### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON April 25, 2003 Session
CHAQUELA MORGAN, CONSERVATOR OVER THE PERSON AND PROPERTY OF

KATIE MAE HIGH v. CH AMPION ROOFIN G & REMODELING, ET AL 

### . V 

### . CHARLES F. HILL

A Direct Appeal from the Chancery Court for Shelby County No. 107301-3 The Honorable D. J. Alissandratos, Chancellor

No. W2002-01941-COA-R3-CV - Filed July 29, 2003

This case involves issues of equitable s ubro gation, estoppel, abandonment of realty , and unjust enrichm ent. Appellant is the owner of a one-half undivided interest in the property at issue in this case. The owner of the other one-half interest pledg ed that interest as collateral on a home improvement

loan made by Appellee. A ppellant was not a party

to this loan and, at the time of the loan, had not lived at the property for several years although there had been no tr ansfer of his title. The original loan went into default and Appellee sought foreclosure on the property . An injunction

was issued to stop the foreclosure and the A ppellant e ntered that suit as an Interve ning Plaintiff. Following a non-jur

y tr ial, the trial court

found that Appellant had abandoned the property thereby losing this one-half interest. The trial court subrogated A ppellant’s interest in the property to the lien held by Appellee. A

ppellant appeals from this final order. We affirm in part, reve rse in part and remand.

Tenn. R. App. P. 3, Appeal as of Right; Judgment of the Chancery Court Affirmed in Part, Reversed in Part and Remanded

W. F RANK C RAWFORD , P.J., W.S., delivered the opinion of the court, in which D AVID R. FA RMER , J. and H OLLY M. K IRBY , J., joined.

John D. Horn

e, Memphi s, Attorne

y f or In terveni ng Plaint

iff-App ellant, Ch arles F . Hill
J. Alan Hanover, Memphis, For Defendant-Appellee, B oshwit Brothers Mortgage Corp.

OPINION

On June 17, 195 5, Charle s F. Hill (“Hill,” “Interve

ning Plaintiff

,” or “A ppellant ”) and K atie Mae High (“High”) ac quired property at 1417 Rayner in Memphis, Tenne ssee (the “Reside nce”)

. In c onjunctio n with

the purchase of the Residence, Hill and High e xecuted a First Mortgage Deed1 Th ere is so me d ispute in the rec ord as to the exac t date that H ill left the Resid ence

. Hill’ s Complaint stat es that he l eft in 1965.

2 Chaquela Morgan was appoin ted conser vator over the pers on and property of Katie Mae High, see infra

. -2- of Trust, to s ecure t

heir pur chase mo ney

debt t o Lead er Federal Bank. B oth the Warranty Deed pursuant to which H

ill a nd High acquire d the R eside nce and the De ed of T rust H ill a nd High executed in favor of Leade r Federal indicated that Hill and High wer e husband and wife. However, Hill and High were never marr ied but were merely

living together.

Hill and H igh continued to reside together until approximately 1983, 1 at which t

ime th e y separated. After t heir s eparat ion, High continued to live in the Residence. In 1995, High contra cted withChampion Ro ofing and Remodeling (“Champion”) to perf orm work on the Residence. In or der to obtain financing for the work, Champi on contact ed Boshwit Brothers Mortgag e Corporation (“Boshwit,” and together

with Champion and Morgan 2 , “Defendants,” or “Appellees” ). Boshwit has been in the business of mortgage loans and property management

in Memphis s ince 1865 . Boshwit obtained a title se arch, w hich rev ealed th at the or iginal deed reflec ted that Hill and High were married when, in fact, they

were not, and that

the Residence was not owned solely by High, but by Hill and High as tenants in common.

On March 27, 1995, Boshwit made a loan to High in t he princ ipal amount of $12,318.60. The funds loaned by B oshwit were used for the benefit of the Residenc e, includ ing pay ment of pa stdue taxes and exterior repairs and remodeling. Hill did not join in the Promissory Note and did not convey his interest in the Residence as collateral. The Deed of Trust executed in conjunction with the Promissory

Note lists o n ly H

igh. The Deed of Trust wa s recor

ded in the

Shelby County Registe r’s Off ice at I nstrumen t Number E

Z 7106 a nd reads , in pertin

ent part , as follo ws:

Th is Ins tr um en t P re pa re d b y: BOSHWI T BROS. MO RTGAGE CO RP. Memphis, Tennessee 38104

DEED OF

TRUST

This Inde nture ma de and e ntered i nto this 27 th day of Mar ch, 1995 by and between

KATIE MAE HI

GH, A/K/A KATIE MAE HI LL , Unmarried
Party of the first par

t, and
Party of the sec ond part, Felix H. Bean, II I, Trustee, WITNESSETH: ...[S]aid party of the first part has bargained and sold and does hereby

bargain, sell, convey

and confirm

unto the3 From our revi ew of

the recor d, t here is no in dicat ion t hat thi s f orecl osure was f

inal ized.

-3- said party of the second part the fo ll owing de scribed real es tate situated a nd being in Memphis, Shelby

County , Tennes see, to w it:

Lot 119, South

Parkway Willett Subdivision, of record in Plat Book 8, Pa ge 10 6, of

th e R eg is te r’ s O ff

ic e o f s ai d C ou nt y.

This being th

e same pr operty convey ed to Char

les F . Hill an d wife, Katie Mae Hill, from

B.W. Johnson and wife, Merita Johnson, by deeddatedJ une 17, 1955, recorded June 20, 1955, in Deed Book 3507, Page 018, in the Register’s office of Shelby County, Tennessee.

PARCEL #048-034-00004

PROPE RTY ALSO K

NOWN AS: 141 7 RAYNER, M EMPHI S, TENNESSEE

* * *

But this is a Deed of Trust, a nd is made for the following uses and purposes , and none

other; tha t is to say : the said p arty

of the first part is justly indebted to BOS HW IT BROS. MORTGAGE CORP. Or the holder of the notes hereinafter

mentioned, in the sum of Thirty-Three Thousand Four Hundred Twenty -Five and 28/100----Dollars...
High de fault ed on t he loa n and, in Apr il of 1 996, B oshwi t began forecl osure procee dings on the Residence. 3 Thereafter, the original litiga tion in this case was commenced on behalf of High to e njoin Bos hwit’s fo

reclosu re. Dur ing the c ourse of

the original litig ation, Cha quela Morgan (“Morgan,”and together with Champion and Boshwit, “Defenda nts,” or “Appellees”), was named conservator over the per son and property of High. High died soon thereafter . During settleme nt nego tiations, B oshwit att empted to have Hill transfe r his inter est in the R

esidenc e to them for consideration. Hill refused to do so. At some point during the pendenc y of the litigation, a Quit Claim Deed was discovered. This Quit Claim Deed, dated Aug ust 27, 1998, was recorded in the Shelby County Registrar’ s Office at Instrument Numbe r HS 9947 and purporte d to trans fer Hill’ s interes t in the Res idence t o High. H

ill asser ts that this Quit Claim Deed was neither executed nor authorized by him. Boshwit denies any involvement in the preparation or filing of this Quit Claim Deed.
In June of 2000, and after Hig h’s death, Boshwit found that the Residence was abandoned. On advice of counsel, Boshwit had the Residence repaired, and then rented it. Boshwit k

ept rec ords of a

ll rental income a nd expendit

ures.-4-

On Ju ly 1 7, 20 01 , a Co ns en t O rd er wa s e nt er ed in th e C ha nc er y Co ur t o f S he lb y Co un ty, granting Hill leave to file an I ntervening Complaint in the pending lawsuit. On August 2, 2001, Hill filed an Intervening

Complaint to Set Aside Fraudulent Conveyanc e, To Quiet Title and Recover Damag es (the “ Complaint” ). The Com plaint re ads, in re

levant pa rt, as fo llows:

4. On o r about June 17, 1955, Hill and High purchased a parcel of real

propert y lo cated in

Shelby Co unty , Tennessee and munic ipally

known as 1417 Rayner , Memphis, TN 38109 (herei nafte r referred [to] as the “Residence”)....

5. While Hill

and Hi gh were not married when they acquired the residence, the preparer of the Warranty Deed, none the less, showed Hill and High as husband and wife, thereb y creating a tenancy by the entireties. While Hill and Hig h, by operation of la

w, could not have acquired the Residence as tenants by the entir eties, the

samepractical result would have been rea c hed–that Hill and Hi gh

were either jo int tenan

ts with rig

ht of survivorship o

r tenant s in common with right of survivorship.

6. In order to purcha se the Residence, Hill, anArmy veter an, obtained a Veteran’s Administration mortgag e....

7. While they

had not b een mar

rie d, Hill and High resided together for a ppro xi m ately 12 y

ears. During approximately ten of those twelv e years, Hi ll and High resided togethe r in the Residence. During that period of time, Hill made all pay ments rel ating tothe financing, upkeep and maintenance of the Residence.

8. In approximat ely 1965, Hill and H igh sepa rated a nd Hill left the R esidenc e with the

agree ment that H

igh could remain

in the Re sidenc e, provided

that she ma

de pay ments on the partie s’ mortgage.

* * *

12. At al l tim es material hereto, Boshwit, Champion and Globe knew, or should have known, of Hill’s ownership inter e st in the Residence, ye

t they knew

that Hill would not an d did not p ledge his ownership interest in the Residenceto secur e their a lleged debts. Furthermore, Boshwit

knew o r should have known that it was intended that Hill a

nd High intended t

o acquir e undivided intere st in th e Residence with a right of survivorship in the person that live d longer.-5- 13. On or abo u t August 27, 1998, a

fter Bo shwit bec ame
co ncerned over its questionable collateral interest in the Residence due to the d efecti ve Deed of Trust t

hat had be

en execut ed by only High and not

Hill, a Quit Claim Deed was strangely recorded in the Office of the Register of Shelby County, Tennessee a

tInstrument HS 9947.... While that Q

uit Claim Deed pur ported to transfe r the inte rest of Hill to High, it w as not exec uted by Hill. That

“Quit Claim Deed”

wa s never pr

esented to Hill for

his appro val or sig

nature, and is a fraudulent

instrument that should be set aside and removed from the public record.

14. In 19 99, Hil l sustaine d a stroke which re sulted in h

is physical impairment, but not his mental impairment. Since his stroke, Hill has resided at the King’s Daug hters and Sons Ho me at 1467 East McLemore

Ave., Memphis, TN 3 81 06. During his stay a t King’s Daughters and Sons Home, representatives of Boshwit have appe ared in his room unannounced offering to purch ase his interest in the Residence for $500. In add ition, representatives of Boshwit have contacted Hill’s brother

attemptin g to hav e Hill sig n over hisinterest in the Resi dence to

Boshwit.

15. Following the death of High, Boshwit unlawf ully took possession of the Residence an d b egan to rent the Residenc e for its

own account. Those actions on the part of Boshwit were

undertaken without not

ice to or permissio n from Hill.

* * *

17. Hill alleg es that a s a resu lt of the r ight of s urvivors hip implicit in the Warr

anty Deed at tached h ereto a s Exhibit A, a

nd as a result of the deat h of High, Hill is the sole owner of the Residence.... Hill further

allege s that B o shwit, having unlawfully and/or wrongf ully tak[en] poss essi on o f the Residence and used the Residence for its ow n financ ial acc ount, should be obligated to repay Hill for the revenues Boshwit gene rated from its unlawful and/or wrongful use of the Residence.
On August 20, 2001, Boshwit filed its Response to Hill’s Interve ning Complaint, asking that t he Qui t Cla im Dee d be de clared correc t and v alid, that t he Deed of Tru st ex ecuted by High to secure a loan from Boshwit be declar ed a correct and valid lien ag ainst the Residence, and that, re gardle ss of the c laim of Hill, Boshwi t’s Deed of Trust b e decla

red a lie n again st all interest s in the Res idence. The Respo nse rea ds, in rel evant pa

rt, as fo llows:-6- 13. ...Boshwit would respectfully show t he Court that it was not

awareof th e s ai d Q ui tc la im De ed un ti l j us t r ec en tl y w hen it was produced by c ounsel fo

r Hil l. Boshwit would show as to the al leg ations of Hill that the deed does not bear his signature and the instrumentis fr aud ulent; that it is without sufficient knowledge or information to form a b elief asto the trut h or fals ity

of said allegations and

would demand stric t [proof] of same if its rights are to be affected

th er eb y. Boshwit would further rely on the presumption that

the certificate of the notary public is correct and the burden of proof

is upon Hill

to rebut sai d presump tion. Bos hwit would further show t o the Court that since the intervening complainant

is cla imin g frau dulent co nduct he m ust estab lish his claim by clea

r, cogent and convincing evide nce.

14. Boshw it would sh ow to the Court that it did offe r money to Charles F. Hill

for a quitclaim deed for his alleged or claimed interest in said property in orde

r to clear the title, which is a no r mal and proper thing for it to do under the circumstances...

15. Boshwit would show to the Court that, upon the death of High, relatives whom the Court

had allowed

to take her interest by

previous order, abandoned the pr

operty telling B oshwit that t

hey wer e not interestedin assuming the loan. Boshwit, to protect its intere st, did take possession of the pro p erty, did repa ir it, and did rent it and are h olding the property a

nd rents subject to the orders of this Cour t

. Boshwit would show

to the Cour

t that i t expended large sums of money to repai r the hous e and it sh ould have credit f or that a nd it should be allowed to keep the rent tha t it has collected a s credit agains twhat is owed. Boshwit is prepared to make a full accounting of all monies spent to repair and improve the property and all monies collected in rent.

* * *

17. Boshwit...would show to the Court that it believes that the Quitclai m Deed from Hill to High i s valid a nd that Hill has no interest wh at so ev er in sa id pr op er ty, and that i f said Quitclaim Deed is proven to the satisfaction of t his Court no t to be valid the most interest that Hill c ould have

would be a

one-half undivide d intere st in

sa id propert

y. B oshwit would furthe r show to th

e Court th at th e principles of equity would make it Hill and the heirs o f High responsi ble for the D eed of T

rust cove ring the debt to B oshwit, including all acc umulated interest and attor ney fees. B oshwit would show that Hill received the benefit of the funds which we nt to4 There is no indication i n the record that t his Motion was ever heard or ruled upon.

5 Exhibit 1 is a r eportin g, provi ded by Boshwit, of how t he $12,318.60 loan made by t hem to High was used
to pay vari ous expenses on the Resi dence, incl uding a pre vious l oan forsi ding , t axes (both Cit y and County ), a nd for work done by Cham pion. Th e Ex hibit also indica tes cos ts assoc iated w ith the M ortga ge, whic h were paid by B oshw it, as well as cost s and in come incurr ed and gained by Boshwit f or repair and rent al of t

he Residence

.
-7- improve the property a

nd c annot accept those benefits without assuming the responsibilities that go with it...

Pursuant t

o Tenn. R. App. P. 55, Hill filed a Motion f

or Defa ult Judgme

nt as to Petitioner/Intervening De fendant Chaquela Morgan on September 28, 2001. 4 On October 2, 2001, Morgan filed an Answer to Hill’s Complaint, gener ally deny ing Hill’s allegations. On Februa ry 28, 200 2, Mor gan’s at torne y filed a M otio n to W ithd raw, co nfirm ing th e death of High and alle ging th at Morg an had no interest in the Resi dence, but alleg ing that he had been unable

to attain cooperation from the heirs-at-law of Hig h. On March 8, 2002, an Order was enter ed, granting Morgan’ s attorney lea ve to withdraw.
On July 9, 2002, a non-jury trial was held before Chancellor D.J. Alissandratose in the Chancery Court of Shelby County . Evidence was presented to the trial court by stipulation of counsel f or both Hill and Bos hwit. No a ppeara nce wasmade at th

e trial by Morgan or any one in behalf of High or her heirs-a t-law. Following the presentation of evidence , the trial court made the following relevant findings of fact and conclusions of law from the bench:

This Court as a trier of fact evaluating the stipulations of proof and reading

the depos itions come s to this con clusion: T hat Mr. Hi ll, by legal construction of the word abandon, abandoned his interest in the home i n question. Even in a light most favorable to him that he had paid the mortgage for the f irst 12 yearsan d that Ms. High was going to pay

the rema ining mor

tg age , it doesn’t address the other issues of property ta

xes not collected through the mortgag e, it doesn’t address the maintenance in the form o f roof r

epairs o r other ju st routine maintena

nce, tha t n ot only are de

monstrated I think

reasona ble suspicion by Exhibit 1, 5 but by his own testim

ony he said he [Hill] saw people out there doing work.

Now, he [Hill] in essence turned his interest over for the complete management of this property to Ms. High. He gave h

is tacit approval that, Ms. H igh, you d o with this p roperty as y ou deem f

it. And if Ms. Hi gh goes a

nd endea vors to impr

ove this, t hen Mr. H

ill is the beneficiary

of that and he wants to, and le gi ti ma te ly, receive the benefit of that. If she prese

rves the asset , he w ants to be the be ne fi ci ar y.6 These fi ndings of fac t and concl usions of law were speci fica lly incorporat ed int o the t rial court’ s Final

Decree.

-8- If she, theref

ore, con tracts w ith othersto do this, the n tacitly he’s approving her ability to do so. No, he was not a part of any and it [the Quit Cla

imDeed] wa s a forg ery

but his conduct was almost an indifference. And it’s best evidenced by the stipulation that he really didn’teven co nsid er this to be his own property a nymore. That he didn’teven think

he really ha

d an interest in it because when he went and declared

bankruptcy on the

Schedule A, which clearly asked for

re al ty, [the Residence was not listed]. [T]hisis not a man who has so

numer o us numbers of realty that he should overlook it. He didn’t even list t his one, di dn’t eve

n schedule it.

His indiff

erence , his abandon cann ot now inur e to his advantage. I do n ot find tha t the def endants are guilty

of any culpable negligence. At the ver

y mo st it’s simple negligence. I do think that indeedthere was an unjust enrichment to Mr. Hill. He sh owed no interest in terms of

trying to fo

resta ll the actions of the defendant because as I sta

ted the abandoned, the indifference.

I think ther

e is a doc trine of e

quitable estoppel , and all t

his ultimately

leads to the right...of equitable subrogation. And the Court does find that indeed bo th the mo rtgage and the repairs do rise to the level of equitable subrogation. 6
On July 17, 2002, the trial court issued its Final Decre e, which reads, in pertinent part, as follows:

...[I

]t appears to the Court...that the “Quit Claim Deed” purporti ng to have been executed by CharlesF. Hill and purport ing to tr ansfer his interest in the Property was a

forgery , is null and void and should be set aside.

It further appear s to the Cour

t that the d

efenda nt, Boshwit Bros. Mortgage Company , is en titled unde r the prin ciples of equity providing for equitable sub rogati on, unjust e

nrichme nt, and eq uitable estoppel to have same applied in its favor in this case so that the Deed of Trust dated March 27 , 199 5, recorded in the Register’s Offic e as Document

EZ 71 06 (th e “Deed of Trust”), encumber ing...1417 Rayner (the “Proper

ty” ), shall b e and the

samehereby he

ld to cover and encumber

the entir e fee si mple inter

est of bot h Annie Ma

e Hill

an d t he in te rv en in g p la in ti ff , C ha rl es F. Hi ll in an d t o t he Pr op er ty.-9- It further appear s to the Co urt th at Bos hwit Bros. M ortgage Company has been renting the Prope

rty , has bee

n recei v ing rent al revenues therefrom, and has bee n using those revenues for pay ment of expenses related to maintenance of the Property . It further appea rs to the Court that

Boshw it Bro thers Mortga ge Company, as mortga gee of the Property, is entitled to the rig hts of equitable subrogation, unjust enrichment, and equitable estoppel as to expenses it has advanced for the maintenance of the Property , including, b ut not li mited to, the pa

yme nt of rep airs, taxe s and insur ance, w hich expen se should be reco verable

from the r

ent so long as said property is in the

name of the said Katie Mae H ill and C harles F. Hill. It further appears to the Court that funds remaining thereafter in the custody of Boshwit Bros. Mortgage Company may be applied to reduce the indebted ness se cu re d b y the Dee d of Trust that was recorded in the Office of the Register of

Shelby County , Tennessee March 27, 1998 at Instrument EZ 7106.

IT IS THE REFORE ORDERED, ADJUDGED AND DECREED that

the Qui t Claim Deed recorded in the Office of the Reg ister of Shelby

County , Tennes see at I

nstrumen t HS 9947 is a forgery , is null and void, and is hereby set a side.

IT IS FURTHER ORDER ED, AD JUDGED AND DECREE D that the Deed of

Trust r ecorded in the Register’s Office of Shelby Co un ty, Tennessee as document EZ 7106 and e ncumbering...1417 Rayner be, and sam e is her eby, dec lared and held to be an encumbrance

of and on the entire right title and interest o f both Charles F. Hill and Annie Mae Hill...

IT IS FURTHER ORDERED, ADJUD GED AN D DECREE D that the defendant, Charles F. Hill, is entitled to credit for one-half of the rent collected b y th

e sai d Boshwit Bros. Mortgage Company which can be applied against the indebtedn es s creat ed by the note secured by s aid Dee d of Trust

and/or th e said expenses advanced

by th e s ai d B os hw it Br os . M or tg ag e C om pa ny.

IT IS FURTHER ORDERED, ADJUDGED AND D ECREED that the claim agains tChampion Roofing andRemodeling is hereby dismissed...
Hill appe als from t

his Final Decre e and ra

ises two is sues for

our revi ew as sta

ted in his brief:-10- 1. Did the Tr

ial Court c ommit e rror w hen it ordered the interest of Hill in the Resi dence to

be e quitably subroga

ted to the claims of Boshwit purs uan t to the Mar

ch 27, 199 5 Trust Deed execut ed in its favor by H

igh?

2. Did the Tr

ial c ourt commit error when it ordered Hill to be responsi ble for Hi gh’s debt to Boshwit, as well as for all expenses advanced by

Boshwit for the maintenance of the Residence?
Since this case was tried by the court sitting without a jury, we review the case de novo upon the record with a presumption of correctness of the findings of fact by

the trial court. Unless the evidence preponderates ag ainst the findings, we must affirm, absent error of la w. See Tenn. R. App. P. 13(d).

Did the Tri al Court c

ommi t error

when it orde red the interest of Hill in the Residence to be equitably subrogated to the claims of Boshwit pursuant to the March 27, 1995 Trust Dee

d execut ed in its favo r by High?
The deed to Hill and High dated June 17, 1955 purported to create a tenancy by the entirety. Howe

ver, because Hill and High were not married, the Deed actually created a tenancy in common, giving both Hill and High an undivided one-half intere st in the Residence. See McKee v . Bevins , 197 S.W. 563, 563-64 (Tenn. 1917).

The tria l court fo und that H

ill had ab andoned

the Reside

nce and that he wa s, consequently, estoppe d from asserting his one-half interest in the Residence . From our review of the record, we must disagree with the tria l court’s finding on both the issue of abandonment and on the issu e of equi

table es toppel. N ot only

do we fin d that Hill r

etains hisundivided

one-half interest in the Residence, but we also hold that this interest is not subject to equitable subrogation under the facts of this case nor is the interest divested under the doctrine of unjust e

nrichme nt.

Abandonme

nt
In its ruling from the bench, the trial court stated that “Mr. Hill, by le gal construction of the word abandon , abandoned his int erest in t he home in

question. ” The tri al court bases thi s conclusi on of law

on sever al facto rs, inclu ding Hill ’s “turn [ing] his int erest ov er for th

e comple te management of this property to Ms. High,” his failure to pay the mortgage, taxes, and upkeep on the Residence, and Hill’s failure to list the Residence on Schedule A when he declared bankruptcy. Eve

n though we agree with the tria l court’s finding of fact concerning Hill’s action or inaction concerning this Residence, we c annot reach the same legal c onclusion of abandonment. See Tenn. R. App. P. 13(d). Under long-standing Tennessee law, the burden of showing that one with title has abandoned an inte

rest in re alty

is on the pa

rty allegi ng it. As an affi

rmative d efense , it is necessary to plead waiver and abandonment. Will iams v. W

illi ams , 156 S.W.2d 3 63 (Tenn . Ct.-11-

App. 1942). Moreover, the fact of abandonme nt must be established by “clea r and satisfactory proof.” Woods v. Bonner , 18 S.W. 67, 6 8 (Tenn. 1890). Ev idence o f mere n on-use is insufficient, Smelcer v. Rippetoe , 147 S.W.2d 109, 113 (Tenn. 1940), as is proof of failure to pay taxes on the property, eve n for extended periods of time. Phy v. Hatf ield , 126 S.W. 105 (Tenn. 1910). I ndeed, s ome Tennessee c ases, re flecting the Eng lish common

law rule , have he

ld flatly that the “[a]bandonment of estates is unknown to the law in Tennessee,” Frierson v., International Agricultural Corp. , 148 S.W.2d 27, 36 (Tenn. 1940), on the theory that title to rea l estate is a matter of record and subject to cha nge or divestiture only

on the record. In those cases in which the c ourts have appeared willing to entertain the possibility of finding an abandonment of an owner’s interest in realty , they have ne vertheless required evidence of a “clear and unmistakable affirmative act indicating a purpose to repudiate ownership.” Phy v. Hatfield
, supra , 126 S.W. at 105. Indeed, the standard is so high that in one c ase the Tennessee Supreme Court concluded that “[d]ivestiture of a vested legal title by ‘abandonment’ is unknown at common law, unless it results from some estoppel or adverse possession.” Southern Coal & Iron Co. v. Schwoon , 239 S.W. 398 , 409 (Te nn. 1921) . Moreove

r, when a n abando nment is established, title is not thereby “tra nsferred to an adverse claimant, or pe rson who first seizes the land, but it falls back to the state.” Id. (quot ing Bear V alley Coal

Co. v. De wart , 95 Pa. 72, 78 (1880).

In this case, we ca n find no reference to Hill’s alleged abandonment or waiver in the pleadings. Furthermore, we do not find that the e vidence clearly

and convincingly

supports the trial court’s finding of abandonment. Rather, we note that the only reason this ca se is before us is the fac t that Hill h as asser

ted his rig ht in the Re sidence

by b ecoming

an I nterven ing Plain tiff in the original litig ation. I

n addition , the rec ord indic ates tha t Boshwit tried to ob tain Hill’ s interes t in the Resid ence , to wit: “I

n an effor t to cl ear u

p the title , I [Andr ew B oshwi

t] contact ed Mr. Hill and asked him to see if he would sign a quitclaim deed of his interest in the prope rty.” There is nothing in the record to indicate that Hill ever signe d such a quitclaim deed.
As noted above, Hill’s failure to pay the mortgage, taxes and upkeep on the Residenc e are not indica tive of hisintent to a

bandon the proper

ty. Further

more, the fact tha t he has not lived in the Residence for over twenty years is not the g

ravamen of abandonment. Time is not an essential element of abandonment and is unimportant except as indicating intention. Cottrell v. Daniel , 205 S.W.2d 9 73 (Tenn . Ct. App. 1 947); see also Walsh v. Tipton , 190 S.W.2d 294 (Tenn. 1946). It is well settled in Tennessee that, to constitute an abandonment, there must be a clear, unequivocal, and decisive act showing a determination not to have the benefit in question. See, e.g ., Carroll Co unty Bd. of Ed . v. Caldwe ll , 162 S.W. 2d 3 91 (Tenn . 1942). H ill’s act s in entering this litigation as an I ntervening Plaintiff, and his refusal to sign a quitclaim relinquishing hi s t it le in th e R es id en ce in di ca te th e v er y op po si te of ab an do nm en t. Th es e a ct s c le ar ly, unequivocally, and decisively show Hill’s determination to asser t his legal title in the Residence.

Estoppel-12-

While we do not find that Hill’s actions, or lack thereof, rise to the level of abandonme nt of his legal right in the Residence, the trial cour t has indicated that Hill’s neglect of the Resid ence now precl

udes him, o n the

principle o f equ

itabl e est oppe l, fr om ass erti ng hi s title . We disagr ee. The vital princ iple o f the d octri ne of eq uitab le est oppel is th at he w ho by his langua ge or conduct leads another to do what he would not otherwise have done shall not subject such person to loss of injury by disappointing the expectations upon which he acted. Molloy v. Chattanooga , 232 S.W.2d 2 4 (Tenn. 1950); see also L awrence Co unty v. White , 288 S.W.2d 735 (Ten n. 1956). In or

der for there to be grounds for equitable

estoppel in this cas e, Boshwit must have

reasona bly relied u pon some c onduct of

Hill in decidi ng to ac t. The fa cts of thiscase do not indicate that Boshwit relied on any action of Hill in making their decision to make a loan to High o r to expend

money in fitting the house

for ren tal. I n making the initia l loan, B oshwit relied o n its own int

ernal me chanisms . They

obtained a title se arch, w

hich rev ealed H

ill’s name on the title ; and, in the face of that knowledg e, Boshwit proce eded with the loan, choosing

to assume the risk. Furthermore, in deciding to take ove r the Residence, which it deemed to be abandoned, Bosh

wit admits t

hat they relied “ upon the a

dvice of counsel. ” Neithe

r of thes e actions by Boshwit wa s precipitated by a nything that Hill did or did not do.

In a ddition, it i s well set

tled that e stoppel is a

vailable to protect a righ

t but not to c

reate

one. Franklin v. St. Paul Fire and Marine Ins. C o. , 534 S.W.2d 661 (Tenn. Ct. App. 1975). The tria l court’sdecision

to, in esse

nce, g ive Hill’stitle to Bo shwit cre ates a r ight in B oshwit which it does not have under the law. Boshwit holds no legal title to the Residence . They ar e merely a secured party . Even if the trial court could divest Hill of his title on the basis of abandonment, which we find that it cannot, the trial court could not, on principles of equity , hand that dive sted inter

est to Bos hwit. To do

so would c

reate legal title

to the Resi dence in

Boshwit, wh o i s, at th is po in t, me re ly a se cu re d p ar ty.
Equitable Subrogation

The tria l court fu rther he ld that Bo shwit was entitled, under the principle of equita ble subrogation, to have the Deed of Trust dated Ma rch 27, 1995 “cover and encumber the e ntire fee simple inte

rest of b oth [Katie

Mae Hig h] and the i nterven

ing plaintiff, Cha

rles F. H ill in and to the Property.” We c annot agree with this holding.
Generally , liens are given priority based on the order in which they are recorded; liens recorded first ty

pically have pr

iority over those recorded at a later date. See T.C.A.. § 66-26-105 (1993). S ubroga

tion is the s ubstitution

of a par ty in the plac e of a cr

editor, s o that the

party in whose favor subrogation is exercised succeeds the creditor in relation to the debt. Castleman Constr. Co. v. Pennington , 432 S.W.2d 669, 674 (Tenn.1968). Subrogation is a creature of equity ; its purpos e is to pro vide an e quitable adjustmen

t betwee n the par ties, bas ed on the f

acts and circumstances of the case. Id . at 675; Lawyers T itle Ins. Cor

p. v. Unite

d American Bank , 21 F.Supp.2d 785, 792 n .2 (W.D.Tenn.1998). It is not a right, but a r emedy whose a

pplication depends on a balancing of the equities involved. See Lawye r’s Title , 21 F.Supp.2d at 792; Castleman Constr

. , 432 S .W.2d at 676. Subrogation is not appropriate where the equities of the parties are equal, where the pa rties’ rights are not clear, or whe re it would prejudice the legal or7 He wh o com es into equity must com e with clean hand s.

8 Equity aids the vigilant, not those who sleep upo n their rights.

9 No one ca n take advantage of his own wrong.
-13- equitable rights of another. Lawyer’ s Title , 21 F.Supp.2d at 792. Relevant to this balancing of equities is the degree of neg ligence of the party seeking subrogation. Id . While ordinary negligence or mistake alone is usually not a bar to subrog ation, especially whe re the equities weigh in the favor of the party seeking subrogation, culpable neg ligence will generally

bar such a remedy. See Dixon v.. Morgan , 285 S.W. 558, 562 (Tenn.1926). There a re at lea st three r

easons w hy equitable

subrog ation is no t an appr opriate remedy in this case . First, H

ill is not a c

reditor; he is a hol der of tit le to this Re sidence . If t

he lega l rights of Boshwit and Hill were equal (i.e. they were both lienholders on the Residence), subrog ation of Hill’s lie n to Boshwit’s lien mi ght be a ppropria te. Howe ver, to su broga te Hill’s l egal title to Boshwit’s lien, is beyond the pur view of equity. Ne

xt, as stated above, subrogation is not appropriate where the parties’ rig hts are not clear, or where it would prejudice the legal or equitabl e right s of anoth

er. Having rule d out abandonment a nd estoppe

l supra , the rights of these pa rties ar e clear –Hill owns an undivid

ed one-h alf inter

est in this Re sidence

and Bosh

wit is a lienholder on the other one-half undivided interest. Furthe rmore, as we have discussed above, to subrog ate Hill’ s title to B oshwit would violate Hill’s leg al righ

t.
Finally, equitable subr

ogation is not appropriate where the party seeking subrogation has engag ed in culp able neg

ligenc e. While the

trial cou rt found t hat Bosh wit had co mmitted onl

y ordinary ne gligence in proceeding with their loan to High in the face of Hill’s interest in the Residence, we find that Boshwit’s actions rise to the level of culpa ble negligence in that they knew all a

long tha t Hill had s ome title in

this Reside

nce y et proceeded to secure the ir debt with only High’s inter

est. In addition, they

again assumed a risk when they proceeded to repair the Residenc e for re

ntal. Und er the pr inciples o f equity , Boshwit cannot no w rely

upon the c ourt to undo what they could ha

ve prevented by

simply refusing to make

a loan to High on an unsettled title. See Gibson’s Suits in Chancery (Seventh Ed.) Maxims and Principles of Equity §§ 18, 7 25, 8 27. 9

Did the Trial court commit er ror when it ordered Hill to be responsible for High’s debt to Boshwit, as well as for all e xpenses advanced by Boshwit for the maintenance of the Residence?
Concerning Hill’s obligation on the original loan amount paid to Hig h by Boshwit and on the expenses incurred by

Boshwit in repairing the Residence afte r High’s death, the trial court held as f ollows:

IT IS FURTHER ORDERED, ADJUDGED AND DE CREED that the defenda

nt, Charles F. Hill, is entitled to credit for one-half of the-14- rent collected by

said Bos hwit

Bros. Mortgage Company which can be applied against the indebtedness create d by the note secu red by said Deed of Trust and

/or the sa id expense s advanc ed by the said Bo sh wi t B ro s. Mo rt ga ge Co mp an y. We first hold that neither the original loan made to High in the amount of $12,318.60, nor any repa irs or payments made

to and on behalf of the Residence from those monies, can be charged to Hill simply

by virtue of the fa

ct that Hill did not sign the Promissory Note.

However, the trial court found that Boshwit’s unilateral a ssumption of maintenance and repairs to this Residence after the death of Hig h constituted unjust enrichment for Hill. Consequently, Hill was entitled to one-half the rents but charged with one-half of the repairs. For the following reasons, we affirm the trial c ourt’s finding concerning the re nts and costs of repairs made to the Residence after High’s de ath.
The theories of unjust enrichment, quasi contract , contracts implied in law, and quantum meruit are essentially

the same. Paschall’s, Inc. v. Dozier , 407 S.W.2d 150, 154 (Tenn. 1966). Unjust enrichment is a quasi- contractual theory or is a contract implied-in-law in which a court may impose a contra

ctual obligation where one does not exist. Whitehaven Community Baptist Church v. Holloway , 973 S .W.2 d 592, 596 (T enn.1 998) ( citi ng Paschall’ s, 407 S.W.2d at 154-55). Such contracts are not based upon the intention of the par ties but are obligations created by law and a

re “founded on the principle that a party receiving a benefit desired by him, under the circumstances rendering it inequitable to re tain it without making compensation, must do so.” Paschall’s , 407 S.W.2d a t 154. A co ntractu al oblig ation unde r an unjus t enrich

ment theo ry will be impose d when: ( 1) no con tract exis ts betwee

n the par ties or, if one exist, it

has beco me unenfor ceable or invalid ; and (2) the defe ndant will

be unjustl

y e nriched absent a quasi-contractual obligation. Holloway , 973 S.W.2d at 596. In Paschall’s
, supra , the Court stated:

Each c ase mus t be decided according to the essential e lements of quasi contract, to-wit: A

benefit conferred upon

the defendant by

the plaintiff, appreciation by the defendant of such benefit, and acceptance

of such benefit under such circumstances that it would be inequita ble for him to retain the benefit without payment of the value thereof.

407 S.W.2d at 155.
As previo usly noted, wh

en the pr operty was left vacant b y H

igh’s r elatives , Boshwit entered possession, made necessary repairs, and rented the premises. I t appears that the requirements for quasi contract have been met, to wit: (1) Boshwit’s repa irs to the residence enure to the benefit of Hill in that the repairs effect his one-half interest, (2) Hill admits that he

was awa re that th e repai rs were being ma de, and ( 3) it would

be inequi table to a llow Hill th

is windfall . From the

date Bo shwit took p ossession , Hill, as c o-tenan t in common, is entitle d to10 We n ot e t ha t Bos hw i t ’ s D ee d o f

Tr ust p rovides that sums advanced by Boshwit for taxes, insurance, and mainten ance become p art of the indebted ness secured ; thus, on foreclosure o f the trust deed, depending on the amount bid forthe undi vided one- half int eres t, Boshwi t cou ld re cover all or part of the sums advanc ed, r educed, of cou rse, by its share of the net rentals.

-15- one-half of the net income after allowanc e for pay ment of the taxes, insurance, maintenance, and repair s. 10 The parties have alluded to an injunction issued by the court enjoining the foreclosure of Boshwit’s trust deed. Although we find nothing in the record to this effect, if such an injunction exists, it is hereby dissolved, and Boshwit is free to commence foreclosure procee dings of

the trust d

eed encumbering

the one- half undi vided inte rest.

In sum, we reverse

the final decree holding that Boshwit’s trust dee d is an “encumbrance of and on the entire right, title, and interest of both Charles F. H ill and [Katie Mae High],” and hold that the trust deed encumbers only the one-half undivided interest of the grantor the reof. We reverse that part of the decree which provides for Hill’s share of the net rentals to be applied to reduce the indebtedness secured by the trust deed, and hold that Hill’s one-half undivided interest in the pro

perty is not encumbered

by a ny p art of the

indebted ness secured by

the trust deed. The final decree in all other re spects is affirmed, and the case is remanded to the tr ial court for such further procee dings asmay

be nece ssary . Costs of th e appea l are as sessed one-half

to appellant, Charles F. Hill, and his surety , and one-half to Boshwit Brothers Mortg age Company

.

__________________________________________ W. FRANK CR

AWFORD, PRE SIDI

NG JUDGE, W. S.