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