Rogers v. Roop

• Decision Date: 13 April 1935
• Parties: ROGERS et al. v. ROOP.
• Court: Tennessee Court of Appeals

92 S.W.2d 423

19 Tenn.App. 579

ROGERS et al. v. ROOP.

Court of Appeals of Tennessee, Eastern Section.

April 13, 1935

Certiorari Denied by Supreme Court. March 13, 1936.

Appeal from Chancery Court, Knox County; J. H. Wallace, Chancellor by Interchange.

Suit by Charles F. Rogers and another against J. B. Roop, who filed a cross-bill. Decree for complainants, and defendant appeals.

Modified and affirmed as modified, and case remanded.

Morse & Morse, of Knoxville, for appellant.

A. E Mitchell, of Knoxville, for appellees.

PORTRUM Judge.

This suit was filed by Charles F. Rogers to specifically perform a contract entered into between Rogers and the defendant J. B Roop, for the exchange of certain real estate in the city of Knoxville. There was no misunderstanding in reference to the consideration passing between the parties. The defendant declined to carry out the contract solely upon the ground that the complainant had not complied with its terms by tendering a good and sufficient warranty deed conveying a marketable title. The complainant tendered what he believed to be a marketable title evidenced by a warranty deed executed by him in a formal manner. This title and the contract is before us, and we are to determine if the complainant has complied with the terms of the contract by tendering a warranty deed conveying a marketable title. The contract reads as follows:

"Article of agreement, made this 28th day of October, 1933, between Charles F. Rogers, party of the first part, and J. B. Roop, party of the second part, witnesseth, that, if the party of the second part shall first make the payments and perform the covenants hereinafter mentioned on his part to be made and performed, the party of the first part hereby covenants and agrees to convey and assure to the said party of the second part, in fee simple, clear of all encumbrances whatsoever, by a good and sufficient warranty deed, with good marketable title in grantors, except as hereinafter provided, the lot, piece or parcel of ground, situated in Knoxville, Tennessee, known and described under house Number 1209 and 1211, Western Avenue, with improvements thereon. It is mutually agreed between the said parties that the consideration for said conveyance is to be $18,000.00 evidenced first by the conveyance to the said party of the first part by the party of the second part of the premises at 1123 Stewart Ave. in Knoxville, Tenn. at a price of $3,000.00, second by the assignment of a certain mortgage for $5,000.00 secured on property at 102 Alfred Street, in Alexandria, Va. the same to be accepted by the party of the first part from the party of the second part, at the sum of $5,000.00, third by the assumption by the party of the second part of a certain mortgage now on the premises conveyed from the party of the first part to the party of the second part, said mortgage being in favor of the Fidelity Bankers Trust Co. for the sum of $7,450.00.

"Under this agreement aforesaid there would be a balance due Mr. Rogers the party of the first part from the party of the second part the sum of $2,550.00 in full settlement. However the said party of the first part agrees to loan the said party of the second part $5,000.00 for three years due on or before maturity, making a net amount to him of $2,450.00 in addition to the balance of purchase price.

"Provided that all taxes and insurance and interest due or past due is to be prorated to the present date Oct. 28, 1933, and further at the closing of the contract of the loan as aforesaid the mortgage to Fidelity Bankers Trust Co. is to be paid and released. Provided also the rents on properties conveyed also be due respective purchasers from this same date.

"In witness whereof the parties of this agreement have hereunto set their hands this 28th day of October 1933 at Knoxville, Tenn.

"[Signed] Charles F. Rogers

"[Signed] J. B. Roop

"Witness: C. A. Morse."

Rogers and Roop were first cousins, and Roop had known the property for many years; it having been in the Rogers family since 1912, in which year Rogers' father constructed a business building upon the property with two storerooms and business rooms upstairs. At the date of the contract, one of the storerooms was occupied by the Roberts' Drug Store, Roberts then being the owner of the encumbered property, and the other room was occupied by the A. & P. Tea Company, or a grocery store, and some of the rooms upstairs were occupied by tenants. When Dr. Roberts purchased this property, Roop expressed a desire for it and stated that he was sorry that he didn't know the property was being sold for he would have liked to have purchased it. When Dr. Roberts defaulted in the payment of his purchase-money notes and the property was to be foreclosed, Rogers wrote Mr. Roop, and due to this communication negotiations were entered into and culminated in the contract above quoted. In the meantime the property had been advertised for sale under the trust deed, and it was understood that Mr. Rogers would buy in the property at the trustee's sale subject to the first mortgage held by the Fidelity-Bankers Trust Company, which sale was to take place on October 30, 1933, and that he would then deed the property to Roop subject to the Fidelity-Bankers Trust Company's first mortgage.

When Dr. Roberts purchased the property from the Rogers' heirs or from the Index Security Company, a Florida corporation, the stock of which was owned by Charles F. Rogers, he financed his purchase by this method: He was to take the absolute title to the property, and then procure a loan from the Fidelity-Bankers Trust Company in the sum of $8,000 secured by a trust deed upon the property as a first lien, and for the balance to execute a second trust deed securing the sum of $14,196 evidenced by two notes, one of $5,000 and the other of $9,196; the latter or last note being due six years from date. These papers were executed on the same date, but before the Fidelity-Bankers Trust Company would accept the trust deed and make the loan, it required a survey of the property to identify it with the title papers. These title papers call for lot No. 10 of Hannah W. Swann's addition to the city of Knoxville, which lot fronted 50 feet on Western avenue (formerly Asylum avenue) and ran back by approximately parallel lines 164 feet to an alley. A brick building covered the front of the lot and extended almost to the rear of the lot, but two wooden buildings were constructed on the rear of the lot and upon the line of the property with a passageway between them. When this survey was made, it was discovered that the building had been constructed 9 inches over on lot No. 11, leaving 9 inches to the west, or adjoining lot No. 9, unoccupied by the building. The Fidelity-Bankers Trust Company declined to make the loan because of this discrepancy, and for fear of complications. The company required a correction, and Dr. Roberts procured from Mr. Ellis, the owner of lot No. 11 and perhaps lot No. 9, and former owner of lot No. 10, a quitclaim deed conveying the 9 inches off of lot No. 11, and in exchange Dr. Roberts conveyed 9 inches off of his lot No. 10, and after the exchange of these deeds a new description was written into the trust deed securing the debt of the Fidelity-Bankers Trust Company; the trust deed was then delivered and the transaction closed. The complainant Rogers was then living in Florida, and he was not present and knew nothing of this discrepancy in the description, so his trust deed was never reformed to comply with the description as given in the first trust deed. He was ignorant of this encroachment at the time he entered into the contract with the defendant.

By arrangement the complainant Rogers came from Florida and Roop came from Norfolk to meet in Knoxville for the sale of this property, and at this meeting this contract was executed, which was the 28th day of October, 1933; prior to this time there had been filed a general creditors' bill in the chancery court against Dr. Roberts to wind up his business as an insolvent business, but Rogers was not a party defendant and had no actual knowledge of the proceeding. This proceeding was superseded by an involuntary petition in bankruptcy filed by Roberts' creditors, but at the time Rogers knew nothing of this. And Roop had no knowledge of these proceedings.

The parties then returned to their homes to await the foreclosure, expecting to immediately return and close the deal by the transfer of deeds. In the meantime Roop was to employ a title expert to examine and report upon the title. The property was foreclosed by the trustee on October 30, and the complainant Rogers became the purchaser and was conveyed the property by the trustee. After November 1 the parties corresponded between Alexandria, Va., the home of Roop, and Jacksonville, Fla., the home of Rogers, and they fixed the 18th of November to meet in Knoxville and close the deal. On this date they met there, and went first to the office of A E. Mitchell, Rogers' attorney, and there they discussed fully the terms of the agreement, and adjusted their mutual obligations under the agreement, and Roop was tendered certain releases to sign and to take to Virginia to procure his wife's signature, and also Rogers' deed to the property, and was expected to turn over $5,000 in cash which he had with him. He was satisfied with the arrangement, but declined to accept the deed and turn over the money until he had consulted his title expert, Mr. C. A. Morse. The parties then went around to the office of Mr. Morse, and he having discovered the 9 inches of encroachment upon lot 11 as above described and the pendency of the bankruptcy proceeding against Dr. Roberts, he questioned the right of the...