ÿWPCÞ £Vù:gîÏjÝÅ™MåÊwE®Z—z–û3Ý–Ï{ÝÜ!s6×VͲ҂!z Û*µ)Ø·\Øt䟀•Ë¥¸ˆ:8&*né-i£^°š ±‚G)'º{Ú{¾=c¥2rnŽ€šÎ²á‡Ud—Àj²uÅž)¿ý~—6KPdQjò$€ÿDg”I,³\(…›÷k$Æ]îÉ¥=qžì‚,:ÿY½ðw)Bî4~kÚ±@±àm¼$–FþÇÔ2Õ|…|êú|]yǼëQ$¼_7îv$ ‹ñ5k­DØ•±ðÒÄ4§&f/¥5”ÚD½rBI—¡ºpwOf;¾{ä…ÿ¤Ÿr*îŒ÷þM©èOM&4¢Û.±yÐÐGοdÒT0ÏõiŠöeÁÝ+â‘…Ÿ—Ö秨c4¹?òÉ¥EØø>¸nÖÏCN~–B §t“dW=Û&v'ö3ÛôC‹_o“bòÌ…@ø¶K’×Q{Lc$¿*;œwHªã= ƒáæ²ÉÏé"±úçe0ºlÛ2à=®î*x»õ}úcdæ>0G+øÕb„­:l>ßεçó»v%o"›)À¸ÕYÓœEÎòäMD/¯ÙIø²€Òµaà6Çb#É\ %% ^ + 0ˆ7 UN¿ w@ 4M za ÒÛ ­ ¼ m¾ U NÕ Æ# Æé ƯÆu 0D;NPEÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑÑbÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓÓ 0ëÛÛÛÛ BÆÆ 0¤ã D3‡ D-º 0Kçç AS2Æ… 0¤K 0Dï A«3˜\\IB01S04\CLERKKNOXÈÈ,,,,ÈÈ0»Q”Þ.Ï (`£ª$¡¡Ñ€.ÑÑ8€½­»»d»»d8ÑÑ ý ÑÓ  Ó(í€"  Z6Times New Roman Regular áEâãUäDåæç€èéDê=ƒ.ê:i¢Ø+00 ˜C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt3|xêÿU‹ÿÀÀÀ(ÖÃ9 Z‹6Times New Roman RegularLevel 1Level 2Level 3Level 4Level 5‚Level 1Level 2Level 3Level 4Level 5„Level 1Level 2Level 3Level 4Level 5…Level 1Level 2Level 3Level 4Level 5(#Ã$òòÚ  Ú0Ú  Úóó FanslerBradingRodenCitiFinancialGuffeyCreutzingerlienholdersAycockBlankenship BainCastlemanPenningtonAdvantafail[sLeeper- ù-(|G2Z+$¤¤Ý ƒ£ª!ÝÑ€.ÑÑ8€GU»»dd8ÑÑ ý ÑÓ  ÓÝ  Ýà  àòòÚ  Ú0Ú  ÚóóÔ€X X»»Ô d(|3‡|$££Ý ƒ£ª!ÝÑ€.ÑÑ8€GU»»dd8ÑÑ ý ÑÓ  ÓÝ  ÝVVVV'ÿÿdxd)!ÈÈÈÈdxdx( ±þ$’’ò òFigure€Ú  Ú1Ú  Úó ó^_X`YEþÿ<<CÿÿƒLevel 1Level 2Level 3Level 4Level 5(|3‡|$¢¢Ý ƒ£ª!ÝÑ€.ÑÑ8€GU»»dd8ÑÑ ý ÑÓ  ÓÝ  Ý($$””ò òÚ  Ú1Ú  Úó óX[Z&OLE 2.0 Box <=8ÿÿÿÿÿÿÿÿÿÿCÿÿ HKKKKÝ ƒ£ª!ÝÑ€.ÑÑ8€GU»»ddÈ8ÑÑ ý ÑÓ  ÓÝ  ÝÔ_ÔÔ€¼GU»»»ÔÑ8€ XXdì»»d8Ñà@¦ ¦ ìàIN€THE€COURT€OF€APPEALS€OF€TENNESSEEˆÐ ° Ðà@””$ìàAT€KNOXVILLEˆÐ  Ðà@ÙÙ ìàMay€12,€2003€SessionˆÐ Ô$ ÐÔ‡X X»¼GUÔÌò òÔ#†¼GU»XX ž#ÔÓ  ÓBANKERS€TRUST€COMPANY,€v.€TIMOTHY€L.€COLLINS€and€APRILÐ Ò" ÐCOLLINS,€LOU€ROBERTSON,€and€COMMERCIAL€CREDIT€PLAN,Ð æ 6 ÐINCORPORATEDòòóóÔ‡X X»¼GUÔó óÐ ú J ÐÓäÓÌà@M M ìàò òDirect€Appeal€from€the€Chancery€Court€for€Knox€CountyˆÐ ú J Ðà@o o ìàNo.€148680„2€€€€€€Hon.€Daryl€R.€Fansler,€ChancellorˆÐ æ 6  ÐÌñçñà  àà ` àà ¸ àà  àà h àñçññéññèñGñèññéññêñFILED€JUNE€30,€Ô_Ô2003ñêñÔ_ÔÌà@ìì*ìàßA€V) °°` d€÷E<©` A߈Ð ªú  ÐÌà@¶¶ìàNo.€E2002„02109„Ô_ÔCOAÔ_Ô„R3„CV€ˆÐ ¥õ  ÐÌßA€V) °°` dE<|` AßÐ }Í Ðó óÌÌIn€ñåñthis€ñåñdeclaratory€judgment€action,€the€Trial€Court€held€that€recorded€trust€deeds€and€notes€hadÐ d´ Ðpriority€over€unrecorded€trust€deeds€and€notes€and€dismissed€the€action.€€We€affirm.Ð P  ÐÌÔ#†¼GU»XX •#ÔÔ‡X X»¼GUÔÌò òTenn.€R.€App.€P.3€Appeal€as€of€Right;€Judgment€of€the€Chancery€Court€Affirmed.ó óÐ d ÐÌÌòòHerschel€Pickens€Franks,€Jóó.€delivered€the€opinion€of€the€court,€in€whichòò€Charles€D.€Susano,Ð Ø( ÐJr.,€J.óó,€and€òòD.€Michael€Ô_ÔSwineyÔ_Ô,€Jóó.,€joined.Ð Ä ÐÌÔ#†¼GU»XX *#ÔÔ‡X X»¼GUÔÌEdward€T.€Brading,€Johnson€City,€Tennessee,€for€Appellant.Ð ˆØ ÐÌStanley€F.€Roden,€Knoxville,€Tennessee,€for€Appellees.Ð `!°  ÐÌÌÌà@66'ìàò òOPINIONó óÔ#†¼GU»XX »#ÔÔ‡X X»¼GUԈР%` $ ÐòòóóÔ#†¼GU»XX »#ÔÔ‡ ¼GU»»¼GUÔÔ‡ IóeI» ¼GUÔÌà  àà ` àIn€this€declaratory€judgment€action,€the€plaintiff€made€loans€to€Timothy€L.€And€AprilÐ â&2"& ÐCollins,€which€were€secured€by€trust€deeds€which€were€not€recorded.€€Subsequently,€defendant€madeÐ È'#' Ðloans€to€the€Collins€secured€by€trust€deeds€which€were€recorded.€€Collins€defaulted€on€the€subsequentÐ ®(þ#( Ðloans€and€defendant€foreclosed€on€Collinsðð€property€which€was€sold€to€a€third€party.€€The€partiesÐ ”)ä$) Ðstipulated€documents€which€comprise€the€evidentiary€record,€and€the€Chancellor€ruled€in€favor€ofÐ z*Ê%* Ðdefendant,€and€dismissed€plaintiffððs€action.Ð `+°&+ ÐÌà  àà ` àThe€parties€on€appeal€are€Bankers€Trust€Company€(ð ðplaintiffðð)€and€Commercial€CreditÐ ,-|(-ý ÐÔ_ÔPlan,€Inc.,€(ð ðdefendantðð).€€Plaintiff€is€the€successor„in„interest€to€Advanta€National€Bank,€also€d/b/aÐ ° ÐAdvanta€Mortgage€Corporation,€€although€no€assignment€to€Bankers€of€the€account€in€question€hasÐ –æ Ðbeen€recorded.€€During€the€pendency€of€the€case,€Defendant€changed€its€name€to€CitiFinancial,€Inc.,Ð |Ì Ðand€defendant€Lou€Robertson€was€a€trustee€of€the€deeds€of€trust€held€by€defendant.€€She€was€succeededÐ b² Ðby€Brian€K.€Warren€as€substitute€trustee.€€Defendants€Timothy€Collins€and€April€Collins€are€theÐ H˜ Ðhomeowner€of€the€subject€property€located€in€Knox€County.€€April€Collins€was€non„suited€as€a€resultÐ . ~ Ðof€a€discharge€in€bankruptcy.€€Timothy€Collins€failed€to€appear€and€defend;€a€judgment€on€swornÐ  d Ðaccount€for€$120,986.05€was€entered€against€him.€€Ð ú J ÐÔ#† ¼{»I IêŽ#ÔÔ‡ IêÅI» ¼{ÔÔ#†I“ÏII IêÅž#ÔÔ‡ IêÅIII“ÏԀРà 0 Ðà  àà ` àIn€February€of€1999,€Collins€took€out€a€loan€with€Advanta€for€$87,125.00€and€a€HomeÐ Æ   ÐEquity€Line€of€Credit€for€$15,375.00.€€Both€loans€were€secured€by€deeds€of€trust€on€the€CollinsððÐ ¬ ü  Ðproperty€executed€in€favor€of€Advanta,€but€neither€the€deeds€nor€notes€were€recorded€with€the€KnoxÐ ’â  ÐCounty€Register€of€Deeds.€€The€loan€proceeds€paid€off€an€existing€mortgage€held€by€Sterling€Bank€andÐ xÈ  ÐTrust€Company€(ð ðSterlingðð),€which€filed€a€Release€of€its€deed€of€trust€with€the€registerððs€office€in€JuneÐ ^®  Ðof€1999.€Ð D”  ÐÌà  àà ` àIn€April€1999,€Collins€obtained€a€loan€in€the€amount€of€$93,731.21€from€the€defendant,Ð ` Ðand€executed€two€notes€and€deeds€of€trust€in€favor€of€defendant€on€the€same€property.€€DefendantÐ öF Ðrecorded€both€documents€with€the€Knox€County€Register€of€Deeds€on€April€21,€1999.€€Defendant€inÐ Ü, Ðits€loan€to€Collins€ñÜñagreed€toñÜñ€payoff€ñÝñof€ñÝñthe€Advanta€indebtedness.€€On€April€7,€1999€Advanta€provided€theÐ Â ÐCollins€the€payoff€amounts€on€the€indebtedness.€€Defendant€disbursed€its€check€to€Advanta€in€theÐ ¨ø Ðamount€of€$74,788.00€as€payoffs€for€the€accounts€in€Timothy€Collinsðð€name.€One€month€later,€AdvantaÐ ŽÞ Ðreturned€the€check€tendered€in€payment€of€the€two€loan€accounts€of€Timothy€Collins,€stating€it€wasÐ tÄ Ðunable€to€identify€the€proper€loan€for€applying€the€funds.€€It€did€have€record€of€two€account€numbersÐ Zª Ðin€the€Collins€name,€but€the€check€was€insufficient€to€pay€off€those€loans;€and€was€therefore€returned.€Ð @ ÐÌà  àà ` àIn€June€of€1999€Advanta€declared€the€loan€in€default€and€threatened€foreclosure.€Ð  \ ÐCollins€hired€an€attorney€who€attempted€to€rectify€the€problem,€twice€advising€Advanta€that€CollinsÐ òB Ðstood€ready€to€pay€the€account€and€counsel€had€the€check€in€his€possession,€pending€resolution€of€theÐ Ø( Ðproblem.€€There€is€nothing€in€the€record€indicating€what€action€Advanta€expected€or€what€steps€it€feltÐ ¾ Ðeither€party€should€take€to€conclude€the€matter.€Ð ¤ô ÐÌà  àà ` àThe€record€shows€that€Advanta€received€a€title€examination€of€the€subject€propertyÐ p!À  Ðdated€December€15,€1999.€€The€title€report€prominently€states€that€the€February€1999€notes€and€deedsÐ V"¦! Ðof€trust€in€favor€of€Advanta€had€not€been€recorded.€€The€report€reflected€the€original€Sterling€mortgage,Ð <#Œ" Ðand€reported€were€the€two€deeds€of€trust€filed€by€defendant€on€April€21,€1999,€and€the€lack€of€anÐ "$r# Ðassignment€from€Advanta€to€plaintiff.Ð %X $ ÐÌà  àà ` àDefendant€foreclosed€on€its€interest€and€the€Collins€property€was€sold€by€the€substituteÐ Ô&$"& Ðtrustee€to€a€bona€fide€purchaser€on€July€26,€2000.€€There€are€no€issues€pertaining€to€the€regularity€orÐ º' #' Ðvalidity€of€the€foreclosure€proceedings.€€Ð  (ð#( ÐÌà  àà ` àIn€September€2000,€plaintiff€filed€its€action€for€Declaratory€Judgment.€€Ô#†I“ÏII IêÅ#ÔÔ‡ IêÅIII“ÏÔÔ#† ¼{»I IêÅÎ#ÔÔ‡ IêÅI» ¼{ÔThe€Chancellor€Ð l*¼%* Ðruled€in€favor€of€the€defendant€and€found€that€plaintiffððs€failure€to€record€its€deeds€precluded€any€claimÐ R+¢&+ Ðof€constructive€notice.€The€Court€further€held€that€defendant€had€not€been€unjustly€enriched€andÐ 8,ˆ', Ðdismissed€defendant€from€the€action.Ð ° ÐÌà  àà ` àWhere€only€questions€of€law€are€involved,€the€trial€courtððs€findings€are€reviewed€òòdeÐ |Ì Ðnovoóó€upon€the€record€with€no€presumption€of€correctness€on€appeal.€€òòGuffey€v.€Creutzinger,óó€984Ð b² ÐS.W.2d€219€(Tenn.€Ct.€App.€1998).€€Cases€involving€priority€of€rights€among€lienholders€and€mortgageÐ H˜ Ðholders€where€the€facts€are€undisputed€are€solely€questions€of€law.€€òòATS,€Inc.,€v.€Kent,óó€27€S.W.3d€923Ð . ~ Ð(Tenn.€Ct.€App.€1998).Ð  d Ðò òó óÌà0  àà0` (#(#àTenn€Code€Ann.€ðð€66„26„103ñßñ,€ñßññàñ€providesñàññáññàñ,€ñàññáññâñ:€€ñâñò òñßññÞñ€ñÞññÞñ€ñÞññßññãñÐà 0` (#` (# ÐÌà0  àà0` (#(#àñãñUnregistered€Instruments€Void€as€to€Creditors€and€Bona€Fide€Purchasers:ó óЪ ú ` (#` (# ÐñäñÌñäñà  àà0 ` àAny€of€such€instruments€not€so€proved€or€acknowledged€and€registered€or€noted€forÐ ŽÞ  Ðregistration€shall€be€null€and€void€as€to€Ô_ÔexiñæñsñæñtingÔ_Ô€or€subsequent€creditors€of,€or€bona€fideÐ tÄ  Ðpurchasers€from,€the€makers€without€notice.€€ÐZª ` (#` (# ÐÌà  àà ` àThere€is€nothing€in€the€record€to€indicate€that€the€letter€from€Advanta€to€Collins€wasÐ &v  Ðfurnished€to€defendant.€€The€only€evidence€in€the€record€as€to€what€notice€defendant€had€at€the€timeÐ  \ Ðit€made€the€loan€was€the€document€styled:€ð ðItemization€of€Account€Financedðð€which€sets€forth€theÐ òB Ðamount€of€the€loan,€prepaid€finance€charges€and€registration€fees,€and€a€ð ðSchedule€C:€Paid€to€Othersðð.€Ð Ø( ÐListed€under€this€schedule€is€an€amount€of€$74,788.10€with€payeeððs€name€Advanta,€and€the€reasonÐ ¾ Ðbeing€ð ðpayoff€of€accountðð.€€There€is€simply€no€evidence€that€defendant€had€notice€of€Ô_ÔAdvantaÔ_ÔððsÐ ¤ô Ðmortgage.€€The€property€securing€all€of€the€trust€deeds€has€been€sold€to€a€bona€fide€purchaser€for€value,Ð ŠÚ Ðand€as€a€matter€of€law€is€beyond€the€reach€of€the€parties.€€The€issue€thus€becomes€whether€on€theseÐ pÀ Ðfacts€the€plaintiff€is€entitled€to€any€equitable€relief.€€We€conclude€it€is€not.Ð V¦ ÐÌà  àà ` àSubrogation€is€defined€as€ð ðthe€substitution€of€another€person€in€the€place€of€a€creditor,Ð "r Ðso€that€the€person€in€whose€favor€it€is€exercised€succeeds€to€the€rights€of€the€creditor€in€relation€to€theÐ X Ðdebt.ðð€€òòBlankenship€v.€Estate€of€Bain,óó€5€S.W.3d€647,€650€(Tenn.€1999).€€It€may€arise€by€contract,€byÐ î> Ðapplication€of€equitable€principles€of€law,€or€by€application€of€a€statute.€€òòId.óó€€Ð Ô$ ÐÌà  àà ` àSÔ_ÔubrogationÔ_Ô€is€a€creature€of€equity€whose€jurisprudence€dates€from€Roman€law.€€TheÐ  ð Ðcornerstone€of€the€doctrine€is€the€principle€that€ð ðsubstantial€justice€should€be€attained€regardless€ofÐ † Ö Ðform,€that€is,€its€basis€is€the€doing€of€complete,€essential€and€perfect€justice€between€all€the€partiesÐ l!¼  Ðwithout€regard€to€form.ðð€€òòCastleman€Const.€Co.€v.€Pennington,óó€432€S.W.2d€669,€674€(Tenn.€1968)€Ð R"¢! ÐThe€Court€cited€òòCouch€on€Insurance,óó€ðð€16:21€in€a€general€review€of€the€doctrine€of€subrogation:Ð 8#ˆ" ÐÓ¢ùÓà8  àÐ Ð Ð  Ðà0  àà0` (#(#àTo€entitle€one€to€subrogation,€his€equity€must€be€strong€and€his€case€clear,€since€it€willÐ þ$N $ Ðnot€be€enforced€where€the€equities€are€equal,€or€the€rights€are€not€clear,€or€where€it€willÐ Þ%.!% Ðprejudice€the€legal€or€equitable€rights€of€others.€€Where€equities€are€equal,€there€is€noÐ ¾&"& Ðright€to€subrogationòò.€óó€However,€subrogation€will€not€be€enforced€against€superiorÐ ž'î"' Ðequities.Ð~(Î#(` (#` (# ÐÌòòÓ¢ùÓId.€óóat€675;€òòsee€also,óó€òòLawyerððs€Title€Ins.€Corp.€v.€United€American€Bank,óó€21€F.€Supp.2d€€785,€792€n.Ð >*Ž%* Ð2òò€óó(W.D.€Tenn.€1998).òò€€€óó€The€equities€weigh€in€defendantððs€favor.€€Or,€at€a€minimum€the€equities€areÐ $+t&+ Ðat€least€in€equipoise,€which€will€allow€no€equitable€subrogation.€€òòÐ  ,Z', ÐÔ_ÔóóÌà  àà ` àIn€this€case€the€Advanta€loan€was€transacted€specifically€to€refinance€the€SterlingÐ –æ Ðmortgage;€Advanta€did€not€pay€the€Sterling€debt€through€fraud€or€mistake€and€is€not€entitled€toÐ |Ì Ðsubrogation€to€Sterlingððs€rights€(to€the€extent€they€existed)€on€this€basis.€Ð b² ÐÌà  àà ` àEquitable€relief€may€be€granted€where€one€party€pays€the€debt€of€another€by€mistake,Ð . ~ Ðbut€not€where€the€party€seeking€relief€is€guilty€of€ð ðculpable€negligence.ðð€€òòDixon€v.€Morgan,óó€285€S.W.Ð  d Ð558€(Tenn.€1926).€€As€noted,€plaintiff€failed€to€record€its€documents€for€over€one€year,€and€was€awareÐ ú J Ðof€another€creditorððs€involvement€with€the€same€collateral€as€early€as€April€or€May€1999.€€€DefendantÐ à 0 Ðattempted€to€pay€off€Advanta€pursuant€to€the€figures€provided,€and€Advanta€simply€returned€the€check.€Ð Æ   ÐCollinsðð€counsel€advised€on€at€least€two€occasions€that€the€debt€would€be€paid€and€the€matterÐ ¬ ü  Ðconcluded€as€soon€as€correct€information€was€provided.€€In€response,€Advantaððs€last€communicationÐ ’â  Ðin€the€record€dated€August€5,€1999,€simply€stated:€ð ðThe€payoff€figures€are€incorrect.€€The€payoff€checkÐ xÈ  Ðwas€returned€to€Commercial€Credit€because€the€funds€were€not€sufficient€to€payoff€the€loans.ðð€€ThereÐ ^®  Ðis€no€indication€that€it€would€thoroughly€investigate€the€situation€and€provide€the€correct€information.€Ð D”  ÐPlaintiff€could€have€retained€the€check€with€notification€that€the€amount€tendered€was€insufficient€toÐ *z  Ðpay€off€the€balance,€or€place€the€funds€in€escrow.€€Generally€ð ðwhere€a€partyððs€remedy€was€ð ðin€his€ownÐ ` Ðhandsðð€and€he€fail[s]€to€protect€his€interest,€as€a€general€rule,€neither€a€court€of€law€nor€equity€willÐ öF Ðintervene€on€his€behalf.ðð€€òòLeeper€v.€Cook,óó€688€S.W.2d€94€(Tenn.€Ct.€App.€1985).€€Plaintiff€asserts€thatÐ Ü, Ðdefendant€was€somehow€negligent€when,€having€knowledge€of€the€Advanta€loan,€it€attempted€to€payÐ Â Ðit.€€Next,€it€is€argues€that€defendant€did€not€correct€the€error€by€re„issuing€a€check€in€the€correctÐ ¨ø Ðamount,€despite€there€being€no€evidence€that€it€ever€forwarded€an€accurate€figure€to€defendant.Ð ŽÞ Ðà  àÌà  àà ` àThe€rationale€to€employ€equitable€subrogation€is€to€prevent€unjust€enrichment.€€òòSeeÐ Zª ÐóóRestatement€(3òòrdóó)€of€Property€Mortgages,€ðð€7.6.€€In€this€case€the€Trial€Court€found,€ð ðCommercial€CreditÐ @ Ðhas€not€been€unjustly€enrichedðð.€€The€record€supports€this€conclusion€and€we€decline€to€invoke€theÐ &v Ðdoctrine€of€equitable€subrogation€to€grant€any€relief€to€plaintiff.Ð  \ ÐÌà  àà ` àWe€affirm€the€Judgment€of€the€Trial€Court€for€the€reasons€set€forth€and€remand,€withÐ Ø( Ðthe€cost€of€the€appeal€assessed€to€Bankers€Trust€Company.Ð ¾ ÐÌÌò òó óÌà  àÔ#†I“ÏII IêÅM#ÔÔ‡ IêÅIII“ÏÔÔ#† ¼{»I IêÅ#ÔÔ‡ X'ó X» ¼{ÔÌÌà  àà ` àà ¸ àà  àà h àà À àà  à_________________________Ð .$~# Ðà  àà ` àà ¸ àà  àà h àà À àà  àòòHerschel€Pickens€Franks,€J.óóÔ#† ¼{» X X'ó=#ÔÔ#†¼ »» ¼{N=#ÔÔ‡XAiX»¼ Ô