### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE July 2000 Session BILL D. WRIGHT v. BONNIE S. HULL Appeal from the Chancery Court for Fentress County No. 98-37 Billy Joe White, Chancellor
No. M1999-02307-COA-R3-CV - August 16, 2000
Plaintiff/Appellee, Bill D. Wright, sued to set aside a 1986 deed whereby he conveyed a certain tract o f land to Defendant/Appellant, Bonnie S. Hull. He charged failure of consideration and fraud

. Defendant,

Ms. Hull, asserted that she and Mr. Wright cohabited without marriage for twelve years until their separation in 1998. She asserted that the property conveyance wa

s a gift and was als

o conveyed to her by Mr. Wright to put the property out of the reach of his creditors. The trial court held the parties to be equal tenants in common and ordered the property sold. We reverse the trial court and dismiss the case. Tenn. R. App. 3 Appeal as of Right; Judgment o

f the Chancery Co

urt Reversed. W ILLIAM B. C AIN , J., delivered the opinion of the court, in which B EN H. C ANTRELL , P.J., M.S., and P ATRICIA J. C OTTRELL , J., joined. S. N. Garrett, Jam

estown, Tennesse

e, for the appell

ant, Bonnie S. Hull. OPINION Bill D. Wright (“Plaint

iff”) filed suit

against Bonnie S. Hull (“Defendant”) on April 24, 1998 alleging that he and Defendant, although never married, began living with each other in 1982 and conducting themselves as husband and wife u n til their separation in late 1997. Plaintiff had been previously

m arri ed and had received a certain tract of land in Fentress County, Tennessee by quitclaim deed in settlement with his former wife. The property was enc u mbered by a mortgage through Farmer’s H

ome Admin istration in the name of Plaintiff only. He asserts that the parties sought advice of counsel and reached an agreement whereby Plaintiff would convey the property to Defendant

and that simultaneously Defendant would convey the p

roperty back to him with neither deedbeing recorded. The deed from

Plaintiff to Defendant, however, was recorded on October 15, 1986. The alleged dee

d back from Defe

ndant toPlaintiff appears no where in the record. Plaintiff therefore claims a breach by Defendant of this rather nebulous agreement to re convey.
In answer, Defendant admits the relationship of the parties but denies the agreement either to reconvey or not to record the conveyance from Plaintiff to Defendant. She admits that Plaintiff-2-

continu ed to make the Farmer’s Home payments while they cohabited. She further asserts that Plaintiff is

barred from equ

ity by unclean han

ds in that “he told

the defendant that she had earned this home . . . by being a goodhousewife and housekeeper for the plaintiff for many years and that he had cr editors that he was afraid might take the home if he left the home in his name so he wa s giving it to the defendant.” The testimony in the cas e is almost entirely

limited to that o f Plaintiff and De fendant. Plaintiff had sought the advice of Thomas Coleman, an attorn

ey, and Plaintiff t

estified regard

ing this advice as follows:

Q. All right. It - - do you remember going to Tom Coleman’s office and doing this deal to try to hid

e this property fr

om your creditors ? A. I wasn’t trying to hide it, he just said this would work. Q. All right. This would work to keep - - A. - - keep them from trying to take it away, you know - - Q. - - it would work to keep the creditors from taking the property away from you? A. Debt. The debt was a debt with Jane Goo seman, my first wife. When we built the house, it tell right in here what - - Jane, we built the house. Q. - - yes, sir. A.

- - so she went in debt withanother man and bought a lot of stuff from Baylou’s - - Q. - - I understand. A. - - and that’s the

debt. Q. I understand that. In the final divorce dec r ee, there’s listed out a bunch of debt that for some reason you took over and they were trying to collect from you, is that right? A. Well, the debt took over - - they didn’ t read that it was and my debt was supposed to

not have been stuck with hers but they still tried to stick me with her debt even after

we got divorced. They tried to clai m they didn’t get the

paper in time or didn’t get notified in time.-3- Q. Okay. So the people that you and Jane owed together, or that maybe just Jane owed - - A. - - yeah. Q. - - during your

divorce - - durin

g your marriage t

o Jane, were trying to collect that the

money Jane owed th

em, from you, is tha

t right? A. Uh-huh. Q. So Tom was trying to put this property in Bonnie’s [(Def endant’s )] name to keep Jane’s debtors from trying to collect it from you? A. Yeah, something lik e that. This testimony of Plaintiff is buttressed by the equally strong testimony of Def end ant and forms the basis for

the trial court’s

final conclusion w

herein the reco

rd reflects: THE COURT: The facts of this case are that Mr. Wright conve yed this property

to Ms. Hull in 1986 to defeat creditors and perhaps to take c

are of Ms. Hull if he died whereupon she would not have inherited the house. Ordinarily, in a case like this the Courts le

ave th e parti es where they are because it’s probably a fraudulent conveyance. The difficulty with the action of the trial court is that after making a clear finding of fact supported by the record that the conveyance was intended to defeat creditors, the trial court goes on to say: But this case is a little different from the usual in tha

t since that conve

yance in 1986 Mr. Wright has continued to make the payments and does so up till this date. So I think the equitable thing to do in this property is to dec lare th at these parties are tenants in common in this property each owning 50 percent subject to the mortgage. It is in this respect that the trial court is in error. Except for the value of the property, there is little difference betwe e n this case and McCallie v. McCall ie , 719 S.W.2d 150 (Tenn. Ct. App. 1986 ). In McCallie , a father had an automobile accident in which a passenger in his vehi cle wa s hurt. Fearing that he would be sued, he conveyed his $120,000.00 farm to his son without consideration and then, when the suit did not materialize, demanded of the son that he reconvey the property. Upon the son’s refusal, the father brought suit against him. This court held:

The case at

bar does not fall within the ambit of the usual case where a parent makes a conveyance to

a child and on trial the issue is that of overreaching and undue i nfluence. The issues here are (a) did [the father] sell the farm to [the son] for $120,000 or (b) did

he convey it to [the

son] for the purpo

se of placing it

beyond the-4-

reach of possible judgment creditors. The chancellor found it was the latter, andwe agree. A court of

equity will leave the parties where th ey have placed t

hemselves, and will refuse all affi

rmative aid

to either of the fraudulent parties. See Continental Bankers Life Insurance Co. v. Simmons , 561 S.W.2d 460 (Tenn. App. 1977). “One cannot take advantage of his own wrong.” Winter v. Allen , 166 Tenn. 281, 284, 62 S.W.2d 51 (1933). McCallie , 719 S.W.2d at 153.

In Thomas v. Hedges , 27 Tenn. App. 585, 183 S.W.2d 14 (1944), a case quite analogous to the case at bar , the father conv

eyed his farm to hi

s two sons at a time when a divorce was contemplated by the father. He subsequently requested the sons to deed the property back to him after the marital discontentment was resolved. The sons refused. The father died and the other surviving children brought s uit against the brothers to have the land placed back into the estate. The chancellor held for the plaintiffs. The Cou rt of App eals reversed and remanded for dismissal. The court said: [T]here being no intervening rights of creditors, the deed was good as between the parties and their privies. . . . . And it is settled in

this state by an unbroken line of decisions that a part y g uilty of fraud is no t entitled to be rel

ieved from its consequences. Williams v. Lowe , 23 Tenn. 62; Mo ody v. Fry , 22 Tenn. 567; Coleman v. Pinkard , 21 Tenn. 185; Mulloy v. Young , 29 Tenn. 298; Sharp v. Caldwell , 26 Tenn. 415, 416; Parks v. McCamy , 40 Tenn. 297; Hubbs v. Brockwe ll , 35 Tenn. 574. . . . The rationale of the rule is to be found in the two max ims: “He who com es into equity must come with clean hands”; and “No one can take advant

age of his own wro

ngs.” Gibson’s Suit[s] in Chancery, 42 and 51. The fact that th e bill . . . charges that the defenda

nts p articipated

in the fraud avails the complainants nothing. Th e applicable

maxim is that “Where parties are equally in the wrong, the condition of the defendants is the strong er.” I n such a case, a court of equitydeclines to intervene, not by way of favoring the defendant, butbecause public p

olicy requires th

at the court be not

used to enable a party to reap the benefit of his own fraud. Thomas , 183 S.W.2d at 16-1 7 (citations omitted ); McCallie , 719 S.W.2d at 153-54.-5-

In the case at bar, the chancellor found t hat the conveyance by Plaintiff to Defendant was made at least, in part, t

o defe at creditors. In

keeping with settle

d Tennessee law , we leave these parties where we found them. Continental Banker s Life Ins. Co. v. Simmons , 561 S.W.2d 460 (Tenn. Ct. App. 1977). It is also appropriate to note that the Plaintiff apparently has a

bandoned his

appeal as he filed no brief in

the case and the

record shows only

a late-filed let

ter from his

former counsel t

hat he did not “wish to defend this appeal.” The judgment of

the trial court is reversed, and the case is dismissed at the cost of Plaintiff, Bill Wright. The case is remanded to the trial court for the collection of costs.

__________________________________________ WILLIAM B. CAIN, JUDGE