payment, and this though the title to the machinery failed and was repossessed by a title retainer. Action for breach of warranty on the part of the mechanic could not restore to him status for the priority as lienor. Garrett v. Adams, 39 S.W. 730, 1897 Tenn. Ch. App. LEXIS 6 (Tenn. Ch. App. Mar. 1, 1897).

34. Transfer of Title to Lienor as Security — Effect.

One contracting with owner to erect improvements on lot and then turn lot over to a purchaser from the owner has a lien under this section for his expenditures for labor and materials for one year and “until the decision of any suit that may be brought within that time for the debt due said mechanic or undertaker.” This lien is not affected by the transfer to him of title to the lot as security. It may be enforced in such case without attachment process. Arnstein Realty Co. v. Williams, 163 Tenn. 69, 40 S.W.2d 1007, 1931 Tenn. LEXIS 89 (1931).

35. Bankruptcy of Contractor — Effect.

The trustee in bankruptcy is bound by bankrupt contractor's agreement in respect of delay in time of completion made by him and the owner. Harrison v. Knafle, 128 Tenn. 329, 161 S.W. 1003, 1913 Tenn. LEXIS 52 (1913).

A discharge in bankruptcy by principal contractor does not bar holders of mechanic's lien from foreclosing their liens on the property involved where action to foreclose liens against principal contractor and owner was pending at the time the principal contractor filed bankruptcy petition. Chickasaw Hotel Co. v. C.B. Barker Constr. Co., 135 Tenn. 305, 186 S.W. 115, 1916 Tenn. LEXIS 28, 1916F L.R.A. (n.s.) 106 (1916).

36. Credit to Which Owner Entitled.

Under a contract to remodel a house, the owner is entitled to credit on the contract price for old material which belonged to her and was used in the improvement, and for the amount she expended to complete the improvement, after the contractors abandoned the work. Richardson v. Lanius, 150 Tenn. 133, 263 S.W. 799, 1923 Tenn. LEXIS 70 (1923).

37. Profits.

Contractor is not entitled to lien for amount representing profits under cost plus basis. Roehl v. Henck, 5 Tenn. App. 153, 1926 Tenn. App. LEXIS 141 (1926).

38. Interest.

Where judgment showed that the court had allowed a sum as interest on a mechanic's lien account but such judgment failed to set out the interest separately, since the complainant was entitled to interest, and as the decree showed on its face that interest had been computed and allowed, the same should not be set aside on that account. D.M. Rose & Co. v. Dysart, 8 Tenn. App. 325, 1928 Tenn. App. LEXIS 147 (1928).

As against the objection that interest should not be allowed on a lien claim because it would increase the amount beyond that of the contract price, the chancellor would not be held in error for that reason but on account of other facts in the particular case interest should not have been allowed. Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

39. Estoppel to Assert Lien.

A contractor is estopped to assert his lien against the purchaser or encumbrancer of the encumbered property, where the purchaser was induced to buy and pay for the property upon the contractor's representation that no such lien existed against it. Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Bristol-Goodson Elec. Light & Power Co. v. Bristol Gas, Elec. Light & Power Co., 99 Tenn. 371, 42 S.W. 19, 1897 Tenn. LEXIS 42 (1897).

The claimant of mechanic's lien estops himself to assert his lien as against the innocent holders of mortgage bonds reciting that they are secured by first mortgage on the improved property, by suggesting the issue of such bonds, and offering to take part of the same as collateral security for part of his lien claim, and by assisting in the sale of the balance of such bonds to innocent purchasers, though the latter are not shown to have been directly influenced by his statements or assurances. Bristol-Goodson Elec. Light & Power Co. v. Bristol Gas, Elec. Light & Power Co., 99 Tenn. 371, 42 S.W. 19, 1897 Tenn. LEXIS 42 (1897).

Collateral References.

Amount for which mechanic's lien may be obtained where contract has been terminated or abandoned by consent of parties or without fault on contractor's part. 51 A.L.R.2d 1009.

Architect's services as within mechanics' lien statute. 31 A.L.R.5th 664.

Assertion of statutory mechanic's or materialman's lien against oil and gas produced or against proceeds attributable to oil and gas sold. 59 A.L.R.3d 278.

Charge of use of machinery, tools, or appliances used in construction as basis for mechanic's lien. 3 A.L.R.3d 573.

Church property as subject of mechanic's lien. 85 A.L.R. 953.

Contract against mechanics' liens, validity and effect of. 13 A.L.R. 1065, 102 A.L.R. 356, 76 A.L.R.2d 1087, 75 A.L.R.3d 505.

“Contractor,” within provisions of Mechanic's Lien Law which limits liens for material or labor furnished to contractor to amount earned but unpaid on contract, or gives such liens by subrogation. 83 A.L.R. 1152.

Delivery of material to building site as sustaining mechanic's lien — Modern cases. 32 A.L.R.4th 1130.

Demand for or submission to arbitration as affecting enforcement of mechanics' lien. 73 A.L.R.3d 1042.

Enforceability of mechanic's lien attached to leasehold estate against landlord's fee. 74 A.L.R.3d 330.

Fixture, heating plant, as basis for mechanic's lien. 126 A.L.R. 605.

Labor in examination, repair, or servicing of fixtures, machinery, or attachments in building, as supporting a mechanic's lien, or as extending time for filing such a lien. 51 A.L.R.3d 1087.

Landlord's liability to third party for repairs authorized by tenant. 46 A.L.R.5th 1.

Landscaping, grading, clearing, filling, evacuating, and the like, mechanic's lien. 39 A.L.R.2d 866.

Mechanic's lien for labor on material furnished under contract with vendor pending executory contract for sale of property as affecting purchaser's interest. 50 A.L.R.3d 944.

Mechanic's lien for services of person supervising construction of building, architect, etc. 60 A.L.R. 1257.

Municipal property as subject to mechanic's lien. 51 A.L.R.3d 657.

Payment in property other than money, mechanic's lien as affected by agreement for. 81 A.L.R. 766.

Person performing work only part of which is of a lienable character, extent of lien of. 149 A.L.R. 701.

Presumption and burden of proof in action involving mechanic's lien, as affected by delivery of material to building site. 32 A.L.R.4th 1130.

Removal or demolition of building or other structure as basis for mechanic's lien. 74 A.L.R.3d 386.

Right to mechanic's lien as for “labor” or “work,” in case of preparatory or fabricating work done on materials intended for use and used in particular building or structure. 25 A.L.R.2d 1370.

Right to mechanic's lien upon leasehold for supplying labor or material in attaching or installing fixtures. 42 A.L.R.2d 685.

Surveyor's work as giving rise to right to mechanic's lien. 35 A.L.R.3d 1391.

Swimming pool as lienable item within mechanic's lien statute. 95 A.L.R.2d 1371.

66-11-103. Contract with owner's spouse.

When the contract for improving real property is made with a husband or a wife who is not separated and living apart from that person's spouse, and the property is owned by the other spouse or by both spouses, the spouse who is the contracting party shall be deemed to be the agent of the other spouse unless the other spouse serves the prime contractor with written notice of that spouse's objection to the contract within ten (10) days after learning of the contract.

Code 1932, § 7933; T.C.A. (orig. ed.), § 64-1103; Acts 2007, ch. 189, § 3.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agency, § 2.

NOTES TO DECISIONS

1. Husband as Agent of Wife — Right of Wife to Claim Homestead.

Where husband contracted for construction of houses on two lots owned as tenants by the entirety by his wife and himself and where the wife knew of the character of her husband's business and participated in the execution of trust deeds on such lots to finance the construction of such improvements on the lots, the provisions of this section were applicable so that the husband was deemed to be the agent of the wife in the erection of the improvements and the wife was not entitled to claim homestead exemption on such lots superior to materialmen's and mechanics' liens. Wittichen v. Miller, 179 Tenn. 352, 166 S.W.2d 612, 1942 Tenn. LEXIS 30 (1942).

2. Wife Bound to Contract her Husband Signed.

Wife who did not sign construction contract, but whose husband did sign the construction contract, was bound to the arbitration provision contained in the construction contract because her husband signed the construction contract on his behalf and as her agent. Reagan v. Higgins, 88 S.W.3d 173, 2002 Tenn. App. LEXIS 159 (Tenn. Ct. App. 2002).

Collateral References.

Husband's contract of work performed or materials furnished as giving right to lien against wife's property. 4 A.L.R. 1025.

Ratification by wife. 4 A.L.R. 1052.

66-11-104. Time of attachment of lien.

  1. The lien provided by this chapter shall attach and take effect from the time of the visible commencement of operations, excluding however, demolition, surveying, excavating, clearing, filling or grading, placement of sewer or drainage lines, or other utility lines or work preparatory therefor, erection of temporary security fencing and the delivery of materials therefor.
  2. If there is a cessation of all operations at the site of the improvement for more than ninety (90) days and a subsequent visible resumption of operations, any lien for labor performed or for materials furnished after the visible resumption of operations shall attach and take effect only from the visible resumption of operations.
  3. Nothing in this section shall affect the priority or parity of any liens as established by any section of this chapter.

Code 1932, § 7915; Acts 1977, ch. 424, § 1; T.C.A. (orig. ed.), § 64-1104; Acts 1996, ch. 591, § 1; 2007, ch. 189, § 4; 2013, ch. 469, § 5.

Compiler's Notes. Acts 2013, ch. 469, § 6 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after July 1, 2013, and to liens filed for construction performed on or after July 1, 2013.

Law Reviews.

Mechanics' Liens in Tennessee — Recent Developments, 6 Mem. St. U.L. Rev. 519 (1976).

1996 Real Estate Legislation: What You Don't Know Can  Hurt You (William R. Bruce), 32 No. 6 Tenn. B.J. 12 (1996).

NOTES TO DECISIONS

1. Inception of Lien.

Inception of mechanic's and furnisher's lien is fixed and controlled by the statute. Williams Lumber & Supply Co. v. Poarch, 221 Tenn. 540, 428 S.W.2d 308, 1968 Tenn. LEXIS 483 (1968).

2. —Commencement of Operations.

A materialman's lien which meets the statutory prerequisites of creation and perfection relates back to the visible commencement of operations. Williams Lumber & Supply Co. v. Poarch, 221 Tenn. 540, 428 S.W.2d 308, 1968 Tenn. LEXIS 483 (1968).

Where lot owner commenced to lay foundation for house on certain date, corporation thereafter began construction of shell house and thereafter materialman furnished supplies to owner for completion of interior, starting of foundation was visible commencement of operations so that materialman's lien related back to that time and was superior to trust deed recorded after that time but prior to delivery of materials. Williams Lumber & Supply Co. v. Poarch, 221 Tenn. 540, 428 S.W.2d 308, 1968 Tenn. LEXIS 483 (1968).

Where mortgagee was under an obligation to advance additional sums up to total of $25,000 on construction loan after having loaned an initial $2,500 and did in fact make such additional advances over a period of months, lien of mortgagee for full amount of $25,000 related back to time of filing or original trust deed and was superior to mechanics' and materialmen's liens where no material was delivered and no labor was expended prior to the time the trust deed was executed and recorded and the original $2,500 loaned. Kemp v. Thurmond, 521 S.W.2d 806, 1975 Tenn. LEXIS 698 (Tenn. 1975).

Under a revised version of the lien statutes, a contractor's lien took “effect from the time of the visible commencement of operations,” which was in February 2007. Under either version of the statute, given that the date of visible commencement of operations was prior to a lender's recording of its Deed of Trust, the lender would have been aware that another party's lien could take priority over its Deed of Trust, and its substantive rights were not impaired by the liberal application of the amended lien statutes. Tri Am Constr., Inc. v. J & V Dev., Inc., 415 S.W.3d 242, 2011 Tenn. App. LEXIS 466 (Tenn. Ct. App. Aug. 30, 2011), appeal denied, — S.W.3d —, 2012 Tenn. LEXIS 109 (Tenn. Feb. 15, 2012).

Collateral References.

Abandonment of construction or of contract as affecting time for filing mechanics' lien or time for giving notice to owner. 52 A.L.R.3d 797.

Labor in examination, repair, or servicing of fixtures, machinery, or attachments in building, as supporting a mechanic's lien, or as extending time for filing such a lien. 51 A.L.R.3d 1087.

Time when contractor commenced work or time when labor or material for which lien is claimed was furnished as date of mechanic's lien. 83 A.L.R. 925.

What constitutes “commencement of building or improvement” for purposes of determining accrual of mechanic's lien. 1 A.L.R.3d 822.

66-11-105. Extent of lien — Removal of property.

  1. The lien shall extend to, and only to, the owner's right, title or interest in the real property and improvements on the real property existing at the time of the visible commencement of operations or thereafter acquired or constructed.
  2. If any part of the real property or improvements subject to the lien is removed by the owner or any other person at any time before discharge of the lien, the removal shall not affect the rights of the lienor either in respect to the real property and improvements or the part so removed.

Code 1932, § 7916; T.C.A. (orig. ed.), § 64-1105; Acts 2007, ch. 189, § 5.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

66-11-106. Duration of lien.

A prime contractor's lien shall continue for one (1) year after the date the improvement is complete or is abandoned, and until the final decision of any suit properly brought within that time for its enforcement.

Code 1858, § 1985 (deriv. Acts 1845-1846, ch. 118, § 1); Shan., § 3539; mod. Code 1932, § 7917; T.C.A. (orig. ed.), § 64-1106; Acts 2007, ch. 189, § 6.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 5, 14, 18, 23.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

NOTES TO DECISIONS

1. Status and Effect of Lien.

The mechanic's lien binds the land as a proceeding in rem, as against the owner's subsequent conveyance or other disposition of it, and as against subsequent adverse proceedings by attachment or otherwise. Furguson v. Ellis, 25 Tenn. 268, 1845 Tenn. LEXIS 77 (1845); Weller & Bell v. McNabb, 36 Tenn. 422, 1857 Tenn. LEXIS 24 (1857); Burr v. Graves, 72 Tenn. 552, 1880 Tenn. LEXIS 63 (1880); Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Ruston v. Perry Lumber Co., 104 Tenn. 538, 58 S.W. 268, 1900 Tenn. LEXIS 27 (1900).

2. Sale of Property — Effect on Lien.

A sale by owner of the property does not prevent enforcement by suit of lienor if commenced within the year allowed. Furguson v. Ellis, 25 Tenn. 268, 1845 Tenn. LEXIS 77 (1845).

Where the purchaser of land under a parol contract procures a mechanic to make improvements thereon, and then sells the property and procures his parol vendor to make a deed to his (the parol purchaser's) vendee, who covenants to pay the mechanic's debt for the improvements, the mechanic's lien is not lost unless he relinquishes his lien. Furguson v. Ellis, 25 Tenn. 268, 1845 Tenn. LEXIS 77 (1845). See Weller & Bell v. McNabb, 36 Tenn. 422, 1857 Tenn. LEXIS 24 (1857).

3. Limitations — Extent of Period.

The suit for the enforcement of the lien must be commenced within one year after the work is finished or materials are furnished. Furguson v. Ellis, 25 Tenn. 268, 1845 Tenn. LEXIS 77 (1845); Barnes v. Thompson, 32 Tenn. 313, 1852 Tenn. LEXIS 72 (1852); Dunn v. McKee, 37 Tenn. 657, 1858 Tenn. LEXIS 89 (1858); Stout, Mills & Temple v. Swaney, 3 Shan. 93 (1879); H.E. Daniel & Co. v. Weaver, 73 Tenn. 392, 1880 Tenn. LEXIS 147 (1880); Ragon v. Howard, 97 Tenn. 334, 37 S.W. 136, 1896 Tenn. LEXIS 148 (1896).

Pursuant to one article of the architect agreement, the architectural firm was permitted to proceed in accordance with the law to comply with lien notice or filing deadlines, and the applicable law allowed the firm to bring a lien enforcement action up to one year after the improvement was complete; the notice of completion stated the date of October 21, 2008, and the firm filed suit within the one-year statute of limitations, such that the suit was timely. TWB Architects, Inc. v. The Braxton, LLC, — S.W.3d —, 2014 Tenn. App. LEXIS 703 (Tenn. Ct. App. Oct. 30, 2014), appeal denied, TWB Architects, Inc. v. Braxton, LLC, — S.W.3d —, 2015 Tenn. LEXIS 173 (Tenn. Feb. 12, 2015).

4. Beginning of Running of Statute.

Where the contract is entire, the statute of limitation begins to run against the lien when the building is substantially finished, and is treated by all the parties as completed, though something unimportant, or not of the essence of the contract may remain undone. Luter & Daniel v. Cobb, 41 Tenn. 525, 1860 Tenn. LEXIS 100 (1860).

In case of materialman, the time for acquiring the lien by filing notice begins to run from the delivery of the last materials. Bristol-Goodson Elec. Light & Power Co. v. Bristol Gas, Elec. Light & Power Co., 99 Tenn. 371, 42 S.W. 19, 1897 Tenn. LEXIS 42 (1897); Voightman & Co. v. Southern R. Co., 123 Tenn. 452, 131 S.W. 982, 1910 Tenn. LEXIS 17 (1910).

Where a materialman furnishes material, part of which the owner's inspector, after the delivery thereof, rejected as defective, the fact that the materialman thereafter furnished additional materials to be used in the place of the alleged defective materials, and so used, did not extend the time for his acquiring a lien for his materials previously furnished under the original contract, but the time for acquiring such lien began to run from the delivery of the last material under the original contract. Voightman & Co. v. Southern R. Co., 123 Tenn. 452, 131 S.W. 982, 1910 Tenn. LEXIS 17 (1910).

5. Acts Sufficient to Stop Running of Statute.

The lien is lost if the lienor fails to cause the attachment to be issued and levied within one year after the accrual of his right, and the mere commencement of suit in time, followed by the issuance and levy of the attachment after the expiration of one year will not preserve the lien. Ragon v. Howard, 97 Tenn. 334, 37 S.W. 136, 1896 Tenn. LEXIS 148 (1896).

It is sufficient to prevent loss of mechanic's lien if the bill against the owner is filed and the attachment is levied within the year, and other parties, without the issuance of another attachment, may be thereafter brought in by an amended and supplemental bill to test priorities. Ragon v. Howard, 97 Tenn. 334, 37 S.W. 136, 1896 Tenn. LEXIS 148 (1896).

6. Burden of Showing Lien Not Barred.

The person claiming the lien must show clearly, by satisfactory proof, that his suit was brought within one year from the completion of the work. Dunn v. McKee, 37 Tenn. 657, 1858 Tenn. LEXIS 89 (1858); Luter & Daniel v. Cobb, 41 Tenn. 525, 1860 Tenn. LEXIS 100 (1860); Kay v. Smith, 57 Tenn. 41, 1872 Tenn. LEXIS 392 (1872); Thompson v. Baxter, 92 Tenn. 305, 21 S.W. 668, 1892 Tenn. LEXIS 77, 36 Am. St. Rep. 85 (1892).

7. Waiver of Lien.

A furnisher by taking a note for his claim which note did not mature for more than the year allowed waived his lien to the extent of such note. The lien is not lost as to a note maturing within the year. Citizens' Bank v. H.A. Klyce Co., 127 Tenn. 669, 156 S.W. 1083, 1913 Tenn. LEXIS 9 (1913).

8. Subrogation of Creditor of Owner After Lapse of Lien.

When the time for the enforcement of a furnisher's lien has expired, a bank which furnished the owner money with which to pay the furnisher cannot be subrogated to the latter's claim of lien. Old Nat'l Bank v. Swearingen, 167 Tenn. 529, 72 S.W.2d 545, 1934 Tenn. LEXIS 11 (1934).

9. Loss of Lien as Ground to Contest Judgment.

A bona fide purchaser of land may successfully contest the claim of a creditor of the vendor, by virtue of a mechanic's lien fixed by attachment and judgment before a justice of the peace (now general session judge), by showing that the lien debt had been paid before the sale and judgment, and that the lien was lost by a failure to register the judgment as required by a statute then in force. Montgomery v. Rich, 3 Cooper's Tenn. Ch. 660 (1878).

Collateral References.

Dismissal of proceeding to enforce mechanic's lien because of delay in prosecuting it. 79 A.L.R. 847.

Removal or demolition of building or other structure as basis for mechanic's lien. 74 A.L.R.3d 386.

Time limitation in mechanic's lien statute as a limitation of the right or only of the remedy. 139 A.L.R. 903.

Waiver of failure to bring suit to enforce lien in time prescribed, by failure to raise objection by demurrer or answer. 93 A.L.R. 1462.

What amounts to bringing of suit within limited time required by mechanics' lien statute. 75 A.L.R. 695.

66-11-107. Parity of liens — Priority of laborers' liens.

All liens provided by this chapter, except those of laborers, shall be on a parity, and shall be treated pro rata. All liens of laborers shall be on a parity one with another, and shall have priority over all other liens created by this chapter.

Code 1858, § 1984 (deriv. Acts 1845-1846, ch. 118, § 1); Shan., § 3538; mod. Code 1932, § 7926; T.C.A. (orig. ed.), § 64-1107; Acts 2007, ch. 189, § 7.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

Titles as Affected by Liens (Hugh A. Tapp), 28 Tenn. L. Rev. 352 (1961).

NOTES TO DECISIONS

1. Individual Mechanics — Rights.

This statute extends the mechanic's lien separately to each person who may do part of the work or furnish part of the materials. Gillespie v. Bradford, 15 Tenn. 167, 15 Tenn. 168, 1834 Tenn. LEXIS 33, 27 Am. Dec. 494 (1834); Furguson v. Ellis, 25 Tenn. 268, 1845 Tenn. LEXIS 77 (1845).

2. Proportioning Lien.

A furnisher of materials is entitled to a lien only in proportion that his claim bears to contract price, in view of this section and §§ 66-11-115 and 66-11-120 though the owner during progress of the work had paid claims of laborers whose liens had not been perfected and though furnisher's claim was less than the contract price. Richardson v. Lanius, 150 Tenn. 133, 263 S.W. 799, 1923 Tenn. LEXIS 70 (1923).

Where claims of furnishers of labor and materials exceeded the contract price and some furnishers of labor and materials had been paid in full, but others had not, the formula to be used to determine the pro rata share of each lien claimant is to divide the total contract price by the total lienable claims, both paid and unpaid, for material and labor used in constructing the improvement in accordance with the original contract, and the percentage thus determined is applied to each outstanding claim. Standard Glass & Supply Co. v. Sheley, 604 S.W.2d 36, 1980 Tenn. LEXIS 481 (Tenn. 1980).

3. Materials for Buildings on Separate Lots.

Where bricks were furnished for a block of buildings erected on two adjoining lots, the titles to which were derived from distinct and different sources, and which were subject to the distinct claims, liens, and equities of third persons, the furnisher's lien against one of the lots must be apportioned and limited, in a contest with such third persons, to the value of the brick furnished and used on that particular lot. Ragon v. Howard, 97 Tenn. 334, 37 S.W. 136, 1896 Tenn. LEXIS 148 (1896). See also § 64-1118.

Collateral References.

Amount of owner's obligation under his guaranty of subcontractor's or materialman's account, as deductible from amount otherwise due principal contractor, as against claims of other subcontractors or materialmen. 153 A.L.R. 759.

Oil and gas, priority of statutory lien for labor or material in developing property for. 122 A.L.R. 1182.

Subcontractor, right of one furnishing labor to, to priority of payment from sums owing to principal contractor for public improvement. 112 A.L.R. 824.

66-11-108. Priority over mortgage.

If the contract for an improvement is made with a mortgagor, and the lienor has served the mortgagee with written notice of the same by certified or registered mail before the work is begun or materials furnished by the lienor, and the mortgagee gives written consent thereto by certified or registered mail, the lien provided by this chapter to that lienor shall have priority over the mortgage; and if the mortgagee fails to serve a written objection by certified or registered mail within ten (10) days after receipt of the notice, the mortgagee's consent shall be implied; provided, that the person giving notice shall include a name and return address to which the written objection shall be served. If notice is not served in accordance with this section, then the lien shall not have priority over a mortgage otherwise entitled to priority over the lien under applicable law.

Code 1858, § 1982 (deriv. Acts 1857-1858, ch. 24, §§ 1, 2); Shan., § 3536; Code 1932, § 7924; Acts 1975, ch. 200, § 1; T.C.A. (orig. ed.), § 64-1108; Acts 2007, ch. 189, § 8.

Cross-References. Certified mail in lieu of registered mail, § 1-3-111.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 15-19.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

NOTES TO DECISIONS

1. Form and Sufficiency of Notice.

No particular form of written notice is prescribed by the statute, it only being provided that the mortgagee have written notice of the same before the work is begun and consent thereto. Neely v. Clarence Saunders Co., 169 Tenn. 30, 81 S.W.2d 390, 1935 Tenn. LEXIS 11 (1935).

Where mortgagee registered trust deed notes payable to bearer and before maturity negotiated notes to bank as collateral for preexisting indebtedness, notice to mortgagee of contract executed between mortgagor and holder of mechanic's lien for labor performed on real estate secured by notes was not notice to bank as a holder in due course, and holder of mechanic's lien was not entitled to priority over bank. Neely v. Clarence Saunders Co., 169 Tenn. 30, 81 S.W.2d 390, 1935 Tenn. LEXIS 11 (1935).

A mortgagee who sees a written contract between mortgagor and lien holder has “written notice” of the contract. Neely v. Clarence Saunders Co., 169 Tenn. 30, 81 S.W.2d 390, 1935 Tenn. LEXIS 11 (1935).

2. Intention of Parties.

A statutory lien does not take precedence in the absence of a clear intention to override a prior contractual lien. Nashville v. Weakley, 170 Tenn. 278, 95 S.W.2d 37, 1935 Tenn. LEXIS 132 (1936).

3. Mortgage Previously Registered.

Registry of the mortgage is sufficient notice. Reid v. Bank of Tennessee, 33 Tenn. 262, 1853 Tenn. LEXIS 40 (1853).

The mechanic's lien is inferior to that of a mortgage where the materials for which the lien is asserted were furnished after the registration of the mortgage and without notice to the mortgagee, though upon a contract with the mortgagor, made prior to the mortgage. Rawlings v. New Memphis Gaslight Co., 105 Tenn. 268, 60 S.W. 206, 1900 Tenn. LEXIS 76, 80 Am. St. Rep. 880 (1900). See Reid v. Bank of Tennessee, 33 Tenn. 262, 1853 Tenn. LEXIS 40 (1853); Pride v. Viles, 35 Tenn. 125, 1855 Tenn. LEXIS 27 (1855).

Where a college sold a lot and agreed to lend money for the construction of a building thereon, and the lot was actually conveyed and a trust deed executed by the grantee and registered, the lien of the college under the trust deed was superior to the lien of materialmen subsequently furnishing materials, although a contract was entered into between the purchaser and the college for the construction of the building, such contract being entered into in order to obtain a bond to protect the college. Kingsport Brick Corp. v. Bostwick, 145 Tenn. 19, 235 S.W. 70, 1921 Tenn. LEXIS 69 (1921).

A mechanic's lien is subordinate to that of a mortgagee, if the lien of the mortgagee is of record prior to the time the mechanic's lien attaches, unless the mortgagee has written notice of the contract with the mortgagor before the work is begun and the materials furnished and consents thereto. Kingsport Brick Corp. v. Bostwick, 145 Tenn. 19, 235 S.W. 70, 1921 Tenn. LEXIS 69 (1921). See Parker-Harris Co. v. Tate, 135 Tenn. 509, 188 S.W. 54, 1916 Tenn. LEXIS 44, 1916F L.R.A. (n.s.) 935 (1916).

Vendor taking contemporaneous trust deed to secure purchase money, which is recorded, has priority over mechanic's liens. Prichard Bros. v. Causey, 158 Tenn. 53, 12 S.W.2d 711, 1928 Tenn. LEXIS 123 (1929).

4. Subsequently Recorded Mortgage.

A lien for materials furnished is superior to the lien of a mortgage registered after the delivery of the materials was commenced under a contract with the owner. Bristol-Goodson Elec. Light & Power Co. v. Bristol Gas, Elec. Light & Power Co., 99 Tenn. 371, 42 S.W. 19, 1897 Tenn. LEXIS 42 (1897); Thomas v. Setliffe, 160 Tenn. 689, 28 S.W.2d 344, 1929 Tenn. LEXIS 143 (1930).

An original vendor's lien was retained, in registered deed, against the owner. Thereafter a trust deed was taken to secure the purchase money, but, before it was registered, materials for improvement of the property were furnished the owner. The furnisher's lien had priority over trust deed and purchaser thereunder. Thomas v. Setliffe, 160 Tenn. 689, 28 S.W.2d 344, 1929 Tenn. LEXIS 143 (1930).

Where the furnisher began furnishing materials before the execution and recordation of the mortgage, nothing further appearing, the furnisher has the superior lien. McDonnell v. Amo, 162 Tenn. 36, 34 S.W.2d 212, 1930 Tenn. LEXIS 60 (1931).

5. Subsequent Mortgagee — Right to Contest Lien.

A mortgagee who is a party defendant to a suit for the enforcement of a mechanic's lien, and whose mortgage is subordinated to the mechanic's lien, may contest, on appeal, the existence and regularity of the mechanic's lien, although the owner and mortgagor, by failing to appeal, has waived any right to complain, so far as he is concerned. Ragon v. Howard, 97 Tenn. 334, 37 S.W. 136, 1896 Tenn. LEXIS 148 (1896).

6. Loss of Priority over Subsequent Mortgagee.

A furnisher taking machinery in payment, loses his priority over a mortgagee thereafter advancing money, even though the title to the machinery fails, and it is replevined by its legal owner. Garrett v. Adams, 39 S.W. 730, 1897 Tenn. Ch. App. LEXIS 6 (Tenn. Ch. App. Mar. 1, 1897).

7. Amount of Advance under Prior Mortgage Immaterial.

In determining the priority of lien of a party lending money under a deed of trust and that of materialmen, it was wholly immaterial whether the party lending the money had advanced the entire amount at the time the material was furnished, if the obligation to advance the money existed. Kingsport Brick Corp. v. Bostwick, 145 Tenn. 19, 235 S.W. 70, 1921 Tenn. LEXIS 69 (1921).

8. Attorney's Lien.

The lien is paramount to attorney's lien for fees, where the owner of land, after the lien had attached thereto, made a general assignment of all his property for the benefit of his creditors, and thereafter a bill was filed by the assignee, for the purpose of selling the property and adjusting liens and claims of creditors, and contesting the lienor's claim, which the lienor, through his own counsel, successfully asserted over the assignee's resistance. Steger v. Arctic Refrigerating Co., 89 Tenn. 453, 14 S.W. 1087, 1890 Tenn. LEXIS 70, 11 L.R.A. 580 (Tenn. Dec. 1890).

9. Federal Law.

Where there was a question of whether a materialmen's claim took priority over a recorded deed of trust, the federal “first in time, first in right” rule was applied rather than the state statute. Adamsville Lumber Co. v. Rainey, 348 F. Supp. 373, 1972 U.S. Dist. LEXIS 14156 (W.D. Tenn. 1972).

Collateral References.

Constitutionality of statute giving to lien for alteration of property pursuant to public requirement or to mechanics' lien preference over preexisting mortgage or other lien. 121 A.L.R. 616.

Future advances, priority as between mortgage for, and mechanics' liens. 80 A.L.R.2d 179.

Priority as between mechanic's lien and mortgage not providing for future advances executed before effective date of mechanic's lien, as affected by fact that proceeds of the mortgage were paid, in whole or in part, after that date. 80 A.L.R.2d 179.

Purchase money mortgage and mechanics' lien, priority as between. 72 A.L.R. 1516, 73 A.L.R.2d 1407.

66-11-109. Priority for other liens not created by this chapter.

Section 66-11-108 shall also apply to any other person claiming a lien not created by this chapter.

Code 1858, § 1983 (deriv. Acts 1857-1858, ch. 24, § 2); Shan., § 3537; Code 1932, § 7925; T.C.A. (orig. ed.), § 64-1109; Acts 2007, ch. 189, § 9.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 18, 19.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

NOTES TO DECISIONS

1. Furnisher to Vendee with Title Bond.

Where a mechanic furnishes materials under a contract made with the owner who has only a bond for title from his vendor upon payment of the purchase money still unpaid, such mechanic is only entitled to enforce his lien against the vendee's equity, unless the vendor has waived his lien by acts and declarations. Gillespie v. Bradford, 15 Tenn. 167, 15 Tenn. 168, 1834 Tenn. LEXIS 33, 27 Am. Dec. 494 (1834); Rhea v. Allison, 40 Tenn. 176, 1859 Tenn. LEXIS 48 (1859); Prichard Bros. v. Causey, 158 Tenn. 53, 12 S.W.2d 711, 1928 Tenn. LEXIS 123 (1929).

2. Vendor's Agreement to Subordination of His Lien.

The fact that a vendor agrees with a vendee that his lien or mortgage for the purchase money may be subordinated to one for money borrowed to improve the property does not effect a subordination to mechanics' liens. Prichard Bros. v. Causey, 158 Tenn. 53, 12 S.W.2d 711, 1928 Tenn. LEXIS 123 (1929).

3. Improvements by Vendee under Contract with Vendor.

The mechanic's lien is superior to the vendor's lien, where, as an inducement to the sale and conveyance of the land, the vendor stipulated that certain buildings and improvements should be erected thereon by the vendee, according to certain plans and specifications, and at a fixed minimum price, and agreed to advance and lend a certain sum to the vendee for this purpose, the last instalment of which was not to be paid until the land was cleared of all liens other than the vendor's lien, and where the mechanic's lien was created in making the stipulated improvements. Lee v. Gibson, 104 Tenn. 698, 58 S.W. 330, 1900 Tenn. LEXIS 45 (1900).

4. Unrecorded Contracts and Conveyances.

Where unrecorded contract for sale of land was executed while record title was in vendor's grantor and provided that purchaser was to construct building thereon, that balance due was to be secured by vendor's lien and that there was to be no liability on part of vendor for material and labor furnished and where vendor was on property during construction but did not inform furnishers or workmen of his rights under the contract, furnishers and workmen were entitled to lien against vendor superior to vendor's lien where vendee disappeared after construction of building without paying any of the parties involved and vendor thereafter recorded deed of his grantor and took possession. Rowland v. Lowe, 46 Tenn. App. 60, 326 S.W.2d 681, 1959 Tenn. App. LEXIS 88 (1959).

Collateral References.

Fixtures, rights of seller of, retaining title thereto or a lien thereon, as against holder of mechanic's lien. 13 A.L.R. 448, 73 A.L.R. 748, 88 A.L.R. 1318, 111 A.L.R. 362, 141 A.L.R. 1283.

Priority of vendor's lien under executory contract for sale of realty, over mechanic's lien for labor or materials furnished purchaser. 58 A.L.R. 947, 102 A.L.R. 233.

66-11-110. Effect of judgment lien.

A judgment lien of record shall not defeat a lien provided by this chapter, if the lien provided by this chapter is fixed on the real property in good faith and without collusion.

Code 1932, § 7942; T.C.A. (orig. ed.), § 64-1110; Acts 2007, ch. 189, § 10.

Cross-References. Judgment lien, title 25, ch. 5.

66-11-111. Authentication and registration of lien.

Where the lienor's contract is in writing, and has been acknowledged, or in lieu of acknowledgment is sworn to by the prime contractor as to its execution by the owner, it may be recorded in the lien book in the register of deeds of the county where the real property, or any part of the affected real property, lies. Subsequent purchasers or encumbrancers for value shall be deemed to have notice of the lien so long as the recorded contract sets forth the contract price and describes the real property with reasonable certainty.

Code 1932, § 7918; T.C.A. (orig. ed.), § 64-1111; Acts 2007, ch. 189, § 11.

Cross-References. Notice to owner of property, §§ 66-11-115, 66-11-203.

Protection from unregistered lien, § 66-11-143.

Registration fee, § 8-21-1001.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

66-11-112. Preservation of priority of lien for subsequent purchasers or encumbrancers — Abandonment — Lien on structure with water furnished by well — Form for notice of lien.

  1. In order to preserve the priority of the lien provided by this chapter as of the date of its attachment, as concerns subsequent purchasers or encumbrancers for a valuable consideration without notice of the lien, though not as concerns the owner, the lienor, who has not recorded the lienor's contract pursuant to § 66-11-111, is required to record in the office of the register of deeds of the county where the real property, or any part affected, lies, a sworn statement of the amount for, and a reasonably certain description of the real property on, which the lien is claimed. The recording party shall pay filing fees, and shall be provided a receipt for the filing fees, which amount shall be part of the lien amount. Recordation is required to be done no later than ninety (90) days after the date the improvement is complete or is abandoned, prior to which time the lien shall be effective as against the purchasers or encumbrancers without the recordation. The owner shall serve thirty (30) days' notice on prime contractors and on all of those lienors who have served notice in accordance with § 66-11-145 prior to the owner's transfer of any interest to a subsequent purchaser or encumbrancer for a valuable consideration. If the sworn statement is not recorded within that time, the lien's priority as to subsequent purchasers or encumbrancers shall be determined as if it attached as of the time the sworn statement is recorded.
  2. A building, structure or improvement shall be deemed to have been abandoned for purposes of this chapter when there is a cessation of operation for a period of ninety (90) days and an intent on the part of the owner or prime contractor to cease operations permanently, or at least for an indefinite period.
  3. Any other provision to the contrary notwithstanding, any lien acquired under contract executed on or after April 17, 1972, by virtue of § 66-11-141, may be filed within ninety (90) days after completion of the structure that is, or is intended to be, furnished water by virtue of drilling a well.
  4. The statement provided for in subsection (a) may be in substantially the following form:

    NOTICE OF LIEN State of  County of   being first duly sworn, says that  , the Lien Claimant, furnished certain material or performed certain work or labor in furtherance of improvements to the real property hereinafter described, in pursuance of a certain contract, with  , [the owner, prime contractor, remote contractor, or other person, as the case may be]. The first of the work or labor was performed or the first of the material, services, equipment, or machinery was furnished on the   day of  ,   (year). The last of the work or labor was performed or the last of the material, services, equipment, or machinery was furnished on the   day of  ,   (year), and there is justly and truly due Lien Claimant therefor from  , [the owner, prime contractor, remote contractor, or other person, as the case may be] over and above all legal setoffs, the sum of   dollars, for which amount Lien Claimant claims a lien under T.C.A. §§ 66-11-101, et seq. on the real property, of which   is or was the owner, which is described as follows: Lienor [Notary Acknowledgment]

    Click to view form.

Code 1932, § 7919; Acts 1972, ch. 747, §§ 1, 3; 1977, ch. 373, § 1; T.C.A. (orig. ed.), § 64-1112; Acts 1990, ch. 854, § 3; 2007, ch. 189, § 12.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Bankruptcy, § 8; 18 Tenn. Juris., Mechanics' Liens, §§ 14, 15, 18.

Law Reviews.

Creditors' Rights and Security Transactions — 1954 Tennessee Survey, 7 Vand. L. Rev. 799.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 193 (1979).

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).

NOTES TO DECISIONS

1. Construction.

Statutory provisions relating to materialmen are mandatory and a lien filed after period allowed thereby is void. Southern Blow Pipe & Roofing Co. v. Grubb, 36 Tenn. App. 641, 260 S.W.2d 191, 1953 Tenn. App. LEXIS 146 (1953).

This section makes a distinction between what is required of a furnisher as to subsequent purchasers or encumbrancers on the one hand and as to the owner of the premises on the other hand, and registration is required as to subsequent purchasers or encumbrancers but not as to owners. First State Bank v. Stacey, 37 Tenn. App. 223, 261 S.W.2d 245, 1952 Tenn. App. LEXIS 74 (1952), cert. denied, 195 Tenn. 386, 259 S.W.2d 863, 1953 Tenn. LEXIS 352 (1953), cert. denied, First State Bank v. Stacey, 195 Tenn. 386, 259 S.W.2d 863, 1953 Tenn. LEXIS 352 (1953); Streuli v. Brooks, 203 Tenn. 373, 313 S.W.2d 262, 1958 Tenn. LEXIS 313 (Tenn. Apr. 9, 1958).

A materialman's lien is statutory and, consequently, the requirements relating to its perfection are mandatory. Tindell Home Center, Inc. v. Union Peoples Bank, 543 S.W.2d 843, 1976 Tenn. LEXIS 483 (Tenn. 1976).

The phrase “demolished, altered or completed” does not include abandonment of a project. Concrete Supply Co. v. Union Peoples Bank, 540 S.W.2d 250, 1976 Tenn. App. LEXIS 240 (Tenn. Ct. App. 1976).

T.C.A. § 66-11-112 should not be interpreted to mean “99.5% completion” or “substantial completion,” for lienors would have no accurate standard by which to set the beginning of the 90-day period. Davis v. Smith, 650 S.W.2d 47, 1983 Tenn. App. LEXIS 557 (Tenn. Ct. App. 1983).

The occupation of part of a building is not conclusive of the completion of all of the building. Davis v. Smith, 650 S.W.2d 47, 1983 Tenn. App. LEXIS 557 (Tenn. Ct. App. 1983).

Although the language of T.C.A. § 66-11-112 is not entirely clear, Tennessee courts have construed this provision as providing the lienholder two different ninety-day periods in which to file a lien notice: the ninety days after the contract expires and the ninety days after the building is completed; where lienholder did not file its notice within either of these two ninety-day periods but rather during the space of time between the two ninety-day periods, the filing of the lawsuit by lienholder did not preserve its lien as to intervening encumbrances. Durkan Patterned Carpet, Inc. v. Premier Hotel Dev. Group (In re Premier Hotel Dev. Group), 270 B.R. 234, 2001 Bankr. LEXIS 1576 (Bankr. E.D. Tenn. 2001).

2. Form of Statement.

Neither T.C.A. § 66-11-112 nor T.C.A. § 66-11-117 prescribes the form of the sworn statement that must either accompany or be included in the notice of lien. D.T. McCall & Sons v. Seagraves, 796 S.W.2d 457, 1990 Tenn. App. LEXIS 367 (Tenn. Ct. App. 1990).

Where notice contained the proper information and indicated that an appropriate representative of the partnership had “sworn to and subscribed” the statement before a notary public, there was substantial compliance with the general assembly's intention, and notice of lien met the statutory verification and registration requirements. D.T. McCall & Sons v. Seagraves, 796 S.W.2d 457, 1990 Tenn. App. LEXIS 367 (Tenn. Ct. App. 1990).

3. Time of Filing.

If house is not completed materialman or furnisher is required to file lien within 90 days of termination of contract. First State Bank v. Stacey, 37 Tenn. App. 223, 261 S.W.2d 245, 1952 Tenn. App. LEXIS 74 (1952), cert. denied, 195 Tenn. 386, 259 S.W.2d 863, 1953 Tenn. LEXIS 352 (1953), cert. denied, First State Bank v. Stacey, 195 Tenn. 386, 259 S.W.2d 863, 1953 Tenn. LEXIS 352 (1953).

Where the owner/builder does not complete the improvements but abandons them, the materialman must file his notice of lien within 90 days from the completion or termination of his contract for it to be effective against subsequent bona fide purchasers or encumbrancers. Tindell Home Center, Inc. v. Union Peoples Bank, 543 S.W.2d 843, 1976 Tenn. LEXIS 483 (Tenn. 1976).

“Abandonment” is not included in the phrase “demolished, altered and/or completed” and therefore a materialman's lien must be filed within 90 days of delivery of last materials. Concrete Supply Co. v. Union Peoples Bank, 540 S.W.2d 250, 1976 Tenn. App. LEXIS 240 (Tenn. Ct. App. 1976).

A materialman's lien filed subsequent to deeds of trust given to a construction lender and within 90 days of the owner's subsequent abandonment of the project but more than 90 days from the materialman's last delivery of materials is not entitled to priority over the mortgagee lender's liens. Concrete Supply Co. v. Union Peoples Bank, 540 S.W.2d 250, 1976 Tenn. App. LEXIS 240 (Tenn. Ct. App. 1976).

A lienor may preserve the priority of a contractor's lien as to subsequent purchasers or encumbrancers within the meaning of T.C.A. § 66-11-112(a) by filing suit within 90 days of when work is completed. Don Huckaby Plumbing Co. v. Cardinal Industries Mortg. Co., 848 S.W.2d 57, 1993 Tenn. LEXIS 14 (Tenn. 1993), rehearing denied, 848 S.W.2d 57, 1993 Tenn. LEXIS 101 (Tenn. 1993).

4. Acknowledgment of Statement — Necessity.

The sworn statement, to affect the rights of a holder of a deed of trust must be acknowledged as required by §§ 66-22-101 and 66-22-108. Chattanooga Lumber & Coal Corp. v. Phillips, 202 Tenn. 266, 304 S.W.2d 82, 1957 Tenn. LEXIS 388 (1957).

In order to register notice of a lien so as to give lienholder priority over subsequent purchasers or encumbrancers for value, such lienholder must not only acknowledge his notice of lien, but must in addition verify the notice by sworn statement. Pulaski Lumber Co. v. Harpeth South, Inc., 501 S.W.2d 275, 1973 Tenn. LEXIS 533 (Tenn. 1973).

5. Lien Relates to Date of Visible Commencement of Work.

A mechanic's lien relates back to the date of the visible commencement of the work. Brown v. Brown & Co., 25 Tenn. App. 509, 160 S.W.2d 431, 1941 Tenn. App. LEXIS 137 (1941).

6. Work Done After Recordation of Deed of Trust.

A claim for work done under a separate contract with the owner of the property constitutes a lien though it is secondary to the lien of a deed of trust where the work was done after the recordation of the deed of trust. Brown v. Brown & Co., 25 Tenn. App. 509, 160 S.W.2d 431, 1941 Tenn. App. LEXIS 137 (1941).

7. Priorities Where Claim Filed After Period.

The priority of the mechanic's lien is dependent upon compliance by the lien claimant with the statutory requirements relating to the perfection and preservation of his lien, and that his priority may be lost and the lien of subsequent encumbrancers acquire superiority if the lien claimant fails to give notice to the owner or file a claim within the time prescribed by statute. Brown v. Brown & Co., 25 Tenn. App. 509, 160 S.W.2d 431, 1941 Tenn. App. LEXIS 137 (1941).

The lien of a deed of trust, acquired and perfected during the period within which the mechanic could have perfected his lien, is superior to the mechanic's lien filed after the lapse of ninety days. Brown v. Brown & Co., 25 Tenn. App. 509, 160 S.W.2d 431, 1941 Tenn. App. LEXIS 137 (1941).

The burden of proof rests upon the mechanic who did not perfect his lien during the 90-day period to show notice on the part of a purchaser who acquires title during the 90-day period. Brown v. Brown & Co., 25 Tenn. App. 509, 160 S.W.2d 431, 1941 Tenn. App. LEXIS 137 (1941).

8. Subsequent Purchasers.

Trustee in bankruptcy is a subsequent purchaser. In re Just for Fun of It, Inc., 7 B.R. 166, 1980 Bankr. LEXIS 4487 (Bankr. E.D. Tenn. 1980).

The lien of a supplier of materials for a new house, filed within 90 days after completion, was not extinguished by a conveyance of the property to purchasers before notice of the lien was filed, since the purchasers did not avail themselves of the provision for protection from unregistered liens. Owen Lumber & Millwork, Inc. v. National Equity Corp., 940 S.W.2d 66, 1996 Tenn. App. LEXIS 486 (Tenn. Ct. App. 1996).

Collateral References.

Sufficiency of designation of owner in notice, claim, or statement of mechanic's lien. 48 A.L.R.3d 153.

66-11-113. Materials exempt from attachment, execution or other process to enforce debt.

Whenever materials have been furnished to improve real property and delivered to the real property by or for a lienor, and payment for the materials has not been made by the owner of the real property, the materials shall not be subject to attachment, execution, or other legal process to enforce any debt due by the purchaser of the materials, except a debt due for the purchase price of the materials, so long as in good faith the materials are about to be applied to improve the real property; but if the owner has made payment for materials furnished, the materials shall not be subject to attachment, execution, or other process to enforce any debt, including the debt due for the purchase price for the materials.

Code 1932, § 7923; T.C.A. (orig. ed.), § 64-1113; Acts 2007, ch. 189, § 13.

66-11-114. Repossession and removal of materials.

  1. If for any reason an improvement is abandoned before completion or, though completed, materials delivered are not used for the improvement, a person who furnished materials for the improvement that have not been incorporated in the improvement, and for which the person has not received payment, may repossess and remove the materials; and thereupon the person shall not be entitled to any lien on the real property or improvements for the price of the materials, but shall have the same rights in regard to the materials as if the person had never parted with the possession.
    1. The right to repossess and remove the materials shall not be affected by their sale, encumbrance, attachment or transfer from the site of the improvement subsequent to delivery to the site, except that the right to repossess shall not be effective as against a purchaser or encumbrancer of the materials in good faith whose interest in the materials arose since removal from the site of the improvement, or as against a creditor attaching after the removal.
    2. The right of repossession and removal given by this section shall extend only to materials whose purchase price does not exceed the amount remaining due to the person repossessing; but where materials have been partly paid for, the person delivering them may repossess them as allowed in this section on refunding the part of the purchase price that has been paid.

Code 1932, § 7922; T.C.A. (orig. ed.), § 64-1114; Acts 2007, ch. 189, § 14.

66-11-115. Liens by remote contractors.

  1. Every remote contractor shall have the lien provided by this part for work or labor performed or materials, services, equipment, or machinery furnished by the remote contractor in furtherance of the improvement; provided, that the remote contractor:
    1. Satisfies all of the requirements set forth in § 66-11-145, if applicable; and
    2. Within the time provided for recording sworn statements set out in § 66-11-112(a), serves a notice of lien, in writing, on the owner of the property on which the improvement is being made.
  2. The lien shall continue for the period of ninety (90) days from the date of service of notice in favor of the remote contractor, and until the final termination of any suit for its enforcement properly brought pursuant to § 66-11-126 within that period.
  3. The notice of lien may be in substantially the form provided in § 66-11-112(d).

Code 1858, § 1986 (deriv. Acts 1845-1846, ch. 118, § 2); Acts 1881, ch. 67, § 2; 1889, ch. 103, § 1; Shan., § 3540; Acts 1927, ch. 35, §§ 1, 2; mod. Code 1932, § 7927; T.C.A. (orig. ed.), § 64-1115; Acts 1990, ch. 854, § 4; 2007, ch. 189, § 15.

Cross-References. Notice to owner of property, § 66-11-203.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-705.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 2, 3, 5, 7, 10, 12-18, 23; 24 Tenn. Juris., Vendor and Purchaser, § 65.

Law Reviews.

Mechanics' and Materialmen's Liens, 45 Tenn. L. Rev. 741 (1978).

NOTES TO DECISIONS

1. Constitutionality.

There is no valid objection, upon constitutional grounds, to the provision of this section giving a mechanic's lien upon land in favor of subcontractors, as journeymen, laborers, and furnishers of material to the original contractor, to be used in making improvements upon such land under contract between him and the owner, for the owner contracts with reference to the law which gives the lien for work and materials furnished to his contractor by journeymen and others. Cole Mfg. Co. v. Falls, 90 Tenn. 466, 16 S.W. 1045, 1891 Tenn. LEXIS 30 (1891); Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Ruston v. Perry Lumber Co., 104 Tenn. 538, 58 S.W. 268, 1900 Tenn. LEXIS 27 (1900).

This section authorizing mechanics' liens and § 66-11-126 permitting attachments to enforce such liens meet federal and state due process requirements both because the landowner does not suffer a sufficiently significant deprivation of property rights by reason of a pre-judgment lien notice and attachment and because there are adequate procedural safeguards. Silverman v. Gossett, 553 S.W.2d 581, 1977 Tenn. LEXIS 585 (Tenn. 1977).

2. Construction.

This section should be construed in connection with the rest of this part dealing with original contracts. Richardson v. Lanius, 150 Tenn. 133, 263 S.W. 799, 1923 Tenn. LEXIS 70 (1923).

A uniform construction and application of the mechanic's lien statutes and § 12-4-201 providing for the protection of furnishers of materials in the construction of public works is desirable and given when possible. Nicks v. W. C. Baird & Co., 165 Tenn. 89, 52 S.W.2d 147, 1931 Tenn. LEXIS 175 (1932).

3. Nature of Lien.

This lien is purely statutory, being unknown to the common law. Carolina Portland Cement Co. v. Hitt Lumber & Box Co., 141 Tenn. 210, 208 S.W. 336, 1918 Tenn. LEXIS 82 (1918).

4. Retroactive Application of Amendment.

Retroactive application of notice of nonpayment provisions, enacted in an amendment to T.C.A. § 66-11-115 and § 66-11-145, to a materialman who already had a vested right to a materialman's lien for goods under T.C.A. § 66-11-115, and retroactive application of which effectively abolished that right, was not procedural and was impermissible. Standard Pipe & Supply, Inc. v. First City Serv. Corp., 833 S.W.2d 510, 1992 Tenn. App. LEXIS 195 (Tenn. Ct. App. 1992), appeal denied, Standard Pipe & Supply, Inc. v. First City Service Corp., 1992 Tenn. LEXIS 384 (Tenn. May 26, 1992).

5. “Originally Contracted” — Meaning.

The words “originally contracted” refer to the person who originally contracted with the owner to do the work, as set forth in § 66-11-102. Cole Mfg. Co. v. Falls, 90 Tenn. 466, 16 S.W. 1045, 1891 Tenn. LEXIS 30 (1891).

6. Strict Compliance — Necessity.

A subcontractor's lien exists from the date of the visible commencement of the work, however, to set up the lien against the owner a strict compliance with the statute as to notice, registration, and timely institution of suit is necessary. Hamilton Nat'l Bank v. Long, 189 Tenn. 562, 226 S.W.2d 293, 1949 Tenn. LEXIS 459 (1949); Brumit v. Graybeal Glass Co., 609 S.W.2d 521, 1980 Tenn. App. LEXIS 344 (Tenn. Ct. App. 1980).

7. Necessity for Action on Claim.

In the absence of fraud or collusion, sound policy would counsel against requiring the lien claimant to institute, and the owner to defend, an action on a claim which the owner admits and is willing to pay. Hamilton Nat'l Bank v. Long, 189 Tenn. 562, 226 S.W.2d 293, 1949 Tenn. LEXIS 459 (1949).

Because real property against which a creditor filed a notice of lien was not property of the debtor's estate or of debtor, and because a lawsuit that creditor sought to file in state court to perfect and preserve its lien against real property was not in pursuit of a claim against debtor but rather, was a claim against property in which debtor had no interest, then the automatic stay did not apply. In re Bluff City Sheet Metal, — B.R. —, 2016 Bankr. LEXIS 3119 (Bankr. W.D. Tenn. Aug. 15, 2016).

8. Persons Constituting Lienors — Extent of Lien.

An architect has no mechanic's lien for the value of services rendered by him under contract with the owner for drawing plans, making estimates, soliciting bids for the buildings, and supervising or superintending their erection. Thompson v. Baxter, 92 Tenn. 305, 21 S.W. 668, 1892 Tenn. LEXIS 77, 36 Am. St. Rep. 85 (1892).

Laborers regularly employed to make brick for their employer were not entitled to lien on the house or houses for which their employer furnished and delivered the brick. Haynes v. Holland, 48 S.W. 400, 1898 Tenn. Ch. App. LEXIS 100 (Tenn. Ch. App. 1898).

One superintending the work of laborers is not a lienor, but it is not indicated that a laborer is to be denied a lien because he incidentally supervises other laborers. Harris v. Marable, 138 Tenn. 676, 200 S.W. 824, 1917 Tenn. LEXIS 76 (1917).

Under this section before its amendment in 1927, and other sections, it was held that, where the owner of a lot ordered material from a materialman, who in turn ordered it from another materialman, the latter materialman had no lien for the material so furnished and used, because he had no special contract with the owner or his agent, and was not a person protected, the statute at that time giving a lien to one employed by “mechanic, founder, or machinist” to furnish labor or materials. Carolina Portland Cement Co. v. Hitt Lumber & Box Co., 141 Tenn. 210, 208 S.W. 336, 1918 Tenn. LEXIS 82 (1918).

A timekeeper has no lienable claim. Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

Profits and commissions ordinarily are not lienable items unless included in the contract price, also in the reasonable worth of the labor or materials furnished, no lien may be allowed for profits or commissions not earned. Hamilton Nat'l Bank v. Long, 189 Tenn. 562, 226 S.W.2d 293, 1949 Tenn. LEXIS 459 (1949).

A furnisher has a lien on real property for the value of materials furnished provided he complies with the provisions of this section. Fussell v. Vowell & Sons, 60 Tenn. App. 397, 447 S.W.2d 113, 1969 Tenn. App. LEXIS 321 (1969).

Materials are not “furnished” and the contract of the materialman does not expire for the purpose of T.C.A. § 66-11-115(b) until the materials are delivered to the job site, regardless of when the transfer of title from the materialman to the contractor or subcontractor occurs. Andrews Distrib. Co. v. Oak Square at Gatlinburg, 757 S.W.2d 663, 1988 Tenn. LEXIS 274 (Tenn. 1988), overruled in part, Spence v. Allstate Ins. Co., 883 S.W.2d 586, 1994 Tenn. LEXIS 251 (Tenn. 1994).

In materialmen's liens, materials are not furnished until the materials are actually delivered to the job site, no matter when the transfer of the title to the goods occurs. “Furnished,” as used in the labor and material payment bond, also refers to the date that the goods are actually delivered to the job site. Andrews Distrib. Co. v. Oak Square at Gatlinburg, 757 S.W.2d 663, 1988 Tenn. LEXIS 274 (Tenn. 1988), overruled in part, Spence v. Allstate Ins. Co., 883 S.W.2d 586, 1994 Tenn. LEXIS 251 (Tenn. 1994).

9. Reliance on Lien — Necessity.

The furnisher of materials to a contractor to be used in building a certain house, and so used, is entitled to a statutory lien upon the property so improved, for the value of the materials, although the furnisher relied for payment of his claim upon the personal responsibility of the contractor, and not upon any lien upon the property. Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); Christie v. Williamsom, 4 Tenn. Civ. App. 161 (1914).

10. Contract to Do Work — Necessity.

The liens of subcontractors, workmen, and furnishers of the original contractor exist against the improved property without contract with the owner, but there must be a contract with the owner's contractor, if there is none with the owner, that the material furnished is to be used in erecting the particular building, or in repairing or improving the property against which the lien is sought to be enforced, in order to create the furnisher's lien. Reeves v. Henderson, 90 Tenn. 521, 18 S.W. 242, 1891 Tenn. LEXIS 35 (1891); Bedford Stone Co. v. Board of Publication, 91 Tenn. 200, 18 S.W. 406, 1891 Tenn. LEXIS 94 (1891); Mills v. Terry Mfg. Co., 91 Tenn. 469, 19 S.W. 328, 1892 Tenn. LEXIS 16 (1892); Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); Christie v. Williamsom, 4 Tenn. Civ. App. 161 (1914); Pidgeon-Thomas Iron Co. v. McKnight, 8 Tenn. Civ. App. 1 (1918).

11. Owner's Agreement with Original Contractor.

This statute does not prevent the owner from contracting for the erection of improvements on his land, upon any terms that may be agreed upon between him and his contractor, except that contracts for payment wholly in cash, or within the time allowed subcontractors to perfect and enforce their liens, are noneffective as against the liens of subcontractors. The owner's contract for payment to his contractor upon such conditions, and at such times extending beyond the period for the acquisition and enforcement of the liens of subcontractors, as may be agreed upon and stipulated, cannot be rendered ineffective at the suit of subcontractors. McCrary Bros. v. Bristol Bank & Trust Co., 97 Tenn. 469, 37 S.W. 543, 1896 Tenn. LEXIS 168 (1896).

Where materialmen dealt with the “owner,” there was no requirement of giving notice under T.C.A. § 66-11-115. In re Just for Fun of It, Inc., 7 B.R. 166, 1980 Bankr. LEXIS 4487 (Bankr. E.D. Tenn. 1980).

When the lien dispute is limited to between the owner and the supplier, written notice alone to the owner is sufficient to perfect the lien as between those two parties. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

12. Purchaser under Executory Contract as Owner.

The purchaser is not the agent or contractor of his vendor, but the “owner” of the property where he is allowed by the vendor to take possession of a lot and treat it as his own under an executory contract of sale and purchase, which leaves the legal title in the vendor to secure the unpaid purchase money, but which contemplates that the purchaser shall erect a building thereon, and, after clearing the property of all liens of mechanics and furnishers, shall receive an advance or loan from the vendor upon a mortgage to be executed on the property. Ragon v. Howard, 97 Tenn. 334, 37 S.W. 136, 1896 Tenn. LEXIS 148 (1896); Lee v. Gibson, 104 Tenn. 698, 58 S.W. 330, 1900 Tenn. LEXIS 45 (1900).

13. Purchaser Pending Improvement — Status.

The purchaser of property during the progress of work thereon takes the property subject to the liens for the full amount due to subcontractors and furnishers upon completion of their contracts, although he purchased without actual notice of such claims, and before they had been perfected as liens by notice and registration, where the liens are subsequently, and within the time prescribed by the statute, perfected by notice and registration as therein prescribed. Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893).

A purchaser by recorded deed of property undergoing improvement is, with respect to subsequently and separately furnished items of material, entitled to notice. Pidgeon-Thomas Iron Co. v. McKnight, 8 Tenn. Civ. App. 1 (1918).

14. Public Property.

There is no lien on property for materials furnished in cases where public improvements are made on land owned by a county nor is there any liability on the part of the county to the party who furnished such materials to the contractor. Air Temperature, Inc. v. Morris, 63 Tenn. App. 90, 469 S.W.2d 495, 1970 Tenn. App. LEXIS 313 (Tenn. Ct. App. 1970).

15. Contractor and Subcontractor — Basis and Status of Respective Liens.

The liens of the subcontractors, furnishers, and workmen of the owner's contractor depend upon the statute, and are not derived from the right of the contractor, nor are they dependent upon the existence or nonexistence of the contractor's lien, nor are they subject, to any extent, to his power or control, and the estoppel of the contractor to assert his mechanic's lien against the property is not operative against the rights or liens of the subcontractors, furnishers, and workmen of the original contractor. Reeves v. Henderson, 90 Tenn. 521, 18 S.W. 242, 1891 Tenn. LEXIS 35 (1891); Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); Hanks & McGuire v. Barron Bros., 95 Tenn. 275, 32 S.W. 195, 1895 Tenn. LEXIS 84 (1895).

The contractor comes into a lien by reason of a special contract with the owner, the subcontractors and materialmen come in by reason of his contract relation to the contractor, and his claim is pro tanto substitutionary to that of the latter, by a species of subrogation. Phillip Carey Co. v. Harrison, 138 Tenn. 697, 200 S.W. 829, 1917 Tenn. LEXIS 79 (1917).

16. Payment to Contractor — Effect on Subcontractor.

The lien in favor of the subcontractors, furnishers, and workmen of the original contractor is not defeated, if the notice is given within the prescribed time, although payment in full may have been made by the owner to the original contractor before notice. Reeves v. Henderson, 90 Tenn. 521, 18 S.W. 242, 1891 Tenn. LEXIS 35 (1891); Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

17. Accruing of Subcontractor's Lien.

Where the lien is perfected by notice within the prescribed time, it relates back to the time of its beginning, so as to prevent its impairment by the owner's sale or encumbrance of the improved property, or by levies of execution or attachment thereon at the instance of the creditors of the owner, after the lien commenced and before notice of suit. Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Ruston v. Perry Lumber Co., 104 Tenn. 538, 58 S.W. 268, 1900 Tenn. LEXIS 27 (1900).

The liens of the subcontractors, furnishers, and workmen of the owner's contractor begin when the work or delivery of the materials begins. The effect of the statute embraced in the above section is not to postpone the beginning of the lien, but to postpone the time when the notice may be given of the intent to claim or rely upon the lien. Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Hanks & McGuire v. Barron Bros., 95 Tenn. 275, 32 S.W. 195, 1895 Tenn. LEXIS 84 (1895); Bristol-Goodson Elec. Light & Power Co. v. Bristol Gas, Elec. Light & Power Co., 99 Tenn. 371, 42 S.W. 19, 1897 Tenn. LEXIS 42 (1897); Rawlings v. New Memphis Gaslight Co., 105 Tenn. 268, 60 S.W. 206, 1900 Tenn. LEXIS 76, 80 Am. St. Rep. 880 (1900).

18. Subcontractor — Priority of Lien.

Persons working for the contractor or furnishing him materials under contract with him are entitled to the lien in preference to him, provided written notice is given to the owner. Greenwood v. Tennessee Mfg. Co., 32 Tenn. 130, 1852 Tenn. LEXIS 33 (1852); Brown v. Crump's Adm'r, 32 Tenn. 531, 1852 Tenn. LEXIS 110 (1852); McLeod v. Capell, 66 Tenn. 196, 1874 Tenn. LEXIS 105 (1874).

The lien of a subcontractor is superior where the contest is between a creditor of the contractor, who can succeed only to the rights of the contractor, and the subcontractor had a valid, subsisting lien when a garnishment notice was served by the creditor. Hamilton Nat'l Bank v. Long, 189 Tenn. 562, 226 S.W.2d 293, 1949 Tenn. LEXIS 459 (1949).

19. Subcontractor's Lien on Garnishee's Property.

Where a subcontractor's lien has attached to a garnishee's property, the garnishee has a right to pay these outstanding claims for labor and materials out of the garnished fund due the debtor contractor. Hamilton Nat'l Bank v. Long, 189 Tenn. 562, 226 S.W.2d 293, 1949 Tenn. LEXIS 459 (1949).

20. Subcontractor Performing Before Payment Due Contractor.

A subcontractor who has performed his contract cannot enforce his lien for the balance due him, by sale of the property before the completion or acceptance of the building erected thereon, when by the terms of their contract the balance due to the contractor from the owner is not payable until the completion and acceptance of the building, but he can recover against the contractor a decree for his debt, and have a declaration of his lien against the property, to be thereafter enforced, by proper proceedings, when the building has been completed and accepted, or reasonable time for its completion shall have elapsed. McCrary Bros. v. Bristol Bank & Trust Co., 97 Tenn. 469, 37 S.W. 543, 1896 Tenn. LEXIS 168 (1896).

21. Application of Payment to Other Debts.

Subcontractor was not entitled to lien where owner paid contractor, and contractor in turn paid subcontractor with directions to apply the payment on the job done for such owner, and the subcontractor at first so credited the payment, but later removed such credit and applied the payment to other indebtedness owing by contractor to subcontractor. Weaver v. Ogle, 2 Tenn. App. 563, 1926 Tenn. App. LEXIS 57 (1926).

22. Trivial Acts After Completion or Abandonment — Effect.

Subsequent trivial repairs, made after the completion of the building, such as stopping a leak in the roof, will not arrest the running of the statute of limitation. Dunn v. McKee, 37 Tenn. 657, 1858 Tenn. LEXIS 89 (1858); Luter & Daniel v. Cobb, 41 Tenn. 525, 1860 Tenn. LEXIS 100 (1860).

The doing of a trifling amount of work on the building something like two years after the building was practically completed and work was stopped, and by way of afterthought, cannot avail to extend the time for notice and enforcement. Wood v. Haney, 41 S.W. 1072, 1897 Tenn. Ch. App. LEXIS 22 (Tenn. Ch. App. 1897).

A lien cannot be revived or affected by the doing of an insignificant act not originally contemplated. Wood v. Haney, 41 S.W. 1072, 1897 Tenn. Ch. App. LEXIS 22 (Tenn. Ch. App. 1897); East Lake Lumber Box Co. v. Simpson, 5 Tenn. App. 51, 1927 Tenn. App. LEXIS 34 (1927).

Mere trivial imperfections, requiring corrective adjustments do not prevent a construction project from being substantially complete for lien purposes, and the correction of such imperfections is not a furnishing of labor or materials for which a charge may be made or a lien claimed. Cooper v. Hunter, 569 S.W.2d 852, 1978 Tenn. App. LEXIS 298 (Tenn. Ct. App. 1978).

Minor imperfections disclosed by the inspection of a public inspector will not toll the running of time for perfecting a lien, especially when the owner had no knowledge of the alleged imperfections and did not demand their correction. Cooper v. Hunter, 569 S.W.2d 852, 1978 Tenn. App. LEXIS 298 (Tenn. Ct. App. 1978).

23. Attempt to Revive Lien.

There is no statutory authority for reviving a lien upon the filing of another notice of completion. Post-Tensioned Sys. v. Collins & Hobbs, Inc., 640 S.W.2d 576, 1982 Tenn. App. LEXIS 415 (Tenn. Ct. App. 1982).

24. Practice and Procedure.

Procedure is according to chancery, in whatever court. De Soto Lumber Co. v. Loeb, 110 Tenn. 251, 75 S.W. 1043, 1903 Tenn. LEXIS 55 (1903).

Practice as to parties, issuance of process and trial. Warner v. A.H. Yates & Co., 118 Tenn. 548, 102 S.W. 92, 1907 Tenn. LEXIS 62 (Tenn. Apr. 1907); Christie v. Williamsom, 4 Tenn. Civ. App. 161 (1914).

To maintain a suit under this section to establish a lien, complainant must allege and prove: (1) A contract between the main contractor and the landowner to erect a building upon the specific land, or to put improvements thereon; (2) a contract between the lien claimant and the principal contractor whereby the claimant sold the principal contractor materials to be used in the construction work covered by the original contract; (3) that notice of claiming the lien was given by the claimant to the owner pursuant to the statute. W.T. Hardison & Co. v. Harding Court Co., 36 Tenn. App. 98, 251 S.W.2d 829, 1952 Tenn. App. LEXIS 97 (1952).

25. —Nature of Proceedings.

Proceedings to enforce a mechanic's lien are quasi in rem only, not strictly in rem; and mere seizure of the property is not sufficient notice to the owner, who is a necessary party to the attachment suit. Fischer Lime & Cement Co. v. Kaucher, 164 Tenn. 657, 51 S.W.2d 492, 1931 Tenn. LEXIS 66 (1931).

Section 66-11-126, requiring liens to be enforced by attachment only, applies to proceedings under this section against the owner. Knoxville Structural Steel Co. v. Jones, 46 Tenn. App. 518, 330 S.W.2d 559, 1959 Tenn. App. LEXIS 111 (1959), overruled, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977), overruled on other grounds, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977).

26. —Notice.

In order to preserve or perfect his lien, the furnisher of work or materials to a contractor must give the owner notice of his claim of lien within the time prescribed. Brown v. Crump's Adm'r, 32 Tenn. 531, 1852 Tenn. LEXIS 110 (1852); Shelby v. Hicks, 37 Tenn. 197, 1857 Tenn. LEXIS 105 (1857); McLeod v. Capell, 66 Tenn. 196, 1874 Tenn. LEXIS 105 (1874); Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893).

No right of action for enforcement of the lien accrues until the notice required by this section has been given. Conger Lumber & Supply Co. v. White, 17 Tenn. App. 206, 66 S.W.2d 999, 1933 Tenn. App. LEXIS 56 (1933).

Insofar as a dispute between the owner and furnisher is concerned the statute does not provide for filing of notice with the county register and written notice is sufficient to perfect the lien between the furnisher and the owner. Walker Supply Co. v. Corinth Community Dev., Inc., 509 S.W.2d 514, 1974 Tenn. App. LEXIS 147 (Tenn. Ct. App. 1974).

An attachment issued and levied within 90 days of a void notice is void. Eatherly Constr. Co. v. DeBoer Constr., Inc., 543 S.W.2d 333, 1976 Tenn. LEXIS 477 (Tenn. 1976).

It is unnecessary, when compliance has been had with §§ 66-11-115 and 66-11-117, to go further and file the notice of abstract pursuant to § 20-3-101. Moore-Handley, Inc. v. Associates Capital Corp., 576 S.W.2d 354, 1978 Tenn. App. LEXIS 325 (Tenn. Ct. App. 1978).

No one is required, in addition to complying with every requirement of the mechanic's and materialmen's statute, to file lis pendens pursuant to § 20-3-101. Moore-Handley, Inc. v. Associates Capital Corp., 576 S.W.2d 354, 1978 Tenn. App. LEXIS 325 (Tenn. Ct. App. 1978).

Actual knowledge by a property owner that a materialman has filed a notice of lien in the register's office does not meet the notice requirement of T.C.A. § 66-11-115(b). Andrews Distrib. Co. v. Oak Square at Gatlinburg, 757 S.W.2d 663, 1988 Tenn. LEXIS 274 (Tenn. 1988), overruled in part, Spence v. Allstate Ins. Co., 883 S.W.2d 586, 1994 Tenn. LEXIS 251 (Tenn. 1994).

27. — —Acknowledgement.

Where it was necessary that notice to owner of claim be recorded in order to preserve furnisher's lien, such notice of claim was required to be acknowledged as required by §§ 66-22-101 and 66-22-108. Chattanooga Lumber & Coal Corp. v. Phillips, 202 Tenn. 266, 304 S.W.2d 82, 1957 Tenn. LEXIS 388 (1957).

28. — —Object.

The object of the notice is to protect the owner against the hazard of being compelled to pay the money twice. Brown v. Crump's Adm'r, 32 Tenn. 531, 1852 Tenn. LEXIS 110 (1852).

Where the owner of the building filed a bill to ascertain the lien of mechanics and furnishers, to fix the rights of the parties, and to hold the bondsman liable, the filing of an intervening petition therein by a furnisher within required days after the completion of the building, does not give him a lien where no valid notice of his claim had been served as required by this statute. Bird Bros. v. Southern Sur. Co., 139 Tenn. 11, 200 S.W. 978, 1917 Tenn. LEXIS 82 (1917).

Purchaser of property undergoing improvement must be given notice as to subsequently and separately furnished items of material. Pidgeon-Thomas Iron Co. v. McKnight, 8 Tenn. Civ. App. 1 (1918).

29. — —Service of Notice.

The notice required is not process, but is merely a private instrument of writing, and may, therefore, be served by a private individual, or nonofficial person as well as by an officer, except that the officer's return proves the service, while the service by the nonofficial must be proved as other facts. Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); Cary-Lombard Lumber Co. v. Thomas, 92 Tenn. 587, 22 S.W. 743, 1893 Tenn. LEXIS 15 (1893); Henry Weis Mfg. Co. v. Jones, 4 Tenn. App. 374, — S.W. —, 1926 Tenn. App. LEXIS 191 (Tenn. Ct. App. 1926).

Where the property improved is conveyed to a new corporation which was owner at the time the claimant sought to give notice of his claim, and it appears that the vendor and vendee corporations had the same individuals as officers, notice served upon one of these was sufficient notice to the new or vendee corporation. Fischer Lime & Cement Co. v. Kaucher, 164 Tenn. 657, 51 S.W.2d 492, 1931 Tenn. LEXIS 66 (1931).

Because the automatic stay did not apply, a Bankruptcy Code provision that tolled the effect of the automatic stay for a statutorily determined period was not applicable and thus, it did not toll the running of the 90-day period under Tennessee law for filing a state court action to protect and preserve a lien. In re Bluff City Sheet Metal, — B.R. —, 2016 Bankr. LEXIS 3119 (Bankr. W.D. Tenn. Aug. 15, 2016).

30. — — —Proof of Service.

An officer's return indorsed showing service of the notice is sufficient proof of service. Cary-Lombard Lumber Co. v. Thomas, 92 Tenn. 587, 22 S.W. 743, 1893 Tenn. LEXIS 15 (1893).

31. — — —Sufficiency of Descriptions.

The furnisher's notice to the owner that he claims the statutory lien upon the property for work and materials furnished to the contractor, and used in the erection of the improvement, if sufficient in other respects, is not bad for failure to give a specific description of the work and materials furnished. Reeves v. Henderson, 90 Tenn. 521, 18 S.W. 242, 1891 Tenn. LEXIS 35 (1891); Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893).

Examples of furnisher's notice to the owner that are held to be sufficient in description of the property and of the work and materials furnished. Reeves v. Henderson, 90 Tenn. 521, 18 S.W. 242, 1891 Tenn. LEXIS 35 (1891); Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893).

The general rule is that failure to describe particularly the property or the building or improvement on which the lien is claimed, or a mistake in the description of the property, may be corrected by amendment at least as long as the amended description keeps within the bounds included by the original. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

Where there is a positive or unambiguous description of the wrong piece of property and not of property which the lien may properly attach, the description is obviously insufficient to create or preserve a lien. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

32. — —Time for Notice.

The subcontractor, or furnisher, must give the required notice to the owner after the completion of his contract in doing work or furnishing materials for the owner's contractor, and within the allowed time after the delivery of the last materials or performance of his work, though given before the contractor's completion of the building. Reeves v. Henderson, 90 Tenn. 521, 18 S.W. 242, 1891 Tenn. LEXIS 35 (1891); Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); Cole Mfg. Co. v. Falls, 92 Tenn. 607, 22 S.W. 856, 1893 Tenn. LEXIS 17 (1893); Hercules Powder Co. v. Knoxville, L. & J. R. Co., 113 Tenn. 382, 83 S.W. 354, 1904 Tenn. LEXIS 32, 106 Am. St. Rep. 836, 67 L.R.A. 487 (1904); Mattei v. Clark Hdwe. Co., 155 Tenn. 184, 290 S.W. 977, 1926 Tenn. LEXIS 34 (1926).

Notice given within required days after the completion of the contract of the subcontractor, or furnisher, and before the contractor's completion of the improvement, is in proper time. Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); Cole Mfg. Co. v. Falls, 92 Tenn. 607, 22 S.W. 856, 1893 Tenn. LEXIS 17 (1893); Hercules Powder Co. v. Knoxville, L. & J. R. Co., 113 Tenn. 382, 83 S.W. 354, 1904 Tenn. LEXIS 32, 106 Am. St. Rep. 836, 67 L.R.A. 487 (1904).

Notice given more than allowed days after the completion of his contract by the subcontractor, or furnisher, and before the contractor's completion of the building or improvement, is not in proper time, and is insufficient. Cole Mfg. Co. v. Falls, 92 Tenn. 607, 22 S.W. 856, 1893 Tenn. LEXIS 17 (1893).

Notice given within allowed days after the contractor's completion of the building or improvement, though more than allowed days after the completion of his contract by the subcontractor, or furnisher, is sufficient. Cole Mfg. Co. v. Falls, 92 Tenn. 607, 22 S.W. 856, 1893 Tenn. LEXIS 17 (1893).

A furnisher of brick to a contractor on terms specifying no time for delivery except that brick should be delivered in such quantities and at times as required and ordered by the contractor, and who gave notice of his lien before the building was finished but within the statutory time after completion of the walls, though not within statutory time after the last of such brick were furnished, has a lien on the structure, since the furnisher was subject to be called on for further brick and the contract was one for continuing supply, not expiring until actual completion. Bristol Brick Works v. King College, 41 S.W. 1069, 1896 Tenn. Ch. App. LEXIS 107 (Tenn. Ch. App. 1896).

Under this statute, the notice of lien must be served upon the owner within the time specified after the building is completed, or within required number of days after the contract of the laborer, mechanic, or workman shall expire; and in the case of a furnisher of material, he must serve his notice within required number of days after the last material is furnished, or within required number of days after the building is completed; and a notice served by the furnisher is void, if served more than required number of days after the last material is furnished, and before the completion of the building; and it will be seen that two periods are fixed for the service of such notice, namely, within required number of days after the last material is supplied, and within required number of days after the building is completed; and if given more than required number of days after the last material is furnished, it is too late, and falls without the first period; and if given before the building is completed, it is premature and without the second period. Bird Bros. v. Southern Sur. Co., 139 Tenn. 11, 200 S.W. 978, 1917 Tenn. LEXIS 82 (1917); East Lake Lumber Box Co. v. Simpson, 5 Tenn. App. 51, 1927 Tenn. App. LEXIS 34 (1927); Oliver King Sand & Lime Co. v. Sterchi, 7 Tenn. App. 647, 1928 Tenn. App. LEXIS 92 (1928).

It is the performance of the work that is controlling in determining the time for filing notice of a lien, and a request by an owner of property for a contractor to correct or complete his work has no bearing on when the lien should be filed. Brumit v. Graybeal Glass Co., 609 S.W.2d 521, 1980 Tenn. App. LEXIS 344 (Tenn. Ct. App. 1980).

33. — — —Suit Barred by Delay.

Where warrant was not issued within 90 days after the service of the notice of his claim of lien by a subcontractor, the suit before a justice of the peace (now general sessions judge) was barred. Warner v. A.H. Yates & Co., 118 Tenn. 548, 102 S.W. 92, 1907 Tenn. LEXIS 62 (Tenn. Apr. 1907).

Where construction company failed to file its notice of lien within 90 days after it ceased work, the lien was void and the company had no cause of action. Eatherly Constr. Co. v. DeBoer Constr., Inc., 543 S.W.2d 333, 1976 Tenn. LEXIS 477 (Tenn. 1976).

Where construction company failed to issue and levy attachment within 180 days of completion of work upon the property subject to the lien, it could not amend its complaint so as to incorporate the attachment not levied within the time limitations. Eatherly Constr. Co. v. DeBoer Constr., Inc., 543 S.W.2d 333, 1976 Tenn. LEXIS 477 (Tenn. 1976).

Where July 11 was considered by the trial court as the date of completion of the building, and the subcontractor's lien was filed on October 10, which is 91 days, the lien was not timely filed. Brumit v. Graybeal Glass Co., 609 S.W.2d 521, 1980 Tenn. App. LEXIS 344 (Tenn. Ct. App. 1980).

Where a subcontractor failed to file suit for the enforcement of the lien within 90 days after the filing, the lien was lost. Brumit v. Graybeal Glass Co., 609 S.W.2d 521, 1980 Tenn. App. LEXIS 344 (Tenn. Ct. App. 1980).

Materialman's lien was extinguished when a writ of attachment was not issued within 90 days of notice of the lien. C.O. Christian & Sons Co. v. Nashville P.S. Hotel, Ltd., 765 S.W.2d 754, 1988 Tenn. App. LEXIS 573 (Tenn. Ct. App. 1988).

34. — — —Beginning Date of Period for Filing Notice.

The right of the furnisher of materials to a contractor, to fix his lien for the materials begins when the last material is delivered under the contract, whether it is used in the building or not, and the time for acquiring the lien by filing notice thereof will begin to run from the date of the delivery of the last material. Voightman & Co. v. Southern R. Co., 123 Tenn. 452, 131 S.W. 982, 1910 Tenn. LEXIS 17 (1910).

Under a contract for the construction of a building, including the installation of a sprinkler system, to be approved by the state inspection bureau, the building is not completed, as regards the allowed days thereafter for giving notice of the lien, till the work required by the bureau, on its inspection, is done. Harrison v. Knafle, 128 Tenn. 329, 161 S.W. 1003, 1913 Tenn. LEXIS 52 (1913).

Where no time is prescribed for delivery of materials, but same are to be delivered at such times as required and ordered, notice may be reckoned and given from completion of building. Bristol Brick Works v. King College, 41 S.W. 1069, 1896 Tenn. Ch. App. LEXIS 107 (Tenn. Ch. App. 1896).

35. — — —Amendment of Notice.

Where a lawsuit to enforce a materialman's lien was initiated and attachment of wrong property was levied within 90 days of the notice of lien, however, not until after 110 days from the notice of lien was the error in property description corrected by amendment of plaintiff's petition and defendant's improved property properly attached, the amended complaint describing and attaching the correct improved property did not relate back to the time the suit was originally filed, which was within the required 90 days of notice of lien and thus plaintiff's lien enforcement was dismissed. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

36. — — —Amendment of Contract — Effect on Time for Notice.

Within this statute, claimants have specified number of days from the completion of the work as enlarged by amendment of the contract between the owner and contractor, though part of their material was furnished before such amendment and all of it was for the work previously provided for by the contract. Harrison v. Knafle, 128 Tenn. 329, 161 S.W. 1003, 1913 Tenn. LEXIS 52 (1913).

37. — —Suit in Lieu of Notice.

Where the furnisher employed by the contractor fails to give the notice within the prescribed time, but institutes an injunction suit against the owner and contractor before the owner's payment to the contractor, such suit operates as notice. Brown v. Crump's Adm'r, 32 Tenn. 531, 1852 Tenn. LEXIS 110 (1852). See Bassett v. Bertorelli, 92 Tenn. 548, 22 S.W. 423, 1893 Tenn. LEXIS 12 (1893); Crumley v. Reicon Co., 4 Tenn. Civ. App. (4 Higgins) 645 (1913).

Suit to enforce lien and service of process serves in lieu of notice. Brantingham v. Beasley, 2 Tenn. App. 598, — S.W. —, 1926 Tenn. App. LEXIS 60 (Tenn. Ct. App. 1926). See B. E. Buffaloe & Co. v. Jones, 6 Tenn. App. 316, — S.W. —, 1927 Tenn. App. LEXIS 146 (Tenn. Ct. App. 1927).

The filing of a bill of attachment and the service of process within the statutory period does not fulfill the requirement of written notice to the owner. Conger Lumber & Supply Co. v. White, 17 Tenn. App. 206, 66 S.W.2d 999, 1933 Tenn. App. LEXIS 56 (1933). But see General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977).

Although attachment was issued within the ninety day period where it was not levied until after such time the bill was properly dismissed. Knoxville Structural Steel Co. v. Jones, 46 Tenn. App. 518, 330 S.W.2d 559, 1959 Tenn. App. LEXIS 111 (1959), overruled, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977), cert. denied, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977).

Where lien claimant filed timely complaint, and where clerk immediately issued writ of attachment to sheriff and defendant had timely notice of the complaint, the suit was properly brought within the 90-day period despite a delay in enforcement of the writ till the ninety-fifth day. General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977).

38. —Parties.

In an action to enforce the lien of a subcontractor, the owner of the property at the time the action is brought, whether he be the contracting owner or his vendee, is a necessary party. This rule works no hardship on the claimant. Fischer Lime & Cement Co. v. Kaucher, 164 Tenn. 657, 51 S.W.2d 492, 1931 Tenn. LEXIS 66 (1931).

The contractor and owner must both be made parties to the suit. East Lake Lumber Box Co. v. Simpson, 5 Tenn. App. 51, 1927 Tenn. App. LEXIS 34 (1927).

39. — —Amendment as to Parties.

An amended bill, making the trustees under a prior mortgage parties defendant, filed after the expiration of the 90 days, in which no active relief was sought against the trustees, will be treated as relating back to the original bill, so that the trustees cannot defeat the bill on the plea of limitation of 90 days. Niehaus v. C. B. Barker Const. Co., 135 Tenn. 382, 186 S.W. 461, 1916 Tenn. LEXIS 34 (1916).

40. —Pleading.

Defendant owner may not file cross bill making contractor and surety on bond parties to enforce bond liability against objection of lienor. McRae v. University of S., 52 S.W. 463, 1898 Tenn. Ch. App. LEXIS 157 (Tenn. Ch. App. 1898).

A description of the property, in a bill to enforce, supplies the place of description in the attachment. Crumley v. Reicon Co., 4 Tenn. Civ. App. (4 Higgins) 645 (1913).

41. —Burden of Proof.

The owner has the burden of showing that the amount paid to the contractor was, by the latter, paid to the lienors where the effort is to hold recovery within the contract price. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927); Traylor v. Sims, 5 Tenn. App. 594, 1927 Tenn. App. LEXIS 97 (1927).

The burden is on the lien claimant to show contract with contractor, the materials furnished, and their use or delivery therefor. Christie v. Williamsom, 4 Tenn. Civ. App. 161 (1914).

42. —Proof.

Where items of a claim are so confused or indefinite that it is impossible to determine what materials were used in a particular improvement, the entire claim is disallowed. Pidgeon-Thomas Iron Co. v. McKnight, 8 Tenn. Civ. App. 1 (1918).

43. —Defenses.

Action by owner in notifying lienors that the building was completed on a premature date does not waive existing defense to the proper fixing of liens. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

Agreement of materialman not to charge materials furnished to builder to landowners did not amount to waiver of right to assert materialman's lien against the property for materials furnished builder and not paid for although such agreement would have protected landowner in action ex contractu by materialman for materials furnished. Fussell v. Vowell & Sons, 60 Tenn. App. 397, 447 S.W.2d 113, 1969 Tenn. App. LEXIS 321 (1969).

44. —Personal Judgment.

In action to establish mechanic's lien, plaintiff, seller of the materials, was entitled to personal judgment against the contractor who purchased the supplies irrespective of whether or not the materials were delivered to or used on the property on which the lien was sought to be fixed. A.J. Cook & Co. v. Seaton, 6 Tenn. App. 81, 1927 Tenn. App. LEXIS 119 (1927).

45. Completion of Work.

Facts indicating a building is complete are: the building is substantially finished; the contractor has abandoned work on the building; the owner or tenant has taken possession and begun to use the building, and only minor work, not of the essence of the contract, remains to be done. In re D. L. Bouldin Constr. Co., 6 B.R. 288, 1980 Bankr. LEXIS 4385 (Bankr. E.D. Tenn. 1980).

Facts indicating that a building is not complete are: the contractor abandons the job after a dispute with the owner and before completing his contract; the building has serious defects; and some work that is of the essence of the contract remains to be done. In re D. L. Bouldin Constr. Co., 6 B.R. 288, 1980 Bankr. LEXIS 4385 (Bankr. E.D. Tenn. 1980).

A claim of defect or defects themselves do not make a building incomplete for the purposes of the lien statutes. In re D. L. Bouldin Constr. Co., 6 B.R. 288, 1980 Bankr. LEXIS 4385 (Bankr. E.D. Tenn. 1980).

Collateral References.

Abandonment of construction or of contract as affecting time for filing mechanics' liens. 52 A.L.R.3d 797.

Continuing contract, transaction or account, what constitutes, as regards time for filing mechanic's lien. 97 A.L.R. 780.

“Cost plus” contract, requisites and sufficiency of notice of mechanics' lien in case of. 26 A.L.R. 1328.

Effect of bankruptcy of principal contractor upon mechanic's lien of a subcontractor, laborer, or materialman as against owner of property. 69 A.L.R.3d 1342.

Examination, repair, or servicing of fixtures, machinery, or attachments in building, labor in, as extending time for filing mechanic's lien. 51 A.L.R.3d 1087.

Existence of more than one contract between owner and contractor as affecting sufficiency of notice or claim of mechanic's lien by materialman or subcontractor. 175 A.L.R. 353.

Filing of mechanics' lien or proceeding for its enforcement as affecting right to arbitration. 73 A.L.R.3d 1066.

Formal requisites of notice of intention to claim mechanic's lien. 158 A.L.R. 682.

Notice by owner of nonresponsibility for work or improvement on his property, statute as to necessity of, to prevent attachment of lien, as applicable as between mortgagor and mortgagee. 85 A.L.R.2d 949.

Release or waiver of mechanic's lien by general contractor as affecting rights of subcontractor or materialman. 75 A.L.R.3d 505.

Removal by, or return to, claimant of part of material furnished as affecting time for filing claim. 122 A.L.R. 755.

Removal or demolition of building or other structure as basis for mechanic's lien. 74 A.L.R.3d 386.

Sale of real property as affecting time for filing notice of or perfecting mechanic's lien as against purchaser's interest. 76 A.L.R.2d 1163.

Substitution or replacement of material as affecting time for filing mechanic's lien. 54 A.L.R. 984.

Sufficiency of claim, statement, or notice of lien where only part of work is of lienable character. 149 A.L.R. 715.

Sufficiency of designation of owner in notice, claim, or statement of mechanic's lien. 48 A.L.R.3d 153.

Sufficiency of notice, claim or statement of mechanic's lien with respect to nature of work. 27 A.L.R.2d 1169.

Sufficiency of notice under statute making notice by owner of nonresponsibility necessary to prevent mechanic's lien. 85 A.L.R.2d 949.

Who is the “owner” within mechanic's lien statute requiring notice of claim. 76 A.L.R.3d 605.

66-11-116. [Repealed.]

Compiler's Notes. Former § 66-11-116 (Code 1932, § 7928; T.C.A. (orig. ed.), § 64-1116), concerning laborer's notice to owner a benefit to others and when notice is not required, was repealed by Acts 1990, ch. 854, § 5, effective July 1, 1990.

66-11-117. [Repealed.]

Compiler's Notes. Former § 66-11-117 (Acts 1889, ch. 103, § 1; Shan., § 3541; mod. Code 1932, § 7929; modified; Acts 1972, ch. 747, §§ 2, 3; 1977, ch. 373, § 2; T.C.A. (orig. ed.), § 64-1117), concerning precedence of mechanic's contract, was repealed by Acts 2007, ch. 189, § 16, effective May 18, 2007.

66-11-118. Multiple lots or improvements.

    1. Where the amount due is for work or labor performed or materials, services, equipment, or machinery furnished for a single improvement on contiguous or adjacent lots, parcels or tracts of land and the work or labor is performed or the materials, services, equipment, or machinery is furnished under the same contract or contracts, a lienor shall be required to serve or record only one (1) claim of lien covering the entire claim against the real property.
    2. If two (2) or more lots, parcels, or tracts of land are improved under the same contract or contracts and the improvements are not to be operated as a single improvement, a lienor who has performed work or labor or furnished materials, services, equipment, or machinery for the improvement shall, in claiming a lien, apportion the lienor's contract price between the several lots, parcels, or tracts of land and improvements on the lots, parcels, or tracts of land, and serve a separate notice of lien for the amount claimed against each lot, parcel, or tract of land and the improvements on the lot, parcel, or tract of land.
    1. Unless the improvements are to be operated as a single improvement, whenever more than one (1) building or unit is constructed upon or other improvement is made to a single lot, parcel or tract of land or to contiguous lots, parcels or tracts of land, the visible commencement of operations as defined in this chapter with respect to each separate building, unit or other improvement shall not be deemed to constitute or otherwise relate to the visible commencement of operations with respect to any other building, unit or improvement on any single lot, parcel or tract of land or any contiguous lots, parcels or tracts of land. In connection therewith, a lienor who has performed work or labor or furnished materials, services, equipment, or machinery shall, in claiming a lien, apportion the lienor's contract price between the separate buildings, units or improvements on the buildings or units as applicable and serve or record a separate claim of lien for the amount claimed against each separate building, unit or improvement; in such event, the time prescribed in §§ 66-11-112 and 66-11-115 for serving or recording notice of lien shall commence to run with respect to each building, unit or improvement immediately upon the completion or abandonment of the building, unit or improvement.
    2. Whenever a lienor has furnished work, labor, or materials, services, equipment, or machinery for improvements that are to be operated as a single improvement on a single lot, parcel or tract of land or contiguous lots, parcels or tracts of land, the lienor shall be required to serve or record only a single notice of lien covering the lienor's entire claim against the real property.
  1. Except as expressly provided in the Horizontal Property Act, compiled in chapter 27 of this title, and notwithstanding any other provision of this chapter, a lien arising under this chapter by reason of an improvement that is part of a common interest community does not attach to the common elements, but attaches to the units as follows:
    1. If the improvement was contracted for by the association of unit owners, however denominated, the lien attaches to all the units in the common interest community for which the association acts, unless the association notifies the lienor, when the contract is made, that the lien may attach only to the unit or units on or for the benefit of which the improvement was made; and
    2. If the improvement was contracted for by a unit owner, the lien attaches only to that owner's unit.

Code 1932, § 7936; Acts 1975, ch. 317, § 1; 1976, ch. 533, § 1; T.C.A. (orig. ed.), § 64-1118; Acts 1990, ch. 641, §§ 3, 4; 2007, ch. 189, § 17.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-703.

Law Reviews.

Mechanics' Liens in Tennessee — Recent Developments, 6 Mem. St. U.L. Rev. 519 (1976).

NOTES TO DECISIONS

1. Rights Affected.

Failure to register notice pursuant to this section affects only the rights of furnisher as to subsequent purchaser or lienor, and as between furnisher and owner, written notice is sufficient as this section is not applicable. Walker Supply Co. v. Corinth Community Dev., Inc., 509 S.W.2d 514, 1974 Tenn. App. LEXIS 147 (Tenn. Ct. App. 1974).

Collateral References.

Construction and application of provision of lien statute as to quantity or area of land around improvement which may be subjected to lien. 84 A.L.R. 123.

Single mechanic's lien under entire contract, against two or more separate buildings on different lots in same ownership. 15 A.L.R.3d 73.

Single mechanic's lien upon several parcels as enforceable against less than all the parcels. 130 A.L.R. 423.

66-11-119. Amendment of notice of lien.

  1. Any notice of lien served or recorded as provided in this chapter may be amended at any time during the period allowed for serving or recording the notice; provided, that the notice and amendment are served or recorded in good faith and the amendment is not shown to be prejudicial to another interested person.
  2. Any amendment of the notice of lien shall be served or recorded in the same manner as is provided for the original notice.

Code 1932, §§ 7930, 7931; T.C.A. (orig. ed.), § 64-1119; Acts 2007, ch. 189, § 18.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-704.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, § 23.

NOTES TO DECISIONS

1. Amended Property Description.

The general rule is that failure to describe particularly the property or the building or improvement on which the lien is claimed, or a mistake in the description of the property, may be corrected by amendment at least as long as the amended description keeps within the bounds included by the original. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

Where there is a positive or unambiguous description of the wrong piece of property and not of property which the lien may properly attach, the description is obviously insufficient to create or preserve a lien. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

2. Untimely Amendment.

Correcting an improper description of the property against which the lien is asserted after the time for filing has passed would amount to making an entirely new claim of lien. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

Collateral References.

Amendment of statement of claim or mechanic's lien as to designation of owner of property. 81 A.L.R.2d 681.

Right to amend notice of claim after expiration of time for filing claim. 81 A.L.R. 360.

66-11-120. Lien limited to contract price and extras in the contract.

The claims secured by lien for work, labor, materials, equipment, services, machinery, overhead and profit, shall not exceed the contract price and extras in the contract between the owner and the prime contractor.

Code 1858, § 1988 (deriv. Acts 1845-1846, ch. 118, § 2); Shan., § 3544; mod. Code 1932, § 7937; T.C.A. (orig. ed.), § 64-1120; Acts 2007, ch. 189, § 19.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 2, 3, 10, 13, 20.

Law Reviews.

Mechanic's Lien — Quantum Meruit as an Alternative Remedy, 34 Tenn. L. Rev. 518 (1967).

Titles as Affected by Liens (Hugh A. Tapp), 28 Tenn. L. Rev. 352 (1961).

NOTES TO DECISIONS

1. Construction.

This section and § 66-11-115 should be construed in connection with the sections dealing with original contractors, for all their provisions are means of securing compensation to the original contractors and laborers and materialmen, within the limits fixed by the statute. Richardson v. Lanius, 150 Tenn. 133, 263 S.W. 799, 1923 Tenn. LEXIS 70 (1923).

This section was intended to benefit the owner by enabling him to protect himself against double liability. Thomas v. Noe, 42 Tenn. App. 234, 301 S.W.2d 391, 1956 Tenn. App. LEXIS 126 (1956).

Contractor did not willfully and grossly exaggerate the contractor's lien claim because, (1) at trial, the contractor's motion to reduce the claim was granted, and (2) a project owner showed no resulting harm. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

2. Enforcement of Liens in Full.

Unless sufficient amount of contract price previously paid by the owner can be directly traced to lienors, the latters' lien will be enforced in full. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

3. Payment of Full Contract Price — Effect.

Where owner has paid full contract price which has been applied to payment of lien claims, he cannot be required to pay other lien claims up to the amount of the contract price. Thomas v. Noe, 42 Tenn. App. 234, 301 S.W.2d 391, 1956 Tenn. App. LEXIS 126 (1956).

4. Possibility of Double Liability.

The lien law places an owner in such position that he may be subjected to double payment, unless he exercises caution to prevent it. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

5. Pro Rata Payments.

Where claims are allowed in excess of the contract price, they should be pro rated. Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

The claims are to be paid on pro rata basis where allowable liens exceed the contract price; but, where a smaller sum was actually paid in satisfaction of a claim, that will be adopted in arriving at the rights of other lienors. Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

The fact that total payments to labor and material furnishers exceeded the original contract price will not prevent those labor and material furnishers who have not been paid from enforcing their lien for their pro rata share. Standard Glass & Supply Co. v. Sheley, 604 S.W.2d 36, 1980 Tenn. LEXIS 481 (Tenn. 1980).

6. Burden of Proof.

The burden is on the owner to show that the amount which had been paid to the contractor was by him paid to lienors or to others for labor and materials furnished in the construction. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

In action by owner, seeking to bring in all lien claimants, and to pay them pro rata because the amount of outstanding claims exceeded the contract price, the burden was on plaintiff to show the contract price and that after paying all other valid liens on the property, there was not enough of the contract price remaining to satisfy the claim of the particular defendant. Traylor v. Sims, 5 Tenn. App. 594, 1927 Tenn. App. LEXIS 97 (1927).

The defense of T.C.A. § 66-11-120 is not available to the owner unless he can trace payments equal to or in excess of the contract price directly into the hands of furnishers of material and labor. Standard Glass & Supply Co. v. Sheley, 604 S.W.2d 36, 1980 Tenn. LEXIS 481 (Tenn. 1980).

7. Interest.

The contention that it was improper to allow interest which would increase the amount of recovery beyond the contract price was stated to be of merit but case was reversed on other grounds. Variety Fire Door Co. v. Hanson-Worden Co., 10 Tenn. App. 254, 1929 Tenn. App. LEXIS 30 (1929).

66-11-121. Insurance proceeds subject to liens.

  1. The proceeds of any insurance that by the terms of the policy are payable to the owner of real property improved, and are actually received by or are to be received by the owner because of the destruction or removal by fire or other casualty of an improvement on which lienors have performed labor, or for which they have furnished materials, services, equipment, or machinery shall, after the owner has been reimbursed from the proceeds for premiums paid for the insurance by the owner, if any, be subject to liens provided by this chapter to the same extent and in the same order of priority as the real property would have been had the improvement not been so destroyed or removed.
  2. The proceeds of any insurance that by the terms of the policy are payable to a prime contractor or remote contractor, and are received or to be received by the prime contractor or remote contractor, shall, after the prime contractor or remote contractor has been reimbursed from the proceeds for premiums paid for the insurance by the prime contractor or remote contractor, if any, be liable for the payment for labor or materials, services, equipment, or machinery furnished and for which the prime contractor or remote contractor is liable in the same manner and under the same conditions as payments to the prime contractor or remote contractor under the contract would have been had the improvements not been so destroyed or removed.

Code 1932, § 7934; T.C.A. (orig. ed.), § 64-1121; Acts 2007, ch. 189, § 20.

66-11-122. Transfer of debt without notice.

This lien shall not pass to any person to whom the debt is transferred without notice of the lien.

Code 1858, § 1989 (deriv. Acts 1845-1846, ch. 118, § 2); Shan., § 3545; mod. Code 1932, § 7938; T.C.A. (orig. ed.), § 64-1122; Acts 2007, ch. 189, § 21.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, § 8.

NOTES TO DECISIONS

1. Notice Required.

The notice required by this section is notice to the assignee of the debt. Bell Bros. & Co. v. Arnold, 17 Tenn. App. 493, 68 S.W.2d 958, 1933 Tenn. App. LEXIS 84 (1933).

If the debt is assigned, the lien may be preserved by notice thereof to the assignee. Bell Bros. & Co. v. Arnold, 17 Tenn. App. 493, 68 S.W.2d 958, 1933 Tenn. App. LEXIS 84 (1933).

2. Assignor and Assignee of Lien Note — Respective Rights.

The assignee of a lien note, taken with notice of the lien, may enforce the lien within the time limited for the life of the lien; and if the assignor takes up the note, he again may enforce it within the limited time prescribed. Burr v. Graves, 72 Tenn. 552, 1880 Tenn. LEXIS 63 (1880).

No lien may be enforced in behalf of a lienor who took a note in payment, and transferred it to a holder not in court, though he be liable as indorser. Garrett v. Adams, 39 S.W. 730, 1897 Tenn. Ch. App. LEXIS 6 (Tenn. Ch. App. Mar. 1, 1897).

66-11-123. Transfer of debt by contractor.

The lien of another shall not be lost where any prime contractor or remote contractor has transferred or assigned the debt or charge due that lienor.

Code 1858, § 1990 (deriv. Acts 1845-1846, ch. 118, § 2); Acts 1885, ch. 8; Shan., § 3546; mod. Code 1932, § 7941; T.C.A. (orig. ed.), § 64-1123; Acts 2007, ch. 189, § 22.

NOTES TO DECISIONS

1. Notes Transferred — Lienor's Rights.

Where notes taken by lienor in payment for his work were transferred by him, no lien can be enforced by him as payee where holder is not before the court, though lienor was indorser on one, and stayor of a judgment on the other. Garrett v. Adams, 39 S.W. 730, 1897 Tenn. Ch. App. LEXIS 6 (Tenn. Ch. App. Mar. 1, 1897).

2. Surety as Assignee — Subrogation.

Surety of a contractor paying material claims and taking assignment thereof for his protection is subrogated to the rights of the owner of the claim, and his rights are superior to those of an assignee of the principal. Miller Bros. Co. v. Standard Plumbing & Heating Co., 15 Tenn. App. 102, 1931 Tenn. App. LEXIS 118 (1931).

66-11-124. Waiver of lien — Payment bonds.

  1. The acceptance by the lienor of a note or notes for all or any part of the amount of the lienor's claim shall not constitute a waiver of the lienor's lien, unless expressly so agreed in writing, nor shall it in any way affect the period for serving or recording the notice of lien under this chapter.
    1. Any contract provision that purports to waive any right of lien under this chapter is void and unenforceable as against the public policy of this state.
      1. If a prime contractor or remote contractor solicits any person to sign a contract requiring the person to waive a right of lien in violation of this section, then the person shall notify the state board for licensing contractors of that fact. Upon receiving the information, the executive director of the board shall notify the prime contractor or remote contractor within a reasonable time after receiving the information that the contract is against the public policy of this state and in violation of this section. If the prime contractor or remote contractor voluntarily deletes the waiver of lien provision from the contract and affirmatively states that the language will not be included in any future contracts to perform construction work in this state, then no further action shall be taken by the board against the prime contractor or remote contractor unless a later complaint is filed against the prime contractor or remote contractor for a violation of this section.
      2. If the prime contractor or remote contractor does not delete the waiver of lien provision from the contract, then the executive director shall schedule a hearing for appropriate action by the board. If the board finds after a hearing that the contracts of the prime contractor or remote contractor are in violation of this section, then the board shall immediately revoke the prime contractor's or remote contractor's license.
      3. The board shall send notice of the revocation to the prime contractor's or remote contractor's licensing authority in all states in which the prime contractor or remote contractor is licensed as a contractor.
      4. In any action for damages based on the waiver of a right of lien filed by a person solicited by the prime contractor or remote contractor, the person has the right to recover from the prime contractor or remote contractor reasonable attorney's fees and costs in connection with the enforcement of the lien.
  2. Notwithstanding any other provision of this chapter, no liens by remote contractors are allowed under this chapter if, prior to any work or labor being provided or materials, services, equipment, or machinery furnished in furtherance of the improvement, the owner, or the owner's agent, provides a payment bond, equal in amount to one hundred percent (100%) of the prime contractor's contract price, in favor of the remote contractors who provide work or labor or furnish materials, services, equipment, or machinery in furtherance of the improvement pursuant to a contract. The payment bond shall be executed with sufficient surety by one (1) or more sureties authorized to do business in this state. The bond shall be recorded in the office of the register of deeds of every county where the real property to be improved, or any affected part, lies.

Code 1932, § 7939; T.C.A. (orig. ed.), § 64-1124; Acts 2005, ch. 197, § 1; 2007, ch. 189, § 23; 2009, ch. 483, § 1; 2020, ch. 749, § 1.

Compiler's Notes. Acts 2005, ch. 197, § 2 provided that the amendment by the act shall be effective only for contracts issued on or after July 1, 2005.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “prime contractor or remote contractor” for "contractor" throughout (b)(2); in the last sentence of (b)(2)(A), added “for a violation of this section”; in (b)(2)(B), inserted “from the contract” in the first sentence, and in the second sentence, inserted “then the board shall immediately revoke the prime contractor's or remote” and deleted "shall be immediately revoked” from the end; and in (b)(2)(C), added “The board shall send” and deleted “shall be sent by the board” following “revocation”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Law Reviews.

Mechanics' and Materialmen's Liens in Tennessee (Charles H. Barnett), 5 Mem. St. U.L. Rev. 359 (1975).

Attorney General Opinions. The 2005 amendment to T.C.A. § 66-11-124 cannot to prohibit any and all lien waivers, OAG 05-184, 2005 Tenn. AG LEXIS 186 (12/22/05).

Collateral References.

Release or waiver of mechanic's lien by general contractor as affecting rights of subcontractor or materialman. 75 A.L.R.3d 505.

66-11-125. Maintaining an action on a contract not precluded.

Nothing in this chapter shall be construed to prevent any lienor under any contract from maintaining an action on the contract as if the lienor had no lien for the security of the lienor's debt, and the bringing of the action shall not prejudice the lienor's rights under this chapter.

Code 1932, § 7940; T.C.A. (orig. ed.), § 64-1125; Acts 2007, ch. 189, § 24.

66-11-126. Methods of enforcement.

Liens under this chapter, except as provided in subdivision (5)(A), shall be enforced only by the filing of a complaint, petition, or civil warrant seeking the issuance of an attachment in the manner as follows:

  1. For a prime contractor, the lien shall be enforced in a court of law or equity by complaint and writ of attachment or in a court of general sessions having jurisdiction by a warrant for the sum claimed and writ of attachment, filed under oath, setting forth the facts, describing the real property, with process to be served on the person or persons whose interests the prime contractor seeks to attach and sell;
  2. For a remote contractor, the lien shall be enforced in a court of law or equity by complaint and writ of attachment or in a court of general sessions having jurisdiction by a warrant for the sum claimed and writ of attachment, filed under oath, setting forth the facts and describing the real property with process to be served on the person or persons whose interests the remote contractor seeks to attach and sell. In the discretion of the plaintiff or complainant, the complaint or warrant may also be served on the prime contractor or remote contractor in any degree, with whom the plaintiff or complainant is in contractual privity. In either event, the person or persons whose interest the remote contractor seeks to attach and sell shall have the right to make the prime contractor or remote contractor a defendant by third-party complaint or cross-claim as is otherwise provided by law;
  3. A complaint, petition, or civil warrant under this chapter is timely filed if a suit seeking the issuance of an attachment is filed within the applicable period of time, even if the attachment is not issued or served within the applicable period. The clerk of the court in which the suit is brought shall issue the attachment writ without obtaining fiat of a judge or chancellor;
  4. The clerk of the court to whom application for attachment is made shall, before issuing the attachment, require the plaintiff, or the plaintiff's agent or attorney to execute a bond with sufficient surety, payable to the defendant or defendants in the amount of one thousand dollars ($1,000) or the amount of the lien claimed, whichever is less; provided, that a party may petition the court for an increase in the amount for good cause shown, and conditioned that the plaintiff will prosecute the attachment with effect or, in case of failure, pay the defendant or defendants all costs that may be adjudged against the defendant or defendants and all such damages as the defendant or defendants may sustain by the wrongful suing out of the attachment; and
    1. Where a bond has been provided pursuant to § 66-11-124, § 66-11-136, or § 66-11-142, an attachment on the real property shall not be necessary after the bond has been recorded, and the claim shall be enforced by a complaint, petition, or civil warrant on the bond before the circuit or chancery court, or before a court of general sessions where the amount is within its jurisdiction, filed under oath, setting forth the facts and describing the real property with process to be served on the obligors on the bond. In the discretion of the plaintiff or complainant, the complaint or warrant may also be served on the owner or owner's agent, prime contractor or remote contractor in any degree with whom the plaintiff is in contractual privity. In either event, the obligors on the bond shall have the right to make the owner or owner's agent, prime contractor, or any remote contractor of any degree a defendant by third-party complaint or cross-claim as is otherwise provided by law. Any complaint, petition, or civil warrant on the bond shall be filed in the county where any portion of the real property is located;
    2. Where a lien is enforced pursuant to this subdivision (5), or after suit is commenced on a bond provided pursuant to § 66-11-124, § 66-11-136, or § 66-11-142, the plaintiff shall, in case of failure to prosecute the suit with effect, pay the defendant or defendants all costs adjudged against the defendant or defendants and all the damages the defendant or defendants may sustain by the wrongful assertion of the lien; and
    3. Where a complaint, petition, or civil warrant is brought pursuant to this subdivision (5), or after suit is commenced on a bond provided pursuant to § 66-11-124, § 66-11-136, or § 66-11-142, the defendants shall retain all defenses to the validity of the underlying lien.

Code 1932, § 7948; Acts 1957, ch. 235, § 1; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), § 64-1126; Acts 2007, ch. 189, § 25; 2014, ch. 557, § 1; 2015, ch. 117, § 1; 2020, ch. 749, § 2.

Compiler's Notes. Acts 2014 ch. 557, § 2, provided that the act shall apply to any lien based on work or labor that is performed on or after July 1, 2014.

Acts 2015, ch. 117, § 3 provides that the act shall apply to any lien that attaches on or after April 10, 2015.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2015 amendment rewrote (1) and (2), which read: “(1) For a prime contractor, the lien shall be enforced in a court of law or equity by attachment or in a court of general sessions having jurisdiction by a warrant for the sum claimed and writ of attachment, filed under oath, setting forth the facts, describing the real property, to be served on the persons whose interests the prime contractor seeks to attach and sell under process, and the owner or owners as defined in § 66-11-101 shall be given notice only of the filing of such warrant and writ of attachment;”“(2) For a remote contractor, the lien shall be enforced in a court of law or equity by attachment or in a court of general sessions having jurisdiction by a warrant for the sum claimed and writ of attachment, filed under oath, setting forth the facts, describing the real property, to be served on the persons whose interests the remote contractor seeks to attach and sell under process, and the owner or owners as defined in § 66-11-101 shall be given notice only of the filing of such warrant and writ of attachment. Within the discretion of the plaintiff or complainant, the warrant and writ of attachment may be served on the prime contractor, or remote contractor in any degree, with whom the plaintiff or complainant is in contractual privity, but the owner or owners shall have the right to make the prime contractor or remote contractor a defendant by third-party complaint or cross-claim as is otherwise provided by law;”; in (4) added “or” preceding “the plaintiff’s agent” in the first sentence; and rewrote (5)(A), which read: “ (5)(A) Where a bond has been provided pursuant to § 66-11-124, § 66-11-136, or § 66-11-142, an attachment on the real property shall not be necessary after the bond has been recorded, and the lien shall be enforced by an action on the bond before the circuit or chancery court, or before a court of general sessions where the amount is within its jurisdiction, filed under oath, setting forth the facts and describing the real property. Any such action shall be served on the principal of the bond and may, in the discretion of the plaintiff, be served on the owner or owner's agent, prime contractor, the remote contractor in any degree with whom the plaintiff is in contractual relation, and the surety on the bond, but the prime contractor, any remote contractor of any degree or the surety on the bond shall have the right to make others a defendant by third-party complaint or cross-claim as is otherwise provided by law.”

The 2020 amendment substituted “a complaint, petition, or civil warrant” for “an action” throughout the section; and substituted “Any complaint, petition, or civil warrant” for “Any action” in (5)(A).

Effective Dates. Acts 2015, ch. 117, § 3. April 10, 2015.

Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Attachment, title 29, ch. 6.

Enforcement in general sessions court, § 66-11-134.

Vendor's liens, title 66, ch. 10.

Textbooks. Tennessee Jurisprudence, 3 Tenn. Juris., Attachment and Garnishment, §§ 131, 134; 17 Tenn. Juris., Justices of Peace and General Sessions Courts, § 18; 18 Tenn. Juris., Mechanics' Liens, §§ 2, 3, 10, 20, 22; 20 Tenn. Juris., Parties, § 3.

Law Reviews.

Priority Conflicts Between Fixture Secured Creditors and Real Estate Claimants (Coburn Dewees Berry), 7 Mem. St. U.L. Rev. 209 (1977).

NOTES TO DECISIONS

1. Constitutionality.

Section 66-11-115 authorizing mechanics' liens and this section permitting attachments to enforce such liens meet federal and state due process requirements both because the landowner does not suffer a sufficiently significant deprivation of property rights by reason of a pre-judgment lien notice and attachment and because there are adequate procedural safeguards. Silverman v. Gossett, 553 S.W.2d 581, 1977 Tenn. LEXIS 585 (Tenn. 1977).

2. Construction.

A materialman may not enforce his lien as created under this chapter by attachment and subsequent sale of the property of a home owner where the home owner has made no contract with the purported materialman and the contractor is not before the court on personal service. Jordan v. Deitz, 201 Tenn. 77, 296 S.W.2d 866, 1956 Tenn. LEXIS 468 (1956), superseded by statute as stated in, Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966). But see, Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966).

The right to enforce a mechanic's lien is a statutory right. Jordan v. Deitz, 201 Tenn. 77, 296 S.W.2d 866, 1956 Tenn. LEXIS 468 (1956), superseded by statute as stated in, Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966).

The clear intention of the legislature in enacting the 1957 amendment to this section was to change the Jordan  case (Jordan v. Deitz, 201 Tenn. 77, 296 S.W.2d 866, 1956 Tenn. LEXIS 468 (1956)) so that in a suit to enforce a mechanic's lien by one who is not in privity of contract with the landowner, the contractor is no longer a necessary and indispensable party to the suit. Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966).

3. Prerequisites to Attachment.

This section has no specific directive as to who must make the oath to the complaint; therefore lienholder's attorney could make the affidavit in support of an attachment to enforce a materialman's lien for payment for plumbing supplies. Smith v. Chris-More, Inc., 535 S.W.2d 863, 1976 Tenn. LEXIS 589 (Tenn. 1976).

Requirement that the complaint be filed under oath means that the claimant or the claimant's attorney must state under oath that the allegations in the complaint are true. D.T. McCall & Sons v. Seagraves, 796 S.W.2d 457, 1990 Tenn. App. LEXIS 367 (Tenn. Ct. App. 1990).

4. Personal Judgment.

The materialman who does not have a contractual relationship with the owner is not entitled to a personal judgment against the owner but is only entitled to an attachment of the property. Jordan v. Deitz, 201 Tenn. 77, 296 S.W.2d 866, 1956 Tenn. LEXIS 468 (1956), superseded by statute as stated in, Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966). But see, Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966), holding that suit in quantum meruit will lie in appropriate circumstances.

5. Failure to Have Attachment Issued in Time.

In action against owner of property where attachment was not both issued and levied within the period prescribed by § 66-11-115, the action was properly dismissed. Knoxville Structural Steel Co. v. Jones, 46 Tenn. App. 518, 330 S.W.2d 559, 1959 Tenn. App. LEXIS 111 (1959), overruled, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977), overruled on other grounds, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977).

6. Delay in Enforcement of Attachment.

Where lien claimant filed timely complaint, and where clerk immediately issued writ of attachment to sheriff and defendant had timely notice of the complaint, the suit was properly brought within the 90-day period despite a delay in enforcement of the writ till the 95th day. General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977).

Materialman's lien was extinguished when a writ of attachment was not issued within 90 days of notice of the lien. C.O. Christian & Sons Co. v. Nashville P.S. Hotel, Ltd., 765 S.W.2d 754, 1988 Tenn. App. LEXIS 573 (Tenn. Ct. App. 1988).

7. Unjust Enrichment.

Before recovery can be had against landowner on unjust enrichment theory, the furnisher of the materials and labor must have exhausted his remedies against the person with whom he contracted and still not have received the reasonable value of his services. Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966).

Where a materialman or subcontractor furnishes labor or materials which benefit the property of a person with whom there is no privity of contract, an action on quantum meruit may lie against the landowner to recover the reasonable value of the labor or materials furnished. Paschall's, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 1966 Tenn. LEXIS 505 (1966).

8. Persons Constituting Lienors — Extent of Lien.

There is no lien on property for materials furnished in cases where public improvements are made on land owned by a county nor is there any liability on the part of the county to the party who furnished such materials to the contractor. Air Temperature, Inc. v. Morris, 63 Tenn. App. 90, 469 S.W.2d 495, 1970 Tenn. App. LEXIS 313 (Tenn. Ct. App. 1970).

Collateral References.

Demand for or submission to arbitration as affecting enforcement of mechanics' lien. 73 A.L.R.3d 1042.

Enforceability of single mechanic's lien against less than the total number of parcels covered. 68 A.L.R.3d 1300.

Filing of mechanics' lien or proceeding for its enforcement as affecting right to arbitration. 73 A.L.R.3d 1066.

Nonresidence or absence of defendant from state as suspending running of limitations against action to foreclose mechanic's lien. 119 A.L.R. 372.

Personal judgment as essential to enforcement of mechanic's lien. 147 A.L.R. 1099.

Pleadings, verification of, by agent or attorney in action to enforce. 7 A.L.R. 13.

Redemption by lienor from own sale. 108 A.L.R. 996.

Remedy available to holder of mechanic's lien which has priority over antecedent mortgage or vendor's title or lien as regards the improvement but not as regards the land, where it is impossible or impracticable to remove the improvement. 107 A.L.R. 1012.

What constitutes claim or demand against estate within statute disqualifying witness. 54 A.L.R.2d 1103.

Who is contractor or subcontractor, as distinguished from materialman, for purposes of filing or enforcement of mechanic's lien. 141 A.L.R. 321.

66-11-127. Suits against personal representatives.

The provision of title 30, chapter 2, part 5, prohibiting the bringing of suits against personal representatives after the grant of letters shall not apply to suits brought under this chapter.

Code 1932, § 7946; T.C.A. (orig. ed.), § 64-1127; Acts 2007, ch. 189, § 26.

Cross-References. “Code” defined, § 1-3-105.

Prohibition of suits against personal representatives, § 30-2-501.

66-11-128. Enforcement against persons adjudicated incompetent.

  1. If the labor, improvements, materials, services, equipment, or machinery are furnished for work done on the lands of any infant, person adjudicated incompetent, or cestui que trust, and in excusable ignorance on the part of the prime contractors or remote contractors, of the person's lack of legal capacity, the prime contractors or remote contractors shall have the right, after serving ten (10) days' notice on any guardian, conservator or trustee of the person, within which period satisfaction may be made, to take and remove the parts of the property on which their labor was performed, or their materials, services, equipment, or machinery or other property was used, the removal to be only of enough to satisfy their true claim and to be without substantial injury to the property of the person as it stood prior to improvement.
  2. As an alternative to the remedy under subsection (a), the court, in the enforcement of a lien provided by this chapter, may order the improvement to be separately sold and the purchaser may remove the improvement within such reasonable time as the court may fix. The purchase price for the improvement shall be paid into court. The owner of the land upon which the improvement was made may demand that the land be restored to substantially its condition before the improvement was commenced, in which case the court shall order its restoration, and the reasonable charge for the restoration shall be first paid out of the purchase price and the balance shall be paid to lienors and other encumbrancers in accordance with their respective rights.

Acts 1889, ch. 103, § 2; Shan., § 3533; mod. Code 1932, § 7920; T.C.A. (orig. ed.), § 64-1128; Acts 2007, ch. 189, § 27; 2011, ch. 47, § 71.

Compiler's Notes. Acts 2011, ch. 47, § 107 provided that nothing in the legislation shall be construed to alter or otherwise affect the eligibility for services or the rights or responsibilities of individuals covered by the provision on the day before the date of enactment of this legislation, which was July 1, 2011.

Acts 2011, ch. 47, § 108 provided that the provisions of the act are declared to be remedial in nature and all provisions of the act shall be liberally construed to effectuate its purposes.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, § 28.

NOTES TO DECISIONS

1. Married Women — Decisions Before Modification of Section by 1932 Code.

Plaintiff was not entitled to recover possession of material from defendant, a married woman, where material was not specifically described and there was no proof that material was still in the possession of the defendant. Woodruff Hdwe. Co. v. Haverly, 4 Tenn. Civ. App. (4 Higgins) 547 (1913).

Under the express provisions of the statute, a furnisher's lien on the real estate of a married woman, whether her separate or general estate, could not be established, when there was no contract evidenced by a writing signed by her; and, where the one furnishing the goods for which the lien was sought to be established knew that the right and title to the realty was in her, he had no right to remove the goods. City Lumber Co. v. Barnhill, 129 Tenn. 676, 168 S.W. 159, 1914 Tenn. LEXIS 158 (1914).

2. —Inexcusable Ignorance of Title.

Where a lumber company furnished a husband lumber used in the erection of two houses on the lots of his wife who was the owner thereof by a duly registered deed, the lumber company could not remove materials from the lots because of the furnisher's ignorance of the wife's right or claim, because the statute applied only to cases of excusable ignorance, and the lumber company could have discovered the registered ownership of the lots by the slightest inquiry; and the registration was constructive notice. City Lumber Co. v. Temple, 138 Tenn. 88, 195 S.W. 1127, 1917 Tenn. LEXIS 8 (1917). See Baker v. Stone, 58 S.W. 761, 1896 Tenn. Ch. App. LEXIS 128 (Tenn. Ch. App. 1896).

66-11-129. Right of removal from lands of persons under disability.

The right of removal provided in § 66-11-128 shall apply on like terms and in like manner as in other cases of superior titles or liens, when the work was done by the prime contractor or remote contractor in excusable ignorance of the rights of such persons.

Acts 1899, ch. 103, § 2; Shan., § 3534; mod. Code 1932, § 7921; T.C.A. (orig. ed.), § 64-1129; Acts 2007, ch. 189, § 28.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, § 28.

NOTES TO DECISIONS

1. “Superior Titles or Liens” — Meaning.

The expression “superior titles or liens” must necessarily include the title of the lessor. Thomas & Turner v. National Conservation Exposition Co., 137 Tenn. 1, 191 S.W. 348, 1916 Tenn. LEXIS 48 (1916).

2. Ignorance of Superior Title — Necessity.

When it is given its proper effect, the statute limits the right of removal to those acting in ignorance of the “superior title.” Thomas & Turner v. National Conservation Exposition Co., 137 Tenn. 1, 191 S.W. 348, 1916 Tenn. LEXIS 48 (1916).

3. Lienor's Notice of Lessor's Title and Rights.

Under a lease providing that all improvements shall be the property of the lessor at the expiration of the lease, and that the property shall not be subjected to any lien for improvements, the maker of improvement for the lessee or his assignee, with knowledge of the lessor's title and rights, was not entitled to remove such improvements. Thomas & Turner v. National Conservation Exposition Co., 137 Tenn. 1, 191 S.W. 348, 1916 Tenn. LEXIS 48 (1916).

4. Lessor's Notice of Improvements.

The fact that the president of the lessor company was an officer and director of the lessee company and knew of the work being done by those claiming the lien did not adversely affect the rights of the lessor company, where its president did nothing to mislead the claimants of such liens, and his action was consistent with the lease contract with the lessees. Thomas & Turner v. National Conservation Exposition Co., 137 Tenn. 1, 191 S.W. 348, 1916 Tenn. LEXIS 48 (1916).

Improvements are made on leasehold property with knowledge of the estate and rights of the lessor, where the leases under which the lessees were operating were of record in the county; and no right of removal exists. Thomas & Turner v. National Conservation Exposition Co., 137 Tenn. 1, 191 S.W. 348, 1916 Tenn. LEXIS 48 (1916).

66-11-130. Demand for enforcement of lien.

Upon written demand of the owner, the owner's agent, or prime contractor, served on the lienor, requiring the lienor to file a complaint, petition, or civil warrant to enforce the lienor's lien, and describing the real property in the demand, the proceeding must be commenced, or the claim filed in a creditors' or foreclosure proceeding, within sixty (60) days after service, or the lien is forfeited.

Code 1932, § 7947; T.C.A. (orig. ed.), § 64-1130; Acts 2007, ch. 189, § 29; 2020, ch. 749, § 3.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “file a complaint, petition, or civil warrant” for “commence action” and “proceeding must” for “action shall”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-706.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, § 2.

Law Reviews.

Mechanics' and Materialmen's Liens, 45 Tenn. L. Rev. 741 (1978).

66-11-131. Joinder of petitioners.

Where there are several persons entitled to the lien given by this chapter, all or any number of them may join in one (1) suit; or upon the filing by one (1) or more of the lienors of a complaint, petition, or civil warrant for the benefit of all lienors, any other lienor may come in by petition, under oath, without suing out a new attachment, by giving bond and security, with effect as if the attachment, if any, had been taken out by the petitioner.

Code 1858, § 3544; Shan., § 5307; mod. Code 1932, § 7949; T.C.A. (orig. ed.), § 64-1131; Acts 2007, ch. 189, § 30; 2020, ch. 749, § 4.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “a complaint, petition, or civil warrant” for “an action”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Intervention, Tenn. R. Civ. P. 24.

Permissive joinder of parties, Tenn. R. Civ. P. 20.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), §§ 465, 466.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, § 20; 20 Tenn. Juris., Parties, § 6.

NOTES TO DECISIONS

1. Nature of Action.

A proceeding under this section is a suit in the nature of a general creditor's bill. Tennessee United Paint Store, Inc. v. D.H. Overmyer Whse. Co., 62 Tenn. App. 721, 467 S.W.2d 806, 1971 Tenn. App. LEXIS 207 (1971).

2. Intervention.

The filing of an intervening petition within the time limit does not give lien where there was no valid service of notice. Bird Bros. v. Southern Sur. Co., 139 Tenn. 11, 200 S.W. 978, 1917 Tenn. LEXIS 82 (1917).

Where contractor filed his bill against and attached the wrong lots, another lienor filed against and attached the proper lots, and the contractor corrected his original bill by amendment, all within the statutory period, the contractor's bill was treated as a subsequent petition in order to sustain his lien. Reed v. Fuller, 16 Tenn. App. 47, 65 S.W.2d 841, 1932 Tenn. App. LEXIS 26 (1932).

3. Separate Suits.

Where property was never brought into court because attachment was not levied within the period prescribed by § 66-11-115, complainant could not obtain the benefit of this section where he neither joined with other claimants in bringing suit nor filed his petition in the suit already filed, but instituted his own separate suit. Knoxville Structural Steel Co. v. Jones, 46 Tenn. App. 518, 330 S.W.2d 559, 1959 Tenn. App. LEXIS 111 (1959), overruled, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977), overruled on other grounds, General Electric Supply Co. v. Arlen Realty & Development Corp., 546 S.W.2d 210, 1977 Tenn. LEXIS 515 (Tenn. 1977).

4. Attorneys' Fees.

Under the established case law a complainant who files a bill in the nature of a general creditor's bill is not entitled to attorneys' fees unless the action creates or preserves some fund for the benefit of creditors and fees thus allowed must come from the fund or assets thus preserved and not from any surplus over and above the amount necessary to satisfy the claims of creditors. Tennessee United Paint Store, Inc. v. D.H. Overmyer Whse. Co., 62 Tenn. App. 721, 467 S.W.2d 806, 1971 Tenn. App. LEXIS 207 (1971).

The fact that this section fails to specifically provide for an attorney's fee to complainants' attorney does not bar the award of such a fee which is otherwise allowable. Tennessee United Paint Store, Inc. v. D.H. Overmyer Whse. Co., 62 Tenn. App. 721, 467 S.W.2d 806, 1971 Tenn. App. LEXIS 207 (1971).

66-11-132. Consolidation of proceedings.

If separate complaints, petitions, or civil warrants to enforce liens provided by this chapter are brought in the same court, then they must be consolidated; and if in different courts, the proceedings may, upon application, be removed into the court, if a court of record, in which the first complaint, petition, or civil warrant was filed, and there consolidated, unless the later proceeding is one for the benefit of all lienors, in the nature of a lien-creditors' bill, in which event earlier proceedings not of that nature must be consolidated into the lien-creditors' bill, on petition.

Code 1858, § 3546; Shan., § 5309; mod. Code 1932, § 7950; T.C.A. (orig. ed.), § 64-1132; Acts 2007, ch. 189, § 31; 2020, ch. 749, § 5.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “complaints, petitions, or civil warrants” for “actions”, substituted “proceedings” for “actions” twice,  and substituted “complaint, petition, or civil warrant” for “action” and “proceeding” for “action”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Consolidation, Tenn. R. Civ. P. 42.

Law Reviews.

Trial, 4 Mem. St. U.L. Rev. 335 (1973).

NOTES TO DECISIONS

1. Transfer from Law to Chancery Court.

Where the suit to enforce the lien was commenced by attachment in a court of law, it was the proper exercise of discretion in that court to transfer the case to the chancery court, where a bill for a like purpose was pending, in order that all the questions arising might be there determined. Hillman & Bros. v. Anthony, 63 Tenn. 444, 1874 Tenn. LEXIS 289 (1874).

66-11-133. Adjudication of conflicting rights in consolidated proceeding.

The court is authorized to adjudicate, in a consolidated proceeding, the conflicting rights of the parties claiming liens, among themselves; and to enforce the same according to priorities, if any.

Code 1858, § 3545; Shan., § 5308; mod. Code 1932, § 7951; T.C.A. (orig. ed.), § 64-1133; Acts 2007, ch. 189, § 32; 2020, ch. 749, § 6.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “consolidated proceeding” for “consolidated action”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-11-134. Enforcement in general sessions court.

  1. When the lien is enforced by a civil warrant before a court of general sessions, and when an attachment has been levied on the lot or land and judgment rendered, the papers shall be returned to the circuit court, there to be proceeded with as in the case of a court of general sessions execution levied on land.
    1. No court of general sessions' attachment in any such case shall be a lien on the land, unless, within twenty (20) days after the levy of attachment, an abstract of the levy of attachment, showing the name of the plaintiff and defendant, the date and amount of the claim, and a description of the premises affected, is filed for registration in the lien book in the office of the register of the county in which the real property, or any affected portion of the real property, lies.
    2. The register shall index the abstract, as the indexer is required to index deeds, and, for the registration and indexing, the indexer shall receive the sum prescribed by § 8-21-1001.

Code 1858, §§ 3547-3549 (deriv. Acts 1857-1858, ch. 62, §§ 1, 2); Shan., §§ 5310-5312; mod. Code 1932, §§ 7952-7954; modified; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), §§ 64-1134 — 64-1136; Acts 2007, ch. 189, § 33; 2020, ch. 749, § 7.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “enforced by a civil warrant” for “enforced by an action” in (a).

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Methods of enforcement, § 66-11-126.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Justices of Peace and General Sessions Courts, § 18; 18 Tenn. Juris., Mechanics' Liens, § 21.

NOTES TO DECISIONS

1. Purpose.

The reason of the first paragraph of subsection (b) is, perhaps, that the date of the commencement of the lien not being fixed by the judgment of the justice (now general sessions judge), which only determines the amount due, it was deemed advisable to give notice by registration, so as to put purchasers upon inquiry. Montgomery v. Rich, 3 Cooper's Tenn. Ch. 660 (1878).

2. Jurisdiction.

A justice (now general sessions judge) has jurisdiction to enforce the mechanic's lien for any sum within his jurisdiction. Reeves v. Henderson, 90 Tenn. 521, 18 S.W. 242, 1891 Tenn. LEXIS 35 (1891); Phillips-Burtoff Mfg. Co. v. Campbell, 93 Tenn. 469, 25 S.W. 961, 1893 Tenn. LEXIS 74 (1894); De Soto Lumber Co. v. Loeb, 110 Tenn. 251, 75 S.W. 1043, 1903 Tenn. LEXIS 55 (1903).

3. Warrant — Contents.

In a suit before a justice (now general sessions judge) by a subcontractor to enforce a mechanic's and furnisher's lien, the warrant should contain a brief statement of the facts constituting his right to recover against the principal contractor and to a lien against the property of the owner, and should show upon its face that an attachment had been sued out to enforce the lien claimed. Warner v. A.H. Yates & Co., 118 Tenn. 548, 102 S.W. 92, 1907 Tenn. LEXIS 62 (Tenn. Apr. 1907).

4. Procedure before Lower Court.

No form of procedure for enforcing the lien, before justices of the peace (now general sessions courts), is prescribed by statute, and the proceedings must be according to the course of the common law, as near as possible. There must be a suit brought by the party seeking to enforce the lien, and an attachment sued out against the property, upon which the lien is claimed, simultaneously with the issuance of the warrant. Warner v. A.H. Yates & Co., 118 Tenn. 548, 102 S.W. 92, 1907 Tenn. LEXIS 62 (Tenn. Apr. 1907).

5. Circuit Court's Jurisdiction.

Circuit court has no jurisdiction where amount involved does not exceed $50.00. Phillips-Burtoff Mfg. Co. v. Campbell, 93 Tenn. 469, 25 S.W. 961, 1893 Tenn. LEXIS 74 (1894).

6. Prerequisites to Circuit Court's Order of Sale.

In action before a justice (now general sessions judge) where attachment was levied on the land, but no execution issued by the justice, a sale under the circuit court's venditioni was void. Gentry v. Gunkel, 62 S.W. 355, 1901 Tenn. Ch. App. LEXIS 45 (Tenn. Ch. App. 1901).

66-11-135. Release of lien — Recording release.

  1. If a lienor whose lien has been forfeited, expired, satisfied or adjudged against the lienor in a proceeding on the lien, fails to cause the lien provided by this chapter to be released within thirty (30) days after service of written notice demanding release, the lienor shall be liable to the owner for all damages arising therefrom, and costs, including reasonable attorneys' fees, incurred by the owner.
  2. The release shall be recorded in the office where the notice of lien was recorded. The fee for recording shall be the fee required for the recording of a release or satisfaction of a mortgage as provided by law.
  3. For the purpose of this section, a lien shall be deemed released on the day on which the release of the lien is recorded in the proper office.

Code 1932, § 7935; T.C.A. (orig. ed.), § 64-1137; Acts 2007, ch. 189, § 34; 2020, ch. 749, § 8.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “a proceeding” for “an action” in (a).

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Form and contents of lien book, § 66-21-103.

Collateral References.

Release or waiver of mechanic's lien by general contractor as affecting rights of subcontractor or materialman. 75 A.L.R.3d 505.

66-11-136. Property owner's right to bond against enforcement of liens.

The owner of the property on which the improvement is made has the right to demand a bond from the prime contractor to protect the owner in case of the enforcement of a lien under this chapter by one (1) or more remote contractors; and in the event the prime contractor is paid for the work done, or any part of it, that is subject to a lien by a remote contractor, then on payment by the owner to the remote contractor of the amount due, the owner shall have judgment for the amount by filing a complaint, petition, or civil warrant against the bond in any court having jurisdiction in such cases; but the prime contractor shall have the right to contest the legality and amount of the claim of the remote contractors before the prime contractor is held liable.

Acts 1889, ch. 103, § 3; Shan., § 3542; mod. Code 1932, § 7932; T.C.A. (orig. ed.), § 64-1138; Acts 2007, ch. 189, § 35; 2020, ch. 749, § 9.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “by filing a complaint, petition, or civil warrant against the bond” for “by action on the bond”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. General home repairs and improvement contractors, title 7, ch. 62, part 2.

Surety bonds on public contracts, title 12, ch. 4, part 2.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-702.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 2, 10, 12, 29; 26 Tenn. Juris., Working Contracts, § 14.

Law Reviews.

Selected Tennessee Legislation of 1986, 54 Tenn. L. Rev. 457 (1987).

NOTES TO DECISIONS

1. Constitutionality.

The provision in this section authorizing the owner who has been compelled to pay the subcontractors, mechanics, or materialmen in discharge of their liens on the property, to take judgment over by motion against the contractor upon his indemnity bond, does not render the statute unconstitutional, for it does not subject the contractor to liability without his day in court, because notice is required by necessary implication. Cole Mfg. Co. v. Falls, 90 Tenn. 466, 16 S.W. 1045, 1891 Tenn. LEXIS 30 (1891).

Mechanic's lien laws are not rendered unconstitutional by the fact that they create liens that may take precedence over the rights of others that would otherwise prevail. Cole Mfg. Co. v. Falls, 90 Tenn. 466, 16 S.W. 1045, 1891 Tenn. LEXIS 30 (1891); Green v. Williams, 92 Tenn. 220, 21 S.W. 520, 1892 Tenn. LEXIS 66, 19 L.R.A. 478 (1893); Ruston v. Perry Lumber Co., 104 Tenn. 538, 58 S.W. 268, 1900 Tenn. LEXIS 27 (1900).

2. Nature and Effect.

The provision giving the owner the right to require the indemnity or refunding bond is but declarative of a legal right already existing. The owner is not required to exact the bond, but is permitted to do so. Cole Mfg. Co. v. Falls, 90 Tenn. 466, 16 S.W. 1045, 1891 Tenn. LEXIS 30 (1891).

3. Rights of Contractor.

The provision giving the contractor the right to contest the legality of the claim shows affirmatively that it was contemplated that he should have notice of the motion, and an opportunity to make defense. Cole Mfg. Co. v. Falls, 90 Tenn. 466, 16 S.W. 1045, 1891 Tenn. LEXIS 30 (1891).

4. Subcontractor's Bond to Indemnify against Other Subcontractors.

An indemnity bond, made to the owner by subcontractors, to indemnify him against the claims and liens of other subcontractors, where the obligated subcontractors had mechanic's liens, with ample time to give the requisite notice, and gave the bond in consideration of receiving from the owner, through his contractor, payment for their claim and lien, is not given under this section, and is without consideration and unenforceable. Hanks & McGuire v. Barron Bros., 95 Tenn. 275, 32 S.W. 195, 1895 Tenn. LEXIS 84 (1895).

5. Accruing of Right to Recover on Bond.

Such bond, under the statute, implies that right of recovery thereon does not accrue until liens are satisfied. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

6. Pleading — Effect on Right of Recovery.

In suit by subcontractor in which contractor's surety was made a defendant, no decree should be rendered in favor of owner where there is no pleading seeking such relief. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

7. Costs.

Costs adjudged against an owner in action to establish liens are included in the penalty of the bond unless expressly excluded. Richmond Screw Anchor Co. v. E. W. Minter Co., 156 Tenn. 19, 300 S.W. 574, 1927 Tenn. LEXIS 82 (1927).

Collateral References.

Validity and effect of provision in contract against mechanic's lien. 75 A.L.R.3d 505.

66-11-137. Owner's misapplication of loan proceeds — Violation.

  1. Any owner who procures a loan secured by a mortgage or other encumbrance on certain real property, representing that the proceeds of the loan are to be used for the purpose of improving real property, and who, with intent to defraud, uses the proceeds or any part of the proceeds for any other purpose than to pay for labor performed on, or materials, services, equipment, or machinery furnished for the real property, and overhead and profit related thereto while any amount for the labor, materials, services, equipment, machinery, overhead or profit remains unpaid, or while any amount of which the owner has received notice of nonpayment prescribed by this chapter remains unpaid, shall be liable to an injured party for any damages and actual expenses incurred, including attorneys' fees, if the damages and expenses incurred are the result of the misapplication of the loan proceeds.
  2. A violation of subsection (a) is a Class E felony.

Code 1932, § 7943; T.C.A. (orig. ed.), § 64-1139; Acts 1989, ch. 591, § 88; 2007, ch. 189, § 36.

Cross-References. Penalty for Class E felony, § 40-35-111.

Theft offenses, title 39, ch. 14, part 1.

66-11-138. Contractor's misapplication of payments — Violation.

    1. Any prime contractor or remote contractor who, with intent to defraud, uses the proceeds of any payment made to that contractor on account of improving certain real property for any purpose other than to pay for labor performed on, or materials, services, equipment, or machinery furnished by that contractor's order for the real property, and overhead and profit related thereto, while any amount for the labor, materials, services, equipment, machinery, overhead, or profit remains unpaid shall be liable to an injured party for any damages and actual expenses incurred, including attorneys' fees, if the damages and expenses incurred are the result of the misapplication of the payment.
    2. A violation of subdivision (a)(1) is a Class E felony.
  1. Notwithstanding subsection (a), there is no violation of this section when:
    1. Funds are disbursed pursuant to written agreement; or
    2. The use of funds received and deposited in a business account for use on multiple construction projects is based on the allocation of costs and profits in accordance with generally accepted accounting principles for construction projects.

Code 1932, § 7944 (Williams, § 7944a); T.C.A. (orig. ed.), § 64-1140; Acts 1989, ch. 591, § 89; 2004, ch. 688, § 1; 2007, ch. 189, § 37.

Cross-References. Penalty for Class E felony, § 40-35-111.

Theft offenses, title 39, ch. 14, part 1.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Bankruptcy, §§ 9, 41; 6 Tenn. Juris., Constitutional Law, § 47; 16 Tenn. Juris., Judgments and Decrees, § 66; 18 Tenn. Juris., Mechanics' Liens, §§ 3, 19.

Law Reviews.

Security Transaction — Right of Principal Debtor to Control Application of Payment, 24 Tenn. L. Rev. 901 (1957).

NOTES TO DECISIONS

1. Constitutionality.

This section is not unconstitutional on the ground that it is meaningless and so ambiguous as to be incapable of being well understood by the courts and the public. State v. Overton, 193 Tenn. 171, 245 S.W.2d 188, 1951 Tenn. LEXIS 343 (1951).

This section applies equally to all contractors and does not violate the “law of the land” provision of Tenn. Const., art. I, § 8. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

This section and § 66-11-140 in making proof of payments of the nature prohibited by this section prima facie evidence of intent to defraud did not violate provisions of Tenn. Const., art. I, § 9, relative to trial by impartial jury with presumption of innocence. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

Provisions of Tenn. Const., art. I, § 11, relative to ex post facto laws, was inapplicable to this section and facts developed. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

2. Purpose.

It is common knowledge to all lawyers that over a period of years, and especially during a building boom, there are hardly enough precautions that can be taken by the lender of money or the property owner to protect himself against improper application of funds paid in certain instances to certain unscrupulous contractors or those doing business on a shoe string. It was probably by reason of this fact that this section was adopted by the general assembly at the instance of the reputable contractors and others of the state. State v. Overton, 193 Tenn. 171, 245 S.W.2d 188, 1951 Tenn. LEXIS 343 (1951).

A statute of this nature is intended to make the payments to the contractor trust funds for payment of labor and materials and to afford protection against contractors who receive money for construction or repair of buildings and divert it to other uses prior to payment of claims for labor, materials or other charges in connection with the work on the building. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

The legislative purpose of this section is to punish for a fraudulent conversion and not for failure to comply with a contractual obligation. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

3. Construction.

This section must be read in conjunction with § 66-11-140. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

T.C.A. § 66-11-138 does not create an express trust. Witt Bldg. Material Co. v. Barker, 14 B.R. 852, 1981 Bankr. LEXIS 3365 (Bankr. E.D. Tenn. July 15, 1981).

4. Applicability.

Although the classic misapplication of contract payments undoubtedly occurs when the owner of real property pays money to a contractor for improvement of the payor's property, the language of this section does not restrict application of the statute to owner-payors. State v. Patterson, 755 S.W.2d 815, 1984 Tenn. Crim. App. LEXIS 2848 (Tenn. Crim. App. 1984).

This section makes the misapplication of construction funds a criminal offense; it does not create an express or technical trust for purposes of establishing a fiduciary relationship or obligation within the meaning of 11 U.S.C.A. § 523(a)(4). In re White, 106 B.R. 501, 1989 Bankr. LEXIS 1876 (Bankr. E.D. Tenn. 1989).

5. Nature of Offense.

The gist of the offense charged under this statute is that a person exercising a contractual relation shall obtain funds for a specific purpose and shall divert those funds to his own use, leaving outstanding obligations for which a creditor would have a lien upon the property owned by the payor of such funds. This very closely approaches embezzlement. State v. Overton, 193 Tenn. 171, 245 S.W.2d 188, 1951 Tenn. LEXIS 343 (1951); Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966); Steel Structures, Inc. v. Star Mfg. Co., 466 F.2d 207, 1972 U.S. App. LEXIS 8068 (6th Cir. 1972).

This section does not divide the offense created into degrees depending upon the amount misappropriated by the party charged. It makes him guilty of a felony irrespective of the amount so misappropriated. State v. Overton, 193 Tenn. 171, 245 S.W.2d 188, 1951 Tenn. LEXIS 343 (1951).

Where, at time contractor received funds from real estate owner, there were amounts of money for which he was liable for materials furnished in performance of the contract, it was a violation of this section for him to retain a portion of such funds for labor performed by himself under the contract. Miller v. State, 206 Tenn. 103, 332 S.W.2d 179, 1960 Tenn. LEXIS 348 (1960).

Although payment made by contractor to supplier was first applied, on instructions from the contractor, to the account for defendant's house, where the funds from which the contractor made such payment where the proceeds from a loan received on another lot it was not improper for the contractor to request and the supplier to transfer such credit from defendant's account to the account for the lot on which the loan was secured. Hammer-Johnson Supply, Inc. v. Curtis, 51 Tenn. App. 72, 364 S.W.2d 496, 1962 Tenn. App. LEXIS 95 (1962).

6. Sufficiency of Indictment.

It is unnecessary for an indictment under this section to state the amount misappropriated. State v. Overton, 193 Tenn. 171, 245 S.W.2d 188, 1951 Tenn. LEXIS 343 (1951).

An indictment laid in substantially the language of this section is not too vague and indefinite because it does not specify the amount unpaid by defendant for labor or materials and the particular persons whom he has failed to pay. State v. Overton, 193 Tenn. 171, 245 S.W.2d 188, 1951 Tenn. LEXIS 343 (1951).

7. Constructive Trusts.

While several states have statutes explicitly making funds paid to a contractor a trust for the benefit of laborers and materialmen, Tennessee only has this section which imposes criminal liability for misapplication of contract payments before debts to subcontractors have been satisfied. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

To prevent construction payments from becoming part of a bankrupt contractor's property in the absence of a state builders trust fund statute, courts generally will set up either an equitable lien or a constructive trust for subcontractors who possess valid mechanics liens or inchoate liens that are still capable of becoming valid within the prescribed state statutory time limits and requirements. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

Constructive trusts will be established to ensure that direct payments from the landowner to the materialmen or laborers either pursuant to a prior agreement or in exchange for an agreement not to file a lien are not held to be voidable preferences under the federal bankruptcy act. Sequatchie Concrete Service, Inc. v. Cutter Laboratories, 616 S.W.2d 162, 1980 Tenn. App. LEXIS 424 (Tenn. Ct. App. 1980).

Where bankrupt general contractor failed to pay suppliers, T.C.A. § 66-11-138 did not create a constructive trust for the benefit of suppliers against funds owing from the general contractor to subcontractors, and the funds were the property of the general contractor's bankruptcy estate. In re Null's Serv., Inc., 109 B.R. 301, 1990 Bankr. LEXIS 28 (Bankr. W.D. Tenn. 1990).

8. Bankruptcy Proceedings.

The trust created by T.C.A. § 66-11-138 on funds paid to a contractor for the benefit of subcontractors will not be given effect in a bankruptcy proceeding. Noland Co. v. Edmondson (In re Cedar City Elevator & Refrigeration Co.), 14 B.R. 623, 1981 Bankr. LEXIS 2929 (Bankr. M.D. Tenn. Sep. 22, 1981).

The proceeds of a construction loan made to the defendant contractor did not constitute trust funds by virtue of T.C.A. § 66-11-138 so that the failure of the contractor to apply those funds to the construction project resulted in a nondischargeable debt for bankruptcy purposes. Witt Bldg. Material Co. v. Barker, 14 B.R. 852, 1981 Bankr. LEXIS 3365 (Bankr. E.D. Tenn. July 15, 1981).

T.C.A. § 66-11-138 does not establish a construction fund trust within the meaning of the Bankruptcy Code 11 U.S.C. § 523(a) (4) providing that debt resulting from fraud and defalcation while acting in a fiduciary capacity is nondischargeable in bankruptcy, and thus state court judgment resulting from alleged misuse of funds provided by plaintiffs to debtor, a contractor/builder, for construction of residence was a dischargeable debt. In re Blalock, 15 B.R. 33, 1981 Bankr. LEXIS 3112 (Bankr. E.D. Tenn. 1981).

The fact that a bankrupt contractor's eligibility for pretrial diversion was at one time apparently contingent upon his restitution for an obligation from which he had been discharged in bankruptcy does not establish a prima facie case of bad faith on the part of the prosecution in attempting to prosecute the contractor under T.C.A. § 66-11-138 for misapplication of contract payments. In re Wilson, 30 B.R. 91, 1983 Bankr. LEXIS 6395 (Bankr. E.D. Tenn. 1983).

T.C.A. § 66-11-138 is not an explicit state builders trust fund statute; rather, it is merely a statute making the misapplication of construction funds a criminal offense. Were any trust deemed created under the statute, such a trust would clearly be only a trust ex maleficio, arising only upon occurrence of the unlawful act of misapplication. This statute does not create an express or technical trust necessary to establish a fiduciary relationship within the contemplation of 11 U.S.C. § 523(a)(4) (1979). In re Mettetal, 41 B.R. 80, 1984 B.R. LEXIS 5648 (Bankr. E.D. Tenn. 1984).

In dispute between internal revenue service and material supplier to debtor over rights in balance due under a construction contract, because Tennessee law does not impose a trust on construction funds for the benefit of mechanic or material lienors, contractor's subcontract with debtor did not include a retainage provision, and supplier had no contract with contractor who hired debtor, IRS's lien attached to the balance due the debtor. Therefore, the funds were not excludable from the bankruptcy estate. Hayes v. First Am. Nat'l Bank (In re Serv. Corp. of Am.), 115 B.R. 602, 1990 Bankr. LEXIS 1332 (Bankr. M.D. Tenn. 1990).

Debtors (contractors) violated the Tennessee Consumer Protection Act (TCPA) by representing that a county impact fee was required and by accepting payment from the creditors for an unnecessary fee that debtors never paid. This entitled the creditors to reasonable attorney fees and costs and to treble damages, and those amounts were nondischargeable in debtors'  bankruptcy. Poole v. Batson (In re Batson), 568 B.R. 281, 2017 Bankr. LEXIS 549 (Bankr. M.D. Tenn. Feb. 28, 2017).

9. Notice.

The duty to credit the particular account of a third party applies where the materialman or mechanic knows the source from which the money comes or is in possession of such facts as reasonably imputes notice to him of the source. Hayes Pipe Supply, Inc. v. McKendree Manor, Inc., 695 S.W.2d 174, 1985 Tenn. LEXIS 607 (Tenn. 1985).

Even if a supplier does not have actual knowledge of the source of funds offered as payment by a contractor, the supplier may still be required to properly allocate the payments if it has knowledge of facts from which it reasonably should know the source. Alside Supply Center v. Vinson, 802 S.W.2d 632, 1990 Tenn. App. LEXIS 682 (Tenn. App. 1990).

10. Sufficient Evidence.

Evidence was insufficient to show that defendant violated a condition of his probation where the evidence did not preponderate in favor of a finding that defendant violated any criminal laws; under T.C.A. § 66-11-138(a), the state did not prove in its case how defendant used any misapplied funds, if there were any, and there was not evidence in the record to establish the crime of theft. State v. Kendrick, 178 S.W.3d 734, 2005 Tenn. Crim. App. LEXIS 685 (Tenn. Crim. App. 2005).

Subcontractor was denied damages because the evidence did not preponderate against the finding that the general contractor did not intend to defraud the subcontractor as the balance of the general contractor's operating account, following fund transfers, exceeded the amount of any payment that was allegedly owed to the subcontractor during the vast majority of the life of the subcontract. Nat'l Door & Hardware Installers v. Mirsaidi, — S.W.3d —, 2014 Tenn. App. LEXIS 389 (Tenn. Ct. App. June 30, 2014).

Collateral References.

Validity and construction of statute providing criminal penalties for failure of contractor who has received payment from owner to pay laborers or materialmen. 78 A.L.R.3d 563.

66-11-139. Exaggeration of claims by lienor.

If, in any proceeding to enforce the lien provided by this chapter, the court finds that any lienor has willfully and grossly exaggerated the amount for which that person claims a lien, as stated in that person's notice of lien or pleading filed, in the discretion of the court, no recovery may be allowed thereon, and the lienor may be liable for any actual expenses incurred by the injured party, including attorneys' fees, as a result of the lienor's exaggeration.

Code 1932, § 7944; T.C.A. (orig. ed.), § 64-1141; Acts 2007, ch. 189, § 38; 2020, ch. 749, § 10.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “in any proceeding to enforce” for “in any action to enforce”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, § 2.

Law Reviews.

Mechanics' and Materialmen's Liens, 45 Tenn. L. Rev. 741 (1978).

NOTES TO DECISIONS

1. Applicability.

T.C.A. § 66-11-139 only applies to the lienor's claim for a lien and not to the claim for the debt. Where the statute says no “recovery may be allowed thereon, in the discretion of the court” it refers back to the beginning of the section to “any action to enforce the lien.” Dotson v. Gaidos, 736 S.W.2d 119, 1987 Tenn. App. LEXIS 2801 (Tenn. Ct. App. 1987).

Contractor did not willfully and grossly exaggerate the contractor's lien claim because, (1) at trial, the contractor's motion to reduce the claim was granted, and (2) a project owner showed no resulting harm. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

2. Falsification.

Furnisher of materials to contractor must act in good faith. If he falsifies his account, or connives with the contractor to defraud the owner, he loses his right to lien. Pidgeon-Thomas Iron Co. v. McKnight, 8 Tenn. Civ. App. 1 (1918).

There was no merit to the developer's affirmative defense of willful exaggeration of the lien because both the president and the developer's chief manager testified that payments were given the president individually as loans and not as payment on the architect's fees. TWB Architects, Inc. v. Braxton, LLC, — S.W.3d —, 2018 Tenn. App. LEXIS 58 (Tenn. Ct. App. Jan. 31, 2018).

66-11-140. Misuse of proceeds prima facie evidence of intent to defraud.

Use of the proceeds as enumerated in §§ 66-11-13766-11-139 for any purpose other than either payment pursuant to written agreement between the parties or in accordance with the allocation of costs and profits under generally accepted accounting principles for construction projects shall be prima facie evidence of intent to defraud. Use of a single business bank account for multiple projects shall not be evidence of intent to defraud.

Code 1932, § 7945; T.C.A. (orig. ed.), § 64-1142; Acts 2004, ch. 688, § 2; 2007, ch. 189, § 39.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Bankruptcy, § 9, 41; 6 Tenn. Juris., Constitutional Law, § 47; 18 Tenn. Juris., Mechanics' Liens, § 3.

Law Reviews.

1985 Tennessee Survey: Selected Developments in Tennessee Law, 53 Tenn. L. Rev. 389 (1986).

NOTES TO DECISIONS

1. In General.

A contractor receiving payments from a landowner is under a very strict statutory duty to apply those payments properly and not to divert them so as to leave the landowner exposed to the possibility of a lien. Alside Supply Center v. Vinson, 802 S.W.2d 632, 1990 Tenn. App. LEXIS 682 (Tenn. App. 1990).

Any use of funds by a contractor or supplier for any purpose other than payment of an account for materials or labor used to improve property of the one making payment, is prima facie evidence of intent to defraud. Alside Supply Center v. Vinson, 802 S.W.2d 632, 1990 Tenn. App. LEXIS 682 (Tenn. App. 1990).

2. Constitutionality.

Prima facie presumption of intent to defraud as provided herein does not violate provisions of Tenn. Const., art. I, § 9, relative to trial by impartial jury with presumption of innocence. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

3. Construction.

Section 66-11-138 must be read in conjunction with this section. Daugherty v. State, 216 Tenn. 666, 393 S.W.2d 739, 1965 Tenn. LEXIS 612 (1965), appeal dismissed, Daugherty v. Tennessee, 384 U.S. 435, 86 S. Ct. 1601, 16 L. Ed. 2d 671, 1966 U.S. LEXIS 1416 (1966).

4. Bankruptcy Proceedings.

This section provides that the mere use alone of proceeds by a contractor for any purpose other than payment of labor and materials on the project constitutes prima facie evidence of intent to defraud; to the extent that this statutory presumption conflicts with federal law, it cannot be considered in the context of determining dischargeability in bankruptcy. In re Mettetal, 41 B.R. 80, 1984 B.R. LEXIS 5648 (Bankr. E.D. Tenn. 1984).

Although T.C.A. § 66-11-140 created a prima facie case of intent to defraud where debtors (contractors) used creditors'  retainer to pay other bills and personal expenses, that did not suffice for a finding of nondischargeability under the Bankruptcy Code. However, facts that supported a finding of a false representation or false pretenses by debtors also supported a finding of fraudulent intent, as debtor wife knew when she reassured creditors that the retainer would be set up in house for the creditors'  project that her statement was not true because they never did business that way. Poole v. Batson (In re Batson), 568 B.R. 281, 2017 Bankr. LEXIS 549 (Bankr. M.D. Tenn. Feb. 28, 2017).

5. Evidence.

Whether defendant's disavowal of intent is sufficient to overcome state's proof is a question of fact for the jury. State v. Patterson, 755 S.W.2d 815, 1984 Tenn. Crim. App. LEXIS 2848 (Tenn. Crim. App. 1984).

Subcontractor was denied damages because the evidence did not preponderate against the finding that the general contractor did not intend to defraud the subcontractor as the balance of the general contractor's operating account, following fund transfers, exceeded the amount of any payment that was allegedly owed to the subcontractor during the vast majority of the life of the subcontract. Nat'l Door & Hardware Installers v. Mirsaidi, — S.W.3d —, 2014 Tenn. App. LEXIS 389 (Tenn. Ct. App. June 30, 2014).

6. Notice.

Even if a supplier does not have actual knowledge of the source of funds offered as payment by a contractor, the supplier may still be required to properly allocate the payments if it has knowledge of facts from which it reasonably should know the source. Alside Supply Center v. Vinson, 802 S.W.2d 632, 1990 Tenn. App. LEXIS 682 (Tenn. App. 1990).

When a contractor uses progress payments to pay his supplier, whom he owes for other materials as well as for materials used on the job generating those payments, then those payments must be applied to the debts for materials used on that job, because the contractor owes a duty to the owner to pay that debt. The result does not depend on whether the supplier knew or had reason to know the source of the money used as payment. Alside Supply Center v. Vinson, 802 S.W.2d 632, 1990 Tenn. App. LEXIS 682 (Tenn. App. 1990).

66-11-141. Well-drilling lien.

  1. There is created a lien against the tract of land, on which any person, firm or corporation has drilled a well by contract with the owners of the land or their duly authorized agent, for all labor, materials and equipment used or furnished by the driller of the well, including any pump, apparatus or other fixtures attached to the well, installed by the driller.
  2. The lien shall remain against the land for a period of two (2) years after the completion of the well or after the furnishing of any pump or apparatus attached to the well, unless sooner discharged by full payment.
  3. The lien may be enforced by attachment of the land in a proceeding brought in any court of competent jurisdiction prior to the expiration of the lien, and the land may be sold in satisfaction of the unpaid indebtedness owing to the driller.
  4. The rights of the lienor under this section shall be subject to the terms of § 66-11-112.

Acts 1949, ch. 267, §§ 1-3; mod. C. Supp. 1950, § 8028.1 (Williams, §§ 7959.1-7959.3); T.C.A. (orig. ed.), § 64-1143; Acts 2007, ch. 189, § 40.

Law Reviews.

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 193 (1978).

Collateral References.

Assertion of statutory mechanics' or materialmen's lien against oil and gas produced or against proceeds attributable to oil and gas sold. 59 A.L.R.3d 278.

Casings of oil and gas well as subject to mechanic's lien. 39 A.L.R. 1260.

Lien for digging well. 55 A.L.R. 1562, 109 A.L.R. 395.

Oil and gas, right or interest subject to statutory lien for labor or material in developing property for. 122 A.L.R. 1182.

Wells as within Mechanics' Lien Law descriptive of improvement. 92 A.L.R. 753.

66-11-142. Bond to indemnify against recorded lien — Recording bond — Recording of contractor's payment bond.

  1. If a lien, other than a lien granted in a written contract, is fixed or is attempted to be fixed by a recorded instrument under this chapter, any person may record a bond to indemnify against the lien. The bond shall be recorded with the register of deeds of the county in which the lien was recorded. The bond shall be for the amount of the lien claimed and with sufficient corporate surety authorized and admitted to do business in the state and licensed by the state to execute bonds as surety, and the bond shall be conditioned upon the obligor or obligors on the bond satisfying any judgment that may be rendered in favor of the person asserting the lien. The bond shall state the book and page or other reference and the office where the lien is of record. The recording by the register of a bond to indemnify against a lien shall operate as a discharge of the lien. After recording the bond, the register shall return the original bond to the person providing the bond. The register shall index the recording of the bond to indemnify against the lien in the same manner as a release of lien. The person asserting the lien may make the obligors on the bond parties to any proceeding in which the person files a complaint, petition, or civil warrant to enforce the claim, and any judgment recovered may be against all or any of the obligors on the bond.
    1. When a prime contractor or remote contractor has provided a valid payment bond for the benefit of potential lien claimants, a copy of that bond may be recorded, in lieu of the recording of another bond, to discharge a lien asserted by the lien claimants. A copy of the bond may be recorded with the register of deeds in lieu of the bond provided in subsection (a) to discharge such a lien. Upon recording with the register of deeds, the prime contractor, remote contractor, or owner shall notify the surety executing the bond, and the lien on the property shall be discharged. The person asserting the lien may make the obligors on the bond parties to any proceeding in which the person files a complaint, petition, or civil warrant to enforce the claim, and any judgment recovered may be against all or any of the obligors on the bond.
    2. The bond recorded pursuant to this subsection (b) shall:
      1. Be in a penal sum at least equal to the total of the original contract amount;
      2. Be in favor of the owner;
      3. Be executed by:
        1. The original prime contractor or remote contractor as principal; and
        2. A sufficient corporate surety authorized and admitted to do business in this state and licensed by this state to execute bonds as surety; and
      4. Provide for payment of the lien claimant, whether the lien claimant was employed or contracted with by the person who originally contracted with the owner of the premises or by a remote contractor.
  2. The register of deeds may record any bond recorded under this section and return the original to the person providing the bond.

Acts 1974, ch. 580, § 1; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-1144; Acts 1990, ch. 854, § 7; 1994, ch. 664, § 1; 1995, ch. 30, §§ 4-6; 2007, ch. 189, § 41; 2015, ch. 117, § 2; 2020, ch. 749, § 11.

Compiler's Notes. Acts 2015, ch. 117, § 3 provided that the act shall apply to any lien that attaches on or after April 10, 2015.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2015 amendment, in (b), deleted “at the contractor’s option” following “A copy of the bond may” and added the last sentence in (1); deleted former (2)(C), which read: “have the written approval of the owner endorsed on it”; redesignated former (2)(D) and (E) as (2)(C) and (D) and deleted former (2)(F), which read:  “Provide for payment for extras, as defined in § 66-11-101, not exceeding fifteen percent (15%) of the prime contractor's contract price, if and to the extent the lien claimant is claiming extras.”

The 2020 amendment substituted “parties to any proceeding in which the person files a complaint, petition, or civil warrant” for “parties to any action” in the last sentence of (a) and (b)(1); in the third sentence  of (b)(1), substituted “the prime contractor, remote contractor, or owner shall notify”  and inserted “prime contractor or remote” in (b)(2)(C)(i).

Effective Dates. Acts 2015, ch. 117, § 3. April 10, 2015.

Acts 2020, ch. 749, § 42. July 1, 2020.

Law Reviews.

Attorney vs. Client: Lien Rights and Remedies in Tennessee (Margret H. Tucker), 7 Mem. St. U.L. Rev. 435 (1977).

NOTES TO DECISIONS

1. Suit to Enforce a Lien.

Where the trial court rendered a final judgment in a subcontractor's suit for payment of work performed on a hotel, a second suit for injunctive relief on the performance bond was barred by res judicata; bank's filing of the performance bond pursuant to T.C.A. § 66-11-142 was simply one more step in the series of closely related and interconnected events and transactions giving rise to the first lawsuit. Smith Mech. Contrs., Inc. v. Premier Hotel Dev. Group, 210 S.W.3d 557, 2006 Tenn. App. LEXIS 468 (Tenn. Ct. App. 2006), appeal denied, — S.W.3d —, 2006 Tenn. LEXIS 1166 (Tenn. Dec. 18, 2006).

66-11-143. Protection from unrecorded lien claims — Notice of completion — Expiration of lien rights — Form of notice of completion.

  1. In order to be protected from lien claims that have not previously been recorded, as provided in § 66-11-111 or § 66-11-112, the owner or purchaser of improved real property or their agent or attorney may, upon the completion of the improvement, record in the office of the register of deeds in the county where the real property or any affected part of the real property is located a notice of completion, or the owner or purchaser may require a person or organization with whom the owner or purchaser has contracted for the improvement to do so upon the completion of the improvement, and the owner or purchaser of improved real property or any other authorized party shall simultaneously serve a copy of any notice of completion recorded with the register of deeds on the prime contractor; provided, however, that no copy of the notice of completion is required to be served on any prime contractor when the owner, or an entity controlled by the owner, also acts as the general contractor, as defined in § 66-11-146(b)(1), in furtherance of the improvement to the property. If a prime contractor is entitled to be served with a copy of any notice of completion recorded with the register of deeds, then the lien rights of the prime contractor not so served a copy shall not be affected by the notice of completion.
  2. The notice of completion shall contain the following:
    1. The legal name of the owner or owners of the real property;
    2. The name of the prime contractor or prime contractors;
    3. The location and description of the real property;
    4. Date of the completion of the improvement;
    5. A statement that a transfer of ownership of all or a part of the real property or an interest in the real property and encumbrance on the real property, or a settlement of the claims of parties entitled to the benefits of this part, will take place not less than ten (10) days after the date of the recording of the notice of completion; provided, that the ten-day expiration for lien claimants shall only apply to contracts for improvement to or on real property, for one-family, two-family, three-family and four-family residential units. On all other contracts for improvement to or on real property, the expiration time for lien claimants shall be thirty (30) days after the date of the recording of the notice of completion in the register's office;
    6. The name and address of the person, firm, or organization on which parties entitled to the benefits of this chapter may serve notice of claim;
    7. Acknowledgment by the person filing the notice, or by that person's agent or attorney; and
    8. The name and address of the preparer of the instrument in compliance with § 66-24-115.
  3. The register of deeds shall make a permanent record of all notices of completion filed in the office of the register and the records shall be available for public examination. The register of deeds shall be entitled to the fees, provided in § 8-21-1001, for the register's services in receiving and maintaining notices of completion required in this section.
  4. If a remote contractor has served a required notice of nonpayment pursuant to § 66-11-145, then any party recording a notice of completion shall simultaneously serve a copy of the notice of completion on the remote contractor. The remote contractor shall have thirty (30) days from the date of the recording of the notice of completion to serve a written notice in response to the notice of completion in accordance with subsection (e). The lien rights of a remote contractor that has not been served a copy, shall not be affected by the notice of completion.
    1. Any prime contractor or remote contractor claiming a lien under this chapter on the property described in the notice of completion, who has not previously registered the person's contract as provided in § 66-11-111 or registered a sworn statement as provided in § 66-11-112 and served a copy of the registration to the owner, shall serve written notice, addressed to the person, firm or organization and at the address designated in the notice of completion for receiving notice of claim, stating the amount of the claim and certifying that the claim does not include any amount owed to the claimant on any other job or under any other contract.
      1. For improvements to or on real property for one-family, two-family, three-family and four-family residential units, the written notice shall be served not more than ten (10) days from the date of the recording of the notice of completion in the register's office, and if notice is not served within that time, the lien rights of the claimant shall expire.
      2. For all other contracts for improvements to or on real property, the written notice shall be served not more than thirty (30) days from the date of the recording of the notice of completion in the register's office, and if notice is not served within that time, the lien rights of the claimant shall expire.
  5. Any notice of completion recorded as provided in this section before the completion of the improvement or the demolition is void and of no effect whatsoever.
  6. The notice of completion may be in substantially the following form:

    This Instrument prepared by:

    Name

    Address

    NOTICE OF COMPLETION

    Legal name of owner or owners of the real property:

    Names of all applicable prime contractors:

    The location and description of the real property:

    Date of completion of the entire improvement:

    A transfer of ownership of all or part of the real property or an interest therein and encumbrance thereon or a settlement of the claims of parties entitled to the benefits of Title 66, Chapter 11 of the Tennessee Code Annotated will take place not less than ten (10) days after the date of the recording of this Notice of Completion; provided, that the ten-day expiration for lien claimants shall only apply to contracts for improvements to or on real property for one-family, two-family, three-family, and four-family residential units. On all other contracts for improvement to or on real property, the expiration time for lien claimants shall be thirty (30) days after the date of the recording of this Notice of Completion. The name and address of the person, firm, or organization on which parties entitled to the benefits of Title 66, Chapter 11, may serve notice is as follows:

    Name:

    Street Address:

    City:

    State:  Zip Code:

    Dated this the  day of  , 20

    Signature

    (Check One)

    , Owner

    , Purchaser

    , Prime Contractor

    [Notary Acknowledgment]

Acts 1975, ch. 307, §§ 1-3; T.C.A., §§ 64-1145 — 64-1147; Acts 1985, ch. 83, § 1; 1990, ch. 854, § 6; 2007, ch. 189, § 42; 2008, ch. 811, §§ 1-4.

Cross-References. Notice of nonpayment, § 66-11-145.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-708, 8-709.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 14, 15.

Law Reviews.

1990 Legislation Affecting Tennessee Real Estate Practice (William R. Bruce), 26 No. 3, Tenn. B.J. 18 (1990).

NOTES TO DECISIONS

1. Purpose.

The evident purposes of subsection (d) were: (1) to provide for timely notice to the owner(s) and purchaser(s) of improved real estate of unregistered claims against it and to fix a time period in which the owner(s) and purchaser(s) would receive notices of such claims; and (2) to extinguish claims of which the owner(s) and purchaser(s) received no notice within the time period so fixed. In re Gasteiger, 471 F. Supp. 13, 1977 U.S. Dist. LEXIS 14324 (E.D. Tenn. 1977).

2. Construction.

T.C.A. § 66-11-143 provides a drastic procedure whereby a bona fide furnisher of labor or materials may be deprived of his statutory lien by the simple device of recording a certificate of completion; it should be construed strictly to avoid its abuse. Davis v. Smith, 650 S.W.2d 47, 1983 Tenn. App. LEXIS 557 (Tenn. Ct. App. 1983).

“Substantial completion” does not satisfy the requirements of T.C.A. § 66-11-143. Davis v. Smith, 650 S.W.2d 47, 1983 Tenn. App. LEXIS 557 (Tenn. Ct. App. 1983).

3. Application.

The statute allows of no exception where the person, firm, or corporation to which parties entitled to the benefits of this chapter, may send notice of such claims is also a claimant. In re Gasteiger, 471 F. Supp. 13, 1977 U.S. Dist. LEXIS 14324 (E.D. Tenn. 1977).

4. Invalid Notice of Completion.

Notice of completion was invalid where project was not complete and where signer of notice falsely represented that he was the general contractor. In re Just for Fun of It, Inc., 7 B.R. 166, 1980 Bankr. LEXIS 4487 (Bankr. E.D. Tenn. 1980).

5. Sworn Statement.

The sworn statement referred to in T.C.A. § 66-11-143 can be included in the same statement as the acknowledgment referred to in T.C.A. § 66-11-111. In re Just for Fun of It, Inc., 7 B.R. 166, 1980 Bankr. LEXIS 4487 (Bankr. E.D. Tenn. 1980).

6. Unregistered Mechanic's Lien.

The express reference to T.C.A. § 66-11-117 in T.C.A. § 66-11-143 makes the holder of an unregistered mechanic's lien subject to the ten-day period. Post-Tensioned Sys. v. Collins & Hobbs, Inc., 640 S.W.2d 576, 1982 Tenn. App. LEXIS 415 (Tenn. Ct. App. 1982).

The lien of a supplier of materials for a new house, filed within 90 days after completion, was not extinguished by a conveyance of the property to purchasers before notice of the lien was filed, since the purchasers did not avail themselves of the provision for protection from unregistered liens. Owen Lumber & Millwork, Inc. v. National Equity Corp., 940 S.W.2d 66, 1996 Tenn. App. LEXIS 486 (Tenn. Ct. App. 1996).

7. Acknowledgment Required.

A notice of completion cannot be considered legally registered without an acknowledgment. First Nat'l Bank v. Prairie Corp., 547 F. Supp. 14, 1982 U.S. Dist. LEXIS 14720 (E.D. Tenn. 1982).

8. Attempt to Revive Lien.

There is no statutory authority for reviving a lien upon the filing of another notice of completion. Post-Tensioned Sys. v. Collins & Hobbs, Inc., 640 S.W.2d 576, 1982 Tenn. App. LEXIS 415 (Tenn. Ct. App. 1982).

9. Proof of Completion.

A completion notice is only prima facie evidence of the truth of the statements therein, including the completion date, and other evidence is allowed to prove that the work was actually completed on another date. In re Johnson, 25 B.R. 889, 1982 Bankr. LEXIS 5272 (Bankr. E.D. Tenn. 1982).

The occupation of part of a building is not conclusive of the completion of all of the building. Davis v. Smith, 650 S.W.2d 47, 1983 Tenn. App. LEXIS 557 (Tenn. Ct. App. 1983).

10. Filing Notice of Claim.

The ten-day written notice requirement runs from and after the date of the filing of the notice of completion in the register's office and not the date of completion stated in the notice of completion. Noland Co. v. Crye, 726 S.W.2d 531, 1986 Tenn. App. LEXIS 3457 (Tenn. Ct. App. 1986).

66-11-144. [Transferred.]

Compiler's Notes. Former § 66-11-144 (Acts 1975, ch. 345, §§ 1-4; T.C.A., §§ 64-1148 — 64-1151; Acts 1985, ch. 340, §§ 1, 2; 1986, ch. 551, § 9; 2007, ch. 189, § 43; 2007, ch. 201, §§ 1, 2), concerning the retention of a portion of a contract price in escrow, was transferred to § 66-34-104 by Acts 2008, ch. 804, § 2, effective July 1, 2008.

66-11-145. Notice of nonpayment — Form of notice.

  1. Every remote contractor with respect to an improvement, except one-family, two-family, three-family and four-family residential units, shall serve, within ninety (90) days of the last day of each month within which work or labor was provided or materials, services, equipment, or machinery furnished and for which the remote contractor intends to claim a lien under this chapter, a notice of nonpayment for the work, labor, materials, services, machinery, or equipment to the owner and prime contractor in contractual privity with the remote contractor if its account is, in fact, unpaid. The notice shall contain:
    1. The name of the remote contractor and the address to which the owner and the prime contractor in contractual relation with the remote contractor may send communications to the remote contractor;
    2. A general description of the work, labor, materials, services, equipment, or machinery provided;
    3. The amount owed as of the date of the notice;
    4. A statement of the last date the claimant performed work and/or provided labor or materials, services, equipment, or machinery in connection with the improvements; and
    5. A description sufficient to identify the real property against which a lien may be claimed.
  2. A remote contractor who fails to provide the notice of nonpayment in compliance with this section shall have no right to claim a lien under this chapter, except this section shall not apply to a certain amount or percentage of the contract amount retained to guarantee performance of the remote contractor.
  3. A notice of nonpayment provided in accordance with this section shall not be considered notice required by § 66-11-115.
  4. The notice of nonpayment may be in substantially the following form:

    NOTICE OF NONPAYMENT TO:  [Owner] [Contractor contracting w/ Owner] Pursuant to Tennessee Code Annotated, § 66-11-145, notice is hereby given that   [Lienor] has not been paid for certain labor, materials, services, equipment, or machinery it supplied in the   [description of work] of the   [description of project], located at   [description of property]. The amount presently due and owing is $ . The last date labor, materials, services, equipment, or machinery were provided in connection with the improvements was  [date]. You may send any communications regarding this matter to the following name and address:  Lienor Dated:

    Click to view NOTICE OF NONPAYMENT

Acts 1990, ch. 854, § 1; 1996, ch. 884, §§ 1, 2; 2002, ch. 568, §§ 1, 2; 2007, ch. 189, § 44.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-711.

Law Reviews.

1996 Real Estate Legislation: What You Don't Know Can  Hurt You (William R. Bruce), 32 No. 6 Tenn. B.J. 12 (1996).

Attorney General Opinions. Constitutionality of retroactive application of an amendment concerning requirements for perfecting liens, OAG 96-051, 1996 Tenn. AG LEXIS 56 (3/19/96).

NOTES TO DECISIONS

1. Retroactive Application of Section.

Retroactive application of notice of nonpayment provisions, enacted in an amendment to T.C.A. § 66-11-115 and this section, to a materialman who already had a vested right to a materialman's lien for goods under T.C.A. § 66-11-115, and retroactive application of which effectively abolished that right, was not procedural and was impermissible. Standard Pipe & Supply, Inc. v. First City Serv. Corp., 833 S.W.2d 510, 1992 Tenn. App. LEXIS 195 (Tenn. Ct. App. 1992), appeal denied, Standard Pipe & Supply, Inc. v. First City Service Corp., 1992 Tenn. LEXIS 384 (Tenn. May 26, 1992).

2. Sufficiency of Notice.

Subcontractor's lien notices were sufficient, as required by T.C.A. § 66-11-145, because a home builder was both the owner and general contractor of a project. Williamson County Ready Mix, Inc. v. Pulte Homes Tenn. Ltd. P'ship, — S.W.3d —, 2008 Tenn. App. LEXIS 800 (Tenn. Ct. App. Dec. 15, 2008).

Trial court properly granted summary judgment in favor of a project owner, a prime contractor, remote contractors, and an employer in a subcontractor's action to enforce a mechanic's lien because subsection (a) required the subcontract to notify both the owner and the prime contractor of the project of nonpayment; as the entity in charge of the overall project, the prime contractor had to be given the opportunity to resolve the subcontractor's claim of nonpayment by the employer. Diaz Constr. v. Indus. Dev. Bd. of the Metro. Gov't of Nashville & Davidson County, — S.W.3d —, 2015 Tenn. App. LEXIS 107 (Tenn. Ct. App. Mar. 6, 2015).

Subcontractor did not substantially comply with the notice requirements because it failed to notify the prime contractor of its claim; notification of the proper parties goes right to the heart of the purpose of the statute, which is to give the owner and prime contractor an opportunity to resolve payment issues in a timely fashion. Diaz Constr. v. Indus. Dev. Bd. of the Metro. Gov't of Nashville & Davidson County, — S.W.3d —, 2015 Tenn. App. LEXIS 107 (Tenn. Ct. App. Mar. 6, 2015).

3. Construction.

Only reasonable interpretation of the statute is that the legislature intended remote contractors to give notice to the prime contractor upstream from them. Diaz Constr. v. Indus. Dev. Bd. of the Metro. Gov't of Nashville & Davidson County, — S.W.3d —, 2015 Tenn. App. LEXIS 107 (Tenn. Ct. App. Mar. 6, 2015).

From the use of the words “in direct privity of contract” in one section of the statute and “in contractual privity” in another section, it is fair to assume the legislature did not intend the two phrases to have the same meaning. Diaz Constr. v. Indus. Dev. Bd. of the Metro. Gov't of Nashville & Davidson County, — S.W.3d —, 2015 Tenn. App. LEXIS 107 (Tenn. Ct. App. Mar. 6, 2015).

66-11-146. “Residential real property” defined — “General contractor” defined — Liens on residential real property.

    1. As used in this subsection (a), “residential real property” means a building consisting of one (1) dwelling unit in which the owner of the real property intends to reside or resides as the owner's principal place of residence, including improvements to or on the parcel of property where the residential building is located, and also means a building consisting of two (2), three (3) or four (4) dwelling units where the owner of the real property intends to reside or resides in one (1) of the units as the owner's principal place of residence, including improvements to or on the parcel of property where the residential building is located.
    2. Notwithstanding any other law to the contrary, except as provided in subsection (b), on contracts to improve residential real property, a lien or right of lien on the property shall exist only in favor of a prime contractor.
    1. As used in this subsection (b):
      1. “Residential real property” means improvements to or on a parcel of property upon which a building is constructed or is to be constructed consisting of one (1) dwelling unit intended as the principal place of residence of a person or family; and
      2. “General contractor” means the person responsible for the supervision or performance of substantially all of the work, labor, and the furnishing of materials in furtherance of the improvement to the property.
    2. When the owner of residential real property and the general contractor are one and the same person, or a person controls entities owning the property and a general contracting business, a lien or right of lien upon the property shall exist only in favor of the lienors in contractual privity with the owner or general contractor.

Acts 1990, ch. 735, § 1; 1990, ch. 854, § 8; 1991, ch. 280, § 1; 2007, ch. 189, § 45; 2008, ch. 811, §§ 5, 6.

Cross-References. Mechanics and materialmen's liens, residential real property, right of lien, § 66-11-203.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-701.

NOTES TO DECISIONS

1. Unregistered Liens.

The lien of a supplier of materials for a new house, filed within 90 days after completion, was not extinguished by a conveyance of the property to purchasers before notice of the lien was filed, since the purchasers did not avail themselves of the provision for protection from unregistered liens. Owen Lumber & Millwork, Inc. v. National Equity Corp., 940 S.W.2d 66, 1996 Tenn. App. LEXIS 486 (Tenn. Ct. App. 1996).

2. Residential Real Property Status.

Since record owners did not intend to use property as their residence, and subsequently conveyed the property to another person, the property was not residential real property; thus, the subsequent owner was not immune from materialman's lien. C & C Aluminum Builders Supply v. Rynd, 4 S.W.3d 191, 1999 Tenn. App. LEXIS 331 (Tenn. Ct. App. 1999).

66-11-147. Liens on gas, oil or other mineral leaseholds.

  1. Any person who performs labor or furnishes materials, supplies, fixtures, machinery or other things of value to a lessee holding or owning a leasehold, or any right conferred by a lease, relating to oil, gas or other minerals, in the development or improvement of the leasehold, by contract with or by the written consent of the owner or the agent or representative of the owner of the leasehold, shall have a lien on the leasehold or the entire interest of the lessee, including oil or gas wells, machinery and equipment, to secure the payment for the labor or things furnished. If the labor or things are furnished at the written request or by written consent of any prime contractor or remote contractor, or the agent of either, the lien shall be for the benefit of whomever furnishes any of the labor or things mentioned. The lien provided for in this section shall be effective against the leasehold, or the entire interest of the lessee, including all improvements belonging to the lessee.
  2. The lien shall relate to and take effect from the time of the delivery of the materials, supplies, fixtures, or machinery, or from the date of furnishing of any labor.
  3. If unpaid, the lien shall expire and be of no effect after ninety (90) days, unless the person furnishing the labor, materials, or supplies, files with the register's office in the county in which the leasehold is located, the sworn statement as provided in § 66-11-112. A copy of the notice shall also be served to the owner of the property and the holder of the leasehold.
  4. A lien provided in this section shall have precedence over all other subsequent liens or conveyances after the time of attachment; provided, that the sworn statement is filed within the ninety-day period provided in this section.
  5. Section 66-11-120 shall apply to this lien.

Acts 2006, ch. 654, § 1; 2007, ch. 189, § 46.

66-11-148. Construction of chapter — Jurisdiction of courts to enforce — Errors and omissions.

  1. This chapter is to be construed and applied liberally to secure the beneficial results, intents, and purposes of the chapter.
  2. Substantial compliance with this chapter is sufficient for the validity of liens arising under this chapter and to give jurisdiction to the court to enforce the liens.
  3. Any document required or permitted to be served, recorded or filed by this chapter that substantially satisfies the applicable requirements of this chapter is effective even if it has nonprejudicial errors or omissions.

Acts 2007, ch. 189, § 47.

NOTES TO DECISIONS

1. Construction and Interpretation.

Trial court properly applied revised T.C.A. § 66-11-148 to a claim that arose prior to the revision, liberally construing the mechanic's and materialmen's liens statutes to permit a contractor to amend its complaint in order to cure procedural defects. A later lienholder's rights were not retroactively impaired by the liberal application of the statutes. Tri Am Constr., Inc. v. J & V Dev., Inc., 415 S.W.3d 242, 2011 Tenn. App. LEXIS 466 (Tenn. Ct. App. Aug. 30, 2011), appeal denied, — S.W.3d —, 2012 Tenn. LEXIS 109 (Tenn. Feb. 15, 2012).

2. Substantial Compliance.

Subcontractor did not substantially comply with the notice requirements because it failed to notify the prime contractor of its claim. Diaz Constr. v. Indus. Dev. Bd. of the Metro. Gov't of Nashville & Davidson County, — S.W.3d —, 2015 Tenn. App. LEXIS 107 (Tenn. Ct. App. Mar. 6, 2015).

66-11-149. Presumption of correctness of information on building permit — Service on listed agents or owners — Method of service — Presumption of complete service.

  1. For purposes of § 66-11-145, the name of any owner, the owner's agent, any prime contractor, any remote contractor, or any other person, their addresses, and the real property description stated in a building permit authorizing the improvement shall be presumed to be correct and, in the case of property description, sufficient to identify the real property.
  2. If one (1) or more agents are specified on the building permit, service on a listed agent shall be deemed to be service on all of the agent's principals, including those who have not separately listed an agent. If one (1) or more owners are specified on the building permit, service on the listed owner or owners shall be deemed to be service on all owners, including those not listed.
  3. For the purposes of this chapter, except as provided in § 66-11-108, any notice or other document required or permitted to be served shall be served by one (1) or more of the following means:
    1. Registered or certified mail, return receipt requested;
    2. Hand delivery, evidenced by a sworn statement, properly notarized, confirming delivery; or
    3. Any other commercial delivery service that provides written confirmation of delivery.
  4. For purposes of this chapter, there is a rebuttable presumption that service is complete:
    1. Upon receipt by the party being served by hand delivery;
    2. Within three (3) business days of mailing if served by registered or certified mail, return receipt requested; or
    3. One (1) business day after commercial, overnight delivery if served by that means.

Acts 2007, ch. 189, § 48; 2008, ch. 811, § 7.

Cross-References. Certified mail in lieu of registered mail, § 1-3-111.

66-11-150. Prohibited liens.

Notwithstanding any law in this chapter or any other law to the contrary, no lien, otherwise authorized pursuant to this chapter, shall be available on residential real property, as that term is defined by § 66-11-146(b)(1)(A), to any person, firm or corporation that performs residential construction, including home improvement as defined by § 62-6-501(4), if:

  1. The person, firm or corporation is not licensed pursuant to title 62, chapter 6; and
  2. The jurisdiction in which the work is performed requires such person, firm or corporation to be licensed in accordance with such chapter.

Acts 2010, ch. 749, § 1.

Compiler's Notes. Acts 2010, ch. 749, § 2, provided that the act, which enacted the section, shall apply to any liens filed for residential construction and home improvement services performed on or after July 1, 2010.

Part 2
Truth in Construction and Consumer Protection Act of 1975

66-11-201. Short title.

This part shall be known and may be cited as the “Truth in Construction and Consumer Protection Act of 1975.”

Acts 1975, ch. 364, § 1; T.C.A., § 64-1152.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Lis Pendens, § 6.

Law Reviews.

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 193 (1979).

66-11-202. Part definitions.

As used in this part, unless the context or subject matter indicates another meaning, the words and phrases defined in § 66-11-101, as amended and as may from time to time be amended, have the same meaning as set out in that section and such § 66-11-101 as amended and as may from time to time be amended is incorporated in this part by reference.

Acts 1975, ch. 364, § 2; T.C.A., § 64-1153.

Law Reviews.

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 193 (1979).

66-11-203. Notice to owner.

Any contractor who is about to enter into a contract, either written or oral, for improving residential real property, as that term is defined by § 66-11-146, with the owner or owners thereof shall, prior to commencing the improvement of the residential real property or making of the contract, deliver, by registered mail or otherwise, to the owner or owners of the residential real property to be improved written notice in substantially the following form:

Delivered this  day of  , 20 , by  , Contractor.

The above-captioned contractor hereby gives notice to the owner of the property to be improved, that the contractor is about to begin improving the property according to the terms and conditions of the contract and that under the provisions of the state law (§§ 66-11-10166-11-141) there shall be a lien upon the real property and building for the improvements made in favor of the above-mentioned contractor who does the work or furnishes the materials for such improvements for a duration of one (1) year after the work is finished or materials furnished.

Contractor

Acts 1975, ch. 364, § 3; 1977, ch. 456, § 1; T.C.A., § 64-1154; Acts 1994, ch. 587, § 1; 2020, ch. 749, § 12.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment, in the first paragraph, inserted “residential” three times, and “, as that term is defined by § 66-11-146,”; redesignated former (1) to the end of the present third paragraph, following “state law (§§ 66-11-101 - 66-11-141)”; in the present third paragraph, inserted “above-mentioned” and deleted “, mechanic, laborer, founder or machinist,” preceding “who does the work”; and deleted former (2) and (3) which read: “(2)  Except as modified by § 66-11-146, every person contracted with or employed to work on the buildings or to furnish materials for the same with the above-named contractor shall have a lien on the property for that person's work or material; provided, that such person notify the owner in writing within ninety (90) days after the completion of the improvement, which lien will continue for ninety (90) days after such notice; (3) Except as modified by § 66-11-146, these liens can be enforced even though the contractor has been paid in full if the contractor has not paid the persons who furnished the labor or materials for the improvement.”

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-701.

Law Reviews.

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 193 (1979).

66-11-204. Rejection of contracts.

An owner of residential real property may reject a contract by notifying the contractor by written notice by registered mail within three (3) days after receipt of the notice required in § 66-11-203; otherwise the contract is affirmed.

Acts 1975, ch. 364, § 4; 1977, ch. 456, § 2; T.C.A., § 64-1155; Acts 2020, ch. 749, § 13.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment inserted “of residential real property”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Law Reviews.

Mechanics' Liens in Tennessee — Recent Developments, 6 Mem. St. U.L. Rev. 519 (1976).

66-11-205. Contractor's notice to owner that all liens have been paid — Guarantee — Form.

Upon completion of the contract or improvement and upon receipt of the contract price, the prime contractor shall deliver by registered mail or otherwise to the owner or owners of the real property a sworn affidavit and receipt substantially in the following form:

State of Tennessee

County of

On this   day of  , 20 , before me personally appeared  (if a corporation use “  President (or other officer) of (Corporate Name) a corporation”), prime contractor, to me personally known, who being duly sworn by oath, did say that all of the persons, firms, and corporations, including the prime contractor and all remote contractors and laborers, who have furnished services, labor, or materials according to the plans or specifications, or extra items used in the construction or repair of buildings and improvements on the real estate hereinafter described, have been paid in full or will be paid in full no later than ten (10) days from the date a bill is rendered for such services, labor, or materials and that such work has been fully completed and accepted by the owner, and further that such owner has paid the contract price in full, the receipt of which is hereby acknowledged. Affiant further says that no claims have been made to affiant by, nor is any suit pending on behalf of the prime contractor or any remote contractors or laborers, and further that no chattel mortgages or conditional bills of sale have been given or are now outstanding as to any materials, appliances, fixtures, or furnishings placed upon or installed in the aforementioned premises. Affiant as a party does for a valuable consideration hereby agree and guarantee to hold the owner of the real estate, the owner's successors, heirs and assigns, harmless against any lien, claim, or suit by any remote contractor or laborer and against chattel mortgages or conditional bills of sale in conjunction with the construction of such buildings or improvements on such real estate.

The real estate and improvements referred to herein are situated in the County of  , State of Tennessee, and are described as follows: (give street address)

Prime Contractor

Sworn to and subscribed before me

on the date above first written.

Notary Public

My Commission Expires:

Acts 1975, ch. 364, § 5; 1977, ch. 456, § 3; T.C.A., § 64-1156; Acts 2020, ch. 749, § 14.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “prime contractor” for “contractor” three times; inserted “substantially” in the first paragraph; and in the form, substituted “including the prime contractor and all remote contractors and laborers,” for “including general contractors and all subcontractors,” in the first sentence, in the second sentence, substituted “the prime contractor or any remote contractors or laborers” for “any contractors, subcontractors, laborers or materialmen” and substituted “any remote contractor or laborer” for “any general contractor, subcontractor, mechanic or materialman” in the third sentence.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-707.

Law Reviews.

Mechanics' Lien in Tennessee — Recent Developments, 6 Mem. St. U.L. Rev. 519 (1976).

66-11-206. Noncompliance by contractor — Misdemeanor — Penalties — Owner remedies.

  1. In the event that any materialmen's liens or mechanics' liens are perfected, filed or enforced under part 1 of this chapter against any real estate for transactions covered under §§ 66-11-203 and 66-11-205 and the contractor has not complied with §§ 66-11-203 and 66-11-205 or if having technically complied with this part has willfully, knowingly and unlawfully falsified any statements or fraudulently obtained any permission, the contractor commits a Class B misdemeanor.
  2. Nothing contained in this part shall abrogate the right of any person who is materially or personally damaged or injured by any contract covered by this part to seek such person's remedies against the responsible person in the courts.
  3. Noncompliance with §§ 66-11-203 and 66-11-205 shall in no way affect the lien rights of a contractor, actually performing the work and having a contract directly with an owner, or the owner's agent, to enforce a lien as provided in § 66-11-102.

Acts 1975, ch. 364, § 6; 1977, ch. 456, § 4; T.C.A., § 64-1157; Acts 1982, ch. 941, §§ 1, 2; 1989, ch. 591, § 112; 2020, ch. 749, § 15.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “or the owner’s agent” for “or the contractor’s agent” in (c).

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Penalty for Class B misdemeanor, § 40-35-111.

Law Reviews.

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 193 (1979).

Collateral References.

Validity and construction of statute providing criminal penalties for failure of contractor who has received payment from owner to pay laborers or materialmen. 78 A.L.R.3d 563.

66-11-207. Effect on other laws.

This part shall not operate to repeal or affect any of the laws of the state relating to mechanics' and materialmen's liens, specifically part 1 of this chapter, but shall be held and construed as ancillary and supplemental thereto.

Acts 1975, ch. 364, § 7; T.C.A., § 64-1158.

Law Reviews.

Mechanics' Liens in Tennessee — Recent Developments, 6 Mem. St. U.L. Rev. 519 (1976).

66-11-208. Real estate improvement contracts — Certain venue provisions prohibited.

  1. Except as provided in subsection (b), a provision in any contract, subcontract or purchase order for the improvement of real property in this state is void and against public policy if it makes the contract, subcontract or purchase order subject to the substantive laws of another state or mandates that the exclusive forum for any litigation, arbitration or other dispute resolution process is located in another state.
  2. The prohibition of subsection (a) shall not apply to any contract, subcontract or purchase order for the improvement of real property which is located partially in this state and partially in another state or states. Venue in a dispute over such contract may be in any state in which part of the property is located.

Acts 1993, ch. 37, § 1.

Compiler's Notes. Acts 1993, ch. 37, § 2 provided that this section shall apply to all contracts, subcontracts or purchase orders to which this section applies entered into on or after July 1, 1993.

Law Reviews.

Avoiding Unnecessary Punches: Skillful Crafting of Alternative Dispute Resolution Contract Clauses (David K. Taylor), 36 No. 4 Tenn. B.J. 20 (2000).

Chapter 12
Crop Liens

66-12-101. Landlord's lien for rent.

A landlord and one controlling land by lease or otherwise shall have a lien on all crops grown on the land during the year for the payment of the rent for the year, whether the contract of rental be verbal or in writing, and this lien shall inure to the benefit of the assignee of the lienor.

Acts 1923, ch. 71, § 1; Shan. Supp., § 5299a1; mod. Code 1932, § 8017; T.C.A. (orig. ed.), § 64-1201.

Cross-References. Leases, §§ 66-7-101, 66-7-102.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 17 Tenn. Juris., Landlord and Tenant, §§ 13, 14.

Law Reviews.

The Constitutionality of Prejudgment Seizure of Property Under Tennessee Law (Roger W. Dickson), 38 Tenn. L. Rev. 575 (1971).

The New Article 9: Its Impact on Tennessee Law (Part II), 67 Tenn. L. Rev. 329 (2000).

NOTES TO DECISIONS

1. Effect of Statute.

Sections 66-12-10166-12-107 did not repeal § 66-12-108. Lee v. Spence, 5 Tenn. App. 363, — S.W. —, 1927 Tenn. App. LEXIS 70 (Tenn. Ct. App. 1927).

2. Scope of lien.

Landlord's lien is not a continuing one, but relates to a current year and crop only. The lien extends only for supplies going into the given crop. Bramlett v. Hurley, 160 Tenn. 653, 28 S.W.2d 633, 1930 Tenn. LEXIS 150 (1930).

These lien provisions are not limited to leases for crop rent as opposed to cash rent. Cleveland v. McNabb, 312 F. Supp. 155, 1970 U.S. Dist. LEXIS 12314 (W.D. Tenn. 1970).

3. Election of Remedies.

Landlord having right of action against tenant under conditional sales law, and also under landlord's lien law may not pursue both remedies. Pettigrew v. Hodges, 5 Tenn. App. 599, 1927 Tenn. App. LEXIS 98 (1927).

4. Assignee — Rights against Purchaser of Crop.

A purchaser from the tenant of a crop subject to the lien for rents is liable to the assignee of the rent note for amount due thereon to the extent of the value of the crop. Lee v. Spence, 5 Tenn. App. 363, — S.W. —, 1927 Tenn. App. LEXIS 70 (Tenn. Ct. App. 1927).

Collateral References.

Landlord's liens on goods of subtenant or assignee for rent. 9 A.L.R. 317, 96 A.L.R. 249.

Liens on crops for rent. 9 A.L.R. 305, 96 A.L.R. 249.

66-12-102. Lien for goods and money supplied.

A landlord and one controlling land by lease or otherwise shall have a like lien on all crops of tenants or sharecroppers, grown during the year on the land, for the payment of necessary food, household fuel, money and clothing supplied during the year to such tenant or sharecropper or those dependent upon such tenant or sharecropper.

Acts 1923, ch. 71, § 2; Shan. Supp., § 5299a2; mod. Code 1932, § 8018; T.C.A. (orig. ed.), § 64-1202.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 13 Tenn. Juris., Frauds, Statute of, § 14; 17 Tenn. Juris., Landlord and Tenant, § 13.

Collateral References.

Attachment, execution, or recovery of personal judgment as waiver of landlord's lien. 151 A.L.R. 679.

Chattel mortgage or conditional sales contract, landlord's acceptance of, as waiver of his lien or reservation of title. 96 A.L.R. 568.

Chattel mortgage, statutes in relation to, as applicable to provisions of lease purporting to give lessor lien on lessee's chattels. 64 A.L.R. 627.

Taxes or other expenditures which tenant has agreed to pay or make, landlord's lien for rent as including. 99 A.L.R. 1104.

Warehouse Receipts Act as affecting landlord's lien on property represented by receipts. 61 A.L.R. 952.

66-12-103. Lien for farm implements and supplies.

A landlord and one controlling land by lease or otherwise shall have a like lien on all crops of tenants or sharecroppers grown during the year on the land, for the payment of necessary fertilizer, implements, work stock, feed for stock, seed, labor and insecticide, furnished to and used by such tenants or sharecroppers in the production of the crops.

Acts 1923, ch. 71, § 3; Shan. Supp., § 5299a3; mod. Code 1932, § 8019; T.C.A. (orig. ed.), § 64-1203.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 13 Tenn. Juris., Frauds, Statute of, § 14; 17 Tenn. Juris., Landlord and Tenant, § 13.

NOTES TO DECISIONS

1. Election of Remedies.

Landlord having right of action against tenant under conditional sales law and also under this statute may not pursue both remedies. Pettigrew v. Hodges, 5 Tenn. App. 599, 1927 Tenn. App. LEXIS 98 (1927).

2. Waiver.

Sale of work stock under conditional sales contract implies a waiver of this lien. Bramlett v. Hurley, 160 Tenn. 653, 28 S.W.2d 633, 1930 Tenn. LEXIS 150 (1930).

Presumption of waiver of this lien more strongly applies where additional security is taken at the time of original contract than where additional security is taken after the lien has attached. Bramlett v. Hurley, 160 Tenn. 653, 28 S.W.2d 633, 1930 Tenn. LEXIS 150 (1930).

66-12-104. Priority of landlord's liens.

The liens in §§ 66-12-10166-12-103 shall all be upon equality, but all shall be superior to all other encumbrances, lien, levy, or contract, on the crops, regardless of the date of such other encumbrance, lien, levy, or contract.

Acts 1923, ch. 71, § 4; Shan. Supp., § 5299a4; mod. Code 1932, § 8020; T.C.A. (orig. ed.), § 64-1204.

Cross-References. Cotton ginner's lien, § 66-15-101.

Execution levied on growing crop, § 26-3-102.

Landlord's lien, § 66-12-115.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6.

Collateral References.

Chattel mortgage, priority of landlord's lien as against. 37 A.L.R. 400, 52 A.L.R. 935.

66-12-105. Expiration of liens.

The liens shall expire and be barred after July 1, following the crop year, unless a proceeding for its enforcement be commenced before that date.

Acts 1923, ch. 71, § 5; Shan. Supp., § 5299a5; Code 1932, § 8021; T.C.A. (orig. ed.), § 64-1205.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 17 Tenn. Juris., Landlord and Tenant, § 13.

66-12-106. Enforcement of liens.

  1. All of the crop liens may be enforced in any court of competent jurisdiction, by original suit, execution and levy, or by original suit, attachment and garnishment, and all or any number of demands may be joined in one (1) suit or each established in a separate suit.
  2. Before any proceeding shall be instituted for the enforcement of the lien, the lienholder shall itemize the lienholder's claim and, either personally or through an agent, make affidavit in the manner required by law, in which affidavit it shall be stated that the claim is correct, owing, unpaid, and bona fide, and not subject to any setoff or credit.

Acts 1923, ch. 71, § 6; Shan. Supp., § 5299a6; mod. Code 1932, § 8022; T.C.A. (orig. ed.), § 64-1206.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 17 Tenn. Juris., Landlord and Tenant, §§ 13, 14.

NOTES TO DECISIONS

1. Keeping Account — Requirement.

Landlord cannot establish a lien against his tenant for supplies if account has not been kept and sworn to as required by statute. Whitfield v. DePriest, 6 Tenn. App. 200, 1927 Tenn. App. LEXIS 130 (1927).

2. Itemized Statement — Necessity.

In action by landlord against purchaser of crop from tenant, itemized statement must be filed and sworn to. Rochelle v. Mullins, 12 Tenn. App. 363, 1930 Tenn. App. LEXIS 76 (1930).

3. Note as Substitute for Itemized Claim.

Note signed by tenant will supply requirement of an itemized claim required by the statute. Hunter v. Harrison, 154 Tenn. 590, 288 S.W. 355, 1926 Tenn. LEXIS 157 (1926).

66-12-107. Liability of purchaser of crop.

A purchaser, with or without notice, of a crop subject to any of such liens shall be liable to the lienholder for the value of the crop, or any part of it, so purchased, not, however, to exceed the amount of rent due and/or supplies furnished and costs incurred in collecting same, if the crop, or part thereof, is delivered to or taken possession of by such purchaser before July 1 after the crop year; provided, the lienholder shall bring the action against the purchaser within one (1) year from the date of delivery to or possession taken by the latter.

Code 1858, § 3542 (deriv. Acts 1857-1858, ch. 52, § 3); Acts 1879, ch. 72; Shan., § 5302; Acts 1921, ch. 42, § 1; 1923, ch. 71, § 7; Shan. Supp., §§ 5299a7, 5302; mod. Code 1932, § 8023; T.C.A. (orig. ed.), § 64-1207.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 13 Tenn. Juris., Factors and Commission Merchants, § 8; 18 Tenn. Juris., Liens, § 10.

NOTES TO DECISIONS

1. Purchaser's Liability.

Only the first purchaser from the tenant was liable to the landlord for the value of the crop although under the former provisions of Shannon's Code, § 5299, the landlord could levy on the crop in any person's hands. Decker v. Rice, 137 Tenn. 478, 194 S.W. 87, 1917 Tenn. LEXIS 160 (1917).

Landlord is entitled to recover from person who takes from tenant the lien incumbered crop, sells it, and appropriates to his own use the proceeds. Hunter v. Harrison, 154 Tenn. 590, 288 S.W. 355, 1926 Tenn. LEXIS 157 (1926).

Purchaser of lien burdened cotton liable to holder of lien note. Lee v. Spence, 5 Tenn. App. 363, — S.W. —, 1927 Tenn. App. LEXIS 70 (Tenn. Ct. App. 1927).

Where the amount of rent was determined by the acreage planted in different crops, the liability of the purchaser of one crop was not limited to the portion of the rent attributable to that crop. Cleveland v. McNabb, 312 F. Supp. 155, 1970 U.S. Dist. LEXIS 12314 (W.D. Tenn. 1970).

2. Purchaser's Method of Protecting Self.

The burden is on the purchaser from the tenant to protect himself, if his check is given, by making both the landlord and tenant payees therein. First Citizens Nat'l Bank v. National Cottonseed Prods. Co., 11 Tenn. App. 269, 1930 Tenn. App. LEXIS 13 (1930).

3. Liability of Factor.

Factor is not liable as “purchaser” under this section when he acts only as a selling agent and does not resort to subterfuge to become a beneficiary. Hunter v. Harrison, 154 Tenn. 590, 288 S.W. 355 (1926).

Collateral References.

Conditional sale, landlord's lien on property sold to tenant on. 9 A.L.R. 322, 96 A.L.R. 249.

Notice of lien to purchaser from or through bona fide purchaser as affecting former's right to protection. 63 A.L.R. 1369.

Warehouse receipts for property subject to landlord's lien, purchaser of. 61 A.L.R. 952.

66-12-108. Liability of broker selling crop.

Any factor, broker, commission merchant, or other person who sells the crop of a tenant or sharecropper, or any portion of it, with or without notice of such lien, before its bar, and applies the proceeds to the payment of the tenant's indebtedness to such seller, shall be liable as a purchaser to the person entitled to the rent and/or amount due for supplies.

Acts 1899, ch. 22, § 1; Shan., § 5302a1; mod. Code 1932, § 8024; T.C.A. (orig. ed.), § 64-1208.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 10 Tenn. Juris., Election of Remedies, § 2; 17 Tenn. Juris., Landlord and Tenant, § 13.

NOTES TO DECISIONS

1. Effect of Other Sections.

This section was not repealed by §§ 66-12-10166-12-107. Lee v. Spence, 5 Tenn. App. 363, — S.W. —, 1927 Tenn. App. LEXIS 70 (Tenn. Ct. App. 1927).

2. Liability of Factor.

Factor is not liable as “purchaser” when he acts only as a selling agent and does not resort to subterfuge to become a beneficiary. Hunter v. Harrison, 154 Tenn. 590, 288 S.W. 355, 1926 Tenn. LEXIS 157 (1926).

66-12-109. Disposal of crop with intent to deprive landlord of lien.

If any person disposes of any crop or part thereof that is subject to any such landlord's lien, as provided in §§ 66-12-10166-12-112, with the purpose of depriving the owners of any such indebtedness of the same or its proceeds, such person commits a Class C misdemeanor, whether the person so offending had custody of the property at the time or not.

Acts 1897, ch. 114, § 1; Shan., § 5305a1; mod. Code 1932, § 8025; T.C.A. (orig. ed.), § 64-1209; Acts 1989, ch. 591, § 113.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

Textbooks. Tennessee Jurisprudence, 8 Tenn. Juris., Criminal Procedure, § 54; 17 Tenn. Juris., Landlord and Tenant, § 13.

NOTES TO DECISIONS

1. Constitutionality.

This section does not authorize imprisonment for debt in violation of the constitution. State v. Hoskins, 106 Tenn. 430, 61 S.W. 781, 1900 Tenn. LEXIS 178 (1900).

66-12-110. Criminal liability avoided by payment of claim.

If the person so disposing of the property shall pay over to the lienor or owner of the debt so secured the proceeds of the sale, or sufficient thereof to satisfy the lien, or in case the owner of the debt shall have received or recovered from the purchaser of the property the value thereof, then if the party so disposing of such property shall pay to the purchaser the proceeds of sale, and all costs of the prosecution accrued, and all before the person so disposing of such property is arraigned for trial, the person so disposing of such property shall not be so held liable.

Acts 1897, ch. 114, § 3; Shan., § 5305a3; mod. Code 1932, § 8026; T.C.A. (orig. ed.), § 64-1210.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 13.

66-12-111. Landlord's portion of crop unaffected.

Nothing in §§ 66-12-10166-12-112 shall affect the portion of the crop reserved as rent by the landlord of a sharecropper, or for the rent or use of land producing same, whether divided or undivided, it being the intention to treat the title to such portion of the crop as vested in the landlord, unless the contract expressly provides otherwise.

Acts 1923, ch. 71, § 8; Shan. Supp., § 5299a8; Acts 1927, ch. 33, § 1; mod. Code 1932, § 8027; T.C.A. (orig. ed.), § 64-1211.

Collateral References.

Chattel mortgage, landlord's acceptance of, as waiver of his reservation of title to crops. 96 A.L.R. 568.

Filing lease or contract which reserves title to crops in lessor, necessity of. 14 A.L.R. 1362.

Nursery stock attached to soil, as real or personal property. 125 A.L.R. 1411.

Stipulation of parties to cause as to legal rights of landlord and tenant in crops. 92 A.L.R. 672.

66-12-112. Joint payment by purchaser.

Should a tenant, by the consent and permission of the tenant's landlord, which consent and permission shall be in writing and signed by such landlord, sell the tenant's crop or any part thereof to any purchaser, upon which there exists a lien in favor of the landlord for either rent or supplies of any kind, the purchaser shall pay the purchase price for such crop to the tenant and landlord jointly, or the purchaser shall issue the check or other written instrument given in lieu of the money for such crop, payable to the landlord and tenant jointly, and before such check or other written instrument shall be cashed or paid, it shall have written or endorsed on the back thereof the genuine signature of the landlord in the landlord's own handwriting, or in the handwriting of the landlord's duly authorized agent or attorney.

Acts 1921, ch. 158, § 1; Shan. Supp., § 5302a3; mod. Code 1932, § 8028; T.C.A. (orig. ed.), § 64-1212.

NOTES TO DECISIONS

1. Effect of Section.

This section gives protection to both the purchaser and the landlord. First Citizens Nat'l Bank v. National Cottonseed Prods. Co., 11 Tenn. App. 269, 1930 Tenn. App. LEXIS 13 (1930).

2. Purchaser's Burden.

The burden is placed upon the purchaser from the tenant to protect himself, if he pays by check, by making the check payable to the landlord and tenant jointly. First Citizens Nat'l Bank v. National Cottonseed Prods. Co., 11 Tenn. App. 269, 1930 Tenn. App. LEXIS 13 (1930).

This section places the burden on the purchaser of crops to determine whether he is dealing with a tenant. Cleveland v. McNabb, 312 F. Supp. 155, 1970 U.S. Dist. LEXIS 12314 (W.D. Tenn. 1970).

66-12-113. Laborer's lien on crops.

When any person shall perform any labor or render services to another in accordance with a contract, written or verbal, for cultivating the soil, and shall produce a crop, such person shall have a lien upon the crop produced, which shall be the results of such person's labor, for the payment of such compensation or wages as agreed upon in the contract.

Acts 1879, ch. 15, § 1; Shan., § 3567; mod. Code 1932, § 8014; T.C.A. (orig. ed.), § 64-1213.

Cross-References. Enforcement of lien, § 66-21-101.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 10 Tenn. Juris., Employer and Employee, § 6; 17 Tenn. Juris., Landlord and Tenant, § 13.

NOTES TO DECISIONS

1. Manager's Lien.

Where one is employed by the landowner as his agent and manager of his farm, for a stipulated annual salary, such agent and manager has a lien on the crops produced and in his possession for the payment of his salary, without any contract therefor; and where there is a written contract giving such lien, it need not be registered. Jones v. Chamberlin, 52 Tenn. 210, 1871 Tenn. LEXIS 252 (1871).

2. Sharecropper — Status.

A contract by a laborer with a landowner to farm on the shares does not create a partnership, but they are tenants in common and each may sell or mortgage his respective interest. Mann v. Taylor, 52 Tenn. 267, 1871 Tenn. LEXIS 261 (1871); Hunt v. Wing, 57 Tenn. 139, 1872 Tenn. LEXIS 410 (1872).

An agreement, on the part of one who is to do the labor, to manage the land of another on shares, is not a lease, but a contract for the payment of services rendered, by a part of the crop raised. Mann v. Taylor, 52 Tenn. 267, 1871 Tenn. LEXIS 261 (1871).

An agreement to give a part of the crop, in consideration of the labor of tillage, is as much a hiring as an undertaking to pay in money. McCutchin v. Taylor, 79 Tenn. 259, 1883 Tenn. LEXIS 52 (1883).

3. Cropper's Mortgage — Status.

Under a contract by which it was agreed that the landlord should furnish the tenant his supplies, and should retain possession and control of the crop, and sell it, and should pay one half of the proceeds to the tenant, after paying himself, for the supplies furnished, the rights of the tenant's mortgagee, even without notice of the terms of the contract, must be postponed to those of the landlord under the contract. This was not a lien created, but was a part of the contract determining the rights of the parties. Meacham v. Herndon, 86 Tenn. 366, 6 S.W. 741, 1887 Tenn. LEXIS 54 (1887).

4. Former Status of Laborers.

Before the enactment of the statute, farm laborers had no lien upon the crop produced for their wages. Hunt v. Wing, 57 Tenn. 139, 1872 Tenn. LEXIS 410 (1872).

Collateral References.

Common-law on personalty for work performed thereon, upon the owner's premises. 3 A.L.R. 862.

Cropper's right to thresher's lien or lien for other work on share of owner. 35 A.L.R. 450.

Independence of contract considered with relation to statutes creating liens for work or wages. 43 A.L.R. 336.

Provisions of lien statutes protecting various forms of labor as including use of laborer's own team, automobile or other equipment. 71 A.L.R. 1137.

Rights and remedies under lien statute of one performing work only part of which is of a lienable character. 149 A.L.R. 682.

66-12-114. Duration of laborer's lien.

The lien provided for in § 66-12-113 shall exist three (3) months from November 15 of the year in which the labor is performed; provided, that an account of such labor rendered be sworn to before some court of general sessions, or clerk of the court issuing the writ of attachment.

Acts 1879, ch. 15, § 2; Shan., § 3568; mod. Code 1932, § 8015; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), § 64-1214.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6.

Law Reviews.

Liens — Priority of Conditional Vendor's Lien Over Warehouseman's Lien, 8 Tenn. L. Rev. 202 (1930).

NOTES TO DECISIONS

1. Duration.

The lien continues from the time the crop is planted until three months after November 15 of the year in which the labor on the crop is performed. Akin v. Egner, 8 Tenn. App. 560, 1928 Tenn. App. LEXIS 179 (1928).

Collateral References.

Affidavits of liens, sufficiency of officer's jurat to. 1 A.L.R. 1573, 116 A.L.R. 587.

Farm laborer's claim of statutory lien, sufficiency of description of subject of. 116 A.L.R. 1009.

Judgment denying recovery on indebtedness as bar to action to enforce lien. 4 A.L.R. 1178.

Jurisdiction of justice's court (or similar court) of action to foreclose lien on land. 115 A.L.R. 539.

Soldiers' and Sailors' Civil Relief Act, effect of. 147 A.L.R. 1392, 148 A.L.R. 1395, 149 A.L.R. 1463, 150 A.L.R. 1428, 151 A.L.R. 1460, 152 A.L.R. 1457, 153 A.L.R. 1429, 154 A.L.R. 1455, 155 A.L.R. 1456, 156 A.L.R. 1455, 35 A.L.R. Fed. 649.

Sufficiency of claim, statement, or notice of lien where only part of work is of lienable character. 149 A.L.R. 715.

66-12-115. Priority of landlord's lien.

The lien provided for in § 66-12-113 shall not abridge or interfere with the landlord's lien for rent or supplies, but shall be second to the landlord's lien, and none other.

Acts 1879, ch. 15, § 3; Shan., § 3569; Code 1932, § 8016; T.C.A. (orig. ed.), § 64-1215.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agriculture, § 6; 17 Tenn. Juris., Landlord and Tenant, § 13.

Collateral References.

Landlord's distress for rent on goods subject to lien. 62 A.L.R. 1142.

Law Reviews.

Liens — Priority of Conditional Vendor's Lien Over Warehouseman's Lien, 8 Tenn. L. Rev. 202 (1930).

Chapter 13
Employees' Lien

66-13-101. Lien on business property.

All employees and laborers of any corporation, or firm, carrying on any corporate or partnership business shall have a lien upon the corporate or firm property of every character and description, for any sums due them for labor and service performed for the corporation or firm, and such lien shall prevail over all other liens, except the vendor's lien or the lien of a mortgage, or deed of trust to secure purchase money.

Acts 1883, ch. 18, § 1; 1897, ch. 78, § 1; Shan., § 3564; mod. Code 1932, § 7989; T.C.A. (orig. ed.), § 64-1301.

Cross-References. Construction, fitting, or repair of boats, §§ 66-19-20166-19-210.

Enforcement of lien against personal property, § 66-21-101.

Lien on crops, §§ 66-12-11366-12-115.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Law Reviews.

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).

NOTES TO DECISIONS

1. Constitutionality.

This statute is not unconstitutional as an unlawful discrimination against employees of individuals, who have a free and unembarrassed right to subject their employer's property to the satisfaction of their demands. Willis v. Mann Constr. Co., 145 Tenn. 318, 236 S.W. 282, 1921 Tenn. LEXIS 82 (1921).

2. “Employee” — Meaning.

The word “employee” refers to persons employed in comparatively subordinate posts and not to managing officials. State ex rel. McConnell v. People's Bank & Trust Co., 155 Tenn. 519, 296 S.W. 12, 1926 Tenn. LEXIS 75, 54 A.L.R. 564 (1926).

3. Persons Not Employees.

Persons who furnish and drive, or employ others to drive, their teams, in the hauling of lumber, to be paid by the thousand feet hauled, are “contractors,” and not “employees” and “laborers.” They are their own masters as to time and manner of work. Knoxville Table & Chair Co. v. Kerr Bros., 130 Tenn. 159, 169 S.W. 623, 1914 Tenn. LEXIS 11 (1914).

Cashier and assistant cashier of insolvent bank are not entitled to lien for salaries. State ex rel. McConnell v. People's Bank & Trust Co., 155 Tenn. 519, 296 S.W. 12, 1926 Tenn. LEXIS 75, 54 A.L.R. 564 (1926).

4. Priority of Lien.

The lien has priority over the lien of creditors by simple contract who have first instituted attachment suit and impounded property, notwithstanding the corporation is a going concern. Ruston v. Perry Lumber Co., 104 Tenn. 538, 58 S.W. 268, 1900 Tenn. LEXIS 27 (1900).

5. Assignment of Lien.

Statutory liens of employees are assignable, and may be assigned by mere assignment of the wage claim. Scealf v. J.R. Brady & Co., 8 Tenn. Civ. App. 485 (1918).

6. Third Party Paying Debt — Rights.

A third person paying the lien debts of laborers without any assignment, express or implied, or paying such debts, when not obligated to do so, without any express agreement with the debtor that such payer shall be subrogated, but with a mere understanding that by such payment he will be subrogated, will not entitle such payer to subrogation to the liens or preferences of the labor creditors; and when subrogation depends wholly upon an agreement with the debtor, the rights of the creditors to the remainder of their debts must not be prejudiced. J.P. Browder & Co. v. Hill, 136 F. 821, 1905 U.S. App. LEXIS 4523 (6th Cir. 1905).

7. Mining Claims.

Where a deed of trust, relied on as such, conveyed “all the ores that may be taken from the mine” by the mortgagor corporation “between this date and January 1, 1895,” the lien of the deed of trust did not attach to this ore until it was mined, and same was subject to the prior lien of laborers, whose liens commenced when their work was done. Galloway v. Blue Springs Min. Co., 37 S.W. 1016, 1896 Tenn. Ch. App. LEXIS 46 (1896).

8. Workers' Claims.

Section 50-6-222, giving workers' claims the same preference as is allowed by law for any unpaid wages for labor, and subordinating compensation claims to rights and interest secured by a registered mortgage which is valid as to general creditors, controls as to compensation claims over this chapter relating to liens of employees for labor. Pennington v. Webb-Hammock Coal Co., 182 Tenn. 33, 184 S.W.2d 47, 1944 Tenn. LEXIS 298 (1944); McKee v. Dever Bros., 39 Tenn. App. 411, 284 S.W.2d 305, 1955 Tenn. App. LEXIS 77 (Tenn. Ct. App. 1955).

Collateral References.

Common-law lien on personalty for work performed thereon, upon the owner's premises. 3 A.L.R. 862.

Independence of contract considered with relation to statutes creating liens for work or wages. 43 A.L.R. 336.

Provisions of lien statutes protecting various forms of labor as including use of laborer's own team, automobile, or other equipment. 71 A.L.R. 1137.

Question whether person (or his work) is within statute. 149 A.L.R. 684.

66-13-102. Duration.

The lien created in § 66-13-101 shall only extend to and protect those claims as may have accrued within three (3) months of the bringing of any suit for the enforcement of the lien, and shall continue during the pendency of any suit brought for its enforcement.

Acts 1883, ch. 18, §§ 1, 2; 1897, ch. 78, § 2; Shan., § 3565; mod. Code 1932, § 7990; T.C.A. (orig. ed.), § 64-1302.

Law Reviews.

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).

NOTES TO DECISIONS

1. Nature of Section.

This section is not, strictly speaking, a statute of limitations but it is a qualification of § 66-14-101 and is a limitation and description of the wage claims entitled to the lien. Pennington v. Webb-Hammock Coal Co., 182 Tenn. 33, 184 S.W.2d 47, 1944 Tenn. LEXIS 298 (1944).

2. Procedure to Enforce Lien.

In a suit where the assets are in the hands of a receiver appointed by the court, it is necessary for the petitioner either to specifically describe the property upon which the lien is claimed, together with a statement of the nature of the lien, or it is necessary that a writ of attachment be issued and levied. It is insufficient to merely describe the property as “the drug business at the corner of College and McLemore Avenues in Memphis, Tenn.,” in the hands of the receiver, especially where there are prior liens on part of the property. Hessig-Ellis Drug Co. v. Stone, 129 Tenn. 608, 167 S.W. 864, 1914 Tenn. LEXIS 149 (1914).

3. Workers' Claims — Time of Bringing.

Compensation claims asserted before distribution of assets of insolvent employer are entitled to priority over general creditors of employer if claims are not barred by limitation period set forth in § 50-6-224, and statement in Francis v. Williams Coal Mining Co., 178 Tenn. 203, 156 S.W.2d 434, 1941 Tenn. LEXIS 46 (1941), that under this section priority would by denied workers' claims where suit was not brought within three months from date of injury is retracted, since such statement was not necessary to the decision in such former case. Pennington v. Webb-Hammock Coal Co., 182 Tenn. 33, 184 S.W.2d 47, 1944 Tenn. LEXIS 298 (1944).

66-13-103. Priority over other liens.

No corporation or partnership doing business in this state shall have the power to execute a mortgage or deed of trust or other instrument creating a lien upon the property of the corporation prior to that in favor of the employees and laborers, except to secure purchase money.

Acts 1883, ch. 18, § 1; 1897, ch. 78, § 2; Shan., § 3566; mod. Code 1932, § 7991; T.C.A. (orig. ed.), § 64-1303.

Cross-References. Lien against real estate for improvements, §§ 66-11-11566-11-140.

Chapter 14
Artisans' Lien

66-14-101. Right to sell unclaimed articles left for repairs.

  1. Silversmiths, lock and gunsmiths, blacksmiths, watchmakers and repairers, and artisans generally, who do work for the public, shall have the common law lien, and the right, at the expiration of six (6) months from the time of the contract and the leaving with them of the goods or products to be repaired, developed, processed or improved, if not claimed or called for by the owner, to sell the same at public outcry after complying with this chapter.
  2. “Artisans” are further defined as including persons who make, clean, mend, repair, alter or otherwise perform work on shoes or boots, as well as persons with whom are left goods or products to be repaired, developed, processed, or improved.
  3. The lien established by this section shall not apply to work performed on a “motor vehicle” as defined in § 55-12-102.

Acts 1935, ch. 53, § 1; C. Supp. 1950, § 7984; Acts 1959, ch. 127, § 1; 1965, ch. 276, § 1; T.C.A. (orig. ed.), § 64-1401; Acts 1998, ch. 760, § 1.

Cross-References. Lien for repairs to conveyances generally, § 66-19-101.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Automobiles, § 24.

Law Reviews.

An Introduction to the Proposed Bankruptcy Act of 1973: From Revision to Revolution (John A. Walker, Jr.), 41 Tenn. L. Rev. 635 (1975).

NOTES TO DECISIONS

1. Superiority of Lien.

Artisan's lien for repairs was superior to previously recorded security interest. Associates Com. Corp. v. Francisco, 667 S.W.2d 481, 1983 Tenn. App. LEXIS 677 (Tenn. Ct. App. 1983).

2. Extinguishment of Lien.

No provision has been made in the lien statutes to extinguish the lien by operation of law where the lienholder converts the property to his own use. Associates Com. Corp. v. Francisco, 667 S.W.2d 481, 1983 Tenn. App. LEXIS 677 (Tenn. Ct. App. 1983).

Collateral References.

Common law lien on personalty for work performed thereon, upon the owner's premises. 3 A.L.R. 862.

Priority as between artisan's lien and chattel mortgage. 36 A.L.R.2d 229.

Priority as between lien for repairs and right of seller under conditional sales contract. 36 A.L.R.2d 198.

Promise to pay lien as embracing promise to pay debt. 10 A.L.R. 891.

66-14-102. Notice to persons interested.

  1. The artisan shall give a written notice to the person for whose account the goods were repaired, and to any other person known to the artisan who claims an interest in the goods. This notice shall be given by delivery in person, or by registered mail addressed to the last known place of business or abode of the person to be notified.
  2. Artisans, other than entities licensed and regulated pursuant to title 55, chapter 17, shall make reasonable inquiry to identify parties claiming an interest in the goods and shall give written notice to such parties as provided in subsection (a).
  3. In the event the goods are motor vehicles or other goods requiring certificates of title pursuant to title 55, “reasonable inquiry” as required by subsection (b) shall be satisfied by an inquiry of the title and registration division of the department of revenue or a county clerk as agent for the division to determine the interest of all title owners and all lienholders.

Acts 1935, ch. 53, § 1; C. Supp. 1950, § 7985; T.C.A. (orig. ed.), § 64-1402; Acts 1997, ch. 73, §§ 2-4.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 7-503.

Law Reviews.

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).

66-14-103. Contents of notice.

The notice shall contain:

  1. An itemized statement of the artisan's claim and the date, or dates, when it became due;
  2. A brief description of the goods against which the lien exists;
  3. A demand that the amount of the claim as stated in the notice, and of such other claim as shall accrue, shall be paid on or before a date mentioned, not less than ten (10) days from the delivery of the notice, if it be personally delivered, or from the time when the notice should reach its destination, according to the due course of post, if the notice is sent by mail; and
  4. A statement that unless the claim is paid within the time specified, the goods will be advertised for sale and sold by auction at a specified time and place.

Acts 1935, ch. 53, § 1; C. Supp. 1950, § 7986; T.C.A. (orig. ed.), § 64-1403.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 7-503, 7-504.

66-14-104. Advertisement and sale.

In accordance with the terms of the notice provided for in § 66-14-102, a sale of the goods by auction may be had to satisfy the lien on the goods. The sale shall be had in the place where the lien was acquired, or, if such place is unsuitable for the purpose, at a convenient suitable place. After the time for the payment of the claim specified in the notice has elapsed, an advertisement of the sale describing the goods to be sold, and stating the name of the owner or person on whose account the goods are held, and the time and place of the sale, shall be published once a week for two (2) consecutive weeks, in a newspaper published in the place where the sale is to be held. The sale shall not be held less than fifteen (15) days from the time of the first publication. If there is no newspaper published in the place where the sale is to be held, the advertisement shall be posted at least ten (10) days before the sale in not less than six (6) conspicuous places in the place.

Acts 1935, ch. 53, § 1; C. Supp. 1950, § 7987; T.C.A. (orig. ed.), § 64-1404.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 7-504.

66-14-105. Satisfaction of lien by owner.

At any time before the goods are sold, any person claiming a right of property or possession therein may pay the artisan the amount necessary to satisfy the lien and pay the reasonable expenses and liabilities incurred in serving notice and advertisement and preparing for the sale up to the time of such payment. The artisan shall deliver the goods to the person making such payment if that person is entitled, under this chapter, to the possession of the goods on payment of such expenses and liabilities.

Acts 1935, ch. 53, § 1; C. Supp. 1950, § 7988; T.C.A. (orig. ed.), § 64-1405.

66-14-106. Disposition of proceeds of sale.

If the goods are sold, from the proceeds of such sale the artisan shall satisfy such artisan's lien, including the reasonable charges of notice, advertisement, and sale. The balance, if any, of the proceeds shall be held by the artisan, and delivered on demand to the person to whom the artisan would have been bound to deliver or justified in delivering the goods. If no person claims the balance within twelve (12) months, the artisan shall turn over the balance to the trustee of the county for the benefit of the common schools of the county in which the goods were sold.

Acts 1935, ch. 53, § 1; C. Supp. 1950, § 7988; T.C.A. (orig. ed.), § 64-1406.

66-14-107. Alternate method of enforcement.

In addition to the method of enforcement of the artisans' lien provided in §§ 66-14-10266-14-106, inclusive, such lien may be enforced, in the alternative, by the artisan complying with §§ 66-16-107 and  66-16-108, relating to launderers', cleaners' and storage liens.

Acts 1959, ch. 127, § 2; T.C.A. (orig. ed.), § 64-1407.

Compiler's Notes. Sections 66-16-102 — 66-16-106, referred to in this section, were repealed by Acts 1990, ch. 778, effective April 5, 1990. Section 66-16-107 was not repealed by that act.

Law Reviews.

The Collection of Debts from Insolvent and Fully-Mortgaged Debtors (John A. Walker, Jr.), 43 Tenn. L. Rev. 399 (1976).

Chapter 15
Manufacturers' and Processors' Liens

66-15-101. Cotton ginners' lien.

  1. The charges and tolls of ginners are secured by a lien on all cotton ginned and baled by them, covering all ginning and baling charges.
  2. The lien created by subsection (a) is second only to the landlord and furnishers liens.
  3. The lien shall continue for six (6) months after such tolls and charges become due and payable, and until the termination of any and all litigation pertaining thereto, commenced before the expiration of the six (6) months.

Acts 1921, ch. 142, §§ 1-3; Shan. Supp., §§ 3558a1-3558a3; mod. Code 1932, §§ 7981-7983; T.C.A. (orig. ed.), §§ 64-1501 — 64-1503.

Cross-References. Enforcement of lien, § 66-21-101.

Law Reviews.

The Tennessee Court System — Chancery Court (Frederic S. Le Clercq), 8 Mem. St. U.L. Rev. 281 (1977).

66-15-102. Textile processors' lien.

  1. All persons or corporations engaged in the business of manufacturing, bleaching, mercerizing, dyeing, printing or finishing cotton, silk, artificial silk, wool, synthetic fibers or goods of which cotton, silk, artificial silk, wool or synthetic fibers form a component part, shall be entitled to a lien upon the goods and property of others that may come or may have come into their possession for the purpose of being manufactured, bleached, mercerized, dyed, printed or finished, or for any other purpose, for the amount that may be due them from the owners of such goods or other property, by reason of any freight advanced or any work or labor performed or materials furnished in and about the manufacturing, bleaching, mercerizing, dyeing, printing or finishing or otherwise treating or processing of the same or other goods of such owner or owners.
  2. The lien shall not be waived, suspended or impaired by the recovery of any judgment, or the taking of any bill or note, for the money due, for such work, labor or materials and such lien may be enforced as though such judgment had not been recovered or such bill or note taken.
    1. When any person or corporation engaged in the business of manufacturing, bleaching, mercerizing, dyeing, printing or finishing cotton, silk, artificial silk, wool, synthetic fibers or goods of which cotton, silk, artificial silk, wool or synthetic fibers form a component part, may have a lien on the goods and property of others that may have come into the possession of such person or corporation for the purpose of being manufactured, bleached, mercerized, dyed, printed, or finished, or otherwise treated and processed, or for any other purpose, and the amount due on the goods or property shall remain due and unpaid either in whole or part for the space of two (2) months after the same becomes due and payable, it shall be lawful for the person or corporation having the lien to expose the cotton, silk, artificial silk, wool, synthetic fibers or goods and property for sale at public auction, upon a notice of sale being first published for the space of two (2) weeks, at least once in each week, preceding the day of sale, in some newspaper published in the county in which the goods or property are located, and also upon five (5) days' notice of sale set up in three (3) or more public places in the county, one (1) whereof shall be in the town or city, if any, in which the goods or property are located; and, if the residence of the owner or owners can be ascertained, a copy of the printed notice shall be mailed to the owner or owners at least five (5) days before the day of sale.
    2. The proceeds of the sale shall be applied to the payment of the lien and the expenses of the sale.
      1. No more of the goods or property shall be sold, if they are easily separated or divided, than shall be necessary, as near as may be, to pay such lien and expense.
      2. The balance of the proceeds of sale of the goods or property, if any, shall be paid or delivered to the owner or owners entitled to the proceeds.
    3. Nothing in this section contained shall be construed to be in derogation of the right of the lienor to enforce the lien by any other lawful procedure.
    4. The lien created by this section shall not continue after the property has been transferred from the lienor.

Acts 1933, ch. 39, §§ 1-3; C. Supp. 1950, §§ 7983.1-7983.3; T.C.A. (orig. ed.), §§ 64-1504 — 64-1506; Acts 1988, ch. 825, § 1.

66-15-103. Printers' and binders' lien.

  1. Typographers, printers, lithographers, photoengravers, electrotypers, stereotypers, bookbinders, and/or book manufacturers are given a lien on all type set by them, electrotype, stereotype, photoengraved or lithographic plates or stones made by them and on all plates, dies, engravings and/or materials of any sort prepared or supplied by the manufacturer, or furnished by the customer to facilitate production, so long as the items shall remain in the plant warehouses, vaults or custody of the manufacturer, which the lien or liens shall act to secure amounts owing by the customer to such manufacturer, and remaining unpaid on any part of the work performed and materials or services supplied by the manufacturer, and shall be a prior lien on same.
  2. The lien created by subsection (a) shall not be lost or waived; provided any of the completed work or partially completed work remains in the plant, custody or control of those to whom the lien is given, as set out in subsection (a), except by special written release by the printer, binder, worker or manufacturer, and the acceptance of notes, trade acceptance, and/or guarantees of payments, whether matured or not, in payment of the debt or account, shall not invalidate or affect the lien or its priority.
  3. Before the lien can be enforced, written notice of intention to claim the lien must be given by the lienee to the party for whom the work was done, by giving the notice to such party by registered mail at that party's last known place of address; and not earlier than ten (10) days thereafter the lien shall be enforceable in chancery as provided for the enforcement of other similar liens.
  4. The lienee or claimant of the lien shall have a period of ninety (90) days from giving of the notice of the intention to claim the lien to file a bill in chancery for the enforcement of same, and, if such action is not brought within that period of time, the lien shall expire.

Acts 1937, ch. 228, §§ 1-3; mod. C. Supp. 1950, §§ 7983.4-7983.6; T.C.A. (orig. ed.), §§ 64-1507 — 64-1510.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Enforcement of lien, § 66-21-101.

Chapter 16
Launderers', Cleaners' and Storage Liens

66-16-101 — 66-16-106. [Repealed.]

Compiler's Notes. Former §§ 66-16-10166-16-106 (Acts 1937, ch. 95, §§ 1-5; c. Supp. 1950, §§ 7988.1-7988.5 (Williams, §§ 8088.1-8088.5); Acts 1978, § 561, § 34; T.C.A. (orig. ed.), §§ 64-1601 — 64-1606), concerning definitions, records and addresses of customers, possessory liens, enforcement of lien, notice, redemption by customer, and sale of articles, were repealed by Acts 1990, ch. 778, § 3, effective April 5, 1990.

66-16-107. Enforcement against articles left for storage.

  1. If articles received for storage by a retail launderer or retail dry cleaner are not ordered from storage within sixty (60) days from the expiration of the storage date, as fixed upon the memorandum at the time the articles were received for storage, then a notice by registered mail shall be sent to the address given at the time each article was received for storage, or to the new address of the person from whom the article was received, if such person is known to have changed such person's address, demanding that the article be taken from storage within thirty (30) days, or the storage charges paid and a new contract for storage entered into.
  2. If at the expiration of thirty (30) days the article has not been removed from storage or a new storage contract made, then a second registered letter shall be sent, setting out a general description of the article, the charges against it, and a date not less than twelve (12) days from the date of mailing the letter when the article will be offered by public sale at the principal plant of the person who received it for storage. A copy of the letter shall be posted in a prominent place in the laundry or cleaning plant of the person mailing the letter, where the letter or notice is open to public inspection.
  3. If the charges are not paid by the date fixed for the sale, the article shall be offered for sale and sold to the highest bidder for cash and the proceeds applied to paying the cost of storage and mailing the necessary letters, and the balance shall be retained for a period of six (6) months for the benefit of the person from whom the article was received and shall at any time during those six (6) months be paid to that person on demand. At the expiration of six (6) months from the date of sale, the sum shall be paid to the state treasurer who shall deal with it in accordance with the Uniform Unclaimed Property Act, compiled in chapter 29 of this title.

Acts 1937, ch. 95, § 6; C. Supp. 1950, § 7988.6 (Williams, § 8088.6); Acts 1978, ch. 561, § 34; T.C.A. (orig. ed.), § 64-1607; Acts 1990, ch. 778, § 2; 2017, ch. 457, § 2.

Amendments. The 2017 amendment substituted “Uniform Unclaimed Property Act” for “Uniform Disposition of Unclaimed Property Act” in the last sentence of (c).

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

66-16-108. Sale of articles — Notice to customer.

  1. If a garment or article left with a retail launderer or retail dry cleaner for laundering or dry cleaning is not redeemed by the customer within ninety (90) days, the launderer or dry cleaner may, without liability or responsibility for the article or garment, dispose of it at a public or private sale or in any other manner; provided, that the launderer or dry cleaner has notified the customer by registered letter mailed to the customer's last known address that the article or garment will be disposed of unless it is redeemed within thirty (30) days from the date of the letter.
  2. If a garment or article left with a retail launderer or retail dry cleaner for laundering or dry cleaning is not redeemed by the customer within one hundred eighty (180) days, the launderer or dry cleaner may, without any liability or responsibility for the article or garment, and without notification to the customer, dispose of the article or garment in any manner suitable to the launderer or dry cleaner.

Acts 1990, ch. 778, § 1.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Chapter 17
Innkeeper's Lien

66-17-101. Scope of lien.

All keepers of hotels, boardinghouses, and lodging houses, whether licensed or not, shall have a lien on all furniture, baggage, wearing apparel, or other goods and chattels brought into any such hotel, boardinghouse, or lodginghouse, by any guest or patron of the same, to secure the payment by such guest of all sums due for board or lodging.

Acts 1879, ch. 109, § 1; Shan., § 3590; Code 1932, § 8012; T.C.A. (orig. ed.), § 64-1701.

Cross-References. Enforcement of lien, § 66-21-101.

Sale of baggage of person fraudulently obtaining credit, § 62-7-108.

Textbooks. Tennessee Jurisprudence, 14 Tenn. Juris., Hotels, Inns and Restaurants, § 5.

Law Reviews.

The Tennessee Court System — Chancery Court (Frederic S. Le Clercq), 8 Mem. St. U.L. Rev. 281 (1977).

NOTES TO DECISIONS

1. Constitutionality.

The statute does not violate the provisions of Tenn. Const., art. I, § 21, prohibiting the taking of property without just compensation, nor the provisions of Tenn. Const., art. I, § 8, prohibiting the deprivation of property, except by the law of the land. Nance v. O. K. Houck Piano Co., 128 Tenn. 1, 155 S.W. 1172, 1914D Am. Ann. Cas. 834, 1913 Tenn. LEXIS 18 (1913).

2. Common Law Lien.

At common law, innkeepers had a lien upon the baggage brought upon the premises by guests, whether it belonged to the guests or third persons, where they had no notice or knowledge of adverse ownership; but such lien did not exist in favor of boardinghouse keepers. Nance v. O. K. Houck Piano Co., 128 Tenn. 1, 155 S.W. 1172, 1914D Am. Ann. Cas. 834, 1913 Tenn. LEXIS 18 (1913).

3. Priority of Lien.

The lien of a boardinghouse keeper on a piano brought into her house and held by the boarder under a conditional sale, in which the vendor retained the title to secure the purchase price, is superior to that of such vendor, where the boardinghouse keeper had no notice or knowledge of such rights of such vendor. Nance v. O. K. Houck Piano Co., 128 Tenn. 1, 155 S.W. 1172, 1914D Am. Ann. Cas. 834, 1913 Tenn. LEXIS 18 (1913).

4. Unlicensed Keepers — Rights.

Whether unlicensed keepers of hotels, boardinghouses, and lodginghouses can enforce the lien, where a subsequent revenue statute declares such business a privilege, and taxes it, and forbids its pursuit without license and payment of the tax, is questionable. Stevenson v. Ewing, 87 Tenn. 46, 9 S.W. 230, 1888 Tenn. LEXIS 33 (1888); Singer Mfg. Co. v. Draper, 103 Tenn. 262, 52 S.W. 879, 1899 Tenn. LEXIS 102 (1899).

Collateral References.

Automobile as subject of innkeeper's lien. 50 A.L.R. 1102, 66 A.L.R. 206, 104 A.L.R. 846, 124 A.L.R. 1298, 148 A.L.R. 1270.

Boardinghouse, what constitutes, within meaning of lien statute. 19 A.L.R. 538.

Conditional sale, innkeeper's lien on property sold to guest on. 45 A.L.R. 960.

Landlord's distress for rent on goods of guest at inn. 62 A.L.R. 1126.

What constitutes a hotel or inn. 19 A.L.R. 517, 53 A.L.R. 988.

66-17-102. Time of attachment.

The lien shall attach in all cases where a liability has been created, without regard to the time of such board or lodging.

Acts 1879, ch. 109, § 1; Shan., § 3591; Code 1932, § 8013; T.C.A. (orig. ed.), § 64-1702.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Chapter 18
Molders' lien

66-18-101. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Customer” means any individual or entity who causes or caused a molder to fabricate, cast or otherwise make a die, mold, form, or pattern or who provides a molder with a die, mold, form, or pattern to manufacture, assemble, cast, fabricate or otherwise make a product or products for a customer; and
  2. “Molder” means any individual or entity who fabricates, casts, or otherwise makes or uses a die, mold, form, or pattern for the purpose of manufacturing, assembling, casting, fabricating, or otherwise making a product or products for a customer. “Molder” includes, but is not limited to, a tool or die maker.

Acts 1999, ch. 106, § 2.

66-18-102. Scope, attachment and enforcement of lien.

  1. Molders, shall have a lien, dependent on possession, on all dies, molds, forms or patterns in their hands belonging to a customer, for the balance due them from such customer for any manufacturing or fabrication work, and in the value of all material related to such work. Such liens shall attach upon the commencement of work by the molder and shall be subject to any prior perfected security interest in such property as of the commencement date. The molder may retain possession of the dye, mold, form or pattern until the charges are paid, or until repossessed by a creditor with a prior perfected security interest.
  2. Before enforcing the lien, notice in writing shall be given to the customer, whether delivered personally or sent by registered mail to the last known address of the customer. This notice shall state that a lien is claimed for the damages set forth in or attached to such writing for manufacturing or fabrication work contracted or performed for the customer. This notice shall also include a demand for payment.
  3. If the molder has not been paid the amount due within sixty (60) days after the notice has been received by the customer as provided in subsection (b), the molder may sell the die, mold, form or pattern in a commercially reasonable manner pursuant to title 47, chapter 9, part 5.

Acts 1999, ch. 106, § 3.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

66-18-103. Conflicts with federal law.

A sale shall not be made under this chapter if it would be in violation of any right of a customer under federal patent or copyright law.

Acts 1999, ch. 106, § 4.

Chapter 19
Liens on Vehicles and Conveyances

Part 1
Miscellaneous Provisions

66-19-101. Lien for repairs to conveyances generally.

There shall be a lien upon any type of conveyance used in the transportation of persons or merchandise either by land or by water or through the air, propelled by any sort of power, for any repairs or improvements made or parts or fixtures furnished at the request of the owner, or the owner's agent, in favor of the mechanic, contractor, founder, or machinist who makes on any such vehicle mentioned any repairs or puts thereon any improvements, fixtures, machinery, or materials; provided, that:

  1. The lien shall not extend to, nor shall this section and § 66-19-102 be construed as in any way affecting the right and title acquired by a purchaser without notice; and
  2. Any notice of the lien provided to an owner or the owner's agent and any advertisement of a sale to satisfy the lien, if authorized, shall include a brief description of the conveyance against which the lien exists and the vehicle identification number, if applicable and ascertainable.

Acts 1909, ch. 150, § 1; Shan., § 3546a1; mod. Code 1932, § 7960; Acts 1953, ch. 141, § 1; T.C.A. (orig. ed.), § 64-1901; Acts 2014, ch. 886, § 1.

Cross-References. Enforcement of lien, § 66-21-101.

Extension of lien to aircraft, § 66-19-302.

Motor vehicles, filing instruments evidencing, §§ 55-3-125, 55-3-126.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Automobiles, §§ 24, 31; 18 Tenn. Juris., Mechanics' Liens, § 19.

Law Reviews.

Liens — Priority between Holder of Mechanic's Lien and Judgment Creditor, 11 Tenn. L. Rev. 204 (1933).

NOTES TO DECISIONS

1. Retention of Possession Unnecessary.

The statutory lien provided by this section and § 66-19-102 does not depend on the retention of possession and the lien is not lost by failure to retain possession. Gem Motor Co. v. Securities Inv. Co., 16 Tenn. App. 608, 65 S.W.2d 590, 1933 Tenn. App. LEXIS 35 (Tenn. Ct. App. 1933). See also Shaw v. Webb, 131 Tenn. 173, 174 S.W. 273, 1914 Tenn. LEXIS 96, L.R.A. (n.s.) 1915D1141 (1915).

2. Conditional Vendor's Lien — Status Against Statutory Lien.

The statutory lien provided by this section and § 66-19-102 is subordinate or inferior to the right of a conditional vendor. Shaw v. Webb, 131 Tenn. 173, 174 S.W. 273, 1914 Tenn. LEXIS 96, L.R.A. (n.s.) 1915D1141 (1915); Robinson Bros. Motor Co. v. Knight, 154 Tenn. 631, 288 S.W. 725, 1926 Tenn. LEXIS 162 (1926); Diamond Service Station v. Broadway Motor Co., 158 Tenn. 258, 12 S.W.2d 705, 1928 Tenn. LEXIS 148 (1929); Gem Motor Co. v. Securities Inv. Co., 16 Tenn. App. 608, 65 S.W.2d 590, 1933 Tenn. App. LEXIS 35 (Tenn. Ct. App. 1933).

Statutory lien of mechanic who repaired automobile on order of conditional vendee was inferior to right of conditional vendor since the mere fact that automobile is in need of repairs did not subordinate the rights of conditional vendor in the automobile to the rights of the mechanic claiming under a statutory lien. Shaw v. Webb, 131 Tenn. 173, 174 S.W. 273, 1914 Tenn. LEXIS 96, L.R.A. (n.s.) 1915D1141 (1915).

Although the conditional vendor had parted with possession, the placing of the automobile in the possession of the conditional purchaser should not be considered as a consent in advance to the subordination of the title retained for security for the payment of the purchase price. Such seller's intent, if any, to permit repairs and a consequent lien attaching to his interest should be manifested in the note contract. Shaw v. Webb, 131 Tenn. 173, 174 S.W. 273, 1914 Tenn. LEXIS 96, L.R.A. (n.s.) 1915D1141 (1915).

Lien of conditional vendor was superior to statutory lien of service station for tires furnished conditional vendee where vendor had no knowledge of transaction between vendee and service station. Diamond Service Station v. Broadway Motor Co., 158 Tenn. 258, 12 S.W.2d 705, 1928 Tenn. LEXIS 148 (1929).

3. Lien of Levy — Status Against Statutory Lien.

This lien is superior to the lien obtained by a creditor, holding a later justice's judgment, who was secured levy of execution upon the vehicle without sale. The provision that the lien shall be inferior to rights and title of a purchaser in good faith without notice does not apply to defeat the lien in such case. Gilson v. Lacey, 165 Tenn. 252, 55 S.W.2d 766, 1932 Tenn. LEXIS 42 (1932).

4. Priority.

In order to retain the priority of the lien obtained under this section over a prior perfected security interest the repairmen must retain possession of the property. Forrest Cate Ford, Inc. v. Fryar, 62 Tenn. App. 572, 465 S.W.2d 882, 1970 Tenn. App. LEXIS 285 (Tenn. Ct. App. 1970).

5. Lien Held Proper.

Creditor made repairs to debtor's vehicle either at the request of debtor, or at least with her knowledge and acquiescence, and irrespective of whether debtor actually requested the repairs, the court was satisfied that the creditor made the repairs itemized on the statement; accordingly, as long as debtor refused to pay for the repairs, the creditor was authorized to retain possession of the vehicle until the repairs were paid for, and his actions in doing so did not violate the automatic stay of 11 U.S.C. § 362(b)(3). In re Hamby, 360 B.R. 657, 2007 Bankr. LEXIS 241 (Bankr. E.D. Tenn. 2007).

6. No Remedy.

Maintenance company could not reach the proceeds from an owner's sale of the lien-subject aircraft because the lien followed the property, and there was no statutory lien on the proceeds resulting from the sale of the aircraft; as the company had no lien on the proceeds from the owner's sale of the aircraft, there was no remedy for the company to reach the proceeds. Embraer Aircraft Maint. Servs. v. AeroCentury Corp., — S.W.3d —, 2017 Tenn. LEXIS 729 (Tenn. Nov. 27, 2017).

Collateral References.

Automobile, lien for repairs to or services in connection with. 62 A.L.R. 1485.

Automobile, priority of statutory lien on, for storage or repairs as against rights of purchasers, attaching creditors, trustee in bankruptcy, which arose while car in possession of owner after accrual of storage or completion of repairs. 100 A.L.R. 80.

Garageman's lien for towing and storage of motor vehicle towed from private property on which vehicle was parked without permission. 85 A.L.R.3d 240.

Lien for storage of motor vehicle. 48 A.L.R.2d 894, 85 A.L.R.3d 199.

Lien for towing or storage, ordered by public officer, of motor vehicle. 85 A.L.R.3d 199.

Loss for garageman's lien on repaired vehicle by owner's use of vehicle. 74 A.L.R.4th 90.

Priority as between artisan's lien and chattel mortgage on automobiles. 36 A.L.R.2d 229.

Priority as between lien for motor vehicle repairs and the like, and right of seller under conditional sales contract. 36 A.L.R.2d 198.

66-19-102. Duration of lien.

The lien shall be upon and include the conveyance and improvements thereon, and continue for twelve (12) months after the work is finished or repairs made or material furnished and until the final decision of any suit that may be brought within that time for the debt to the contractor, or undertaker, or furnisher, and bind the conveyance and improvements thereon; provided, that the conveyance with improvements thereon has not been transferred in good faith to a purchaser without notice.

Acts 1909, ch. 150, § 2; Shan., § 3546a2; Acts 1919, ch. 55; mod. Code 1932, § 7961; modified; T.C.A. (orig. ed.), § 64-1902.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Automobiles, §§ 24, 31; 18 Tenn. Juris., Mechanics' Liens, § 19.

NOTES TO DECISIONS

1. Election of Remedies.

Where an artisan retained possession of an automobile, which he had repaired, he had a common law lien, and though he attached the car, which is an appropriate method of enforcing a statutory lien, where he dismissed the attachment before it was executed, he was not deprived of his right to the common law lien by the doctrine of election of inconsistent remedies, the status of the car not having been disturbed. Gem Motor Co. v. Securities Inv. Co., 16 Tenn. App. 608, 65 S.W.2d 590, 1933 Tenn. App. LEXIS 35 (Tenn. Ct. App. 1933).

Where the debtor agreed to treat the creditor's claim on his motor vehicle as secured in his confirmed plan, and began making payments on it, he could not, after the car was liened pursuant to T.C.A. § 66-19-103 by a garage and sold, modify his plan under 11 U.S.C. § 1329 to have the creditor's interest classified as unsecured. T.C.A. § 66-14-102 mandates that the garage keeper satisfy certain noticing requirements prior to auctioning a vehicle. In re Crisp, 430 B.R. 831, 2010 Bankr. LEXIS 1931 (Bankr. W.D. Tenn. June 17, 2010).

2. Acceptance of Note — Effect on Lien.

The creditor's acceptance of the contractor's notes to close open account for gasoline, kerosene, and tires as repairs did not extinguish the lien for the material furnished where the lien expired after the last note matured. Hamblen Motor Co. v. Miller & Harle, 150 Tenn. 602, 266 S.W. 99, 1924 Tenn. LEXIS 32 (1924).

66-19-103. Garagekeeper's or towing firm's lien.

      1. Garagekeepers or establishments substantially in the business of towing vehicles for hire, pursuant to title 55, chapter 16, hereinafter referred to as “towing firms,” shall be entitled to a lien upon all vehicles that lawfully come into their possession and are retained in their possession until all reasonable charges due are paid. A garagekeeper may, after thirty (30) days, enforce this lien in the manner prescribed for the enforcement of artisans' liens under §§ 66-14-102 - 66-14-106, except the garagekeeper shall:
        1. Only be required to advertise the sale one (1) time in a newspaper published in the place where the sale is to be held; and
        2. Include the vehicle identification number, if it is ascertainable, in the notice required pursuant to § 66-14-103 and in the advertisement of the sale described in § 66-14-104.
      2. If the motor vehicle, including any associated rental equipment, clearly identifies the rental company and a garagekeeper or towing firm lawfully comes into possession of the vehicle and any associated equipment, then the garagekeeper or towing firm shall notify the rental company at the address identified on the vehicle or associated equipment within three (3) working days of taking possession of such vehicle or equipment by registered mail return receipt requested.
    1. The commissioner of commerce and insurance or the commissioner's designee shall notify the commissioner of safety of violations of subdivision (a)(1). Upon receiving such notice, the commissioner of safety shall suspend any contract that the state may have for towing services with the garagekeeper or towing firm for a period of sixty (60) days or notify the appropriate authority to suspend all such contracts with the state.
    2. In addition to any other penalty provided for violation of this section, a violation of subdivision (a)(1) shall also be a violation of title 47, chapter 18, part 1, and the rental company may seek relief under that statute.
    3. A garagekeeper or towing firm may not collect any storage or related fees for any period of time in which the garagekeeper or towing firm was in violation of subdivision (a)(1) with respect to a motor vehicle or associated equipment.
    4. The commissioner of commerce and insurance is authorized to promulgate rules and regulations to effectuate the purposes of this subsection (a) in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
    5. Subdivisions (a)(1)(B) and (a)(2)-(5) and § 55-16-112 shall not apply to new or used motor vehicle dealers licensed under title 55, chapter 17, part 1.
  1. For purposes of this section, “garagekeeper” means any operator of a parking place or establishment, motor vehicle storage facility, or establishment for the servicing, repair or maintenance of vehicles.
  2. No person, firm, or entity shall have a right to a lien on any vehicle that has been towed without authorization of a police department or the owner of the vehicle or where the vehicle has been towed in violation of title 55, chapter 16. If the owner of the vehicle is not present, then prior to any person, firm or entity towing any vehicle, such person, firm or entity shall notify local law enforcement of the vehicle identification number (VIN), registration information, license plate number and description of the vehicle. Local law enforcement shall keep a record of all such information which shall be available for public inspection.
    1. Any authorization made by a police department to tow a vehicle shall be made in writing. Such authorization shall include:
      1. The name of the officer giving authorization;
      2. The year, make and model, and color of the vehicle to be towed;
      3. The reason for the tow;
      4. The license plate number, if any; and
      5. The vehicle identification number, if it is ascertainable.
    2. A copy of such authorization shall be posted with the vehicle by the officer giving authorization, and shall remain with the vehicle until the vehicle is claimed by the owner.
  3. No person, firm, or entity, unless licensed and regulated under title 55, chapter 17, part 1, shall have a right to a lien against a lienor, who is also the seller of such motor vehicle or who retains title under a title retention or conditional sale agreement, for repairs in excess of two hundred fifty dollars ($250) made on such motor vehicle, unless the person, firm or entity making the repairs has received a written authorization from lienor/seller to make such repairs on the motor vehicle.

Code 1932, § 7979; modified; T.C.A. (orig. ed.), § 64-1903; Acts 1983, ch. 463, § 3; 1984, ch. 866, § 1; 1996, ch. 868, §§ 1, 6, 8; 1997, ch. 73, §§ 1, 5; 1998, ch. 733, § 1; 1998, ch. 760, § 2; 1998, ch. 1027, §§ 1-3, 5; 1999, ch. 1, § 3; 1999, ch. 235, § 1; 2004, ch. 460, § 1; 2005, ch. 275, § 1; 2011, ch. 244, § 2; 2014, ch. 886, § 2.

Cross-References. Certified mail instead of registered mail, § 1-3-111.

Enforcement of lien, § 66-21-101.

Fee for storage beyond 60 days, § 55-23-103.

Fees for storing motor vehicle, § 55-23-103.

Notice of extension of fees for towing or storing motor vehicle, § 55-23-104.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Automobiles, § 24.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

NOTES TO DECISIONS

1. Nature and Operation of Lien.

The statute expressly declares, by the former reference to § 66-20-101, the lien of a garage keeper “to be the same as the innkeeper's lien at common law”; and a storage lien attaches to an automobile levied upon by a sheriff under process, taken from the conditional purchaser, and stored by the sheriff, which lien for storage charges is superior to the title retained right of the conditional seller of the automobile. The possession of the sheriff is, for test purpose, equivalent to that of the conditional seller who stores such a car. McJunkin v. Chattanooga Garage, 166 Tenn. 457, 63 S.W.2d 517, 1933 Tenn. LEXIS 99 (1933).

Creditor made repairs to debtor's vehicle either at the request of debtor, or at least with her knowledge and acquiescence, and irrespective of whether debtor actually requested the repairs, the court was satisfied that the creditor made the repairs itemized on the statement; accordingly, as long as debtor refused to pay for the repairs, the creditor was authorized to retain possession of the vehicle until the repairs were paid for, and his actions in doing so did not violate the automatic stay of 11 U.S.C. § 362(b)(3). In re Hamby, 360 B.R. 657, 2007 Bankr. LEXIS 241 (Bankr. E.D. Tenn. 2007).

Where the debtor agreed to treat the creditor's claim on his motor vehicle as secured in his confirmed plan, and began making payments on it, he could not, after the car was liened pursuant to T.C.A. § 66-19-103 by a garage and sold, modify his plan under 11 U.S.C. § 1329 to have the creditor's interest classified as unsecured. In re Crisp, 430 B.R. 831, 2010 Bankr. LEXIS 1931 (Bankr. W.D. Tenn. June 17, 2010).

2. Levying Officer — Powers.

A levying officer, under process against the conditional buyer of an automobile, has the right to store the car for its protection and preservation, since such inures to the benefit of the title retention holder, whose title is but a lien. McJunkin v. Chattanooga Garage, 166 Tenn. 457, 63 S.W.2d 517, 1933 Tenn. LEXIS 99 (1933).

Collateral References.

Assignee's right to enforce lien on automobile for storage. 48 A.L.R.2d 894, 85 A.L.R.3d 199.

Automobile, lien for storage of. 48 A.L.R.2d 894, 85 A.L.R.3d 199.

Garageman's lien for towing and storage of motor vehicle towed from private property on which vehicle was parked without permission. 85 A.L.R.3d 240.

Lien for towing or storage, ordered by public officer, of motor vehicle. 85 A.L.R.3d 199.

Public official, liability of owner for storage of or services in connection with automobile under authority of. 36 A.L.R. 955, 50 A.L.R. 1309.

Sale of vehicle without hearing. 64 A.L.R.3d 814.

66-19-104. Duty to inform consumer of rights.

  1. Before beginning any repair work on a motor vehicle, an automotive repair facility shall inform the consumer for whom the repairs are to be done of the following rights:
    1. That a consumer:
      1. May request a written estimate for repairs that cost in excess of two hundred fifty dollars ($250); and
      2. May not be charged an amount over twenty-five percent (25%) in excess of the written estimate without the consumer's consent or good faith attempt to acquire the consent; and
    2. That repairs not originally authorized by the consumer may not be charged to the consumer without the consumer's consent unless a repair facility makes a good faith attempt to acquire the consent prior to providing additional repairs. A good faith attempt shall entail at least an attempted telephone call to the consumer.
  2. The consumer's rights provided in subsection (a) shall be:
    1. Displayed immediately before the space for the signature of the consumer conspicuously in easily readable type;
    2. Physically separated from the other terms of the form used for authorization of repairs; and
    3. Listed under the printed heading “Consumer's Rights.”
  3. If any automotive repair facility informs a consumer orally of the consumer's rights, the facility shall record in writing:
    1. The name of the persons who were notified or whom the facility attempted to notify;
    2. The date and time of the notification or attempt; and
    3. The signature of the person who made the notification or attempted notification.
  4. Failure to comply with this section shall abrogate the repair facility's rights under § 66-19-103.
  5. Nothing in this section shall apply to any person or entity licensed under title 55, chapter 17.

Acts 2001, ch. 194, § 1–3.

66-19-105. Abandoned vehicles on campgrounds.

  1. Campgrounds substantially in the business of providing accommodations for recreational vehicles, as defined in § 55-50-102, shall be entitled to a lien upon all abandoned vehicles that lawfully come onto their premises. Such abandoned vehicles shall be retained in the campground owners' or managers' possession until all reasonable charges due are paid. A campground may, after sixty (60) days, enforce this lien in the manner prescribed for the enforcement of artisans' liens under §§ 66-14-102 — 66-14-106, except the campground shall:
    1. Only be required to advertise the sale of an abandoned vehicle one (1) time in a newspaper published in the place where the sale is to be held; and
    2. Include the vehicle identification number, if it is ascertainable, in the notice required pursuant to § 66-14-103 and in the advertisement of the sale described in § 66-14-104.
  2. A campground may collect any storage or related fees for any period of time in which a vehicle or associated equipment is abandoned upon the campground premises.
  3. The commissioner of commerce and insurance is authorized to promulgate rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to effectuate the purposes of this section.
  4. For purposes of providing notice to persons having an interest as provided in § 66-14-102, the campground shall notify any person that the campground:
    1. Has actual notice of an interest; and
    2. If the property is required to have a title, conduct a search request with the department of safety, or such other state where the vehicle license tag indicates it is registered, and in the case of property which is not titled as a motor vehicle, submit a search request for the filing of a security interest under the Uniform Commercial Code, compiled in title 47, chapters 1-9, with the secretary of state and, in the state that is the apparent residence of the owner of the property, if other than Tennessee. The campground owner shall send, by certified mail, return receipt requested, notice of intent to enforce the lien to all known owners, all known interested parties, and to any other or interested party discernable through reasonable effort as provided in this subsection (d). For purposes of notice, there shall be a rebuttable presumption of reasonable inquiry and notice to interested parties, if the inquiry and notice provided in this subsection (d) is fulfilled.

Acts 2003, ch. 271, § 1; 2014, ch. 886, § 3.

Part 2
Liens on Boats

66-19-201. Possessory lien on boats.

Any debt contracted by the master, owner, agent, or consignee of any boat within this state on account of any work done, or materials or articles furnished for the building, repairing, fitting, furnishing, or equipping of such boat, or for wages due to the employees of such debtor, or for lease rent for dockage or storage, shall be a possessory lien upon such boat, its tackle, and furniture. It is the legislative intent that the holder of a material and furnishings lien shall not be able to charge additional dockage and storage during that period when the holder is exercising this lien.

Code 1858, § 1991 (deriv. Acts 1833, ch. 35, § 1); Shan., § 3547; mod. Code 1932, § 7962; Acts 1981, ch. 482, § 1; T.C.A. (orig. ed.), § 64-1904.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Law Reviews.

Liens — Priority of Conditional Vendor's Lien Over Warehousemen's Lien, 8 Tenn. L. Rev. 202 (1930).

NOTES TO DECISIONS

1. Nature of Lien.

The furnisher's lien upon a steamboat is a creature of statute. Casey & Hedges Mfg. Co. v. Weatherly, 97 Tenn. 297, 37 S.W. 6, 1896 Tenn. LEXIS 143 (1896).

2. Lienable Items.

Provisions or groceries furnished for the use of the boat are lienable items. Greenlaw v. Potter, 37 Tenn. 390, 1858 Tenn. LEXIS 23 (1858).

No lien exists to secure damages for the breach of a contract of affreightment in failing to deliver articles shipped on the boat. Waggoner v. St. John, 57 Tenn. 503, 1873 Tenn. LEXIS 251 (1873).

3. Jurisdiction to Enforce Lien.

These proceedings are in personam, and not admiralty suits in rem, and our state courts, therefore, have jurisdiction. Waggoner v. St. John, 57 Tenn. 503, 1873 Tenn. LEXIS 251 (1873); Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

Chancery court has jurisdiction to enforce a furnisher's lien on a steamboat. Casey & Hedges Mfg. Co. v. Weatherly, 97 Tenn. 297, 37 S.W. 6, 1896 Tenn. LEXIS 143 (1896).

4. Citizenship of Parties Immaterial.

The lien exists if the debt be contracted here, and the materials were furnished here, and the boat be here, it matters not of what state or country the parties are citizens or residents. Hill v. Mills, 28 Tenn. 629, 1849 Tenn. LEXIS 98 (1849); Emory Iron & Coal Co. v. Wood, 53 Tenn. 198, 1871 Tenn. LEXIS 344 (Tenn. Oct. 4, 1871); Waggoner v. St. John, 57 Tenn. 503, 1873 Tenn. LEXIS 251 (1873); Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

5. Lessee Incurring Lien.

The lien exists even though the stores, provisions, and supplies are furnished to the lessee operating the boat under a charter party, which bound the charterer to discharge all debts contracted by or for the use of the boat, during the period of the contract. Greenlaw v. Potter, 37 Tenn. 390, 1858 Tenn. LEXIS 23 (1858); Waggoner v. St. John, 57 Tenn. 503, 1873 Tenn. LEXIS 251 (1873).

6. Averment of Claim.

Where the lien claimant states his claim to be for wages as an engineer or hand on the boat, being for work and labor done, prima facie, the averment is for wages due him as a hand or laborer, and is good upon demurrer. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

7. Suit Preventing Bar of Lien.

Where a lien claimant joins in an attachment suit commenced before the bar of his lien, though he joins in such suit more than three months after the creation of the lien, his lien is thereby saved from the bar. Emory Iron & Coal Co. v. Wood, 53 Tenn. 198, 1871 Tenn. LEXIS 344 (Tenn. Oct. 4, 1871); Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

8. Judgment on Debt — Effect.

The recovery of a judgment on a lien debt or claim is no waiver of the lien. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

9. Federal Court Actions.

While a federal court is not bound by this section, it may be considered in determining whether a lienholder has been guilty of laches in delaying for more than a year to assert his lien. Waterways Marine, Inc. v. Brooks Liquid Transp., Inc., 291 F. Supp. 703, 1968 U.S. Dist. LEXIS 9883 (N.D. Ill. 1968).

66-19-202. Pleading of lienor.

The pleading of the lienor shall be in writing, on oath, stating:

  1. By whom and for what boat the debt was contracted;
  2. The items composing the debt;
  3. That it is justly due and unpaid; and
  4. That demand has been made of one (1) of the defendants, or of the captain or agent of the defendants, being at the time in the county.

Code 1858, § 3551 (deriv. Acts 1833, ch. 35, §§ 2, 10); Shan., § 5314; mod. Code 1932, § 7963; T.C.A. (orig. ed.), § 64-1905.

NOTES TO DECISIONS

1. Timely Petition — Sufficient Showing.

If the account, made an exhibit to the petition, gives the dates of the items, showing that they were within the three months, a motion to dismiss the petition, for its failure to state that fact, will not lie. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

2. Place of Furnishing — Sufficient Showing.

Where the account filed with the petition, and made a part of it, giving the items and dates of furnishing them, and showing, by its heading, that this was done at “Nashville, Tenn.,” sufficiently shows that the work was done and materials furnished in the state. Emory Iron & Coal Co. v. Wood, 53 Tenn. 198, 1871 Tenn. LEXIS 344 (Tenn. Oct. 4, 1871); Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

3. Itemizing — Necessity.

Where the debt has been liquidated by note, the items composing the debt need not be stated, if the note shows that it was for such purpose. Hill v. Mills, 28 Tenn. 629, 1849 Tenn. LEXIS 98 (1849); Greenlaw v. Potter, 37 Tenn. 390, 1858 Tenn. LEXIS 23 (1858).

4. Failure to Itemize — Waiver.

The failure of the plaintiff to specify, in his petition for the writ of attachment, the items composing his claim, is cured by the defendant in taking issue upon the allegation of indebtedness in the declaration. Waggoner v. St. John, 57 Tenn. 503, 1873 Tenn. LEXIS 251 (1873).

5. Failure to Make Demand as Defense.

The failure to make demand for payment, as required before instituting a suit to enforce the lien, is a good defense, and may be relied on in the answer. Casey & Hedges Mfg. Co. v. Weatherly, 101 Tenn. 318, 47 S.W. 432, 1898 Tenn. LEXIS 67 (1898).

6. Waiver of Right to Lien.

Right to the lien is not waived by taking personal judgment. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

An agreement to give credit for part of the contract price beyond the life of the lien on the boat, coupled with retention by the furnisher of title to the property furnished, waives the right to the statutory lien; and the owner's failure to comply with the contract does not restore the right to a lien, where such failure is due, in part at least, to the furnisher's fault. Casey & Hedges Mfg. Co. v. Weatherly, 101 Tenn. 318, 47 S.W. 432, 1898 Tenn. LEXIS 67 (1898).

7. Findings of Fact — Conclusiveness.

A suit to enforce a lien on a steamboat is a suit at law; and, in the absence of a bill of exceptions, the finding of the court on the facts is conclusive. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

66-19-203. Joinder of plaintiffs in suit.

Any two (2) or more of such creditors or claimants may join in the same warrant; and any such who has not joined may be made a party plaintiff in the suit, on motion, before the trial; and in such case the party shall be liable in all things, just as the party would have been had the party originally joined in the suit.

Code 1858, § 3557 (deriv. Acts 1833, ch. 35, § 5); Shan., § 5320; mod. Code 1932, § 7967; T.C.A. (orig. ed.), § 64-1906.

Cross-References. Permissive joinder of parties, Tenn. R. Civ. P. 20.

Textbooks. Tennessee Jurisprudence, 20 Tenn. Juris., Parties, § 6.

66-19-204. Plaintiffs' bond.

Before issuing process against the boat, the judge or clerk shall take bond, with security, from the plaintiff or complainant, in the penalty of two hundred fifty dollars ($250), payable to the defendant, conditioned to prosecute the suit with effect, or to pay all costs and damages to the defendant, and all claimants subsequently applying to be made parties to the suit shall first be required to sign the bond before being admitted as plaintiffs or complainants.

Code 1858, § 3553 (deriv. Acts 1833, ch. 35, § 10); Shan., § 5316; mod. Code 1932, § 7964; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), § 64-1907.

66-19-205. Warrant to attach boat.

Following the taking of the bond provided for in § 66-19-204, the judge shall issue the process, against the owners of the boat, or some of them, and direct it to the sheriff of the county, commanding the sheriff to attach the boat, its furniture and tackle, or so much thereof as may be necessary, and safely keep the same until security is given, or further order of the court.

Code 1858, § 3554 (deriv. Acts 1833, ch. 35, § 2); Shan., § 5317; mod. Code 1932, § 7965; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), § 64-1908.

NOTES TO DECISIONS

1. Warrant — Service.

The warrant should be against the owner of the boat, but its failure in this respect is cured by his appearance. If the owner cannot be served, the attachment of the boat will be sufficient, in lieu of personal service, for the purpose of a judgment in rem against the property attached. Waggoner v. St. John, 57 Tenn. 503, 1873 Tenn. LEXIS 251 (1873).

66-19-206. Retention of possession by sheriff.

The sheriff, after seizing the property, shall retain possession of it until the termination of the action, unless bond and security are given in a penalty as prescribed by statute, payable to the plaintiff or complainant conditioned to abide by and perform the judgment of the court.

Code 1858, § 3555 (deriv. Acts 1833, ch. 35, § 3); Shan., § 5318; mod. Code 1932, § 7966; T.C.A. (orig. ed.), § 64-1909.

NOTES TO DECISIONS

1. Replevy Bond.

2. —Amount.

Replevy of boat is on bond and security in double the amount of the debt. Emory Iron & Coal Co. v. Wood, 53 Tenn. 198, 1871 Tenn. LEXIS 344 (Tenn. Oct. 4, 1871); Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

3. —Bond as Indemnity.

Replevy bond stands as indemnity in the stead of the boat. Casey & Hedges Mfg. Co. v. Weatherly, 97 Tenn. 297, 37 S.W. 6, 1896 Tenn. LEXIS 143 (1896).

4. —Beneficiaries.

A replevy bond will inure to the benefit of claimants in suit, equally. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

5. Attachment by Another Creditor after Release by Replevy Bond.

Boat released by replevy bond may be attached by another creditor, either in the original suit or independently. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

66-19-207. Duplication of attachments prohibited.

After a seizure of a boat at the suit of one (1) or more creditors and/or claimants, no other creditors and/or claimants shall have process to attach the boat, but all of them may be made parties, as prescribed in § 66-19-203.

Code 1858, § 3558 (deriv. Acts 1833, ch. 35, § 7); Shan., § 5321; mod. Code 1932, § 7968; T.C.A. (orig. ed.), § 64-1910.

NOTES TO DECISIONS

1. Purpose.

The prohibition of this section was intended to prevent an unnecessary accumulation of costs, and the clashing which might ensue from the suing out of several warrants in the hands of different officers, and returnable, it might be, to different tribunals. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

2. Application.

The prohibition of this section applies only where the boat is in the custody of the law under the first attachment. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

3. Noncompliance — Remedy.

Remedy for noncompliance with any of the requisites necessary to make a creditor a party is by a motion to take the papers from the file, and not by demurrer to the declaration for its failure to state how the claimant became a party, for the statute authorizes the claimant to make himself a party plaintiff by motion. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

66-19-208. Sale of boat.

If no bond has been given, the court shall, at the appearance term, order the boat, or such part of the furniture and tackle as may be sufficient, to be sold for the satisfaction of the judgment; and the sheriff shall accordingly sell the same, first advertising the time and place of sale at least ten (10) days prior to the sale.

Code 1858, § 3560 (deriv. Acts 1833, ch. 35, § 6); Shan., § 5323; Code 1932, § 7969; T.C.A. (orig. ed.), § 64-1911.

66-19-209. Protection of prior liens.

Where there are prior liens on the boat by judgments obtained by the general creditors of the owners, the sheriff shall attach the boat, subject to such prior liens, and when the boat is sold to satisfy such prior liens, the surplus, if any, shall be paid into court, where the attachment is pending, to be paid to the attaching creditors, if they obtain judgment.

Code 1858, § 3561 (deriv. Acts 1833, ch. 35, § 8); Shan., § 5324; Code 1932, § 7970; T.C.A. (orig. ed.), § 64-1912.

66-19-210. Apportionment of proceeds of sale.

If the proceeds of the boat, tackle, and furniture are not sufficient to pay off all the creditors who have joined in the suit, the proceeds shall be ratably divided among them.

Code 1858, § 3562 (deriv. Acts 1833, ch. 35, § 9); Shan., § 5325; Code 1932, § 7971; T.C.A. (orig. ed.), § 64-1913.

NOTES TO DECISIONS

1. Pro Rata on Replevy Bond Recovery.

The equality among the creditors is expressly in the proceeds of the sale of the boat, but the other provisions fairly imply that the penalty of the replevy bond shall cover the entire debt claimed at the time, and, of course, all the claimants would be equally entitled to its benefits. Ferguson v. Vance, 71 Tenn. 90, 1879 Tenn. LEXIS 40 (1879).

66-19-211. Wharfage lien.

The owners and/or proprietors of wharves and landings, where wharfage is allowed by law, have a lien on boats, rafts, and other water crafts, and their loading, for the payment of their wharfage fees, and the same may be enforced by attachment within three (3) months after the lien accrued.

Code 1858, § 1993; Shan., § 3549; Code 1932, § 7972; T.C.A. (orig. ed.), § 64-1914.

Cross-References. Enforcement of lien, § 66-21-101.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

66-19-212. Marina lien — Definitions.

  1. A marina shall be entitled to a lien upon any vessel or personal watercraft, which lawfully comes into the marina's possession and is retained pending payment of all reasonable charges due. IF three (3) months or more have elapsed since the contractually-prescribed due date for payment of such charges, THEN the marina may enforce such lien in the manner prescribed for the enforcement of artisans' liens under §§ 66-14-102 — 66-14-106, after reasonable inquiry and notice to interested parties.
  2. Notwithstanding any law to the contrary,
    1. IF, in the case of a personal watercraft, the marina submits a search request for the filing of a security interest under the Uniform Commercial Code, compiled in title 47, chapters 1-9; OR, in the case of a vessel, the marina submits a search request to the United States coast guard; AND
    2. IF, thereafter, the marina sends, by certified mail, return receipt requested, notice of intent to enforce the lien to all known owners, all known interested parties, and to any other owner or interested party discernible through reasonable effort; AND
    3. IF, thereafter, the marina advertises notice of intent to enforce the lien at least once a week for two (2) or more consecutive weeks in a newspaper of general circulation within the locality where the sale is to be held; THEN
    4. For purposes of subsection (a), there shall be a rebuttable presumption of reasonable inquiry and notice to interested parties.
  3. In addition to the method of enforcement authorized by this section, the lien may be enforced, in the alternative, by the marina complying with the provisions contained in the other sections of this part.
  4. As used in this section:
    1. “Marina” means a marina, boat dock, dry dock, or dry storage facility;
    2. “Personal watercraft” has the same meaning as this term is defined in § 69-9-501; and
    3. “Vessel” has the same meaning as this term is defined in § 69-9-204.

Acts 2001, ch. 210, § 1.

66-19-213. Marina's lien on floating cabin.

    1. A marina has a lien on a floating cabin for any assessment levied against the floating cabin pursuant to a written lease or service contract between the marina and the owner of the floating cabin from the time the assessment becomes due, which lien may be enforced by judicial action.
    2. Notwithstanding subdivision (a)(1), a written lease or service contract between a marina and the owner of a floating cabin may provide that the marina's lien may be enforced in like manner as a security interest under title 47, chapter 9, if the marina gives notice of its action to the owner and to all lienholders of record.
    3. Notice shall be deemed sufficient if sent by United States mail, postage prepaid:
      1. If to the owner, at the address of the floating cabin, or, if different, the last address for the owner on file with the marina; or
      2. If to a lienholder, other interested party, or the nominee of record, at the address set forth in an instrument of record; or, if different, at such other address as the lienholder or other interested party may have on file with the marina.
    4. Notice shall be deemed received three (3) days after deposit in the United States mail, postage prepaid. Fees, service charges, late charges, fines, and interest are enforceable as assessments under this section unless the written lease or service contract between the marina and the owner of the floating cabin provides otherwise. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due.
    1. A lien under this section is prior to all other liens and encumbrances on a floating cabin, except:
      1. Liens and encumbrances recorded before the date of the written lease or service contract between the marina and the owner of the floating cabin;
      2. A first or purchase money lien recorded before the date on which the assessment sought to be enforced became delinquent; and
      3. Liens for taxes and other governmental assessments or charges against the floating cabin.
    2. Upon a foreclosure action initiated by a lienholder or the marina under title 47, chapter 9, the marina is entitled to a priority in the proceeds from the foreclosure sale to satisfy the lien under subsection (a) up to the extent of the assessments that are past due during the twelve (12) months immediately preceding institution of an action to enforce the lien. However, notwithstanding this subsection (b) or any law to the contrary:
      1. Any foreclosure by the marina of its lien for assessments shall be subject to any prior lien encumbering the floating cabin and shall not extinguish such lien;
      2. Upon any foreclosure and sale by the holder of a security interest, the sale and foreclosure will be subject to the marina lien up to the payment priority amount set forth in this subdivision (b)(2); and
      3. Any right of foreclosure or priority of the marina shall not be transferable and shall be extinguished if assigned or transferred to a third party.
  1. If two (2) or more marinas have liens for assessments at any time on the same floating cabin, the priority of the liens shall be determined based on the date that each lien was created, with an earlier created lien having priority over a later created lien.
  2. A lien for any delinquent assessment under this section up to the priority in payment provided in subdivision (b)(2) is perfected without recording. Any other delinquent amount above the priority of payment provided in subdivision (b)(2) is perfected by filing a financing statement with the secretary of state, and shall have priority over any subsequently filed liens.
  3. A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within one (1) year after the date the lien for the assessment becomes effective.
  4. A judgment or decree in any action brought under this section may include costs and reasonable attorney's fees for the prevailing party.
  5. The marina, upon written request, shall furnish to an owner or to a holder of any security interest encumbering the floating cabin, or the owner's or holder's respective authorized agents, a written statement setting forth the amount of unpaid assessments against the floating cabin. The statement must be furnished within seven (7) days after receipt of the written request and is binding on the marina.
  6. As used in this section:
    1. “Floating cabin” means a watercraft or other floating structure:
      1. Primarily designed and used for human habitation or occupation; and
      2. Not primarily designed or used for navigation or transportation on water; and
    2. “Marina” means a marina, boat dock, dry dock, or dry storage facility.

Acts 2017, ch. 314, § 1.

Compiler's Notes. Acts 2017, ch. 314, § 2 provided that the act, which enacted this section, shall apply to charges accruing against floating cabins or after July 1, 2017.

Effective Dates. Acts 2017, ch. 314, § 2. July 1, 2017.

Part 3
Lien Against Aircraft

66-19-301. Filing of lien — Notice.

  1. A lien against any type of conveyance used in the transportation of persons or merchandise through the air, propelled by any sort of power, asserted pursuant to § 66-19-101, shall be filed with the register for the county in which the actions giving rise to the lien occurred, within ninety (90) days after the work is finished or repairs made or materials furnished.
  2. A copy of the notice of lien to be filed shall be sent by first class mail to the last known address of the party for whose account the work was performed, repairs made or materials furnished, and upon any other party known by the party asserting the lien to claim an ownership interest in the subject property.
  3. The notice prescribed in subsection (a) shall contain:
    1. The name of the party asserting the lien;
    2. The name of the party for whom the work was performed, repairs made or materials furnished, and of any other party known to claim an ownership interest in the subject property;
    3. A statement of the amount claimed and the date or dates the amount became due;
    4. A description of the property against which the lien exists;
    5. A brief description of the nature of services giving rise to the lien; and
    6. The signature, under oath, of the party asserting the lien or of such party's authorized representative.

Acts 1990, ch. 756, § 1.

66-19-302. Scope of lien — Parts, repairs and improvements — Lessees.

  1. The lien created by § 66-19-101 also extends to any aircraft engine, aircraft propeller, and any other part or spare part used in, or which under normal circumstances would be used in, an aircraft, aircraft engine or aircraft propeller, whether or not any such component has been attached to or incorporated into an aircraft.
  2. The lien created by § 66-19-101, as to any type of conveyance used in the transportation of persons or merchandise through the air, propelled by any sort of power, shall also arise for any repairs or improvements made or parts or fixtures furnished at the request of any lessee of the subject property or any other party having possession of the subject property with the knowledge or permission of the owner or owner's agent.

Acts 1990, ch. 756, § 1.

Chapter 20
Liens on Animals

66-20-101. Pasturage lien.

When any horse or other animal is received to pasture for a consideration, the farmer shall have a lien upon the animal for the farmer's proper charges, the same as the innkeeper's lien at common law; and in addition the farmer shall have a statutory lien for six (6) months.

Acts 1868-1869, ch. 16, § 1; Shan., § 3552; Code 1932, § 7975; T.C.A. (orig. ed.), § 64-2001.

Cross-References. Enforcement of lien, § 66-21-101.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Tennessee Jurisprudence, 2 Tenn. Juris., Animals, § 37; 4 Tenn. Juris., Automobiles, § 24.

Law Reviews.

The Constitutionality of Prejudgment Seizure of Property Under Tennessee Law (Roger W. Dickson), 38 Tenn. L. Rev. 575 (1971).

NOTES TO DECISIONS

1. Nature of Lien.

One who takes a horse to pasture, feed, and train, having it in possession has a lien thereon, for sum due him, at common law. This lien is superior to that of a mortgagee who knows that the owner has so placed the horse. Farney v. Kerr, 48 S.W. 103, 1897 Tenn. Ch. App. LEXIS 143 (1897).

A common-law lien, as distinguished from a contract or statutory lien, usually attaches to property in possession of the lienor without reference to ownership and overrides all other rights in the property. Knoxville Outfitting Co. v. Knoxville Fireproof Storage Co., 160 Tenn. 203, 22 S.W.2d 354, 1929 Tenn. LEXIS 92 (1929).

At common law, liens of artisans and innkeepers were superior to an unrecorded retention of title lien. McJunkin v. Chattanooga Garage, 166 Tenn. 457, 63 S.W.2d 517, 1933 Tenn. LEXIS 99 (1933).

66-20-102. Lien on female for service of male.

  1. Where the lien for pasturage shall occur in virtue of § 66-20-101, the charges shall include also those for the service of any jack, bull, ram, or boar; provided, that the charge for the service of such animal to the female shall have been agreed upon between the parties.
  2. This section shall likewise include the service of any stud or stallion.

Acts 1868-1869, ch. 16, § 2; Shan., § 3553; mod. Code 1932, § 7976; mod. C. Supp. 1950, § 7976; Acts 1959, ch. 220, § 1; T.C.A. (orig. ed.), § 64-2002.

Law Reviews.

Liens — Priority of Conditional Vendor's Lien Over Warehouseman's Lien, 8 Tenn. L. Rev. 202 (1930).

66-20-103. Livery stable keeper's lien.

Livery stable keepers shall be entitled to the same lien provided for in § 66-20-101 on all stock received by them for board and feed, or vehicle kept and/or conditioned, until all reasonable charges are paid.

Acts 1868-1869, ch. 16, § 3; Shan., § 3556; mod. Code 1932, § 7979; modified; T.C.A. (orig. ed.), § 64-2003.

Cross-References. Enforcement of lien, § 66-21-101.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Tennessee Jurisprudence, 2 Tenn. Juris., Animals, § 37; 4 Tenn. Juris., Automobiles, § 24; 18 Tenn. Juris., Livery Stables, § 1.

NOTES TO DECISIONS

1. Nature of Lien.

The lien exists by statute, and not by common law. McGhee v. Edwards, 87 Tenn. 506, 11 S.W. 316, 1889 Tenn. LEXIS 6, 3 L.R.A. 654 (1889); Nance v. O. K. Houck Piano Co., 128 Tenn. 1, 155 S.W. 1172, 1914D Am. Ann. Cas. 834, 1913 Tenn. LEXIS 18 (1913).

2. Status of Lien as Against Registered Mortgage.

This lien is inferior to the lien created by registered mortgage, where the livery stable keeper subsequently keeps and feeds the horse, without actual knowledge of the mortgage, and before its maturity, under a contract made with the mortgagor in possession according to the terms of the mortgage, without the knowledge of the mortgagee that the horse is being so kept and fed. McGhee v. Edwards, 87 Tenn. 506, 11 S.W. 316, 1889 Tenn. LEXIS 6, 3 L.R.A. 654 (1889).

3. Owner's Temporary Use of Animal — Effect.

The lien is not lost because the owner is permitted to use his horse temporarily, where it is well understood that the possession will in a short time be restored; and the lien is superior to the lien of an execution levied upon the horse while so temporarily in the owner's possession and use. Caldwell v. Tutt, 78 Tenn. 258, 1882 Tenn. LEXIS 172, 43 Am. Rep. 307 (1882); McGill v. Chilhowee Lumber Co., 111 Tenn. 552, 82 S.W. 210, 1903 Tenn. LEXIS 45 (1904).

4. Lienor's Offer to Sell — Effect.

The lienor offering to sell the horse to pay the lien debt will not be treated as guilty of a conversion, where it appears that the act of offering to sell was not in defiance of the owner's title, but only an irregular mode of attempting to enforce his lien. Shields v. Dodge, 82 Tenn. 356, 1884 Tenn. LEXIS 135 (1884).

66-20-104. Lien on offspring for service of male.

  1. Any person keeping a jack, bull, ram, or boar, for public use, shall have a lien on the offspring of the same for the season charge to be paid.
  2. This section shall likewise include the service of any stud or stallion.

Acts 1873, ch. 93; Shan., § 3554; mod. Code 1932, § 7977; mod. C. Supp. 1950, § 7977; Acts 1959, ch. 220, § 2; T.C.A. (orig. ed.), § 64-2004.

Cross-References. Enforcement of lien, § 66-21-101.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 471.

Tennessee Jurisprudence, 2 Tenn. Juris., Animals, § 37.

NOTES TO DECISIONS

1. Priority of Lien.

The lien on the offspring is superior to the right of a mortgagee to whom the female is conveyed, and whose mortgage is registered, before the young is dropped, for all persons must take notice of the lien at their peril. Sims v. Bradford, 80 Tenn. 434, 1883 Tenn. LEXIS 192 (1883); Ellis v. Reaves, 94 Tenn. 210, 28 S.W. 1089, 1894 Tenn. LEXIS 35 (1895).

2. Basis for Attachment.

The ground of the attachment is the lien for the price of the season, and the allegation in the affidavit for the attachment that the offspring had been fraudulently conveyed to the defendant is merely an averment that the deed is void in law as against the plaintiff's preexisting lien, and the allegation, being unnecessary, may be treated as surplusage. Sims v. Bradford, 80 Tenn. 434, 1883 Tenn. LEXIS 192 (1883).

66-20-105. Duration of lien on offspring.

  1. The lien provided for in § 66-20-104, so far as it affects the offspring of jacks and bulls shall exist for two (2) years from the birth of such offspring and so far as it affects rams and boars shall continue for twelve (12) months from the birth of such offspring.
  2. This section shall likewise include the service of any stud or stallion.

Acts 1873, ch. 93, § 1; 1879, ch. 259, § 1; 1883, ch. 126, § 1; Shan., § 3555; Acts 1923, ch. 33; mod. Code 1932, § 7978; Acts 1941, ch. 134, § 1; mod. C. Supp. 1950, § 7978; Acts 1959, ch. 220, § 3; T.C.A. (orig. ed.), § 64-2005.

66-20-106. Commercial feed lot proprietors' and operators' lien.

Commercial feed lot proprietors and operators shall be entitled to the same lien provided for in § 66-20-101 on all livestock received by them covering all reasonable charges in caring for, boarding, feeding, or pasturing such livestock, until the same have been paid.

Acts 1963, ch. 123, § 1; T.C.A., § 64-2006.

66-20-107. Lien on female and offspring for artificial insemination.

  1. When any female animal is inseminated by artificial means for a fee, the person providing the service shall have for a charge a lien on the female and on any offspring resulting from such service.
  2. The duration of the lien on offspring shall be for twelve (12) months from the date of birth of such offspring.

Acts 1965, ch. 102, § 1; T.C.A., § 64-2007.

Chapter 21
Recording and Enforcement of Liens

Part 1
General Provisions

66-21-101. Enforcement of liens where method not prescribed.

Any and all liens given by statute on personal property, except attorney's lien, where no method of enforcing the same is specifically prescribed by statute, may be enforced by original attachment issued by any court having jurisdiction of the amount claimed to be due without necessity of fiat, on affidavit that the debt is due and unpaid, to be levied on the property upon which the lien exists, be it either in the hands of the creditor, owner, or other party not an innocent purchaser.

Acts 1889, ch. 12, § 1; Shan., § 5330; mod. Code 1932, § 8042; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), § 64-2101.

Cross-References. Damages assessed against tracts of land for lateral drains connecting to levee and drainage improvements, § 69-6-718.

Enforcement of tax liens, title 67, ch. 5, part 24.

Lien on land for maintenance and/or administration certificates of drainage or levee districts, § 69-6-918.

Liens on land restored from coal mining, § 59-8-302.

Tax liens, title 67, ch. 5, part 21.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Automobiles, § 24; 18 Tenn. Juris., Liens, §§ 3, 11.

Law Reviews.

The Tennessee Court System — Chancery Court (Frederic S. Le Clercq), 8 Mem. St. U.L. Rev. 281 (1977).

NOTES TO DECISIONS

1. Construction with Other Statutes.

Section 67-5-802, insofar as it pertains to a lien, should be construed in pari materia with § 66-21-101, which provides for the enforcement of liens on personalty when no method of enforcing them is otherwise provided. When so construed, adequate means for enforcing the lien in question are provided. Although the mobile home is treated under § 67-5-802 as real property for tax purposes, it is treated as personal property for purposes of allowing the lien in favor of the landowner, as provided by § 67-5-802. Therefore, there is no impediment to the employment of § 66-21-101 for the enforcement of this lien, although § 66-21-101 provides for the enforcement only of liens upon personal property. Belle-Aire Village, Inc. v. Ghorley, 574 S.W.2d 723, 1978 Tenn. LEXIS 680 (Tenn. 1978).

2. Method of Enforcement.

A court of equity may enforce a statutory lien by attachment of property or otherwise impounding it, which is a proceeding quasi in rem, where the statute creating the lien provides no method of enforcing it. Potter v. Foster, 16 Tenn. App. 336, 64 S.W.2d 520, 1932 Tenn. App. LEXIS 9 (1932).

The method of enforcement of all statutory liens on personal property, where no method of enforcing the same is provided by the statute creating the lien, is by original attachment. Potter v. Foster, 16 Tenn. App. 336, 64 S.W.2d 520, 1932 Tenn. App. LEXIS 9 (1932).

Lienholder has no statutory lien on the proceeds from the sale of the lien-subject property, and the statute addresses only enforcement of a statutory lien; accordingly, the statute is not a statutory vehicle for the lienholder to reach the proceeds from the sale of the lien-subject property, and it neither provides for nor excludes other remedies that may be available to the lienholder to reach the proceeds from the sale of the lien-subject property. Embraer Aircraft Maint. Servs. v. AeroCentury Corp., — S.W.3d —, 2017 Tenn. LEXIS 729 (Tenn. Nov. 27, 2017).

Statute states only that a statutory lien on personal property, where the lien statute does not specify a method of enforcement, may be enforced by original attachment of the lien-subject property itself; it does not address how a creditor might reach the proceeds from the sale of the lien-subject property, and it does not indicate whether there are other remedies possibly available to the creditor who holds the statutory lien. Embraer Aircraft Maint. Servs. v. AeroCentury Corp., — S.W.3d —, 2017 Tenn. LEXIS 729 (Tenn. Nov. 27, 2017).

3. Priority of Lien.

A statutory lien for city's expenses in demolishing condemned building, is subject to encumbrances upon the property prior to acquisition of the statutory lien. Nashville v. Weakley, 170 Tenn. 278, 95 S.W.2d 37, 1935 Tenn. LEXIS 132 (1936).

4. Election of Remedies.

Doctrine of election of remedies does not apply, there being no inconsistency between action for personal judgment and an attachment to enforce lien on automobile. Sadler v. Murphy, 18 Tenn. App. 340, 77 S.W.2d 70, 1934 Tenn. App. LEXIS 36 (Tenn. Ct. App. 1934).

5. Innocent Purchasers for Value.

This section gives ample protection to innocent purchasers for value. Belle-Aire Village, Inc. v. Ghorley, 574 S.W.2d 723, 1978 Tenn. LEXIS 680 (Tenn. 1978).

6. No Remedy.

Statute provided no remedy for a maintenance company to reach the proceeds from an owner's sale of the lien-subject aircraft because the lien followed the property, and there was no statutory lien on the proceeds resulting from the sale of the aircraft; as the company had no lien on the proceeds from the owner's sale of the aircraft, the statute provided no remedy for the company to reach the proceeds. Embraer Aircraft Maint. Servs. v. AeroCentury Corp., — S.W.3d —, 2017 Tenn. LEXIS 729 (Tenn. Nov. 27, 2017).

Collateral References.

Alien enemy, enforcement of lien on property of. 137 A.L.R. 1370, 147 A.L.R. 1309, 148 A.L.R. 1386, 149 A.L.R. 1454, 152 A.L.R. 1451, 153 A.L.R. 1418, 155 A.L.R. 1451, 156 A.L.R. 1448, 157 A.L.R. 1449.

Assignee's right to enforce lien on automobile for storage. 48 A.L.R.2d 894, 85 A.L.R.3d 199.

Judgment denying recovery on indebtedness as bar to action to enforce lien. 4 A.L.R. 1178.

Jurisdiction of justice's court (or similar court) of action to foreclose lien on land. 115 A.L.R. 539.

Seed or nursery stock lien, enforcement of. 149 A.L.R. 1393.

Soldiers' and Sailors' Civil Relief Act, effect of. 147 A.L.R. 1392, 148 A.L.R. 1395, 149 A.L.R. 1463, 150 A.L.R. 1428, 151 A.L.R. 1460, 152 A.L.R. 1457, 153 A.L.R. 1429, 154 A.L.R. 1455, 155 A.L.R. 1456, 156 A.L.R. 1455, 35 A.L.R. Fed. 649.

66-21-102. Lien book furnished to register.

It is imperative that the county legislative body purchase and furnish to the register of each county a well-bound book to be known as and labeled “Lien Book,” in which all pages shall be blank except the index pages described in § 66-21-103.

Code 1932, § 8058; impl. am. Acts 1978, ch. 934, §§ 7, 36; T.C.A. (orig. ed.), § 64-2102.

Law Reviews.

The New Tennessee Code (Charles C. Trabue), 10 Tenn. L. Rev. 155 (1932).

66-21-103. Form and contents of lien book.

  1. The register shall enter in the notebook the time of reception, and record in the lien book or a combined lien book, all abstracts, memoranda or certified copies of judgments, decrees, lis pendens, mechanics' or furnishers' liens, and such other liens as are required or authorized to be recorded. The register shall also enter in the notebook the time of reception of the release of any lien of record and record the release in the lien book.
  2. The register shall index the recordings of liens and releases and shall note the nature of the lien in the index. The register shall have discretion to maintain a separate direct and reverse index, or to combine the index with the federal lien direct and reverse index or to combine it with the other indexes of the office in a master direct and reverse index.

Code 1932, § 8059; T.C.A. (orig. ed.), § 64-2103; Acts 1988, ch. 636, § 7.

66-21-104. Notation of time of filing.

  1. The register shall note in the notebook the date, hour and minute of receiving each instrument evidencing or releasing a lien.
  2. In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700) according to the 1980 federal census or any subsequent federal census, the register shall note on each such abstract, memorandum or copy the date, hour and minute of the filing.

Code 1932, § 8060; T.C.A. (orig. ed.), § 64-2104; Acts 1988, ch. 636, § 8; 1990, ch. 902, § 1.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

66-21-105. Public official's contest of lien, encumbrance, or other document that constitutes cloud on title of real property interest.

  1. As used in this section, “public official” means:
    1. An individual who is a current or retired elected or appointed government official, including a state, county, metropolitan, or municipal official;
    2. An individual who is the head of a division or major unit or department within an agency or office of the executive, judicial, or legislative branch of state, county, metropolitan, or municipal government, regardless of the title of the position, and who, as a substantial part of the individual's duties, provides meaningful input on the development of policy goals or the implementation of policy;
    3. A high-ranking employee within the executive, judicial, or legislative branch of state, county, metropolitan, or municipal government who has a primary responsibility for one (1) or more of the following functions:
      1. Public information and legislative affairs;
      2. Fiscal, budget, and audit matters;
      3. Legal, security, or internal affairs;
      4. Information technology systems; and
      5. Human resources;
    4. A first responder, as defined in § 29-34-203; or
    5. A law enforcement officer, as defined in § 39-11-106.
    1. A public official who is the subject of a lien, encumbrance, or any other document that reasonably constitutes a cloud on the title of a real property interest, filed with the register of any county, may file with the register a notarized affidavit, signed under penalty of perjury, that contains:
      1. A recital designating the type of instrument, office, book, and page number of the instrument;
      2. The affiant's mailing address;
      3. A statement that the affiant is a public official;
      4. A statement that the affiant believes that the document was filed without any reasonable basis or legal cause, and the affiant's factual basis for why the filed document lacks any reasonable basis or legal cause; and
      5. A statement that the affiant is not filing the affidavit contesting any document held by any entity listed in subsection (k).
    2. The secretary of state shall adopt a form of affidavit for use under subdivision (b)(1) and a form of certification for use under subsection (f).
  2. Once an affidavit is filed with the register pursuant to subdivision (b)(1), the register shall indicate on any available indices that the document referenced in subdivision (b)(1)(A) is “Contested — Under Review.”
    1. Within three (3) business days of filing an affidavit filed pursuant to subdivision (b)(1), the public official shall send a copy of the affidavit, by registered or certified mail, with return receipt requested, addressed to the filing party at the address listed on the lien, encumbrance, or other document.
    2. The copy of the affidavit is deemed delivered upon:
      1. Acceptance by the filing party;
      2. A showing that the filing party refused to accept delivery and it is so stated in the return receipt of the United States postal service; or
      3. The United States postal service returning the affidavit as undeliverable or unclaimed.
    3. The refusal or failure of the filing party to accept delivery of the registered or certified mail, or the refusal or failure to sign the return receipt, does not affect the validity of delivery of the affidavit, and a filing party who refuses or fails to accept delivery of the registered or certified mail is charged with knowledge of the contents of the affidavit.
    1. Within twenty (20) business days of delivery of the affidavit to the filing party or refusal or failure to sign the return receipt, or notice by the United States postal service that the affidavit is undeliverable, a filing party who believes in good faith that the lien, encumbrances, or other document was filed with a reasonable basis or legal cause, may file an action seeking a determination in the chancery court of the county where the document was filed pursuant to title 29, chapter 14. The action must name the public official as an interested party in its caption.
    2. A petition filed pursuant to subdivision (e)(1) must set forth the factual basis showing that the filed lien, encumbrance, or other document was filed with a reasonable basis or legal cause, and must be accompanied by a cost bond in the amount of two hundred dollars ($200).
    3. Any person who shares a property interest with the public official that is adversely affected by the filed lien, encumbrance, or other document may join in the action as an interested party.
    4. Following a reasonable period for responsive pleadings and discovery, the chancellor shall preside over a hearing at which proof may be offered on the issues raised and shall make a determination and issue a decree as to whether the lien, encumbrance, or other document was filed with any reasonable basis or legal cause at the close of the proceedings.
    1. If, within twenty (20) business days of delivery of the affidavit to the filing party under subdivision (d), a petition and cost bond has not been filed as required by subdivision (e)(2), the public official may file with the register a certification, signed by the public official under penalty of perjury and verified by the clerk and master, stating that no petition has been filed.
    2. If the lien, encumbrance, or other document described in subdivision (b)(1) does not contain the name or address of the filing party, plaintiff, complainant, lienor, or owner of the lien, the public official may file with the register a certification, signed by the public official under penalty of perjury stating that the aforementioned name or address was not available.
    3. Any certification filed pursuant to subdivision (f)(1) or (f)(2) must include a recital designating the type of instrument, office, book, and page number of the instrument identifying the lien, encumbrance, or other document referenced in the affidavit filed pursuant to subdivision (b)(1) and shall serve as a release of the lien, encumbrance, or other document.
  3. If, following the hearing on a petition filed under subsection (e), the chancellor determines that there is reasonable basis or legal cause for the filing of the document, the filing party may file a final, unappealable court decree with the register, and the register shall remove the “Contested — Under Review” indication from the public records and the effectiveness of the lien, encumbrance, or other document must be reflected as the original date of filing.
  4. If, following the hearing on a petition filed under subsection (e), the chancellor determines that the lien, encumbrance, or other document was filed without any reasonable basis or legal cause, the public official may file a final, unappealable court decree with the register which shall serve as a release of the lien, encumbrance, or other document.
  5. The prevailing party in any action filed pursuant to subsection (e), including any person sharing a property interest with the public official, may recover costs and expenses, including reasonable attorneys' fees that are incurred in the action.
  6. Any governmental entity, as defined in § 29-20-102, may elect to insure or indemnify any public official for the cost of defending and removing liens, encumbrances, or other documents as described in this section, or any financing statements similarly filed and challenged pursuant to § 47-9-513(e), and for any other costs related to defending and removing a lien, encumbrance, or other document, but not including consequential damages. Any insurance or indemnification pursuant to this subsection (j) must be upon terms and conditions as the governmental entity establishes.
  7. This section providing for affidavits filed by public officials contesting liens, encumbrances, or other documents that reasonably constitute a cloud on the title of a real property interest does not apply to liens, encumbrances, or other documents if the originator, owner, or holder of the debt is any of the following:
    1. A state or national bank or trust company insured by the federal deposit insurance corporation or an operating subsidiary of such a bank or trust company;
    2. A state or federal credit union insured by the national credit union administration;
    3. A residential mortgage lender or an industrial loan and thrift company licensed by the Tennessee department of financial institutions;
    4. An entity regulated by the federal farm credit administration;
    5. The federal housing administration (FHA);
    6. A federal home loan bank;
    7. The federal national mortgage association (FannieMae);
    8. The federal home loan mortgage corporation (FreddieMac);
    9. The federal agricultural mortgage corporation (FarmerMac);
    10. The veterans administration (VA); or
    11. Any lien, encumbrance, or other document that is filed with the register, where the mortgage electronic registration system is listed as the nominee for the originator, owner, or holder of the debt.

Acts 2018, ch. 913, § 1.

Compiler's Notes. Former § 66-21-105 (Acts 1897, ch. 96, § 4; Code 1932, § 8061; Shan., § 4714a4; T.C.A. (orig. ed.), § 64-2105), concerning marginal releases, was repealed by Acts 1988, ch. 636, § 9.

Acts 2018, ch. 913, § 2 provided that the act, which enacted this section, shall apply to liens, encumbrances, or other documents, regardless of when filed.

Effective Dates. Acts 2018, ch. 913, § 2. July 1, 2018; provided that for purposes of promulgating rules, the act took effect May 1, 2018.

66-21-106. Penalty for failure to release.

If the plaintiff, complainant, lienor or owner of any lien filed and registered pursuant to this part fails, neglects or refuses to release a lien that is satisfied, within fifteen (15) days after written demand of the defendant or lienee, such person shall be liable to the penalty prescribed for failure to release a mortgage on demand after the payment of the debt secured.

Code 1932, § 8063; T.C.A. (orig. ed.), § 64-2106.

Cross-References. Penalty for failure to release lien created by recorded instrument, § 66-25-102.

66-21-107. Originals filed under prior law.

Any original instrument evidencing a lien filed under prior law shall be maintained until released or until the lien has lapsed.

Code 1932, § 8062; T.C.A. (orig. ed.), § 64-2107; Acts 1988, ch. 636, § 10.

66-21-108. [Repealed.]

Acts 2018, ch. 1042, § 1; repealed by Acts 2019, ch. 142, § 1, effective April 5, 2019.

Compiler's Notes. Former § 66-21-108 (Code 1932, § 8064; T.C.A. (orig. ed.), § 64-2108), concerning failure of register to perform duties, was repealed by Acts 1988, ch. 636, § 11.

Former § 66-21-108 concerned recovery for a real property owner who prevails in action challenging validity of lien.

66-21-109. Certified copies of records as evidence.

A copy of the abstract, memorandum or copy, as released or unreleased, certified by the register, shall be received as evidence in any court or tribunal.

Acts 1897, ch. 96, § 5; Shan., § 4714a5; mod. Code 1932, § 8065; T.C.A. (orig. ed.), § 64-2109.

66-21-110. Tolling of limitations period for perfection or enforcement of liens against debtor in bankruptcy.

Notwithstanding any other law to the contrary, if due to the filing of a bankruptcy petition under title 11 of the United States Code (11 U.S.C.), a creditor is stayed from filing the necessary documents to create or enforce a lien or security interest against the debtor's property, then any statute of limitations created or established by law for the perfection or enforcement of a lien or security interest shall be tolled until ninety (90) days after any of the following actions occur with respect to the filing of the bankruptcy petition:

  1. The stay is lifted as to the creditor;
  2. The case is discharged; or
  3. The case is dismissed.

Acts 2006, ch. 684, § 1.

66-21-111 — 66-21-120. [Reserved.]

In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700) according to the 1980 federal census or any subsequent federal census the record of liens so provided may be released by the plaintiff, complainant, lienor or owner of the lien, or such person's attorney of record, entering in the blank space under the record of such lien the words “Released in full,” or their equivalent, dating and signing the same, which entry shall be witnessed in writing on the record by the register or the register's deputy, for which service the register is entitled to a fee of three dollars ($3.00) to be paid by the lienor, unless the contract provides otherwise.

Acts 1990, ch. 902, § 2.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Cross-References. Entry of certificate of release, § 66-25-206.

Release of liens created by written instrument, title 66, ch. 25.

Part 2
Federal Tax Liens

66-21-201. Recording of notices of liens—Fees.

  1. Notices of liens for taxes or other obligations payable to the United States, and certificates discharging and notices affecting such liens, including certificates of redemption relating to the liens, shall be recorded in the office of the register of deeds of the county within which the property subject to such lien is situated.
  2. There shall be no fees collected by the county register at the time the notice of the lien or certificate discharging the lien is recorded, but the register shall extend credit to the United States for such recording fees as are chargeable, and submit the bill at the end of each month to the district director of the internal revenue service or other appropriate federal official in order to obtain payment. Notices of federal liens and any certificates of discharge or certificates of redemption, after proper indexing, shall be recorded in a separate book of federal liens or in any combined system of recording.

Acts 1927, ch. 56, § 1; Code 1932, § 8029; Acts 1975, ch. 52, § 1; T.C.A. (orig. ed.), § 64-2110; Acts 1987, ch. 161, § 1; 1991, ch. 60, §§ 1, 2.

Cross-References. State and local tax liens, §§ 67-5-210167-5-2103.

Law Reviews.

Taxation — Priority of Federal Tax Lien, 32 Tenn. L. Rev. 666 (1965).

NOTES TO DECISIONS

1. Construction.

Provisions of Tennessee motor vehicle title and registration law relating to the filing of liens and encumbrances upon motor vehicles did not repeal provisions of this part relative to the filing of notice of federal tax liens and were not repugnant thereto. Atlas Finance Co. v. Wilkerson, 214 Tenn. 619, 382 S.W.2d 529, 1964 Tenn. LEXIS 514 (1964).

2. Priority of Liens.

Notice of federal tax lien filed against all property of taxpayer in county where property was situated had priority over chattel mortgage subsequently filed under Tennessee motor vehicle title and registration law by finance company which took chattel mortgage on motor vehicle as security. Atlas Finance Co. v. Wilkerson, 214 Tenn. 619, 382 S.W.2d 529, 1964 Tenn. LEXIS 514 (1964).

3. Acknowledgment.

Notices of federal tax liens need not be acknowledged or witnessed as required in § 66-22-101. Howard v. United States, 566 S.W.2d 521, 1978 Tenn. LEXIS 553 (Tenn. 1978).

Collateral References.

Federal Tax Liens. 105 A.L.R. 1244, 174 A.L.R. 1373.

66-21-202. Lien index, lien books, and filing of notices.

When notice of the lien is filed, the register shall forthwith enter the same in an alphabetical federal lien index, or the lien book, showing on one (1) line the name and residence of the lien debtor named in such notice, the serial number of such notice, the date and hour of filing, and the amount of tax or other obligation with interest, penalties and costs.

Acts 1927, ch. 56, § 2; mod. Code 1932, § 8030; modified; T.C.A. (orig. ed.), § 64-2111; Acts 1987, ch. 161, § 2; 1991, ch. 60, § 3.

66-21-203. Book furnished for notices.

The federal lien index, or lien book in lieu, and file or files for the federal lien notices shall be furnished to the county register in the manner now provided by law for the furnishing of books in which deeds are recorded.

Acts 1927, ch. 56, § 4; mod. Code 1932, § 8032; T.C.A. (orig. ed.), § 64-2112; Acts 1987, ch. 161, § 3.

66-21-204. Discharge of lien or certificate of redemption.

When a certificate of discharge of any lien or certificate of redemption issued by the director of the internal revenue service or other proper officer is recorded in the office of the register where the original notice of lien is recorded, the register shall enter the same with the date of filing in the proper index.

Acts 1927, ch. 56, § 3; Code 1932, § 8031; modified; T.C.A. (orig. ed.), § 64-2113; Acts 1987, ch. 161, § 4; 1991, ch. 60, § 4.

66-21-205. Applicability of part.

This part applies to federal tax liens and to all other federal lien notices, including certificates of redemption, which, under any act of congress or any regulation adopted pursuant thereto, are required or permitted to be recorded in the same manner as notices of federal tax liens or in the one (1) office designated within the state for the recording of federal liens, and to designate the one (1) office within this state for these purposes.

Acts 1927, ch. 56, § 5; mod. Code 1932, § 8033; modified; T.C.A. (orig. ed.), § 64-2114; Acts 1987, ch. 161, § 5; 1991, ch. 60, § 5.

66-21-206. Uniformity of construction.

This part shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.

Acts 1927, ch. 56, § 6; Code 1932, § 8034; T.C.A. (orig. ed.), § 64-2115.

66-21-121. Entry of release of lien — Fee.

Chapter 22
Acknowledgment of Instruments

66-22-101. Authentication.

  1. Unless otherwise provided by law, to authenticate an instrument or document for registration or recording in the office of the county register, the maker or the natural person acting on behalf of the maker shall execute the instrument or document by that person's original signature, and the signature shall be either acknowledged according to law or proved by at least two (2) subscribing witnesses. The county register may refuse to record any instrument or document not authenticated in accordance with this section.
  2. For purposes of this section, “person's original signature” includes an electronic signature as defined in § 8-16-302.
  3. For purposes of this title and subject to subsection (d), a person may personally appear before the officer taking the acknowledgment by:
    1. Appearing physically before the officer; or
    2. Appearing by means of an interactive two-way audio and video communication that meets the online notarization requirements under rules promulgated by the secretary of state pursuant to the Online Notary Public Act, compiled in title 8, chapter 16, part 3, to provide for the orderly administration of this chapter.
  4. The acknowledging officer must designate in the acknowledgment form whether the principal personally appeared before the officer by means of an interactive two-way audio and video communication pursuant to subdivision (c)(2). If the person appears by means of an interactive two-way audio and video communication, the appearance and the certificate shall be deemed compliant with this chapter if the acknowledging officer amends the acknowledgment forms set forth in §§ 66-22-107, 66-22-108, and 66-22-114, to read “personally appeared before me by audio-video communication” or “personally appeared by audio-video communication” or “before me appear by audio-video communication” rather than “personally appeared before me” or “personally appeared” or “before me appear”.

Code 1858, § 2038 (deriv. Acts 1805, ch. 16, § 2; 1807, ch. 85, § 3; 1831, ch. 90, § 1; 1839-1840, ch. 26, § 1); Shan., § 3712; Code 1932, § 7630; T.C.A. (orig. ed.), § 64-2201; Acts 1986, ch. 717, § 1; 2004, ch. 576, § 1; 2018, ch. 931, § 1.

Compiler's Notes. Earlier statutes as to authentication included Acts 1715, ch. 28, § 5; 1766, ch. 4, § 2; 1770, ch. 9; 1777 (Apr.), ch. 10; 1782, ch. 5, § 2; 1784 (Apr.), ch. 21, § 2; 1788, ch. 24, § 2; 1794, ch. 22, § 2.

Amendments. The 2018 amendment, effective July 1, 2019, added (b)-(d); and, substituted “by that person's original signature, and the signature” for “by that person's original signature and such signature” in present (a).

Effective Dates. Acts 2018, ch. 931, § 5. July 1, 2019; provided that for administrative and rulemaking purposes, the act took effect May 15, 2018.

Cross-References. Authentication by witnesses, title 66, ch. 23.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 3, 4, 15; 18 Tenn. Juris., Mechanics' Liens, § 15; 21 Tenn. Juris., Recording Acts, § 8.

Law Reviews.

Survey of Tennessee Property Law, IV. Transfers of Land (Beverly A. Rowlett), 48 Tenn. L. Rev. 53, 72 (1980).

NOTES TO DECISIONS

1. Registration Prima Facie Evidence of Execution and Delivery.

Registration of a deed is prima facie evidence of its execution and delivery. Butterfeild v. Miller, 195 F. 200, 1912 U.S. App. LEXIS 1362 (6th Cir. Tenn. 1912).

2. Subscribing Witnesses.

The words “subscribing witnesses,” used in this section, mean that the persons who witness a deed must either have seen the maker sign or heard him acknowledge his signature, and they must themselves sign as witnesses in the presence of the maker by his request or assent, or if they sign as witnesses in the absence of the maker they must have been specially requested by him to do so. Tate v. Lawrence, 58 Tenn. 503, 1872 Tenn. LEXIS 294 (1872).

Where a deed was signed by the maker in the presence of two sons of the bargainee who were not asked to and did not witness it until after the death of the bargainee when they took the unacknowledged, unwitnessed deed to the county clerk's office where they put their names as witnesses to the deed and then proved its execution and had it registered, the registration was void. Tate v. Lawrence, 58 Tenn. 503, 1872 Tenn. LEXIS 294 (1872).

3. —One Witness — Insufficiency.

The probate of a deed by one witness will not authorize its registration, and a certified copy of such deed so proved and registered is inadmissible in evidence. Batte v. Stone, 12 Tenn. 167, 12 Tenn. 168, 1833 Tenn. LEXIS 38 (1833).

Execution of deed was not established under this section where according to the certificate only one of the subscribing witnesses appeared before the clerk. Lamons v. Mathes, 33 Tenn. App. 609, 232 S.W.2d 558, 1950 Tenn. App. LEXIS 119 (Tenn. Ct. App. 1950).

4. Acknowledgment.

An instrument will not be considered legally registered unless it has been acknowledged by the maker or approved by two (2) subscribing witnesses; and where there are no subscribing witnesses, the validity of an attempted registration depends upon the validity of the notary's acknowledgment. Haynes v. State, 213 Tenn. 447, 374 S.W.2d 394, 1964 Tenn. LEXIS 404 (1964).

An instrument will not be considered legally registered unless acknowledged by the maker or properly witnessed. Howard v. United States, 566 S.W.2d 521, 1978 Tenn. LEXIS 553 (Tenn. 1978).

Notices of tax liens need not be acknowledged or witnessed as required in § 64-2201 (now § 66-22-101). Howard v. United States, 566 S.W.2d 521, 1978 Tenn. LEXIS 553 (Tenn. 1978); Copas v. Tidwell, 601 S.W.2d 708, 1980 Tenn. LEXIS 470 (Tenn. 1980).

Attempted registration of instrument creating restrictive covenants, which contained no acknowledgment whatsoever, was invalid. Patterson v. Cook, 655 S.W.2d 955, 1983 Tenn. App. LEXIS 593 (Tenn. Ct. App. 1983).

The purpose of an acknowledgment is to authenticate an instrument so that it can be validly registered. In re Spears, 39 B.R. 91, 1984 B.R. LEXIS 5882 (Bankr. E.D. Tenn. Apr. 13, 1984).

Deed of trust was improperly acknowledged, as the defect in the acknowledgement, the omission of the official notary seal from the acknowledgement certificate, was a fatal flaw rendering the instrument null and void as to subsequent creditors and bona fide purchasers. In re Crim v. EMC Mortg. Corp., 81 S.W.3d 764, 2002 Tenn. LEXIS 339 (Tenn. 2002).

5. Will and Request for Attesting Witnesses — Form.

No special form for a will is required and no particular form of words need be used in making the request of witnesses to attest a will. Howell v. Brown, 7 Tenn. App. 380, 1928 Tenn. App. LEXIS 56 (1928).

6. Failure to Verify — Effect on Claim.

Under this section and the requirement of the mechanic's lien statute that statement of amount due mechanic's lien claimant must be supported by affidavit, without which it will not be entitled to registration, claim of one filing statement, not entitled to be registered because not verified, will be denied. McDonnell v. Amo, 162 Tenn. 36, 34 S.W.2d 212, 1930 Tenn. LEXIS 60 (1931).

7. Married Women.

Neither the wife of the grantor nor the wife of the grantee is a competent subscribing witness to the deed from or to her husband, because she may not be competent to testify in a suit between the parties concerning the same, for the subscribing witnesses must be competent to testify in a court of justice about the matter involved. The statute making husband and wife competent witnesses, except as to matter occurring between them by virtue of or in consequence of the marital relation, is self limiting upon its face to “civil actions in the courts,” and does not extend the competency to become a subscribing witness, and has no reference to subscribing witnesses to either deeds or wills, and their probate is not in the purview of the law and clearly not in the legislative mind. Third Nat'l Bank v. O'Brien, 94 Tenn. 38, 28 S.W. 293, 1894 Tenn. LEXIS 24 (1894); Pope v. Merchants' Trust Co., 118 Tenn. 506, 103 S.W. 792, 1907 Tenn. LEXIS 60 (1907).

Constitutional and statutory provisions relating to conveyances by married women of homestead reviewed and construed. Jefferson County Bank v. Hale, 152 Tenn. 648, 280 S.W. 408, 1925 Tenn. LEXIS 109 (1926).

8. Impeachment.

When the certificate is in proper form, its every statement is given great weight. Unsupported testimony of husband and wife cannot overturn notary's statement as to separate acknowledgment by wife. Erwin Nat'l Bank v. Riddle, 18 Tenn. App. 561, 79 S.W.2d 1032, 1934 Tenn. App. LEXIS 58 (Tenn. Ct. App. 1934).

9. Mechanics' Liens.

Instruments required to be registered under §§ 66-11-112, 66-11-117 must be acknowledged in accordance with this section. Chattanooga Lumber & Coal Corp. v. Phillips, 202 Tenn. 266, 304 S.W.2d 82, 1957 Tenn. LEXIS 388 (1957).

In order to register notice of a lien so as to give lienholder priority over subsequent purchasers or encumbrancers for value, such lienholder must not only acknowledge his notice of lien, but must in addition verify the notice by sworn statement. Pulaski Lumber Co. v. Harpeth South, Inc., 501 S.W.2d 275, 1973 Tenn. LEXIS 533 (Tenn. 1973).

10. Deed.

A deed is effective between the parties thereto without acknowledgment or registration, but not effective as to other parties without notice. West v. United Am. Bank, 23 B.R. 48, 1982 Bankr. LEXIS 3505 (Bankr. E.D. Tenn. 1982).

66-22-102. Persons authorized to take acknowledgments within state.

If the person executing the instrument resides or is within the state, the acknowledgment shall be made before the county clerk, or legally appointed deputy county clerk, or clerk and master of chancery court of some county in the state or before a notary public of some county in this state.

Code 1858, § 2039 (deriv. Acts 1807, ch. 85, § 3; 1835-1836, ch. 53, §§ 5, 6; 1837-1838, ch. 150, § 1); Acts 1870, ch. 71, § 1; 1870-1871, ch. 11, § 1; Shan., § 3713; Acts 1919, ch. 104, §§ 1-3; Shan. Supp., §§ 3714a1-3714a3; mod. Code 1932, § 7631; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-2202.

Cross-References. Acknowledgment by servicemen's wives, §§ 58-1-60558-1-607.

Acknowledgments by members of armed forces, §§ 58-1-60558-1-607.

Official misconduct, § 39-16-402.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 11.

NOTES TO DECISIONS

1. Deputy Clerks.

2. —Appointment — Powers.

Deputy clerk, if legally appointed, even by parol, though not qualified, is an officer de facto; his official acts as such, so far as they affect the rights of third persons and the public, are as effectual and valid as if performed by an officer de jure. Atkinson v. Micheaux, 20 Tenn. 312, 1839 Tenn. LEXIS 53 (1839); Farmers & Merchants' Bank v. Chester, 25 Tenn. 458, 1846 Tenn. LEXIS 23 (1846); Bates v. Dyer, 28 Tenn. 162, 1848 Tenn. LEXIS 62 (1848); Galbraith v. McFarland, 43 Tenn. 267, 1866 Tenn. LEXIS 50 (1866); Kelley v. Story, 53 Tenn. 202, 1871 Tenn. LEXIS 345 (Tenn. Oct. 4, 1871).

County clerks, as well as the clerks of all other courts of this state, have authority and power to appoint deputies who are vested with all the powers and authority of the principal clerks, and whose acts are the acts of the principal clerks. Martin v. Porter, 51 Tenn. 407, 1871 Tenn. LEXIS 182 (1871); Kelley v. Story, 53 Tenn. 202, 1871 Tenn. LEXIS 345 (Tenn. Oct. 4, 1871); Harris v. State, 100 Tenn. 287, 45 S.W. 438, 1897 Tenn. LEXIS 114 (1897); Wilkerson v. Dennison, 113 Tenn. 237, 80 S.W. 765, 1904 Tenn. LEXIS 20, 106 Am. St. Rep. 821 (1904); Heard v. Elliott, 116 Tenn. 150, 92 S.W. 764, 1905 Tenn. LEXIS 14 (1905).

3. —Acknowledgment Before Deputy.

A certificate of acknowledgment to deeds, signed by the deputy clerk, without naming the principal, is good; and while an acknowledgment made before the deputy cannot be truthfully certified as having been made before the principal clerk, yet the certificate made by the deputy, in the name of the principal, whose name is signed thereto by the deputy, though the deputy's name nowhere appears in the certificate and is not attached to it, is valid. Beaumont v. Yeatman, 27 Tenn. 542, 1847 Tenn. LEXIS 128 (1847); Tipton v. Jones, 57 Tenn. 564, 1873 Tenn. LEXIS 263 (1873); Ament v. Brennan, 1 Cooper's Tenn. Ch. 431 (1873); Cooper v. Hamilton Perpetual Bldg. & Loan Ass'n, 97 Tenn. 285, 37 S.W. 12, 1896 Tenn. LEXIS 141, 56 Am. St. R. 795, 33 L.R.A. 338 (1896); Wilkerson v. Dennison, 113 Tenn. 237, 80 S.W. 765, 1904 Tenn. LEXIS 20, 106 Am. St. Rep. 821 (1904).

A deed of trust, made to a trustee, to secure a debt due to the county clerk, is not a deed by nor to him, and may be properly acknowledged before his deputy. Tipton v. Jones, 57 Tenn. 564, 1873 Tenn. LEXIS 263 (1873); Cooper v. Hamilton Perpetual Bldg. & Loan Ass'n, 97 Tenn. 285, 37 S.W. 12, 1896 Tenn. LEXIS 141, 56 Am. St. R. 795, 33 L.R.A. 338 (1896); Reed Fertilizer Co. v. Thomas, 97 Tenn. 478, 37 S.W. 220, 1896 Tenn. LEXIS 169 (1896).

The acknowledgment of a deed of trust or trust assignment before a deputy clerk who is a beneficiary therein is irregular, but not void. Reed Fertilizer Co. v. Thomas, 97 Tenn. 478, 37 S.W. 220, 1896 Tenn. LEXIS 169 (1896).

4. Notaries.

5. —Jurisdiction and Powers.

If a notary takes an acknowledgment to a deed outside the county for which he is appointed, the same is void. Bostic v. Haynie, 36 S.W. 856, 1896 Tenn. Ch. App. LEXIS 12 (1896). But see, §§ 8-16-1098-16-204.

A notary public could not act officially beyond the county in which he is commissioned. Manis v. Farmers Bank, 170 Tenn. 656, 98 S.W.2d 313, 1936 Tenn. LEXIS 46 (1936).

6. —Presumption of Lawful Action.

A notary public, as other public officials, is presumed to have acted lawfully. Manis v. Farmers Bank, 170 Tenn. 656, 98 S.W.2d 313, 1936 Tenn. LEXIS 46 (1936).

7. —Notary as Mortgagee's Agent.

The fact that a mortgage is acknowledged before a notary who is stockholder, director, and manager of the mortgagee corporation does not render the mortgage void, in the absence of fraud, though the court will lend a ready ear to evidence of undue advantage, fraud, or oppression arising out of such relationship. Napier v. Stone, 21 Tenn. App. 626, 114 S.W.2d 57, 1937 Tenn. App. LEXIS 64 (Tenn. Ct. App. 1937).

8. Attorney and Director of Mortgagee Taking Acknowledgment.

The fact that the notary is attorney and director of mortgagee does not render its acknowledgment before him void. Home Bldg. & Loan Ass'n v. Evans, 53 S.W. 1104, 1899 Tenn. Ch. App. LEXIS 101 (Tenn. Ch. App. 1899).

9. Trustee in Trust Deed Taking Acknowledgment.

That acknowledgment by a married woman was before the trustee in a deed of trust will not alone suffice to annul it. Weidman v. Templeton, 61 S.W. 102, 1900 Tenn. Ch. App. LEXIS 146 (Tenn. Ch. App. 1900).

The trustee under the deed of trust may take the acknowledgment without automatically rendering the acknowledgment void. In re Spears, 39 B.R. 91, 1984 B.R. LEXIS 5882 (Bankr. E.D. Tenn. Apr. 13, 1984).

Collateral References.

Acknowledgment over telephone. 12 A.L.R. 538, 58 A.L.R. 604.

Admissibility, in action against notary public, of evidence as to usual business practice of notary public of identifying person seeking certificate of acknowledgment. 59 A.L.R.3d 1327.

Association, qualification of member of, to attest as notary instrument to which association is a party. 51 A.L.R. 1529.

Attorney, relationship of, to person taking oath or making acknowledgment, as disqualifying official empowered to administer oaths or take acknowledgments. 21 A.L.R.3d 483.

Bond of notary, liability on. 44 A.L.R.3d 555, 44 A.L.R.3d 1243.

Duress exercised by third person as affecting acknowledgment. 4 A.L.R. 869, 62 A.L.R. 1477.

Formal acknowledgment of instrument by one whose name is signed thereto by another as an adoption of the signature. 57 A.L.R. 525.

Identify, proof of, upon which officer certifying to an acknowledgment is justified in acting. 10 A.L.R. 871.

Option in lease for extension of term or for a new lease as creating necessity for acknowledgment. 161 A.L.R. 1094.

Record of instrument insufficiently acknowledged as notice. 59 A.L.R.2d 1299.

Stockholder of corporation, qualification of, to take acknowledgment of, or attest as notary, instrument to which corporation is a party. 51 A.L.R. 1529.

Sufficiency of certificate of acknowledgment. 29 A.L.R. 919, 25 A.L.R.2d 1124.

Tax deed, effect of absence of acknowledgment on, to prevent running of limitations against attack on tax sale. 113 A.L.R. 1347.

Third person acting in reliance on certificate, liability to. 34 A.L.R. 74, 68 A.L.R. 375.

Will or deed, effect of acknowledgment of instrument on determination of its character as. 11 A.L.R. 23, 31 A.L.R.2d 532.

Wills, character as witness of officer authorized to take acknowledgments who attaches his official certificate to a will. 8 A.L.R. 1075.

66-22-103. Acknowledgment in other states or territories.

If the person executing the instrument resides or is beyond or without the limits of the state, but within the union or its territories or districts, the acknowledgment may be made:

  1. Before any court of record, or before the clerk of any court of record; or, before a commissioner for Tennessee, appointed by the governor; or before a notary public authorized there to take proof or acknowledgments. If the acknowledgment is made before a court of record, a copy of the entry of the acknowledgment on the record shall be certified by the clerk, under the clerk's seal of office; and the judge, chief justice, or presiding magistrate of the court shall certify as to the official character of the clerk; or
  2. Before any other officer of such state, territory or district, authorized by the laws there to take the proof and acknowledgment of deed. There shall in cases under this subdivision (2) be subjoined or attached to the certificate of proof or acknowledgment, signed by such other officer, a certificate of the secretary of state of the state or territory in which such officer resides, under the seal of such state, territory, or a certificate of the clerk of a court of record of such state, territory, or district, in the county in which the officer resides or in which the officer took such proof or acknowledgment under the seal of such court, stating that such officer was, at the time of taking such proof or acknowledgment duly authorized to take acknowledgments and proof of deeds of lands in the state, territory, or district, and that the secretary of state or clerk of court is well acquainted with the handwriting of such officer, and that the officer verily believes that the signature affixed to such certificate of proof or acknowledgment is genuine.

Code 1858, § 2040 (deriv. Acts 1807, ch. 85, § 3); 1831, ch. 90, § 9; 1839-1840, ch. 26, §§ 2, 3, 5; 1855-1856, ch. 115, § 1; Shan., § 3715; Acts 1919, ch. 48, §§ 3, 4; Shan. Supp., §§ 3747a4, 3747a5; mod. Code 1932, § 7632; T.C.A. (orig. ed.), § 64-2203.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 1, 9, 11-13; 11 Tenn. Juris., Evidence, § 74.

NOTES TO DECISIONS

1. Construction.

Subdivision (2) did not circumscribe the authority of officers authorized otherwise to take acknowledgments, such as clerks of courts, and notaries. First Nat'l Bank v. Howard, 148 Tenn. 188, 253 S.W. 961, 1923 Tenn. LEXIS 7 (1923).

2. Registration System — Purpose and Scope — Necessity of Compliance.

The object of the Code was to prescribe a uniform rule for the authentication of all instruments required to be registered by our laws, irrespective of whether they were made and acknowledged or proved within or without the limits of this state; and the certificate of acknowledgment or probate taken to deeds out of the state must accord with and follow substantially the forms prescribed by our statutes, it matters not what is the state of the law on the subject in the state where the probate of a deed is made, and the same need not be certified. McGuire v. Hay, 25 Tenn. 419, 1846 Tenn. LEXIS 7 (1846); Bone v. Greenlee, 41 Tenn. 29, 1860 Tenn. LEXIS 6 (1860); Murdock v. Memphis & O.R.R., 66 Tenn. 557, 1874 Tenn. LEXIS 182 (1874); Kelly v. Calhoun, 95 U.S. 710, 24 L. Ed. 544, 1877 U.S. LEXIS 2226 (1877); Hunt v. Curry, 153 Tenn. 11, 282 S.W. 201, 1925 Tenn. LEXIS 2 (1925).

Tennessee's registration system is one of positive law, founded on general grounds of public policy, and cannot be disregarded. It exacts from courts of chancery obedience as implicit as from courts of law, and it must be expounded and enforced in both alike. Garnett v. Stockton, 26 Tenn. 84, 1846 Tenn. LEXIS 66 (1846); Brogan v. Savage, 37 Tenn. 689, 1858 Tenn. LEXIS 99 (1858); Henderson v. McGhee, 53 Tenn. 55, 1871 Tenn. LEXIS 317 (1871).

A substantial compliance with the provisions prescribed by Tennessee laws, using words of the same import and meaning as those in the prescribed forms, will be sufficient. Murdock v. Memphis & O.R.R., 66 Tenn. 557, 1874 Tenn. LEXIS 182 (1874).

3. Certificate Showing Authority of Official — Necessity.

Under this section if the acknowledgment is made before a court of record, a copy of the entry of the acknowledgment on the record shall be certified by the clerk under his seal of office and the judge, chief justice or presiding magistrate of the court shall certify as to the official character of the clerk, but there is no requirement under this section or any other section of the Code for any certificate showing the authority of the clerk when the acknowledgment is taken before “the clerk of any court of record.” Stooksberry v. Hickman, 183 Tenn. 560, 194 S.W.2d 344, 1946 Tenn. LEXIS 238 (1946).

4. —Decisions Prior to 1932 Code.

When the statute authorized the acknowledgment or probate of instruments “before a judge of the Supreme or Superior Court,” the certificate of acknowledgment or probate was required to show in what state and in what capacity the judge acted. Patton v. Brown, 3 Tenn. 126, 1 Cooke 126, 1812 Tenn. LEXIS 30.

Acknowledgment of trust deed by clerk of court without certificate showing official authority of such clerk is defective, and instrument is not entitled to registration. Hunt v. Curry, 153 Tenn. 11, 282 S.W. 201, 1925 Tenn. LEXIS 2 (1925).

5. Particular Officials of Other States — Authority to Acknowledge.

The maker's acknowledgment of the execution of a deed conveying land in this state, taken and certified by a justice of the peace of another state, is not a sufficient authentication for registration, and a registration upon such certificate of acknowledgment is void. Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

The register of circuit court in equity in the state of Alabama is the clerk of a court of record and such a clerk as is authorized by this section to take acknowledgments. Stooksberry v. Hickman, 183 Tenn. 560, 194 S.W.2d 344, 1946 Tenn. LEXIS 238 (1946).

66-22-104. Acknowledgment in foreign countries.

  1. If the person executing the instrument resides or is beyond the limits of the union and its territories, the acknowledgment may be made:
    1. Before a commissioner for Tennessee appointed in the country where the acknowledgment is made, having an official seal;
    2. Before a notary public of such country, having an official seal; and
    3. Before a consul, charge d'affaires, envoy, minister, or ambassador of the United States in the country to which such person is accredited and where the acknowledgment is made.
  2. When the seal affixed contains the name or official style of such officer, any error, in stating or failing to state otherwise such name or official style of the officer, shall not render the certificate defective.

Code 1858, § 2041 (deriv. Acts 1839-1840, ch. 26, §§ 2-4); Shan., § 3716; Acts 1921, ch. 82, § 1; Shan. Supp., § 3747a10; mod. Code 1932, § 7633; T.C.A. (orig. ed.), § 64-2204.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 9, 12.

66-22-105. Authentication of instruments by or to county clerk.

The probate or acknowledgment of any deed or other instrument, made by or to a clerk of any county, may be taken and made before the judge having probate jurisdiction in the clerk's county, the clerk and master or the notary public, and the authentication entered on record in the office of the county clerk as other instruments; provided, that the clerk collect and account for the state tax on all such instruments as though the acknowledgment had been taken before the clerk.

Code 1858, § 2069; Acts 1868-1869, ch. 32, § 1; Shan., § 3746; mod. Code 1932, § 7661; impl. am. Acts 1978, ch. 934, §§ 16, 22, 36; T.C.A. (orig. ed.), § 64-2205.

Cross-References. Fees of county clerk, § 8-21-701.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 1.

NOTES TO DECISIONS

1. Acknowledgment Before Deputy Clerk.

A deed of trust, made to a trustee, to secure a debt due to the county clerk, is not a deed to such clerk, and it may be properly acknowledged before the clerk's deputy, who is a sworn officer and disinterested, and who has official capacity independent of the principal clerk. Tipton v. Jones, 57 Tenn. 564, 1873 Tenn. LEXIS 263 (1873); Cooper v. Hamilton Perpetual Bldg. & Loan Ass'n, 97 Tenn. 285, 37 S.W. 12, 1896 Tenn. LEXIS 141, 56 Am. St. R. 795, 33 L.R.A. 338 (1896); Reed Fertilizer Co. v. Thomas, 97 Tenn. 478, 37 S.W. 220, 1896 Tenn. LEXIS 169 (1896); Wilkerson v. Dennison, 113 Tenn. 237, 80 S.W. 765, 1904 Tenn. LEXIS 20, 106 Am. St. Rep. 821 (1904).

66-22-106. Postponement pending identification.

  1. If the clerk or deputy clerk does not know, is not personally acquainted with, or does not have satisfactory evidence of a person wishing to make acknowledgment of the execution of an instrument, the clerk or deputy clerk shall file it, and note, on the record of the probate of deeds, the date of the presentation of the instrument, and the reason of the postponement of the acknowledgment; and then, within twenty (20) days, the party may produce witnesses before the clerk or deputy clerk, to prove the identity of the person so offering to acknowledge the same; and the deed, when acknowledged after such proof, shall take effect from the filing with the clerk.
  2. 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.
  3. 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:
      1. An identification card or driver's license issued by the department of safety; or
      2. A passport issued by the United States department of state; or
    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:
      1. A passport issued by a foreign government;
      2. A driver's license issued by a state other than Tennessee;
      3. An identification card issued by a state other than Tennessee; or
      4. An identification card issued by any branch of the armed forces of the United States.
  4. An officer who has taken an acknowledgment pursuant to this section shall be presumed to have operated in accordance with this chapter.
  5. Any party who files an action for damages based on the failure of the officer to establish the proper identity of the person making the acknowledgment shall have the burden of proof in establishing the negligence or misconduct of the officer.

Code 1858, § 2047 (deriv. Acts 1833, ch. 92, §§ 13, 14); Shan., § 3722; Code 1932, § 7637; T.C.A. (orig. ed.), § 64-2206; Acts 1983, ch. 158, § 1.

Cross-References. Consumer protection when utilizing notary services, § 8-16-204.

Fee for filing presentation for acknowledgment, § 66-22-112.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

NOTES TO DECISIONS

1. Notaries Public — Proof of Identity Before.

Question whether a notary public is within the purview of this section was reserved, and the notary was held liable for common law negligence. This statutory standard is more stringent than the common law standard. A notary acts at his peril in making a certificate on anything short of the evidence required by this section. Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117, 1916 Tenn. LEXIS 82 (1917).

66-22-107. Form of certificate of acknowledgment.

  1. 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 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  , 20  .

  2. 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  , 20  , 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's (or persons') free act and deed.

  3. Or, in case of natural persons acting by attorney:

    State of Tennessee      )County of      )

    On this  day of  , 20  , before me personally appeared  , to me known (or proved to me on the basis of satisfactory evidence) to be the person who executed the foregoing instrument in behalf of  acknowledged that such person executed the same as the free act and deed of  .

Code 1858, § 2042 (deriv. Acts 1831, ch. 90, § 3); Shan., § 3717; Acts 1919, ch. 48, § 1; Shan. Supp. § 3747a2; mod. Code 1932, § 7634; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-2207; Acts 1983, ch. 158, §§ 2, 3.

Compiler's Notes. Acts 1986, ch. 717, § 3 purported to repeal §§ 66-22-107 and 66-22-108 effective July 1, 1987; however, Acts 1986, ch. 717, § 3 has itself been repealed by Acts 1987, ch. 125, § 3.

Cross-References. Certificate of acknowledgment form, § 66-22-114.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 7-402, 7-403, 7-405.

Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 1, 8, 15, 20; 18 Tenn. Juris., Mechanics' Liens, § 15.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Scope of Section.

This section governs the acknowledgment of all instruments whether acknowledged or proved within or without the state. Bone v. Greenlee, 41 Tenn. 29, 1860 Tenn. LEXIS 6 (1860).

2. Meaning of Terms.

The phrase “with whom I am personally acquainted” in such a certificate means a knowledge independent and complete in itself, and existing without other information, and it imports more than a slight or superficial knowledge. Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117, 1916 Tenn. LEXIS 82 (1917).

3. Prescribed Form — Necessity.

The form of certificate of acknowledgment, essential to a valid registration of the instrument, is prescribed, and is not left to the discretion of the probating officer. Newton Fin. Corp. v. Conner, 161 Tenn. 441, 33 S.W.2d 95, 1930 Tenn. LEXIS 27, 72 A.L.R. 1286 (1930).

The form for a certificate of acknowledgment, which is essential to the valid registration of a deed, must substantially comply with the statutory language of this section; the language is prescribed and a probating officer has little if any discretion to vary the form of the certificate. If the probating officer does not substantially comply with the statutory form of acknowledgment, the deed is deemed null and void as to existing or subsequent creditors of, or bona fide purchasers from, the makers without notice. In re Anderson, 30 B.R. 995, 1983 U.S. Dist. LEXIS 18003 (M.D. Tenn. 1983).

4. Substantial Compliance — Sufficiency.

If the substance of the authentication required by law is in the certificate, the unintentional omission of the prescribed words shall not make the authentication invalid. Davis v. Bogle, 58 Tenn. 315, 1872 Tenn. LEXIS 264 (1872); Willingham v. Potter, 131 Tenn. 18, 173 S.W. 434, 1914 Tenn. LEXIS 77 (1914).

The certificate of acknowledgment is not fatally defective where it clearly states that the “within named bargainor(s)” were personal acquaintances of the notary and in addition, the bargainors appeared before the notary and acknowledged the execution of the trust deed. In re Grable, 8 B.R. 363, 1980 Bankr. LEXIS 3876 (Bankr. E.D. Tenn. 1980).

This section requires that the notary's acknowledgment expressly state that he was “personally acquainted” with the grantor, and the statement by the notary that the grantor “personally appeared before” him is not a sufficient substitute therefor. In re Anderson, 30 B.R. 995, 1983 U.S. Dist. LEXIS 18003 (M.D. Tenn. 1983).

5. Equivalent Words.

While it is always safer and better to use the precise words of the statute, yet words of equivalent signification may be substituted for the words prescribed in the statute. The words “with whom I am acquainted” are equivalent to the words “with whom I am personally acquainted,” especially where the certificate shows that the bargainor personally appeared before the officer taking and certifying the acknowledgment. Anderson v. Bewley, 58 Tenn. 29, 1872 Tenn. LEXIS 223 (1872); Davis v. Bogle, 58 Tenn. 315, 1872 Tenn. LEXIS 264 (1872); Hunt v. Harris, 59 Tenn. 243, 1873 Tenn. LEXIS 49 (1873).

The word “specified” may be substituted in the certificate for the word “contained” in the statute, for it quite as comprehensively and accurately expresses the idea designed to be conveyed, as the word used in the statute. Davis v. Bogle, 58 Tenn. 315, 1872 Tenn. LEXIS 264 (1872); Currie v. Kerr, 79 Tenn. 138, 1883 Tenn. LEXIS 27 (1883).

The words in the certificate, placed upon the deed itself, “acknowledged the above signatures to be theirs, placed there for the purposes herein specified,” show a substantial acknowledgment of the execution of the instrument, and their substitution for the statutory form “acknowledged that they executed the within instrument for the purposes therein contained,” is a sufficient compliance with the statute, and the certificate is sufficient and valid. Davis v. Bogle, 58 Tenn. 315, 1872 Tenn. LEXIS 264 (1872); Currie v. Kerr, 79 Tenn. 138, 1883 Tenn. LEXIS 27 (1883); Hughes v. Powers, 99 Tenn. 480, 42 S.W. 1, 1897 Tenn. LEXIS 56 (1897).

In the certificate of acknowledgment, the words “who are personally known to me” are equivalent to the statutory words “with whom I am personally acquainted,” for to be “personally acquainted with” and to “know personally” are equivalent phrases. Kelly v. Calhoun, 95 U.S. 710, 24 L. Ed. 544, 1877 U.S. LEXIS 2226 (1877).

Use of the words, “for all the purposes therein expressed,” is sufficient. Hughes v. Powers, 99 Tenn. 480, 42 S.W. 1, 1897 Tenn. LEXIS 56 (1897).

A certificate that the officer taking the acknowledgment “is satisfied” of the identity of the acknowledger is not equivalent to the statutory language and is insufficient. Newton Fin. Corp. v. Conner, 161 Tenn. 441, 33 S.W.2d 95, 1930 Tenn. LEXIS 27, 72 A.L.R. 1286 (1930).

6. Omissions — Effect.

The certificate of acknowledgment must show that the officer taking the same is acquainted, or personally acquainted, with the bargainor making the acknowledgment; and without such showing, the certificate of acknowledgment is a nullity, and so is the registration of the instrument. Peacock v. Tompkins, 20 Tenn. 135, 1839 Tenn. LEXIS 30 (1839); Garnett v. Stockton, 26 Tenn. 84, 1846 Tenn. LEXIS 66 (1846); Johnson v. Walton, 33 Tenn. 258, 1853 Tenn. LEXIS 39 (1853); Brogan v. Savage, 37 Tenn. 689, 1858 Tenn. LEXIS 99 (1858); Fall v. Roper, 40 Tenn. 485, 1859 Tenn. LEXIS 137 (1859); Bone v. Greenlee, 41 Tenn. 29, 1860 Tenn. LEXIS 6 (1860); Harrison v. Wade, 43 Tenn. 505, 1866 Tenn. LEXIS 80 (1866); Mullins v. Aiken, 49 Tenn. 535, 1871 Tenn. LEXIS 42 (1871); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Henderson v. McGhee, 53 Tenn. 55, 1871 Tenn. LEXIS 317 (1871); Davis v. Bogle, 58 Tenn. 315, 1872 Tenn. LEXIS 264 (1872); Kelly v. Calhoun, 95 U.S. 710, 24 L. Ed. 544, 1877 U.S. LEXIS 2226 (1877); Henderson v. Ish, 3 Shan. 84 (1879); Bell's Adm'r v. Lyle, 78 Tenn. 44, 1882 Tenn. LEXIS 139 (1882); Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117, 1916 Tenn. LEXIS 82 (1917).

The omission to show the officer's personal acquaintance with the bargainor is one of a matter of substance, and is an omission of one of the most important requirements against fraud contained in the form prescribed by the statute. Such omission is not cured by § 66-26-113 curing the unintentional omission of words if the substance of the authentication is in the certificate. Johnson v. Walton, 33 Tenn. 258, 1853 Tenn. LEXIS 39 (1853); Fall v. Roper, 40 Tenn. 485, 1859 Tenn. LEXIS 137 (1859); Harrison v. Wade, 43 Tenn. 505, 1866 Tenn. LEXIS 80 (1866); Kelly v. Calhoun, 95 U.S. 710, 24 L. Ed. 544, 1877 U.S. LEXIS 2226 (1877); Henderson v. Ish, 3 Shan. 84 (1879); Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117, 1916 Tenn. LEXIS 82 (1917); Jefferson County Bank v. Hale, 152 Tenn. 648, 280 S.W. 408, 1925 Tenn. LEXIS 109 (1926); Granger v. Webster, 162 Tenn. 459, 36 S.W.2d 883, 1930 Tenn. LEXIS 109 (Dec. 1930).

Omission of showing of officer's personal acquaintance with bargainor in the certificate, where the acknowledgment is taken and certified in another state, is fatal. Bone v. Greenlee, 41 Tenn. 29, 1860 Tenn. LEXIS 6 (1860); Mullins v. Aiken, 49 Tenn. 535, 1871 Tenn. LEXIS 42 (1871); Kelly v. Calhoun, 95 U.S. 710, 24 L. Ed. 544, 1877 U.S. LEXIS 2226 (1877); Henderson v. Ish, 3 Shan. 84 (1879).

Omission of the phrase “for the purposes therein expressed” was a fatal defect. Literer v. Huddleston, 52 S.W. 1003, 1898 Tenn. Ch. App. LEXIS 174 (Tenn. Ch. App. 1898).

A certificate of acknowledgment reciting that the officer was personally acquainted with the acknowledger, and that she acknowledged the foregoing deed to be her act and deed for the purposes therein contained, is, when considered in connection with the deed, sufficient, though it omits the statutory words “the within named bargainor.” Willingham v. Potter, 131 Tenn. 18, 173 S.W. 434, 1914 Tenn. LEXIS 77 (1914); Stockton v. Murray, 25 Tenn. App. 371, 157 S.W.2d 859, 1941 Tenn. App. LEXIS 119 (1941).

Although the omission from the certificate of the phrase “for the purposes therein contained” was fatal to the registration of the instrument before passage of Acts 1919, ch. 48, such words are not necessary since its passage. Roysdon v. Choate, 15 Tenn. App. 295, 1932 Tenn. App. LEXIS 96 (1932).

An acknowledgment omitting the notary's statement that he was personally acquainted with the makers of the acknowledgment or that they had been known to him was defective. Savings, Bldg. & Loan Ass'n v. McLain, 18 Tenn. App. 292, 76 S.W.2d 650, 1934 Tenn. App. LEXIS 32 (1934); In re Anderson, 30 B.R. 995, 1983 U.S. Dist. LEXIS 18003 (M.D. Tenn. 1983); In re Airport-81 Nursing Care, Inc., 29 B.R. 501, 1983 Bankr. LEXIS 6536 (Bankr. E.D. Tenn. 1983); In re Airport-81 Nursing Care, Inc., 36 B.R. 370, 1984 Bankr. LEXIS 6427 (Bankr. E.D. Tenn. 1984).

Omission in acknowledgment was below the standard of care required of an attorney preparing instruments for conveyance of real property, giving rise to liability for the damages sustained by nonclients. Collins v. Binkley, 750 S.W.2d 737, 1988 Tenn. LEXIS 3 (Tenn. 1988).

Omission of the date on which it was executed does not invalidate a certificate of acknowledgment. Walker v. Midland Mortg. Co. (In re Medlin), 201 B.R. 188, 1996 Bankr. LEXIS 1279 (Bankr. E.D. Tenn. 1996).

7. Construction of Certificate.

It is well known that many notaries are elected without regard to qualification of applicants and without adequate knowledge of punctuation, and the court will feel justified in supplying a comma in a certificate when to do so will establish that the notary did his duty, and, at the same time, eliminates a superfluous statement; that the notary is “personally acquainted” with a person who is not a party to the instrument. A comma inserted will give the certificate full effect. Calloway v. Witt, 21 Tenn. App. 74, 105 S.W.2d 123, 1937 Tenn. App. LEXIS 9 (1937).

8. —Body of Deed — Effect on Construction.

The body of the deed may be read together with the certificate of acknowledgment to explain an apparent defect in the latter. Manis v. Farmers Bank, 170 Tenn. 656, 98 S.W.2d 313, 1936 Tenn. LEXIS 46 (1936).

Where caption of certificate named Hawkins County, and the notary was commissioned in Sullivan County, and deed conveyed land in Sullivan County and was registered there, and all parties resided there, and certificate recited that acknowledgment was taken “at office,” certificate was not invalid. Manis v. Farmers Bank, 170 Tenn. 656, 98 S.W.2d 313, 1936 Tenn. LEXIS 46 (1936).

9. Acknowledgment as Showing Date of Execution.

A certified copy of the deed, as registered, is prima facie evidence of the truth of its contents, and the acknowledgment of its execution by the grantor is an acknowledgment of its execution on the day it bears date. Owen's Adm'r v. Owen, 24 Tenn. 352, 1844 Tenn. LEXIS 76 (1844); Perry v. Calhoun, 27 Tenn. 551, 1847 Tenn. LEXIS 130 (1847).

10. Subrogation to Defectively Acknowledged Deed.

A wife asking subrogation to rights of a mortgagee under a mortgage defectively acknowledged by her is not deprived of subrogation by reason of such defect. If she chooses to treat it as valid one claiming adversely cannot be heard to urge its invalidity. Literer v. Huddleston, 52 S.W. 1003, 1898 Tenn. Ch. App. LEXIS 174 (Tenn. Ch. App. 1898).

66-22-108. Acknowledgment for record of corporate or partnership instrument.

  1. The authentication or acknowledgment for record of a deed or other instrument in writing executed by a corporation, whether it has a seal or not, shall be good and sufficient, when made in substantially the following form:

    State of Tennessee      )County of      )

    Before me,  of the state and county mentioned, personally appeared  , with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged such person to be president (or other officer authorized to execute the instrument) of  , the within named bargainor, a corporation, and that such president or officer as such  , executed the foregoing instrument for the purpose therein contained, by personally signing the name of the corporation as  .

    Witness my hand and seal, at office in  , this  day of  .

    Or, alternatively as follows:

    State of Tennessee      )County of      )

    On this  day of  , 20  , before me appear A. B. , to me personally known (or proved to me on the basis of satisfactory evidence), who, being by me duly sworn (or affirmed) did say that such person is the president (or other officer or agent of the corporation or association) of (describing the corporation or association), and that the seal affixed to the instrument is the corporate seal of the corporation (or association), and that the instrument was signed and sealed in behalf of the corporation (or association), by authority of its Board of Directors (or Trustees) and A. B.  acknowledged the instrument to be the free act and deed of the corporation (or association).

    (In case the corporation or association has no corporate seal, omit the words “the seal affixed to the instrument is the corporate seal of the corporation or association and that,” and add at the end of the affidavit clause, the words “and that the corporation (or association) has no corporate seal”). (In all cases add signature and title of officer taking the acknowledgment.)

    1. The authentication or acknowledgment for record of a deed or other instrument in writing executed by a partnership shall be good and sufficient when made in substantially the following form:

      State of Tennessee      )County of      )

      Before me,  , of the state and county aforementioned, personally appeared  , with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged such person to be a partner of  , the within named bargainor, a partnership, and that such person, as such partner, executed the foregoing instrument for the purpose therein contained, by signing the name of the partnership by such person as partner.

      Witness my hand and seal, this  day of  ,  .

    2. The signing of a certificate of acknowledgment for a partnership will not change any requirement of the partnership agreement itself.

Acts 1899, ch. 187, § 1; Shan., § 3747a1; Acts 1919, ch. 48, § 1; Shan. Supp., § 3747a2; Code 1932, § 7663; T.C.A. (orig. ed.), § 64-2208; Acts 1982, ch. 800, §§ 1, 2; 1983, ch. 158, §§ 4-8.

Compiler's Notes. Acts 1986, ch. 717, § 3 purported to repeal §§ 66-22-107 and 66-22-108 effective July 1, 1987; however, Acts 1986, ch. 717, § 3 has itself been repealed by Acts 1987, ch. 125, § 3.

Cross-References. Certificate of acknowledgment form, § 66-22-114.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 7-406 — 7-409.

Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 8, 15, 20; 18 Tenn. Juris., Mechanics' Liens, § 15.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

NOTES TO DECISIONS

1. Forms to Be Substantially Followed.

There is no authority in the Code for the use of any other form of acknowledgment for a corporate deed other than the forms set out in this section and such forms should be substantially followed. Pennington v. Webb-Hammock Coal Co., 182 Tenn. 33, 184 S.W.2d 47, 1944 Tenn. LEXIS 298 (1944); Chattanooga Lumber & Coal Corp. v. Phillips, 202 Tenn. 266, 304 S.W.2d 82, 1957 Tenn. LEXIS 388 (1957).

Trust deed of corporation spread on the books of the register was not entitled to registration where certificate of acknowledgment did not substantially follow forms for corporate acknowledgment set forth in this section and holder of trust was not entitled to preference over general creditors of insolvent corporation. Pennington v. Webb-Hammock Coal Co., 182 Tenn. 33, 184 S.W.2d 47, 1944 Tenn. LEXIS 298 (1944).

The form set forth in this section must be substantially followed by furnisher seeking lien under Mechanics' Lien Law. Chattanooga Lumber & Coal Corp. v. Phillips, 202 Tenn. 266, 304 S.W.2d 82, 1957 Tenn. LEXIS 388 (1957).

2. Omissions — Effect.

Words “personally appeared” in corporate acknowledgment to trust deed did not cure defect in acknowledgment where words “with whom I am personally acquainted” or words “to me personally known” were omitted. In re Englewood Mfg. Co., 28 F. Supp. 653, 1939 U.S. Dist. LEXIS 2387 (E.D. Tenn. 1939).

A certification of the identity of a party acknowledging the authenticity of an instrument is obviously one of the critical requirements included in the prescribed statutory forms for certificates of acknowledgment; the absence of certification of personal acquaintance with the party proffering the acknowledgment is fatally defective to the validity of the acknowledgment. In re Airport-81 Nursing Care, Inc., 29 B.R. 501, 1983 Bankr. LEXIS 6536 (Bankr. E.D. Tenn. 1983).

3. Disclosure of Identity as Officer.

It is necessary that the certificate disclose the identity of the person making acknowledgment as an authorized officer or representative of the corporation. Great American Indem. Co. v. Utility Contractors, Inc., 21 Tenn. App. 463, 111 S.W.2d 901, 1937 Tenn. App. LEXIS 48 (Tenn. Ct. App. 1937) (Decision on Indiana Certificate.)

Any certificate of acknowledgment omitting a recital of authorization to execute the deed acknowledged on behalf of a corporation is deficient and fails to substantially comply with subsection (a). If the form of acknowledgment certificate prescribed in T.C.A. § 66-22-107(a) substantially conformed to the form of certificate necessary for a corporate instrument, T.C.A. § 66-22-108(a) would be superfluous. In re Airport-81 Nursing Care, Inc., 29 B.R. 501, 1983 Bankr. LEXIS 6536 (Bankr. E.D. Tenn. 1983).

66-22-109. Acknowledgment of married person.

The acknowledgment of a married person, when required by law, may be taken in the same form as if such person were sole and without any examination separate and apart from that person's spouse.

Acts 1919, ch. 48, § 2; Shan., Supp., § 3747a3; Code 1932, § 7635; Acts 1975, ch. 283, § 1; T.C.A. (orig. ed.), § 64-2209.

Textbooks. Pritchard on Wills and Administration of Estates (4th ed., Phillips and Robinson), § 82.

Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 7.

NOTES TO DECISIONS

1. Form.

The acknowledgment by a married woman must be in form and with requisites prescribed for persons sui juris. Granger v. Webster, 162 Tenn. 459, 36 S.W.2d 883, 1930 Tenn. LEXIS 109 (Dec. 1930).

2. Homestead — Conveyance Without Privy Examination.

The constitution being silent as to the method by which the consent to conveyance of a homestead right may be ascertained, it was competent for the legislature to dispense with the privy examination of the wife in such case. Cunningham v. Moore, 161 Tenn. 128, 29 S.W.2d 654, 1929 Tenn. LEXIS 40 (1930), cited in Granger v. Webster, 162 Tenn. 459, 36 S.W.2d 883, 1930 Tenn. LEXIS 109 (Dec. 1930).

3. Wife's Property — Insufficient Authentication by Husband Immaterial.

If wife's authentication of deed to her property is sufficient, it is immaterial that the husband's is not. Jefferson County Bank v. Hale, 152 Tenn. 648, 280 S.W. 408, 1925 Tenn. LEXIS 109 (1926).

Collateral References.

Necessity of privy examination of married woman. 1 A.L.R. 1080.

66-22-110. Acknowledgments under seal.

All acknowledgments shall be under the seal of office of the officer taking same.

Code 1858, § 2043 (deriv. Acts 1839-1840, ch. 26, § 2); Shan., § 3718; mod. Code 1932, § 7636; T.C.A. (orig. ed.), § 64-2210.

NOTES TO DECISIONS

1. Seal Required.

The official seal of the acknowledging notary public must be affixed to a deed of trust if that instrument is to constitute notice to subsequent creditors or bona fide purchasers. Limor v. Fleet Mortg. Group (In re Marsh), 12 S.W.3d 449, 2000 Tenn. LEXIS 58 (Tenn. 2000).

Reading T.C.A. §§ 66-22-110 and former § 8-16-302 in pari materia, it appears that every act a notary is statutorily empowered to perform requires the affixation of the notary's official seal. Limor v. Fleet Mortg. Group (In re Marsh), 12 S.W.3d 449, 2000 Tenn. LEXIS 58 (Tenn. 2000).

66-22-111. Entry of probate or acknowledgment.

The clerk shall enter, in a well-bound book, the probate or acknowledgment of every deed or other instrument of writing proved or acknowledged before the clerk, which entry shall state:

  1. The date of the presentation of the paper where it is filed with the clerk, but is not proven or acknowledged because the witnesses fail or refuse to attend, or the clerk is not acquainted with the maker of the instrument;
  2. The date of the probate or acknowledgment;
  3. The names of the maker of the instrument and the person to whom it is made;
  4. The number of acres of land or town lots, or parts or portions of tracts of land or town lots, or other property mentioned in the paper; and
  5. A county or town in which the property is situated.

Code 1858, § 2087 (deriv. Acts 1833, ch. 92, § 15); Shan., § 3767; Code 1932, § 7678; T.C.A. (orig. ed.), § 64-2211.

66-22-112. Fees of clerk.

For the clerk's services in this behalf, the clerk shall have the following fees:

  1. For issuing a subpoena for each witness required to be summoned to prove the execution of a writing  $ .25
  2. For filing and entering the date of the presentation of a deed or other instrument, when its authentication is not completed at the time of presentation, in addition to the fees allowed by law for taking probates and acknowledgments of deeds and other instruments, and certifying the same  $ .10

Code 1858, § 2088 (deriv. Acts 1833, ch. 92, § 17); impl. am. Acts 1899, ch. 323, § 1; Shan., § 3768; Code 1932, § 7679; T.C.A. (orig. ed.), § 64-2212.

Cross-References. Clerk's fees in general, § 8-21-701.

66-22-113. Liability of officer for failure to carry out duties.

If the clerk or other officer who takes the probate or acknowledgment of a deed or other instrument fails or refuses to comply with and discharge the duties required of the clerk or officer, the clerk or officer shall forfeit and pay the sum of one hundred dollars ($100) for the use of the county in which the clerk or officer resides, which may be recovered by action of debt, in the name of the trustee of the county, in the circuit or chancery court; and the clerk or officer shall, moreover, be liable to the party injured for all damages the clerk or officer may sustain by such failure or refusal, together with costs, to be recovered by action on the case in the circuit or chancery court.

Code 1858, § 2089 (deriv. Acts 1833, ch. 92, § 18); Shan., § 3769; mod. Code 1932, § 7680; T.C.A. (orig. ed.), § 64-2213.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 2.

NOTES TO DECISIONS

1. Application.

The clerk's liability under this section applies to notaries public under § 66-22-102, empowering notaries to take acknowledgments in the same manner and under the same rules and regulations as govern county clerks under existing laws. Figuers v. Fly, 137 Tenn. 358, 193 S.W. 117, 1916 Tenn. LEXIS 82 (1917).

Collateral References.

Admissibility, in action against notary public, of evidence as to usual business practice of notary public of identifying person seeking certificate of acknowledgment. 59 A.L.R.3d 1327.

66-22-114. Certificate of acknowledgment form.

  1. If the acknowledgment is made before any of the officers who are authorized to take such acknowledgment under 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:

    State of Tennessee  )

    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  , 20  .

  2. 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.

Acts 1986, ch. 717, § 2; 1987, ch. 125, §§ 1, 2.

Cross-References. Acknowledgment form for corporate or partnership instrument, § 66-22-108.

Form of certificate of acknowledgment, § 66-22-107.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 7-401 — 7-409.

Law Reviews.

1987 Legislation Affecting Tennessee Real Estate Practice (William R. Bruce), 23 No. 4 Tenn. B.J. 21 (1987).

NOTES TO DECISIONS

1. In General.

An acknowledgment establishes the proper execution of the document, while a verification establishes the truth of the document's contents. D.T. McCall & Sons v. Seagraves, 796 S.W.2d 457, 1990 Tenn. App. LEXIS 367 (Tenn. Ct. App. 1990).

2. Construction.

While T.C.A. § 66-22-114(b) excuses informality in the form of an acknowledgment, there is no indication that the general assembly ever intended that it could obviate the need for a sworn pleading when one is required by another statute or rule. D.T. McCall & Sons v. Seagraves, 796 S.W.2d 457, 1990 Tenn. App. LEXIS 367 (Tenn. Ct. App. 1990).

Where a bank made a loan to the debtor, a deed of trust was recorded, and a notary certified that the debtor, “unmarried, personally appeared before her,” the certificate of acknowledgment was valid under T.C.A. § 66-26-113, because it substantially complied with the relevant statutory requirements; furthermore, the certificate of acknowledgment met the criterion in T.C.A. § 66-22-114(b) in that it clearly evidenced the intent of the maker of the deed of trust to acknowledge his signature on the instrument; therefore, the deed of trust was properly acknowledged under Tennessee law and was not voidable by a judicial lien creditor or a bona fide purchaser without notice. In re Akins, 87 S.W.3d 488, 2002 Tenn. LEXIS 472 (Tenn. 2002).

Where debtors executed a deed of trust to a creditor that omitted the debtors' names on the acknowledgement form, the deed of trust was invalid; the creditor could not satisfy the intent test under T.C.A. § 66-22-114(b), because the notary named no one in the certificate of acknowledgment, and the court could not determine who, if anyone, intended to acknowledge the signatures on the deed of trust. Gregory v. Ocwen Fed. Bank (In re Biggs), 377 F.3d 515, 2004 FED App. 250P, 2004 U.S. App. LEXIS 15588 (6th Cir. Tenn. 2004).

T.C.A. § 66-22-114(b) requires only that a certificate of acknowledgment clearly evidence the signer's intent to authenticate, acknowledge, or verify a document; the intent at issue goes to the person or persons named in the acknowledgment, not the notary. Gregory v. Ocwen Fed. Bank (In re Biggs), 377 F.3d 515, 2004 FED App. 250P, 2004 U.S. App. LEXIS 15588 (6th Cir. Tenn. 2004).

66-22-115. Recognition of certificate of acknowledgment.

  1. The form of a certificate of acknowledgment used by a person whose authority is recognized under §§ 66-22-103 and 66-22-104, shall be accepted in this state if the:
    1. Certificate is in a form prescribed by the laws or regulations of this state; or
    2. Certificate is in a form prescribed by the laws or regulations applicable in the other state, or territory, or foreign country in which the acknowledgment is taken.
  2. A notarial act performed prior to March 29, 1995, is not affected by this section. This section provides an additional method of proving notarial acts. Nothing in this section diminishes or invalidates the recognition accorded to notarial acts by other laws or regulations of this state.

Acts 1995, ch. 52, § 1.

Cross-References. Notaries public, title 8, ch. 16.

Chapter 23
Authentication of Instruments by Witnesses

66-23-101. Witnesses outside state when maker unavailable.

If the person executing the instrument is dead, or resides or is beyond the limits of the United States and its territories, the instrument may be proved for registration before any clerk of a court of record in any of the states or territories, or before a commissioner for Tennessee, appointed by the governor, in any such state or territory, or before a notary public of such state or territory, by two (2) subscribing witnesses, or, if one (1) of them is dead, then by the subscribing witness living, and proof of the handwriting of the deceased witness by two (2) persons acquainted with such person's handwriting.

Acts 1869-1870, ch. 122, § 1; Shan., § 3731; Code 1932, § 7646; T.C.A. (orig. ed.), § 64-2301.

Cross-References. Destruction of and tampering with governmental records, § 39-16-504.

Notaries public, title 8, ch. 16.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

66-23-102. Witnesses within state.

If the subscribing witnesses reside or are within the state, they shall appear before the clerk or deputy clerk of the county where it is proposed to prove the instrument.

Code 1858, § 2048 (deriv. Acts 1835-1836, ch. 53, §§ 5, 6; 1837-1838, ch. 150, § 1); Shan., § 3723; mod. Code 1932, § 7638; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-2302.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 11.

66-23-103. One witness in state.

If only one (1) of the subscribing witnesses resides within the state, that witness may prove the execution of the instrument, the handwriting of the other witness or witnesses being proved by some other person.

Code 1858, § 2049 (deriv. Acts 1831, ch. 90, § 10); Shan., § 3724; Code 1932, § 7639; T.C.A. (orig. ed.), § 64-2303.

66-23-104. One witness competent.

If all the subscribing witnesses are dead, insane, blind, or deaf and dumb, except one (1), that witness may prove the execution of the instrument before the clerk or deputy clerk of the county, the handwriting of the other witness being proved by some other person.

Code 1858, § 2055 (deriv. Acts 1831, ch. 90, § 10); Shan., § 3730; mod. Code 1932, § 7645; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-2304.

NOTES TO DECISIONS

1. Form of Certificate.

The statutes prescribed no form for the certificate of probate or authentication upon proof of witnesses, and only provided that the certificate shall be varied so as to adapt it to the various modes of proof prescribed. A certificate, upon the instrument, “that R. P. Bateman appeared before me and made oath that he is well acquainted with the handwriting of B. F. Brown, and that the signature of said Brown, one of the subscribing witnesses to the within, is in his own handwriting,” was held to be a sufficient form. Sharp v. Hunter, 47 Tenn. 389, 1870 Tenn. LEXIS 160 (1870), superseded by statute as stated in, W. & O. Constr. Co. v. IVS Corp., 688 S.W.2d 67, 1984 Tenn. App. LEXIS 3187 (Tenn. Ct. App. 1984).

2. Certificate of Proof of Handwriting Without Proof of Incapacity.

The certificate of proof of the handwriting of a subscribing witness is valid, without showing his death or other incapability declared in the statute, if it be otherwise sufficient, for the statute does not require the clerk to certify to the death or statutory incapacity of the subscribing witness, or to examine other witnesses on that point. It would be regular and proper that he should do so, but his certificate is not void if he omit it. Sharp v. Hunter, 47 Tenn. 389, 1870 Tenn. LEXIS 160 (1870), superseded by statute as stated in, W. & O. Constr. Co. v. IVS Corp., 688 S.W.2d 67, 1984 Tenn. App. LEXIS 3187 (Tenn. Ct. App. 1984).

66-23-105. Witnesses in another state.

If the witnesses reside or are in any other state of the union, the proof shall be made before the same officers and tribunals who can take the acknowledgment of the maker of the instrument.

Code 1858, § 2053 (deriv. Acts 1839-1840, ch. 26, § 5); Shan., § 3728; Code 1932, § 7643; T.C.A. (orig. ed.), § 64-2305.

Law Reviews.

Recording Acts — Heir's Interest in Land After an Unrecorded Deed Executed by the Ancestor, 8 Tenn. L. Rev. 282 (1930).

66-23-106. Witnesses outside country.

If the witnesses, or any of them, reside or are beyond the limits of the United States, the instrument may be proved by two (2) subscribing witnesses before the same officers and tribunals who have authority out of the state to take the acknowledgment of the person who executed the same.

Code 1858, § 2052 (deriv. Acts 1839-1840, ch. 26, § 2); Shan., § 3727; Code 1932, § 7642; T.C.A. (orig. ed.), § 64-2306.

66-23-107. Testimony before foreign court — Proof of handwriting.

If the witnesses reside without the limits of the state, the party desiring the probate of the instrument may procure their testimony to be entered of record in any court of record having cognizance thereof or may prove the instrument by two (2) persons acquainted with the handwriting of the person who executed the same, before the clerk or deputy clerk of some county in Tennessee.

Code 1858, §§ 2050, 2051 (deriv. Acts 1809 (Sept.), ch. 104; 1831, ch. 90, § 10); Shan., §§ 3725, 3726; Code 1932, §§ 7640, 7641; T.C.A. (orig. ed.), § 64-2307.

NOTES TO DECISIONS

1. Modes of Proving Probate.

The most satisfactory evidence of the proper probate of an instrument, made under this section, is a certified copy of the court records. Where a certified copy of the court record is not given, but the probate is attempted to be shown by the clerk's statement, there must be a record statement, or a statement of facts shown by the record, showing the character of the instrument, by naming the parties and giving some general description of the property, and showing the execution of the deed by the proof of the subscribing witnesses, whose names should be stated. Numerous examples of sufficient and insufficient records and certificates appear in the cases cited. Malone's Lessee v. Stevens, 10 Tenn. 520, 1831 Tenn. LEXIS 8 (1831); Greer's Heirs v. Smith, 15 Tenn. 487, 15 Tenn. 486, 1835 Tenn. LEXIS 31 (1835); Den v. Clay, 17 Tenn. 257, 1836 Tenn. LEXIS 35 (1836).

2. —Probate Before Foreign Justices of Peace Unauthorized.

The probate of instruments for registration, made before justices of the peace of other states, is not authorized by this section, because they do not preside in courts of record. Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

3. Insufficient Proof of Instrument.

Where deed was not established under § 66-22-101 requiring two subscribing witnesses, and where testimony of one witness failed to show that he was acquainted with handwriting of maker, as required by this section, chancellor was correct in holding that deed was not properly admitted for registration, and that certified copy was not admissible in evidence. Lamons v. Mathes, 33 Tenn. App. 609, 232 S.W.2d 558, 1950 Tenn. App. LEXIS 119 (Tenn. Ct. App. 1950).

66-23-108. Subpoena for witnesses.

When an instrument is presented to a clerk or deputy clerk for probate, and the party presenting it suggests to the clerk that the subscribing witnesses or any of them refuse to appear and give evidence of the execution of the instrument, the clerk shall issue a subpoena to compel the attendance of the recusant witnesses to prove the execution of the instrument.

Code 1858, § 2056 (deriv. Acts 1833, ch. 92, § 8); Shan., § 3733; Code 1932, § 7648; T.C.A. (orig. ed.), § 64-2308.

Cross-References. Subpoena fee, § 66-22-112.

66-23-109. Form of subpoena.

The subpoena provided for in § 66-23-108 shall command the officer to summon the witnesses to appear before the clerk at the clerk's office, on a certain day specified in it, to give their evidence touching the execution of the instrument, or other authentication thereof, under a penalty of two hundred dollars ($200), to be recovered, in case of failure to attend, as other forfeitures for disobeying subpoenas.

Code 1858, § 2059 (deriv. Acts 1806, ch. 49, § 1); Shan., § 3736; Code 1932, § 7651; T.C.A. (orig. ed.), § 64-2309.

66-23-110. Witness fees.

  1. The witness fees, to be paid by the party summoning them, at the time of their attendance, shall be the following:
    1. For each day's attendance, seventy-five cents (75¢); and
    2. For every thirty (30) miles traveling to and from the clerk's office, seventy-five cents (75¢); provided, that no mileage shall be allowed a witness who resides within the county where the instrument is to be proved.
  2. Should the party fail or refuse to pay the witness fees, the witness may recover the same before a general sessions court.

Code 1858, §§ 2060-2062 (deriv. Acts 1806, ch. 49, § 2; 1833, ch. 92, § 9); Shan., §§ 3737-3739; Code 1932, §§ 7652-7654; impl. am. Acts 1979, ch. 68, § 3; T.C.A. (orig. ed.), § 64-2310.

NOTES TO DECISIONS

1. Failure of Clerk and Master to Pay Over Fees — Liability of Surety.

This section denominates the compensation for witness attending court under legal process as “fees” and surety on clerk and master's bond is liable for failure of clerk and master to pay over such fees. State v. American Surety Co., 22 Tenn. App. 197, 120 S.W.2d 967, 1938 Tenn. App. LEXIS 16 (Tenn. Ct. App. 1938).

66-23-111. Execution of subpoena.

Any sheriff or constable, into whose hands the subpoena may come, shall execute it, without delay, on the witness or witnesses named in it, but not unless the party suing out the subpoena pay or tender to the sheriff or constable a fee of one dollar ($1.00) for summoning each witness.

Code 1858, § 2063 (deriv. Acts 1833, ch. 92, § 11); Shan., § 3740; Code 1932, § 7655; modified; T.C.A. (orig. ed.), § 64-2311.

66-23-112. Liability of witness for failure to attend.

Should any witness, summoned as provided in § 66-23-108, fail or refuse to attend, that witness shall be subject to an action on the case for damages at the suit of the party by whom the witness was summoned.

Code 1858, § 2064 (deriv. Acts 1833, ch. 92, § 10); Shan., § 3741; Code 1932, § 7656; T.C.A. (orig. ed.), § 64-2312.

66-23-113. Sheriff's liability for failure to serve subpoena.

If the sheriff fails or refuses to serve a subpoena for witnesses in such case, the sheriff shall be liable to a like action for damages, but not unless the sheriff's fees are tendered or paid.

Code 1858, § 2065 (deriv. Acts 1833, ch. 92, § 12); Shan., § 3742; Code 1932, § 7657; T.C.A. (orig. ed.), § 64-2313.

66-23-114. Proof of handwriting of maker.

If all the subscribing witnesses are dead, insane, blind, or deaf and dumb, the instrument may be proved before the county clerk or deputy county clerk by any two (2) persons who are acquainted with the handwriting of the maker of the same.

Code 1858, § 2054 (deriv. Acts 1831, ch. 90, § 10); Shan., § 3729; Code 1932, § 7644; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-2314.

NOTES TO DECISIONS

1. Chancery Jurisdiction.

Where a deed of conveyance of land is lost or destroyed before its registration, chancery has jurisdiction, upon proper allegations and proof, to establish the same, and thus make the evidence of the title a matter of record, even after the death of the grantor. Hord v. Baugh, 26 Tenn. 576, 1847 Tenn. LEXIS 25, 46 Am. Dec. 91 (1847); Montgomery v. Kerr, 46 Tenn. 199, 1869 Tenn. LEXIS 50, 98 Am. Dec. 450 (1869); Anderson v. Akard, 83 Tenn. 182, 1885 Tenn. LEXIS 40 (1885).

The chancery court has jurisdiction, by decree, to establish and probate instruments where the same, in consequence of the death or incapability of the subscribing witnesses, cannot be probated in the ordinary way, and where the maker refuses to acknowledge the same; and the chancery decree comes in the place of the ordinary probate, and authorizes the registration of the instrument. Ward v. Daniel, 29 Tenn. 603, 1850 Tenn. LEXIS 40 (1850); Allen v. Allen, 2 Cooper's Tenn. Ch. 28 (1874).

2. Secondary Evidence — When Admissible.

When the attesting or subscribing witnesses to a deed, will, or other instrument are dead or reside beyond the limits of the state, and without jurisdiction of the court, secondary evidence is admissible to prove the instrument by proving the handwriting of the maker and such witnesses. Stump v. Hughes, 6 Tenn. 93, 1818 Tenn. LEXIS 30 (1818); Den ex rel. Demise of Haggard v. Mayfield, 6 Tenn. 121, 1818 Tenn. LEXIS 46 (1818); Crockett v. Crockett, 19 Tenn. 95, 1838 Tenn. LEXIS 23 (1838).

66-23-115. Proof by handwriting of maker or witnesses.

If the person executing the instrument is dead, or resides or is beyond the limits of the United States and its territories, and the subscribing witnesses are dead, or have become insane or blind, or deaf and dumb, since they became subscribing witnesses, or they cannot be found, then the instrument may be proven for registration before any of the officers mentioned in § 66-23-101, by any two (2) persons acquainted with the handwriting of such maker or such witnesses.

Acts 1869-1870, ch. 122, § 2; Shan., § 3732; Code 1932, § 7647; T.C.A. (orig. ed.), § 64-2315.

66-23-116. Examination of witnesses.

When the witness or witnesses appear before the clerk, the clerk shall propound to them such questions as the clerk may find requisite to establish the facts necessary to authenticate the instrument, whether it be the identity of the maker, the maker's handwriting, or the handwriting of a nonresident or deceased witness.

Code 1858, § 2057 (deriv. Acts 1831, ch. 90, § 2); Shan., § 3734; Code 1932, § 7649; T.C.A. (orig. ed.), § 64-2316.

66-23-117. Form of certificate of probate.

If the subscribing witnesses appear before the clerk or deputy clerk of any county of the state, and prove the facts necessary to authenticate the instrument, the clerk shall write on the back or some other part of the instrument the following certificate:

State of Tennessee      )County of      )

Personally appeared before me,  , clerk (or deputy clerk) of the county of  aforementioned,  and  , subscribing witnesses to the within deed, who, being first sworn, deposed and said that they are acquainted with  , the bargainor (or as the case may be), and that the bargainor acknowledged the same, in their presence, to be the bargainor's act and deed upon the day it bears date (or stating the time as proved by the witnesses).

Witness my hand, at office, this  day of  , 20  .

Code 1858, § 2058 (deriv. Acts 1831, ch. 90, § 2); Shan., § 3735; Code 1932, § 7650; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 64-2317.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 16.

NOTES TO DECISIONS

1. Officials Before Whom Probated.

The probates of instruments upon proof by subscribing witnesses cannot be made before notaries public in this state, but must be before county clerks. McGuire v. Gallagher, 95 Tenn. 349, 32 S.W. 209, 1895 Tenn. LEXIS 97 (1895).

2. Immaterial Omissions.

The court, without deciding the question, expresses the opinion that omission of the words “in their presence” from the form of certificate of probate would be fully cured by the provision in § 66-26-113 that the omission of words not affecting the substance of the authentication required by law in the certificate shall in nowise vitiate the validity of the deed. Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871).

3. Fatal Omissions.

If the certificate fails to show that the subscribing witnesses stated upon oath “that they are acquainted with  , the bargainor,” which are words of substance, the probate is fatally defective, and does not authorize the registration of the instrument. Brogan v. Savage, 37 Tenn. 689, 1858 Tenn. LEXIS 99 (1858); Harrison v. Wade, 43 Tenn. 505, 1866 Tenn. LEXIS 80 (1866).

4. Deed Registered upon Defective Probate.

A certified copy of a deed, registered upon such defective probate, is inadmissible in evidence; and such instrument cannot be proved in common law form, by proof of the witnesses that they heard the grantor acknowledge the original deed. For such purpose, the original deed must be produced. Brogan v. Savage, 37 Tenn. 689, 1858 Tenn. LEXIS 99 (1858).

A judgment in a court of record against the grantor in a deed, registered upon such defective probate, is a lien on the land so conveyed, though the conveyance is good as between the grantor and grantee. Harrison v. Wade, 43 Tenn. 505, 1866 Tenn. LEXIS 80 (1866); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871).

5. Impeaching Character of Subscribing Witnesses.

A registered deed may, when offered in evidence, be shown to be a forgery, and, to this end, testimony may be introduced to prove that the subscribing witnesses were men of bad character, and could not be believed upon oath in a court of justice. Gardenhire v. Parks, 10 Tenn. 23, 1820 Tenn. LEXIS 5 (1820).

66-23-118. Certificate adapted to mode of proof.

The certificate of probate shall be varied so as to adapt it to the various modes of proof prescribed in this chapter.

Code 1858, § 2066; Shan., § 3743; Code 1932, § 7658; T.C.A. (orig. ed.), § 64-2318.

66-23-119. Annexed papers when proof made in foreign court.

If the instrument is proved by procuring the testimony of the witnesses to be entered of record in a court of record in one (1) of the United States or of a foreign country, there shall be endorsed upon or annexed to the deed a copy of the probate from the record, certified by the clerk or keeper of the records, under that officer's official seal, if there is one, or if not, under that officer's private seal, and the official character of the clerk or keeper of the records shall be certified by the presiding judge of the court.

Code 1858, § 2067 (deriv. Acts 1809 (Sept.), ch. 104); Shan., § 3744; Code 1932, § 7659; T.C.A. (orig. ed.), § 64-2319.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Recording Acts, § 8.

66-23-120. Facts shown in foreign certificate of probate.

If the probate is taken outside the state, the certificate shall show the capacity in which the person who took the probate acted, and the state in which the probate was taken.

Code 1858, § 2068; Shan., § 3745; Code 1932, § 7660; T.C.A. (orig. ed.), § 64-2320.

Chapter 24
Registration of Instruments

Part 1
General Provisions

66-24-101. Writings eligible for registration — Refusal to register documents not in English — Electronic records.

  1. The following writings may be registered:
    1. All agreements and bonds for the conveyance of real or personal estate;
    2. All powers of attorney authorizing the sale, transfer, or conveyance of real or personal estate, or for any other purpose, or appointing an agent to transact any business whatever;
    3. All revocations of powers of attorney;
    4. All deeds for absolute conveyance of any lands, tenements or hereditaments, or any estate therein;
    5. All instruments of writing for the absolute conveyance of personal property;
    6. Copies of deeds of conveyance, with certificate of probate, of lands being in different counties in this state, certified by the register of the county where same has been first registered;
    7. Deeds of gifts of any estate, real or personal;
    8. All mortgages and deeds of trust of either real or personal property;
    9. The acknowledgment of satisfaction and discharge of mortgage, trust, and other liens, by an entry in the margin of the record thereof;
    10. All marriage settlements, contracts, or agreements;
    11. Deeds and mesne conveyances for the settlement of property, real or personal, in consideration of marriage;
    12. All other deeds of every description;
    13. Transfers or assignments of plats and certificates of survey or locations of land;
    14. All instruments in writing transferring or conveying any right of improvement, occupancy or preemption;
    15. Leases for more than three (3) years from the time of making the same, or a summary or abstract of such leases;
    16. Wills devising lands in Tennessee, or certified copies thereof, duly admitted to probate in Tennessee or in other states, together with certified copies of related probate orders;
    17. Memoranda of judgments, attachments, orders, injunctions, and other writs affecting title, use or possession of real estate;
    18. Certified copies of decrees divesting the title of land out of one person and vesting it in another;
    19. Memoranda of judgments or decrees, stating the court, date of judgment, names of parties, and amount of judgment, to bind equitable interests in land or personalty;
    20. Discharges of soldiers, sailors, marines, and naval and army officers of the United States. County registers are required, upon application of lawful holders thereof, to register such discharges without charge to the person named in the discharge, or to the holder of such discharge. Certified copies of such registered discharges issued by the register shall be legal evidence of such discharge;
    21. Certified copies of the petition in bankruptcy, with schedules omitted, of the decree of adjudication and of the order of court approving the bond of the trustee, in any bankruptcy proceeding in any court of bankruptcy of the United States;
    22. Receipts evidencing the payment of Tennessee inheritance taxes issued by the commissioner of revenue or the commissioner's authorized representative and nontaxable certificates evidencing that a sworn return for inheritance tax has been filed with the department of revenue by a duly qualified representative of the estate showing that it has been ascertained that the estate was not subject to tax, such nontaxable certificate having been issued by the commissioner or the commissioner's authorized representative;
    23. All instruments granting, transferring, pledging or assigning an interest in leases or rents arising from real property;
    24. All trust agreements or a summary or abstract of such agreements;
    25. All instruments required to be filed pursuant to § 66-19-301;
      1. Any instrument that provides for any party to agree to take any action regarding any interest in real property, or not to take such action regarding any interest in real property, including, but not limited to, any agreement to or negative agreement to mortgage, pledge, assign, hypothecate, alienate, subdivide, encumber, sell, transfer, or otherwise affect the real property or any part thereof;
      2. All agreements described in subdivision (a)(26)(A) that are of record as of June 14, 1999, shall be deemed validly recorded and do not need to be re-recorded to have the benefit of subdivision (a)(26)(A) and shall further be deemed to have been validly recorded upon their initial registration;
    26. Affidavits of scrivener's error and other affidavits in furtherance of identification and title to land. The affiant in the case of any affidavit of scrivener's error may attach a document, including a document previously recorded with corrections made by the affiant, with the affidavit; and
    27. Reports of sale and notices reflecting tax sale results filed pursuant to any lawsuit for the sale of property for delinquent taxes.
    1. The county register may refuse to register any writing eligible for registration in accordance with this title, if such writing, in the opinion of the county register, is illegible or cannot be legibly recorded or reproduced unless the person seeking to register the writing attaches to it for recording an affidavit stating that such writing is the best available original and sets forth the following facts regarding the writing:
      1. The type of document or instrument;
      2. The grantor or grantors and grantee or grantees;
      3. The date of execution;
      4. The name of the person or persons authenticating or acknowledging the signature of the grantor or grantors, and their title, if any;
      5. A description of the real property, if any, being affected by the writing; and
      6. All other information or recitals required by law for the registration of the writing that would otherwise be placed on the writing itself.
    2. If an affidavit in the form and with the information as required by this subsection (b) is attached to the writing, the county register shall register the writing notwithstanding that it is illegible or cannot be legibly recorded or reproduced.
  2. The county register may refuse to register any writing eligible for registration in accordance with this title if this writing is wholly or substantially written in any language other than English unless the person seeking to register the writing attaches an affidavit in which the affiant gives a complete translation of the writing offered for registration into English. The affidavit shall be recorded with the original writing and the original writing and its attached affidavit shall be treated as one instrument for recording purposes.
    1. The county register may register a copy of an electronic document if the writing is otherwise eligible for registration and the electronic document is certified as a true and correct copy of the original as required in subdivision (d)(3).
    2. For purposes of this section, an electronic document is defined as one of the following:
      1. A writing created or retained as an electronic record in accordance with the Uniform Electronic Transactions Act (UETA), compiled in title 47, chapter 10, or the Uniform Real Property Electronic Recording Act (URPERA), compiled in part 2 of this chapter, as codified in this state or a substantially similar law of another state as defined in the URPERA, and transmitted to the county register electronically, or a paper copy of such an electronic record; or
      2. A writing that is a digitized image of a paper document (electronic copy) that is transmitted to the county register electronically.
    3. The certification of an electronic document shall be made by either a licensed attorney or the custodian of the electronic version of the document and the signature of that person shall be acknowledged by a notary public. The certification shall be transmitted with the electronic document and shall be recorded by the county register as a part of the document being registered. The certification of electronic document shall be in substantially the following form:

      I,  , do hereby make oath that I am a licensed attorney and/or the custodian of the electronic version of the attached document tendered for registration herewith and that this is a true and correct copy of the original document executed and authenticated according to law.

      State of

      County of

      Personally appeared before me,  , a notary public for this county and state, (name of person making certification) who acknowledges that this certification of an electronic document is true and correct and whose signature I have witnessed.

      Notary's Signature

      MY COMMISSION EXPIRES:

      Notary's Seal (If on paper)

    4. All electronic documents eligible for registration pursuant to this subsection (d) are validly registered when accepted for recording by the county register. Electronic documents registered by county registers prior to July 1, 2007, shall be considered validly registered with or without the certification provided in subdivision (d)(3).
    5. No county register shall be required to accept a document transmitted electronically.
  3. Unless an instrument is acknowledged or proved, as provided in chapter 22 of this title, or other applicable law:
    1. The county register may refuse to register or note the instrument for registration; and
    2. If the instrument conveys any interest in real property, including any lien on the property, no purchaser shall be required to accept delivery of the instrument. If, however, an instrument not so acknowledged or proved is otherwise validly registered, the instrument shall be deemed to be validly registered for the purposes of §§ 66-26-102 and 66-26-103, and in full compliance with all statutory requirements set forth in § 66-22-101, and all interested parties shall be on constructive notice of the contents of the instrument.
  4. Subsection (e) shall apply to all instruments of record on or after June 6, 2005. However, if the relative priorities of conflicting claims to real property were established at a time prior to June 6, 2005, the law applicable to such claims at such time shall determine their priority.

Code 1858, § 2030 (deriv. Acts 1805, ch. 16, § 2; 1805, ch. 72, § 5; 1807, ch. 85, §§ 3, 4; 1831, ch. 90, §§ 1, 8, 11, 13; 1832, ch. 11, § 3; 1833, ch. 92, § 6; 1839-1840, ch. 26, § 1; 1841-1842, ch. 12, § 4; 1843-1844, ch. 187, § 1); Acts 1875, ch. 124, § 1; 1883, ch. 253, § 1; Shan., § 3697; Acts 1919, ch. 128, § 1; 1925, ch. 148, § 1; Shan. Supp., § 3704a8; mod. Code 1932, § 7621; mod. C. Supp. 1950, § 7621; Acts 1981, ch. 405, § 1; T.C.A. (orig. ed.), § 64-2401; Acts 1984, ch. 603, § 1; 1984, ch. 892, § 1; 1989, ch. 213, § 1; 1989, ch. 364, § 5; 1990, ch. 756, § 2; 1995, ch. 162, § 1; 1999, ch. 364, §§ 1, 2; 2001, ch. 48, § 1; 2002, ch. 735, § 13; 2004, ch. 497, § 1; 2004, ch. 576, § 4; 2005, ch. 13, § 1; 2005, ch. 303, § 1; 2007, ch. 116, § 1; 2007, ch. 420, § 1; 2015, ch. 524, § 2.

Compiler's Notes. Acts 2005, ch. 13, § 3 provided that Acts 2004, ch. 801 is repealed.

Acts 2015, ch. 524, § 3 provided that the act, which added (a)(28), shall apply to any sale occurring on or after January 1, 2016.

Amendments. The 2015 amendment added (a)(28).

Effective Dates. Acts 2015, ch. 524, § 3. January 1, 2016.

Cross-References. Contract for improvements to land, registration, § 66-11-111.

Deeds, registration required, § 66-5-106.

Durable power of attorney, § 34-6-101 et seq.

Duties of register, § 8-13-108.

Effective date of judgment lien, § 25-5-101.

Indexes to public records, § 10-7-201.

Leases required to be registered, § 66-7-101.

Lien book, §§ 25-5-107, 66-21-102, 66-21-103.

Limited partnership certificate, title 61, ch. 2, part 2.

Mechanic's lien, registration of satisfaction, § 66-11-135.

Notaries public, title 8, ch. 16.

Recordation tax, § 67-4-409.

Registration abstract of justice's attachment on mechanic's lien, § 66-11-134.

Registration of clerk's deed, § 16-1-108.

Security interests, filing, §§ 47-9-302.

English deemed official and legal language, § 4-1-404.

Uniform Electronic Transactions Act, § 47-10-101 et seq.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 101.

Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 3, 4; 3 Tenn. Juris., Assignments, § 35; 16 Tenn. Juris., Judgments and Decrees, §§ 32, 38; 19 Tenn. Juris., Mortgages and Deeds of Trust, § 20; 21 Tenn. Juris., Recording Acts, §§ 3, 5, 6; 25 Tenn. Juris., Wills, § 159.

Law Reviews.

Recent Decision, The Tennessee Court of Appeals Interprets the Tennessee Recording Statutes, Gregg v. Link, (1989), 56 Tenn. L. Rev. 777 (1989).

Selected Tennessee Legislation of 1986, 54 Tenn. L. Rev. 457 (1987).

Attorney General Opinions. County register's office which makes all its public records available on the Internet may remove records regarding military discharges from the Internet while continuing to make other types of public documents available, OAG 02-133, 2002 Tenn. AG LEXIS 141 (12/18/02).

NOTES TO DECISIONS

1. Time When Registered.

Statutory provisions construed together in holding that the time of reception of deed for registration is the time of which the deed is delivered to the register, and not when the register enters the instrument on his notation book. Chatten v. Knoxville Trust Co., 154 Tenn. 345, 289 S.W. 536, 1926 Tenn. LEXIS 132, 50 A.L.R. 537 (1926).

2. Evidence of Oral Transaction.

The evidence of a transaction which is allowed to be done by the mere act of the parties, or which may rest in pais, without any writing, cannot, in the very nature of things, be registered. Meacham v. Meacham, 91 Tenn. 532, 19 S.W. 757, 1892 Tenn. LEXIS 26 (1892).

3. Contracts or Agreements for Conveyance of Land.

4. —Effect of Unrecorded Contract.

A debtor's unrecorded contract to transfer land is not effective against a judgment lien creditor of the debtor, even if the creditor knew of the contract before obtaining its judgment lien. In re Don Williams Constr. Co., 143 B.R. 865, 1992 Bankr. LEXIS 1261 (Bankr. E.D. Tenn. 1992).

5. —Contract for Conveyance of Land Held under Equitable Title.

An unregistered contract for the conveyance of land held by the obligor under equitable title, to be conveyed whenever he shall obtain the legal title, will not prevail against the lien of a judgment against the obligor, created by registration thereof. Buchanan v. Kimes, 61 Tenn. 275, 1872 Tenn. LEXIS 370 (1872).

6. Assignment of Contract for Sale of Growing Trees.

An instrument assigning a contract for the sale of growing trees and extension of the time limited for the removal thereof transfers an interest in land, and is required to be registered. Childers v. Wm. H. Coleman Co., 122 Tenn. 109, 118 S.W. 1018, 1909 Tenn. LEXIS 6 (1909).

7. Title Bonds.

8. —Effect of Registration.

The registration of the title bond is effective to protect the vendee, even after the completion of the contract of sale by a deed of conveyance, though such deed is not registered. Merriman v. Polk, 52 Tenn. 717, 1871 Tenn. LEXIS 302 (1871).

After the registration of a title bond for the conveyance of land, the vendor has no such interest in the land as can be levied on and sold, where such levy and sale would defeat the interest already acquired by the vendee. The purchaser at execution sale of such land as that of the vendor will hold the naked-legal title as trustee for the vendee. Merriman v. Polk, 52 Tenn. 717, 1871 Tenn. LEXIS 302 (1871); Irvy Morgan & Co. v. Snell, 62 Tenn. 382, 1874 Tenn. LEXIS 64 (1874).

9. —Transfer without Registration.

A title bond may be transferred by a written assignment, which may be indorsed thereon, without registration; or it may be transferred by simple delivery; and if the transfer is made bona fide and upon adequate consideration, the assignment or transfer is good against all persons. Wilburn v. Spofford, Tileston & Co., 36 Tenn. 698, 1857 Tenn. LEXIS 71 (1857); Robinson v. Williams, 40 Tenn. 540, 1859 Tenn. LEXIS 156 (1859); Ocoee Bank v. Nelson, 41 Tenn. 186, 1860 Tenn. LEXIS 43 (1860); Merriman v. Polk, 52 Tenn. 717, 1871 Tenn. LEXIS 302 (1871); Maloney v. Bewley, 57 Tenn. 642, 1873 Tenn. LEXIS 280 (1873); Smith v. Peace, 69 Tenn. 586, 1878 Tenn. LEXIS 142 (1878).

10. —Rescission.

A written contract for the sale of land and the title bond for the conveyance thereof may be rescinded by the parties, either by an unregistered writing or by parol, binding on the vendee and his creditors, if done in good faith; and such rescission, if clearly established, can be set up in chancery to defeat an application for specific performance. Walker v. Wheatly, 21 Tenn. 119, 1840 Tenn. LEXIS 43 (1840); England v. Jackson, 22 Tenn. 584, 1842 Tenn. LEXIS 153 (1842); Fleming v. Martin, 39 Tenn. 43, 1858 Tenn. LEXIS 249 (Tenn. Dec. 1858); Page v. Meath, 3 Shan. 717 (1876); Chadwell v. Winston, 3 Cooper's Tenn. Ch. 110 (1876).

11. Bid at Court Sale — Assignment.

The purchaser of land at a sheriff's sale may, before he takes the sheriff's deed, make an assignment of his equitable interest by an informal writing, without registration, so as to entitle the assignee to demand a conveyance of the legal title from the sheriff; and the sheriff may make a deed to such assignee, by reciting the assignment, which cannot be questioned by third parties. Trotter v. Nelson, 31 Tenn. 7, 1851 Tenn. LEXIS 2 (1851); Anderson v. Lessee of Clark's Heirs, 32 Tenn. 156, 1852 Tenn. LEXIS 39 (1852).

A purchaser at a court sale, without a bond for title, may transfer such interest as he acquired, and no registration of such transfer is required. Kelly v. Thompson, 49 Tenn. 278, 1871 Tenn. LEXIS 5 (1871).

12. Receipt for Redemption Money — Assignment.

A transfer of an attorney's receipt for money to redeem his client's land, which is paid into court for that purpose, with notice to the party to be affected, is valid, without registration, and vests in the assignee the right to the money or land, if the redemption is effected. Withers v. Pemberton, 43 Tenn. 56, 1866 Tenn. LEXIS 15 (1866).

13. Contracts to Convey Personalty.

A contract of sale of personalty, where the possession remains in the vendor, must be reduced to writing and registered, or it will be void as to creditors or purchasers without notice. Tatum v. Jameson & Johnson, 21 Tenn. 298, 1841 Tenn. LEXIS 2 (1841); Gupton v. McCawley, 22 Tenn. 468, 1842 Tenn. LEXIS 128 (1842); Farnsworth v. Lemons, 30 Tenn. 140, 1850 Tenn. LEXIS 77 (1850).

A sale of personalty, with delivery to the purchaser, is valid without the reduction of the contract to writing, and, if it be reduced to writing, it need not be registered, for registration of such contract is not required by law, and could neither add to nor detract from the validity of the contract. The writing is merely the best evidence of the contract. Tatum v. Jameson & Johnson, 21 Tenn. 298, 1841 Tenn. LEXIS 2 (1841); Buson v. Dougherty, 30 Tenn. 50, 1850 Tenn. LEXIS 50 (1850); Williams v. Elkins, 48 Tenn. 88, 1870 Tenn. LEXIS 19 (1870).

An agreement for the conveyance of a crop to be raised and gathered is such an agreement for the conveyance of personal estate that it would, without registration, be void as to creditors or subsequent purchasers for value. Jones v. Chamberlin, 52 Tenn. 210, 1871 Tenn. LEXIS 252 (1871).

A written agreement to sell the growing timber on land at so much per cord, to be paid for as fast as used, is a contract for the sale of personal property, the title to which does not pass until it shall be used or received by the purchaser; and, therefore, such contract is a proper instrument for registration; and as it concerns an interest in land, its registration is notice to the world, and a purchaser of such land takes it subject to such prior registered contract. N. Y. & E. T. Iron Co. v. Greene County Iron Co., 58 Tenn. 434, 1872 Tenn. LEXIS 282 (1872); Childers v. Wm. H. Coleman Co., 122 Tenn. 109, 118 S.W. 1018, 1909 Tenn. LEXIS 6 (1909).

A sale or gift of personalty, with actual delivery to the purchaser or donee, need not be registered under state law in order to be valid against a judicial lien creditor. In re Crabtree, 39 B.R. 713, 1984 Bankr. LEXIS 6065 (Bankr. E.D. Tenn. 1984).

Where purchaser of an automobile had the bill of sale made in his sister's name but did not register the bill of sale, the title passed directly to the sister and was never in the purchaser and the only person who could take advantage of the failure to register the bill of sale would be a creditor or bona fide purchaser of the seller. Marlin v. Merrill, 25 Tenn. App. 328, 156 S.W.2d 814, 1941 Tenn. App. LEXIS 113 (Tenn. Ct. App. 1941).

14. Powers of Attorney.

Power of attorney must be registered to constitute notice to third parties, but is good as between the immediate parties without registration. King v. Richardson, 7 Tenn. App. 535, — S.W.2d —, 1928 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1928).

15. —Revocation.

The revocation of a power of attorney must be registered, and such revocation shall only take effect from the time it is registered, except as against persons who have notice of the revocation after its execution and before its registration. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872).

16. Conveyances of Lands and Estates Therein.

All deeds by whomsoever, including those by husbands to wives, may be registered. Cox v. Keathley, 99 Tenn. 522, 42 S.W. 437, 1897 Tenn. LEXIS 62 (1897).

Ancient deed acknowledged in proper form was entitled to registration. Butterfeild v. Miller, 195 F. 200, 1912 U.S. App. LEXIS 1362 (6th Cir. Tenn. 1912).

17. —Deed Granting Right of Way.

A deed granting a private right of way over the grantor's land is within the registration laws, and, without registration, is void as against a bona fide purchaser of the land from the grantor, without notice of such unregistered deed. Worley v. State, 75 Tenn. 382, 1881 Tenn. LEXIS 130 (1881).

18. Transfer of Corporate Stock.

The registration of the mortgage transfer of a subscriber's interest in the stock of a corporation, before the issuance and delivery of certificates to him, without giving actual notice thereof to the corporation, is not effective as against a subsequent attachment. Cates v. Baxter, 97 Tenn. 443, 37 S.W. 219, 1896 Tenn. LEXIS 164 (1896); McClung v. Colwell, 107 Tenn. 592, 64 S.W. 890, 1901 Tenn. LEXIS 115, 89 Am. St. Rep. 961 (1901).

19. Assignment of Choses in Action.

The assignment of choses in action, whether the assignment is absolute or as security for debt, is not within the registration laws, and the registration of the assignment will not operate as constructive notice. Allen v. Bain, 39 Tenn. 100, 1858 Tenn. LEXIS 258 (Tenn. Dec. 1858); L. Mayer & Co. v. Pulliam, 39 Tenn. 346, 1859 Tenn. LEXIS 222 (Tenn. Apr. 1859); Kelly v. Thompson, 49 Tenn. 278, 1871 Tenn. LEXIS 5 (1871); Hobson v. Stevenson, 1 Cooper's Tenn. Ch. 203 (1873); Dews v. Olwill, 62 Tenn. 432, 1874 Tenn. LEXIS 76 (1874); Duke v. Hall, 68 Tenn. 282, 1878 Tenn. LEXIS 8 (1878), overruled in part, Lancaster v. State, 91 Tenn. 267, 18 S.W. 777, 1891 Tenn. LEXIS 99 (1891), overruled, Roach v. Woodall, 91 Tenn. 206, 18 S.W. 407, 1891 Tenn. LEXIS 95, 30 Am. St. Rep. 883 (1891); Miller, Stewart & Co. v. O'Bannon, 72 Tenn. 398, 1880 Tenn. LEXIS 33 (1880); Penniman & Bro. v. Smith, 73 Tenn. 130, 1880 Tenn. LEXIS 98 (1880); Cates v. Baxter, 97 Tenn. 443, 37 S.W. 219, 1896 Tenn. LEXIS 164 (1896).

Though the registry acts of this state do not embrace legacies, assignment of legacy in another state, domicile of assignor, in payment of debt, in which state registration was necessary, was void as against assignor's creditors where not registered in that state, though registered here, where the executors and the fund were, before levy of attachment by the creditor. Allen v. Bain, 39 Tenn. 100, 1858 Tenn. LEXIS 258 (Tenn. Dec. 1858).

20. Copies of Deeds Registered in Other Counties.

A certified copy of a registered deed, registered in a county in which the land does not lie, cannot be properly registered in the county where the land lies. Rogers v. Campbell, 25 Tenn. 340, 1845 Tenn. LEXIS 102 (1845).

21. Deeds of Gifts.

The gift of a chattel by deed duly executed and delivered is valid at the common law, though there be no actual delivery of the thing given, and the same is valid under our laws as between the parties, but the deed must be registered, in order to be effective as against creditors and bona fide purchasers without notice, where there is no actual delivery of the chattel. McEwen v. Troost, 33 Tenn. 186, 1853 Tenn. LEXIS 28 (1853); Davis v. Garrett, 91 Tenn. 147, 18 S.W. 113, 1891 Tenn. LEXIS 87 (1891); Scott v. Union & Planters' Bank & Trust Co., 123 Tenn. 258, 130 S.W. 757, 1910 Tenn. LEXIS 3 (1910), questioned, Bowlen v. Baker, 147 Tenn. 36, 245 S.W. 416, 1922 Tenn. LEXIS 19 (1922).

Where a deed of gift of conveyance of land was made and acknowledged for registration, and deposited with a third person to be registered after the grantor's death, who retained possession of the land, and afterwards made a deed of gift to another party for a part of the same land, acknowledged for registration, and actually delivered to the grantee, together with the possession of the land conveyed, the second deed will take priority and precedence over the first deed of gift, because of the possession under it, although not registered until after the first deed was registered. Davis v. Cross, 82 Tenn. 637, 1885 Tenn. LEXIS 5, 52 Am. Rep. 177 (1885). See also Tanksley v. Tanksley, 145 Tenn. 468, 239 S.W. 766, 1921 Tenn. LEXIS 88 (1921).

22. Mortgages and Deeds of Trust.

A mortgage with power of sale conferred upon the mortgagee or a trustee is still in name or character a mortgage, for a deed of trust is but a mortgage with power of sale. Bennett v. Union Bank, 24 Tenn. 612, 1845 Tenn. LEXIS 146 (1845); Gimell, Simicker, Storms & Co. v. Adams, 30 Tenn. 283, 1850 Tenn. LEXIS 113 (1850); Myers v. James, 70 Tenn. 159, 1879 Tenn. LEXIS 149 (1879).

Mortgages and deeds of trust stand on the same footing, and are substantially the same in their nature under our system. Kirkpatrick v. Ward, 73 Tenn. 434, 1880 Tenn. LEXIS 157 (1880).

“Owner's Consent to Pledge of Collateral” was null and void as to a new lender because it lacked actual notice of the agreement; the new lender did not have inquiry notice because nothing in a Georgia state-chartered bank's deed of trust indicated or suggested that further inquiry was necessary, and there was no proof that the bank ever referenced the Owner's Consent in any of its communications with the mortgagor and his brother prior to the closing of the new loan. Vinings Bank v. Homeland Cmty. Bank, — S.W.3d —, 2019 Tenn. App. LEXIS 327 (Tenn. Ct. App. June 28, 2019).

23. —Mortgageable Interests.

The owner of a growing crop has such an interest in it that he can sell or convey by mortgage or deed of trust. Butler v. Hill, 60 Tenn. 375, 1872 Tenn. LEXIS 515 (1873); Williamson v. Steele, 71 Tenn. 527, 1879 Tenn. LEXIS 111, 31 Am. Rep. 652 (1879).

A crop to be planted is the subject of a valid mortgage. Watkins v. Wyatt, 68 Tenn. 250, 1877 Tenn. LEXIS 32 (1877).

24. —Registration — Necessity Against Creditors.

An instrument under which a debtor in terms “sells, transfers, and delivers” a chattel to his creditor to secure a debt, and authorizes a sale thereof by the creditor after a given time to pay such debt, unless paid by the debtor beforehand, is in legal effect a mortgage, and, without registration, it is void as against other creditors. Barfield v. Cole, 36 Tenn. 465, 1857 Tenn. LEXIS 36 (1857).

Personalty conveyed by unregistered mortgage, where the possession remains with the mortgagor, is subject to levy under an execution against him. McCoy v. Dail, 65 Tenn. 137, 1873 Tenn. LEXIS 321 (1873).

Mortgages and deeds of trust must be properly executed and registered, or noted for registration, to be effectual against creditors, because creditors are not affected by actual knowledge or notice of unregistered instruments. Lookout Bank v. Noe, 86 Tenn. 21, 5 S.W. 433, 1887 Tenn. LEXIS 19 (1887).

A deed is effective between the parties thereto without acknowledgment or registration, but not effective as to other parties without notice. West v. United Am. Bank, 23 B.R. 48, 1982 Bankr. LEXIS 3505 (Bankr. E.D. Tenn. 1982).

The authority of a bankruptcy trustee, as a hypothetical judicial lien creditor, to take advantage of the strong arm clause, 11 U.S.C. § 544(a), prevailed over the holder of an unregistered deed of trust. Walker v. Elman (In re Fowler), 201 B.R. 771, 1996 Bankr. LEXIS 1293 (Bankr. E.D. Tenn. 1996).

Where chapter 7 debtors'  acknowledgement on a deed of trust recorded in 2004 was omitted, the trustee could not avoid the creditor's lien pursuant to 11 U.S.C. § 544(a) because T.C.A. § 66-24-101(f), which affected instruments on record as of a certain date, applied retroactively to cure the defect. Mostoller v. Equity One, Inc. (In re Hickman),  367 B.R. 620, 2007 Bankr. LEXIS 1587 (Bankr. E.D. Tenn. May 2, 2007).

25. —Priority Upon Registration.

A mortgage or deed of trust on a growing crop, and the registration thereof, is notice to the world, and will enable the conveyee to sue and recover such crop from a bona fide purchaser thereof, after it has been gathered and made marketable, for a valuable consideration, and without knowledge, in fact, of the conveyance. Butler v. Hill, 60 Tenn. 375, 1872 Tenn. LEXIS 515 (1873); Williamson v. Steele, 71 Tenn. 527, 1879 Tenn. LEXIS 111, 31 Am. Rep. 652 (1879).

Notice to the trustee in a deed of trust to secure a debt that there exists a prior unrecorded mortgage or deed of trust is notice to the principal postponing his lien. Schoolfield v. Cogdell, 120 Tenn. 618, 113 S.W. 375, 1908 Tenn. LEXIS 48 (1908).

Where college loaned property owner a sum of money for construction of building thereon and to secure itself obtained a trust deed which registered the fact that the college entered into a separate contract with property owner for construction of building and the fact that it also secured an indemnity bond to protect itself did not deprive the college of its priority over subsequent mechanics' liens. Kingsport Brick Corp. v. Bostwick, 145 Tenn. 19, 235 S.W. 70, 1921 Tenn. LEXIS 69 (1921).

An attaching creditor who records a notice of lis pendens has priority over a bona fide conveyee whose deed is not recorded until after the registration of the lis pendens notice. W. & O. Constr. Co. v. IVS Corp., 688 S.W.2d 67, 1984 Tenn. App. LEXIS 3187 (Tenn. Ct. App. 1984).

26. —Absolute Deed — Operation as Mortgage.

A deed absolute on its face, and registered, but intended as a mortgage to secure a small existing indebtedness to the conveyee, and also to stand as security, by verbal agreement, not stated in the deed, for future advances to be made and indebtedness to be incurred by the conveyee in behalf of or on account of the conveyor, is, in the absence of actual fraud, a valid security to the extent of the debt existing at the date of its execution, but fraudulent in law and void as to judgment creditors or creditors seeking by bill to enforce the payment of debts due from the conveyor, whatever may have been its bona fides, as a matter of fact, as to the debt not in existence, or, by verbal agreement, not set forth in the registered paper, and to be incurred in the future. Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871).

27. —Equitable Mortgages.

In order for an instrument to be operative and effective as a mortgage on land, or as creating a lien on land, it must convey or purport to convey the land, or to create a lien on it. A mere receipt or note for money, stipulating that it shall be a lien on certain land, sufficiently described to identify it, creates an equitable lien or mortgage on the land. Langley v. Vaughn, 57 Tenn. 553, 1873 Tenn. LEXIS 259 (1873); Osborne v. Royer, 69 Tenn. 217, 1878 Tenn. LEXIS 73 (1878); Mynatt v. Magill, 71 Tenn. 72, 1879 Tenn. LEXIS 36 (1879); Hill v. McLean, 78 Tenn. 107, 1882 Tenn. LEXIS 151 (1882).

An agreement, embodied in a note for land, which makes the amount of the note a lien on the land, with a sufficient description to identify the land, constitutes an equitable mortgage and such an equitable lien between the parties as will pass to the purchaser of the note, without registration, as against the maker. Osborne v. Royer, 69 Tenn. 217, 1878 Tenn. LEXIS 73 (1878).

28. —Registration After Maker's Death.

A deed of trust conveying land to secure debts and registered after the maker's death relates back to its date, and prevails against his general creditors. Gwynne v. Estes, 82 Tenn. 662, 1885 Tenn. LEXIS 9 (1885).

29. —Failure to Register Before Suggestion of Insolvency of Estate.

A mortgagee whose deed has not been registered, or has been registered upon a defective probate, has no priority over other creditors of the estate of a decedent, where the insolvency of the estate has been suggested and a bill filed in chancery to settle it as an insolvent estate, before any step has been taken by the mortgagee to foreclose or enforce the mortgage, for the suggestion of insolvency of a decedent's estate operates as an injunction against the bringing of suits, and precludes any creditor from thereafter acquiring or perfecting a specific lien. Henderson v. McGhee, 53 Tenn. 55, 1871 Tenn. LEXIS 317 (1871); Langley v. Vaughn, 57 Tenn. 553, 1873 Tenn. LEXIS 259 (1873).

30. Liens.

Where deed specified portion of consideration as notes to be secured by trust deed on land conveyed, such covenant, being binding on grantee accepting benefits of deed, held to constitute contract creating equitable lien capable of independent registration. Hunt v. Curry, 153 Tenn. 11, 282 S.W. 201, 1925 Tenn. LEXIS 2 (1925).

31. —Tax Liens.

The noting of a federal tax lien for registration without a proper indexing is not necessarily notice to the world of the filing of the notice of the federal tax lien. In re Robby's Pancake House, Inc., 24 B.R. 989, 1982 Bankr. LEXIS 3000 (Bankr. E.D. Tenn. 1982).

32. —Unregistered Lien — Extent of Validity.

An informal unregistered lien contract, sufficiently describing the property, is good between the parties; and after the death of the maker whose estate is insolvent, such lien perfected by registration before the suggestion of insolvency, and all other liens acquired, perfected, and fixed upon a decedent's property previous to his death or before the suggestion of the insolvency of his estate, take precedence over the general creditors of such estate. Winton v. Eldridge, 40 Tenn. 361, 1859 Tenn. LEXIS 99 (1859); Kinsey v. McDearmon, 45 Tenn. 392, 1868 Tenn. LEXIS 20 (1868); Watson v. Watson, 60 Tenn. 387, 1872 Tenn. LEXIS 518 (1873); Boyd v. Roberts, 57 Tenn. 474, 1873 Tenn. LEXIS 243 (1873); McGuffey v. Johnson, 77 Tenn. 555, 1882 Tenn. LEXIS 100 (1882); Gwynne v. Estes, 82 Tenn. 662, 1885 Tenn. LEXIS 9 (1885); Bacchus v. Peters, 85 Tenn. 678, 4 S.W. 833, 1887 Tenn. LEXIS 10 (1887); Lookout Bank v. Susong, 90 Tenn. 590, 18 S.W. 389, 1891 Tenn. LEXIS 48 (1891).

A lien may be created on personalty and realty exempt from execution, in an unregistered note, as between the parties. Mynatt v. Magill, 71 Tenn. 72, 1879 Tenn. LEXIS 36 (1879); Hill v. McLean, 78 Tenn. 107, 1882 Tenn. LEXIS 151 (1882).

33. Assignments or Conveyances for Benefit of Creditors.

A mortgage or trust assignment conveying land for the benefit of preexisting creditors, if first registered, will have preference over any other instrument of earlier date not registered, unless the persons claiming under such registered instruments have full notice of the unregistered instruments. J. & A. Simpkinson & Co. v. McGee, 72 Tenn. 432, 1880 Tenn. LEXIS 39 (1880); Nailer v. Young, 75 Tenn. 735, 1881 Tenn. LEXIS 181 (1881); Hill v. McLean, 78 Tenn. 107, 1882 Tenn. LEXIS 151 (1882); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

Registration of a general assignment for benefit of creditors comes within the statute. Lookout Bank v. Noe, 86 Tenn. 21, 5 S.W. 433, 1887 Tenn. LEXIS 19 (1887).

34. Pledges.

A contract of pledge is not required to be recorded. Darragh v. Elliotte, 215 F. 340, 1914 U.S. App. LEXIS 1247 (6th Cir. 1914).

35. Plats and Certificates of Survey.

An entrant's assignment of the plat and certificate of survey, by endorsement thereon, is effective as between the parties thereto, whether registered or not, and whether probated or acknowledged for registration or not. King v. Coleman, 98 Tenn. 561, 40 S.W. 1082, 1897 Tenn. LEXIS 145 (1897).

36. Leases.

Where a lease for more than three years is not registered, but a junior lease is, it may defeat the former; but if neither be registered they retain their priority. Langos v. Jacobs, 7 Tenn. App. 206, 1928 Tenn. App. LEXIS 30 (1928).

37. Assignment of Future Rents.

An assignment of future rents to accrue within a period of three years from its date is valid without registration, though rent is payable under a lease for more than three years that is registered. Schmid v. Baum's Home of Flowers, Inc., 162 Tenn. 439, 37 S.W.2d 105, 1930 Tenn. LEXIS 108, 75 A.L.R. 261 (1931).

38. Judgments and Decrees.

39. —Necessity for Registration.

Certified copy of decree divesting and vesting title to land must be registered in the office of the county register, in order that it may be effectual as against creditors of the party whose title has been divested and vested. Willis v. Rust, 4 Tenn. Civ. App. (4 Higgins) 278 (1913).

Where surety on a labor and material payment bond advanced money necessary to satisfy liens, it was subrogated to rights of contractor in judgment to recover such funds and such right was superior to security interest of another in the contractor's property obtained after the execution of the bond even though no assignment of the judgment was recorded. Third Nat'l Bank v. Highlands Ins. Co., 603 S.W.2d 730, 1980 Tenn. LEXIS 488 (Tenn. 1980).

40. —Extent of Authority to Register.

The registration of certified copies of decrees is authorized only where they divest and vest title. Brown v. Bigley, 3 Cooper's Tenn. Ch. 618 (1878).

Subdivision (a)(19) authorizes the registration of the memoranda of judgments or decrees only when the object is to acquire a lien on equitable estates. Brown v. Bigley, 3 Cooper's Tenn. Ch. 618 (1878).

41. —Priority upon Registration.

An unregistered deed of trust is inoperative as against the lien of a registered judgment. Birdwell v. Cain, 41 Tenn. 301, 1860 Tenn. LEXIS 67 (1860).

The lien of a registered judgment has priority over an unrecorded contract. Buchanan v. Kimes, 61 Tenn. 275, 1872 Tenn. LEXIS 370 (1872).

42. —Registered Decrees as Evidence.

Certified copies of decrees divesting and vesting title, when duly registered, may be read as evidence, without producing the bill, answer, or any other part of the record upon which they were made, if they embody the facts necessary to show the jurisdiction of the court. Lowry v. McDurmott, 13 Tenn. 225 (1833); Whitmore v. Johnson's Heirs, 29 Tenn. 610, 1850 Tenn. LEXIS 41 (1850); Verhine v. Ragsdale, 96 Tenn. 532, 35 S.W. 556, 1896 Tenn. LEXIS 3 (1896); Grier v. Canada, 119 Tenn. 17, 107 S.W. 970, 1907 Tenn. LEXIS 2 (1907).

A registered certified copy of a decree directing the sale of lands and the reinvestment of the proceeds in other lands, setting out all the essential facts upon its face, is admissible in support and explanation of the deed taken in pursuance of its directions, without producing a certified transcript of any other portion of the record. Verhine v. Ragsdale, 96 Tenn. 532, 35 S.W. 556, 1896 Tenn. LEXIS 3 (1896).

43. Trust Agreements.

A private trust agreement is not one of the instruments that may be registered under T.C.A. § 66-24-101, and because of that fact it is not void as to creditors because of the effect of T.C.A. § 66-26-103. Green v. Hooton, 624 S.W.2d 898, 1981 Tenn. App. LEXIS 555 (Tenn. Ct. App. 1981).

44. Divorce Decree.

A divorce decree giving wife a right of occupancy is eligible for registration. Lancaster v. Hurst, 27 B.R. 740, 1983 Bankr. LEXIS 6818 (Bankr. E.D. Tenn. 1983).

Collateral References.

Acknowledgment, record of instrument without acknowledgment or insufficiently acknowledged, as notice. 59 A.L.R.2d 1299.

Actual notice of unrecorded instrument to purchaser from one without notice, effect of. 63 A.L.R. 1367.

Adverse character of grantee's possession, record of deed to cotenant as notice to other cotenants of. 82 A.L.R.2d 5.

Adverse possession by one claiming under or through deed by cotenant as affected by failure to record deed. 32 A.L.R.2d 1214.

Agreement between real estate owners restricting use of property as within contemplation of recording laws. 4 A.L.R.2d 1419.

Alteration in deed or mortgage with consent of parties thereto after acknowledgment or attestation as affecting notice from record thereof. 67 A.L.R. 366.

Amount of debt, omission of, in record of mortgage, as affecting its operation as notice to third person. 145 A.L.R. 375.

Assignment of future rents as within recording laws. 75 A.L.R. 270.

Assignments of mortgages on real estate, recording laws as applied to. 89 A.L.R. 171, 104 A.L.R. 1301.

Attachment, failure to comply with statutory requirements as to filing return or inventory. 93 A.L.R. 748.

Bankruptcy as invalidating, as against all creditors, instrument executed by bankrupt which under state law is valid as to creditors becoming such after record but invalid as to creditors prior to record. 76 A.L.R. 1200.

Cloud on title, title lost by failure to record as. 78 A.L.R. 116.

Construction and application of regulations as to filing on recording of subdivision maps or plats. 11 A.L.R.2d 524.

Constructive notice, failure properly to index conveyance or mortgage of realty as affecting. 63 A.L.R. 1057.

Covenant or easement affecting another parcel owned by grantor, record of deed or contract for conveyance of one parcel with, as constructive notice to subsequent purchaser on encumbrancer of second parcel. 16 A.L.R. 1013.

Coverage of “nonrecording” or “nonfiling” insurance against loss from failure to record chattel mortgage, conditional sale, or other security instrument. 51 A.L.R.2d 325.

Criminal libel by entry in record. 19 A.L.R. 1499.

Deposition, attaching to, copy of public records. 59 A.L.R. 535.

Executor of administrator of insolvent estate, right of, to take advantage of failure to record or file or refile conveyance or mortgage executed by his decedent. 91 A.L.R. 299.

Executory contracts for the sale of real estate, record of. 26 A.L.R. 1546.

Executory land contract not recorded, rights of vendee under, as against subsequent deed or mortgage by vendor. 87 A.L.R. 1515.

Extension of mortgage or deed of trust by subsequent agreement to cover additional indebtedness, necessity of recording. 76 A.L.R. 589.

Fixtures, right of seller of, retaining title thereto, or a lien thereon, as against prior mortgagee of realty as affected by record of the mortgage. 13 A.L.R. 470, 73 A.L.R. 748, 88 A.L.R. 1318, 111 A.L.R. 362, 141 A.L.R. 1283.

Fraudulent conveyance, registration as notice to creditor of, which will start running of limitation. 100 A.L.R.2d 1094.

Grantee or mortgagee by quitclaim deed or mortgage in uniform form as within protection of recording laws. 59 A.L.R. 632.

Improvements, right to compensation for, as affected by constructive notice by record of true title or interest. 68 A.L.R. 288,   .

Life tenant's deed purporting to convey fee, recording of, as rendering vendee's possession adverse to remainderman during life estate. 112 A.L.R. 1047.

Marketability of title as affected by defect in record, or incomplete record, of deed. 57 A.L.R. 1472, 81 A.L.R.2d 1020.

Necessity that mortgage covering oil and gas lease be recorded as real estate mortgage, and/or filed or recorded as chattel mortgage. 34 A.L.R.2d 902.

Neglect or fault of recording or filing officer as affecting consequences of failure properly to record or file instrument affecting property. 70 A.L.R. 595.

Nonpayment of all or part of consideration at time of receiving notice, actual or constructive, of a prior instrument, as affecting right of one otherwise protected by recording law against prior unrecorded deed or mortgage. 109 A.L.R. 163.

Optional advances under mortgage and lien intervening between giving of the mortgage and making the advance, record notice as affecting priority between. 138 A.L.R. 566.

Partnership, noncompliance with statute requiring filing of certificate of, as affecting right to maintain action arising out of tort. 2 A.L.R. 119.

Personal covenant in deed in recorded deed as enforceable against grantee's lessee or successor. 23 A.L.R.2d 520.

Power of attorney under which deed or mortgage is executed, as instrument entitled to record. 114 A.L.R. 660.

Powers and duty of recorder to correct errors in public records of transfers or encumbrances of property. 156 A.L.R. 1321.

Priority as between judgment lien and unrecorded mortgage. 4 A.L.R. 434.

Priority where senior instrument is recorded after execution but before recording of junior instrument. 32 A.L.R. 344.

Purchase money mortgage as within provision of statute defeating or postponing lien of unrecorded or unfiled mortgage. 137 A.L.R. 571, 168 A.L.R. 1164.

Record of instrument which comprises or includes an interest or right that is not a proper subject of record. 3 A.L.R.2d 577.

Recordation provisions of Civil Aeronautics Act as applicable to aircraft operated wholly within state. 9 A.L.R.2d 485.

Recorded real property instrument as changing third party with constructive notice of ex trinsic instrument referred to therein. 89 A.L.R.3d 901.

Recovery on ground of duress, of payment made to procure recording of instrument. 64 A.L.R. 117, 84 A.L.R. 294.

Reformation of instrument as against third persons, record of incorrect instrument as notice of intended contents. 44 A.L.R. 118, 79 A.L.R.2d 1180.

Reinstatement and restoration of mortgages released or discharged without authorization, as against subsequent purchasers, lienholders, judgment creditors and the like, without notice. 35 A.L.R.2d 948.

Relative rights to real property as between purchasers from or through decedent's heirs and devisees under will subsequently sought to be established. 22 A.L.R.2d 1107.

Restrictions in lessor's record title as to use of premises as affecting rights between lessor and lessee. 165 A.L.R. 1178.

Restrictive covenant omitted from deed imposed by general plan of subdivision. 4 A.L.R.2d 1364.

Right of one claiming through heir, devisee, or personal representative to protection against unrecorded conveyance or mortgage by ancestor or testatory. 65 A.L.R. 360.

Rights as between purchaser of timber under unrecorded instrument and subsequent vendee of land. 18 A.L.R.2d 1150.

Rule which makes priority of title depend upon priority of record as applied to record of later instrument in second chain of title which antedates record of original instrument in first chain, record of which, however, antedated record of original instrument in second chain. 133 A.L.R. 886.

Statutes precluding enforcement of mortgage unless holder complies with conditions respecting recording of amount remaining unpaid. 174 A.L.R. 652.

Tax deed, necessity of recording, to protect title as against interest derived from former owner. 65 A.L.R. 1015.

Usury by requiring borrower to pay expenses of recording papers connected with loan. 21 A.L.R. 797, 53 A.L.R. 743, 63 A.L.R. 823, 105 A.L.R. 795, 52 A.L.R.2d 703.

Validity and effect, as to previously recorded instrument, of statute which places or changes time limit on effectiveness of record of mortgages or other instruments. 133 A.L.R. 1325.

Waiver of right to widow's allowance by antenuptial agreement. 30 A.L.R.3d 858.

Who may take advantage of failure to review real estate mortgage as provided by statute. 97 A.L.R. 739.

Will or deed, effect of recording instrument on determination of its character as. 11 A.L.R. 45, 31 A.L.R.2d 532.

Withdrawal of paper after delivery to proper officer as affecting question whether it is filed. 37 A.L.R. 670.

66-24-102. Certificates registered.

With the deed or instrument shall be registered all certificates of probate or acknowledgment, with the certificates for the authentication thereof, any commission to take acknowledgment or examination, and any correction made of the certificates as provided in this chapter.

Code 1858, § 2031 (deriv. Acts 1807, ch. 85, § 3; 1831, ch. 90, § 5); Shan., § 3698; Code 1932, § 7622; T.C.A. (orig. ed.), § 64-2402.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Recording Acts, § 8.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Improper Recordation of Proper Acknowledgment.

When a deed has in fact been properly acknowledged, and has attached the certificate of the officer in lawful form, it is then entitled to registration and a defective recording of the certificate does not render deed null and void as to existing or subsequent creditors of, or bona fide purchasers from, the grantor without notice. Wilkins v. Reed, 156 Tenn. 321, 300 S.W. 588, 1927 Tenn. LEXIS 121 (1927).

66-24-103. Conveyances of land.

If the instrument be a conveyance, or for the conveyance, of land, it shall be registered in the county where the land lies, unless it lies partly in two (2) or more counties, and then it may be registered in either; and where it contains several tracts of land, lying in different counties, it shall be registered in each of the counties where any of the tracts lie.

Code 1858, § 2032 (deriv. Acts 1831, ch. 90, § 5); Shan., § 3705; Code 1932, § 7625; T.C.A. (orig. ed.), § 64-2403.

Cross-References. Recordation tax, § 67-4-409.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 101.

Tennessee Jurisprudence, 21 Tenn. Juris., Recording Acts, § 7.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Policy as to Place of Recordation.

It is the policy that liens and charges on land shall be evidenced by a record (unless otherwise specially provided by statute) at the locality where it would be most natural they would be searched for, and where the least inconvenience will follow to parties seeking such information. State v. Miller, 79 Tenn. 620, 1883 Tenn. LEXIS 116 (1883); Cole v. Warner, 93 Tenn. 155, 23 S.W. 110, 1893 Tenn. LEXIS 40 (1893).

2. One Tract Lying in Two Counties.

Deed covering tract lying partly in two counties was registered properly in either. Perry v. Clift, 54 S.W. 121, 1899 Tenn. Ch. App. LEXIS 115 (Tenn. Ch. App. 1899).

A deed properly registered in only one county is admissible to show title in action of ejectment. Perry v. Clift, 54 S.W. 121, 1899 Tenn. Ch. App. LEXIS 115 (Tenn. Ch. App. 1899).

3. Two or More Tracts in Different Counties.

If the instrument embraces several tracts lying in different counties, it must be registered in each. If the instrument is not registered as thus required, it will be a nullity, and will not give notice. State v. Miller, 79 Tenn. 620, 1883 Tenn. LEXIS 116 (1883); Cole v. Warner, 93 Tenn. 155, 23 S.W. 110, 1893 Tenn. LEXIS 40 (1893).

4. Twenty Years Registration in Wrong County — Effect on Defective Probate.

Twenty years registration of a deed in a county other than that in which the land lies does not, under § 66-26-106, operate to cure a defective certificate of probate or acknowledgment. Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890).

5. Chattel Mortgages on Crops.

This section did not apply to registration of chattel mortgage on crops to be grown on land lying in two counties where the mortgage was expressly limited to that part of the crops grown on only that part of the land lying in one of the counties. Dyersburg Production Credit Asso. v. McGuire, 40 Tenn. App. 99, 289 S.W.2d 540, 1956 Tenn. App. LEXIS 131 (Tenn. Ct. App. 1956).

6. Effect of Unrecorded Contracts.

A debtor's unrecorded contract to transfer land is not effective against a judgment lien creditor of the debtor, even if the creditor knew of the contract before obtaining its judgment lien. In re Don Williams Constr. Co., 143 B.R. 865, 1992 Bankr. LEXIS 1261 (Bankr. E.D. Tenn. 1992).

7. Bankruptcy.

A Chapter 7 trustee may utilize the bankruptcy code to avoid a trust deed improperly recorded under T.C.A. § 66-24-103. Hendon v. G.E. Capital Mtg. Servs., Inc., 266 B.R. 671, 2001 Bankr. LEXIS 1218 (Bankr. E.D. Tenn. 2001).

8. Bona Fide Purchaser.

There was no indication that an owner had any knowledge of the existence of an assignment that was not recorded, T.C.A. § 66-24-103, and he entered into his contract with the other owners and within a month began cutting and removing timber. The record indicated that it took the owner three or four months to complete the timber harvest and his actions in removing the timber were open and obvious, and were not done by way of subterfuge; moreover, the owner paid $ 20,000 for the timber to the other owners and based on that, the owner was a bona fide purchaser for value and, as such, was not liable to the purchaser. Remote Woodyards, LLC v. Estate of Neisler, 340 S.W.3d 411, 2009 Tenn. App. LEXIS 558 (Tenn. Ct. App. Aug. 25, 2009), appeal denied, Remote Woodyards, LLC v. Estate of Neisler, — S.W.3d —, 2010 Tenn. LEXIS 320 (Tenn. Mar. 1, 2010).

66-24-104. Conveyances of personal property.

All deeds, bills of sale, agreements, and other instruments for the conveyance or mortgage of personal property shall be registered in the county where the vendor or person executing the same resides, and, in case of nonresidence of the vendor or the person executing, where the property is.

Code 1858, § 2033 (deriv. Acts 1805, ch. 16, § 2; 1831, ch. 90, § 5); Shan., § 3706; Code 1932, § 7626; T.C.A. (orig. ed.), § 64-2404.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Recording Acts, § 7.

NOTES TO DECISIONS

1. Relation to Other Sections.

The provisions in § 66-24-106 have nothing to do with the provisions of this section. Hunter v. Foster, 23 Tenn. 211, 1843 Tenn. LEXIS 55 (1843); Parker v. Hall, 39 Tenn. 641, 1859 Tenn. LEXIS 294 (Tenn. Apr. 1859).

2. Necessity of Registration.

A chattel mortgage given by a bankrupt, who is a resident of Tennessee, is invalid as against his trustee in bankruptcy, unless recorded in the county of the bankrupt's residence. In re Nuckols, 201 F. 437, 1912 U.S. Dist. LEXIS 1041 (D. Tenn. 1912).

3. Priority of Registered Mortgage.

The lien of a registered mortgage upon personalty is superior to the common law lien of an artisan for repairs thereon. Owen v. George Cole Motor Co., 155 Tenn. 250, 292 S.W. 1, 1926 Tenn. LEXIS 43 (1927).

4. Failure to Register — Right to Question.

Where the purchaser of an automobile had the bill of sale made in his sister's name but did not register the bill of sale the title passed directly to the sister and was never in the purchaser and the only person who could take advantage of the failure to register the bill of sale would be a creditor or bona fide purchaser of the seller of the auto. Marlin v. Merrill, 25 Tenn. App. 328, 156 S.W.2d 814, 1941 Tenn. App. LEXIS 113 (Tenn. Ct. App. 1941).

5. Reregistration upon Removal Unnecessary.

The registration of a deed executed in another state or county conveying slaves and other personalty was not necessary in the county in this state to which the parties may remove with the property. Hunter v. Foster, 23 Tenn. 211, 1843 Tenn. LEXIS 55 (1843); Parker v. Hall, 39 Tenn. 641, 1859 Tenn. LEXIS 294 (Tenn. Apr. 1859).

6. Comity — Extent of Application.

The registration laws of another state to protect creditors and subsequent purchasers will not be enforced except for that purpose. Galt v. Dibrell, 18 Tenn. 146, 1836 Tenn. LEXIS 111 (1836); Douglas v. Bank of Commerce, 97 Tenn. 133, 36 S.W. 874, 1896 Tenn. LEXIS 122 (1896).

The government where the property is situated will not extend the rule of comity by permitting the law of the owner's domicile to prevail in the alienation of personal property, and in ascertaining and giving preferences and priorities, so far as to prejudice its own citizens; but it will protect their interest in preference. Allen v. Bain, 39 Tenn. 100, 1858 Tenn. LEXIS 258 (Tenn. Dec. 1858); Hadley v. Freedman's Sav. & Trust Co., 2 Cooper's Tenn. Ch. 122 (1874).

A foreign general assignment conveying personalty situated in this state is not effectual, without registration in this state, against subsequent attachments of such personalty by the assignor's creditor, for registration laws prevail over rules of comity. Douglas v. Bank of Commerce, 97 Tenn. 133, 36 S.W. 874, 1896 Tenn. LEXIS 122 (1896).

A mortgage, executed in another state and duly recorded there, upon a chattel at that time in this state and so remaining in this state, does not confer upon the mortgagee a right superior to that of an innocent purchaser of the property by purchase made in this state. Newsum v. Hoffman, 124 Tenn. 369, 137 S.W. 490, 1911 Tenn. LEXIS 51 (1911).

When a chattel mortgage is executed and duly recorded in another state, where the property then is, and where the mortgagor resides, and is valid under the laws of that state, the mortgagee, under the rule of comity, has the better right, upon subsequent removal of the property to this state, as against a levying or attaching creditor of, or an innocent purchaser from, the mortgagor in this state to which the property has been removed, although the mortgage is not recorded in this state; notwithstanding the mortgagor is permitted, under the terms of the mortgage, to retain possession until default; but, such comity should not be extended to cases wherein it appears that the mortgagee consented to such removal, or, having knowledge thereof, does not, within a reasonable time, assert his rights, so as to protect him against encumbrances put upon the property, or against purchases made in this state, after the removal has been made to it. Newsum v. Hoffman, 124 Tenn. 369, 137 S.W. 490, 1911 Tenn. LEXIS 51 (1911); J. T. Fargason Co. v. Ball, 128 Tenn. 137, 159 S.W. 221, 1913 Tenn. LEXIS 31, 50 L.R.A. (n.s.) 51 (1913); Hamblen Motor Co. v. Miller & Harle, 150 Tenn. 602, 266 S.W. 99, 1924 Tenn. LEXIS 32 (1924); Great American Indem. Co. v. Utility Contractors, Inc., 21 Tenn. App. 463, 111 S.W.2d 901, 1937 Tenn. App. LEXIS 48 (Tenn. Ct. App. 1937).

7. Crops Lying in Two Counties.

Where chattel mortgage was executed on crops to be grown on land lying in two counties but such mortgage was expressly limited by its language to crops in the county in which mortgagor resided and such mortgage was registered in county of mortgagor's residence, this section did not operate to protect the mortgagee as to crops lying in the other county. Dyersburg Production Credit Asso. v. McGuire, 40 Tenn. App. 99, 289 S.W.2d 540, 1956 Tenn. App. LEXIS 131 (Tenn. Ct. App. 1956).

66-24-105. Marriage settlements.

Deeds for the settlement of personal property, in consideration of marriage, shall be registered in the county where the grantor or bargainor resides.

Code 1858, § 2034 (deriv. Acts 1805, ch. 16, § 2); Shan., § 3707; mod. Code 1932, § 7627; T.C.A. (orig. ed.), § 64-2405.

66-24-106. Marriage contracts settling property on wife.

  1. Marriage contracts or agreements in which the wife's property, before marriage, is settled on her or a trustee for her use, shall be registered in the county where the husband resides at the time of marriage, and in every county in the state to which he may remove with the property; and if the contract or agreement be made without the limits of the state, they shall be registered in every county in the state to which the husband and wife removed with the property.
  2. In case of realty, registration shall be also in the county where it lies.

Code 1858, § 2035 (deriv. Acts 1831, ch. 90, § 5); Shan., § 3708; mod. Code 1932, § 7628; T.C.A. (orig. ed.), § 64-2406.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 3; 18 Tenn. Juris., Marriage Contracts and Settlements, § 7.

NOTES TO DECISIONS

1. Relation to Other Sections.

The provisions in this section have nothing to do with the provisions of § 66-24-104. Hunter v. Foster, 23 Tenn. 211, 1843 Tenn. LEXIS 55 (1843); Parker v. Hall, 39 Tenn. 641, 1859 Tenn. LEXIS 294 (Tenn. Apr. 1859).

2. Husband's Voluntary Conveyance.

Where the husband and father makes a voluntary deed of conveyance of personalty in another state, as a gift to his wife and children, and thereafter removes into this state, bringing the property with them, registration of such conveyance is not required by this statute to be made in this state. Hunter v. Foster, 23 Tenn. 211, 1843 Tenn. LEXIS 55 (1843).

3. Unregistered Settlement of Wife's Own Property.

These contracts of settlement of personal property upon the wife are good, as between the husband and wife, without registration; but to protect the wife's personalty, other than her choses in action, against her husband's creditors, the deeds of settlement must be registered before the rights of her husband's creditors attach. Cowan, McClung & Co. v. Mann, 71 Tenn. 229, 1879 Tenn. LEXIS 67 (1879); Bank of Columbia v. Walker, 82 Tenn. 299, 1884 Tenn. LEXIS 127 (1884); Phoenix Fire & Marine Ins. Co. v. Shoemaker, 95 Tenn. 72, 31 S.W. 270, 1895 Tenn. LEXIS 65 (1895).

66-24-107. Registration of certified copies from previous registration.

Where any deed of conveyance, or any power of attorney to convey, in which more than one (1) tract of land is conveyed or to be conveyed, lying in different counties, with the proper probates, has been registered in any county in which one (1), or more, of the tracts lies or where any such judgment or decree has been so recorded, it shall be lawful for any one interested therein, to have registered in the county or counties in which the other tract or tracts are situated, a copy of the deed of conveyance or power of attorney and certificate of probate, or judgment or decree, certified by the register of the county in which the deed of conveyance, power of attorney, judgment or decree may have been thus registered; and such registration shall be valid, and a copy thereof shall be received as evidence as if such registration had been of the original.

Acts 1875, ch. 124, § 1; 1905, ch. 112, § 1; Shan., §§ 3711, 3711a1; mod. Code 1932, § 7629; T.C.A. (orig. ed.), § 64-2407.

Textbooks. Tennessee Jurisprudence, 11 Tenn. Juris., Evidence, § 96.

66-24-108. Reregistration after destruction of records.

In all cases where the records of any register's office in any county have been, or may hereafter be, destroyed or mutilated by fire, or otherwise, the holder of any deed or instrument of which the record wherein it was originally registered has been destroyed or mutilated may have the same registered in the register's office of the county.

Acts 1895, ch. 24, § 1; Shan., § 3699; Code 1932, § 7623; T.C.A. (orig. ed.), § 64-2408.

66-24-109. Fees for reregistration or rerecording.

The register registering or recording such deeds or other instruments in writing heretofore recorded shall be entitled to demand and receive for such register's services compensation in accordance with the schedule set forth in § 8-21-1001; provided, that nothing in this section shall be construed as authorizing or requiring the payment or collection of any additional transfer or other tax as a condition of such reregistration or rerecording.

Acts 1895, ch. 24, § 2; Shan., § 3700; mod. Code 1932, § 7624; modified; T.C.A. (orig. ed.), § 64-2409; Acts 1983, ch. 475, § 1.

Cross-References. Registration fees, § 8-21-1001.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

66-24-110. Recitals on instrument required for registration.

    1. No instrument in writing affecting interests in real property, excepting instruments releasing liens on real property, shall be registered unless it contains a recital designating the deed, will, court decree or other source from which the grantor received the equitable interest.
    2. If the source of equitable interest is a deed or other instrument recorded in the register's office or a will or court decree of record in the county, the type of instrument, office, book and page number of such instrument shall be recited on the instrument offered for registration.
    3. If the source of equitable title is inheritance under the laws of intestate succession, then it shall be recited that the grantor took title by inheritance and the last recorded instrument conveying the equitable interest shall be named with the office, book and page number where such instrument is recorded.
    4. If no such preceding instrument has been recorded, the instrument shall so recite.
    5. No instrument releasing a lien on real property shall be registered unless it contains a recital designating the type of instrument, office, book and page number of the instrument which created the lien being released.
  1. The recital required by this section shall be prepared and entered on each instrument required to be registered by the preparer of such instrument; provided, however, that if the deed or other instrument from which the grantor received the equitable interest is received by the register simultaneously with the instrument upon which the recital is required, then the preparer shall leave blanks in the recital for the book and page number or other appropriate reference and the register of deeds shall enter the appropriate reference after the deed or other instrument has been recorded.

Acts 1915, ch. 25, § 1; Shan., § 3704a5; mod. Code 1932, § 8085; Acts 1981, ch. 398, §§ 1, 2; T.C.A. (orig. ed.), § 64-2410; Acts 1986, ch. 741, § 1; 1987, ch. 396, § 1; 2001, ch. 134, § 1.

Cross-References. Names and addresses required on deeds, § 66-24-114.

Parcel identification number or affidavit required on deed, § 66-24-121.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-201, 8-202.

Tennessee Jurisprudence, 21 Tenn. Juris., Recording Acts, § 7.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Effect of Noncompliance.

This section does not render trust deeds securing notes and deed of conveyance, where actually registered, invalid because references to previously registered instruments were incorrect, nor does such improper registration fail to give sufficient notice to bar subsequent judgment creditors of the grantor, in view of § 66-24-112. Phoenix Mut. Life Ins. Co. v. Kingston Bank & Trust Co., 172 Tenn. 335, 112 S.W.2d 381, 1937 Tenn. LEXIS 83 (1938).

66-24-111. [Repealed.]

Compiler's Notes. Former § 66-24-111 (Acts 1915, ch. 25, § 2; Shan., § 3704a6; mod. Code 1932, § 8086; modified; T.C.A. (orig. ed.), § 64-2411), concerning endorsement as to last previous instrument, was repealed by Acts 1986, ch. 741, § 2.

66-24-112. Validity of registration unaffected by noncompliance.

Nothing in this chapter shall be construed to prohibit the registration of instruments otherwise required by law to be registered, in the absence of a previously registered instrument respecting the property or subject matter embraced in the instrument delivered for registration; provided, that a failure of the record to show a compliance with the requirements of this chapter shall in nowise affect the validity of the registration of any registered instrument.

Acts 1915, ch. 25, § 3; Shan., § 3704a7; mod. Code 1932, § 8087; T.C.A. (orig. ed.), § 64-2412; Acts 1983, ch. 475, § 2.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Effect of Section.

A properly registered deed was sufficient to put judgment creditor on notice of such conveyance even though such deed failed to give a full and complete recital of the last registered instruments relating to the property conveyed and even though all such deeds through which the grantor took title were not listed since under this section the registration of such an instrument conveys the same notice as before the enactment of §§ 66-24-110, 66-24-111 (repealed). Phoenix Mut. Life Ins. Co. v. Kingston Bank & Trust Co., 172 Tenn. 335, 112 S.W.2d 381, 1937 Tenn. LEXIS 83 (1938).

66-24-113. Metropolitan identification map.

  1. Where any metropolitan government, as defined in § 7-1-101, has adopted an official property identification map which assigns to each parcel of property a number or other identifying symbol for property within the area of the metropolitan government, every deed offered for recording shall show on its face the number or other identifying symbol of the parcel or parcels, or portions of parcels, being transferred or conveyed.
  2. The county register shall not record any deed without such number or symbol appearing thereon, and, if the property is improved, a notation at the end of the legal description of such property indicating that the property is improved, followed by the house and/or street number and post-office address.
  3. An official property identification map for the purpose of this section is defined to be a property map or maps, prepared by or for the local government, which identifies all parcels of land, which assigns a number or other identifying symbol to each parcel, which shows names of streets and public ways, and which by appropriate and specific reference thereto has been adopted by the governing body of the metropolitan government as its official property identification map.

Acts 1963, ch. 71, § 1; T.C.A., § 64-2413.

66-24-114. Names and addresses required on deeds.

No deed of conveyance of real property, except for a deed of trust or mortgage, shall be received for recording by any register of deeds unless there shall be included thereon the name and address of a property owner and the name and address of the person or entity responsible for the payment of the real property taxes.

Acts 1973, ch. 287, § 1; 1975, ch. 201, § 1; T.C.A., § 64-2414; Acts 1986, ch. 563, § 1; 1987, ch. 187 § 1.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-201, 8-202.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

66-24-115. Name of preparer of instrument.

    1. No instrument by which the title to real estate or personal property, or any interest therein, or lien thereon, is conveyed, created, encumbered, assigned or otherwise affected, or disposed of, nor any power of attorney, including, but not limited to, any durable power of attorney for health care, shall be received for record, or filing, by the county register unless the name and address of the person or the governmental agency, if any, that prepared such instrument, appears within  the instrument, and such name is either printed, typewritten, stamped, or signed in a legible manner.
    2. An instrument will be in compliance with this section if it contains a statement in the following form: “This instrument was prepared by (name)  (address)  ”; provided, that the receiving for record, or filing, of any such instrument by the county register without complying with this section shall not prevent the instrument from becoming notice as now provided by law.
  1. This section does not apply to any instrument executed prior to July 1, 1965, nor to any decree, order, judgment, writ of any court, will or death certificate.
  2. This section shall not apply to any Uniform Commercial Code instrument, including instruments intended as or that relate to a fixture filing pursuant to § 47-9-502.

Acts 1965, ch. 363, § 1; T.C.A., § 64-2417; Acts 1999, ch. 105, §§ 1, 2; 2012, ch. 707, §§ 1, 2.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-201, 8-202.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

66-24-116. Filing and recording restrictions for maps, plats and surveys.

  1. It is unlawful for the recorder of deeds of any county or any proper public authority to file on record any map, plat, survey, or other document within the definition of land surveying which does not have impressed thereon, and affixed thereto, the personal signature and seal of a registered land surveyor, licensed to survey by title 62, chapter 18, or a registered engineer by whom the map, plat, survey or other document was prepared; except that any plat, map, survey or other document covered under this chapter and which was prepared prior to May 7, 1969, may be recorded by the recorder of deeds.
  2. Instruments shall not be accepted for registration unless, in the opinion of the register to which the instrument is presented for recording, the map, plat or survey distinctly shows all words and figures necessary for clear and accurate determination of all metes, bounds, bearings, calls, easements or other information sought to be shown with sufficient clarity for reduction and/or reproduction in the register's office.
  3. However, nothing in this section shall be construed as precluding the transfer of title nor the recording of any instrument evidencing such transfer between a willing buyer and a willing seller without survey nor shall this section preclude the use of an earlier recorded survey.

Acts 1969, ch. 207, § 17; 1971, ch. 337, § 1; T.C.A., § 64-2418.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

66-24-117. Master form of mortgage clauses.

  1. An instrument containing a form or forms of covenants, conditions, obligations, powers, and other clauses of a mortgage or deed of trust may be recorded in the registry of deeds of any county and the recorder of such county, upon the request of any person, on tender of the lawful fees therefor, shall record the same in the recorder's registry. Every such instrument shall be entitled on the face thereof as a “Master Form recorded by  (name of person causing the instrument to be recorded).” Such instrument need not be acknowledged to be entitled to record.
  2. When the instrument is recorded, the recorder shall index the instrument under the name of the person causing it to be recorded in the manner provided for miscellaneous instruments relating to real estate.
    1. After the recording of a master form pursuant to subsection (a) any or all of the provisions thereof may be incorporated by reference in a mortgage or deed of trust of real property situated within this state, provided:
      1. The master form has been previously recorded in the same county;
      2. The reference includes the date, the book volume, and the page or pages where the master form has been recorded; and
      3. A copy of the master form has been furnished to each of the persons executing the mortgage or deed of trust; provided, that if the mortgage or deed of trust contains a recitation or acknowledgment that the copy has been furnished, such recitation or acknowledgment shall be conclusive proof that such copy has been furnished.
    2. The recording of any mortgage or deed of trust which has so incorporated therein by reference any of the provisions of such master form shall have like effect as if such provisions had been set forth fully in the mortgage or deed of trust.
    1. Whenever a mortgage or deed of trust is presented for recording which contains a verbatim copy of one (1) or more provisions of a master form previously recorded in the same county in conformity with subsection (a), the register shall not record such copied provisions, nor charge the recording fees therefor, unless requested to re-record the same by the person offering the instrument for recording, notwithstanding any statute or custom requiring the recording of the entirety of any instrument accepted for recording; provided, that:
      1. Such mortgage or deed of trust shall, in the portion designated for recording, contain a proper reference to the date, volume, and page of the recording of the master form which contains the copied provisions; and
      2. The copied provisions:
        1. Are appropriately physically separated from the other provisions in such a way as to make it feasible to omit the same when the recording is done photographically; and
        2. Are appropriately preceded by a notation direction to the effect of “do not record” or “not to be recorded.”
    2. Any register of deeds who follows the above procedures in the performance of these duties shall not be liable for so doing, any other law to the contrary notwithstanding.

Acts 1967, ch. 334, § 1; T.C.A., §§ 64-2419 — 64-2922.

Collateral References.

Debts included in provisions of mortgage purporting to cover all future and existing debts (“Dragnet Clause”) — Modern Status, 3 A.L.R.4th 690.

66-24-118. Deed endorsements regarding deposit of hazardous wastes — Definitions.

  1. The register shall, upon receiving notification from the commissioner of environment and conservation that hazardous wastes have been landfilled on property in the county, enter or endorse on the deed the following:
    1. The hazardous wastes which are disposed of on such property;
    2. The date of the notification of such disposal by the commissioner;
    3. The date of the register's entry or endorsement; and
    4. The official signature of the register.
  2. The entry or endorsement shall be substantially as follows:

    The commissioner of environment and conservation has determined that the following types of hazardous wastes have been or will be landfilled on this property  and has notified this office of such disposal on (month), (day), (year).

    This  day of  , 20  ,  Register.

  3. The register shall record in the lien books such notifications received from the commissioner.
  4. As used in this section:
    1. “Landfilled” includes the disposal of such wastes in any settlement pond or lagoon which is not regulated by the division of water quality control and also includes disposal by open dumping; and
    2. “Open dumping” means the depositing of solid wastes into a body or stream of water or onto the surface of the ground without compacting the waste and covering with suitable materials as prescribed in the regulations of the department of environment and conservation.
  5. This section is to be administered by the division of solid waste management in the department of environment and conservation.

Acts 1979, ch. 382, § 2; T.C.A., § 64-2423; Acts 1992, ch. 693, § 1.

66-24-119. Judgments and writs affecting real estate.

Judgments, attachments, orders, injunctions, and other writs affecting title, use or possession of real estate, issued by any court shall be effective against any person having, or later acquiring, an interest in such property who is not a party to the action wherein such judgment, attachment, order, injunction, or other writ is issued only after an appropriate copy or abstract, or a notice of lis pendens, is recorded in the register's office of the county wherein the property is situated. If an abstract is used, the contents shall be as prescribed in § 25-5-108.

Acts 1984, ch. 603, § 2.

NOTES TO DECISIONS

1. Effect.

T.C.A. § 66-24-119 does not abrogate the common law rule giving preference to a mortgagee over a mechanic's lien in a purchase money mortgage transaction. Guffey v. Creutzinger, 984 S.W.2d 219, 1998 Tenn. App. LEXIS 388 (Tenn. Ct. App. 1998), review or rehearing denied, — S.W.2d —, 1998 Tenn. LEXIS 670 (Tenn. Nov. 9, 1998).

The judgment can be effective only as to the interest acquired by the debtor, which in a sales transaction and a contemporaneous purchase money mortgage is land subject to the vendor's lien. Guffey v. Creutzinger, 984 S.W.2d 219, 1998 Tenn. App. LEXIS 388 (Tenn. Ct. App. 1998), review or rehearing denied, — S.W.2d —, 1998 Tenn. LEXIS 670 (Tenn. Nov. 9, 1998).

Trial court improperly granted summary judgment under Tenn. R. Civ. P. 56.04 to plaintiff in a suit in which it sought a declaratory judgment establishing the priority of its judgment lien because defendant had mistakenly released a prior deed of trust on the property in question and restoring the deed of trust to its priority position would not prejudice plaintiff's rights; although plaintiff's judgment lien was properly recorded under T.C.A. § 25-5-101 and became effective against later acquired interests under § 25-5-101 and T.C.A. § 66-24-119, and notwithstanding the fact that the mistaken release resulted in an equitable lien subject to the recording and notice provisions under T.C.A. § 66-26-101 and T.C.A. § 66-26-103, plaintiff was still entitled to seek the equitable remedy of cancellation of the release. Holiday Hospitality Franchising, Inc. v. States Res., Inc., 232 S.W.3d 41, 2006 Tenn. App. LEXIS 787 (Tenn. Ct. App. Dec. 14, 2006), appeal denied, Holiday Hospitality Franchising v. States Res., Inc.,  — S.W.3d —, 2007 Tenn. LEXIS 445 (Tenn. Apr. 30, 2007).

66-24-120. Development and sale of real property for residential or commercial purposes in a manner exempt from municipal or county subdivision regulations — Required recording of boundary survey — Failure to comply.

  1. If any person develops real property for residential or commercial purposes in a manner which exempts such development from the subdivision regulations of any county or municipality and then sells, transfers or enters into agreements or contracts for the sale of more than two (2) parcels of real property in such development in any calendar year, then such person must record a boundary survey showing the proposed development of the land within thirty (30) days of the sale of the second such parcel of real property.
  2. Prima facie evidence of such development includes, but is not limited to, the construction of buildings, the opening of private driveways or the extension of utility services.
  3. There is hereby created a civil cause of action for failure to record a boundary survey showing the proposed development of land as provided in this section for any person who discovers such noncompliance. A prevailing plaintiff shall be entitled to liquidated damages in an amount of one hundred dollars ($100) or the cost of obtaining a survey on such property, whichever is greater, plus reasonable attorneys' fees and costs.
  4. This section shall only apply in counties having a population of not less than twenty-one thousand five hundred seventy-five (21,575) nor more than twenty-one thousand six hundred seventy-five (21,675) according to the 1980 federal census or any subsequent federal census.

Acts 1990, ch. 667, § 1.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

66-24-121. Name, address and license number of surveyor required on certain instruments for registration — Exceptions — Failure to comply.

  1. No deed of conveyance of real property, except for a deed of trust or mortgage, shall be prepared unless there is included at the end of the legal description the name, license number and address of the surveyor who prepared the boundary survey from which the description was prepared. However, if no boundary survey was made at the time of conveyance and the legal description is different from the previous deed of record, the source of the new description shall be indicated. If the legal description is the same as in the previous deed of record, it shall be so stated.
  2. A failure to comply with the requirements of this section shall not affect the validity of the registration of any registered instrument.

Acts 1991, ch. 432, § 1, 2.

Compiler's Notes. Former § 66-24-121 (Acts 1990, ch. 790, § 1), concerning the registration of deeds of conveyance of real property, was repealed by Acts 1991, ch. 96, § 1, effective April 5, 1991. Acts 1991, ch. 432, §§ 1 and 2 enacted a new, similar section effective July 1, 1991.

66-24-122. Parcel identification number or affidavit required on deed.

  1. A deed or other instrument transferring ownership of real property, but not including a deed of trust or mortgage, shall indicate the parcel identification number assigned by the county assessor of property or a sworn affidavit that such information was requested from the assessor and was not furnished promptly. The registrar of deeds shall accept no deed or other such instrument for recordation unless such information or affidavit is contained on the deed or other such instrument.
  2. Nothing contained within this section shall be construed to affect the validity of the underlying transfer or conveyance. If a deed or other instrument is accepted for recordation which does not contain the required parcel identification number or affidavit as aforementioned, then the deed or instrument shall be recorded, and the absence of such number or statement shall in no way affect the preference, priority or legal validity of such deed or other evidence of transfer or the legal validity of the recording of the deed or instrument.
  3. Nothing contained within this section shall be construed to affect the validity of the underlying transfer or conveyance. If, through error of the registrar of deeds, a deed or other evidence is accepted for recordation and does not contain the required parcel identification number or derivation clause, then the deed or instrument shall be recorded, and the absence of such number or clause shall in no way affect the preference, priority or legal validity of such deed or other evidence of transfer.

Acts 1990, ch. 933, § 1.

Cross-References. Names and addresses required on deeds, § 66-24-114.

Recitals on instrument required for registration, § 66-24-110.

66-24-123. Security trusts — Residence of trustee.

  1. For the purposes of this section, “security trust” includes a deed of trust, mortgage, bond or other instrument, entered into after July 1, 1990, under which the title to real or personal property, or both, wholly situated in this state, is conveyed, transferred, encumbered or pledged to secure the payment of money or the performance of an obligation. The provisions of this section do not apply to security trusts applying to property partly situated in this state and partly situated outside this state, or to property situated in this state which, together with property situated outside this state, is the security for the performance of an obligation; nor shall such provisions apply to the creation, maintenance or administration of such a trust authorized or required by federal law or regulation relating to the governance, administration or regulation of a financial institution.
  2. Except as provided in subsection (e):
    1. A person not a resident of this state or whose principal place of employment is not in this state; and
    2. Any corporation:
      1. Not incorporated under the laws of this state or of the United States; and
      2. With its principal place of business not in this state;

        may in either case be named or act, in person or by agent or attorney, as the trustee of a security trust, either individually or as one (1) of several trustees, regardless whether one (1) or more of such other trustees qualify to serve pursuant to this section, when and only to the extent that the state, territory or District of Columbia in which such individual resides or, with respect to a corporation, when and only to the extent that the state or states, territory or territories, or District of Columbia in which such corporation is organized and has its principal place of business, grants equivalent authority to residents of this state, individuals whose principal place of employment is in this state, and corporations incorporated under the laws of this state and whose principal place of business is within this state.

    1. The county, city or town in this state in which such trustee resides shall be sufficient statement of the residence address of such trustee.
    2. Notwithstanding any other provisions of this section, if any security trust is admitted by a register of deeds for registration, it shall be conclusively presumed that such security trust complies with all the requirements of this section.
  3. All deeds of trusts, mortgages, bonds or other instruments registered by the register of deeds without the residence address of the trustee or trustees named in the instrument shall be valid for all purposes as if such address had been named in the instrument, if such registration is otherwise valid according to the law then in force.
  4. This section shall not apply to any person who is the spouse, parent, child, grandchild, brother or sister of the person conveying, transferring, encumbering or pledging title to real or personal property wholly situated in this state to secure the payment of money or the performance of an obligation.

Acts 1990, ch. 1046, § 1; 1992, ch. 619, § 1; 1992, ch. 708, § 1.

Part 2
Uniform Real Property Electronic Recording Act

66-24-201. Short title.

This part shall be known and may be cited as the “Uniform Real Property Electronic Recording Act.”

Acts 2007, ch. 420, § 2.

66-24-202. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Digitized image” means an electronic document that is created as an electronic copy of a paper document that accurately depicts the information on the paper document and is unalterable;
  2. “Document” means information that is:
    1. Inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form; and
    2. Eligible to be recorded in the land records maintained by the county register;
  3. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities;
  4. “Electronic document” means a document that is received by the county register in an electronic form;
  5. “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with a document and executed or adopted by a person with the intent to sign the document;
  6. “Paper document” means a document that is received by the county register of deeds in a form that is not electronic;
  7. “Person” means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity;
  8. “State” means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States; and
  9. “Wet Signature” means a signature affixed in ink or pencil or other material to a paper document.

Acts 2007, ch. 420, § 2.

66-24-203. Validity of electronic documents.

  1. If a law requires, as a condition for recording, that a document be an original, be on paper or another tangible medium, or be in writing, the requirement is satisfied by an electronic document satisfying this part.
  2. If a law requires, as a condition for recording, that a document be signed, the requirement is satisfied by an electronic signature or a digitized image of a wet signature.
  3. A requirement that a document or a signature associated with a document be notarized, acknowledged, verified, witnessed, or made under oath is satisfied if the electronic signature or a digitized image of a wet signature of the person authorized to perform that act, and all other information required to be included, is attached to or logically associated with the document or signature. A physical or electronic image of a stamp, impression, or seal need not accompany an electronic signature.
    1. A county register may receive for registration any electronic document that is created by making a digitized image of an original paper document that is eligible for registration, and beginning July 1, 2007, has the certification required by § 66-24-101(d).
    2. All recordings of electronic documents eligible for registration pursuant to this subsection (d) are validly registered when accepted for recording by the county register. Electronic documents registered by county registers prior to July 1, 2007, shall be considered validly registered.

Acts 2007, ch. 420, § 2.

66-24-204. Authority of county register.

  1. A county register:
    1. Who implements any of the functions listed in this section shall do so in compliance with standards established by the information systems council established under § 4-3-5501;
    2. May receive, index, store, archive, and transmit electronic documents;
    3. May provide for access to, and for search and retrieval of, documents and information by electronic means;
    4. Who accepts electronic documents for recording shall continue to accept paper documents as authorized by state law and shall place entries for both types of documents in the same index;
    5. May convert paper documents accepted for recording into electronic form;
    6. May convert into electronic form information recorded before the county register began to record electronic documents;
    7. May accept electronically any fee or tax that the county register is authorized to collect;
    8. May agree with other officials of a state or a political subdivision of a state, or of the United States, on procedures or processes to facilitate the electronic satisfaction of prior approvals and conditions precedent to recording and the electronic payment of fees and taxes; and
    9. May refuse to record any document transmitted electronically to the county register for recording under this part on and after July 1, 2007, that does not comply with § 66-24-101.
  2. Any electronic documents or digitized images accepted by the county register prior to July 1, 2007, are deemed to be recorded properly and to impart constructive notice.

Acts 2007, ch. 420, § 2.

66-24-205. Administration and standards.

  1. The information systems council shall adopt standards to implement this part.
  2. To keep the standards and practices of county registers in this state in harmony with the standards and practices of recording offices in other jurisdictions that enact substantially this part and to keep the technology used by county registers in this state compatible with technology used by recording offices in other jurisdictions that enact substantially this part, the information systems council so far as is consistent with the purposes, policies, and provisions of this part, in adopting, amending, and repealing standards shall consider:
    1. Standards and practices of other jurisdictions;
    2. The most recent standards promulgated by national standard-setting bodies, such as the Property Records Industry Association;
    3. The views of interested persons and governmental officials and entities;
    4. The needs of counties of varying size, population, and resources; and
    5. Standards requiring adequate information security protection to ensure that electronic documents are accurate, authentic, adequately preserved, and resistant to tampering.

Acts 2007, ch. 420, § 2.

66-24-206. County registers not required to receive electronic documents.

Nothing in this part, or any other law, shall be construed to require county registers to receive a document electronically.

Acts 2007, ch. 420, § 2.

Chapter 25
Release of Liens Created by Written Instruments

Part 1
In General

66-25-101. Requirements for record of release.

  1. When a debt secured by a mortgage, deed of trust, or by lien retained in a deed of conveyance of land or bill of sale, or other instrument, has been fully paid or satisfied, the mortgagee, transferee, or assignee of the mortgagee or the legal holder of the debt secured by deed of trust or lien, who has received payment or satisfaction of the debt, must satisfy the record by a formal deed of release.
  2. In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census the record may be satisfied by entry on the margin of the record of the mortgage, deed of trust, deed or other instrument.

Acts 1907, ch. 473, § 1; Shan., § 3704a1; mod. Code 1932, § 8070; T.C.A. (orig. ed.), § 64-2501; Acts 1988, ch. 636, § 12; 1990, ch. 902, § 3.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Cross-References. Entry of release of lien, fee, § 66-21-121.

Marginal release authorized in certain counties, title 66, ch. 25, part 2.

Release of statutory lien, § 66-21-106.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-901, 8-902, 9-411, 9-412.

Tennessee Jurisprudence, 19 Tenn. Juris., Mortgages and Deeds of Trust, § 41; 24 Tenn. Juris., Vendor and Purchaser, § 75.

Law Reviews.

Agricultural Lending in the 1980's: An Insurance Company's Perspective (Leif D. Jensen), 18 Mem. St. U.L. Rev. 353 (1988).

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

NOTES TO DECISIONS

1. Noncompliance.

The simple failure to record a release, or for that matter a trust deed or a warranty deed, does not constitute a tort. United American Bank v. Gardner, 706 S.W.2d 639, 1985 Tenn. App. LEXIS 3245 (Tenn. Ct. App. 1985).

2. Authority to Release Lien.

Claimant indicated that he had no obligations under the loan documents due to the “Reconveyance” that he filed with the Shelby County Register. He argued that the effect of the Reconveyance was to transfer the property, free and clear of liens, to himself; however, under Tennessee law, he did not have the authority to file a document attempting to release the lien or mark it satisfied, and the Reconveyance had no legal effect. In re New Century Trs Holdings, Inc., 446 B.R. 656, 2011 Bankr. LEXIS 1186 (3rd Cir. Apr. 11, 2011).

66-25-102. Penalty for failure to release.

  1. If the holder of any debt secured by real property situated in this state fails to enter a proper release of record after having been fully paid or satisfied within forty-five (45) days from the receipt of a written request from the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument or any closing agent or attorney who has collected and transmitted funds for such payment, the holder of the debt shall forfeit to the party making such request the sum of one hundred dollars ($100).
  2. If the indebtedness is not released within the forty-five-day period provided in subsection (a), the party having requested the release shall again request the release, and, if after thirty (30) days from the second request, the indebtedness has not been released, the holder shall forfeit to the party making the request a sum not to exceed one thousand dollars ($1,000).
  3. In the event suit is instituted to collect either or both of the forfeitures, the holder shall also be liable to the party instituting suit for all reasonable expenses, attorney fees, and the court costs incurred in the action.

Acts 1907, ch. 473, § 1; Shan., § 3704a1; mod. Code 1932, § 8070; Acts 1977, ch. 260, § 1; T.C.A. (orig. ed.), § 64-2502; Acts 1994, ch. 718, §§ 1, 2.

Cross-References. Penalty for failure to release statutory lien, § 66-21-106.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Mortgages and Deeds of Trust, § 41; 24 Tenn. Juris., Vendor and Purchaser, § 75.

Law Reviews.

Agricultural Lending in the 1980's: An Insurance Company's Perspective (Leif D. Jensen), 18 Mem. St. U.L. Rev. 353 (1988).

Tennessee and the Installment Land Contract: A Viable Alternative to the Deed of Trust, 21 Mem. St. U.L. Rev. 551 (1991).

NOTES TO DECISIONS

1. Construction.

This is a penal statute, because it fixes the exact sum to be recovered against the one in default in an action of debt or qui tam; and the statute being penal and not remedial, must be strictly construed. Kitts v. Kitts, 136 Tenn. 314, 189 S.W. 375, 1916 Tenn. LEXIS 133 (1916); Phillips v. Cottage Grove Bank & Trust Co., 8 Tenn. App. 98, 1928 Tenn. App. LEXIS 114 (1928).

T.C.A. § 66-25-102 is penal, not remedial, in nature and must be strictly construed. In re Cox, 57 B.R. 290, 1986 Bankr. LEXIS 6802 (Bankr. E.D. Tenn. 1986).

Considering the context in which the phrase “the party instituting suit” is used and the general purpose of the statute, the phrase “the party instituting suit” includes a party asserting a counterclaim; so filing or asserting a counterclaim might be described as instituting a suit or a countersuit. Vinings Bank v. Homeland Cmty. Bank, — S.W.3d —, 2019 Tenn. App. LEXIS 327 (Tenn. Ct. App. June 28, 2019).

Statute is penal, rather than remedial, in nature; so the statute should be strictly construed. Vinings Bank v. Homeland Cmty. Bank, — S.W.3d —, 2019 Tenn. App. LEXIS 327 (Tenn. Ct. App. June 28, 2019).

In addition to providing a mechanism for obtaining a release of a deed of trust, the purpose of the statute is to penalize the holder of any debt secured by real property who fails to enter a proper release of record after having been fully paid; given that purpose, there is no basis for distinguishing between claims asserted in complaints and claims asserted in counterclaims. Vinings Bank v. Homeland Cmty. Bank, — S.W.3d —, 2019 Tenn. App. LEXIS 327 (Tenn. Ct. App. June 28, 2019).

2. Right to Recover Penalty.

Where the widow of the deceased lien debtor became the possessor of the entire tract of land under the law awarding her a homestead and dower, she cannot recover against the holder of the debt the penalty for his failure and refusal to satisfy of record the lien retained in the deed to her husband, because she is neither the “owner” nor the “purchaser.” Kitts v. Kitts, 136 Tenn. 314, 189 S.W. 375, 1916 Tenn. LEXIS 133 (1916).

New lender was entitled to recovery of its attorney's fees, expenses, and costs because despite the new lender being a defendant in a mortgagee's declaratory judgment action, the new lender's counterclaim for the statutory penalty entitled it to an award of attorney's fees; the amounts paid by the lender satisfied a loan, and despite receiving the payoff and written requests from the lender as required, a Georgia state-chartered bank nnever recorded or provided a release. Vinings Bank v. Homeland Cmty. Bank, — S.W.3d —, 2019 Tenn. App. LEXIS 327 (Tenn. Ct. App. June 28, 2019).

3. Notice.

Strict construction applies to the notice or demand to release. It must have such definiteness and clarity that the holder of the lien may know exactly what lien was referred to. Phillips v. Cottage Grove Bank & Trust Co., 8 Tenn. App. 98, 1928 Tenn. App. LEXIS 114 (1928).

4. Immunity.

The FDIC is immune from the penalty provided in T.C.A. § 66-25-102 unless there is an express waiver of the immunity. Commerce Fed. Sav. Bank v. FDIC, 872 F.2d 1240, 1989 U.S. App. LEXIS 5015 (6th Cir. 1989).

Collateral References.

Conditional sale as within statute providing for penalty for failure to satisfy lien. 128 Me. 280, 147 A. 205, 1929 Me. LEXIS 101, 65 A.L.R. 1316.

66-25-103. Entry of partial payments.

    1. The mortgagee, or the assignee or the transferee of a debt secured by such instrument, who has accepted partial payments, on request in writing of a judgment creditor or other creditor of the mortgagor having a lien or claim on the property covered by the lien, or the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument, any closing agent or attorney who has collected and transmitted funds for such payment, shall execute and record an instrument of partial or full release, giving the date and the amount of the payment or payments.
    2. In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census the mortgagee, or the assignee or the transferee of a debt secured by such instrument, who has accepted partial payments, on request in writing of a judgment creditor or other creditor of the mortgagor having a lien or claim on the property covered by the lien, or the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument, any closing agent or attorney who has collected and transmitted funds for such payment, shall execute and record a statement of partial release in the manner and form provided in part 2 of this chapter for a full release, giving the date and amount of such partial payment or payments.
  1. The mortgagee, or the assignee or the transferee of a debt secured by real property who has accepted partial payments pursuant to an agreement to release a portion or portions of the property securing the lien of such instrument on request in writing of the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument or any closing agent or attorney who has collected and transmitted funds for such payment shall execute and record a formal partial release deed.
    1. If for thirty (30) days after receipt of the written request set forth in subsections (a) and (b), the mortgagee, or the assignee or transferee of a debt so secured arbitrarily or unreasonably fails to record the statement or partial deed of release set out in subsections (a) and (b), such person shall forfeit to the party making such request the sum of one hundred dollars ($100). If the indebtedness is not released within the thirty-day period, the party having requested the release shall again request the release, and, if after thirty (30) days from the second request, the indebtedness has not been released, the holder shall forfeit to the party making the request a sum not to exceed one thousand dollars ($1,000).
    2. In the event suit is instituted to collect either or both of the forfeitures, the holder shall also be liable to the party instituting suit for all reasonable expenses, attorney fees, and the court costs incurred in the action.

Acts 1907, ch. 473, § 2; Shan., § 3704a2; mod. Code 1932, § 8071; Acts 1977, ch. 260, § 2; T.C.A. (orig. ed.), § 64-2503; Acts 1988, ch. 636, § 13; Acts 1990, ch. 902, § 4.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 9-411.

66-25-104. Right to forfeiture not lost by transfer of property.

The right of action for forfeiture provided by §§ 66-25-102 and 66-25-103 shall be considered as a personal right, and shall not be lost or waived by the sale of the property covered by the mortgage, or deed of trust, or other lien before a demand was made for a release on the records.

Acts 1907, ch. 473, § 4; Shan., § 3704a4; mod. Code 1932, § 8072; T.C.A. (orig. ed.), § 64-2504.

66-25-105. Partial or full payment — Extent of satisfaction and discharge.

A partial or full payment to the mortgage lender of record on a debt secured by a mortgage or deed of trust shall be a satisfaction and discharge against the mortgagee, or the assignee or transferee of a debt secured by such instrument, as to the amount of such payment.

Acts 1999, ch. 95, § 1.

Compiler's Notes. Former § 66-25-105 was repealed by Acts 1988, ch. 636, § 14.

NOTES TO DECISIONS

1. Compliance.

Ownership of a property was established through the deed recorded first, rather than the original deed that was recorded second, because the conveyance for the deed that was recorded first was supported by consideration, while the original deed was misplaced and was not found and recorded until well after the conveyance that was recorded first. Housewright v. McCormack, — S.W.3d —, 2016 Tenn. App. LEXIS 894 (Tenn. Ct. App. Nov. 29, 2016).

66-25-106 — 66-25-114. [Repealed.]

Compiler's Notes. Former §§ 66-25-10666-25-114 (Acts 1883, ch. 253, §§ 1-4; 1911, ch. 67, §§ 1, 2; Code 1932, §§ 8066-8069, 8074-8084; Shan., §§ 3701-3704; Acts 1965, ch. 205, § 1; T.C.A. (orig. ed.), §§ 64-2505 — 64-2519), concerning release of liens created by written instruments, were repealed by Acts 1988, ch. 636, § 14.

66-25-115. Costs paid by lienor.

All costs of making entry of partial or entire payments upon the record, or for registering a formal release, shall be paid by the holder of the debt secured by the mortgage, deed of trust, or other lien.

Acts 1907, ch. 473, § 3; Shan., § 3704a3; mod. Code 1932, § 8073; T.C.A. (orig. ed.), § 64-2520.

66-25-116. Release or modification of lien by holder of indebtedness.

Notwithstanding any other provision of this code, any mortgage, deed of trust, deed, or other instrument securing a debt, may be released or modified by the legal holder of the debt secured thereby without the necessity of execution of the release instrument, marginal release, or modification instrument or joinder therein by the trustee under a deed of trust or by other party holding legal title similar to that of the trustee under a deed of trust.

Acts 1996, ch. 670, § 1.

Law Reviews.

1996 Real Estate Legislation: What You Don't Know Can  Hurt You (William R. Bruce), 32 No. 6 Tenn. B.J. 12 (1996).

Part 2
Marginal Release of Liens

66-25-201. Marginal release authorized.

The release on satisfaction of any debt, contract or obligation, secured by mortgage or deed of trust, liens retained upon the face of any deed or conveyance, or any other lien, evidenced by written instrument, probated and registered according to law, and the discharge of any such mortgage, deed of trust, or other lien, may be acknowledged by the payee, creditor, obligee, or holder of such debt, contract, or obligation, or by such person's true and lawful assignee, or by the personal representative of such holder, or the assignee of such representative, by an entry, subscribed in the presence of the register of the county where any such instrument is lawfully registered, on the margin of the record thereof, or by execution in like manner of a statement of release in substantially the form prescribed in § 66-25-202 that may be recorded as a written release to allow for effecting the equivalent of a marginal release where microfilming or photocopy or other permanent recording processes are used, and where so done, the statement of release shall be filed and recorded by the register; provided, that the register is personally acquainted with such holder or person making such release, and shall subscribe the same as a witness, in authentication thereof, which the register's official signature shall conclusively imply. Any such entry, when made in accordance with §§ 66-25-20166-25-203, shall have the same effect as a deed of release or quitclaim, duly executed by the person making the release, authenticated and registered.

Acts 1990, ch. 902, § 6.

66-25-202. Form of marginal release.

The release may be in substantially the following form:

I (or we),  , declare that I am (or we are) the true and lawful holder (or holders) of the claim (or part of the claim, and specifying what part) secured by the instrument within recorded, and hereby acknowledge the satisfaction thereof and discharge of the lien to secure the same in full (or if one (1) part, or partial amount, state what part). This  day of  A.D. Attest as to A.B.; C.D., Register.

Acts 1990, ch. 902, § 7.

66-25-203. Execution of marginal release — Fee.

The entry, except the signature of the person making the release and the attesting signature of the register or the register's deputy, shall be either in the handwriting of the register or the register's deputy or by stamp or both; provided, that the register may charge and collect for the register's services in making the entry, and officially authenticating the same, the sum of three dollars ($3.00).

Acts 1990, ch. 902, § 8.

66-25-204. Marginal release as part of record — Certified copies.

  1. Such marginal entry shall, from the time it is made, constitute a part of the record pertaining to such instrument, and shall constitute a part of any transcript of the same thereafter made and certified. Any person having lawful custody of the original instrument, with its certificate of registration, or of a certified transcript made before the release was recorded, may apply to the register who shall on payment of a fee of one dollar ($1.00) certify a true copy thereof upon the original instrument or certified copy previously made.
  2. The release, duly certified in any of the methods mentioned in this section, shall be received in evidence in any court in any matter or litigation wherein the same may be material.

Acts 1990, ch. 902, § 9.

66-25-205. Production of instrument evidencing indebtedness before entry of marginal release.

Any person appearing before the register for the purpose of making a release or partial release of any lien, on the margin opposite any such instrument of record in any book in the registry, shall produce and exhibit to the register, at the time of applying for such release, the original note or other instrument evidencing the indebtedness secured by the lien, or file an affidavit excusing the production thereof upon the ground that same has been lost, destroyed or mislaid, unintentionally.

Acts 1990, ch. 902, § 10.

66-25-206. Endorsement as to marginal release on face of instrument.

  1. It is the duty of the register, or the register's deputy, in case such original instrument is produced, to write or stamp, or both, across its face, and to sign officially, a certificate, properly dated, showing that the same has been released, wholly or partially, as the case may be, and specifying the book and page where the release appears.
  2. The certificate may be, substantially, in the following form:

    The lien securing this instrument was duly released (in whole or in part, specifying the extent), as appears of record in Deed Book (or Trust Book)  , page  , in the office of the undersigned.

    This  day of  , 20 .

    County Register

Acts 1990, ch. 902, § 11.

Cross-References. Entry of release of lien, fee, § 66-21-121.

66-25-207. Affidavit in lieu of production of instrument.

  1. In case the lawful owner or holder of the instrument secured, as provided in this part, shall be unable to produce same at the time of making application for such release, on account of same having been lost, destroyed or mislaid, the lawful owner or holder of the instrument secured shall subscribe and swear to an affidavit, before the register or deputy, hereby duly authorized to administer such oaths, stating that such person is the true and lawful owner or holder of the instrument thereby secured, and stating briefly the facts which account for the inability of the owner or holder to produce such instrument.
  2. The affidavit, excusing production, shall be substantially in the following form:

    State of Tennessee

    County of

    I,  , do hereby solemnly swear (or affirm) that I am the true and lawful owner or holder of the note (or other instrument) secured by a lien created by an instrument which is of record in Deed (or Trust) Book  , page  , of the register's office of  County, Tennessee; that I desire to make a marginal release of the lien securing the instrument (in whole or in part, as the case may be — specifying the extent); that the same has been fully paid (wholly or in part, as the case may be — specifying the extent) to me as such lawful owner and holder, and that I am unable to produce the original note (or other instrument) for the following reasons: (Here state briefly the facts showing why the secured instrument cannot be produced for cancellation, and that its loss, etc., was unintentional).

    Owner or Holder of Note

    Sworn to and subscribed before me, this the  day of  , 20 .

    Register or Deputy

  3. Any person who shall willfully swear falsely in the affidavit is guilty of perjury, and liable to the penalty for perjury upon conviction.
  4. The affidavit shall be filed with the register, and shall be recorded by the register in a well-bound book to be kept by the register in the register's office, and the original affidavit shall be filed and preserved as a record of the register's office.
  5. In case the affidavit is made, the register shall charge a fee of one dollar ($1.00) for filing and recording the same, in addition to the register's fee for attesting the marginal release, these fees to be paid by the party making the release.
  6. Upon the making of the affidavit, the register or the register's deputy shall permit a party to make the marginal release upon the record, where the original secured instrument is not produced, this release to be duly attested by the register or the register's deputy.

Acts 1990, ch. 902, § 12.

Cross-References. Perjury, § 39-16-702.

66-25-208. Procurement of release by forgery or fabrication — Penalties.

  1. Any person who produces a fabricated or forged note or other evidence of indebtedness secured by a lien, and procures thereby a release under §§ 66-25-201 — 66-25-206, is guilty of forgery and punishable accordingly.
  2. If the true note, or other such evidence of indebtedness be produced, after its fraudulent or felonious obtainment, and the lien thereby procured to be so released, such person is guilty of a felony, with penalty as in case of forgery.

Acts 1990, ch. 902, § 13.

Compiler's Notes. The felony provisions in this section may have been affected by the Criminal Sentencing Reform Act of 1989. See §§ 39-11-113, 40-35-110, 40-35-111.

Cross-References. Forgery, § 39-14-114.

66-25-209. Liability of register for improper release.

Should the register attest a marginal release without seeing to the compliance with the requirements of this chapter, the register and the sureties on the register's official bond shall be liable to any person injured in consequence thereof.

Acts 1990, ch. 902, § 14.

66-25-210. Right to release by deed of release or quitclaim preserved.

This chapter shall not be construed to preclude the right of release by way of deed of release or quitclaim.

Acts 1990, ch. 902, § 15.

NOTES TO DECISIONS

1. Quitclaim Deed — Effect.

In allowing the witness to testify that it was not the witness's intention to release whatever interest held in the property via the quitclaim deed, the bankruptcy court permitted the witness to contradict the quitclaim deed in violation of the parol evidence rule. Joyner v. Johnson, 187 B.R. 598 (E.D. Tenn. 1994).

66-25-211. Applicability of this part to certain counties.

This part applies to any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census.

Acts 1990, ch. 902, § 16.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Chapter 26
Effect of Authentication and Registration

66-26-101. Effect of instruments with or without registration.

All of the instruments mentioned in § 66-24-101 shall have effect between the parties to the same, and their heirs and representatives, without registration; but as to other persons, not having actual notice of them, only from the noting thereof for registration on the books of the register, unless otherwise expressly provided.

Code 1858, § 2072 (deriv. Acts 1831, ch. 90, §§ 6, 12; 1841-1842, ch. 12, § 2); Shan., § 3749; Code 1932, § 7665; T.C.A. (orig. ed.), § 64-2601.

Cross-References. Requirement of registration of deed as to strangers, § 66-5-106.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 13; 12 Tenn. Juris., Executors and Administrators, § 43; 16 Tenn. Juris., Judgments and Decrees, §§ 32, 38; 20 Tenn. Juris., Notice, § 6; 21 Tenn. Juris., Recording Acts, §§ 2-5, 15; 22 Tenn. Juris., Specific Performance, § 11; 24 Tenn. Juris., Vendor and Purchaser, § 40.

Law Reviews.

Recent Decision, The Tennessee Court of Appeals Interprets the Tennessee Recording Statutes, Gregg v. Link, (1989), 56 Tenn. L. Rev. 777 (1989).

NOTES TO DECISIONS

1. Construction.

Provisions of this section must be read and applied in connection with § 8-13-108 providing that it is the duty of the register to enter all deeds and other instruments left to be registered, noting in the first column the day and hour of reception, and the other particulars in the appropriate columns; and the time of reception which must be entered is the time when the deed is delivered to the register for registration and not the time when the register entered the instrument on his notation book. Chatten v. Knoxville Trust Co., 154 Tenn. 345, 289 S.W. 536, 1926 Tenn. LEXIS 132, 50 A.L.R. 537 (1926).

2. Persons Entitled to Priority.

The statute refers to priority among parties claiming under written instruments. Roysdon v. Terry, 4 Tenn. App. 638, — S.W. —, 1927 Tenn. App. LEXIS 214 (Tenn. Ct. App. 1927).

An attaching creditor who records a notice of lis pendens has priority over a bona fide conveyee whose deed is not recorded until after the registration of the lis pendens notice. W. & O. Constr. Co. v. IVS Corp., 688 S.W.2d 67, 1984 Tenn. App. LEXIS 3187 (Tenn. Ct. App. 1984).

3. Instruments Comprehended.

The general designation “all of said instruments,” used in this section, means all of the instruments named in § 66-24-101, and embraces deeds by husband and wife. Cox v. Keathley, 99 Tenn. 522, 42 S.W. 437, 1897 Tenn. LEXIS 62 (1897).

4. —Assignment of Future Rents.

Right to future rents being an incident to an estate in the land, assignment thereof, including rents to accrue beyond a period of three years from its date is within the application of this section, and, as to persons other than the parties thereto, their heirs and representatives, and persons with actual notice, is effective only from the date of its registration. Schmid v. Baum's Home of Flowers, Inc., 162 Tenn. 439, 37 S.W.2d 105, 1930 Tenn. LEXIS 108, 75 A.L.R. 261 (1931).

Since, under the registration laws, a lease, operating to convey the record owner's right to the use and income of land for a period of not more than three years, is valid without registration, his assignment of rent or income for a similar period is likewise unaffected by the registration laws, though such rent is payable under a registered lease for a term of over three years. Schmid v. Baum's Home of Flowers, Inc., 162 Tenn. 439, 37 S.W.2d 105, 1930 Tenn. LEXIS 108, 75 A.L.R. 261 (1931).

5. —Trust Deeds.

Trust deeds are included within the terms of this section. In re Sparks, 1 F.2d 726, 1924 U.S. Dist. LEXIS 1040 (E.D. Tenn. 1924).

It was an act of bankruptcy for an insolvent debtor to execute a deed of trust, with intent to prefer a creditor, more than four months before the filing of a petition in bankruptcy against him, in case the trust deed is not recorded until within the four months' period. In re Sparks, 1 F.2d 726, 1924 U.S. Dist. LEXIS 1040 (E.D. Tenn. 1924).

The authority of a bankruptcy trustee, as a hypothetical judicial lien creditor, to take advantage of the strong arm clause, 11 U.S.C. § 544(a), prevailed over the holder of an unregistered deed of trust. Walker v. Elman (In re Fowler), 201 B.R. 771, 1996 Bankr. LEXIS 1293 (Bankr. E.D. Tenn. 1996).

6. Registration as Constructive Notice.

As between the contracting parties, the registration of the vendor's title papers does not constitute constructive notice to the purchaser as to the state of the title of the vendor. Registration is only constructive notice as to third parties; but the purchaser may, as between himself and his vendor, rely upon the representations of his vendor as to his title, and he will not be bound, as between himself and his vendor, by the registered title of which he has not actual notice. Napier v. Elam, 14 Tenn. 107, 14 Tenn. 108, 1834 Tenn. LEXIS 58 (Tenn. Mar. 1834); Topp v. White, 59 Tenn. 165, 1873 Tenn. LEXIS 43 (1873); Nichol v. Nichol, 63 Tenn. 145, 1874 Tenn. LEXIS 221 (1874); Frizzell v. Rundle & Co., 88 Tenn. 396, 12 S.W. 918, 1889 Tenn. LEXIS 61, 17 Am. St. R. 908 (1890); Embry v. Galbreath, 110 Tenn. 297, 75 S.W. 1016, 1903 Tenn. LEXIS 60 (1903).

Registration is constructive notice to a prospective purchaser, and if he fails to search the records, he is guilty of gross negligence, and cannot rely upon the plea of innocent purchaser, as against other claimants of the property, whose rights are shown by a properly registered instrument. Parker v. Hall, 39 Tenn. 641, 1859 Tenn. LEXIS 294 (Tenn. Apr. 1859).

Where a married woman, under a registered instrument, holds a part of the land mortgaged, but without actual knowledge of the existence of such paper, either by her or the mortgagee, and without intention of fraud on the part of herself or the mortgagee, she joins her husband in a mortgage of the land, joining also in the words of conveyance and of covenant, it was held that the registration of the instrument under which she claimed was notice not only to other persons, but also notice to her, and that, consequently, her interest as a thing legally known to her, but actually unknown, passed under the mortgage. Fogg v. Yeatman, 74 Tenn. 575, 1880 Tenn. LEXIS 295 (1880).

The registration of a chattel mortgage does not operate as constructive notice to an auctioneer, broker, or factor, who, in the regular course of his business, receives and sells the mortgaged chattels for the mortgagor, on commission, and pays over to him the proceeds, without actual notice of the mortgage. Frizzell v. Rundle & Co., 88 Tenn. 396, 12 S.W. 918, 1889 Tenn. LEXIS 61, 17 Am. St. R. 908 (1890); Embry v. Galbreath, 110 Tenn. 297, 75 S.W. 1016, 1903 Tenn. LEXIS 60 (1903).

7. —Deeds with Insufficient Description of Property.

Deeds with insufficient description of the property conveyed, though registered, leave the property exposed to execution in favor of grantor's creditors. They are invalid and not true conveyances. Phoenix Mut. Life Ins. Co. v. Kingston Bank & Trust Co., 172 Tenn. 335, 112 S.W.2d 381, 1937 Tenn. LEXIS 83 (1938).

8. Actual Notice — Facts Constituting — Effect.

Where the holders of a certificate of convenience and necessity under the federal Motor Carrier Act mortgaged the certificate and subsequently sold it to a trucking company whose president was informed of the mortgage before the sale, the mortgage was good against the trucking company without registration. Brown v. Smith, 32 Tenn. App. 622, 225 S.W.2d 91, 1949 Tenn. App. LEXIS 112 (Tenn. Ct. App. 1949).

When anything appears which would put a man of ordinary prudence upon inquiry, the law presumes that such inquiry was actually made and therefor fixes the notice upon him as to all legal consequences, and whatever is sufficient to put a person upon inquiry is notice of all the facts to which the inquiry will lead when prosecuted with reasonable diligence and in good faith. Texas Co. v. Aycock, 190 Tenn. 16, 227 S.W.2d 41, 1950 Tenn. LEXIS 413, 17 A.L.R.2d 322 (1950).

Defendant who purchased property under a deed reciting that purchase was subject to a lease had actual notice of lease and its contents including option to buy at specified price even though lease was not recorded. Texas Co. v. Aycock, 190 Tenn. 16, 227 S.W.2d 41, 1950 Tenn. LEXIS 413, 17 A.L.R.2d 322 (1950).

A reference in prior deeds conveying water lines stating that it is conveyed “together with” all interests which conveyors have in a contract or ordinance with a city, permitting the installation and maintenance of the system and regulating water flow, did not constitute actual notice or equivalent sufficient to impute knowledge to an otherwise bona fide purchaser or encumbrancer of the city's alleged water rights since it implies rights rather than burdens. Johnson City v. Milligan Utility Dist., 38 Tenn. App. 520, 276 S.W.2d 748, 1954 Tenn. App. LEXIS 138 (Tenn. Ct. App. 1954).

“Owner's Consent to Pledge of Collateral” was null and void as to a new lender because it lacked actual notice of the agreement; the new lender did not have inquiry notice because nothing in a Georgia state-chartered bank's deed of trust indicated or suggested that further inquiry was necessary, and there was no proof that the bank ever referenced the Owner's Consent in any of its communications with the mortgagor and his brother prior to the closing of the new loan. Vinings Bank v. Homeland Cmty. Bank, — S.W.3d —, 2019 Tenn. App. LEXIS 327 (Tenn. Ct. App. June 28, 2019).

9. Unregistered Conveyances — Extent of Validity.

Registration is only required as against the creditors of the grantor and bona fide purchasers for a valuable consideration, without notice. It is not necessary to the validity of the conveyance as between the parties, or as against the grantor, his heirs, and representatives. Grady v. Sharron, 14 Tenn. 320, 1834 Tenn. LEXIS 85 (Tenn. Mar. 1834); Hays v. McGuire, 16 Tenn. 92, 1835 Tenn. LEXIS 51 (1835); Baldwin v. Baldwin, 21 Tenn. 473, 1841 Tenn. LEXIS 49 (1841); Ocoee Bank v. Nelson, 41 Tenn. 186, 1860 Tenn. LEXIS 43 (1860); Green v. Goodall, 41 Tenn. 404, 1860 Tenn. LEXIS 83 (1860); Kinsey v. McDearmon, 45 Tenn. 392, 1868 Tenn. LEXIS 20 (1868); Allen v. Allen, 2 Cooper's Tenn. Ch. 28 (1874); Self v. Haun, 2 Shan. 123 (1876); Sanders v. Everett, 3 Cooper's Tenn. Ch. 520 (1877); Worley v. State, 75 Tenn. 382, 1881 Tenn. LEXIS 130 (1881); Cowan, McClung & Co. v. Gill, 79 Tenn. 674, 1883 Tenn. LEXIS 125 (1883); Smith v. Taylor, 79 Tenn. 738, 1883 Tenn. LEXIS 132 (1883); Templeton v. Twitty, 88 Tenn. 595, 14 S.W. 435, 1889 Tenn. LEXIS 80 (Tenn. Dec. 1889); Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890); King v. Coleman, 98 Tenn. 561, 40 S.W. 1082, 1897 Tenn. LEXIS 145 (1897); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904); Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911); Smith v. Cross, 125 Tenn. 159, 140 S.W. 1060, 1911 Tenn. LEXIS 17 (1911); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912).

The joint deed of husband and wife, duly signed and acknowledged by both, is effective as between the parties thereto, without registration, and, if absolute, passes to the grantee the whole estate in the lands conveyed, and extinguishes the right of homestead therein. Cox v. Keathley, 99 Tenn. 522, 42 S.W. 437, 1897 Tenn. LEXIS 62 (1897).

Unregistered mortgage, if made and held in good faith, is a valid security, as between the parties. Rogers v. Page, 140 F. 596, 1905 U.S. App. LEXIS 3947 (6th Cir. Nov. 1905).

Those claiming under a decree of the chancery court ordering the sale of a grantor's land at the suit of his creditor had a better title than those claiming under a prior unregistered deed of the grantor. Stockton v. Hutchison, 182 Tenn. 616, 188 S.W.2d 607, 1945 Tenn. LEXIS 260 (1945).

Where cotenants gave deeds to another cotenant, his possession constituted an ouster, and as between the parties became adverse so that deeds were effective although not registered. Jones v. Mosley, 29 Tenn. App. 559, 198 S.W.2d 652, 1946 Tenn. App. LEXIS 91 (Tenn. Ct. App. 1946).

An unrecorded instrument is void only as to creditors or purchasers without notice. Brown v. Smith, 32 Tenn. App. 622, 225 S.W.2d 91, 1949 Tenn. App. LEXIS 112 (Tenn. Ct. App. 1949).

Suit for specific performance of contract for sale of land would lie against administrator and heirs of deceased landowner even though contract was improperly authenticated for registration and consequently improperly registered. Brister v. Estate of Brubaker, 47 Tenn. App. 150, 336 S.W.2d 326, 1960 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1960).

A deed is effective between the parties thereto without acknowledgment or registration, but not effective as to other parties without notice. West v. United Am. Bank, 23 B.R. 48, 1982 Bankr. LEXIS 3505 (Bankr. E.D. Tenn. 1982); In re Gatlinburg Motel Enterprises, Ltd., 119 B.R. 955, 1990 Bankr. LEXIS 1998 (Bankr. E.D. Tenn. 1990).

Property in which a debtor had an interest pursuant to an unregistered deed at the time the debtor commenced a bankruptcy case was property of the estate. Walker v. Elman (In re Fowler), 201 B.R. 771, 1996 Bankr. LEXIS 1293 (Bankr. E.D. Tenn. 1996).

Trial court improperly granted summary judgment under Tenn. R. Civ. P. 56.04 to plaintiff in a suit in which it sought a declaratory judgment establishing the priority of its judgment lien because defendant had mistakenly released a prior deed of trust on the property in question and restoring the deed of trust to its priority position would not prejudice plaintiff's rights; although plaintiff's judgment lien was properly recorded under T.C.A. § 25-5-101 and became effective against later acquired interests under § 25-5-101 and T.C.A. § 66-24-119, and notwithstanding the fact that the mistaken release resulted in an equitable lien subject to the recording and notice provisions under T.C.A. § 66-26-101 and T.C.A. § 66-26-103, plaintiff was still entitled to seek the equitable remedy of cancellation of the release. Holiday Hospitality Franchising, Inc. v. States Res., Inc., 232 S.W.3d 41, 2006 Tenn. App. LEXIS 787 (Tenn. Ct. App. Dec. 14, 2006), appeal denied, Holiday Hospitality Franchising v. States Res., Inc.,  — S.W.3d —, 2007 Tenn. LEXIS 445 (Tenn. Apr. 30, 2007).

Despite the church's failure to record their deed, the conveyance was binding on the seller, a bank, and the bank no longer owned the disputed property after the sale. Thus, the bank retained no interest in the property that the church was required to quiet and the law of champerty was inapplicable. Milledgeville United Methodist Church v. Melton, 388 S.W.3d 280, 2012 Tenn. App. LEXIS 638 (Tenn. Ct. App. Sept. 14, 2012).

It was proper to dismiss a property owner's complaint alleging the county register's office failed to exercise reasonable care in allowing a forged deed to be filed because it was time-barred by the one-year statute of limitations of the Tennessee Governmental Tort Liability Act; despite the alleged refusal of the register's office to record the deed, the conveyance remained binding because an unregistered instrument affecting an interest in real property was effective as between the parties. Patton v. Shelby County Gov't, — S.W.3d —, 2017 Tenn. App. LEXIS 121 (Tenn. Ct. App. Feb. 23, 2017).

10. Ejectment Under Unregistered Deed.

One may maintain ejectment on an unregistered deed, but if not registered it must be proven. Williams v. Williams, 25 Tenn. App. 290, 156 S.W.2d 363, 1941 Tenn. App. LEXIS 108 (Tenn. Ct. App. 1941).

11. Uniform Commercial Code.

Since the adoption of U.C.C. Article 9, compiled in title 47, ch. 9, a creditor who takes a security interest in crops should be able to determine and control the priority of the security interest against other contractual liens and against judgment liens by checking the UCC filings and by filing a financing statement. The creditor should not have to check the real estate records. In re Hill, 83 B.R. 522, 1988 Bankr. LEXIS 269 (Bankr. E.D. Tenn. 1988), superseded by statute as stated in, Wilhite Pure Oil Truck Stop, Inc. v. McCutchen, 115 B.R. 126, 1990 Bankr. LEXIS 1216 (Bankr. W.D. Tenn. 1990).

12. Priority of Mortgages.

First mortgage had priority over a second mortgage because, although the second mortgage was executed before the first mortgage was registered, the first mortgage was registered before the second mortgage was registered, and one did not become a bona fide purchaser under T.C.A. § 66-26-103 until he or she registered the instrument. Equity Mortg. Funding, Inc. v. Haynes, — S.W.3d —, 2012 Tenn. App. LEXIS 182 (Tenn. Ct. App. Mar. 20, 2012), rehearing denied, — S.W.3d —, 2012 Tenn. App. LEXIS 285 (Tenn. Ct. App. Apr. 25, 2012), appeal denied, — S.W.3d —, 2012 Tenn. LEXIS 590 (Tenn. Aug. 15, 2012).

13. Applicability.

Statute which provided that even unregistered instruments were enforceable was not applicable because the deed at issue did not list a grantee and only provided that the property was deeded for the purpose of erecting a Nazarene Church. Housewright v. McCormack, — S.W.3d —, 2016 Tenn. App. LEXIS 894 (Tenn. Ct. App. Nov. 29, 2016).

Collateral References.

Recorded real property instrument as charging third party with constructive notice of provisions of extrinsic instrument referred to therein. 89 A.L.R.3d 901.

66-26-102. Notice to all the world.

All of the instruments registered pursuant to § 66-24-101 shall be notice to all the world from the time they are noted for registration, as prescribed in § 8-13-108; and shall take effect from such time.

Code 1858, § 2073 (deriv. Acts 1831, ch. 90, §§ 6, 12; 1841-1842, ch. 12, § 2); Shan., § 3750; Code 1932, § 7666; T.C.A. (orig. ed.), § 64-2602.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 12; 1 Tenn. Juris., Adverse Possession, § 56; 3 Tenn. Juris., Assignments for the Benefit of Creditors, § 23; 21 Tenn. Juris., Recording Acts, §§ 10, 15.

Law Reviews.

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 193 (1978).

NOTES TO DECISIONS

1. Application and Effect.

This statute deals with priority among parties claiming under written instruments. It gives a bona fide purchaser without notice no priority of title over one acquiring title by adverse possession before enactment of law requiring registration of the assurance of title. Roysdon v. Terry, 4 Tenn. App. 638, — S.W. —, 1927 Tenn. App. LEXIS 214 (Tenn. Ct. App. 1927).

In this easement case, appellees granted the hunters an easement for ingress and egress, which was described, depicted, and recorded prior to appellants'  purchase of their property, which was notice for purposes of the statute, and thus appellees had no duty to disclose the recorded easement to appellants. Butler v. Pitts, — S.W.3d —, 2016 Tenn. App. LEXIS 110 (Tenn. Ct. App. Feb. 12, 2016).

2. Notation — Validity and Effect.

A deed taken to the register's office before the levy of an attachment, and, in the absence of the register or his deputy, delivered to a person there, not being the register or a deputy, who noted the time of delivery on the back of the deed, but not on the notebook, is not effectually noted for registration. Wilson v. Eifler, 58 Tenn. 179, 1872 Tenn. LEXIS 244 (1872). See Flowers v. Wilkes, 31 Tenn. 408, 1852 Tenn. LEXIS 129 (Tenn. Apr. 1852); Chatten v. Knoxville Trust Co., 154 Tenn. 345, 289 S.W. 536, 1926 Tenn. LEXIS 132, 50 A.L.R. 537 (1926).

3. Notation Time — What Constitutes.

The time of the reception of the instrument by the register and not the time when the latter makes the notation in notebook is meant. Chatten v. Knoxville Trust Co., 154 Tenn. 345, 289 S.W. 536, 1926 Tenn. LEXIS 132, 50 A.L.R. 537 (1926).

4. Notation Time as Effective Date.

As between the grantee and the creditors of the grantor, an instrument takes effect only from the time it is properly noted for registration. Washington's Lessee v. Trousdale, 8 Tenn. 385, 1828 Tenn. LEXIS 17 (1828); Gann v. Chester, 13 Tenn. 205, 1833 Tenn. LEXIS 139 (1833); Hays v. McGuire, 16 Tenn. 92, 1835 Tenn. LEXIS 51 (1835); Douglas v. Morford, 16 Tenn. 373, 1835 Tenn. LEXIS 91 (1835); Williams v. Walton, 16 Tenn. 387, 1835 Tenn. LEXIS 92 (1835); Lillard v. Ruckers, 17 Tenn. 64, 1836 Tenn. LEXIS 17 (1836); Green v. Goodall, 41 Tenn. 404, 1860 Tenn. LEXIS 83 (1860). But see Gwynne v. Estes, 82 Tenn. 662, 1885 Tenn. LEXIS 9 (1885).

Instruments properly authenticated by certificate of acknowledgment or probate, and properly noted for registration in the register's notebook, are effective from the time of such noting, because the noting is equivalent to registration until actual registration takes place. Flowers v. Wilkes, 31 Tenn. 408, 1852 Tenn. LEXIS 129 (Tenn. Apr. 1852); Ruggles v. Williams, 38 Tenn. 141, 1858 Tenn. LEXIS 143 (Tenn. Sep. 1858); Swepson v. Exchange & Dep. Bank, 77 Tenn. 713, 1882 Tenn. LEXIS 128 (1882); Boyce v. Stanton, 83 Tenn. 346, 1885 Tenn. LEXIS 59 (1885); Woodward v. Boro, 84 Tenn. 678, 1886 Tenn. LEXIS 155 (1886); Hughes v. Powers, 99 Tenn. 480, 42 S.W. 1, 1897 Tenn. LEXIS 56 (1897); Turberville v. Fowler, 101 Tenn. 88, 46 S.W. 577, 1898 Tenn. LEXIS 34 (1898); Southern Bldg. & Loan Ass'n v. Rodgers, 104 Tenn. 437, 58 S.W. 234, 1900 Tenn. LEXIS 14 (1900); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

A deed becomes effective as against the maker's creditors from the date of the noting thereof for registration, although it may remain in the register's office, without being in fact registered, for a long period, and until after the maker's creditors have attached the land conveyed. Hughes v. Powers, 99 Tenn. 480, 42 S.W. 1, 1897 Tenn. LEXIS 56 (1897).

A trust deed on property, executed prior to a deed of conveyance, but not noted for registration until after the conveyance but before such deed was noted for registration, takes priority over the deed. Whiteside v. Watkins, 58 S.W. 1107, 1900 Tenn. Ch. App. LEXIS 63 (Tenn. Ch. App. 1900).

5. Date of Notation — Proof.

Where the register fails to note an instrument for registration, or notes it as of a wrong date, or the registration fails to show when the instrument was noted, it is proper to prove, either by the register's certificate of a copy from his notebook or by parol evidence by the testimony of the register or any other person, the date when the instrument was in fact filed and noted, or should have been noted, for registration. Miller v. Estill, 19 Tenn. 479, 1838 Tenn. LEXIS 78 (1838); Boyce v. Stanton, 83 Tenn. 346, 1885 Tenn. LEXIS 59 (1885).

6. Inadvertent Noting — Effect.

An unregistered deed is void as to the grantor's subsequent creditors where he, without any agreement with the grantee and without his knowledge, delivered the deed to the register, with instructions not to record it until further notice or instructions, which were never given, and himself continuing as the ostensible owner of the property, although the register inadvertently noted the deed for registration. Turberville v. Fowler, 101 Tenn. 88, 46 S.W. 577, 1898 Tenn. LEXIS 34 (1898).

While the noting of a deed for registration is made the equivalent of registration, it will not have that effect where the noting is inadvertently done by the register, contrary to the instructions of the party having control of the deed. Turberville v. Fowler, 101 Tenn. 88, 46 S.W. 577, 1898 Tenn. LEXIS 34 (1898).

7. Use of Ditto Marks in Notation.

When ditto marks are used in the noting of an instrument for registration, they will be read as a repetition or reproduction of the words immediately above them. While the noting, in which ditto marks are used, is held to be valid, the practice is strongly disapproved. Hughes v. Powers, 99 Tenn. 480, 42 S.W. 1, 1897 Tenn. LEXIS 56 (1897).

8. Withdrawal After Noting.

Where a deed is noted for registration, and then withdrawn from the register's office, before its registration by the party beneficially interested, or his agent, it loses the benefit of the noting, and will only take effect from the date of its return to the register's office and its renoting. Hughes v. Powers, 99 Tenn. 480, 42 S.W. 1, 1897 Tenn. LEXIS 56 (1897); Turberville v. Fowler, 101 Tenn. 88, 46 S.W. 577, 1898 Tenn. LEXIS 34 (1898); Thompson v. Blanks, 114 Tenn. 54, 84 S.W. 804, 1904 Tenn. LEXIS 69 (1905).

9. Proper Notation and Improper Registration.

An instrument properly noted for registration, but actually registered in the wrong book, takes effect as a duly registered instrument from the time it was so noted. Swepson v. Exchange & Dep. Bank, 77 Tenn. 713, 1882 Tenn. LEXIS 128 (1882).

While the noting stands for a full and accurate registration of the instrument, while it remains in the office unregistered, the noting has performed its office when actual registration of the instrument has taken place. A defective registration cannot be aided by the effect given by statute to the noting before actual registration. Southern Bldg. & Loan Ass'n v. Rodgers, 104 Tenn. 437, 58 S.W. 234, 1900 Tenn. LEXIS 14 (1900).

10. Registration as Notice.

Registration is constructive notice only as to what appears upon the face of the instrument as registered, and if the property is misdescribed, the registration is a mere nullity. Baldwin v. Marshall, 21 Tenn. 116, 1840 Tenn. LEXIS 42 (1840); Lally v. Holland, 31 Tenn. 396, 1852 Tenn. LEXIS 127 (Tenn. Apr. 1852), questioned, Newsum v. Hoffman, 124 Tenn. 369, 137 S.W. 490, 1911 Tenn. LEXIS 51 (1911), questioned, Great American Indem. Co. v. Utility Contractors, Inc., 21 Tenn. App. 463, 111 S.W.2d 901, 1937 Tenn. App. LEXIS 48 (Tenn. Ct. App. 1937).

Instruments properly registered as required and provided by law shall be notice to all the world, from the time they were noted. Butler v. Hill, 60 Tenn. 375, 1872 Tenn. LEXIS 515 (1873); Irvy Morgan & Co. v. Snell, 62 Tenn. 382, 1874 Tenn. LEXIS 64 (1874); Fogg v. Yeatman, 74 Tenn. 575, 1880 Tenn. LEXIS 295 (1880); Swepson v. Exchange & Dep. Bank, 77 Tenn. 713, 1882 Tenn. LEXIS 128 (1882); Cates v. Baxter, 97 Tenn. 443, 37 S.W. 219, 1896 Tenn. LEXIS 164 (1896); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

The registration of a deed operates as notice to others only so far as it is correctly registered, and a defective registration cannot be aided by the effect given by statute to the noting before actual registration. The grantee is affected with the consequences of a defectively registered deed. Southern Bldg. & Loan Ass'n v. Rodgers, 104 Tenn. 437, 58 S.W. 234, 1900 Tenn. LEXIS 14 (1900).

Registration of a deed in a county at a time when the land conveyed thereby was no longer a part of such county was wholly ineffective to give notice. Kobbe v. Harriman Land Co., 139 Tenn. 251, 201 S.W. 762, 1917 Tenn. LEXIS 103 (1917).

Creditors of grantee under deed creating equitable lien to secure purchase money notes held charged with notice by due registration thereof. Hunt v. Curry, 153 Tenn. 11, 282 S.W. 201, 1925 Tenn. LEXIS 2 (1925).

Recordation creates constructive notice as distinguished from actual notice and binds the title of the party but not the conscience as in actual notice. Moore v. Cole, 200 Tenn. 43, 289 S.W.2d 695, 1956 Tenn. LEXIS 375 (1956).

Conveyance of property by debtor to niece made and registered more than a year before debt accrued to creditor was not fraudulent as to such creditor as creditor was charged with notice of such conveyance by virtue of its registration. Butler v. Holland, 200 Tenn. 57, 289 S.W.2d 701, 1956 Tenn. LEXIS 377 (1956).

Where subdivision plan was of record in register's office giving location, width and depth of all lots, purchasers had constructive notice of the plan and dimensions of lots. Clayton v. Haury, 224 Tenn. 222, 452 S.W.2d 865, 1970 Tenn. LEXIS 318 (1970).

11. Unauthorized Delivery of Deed by Grantor to Register.

A grantor who, without a previous delivery of his deed to the grantee and without the grantee's agreement or knowledge, delivered his deed to the register, is not a special agent of the grantee, charged with the duty of delivering the deed for registration, in such sense as to render void such grantor's special instructions to the register not to register the deed until further notice or instructions. Turberville v. Fowler, 101 Tenn. 88, 46 S.W. 577, 1898 Tenn. LEXIS 34 (1898).

12. Errors in Registration — Effect.

A deed as registered is sufficient, though it is erroneously transcribed so as to cause confusion in the boundaries, where the registration contains a general description of the land as that “on which Josiah Terry lived,” if such place is prominently located, and well known. Smith v. Cross, 125 Tenn. 159, 140 S.W. 1060, 1911 Tenn. LEXIS 17 (1911).

13. Notice as Between Tenants in Common.

Where tenant in common and his wife executed a warranty deed to property in question conveying such property to a third person who in turn reconveyed the property to such tenant in common and his wife for purpose of creating estate by the entireties in such tenant in common and his wife but the third party was never in possession of the property, registration of the two deeds was not such notice to the other tenants in common of a hostile possession by such tenant in common and his wife as to amount to an ouster or to cause the seven year statute of limitation of § 28-2-101 to commence to run. Moore v. Cole, 200 Tenn. 43, 289 S.W.2d 695, 1956 Tenn. LEXIS 375 (1956).

14. Tax Lien.

The noting of a federal tax lien for registration without a proper indexing is not necessarily notice to the world of the filing of the notice of the federal tax lien. In re Robby's Pancake House, Inc., 24 B.R. 989, 1982 Bankr. LEXIS 3000 (Bankr. E.D. Tenn. 1982).

Collateral References.

Recorded real property instrument as charging third party with constructive notice of provisions of extrinsic instrument referred to therein. 89 A.L.R.3d 901.

66-26-103. Unregistered instruments void as to creditors and bona fide purchasers.

Any instruments not so registered, or noted for registration, shall be null and void as to existing or subsequent creditors of, or bona fide purchasers from, the makers without notice.

Code 1858, § 2075 (deriv. Acts 1831, ch. 90, § 12; 1841-1842, ch. 12, § 2); Shan., § 3752; mod. Code 1932, § 7668; C. Supp. 1950, § 7668; T.C.A. (orig. ed.), § 64-2603; Acts 2005, ch. 303, § 2.

Cross-References. Priority of registered instruments, § 66-26-105.

Textbooks. Tennessee Jurisprudence, 3 Tenn. Juris., Assignments for the Benefit of Creditors, § 22; 4 Tenn. Juris., Bankruptcy, § 8; 16 Tenn. Juris., Judgments and Decrees, § 32; 18 Tenn. Juris., Marriage Contracts and Settlements, § 7; 21 Tenn. Juris., Recording Acts, §§ 2, 3, 6, 8.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Application and Effect.

A registered deed imparts the same notice to the creditor as it imparts to a purchaser as this section only relieves a creditor from the effect of notice of an unregistered instrument. Phoenix Mut. Life Ins. Co. v. Kingston Bank & Trust Co., 172 Tenn. 335, 112 S.W.2d 381, 1937 Tenn. LEXIS 83 (1938).

The registration of a deed is necessary to make it binding upon existing or subsequent creditors of, or bona fide purchasers from the grantor. Adrian v. Brown, 29 Tenn. App. 236, 196 S.W.2d 118, 1946 Tenn. App. LEXIS 68 (1946).

Tennessee law is well settled that the omission of “with whom I am personally acquainted” or similar words constitutes a fatal defect in the acknowledgment of the deed and causes the deed to be null and void as to creditors and bona fide purchasers without notice. In re Anderson, 30 B.R. 995, 1983 U.S. Dist. LEXIS 18003 (M.D. Tenn. 1983).

An attaching creditor who records a notice of lis pendens has priority over a bona fide conveyee whose deed is not recorded until after the registration of the lis pendens notice. W. & O. Constr. Co. v. IVS Corp., 688 S.W.2d 67, 1984 Tenn. App. LEXIS 3187 (Tenn. Ct. App. 1984).

The dismissal of the trust company's claims against the credit corporation was proper where trust deeds and notes had priority over unrecorded trust deeds and notes; the property securing the trust deeds had been sold to a bona fide purchaser for value, and as a matter of law was beyond the reach of the parties. Bankers Trust Co. v. Collins, 124 S.W.3d 576, 2003 Tenn. App. LEXIS 471 (Tenn. Ct. App. 2003), appeal denied, — S.W.3d —, 2003 Tenn. LEXIS 1256 (Tenn. 2003).

Creditor bank's interest in a deed of trust was entitled to priority only as to debtor husband's survivorship interest, where the notarization of debtor wife's signature did not evidence an intent to authenticate and acknowledge her signature, entitling trustee in bankruptcy to avoid the bulk of the secured interest under 11 U.S.C. § 554(b). In re Bushee, 319 B.R. 542, 2004 Bankr. LEXIS 2133 (Bankr. E.D. Tenn. 2004).

Ownership of a property was established through the deed recorded first, rather than the original deed that was recorded second, because the conveyance for the deed that was recorded first was supported by consideration, while the original deed was misplaced and was not found and recorded until well after the conveyance that was recorded first. Housewright v. McCormack, — S.W.3d —, 2016 Tenn. App. LEXIS 894 (Tenn. Ct. App. Nov. 29, 2016).

2. Beneficiaries of the Statute.

Under statutes declaring unregistered instruments, required by law to be registered, void as to creditors and purchasers, such unregistered instruments were void only as against the creditors and purchasers of the grantor, and not as against those of the grantee. Crenshaw v. Anthony, 8 Tenn. 101, 8 Tenn. 102, 1827 Tenn. LEXIS 17 (1827); Morgan v. Elam, 12 Tenn. 374, 12 Tenn. 375, 1833 Tenn. LEXIS 73 (1833); Bradshaw v. Thomas, 15 Tenn. 497, 1835 Tenn. LEXIS 34 (1835); Baldwin v. Baldwin, 21 Tenn. 473, 1841 Tenn. LEXIS 49 (1841); Hughes v. Cannon, 21 Tenn. 589, 1841 Tenn. LEXIS 75 (1841); Ocoee Bank v. Nelson, 41 Tenn. 186, 1860 Tenn. LEXIS 43 (1860); Leech v. Hillsman, 76 Tenn. 747, 1882 Tenn. LEXIS 5 (1882); Bryant v. Bank of Charleston, 107 Tenn. 560, 64 S.W. 895, 1901 Tenn. LEXIS 109 (1901); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904). See Wright v. Black, 159 Tenn. 254, 17 S.W.2d 917, 1928 Tenn. LEXIS 81, 65 A.L.R. 357 (1929); Marlin v. Merrill, 25 Tenn. App. 328, 156 S.W.2d 814, 1941 Tenn. App. LEXIS 113 (Tenn. Ct. App. 1941).

Creditor of the heir of the maker of an invalidly registered deed is not a beneficiary of the statute even though he be a judgment creditor. Literer v. Huddleston, 52 S.W. 1003, 1898 Tenn. Ch. App. LEXIS 174 (Tenn. Ch. App. 1898).

It is only creditors of, or bona fide purchasers from, the maker of an unregistered deed, that are so protected. Neither creditors of his heir nor purchasers from his heir are beneficiaries of the statute. Wright v. Black, 159 Tenn. 254, 17 S.W.2d 917, 1928 Tenn. LEXIS 81, 65 A.L.R. 357 (1929).

Where the purchaser of an automobile had the bill of sale made in his sister's name but did not register the bill of sale the title passed directly to the sister and was never in the purchaser and the only person who could take advantage of the failure to register the bill of sale would be a creditor or bona fide purchaser of the seller of the auto. Marlin v. Merrill, 25 Tenn. App. 328, 156 S.W.2d 814, 1941 Tenn. App. LEXIS 113 (Tenn. Ct. App. 1941).

Where debtor conveyed land but no deed witnessing the transaction was recorded at the time of attachment of land by a creditor, the unrecorded deed was void and nonexistent as to the creditor and the debtor remained the owner of the land as far as such creditor was concerned. Moore v. Walker, 178 Tenn. 218, 156 S.W.2d 439, 1941 Tenn. LEXIS 48 (1941).

Only creditors of or bona fide purchasers from the makers of an unrecorded deed may disregard such instrument. Adrian v. Brown, 29 Tenn. App. 236, 196 S.W.2d 118, 1946 Tenn. App. LEXIS 68 (1946).

Because Federal Home Loan Mortgage Corporation's (Freddie Mac) priority rights through a deed of trust it held on real estate were effective before holder of vendor lien filed lien lis pendens, Freddie Mac's deed of trust was given priority pursuant to T.C.A. § 66-26-103 since Freddie Mac qualified as a bona fide purchaser. Greene v. Ellis, 152 B.R. 211, 1993 Bankr. LEXIS 439 (Bankr. E.D. Tenn. 1993).

3. “Bona Fide Purchasers” Defined — Examples.

The term “bona fide purchasers,” used in this section, means purchasers without notice, and no technical meaning is to be given to the term, as is ordinarily done in courts of chancery. Martin v. Lincoln, 72 Tenn. 334, 1880 Tenn. LEXIS 25 (1880); J. & A. Simpkinson & Co. v. McGee, 72 Tenn. 432, 1880 Tenn. LEXIS 39 (1880); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

A conveyance of land in payment of an antecedent debt does not entitle the grantee to protection as an innocent purchaser. Jarman v. Farley, 75 Tenn. 141, 1881 Tenn. LEXIS 88 (1881), overruled, Robinson v. Owens, 103 Tenn. 91, 52 S.W. 870, 1899 Tenn. LEXIS 90 (1899), overruled in part, Robinson v. Owens, 103 Tenn. 91, 52 S.W. 870, 1899 Tenn. LEXIS 90 (1899); Anderson v. Ammonett, 77 Tenn. 1, 1882 Tenn. LEXIS 7 (1882); Robinson v. Owens, 103 Tenn. 91, 52 S.W. 870, 1899 Tenn. LEXIS 90 (1899). But see Grotenkemper v. Carver, 77 Tenn. 280, 1882 Tenn. LEXIS 50 (1882).

A bona fide purchaser is one for value, and not a fraudulent purchaser or volunteer; and a purchaser without notice means one without actual knowledge of the prior unregistered deed. Worley v. State, 75 Tenn. 382, 1881 Tenn. LEXIS 130 (1881).

The possession of the grantee under his unregistered deed is notice to a subsequent purchaser of his right, and the title of the prior grantee under such circumstances is the better title. Davis v. Cross, 82 Tenn. 637, 1885 Tenn. LEXIS 5, 52 Am. Rep. 177 (1885).

Where a lumber dealer made purchases and sales of lumber in his own name, giving bills of sale to an investment company financing such purchases, the financing company was not a bona fide purchaser as against a trustee in bankruptcy when the agreement between the bankrupt and the financing company was not recorded and the bankrupt retained the sole possession of the lumber and a designated compensation was to be paid the company for financing purchases. Hyman v. Semmes, 26 F.2d 10, 1928 U.S. App. LEXIS 3585 (6th Cir. 1928).

Under the recording statutes a prior unrecorded deed will take precedence over a subsequent deed to a donee although the subsequent deed is recorded first. Gregg v. Link, 774 S.W.2d 174, 1988 Tenn. App. LEXIS 559 (Tenn. Ct. App. 1988), appeal denied, 1989 Tenn. LEXIS 303 (Tenn. June 5, 1989).

A bona fide purchaser is a purchaser for value without knowledge or notice of material facts to the title. Greene v. Ellis, 152 B.R. 211, 1993 Bankr. LEXIS 439 (Bankr. E.D. Tenn. 1993).

4. Purchasers under Deeds with Exclusion Clauses.

A purchaser claiming under a deed containing a clause excluding older and better title would not be burdened with the duty of making inquiry or investigation for prior conveyance outside of and beyond the registration books in the absence of actual notice communicated from some other source, for purchasers claiming under deeds which contain exclusion clauses are purchasers the same as those claiming under deeds without such clauses. Kobbe v. Harriman Land Co., 139 Tenn. 251, 201 S.W. 762, 1917 Tenn. LEXIS 103 (1917).

It is the duty of one who purchases directly under a deed containing a clause excluding older and better title to search the public records for prior deeds or other instruments affecting the title. Kobbe v. Harriman Land Co., 139 Tenn. 251, 201 S.W. 762, 1917 Tenn. LEXIS 103 (1917).

Burden of showing that a purchaser under a deed containing such exclusion clause had actual notice of a prior unrecorded deed would be on the party asserting such fact. Kobbe v. Harriman Land Co., 139 Tenn. 251, 201 S.W. 762, 1917 Tenn. LEXIS 103 (1917).

The immediate purchaser from one having a deed containing a clause excluding older and better titles would not be bound to search the records of the old county after the land embraced by the deed had been transferred by the legislature to a new county. Kobbe v. Harriman Land Co., 139 Tenn. 251, 201 S.W. 762, 1917 Tenn. LEXIS 103 (1917).

5. Creditors — Status — Scope of Term.

A creditor of a grantor does not acquire rights under this section superior to a bona fide purchaser of land until the claim has been established by a judgment at law or decree in chancery. Chester v. Greer, 24 Tenn. 26, 1844 Tenn. LEXIS 5 (1844); Hopkins v. Webb, 28 Tenn. 519, 1848 Tenn. LEXIS 115 (1848); Cowan, McClung & Co. v. Gill, 79 Tenn. 674, 1883 Tenn. LEXIS 125 (1883); Rode & Horn v. Phipps, 195 F. 414, 1912 U.S. App. LEXIS 1386 (6th Cir. Tenn. 1912); Savings, Bldg. & Loan Ass'n v. McLain, 18 Tenn. App. 292, 76 S.W.2d 650, 1934 Tenn. App. LEXIS 32 (1934); In re Willoughby, 95 F.2d 932, 1938 U.S. App. LEXIS 4254 (6th Cir. 1938), cert. denied, 305 U.S. 605, 59 S. Ct. 65, 83 L. Ed. 384, 1938 U.S. LEXIS 728 (1938), cert. denied, Berry v. Austin, 305 U.S. 605, 59 S. Ct. 65, 83 L. Ed. 384, 1938 U.S. LEXIS 728 (1938).

A creditor taking a conveyance from his debtor, to secure his debt, is not a mere volunteer standing in the shoes of his grantor and affected with notice to him, but he stands on an equal footing with an innocent purchaser, or a purchaser without notice. Martin v. Lincoln, 72 Tenn. 334, 1880 Tenn. LEXIS 25 (1880); J. & A. Simpkinson & Co. v. McGee, 72 Tenn. 432, 1880 Tenn. LEXIS 39 (1880); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904); Thomas v. Setliffe, 160 Tenn. 689, 28 S.W.2d 344, 1929 Tenn. LEXIS 143 (1930). See Hunt v. Curry, 153 Tenn. 11, 282 S.W. 201, 1925 Tenn. LEXIS 2 (1925).

All estates subject to execution shall be subject to the claims of the creditors of the grantor, unless they are defeated by a conveyance duly registered or properly noted; and a purchaser, without notice, who gets a conveyance first, and has it registered, prevails over another less diligent. Martin v. Lincoln, 72 Tenn. 334, 1880 Tenn. LEXIS 25 (1880).

The law authorizing the bringing of suits by creditors without judgment attacking conveyances to hinder and delay creditors does not change or affect the application of the rule under this section that creditors mean judgment creditors. Cowan, McClung & Co. v. Gill, 79 Tenn. 674, 1883 Tenn. LEXIS 125 (1883).

An unregistered deed is void as against creditors, notwithstanding they are creditors subsequent to such deed and have actual knowledge thereof. City Nat'l Bank & Trust Co. v. City of Knoxville, 158 Tenn. 143, 11 S.W.2d 853, 1928 Tenn. LEXIS 134 (1928).

The filing of a creditor's bill and the appointment of a receiver of trust estate property take precedence over a deed conveying a trust property made before, but not registered until after, the appointment of the receiver. Butcher v. Howard, 715 S.W.2d 601, 1986 Tenn. App. LEXIS 2927 (Tenn. Ct. App. 1986).

6. —Creditors Seeking to Set Aside Fraudulent Conveyance.

Where in proceeding in chancery alleging a fraudulent conveyance creditors who had not obtained a judgment obtained a levy of attachment on a farm where the deed conveying the property had been probated but not registered, the rights of the parties were not determined by this section but by § 29-12-101 allowing creditors to file bill in chancery to set aside fraudulent conveyances without having first obtained a judgment at law. Therefore it was not necessary for such creditors to first reduce their claims to judgment and the creditors obtained a lien superior to the unrecorded deed even though they may have had knowledge of the conveyance, and their lien was subject to be defeated only by failure to establish the debt or the fraud. Bradley v. Boyd, 168 Tenn. 141, 76 S.W.2d 318, 1934 Tenn. LEXIS 31 (1934). See Greene v. Starnes, 48 Tenn. 582, 1870 Tenn. LEXIS 117 (1870).

7. Necessity of Registration.

An unregistered lien or mortgage on personalty is null and void as against bona fide purchasers from the maker, without notice. Byrd v. Wilcox, 67 Tenn. 65, 1874 Tenn. LEXIS 329 (1874).

A private right of way deed is within the statute. Worley v. State, 75 Tenn. 382, 1881 Tenn. LEXIS 130 (1881).

The registration of a general assignment made in this state is essential to render it effectual as against attaching creditors of the assignor; and the registration must be of the entire and perfected instrument. Lookout Bank v. Noe, 86 Tenn. 21, 5 S.W. 433, 1887 Tenn. LEXIS 19 (1887); Douglas v. Bank of Commerce, 97 Tenn. 133, 36 S.W. 874, 1896 Tenn. LEXIS 122 (1896).

A foreign general assignment conveying personalty situated in this state, and not registered in this state, is not effectual as against subsequent attachments of such personalty by the assignor's creditors. Douglas v. Bank of Commerce, 97 Tenn. 133, 36 S.W. 874, 1896 Tenn. LEXIS 122 (1896).

Unrecorded quitclaim deed is void as against creditors. McQuiddy Printing Co. v. Hirsig, 23 Tenn. App. 434, 134 S.W.2d 197, 1939 Tenn. App. LEXIS 52 (Tenn. Ct. App. 1939).

A deed of trust which is improperly acknowledged because it lacks an official notary's seal is not legally registered and is null and void as to subsequent creditors or bona fide purchasers without notice under T.C.A. § 66-26-103. Limor v. Fleet Mortg. Group (In re Marsh), 12 S.W.3d 449, 2000 Tenn. LEXIS 58 (Tenn. 2000).

8. —Transactions Not Within Registration Laws.

Where the manager of a farm by contract with the owner is to have a lien on the crops raised by him for his annual wages, such contract need not be registered, because the manager has the possession of the crops, and the right to hold on to them until his wages are paid. Tedford v. Wilson, 40 Tenn. 311, 1859 Tenn. LEXIS 84 (1859); Jones v. Chamberlin, 52 Tenn. 210, 1871 Tenn. LEXIS 252 (1871).

The pledge of cattle to secure the money borrowed to purchase them, with possession left with the pledgor who has to sell them and pay the money to the lender, is valid and enforceable, notwithstanding there is no registered contract. Wharton v. Lavender, 82 Tenn. 178, 1884 Tenn. LEXIS 118 (1884).

A parol reservation of title to secure money advanced by a warehouseman to purchase personalty is valid and enforceable. Grange Warehouse Ass'n v. Owen, 86 Tenn. 355, 7 S.W. 457, 1887 Tenn. LEXIS 53 (1888).

A parol partition of land is not within the statute of frauds, and is not susceptible of registration, and therefore not within the registration laws, and is binding upon the parties and their creditors, and especially creditors who obtained judgments after the partition, and after the right of homestead was thus created in the head of a family. Meacham v. Meacham, 91 Tenn. 532, 19 S.W. 757, 1892 Tenn. LEXIS 26 (1892); McBroom v. Whitefield, 108 Tenn. 422, 67 S.W. 794, 1901 Tenn. LEXIS 43 (1902).

A private trust agreement is not one of the instruments that may be registered under § 66-24-101, and because of that fact it is not void as to creditors because of the effect of T.C.A. § 66-26-103. Green v. Hooton, 624 S.W.2d 898, 1981 Tenn. App. LEXIS 555 (Tenn. Ct. App. 1981).

9. Notice — Persons Affected — Effect.

Subsequent purchasers are affected by actual notice or knowledge of prior unregistered conveyances or encumbrances, and though their deeds may be first registered, they will be postponed as against such prior grantees or encumbrancers. Knowles v. Masterson, 22 Tenn. 619, 1842 Tenn. LEXIS 162 (1842); Myers v. Ross, 40 Tenn. 59, 1859 Tenn. LEXIS 19 (1859); Kirkpatrick v. Ward, 73 Tenn. 434, 1880 Tenn. LEXIS 157 (1880); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912).

Creditors are not affected by actual notice of unregistered assignments. Lookout Bank v. Noe, 86 Tenn. 21, 5 S.W. 433, 1887 Tenn. LEXIS 19 (1887).

Unregistered instruments take effect and are equally as good as registered instruments as against the grantors, their heirs and representatives, and as to all persons who have actual notice of them, from the date of such notice, except the levying creditors of the grantors, as to whom they are inoperative and practically nonexistent until they are noted for registration. Southern Bank & Trust Co. v. Folsom, 75 F. 929, 1896 U.S. App. LEXIS 2079 (6th Cir. 1896); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904); Campbell v. Home Ice & Coal Co., 126 Tenn. 524, 150 S.W. 427, 1912 Tenn. LEXIS 75 (1912).

Where a second trust deed referred to a former one as a prior encumbrance, the beneficiary of the second under the evidence was chargeable with actual notice of the prior encumbrance, though such trust deed was defectively acknowledged. Hunt v. Curry, 153 Tenn. 11, 282 S.W. 201, 1925 Tenn. LEXIS 2 (1925).

Creditors of grantee under instrument creating an equitable lien for purchase money are charged with notice of due registration thereof, although they had no actual notice and would not have been affected thereby in any event because of defective acknowledgment. Hunt v. Curry, 153 Tenn. 11, 282 S.W. 201, 1925 Tenn. LEXIS 2 (1925).

A deed is not effectual against creditors, even with actual notice of an unregistered instrument, until placed of record. Where purchasers pay for and acquire good title to lot, but, by neglecting to record their deed, make it possible for their vendor's creditor to fasten a lien upon it, the creditor has the superior lien. McCoy v. Hight, 162 Tenn. 507, 39 S.W.2d 271, 1930 Tenn. LEXIS 115 (Tenn. Dec. 1930).

Subsequent mortgagees with notice stand in the same position as subsequent purchasers with notice and are not protected by this section against previous defectively acknowledged deeds. Savings, Bldg. & Loan Ass'n v. McLain, 18 Tenn. App. 292, 76 S.W.2d 650, 1934 Tenn. App. LEXIS 32 (1934).

In action to restrain sale of realty because of unrecorded contract to sell to complainant, evidence established notice of contract so as to prevent purchaser and title guarantee company from being bona fide purchasers. Williams v. Title Guar. & Trust Co., 31 Tenn. App. 128, 212 S.W.2d 897, 1948 Tenn. App. LEXIS 77 (1948).

A purchaser with notice of another's rights in or to the thing purchased is in equity liable to the owner of those rights to the same extent and in the same manner as the person from whom he made the purchase. Branstetter v. Poynter, 32 Tenn. App. 189, 222 S.W.2d 214, 1949 Tenn. App. LEXIS 91 (Tenn. Ct. App. 1949).

“Owner's Consent to Pledge of Collateral” was null and void as to a new lender because it lacked actual notice of the agreement; the new lender did not have inquiry notice because nothing in a Georgia state-chartered bank's deed of trust indicated or suggested that further inquiry was necessary, and there was no proof that the bank ever referenced the Owner's Consent in any of its communications with the mortgagor and his brother prior to the closing of the new loan. Vinings Bank v. Homeland Cmty. Bank, — S.W.3d —, 2019 Tenn. App. LEXIS 327 (Tenn. Ct. App. June 28, 2019).

10. —Purchasers Duty to Inquire.

The duty to inquire need not be based on recorded documents, but facts outside the recorded documents may impose on the potential buyer the duty to inquire. In re Don Williams Constr. Co., 143 B.R. 865, 1992 Bankr. LEXIS 1261 (Bankr. E.D. Tenn. 1992).

11. Registration Before Creditors' Lien Secured.

A husband's deed conveying lands to his wife is valid and effectual against his creditors, although its registration was long delayed, if it was made originally in good faith, and was withheld from registration without fraud, and actually registered before his creditors had secured any lien upon the property. Phoenix Fire & Marine Ins. Co. v. Shoemaker, 95 Tenn. 72, 31 S.W. 270, 1895 Tenn. LEXIS 65 (1895).

12. Registered Title Bond.

Land held under a properly registered title bond is not subject to levy and sale under execution or attachment against the vendor, so as to defeat the interest already acquired by the vendee; and the purchaser at such a sale would hold only the naked legal title as trustee for the vendee under the title bond. Merriman v. Polk, 52 Tenn. 717, 1871 Tenn. LEXIS 302 (1871); Irvy Morgan & Co. v. Snell, 62 Tenn. 382, 1874 Tenn. LEXIS 64 (1874).

13. Registered Voluntary Deed — Effect Against Purchaser.

A registered voluntary deed of conveyance of personalty or realty, made without fraud, will prevail against a subsequent purchaser for value, without actual notice thereof. Marshall v. Booker, 9 Tenn. 13, 1820 Tenn. LEXIS 10 (1820); Bank of United States v. Lee, 38 U.S. 107, 10 L. Ed. 81, 1839 U.S. LEXIS 419 (1839); Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

A voluntary deed of conveyance of land, made to defraud a subsequent purchaser for value, is void as against him, with or without registration, and with or without notice. Laird v. Scott, 52 Tenn. 314, 1871 Tenn. LEXIS 267 (1871); Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

14. Registration After Maker's Death.

A deed of trust is operative against the maker's other creditors, where it was executed and delivered before his death, though not registered until afterwards, for the deed, upon its registration, related back to its date. Gwynne v. Estes, 82 Tenn. 662, 1885 Tenn. LEXIS 9 (1885).

15. Lien Acquired Before Death of Insolvent.

A lien acquired in the lifetime of a decedent will be enforced against the property, though the estate of such decedent is insolvent. Kinsey v. McDearmon, 45 Tenn. 392, 1868 Tenn. LEXIS 20 (1868); Watson v. Watson, 60 Tenn. 387, 1872 Tenn. LEXIS 518 (1873); McGuffey v. Johnson, 77 Tenn. 555, 1882 Tenn. LEXIS 100 (1882); Gwynne v. Estes, 82 Tenn. 662, 1885 Tenn. LEXIS 9 (1885); Lookout Bank v. Susong, 90 Tenn. 590, 18 S.W. 389, 1891 Tenn. LEXIS 48 (1891).

16. Registration After Prior Deed Registered.

Registration of a deed after the land has been conveyed by a registered deed to a bona fide purchaser is without efficacy. Kobbe v. Harriman Land Co., 139 Tenn. 251, 201 S.W. 762, 1917 Tenn. LEXIS 103 (1917).

17. Reregistration.

The reregistration of a deed originally registered upon a defective certificate of acknowledgment or probate does not relate back, but takes effect as of the date of the reregistration, as against the creditors of the grantor. Citizens' Bank of Jellico v. McCarty, 99 Tenn. 469, 42 S.W. 4, 1897 Tenn. LEXIS 53 (1897); Southern Bldg. & Loan Ass'n v. Rodgers, 104 Tenn. 437, 58 S.W. 234, 1900 Tenn. LEXIS 14 (1900).

18. Defectively Recorded Certificate — Effect.

When a deed has in fact been properly executed and acknowledged and has attached the certificate of the officer in lawful form and duly executed, it is then entitled to registration, and a defective recording of the certificate merely does not render deed null and void as to existing or subsequent creditors of, or bona fide purchasers from, the grantor without notice. Wilkins v. Reed, 156 Tenn. 321, 300 S.W. 588, 1927 Tenn. LEXIS 121 (1927).

19. Levy on Land Held under Unregistered Deed.

For cases in which land was subjected to the payment of the debts of the grantee, see Vance's Heirs v. M'Nairy, 11 Tenn. 170, 1832 Tenn. LEXIS 34 (1832), limited, Helms v. Alexander, 29 Tenn. 44, 1849 Tenn. LEXIS 4 (1849); Shields v. Mitchell, 18 Tenn. 1, 1836 Tenn. LEXIS 95 (1836); Rochell v. Benson, Hunt & Co.'s Lessee, 19 Tenn. 3, 1838 Tenn. LEXIS 2 (1838); Simmons v. McKissick, 25 Tenn. 259, 1845 Tenn. LEXIS 74 (1845); Wilkins v. May, 40 Tenn. 173, 1859 Tenn. LEXIS 47 (1859); Coward v. Culver, 59 Tenn. 540, 1873 Tenn. LEXIS 107 (1873); Bridges v. Cooper, 98 Tenn. 394, 39 S.W. 723, 1896 Tenn. LEXIS 233 (1897); Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

For cases in which land was subjected to the payment of the debts of the grantor see Stanley v. Nelson & Dickinson, 23 Tenn. 484, 1844 Tenn. LEXIS 145 (1844); Butler v. Maury, 29 Tenn. 420, 1850 Tenn. LEXIS 3 (1850); Hervey & New v. Champion, 30 Tenn. 569, 1851 Tenn. LEXIS 106 (1851); Kinsey v. McDearmon, 45 Tenn. 392, 1868 Tenn. LEXIS 20 (1868); Charles v. Taylor, 48 Tenn. 528, 1870 Tenn. LEXIS 105 (1870); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Buchanan v. Kimes, 61 Tenn. 275, 1872 Tenn. LEXIS 370 (1872); McCoy v. Dail, 65 Tenn. 137, 1873 Tenn. LEXIS 321 (1873); Lyle v. Longley, 65 Tenn. 286, 1873 Tenn. LEXIS 346 (1873); Sanders v. Everett, 3 Cooper's Tenn. Ch. 520 (1877); Miller, Stewart & Co. v. O'Bannon, 72 Tenn. 398, 1880 Tenn. LEXIS 33 (1880); Lookout Bank v. Noe, 86 Tenn. 21, 5 S.W. 433, 1887 Tenn. LEXIS 19 (1887); Thomas v. Setliffe, 160 Tenn. 689, 28 S.W.2d 344, 1929 Tenn. LEXIS 143 (1930).

Land held under an unregistered title bond is subject to levy and sale under execution or attachment against the vendor, and to the judgment lien, as the property of the vendor; but it cannot be levied on and sold under an execution or attachment at law against the vendee, because there is no legal title in him, and only an equitable title, which can be subjected to the payment of his debts by proper proceedings in chancery. Lane v. Marshall, 48 Tenn. 30, 1870 Tenn. LEXIS 10 (1870); Charles v. Taylor, 48 Tenn. 528, 1870 Tenn. LEXIS 105 (1870); Lyle v. Longley, 65 Tenn. 286, 1873 Tenn. LEXIS 346 (1873); Daniel v. Baxter, 69 Tenn. 630, 1878 Tenn. LEXIS 146 (1878).

Land sold by unregistered deed is liable to execution for debts of the vendor, so long as the deed remains unregistered, though the debt was contracted after the execution of the deed, and with knowledge thereof. Malone v. Brown, 46 S.W. 1004 (Tenn. Ch. App. 1897).

While land held under an unregistered deed may be levied upon against the vendor and vendee, respectively, yet very different results follow in the two cases. As to the execution and attachment creditors of the grantor, a deed is null and void for lack of registration, but it is otherwise as to the creditors of the grantee. The rights of the creditors of the grantee are not fixed by our registration laws, but depend upon rules established independent of these laws. The grantee's creditors would secure, by such levy, only such interest as the grantee actually had in the land at the date of the levy. Bryant v. Bank of Charleston, 107 Tenn. 560, 64 S.W. 895, 1901 Tenn. LEXIS 109 (1901). See Hood v. Hogue, 131 Tenn. 421, 175 S.W. 531, 1916D Ann. Cas. 383, 1914 Tenn. LEXIS 117 (1914).

Land held under unregistered deed is subject to levy and judgment lien against either the grantor or grantee even in the case of subsequent creditors with actual knowledge. City Nat'l Bank & Trust Co. v. City of Knoxville, 158 Tenn. 143, 11 S.W.2d 853, 1928 Tenn. LEXIS 134 (1928).

Land held under an unregistered deed of conveyance is subject to levy and sale under an attachment or execution, and to the judgment lien, as the property of either the grantor or grantee. City Nat'l Bank & Trust Co. v. City of Knoxville, 158 Tenn. 143, 11 S.W.2d 853, 1928 Tenn. LEXIS 134 (1928).

Where judgment lien attached to property before deed conveying such property was recorded and such lien was enforced by execution within the prescribed time although the levy of the execution did not take place until after the recording of such deed, the title of the purchaser at the execution sale was acquired pursuant to the judgment lien and was therefore superior to the title conveyed by the deed. Hames v. Archer Paper Co., 45 Tenn. App. 1, 319 S.W.2d 252, 1958 Tenn. App. LEXIS 108 (Tenn. Ct. App. 1958).

A debtor's unrecorded contract to transfer land is not effective against a judgment lien creditor of the debtor, even if the creditor knew of the contract before obtaining its judgment lien. In re Don Williams Constr. Co., 143 B.R. 865, 1992 Bankr. LEXIS 1261 (Bankr. E.D. Tenn. 1992).

20. Registration after Levy.

The registration of a mortgage, or its reregistration after a defective and invalid registration, made after a levy upon the mortgaged land by the mortgagor's creditor, is ineffectual to defeat such levy. Southern Bldg. & Loan Ass'n v. Rodgers, 104 Tenn. 437, 58 S.W. 234, 1900 Tenn. LEXIS 14 (1900).

Where owner sold land prior to the time that an attachment bill was filed and attachment levied on such land but where the deed of conveyance was not recorded until two days after the attachment was issued and levied, such deed was void as against the attaching creditor and the grantor remained the owner of the land as far as such creditor was concerned. Moore v. Walker, 178 Tenn. 218, 156 S.W.2d 439, 1941 Tenn. LEXIS 48 (1941).

21. Deed Absolute on Face Intended as Mortgage.

Where the conveyance of land is absolute on its face, but was intended as a mortgage, and is so held, it is not subject to levy of an execution against such grantee, especially after satisfaction on such debt; and where a judgment creditor of the grantee levies an execution on the land, and, at the sale, becomes the purchaser, he obtains no title as against the conveyor, the real owner, because he can obtain no better or higher title than this debtor had. Leech v. Hillsman, 76 Tenn. 747, 1882 Tenn. LEXIS 5 (1882); Colyar v. Capital City Bank, 103 Tenn. 723, 54 S.W. 977, 1899 Tenn. LEXIS 151 (1899).

22. Relative Rights on Release of Mortgage.

Where complainant purchased land covered by a mortgage taking deed and a release by the mortgagee, indorsed on the deed, but the deed with indorsement was not filed for registration until after a lien attached on judgment against the vendor and mortgagor, the complainant's rights were superior to those of such lien creditor. The release did not cause legal title to revert to mortgagor. Anderson v. Robertson, 137 Tenn. 182, 192 S.W. 917, 1916 Tenn. LEXIS 68 (1917).

Trial court improperly granted summary judgment under Tenn. R. Civ. P. 56.04 to plaintiff in a suit in which it sought a declaratory judgment establishing the priority of its judgment lien because defendant had mistakenly released a prior deed of trust on the property in question and restoring the deed of trust to its priority position would not prejudice plaintiff's rights; although plaintiff's judgment lien was properly recorded under T.C.A. § 25-5-101 and became effective against later acquired interests under § 25-5-101 and T.C.A. § 66-24-119, and notwithstanding the fact that the mistaken release resulted in an equitable lien subject to the recording and notice provisions under T.C.A. § 66-26-101 and T.C.A. § 66-26-103, plaintiff was still entitled to seek the equitable remedy of cancellation of the release. Holiday Hospitality Franchising, Inc. v. States Res., Inc., 232 S.W.3d 41, 2006 Tenn. App. LEXIS 787 (Tenn. Ct. App. Dec. 14, 2006), appeal denied, Holiday Hospitality Franchising v. States Res., Inc.,  — S.W.3d —, 2007 Tenn. LEXIS 445 (Tenn. Apr. 30, 2007).

23. Bankruptcy Cases.

The rights of a seller under an unrecorded installment land sale contract are superior to those of the buyer's trustee in bankruptcy. In re Johnson, 9 B.R. 14, 1981 Bankr. LEXIS 4954 (Bankr. M.D. Tenn. 1981).

A bona fide purchaser will take free of a prior unrecorded deed or contract only if the bona fide purchaser did not have notice of it. A bankruptcy trustee is not bound by his own personal knowledge or a creditor's knowledge of a prior unrecorded contract or transfer by the debtor, 11 U.S.C. § 544(a)(3); however, the trustee is treated as having notice if, under Tennessee law, the facts would put a purchaser on notice. In re Don Williams Constr. Co., 143 B.R. 865, 1992 Bankr. LEXIS 1261 (Bankr. E.D. Tenn. 1992).

The Chapter 7 trustee's status as a judgment lien creditor under 11 U.S.C. § 544 defeats an unrecorded deed of trust. The trustee prevails because under Tennessee law an unrecorded deed of trust is null and void as to a judgment lien creditor. Waldschmidt v. Dennis (In re Muller), 185 B.R. 552, 1995 Bankr. LEXIS 1143 (Bankr. M.D. Tenn. 1995).

The authority of a bankruptcy trustee, as a hypothetical judicial lien creditor, to take advantage of the strong arm clause, 11 U.S.C. § 544(a), prevailed over the holder of an unregistered deed of trust. Walker v. Elman (In re Fowler), 201 B.R. 771, 1996 Bankr. LEXIS 1293 (Bankr. E.D. Tenn. 1996).

District court properly affirmed a bankruptcy court decision in favor of Chapter 7 trustee, who claimed that a deed of trust held by a creditor of debtors was invalid because the deed of trust acknowledgment form omitted the names of debtors. Gregory v. Ocwen Fed. Bank (In re Biggs), 377 F.3d 515, 2004 FED App. 250P, 2004 U.S. App. LEXIS 15588 (6th Cir. Tenn. 2004).

24. Divorce Decree.

Former wife must register her divorce decree to perfect her occupancy interest against creditors of her former husband. Lancaster v. Hurst, 27 B.R. 740, 1983 Bankr. LEXIS 6818 (Bankr. E.D. Tenn. 1983).

25. Federal Tax Lien.

Bank's equitable lien could not take priority over the Internal Revenue Services's federal tax lien because equitable liens did not meet the definition of “security interest” in 26 U.S.C. § 6323(h)(1) given that equitable liens were subject to a number of hypothetical subsequent judgment liens under T.C.A. § 66-26-103. Regions Bank v. United States, — F. Supp. 2d —, 2013-1 U.S. Tax Cas. (CCH) P50, 197; 111 A.F.T.R.2d (RIA) 843, 2013 U.S. Dist. LEXIS 23278 (E.D. Tenn. Feb. 20, 2013).

66-26-104. Rights as between transferee of decedent and purchaser from heir or devisee.

Any such instrument entitled to registration which is not duly registered prior to the expiration of sixty (60) days following the death of the maker of any such instrument shall be null and void as to innocent purchasers for a present valuable consideration from such person or persons as would, but for the execution of the instrument by the decedent, succeed to the rights of the decedent to such property in respect to which such unrecorded instrument was executed; provided, that the holder or any person entitled to the benefit of any such unrecorded instrument shall have a right of action against any such transferors for the reasonable value of any such property transferred, to the extent of the interest of the holder in the property, if brought within one (1) year of the recording of the instrument made by such transferors, if the instrument by which the transfer is made is required to be recorded for the protection of the purchaser under the laws of this state, otherwise the action shall be brought within one (1) year from the consummation of such sale or transfer.

Acts 1937, ch. 122, § 1; C. Supp. 1950, § 7668; T.C.A. (orig. ed.), § 64-2604; Acts 1987, ch. 276, § 1.

Cross-References. Unregistered instruments void as to creditors and bona fide purchasers, § 66-26-103.

Textbooks. Tennessee Jurisprudence, 3 Tenn. Juris., Assignments for the Benefit of Creditors, § 22; 18 Tenn. Juris., Marriage Contracts and Settlements, § 7; 21 Tenn. Juris., Recording Acts, §§ 3, 6, 8, 15.

Law Reviews.

Article Nine Deficiency Sales: The Windfall Factor (Mark Nelson Miller), 7 Mem. St. U.L. Rev. 475 (1977).

NOTES TO DECISIONS

1. Applicability.

Where defendants were not innocent purchasers for a present valuable consideration and where, defendants paid no money for subject property, and it was intended as a gift from the grantor, defendants were not entitled to protection under T.C.A. § 66-26-104. Hulsey v. Bush, 839 S.W.2d 411, 1992 Tenn. App. LEXIS 340 (Tenn. Ct. App. 1992).

2. Purpose of Section.

The legislature obviously did not intend to extend the protection of the 1937 Act to grantees who were not purchasers for value without notice, nor did it take any steps to include such persons within the protection of the existing recording statutes. Gregg v. Link, 774 S.W.2d 174, 1988 Tenn. App. LEXIS 559 (Tenn. Ct. App. 1988), appeal denied, 1989 Tenn. LEXIS 303 (Tenn. June 5, 1989).

3. Legislative Intent.

The legislature did not intend to extend the protection of T.C.A. § 66-26-104, to grantees who were not purchasers for value without notice, nor did it take any steps to include such persons within the protection of the existing recording statutes. Hulsey v. Bush, 839 S.W.2d 411, 1992 Tenn. App. LEXIS 340 (Tenn. Ct. App. 1992).

4. Deed Made Prior to Enactment of Section.

The requirement of this section as to the filing of an unregistered deed after the death of the maker cannot be given a retrospective interpretation, and the title of the holder of an unregistered deed from a maker made prior to the time of this section had better title than the holder of a registered deed from the heir of the maker of the original deed made after the effective date of the statute. Harris v. Williford, 179 Tenn. 299, 165 S.W.2d 582, 1942 Tenn. LEXIS 24 (1942).

66-26-105. Priority of registered instruments.

Any instruments first registered or noted for registration shall have preference over one of earlier date, but noted for registration afterwards; unless it is proved in a court of equity, according to the rules of the court, that the party claiming under the subsequent instrument had full notice of the previous instrument.

Code 1858, § 2074 (deriv. Acts 1831, ch. 90, § 6; 1841-1842, ch. 12, § 2); Shan., § 3751; Code 1932, § 7667; T.C.A. (orig. ed.), § 64-2605.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 98.

Tennessee Jurisprudence, 19 Tenn. Juris., Mortgages and Deeds of Trust, § 20; 21 Tenn. Juris., Recording Acts, §§ 5, 13, 15.

Law Reviews.

Recent Decision, The Tennessee Court of Appeals Interprets the Tennessee Recording Statutes, Gregg v. Link, (1989), 56 Tenn. L. Rev. 777 (1989).

Attorney General Opinions. To the extent that it conflicts with the Uniform Administrative Procedures Act (UAPA), T.C.A. § 67-1-105(d) is superseded by the UAPA, OAG 02-071, 2002 Tenn. AG LEXIS 76 (5/29/02).

NOTES TO DECISIONS

1. Purpose.

T.C.A. § 66-26-105 was designed to avoid inequity, not to create or promote it. Watson v. Watson, 658 S.W.2d 132, 1983 Tenn. App. LEXIS 613 (Tenn. Ct. App. 1983).

T.C.A. § 66-26-105 was not designed to settle boundary line disputes, but was primarily intended to resolve the situation created by a dishonest landowner who knowingly or negligently conveys the same land more than once. Watson v. Watson, 658 S.W.2d 132, 1983 Tenn. App. LEXIS 613 (Tenn. Ct. App. 1983).

2. Relation to Other Sections.

This section gives preference to instruments in the order of registration, subject only to the condition of the want of notice of the prior equity. Section 66-26-103 declares the effect of an unregistered instrument as against bona fide purchasers of the grantor without notice and as against his creditors. The two provisions are not in conflict, nor does either necessarily control the other. J. & A. Simpkinson & Co. v. McGee, 72 Tenn. 432, 1880 Tenn. LEXIS 39 (1880).

This section applies the rules and principles contained in §§ 66-26-101 and 66-26-102 to the case of rival instruments. Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904); Roysdon v. Terry, 4 Tenn. App. 638, — S.W. —, 1927 Tenn. App. LEXIS 214 (Tenn. Ct. App. 1927).

3. Transactions Covered.

This section embraces mortgages and deeds of trust, and their registration is constructive notice. Knowles v. Masterson, 22 Tenn. 619, 1842 Tenn. LEXIS 162 (1842); Myers v. Ross, 40 Tenn. 59, 1859 Tenn. LEXIS 19 (1859); Hickman v. Perrin, 46 Tenn. 135, 1868 Tenn. LEXIS 75 (1868), overruled, Tennessee Nat'l Bank v. Ebbert & Co., 56 Tenn. 153, 1872 Tenn. LEXIS 119 (1872), overruled in part, Tennessee Nat'l Bank v. Ebbert & Co., 56 Tenn. 153, 1872 Tenn. LEXIS 119 (1872); Savings, Bldg. & Loan Ass'n v. McLain, 18 Tenn. App. 292, 76 S.W.2d 650, 1934 Tenn. App. LEXIS 32 (1934).

Mortgagees and trustees under deeds of trust or assignments in trust to secure debts are, in general, purchasers to the extent of the debts secured, and are so within the meaning of the registration laws, and especially within the meaning of this section. They are affected by actual notice in the same manner as absolute purchasers. Knowles v. Masterson, 22 Tenn. 619, 1842 Tenn. LEXIS 162 (1842); Myers v. Ross, 40 Tenn. 59, 1859 Tenn. LEXIS 19 (1859); Hickman v. Perrin, 46 Tenn. 135, 1868 Tenn. LEXIS 75 (1868), overruled, Tennessee Nat'l Bank v. Ebbert & Co., 56 Tenn. 153, 1872 Tenn. LEXIS 119 (1872), overruled in part, Tennessee Nat'l Bank v. Ebbert & Co., 56 Tenn. 153, 1872 Tenn. LEXIS 119 (1872); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Sharp v. Fly, 68 Tenn. 4, 1876 Tenn. LEXIS 15 (1876); Haggard v. Benson, 3 Cooper's Tenn. Ch. 268 (1876); Gordon v. English, 71 Tenn. 634, 1879 Tenn. LEXIS 125 (1879); J. & A. Simpkinson & Co. v. McGee, 72 Tenn. 432, 1880 Tenn. LEXIS 39 (1880); Jones v. Ragland, 72 Tenn. 539, 1880 Tenn. LEXIS 60 (1880); Kirkpatrick v. Ward, 73 Tenn. 434, 1880 Tenn. LEXIS 157 (1880); Nailer v. Young, 75 Tenn. 735, 1881 Tenn. LEXIS 181 (1881); Anderson v. Ammonett, 77 Tenn. 1, 1882 Tenn. LEXIS 7 (1882); Grotenkemper v. Carver, 77 Tenn. 280, 1882 Tenn. LEXIS 50 (1882); Hill v. McLean, 78 Tenn. 107, 1882 Tenn. LEXIS 151 (1882); Lincoln Sav. Bank v. Ewing, 80 Tenn. 598, 1883 Tenn. LEXIS 211 (1883); Boro v. Harris, 81 Tenn. 36, 1884 Tenn. LEXIS 6 (1884); Davis v. Cross, 82 Tenn. 637, 1885 Tenn. LEXIS 5, 52 Am. Rep. 177 (1885); Pierce v. Lawrence, 84 Tenn. 572, 1 S.W. 204, 1886 Tenn. LEXIS 145 (1886).

The beneficiary in the trust conveyance or assignment for the benefit of creditors is a purchaser to the extent of the indebtedness secured to him. Robinson v. Owens, 103 Tenn. 91, 52 S.W. 870, 1899 Tenn. LEXIS 90 (1899).

4. Registration — Effect.

The heir's deed to an innocent third person for value and without notice, when registered before the deed of the ancestor, will prevail against the ancestor's deed. McCulloch's Lessee v. Eudaly, 11 Tenn. 345, 11 Tenn. 346, 1832 Tenn. LEXIS 59 (1832).

A lien of a vendor against future crops under a lease with an option to purchase the land at the end of the lease is prior to that of the beneficiaries of a trust deed executed after the registration of the vendor's lien. Polk v. Foster, 66 Tenn. 98, 1874 Tenn. LEXIS 84 (1874). See Meacham v. Herndon, 86 Tenn. 366, 6 S.W. 741, 1887 Tenn. LEXIS 54 (1887).

Priority of registration gives the better right, for the rule that, where the parties have equal equities, the one obtaining the legal title may sometimes obtain an advantage of which equity will not deprive him, cannot be applied under this statute. Smith v. Neilson, 81 Tenn. 461, 1884 Tenn. LEXIS 58 (1884). See J. & A. Simpkinson & Co. v. McGee, 72 Tenn. 432, 1880 Tenn. LEXIS 39 (1880); Savage v. Bon Air Coal, Land & Lumber Co., 2 Tenn. Ch. App. 594 (1902).

Instrument first noted has preference over one of earlier date, but noted for registration afterwards, unless it is proved in a court of equity, according to the rules of the court, that the party claiming under the subsequent instrument had full notice of the previous instrument. Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

The due and proper registration of instruments authorized by law to be registered secures to the parties interested therein certain rights and priorities of the most vital and important character in the property involved, which they do not otherwise have. State use of Cardin v. McClellan, 113 Tenn. 616, 85 S.W. 267, 1904 Tenn. LEXIS 55 (1904).

Where trust deed was recorded after execution of contract for sale of land which was not recorded but before execution and recording of warranty deed executed pursuant to such contract, a trustee's deed executed upon foreclosure under such trust deed and recorded after execution and recording of the warranty deed, conveyed good title to grantee under the trustee's deed since recording of trust deed was notice to purchaser. Harris v. Buchignani, 199 Tenn. 105, 285 S.W.2d 108, 1955 Tenn. LEXIS 433 (1955).

Priority of registered instruments is governed by a race-notice statute; however, its priority may be affected by provisions in the mortgage. In re Total Care, Inc., 102 B.R. 646, 1989 Bankr. LEXIS 1059 (Bankr. W.D. Tenn. July 6, 1989).

T.C.A. §§ 66-24-119 and 66-26-105 do not abrogate the common law rule giving preference to a mortgagee over a mechanic's lien in a purchase money mortgage transaction. Guffey v. Creutzinger, 984 S.W.2d 219, 1998 Tenn. App. LEXIS 388 (Tenn. Ct. App. 1998), review or rehearing denied, — S.W.2d —, 1998 Tenn. LEXIS 670 (Tenn. Nov. 9, 1998).

Pursuant to T.C.A. § 66-26-105, a deed of trust that was recorded first in time had priority over a subsequently recorded deed of trust. ABN AMRO Mortg. Group, Inc. v. S. SEC. Fed. Credit Union, 372 S.W.3d 121, 2011 Tenn. App. LEXIS 625 (Tenn. Ct. App. Nov. 17, 2011), appeal denied, ABN AMRO Mortg. Group, Inc. v. Southern Sec. Fed. Credit Union, — S.W.3d —, 2012 Tenn. LEXIS 240 (Tenn. Apr. 11, 2012).

5. —Simultaneous Registration.

Where two trust deeds are received for registration at the same time, they should be noted as having been received simultaneously, and if foreclosure proceeds, apportioned proportionately. Chatten v. Knoxville Trust Co., 154 Tenn. 345, 289 S.W. 536, 1926 Tenn. LEXIS 132, 50 A.L.R. 537 (1926).

In boundary line dispute where boundaries in simultaneously executed deeds inadvertently overlapped, plaintiff, who recorded his deed first, was not given priority because he had full notice of other deed and the court rejected the contention unawareness of the conflict in the descriptions exempted plaintiff from the notice requirements under T.C.A. § 66-26-105. Watson v. Watson, 658 S.W.2d 132, 1983 Tenn. App. LEXIS 613 (Tenn. Ct. App. 1983).

6. —Registration after Second Unregistered Conveyance.

A prior mortgagee who registers his mortgage after the mortgagor has again mortgaged or conveyed the same property, but before the subsequent deed is registered, is entitled to priority of satisfaction, although he had notice of the subsequent deed before the registration of his mortgage. Copeland v. Bennet, 18 Tenn. 355, 1837 Tenn. LEXIS 34 (1837).

Under the recording statutes, a prior unrecorded deed will take precedence over a subsequent deed to a donee although the subsequent deed is recorded first. Gregg v. Link, 774 S.W.2d 174, 1988 Tenn. App. LEXIS 559 (Tenn. Ct. App. 1988), appeal denied, 1989 Tenn. LEXIS 303 (Tenn. June 5, 1989).

7. —Deed Absolute on Face but Intended as Mortgage.

A deed absolute upon its face, and noted or registered, if shown by parol to have been intended as a mortgage, and is so held, will have effect as a mortgage from the date of such noting or registration. Ruggles v. Williams, 38 Tenn. 141, 1858 Tenn. LEXIS 143 (Tenn. Sep. 1858); Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871); Blizzard v. Craigmiles, 75 Tenn. 693, 1881 Tenn. LEXIS 172 (1881); Leech v. Hillsman, 76 Tenn. 747, 1882 Tenn. LEXIS 5 (1882).

8. —Interest in Corporate Stock.

Attachment of corporate stock before issuance of certificate to subscriber prevails over prior transfer thereof by registered mortgage, where no notice of assignment was given to corporation. Cates v. Baxter, 97 Tenn. 443, 37 S.W. 219, 1896 Tenn. LEXIS 164 (1896).

9. —Bankruptcy.

Judicial lienholder in bankruptcy proceeding had priority against homestead property over first deed of trust holder whose consensual lien was perfected subsequent to the judicial lien. In re Durham, 33 B.R. 23, 1983 Bankr. LEXIS 5543 (Bankr. E.D. Tenn. 1983).

10. Notice.

Where one has actual knowledge of a prior deed it is immaterial when the deed is registered. Stockton v. Murray, 25 Tenn. App. 371, 157 S.W.2d 859, 1941 Tenn. App. LEXIS 119 (1941).

Notice of the previous instrument is sufficient to do away with the claimed priority; no notice of a mistake in the instrument is required. Watson v. Watson, 658 S.W.2d 132, 1983 Tenn. App. LEXIS 613 (Tenn. Ct. App. 1983).

11. —Facts Constituting Notice.

A deed of gift acknowledged for registration, and actually delivered to the grantee, together with the possession of the land, takes precedence over a prior deed of gift, acknowledged for registration, and deposited with a third person to be registered after the grantor's death, and which was registered before the subsequent deed. The grantee's possession under the subsequent deed was notice to the grantee under the prior deed of his right, when the prior deed was delivered and registered. Davis v. Cross, 82 Tenn. 637, 1885 Tenn. LEXIS 5, 52 Am. Rep. 177 (1885); Staub v. Hampton, 117 Tenn. 706, 101 S.W. 776, 1906 Tenn. LEXIS 74 (Tenn. Dec. 1906). See Harton v. Lyons, 97 Tenn. 180, 36 S.W. 851, 1896 Tenn. LEXIS 124 (1896).

Where a deed made specific reference to the page of a certain book in the register's office of the county, where the grantor's deed was recorded, but erroneously referred to the grantor therein as a certain corporation when in fact his grantors were certain individuals, the grantee of the second deed acquired no title. Frankfort Land Co. v. Hughett, 137 Tenn. 32, 191 S.W. 530, 1916 Tenn. LEXIS 50 (1916).

Plaintiff had full notice of the previous instrument so as to defeat priority in boundary line dispute case where plaintiff was aware of intent of mother to deed property to plaintiff and defendant, knew defendant would receive tract adjoining own, and plaintiff's deed referred to his boundary line as running with defendant's boundary line. Watson v. Watson, 658 S.W.2d 132, 1983 Tenn. App. LEXIS 613 (Tenn. Ct. App. 1983).

In a dispute regarding priority between two recorded deeds of trust after borrowers'  default, judgment in favor of assignee bank was improper as the credit union's registration of its deed of trust with its release provision constituted notice to the world as to what would be required for release; further, the credit union did not misadvise the assignee bank as to what action would be required before the credit union would release its deed of trust, but on the contrary, the credit union in registering its deed of trust provided the assignee bank with complete and accurate information as to the matter of inquiry. Wash. Mut. Bank, F.A. v. ORNL Fed. Credit Union, 300 S.W.3d 665, 2008 Tenn. App. LEXIS 360 (Tenn. Ct. App. June 24, 2008), appeal denied, — S.W.3d —, 2009 Tenn. LEXIS 209 (Tenn. Jan. 20, 2009).

Because the subsequent purchaser was on inquiry notice that the church held a legal claim to the subject property, he could not rely on his first recorded deed to claim priority to the property. Under a proper application of T.C.A. § 66-26-105, the church's deed to the property, though not first recorded, had priority because a reasonable person in the subsequent purchaser's situation would have made an inquiry with the church as to its claim to the disputed property based on the church's longstanding use of the property as a parking lot, the church's action in first graveling, and then paving, the property, and the brick wall built by the church to separate its property from the bank's. Milledgeville United Methodist Church v. Melton, 388 S.W.3d 280, 2012 Tenn. App. LEXIS 638 (Tenn. Ct. App. Sept. 14, 2012).

Trial court improperly granted the foreclosure buyer summary judgment on a quiet title action where a trier of fact could have reasonably concluded that since she had provided a property tax inquiry listing the tax sale purchaser as owner, she had actual knowledge that he was the owner prior to purchasing the property, and thus, a genuine issue of fact as to notice had been raised. Scott v. Ditto, — S.W.3d —, 2016 Tenn. App. LEXIS 650 (Tenn. Ct. App. Aug. 31, 2016).

12. —Jurisdiction to Consider.

Under this section, a court of law can look only to the priority of registration, and upon that fact the legal efficacy of the instrument depends, and it would, therefore, be irrelevant to inquire whether a subsequent purchaser had knowledge or notice of a prior unregistered conveyance. This can only be done by a court of equity. Bledsoe v. Rogers, 35 Tenn. 466, 1856 Tenn. LEXIS 10 (1856); Rogers v. Wheaton, 88 Tenn. 665, 13 S.W. 689, 1890 Tenn. LEXIS 4 (1890). See Flowers v. Wilkes, 31 Tenn. 408, 1852 Tenn. LEXIS 129 (Tenn. Apr. 1852).

13. —Notice to Agent or Mortgage Trustee.

Notice to the agent in the purchase or to the trustee in a deed of trust to secure a debt that there exists a prior unregistered conveyance, mortgage, or deed of trust is notice to his principal, and though his conveyance or the deed of trust securing his debt is registered first, the grantee in the prior unregistered deed, or the debt secured by the prior unregistered mortgage, is entitled to priority. Myers v. Ross, 40 Tenn. 59, 1859 Tenn. LEXIS 19 (1859); Schoolfield v. Cogdell, 120 Tenn. 618, 113 S.W. 375, 1908 Tenn. LEXIS 48 (1908); Savings, Bldg. & Loan Ass'n v. McLain, 18 Tenn. App. 292, 76 S.W.2d 650, 1934 Tenn. App. LEXIS 32 (1934).

14. —Constructive Notice of Lis Pendens.

In all cases subject to the registration laws, the deed first registered has priority over constructive notice of lis pendens. Hammock v. Qualls, 139 Tenn. 388, 201 S.W. 517, 1917 Tenn. LEXIS 114 (1918).

15. —Burden of Proof.

The burden of proof rests upon the claimant under an unregistered conveyance to show that a subsequent claimant under a registered conveyance took with notice of the prior conveyance. Wilkins v. McCorkle, 112 Tenn. 688, 80 S.W. 834, 1904 Tenn. LEXIS 64 (1904).

66-26-106. Presumption as to validity of registration after twenty years.

Whenever a deed has been registered twenty (20) years or more, the same shall be presumed to have been properly acknowledged or proved, though the certificate of acknowledgement or probate has not been transferred to the registers book, and without regard to the form of the certificate; provided, that an acknowledgment to an instrument which has been of record in the register's office for a period of seven (7) years shall be presumed valid so as to comply with the form of acknowledgments set out in §§ 66-22-107 and 66-22-108.

Code 1858, § 2084 (deriv. Acts 1839-1840, ch. 26, § 9); Shan., § 3761; mod. Code 1932, § 7672; Acts 1969, ch. 200, § 1; T.C.A. (orig. ed.), § 64-2606; Acts 2005, ch. 303, § 3.

Cross-References. Adverse possession under a registered conveyance, §§ 28-2-10528-2-107.

Presumption as to subscription by grantor after 30 years, § 66-26-107.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 20; 9 Tenn. Juris., Deeds, § 14; 11 Tenn. Juris., Evidence, § 96; 18 Tenn. Juris., Limitations of Actions, § 3; 21 Tenn. Juris., Recording Acts, § 9.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Constitutionality.

Since this section affects remedy and not right, it is constitutional whether its provisions relate to future or to past. Hughes v. Cannon, 21 Tenn. 589, 1841 Tenn. LEXIS 75 (1841).

2. Basis and Purpose.

This provision of this section is founded upon reasons of public policy, for the security of land titles, and to preserve and promote the quiet of the community. The section does not proceed upon the idea that in point of fact the deed was registered upon a regular probate, but upon the ground that it is better for the general interest and repose of society that, after an acquiescence of 20 years, any question respecting the regularity of the registration should be positively excluded. Mathewson v. Spencer, 36 Tenn. 383, 1857 Tenn. LEXIS 15 (1857). See Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872).

3. Nature.

This section is a statute of limitation in principle, and it runs against all persons, including infants. Matthewson v. Spencer, 35 Tenn. 513, 1856 Tenn. LEXIS 19 (1856); Mathewson v. Spencer, 36 Tenn. 383, 1857 Tenn. LEXIS 15 (1857); Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Stroud v. McDaniel, 80 Tenn. 617, 1883 Tenn. LEXIS 213 (1883); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906); Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911).

4. Application.

This section has reference only to deeds made by the grantors themselves in person, and not to deeds made by attorneys in fact. Deeds made through the intervention of attorneys in fact are regulated by §§ 66-26-108 and 66-26-109. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

This section applies even where the officer who took the acknowledgment was one not designated by statute for the purpose. Perry v. Clift, 54 S.W. 121, 1899 Tenn. Ch. App. LEXIS 115 (Tenn. Ch. App. 1899).

5. Effect.

After the registration of a deed for 20 years, the presumption becomes absolute and conclusive, from the simple lapse of time, that the registration was upon lawful authority. Mathewson v. Spencer, 36 Tenn. 383, 1857 Tenn. LEXIS 15 (1857); Anderson v. Bewley, 58 Tenn. 29, 1872 Tenn. LEXIS 223 (1872); Seephenson v. Walker, 67 Tenn. 289, 1874 Tenn. LEXIS 374 (1874); Hanks v. Folsom, 79 Tenn. 555, 1883 Tenn. LEXIS 107 (1883); Stroud v. McDaniel, 80 Tenn. 617, 1883 Tenn. LEXIS 213 (1883); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906); Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911); Daniel v. Dayton Coal & Iron Co., 132 Tenn. 501, 178 S.W. 1187, 1915 Tenn. LEXIS 40 (1915).

The provision has retrospective effect and renders deed executed before the statute came into effect and registered for 20 years admissible in evidence though acknowledgment be defective. Perry v. Clift, 54 S.W. 121, 1899 Tenn. Ch. App. LEXIS 115 (Tenn. Ch. App. 1899).

Under this section no distinction is made between a void acknowledgment and a defective acknowledgment in applying the presumption that a deed has been registered upon lawful authority when it has been registered 20 years or more, as all inquiry of the subject of probate is cut off and the presumption becomes absolute and conclusive after 20 years from the date of registration. Richardson v. Schwoon, 3 Tenn. App. 512, — S.W. —, 1925 Tenn. App. LEXIS 122 (Tenn. Ct. App. 1925).

T.C.A. § 66-26-106 cured any defect which could result by a declaration that Acts 1883, ch. 151, amending T.C.A. § 8-21-1201, was unconstitutional. Layne v. Baggenstoss, 640 S.W.2d 1, 1982 Tenn. App. LEXIS 383 (Tenn. Ct. App. 1982).

6. Defects Cured by Lapse of Period.

Although it may appear upon the face of the papers that the instrument was not properly acknowledged or probated, registration for 20 years creates a conclusive presumption of authority for registration. Webb v. Den, 58 U.S. 576, 15 L. Ed. 35, 1854 U.S. LEXIS 541 (1854); Green v. Goodall, 41 Tenn. 404, 1860 Tenn. LEXIS 83 (1860); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

Registration for 20 years only cures defects and omissions in the certificate authenticating instruments for registration, and the failure of the register to register the certificate. Such registration does not render valid and effective a deed or instrument not made in conformity to law. King v. Nutall, 66 Tenn. 221, 1874 Tenn. LEXIS 110 (1874); Jenkins v. Jenkins, 11 Tenn. App. 142, — S.W.2d —, 1929 Tenn. App. LEXIS 82 (Tenn. Ct. App. 1929).

Registration for the required period under this section cuts off all inquiry, even where the certificate of privy examination of a married woman was fraudulently obtained, and made without her acknowledgment. Seephenson v. Walker, 67 Tenn. 289, 1874 Tenn. LEXIS 374 (1874).

A deed of conveyance of land registered for more than 20 years is valid and admissible in evidence though the probate taken before a justice of the peace of another county is unauthorized, null and void. Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906); Low v. Tennessee Mining & Mfg. Co., 7 Tenn. App. 501, 1928 Tenn. App. LEXIS 72 (1928).

Where a deed has been registered for 20 years in the county where the land lies, the terms of the probate are immaterial, and the entire absence of probate is immaterial, because the single fact of registration for 20 years protects the deed with an absolute and indisputable verity. Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906); Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911); Low v. Tennessee Mining & Mfg. Co., 7 Tenn. App. 501, 1928 Tenn. App. LEXIS 72 (1928).

Where a deed had been registered more than 20 years it was admissible in evidence without proof of its execution. Stockton v. Murray, 25 Tenn. App. 371, 157 S.W.2d 859, 1941 Tenn. App. LEXIS 119 (1941).

7. Registration in Wrong County.

The registration of a deed for 20 years in a county other than that in which the land lies does not operate to cure a defective certificate of probate or acknowledgment. Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890). See Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

8. Deeds Successively Registered.

A deed registered upon a defective probate becomes effective as a registered deed 20 years after its such registration; and a deed of reconveyance registered upon a defective probate becomes effective likewise; and a subsequent deed of the reconveying grantor, made to a third party, and registered upon a defective probate, becomes effective 20 years after its such registration; so that the grantee under the reconveyance will obtain the title as against such third party under his such subsequently registered deed. Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911).

9. Constructive Notice after Period.

Where the registration of a deed of conveyance of land, made upon a defective certificate of acknowledgment or probate, has by lapse of 20 years, become a valid registration, a purchaser thereafter is affected with constructive notice by reason of such registration; and while the general rule is that the purchaser is not required to go out of the line of title to ascertain whether each successive holder of the title had made any deed before he acquired title, yet he must see whether each such holder has conveyed after he acquired title, and he must follow that line to the limit to which it leads, and be held to notice of what is thereby shown. Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911).

Where a search of title would have shown that the testator had conveyed the entire tract of land to a grantee who reconveyed it to the testator by a deed prior registration of which became effective under this statute, before the subsequent registration of the deed to a third person, subsequently made by the first grantee and the reconveying grantor, became effective under this statute, a devisee of an undivided interest in the land under the testator's will was not affected with constructive notice of the want of title in the grantee and reconveying grantor because the deed of reconveyance to the testator became effective before the subsequent conveyance to the third party; and such devisee was not affected by the fact that the original grantee was estopped to claim a devise of another undivided interest in the land because of his general warranty deed to the third party. Hitt v. Caney Fork Gulf Coal Co., 124 Tenn. 334, 139 S.W. 693, 1910 Tenn. LEXIS 58 (1911).

66-26-107. Presumption as to subscription by grantor after thirty years.

Where a deed has been registered more than thirty (30) years, but the register has failed to register the name of the grantor or bargainor, it shall be presumed that the name of the grantor or bargainor was subscribed to the deed, and the registration shall be good; and in proving the time when a deed has been registered, the date upon the books may be referred to; or the register may certify the fact as it appears upon the register's books; or the time of registration may be established by parol testimony.

Code 1858, § 2085 (deriv. Acts 1839-1840, ch. 26, § 10); Shan., § 3762; Code 1932, § 7673; T.C.A. (orig. ed.), § 64-2607.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Power of Attorney.

Where a power of attorney has been registered for more than 30 years, it must be presumed to have been property authorized and executed. King v. Richardson, 7 Tenn. App. 535, — S.W.2d —, 1928 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1928).

2. Recitals of Heirship — Force after Lapse of Period.

While recitals in a recent deed are not evidence except as between the parties to it and their privies in title, in case of one registered more than 30 years, its recitals with respect to heirship or pedigree are prima facie evidence of the facts as against anyone, even against strangers to that particular chain of title. Fielder v. Pemberton, 136 Tenn. 440, 189 S.W. 873, 1916 Tenn. LEXIS 148 (1916).

3. Married Women's Conveyances.

The provisions of §§ 66-26-106 and 66-26-107 were sufficiently broad in language to embrace the deeds of married women. Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

Under this section and § 66-26-106, a married woman's power of attorney and deed based thereon were validated. Hall v. Gossum, 144 Tenn. 1, 228 S.W. 1039, 1920 Tenn. LEXIS 58 (1920).

66-26-108. Presumption as to deeds by attorneys after twenty years' registration.

In all cases where a deed or deeds conveying real estate have been executed by any person or persons purporting to act as attorney or attorneys in fact, which deed or deeds have been registered, whether with or without proper probate or acknowledgment, or any probate or acknowledgment at all, twenty (20) years or more in the register's office of the county where the real estate is situated, or, if the land lay within the Indian territory at the time of the conveyance, if registered in the register's office of any county in the state, it shall be presumed, unless and until the contrary is shown, as it may be, that the conveyance was properly made by the attorney or attorneys in fact, and such deed or deeds, or certified copies from the register's books, shall be deemed valid to pass the legal title to real estate in the same manner as if the same had been executed by the principal or principals; provided, that nothing contained in this section shall affect the rights of creditors or purchasers for valuable consideration without notice.

Acts 1859-1860, ch. 91, § 1; Shan., § 3764; mod. Code 1932, § 7675; T.C.A. (orig. ed.), § 64-2608.

Cross-References. Uniform Durable Power of Attorney Act, title 34, ch. 6, part 1.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Recording Acts, § 9.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Nature and Purpose.

This section and § 66-26-109 are not statutes of limitation, but are statutes of repose, having for their purpose the quieting of titles based upon deeds made by attorneys in fact other than those specially excepted from their operation. Hall v. Gossum, 144 Tenn. 1, 228 S.W. 1039, 1920 Tenn. LEXIS 58 (1920).

2. Application and Effect.

Where A conveyed mineral rights in land to B who executed power of attorney authorizing C to reconvey if purchase money was not paid, and A conveyed remaining interests to D who executed power of attorney authorizing C to reconvey if purchase money was not paid, and B conveyed mineral rights to D, reconveyance by C to A, upon default in payment, will be held, after lapse of over 20 years, to return all of the interest in the land to A. King v. Richardson, 7 Tenn. App. 535, — S.W.2d —, 1928 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1928).

3. Effect of Other Sections.

Section 28-113 (since repealed), suspending the operation of the statutes of limitation during the period of the Civil War, did not suspend the operations of this section and § 66-26-109, making power of attorney and deed executed thereunder presumptively valid after the power of attorney and deed have been registered for 20 years or more. Hall v. Gossum, 144 Tenn. 1, 228 S.W. 1039, 1920 Tenn. LEXIS 58 (1920).

4. Rebuttable Presumption.

Where a deed, purporting to be made by an attorney in fact, has been registered for 20 years or more, a disputable presumption is raised that the deed was properly made by the attorney, and such deed shall be deemed valid to pass the title in the same manner as if it had been executed by the principal. If not so rebutted, it operates as a presumption against those under disability as well as against others. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906); Burr v. White Oak Lumber Co., 149 Tenn. 191, 258 S.W. 798, 1923 Tenn. LEXIS 92 (1923).

If it should be shown that the principal had no title to the estate, or that the attorney in fact had executed the deed after his power had been revoked or had expired, the presumption of proper execution would be overturned, and would be shown that the deed was not properly made by the attorney in fact. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

5. Burden of Proof.

Wherever it appears that the power of attorney and the deed have been on the register's book for 20 years or more, the burden is on those who dispute the fact. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906). See also King v. Richardson, 7 Tenn. App. 535, — S.W.2d —, 1928 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1928).

66-26-109. Presumption as to powers of attorney after twenty years.

When a power or powers of attorney authorizing the sale or conveyance of real estate have been registered, whether with or without proper probate or acknowledgment, or any probate or acknowledgment at all, twenty (20) years or more in the register's office of the county where the real estate is situated, or, if the land lay within the Indian territory, then if registered in the register's office of any county in the state, such power or powers of attorney shall be deemed good and valid in law to pass the estate conveyed by the attorney or attorneys in fact; provided, that nothing contained in this section shall affect the rights of creditors or purchasers for valuable consideration, without notice.

Acts 1859-1860, ch. 91, § 2; Shan., § 3765; Code 1932, § 7676; T.C.A. (orig. ed.), § 64-2609.

Cross-References. Registration of powers of attorney and revocation, § 66-24-101.

Uniform Durable Power of Attorney Act, title 34, ch. 6, part 1.

Textbooks. Tennessee Jurisprudence, 11 Tenn. Juris., Evidence, § 100; 20 Tenn. Juris., Powers, § 3.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Effect of Power of Attorney.

A person signing a power of attorney with others is bound, though the name of one of the others may be signed without proper authority, where such party does not seek to avoid his signature on that account, but acquiesces in it. Leonard v. Mason, 69 Tenn. 384, 1878 Tenn. LEXIS 105 (1878).

2. Validity of Power of Attorney.

While a married woman's power of attorney, even with the joinder of her husband, was void, her deed, executed through the intervention of an attorney in fact and registered for more than 20 years in the county where the land lies, is valid and admissible in evidence. Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906); Hall v. Gossum, 144 Tenn. 1, 228 S.W. 1039, 1920 Tenn. LEXIS 58 (1920).

3. —Unregistered Power of Attorney.

Although a power of attorney must be registered to constitute notice to third parties, it is good between the parties thereto without registration. King v. Richardson, 7 Tenn. App. 535, — S.W.2d —, 1928 Tenn. App. LEXIS 76 (Tenn. Ct. App. 1928).

4. Presumption — Nature and Effect.

The registration of a power of attorney for 20 years renders its proper execution and original validity conclusive, but leaves open to contest the title of the principal and the questions as to the revocation of the power, or its termination otherwise, before the deed was made. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872).

Where a power of attorney has been registered for 20 years, and a deed has been executed by the attorney in fact under such power, a presumption arises that the power of attorney was properly registered, and that it was valid, and this presumption is indisputable, either by persons sui juris or those under disability. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872).

5. Attacking Power of Attorney — Burden of Proof.

The burden of proof is upon the party attacking the deed to show that the attorney in fact had no right to make a conveyance, or that the power of attorney had been revoked or had expired. Murdock v. Leath, 57 Tenn. 166, 1872 Tenn. LEXIS 413 (1872); Kobbe v. Harriman Land Co., 117 Tenn. 315, 98 S.W. 175, 1906 Tenn. LEXIS 49 (1906).

6. Notice of Power of Attorney as Evidence.

Fact that purchasers had constructive notice of a married woman's registered power of attorney and of the deed thereunder, and evidence that purchasers made inquiries as to the title of the land from a lawyer who sought to have the remaindermen made parties in a former suit for sale of the land showed actual notice of the remaindermen's claim. Hall v. Gossum, 144 Tenn. 1, 228 S.W. 1039, 1920 Tenn. LEXIS 58 (1920).

66-26-110. Registered instruments as evidence — Presumptions and burden of proof regarding signatures on instruments.

  1. Any instruments so proved or acknowledged, certified and registered, shall be received as evidence in any of the courts, judicial and administrative tribunals of the state, subject, nevertheless, to be impeached and proved to be a forgery, or to be otherwise inoperative, if the fact be so.
  2. In an action with respect to an instrument, the authenticity of and authority to make each signature on the instrument is admitted, unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, and if the instrument is not registered or is not properly acknowledged or proved, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized, unless:
    1. The signer is dead or incompetent at the time of trial on the issue of validity of the signature; and
    2. The instrument is unregistered or has been registered for fewer than twenty (20) years.
  3. Under the presumption set forth in subsection (b), the trier of fact must find that the signature is authentic and authorized, unless evidence to the contrary is introduced.

Code 1858, § 2071 (deriv. Acts 1831, ch. 90, § 6); Shan., § 3748; mod. Code 1932, § 7664; T.C.A. (orig. ed.), § 64-2610; Acts 2005, ch. 303, § 4.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 12, 24; 1 Tenn. Juris., Alternation of Instruments, § 20.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Validity of Registration.

There can be no difference in legal effect between the case of the registration of an instrument upon the acknowledgment of the maker or the probate by witnesses in the ordinary way under the statute and a registration under a decree in chancery setting it up, establishing it, and authorizing its registration, which can be done where the subscribing witnesses are dead or incapable, or cannot be had to prove the instrument, and the maker thereof is dead or refuses to acknowledge the same. Ward v. Daniel, 29 Tenn. 603, 1850 Tenn. LEXIS 40 (1850); Allen v. Allen, 2 Cooper's Tenn. Ch. 28 (1874).

The conveyances registered by a deputy register, during the vacancy caused by the removal of the register, are as effectual as if the vacancy had been occasioned by death. Maley v. Tipton, 39 Tenn. 403, 1859 Tenn. LEXIS 237 (1859).

2. Validity of Acknowledgment.

A Tennessee notary public could not take an acknowledgment of a deed in Louisiana, though the certificate be regular and laid venue in the notary's county in Tennessee. White v. Manigan, 138 Tenn. 139, 196 S.W. 148, 1917 Tenn. LEXIS 15 (1917).

3. Presumed Bona Fides of Deed.

The presumption, as a matter of public policy, must always be in favor of the bona fides of a deed as it is registered, and it is incumbent upon the defendant to show that the alterations appearing on the instrument were made after delivery. Branch v. Branch, 143 Tenn. 210, 225 S.W. 1038, 1920 Tenn. LEXIS 8 (1920); Shea v. Landis, 22 Tenn. App. 506, 124 S.W.2d 284, 1938 Tenn. App. LEXIS 52 (Tenn. Ct. App. 1938), superseded by statute as stated in, State v. Brown, — S.W.2d —, 1993 Tenn. Crim. App. LEXIS 151 (Tenn. Crim. App. Mar. 4, 1993).

4. Presumptions as to Persons Holding Papers.

The widow is not supposed to be in possession of the original title papers of her deceased husband. Certified copies from the register's books will, in the absence of the originals, be sufficient in her application for dower; but if the originals are produced, they will be the higher evidence. Walker v. Walker, 46 Tenn. 571, 1869 Tenn. LEXIS 102 (1869).

5. Alteration of Original — Effect.

Where a certified copy of a deed is admissible in evidence and is so offered and opposite party produces what he says is the original but which is different from the copy and bears evidences of alteration, such alteration must be explained or the original will be rejected. Walker v. Walker, 46 Tenn. 571, 1869 Tenn. LEXIS 102 (1869).

6. Ancient Documents — Admissibility.

An unregistered deed over 30 years old is admissible in evidence, without proof of its execution, where it is found in the proper custody, and is free from suspicion as to its genuineness. As an ancient document, its due execution is presumed, and the subscribing witnesses, though living and present, need not be called to establish that fact; and it is not necessary to show that possession of the land was held under the deed. Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890). See Applegate v. Lexington & Carter County Mining Co., 117 U.S. 255, 6 S. Ct. 742, 29 L. Ed. 892, 1886 U.S. LEXIS 1834 (1886); Fielder v. Pemberton, 136 Tenn. 440, 189 S.W. 873, 1916 Tenn. LEXIS 148 (1916).

The general rule is that a private deed over 30 years old may be admitted in evidence, as an ancient document, without proof of its execution, if it comes from the proper custody, though it is not necessary that it come from the best custody, for it is sufficient if it be in a custody that is reasonable, probable, and natural. Sage v. Dayton Coal & Iron Co., 148 Tenn. 1, 251 S.W. 780, 1922 Tenn. LEXIS 76 (1922).

Though evidence was sufficient to establish that deed was over 30 years old, it was held to be insufficient to show a deed in the proper custody, so as to render it admissible in evidence, without proof of its execution. Sage v. Dayton Coal & Iron Co., 148 Tenn. 1, 251 S.W. 780, 1922 Tenn. LEXIS 76 (1922).

7. Unregistered Instruments — Admissibility.

Registration of an instrument is not prerequisite to its introduction in evidence. The statute makes the registered instruments admissible in evidence, but does not require that they shall be registered to make them so admissible. Den v. Clay, 17 Tenn. 257, 1836 Tenn. LEXIS 35 (1836).

8. Copy — Admissibility.

The copy of a deed from the register's office, being secondary evidence, is not admissible in evidence, if it appear upon the trial that the original is or ought to be in the power and possession or under the control of the party who seeks to introduce the copy, unless the loss of the original, or the party's inability to produce it, is shown. Saunders v. Harris, 24 Tenn. 345, 1844 Tenn. LEXIS 73 (1844); Sampson v. Marr, 66 Tenn. 486, 1874 Tenn. LEXIS 169 (1874).

A copy from the register's office of another state, laws of which do not require probate or acknowledgment as authentication for registration, and in which such copy would not be admissible, is not admissible in our courts. Saunders v. Harris, 24 Tenn. 345, 1844 Tenn. LEXIS 73 (1844).

Where the production of the original of an ancient document cannot be legally enforced, and especially where all is done in the power of the party to procure the original, a certified or proved copy thereof is admissible in evidence. Where such ancient document is a deed registered in the wrong county, a certified copy thereof proved by comparison with the original is admissible as evidence. Woods v. Bonner, 89 Tenn. 411, 18 S.W. 67, 1890 Tenn. LEXIS 62 (1890).

Copy of deed from register's office is admissible where original is in possession of adverse party. Branch v. Branch, 143 Tenn. 210, 225 S.W. 1038, 1920 Tenn. LEXIS 8 (1920).

9. —Proof of Loss of Original.

The courts will lend an easy ear to proof of loss of a registered instrument or that it is not in possession of the plaintiff or under his control in order to allow the introduction of a copy duly certified. Sampson v. Marr, 66 Tenn. 486, 1874 Tenn. LEXIS 169 (1874).

10. —Proper Execution as Prerequisite to Admission of Copy.

Where the law requires the execution of an instrument to be proved by two witnesses to authorize its registration, and the certified copy of the registered instrument shows that it was proved by one witness only, it is inadmissible as evidence. Batte v. Stone, 12 Tenn. 167, 12 Tenn. 168, 1833 Tenn. LEXIS 38 (1833).

A certified copy of a deed from the register's office of another state, containing no acknowledgment or probate of the deed, none being required there in order to register, and a copy not being admissible in evidence by the laws of that state, where the fact of a valid execution of the instrument was in question, is not admissible in evidence in the courts of this state. Saunders v. Harris, 24 Tenn. 345, 1844 Tenn. LEXIS 73 (1844).

11. Copy as Evidence.

A certified copy of a legally registered deed is prima facie evidence of the truth of its contents, including its date, although acknowledged long after the real date of its execution. Owen's Adm'r v. Owen, 24 Tenn. 352, 1844 Tenn. LEXIS 76 (1844).

Where a certified copy of a deed duly executed and registered is received in evidence, it is prima facie evidence of the whole copy, and raises a presumption that the deed was delivered at the time of its date and not as of the date of its registration. Goodlett v. Goodman Coal & Coke Co., 192 F. 775, 1912 U.S. App. LEXIS 1960 (6th Cir. 1912).

66-26-111. Proof of instruments registered before 1839.

Every instrument authorized by law to be registered and proved or acknowledged, and registered prior to October 16, 1839, may be read in evidence:

  1. Although the certificate only states that the deed was duly proved, without naming the subscribing witnesses by whom it was so proved; and in such case, the court shall presume that it was duly proved by all the subscribing witnesses, and the probate and registration shall be good, leaving it to the adverse party to disprove the fact;
  2. Although the certificate is not and does not purport to be a transcript from the court minutes, if the certificate states enough to authorize the instrument to be registered; and in this case it shall be presumed that the entry on the minutes authorized the certificate by the clerk, unless the contrary be shown;
  3. Although the certificate does not mention the term or style of the court at or in which the instrument was proved or acknowledged; and in this case, it shall be presumed that the instrument was proved or acknowledged in the court of which the person giving the certificate was clerk, and the certificate and registration shall be good, unless the contrary be shown;
  4. Although the clerk, in the clerk's entry on the minutes and in the clerk's certificate on the document, has omitted to describe or mention the property; and in such case, the probate or acknowledgment and the registration shall be good;
  5. Although the certificate only states that the deed was duly acknowledged, but not by whom; in which case, the instrument shall be presumed to have been acknowledged by the maker, and the acknowledgment and registration shall be good; and
  6. No such probate or acknowledgment shall be void for want of sufficient certainty therein, if enough is contained on the face of it to identify the instrument to which it applies.

Code 1858, § 2086 (deriv. Acts 1839-1840, ch. 26, § 9); Shan., § 3763; Code 1932, § 7674; T.C.A. (orig. ed.), § 64-2611.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, § 17.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Constitutionality.

The provision validating or curing imperfect or defective certificates of acknowledgment or probate is not unconstitutional, though retrospective, because it affects the remedy and not the right. Hughes v. Cannon, 21 Tenn. 589, 1841 Tenn. LEXIS 75 (1841); Matthewson v. Spencer, 35 Tenn. 513, 1856 Tenn. LEXIS 19 (1856).

2. Rights Declared by Decree Unaffected.

This section did not affect the rights of parties established by decree of court before its passage, and the supreme court decided the rights as they existed under the law when the decree below was rendered. Subsequent legislation curing defective probates and registrations cannot affect rights under decrees thereon previously rendered, because the change of law between the trial in the lower court and the appeal to the supreme court does not change the rights of the parties. Gaines v. Catron, 20 Tenn. 514, 1840 Tenn. LEXIS 11 (1840); Garnett v. Stockton, 26 Tenn. 84, 1846 Tenn. LEXIS 66 (1846).

66-26-112. Erroneous recital as to county where land located.

When a grant from the state for lands recites that the lands so granted are situated in one (1) county when they are in a different county, the grant shall be as valid as if the locality thereof were truly recited in the grant; and any subsequent conveyances of the lands in which they are stated to be situate in a different county from that in which they lie, may be registered in the county in which the lands lie, and such registration shall be valid as if the deeds of conveyance had correctly set forth the locality of the lands; provided, that nothing in this section and §§ 66-26-108 and 66-26-109 shall affect the rights of creditors or purchasers without notice.

Acts 1859-1860, ch. 91, § 3; Shan., § 3766; Code 1932, § 7677; T.C.A. (orig. ed.), § 64-2612.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Land Lying in Two Counties.

Where the description thoroughly identifies the land granted, the statute saves, when the land lies in two counties with recital that the same lies in one. Graham v. Gunn, 87 Tenn. 458, 11 S.W. 214, 1888 Tenn. LEXIS 76 (1889).

2. Land Lying in Another County.

Though the land lies in another than recited county, where the description thoroughly identifies the land granted, the statute saves. Stockard v. McGary, 120 Tenn. 180, 109 S.W. 507, 1907 Tenn. LEXIS 42 (1907).

66-26-113. Omission of words from certificate.

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 the deed, or other instrument or the acknowledgement or probate thereof, 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.

Code 1858, § 2080 (deriv. Acts 1845-1846, ch. 77); Shan., § 3757; mod. Code 1932, § 7669; T.C.A. (orig. ed.), § 64-2613; Acts 2005, ch. 303, § 5.

Cross-References. Correction of errors in deed or registration, § 66-5-107.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 8-18.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Application.

This section applied to the acknowledgment of a married woman. Nelson v. Bergman, 146 Tenn. 376, 242 S.W. 387, 1921 Tenn. LEXIS 23 (1921).

2. Substance of Authentication — Necessity — Sufficiency.

The substance of the authentication required by law in the certificate of acknowledgment or probate is indispensable to cure the unintentional omission of the prescribed words. Davis v. Bogle, 58 Tenn. 315, 1872 Tenn. LEXIS 264 (1872); Edmondson v. Harris, 2 Cooper's Tenn. Ch. 427 (1875); Ellett v. Richardson & Co., 68 Tenn. 293, 1878 Tenn. LEXIS 11 (1878); Henderson v. Ish, 3 Shan. 84 (1879); Currie v. Kerr, 79 Tenn. 138, 1883 Tenn. LEXIS 27 (1883); Willingham v. Potter, 131 Tenn. 18, 173 S.W. 434, 1914 Tenn. LEXIS 77 (1914).

If the substance of the authentication required by law is in the clerk's certificate, the unintentional omission of the prescribed words does not make the authentication invalid. Newton Fin. Corp. v. Conner, 161 Tenn. 441, 33 S.W.2d 95, 1930 Tenn. LEXIS 27, 72 A.L.R. 1286 (1930). See also Farquharson v. McDonald, 49 Tenn. 404, 1871 Tenn. LEXIS 24 (1871).

An acknowledgment certificate is not necessarily defective merely because it is not identical to the prescribed statutory form; it is only necessary that the acknowledgment certificate substantially comply with the form prescribed. In re Airport-81 Nursing Care, Inc., 29 B.R. 501, 1983 Bankr. LEXIS 6536 (Bankr. E.D. Tenn. 1983).

Where a bank made a loan to the debtor, a deed of trust was recorded, and a notary certified that the debtor, “unmarried, personally appeared before her,” the certificate of acknowledgment was valid under T.C.A. § 66-26-113, because it substantially complied with the relevant statutory requirements; furthermore, the certificate of acknowledgment met the criterion in T.C.A. § 66-22-114(b) in that it clearly evidenced the intent of the maker of the deed of trust to acknowledge his signature on the instrument; therefore, the deed of trust was properly acknowledged under Tennessee law and was not voidable by a judicial lien creditor or a bona fide purchaser without notice. In re Akins, 87 S.W.3d 488, 2002 Tenn. LEXIS 472 (Tenn. 2002).

3. Omissions Invalidating Acknowledgment.

Corporate acknowledgment in trust deed was fatally defective where words “with whom I am personally acquainted” or words “to me personally known” were omitted. In re Englewood Mfg. Co., 28 F. Supp. 653, 1939 U.S. Dist. LEXIS 2387 (E.D. Tenn. 1939).

Words “personally appeared” in corporate acknowledgment to trust deed did not cure defect in acknowledgment where words “with whom I am personally acquainted” or words “to me personally known” were omitted. In re Englewood Mfg. Co., 28 F. Supp. 653, 1939 U.S. Dist. LEXIS 2387 (E.D. Tenn. 1939).

T.C.A. § 66-26-113 does not validate instruments in which the probating officer has failed to affirm in the acknowledgment that he is personally acquainted with the grantor. In re Anderson, 30 B.R. 995, 1983 U.S. Dist. LEXIS 18003 (M.D. Tenn. 1983).

Substantial compliance test under T.C.A. § 66-26-113 addresses the unintentional omission of words by the officer taking an acknowledgment, not the unintentional omission of the names of the acknowledging individuals; where debtors executed a deed of trust to a creditor that omitted the debtors' names on the acknowledgement form, the deed of trust was invalid. Gregory v. Ocwen Fed. Bank (In re Biggs), 377 F.3d 515, 2004 FED App. 250P, 2004 U.S. App. LEXIS 15588 (6th Cir. Tenn. 2004).

Creditor bank's interest in a deed of trust was entitled to priority only to as to debtor husband's survivorship interest, where the notarization of debtor wife's signature did not evidence an intent to authenticate and acknowledge her signature, entitling trustee in bankruptcy to avoid the bulk of the secured interest under 11 U.S.C. § 554(b). In re Bushee, 319 B.R. 542, 2004 Bankr. LEXIS 2133 (Bankr. E.D. Tenn. 2004).

66-26-114. Correction of omission.

If the omission is a matter of substance, the clerk or other officer, on application of either party interested, may correct such mistake or omission of words in such certificate on any such deed or other instrument.

Code 1858, § 2081 (deriv. Acts 1847-1848, ch. 119, § 1); Shan., § 3758; Code 1932, § 7670; T.C.A. (orig. ed.), § 64-2614.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 19, 22.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Oath.

The required oath may be taken before clerk by a notary public who took the acknowledgment. It is not necessary that oath be entered upon minutes of the county court. It may be shown by certified copy of record thereof made by county court clerk. Meadows v. Gosnell, 123 Tenn. 598, 133 S.W. 1109, 1910 Tenn. LEXIS 27 (1910).

Creditor bank's interest in a deed of trust was entitled to priority only to as to debtor husband's survivorship interest, where the notarization of debtor wife's signature did not evidence an intent to authenticate and acknowledge her signature, entitling trustee in bankruptcy to avoid the bulk of the secured interest under 11 U.S.C. § 554(b). In re Bushee, 319 B.R. 542, 2004 Bankr. LEXIS 2133 (Bankr. E.D. Tenn. 2004).

66-26-115. Registration of correction.

The register shall record the correction in the proper book of the register's office, and make a reference to the same on the margin opposite the original registry of the certificate.

Code 1858, § 2083 (deriv. Acts 1847-1848, ch. 119, § 3); Shan., § 3760; Code 1932, § 7671; T.C.A. (orig. ed.), § 64-2615.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Acknowledgments, §§ 18, 19, 22.

Law Reviews.

The Tennessee Recording System (Toxey H. Sewell), 50 Tenn. L. Rev. 1 (1982).

NOTES TO DECISIONS

1. Effective Date of Registered Correction.

Where an instrument is incorrectly registered, the register may correct the registration so as to make it conform to the original, and registration takes effect as to the correction only from the date thereof. Baldwin v. Marshall, 21 Tenn. 116, 1840 Tenn. LEXIS 42 (1840); Boyce v. Stanton, 83 Tenn. 346, 1885 Tenn. LEXIS 59 (1885). See Stroud v. McDaniel, 80 Tenn. 617, 1883 Tenn. LEXIS 213 (1883); Southern Bldg. & Loan Ass'n v. Rodgers, 104 Tenn. 437, 58 S.W. 234, 1900 Tenn. LEXIS 14 (1900).

The registration of the corrected certificate of probate or acknowledgment does not relate back to the date of the original registration, so as to divest, defeat, or affect any intervening vested rights in favor of judgment creditors or others that may have attached to the property conveyed. Harrison v. Wade, 43 Tenn. 505, 1866 Tenn. LEXIS 80 (1866); Stroud v. McDaniel, 80 Tenn. 617, 1883 Tenn. LEXIS 213 (1883); Coal Creek Mining Co. v. Heck, 83 Tenn. 497, 1885 Tenn. LEXIS 73 (1885); Citizens' Bank of Jellico v. McCarty, 99 Tenn. 469, 42 S.W. 4, 1897 Tenn. LEXIS 53 (1897). See Turbeville v. Gibson, 52 Tenn. 565, 1871 Tenn. LEXIS 290 (1871).

As between the grantor and volunteers under him and the grantee, the rights of others not intervening, the registration of the corrected certificate of probate or acknowledgment and privy examination relates back to the original acknowledgment. Grotenkemper v. Carver, 77 Tenn. 280, 1882 Tenn. LEXIS 50 (1882); Stroud v. McDaniel, 80 Tenn. 617, 1883 Tenn. LEXIS 213 (1883); Citizens' Bank of Jellico v. McCarty, 99 Tenn. 469, 42 S.W. 4, 1897 Tenn. LEXIS 53 (1897); Madden v. Mason, 106 Tenn. 194, 61 S.W. 54, 1900 Tenn. LEXIS 151 (1900).

2. Proof of Correction.

A register who has made an incorrect registration of a deed, may correct such incorrect registration, and such register is a competent witness to prove the correction and the date thereof in any suit between third persons in regard to such deed. Baldwin v. Marshall, 21 Tenn. 116, 1840 Tenn. LEXIS 42 (1840); Boyce v. Stanton, 83 Tenn. 346, 1885 Tenn. LEXIS 59 (1885).

3. Notice of Uncorrected Defect.

A mortgage perfected by the correction of a defective certificate of privy examination prevails over a subsequent deed of conveyance for a preexisting debt, taken with notice of such mortgage before its perfection, because one who so takes a conveyance, pending a suit to foreclose the same, is a volunteer, and cannot resist the claim of the mortgagee. Grotenkemper v. Carver, 72 Tenn. 375, 1880 Tenn. LEXIS 30 (1880). See Grotenkemper v. Carver, 77 Tenn. 280, 1882 Tenn. LEXIS 50 (1882).

66-26-116. Instruments granting, transferring, pledging or assigning lessors' interests in real property.

  1. Upon registration, in the county where the real property lies, of any instrument granting, transferring, pledging or assigning the lessor's interest in leases or rents arising from real property, the interest of the grantee, transferee, pledgee or assignee shall be fully perfected as to the grantor, transferor, pledgor or assignor and all third parties without the necessity of furnishing notice to the assignor or lessee, obtaining possession of the real property, impounding the rents, securing the appointment of a receiver, or taking any other affirmative action, and shall have the priority provided for in this chapter.
  2. The lessee is authorized to pay the assignor until the lessee receives notification that rents due or to become due have been assigned and that payment is to be made to the assignee. A notification that does not reasonably identify the rents assigned is ineffective. If requested by the lessee, the assignee must seasonably furnish reasonable proof that the assignment has been made and unless the assignee does so the lessee may pay the assignor.
  3. Any registered instrument granting, transferring, pledging or assigning an interest in leases or rents arising from real property shall, upon satisfaction, be released as provided in chapter 25 of this title and shall be subject to the penalties provided in such chapter.

Acts 1989, ch. 213, § 2.

Textbooks. Tennessee Jurisprudence, 4 Tenn. Juris., Bankruptcy, § 9; 17 Tenn. Juris., Landlord and Tenant, § 14.

NOTES TO DECISIONS

1. Applicability.

Where the secured party had perfected its security interest in rents under prior Tennessee law, but where the debtor filed his bankruptcy petition after the effective date of T.C.A. § 66-26-116, application of T.C.A. § 66-26-116 was not prohibited as retroactive. In re BVT Chestnut Hill Apts., Ltd., 115 B.R. 116, 1990 Bankr. LEXIS 1187 (Bankr. M.D. Tenn. 1990).

In the absence of evidence that another party or interest would be adversely affected or that a party had gained priority between the time of an earlier recordation of any assignment of rents and April 27, 1989, T.C.A. § 66-26-116 is applicable to assignments of rent recorded prior to its effective date of April 27, 1989. Wilhite Pure Oil Truck Stop, Inc. v. McCutchen, 115 B.R. 126, 1990 Bankr. LEXIS 1216 (Bankr. W.D. Tenn. 1990).

Applying T.C.A. § 66-26-116, though it was enacted in 1989, to a contract for assignment of rents, executed in 1987, did not retroactively impair the contract rights that vested between the parties when it was signed, so as to violate the Contracts Clauses of the United States and Tennessee Constitutions. Creekstone Apts. Assocs. v. Resolution Trust Corp., 165 B.R. 845, 1993 Bankr. LEXIS 2144 (Bankr. M.D. Tenn. 1993), aff'd in part, rev'd in part, Te-Two Real Estate Ltd. Partnership v. Creekstone Apartments Assocs., L.P. (In re Creekstone Apartments Assocs., L.P.), — F. Supp. 2d —, 1995 U.S. Dist. LEXIS 14876 (M.D. Tenn. Sept. 18, 1995).

2. Notice.

After debtor's filing of bankruptcy petition, creditor's filing of a “Notice of Claim of Lien on Rents In Lieu of Seizure of Property or Commencement of Action” did not comply with the notice requirements of T.C.A. § 66-26-116. Wilhite Pure Oil Truck Stop, Inc. v. McCutchen, 115 B.R. 126, 1990 Bankr. LEXIS 1216 (Bankr. W.D. Tenn. 1990).

Secured creditor was required to obtain relief from the automatic stay under 11 U.S.C. § 362 to permit the creditor to give its notice to the Chapter 11 debtor/lessee pursuant to subsection (b). Wilhite Pure Oil Truck Stop, Inc. v. McCutchen, 115 B.R. 126, 1990 Bankr. LEXIS 1216 (Bankr. W.D. Tenn. 1990).

3. Perfection of Security Interest.

T.C.A. § 66-26-116 conclusively establishes that a creditor need only record its assignment of rents in the real property records where the deed of trust is recorded to immediately perfect a security interest in rents; possession of the property or sequestration of rents through a receiver is no longer necessary. Consequently, the debtor's argument that some additional step, such as possession or sequestration, was necessary to perfect the receiver's interest was contrary to T.C.A. § 66-26-116 and prior case law. Creekstone Apts. Assocs. v. Resolution Trust Corp., 165 B.R. 845, 1993 Bankr. LEXIS 2144 (Bankr. M.D. Tenn. 1993), aff'd in part, rev'd in part, Te-Two Real Estate Ltd. Partnership v. Creekstone Apartments Assocs., L.P. (In re Creekstone Apartments Assocs., L.P.), — F. Supp. 2d —, 1995 U.S. Dist. LEXIS 14876 (M.D. Tenn. Sept. 18, 1995).

The receiver perfected its security interest in rents upon recording its deed of trust in the Davidson County Register's Office in 1987, and this interest remained perfected at the time of the debtor's bankruptcy filing in 1992. Creekstone Apts. Assocs. v. Resolution Trust Corp., 165 B.R. 845, 1993 Bankr. LEXIS 2144 (Bankr. M.D. Tenn. 1993), aff'd in part, rev'd in part, Te-Two Real Estate Ltd. Partnership v. Creekstone Apartments Assocs., L.P. (In re Creekstone Apartments Assocs., L.P.), — F. Supp. 2d —, 1995 U.S. Dist. LEXIS 14876 (M.D. Tenn. Sept. 18, 1995).

Chapter 27
Multiple Ownership of Property

Part 1
Horizontal Property

66-27-101. Title.

This part shall be known as the “Horizontal Property Act.”

Acts 1963, ch. 124, § 1; T.C.A., § 64-2701.

Cross-References. Recordation tax, § 67-4-409.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-501.

Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, §§ 1, 2.

Law Reviews.

1990 Legislation Affecting Tennessee Real Estate Practice (William R. Bruce), 26 No. 3, Tenn. B.J. 18 (1990).

Attorney General Opinions. The establishment of a horizontal property regime under the Horizontal Property Act, T.C.A. §§ 66-27-101 to 66-27-123 does not constitute a subdivision of property and, therefore, if a property owner complies with the act's provisions for establishing a horizontal property regime, the property owner need not seek the regional planning commission's approval under the statutes governing subdivisions, T.C.A. §§ 13-3-401 to 13-3-411, OAG 01-147, 2001 Tenn. AG LEXIS 155 (9/14/01).

Prohibiting yard signs in subdivision, OAG 04-041, 2004 Tenn. AG LEXIS 41 (3/12/04).

Collateral References.

Enforceability of bylaw or other rule of condominium or co-operative association restricting occupancy by children. 100 A.L.R.3d 241.

Expenses for which condominium association may assess unit owners. 77 A.L.R.3d 1290.

Liability of condominium association or corporation for injury allegedly caused by condition of premises. 45 A.L.R.3d 1171.

Liability of vendor of condominiums for damages occasioned by defective condition thereof. 50 A.L.R.3d 1071.

Property party plaintiff in action for injury to common areas of condominium development. 69 A.L.R.3d 1148.

Self-dealing by developers of condominium project as affecting contracts or leases with condominium association. 73 A.L.R.3d 613.

Validity and construction of condominium association's regulations governing members' use of common facilities. 72 A.L.R.3d 308.

Zoning or building regulations as applied to condominiums. 71 A.L.R.3d 866.

66-27-102. Part definitions.

  1. As used in this part, unless the context otherwise requires:
      1. “Apartment” means a part of the property subject to this part intended for any type of independent use, including:
        1. (a)  One (1) or more cubicles of air at one (1) or more levels of space; or
          1. (i)  (a)  One (1) or more cubicles of air at one (1) or more levels of space; or
          2. One (1) or more rooms or enclosed spaces located on one (1) or more floors, or parts thereof, in a building; or
          3. A separate free-standing building of one (1) or more floors; and
          4. Any part of open space upon the property clearly delineated for independent use adjacent to and in connection with the use of any of the spaces provided for in subdivisions (a)(1)(A)(i)(a )-(c );
        2. All of which shall have a direct exit to a public street or highway or to a common area or limited common area leading to such street or highway;
      2. Where private elements are involved, “apartment” includes the private element;
    1. “Condominium” means the ownership of single units in a multiple unit structure or structures with common elements;
    2. “Condominium project” means a real estate condominium project; a plan or project whereby two (2) or more apartments, rooms, office spaces, or other units in existing or proposed building or buildings or structure or structures are offered or proposed to be offered for sale;
    3. “Co-owner” means a person, firm, corporation, partnership, association, trust or other legal entity, or any combination thereof, which owns an apartment or apartments within the building;
    4. “Council of co-owners” means all the co-owners as defined in subdivision (a)(4);
    5. “Developer” means a person who undertakes to develop a real estate condominium project;
    6. “General common elements” means and includes:
      1. The land, whether leased or in fee simple, on which the building stands;
      2. The foundations, main walls, roofs, halls, lobbies, stairways, and entrances and exits or communication ways;
      3. The basements, flat roofs, yards, and gardens, except as otherwise provided or stipulated;
      4. The premises for the lodging of janitors or persons in charge of the building, except as otherwise provided or stipulated;
      5. The compartments or installations of central services, such as power, light, gas, cold and hot water, refrigeration, reservoirs, water tanks and pumps, and the like;
      6. The elevators, garbage incinerators and, in general, all devices or installations existing for common use; and
      7. All other elements of the building rationally of common use or necessary to its existence, upkeep and safety; but where private elements are created, private elements shall not be considered to be general common elements, notwithstanding anything in this section to the contrary;
    7. “Limited common elements” means and includes those common elements which are agreed upon by all of the co-owners to be reserved for the use of a certain number of apartments to the exclusion of the other apartments, such as special corridors, stairways and elevators, sanitary services common to the apartments of a particular floor, and the like;
    8. “Majority of co-owners” means more than fifty percent (50%) of the co-owners;
    9. “Master deed” or “master lease” means the deed or lease recording the property of the horizontal property regime. A declaration will be recorded in the case where private elements are involved; the declaration shall include the covenants, conditions, restrictions and bylaws of the townhouse corporation;
    10. “Person” means an individual, firm, corporation, partnership, association, trust or other legal entity, or any combination of these;
    11. “Private elements” means and includes the lot area upon which an apartment is located and the improvements located thereon, as described in the declaration, and for which fee simple ownership and exclusive use is reserved to that apartment only. Private elements shall exist only where each apartment in the project has a ground floor and there are no apartments located above or below the private element except the one (1) apartment located thereon. Limited common elements located upon private elements shall be deemed to be private elements;
    12. “Property” means and includes the land whether leasehold or in fee simple and the building, all improvements and structures thereon and all easements, rights and appurtenances belonging to such land;
    13. “To record” means to record pursuant to the laws of the state of Tennessee relating to the recordation of deeds and other instruments conveying or affecting title to property; and
    14. “Townhouse corporation” means a not-for-profit corporation to be organized under the Tennessee Nonprofit Corporation Act, compiled in title 48, chapters 51-68, of which all co-owners shall be members where private elements are involved.
  2. All pronouns used in this section include the male, female and neuter genders and include the singular or plural numbers, as the case may be.

Acts 1963, ch. 124, § 2; 1971, ch. 370, §§ 1, 2; 1976, ch. 642, § 1; T.C.A., § 64-2702; Acts 1990, ch. 823, §§ 1-5.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 2.

Law Reviews.

Developer Abuses Relating to Condominiums — A Need for Change in Tennessee (Joseph T. Kirkland, Jr.), 5 Mem. St. U.L. Rev. 572 (1975).

Collateral References.

Liability of vendor of condominiums for damages occasioned by defective condition thereof. 50 A.L.R.3d 1071.

66-27-103. Horizontal property regime — Planned unit development — Establishment.

  1. Whenever a developer, the sole owner, or the co-owners of a building expressly declare, through the recordation of a master deed or lease, or by plat, which shall set forth the particulars enumerated by § 66-27-107, their desire to submit their property to the regime established by this part, there shall be thereby established a horizontal property regime.
  2. If there is substantial compliance with this part as pertaining to private elements, and if an appropriate legal opinion is obtained from an attorney licensed to practice law in this state to the effect that all legal documents required in this part for the creation of a planned unit development are attached and therefore a planned unit development is created under this part, then a planned unit development shall be deemed to have been properly organized and constituted under state law. All planned unit developments shall require a declaration, bylaws, a plat showing private and common elements, a townhouse corporation, charter and an attorney's opinion.

Acts 1963, ch. 124, § 3; T.C.A., § 64-2703; Acts 1990, ch. 823, § 6.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

Collateral References.

Construction of contractual or state regulatory provisions respecting formation, composition, and powers of governing body of condominium association. 13 A.L.R.4th 598.

66-27-104. Ownership — Building code compliance.

  1. Once the property is submitted to the horizontal property regime, an apartment in the building may be individually conveyed and encumbered and may be the subject of ownership, possession or sale and of all types of juridic acts intervivos or mortis causa, as if it were sole and entirely independent of the other apartments in the building of which they form a part, and the corresponding individual titles and interest shall be recordable.
  2. If private elements are created, the original construction of all apartments must substantially comply with local building codes for planned unit developments, established by the appropriate local authorities for planned unit developments. If no appropriate local authority exists, then compliance must be pursuant to the international building code. A certificate from a professional engineer or architect licensed to practice engineering or architecture in this state, to the effect that construction of the apartments is in substantial compliance with such code, shall be sufficient for the attorney to rely upon in giving an opinion.

Acts 1963, ch. 124, § 4; T.C.A., § 64-2704; Acts 1990, ch. 823, § 7; 2015, ch. 356, § 1.

Amendments. The 2015 amendment substituted “international building code” for “southern standard building code” in the second sentence of (b).

Effective Dates. Acts 2015, ch. 356, § 4. May 4, 2015.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

NOTES TO DECISIONS

1. Encumbered Property.

The Tennessee Horizontal Property Act does not prohibit the establishment of a horizontal property regime on encumbered property. Humphries v. West End Terrace, Inc., 795 S.W.2d 128, 1990 Tenn. App. LEXIS 219 (Tenn. Ct. App. 1990).

66-27-105. Joint ownership.

Any apartment may be held and owned by more than one (1) person, as tenants in common, as tenants by the entirety, or in any other real estate tenancy relationship recognized under the laws of the state.

Acts 1963, ch. 124, § 5; T.C.A., § 64-2705.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-106. Owner's rights — Exclusive and common.

  1. An apartment owner shall have an exclusive ownership to the apartment and shall have a common right to share, with other co-owners, in the common elements of the property. Each co-owner may use the elements held in common in accordance with the purpose for which they are intended.
  2. If a condominium owner is in compliance with the master deed and by-laws, the charter, and any rules and regulations of the horizontal property regime, then the council of co-owners may not deny that condominium owner use and enjoyment of the general common elements of the property.

Acts 1963, ch. 124, § 6; T.C.A., § 64-2706; Acts 2005, ch. 240, § 1.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U. L. Rev. 167 (1975).

66-27-107. Recordation and contents of master deed, lease or declaration.

  1. A master deed, or lease or declaration shall be recorded in the same manner and subject to the same law as are deeds. Plats may likewise be recorded as in the case of recordation of plats as provided by law.
  2. A master deed, or lease or declaration or the plat, or any combination of them, to which § 66-27-103 refers shall express the following particulars:
    1. The description of the land, whether leased or in fee simple, and the building, expressing their respective areas;
    2. The general description and number of each apartment, expressing its area, location and any other data necessary for its identification;
    3. The description of the general common elements of the building, and the limited common elements of the building, and the private elements of the property; and
    4. Bylaws for the administration of the building as in §§ 66-27-111 and 66-27-112 provided.
  3. The common elements, both general and limited, shall remain undivided and shall not be the object of an action for partition or division of co-ownership.
  4. The declaration shall provide that each owner of a private element shall own a pro rata share of the total membership in the townhouse corporation.

Acts 1963, ch. 124, § 7; T.C.A., § 64-2707; Acts 1990, ch. 823, §§ 8-10.

Cross-References. Authentication and registration of deeds required, § 66-5-106.

Duties of register, § 8-13-108.

Registration of instruments, title 66, ch. 24.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-501.

Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U. L. Rev. 167 (1975).

Collateral References.

Failure of vendor to comply with statute or ordinance requiring approval or recording of plat prior to conveyance of property as rendering sale void or voidable. 77 A.L.R.3d 1058.

Standing to bring action relating to real property of condominium. 74 A.L.R.4th 165.

66-27-108. Recordation and conveyance of apartments.

  1. The deed of each individual apartment shall be recorded in the same manner and subject to the same law as are deeds. Likewise shall mortgages of each individual apartment be recorded subject to the law applicable to the recording of mortgages. Likewise shall other instruments conveying or affecting title to individual apartments be recorded as in the case of recording of such instruments affecting title to real property.
  2. Any conveyance of an individual apartment shall be deemed to also convey the undivided interest of the owner in the common elements, both general and limited, appertaining to that apartment without specifically or particularly referring to the same. In the case of private elements, a conveyance shall be deemed to convey the undivided membership of the private element owner in the townhouse corporation.

Acts 1963, ch. 124, § 8; T.C.A., § 64-2708; Acts 1990, ch. 823, § 11.

Cross-References. Authentication and registration of deeds required, § 66-5-106.

Duties of register, § 8-13-108.

Registration of instruments, title 66, ch. 24.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

Collateral References.

Standing to bring action relating to real property of condominium. 74 A.L.R.4th 165.

66-27-109. Merger of filial estates with principal property.

All of the co-owners or the sole owner of a building constituted into a horizontal property regime may by deed waive this regime and regroup or merge the records of the filial estates with the principal property; provided, that the filial estates are unencumbered, or if encumbered, that the creditors in whose behalf the encumbrances are recorded accept as security the undivided portions of the property owned by the debtors.

Acts 1963, ch. 124, § 9; T.C.A., § 64-2709.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U. L. Rev. 167 (1975).

66-27-110. Horizontal property regime following merger.

The merger provided for in § 66-27-109 shall in no way bar the subsequent constitution of the property into another horizontal property regime whenever so desired and upon observance of the provisions of this part.

Acts 1963, ch. 124, § 10; T.C.A., § 64-2710.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U. L. Rev. 167 (1975).

66-27-111. Administrative bylaws recorded.

The administration of every building constituted into horizontal property shall be governed by bylaws which shall be inserted in or appended to and recorded with the master deed or declaration, as the case may be.

Acts 1963, ch. 124, § 11; T.C.A., § 64-2711; Acts 1990, ch. 823, § 12.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U. L. Rev. 167 (1975).

66-27-112. Contents of bylaws — Modification.

  1. The bylaws must necessarily provide for at least the following:
    1. Form of administration, indicating whether this shall be in charge of an administrator or of a board of administration, or otherwise, and specifying the powers, manner of removal, and, where proper, the compensation of such administrator, board of administration, or otherwise;
    2. Method of calling or summoning the co-owners to assembly; that a majority of co-owners is required to adopt decisions; who is to preside over the meeting and who will keep the minute book wherein the resolutions shall be recorded;
    3. Care, upkeep and surveillance of the building and its general or limited common elements and services;
    4. Manner of collecting from the co-owners for the payment of the common expenses; and
    5. Designation and dismissal of the personnel necessary for the works and the general or limited common services of the building.
  2. The sole owner of the building, or if there is more than one (1), the co-owners representing two thirds (2/3) of the total apartments of the building, may at any time modify the system of administration, but each one (1) of the particulars set forth in this section shall always be embodied in the bylaws. No such modification may be operative until it is embodied in a recorded instrument which shall be recorded in the same office and in the same manner as was the master deed or lease or plat and original bylaws of the horizontal property regime involved.

Acts 1963, ch. 124, § 12; T.C.A., § 64-2712.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-502.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

Collateral References.

Validity and construction of condominium association's regulations governing members' use of common facilities. 72 A.L.R.3d 308.

Validity and construction of regulations of governing body of condominium or cooperative apartment pertaining to parking. 60 A.L.R.5th 647.

66-27-113. Administrator's books — Examination by co-owners.

  1. The administrator, or the board of administration, or other form of administration specified in the bylaws, shall keep a book with a detailed account, in chronological order, of the receipts and expenditures affecting the building and its administration and specifying the maintenance and repair expenses of the common elements and any other expenses incurred.
  2. Both the book and the vouchers accrediting the entries made thereupon shall be available for examination by all the co-owners at convenient hours on working days that shall be set and announced for general knowledge.

Acts 1963, ch. 124, § 13; T.C.A., § 64-2713.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U. L. Rev. 167 (1975).

66-27-114. Expenses prorated — No exemptions.

  1. The co-owners of the apartments are bound to contribute pro rata toward the expenses of administration and of maintenance and repair of the general common elements, and, in the proper case, of the limited common elements, of the building, and toward any other expense lawfully agreed upon.
  2. No co-owner may be exempted from contributing toward the expenses in subsection (a) by waiver of the use or enjoyment of the common elements or by abandonment of the apartment belonging to that co-owner or by any other means.

Acts 1963, ch. 124, § 14; T.C.A., § 64-2714.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

Collateral References.

Liability of condominium association or corporation for injury allegedly caused by condition of premises. 45 A.L.R.3d 1171.

66-27-115. Homestead provisions applicable.

The provisions of article XI, § 11 of the Constitution of Tennessee relating to homestead and exemptions and the acts of the general assembly pertaining to or implementing the constitutional provisions shall be applicable to individual apartments which shall have the benefit of such exemptions in those cases the same as in ownership of any other property, and shall inure to the benefit of the owners of such apartments, that is to say, that individual apartments in a horizontal property regime are declared to be homesteads within the purview of article XI, § 11 of the Constitution of Tennessee.

Acts 1963, ch. 124, § 15; T.C.A., § 64-2715.

Cross-References. Homestead exemptions, title 26, ch. 2, part 3.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-116. Prorated expenses and taxes — Lien.

The sale or conveyance of an apartment shall in all cases be subject to all unpaid assessments against the owner thereof for such owner's pro rata share in the expenses to which § 66-27-114 refers and, if the same are not paid by the owner thereof prior to sale or conveyance, shall be a lien against the apartment and shall be paid by the new owner of the apartment. Likewise shall taxes and other levies and assessments by governmental taxing bodies be a lien against individual apartments.

Acts 1963, ch. 124, § 16; T.C.A., § 64-2716.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

Collateral References.

Real estate taxation of condominiums. 71 A.L.R.3d 952.

66-27-117. Building insurance.

The co-owners may, upon resolution of a majority, insure the building against risks, without prejudice to the right of each co-owner to insure such co-owner's apartment on such co-owner's own account and for co-owner's own benefit.

Acts 1963, ch. 124, § 17; T.C.A., § 64-2717.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-118. Reconstruction of damaged building.

  1. In case of fire or any other disaster, the insurance indemnity shall, except as provided in subsection (b), be applied to reconstruct the building.
  2. Reconstruction shall not be compulsory where it comprises the whole or more than two thirds (2/3) of the building. In such case, and unless otherwise unanimously agreed upon by the co-owners, the indemnity shall be delivered pro rata to the co-owners entitled to it in accordance with provision made in the bylaws or in accordance with a decision of three fourths (¾) of the co-owners if there are no bylaw provisions.
  3. Should it be proper to proceed with the reconstruction, the provisions for such eventuality made in the bylaws shall be observed, or in lieu thereof, the decision of the council of co-owners shall prevail.

Acts 1963, ch. 124, § 18; T.C.A., § 64-2718.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-501.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-119. Costs of reconstruction.

  1. Where the building is not insured or where the insurance indemnity is insufficient to cover the cost of reconstruction, the new building costs shall be paid by all the co-owners directly affected by the damage, in proportion to the value of their respective apartments, or as may be provided by the bylaws; and if any one (1) or more of those composing the minority shall refuse to make such payments, the majority may proceed with the reconstruction at the expense of all the co-owners benefited thereby, upon proper resolution setting forth the circumstances of the case and the cost of the works, with the intervention of the council of co-owners.
  2. The provisions of this section may be changed by unanimous resolution of the parties concerned, adopted subsequent to the date on which the fire or other disaster occurred.

Acts 1963, ch. 124, § 19; T.C.A., § 64-2719.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-501.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-120. Identification of estates for taxation, residential ground rent purposes.

  1. Taxes, assessments and other charges of any taxing unit of this state, or of any political subdivision, or any other taxing or assessing authority shall be assessed against and collected on each individual apartment, each of which shall be carried on the tax books as a separate and distinct entity for that purpose, and not on the building or property as a whole. The valuation of the general and limited common elements shall be assessed proportionately among the co-owners of the apartment. The valuation of private elements shall be assessed against the individual owner of the private elements. No forfeiture or sale of the building or property as a whole for delinquent taxes, assessments or charges shall ever divest or in anywise affect the title to an individual apartment so long as taxes, assessments and charges to that individual apartment are currently paid.
  2. When any ground lease affects the underlying land upon which a condominium project is located or is to be located, and if the ground lease so provides, then each apartment and its respective share of the common elements shall be deemed to be and shall be treated as a separate leasehold estate responsible for such taxes, assessments or other charges, as well as such apartment's share of ground rent which might be charged under such ground lease. Such taxes, assessments and charges, as well as such pro rata share of ground rent, shall be the obligation of the respective apartment owner during such owner's tenure as owner and shall be subject to the lien provided in § 66-27-116.
  3. If a ground lessor and a developer have entered into a ground lease of underlying land whereon the developer intends to develop a condominium project, and if the ground lease is one in which a “residential ground rent” is created under chapter 30 of this title, individual apartments and their respective pro rata or otherwise allocated share of general common elements shall be deemed to be separate leasehold estates, and the ground lessor shall agree in all such ground leases that the owners of the individual apartments shall be separate and independent obligors under such ground lease and that the default of one (1) apartment owner shall not be deemed to be a default of all apartment owners in the condominium project. Only those individual apartment owners who default on their allocated share of obligations to the ground lessor, as the same are determined in the master deed, master lease or such ground lease, shall be deemed to be in default with the ground lessor. The ground lessor's remedies are limited to suit and satisfaction of such default from the defaulting apartment owner, the defaulting owner's apartment, and the defaulting owner's allocated interest in the general common elements. The only positive covenant obligations which any apartment owner shall have to the ground lessor shall be:
    1. Payment of pro rata or allocated share of ground rent; and
    2. Payment of pro rata or allocated share of real estate taxes and assessments on the underlying land. The terms and conditions of this subsection (c) shall apply only to agreements creating residential ground rents, where the land is intended by the developer to be developed into condominiums. Any other positive covenant obligations of the obligor, as defined in § 66-30-102, that arises under the ground lease shall be deemed to have been satisfied during the period of construction and development prior to the time that the ground lease allows the closing of the sale of the first apartment. If there are any negative covenant obligations under such ground lease, then they shall be enforceable only against the individual apartment owner in violation thereof and only to the extent that such obligations are reasonably the obligation of an individual apartment owner.

Acts 1963, ch. 124, § 20; 1980, ch. 735, § 2; T.C.A., § 64-2720; Acts 1990, ch. 823, § 13.

Compiler's Notes. Section 3 of Acts 1980, ch. 735 reads in part:

“This act shall be applicable only to agreements which comply with this act and which are executed on or after the effective date hereof [April 3, 1980]. Except as specifically modified herein, the statutes and common law of Tennessee shall be and remain the same.”

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-501.

Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 3.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-121. Supplemental rules and regulations.

Whenever they deem it proper, the planning and zoning commission of any county or municipality may adopt supplemental rules and regulations governing a horizontal property regime established under this part in order to implement this program.

Acts 1963, ch. 124, § 21; T.C.A., § 64-2721.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-122. Construction with other laws.

This part shall be in addition to and supplemental to all other laws of the state; provided, that wherever the application of this part conflicts with the application of such other laws, this part shall prevail.

Acts 1963, ch. 124, § 22; T.C.A., § 64-2722.

Law Reviews.

Condominium Law in Tennessee (Thomas R. Dyer), 5 Mem. St. U.L. Rev. 167 (1975).

66-27-123. Notice to tenant of intent to convert rental units to units for sale.

  1. All owners or lessors of buildings, apartments, rooms, office spaces, or other units, all of which terms in this section shall be referred to as units or unit, which are presently being occupied by one (1) or more persons under a lease or other rental agreement, shall give each tenant at least two (2) months' actual notice of such owner's or lessor's intent to convert such tenant's unit from a rental unit to a condominium, condominium project or other unit which is offered or proposed to be offered for sale. The notice shall specify that the tenant has the right to continue renting such unit at the same rental rate until the expiration of the two-month notice period required by this section.
  2. No sale of a unit which was converted from a rental unit to a unit offered for sale to a person other than the tenant last renting such unit shall be valid unless such tenant has received two (2) months' actual notice of the owner's or lessor's intent to convert such unit. This provision shall apply regardless of whether the tenant's lease or other rental agreement expires prior to the end of the two-month notice period.
  3. If an owner or lessor converts a rental unit to a unit offered for sale without giving the tenant of such unit at least two (2) months' actual notice of the conversion, such tenant may elect to remain, with or without a lease, in the unit at the same rental rate until the expiration of a two-month period from the date the tenant received such actual notice or the tenant may vacate the unit immediately upon receiving such actual notice and the owner or lessor shall pay such tenant all reasonable expenses incurred in moving to another location. If a tenant is in a position to make the election provided by this subsection (c) and does not vacate the premises immediately, the owner or lessor shall not be obligated to pay the tenant's moving expenses. The election provided by this subsection (c) shall apply regardless of whether the tenant's lease or other rental agreement has or would have expired prior to the end of the two-month notice period.
  4. If it is necessary for a tenant to institute a court action to enforce this section and the tenant is the prevailing party, the court shall require the owner or lessor to reimburse the tenant for all reasonable costs incurred in bringing such action, including attorney fees, and shall tax all court costs against the owner or lessor.
  5. This section shall apply to all units which are converted from rental units to units offered for sale on or after December 1, 1979; provided, that this section shall apply only to Class 1 and Class 2 counties as established by § 8-24-101.

Acts 1979, ch. 293, §§ 1-3; T.C.A., § 64-2723.

Attorney General Opinions. Constitutionality of regulation of conversion of rental property to residential use, OAG 83-062, 1983 Tenn. AG LEXIS 344 (2/14/83).

Part 2
Tennessee Condominium Act of 2008 — General Provisions

66-27-201. Short title.

This part and parts 3-5 of this chapter shall be known and may be cited as the “Tennessee Condominium Act of 2008.”

Acts 2008, ch. 766, § 1.

66-27-202. Applicability.

  1. This part and parts 3-5 of this chapter apply to all condominiums created within this state after January 1, 2009. Sections 66-27-205 — 66-27-207; 66-27-303; 66-27-304; 66-27-402(a)(1)-(6) and (11)-(16); 66-27-411; 66-27-414(g); 66-27-415; 66-27-417; part 5 of this chapter; and § 66-27-203, to the extent necessary in construing any of the sections listed in this subsection (a), apply to all condominiums created in this state before January 1, 2009; but those sections apply only with respect to events and circumstances occurring after January 1, 2009, and, with the exception of § 66-27-414(g), do not invalidate or supersede existing provisions of the master deed, master lease, declaration, bylaws or plats of those condominiums existing on January 1, 2009.
  2. Part 1 of this chapter does not apply to condominiums created after January 1, 2009, and does not invalidate any amendment adopted after January 1, 2009, to the master deed, bylaws, or plats of any condominium created before January 1, 2009, if the amendment would be permitted by this part and parts 3-5 of this chapter. The amendment must be adopted in conformity with the procedures and requirements specified by those instruments and by part 1 of this chapter. If the amendment grants to any person any rights, powers, or privileges permitted by this part and parts 3-5 of this chapter, all correlative obligations, liabilities, and restrictions in this part and parts 3-5 of this chapter also apply to that person.
  3. Condominiums existing before January 1, 2009, may elect to be governed by this part and parts 3-5 of this chapter in their entirety by amending and restating their then existing master deed, bylaws, and plat or plats in a manner that satisfies the requirements of subsection (b) and any additional requirements applicable to a condominium created under this part and parts 3-5 of this chapter. Condominiums created before January 1, 2009, may elect to be governed by this part and parts 3-5 of this chapter by specifically electing to do so in their master deed, master lease, or declaration and by satisfying all requirements applicable to a condominium created under this part and parts 3-5 of this chapter.
  4. This part and parts 3-5 of this chapter do not apply to condominiums or units located outside this state.

Acts 2008, ch. 766, § 1; 2009, ch. 215, § 1.

NOTES TO DECISIONS

1. Construction.

“Events and circumstances” are not defined within the statute, and nor is there any existing case law defining this phrase; thus, the statute must be construed giving the words their natural and ordinary meaning in the context in which they appear and in light of the general purpose of the statute, and applying their natural and ordinary meaning to the words, an event or circumstance is synonymous with an occurrence or something that happens or takes place. Holloway v. Tanasi Shores Owners Ass'n, — S.W.3d —, 2019 Tenn. App. LEXIS 217 (Tenn. Ct. App. May 6, 2019).

66-27-203. Definitions for parts 2–5.

In the declaration and bylaws, unless specifically provided otherwise or the context otherwise requires, and in this part and parts 3-5 of this chapter:

    1. “Affiliate of a declarant” means any person who controls, is controlled by, or is under common control with a declarant;
    2. A person “controls” a declarant if the person:
      1. Is a general partner, officer, director, manager or managing member, or employer of the declarant;
      2. Directly or indirectly or acting in concert with one (1) or more other persons, or through one (1) or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent (20%) of the voting interest in the declarant; or
      3. Controls in any manner the election of a majority of the directors, managers, or managing members of the declarant;
    3. A person “is controlled by” a declarant if the declarant:
      1. Is a general partner, officer, director, manager, managing member or employer of the person;
      2. Directly or indirectly or acting in concert with one (1) or more other persons, or through one (1) or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent (20%) of the voting interest in the person; or
      3. Controls in any manner the election of a majority of the directors, managers, or managing members of the person;
    4. Control does not exist if the powers described in this subdivision (1) are held solely as security for an obligation and are not exercised;
  1. “Allocated interests” means the undivided interest in the common elements, the common expense liability, and votes in the association allocated to each unit;
  2. “Association” means the unit owners' association organized under § 66-27-401;
  3. “Board of directors” means the body, regardless of name, designated in the declaration to act on behalf of the association;
  4. “Common elements” means all portions of a condominium other than the units;
  5. “Common expense liability” means the liability for common expenses allocated to each unit pursuant to § 66-27-307;
  6. “Common expenses” means actual or anticipated expenditures made by or financial liabilities of the association, together with any allocations to reserves;
  7. “Condominium” means real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those portions by the recording of a declaration pursuant to the terms of this part and parts 3-5 of this chapter. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners pursuant to a declaration recorded under this part and parts 3-5 of this chapter or prior law applicable to the declaration;
  8. “Conversion building” means a building that at any time before creation of the condominium was occupied wholly or partially by persons other than purchasers;
  9. “Declarant” means any person or group of persons acting in concert who:
    1. As part of a common promotional plan, offers to dispose of the person's or group’s interest in a unit not previously disposed of, and files a declaration pursuant to this part and parts 3-5 of this chapter; or
    2. Reserves or succeeds to any special declarant or development right;
  10. “Declaration” means any instruments, however denominated, that create a condominium, and any amendments to those instruments;
  11. “Development rights” means any right or combination of rights reserved by a declarant in the declaration:
    1. To add real estate to a condominium;
    2. To create units, common elements, or limited common elements within a condominium;
    3. To allocate limited common elements, other than those described in §§ 66-27-302 and 66-27-304, to specific units;
    4. To grant licenses for parties who are not unit owners to use portions of the common elements or limited common elements, subject to an obligation to pay an equitable share of the common expenses attributable to the licensed common elements or limited common elements;
    5. To the extent not otherwise permitted as a right held by unit owners as provided in § 66-27-313(a), to subdivide units or convert units into common elements; or
    6. To withdraw real estate from a condominium;
  12. “Dispose” or “disposition” means a voluntary transfer to a purchaser of any legal or equitable interest in a unit, but does not include the transfer or release of a security interest;
  13. “Identifying number” means a symbol, name, or address that identifies only one (1) unit in a condominium;
  14. “Leasehold condominium” means a condominium in which all or a portion of the real estate is subject to a lease, the expiration or termination of which will terminate the condominium or reduce its size;
  15. “Limited common element” means a portion of the common elements allocated by the declaration or by operation of § 66-27-302(2) or (4) for the exclusive use of one (1) or more, but fewer than all, of the units;
  16. “Master association” means an organization described in § 66-27-321, whether or not it is also an association described in § 66-27-401;
  17. “Person” means a natural person, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision or agency, or other legal or commercial entity;
  18. “Purchaser” means any person, other than a declarant, who by means of a contract or voluntary transfer acquires a legal or equitable interest in a unit other than:
    1. A leasehold interest, including renewal options, of less than twenty (20) years; or
    2. As security for an obligation, or in connection with the enforcement of an obligation;
  19. “Real estate” means any leasehold or other estate or interest in, over, or under land, including structures, fixtures, and other improvements and interests that by custom, usage, or law pass with a conveyance of land, though not described in the contract of sale or instrument of conveyance. “Real estate” includes parcels with or without upper or lower boundaries, and spaces that may be filled with air or water;
  20. “Residential purposes” means use for dwelling or non-commercial recreational purposes, or both;
  21. “Special declarant rights” means rights, reserved for the benefit of a declarant:
    1. To complete improvements indicated on plats and plans filed with the declaration pursuant to § 66-27-309;
    2. To exercise any development right pursuant to § 66-27-310;
    3. To maintain sales offices, management offices, signs advertising the condominium, and models pursuant to § 66-27-315;
    4. To use easements through the common elements for the purpose of making improvements within the condominium or within real estate that may be added to the condominium pursuant to § 66-27-316;
    5. To make the condominium part of a larger condominium or a planned community pursuant to § 66-27-323;
    6. To make the condominium subject to a master association pursuant to § 66-27-321;
    7. To appoint or remove any officer of the association or any master association or any member of the board of directors during any period of declarant control pursuant to § 66-27-403(c); or
    8. To exercise any other rights reserved to the declarant in the declaration;
  22. “Unit” means a physical portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described pursuant to § 66-27-305(a)(4); and
  23. “Unit owner” means a declarant or other person who owns a unit, or a lessee of a unit in a leasehold condominium whose lease expires simultaneously with any lease, the expiration or termination of which will remove the unit from the condominium, but does not include a person having an interest in a unit solely as security for an obligation.

Acts 2008, ch. 766, § 1.

66-27-204. Variation by agreement.

Except as expressly provided in this part and parts 3-5 of this chapter, this part and parts 3-5 of this chapter may not be varied by agreement, and rights conferred by this part and parts 3-5 of this chapter may not be waived. A declarant may not act under a power of attorney, or use any other device, to evade the limitations or prohibitions of this part and parts 3-5 of this chapter or the declaration.

Acts 2008, ch. 766, § 1.

66-27-205. Separate titles and taxation.

  1. If there is any unit owner other than a declarant, each unit that has been created, together with its interest in the common elements, constitutes for all purposes a separate parcel of real estate.
  2. If there is any unit owner other than a declarant, each unit must be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements.
  3. If there is no unit owner other than a declarant, the real estate comprising the condominium may be taxed and assessed in any manner provided by law.

Acts 2008, ch. 766, § 1.

66-27-206. Applicability of local ordinances, regulations, and building codes.

A zoning, subdivision, building code, or other real estate use law, ordinance, or regulation may not prohibit the condominium form of ownership or impose any requirement upon a condominium that it would not impose upon a physically identical development under a different form of ownership. Otherwise, no provision of this part and parts 3-5 of this chapter invalidates or modifies any zoning, subdivision, building code, or other real estate use law, ordinance, or regulation.

Acts 2008, ch. 766, § 1.

66-27-207. Eminent domain.

  1. If a unit is acquired by eminent domain, or if part of a unit is acquired by eminent domain leaving the unit owner with a remnant that may not practically or lawfully be used for all purposes permitted by the declaration, the award must compensate the unit owner for the unit owner's unit and its interest in the common elements, whether or not any common elements are acquired. Upon acquisition, unless the decree otherwise provides, that unit's allocated interests are automatically reallocated to the remaining units in proportion to the respective allocated interests of those units before the taking, and the association shall promptly prepare, execute, and record an amendment to the declaration reflecting the reallocations. Any remnant of a unit remaining after part of a unit is taken under this subsection (a) is thereafter a common element.
  2. Except as provided in subsection (a), if part of a unit is acquired by eminent domain, the award must compensate the unit owner for the reduction in value of the unit and its interest in the common elements, whether or not any common elements are acquired. Upon acquisition, unless the decree otherwise provides that a unit's allocated interests are reduced in proportion to the reduction in the size of the unit, or on any other basis specified in the declaration, the portion of the allocated interests divested from the partially acquired unit are automatically reallocated to that unit and the remaining units in proportion to the respective allocated interests of those units before the taking, with the partially acquired unit participating in the reallocation on the basis of its reduced allocated interests.
  3. If part of the common elements is acquired by eminent domain, the portion of the award attributable to the common elements taken must be paid to the association. Unless the declaration provides otherwise, any portion of the award attributable to the acquisition of a limited common element must be equally divided among the owners of the units to which that limited common element was allocated at the time of acquisition.
  4. The court decree shall be recorded in every county in which any portion of the condominium is located.

Acts 2008, ch. 766, § 1; 2015, ch. 356, § 2.

Amendments. The 2015 amendment to (b) deleted “and” preceding “the portion of the allocated interests”.

Effective Dates. Acts 2015, ch. 356, § 4. May 4, 2015.

66-27-208. Supplemental general principles of law applicable.

The principles of law and equity, including the law of corporations and unincorporated associations and limited liability companies, the law of real property and the law relative to capacity to contract, principal and agent, eminent domain, estoppel, fraud, misrepresentation, duress, coercion, mistake, receivership, substantial performance, or other validating or invalidating cause supplement this part and parts 3-5 of this chapter, except to the extent inconsistent with this part and parts 3-5 of this chapter.

Acts 2008, ch. 766, § 1.

66-27-209. Construction against implicit repeal.

This part and parts 3-5, being general parts intended as a unified coverage of their subject matter, no part of them shall be construed to be implicitly repealed by subsequent legislation if that construction can reasonably be avoided.

Acts 2008, ch. 766, § 1.

66-27-210. Severability.

If any provision of this part and parts 3-5 of this chapter or the application of any provision to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this part and parts 3-5 of this chapter that can be given effect without the invalid provisions or applications, and to this end the provisions of this part and parts 3-5 of this chapter are severable.

Acts 2008, ch. 766, § 1.

66-27-211. Enforcement.

In addition to any other remedy provided by the declaration, any right or obligation declared by this part and parts 3-5 of this chapter is enforceable by judicial proceeding. If any person subject to this part and parts 3-5 of this chapter fails to comply with this part and parts 3-5 of this chapter or any provision of the declaration or bylaws, any person or class of persons adversely affected by the failure to comply has a claim for appropriate relief. The court, in an appropriate case involving willful failure to comply with this part and parts 3-5 of this chapter, or any provision of the declaration or bylaws, may award reasonable attorney's fees.

Acts 2008, ch. 766, § 1.

Part 3
Tennessee Condominium Act of 2008 — Units and Allocation of Common and Limited Elements

66-27-301. Creation of condominium.

  1. A condominium may be created pursuant to part 2, this part and parts 4 and 5 of this chapter only by recording a declaration executed in the same manner as a deed. The declaration shall be recorded in every county in which any portion of the condominium is located, and shall be indexed in the grantee's index in the name of the condominium and the association and in the grantor's index in the name of each person executing the declaration. The name and address of the preparer shall appear as required by § 66-24-115.
  2. A residential unit that shares a horizontal boundary with another unit, other than a unit that is subject to retained development rights, may not be conveyed to a purchaser until all structural components and mechanical systems of all buildings containing or comprising the unit are substantially completed.

Acts 2008, ch. 766, § 1; 2015, ch. 356, § 3.

Amendments. The 2015 amendment to (a) deleted “on the first page of the declaration,” following “shall appear”.

Effective Dates. Acts 2015, ch. 356, § 4. May 4, 2015.

66-27-302. Unit boundaries.

Except as provided by the declaration:

  1. If walls, floors or ceilings are designated as boundaries of a unit, all lath, furring, wallboard, plasterboard, plaster, paneling, tiles, wallpaper, paint, finished flooring, and any other materials constituting any part of the finished surfaces of the walls, floor or ceilings are a part of the unit, and all other portions of the walls, floors, or ceilings are a part of the common elements;
  2. If any chute, flue, duct, wire, conduit, bearing wall, bearing column, or any other fixture lies partially within and partially outside the designated boundaries of a unit, any portion of the chute, flue, duct, wire, conduit, bearing wall, bearing column, or other fixture serving only that unit is a limited common element allocated solely to that unit, and any portion of the chute, flue, duct, wire, conduit, bearing wall, bearing column, or other fixture serving more than one (1) unit or any portion of the common elements is a part of the common elements;
  3. Subject to subdivision (2), all spaces, interior partitions, and other fixtures and improvements within the boundaries of a unit are a part of the unit; and
  4. Any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patios, and all exterior doors and windows or other fixtures designed to serve a single unit, but located outside the unit's boundaries, are limited common elements allocated exclusively to that unit.

Acts 2008, ch. 766, § 1.

66-27-303. Construction and validity of declaration and bylaws.

  1. All provisions of the declaration and bylaws are severable.
  2. The rule against perpetuities may not be applied to defeat any provision of the declaration, or the bylaws, rules, or regulations adopted pursuant to § 66-27-402(a)(1).
  3. In the event of a conflict between the declaration and the bylaws, the declaration prevails except to the extent the declaration is inconsistent with part 2, this part and parts 4 and 5 of this chapter.
  4. Title to a unit and common elements is not rendered unmarketable or otherwise affected by reason of an insubstantial failure of the declaration to comply with part 2, this part and parts 4 and 5 of this chapter. Whether a substantial failure impairs marketability is not affected by part 2, this part and parts 4 and 5 of this chapter.

Acts 2008, ch. 766, § 1.

NOTES TO DECISIONS

1. Applicability.

Statute applied to the case because the event or circumstance that occurred was the aging, weathering, or perhaps damage to decks to an extent that necessitated that repairs be made, and those events and circumstances occurred after January 1, 2009. Holloway v. Tanasi Shores Owners Ass'n, — S.W.3d —, 2019 Tenn. App. LEXIS 217 (Tenn. Ct. App. May 6, 2019).

2. Repairs.

Unit owners were responsible for the repairs to their decks because pursuant to the declaration, decks and porches were part of the condominium unit, not common areas, making the owners responsible for maintenance and repair of the decks connected to their respective condominium units. Holloway v. Tanasi Shores Owners Ass'n, — S.W.3d —, 2019 Tenn. App. LEXIS 217 (Tenn. Ct. App. May 6, 2019).

66-27-304. Description of units.

A description of a unit that sets forth the name of the condominium, the recording data for the declaration, the county in which the condominium is located, and the identifying number of the unit, is a sufficient legal description of that unit and all rights, obligations, and interests appurtenant to that unit that were created by the declaration or bylaws.

Acts 2008, ch. 766, § 1.

66-27-305. Contents of declaration.

  1. The declaration for a condominium must contain:
    1. The name of the condominium, which must include the word “condominium” or be followed by the words “a condominium”, and the association;
    2. The name of every county in which any part of the condominium is situated;
    3. A legally sufficient description of the real estate included in the condominium, including a recital pursuant to § 66-24-110;
    4. A description of the boundaries of each unit created by the declaration, including the unit's identifying number;
    5. A description of any limited common elements, other than those specified in § 66-27-302(2) and (4), as provided in § 66-27-309(b)(10);
    6. A description of any real estate, except real estate subject to development rights, that may be allocated subsequently as limited common elements, other than limited common elements specified in § 66-27-302(2) and (4), together with a statement that they may be so allocated;
    7. A description of any development rights and other special declarant rights as defined by § 66-27-203, reserved by the declarant; provided, that, prior to the exercise of any such rights, no consent or joinder by the holder of the right to the termination of the condominium shall be required;
    8. If any development right may be exercised with respect to different parcels of real estate, a statement to that effect, together with a statement fixing the boundaries of those portions and regulating the order in which those portions may be subjected to the exercise of each development right; provided, that, if the declaration does not provide that the right must be exercised at a specific time, in a particular order, or with respect to all of the real estate, then the right may be exercised at any time, in any order, or with respect to any portion of the real estate;
    9. Any conditions or limitations under which the rights described in subdivision (a)(7) may be exercised or will lapse;
    10. An allocation to each unit of the allocated interests in the manner described in § 66-27-307;
    11. Any restrictions on use, occupancy, and alienation of the units; and
    12. All matters required by §§ 66-27-306, 66-27-307, 66-27-308, 66-27-309, 66-27-315, 66-27-316, and 66-27-403(c).
  2. The declaration may contain any other matters the declarant deems appropriate.

Acts 2008, ch. 766, § 1.

66-27-306. Leasehold condominiums.

  1. Any lease, the expiration or termination of which may terminate the condominium or reduce its size, shall be recorded. The declaration for the condominium shall state:
    1. The recording data;
    2. The date on which the lease is scheduled to expire;
    3. A legally sufficient description of the real estate subject to the lease;
    4. Any right of the unit owners to acquire the fee simple estate and the manner whereby those rights may be exercised, or a statement that they do not have those rights;
    5. Any right of the unit owners to remove any improvements within a reasonable time after the expiration or termination of the lease, or a statement that they do not have those rights; and
    6. Any rights of the unit owners to renew the lease and the conditions of any renewal, or a statement that they do not have those rights.
  2. After the declaration for a leasehold condominium is recorded, neither the lessor nor the lessor's successor in interest may terminate the leasehold interest of a unit owner who makes timely payment of the unit owner’s share of the rent and otherwise complies with all covenants that, if violated, would entitle the lessor to terminate the lease. A unit owner's leasehold interest is not affected by failure of any other person to pay rent or fulfill any other covenant; provided, that, this subsection (b) shall not prohibit the lessor from acquiring the interest of the defaulting owner, subject to the declaration.
  3. Acquisition of the leasehold interest of any unit owner by the owner of the reversion or remainder does not merge the leasehold and fee simple interests, unless the leasehold interests of all unit owners subject to that reversion or remainder are acquired.
  4. If the expiration or termination of a lease decreases the number of units in a condominium, the allocated interests shall be reallocated in accordance with § 66-27-207(a) as though those units had been taken by eminent domain. Reallocations shall be confirmed by an amendment to the declaration prepared, executed, and recorded by the association.
  5. Unless the lease described in subsection (a) includes covenants for the benefit of unit owners as set forth in subsections (b) and (c), the lessor under the lease must sign the declaration for the limited purpose of affirming that the lease is subject to those covenants.

Acts 2008, ch. 766, § 1.

66-27-307. Allocation of common element interests, votes, and common expense liabilities.

  1. The declaration shall allocate a fraction or percentage of undivided interests in the common elements and in the common expenses of the association, and a portion of the votes in the association, to each unit and state the formulas or methods used to establish those allocations. Those allocations may not discriminate in favor of units owned by the declarant.
  2. If units may be added to or withdrawn from the condominium, the declaration must state the formulas or methods to be used to reallocate the allocated interests among all units included in the condominium after the addition or withdrawal.
    1. The declaration may provide:
      1. That different allocations of votes shall be made to the units on particular matters specified in the declaration;
      2. For cumulative voting only for the purpose of electing members of the board of directors; and
      3. For class voting on specified issues affecting the class if necessary to protect valid interests of the class.
    2. A declarant may not utilize cumulative or class voting for the purpose of evading any limitation imposed on declarants by part 2, this part and parts 4 and 5 of this chapter, nor may units constitute a class because they are owned by a declarant.
  3. Except for minor variations due to rounding, the sum of the undivided interests in the common elements and common expense liabilities allocated at any time to all the units must each equal one (1) if stated as fractions or one hundred percent (100%) if stated as percentages. In the event of discrepancy between an allocated interest and the result derived from application of the pertinent formula or method, the allocated interest prevails.
  4. The common elements are not subject to partition, and any purported conveyance, encumbrance, judicial sale, or other voluntary or involuntary transfer of an undivided interest in the common elements made without the unit to which that interest is allocated, is void.
  5. Any common elements that may be licensed by the declarant pursuant to § 66-27-203(12)(D) shall be described in the declaration. The declaration shall also provide a method of equitably allocating the common expenses attributable to the common elements to the declarant, and assessing the expenses to the declarant or the holder of such rights. The association shall have a lien on the rights to secure payment of the expenses in accordance with § 66-27-415.

Acts 2008, ch. 766, § 1.

66-27-308. Allocation of limited common elements.

    1. Except for the limited common elements described in § 66-27-302(2) and (4), the declaration shall specify either:
      1. To which unit or units each limited common element is allocated; or
      2. Which common elements or limited common elements may be allocated or licensed by conveyance from the declarant.
    2. The allocation may not be altered without the consent of the unit owners whose units are affected.
  1. Except as the declaration otherwise provides, and subject to approval by the association, a limited common element may be reallocated by an instrument executed by the unit owners between or among whose units the reallocation is made, and by the association. The instrument shall be prepared and recorded by the association at the expense of the reallocating unit owners. The instrument shall be recorded in the names of the parties and the condominium.
  2. A common element not previously allocated as a limited common element may not be so allocated except pursuant to provisions in the declaration made in accordance with § 66-27-305(a)(6). The allocations shall be made by amendments to the declaration.
  3. Any limited common elements that may be licensed by the declarant pursuant to § 66-27-203(12)(D) shall be described in the declaration. The declaration shall also provide a method of equitably allocating the common expenses attributable to the limited common elements to the declarant, and assessing the expenses to the declarant or the holder of such rights. The association shall have a lien on the rights to secure payment of the expenses in accordance with § 66-27-415.

Acts 2008, ch. 766, § 1.

66-27-309. Plats and plans.

  1. Plats and plans are a part of the declaration. Separate plats and plans are not required by part 2, this part and parts 4 and 5 of this chapter if all the information required by this section is contained in either a plat or plan. Each plat and plan must be clear and legible and must contain all information required by this section. The plat or plan, or both, can be attached to the declaration and incorporated in the declaration, or it or they may be referenced in the declaration and recorded in a plat book at the appropriate register's office. In either event, the plat or plats, plan or plans, or both, shall be deemed acceptable for recording without further action if it or they comply with this section. Each plat or plan must be clear and legible and contain a certification that the plat or plan contains all information required by this section.
  2. Each plat must show:
    1. The name and a survey or general schematic map of the entire condominium;
    2. The location and dimensions of all real estate not subject to development rights, or subject only to the development right to withdraw, and the location of all existing improvements within that real estate;
    3. A legally sufficient description of any real estate subject to development rights, labeled to identify the rights applicable to each parcel;
    4. The extent of any encroachments by or upon any portion of the condominium;
    5. To the extent feasible, a legally sufficient description of all easements serving or burdening any portion of the condominium;
    6. The location and dimensions of any vertical unit boundaries not shown or projected on plans recorded pursuant to subsection (d) and that unit's identifying number;
    7. The location, with reference to an established datum, floor number, elevation, or other appropriate means of designation of any horizontal unit boundaries not shown or projected on plans recorded pursuant to subsection (d) and that unit's identifying number;
    8. A legally sufficient description of any real estate in which the unit owners will own only an estate for years, labeled as “leasehold real estate”;
    9. The distance between noncontiguous parcels of real estate comprising the condominium; and
    10. Limited common elements, consisting of porches, balconies and patios.
  3. A plat may also show the intended location and dimensions of any contemplated improvement to be constructed anywhere within the condominium. Any contemplated improvement shown must be built or labeled “NEED NOT BE BUILT”.
  4. To the extent not shown or projected on the plats or disclosed in the declaration, plans of the units must show or project:
    1. The location and dimensions of the vertical boundaries of each unit, and that unit's identifying number;
    2. Any horizontal unit boundaries, either by floor number, elevation, or other appropriate means of designation, and that unit's identifying number; and
    3. To the extent not disclosed in the declaration, any units in which the declarant has reserved the right to create additional units or common elements pursuant to § 66-27-310(c), identified appropriately.
  5. Unless the declaration provides otherwise, the horizontal boundaries of part of a unit located outside of a building have the same elevation as the horizontal boundaries of the inside part, and need not be depicted on the plats and plans.
  6. Upon exercising any development right, the declarant shall record either new plats and plans necessary to conform to the requirements of subsections (a), (b) and (d), or new certifications of plats and plans previously recorded if those plats and plans otherwise conform to the requirements of subsections (a), (b) and (d).
  7. Any certification of a plat or plan required by this section must be made and signed in original by an independent, registered surveyor, architect or engineer, or combination of independent, registered surveyor, architect and engineer.

Acts 2008, ch. 766, § 1.

66-27-310. Exercise of development rights.

  1. To exercise any development right reserved under § 66-27-305(a)(7), the declarant shall prepare, execute, and record an amendment to the declaration pursuant to § 66-27-317 and comply with § 66-27-309. The declarant is the unit owner of any units thereby created. The amendment to the declaration must assign an identifying number to each new unit created, and, except in the case of subdivision or conversion of units described in subsection (b), reallocate the allocated interests among all units. The amendment must describe any common elements and any limited common elements thereby created and, in the case of limited common elements, designate the unit to which each is allocated to the extent required by § 66-27-308.
  2. Development rights may be reserved within any real estate added to the condominium if the amendment adding that real estate includes all matters required by § 66-27-305 or § 66-27-306, as the case may be, and the plats and plans include all matters required by § 66-27-309. This subsection (b) does not extend any time limit on the exercise of development rights imposed by the declaration.
  3. Whenever a declarant exercises a development right to subdivide or convert a unit previously created into additional units or common elements, or both:
    1. If the declarant converts the unit entirely to common elements, the amendment to the declaration must reallocate all the allocated interests of that unit among the other units as if that unit had been taken by eminent domain pursuant to § 66-27-207.
    2. If the declarant subdivides the unit into two (2) or more units, whether or not any part of the unit is converted into common elements, the amendment to the declaration must reallocate all the allocated interests of the unit among the units created by the subdivision in any reasonable manner prescribed by the declarant.
  4. If the declaration provides, pursuant to § 66-27-305(a)(7), that all or a portion of the real estate is subject to the development right of withdrawal:
    1. If all the real estate is subject to withdrawal, and the declaration does not describe separate portions of real estate subject to that right, none of the real estate may be withdrawn after a unit has been conveyed to a purchaser; and
    2. If a portion or portions are subject to withdrawal, no portion may be withdrawn after a unit in that portion has been conveyed to a purchaser.

Acts 2008, ch. 766, § 1.

66-27-311. Alterations of units.

Subject to the declaration and other law, a unit owner:

  1. May make any improvements or alterations to the unit owner's unit that do not impair the structural integrity or mechanical systems or lessen the support of any portion of the condominium;
  2. May not change the appearance of the common elements, or the exterior appearance of a unit or any other portion of the condominium, without permission of the association; and
  3. After acquiring an adjoining unit or an adjoining part of an adjoining unit, may remove or alter any intervening partition or create apertures in the intervening partition, even if the partition, in whole or in part, is a common element, if those acts do not impair the structural integrity or mechanical systems or lessen the support of any portion of the condominium. Removal of partitions or creation of apertures under this subdivision (3) is not an alteration of boundaries. The owner of any adjoining unit affected by the removal of partitions or creation of apertures shall have the right to restore the removed partitions to their original condition or to close any apertures created.

Acts 2008, ch. 766, § 1.

66-27-312. Relocation of boundaries between adjoining units.

  1. Subject to the declaration and other law, the boundaries between adjoining units may be relocated by an amendment to the declaration upon application to the association by the owners of those units. If the owners of the adjoining units have specified a reallocation between their units of their allocated interests, the application must state the proposed reallocations. Unless the board of directors determines within thirty (30) days that the reallocations are unreasonable, the association shall prepare an amendment, at the expense of the affected unit owners, that identifies the units involved, states the reallocations, is executed by those unit owners and the association, to evidence compliance with this subsection (a), contains words of conveyance between the affected unit owners, and upon recordation, is indexed in the name of the grantor and the grantee.
  2. The association shall prepare and record plats or plans necessary to show the altered boundaries between adjoining units, and their dimensions and identifying numbers, at the expense of the applicant owners.

Acts 2008, ch. 766, § 1.

66-27-313. Subdivision of units.

  1. In addition to any development rights relating to the subdivision of units that may be reserved to the declarant, if the declaration expressly so permits, a unit owner may subdivide a unit into two (2) or more units. Subject to the declaration and other law, upon application of a unit owner to subdivide a unit, the association shall prepare, execute, and record an amendment to the declaration, including the plats and plans, subdividing that unit, at the expense of the owner of the unit to be subdivided.
  2. The amendment to the declaration must be executed by the owner of the unit to be subdivided, assign an identifying number to each unit created, and reallocate the allocated interests formerly allocated to the subdivided unit to the new units in any reasonable manner prescribed by the owner of the subdivided unit.

Acts 2008, ch. 766, § 1.

66-27-314. Monuments as boundaries.

The existing physical boundaries of a unit or the physical boundaries of a unit reconstructed in substantial accordance with the original plats and plans of the unit become its boundaries rather than the metes and bounds expressed in the deed or plat or plan, regardless of settling or lateral movement of the building, or minor variance between boundaries shown on the plats or plans or in the deed and those of the building. This section does not relieve a unit owner of liability in case of the owner's willful misconduct nor relieve a declarant or any other person of liability for failure to adhere to the plats and plans.

Acts 2008, ch. 766, § 1.

66-27-315. Use for sales purposes.

A declarant may maintain sales offices, management offices, and models in units owned by the declarant. The declarant may maintain sales offices on common elements in the condominium only if the declaration so provides and specifies the rights of a declarant with regard to the sales offices. Any sales office, management office, or model not designated a unit by the declaration is a common element, and if a declarant ceases to be a unit owner or holder of a development right to create additional units, the declarant ceases to have any rights with regard to the units or in any personal property owned by the declarant and used in connection with the units, unless it is removed from the condominium after notice from the association specifying a reasonable period for the removal. Subject to any limitations in the declaration, a declarant may maintain signs on the common elements advertising the condominium. Any rights reserved to the declarant under this section may be exercised by an agent of the declarant. This section is subject to other state law and local ordinances.

Acts 2008, ch. 766, § 1.

66-27-316. Easement rights.

Subject to the declaration, a declarant has an easement through the common elements as may be reasonably necessary for the purpose of discharging the declarant's obligations or exercising special declarant rights, whether arising under part 1, this part and parts 4 and 5 of this chapter or reserved in the declaration.

Acts 2008, ch. 766, § 1.

66-27-317. Amendment of declaration.

  1. Except in cases of amendments that may be executed by a declarant under § 66-27-309(f) or § 66-27-310, the association under § 66-27-207, § 66-27-306(d), § 66-27-308(c), § 66-27-312(a), or § 66-27-313, or certain unit owners under § 66-27-308(b), § 66-27-312(a), § 66-27-313(b), or § 66-27-318(b), and except as limited by subsections (d) or (e) of this section, the declaration, including the plats and plans, may be amended only by vote or agreement of unit owners of units to which at least sixty-seven percent (67%) of the votes in the association are allocated, or any larger majority the declaration specifies. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential use.
  2. No action to challenge the validity of an amendment adopted by the association pursuant to this section may be brought more than one (1) year after the amendment is recorded.
  3. Every amendment to the declaration must be recorded in every county in which any portion of the condominium is located, and is effective only upon recordation. An amendment shall be indexed in the grantee's index in the name of the condominium and the association and in the grantor's index in the name of the parties executing the amendment.
  4. Except to the extent expressly permitted or required by part 1, this part and parts 4 and 5 of this chapter, no amendment may change the boundaries of any unit, or the allocated interests of a unit, or prohibit the leasing of any unit, in the absence of the consent of all affected unit owners.
  5. Except to the extent expressly permitted or required by part 1, this part and parts 4 and 5 of this chapter, no amendment may increase special declarant rights without the consent of sixty-seven percent (67%) of the votes of the association other than the declarant.
  6. Amendments to the declaration required by part 1, this part and parts 4 and 5 of this chapter to be recorded by the association shall be prepared, executed, recorded, and certified on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association.

Acts 2008, ch. 766, § 1.

66-27-318. Termination of condominium.

  1. Except in the case of a taking of all the units by eminent domain pursuant to § 66-27-207, a condominium may be terminated only by agreement of unit owners of units to which at least eighty percent (80%) of the votes in the association are allocated, and eighty percent (80%) of those lenders having first mortgage liens on any unit or units to which eighty percent (80%) of the votes in the association are allocated. The declaration may specify a larger percentage in either instance, and may specify that a lender is deemed to approve the termination if notice is sent to the last address of that lender on file with the association, or if none, as specified in the lender's first mortgage lien of record, and no objection is received within thirty (30) days thereafter. The declaration may specify a smaller percentage only if all of the units in the condominium are restricted exclusively to nonresidential uses.
  2. An agreement to terminate must be evidenced by the execution of a termination agreement, or ratifications of a termination agreement, in the same manner as a deed, by the requisite number of unit owners. The termination agreement may specify a date after which the agreement will be void unless it is recorded before that date. A termination agreement and all ratifications of the termination agreement must be recorded in every county in which a portion of the condominium is situated, and is effective only upon recordation.
  3. In the case of a condominium containing only units having horizontal boundaries described in the declaration, a termination agreement may provide that all the common elements and units of the condominium shall be sold following termination. If, pursuant to the agreement, any real estate in the condominium is to be sold following termination, the termination agreement must set forth the minimum terms of the sale.
  4. In the case of a condominium containing any units that include title to the underlying land as provided in the declaration, a termination agreement may provide for sale of the common elements, but may not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or unless all owners of units to be sold consent to the sale.
  5. The association, on behalf of the unit owners, may contract for the sale of real estate in the condominium, but the contract is not binding on the unit owners until approved pursuant to subsections (a) and (b). If any real estate in the condominium is to be sold following termination, title to that real estate, upon termination, vests in the association as trustee for the holders of all interests in the units. Thereafter, the association has all powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all powers it had before termination. Proceeds of the sale must be distributed to unit owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided in subsection (h). Unless otherwise specified in the termination agreement, as long as the association holds title to the real estate, each unit owner and each unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted each unit owner’s unit. During the period of that occupancy, each unit owner and each unit owner’s successors in interest remain liable for all assessments and other obligations imposed on unit owners by part 1, this part and parts 4 and 5 of this chapter or the declaration.
  6. If the real estate constituting the condominium is not to be sold following termination, title to the common elements and, in a condominium containing only units not including title to the underlying land as described in the declaration, title to all the real estate in the condominium vests in the unit owners upon termination as tenants in common in proportion to their respective interests as provided in subsection (h), and liens on the units shift accordingly. While the tenancy in common exists, each unit owner and each unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted each unit owner’s unit.
  7. Following termination of the condominium, the proceeds of any sale of real estate, together with the assets of the association, are held by the association as trustee for unit owners and holders of liens on the units as their interests may appear. Following termination, creditors of the association holding liens on the units that were recorded before termination may enforce those liens in the same manner as any lienholder. All other creditors of the association are to be treated as if they had perfected liens on the units immediately before termination.
  8. The respective interests of unit owners referred to in subsections (e), (f) and (g) are as follows:
    1. Except as provided in subdivision (h)(2), the respective interests of unit owners are the fair market values of their units, limited common elements, and common element interests immediately before the termination, as determined by one (1) or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved within thirty (30) days after distribution by unit owners of units to which at least twenty-five percent (25%) of the votes in the association are allocated. The proportion of any unit owner's interest to that of all unit owners is determined by dividing the fair market value of that unit owner's unit and common element interest by the total fair market values of all the units and common elements; and
    2. If any unit or any limited common element is destroyed to the extent that an appraisal of the fair market value of the unit or any limited common element before destruction cannot be made, the interests of all unit owners are their respective common element interests immediately before the termination.
    1. If a lien or encumbrance against all or any portion of the real estate comprising the condominium has priority over the declaration, and the lien or encumbrance has been released with respect to any unit, then the lien or encumbrance shall be deemed subordinate to the declaration.
    2. Notwithstanding subdivision (i)(1), foreclosure or enforcement of a lien or encumbrance against withdrawable real estate does not of itself withdraw that real estate from the condominium, but the person taking title to the real estate has the right to require from the association an amendment excluding the real estate from the condominium, upon request and payment of the expense of the amendment.

Acts 2008, ch. 766, § 1.

66-27-319. Rights of secured lenders.

The declaration may require that all or a specified number or percentage of the mortgagees or beneficiaries of deeds of trust encumbering the units approve specified actions of the unit owners or the association as a condition to the effectiveness of those actions, but no requirement for approval may operate to deny or delegate control over the general administrative affairs of the association by the unit owners or the board of directors, or prevent the association or the board of directors from commencing, intervening in, or settling any litigation or proceeding, or receiving and distributing any insurance proceeds except pursuant to § 66-27-413.

Acts 2008, ch. 766, § 1.

66-27-320. Obligation to complete or restore.

The declarant or unit owner or owners, as applicable, shall promptly repair and restore, to a condition compatible with the remainder of the condominium, any portion of the condominium affected by the exercise of rights reserved or created by §§ 66-27-31066-27-313, 66-27-315 and 66-27-316.

Acts 2008, ch. 766, § 1.

66-27-321. Master associations.

  1. If the declaration for a condominium provides that any of the powers described in § 66-27-402 are to be exercised by or may be delegated to a profit or nonprofit corporation, or unincorporated association, that exercises those or other powers on behalf of one (1) or more condominiums or for the benefit of the unit owners of one (1) or more condominiums, all provisions of part 1, this part and parts 4 and 5 of this chapter applicable to unit owners' associations apply to any such corporation, or unincorporated association, except as modified by this section.
  2. Unless a master association is acting in the capacity of an association described in § 66-27-401, it may exercise the powers set forth in § 66-27-402(a)(2) only to the extent expressly permitted in the declarations of condominiums that are part of the master association or expressly described in the delegations of power from those condominiums to the master association.
  3. If the declaration of any condominium provides that the board of directors may delegate certain powers to a master association, the members of the board of directors have no liability for the acts or omissions of the master association with respect to those powers following delegation.
  4. The rights and responsibilities of unit owners with respect to the unit owners' association set forth in §§ 66-27-403, 66-27-408 — 66-27-410 and 66-27-412 apply in the conduct of the affairs of a master association only to those persons who elect the board of a master association, whether or not those persons are otherwise unit owners within the meaning of part 1, this part, and parts 4 and 5 of this chapter.
  5. Notwithstanding § 66-27-403(f) with respect to the election of the board of directors of an association, by all unit owners after the period of declarant control ends, and even if a master association is also an association described in § 66-27-401, the certificate of incorporation or other instrument creating the master association and the declaration of each condominium, the powers of which are assigned by the declaration or delegated to the master association, may provide that the board of directors of the master association must be elected after the period of declarant control in any of the following ways:
    1. All unit owners of all condominiums subject to the master association may elect all members of that board of directors;
    2. All members of the board of directors of all condominiums subject to the master association may elect all members of that board of directors;
    3. All unit owners of each condominium subject to the master association may elect specified members of that board of directors; or
    4. All members of the board of directors of each condominium subject to the master association may elect specified members of that board of directors.

Acts 2008, ch. 766, § 1.

66-27-322. Submission of a unit to an additional declaration.

  1. A unit may be submitted to an additional declaration creating a new condominium if the submittal is permitted by the declaration creating the unit.
  2. The submission of a unit to an additional declaration shall not be deemed a subdivision of a unit under § 66-27-313.
  3. Upon the submittal of a unit to an additional declaration, the following shall apply:
    1. The appurtenant interest of the unit in the common elements shall be allocated to the units created under the additional declaration pursuant to the terms of the additional declaration;
    2. The association under the additional declaration shall pay all assessments due with respect to the unit submitted to an additional declaration and may exercise any of the rights that may be exercised by the owner of the unit;
    3. The lien for assessments in favor of the association created under the original declaration shall not attach to any unit created under an additional declaration if the owner of the unit has paid the unit's share of the assessment to either the association created under the original declaration or to the association created under the additional declaration;
    4. The units created under an additional declaration shall be subject to the terms and conditions of the original declaration, as it may be supplemented by the additional declaration; and
    5. Members of the board of directors of the association created under the original declaration may be elected in any of the following ways specified in the original declaration:
      1. All unit owners of units created under the original declaration shall elect all members of the board of directors and the vote of any unit subject to an additional declaration shall be cast by a representative of the association created under the additional declaration;
      2. The board of directors of any association created under an additional declaration may elect specified members of the board of directors under the original declaration;
      3. Specified members of the board of directors or specified officers of the association created by the additional declaration may be deemed elected as specified members of the board of directors under the original declaration; or
      4. Any other manner provided in the original declaration permitted under the laws applicable to nonprofit corporations.
  4. Any unit created by submitting a unit to an additional declaration may be further submitted to an additional declaration subject to this section if permitted pursuant to all declarations applicable to the unit.

Acts 2008, ch. 766, § 1.

66-27-323. Merger or consolidation of condominiums.

  1. Any two (2) or more condominiums, by agreement of the unit owners as provided in subsection (b), may be merged or consolidated into a single condominium. In the event of a merger or consolidation, unless the agreement otherwise provides, the resultant condominium is, for all purposes, the legal successor of all of the preexisting condominiums and the operations and activities of all associations of the preexisting condominiums shall be merged or consolidated into a single association, which shall hold all powers, rights, obligations, assets and liabilities of all preexisting associations.
  2. An agreement of two (2) or more condominiums to merge or consolidate pursuant to subsection (a) must be evidenced by an agreement prepared, executed, recorded and certified by the president of the association of each of the preexisting condominiums following approval by owners of units to which are allocated the percentage of votes in each condominium required to terminate that condominium, or such other percentage of votes as may be required by the declarations of each of the merging condominiums. Any such agreement must be recorded in every county in which a portion of the condominium is located and is not effective until recorded.
  3. Every merger or consolidation agreement must provide for the reallocation of the allocated interests in the new association among the units of the resultant condominium, either by stating the reallocations or the formulas upon which they are based or by stating the percentage of overall allocated interests of the new condominium that are allocated to all of the units comprising each of the preexisting condominiums, and providing that the portion of the percentages allocated to each unit formerly comprising a part of the preexisting condominium must be equal to the percentages of allocated interests allocated to that unit by the declaration of the preexisting condominium.

Acts 2008, ch. 766, § 1.

Part 4
Tennessee Condominium Act of 2008 — Unit Owners' Association

66-27-401. Organization of unit owners' association.

A unit owners' association must be organized no later than the date the first unit in the condominium is conveyed. The membership of the association at all times shall consist exclusively of all the unit owners or, following termination of the condominium, of all former unit owners entitled to distributions of proceeds under § 66-27-318, or their heirs, successors, or assigns. The association shall be organized as a profit or nonprofit corporation or limited liability company or, in the case of a condominium with four (4) or fewer units that is not a master association, the association may be organized as an unincorporated association.

Acts 2008, ch. 766, § 1.

66-27-402. Powers of unit owners' association.

  1. Except as provided in subsection (b), and subject to the declaration, the association, even if unincorporated, or if incorporated or a limited liability company even if subsequently dissolved administratively, may:
    1. Adopt and amend bylaws, and rules and regulations;
    2. Adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners;
    3. Hire and discharge managing agents and other employees, agents, and independent contractors;
    4. Institute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two (2) or more unit owners on matters affecting the condominium;
    5. Make contracts and incur liabilities;
    6. Regulate the use, maintenance, repair, replacement, and modification of common elements;
    7. Cause additional improvements to be made as a part of the common elements;
    8. Acquire, hold, encumber, and convey in its own name any right, title, or interest to real or personal property, but common elements may be conveyed or subjected to a security interest only pursuant to § 66-27-412;
    9. Grant easements, leases, licenses, and concessions through or over the common elements;
    10. Impose and receive any payments, fees, or charges for the use, rental, or operation of the common elements, other than limited common elements described in § 66-27-302(2) and (4), and for services provided to unit owners;
    11. Impose charges for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws, and rules and regulations of the association;
    12. Impose reasonable charges for the preparation and recordation of amendments to the declaration or the provision of information required by § 66-27-502;
    13. Impose reasonable charges for services rendered in connection with the transfer of a unit;
    14. Provide for the indemnification of its officers and members of its board of directors and maintain directors' and officers' liability insurance;
    15. Assign its right to future income, including the right to receive common expense assessments, but, except for assignments of income to finance common expenses of the association, only to the extent the declaration expressly so provides;
    16. Exercise any other powers conferred by the declaration or bylaws;
    17. Exercise all other powers that may be exercised in this state by legal entities of the same type as the association; and
    18. Exercise any other powers necessary and proper for the governance and operation of the association.
  2. The declaration may not impose limitations on the power of the association to deal with the declarant, its agents or contractors, that are more restrictive than the limitations imposed on the power of the association to deal with other persons.

Acts 2008, ch. 766, § 1.

66-27-403. Board of directors and officers.

  1. Except as provided in the declaration, the bylaws, in subsection (b), or other provisions of part 2, part 3, this part and part 5 of this chapter, the board of directors may act in all instances on behalf of the association. In the performance of their duties, the officers and members of the board of directors are required to exercise:
    1. If appointed by the declarant, the care required of fiduciaries of the unit owners; or
    2. If elected by the unit owners, ordinary and reasonable care.
  2. The board of directors may not act on behalf of the association to amend the declaration pursuant to § 66-27-317, to terminate the condominium pursuant to § 66-27-318, or to elect members of the board of directors or determine the qualifications, powers and duties, or terms of office of members of the board of directors pursuant to subsection (f), but the board of directors may fill vacancies in its membership for the unexpired portion of any term, and may elect members of the board of directors of a master association as provided in the declaration.
    1. Subject to subsection (d), the declaration may provide for a period of declarant control of the association, during which period a declarant, or persons designated by the declarant, may appoint and remove the officers and members of the board of directors. Regardless of the period provided in the declaration, a period of declarant control terminates no later than the earlier of:
      1. One hundred twenty (120) days after conveyance of seventy-five percent (75%) of the units that may be created to unit owners other than a declarant; or
      2. Five (5) years after the conveyance of the first unit to a purchaser other than the declarant or, if more than one hundred (100) units may be created in the condominium, then seven (7) years after the first conveyance.
    2. A declarant may voluntarily surrender the right to appoint and remove officers and members of the board of directors before termination of that period, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or board of directors, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.
  3. Not later than one hundred twenty (120) days after conveyance of twenty-five percent (25%) of the units that may be created to unit owners other than a declarant, at least one (1) member of the board must be elected by unit owners other than the declarant.
  4. Not later than the termination of any period of declarant control, the unit owners shall elect a board of directors of at least three (3) members, at least a majority of whom must be unit owners. The board of directors shall elect the officers. The board of directors and officers shall take office upon election.
  5. Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a two-thirds (2/3) vote of all persons present and entitled to vote at any meeting of the unit owners at which a quorum is present, may remove any member of the board of directors with or without cause, other than a member appointed by the declarant.

Acts 2008, ch. 766, § 1.

66-27-404. Transfer of special declarant rights.

  1. No special declarant right, created or reserved under part 2, part 3, this part and part 5 of this chapter may be transferred except by an instrument evidencing the transfer recorded in the register's office in every county in which any portion of the condominium is located. The instrument is not effective unless executed by the transferee.
  2. Upon transfer of any special declarant right, the liability of a transferor declarant is as follows:
    1. A transferor is not relieved of any obligation or liability arising before the transfer. Lack of privity does not deprive the association or any unit owner of standing to maintain an action to enforce any obligation of the transferor.
    2. If a successor to any special declarant right is an affiliate of a declarant as defined by § 66-27-203, the transferor is jointly and severally liable with the successor for any obligations or liabilities of the successor relating to the condominium.
    3. If a transferor retains any special declarant right, but transfers other special declarant rights to a successor who is not an affiliate of the declarant, the transferor is liable for any obligations or liabilities imposed on a declarant by part 2, part 3, this part and part 5 of this chapter or by the declaration relating to the retained special declarant rights and arising after the transfer.
    4. A transferor has no liability for any act or omission or any breach of a contractual obligation arising from the exercise of a special declarant right by a successor declarant who is not an affiliate of the transferor.
  3. Unless otherwise provided in a mortgage instrument or deed of trust, in case of foreclosure of a mortgage, tax sale, judicial sale, sale by a trustee under a deed of trust, or sale under the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), receivership proceedings, or sale by the association pursuant to its declaration, of any units owned by a declarant or other real estate in a condominium subject to development rights, a person acquiring title to all the real estate being foreclosed or sold succeeds to all special declarant rights related to that real estate held by that declarant, unless the person acquiring title records an instrument within one hundred twenty (120) days following the foreclosure, in the register's office of every county in which any portion of the condominium lies, disclaiming any or all of such rights.
  4. Upon foreclosure, tax sale, judicial sale, sale by a trustee under a deed of trust, or sale under the United States Bankruptcy Code, receivership proceedings, or sale by the association pursuant to its declaration, of all units and other real estate in a condominium owned by a declarant:
    1. The declarant ceases to have any special declarant rights; and
    2. All special declarant rights continue in favor of the purchaser unless disclaimed by a recorded instrument within one hundred twenty (120) days following the foreclosure or sale as provided in subsection (c).
  5. The liabilities and obligations of a person who succeeds to special declarant rights are as follows:
    1. A successor to any special declarant right who is an affiliate of a declarant is subject to all obligations and liabilities imposed on the transferor by part 2, part 3, this part and part 5 of this chapter or by the declaration;
    2. A successor to any special declarant right, other than a successor described in subdivision (e)(3) or (e)(4), who is not an affiliate of a declarant, is subject to all obligations and liabilities imposed by part 2, part 3, this part and part 5 of this chapter or the declaration:
      1. On a declarant who relates to the declarant's exercise or non-exercise of special declarant rights; or
      2. On the declarant's transferor, other than:
        1. Misrepresentations by any previous declarant;
        2. Warranty obligations on improvements made by any previous declarant, or made before the condominium was created;
        3. Breach of any fiduciary obligation by any previous declarant or the previous declarant's appointees to the board of directors; or
        4. Any liability or obligation imposed on the transferor as a result of the transferor's acts or omissions after the transfer;
    3. A successor to only a right reserved in the declaration to maintain models, sales offices, and signs pursuant to § 66-27-315, if the successor is not an affiliate of a declarant, may not exercise any other special declarant right, and is not subject to any liability or obligation as a declarant, except the obligation to provide the information required by part 5 of this chapter, and any liability arising as a result of the obligation; and
    4. A successor to all special declarant rights held by the successor's transferor who is not an affiliate of that declarant and who succeeded to those rights pursuant to a deed in lieu of foreclosure or a judgment or instrument conveying title to units under subsection (c), may declare the successor’s intention within one hundred twenty (120) days after acquiring title, in an instrument recorded in every county in which any portion of the condominium lies, to hold those rights solely for transfer to another person. Thereafter, until transferring all special declarant rights to any person acquiring title to any unit owned by the successor, or unit recording an instrument permitting exercise of all those rights, that successor may not exercise any of those rights other than any right held by the successor’s transferor to control the board of directors in accordance with § 66-27-403(d) for the duration of any period of declarant control, and any attempted exercise of those rights is void. So long as a successor declarant has not or may not exercise special declarant rights under this subsection (e), the successor declarant is not subject to any liability or obligation as a declarant other than liability for the successor declarant’s acts and omissions under § 66-27-403(d).
  6. Nothing in this section subjects any successor to a special declarant right to any claims against or other obligations of a transferor declarant, other than claims and obligations arising under part 2, part 3, this part and part 5 of this chapter or the declaration.

Acts 2008, ch. 766, § 1.

66-27-405. Termination of contracts and leases of declarant.

If entered into before the board of directors elected by the unit owners pursuant to § 66-27-403(e) takes office, any contract or lease between the association and a declarant or an affiliate of a declarant, unless the contract or lease exercises a development right or a special declarant right, or any other contract or lease that was not disclosed in the declaration or otherwise in writing prior to the first conveyance of a unit to a party other than the declarant, and at the time entered into was unconscionable to the unit owners under the circumstances then prevailing, may be terminated without penalty by the association at any time after the board of directors elected by the unit owners pursuant to § 66-27-403(e) takes office, upon not less than ninety (90) days notice to the other party. This section does not apply to any lease, the termination of which would terminate the condominium or reduce its size, unless the real estate subject to that lease was included in the condominium for the purpose of avoiding the right of the association to terminate a lease under this section. This section applies only to condominiums containing units restricted to residential purposes.

Acts 2008, ch. 766, § 1.

66-27-406. Bylaws.

  1. The bylaws of the association must provide for:
    1. The number of members of the board of directors and the titles of the officers of the association;
    2. Election by the board of directors of a president, secretary, and any other officers of the association the bylaws specify;
    3. The qualifications, powers and duties, terms of office, and manner of electing and removing members of the board of directors and officers and filling vacancies;
    4. Which, if any, of its powers the board of directors or officers may delegate to other persons or to a managing agent;
    5. Which of its officers may prepare, execute, certify, and record amendments to the declaration on behalf of the association; and
    6. The method of amending the bylaws.
  2. Subject to the declaration, the bylaws may provide for any other matters the association deems necessary and appropriate.

Acts 2008, ch. 766, § 1.

66-27-407. Upkeep of condominium.

  1. Except to the extent provided by the declaration, subsection (b), or § 66-27-413(h), the association is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of the unit owner's unit. Each unit owner shall afford to the association and the other unit owners, and to their agents or employees, access to and through the unit owner’s unit that is reasonably necessary for those purposes. If damage is inflicted on the common elements, or on any unit through which access is taken, the unit owner responsible for the damage, or the association if it is responsible, is liable for the cost of the prompt repair thereof, to the extent the cost of repair is not covered by property insurance required to be maintained by the declaration.
  2. In addition to the liability that a declarant as a unit owner has under part 2, part 3, this part and part 5 of this chapter, the declarant alone is liable for all expenses in connection with real estate subject to development rights, to the extent the expenses exceed the benefit derived by the association or the other unit owners from the benefit. No other unit owner and no other portion of the condominium is subject to a claim for payment of those expenses. Unless the declaration provides otherwise, any income or proceeds from real estate subject to development rights inures to the declarant.

Acts 2008, ch. 766, § 1.

Cross-References. Insurance, § 66-27-413.

66-27-408. Meetings.

A meeting of the association must be held at least once each year. Special meetings of the association may be called by the president, a majority of the board of directors or by unit owners having twenty percent (20%), or any lower percentage specified in the bylaws, of the votes in the association. Not less than ten (10) nor more than sixty (60) days in advance of any meeting, the secretary or other officer specified in the bylaws shall cause notice to be hand-delivered, sent prepaid by United States mail, by facsimile, electronically, or by other means expressly authorized by the declaration, to the address of each unit or to any other physical or electronic address designated in writing or by electronic means by the unit owner. The notice of any meeting must state the time, place, and method of attendance of or at the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes, and any proposal to remove a director or officer. Notice may be waived in writing signed by all unit owners.

Acts 2008, ch. 766, § 1.

66-27-409. Quorums.

  1. Unless the bylaws provide otherwise, a quorum is present throughout any meeting of the association if persons entitled to cast twenty percent (20%) of the votes that may be cast for election of the board of directors are present in person or by proxy at the beginning of the meeting.
  2. Unless the bylaws specify a larger percentage, a quorum is deemed present throughout any meeting of the board of directors if persons entitled to cast fifty percent (50%) of the votes on that board are present at the beginning of the meeting.
  3. Attendance at a meeting may be in person, by telephone, or by any other means specified in the bylaws. Attendance at a meeting of the association may also be by proxy.

Acts 2008, ch. 766, § 1.

66-27-410. Voting — Proxies.

  1. If only one (1) of the multiple owners of a unit is present at a meeting of the association, that owner is entitled to cast all the votes allocated to that unit. If more than one (1) of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the multiple owners, unless the declaration expressly provides otherwise. There is majority agreement if any one (1) of the multiple owners casts the votes allocated to that unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.
  2. Votes allocated to a unit may be cast pursuant to proxy duly executed by a unit owner. If a unit is owned by more than one (1) person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may not revoke a proxy given pursuant to this section, except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. The duration of a proxy is governed by the Tennessee Nonprofit Corporation Act, compiled in title 48, chapters 51-68, including, without limitation, § 48-57-205.
  3. If the declaration requires that votes on specified matters affecting the condominium be cast by lessees rather than unit owners of leased units:
    1. Subsections (a) and (b) apply to lessees as if they were unit owners;
    2. Unit owners who have leased their units to other persons may not cast votes on those specified matters; and
    3. Lessees are entitled to notice of meetings, access to records, and other rights respecting those matters as if they were unit owners. Unit owners must also be given notice, in the manner provided in § 66-27-408, of all meetings at which lessees may be entitled to vote.
  4. No votes allocated to a unit owned by the association may be cast.

Acts 2008, ch. 766, § 1.

66-27-411. Tort and contract liability.

Any action alleging a wrong done by the association must be brought against the association and not against any unit owner. A unit owner is not precluded from bringing an action contemplated by this section because the unit owner is a unit owner or a member or officer of the association.

Acts 2008, ch. 766, § 1.

66-27-412. Conveyance or encumbrance of common elements.

  1. Portions of the common elements may be conveyed or subjected to a security interest by the association if persons entitled to cast at least eighty percent (80%) of the votes in the association, including, during any period of declarant control, eighty percent (80%) of the votes allocated to units not owned by a declarant, or any larger percentage the declaration specifies, agree to that action; and a like percentage vote by the owners of any units to which any limited common element is allocated must agree in order to convey that limited common element or subject it to a security interest. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of the association; provided, that proceeds of a sale of a limited common element shall be reserved for the benefit of the unit or units to which the limited common element is allocated.
  2. An agreement to convey common elements or subject them to a security interest must be evidenced by the execution of an agreement, or ratifications of the agreement, in the same manner as a deed, by the requisite number of unit owners. The agreement may specify a date after which the agreement will be void unless recorded before that date. The agreement and all ratifications of the agreement must be recorded in every county in which a portion of the condominium is situated, and is effective only upon recordation.
  3. The association, on behalf of the unit owners, may contract to convey common elements, or subject them to a security interest, but the contract is not enforceable against the association until approved pursuant to subsections (a) and (b). Thereafter, the association has all powers necessary and appropriate to effect the conveyance or encumbrance, including the power to execute deeds or other instruments.
  4. Any purported conveyance, encumbrance, judicial sale or other voluntary transfer of common elements, unless made pursuant to this section, is voidable; provided, that no action challenging the validity of a conveyance or encumbrance made by the association pursuant to this section may be brought more than one (1) year following the conveyance or encumbrance.
  5. A conveyance or encumbrance of common elements pursuant to this section does not deprive any unit of its rights of access to and support of the unit and the remaining common elements and essential services.
  6. A conveyance or encumbrance of common elements pursuant to this section does not affect the priority or validity of preexisting encumbrances.

Acts 2008, ch. 766, § 1.

66-27-413. Insurance.

  1. Commencing no later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent reasonably available:
    1. Property insurance on the common elements insuring against risks of direct physical loss commonly insured against for similar properties. The total amount of insurance after application of any deductibles shall be no less than eighty percent (80%) of the total replacement cost of the insured property at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations and other items normally excluded from property policies; and
    2. Liability insurance, including medical payments insurance, in an amount determined by the board of directors, but no less than any amount specified in the declaration, covering all occurrences commonly insured against for death, bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the common elements.
  2. In the case of a building containing units having horizontal boundaries described in the declaration, the insurance maintained under subdivision (a)(1), to the extent reasonably available, shall include the units, but need not include improvements and betterments installed by unit owners.
  3. If the insurance described in subsections (a) and (b) is not reasonably available, the association shall promptly cause notice of that fact to be hand-delivered or sent prepaid by United States mail to all unit owners. The declaration may require the association to carry any other insurance, and the association, in any event, may carry any other insurance it deems appropriate to protect the association or the unit owners.
  4. Insurance policies carried pursuant to subsection (a) must provide that:
    1. Each unit owner is an insured person under the policy with respect to liability arising out of the unit owner's interest in the common elements or membership in the association;
    2. The insurer waives its right to subrogation under the policy against any unit owner, lessee, or member of the owner's or lessee's household, unless it can be shown that the act with intent to cause the loss of the unit owner, lessee, or member of the owner's or lessee's household was the cause of the loss;
    3. No act or omission by any unit owner, unless acting in the capacity of a governing board member of the association, will void the policy or be a condition to recovery under the policy; and
    4. If, at the time of a loss under the policy, there is other insurance in the name of a unit owner covering the same risk covered by the policy, the association's policy provides primary insurance.
  5. Any loss covered by the property policy under subdivision (a)(1) and subsection (b) must be adjusted with the association, but the insurance proceeds for that loss are payable to any insurance trustee designated for that purpose, or otherwise to the association, and not to any mortgagee or beneficiary under a deed of trust. The insurance trustee or the association shall hold any insurance proceeds in trust for unit owners and lienholders as their interests may appear. Subject to subsection (h), the proceeds must be disbursed first for the repair or restoration of the damaged property, and unit owners and lienholders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or restored, or the condominium is terminated.
  6. An insurance policy issued to the association does not prevent a unit owner from obtaining insurance for the unit owner's own benefit.
  7. An insurer that has issued an insurance policy under this section shall issue certificates or memoranda of insurance to the association and, upon written request, to any unit owner, mortgagee, or beneficiary under a deed of trust. The insurer issuing the policy may not cancel or refuse to renew it until after notice of the proposed cancellation or nonrenewal has been mailed to the association and to each and any additional insured under the policy at their respective last known addresses, in accordance with the Cancellation of Commercial Risk Insurance Act, compiled in title 56, chapter 7, part 18, or, if the policy is a policy of personal risk insurance, as defined in § 56-5-102, then in accordance with the law governing such insurance.
    1. Any portion of the condominium for which insurance is required under this section that is damaged or destroyed shall be repaired or replaced promptly by the association unless:
      1. The condominium is terminated;
      2. Repair or replacement would be illegal under any state or local health or safety statute or ordinance; or
      3. Eighty percent (80%) of the unit owners, together with eighty percent (80%) of owners of units that are assigned limited common elements that will not be rebuilt, vote not to rebuild.
    2. The cost of repair or replacement in excess of insurance proceeds and reserves is a common expense. If the entire condominium is not repaired or replaced:
      1. The insurance proceeds attributable to the damaged common elements must be used to restore the damaged area to a condition compatible with the remainder of the condominium;
      2. The insurance proceeds attributable to units and limited common elements that are not rebuilt must be distributed to the owners of those units and the owners of the units to which those limited common elements were allocated, or to lienholders, as their interests may appear; and
      3. The remainder of the proceeds must be distributed to all the unit owners or lienholders, as their interests may appear, in proportion to the common element interests of all the units.
    3. If the unit owners vote not to rebuild any unit, that unit's allocated interests are automatically reallocated upon the vote as if the unit had been condemned under § 66-27-207(a), and the association promptly shall prepare, execute, and record an amendment to the declaration reflecting the reallocations. Notwithstanding this subsection (h), § 66-27-318 governs the distribution of insurance proceeds if the condominium is terminated. This section may be varied or waived in the case of a condominium all of whose units are restricted to nonresidential use.

Acts 2008, ch. 766, § 1.

Compiler's Notes. Section 56-5-302 referenced in subdivision (g) of this section was renumbered as 56-5-102 by the authority of the code commission  in 2016.

66-27-414. Assessments for common expenses.

  1. Until the board of directors makes a common expense assessment, the declarant shall pay all common expenses. After any assessment has been made by the board of directors, assessments must be made at least annually, based on a budget adopted at least annually by the board of directors.
  2. Except for assessments under subsections (c)-(e), all common expenses must be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to § 66-27-307(a). Any past due common expense assessment or installment of the common expense assessment bears interest at the rate established by the association not exceeding the maximum effective annual rate of interest as determined by the department of financial institutions.
  3. To the extent permitted by the declaration:
    1. Any common expense associated with the maintenance, repair, or replacement of a limited common element may be assessed against the units to which that limited common element is assigned, equally, or in any other proportion that the declaration provides;
    2. Any common expense or portion of the common expense benefiting fewer than all of the units may be assessed exclusively against the units benefited; and
    3. The costs of insurance may be assessed in proportion to risk and the costs of utilities must be assessed in proportion to usage.
  4. Assessments to pay a judgment against the association pursuant to § 66-27-416(a) may be made only against the units in the condominium at the time the judgment was entered, in proportion to their common expense liabilities.
  5. If any common expense is caused by the misconduct of any unit owner, the association may assess that expense exclusively against the owner's unit.
  6. If common expense liabilities are reallocated, common expense assessments and any installment of the common expense assessments not yet due shall be recalculated in accordance with the reallocated common expense liabilities.
  7. With respect to residential units only, notwithstanding any provision to the contrary set forth in the declaration, the board of directors shall have the power at any time to levy assessments to preserve the physical integrity of the condominium or to comply with governmental requirements applicable to the condominium. The assessments may be in the form of a single assessment or an assessment for reserves to be paid in such installments as shall be determined by the board of directors.

Acts 2008, ch. 766, § 1.

Cross-References. Insurance, § 66-27-413.

66-27-415. Lien for assessments.

    1. The association has a lien on a unit for any assessment levied against that unit or fines imposed against its unit owner from the time the assessment or fine becomes due, which lien may be foreclosed by judicial action.
    2. Notwithstanding subdivision (a)(1), the declaration may provide that the association's lien may be foreclosed in like manner as a deed of trust with power of sale under title 35, chapter 5; provided, that the association shall give notice of its action to the unit owner and to all lienholders of record prior to the first publication of notice as required under title 35, chapter 5.
    3. Notice shall be deemed sufficient if sent by United States mail, postage prepaid:
      1. If to the unit owner, at the unit, or, if different, the last address for the unit owner on file with the association; or
      2. If to a lienholder, other interested party, or the nominee of record, at the address set forth in the instrument of record, or, if different, at such other address as the lienholder, the other interested party, or the nominee may have on file with the association.
    4. Notice shall be deemed received three (3) days after deposit in the United States mail, postage prepaid. Unless the declaration otherwise provides, fees, charges, late charges, fines, and interest charged pursuant to § 66-27-402(a)(10), (11), and (12) are enforceable as assessments under this section. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due.
    1. A lien under this section is prior to all other liens and encumbrances on a unit, except:
      1. Liens and encumbrances recorded before the recordation of the declaration;
      2. A first or other contemporaneous mortgage or deed of trust on the unit recorded before the date on which the assessment sought to be enforced became delinquent; and
      3. Liens for real estate taxes and other governmental assessments or charges against the unit.
    2. Upon a foreclosure action initiated by a lien holder or the association under title 35, chapter 5, the association shall be entitled to a priority in the proceeds from the foreclosure sale to satisfy the lien under subsection (a) up to the extent of the common expense assessments based on the periodic budget adopted by the association pursuant to § 66-27-414, which would have become due in the absence of acceleration during the six (6) months immediately preceding institution of an action to enforce the lien, but not exceeding one percent (1%) of the maximum principal indebtedness of a lien secured by the first mortgage or deed of trust; provided, that, notwithstanding this subsection (b) or any law to the contrary:
      1. Any foreclosure by the association of its lien for assessments shall be subject to any prior mortgage or deed of trust encumbering the property and shall not extinguish the lien of such mortgage or deed of trust;
      2. Upon any foreclosure by the holder of a mortgage or deed of trust, the sale and foreclosure will be subject to the association lien up to the payment priority amount set forth in this subdivision (b)(2); and
      3. Any right of foreclosure or priority of the association shall not be transferable and shall be extinguished if assigned or transferred to a third party.
    3. This subsection (b) does not affect the priority of mechanics or materialmen's liens. The lien under this section is not subject to the statutory or other right of redemption, homestead, or any other exemption, unless specifically reserved in the declaration.
  1. Unless the first recorded declaration otherwise provides, if two (2) or more associations have liens for assessments created at any time on the same real estate, those liens have priority based upon the priority of recording of the declarations creating the liens.
    1. Recording of the declaration constitutes record notice of the lien. A lien for any delinquent assessment under this section up to the priority in payment provided in subdivision (b)(2) is perfected without recording. Any other delinquent amount above the priority of payment provided in subdivision (b)(2) is perfected by recording it in the lien book in the register of deeds office in the county where the real property is located, and shall have priority over any subsequently filed liens.
    2. The lien shall not have the priority provided for in subdivision (b)(2)(A) over the mortgages and deeds of trust described in subdivision (b)(1)(B) if the owner of the unit or the holder of any mortgage or deed of trust on the unit has notified the association in writing of the holder's name and address and the identity of the unit upon which it holds a first mortgage or deed of trust, and the association has failed, within thirty (30) days of the date that six (6) months of assessments for common expenses due from the unit became delinquent, to give written notice of the delinquency to the holder of the first mortgage or deed of trust at the address provided by the party.
  2. A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within six (6) years after the date the lien for the assessment becomes effective.
  3. This section does not prohibit actions to recover sums for which subsection (a) creates a lien or prohibits an association from taking a deed in lieu of foreclosure.
  4. A judgment or decree in any action brought under this section must include costs and reasonable attorney's fees for the prevailing party.
  5. The association, upon written request, shall furnish to a unit owner, or to a holder of any mortgage or deed of trust encumbering the unit, or their respective authorized agents, a written statement setting forth the amount of unpaid assessments against the owner's unit. The statement must be furnished within seven (7) days after receipt of the request and is binding on the association.

Acts 2008, ch. 766, § 1; 2016, ch. 866, §§ 1, 2.

Compiler's Notes. Acts 2016, ch. 866, § 3 provided that the act, which amended this section, shall apply to any foreclosure action initiated on or after June 1, 2016.

Amendments. The 2016 amendment, in (a), redesignated former (1)(A)-(D) as present (2)-(4) respectively, substituted “Notwithstanding subdivision (a)(1)” for “Notwithstanding subdivision (a)(1)(A)” at the beginning of present (2),  and  inserted “other interested party, or the nominee of record,” following the first instance of “lienholder” and inserted “the other interested party, or the nominee” following the second instance of “lienholder” in present (3)(B);  in (b), inserted “or other contemporaneous” near the beginning of (1)(B), and rewrote (2) which read: “(2)(A) The lien is also prior to the mortgages and deeds of trust described in subdivision (b)(1)(B) to the extent of the common expense assessments based on the periodic budget adopted by the association pursuant to § 66-27-414(a) that would have become due in the absence of acceleration during the six (6) months immediately preceding institution of an action to enforce the lien.“(B) The lien shall not have the priority provided for in subdivision (b)(2)(A) over the mortgages and deeds of trust described in subdivision (b)(1)(B) in the event that the owner of the unit or the holder of any first mortgage or deed of trust on the unit has notified the association in writing of the holder's name and address and the identity of the unit upon which it holds a first mortgage or deed of trust, and the association has failed, within thirty (30) days of the date six (6) months of assessments for common expenses due from the unit became delinquent, to give written notice of the delinquency to the holder of the first mortgage or deed of trust at the address provided by the party.”; and rewrote (d) which read: “(d) Recording of the declaration constitutes record notice and perfection of the lien. No further recordation of any claim of lien for assessment under this section is required.”

Effective Dates. Acts 2016, ch. 866, § 3. June 1, 2016.

66-27-416. Liability for judgments and liens.

  1. The liability of a unit owner in an unincorporated association for a judgment against the association shall be limited to the percentage of the judgment equal to the undivided percentage ownership of the unit owner in the common elements.
  2. If the association has granted a security interest in the common elements to a creditor of the association pursuant to § 66-27-412, the holder of that security interest shall exercise its right against the common elements only.
  3. Whether perfected before or after the creation of the condominium, if a lien other than a deed of trust or mortgage, including a judgment lien or lien attributable to work performed or materials supplied, becomes effective against two (2) or more units, the unit owner of an affected unit may pay to the lienholder the amount of the lien attributable to the owner's unit, and the lienholder, upon receipt of payment, shall promptly deliver a release of the lien covering that unit. The amount of the payment must be proportionate to the ratio that the unit owner's common expense liability bears to the common expense liabilities of all unit owners whose units are subject to the lien. After payment, the association may not assess or have a lien against that unit owner's unit for any portion of the common expenses incurred in connection with that lien.
  4. A judgment against the association must be indexed in the name of the condominium and the association.

Acts 2008, ch. 766, § 1.

66-27-417. Association records.

The association shall keep financial records sufficiently detailed to enable the association to comply with §§ 66-27-502 and 66-27-503. All financial and other records shall be made reasonably available for examination by any unit owner, the holder of any mortgage or deed of trust encumbering a unit, and their respective authorized agents.

Acts 2008, ch. 766, § 1.

66-27-418. Association as trustee.

With respect to a third person dealing with the association in the association's capacity as a trustee, either under § 66-27-413 for insurance proceeds, or § 66-27-318 following termination, the existence of trust powers and their proper exercise by the association may be assumed without inquiry. A third person is not bound to inquire whether the association has power to act as trustee or is properly exercising trust powers. A third person, without actual knowledge that the association is exceeding or improperly exercising its powers, is fully protected in dealing with the association as if it possessed and properly exercised the powers it purports to exercise. A third person is not bound to assure the proper application of trust assets paid or delivered to the association in its capacity as trustee.

Acts 2008, ch. 766, § 1.

Cross-References. Insurance, § 66-27-413.

Part 5
Tennessee Condominium Act of 2008 — Units Restricted to Residential Purposes

66-27-501. Applicability — Waiver.

This part applies only to units restricted to residential purposes, unless expressly made applicable by the declaration.

Acts 2008, ch. 766, § 1.

66-27-502. Responsibility to provide information.

  1. The association, upon request from a unit owner, a purchaser or any lender to either a unit owner or a purchaser, or their respective authorized agents, shall provide to the requesting party, within ten (10) business days following the date of the association's receipt of the request, the information specified in § 66-27-503, to the extent applicable. It shall be the responsibility of a unit owner to advise a purchaser or lender, upon request, how the association may be contacted. The association will be entitled to charge a reasonable fee for providing the information that, if not paid, may be assessed against the unit whose owner, lender, or purchaser requested the information.
  2. When construction of a condominium is not yet complete, a declarant, prior to the first sale of any interest in a unit to a third-party purchaser, shall upon request, and within ten (10) business days following the date of the declarant's receipt of the request, provide the information specified in § 66-27-503, to the extent applicable and to the extent available, to any purchaser or prospective lender to a purchaser. If any of the information is not available within ten (10) business days following the date of the request, then it shall be provided at least ten (10) business days prior to closing of the sale of the unit.
  3. The party requesting the information shall be entitled to rely on the information provided, unless the party has actual knowledge to the contrary.
  4. Any request to be made or information to be provided under this part shall be provided in writing or by electronic means, which may include, without limitation, by email or posting to a web site and providing a link and access to the web site.

Acts 2008, ch. 766, § 1.

66-27-503. Information to be provided — General.

The information to be provided pursuant to § 66-27-502 shall include the following:

  1. The name and principal address of the declarant, during the period of declarant control only, the association, and the condominium;
  2. A copy of the recorded, or if not recorded then in substantially final form to the extent available, master deed or declaration, bylaws, charter or articles of association of the association, and all amendments of and exhibits to the master deed or declaration, bylaws, charter or articles of association of the association;
  3. A copy of the current rules and regulations of the association;
  4. The most recent balance sheet, income statement, and approved budget for the association, or, if there has never been an approved budget, then the projected budget. The budget must include, without limitation:
    1. A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacements, and whether or not any study has been done to determine their adequacy, and if a study has been done, where the study will be made available for review and inspection;
    2. A statement of any other reserves;
    3. The projected aggregate annual common expense assessment by category of expenditures for the association;
    4. The projected monthly common expense assessment, or the method of calculating each unit's share of the assessment, for each type of unit;
    5. A description of any indebtedness secured by the common elements or other amenities owned by the association or available for the use of the unit owners; and
    6. A description of any lease affecting the common elements or amenities owned by the association or available for the use of the unit owners;
  5. Minutes of all meetings of the members and/or the board of directors of the association for the twenty-four-month period ending on the date of the request;
  6. The current monthly assessment and any special assessment applicable to the unit in question, and the amount of any delinquencies in any assessments applicable to the unit;
  7. Any fees or assessments due as a result of a transfer of the applicable unit;
  8. The amount and nature of any additional fees currently imposed for use by members of the common elements or other amenities;
  9. A statement of the insurance coverage, which may be provided in the form of an appropriate certificate from the insurer, maintained by the association that includes the types of coverage, limits and deductibles of the insurance;
  10. A statement of any unsatisfied judgments and a description of any pending suits against the association;
  11. A description of any pending suits filed by the association, other than for the collection of delinquent assessments;
  12. The total amount of current monthly, annual, or special assessments for all units in the condominium that are more than sixty (60) days past due as of the most recent available report, but in no event more than ninety (90) days prior to the date of the request; and
  13. Whether the board of directors is still under declarant control and, if so, when that period of control ends.

Acts 2008, ch. 766, § 1.

Cross-References. Insurance, § 66-27-413.

66-27-504. Declarant liability.

If the declarant prepared or caused to be prepared all or a part of the information required by this part, the declarant may be held liable for any materially false or misleading statement, or for any material omission of any required information, with respect to that portion of the information that the declarant prepared. The declarant shall not be liable for:

  1. Any false or misleading information or for any omission of material fact unless the declarant had actual knowledge of the statement or omission, or, in the exercise of reasonable care, should have known of the statement or omission; or
  2. Following the end of the period of declarant control, failure of the association to provide information under § 66-27-503 that was prepared by the declarant.

Acts 2008, ch. 766, § 1.

66-27-505. Remedies for noncompliance.

    1. If the association or declarant, as applicable, fails to provide the information required by § 66-27-503, within the time provided in this section, then the association or declarant, as applicable, shall be liable for and shall pay a fine or penalty of two hundred fifty dollars ($250) to the party on whose behalf the request is made, following the first request for the information, and a fine or penalty of five hundred dollars ($500) if not supplied within ten (10) business days following the second request for the information, plus all costs, including, without limitation, reasonable attorney's fees incurred in obtaining the information or enforcing the fines or penalties, or both, provided for in this section.
    2. In addition, and not in limitation of subdivision (a)(1), neither the purchaser nor any unit owned by the purchaser, shall be liable for any past due assessments that would have been disclosed if the information would have been provided within ten (10) business days following the second request for the information; provided, that the requesting party had no actual knowledge of the past due assessments at the time the unit was acquired by the purchaser.
    3. The fine or penalty, or both, shall not be the exclusive remedy of the aggrieved party, but shall be in addition to all other remedies to which the party shall be entitled at law or in equity, including, without limitation, specific performance.
  1. If at the time of the request for information the declarant is in control of the association or the condominium, or both, then the declarant must provide the information required within ten (10) business days following receipt of a written request for the information, or, if the information is not available at that time, then within ten (10) business days prior to closing. If the information is not provided within that time, then the prospective buyer shall have the right to rescind the contract upon notice to the declarant, or, in the buyer's sole discretion, the buyer may extend the closing date until a date that is ten (10) business days following the date upon which the information is provided, and may seek specific performance of this obligation in a court of competent jurisdiction, and shall be entitled to recover all costs and expenses incurred in doing so, including, without limitation, reasonable attorney's fees.

Acts 2008, ch. 766, § 1.

66-27-506. Escrow of deposits.

Any deposit made in connection with the purchase or reservation of a unit from a declarant shall be placed in escrow and held in this state in an account designated solely for that purpose by a licensed title insurance company or agent of the licensed title insurance company, an attorney, a licensed real estate broker, or an independent bonded escrow company, and shall be deposited in an institution whose accounts are insured by a governmental agency or instrumentality, or any other lawful escrow or trust account, until:

  1. Delivered to the declarant at closing;
  2. Delivered to the declarant because of purchaser's default under a contract to purchase the unit;
  3. Refunded to the purchaser;
  4. Interpleaded into a court of appropriate jurisdiction; or
  5. Disbursed pursuant to a final order of a court of appropriate jurisdiction.

Acts 2008, ch. 766, § 1.

66-27-507. Conversion buildings.

  1. A declarant of a condominium containing conversion buildings, who offers units in the condominium, shall give each of the residential tenants and any residential subtenant in possession of a portion of a conversion building notice of the conversion no later than sixty (60) days before the tenants and any subtenant in possession are required to vacate. The notice must set forth generally the rights of tenants and subtenants under this section and shall be hand-delivered to the unit or mailed by prepaid United States mail to the tenant and subtenant at the address of the unit or any other mailing address provided by a tenant. No tenant or subtenant may be required to vacate upon less than sixty (60) days notice, except by reason of nonpayment of rent, waste, conduct that disturbs other tenants' peaceful enjoyment of the premises, unlawful conduct, or other breach of a written lease, and the terms of the tenancy may not be altered during that period. Failure to give notice as required by this section is a defense to an action for possession.
  2. Nothing in this section permits termination of a lease by a declarant in violation of its terms.

Acts 2008, ch. 766, § 1.

Part 6
Display of Flags

66-27-601. Part definitions.

As used in this part:

  1. “Dedicatory instrument”:
    1. Means each document governing the establishment, maintenance, or operation of a residential subdivision, planned unit development, condominium, horizontal property regime, or any similar planned development; and
    2. Includes a declaration or similar instrument subjecting real property to:
      1. Restrictive covenants, bylaws, or similar instruments governing the administration or operation of a homeowners' association;
      2. Properly adopted rules and regulations of a homeowners' association; or
      3. All lawful amendments to the covenants, bylaws, instruments, rules, or regulations of a homeowners' association;
  2. “Homeowners' association” means an incorporated or unincorporated association owned by or whose members consist primarily of the owners of the property covered by the dedicatory instrument and through which the owners, or the board of directors or similar governing body, manage or regulate the residential subdivision, planned unit development, condominium, horizontal property regime, or any similar planned development; and
  3. “Restrictive covenant” means any covenant, condition, or restriction contained in a dedicatory instrument, whether mandatory, prohibitive, permissive, or administrative.

Acts 2017, ch. 331, § 1.

Effective Dates. Acts 2017, ch. 331, § 3. July 1, 2017.

66-27-602. Display of flags by property owners.

  1. Except as provided in subsection (b), no homeowners' association shall adopt or enforce a dedicatory instrument provision that prohibits, or has the effect of prohibiting, a property owner from displaying the flag of the United States of America or an official or replica flag of any branch of the United States armed forces, on the property owner's property.
  2. A homeowners' association may adopt or enforce reasonable rules and regulations regarding the placement and manner for the display of the flag of the United States of America or an official or replica flag of any branch of the United States armed forces.
  3. The property owner must display the flag of the United States of America in accordance with 4 U.S.C. §§ 5-10.

Acts 2017, ch. 331, § 1.

Effective Dates. Acts 2017, ch. 331, § 3. July 1, 2017.

66-27-603. Applicability of part.

This part shall apply to dedicatory instruments:

  1. Created on or after July 1, 2017; or
  2. Amended on or after July 1, 2017.

Acts 2017, ch. 331, § 1.

Effective Dates. Acts 2017, ch. 331, § 3. July 1, 2017.

Chapter 28
Uniform Residential Landlord and Tenant Act

Part 1
General Provisions

66-28-101. Short title.

This chapter shall be known and may be cited as the “Uniform Residential Landlord and Tenant Act.”

Acts 1975, ch. 245, § 1.101; T.C.A., § 64-2801.

Cross-References. Rented premises unfit for habitation, title 68, ch. 111.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 8-401 — 8-403.

Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, §§ 1, 2, 5.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

The Tennessee Uniform Residential Landlord and Tenant Act — “A Hodge-podge of Statutory Exclusions,” 34 U. Mem. L. Rev. 903 (2004).

NOTES TO DECISIONS

1. Unauthorized Collection Devices Prohibited.

Metropolitan development and housing authority's policy of excluding applicants for federal assistance because of prior indebtedness created an unauthorized collection device that circumvented the procedures and protections provided to both landlords and tenants under chapter 18 of this title and this chapter. Ferguson v. Metropolitan Development & Housing Agency, 485 F. Supp. 517, 1980 U.S. Dist. LEXIS 10346 (M.D. Tenn. 1980).

2. Judicial Decision Making Limitations.

Where the parties demanded a jury trial to try all disputed issues of fact, including whether plaintiffs were entitled to attorney's fees, and if so, how much, there was nothing in T.C.A. § 66-28-504 or any other section of this chapter which could have been interpreted as allowing the trial judge to determine the amount of attorney's fees. McCormic v. Smith, 668 S.W.2d 304, 1984 Tenn. App. LEXIS 2834 (Tenn. Ct. App. 1984).

3. Pleading Adequate to State Claim for Relief.

Tenant's pleading was adequate to state a claim for relief under either the Uniform Residential Landlord and Tenant Act or under a theory of common law negligence because it clearly established the parties relationship, i.e., landlord and tenant, and alleged that the landlord had a duty to repair an apartment ceiling after the tenant notified it of a leak; the pleading also asserted that the landlord's negligence stemmed from its failure to make necessary repairs. Holloway v. Group Props. LLC, — S.W.3d —, 2017 Tenn. App. LEXIS 577 (Tenn. Ct. App. Aug. 24, 2017).

Collateral References.

Application of usury laws to transactions characterized as “leases.” 94 A.L.R.3d 640.

66-28-102. Application.

  1. This chapter applies only in counties having a population of more than seventy-five thousand (75,000), according to the 2010 federal census or any subsequent federal census.
  2. This chapter applies to rental agreements entered into or extended or renewed after July 1, 1975. Transactions entered into before July 1, 1975, and not extended or renewed after that date, and the rights, duties and interests flowing from them remain valid and may be terminated, completed, consummated, or enforced as required or permitted by any statute or other law amended or repealed by this chapter as though the amendment or repeal has not occurred.
  3. Unless created to avoid the application of this chapter, the following arrangements are not governed by this chapter:
    1. Residence at an institution, public or private, if incidental to detention or the provision of medical, geriatric, educational, counseling, religious, or similar service;
    2. Occupancy under a contract of sale of a dwelling unit or the property of which it is a part, if the occupant is the purchaser or a person who succeeds to the purchaser's interest;
    3. Transient occupancy in a hotel, or motel or lodgings subject to city, state, transient lodgings or room occupancy under the Excise Tax Act, compiled in title 67, chapter 4, part 20;
    4. Occupancy by an owner of a condominium unit or a holder of a proprietary lease in a cooperative; or
    5. Occupancy under a rental agreement covering premises used by the occupant primarily for agricultural purposes.
  4. This chapter shall not apply to any occupancy in a public housing unit or other housing unit that is subject to regulation by the department of housing and urban development and owned by a governmental entity or non-profit corporation to the extent such regulation conflicts with state law, but shall apply to the extent that any such regulations defer to the application of state law.

Acts 1975, ch. 245, §§ 1.201, 1.202, 6.101, 6.102; T.C.A., §§ 64-2802, 64-2804, 64-2864; Acts 1992, ch. 995, §§ 1, 4-6; 2001, ch. 101, § 1; 2008, ch. 1067, §§ 1, 2; 2011, ch. 272, § 1; 2012, ch. 847, § 1.

Compiler's Notes. Acts 1992, ch. 995, § 7 provided that all landlord obligations mentioned in § 66-28-301(a), relative to security deposits, shall apply only to rental agreements signed after July 1, 1992.

For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Acts 2008, ch. 1067, § 4 provided that the act shall apply to rental agreements entered into, extended or renewed on or after October 1, 2008.

Acts 2011, ch. 272, § 16 provided that the act, which added subsection (d), shall apply to rental agreements entered into on or after October 1, 2011.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 1.

Law Reviews.

Avoiding Lease-Drafting Pitfalls (C. Dewees Berry IV), 19 No. 2 Tenn. B.J. 11 (1983).

Contracts — Crawford v. Buckner: Public Policy Expansion in the Judicial Review of Contracts (James Lee Deckard), 24 Mem. St. U.L. Rev. 361 (1994).

Property Law — Landlord-Tenant — Validity of Exculpatory Lease Provisions Abolished in Tennessee Crawford v. Buckner, 839 S.W.2d 754, 1992 Tenn. LEXIS 546 (Tenn. 1992) (Michael L. Gallion), 61 Tenn. L. Rev. 351 (1993).

66-28-103. Purposes — Rules of construction.

  1. This chapter shall be liberally construed and applied to promote its underlying purposes and policies.
  2. Underlying purposes and policies of this chapter are to:
    1. Simplify, clarify, modernize and revise the law governing the rental of dwelling units and the rights and obligations of landlord and tenant;
    2. Encourage landlord and tenant to maintain and improve the quality of housing;
    3. Promote equal protection to all parties; and
    4. Make uniform the law in Tennessee.
  3. Unless displaced by this chapter, the principles of law and equity, including the law relating to capacity to contract, health, safety and fire prevention, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause supplement its provisions.
  4. This chapter being a general chapter intended as a unified coverage of its subject matter, no part of it is to be construed as impliedly repealed by subsequent legislation if that construction can reasonably be avoided.

Acts 1975, ch. 245, §§ 1.102 — 1.104; T.C.A., §§ 64-2861 — 64-2863.

NOTES TO DECISIONS

1. Notice Requirement.

Whether a tenant's claim for recovery is under the Uniform Residential Landlord and Tenant Act (URLTA) or the common law was not dispositive because the notice requirement under the URLTA would only affect the type of damages the tenant could can receive; the tenant was awarded only compensatory damages and was not awarded other damages available only under the URLTA. Holloway v. Group Props. LLC, — S.W.3d —, 2017 Tenn. App. LEXIS 577 (Tenn. Ct. App. Aug. 24, 2017).

66-28-104. Chapter definitions.

Subject to additional definitions contained in this chapter, which apply to specific portions of this chapter, and unless the context otherwise requires, in this chapter:

  1. “Action” means recoupment, counterclaim, set-off, suit in equity, and any other proceeding in which rights are determined, including an action for possession;
  2. “Building and housing codes” means any law, ordinance, or governmental regulation concerning fitness for habitation, or the construction, maintenance, operation, occupancy, use, or appearance of any premises, or dwelling unit;
  3. “Dwelling unit” means a structure or the part of a structure that is used as a home, residence, or sleeping place by one (1) person who maintains a household or by two (2) or more persons who maintain a common household;
  4. “Good faith” means honesty in fact in the conduct of the transaction concerned;
  5. “Landlord” means the owner, lessor, or sublessor of the dwelling unit or the building of which it is a part, and it also means a manager of the premises who fails to disclose as required by § 66-28-302;
  6. “Nuisance vehicle” means any vehicle that is incapable of operating under its own power and is detrimental to the health, welfare or safety of persons in the community;
  7. “Organization” means a corporation, government, governmental subdivision or agency, business trust, estate, trust, partnership or association, two (2) or more persons having a joint or common interest, and any other legal or commercial entity;
    1. “Owner” means one (1) or more persons, jointly or severally, in whom is vested:
      1. All or part of the legal title to property; or
      2. All or part of the beneficial ownership and a right to the present use and enjoyment of the premises;
    2. “Owner” also means a mortgagee in possession;
  8. “Person” means an individual or organization;
  9. “Premises” means a dwelling unit and the structure of which it is a part and facilities and appurtenances therein and grounds, areas and facilities held out for the use of tenants generally or whose use is promised to the tenant;
  10. “Rental agreement” means all agreements, written or oral, and valid rules and regulations adopted under § 66-28-402 embodying the terms and conditions concerning the use and occupancy of a dwelling unit and premises;
  11. “Rents” means all payments to be made to the landlord under the rental agreement;
    1. “Security deposit” means an escrow payment made to the landlord under the rental agreement for the purpose of securing the landlord against financial loss due to damage to the premises occasioned by the tenant's occupancy other than ordinary wear and tear and any monetary damage due to the tenant's breach of the rental agreement;
    2. “Security deposit” shall in no way infer that the landlord is providing any service for the personal protection or safety of the tenant beyond that prescribed by law;
  12. “Substantially impaired” means that a dwelling unit or premises has been deemed unfit for human habitation by a governmental authority;
  13. “Tenant” means a person entitled under a rental agreement to occupy a dwelling unit to the exclusion of others;
  14. “Unauthorized vehicle” means a vehicle that is not registered to a tenant, an occupant or a tenant's known guest, and has remained for more than seven (7) consecutive days on real property leased or rented by a landlord for residential purposes;
  15. “Utilities” means the provision of water, electricity, sewer or natural gas; and
  16. “Vehicle” means any device for carrying passengers, livestock, goods or equipment that moves on wheels and/or runners.

Acts 1975, ch. 245, § 1.301; T.C.A., § 64-2803; Acts 1999, ch. 284, § 2; 2001, ch. 153, §§ 1-3; 2005, ch. 156, § 1; 2011, ch. 272, § 2.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which added the definitions of “substantially impaired” and “utilities”, shall apply to rental agreements entered into on or after October 1, 2011.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

Collateral References.

Constructive eviction by mother tenant's conduct, 1 A.L.R.4th 849.

66-28-105. Jurisdiction and service of process.

  1. The general sessions and circuit courts of this state shall exercise original jurisdiction over any landlord or tenant with respect to any conduct in this state governed by this chapter. In addition to any other method provided by rule or by statute, personal jurisdiction over the parties may be acquired in a civil action or proceeding instituted in law or equity by service of process in the manner provided by law.
  2. A landlord who is not a resident of this state or is a corporation not authorized to do business in this state and engages in a transaction subject to this chapter may designate an agent upon whom service of process may be made in this state. The agent shall be a resident of this state or a corporation authorized to do business in this state. The designation shall be in writing, filed with the secretary of state, and must set forth the name and street address, including zip code, of the agent, the name and street address, including zip code, of the landlord and be accompanied by a ten dollar ($10.00) filing fee. If no designation is made and filed or if process cannot be served in this state upon the designated agent, process may be served upon the secretary of state forthwith by mailing a copy of the process and pleading by registered or certified mail to the defendant or respondent at that party's last known address. The process must be accompanied by a ten dollar ($10.00) fee and specify the address of the defendant. An affidavit of service shall be filed by the secretary of state with the clerk of the court on or before the return day of the process.

Acts 1975, ch. 245, § 1.203; T.C.A., § 64-2805; Acts 1991, ch. 297, § 1.

Law Reviews.

Survey of Tennessee Property Law, II. Estates in General (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 161 (1978).

NOTES TO DECISIONS

1. Jurisdiction.

T.C.A. § 66-28-105 gives the general sessions and circuit courts exclusive subject matter jurisdiction over landlord and tenant disputes relating to conduct governed by the Uniform Residential Landlord and Tenant Act and an action relating to such conduct may not be maintained in chancery court. Woods v. MTC Mgmt., 967 S.W.2d 800, 1998 Tenn. LEXIS 213 (Tenn. 1998).

Chancery court erred in setting aside a general sessions court judgment entered in favor of a property owner in his forcible entry and detainer (FED) action because the Tennessee Uniform Residential Landlord and Tenant Act specifically gave the general sessions and circuit courts jurisdiction over FED actions; the notice provision in the Act is intended to protect the rights of the parties under the lease and does not implicate the authority of the general sessions court to hear the matter. Thompson v. Groves, — S.W.3d —, 2013 Tenn. App. LEXIS 641 (Tenn. Ct. App. Sept. 26, 2013).

66-28-106. Notice.

  1. Either party has notice of a fact if such person:
    1. Has actual knowledge of it; or
    2. Has been given written notice.
  2. All parties must give written notice to the last known or designated address contained in the lease agreement.

Acts 1975, ch. 245, § 1.304; T.C.A., § 64-2806.

66-28-107. Residential landlord registration.

    1. Each landlord of one (1) or more dwelling units is required to furnish the following information with the agency or department of local government that is responsible for enforcing building codes in the jurisdiction where the dwelling units are located:
      1. The landlord or the landlord's agent's name, telephone number, and physical address, which does not include a post office box; and
      2. The street address and unit number, as appropriate, for each dwelling unit that the landlord owns, leases, or subleases or has the right to own, lease, or sublease.
    2. The information required under subdivision (a)(1) shall be furnished on a form provided by the agency or department responsible for enforcing building codes. The agency or department is authorized to collect from a landlord filing the form a fee not to exceed ten dollars ($10.00) per year.
    3. If any information required under subdivision (a)(1) or the ownership of the dwelling units changes, the landlord who transferred the property by sale or otherwise, or the landlord's agent, shall notify the agency or department of such change within thirty (30) days of the change in ownership.
    1. Any landlord who fails to register or who fails to send notification of change of ownership as required by this section shall be assessed a fine in the amount of fifty dollars ($50.00) per week by the agency or department of local government that is responsible for enforcing building codes in the jurisdiction where the dwelling units are located.
    2. Prior to the assessment of the fine, the landlord shall be given an opportunity to appear and be heard at a hearing to be held concerning the landlord's failure to register or failure to send notification of change of ownership. A written notice of the date, time and place of the hearing shall be mailed the landlord at least fifteen (15) days prior to the scheduled hearing.
  1. This section shall only apply to any county having a metropolitan form of government and a population in excess of five hundred thousand (500,000), according to the 2000 federal census or any subsequent federal census.

Acts 2006, ch. 800, § 1; 2014, ch. 845, §§ 1-4.

Compiler's Notes. For tables of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

66-28-108. Notification sent by e-mail.

If the tenant provides an electronic mail address in the rental agreement, any notification required to be sent to the tenant pursuant to this chapter may be made by the landlord through electronic notification to such mail address, unless a provision in this chapter requires a specific form of notification other than electronic notification; provided, however, that the landlord shall not require the tenant to provide an electronic mail address as a condition of entering into a rental agreement.

Acts 2011, ch. 272, § 3.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which enacted this section, shall apply to rental agreements entered into on or after October 1, 2011.

Part 2
Rental Agreements

66-28-201. Terms and conditions.

  1. The landlord and tenant may include in a rental agreement, terms and conditions not prohibited by this chapter or other rule of law including rent, term of the agreement, and other provisions governing the rights and obligations of parties. A rental agreement cannot provide that the tenant agrees to waive or forego rights or remedies under this chapter. The landlord or the landlord's agent shall advise in writing that the landlord is not responsible for, and will not provide, fire or casualty insurance for the tenant's personal property.
  2. In absence of a lease agreement, the tenant shall pay the reasonable value for the use and occupancy of the dwelling unit.
  3. Rent shall be payable without demand at the time and place agreed upon by the parties. Notice is specifically waived upon the nonpayment of rent by the tenant only if such a waiver is provided for in a written rental agreement. Unless otherwise agreed, rent is payable at the dwelling unit and periodic rent is payable at the beginning of any term of one (1) month or less and otherwise in equal monthly installments at the beginning of each month. Upon agreement, rent shall be uniformly apportionable from day to day.
  4. There shall be a five-day grace period beginning the day the rent was due to the day a fee for the late payment of rent may be charged. The date the rent was due shall be included in the calculation of the five-day grace period. If the last day of the five-day grace period occurs on a Sunday or legal holiday, as defined in § 15-1-101, the landlord shall not impose any charge or fee for the late payment of rent; provided, that the rent is paid on the next business day. Any charge or fee, however described, which is charged by the landlord for the late payment of rent, shall not exceed ten percent (10%) of the amount of rent past due.

Acts 1975, ch. 245, § 1.401; T.C.A., § 64-2811; Acts 1984, ch. 876, § 1; 1986, ch. 747, § 1; 1989, ch. 503, § 1; 2000, ch. 666, § 1; 2001, ch. 154, § 1; 2011, ch. 272, § 4; 2013, ch. 206, § 1.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which amended subsection (d), shall apply to rental agreements entered into on or after October 1, 2011.

Acts 2013, ch. 206, § 2 provided that the act, which deleted subsection (e), shall apply to any rental agreement in which title 66, chapter 28 applies that does not incorporate § 66-28-201(e), as it existed prior to April 23, 2013, as a term of the rental agreement, or to any rental agreement in which title 66, chapter 28 applies that does incorporate § 66-28-201(e), as it existed prior to April 23, 2013, as a term of the rental agreement if the rental agreement was entered into on or after April 23, 2013.

Section 66-28-201(e), as it existed prior to April 23, 2013, read: “(e)(1) No charge or fee for the late payment of rent due from a tenant in a public housing project shall exceed five dollars ($5.00) per month. No late charge or fee shall be assessed such tenant unless more than fifteen (15) days have elapsed since the rent was due.

“(2) This subsection (e) shall apply only to counties with a population between two hundred fifty thousand (250,000) and three hundred thousand (300,000) according to the 1980 federal census or any subsequent federal census.”

Cross-References. Leases, title 66, ch. 7.

Notice to tenant of intent to convert rental units to units for sale, § 66-27-123.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

NOTES TO DECISIONS

1. Equitable Remedies Available.

Although a tenant failed to comply with the provisions of the lease requiring that it give written notice at least 90 days prior to the expiration of the primary term, tenant was entitled to the benefit of the equitable rule that relieves a tenant from literal compliance with the terms of the lease when a good faith effort has been made to comply and the tenant is not guilty of willful or gross negligence, and the lessor has not been prejudiced by delayed notice. Southern Region Indus. Realty, Inc. v. Chattanooga Whse. & Cold Storage Co., 612 S.W.2d 162, 1980 Tenn. App. LEXIS 415, 27 A.L.R.4th 259 (Tenn. Ct. App. 1980).

2. Expiration.

For purposes of application of a bankruptcy Chapter 13 debtor's right to cure default and maintain payments under a residential lease, the lease is not “expired” until execution of a writ of possession by service upon the tenant. In re Talley, 69 B.R. 219, 1986 Bankr. LEXIS 4788 (Bankr. M.D. Tenn. 1986).

3. Exculpatory Clause.

An exculpatory clause in the context of a landlord-tenant relationship refers to a clause which deprives the tenant of the right to recover damages for harm caused by the landlord's negligence by releasing the landlord from liability for future acts of negligence. Crawford v. Buckner, 839 S.W.2d 754, 1992 Tenn. LEXIS 546 (Tenn. 1992).

Collateral References.

Implied covenant or obligation to provide lessee with actual possession. 96 A.L.R.3d 1155.

Landlord's permitting third party to occupy premises rent free as acceptance of tenant's surrender of premises. 18 A.L.R.5th 437.

Lease provisions allowing termination or forfeiture for violation of law. 92 A.L.R.3d 967.

What amounts to “sale” of property for purposes of provision giving tenant right of first refusal if landlord desires to sell. 70 A.L.R.3d 203.

66-28-202. Effect of unsigned or undelivered agreement.

  1. If the landlord does not sign a written rental agreement, acceptance of rent without reservation by the landlord binds the parties on a month to month tenancy.
  2. Any person or persons taking possession without payment of rent and failing to sign a written rental agreement delivered to them by the landlord or who enter without oral agreement are deemed to be trespassers and may be evicted forthwith and may be held liable for damages and rent for the term of trespass and reasonable attorney's fees; provided, that if such person or persons pay rent, which is accepted by the landlord, such person or persons shall become tenants of the landlord.

Acts 1975, ch. 245, § 1.402; T.C.A., § 64-2812; Acts 2011, ch. 272, § 5.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which amended subsection (b), shall apply to rental agreements entered into on or after October 1, 2011.

66-28-203. Prohibited provisions.

  1. No rental agreement may provide that the tenant:
    1. Authorizes any person to confess judgment on a claim arising out of the rental agreement;
    2. Agrees to the exculpation or limitation of any liability of the landlord to the tenant arising under law or to indemnify the landlord for that liability or the costs connected with such liability.
  2. A provision prohibited by subsection (a) included in an agreement is unenforceable. Should a landlord willfully provide a rental agreement containing provisions known by the landlord to be prohibited by this chapter, the tenant may recover actual damages sustained. The tenant cannot agree to waive or forego rights or remedies under this chapter.

Acts 1975, ch. 245, § 1.403; T.C.A., § 64-2813.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

Property Law — Landlord-Tenant — Validity of Exculpatory Lease Provisions Abolished in Tennessee Crawford v. Buckner, 839 S.W.2d 754, 1992 Tenn. LEXIS 546 (Tenn. 1992) (Michael L. Gallion), 61 Tenn. L. Rev. 351 (1993).

NOTES TO DECISIONS

1. Exculpatory Provision.

Exculpatory provision in tenant's lease was void as against public policy. Crawford v. Buckner, 839 S.W.2d 754, 1992 Tenn. LEXIS 546 (Tenn. 1992).

In the residential landlord-tenant relationship, the public policy against exculpatory clauses, affecting the public interest, should control lease provisions limiting a landlord's liability to its tenants. Crawford v. Buckner, 839 S.W.2d 754, 1992 Tenn. LEXIS 546 (Tenn. 1992).

This section declares no public policy in the area of exculpatory clauses for the least populous counties of the state; therefore, the limited application of the section is not a declaration by the legislature that the public policy of Tennessee favors freedom of contract for residential leases in the counties not covered by this section. Crawford v. Buckner, 839 S.W.2d 754, 1992 Tenn. LEXIS 546 (Tenn. 1992).

Collateral References.

Lease provisions providing for rent adjustment based on event or formula outside control of parties. 87 A.L.R.3d 986.

66-28-204. Unconscionability.

  1. If the court, as a matter of law, finds:
    1. A rental agreement or any provision thereof was unconscionable when made, the court shall enforce the remainder of the agreement without the unconscionable provision, or limit the application of any unconscionable provision to avoid an unconscionable result; or
    2. A settlement in which a party waives or agrees to forego a claim or right under this chapter or under a rental agreement was unconscionable at the time it was made, the court shall enforce the remainder of the settlement without the unconscionable provision, or limit the application of any unconscionable provision to avoid the unconscionable result.
  2. If unconscionability is put into issue by a party or by the court upon its own motion, the parties shall be afforded a reasonable opportunity to present evidence as to the setting, purpose, and effect of the rental agreement or settlement to aid the court in making the determination.
  3. A provision in a rental agreement that authorizes a landlord to hold a tenant in breach of the rental agreement in accordance with § 66-28-505(f) is not unconscionable and is fully enforceable.

Acts 1975, ch. 245, § 1.303; T.C.A., § 64-2814; Acts 2018, ch. 960, § 3.

Compiler's Notes. Acts 2018, ch. 960, § 4 provided that the act, which amended this section, shall apply to any rental agreement entered into or renewed on or after July 1, 2018.

Amendments. The 2018 amendment added (c).

Effective Dates. Acts 2018, ch. 960, § 4. July 1, 2018.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

Part 3
Landlord Obligations

66-28-301. Security deposits.

  1. All landlords of residential property requiring security deposits prior to occupancy are required to deposit all tenants' security deposits in an account used only for that purpose, in any bank or other lending institution subject to regulation by the state or any agency of the United States government.
  2. Except as otherwise provided in subdivision (b)(2)(B), the tenant shall have the right to inspect the premises to determine the tenant's liability for physical damages that are the basis for any charge against the security deposit. An inspection of the premises to determine the tenant's liability for physical damages that are the basis for any charge against the security deposit and the landlord's estimated costs to repair such damage shall be conducted as follows:
      1. Upon request by the landlord for a tenant to vacate or within five (5) days after receipt by the landlord of written notice of the tenant's intent to vacate, the landlord may provide notice to the tenant of the tenant's right to be present at the inspection of the premises. Such notice may advise the tenant that the tenant may request a time of inspection to be set by the landlord during normal working hours. The landlord may require the inspection to be after the tenant has completely vacated the premises and is ready to surrender possession and return all means of access to the entire premises; provided, that the inspection shall be either on the day the tenant completely vacates the premises or within four (4) calendar days of the tenant vacating the premises. If the landlord provides written notice of the tenant's right to be present at the landlord's inspection and the tenant schedules an inspection, but fails to attend such inspection, the tenant waives the right to contest any damages found by the landlord as a result of such inspection by the landlord; provided, that notice of the tenant's waiver upon such circumstances is set out in the rental agreement.
      2. If a tenant requests a mutual inspection as provided in subdivision (b)(1)(A), the landlord and tenant shall then inspect the premises and compile a comprehensive listing of any presently ascertainable damage to the unit that is the basis for any charge against the security deposit and the estimated dollar cost of repairing the damage. The landlord and tenant shall sign the listing. Except as provided in subsection (g), the signatures of the landlord and the tenant on the listing shall be conclusive evidence of the accuracy of the listing. If the tenant refuses to sign the listing, the tenant shall state specifically in writing the items on the list to which the tenant dissents.
      1. If the tenant has acted in any manner set out in subdivisions (b)(2)(B)(i)-(vi), the landlord may inspect the premises and compile a comprehensive listing of any presently ascertainable damage to the unit that is the basis for any charge against the security deposit and the estimated dollar cost of repairing the damage without providing the tenant an opportunity to inspect the premises; provided, that the landlord provides a written copy, sent by certificate of mailing to the tenant, of the listing of any damages and estimated cost of repairs to the tenant upon the tenant's written request.
      2. The tenant shall not have a right to inspect the premises as provided in this section if the tenant has:
        1. Vacated the rental premises without giving written notice;
        2. Abandoned the premises;
        3. Been judicially removed from the premises;
        4. Not contacted the landlord after the landlord's notice of right to mutual inspection of the premises;
        5. Failed to appear at the arranged time of inspection as provided in subdivision (b)(1); or
        6. If the tenant has not requested a mutual inspection pursuant to subsection (b) or is otherwise inaccessible to the landlord.
  3. No landlord shall be entitled to retain any portion of a security deposit if the security deposit was not deposited in an account as required by subsection (a) and a listing of damages is not provided as required by subsection (b).
  4. A tenant who disputes the accuracy of the final damage listing given pursuant to subsection (b) may bring an action in a circuit or general sessions court of competent jurisdiction of this state. The tenant's claim shall be limited to those items from which the tenant specifically dissented in accordance with the listing or specifically dissented in accordance with subsection (b); otherwise the tenant shall not be entitled to recover any damages under this section.
  5. Should a tenant vacate the premises with unpaid rent or other amounts due and owing, the landlord may remove the deposit from the account and apply the moneys to the unpaid debt.
  6. In the event the tenant leaves not owing rent and having any refund due, the landlord shall send notification to the last known or reasonably determinable address, of the amount of any refund due the tenant. In the event the landlord shall not have received a response from the tenant within sixty (60) days from the sending of such notification, the landlord may remove the deposit from the account and retain it free from any claim of the tenant or any person claiming in the tenant's behalf.
  7. Nothing in this section precludes the landlord from recovering the costs of any and all contractual damages to which the landlord may be entitled, plus the cost of any additional physical damages to the premises that are discovered after an inspection that has been completed pursuant to subsection (b); provided, however, that costs of any physical damage to the premises may only be recovered if the damage was discovered by the landlord prior to the earlier of:
    1. Thirty (30) days after the tenant vacated or abandoned the premises; or
    2. Seven (7) days after a new tenant takes possession of the premises.
  8. Notwithstanding subsection (a), all landlords of residential property shall be required to notify their tenants at the time such persons sign the lease and submit the security deposit, of the location of the account required to be maintained pursuant to this section, but shall not be required to provide the account number to such persons.

Acts 1975, ch. 245, § 2.101; T.C.A., § 64-2821; Acts 1984, ch. 645, § 1; 1992, ch. 995, §§ 2, 4-6; 1997, ch. 397, §§ 1, 2; 2001, ch. 153, § 4; 2004, ch. 683, § 1; 2005, ch. 156, § 2; 2008, ch. 1067, § 3; 2011, ch. 272, §§ 6-9; 2012, ch. 887, § 1.

Compiler's Notes. Acts 1992, ch. 995, § 7 provided that all landlord obligations mentioned in subsection (a) relative to security deposits shall apply only to rental agreements signed after July 1, 1992.

Acts 2008, ch. 1067, § 4 provided that the act shall apply to rental agreements entered into, extended or renewed on or after October 1, 2008.

Acts 2011, ch. 272, § 16 provided that the act, which amended subsections (a), (b), (c) and  (g), shall apply to rental agreements entered into on or after October 1, 2011.

Acts 2012, ch. 887, § 3 provided that the act, which amended subsection  (h),  shall apply to rental agreements entered into or renewed on or after May 9, 2012.

Law Reviews.

Avoiding Lease-Drafting Pitfalls (C. Dewees Berry IV), 19 No. 2 Tenn. B.J. 11 (1983).

66-28-302. Address of landlord or agent.

  1. The landlord or any person authorized to enter into a rental agreement on the landlord's behalf shall disclose to the tenant in writing at or before the commencement of the tenancy the name and address of:
    1. The agent authorized to manage the premises; and
    2. An owner of the premises or a person or agent authorized to act for and on behalf of the owner for the acceptance of service of process and for receipt of notices and demands.
  2. The information required to be furnished by this section shall be kept current and this section extends to and is enforceable against any successor landlord, owner or manager.
  3. A person who fails to comply with subsection (a) becomes an agent of each person who is a landlord for the purpose of service of process and receiving and receipting for notices and demands.

Acts 1975, ch. 245, § 2.102; T.C.A., § 64-2822.

66-28-303. Possession of dwelling.

At the commencement of the terms, the landlord shall deliver possession of the premises to the tenant in compliance with the rental agreement and § 66-28-304. The landlord may bring an action for possession against any person wrongfully in possession and may recover the damages provided in § 66-28-512(c).

Acts 1975, ch. 245, § 2.103; T.C.A., § 64-2823.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 16.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

66-28-304. Maintenance by landlord.

  1. The landlord shall:
    1. Comply with requirements of applicable building and housing codes materially affecting health and safety;
    2. Make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition;
    3. Keep all common areas of the premises in a clean and safe condition; and
    4. In multi-unit complexes of four (4) or more units, provide and maintain appropriate receptacles and conveniences for the removal of ashes, garbage, rubbish and other waste from common points of collection subject to § 66-28-401(3).
  2. If the duty imposed by subdivision (a)(1) is greater than any duty imposed by any other paragraph of subsection (a), the landlord's duty shall be determined by reference to subdivision (a)(1).
  3. The landlord and tenant may agree in writing that the tenant perform specified repairs, maintenance tasks, alterations, and remodeling, but only if the transaction is entered into in good faith and not for the purpose of evading the obligations of the landlord.
  4. The landlord may not treat performance of the separate agreement described in subsection (c) as a condition to any obligation or performance of any rental agreement.

Acts 1975, ch. 245, § 2.104; T.C.A., § 64-2824.

Cross-References. Rented premises unfit for habitation, title 68, ch. 111.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 22.

Law Reviews.

The Unwarranted Implication of a Warranty of Fitness in Commercial Leases — An Alternative Approach, 41 Vand. L. Rev. 1057 (1988).

Tort — Premises Liability — Worsham v. Pilot Oil Corp.: Imputing Constructive Notice to the Proprietor of a Self-Service Establishment in Tennessee, 19 Mem. St. U.L. Rev. 109 (1989).

NOTES TO DECISIONS

1. Landlord's Liability for Dangerous Condition.

When a landlord and tenant have coextensive knowledge of a dangerous condition, the landlord is not liable to the tenant or the tenant's employees for injuries sustained as a result of the dangerous condition. Lethcoe v. Holden, 31 S.W.3d 254, 2000 Tenn. App. LEXIS 153 (Tenn. Ct. App. 2000), review or rehearing denied, — S.W.3d —, 2000 Tenn. LEXIS 599 (Tenn. 2000).

Mobile home park residents failed to state a claim based on allegations that the park owners and managers failed to keep common areas in a safe and habitable condition during a flood; the general requirement under T.C.A. § 66-28-304 to keep premises in a clean, safe, and habitable condition was preempted by T.C.A. § 66-28-503, which relieved the owners and managers from the obligation to maintain the common areas when they were uninhabitable due to casualty. Guevara v. Umh Props., — F. Supp. 2d —, 2014 U.S. Dist. LEXIS 154394 (W.D. Tenn. Oct. 29, 2014).

2. Landlord's Insurance.

Insurer had duty to defend against lawsuit alleging renters of insured's property sustained bodily injuries due to mold affecting water at property because policy arguably provided coverage for mold-related claims stemming from insured's alleged non-compliance with T.C.A. § 66-28-304 and mold exclusion did not apply because water was “good” that was intended for consumption and therefore fell within exception to mold exclusion. Acuity v. Reed & Assocs. of TN, LLC, — F. Supp. 2d —,  2015 U.S. Dist. LEXIS 109412 (W.D. Tenn. Aug. 19, 2015).

3. Duty to Repair.

Trial court properly ruled for a tenant in her action to recover for injuries she sustained when a light fixture and ceiling fell due to a water leak because the landlord had notice of the water and had a duty to repair the leak but failed to; regardless of whether the legal duty was derived from the Uniform Residential Landlord and Tenant Act or common law negligence, on receiving notice of a potential defect, the landlord had a duty to inspect the apartment, locate the defect, and repair it. Holloway v. Group Props. LLC, — S.W.3d —, 2017 Tenn. App. LEXIS 577 (Tenn. Ct. App. Aug. 24, 2017).

Collateral References.

Landlord's liability for injury or death of tenant's child from lead paint poisoning. 19 A.L.R.5th 405.

Tenant's agreement to indemnify landlord against all claims as including losses resulting from landlord's negligence. 4 A.L.R.4th 798.

66-28-305. Limitation of landlord's liability.

Unless otherwise agreed, a landlord who conveys premises that include a dwelling unit subject to a rental agreement in a good faith sale to a bona fide purchaser, landlord or agent, or both, is relieved of liability under the rental agreement and this chapter as to events occurring subsequent to written notice to the tenant of the conveyance and transfer of the security deposit to the bona fide purchaser.

Acts 1975, ch. 245, § 2.105; T.C.A., § 64-2825; Acts 2005, ch. 156, § 3.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

Collateral References.

Landlord's liability for failure to protect tenant from criminal acts of third person. 43 A.L.R.5th 207.

Part 4
Tenant Obligations

66-28-401. General maintenance and conduct obligations.

The tenant shall:

  1. Comply with all obligations primarily imposed upon tenants by applicable provisions of building and housing codes materially affecting health and safety;
  2. Keep that part of the premises that the tenant occupies and uses as clean and safe as the condition of the premises when the tenant took possession;
  3. Dispose from the tenant's dwelling unit all ashes, rubbish, garbage, and other waste to the designated collection areas and into receptacles;
  4. Not deliberately or negligently destroy, deface, damage, impair or remove any part of the premises or permit any person to do so; and shall not engage in any illegal conduct on the premises; and
  5. Act and require other persons on the premises, with the tenant's or other occupants' consent, to act in a manner that will not disturb the neighbors' peaceful enjoyment of the premises.

Acts 1975, ch. 245, § 3.101; T.C.A., § 64-2831; Acts 2005, ch. 156, § 4.

Cross-References. Covenant to leave in good repair, § 66-7-102.

Law Reviews.

Avoiding Lease-Drafting Pitfalls (C. Dewees Berry IV), 19 No. 2 Tenn. B.J. 11 (1983).

NOTES TO DECISIONS

1. Condition of Premises

Trial court properly entered a monetary judgment against the tenants because the trial court found that the tenants left the premises in “deplorable condition” in violation of the lease and statute, there was neither a trial transcript nor a statement of the evidence in the record, their brief failed to conform to the procedural rules, and nothing in the record supported their allegation that they did not receive a fair trial due to the landlord's family's influence in the court system, and both the terms of the lease itself and the applicable statutes entitled the landlord to apply the security deposit toward repairing the damages caused by the tenants and to seek recovery for additional physical damage to the premises over and above the amount of the security deposit. Dykes v. Okorie, — S.W.3d —, 2020 Tenn. App. LEXIS 254 (Tenn. Ct. App. May 29, 2020).

Collateral References.

Measure and elements of damages for lessee's breach of covenant as to repairs. 45 A.L.R.5th 251.

Tenant's agreement to indemnify landlord against all claims as including losses resulting from landlord's negligence. 4 A.L.R.4th 798.

66-28-402. Rules and regulations.

  1. A landlord, from time to time, may adopt rules or regulations, however described, concerning the tenant's use and occupancy of the premises. It is enforceable against the tenant only if:
    1. Its purpose is to promote the convenience, safety, or welfare of the tenants in the premises, preserve the landlord's property from abusive use, or make a fair distribution of services and facilities held out for the tenants generally;
    2. It is reasonably related to the purpose for which it is adopted;
    3. It applies to all tenants in the premises;
    4. It is sufficiently explicit in its prohibition, direction, or limitation of the tenant's conduct to fairly inform the tenant of what the tenant must or must not do to comply;
    5. It is not for the purpose of evading the obligations of the landlord; and
    6. The tenant has notice of it at the time the tenant enters into the rental agreement.
  2. A rule or regulation adopted after the tenant enters into the rental agreement is enforceable against the tenant if reasonable notice of its adoption is given to the tenant and it does not work a substantial modification of the rental agreement.

Acts 1975, ch. 245, § 3.102; T.C.A., § 64-2832.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

66-28-403. Access by landlord.

  1. The tenant shall not unreasonably withhold consent to the landlord to enter onto the premises, including entering into the dwelling unit, in order to inspect the premises, make necessary or agreed repairs, decorations, alterations, or improvements, supply necessary or agreed services, or exhibit the premises to prospective or actual purchasers, mortgagees, workers or contractors.
  2. The landlord may enter the premises without consent of the tenant in case of emergency. “Emergency” means a sudden, generally unexpected occurrence or set of circumstances demanding immediate action.
  3. Where no known emergency exists, if any utilities have been turned off due to no fault of the landlord, the landlord shall be permitted to enter the premises. The landlord may inspect the premises to ascertain any damages to the premises and make necessary repairs of damages resulting from the lack of utilities.
  4. The landlord shall not abuse the right of access or use it to harass the tenant.
  5. The landlord has no right of access to the premises except:
    1. By court order;
    2. As permitted by this section, § 66-28-506 and § 66-28-507(b);
    3. If the tenant has abandoned or surrendered the premises;
    4. If the tenant is deceased, incapacitated or incarcerated; or
    5. Within the final thirty (30) days of the termination of the rental agreement for the purpose of showing the premises to prospective tenants; provided, that such right of access is set forth in the rental agreement and notice is given to the tenant at least twenty-four (24) hours prior to entry.

Acts 1975, ch. 245, § 3.103; T.C.A., § 64-2833; Acts 2011, ch. 272, § 10.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which amended this section, shall apply to rental agreements entered into on or after October 1, 2011.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

NOTES TO DECISIONS

1. Relation to Fourth Amendment.

District court erred in concluding that apartment manager was not acting as an agent of the government for purposes of the fourth amendment when he entered an apartment on a ruse in order to determine whether defendant was in the apartment; police officers urged the apartment manager to investigate and enter the apartment, and the manager, independent of his interaction with the officers, had no reason or duty to enter the apartment pursuant to T.C.A. § 66-28-403(b). United States v. Hardin, 539 F.3d 404, 2008 FED App. 317P, 2008 U.S. App. LEXIS 18135 (6th Cir. Aug. 25, 2008).

66-28-404. Use and occupation by tenant.

Unless otherwise agreed, the tenant shall occupy the dwelling unit only as a dwelling unit. The rental agreement may require that the tenant notify the landlord of any anticipated extended absence from the premises in excess of seven (7) days. Notice shall be given on or before the first day of any extended absence.

Acts 1975, ch. 245, § 3.104; T.C.A., § 64-2834.

Collateral References.

Implied covenant or obligation to provide lessee with actual possession. 96 A.L.R.3d 1155.

Lease provisions allowing termination or forfeiture for violation of law. 92 A.L.R.3d 967.

66-28-405. Abandonment.

  1. The tenant's unexplained or extended absence from the premises for thirty (30) days or more without payment of rent as due shall be prima facie evidence of abandonment. The landlord is then expressly authorized to reenter and take possession of the premises.
    1. The tenant's nonpayment of rent for fifteen (15) days past the rental due date, together with other reasonable factual circumstances indicating the tenant has permanently vacated the premises, including, but not limited to, the removal by the tenant of substantially all of the tenant's possessions and personal effects from the premises, or the tenant's voluntary termination of utility service to the premises, shall also be prima facie evidence of abandonment.
    2. In cases described in subdivision (b)(1), the landlord shall post notice at the rental premises and shall also send the notice to the tenant by regular mail, postage prepaid, at the rental premises address. The notice shall state that:
      1. The landlord has reason to believe that the tenant has abandoned the premises;
      2. The landlord intends to reenter and take possession of the premises, unless the tenant contacts the landlord within ten (10) days of the posting and mailing of the notice;
      3. If the tenant does not contact the landlord within the ten-day period, the landlord intends to remove any and all possessions and personal effects remaining in or on the premises and to rerent the dwelling unit; and
      4. If the tenant does not reclaim the possessions and personal effects within thirty (30) days of the landlord taking possession of the possessions and personal effects, the landlord intends to dispose of the tenant's possessions and personal effects as provided for in subsection (c).
    3. The notice shall also include a telephone number and a mailing address at which the landlord may be contacted.
    4. If the tenant fails to contact the landlord within ten (10) days of the posting and mailing of the notice, the landlord may reenter and take possession of the premises. If the tenant contacts the landlord within ten (10) days of the posting and mailing of the notice and indicates the tenant's intention to remain in possession of the rental premises, the landlord shall comply with the provisions of this chapter relative to termination of tenancy and recovery of possession of the premises through judicial process.
  2. When proceeding under either subsection (a) or (b), the landlord shall remove the tenant's possessions and personal effects from the premises and store the personal possessions and personal effects for not less than thirty (30) days. The tenant may reclaim the possessions and personal effects from the landlord within the thirty-day period. If the tenant does not reclaim the possessions and personal effects within the thirty-day period, the landlord may sell or otherwise dispose of the tenant's possessions and personal effects and apply the proceeds of the sale to the unpaid rents, damages, storage fees, sale costs and attorney's fees. Any balances are to be held by the landlord for a period of six (6) months after the sale.

Acts 1975, ch. 245, § 3.105; T.C.A., § 64-2835; Acts 2005, ch. 156, § 5.

Cross-References. Disposition of unclaimed property, title 66, ch. 29.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

NOTES TO DECISIONS

1. Tenant's Suit for Violation of Section.

Where the landlord's role in the removal of his former tenant's property was merely speculative, the tenant could not recover damages from the landlord for breach of T.C.A. § 66-28-405. Leonard v. Gilreath, 625 S.W.2d 722, 1981 Tenn. App. LEXIS 557 (Tenn. Ct. App. 1981).

66-28-406. Exception to policy prohibiting or limiting, or requiring payment for, animals or pets for tenant or prospective tenant with disability who requires use of service animal or support animal.

  1. As used in this section:
    1. “Disability” means:
      1. A physical or mental impairment that substantially limits one (1) or more major life activities;
      2. A record of an impairment described in subdivision (a)(1)(A); or
      3. Being regarded as having an impairment described in subdivision (a)(1)(A);
    2. “Health care” means any care, treatment, service, or procedure to maintain, diagnose, or treat an individual's physical or mental condition;
    3. “Healthcare provider” means a person who is licensed, certified, or otherwise authorized or permitted by the laws of any state to administer health care in the ordinary course of business or practice of a profession;
    4. “Reliable documentation” means written documentation provided by:
      1. A healthcare provider with actual knowledge of an individual's disability;
      2. An individual or entity with a valid, unrestricted license, certification, or registration to serve persons with disabilities with actual knowledge of an individual's disability; or
      3. A caregiver, reliable third party, or a governmental entity with actual knowledge of an individual's disability;
    5. “Service animal” means a dog or miniature horse that has been individually trained to work or perform tasks for an individual with a disability; and
    6. “Support animal” means an animal selected to accompany an individual with a disability that has been prescribed or recommended by a healthcare provider to work, provide assistance, or perform tasks for the benefit of the individual with a disability, or provide emotional support that alleviates one (1) or more identified symptoms or effects of the individual's disability.
  2. A tenant or prospective tenant with a disability who requires the use of a service animal or support animal may request an exception to a landlord's policy that prohibits or limits animals or pets on the premises or that requires any payment by a tenant to have an animal or pet on the premises.
  3. A landlord who receives a request made under subsection (b) from a tenant or prospective tenant may ask that the individual, whose disability is not readily apparent or known to the landlord, submit reliable documentation of a disability and the disability-related need for a service animal or support animal. If the disability is readily apparent or known but the disability-related need for the service animal or support animal is not, then the landlord may ask the individual to submit reliable documentation of the disability-related need for a service animal or support animal.
  4. A landlord who receives reliable documentation under subsection (c) may verify the reliable documentation. However, nothing in this subsection (d) authorizes a landlord to obtain confidential or protected medical records or confidential or protected medical information concerning a tenant's or prospective tenant's disability.
  5. A landlord may deny a request made under subsection (b) if a tenant or prospective tenant fails to provide accurate, reliable documentation that meets the requirements of subsection (c), after the landlord requests the reliable documentation.
    1. It is deemed to be material noncompliance and default by the tenant with the rental agreement, if the tenant:
      1. Misrepresents that there is a disability or disability-related need for the use of a service animal or support animal; or
      2. Provides documentation under subsection (c) that falsely states an animal is a service animal or support animal.
    2. In the event of any violation of subdivision (f)(1), the landlord may terminate the tenancy and recover damages, including, but not limited to, reasonable attorney's fees.
  6. Notwithstanding any other law to the contrary, a landlord is not liable for injuries by a person's service animal or support animal permitted on the premises as a reasonable accommodation to assist the person with a disability pursuant to the Fair Housing Act, as amended, (42 U.S.C. §§ 3601 et seq.); the Americans with Disabilities Act of 1990 (42 U.S.C. §§ 12101 et seq.); Section 504 of the Rehabilitation Act of 1973, as amended, (29 U.S.C. § 701); or any other federal, state, or local law.
  7. Only to the extent it conflicts with federal or state law, this section does not apply to public housing units owned by a governmental entity.

Acts 2019, ch. 236, § 5.

Compiler's Notes. Acts 2019, ch. 236, § 6 provided that the act shall apply to any rental agreement entered into, amended, or renewed on or after July 1, 2019, and any request for an exception to a landlord's policy that prohibits or limits animals on the property made on or after July 1, 2019.

Effective Dates. Acts 2019, ch. 236, § 6. July 1, 2019.

Cross-References. Confidentiality of public records, § 10-7-504.

Part 5
Enforcement and Remedies

66-28-501. Noncompliance with rental agreement by landlord.

  1. Except as provided in this chapter, the tenant may recover damages, obtain injunctive relief and recover reasonable attorney's fees for any noncompliance by the landlord with the rental agreement or any section of this chapter upon giving fourteen (14) days' written notice.
  2. If the rental agreement is terminated for noncompliance after sufficient notice, the landlord shall return all prepaid rent and security deposits recoverable by the tenant under § 66-28-301.

Acts 1975, ch. 245, § 4.101; 1978, ch. 735, § 1; T.C.A., § 64-2841.

Cross-References. Forfeiture of rent by landlord for failure to comply with health department order, § 68-111-104.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 16.

Law Reviews.

Self-Help: Extrajudicial Rights, Privileges and Remedies in Contemporary American Society, 37 Vand. L. Rev. 845 (1984).

NOTES TO DECISIONS

1. Notice Requirement.

Whether a tenant's claim for recovery is under the Uniform Residential Landlord and Tenant Act (URLTA) or the common law was not dispositive because the notice requirement under the URLTA would only affect the type of damages the tenant could can receive; the tenant was awarded only compensatory damages and was not awarded other damages available only under the URLTA. Holloway v. Group Props. LLC, — S.W.3d —, 2017 Tenn. App. LEXIS 577 (Tenn. Ct. App. Aug. 24, 2017).

Collateral References.

Failure of landlord to make, or permit tenant to make, repairs or alterations required by public authority as constructive eviction. 86 A.L.R.3d 352.

Landlord's liability to third party for repairs authorized by tenant. 46 A.L.R.5th 1.

Propriety of class action in state courts to assert tenant's rights against landlord. 73 A.L.R.3d 852.

Tenant's recovery of damages for emotional distress under Uniform Residential Landlord and Tenant Act. 6 A.L.R.4th 528.

66-28-502. Failure to supply essential services.

    1. If the landlord deliberately or negligently fails to supply essential services, the tenant shall give written notice to the landlord specifying the breach and may do one (1) of the following:
      1. Procure essential services during the period of the landlord's noncompliance and deduct their actual and reasonable costs from the rent;
      2. Recover damages based upon the diminution in the fair rental value of the dwelling unit, provided tenant continues to occupy premises; or
      3. Procure reasonable substitute housing during the period of the landlord's noncompliance, in which case the tenant is excused from paying rent for the period of the landlord's noncompliance.
    2. In addition to the remedy provided in subdivision (a)(1)(C), the tenant may recover the actual and reasonable value of the substitute housing and in any case under this subsection (a), reasonable attorney's fees.
    3. “Essential services” means utility services, including gas, heat, electricity, and any other obligations imposed upon the landlord which materially affect the health and safety of the tenant.
  1. A tenant who proceeds under this section may not proceed under § 66-28-501 or § 66-28-503 as to that breach.
  2. The rights under this section do not arise until the tenant has given written notice to the landlord and has shown that the condition was not caused by the deliberate or negligent act or omission of the tenant, a member of the tenant's family, or other person on the premises with the tenant's consent.

Acts 1975, ch. 245, § 4.102; 1978, ch. 735, § 2; T.C.A., § 64-2842.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

NOTES TO DECISIONS

1. Counterclaim Properly Dismissed.

When a decedent's estate's trustee sued the decedent's nephew to recover funds the nephew transferred from the decedent's revocable living trust account, the nephew's counterclaim for wrongful eviction, based on the trustee terminating services to the decedent's residence, in which the nephew had been living, was properly dismissed because: (1) a trust document showed the decedent conveyed the residence to the decedent's trust, and the trustee became responsible for managing the residence upon the decedent's death; and (2) the nephew offered no proof that the nephew entered into a rental agreement with either the decedent or the trustee. Johnston v. Johnston, — S.W.3d —, 2014 Tenn. App. LEXIS 124 (Tenn. Ct. App. Mar. 6, 2014), appeal denied, — S.W.3d —, 2014 Tenn. LEXIS 506 (Tenn. June 20, 2014), cert. denied, 190 L. Ed. 2d 365, 135 S. Ct. 482, — U.S. —, 2014 U.S. LEXIS 7451 (U.S. 2014).

Collateral References.

Failure of landlord to make, or permit tenant to make, repairs or alterations required by public authority as constructive eviction. 86 A.L.R.3d 352.

Landlord's liability to third party for repairs authorized by tenant. 46 A.L.R.5th 1.

66-28-503. Fire or casualty damage.

  1. If the dwelling unit or premises are damaged or destroyed by fire or casualty to an extent that the use of the dwelling unit is substantially impaired, the tenant:
    1. May immediately vacate the premises; and
    2. Shall notify the landlord in writing within fourteen (14) days thereafter of the tenant's intention to terminate the rental agreement, in which case the rental agreement terminates as of the date of vacating.
  2. If the dwelling unit or premises are damaged or destroyed by fire or casualty to an extent that restoring the dwelling unit or premises to its undamaged condition requires the tenant to vacate the premises, the landlord is authorized to terminate the rental agreement within fourteen (14) days of providing written notice to the tenant.
  3. If the rental agreement is terminated, the landlord shall return all prepaid rent and security deposits recoverable under § 66-28-301. If the tenant vacates pursuant to this section, accounting for rent is to occur as of the date the tenant returns the keys to the landlord or has, in fact, vacated the dwelling unit or premises whichever date is earlier.

Acts 1975, ch. 245, § 4.103; T.C.A., § 64-2843; Acts 2013, ch. 107, §§ 1, 2.

Compiler's Notes. Acts 2013, ch. 107, § 3 provided that the act, which added present subsection (b) and redesignated former subsection (b) as present amended subsection (c), shall apply to rental agreements entered into or renewed on or after July 1, 2013.

Cross-References. Tenant's remedy where leased building suffers casualty damage, § 66-7-102.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 31.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

NOTES TO DECISIONS

1. Landlord's Obligations.

Mobile home park residents failed to state a claim based on allegations that the park owners and managers failed to keep common areas in a safe and habitable condition during a flood; the general requirement under T.C.A. § 66-28-304 to keep premises in a clean, safe, and habitable condition was preempted by T.C.A. § 66-28-503, which relieved the owners and managers from the obligation to maintain the common areas when they were uninhabitable due to casualty. Guevara v. Umh Props., — F. Supp. 2d —, 2014 U.S. Dist. LEXIS 154394 (W.D. Tenn. Oct. 29, 2014).

66-28-504. Unlawful ouster, exclusion, or diminution of service.

If the landlord unlawfully removes or excludes the tenant from the premises or willfully diminishes services to the tenant by interrupting essential services as provided in the rental agreement to the tenant, the tenant may recover possession or terminate the rental agreement and, in either case, recover actual damages sustained by the tenant, and punitive damages when appropriate, plus a reasonable attorney's fee. If the rental agreement is terminated under this section, the landlord shall return all prepaid rent and security deposits.

Acts 1975, ch. 245, § 4.104; T.C.A., § 64-2844.

Cross-References. Rented premises unfit for habitation, title 68, ch. 111.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 16.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

NOTES TO DECISIONS

1. Attorney's Fees.

Where the parties demanded a jury trial to try all disputed issues of fact, including whether plaintiffs were entitled to attorney's fees, and if so, how much, there was nothing in T.C.A. § 66-28-504 or any other section of this chapter which could have been interpreted as allowing the trial judge to determine the amount of attorney's fees. McCormic v. Smith, 668 S.W.2d 304, 1984 Tenn. App. LEXIS 2834 (Tenn. Ct. App. 1984).

2. Counterclaim Properly Dismissed.

When a decedent's estate's trustee sued the decedent's nephew to recover funds the nephew transferred from the decedent's revocable living trust account, the nephew's counterclaim for wrongful eviction, based on the trustee terminating services to the decedent's residence, in which the nephew had been living, was properly dismissed because: (1) a trust document showed the decedent conveyed the residence to the decedent's trust, and the trustee became responsible for managing the residence upon the decedent's death; and (2) the nephew offered no proof that the nephew entered into a rental agreement with either the decedent or the trustee. Johnston v. Johnston, — S.W.3d —, 2014 Tenn. App. LEXIS 124 (Tenn. Ct. App. Mar. 6, 2014), appeal denied, — S.W.3d —, 2014 Tenn. LEXIS 506 (Tenn. June 20, 2014), cert. denied, 190 L. Ed. 2d 365, 135 S. Ct. 482, — U.S. —, 2014 U.S. LEXIS 7451 (U.S. 2014).

Collateral References.

Failure of landlord to make, or permit tenant to make, repairs or alterations required by public authority as constructive eviction. 86 A.L.R.3d 352.

Landlord's liability to third party for repairs authorized by tenant. 46 A.L.R.5th 1.

Propriety of class action in state courts to assert tenants' rights against landlord. 73 A.L.R.3d 852.

66-28-505. Noncompliance by tenant — Failure to pay rent.

    1. Except as otherwise provided in subsection (b), if there is a material noncompliance by the tenant with the rental agreement or a noncompliance with § 66-28-401 materially affecting health and safety, the landlord may deliver a written notice to the tenant specifying the acts and omissions constituting the breach and that the rental agreement shall terminate as provided in subdivisions (a)(2) or (a)(3).
    2. If the breach for which notice was given in subdivision (a)(1) is remediable by the payment of rent, the cost of repairs, damages, or any other amount due to the landlord pursuant to the rental agreement, the landlord may inform the tenant that if the breach is not remedied within fourteen (14) days after receipt of such notice, the rental agreement shall terminate, subject to the following:
      1. All repairs to be made by the tenant to remedy the tenant's breach must be requested in writing by the tenant and authorized in writing by the landlord prior to such repairs being made; provided, however, that the notice sent pursuant to this subdivision (a)(2) shall inform the tenant that prior written authorization must be given by the landlord to the tenant pursuant to this subdivision (a)(2)(A); and
      2. If substantially the same act or omission which constituted a prior noncompliance of which notice was given recurs within six (6) months, the landlord may terminate the rental agreement upon at least seven (7) days' written notice specifying the breach and the date of termination of the rental agreement.
    3. If the breach for which notice was given in subdivision (a)(1) is not remediable by the payment of rent, the cost of repairs, damages, or any other amount due to the landlord pursuant to the rental agreement, the landlord may inform the tenant that the rental agreement shall terminate upon a date not less than fourteen (14) days after receipt of the notice.
    4. Nothing in subdivision (a)(2) or (a)(3) shall be construed as requiring a landlord to provide additional notice to the tenant other than the notice required by this section.
  1. Notwithstanding subsection (a), if the tenant waives any notice required by this section, the landlord may proceed to file a detainer warrant immediately upon breach of the agreement for failure to pay rent without the landlord providing notice of such breach to the tenant; provided, however, that this subsection (b) shall not reduce the tenant's grace period as provided in § 66-28-201. The tenant's waiver pursuant to this subsection (b) shall be set out in twelve (12) point bold font or larger in the rental agreement.
  2. Notwithstanding notice of a breach or the filing of a detainer warrant pursuant to this section, the rental agreement is enforceable by the landlord for the collection of rent for the remaining term of the rental agreement.
  3. Except as otherwise provided in this chapter, the landlord may recover damages and obtain injunctive relief for any noncompliance by the tenant with the rental agreement or § 66-28-401. The landlord may recover reasonable attorney's fees for breach of contract and nonpayment of rent as provided in the rental agreement.
  4. The landlord may recover punitive damages from the tenant for willful destruction of property caused by the tenant or by any other person on the premises with the tenant's consent.
    1. It is deemed to be material noncompliance and default by the tenant with the rental agreement, if the tenant:
      1. Misrepresents that there is a disability or disability-related need for the use of a service animal or support animal; or
      2. Provides documentation under § 66-28-406(c) that falsely states an animal is a service animal or support animal.
    2. As used in this subsection (f), “service animal” and “support animal” have the same meanings as the terms are defined in § 66-28-406(a).
    3. In the event of any violation under subdivision (f)(1), the landlord may terminate the tenancy and recover damages, including, but not limited to, reasonable attorney's fees.
    4. Only to the extent it conflicts with federal or state law, this subsection (f) does not apply to public housing units owned by a governmental entity.

Acts 1975, ch. 245, § 4.201; T.C.A., § 64-2845; Acts 2011, ch. 272, § 11; 2014, ch. 593, §§ 1-3; 2018, ch. 960, § 2; 2019, ch. 236, § 4.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which rewrote this section, shall apply to rental agreements entered into on or after October 1, 2011.

Acts 2018, ch. 960, § 4 provided that the act, which amended this section, shall apply to any rental agreement entered into or renewed on or after July 1, 2018.

Acts 2019, ch. 236, § 6 provided that the act shall apply to any rental agreement entered into, amended, or renewed on or after July 1, 2019, and any request for an exception to a landlord's policy that prohibits or limits animals on the property made on or after July 1, 2019.

Amendments. The 2018 amendment added (f).

The 2019 amendment rewrote (f), which read: “(f)  It is deemed to be material noncompliance by the tenant with the rental agreement, if the tenant pretends to have a disability-related need for an assistance animal in order to obtain an exception to a provision in a rental agreement that prohibits pets or establishes limits on the types of pets that tenants may possess on residential rental property. As used in this subsection (f), ‘assistance animal’ means an animal that works, provides assistance, or performs tasks for the benefit of a person with a disability, or provides emotional support that alleviates one (1) or more identified symptoms or effects of a person's disability.”

Effective Dates. Acts 2018, ch. 960, § 4. July 1, 2018.

Acts 2019, ch. 236, § 6. July 1, 2019.

Cross-References. Assignment of interest in lease or rent, § 66-26-116.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, §§ 12, 28, 32.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

Collateral References.

Constructive eviction by another tenant's conduct. 1 A.L.R.4th 849.

Modern status of rule as to tenant's rent liability after injury to or destruction of demised premises. 99 A.L.R.3d 738.

66-28-506. Failure of tenant to maintain dwelling.

If there is noncompliance by the tenant with § 66-28-401 materially affecting health and safety that can be remedied by repair, replacement of a damaged item or cleaning, and the tenant fails to comply as promptly as conditions require in case of emergency or within fourteen (14) days after written notice by the landlord specifying the breach and requesting that the tenant remedy it within that period of time, the landlord may enter the dwelling unit and cause the work to be done in a workmanlike manner and submit an itemized bill for the actual and reasonable cost or the fair and reasonable value thereof as rent on the next date when periodic rent is due, or if the rental agreement has terminated, for immediate payment.

Acts 1975, ch. 245, § 4.202; T.C.A., § 64-2846.

Cross-References. Covenant to leave in good repair, § 66-7-102.

Law Reviews.

Avoiding Lease-Drafting Pitfalls (C. Dewees Berry IV), 19 No. 2 Tenn. B.J. 11 (1983).

Collateral References.

Measure and elements of damages for lessee's breach of covenant as to repairs. 45 A.L.R.5th 251.

66-28-507. Absence, nonuse or abandonment by tenant.

  1. If the rental agreement requires the tenant to give notice to the landlord of an anticipated extended absence in excess of seven (7) days as required in § 66-28-404 and the tenant willfully fails to do so, the landlord may recover actual damages from the tenant.
  2. During any absence of the tenant in excess of seven (7) days, the landlord may enter the dwelling unit at times reasonably necessary.
  3. If the tenant abandons the dwelling unit, the landlord shall use reasonable efforts to rerent the dwelling unit at a fair rental. If the landlord rents the dwelling unit for a term beginning prior to the expiration of the rental agreement, the rental agreement is terminated as of the date of the new tenancy. If the tenancy is from month-to-month, or week-to-week, the term of the rental agreement for this purpose shall be deemed to be a month or a week, as the case may be.

Acts 1975, ch. 245, § 4.203; T.C.A., § 64-2847.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

Collateral References.

Landlord's remedy by way of distress or lien on defaulting tenant's property on leased premises as including right to collect for all unpaid utility expenses. 99 A.L.R.3d 1100.

66-28-508. Waiver of landlord's right to terminate.

If the landlord accepts rent without reservation and with knowledge of a tenant default, the landlord by such acceptance condones the default and thereby waives such landlord's right and is estopped from terminating the rental agreement as to that breach.

Acts 1975, ch. 245, § 4.204; T.C.A., § 64-2848.

Law Reviews.

Avoiding Lease-Drafting Pitfalls (C. Dewees Berry IV), 19 No. 2 Tenn. B.J. 11 (1983).

NOTES TO DECISIONS

1. Applicability.

Court found, pursuant to its deferential review of findings of fact under T.R.A.P. 13(d), that a trial court properly ordered a tenant and his live-in aide to vacate a landlord's premises under the provisions of the federal Housing Act of 1959 because: (1) The fact that a forgery for which the aid was convicted took place roughly five years before was of no consequence as 24 C.F.R. § 5.855 authorized the landlord to obtain the aid's criminal history and did not provide any time limitation; and (2) Assuming that the landlord accepted rent after serving the notice and with full knowledge of the default, T.C.A. § 66-28-508 did not apply because federal public policy, in providing safe subsidized housing, was paramount to any policy at issue in § 66-28-508. Ross v. Broadway Towers, Inc., 228 S.W.3d 113, 2006 Tenn. App. LEXIS 788 (Tenn. Ct. App. Dec. 14, 2006), appeal denied, — S.W.3d —, 2007 Tenn. LEXIS 622 (Tenn. June 25, 2007), dismissed, — S.W.3d —, 2007 Tenn. LEXIS 781 (Tenn. Aug. 20, 2007), cert. denied, 169 L. Ed. 2d 389, 128 S. Ct. 543, 552 U.S. 1019, 2007 U.S. LEXIS 12037 (2007).

66-28-509. Landlord liens.

A contracted lien or security interest on behalf of the landlord in the tenant's household goods shall not be enforceable unless perfected by a Uniform Commercial Code filing with the secretary of state. All other liens are hereby expressly prohibited under this chapter. The landlord shall be responsible for releasing the lien at expiration or termination of the lease.

Acts 1975, ch. 245, § 4.205; T.C.A., § 64-2849.

Textbooks. Tennessee Jurisprudence, 3 Tenn. Juris., Attachment and Garnishment, § 138; 17 Tenn. Juris., Landlord and Tenant, § 13.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

66-28-510. Landlord's remedy after termination.

If the rental agreement is terminated, the landlord may have a claim for possession and for rent and a separate claim for actual damages for breach of the rental agreement and reasonable attorney's fees.

Acts 1975, ch. 245, § 4.206; T.C.A., § 64-2850.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 12.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

Collateral References.

Measure and elements of damages for lessee's breach of covenant as to repairs. 45 A.L.R.5th 251.

66-28-511. Recovery of possession by landlord limited.

A landlord may not recover or take possession of the dwelling unit by action or otherwise, including willful diminution of services to the tenant by interrupting or causing the interruption of electric, gas, water or other essential service to the tenant, except in case of abandonment, surrender, or as permitted in this chapter.

Acts 1975, ch. 245, § 4.207; T.C.A., § 64-2851.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

66-28-512. Termination of periodic tenancy — Holdover remedies.

  1. The landlord or the tenant may terminate a week-to-week tenancy by a written notice given to the other at least ten (10) days prior to the termination date specified in the notice.
  2. The landlord or the tenant may terminate a month-to-month tenancy by a written notice given to the other at least thirty (30) days prior to the periodic rental date specified in the notice.
  3. If a tenant remains in possession without the landlord's consent after expiration of the term of the rental agreement or its termination, the landlord may bring an action for possession, back rent and reasonable attorney's fees as well as any other damages provided for in the lease. If the tenant's holdover is willful and not in good faith, the landlord, in addition, may also recover actual damages sustained by the landlord, plus reasonable attorney's fees. If the landlord consents to the tenant's continued occupancy, § 66-28-201(c) shall apply.

Acts 1975, ch. 245, § 4.301; T.C.A., § 64-2852; Acts 2011, ch. 272, § 12.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which amended subsection (c), shall apply to rental agreements entered into on or after October 1, 2011.

Textbooks. Tennessee Jurisprudence, 17 Tenn. Juris., Landlord and Tenant, § 33.

Law Reviews.

Survey of Tennessee Property Law, II. Estates in Land (Beverly A. Rowlett), 48 Tenn. L. Rev. 53, 55 (1980).

NOTES TO DECISIONS

1. Jurisdiction.

Failure to give notice under the Tennessee Uniform Residential Landlord and Tenant Act is a defense to be asserted by the party who was not notified, and lack of proper notice does not deprive a general sessions court of jurisdiction to adjudicate the rights and liabilities of the parties to the forcible entry and detainer action, including the effect of a defense such as failure to give notice. Thompson v. Groves, — S.W.3d —, 2013 Tenn. App. LEXIS 641 (Tenn. Ct. App. Sept. 26, 2013).

Chancery court erred in setting aside a general sessions court judgment entered in favor of a property owner in his forcible entry and detainer (FED) action because the Tennessee Uniform Residential Landlord and Tenant Act specifically gave the general sessions and circuit courts jurisdiction over FED actions; the notice provision in the Act is intended to protect the rights of the parties under the lease and does not implicate the authority of the general sessions court to hear the matter. Thompson v. Groves, — S.W.3d —, 2013 Tenn. App. LEXIS 641 (Tenn. Ct. App. Sept. 26, 2013).

2. Bankruptcy Proceedings.

For purposes of application of a bankruptcy Chapter 13 debtor's right to cure default and maintain payments under a residential lease, the lease is not “expired” until execution of a writ of possession by service upon the tenant. In re Talley, 69 B.R. 219, 1986 Bankr. LEXIS 4788 (Bankr. M.D. Tenn. 1986).

Collateral References.

What constitutes willfulness or malice justifying landlord's collection of statutory multiple damages for tenant's wrongful retention of possession. 7 A.L.R.4th 589.

66-28-513. Remedies for abuse of access.

  1. If the tenant refuses to allow lawful access, the landlord may obtain injunctive relief to compel access, or terminate the rental agreement. In either case, the landlord may recover actual damages and reasonable attorney's fees.
  2. If the landlord makes an unlawful entry or a lawful entry in an unreasonable manner or makes repeated demands for entry otherwise lawful but which have the effect of unreasonably harassing the tenant, the tenant may obtain injunctive relief to prevent the recurrence of the conduct, or terminate the rental agreement. In either case, the tenant may recover actual damages and reasonable attorney's fees.

Acts 1975, ch. 245, § 4.302; T.C.A., § 64-2853.

66-28-514. Retaliatory conduct prohibited.

  1. Except as provided in this section, a landlord may not retaliate by increasing rent or decreasing services or by bringing or threatening to bring an action for possession because the tenant:
    1. Has complained to the landlord of a violation under § 66-28-301; or
    2. Has made use of remedies provided under this chapter.
    1. Notwithstanding subsection (a), a landlord may bring an action for possession if:
      1. The violation of the applicable building or housing code was caused primarily by lack of reasonable care by the tenant or other person in the tenant's household or upon the premises with the tenant's consent;
      2. The tenant is in default in rent; or
      3. Compliance with the applicable building or housing code requires alteration, remodeling, or demolition which would effectively deprive the tenant of use of the dwelling unit.
    2. The maintenance of the action does not release the landlord from liability under § 66-28-501(b).

Acts 1975, ch. 245, § 5.101; T.C.A., § 64-2854.

Cross-References. Landlord may not penalize tenant for filing a complaint with the building inspector, § 68-111-105.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

66-28-515. Administration of remedies — Enforcement.

  1. The remedies provided by this chapter shall be so administered that the aggrieved party may recover lawful damages. The aggrieved party has an obligation and duty to mitigate damages.
  2. Any right or obligation declared by this chapter is enforceable by legal action unless the provision declaring it specifies a different and limited effect.

Acts 1975, ch. 245, § 1.105; T.C.A., § 64-2855.

Collateral References.

Landlord's duty, on tenant's failure to occupy, or abandonment of, premises, to mitigate damages by accepting or procuring another tenant. 75 A.L.R.5th 1.

66-28-516. Obligation of good faith.

Every duty under this chapter and every act which must be performed as a condition precedent to the exercise of a right or remedy under this chapter imposes an obligation of good faith in its performance or enforcement.

Acts 1975, ch. 245, § 1.302; T.C.A., § 64-2856.

Law Reviews.

An Overview of the Tennessee Residential Landlord and Tenant Act, 7 Mem. St. U.L. Rev. 109 (1977).

66-28-517. Termination by landlord for violence or threats to health, safety, or welfare of persons or property.

  1. A landlord may terminate a rental agreement within three (3) days from the date written notice is received by the tenant if the tenant or any other person on the premises with the tenant's consent:
    1. Willfully or intentionally commits a violent act;
    2. Behaves in a manner which constitutes or threatens to be a real and present danger to the health, safety or welfare of the life or property of other tenants or persons on the premises;
    3. Creates a hazardous or unsanitary condition on the property that affects the health, safety or welfare or the life or property of other tenants or persons on the premises; or
    4. Refuses to vacate the premises after entering the premises as an unauthorized subtenant or other unauthorized occupant.
  2. The notice required by this section shall specifically detail the violation which has been committed and shall be effective only from the date of receipt of the notice by the tenant.
  3. Upon receipt of such written notice, the tenant shall be entitled to immediate access to any court of competent jurisdiction for the purpose of obtaining a temporary or permanent injunction against such termination by the landlord.
  4. Nothing in this section shall be construed to allow a landlord to recover or take possession of the dwelling unit by action or otherwise including willful diminution of services to the tenant by interrupting or causing interruption of electric, gas or other essential service to the tenant except in the case of abandonment or surrender.
  5. If the landlord's action in terminating the lease under this provision is willful and not in good faith, the tenant may in addition recover actual damages sustained by the tenant plus reasonable attorney's fees.
  6. The failure to bring an action for or to obtain an injunction may not be used as evidence in any action to recover possession of the dwelling unit.
    1. If domestic abuse, as defined in § 36-3-601, is the underlying offense for which a tenancy is terminated, only the perpetrator may be evicted. The landlord shall not evict the victims, minor children under eighteen (18) years of age, or innocent occupants, any of whom occupy the subject premises under a lease agreement, based solely on the domestic abuse. Even if evicted or removed from the lease, the perpetrator shall remain financially liable for all amounts due under all terms and conditions of the present lease agreement.
    2. If a lease agreement is in effect at the time that the domestic abuse is committed, the landlord may remove the perpetrator from the lease agreement and require the remaining adult tenants to qualify for and enter into a new agreement for the remainder of the present lease term. The landlord shall not be responsible for any and all damages suffered by the perpetrator due to the bifurcation and termination of the lease agreement in accordance with this section.
    3. If domestic abuse, as defined in § 36-3-601, is the underlying offense for which tenancy could be terminated, the victim and all adult tenants shall agree, in writing, not to allow the perpetrator to return to the subject premises or any part of the community property, and to immediately report the perpetrator's return to the proper authority, for the remainder of the tenancy. A violation of such agreement shall be cause to terminate tenancy as to any victim and all other tenants.
    4. The rights under this section shall not apply until the victim has been judicially granted an order of protection against the perpetrator for the specific incident for which tenancy is being terminated, a copy of such order has been provided to the landlord, and the order:
      1. Provides for the perpetrator to move out or vacate immediately;
      2. Prohibits the perpetrator from coming by or to a shared residence;
      3. Requires that the perpetrator stay away from the victim's residence; or
      4. Finds that the perpetrator's continuing to reside in the rented or leased premises may jeopardize the life, health, and safety of the victim or the victim's minor children.
    5. Failure to comply with this section, or dismissal of an order of protection that allows application of this section, abrogates the rights provided to the victim, minor children, and innocent occupants under this section.
    6. The rights granted in this section shall not apply in any situation where the perpetrator is a child or dependent of any tenant.
    7. Nothing in this section shall prohibit the eviction of a victim of domestic abuse for non-payment of rent, a lease violation, or any violation of this chapter.

Acts 1983, ch. 271, § 1; 2011, ch. 272, § 13; 2012, ch. 887, § 2; 2016, ch. 895, § 1; 2020, ch. 528, § 1.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which amended subsection (a), shall apply to rental agreements entered into on or after October 1, 2011.

Acts 2012, ch. 887, § 3, provided that the act, which amended subdivision (a)(3), shall apply to rental agreements entered into or renewed on or after May 9, 2012.

Amendments. The 2016 amendment added (g).

The 2020 amendment added (a)(4).

Effective Dates. Acts 2016, ch. 895, § 3. July 1, 2016.

Acts 2020, ch. 528, § 3. July 1, 2020.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

66-28-518. Towing of unauthorized vehicles.

  1. A landlord may have an unauthorized vehicle towed or otherwise removed from real property leased or rented by such landlord for residential purposes, upon giving ten (10) days written notice by posting the same upon the subject vehicle.
  2. A landlord may have a tenant's, occupant's, tenant's guest's, or trespasser's vehicle immediately towed or otherwise removed from such real property, without notice, if and when such person fails to comply with the landlord's permit parking policy as defined in the landlord's posted signage.
  3. A landlord may have a tenant's, occupant's, tenant's guest's, or trespasser's vehicle immediately towed or otherwise removed from such real property, without notice, for such person's failure to comply with the landlord's posted signage relative to traffic and parking restrictions, including, but not limited to, traffic lanes, fire lanes, fire hydrants, accessible parking areas for persons with disabilities, and/or the blocking of trash receptacles.
  4. The owner or lessee of a vehicle that has been removed pursuant to this section may make application to take possession of such vehicle and remove such vehicle from the place to which it has been removed or stored by paying the costs of removing such vehicle, plus the accrued towing and storage charges.

Acts 1999, ch. 284, § 1; 2011, ch. 47, § 72.

Compiler's Notes. Acts 2011, ch. 47, § 107 provided that nothing in the legislation shall be construed to alter or otherwise affect the eligibility for services or the rights or responsibilities of individuals covered by the provision on the day before the date of enactment of this legislation, which was July 1, 2011.

Acts 2011, ch. 47, § 108 provided that the provisions of the act are declared to be remedial in nature and all provisions of the act shall be liberally construed to effectuate its purposes.

66-28-519. Towing of vehicles.

  1. A landlord may have the following vehicles towed or otherwise removed from real property leased or rented by such landlord for residential purposes, upon giving a ten-day written notice by posting the same upon the subject vehicle:
    1. A vehicle with one (1) or more flat or missing tires;
    2. A vehicle unable to operate under its own power;
    3. A vehicle with a missing or broken windshield or more than one (1) broken or missing window;
    4. A vehicle with one (1) or more missing fenders or bumpers; or
    5. A motor vehicle that has not been in compliance with all applicable local or state laws relative to titling, licensing, operation, and registration for more than thirty (30) days.
  2. If the owner of the vehicle is not present, then prior to removing the vehicle pursuant to this section, the person, firm or entity that actually tows the vehicle shall notify local law enforcement of the vehicle identification number (VIN), registration information, license plate number and description of the vehicle. Local law enforcement shall keep a record of all such information which shall be available for public inspection.

Acts 1999, ch. 284, § 1; 2011, ch. 244, § 3; 2012, ch. 834, § 1.

66-28-520. Towing of nuisance vehicles.

Any nuisance vehicle located on or about the premises of real property that has been leased or rented for residential purposes may be towed or otherwise removed from such premises by the landlord upon giving twenty-four (24) hours written notice by posting the same upon the subject vehicle.

Acts 1999, ch. 284, § 1.

66-28-521. Termination of utility services.

If a written rental agreement requires the tenant to have utility services placed in the tenant's name and the tenant fails to do so within three (3) days of occupancy of the rented premises, the landlord may have such utility services terminated if the existing utility service is in the name of the landlord.

Acts 2003, ch. 318, § 1; 2011, ch. 272, §§ 14, 15.

Compiler's Notes. Acts 2011, ch. 272, § 16 provided that the act, which amended this section, shall apply to rental agreements entered into on or after October 1, 2011.

Chapter 29
Abandoned or Unclaimed Property

Part 1
Uniform Unclaimed Property Act

66-29-101. Short title.

This part shall be known as the “Uniform Unclaimed Property Act.”

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Cross-References. Disposal of physical evidence, § 18-1-206.

Disposal of property by sheriff, title 8, ch. 8, part 5.

Attorney General Opinions. Uses of unclaimed lottery prize money, OAG 03-066, 2003 Tenn. AG LEXIS 82 (5/22/03).

Effect of regulations issued by the comptroller of the currency, OAG 04-057, 2004 Tenn. AG LEXIS 55 (4/06/04).

66-29-102. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Apparent owner” means a person whose name appears on the records of a holder as the owner of property held, issued, or owing by the holder;
  2. “Business association” means a for-profit or nonprofit corporation, joint stock company, investment company other than an investment company registered under the Investment Company Act of 1940 (15 U.S.C. §§ 80a-1 et seq.), partnership, unincorporated association, joint venture, limited liability company, business trust, trust company, land bank, safe deposit company, safekeeping depository, financial organization, insurance company, federally chartered entity, utility, sole proprietorship, or other business entity;
  3. “Confidential information” has the same meaning as described in § 66-29-178;
  4. “Domicile” means:
    1. For a corporation, the state of its incorporation;
    2. For a business association, other than a corporation, whose formation requires a filing with a state, the state of its filing;
    3. For a federally chartered entity or an investment company registered under the Investment Company Act of 1940, the state of its home office; and
    4. For any other holder, the state of its principal place of business;
  5. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities;
  6. “Electronic mail” means any communication of information by electronic means that is automatically retained and stored and may be readily accessed or retrieved;
  7. “Financial organization” means a savings and loan association, building and loan association, savings bank, industrial bank, bank, banking organization, or credit union;
  8. “Game-related digital content” means digital content that exists only in an electronic game or electronic-game platform. “Game-related digital content”:
    1. Includes:
      1. Game-play currency such as a virtual wallet, even if denominated in United States currency; and
      2. The following if for use or redemption only within that game or platform or another electronic game or electronic-game platform:
  1. Points sometimes referred to as gems, tokens, gold, and similar names; and
  2. Digital codes; and

Does not include an item that the issuer:

Permits to be redeemed for use outside of a game or platform for:

Money; or

Goods or services that have more than minimal value; or

Otherwise monetizes for use outside of a game or platform;

“Gift card”:

Means a stored-value card:

The value of which does not expire;

That may be decreased in value only by redemption for merchandise, goods, or services; and

That, unless required by law, must not be redeemed for or converted into money or otherwise monetized by the issuer; and

Includes a prepaid commercial mobile radio service, as that term is defined in 47 CFR 20.3;

“Holder” means a person obligated to hold for the account of, or to deliver or pay to, the owner of property that is subject to this part;

“Insurance company” means an insurer, not-for-profit hospital and medical corporation regulated under title 56, chapter 29, health maintenance organization, fraternal benefit society, or any person or entity required to obtain a certificate of authority or similar license from the department of commerce and insurance under title 56 in order to issue or enter into contracts of insurance in this state. “Insurance company” also includes any person or entity that has regulatory approval in its state of domicile to issue or enter into contracts of insurance and that would be required to obtain a certificate of authority or similar license from the department of commerce and insurance under title 56 if it issued or entered into contracts of insurance in this state;

“Local government” means any metropolitan government, municipality, or county located in this state;

“Loyalty card” means a record given without direct monetary consideration under an award, reward, benefit, loyalty, incentive, rebate, or promotional program that may be used or redeemed only to obtain goods or services or a discount on goods or services. “Loyalty card” does not include a record that may be redeemed for money or otherwise monetized by the issuer;

“Military medal” means any decoration or award that may be presented or awarded to a member of the armed forces of the United States or national guard;

“Mineral” means gas, oil, coal, oil shale, other gaseous liquid or solid hydrocarbon, cement material, sand and gravel, road material, building stone, chemical raw material, gemstone, fissionable and nonfissionable ores, colloidal and other clay, steam and other geothermal resources, and any other substance defined as a mineral by any other law of this state;

“Mineral proceeds” means an amount payable for extraction, production, or sale of minerals or, on the abandonment of the amount, the amount that becomes payable after abandonment. “Mineral proceeds” includes an amount payable:

For the acquisition and retention of a mineral lease, including, but not limited to, a bonus, royalty, compensatory royalty, shut-in royalty, minimum royalty, and delay rental;

For the extraction, production, or sale of minerals, including, but not limited to, a net revenue interest, royalty, overriding royalty, extraction payment, and production payment; and

Under an agreement or option, including, but not limited to, a joint operating agreement, unit agreement, pooling agreement, and farm out agreement;

“Money order” means a payment order for a specified amount of money and includes, but is not limited to, an express money order and a personal money order on which the remitter is the purchaser;

“Municipal bond” means a bond of evidence of indebtedness issued by a municipality or other political subdivision of a state;

“Net card value” means the original purchase price or original issued value of a stored-value card, plus amounts added to its original value and minus amounts used and any service charge, fee, or dormancy charge permitted by law;

“Non-freely transferable security” means a security that cannot be delivered to the treasurer by the Depository Trust & Clearing Corporation or a similar custodian of securities providing post-trade clearing and settlement services to financial markets, or that cannot be delivered because there is no agent to effect transfer. “Non-freely transferable security” includes a worthless security;

“Owner” means a person who has a legal, beneficial, or equitable interest in property subject to this part or the person's legal representative when acting on behalf of the owner. “Owner” includes:

A depositor, for a deposit;

A beneficiary, for a trust other than a deposit in trust;

A creditor, claimant, or payee, for other property; and

The lawful bearer of a record that may be used to obtain money, a reward, or a thing of value;

“Payroll card” means a record that evidences a payroll card account, as that term is defined in 12 CFR 1005.2;

“Person” means an individual, estate, business association, public corporation, government or governmental subdivision, agency, instrumentality, or other legal entity;

“Property” means tangible property described in §§ 66-29-109, 30-2-702, and 31-6-107 or a fixed and certain interest in intangible property held, issued, or owed in the course of a holder's business or by a government, governmental subdivision, agency, or instrumentality. “Property”:

Includes all income from or increments to the property;

Includes property referred to as or evidenced by:

Money, virtual currency, interest, dividend, check, draft, deposit, or payroll card;

A credit balance, customer's overpayment, stored-value card, security deposit, refund, credit memorandum, unpaid wage, unused ticket for which the issuer has an obligation to provide a refund, mineral proceeds, or an unidentified remittance;

A security, other than:

A worthless security; or

A security that is subject to a lien, legal hold, or restriction evidenced on the records of the holder or imposed by operation of law, and that restricts the holder's or owner's ability to lawfully receive, transfer, sell, or otherwise negotiate the security;

A bond, debenture, note, or other evidence of indebtedness;

Money deposited to redeem a security, make a distribution, or pay a dividend;

An amount that has become due and payable by an insurance company in accordance with the terms of the applicable contract or as otherwise determined by this part;

An amount distributable from a trust or custodial fund established under a plan to provide health, welfare, pension, vacation, severance, retirement, death, stock purchase, profit sharing, employee savings, supplemental unemployment insurance, or similar benefits; and

Does not include:

Game-related digital content;

A loyalty card;

An in-store credit for returned merchandise;

A gift card; or

A transit fare card;

“Putative holder” means a person believed by the treasurer to be a holder, until the person pays or delivers to the treasurer property subject to this part or until a final determination is made that the person is a holder;

“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form;

“Security” means:

A security interest, as that term is defined in § 47-1-201; or

A security entitlement, as that term is defined in § 47-8-102, including, but not limited to, a customer security account held by a registered broker-dealer, to the extent that the financial assets held in the security account are not registered on the books of the issuer in the name of, payable to the order of, or specifically endorsed to, the person for whom the broker-dealer holds the assets;

“Sign” means, with present intent to authenticate or adopt a record:

To execute or adopt a tangible symbol; or

To attach to or logically associate with the record an electronic symbol, sound, or process;

“State” means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States;

“Stored-value card”:

Means a record evidencing a promise made for consideration by the seller or issuer of the record that goods, services, or money will be provided to the owner of the record equal to the value or amount shown in the record;

Includes:

A record that contains or consists of a microprocessor chip, magnetic strip, or other means for the storage of information, which is prefunded and whose value or amount is decreased on each use and increased by payment of additional consideration; and

A payroll card; and

Does not include a loyalty card, transit fare card, gift card, or game-related digital content;

“Transit fare card” means any pass or instrument purchased to utilize public transportation facilities or services;

“Treasurer” means the state treasurer;

“Treasurer's agent” means a person with whom the treasurer contracts to conduct an examination under § 66-29-157 on behalf of the treasurer and an independent contractor of the person. “Treasurer's agent” includes each individual participating in the examination on behalf of the person or contractor;

“Utility” means a person that owns or operates for public use a plant, equipment, real property, franchise, or license for the following public services:

The transmission of communications or information;

The production, storage, transmission, sale, delivery, or furnishing of electricity, water, steam, or gas; or

The provision of sewage and septic services, trash or garbage services, or recycling disposal;

“Virtual currency” means a digital representation of value used as a medium of exchange, unit of account, or a store of value that is not recognized by the United States as legal tender. “Virtual currency” does not include:

The software or protocols governing the transfer of the digital representation of value;

Game-related digital content; or

A loyalty card or gift card; and

“Worthless security” means a security whose cost of liquidation and delivery would exceed the value of the security on the date a report is due under this part.

Acts 2017, ch. 457, § 1; 2019, ch. 11, §§ 1-3.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Amendments. The 2019 amendment added (24)(C)(v) to the definition of “Property”; substituted “loyalty card, transit fare card,” for “loyalty card,” in the definition of “‘Stored-value card’” in (30)(C); and added the definition of “‘Transit fare card’”.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Acts 2019, ch. 11, § 4. March 13, 2019.

66-29-103. Inapplicability to foreign transactions.

This part does not apply to property held, due, and owing in a foreign country if the transaction involving the property was a wholly foreign transaction.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-104. Promulgation of rules.

The treasurer may promulgate rules pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to carry out this part.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-104 was transferred to § 66-29-105.

Acts 2011, ch. 285, § 6 provided that §§ 3-5 of the act, which amended former §§ 66-29-104 and former 66-29-115, shall apply to all military medals that are removed from a safe deposit box or any other safekeeping repository or agency or collateral deposit box after July 1, 2011.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-105. Presumption of abandonment of various types of property.

  1. Except as otherwise provided in § 66-29-113, property is presumed abandoned if it is unclaimed by the apparent owner at the time specified for the following property:
    1. A traveler's check, fifteen (15) years after issuance;
    2. A money order, seven (7) years after issuance;
    3. A state or municipal bond, a bearer bond, or an original-issue-discount bond, three (3) years after the earlier of the date the bond matures or the date the bond is called or the obligation to pay the principal of the bond arises;
    4. A debt of a business association, three (3) years after the obligation to pay arises;
    5. A payroll card or demand, savings, or a time deposit, including a deposit that is automatically renewable, three (3) years after the earlier of maturity or the date of the last indication of interest in the property by the apparent owner; provided, that a deposit that is automatically renewable is deemed matured on its initial date of maturity unless the apparent owner consented in a record on file with the holder to a renewal at or about the time of the renewal;
    6. Money or credits owed to a customer as a result of a retail business transaction, other than in-store credit for returned merchandise, three (3) years after the obligation arose;
    7. An amount owed by an insurance company on a life or endowment insurance policy or an annuity contract that has matured or terminated, three (3) years after the obligation to pay arose under the terms of the policy or contract or, if a policy or contract for which an amount is owed on proof of death has not matured by proof of death of the insured or annuitant, three (3) years after the earlier of the date:
      1. The insurance company has knowledge of the death of the insured or annuitant; or
      2. The insured has attained, or would have attained if living, the limiting age under the mortality table on which the reserve for the policy or contract is based;
    8. Property distributable by a business association in the course of dissolution, one (1) year after the property becomes distributable;
    9. Property held by a court, including property received as proceeds of a class action, one (1) year after the property becomes distributable;
    10. Property held by a government or governmental subdivision, agency, or instrumentality, including municipal bond interest and unredeemed principal under the administration of a paying agent or indenture trustee, one (1) year after the property becomes distributable;
    11. Wages, commissions, bonuses, or reimbursements as to which an employee is entitled, or other compensation for personal services, other than amounts held in a payroll card, one (1) year after the amount becomes payable;
    12. A deposit or refund owed to a subscriber by a utility, one (1) year after the deposit or refund becomes payable;
    13. Property payable or distributable in the course of the demutualization of an insurance company, three (3) years after the earlier of the date of last contact with the policyholder or the date the property became payable or distributable; and
    14. All other property not specified in this section or § 66-29-106, § 66-29-107, § 66-29-108, § 66-29-109, § 66-29-110, or § 66-29-111, the earlier of three (3) years after the owner first has a right to demand the property or the obligation to pay or distribute the property arises.
  2. Notwithstanding § 66-29-113, property whose owner is known to the holder to have died and left no one to take the property by will and no one to take the property by intestate succession, is presumed abandoned without regard to any activity or inactivity within specified abandonment periods.
    1. Notwithstanding any provision of this section to the contrary, any outstanding check, draft, credit balance, customer's overpayment, or unidentified remittance issued to a business entity or association as part of a commercial transaction in the ordinary course of a holder's business is not presumed abandoned if the holder and such business entity or association have an ongoing business relationship. An ongoing business relationship is deemed to exist if the holder has engaged in a commercial, business, or professional transaction involving the sale, lease, license, or purchase of goods or services with the business entity or association or a predecessor-in-interest of the business entity or association within the dormancy period immediately following the date of the check, draft, credit balance, customer's overpayment, or unidentified remittance giving rise to the unclaimed property interest. A transaction between the holder and a third-party insurer of another is a commercial transaction which constitutes an ongoing business relationship between the holder and the insurer.
    2. As used in this subsection (c):
      1. “Dormancy period” means the period during which a holder may hold a property interest before it is presumed to be abandoned; and
      2. “Predecessor-in-interest” is a person or entity whose interest in a business entity or association was acquired by its successor-in-interest, whether by purchase of the business ownership interest, purchase of business assets, statutory merger, consolidation, or a successive acquisition by whatever means accomplished.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-106. Presumption of abandonment of tax-deferred retirement account.

  1. Except as otherwise provided in § 66-29-113, and except for property held in a governmental plan, as that term is defined in 26 U.S.C. § 414, property held in a pension account or retirement account that qualifies for tax deferral under the income tax laws of the United States, is presumed abandoned if it is unclaimed by the apparent owner three (3) years after the later of:
    1. The date a second consecutive communication sent by the holder by first-class United States mail to the apparent owner is returned to the holder undelivered by the United States postal service, or, if the second communication is sent later than thirty (30) days after the date the first communication is returned undelivered, the date the first communication was returned undelivered by the United States postal service; or
    2. The earlier of:
      1. The date the apparent owner becomes seventy and one-half (70 ½) years of age, if determinable by the holder; or
      2. If the Internal Revenue Code (26 U.S.C. § 1 et seq.) requires distribution, two (2) years after the date the holder in the ordinary course of its business receives confirmation of the death of the apparent owner.
  2. If a holder in the ordinary course of its business receives notice or an indication of the death of an apparent owner and subdivision (a)(2) applies, the holder shall attempt, not later than ninety (90) days after receipt of the notice or indication, to confirm whether the apparent owner is deceased.
  3. If the apparent owner of an account described in subsection (a) does not receive communications from the holder by first-class United States mail, the holder shall attempt to confirm the apparent owner's interest in the property by sending the apparent owner an electronic mail communication not later than two (2) years after the apparent owner's last indication of interest in the property. If the holder receives notification that the electronic mail communication was not received, or if the apparent owner does not respond to the electronic mail communication within thirty (30) days after the communication was sent, the holder shall promptly attempt to contact the apparent owner by first-class United States mail. If the mail is returned to the holder undelivered by the United States postal service, the property is presumed abandoned three (3) years after the later of:
    1. The date a second consecutive communication to contact the apparent owner sent by first-class United States mail is returned to the holder undelivered by the United States postal service, or, if the second communication is sent later than thirty (30) days after the date the first communication is returned undelivered, the date the first communication was returned undelivered by the United States postal service; or
    2. The date established by subdivision (a)(2).

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-106 was transferred to § 66-29-107.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-107. Presumption of abandonment of other tax-deferred accounts.

Except as otherwise provided in § 66-29-113, and except for property described in § 66-29-106, property held in a governmental plan, as that term is defined in 26 U.S.C. § 414, and property held in a program described in Section 529A of the Internal Revenue Code (26 U.S.C. § 529A), property held in an account or plan, including a health savings account, that qualifies for tax deferral under the income tax laws of the United States is presumed abandoned if it is unclaimed by the owner three (3) years after the earlier of:

  1. The date, if determinable by the holder, specified in the income tax laws and regulations of the United States by which distribution of the property must begin to avoid a tax penalty, with no distribution having been made; or
  2. Thirty (30) years after the date the account was opened.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-107 was transferred to § 66-29-108.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-108. Presumption of abandonment of custodial account for minor.

  1. Except as otherwise provided in § 66-29-113, property held in an account established under title 35, chapter 7, is presumed abandoned if it is unclaimed by or on behalf of the minor on whose behalf the account was opened three (3) years after the later of:
    1. The date a second consecutive communication sent by the holder by first-class United States mail to the custodian of the minor on whose behalf the account was opened is returned undelivered to the holder by the United States postal service, or, if the second communication is sent later than thirty (30) days after the date the first communication is returned undelivered, the date the first communication was returned undelivered by the United States postal service; or
    2. The date on which the minor on whose behalf the account was opened reaches the statutory age of majority in accordance with title 35, chapter 7, under which the account was opened.
  2. If the custodian of the minor on whose behalf an account described in subsection (a) was opened does not receive communications from the holder by first-class United States mail, the holder shall attempt to confirm the custodian's interest in the property by sending the custodian an electronic mail communication not later than two (2) years after the custodian's last indication of interest in the property. If the holder receives notification that the electronic mail communication was not received, or if the custodian does not respond to the electronic mail communication within thirty (30) days after the communication was sent, the holder shall promptly attempt to contact the custodian by first-class United States mail. If the mail is returned undelivered to the holder by the United States postal service, the property is presumed abandoned three (3) years after the later of:
    1. The date a second consecutive communication to contact the custodian by first-class United States mail is returned to the holder undelivered by the United States postal service; or
    2. The date established by subdivision (a)(2).
  3. When the minor on whose behalf an account described in subsection (a) reaches the age required for transfer to a minor of custodial property under applicable law, the property in the account is no longer subject to this section.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-108 was transferred to § 66-29-109.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-109. Presumption of abandonment of contents of safe deposit boxes.

  1. The following property related to safe deposit boxes is presumed abandoned:
    1. Any surplus amount resulting from the sale or disposal of safe deposit contents by banking institutions under § 45-2-907, if the proceeds cannot be credited to an existing customer account upon sale, and any unsold contents. Any credit of such proceeds to a customer account is not deemed to be account activity under § 66-29-113; and
    2. For any person, other than a bank, savings and loan association, or savings bank, any funds or personal property removed from a safe deposit box, a safekeeping repository or agency, or a collateral deposit box as the result of the expiration or termination of a lease or rental period due to nonpayment of rental charges or for any other reason, and that have been unclaimed by the owner for more than two (2) years from the date on which the lease or rental period expired or terminated, including any surplus amount arising from the sale thereof, pursuant to law, that has been unclaimed by the owner for one (1) year.
  2. Notwithstanding any other provision of law to the contrary, any military medal that is removed from a safe deposit box, a safekeeping repository or agency, or a collateral deposit box as a result of the expiration or termination of a lease or rental period due to nonpayment of rental charges or for any other reason, must not be sold or otherwise disposed of, and must be retained by the holder for the lessee of the box. If the military medal remains unclaimed by the lessee for more than one (1) year from the date the box is opened, the holder shall report such property to the state treasurer by November 1 of the subsequent calendar year. The report must comply with § 66-29-123. The holder shall deliver, with the report, the military medal to the state treasurer for safekeeping in accordance with § 66-29-145.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-109 was transferred to § 66-29-110.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-110. Presumption of abandonment of stored-value card.

  1. Except as otherwise provided in § 66-29-113, a stored-value card other than a payroll card or a gift card is presumed abandoned five (5) years after the later of:
    1. December 31 of the year in which the card is issued or additional funds are deposited into it;
    2. The most recent indication of interest in the card by the apparent owner; or
    3. A verification or review of the balance by or on behalf of the apparent owner.
  2. The amount abandoned by the owner in a stored-value card is the net card value at the time it is presumed abandoned.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-110 was transferred to § 66-29-111.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-111. Presumption of abandonment of security.

  1. Except as otherwise provided in § 66-29-113, a security is presumed abandoned three (3) years after:
    1. The date a second consecutive communication sent by the holder by first-class United States mail to the apparent owner is returned to the holder undelivered by the United States postal service; or
    2. If the second communication is made later than thirty (30) days after the first communication is returned, the date the first communication is returned undelivered to the holder by the United States postal service.
  2. If the apparent owner of a security does not receive communications from the holder by first-class United States mail, the holder shall attempt to confirm the apparent owner's interest in the security by sending the apparent owner an electronic mail communication not later than two (2) years after the apparent owner's indication of interest in the security. If the holder receives notification that the electronic mail communication was not received, or if the apparent owner does not respond to the electronic mail communication within thirty (30) days after the communication was sent, the holder shall promptly attempt to contact the apparent owner by first-class United States mail. If the mail is returned to the holder undelivered by the United States postal service, the security is presumed abandoned three (3) years after the date the mail is returned.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-111 was transferred to § 66-29-112.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-112. Presumption of abandonment of related property.

At the time an interest in property is presumed abandoned under this part, any other property right accrued or accruing to the apparent owner as a result of the interest, and not previously presumed abandoned, is also presumed abandoned.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-112 (Acts 1978, ch. 561, § 12; T.C.A., § 64-2912), concerning reciprocity for property presumed abandoned or escheated under the laws of another state, was repealed by Acts 1984, ch. 544, § 9, effective December 31, 1984.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Cross-References. Unclaimed or abandoned vehicles, title 55, ch. 16.

66-29-113. Indication of apparent owner's interest in property.

  1. Property is not presumed abandoned if the apparent owner indicates an interest in the property during the applicable periods under this part.
  2. Under this part, an indication of an apparent owner's interest in property includes:
    1. A record communicated by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held;
    2. An oral communication by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held if the holder or its agent contemporaneously makes and preserves a record of the fact of the apparent owner's communication;
    3. Presentment of a check or other instrument of payment of a dividend, interest payment, or other distribution, or evidence of receipt of a distribution made by electronic or similar means, with respect to:
      1. An account;
      2. An underlying security; or
      3. An interest in a business association;
    4. Activity directed by an apparent owner in the account in which the property is held, including accessing the account or information concerning the account, or instruction by the apparent owner to increase, decrease, or otherwise change the amount or type of property held in the account;
    5. Making a deposit into or withdrawal from an account at a financial organization, including an automatic deposit or withdrawal previously authorized by the apparent owner, other than an automatic reinvestment of dividends or interest;
    6. Except as otherwise provided in subsection (e), payment of a premium on an insurance policy;
    7. Any other action by the apparent owner which reasonably demonstrates to the holder that the apparent owner is aware that the property exists; and
    8. The apparent owner has another property with the holder to which § 66-29-105(a)(5) applies, for which the name and address on file with the holder for the apparent owner is the same, and for which the apparent owner has:
      1. Communicated in writing with the holder; or
      2. Otherwise indicated an interest under this section and if the holder communicates in writing with the apparent owner with regard to the property that would otherwise be abandoned at the address to which communications regarding the other property regularly are sent.
  3. An action by an agent or other representative of an apparent owner, other than the holder acting as the apparent owner's agent, is presumed to be an action on behalf of the apparent owner.
  4. A communication with an apparent owner by a person other than the holder or the holder's representative is not an indication of interest in the property by the apparent owner unless a record of the communication evidences the apparent owner's knowledge of a right to the property.
  5. The application of an automatic premium loan provision or other nonforfeiture provision contained in an insurance policy is not an indication of interest in the policy and does not prevent the policy from maturing or terminating if the insured has died or the insured or the beneficiary of the policy otherwise has become entitled to the proceeds before depletion of the cash surrender value of the policy by application of the provision.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Cross-References. Unclaimed or abandoned vehicles, title 55, ch. 16.

66-29-114. Knowledge of death of insured or annuitant.

  1. As used in this section, “death master file” means the federal social security administration death master file or other database or service that is at least as comprehensive as the death master file for determining that a person reportedly has died.
  2. With respect to a life or endowment insurance policy or annuity contract for which an amount is owed on proof of death, but which has not matured by proof of death of the insured or annuitant, the company has knowledge of the death of an insured or annuitant when:
    1. The company receives a death certificate or a court order determining that the insured or annuitant has died;
    2. Due diligence performed to maintain contact with the insured or annuitant, or to determine whether the insured or annuitant has died, results in validation of the death of the insured or annuitant;
    3. A comparison is conducted by the company for any purpose between a death master file and the names of some or all of the company's insureds or annuitants, and a match is found providing notice that the insured or annuitant has died and the company validates the death;
    4. A comparison is conducted by the treasurer or the treasurer's agent for the purpose of finding matches during an examination conducted under § 66-29-157 between a death master file and the names of some or all of the company's insureds or annuitants, and a match is found providing notice that the insured or annuitant has died and the company validates the death; or
    5. The company:
      1. Receives notice of the death of the insured or annuitant from an administrator, beneficiary, policy owner, relative of the insured, or trustee, or from a personal representative, executor, or other legal representative of the insured's or annuitant's estate; and
      2. Validates the death of the insured or annuitant.
  3. The following provisions apply to a death master file comparison under subdivisions (b)(3) and (b)(4):
    1. A death master file match occurs if the criteria for a match are satisfied as provided by the Unclaimed Life Insurance Benefits Act, compiled in title 56, chapter 7, part 34;
    2. A death master file match does not constitute proof of death for purposes of submission of a claim by a beneficiary, annuitant, or owner of the policy or contract to an insurance company for amounts due under an insurance policy or annuity contract;
    3. A death master file match under subdivision (b)(3) or (b)(4), or validation of the insured's or annuitant's death, does not alter the requirements for a beneficiary, annuitant, or owner of the policy or contract to make a claim to receive proceeds under the terms of the policy or contract; and
    4. In the event a death master file match occurs, the insurance company that has a potential obligation as a result of the death of the insured or annuitant shall comply with the requirements of § 56-7-3404(b) upon discovering the match.
  4. This part does not affect the determination of the extent to which an insurance company before July 1, 2017 had knowledge of the death of an insured or annuitant, or was required to conduct a death master file comparison, or the determination of the extent to which the treasurer or the treasurer's agent before July 1, 2017 was authorized to conduct a comparison for the purpose of finding matches during an examination under § 66-29-157, and to determine whether amounts owed by the company on a life or endowment insurance policy or annuity contract were presumed abandoned or unclaimed. An insurance company shall comply with, and the treasurer or the treasurer's agent may conduct an examination to ensure compliance with, the requirements of § 56-7-3404.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-115. Deposit account for proceeds of insurance policy or annuity contract.

If proceeds payable under a life or endowment insurance policy or annuity contract are deposited into an account with check or draft writing privileges for the beneficiary of the policy or contract, and the proceeds are retained by the insurance company or its agent under a supplementary contract not involving annuity benefits other than death benefits, the policy or contract includes the assets in the account.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-116. Last known address of apparent owner.

Under this part:

  1. The last known address of an apparent owner is any description, code, or other indication of the location of the apparent owner that identifies the state of residence, regardless of whether the description, code, or indication of location is sufficient to direct the delivery of first-class United States mail to the apparent owner;
  2. If the United States postal zip code associated with the apparent owner is for a post office located in this state, this state is deemed to be the state of the last known address of the apparent owner unless other records associated with the apparent owner specifically indicate that the physical address of the apparent owner is located in a different state;
  3. If records indicate that the address of the apparent owner is located in a different state in accordance with subdivision (2), the different state is deemed to be the state of the last known address of the apparent owner; and
  4. The address of the apparent owner of a life or endowment insurance policy or annuity contract or its proceeds is presumed to be the address of the insured or annuitant if a person other than the insured or annuitant is entitled to the amount owed under the policy or contract and the address of the other person is not known by the insurance company and cannot be identified under § 66-29-117.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-117. Treasurer's custody of property presumed abandoned.

The treasurer may take custody of property that is presumed abandoned, whether located in this state, another state, or in a foreign country if:

  1. The last known address of the apparent owner, as shown on the records of the holder, is located in this state; or
  2. The records of the holder do not reflect the identity or last known address of the apparent owner, and the treasurer has determined that the last known address of the apparent owner is located in this state.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-118. Custody of property presumed abandoned if records show multiple addresses of apparent owner.

  1. Except as otherwise provided in subsection (b), if records of a holder reflect multiple addresses for an apparent owner and if this state is the state of the most recently recorded address, this state may take custody of property presumed abandoned, whether located in this state or another state.
  2. If it appears from records of the holder that the most recently recorded address of the apparent owner under subsection (a) is a temporary address and if this state is the state of the next most recently recorded address that is not a temporary address, this state may take custody of property presumed abandoned.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-119. Custody of property presumed abandoned if holder domiciled in state.

  1. Except as otherwise provided in subsection (b), § 66-29-117, or § 66-29-118, the treasurer may take custody of property presumed abandoned, whether located in this state, another state, or a foreign country, if the holder is domiciled in this state, or is the state or a governmental subdivision, agency, or instrumentality of this state, and:
    1. Another state or foreign country is not entitled to the property because there is no last known address of the apparent owner or other person entitled to the property in the records of the holder; or
    2. The state or foreign country in which the last known address of the apparent owner or other person entitled to the property is located does not provide for custodial taking of the property.
  2. The property is not subject to the custody of the treasurer under subsection (a) if:
    1. The property is specifically exempt from custodial taking under the law of the state or foreign country in which the last known address of the apparent owner or other person entitled to the property is located; or
    2. The property is specifically exempt from custodial taking under the law of this state.
  3. For the purposes of this section, if the holder's state of domicile has changed since the time the property was presumed abandoned, the holder's state of domicile is deemed to be the state where the holder was domiciled at the time the property was presumed abandoned.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-120. Custody of property presumed abandoned if transaction took place in this state.

Except as otherwise provided in §§ 66-29-11766-29-119, the treasurer may take custody of property presumed abandoned, whether located in this or another state, if:

  1. The transaction involving the property occurred in this state;
  2. The holder is domiciled in a state that does not provide for the custodial taking of the property; provided, that if the property is specifically exempt from custodial taking under the law of the state of the holder's domicile, the property is not subject to the custody of the treasurer; and
  3. The last known address of the apparent owner or other person entitled to the property is unknown or in a state that does not provide for the custodial taking of the property; provided, that if the property is specifically exempt from custodial taking under the law of the state in which the last known address is located, the property is not subject to the custody of the treasurer.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-121. Custody of traveler's check, money order, or similar instrument presumed abandoned.

The treasurer may take custody of sums payable on a traveler's check, money order, or similar instrument presumed abandoned to the extent permissible under 12 U.S.C. §§ 2501 — 2503.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Acts 2016, ch. 937, § 4 provided that the act, which amended this section, shall apply to tax years beginning on or after January 1, 2016.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-122. Burden of proof to establish treasurer's right to custody.

When the treasurer asserts a right to custody of unclaimed property, the treasurer has the burden to prove:

  1. The existence and amount of the property;
  2. The property is presumed abandoned; and
  3. The property is subject to the custody of the treasurer.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-123. Report required by holder.

  1. A holder of property presumed abandoned and subject to the custody of the treasurer shall report in a record to the treasurer concerning the property. The report must be filed through an electronic medium in a manner prescribed by the treasurer. The treasurer may waive the requirement to file the report through an electronic medium if the holder demonstrates in writing that strict compliance would be too costly or oppressive to the holder. In such event, the holder shall file the report in such alternate medium as the treasurer deems acceptable.
  2. A holder may contract with a third party to create the report required under subsection (a).
  3. Regardless of whether a holder contracts with a third party under subsection (b), the holder is responsible:
    1. To the treasurer for the complete, accurate, and timely reporting of property presumed abandoned; and
    2. For paying or delivering to the treasurer property described in the report filed under this section.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-124. Content of report.

  1. The report required under § 66-29-123 must:
    1. Be signed by or on behalf of the holder and verified as to its completeness and accuracy;
    2. If filed electronically, be in a secure format approved by the treasurer;
    3. Describe the property;
    4. Except for the report of a traveler's check, money order, or similar instrument, contain, if known or readily ascertainable, the name, last known address, date of birth, and social security number or taxpayer identification number of the apparent owner of property with a value of fifty dollars ($50.00) or more;
    5. In the case of an amount held or owing under a life or endowment insurance policy or annuity contract, contain the full name and last known address of the insured, annuitant, or other apparent owner of the policy or contract and of the beneficiary;
    6. In the case of property held in or removed from a safe-deposit box, indicate the contents of the property and the name and last known address of the apparent owner;
    7. Contain the commencement date for determining abandonment under this part;
    8. State that the holder has complied with the notice requirements of § 66-29-128;
    9. Identify property that is a non-freely transferable security, and explain why it is a non-freely transferable security; and
    10. Contain any other information the treasurer may require by rule.
  2. A report under § 66-29-123 may include, in the aggregate, items valued at less than fifty dollars ($50.00) per item. If the report includes items, in the aggregate, valued at less than fifty dollars ($50.00) per item, the treasurer shall not require the holder to provide the name and address of an apparent owner of an item unless the information is necessary to verify or process a claim in progress by the apparent owner.
  3. A report under § 66-29-123 may include confidential information as described in § 66-29-178 about the apparent owner or the apparent owner's property to the extent not otherwise prohibited by federal law.
  4. If a holder has changed its name while holding property presumed abandoned or is a successor to another person who previously held the property for the apparent owner, the holder shall include in the report under § 66-29-123 its former name or the name of the previous holder, if any, and the last known name and address of each previous holder of the property.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-125. Filing of report.

  1. For the property held for the period of January 1, 2017, through December 31, 2017, the report under § 66-29-123 must be filed before May 1, 2018. For property held for the period of January 1, 2018, through June 30, 2019, the report under § 66-29-123 must be filed before November 1, 2019. Thereafter, the report must be filed before November 1 of each year and must cover the twelve (12) months preceding July 1 of that year.
  2. Before the date for filing the report under § 66-29-123, the holder of property presumed abandoned may request the treasurer to extend the time for filing. The treasurer may grant an extension for good cause. If the extension is granted, the holder may pay or make a partial payment of the amount the holder estimates ultimately will be due. The payment or partial payment terminates accrual of interest on the amount paid.

Acts 2017, ch. 457, § 1; 2018, ch. 822, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Amendments. The 2018 amendment rewrote (a) which read: “The report under § 66-29-123 must be filed before May 1 of each year and report property held as of December 31 of the preceding year.”

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Acts 2018, ch. 822, § 2. April 24, 2018.

66-29-126. Retention of records by holder.

A holder required to file a report under § 66-29-123 shall retain records for ten (10) years after the later of the date the report was filed or the last date a timely report was due to be filed, unless a shorter period is prescribed by rule of the treasurer. A holder may satisfy the requirement to retain records under this section through an agent. The records must contain:

  1. The information required to be included in the report;
  2. The date, place, and nature of the circumstances that gave rise to the property right;
  3. The amount or value of the property;
  4. The last address of the apparent owner, if known to the holder; and
  5. If the holder sells, issues, or provides to others for sale or issue in this state traveler's checks, money orders, or similar instruments, other than third-party bank checks, and on which the holder is directly liable a record of the instruments while they remain outstanding indicating the state and date of issuance.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-126 (originally § 66-29-125) (Acts 1978, ch. 561, § 25; T.C.A., §§ 64-2925, 66-29-125), concerning the examination of private records by the state treasurer, was repealed by Acts 1993, ch. 195, § 19, effective July 1, 1993.

Original § 66-29-126 was transferred to § 66-29-127.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-127. Property reportable and payable or deliverable absent owner demand.

Property is reportable and payable or deliverable under this part even if the owner fails to make demand or present an instrument or document otherwise required to obtain payment.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-127 was transferred to § 66-29-128.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

NOTES TO DECISIONS

1. Escheat.

Delivery of Uniform Disposition of Unclaimed Property Act property is not escheat. Presley v. City of Memphis, 769 S.W.2d 221, 1988 Tenn. App. LEXIS 839 (Tenn. Ct. App. 1988), rehearing denied, Presley v. Memphis, — S.W.2d —, 1989 Tenn. App. LEXIS 114 (Tenn. Ct. App. Jan. 12, 1989).

66-29-128. Agreements to ascertain whereabouts of apparent owner — Notice to apparent owner by holder.

  1. Any holder of property not yet presumed abandoned under this part may enter into agreements as may be necessary to ascertain the whereabouts of the apparent owner; provided, that costs associated with such agreements must not be deducted from the property or charged to the owner.
  2. Except as otherwise provided in subsection (c), the holder of property presumed abandoned shall send notice that complies with § 66-29-129 to the apparent owner in a form approved by the treasurer, by first-class United States mail, not more than one hundred eighty (180) days, nor less than sixty (60) days, before filing the report under § 66-29-123 if:
    1. The holder has in its records an address for the apparent owner sufficient to direct the delivery of first-class United States mail to the apparent owner, which the holder's records do not disclose to be invalid; and
    2. The value of the property is fifty dollars ($50.00) or more.
  3. If an apparent owner has consented to receive electronic mail communications from the holder, the holder shall send the notice described in subsection (a) both by first-class United States mail to the apparent owner's last known mailing address and by electronic mail, unless the holder has reason to believe that the apparent owner's electronic mail address is not valid.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-128 was transferred to § 66-29-129.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-129. Contents of notice by holder.

  1. The notice under § 66-29-128 must contain a heading that reads substantially as follows: “Notice: The State of Tennessee requires us to notify you that your property may be transferred to the custody of the treasurer if you do not contact us within thirty (30) days after the date of this notice.”
  2. The notice under § 66-29-128 must:
    1. State that the property will be turned over to the treasurer;
    2. State that, after the property is turned over to the treasurer, an apparent owner that seeks return of the property must file a claim with the treasurer;
    3. Identify any owners of the property;
    4. Identify the nature and, except for property that does not have a fixed value, the value of the property that is the subject of the notice;
    5. State that property which is not legal tender of the United States may be sold by the treasurer; and
    6. Provide instructions that the apparent owner must follow to prevent the holder from reporting and paying or delivering the property to the treasurer.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-129 was transferred to § 66-29-130.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-130. Notice by treasurer.

  1. The treasurer shall give notice to an apparent owner that property presumed abandoned and that appears to be owned by the apparent owner is held by the treasurer under this part. The treasurer may prescribe by rule a minimum dollar value for items for which notice is sent.
  2. In providing notice under subsection (a), the treasurer shall:
    1. Except as otherwise provided in subdivision (b)(2), send written notice by first-class United States mail to each apparent owner of property held by the treasurer, unless the treasurer determines that a mailing by first-class United States mail would not be received by the apparent owner, and, in the case of a security held in an account for which the apparent owner consented to receiving electronic mail from the holder, send notice by electronic mail rather than first-class United States mail if the electronic mail address of the apparent owner is known to the treasurer;
    2. Send the notice to the apparent owner's electronic mail address if the treasurer does not have a valid United States mail address for an apparent owner, but has an electronic mail address that the treasurer does not know to be invalid;
    3. Publish every six (6) months in at least one newspaper of general circulation in this state notice of property held by the treasurer that must include:
      1. The total value of property received by the treasurer during the immediately preceding six (6) months, as indicated from the reports filed under § 66-29-123;
      2. The total value of claims paid by the treasurer during the immediately preceding six (6) months;
      3. The address of the unclaimed property website maintained by the treasurer;
      4. A telephone number and electronic mail address to contact the treasurer to inquire about or claim property; and
      5. A statement that a person may access the unclaimed property website of the treasurer through a computer to search for unclaimed property and that a computer may be available as a service to the public at a local public library; and
    4. Maintain a website or database, accessible by the public, that is electronically searchable and that contains the names reported to the treasurer of all apparent owners for whom property is being held by the treasurer; provided, that the treasurer may prescribe by rule a minimum dollar value for property listed on the website.
  3. The website or database maintained under subdivision (b)(4) must include instructions for filing with the treasurer a claim to property.
  4. In addition to giving notice under subsection (b), the treasurer may use printed publication, telecommunication, the internet, or other media to inform the public of the existence of unclaimed property held by the treasurer.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-130 was transferred to § 66-29-131.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-131. Cooperation among state officers and agencies to locate apparent owner.

Unless otherwise prohibited by any law of this state, on request of the treasurer, each officer, agency, board, commission, division, and department of this state, any body, politic and corporate, created by this state for a public purpose, and each political subdivision of this state shall make its books and records available to the treasurer and cooperate with the treasurer to determine the current address of an apparent owner of property held by the treasurer under this part.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-131 was transferred to § 66-29-132.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-132. Good faith payment or delivery of property by holder.

Under this part, payment or delivery of property is made in good faith if a holder:

  1. Had a reasonable basis for believing, based on the facts then known, that the property was required or permitted to be paid or delivered to the treasurer under this part; or
  2. Made payment or delivery:
    1. In response to a demand by the treasurer or treasurer's agent; or
    2. Pursuant to guidance or a ruling issued by the treasurer that the holder reasonably believed required or permitted the property to be paid or delivered.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former § 66-29-132 was transferred to § 66-29-133.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

NOTES TO DECISIONS

1. Escheat.

Delivery of Uniform Disposition of Unclaimed Property Act property is not escheat. Presley v. City of Memphis, 769 S.W.2d 221, 1988 Tenn. App. LEXIS 839 (Tenn. Ct. App. 1988), rehearing denied, Presley v. Memphis, — S.W.2d —, 1989 Tenn. App. LEXIS 114 (Tenn. Ct. App. Jan. 12, 1989).

66-29-133. Dormancy charge.

  1. A holder may deduct a dormancy charge from property required to be paid or delivered to the treasurer if:
    1. A valid and enforceable contract between a holder and an apparent owner authorizes imposition of the charge for the apparent owner's failure to claim the property within a specified time; and
    2. The holder regularly imposes the charge and does not regularly reverse or otherwise cancel the charge.
  2. The amount of the deduction under subsection (a) is limited to an amount that is not unconscionable considering all relevant factors, including the marginal transactional costs incurred by the holder in maintaining the apparent owner's property and any services received by the apparent owner.

Acts 2017, ch. 457, § 1.

Compiler's Notes. This section was formerly compiled as § 66-29-132.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-134. Payment or delivery of property to treasurer.

  1. Except as otherwise provided in this section, upon filing a report under § 66-29-123, the holder shall pay or deliver to the treasurer the property described in the report. Property paid to the treasurer must be remitted through an electronic funds transfer as prescribed by the treasurer. The treasurer may waive the requirement to submit payment by electronic means for holders who demonstrate in writing that compliance would be too costly or oppressive to the holder.
  2. Any unclaimed checks held by the state that were derived from one hundred percent (100%) federal funding must not be delivered to the treasurer under this part if such delivery would render the state ineligible for future federal funding. Upon written request and for good cause shown, the treasurer may postpone the payment or delivery upon such terms and conditions as the treasurer deems necessary and appropriate.
  3. If property in a report under § 66-29-123 is an automatically renewable deposit and a penalty or forfeiture in the payment of interest would result from paying the deposit to the treasurer at the time of the report, the date for payment of the property to the treasurer is extended until the date when payment would no longer result in a penalty or forfeiture if the holder informs the treasurer of such date.
  4. Except for military medals, tangible property must not be delivered to the treasurer at the time of filing the report. The treasurer shall review the report of such property and be given the opportunity to decline to receive any such property reported if the treasurer determines that the value of the property is less than the cost of giving notice and holding sale, or the treasurer may, because of the small sum involved, postpone taking possession until property of a sufficient value accumulates. Unless the holder of such property is notified to the contrary within one hundred twenty (120) days after filing the report required under § 66-29-123, the treasurer is deemed to have elected to receive custody of the property and the holder thereof shall, at the end of such one hundred twenty (120) days, pay or deliver such property to the treasurer.
  5. Notwithstanding any provision of this section to the contrary, contents removed from any safe deposit box, safekeeping repository or agency, or collateral deposit box described in § 66-29-109, except for military medals, must be sold or disposed of by the holder in accordance with § 45-2-907, or pursuant to instructions received from the treasurer, and the proceeds, less reasonable costs of sale and storage, must be remitted to the treasurer within sixty (60) days of sale. Military medals must be retained, and reported and delivered to the treasurer, in accordance with § 66-29-109(b).
  6. If property reported to the treasurer under § 66-29-123 is a security, the treasurer may:
    1. Make an endorsement, instruction, or entitlement order on behalf of the apparent owner to invoke the duty of the issuer, its transfer agent, or the securities intermediary to transfer the security; or
    2. Dispose of the security under § 66-29-142.
  7. If the holder of property reported to the treasurer under § 66-29-123 is the issuer of a certificated security, the treasurer may obtain a replacement certificate in physical or book-entry form in the manner in which an owner may obtain a replacement certificate under § 47-8-405. An indemnity bond is not required.
  8. The treasurer shall establish procedures for the registration, issuance, method of delivery, transfer, and maintenance of securities delivered to the treasurer by a holder.
  9. An issuer, holder, or transfer agent, or other person acting under the instructions of, and on behalf of, the issuer or holder under this section, who delivers abandoned property to the treasurer under this part is relieved of all liability to the extent of the value of the property delivered for any claim which then exists or which thereafter may arise or be made in respect to the property.
  10. A holder is not required to deliver to the treasurer a security identified by the holder as a non-freely transferable security. Upon determination by the treasurer or the holder that a security is no longer a non-freely transferable security, the security must be subsequently remitted on the next regular date prescribed for delivery of securities under this part. The holder shall make a determination annually whether a security identified in a report filed under § 66-29-123 as a non-freely transferable security is no longer a non-freely transferable security.
    1. Notwithstanding this part, United States savings bonds that are unclaimed and presumptively abandoned under this part shall escheat to the state at the time of the presumed abandonment, and all property rights to such United States savings bonds or proceeds from such bonds shall thereupon vest solely in the state.
    2. Within one hundred eighty (180) days after the bonds and obligations thereunder have been reported by a holder pursuant to § 66-29-123, if no claim has been filed in accordance with this part for such United States bonds and obligations, the treasurer shall commence a civil action in the chancery court of Davidson County to determine whether such United States savings bonds shall escheat to the state. The treasurer may postpone the bringing of such action until sufficient United States savings bonds have accumulated in the treasurer's custody to justify the expense of such proceedings.
    3. The summons and complaint must name the last known owner as the defendant, and must be served and filed as provided by law. At the time of the filing of the summons and complaint, the treasurer shall mail to the last known address of the owner a notice entitled “Notice of Proceedings to Confirm Certain United States Savings Bonds as Escheated to the State of Tennessee,” which must include the following information:
      1. The name and last known address of the owner, if previously reported;
      2. A statement identifying the action and stating that its purpose is to confirm escheat of the property to the state;
      3. The place, time, and date of the hearing; and
      4. A direction that any person claiming to be entitled to such United States savings bonds may claim the property before or at the hearing.
    4. At the time the action is commenced, the treasurer, as to all items having a value in excess of fifty dollars ($50.00), shall also cause the notice provided in subdivision (k)(3) to be published once each week for two (2) consecutive weeks in a newspaper having general circulation in the county in which the last known address of the owner is located, according to the records on file with the treasurer. If no address is available, the notice must be published in such time, place, and manner as, in the treasurer's judgment, is most likely to notify the owner of the proceedings.
    5. If no person files a claim or appears at the hearing to substantiate a claim, or if the court determines that a claimant is not entitled to the property claimed by such claimant, then the court, if satisfied by evidence that the treasurer has substantially complied with this section, shall enter a judgment confirming that the subject United States savings bonds have escheated to the state.
    6. The treasurer shall redeem such United States savings bonds escheated to the state and the proceeds from such redemption must be deposited in accordance with § 66-29-146.
    7. Any person making a claim for United States savings bonds escheated to the state under this subsection (k), or for the proceeds from such bonds, may file a claim in accordance with § 66-29-152. Upon receiving sufficient proof of the validity of such person's claim, the treasurer may pay such claim in accordance with § 66-29-153.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Acts 2011, ch. 285, § 6 provided that §§ 3-5 of the act, which amended former §§ 66-29-104 and former 66-29-115, shall apply to all military medals that are removed from a safe deposit box or any other safekeeping repository or agency or collateral deposit box after July 1, 2011.

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

NOTES TO DECISIONS

1. Escheat.

Delivery of Uniform Disposition of Unclaimed Property Act property is not escheat. Presley v. City of Memphis, 769 S.W.2d 221, 1988 Tenn. App. LEXIS 839 (Tenn. Ct. App. 1988), rehearing denied, Presley v. Memphis, — S.W.2d —, 1989 Tenn. App. LEXIS 114 (Tenn. Ct. App. Jan. 12, 1989).

66-29-135. Effect of payment or delivery of property to treasurer.

On payment or delivery of property to the treasurer under this part, the treasurer, as agent for the state, assumes custody and responsibility for the safekeeping of the property. A holder that pays or delivers property to the treasurer in good faith and who has complied with §§ 66-29-128 and 66-29-129 is relieved of liability to the extent of the value of the property so paid or delivered for any claim which then exists or which thereafter may arise with respect to the property and is indemnified against claims in accordance with this section.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-136. Recovery of property by holder from treasurer.

  1. A holder that pays money to the treasurer under this part may claim reimbursement from the treasurer of the amount paid if the holder:
    1. Paid the money in error; or
    2. After paying the money to the treasurer, paid the money to a person the holder reasonably believed to be entitled to the money.
  2. If a claim for reimbursement under subsection (a) is made for a payment made on a negotiable instrument, including a traveler's check, money order, or similar instrument, the holder shall submit proof that the instrument was presented and that payment was made to a person the holder reasonably believed to be entitled to payment. The holder may claim reimbursement even if the payment was made to a person whose claim was made after expiration of a period of limitation on the owner's right to receive or recover property, whether specified by contract, statute, or court order.
  3. If a holder is reimbursed by the treasurer under subdivision (a)(2), the holder may also submit a claim to recover from the treasurer dividends, interest, or other increments under § 66-29-137 that would have been paid to the owner, if the money had been claimed from the treasurer by the owner to the extent that such dividends, interest, or increments were paid by the holder to the owner.
  4. A holder that delivers property other than money to the treasurer under this part may claim the property in the possession of the treasurer by filing a claim under § 66-29-152 together with evidence sufficient to establish that the apparent owner has claimed the property from the holder or that the property was delivered by the holder to the treasurer in error.
  5. The treasurer may determine that an affidavit submitted by a holder is evidence sufficient to establish that the holder is entitled to reimbursement or to recover property under this section.
  6. A holder is not required to pay a fee or other charge for reimbursement or return of property under this section.
  7. Not later than ninety (90) days after receiving a claim from a holder under subsection (a) or (c), the treasurer shall determine whether to approve or deny the claim and notify the holder of the treasurer's determination.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-137. Income or gain realized or accrued on property.

If property other than money is delivered to the treasurer, the owner is entitled to receive from the treasurer income or gain realized or accrued on the property before the property is sold, including, if applicable, dividends, interest, or other increments. If the property was an interest-bearing demand, savings, or time deposit, the treasurer shall pay interest annually at the average annual rate paid on funds in the state pooled investment fund established under § 9-4-603. Interest begins to accrue when the property is delivered to the treasurer and ends on the date on which payment is made to the owner.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-138. Treasurer's options as to custody.

  1. The treasurer may decline to take custody of property reported under § 66-29-123 if the treasurer determines that:
    1. The property has a value less than the estimated expenses of notice and sale of the property; or
    2. Taking custody of the property would be unlawful.
  2. A holder may pay or deliver property to the treasurer before the property is presumed abandoned under this part if the holder:
    1. Sends the apparent owner of the property any notice required by § 66-29-128 and provides the treasurer evidence of the holder's compliance with this subdivision (b)(1);
    2. Includes with the payment or delivery a report regarding the property in accordance with § 66-29-124; and
    3. First obtains the treasurer's consent in a record to accept payment or delivery.
  3. The holder must request the treasurer's consent under subdivision (b)(3) in a record. If the treasurer fails to respond to the request not later than thirty (30) calendar days after receipt of the request, the treasurer is deemed to consent to the payment or delivery of the property and the payment or delivery is considered to have been made in good faith.
  4. Upon payment or delivery of the property under subsection (b), the property is presumed abandoned.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-139. Disposition of property having no substantial value.

If the treasurer takes custody of property delivered under this part and later determines that the property has no substantial commercial value or that the cost of disposing of the property will exceed the value of the property, the treasurer may return the property to the holder or destroy or otherwise dispose of the property. No action or proceeding may be brought or maintained against the state or any officer thereof for or on account of any action taken by the treasurer pursuant to this part with respect to such property.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-140. Periods of limitation and repose.

  1. Expiration, before, on, or after July 1, 2017, of a period of limitation on an owner's right to receive or recover property, whether specified by contract, statute, or court order, does not prevent the property from being presumed abandoned or affect the duty of a holder to file a report or pay or deliver property to the treasurer under this part.
  2. The treasurer shall not commence an action, proceeding, or examination with respect to a duty of a holder under this part more than ten (10) years after the duty arose.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-141. Public sale of property.

  1. Except as otherwise provided in § 66-29-154, not earlier than three (3) years after receipt of property that has been presumed abandoned, the treasurer may sell the property.
  2. A sale under subsection (a) must be preceded by notice to the public of:
    1. The date of the sale; and
    2. A reasonable description of the property.
  3. A sale under subsection (a) must be to the highest bidder:
    1. At a public sale at a location in this state which the treasurer determines to be the most favorable market for the property; or
    2. On the internet or another forum the treasurer determines is likely to yield the highest net proceeds of sale.
  4. The treasurer may decline the highest bid at a sale under subsection (a) and reoffer the property for sale if the treasurer determines the highest bid is insufficient.
  5. If a sale held under this section is to be conducted other than by electronic means, the treasurer must publish not less than one (1) notice of the sale at least three (3) weeks, but not more than five (5) weeks, before the sale, in a newspaper of general circulation in the county in which the property is to be sold.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-142. Disposal of securities.

  1. The treasurer shall sell or otherwise liquidate a security no sooner than thirty-two (32) months, but no later than thirty-six (36) months, after receiving the security and giving the apparent owner notice under § 66-29-130(b)(1) and (2) that the treasurer holds the security.
  2. The treasurer shall not sell a security listed on an established stock exchange for less than the prevailing price on the exchange at the time of sale. The treasurer may sell a security not listed on an established exchange by any commercially reasonable method.

Acts 2017, ch. 457, § 1; 2020, ch. 718, § 1.

Amendments. The 2020 amendment, in (a), substituted “thirty-two (32) months” for “eight (8) months” and “thirty-six (36) months” for “one (1) year”.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Acts 2020, ch. 718, § 3. June 22, 2020.

66-29-143. [Reserved.]

A purchaser of property at a sale conducted by the treasurer under this part takes the property free of all claims of the owner, a previous holder, or a person making a claim through the owner or holder. The treasurer shall execute documents necessary to complete the transfer of ownership to the purchaser.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-145. Military medal or decoration.

  1. The treasurer, upon receiving military medals, shall hold and maintain the military medals until the original owner or the owner's respective heirs or beneficiaries can be identified and the military medal returned.
  2. The treasurer shall not sell a military medal.
  3. The treasurer, with the consent of the respective organization under subdivision (c)(1), agency under subdivision (c)(2), or entity under subdivision (c)(3), may deliver a military medal held under subsection (a) to be held in custody for the owner, to:
    1. A military veteran's organization qualified under 26 U.S.C. § 501(c)(19);
    2. The agency that awarded the medal or decoration; or
    3. A governmental entity.
  4. Upon delivery under subsection (c), the treasurer is no longer responsible for safekeeping the medal or decoration.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Acts 2011, ch. 285, § 6 provided that §§ 3-5 of the act, which amended former §§ 66-29-104 and former 66-29-115, shall apply to all military medals that are removed from a safe deposit box or any other safekeeping repository or agency or collateral deposit box after July 1, 2011.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-146. Disposal of funds by treasurer.

  1. Except as otherwise provided in this section, the treasurer shall deposit in the general fund of the state all funds received under this part, including proceeds from the sale of property under this part.
  2. The treasurer shall maintain an account with an amount of funds the treasurer reasonably estimates to be sufficient to pay claims allowed under, and the costs of administering, this part for each fiscal year. If the treasurer determines that the amount of claims and administrative costs during a fiscal year exceeds the amount of funds received during such fiscal year, a sum sufficient must be appropriated from the general funds of the state to the treasurer for the payment of such claims and costs.
  3. For funds received under this part for the report year ending December 31, 2016, and for each report year thereafter, the treasurer shall determine each June 30 the amount of such funds remitted by or on behalf of each local government of the state and its agencies which have remained unclaimed for a minimum of eighteen (18) months following their delivery to the treasurer. If the aggregate unclaimed balance exceeds one hundred dollars ($100), the treasurer shall, upon request of the local government, pay an amount equal to the aggregate unclaimed balance, less a proportionate share of the cost of administering the program, as determined by the treasurer, to the local government, together with a report of the accounts represented by the funds. The funds must be placed in the local government's general fund, except the local government shall maintain, to the extent necessary, a sufficient amount of the total unclaimed property accounts to ensure prompt payment.
  4. For funds received under this part for the report year ending December 31, 2016, and for each report year thereafter, the treasurer shall determine each June 30 the amount of such funds remitted by or on behalf of each cooperative, as that term is defined in § 65-25-102, that have remained unclaimed for a minimum of eighteen (18) months following the delivery of the cooperative's funds to the treasurer. If the aggregate unclaimed balance exceeds one hundred dollars ($100), the treasurer, upon request of the cooperative, shall pay an amount equal to the aggregate unclaimed balance, less a proportionate share of the cost of administering the program, as determined by the treasurer, to the cooperative, together with a report of the accounts represented by the funds. The funds must be placed in the cooperative's general fund, except the cooperative shall maintain, to the extent necessary, a sufficient amount of the total unclaimed property accounts to ensure prompt payment.
  5. For funds received under this part for the report year ending December 31, 2020, and for each report year thereafter, the treasurer shall determine each June 30 the amount of the funds remitted by or on behalf of each telephone cooperative organized under, or otherwise subject to, the Telephone Cooperative Act, compiled in title 65, chapter 29, part 1, and organized for the purpose described in § 65-29-102, that have remained unclaimed for a minimum of eighteen (18) months following the delivery of the telephone cooperative's funds to the treasurer. If the aggregate unclaimed balance exceeds one hundred dollars ($100), then the treasurer, upon request of the telephone cooperative, shall pay an amount equal to the aggregate unclaimed balance, less a proportionate share of the cost of administering the program, as determined by the treasurer, to the telephone cooperative, together with a report of the accounts represented by the funds. The telephone cooperative shall place the funds in the telephone cooperative's general fund as long as the telephone cooperative maintains, to the extent necessary, a sufficient amount of the total unclaimed property accounts to ensure prompt payment. After the unclaimed property funds are returned to the telephone cooperative, the treasurer may continue to list the property on the department of treasury's website and may refer claimants to the telephone cooperative to claim their funds. Within thirty (30) business days after paying a claim under this section, the telephone cooperative shall report to the treasurer the name and address of the individual who received the unclaimed property from the telephone cooperative and the amount received.

Acts 2017, ch. 457, § 1; 2020, ch. 793, § 1.

Amendments. The 2020 amendment added (e).

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Acts 2020, ch. 793, § 2. July 15, 2020.

66-29-147. Retention of records by treasurer.

The treasurer shall:

  1. Record and retain the name and last known address of each person shown on a report filed under § 66-29-123 to be the apparent owner of the property delivered to the treasurer;
  2. Record and retain the name and last known address of each insured or annuitant, and beneficiary, shown on the report;
  3. With respect to each policy of insurance or annuity contract listed in the report of an insurance company, record and retain the policy or account number, the name of the company, and the amount due or paid; and
  4. With respect to each apparent owner listed in the report, record and retain the name of the holder who filed the report and the amount due or paid.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-148. Deduction of administrative costs before deposit of funds.

Before making a deposit of funds received under this part to the general fund of the state, the treasurer may deduct administrative costs, including, but not limited to:

  1. Expenses of custody and disposition of abandoned property;
  2. Costs of mailing, publication, and any other outreach efforts in connection with abandoned property;
  3. Reasonable service charges; and
  4. Expenses incurred in examining records of a putative holder of property and collecting property from a putative holder determined by the treasurer to hold property required to be delivered to the treasurer under this part.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-149. Treasurer as custodian of property for owner.

Property received by the treasurer under this part is held in custody for the benefit of the owner and is not owned by the state.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-150. Superior claim of another state.

  1. If the treasurer knows that property held by the treasurer under this part is subject to a superior claim of another state, the treasurer shall:
    1. Report, and pay or deliver, the property to the other state; or
    2. Return the property to the holder so that the holder may pay or deliver the property to the other state.
  2. The treasurer is not required to enter into a formal agreement to transfer the property to another state under subsection (a).

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-151. When property subject to recovery by another state.

  1. Property held by the treasurer under this part is subject to the right of another state to take custody of the property if:
    1. The property was paid or delivered to the treasurer because the records of the holder did not reflect a last known address of the apparent owner in another state, and:
      1. That state establishes that the last known address of the apparent owner or other person entitled to the property was in that state; or
      2. Under the law of that state, the property has become subject to a claim of abandonment by that state;
    2. The records of the holder did not accurately identify the apparent owner of the property, the last known address of the owner was in another state, and, under the law of that state, the property has become subject to a claim of abandonment in that state;
    3. The property was subject to the custody of the treasurer of this state under § 66-29-119 and, under the law of the state of domicile of the holder, the property has become subject to a claim of abandonment by the state of domicile of the holder; or
    4. The property:
      1. Is a sum payable on a traveler's check, money order, or similar instrument that was purchased in another state and delivered to the treasurer under § 66-29-120; and
      2. Under the law of that state, has become subject to a claim of abandonment in that state.
  2. A claim by another state to recover property under this section must be presented in a form prescribed by the treasurer unless the treasurer waives presentation of the form.
  3. The treasurer shall decide whether a claim under this section is valid not later than ninety (90) days after it is presented. If the treasurer determines that another state is entitled under subsection (a) to custody of the property, the treasurer shall approve the claim and pay or deliver the property to that state.
  4. The treasurer may require another state, before recovering property under this section, to agree to indemnify this state and its officers and employees against any liability on a claim to property.

Acts 2017, ch. 457, § 1; 2017, ch. 461, § 1.

Compiler's Notes. Acts 2017, ch. 461, § 1 amended subsection (b) of this section, effective from May 25, 2017 until July 1, 2017. The amended version of subsection (b) read as follows:  “(b) The commissioner of health shall direct these funds, subject to the approval of the commissioner of finance and administration, to programs designed to enhance health access. The programs may include, but not be limited to, funding for services provided by federally qualified health centers, recruitment incentives, community initiatives, service-linked training opportunities, support for high technology/telecommunications efforts, prevention initiatives, efforts to improve the built environment, strategies to improve the health of the population, and other strategies to expand primary, obstetric and dental health care services in underserved areas. Pursuant to a finding of need by the commissioner, the health access program may also address the lack of adequate access in underserved areas to other health care providers and health care services such as emergency medicine, mental health care, and  prevention treatment services for low income, pregnant substance abusers.”

Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Acts 2017, ch. 461, §  7. May 25, 2017.

66-29-152. Claim of property by person claiming to be owner.

  1. A person claiming to be the owner of property held by the treasurer may file a claim for the property in the format prescribed by the treasurer. The claimant shall verify the claim as to its completeness and accuracy.
  2. The treasurer may waive the requirement in subsection (a) to file a claim and pay or deliver property directly to an agency, local government, public institution of higher education, or local education agency, of this state if:
    1. The entity receiving the property or payment is shown to be the same entity as the apparent owner included on a report filed under § 66-29-123; and
    2. The treasurer reasonably believes the entity is entitled to receive the property or payment.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-153. Approval or denial of claim.

  1. The treasurer shall pay or deliver property to a claimant under § 66-29-152:
    1. If the treasurer receives evidence sufficient to establish to the reasonable satisfaction of the treasurer that the claimant is the owner of the property; or
    2. Upon order of a court in accordance with § 66-29-155.
  2. Not later than ninety (90) days after a claim is filed under § 66-29-152, the treasurer shall approve or deny the claim and give the claimant notice of the decision in a record. If the claim is denied:
    1. The treasurer shall inform the claimant of the reason for the denial and specify what additional evidence, if any, is required for the claim to be approved;
    2. The claimant may file an amended claim with the treasurer or commence an action under § 66-29-155; and
    3. The treasurer shall treat an amended claim as an initial claim filed under § 66-29-152.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-154. Payment or delivery of property or proceeds of sale of property — Claim for debt owed by owner to state.

  1. Not later than thirty (30) days after a claim is approved by the treasurer under § 66-29-153, the treasurer shall pay or deliver to the owner the property or the net proceeds from a sale of the property, together with dividends, interest, or other increments to which the owner is entitled under § 66-29-137. On request of the owner, the treasurer may sell or liquidate a security and pay the net proceeds to the owner, regardless of whether the security has been held by the treasurer for less than thirty-two (32) months or the treasurer has not complied with the notice requirements under § 66-29-142.
  2. Property held by the treasurer is subject to a claim for the payment of an enforceable debt that the owner owes in this state for:
    1. Child support arrearages, including child support collection costs and child support arrearages that are combined with amounts for maintenance;
    2. A civil or criminal fine or penalty, court costs, a surcharge, or restitution imposed by a final order of an administrative agency or court; or
    3. State and local taxes, penalties, and interest that have been determined to be delinquent, or for which notice has been recorded with the applicable taxing authority.
  3. The treasurer may make periodic inquiries with state and local agencies in the absence of a claim filed under § 66-29-152 to determine whether apparent owners included in the unclaimed property records of this state have enforceable debts described in subsection (b). The treasurer shall apply the property or net proceeds from a sale of property held by the treasurer to a debt under subsection (b) of an apparent owner who appears in the records of the treasurer and deliver the amount to the appropriate state or local agency. The treasurer shall notify the apparent owner of the payment.
  4. Before delivery or payment to an owner under subsection (a) of property or net proceeds from a sale of property, the treasurer shall apply the property or net proceeds to a debt under subsection (b) that the treasurer has determined is owed by the owner. The treasurer shall pay the amount to the appropriate state or local agency and notify the owner of the payment.

Acts 2017, ch. 457, § 1; 2020, ch. 718, § 2.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Amendments. The 2020 amendment substituted “thirty-two (32) months” for “eight (8) months” in the second sentence of (a).

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Acts 2020, ch. 718, § 3. June 22, 2020.

Cross-References. Confidentiality of public records, § 10-7-504.

66-29-155. Action by person whose claim is denied or not acted upon.

Not later than one (1) year after filing a claim with the treasurer under § 66-29-152, the claimant may commence an action against the treasurer in the chancery court for Davidson County to appeal a claim that has been denied or upon which the treasurer has not acted. A copy of the complaint must be served on the treasurer and the attorney general and reporter. The suit must be tried without a jury. If the chancery court rules against the treasurer, the treasurer shall make payment in accordance with § 66-29-153. Any aggrieved party may appeal the decision.

Acts 2017, ch. 457, § 1.

Compiler's Notes. Former title 66, ch. 29, part 1, §§ 66-29-101—69-29-155 (Acts 1978, ch. 561, §§ 1-11; 1978, ch. 561, § 13-24; 1978, ch. 561, §§ 26-31, 33; T.C.A., §§ 64-2901—64-2910, 66-29-103—66-29-110; T.C.A., §§ 64-2911, 66-29-111; T.C.A., §§ 64-2913—64-2924, § 66-29-124; T.C.A., §§ 64-2926—64-2932, §§ 66-29-126—66-29-132; Acts 1979, ch. 226, § 22; 1980, ch. 448, §§ 1-4; 1980, ch. 606, §§ 1-3; 1980, ch. 813, § 1; 1982, ch. 575, § 1; 1983, ch. 78, §§ 1-5; 1984, ch. 544, §§  1-8, 10-12; 1985, ch. 401, §§ 1-4; 1986, ch. 539, §§ 11-19; 1987, ch. 43, §§ 1-3; 1988, ch. 485, § 1; 1989, ch. 424, §§ 1, 2; 1991, ch. 194, §§ 1-3; Acts  1991, ch. 222, § 1; 1993, ch. 195, §§ 1-18; 1994, ch. 773, §§ 2, 3; 1995, ch. 445, §§ 1-4; 1996, ch. 642, §§ 1-3; 1996, ch. 1079, § 146; 1997, ch. 353, §§ 1-3; 1997, ch. 297, § 1; 1997, ch. 536, § 1; 1998, ch. 1010, §§ 1, 2; 2001, ch. 231, §§ 1, 4-8; 2001, ch. 157, §§ 1-7; 2001, ch. 231, §§ 2, 3; 2001, ch. 291,  § 1; 2003, ch. 78, §§ 1, 2; 2003, ch. 101, §§ 1, 2; 2003, ch. 248, §§ 1-3; 2005, ch. 141, § 2; 2006, ch. 611, § 1; 2007, ch. 291, § 1; 2008, ch. 937, § 1;  2010, ch. 756, § 1; 2010, ch. 791, §§ 1, 2; 2011, ch. 285, §§ 1-5; 2016, ch. 937, §§ 2, 3, repealed by Acts 2017, ch. 457, § 1, effective July 1, 2017)  concerned the Uniform Disposition of Unclaimed (Personal) Property Act.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-156. Verified report of property.

If a person does not file a report required by § 66-29-123, or the treasurer believes that a person may have filed an inaccurate, incomplete, or false report, the treasurer may require the person to file a verified report on a form prescribed by the treasurer. The report must:

  1. State whether the person is holding property reportable under this part;
  2. Describe property not previously reported or about which the treasurer has enquired; and
  3. Specifically identify property described under subdivision (2) for which there is a dispute as to whether it is reportable under this part and state the amount or value of the property.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-157. Examination of records to determine compliance — Administrative subpoena.

The treasurer, at reasonable times and upon providing reasonable notice, may:

  1. Examine the records of a person to determine whether the person has complied with this part, including appropriate records in the possession of an agent of the person under examination, if such records are reasonably necessary to determine whether the person under examination has complied with this part;
  2. Issue an administrative subpoena requiring a person or an agent of the person to make records available for examination; and
  3. Bring an action seeking judicial enforcement of the subpoena.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-158. Rules for conducting examination.

  1. The treasurer shall prescribe by rule procedures and standards for an examination under § 66-29-157, including procedures and standards for the use of an estimation, extrapolation, and statistical sampling during an examination.
  2. An examination under § 66-29-157 must be performed in accordance with procedures and standards adopted by rule under subsection (a) and with generally accepted examination procedures and standards applicable to unclaimed property examinations.
  3. If a person subject to examination under § 66-29-157 has filed all reports required by § 66-29-123 and has retained the records required by § 66-29-126, the following provisions apply:
    1. The examination must include a review of the person's records;
    2. The examination must not be based on an estimate unless the person expressly consents in a record to the use of an estimate; and
    3. The person conducting the examination shall consider all evidence presented by the person in good faith in preparing a report of the examination under § 66-29-162.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-159. Confidentiality of records obtained during examination.

  1. Records obtained in the course of conducting an examination under § 66-29-157, including work papers compiled by the treasurer or the treasurer's agents, employees, or designated representatives, and any information that identifies the fact that a particular person, institution, business, or entity was or is the subject of an examination under § 66-29-157, are confidential and are not public records; provided, that the records and information are not confidential:
    1. To the extent that the person, institution, business, or entity that was or is the subject of the examination consents to disclosure;
    2. To the extent that the treasurer, or the treasurer's employees, agents, or representatives use the records for the purpose of administering this part;
    3. If used for the purposes of complying with a subpoena or a court order;
    4. In joint unclaimed property examinations or audits conducted by the treasurer with, or pursuant to, an agreement with another state, federal agency, or any other governmental subdivision, agency, or instrumentality;
    5. To the extent that the comptroller of the treasury or the comptroller's designees use the records for the purpose of an audit; or
    6. In the course of any action or proceeding by the treasurer or the treasurer's employees, agents, or representatives to collect unclaimed property, to collect any unpaid interest due on unclaimed property, or to otherwise enforce this part.
  2. As used in this section, “work papers” means those records created to serve as an input for final reporting documents.
  3. All final reports submitted to the treasurer pursuant to § 66-29-123 are records open to the public, including the identity of any holder that submits a report; provided, that any information included in a final report that identifies the fact that a holder was the subject of an audit conducted under this part must be redacted prior to disclosure unless the disclosure falls within one (1) of the exceptions under subsection (a).
  4. The treasurer has the sole discretion to implement disciplinary actions against any employee, agent, or representative of the treasurer who intentionally discloses records that are deemed confidential under this section, including, but not limited to, terminating a contract with any vendor that violates this section.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-160. Evidence of unpaid debt or undischarged obligation.

  1. A record of a putative holder showing an unpaid debt or undischarged obligation is prima facie evidence of the debt or obligation.
  2. A putative holder may establish by a preponderance of the evidence that there is no unpaid debt or undischarged obligation with respect to such debt or obligation or that the debt or obligation was not, or no longer is, a fixed and certain obligation of the putative holder.
  3. A putative holder may overcome prima facie evidence under subsection (a) by establishing by a preponderance of the evidence that a check, draft, or similar instrument was:
    1. Issued as an unaccepted offer in settlement of an unliquidated amount;
    2. Issued but later replaced with another instrument because the earlier instrument was lost or contained errors that were corrected;
    3. Issued to a party affiliated with the issuer;
    4. Paid, satisfied, or discharged;
    5. Issued in error;
    6. Issued without consideration;
    7. Voided within a reasonable time after issuance for a valid business reason set forth in a contemporaneous record; or
    8. Issued but not delivered to the third-party payee for a sufficient reason recorded within a reasonable time after issuance.
  4. In asserting a defense under this section, a putative holder may present evidence of a course of dealing or custom and practice between the putative holder and the apparent owner.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-161. Failure of person examined to retain records.

If a person subject to examination under § 66-29-157 does not retain the records required by § 66-29-126, the treasurer may determine the amount of property due using a reasonable method of estimation based on all information available to the treasurer, including extrapolation and the use of statistical sampling when appropriate and necessary, consistent with examination procedures and standards adopted under § 66-29-158.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-162. Report to person whose records were examined.

At the conclusion of an examination under § 66-29-157, unless waived in writing by the person being examined, the treasurer shall provide to the person whose records were examined a complete and unredacted examination report, which must identify in detail:

  1. The work performed;
  2. The property types reviewed;
  3. The methodology of any estimation technique, extrapolation, or statistical sampling used in conducting the examination;
  4. Each calculation showing the value of property determined to be due; and
  5. The findings of the person conducting the examination.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-163. Request for intervention — Conference.

  1. If a person subject to examination under § 66-29-157 believes the person conducting the examination has made an unreasonable or unauthorized request or is not proceeding expeditiously to complete the examination, the person in a record may ask the treasurer to intervene and take remedial action as the circumstances may require, including countermanding the request of the person conducting the examination, imposing a time limit for completion of the examination, or reassigning the examination to another person.
  2. If a person in a record requests a conference with the treasurer to present matters that are the basis of a request for intervention under subsection (a), the treasurer shall hold the conference not later than thirty (30) days after receiving the request. The treasurer may hold the conference in person, by telephone, or by electronic means. The treasurer may designate an employee of the treasurer to hold the conference under this subsection (b).
  3. If a conference is held under subsection (b), the treasurer, or the treasurer's designee, shall provide a report in a record of the conference to the person that requested the conference not later than thirty (30) days after the conference.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-164. Treasurer's contract with another to conduct examination.

  1. The treasurer may contract with a person to conduct an examination under this part. The treasurer shall make any contract entered into under this section available for public inspection during normal business hours.
  2. Not less than sixty (60) days before contracting with a person to conduct an examination for the treasurer under subsection (a), the treasurer shall give the person to be examined a demand in a record to submit a report and deliver property that is subject to this part.
  3. On request by a person subject to examination by a contractor, the treasurer shall deliver to the person a complete unredacted copy of the contract between the treasurer and the contractor relating to the examination and any contract between the contractor and a person employed or engaged by the contractor to conduct the examination.
    1. It is hereby declared unlawful for the treasurer, or an individual employed by the treasurer who participates in, recommends, or approves the award of a contract under this section, to bid on, procure, or have any interest in a contract to conduct an examination under this section during the tenure of the treasurer's or employee's office or employment, and for six (6) months thereafter.
    2. A person violating subsection (a) is liable to the state for any and all sums paid out by the state, together with interest at the rate of eight percent (8%) per annum, growing out of any such transaction.
    3. A violation of subdivision (d)(1) is a Class E felony.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-165. Report by treasurer.

  1. Not later than four (4) months after the end of a fiscal year, the treasurer shall compile and submit a report to the governor, comptroller of the treasury, speaker of the senate, and speaker of the house of representatives which must contain the following information for the immediately preceding fiscal year:
    1. The total amount and value of all property paid or delivered to the treasurer under this part, separated into:
      1. The amount voluntarily paid or delivered; and
      2. The amount paid or delivered as a result of an examination under § 66-29-157, which amount must be separated into the amount recovered as a result of an examination conducted by:
        1. A state employee; and
        2. A person under contract under § 66-29-164;
    2. The name and amount paid to each contractor under § 66-29-164 and the percentage the total compensation paid to all contractors under § 66-29-164 bears to the total value of all property paid or delivered to the treasurer as a result of examinations;
    3. The total amount and value of all property paid or delivered by the treasurer to persons that made claims for property held by the treasurer and the percentage the total payments made, or value of property paid or delivered, to claimants bears to the total value of property paid or delivered to the treasurer; and
    4. The total amount of:
      1. Claims made by persons claiming to be owners which were denied;
      2. Claims made by persons claiming to be owners which were approved; and
      3. Funds received and the value of property held by the treasurer subject to claims of owners.
  2. The report submitted by the treasurer under subsection (a) is a public record subject to public disclosure without redaction under title 10, chapter 7, part 5.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-166. Determination of liability for failure or refusal to pay or deliver property to treasurer.

If the treasurer determines from an examination conducted under § 66-29-157 that a putative holder has failed or refused to pay or deliver property to the treasurer which is reportable under this part, the treasurer shall issue a determination of the putative holder's liability with respect to the payment or delivery of property, and provide to the putative holder notice in a record of the determination.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-167. Informal conference to review determination of liability.

  1. Not later than thirty (30) days after receipt of a notice of determination of liability under § 66-29-166 a putative holder may request an informal conference with the treasurer to review the determination. The treasurer may designate an employee to act on behalf of the treasurer for all purposes of this section.
  2. If a putative holder makes a timely request under subsection (a) for an informal conference:
    1. The treasurer shall set a place and time for the conference not later than twenty (20) days after the date of the request, unless the putative holder and the treasurer mutually agree upon a later date;
    2. The treasurer shall give the putative holder notice of the time and place of the conference;
    3. The conference may be held in person, by telephone, or by electronic means, as determined by the treasurer;
    4. The conference may be postponed, adjourned, and reconvened as the treasurer determines appropriate;
    5. The treasurer, or the treasurer's designee with the approval of the treasurer, may modify a determination made under § 66-29-166 in part or withdraw it in its entirety; and
    6. The treasurer shall issue a decision in a record and provide a copy of the record to the putative holder and examiner not later than twenty (20) days after the conference ends unless the putative holder and the treasurer mutually agree to continue the conference.
  3. A conference under subsection (b) is not an administrative remedy and is not a contested case subject to title 4, chapter 5. An oath is not required and rules of evidence do not apply in the conference.
  4. At a conference under subsection (b), the putative holder must be given an opportunity to confer informally with the treasurer and the person who examined the records of the putative holder to:
    1. Discuss the determination made under § 66-29-166; and
    2. Present any issue the putative holder wishes to raise concerning the validity of the determination.
  5. If the treasurer fails to act within a period prescribed in subsection (b), the failure does not affect a right of the treasurer, except that interest does not accrue on the amount for which the holder was determined to be liable under § 66-29-166 during the period in which the treasurer failed to act until the earlier of:
    1. The date the putative holder files an action under § 66-29-169; or
    2. If no action is filed under § 66-29-169, the conclusion of the ninety-day period for filing an action under § 66-29-169.
  6. The treasurer may hold an informal conference with the putative holder without a request at any time before a putative holder files suit under § 66-29-169.
  7. Penalties under § 66-29-173 and § 66-29-174 continue to accrue for property not reported, paid, or delivered as required by this part following the initiation and during the pendency of an informal conference under this section.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-168. Judicial review of determination.

A putative holder may seek relief from a determination under § 66-29-166 by seeking judicial review of the determination under § 66-29-169.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-169. Action against treasurer.

  1. Not later than ninety (90) days after receiving notice of the treasurer's determination under § 66-29-166, the putative holder may:
    1. File an action against the treasurer in the chancery court for Davidson County challenging all or part of the treasurer's determination of liability and seeking a declaration that the determination is unenforceable, in whole or in part; or
    2. Pay or deliver the property to the treasurer and, not later than six (6) months after payment or delivery, initiate an action against the treasurer in the chancery court for Davidson County for a refund of all or part of the amount paid or a return of all or part of the property delivered.
  2. If a putative holder pays or delivers the property to the treasurer at any time after the putative holder files an action under subdivision (a)(1), the court must continue the action as if it had been filed originally as an action for a refund or return of property under subdivision (a)(2).
  3. A putative holder that is the prevailing party in an action under subsection (a) for a refund of money paid to the treasurer is entitled to interest on the amount refunded, at the same rate of interest a holder is required to pay to the treasurer under § 66-29-137, from the date paid to the treasurer until the date of the refund.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-170. Action to enforce determination and secure payment or delivery.

  1. When a determination under § 66-29-166 becomes final, and after the period for filing an action under § 66-29-169, the treasurer may commence an action in the chancery court for Davidson County or in an appropriate court of another state to enforce the determination and secure payment or delivery of past due, unpaid, or undelivered property.
  2. In an action under subsection (a), if no court in this state has jurisdiction over the defendant, the treasurer may commence an action in a federal or state court of competent jurisdiction.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-171. Cooperation with another state or foreign country.

The treasurer may:

  1. Securely exchange information with another state or foreign country relating to property presumed abandoned or relating to the possible existence of property presumed abandoned; and
  2. Authorize in a record another state or foreign country, or a person acting on behalf of another state or country, to examine its records of a putative holder; provided, that the state, country, or person agrees to abide by the provisions of § 66-29-159.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-172. Action involving another state or foreign country.

  1. The treasurer, with the approval of the attorney general and reporter, may join other states or foreign countries to examine and seek enforcement of this part against any person believed to be holding property reportable under this part.
  2. On request of another state or foreign country, the attorney general and reporter may commence an action on behalf of such state or country to enforce, in this state, the law of such state or country against a putative holder of property presumed abandoned and subject to a claim by the other state or country; provided, that such state or country agrees to pay the costs incurred by the attorney general and reporter in the action.
  3. The treasurer, with approval of the attorney general and reporter, may request the official authorized to enforce the unclaimed property law of another state or foreign country to commence an action to recover property in such state or country on behalf of the treasurer. This state shall pay all costs, including reasonable attorney's fees and expenses, incurred by such state or country in an action under this subsection (c).
  4. The treasurer, with approval of the attorney general and reporter, may pursue an action on behalf of this state to recover property subject to this part that is delivered into the custody of another state if the treasurer believes the property is subject to the custody of the treasurer.
  5. The treasurer, with approval of the attorney general and reporter, may retain a private attorney in this state or another state or foreign country to commence an action to recover property on behalf of the treasurer and may agree to pay attorney's fees based in whole or in part on a fixed fee, hourly fee, or a percentage of the amount or value of property recovered in the action.
  6. Expenses incurred by this state in an action under this section may be paid from property received under this part or net proceeds from the property. Expenses incurred to recover property must not be deducted from the amount that is subject to a claim under this part by the owner.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-173. Civil penalty for failure to report, pay, or deliver property within prescribed time.

Except as otherwise provided in §§ 66-29-174 and 66-29-175, the treasurer may assess against a holder who fails to report, pay, or deliver property within the time prescribed by this part a civil penalty of two hundred dollars ($200) for each day the duty is not performed, up to a cumulative maximum amount of five thousand dollars ($5,000).

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-174. Civil penalty for evasion or failure to perform duty — Civil penalty for making fraudulent report.

  1. If a holder enters into a contract or other arrangement for the purpose of evading an obligation under this part, or otherwise willfully fails to perform a duty imposed on the holder under this part, the treasurer may assess against the holder a civil penalty of one thousand dollars ($1,000) for each day the obligation is evaded or the duty is not performed, up to a cumulative maximum amount of twenty-five thousand dollars ($25,000), plus an additional twenty-five percent (25%) of the amount or value of any property for which the holder had a duty or obligation to report, pay, or deliver under this part.
  2. If a holder makes a fraudulent report under this part, the treasurer may assess against the holder a civil penalty of one thousand dollars ($1,000) for each day from the date the fraudulent report was filed until a true and correct report is filed, up to a cumulative maximum of twenty-five thousand dollars ($25,000), plus an additional twenty-five percent (25%) of the amount or value of any property for which the holder had duty to report.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-175. Waiver of civil penalty.

The treasurer has the authority to not assess or to waive any penalty under § 66-29-173 or § 66-29-174.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-176. Enforceability of agreement to locate property.

  1. An agreement with an owner whereby the owner is to pay a fee or other remuneration for locating, delivering, recovering, or assisting in the recovery of property that has not yet been reported to the treasurer under this part is enforceable only if the agreement:
    1. Is in writing;
    2. Clearly sets forth the nature of the property and the services to be rendered;
    3. Is signed by the apparent owner;
    4. States the value of the property before and after the fee; and
    5. Contains such other information as the state treasurer may, by rule, require.
  2. An agreement by an apparent owner and a person, the primary purpose of which is to locate, deliver, recover, or assist in the location, delivery, or recovery of property held by the treasurer, is enforceable only if the agreement:
    1. Is in a record that clearly sets forth the nature of the property and the services to be provided;
    2. Is signed by or on behalf of the apparent owner;
    3. States the amount or value of the property reasonably estimated or expected to be recovered, computed both before and after a fee or other compensation to be paid to the other person has been deducted;
    4. Does not provide for compensation of more than ten percent (10%) of the value of the recoverable property or fifty dollars ($50.00), whichever is greater; and
    5. Contains such other information as the state treasurer may, by rule, require.
  3. An agreement under this section is void and unenforceable if it is entered into within two (2) years from the date on which the property was paid or delivered by the holder to the treasurer.
  4. If a provision in an agreement described in this section applies to mineral proceeds for which compensation must be paid to a person based in whole or in part on a portion of the underlying minerals or mineral proceeds not then presumed abandoned, the provision is void and unenforceable, regardless of when the agreement is executed.
  5. This section does not apply to an apparent owner's agreement with an attorney to pursue a claim for recovery of specifically identified property held by the treasurer or to contest the treasurer's denial of a claim for recovery of the property.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-177. Apparent owner's agent.

  1. An apparent owner that contracts with a person to locate, deliver, recover, or assist in the location, delivery, or recovery of property of the apparent owner that is held by the treasurer may appoint or designate the person as the apparent owner's agent. The appointment or designation must be in a record signed by the apparent owner and delivered to the treasurer.
  2. An apparent owner's agent is entitled to receive from the treasurer all information concerning the property which the apparent owner would be entitled to receive, including information that would otherwise be confidential information under § 66-29-178.
  3. If authorized by the apparent owner, the apparent owner's agent may bring an action against the treasurer on behalf of, and in the name of, the apparent owner.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-178. Disclosure and use of confidential information.

  1. Information that is confidential under any law of this state other than this part, another state, or the United States, including personally identifying information, as that term is defined in § 10-7-504(a)(29)(C), and personal information, as that term is defined in § 47-18-2107, continues to be confidential when disclosed or delivered under this part to the treasurer or the treasurer's agent; provided, that information that would otherwise be confidential, if for good cause and reasonably necessary for the enforcement or implementation of this part, may be disclosed by the treasurer or the treasurer's agent to:
    1. An apparent owner or the apparent owner's personal representative or attorney, next of kin, or agent designated under § 66-29-177;
    2. A deceased apparent owner's personal representative or attorney, next of kin, agent designated under § 66-29-177, or heir;
    3. Another department or agency of this state or the United States;
    4. The person who administers the unclaimed property law of another state, if the state accords substantially reciprocal privileges to the treasurer and the state agrees to maintain the confidentiality and security of the information in the same manner as the treasurer; and
    5. A person who is the subject of an examination in an administrative or judicial proceeding relating to the property.
  2. The treasurer and the treasurer's agent shall not use confidential information provided to them or in their possession for any purpose except as expressly authorized by this part or required by any other law of this state.
  3. Except as otherwise provided in subsection (a), the treasurer shall include on a website or in a database as required by § 66-29-130(b)(4) the name of each apparent owner of property held by the treasurer. The treasurer may include on the website or in the database additional information concerning the apparent owner's property if the treasurer believes the information will assist in facilitating identification and return of the property to the owner, and the treasurer does not disclose personally identifying information other than the home or physical address of an apparent owner.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Cross-References. Confidentiality of public records, § 10-7-504.

66-29-179. Confidentiality agreement.

A person to be examined under § 66-29-157 may require, as a condition of disclosing the person's records, that the treasurer or the treasurer's agent who has access to the records disclosed in the examination execute and deliver to the person to be examined a confidentiality agreement that:

  1. Is in a form that is reasonably satisfactory to the treasurer; and
  2. Requires the person to comply with the provisions of this part applicable to the person.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Cross-References. Confidentiality of public records, § 10-7-504.

66-29-180. Inclusion of confidential information in notice not required.

A holder is not required under this part to include confidential information in a notice the holder is required to provide to an apparent owner under this part.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-181. Maintenance of confidential information in secure manner.

  1. If a holder is required to include confidential information in a report to the treasurer, the information must be provided in a secure manner.
  2. If confidential information in a record is provided to and maintained by the treasurer and the treasurer's agent as required by this part, the treasurer and the treasurer's agent shall:
    1. Implement administrative, technical, and physical safeguards designed to protect the security, confidentiality, and integrity of the information as required by state and federal law; and
    2. Protect against reasonably anticipated threats or hazards to the security, confidentiality, or integrity of the information, and against unauthorized access to or use of the information for the purpose of preventing substantial harm or inconvenience to a holder or the holder's customers, including insureds, annuitants, policy or contract owners, and beneficiaries.
  3. The treasurer shall:
    1. Maintain confidential information held pursuant to this part in accordance with security and confidentiality policies prescribed by rule of the department of treasury; and
    2. Require that the treasurer's agent maintain confidential information held pursuant to this part in a secure manner.
  4. The treasurer or the treasurer's agent shall comply, and shall cooperate with a holder, if applicable, in complying with the requirements of § 47-18-2107 regarding the unauthorized acquisition of computerized data.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Cross-References. Confidentiality of public records, § 10-7-504.

66-29-182. Uniformity of application and construction.

In applying and construing this part, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among the states that enact it.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-183. Relation to Electronic Signatures in Global and National Commerce Act.

Except as otherwise provided in this section, this part modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001 et seq.). This part does not modify, limit, or supersede Section 101(c) of the Act (15 U.S.C. § 7001(c)), or authorize electronic delivery of any of the notices described in Section 103(b) of the Act (15 U.S.C. § 7003(b)).

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

66-29-184. Transitional provision.

  1. An initial report filed under this part for property that was not required to be reported before July 1, 2017, but that is required to be reported under this part after July 1, 2017, must include all items of property that would have been presumed abandoned during the ten-year period immediately preceding July 1, 2017, as if this chapter had been in effect during that period.
  2. This part does not relieve a holder of a duty that arose before July 1, 2017, to report, pay, or deliver property under any provision of law in effect before July 1, 2017. Except as otherwise provided in § 66-29-140, a holder who did not comply with the law governing unclaimed property before July 1, 2017, is subject to applicable provisions for enforcement and penalties in effect before July 1, 2017.
  3. Interest on interest-bearing property is not payable for any period before July 1, 2017, unless authorized by a provision of law superseded by this part.

Acts 2017, ch. 457, § 1.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Part 2
Abandoned Cultural Property Act

66-29-201. Short title.

This part shall be known and may be cited as the “Abandoned Cultural Property Act.”

Acts 1984, ch. 862, § 1.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 7-601.

66-29-202. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Abandoned cultural property” means cultural property meeting the following three (3) conditions:
    1. The property shall have been deposited with a museum, historical society, or similar not-for-profit institution for a period of at least twenty (20) years; or the property shall have been deposited with a museum, historical society, or similar not-for-profit institution for a definite term which has been expired for at least twenty (20) years;
    2. The museum, historical society, or similar not-for-profit institution has been unable to contact the original depositor by certified mail; and
    3. The original depositor or such depositor's heirs or assigns have not contacted the museum, historical society, or similar not-for-profit institution for at least twenty (20) years;
  2. “Cultural property” means any work of art, regardless of the medium; any work of decorative art; any craft work; photographs; documents; costumes; weapons; the tools and equipment of the various trades and professions; archaeological and geological specimens; zoological and botanical specimens; historical postage and currency; silverware; objects associated with historical persons or events; and in general, any object which, when exhibited, serves to further the educational goals of the exhibiting institution; and
  3. “Museum” means those museums and art galleries owned or operated by the state or any political subdivision of the state, and those museums, historical societies, and art galleries owned and operated by not-for-profit corporations.

Acts 1984, ch. 862, § 2; 1985, ch. 153, § 1; 1991, ch. 203, §§ 1, 2.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 7-601.

66-29-203. Abandonment — Notice — Vesting of title in museum.

  1. Any abandoned cultural property held by a museum to which no person has made claim shall be deemed to be abandoned.
  2. A museum holding abandoned cultural property shall publish in at least one (1) newspaper of general circulation in the county in which the institution is located at least once a week for two (2) consecutive weeks a notice and listing of the property. The notice shall contain:
    1. The name and last known address, if any, of the last known owner of the property;
    2. A description of the property; and
    3. A statement that if proof of claim is not presented by the owner to the museum and if the owner's right to receive that property is not established to the museum's satisfaction within sixty-five (65) days from the date of the second published notice, the property will be deemed abandoned and shall become the property of the museum.
  3. If no claim has been made to the abandoned cultural property within sixty-five (65) days from the date of the second published notice, title to the property shall vest in the museum, free from all claims of the owner and of all persons claiming through or under the owner.

Acts 1984, ch. 862, § 3.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 7-601.

66-29-204. Exclusivity of provisions.

This part shall control the procedure and disposition of any property to which it applies in lieu of any other procedure prescribed by law including the Uniform Unclaimed Property Act, compiled in part 1 of this chapter.

Acts 1984, ch. 862, § 4; 2017, ch. 457, § 2.

Amendments. The 2017 amendment substituted “Uniform Unclaimed Property Act” for “Uniform Disposition of Unclaimed Property Act”.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Part 3
Derelict or Abandoned Aircraft

66-29-301. Part definitions.

As used in this part:

  1. “Abandoned aircraft” means:
    1. An aircraft left in a wrecked, inoperative, or partially dismantled condition on a public-use airport; and
    2. An aircraft that has remained in an idle state on a public-use airport for forty-five (45) consecutive calendar days without a contractual agreement between the owner or operator of the aircraft and the airport authority for use of the airport premises;
  2. “Airport authority” means an authority created pursuant to title 42, chapter 3, 4, or 5;
  3. “Derelict aircraft” means any aircraft that is not in a flyable condition, does not have a current certificate of air worthiness issued by the federal aviation administration, and is not in the process of actively being repaired; and
  4. “Public-use airport” is an airport owned or controlled by an airport authority.

Acts 2016, ch. 800, § 1.

Effective Dates. Acts 2016, ch. 800, § 2. April 14, 2016.

66-29-302. Discovery of derelict or abandoned aircraft at public-use airport — Notification of owner or other interested party.

  1. If a derelict or abandoned aircraft is discovered on a public-use airport, whether or not the public-use airport is under a lease or license to a third party, the airport authority shall:
    1. Make a record of the date the aircraft was discovered on the public-use airport; and
    2. Inquire as to the name and address of any person having an equitable or legal interest in the aircraft, including the owner and any lien holders, by:
      1. Contacting the federal aviation administration, aircraft registration branch, and making a diligent search of the appropriate records; or
      2. Contacting an aircraft title search company.
  2. Within ten (10) business days of receiving the information requested pursuant to subsection (a), the airport authority shall notify the owner and all other interested parties by certified mail, return receipt requested:
    1. Of the location of the derelict or abandoned aircraft on the public-use airport;
    2. That fees and charges for the use of the airport by the aircraft have accrued and the amount of those fees and charges;
    3. That the aircraft is subject to a lien under § 66-29-304 for any unpaid and accrued fees and charges for the use of the airport and for the transportation, storage, and removal of the aircraft;
    4. That the lien is subject to enforcement pursuant to this part;
    5. That the airport may use, trade, sell, or remove the aircraft as described in § 66-29-303 if, within thirty (30) calendar days after the date of receipt of the notice, the owner or other interested party has not removed the aircraft from the airport and paid in full all accrued fees and charges for the use of the airport and for the transportation, storage, and removal of the aircraft; and
    6. That the airport authority may remove the aircraft in less than thirty (30) calendar days if the aircraft poses a danger to the health or safety of users of the public-use airport, as determined by the airport authority.
    1. If, after the inquiry required by subdivision (a)(2), the owner of the aircraft is unknown or cannot be found, the airport authority shall place a notice upon the aircraft in a conspicuous position containing the information required by subdivisions (b)(2)-(6).
    2. The notice under subdivision (c)(1) shall be not less than eight inches (8") by ten inches (10") and shall be laminated or otherwise sufficiently weatherproof to withstand normal exposure to rain, snow, and other conditions.

Acts 2016, ch. 800, § 1.

Effective Dates. Acts 2016, ch. 800, § 2. April 14, 2016.

66-29-303. Retention, trade, sale, or disposal of aircraft by airport authority.

  1. If, after thirty (30) calendar days of the owner or other interested party receiving the notice or after thirty (30) calendar days of posting the notice on the aircraft, the owner or other interested party has not removed the aircraft from the airport and paid in full all accrued fees and charges for the use of the airport and for the transportation, storage, and removal of the aircraft, or shown reasonable cause for the failure to do so, the airport authority may:
    1. Retain the aircraft for use by the airport, the state, or the unit of local government owning or operating the airport;
    2. Trade the aircraft to another unit of local government or a state agency;
    3. Sell the property; or
    4. Dispose of the property through an appropriate refuse removal company or a company that provides salvage services for aircraft.
  2. If the airport authority elects to sell the aircraft in accordance with subdivision (a)(3), the aircraft shall be sold at public auction after giving notice of the time and place of sale, at least ten (10) calendar days prior to the date of sale, in a newspaper of general circulation within the county where the airport is located and after providing written notice of the intended sale to all parties known to have an interest in the aircraft.
  3. If the airport authority elects to dispose of the aircraft in accordance with subdivision (a)(4), the airport authority shall be entitled to negotiate with the company for a price to be received from the company in payment for the aircraft, or, if circumstances so warrant, a price to be paid to the company by the airport authority for the costs of disposing of the aircraft. All information and records pertaining to the establishment of the price and the justification for the amount of the price shall be prepared and maintained by the airport authority.
  4. If the sale price or the negotiated price is less than the airport authority's then current fees and charges against the aircraft, the owner of the aircraft shall remain liable to the airport authority for the fees and charges that are not offset by the sale price or negotiated price.
  5. All costs incurred by the airport authority in the removal, storage, and sale of any aircraft shall be recoverable against the owner of the aircraft.

Acts 2016, ch. 800, § 1.

Effective Dates. Acts 2016, ch. 800, § 2. April 14, 2016.

66-29-304. Lien on derelict or abandoned aircraft.

  1. The airport authority shall have a lien on a derelict or abandoned aircraft for all unpaid fees and charges for the use of the airport by the aircraft and for all unpaid costs incurred by the airport authority for the transportation, storage, and removal of the aircraft. As a prerequisite to perfecting a lien under this section, the airport authority shall serve a notice in accordance with § 66-29-302 on the last registered owner and all persons having an equitable or legal interest in the aircraft.
    1. For the purpose of perfecting its lien under this section, the airport authority shall record a claim of lien that states:
      1. The name and address of the airport;
      2. The name of the last registered owner of the aircraft and all persons having a legal or equitable interest in the aircraft;
      3. The fees and charges incurred by the aircraft for the use of the airport and the costs for the transportation, storage, and removal of the aircraft; and
      4. A description of the aircraft sufficient for identification.
    2. The claim of lien shall be signed and sworn to or affirmed by the airport authority's director or the director's designee.
    3. The claim of lien shall be served on the last registered owner of the aircraft and all persons having an equitable or legal interest in the aircraft. The claim of lien shall be so served before recordation.
    4. The claim of lien shall be recorded with the register of the county where the airport is located. The recording of the claim of lien shall be constructive notice to all persons of the contents and effect of such claim. The lien shall attach at the time of recordation and shall take priority as of that time.

Acts 2016, ch. 800, § 1.

Effective Dates. Acts 2016, ch. 800, § 2. April 14, 2016.

66-29-305. Proceeds of sale of aircraft.

  1. If the aircraft is sold, the airport authority shall satisfy the airport authority's lien, plus the reasonable expenses of notice, advertisement, and sale, from the proceeds of the sale.
  2. The balance of the proceeds of the sale, if any, shall be held by the airport authority, and delivered on demand to the owner of the aircraft.
  3. If no person claims the balance within twelve (12) months of the date of sale, the airport authority shall retain the funds and use the funds for airport operations.

Acts 2016, ch. 800, § 1.

Effective Dates. Acts 2016, ch. 800, § 2. April 14, 2016.

66-29-306. Person acquiring legal interest in aircraft — Documents of disposition.

  1. Any person acquiring a legal interest in an aircraft under this part shall be the lawful owner of the aircraft and all other legal or equitable interests in that aircraft shall be divested; provided, that the holder of any legal or equitable interest was notified of the intended disposal of the aircraft as required in this part.
  2. The airport authority may issue documents of disposition to the purchaser or recipient of an aircraft disposed of under this part.

Acts 2016, ch. 800, § 1.

Effective Dates. Acts 2016, ch. 800, § 2. April 14, 2016.

66-29-144. Purchaser's ownership of property.

Chapter 30
Residential Ground Rent Act

66-30-101. Short title.

This chapter shall be known and may be cited as the “Tennessee Residential Ground Rent Act.”

Acts 1980, ch. 735, § 1; T.C.A., § 64-3001.

Compiler's Notes. Acts 1980, ch. 735, § 3 reads in part:

“This act shall be applicable only to agreements which comply with this act and which are executed on or after the effective date hereof. Except as specifically modified herein, the statutes and common law of Tennessee shall be and remain the same.”

66-30-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Obligee” means any person or entity to whom a residential ground rent is owed, including its successors and assigns;
  2. “Obligor” means one (1) or more individuals who are obligated to pay a residential ground rent, including their successors, sublessees or assigns;
  3. “Residential ground rent” means a rent or charge paid for the use of land, whether or not title thereto is transferred to the user, or a lease of land, for residential purposes:
    1. Which is assignable by the obligor without the obligee's consent;
    2. Which is for a term in excess of fifteen (15) years, including any rights of renewal at the option of the obligor;
    3. Where the obligor has a present or future right to terminate such ground rent and to acquire the entire interest of the obligee in the land by the payment of a determined or determinable amount; and
    4. Where the obligee's interest in the land is primarily a security interest to protect the obligee's right to be paid the rent or charge; and
  4. “Residential purposes” means any use of land wherein the owner and/or the occupant thereof resides, including, but not limited to, the following uses: apartments, multi-family, single-family, duplexes and condominiums.

Acts 1980, ch. 735, § 1; T.C.A., § 64-3002.

66-30-103. Form and contents of agreements.

In any case where a residential ground rent is created, the agreement therefor shall:

  1. Be reduced to writing;
  2. Be in recordable form;
  3. Disclose the date, the names of the parties, the ground rent and any future adjustments to it, when such rent is payable, the duration of the agreement and the value of the land at the time the agreement is made. If the parties have so agreed, the agreement shall state the amount for which the ground rent may be redeemed. Such agreement shall be included as a part of the deed or other instrument of transfer;
  4. Require that either party shall give without additional consideration, written certification to the other or to the holder, trustee or beneficiary of any deed of trust or mortgage upon the interest of the obligor in the real estate, of any current facts and conditions under such agreement between the obligor and the obligee, including, but not limited to, any defaults, claims, counterclaims, setoffs, prepaid rents or charges and whether or not such agreement is in good standing and full force and effect;
  5. Require that the obligee not mortgage or encumber the obligee's interest in the real estate during the term of the agreement, and, that at the time the obligor desires to exercise the obligor's right to redeem, the obligee shall be ready, willing and able to deliver a general warranty deed conveying the fee simple title interest to the obligee's interest in the real estate to the obligor, the obligor's heirs, administrators, successors and assigns, free and clear of any title exceptions, other than those set out in such agreement, those created by the obligor and those which do not impair the merchantability of title;
  6. Require that such holder, trustee or beneficiary shall be a third party beneficiary, but without any obligations, under such agreement;
  7. Require that such holder, trustee or beneficiary may elect in writing at any time after default under or foreclosure of its deed of trust or mortgage to assume the interest of the obligor under the agreement between the obligor and the obligee and the obligee may not declare the agreement terminated because the holder, trustee, or beneficiary has stepped into the shoes of the obligor or has assumed the obligor's position; and such holder, trustee or beneficiary shall thereafter be responsible only for any preexisting declared defaults of the obligor which can be cured by the payment of money, and not otherwise;
  8. Require that the obligee give written notice of any declared default under the agreement between the obligor and the obligee to such holder, trustee or beneficiary, and such holder, trustee or beneficiary shall have a ninety-day period of time after receipt of the notice to cure any such default of the obligor which can be cured by the payment of money, or a reasonable period of time to correct the declared default if such default cannot be cured by the payment of money alone. The obligee shall be required to give such notice only to those holders, trustees or beneficiaries who have recorded their interest in the real estate in the register's office for the county in which the real estate is located at the time of sending of the notice. Such holder, trustee or beneficiary shall have the right to cure such default, but shall not be obligated to cure such default or to do any act required of the obligor under the agreement between the obligor and the obligee which creates the residential ground rent;
  9. Such agreement between the obligor and the obligee creating the residential ground rent may provide that the obligee shall subordinate such obligee's interest in the real estate unto the rights of a holder of a deed of trust or mortgage on the interest of the obligor in the real estate, including the rights of any trustee or beneficiary thereunder, and such agreement shall set out the terms and conditions of such a subordination, if any. If no such subordination exists, the agreement creating the residential ground rent shall prominently state that no such subordination is involved in the agreement; and
  10. Any agreement executed pursuant to the terms of this chapter shall not be valid or enforceable unless the following sentences are prominently displayed on the first page and a signatory page thereof:

    “This agreement is executed pursuant to the terms and conditions of the Tennessee Residential Ground Rent Act, title 66, chapter 30 (the “act”). The terms and conditions of this agreement are governed by and made subject to the act. The act provides that the obligee's interest in the land is primarily a security interest to protect the obligee's right to be paid the rent or charge paid for the use of land. If the obligor does not exercise the obligor's right to redeem the land, the obligee may retain title to the land and the obligor may lose any interest the obligor might have in the land, including improvements, fixtures and equipment located thereon.”

Acts 1980, ch. 735, § 1; T.C.A., § 64-3003.

66-30-104. Lien against real estate.

A residential ground rent shall constitute a lien against the real estate from the time it is recorded, in a like manner as would a deed of trust or mortgage. Any deed of trust or mortgage on the interest of the obligor in the real estate may provide that a default in payment of ground rent shall constitute a material default in such deed of trust or mortgage; that the trustee or beneficiary thereunder may satisfy such obligation for rent, and that the money so advanced, with interest thereon, shall be a part of the debt secured, to be repaid as provided by law, and such trustee or beneficiary shall be subrogated to the rights of the obligee in the real estate to the extent of such advancement and interest.

Acts 1980, ch. 735, § 1; T.C.A., § 64-3004.

66-30-105. Redemption.

The obligor shall have the right to redeem a residential ground rent at any time after three (3) years from the date of the ground rent agreement. The redemption shall be effected for such amount as the obligor and the obligee may have agreed upon; or, in the absence of such an agreement, shall be determined by capitalizing the ground rent in effect at the time of redemption at ten percent (10%). Upon tender of such amount by the obligor, together with any lawfully collectible arrearages of rent and interest thereon, the obligor may redeem the land from, and shall be entitled to a release from, all obligation to pay ground rent and to a warranty deed. Such release and such deed shall be in recordable form and the cost of recording the same, together with any other charges incidental to it, other than the state transfer tax, shall be paid by the obligor. The obligor's right to redeem may be assigned absolutely or as collateral security to the holder of any deed of trust or mortgage on the interest of the obligor in the real estate, and such deed of trust or mortgage may require that the obligor exercise the obligor's right to redeem upon the written demand of the trustee or beneficiary thereunder, and that a failure to exercise such right of redemption, under such circumstances, shall constitute a material default under such deed of trust or mortgage.

Acts 1980, ch. 735, § 1; T.C.A., § 64-3005.

66-30-106. Incorporation of agreement in instrument of transfer.

A ground rent agreement, made pursuant to this chapter, may be incorporated into the deed, ground lease, or other instrument of transfer in the following form:

This deed is subject to annual ground rent or charge as follows:

1.  Date of agreement;

2.  Parties:

Obligor —

Obligee —;

3.  Ground rent and any future adjustments to it;

4.  When payable;

5.  Duration;

6.  Redemption price, if agreed on.

Acts 1980, ch. 735, § 1; T.C.A., § 64-3006.

Chapter 31
Self-service Storage Facility Act

66-31-101. Short title.

This chapter shall be known and may be cited as the “Tennessee Self-Service Storage Facility Act.”

Acts 1980, ch. 717, § 1; T.C.A., § 64-3101.

Law Reviews.

Property Rights, Property Wrongs, and Chattel Disposession under Self-Storage Leases (Jeffrey Douglas Jones), 78 Tenn. L. Rev. 1015 (2011).

66-31-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Default” means the failure timely to perform any obligation or duty set forth in this chapter and the rental agreement;
  2. “Division” means the wildlife resources agency in the case of motorized watercraft and the department of revenue, taxpayer and vehicle services division in the case of all other vehicles;
  3. “Last known address” means for notification purposes the street address, post office box, or electronic mail address provided by the occupant in the latest rental agreement or in a subsequent written notice of a change of address provided by the occupant;
  4. “Leased space” means the storage space or spaces at the self-service storage facility that are leased or rented to an occupant pursuant to a rental agreement;
  5. “Occupant” means a person, or a sublessee, successor, or assign of such person, entitled to the use of leased space at a self-service storage facility under a rental agreement, to the exclusion of others;
  6. “Owner” means the owner, operator, lessor, or sublessor of a self-service storage facility, the agent of such person, or any person authorized by such person to manage the facility or to receive rent from an occupant under a rental agreement. “Owner” shall not be construed to be a warehouse as defined in § 47-7-102; provided, that if an owner shall issue any warehouse receipt, bill of lading or other document of title for the personal property stored, the owner and occupant shall be subject to title 47, chapter 7, and this chapter shall not apply;
  7. “Personal property” means movable property not affixed to land and includes, but is not limited to, goods, wares, merchandise, household items, and vehicles;
  8. “Rental agreement” means any agreement or lease, written or oral, that establishes or modifies the terms, conditions, rules, or any other provisions concerning the use and occupancy of leased space at a self-service storage facility;
  9. “Self-service storage facility” means any real property designed and used for the purpose of renting or leasing storage space to occupants who are to have access to such space for the purpose of storing and removing personal property; provided, however, that “self-service storage facility” does not include any part of the real property used for residential purposes;
  10. “Vehicle” means a motor vehicle, a trailer, or a semitrailer as defined in §§ 55-1-103 and 55-1-105 and a vessel as defined in § 69-9-204; and
  11. “Verified mail” means any method of mailing that is offered by the United States postal service and that provides evidence of mailing.

Acts 1980, ch. 717, § 2; T.C.A., § 64-3102; Acts 2011, ch. 131, §§ 1-6.

Compiler's Notes. Acts 2011, ch. 131, § 19 provided that the act, which added definitions for “division”, “vehicle” and “verified mail” and amended definitions for “last known address”, “leased space”, “personal property”, “rental agreement” and “self-service storage facility”, shall apply to each rental agreement made or renewed after July 1, 2011.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 7-501.

Law Reviews.

Property Rights, Property Wrongs, and Chattel Disposession under Self-Storage Leases (Jeffrey Douglas Jones), 78 Tenn. L. Rev. 1015 (2011).

66-31-103. Owner access to leased space.

Upon the reasonable request of the owner, the occupant shall provide access to the owner to enter the leased space for the purpose of inspection, repair, alteration, improvement, or to supply necessary or agreed services. In case of emergency, the owner may enter the leased space for any of these purposes without notice to or consent from the occupant. For the purposes of this section, “emergency” means any sudden, unexpected occurrence or circumstance which demands immediate action.

Acts 1980, ch. 717, § 3; T.C.A., § 64-3103.

Law Reviews.

Property Rights, Property Wrongs, and Chattel Disposession under Self-Storage Leases (Jeffrey Douglas Jones), 78 Tenn. L. Rev. 1015 (2011).

66-31-104. Owner's lien on stored property.

  1. The owner of a self-service storage facility and the owner's heirs, executors, administrators, successors, and assigns have a lien upon all personal property located at a self-service storage facility for rent, labor, or other charges, present or future, in relation to the personal property and for expenses necessary for its preservation or expenses reasonably incurred in its sale or other disposition pursuant to this chapter. The lien provided for in this section is superior to any other lien or security interest, except those which are perfected and recorded in the state in the name of the occupant during the term of the rental agreement and except any tax lien as otherwise provided by law. The lien attaches when personal property is placed in the leased space.
  2. The rental agreement shall contain a statement in bold type notifying the occupant of the existence of the lien and the method of its enforcement. The rental agreement shall also include the late fee, if any, and when it may be imposed. If the rental agreement contains a limit on the value of property stored in the occupant's storage space, the limit shall be deemed to be the maximum value of the property stored in that space.
  3. The owner may also impose a reasonable late fee on the occupant for each month the occupant does not pay rent when due. For purposes of this section, a reasonable late fee is not more than the greater of twenty dollars ($20.00) a month or twenty percent (20%) of monthly rent. Any late fee imposed by the owner pursuant to this section is in addition to any other remedy provided by law or contract.
  4. The owner shall provide adequate notice to the occupant before a late fee is imposed. Adequate notice is provided if the rental agreement complies with subsection (b) or if a notice is sent to the occupant at the last known address and notifies the occupant that a late fee may be charged for any month in which the occupant does not pay rent when due.

Acts 1980, ch. 717, § 4; T.C.A., § 64-3104; Acts 2011, ch. 131, §§ 7, 8.

Compiler's Notes. Acts 2011, ch. 131, § 19 provided that the act, which amended present subsection (a) and added subsections (b)-(d), shall apply to each rental agreement made or renewed after July 1, 2011.

Law Reviews.

Property Rights, Property Wrongs, and Chattel Disposession under Self-Storage Leases (Jeffrey Douglas Jones), 78 Tenn. L. Rev. 1015 (2011).

66-31-105. Enforcement of lien.

The enforcement of the owner's lien against an occupant who is in default may be done in accordance with either or both of the following procedures:

  1. In the case of short term default, denial of access:
    1. Upon the failure of an occupant to pay the rent for the storage space or unit when it becomes due, the owner may, without notice, deny the occupant access to the personal property located in the self-service storage facility or self-contained storage unit, and the owner without notice, not less than five (5) days after the date the rent is due, may enter and remove the personal property from the leased space to other suitable storage space pending its sale or other disposition; and
    2. The owner shall notify the occupant of the owner's intent to enforce the owner's lien by written notice delivered by hand delivery, by verified mail, or by electronic mail to the occupant's last known address; or
  2. In the case of long term default, which is a continuous fifteen (15) days, the owner may enforce the owner's lien in accordance with the following procedures:
    1. The occupant shall be notified in writing;
    2. The notice shall be delivered by hand delivery, by verified mail, or by electronic mail to the occupant's last known address;
    3. The notice shall include:
      1. An itemized statement of the owner's claim showing the sum due at the time of the notice and the date when the sum became due;
      2. A demand for payment of the sum due within a specified time not less than thirty (30) days after the date of the notice and a statement of the approximate additional expenses which may be incurred between the date of the notice and the date of the sale;
      3. A statement that the contents of the occupant's leased space are subject to the owner's lien;
      4. If the owner elects to deny the occupant access to the leased space or elects to enter and/or remove the occupant's personal property from the leased space to other suitable storage space, a statement so advising the occupant shall be included in the notice;
      5. The name, street address and telephone number of the owner or designated agent whom the occupant may contact to respond to the notice; and
      6. A conspicuous statement that unless the claim is paid within the time stated, the personal property will be advertised for sale or will be otherwise disposed of at a specified time and place, not sooner than sixty (60) days after default;
    4. Any sale or other disposition of the personal property shall conform to the terms of the notification as provided for in this section. If the personal property is advertised for sale and the sale is not consummated, the owner shall give written notice to the occupant of other disposition of the personal property;
    5. Any sale or other disposition of the personal property must be held at the self-service storage facility, online, or at the nearest suitable place to where the personal property is held or stored;
    6. After expiration of the time stated in the notice and if the personal property has not otherwise been disposed, the owner shall advertise the sale of the personal property in a commercially reasonable manner. The manner of advertisement is deemed commercially reasonable if not less than three (3) potential bidders participate in the sale at the time and place advertised. The advertisement of sale may include, but not be limited to, the publishing one (1) time before the date of the sale of the personal property in a newspaper of general circulation that serves the area where the self-storage facility is located. An advertisement must include:
      1. A statement that the contents of the occupant's leased space shall be sold to satisfy the owner's lien;
      2. The address of the self-service storage facility and the number or other description, if any, of the space where the personal property is located and the name of the occupant; and
      3. The time, place, and manner of the sale;
    7. Before any sale or other disposition of personal property pursuant to this section, the occupant may pay the amount necessary to satisfy the owner's lien and the reasonable expenses incurred under this section and thereby redeem the personal property. Upon the payment and satisfaction of the amount necessary to satisfy the lien, the owner shall return the personal property and thereafter the owner shall have no liability to any person with respect to such personal property;
    8. The owner may buy at any sale of personal property to enforce the owner's lien;
    9. A purchaser in good faith of the personal property sold to satisfy the owner's lien takes the property free of any rights of persons against whom the lien was valid, despite noncompliance by the owner with the requirements of this section;
    10. In the event of a sale under this section, the owner may satisfy the owner's lien and the expenses of such sale from the proceeds of the sale but shall hold the balance, if any, for delivery on demand to the occupant. If the occupant does not claim the balance of the proceeds within one (1) year of the date of the sale, such balance shall be deemed to be abandoned, and the owner shall pay such balance to the state treasurer who shall receive, hold and dispose of same in accordance with the Uniform Unclaimed Property Act, compiled in chapter 29, part 1 of this title;
    11. If the property upon which the lien is claimed is a vehicle and rent and other charges related to the property remain unpaid or unsatisfied for sixty (60) days after the maturity of the obligation to pay rent, the facility owner may utilize either of the following options:
      1. The facility owner may have the property towed. If a vehicle is towed as authorized in this subdivision (2)(K)(i), the owner shall not be liable for the vehicle or any damages to the vehicle once the tower takes possession of the property; or
      2. The facility owner shall contact the appropriate division in such manner as the division prescribes for the purposes of determining the existence and identity of any lien holder and the name and address of the owner of the vehicle as shown in the division's records. If the vehicle is a motor vehicle, then the facility owner may also contact the county clerk for the purposes of determining the existence and identity of any lien holder and the name and address of the owner of the motor vehicle as shown in the county clerk's records. Within ten (10) days of receipt of the information concerning any lien holder and the owner of the motor vehicle, as shown in the division's or county clerk's records, the facility owner shall send a written notice to any lien holder and to the motor vehicle owner, if the motor vehicle owner is not the occupant, by verified mail, stating that:
  1. Such vehicle is being held by the facility owner;
  2. A lien has attached pursuant to this chapter; and
  3. Payment shall be made within thirty (30) days after notification to satisfy the lien. The vehicle owner or lien holder may pay the balance owed and take possession of the vehicle. If the owner or lien holder does not satisfy the lien, the facility owner may sell the vehicle in any manner, including but not limited to, public auction;

The owner's liability arising from the sale is limited to the net proceeds received from the sale of the personal property;

The owner is not liable for identity theft or other harm resulting from the misuse of information contained in a document or electronic storage media:

That are part of the occupant's property sold or otherwise disposed; and

Of which the owner did not have actual knowledge; and

An owner shall not be entitled to any remedies provided by this chapter, including but not limited to, enforcement of a lien against an occupant, if:

The requirements of this section are not satisfied;

The sale of the personal property located in the leased space is not in conformity with subdivision (2)(F); or

There is a willful violation of this chapter.

Acts 1980, ch. 717, § 5; T.C.A., § 64-3105; Acts 2011, ch. 131, §§ 9-17; 2017, ch. 457, § 2; 2020, ch. 674, §§ 1-3.

Compiler's Notes. Acts 2011, ch. 131, § 19 provided that the act, which rewrote this section, shall apply to each rental agreement made or renewed after July 1, 2011.

Amendments. The 2017 amendment substituted “Uniform Unclaimed Property Act” for “Uniform Disposition of Unclaimed Property Act” in the last sentence of (2)(J).

The 2020 amendment inserted “, online,” in (2)(E); in (2)(F), added “in a commercially reasonable manner” at the end of the first sentence, added the present second sentence, and substituted “may include” for “shall include” in the third sentence; and in (2)(K)(ii), added the present second sentence, and in the third sentence, inserted “or county clerk's”, substituted “facility owner” for “owner”, and inserted “motor vehicle” preceding “owner” twice.

Effective Dates. Acts 2017, ch. 457, § 7. July 1, 2017; provided that, for purposes of promulgating rules, the act took effect May 25, 2017.

Acts 2020, ch. 674, § 4. July 1, 2020.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), Nos. 7-501, 7-502.

Law Reviews.

Property Rights, Property Wrongs, and Chattel Disposession under Self-Storage Leases (Jeffrey Douglas Jones), 78 Tenn. L. Rev. 1015 (2011).

NOTES TO DECISIONS

1. Purchaser in Good Faith.

Under T.C.A. § 66-31-105(2)(J), a purchaser in good faith of personal property sold to satisfy the owner's lien takes property free of any rights of persons against whom the lien was valid despite noncompliance by the owner with the requirements of this section; thus, if the occupant of the storage unit had in fact been in default on her obligations for 30 days, then the facility would have been entitled to satisfy the debt by conveying the stored property to the finder and would have endowed him with title to the property as a purchaser in good faith despite any failure by the facility to comply with procedures set out in T.C.A. § 66-31-105(2), such as notice. Urquhart v. State, — S.W.3d —, 65 U.C.C. Rep. Serv. 2d (Callaghan) 747, 2008 Tenn. App. LEXIS 280 (Tenn. Ct. App. May 9, 2008).

2. Authority Over Property.

Finder could not demonstrate interest in the property in the storage unit which would entitle him to recover the seized funds, as none of the conditions allowing the owner to enter the storage unit existed, and the facility's unlawful trespass did not confer upon it any ownership interest in the property contained in the unit; thus, it had no authority to sell or otherwise dispose of that property. Urquhart v. State, — S.W.3d —, 65 U.C.C. Rep. Serv. 2d (Callaghan) 747, 2008 Tenn. App. LEXIS 280 (Tenn. Ct. App. May 9, 2008).

66-31-106. Rights supplemental — Required contents of rental agreements.

  1. Nothing in this chapter shall be construed as in any manner impairing or affecting the right of the parties to create additional rights, duties, and obligations in and by virtue of the rental agreement. The rights provided by this chapter shall be in addition to all other rights allowed by law to a creditor against a debtor.
    1. The rental agreement shall contain a notice stating that all property stored under the terms of such agreement may be sold or otherwise disposed of if no payment has been received for a continuous fifteen-day period when due.
    2. The rental agreement shall contain a provision directing the occupant to disclose to the owner any lienholder with an interest in property that is or may be stored in the self-service storage facility.

Acts 1980, ch. 717, § 6; T.C.A., § 64-3106; Acts 2011, ch. 131, § 18.

Compiler's Notes. Acts 2011, ch. 131, § 19 provided that the act, which added subsection (b), shall apply to each rental agreement made or renewed after July 1, 2011.

Law Reviews.

Property Rights, Property Wrongs, and Chattel Disposession under Self-Storage Leases (Jeffrey Douglas Jones), 78 Tenn. L. Rev. 1015 (2011).

66-31-107. Application of chapter.

  1. This chapter shall apply to all rental agreements entered into or extended or renewed after July 1, 1980.
  2. All rental agreements entered into before July 1, 1980, and not extended or renewed after that date, and the rights and duties and interests flowing from them shall remain valid, and may be enforced or terminated in accordance with their terms or as permitted by any other statute or law of this state.

Acts 1980, ch. 717, §§ 7, 8; T.C.A., § 64-3107.

Law Reviews.

Property Rights, Property Wrongs, and Chattel Disposession under Self-Storage Leases (Jeffrey Douglas Jones), 78 Tenn. L. Rev. 1015 (2011).

Chapter 32
Time-Share Programs and Vacation Clubs

Part 1
Time-Share Act of 1981

66-32-101. Short title.

This part shall be known and may be cited as the “Tennessee Time-Share Act of 1981.”

Acts 1981, ch. 372, §§ 1, 35; T.C.A., § 64-3201; Acts 1983, ch. 210, § 1.

Cross-References. Membership camping, title 66, ch. 32, part 3.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Condominiums, § 1.

Law Reviews.

Comment, An Overview of Time-Sharing and the Tennessee Time-Share Act: Are Purchasers Now Protected?, 53 Tenn. L. Rev. 779 (1986).

Attorney General Opinions. Prohibiting yard signs in subdivision, OAG 04-041, 2004 Tenn. AG LEXIS (3/12/04).

NOTES TO DECISIONS

1. Legislative Intent.

The overriding purpose of title 66, ch. 32 is to protect consumers. State v. Heath, 806 S.W.2d 535, 1990 Tenn. App. LEXIS 800 (Tenn. Ct. App. 1990), appeal denied, 1991 Tenn. LEXIS 104 (Tenn. Mar. 11, 1991).

2. Standing.

Where the attorney general is clothed with authority to bring an action under the Tennessee Consumer Protection Act of 1977, title 47, ch. 18, part 1, and title 66, ch. 32, part 1, the attorney general's standing does not depend on the outcome of the claims. State v. Heath, 806 S.W.2d 535, 1990 Tenn. App. LEXIS 800 (Tenn. Ct. App. 1990), appeal denied, 1991 Tenn. LEXIS 104 (Tenn. Mar. 11, 1991).

Participation in action was well within the attorney general's discretion where underlying financing on time-share units contained no protection for non-defaulting purchasers and where such omission could cause many consumers to lose money invested in time-shares. The attorney general's standing under the Tennessee Consumer Protection Act of 1977 arose from T.C.A. § 47-18-114 and standing under this part arose under the attorney general's broad statutory and common law powers. State v. Heath, 806 S.W.2d 535, 1990 Tenn. App. LEXIS 800 (Tenn. Ct. App. 1990), appeal denied, 1991 Tenn. LEXIS 104 (Tenn. Mar. 11, 1991).

Collateral References.

Regulation of time-share or interval ownership interests in real estate. 6 A.L.R.4th 1288.

66-32-102. Part definitions.

As used in this part and part 2 of this chapter, unless the context otherwise requires:

  1. “Acquisition agent” means a person who by means of telephone, mail, advertisement, inducement, solicitation or otherwise attempts directly to encourage any person to attend a sales presentation for a time-share program;
  2. “Advertise” or “advertisement” means any written, printed, verbal or visual offer by an individual or general solicitation;
  3. “Commission” means Tennessee real estate commission, which is an agency created under § 62-13-201;
  4. “Component site” means a specific geographic site at which certain time-share accommodations and facilities are located. If permitted under applicable law, separate phases that are operated as a single development in a particular geographic location and under common management shall be deemed a single component site;
  5. “Developer” means, in the case of any given property, any person or entity which is in the business of creating or which is in the business of selling its own time-share intervals in any time-share program. This definition does not include a person acting solely as a sales agent;
  6. “Development,” “project,” or “property” means all of the real property subject to a project instrument, and containing more than one (1) unit;
  7. “Exchange agent” means a person who exchanges or offers to exchange time-share intervals in an exchange program with other time-share intervals;
  8. “Managing agent” means a person who undertakes the duties, responsibilities, and obligations of the management of a time-sharing program;
  9. “Offering” means any offer to sell, solicitation, inducement or advertisement whether by radio, television, newspaper, magazine or by mail, whereby a person is given an opportunity to acquire a time-share interval within a project located either within or outside the state. Any offering of a time-share interval which is not located in this state shall not be an offering if the developer shall submit appropriate documentation satisfactory to the commission that the time-share program is in compliance with the law of the jurisdiction in which the time-share interval is located and such law is as stringent as this part;
  10. “Person” means one (1) or more natural persons, corporations, partnerships, associations, trusts, other entities, or any combination thereof;
  11. “Project” — See “Development”;
  12. “Project instrument” means one (1) or more recordable documents applicable to the whole project by whatever name denominated, containing restrictions or covenants regulating the use, occupancy or disposition of an entire project, including any amendments to the document, but excluding any law, ordinance, or governmental regulation;
  13. “Property” — See “Development”;
  14. “Public offering statement” means that statement required by § 66-32-112;
  15. “Purchaser” means any person other than a developer or lender who acquires an interest in a time-share interval;
  16. “Reservation system” means the method, arrangement, or procedure by which the owners of vacation club interests are required to compete with other owners of vacation club interests in the same vacation club in order to reserve the use and occupancy of an accommodation of the vacation club for one or more use periods, regardless of whether such reservation system is operated and maintained by the vacation club managing entity, an exchange company, or any other person. In the event that mandatory use of an exchange program is an owner's principal means of obtaining the right to use and occupy a vacation club's accommodations, such arrangement shall be deemed a reservation system for purposes of this subdivision (16) and part 2 of this chapter;
  17. “Sales agent” means a person who sells or offers to sell “time-share intervals” in a “time-share program” to a purchaser. All such sales agents shall be licensed and subject to title 62, chapter 13;
  18. “Time-share estate” means an ownership or leasehold estate in property devoted to a time-share fee, tenants in common, time span ownership, interval ownership, and a time-share lease;
  19. “Time-share instrument” means any document by whatever name denominated, creating or regulating time-share programs, but excluding any law, ordinance or governmental regulation;
  20. “Time-share interval” means a time-share estate or a time-share use;
  21. “Time-share program” means any arrangement for time-share intervals in a time-share project whereby use, occupancy or possession of real property has been made subject to either a time-share estate or time-share use whereby such use, occupancy or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis occurring annually over any period of time in excess of one (1) year;
  22. “Time-share project” means any real property that is subject to a time-share program;
  23. “Time-share resale broker” means any person or entity who undertakes to list, advertise for sale, promote or sell by any means whatsoever more than five (5) time-share intervals per year in one (1) or more time-share projects on behalf of any number of purchasers. A time-share resale broker must be a licensed real estate broker, as defined in § 62-13-102. “Time-share resale broker” does not include:
    1. Any person who has acquired any number of time-share intervals in any number of time-share projects for personal use and occupancy;
    2. Any resale performed by a time-share resale broker affiliated with a duly registered time-share developer, involving time-share intervals under the control of the time-share developer in its project; provided, that the time-share developer is in compliance with § 66-32-137(d); or
    3. A publisher of a newspaper or periodical in general circulation, broadcaster or telecaster in connection with the advertising for resale or other promotion of one (1) or more time-share intervals, so long as the publisher, broadcaster or telecaster is not under common ownership or control with a person required to be licensed by this part or chapter 13 of this title or does not have as its primary purpose the solicitation of resales or other uses of time-share intervals;
  24. “Time-share use” means any contractual right of exclusive occupancy which does not fall within the definition of a “time-share estate” including, without limitation, a vacation license, prepaid hotel reservation, club membership, vacation club interest, limited partnership or vacation bond;
  25. “Unit” means the real property or real property improvement in a project which is divided into time-share intervals;
  26. “Vacation club” means any system or program with respect to which a purchaser obtains, by any means, a recurring right to use and occupy accommodations and facilities, if any, in more than one (1) component site through the mandatory use of a reservation system, whether or not the purchaser's use and occupancy right is coupled with an interest in real property; and
  27. “Vacation club documents” means and includes the one (1) or more documents or instruments, by whatever name denominated, creating or governing a vacation club and the disposition of vacation club interests therein. “Vacation club documents” is intended to be broadly construed to incorporate all terms and conditions of the purchase of a vacation club interest, the incorporation of accommodations and facilities located at component sites into the vacation club, the management and operation of the vacation club's component sites, and the management and operation of the reservation system, including, but not limited to, the reservation system's rules and regulations.

Acts 1981, ch. 372, § 2; T.C.A., § 64-3202; Acts 1983, ch. 210, § 2; 1985, ch. 98, § 1; 1990, ch. 672, § 2; 1995, ch. 90, §§ 5, 7.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

Attorney General Opinions. Constitutionality, OAG 90-80, 1990 Tenn. AG LEXIS 77 (8/20/90).

66-32-103. Nature of time-share estates — Recordation.

  1. A “time-share estate” is an estate in real property and has the character and incidents of an estate in fee simple at common law or estate for years, if a leasehold, except as expressly modified by this part. This shall supersede any contrary rule at common law.
  2. Each time-share estate constitutes for purposes of title a separate estate or interest in property except for real property tax purposes.
  3. A document transferring or encumbering a time-share estate in real property may not be rejected for recordation because of the nature or duration of that estate or interest.

Acts 1981, ch. 372, §§ 3, 4; T.C.A., §§ 64-3203, 64-3204.

NOTES TO DECISIONS

1. Real Property.

Timeshare interest is an estate in real property, and is not a good or service. Overton v. Westgate Resorts, Ltd., L.P., — S.W.3d —, 2015 Tenn. App. LEXIS 45 (Tenn. Ct. App. Jan. 30, 2015), appeal denied, — S.W.3d —, 2015 Tenn. LEXIS 515 (Tenn. June 15, 2015), cert. denied, Westgate Resorts, Ltd., L.P. v. Overton, 136 S. Ct. 486 (U.S. 2015), 193 L. Ed. 2d 350,  2015 U.S. LEXIS 7049.

66-32-104. Applicability of local ordinances, regulations, and building codes.

A zoning, subdivision, or other ordinance or regulation may not discriminate against the creation of time-share intervals or impose any requirement upon a time-share program which it would not impose upon a similar development under a different form of ownership.

Acts 1981, ch. 372, § 5; T.C.A., § 64-3205.

66-32-105. Time-share units.

A time-share program may be created in any unit, unless expressly prohibited by the project instruments or local governing laws.

Acts 1981, ch. 372, § 6; T.C.A., § 64-3206.

66-32-106. Instruments for time-share estates.

Project instruments and time-share instruments creating time-share estates must contain the following:

  1. The name of the county in which the property is situated;
  2. The legal description, street address or other description sufficient to identify the property;
  3. Identification of time periods by letter, name, number, or combination thereof;
  4. Identification of time-share estates and, where applicable, the method whereby additional time-share estates may be created;
  5. The formula, fraction or percentage, of the common expenses and any voting rights assigned to each time-share estate and, where applicable, to each unit in a project that is not subject to the time-share program;
  6. Any restrictions on the use, occupancy, alteration or alienation of time-share intervals;
  7. The ownership interest, if any, in personal property and provisions for the care, maintenance and replacement of the commonly owned capital improvements and the commonly owned personal property belonging to the time-share estates. Specifically, an escrow or reserve account shall be established for the repair, replacement and maintenance of capital improvements and personal property; and
  8. Any other matters the developer deems appropriate.

Acts 1981, ch. 372, § 7; T.C.A., § 64-3207; Acts 1989, ch. 65, § 1.

66-32-107. Time-share estate management.

The time-share instruments for a time-share estate program shall prescribe reasonable arrangements for management and operation of the time-share program and for the maintenance, repair and furnishing of units, which shall ordinarily include, but need not be limited to, provisions for the following:

  1. Creation of an association of time-share estate owners;
  2. Adoption of bylaws for organizing and operating the association;
  3. Payment of costs and expenses of operating the time-share program and owning and maintaining the units;
  4. Employment and termination of employment of the managing agent for the association;
  5. Preparation and dissemination to owners of an annual budget and of operating statements and other financial information concerning the time-share program;
  6. Adoption of standards and rules of conduct for the use and occupancy of units by owners;
    1. Collection of assessments from owners to defray the expenses of management of the time-share program and maintenance of the units, which will include the maintenance of reserve and escrow accounts that will adequately provide for the maintenance and replacement of capital improvements to the commonly owned areas of the time-sharing program and for the timely maintenance and replacement of the personal property commonly owned by the time-share estates;
    2. The board of directors of the property owners association shall decide when maintenance or replacement of capital improvements shall be accomplished and shall set amounts of reserve. The board of directors of the property owners association and managing agent shall disclose to each interval owner, in a written annual report, the status of the required accounts. The report shall include the total funds deposited, the current balance, the interest earned, the purpose and amount of any payouts since the previous report. The report shall include the name and address of the person or persons in responsible charge of the accounts;
  7. Comprehensive general liability insurance for death, bodily injury and property damage arising out of, or in connection with, the use of units by owners, their guests and other users;
  8. Methods for providing compensation for use periods or monetary compensation to an owner if a unit cannot be made available for the period to which the owner is entitled by schedule or by confirmed reservation;
  9. Procedures for imposing a monetary penalty or suspension of an owner's rights and privileges in the time-share program for failure of the owner to comply with provisions of the time-share instruments or the rules of the association with respect to the use of the units. Under these procedures an owner must be given notice and the opportunity to refute or explain the charges against such owner in person or in writing to the governing body of the association before a decision to impose discipline is rendered;
  10. Employment of attorneys, accountants and other professional persons as necessary to assist in the management of the time-share program and the units;
  11. The managing agent for the association shall be responsible for the maintenance of an escrow or reserve account, as set by the board of directors, which shall contain the assessments collected for the maintenance and replacement of the capital improvements to the commonly owned areas and for the maintenance and timely replacement of the personal property commonly owned by the time-share estates. Such escrow or reserve accounts shall be maintained in an institution insured by the federal deposit insurance corporation or federally insured agencies;
  12. Failure of the managing agent to properly maintain the escrow or reserve accounts, as set by the board of directors, for maintenance and replacement of capital improvements to the common area and the maintenance and timely replacement of the personal property shall constitute a felony and the managing agent shall be subject to the penalties as provided in § 66-32-118; and
  13. The managing agent shall be a licensed real estate firm or bonded agent. The principal broker/agent of the firm shall have control of the accounts required in subdivision (12), and shall enter into a tri-party agreement by and between the commission, the managing agent, and the depository institution, providing for the authority of the commission to access and inspect the account records at all times on behalf of the condominium homeowners association.

Acts 1981, ch. 372, § 8; T.C.A., § 64-3208; Acts 1989, ch. 65, §§ 2, 3.

Attorney General Opinions. Proposed amendment to T.C.A. § 66-32-107, pertaining to management of time-share estates, that did not state that it acted retroactively would not violate either the contract clause of the United States Constitution or Tenn. Const., Art. I, § 20, OAG 04-081, 2004 Tenn. AG LEXIS 80 (4/30/04).

66-32-108. Developer control.

  1. The time-share instruments for a time-share estate program may provide for a “developer control period,” during which the developer or a managing agent selected by the developer may manage the time-share program and the units in the time-share program.
  2. If the time-share instruments for a time-share estate program provide for the establishment of a developer control period, they shall ordinarily include provisions for the following:
    1. Termination of the developer control period by action of the association;
    2. Termination of contracts for goods and services for the time-share program or for units in the time-share program entered into during the developer control period; and
    3. A regular accounting by the developer to the association as to all matters that significantly affect the interests of owners in the time-share program.

Acts 1981, ch. 372, § 9; T.C.A., § 64-3209.

66-32-109. Instruments for time-share use.

Project instruments and time-share instruments creating time-share uses must contain the following:

  1. Identification by name of the time-share project and street address where the time-share project is situated;
  2. Identification of the time periods, type of units and the units that are in the time-share program and the length of time that the units are committed to the time-share program;
  3. In case of a time-share project, identification of which units are in the time-share program and the method whereby any other units may be added, deleted or substituted; and
  4. Any other matters that the developer deems appropriate.

Acts 1981, ch. 372, § 10; T.C.A., § 64-3210.

66-32-110. Time-share use management.

The time-share instruments for a time-share use program shall prescribe reasonable arrangements for management and operation of the time-share program and for the maintenance, repair and furnishing of units which shall ordinarily include, but need not be limited to, provisions for the following:

  1. Standards and procedures for upkeep, repair and interior furnishings of units and for providing maid, cleaning, linen and similar services to the units during use periods;
  2. Adoption of standards and rules of conduct governing the use and occupancy of units by owners;
  3. Payment of the costs and expenses of operating the time-share program and owning and maintaining the units;
  4. Selection of a managing agent to act on behalf of the developer;
  5. Preparation and dissemination to owners of an annual budget and of operating statements and other financial information concerning the time-share program;
  6. Procedures for establishing the rights of owners to the use of units by prearrangement or under a first-reserved first-served priority system;
  7. Organization of a management advisory board consisting of time-share use owners including an enumeration of rights and responsibilities of the board;
  8. Procedures for imposing and collecting assessments or use fees from time-share use owners as necessary to defray costs of management of the time-share program and in providing materials and services to the units;
  9. Comprehensive general liability insurance for death, bodily injury and property damage arising out of, or in connection with, the use of units by time-share use owners, their guests and other users;
  10. Methods for providing compensating use periods or monetary compensation to an owner if a unit cannot be made available for the period to which the owner is entitled by schedule or a confirmed reservation;
  11. Procedures for imposing a monetary penalty or suspension of an owner's rights and privileges in the time-share program for failure of the owner to comply with the provisions of the time-share instruments or the rules established by the developer with respect to the use of the units. The owners shall be given notice and the opportunity to refute or explain the charges in person or in writing to the management advisory board before a decision to impose discipline is rendered; and
  12. Annual dissemination to all time-share use owners by the developer, or by the managing agent, of a list of the name and mailing addresses of all current time-share use owners in the time-share program.

Acts 1981, ch. 372, § 11; T.C.A., § 64-3211.

66-32-111. Partition.

No action for partition of a unit may be maintained except as permitted by the time-share instrument.

Acts 1981, ch. 372, § 12; T.C.A., § 64-3212.

66-32-112. Public offering statement — General provisions.

A public offering statement must be provided to each purchaser of a time-share interval and must contain or fully and accurately disclose:

  1. The name of the developer and the principal address of the developer and the time-share intervals offered in the statement;
  2. A general description of the units including, without limitation, the developer's schedule of commencement and completion of all buildings, units, and amenities or if completed that they have been completed;
  3. As to all units offered by the developer in the same time-share project:
    1. The types and number of units;
    2. Identification of units that are subject to time-share intervals; and
    3. The estimated number of units that may become subject to time-share intervals;
  4. A brief description of the project;
  5. If applicable, any current budget and a projected budget for the time-share intervals for one (1) year after the date of the first transfer to a purchaser. The budget must include, without limitation:
    1. A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement;
    2. The projected common expense liability, if any, by category of expenditures for the time-share intervals;
    3. The projected common expense liability for all time-share intervals; and
    4. A statement of any services not reflected in the budget that the developer provides, or expenses that it pays;
  6. Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee;
  7. A description of any liens, defects, or encumbrances on or affecting the title to the time-share interval;
  8. A description of any financing offered by the developer;
  9. A statement that within ten (10) days from the date of the signing of the contract made by the purchaser, where the purchaser shall have made an on-site inspection of the time-share project prior to the signing of the contract of purchase, and where the purchaser has not made an on-site inspection of the time-share project prior to the signing of the contract of purchase fifteen (15) days from the date of signing of the contract, the purchaser may cancel any contract for the purchase of a time-share interval from developer;
  10. A statement of any pending suits material to the time-share intervals of which a developer has actual knowledge;
  11. Any restraints on alienation of any number or portion of any time-share intervals;
  12. A description of the insurance coverage, or a statement that there is no insurance coverage, provided for the benefit of time-share interval owners;
  13. Any current or expected fees or charges to be paid by time-share interval owners for the use of any facilities related to the property;
  14. The extent to which financial arrangements have been provided for completion of all promised improvements; and
  15. The extent to which a time-share unit may become subject to a tax or other lien arising out of claims against other owners of the same unit.

Acts 1981, ch. 372, § 13; T.C.A., § 64-3213; Acts 1983, ch. 210, § 3.

Cross-References. Exemptions from public offering statement requirement, § 66-32-115.

Material changes to be reported, § 66-32-116.

Regulation by commission, § 66-32-124.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

NOTES TO DECISIONS

1. Compliance.

Timeshare developer willfully violated the Tennessee Time-share Act, T.C.A. § 66-32-101 et seq., because the developer failed to provide purchasers with a current and complete copy of a public offering statement (POS). In addition, when it was brought to the developer's attention that the purchasers had not received a current and complete POS and desired to rescind the contract, the developer refused the request. Overton v. Westgate Resorts, Ltd., L.P., — S.W.3d —, 2015 Tenn. App. LEXIS 45 (Tenn. Ct. App. Jan. 30, 2015), appeal denied, — S.W.3d —, 2015 Tenn. LEXIS 515 (Tenn. June 15, 2015), cert. denied, Westgate Resorts, Ltd., L.P. v. Overton, 136 S. Ct. 486 (U.S. 2015), 193 L. Ed. 2d 350,  2015 U.S. LEXIS 7049.

66-32-113. Escrow of deposits.

    1. A developer of a time-share program shall deposit into an escrow account established and held in this state, in an account designated solely for the purpose, by an independent bonded escrow company, or in an institution whose accounts are insured, a governmental agency or instrumentality, one hundred percent (100%) of all funds which are received during the purchaser's cancellation period provided for in this part. The deposit of such funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer, which shall include that:
      1. Its purpose is to protect the purchaser's right to a refund if the purchaser cancels the sales agreement for a time-share interval within the cancellation period;
      2. Funds may be disbursed to the developer by the escrow agent from the escrow account only after expiration of the purchaser's cancellation period and in accordance with the sales agreement;
      3. The escrow agent may release funds to the developer from the escrow account only after receipt of a sworn statement from the developer that no cancellation notice was received before expiration of the cancellation period; and
      4. If a buyer properly terminates the contract pursuant to its terms or pursuant to this part, the funds shall be paid to the buyer together with any interest earned, all as provided in § 66-32-114(a).
    2. Funds so deposited may be invested by the escrow agent in securities of the United States or any agency thereof or in savings or time deposits in institutions insured by an agency of the United States.
  1. If a developer contracts to sell a time-share estate and the construction, furnishings, and landscaping of the property submitted to time-share ownership have not been substantially completed in accordance with the plans and specifications and representations made by the developer in the disclosures required by this part, the developer shall immediately pay into an escrow account established and held in this state, in an account designated solely for the purpose, by an independent bonded escrow company, or in an institution whose accounts are insured, a governmental agency or instrumentality, all payments received by or on behalf of the developer from the buyer on a contract of purchase. The escrow agent may invest the escrow funds in securities of the United States or any agency thereof or in savings or time deposits in institutions insured by an agency of the United States. Funds shall be released from escrow as follows:
    1. If a buyer properly terminates the contract pursuant to its terms or pursuant to this part, the funds shall be paid to the buyer, together with any interest earned;
    2. If the buyer defaults in the performance of the buyer's obligations under the contract of purchase and sale, the funds shall be paid to the developer, together with any interest earned; or
    3. If the funds of a buyer have not been previously disbursed in accordance with this subsection (b), they may be disbursed to the developer by the escrow agent at the closing of the transaction, unless prior to the disbursement the escrow agent received from the buyer written notice of a dispute between the buyer and developer. If the money remains in this account for more than three (3) months and earns interest, the interest shall be paid as provided in this subsection (b).
  2. For the purpose of this section, “substantially completed” means that all amenities, furnishings, appliances and structural components and mechanical systems of buildings are completed and provided as represented in the public offering statement and that the premises are ready for occupancy and the proper governmental authority has caused to be issued a certificate of occupancy.
    1. In lieu of the provisions in subsection (b), a developer may withdraw, after the initial rescission period for cancellation has expired, all payments received by the developer from the buyer toward the sales price, provided:
      1. The developer, prior to withdrawal of any funds, posts a surety bond, irrevocable letter of credit or other financial assurances acceptable to the commission in an amount equal to one hundred twenty-five percent (125%) of the cost to complete the time-share project. The developer shall be required to submit such cost and financial data as the commission may reasonably require; or
      2. The developer has obtained protection for nondefaulting purchasers in compliance with § 66-32-128, and has obtained a final and binding commitment letter on the construction of the project and a final and binding commitment letter on the financing of the same construction. A bond obtained pursuant to subdivision (d)(1)(A) shall be executed by the seller as principal and by a surety company authorized to do business in this state as surety. The bond shall be conditioned upon the faithful compliance of the seller with this part including substantial completion, as defined in subsection (c), of the project and unit and compliance with the contract of purchase.
    2. Payments so withdrawn pursuant to this subsection (d) may be used only to pay for construction costs of the improvements comprising the time-share project.
  3. In lieu of any escrows required by this section, the commission shall have the discretion to accept other financial assurances including, but not limited to, a performance bond or an irrevocable letter of credit in an amount at least equal to or in excess of the cost to complete the time-share project.

Acts 1981, ch. 372, § 14; T.C.A., § 64-3214; Acts 1982, ch. 753, § 1; 1983, ch. 210, § 4; 1985, ch. 98, §§ 2-4.

Law Reviews.

Comment, An Overview of Time-Sharing and the Tennessee Time-Share Act: Are Purchasers Now Protected?, 53 Tenn. L. Rev. 779 (1986).

Attorney General Opinions. Requirements that must be satisfied prior to withdrawing funds from escrow, OAG 95-119, 1995 Tenn. AG LEXIS 142 (12/1/95).

66-32-114. Mutual rights of cancellation.

  1. Before transfer of a time-share interval and no later than the date of any sales contract, the developer shall provide the intended transferee with a copy of the public offering statement and any amendments and supplements thereto. The contract is voidable by the purchaser until the purchaser has received the public offering statement. The contract is also voidable by the purchaser for ten (10) days from the date of the signing of the contract by the purchaser if the purchaser shall have made an on-site inspection of the time-share project or any component site prior to the signing of the contract, and if the purchaser did not make an on-site inspection of the time-share project or any component site prior to signing the contract, for fifteen (15) days thereafter. Cancellation is without penalty, and all payments made by the purchaser before cancellation must be refunded within thirty (30) days after receipt of the notice of cancellation as provided in subsection (c).
  2. During the applicable rescission period, the developer may cancel the contract of purchase without penalty to either party. The developer shall return all payments due, the purchaser shall return all material received in good condition, reasonable wear and tear excepted. If such materials are not returned, the developer may deduct the cost of the same and return the balance to the purchaser.
  3. If either party elects to cancel a contract pursuant to subsection (a) or (b), that party may do so by hand delivering notice thereof to the other party within the designated period for voiding such contract or by mailing notice thereof by prepaid United States mail, postmarked anytime within the designated period for voiding such contract, to the other party or to such party's agent for service of process. The rescission rights set forth in subsections (a) and (b) may not be waived by either the purchaser or developer.

Acts 1981, ch. 372, § 15; T.C.A., § 64-3215; Acts 1983, ch. 210, § 5; 2019, ch. 147, § 1.

Amendments. The 2019 amendment inserted “or any component site” twice in the third sentence of (a).

Effective Dates. Acts 2019, ch. 147, § 2. April 17,  2019.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

NOTES TO DECISIONS

1. Compliance.

Timeshare developer willfully violated the Tennessee Time-share Act, T.C.A. § 66-32-101 et seq., because the developer failed to provide purchasers with a current and complete copy of a public offering statement (POS). In addition, when it was brought to the developer's attention that the purchasers had not received a current and complete POS and desired to rescind the contract, the developer refused the request. Overton v. Westgate Resorts, Ltd., L.P., — S.W.3d —, 2015 Tenn. App. LEXIS 45 (Tenn. Ct. App. Jan. 30, 2015), appeal denied, — S.W.3d —, 2015 Tenn. LEXIS 515 (Tenn. June 15, 2015), cert. denied, Westgate Resorts, Ltd., L.P. v. Overton, 136 S. Ct. 486 (U.S. 2015), 193 L. Ed. 2d 350,  2015 U.S. LEXIS 7049.

66-32-115. Exemptions from requirement of public offering statement.

  1. The developer shall not be required to prepare and distribute a public offering statement if the developer has registered and there has been issued a public offering statement or similar disclosure document which is provided to purchasers under the following:
    1. Securities Act of 1933 (15 U.S.C. § 77a et seq.);
    2. Federal Interstate Land Sales Full Disclosure Act (15 U.S.C. § 1701 et seq.) in which the time-share program is made a part of the subdivision that is being registered; and
    3. Any federal or Tennessee act which requires a federal or state public offering statement or similar disclosure document to be prepared and provided to purchasers.
  2. A public offering statement need not be prepared or delivered in the case of:
    1. Any transfer of a time-share interval by any time-share interval owner other than the developer and/or his agent;
    2. Any disposition pursuant to court order;
    3. A disposition by a government or governmental agency;
    4. A disposition by foreclosure or deed in lieu of foreclosure;
    5. A disposition of a time-share interval in a time-share project situated wholly outside the state; provided, that all solicitations, negotiations, and contracts took place wholly outside this state and the contract was executed wholly outside this state;
    6. A gratuitous transfer of a time-share interval; or
    7. Group reservations made for fifteen (15) or more people as a single transaction between a hotel and travel agent or travel groups for hotel accommodations, where deposits are made and held for more than three (3) years in advance.

Acts 1981, ch. 372, § 16; T.C.A., § 64-3216.

66-32-116. Material change.

The developer shall amend or supplement the public offering statement to report any material change in the information required by § 66-32-112. As to any exchange program, the developer shall use the current written materials that are supplied to it for distribution to the time-share interval owners as it is received.

Acts 1981, ch. 372, § 17; T.C.A., § 64-3217.

66-32-117. Liens.

  1. Unless the purchaser expressly agrees to take subject to or assume a lien prior to transferring a time-share interval other than by deed in lieu of foreclosure, the developer shall record or furnish to the purchaser releases of all liens affecting that time-share interval, or shall provide a surety bond or insurance against the lien.
  2. Unless a time-share interval owner or such owner's predecessor in title agrees otherwise with the lienor, if a lien other than an underlying mortgage or deed of trust becomes effective against more than one (1) time-share interval in a time-share project, any time-share interval owner is entitled to a release of such owner's time-share interval from the lien upon payment of the amount. The payment must be proportionate to the ratio that the time-share interval owner's liability bears to the liabilities of all time-share interval owners whose interests are subject to the lien. Upon receipt of payment, the lienholder shall promptly deliver to the time-share interval owner a release of the lien covering that time-share interval. After payment, the managing entity may not assess or have a lien against that time-share interval for any portion of the expenses incurred in connection with that lien.

Acts 1981, ch. 372, § 18; T.C.A., § 64-3218.

66-32-118. Violations — Attorney's fees — Criminal penalties.

  1. If a developer or any other person subject to this part violates any provision thereof or any provision of the project instruments, any person or class of persons adversely affected by the violation has a claim for appropriate relief. Punitive damages may be awarded for a willful violation of this part. The court may also award reasonable attorney's fees.
  2. Except as provided in subsection (c), any developer or any other person subject to this part who offers or disposes of a time-share interval without having complied with this part or who violates any provision of this part commits a Class C misdemeanor.
  3. Any developer or any other person subject to this part who knowingly, willfully and intentionally offers, disposes of, or jeopardizes the interest of the purchaser of a time-share interval in violation of § 66-32-113, § 66-32-122(a) or § 66-32-128 commits a felony punishable by a fine not exceeding five thousand dollars ($5,000) or by imprisonment for not less than one (1) year nor more than three (3) years, or by both such fine and imprisonment.
  4. Nothing in this part limits the power of the state to punish any person for any conduct or omission which constitutes a violation under any other provision of this code.

Acts 1981, ch. 372, § 19; T.C.A., § 64-3219; Acts 1986, ch. 601, § 1; 1987, ch. 194, § 1; 1989, ch. 591, § 113.

Compiler's Notes. The felony penalty provisions in subsection (c) may have been affected by the Criminal Sentencing Reform Act of 1989. See §§ 39-11-113, 40-35-110, 40-35-111.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

NOTES TO DECISIONS

1. Generally.

Tennessee Time-share Act, T.C.A. § 66-32-101 et seq., authorizes a civil right of action against a developer who violates the Act, and provides for the imposition of criminal penalties. Overton v. Westgate Resorts, Ltd., L.P., — S.W.3d —, 2015 Tenn. App. LEXIS 45 (Tenn. Ct. App. Jan. 30, 2015), appeal denied, — S.W.3d —, 2015 Tenn. LEXIS 515 (Tenn. June 15, 2015), cert. denied, Westgate Resorts, Ltd., L.P. v. Overton, 136 S. Ct. 486 (U.S. 2015), 193 L. Ed. 2d 350,  2015 U.S. LEXIS 7049.

2. Punitive Damages.

Award of punitive damages was appropriate due to the fact that a timeshare developer's representatives made intentional misrepresentations to the purchasers of a timeshare, willfully violated the Tennessee Timeshare Act, T.C.A. § 66-32-101 et seq., and refused to rescind the purchasers' contract despite statutory provisions supporting such rescission. Overton v. Westgate Resorts, Ltd., L.P., — S.W.3d —, 2015 Tenn. App. LEXIS 45 (Tenn. Ct. App. Jan. 30, 2015), appeal denied, — S.W.3d —, 2015 Tenn. LEXIS 515 (Tenn. June 15, 2015), cert. denied, Westgate Resorts, Ltd., L.P. v. Overton, 136 S. Ct. 486 (U.S. 2015), 193 L. Ed. 2d 350,  2015 U.S. LEXIS 7049.

66-32-119. Statute of limitations.

A judicial proceeding where the accuracy of the public offering statement or validity of any contract of purchase is in issue and a rescission of the contract or damages is sought must be commenced within four (4) years after the date of the contract of purchase, notwithstanding that the purchaser's terms of payments may extend beyond the period of limitation. However, with respect to the enforcement of provisions in the contract of purchase which require the continued furnishing of services and the reciprocal payments to be made by the purchaser, the period of bringing a judicial proceeding will continue for a period of four (4) years for each breach, but the parties may agree to reduce the period of limitation to not less than two (2) years.

Acts 1981, ch. 372, § 20; T.C.A., § 64-3220.

66-32-120. Financial records.

  1. The person or entity responsible for making and/or collecting common expenses, assessments or maintenance assessments shall keep detailed financial records.
  2. All financial and other records shall be made reasonably available for examination by any time-share interval owner and such owner's authorized agents.

Acts 1981, ch. 372, § 21; T.C.A., § 64-3221.

66-32-121. Powers and duties of commission.

  1. The commission may adopt, amend, and repeal rules, regulations and issue orders consistent with, and in furtherance of the objectives of this part.
  2. The commission may prescribe forms and procedures for submitting information to the commission.
  3. The commission may accept grants-in-aid from any governmental source and may contract with agencies charged with similar functions in this or other jurisdictions, in furtherance of the objectives of this part.
  4. The commission may cooperate with agencies performing similar functions in this and other jurisdictions to develop uniform filing procedures and forms, uniform disclosure standards, and uniform administrative practices, and may develop information that may be useful in the discharge of the commission's duties.
  5. The commission may initiate private investigations within or outside this state.
  6. The commission shall have the power to revoke, or suspend the real estate license of a sales agent, or the registration of a time-share project, or to otherwise appropriately discipline the sales agent, or fine the developer pursuant to  § 56-1-308, if, after notice and hearing, any of the following conditions exist:
    1. Any representation in any document or information filed with the commission is false or misleading; or
    2. Any developer or agent of a developer has:
      1. Engaged in or is engaging in any unlawful act or practice;
      2. Disseminated or caused to be disseminated orally, or in writing, any false or misleading promotional materials in connection with a time-share program;
      3. Concealed, diverted, or disposed of any funds or assets of any person in a manner impairing rights of purchasers of time-share intervals in the time-share program;
      4. Failed to perform any stipulation or agreement made to induce the commission to issue an order relating to that time-share program;
      5. Otherwise violated this part or the commission's rules, regulations, or orders;
      6. Makes any willful or negligent misrepresentation, or any willful or negligent omission of material fact about any time-share or time-share project, or exchange program;
      7. Makes any false promises of a character likely to influence, persuade or induce;
      8. Engages in any other conduct which constitutes improper, fraudulent or dishonest dealing; or
      9. Fails to promptly account for any funds held in trust, or who fails to display all records, books and accounts of such funds to the commission upon demand as provided for in this part, and the rules and regulations.
  7. The commission may issue a cease and desist order if the developer has not registered the time-share program as required by this part.
  8. The commission, after notice and hearing, may issue an order revoking the registration of a time-share program upon determination that a developer or an agent of a developer has failed to comply with a notice of suspension issued by the commission affecting the time-share program.
  9. The commission may reject an application for registration if the commission finds that:
    1. The developer or any entity or individual which composes the developer, or any officer or director of the developer does not possess a history of honesty, truthfulness, and fair dealing. Factors to be used in making such determination shall include whether the developer or any entity or individual which composes the developer, or any officer or director of the developer has:
      1. Been convicted of, or has pleaded nolo contendere to, any crime involving an act of fraud or dishonesty;
      2. Consented to or suffered a judgment in any civil or administrative action based upon conduct involving an act of fraud or dishonesty;
      3. Consented to or suffered the suspension or revocation of any professional, occupational, or vocational license based upon conduct involving an act of fraud or dishonesty;
      4. Knowingly made or caused to be made in any application or report filed with the commission, or in any proceeding before the commission, any written or oral statement which was at the time, and in light of the circumstances under which it was made, false or misleading with respect to material fact;
      5. Willfully omitted a material fact with respect to information furnished or requested in connection with an application;
      6. Willfully committed any violation of, or has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person, of any provision of state law or rule; or
      7. Been involved in unlicensed activity; or
    2. The commission may reject an application for registration if the commission finds that the developer or any entity or individual which composes the developer, or any officer or director of the developer does not possess a history of financial integrity. Factors to be used in making such determination shall include whether the developer or any entity or individual which composes the developer, or any officer or director of the developer:
      1. Has been placed in receivership or conservatorship during the previous ten (10) years;
      2. Has filed for bankruptcy within the previous ten (10) years; or
      3. Is liable for amounts of debt which would create excessive risks of default.

Acts 1981, ch. 372, § 22; T.C.A., § 64-3222; Acts 1985, ch. 98, §§ 5, 6; 1988, ch. 482, § 1.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

66-32-122. Registration — Bond — Statement of exchange agent.

  1. Unless exempted by § 66-32-126, a developer may not offer or dispose of a time-share interval unless the time-share program is registered with the commission; provided, that a developer may accept a reservation together with a deposit if the deposit is placed in an escrow account with an institution having trust powers and is refundable at any time at the purchaser's option. In all cases, a reservation must require a subsequent affirmative act by the purchaser via a separate instrument to create a binding obligation. A developer may not dispose of or transfer a time-share interval while an order revoking or suspending the registration of the time-share program is in effect.
  2. The acquisition agent shall be required to furnish to the commission its principal office address and telephone number and designate its responsible managing employee and shall furnish such additional information as the commission may require.
  3. The sales agent shall, in addition to other requirements of law, be required to furnish to the commission its principal office address and telephone number and designate its responsible managing employee and shall furnish such additional information as the commission may require.
  4. The managing agent shall be required to furnish to the commission its principal office address and telephone number and designate its responsible managing employee and shall furnish such additional information as the commission may require. Such additional information shall include criminal convictions.
  5. An exchange agent, including the developer if it is also the exchange agent, if offering exchange privileges with other time-share interval owners of time-share interval owners who own time-share estates within this state, shall annually file a statement with the commission which must fully and accurately disclose:
    1. The identity of the person operating the exchange program and whether that person is an affiliate of the developer;
    2. A general description of the procedures to qualify for and effectuate exchanges, including any stated or practiced priorities and restrictions, and the extent to which changes thereof may be made;
    3. The expenses, or ranges of expenses, to the time-share interval owners of membership in the exchange program including the expenses, if any, and the person to whom those expenses are payable;
    4. Whether and how any of the expenses specified in subdivision (e)(3) may be altered and, if any of them are to be fixed on a case-by-case basis, the manner in which they are to be fixed in each case;
    5. With respect to the owners of time-share intervals in the exchange program at each project during a calendar year ending not more than fifteen (15) months before the statement is filed;
    6. The percentage of exchanges properly applied for by members or participants in the exchange program that were fulfilled during a calendar year ending not more than fifteen (15) months before the date the statement is filed with the commission, together with a statement of the criteria used to determine whether an exchange was properly applied for and fulfilled; and
    7. The number of persons applying for an exchange program as a whole during the calendar year ending not more than fifteen (15) months before the statement is filed with the commission.
  6. The developer must provide a copy of the most recent exchange agent's statement filed with the commission to the purchaser in addition to the public offering statement if it is represented to the purchaser that the purchaser is entitled to or required to become a member of the exchange program. The developer is not responsible to the purchaser for any representation made in the exchange agent's statement which is untrue or incorrect.

Acts 1981, ch. 372, § 23; T.C.A., § 64-3223; Acts 1983, ch. 210, § 6; 1989, ch. 65, § 4.

Compiler's Notes. Time-share plans in existence before May 19, 1981, were required to be filed with the commissioner within 60 days of that date.

66-32-123. Application and fees for registration.

  1. An application for registration must contain the public offering statement, a brief description of the property, copies of time-share instruments and any documents referred to therein other than tract maps, plats, plans, and such other information required by the commission's rules and regulations and be accompanied by any reasonable fees required by the commission.
  2. Fee for registration of time-share interval plans; expenses for investigation and prosecution:
    1. For the registration of all time-share interval plans and the accommodations and facilities affected thereby which are located within the state, there shall be paid to the commission the sum of one hundred dollars ($100), together with an annual renewal fee of fifty dollars ($50.00);
    2. For the registration of all time-share interval plans and the accommodations and facilities affected thereby which are located outside the state, there shall be paid to the commission the sum of two hundred fifty dollars ($250), together with an annual renewal fee of one hundred dollars ($100); and
    3. Notwithstanding subdivisions (b)(1) and (2), the fees charged and collected shall be sufficient to cover the cost of administering this part.

Acts 1981, ch. 372, § 24; T.C.A., § 64-3224.

66-32-124. Commission regulation of public offering statement.

  1. The commission at any time may require a developer to alter or supplement the form or substance of a public offering statement to assure adequate and accurate disclosure to prospective purchasers.
  2. The public offering statement may not be used for any promotional purposes before registration and afterwards only if it is used in its entirety. No person may advertise or represent that the commission has approved or recommended the time-share program, the disclosure statement, or any of the documents contained in the application for registration.

Acts 1981, ch. 372, § 25; T.C.A., § 64-3225.

66-32-125. Effective date of registration — Incomplete or inadequate application.

  1. Except as otherwise provided in this section, the effective date of the registration, or any amendment thereto, shall be the forty-fifth day after the filing thereof or such earlier date as the commission may determine, having due regard to the public interest and the protection of purchasers. If any amendment to any such registration is filed prior to the effective date, the registration shall be deemed to have been filed when such amendment was filed.
  2. If it appears to the commission that the application for registration, or any amendment thereto, is on its face incomplete or inaccurate in any material respect, the commission shall so advise the developer prior to the date the registration would otherwise be effective. Such notification shall serve to suspend the effective date of the filing until the forty-fifth day after the developer files such additional information as the commission shall require. Any developer, upon receipt of such notice of suspension, may request a hearing.

Acts 1981, ch. 372, § 26; T.C.A., § 64-3226.

66-32-126. Exceptions from registration requirement.

No registration with the commission shall be required in the case of:

  1. Any transfer of a time-share interval by any time-share interval owner other than the developer and/or the developer's agent;
  2. Any disposition pursuant to court order;
  3. A disposition by a government or governmental agency;
  4. A disposition by foreclosure or deed in lieu of foreclosure;
  5. A disposition of a time-share interval in a time-share project situated wholly outside this state; provided, that all solicitations, negotiations, and contacts took place wholly outside this state and the contract was executed wholly outside this state;
  6. A gratuitous transfer of a time-share interval; or
  7. Group reservations made for fifteen (15) or more people as a single transaction between a hotel and travel agent or travel groups for hotel accommodations, where deposits are made and held for more than three (3) years in advance.

Acts 1981, ch. 372, § 27; T.C.A., § 64-3227.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

66-32-127. Financing of time-share programs.

  1. In the financing of a time-share program, the developer shall retain financial records of the schedule of payments required to be made and the payments made to any person or entity which is the owner of an underlying blanket mortgage, deed of trust, contract of sale or other lien or encumbrance (lienhold).
  2. Any transfer of the developer's interest in the time-share program to any third person shall be subject to the obligations of the developer.

Acts 1981, ch. 372, § 28; T.C.A., § 64-3228.

66-32-128. Protection of nondefaulting purchasers.

The developer whose project is subject to an underlying blanket lien or encumbrance shall protect nondefaulting purchasers from foreclosure by the lienholder by obtaining from the lienholder a nondisturbance clause, subordination agreement or partial release of the lien as the time-share intervals are sold. In the alternative, the developer may obtain the agreement of the lienholder to take the project, in the event of default by the developer, subject to the rights of the nondefaulting purchasers by posting a bond, equal to fifty percent (50%) of the amount owed to the lienholder, making an assignment of receivables equal to one hundred twenty-five percent (125%) of the principal amounts due to the lienholder, pledging collateral security equal to one hundred percent (100%) of the amount owed to the lienholder or entering into any other financing plan or escrow agreement acceptable to the lienholder.

Acts 1981, ch. 372, § 29; T.C.A., § 64-3229.

66-32-129. Protection of lienholder.

The lienholder in any time-share program shall have the following rights:

  1. A lienholder's lien rights shall be preserved as against any purchaser of time-share interval claiming that the time-share is invalid, void or voidable, thirty (30) days after written notice by certified mail or personal delivery has been given by the developer to the purchaser. Such notice must state the developer has assigned the receivables to the lienholder and that purchaser has thirty (30) days within which to object and specify the invalidity or defect contained within such instrument.
  2. Any purchaser who fails to indicate the invalidity, void or voidableness as provided in subdivision (1) waives or is estopped to raise, the same in any subsequent enforcement of the collection of the receivable by the lienholder.

Acts 1981, ch. 372, § 30; T.C.A., § 64-3230.

66-32-130. Premiere tourist resort city.

Notwithstanding any other provisions of this part, a “premiere tourist resort city” defined as a municipality having a population of three thousand (3,000) or more persons, according to the federal census of 1980 or any subsequent federal census in which at least forty percent (40%) of the assessed valuation, as shown by the tax assessment rolls or books of the municipality, of real estate in the municipality consists of hotels, motels, tourist court accommodations, tourist shops and restaurants, is hereby authorized to adopt by its board of commissioners any ordinance necessary to regulate the sale and use of time-share units within its jurisdiction including the requirement of registration, licenses, transfer and related requirements including any related fees.

Acts 1981, ch. 372, § 34; T.C.A., § 64-3231.

Compiler's Notes. For table of population of Tennessee municipalities, see Volume 13 and its supplement.

66-32-131. Misleading advertising unlawful.

It is unlawful for any person with intent directly or indirectly to offer for sale or sell time-share intervals in this state to authorize, use, direct or aid in the publication, distribution or circulation of any advertisement, radio broadcast or telecast concerning the time-share project in which the time-share intervals are offered, which contains any statement, pictorial representation or sketch which is false or misleading. Nothing in this section shall be construed to hold the publisher or employee of any newspaper, or any job printer, or any broadcaster or telecaster, or any magazine publisher, or any of the employees thereof, liable for any publication referred to in this section unless the publisher, employee, or printer has actual knowledge of the falsity thereof or has an interest either as an owner or agent in the time-share intervals so advertised.

Acts 1983, ch. 210, § 7.

Law Reviews.

An Overview of Time-Sharing and the Tennessee Time-Share Act: Are Purchasers Now Protected?, 53 Tenn. L. Rev. 779 (1986).

66-32-132. Advertising — Specific prohibitions.

No advertising for the offer or sale of time-share intervals shall:

  1. Contain any representation as to the availability of a resale program or rental program offered by or on behalf of the developer or its affiliate unless the resale program and/or rental program has been made a part of the offering and submitted to the commission;
  2. Contain an offer or inducement to purchase which purports to be limited as to quantity or restricted as to time unless the numerical quantity and/or time applicable to the offer or inducement is clearly and conspicuously disclosed;
  3. Contain any statement concerning the investment merit or profit potential of the time-share interval unless the commission has determined from evidence submitted on behalf of the developer that the representation is neither false nor misleading;
  4. Make a prediction of or imply specific or immediate increases in the price or value of the time-share intervals; nor shall a price increase of a time-share interval be announced more than sixty (60) days prior to the date that the increase will be placed into effect;
  5. Contain statements concerning the availability of time-share intervals at a particular minimum price if the number of time-share intervals available at that price comprises less than ten percent (10%) of the unsold inventory of the developer, unless the number of time-share intervals then for sale at the minimum price is set forth in the advertisement;
  6. Contain any statement that the time-share interval being offered for sale can be further divided unless a full disclosure is included as to the legal requirements for further division of the time-share interval;
  7. Contain any asterisk or other reference symbol as a means of contradicting or changing the ordinary meaning of any previously made statement in the advertisement;
  8. Misrepresent the size, nature, extent, qualities, or characteristics of the accommodations or facilities which comprise the time-share project;
  9. Misrepresent the nature or extent of any services incident to the time-share project;
  10. Misrepresent or imply that a facility or service is available for the exclusive use of purchasers or owners if a public right of access or of use of the facility or service exists;
  11. Make any misleading or deceptive representation with respect to the contents of the time-share program, the purchase contract, the purchaser's rights, privileges, benefits or obligations under the purchase contract or this part;
  12. Misrepresent the conditions under which a purchaser or owner may participate in an exchange program; or
  13. Describe any proposed or uncompleted private facilities over which the developer has no control unless the estimated date of completion is set forth and evidence has been presented to the commission that the completion and operation of the facilities are reasonably assured within the time represented in the advertisement.

Acts 1983, ch. 210, § 8.

66-32-133. Prize or gift promotional offers — Unlawful acts.

The following unfair acts or practices undertaken by, or omissions of, any person in the operation of any prize or gift promotional offer, by any means, including, but not limited to, by mail, by telephone, by advertisement or in person, for a time-share project are prohibited:

  1. Failing to clearly and conspicuously state the name and street address of the person making the offer;
  2. Representing or leading a person to believe that the person is or could be a winner if the person has not won or is not eligible to win;
  3. Representing or leading a person to believe that the person has been “selected” or is otherwise part of a select or special group when the person has not been selected or is not part of a select or special group;
  4. Representing that a person has won or could win a prize, or will receive a gift, or thing of value or has been selected, or is eligible, to win a prize, or receive a gift, or thing of value if the receipt of the prize, or gift, or thing of value is conditioned upon the person listening to or observing a sales promotional effort, making a purchase, or incurring any monetary obligation unless it is clearly and conspicuously disclosed, at the time of the initial offer, contact, or notification of the prize or gift, or thing of value that an attempt will be made to induce the consumer or person to incur a monetary obligation, including the amount of any monetary obligation;
  5. Failing to clearly and conspicuously disclose next to each prize, gift, or thing of value offered or any product offered for sale through the promotional plan the item's approximate verifiable retail value, which means the price at which the person offering the item can substantiate that a substantial number of these items have been sold at retail by another person or, in the event such substantiation is unavailable, nor more than three (3) times the amount actually paid by the sponsor or promoter for the item;
  6. Representing that the prize, gift, or thing of value offered or any product offered for sale through the promotional plan possesses particular features or benefits, if it does not, or is of a particular standard, quality, grade, or model, if it is of another;
  7. Failing to clearly and conspicuously disclose next to each prize, gift, or thing of value offered, a statement of odds, if applicable, in Arabic numerals, of receiving each item offered, and a statement, if applicable, that those offers are not exclusive to the above-named person and whether all prizes or gifts will be awarded;
  8. Making the receipt of an offered prize or gift contingent upon the consent of individual winners or recipients to allow their names to be used for promotional purposes, or failing to obtain the express written or oral consent of individual winners or recipients before their names are used for a promotional purpose in connection with the mailing to a third person;
  9. Refusing to disclose or make available, upon request, the names of the recipients of any prizes or gifts within the geographic area wherein the promotional offers were made;
    1. Failing to clearly and conspicuously disclose in any initial offer, at a minimum, the following:
      1. A general description of the types and categories of any restrictions, qualifications, or other conditions, that must be satisfied before the person is entitled to receive or use the prize, gift, or thing of value or product or service offered;
      2. The approximate total of all costs, fees, or other monetary obligations that must be satisfied before the consumer or person is entitled to receive or use the prize, gift, or thing of value or product or service offered; and
      3. That the details and an explanation of all restrictions, qualifications or other conditions of the offer shall be provided prior to the acceptance of the offer; or
    2. Failing to clearly and conspicuously state verbally, or upon request, in writing, before an offer can be accepted all restrictions, qualifications, monetary obligations, and other conditions that must be satisfied before the person is entitled to receive or use the prize, gift, or thing of value or product or service offered, including:
      1. Any deadline by which the recipient must visit the business, attend or listen to a sales presentation or otherwise respond in order to receive the prize, gift, or thing of value or product or service offered;
      2. The date or dates on or before which the prize, gift or thing of value, product or service offered will terminate or expire and, if applicable, when the prizes will be awarded;
      3. The approximate duration of any mandatory sales presentation or tour, if applicable;
      4. Any other conditions, such as a minimum or maximum age qualification, any financial qualification, or requirement that, if the recipient is married, both spouses must be present or respond in order to receive the prize, gift or thing of value or product or service offered; and
      5. All other material rules, terms, restrictions, and conditions of the offer or promotional program including, but not limited to, any promotional service, handling, shipping, delivery, freight, postage or processing fees, charges, or other extra costs for the receipt or use of the prize, gift, or thing of value or product or service offered; provided that the requirements of this subdivision (10)(B)(v) shall not be construed to require that foreign tax rates be included;
  10. Misrepresenting in any manner the rules, terms, restrictions, monetary obligation, or conditions of participation in the promotional plan or offer;
  11. Failing to award and distribute the prize, gift, or thing of value or product or service offered in accordance with the rules, terms, and conditions of the offer or promotional program as stated or disclosed in accordance with subdivisions (1)-(11); and
    1. Failing to award and distribute at least one (1) of each prize or gift of the value and type represented in the promotional program by the day and year specified in the promotion. When a promotion promises the award of a prescribed number of each prize, such number of prizes shall be awarded by the date and year specified in the promotion. For purposes of this subdivision (13)(A), distribution of cash shall be equivalent to distribution of a gift or prize, and a qualified recipient shall be allowed to choose either the gift or prize or cash in an amount equal to the cost of the gift or prize only if the gift or prize is not delivered to a qualified recipient within seventy-two (72) hours of the time the recipient would have been entitled to the gift or prize.
    2. Such choice shall be disclosed to the recipient at the time of the initial offering.

Acts 1983, ch. 210, § 9; 1991, ch. 81, §§ 1, 2; 1991, ch. 84, § 1; 1993, ch. 230, § 1.

NOTES TO DECISIONS

1. Compliance.

Timeshare developer willfully violated the Tennessee Time-share Act, T.C.A. § 66-32-101 et seq., because, when the developer's representatives promised purchasers a foosball table and unlimited owners' nights, no disclosures were made that listed the respective values of these items. Furthermore, the promise regarding unlimited owners' nights was a fraudulent and intentional misrepresentation. Overton v. Westgate Resorts, Ltd., L.P., — S.W.3d —, 2015 Tenn. App. LEXIS 45 (Tenn. Ct. App. Jan. 30, 2015), appeal denied, — S.W.3d —, 2015 Tenn. LEXIS 515 (Tenn. June 15, 2015), cert. denied, Westgate Resorts, Ltd., L.P. v. Overton, 136 S. Ct. 486 (U.S. 2015), 193 L. Ed. 2d 350,  2015 U.S. LEXIS 7049.

66-32-134. Violation of §§ 66-32-131 — 66-32-133.

Whenever the commission determines from evidence available to it that a person is violating or failing to comply with the requirements of §§ 66-32-13166-32-133, the commission may order the person to cease and desist from such violations and may take enforcement action under §§ 66-32-12166-32-126.

Acts 1983, ch. 210, § 10.

66-32-135. Construction of §§ 66-32-131 — 66-32-133 with Tennessee Consumer Protection Act.

Sections 66-32-13166-32-133 shall be in addition to those provisions in the Tennessee Consumer Protection Act, compiled in title 47, chapter 18; provided, that to the extent that any provisions of the Tennessee Consumer Protection Act are in conflict with §§ 66-32-13166-32-133, the Tennessee Consumer Protection Act shall control.

Acts 1983, ch. 210, § 11.

66-32-136. Advertising material — Engaging time-share resale broker in connection with resale of time-share interval.

  1. Any advertising material relating to the solicitation of an agreement engaging the services of a time-share resale broker in connection with the resale of a time-share interval pursuant to § 66-32-137(b) is subject to the provisions of §§ 66-32-131 — 66-32-135.
  2. “Advertising material” includes any oral or written sales pitch, promotional brochure, pamphlet, catalogue, advertisement, sign, billboard or other material to be disseminated to the public by any means relating to the solicitation of an agreement engaging the services of a time-share resale broker in connection with the resale of a time-share interval, pursuant to § 66-32-137(b), including a transcript of any standard oral sales presentation or any radio or television advertisement.
  3. No written advertising material relating to the solicitation of an agreement engaging the services of a time-share resale broker in connection with the resale of a time-share interval, pursuant to § 66-32-137(b), may be utilized by a time-share resale broker unless the advertising material includes in conspicuous type the disclosure described in § 66-32-137(b)(1).
  4. The commission has authority to enforce this section as provided in §§ 66-32-121 and 62-13-109.

Acts 1990, ch. 672, §§ 3, 5.

66-32-137. Violations — Required contents of written agreements engaging the services of a resale broker and contracts for purchase and sale.

  1. It is a violation of this part for any time-share resale broker to:
    1. Enter into any agreement with any person engaging the services of the time-share resale broker in connection with the resale of a time-share interval unless a written agreement complying in all respects with subsection (b) is first executed by the time-share resale broker and the person engaging the services of the time-share resale broker;
    2. Accept any moneys or any other thing of value from any person engaging the services of the time-share resale broker in connection with the resale of a time-share interval in advance of the closing of the resale of such time-share interval; or
    3. Utilize any form of contract or purchase and sale agreement in connection with the resale of a time-share interval unless the contract or purchase and sale agreement complies in all respects with subsection (d).
  2. In addition to all requirements of and obligations under the Tennessee Real Estate Broker License Act of 1973, compiled in title 62, chapter 13, all agreements engaging the services of a time-share resale broker in connection with the resale of a time-share interval shall contain all of the following:
    1. The following statement in conspicuous type located immediately prior to the space in the agreement reserved for the signature of the owner:

      THERE IS NO GUARANTEE THAT YOUR TIME-SHARE INTERVAL CAN BE SOLD AT ANY PARTICULAR PRICE OR WITHIN ANY PARTICULAR PERIOD OF TIME;

    2. A complete and clear disclosure of any fees, commissions, and other costs or compensation payable to or received by the time-share resale broker under the agreement, whether directly or indirectly;
    3. The term of the agreement, a statement regarding the ability of any party to extend the term of the agreement, and a description of the conditions under which the agreement may be extended and all related costs;
    4. A description of the services to be provided by the time-share resale broker under the agreement, and a description of the obligations of each party regarding a resale purchaser, including any costs to be borne and any obligations regarding notification of the managing entity and any exchange company;
    5. A statement disclosing whether the agreement grants exclusive rights to the time-share resale broker to locate a purchaser during the term of the agreement, a statement disclosing to whom and when any proceeds from a sale of the time-share interval will be disbursed, and a statement whether any party may terminate the agreement and under what conditions;
    6. A statement disclosing whether the agreement permits the time-share resale broker or any other person to make any use whatsoever of the time-share interval in question and a detailed description of any such permitted use rights, including a disclosure of to whom any rents or profits generated from such use of the time-share interval will be paid; and
    7. A statement disclosing the existence of any judgments or orders against the time-share resale broker resulting from a violation by the time-share resale broker of this part, the Tennessee Real Estate Broker License Act of 1973, or the Tennessee Consumer Protection Act of 1977, compiled in title 47, chapter 18, part 1, or resulting from consumer fraud on the part of the time-share resale broker.
  3. The person engaging the services of the time-share resale broker must receive a fully executed copy of the agreement described in subsection (b) on the day such person signs it.
  4. All forms of contract or purchase and sale agreement utilized by a time-share resale broker in connection with the sale of a time-share interval shall contain all of the following:
    1. An explanation of the form of time-share ownership being purchased and a legally sufficient description of the time-share interval being purchased;
    2. The name and address of the managing entity of the time-share plan;
      1. The following statement in conspicuous type located immediately prior to the space in the contract reserved for the signature of the purchaser:

        THE CURRENT YEAR'S ASSESSMENT FOR COMMON EXPENSES ALLOCABLE TO THE TIME-SHARE INTERVAL YOU ARE PURCHASING IS $  . THIS ASSESSMENT, WHICH MAY BE INCREASED FROM TIME TO TIME BY [insert name of entity having authority to increase assessment], IS PAYABLE IN FULL ON OR BEFORE [state payment due date(s)]. THIS ASSESSMENT [INCLUDES/DOES NOT INCLUDE] YEARLY AD VALOREM REAL ESTATE TAXES. [If ad valorem real property taxes are not included in the current year's assessment for common expenses, the following statement must be included: THE MOST RECENT ANNUAL ASSESSMENT FOR AD VALOREM REAL ESTATE TAXES FOR THE TIME-SHARE INTERVAL YOU ARE PURCHASING IS $  ]. FAILURE TO TIMELY PAY THESE ASSESSMENTS MAY RESULT IN RESTRICTION OR LOSS OF YOUR USE AND/OR OWNERSHIP RIGHTS.

      2. In making the disclosures required by this subdivision (d)(3), the time-share resale broker may rely upon information provided in writing by the managing entity of the time-share project;
    3. A complete and accurate disclosure of the terms and conditions of the purchase and closing, including the obligations of the seller and/or the purchaser for closing costs and title insurance;
    4. A statement disclosing the existence of any mandatory exchange program membership included in the time-share project; and
    5. In lieu of subdivisions (d)(1)-(5), a time-share resale broker affiliated with a time-share developer may use the public offering statement and sales contract to consummate a resale; provided, that such information includes the substance of all of subdivisions (d)(1)-(5).
  5. The commission has authority to enforce this section as provided in §§ 66-32-121 and 62-13-109.

Acts 1990, ch. 672, §§ 4, 5.

66-32-138. Delivery of required renewal documentation and fees.

Notwithstanding any other law to the contrary, all documentation and fees which are a prerequisite to the renewal of a license or registration shall be delivered to the commission no later than sixty (60) days prior to the expiration date of the license or registration.

Acts 2000, ch. 861, § 1.

66-32-139. Registration of acquisition agents — Penalties for prohibited activity and conduct — Commission's authority to promulgate rules and regulations.

  1. All acquisition agents and their representatives, as defined in § 66-32-102, shall register with the commission and furnish such information as provided by commission regulation. The application for registration shall be accompanied by a twenty-five dollar ($25.00) registration fee.
  2. The commission has the authority to assess civil penalties, or to suspend or revoke the registration of an acquisition agent, for any activity or conduct in violation of § 62-13-312 or § 66-32-121. The commission also has the authority to promulgate rules and guidelines for the training and conduct of acquisition agents.

Acts 2000, ch. 861, § 3.

Part 2
Vacation Club Act of 1995

66-32-201. Short title.

This part shall be known and may be cited as the “Tennessee Vacation Club Act of 1995.”

Acts 1995, ch. 90, § 1.

66-32-202. Legislative intent.

The purpose of this part is to recognize that the sale and promotion of vacation clubs is an emerging, dynamic segment of the international tourism industry; that this segment of the tourism industry continues to grow, both in volume of sales and in complexity and variety of product structure; and that a uniform and consistent method of regulation is necessary in order to safeguard the state's consumers and the state's economic well-being. It is the intent of the general assembly that this part be interpreted broadly in order to enhance the quality of vacation clubs offered and sold in this state and to protect consumers who purchase vacation club interests.

Acts 1995, ch. 90, § 2.

66-32-203. Application.

This part applies only to sellers of vacation club interests who offer for disposition vacation club interests to the general public in Tennessee. For purposes of this section, an offer shall be considered to be made in this state only if the offer:

  1. Originates from this state; or
  2. Is directed by the offeror into this state and is received at the place to which it is directed.

Acts 1995, ch. 90, § 3.

66-32-204. Exemptions.

This part does not apply to any of the following:

  1. An offer or disposition other than in the ordinary course of business by any holder of a purchase money lien, including any assignee thereof, who acquires a vacation club interest as a result of an owner's default with respect to the owner's purchase money financing obligations, whether such vacation club interest is acquired by foreclosure, the acceptance of a deed in lieu thereof, or other legal or equitable means;
  2. A gratuitous disposition;
  3. A disposition by devise, descent, or distribution or a disposition to an inter vivos trust;
  4. An offer or disposition of a vacation club interest by an owner other than a developer, unless such owner makes such offer and disposition in the ordinary course of its business; or
  5. An offer or disposition of a vacation club interest that is part of a duly registered vacation club pursuant to the laws of a state with the same or more stringent requirements as this state.

Acts 1995, ch. 90, § 4.

66-32-205. “Vacation club interest” defined.

“Vacation club interest” means and includes the following interests in a vacation club:

  1. A “specific time-share interest,” which is a right to use a specific accommodation or accommodations, and facilities at one (1) component site of a vacation club, for the remaining term of the vacation club in the event that the reservation system is terminated for any reason prior to the expiration of the term of the vacation club, together with use rights in the other accommodations and facilities of the vacation club created by or acquired through the reservation system; provided, that there is a one-to-one purchaser to accommodation ratio for each time-share interval, which entitles a particular owner who complies fully with the reservation system's rules and regulations to reserve, use and occupy a protected accommodation of the vacation club completely independent of any other owner's failure for reason to reserve, use, or occupy an accommodation of the vacation club; and
  2. A “nonspecific time-share interest,” which is a right to use all of the accommodations and facilities of a vacation club created by or acquired through the reservation system, but including no specific right to use any particular accommodations or facilities for the remaining term of the vacation club in the event that the reservation system is terminated for any reason prior to the expiration of the term of the vacation club; provided, that there is a one-to-one purchaser to accommodation ratio for each time-share interval, which entitles a particular owner who complies fully with the reservation system's rules and regulations to reserve, use and occupy a protected accommodation of the vacation club completely independent of any other owner's failure for reason to reserve, use, or occupy an accommodation of the vacation club.

Acts 1995, ch. 90, § 6.

66-32-206. Reservation systems.

  1. A vacation club's reservation system shall be subject to the requirements for subordination or other financial assurances set forth in this part. Prior to offering vacation club interests, a developer shall create or provide a reservation system, including all appropriate computer hardware and software which is necessary to satisfy owners' reasonable expectations concerning the use and occupancy of the vacation club's accommodations, based upon the developer's representations and the terms and conditions of the vacation club documents, and establish rules and regulations for its operation. In establishing such rules and regulations, the developer shall take into account the anticipated demand for use and occupancy of the vacation club's accommodations in view of the size and type of each accommodation, each component site location, the time of year, the projected common expenses of the vacation club from year to year, and all other relevant factors, and shall use its good faith and best efforts, based upon all evidence reasonably available to the developer under the circumstances, to maximize the collective opportunities for all of the owners of vacation club interests to use and occupy the vacation club's accommodations.
    1. The person or persons authorized by the vacation club documents to make additions or substitutions of accommodations to the vacation club, pursuant to this part, shall owe a fiduciary duty to each owner of a vacation club interest to act in the collective best interests of all such owners in connection with any such addition or substitution and to adhere to the demand balancing standard set forth above in ascertaining the desirability of any proposed addition or substitution and the anticipated impact thereof upon the practical ability of owners to reserve, use, and occupy the vacation club's accommodations.
    2. Prior to offering any vacation club interest in a vacation club, a developer shall provide to the commission satisfactory evidence of the existence of the vacation club's reservation system and shall certify to the commission that such reservation system is fully operative.
    3. Any agreement between a vacation club and a reservation system provider must state that, following a termination of the provider's contract by either party, the reservation system provider will, in the vacation club managing entity's sole discretion, either:
      1. Permit the vacation club to utilize the reservation system for a transition period of up to nine (9) months in the same manner and at the same cost as the vacation club utilized the reservation system prior to the termination in order to afford the vacation club managing entity a reasonable opportunity to obtain a new reservation system and arrange for the transfer of all relevant data from the old reservation system to the new reservation system as described in subdivision (b)(3)(B); or
      2. Promptly transfer to the vacation club managing entity all relevant data contained in the reservation system, including but not limited to the names, addresses, and reservation status of accommodations at the vacation club's component sites, the names and addresses of all owners, all outstanding confirmed reservations and reservation requests, and such other owner and component site records and information as is sufficient, in the reasonable discretion of the vacation club managing entity, to permit the uninterrupted operation and administration of the vacation club for the collective benefit of owners of vacation club interests therein. All reasonable costs incurred by the reservation system provider in effecting such transfer shall be reimbursed thereto and shall constitute common expenses of the vacation club.

Acts 1995, ch. 90, § 8.

66-32-207. Developers subject to commission — Prerequisites to vacation club offering.

  1. A developer of a vacation club interest shall in all respects be subject to the authority of the commission and any rules and regulations promulgated by the commission.
  2. Unless specifically exempted, a developer of a vacation club interest may not offer or dispose of a vacation club interest unless it is registered with the commission under § 66-32-123, and pays any fee required by § 66-32-123.
  3. Prior to offering any vacation club intervals in a vacation club, a developer shall provide the commission:
    1. Satisfactory evidence of the existence of the time-share intervals that are part of the vacation club;
    2. The marketing plan for the vacation club;
    3. Proof of ownership or a leasehold estate of the time-share intervals that are part of the vacation club; and
    4. Satisfactory proof of compliance with this part, including, but not limited to, a public offering statement, escrow of deposits, cancellation rights, advertising and promotional offers.

Acts 1995, ch. 90, § 9.

Part 3
Membership Camping Act

66-32-301. Short title.

This part shall be known and may be cited as the “Membership Camping Act.”

Acts 1985, ch. 303, § 1; T.C.A., § 47-18-401.

Compiler's Notes. This part was transferred from title 47, ch. 18, part 4 in 1995.

Cross-References. Time-share programs, title 66, ch. 32, part 1.

66-32-302. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Advertisement” means any written, printed, verbal, or visual offer;
  2. “Blanket encumbrance” means any mortgage, deed of trust, option to purchase, vendor's lien or interest under a contract or agreement of sale, or other material financing lien or encumbrance granted by the membership camping operator, which secures or evidences the obligation to pay money or to sell or convey any campgrounds located in this state made available to purchasers by the membership camping operator or any portion thereof and which authorizes, permits, or requires the foreclosure or other disposition of the campground affected;
  3. “Campground” means real property owned or operated by a membership camping operator which is available for camping by purchasers of membership camping contracts;
  4. “Camping site” means a space designed and promoted for the purpose of locating a trailer, tent, tent trailer, pickup camper, or other similar device used for camping;
  5. “Facilities” means the following amenities provided and located on property owned or operated by a membership camping operator: camping sites, rental trailers or cabins, swimming pools, sport courts, recreation buildings, and trading posts or grocery stores;
  6. “Holder” includes the seller who acquires a membership camping contract or, if the contract is purchased, a financing agency or other assignee that purchases the contract;
  7. “Membership camping contract” means an agreement offered or sold within this state evidencing a purchaser's title to, interest in, right or license to use, for more than thirty (30) days, the campgrounds and facilities of a membership camping operator and includes a membership which provides for this use;
  8. “Membership camping operator” means any enterprise, other than one that is tax exempt under § 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. § 501(c)(3)), as amended, that solicits membership camping contracts paid for by a fee or periodic payments and has as one (1) of its purposes camping or outdoor recreation including use of camping sites primarily by purchasers;
  9. “Nondisturbance agreement” means an instrument by which the holder of a blanket encumbrance agrees that:
    1. Its rights in any campground made available to purchasers by the membership camping operator shall be subordinate to the rights of purchasers from and after the recordation of the instrument;
    2. The holder and all successors and assignees, and any person who acquires the campground through foreclosure or by deed in lieu of foreclosure of such blanket encumbrance, shall take the campground subject to the rights of purchasers; and
    3. The holder or any successor acquiring the campground through the blanket encumbrance shall not use or cause the campground to be used in a manner which would materially prevent purchasers from using or occupying the campground in a manner contemplated by the purchasers' membership camping contracts; provided, that the holder shall have no obligation or liability to assume the responsibilities or obligations of the membership camping operator under membership camping contracts;
  10. “Offer” means any solicitation reasonably designed to result in the entering into of a membership camping contract;
  11. “Person” means any individual, corporation, partnership, company, and any other form of multiple organization for carrying on foreign or domestic business, other than a government or a subdivision of a government;
  12. “Purchaser” means a person who enters into a membership camping contract and obtains the right to use the camping or outdoor facilities of a membership camping operator;
  13. “Reciprocal program” means any arrangement allowing purchasers to use camping sites, facilities, or other properties owned or operated by any person other than the membership camping operator with whom the purchaser has entered into a membership camping contract;
  14. “Sale” or “sell” means entering into, or other disposition, of a membership camping contract for value, but the term “value” does not include a fee to offset the reasonable costs of transfer of a membership camping contract; and
  15. “Seller” means a membership camping operator.

Acts 1985, ch. 303, § 2; T.C.A., § 47-18-402.

66-32-303. Disclosures to purchasers.

A membership camping operator shall disclose the following information to a purchaser before the purchaser signs a membership camping contract or gives any money or thing of value for the purchase of a membership camping contract. The disclosures shall be delivered to the purchaser prior to the time the contract is signed and may be presented in any format selected by the membership camping operator. The disclosures may be included in or as part of the contract at the option of the membership camping operator and shall clearly communicate all of the following as of a date no more than one (1) year prior to the date of purchase:

  1. The name and address of the principal place of business of the membership camping operator and any material affiliate of the membership camping operator;
  2. A brief description of the membership camping operator's experience in the membership camping business, including the number of years the membership camping operator has been in the membership camping business;
  3. A brief description of the nature of the purchaser's right or license to use the membership camping operator's campground or facilities;
  4. The location of each of the membership camping operator's campgrounds and a brief description of the significant facilities at each campground then available for use by purchasers and those which are represented to purchasers as being planned, together with a brief description of any facilities that are or will be available to nonpurchasers or nonmembers.
    1. “Significant facilities” includes, but is not limited to, each of the following: the number of campsites in each park; the number of campsites in each park with full or partial hookups; swimming pools; tennis courts; recreation buildings; restrooms and showers; laundry rooms; trading posts; or grocery stores; and
    2. “Partial hookups” means those hookups with at least one (1) of the following connections: electricity, water, or sewer connections;
  5. A brief description of the membership camping operator's ownership of, or other right to use, the campgrounds represented to be available for use by purchasers, together with the duration of any material lease, license, franchise, or reciprocal agreement entitling the membership camping operator to use the campground, and any material provisions of any agreements which restrict a purchaser's use of the campground;
  6. A summary or copy of the rules, restrictions, or covenants regulating the purchaser's use of the membership camping operator's campgrounds, including a statement of whether and how the rules, restrictions, or covenants may be changed;
  7. A description of any restraints on the transfer of the membership camping contract;
  8. A brief description of the policies relating to the availability of camping sites and whether reservations are required;
  9. A brief description of any grounds for forfeiture of a purchaser's membership camping contract;
  10. A brief description of all payments of a purchaser under a membership camping contract, including initial fees and any further fees, charges, or assessments, together with any provisions for changing the payments;
  11. A copy of the membership camping contract signed by the purchaser;
  12. A statement of the purchaser's right to cancel the membership camping contract as provided in § 66-32-304;
  13. A description of the manner in which the membership camping operator has complied or proposes to comply with § 66-32-307;
  14. A description of any liens, defects, or encumbrances on or affecting the title to the membership contracts or to the campgrounds;
  15. A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement;
  16. The projected common expense liability, if any, by category of expenditures for the members;
  17. Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee;
  18. A description of the insurance coverage, or a statement that there is no insurance coverage, provided for the benefit of members; and
  19. A statement of the means, including all financial arrangements, by which the developer proposes to assure the completion of all promised improvements.

Acts 1985, ch. 303, § 3; T.C.A., § 47-18-403.

66-32-304. Cancellation of contracts.

  1. Any membership camping contract may be cancelled at the option of the purchaser by personally delivering or sending written notice of the cancellation to the membership camping operator at the address shown in the contract. The notice must be posted not later than twelve o'clock midnight (12:00) of the fifteenth calendar day following the day on which the membership camping contract was signed, if the purchaser did not make an on-site inspection of the campground, or the tenth calendar day following the day on which the membership camping contract was signed, if the purchaser did make an on-site inspection of the campground.
  2. The purchaser's cancellation right shall be set forth in bold type in the membership camping contract in close proximity to the purchaser's signature line.
  3. Within thirty (30) days after the membership camping operator receives a notice of cancellation, and provided that the purchaser's check, if any, has been cleared by the purchaser's bank, the membership camping operator shall refund to the purchaser any deposit, down payment or other payment therefor.

Acts 1985, ch. 303, § 4; T.C.A., § 47-18-404.

Cross-References. Waiver of provisions of section void, § 66-32-312.

66-32-305. Inducements — Disclosures.

  1. It is unlawful for any person by any means, as part of an advertising program, to offer any item of value as an inducement to the recipient to visit a membership camping operator's campground, attend a sales presentation, or contact a salesperson, unless the person clearly discloses in writing in the offer, in readily understandable language, each of the following:
    1. The name and street address of the membership camping operator;
    2. A general statement that the advertising program is made by a membership camping operator and the purpose of any requested visit, including, but not limited to, the intent to offer a sales presentation, and that an attempt will be made to induce the person to incur a monetary obligation, including the amount of any monetary obligation;
    3. A statement of the odds, in Arabic numerals, of receiving each item offered, plus a statement, in Arabic numerals, of the number of offers on which those odds are based, and a statement, if applicable, that those offers are not exclusive to the property within named;
    4. The approximate verifiable retail value of each item offered, which means the price at which the person offering the item can substantiate that a substantial number of these items have been sold at retail by another person or, in the event such substantiation is unavailable, no more than three (3) times the amount actually paid by the sponsor or promoter for the item and a statement that the recipient shall be allowed to choose either the item offered or cash in an amount equal to the retail value of the item, as such value is represented within the written offer; and
    5. All restrictions, qualifications, and other conditions that must be satisfied before the recipient is entitled to receive the item, including:
      1. Any deadline by which the recipient must visit the campground, attend the sales presentation, or respond in order to receive the item;
      2. The approximate duration of any normal sales presentation and tour;
      3. Any other conditions, such as a minimum age qualification, a financial qualification, or a requirement that if the recipient is married both husband and wife must be present in order to receive the item; and
      4. All other materials, rules, terms, and conditions of the offer or program.
  2. It is unlawful to make receipt of an offered prize contingent upon consent by the individual winners to allow their names to be used for promotional purposes.
  3. It is unlawful to use the names of individual winners for a promotional purpose in connection with a mailing to a third person before obtaining their express written or oral consent to such use.
  4. It is unlawful for any person making an offer subject to subsection (a), or any employee or agent of the person, to offer any item if the person knows or has reason to know that the offered item will not be available in a sufficient quantity based on the reasonably anticipated response to the offer.
  5. It is unlawful for any person making an offer subject to subsection (a), or any employee or agent of the person, to fail to provide any offered item or to fail to provide cash, if chosen by the recipient, in an amount equal to the retail value of the item, as such value is represented within the written offer, which any recipient who has responded to the offer is entitled to receive. The recipient shall be allowed to choose either the item offered or the cash.
    1. If the person making an offer subject to subsection (a) is unable to provide an offered item because of limitations of supply, quantity, or quality not reasonably foreseeable or controllable by the person making the offer and the recipient does not choose to accept cash in an amount equal to the retail value of the item, as such value is represented within the written offer, the person making the offer shall inform the recipient of the recipient's right to receive a rain check for the item offered, or shall inform the recipient of the recipient's right to at least one (1) of the following additional options:
      1. The person making the offer will provide a like item of equivalent or greater verifiable retail value or a rain check for the item. This option must be offered if the offered item is not reasonably available;
      2. The person making the offer will provide a substitute item of equivalent or greater verifiable retail value.
    2. If a rain check is provided, the person making an offer subject to subsection (a) shall, within a reasonable time, and in no event more than one hundred twenty (120) days after the raincheck is provided, deliver the agreed item to the recipient's address without additional cost or obligation to the recipient, unless the item for which the rain check is provided remains unavailable because of limitations of supply, quantity, or quality not reasonably foreseeable or controllable by the person making the offer. If the item is unavailable for these reasons, the person shall, not more than thirty (30) days after the expiration of the one-hundred-twenty-day period, deliver a like item of equal or greater value. The recipient has thirty (30) days from receipt of the delivered item to return the item and request cash in an amount equal to the retail value as represented within the written offer or the retail value represented of any substitute item offered, whichever is greater. The person making the offer shall provide payment within ten (10) days from return of the item.
  6. On the request of a recipient who has received or claims a right to receive any offered item, the person making an offer subject to subsection (a) shall show the recipient sufficient evidence verifying that the item provided matches the item randomly or otherwise selected for distribution to that recipient.
  7. It is unlawful for any person making an offer subject to subsection (a), or any employee or agent of the person, to:
    1. Misrepresent the size, quantity, or identity of any prize, gift, money, or other item of value offered;
    2. Misrepresent in any material manner the odds of receiving any particular gift, prize, amount of money, or other item of value;
    3. Label any offer a “notice of termination” or “notice of cancellation”;
    4. Misrepresent, through omission or in any other material manner, the offer or program;
    5. Represent or lead a person to believe that the person is or could be a winner if the person had not won or is not eligible to win; or
    6. Represent or lead a person to believe that the person has been “selected” or is otherwise part of a select or special group when the person has not been selected or is not part of a select or special group.

Acts 1985, ch. 303, § 5; 1991, ch. 82, §§ 1-5; 1991, ch. 83, §§ 1-4; T.C.A., § 47-18-405.

66-32-306. Purchasers' remedies.

  1. A purchaser's remedy for errors in or omissions from the membership camping contract and related materials delivered to the purchaser at the time of sale or any of the disclosures required in § 66-32-305 is limited to a right of rescission and refund of the purchase price paid by the purchaser. This limitation does not apply to errors or omissions from the contract or disclosures or other requirements of this part which are a part of a scheme to willfully misstate or omit the information required.
  2. Reasonable attorney fees shall be awarded to the prevailing party in any action under this part.

Acts 1985, ch. 303, § 6; T.C.A., § 47-18-406.

66-32-307. Prerequisites to selling membership camping contracts.

With respect to any campground in this state acquired and put into operation by a membership camping operator after July 1, 1985, the membership camping operator shall not sell membership camping contracts in this state granting the right to use such campground until one (1) of the following requirements has been satisfied:

  1. Each person holding an interest in a blanket encumbrance shall have executed and delivered a nondisturbance agreement and such agreement shall have been recorded in the real estate records of the county in which the campground is located;
  2. The financial institution providing the major hypothecation loan to the membership camping operator, the “hypothecation lender”, shall have a lien on, or security interest in, the membership camping operator's interest in the campground, and the hypothecation lender shall have executed and delivered a nondisturbance agreement and recorded such agreement in the real estate records of the county in which the campground is located. In addition, each person holding an interest in a blanket encumbrance superior to the interest held by the hypothecation lender shall have executed, delivered, and recorded an instrument stating that such person shall give the hypothecation lender notice of, and at least thirty (30) days to cure, any default under the blanket encumbrance before such person commences any foreclosure action affecting the campground. For the purposes of this provision, a major hypothecation loan to a membership camping operator is a loan or line of credit secured by substantially all of the contracts receivable arising from the membership camping operator's sale of membership camping contracts;
  3. In the event the membership camping operator is selling real estate to purchasers, each person holding an interest in a blanket encumbrance shall have executed and delivered an agreement providing for periodic releases from the blanket encumbrance as real estate sales fees are paid on the debt. However, in such case, the membership camping operator shall have obtained an irrevocable letter of credit or surety bonds in favor of the holder of the blanket encumbrance insuring the completion of the roads and structural amenities which are promised for the project now being developed; or
  4. The membership campground operator whose project is subject to an underlying blanket lien or encumbrance may obtain the agreement of the lienholder to take the project, in the event of default by the developer, subject to the rights of the nondefaulting purchasers by posting a bond equal to fifty percent (50%) of the amount owed to the lienholder, making an assignment of receivables equal to one hundred twenty-five percent (125%) of the principal amounts due to the lienholder, pledging collateral security equal to one hundred percent (100%) of the amount owed to the lienholder or entering into any other financing plan or escrow agreement acceptable to the lienholder.

Acts 1985, ch. 303, § 7; T.C.A., § 47-18-407.

66-32-308. Violations — Penalties.

  1. Any person who willfully violates this part commits a misdemeanor. It is a misdemeanor for any person in connection with the offer or sale of any camping club contracts willfully to:
    1. Make any untrue or misleading statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading;
    2. Employ any device, scheme, or artifice to defraud; or
    3. Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
  2. No indictment or information may be returned under this part more than two (2) years after the alleged violation.

Acts 1985, ch. 303, § 8; T.C.A., § 47-18-408.

Compiler's Notes. The misdemeanor provisions in this section may have been affected by the Criminal Sentencing Reform Act of 1989. See §§ 39-11-114, 40-35-110, 40-35-111.

Cross-References. Penalty for misdemeanor, §§ 39-11-114, 40-35-111.

66-32-309. Exemptions.

This part shall not apply to:

  1. Mobile home parks or camping or recreational trailer parks which are open to the general public and do not solicit purchases of membership camping contracts, but rather contain only camping sites rented for per use fee;
  2. Any person who engages in the business of arranging and selling reciprocal programs and who does not own campgrounds and facilities; or
  3. Sales of time-share intervals in a time-share project which is registered under the Tennessee Time-Share Act, compiled in part 1 of this chapter.

Acts 1985, ch. 303, § 9; T.C.A., § 47-18-409.

66-32-310. Violation of Tennessee Consumer Protection Act.

A violation of this part shall constitute a violation of the Tennessee Consumer Protection Act, compiled in title 47, chapter 18, part 1. For the purpose of application of the Tennessee Consumer Protection Act, any violation of this part shall be construed to constitute an unfair or deceptive act or practice affecting the conduct of any trade or commerce.

Acts 1985, ch. 303, § 10; T.C.A., § 47-18-410.

66-32-311. Retail Installment Sales Act applicable.

Membership camping contracts covered by this part shall be subject to the Tennessee Retail Installment Sales Act, compiled in title 47, chapter 11.

Acts 1985, ch. 303, § 11; T.C.A., § 47-18-411.

66-32-312. Void agreement — Waiver of cancellation provisions.

Any contractual agreement containing a waiver of § 66-32-304 is contrary to public policy and is void and unenforceable.

Acts 1990, ch. 804, § 1; T.C.A., § 47-18-412.

Chapter 33
Stratified Fee Estate [Repealed]

66-33-101 — 66-33-105. [Repealed.]

Compiler's Notes. Former chapter 33, §§ 66-33-10166-33-105 (Acts 1988, ch. 678, §§ 1-5), concerning stratified fee estates, was repealed by Acts 1988, ch. 678, § 7.

Chapter 34
Prompt Pay Act

Part 1
General Provisions

66-34-101. Short title.

This chapter shall be known and may be cited as the “Prompt Pay Act of 1991.”

Acts 1991, ch. 45, § 1.

NOTES TO DECISIONS

1. Attorney's Fees.

In an action over the parties'  duties under a construction contract, an award of attorney fees to the construction corporation was appropriate under the Prompt Pay Act of 1991, T.C.A. §§ 66-34-101 et seq., because there was insufficient evidence in the record to overturn the trial court's conclusion that the development corporation acted in bad faith. Inherent in the trial court's decision that the development corporation willfully attempted to take advantage of the construction corporation was a determination that a senior vice-president of the development corporation was not credible on the issue; further, the record showed that the development corporation intentionally withheld approximately $60,000 for work and materials that the construction corporation had already provided, T.C.A. § 66-34-202(a). Madden Phillips Constr. v. Ggat Dev. Corp., 315 S.W.3d 800, 2009 Tenn. App. LEXIS 645 (Tenn. Ct. App. Sept. 25, 2009), appeal denied, Madden Phillips Constr., Inc. v. GGAT Dev. Corp., — S.W.3d —, 2010 Tenn. LEXIS 291 (Tenn. Mar. 15, 2010).

66-34-102. Chapter definitions.

As used in this chapter, unless the context or subject matter indicates another meaning, the words and phrases defined in § 66-11-101 have the same meaning as set out in that section and are incorporated in this chapter by reference.

Acts 1991, ch. 45, § 1.

66-34-103. Withholding of retainage — Violations — Penalties.

  1. All construction contracts on any project in this state, both public and private, may provide for the withholding of retainage; provided, however, that the retainage amount may not exceed five percent (5%) of the amount of the contract.
  2. The owner, whether public or private, shall release and pay all retainages for work completed pursuant to the terms of any contract to the prime contractor within ninety (90) days after completion of the work or within ninety (90) days after substantial completion of the project for work completed, whichever occurs first. As used in this subsection (b), “work completed” means the completion of the scope of the work and all terms and conditions covered by the contract under which the retainage is being held. The prime contractor shall pay all retainages due any remote contractor within ten (10) days after receipt of the retainages from the owner. Any remote contractor receiving the retainage from the prime contractor shall pay to any lower-tier remote contractor all retainages due the lower-tier remote contractor within ten (10) days after receipt of the retainages.
  3. Any default in the making of the payments is subject to those remedies provided in this part.
  4. If an owner or prime contractor withholds retainage that is for the use and benefit of the prime contractor or its remote contractors pursuant to § 66-34-104(a) and (b), then neither the prime contractor nor any of its remote contractors are required to deposit additional retained funds into an escrow account in accordance with § 66-34-104(a) and (b).
    1. It is an offense for a person, firm, or corporation to fail to comply with subsection (a) or (b) or § 66-34-104(a).
      1. A violation of this subsection (e) is a Class A misdemeanor, subject to a fine only of three thousand dollars ($3,000).
      2. Each day a person, firm, or corporation fails to comply with subsection (a) or (b) or § 66-34-104(a) is a separate violation of this subsection (e).
      3. Until the violation of this subsection (e) is remediated by compliance, the punishment for each violation is consecutive to all other violations.
    2. In addition to the fine imposed pursuant to subdivisions (e)(2)(A) and (B), the court shall order restitution be made to the owner of the retained funds. In determining the appropriate amount of restitution, the formula stated in § 40-35-304 must be used.
    3. This subsection (e) does not apply to the state, any department, board, or agency thereof, including the University of Tennessee, all counties and municipalities, and all departments, boards, or agencies thereof, including all school and education boards, and any other subdivision of the state.

Acts 2007, ch. 201, § 3; 2008, ch. 804, § 3; 2012, ch. 609, § 1; 2020, ch. 749, § 16.

Compiler's Notes. Acts 2007, ch. 201, § 7 provided that the act, which enacted this section, shall apply to all construction contracts to which the act applies entered into on or after July 1, 2007.

Acts 2008, ch. 804, § 4 provided that the act, which added (d) and (e), shall apply to all construction contracts to which the act applies entered into on or after July 1, 2008.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment, in (b), substituted “‘work completed’ means” for “work completed shall be construed to mean”, “remote contractor” for “subcontractor”  twice, and “lower-tier remote contractor” for “subsubcontractor or material supplier” twice; substituted “is” for “shall be” in (c) and (e)(2)(C); in (d), substituted “If” for “In the event that”, substituted “remote contractors” for “subcontractors” twice, and inserted “then”; and added (e)(4).

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Penalty for Class A misdemeanor, § 40-35-111.

Attorney General Opinions. Preemption of T.C.A. § 66-34-103(a) by § 221(d)(4) of the National Housing Act, codified in 12 U.S.C. § 1715l(d)(4), OAG 09-143, 2009 Tenn. AG LEXIS 179 (7/31/2009).

NOTES TO DECISIONS

1. Applicability.

Owner violated the Prompt Payment Act because the owner did not pay a contractor a retainage from the contractor's contractual compensation by a statutory deadline. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

2. Penalty.

Contractor was not entitled to a statutory penalty for an owner's Prompt Payment Act violation because the owner did not have a private right to recover this criminal penalty, as the statutory scheme provided other, civil, remedies. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

66-34-104. Retention of portion of contract price in escrow — Applicability — Mandatory compliance.

  1. Whenever, in any contract for the improvement of real property, a certain amount or percentage of the contract price is retained, that retained amount must be deposited in a separate, interest-bearing, escrow account with a third party which must be established upon the withholding of any retainage.
  2. As of the time of the withholding of the retained funds, the funds become the sole and separate property of the prime contractor or remote contractor to whom they are owed, subject to the rights of the person withholding the retainage in the event the prime contractor or remote contractor otherwise entitled to the funds defaults on or does not complete its contract.
  3. If the party withholding the retained funds fails to deposit the funds into an escrow account as provided in this section, then the party shall pay the owner of the retained funds an additional three hundred dollars ($300) per day as damages, not as a penalty, for each and every day that the retained funds are not deposited into an escrow account. Damages accrue from the date retained funds were first withheld and continue to accrue until placed into a separate, interest-bearing escrow account or otherwise paid.
  4. The party with the responsibility for depositing the retained amount in a separate, interest-bearing escrow account with a third party has the affirmative duty to provide written notice that the party has complied with this section to any prime contractor upon withholding the amount of retained funds from each and every application for payment, including:
    1. Identification of the name of the financial institution with which the escrow account has been established;
    2. Account number; and
    3. Amount of retained funds that are deposited in the escrow account with the third party.
  5. Upon satisfactory completion of the contract, to be evidenced by a written release by the owner, prime contractor, or remote contractor owing the retainage, all funds accumulated in the escrow account together with all interest on the account must be paid immediately to the prime contractor or remote contractor to whom the funds and interest are owed.
  6. If the owner, prime contractor, or remote contractor, as applicable, fails or refuses to execute the release provided for in subsection (e), then the prime contractor or remote contractor, as applicable, may seek equitable relief, including injunctive relief, as provided in § 66-34-602, against the owner, prime contractor, or remote contractor. Relief may not be sought against the person holding the retainage as an escrow agent, and that person bears no liability for the nonpayment of the retainage; however, a court may issue an order to the person holding retainage to pay any sums held in trust pursuant to § 66-34-205. The person paying the sums pursuant to a court order bears no liability to the owner, prime contractor, or remote contractor for the payment. All other claims, demands, disputes, controversies, and differences that may arise between the owner, prime contractor, or prime contractors, and remote contractors may be, upon written agreement of all parties concerned, settled by arbitration conducted pursuant to the Uniform Arbitration Act, compiled in title 29, chapter 5, part 3, or the Federal Arbitration Act (9 U.S.C. § 1 et seq.), as may be applicable.
  7. Subsections (c), (d), and (j) do not apply to the state and any department, board, or agency thereof, including the University of Tennessee; counties and municipalities, and all departments, boards, or agencies thereof, including all school and education boards; and any other subdivision of the state.
  8. This section applies to all prime contracts and all subcontracts thereunder for the improvement of real property when the contract amount of the prime contract is five hundred thousand dollars ($500,000) or greater, notwithstanding the amount of the subcontracts.
  9. Compliance with this section is mandatory, and shall not be waived by contract.
  10. Failure to deposit the retained funds into an escrow account as provided in this section, within seven (7) days of receipt of written notice regarding the failure, is a Class A misdemeanor.

Acts 1975, ch. 345, §§ 1-4; T.C.A., §§ 64-1148 — 64-1151; Acts 1985, ch. 340, §§ 1, 2; 1986, ch. 551, § 9; 2007, ch. 189, § 43; 2007, ch. 201, §§ 1, 2; T.C.A. § 66-11-144; Acts 2008, ch. 804, §§ 1, 2; 2010, ch. 875, §§ 1, 2; 2012, ch. 609, §§ 2-5; 2020, ch. 749, § 17.

Compiler's Notes. Former § 66-11-144 was transferred to this section by Acts 2008, ch. 805, § 2, effective July 1, 2008.

Acts 2007, ch. 201, § 7 provided that the act shall apply to all construction contracts to which the act applies entered into on or after July 1, 2007.

Acts 2007, ch. 201, § 1, purported to amend subsection (a) with the same amendments enacted by Acts 2007, ch. 189, § 43; therefore, the amendment by ch. 201 was not given effect.

Acts 2008, ch. 804, § 4 provided that the act shall apply to all construction contracts to which the act applies entered into on or after July 1, 2008.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment rewrote (c) which read: “In the event that the party withholding the retained funds fails to deposit the funds into an escrow account as provided herein, such party shall be responsible for paying the owner of the retained funds an additional three hundred dollar ($300) penalty per day for each and every day that such retained funds are not deposited into such escrow account.”; in (d), substituted “that the party has complied” for “that it has complied” and deleted “the requirements of” preceding “this section”; substituted “with which” for “with whom” in (d)(1); substituted "owner, prime contractor, or remote contractor" for "owner or prime contractor" in (e); rewrote (f), deleted former (g), and rewrote former (h),  redesignated as present (g), which read:

“(f)  In the event the owner or prime contractor, as applicable, fails or refuses to execute the release provided for in subsection (c), then the prime contractor or remote contractor, as applicable, may seek any remedy in a court of proper jurisdiction and the person holding the fund as escrow agent shall bear no liability for the nonpayment of the fund to the prime contractor or remote contractor; provided, however, that all claims, demands, disputes, controversies, and differences that may arise between the owner, prime contractor or prime contractors, and remote contractor or remote contractors regarding the funds may be, upon written agreement of all parties concerned, settled by arbitration conducted pursuant to the Tennessee Uniform Arbitration Act, compiled in title 4, chapter 5, part 3, or the Federal Arbitration Act (9 U.S.C. § 1, et seq.), as may be applicable.

“(g) In contracts to which the state or any department, board or agency of the state, including the University of Tennessee, is a party, interest shall be paid on the retained amounts at the same rate interest is paid on the funds of local governments participating in the local government investment pool established pursuant to § 9-4-704, for the contract period.

“(h)  This section shall be applicable to the state, any department, board or agency of the state, including the University of Tennessee, and all counties and municipalities and all departments, boards or agencies of the counties and municipalities, including all school and education boards, and any other subdivision of the state.”; redesignated former (i) – (k) as present (h) – (k); and in present (j), substituted “in this section” for “herein” and “seven (7) days of” for “seven (7) days'”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Cross-References. Penalty for Class A misdemeanor, § 40-35-111.

Public contracts, withdrawal of retained funds, § 12-4-108.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 8-710.

Law Reviews.

Survey of Tennessee Property Law, VII. Registration of Instruments (Toxey H. Sewell), 46 Tenn. L. Rev. 160, 193 (1978).

NOTES TO DECISIONS

1. Application to Sovereign.

Since there is no express reference to the sovereign in former T.C.A. § 66-11-144 [transferred to § 66-34-104], there is a legally imposed inference of the noninclusion of the sovereign in its application. Harrison Constr. Co. v. Gibson County Bd. of Education, 642 S.W.2d 148, 1982 Tenn. App. LEXIS 401 (Tenn. Ct. App. 1982).

2. Construction.

Where a subcontractor for plumbing knew it was a subcontractor to a general contractor under contract to a governmental entity, and the general contractor, pursuant to contract, withheld retainage for work done on the subcontract, T.C.A. § 12-4-108 and not former T.C.A. § 66-11-144 [transferred to § 66-34-104] was applicable, and the contractor and not the subcontractor was entitled to interest on the retainage held. ABC Plumbing & Heating, Inc. v. Dick Corp., 684 S.W.2d 84, 1985 Tenn. LEXIS 467 (Tenn. 1985).

Owner violated the Prompt Payment Act because the owner did not pay a contractor a retainage from the contractor's contractual compensation by a statutory deadline. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

Even though appellant's contract with appellee was the basis for its retainage claim, the contract was not the basis for its claim for $ 300-per-day damages under the statute, which described its relief as a penalty; the Prompt Payment Act was the basis for appellant's claim, and thus the one-year statute of limitations period applicable to statutory penalties governed this claim. Snake Steel, Inc. v. Holladay Constr. Grp., LLC, — S.W.3d —, 2020 Tenn. App. LEXIS 23 (Tenn. Ct. App. Jan. 22, 2020).

Subcontractor that has retainage withheld does not have the statutory right to information concerning the escrow account that the prime contractor has. Snake Steel, Inc. v. Holladay Constr. Grp., LLC, — S.W.3d —, 2020 Tenn. App. LEXIS 23 (Tenn. Ct. App. Jan. 22, 2020).

Discovery rule should apply to Prompt Payment Act claims for the $ 300-per-day penalty allowed by statute, to prevent the inequity that would result from a strict application of the one-year statute of limitations at a time when injury is unknown and unknowable. Snake Steel, Inc. v. Holladay Constr. Grp., LLC, — S.W.3d —, 2020 Tenn. App. LEXIS 23 (Tenn. Ct. App. Jan. 22, 2020).

With respect to a financing contract between a bank and the owner of an office building, the bank was not subject to the provisions of former T.C.A. § 66-11-144(a) (now T.C.A. § 66-34-104), and therefore was not subject to the public policy embodied in the statute, because the bank was not an “owner or contractor” governed by the statute. Although the bank had a lien on the real property, such interests were not among those real property interests “which may be sold under process.” Western Surety Company v. Regions Bank (In re McKenzie Fin. Ctr. LLC), — B.R. —, 2010 Bankr. LEXIS 3981 (Bankr. E.D. Tenn. Nov. 9, 2010), aff'd, Western Surety Co. v. Regions Bank (In re McKenzie Fin. Ctr., LLC), — F. Supp. 2d —, 2011 U.S. Dist. LEXIS 89679 (E.D. Tenn. Aug. 11, 2011).

3. Common Law.

Former T.C.A. § 66-11-144 [transferred to § 66-34-104] changes the common law rule that the contractor can set off its debt for the retainage against any debt the subcontractor owes it. In re Paul Pack Steel Erection, Co., 126 B.R. 310, 1991 Bankr. LEXIS 550 (Bankr. E.D. Tenn. 1991).

Because the contract price was not $500,000 or more, former T.C.A. § 66-11-144 [transferred to § 66-34-104] did not apply and the common-law rule controlled, allowing the set-off. In re Paul Pack Steel Erection, Co., 126 B.R. 310, 1991 Bankr. LEXIS 550 (Bankr. E.D. Tenn. 1991).

4. Interest.

Interest is to be determined by the compounding of interest on the amount retained rather than being solely the actual interest earned on the retainage. Rentenbach Eng'g Co. v. General Realty Ltd., 707 S.W.2d 524, 1985 Tenn. App. LEXIS 3349 (Tenn. Ct. App. 1985).

5. Set-off and Recoupment.

Under a simple retainage agreement and former T.C.A. § 66-11-144(b) [transferred to § 66-34-104] the traditional rules of set-off and recoupment will not apply because the owner's debt will already have been paid and the escrow deposit will be the property of the contractor to whom the debt was owed. In re James, 78 B.R. 159, 1987 Bankr. LEXIS 1520 (Bankr. E.D. Tenn. 1987).

6. Status of Funds.

Retained and escrowed funds are the contractor's property and are also subject to the owner's lien to secure performance of the contract; performance may include payment to the contractor's subcontractors and suppliers, but this does not make the escrow account a trust for the benefit of the subcontractors and suppliers. In re James, 78 B.R. 159, 1987 Bankr. LEXIS 1520 (Bankr. E.D. Tenn. 1987).

7. Contractor's Right to Hold Escrow Deposit.

The contractor's right to hold the escrow deposit until the subcontractor has completed the subcontract is similar to a security interest in the escrow deposit to secure the subcontractor's performance. This security interest or lien, however, is not governed by Article 9 of the Uniform Commercial Code, compiled in title 47, ch. 9. In re Paul Pack Steel Erection, Co., 126 B.R. 310, 1991 Bankr. LEXIS 550 (Bankr. E.D. Tenn. 1991).

8. Arbitration of Disputes Not Available.

Contractor's claim for payment of a retainage under a construction contract could not be pursued through arbitration, but by litigation only. Reagan v. Higgins, 88 S.W.3d 173, 2002 Tenn. App. LEXIS 159 (Tenn. Ct. App. 2002).

9. Attorney's Fees And Penalties.

Chancery court properly granted summary judgment to a general contractor on the subcontractor's claims for fraud and punitive damages and awarded a judgment to the subcontractor on its breach of contract claim because, even if the contractor intentionally misrepresented the scope of the work, the subcontractor did not rely on the misrepresentation, both parties were mistaken about the contents or effect of the subcontract, the evidence did not establish egregious conduct by the contractor, the contractor breached the subcontract by failing to pay an application, and the subcontractor was not entitled to remedies under the Prompt Pay Act where the subcontract did not provide for retainage and neither party acted in bad faith. Vic Davis Constr., Inc. v. Lauren Eng'rs & Constructors, Inc., — S.W.3d —, 2019 Tenn. App. LEXIS 135 (Tenn. Ct. App. Mar. 20, 2019).

If appellant was able to prove that appellee was obligated to deposit appellant's retainage into an interest-bearing escrow account, and if appellant was unable to benefit from the discovery rule in future proceedings, appellant was still entitled to statutory penalties for each of the 365 days leading up to its filing of its complaint and beyond, based on appellee's failure to comply with the Prompt Payment Act. Snake Steel, Inc. v. Holladay Constr. Grp., LLC, — S.W.3d —, 2020 Tenn. App. LEXIS 23 (Tenn. Ct. App. Jan. 22, 2020).

Part 2
Owner/Prime Contractor Payment

66-34-201. Prime contractor entitled to payment from owner.

Performance by a prime contractor in accordance with a written contract with an owner for improvement of real property entitles the prime contractor to payment from the owner.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 18.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment inserted “prime” and substituted “entitles the prime” for “shall entitle such”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-34-202. Application for payment for work — Payment according to schedule for payments — Review of application by owner's agent.

  1. If a prime contractor has performed in accordance with the prime contractor's written contract with the owner, then the owner shall pay to the prime contractor the full amount earned by the prime contractor, less only those amounts withheld in accordance with § 66-34-203. The payment must be made in accordance with the schedule for payments established within the contract and within thirty (30) days after application for payment is timely submitted by the prime contractor to the owner, in accordance with the schedule.
  2. Failure of an architect, engineer, or other agent employed by the owner to review and approve an application for payment for work which has been performed in accordance with the contract does not excuse the owner from making payment in accordance with this chapter. This section does not require payment for work not performed if an architect, engineer, or other agent has certified that a contractor has not completed performance for a portion of work covered by the application for payment.

Acts 1991, ch. 45, § 1; 2006, ch. 944, § 1; 2020, ch. 749, § 19.

Compiler's Notes. Acts 2006, ch. 944, § 2 provided that the act, which rewrote (a), shall apply to all contracts executed after June 20, 2006.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment inserted “prime” five times in (a); and in the last sentence of (b), inserted “for work not performed”, “, engineer, or other agent” and “for a portion of work covered by the application for payment”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

NOTES TO DECISIONS

1. Attorney's Fees.

In an action over the parties'  duties under a construction contract, an award of attorney fees to the construction corporation was appropriate because there was insufficient evidence in the record to overturn the trial court's conclusion that the development corporation acted in bad faith. Inherent in the trial court's decision that the development corporation willfully attempted to take advantage of the construction corporation was a determination that a senior vice-president of the development corporation was not credible on the issue; further, the record showed that the development corporation intentionally withheld approximately $60,000 for work and materials that the construction corporation had already provided, T.C.A. § 66-34-202(a). Madden Phillips Constr. v. Ggat Dev. Corp., 315 S.W.3d 800, 2009 Tenn. App. LEXIS 645 (Tenn. Ct. App. Sept. 25, 2009), appeal denied, Madden Phillips Constr., Inc. v. GGAT Dev. Corp., — S.W.3d —, 2010 Tenn. LEXIS 291 (Tenn. Mar. 15, 2010).

66-34-203. Withholding of payment or retainage by owner.

This chapter does not prevent the owner from reasonably withholding payment or a portion of a payment to the prime contractor, as long as the withholding is in accordance with the written contract between the owner and the prime contractor. The owner may also withhold a reasonable amount of retainage as specified in the written contract between the owner and the prime contractor, as long as the retainage amount does not exceed five percent (5%) of the amount of the contract.

Acts 1991, ch. 45, § 1; 2007, ch. 201, § 4; 2020, ch. 749, § 20.

Compiler's Notes. Acts 2007, ch. 201, § 7 provided that the act, which added the proviso at the end of the last sentence, shall apply to all construction contracts to which the act applies entered into on or after July 1, 2007.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment inserted “prime” three times, substituted “This chapter does not” for “Nothing in this chapter shall”, “, as long as the withholding” for “; provided, that such withholding” and “, as long as the retainage” for “; provided, however, that the retainage”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-34-204. Payment of retainage by owner.

When an owner:

  1. Has received a use and/or occupancy permit for an improvement from a governmental agency lawfully issuing such permit;
  2. Has received a certificate of substantial completion  from an architect or engineer charged with supervision of the construction of an improvement; or
  3. Begins to use or could have begun to use an improvement;

    the owner shall, after any such event and pursuant to the terms of the written contract, pay to the prime contractor all retainage the owner may have withheld pursuant to the written contract, except any sum which the owner may reasonably withhold in accordance with the written contract between the owner and the prime contractor; the retainage must be paid within ninety (90) days after the date of the occurrence of an event included in subdivision (1), (2) or (3).

Acts 1991, ch. 45, § 1; 2007, ch. 201, § 5; 2020, ch. 749, § 21.

Compiler's Notes. Acts 2007, ch. 201, § 7 provided that the act, which added the proviso at the end of the section, shall apply to all construction contracts to which the act applies entered into on or after July 1, 2007.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment inserted “or engineer” in (2); and in the last paragraph, substituted “the prime contractor” for “the contractor” and “the prime contractor; the retainage” for “the contractor, provided, however, that the retainage”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

NOTES TO DECISIONS

1. Applicability.

Owner violated the Prompt Payment Act because the owner did not pay a contractor a retainage from the contractor's contractual compensation by a statutory deadline. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

66-34-205. Sums intended as payment to be held in trust.

  1. Any sums allocated by the owner or provided or committed to the owner by a third party that are intended to be used as payment for improvements made to real property by virtue of a written contract between the owner and the prime contractor must be held by the owner or third party in trust for the benefit and use of the prime contractor and its remote contractors, and are subject to all legal and equitable remedies.
  2. The presence of an otherwise valid agreement to arbitrate does not prevent a prime contractor or remote contractor from seeking equitable relief, including injunctive relief, as permitted by § 66-34-602 against any owner, prime contractor, or remote contractor.
  3. The bankruptcy or insolvency of any party is not a valid defense for the failure of an owner or other third party that controls or holds those sums described in subsection (a), as well as all retainage, to release those sums when they are otherwise due.
  4. This section does not apply to the state, including its departments, boards, or commissions, or to any institution of higher education.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 22.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment, in (a), inserted “prime” twice and substituted “its remote contractors, and are subject” for “shall be subject”; added (b) and (c); and redesignated former (b) as present (d).

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Part 3
Prime Contractor/Remote Contractor Payment

66-34-301. Remote contractor entitled to payment from prime contractor.

Performance by a remote contractor in accordance with a written contract with a prime contractor for improvement of real property entitles the remote contractor to payment from the prime contractor.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 23.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment inserted “prime” twice, substituted “remote contractor” for “subcontractor, materialman or furnisher”, “with a written” for “with such person’s written” and “entitles the remote contractor” for “shall entitle such person”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

NOTES TO DECISIONS

1. Contract.

Subcontractor's claim against the general contractor (GC) and the bond insurer, alleging a violation of the Prompt Pay Act, was grounded in contract based on a review of the basis for which damages were sought, which was the GC's failure to pay for work performed. Akers v. Sessions Paving Co., — S.W.3d —, 2013 Tenn. App. LEXIS 535 (Tenn. Ct. App. Aug. 13, 2013), rehearing denied, — S.W.3d —, 2013 Tenn. App. LEXIS 633 (Tenn. Ct. App. Sept. 12, 2013), appeal denied, — S.W.3d —, 2014 Tenn. LEXIS 45 (Tenn. Jan. 14, 2014).

2. Time Limitations.

Subcontractor's claims against the general contractor (GC) and the bond insurer, alleging a violation of the Prompt Pay Act and breach of contract due to the GC's failure to pay for work performed, were both barred by the limitations period because they accrued more than six years prior to when the action was brought. Akers v. Sessions Paving Co., — S.W.3d —, 2013 Tenn. App. LEXIS 535 (Tenn. Ct. App. Aug. 13, 2013), rehearing denied, — S.W.3d —, 2013 Tenn. App. LEXIS 633 (Tenn. Ct. App. Sept. 12, 2013), appeal denied, — S.W.3d —, 2014 Tenn. LEXIS 45 (Tenn. Jan. 14, 2014).

66-34-302. Application for payment for work — Payment according to schedule for payments — Interest.

  1. If a remote contractor has performed in accordance with the remote contractor's written contract with the prime contractor, then the prime contractor shall pay to the remote contractor the full amount earned by the remote contractor, subject only to any condition precedent for payment clause in the contract, and less only those amounts withheld in accordance with § 66-34-303. The payment must be made in accordance with the schedule for payments established within the contract and within thirty (30) days after application for payment is timely submitted by the remote contractor to the prime contractor, in accordance with the schedule.
  2. The prime contractor shall also pay the remote contractor its pro rata share of any interest provided for in § 66-34-601 that has been received by the prime contractor.

Acts 1991, ch. 45, § 1; 2006, ch. 944, § 2; 2020, ch. 749, § 24.

Compiler's Notes. Acts 2006, ch. 944, § 2 provided that the act, which rewrote this section, shall apply to all contracts executed after June 20, 2006.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment, in (a),  substituted “remote contractor” for “subcontractor, materialman or furnisher” five times, and inserted “prime” three times; and in (b),  substituted “The prime contractor shall also pay the remote contractor” for “The subcontractor, materialman, or furnisher shall also be paid” and substituted “prime contractor” for “contractor” at the end.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-34-303. Withholding of payment or retainage by prime contractor.

This chapter does not prevent the prime contractor from reasonably withholding payment or a portion of payment to the remote contractor, as long as the withheld payment is in accordance with the written contract between the prime contractor and the remote contractor. The prime contractor may also withhold a reasonable amount of retainage as specified in the written contract between the prime contractor and remote contractor; except, that the retainage amount must not exceed five percent (5%) of the amount of the contract.

Acts 1991, ch. 45, § 1; 2007, ch. 201, § 6; 2020, ch. 749, § 25.

Compiler's Notes. Acts 2007, ch. 201, § 7 provided that the act, which added the proviso at the end of the last sentence, shall apply to all construction contracts to which the act applies entered into on or after July 1, 2007.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “prime contractor” for “contractor” four times; in the first sentence, substituted “This chapter does not” for “Nothing in this chapter shall”, “remote contractor, as long as the” for “subcontractor, materialman or furnisher; provided, that such”, and “remote contractor.” for “subcontractor, materialman or furnisher.”; and in the second sentence, substituted “and remote contractor; except,” for “, subcontractor, materialman or furnisher; provided, however,”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-34-304. Payments to be held in trust by prime contractor.

Any sums received by the prime contractor as payment for work, services, equipment, and materials supplied by the remote contractor for improvements to real property must be held by the prime contractor in trust for the benefit and use of the remote contractor, and are subject to all legal and equitable remedies.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 26.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment inserted “prime” twice, and substituted “remote contractor” for “subcontractor, materialman or furnisher” twice.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Part 4
Remote Contractor/Remote Contractor Payment

66-34-401. Payment by remote contractor to remote contractor.

A remote contractor contracting in writing with another remote contractor for the improvement of real property shall make payment to the other remote contractor in accordance with part 3 of this chapter.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 27.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “remote contractor” for “subcontractor, materialman or furnisher” three times.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Part 5
Architect and/or Engineer Payment

66-34-501. Payment to architect or engineer — Governing provisions.

An architect or engineer furnishing design or contract administration services to an owner, prime contractor, or remote contractor for the improvement of real property is entitled to payment in accordance with part 2 of this chapter, if the architect or engineer contracts in writing with the owner; or in accordance with part 3 of this chapter, if the architect or engineer contracts in writing with a prime contractor or remote contractor.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 28.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment deleted “and/” preceding “or engineer” throughout the section; and substituted “prime contractor, or remote contractor” for “contractor, subcontractor, materialman or furnisher” and made a similar change at the end of the section.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Part 6
Remedies for Delinquent Payment or Nonpayment

66-34-601. Interest.

Any payment not made in accordance with this chapter accrues interest, from the date due until the date paid, at the rate of interest for delinquent payments provided in written contract or, if no interest rate is specified in a written contract, then one and one-half percent (1.5%) per month.

Acts 1991, ch. 45, § 1; 2000, ch. 712, § 1; 2020, ch. 749, § 29.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment substituted “accrues” for “shall accrue” and “then one and one-half percent (1.5%) per month.” for “at the rate specified in § 47-14-121.”

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-34-602. Nonpayment — Notice of intent to seek relief under chapter — Remedies — Attorney's fees — Bond.

    1. A prime contractor who has not received payment from an owner, or a remote contractor who has not received payment from a prime contractor or other remote contractor, in accordance with this chapter, or any prime contractor or remote contractor that intends to seek to recover funds as permitted by § 66-34-205 and this section, shall notify the party failing to make payment of the notifying party's intent to seek relief against that party as provided in this chapter.
    2. The notification must be made by registered or certified mail, return receipt requested, or by another commercial delivery service that provides written confirmation of delivery.
    3. If the notified party does not, within ten (10) calendar days after receipt of the notice, make payment or provide to the notifying party a response giving adequate legal reasons for failure of the notified party to make payment, then the notifying party may, in addition to all other remedies available at law or in equity, sue for equitable relief, including injunctive relief, for continuing violations of this chapter in the chancery court of the county in which the real property is located.
    4. The failure to make the only payment due under the contract may be considered a continuing violation under this chapter.
    5. The notification required by this part may be sent separately or as part of any notice of nonpayment or other notice required under the contract and may be in substantially the following form:

      This letter shall serve as notice pursuant to the Tennessee Prompt Pay Act, Tenn. Code Ann. §§ 66-34-101 et seq., of [prime contractor or remote contractor]'s intent to seek relief under the Prompt Pay Act. [Prime contractor or remote contractor] furnished [description of labor, materials, or services furnished] in furtherance of improvements to real property located at [property description] pursuant to its written contract with [lender, owner, prime contractor, or remote contractor]. [Prime contractor or remote contractor] first furnished labor, materials, or services on [insert first date] and [“is still continuing to perform” or “last furnished labor, materials, or services on (insert date)”]. If [owner, prime contractor, and/or remote contractor] fail(s) to make payment, arrange for payment, or provide a response setting forth adequate legal reasons for the failure to make payment to [prime contractor or remote contractor] within ten (10) days of your receipt of this letter, then [prime contractor or remote contractor] may, in addition to all other remedies at law or in equity, file a lawsuit for equitable relief, including injunctive relief, for continuing violations of this chapter.

    1. If an owner does not make payment to a prime contractor or furnish a response setting forth adequate legal reasons for the owner's failure to make payment within ten (10) days of receipt of the notice required by subsection (a), then the prime contractor may stop work until payment is received or until the owner provides a response setting forth adequate legal reasons for the owner's failure to make payment, as long as the prime contractor is not otherwise in default of the written contract. If, in accordance with subsection (a), the owner makes payment or provides a response setting forth adequate legal reasons for the failure to pay the prime contractor, then the prime contractor shall not stop work pursuant to this section.
    2. If a prime contractor does not make payment to a remote contractor or furnish a response setting forth adequate legal reasons for the prime contractor's failure to make payment within ten (10) days of receipt of the notice required by subsection (a), then the remote contractor may stop work until payment is received or until the prime contractor provides a response setting forth adequate legal reasons for the prime contractor's failure to make payment, as long as the remote contractor is not otherwise in default of the written contract. If, in accordance with subsection (a), the prime contractor makes payment or provides a response setting forth adequate legal reasons for the failure to pay the remote contractor, then the remote contractor shall not stop work pursuant to this section.
  1. Any work stoppage by a prime contractor or a remote contractor in accordance with this section entitles the prime contractor or remote contractor to an extension of the contract schedule, if any, equal to the length of the work stoppage.
  2. Reasonable attorney's fees may be awarded against the nonprevailing party if the nonprevailing party acted in bad faith.
  3. A bond in the amount claimed or ordered to be paid must be filed with good sureties to be approved by the clerk prior to the issuance of any injunctive relief.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 30.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment rewrote (a)(1) which read: “A contractor who has not received payment from an owner, or a subcontractor, materialman or furnisher who has not received payment from a contractor or other subcontractor, materialman or furnisher, in accordance with this chapter, shall notify the party failing to make payment of the provisions of this chapter and of the notifying party's intent to seek relief provided for within this chapter.”; added “, or by another commercial delivery service that provides written confirmation of delivery.” in (a)(2); added (a)(5) – (c); redesignated former (b) as present (d) and substituted “if the nonprevailing” for “; provided, that such nonprevailing”; and redesignated former (c) as present (e) and deleted “double” preceding “the amount” in present (e).

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

NOTES TO DECISIONS

1. Attorney's Fees.

As the buyer honestly believed that it did not owe the money claimed by the seller, and in resisting the seller's claim, buyer was not using the technicalities of the law to take unconscientious advantage of the seller, the trial court properly denied the latter's request for attorney fees under T.C.A. § 66-34-602(b). Trinity Indus. v. McKinnon Bridge Co., 77 S.W.3d 159, 2001 Tenn. App. LEXIS 858 (Tenn. Ct. App. 2001).

Under T.C.A. § 66-34-602(b), bad faith is construed as actions in knowing or reckless disregard of contractual rights, and includes rights or duties under the contract; good faith imposes an honest intention to abstain from taking any unconscientious advantage of another, even through the forms and technicalities of the law. Trinity Indus. v. McKinnon Bridge Co., 77 S.W.3d 159, 2001 Tenn. App. LEXIS 858 (Tenn. Ct. App. 2001).

In an action over the parties'  duties under a construction contract, an award of attorney fees to the construction corporation was appropriate under T.C.A. § 66-34-602(b) because there was insufficient evidence in the record to overturn the trial court's conclusion that the development corporation acted in bad faith. Inherent in the trial court's decision that the development corporation willfully attempted to take advantage of the construction corporation was a determination that a senior vice-president of the development corporation was not credible on the issue; further, the record showed that the development corporation intentionally withheld approximately $60,000 for work and materials that the construction corporation had already provided. Madden Phillips Constr. v. Ggat Dev. Corp., 315 S.W.3d 800, 2009 Tenn. App. LEXIS 645 (Tenn. Ct. App. Sept. 25, 2009), appeal denied, Madden Phillips Constr., Inc. v. GGAT Dev. Corp., — S.W.3d —, 2010 Tenn. LEXIS 291 (Tenn. Mar. 15, 2010).

Contractor was entitled to attorney's fees for an owner's Prompt Payment Act violation because the contractor showed the owner's bad faith by demonstrating the owner's intentional violation. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

As a matter of first impression, a contractor was entitled to an award of appellate attorney's fees for an owner's violation of the Prompt Payment Act because (1) the contractor showed the owner's bad faith, and (2) the contractor's appellate pleadings sought such an award. Beacon4, LLC v. I & L Invs., LLC, 514 S.W.3d 153, 2016 Tenn. App. LEXIS 637 (Tenn. Ct. App. Aug. 30, 2016), appeal denied, Beacon4, LLC v. I & L Invs., LLC, — S.W.3d —, 2016 Tenn. LEXIS 950 (Tenn. Dec. 15, 2016).

Subcontractor was properly denied attorney's fees on its breach of contract claim where the contractor thought it was acting justifiably in refusing to pay in light of the subcontractor's slow start. Classic City Mech., Inc. v. Potter South East, LLC, — S.W.3d —, 2016 Tenn. App. LEXIS 765 (Tenn. Ct. App. Oct. 14, 2016).

In this breach of contract action, appellant failed to demonstrate that district court's finding of bad faith was clearly erroneous or that district court abused its discretion in awarding attorney's fees to appellee. Eagle Supply & Mfg., L.P. v. Bechtel Jacobs Co., LLC, 868 F.3d 423, 2017 FED App. 0185P, 2017 FED App. 185P, 2017 U.S. App. LEXIS 15498 (6th Cir. Aug. 17, 2017).

2. Compliance.

Mode of pre-suit notice is directory rather than mandatory and requires only substantial compliance. Aarene Contr. v. Krispy Kreme Doughnut Corp., — S.W.3d —, 2016 Tenn. App. LEXIS 967 (Tenn. Ct. App. Dec. 20, 2016).

Because the contractor provided the owner with the information it was required to provide under statute before it filed suit, and because the owner was not prejudiced by the method the contractor used to provide notice, Federal Express rather than registered or certified mail, return receipt requested, the contractor substantially complied with the statute and the trial court erred in granting summary judgment and dismissing the contractor's claims under the Prompt Pay Act, T.C.A. § 66-34-101 et seq.Aarene Contr. v. Krispy Kreme Doughnut Corp., — S.W.3d —, 2016 Tenn. App. LEXIS 967 (Tenn. Ct. App. Dec. 20, 2016).

66-34-603. Additional rights of prime contractors and remote contractors — Reasonable assurances.

  1. In addition to any rights provided for under any contract:
    1. Prior to visible commencement of operations, and upon written request by a prime contractor, the owner shall furnish a prime contractor reasonable evidence the owner has procured a loan, which may be secured by a mortgage or other encumbrance, or has otherwise made financial arrangements sufficient to make all payments in accordance with the contract;
    2. After visible commencement of operations, a prime contractor or a remote contractor may, upon the owner's failure to make payments as required by the written contract, provide notice in accordance with § 66-34-602(a). Included within the notice, a prime contractor or remote contractor may request that the owner provide reasonable evidence that the owner has made financial arrangements sufficient to fulfill its obligation to make all payments in accordance with the written contract;
    3. An owner shall provide a response to a demand for reasonable assurances within ten (10) days of receipt of the request that:
      1. Provides reasonable evidence that the owner has made financial arrangements sufficient to fulfill the owner's obligation to make all payments in accordance with the written contract, including the information set forth in § 66-34-104(d); or
      2. Provides adequate legal reasons for the owner's failure to make payment of the sums owing to the requesting party;
    4. If an owner responds to a demand for adequate assurance with reasonable evidence that the owner has made financial arrangements sufficient to fulfill the owner's obligation to make all payments in accordance with the written contract, then the owner shall not materially vary the owner's financial arrangements from those disclosed under this section without prior notice to the prime contractor or remote contractor; and
    5. A demand for reasonable assurances may be sent separately or as part of any notice of nonpayment, notice pursuant to § 66-34-602(a), or other notice required or permitted under the contract, and may be in substantially the following form:

      [Prime contractor or remote contractor] furnished labor, materials, or services in furtherance of improvements to real property located at [property description] pursuant to its written contract with [owner, prime contractor, or remote contractor]. As of the date of this letter, [owner, prime contractor, or remote contractor] owes [prime contractor or remote contractor] the sum of [amount past due], which is past due or for which [prime contractor or remote contractor] asserts it has not been paid from [owner]. Such amounts were due on or before [insert due date] pursuant to the written contract between the parties. Pursuant to T.C.A. § 66-34-603, [prime contractor or remote contractor] demands [owner] furnish reasonable evidence that [owner] has made financial arrangements sufficient to fulfill its obligation to make all payments in accordance with the written contract or setting forth adequate legal reasons for your failure to make payment, within ten (10) days of your receipt of this letter.

  2. This section may not be waived by contract.
  3. This section does not apply to the state and any department, board, or agency thereof, including the University of Tennessee; counties and municipalities and all departments, boards, or agencies thereof, including all school and education boards; and any other subdivision of this state.

Acts 2020, ch. 749, § 31.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which enacted this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Part 7
Applicability

66-34-701. Prohibited waiver — Applicability of provisions.

As a matter of public policy, except as specifically noted, compliance with §§ 66-11-104, 66-34-205, 66-34-304, 66-34-602, and 66-34-603 may not be waived by contract and these sections are applicable to all private contracts and all construction contracts with this state, any department, board, or agency thereof, including the University of Tennessee, all counties and municipalities and all departments, boards, or agencies thereof, including all school and education boards, and any other subdivision of the state.

Acts 1991, ch. 45, § 1; 2020, ch. 749, § 32.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment added “As a matter of public policy,” inserted “66-11-104,” and substituted “, 66-34-602, and 66-34-603” for “and 66-34-602”.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-34-702. Construction or home improvement contracts.

This chapter shall not apply to contracts for the construction of, or home improvement to, any land or building, or that portion thereof which is used or designed to be used as a residence or dwelling place for one (1), two (2), three (3) or four (4) single family units.

Acts 1991, ch. 45, § 1.

66-34-703. Applicability of chapter.

  1. This chapter does not apply to any bank, savings bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company.
  2. Notwithstanding subsection (a), if a bank, savings bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company acts in the capacity of an original owner in the event of building its own structure or assumes a project due to its debtor's default and proceeds with completion of the project, then the entity is subject to this chapter, except for §§ 66-34-104(c) and (j); however, the retained amount may be deposited in an account within the entity's own institution.
  3. Notwithstanding subsection (a) or any other provision of this chapter to the contrary:
    1. A bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company shall pay any sums held in trust pursuant to § 66-34-205 in accordance with an order of any court issued pursuant to § 66-34-602; and
    2. A bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company is not liable for damages pursuant to § 66-34-104(c) based on the failure of an owner to place retainage in a separate interest-bearing, escrow account as required by § 66-34-104(a).

Acts 1991, ch. 443, § 1; 2020, ch. 749, § 33.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment deleted “, the Prompt Pay Act of 1991, as enacted by Acts 1991, chapter 45,” following “This chapter” in (a); and added (b) and (c).

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-34-704. Agreement limiting liability of person furnishing labor, materials, or services.

Without limiting any existing law or regulation, it is not against the public policy or public interest of this state for a provision in any agreement relating to the design, planning, supervision, observation of construction, repair, or construction of an improvement to real property to limit the liability of the person furnishing the labor, materials, or services to a reasonable monetary amount.

Acts 2020, ch. 749, § 34.

Compiler's Notes. Acts 2020, ch. 749, § 42 provided that the act, which enacted this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Chapter 35
Rent Control

66-35-101. “Local governmental unit” defined.

As used in this chapter, “local governmental unit” means any political subdivision of the state, including, but not limited to, counties or incorporated municipalities, if such political subdivision provides local government services for residents in a geographically limited area of the state as its primary purpose and has the power to act primarily on behalf of that area.

Acts 1996, ch. 623, § 1.

66-35-102. Rent control by local governments prohibited — Zoning provisions — Affordable housing.

  1. A local governmental unit shall not enact, maintain or enforce an ordinance or resolution that would have the effect of controlling the amount of rent charged for leasing private residential or commercial property.
    1. Notwithstanding any provision of law to the contrary, a local government unit, or any subdivision or instrumentality thereof, shall not enact, maintain, or enforce any ordinance, resolution, regulation, rule, or other requirement of any type that:
      1. Requires the direct or indirect allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates;
      2. Conditions any zoning change, variance, building permit, development entitlements through amendment to the zoning map, or any change in land use restrictions or requirements, on the allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates; or
      3. Requires a person to waive the person's constitutionally protected rights related to real property in order that the local government unit can increase the number of existing or newly constructed private residential or commercial rental units that would be available for purchase or lease at below market rates within the jurisdiction of the local government unit.
    2. This subsection (b) does not prohibit a local government unit from creating or implementing a purely voluntary incentive-based program designed to increase the construction or rehabilitation of workforce or affordable private residential or commercial rental units, which may include providing local tax incentives, subsidization, real property or infrastructure assistance, or any other incentive that makes construction of affordable housing more economical, so long as no power or authority granted to the local government unit to regulate zoning or land use planning is used to incentivize or leverage a person to develop, build, sell, or rent housing at below market value.
    3. Any person who suffers an ascertainable loss of money or property, real, personal, or mixed, or any other article, commodity, or thing of value wherever situated, as a result of the practices prohibited by this section, may bring an action individually to recover actual damages.
  2. [Deleted by 2018 amendment.]

Acts 1996, ch. 623, § 1; 2016, ch. 822, § 1; 2018, ch. 685, § 1.

Compiler's Notes. For Preamble to act concerning housing sold or rented at below market value, please refer to Acts 2018, ch. 685.

Acts 2018, ch. 685, § 2 provided that all ordinances, resolutions, regulations, rules, or requirements of any type of a local government unit that are in conflict with the act, which amended this section, are void and unenforceable.

Amendments. The 2016 amendment added (b) and (c).

The 2018 amendment rewrote (b) which read: “(b)  A local governmental unit shall not enact, maintain, or enforce any zoning regulation, requirement, or condition of development imposed by land use or zoning ordinances, resolutions, or regulations or pursuant to any special permit, special exception, or subdivision plan that requires the direct or indirect allocation of a percentage of existing or newly constructed private residential or commercial rental units for long-term retention as affordable or workforce housing. This subsection (b) shall apply to all current and future zoning regulations.”; and deleted former (c) which read: “Construction and rehabilitation of moderate or lower-cost private residential or commercial rental units.”

Effective Dates. Acts 2016, ch. 822, § 2. April 21, 2016.

Acts 2018, ch. 685, § 3. April 9, 2018.

NOTES TO DECISIONS

1. Dismissal proper.

Home builders association's appeal of a judgment dismissing its challenge to a zoning ordinance was dismissed because the case was moot since Public Chapter 685, which amended the statute, expressly precluded the metropolitan government from enforcing the ordinance, i.e., taking the action that the association sought to have declared unconstitutional; as such, the association's members faced no threat of further injury. Home Builders Ass'n of Middle Tenn. v. Metro. Gov't, — S.W.3d —, 2019 Tenn. App. LEXIS 54 (Tenn. Ct. App. Jan. 30, 2019).

66-35-103. Management of government-owned property excepted.

This chapter does not impair the right of a local governmental unit to manage and control residential or commercial property in which such local governmental unit has a property interest.

Acts 1996, ch. 623, § 1.

Chapter 36
Construction Defects

66-36-101. Chapter definitions.

As used in this chapter:

  1. “Action” means any civil action or binding dispute resolution proceeding for damages or indemnity asserting a claim for damage to or loss of commercial property caused by an alleged construction defect, but does not include any civil action or arbitration proceeding asserting a claim for alleged personal injuries arising out of an alleged construction defect;
  2. “Claimant” means an owner, including a subsequent purchaser, tenant, or association, who asserts a claim against a prime contractor, remote contractor, or design professional concerning a construction defect;
  3. “Commercial property” means all property that is not residential property;
  4. “Construction defect” means a deficiency in, or a deficiency arising out of, the design, specifications, surveying, planning, supervision, observation of construction, or construction or remodeling of an improvement resulting from:
    1. Defective material, products, or components used in the construction or remodeling;
    2. A violation of the applicable codes in effect at the time of construction or remodeling;
    3. A failure of the design of an improvement to meet the applicable professional standards of care at the time of governmental approval, construction, or remodeling; or
    4. A failure to construct or remodel an improvement in accordance with accepted trade standards for good and workmanlike construction at the time of construction or remodeling;
  5. “Design professional” means a person licensed in this state as an architect, interior designer, landscape architect, engineer, or surveyor, regardless of whether the person is a prime contractor or remote contractor;
  6. “Improvement” has the same meaning as defined in § 66-11-101;
  7. “Notice of claim” means a written notice sent by a claimant to the last known address of a prime contractor, remote contractor, or design professional against whom the claimant asserts a construction defect that describes the claim in reasonable detail sufficient to determine the general nature of the defect, including a general description of the type and location of the construction that the claimant alleges to be defective and any damages claimed to have been caused by the defect;
  8. “Prime contractor” has the same meaning as defined in § 66-11-101;
  9. “Remote contractor” has the same meaning as defined in § 66-11-101;
  10. “Residential property” means property upon which a dwelling or improvement is constructed or to be constructed consisting of one (1) dwelling unit intended as a residence of a person or family; and
  11. “Service” means personal service or delivery by certified mail to the last known address of the addressee, or as otherwise allowed by contract.

Acts 2004, ch. 741, § 2; 2020, ch. 749, § 35.

Compiler's Notes. Acts 2004, ch. 741, § 6 provided that the act, which enacted this section, shall apply to all actions accruing on or after May 24, 2004.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020.

Amendments. The 2020 amendment added the definitions of “Improvement”, “Prime contractor”, “Remote contractor” and “Residential property”; deleted “, unless the context otherwise requires” from the introductory language;  inserted “or binding dispute resolution proceeding” in the definition of “Action”;  in the definition of “Claimant”, inserted “prime” and substituted “remote contractor” for “subcontractor, supplier”;  deleted the second sentence in the definition of “Commercial property” which read: “Residential property is property upon which a dwelling or improvement is constructed or to be constructed consisting of one dwelling unit intended as a residence of a person or family”; substituted “an improvement” for “a structure” three times in the definition of “Construction defect”; deleted the definition of “Contractor” which read: “‘Contractor’ means any person, firm, partnership, corporation, association, or other organization that is legally engaged in the business of designing, developing, constructing, manufacturing, selling, or remodeling structures or appurtenances to structures;”; in the definition of “Design professional”, added “, regardless of whether the person is a prime contractor or remote contractor”;  substituted “prime contractor, remote contractor, or design professional” for “construction professional” in the definition of “Notice of claim”; in the definition of “Service”, added “, or as otherwise allowed by contract”; and deleted the definitions of “Structure”, “Subcontractor” and “Supplier” which read:

“‘Structure’ means any building or improvement and its components, systems, fixtures and appurtenances at the time of completion of construction;

“‘Subcontractor’ means a contractor who performs work on behalf of another contractor in the construction or remodeling of a structure; and

“‘Supplier’ means a person who provides materials, equipment, or other supplies for the construction or remodeling of a structure.”

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

66-36-102. Compliance with requirements.

If a claimant files an action without first complying with the requirements of this chapter, on motion by a party to the action, the tribunal having jurisdiction shall abate the action, without prejudice, and the action may not proceed until the claimant has complied with such requirements.

Acts 2004, ch. 741, § 3.

Compiler's Notes. Acts 2004, ch. 741, § 6 provided that the act, which enacted this section, shall apply to all actions accruing on or after May 24, 2004.

66-36-103. Notice of claim after discovery of construction defect — Inspection — Written response — Settlement offer — Toling of statute of limitations.

  1. In actions brought against a prime contractor, remote contractor, or design professional related to an alleged construction defect, the claimant shall, before filing an action, serve written notice of claim on the prime contractor, remote contractor, or design professional, as applicable. The claimant shall endeavor to serve the notice of claim within fifteen (15) days after discovery of an alleged defect, or as required by contract. Unless otherwise prohibited by contract, the failure to serve notice of claim within fifteen (15) days does not bar the filing of an action, subject to § 66-36-102.
  2. Within ten (10) business days after service of the notice of claim, the prime contractor, remote contractor, or design professional may inspect the structure to assess each alleged construction defect. The claimant shall provide the prime contractor, remote contractor, or design professional and its lower-tier remote contractors or agents reasonable access to the improvement during normal working hours to inspect the improvement, to determine the nature and cause of each alleged construction defect, and the nature and extent of any corrections, repairs, or replacements necessary to remedy each defect. The inspection may include destructive testing. Prior to performing any destructive testing, the person who desires to perform the testing shall notify the claimant in writing of the type of testing to be performed, the anticipated damage to the improvement that will be caused by the testing, and the anticipated corrections or repairs that will be necessary to correct or repair any damage caused by the testing. The person performing the testing shall correct and repair any damage to the improvement caused by the testing.
  3. Within ten (10) days after service of the notice of claim, the prime contractor, remote contractor, or design professional must forward a copy of the notice of claim to each prime contractor, remote contractor, or design professional who it reasonably believes is responsible for each defect specified in the notice of claim and shall note the specific defect for which it believes the particular prime contractor, remote contractor, or design professional is responsible. Each such prime contractor, remote contractor, or design professional may inspect the improvement as provided in subsection (b) within ten (10) business days after receiving a copy of the notice.
  4. Within ten (10) business days after receiving a copy of the notice of claim, the prime contractor, remote contractor, or design professional must serve a written response to the prime contractor, remote contractor, or design professional who served a copy of the notice of claim. The written response must include a report of the scope of any inspection of the improvement; the findings and results of the inspection; a statement of whether the prime contractor, remote contractor, or design professional is willing to make corrections or repairs to the improvement or whether it disputes the claim; a description of any corrections or repairs it is willing to make to remedy the alleged construction defect; and a timetable for the completion of such corrections or repairs.
  5. Within thirty (30) days after receiving the notice of claim, each prime contractor, remote contractor, or design professional must serve a written response to the claimant. The written response must provide:
    1. A written offer to remedy the alleged construction defect at no cost to the claimant, including a report of the scope of the inspection, the findings and results of the inspection, a detailed description of the corrections or repairs necessary to remedy the defect, and a timetable for the completion of the repairs;
    2. A written offer to compromise and settle the claim by monetary payment to be paid within thirty (30) days after the claimant's acceptance of the offer; or
    3. A written statement that the prime contractor, remote contractor, or design professional disputes the claim and will not remedy the defect or compromise and settle the claim.
  6. If the prime contractor, remote contractor, or design professional offers to remedy the alleged construction defect or compromise and settle the claim by monetary payment, then the written response must contain a statement that the claimant is deemed to have accepted the offer if, within fifteen (15) days after service to the written response, the claimant does not serve a written rejection of the offer on the prime contractor, remote contractor, or design professional.
  7. If the prime contractor, remote contractor, or design professional does not respond to the claimant's notice of claim within the time provided in subsection (e), then the claimant may, without further notice, proceed with an action against the prime contractor, remote contractor, or design professional for the claim described in the notice of claim.
  8. A claimant who rejects a settlement offer made by the prime contractor, remote contractor, or design professional must serve written notice of the rejection on the prime contractor, remote contractor, or design professional within fifteen (15) days after service of the settlement offer. The claimant's rejection must contain the settlement offer with the word “rejected” printed on it.
  9. If the claimant accepts the offer of a prime contractor, remote contractor, or design professional and the prime contractor, remote contractor, or design professional does not make the payment, correction, or repair the defect within the agreed time and in the agreed manner, then the claimant may, without further notice, proceed with an action against the prime contractor, remote contractor, or design professional. If a claimant accepts a prime contractor, remote contractor, or design professional's offer and the prime contractor, remote contractor, or design professional makes payment, correction, or repairs the defect within the agreed time and in the agreed manner, then the claimant is barred from proceeding with an action against the prime contractor, remote contractor, or design professional for the claim described in the notice of claim.
  10. If the claimant accepts the offer of a prime contractor, remote contractor, or design professional to correct or repair an alleged construction defect, then the claimant shall provide the prime contractor, remote contractor, or design professional and their remote contractors or other agents reasonable access to the claimant's improvement during normal working hours to perform the correction or repair by the agreed-upon timetable as stated in the offer.
  11. The failure of a claimant or a prime contractor, remote contractor, or design professional to follow the procedures in this section is admissible in an action. However, this section does not prohibit or limit the claimant from making any necessary emergency corrections or repairs to the improvement. In addition, the offer of a prime contractor, remote contractor, or design professional to remedy an alleged construction defect or to compromise and settle the claim by monetary payment does not constitute an admission of liability with respect to the defect.
  12. A claimant's written notice of claim under subsection (a) tolls the applicable statute of limitations until the later of:
    1. One hundred eighty (180) days after the prime contractor, remote contractor, or design professional receives the notice; or
    2. Ninety (90) days after the end of the correction or repair period stated in the offer, if the claimant has accepted the offer. By stipulation of the parties, the period may be extended and the statute of limitations is tolled during the extension.
  13. The procedures in this section apply to each alleged construction defect. However, a claimant may include multiple defects in one (1) notice of claim.
  14. This chapter does not:
    1. Bar, limit, or replace any rights, obligations, or duties under a contract that provides for notice and opportunity to cure any construction defects. Those contractual provisions control, take precedence, and are in lieu of any obligation or right provided by this chapter;
    2. Bar or limit any rights, including the right of specific performance to the extent that right would be available in the absence of this chapter, any causes of action, or any theories on which liability may be based, except as specifically provided in this chapter;
    3. Bar or limit any defense, or create any new defense, except as specifically provided in this chapter;
    4. Create any new rights, causes of action, or theories on which liability may be based; or
    5. Extend any existing statute of limitations except as specifically provided in subsection (l ).

Acts 2004, ch. 741, § 4; 2020, ch. 749, § 36.

Compiler's Notes. Acts 2004, ch. 741, § 6 provided that the act, which enacted this section, shall apply to all actions accruing on or after May 24, 2004.

Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020

Amendments. The 2020 amendment substituted “prime contractor, remote contractor,” for “contractor, subcontractor, supplier,” and “improvement” for “structure”, and made stylistic changes throughout the section; substituted “or as required by contract. Unless otherwise prohibited by contract,” for “but” in the second sentence of (a); in (b), inserted “lower-tier remote” in the second sentence, and substituted “shall correct and repair” for “is responsible for correcting and repairing” in the last sentence; substituted “and their remote contractors” for “and its contractors” in (j); and added (n)(1) and redesignated the remaining subdivisions accordingly.

Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.

Chapter 37
Prohibition of Covenants Providing for Transfer Fees Act of 2011

66-37-101. Short title.

This chapter shall be known and may be cited as the “Prohibition of Covenants Providing for Transfer Fees Act of 2011.”

Acts 2011, ch. 462, § 2.

66-37-102. Chapter definitions.

As used in this chapter:

  1. “Association” means a nonprofit, mandatory membership organization comprised of owners of homes, condominiums, cooperatives, manufactured homes, or any interest in real property, created pursuant to a declaration, covenant, or other applicable law;
  2. “Transfer” means the sale, gift, grant, conveyance, assignment, inheritance, or other transfer of an interest in real property located in this state;
  3. “Transfer fee” means a fee or charge imposed by a transfer fee covenant, but does not include any tax, assessment, fee or charge imposed by a governmental authority pursuant to applicable laws, ordinances, or regulations; and
  4. “Transfer fee covenant” means a provision in a document, whether recorded or not and however denominated, that purports to run with the land or bind current owners or successors in title to specified real property located in this state, and that obligates a transferee or transferor of all or part of the property to pay a fee or charge to a third person upon transfer of an interest in all or part of the property, or in consideration for permitting any such transfer. “Transfer fee covenant” does not include:
    1. Any provision of a purchase contract, option, mortgage, security agreement, real property listing agreement, or other agreement that obligates one party to the agreement to pay the other, as full or partial consideration for the agreement or for a waiver of rights under the agreement, an amount determined by the agreement, if that amount:
      1. Is payable on a one-time basis only upon the next transfer of an interest in the specified real property and, once paid, shall not bind successors in title to the property;
      2. Constitutes a loan assumption or similar fee charged by a lender holding a lien on the property; or
      3. Constitutes a fee or commission paid to a licensed real estate broker for brokerage services rendered in connection with the transfer of the property for which the fee or commission is paid;
      4. Any fee charged by an association or an agent of an association to a transferor or transferee for a service rendered contemporaneously with the imposition of the fee, provided the fee is not to be passed through to a third party other than an agent of the association.
    2. Any provision in a deed, memorandum, or other document recorded for the purpose of providing record notice of an agreement described in subdivision (4)(A);
    3. Any provision of a document requiring payment of a fee or charge to an association or its managing agent to be used exclusively for purposes authorized in the document, as long as no portion of the fee is required to be passed through to a third party designated or identifiable by description in the document or another document referenced therein; or
    4. Any provision of a document requiring payment of a fee or charge to an organization described in § 501(c)(3) or § 501(c)(4) of the Internal Revenue Code (26 U.S.C. § 501(c)(3), § 501(c)(4)), to be used exclusively to support cultural, educational, charitable, recreational, environmental, conservation, or other similar activities benefiting the real property affected by the provision or the community of which the property is a part.

Acts 2011, ch. 462, § 3.

66-37-103. Legislative findings.

The general assembly makes the following findings:

  1. The public policy of this state favors the transferability of interests in real property free from unreasonable restraints on alienation and covenants or servitudes that do not touch and concern the property; and
  2. A transfer fee covenant violates this public policy by impairing the marketability of title to the affected real property and constitutes an unreasonable restraint on alienation, regardless of the duration of the covenant or the amount of the transfer fee set forth in the covenant.

Acts 2011, ch. 462, § 3.

66-37-104. Transfer covenant fees.

  1. A transfer fee covenant recorded after June 10, 2011, or any lien to the extent that it purports to secure the payment of a transfer fee, is not binding on or enforceable against the affected real property or any subsequent owner, purchaser, or mortgagee of any interest in the property.
  2. Nothing in this chapter shall imply that a transfer fee covenant recorded prior to June 10, 2011 is valid or enforceable.

Acts 2011, ch. 462, § 3.