### IN THE COURT OF APP EALS OF TENNESS EE AT KNOXVI LLE N ove mb er

5, 200 8 S es sio n ESTAT E OF BENJ AMIN F. DARNELL, SR., ET AL 

### . v.

CHARLES FENN, ET AL 

### . Appeal from t he Chancery Court for Sevie r County No. 05-12-469 Te lford E. Forgety, Jr., Chancellor

No. E2007-02696-COA- R3-CV - FILED FEBRUARY 27, 2009

Cha rl e s Fe nn a ndDo tt Fe nn ow ne d pr op e rty inSe vie r C ou nty . I n A ug us t 19 96 , th e y e nte re d in to a contr act to se ll the property to Benjamin F. Da rnell, Sr. The Fenns agr eed to f inance the sale ove r a ten- year period. According to the contract, Mr. Darnell was to make monthly payments of $999.11 for ten ye ars, with one f

inal balloon payment of $113,058.43. Mr

. Darnell died in February 2004 a ndhis wi fe , M ary Da

rn e ll, c on tin ue d makin g the mon thl y payme nts

. Un be kn ow ns t to Ms. Da rn e ll, on October

14, 2005, the Fenns sold the property to Te ddy Jones. Four days later, Ms. Fenn, thr ough he r at torn e y , s e n tM s
. D ar n e l l a l e t t e r t e r m i n a t i n g t h e c o n tr a c tb a s e d o n v ar i o u s a l l e g e d b r e a c h e s. Ms. Darne ll filed suit seeking specific perf ormanc e of th e co n t ra ct

. Following a bench trial, the court found that the contra ct was e nforc eable ; it ordered speci fi c p er fo rm ance . The trial c ourt reje cted the c laim of the def enda n t T eddy Jones that he was a bona fide purcha ser without kn ow le dg e . T he Fe nn s a ndMr . J on e s a pp e a l. W e a ff

ir m. Tenn. R. App . P. 3 Appeal as of Right; Judgment of the Chancer y Court

Affir med; CaseRem anded
C H A RL ES D. S US ANO , J R ., J., delivere d the opinion of the court, in which H ER S CHEL P. F R ANKS , P.J., and D. M I CHAEL S W I NEY , J., joined.
Jerry K. Galyon, Sevie rv i l l e, Tenne ssee, f or the a ppellants, Charles Fenn, Dott Fenn, and T eddy Jones, Trustee

. David H. Parton, Gatlinburg, Tenne ssee, f or the a ppellees, Ma

ry J. Darnell, indiv i d u al l y and as persona l repre sentative of the Estate of B en j am i n F

. Darnell, Sr., and par ent and ne xt friend of Jonathan J. Da

rnell and Me lissa Darne ll, both mi nors, Benjamin F. Da rnell, Jr., Susan A. Reagan, Do lly M. Da

rn e ll, Li lly M. Sto ltz , T ho ma s E . D arn e ll, Ma ri e E. Da rn e ll, a ndW ill ia m C. Da

rn e ll.
OP IN ION
I

.-2-

Th is i s a n a c tio n f

or sp e c if ic pe rf orma nc e origi na lly br ou gh t by Ma ry Da rn e ll, ind ivi du a lly and as pe rsonal re prese ntative of the e state of he r late husba nd, Benjamin F. Darnell, Sr. (“ the dece dent”)

. The complaint was originally filed on Dec ember 22, 2005. There afte r, it was ame nded to add various parties as additional plaintiffs (collec tively refe rre d to as “Plaintiffs”) , all of whom are heirs to the dec edent’s es t at e. P l aint iffs cla im that the dece dent enter ed into a valid and enfor ceabl e contr act with the Fenns for the sale of

the land located in Sevier County. Plaintiffs so ug ht t o e nf

or c e the te rm s o f that c on tr a c t. A c c or din g to the a me nd e d c omp la int : [T]he P l aint iff Estate holds a contra ct for Sale and Purcha se of r eal property located in Sevier Co u n t y, Tenne ssee, be tween [ the dece dent]

. . . and Def

endants, Charles Fenn and wife, D o t t F enn, date d A ug us t 2, 19 96 , a

c op y o f s a id c on tr a c t bei ng of re c or d .

. . in the Off ice of the Register of D eeds f

or Sevier County, Tennessee. . . . That pursua nt to the terms of t he parties’ contract, the dece dent was purcha sing f

rom Def endants, Charles Fenn a nd wife, D ott Fenn, real property improved by commerc ial buildings . . . . That pursua nt to the parties’ c o n t ra ct, the dec edent, a nd subsequent to the de c e de nt’ s d e a th, the Pla int if f E state pa id a ll m on thl y p a yme nts ow ing pu rs ua nt t o th e a mortiz a tio n sched ule

. . . a ndDe fe nd a nts , Cha rl e s Fen n an d wif

e , Dott Fenn , ha ve a c c e pte d a ll o f s a id p a yme nts exce pting the November

2005 payme n t whi ch wa s returne d to the Plaintiff.
That the d ecedent and the Plaintiff Estate made e xpensive improvements to the existing buildings on t he prope rty, maintained lia bil ity a ndc a su a lty ins ur a nc e on the pro pe rty a ndha ve oth e rw ise fu lly c omp lie d w iththe te rm s o f the pa rt ie s’ a gr e e me nt.
That the De fendants

. . . waived any alleged default of t he contr act by the ir a cti on s [of

] c on tin uin g to a c c e pt the be ne fi ts o f the c on tr a c t, including all monthly payments with full knowledg e of any alleged de fa ult

. That Defenda nt, Dott Fenn, contac ted t he P ersona l Represe ntative of the Pla int if

f E state in 20 05 a ndde mand e d th a t th e Es ta te imm e diate ly make t h e balloon payment which is not due until August 15, 2006, pu rs ua nt t o th e pa

rt ie s’ a gr e e me nt.
Th a t th e Pla int if

f a sse rt e d the ri gh t to c on tin ue makin g p a yme nts in acc ordanc e with the parties’ agre ement due to the fac t tha t the admi n i s t ra tion of the Estate ha d not been c oncluded a nd that the Pe rs on a l Re pr e se ntativ e int e nd e d to dis trib ut e su bje c t pr op e rty to-3- herse lf upon conc lusion of the Estate and financ e the a mount required to make the ba lloon payment in her own name. That on Oc tober [18] , 2005, At t o rn ey Jer ry K. Ga lyon sent Mary Darnell . . . a letter

stating that the parties’ a gree ment was terminated. This letter asse rted a s grounds for te rmination that no action had be en t ak en by the Estate , that the buildings on the property ha d not been ma int a ine d inthe ir

c ur re nt c on dit ionor

be tte r, that the re a l pr op e rty taxes ha d not been pa id, that late cha rges we re owing, and that ins ur a nc e on the bu ild ing s ha d no t be e n ma int a ine d. Th e Es ta te pa id the 2004 rea l estate taxes i mmediately upon rec eipt of said notice and there is no basis for other a llegations of def ault. . . .
That the Plaintiff estate decide d to honor th e d emand of Def endants . . . that the ba lloon payment be made immediately, within two weeks of re ceipt of the notice of de fault. The Plaintiff Estate made arr angeme nts to dist ribute the Estate ’s intere st in the purcha s e agree ment to the dece dent’s spouse, Ma ry Da rnell, and Mar y D ar n e ll o b tain e d a lo a n c o mm it me n t in o r d e r to c o mp le te the purcha se immediately.
The De fendant ’s [s ic] attorney fa iled to respond to ca lls from the Plaintiff’s attorney and the bank’s attorney for the pur pose of making arr angeme nts for the c losing of the transac tion. On November 16, 2005 , an d again on November 18, 2005, the Plaintiff’s attorney forwa rded w ri t t en notice to the D efe ndant’s [sic] attorney that the Plaintiff was exe rcising its right to prepayment of the outs t an d ing balanc e re maining on the contra ct . . . and re questing that the parties proce ed with closing immediately. . . . (P ara gr aph nu mbe ri ng in o ri gin a l om itt e d. ) P la int if fs fu rthe r a lle ge d th a t, e ve n th ou gh Ma ry Da rn e ll had notified the Fenns of her intent to pre pay the outstanding bala nce of the loan, the Fenns nevertheless sold the pro p er t y t o Teddy Jones, a trustee f or an undisclose d principal. Plaintiffs so ug ht s pe c if

ic pe rf orma nc e of

the c on tr a c t a ndda ma ge s f or br e a c h o f t

hat c on tr a c t.
The c ontrac t (“the Contra ct”) was e ntere d into on August 2, 1996. The title of the doc ument is “Deposit Rece ipt and Contract for Sal e and Purc hase.” The Contrac t refe rs to the Fenns as “SELLER” a nd identifies Mr. Da rnell d/b/a Waldens Creek Stables as “BUYE R.” (Capitalization in o ri gin a l.) Th e Con tract als o c on ta ins a n a mortiz a tio n s c he du le . T he a mortiz a tio n s c he du le reve als a purchase price of $132,000, less a $5,000 de posit. Of the re maining $127,000 owed, the decede nt was to make monthly payment of $999.11 f or ten ye ars. Af

ter ten ye ars, the ba lance of $113,058.43 was to be made in one balloon payment. Financing was provided by the Fenns. The Con tr a c t st a te s:A l t hough i ns i gni fi ca nt , t he a m or t i za t i on s che dul e c al l s f or m ont hl y pa ym ent s of $999. 11, a nd t he A ddendum 1 i ndi ca t es t he paym ent t o be $999. 10. -4-

CLOSING AND PO SS E SSION: This contract sha ll be closed a nd the deed de livered on or

befor e August 1, 2006, unless extende d by other provi s io n s o f th is c o n tr a c t.

. . . Po s s e s s io n o f th e p r o p e r ty s hall be delivere d to BUYER at closing . . . . (Capitalization in the original.)
Attache d to the Contract is an Adde ndum. The Adde ndum again re fe rs t o the parties as “BUYER” and “SELLER” a nd then lists several a dditional provisions. These provisions are :

The tenant agre es to lease the above described prope rty under the fo llo wi ng te rm s f

or a pe ri odof 10 ye ars (1 20 mon ths )[ :]
Th e le a se payme nt s ha ll b e $9 99 .1 0 pe r m on th f or 12 0 mo nth s w ith 1 a Balloon payment of $113,058.43.
The tenant agre es to maintain t h e existing buildings in t heir c urre nt condition or better. No buildings s h al l be re moved from the pr operty without written approva l of the landlord.
The tenant shall be responsible for the property taxes and insurance on the bui lding as they bec ome due. The landlord will provide tena nt with c opies of these expense s. Property taxe s and insuranc e will be pro-r ated to the date of c losing.
The tenant shall carry liability i nsuranc e with t he landlord a s coinsured for

all claims arising during the term of this lease a nd any e xte ns ion s. A late charge of 5% will be c harge d for a ny payment re ceive d 10 days af ter the due date.
The tenant shall have the right to pre-pay this lea se in w hole or in part at his option at any time during the lease

.A s a l r ea dy s t at ed, t he Cont r ac t i s t i t l ed “Depos i t Rec ei pt a nd Cont r ac t f or Sa l e and Pur cha s e” a nd num er ous 2
t i m es t h rou g h o u t i d en t i fi es t h e p art i es as “B U Y E R ” an d “SE L L E R

. ” It i s u n cl ear w h y t h e A d d en d u m i n i t i al l y ref ers t o t h e p art i es as “B U Y E R ” an d “SE L L E R ” an d t h en l at er r efers t o t h em as “L an d l o rd” an d “T en an t

. ” T h e t ri al co u rt fo u n d th a t t h e d o c u m e n t w a s a ten -y e a r le a se “ w ith p u rc h a se a t t h e e n d o f 1 0 y e a rs .” -5- Ea rn e st m on e y inthe a mou nt o f $ 5, 00 0 w ill be c on sid e re d p re pa id lease payments. . . . 2 (Para graph numbe ring in original omitted; footnote added.) Ap pr ox imate ly o ne mon th a ft e r the c omp la int wa s f ile d, the ne w purc ha se r, Te dd y J on e s, we nt t o th e su bje c t pr op e rty. As be st w e c a n te ll f ro m th e re c or d, the de c e de nt’ s so n, Be njamin F. Da rn e ll, Jr ., a nd se ve ra l othe r ind ivi du a ls we re liv ing on the pr op e rty an d/o r wo rking a t th e sta ble s. W he n th e de c e de nt’ s so n a ndthe oth e rs re fu se d to le a ve , M r. Jo ne s f ile d c ri min a l tr e sp a ss w arr a nts and the pe ople on the prope rty wer e for cibly remove d.
Plaintiffs sue d the Fenns and Mr. Jones (collec tively r efe rre d to a s “D ef en d ants”). Def endants a nswere d the complaint and genera lly denied any liability to Plaintiffs. The F enns then fi le d a c ou nte rc la im s e e kin g a

de c laratory ju dg me nt that Plaint if fs ha d mate ri a lly br e a c he d th e te rm s of the c on tr a c t a ndthat th e Fe nn s w e re a c tin g le ga lly wh e n th e y te rm inate d th e c on tr a c t. Following a trial, the court ente red a judgment finding that the Contract w as enforce able. The trial court order ed Ms. Darne ll to pay the rema ining balance on the Contract a nd divested Mr. Jones of title to the property. Prior to entering its judgment, the trial court made sever al findings fr om the be nc h. In iti a lly , th e tr ia l c ou rt de te rm ine d th a t th e Con tr a c t w a s a te n- ye ar l e a se “ wi th purcha se at the end of t en years.” The court rea ched this conc lusion for sever al re asons, including the fa c t th a t th e re wa s a ba llo on payme nt a t the e nd of the le a se a s w e ll a s a n a mortiz a tio n s c he du le attache d to the Contract, neither of which w ould be pre sent or nec essary if it was simply a lease. T he court further stated:

[I ]nma ny ways , [ thi s la ws uit] co me s d ow n to thi s. Ha s th is a gr e e me nt o f A ug us t 2 , 19 96 , wa s it , v a lid ly t e rm inate d? W a s it validly t er minated as a gainst the Darnells prior to the time the pr op e rty w a s so ld t o T e dd y J on e s? Th e Cou rt is c on str a ine d to ho ld that th is Ag re e me nt w a s n ot v a lid ly t e rm inate d p ri or to the sa le to Teddy Jones. I t is clear to the Court, it is abundantly cle ar to the Cou rt that e arl y o n, a t le a st, the re we re mul tip le - mul tip le de fa ult s in this Agreeme nt on the part of the Da rnells. Ther e’s just no question about t hat. . . . Howe ver, the parties we nt to court . . . in 2002 over tho se de fa

ult s a ndov e r this Ag re e me nt .

. . and they se ttl e d th e ir differ ence s in 2002. They settled them. W hat that means is anything that c a me be fo re 20 02 , . . . a ny de fa ult that c a me be for e 20 02 is beside the point now.
. . . The parties settled their differ ence s as they existed at that time in September 2002. W hen you do that, you can’ t come ba ck and c omplain about something that ha ppened befor e that-6- time. Now, what has happened since that time and that’s r eally whe re thi s c a se c ome s d ow n.
. . . [I]t ’s no t payme nt o f the mon thl y payments for

sure be cause Ms. Fenn herself t es t ified that, “Look, sinc e th a t t im e , s in c e th e s e tt le me n t i n 2 0 0 2 , th e p a y me n ts w e re always c urre nt.” They w ere always c urre nt, or, in her w ords, “I would have f

orec losed immediately.”
The trial c ourt then discussed va rious items contained in the letter to Ms. Darne ll f

rom the Fenns’ attorne y dated Oc tober 18, 2005, whic h set forth va rious rea sons why the Fenns wer e terminating the Contrac t. Th e t ri al court discussed e ach of the grounds that we re give n for terminating the Contrac t, beginning with the claim that “[n] o action has been taken by the estate.” As to this ground, the trial court found that the “bottom line” is that “the e state didn’t have to take any action. All the estate had to do was to ke ep making the payments on time, which the y wer e.” The ne xt ground involved the Da rnells being late paying the 2004 property t ax es
. T h e t rial court no te d th a t th e Con tr a c t pr ov ide d th a t th e Fe nn s wo uld se ndto the Da

rn e lls the pr op e rty tax n oti c e s. Howeve r, “f

or some reason they stopped sending [the noti ces] to [the Fenns] fr om the courthouse.” Because it was the Fenns’ duty to provide the notice to the D arne lls and because that did not happen, the trial court found there was no bre ach w hen the 2004 taxe s were paid late. Next, the tria l court discussed the Fenns’ claim that the Da rnells did not maintain insurance on the prope rty. The tria l court observe d that even though the re had been some “proble ms” with the insurance and the Da

rnells almost had their insuranc e policy cancelled, the fac t remaine d that it was not canc elled. The court noted that the property was, at all rele vant t imes, insured. Finally, the trial c ou rt dis c us se d the Fe nn s’ arg ume nt that the Da rn e lls faile d to ma int a in the c on dit ionof the pr op e rty in the c on dit ionthat e xis te d at th e inc e pti on of the Con tr a c t. A c c or din g to the tr ia l c ou rt : The Court hol ds that the Darnells were entitled, . . . [and a fter Mr

. Da rn e ll’ s d e a th] , h is h e ir s w e re e nti tle d to no tic e , n oti c e of a n in te nt, notice of de fault in the lea se and of the intent to canc el the lea se if the de fa ult s w e re no t cur e d. No w, I’ ve lis te ne d c los e ly t o b e su re . M s. Fenn has t estified, and so has Ms. Darne ll testified that the year afte r [Mr. Da rnell] died w hich that would put it in the year 2005, Ms . Fenn we nt to Ms. Da

rn e ll a nd me t w ithhe r andta lke d a bo ut the pr op e rty and talked about the conditi on of the prope rty. Ther e’s no que stion in the Cou rt ’s min d a

bo ut that, andMs. F enn tol d M s. Da rn e ll,

“ Yo u’ re go ing to h a ve to cle an it u p, a ndby the way, I w a nt y ou to buy i t

. I wo u l d like for you to go ahe ad and pay . . . the balloon paymen t

. . . and buy it.” The Court’s convince d that happene d. What did not happe n at that point a nd time w as that Ms. Fenn did not say, “I f you don’t get that done within 30 days, 40 days , or 50 days

. . . I ’m go ing to t e rm inate thi s lea se .” She didno t pu t th e Da rn e lls on no tic e that “Lo ok , if y ou do n’ t do thi s, I’ m go ing to t e rm inate thi s lease .” .

. . [Counsel for Plaintiffs] ha s ref err ed to ce rtain ca se law on commer cial leases; and this property . . . had commer cial buildings that had been put to commerc ial use.
. . . The c ase la w holding that-7- be fo re yo u c a n te rm inate a lon g- te rm le a se , y ou ’v e go t to no tif

y th e m. Yo u’ ve go t to no tif

y th e te na nt of

the c la im t o d e fa

ult a ndgiv e him or her an opportunity to cure it. . . . The letter of October 18 does not p u rp o r tt o g i v e a n y s u c h c u r e p e r i o d

. I tj u s ts a y s t h e l e a s e is te rm inated. Be yo ndthat, the Cou rt no te s th a t in e ff

e c t th e pr op e rty was sold or at the very le ast contra cted f or . . . bef ore the letter we nt ou t te r mi n a ti n g th e le a s e
. . . . T h e d e e d it s e lf [ to ] T e d d y J o nes wa s signed by the Fenns, the sellers, October 14, four days befo re t he lease was purported to be terminated. Lastly, the trial court found that Mr. Jones wa s not a bona fide purcha ser without notice

. In re aching this conclusion, the court pointed out that the Darnells had rec orded their lease nine days before the deed to Jone s was re corde d. The trial c ourt also pointed out that Mr. Jones testified that he had be en told that th is p r o p e r ty w a s inf o r e c lo s u r e a n d th a t att o r n e y G a ly o n ’ s o f f ic e w a s h a n d li n g the fore closure. T here fore , he knew that someone wa s claiming an intere st in the property.
Th e tr ia l c ou rt

c on c lud e d b y o rd e ri ng that Ms . D arn e ll w a s ent itl e d to pu rc ha se the pr op e rty and a decr ee of specific perf ormanc e would be ente red. The trial court ga ve Ms. Darnell thirty days to close on the re maining balance owed unde r the Contrac t.
II.
The Fenns and Mr . Jones appe al the trial co u rt’s final judgment, raising a combined four iss ue s. Fir st, the F enn s c la im that th e Con tr a c t w a s n ot e nf or c e able be c aus e it w a s u nc le ar a s to whether it was a contra ct for sale or a lease . Second, the Fenns c laim the trial court’ s judgment was in error beca use they had a right to terminate the lease beca use it was materially brea ched. T hird, the Fenns argue that they gave adequate notice of terminatio n o f t h e l ea s e and the trial court’ s judgment in this respe ct was in err or. Finally, the Fenns and Jones c laim that Jones was a bona fide purcha ser f

or value and the tria l court’s judgment in this respec t must be rever sed.
III

. A r e view of fi nd ing s o f f a c t by a tr ia l c ou rt

is de novo up on the re c or d o f the tr ia l c ou rt , acc ompanied by a pr esumption of corr ectn e s s , u n le s s th ep r e p onderance of the evidenc e is otherwise

. Te nn . R. A pp . P. 13 (d ); Brooks v. Brooks , 992 S.W.2d 403, 404 (Tenn. 1999). Review of que stions of la w i s de novo , without a presumption of cor rec tness. See Nelson v. Wal-Mart Stores, In c. , 8 S.W.3d 625, 628 (Tenn. 1999)

. Tria l c ou rt s, un lik e app e llate c ou rt s, are able to obs e rv e wi tne sse s a s th e y te sti fy a ndto a sse ss t h e i r d e m e a n o r

a n d o t h e r

i n d i c i a o f c r e d i b i l i t y ; tr i a l c o u r t s ar e i n a u n i q u e p o s i t i o n t o e v a l ua te witness cre dibilit y. See Sta te v . P rue tt , 7 88 S.W .2 d 559 , 561 (T e nn . 199 0) . Ac c or din gly , a pp e llate c o u r ts w il l n o t r e
- e v a lu a te a tria l c o u r t’ s a s s e s s me n t o f w it n e s s c r e d ib il ity ab s e n t c lear and convincing evid en ce t o t h e contra ry. See We lls v . T

e nne sse e Bd. of

Re ge nts , 9 S.W.3d 779, 783 (Tenn. 1999) , Humph rey v . David Witherspoon, In c. , 734 S.W.2d 315, 315-16 (Te nn. 1987).-8- IV.
In Marshall v. Jackson & Jones Oils, In c. , 20 S.W.3d 678 (Tenn. Ct. App. 1999), this Court ob se rv e d th a t:
Th e purpose of int e rp re tin g a

writt e n c on tr a c t is to a sc e rt a in andto give ef fec t to the contrac ting p ar t i es’ intentions. Se e Bo b P e ar sa ll Motors, Inc. v . Regal Chrysler-Ply mouth, Inc. , 521 S.W.2d 578, 580 (T e nn . 1 97 5) ; G re d ig v
. Te n n e s s e e F a r m e r s M u t. I n s
. Co. , 891 S.W.2d 909, 912 (Tenn. Ct. App. 1994). In the ca se of written c on tr a c ts, the se intent ions a re re fl e c te d inthe c on tr a c t it se lf . T hu s, the sea rch for the c ontrac ting parties’ intent should focus on ( 1) the four c orner s of the contr act, se e Wh ite ha v e n Co mm un ity B ap tis t Church v. Holloway , 9 73 S.W .2 d 5 92, 5 96 (T e nn . 1 99 8) ; Hall v. J e ffe rs , 767 S.W.2d 654, 657-58 ( T en n. Ct. App. 1988), (2) the circ umstances in which t h e co n trac t was made , see Pe nske Truck Leasing Co. v. Huddleston , 795 S.W.2d 669, 671 (Tenn. 1990) ; Pinson & A s socs. Ins. Age ncy, I nc. v. Kreal , 800 S.W.2d 486, 487 (Tenn. Ct. App. 1990), and (3) the pa rties’ a ctions in carrying out the contra ct. S e e H

a m b l e n C o u n t

y v
. C i t y o f M o r r i sto wn , 6 5 6 S.W.2d 33 1, 33 5 ( Te nn . 1 98 3) ; Ballard v. N o r th Am. Life & Cas . Co. , 667 S.W.2d 79, 84 (Tenn. Ct. App. 1983).
Inthe abs e nc e of

fr audor mis take , c ou rt s sh ou ld c on str ue c on tr a c ts as written. See F

rank Rudy H

eirs Assocs. v. Sh o lodge, Inc

. , 967 S.W .2 d 8 10 , 8 14 (T e nn . Ct . A pp . 1 99 7) ; Whaley v. Unde rwood , 922 S.W.2d 110, 112 (Tenn

. C t

. App. 1995). The courts should ac cord contra ctual terms their natural and ordina ry mea ning, see Ev co Corp.
v . R os s , 528 S.W.2d 20, 23 (Tenn. 1975), and shoul d construe the m in the context of the entire c ontrac t. Se e Wi ls on v. Moo re , 929 S.W .2 d 3 67 , 3 73 (Te nn . Ct . A pp . 1 99 6) ; Ra ine y v . S tan se ll , 836 S.W.2d 11 7, 11 9 ( Te nn . Ct . A pp . 1 99 2) . T he c ou rt s sh ou ld a lso a vo id s tr a ine d co ns truc tio ns that cr e a te a mbi gu iti e s w he re no ne e xis t. See H illsboro Pl aza Enters. v. Moon , 860 S.W.2d 45, 47 48 (Tenn. Ct. App. 1993).
The c ourts may not make a new c ontrac t for parties who have spoken for themse lves, see Pe tty v. Sloan , 197 Tenn. 630, 640, 277 S.W.2d 355, 359 (1955), a nd may not re lieve parties of the contr actua l obligations sim ply because these obligations later prove to be burdensome or

unwise. See Atkins v. Kirkpatrick , 823 S.W.2d 547, 55 3 ( Te nn . Ct . A pp . 1 99 1) . T hu s, wh e n c a lledup on to i nte rp re t a contra ct, t he courts may not favor e ither party. See H eye r-Jordan & Assocs., Inc. v. Jordan , 801 S.W.2d 814, 821 (Tenn. Ct. App. 1990). Howev e r, wh e n a

c on tr a c t c on ta ins a mbi gu ou s p ro vis ion s, tho se-9- provisions will be construed against the party responsible for dr afting them. See Hanove r Ins. C o
. v. Haney , 221 Tenn. 148, 153-54, 425 S.W .2 d 5 90 , 5 92 -9 3 ( 19 68 ); Burks v. Be lz-Wils o n Properties , 958 S.W.2d 773, 777 (Tenn. Ct. App. 1997).
Ma rsh all , 20 S.W.3d at 681-82.
The Fenns’ f

irst argument is that the C ontrac t is unenfor cea ble because it is ambiguous and impossibl e to determine if it is a contrac t for sale or a le ase. The Fenns claim that other portions of the Contract a

re ambiguous as well, such as its failure “to s pecif y the amount of i nsuranc e that the te na nt mus t c arry. ” Th e tr ia l c ou rt fo un d th a t th e Con tr a c t w a s an en fo rc e able te n- ye ar l e a se wi th purcha se at the end of t he ten year s. As discussed previously, the C ontrac t contained an amortization schedule showing the amount of principal and interest in e ach monthly payme nt. The Contrac t states that “ thi s c on tr a c t sh a ll b e c los e d a ndthe de e d d e liv e re d o n or befo re Au gu st 1 , 2 00 6, un le ss extende d by other provisions of this contra ct.” The original sale price wa s $132,00 0

. A down payment of $5,000 w as made , bringing the amount owing to $127,000. At the end of ten yea rs, the amount still owing afte r cr edit for 10 ye ars of monthly payments was $113,058.43, which wa s the amount of the ba lloon payment.
As the trial court corr ectly noted, if the C ontrac t wer e only a lease, ther e would be no r eason for a balloon payment. Ms. Fenn ce rtainly believe d and ac ted like the Contrac t was a c ontrac t for sale, a s evidenc ed by her reque st to Ms. D arne ll in the spring of 2005 that the sale be completed a nd the ba llo on payme nt be pa id ea rl y. W hil e the Con tr a c t is no t a n e xa mpl e of pe rf e c t c lari ty, the re is no d o u b t that all of the parties to the Contract under stood that Mr. Darne ll ulti mately would be pu rc ha sin g th e pr op e rty. Th e te rm s o f the Con tr a c t w e re c le ar e no ug h f or the pa rt ie s to op e rate under it for almost a decade

. Furthermore , the t erms of the Contract we re c lear enough for

the Fenns to s uc c e ssf

ull y ta ke Mr . D arn e ll t o c ou rt

to e nf or c e tho se te rm s. Th e Fe nn s c a nn ot n ow be he ardto complain about whe ther the Contra ct is sufficiently def inite in an attempt to avoid their contra ctual ob lig a tio ns . W he n lo ok ing a t “ (1 ) the fo ur c orne rs of

the c on tr a c t[ ;]

. . . (2) the c ir c ums ta nc e s in which the c ontrac t was made [; ]

. . . and (3) the parties’ ac tions in carrying out the c ontrac t”, see Ma rsh all , 20 S.W .3 d a t 68 1- 82 , w e c on c lud e that th e Da rn e lls ha d th e ri gh t to pu rc ha se the la ndin question at the end of

ten yea rs and that the Contra ct was not merely a lea se. Ther efor e, we aff irm the judgment of the trial c ourt on this issue.
The ne xt two issues are whether the Fenns had the right to te rminate the Contract due to the Darnells’ allege d brea ches, and whether the Contract wa s proper ly terminated. On a ppeal, the Fenns argue that there wer e two bre ache s: the failure to timely pay the 2004 property taxes and the failure to ma i n t ain t he prope rty in the same c ondition it was in at the time the Contra ct was e ntere d into. The trial c ourt corr ectly dete rmined that any a lleged def aul t s t h at o ccur

red prior to 2002 were re so lve d w he n th e la ws uit br ou gh t by the Fe nn s a ga ins t Mr . D arn e ll w a s settle d. As to the pr op e rty taxe s , th e Co n tr a c t r e q u ir e d th e Fe n n s to s e n d th e D ar n e ll s th e tax s tate me n t. M s
. Fe nn acknow ledged that she failed to do so and that whe n her attorney notified Ms. Darnell that the taxes wer e past due , the taxes wer e paid. Since Ms. Fenn did not comply with her contra ctual obligation, the failu re of Mr . Darn e ll to time ly pa y the ta xe s ca nn ot be c on sid e re d a mat e ri a l br e a c h, e sp e c ia lly since they w ere eventua lly paid and the taxe s brought curr ent.Pl ai nt i f f s al s o anal og i ze t o T

. C

. A

. § 66

- 28

- 50 8 ( 20 04 ) of t he U ni f orm R es i dent i al L andl ord and T enant A ct 3

w h i ch p ro v i d es:
If

t he l and l o rd acc ep t s rent wi t ho ut res ervat i o n an d wi t h know l ed ge o f a t enant def aul t , t he l andl ord by s uch ac cept anc e c ondo nes t he def aul t an d t her eby wai ves su c h lan d lo rd ’s righ t an d is es to p p e d fro m ter m ina ting the re n ta l ag re e m e n t as to t hat breac h.

-10- The Fenns ar gue that the condition of the property w as not ma intained and this matter wa s discussed with Ms. Darne ll in the spring of 2005. They claim this was sufficient notice. How ever , no further mention of a c laimed bre ach was m ade to Ms. Darne ll and the Fenns continued to ac cept re nt/mor tga ge payme nts fo r m a ny mor e mon ths , u p u nti l N ov e mbe r 2 00 5 w he n th e y a br up tly notified Ms. Darne ll that the Contract was te rminated. W hen the Contrac t was terminated, the Fenns had alr eady f

ound a new buyer and deede d the prope rty to Mr. Jones four days bef ore the y notified Ms. Darne ll that the Contract was te rminated. Plaintiffs argue that the Fenns are estopped to deny a materia l brea ch and r ely on Ma y or and Ald e rma n of To wn of Mo rri sto wn v . D av is , 1 10 S.W .2 d 3 37 (T e nn . 1 93 7), w he re the Sup re me Court said: We pe rce ive no differ ence whateve r betwe en the principle involved

in this case and thos e grow ing out of leases, c ontaining a clause that the term shall ce ase, and be absolutely determined, by a default in the payment of r ent. In such c ases, it is well settled that if the landlord, afte r the de fault, ac cept s t h e re nt, he there by waives the forf eiture, and cannot after war ds insist upon it; and much l ess will the tenant be allo we d t o say that he is discha rged f rom his covena nts by his own de fa ult in the payme nt o f r e nt.
Id . at 341. 3
The c ourse of

dealing between the parties her ein is also rele vant. In Lively v. Drake , 629 S.W.2d 900 (Tenn. 1982) the Supreme Court discussed an ac ce l eration clause in a c ontrac t as fo llo ws :
We a

re of the opinion that the course of dea ling between the parties over a period of

almost two years w as such that a ppellants had be en led to believe that irregular payments would b e accepted w ithout acc eler ation. Under

those circ umstances a

ppellee sho u l d not be permitted t o fo rec lose on the note without first ca lling attention of app e lla nts to the fa c t th a t he wa s in sis tin g u po n th e ori gi nal te rm s, a ndthat no fu rthe r i rr e gu lar p a yme nts wo uldbe a c c e pte d. He sh ou ld ha ve a ff or de d th e m an op po rtun ity to m ake c ur re nt any arr e ars , if such existed.-11- * * * As stated, under

controlling Tennesse e ca ses the ac cepta nce of partial payment by the c reditor a fter de clar ation of def ault did not, in and of itself, prec lude fore closure. N evertheless the prior c ourse of dealings be tw e e n th e se pa

rt ie s w a s su c h th a t appe ll e e wa s n ot e nti tle d to exer cise his option to a cce lerate without f irst advising appellants that late payme nts would no longer be a cce pted and without giving them an o pportunity to cure a ny default that then existed. See B rown v. He witt , 143 S.W.2d 223 (Tex. Civ. App. 1 9 4 0 ); 55 Am.Jur.2d, Mortgages § 391 (1971); Annot., 97 A.L.R.2d 997, 1006 etseq
. (1 96 4) ; Cf. Ame rican National Insurance Co. v. Davidson , 166 Tenn. 13, 57 S.W.2d 788 (1933) ( irregula r paymen t an d acc eptanc e of ins ur a nc e pr e miu ms) ; Ma y or an d A lde rm e n of M

or ris tow n v . D av is , 172 Tenn. 159, 110 S.W.2d 337 (1937)

. Un de r a ll o f the c ir c ums ta nc es, we are of the op ini on that th e re su lt rea ched by the Chance llor was equitable and appr opriate.
Li v e ly , 629 S.W.2d at 904.
The Contrac t at issue in this case, like eve ry other c ontact ente red into in this state, conta ins an implied duty of good faith and f air de aling. In Brooks v

. Networks of Chat tanooga, In c. , 946 S.W.2d 321, 326 (Tenn. Ct. App. 1996) we noted that “[ i]t is well-settled that eve ry contra ct contains an implied duty of good faith and f air de aling in its performance an d en fo rc ement.” ( citing TSC Ind ustr ie s, Inc . v . T

oml in , 7 43 S.W .2 d 1 69 , 1 73 (T e nn . Ct . A pp .1 98 7) ; Hurl ey v. Te nnessee Farmers Mu tual I

ns. Co. , 922 S.W.2d 887 (Tenn. Ct. App. 1995))

. The fa cts establish that in the spring of 2005, Ms. Fenn told Ms . Darnell to clean up the property and then reque sted that Ms. Darne ll make the balloon payme nt ear ly, thereby c ompleting the contra ct of sale . This would certainly lead Ms. Darnell to conclude that Ms. Fenn had every intention of completing the sale notwithstanding any proble ms with the condition of the prope rty. There afte r, Ms. Darnell continued to ma ke the monthly payme nts on time and Ms. Fenn continued to deposit the chec ks for seve ral months. After the Darnells had complete d over 9 of the 10 yea

rs on the Contract, a nd even though se vera l months earlier Ms. Fenn had indicate d that she wa nted the sa le c omp le te d, the Fe nn s abr up tly te rm inate d the Con tr a c t wi tho ut a ny fo re wa rn ing to M s. Da

rn e ll a nd de e de d the pr op e rty to Jo ne s se ve ra l days be for e even notifying Ms. Darnell that they c onsidered the Con tr a c t te rm inate d. Ba se d on the se fa c ts, we c on c lud e that Ms. Fen n unq ue sti on ably le d M s. Darnell to believe that she fully intended to proce ed with the sale , notwithstanding the condition of the prope rty. Ms. Fenn therea fter c ontinued to acc ept monthly payments without pr otest for months a ndthe n, fo ur

days be fo re pu lli ng the ru g out fr om und e r Ms. Da rn e ll, Ms. Fe nn de e de d th e pr op e rty to M r. Jo ne s. W e do no t be lie ve te lli ng Ms. Da rn e ll to c le a n up the pr op e rty is su ff ic ie nt t o p ut M s. Darnell on notice that Ms. Fenn was claiming a brea ch whe n the complaint as to the c ondition of the property was couple d with a request t o complete the sale early. We also conclude that the ac tions of Ms. Fenn wer e a c lear

violation of her duty of good faith and fair dea ling. Theref ore, w e hold that-12-

Ms. Fenn is estopped from cla iming Ms. Darnell was in bre ach of the C ontrac t rega rdless of whe ther the re a c tua lly wa s a br e a c h pe rt a ini ng to the c on dit ion of the pr op e rty a nd re ga rd le ss of wh e the r M s. Fenn was re quired to give adequate notice of t he breac h. The re sult reac hed by the tria l court wa s manifestly “e quitable and a ppropriate .” See Li v e ly , 629 S.W.2d at 904.
The fina l issue is whether Mr. J ones was a bona fide purchase r wit hout notice. In Aslin ger v. Price , No. E2006-00029-C OA -R 3-CV, 2006 WL 2521566 ( Tenn. Ct. App. E.S., filed Sept. 1, 2006), perm. app. de nied Jan. 29, 2007 , this Court st ated:

This court has r ece ntly defined “ bona fide purcha ser” as “o n e who buys something for value w ithout noti ce of another ’s cl ai m to the ite m or of a ny de fe c ts i n th e se lle r’ s ti tle ; on e wh o h a s in go odfaith paid valuab l e conside ration for property without noti ce of prior adver se cla ims.” Rogers v. The First Nat'l Bank , C/A No. M20 04- 2414-COA-R3-CV, 2006 WL 344759 at *12 (Tenn. Ct. App. M.S., Fe b. 14 , 2 00 6) (e mph a sis a dd e d) ; accord H ende r s o n v
. La wre nce , 212 Tenn. 247, 369 S.W.2d 553, 556 (Tenn. 1963) (stating “A bona fide purcha s er is one w ho buys for a valuable c onsideration without knowledge or

notice of f

acts mate rial to the title”).
As alre ady stated, the trial court found that Mr. Price “wa s on inquiry notice of the existence of that [Asling e r-Gie semann] c ontrac t.” Ther e is abundant proof

in the rec ord supporting this conclusion, and the evidenc e does not preponde rate against it. . . . [A]s the pur chase r, Mr. Price wa s “(c )har geable with notic e, by implication, of every fac t aff ecting the title which would be discovere d by an examination . . . of eve ry fa ct as to which the purcha ser, with rea sonable prudence or diligence, ought to bec ome ac quainted.” Ha ll v . H all , 604 S .W.2d 851, 853 (Te n n
. 1980), quoting Teague v. Sowde r , 121 Tenn. 132, 114 S.W. 484, 489 (Tenn. 1908)

. Moreove r, this court has spe cifica lly held that “[a ] contra ct or agre ement to conve y is held to be such an inter est as will prevail as against a subse quent purchaser with notice.” Wi lli am s v . Ti tle Guaranty & Trust C o. , 31 Tenn. App. 128, 212 S

. W. 2 d 897, 901 (Tenn. Ct. App. 1948). Re garding the c oncept o f “inquiry notice,” the W ill ia ms c ou rt

state d a s f

oll ow s:
No tic e of a prior int e re st w hic h w ill be e ff e ctive to c ha rg e a su bs e qu e nt p ur c ha se r w ithkn ow le dg e of its existence may be either direc t inf ormation of the prior right, or m ay consist of information of f acts fr om which ac tual knowledge ma y be infe rre d; the notice need not b e ac tual, but may be construc tive or implied. It need not contain complete information ofT h is a m o u n t i s th e e x a c t sa m e a m o u n t as M s. D a rn e ll’s fin a l b a llo o n p a y m e n t. 4
-13-

every fac t material for

the purc haser

to know . Wher e actua l notice of an outs tanding interest is duly given, the purc haser

is charge able with notice of all t hat an inquiry o f the pe rson giving the notice of the outstanding interest would have disclosed.

* * *
Notice is ei t h er a ctual or implied. Whe n anything appea rs which would put a man of ordinary pr

udence upon inquiry, the l aw presumes t hat s uch inqui ry wa s a c tua lly ma de , a nd the re fo re fi xe s the no tic e up on him as to all legal c onsequenc es. Williams , 2 12 S.W .2 d at 90 1; see also Texas Co. v. Aycoc k , 190 Te nn . 1 6, 22 7 S. W .2 d 41 , 4 6 ( Te nn . 1 95 0) (s ta tin g “ wh a te ve r i s sufficie nt to put a perso n u p on inquiry, is n oti c e of a ll the fac ts t o which that inqui ry will lead , w he n p ro se c ute d w ithre a so na ble dil ige nc e a ndgo odfaith .” [e mph a sis in o ri gin a l] ); City Finance Co.
v . P e rry , 19 5 Te nn
. 81 , 25 7 S.W .2 d 1, 2 (T e nn . 195 3) ; Blevins v. J oh ns on Cou nty , 746 S.W.2d 678, 682-83 (Te nn. 1988).
Aslin ger , No. E2006-00029- COA-R3-CV, 2006 WL 2521566, at *4-5 (empha sis in original). At trial, Mr. Jones testified that he hear d the subject prope rty was in for eclosure and that the Fenns’ attorne y, Jerry Galyon, wa s handli n g t h e foreclosure . Mr. Jones ca lled attorney G alyon’s office and spoke w ith Mr. Galyon’s sec reta ry, at whic h time he learned that the pr operty wa s available for sa le and the price wa s $113,0 5 8.43. Mr. Jones ac knowledged that attorney Ga lyon was 4 also his attor n ey fo r civil litigation m atters. I n fac t, Mr. Jones testified that he and Galyon ar e frie nd s a ndri de mot or c yc le s tog e the r. Othe r tha n a tit le se arc h, Ga lyo n w a s th e a tto rn e y f or bo th the Fe nn s a nd Mr

. Jo ne s fo r the tr a ns a c tio n wh e re the la tte r pu rc ha se d the pr op e rty. Mr . J on e s a lso testified that he kne w Mr. Da rnell, that Mr. Da

rnell had pa ssed away, and that Mr. Da rnell owne d the Wa lden Cree k Riding S tables located on the prope rty.
As quoted by this Court in Aslinger , the Supreme Court in Texas Co. v. Ay cock , 190 Tenn. 16, 227 S.W.2d 41, 46 (Tenn. 1950) stated t hat “whatever is sufficie nt to put a person upon inquiry, is notice of all the f

acts to which that inquiry will lead , when pr osecute d with rea sonable diligence and good faith.” (empha sis in original). Aslin ger , 2006 WL 2521566, at *5. We believe Mr . Jones ha d suf fi c ie nt inq uiry noti c e that Ms. Darn e ll an d he r h us ba nd ’s e state we re c la imi ng a n o wn e rs hip interest in the prope rty. Ther e is absolutely no doubt that they wer e cla iming such an interest a nd that attorney Galyon knew of that interest, as a bundantly evidenc ed by Ga lyon’s letter of O ctober 18, 2005, terminating the Contrac t. Given that Mr. Jones and the Fenns had the sa me attorne y and-14-

Jones knew this, if Mr. Jone s had ac ted re asonably he would have spoke n to Galyon him self, as opposed to G a ly o n ’ s s e c r e ta r y , a n d ma d e f

u r th e r in q u iry ab o u t th e p r o p e r ty

. T h is is e v e n mo re app are nt w he n c on sid e ri ng that Mr . J on e s a ndGa lyo n a re frie nd s. Insh ort, a

simple ph on e c a ll t o the righ t person would have preve nted this lit igation. A rea sonable inquiry would have lead Mr. Jones t o the fact that there was a contra ct for sale on the property, even if the validity of that contra ct wa s b e ing qu e sti on e d b y th e Fe nn s. Ac c or din gly , w e c on c lud e that th e fa c ts d o n ot p re po nd e rate against the trial c ourt’s conc lusion that Mr. Jones was not a bona fide purc hased w ithout noti ce. In summary, we conclude that the fa cts do not preponde rate against the trial c ourt’s finding that pursuant to the C ontrac t, Ms. Darnell is entitled to purcha se t he property. We further aff irm the trial court’ s finding that Jones was not a bona fide purc haser

without notice.-15- V

. The judgment of the trial court is af firmed. This ca se is rema nded for enfor ceme nt of the trial court’ s judgment and for c ollection of costs asse ssed below, a ll p u rs uant to applicable law. Costs on appea l are taxed to the a ppellants, Charles Fenn a nd Dott Fenn, and their sure ty, for which exec ution may issue, if nece ssary.

_______________________________ CHARLES D. SUSANO, JR., JUDGE