Court Opinion

ID: 1071684
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:43:18.727574+00
Date Added: 2024-06-11T15:40:01.695186
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                              AT JACKSON
                                  August 28, 2001 Session

         DOROTHY JEAN OWEN, ET AL. v. GEORGE D. SUMMERS

                A Direct Appeal from the Chancery Court for Fayette County
                  No. 11797   The Honorable Dewey C. Whitenton, Judge

                  No. W2001-00727-COA-R3-CV - Filed December 28, 2001

        This is an action to set aside a warranty deed. Plaintiff-Grantor filed suit on February 11,
1997, to set aside a deed executed July 11, 1989, on the grounds of fraud and mental incompetency.
The defendant grantee denied fraud and mental incompetency and affirmatively relied upon the
seven-year statute of limitations. Following a jury trial, which ended in a mistrial, the parties
stipulated that the case be submitted to the chancellor who conducted the trial for a nonjury
determination from the trial transcript and trial exhibits. The chancellor found that the seven-year
statute of limitations had been tolled by virtue of the grantor’s mental incompetence, the deed was
procured by fraud, and that the grantor was mentally incompetent on the date of the execution of the
deed. The chancellor rescinded the deed. Defendant-Grantee has appealed. We affirm.

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

W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which DAVID R. FARMER ,
J. and HOLLY KIRBY LILLARD , J., joined.

John D. Horne, Memphis, For Appellant, George D. Summers

J. Houston Gordon, Covington, For Appellees, Dorothy Jean Owen on relation of Jospeh B. Owen,
Jr.

                                            OPINION
        This case involves a transfer of the one-third undivided interest in a 461-acre farm1 located
in Fayette County, Tennessee (the “Property”), which was owned in April of 1989 by Anita Joyce
Owen, Eola Summers, and Joseph B. Owen, Jr., as co-tenants. On June 10, 1989, Mr. Owen signed
a contract for sale of his interest in the property to the defendant, George D. Summers, receiving an
earnest money check for $125.00 in addition to $10.00 previously paid, and another check for
$50.00. The purchase price set out at $25,000.00 was to be paid: $5,000.00 upon execution of the
deed; and the balance of $20,000.00 to be paid “at the sell [sic] of interest of said purchase property.”
Subsequently, on July 11, 1989, Mr. Summers furnished a warranty deed which Joseph signed and
acknowledged before a notary public. The deed reserved a vendor’s lien to secure the payment of
the balance of the purchase price.

        On March 1, 2001, the chancellor filed an excellent trial opinion containing a narration of
the proceedings and pertinent evidence, findings of fact, and conclusions of law, which we quote in
part:

                           On June 2, 1989, Anita Joyce Owen, Joseph B. Owen, Jr. and
                   Eola Summers borrowed the sum of $52,319.50 from the Somerville
                   Bank and Trust, executed a Deed of Trust, mortgaging the farm to
                   secure that loan, and the Deed of Trust was recorded in the Office of
                   the Register of Fayette County, Tennessee, on June 8, 1989. Joseph
                   B. Owen, Jr. executed the Deed of Trust to Somerville Bank and
                   Trust while he was in the Fayette County Jail, in the presence of a
                   Notary Public, and from the proceeds of the loan, Mr. Owen received
                   checks in the amount of $1,250.00 and $4,750.00, on June 6, 1989.

                           The present case involves a suit filed on February 6, 1997, by
                   the plaintiffs to set aside a warranty deed, with a vendor’s lien, dated
                   July 11, 1989,on the basis of fraud, misrepresentation and
                   incompetency.

                          The plaintiffs contend, at the time of the execution of the deed
                   by Joseph B. Owen, Jr. that he was mentally incompetent because of
                   drug use, and that his first cousin, the defendant, George D.
                   Summers, defrauded him by obtaining his signature on the warranty
                   deed. The plaintiffs further say that although the deed contained a
                   vendor’s lien, that it allowed the defendant to purchase Joseph B.
                   Owen, Jr.’s one-third interest in his grandparents’ farm for $5,000.00,
                   when it had a market value of at least $50,000.00.

         1
            We n ote that the companion case of Can epari v. Su mm ers, No. W2000-00527-COA-R3-CV, 2000 W L
33191368 (Tenn. Ct. App. 2000), was before this Court previously. In that case, this Court affirmed the trial court’s
order that the property be sold for partition. That case did n ot reso lve the issue of ow nersh ip of the on e-third interest
in the property at issue here.

                                                             -2-
        Mr. Summers contends that the action is barred by the statutes
of limitations found in T.C.A. § 28-2-101 and § 28-2-102, because
the plaintiffs did not bring this action within seven years after July 11,
1989, the date Mr. Owen signed the deed.

         The plaintiffs assert that the fraud committed by the defendant
was a continuing one. The warranty deed with the Vendor’s Lien,
states that Mr. Summers will pay Mr. Owen an additional $20,000.00
when and if Mr. Summers sells the land.

         The plaintiffs contend that the warranty deed with vendor’s
lien, by its terms, is an executory or continuing contract, and that the
defendant’s fraud is a continuing one. The plaintiffs aver that since
the warranty deed with the vendor’s lien is fraudulent and provides
for continuing performance on the part of Mr. Summers at an
undetermined date in the future, the fraud and misrepresentation
continued, and that the applicable statute of limitations could not run
until the contract was performed. The plaintiffs also assert that any
statute of limitations was tolled because Mr. Owen was incompetent
at the time of the execution of the deed and for a considerable period
thereafter.

        Mr. Summers contends that he had no reason to believe that
Mr. Owen was not competent, that it was Mr. Owen who contacted
him to sell his undivided interest, and that Mr. Summers at all times
believed Mr. Owen to be competent to handle his legal affairs. Mr.
Summers also asserts the affirmative defenses of accord and
satisfaction, estoppel, fraud, laches, and release and/or waiver. Mr.
Summers further says that his tender of $20,000.00 by payment into
Court of that sum on the 24th day of July, 1998, after this action was
filed, extinguished his obligation to Mr. Owen under the vendor’s
lien.

        The parties, after a jury could not reach a verdict, by
stipulation and consent, submitted this matter for a non-jury decision
by the Court on the basis of the record and the evidence heard by the
jury. This Court did preside over the jury trial and heard and
observed the witnesses and the other evidence presented in this case.

       The parties have submitted their proposed findings of fact and
conclusions of law, which along with the opinion of the Court of
Appeals, have been utilized by this Court, as permitted by Delvan-
Delta Corporation v. Larry W. Roberts, 611 S.W.2d 51 (Tenn. 1981),

                                   -3-
but the conclusions and findings made and contained in this Trial
Opinion are entirely those of this Court.

        Anita Joyce Owen, Joseph B. Owen, Jr. and Eola Owen
Summers were the only heirs of Virginia H. Owen and Burke Owen,
both now deceased. Upon the death of Virginia H. Owen, on April
20, 1989, they each became the owners of an undivided one-third
interest in the lands of Burke and Virginia H. Owen, including the
461 acre farm which is the subject of this litigation.

        In June 1989, two third-parties, Ronnie Smith and Michael
Sciara, through agent, Lou Ronza, made an offer to purchase the 461
acre farm and four acre tract for $225,000.00 by presenting a real
estate contract signed by them. Anita Joyce Owen delivered the Lou
Ronza contract to Eola Summers.

        Eola Summers rejected the Lou Ronza contract and refused to
sell the farm for $225,000.00 because she felt “that was not enough
and it was too hurried a deal.” Ms. Summers stated that anything
under $50,000.00 would have been inadequate for her one-third
interest in the land. Anita Joyce Owen testified that her sister said
that she did not sign the contract because her son, Dempsey, would
not let her.

       Mr. Summers was aware of the offer of $225,000.00 as of
June 30, 1989. Mr. Summers said that the farm was worth between
$300.00 and $400.00 per acre in 1989.

        The plaintiffs presented expert proof as to the value of the
land as of July 12, 1989, by James Thompson, a realtor and appraiser
in Somerville and Fayette County since 1967. Mr. Thompson was
familiar with the 461 acre Burke-Owen farm, and testified that the
farm as a whole had a fair market value of about $700.00 an acre on
July 12, 1989, or the sum of $322,000.00, with one-third interest
being worth $107,333.00. However, Mr. Thompson stated that
because it was an undivided interest, he would discount its value by
one-half, or to about $53,600.00.

        The Court finds that the value of a one-third undivided
interest in and to the 461 acre farm as of July 12, 1989, the date of the
recording of the warranty deed in question, was at least $50,000.00.

                                  -4-
        The proof in this case shows that Joseph B. Owen, Jr., at the
time of the trial, had been incarcerated in the Northwest Correctional
Facility in Tiptonville, Tennessee, since 1996, for drug-related
driving offenses.

       Mr. Owen began using marijuana and alcohol when he was in
junior high, and by the time he was seventeen years old, he had
become a heavy cocaine user, including crack cocaine.

        The preponderance of credible proof shows that, from the time
that his grandmother died on April 20, 1989, until well after the
execution of the land-sale contract and warranty deed in July of 1989,
Joseph B. Owen, Jr. was in a constant drug-induced state of m ind.
Mr. Owen had been treated multiple times over the years at Harbor
House, Serenity, JACOA, Aspil Manor, Memphis Mental Health
Institute, Jackson-Madison County Hospital, Parkwood in Olive
Branch, Mississippi, the Memphis House, now called Memphis
Recovery Center, and he was admitted to the Med in Memphis for
five days because of a drug overdose.

       The evidence is clear that Mr. Owen was in a continuing drug
addicted condition from approximately 1985 until his incarceration
in 1996.

        Mr. Owen’s drug-induced state of mind and condition during
the period in question was further corroborated by Sheriff Bill Kelly
of Fayette County. In 1989, Mr. Owen, according to Sheriff Kelly,
was heavily abusing drugs and alcohol, and most of the time was in
a drug-induced stupor or fog. Sheriff Kelly testified that he was
required to deal with Mr. Owen on a regular basis from the time that
he turned eighteen. Mr. Owen was arrested in Fayette County on
January 14, 1989, May 3, 1989, and again on April 24, 1990.

        Mr. Owen testified that, after the death of his grandmother in
1989, his illegal drug habit increased dramatically. He went from
being out of control to being “ballistic” and “crazy.” He said: “I just
didn’t care.” During the period from his grandmother’s death on
April 29th through at least July 30th of 1989, Mr. Owen stated there
was never a day that he was not using some form of drugs, including
cocaine, crack cocaine, whiskey, marijuana and pills.

      In mid-June 1989, about two weeks before the transaction
with Mr. Summers, Dorothy Jean Owen picked up her son at St.

                                 -5-
           Francis Hospital in Memphis. He was in a stupor and very
           incoherent, and it took two days for him to sleep it off.

                   In the latter part of June 1989, Dorothy Jean Owen responded
           to a call and found her son in a parking lot at Baptist Hospital bent
           over in pain, wearing no shoes or shirt, and with his jaw broken in
           two places. He was incoherent and did not know what had happened
           to him. This resulted in Mr. Owen having his mouth wired shut and
           being placed on pain medications. Dorothy Jean Owen allowed Mr.
           Owen to remain in her home through July 1989. She checked on him
           periodically through the day and observed him regularly from the
           latter part of June through July 1989.

                  Dr. Giaroli performed out patient surgery on Mr. Owen on
           June 28, 1989, to repair his fractured jaw. In connection with his
           admission for out patient surgery, Mr. Owen executed a written
           consent and authorization for treatment by Dr. Giaroli.

                   Mr. Owen was prescribed Demerol, Visteril and two other
           kinds of tranquilizers as a result of his broken jaw, and was using
           those prescribed drugs in addition to his constant illegal drug use. As
           already indicated, Mr. Owen said there was never a period from June
           30th through July 12, 1989, that he was not using intravenous drugs,
           taking Demerol and several tranquilizers and drinking whiskey.

                    The Court finds, by a preponderance of the credible proof, that
           at the time the deed in question was signed on July 11, 1989, Mr.
           Owen was in a drug-induced state of mind, and lacked the capacity to
           enter into a contract, did not comprehend what he was doing, and
           could not have voluntarily entered into a binding transaction.

                   The Court finds that Mr. Summers chose a time to negotiate
           his “contract” with Mr. Owen, who he had only seen two or three
           times in his lifetime, when Anita Joyce Owen, the mother2 [sic] of
           Mr. Owen, was hospitalized in Charter Lakeside Hospital. The Court
           finds that these circumstances, along with the other statements and
           action of Mr. Summers, lead to the conclusion that Mr. Summers
           chose the dates of his transaction with Mr. Owen in order to avoid the
           presence of those who were protective of Mr. Owen and to keep them
           from being advised of what was happening.

2
    Ms. Owen is the aunt of Mr. Owen, and this was corrected in the supplemental trial opinion.

                                                 -6-
        The defendant, Mr. Summers, obtained a contract from an
office supply store and took it to the house of the mother of Mr.
Owen where he wrote up an agreement in his own handwriting, which
he persuaded Mr. Owen to sign. The contract provided, in part:

       Seller agrees to sell and convey unto the purchaser,
       with a clear and perfect title thereto by a good and
       sufficient deed with the usual covenants therein, title
       by dissent properly released . . . for the sum of Twenty
       Five Thousand Dollars ($25,000.00) to be paid as
       follows: $5,000.00 down payment at recording and
       balance to be paid at $20,000.00 at the sale of interest
       of said purchased property.

       Mr. Summers stated that Mr. Owen asked for money to buy
more Visteril and Demerol for his broken jaw, and that he drove Mr.
Owen to the Clover Leaf Pharmacy where he handed him a $125.00
check at the same time that the sales contract form was being
notarized in the pharmacy. The following day, he gave Mr. Owen
another $50.00, and he drove Mr. Owen to the grocery store to cash
the $50.00 check.

      After obtaining the signed sales contact from Mr. Owen, Mr.
Summers procured the services of the attorney, James (Jay) Watson,
who drafted the warranty deed. The deed, after conveying Mr.
Owen’s undivided interest to Mr. Summers, provides, in part:

       The grantee does hereby expressly convey unto
       grantor a vendor’s lien to secure payment of the
       balance of the purchase price. The total consideration
       for this transaction is Twenty-Five Thousand &
       No/100 ($25,000.00) Dollars. Of this amount Five
       Thousand & No/100 ($5,000.00) Dollars has been
       delivered to and accepted by grantor upon execution
       of this instrument. The remaining balance of Twenty
       Thousand and No/100 ($20,000.00) Dollars shall
       become fully due and payable without interest upon
       any future sale of grantee’s interest required
       hereunder.

       The attorney, James (Jay) Watson, testified that he used the
language in the deed from the handwritten contract form. According

                                 -7-
to Mr. Watson, Mr. Summers told him that Mr. Owen had an
attorney, David Henry, who was going to review the deed.

         Joseph B. Owen, Jr., never met with Mr. Watson. Mr. Watson
testified that he would have considered it inappropriate to have Mr.
Owen execute a deed if he had been made aware that he was on
drugs, or if his eyes, speech, or demeanor indicated that he was
impaired in some way. The deed was not executed in the attorney’s
office, but it was notarized at Bub’s Used Car Lot on Summer
Avenue in Memphis.

         The Court find, under the language contained in the deed, that
unless Mr. Summers decided to sell his interest, Mr. Owen would
never be paid the $20,000.00. The purported vendor’s lien is not a
demand note. It is not payable on demand. It is payable only when
and if the defendant sells the property. Thus, if Mr. Summers never
sells, the event never occurs, and any statute of limitations does not
begin to run until the happening of the event that triggers the
obligation.

        Mr. Watson testified that upon any future sale of the property,
or any interest therein, including any refinancing of the property, sale
of mineral rights, or any subdivision thereof, Mr. Summers would be
obligated to pay Mr. Owen. Mr. Summers admitted that when he sold
part of the land to the State for a right of way, he did not pay Mr.
Owen any portion of the proceeds.

        The total payments made by Mr. Summers to or for Mr. Owen
at or near the time of his purchase of Mr. Owen’s interest in the land
were as follows:

        Initial Cash                           $   10.00
        Earnest Money                             125.00
        Additional Check                           50.00
        Cashier’s Check                         4,683.40
        ½ Recording Fees                           66.80
        ½ Attorney Fees                            65.62

        Total                                  $5,000.82

        *                      *                       *

                                   -8-
               After considering all of the evidence and the equities in the
       cause, including the credibility of the witnesses and the other proof,
       the Court finds:

       1. That the Warranty Deed, with Vendor’s Lien, executed by Joseph
       B. Owen, Jr. to George D. Summers on July 11, 1989, and filed of
       record in the Register’s Office of Fayette County, Tennessee, was
       obtained by fraud and misrepresentation and should be set aside,
       rescinded, and declared null and void.

       2. That the fraud of defendant, George Dempsey Summers, was a
       continuing one and that the defense of the running of the statutes of
       limitation is not applicable.

       3. That from June 1989, until at least the middle of 1994, the
       plaintiff, Joseph B. Owen, Jr. was incompetent due to his addiction
       and abuse of drugs, and that on June 10, 11 and 12, 1989, Mr. Owen
       did not possess sufficient capacity to enter into contracts and deeds.
       Therefore, the warranty deed executed on July 11, 1989, is null and
       void, and any statutes of limitations were tolled until at least the
       middle of 1994, and the complaint filed February 11, 1997, by the
       plaintiff, was not time barred.

       4. Since the rental proceeds from the land in question were applied
       to the accrued interest and to reduce the principal owed on the
       mortgage, Joseph B. Owen, Jr. is entitled to receive the benefit of
       these payments on the mortgage as an award of damages for the loss
       of the rental value.

       5. The defendant, George D. Summers, is entitled to a set-off and
       reimbursement of the cash paid to Joseph B. Owen, Jr. at or about the
       time of the execution of the deed ($10.00 + $125.00 + $50.00 +
       $4,683.40) in the total sum of $4,858.40, and also the pro-rata real
       estate taxes paid on the one-third undivided interest by George D.
       Summers. The Court does not award the payment or reimbursement
       of attorney fees or other expenses of either party. The Court also does
       not award any pre-judgment interest to either party.

       6. The Court Costs shall be paid by the defendant, George D.
       Summers.

The chancellor entered “Final Order and Decree” which provides:

                                        -9-
        This cause having come on to be heard before the Honorable
Dewey C. Whitenton, Chancellor, sitting without a jury by consent of
the parties, upon the complaint, answer, exhibits, stipulations,
admissions, recorded testimony of witnesses, and evidence that had
been presented at a jury trial conducted February 16-18, 1999 that
resulted in a mistrial, the Chancellor, having presided over such trial
and having heard the evidence, the witnesses’ testimony and having
observed with witnesses’ demeanor and having assessed their
credibility, and having heard arguments of counsel, after the
submission of proposed findings of fact and conclusions of law by the
parties on November 27, 2000, did render his findings and verdict in
this matter as set forth in his Trial Opinion dated February 28, 2001,
as supplemented on March 6, 2001, in which he made specific
findings of fact and conclusions of law, and the same being
incorporated herein by reference,

IT IS THEREFORE, ORDERED, ADJUDGED AND DECREED
that the Warranty Deed with Vendor’s Lien, executed by Joseph B.
Owen, Jr. to George D. Summers on July 11, 1989, and filed of
record in the Register’s Office of Fayette County, Tennessee, having
been obtained by fraud and misrepresentation, is hereby ordered set
aside, rescinded, and declared null and void.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that
since the fraud of Defendant, George Dempsey Summers, was a
continuing one, the asserted defense of Defendant Summers of the
running of statutes of limitation is not applicable.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that
the Court having found that because the plaintiff, Joseph B. Owen, Jr.
was incompetent due to his addiction and abuse of drugs, from June
1989 until at least the middle of 1994 and that on July 10, 11 and 12,
1989, Joseph B. Owen, Jr. did not possess sufficient capacity to enter
into contracts and/or deed, the warranty deed executed on July 11,
1989, is declared null and void, and any statutes of limitations were
tolled until at least the middle of 1994, and the complaint filed on
February 11, 1997, by the plaintiff, was not time barred.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that,
since the rental proceeds from the land in question were applied to the
accrued interest and to reduce the principal owed on the mortgage,
Joseph B. Owen, Jr. is entitled to receive the benefit of these

                                 -10-
               payments on the mortgage as an award of damages for the loss of the
               rental value.

               IT IS FURTHER ORDERED, ADJUDGED AND DECREED that
               the Defendant, George D. Summers, is entitled to a set-off and
               reimbursement of cash paid by him to Joseph B. Owen, Jr. at or about
               the time of the execution of the deed ($10.00 + $125.00 + $50.00 +
               $4,683.40) in the total sum of $4,858.40, and also the pro-rata of any
               real estate taxes on the one-third undivided interest paid by George D.
               Summers.

               IT IS FURTHER ORDERED, ADJUDGED AND DECREED that
               there shall be no award or payment of reimbursement of attorney fees
               or other expenses to either party.

               IT IS FURTHER ORDERED, ADJUDGED AND DECREED that no
               pre-judgment interest shall be awarded to either party.

               IT IS FURTHER ORDERED, ADJUDGED AND DECREED that
               the court costs shall be paid by the Defendant, George D. Summers.

               ALL OF WHICH IS ORDERED, ADJUDGED AND DECREED this
               12th day of March, 2001.

        Mr. Summers appeals and presents seven issues for review in his brief. In his first issue, he
asserts error by the court in denying his motion for summary judgment based on the seven year
statute of limitations. This issue as framed will not be considered by this Court. Where a trial
court’s denial of summary judgment was predicated upon existence of a genuine issue of fact, that
decision is not reviewable on appeal where there has been a judgment rendered after a trial on the
merits of the case. See Hobson v. First State Bank 777 S.W.2d 24 (Tenn. Ct. App. 1989); Mullens
v. Precision Rubber Products, 671 S.W.2d 496 (Tenn. Ct. App. 1984).

        In his second issue, Mr. Summers asserts the court erred in denying his motion for directed
verdict. Since a directed verdict is applicable only to jury cases, we assume he is complaining of
error in the former jury trial. The record does not reflect any post-trial motion in the jury phase, but
the parties stipulated that because of the hung jury, the case was submitted to the chancellor for a
nonjury trial. Therefore, Mr. Summers waived his right to assert error in the jury trial.

       We have, therefore, rephrased the issues as follows: (1) Whether the trial court properly
found that, for statute of limitations purposes, plaintiff was incompetent; (2) Whether the trial court
properly found that plaintiff was not competent to execute the contract and deed to the Property; (3)
Whether the trial court properly found that defendant Summers obtained the deed by fraud and
misrepresentation; (4) Whether the trial court properly ordered the deed “set aside, rescinded, and

                                                 -11-
declared null and void”; and (5) Whether the trial court properly awarded plaintiff damages for loss
of the rental value of the property.

        Since this case was tried by the court sitting without a jury, we review the case de novo upon
the record with a presumption of correctness of the findings of fact by the trial court. Unless the
evidence preponderates against the findings, we must affirm, absent error of law. See Tenn. R. App.
P. 13(d). For the reasons below, we affirm the trial court’s judgment.

        We first address the threshold issue of whether the trial court properly found that plaintiff’s
cause of action was not barred by Tennessee’s seven (7) year statute of limitations set out in T.C.A.
§ 28-2-102.3 In this case, the trial court found that T.C.A. § 28-2-102 did not apply because, “from
June 1989, until at least the middle of 1994, the plaintiff, Joseph B. Owen, Jr. was incompetent due
to his addiction and abuse of drugs.” The trial court also found that “the fraud of defendant, George
Dempsey Summers, was continuing and that the defense of the running of statutes of limitation is
not applicable.” Because we hold that the trial court properly found Mr. Owen’s incompetency
tolled the seven-year statute of limitations, we need not address the trial court’s alternative finding
of continuing fraud to toll the statute of limitations.

        Although T.C.A. § 28-2-102 does act to bar real property actions not brought within seven
years, T.C.A. § 28-1-106 acts to toll the statute of limitations where the person entitled to commence
the action was of unsound mind at the time the right of action accrued. That statute provides:

                If the person entitled to commence an action is, at the time the cause
                of action accrued, either within the age of eighteen (18) years, or of
                unsound mind, such person, or such person's representatives and
                privies, as the case may be, may commence the action, after the
                removal of such disability, within the time of limitation for the
                particular cause of action, unless it exceeds three (3) years, and in that
                case within three (3) years from the removal of such disability.
T.C.A. § 28-1-106 (2000). Statutes of limitation are meant to protect defendants from prejudice
because of undue delay and to guard against loss of evidence over the passage of time. See Smith
v. Grumman-Olsen Corp., 913 F. Supp. 1077, 1083 (E.D. Tenn. 1995). For this reason, “exceptions
to a limitations statute in favor of persons under disability should be strictly construed and never
extended beyond their plain import.” Id.

        3
            That section provid es:

                    Any person, and those claiming under such person neglecting for the term of seven
                    (7) years to avail themselves of the benefit of any title, legal or equitable, by action
                    at law o r in equity, effectually prosecuted against the person in possession, under
                    recorded assurance of title, as in § 28-2-101, are forever barred.

T.C.A. § 28-2-102 (200 0).

                                                             -12-
        The plaintiff has the burden of proving he or she was of unsound mind at the time the cause
of action accrued. See, e.g., Smith v. Grumman-Olsen Corp., 913 F. Supp. 1077, 1084 (E. D. Tenn.
1995). The plaintiff’s disability must have existed at the time the cause of action accrued and, once
the disability has been removed, the cause of action must be brought within three (3) years. See
T.C.A. §. 28-1-106. T.C.A. § 28-1-106 does not define “unsound mind.” Additionally, we have
found no Tennessee cases addressing whether drug addiction could render an individual of “unsound
mind” in the context of statutes of limitation.

         This Court has recognized that use of narcotics and barbiturates can impair an individual’s
ability to execute a will. See Bruster v. Etheridge, 345 S.W.2d 692, 698 (Tenn. Ct. App. 1960).
In Bruster, this Court observed:

                          In Phillips' Pritchard on Wills and Estates, Vol. 1, sec. 114, it
               is said;

                          'Drunkenness is of itself a species of insanity,
                          self-imposed; and long continued habits of
                          intemperance may, in some temperaments, gradually
                          destroy the mind and impair the memory and other
                          faculties, so as to produce permanent derangement.
                          But the mere fact that the testator was under the
                          influence of intoxicating drinks will not, of itself,
                          render the testamentary act invalid. To have that
                          effect, it must appear that the habit of indulging in
                          strong drink has produced some fixed mental disease,
                          or that his present state of intoxication is such as to
                          render him not master of himself and, therefore,
                          irresponsible for his acts.'

                      In support of the above statement the text cites, Key v.
               Holloway, 66 Tenn. 575, Peck v. Cary, 27 N.Y. 9, 84 Am.Dec. 220.
               1 Page on Wills, 150, and the annotation in 67 A.L.R. 857.

Id.

        In Doe v. Coffee County Bd. of Educ., 852 S.W.2d 899 (Tenn. Ct. App. 1992), the Court
dealt with the statute of limitations defense in a student sexual abuse case. The students-plaintiffs
asserted, among other things, that they were entitled to the tolling provisions of T.C.A. § 28-1-106
to extend the statute of limitations by virtue of post-traumatic syndrome as a result of the abuse. The
Court, in analyzing this assertion, said:

                       Tenn.Code Ann. § 28-1-106 postpones the running of the
               statute of limitations for persons who are “of unsound mind” when

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               their cause of action accrues. While the statute itself does not define
               the term “unsound mind,” an early case construing the statute’s
               predecessor applied it to an elderly woman found to be “incapable of
               attending to any business, or of taking care of herself.” Porter v.
               Porter, 22 Tenn. (3 Hum.) 586, 589 (1842).

                       The Porter v. Porter formulation is generally consistent with
               the common understanding of “unsound mind,” Sheats v. Tri-Cities’
               Hosp. Auth., 167 Ga.Appl. 122, 306 S.E.2d 75, 76 (1983); 56 C.J.S.
               Mental Health § 2, at 500 (1992); 54 C.J.S. Limitations of Actions
               § 117 (1987); 44 C.J.S. Insane Persons § 2, at 46 (1945), and is
               consistent with the decisions of other jurisdictions applying similar
               statutes to cases involving child sexual abuse. Smith v. Smith, 830
F.2d 11, 12 (2d Cir. 1987); John R. v. Oakland Unified Sch. Dist.,
               206 Cal. App. 3d 1473, 240 Cal. Rptr. 319, 323 (1987); Burpee v.
               Burpee, 52 Misc. 2d 466, 578 N.Y.S.2d 359, 361-62 (S.Ct. 1991).

Id. at 905. Since the Porter v. Porter, supra, formulation is generally consistent with a common
understanding of “an unsound mind,” it is appropriately used in the context of T.C.A. § 28-1-106.

        In the case at bar, we do not find that the evidence preponderates against the trial court’s
finding that Mr. Owen was incompetent by virtue of his drug and alcohol abuse. Both Mr. Owen
and his mother, Dorothy Owen, testified that Mr. Owen had abused drugs and alcohol from an early
age, and that Mr. Owen’s drug habit escalated from marijuana to intravenous drugs such as cocaine.
Mr. Owen was admitted to multiple drug treatment centers over the period of time in question, and
was admitted to the hospital for a drug overdose at least once.

        Additionally, Fayette County Sheriff Bill Kelley testified at trial that Mr. Owen heavily
abused alcohol and drugs and was arrested at least three times in 1989 and 1990. The record also
indicates that Mr. Owen’s jaw was fractured at the time the deed was executed, and that Mr. Owen
was taking Demerol, Vistaril, and tranquilizers in addition to cocaine, whiskey, marijuana and “pills”
after his jaw was wired shut. Mr. Owen testified that, at the time he signed the deed in 1989, his
drug habit had “increased . . . anywhere from a minimum of $300 to $800 to $1,000 a day.”

        The trial court stated, “The evidence is clear that Mr. Owen was in a continuing drug addicted
condition from approximately 1985 until his incarceration in 1996.” When the resolution of the
issues in a case depends upon the truthfulness of witnesses, the trial judge who has the opportunity
to observe the witnesses in their manner and demeanor while testifying is in a far better position than
this Court to decide those issues. See McCaleb v. Saturn Corp., 910 S.W.2d 412, 415 (Tenn. 1995);
Whitaker v. Whitaker, 957 S.W.2d 834, 837 (Tenn. App. 1997). The weight, faith, and credit to be
given to any witness’s testimony lies in the first instance with the trier of fact, and the credibility
accorded will be given great weight by the appellate court. See id.; In re Estate of Walton v. Young,
950 S.W.2d 956, 959 (Tenn. 1997). Under these circumstances, we agree with the trial court that

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Mr. Owen was incapable of taking care of himself and of his affairs during the seven-year period
following the execution of the disputed deed. For these reasons, we affirm the trial court’s finding
that Mr. Owen’s cause of action was not barred by the applicable statute of limitations.

        We next address the issue of whether Mr. Owens was incompetent to execute the deed in
question. As we noted above, we believe the trial court properly found Mr. Owens was incompetent
for purposes of tolling the applicable seven-year statute of limitations. However, as
defendant/appellant Summers correctly points out, less mental capacity is required to execute a deed
or will than to execute a contract. See Roberts v. Roberts, 827 S.W.2d 788, 791 (Tenn. Ct. App.
1991). The question then becomes what mental capacity is required to execute a deed, and whether
Mr. Owen had sufficient capacity to execute the deed to Mr. Summers.

        In Seat v. McWhirter, 29 S.W. 220, 227 (Tenn. 1894), the Tennessee Supreme Court said,
“The law does not require that persons shall be able to dispose of their property ‘with judgment and
discretion’ in order to the validity of a conveyance. It is sufficient if they understand what they are
about.” Id. (quoting Paine v. Roberts 82 N.C. 453 (1880)). Similarly, this Court, in Roberts, noted
that contractual capacity must be judged in light of the facts and circumstances surrounding each
case. Id. at 792.

       In this case, the trial court specifically found that Mr. Owen was using illegal drugs, as well
as painkillers and tranquilizers prescribed for his broken jaw, at the time he signed the deed in
dispute. In his Opinion, the Chancellor noted that “at the time the deed in question was signed on
July 11, 1989, Mr. Owen was in a drug-induced state of mind, and lacked the capacity to enter into
a contract, did not comprehend what he was doing, and could not have voluntarily entered into a
binding transaction.” The evidence in the record does not preponderate against the Chancellor’s
finding. We, therefore, affirm the trial court’s determination that the deed should be declared null
and void.

        The Chancellor also found that the deed was procured by fraud and misrepresentation
allowing recission of the deed. We note that “[t]he right of the Court to order rescission is
discretionary” and that “the Court should exercise this discretion very sparingly and only award it
'in cases where some such element as actual fraud, accident, mistake or insolvency . . . appear to
justify it.'” Early v. Street, 241 S.W.2d 531, 536 (Tenn. 1951) (quoting McMillan v. American
Suburban Corp., 188 S.W. 615, 617 (Tenn. 1916)). We believe the trial court correctly found that
the circumstances of this case warranted rescinding or voiding the deed.

        The trial court specifically noted that Mr. Summers chose a time to negotiate the transfer of
the Property during the time Mr. Owen’s aunt, Anita Joyce Owen, was herself hospitalized for drug
addition and, therefore, unable to protect her nephew’s interests. The record indicates that Mr. Owen
asked Mr. Summers for money to buy more Visteril and Demerol, and that Mr. Summers drove Mr.
Owen to the pharmacy to purchase the medications. Mr. Summers then gave Mr. Owen a $125.00
check at the same time that Mr. Summers was having someone at the pharmacy notarize the contract
for sale of the property. The record also indicates that, rather than having the deed to the property

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notarized in the attorney’s office, Mr. Summers had it notarized at Bub’s Used Car Lot on Summer
Avenue, in Memphis. Considering these circumstances with Mr. Owen’s mental and physical
condition, we hold that the trial court did not abuse its discretion in voiding the deed in question.

        Finally, we address the issue of damages. The trial court ordered Mr. Owen to refund the
$4,858.40 that Mr. Summers gave him in consideration for the deed. The court also found that Mr.
Owen was entitled to receive the benefit of payments Mr. Summers made on the mortgage which
were paid for by rental proceeds from the Property. Neither party received prejudgment interest, and
court costs were to be paid by Mr. Summers, with both parties covering their own attorneys fees and
expenses. We believe such an outcome is proper, given the fact that the deed from Mr. Owen to Mr.
Summers was void for lack of capacity.

       We, therefore, affirm the Order of the trial court setting the deed aside. Pursuant to that
Order, and to ensure that the parties to the deed are returned to the status quo, the deed should be
rescinded upon payment by Mr. Owen of the $4,858.40 he received from Mr. Summers. This case
is remanded to the trial court for such further proceedings consistent with this opinion. Costs of this
appeal are assessed to the defendant/appellant and his sureties.

                                               __________________________________________
                                               W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.

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