author: DOWD, Presiding Judge.

text:
    STATE of Missouri, Plaintiff-Respondent, v. Harold JOHNSON, Defendant-Appellant.
    No. 38905.
    Missouri Court of Appeals, St. Louis District, Division Four.
    May 9, 1978.

      Doris Black, St. Louis, for defendant-appellant.
    John D. Ashcroft, Atty. Gen., Paul Robert Otto, Stanley Robinson, Asst. Attys. Gen., Jefferson City, Courtney Goodman, Jr., Pros. Atty., Lawrence E. Mooney, George Meyer, Asst. Pros. Attys., Clayton, for plaintiff-respondent.
   DOWD, Presiding Judge.

Defendant was convicted by a jury of carrying a concealed weapon, RSMo § 564.-610, and sentenced under the Second Offender Act (§ 556.280) to five years in the custody of the Missouri Department of Corrections. We affirm.

Officer Louis Dauten was the primary witness for the state. He testified that he left the Dellwood Police Station to make his rounds on July 22, 1976 at 3:30 p.m. The station is located at 1415 Chambers Road. Next to the police station, separated from it by Atwater Drive, is a gas station on Chambers Road. As Officer Dauten proceeded on Atwater Drive and turned onto Chambers Road he glanced at the gas station and noticed defendant there in the parking lot. He recognized defendant and his automobile, a 1975 white over orange Oldsmobile Toronado because he had seen both the defendant and his auto nine months earlier when investigating an automobile accident that defendant was involved in. At the time of the accident, defendant’s auto bore Missouri license plates. The officer noticed that the auto now had Illinois plates. In addition, the officer was familiar with defendant because defendant had been discussed at police criminal information exchange meetings. At these meetings, Officer Dauten learned defendant was involved in area drug activities, that he always had a weapon with him, and that he had numerous arrests and convictions for weapons charges and assaults. For these reasons, the officer turned around and parked across from the gas station and observed the defendant. He observed that there was a passenger in the auto with defendant. After watching 3-4 minutes, Officer Dauten drove across the street to the gas station and pulled directly behind defendant. Defendant immediately pulled his auto off the lot and drove east on Chambers Road. Officer Dauten tried to pull out behind him. Since there were autos coming, he turned on his red light to get out in the traffic, but then turned them off. He followed defendant two short blocks and caught up with him at a red light at the intersection of Chambers and West Florissant. He noticed defendant looked at him through his rear view mirror and the passenger turned around to observe him more than once. When the vehicle left this intersection, Office Dauten again turned on his overhead red lights. The passenger again turned around and the vehicle kept going, but was not speeding. After 4 blocks, it finally stopped. As it stopped, the officer observed the men moving around inside the auto. He radioed for a backup unit as he stopped his vehicle. When both cars were stopped, defendant got out of his auto and walked back to the officer’s auto. The officer also got out and requested defendant’s driver’s license. Defendant gave him a traffic ticket, an adequate substitute on which to drive. The officer studied the ticket and then told defendant to go back and be seated in defendant’s auto. The officer went to the passenger side of defendant’s auto and asked the passenger for identification. He stated he had none. Officer Dauten asked him to step out of the car and walked him back to the passenger door of the police vehicle. At this time the assist car drove up. The passenger gave his name as Steven Wright. Officer Dauten radioed the two names and birthdates and the auto license number to check if there were warrants outstanding on the men, and whether the Illinois plate was a violation. When the officer left Mr. Wright with the assist officer, and walked back towards the driver’s door of defendant’s auto. He asked defendant to step out of the auto. Defendant replied, “what for, what did I do?” Officer Dauten reached over and grasped the door handle and started to open the door. Defendant held the door closed from the inside. The door opened slightly and then opened completely when the officer pulled harder. Defendant’s body leaned to the left and the officer observed in the front seat a blue towel (also referred to as a blue bathrobe) which slipped away and exposed what appeared to be the receiver of a shotgun. Defendant’s right hand was on or underneath the towel around the receiver of the shotgun on the trigger area. The officer drew his revolver for his own protection. The defendant let go of the shotgun and put his hands up. The officer ordered him out of the auto. As defendant emerged from the auto, the towel fell completely away and the officer could readily observe the shotgun, which was a 20-gauge shotgun about 3½ feet long. The defendant was placed against the car, patted down for other weapons, and handcuffed. The officer searched the entire auto and found two more shotgun shells in a compartment in the driver’s door. Upon examination of the gun he found a live shell in the chamber and 2 more in the magazine. The weapon was later found to be functioning properly when fired at City Hall using one of the shells. After the arrest was made, information came back on the officer’s radio that defendant had an extensive felony record and was considered dangerous.

The only other two witnesses for the state were the gas station attendants, one who filled defendant’s gasoline tank and another who washed his windows. Both testified that they did not see a gun in the auto when they were servicing it.

The defense’s two witnesses were Steven Wright and Carolyn Hinton. Steven Wright testified that the gun was in the back seat of the automobile, in plain view, uncovered by a towel. He explained that Carolyn Hinton had left it there because it needed repair. He and defendant had dropped her off at a grocery store, went to get gas, and were planning on picking her up at the grocery store. They then planned to take her to the gun repair shop which is on Chambers Road near the gas station. Steven Wright remembered seeing the officer watching them at the gas station, but said the officer then drove away. He next saw the officer behind them at the intersection, but contradicted the officer’s testimony by stating that defendant stopped the auto immediately after the officer turned on his red lights. He also claimed that the gun seized by the officer was in the back seat, not front seat next to defendant.

Carolyn Hinton testified that the gun had been given to her by her brother because her house had been broken into. It had become jammed and she had put it in the back seat when she got in defendant’s auto in order to take it to the repair shop. She last saw the gun when she was dropped off at the grocery store. At that time it was in the back seat, uncovered. She stated she had two shells with her in her purse, and left them on the seat of the auto when she went to the grocery store.

Defendant’s first point is that the trial court erred in overruling his motion to suppress evidence because there was no probable cause to stop his automobile. However, a police officer may in appropriate circumstances, stop a person for investigating possible criminal behavior even though there is no probable cause to make an arrest. Terry v. Ohio, 392 U.S. 1, 22, 88 S.Ct. 1868, 1880, 20 L.Ed.2d 889, 906 (1968). “A brief stop of suspicious individual, in order to determine his identity or to maintain the status quo momentarily while obtaining more information, may be most reasonable in light of the facts known to the officer at the time.” Adams v. Williams, 407 U.S. 143, 146, 92 S.Ct. 1921, 1923, 32 L.Ed.2d 612 (1972). Therefore, where officers entertain a reasonable suspicion that criminal activity may be afoot they may stop the suspected person, identify themselves, require the suspect to identify himself, and make reasonable inquiries concerning his activities. State v. Rankin, 477 S.W.2d 72, 75[3] (Mo.1972).

The facts here entitled the officer to entertain a reasonable suspicion as to defendant’s activities and to briefly detain him. These facts include the officer’s familiarity with defendant based on what he had learned at police criminal information meetings, that is, that defendant was involved in drug activities and always carried a weapon, and had numerous arrests and prior felony, convictions. Another fact is that defendant’s auto bore an out of state license plate when 9 months earlier it carried a Missouri plate. These further facts are also significant: that defendant pulled his car off the gas station lot as soon as the officer pulled in behind him; that the defendant watched the officer in his mirror as the officer followed him; that the passenger turned around at least twice to observe the officer; and, that defendant’s auto continued 4 blocks after the officer turned on his red lights, while both the defendant and his passenger furtively moved around inside the auto. All these facts entitled the officer to briefly detain the defendant and ask for identification, since “the interference with individual liberty that results when an officer stops an automobile and questions its occupants . is modest” when balanced against the legitimate needs of law enforcement. United States v. Brignoni-Ponce, 422 U.S. at 879-880, 95 S.Ct. at 2579.

Thus the initial stop of defendant’s vehicle was proper based on the officer’s reasonable suspicion of criminal activity. The subsequent discovery of the shotgun and towel were not the result of a search, but under the “plain view” doctrine. State v. Rankin, supra, 477 S.W.2d at 75[4]. Thus these items were properly admitted into evidence. The point is dismissed.

The next point defendant raises is that the trial court committed prejudicial error in admitting State’s Exhibits 1 and 2, the shotgun and blue bathrobe, into evidence after the conclusion of the defendant’s presentation of evidence. Defendant moved to exclude the exhibits for lack of proper introduction. The court overruled the motion and allowed the State to “untimely formally offer” the exhibits into evidence.

The trial court has broad discretion as to order of proof and the reopening of a case. Kansas City v. Ramsey, 525 S.W.2d 392[2] (Mo.App.1975). Since defense counsel was not taken by surprise by the introduction of the exhibits, State v. Walker, 531 S.W.2d 55, 58 (Mo.App.1975) and since the exhibits had in fact been exhibited to the jury, and witnesses were examined and cross-examined concerning them, they were actually in evidence although not formally introduced prior to the close of the State’s case. State v. Robinson, 325 S.W.2d 465[7] (Mo.1959); State v. Payne, 452 S.W.2d 805[10] (Mo.1970). We find no abuse of discretion. The point is without merit.

Defendant next claims the court erred in failing to direct a judgment of acquittal at the close of the State’s case and at the close of all the evidence, because there was a dispute as to whether the gun was concealed. The officer testified that it was covered by a blue towel, while the defense witnesses testified it was in plain view in the back seat. When considering a challenge to the sufficiency of the evidence, we accept as true all evidence which tends to prove defendant’s guilt. State v. Potter, 530 S.W.2d 268[2] (Mo.App.1975). The jury weighs the evidence, not the appellate court. State v. Achter, 514 S.W.2d 825[2] (Mo.App.1974). We find there was sufficient substantial evidence to support the verdict. State v. Achter, supra.

Defendant next claims the court erred in not declaring a mistrial when the state made a reference to defendant’s failure to testify in its closing argument. The defendant points to the following portion of the argument as direct references to defendant’s failure to testify: “In light of all the evidence in this case, why did Harold Count Johnson come back and meet Patrolman Dauten, why did he not wait for Patrolman Dauten to.get up to that car? I think the answer is pretty clear.” The defendant’s position is that since defendant was the only person who could have answered the questions posed, the effect was to “leave in the jurors minds a suggestion that the defendant did not take the stand because if he did so he would only incriminate himself further.”

The cases are clear that only direct and certain, (State v. Rothaus, 530 S.W.2d 235[1] (Mo. banc 1975)), non ambiguous and unequivocal, (State v. Frankoviglia, 514 S.W.2d 536[5] (Mo.1974)) references to the accused’s failure to testify are violative of his constitutional and statutory privilege against self-incrimination. The challenged statements do not directly and certainly refer to defendant’s failure to take the stand. In fact the statements made by the prosecutor here do not even indirectly refer to the failure of the defendant to testify but rather refer to the actions of the defendant at the time his auto was stopped by the police. The point is without merit.

Defendant claims he was denied a fair trial because his trial was before an all white jury and because of pretrial publicity. Only if a defendant is deprived by design of having blacks on the jury are his constitutional rights invaded. State v. Brownridge, 459 S.W.2d 317, 318 (Mo.1970). Here there is no record of how the jury was selected. No motion to quash the venire was filed, no objection to the impartiality of the jury was made, and no evidence of systematic exclusion of blacks from the jury was introduced. The point is without merit.

Defendant’s final contention is that pretrial publicity prejudiced defendant’s right to a fair trial. The defendant’s brief informs us that he had been tried in May and September of 1975 for stealing over $50 but both these trials had resulted in mistrials. The trial of this case occurred in December, 1976, over one year later. The defendant further notes that his name had been carried in numerous local papers several months before the jury was impaneled as a suspect in an “infamous” murder case, although he was not formally charged. The defendant states, “while no jurors indicated knowledge of the defendant’s involvement in these matters it seems apparent that the jurors associated the defendant with these crimes. . . . ”

Whether jurors have been influenced by newspaper accounts so as to deprive defendant of an impartial jury depends upon whether they are able to recall any details of the published article or appear to clearly recall the article and have formed any opinion as to guilt or innocence of the defendant. State v. Keeny, 431 S.W.2d at 97[5]. Defendant’s bare statement that “it seems apparent that the jurors associated the defendant with these crimes. . . . without further evidence of the jury’s bias, is totally insufficient to find that the defendant was unfairly tried. The point is without merit.

The judgment is affirmed.

SNYDER, J., and ALDEN A. STOCK-ARD, Special Judge, concur.

      . The Supreme Court has defined “reasonable suspicion” entitling an officer to stop an individual as a situation where an officer is aware of “specific articulable facts, together with rational inferences from those facts”, that reasonably lead him to believe criminal activity may be occurring. United States v. Brignoni-Ponce, 422 U.S. 873, 884, 95 S.Ct. 2574, 2582, 45 L.Ed.2d 607 (1975).


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    Frank EICKHOFF and Frances Eickhoff, Plaintiffs-Respondents, v. Edward Henry NEBELSICK, Defendant-Appellant.
    No. 10682.
    Missouri Court of Appeals, Springfield District.
    May 12, 1978.
    J. Max Price, Salem, Donald A. Hale, Steelville, for plaintiffs-respondents.
    Dan L. Birdsong, Routh, Thomas & Birdsong, Rolla, for defendant-appellant.
   PER CURIAM.

Plaintiffs Frank and Frances Eickhoff, husband and wife, brought suit to recover damages resulting from a two-car collision in Crawford County. Plaintiffs’ petition was in three counts. Count I sought damages for the alleged personal injuries to Frances; Count II sought damages for averred loss of consortium to Frank. The nature of Count III is undisclosed to us. The transcript on appeal shows that Count III was dismissed on the day of trial.

The jury returned a verdict which awarded Frances $13,500.00 upon Count I and Frank $2,500.00 on Count II of the petition.

In due time, defendant filed his motion for new trial. Thereafter, the court ordered that “. . . said motion as to Count I of plaintiffs’ petition is overruled and as to Count II is sustained.”

The instant appeal must be dismissed because the verdict favoring both plaintiffs was undone by the court’s ruling on the motion for new trial. Count II awaits resolution. An identical situation occurred in Swan v. Stuart, 350 S.W.2d 832, 833[1-3] (Mo.App.1961), and we follow the reasoning and result reached there.

The premature appeal must be, and hereby is, dismissed.

All concur.


text:
    STATE of Missouri, Plaintiff-Respondent, v. Arvin Junior GARRETT, Defendant-Appellant.
    No. 10843.
    Missouri Court of Appeals, Springfield District.
    May 15, 1978.

      John D. Ashcroft, Atty. Gen., Robert Presson, Asst. Atty. Gen., Jefferson City, for plaintiff-respondent.
    Blair Buckley, Jr., Public Defender, Ca-ruthersville, for defendant-appellant.
   PER CURIAM.

Arvin Junior Garrett, aka Jim Garrett, was jury-convicted of first degree murder and, in accordance with the verdict, was sentenced to life imprisonment.

Defendant’s utter disregard of the rules of the Supreme Court, V.A.M.R., relating to matters in the circuit court and in this court would justify a simple dispatch of the appeal for rule violations. Rule 27.20(a) mandates that “A motion for new trial shall be in writing and must set forth in detail and with particularity, in separate numbered paragraphs, the specific grounds or causes therefor.” As filed, the motion stated that defendant should have a new trial and that the trial court erred in denying his motions for judgment of acquittal filed at the close of the state’s case and at the close of all the evidence because the state had failed to prove “the elements of the crime alleged in the information beyond a reasonable doubt.” We observe initially that after the motion for judgment of acquittal at the close of the state’s case was overruled, the defendant offered evidence in his own behalf. This action served to waive any claim of error as to the denial of his motion filed at the conclusion of the state’s case. State v. Lewis, 526 S.W.2d 49, 52[1] (Mo.App.1975); State v. Winters, 525 S.W.2d 417, 424[13] (Mo.App.1975); State v. Mulkey, 523 S.W.2d 145, 147[3] (Mo.App.1975); State v. Benfield, 522 S.W.2d 830, 831[1] (Mo.App.1975). Also, an assertion that a new trial or that a motion for judgment of acquittal should have been granted because the state failed to prove the elements of the charged crime beyond a reasonable doubt, is simply .another way of claiming that the conviction was contrary to the weight of the evidence and represents the epitome of conclusionary assertions shorn of any particular or specific grounds for the trial court’s averred errors. State v. Amerson, 518 S.W.2d 29, 31[1] (Mo.1975); State v. Lamaster, 534 S.W.2d 574, 578[5] (Mo.App.1976).

Rule 81.03 states that the “party appealing shall be known as the appellant, and the adverse party as the respondent, but the titie of the action shall not be changed in consequence of the appeal.” (Emphasis supplied). Contrary to this rule, defendant’s brief comes to us entitled: “Arvin Junior Garrett, Appellant, vs. State of Missouri, Respondent.”

Defendant’s brief also arrives in form which represents a complete disregard of the requirements of Rule 84.04. Subsection (c) of that rule provides: “The statement of facts shall be a fair and concise statement of the facts relevant to the questions presented for determination without argument. Such statement of facts may be followed by a résumé of the testimony of each witness relevant to the points presented.” The fault in defendant’s brief as regards Rule 84.04(c), is simply that the “Statement of Facts” portion does not contain a statement of facts — it contains only a résumé of each witnesses’ testimony which does not sate the rule. State v. Brown, 535 S.W.2d 606[2] (Mo.App.1976); Handshy v. Hasty, 444 S.W.2d 48, 49[1] (Mo.App.1969).

The lone point relied on in defendant’s brief (mislabeled “Points and Authorities”) is: “The state has the burden to establish each of the essential elements of its case against the defendant beyond a reasonable doubt.” This so-called point is a patent violation of the requirements of Rule 84.04(d) which is applicable in criminal cases by Rule 28.18. State v. Warren, 469 S.W.2d 662, 663 (Mo.App.1971). The point is a mere abstract statement of law which preserves nothing for review on appeal. Riley v. State, 545 S.W.2d 711, 712 (Mo.App.1976); State v. Velas, 537 S.W.2d 881, 883[1] (Mo.App.1976); Kansas City v. Garza, 493 S.W.2d 659 (Mo.App.1973).

We are always reluctant to dispose of an appeal upon what some may term “legal technicalities”, especially where the punishment imposed is a sentence for life. But a conning of the transcript on appeal and the state’s evidence most favorable to the verdict [State v. Nichelson, 546 S.W.2d 539, 542[3] (Mo.App.1977)], assures us of the propriety of the jury’s action and that no error, plain or otherwise, occurred which affected defendant’s substantial rights.

The jury could have reasonably found beyond a reasonable doubt that before the occurrence of the charged crime, defendant or one Frazier, or both, had expressed an intent to rob Ira Smith. On the day in question, defendant, accompanied by Frazier and the latter’s sister, drove to Smith’s residence. Defendant induced Smith to leave his house and go to a nearby shop on the pretext of buying a used automobile tire. After defendant and Smith entered the shop, they were joined by Frazier. Shortly thereafter defendant and Frazier hurriedly left the shop, got into defendant’s car and “handed [Frazier’s sister] some money and told me to count it.” The money consisted of “a few tens, fives, twenties, and one one hundred dollar bill.” Defendant et alii then departed and drove forthwith to the State of Texas where they were apprehended two days later. When arrested, defendant’s billfold contained a one hundred dollar bill identified as having been possessed by Smith at or near the time of the crime. Immediately after the departure of defendant and associates from the Smith property, Smith was found mortally injured in the shop from a head wound administered by what was described as an “instrument that was found at the scene of the crime which was later identified as the murder weapon.”

We recognize that the fact of defendant’s mere presence at the scene of the crime and his flight therefrom was insufficient, standing alone, to sustain a conviction. State v. Castaldi, 386 S.W.2d 392, 395[3][5] (Mo.1965). However, presence at the scene and flight therefrom, when coupled with other evidence of active participation, will justify a jury finding defendant guilty of the charged crime. State v. Minor, 531 S.W.2d 101, 102[2] (Mo.App.1975). In this instance, we not only have defendant’s presence at and flight from the scene of the crime, but his possession, in part at least, of newly acquired monies, including a hundred dollar bill identified as having belonged to the victim of the crime. Thereafter, defendant drove his vehicle steadily for “some twenty hours” or “nine hundred and sixty miles” to the place in Texas where he and his companions were arrested. When apprehended in Texas, defendant had exclusive possession of the stolen one hundred dollar bill. These evidentiary facts were sufficient to prove affirmative participation by defendant in the crime charged.

The judgment is affirmed.

All concur.


text:
    J. Roger LAWRENCE, Plaintiff-Respondent, v. STEADLEY COMPANY, INC., a corporation, Defendant-Appellant.
    No. 10649.
    Missouri Court of Appeals, Springfield District.
    May 22, 1978.

      Jon Dermott, Blanchard, Van Fleet, Martin, Robertson & Dermott, Joplin, for plaintiff-respondent.
    Grant W. Scott, Spencer, Scott & Dwyer, Joplin, for defendant-appellant.
   PER CURIAM.

On September 21,1975, plaintiff J. Roger Lawrence filed a petition for declaratory judgment which as amended on January 19, 1976, sought the declaration of his rights and duties and those of his former employer, defendant Steadley Company, Inc., under their letter agreement dated April 25, 1975 (the letter agreement), which modified the parties’ original “Employment Agreement” dated January 1, 1973. Specifically, plaintiff Lawrence prayed (1) that he “be relieved from any covenant not to compete under the letter agreement,” (2) that he be given credit for $19,001 as deferred compensation for 1974 in addition to all other sums paid under the restricted trust agreement, (3) that plaintiff’s rights as beneficiary under the restricted trust agreement be defined, and (4) that plaintiff’s rights under the letter agreement be defined. Defendant Steadley answered and also filed a counterclaim in which it sought judgment (a) for $20,000 alleged to have been improperly transferred from its funds to plaintiff, and (b) for further amount[s]” to reimburse defendant for “improper and unauthorized payment of ‘expenses’ to plaintiff” and for “salary drawn by plaintiff during his period of disability.”

In the colloquy of court and counsel at the outset of the trial to the court, we find the following:

“THE COURT: Gentlemen are you ready to proceed?
“MR. SCOTT: Yes, sir.
“MR. DERMOTT: Yes, sir.
“THE COURT: Okay, now we are proceeding on — not the counterclaim, but just the petition, is this not correct?
“MR. SCOTT: And the restrictive covenant.
“THE COURT: Right.”

On December 20, 1976, a purported judgment was entered which struck down “the non-competitive clause [of] the letter agreement dated April 25,1975,” as requested in the above-quoted subparagraph (1) of plaintiff’s prayer. Defendant appeals from that “Judgment and Order.”

Our threshold duty upon appeal is to ascertain ex mero motu whether we have appellate jurisdiction, more particularly in this instance whether the entry striking down “the non-competitive clause” is an appealable judgment. To be final and thus appealable, a judgment ordinarily must dispose of all parties and all issues raised by the pleadings and must leave nothing for further determination; and, if the purported judgment presented to us in the case at bar does not, we must dismiss the appeal sua sponte, unless that judgment comes within the purview of the following exception provided in the second sentence of Rule 81.06, V.A.M.R.:

“When a separate trial is had before the court without a jury of claims arising out of the same transactions, occurrences or subject matter as the other claims stated or joined in the case the judgment entered shall not be deemed a final judgment for purposes of appeal within the meaning of Section 512.020, Revised Statutes of Missouri, unless specifically so designated by the court in the judgment entered. . . ” (Emphasis ours)

Meticulous examination of the so-called “Judgment Entry” in the transcript on appeal discloses that there was no such designation by the court in that entry. Accordingly, the appeal must be dismissed.

It is so ordered.

All concur, except FLANIGAN, J., not participating.

      . Pizzo v. Pizzo, 365 Mo. 1224, 1227, 295 S.W.2d 377, 379(1) (banc 1956); State ex rel. Beeler v. City of Raytown, 439 S.W.2d 481, 482(2) (Mo.1969); Wallace v. Hankins, 541 S.W.2d 82, 84(4) (Mo.App.1976); Herndon v. Ford, 470 S.W.2d 168, 169 (Mo.App.1971).

      . Rule 74.01, V.A.M.R.; Elliott v. Harris, 423 S.W.2d 831, 832(1) (Mo. banc 1968); New Age Federal Savings and Loan Ass’n. v. Miller, 461 S.W.2d 876, 878-879 (Mo.1970); Cochran v. DeShazo, 538 S.W.2d 598, 600(4) (Mo.App.1976); Federal Deposit Ins. Corp. v. Crismon, 516 S.W.2d 57, 58(2) (Mo.App.1974).

      . Citizens Ins. Co. of New Jersey v. Kansas City Commercial Cartage, Inc., 543 S.W.2d 532, 533(1) (Mo.App.1976); Baumstark v. Jordan, 540 S.W.2d 611, 612(1) (Mo.App.1976); Federal Deposit Insurance Corp. v. Crismon, 516 S.W.2d 57, 58(1) (Mo.App.1974); Coonis v. Rogers, 413 S.W.2d 310, 313(2) (Mo.App.1967).


author:
HENRY, Chief Justice. BROCK, J.,
      BROCK, Justice, HENRY, Chief Justice.

text:
    Laurence B. HOWARD, Jr., Petitioner (and Respondent), v. UNITED STATES of America, Respondent (and Petitioner) and William F. Howard, Trustee, Respondent.
    Supreme Court of Tennessee.
    April 24, 1978.
    Rehearing Denied June 5, 1978.

      Maclin P. Davis, Jr., Elliot Warner Jones, Waller, Lansden, Dortch & Davis, Nashville, for Laurence B. Howard, Jr.
    William F. Howard, Trustee, pro se.
    M. Carr Ferguson, Asst. Atty. Gen., Gilbert E. Andrews, Crombie J. D. Garrett, Carleton D. Powell, Dept, of Justice, Washington, D. C., Hal D. Hardin, U. S. Atty., Nashville, for United States.
   OPINION

HENRY, Chief Justice.

In this action of interpleader, the principal inquiry is whether the income from a spendthrift trust is subject to a lien for the payment of federal taxes.

The last will and testament of Laurence B. Howard established a residuary trust with his two sons, Laurence B. Howard, Jr. and William Felder Howard, designated as income beneficiaries, with income payable quarterly during their respective lives, and with the trust being terminated upon the death of the survivor. Item VI(m) reads, in pertinent part, as follows:

[Njeither the principal nor the income of the trust estates shall be liable for the debts of any beneficiary nor shall the same be subject to seizure by attachment, garnishment or execution, nor by any writ of proceeding at law, in equity, in bankruptcy or receivership; nor shall the beneficiaries thereof have the right or power to sell, assign, transfer, pledge, mortgage or in any other manner encumber or anticipate or dispose of their interest in the trust estates or in the income therefrom.

All parties agree, and we hold, that this language operates to create a spendthrift trust.

It should be emphasized that the income beneficiaries do not have the legal title to the corpus of the trust estate, nor do they have any right to the use or possession of any part of the corpus. They are purely income beneficiaries.

On September 24,1974, the Nashville District of the Internal Revenue Service served upon William F. Howard, as trustee, a Notice of Levy reciting an indebtedness in the sum of $27,068.95 owed by Laurence B. Howard, Jr., for federal taxes.

Petitioner, Laurence B. Howard, Jr., disputes the entitlement of the Internal Revenue Service to levy upon the trust proceeds and makes other defenses to the claim.

The Chancellor, after a full evidentiary hearing, concluded that the federal tax lien attached to the trust income while in the hands of the trustee. The Court of Appeals “affirm[ed] the abstract legal conclusion of the Chancellor that the Federal Government is entitled to attach income from a spendthrift trust in spite of Tennessee Decisions and Statute” but declined to affirm the Chancellor’s award in favor of the government on the basis of its view that the evidence necessary to document the government’s claim was not competent.

I.

Is the income from a spendthrift trust subject to seizure in satisfaction of a federal tax lien?

We respond to the captioned question in the affirmative and thus affirm both the Chancellor and the Court of Appeals as to this phase of the controversy. We specify our reasoning in some detail in view of the fact that there are no guiding precedents under Tennessee decisional law.

At first blush the answer would appear to be determined by Section 26-601, T.C.A., which reads as follows: -

26-601. Grounds for discovery and subjection — The creditor whose execution has been returned unsatisfied, in whole or in part, may file a bill in the chancery court against the defendant in the execution, and any other person or corporation, to compel the discovery of any property, including stocks, choses in action, or money due to such defendant, or held in trust for him, except when the trust has been created by, or the property so held has proceeded from some person other than the defendant himself, and the trust is declared by will duly recorded or deed duly registered. Provided, however, that where the state of Tennessee shall be such judgment creditor, the chancery court shall have jurisdiction to subject such property to the satisfaction of the claims of the state, despite the fact that the trust has been created or the property so held has proceeded from some person other than the defendant himself and the trust declared by will duly recorded or deed duly registered.

The history of this statute is simultaneously significant and interesting. In 1831 Tennessee abolished imprisonment for debt. As stated in 35 Tennessee Law Review 319, at 320, “[although this was entirely in keeping with the moral sense of Tennesseans at the time, it did have the effect of eliminating a part of the plaintiffs remedy at law.”

While the decisions are conflicting, the case of Erwin v. Oldham, 14 Tenn. 185 (1834) (decided under the law as it existed prior to the adoption of Chapter 11, Public Acts of 1832), is clear authority for the proposition that in the absence of fraud, the court has no power to subject “stocks, credits, and rights of action” held by a debtor to the satisfaction of his indebtedness. The Court specifically relied upon the New York case of Donovan v. Finn, 1 Hopk. Ch. 59, 14 Am.Dec. 531 (N.Y.1823), as “conclusively settling the point.”

By Chapter 11, Public Acts of 1832, the Tennessee Legislature enacted a statute patterned after a New York act designed to meet Donovan. This statute forms the basis for Sec. 26-601, T.C.A.

. Thus within a two-year period, a Tennessee creditor lost the remedy of imprisonment for debt, but gained the right to discover assets in equity and subject them to his demands.

But the equitable remedy was withheld for trust funds when the trust was created by a third person by recorded will or registered deed. This provision breathed the breath of life into spendthrift trusts in Tennessee. The landmark case is Jourolmon v. Massengill, 86 Tenn. 81, 5 S.W. 719 (1887).

There the Court, in an opinion by Justice Lurton, held that the 1832 act was “a rule of property, and . . . very many such trusts have been created in reliance upon it.” Id. at 126, 5 S.W. at 734.

The last proviso of Sec. 26-601, T.C.A., excepts from the application of the statute cases where the state of Tennessee is the judgment creditor. This proviso, with additional language making it retroactive, was adopted by Chapter 108, Public Acts of 1943, in an abortive effort to reach the assets of three spendthrift trusts created for Rogers Caldwell by his parents, in satisfaction of an indebtedness to the state in an amount in excess of four million dollars. This Court, in State v. Caldwell, 181 Tenn. 74, 178 S.W.2d 624 (1944), declared the 1943 amendment “invalid insofar as it is retrospective in character.” The Court declared that the 1832 act was a rule of property and “not an exemption statute for the benefit of poor debtors.”

Thus spendthrift trusts are solidly entrenched in our law and it is clear that Sec. 26-601 is a rule of property and not an exemption statute.

If we were dealing solely with Tennessee statutory and decisional law, we would be inclined to hold that the income from spendthrift trusts is insulated against the claims of all creditors, including the Internal Revenue Service; however, such is not the situation.

Article VI, clause 2 of the Constitution of the United States contains the Supremacy Clause:

This Constitution, and the laws of the United States which shall be made in Pursuance thereof; [and all treaties] shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

The ensuing paragraph requires that all judges state and federal, “shall be bound by Oath or Affirmation, to support this Constitution.”

The imposition and collection of federal income taxes are governed by federal laws deriving their validity from the sixteenth amendment to the federal constitution. As a general rule, where there is a conflict between state laws and federal laws, the latter must prevail. United States v. Dallas National Bank, 152 F.2d 582 (5th Cir. 1946).

Under 26 U.S.C. Sec. 6821, it is provided that unpaid federal taxes, after demand

shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person. (Emphasis supplied).

There is no exception in favor of income beneficiaries under spendthrift trusts and most assuredly such income is embraced within the phrase “property and rights to property.”

This section creates no property rights but merely attaches federally defined consequences to state created rights. See United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135 (1958) (construing a similar provision of the Internal Revenue Code of 1939). State law governs the question of the existence of “property” or “rights to property” and the “nature of the legal interest” that the taxpayer has in the property. Aquilino v. United States, 363 U.S. 509, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960).

Under Tennessee law, it is essential to the creation of a spendthrift trust that (1) legal title be vested in the trustee, (2) the gift to the donee be of an equitable interest in the income, and (3) the trust be active. Robertson v. Brown, 13 Tenn.App. 211 (1931). In the instant case these criteria are met; petitioner as income beneficiary has a vested property right in the income generated by the trust.

Once we have made the determination that under Tennessee law petitioner owns property or rights to property, federal law takes over for the purpose of determining whether a lien will attach. United States v. Bess, supra; Broday v. United States, 455 F.2d 1097 (5th Cir. 1972); United States v. Taylor, 254 F.Supp. 752 (N.D.Cal.1966).

As we have heretofore indicated, we are in full accord with petitioner Howard’s position that Sec. 26-601, T.C.A., is not an exemption statute. See State v. Caldwell, supra. If it were, the results we reach would be no different. This follows from the established legal proposition that federal law exclusively governs what is exempt from federal taxation. United States v. Mitchell, 403 U.S. 190, 91 S.Ct. 1763, 29 L.Ed.2d 406 (1971).

The lien for federal taxation arises under 26 U.S.C. Sec. 6321 and covers “all property and rights to property.” Levy is governed by Section 6331(a), and exemptions are enumerated in Section 6334(a). Section 6334(c) specifically provides that “no property or rights to property shall be exempt from levy other than the property specifically made exempt by subsection (a).”

The fact that we do not deal with an exemption statute is of no significance. What is significant is the fact that we deal with “property and rights to property.” The argument of petitioner Howard is precisely the same as was made by the taxpayer in Leuschner v. First Western Bank and Trust Company, 261 F.2d 705 (9th Cir. 1958). The Court responded thusly:

But the bastion of the claim built up by Leuschner is that he had a property right to receive this income . . .. It is for the very reason that Leuschner acquires a property right that the government has the power to levy thereon. (Emphasis supplied). 261 F.2d at 708.

Petitioner Howard relies upon Meyer v. United States, 375 U.S. 233, 84 S.Ct. 318, 11 L.Ed.2d 293 (1963). But1 Meyer stands for the proposition that state law determines what is “property or rights to property,” and generally it is the policy of Congress to recognize and give effect to state exemption laws. This holding was made in the context of the applicability of the doctrine of marshaling assets. The holding is not at variance with the general rule that federal law determines exemptions from federal taxation.

The conclusion of the Court of Appeals is fully validated by the cases it cited, notably United States v. Dallas National Bank, supra; Leuschner v. First Western Bank and Trust Company, supra; and In re Rosenberg’s Will, 269 N.Y. 247, 199 N.E. 206 (1935). We fully agree with petitioner that we are not bound by the decisions of the courts of our sister states nor of the federal system; however, we respect their decisions and are entitled to follow the conclusions reached in any well-reasoned opinion irrespective of source.

We affirm the action of the Chancellor and Court of Appeals and hold that respondent’s share of the income generated by the spendthrift trust may be subjected to the payment of federal taxes, assuming a proper levy and the observance of all requisite procedural steps.

II.

The Certificates of Assessments

The Court of Appeals held that the Certificates of Assessments and Payments were not properly validated or certified under Rule 44.01, Tenn.R.Civ.P., because (1) the signature of the Director of the Internal Revenue Service was affixed thereto by a deputy and (2) there is no provision in Rule 44.01 for certifying a “true extract.”

We dispose of the latter contention first. Rule 44.01 provides for the proof of an official record “by a copy attested by the officer having the legal custody of the record, or by his deputy.” We do not think it even arguable that the right to evidence an official record by the presentation of a certified copy does not carry with it the right to certify pertinent parts of the record. If other parts are germane, our rules contain ample procedures to require their production and inspection.

Under Rule 44.01, Tenn.R.Civ.P., official records, if in the custody of any public official within this state, “may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy.” Clearly, under this rule the Certificates of Assessments and Payments could have been certified by Claude A. Kyle, the Director of the Internal Revenue Service Center for the Southeast Region, at Memphis, or by his deputy, Dale Crimpley, Branch Chief of the Certification Branch, who had been designated to sign Kyle’s name.

The difficulty in this case stems from the fact that the Certificates bear the purported signature of Kyle, affixed by Crimpley, without any indication that it was so signed. The failure of Crimpley to sign his own name as Branch Chief, and therefore, as Kyle’s “deputy,” is unexplained in the record. While we view this as incredibly sloppy procedure, under the facts of this case, we hold that these records were admissible.

Not only were the documents certified over an official signature and under an official seal, but also the government presented these records by a senior technician employed at the Memphis Service Center, who testified that they were made under her supervision and personally verified by her. Further, the accuracy of these figures is not challenged. In the last analysis we deal with a formality that should not be permitted to frustrate the orderly reception in evidence of an official record.

III.

Notice of Tax Liens

Two certified notices of tax lien were received in evidence by the Chancellor. Each was certified by the Deputy Register of Davidson County, but neither was acknowledged by an official of the Internal Revenue Service, and neither was witnessed. Instead, they contained a certificate over the signature of a Revenue officer. Below the signature of the Revenue officer appears this notation:

(Note: Certificate of officer authorized by law to take acknowledgments is not essential to the validity of Notice of Federal Tax Lien G.C.M. 26419, C.B. 1950-51, 125.)

The Court of Appeals, relying upon Sec. 64-2201, T.C.A., held that these notices were not legally registered and were inadmissible in evidence. We disagree.

It is true, as noted by the Court of Appeals, that Haynes v. State, 213 Tenn. 447, 374 S.W.2d 394 (1964), stands for the general proposition that an instrument will not be considered legally registered unless acknowledged by the maker or properly witnessed.

The filing of tax liens in Tennessee is governed by Sec. 64-2110, T.C.A., which reads, in pertinent part, as follows:

Notices of liens for taxes payable to the United States of America and certificates discharging such liens shall be filed in the office of the register of deeds of the county within which the property subject to such liens is situated.

It will be noted that there is no requirement that they be acknowledged or witnessed — merely that they be filed.

This statutory authorization for the filing of tax liens derives its efficacy from federal statutes, since remedies for the collection of federal taxes have “always been conceded to be independent of the legislative action of the States,” and the federal statute (now 26 U.S.C. Sec. 6323[f]) “does not purport to permit the States to prescribe the form or the contents of that notice.” United States v. Union Central Life Insurance Co., 368 U.S. 291, 293-94, 82 S.Ct. 349, 351, 7 L.Ed.2d 294, 296-97 (1961). In the cited case the Court points out that allowing the respective states to prescribe the form and contents of tax notices would run “counter to the principle of uniformity which has long been accepted practice in the field of federal taxation.” Id. at 294, 82 S.Ct. at 351, 7 L.Ed.2d at 297. See also Atlas Finance Co. v. Wilkerson, 214 Tenn. 619, 382 S.W.2d 529 (1964).

Further, as held in United States v. Estate of Donnelly, 397 U.S. 286, 294, 90 S.Ct. 1033, 1038, 25 L.Ed.2d 312, 319 (1970):

Acts of Congress are generally to be applied uniformly throughout the country from the date of their effectiveness onward.

Controlling federal law relating to form and contents is contained in 26 U.S.C. Sec. 6323(f)(3):

The form and content of the notice referred to in subsection (a) shall be prescribed by the Secretary. Such notice shall be valid notwithstanding any other provision of law regarding the form or content of a notice of lien. (Emphasis supplied).

The place of filing personal property liens is governed by 26 U.S.C. Sec. 6323(f)(l)(A)(ii), which provides that the notice shall be filed “in one office within the State (or the county, or other governmental subdivision), as designated by the laws of such State, in which the property subject to the lien is situated.” Sec. 64-2110, T.C.A. is Tennessee’s designation. Notices so filed must meet the requirement of federal law. We hold that such notices need not be acknowledged or witnessed.

Finally, it is the declared purpose of Sections 64-2110 — 64-2115, T.C.A., to “autho-riz[e] the filing of notices of liens in accordance with the provisions of Sections 6321-6326 of the United States Internal Revenue Code of 1954, and any acts or parts of acts of Congress amendatory thereof.” Sec. 64-2114, T.C.A. This section points unerringly to federal law and by that law we are bound.

There is for further consideration the fact that the lien imposed by Sec. 6321 arises at the time the assessment is made; and, therefore, unlike other liens its perfection does not depend upon its recordation. In re DeKalb Avenue Reconstruction, Borough of Brooklyn, City of New York, 11 A.D.2d 240, 205 N.Y.S.2d 125 (1960), aff’d mem., 12 N.Y.2d 1051, 239 N.Y.S.2d 880, 190 N.E.2d 240 (1963).

IV.

The Specific Claims

This suit involves two claims, asserted by the government. One of them was based on petitioner’s ownership of Harding at Harding Car Wash; the other on his status as a responsible officer of Roman International, Inc. Involved were unpaid Withholding and Federal Insurance Contribution Act (FICA) taxes. Separate notices of tax liens were filed in the Register’s office of Davidson County on May 30, 1974. A notice of levy was served on the Trustee on September 24, 1974, and prior demand had been made upon the Petitioner.

There is a presumption that tax assessments are valid and the burden is on the taxpayer to prove that they are erroneous. United States v. Rexach, 482 F.2d 10 (1st Cir. 1973). We agree with the Chancellor that there is no such proof in the record. Actually the taxpayer agreed to the assessment against Roman International. We concur in all factual findings made by the Chancellor and in the conclusion he reached.

V.

Conclusion

The taxes in question were due and unpaid; assessments were legally made; the taxpayer had actual notice of the claim and demand for payment had been made; notices of liens were seasonably filed. We find nothing in this record that would justify giving relief to this taxpayer. Absent a bona fide dispute as to tax liability, we do not look with favor upon technical objections which, if sustained, would frustrate the government in the collection of tax revenues. This record does not reflect a bona fide defense to the claims asserted by the government.

This action is remanded to the Chancery Court at Nashville for the entry of a final order containing the current amount of the tax liability and such other matters as may be appropriate. The judgment heretofore entered in chancery will bear interest at the legal rate. All costs — both those in the trial court and those incident to this appeal — will be taxed one-half to the United States of America and one-half to the Petitioner. The entire judgment and Petitioner’s share of the court costs are payable out of the income of the trust estate.

FONES, COOPER and HARBISON, JJ., concurring.

BROCK, J.,

dissenting.

BROCK, Justice,

concurring in part, dissenting in part.

I concur in the opinion of the Court in all respects, except its determination that income from a Tennessee spendthrift trust is subject to a federal tax lien.

The United States Supreme Court has made it clear, I think, that federal law does not create any property rights or determine the nature, attributes, or quality of property rights of a taxpayer; instead, it has left that determination to the several states. Aquilino v. United States, 363 U.S. 509, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960); United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135 (1958); Morgan v. Commissioner of Internal Revenue, 309 U.S. 78, 60 S.Ct. 424, 84 L.Ed. 585 (1940).

I also think it clear, as stated in the majority opinion, that under Tennessee law the interest of a beneficiary of a spendthrift trust is of such a nature and quality that it may not be alienated either voluntarily by the beneficiary-debtor or involuntarily by his creditors; inalienability is an attribute of such an interest. State v. Caldwell, 181 Tenn. 74, 178 S.W.2d 624 (1944). Therefore, such a beneficiary, as a debtor for taxes owed to the United States, does not, insofar as his trust interest is concerned, own any property or rights to property within the terms of 26 U.S.C. § 6321. It is not. a matter of such a beneficiary having property which is exempt from the claims of creditors; rather, he simply has never received from the settlor of the trust any right which he may alienate or which may be taken from him.

The question here presented is not answered merely by finding, as does the majority, that the debtor-taxpayer owns property or rights to property; it is necessary to go further and ascertain the nature of such property or rights, i. e., whether it is alienable by the taxpayer. In my view, the Aquilino decision clearly shows that this determination is one to be made by state courts based upon state law; it is not determined by federal statutes and the supremacy clause of the Constitution has no application.

In Aquilino, supra, the taxpayer was a general contractor. The government asserted its tax lien against an indebtedness allegedly owed by a property owner to the general contractor. A dispute concerning the nature and extent of the interest of the taxpayer-contractor ensued. Certain subcontractors, who had performed work on the job, asserted that the money actually received by the contractor-taxpayer and his right to collect amounts still due under the construction contract constituted a direct trust for the benefit of sub-contractors, and that the only property rights which the contractor-taxpayer had in the trust were to bare legal title to any money actually received and a beneficial interest in so much of the trust proceeds as remain after the claims of sub-contractors should be settled. The Federal Government, on the other hand, claimed that the New York State Lien Law merely gave sub-contractors an ordinary lien, and that the contractor-taxpayer’s property rights encompassed the entire indebtedness of the owner under the construction contract. In dealing with this problem, the Supreme Court said:

“The threshold question in this case, as in all cases where the Federal Government asserts its tax lien, is whether and to what extent the taxpayer had ‘property’ or ‘rights to property’ to which the tax lien could attach. In answering that question, both federal and state courts must look to state law, for it has long been the rule that ‘in the application of a federal revenue act, state law controls in determining the nature of the legal interest which the taxpayer had in the property . . sought to be reached by the statute.’ Morgan v. Commissioner [of Internal Revenue], (citation omitted). Thus, as we held two Terms ago, Section 3670 ‘creates no property rights but merely attaches consequences, federally defined, to rights created under state law . ’ United States v. Bess, (citation omitted). However, once the tax lien has attached to the taxpayer’s state-created interest, we enter the province of federal law, which we have consistently held determines the priority of competing liens asserted against the taxpayer’s ‘property’ or ‘rights to property.’ (Citations omitted.) The application of state law in ascertaining the taxpayer’s property rights and of federal law in reconciling the claims of competing lienors is based both upon logic and sound legal principles. This approach strikes a proper balance between the legitimate and traditional interest which the State has in creating and defining the property interests of its citizens, and the necessity for a uniform administration of the federal revenue statutes.” (Emphasis added.) The Supreme Court continued:
“This conflict [regarding the nature of the contractor-taxpayer’s interest] should not be resolved by this Court, but by the highest court of the State of New York. We cannot say from the opinion of the Court of Appeals that it has been satisfactorily resolved. We find no discussion in the court’s opinion to indicate the nature of the property rights possessed by the taxpayer under state law. Nor is the application to be made of federal law clearly defined. We believe that it is in the interests of all concerned to have these questions decided by the state courts of New York. We therefore vacate the judgment of the Court of Appeals, and remand the case to that court so that it may ascertain the property interests of the taxpayer under state law and then dispose of the case according to established principles of law.” (Emphasis added.) 80 S.Ct. at 1280, 1281.

I therefore conclude that Tennessee is free to determine the nature and quality of the interest of a beneficiary under a Tennessee spendthrift trust; that for more than 150 years it has been the law of Tennessee as shown by State v. Caldwell, supra, and other decisions of this Court and by T.C.A., § 26-601, that such a beneficiary has no interest which may be alienated either voluntarily or involuntarily and thus is of a nature and quality which cannot be reached by creditors, even the United States government. Accordingly, I respectfully dissent from that portion of the majority opinion which is to the contrary.

OPINION ON PETITION TO REHEAR

HENRY, Chief Justice.

This cause is before the Court on the petition of Laurence B. Howard, Jr., for a rehearing.

Petitioner charges the Court with error in holding that the “Certificates of Assessments and payments were inadmissible”; that the taxes in question were due; that the assessments were legally made; and that judgment should be entered. The basis of these insistences is that these holdings were not made pursuant to any assignment of error. We respectfully disagree.

In the first two assignments petitioner asserts that “there is no competent material evidence to support a finding that petitioner was liable for taxes.” This, along with insistences made in the respective briefs of counsel and oral argument made at the bar of the Court, required us to look to the evidence.

The basic issue in this controversy was whether the income from a spendthrift trust is subject to a lien for the payment of federal taxes. A secondary issue was the amount of the federal tax liability.

After we had determined that the Chancellor and the Court of Appeals correctly decided the primary issue, orderly consideration of the case required that we decide whether the government was entitled to judgment. In making this determination, we considered the admissibility of the Certificates of Assessments and the validity of the notices of tax liens. An orderly and efficient disposition of these matters was indispensable to a resolution of this controversy.

The petition to rehear is respectfully denied.

All concur.

      . Simultaneously with the filing of the Complaint, the trustee tendered into the registry of the court all funds in his hands belonging to Laurence B. Howard, Jr., and has since paid into court all sums due him when and as income has accrued. The total so deposited as of the date of the hearing in Chancery Court was approximately $28,000.00.

      . Ch. 40, Public Acts of 1831, “An Act to abolish imprisonment for debt except in cases of fraud.” This act would be suspect today — it prohibited the imprisonment of female debtors under any circumstances.

      . This section exempts wearing apparel and school books, fuel, provisions, furniture and personal effects, books and tools of a trade, business or profession, unemployment benefits, undelivered mail and workmen’s compensation benefits.

      . Also in accord with the decision of this Court and the Court of Appeals is Sec. 157(d) of the Restatement (Second) of Trusts (1959): “Although a trust is a spendthrift trust or a trust for support, the interest of the beneficiary can be reached in satisfaction of an enforceable claim against the beneficiary ... by the United States or a State to satisfy a claim against the beneficiary.” See also the Comment on Clause (d).

      . Sec. 64-2201, T.C.A., provides:
      To authenticate an instrument for registration, its execution shall be acknowledged by the maker, or proved by two (2) subscribing witnesses, at least.

      . We actually held them to be admissible.


author: BROCK, Justice.

text:
    Michael L. BROOKS, Appellant, v. Dr. Stacy A. GARNER et al., Appellees.
    Supreme Court of Tennessee.
    April 24, 1978.
    W. Howell Forrester, Pulaski, for appellant.
    Jack B. Henry, Pulaski, for appellees.
   OPINION

BROCK, Justice.

This is an appeal from the judgment of the Circuit Court of Giles County affirming the action of the Beer Board of the City of Pulaski in denying appellant’s application for a permit to' sell beer for consumption off the premises at his place of business in Pulaski. It appears from the record that the sole basis for denial of the permit was the opinion of the members of the Beer Board that Pulaski already had a sufficient number of outlets for the sale of beer. It also appears, however, that the City has not enacted an ordinance limiting the number of beer permits which may be outstanding in the City. The appellant, therefore, argues that the action of the Beer Board and of the trial court in denying his application for a permit solely upon the grounds that a sufficient number of beer outlets already exists is necessarily arbitrary and capricious, there being no ordinance fixing such a limitation.

The legislature has delegated to cities and towns of this state authority to exercise a broad discretion in the regulation of the sale of beer within their corporate limits. T.C.A., § 57-208. Included within this grant of power is authority to limit the number of permits for the sale of beer. Barnes v. Dayton, 216 Tenn. 400, 392 S.W.2d 813 (1965); DeCaro v. Collierville, 213 Tenn. 254, 373 S.W.2d 466 (1963).

It is clear, however, that the power thus delegated must be exercised through the enactment of ordinances of the municipality. Thus, T.C.A., § 57-208, provides:

“Ordinances governing issuance and revocation of licenses — (a) All incorporated cities and towns in the state of Tennessee are authorized to pass proper ordinances governing the issuance and revocation of licenses for the storage, sale, manufacture and/or distribution of such beer and/or other beverages as herein prescribed within the corporate limits, providing a board of persons before whom such application shall be made, but the power of such cities to issue licenses shall in no event be greater than the power herein granted to counties, but cities and towns may impose additional restrictions, fixing zones and territories and providing hours of opening and closing and such other rules and regulations as will promote public health, morals and safety as they may by ordinance provide.” (Emphasis added.)

It has been recognized by this Court that the authority thus delegated must be exercised through the enactment of ordinances. Case v. Carney, 213 Tenn. 597, 376 S.W.2d 492 (1964). Moreover, it is elementary that statutes prescribing how delegated police power may be exercised by municipalities are mandatory and exclusive. State ex rel. Lightman v. City of Nashville, 166 Tenn. 191, 60 S.W.2d 161 (1933). It may be stated generally that the powers of a municipality are to be carried into effect and discharged through provisions of ordinances enacted by the council or other governing authority. See 56 Am.Jur.2d Municipal Corporations § 343 (1971).

There can be no doubt that the City of Pulaski is vested with broad authority to limit the number of beer permits that are to be outstanding in the City; but, we conclude that this authority must be exercised only through the enactment of proper ordinances so providing. It is a fundamental goal of our system of government that, to the extent possible, we be governed by laws rather than by men.

Therefore, we conclude that the denial of the appellant’s application for a beer permit was arbitrary and capricious. The judgment of the trial court is reversed and this cause is remanded to it for such further proceedings as are necessary and proper. Costs incurred upon appeal are taxed against the appellees.

COOPER and HARBISON, JJ., and DAUGHTREY, Special Justice, concur.

HENRY, C. J., not participating.


author: HARBISON, Justice.

text:
    H. Leonard ISAACS and wife, Ann Isaacs, Petitioners-Plaintiffs, v. Zolton BOKOR and Bokor Enterprises, Inc., Respondents-Defendants.
    Supreme Court of Tennessee.
    May 1, 1978.

      Louis Farrell, Jr., John T. Conners, Jr., Nashville, for petitioners-plaintiffs.

      John W. Wagster, John J. Hollins, Nashville, for respondents-defendants.
   OPINION

HARBISON, Justice.

In this case the petitioners sued respondent claiming damages for alleged tortious misrepresentations and also seeking rescission of two transactions between the parties. Petitioners purchased from respondent a lot in a subdivision of which he was both the owner and the developer. Subsequently, under a separate agreement, respondent had begun to construct a residence for petitioners when it was discovered that the building site was outside the lot which they purchased. Respondent counterclaimed for the unpaid balance of the construction contract, and impleaded as a third-party defendant an architect employed by the petitioners to design their residence and to supervise its construction.

* The case was tried to a jury, which found the issues in favor of the petitioners and awarded them $50,000.00 in compensatory damages and $37,500.00 as punitive damages. In its verdict the jury also awarded rescission to the petitioners. Judgment in accordance with the verdict was entered by the trial judge, conditioned upon execution by petitioners of a proper warranty deed, reconveying the property to respondent. The counterclaim of respondent and his third-party action were dismissed by the jury. On post-trial motion, however, the trial judge, while approving the verdict in favor of petitioners, set aside the verdict in the third-party action and awarded respondent a new trial against the architect. That action is not involved on this appeal.

Respondent appealed to the Court of Appeals. That court reversed and remanded for a new trial, holding that the jury instructions were insufficient, particularly in omitting any reference to contributory fault on the part of the petitioners. This Court granted certiorari to give further consideration to the issues involved.

There were many disputed issues of fact and sharply conflicting testimony at the trial. Many of the basic and controlling facts affecting the rescission aspects of the case, however, were virtually undisputed.

Respondent is a trained engineer, but for many years he has been engaged in the development and sale of residential subdivisions in the Nashville area. During the 1960s he purchased several tracts of extremely hilly and rugged land in the southern part of Davidson County in the suburban city of Oak Hill. Respondent platted and subdivided his property in sections. The property which is the subject of this litigation was shown as Lot No. 31 on the Plan of Bokor Heights, Section 4, as recorded in the Register’s Office of Davidson County.

Lot 31 was situated high in an extremely uneven and hilly area. It lay at the north end of a cul-de-sac, known as East Hillview Drive, which was the only public road or access to it and to several other lots in the subdivision. The cul-de-sac terminated in a circular turn-around, and Lot 31 fronted 68.23 feet on the northeasterly end thereof. The westerly line of the lot ran 229.76 feet north from the street, and the southerly line ran 211.82 feet to the east. The easterly line was 272.37 feet, and the lot measured 210 feet on the northerly, or rear, line.

Petitioners were interested in purchasing a hillside lot with an attractive view of the surrounding countryside. They learned of respondent’s development, and looked at Lot 31 several times before purchasing it. Respondent gave them a copy of the recorded plat, showing the location and dimensions of the lot. While there is conflicting testimony on the point, there was material evidence from which the jury could find that respondent, Mr. Bokor, personally walked some of the lot lines with the petitioners and accompanied them to a very attractive building site, with a magnificent view to the south and southeast, in the vicinity of several large and beautiful forest trees.

All parties agreed that the lot sloped sharply to the northwest from a “saddle” or knoll lying east of the street. The point which was selected by the petitioners as the site for construction of their home afforded the only desirable or practical location for a residence with a view to the south and southeast. A rugged range of hills ran to the north and west, affording little or no view, and to the south and east from the building site the property sloped abruptly in a steep grade, at points being an almost vertical bluff. When petitioners were shown the property, all parties agreed that foliage was very heavy and visibility quite difficult, rendering it virtually impossible for a person to see from one corner of Lot 31 to any other corner, or for one standing in the center portion of the lot to see the lot lines and corners.

Although the parties disagree as to the details of what they said and did, it appears almost beyond dispute from the evidence that both the petitioners and the respondent assumed and honestly believed at all times material to the execution of the two contracts between them, that the building site selected by petitioners lay. within the boundaries of Lot 31. There can be no question from their testimony that the petitioners would not have purchased the property otherwise. It is also clear that Mr. Bokor intended to sell the petitioners his Lot 31, to build them a residence within its borders, and that he believed that the site selected by them was so situated.

It further appears without dispute that this building site does not lie within Lot 31, but is completely outside its perimeters and is on the northwesterly portion of adjacent property owned by John C. Hailey.

Petitioners were clients of a professional architect, Robert W. Doran. The record shows that Mr. Doran visited the property with petitioners before they signed a contract to purchase it on June 11, 1974. The lot was deeded to them on July 23,1974. In the interim petitioners entered into a written contract with their architect, dated June 21, 1974, in which he agreed to prepare plans and drawings, and to supervise the construction of the residence.

The description of the property contained in the warranty deed conforms to that on the recorded plat. Respondent was not obligated or requested to furnish petitioners a boundary or topographical survey, although their architect advised them prior to the closing of the sale that a survey would be desirable. On several occasions thereafter he stated that he particularly needed a topographical survey in order to design the residence. No such survey was ever furnished to the architect, the testimony indicating that the petitioners were unwilling to incur the cost thereof and saw no need of it in view of the fact that Mr. Bokor had furnished them a copy of the recorded plat together with a preliminary topographical sketch which he had obtained when he acquired and developed the subdivision. It appears, however, that this topographical information was of little value to the architect, since it did not show the property lines and was very general in nature. The proof also shows without, contradiction that under the contract documents executed by the parties, it was the obligation of the owners, not the contractor, to furnish all surveys at their expense and that it was the obligation and responsibility of the architect properly to situate and locate the structures within the boundary lines of the property in such a way as to meet all building setback lines and other restrictions pertaining thereto. There is also evidence, however, apparently accredited by the jury, that Mr. Bokor made statements to the petitioners and to the architect suggesting that a survey was unnecessary and that the architect could “eyeball” the elevations and height of outside walls.

After petitioners, Mr. and Mrs. Isaacs, had acquired the lot, for which they paid $18,000.00, their architect prepared preliminary plans and took bids from a number of contractors for the construction of the residence. Most of the bids ran substantially in excess of the amount which petitioners were willing to expend, but respondent, Mr. Bokor, submitted a bid, which, with some revisions, was accepted, at a figure of approximately $105,500.00. A contract was let to him, and construction commenced about October 15, 1974.

In order to make Lot 31 accessible to the street, it was necessary to construct a road or driveway into the property, and a substantial amount of filling was required in order to bring this drive up to usable grade.

The architect, Mr. Doran, with the assistance of the petitioners, staked out the site for the residence. Under date of September 4, 1974 he prepared a general site plan. This document shows the house as being' well within the perimeters of Lot 31, and shows a driveway leading from the street to the building area. It also shows a gazebo, to be constructed about 150 feet east of the residence.

Work proceeded on the roadway and site preparation for the residence, including the erection of retaining walls, until December 14, 1974. On that date Mr. Hailey advised Mr. Bokor that he had discovered that the construction site was on Hailey’s land. Mr. Bokor reacted with disbelief, but advised the petitioners on that evening of his conversation with Mr. Hailey. On December 16, 1974 Mr. Hailey wrote the petitioners and the respondent that the improvements were being built on his property, and the record shows that he verified this information through a surveyor. Investigation by the parties confirmed Mr. Hailey’s contentions, and construction was stopped immediately. Respondent negotiated with Mr. Hailey, and received from him an offer to sell the portion of his property on which construction had commenced for the sum of $7,500.00. Neither Mr. Bokor nor the petitioners, individually or jointly, saw fit to make this purchase. Thereupon petitioners, through counsel, promptly notified Mr. Bo-kor that they considered both their contract of purchase and the building contract to be rescinded by reason of his misrepresentations to them of the location of the building site. They demanded restitution of all sums which had been paid to him and of all other expenses which they had incurred incident to the contracts, including interest on borrowed money and fees of the architect. Mr. Bokor declined to make restitution or to consider either of the contracts rescinded, and he refused tender of a reconveyance of Lot 31.

Petitioners then filed this action for damages, and renewed in their pleadings their offer to deed Lot 31 to Mr. Bokor, upon recovery of their damages. Respondent denied making any misrepresentations to petitioners, elected to treat both contracts as being in full force and effect, and sued for the unpaid balance of the building contract, although construction of the residence had barely begun. His claim was not confined to loss of profits, nor did he seek any accounting from petitioners for rental or use value of Lot 31 or contend that they had failed in any way to tender full restitution to him in the event the contracts were rescinded.

As previously stated, there were conflicts in the testimony of the parties and of their witnesses, and issues of weight and credibility to be resolved by the trier of fact. By their verdict, the jury resolved these issues favorably to the petitioners, and there was material evidence to support the conclusions inherent in their verdict that both transactions between the parties should be rescinded and the petitioners made whole.

The amount awarded to petitioners as compensatory damages was $50,000.00. They introduced testimony, without objection, that they had expended $50,846.81 for the purchase of the lot, progress payments made to the builder, interest on borrowed money and other incidental expenses. The amount awarded by the jury was some $800.00 less than the total submitted for their consideration. While the award was perhaps liberal, none of the items of damages claimed by petitioners was contested or objected to. Respondent did contend that any award made to petitioners should be reduced by their contributory fault, particularly their failure to obtain and furnish the necessary survey to their architect, but primarily the defense consisted of denial of misrepresentations and a claim that ultimate responsibility for the losses incurred by petitioners lay with them and their architect, not with respondent.

The third-party claim of respondent against the architect is still pending and will be separately heard at its re-trial. Therefore we think it unnecessary to discuss it in detail. The record does show that, for whatever reason, the architect located the foundation of the residence in such a manner that its nearest point to the access street was 297 feet. The minimum setback was only seventy-five feet. The driveway curves across the southerly portion of Lot 31 and thence northeasterly onto the Hailey property. The length of the drive is not shown in the record, but it exceeds the distance between the western end of the residence and the street.

From the record, it can be discerned how the mistake as to site location could have occurred. The rear, or northerly, line of Lot 31 measured 210 feet between two concrete markers or monuments. By coincidence, the northerly, or rear, line of Mr. Hailey’s adjacent property also measured 210 feet between two concrete markers. Because of the steeply sloping and rugged terrain, apparently petitioners and their architect, in trying to re-trace and locate the lines of Lot 31 as shown on the recorded plan, must have walked and measured Hai-ley’s rear lot line, rather than the north line of Lot 31. By tape, they measured the distance between the two markers on Hai-ley’s property. They assumed this to be the rear line of Lot 31, and did not check either of the presumed sidelines by actual measurement. Subsequent surveys show that they in effect assumed the lot to be a parallelogram running from the southerly line of Lot 31 on the recorded plan to the northerly line of Hailey’s property, rather than the general rectangle formed by the actual lot boundaries. As previously stated, however, petitioners testified that they were walking in an area shown to them by Mr. Bokor, and it was because of this mistake as to where the markers were located that they believed their site to lie within the boundaries of Lot 31.

The principal cross-assignments of error by respondent deal with jury instructions given at the trial. Although these were rather brief, the nature of the relief being sought by the petitioners must be considered. Since many of the controlling facts were undisputed, the issues to be resolved by the jury were fairly narrow and we find that the major issues, particularly with respect to rescission for mutual mistake, were sufficiently covered by the instructions given that no reversible error materially affecting the .verdict was committed.

Although the action was brought for the tort of misrepresentation, petitioners also sought a determination of their right to rescind their contracts. This was made necessary because respondent had refused to acquiesce in their declaration of rescission upon discovery of the error in site location, and had himself reaffirmed and insisted upon the continued force and validity of the agreements. Under these circumstances it was necessary for the petitioners to seek a judicial determination of rescission, as well as an award of damages from the alleged mistake and from rescission if granted.

A purchaser who has been the victim of a misrepresentation or who has been induced to contract through a mistake of material fact mutual to him and his vendor, is afforded by courts both of law and equity with a number of alternate remedies, including actions for rescission and restitution, actions for breach of contract and actions in tort for misrepresentation. See generally 12-13 Williston, Contracts §§ 1469, 1523, 1542, 1598 (3d ed. Jaeger 1970); 5 Corbin, Contracts §§ 1105 et seq. (1964); 37 Am.Jur.2d, Fraud and Deceit §§ 327 et seq. (1968). All that the law requires of such a purchaser is that he elect consistently among the remedies available to him. Of course, by his conduct he may not both affirm and at the same time disaf-firm his contract. See Lamborn & Co. v. Green & Green, 150 Tenn. 38, 51, 262 S.W. 467, 470-71 (1923); 12 Williston, Contracts § 1528 (3d ed. Jaeger 1970). We do not find that petitioners have done this, and we find that they, through counsel, have at all times elected to treat the two contracts involved as rescinded and to pursue a remedy for damages at law, rather than seek similar relief which might have been available to them in equity. However, we have already pointed out that it was also necessary for them to seek a judicial declaration of their right to rescission because of the denial thereof by respondent.

In its opinion, the Court of Appeals indicated that rescission may not be a proper remedy for a contract which has been partially executed, and it also indicated that damages recoverable upon a declaration of rescission are limited to the purchase price paid for the property. These rules are not necessarily applicable in all cases, nor are we able to sustain the conclusion of the Court of Appeals that “contributory negligence” was a mandatory jury instruction particularly as to the claim for rescission.

While it is true that the present action was cast partly as one for tort, there were material allegations seeking rescission and restitution. In the area of the law involving the rights of vendor and purchaser of real property, considerations of restitution and rescission are relevant, as well as the more limited and familiar elements of a tort action for fraud and deceit or those involving negligent misrepresentation. Petitioners in this action did not seek merely damages for loss of bargain afforded in tort actions. Damages in such actions are awarded consistently with an election to affirm a contract and to keep its benefits, but to claim compensation for a difference in value. See 12 Williston, Contracts § 1524 (3d ed. Jaeger 1970); 37 Am.Jur.2d, Fraud & Deceit § 332 (1968). Here petitioners sought to have the court uphold their right to declare their contracts rescinded entirely; consistently therewith, they tendered a re-conveyance of the property which they had purchased, together with such part of the improvements as rest thereon, principally the roadway and fill above referred to. They sought full restitution to themselves and to cast upon respondent all of the costs and expenses incident to the construction which had taken place on the Hailey property.

It is true that generally a purchaser who has been the victim of either fraud or mistake, upon rescission, is allowed to recover the consideration or purchase price which he paid for the property. In very many cases, that is the only amount involved. See Simmons v. Evans, 185 Tenn. 282, 206 S.W.2d 295 (1947), where earlier cases are quoted as stating that the purchase price is “the measure of damages on rescission.” See also Southern Brass & Iron Co. v. Exeter Mach. Works, 109 Tenn. 67, 74, 70 S.W. 614, 615 (1902) (personal property).

It does not necessarily follow, however, that because refund of the purchase price is a common measure of damages upon rescission, it is the only amount which can ever be recovered by the complaining party.

It is true that in the very early case of Peyton v. Butler, 4 Tenn. 140 (1816), the purchaser of property was not allowed recovery for expenditures in erecting a furnace and other buildings after he had been induced to purchase property by fraud. He was allowed complete rescission of the contract, a refund of the portion of the purchase price which had been paid and cancellation of any unpaid balance. He was also allowed indemnification in the event the vendor had negotiated purchase money notes to third parties. The opinion does not state whether the improvements involved were actually placed on the property conveyed or on other lands belonging to the purchaser. In all events, the damages claimed in that case were deemed to be too remote to be allowable in an action for rescission.

In later cases in this state, however, a rescinding purchaser has frequently been permitted to recover not only the purchase price but also the value of the permanent improvements. In the case of Masson v. Swan, 53 Tenn. 450 (1871), the vendor sold the purchaser a vacant lot by an oral contract. The purchaser took possession, constructed a residence and occupied the premises for three years. He made no payments on the purchase price. After the death of the vendor, the vendee filed suit for rescission and claimed from the heirs of the vendor compensation for the value of the improvements made upon the property. Since the contract was oral, it was held to be voidable, and the vendee was allowed the relief sought, subject, however, to accounting for the reasonable rental value for his use and occupation of the property. Adjustments were also required because of taxes during the period of occupancy. To the same effect was the holding in Smithson v. Inman, 61 Tenn. 88 (1872). The trial court in that case disallowed the value of improvements made by the vendee while in possession, but this holding was reversed on appeal. See also Smoot v. Smoot, 80 Tenn. 274 (1883), where the vendee was given credit for improvements, not necessarily for their full value, but to the extent that they enhanced the value of the property. Interest was also allowed upon the purchase money which had been paid.

There was neither fraud, mistake nor misrepresentation involved in any of the foregoing cases. In the case of Mason v. Lawing, 78 Tenn. 264 (1882), however, rescission was sought because of a failure of title in the vendor. The trial court denied relief because there was no fraud shown. The Supreme Court reversed, however, finding that whether fraudulently or otherwise, the vendor had undertaken to convey without good title. The Court said:

“The chancellor’s decree will be reversed and the sale of the land rescinded and set aside, and the cause will be remanded to take an account of the purchase money paid, for which complainant will have a decree with interest, and for the enhancement of the value at the time of the rescission of the sale of the land, by reason of permanent improvements put thereon by complainant. And complainant will be charged with the value of the rents while he has had the same in his possession, or under his control.” 78 Tenn. at 267-268.

See also Sequatchie Coal Co. v. Sunshine Coal & Coke Co., 25 Tenn.App. 604, 166 S.W.2d 402 (1942).

In the case of Bigham v. Madison, 103 Tenn. 358, 52 S.W. 1074 (1899), a purchaser sought rescission where the seller’s title failed to a material portion of the land deeded. Before discovery of the title failure, the purchaser had cut timber and had also made improvements upon that part of the land which he was later forced to surrender to a third party. Because the complainant had surrendered the property without suit, he had been denied relief in the lower courts; they had also based their decision partly upon a finding that the seller had not been guilty of actual fraud or deceit.

Reversing the Court of Chancery Appeals, this Court stated:

“We grant that its finding is conclusive that there was no false and misleading representations made by the defendants, known to them to be false, and hence, no actual fraud; but the facts as found by it make out a clear case of mutual mistake as to the location of the lines, — a matter material to the contract, not only as to the quantity of land, but as to the location of the lines, and the specific lands the vendors thought they were selling and the vendee thought he was buying, and which were pointed out.” 103 Tenn. at 362, 52 S.W. at 1075.

The Supreme Court ordered rescission of the contract, and remanded the case in order

“ . . . that the rights of the parties may be adjusted upon such rescission in view of the improvements put upon the land, etc.” 103 Tenn. at 367, 52 S.W. at 1076.

In the case of Lebovitz v. Porter, 36 Tenn.App. 149, 252 S.W.2d 144 (1952), a contract between the vendor and purchaser of a going business and the real property on which it was situated was found to be unenforceable for failure of title in the vendor. The purchaser, however, was allowed to recover, not only the amount which he had paid to the seller toward the purchase price, but also the business debts which he had paid and the value of improvements which he had incurred in placing the property into operable condition.

It is true that most of the foregoing cases were suits in equity rather than actions at law. It is well settled, however, that a court of law may decree rescission and allow restitution, as well as a court of equity. See Glover v. L. & N. R.R., 163 Tenn. 85, 40 S.W.2d 1031 (1931); Memphis Street Ry. v. Giardino, 116 Tenn. 368, 92 S.W. 855 (1906); Brundige v. N. C. & St. L. Ry., 112 Tenn. 526, 81 S.W. 1248 (1903); Winters v. Floyd, 51 Tenn.App. 298, 367 S.W.2d 288 (1963); Caruthers, History of a Lawsuit 311 (8th ed. Gilreath 1963); 13 Williston, Contracts § 1598 (3d ed. Jaeger 1970); 3 Corbin, Contracts § 613 (1960); 37 Am.Jur.2d, Fraud and Deceit § 335 (1968). It is usually a requirement in an action for rescission and restitution at law, that the vendee, as in the instant case, make an offer of restitution prior to filing suit. See Restatement, Restitution § 65(d) (1937).

In view of the foregoing, it is too narrow a view to state that a vendee, upon rescission, is limited strictly to the purchase price which he paid for the property. Where he has changed his position and made improvements, he may well be entitled to recover for their value, although, in attempting to restore the parties to their former status, courts may require the vendee to account to the vendor for the use or rental value of the property, to convey improvements to him, and to restore to the vendor anything of value which the vendee has received from him in the rescinded transaction. See generally 77 Am.Jur.2d, Vendor and Purchaser § 574 (1975); 92 C.J.S. Vendor and Purchaser §§ 292, 544 (1955); 17 Am.Jur.2d, Contracts §§ 512 et seq. (1964); 66 Am.Jur.2d, Restitution and Implied Contracts § 10 (1973); 5 Corbin, Contracts §§ 1105 et seq. (1964); Restatement of Restitution §§ 66 et seq. (1937); Annot. 48 A.L.R. 12, 64-68 (1927); 68 A.L.R. 137, 151 (1930).

The trial judge adequately instructed the jury as to recoverable damages in submitting petitioners’ claim for rescission for mutual mistake, and we find no reversible error in that regard.

“Contributory negligence” may, of course, be a complete defense or at least a mitigating factor in tort actions for damages based solely on a theory of negligent misrepresentation. See Tartera v. Palumbo, 224 Tenn. 262, 453 S.W.2d 780 (1970). That case, however, did not involve a claim for rescission of any contractual agreements.

In actions for actual fraud and deceit, contributory fault of the victim generally is not considered a defense. Bevins v. Livesay, 32 Tenn.App. 1, 8, 221 S.W.2d 106, 109 (1949); 37 Am.Jur.2d, Fraud and Deceit §§ 250, 385 (1968).

While the reasonableness of the conduct of a purchaser of land may on some occasions be a basis for denying him relief where there has been a mutual mistake of a material fact, this is ordinarily not the case, and generally such a purchaser may obtain rescission even though the mistake was partly due to his own fault or that of his agent. See generally 3 Corbin, Contracts § 606 (1960).

As indicated in several of the cases cited earlier in this opinion, the purchaser of land usually is entitled to rely upon the vendor’s representations as to its boundaries. See Bigham v. Madison, 103 Tenn. 358, 52 S.W. 1074 (1899). The case of Wilson v. Mid-State Homes, 53 Tenn.App. 520, 384 S.W.2d 459 (1964), involved a claim for rescission or for damages because of a mistaken boundary line. There the Court said:

“In other words, if the defendant knew when the contract was signed that the fence behind the house was on the other man’s property and that the stake described in the contract was not the true corner, then this amounted to a misrepresentation and fraud on the complainant. On the other hand, if both the defendant and complainants acted on' the assumption that the stake referred to in the contract was the correct location of the corner and proceeded on that basis, it was a mutual mistake.
“We are convinced that the equities in this case necessitate either rescission of the contract or the awarding of such damages to the complainants as the facts and circumstances will warrant.” 53 Tenn.App. at 531, 384 S.W.2d at 464.

Mistakes as to the existence of title, boundaries, quantities and conditions of land have been the source of frequent litigation. Relief by way of rescission or adjustment of the purchase price usually is granted where there is a material mistake as to the identity of property, and the rules of “contributory negligence” applied in tort actions generally are not held applicable. See generally 3 Corbin, Contracts § 604 (1960); 13 Williston, Contracts §§ 1566A, 1596 (3d ed. Jaeger 1970). As stated by Corbin, when the purchaser is mistaken as to the land he intends to buy:

“If the written description is clear and accurate, the purchaser’s mistake may have been negligent in failing to read it at all or in failing to observe that it does not describe the tract he means to buy. Often, however, the discrepancy between the written description and the land he has in mind cannot be determined by merely reading the description. It may require the examination of other documents or records and an inspection of the ground itself. Even by these methods, identification may not be easy. Generally, the purchaser’s error is due to the fact that he looked at the wrong tract. The wrong tract or the wrong boundary lines, may have been pointed out by the vendor or his representative. Whether this last is the case or not, the purchaser usually is held entitled to rescission, with mutual restitution if performance has occurred. Mistake as to identity of the land is a material and vital mistake.” 3 Corbin, Contracts § 604 (1960).

Where there is a material misrepresentation by the vendor, the courts have been even less stringent in requiring the vendee to make an independent investigation or inquiry concerning boundaries, area and the like. See W. Prosser, Law of Torts 717-718 (4th ed. 1971); 3 Pomeroy, Equity Jurisprudence § 895 (5th ed. 1941); 37 Am.Jur.2d, Fraud and Deceit § 208 (1968).

After reviewing the evidence in this case, we can reach no conclusion but that there was a serious and mutual mistake of fact by all persons involved — petitioners, respondent, and the architect — to the effect that the site selected for construction of the residence lay within the borders of Lot 31. Accordingly there was abundant proof to support a finding that the petitioners were entitled to a rescission of both the sales contract and the building contract, and to restitution. Under the facts shown, it would be harsh if not entirely unconscionable to require them to pay to the builder the amount sought in his counterclaim against them.

We have concluded that there was material evidence to support the verdict of the jury with respect to the compensatory award made to the petitioners. Accordingly we reverse the judgment of the Court of Appeals in setting it aside and reinstate it. Regardless of the tort claim, the rescission action was clearly made out, and the verdict should be applied to it. T.C.A. § 20-1317.

On the other hand we are of the opinion that there was no evidence whatever of deliberate fraud or deceit on the part of Mr. Bokor, so as to justify an award of punitive damages against him under the circumstances of this case. His motion for peremptory instructions, made at the conclusion of all the evidence and properly preserved at all post-trial and appellate stages of the case, is sustained insofar as the award of punitive damages is concerned, and the suit is dismissed in that regard.

The judgment of the Court of Appeals is reversed. The judgment of the trial court is reinstated, to the extent of the compensatory award and of rescission. Respondent will be entitled to a reconveyance of Lot 31 to him upon payment of the judgment and otherwise complying with the orders of the trial court. The judgment of the trial court is reversed and the suit is dismissed upon directed verdict as to the claim for punitive damages. Costs incident to the appeal will be divided equally between the parties. Costs m the trial court will be as adjudged there. The cause is remanded to the Circuit Court of Davidson County for such further proceedings as may be necessary, including re-trial of the third-party action.

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

      . Petitioners sued respondent Mr. Bokor individually and also sued a corporation of which he was president. None of the parties has contended that there are any differences in the rights or liabilities of the two respondents, and they have been treated as a single entity for purposes of this opinion.

      . See sketch appended to this opinion.

      . See Haynes v. Cumberland Builders, Inc., 546 S.W.2d 228 (Tenn.App.1976).