text:
    Woodson H. VANCE, Petitioner, v. Emanuel SCHULDER et al., Respondents.
    Supreme Court of Tennessee.
    March 14, 1977.

      Robert H. Goodall, Gallatin, James Dono-ho, Hartsville, Arthur E. McClellan, Galla-tin, for petitioner.
    James M. Maniré, William W. Dunlap, Jr., Memphis, for amicus curiae Lloyd E. Clarke.
    Herbert R. Rich, Nashville, for respondents.
    George E. Morrow, Martin, Tate, Morrow & Marston, James W. McDonnell, Jr., Marion S. Boyd, Jr., Susan M. Callison, Canada, Russell & Turner, Memphis, for amicus curiae Kemmons Wilson, Wallace E. Johnson, Harris, Kerr, Forster & Company.
   OPINION

FONES, Justice.

The principal issue in this Court is the appropriate statute of limitations applicable to a suit based upon alleged fraudulent representations said to have induced the sale of stock for less than its value.

The five (5) individual defendants were the directors of Hartsville Manufacturing Corporation and of Consolidated Merchandising Corporation. Defendants owned substantially all of the stock of Consolidated Merchandising Corporation and ninety (90%) percent of the stock of Hartsville. Plaintiff, Woodson Vance, owned ten (10%) percent of the stock of Hartsville. Plaintiff filed suit June 23, 1972, alleging that one of defendants, Paul Schulder, “falsely and fraudulently and with intent to deceive and defraud plaintiff” represented on June 18, 1968, that U. S. Industries, Inc. had offered to purchase Hartsville for $360,000; that said representation was false and known by all of defendants to be false; that in fact U. S. Industries had offered the defendants $708,000 for all of the stock of Hartsville; that plaintiff was induced to sell his ten (10%) percent interest in Hartsville for $36,-000 and that by reason of defendants’ misrepresentation he suffered damages in the amount of $34,800.

Defendants denied that any false representation was made and asserted that in fact no separate sum for Hartsville stock was offered or paid by U. S. Industries; that the complaint showed upon its face that it was barred by the statute of limitations, and other defenses.

The material evidence adduced at the trial was as follows:

Hartsville was originally a cabinet shop in which plaintiff was a one-third partner. In 1959 defendants, or a wholly owned corporation of which they were directors and stockholders, bought fifty (50%) percent of Hartsville and later purchased an additional forty (40%) percent with plaintiff retaining ten (10%) percent. Plaintiff was the plant manager and was paid a weekly salary and received an annual bonus of three (3%) percent of the profits before taxes. His contacts with defendants and the parent corporation owned by them were limited almost entirely to Paul Schulder who came to Hartsville frequently and plaintiff was in touch with him on the phone almost daily. The corporate books were kept in New York but he received annual statements and balance sheets from the company. He acknowledged that he could read a financial statement. He testified that Paul Schulder came to Hartsville on June 18, 1968, and told him that the parent corporation, Consolidated Merchandising, had a chance to sell all of the stock of Hartsville; that in order to do so they needed his stock; that they were going to sell to U. S. Industries for $360,000. Plaintiff agreed and executed a ninety (90) day option to sell his stock in Hartsville to defendant for $12,000 cash, $12,000 in sixty (60) days after the exercise of the option and the balance ninety (90) days thereafter. The option was exercised on July 16, 1968.

It was also a part of the agreement that plaintiff would continue as plant manager after the sale to U. S. Industries. Plaintiff testified that in February, 1972, he learned for the first time that U. S. Industries had paid approximately twice the figure of $360,000 for the stock of Hartsville.

Phillip Holder, a certified public accountant testified for the plaintiff. He had no personal knowledge of the negotiations but he had examined the agreement and plan of reorganization between U. S. Industries and Consolidated Merchandising Corporation and the balance sheets and earnings statements of the selling corporation and its six (6) subsidiaries for the purpose of giving his opinion of the value that U. S. Industries might have placed upon the Hartsville stock in arriving at the total sum paid for the seven (7) corporations. The only figure appearing on the face of the sale agreement was the total selling price paid at the time of closing, June 25,1968, which was $4,867,-000. This sum was to be paid by issuing its equivalent in value of U. S. Industries common stock at its closing price on the New York Stock Exchange on said date. The agreement provided that U. S. Industries would issue and deliver to Consolidated Merchandising additional shares for each of the calendar years 1968 through 1972 wherein pre-tax profits exceeded specified amounts. In accordance with the formula specified in the contract additional shares having a value of $1,926,232 were received by Consolidated in 1969 and $1,428,717 in 1970. No additional shares were due in 1971 or 1972 and thus the total sum received for the seven (7) corporations, paid in shares of stock of U. S. Industries, was $8,221,949. The witness Holder compared Hartsville’s book value and performance with that of the Consolidated group, using four different methods of accounting which produced values ranging from $582,837 to $762,218. He conceded that these figures did not give any consideration to intangibles, such as good will, trade names owned by corporations in the group other than Hartsville, nor to any advantages or disadvantages of the sale of seven (7) corporations in one package.

Defendant Paul Schulder denied telling plaintiff that the company would be sold for a specified sum. He said that the book value of Hartsville at the time of sale was approximately $230,000 but the Board of Directors decided that for the purpose of purchasing plaintiff’s stock they were willing to consider that the book value was $360,000; that said value had no relation to any figure placed on Hartsville stock to be paid by U. S. Industries; that no separate value was established for the Hartsville Corporation either in the negotiations or the documents. He emphasized the fact that payment by U. S. Industries was not in cash, which plaintiff received, but in U. S. Industries stock; that restrictions were placed upon the sale of that stock in the hands of the sellers; and that the only assured payment was the $4,867,000, in stock issued June 25, 1968.

The learned Chancellor held that any statute of limitations applicable had been tolled because plaintiff had not discovered the fraud until a few months before the complaint was filed. He found that a fraud had been perpetrated on plaintiff and entered judgment for $34,800 plus interest.

The Court of Appeals reversed finding T.C.A. § 28-305, the three (3) year statute of limitations for tortious property damage, to be applicable and not tolled because plaintiff had not exercised reasonable diligence in attempting to discover the fraud. We agree with the results reached by the Court of Appeals on both issues.

Plaintiff testified that Schulder showed him brochures from U. S. Industries, but admitted that he made no inquiry about any of the details of the proposed sale to that company. Plaintiff made no effort to show that he could not have obtained the full facts about the sale before it was consummated or immediately thereafter. The stock of U. S. Industries, Inc. was traded on the New York Stock Exchange in 1968. A full and complete description of the transaction between U. S. Industries and Consolidated Merchandising Corporation was filed with the Exchange. We cannot escape the conclusion that the fraud alleged by plaintiff was not of such a character as to conceal itself and that all of the facts upon which he relies in this case have been available to him, upon reasonable inquiry, continuously since June, 1968.

The applicable rules were stated by the Court of Appeals.

“Mere ignorance and failure of the plaintiff to discover the existence of a cause of action is not sufficient to toll the running of the statute of limitations. Hall v. DeSaussure, [41 Tenn.App. 572, 297 S.W.2d 81 (1956)], and numerous cases. There is an exception to this rule. Fraudulent concealment of the cause of action by the defendant tolls the statute of limitations. It begins to run as of the time of the discovery of the fraud by the plaintiff. Boro v. Hidell, 122 Tenn. 80, 120 S.W. 961 (1909); Bodne v. Austin, [156 Tenn. 353, 2 S.W.2d 100 (1928)]; Howell v. Davis, [43 Tenn.App. 52, 306 S.W.2d 9 (1957)]; and numerous cases. To come within this exception, the plaintiff must prove that the defendant took affirmative action to conceal his cause of action and that he, the plaintiff, could not have discovered his cause of action despite exercising reasonable diligence. Redwood v. Raskind, 49 Tenn.App. 69, 350 S.W.2d 414 (1961); Hudson v. Shoulders, 164 Tenn. 70, 45 S.W.2d 1072 (1932); Woodfolk v. Marley, 39 S.W. 747 (Tenn.Ch.App.1896), aff. 98 Tenn. 467, 40 S.W. 479 (1897); Patten v. Standard Oil Co. of Louisiana, 165 Tenn. 438, 55 S.W.2d 759 (1933); Ray v. Scheibert, 224 Tenn. 99, 450 S.W.2d 578 (1959); see 51 Am.Jur.2d, Limitations of Actions, § 148 pp. 719-720.”

At various stages of this litigation, the parties have relied upon each of five (5) possible statutes of limitations; T.C.A. § 28-304, the one (1) year statute of limitations for tortious personal injury; T.C.A. § 28-305, the three (3) year statute of limitations for tortious property damage which was applied by the Court of Appeals; T.C.A. § 28-309, the six (6) year statute of limitations for contract; T.C.A. § 47-2-725, the Tennessee Commercial Code statute of limitations for sales and T.C.A. § 28-310, the ten (10) year statute for all cases not expressly provided for.

The applicable statute of limitations in a particular cause will be determined according to the gravamen of the complaint. Swauger v. Haury & Smith Contractors, Inc., 512 S.W.2d 261, 262 (Tenn.1974); Carney v. Smith, 222 Tenn. 472, 437 S.W.2d 246 (1969); Brown v. Dunstan, 219 Tenn. 291, 409 S.W.2d 365 (1966).

In this determination it is important to distinguish this transaction from the more typical situations where corporate directors or officers with inside information purchase or sell stock detrimentally to stockholders at large. In this state and the majority of jurisdictions the common law imposed no fiduciary duties on directors or officers with regard to trading stock with general stockholders. It was said that directors could trade as if outsiders. Shaw v. Cole Mfg. Co., 132 Tenn. 210, 177 S.W. 479 (1915); 2A Fletcher Cyclopedia Corporations § 1168.1, 283 (1975). Actions based on such fiduciary breaches, if allowed, would be quasi-contractual in nature and thus the six (6) year statute would be applicable. Wallace v. Lincoln Savings Bank, 89 Tenn. 630, 15 S.W. 448 (1891).

However, the gravamen of the present case is fraud in the inducement of a contract, the old common law action of deceit. Plaintiff alleges damages resulting from face to face misrepresentations of material facts which induced him to sell his stock at a much lower figure than reasonable. He bases his prayer for $34,800 damages solely on and as a proximate result of defendant’s misrepresentations.

An individual induced by fraud to enter into a contract may elect between two remedies. He may treat the contract as voidable and sue for the equitable remedy of rescission or he may treat the contract as existing and sue for damages at law under the theory of “deceit.” The latter is grounded in tort.

“Thus, a person who has been injured by the fraud of another or others, by either a party or parties to a transaction or a third party or third parties committing fraudulent acts involving or bringing about the negotiation of a transaction, such transaction usually but not necessarily involving business or commercial dealings, may maintain an action at law in tort or recover damages for the injury received from the fraud and deceit perpetrated by such other or others. The foundation of the action is not contract, but tort.” 37 Am.Jur.2d Fraud and Deceit § 332 at 439.

Tennessee Code Annotated § 28-305 provides as follows:

“28-305. Property tort actions — Statutory liabilities — Alienation of affections. — Actions for injuries to personal or real property, actions for the detention or conversion of personal property, civil actions based upon the alleged violation of any federal or state statute creating monetary liability for personal services rendered, or liquidated damages or other recovery therefor, when no other time of limitation is fixed by the statute creating such liability, and actions for alienation of affections, shall be commenced within three (3) years from the accruing of the cause of action.”

It is urged upon us that, in substance, the alleged fraudulent misrepresentation as to expectation of profitability, or to value of a stock, that results in monetary loss cannot be considered an “injury to property” in the classic tort sense of the word.

This argument is predicated upon a narrow definition of the word “injury” as used in the property tort actions three (3) year statute, and the notion that torts, in the classic sense, result only in physical damage.

Injury is defined in Black’s Law Dictionary, Revised Fourth Edition as:

“INJURY. Any wrong or damage done to another, either in his person, rights, reputation, or property. Woodruff v. Mining Co., C.C.Cal., 18 F. 781 [753]; Hitch v. Edgecombe County, 132 N.C. 573, 44 S.E. 30. . . .
The words ‘damage,’ ‘loss,’ and ‘injury’ are used interchangeably, and, within legislative meaning and judicial interpretation, import the same thing. In re City of Pittsburgh, 90 A. 329, 331, 243. Pa. 392, 52 L.R.A., N.S., 262.”

In Brown v. Dunstan, supra, this Court rejected the contention that injury to the person in T.C.A. § 28-304 is limited to bodily injury. In doing so the Court expressly approved the rationale in Commerce Oil Refining Corporation v. Miner, 98 R.I. 14, 199 A.2d 606 (1964) and quoted the following from said opinion:

“The issue presented to us for decision clearly points up the ambiguity of the statutory language ‘injuries to the person.’
* * * did the legislature contemplate applying the two-year limitation to actions arising from bodily or physical injuries only or to apply it broadly to actions brought to recover damages arising out of the restriction, invasion, or impairment of rights and privileges which are personal to the suitor?
* * * * * *
It is then our conclusion that the phrase ‘injuries to the person’ as used in the instant statute is to be construed comprehensively and as contemplating its application to actions involving injuries that are other than physical. Its purpose is to include within that period of limitation actions brought for injuries resulting from invasions of rights that inhere in man as a rational being, that is, rights to which one is entitled by reason of being a person in the eyes of the law. Such rights, of course, are to be distinguished from those which accrue to an individual by reason of some peculiar status or by virtue of an interest created by contract or property. 199 A.2d 606.” 219 Tenn. at 294, 295, 409 S.W.2d at 367.

Brown alleged that defendants had entered into a conspiracy to defraud and discredit him and oust him from his position with First Trust Company and that as a result of specified wrongful acts he had been reduced from his former status in the business and civic world of Chattanooga to one of abject pauperism and rendered incapable of regaining his former wealth or earning a living. The Court held that the gravamen of the action was damages to the plaintiff’s reputation as a businessman, father and respected man of society and that such damages are included within “for injury to the person” as that phrase is used in T.C.A. § 28-304. Brown’s cause of action was held to be barred by the one (1) year statute.

We deem it appropriate to apply the rationale of Brown to the property tort action statute. We reject the notion that injury to property as contemplated therein is limited to physical injury to property. In our opinion, the loss in value sustained by plaintiff from the alleged tort of fraud and deceit is included within the phrase, “injuries to personal property” as contemplated in T.C.A. § 28-305.

We note that a similar result was reached by this Court in Budget Rent-A-Car of Knoxville, Inc. v. Car Serv., Inc., 225 Tenn. 342, 469 S.W.2d 360 (1971). The complainants alleged a conspiracy which was said to have forced the sale of their business to their loss and damage. Defendants relied upon the three (3) year statute of limitations applicable to property tort actions. The Court sustained that defense, and without extensive analysis said: “Conspiracy is a tort and is subject to the running of the statute of three years.” 469 S.W.2d at 362.

There is respectable judicial authority in other states, whose statutes of limitation are similar to ours, that would result in application of the six (6) year statute, and others the ten (10) year statute. We have read all of the cases and given consideration to all of the excellent arguments in the briefs of the parties and those of the two (2) amici curiae. We readily concede that a close question is presented between the choice of the three (3) year statute, the six (6) year statute, and the ten (10) year statute. Nevertheless, we are persuaded that the Court of Appeals was correct in applying the three (3) year statute.

The judgment of the Court of Appeals dismissing plaintiff’s action is affirmed. Costs are assessed against plaintiff, Wood-son Vance.

COOPER, C. J., and BROCK and HARBI-SON, JJ., concur.

HENRY, J., not participating.

      . These methods were, book value, after tax profits, selling price times, book value and multiple of after tax earnings.

      . T.C.A. § 48-1652 effective May 28, 1975, not applicable to the instant case, provides a two (2) year statute of limitations governing the type of action involved herein.

      . The harshness of this rule has resulted in various statutory provisions prohibiting or regulating inside trading. See T.C.A. § 48-1601 et seq.; The Securities Act of 1933, 15 U.S.C.A. § 77a et seq. and The Securities Exchange Act of 1934, 15 U.S.C.A. § 78a et seq.


source: Caselaw Access Project

author: FONES, Justice.

license: Public Domain

text:
    Donna M. RICHENBERGER, Appellant, v. CHRYSLER CREDIT CORPORATION, Appellee.
    Supreme Court of Tennessee.
    March 14, 1977.
    Perry R. Happell, Nashville, for appellant.
    John C. Tune, Butler, Tune & Entrekin, Nashville, for appellee.
   OPINION

FONES, Justice.

Plaintiff, Richenberger, brought suit for damages against Chrysler Credit Corporation for an alleged violation of the Truth in Lending Act predicated upon failure to include the acceleration clause in the DISCLOSURE STATEMENT, although it was included in the contract.

The learned Chancellor held that the act and the regulations did not require that the acceleration clause appear on the same side of the page and above the place for the customer’s signature, i.e. the DISCLOSURE STATEMENT.

On July 27, 1974, plaintiff entered into a retail installment sales contract with Central Dodge of Nashville for the purchase of an automobile. The contract was then assigned to defendant by Central Dodge. The entire contract was contained on two sides of a single sheet of paper. The plaintiff’s signature appears only on the front side. Above her signature appears the following contractual provision:

14. Prepayment Rebate: Buyer may prepay his obligations under this contract in full at any time prior to maturity and receive a refund credit computed in accordance with the Rule of 78’s. Said rebate will be computed after first deducting from the finance charge an acquisition charge in the amount of $25.00. No rebate will be paid in an amount less than $1.00.

On the reverse side of said contract appears the acceleration clause:

2. If Buyer defaults in any payment, or fails to comply with any of the terms or conditions of the contract, or fails to procure or maintain the vehicle insurance required hereunder, or a proceeding in bankruptcy, receivership or insolvency shall be instituted by or against Buyer or his property, or if Seller deems the property in danger of misuse or confiscation, Seller shall have the right, at its election, to declare the unpaid portion of the Total of Payments under the contract to be immediately due and payable, together with any other amount for which Buyer shall have become obligated hereunder. In any such event, Seller, its agents or representatives, may enter the premises where the property may be and take immediate possession of the property including any equipment or accessories, and Seller may take possession of any other items in the property at the time of repossession, and hold them without liability until demanded by Buyer. Waiver by Seller or any default shall not be deemed a waiver of any other default.

Plaintiff contends that the acceleration clause was not properly disclosed in accordance with the act and regulations promulgated thereto. The pertinent provision of the Act sets forth:

15 U.S.C. § 1638
(a) . . . the creditor shall disclose each of the following items which is applicable . . .,
(9) The default delinquency or similar charges payable in the event of late payments.”

The relevant regulations implementing the above provision of the Act, promulgated by the Federal Reserve Board (FRB) pursuant to delegated authority by congress, provide:

12 C.F.R. § 226.8
(a) . [A]ll of the disclosures shall be made together on either
(1) The note or other instruments evidencing the obligation on the same side of the page and above the place for the customer’s signature; or
(2) One side of a separate statement which identifies the transaction.
(b) . In any transaction subject to this section, the following items, as applicable shall be disclosed
(4) The amount, or method of computing the amount, of any default, delinquency, or similar charges payable in the event of late payments.
(6) A description of any penalty charge that may be imposed by the creditor or his assignee for prepayment of the principal of the obligation (such as a real estate mortgage) with an explanation of the method of computation of such penalty and the condition under which it may be imposed.
(7) Identification of the method of computing any unearned portion of the finance charge in the event of prepayment in full of an obligation which includes precomputed finance charges and a statement of the amount or method of computation of any charge that may be deducted from the amount of any rebate of such unearned finance charge that will be credited to an obligation or refunded to the customer if the credit contract does not provide for any rebate of unearned finance charges upon prepayment in full, this fact shall be disclosed. (Emphasis added)

In essence, defendant maintains that an acceleration provision is not a charge computed on late payments but is an optional remedy upon default. It argues that so long as unearned interest is to be rebated in accordance with the contractual provision of clause 14, supra, which has been stipulated, the acceleration clause does not amount to a charge that needs to be disclosed under the Act or regulations. In short defendant says that the acceleration clause is no more than a prepayment provision, the rebate provisions of the latter already properly disclosed in the contract. This contention conforms with an opinion given by the FRB. In a letter opinion, the staff of the FRB found an acceleration clause to be essentially a provision for prepayment of the contract, which need not be disclosed so long as the rebate of any unearned interest was disclosed in accordance with 12 C.F.R. 226.8(b)(6) and (7) set forth supra.

Plaintiff on the other hand contends that the acceleration clause alone constitutes such a financial burden on the consumer as to amount to a delinquency or default charge. He relies on a federal district court decision, Garza v. Chicago Health Clubs, Inc., 347 F.Supp. 955 (N.D.Ill.1972). The Court in Garza found acceleration clauses to be the “type of pecuniary burden or expense” contemplated by Congress to be a “charge” and consequently had to be properly disclosed. 347 F.Supp. at 959.

Garza antedates FRB Opinion, 851, and that Court did not discuss the theory that acceleration clauses were not charges but merely prepayment provisions. However, Johnson v. McCrackin-Sturman Ford, Inc., 527 F.2d 257 (3rd Cir. 1975); Martin v. Commercial Securities Co., Inc., 539 F.2d 521 (5th Cir. 1976); and St. Germain v. Bank of Hawaii, 413 F.Supp. 587 (D.Hawaii, 1976), decided since Opinion, 851 have focused on the acceleration-prepayment dichotomy and have either avoided or repudiated the idea that acceleration clauses, alone, are “charges” that need to be disclosed.

In Johnson v. McCrackin-Sturman Ford, Inc., supra, the Court concurred with the Soloman letter stating:

“Because of the broad powers granted to it under the Truth in Lending Act, the Federal Reserve Boards Interpretation of its own regulations are entitled to great weight, (citations omitted) We are of the opinion that the Board Staff’s interpretation of section 226(8)(b)(4) is a reasonable one and agree that when a creditor is required to rebate the unearned portion of the finance charge, his right of acceleration is not a default delinquency or similar charge.” 527 F.2d at 267-268.

However, in Martin v. Commercial Securities Co., Inc., supra, there was vigorous disagreement with the letter opinion:

“Affording the substantial weight to the Solomon letter that Philbeck v. Timmers Chevrolet, Inc. [499 F.2d 971 (5th Cir. 1974)] mandates, we nevertheless cannot accept the staff’s interpretation of the requirements of sections 226.8(b)(4) and 226.8(b)(7). With deference, we find its one-sentence conclusion that an acceleration of payments is essentially a prepayment of the contract obligation to be an analytical construction of regulatory intent which has not been expressed in language that ‘all who run may read.’ In the installment credit context prepayment and acceleration appear to be conceptually antithetical. The former is the unilateral act of the debtor; the latter the unilateral act of the creditor in the typical installment contract.” 539 F.2d at 529.

The Court, however, did not hold that that acceleration clauses had to be disclosed. Instead it found the decision to be solely within the jurisdiction of the FRB.

'“It is the task of the Board, armed with delegated authority, to implement the policy of the act and not that of the Court. The Board has plainly required the consequences of prepayment to be disclosed. It may or may not elect to require the disclosure of acceleration by straightforward language.” 539 F.2d at 525-526.

The letter opinion was also dissented to in an interesting analysis by the Federal District Court of Hawaii. St. Germain v. Bank of Hawaii, supra. That court found that:

“. . . the FRB’s one-sentence conclusion in letter 851, viz., that acceleration is essentially a prepayment of the obligation under § 226.8(b)(7), to be clearly erroneous in view of the express provisions of § 226.6(g) and its accompanying footnote.” 413 F.Supp. at 604.

The theme of § 226.6(g) and its footnote is that subsequent occurrences, including the default of the buyer and necessary actions taken thereto by the seller do not automatically violate the act if not disclosed. The Hawaii court thus reasons:

“. . . [T]hat optional acceleration upon default by the creditor constitutes a ‘subsequent occurrence’ under § 226.6(g) of Regulation Z. Disclosure of such is therefore not mandated by Regulation Z. . . 413 F.Supp. at 604.

Thus, the three (3) foregoing cases all reach the same result, that acceleration clauses are not required to be disclosed, for three (3) different reasons. In Johnson, the Third Circuit agreeing with the FRB found acceleration provisions analogous to prepayment provisions. If the rebate of unearned finance interest provisions were either properly disclosed or subject to state statutory provisions insuring reasonable rebate, there was no necessity for disclosure of the acceleration provision because it alone was not a penalty or charge. The Fifth Circuit in Martin, however, finds acceleration clauses not to be essentially a prepayment provision, but leaves it to the FRB to decide whether or not there need be disclosure of its terms. The third rationale of Bank of Hawaii is that an acceleration is merely a subsequent occurrence which does not need to be disclosed because it is essentially the creditor’s remedy occurring on buyers default.

We recognize the logic of the observation in Martin, that prepayment provisions and acceleration provisions are “conceptually antithetical.” However, in our opinion the controlling consideration is the correct interpretation of the language of § 226.8(b)(4) considered in the light of the nature and usage of the right of acceleration. We think the reasoning of Justice Hunter in Johnson is sound and we adopt it, as did the learned Chancellor, as dispositive of this case, and quote the essence of the opinion:

“We dare say there is probably not an installment contract in force today that does not contain a clause granting the creditor the right to require immediate payment of all installments upon the happening of a specified event, usually a default in repayment of the loan. Exercise of that right by the creditor shortens, sometimes dramatically, the time period during which the borrower would normally be able to repay the loan. The purpose of such a provision is obvious. Without the right to accelerate payment, the creditor would be forced to sue each month as each installment payment became due and as the borrower defaulted on the installment, a course of action that is both commercially unreasonable and, in all probability, quite expensive to the borrower since he might be liable for 24 or 30 different sets of court costs. Except that a specified event in the condition precedent to its exercise, a creditor’s right of acceleration is, in essence, akin to the borrower’s right of prepayment.
Absent a provision to the contrary, a creditor receives a windfall when he accelerates payment of a contractual obligation because the accelerated debt obligation includes an unearned finance charge. This results from the fact that the finance charge on the stated debt was computed on the basis of the full credit period until maturity, which period has now been shortened. To remedy this inequitable result, the laws of many states, and some contracts, require the creditor to rebate to the borrower the unearned portion of the finance charge or to credit his obligation for this amount. Under such a requirement, all the borrower need pay upon acceleration is the unpaid portion of the principal obligation. This is the situation in the case sub judice. If McCrackin-Sturman had exercised its right to accelerate payment, it would have been required under Pennsylvania law to rebate immediately to plaintiffs the entire unearned portion of the finance charge. Plaintiffs would have been obligated to pay only the unpaid principal.
We are of the opinion that McCrackin-Sturman’s right to accelerate payment of the unpaid principal does not come within the meaning of the phrase ‘default, delinquency, or similar charges’ in section 128(a)(9) of the Truth in Lending Act. The lower court and the Garza court focused on the word ‘charges’ in the phrase ‘default, delinquency, or similar charges.’ Noting that ‘charges’ was nowhere defined in the Act or in the regulations, the district court relied on what it considered to be the ‘usual’ meaning of that term, an obligation. This reasoning, however, ignores the fact that the words ‘default, delinquency, or similar’ modify the term ‘charges.’ In considering the word ‘charges’ apart from the language that modifies it, the lower court not only used a method of analysis which is inconsistent with well established principles of statutory interpretation but also derived a definition of that term which does not comport with the purpose of section 128(a)(9).
Neither the Truth in Lending Act nor its legislative history define the phrase ‘default, delinquency, or similar charges.’ However, prior to enactment of the Act, the terms ‘default charges’ and ‘delinquency charges’ had well established meanings in the commercial credit field and in other consumer credit legislation, and it is certain that Congress was well aware of these definitions. Since the legislative history of the Act indicates that Congress intended to enact remedies that reflected commercial realities, we presume that Congress meant to ascribe to the terms ‘default charges’ and ‘delinquency charges’ the generally accepted meanings of these terms in the consumer credit industry.
In the commercial credit field and in other consumer credit legislation, the terms ‘delinquency charges’ and ‘default charges’ generally refer to specific pecuniary sums that are assessed against the borrower solely because of his failure to make his payments in a timely manner. They are sums above and beyond the amount ordinarily due in the event of timely payment. The Consumer Credit Guide, a widely-used source in the consumer credit field, defines ‘delinquency charges’ as follows:
Delinquency charges . . . are the compensation a creditor receives on a precomputed contract for the debtor’s delay in making instalment payments.
* * * * * *
Because a precomputed contract is the only one prepared on the assumption that the debtor will make all payments when due, the creditor is left without any income for a period where payment is delayed. In lieu of accelerating the maturity of the entire obligation, the creditor may make an appropriate charge just for the delay on the particular instalment.
Thus, we conclude that the phrase ‘default, delinquency and similar charges’ in section 128(a)(9) of the Truth in Lending Act mandates disclosure only of specific monetary sums, in addition to the amounts already due under the loan, that are imposed because of late payment of an installment or installments. A right of acceleration under which the creditor must rebate the unearned portion of the finance charge is not encompassed within the disclosures required by section 128(a)(9). When a creditor is required to rebate the unearned portion of the finance charge upon acceleration, the result is a shortening of the time for repayment of the principal, not the assessment of an additional penalty charge. Morris v. First Nat’l Bank, 4 CCH Consumer Credit Guide ¶ 98,568 (N.D.Ga. July 1, 1975). The borrower incurs no cost other than that disclosed on the face of his credit contract. The creditor is merely given the right to pursue his remedies against the defaulting borrower without awaiting the expiration of the term of the contract. McDaniel v. Fulton Nat’l Bank, 4 CCH Consumer Credit Guide, ¶ 96,683 (N.D.Ga. Sept. 19, 1974).” 527 F.2d at 264, 265, 266.

The judgment of the Chancery Court of Davidson County is affirmed. Costs are adjudged against plaintiff, Richenberger.

COOPER, C. J., and BROCK and HARBI-SON, JJ., concur.

HENRY, J., not participating.

      . The stipulation reads as follows:
      “In the event of acceleration by Appellee of Appellant’s debt pursuant to Paragraph 2, page 2, of the Retail Installment Contract, then and in that event, Paragraph 14 (Prepayment Rebate) on page 1 is applicable and is the method which is or would be used to compute the refund credit, if any.”

      . This is in response to your letter of June 26, inquiring whether an acceleration clause in an installment contract is a “charge” payable in the event of late payment within the meaning of § 226.8(b)(4) [Par. 3566] of Regulation Z and therefore must be disclosed with other required items.
      For the purposes of Truth in Lending disclosures, this staff views an acceleration of payments as essentially a prepayment of the contract obligation. As such, the disclosure provision of § 226.8(b)(7) [Par. 3566] of the Regulation, which require the creditor to identify the method of rebating any unearned portion of the finance charge or to disclose that no rebate would be made, apply. If the creditor rebates under one method for acceleration and another for voluntary prepayment, both methods would need to be identified under § 226.8(b)(7). Failure to disclose the method of rebate or nonre-bate would be a violation of the Truth in Lending Act.
      If, under the acceleration provision, a rebate is made by the creditor in accordance with the disclosure of the rebate provisions of § 226.-8(b)(7), we believe that there is no additional “charge” for late payments made by the customer and therefore no need to disclose under the provisions of § 226.8(b)(4). On the other hand, if upon acceleration of the unpaid remainder of the total of payments, the creditor does not rebate unearned finance charges in accordance with the rebate provisions disclosed in § 226.8(b)(7), any amounts retained beyond those which would have been rebated under the disclosed rebate provisions represent a “charge” which should be disclosed under § 226.8(b)(4). (Emphasis supplied.) FRB letter 851 by Fredrick Soloman (Oct. 22, 1974).

      . 12 C.F.R. § 226.6
      (g) Effect of subsequent occurrence. If information disclosed in accordance with this part is subsequently rendered inaccurate as the result of any act, occurrence, or agreement subsequent to the delivery of the required disclosures, the inaccuracy resulting therefrom does not constitute a violation of this part.

       Such acts, occurrences, or agreements include the failure of the customer to perform his obligations under the contract and such actions by the creditor as may be proper to protect his interests in such circumstances. Such failure may result in the liability of the customer to pay delinquency charges, collection costs, or expenses of the creditor for perfection or acquisition of any security interest or amounts advanced by the creditor on behalf of the customer in connection with insurance, repairs to or preservation of collateral. (Emphasis added.)

      . The parties, in this case, having stipulated that in the event of acceleration, unearned interest would be rebated, the stipulation produced the same effect as the Pennsylvania statute referred to in Johnson.


text:
    The EQUITABLE LIFE ASSURANCE COMPANY OF the UNITED STATES, Petitioner, v. Penny E. ODLE, Respondent.
    Supreme Court of Tennessee.
    March 14, 1977.
    Jesse E. Johnson, Jr., Joe M. Duncan, Burch, Porter & Johnson, Memphis, for petitioner.
    Charles M. Crump, Larry B. Creson, Jr., Apperson, Crump, Duzane & Maxwell, Memphis, Manuel M. Gorman, Vice President and Gen. Counsel, American Life Ins. Ass’n, Washington, D. C., for American Life Ins. Ass’n, amicus curiae.
    Vern F. Chumney, Memphis, for respondent.
    Milton P. Rice, Nashville, for Tennessee Life Ins. Companies.
    Dan H. Elrod, Nashville, amicus curiae.
   OPINION

FONES, Justice.

The issue in this Court is whether group accidental death and dismemberment policies are group life insurance policies within the contemplation of T.C.A. § 56 — 1141 and thus required to provide conversion privileges and extended benefit privileges following termination of employment.

Defendant issued two policies of group insurance to I T & T Corporation. Policy # 13160 provided group life insurance and policy # 13160D provided accidental death and dismemberment benefits to said employees. The face amount of coverage in each policy was $4,000.

Plaintiff was an employee of I T & T and as such was afforded coverage under the two (2) group policies. In the present posture of the case, it is established that his employment with I T & T was terminated on 2 February, 1972, and that his accidental death occurred on 19 February, 1972.

The group life policy, # 13160, allowed conversion to an individual life policy within thirty-one (31) days after termination of employment and also provided that if death occurred within the thirty-one (31) day period after termination, the life insurance benefits would be paid under the group policy. Both of these provisions are mandated by T.C.A. § 56-1141, for inclusion in “group life insurance” policies. Defendant has paid the amount due by the terms of the group life insurance policy and no controversy remains with respect to it.

The group accidental death and dismemberment policy, # 13160D, expressly provided that the insurance coverage ceased automatically upon termination of employment. No conversion privilege or extended benefit provision was written into the accident policy and the single issue before this Court is whether T.C.A. § 56-1141 mandates such provisions for accidental death and dismemberment policies.

The Court of Appeals affirming the result reached in the trial court, said the ultimate issue was whether accidental death and dismemberment insurance is “group life insurance” under the Code. Resorting to the definition of life insurance in T.C.A. § 56-218, they held that the' statutory language and the holding of Provident L & A Ins. Co. v. Simmer, 157 Tenn. 597, 12 S.W.2d 365 (1928) embraces accidental death policies; that although T.C.A. § 56-1141 makes no specific mention of group accidental death and dismemberment insurance, such insurance is included within the term “group life insurance” because of T.C.A. § 56-218 and Simmer.

We disagree.

If the issue we confront was correctly conceived by the Court of Appeals, there remains a serious question whether the Legislature intended the definitions in T.C.A. § 56-218 to apply to Chapter 11 of Title 56. It appears reasonable to conclude that the Legislature was concerned only with defining all of the kinds of insurance in the context of determining insurance company qualifications to insure and the granting of authority to engage in writing one or more kinds of insurance.

However, it is unnecessary to base our decision on the premise that T.C.A. § 56-218 does not apply because in our opinion the definition of life insurance therein does not embrace accidental death insurance. Such insurance falls squarely within the definition of “disability insurance” in T.C.A. § 56-218 and not “life insurance” as defined therein.

The statute defines the two kinds of insurance as follows:

“56-218. Definitions of kinds of insurance. — Kinds of insurance shall be defined, as follows:
LIFE INSURANCE. ‘Life insurance’ is insurance on human lives and insurance appertaining thereto or connected therewith. For the purposes of this code, the transacting of life insurance includes the granting of annuities and endowment benefits, additional benefits in event of death by accident or accidental means, additional benefits in event of the total and permanent disability of the insured, and optional modes of settlement of proceeds.
DISABILITY INSURANCE.
‘Disability insurance’ is an insurance against bodily injury, disablement or death by accident or accidental means or the expense thereof, against disablement or expense resulting from sickness, and every insurance appertaining thereto.”

As we construe the Code definition of life insurance, the basic requirement is that it primarily insure human lives; that secondarily it retains its character as life insurance even though other coverage is included, such as the granting of annuities, endowment benefits, accidental death benefits and permanent disability benefits. We reject an interpretation that any of these additional features, alone or in any combination forming the basic coverage of an insurance policy are to be characterized as “life insurance” under the Code, unless the basic coverage is insurance on a human life, not limited to accidental death.

In this case we are dealing with two separate policies. Policy # 13160 is clearly a life insurance policy as so defined in T.C.A. § 56 — 218. The second policy, # 13160D, provides coverage only in case of disability or death by accident or accidental means and is clearly within the definition of disability insurance in said section.

By its terms, T.C.A. § 56 — 1141 is limited to “group life insurance” which does not include group disability insurance as defined in Chapter 2 to Title 56. Parenthetically, it is axiomatic that the addition of the word group does not change the character of the kind of insurance issued. If the Legislature had intended to make T.C.A. § 56 — 1141 applicable to group disability policies insuring accidental death and dismemberment it should have expressly said so. Assuming without deciding that the definitions in T.C.A. § 56-218 have no relevance to T.C.A. § 56-1141, the following reasoning reaches the same result.

This Court in Interstate Life and Accident Co., Inc. v. Hunt, 171 Tenn. 119, 100 S.W.2d 987, 102 S.W.2d 55 (1937), rejected plaintiff’s insistence that accident insurance was included within the meaning of life insurance as that term was used in Chapter 457, Public Acts of 1907. Said Acts also contained mandatory provisions to be included in all life insurance policies issued in this State. The Legislature is presumed to have knowledge of the state of the law on the subject under consideration at the time it enacts legislation. Aetna Life Ins. Co. v. Hooker, 62 F.2d 805 (6th Cir.) (1933); cf. Flynn v. Camp, 225 Tenn. 462, 470 S.W.2d 347 (1971); McKinney v. Hardwick Clothes, Inc., 217 Tenn. 457, 398 S.W.2d 265 (1966). Thus, in enacting T.C.A. § 56-1141 as Chapter 122, Public Acts 1957, its failure to make specific reference to group accident death insurance or disability insurance requires that this Court hold the act inapplicable to such insurance.

We think that our interpretation of both statutes as hereinabove indicated is strengthened by the limitation on the conversion privilege contained in T.C.A. § 56-1141(1). Said sub-section provides, in effect, that where group coverage ceases because of termination of employment, the employee should be entitled to an individual policy of life insurance, “without disability or other supplementary benefits.” We construe this limitation to mean that even though the basic coverage of the group policy is life insurance, if the group life insurance policy has additional features such as accidental death and dismemberment benefits, those additional features would be excluded from the individual policy. Obviously, in the situation presented in this case, where accidental death coverage is in a separate policy from the life insurance, it would be inappropriate to write into the statute language that would result in providing plaintiff with accidental death coverage, that is expressly excluded had the same total coverage appeared in one policy.

We deem it unnecessary to address other principles of statutory construction relied upon by defendants which may be equally meritorious.

The judgment of the Court of Appeals is reversed and the case is dismissed. Costs are adjudged against plaintiff, Odie.

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


author: BROCK, Justice.

text:
    STATE of Tennessee ex rel. Robert F. SMITH, Commissioner Department of Transportation, Petitioner, v. LIVINGSTON LIMESTONE COMPANY, INC., Respondent.
    Supreme Court of Tennessee.
    March 14, 1977.
    Snow & Poteet, Cookeville, Russell G. Lazenby, Asst. Atty. Gen., R. A. Ashley, Jr., Atty. Gen., Nashville, for petitioner.
    John A. Turnbull, Roberts & Turnbull, Livingston, for respondent.
   OPINION

BROCK, Justice.

This is an eminent domain proceeding brought by the State to acquire 1.98 acres of land from the defendant, Livingston Limestone Company, a corporation, leaving 54.02 acres of the original tract remaining. The trial court approved a jury verdict awarding $7,000.00 as the value of the 1.98 acres taken and an additional $10,000.00 for incidental damages to the remaining 54.02 acres. The State appealed to the Court of Appeals which reversed the judgment of the trial court and remanded the case for a new trial, holding that it was error for the trial court to admit the testimony of Mr. Jim Coleman, the General Superintendent and Secretary-Treasurer of the defendant corporation, wherein he stated his opinion of the value of the property taken and the incidental damages to the remaining 54.02 acres. This Court granted certiorari to consider certain questions of evidence presented.

The defendant owner operates a rock quarry and mines limestone on the tract here involved. Mr. Jim Coleman had served as Secretary-Treasurer and General Superintendent of the defendant corporation for approximately six years prior to the taking of the Company’s property and during that period was supervisor of the quarry operations conducted on the property. He testified, without objection, that in his opinion the 1.98 acres of land taken had a value of $6,000.00 per acre or a total of $11,800.00, explaining that “the value I give is what its value is to Livingston Limestone for operation.” In estimating the damages to the remaining 54.02 acres, he listed $500.00 for relocating a road, $2,500.00 for new stockpiling space and $5,000.00 for the added distance the Company’s trucks must travel from the quarry to the new stockpile. The trial court sustained objections to this testimony respecting incidental damages and instructed counsel that the measure of incidental damages to the remainder of the tract would be the difference between its value before the taking and its value after the taking. Mr. Coleman was then permitted, over the objection of the State that he was not qualified as an expert, to state his opinion of the fair cash market value of the remainder before and after the taking.

In reversing and remanding for a new trial, the Court of Appeals held that the witness Coleman was not competent, as the managing officer of the corporate land owner, to testify respecting the fair cash market value • of the land owned by the corporation; having failed to qualify as a real estate expert, Coleman was not competent to state his opinion respecting such value. However, the Court concluded that Mr. Coleman should have been permitted to state his opinion of the value of the subject property to the corporate owner.

The courts of this State have followed a policy of liberality in admitting opinion evidence respecting the fair cash market value of real estate. In addition to the testimony of the qualified real estate experts, we have permitted the lay witness to give his opinion of the fair cash market value of real estate, after stating the facts upon which his opinion is based. Wray v. Knoxville, L. F. & J. R. Co., 113 Tenn. 544, 82 S.W. 471 (1904); Drainage Dist. No. 4, Madison County v. Askew, 140 Tenn. 314, 204 S.W. 984 (1918); Lebanon & Nashville Turnpike Co. v. Creveling, 159 Tenn. 147, 17 S.W.2d 22, 65 A.L.R. 440 (1929). This is the general rule. Montana Ry. Co. v. Warren, 137 U.S. 348, 11 S.Ct. 96, 34 L.Ed. 681 (1890); Uniform Rules of Evidence, Rule 56. The opinion of the real estate expert is accepted because of his superior training, skill and experience, that of the layman because of his special, peculiar knowledge of the particular land, its surroundings and value. In the case of each, it is considered that the opinion is reasonably trustworthy and helpful to the trier of fact in determining the market value of the land in question. 31 Am.Jur.2d 677.

In most states, and in Tennessee, the owner of real property is held to be qualified, by reason of his ownership alone, to give an opinion in evidence of the value of his land. Nashville Interurban Railway Co. v. Seay, 1 Tenn.Civ.App. 134, 144; Union Joint Stock Land Bank of Louisville v. Knox County, 20 Tenn.App. 273, 97 S.W.2d 842 (1936); 32 C.J.S. Evidence § 546(120), at 470; 5 Nichols, Law of Eminent Domain, at 18-117. Because of his interest in the land as its owner, it is presumed that he knows the value of it; hence, he qualifies as a witness by showing mere ownership. 1 Wigmore on Evidence, § 716; 31 Am.Jur.2d 137.

The same reasoning impels us to conclude that the opinion of the managing officer of a corporation with respect to the market value of the corporation s real property should be received in evidence. This was the conclusion of the trial judge and is supported by the better reasoned decisions of other jurisdictions. McCall Service Stations, Inc. v. City of Overland Park, 215 Kan. 390, 524 P.2d 1165 (1974); Harbond, Inc. v. Anderson, 134 So.2d 816, 819 (Fla.App.1961); Agoos Leather Companies v. American & Foreign Ins. Co., 342 Mass. 603, 174 N.E.2d 652 (1961); Texas Pig Stands, Inc. v. Krueger, 441 S.W.2d 940 (Tex.Civ.App.1969); Weber v. West Seattle Land & Improvement Co., 188 Wash. 512, 63 P.2d 418 (1936); M. A. Realty Co. v. State Roads Commission, 247 Md. 522, 233 A.2d 793 (1967). The Court of Appeals erred in holding to the contrary. Mr. Coleman’s opinion of the fair cash market value of the corporation’s property was correctly admitted.

The value to the owner is not ordinarily relevant in eminent domain cases. If there is a market for the land, the market value is the fact to be found. Only in the special situation where, because of crop failure, financial panic, or similar abnormal conditions, there is no market for property which in ordinary times has value, is the owner permitted to show the value of the property to him. Lebanon & Nashville Turnpike Co. v. Creveling, supra. Therefore, it was error for the Court of Appeals to hold that Mr. Coleman’s opinion of the value to the company of the land taken was admissible evidence. However, no error in this respect was committed in the trial since no objection was made to this particular testimony. It is not necessary to consider any other issue raised in this Court.

Accordingly, the judgment of the Court of Appeals is reversed and that of the trial court affirmed. Costs are taxed against the State.

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


text:
    GILES COUNTY BOARD OF EDUCATION and Aetna Life and Casualty Insurance Company, Appellants, v. W. T. HICKMAN, Appellee.
    Supreme Court of Tennessee.
    March 14, 1977.
    W. A. Moody, Nashville, for appellants.
    Robert W. Knolton, Columbia, for appel-lee.
   OPINION

FONES, Justice.

There are two issues in this workmen’s compensation case: (1) what constitutes adequate notice to employer of employee injury; and (2) whether plaintiff’s suit, filed more than one (1) year after date of injury, was properly sustained despite the statute of limitations.

The Chancellor held that plaintiff’s conversations with the school principal and the office of superintendent of schools constituted actual notice to employer of his injury and further found defendants to be equitably estopped from raising the statute of limitations because of representations made to plaintiff. Plaintiff was awarded temporary total benefits from November 14,1973, until November 13, 1975, ninety (90%) percent permanent partial disability to the body as a whole and all medical expenses.

On November 14, 1973, plaintiff hurt his back while loading frozen turkeys on a Giles County school bus. Although in pain, plaintiff continued driving the bus until November 27, 1973. On that date, the back pain was so severe that his driving ability was impaired. He called the principal of the school for which he drove and the Office of the Superintendent of schools, his supervisor, to arrange for a substitute driver. He reached the principal but was unable to speak with Mr. Goodman, the Superintendent. Instead he related the injury, its cause and his present pain to a Mrs. Henderson, the secretary to Mr. Goodman. Mrs. Henderson distinctly remembered the conversation and testified she relayed the total message to Mr. Goodman. Mr. Goodman denied that he was notified of the injury.

On November 29, 1973, plaintiff was admitted to a Lewisburg Hospital for examination and treatment of his back injury. He was released on December 3, but re-entered the hospital on December 29. Plaintiff was finally released from the hospital on January 8, 1974, but ordered confined to bed rest.

On January 30, 1974, plaintiff went to see Mr. Goodman to discuss his job status. During this conversation Mr. Goodman asked plaintiff if he had filed for compensation insurance. Plaintiff testified that this was the first time he was aware that he was covered by workmen’s compensation. He was told to file his claim at the office of Eslick and Strawn, agents for the defendant insurance carrier. Plaintiff went to the agents’ office, located in Pulaski, that day and filled out forms reporting his work related injury. A few weeks later he received a telephone call at his home from a lady at the insurance company in Nashville. He was requested to give a statement over the telephone, to be recorded, about how the accident occurred and other matters relevant to the claims, and he did so.

Plaintiff testified that he telephoned Mr. Eslick several times and was told that the claim would be paid. “He told me that it would be paid. He said that it takes a while for it to mature and it takes a while to get everything worked up,” but he said “you are definitely due something . .”

Exhibits from the file compiled in Aet-na’s Nashville office, reveal that the file was closed on June 21, 1974, because employee had failed to give notice of the accident within thirty (30) days.

No notice of the denial of the claim and closing of the file was conveyed to plaintiff, or Mr. Eslick.

On November 15, 1974, Mr. Eslick wrote to the supervisor of the claims department of Aetna in Nashville as follows:

“RE: Giles County Bd. of Education, # 64C 18279 CCA Vs. W. T. HICKMAN
Dear Clyde:
Please check the status of this claim. The latest note in our file shows that at about 9:30 AM on 9/6/74 I talked with you and was promised that you would have someone contact Mr. Hickman concerning his claim.
On 8/7/74 Mrs. Caruthers had someone in your office call me and I discussed the claim with her and she said someone would write Mr. Hickman that his claim is not covered or would offer him a settlement.
Yesterday Mr. Hickman called us and stated that for several months he has not heard from anyone at the Aetna. If proper attention had been given this claim it could have been settled for a small amount. If Mr. Hickman continues to be ignored we may end up with a mess on our hands. Please find someone to bring this case to a conclusion. Thanks.”

It is not clear from Mr. Eslick’s letter whether or not he was aware that his prodding of the Nashville office in August and September had resulted in their re-opening the file to the extent that on September 30, 1974, Ms. Clevenger of the Nashville Claims Department wrote to plaintiff that consideration of his claim required further medical information which they could obtain if he would sign the enclosed medical authorization forms. Plaintiff testified that he promptly signed the forms and returned them to the Nashville office.

On January 21, 1975, Ms. Clevenger wrote to Mr. Hickman advising that “we will be unable to cover your claim for workmen’s compensation benefits.”

As has been stated so many times by this Court, our review is confined to a determination of whether there is any material evidence to support the judgment of the trial court. Further, if the findings are supported by inferences which may fairly be drawn from the evidence, even though the evidence be susceptible of opposing inferences, the reviewing court will not disturb the award. New Jersey Zinc Co. v. Cole, 532 S.W.2d 246 (Tenn.1975); Hartwell Motor Co., Inc. v. Hickerson, 160 Tenn. 513, 26 S.W.2d 153 (1930).

Plaintiff having testified that he was frequently in touch with Mr. Eslick about his claim, we are entitled to infer from Mr. Eslick’s letter to Aetna’s Nashville office that on or shortly after August 7, 1974, Mr. Eslick advised plaintiff that he would soon hear from the Nashville office; that on or shortly after September 6, 1974, Mr. Eslick again related to him the substance of the promise made by the Superintendent of Claims in the Nashville office. The September 30 letter from that office to plaintiff requesting his signature on medical authorization forms gave plaintiff no cause for apprehension that his claim would be denied. To the contrary, it was supportive of Mr. Eslick’s statements to him. Aetna’s September 30 letter, when considered in the light of its inter-company action in June and Mr. Eslick’s August and September requests for action provides circumstantial evidence of a deliberate effort to defer denying liability until after the statute of limitations, expired on November 14, 1974.

I.

The learned trial judge was correct in applying the doctrine of equitable estoppel in this case.

We think the factual situation in this case is analogous to that in American Mutual Liability Insurance Co. v. Baxter, 210 Tenn. 242, 357 S.W.2d 825 (1962). While the plaintiff’s evidence in Baxter is somewhat more explicit in that he testified defendant’s claims manager told him approximately one (1) week before the statute ran that the company would start paying him and that he need not worry about the statute of limitations, we find as did the court below that Plaintiff Hickman was led to believe that his claim would be honored until January 21, 1975.

We quote the substance of equitable es-toppel as applied in workmen’s compensation cases from Baxter:

“The doctrine of equitable estoppel is one of frequent application; and, in a proper case, may be invoked to estop a debtor to plead the statute of limitations. In Saylor v. Trotter, 148 Tenn. 359, 367, 368, 255 S.W. 590, 593, Chief Justice Green, speaking for the Court, referring to this doctrine, said:
‘It is constantly growing, and is applied to new conditions as they arise. It is founded on good morals. It rests upon the necessity of requiring men to deal honestly and fairly with their fellow men.
‘ “The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both.” Dickerson v. Colgrove, 100 U.S. 578, 25 L.Ed. 618.
‘ “What I induce my neighbor to regard as true is the truth as between us, if he has been misled by my asseveration.” Kirk v. Hamilton, 102 U.S. 68, 26 L.Ed. 79.”’ 357 S.W.2d at 827.

II.

The Chancellor also properly decided that employer had actual knowledge of plaintiff’s injury and consequently no written notice was required. T.C.A. § 50-1001. Plaintiff notified the principal for whom he drove as well as the office of the school superintendent. The testimony of Mrs. Henderson concerning her conversation with the superintendent is material evidence that the employer had actual knowledge of plaintiff’s back injury on November 27, 1973.

Affirmed. Costs are adjudged against defendants.

COOPER, C. J., and BROCK and HARBI-SON, JJ., concur.

HENRY, J., not participating.


author: TODD, Judge.

text:
    Robert F. SMITH, Commissioner of Transportation, etc., Plaintiff-Appellant, v. Carl V. BLACK et al., Defendants-Appellees.
    Court of Appeals of Tennessee, Middle Section.
    Dec. 3, 1976.
    Certiorari Denied by Supreme Court March 14, 1977.

      R. A. Ashley, Jr., Atty. Gen., Nashville, Michael Murphy, Murfreesboro, for plaintiff-appellant.
    Marshall E. Duggin, Woodbury, for defendants-appellees.
   OPINION

TODD, Judge.

In this eminent domain proceeding, the plaintiff, Commissioner of Transportation, has appealed from a non-jury award of $12,000.00 for the taking of a quantity of defendants’ land for highway purposes.

The original petition, filed on July 14, 1972, sought condemnation of a 1.997 acre tract. The original answer, filed on May 14, 1974, raised only the issue of damages. However, by amendment filed on June 18, 1975, the defendants alleged that the taking involved an additional tract of 2.803 acres. The Trial Judge awarded $12,000.00 compensation for both tracts. On appeal, the condemnor concedes the correctness of the judgment as to the 1.997 acre tract, but questions the judgment as to the 2.803 acre tract because it had been previously dedicated for public use.

It is conceded that said 2.803 acre tract was set apart as a road in a subdivision plot recorded by defendants’ predecessors in title, however it is insisted by defendants that the dedication was never completed and was revoked by subsequent acts of the owners.

It is therefore necessary to narrate the material facts which are undisputed.

The former owners, Mr. and Mrs. O. C. Morgan owned a tract of about 51 acres on the southerly side of Bridge Avenue.

In May 1959, Mr. and Mrs. Morgan filed for record a map of a subdivision of a part of their property designated as Section I, West Meadows. Said subdivision did not include the 2.803 acre tract in issue.

In November 1962, Mr. and Mrs. Morgan filed for record a resubdivision of parts of their property, including the unsold part of Section I plus additional parts of their land not previously subdivided. Said resubdivision, designated Section II, West Meadows Subdivision, contained some lots fronting on Bridge Ave., and, in addition, a number of other platted streets, including a street called March Blvd., 120 feet in width and extending from Bridge Ave. southward along the eastern boundary of the subdivision. This said March Blvd. is the 2.803 acre tract which the plaintiff-condemnor insists was dedicated and did not need to be condemned for use as a highway.

In January 1963, Mr. and Mrs. Morgan sold lot 19 in Section II. Said lot fronted on Bridge Ave. and did not require March Blvd. for access to the public way.

Also in January 1963, Mrs. Morgan, as surviving tenant by the entirety, sold to Mr. and Mrs. Bruce Elrod all of the unsold residue of the Morgan land. The description in said deed recites:

“A portion of the property herein conveyed has been plated for a Subdivision, known as the West Meadows Subdivision, which plats are duly recorded in said Register’s office and this conveyance is made subject to the easements and set back lines as shown upon said plats.” (Emphasis supplied)

In August 1964, Mr. and Mrs. Elrod sold to James Thomas and wife Lot No. 2 of West Meadows Subdivision Section II, making reference to the recorded plat for a more particular description. On the recorded plat, said Lot 2 appears at the southwest corner of Bridge Avenue on which it fronts 120 feet and March Blvd. on which it fronts 125 feet.

After conveying another portion of the subdivision which fronted only on Bridge Ave., in May 1968, Mr. and Mrs. Elrod conveyed the remainder of their property to the defendants, Mr. and Mrs. Black. The description in said deed refers to the deed of Mrs. Morgan to Mr. and Mrs. Elrod, quoted supra, stating:

“This being the same parcel of real estate designated as Tract One in the deed of Dora J. Morgan, a widow, to Bruce Elrod and wife, Mabel D. Elrod, . . . .”

On July 14, 1972, appellant sued to condemn a 1.997 acre tract which was in the unsubdivided portion of the defendant’s land and which was a continuation of the right of way of March Blvd. beyond the subdivision. There is no controversy about this 1.997 acre tract.

In August 1972, an order was entered awarding possession of the 1.997 acre tract to condemnor.

In April 1973, condemnor began highway construction upon the 2.803 acre tract platted as March Blvd. on the recorded subdivision.

In May 1974, defendants filed an answer to the condemnor’s petition for 1.997 acres, but did not mention any claim to the 2.803 acre tract.

In August 1974, all parties announced ready for trial in respect to the 1.997 acres.

In June 1975, by leave of court, defendants amended their answer to claim compensation for the 2.803 acres. The Trial Judge decided that said tract was not dedicated and that defendants should be compensated for same. Thereafter, the value of both tracts was determined to be $12,-000.00 and appeal was taken from judgment for this amount.

The sole assignment of error complains of the holding of the Trial Court that defendants were entitled to compensation for the taking of the 2.803 acre tract.

In addition to the claim of dedication, appellant also claims the benefit of the one year statute of limitations on actions in inverse condemnation, § 23-1424 T.C.A. From the above chronology, it is clear that defendants’ claim for compensation was not presented within twelve months after the initial entry upon their property by the plaintiff-condemnor. Allowing the defendants the benefit of their June 1975 amendment by relating it back to their original answer filed in May 1974, their claim came too late, i.e., more than twelve months after the entry and commencement of construction in April 1973.

The only manner in which defendants can avoid the running of the statute of limitations would be to relate their June 1975 amendment of their May 1974 answer to the date on which plaintiff filed its original action on July Í4, 1972. This date occurred nearly a year before entry or commencement of operations, hence an inverse condemnation suit could not have been maintained at that time.

The assertion of a right to compensation for an entirely separate tract than that described in the petition appears to be in the nature of a set-off or counter-claim in that it brings forward an entirely new right of action. In this light, the commencement of the original action did not toll the running of the statute of limitations on the inverse condemnation action on a different tract of land. Lovejoy v. Ahearn, 223 Tenn. 562, 448 S.W.2d 420 (1969); Maxwell v. Roark, 337 F.Supp. 506 (D.C.Tenn.1971).

It is arguable that the filing of the original condemnation suit brought before the court all issues of compensation for the taking of any and all parcels belonging to defendants for the construction of the public improvement mentioned in the complaint. However, no authority has been found to support such a proposition.

The other contention of appellant is based upon the alleged previous dedication of the tract. As such, it goes to the merits of the controversy and will be considered as determinative of this appeal.

In common parlance, the word “dedication” implies simply a setting apart for some solemn purpose. Such a dedication might be accomplished by the donor alone. However dedication in law, especially common law dedication, requires more, that is the actual or implied acceptance by the donee. 26 C.J.S. Dedication § 2, p. 401. Tennessee appears to have no statute on dedication, hence the common law must control.

In this respect, a common law dedication partakes of some of the attributes of a deed (requiring intent to convey and delivery) or a contract (requiring an offer and an acceptance). 26 C.J.S. Dedication § 34a, p. 459.

Until the offer of dedication has been accepted by the donee or estoppel has arisen by intervening rights, the offer of dedication may be withdrawn or revoked. 26 C.J.S. Dedication § 58, pp. 542 et seq.

Where an owner of land plats it on a map, designating certain portions thereof for public use and thereafter records the map, he will be deemed to have thereby made an offer to dedicate the indicated portions to the public for the public purpose. 26 C.J.S. Dedication § 22, p. 438.

Where an owner makes a sale of land with reference to a map or plat, in the absence of a manifestation of a contrary intention, he thereby manifests an intention to dedicate the streets and alleys shown thereon to the public use. Varallo v. Metropolitan Government of Nashville and Davidson County (Tenn.App.1973), 508 S.W.2d 342.

Public use or acceptance of roads platted on a recorded plan will ordinarily complete the process of dedication. Moore v. Queener, 62 Tenn.App. 490, 464 S.W.2d 296 (1970).

In the light of the principles just stated, the facts already narrated establish the rights of the parties in the present case.

The filing in November 1962, of the map of Section II, West Meadows Subdivision, was an unequivocal offer to dedicate to public use all of the streets shown on said map, including the right of way of March Blvd. shown thereon.

The sale of Lot 19 (not fronting on March Blvd.) in January 1963, by deed referring to the map of Section II was a reiteration of the offer of all streets in the subdivision.

The sale of the entire subdivision in January 1963, and the acceptance by the purchaser of a deed reciting the recorded subdivision was a further reiteration of the offer.

The sale in August 1964, of Lot No. 2 referring to the recorded plat was a further reiteration of the offer. The purchaser bought a corner lot apparently fronting partly on March Blvd. The seller would probably be estopped to revoke, renounce or withdraw the offer of dedication to create some other use for purposes other than a street, in spite of the disclaimer mentioned hereafter.

The deed executed to and accepted by defendants in May 1968, refers to a previous deed which reserves easements shown on the recorded plats without any indication that same have been or were being revoked.

No action whatsoever was taken to renounce, revoke or withdraw the offer of dedication prior to the entry upon the land and beginning of construction in April 1973. Such entry and beginning of construction was an unequivocal acceptance of the offer of dedication which completed the process of perfecting an irrevocable dedication. McCord v. Hays, 202 Tenn. 46, 302 S.W.2d 331 (1957); Moore v. Queener, supra, 26 C.J.S. Dedication § 40b(l), pp. 477, 478.

Appellees first insist that there has been no legal dedication of the 2.803 acre tract, citing State ex rel. Kincaid v. Hamilton, 109 Tenn. 276, 70 S.W. 619 (1902); however, the cited case is authority only for the rule that a private owner of one lot in a subdivision is not entitled to an injunction to prevent the obstruction of each and every street platted in the subdivision regardless of whether accepted or improved by the public.

Appellees correctly state the rule requiring an unequivocal offer and unequivocal acceptance. Such rule has been satisfied by the unequivocal offer of a recorded plat and the unequivocal acceptance by commencement of construction.

Appellees cite Nashville Trust Co. v. Evans, 30 Tenn.App. 415, 206 S.W.2d 911 (1947); however that case involved an informal easement by prescription and not a recorded plat.

Appellees insist, correctly, that an offer of dedication may be withdrawn or revoked at any time before acceptance; however, as previously pointed out, the acceptance occurred before any withdrawal or revocation.

Appellees insist that neither they nor their predecessors ever made a dedication of streets in the recorded subdivision. Such is not in conformity with the events previously narrated. Mr. and Mrs. Morgan made a specific, recorded offer of dedication when they recorded the plat of the subdivision. Nothing remained for them to do to complete the dedication. Only acceptance by the public authority was required, and this was forthcoming. It is true that the intervening owners, Mr. and Mrs. Elrod, did not specifically make a further offer of dedication. Such was unnecessary. They accepted a deed which specifically reserved the easements set out in the subdivision plat. Whether it be said that Mr. and Mrs. Elrod ratified or renewed the offer of dedication by acceptance of the deed, or that they took title subject to the express reservation of the platted streets, or that the previous offer of their predecessors remained in effect by failure to withdraw, the mere transfer of title under the stipulation of the deed, did not terminate or revoke the offer of dedication represented by the recorded plat.

The same may be said of the deed from Mr. and Mrs. Elrod to defendants-appellees except that it did not contain an express reservation of easements, but described the property as being the same as that conveyed in the previous deed which did contain the express reservations.

Whatever the right of an offerer to revoke or withdraw his offer of dedication, the withdrawal or revocation must be by appropriate means.

While it has been held that conveyance of the subject property may effect a revocation, 26 C.J.S. Dedication § 60, p. 548, nevertheless, where the conveyance recognizes the existence of the dedication (offer), as by reference in the description of the property, the dedication is not thereby revoked. Ibid.

It has been held that the death of one of the dedicators before acceptance effects a revocation of the dedication. Chicago, M. & St. P. Ry. Co. v. City of Chicago, 264 Ill. 24, 105 N.E. 702, Ann.Cas. 1917A, 1146 (1914). However, the facts in that case were extreme, including a period of 59 years with intervening rights of occupants. The present case does not seem to be an appropriate one for application of a rule of revocation by death. Even if this Court should be disposed to apply the rule, the deed of Mrs. Morgan, surviving owner, by reference to the preceding deed effectively reiterated and renewed the previous offer of dedication.

Appellees argue that Mr. and Mrs. Morgan revoked the offer of dedication by failing to sell property fronting on March Blvd. Such may avoid the private claims of other owners of lots fronting on March Blvd. (of which none were created by sale), but does not revoke the offer to the public authority.

Next, appellees argue that the property was applied to inconsistent uses by the rezoning of the property. Such was not inconsistent with the existence of March Blvd., a 120 foot right of way along the eastern border of the tract.

The failure of the City of Murfrees-boro to accept the street, the requirement that the owners mow the entire area and destroy a building thereon, and the existence of fences and cross-fences are not deemed inconsistent with the continuance of the offer of dedication.

Neither is payment of taxes on the entire tract deemed to work a revocation under the circumstances.

Appellees rely upon the fact that a deed from Mr. and Mrs. Elrod to James H. Thomas and wife contained a disclaimer of covenant or agreement that any of the streets shown on the plat would ever be opened up or that the lot being sold was a corner lot. The clear purpose of said deed provision was to disclaim liability in event March Blvd. should never be improved, but it was not a revocation of the offer made in the recorded plat.

Appellees rely upon evidence that, in its original appraisal of the property to be taken, the representatives of petitioner apparently included the 2.803 acre tract in their computations. Such an inadvertence or error of fact cannot affect the substantive rights of the parties which were correctly ascertained and stated in the original complaint.

Appellants cite authority for the correct determination of the quantity of land taken in the proceedings for condemnation. Such authority does not extend to separate tracts, especially where the separate tract is already held by the condemning authority by dedication.

Aside from the applicable rules of law, common justice denies the right of defendants to receive compensation for this previously dedicated property. It is obvious from an examination of the maps that March Blvd. was to be a major thoroughfare of the subdivision. Nineteen lots are planned to front wholly or partially on March Blvd. Two entrances to the subdivision are planned to open on March Blvd. The failure to sell any lots except those fronting on the existing road (Bridge Ave.) make it forceably evident that sales of interior lots awaited the construction of access roads of which March Blvd. was a major and vital part.

The construction of March Blvd. (the project involved in the present taking) will be of incalculable value to the subdivision by giving frontage on an improved street to a large number of lots and furnishing convenient access for the construction of two streets into the subdivision. It does not seem that defendants will be injured by the enforcement of the dedication of March Blvd. so that they may have the advantage of the benefits of the planned street. It would appear that defendants would be unjustly enriched to require payment to them of damages for the privilege of building a street in their subdivision which street will bring into fruition the profits anticipated when the subdivision was planned and recorded.

For the reasons stated, this Court has concluded that the 2.803 acre tract designated on the recorded plat as March Blvd. was the subject of a valid, subsisting offer of dedication which ripened into an irrevocable dedication when the condemnor started construction of the highway.

Accordingly, the award to defendants should have been only for the tract of 1.997 acres outside the platted subdivision. It appears that the Trial Judge fixed a unit value of $2,500.00 per acre which was not questioned by either party and which is sustained by the evidence.

The judgment of the Trial Judge will therefore be modified by reducing same to $4,992.50, the value of 1.997 acres at $2,500.00 per acre; and judgment will be entered in this Court in favor of defendants-appellees in said amount together with interest from date of judgment in the Trial Court and all costs, including costs of this appeal.

Modified and Rendered.

SHRIVER, P. J., and DROWOTA, J., concur.


author: SAM D. JOHNSON, Justice.

text:
    Bernard PACHTER, Petitioner, v. L. L. WOODMAN, Sr., et al., Respondents.
    No. B-6013.
    Supreme Court of Texas.
    Feb. 16, 1977.
    Geary, Stahl, Koons, Rohde & Spencer, Gerald P. Urbach, Mark C. Clements and Steven F. Bright, Dallas, Jack Ware, Uvalde, for petitioner.
    Jackson, Walker, Winstead, Cantwell & Miller, M. Douglas Adkins, Charles F. Schwab, Jr., Dallas, Ralph J. Graham, Corpus Christi, for respondents.
   SAM D. JOHNSON, Justice.

This is a suit brought by the legal owner of a tract of land, Bernard Pachter, to set aside a sale of that land made under the power in a deed of trust. The defendants were L. L. Woodman, Sr. and L. L. Woodman, Jr. as the holders of the deed of trust who foreclosed, Gary Roberts as the substitute trustee, and D. Harold Byrd and Warren Wagner, Inc. as the purchasers at a foreclosure sale. Claiming an interest in the land, Plus Two Cattle Company, Inc. and the National Bank of Commerce of Dallas intervened. D. Harold Byrd and Warren Wagner, Inc. moved for a summary judgment and the trial court granted the motion. The court of civil appeals affirmed. 534 S.W.2d 940. We reverse and remand to the trial court.

The following summary of events is derived from the pleadings, the motions, the affidavits, and the sworn or certified copies of papers and documents filed in this case. The property in issue consists of approximately 1,017 acres of land located in Zavala County, Texas. In 1963 the Franklin Life Insurance Company conveyed this property to the Woodmans and the Woodmans executed a first lien deed of trust note in the sum of $100,000. In 1966 the Woodmans conveyed this tract to Byrd Farms, Inc. Byrd Farms executed a second lien deed of trust and note in the sum of $290,000. This conveyance was made subject to the lien held by Franklin Life Insurance Company. Subsequently, in 1968, L. L. Woodman, Jr. purportedly assigned and transferred to L. L. Woodman, Sr. all of his interest in the note executed by Byrd Farms. In 1970 Byrd Farms conveyed the tract to D. Harold Byrd.

On March 4, 1971 D. Harold Byrd conveyed the tract to Pachter for a total consideration of $435,000, which included $5,500 for an irrigation motor located on the land. A $50,000 down payment was made. This conveyance, by warranty deed, was made subject to the first deed of trust lien held by Franklin Life Insurance Company with an outstanding balance of $65,-000, the second deed of trust lien held by Woodman, Sr. with an outstanding balance of $235,495.74, and a third deed of trust lien executed on March 4, 1971 by Pachter to Byrd in the sum of $73,699.86.

In December 1972 Pachter conveyed the equitable title to the tract to Charles F. Schwab by means of a contract of sale, which was subsequently assigned to Plus Two Cattle Company, Inc. on or about January 1, 1973. Plus Two Cattle Company, Inc. pledged its rights in the contract of sale to the National Bank of Commerce of Dallas in June 1974.

The deed conveying the property from Byrd to Pachter was properly recorded. However, the tax roll of the Uvalde Consolidated Independent School District continued to show D. H. Byrd as owner. In February 1973 the tax assessor for the School District reported to Franklin Life Insurance Company that the 1972 school taxes on the tract were delinquent. Almost one year later, on February 7, 1974, Franklin Life Insurance Company wrote the following letter to the tax assessor:

“On February 26, 1973, you reported the 1972 School Taxes delinquent on the property described in the enclosed legal description. Since that time, we have written to the owner several times requesting evidence that these taxes have since been paid. However, we have not yet received proof of payment.
“We would appreciate your advising us if these taxes have been paid. . . '.
We would also appreciate your advising us if the 1973 School Taxes have been paid.”
The tax assessor replied as follows:
“This land is still on our roll under the name of D. H. Byrd. There has been no deed change. The following are the taxes due:
“$4,634.71.”

The amount reported by the tax assessor included accrued penalties and interest. In his affidavit Schwab asserts that the copy Plus Two Cattle Company, Inc. received of the above reply by the tax assessor was the first notice it had of delinquent taxes.

L. L.’Woodman, Sr. elected to exercise his option to accelerate the note because of the failure to comply with the deed of trust provision requiring the payment of the taxes before the accrual of penalties and interest. He instructed his attorney to prepare a letter to be sent to Pachter’s attorney, Plus Two Cattle Company, Inc., and Schwab notifying them of his acceleration of the total amount due because of the failure to pay taxes. The letter prepared by Woodman, Sr.’s attorney and dated February 25, 1974 stated:

“. . . L. L. Woodman, Sr., has elected to exercise his option to accelerate all remaining payments due and owing on and under such note and that accordingly all sums due and owing on and under such note are immediately due and payable to him. . . .”

This letter was postmarked February 27, 1974.

Plus Two Cattle Company, Inc. sent a check dated February 27, 1974 to the tax assessor in the amount which the tax assessor had indicated was due, $4,634.71. According to the affidavit of a deputy tax assessor-collector, Fleacie Coleman, this check was received by the tax assessor on March 1, 1974. Jack L. Fox, the attorney for Pachter, recites in his affidavit that the letter from Woodman, Sr. to him was received on March 4 or 5, 1974.' By letter dated March 4, 1974, the tax assessor advised Franklin Life Insurance Company and Schwab of an error in the tax statement in the February letter; the amount was deficient by $679.44. A check for this sum was received from Plus Two Cattle Company, Inc. by the tax assessor by March 22, 1974.

Following communication between Pach-ter’s attorney and Woodman, Sr.’s attorney, a letter dated March 29, 1974 was sent by Woodman, Sr.’s attorney to Pachter’s attorney which provided that Woodman, Sr. would delay foreclosure for thirty days. The delay was granted in order to give Pachter an opportunity to conclude a sale of the land and to use the proceeds to pay Woodman, Sr. Negotiations between the two attorneys continued after the expiration of thirty days and included discussions of an increase in the interest rate on the note from six percent to nine percent. Pachter’s amended original petition, which was verified, alleged Woodman, Sr.’s attorney represented to Pachter’s attorney during several of these discussions that he would “personally notify [Pachter’s] Attorney if and when the Defendants posted notices of said trustee’s sale; [and] that [Woodman, Sr.’s] Attorney totally failed to comply with this agreement all to the detriment and damage of [Pachter].”

Eventually, on November 5, 1974, the land was sold at foreclosure sale for $198,-222. The date of this sale was over eight months after the letter relative to the election to accelerate was posted by the attorney for Woodman, Sr. The purchasers at the foreclosure were Warren Wagner, Inc. and D. Harold Byrd, the same individual whose name had been and continued to be listed as the owner of the property by the School District and the same individual to whom the tax notices were mailed by the School District. According to the assertion in plaintiff’s verified petition, the tax notices were neither received by nor forwarded to Pachter.

With respect to the foreclosure sale, the affidavit by Gary Roberts as substitute trustee recites that “prior to twenty-one days before November 5, 1974, to-wit, October 14, 1974, I posted notices of the sale of such property . . . [at] the Zavala County Courthouse, the City Hall of Crystal City, Texas, and the Fire Station-Police Station of Crystal City, Texas, . . .” An affidavit by an attorney who does not appear to be involved in this litigation, William E. Casey, states he posted notices on October 14, 1974 and that “[a]t that time there were no Trustee’s Notices” at the named locations of a sale of the land involved in this case.

The following provisions of the deed of trust are pertinent:

“5. GRANTOR COVENANTS AND AGREES AS FOLLOWS:
“(d) TAXES: Grantor will pay all taxes and assessments that are or may become due and payable on the above described property . . . before any interest or penalty accrues thereon.
“6. Should GRANTOR fail or refuse to perform any of the covenants . . . HOLDER shall be entitled, without being under legal obligation to do so, to exercise the option of:
“(b) Declaring the whole of the note . immediately due and payable, with or without notice to GRANTOR and without presenting for payment any matured part of the indebtedness secured by this DEED OF TRUST, and cause trustee sale to be made.
“7. ... It is agreed that the recitals in the conveyance to the purchaser, or purchasers, shall be full and conclusive evidence of the truth of the matters therein stated, and all prerequisites to said sale shall be presumed to have been performed, and such sale and conveyance shall be conclusive against GRANTOR, his heirs and assigns.” [Emphasis added.]

The issue before this court is whether it was proper to render a summary judgment in favor of D. Harold Byrd and Warren Wagner, Inc., the purchasers of the land at the foreclosure sale.

The standard to be applied to this issue was set forth in Great American R. Ins. Co. v. San Antonio Pl. Sup. Co., 391 S.W.2d 41, 47 (Tex.1965), as follows:

“Rule 166-A, Texas Rules of Civil Procedure, provides that summary judgment shall be rendered if it is shown that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The burden of proof is on the movant, and all doubts as to the existence of a genuine issue as to a material fact are resolved against him. [Citations omitted.] In other words, the evidence must be viewed in the light most favorable to the party opposing the motion. [Citations omitted.] If the motion involves the credibility of affiants or deponents, or the weight of the showings or a mere ground of inference, the motion should not be granted. All conflicts in the evidence are disregarded, and the evidence which tends to support the position of the party opposing the motion is accepted as true. [Citations omitted.] Evidence which favors the movant’s position is not considered unless it is uncontradicted. If such uncontra-dieted evidence is from an interested witness, it cannot be considered as doing more than raising an issue of fact, unless it is clear, direct and positive and there are no circumstances in evidence tending to discredit or impeach such testimony.”

Pachter argues that there is a question of fact with respect to the posting of the notice of the foreclosure sale. The affidavit by Roberts, the substitute trustee, declares:

“. . . prior to twenty-one days before November 5, 1974, to-wit, October 14, 1974, I posted notices of the sale of such property . . . [at] the Zavala County Courthouse, the City Hall of Crystal City, Texas, and the Fire Station-Police Station of Crystal City, Texas, .” [Emphasis added.]

This statement could be read as stating that he posted notice prior to October 14, 1974. The affidavit by attorney William E. Casey asserts that there was no notice of sale of this property posted on October 14, 1974 at the named locations. Under the reasoning of Hart v. Eason, 159 Tex. 375, 321 S.W.2d 574 (1959), the affidavit by Casey would rebut the presumption contained in the deed of trust that “all prerequisites to said sale shall be presumed to have been performed.” Accordingly, a question of fact is presented as to whether notice of the foreclosure sale was properly given.

Pachter further alleges that Woodman, Sr.’s attorney promised to give him notice of any foreclosure sale and that no such notice was given. In this summary judgment proceeding D. Harold Byrd and Warren Wagner, Inc., the moving parties, had the burden of showing such notice was either given or was not required. The presumption contained in the deed of trust that “all prerequisites to said sale shall be presumed to have been performed” met this burden. Gulf, Colorado & Santa Fe Railway Co. v. McBride, 159 Tex. 442, 322 S.W.2d 492 (1959). This presumption means either (1) notice of the decision to foreclose was given, or (2) such notice was not a prerequisite. The allegation in the verified petition of Pachter that no notice was given rebuts the presumption notice was given. The statement by Fox in his affidavit that Woodman, Sr.’s attorney promised to give such notice and the allegation in Pachter’s verified petition that notice was not given and that he was thereby damaged would tend to rebut the presumption that the notice promised by Woodman, Sr.’s attorney was not a prerequisite to the foreclosure sale. Therefore, there is a question of fact as to this material issue.

Inasmuch as the pleadings, the motions, the affidavits, and the sworn or certified copies of papers and documents demonstrate the existence of fact issues regarding the adequacy of the notice for the foreclosure sale, it is not necessary to consider the possibility of other fact issues. On remand, the trial court may consider all of the arguments advanced by Pachter to set aside the foreclosure sale.

As there exist material questions of fact, the rendering of the summary judgment was improper. The judgment is reversed and the cause is remanded for trial.

YARBROUGH, J., concurs in the result.

      . Although it is alleged that the total consideration was $435,000, the amounts listed only total $429,695.60. The difference may represent interest on the notes which accrued prior to March 4, 1971 and which was paid by Pachter.


author: PER CURIAM.

text:
    Shearn MOODY, Jr., and James Wohlenhaus, Petitioners, v. STATE of Texas, Respondent.
    No. B-5236.
    Supreme Court of Texas.
    March 9, 1977.
    Rehearing Denied April 6, 1977.
    Prank G. Newman, John L. Shook and Lawrence G. Newman, Dallas, A. R. Schwartz, Galveston, for petitioners.
    John L. Hill, Atty. Gen., John W. Odam, Jr., Asst. Atty. Gen., Austin, for respondent.
   PER CURIAM.

This receivership suit was brought in 1972 by the State of Texas against Empire Life Insurance Company of America [hereinafter Empire], Shearn Moody, Jr. and James Wohlenhaus [petitioners here], and others. The State sought, among other things, the appointment of a temporary receiver to take possession of the insurance company’s Texas assets. Because-Empire was an Alabama corporation, the domiciliary receivership suit had been brought in an Alabama court; and the Texas suit was an ancillary proceeding. The courts of both Alabama and Texas appointed receivers to take control of Empire’s operations and assets.

In June of 1974, the Alabama court entered a decree authorizing the liquidation of Empire and approving a proposal for the reinsurance of the company’s policy holders. In its judgment, the court expressly found that Empire was insolvent in excess of six million dollars. Moody was also a party to the Alabama proceeding, and he appealed from that order.

Subsequently, the Texas receiver filed a motion for summary judgment in the Texas court in which he sought a permanent injunction against the defendants and for his appointment as permanent receiver. In support of his motion, he filed an affidavit to which was attached a certified copy of the June, 1974, Alabama court judgment and findings. In opposition, Moody introduced summary judgment evidence which tended to prove that Empire was not insolvent. The court granted the motion for summary judgment, and the court of civil appeals affirmed. 520 S.W.2d 452.

Moody and Wohlenhaus applied to this Court for a writ of error on the ground that the court of civil appeals erred in holding that the Alabama receivership court’s judgment was entitled to be given full faith and credit by the Texas receivership court. The petitioners’ argument rests on the Texas decisions which hold that a foreign trial court judgment is not entitled to full faith and credit when that judgment is on appeal. Thompson v. East Texas Refining Co., 97 S.W.2d 528 (Tex.Civ.App.1936, no writ); Van Natta v. Van Natta, 200 S.W. 907 (Tex.Civ.App.1918, writ ref’d). See Texas Trunk Ry. v. Jackson, 85 Tex. 605, 22 S.W. 1030 (1893).

It has come to our attention that on February 11, 1977, the Supreme Court of Alabama disposed of Moody’s appeal from the June, 1974, judgment of the Alabama receivership court. That judgment was affirmed in all respects. Moody v. State ex rel. Payne, Commissioner, 344 So.2d 160 (Ala.1977). The petitioner’s application for writ of error is therefore refused, no reversible error.