IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

August 27, 2014 Session

SANDRA LYNN HOBBS v. LISA HOBBS NOTTINGHAM, ET AL.

Appeal from the Chancery Court for Sullivan County (Kingsport)

No. K0034810(M) John S. McLellan, III, Chancellor

No. E2013-002602-COA-R3-CV-FILED-JANUARY 30, 2015

The quasi-parties in this matter had their bids accepted at a judicial sale, but they failed to

carry out their purchases and close on the properties. After a re-sale was conducted, the trial

court charged the quasi-parties with the difference between the amount of the original bids

and the amount received for the properties at the re-sale. They were also assessed the

expenses resulting from the re-sale. The quasi-parties appeal. We affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court

Affirmed; Case Remanded

JOHN W. MCCLARTY, J., delivered the opinion of the Court, in which CHARLES D. SUSANO,

JR., C.J., and D. MICHAEL SWINEY, J., joined.

Christopher D. Owens, Johnson City, Tennessee, for the quasi-parties/appellants, David L.

Rose and J. Rickey Davis.

Thomas H. Torbett and Thomas A. Peters, Kingsport, Tennessee, and Ronald W. Woods and

Brandy M. Burnette, Greeneville, Tennessee, for the appellees, Sandra Lynn Hobbs and Lisa

Hobbs Nottingham.

OPINION

I. BACKGROUND

The appellants in this action, David L. Rose and J. Rickey Davis, are quasi-parties in

a partition action among the heirs of Herbert Hoover Hobbs, who died intestate in 1998. In

filing the partition action in 2006, Sandra Hobbs, Mr. Hobbs’s daughter, asked the trial court

to sell the properties held by her father at his death. The defendants were the other heirs of
Mr. Hobbs: Lisa Hobbs Nottingham (another daughter), and Gwendolyn B. Hobbs (widow)

(along with Sandra Hobbs, collectively “the Hobbses”). When the Hobbses were unable to

agree on how to divide the estate, the trial court ordered the sale of the real property and

appointed Sara Housewright (the Clerk and Master at that time) to serve as “Special

Commissioner” to conduct the sale with the assistance of auctioneers.

1

Several auctions of the estate property eventually were conducted in September 2009,

including the Country Joy Apartments(“the Apartments”) and the Country Joy Mobile Home

Park (“the Park”). On September 18, 2009, Rose and Davis were the high bidders for the

Apartments, “493 Barnett Dr., Kingsport, TN.” The auction announcement released by Ron

Ramsey & Associates, inter alia, provided that “[t]he seller will furnish a warranty deed to

the property, free and clear of any liens. . . .” The “terms” set out in the sales contract called

for cash payment, with a 10 percent deposit, the balance due “at closing in approx. 30 days”

with the sale “subject to terms in announcement and court approval.” The contract further

provided that if “purchasers fail to carry out and perform the terms of this agreement after

deed is presented, then the above deposit money shall be forfeited as a damage to this sale

. . . .”

The Park, located at “483 Barnett Dr., Kingsport,” was also auctioned on September

18, 2009. Initially, Kimberly Mason (through Kimberly Cantrell Investments, Inc.) was the

high bidder on that parcel. On the day of the auction, she signed an identically worded

contract to the one signed by Rose and Davis.

According to Rose and Davis, it had been represented to them at the auction that the

Apartments and the Park were each separate parcels of land. They contacted Tom Peters, cocounsel for one of the Hobbses, to ask further questions. It appears that because the

Apartments and the Park were on a single, undivided, unpartitioned parcel, Mr. Peters

purportedly advised them that it would be easier if they upped their bid on the Park and

purchased it as well. Rose understood that purchasing the Park “may eliminate a lot of

2

issues.” The bid on the Park was raised by Rose and Davis on September 28, 2009, and

ultimately they became the high bidder for it. They signed a sales contract for the Park on

October 23, 2009. Earnest money in the amount of $12,375 was paid for the Park and

$31,500 was paid for the Apartments.

In October 2009, Rose and Davis initiated efforts to obtain financing from BB&T.

The Special Commissioner signed the contract as the seller and as the individual approving the 1

contracts. The Hobbses were neither signatories nor parties to the contracts. 

The access to the Apartments from Barnett Drive is through the Park. 2

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Rose’s deposition testimony, used at trial for impeachment purposes, was that his lender

wanted a survey completed and that he spoke with surveyor John Mize before he signed the

contract for the Park on October 23, 2009. During the following week, he took Mr. Mize to

see the property. Around this time, the Special Commissioner filed her report detailing the

sales from the September auctions. The trial court confirmed the sales through an order

effective December 16, 2009 (entered nunc pro tunc on January 4, 2010). According to

Rose and Davis, they were not given notice of the confirmation hearing.

According to Rose and Davis, it was not until around March or April 2010, when they

received the survey from Mr. Mize, that they finally understood the Park and the Apartments

were not two separate parcels but rather the single, undivided parcel. Furthermore, the initial

survey revealed that the driveway leading across the Park to the Apartments apparently

encroached on other property retained by the Hobbs estate. According to Rose, he advised

3

the Special Commissioner, while Davis advised Mr. Peters regarding these issues.

Thereafter, a revised survey was prepared that showed the property just purchased included

the 14-foot parcel on which the driveway purportedly encroached. The survey and the legal

description of the Apartments and the Park was in essence the same survey and legal

description found in Tax Map 091, Parcel 103.00.

Tentative closing dates of April 22, 2010, and June 22, 2010, were set, but Rose and

Davis never closed on their purchases. Motions for issuance of show cause orders were filed

in August 2010. By the time the motions were heard the following month, nearly one year

had transpired since the auctions. At the September 2010 hearing, Davis appeared with

counsel and indicated he could close on the purchases in two weeks. He notified the court

that he had “bought out” the interests of Rose. However, during the hearing, Davis did not

inform the court regarding the issues he purportedly raised with Mr. Peters before signing

the sales contract for the Park. Nor did he apprise the court of any concerns and/or ask the

court for relief. Instead, he signed amended sales contracts – identical to the previous

contracts except Rose was not a signatory – on September 20, 2010, for both the Apartments

and the Park. Shortly thereafter, Davis initiated efforts with Tri-Summit Bank to obtain

financing as the sole purchaser for the properties.

According to Davis, shortly after signing the amended contracts, he learned the

underwriting guidelines had changed and that a ten percent deposit was no longer sufficient;

rather, lenders were requiring a twenty percent deposit. Moreover, Davis was displeased

with the fact that one lender would have required him to provide collateral in the form of

other real property, in addition to the Apartments and the Park themselves, in order to secure

At the May 2012 hearing, the trial court found that the surveyor informed Rose about a possible 3

encroachment of the driveway on an adjacent 14-feet parcel between October 6 and 23, 2009. 

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the loan. Davis admits he lost interest in purchasing the properties at this point.

In January 2011, another motion for issuance of a show cause order was filed by the

Hobbses. The motion was heard on February 18, 2011, but neither Rose nor Davis appeared.

The court thereafter issued show cause orders requiring the pair to appear on February 28,

2011. Rose and Davis further were directed to advise the court by March 18, 2011, whether

they were willing to close on the properties.

On April 7, 2011, over 18 months after the date Rose and Davis executed the first

sales contract, they moved to set aside the contracts on the Apartments and the Park. In the

motion, they noted inter alia:

Rose and Davis later learned that the property was a single tract

and that they would have to acquire a right-of-way across 483

Barnett Drive to access 493 Barnett Drive;

To avoid potential litigation and/or planning commission

problems in that regard, Rose and Davis signed a contract on

483 Barnett Drive . . . ;

* * *

At the time the contracts were signed the property was the

subject of a large federal tax lien;

The tax lien was not paid until February 18, 2010 . . . ;

Upon information and belief, the tax lien was not released until

the spring of 2011;

Thus, the property was not free and clear of liens for nearly 18

months after the contracts were signed, a material breach of the

express terms of the contracts;

On December 31, 2009, an Order of Confirmation of sales went

into effect:

Upon information and belief, neither Rose nor Davis were given

notice of the hearing on the Order of Confirmation;

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* * *

On September 20, 2010, an Amended Sales Contract was signed

by Davis . . . and approved by the Clerk and Master . . . ;

This sale has not been approved by any subsequent Order of

Confirmation, which is, respectfully, required . . . and because

no notice of the hearing was provided [previously] calls into

question whether any of the contracts are subject to the Order of

Confirmation;

In addition, Davis’[s] inquiries as to financing have met

resistance due to no fault of his own . . . ;

In any event, a closing on the property at issue was impossible

prior to the removal of the tax lien, which was no fault of either

Rose or Davis, and the passage of time since the contracts were

signed is so significant that the circumstances regarding the

condition of the property and the conditions of financing are

such that Rose and Davis should be relieved of any obligation

to purchase the property and their earnest money returned;

(Numbering in original omitted.). The pair later supplemented their motion to set aside the

sales contract inter alia as follows:

The “contract[s]” for the sales of “483” and “493 Barnett Drive”

are unenforceable, void and/or voidable pursuant to T.C.A. 29-

2-101;

4

The “contract[s]” for the sales of “483” and 493 Barnett Drive”

are unenforceable and void due to the insufficiency of a

description of what was “sold,” Baliles v. Cities Serv. Co., 578

S.W.2d 621 (Tenn. 1979); Pipkin v. James, 20 Tenn. 325

(1839);

It is undisputed that there are two “contracts” of sale to two

“parcels” of property to two different parties that is in fact a

single undivided tract of property;

Statute of Frauds.

4

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It was at the time of “sale” and, upon information and belief, is

currently impossible for anyone,surveyor or otherwise, to create

a property description of the “parcels” “sold” on September 18,

2009, October 23, 2009 or September 20, 2010[] . . . ;

There is no partition line between the “parcels” thus there could

not have been a meeting of the minds as to what was “bought”

or “sold” as no one to this day has any idea what the boundaries

of the “parcels” are;

The parties to the “contracts” . . . cannot have a partition line

imposed upon them “post-contracting” as such a partition would

create an “estate of property” that was not bargained for;

At the current time a deed comporting with T.C.A. 66-5-103

cannot be created as to the contract . . . because under Tennessee

law, [an] instrument conveying [an] interest in real property

must designate land involved with reasonable certainty; [the]

test is whether a surveyor with [the] instrument before him can

locate the land and establish its boundaries, In re Tennessee Gas

Transp., Inc., 169 B.R. 643 (1994);

The “driveway” that ostensibly leads to the “Country Joy

Apartments” is not contained with the source deed to the single

tract and encroaches on an adjoining tract creating a cloud on

title under threat of probably litigation.

(Numbering in original omitted.).

The hearing on the motion to set aside the sales contracts was held on May 24, 2012.

On July 17, 2012, the trial court entered an order denying the motion, providing as follows:

That after the September 18, 2009 auction where Davis and Rose executed the

Sales Contract for Country Joy Apartments, they subsequently agreed to also

purchase the Country Joy Mobile Home Park for $120,000.00 from a previous

auction purchaser and voluntarily entered into that contract of purchase on

October 23, 2009 (Exhibit 20).

That Rose, incident to a request of BB&T Bank, had a March 2, 2010 survey

of the approximate four acre parcel done which was revised April 8, 2010 for

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the “inclusion of a 14’ strip” (Exhibit 5).

That during the course of the September 2010 hearings, Davis met with the

attorneys and advised he bought out Rose and would buy the Country Joy

Apartments and Country Joy Mobile Home Park individually and advised

Plaintiffs’ attorneys he could close in two weeks.

That by purchasing Country Joy Mobile Home Park, purchase concerns about

lack of a boundary line between the two parcels and right-of-way issues w[ere]

eliminated.

That between September 18, 2009 and February 28, 2011, Davis, as the sole

purchaser, for approximately eighteen months, filed no Motion nor request to

be relieved from his purchase contracts.

Davis’s concern of the I.R.S. lien was resolved when the Clerk and Master

satisfied that lien on February 8, 2010 by Court Order directing the Clerk and

Master to secure the release of any claim of the Internal Revenue Service with

regard to estate taxes due from the Herbert Hoover Hobbs estate and directing

Clerk and Master to deliver to purchasers a Deed conveying the tract of land

free of any claim or lien listed on Exhibit A from purchase monies. . . .

As previously noted, it is the custom of the Clerk and Master to satisfy any

liens and other deficiencies from the proceeds of sale so that as a matter of law

title need not be free of defects at the time the contract is made as long as title

is freed of defects at the time conveyance is due.

That incident to Davis and Rose’s efforts to obtain financing for the purchase

of Country Joy Apartments and Country Joy Mobile Home Park and

preparation of a survey by John R. Mize, at the bank’s request, a legal

description of the properties was prepared, title examination was conducted,

a title commitment was issued, and a closing date of June 22, 2010 was set.

That after Rose agreed that Davis would become the sole owner of the two

parcels, Davis secured a pre-qualification commitment from BB&T for

$500,000.00, however, after the September 20, 2010 hearing, Davis lost

interest when the bank requested a 20% down payment due to a change in

underwriting guidelines (instead of 10% down payment) and Davis did not

want to secure the loan by tending two of his other commercial properties.

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* * *

Both Rose and Davis understood that the Sales Contract which they entered

into would be subject to confirmation by the Court.

That Rose and Davis did not seek to be excused from their bid until April 7,

2011, approximately eighteen months after entering into their Sales

Contracts for the two parcels.

That by appearing in September 2010 and representing to the Court that he

purchased out the interest of Mr. Rose and would close in two weeks, Davis

has waived any arguments regarding any other alleged deficiencies to title

and procedure.

Davis’s issues concerning marketability of title or access are of no

consequence as he obtained a loan commitment from BB&T, Title

Insurance Binder from Tri-City Title Company, Inc. and a date for closing

the property in June, 2010.

A bidder who has offered a highest bid at a judicial sale and a property is

struck off to him and who refuses to comply with the terms of sale, is liable for

the deficit resulting from the second sale, without some legal excuse. If a

bidder has a reasonable and legal excuse for being relieved from compliance

with the terms of sale, it is his duty to immediately seek relief by properly

petitioning the Court thereof, Matthews v. Eslinger, 292 SW2d 543, 549

(Tenn. Ct. App. 1955).

(Numbering in original omitted. Emphasis added.). Rose and Davis were given 14 days to

decide whether to purchase the properties or to risk the imposition of damages upon re-sale.

The trial court directed the Special Commissioner to re-sell the Apartments and the Park if

Rose and Davis refused to close on their contracts. In the event of re-sale, the court observed

that a hearing would be held to consider whether Rose and Davis should be required to pay

the associated damages resulting from the re-sale.

On July 31, 2012, a response was filed that indicated Davis “agrees to honor strict

compliance with the terms and conditions of a certain Amended Sales Contract dated

September 20, 2010.” The pleading further provided “[t]his foregoing representation hereby

renders any issues relating to David L. Rose moot.” Davis thereafter filed motions to

produce separate deeds. On August 16, 2012, the Special Commissioner delivered two

proposed deedsthat established a dividing line between the properties to Davis’s counsel, but

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since that production, she was not asked to set a closing date.

On October 5, 2012, the Hobbses filed yet another motion for issuance of a show

cause order. At that time, Rose and Davis, through counsel, represented that Davis’s

financing efforts were ongoing and that the closing should take place in 45 days. Also at this

hearing, for the first time, the court was expressly informed that Davis requested the

property to be subdivided into two separate parcels. The court noted, in response to the

motions to produce deeds, that the Special Commissioner had furnished already two

proposed deeds so as to establish a dividing line between the Apartments tract and the Park

tract. The court directed Rose and Davis to advise the court by October 26, 2012 if they

refused to close on their purchases. Davis was informed that “the question of whether

underwriting can be successfully completed in order to close on the purchase . . . as two

separate parcels shall not serve as a basis to relieve Mr. Davis and Mr. Rose of their

contractual obligations.” The court thereafter received notice from Davis’s counsel

indicating as follows:

[D]ue to the uncertainties as to whether the properties auctioned as Country

Joy Mobile Home Park and Country Joy Apartments can receive underwriting

approval as separate parcels, and that Mr. Davis does not desire to purchase

the trailer park and apartments as a single tract due, in part, to Sullivan County

Road Frontage Access Subdivision Regulations, Mr. Davis has elected to

forego purchasing the auctioned properties.

5

After receiving the formal refusal, the trial court directed the Special Commissioner

to resell the properties. The court specifically declared that the re-sale was to be held at the

risk of Rose and Davis and that, after the re-sale, a hearing would be held to ascertain

whether they should be held responsible for damages. A court partition survey was then

prepared and filed with the court before the re-sale. The property was partitioned into two

parcels – Parcel Two, the Apartments and Parcel One, the Park. The re-sale was held on

April 6, 2013, and confirmed by the trial court. Although the properties had been subdivided

by the time of the re-sale and the deeds describe the Apartment tract separately from the Park

tract, the properties were collectively bid on and purchased as a whole.

Hearings were held on September 18 and October 17, 2013 on the issues of whether

Rose and Davis should be required to pay as damages the costs associated with the re-sale

Counsel observes in an exchange with the court that the reason Davis and Rose did not desire to

5

purchase the property as one parcel was because they would then have to appear before the zoning

commission and would be required to have 50-foot road frontages. Counsel remarked, “It changes the whole

complexion of this scenario. . . . [T]hey could have the Chancery Court Sale and avoid all that.”

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and the deficiency between their original bids and the high bid at the re-sale. Ultimately, the

court entered a judgment against Rose and Davis in the amount of $125,645. This amount

represents the difference between their 2009 bids and the 2013 bid at the re-sale ($114,250),

plus the costs incurred during the 2013 re-sale ($55,270), with a credit for the deposits

tendered by Rose and Davis in 2009. A timely notice of appeal was filed.

II. ISSUES

We restate the issues raised on appeal by Rose and Davis as follows:

1. Whether the trial court erred in failing to set aside the sales contracts dated

September 18 and October 23, 2009, and September 20, 2010.

2. Whether the trial court erred in imposing damages for the costs of the resale of the properties subject to the above dated sales contracts.

III. STANDARD OF REVIEW

Our review of the trial court’s conclusions of law is de novo with no presumption of

correctness. Taylor v. Fezell, 158 S.W.3d 352, 357 (Tenn. 2005). The same standard applies

to the trial court’s application of law to the facts. State v. Thacker, 164 S.W.3d 208, 248

(Tenn. 2005). With regard to the trial court’s factual findings, we presume they are correct

but will overturn them if we find that the evidence preponderates against them. Hass v.

Knighton, 676 S.W.2d 554, 555 (Tenn. 1984).

IV. DISCUSSION

Confirmation

Rose and Davis assert that the contracts on the properties were void due to a lack of

notice of the confirmation hearing as to the 2009 contracts, and because there was no

confirmation of the 2010 contracts. They rely on our opinion in Hollow v. Ingram, wherein

6

we noted inter alia:

Westlaw improperly spells “Ingram” as “Ingrim.” We use the proper spelling as indicated in the 6

court record.

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In Tennessee, a high bidder at a judicial sale is considered a quasi-party to the

proceedings and is subject to the jurisdiction and powers of the court, and is

entitled to notice of all proceedings thereafter which affect the purchase and

title, and is subject to all actions of the court subsequently taken in the cause.

Matthews v. Eslinger, 292 S.W.2d 543 (Tenn. Ct. App. 1955); Allen v. East,

63 Tenn. 308 (1874). The high bid may subsequently be rejected by the court

if the court refuses to confirm the sale, but if the court confirms the sale the

high bidder may be forced to go through with the sale at that point. Id. Thus,

the high bidder becomes a part of the subsequent proceedings which affect the

purchase, and, as the Trial Court herein found, he would have the right to seek

intervention and participate in the proceedings below.

. . . [O]nce the Special Master filed his report regarding this sale, the Court

was required to act upon the same, and should have held a hearing specifically

regarding whether the report should be confirmed and then made his

independent decision on that issue. In Tennessee, Tenn. R. Civ. P. 53.04(2)

discusses Special Master reports in non-jury actions, and states that “the court

shall act upon the report of the master. Within ten (10) days after being served

with notice of the filing of the report, any party may serve written objections

thereto upon the other parties. . . .”

Hollow v.Ingram, No. E2010-00683-COA-R3-CV, 2010 WL 4861430, at *5 (Tenn. Ct. App.

Nov. 29, 2010). Rose and Davis argue that the amended sales contracts dated September 20,

2010, superseded the previous contracts that were “confirmed,” and thus would not be

subject to the prior order of confirmation. Because the superseding contracts were never

confirmed, Davis contends that he could not be compelled to complete the purchase.

If Rose and Davis were truly concerned about being heard at the confirmation hearing,

they could have checked the court file or filed a motion with the court asking to be notified

of any further proceedings. Davis was asked at the May 2012 hearing whether he had asked

anyone when the trial court would confirm the sale and his response was, “No, I just went

through [Rose].” Rose acknowledged having conversations with the Special Commissioner

after the September 2009 auction, but admitted that he did not ask when the court sale would

be confirmed. There was sufficient time between the auction and the confirmation to learn

the hearing date and seek the aid of the court regarding the issues now described as “deal

breakers.” However, for over 18 months after the auction, the pair never came before the

court requesting relief. They only appeared in response to the motions filed by the Hobbses.

Under Tennessee law, a high bidder at a judicial sale of real property has the duty to act

promptly if he wishes to be excused from the obligation to purchase real estate. See

Matthews v. Eslinger, 292 S.W.2d 543, 549 (Tenn. Ct. App. 1955). Thus, Rose and Davis

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were required to immediately bring to the court’s attention any legal reason to excuse them

from complying with the sales contracts. Id. It has long been a maxim and principle of

equity that “equity aids the vigilant, not those who sleep upon their rights. . . . Equity

delights in diligence, and is slow to aid the slow. It not only requires clean hands and a pure

heart, but also swift feet.” Henry R. Gibson, et al., Gibson’s Suits in Chancery § 25 (6th

ed.1982). Accordingly, in our view, Rose and Davis waived their rights to complain of not

receiving notice of the confirmation hearing. We therefore find any reliance on Hollow

regarding notice unavailing.

Furthermore, the 2010 sales contracts, executed by Davis merely because Rose desired

to assign his interests in the properties, contained the same terms as did the 2009 contracts

executed by both Rose and Davis. The decision in Spicer v. Kimes, 156 S.W.2d 334, 337

(Tenn. Ct. App. 1941) (recognizing the validity of an assignment of property interests after

a court sale) reveals that there was no need for the 2010 contracts executed by Davis to be

re-confirmed by the trial court in order for them to constitute enforceable agreements.

Incapable of Legal Description

Rose and Davis argue that the land being sold as two separate parcels, when in fact

there was only one parcel to sell, makes the property as sold incapable of legal description.

Because there was no partition line between the properties, they assert there could not have

been a meeting of the minds as to what was “bought” or “sold.” Tenn. Code Ann. § 66-5-

103; In re Tennessee Gas Transport, Inc., 169 B.R. 643 (1994). They argue that the sales

contracts they signed were void under the Statute of Frauds and that a material breach of

contract occurred relieving them of any obligation to close on the parcels.

7

The Statute ofFrauds, codified as Tennessee Code Annotated section 29-2-101, provides as follows:

7

(a) No action shall be brought:

(4) Upon any contract for the sale of lands, tenements, or hereditaments, or the

making of any lease thereof for a longer term than one (1) year;

unless the promise or agreement, upon which such action shall be brought, or some

memorandum or note thereof, shall be in writing, and signed by the party to be

charged therewith, or some other person lawfully authorized by such party. In a

contract for the sale of lands, tenements, or hereditaments, the party to be charged

is the party against whom enforcement of the contract is sought.

Tenn. Code Ann. § 29-2-101(a). 

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To be valid, a deed “must designate the land intended to be conveyed with reasonable

certainty.” Phoenix Mut. Life Ins. Co. v. Kingston Bank & Trust Co., 112 S.W.2d 381, 382

(Tenn. 1938). “A description of the property by street and number is sufficient where the city

in which it is located is stated, either in the caption or body of the instrument.” Rogers v.

Roop, 92 S.W.2d 423, 427 (Tenn. Ct. App. 1935). “The number of a city lot is usually a

sufficient description without specifying the boundary of the lot.” Id., quoting Pomeroy,

Specific Performance of Contracts (4th Ed.) § 2189. As noted in Baliles v. Cities Service

Co.,

to comply with the statute of frauds, a memorandum of an agreement to sell

must show, with reasonable certainty, the estate intended to be sold.

“Where the instrument is so drawn that upon its face it refers necessarily to

some existing tract of land, and its terms can be applied to that one tract only,

parol evidence may be employed to show where the tract so mentioned is

located. But, where the description employed is one that must necessarily

apply with equal exactness to any one of an indefinite number of tracts, parol

evidence is not admissible to show that the parties intended to designate a

particular tract by the description.”

Id., 578 S.W.2d 621, 623 (Tenn. 1979) (citing and quoting Dobson v. Litton, 45 Tenn. 616

(1868)).

Each contract designated the properties as “Country Joy Apartments, 493 Barnett Dr.,

Kingsport, TN” and “Country Joy Mobile Home Park, 483 Barnett Dr., Kingsport, TN.”

Each description of the property being sold clearly pertained to only one tract. As noted

above, “[a] description of the property by street and number is sufficient where the city in

which it is located is stated, either in the caption or body of the instrument.’” Rogers, 92

S.W.2d at 428. We agree with the trial court that the description satisfies the Statute of

Frauds.

Further, as of October 23, 2009, Rose and Davis were purchasing the whole of the

property identified as Tax Map 91, Parcel 103.00 – the same way it was held by Mr. Hobbs

and in the same manner as held by the subsequent high bidder at the 2013 re-sale. Thus,

because Rose and Davis ultimately agreed to purchase both the Park and the Apartments, it

is irrelevant whether the parcels existed as separate parcels at the time of the auction.

If Rose and Davis saw the lack of a dividing line between the properties as a defect,

they should have raised the issue promptly with the trial court and requested early on that the

Special Commissioner retain a surveyor to set the dividing line between the Apartments and

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the Park through a court partition survey. As noted in Rogers:

[W]here rescission was asked upon the ground of a defective title the vendor

would be allowed a reasonable time to perfect his title, and, if the afteracquired title be a good one, and there is no fraud, the complainant will be

compelled to accept it.

Id., 92 S.W.2d at 429. Accordingly, this issue lacks merit.

Driveway

Rose acknowledged at the May 2012 hearing that the revision date on Mr. Mize’s

survey was April 8, 2010, and that the revised survey of Rose and Davis’s properties showed

inclusion of the 14-foot parcel from the estate of Mr. Hobbs. Thus, any purported defect

pertaining to the driveway’s encroachment on Mr. Hobbs’s estate was cured by April 2010.

The driveway encroachment issue was not a basis upon which Rose and Davis were entitled

to relief.

Tax Lien

Rose and Davis assert that the properties were subject to a large federal tax lien that

was not paid until February 8, 2010, nearly a year and a half after the original contracts were

signed. Therefore, they argue that as of the date of the order of confirmation, the properties

were not free and clear of liens and could not thereby be conveyed by warranty deed as

represented at the auction.

In the trial court’s order of confirmation, it is stated

IT IS FURTHER ORDERED that when said purchase money for a particular

parcel and/or interest . . . should be paid to the Clerk and Master, and all

related costs shall have been paid, the Clerk and Master, upon a purchaser’s

request, shall make, acknowledge for registration, and deliver to such

purchaser a deed conveying the tract of land to such purchaser (or such

purchaser’s designee) free of any claim or lien . . . ; the subject parcel of the

real property shall be released from all such claims and liens upon payment of

the purchase money for said parcel and to the extent such claims and liens may

be found to be valid, the same shall be satisfied and released. . . .

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IT IS FURTHER ORDERED that when said purchase money should be paid

to the Clerk and Master . . . the Clerk and Master shall secure the release of

any claim of the Internal Revenue Service against said parcel with respect to

estate taxes due from the Herbert Hoover Hobbs Estate.

Tennessee courts recognize the right of sellers to be given an opportunity to remedy

any defects in title after execution of sales contracts. Rogers, 92 S.W.2d at 429. Payment

to satisfy the lien was made on February 8, 2010, pursuant to the court’s order and out of

proceeds from the 2009 sales of other properties by the Special Commissioner. “The

purchaser is entitled to have all tax liens . . . or other encumbrances on the property, removed,

or else discharged out of the purchase-money paid by him into Court.” Henry R. Gibson, et

al., Gibson’s Suits in Chancery § 18.20 (8th ed., 2004). Accordingly, any defect was cured

and the title was free and clear of the IRS lien as of the time Rose and Davis filed their

motions to set aside the sales contracts. The trial court properly determined that the tax lien

did not serve as a basis for relieving the pair of their obligation to close on the properties.

Judicial Sale

Rose and Davis point to what they perceive to be differences in the procedures used

in the original 2009 and the 2013 re-sale. They claim that the 2009 sale should have been

conducted like the 2013 re-sale.

Judicial sales are treated differently than private sales. As we have recognized:

The court should not and will not permit interference with the orderly process

of the court through its clerks or other officers in carrying out the terms and

provisions of its decrees. To permit such tampering with the processes and

procedure of the court as would authorize persons to bid at judicial sales who

did not know whether they would comply with the terms of sale or not . . .

would be opening the door to fraud and deceitful interference with persons

who might be present and interested in purchasing the property to be sold, and

create a sentiment in the minds of the public which would destroy, not only the

orderly procedure of such action in pending causes, but which would create a

disrespect for the court itself.

Matthews, 292 S.W.2d at 549.

If Rose and Davis had been willing to follow through with the sales contracts, the

Special Commissioner and the court could have worked to allay their fears regarding the

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perceived “defects.” Any request to have deeds prepared for two separate parcels could and

would have been honored – just as was done with the 2013 re-sale. However, by September

2010, Rose had decided he wanted out of the transaction and roughly one year after the

auction, and at least six months before the motion to set aside the sale contracts was filed,

Davis likewise had lost interest in purchasing the properties. Granting relief to Rose and

Davis under the circumstances of this case would be improper, as they did not timely pursue

their rights pursuant to the rules.

Damages

Rose and Davis contend that any damages they owe consist of the earnest money paid.

They assert the contracts contain a clear and unequivocal liquidated damages provision that

the earnest money would be forfeited if closing did not occur within approximately 30 days

after being presented the deed to the parcel:

It is further agreed that if purchaser fail (sic) to carry out and

perform the terms of this agreement after deed is presented, then

the above deposit money shall be forfeited as damage to this sale

and shall be retained by the Chancery Court subject to orders of

the Court.

The appellees contend the language regarding the deposit money exists merely to advise the

purchasers of how their deposit money of ten percent will be applied and that their deposit

money will not be returned to them.

In Tennessee, “[t]he term “liquidated damages” is defined by case law as a “sum

stipulated and agreed upon by the parties at the time they enter their contract, to be paid to

compensate for injuries should a breach occur.” V.L. Nicholson Co. v. Transcon Inv. & Fin.

Ltd., Inc., 595 S.W.2d 474, 484 (Tenn. 1980); Kimbrough & Co. v. Schmitt, 939 S.W.2d 105,

108 (Tenn. Ct. App.1996). The stipulated amount represents an estimate of potential

damages in the event of a contractual breach where damages are likely to be uncertain and

not easily proven. V.L. Nicholson, 595 S.W.2d at 484 (emphasis added). As argued by the

appellees, a “liquidated damages clause purporting to limit [one’s] liability for breach of

contract . . . [is] unenforceable where the actual damages caused by a breach are ‘readily

susceptible to accurate proof.’” Gross v. McKenna, No. E2005-02488-COA-R3-CV, 2007

WL 3171155, *5 (Tenn. Ct. App. Oct. 30, 2007).

In this case, actual damages caused by the breach by Rose and Davis, such as costs

associated with the re-sale (i.e., commissions paid to the auctioneer and the Special

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Commissioner), advertising costs, and the difference between the original purchase price and

the purchase price at the re-sale, were readily susceptible to accurate proof, even before the

2013 re-sale. See Gibson’s Suits in Chancery §688. We note that the costs associated with

8

the September 2009 sale alone exceeded the amount of the ten percent deposit (five percent

commission to the auctioneer and a six percent commission to the Special Commissioner).

There is no indication that any forfeited deposit monies would cover any damages sustained

by the Hobbses. Rather, the deposits were to be retained by the court.

The purpose of assessing damages in a breach of contract suit is to place the plaintiff,

as nearly as possible, in the same position he would have been in had the contract been

performed. Chambliss, Bahner & Crawford v. Luther, 531 S.W.2d 108 (Tenn. Ct. App.

1975), and Hawkins v. Reynolds, 467 S.W.2d 791 (Tenn. Ct. App. 1971). In order to place

the non-breaching appellees, the Hobbses, in “as nearly as possible . . . the same position

[they] would have been in had the contract[s] been performed,” then the court must not limit

the damages to the deposit money. As recognized by Gibson’s Suits in Chancery,

When a person bids at a Chancery sale, he thereby submits himself to the

jurisdiction of the Court as to all matters connected with such bid; and if his

bid is accepted by the Master before it is withdrawn, and is reported and

confirmed, the Court may by attachment compel the purchaser to complete

his purchase, by paying the purchase-money; or may order a re-sale of the

property and issue an execution against him and sureties, if any, for any loss

caused by the re-sale . . . .

Henry R. Gibson, et al., Gibson’s Suits in Chancery § 688, at p. 745 (5th ed., 1956)

(emphasis added) (citing Allen v. East, 63 Tenn. 308 (1874) (upholding a trial court’s decree

against a high bidder for the deficiency between his bid amount and the re-sale price));

Matthews, 292 S.W.2d at 549. See also Henry R. Gibson, et al., Gibson’s Suits in Chancery

§ 18.12 (8th ed., 2004). Accordingly, the trial court properly assessed damages against Rose

and Davis for the difference between their 2009 bids and the 2013 bid at the re-sale, plus the

costs incurred during the 2013 re-sale, with a credit for the deposits tendered by Rose and

Davis in 2009.

We find the cases cited by Rose and Davis that do not pertain to judicial sales of realty are

8

inapplicable in this matter. Covington v. Robinson, 723 S.W.2d 643, 644 (Tenn. Ct. App. 1987); Guiliano

v. Cleo, Inc., 995 S.W.2d 88, 91-92 (Tenn. 1999). 

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V. CONCLUSION

The judgment of the trial court is affirmed, and the case is remanded for such further

proceedings as may be necessary. Costs of the appeal are taxed to the quasiparties/appellants, David L. Rose and J. Rickey Davis, and their surety, if any, for which

execution may issue, if necessary.

_________________________________

JOHN W. McCLARTY, JUDGE

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