author: BROCK, Chief Justice..

text:
    STATE of Tennessee Upon Relation of Dorothy ORR as County Judge of Bedford County, Tennessee et al. v. Monty G. THOMAS, Bedford County Superintendent of Schools, et al.
    Supreme Court of Tennessee.
    Aug. 20, 1979.
    George C. Eblen, Shelbyville, for appellants.
    Jack M. Irion, Shelbyville, for appellees; Bomar, Shofner, Bomar & Irion, Shelby-ville, of counsel.
   OPINION

BROCK, Chief Justice..

This action of mandamus was brought in September, 1977, by the County Judge and Quarterly County Court of Bedford County seeking to compel the Superintendent of Schools and the Board of Education of Bed-ford County to approve a budget for the school year 1977-1978 for a total sum equal to or less than the sum of $4,669,427.00 which the Quarterly County Court had appropriated for the 1977-1978 school budget. After a full hearing on the merits the Chancellor made findings of fact and conclusions of law respecting the relative powers and duties of the governmental agencies involved and declined to issue the writ of mandamus as prayed. The decree of the Chancellor was rendered on September 19, 1977. The proceedings which occurred thereafter and are pertinent here are stated in the brief of the attorney for appellants as follows:

“Pursuant to the terms of the judgment entered by the Chancellor on September 19, 1977, the county court met in special session on September 22, 1977, and disapproved the budget in the amount of $4,893,966.00 submitted by the Board of Education and recessed until the following day for the purpose of permitting its finance committee to meet with the Board of Education in an effort to compromise their differences. This did not occur and the county court met in recessed session on September 23,1977, and without further action by the Chancery Court, approved the Board’s budget of $4,893,966.00. The County Court, therefore, requests a declaratory judgment pursuant to Rule 57 and Tennessee Code Annotated 1101 setting forth its authority to require compliance by the school board in appropriations, thereby terminating any future controversy and uncertainty of each party’s rights.”

Based upon this concession by the appellants, the appellees insist that the questions presented by the mandamus action have become moot and, therefore, that for this reason the judgment of the Chancellor should be affirmed.

It is, of course, well settled that when the issues sought to be presented by an appeal have been rendered moot pending the appeal the appeal will be dismissed. State v. Wagoner, 88 Tenn. 290,12 S.W. 721 (1889); Knott v. Stewart County, 185 Tenn. 623, 207 S.W.2d 337 (1948); State ex rel. Agee v. Hassler, 196 Tenn. 158, 264 S.W.2d 799 (1954); Southall v. Billings, 215 Tenn. 244, 385 S.W.2d 97 (1964). This principle is especially applicable to a mandamus action which is a discretionary remedy in any event. Cantrell v. Golden, 120 Tenn. 204, 109 S.W. 1154 (1908); State v. Trotter, 153 Tenn. 30, 281 S.W. 925 (1926); State ex rel. Michael v. Witham, 179 Tenn. 250, 165 S.W.2d 378 (1942); 52 Am.Jur.2d Mandamus § 71 (1970); 5 Am.Jur.2d Appeal and Error § 771 (1962).

Certain exceptions to this rule are recognized but we do not consider that the instant case comes within those exceptions. See, McCanless v. Klein, 182 Tenn. 631, 188 S.W.2d 745 (1945); New Rivieria Arts Theatre v. State, 219 Tenn. 652, 412 S.W.2d 890 (1967); 52 Am.Jur.2d Mandamus § 71 (1970). We, therefore, conclude that the issues raised in this litigation were rendered moot by the action of the Quarterly County Court of Bedford County in approving the school budget for the year 1977-1978 submitted by the Board of Education in the, amount of $4,893,966.00.

II

Following the hearing, the Chancellor upon motion of the Board of Education and Superintendent of Schools entered an order that after the conclusion of all proceedings in this case, including any appeal, a reasonable fee would be assessed against the plaintiffs, county judge and quarterly county court,

“. . . as a part of the general costs of this litigation.”

The plaintiffs assigned this action of the Chancellor as error and we are constrained to agree with them. The defendants have cited no authority for the assessment of an attorney’s fee as costs against the losing party as the Chancellor has done here. The rule is well established in this state that in the absence of a contract, statute or recognized ground of equity so providing there is no right to have attorneys’ fees paid by an opposing party in civil litigation. Carter v. Virginia Surety Co., 187 Tenn. 595, 216 S.W.2d 324 (1948); Gillespie v. Federal Compress & Warehouse Co., 37 Tenn.App. 476, 265 S.W.2d 21 (1954); Raskind v. Raskind, 45 Tenn.App. 583, 325 S.W.2d 617 (1959); Deyerle v. Wright Manufacturing Co., 496 F.2d 45 (6th Cir. 1974). The claim here asserted by the defendants is not supported by any contract, statute or recognized ground of equity; it must, therefore, be denied.

The order of the Chancellor allowing the defendants to recover attorney’s fees from the plaintiffs as costs is reversed and that claim is dismissed; otherwise, the decree of the Chancellor is affirmed. The costs incurred upon this appeal are taxed equally against the plaintiffs and the defendants.

FONES, COOPER, HENRY and HARBI-SON, JJ., concur.

      . It is, of course, provided by T.C.A., § 27-124, that when an appeal is taken from the judgment of a court of record solely for the purpose of delay or if such appeal is frivolous the appellate court may award damages, including counsel fees incurred by the appellee as a result of the appeal but there is no occasion for application of that statute in this case.


source: Caselaw Access Project

author: FONES, Justice.

license: Public Domain

text:
    STATE of Tennessee ex rel. Thomas E. SHRIVER v. TENNESSEE LAND AND DEVELOPMENT COMPANY, INC. et al.
    Supreme Court of Tennessee.
    Aug. 27, 1979.
    Jordan Stokes, III, Nashville, for appellant.
    H. Fred Ford, Nashville, for appellees.
   OPINION

FONES, Justice.

This quo warranto action was brought to nullify the reinstatement of the revoked corporate charter of The Tennessee Land and Development Company, Inc. The gra-1 vamen of such an action under T.C.A. § 23-2801(3) is that “persons” are acting as a corporation within this state without lawful authority. Whether plaintiff is entitled to the relief sought in this case depends upon the validity of the Commissioner of Revenue’s action on January 21, 1975, in accepting delinquent corporate reports, taxes, interest and penalties, from three persons who were total strangers to The Tennessee Land and Development Company, Inc., whose charter had been revoked in 1950 for failure to file a corporate statement and pay the taxes prescribed by T.C.A. § 67-2801 et seq.

The authority for both the revocation and reinstatement of the corporate charter involved here is found in T.C.A. § 67-2810.

67-2810. Revocation of charter for nonpayment of tax or fee. — The commissioner of revenue is empowered to certify to the secretary of state the name of any corporation which fails or refuses to file any statement of report or to pay any fee or tax herein required, however, no certification shall be issued until such statement, report or tax has remained delinquent for a period of ninety (90) days. At the time of such certification to the secretary of state, the commissioner of revenue shall give notice to the corporation of the action taken.
Thereupon the charter of such corporation or its domestication in Tennessee shall stand as automatically revoked and the secretary of state shall note such revocation upon his records. At any time after date of revocation such charter may be reinstated upon the filing of all statements and the payment of all fees, taxes, penalty and interest due the state, provided however, the title has not been taken by another corporation, and further provided that proof be furnished sufficient to the commissioner of revenue, that no third party will be injured by such reinstatement. [Acts 1923, ch. 31, § 1; Shan.Supp., § 2053allbl; Code 1932, § 4141; Acts 1963, ch. 194, § 5; 1976 (Adj.S.), ch. 743, § 1.]

The controlling issue in this Court is whether any third-parties would be injured by the reinstatement of the corporate charter of Tennessee Land and Development Company, Inc., by three persons having no connection whatsoever with that corporation, nor any authority to act for it. That issue was presented to the learned chancellor on plaintiff’s motion for summary judgment which was denied. Thereafter, additional motions and pleadings were filed and the case came on for trial and terminated in a final judgment adverse to plaintiff, reciting merely that plaintiff failed to carry the burden of proof. On this appeal, following final judgment in the trial court, we may properly reach the assignments of error that support the insistence that plaintiff’s motion for summary judgment was erroneously overruled. See Williamson County Broadcasting Co. v. Williamson County Board of Education, 549 S.W.2d 371 (Tenn. 1977).

The facts relevant to the controlling issue follow. Tennessee Land and Development, Company, Inc. was granted a charter of incorporation by the Secretary of State of Tennessee on June 1,1948. The corporation acquired deeds to thousands of acres of land, principally in Grundy and Sequatchie Counties, which its charter authorized it to do. The record does not reveal the details of those transactions but does [ -reveal that title to vast acreage remained in the corporation at the time of the reinstatement, January 21, 1975. The original incorpora-tors were Fain Gillock, W. B. Staley and D. G. Campbell. It was asserted in the complaint that they along with G. Q. Milwee were the stockholders, directors and officers of the corporation. A copy of the charter is in the record, and defendants do not take issue with the fact that Gillock, Staley and Campbell were the incorporators, but defendants have taken the position that the corporation had no stockholders. That contention appears to be predicated upon an alleged investigation said to have been made by Herbert C. Leeming, Terry J. Aiken and Fred E. Filsoof prior to January 21, 1975, and also in connection with a suit in United States District Court, which investigation failed to disclose any evidence that the corporation had actually issued certificates of stock. We regard that contention as irrelevant to this quo warranto action. The Court can take judicial notice of the fact that Tennessee Land and Development Company could not have obtained deeds to thousands of acres of land without paid in capital or its equivalent, the source of which was necessarily the subscribers for the stock of the corporation or creditors of the corporation.

It is undisputed in this record that title to vast acreage in East Tennessee remained in the corporation’s name on January 21, 1975, and it is elementary that the equitable owners of such assets as the corporation owned were its stockholders, if it was lawfully organized, but if not, then its creditors. Defendants also say that all of the stockholders were dead and that corporations do not have heirs, but of course, stockholders are persons and do have heirs.

On January 21, 9175, Leeming, Aiken and Pilsoof signed and filed with the Commissioner of Revenue, the following unsworn statement:

January 21, 1975
I, Herbert C. Leeming, Terry J. Aiken and Fred E. Filsoof, as officers of The Tennessee Land and Development Company, Incorporated, do hereby state and affirm that if the charter of Tennessee Land and Development Company, Incorporated is reinstated, no third party will be injured by such reinstatement.

Under the circumstances related herein that statement was false and facially had no probative value. The action of the Commissioner of Revenue in accepting it and certifying the reinstatement of The Tennessee Land and Development Company, Inc. and its merger into Peachtree-Cypress Investment Company, Incorporated, a Georgia corporation, in exchange for corporate taxes and reports from three strangers to the corporation was the equivalent of a tax sale of the corporation’s property without due process of law. We declare the reinstatement of the corporation charter of The Tennessee Land and Development Company, Incorporated, and the attempted merger of that corporation with Peachtree-Cypress Investment Company, Incorporated, a Georgia corporation, to be null and void and of no force and effect whatsoever.

The Chancellor noted and defendants observe here that there is nothing in the statute about who may apply for reinstatement. We think the Legislature clearly intended that reinstatement would be available only through persons authorized to act for the corporation whose charter was revoked. That conclusion may be said to be mandated by the statutory requirement that no third party be injured by the reinstatement. If the statute is not given that interpretation its application is fraught with due process problems, where assets may be acquired by interlopers without notice to those persons having interests therein. Stockholders and creditors are third parties within the contemplation of the statute, and, prima facie, they are injured when a corporation with any assets is taken over by interlopers.

The judgment of the trial court is reversed and a decree will be entered in this Court declaring the reinstatement of the charter of The Tennessee Land and Development Company, Inc. and its merger with Peachtree-Cypress Investment Company, Incorporated, a Georgia corporation on January 21, 1975, void. Costs are adjudged against defendants.

BROCK, C. J., and COOPER, HENRY and HARBISON, JJ., concur.


author: BROCK, Chief Justice.

text:
    Joseph D. BALES, Jr. v. STATE of Tennessee.
    Supreme Court of Tennessee.
    Aug. 27, 1979.

      Richard D. Crotteau, James R. Buckner, Chattanooga, for petitioner.
    Robert L. Jolley, Jr., Asst. Atty. Gen., Nashville, William M. Leech, Jr., Atty. Gen., Nashville, of counsel, for respondent.
   OPINION

BROCK, Chief Justice.

We granted certiorari review in this criminal case to determine whether the Court of Criminal Appeals erred in holding that the trial court did not commit reversible error in its instructions to the jury respecting the weight, if any, to be given to evidence that the defendant was found in possession of property recently stolen from the burglarized premises.

The trial judge charged the jury as follows:

“The presumption from the recent possession of stolen property is that the person in possession is the thief, and, if unexplained either by direct evidence or by attending circumstances, it is taken as conclusive, for the general rule is that a presumption of guilt arises from the possession of the fruits of the crime recently after its commission.”

The Court of Criminal Appeals agreed with the petitioner, Bales, that the quoted instruction was clearly erroneous and contrary to the decision of the Court in Bush v. State, Tenn., 541 S.W.2d 391, 397 (1976) in which we said:

“We think it is clearly implicit, if not explicit, from the entire .opinion [in Barnes v. United States, 412 U.S. 837, 93 S.Ct. 2357, 37 L.Ed.2d 380 (1973)], that while the jury may find unexplained circumstances sufficient to invoke the inferred fact and support a conviction, it is not bound to accept the correctness of the inference. It follows that it is improper to instruct a jury that a presumption of guilt arises, that if unexplained, is conclusive . . . .” (Emphasis in original.)

Nevertheless, the Court of Criminal Appeals, Judge Daughtrey dissenting, concluded that the erroneous instruction was rendered harmless by two pages of additional instructions given by the trial judge upon this point. It is clear to us, however, that these additional instructions failed to undo the damage done by the instruction above quoted which is a positive misstatement of the law. Not only do the additional instructions fail to clarify; in our opinion they must have served to further confuse and mislead the jury with respect to evidence that the defendant was in possession of recently stolen property. We conclude that the instructions of the judge upon this issue, taken as a whole, were, at the very least, contradictory and, thus, prejudicially erroneous. In our view, Judge Daughtrey in her dissenting opinion correctly assessed the instructions of the trial judge when she said:

“Nor, in my judgment, can the error be saved by the subsequent and lengthy quotations from the Pruitt [v. State, 3 Tenn. Cr.App. 256, 460 S.W.2d 385] opinion which the trial judge included in his charge. Such quotations from appellate opinions, especially from those parts of opinions meant to analyze applicable law and to elucidate reasons for appellate decisions, are inappropriate to jury instructions, and, indeed, the practice of using lengthy quotations has been disapproved. Henderson v. State, 539 S.W.2d 843, 847-49 (Tenn.Crim.App.1976). The language of appellate opinions, while helpful to the bench and bar in understanding the basis for a particular judicial ruling, can be most un helpful to the lay members of a jury. This case presents a classic example of why this is so. Here the trial judge told the jury that a conclusive presumption must be taken from the fact of unexplained possession of recently stolen property, stating that this is the ‘general rule’ of law. Then the judge informed the jury that there is another (impliedly minority) view that possession gives rise to a permissive inference only. But the trial judge never clarified the matter in his instructions and thus he virtually left the jury hanging on this point of law. At the conclusion of the charge, a reasonably intelligent and attentive juror might well have asked, ‘Well, which is it, Judge, a presumption or an inference? ’
“The juror’s potential confusion is easy to understand in this situation. What the trial court laid down as the applicable rule of law concerning conclusive presumptions was incorrect. But what the judge said by way of qualification concerning prima facie presumptions and permissive inference was not only likely, but virtually certain to cause confusion in the juror’s minds. Surely an instruction so palpably wrong and so potentially confusing, on an issue with such serious constitutional implications (including, indirectly at least, the defendant’s right not to testify), deprives a criminal defendant of due process of law under the state and federal constitutions.”

Our conclusion herein is not contrary to that reached in Turner v. State, Tenn., 541 S.W.2d 398 (1976). In the Turner case, the jury was instructed that possession of recently stolen property raised a presumption of guilt

“ . . . which may be rebutted by direct evidence, attending circumstances, good character, or otherwise. It is for the jury to determine what weight is to be given such evidence.” 541 S.W.2d at 401.

Thus, in Turner, we found that

“ . . . the trial judge charged the inference in permissive terms — ‘may draw an inference’ and ‘but it is not bound to do so.’ ” Ibid, at 402.

In the case at bar there is no permissive language in the trial judge’s initial charge. The only language indicating to the jury that the inference, incorrectly termed a “presumption,” need not necessarily be conclusive is found in that portion of the charge in which the trial judge quoted from Pruitt v. State, Tenn.Crim.App., 3 Tenn.Cr. App. 256, 460 S.W.2d 385 (1970) but, as Judge Daughtrey pointed out in her dissent,

“ . . . the discussion of inferences to be drawn from the fact of possession was posited in much less certain terms, the trial judge having indicated that the view expressed in Pruitt might be no more than the isolated position of an individual appellate judge.”

This quotation from the Pruitt opinion does not, as did subsequent explanatory language in the charge in Turner, negate the trial judge’s instruction that the “presumption” is conclusive. Nowhere in the instructions in the instant case do we find an explanation of the contradiction between the initial charge that the “presumption” is conclusive if the possession of stolen goods is unexplained and the subsequent quotation from Pruitt that

“ ‘ . . . the possession of recently stolen goods gives rise to an inference that the possessor has stolen the goods, it is not ordinarily proof or prima facie evidence of burglary’.” 460 S.W.2d at 392.

Finally, we must note our disapproval of the practice of some trial judges of employing lengthy quotations from the opinions of appellate courts in giving instructions to the jury. See: Henderson v. State, Tenn.Crim.App., 539 S.W.2d 843 (1976); Cohen v. People, 106 Colo. 245, 103 P.2d 479, 479-80 (1940); Knight v. State, 215 Miss. 251, 60 So.2d 638, 640 (1952). Such opinions, because they are not intended to be quoted verbatim as instructions to a lay jury but to explain the factual and legal basis for the decision in a particular case, usually contain too much “legalese” and argument to be suitable as instructions to a jury.

The judgment of the Court of Criminal Appeals affirming the judgment of the trial court is reversed and the cause is remanded to the trial court for a new trial consistent with this opinion. Costs are taxed against the State.

FONES, COOPER, HENRY and HARBI-SON, JJ., concur.

APPENDIX

“Presumption or Inference of Guilt: A more precise discussion of this by, at least, one of our appellate judges takes the position that an inference of guilt may be warranted rather than a presumption, and by way of explanation, says:

‘A presumption and an inference are not the same thing. A presumption being a deduction which the law requires a trier to make; an inference is a deduction which the trier may or may not make according to his own conclusions. A presumption is mandatory; an inference is permissible.
A presumption is compulsory and cannot be disregarded by the jury.
While the possession of recently stolen goods gives rise to an inference that the possessor has stolen the goods, it is not ordinarily proof or prima facie evidence of burglary. There should be some evidence of guilty conduct besides the bare possession of the stolen property before the presumption of burglary is superad-ded to that of the larceny. However, such possession is evidence which may be considered with all the other circumstances of the case as bearing on the question whether the defendant committed the burglary, and there is authority that if the possession is unexplained it may support the conclusion of guilt of burglary. Moreover, when goods have been feloni-ously taken by means of burglary, and they are immediately or soon after found in the actual and exclusive possession of a person who gives a false account, or refuses to give any account, of the manner in which the goods came into his possession, proof of such possession and guilty conduct may sustain an inference not only that he stole the goods, but that he made use of the means by which access to them was obtained When such proof has been made, the defendant has the right to explain his possession in order to rebut the unfavorable inference arising therefrom, and if he fails to give a satisfactory account of his possession, the jury may treat his failure as a fact in proof of his participation in the offense.
Mere proof of possession of property recently stolen during the commission of a burglary does not raise a presumption of guilt as a matter of law. But in some jurisdictions proof of recent possession of the fruits of a burglary is regarded as presumptive or prima facie evidence of guilt of the burglary. In others it is not. It has been said that the fact of possession is evidence of guilt upon which a conviction may properly be returned, unless other facts or circumstances in the case are such that notwithstanding the recent possession, the jury still entertains a reasonable doubt of the defendant’s participation in the burglary, and it is in this sense that the words presumption or prima facied [sic] evidence must be understood when employed in this connection. Thus the term presumption of guilt must be understood as something which authorizes but does not require conviction. Even though it is said that proof of recent possession of property taken from the premises at the time of the burglary raises a presumption of the defendant’s guilt, this seems only to mean that such possession, when established, is a fact from which the defendant’s guilt may be inferred, and not that any burden of proof is thereby cast on the defendant. The inference is strong or weak according to the character of the property, the nature of the possession, and its proximity to the time of the theft. In other words, proof of possession is a circumstance which should be left to the jury, with instructions to give it such weight as they think it entitled to, when considered in connection with all the other evidence, in determining the guilt or innocence of the defendant.
It has also been held that where a breaking, an entering, and a larceny have been committed at the same time by the same persons, and the property or a part of it is shortly thereafter found in the exclusive possession of the defendant, and such possession of the stolen goods is unexplained or falsely denied, this is sufficient to raise an inference that the defendant is guilty of the breaking and entering.
It has long been the rule that an inference of guilt is permissible from the possession of property recently stolen in a burglary, and the inference exists both as to the burglary and the stealing.’ ”

      . See appendix to this opinion.


author: GODDARD, Judge.

text:
    Kathy Smith ATCHLEY v. Allen E. ATCHLEY.
    Court of Appeals of Tennessee, Eastern Section.
    Dec. 21, 1978.
    Certiorari Denied by Supreme Court July 30, 1979.

      H. R. Silvers, Greeneville, for appellant.
    Fred M. Hartman, Greeneville, for appel-lee.
   OPINION

GODDARD, Judge.

This is a suit for divorce which raises significant questions of res judicata and prior suit pending. On July 18,1977, Kathy Smith Atchley, Plaintiff-Appellee, filed this suit against Allen E. Atchley, Defendant-Appellant, seeking a divorce and custody of their minor child, Allen Atchley, Jr. In her complaint she alleged that she and her child “are citizens and residents of Greene County, Tennessee, and have been for six months next preceding the filing of this complaint.” The Defendant appeared specially to contest jurisdiction by a motion to dismiss on the grounds that, first, there was a prior suit pending in South Carolina, and second, that it was res judicata that the Plaintiff was a domiciliary of South Carolina, at least through June 17, 1977. The Chancellor initially granted the motion to dismiss until the divorce action which the Defendant had previously filed in Richland County, South Carolina, was concluded. Upon a motion to reconsider the Chancellor, apparently concerned that the Defendant would keep the South Carolina proceeding in abeyance indefinitely, ordered that the Plaintiff would be allowed to pursue her divorce unless the Defendant’s South Carolina suit was concluded within 30 days after October 24, 1977. The South Carolina divorce was not promptly concluded, and one day after the 30-day period the Plaintiff was granted a default judgment, awarding her an absolute divorce and custody of the minor child.

It is from that judgment which the Defendant has appealed and assigned error. We shall not undertake to reply to the assignments of error seriatim, but prefer to go to what we consider the determinative questions. Before doing so, we will outline the circumstances and proceedings which gave rise to this appeal.

The Plaintiff and Defendant were married on December 20, 1974, in Richland County, South Carolina. One child was bom of this marriage, Allen Atchley, Jr., who was about 15 months old at the time of the filing of this complaint. The parties resided together in Richland County, South Carolina, until November 17, 1976, when it is undisputed that the Plaintiff left their home and took her baby with her. On March 24, 1977, the Defendant instituted a suit for divorce in Richland County, South Carolina, which the Plaintiff never properly answered. Then, on May 26, 1977, the Defendant filed a civil suit against the Plaintiff in the Richland County Court for the wrongful abduction of his child and prayed that the Court issue an injunction requiring the Plaintiff to return the child to South Carolina until final custody of the child was awarded. The Plaintiff, by a motion to dismiss, appeared specially to contest jurisdiction, alleging by affidavit that she and the child were residents of Greene County, Tennessee, and had been since early January 1977. The South Carolina Court then proceeded by way of injunction to grant the father equal temporary custody of the child prior to the time a divorce and final custody were awarded. The judgment of the Rich-land County Court was not appealed and became final.

The Plaintiff did not appear in either of the South Carolina actions, except the above-mentioned special appearance to contest jurisdiction which was decided adversely to her. Instead of obeying the South Carolina injunction to return the child and share equal custody, she filed this action for divorce in Greene County, Tennessee, on July 18, 1977. Meanwhile, in South Carolina, the Defendant’s original action for divorce and his action for wrongful abduction of the infant were combined in the Richland County Family Court pursuant to the creation of the Family Court System under South Carolina’s Judicial Reform Act of 1977. On August 12, 1977, the Richland County Family Court issued a restraining order which purported to restrain Kathy Atchley from prosecuting her divorce action in Greene County, Tennessee, which order she refused to obey.

As previously noted, the Chancellor below dismissed the Plaintiff’s action; then, on a motion to reconsider stayed the action for 30 days, giving the Defendant an opportunity to conclude his prior divorce suit in South Carolina. On November 25,1977, the Chancellor gave the Plaintiff a default judgment for absolute divorce and custody of the child when the Defendant failed to conclude his divorce within the prescribed time. Thereafter, on January 27, 1978, the Defendant was granted a divorce and custody of the child in the South Carolina action. The Defendant therefore complains that the above action of the Chancellor does not give res judicata, effect to the South Carolina determination of the Plaintiff’s residency, and that the suit should have been permanently dismissed because of the prior suit pending in South Carolina.

We are of the opinion that the first issue for consideration is whether Tennessee must give full faith and credit to the June 23,1977, South Carolina determination that the Plaintiff’s residency and domicile was South Carolina and not Tennessee. Article IV, Section I of the United States Constitution requires that the judicial proceedings in each state shall be given full faith and credit in the courts of every other state. This constitutional provision requires that the common-law doctrine of res judicata be applied in one state to a judgment rendered in another state to the same extent that it applied in the state of its rendition. We quote with approval from 47 Am.Jur.2d, Judgments § 1226:

The effect of the full faith and credit clause of the United States Constitution, and of the Act of Congress implementing it, is to make the local common-law doctrine of res judicata a part of the national jurisprudence and operative throughout the federal system, by requiring that the doctrine of res judicata be applied in one state to a judgment rendered in another state to the same extent as it is applied .in the state of its rendition. Hence, the doctrine of res judicata may be applied to a judgment rendered in one state where the action in the second state involves the same subject matter and cause of action, or the same issues determined in the former action. In the former case, the judgment rendered in the one state operates to bar further prosecution of the same cause of action in another state; in the latter ease, it operates to bar a second determination of the same issues in another state. In the latter respect, it has been specifically held that the collateral estoppel division of res judicata is included within the full faith and credit mandate.

If full faith and credit applied then Tennessee must give res judicata effect to the judgment of June 23, 1977. Res judicata, of course, includes the principle of collateral estoppel which requires that any issue actually litigated and determined in the suit to which res judicata applies may not be re-litigated in a later action. Booth v. Kirk, 53 Tenn.App. 139, 381 S.W.2d 312 (1963); Cline v. Cline, 37 Tenn.App. 696, 270 S.W.2d 499 (1954).

The present scenario of divorce and custody proceedings being instituted in separate jurisdictions by estranged spouses is quite common. Article IV, Section I does not require a state to give full faith and credit to a judgment which is void for lack of jurisdiction. Williams v. North Carolina, 325 U.S. 226, 65 S.Ct. 1092, 89 L.Ed. 1577 (1945). In Hamm v. Hamm, 30 Tenn.App. 122, 204 S.W.2d 113 (1947), this Court, citing Williams v. North Carolina, supra, recognized that the courts of one state could decline to recognize a decree of divorce “rendered in another state where, contrary to the findings of the latter state, the courts of the former state find that the plaintiff in the divorce suit had not acquired a domicile in the divorce forum. However, Davis v. Davis, 305 U.S. 32, 40, 59 S.Ct. 3, 6, 83 L.Ed. 26 (1938), held that where the parties to a divorce proceeding both appear and the issue of domicile is specifically contested another state or federal court must give full faith and credit to that determination. The Supreme Court said:

As to petitioner’s domicil for divorce and his standing to invoke jurisdiction of the Virginia court, its finding that he was a bona fide resident of that State for the required time is binding upon respondent in the courts of the District. She may not say that he was not entitled to sue for divorce in the state court, for she appeared there and by plea put in issue his allegation as to domicil, introduced evidence to show it false, took exceptions to the commissioner’s report, and sought to have the court sustain them and uphold her plea. Plainly, the determination of the decree upon that point is effective for all purposes in this litigation. Baldwin v. Traveling Men’s Ass'n, 283 U.S. 522, 525, 526, 51 S.Ct. 517, 518, 75 L.Ed. 1244.

The rule of law established in Davis, supra, is affirmed in Cook v. Cook, 342 U.S. 126, 72 S.Ct. 157, 96 L.Ed. 146 (1951) and Sherrer v. Sherrer, 334 U.S. 343, 68 S.Ct. 1087, 92 L.Ed. 1429 (1948).

Finally, in Durfee v. Duke, 375 U.S. 106, 111, 84 S.Ct. 242, 245, 11 L.Ed.2d 186 (1963), the Court summarized the rule:

However, while it is established that a court in one State, when asked to give effect to the judgment of a court in another State, may constitutionally inquire into the foreign court’s jurisdiction to render that judgment, the modem decisions of this Court have carefully delineated the permissible scope of such an inquiry. From these decisions there emerges the general rule that a judgment is entitled to full faith and credit — even as to questions of jurisdiction — when the second court’s inquiry discloses that those questions have been fully and fairly litigated and finally decided in the court which rendered the original judgment.

Applying the law to the present suit, we hold that the South Carolina judgment of June 23, 1977, which found that the Plaintiff and her son were residents of South Carolina, is entitled to full faith and credit in Tennessee. The Plaintiff appeared specially and litigated that issue. She is bound thereby and is collaterally estopped to assert that her residency was Tennessee during the same period. However, while it may be said that the South Carolina judgment of June 23, 1977, conclusively established that the wife’s and child’s domiciliary was South Carolina until that date, it cannot be said that the adjudication of the domicile question during that period is fully dispositive of the issues before us.

A review of the pleadings — no bill of exceptions was perfected — discloses that a suit for divorce was filed on July 18 alleging a specific act of cruel and inhuman treatment occurring in Tennessee on July 17. And, of course, if the Plaintiff became a domiciliary of Tennessee between June 23 and July 18 that act would confer jurisdiction upon the Tennessee Court regardless of an allegation of residence for six months pursuant to T.C.A. 36-803. In our disposition we will presume that the Chancellor was aware of the state of the law as above set out relative to collateral estoppel, and in the absence of a bill of exceptions we must also presume under our case law that the proof sustains his decree: Wilson v. Hafley, 189 Tenn. 598, 226 S.W.2d 308 (1949); Kyritsis v. Vieron, 53 Tenn.App. 336, 382 S.W.2d 553 (1964). Therefore, despite the res judicata effect of the South Carolina judgment of June 23, 1977, we find that, with respect to that issue, proper jurisdiction was asserted by the Court below.

Two issues remain. First, did the former divorce suit pending in South Carolina deprive the Trial Court of jurisdiction to award a divorce? And second, if not, did the subsequently rendered South Carolina judgment become res judicata, requiring full faith and credit, simply because there was a motion to rehear pending in the Tennessee Court with regard to the previously rendered Tennessee decree?

As to an action in personam or transitory, the prior suit pending issue appears to be settled in this state. Tennessee courts are not bound to stay a proceeding simply because a similar action is pending in another state. The rule is in this type case that the pendency of a suit in a foreign court cannot be pleaded in abatement or in bar to a suit in Tennessee on the same matter. Lockwood & Co. v. Nye, 32 Tenn. 515 (1852); Stoll v. U. S. Fidelity & Guaranty Co., 10 Tenn.App. 539 (1929); 19 A.L. R.2d 301, 316. Another statement of the rule can be found in Hubbs v. Nichols, 201 Tenn. 304, 308, 298 S.W.2d 801, 803 (1956):

“In the application of the doctrine of ‘another action pending,’ each state is regarded as foreign to every other state; and hence, the pendency of an action in personam, or transitory action, in one state cannot, as a general rule, be pleaded in abatement of an action subsequently commenced in another state between the same parties for the same cause of action,” citing many cases. 1 C.J.S. Abatement and Revival § 65, p. 98.

See also: Cockburn v. Howard Johnson, Inc., 215 Tenn. 254, 385 S.W.2d 101 (1964).

As to actions in rem or quasi in rem on the other hand the following distinction was made in Hubbs (201 Tenn. at 310, 298 S.W.2d at 803):

[In rem or quasi in rem ] cases are governed by a different rule because when one court takes into its possession “a specific thing, that res is as much withdrawn from the judicial power of the other, as if it had been carried physically into a different territorial sovereignty.” Kline v. Burke Construction Company, supra, 260 U.S. 226, 43 S.Ct. 79, 81, 67 L.Ed. 226, 24 A.L.R. at page 1081.

However, we are of the opinion that a suit for divorce should not be mechanically classified as an action in personam, in rem, or quasi in rem. We acknowledge that an arguably contrary approach has been taken by the Western Section of this Court in Hamm v. Hamm, supra, but we do not find that case controlling in a discussion of prior suit pending since Hamm was addressing the validity of substituted service by publication. A suit for divorce is not merely an action in personam, 24 Am.Jur.2d. Divorce and Separation § 245, page 400, and “in so far as it seeks to affect the marital relation of the parties, [it] is in rem, or at least ‘quasi in rem ’ because the object is determination of status.” Nelson, Divorce and Annulment, 2nd Edition, § 1.04, page 11. See also: 27A C.J.S. Divorce § 68 pages 236-37.

Another Court, in the case of Perlstein v. Perlstein, 152 Conn. 152, 204 A.2d 909, 911 (1964), likewise hesitated to pigeonhole marital status as having one jurisdictional attribute or another, and said.

[T]he terms “in rem ” and “in personam ” are not apt in describing the character of an action seeking to affect marital status. Such an action is neither an action merely in personam nor a true action in rem. In the constitutional sense it requires, in the forum state, the domicil of at least one of the parties to the marriage. In the determination of jurisdiction to render a decree affecting the marriage status, the search must be for a domicil, not for a status or res. Williams v. North Carolina, 317 U.S. 287, 297, 63 S.Ct. 207, 87 L.Ed. 279. Manifestly, domicil cannot be affected by the type of action instituted.
Moreover, the status of marriage is an intangible res, entirely different from the tangible res of real estate or personal property within the jurisdiction upon which a true in rem action can be based as in cases such as Harris v. Weed, 89 Conn. 214, 221, 93 A. 232, or a quasi in rem action as in cases such as Pezas v. Pezas, 151 Conn. 611, 614, 201 A.2d 192. Thus, if the parties are domiciled in separate states, jurisdiction over the marriage status exists in each state, and under the “res ” theory, the res necessarily exists in each state. The res is not, nor can it be, independently ascertainable as such, apart from domicil. The existence of the status or “res ” in the forum state stems solely from the fact that the domicil of at least one party to the marriage is in that state. Rice v. Rice, 134 Conn. 440, 445, 58 A.2d 523, aff’d, 336 U.S. 674, 69 S.Ct. 751, 93 L.Ed. 957; Cook v. Cook, 342 U.S. 126, 127, 72 S.Ct. 157, 96 L.Ed. 146; note, 96 L.Ed. 152, and earlier annotations therein referred to. If domicil exists in a state, jurisdiction to affect the status of marriage exists in that state, regardless of whether the status does or does not fit into the classic concept of a “res.” See Williams v. North Carolina, supra.

A divorce action, therefore, for purposes of this discussion may logically be said to possess all of these jurisdictional attributes. As analogous evidence of this conclusion is the opinion in Harris v. Turner, 329 F.2d 918, 922 (6th Cir. 1964), wherein the Court said:

[A] divorce action is statutory and is not a proceeding in equity in the traditional sense. As said by the Supreme Court of Tennessee, speaking through the late Chief Justice Grafton Green in Lingner v. Lingner, 165 Tenn. 525, 530, 56 S.W.2d 749, 751: “Although a divorce suit is in the nature of a suit in equity * * * nevertheless a divorce suit is sui generis. The procedure is largely controlled by statute. Pleading and practice in divorce cases, as governed by statute, differ in many particulars from pleading and practice in equity cases generally. * * * ‘such cases stand upon grounds peculiar to themselves, and do not fall within the ordinary rules governing chancery proceedings.’ Hackney v. Hackney, 28 Tenn. (9 Humph.) 450.”

More recently Justice Brock commented on the nature of divorce actions in the case of Chastain v. Chastain, 559 S.W.2d 933, 934 (Tenn.1977):

Although some of our cases contain language to the effect that divorce cases are to be “tried as equity cases” or “according to the forms of chancery,” the substantive law governing divorce in Tennessee is purely statutory; there is no common law of divorce. Both grounds for divorce and defenses against divorce actions are statutory. See Perrin v. Perrin, 201 Tenn. 354, 299 S.W.2d 19 (1957); Mount v. Mount, 46 Tenn.App. 30, 326 S.W.2d 493 (1959).

From the foregoing analysis it appears to this Court that divorce should be viewed as a unique action in the law. Thus, the general rule with respect to the pendency of a suit in a foreign court cannot be rigidly applied on the basis of the jurisdictional nature of the action.

Cases from other jurisdictions have impliedly recognized the distinct nature of divorce actions by creating an independent rule which can be found at 24 Am.Jur.2d, Divorce and Separation § 188, p. 346:

In accord with the general rules concerning abatement for another action pending, it is held that the pendency of a divorce action in one court may require the abatement of a second divorce action in a different court of the same jurisdiction, but that the pendency of an action for a divorce or separation in one state will not require the abatement of an action for a divorce subsequently brought in another state.

See also the cases collected at 19 A.L.R.2d 301, 316. The application of this rule is left to the sound discretion of the trial judge. 24 Am.Jur.2d at p. 347. Moreover, “[T]he right ... to stay ... is one discretionary with the court of the forum, and its exercise or refusal to exercise cannot ordinarily be made the ground for an error unless abuse of discretion is found under the circumstances.” 19 A.L.R.2d 301, 306. We approve of the foregoing rule and think it should be applied in cases such as divorce where the res may be found in different states at the domicile of either party.

As set out above, the Chancellor below first dismissed the wife’s divorce suit pending the outcome in the South Carolina Court. Upon reconsideration, however, the Chancellor was of the opinion that unless this state allowed suit to be brought within certain time limitations the husband “could thwart ... a dissolution of the marriage merely by the device of never bringing the South Carolina case to trial.” The facts reveal that the Defendant failed to conclude his suit within' eight months before the Chancellor’s grant of a default judgment and final decree. We cannot say that the Chancellor’s actions under the circumstances constituted an abuse of discretion.

Defendant also insists that the South Carolina divorce decree, even though rendered subsequent to the Tennessee decree, should be given res judicata effect because of the pendency of a motion to rehear the decree in Tennessee. We first note that this was not a ground set out in the petition to rehear, nor was the petition amended to assert it when the South Carolina decree was rendered. Thus, since this theory was not advanced at the trial level, we cannot consider it here on appeal. Brookside Mills v. Moulton, 55 Tenn.App. 643, 404 S.W.2d 258 (1965); Nashville Gas & Heating Co. v. Phillips, 17 Tenn.App. 648, 69 S.W.2d 914 (1933). Furthermore, we are of the opinion that a motion to rehear in no way affects the finality of a judgment unless that judgment is subsequently overturned. To hold otherwise would produce the anomalous result of giving res judicata effect to a subsequently rendered judgment even though the prior judgment is never modified. We cannot undertake to so confuse the doctrine of res judicata in this state.

In conclusion, we have .not overlooked Appellee’s motion suggesting a diminution of the record. The matters omitted — a motion, response, memorandum opinion and order — were filed after the appeal in this case was perfected and therefore are not properly a part of the record on appeal.

The assignments of error are overruled and the Trial Court affirmed. The cause is remanded to the Chancery Court for Greene County for such further proceedings as may be necessary. The costs of appeal are adjudged against the Defendant and his sureties.

PARROTT, P. J. (E.S.) and FRANKS, J., concur.


author: MATHERNE, Judge.

text:
    Robert MONTGOMERY, Plaintiff-Appellant, v. RESERVE LIFE INSURANCE CO., Defendant-Appellee.
    Court of Appeals of Tennessee, Western Section.
    Feb. 7, 1979.
    Certiorari Denied by Supreme Court Aug. 27, 1979.

      Lewis K. Garrison, Memphis, for plaintiff-appellant.
    Fred M. Ridolphi Jr. and Prince C. Cham-bliss, Jr., Memphis, Armstrong, Allen, Bra-din, Goodman, McBride & Prewitt, Memphis, of counsel, for defendant-appellee.
   MATHERNE, Judge.

His wife having been killed in an automobile accident, the plaintiff, named beneficiary in a life insurance policy issued by the defendant to his wife, sues to recover on the policy. The defendant insists that the application for the policy contains material misrepresentations as to the health of the insured which renders the policy voidable. By its counter-complaint the defendant sought recission of the policy and, therefore, paid into court the full amount of all premiums collected. The trial judge held that certain statements in the application for insurance were material misrepresentations as to the condition of the insured’s health and that these misrepresentations increased the risk of loss. A judgment was, accordingly, entered dismissing the plaintiff’s lawsuit, ordering a recission of the policy, and ordering payment to the plaintiff of all premiums paid on the policy. The plaintiff appeals to this Court under several assignments of error. We will not individually treat each assignment of error, but will consider the entire case on the law and facts.

The application form was completed and signed in the home of the plaintiff. Question 20 of that application reads: “Within the past five years, has any person proposed for insurance * * * (c) consulted or been examined by any physician or other practitioner?” Answer: “No.” Question 19 reads “Has any person proposed for insurance ever had or sought advice or treatment for: * * * i. Epilepsy, mental or nervous ailment?” Answer: “No.”

The facts establish that for several years prior to the signing of the application for life insurance the insured, wife of the plaintiff, had been under psychiatric care. The plaintiff testified that his wife, the insured, had suffered approximately seven nervous breakdowns and that “(s)he was under the care of about three or four different psychiatrists.” The plaintiff testified that he advised the agent that his wife was under the care of a psychiatrist. The plaintiff stated that on the date the application was signed, his wife was under the treatment of a psychiatrist and had been off from her work for about two months. The plaintiff’s wife had been hospitalized numerous times for psychiatric treatment. The insured signed the application directly under language stating that she affirmed all statements therein contained. The plaintiff testified that neither he nor his wife, to his knowledge, read the application at the time it was completed and signed, nor did they read it when a copy of it was returned to them as an attachment to the policy.

An insured has the duty to read the application for insurance and to verify the accuracy of the information therein stated. DeFord v. National Life & Accident Insurance Company (1945) 182 Tenn. 255, 185 S.W.2d 617; Beasley v. Metropolitan Life Insurance Company (1950) 190 Tenn. 227, 229 S.W.2d 146. It has been held that where the agent deliberately omits from the application the insured’s correct medical history and that omission increases the risk of loss, there can be no recovery on the policy where the insured, failing to read the application, affirms the accuracy of the statements therein contained. Hardin v. Combined Insurance Company of America (Tenn.App.1975) 528 S.W.2d 31.

No recovery will be allowed on a policy issued in reliance on a misrepresentation in the application which increased the risk of loss. T.C.A. § 56-1103; Mutual Life Ins. Co. v. Dibrell (1916) 137 Tenn. 528, 194 S.W. 581. We hold as a matter of law that the insured’s history of extensive and repeated hospitalization for psychiatric treatment constituted such disability as would naturally affect the judgment of the defendant in issuing the policy and did increase the risk of loss. Compare Sloop v. Mutual of Omaha Insurance Company (1965) 55 Tenn.App. 656, 404 S.W.2d 265. It matters not what caused the death of the insured. If the misrepresentation increases the risk of loss, the policy is voidable from its inception. Day v. Mutual of Omaha Insurance Company (Tenn.App.1975) 534 S.W.2d 859.

All assignments of error are, accordingly, overruled and the judgment of the trial court is affirmed. The cost in this Court is adjudged against the appellant.

NEARN and SUMMERS, JJ., concur.


author: FRANKS, Judge.

text:
    The MAGNAVOX COMPANY OF TENNESSEE v. BOLES & HITE CONSTRUCTION COMPANY and Gulf Insurance Company. BOLES & HITE CONSTRUCTION COMPANY, Appellant, v. GULF INSURANCE COMPANY, Paul A. Moore Insurance Agency, Inc., Paul A. Moore and Markley Murray, Appellees.
    Court of Appeals of Tennessee, Eastern Section.

    March 6, 1979.
    Certiorari Denied by Supreme Court July 30, 1979.

      Jerry W. Laughlin and John A. Armstrong, Greeneville, for Bowles & Hite Const. Co.; Silvers, Randall & Laughlin, P. C., Greeneville, of counsel.
    Dick L. Johnson, Dick L. Johnson & Associates, Johnson City, for Gulf Ins. Co.
    James A. Weller, Weller, Miller, Carrier & Miller, Johnson City, for Paul A. Moore Ins. Agency, Inc., and Paul A. Moore, individually.
    0. C. Armitage, Jr., Greeneville, for Markley Murray.

       Opinion abridged for publication.

   OPINION

FRANKS, Judge.

In the original action, appellant was required to indemnify Magnavox for a judgment returned against it in a suit for the wrongful death of an employee of appellant’s sub-contractor. Upon payment of the judgment, appellant by cross-action against its insurance carrier, Gulf, and a third-party suit against the insurance agency, Paul A. Moore Insurance Agency, Inc., and its agents, Moore and Murray, sued to recover the sum paid to Magnavox on the theories that appellant’s insurance policy, issued by Gulf, should be reformed to provide coverage for the loss and the insurance company should be estopped to deny coverage existed due to the negligence of its agents in the handling and issuance of the policy or, in the alternative, the insurance agents should respond in damages for their negligence for failing to procure coverage for the loss at the time the policy was written.

Gulf, in its answer, admitted it had issued a policy to the appellant effective January 1, 1967, and relied upon an exclusion in the policy which provided:

This insurance does not apply:

(a) to liability assumed by the insured under any contract or agreement except an incidental contract; .

in denying coverage for appellant’s loss under the policy. Further, it denied estoppel was applicable and pled the statute of limitations and the contributory negligence of appellant’s partners.

The third party defendants answered denying any negligence and asserted they had complied with appellant’s request for insurance and appellant had accepted similar policies in the past without protest and due to this pattern was charged with knowledge of the contents of the policies and was therefore negligent.

The evidence reveals that appellant was a partnership engaged in the contracting business and, in 1960, began entering construction contracts with Magnavox. At that time, appellant was procuring its insurance coverages from the Reed Agency but, from 1964 until the time of the accident resulting in the judgment against Magna-vox, procured insurance coverages from the Moore Agency which purchased or merged with the Reed Agency.

The contract giving rise to appellant’s liability was entered with Magnavox on July 27, 1966. Prior to that time, appellant had entered five or six construction contracts with Magnavox; all of the contracts with Magnavox were on standard forms and contained identical provisions pertinent to this case and the Moore Agency had handled appellant’s insurance coverage during the time some of those contracts were in force. Copies of the contracts came into the possession of the Moore Agency from time to time, including this contract, primarily for the purpose of issuing bonds where bonding requirements existed.

The pertinent provisions of the contract with Magnavox include the following:

ARTICLE 15 — LIABILITY TO OTHERS

The contractor shall at all times indemnify, defend and hold Owner harmless from any and all actions, claims, demands, costs, damages, penalties or expense of any kind arising out of, or in connection with, injury (including death) to any person or damage to any property that may occur or that may be alleged to have occurred, during or in connection with performance of this Contract, whether such claim shall be made by an employee or agent of the Contractor, or by a third person, and whether or not it shall be claimed that the alleged damage or injury (including death) was caused through a negligent act or omission of the Contractor, his officers, his agents or employees, or otherwise; and, at his expense, the Contractor shall defend any and all such actions and pay all costs, expenses and judgments arising therefrom.

ARTICLE 16 — CONTRACTOR’S INSURANCE

A. The Contractor shall not commence work until he has furnished two (2) copies of insurance certificates acceptable to Owner, certifying that he has obtained the required insurance and that such insurance shall not be can-celled or materially changed without fifteen (15) days prior written notice from his insurance carrier to Owner:
1. . . .
2. Liability Insurance — The Contractor shall maintain during the life of this Contract, Comprehensive General Liability Insurance as shall protect himself, Owner, and any subcontractor from any and all claims for damage or loss for personal injury (including death) as well as for claims for property damage or loss which may arise from operations under this Contract, whether such operations be by himself or a subcontractor, or by anyone directly or indirectly employed by either of them, or in such a manner as to impose liability on Owner. The amounts of such insurance shall be as follows:
Bodily Injury Insurance — In the amount of not less than $300,000.00 for injuries, including accidental death, to any one person; not less than $500,-000.00 per occurrence.
Property Damage Insurance — In an amount not less than $100,000.00 per occurrence.

The Moore Agency, pursuant to Article 16, would issue certificates of insurance, coverage to Magnavox and issued such certificates on January 12, 1967, certifying that the policy issued by Gulf, effective January 1, 1967, was in full force and effect. The policy issued by Gulf provided identical coverages to the prior policies issued through the Moore Agency to appellant. Gulf’s policy was for a period of 12 months and was a comprehensive general liability policy for contractors with the premium based on the total expended under the contracts.

On February 1, 1967, William Phelps, an employee of appellant’s sub-contractor, while working pursuant to appellant’s contract with Magnavox, was electrocuted and the damages for his wrongful death were ultimately adjudged to be the joint responsibility of Magnavox and the Johnson City Power Company, for which appellant was required to indemnify Magnavox under the terms of Article 15 of the contract, supra.

Appellant insists that the Chancellor erred in refusing to reform the policy so as to provide coverage for its damages. The Chancellor in dismissing this suit found, and the record supports, that appellant and the insurance agents did not discuss “contractual insurance” at any time prior to the loss and relied upon Hardison Seed Co. v. Continental Casualty Co., 56 Tenn.App. 644, 410 S.W.2d 729 (1966).

Appellants rely upon the case of Henry v. Southern Fire & Cas. Co., 46 Tenn.App. 335, 330 S.W.2d 18 (1959), wherein the court, in discussing the duties of an insurance agent, stated:

In our opinion it is not necessary to determine in just what manner Dr. Cox [the insurer’s agent] was in error; that is, whether he misconstrued the contracts; or forgot about the provisions of the motor vehicle policy excluding coverage when the truck was pulling a trailer not covered in the policy; or forgot the provisions of the Manufacturers’ and Contractors’ policy excluding coverage when the accident involved an automobile or truck away from the premises of the sawmill itself; or forgot to include the trailers in the motor vehicle policy; or simply failed to obtain sufficient information from the complainants to enable him to write policies giving the complainants full liability coverage. The result was the same to the complainants. They were lulled into a false sense of security. They were misled to their prejudice.
330 S.W.2d at 30.

The federal case of Bituminous Fire & Marine Ins. Co. v. Izzy Rosen’s, Inc., 493 F.2d 257 (6th Cir. 1974), quoted with approval by our Supreme Court in Dallas Glass of Hendersonville, Inc. v. Bituminous Fire & Marine Ins. Co., 544 S.W.2d 351 (Tenn.1976), reconciled the Henry and Har-dison decisions by noting that in the former the doctrines of estoppel or negligence were applied to an exclusionary clause while in the latter the doctrines were insufficient to add an entirely new type of coverage. Dallas Glass noted this principle in quoting 45 C.J.S. Insurance § 674a, as follows:

As a general rule, the doctrines of waiver or estoppel can have a field of operation only when the subject matter is within the terms of the contract, and they cannot operate radically to change the terms of the policy so as to cover additional subject matter. At p. 353.

The evidence establishes that appellant, while not specifically requesting contractual liability coverage, repeatedly requested the Moore Agency to provide complete liability coverage for appellant’s contracting business.

[Paul A.] Moore, in his testimony, explained how he went about determining the coverages required by appellant as follows:

Q. Now, at the time that this was written, can you tell me whether or not you had any conversation with Mr. Hite— what insurance was requested and what was done?
A. Well I can surmise pretty much.
MR. JOHNSON — I’m talking about the time that it was originally written with Aetna C & S.
A. In the usual sequence of events in this situation is the only thing I could say — what I would do ordinarily. When Paul Hite offered to let me write his business I probably called the Aetna C & S Special Agent, which would be what I would do today on an account of this kind. I would ask him to bring me all of his policies. I would review them, and go over them with the special agent, who would then, together with me, fill out the proper application for coverage.

When the insurance was changed by the agent to Gulf, effective January 1, 1967, Moore made the following explanation:

Q. Was anything special done in switching it, or did you just write new policies on Gulf?
A. Well, I probably would have followed the same procedure — call Charles Link, he was special agent with the A. L. Williams Agency, who is the underwriting agency for Gulf Insurance Company in Tennessee.
Gulf doesn’t have a branch office in Tennessee. They use the A. L. Williams General Agency for their underwriting, and Charles Link is the special agent.
I probably called Charles Link and went through the same procedures that I would—
Q. And reviewed the old policies with him?
A. Yes, sir, and through his efforts and my efforts together we made new applications.
Now, I’m not saying that this happened, but that would be the procedure that I’ve always used.

[Emphasis supplied.]

It may be reasonably inferred that Moore followed the procedure outlined since Gulf called no witnesses to refute or clarify this evidence and it should be noted at that time Gulf had filed a third-party complaint against the Moore Agency seeking recovery for Moore’s negligence should Gulf be held liable under its policy with appellant.

The agent’s reason for not providing contractual liability coverage may be found in Moore’s responses to the following questions by the court.

Q. Did you ever discuss the famous Article 15 with Mr. -Hite?
A. No, sir.
Q. Do you know what I mean by Article 15?
A. In that contract?
Q. Yes, sir, the one that the Court of Appeals bound Boles & Hite to indemnify Magnavox?
A. Yes, sir, I’ve read it now. I’ve read it since then.
Q. But you were not aware of it back in ’66 and ’67?
A. No, sir.
Q. Did you ever discuss it with Mr. Hite?
A. No, sir.
Q. Did you ever discuss with Mr. Hite his potential liability, Mr. Moore, under the assumption of contractual liability provision, other than with this incident in question. Down through the years, was the question raised?
A. Prior to this, no, prior to this litigation I had not. It had been our instruction from — through our insuror’s organization, through mutual agencies, associations which we belonged — you know, we get all the Court decisions sooner or later in these bulletins, and more and more Courts had been holding that hold harmless agreements were not in the best interest of the public, therefore they weren’t valid, and I think that’s the way you held in this particular instance, which was reversed by the Court of Appeals. I didn’t see any exposure there, actually.

Moore further testified that at the time the policy was written, contractual liability insurance coverage was available in Tennessee for a nominal premium and, in fact, was subsequently added to appellant’s coverage. Moore was aware of appellant’s operations, of the existence of contracts with Magna-vox which were at his disposal, and we conclude when he undertook to provide appellant with complete liability coverage he had a duty to ascertain the required coverages and it was beyond his authority to unilaterally reject contractual liability coverage on his perception that there was no exposure under hold harmless agreements but should have provided this coverage or seasonably called the possible exposure to appellant’s attention, for its acceptance or rejection.

Moore’s omission is likewise the responsibility of the insurance company. Our Supreme Court noted in the case of Vulcan Ins. Co. v. Segars, 216 Tenn. 154, at page 164, 391 S.W.2d 393 pages 397-98 .(1965) that the negligence or the mistake of an agent within the scope of his authority is the responsibility of his principal, the insurance company, and stated:

With respect to such a situation it is said in Vance, Insurance, 3rd Ed., Anderson, Section 89, page 540:
‘After all, the man on the street purchases his insurance policy in very much the same way that he purchases his automobile or his reaper or other chattels. He knows no more about the making of a contract of insurance than he does about the making of an automobile, and he naturally relies upon the skill and good faith of those who hold themselves out to be experts in such matters, by advertising their wares for sale. It would seem to be the clear duty of the insurer, professing to draw an instrument protecting the applicant’s property against certain defined perils, to exercise due diligence to supply a policy which will effect the purpose intended. Any damage caused to the applicant through the agent’s mistakes or negligence in making inquiries that he should know to be pertinent should rest on the insurer. The situation seems to be strikingly analogous to that expressed in the familiar rule of the law of sales to the effect that a vendor supplying an article which he knows is to be used for a specific purpose impliedly warrants that the article furnished is suitable for that purpose.’

This is reinforced by the inference that Gulf’s specialist participated in the preparation of appellant’s application for the policy.

We conclude that the facts of this case fall within the rationale of the quoted portion of Henry, supra and, as Henry noted, an insurance company is estopped to take advantage of a condition which its agent, by mistake or negligence, failed to handle properly in the policy.

The insured, by trusting in the skill and competence of the agent and paying the premiums for expected protection, would be prejudiced if the insurance company were allowed to assert the condition avoiding liability.
Henry, 46 Tenn.App. p. 365, 330 S.W.2d p. 32.

This principle is recognized in Hardison Seed, which states the doctrine of estoppel may be the basis of recovery, “where the loss was within the coverage provided by the insuring clauses of the contract. Dickens v. St. Paul Fire & Marine Ins. Co., 170 Tenn. 403, 95 S.W.2d 910; Baird v. Fidelity-Phenix Fire Ins. Co., 178 Tenn. 653, 162 S.W.2d 384, 140 A.L.R. 1226; Commercial Standard Ins. Co. v. Paul, 35 Tenn.App. 394, 245 S.W.2d 775; T. H. Hayes & Sons v. Stuyvesant Ins. Co., 194 Tenn. 35, 250 S.W.2d 7; Hully v. Aluminum Co. of America, supra, [D.C., 143 F.Supp. 508]; and Henry v. Southern Fire & Cas. Co., 46 Tenn. App. 335, 330 S.W.2d 18.” [56 Tenn.App. pages 652-3, 410 S.W.2d page 733.]

The coverage provided in the policy in the insuring clause is as follows:

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury . to which this insurance applies, caused by an occurrence .

“An occurrence” is defined:

‘Occurrence’ means an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury . . . neither expected nor intended from the standpoint of the insured;

Under “Exclusions”, the policy contains the exclusion set out in Gulf’s answer to the cross-claim, supra.

We conclude that the insurance company is estopped to rely on the exclusion in its contract excluding contractual liability coverage. The insuring clauses, in the absence of the exclusion, would provide coverage for this loss. That the coverage is broad enough to cover contractual liability, absent the exclusion, is denoted by the exclusion which expressly retains coverage for liability assumed under incidental contracts.

Finally, defendants argue that appellant was guilty of contributory negligence in accepting the policies without protest over a period of time. In this regard, appellant Hite testified:

Q. And did you read the policy or look at it?
A. Yes, I always do, but as I said, I don’t know too much about insurance.
Q. Did anyone at Magnavox ever explain to you what insurance you needed under this contract?
A. No, I was always telling my agent to contact Mr. Waddell [an employee of Magnavox] and see what insurance we needed to cover me and whoever had to be protected.

Hite and Moore were friends; Hite’s full trust in Moore is explicit from the evidence. Appellant’s contracts, many of its policies and other records were left in possession of the agency and Hite periodically admonished Moore to provide complete liability coverage for the construction company. Under these circumstances, we conclude appellant was lulled into a false sense of security and the acceptance of the policy was not negligence that would bar recovery. On this issue, Henry quotes the earlier case of this court, Commercial Standard Ins. Co. v. Paul, 35 Tenn.App. 394 at 404-5, 245 S.W.2d 775 at 780,:

In such a case the insurer is not entitled to invoke the rule that the negligence of the insured in failing to read and understand the policy, and in retaining it, will preclude relief in equity. It will not work an estoppel upon the assured. In 26 C.J. 107, the rule is stated that a mere failure to read the policy, especially if it is a renewal, is not such negligence that would defeat the right to reformation. [Citations omitted.]
See also City of Lawrenceburg v. Casualty Co., 16 Tenn.App. 238 at 248-9, 64 S.W.2d 69 (1933).

We hold that Gulf is estopped to rely on the exclusion in the policy and appellant’s loss is covered under the policy.

The defense of statutes of limitations was not reached and decided by the trial judge. We reverse the action of the trial court in dismissing this cause and remand for a determination of whether recovery is barred by statutes of limitations and entry of judgment.

Costs incident to the appeal are assessed against appellees.

PARROTT, P. J., and SANDERS, J., concur.

      . For cases reporting that suit, see Phelps v. Magnavox Co. of Tennessee, 62 Tenn.App. 578, 466 S.W.2d 226 (E.S.1970); Phelps v. Magnavox Co. of Tennessee, 497 S.W.2d 898 (Tenn.Ct. App.W.S.1972).


author: NEARN, Judge.

text:
    BOARD OF EDUCATION OF the MEMPHIS CITY SCHOOLS, Appellee, v. The MEMPHIS PUBLISHING COMPANY, d/b/a the Commercial Appeal and the Memphis Press Scimitar, Michael Grehl, Editor of the Commercial Appeal, and Milton R. Britten, Editor of the Memphis Press Scimitar, Appellants.
    Court of Appeals of Tennessee, Western Section.
    April 18, 1979.
    Certiorari Denied by Supreme Court Aug. 6, 1979.
    Walter P. Armstrong, Jr., Fred M. Ridol-phi, Jr., Memphis, for appellants.
    Ernest G. Kelly, Jr., Memphis, for appel-lee.
   NEARN, Judge.

This is a suit for declaratory judgment.

A vacancy occurred in the position of Superintendent of City Schools for the City of Memphis. The Board of Education of the City of Memphis is charged with the responsibility for filling such vacancy. Therefore, the Board established a Search Committee, composed of private citizens, to screen applicants for the vacant position and refer a number of selected candidates to the Board.

The Memphis Publishing Company, which does newspaper business as The Commercial Appeal and the Memphis Press-Scimitar, through its reporters sought access to the meetings and the records of the Committee. The records consisted primarily of the applications of those seeking the position of school Superintendent. Access was refused by the Committee.

The Board of Education filed its complaint against the publishing company and the editors of its newspapers to determine if; (a) T.C.A. 8-4401 et seq., commonly known as the “Sunshine Law,” required that Search Committee meetings be open to the public; (b) whether the Public Records Law, T.C.A. 15-301 et seq., applied to personnel files of applicants in the hands of the Committee and (c) whether the laws are superseded by the restrictions of 20 U.S.C. § 1232g commonly known as the “Buckley Amendment”.

The defendants answered and admitted the facts. However, defendants denied the conclusions of plaintiff and asserted that both the Sunshine Law and the Public Records Law applied, but that the “Buckley Amendment” did not. In addition, the defendants sought affirmative relief in that an injunction was sought to enjoin the Search Committee from holding any meetings without complying with the Sunshine Law.

The Chancellor granted the injunction and decreed that (a) the Sunshine Law applied and (b) the personnel files of applicants for the position of Superintendent are not public records within the meaning of the Public Records Law of Tennessee. The Court made no ruling on the “Buckley Amendment” question.

Only the defendants appeal. They charge the Court with the single error of holding that the Public Records Law did not apply in this case. Therefore, that is the only issue which we will review on appeal.

In the final decree the Chancellor held: “that the personnel files of applicants for the position of superintendent of the Memphis City Schools are not public records and that, consequently, the public records laws of Tennessee do not apply to them.”

We hold that the personnel files in the hands of the Search Committee of applicants for the position of Superintendent are public records within the meaning of portions of Title 15 of our Code (generally referred to as the Public Records Law) and, therefore, portions of Title 15 apply thereto.

Title 15 of our Code consists of five chapters. These five chapters appear to us to be an all encompassing legislative attempt to cover all printed matter created or received by government in its official capacity and whether intended to be retained temporarily or retained and preserved permanently. The five chapters, when read together, evince a clear legislative recognition of the different types of records. There are first (Chapter 1) those records which have historically been termed “Public Records”. These records consist of Court records and land title records which must be retained, preserved, and available to all citizens for the public welfare and tranquility. These ai*e the types of records that are admissible in evidence in Court proceedings by simply showing that they were properly recorded. See T.C.A. 15-118. It is significant to note that several of the sections of Chapter 1 have their origin as early as 1805 when this state was in its infancy.

By about 1871 it would seem that the Chapter 1 records were piling up unsyste-matically in courthouse basements. As a result, Chapter 2 was initiated by which the legislature required custodians of Chapter 1 records to index them in an orderly fashion.

Neither Chapter 1 nor Chapter 2 applies to the records in question.

Chapter 3 is of more modern vintage, 1947. It is evident from reading the Chapter that the legislature intended the Chapter to apply to records other than Chapter 1 and 2 “Public Records”. Section 301 refers to “any or all records”. Section 304 provides that “[a]ll state, county and municipal records shall at all times, during business hours, be open for personal inspection by any citizen of Tennessee, and those in charge of such records shall not refuse such right of inspection to any such citizen, unless otherwise provided by law or regulations made pursuant thereto.” There is no need for Section 304 as to Chapters 1 and 2 “Public Records”. Such records, as contemplated by Chapters 1 and 2, have been open for public view since there were such records and must be or they are useless. Section 304 therefore applies to records other than Chapters 1 and 2 “Public Records”. This is abundantly clear when one reads Section 305 which refers to certain exceptions, such as state hospital records. Patient state hospital records are certainly not Chapters 1 and 2 “Public Records”, but the legislature was aware that, had it not excluded patient records by Section 305, such records would be included under Section 15-304.

Were it not for the exclusion of Section 305, state patient medical records would be included under Section 304 as records “open to public inspection”. Although such records are not “Public Records” under the sense of Chapters 1 and 2, they are nonetheless records of public bodies and open to public inspection but for the exceptions granted by Section 305. Although we are not here dealing with state hospital records, the analogy is proper. If state patient hospital records would be open to public inspection but for Section 305; how can it be said that applications for municipal school Superintendent are closed to public inspection without a specific exemption statute?

All arguments of the appellee to the effect that the records in question are not “Public Records” are of no avail. There are at least three types of records that we are able to perceive which are kept by public agencies: first, the true “Public Records” (Chapters 1 and 2); second, agency records, although not Chapters 1 and 2 “Public Records”, but are records which are open to public inspection (Chapter 3); and third, those records which are statutorily declared confidential and excepted to the “open to public inspection” records (Chapter 3).

In this case it has been held that the records in question were in the hands of a public body. The records sought were those records and applications in the hands of the Search Committee. The applicants sought employment with a public body. The applications were received by that body in its official capacity in connection with aforesaid business. Those applications became part of that body’s records.

Chapters 4 and 5 of Title 15 provide for orderly disposition of public records; are later still in origin and are an attempt to keep the governmental Ark afloat on the vast sea of “paperwork” being ever expanded by outpourings of bursting clouds of ubiquitous regulations and computer printouts.

As indicated, portions of the “Public Records” law do apply to the records in the hands of the Search Committee. A citizen has the right to review those records under T.C.A. 15-304 and we reverse the contrary holding.

Costs of appeal are adjudged against appellants.

Done at Jackson in the two hundred and third year of our Independence and in the one hundred and eighty-fourth year of our Statehood.

SUMMERS, J., not participating.

EWELL, J., concurs.