ÿWPCæ …# VU:a %› 0(¡b Éw@Õ4 ) 8 0J@ 0TŠ 0^Þ 0h< 0r¤ 0| 0†’ 0 1u¨ 0d U* B)« DCÔ AMüdv~` BÞvÓû D3Î 0@ AOAÆ 0DV D/š BɘHP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 ,†r‰AZ‹"Arial RegularX($¡¡- ù - lUmDnUoDpdqDrasÓ€}~DDÒ 3|x~2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Arial% Line 7 d 7Border 1dd€-!Cþÿ << Gÿÿ òÝ ƒ!ÝÑ  ÑÑ#€d#ÑÔ€ÔÝ  ÝÔ€ÔÓ  Óò òÔ YYY ÔFILEDÔ€XÔÌÌFebruary€21,€1997ÌÌCecil€W.€CrowsonÌAppellate€Court€ClerkÔ  Ôó óPtPtHHøHÿöÿòV,(ühhØ hd'0ÿÎÿºF ®  dStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva Ò%%%%'ÿÿdxd("ÿÿ$££Ò  ÒÒ  Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÝ  ÝÑ  ÑÒ € ÒÒ ° ÒÒ € ÒÒ „ ÒÑ\R AØ'\ÑÑ\R AØ'\ÑÑ€ÑÑ7€‡¿XXdædÈ7ÑÑ  ÑÞ ÞÌFRANCES›€W.€ALMANY;€andà àà à)ÌWILLIAM€T.€HALL€and€wife,à àà à)ÌNORMA€JEAN€HALL€and€LAWYERSà à)ÌTITLE€INSURANCE€CORP.,€by€andà à)Ìon€behalf€of€ROBERT€L.€WOODS,à à)Ìà àà àà àà àà àà à)Ìà àPlaintiffs/Appellants,à àà à)Ìà àà àà àà àà àà à)à àAppeal€No.Ìà àà àà àà àà àà à)à à01„A„01„9608„CH„00376ÌVS.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àSumner€Chancery̜ـ€ÙßR€"#!A1-j|<J` ç `€€@ÿRß›à àà àà àà àà àà à)à àNo.€94C„83ÌTHOMAS€A.€CHRISTIE€and€wife,à àœ)›ÌMARIA€L.€CHRISTIE;€and€GAIL€P.à à)ÌPIGG,€Substitute€Trustee,à àà àà à)Ìà àà àà àà àà àà à)Ìà àDefendants/Appellees.à àà à)ÌÌÌà@ àCOURT€OF€APPEALS€OF€TENNESSEEÌà@ àMIDDLE€SECTION€AT€NASHVILLEÌÌÌAPPEALED€FROM€THE€CHANCERY€COURT€OF€SUMNER€COUNTYÌAT€GALLATIN,€TENNESSEEÌÌTHE€HONORABLE€JOHN€H.€GASAWAY,€III,€JUDGE€BY€INTERCHANGEÌÌÌÌÌMICHAEL€W.€EDWARDSÌ177€E.€Main€StreetÌHendersonville,€Tennessee€37075ÌÌTHOMAS€F.€BLOOMÌ500€Church€Street,€5th€FloorÌNashville,€Tennessee€37219Ìà àAttorneys€for€Plaintiffs/AppellantsÌÌGAIL€P.€PIGGÌ219€Second€Avenue,€NorthÌFirst€Floor€SuiteÌNashville,€Tennessee€37201Ìà àAttorney€for€œDefendants/Appellees›ÌÌÌÌà@ àAFFIRMED€AND€REMANDEDÌÌÌÌà àà àà àà àà àà àà àBEN€H.€CANTRELL,€JUDGEÌÌÌCONCUR:ÌLEWIS,€J.ÌKOCH,€J.ÌÌÓÓÓ  Óà@ àò òòòÔ€„ÔO€P€I€N€I€O€Nó óóóÔ€XÔÌÌà àà àThe€question€we€must€decide€in€this€case€is€whether€a€purchaser€ofÏreal€estate,€œwhose€purchase€money€is€used€in€the€closing€to€pay€off€two€priorÏmortgages,›€is€subrogated€to€a€position€superior€to€a€third€mortgage.€€TheÏChancery€Court€of€Sumner€County€refused€to€recognize€the€subrogation.€€WeÏaffirm.ÌÌà@ àò òI.ó óÌÌà àà àOn€July€31,€1993€the€owner€of€a€parcel€of€real€property€in€SumnerÏCounty€entered€into€a€contract€to€sell€the€property€to€Robert€L.€Woods.€€The€sellerÍœpromised›€to€convey€the€property€by€a€good€and€valid€warranty€deed€to€the€buyerÏfor€$68,000€cash.€€At€the€time€of€the€œclosing,›€the€title€to€the€property€wasÏencumbered€by€œthe€following€four›€deeds€of€œtrust›€(in€order€of€priority):ÌÓÓà àà à1.à àBoston€Five€Cent€Mortgageà à$46,325.80Ìà àà à2.à àHomeowners€Equity€Serviceà à€€€€8,711.29Ìà àà à3.à àJerry€Butlerà àà àà àà à€€33,411.33Ìà àà à4.à àNashville€Electric€Serviceà àà à€€€€7,661.57ÌÌÌÌÓÓà àà àOn€August€13,€1993,€the€parties€closed€the€transaction€and€the€sellerÏgave€Mr.€Woods€a€warranty€deed€stating€that€the€land€was€unencumbered.€€TheÏclosing€agent€withheld€funds€from€the€sellerððs€proceeds€to€pay€Boston€Five€CentÏMortgage,€Homeowners€Equity€Service,€and€Nashville€Electric€Service.€€JerryÏButlerððs€œclaim€was€not€paid,€and€his€deed›€of€trust€remained€an€encumbrance€onÏthe€title.ÌÌà àà àIn€June€of€1994,€Mr.€Butler€started€foreclosure€proceedings.€€TheÏpurchaserððs€title€insurance€company€sued€to€enjoin€the€foreclosure.€€Later,€theÏcomplaint€was€amended€to€substitute€as€party€plaintiffs€the€lenders€who€loanedÏMr.€Woods€the€purchase€money€and€obtained€a€secured€interest€in€the€property.€ÏThe€chancellor€granted€summary€judgment€to€Mr.€Butler€allowing€him€to€proceedÏwith€foreclosure.ÌÌò òà@ àII.ó óÌÌà àà àThe€appellants€rely€on€the€doctrine€of€equitable€subrogation€whichÏallows€a€person€who€pays€the€debt€of€another€to€assume€the€creditorððs€place€withÏrespect€to€the€debt.€€òòœCastleman›€Construction€Co.€v.€œPennington›óó,€222€Tenn.€82,Ï432€S.W.2d€669€(1968).€€Being€a€creature€of€equity,€subrogation€principles€areÏnaturally€flexible,€and€may€be€said€to€encompass€all€cases€where€completeÏjustice€cannot€be€done€without€it.€€òòWalker€v.€Walkeróó,€138€Tenn.€679,€200€œS.W.›€825Ï(1917).€€The€doctrine,€however,€will€not€be€extended€beyond€the€settled€principlesÏon€which€it€rests.€€òòCole€v.€Pattyóó,€175€Tenn.€334,€134€S.W.2d€160€œ(1939).›ÌÌà àà àPerhaps€the€fullest€extension€of€the€subrogation€doctrine€can€beÏfound€in€the€case€of€òòDixon€v.€Morganóó,€154€Tenn.€389,€285€œS.W.›€558€(1926),€onÏwhich€the€appellants€rely.€€In€that€case€Wright€sold€a€farm€to€œMorgan,›€retaining€aÏvendorððs€lien€to€secure€the€payment€of€the€balance€of€the€purchase€price.€€MorganÏborrowed€money€from€a€bank€to€make€œthe›€down€payment€and€gave€the€bank€aÏdeed€of€trust,€making€the€bankððs€security€œinterest€secondary›€to€Wrightððs€vendorððsÏlien.€€The€bankððs€deed€of€trust€was€properly€recorded.€€Morgan€then€conveyed€aÏpart€of€the€land€to€œDixon,›€who€paid€all€of€the€consideration€to€Wright€to€be€appliedÏon€his€vendorððs€lien.€€Wright€joined€in€the€conveyance€from€œMorgan€to›€Dixon€œin€a›Ïdeed€containing€the€following:ÌÌÓÓà8 àà8 àà àð ðI,€the€undersigned€I.€G.€Wright,€hereby€join€inÍthis€deed€and€hereby€convey,€release,€and€quitclaimÏunto€the€said€C.€M.€Dixon,€his€heirs€and€assignsÏforever,€all€the€right,€title,€claim,€and€interest€that€I€haveÏin€and€to€said€above„described€tract€of€land€by€reasonÏof€the€lien€retained€in€the€deed€executed€by€myself€andÏwife€to€John€H.€Morgan,€conveying€a€large€tract€of€landÏof€which€the€above„described€tract€is€a€part,€and€I€joinÏin€this€instrument€simply€to€release€said€lien,€and€doÏhereby€release€and€discharge€said€above„describedÏtract€of€land€from€the€lien€retained€in€the€deed€executedÏby€myself€and€wife€to€said€John€H.€Morgan.ððÌÌÌÌÓÓà àà àDixon€did€not€search€the€records€but€assumed€that€Wrightððs€vendorððsÏlien€was€the€only€encumbrance€on€the€property.€€Morgan€did€not€mention€theÏbankððs€security,€but€there€was€no€indication€in€the€record€that€he€intended€œany›Ïharm€œto€Dixon.›€ÌÌà àà àDixon,€upon€learning€of€the€bankððs€lien,€filed€an€action€in€chanceryÏpraying€that€he€be€subrogated€to€Wrightððs€lien€with€rights€superior€to€the€bankððs.€ÏThe€Supreme€Court€upheld€Dixonððs€claim.€€Although€the€Court€delivered€aÏlengthy€opinion€its€reasons€may€be€summed€up€in€a€passage€from€œ25›€RulingÏCase€Law€1353€which€the€Court€quoted:ÌÌÓÓà8 àà8 àð ðAnd€the€rule€supported€by€the€weight€of€authority€isÏthat,€when€a€purchaser€pays€off€a€prior€incumbrance€asÏa€part€of€the€purchase€price,€without€actual€notice€of€aÏjunior€lien,€it€will€be€presumed€that€he€paid€the€sameÏfor€his€own€benefit€and€the€protection€of€his€ownÏinterests,€and€equity€will€treat€him€as€the€assignee€ofÍthe€original€incumbrance,€and€will€revive€and€enforce€itÏfor€his€benefit.ððÌÌœ285€S.W.€at€564,€154€Tenn.€at€411.›ÌÌÓӜ̛à àà àIn€œcontrast,›€the€appellee€cites€òòCole€v.€Pattyóó,€175€Tenn.€334,€134€S.ÏW.œ2d›€160€œ(1939),›€in€which€the€Court€denied€subrogation€to€a€purchaser€who€paidÏoff€an€existing€mortgage€as€part€of€the€purchase€price.€€The€Court€said:ÌÓÓà8 àà8 àIt€is€shown€by€the€conveyance€to€Cole€that€he€assumedÏdefendantððs€mortgage€debt€on€the€tract€of€land€involvedÏand€it€appears€from€evidence€that€when€complainantÏpaid€the€debt,€he€intended€to€and€did€extinguish€it.€ÏExtinguishment€of€the€debt€rebuts€the€idea€ofÏsubstitution€and€in€such€cases€the€right€of€subrogationÏcannot€arise.ÌÌ134€S.W.2d€at€œ162,€175€Tenn.€at€338.›ÌÌÌÌÓÓà àà àWhile€œan›€argument€could€be€made€that€òòDixon€v.€Morganóó€has€beenÏœoverruled›€by€òòCole€v.€Pattyóó,€we€need€not€go€that€far.€€œòòDixonóó€may€be€distinguishedÏfrom€this€case€on€several€points.€€First,€the€purchaser€in€òòDixonóó€actually€received€aÏconveyance€of€the€vendorððs€lien€when€the€original€seller€joined€in€the€deed.€€TheÏlanguage€quoted€above€shows€that€the€original€sellerððs€security€interest€in€theÏproperty€was€granted€to€the€buyer.€€Second,€the€buyer€in€this€case€is€not€the€partyÏclaiming€subrogation.€€This€action€has€been€prosecuted€from€the€beginning,€firstÏby€the€buyerððs€title€insurance€company,€and€now€by€the€mortgagees€who€loanedÏhim€the€down€payment.€€Whatever€equities€arose€in€favor€of€the€purchaser€inÍòòDixonóó€do€not€extend€with€the€same€force€to€third€parties€who€claim€through€theÏpurchaser.›€€œThird,›€the€buyer€in€this€case€did€not€pay€off€the€existing€mortgages€asÏpart€of€the€purchase€price.€€The€contract€between€the€buyer€and€the€seller€showsÏthat€the€buyer€was€to€pay€the€seller€$68,000€in€cash€and€receive€a€warranty€deedÏto€the€property.€€œThat€is€exactly€what€happened.€€Fourth,€there€is€no€indication€inÏthis€record€that€the€seller€is€insolvent.€€Therefore,€the€buyer€has€an€adequateÏremedy€against€the€seller€on€the€warranties€in€the€deed.›ÌÌà àà àWe€concur€in€the€chancellorððs€decision€that€this€is€not€a€case€for€theÏapplication€of€subrogation€principles.€€Therefore,€we€affirm€the€chancellorððsÏdecision€and€remand€the€case€to€the€Chancery€Court€of€Sumner€County€for€anyÏfurther€proceedings€that€may€become€necessary.€€Tax€the€costs€on€appeal€to€theÏappellants.̛̜ÓÓà àà àà àà àà àà à_____________________________Ìà àà àà àà àà àà àBEN€H.€CANTRELL,€JUDGEÌœÌCONCUR:›ÌÌÌ_______________________________ÌSAMUEL€L.€LEWIS,€JUDGEÌœÌÌ______________________________›ÌWILLIAM€C.€KOCH,€JR.,€JUDGEÌÑ ° ÑÑ  Ñœ›à@ àIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àMIDDLE€SECTION€AT€NASHVILLEÌÌÌÌFRANCES€W.€ALMANY;€andà àà à)ÌWILLIAM€T.€HALL€and€wife,à àà à)ÌNORMA€JEAN€HALL€and€LAWYERSà à)ÌTITLE€INSURANCE€CORP.,€by€andà à)Ìon€behalf€of€ROBERT€L.€WOODS,à à)Ìà àà àà àà àà àà à)Ìà àPlaintiffs/Appellants,à àà à)Ìà àà àà àà àà àà à)à àAppeal€No.Ìà àà àà àà àà àà à)à à01„A„01„9608„CH„00376ÌVS.à àà àà àà àà àà à)Ìà àà àà àà àà àà à)à àSumner€ChanceryÌà àà àà àà àà àà à)à àNo.€94C„83ÌTHOMAS€A.€CHRISTIE€and€wife,à àà à)ÌMARIA€L.€CHRISTIE;€and€GAIL€P.à à)à àAffirmedÌPIGG,€Substitute€Trustee,à àà àà à)à àandÌà àà àà àà àà àà à)à àRemandedÌà àDefendants/Appellees.à àà à)ÌÌà@ àò òòòÔ€¼ÔJ€U€D€G€M€E€N€Tó óóóÔ€XÔÌÌÓÓà àà àThis€cause€came€on€to€be€heard€upon€the€record€on€appeal€from€theÏChancery€Court€of€Sumner€County,€briefs€and€argument€of€counsel;€uponÏconsideration€whereof,€this€Court€is€of€the€opinion€that€in€the€decree€of€theÏChancellor€there€is€no€reversible€error.Ìà àà àIn€accordance€with€the€opinion€of€the€Court€filed€herein,€it€is,Ïtherefore,€ordered€and€decreed€by€this€Court€that€the€decree€of€the€Chancellor€isÏaffirmed.€€The€cause€is€remanded€to€the€Chancery€Court€of€Sumner€County€for€theÏenforcement€of€the€decree€and€for€the€collection€of€the€costs€accrued€below.Ìà àà àCosts€of€this€appeal€are€taxed€against€Frances€W.€œAlmany›,€et€al.,ÏPrincipals,€and€Michael€W.€Edwards,€Surety,€for€which€execution€may€issue€ifÏnecessary.Ìà àà àENTER€_______________________.ÌÌÓÓà àà àà àà àà àà à_________________________________Ìà àà àà àà àà àà àSAMUEL€L.€LEWIS,€JUDGEÌÌà àà àà àà àà àà à_________________________________Ìà àà àà àà àà àà àBEN€H.€CANTRELL,€JUDGEÌÌà àà àà àà àà àà à_________________________________Ìà àà àà àà àà àà àWILLIAM€C.€KOCH,€JR.,€JUDGEÌà àà àà àà àà àà àà àà àà à