Wilder v. Williamson

• Court: Tennessee Court of Appeals
• Writing for the Court: SENTER, Judge.
• Citation: Wilder v. Williamson, 126 S.W.2d 341, 22 Tenn.App. 692 (Tenn. App. 1938)
• Decision Date: 05 October 1938
• Parties: WILDER v. WILLIAMSON et al.

126 S.W.2d 341

22 Tenn.App. 692

WILDER v. WILLIAMSON et al.

Court of Appeals of Tennessee, Western Section.

October 5, 1938

Certiorari Denied February 4, 1939.

Appeal from Chancery Court, Shelby County; L. D. Bejach, Chancellor.

Suit by Sale Wilder against L. Y. Williamson and others to enjoin trustees under certain trust deed executed to secure certain notes held and owned by defendant W. M. Bell from selling real estate. From a decree dismissing complainant's original bill, dissolving temporary injunction and ordering reference on question of damages resulting from wrongful issuance of temporary injunction, the complainant appeals.

Decree affirmed, and remanded with respect to matter of damages resulting from wrongful issuance of temporary injunction.

Tom Collier, of Memphis, for complainant.

Ernest Williams, of Memphis, for defendants.

SENTER Judge.

The original bill in this cause was filed by complainant to enjoin the trustees under a certain trust deed executed to secure certain notes held and owned by the defendant W. M Bell, from selling certain real estate in the City of Memphis, Tennessee.

The bill alleges in substance that complainant is now the owner by purchase of the real estate involved; that he was the owner and in possession of the real estate involved by virtue of a deed executed by the heirs at law of Mrs. Rosa T Perren. It is further alleged that Mrs. Rosa T. Perren had obtained a loan of $12,500 on the property and had secured said loan by a trust deed executed to the named trustees in 1926; that subsequent thereto, in 1931, the series of notes secured by the trust deed of 1926 and payable to the Fidelity Mutual Life Insurance Company of Philadelphia, Pennsylvania was renewed by the execution of another series of notes for the same amount and secured by a new trust deed executed by Mrs. Perren on the identical property; that Thomas J. Turley, the named trustee in the trust deed of 1926, sold the 1931 notes to the First National Bank, and shortly thereafter entered a marginal satisfaction of the trust deed of 1926 on the records in the Register's Office of Shelby County, Tennessee.

It is further alleged that upon the death of Thomas J. Turley it was found that he had been guilty of perpetrating numerous frauds, and that there resulted a controversy between the payee of the notes executed to the Fidelity Mutual Life Insurance Company and the First National Bank of Memphis, Tennessee, as to the right of priority, and in that controversy it was adjudged by a consent decree that the First National Bank of Memphis was entitled to priority and was the then owner of the notes aggregating the sum of $12,500 executed by the said Mrs. Rosa T. Perren in 1931, and secured by the trust deed bearing the same date as the notes.

The bill alleged that said decree had no binding effect upon complainant or the heirs at law of Mrs. Rosa T. Perren. It is further alleged that the defendant in the present suit, W. M. Bell, claimed to have purchased said notes secured by said trust deed from the First National Bank, and for which he only paid the sum of $500; that the defendant Bell was not, at the time of his alleged purchase of said notes, an authorized dealer in securities; that he had not paid the state and county license as provided by statute for dealers in securities of this character; and that he was engaged in the business of purchasing and discounting notes and had not qualified to do so by paying the privilege tax as provided by the revenue laws of the State of Tennessee; that being an unauthorized dealer in said securities, he could not legally have the trust deed securing said notes foreclosed by the trustee. Other allegations are contained in the bill which it is unnecessary to refer to at this time.

The bill prayed for a writ of injunction enjoining and restraining the trustees from proceeding with the foreclosure sale as advertised. A temporary writ of injunction was issued.

The defendant W. M. Bell filed a separate answer in which he alleged that he was a bona fide purchaser of said notes; and that he was the owner and holder of the notes secured by the trust deed, aggregating the sum of $12,500 and accrued interest thereon. He denied that he was engaged in the business of discounting and dealing in notes, and that this constituted a single transaction for which he was not liable for the privilege tax as provided by the revenue laws of the State of Tennessee. Pub.Acts 1937, c. 108, art. 2, § 1, Item 56(b). He admitted that he was the purchaser of said notes from the First National Bank and that he paid the sum of $500 for said notes; that at the time of his purchase there were several years delinquent taxes against said property and that the property having been in litigation for some ten years that the delinquent taxes thereon amounted to approximately $9,000, and that the property had depreciated by reason of neglect to repair and that he paid the full value for said notes; that he was the owner and holder of said notes and security therefor as a bona fide purchaser thereof and that complainant was not entitled to any of the relief sought in the bill.

The two substitute trustees in the trust deed filed answers to the original bill, and in which they denied that the First National Bank was not the owner and holder of said notes at the time the same were sold to the defendant Bell, and that they had advertised the property for sale in accordance with the terms and provisions of the trust deed securing said notes, and denied that complainant was entitled to the injunctive relief sought.

There was a motion by the defendants to dissolve the injunction. This motion was predicated upon the theory that the statutory notice had not been given to the defendants of the application for a temporary injunction. Upon the hearing of the motion to dissolve the temporary injunction, the Chancellor denied the motion, but upon the condition that complainant would, within ten days from that date, increase the injunction bond to the sum of $1,000, and that the cause would be tried on oral evidence before the Chancellor. As stated by the Chancellor, the reason for the condition requiring that the cause be heard on oral proof, rather than by depositions, was to expedite the hearing of the cause.

The cause was heard before the Chancellor on oral testimony, without the intervention of a jury. At the hearing of the cause the Chancellor decreed a dismissal of the original bill and a dissolution of the injunction, and ordered a reference on the question of damages resulting from the wrongful issuance of the temporary injunction. From this decree of the Chancellor complainant prayed and was granted an appeal to this court.

There are several assignments of error directed to the action of the Chancellor in holding that the defendant Bell was the lawful owner and holder of the notes and entitled to have the trust deed foreclosed and the proceeds applied to his debt; that his purchase of the notes from the First National Bank, even though he had not paid the privilege tax as provided by the revenue laws of the State of Tennessee, would not deny the right of the trustees, acting under his direction, to advertise and sell the property under the trust deed; and in holding that the failure of the defendant Bell to pay the privilege tax as a dealer in notes and securities can not be availed of by complainant in this cause, for the reason that the defendant is seeking no relief herein; and that such contention could only be relied on in a suit brought by Bell to enforce the collection of said notes and mortgage. By other assignments of error it is contended that the Chancellor erred in decreeing that the former consent decree established the validity of the notes and trust deed in controversy, and also in decreeing that the said consent decree is res adjudicata as to the matters and things in the present suit. By another assignment of error it is claimed that the Chancellor erred in not holding that the 1931 series of notes and the mortgage securing the same were delivered by their maker without consideration to her and are null and void and a cloud upon complainant's title.

The cause was tried on oral testimony before the Chancellor, and there is no bill of exceptions preserving the evidence and former decrees, etc. It is contended by appellant that a bill of exceptions is not necessary since there is a finding of facts by the Chancellor contained in the record, and that the technical record is sufficient to have the assignments of error considered and reviewed by this court on this appeal.

It appears from the pleadings that after the death of T. J Turley it was discovered that he had been guilty of perpetrating numerous frauds, that in handling the transaction of the loan of $12,500 secured by a trust deed on the property here involved, he perpetrated a fraud, in that in 1931 he had Mrs. Perren to execute new notes and a new trust deed on the same property, the notes payable to the Turley-Bullington Mortgage Company of which T. J. Turley was president, and which notes represented the original loan notes, and that these notes are referred to as the 1931 series, secured by the new trust deed executed in 1931; that without the knowledge of the payee of the 1926 series of notes, T. J. Turley entered a marginal release on the 1926 trust deed and sold the 1931 series of notes, secured by the 1931 trust deed on the same property, to the First National Bank of Memphis. When this fraud was discovered after the death of T. J. Turley the Fidelity Mutual Life Insurance Company and the First National Bank of Memphis had litigation in the Chancery Court of Shelby County, and in which the heirs at law of Mrs. Rosa T. Perren were...