Court Opinion

ID: 8305009
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:27:42.534511+00
Date Added: 2024-06-11T10:08:17.535737
License: Public Domain

Carney, J.
(dissenting).
In my opinion His Honor the learned Chancellor was in error in refusing to set aside the consent decree entered ón July 17, 1961. The evidence heard by the Chancellor upon the original trial below is not preserved in the record but from the pleadings the following facts appear:
The complainants, Emma Horton Kittrelle, Buddy Horton, Lucia L. Miller and Aleen Horton Cole, are colored people. As the surviving children and grandchildren of J. M. Horton they were the owners of something over 1900 acres of land lying in the northwest portion of Shelby County, Tennessee, most of which was located between the Chickasaw Bluff and the Mississippi River. Originally this property amounted to 3000 acres and a considerable portion of which appears to have been lost by the erosion of the Mississippi River. The land had been in the complainants’ family since 1873.
On October 1, 1959, pursuant to a contract dated June 17,1959, the complainants executed a deed to the defendant, Philsar Development Company, which supposedly conveyed 500 acres of bottom land together with all present and future accretions at a price of $125.00 per acre for the old land (non accretions) or a total of $62,500 payable in deferred payments. The deed expressly reserved 500 acres of bottom land to the grantors, Lucia L. Miller and Aleen Cole. Further, the deed reaffirmed an option *108agreement made in the contract dated June 17, 1959, whereby the defendant, Philsar Development Company was given the first option to purchase any part of the 500 acres which complainants Aleen Cole and Lucia Lee Miller might elect to sell.
The contract further provided that in the event the land deeded to the Philsar Development Company surveyed out less than 500 acres the purchase price of the land should he reduced by $125.00 per acre.
On July 22, 1960, the complainants filed the original bill in this cause averring that the deed of October 1, 1959, had been made prior to a survey of the property in 1960; that a survey revealed that the defendant, Philsar Development Company, was actually receiving 1220 acres of land under its deed of which 675 acres were old land and 546 acres represented accretions. The hill further alleged that all the parties had erroneously failed to consider some 200 acres of land which belonged to the complainant, Emma Horton Kittrelle, and that the defendant was receiving at least 175 acres of old land more than the parties had intended that it should receive. The bill also referred to the option to purchase the remaining 500 acres allotted to Lucia Lee Miller and Aleen Cole. A number of encumbrancers were impleaded. The bill prayed that the Court construe the contract of sale, the warranty deed, and determine the rights of all the parties.
At least twice during the course of the trial it was announced that the matters in controversy had been settled and then it appeared that the parties were not in agreement.
Finally on June 16, 1961, solicitor for the defendant announced in open court to the Chancellor that the parties *109had agreed to settle the matters in controversy. Thereupon he related to the Chancellor the various items of the settlement which covered some seven pages in the record.
Among the terms of the agreement mentioned in the oral statement of counsel were:
(1) A surveyor was to measure 87.5 acres and Philsar Development Company was to reconvey this property to “complainants.” Later the decree recited the 87.5 acres were to be deeded to Lucia Lee Miller and Aleen Cole.
(2) The first option to purchase or right of refusal set out and described in the contract and in the warranty deed was to be void.
(3) The complainants were relieved of their obligation to pay T. J. Hammond a 10% real estate commission on any future sales of their property.
■ (4) The defendant was granted an option for 21 years to purchase any portion of the 587.5 acres retained by the complainants. This option expressly provided that anytime during the 21 years Philsar could demand upon fifteen days written notice that each party select an appraiser who in turn would select a third appraiser to set the value of the property and Philsar would have the unequivocal right to purchase at the price determined by the three appraisers.
Further, the option provided that the exercise of the option to purchase any portion of the 587.5 acres would not terminate its right to purchase any of the remaining property during the 21 year period.
The complainants were required to complete the transaction within fifteen days after the appraisers announced *110the value they had set upon the property. Upon suggestion of the Court solicitors for complainants and defendants agreed to make the time for closing the transaction thirty days instead of fifteen days.
(5) Further, the defendant, Philsar Development Company, was granted an additional option for a period ending 21 years after the death of the complainant, Emma Horton Kittrelle, in which to purchase any of the other Horton lands owned by any of the complainants under the following conditions; namely, that Philsar Development Company would have the refusal of any of the other Horton lands that the complainants wanted to sell at the same price and under the same terms at which complainants or their heirs sought to sell to some third person.
The pleadings indicate that some of the Horton lands lie up on top of the Chickasaw Bluff east of the land sold to the defendant, Philsar Development Company, and were not involved in the first contract and deed. The Phil-sar Development Company made no claim to an option to purchase these lands prior to the settlement announced in open court by solicitor for defendant. It was further announced that the exercise by Philsar to purchase or refuse any one or more of such tracts would not terminate its option; i. e. within 21 years after the death of Emma Horton Kittrelle who is still living.
(6) Aleen Horton Cole agreed to subordinate a $9,000 mortgage which she held against Emma Horton Kittrelle in favor of Philsar Development Company.
Finally the statement of the agreement concluded with the discussion concerning a hunting lease. We copy from the transcript the conclusion of his statement as follows:
*111“Further that the hunting club lease of August 1955 which was partly the subject of the controversy in Clause No. 61804 of the Chancery Court of Shelby County, Tennessee, is recognized by the complainants as being in full force and effect and now assigned to Philsar Development Company and that the complainants now recognize the lessee under said lease to be Philsar Development Company that no default exists thereunder, and that the terms and conditions, including the right of first refusal, as granted for the term of the lease, and any extension thereof, as provided for therein, is recognized as being in force and effect.
“THE COURT: Now, of course, that can only affect this 587.5 acres.
“MR. THOMAS: No, it affects the entire property. The lease covers the full 750 acres.
“THE COURT: Does it?
“MR BEATY: Yes, sir. It — (interrupted)
‘ ‘ THE COURT: I will change it and say it could not affect that property to which title is held by Phil-sar Development Company, because, certainly — (interrupted)
“MR, BEATY: It is a merger.
“THE COURT: (continuing) their right and possession of title as lessee would necessarily merge in the ownership of the property.
“MR. THOMAS: That the controversies between the Complainants and the Defendant, Sam Burns, and the Defendant, Lawrence Bernard Matlock, *112Trustee, have not and are not adjudicáted by this cause of action except as their rights might he affected by the terms of the settlement heretofore stated to the Court, and that the cause of action between the Complainants and the said Defendants, Sam Burns, and the Defendant, Lawrence Bernard Matlock, Trustee, is dismissed without prejudice.
“MR. THOMAS: If Your Honor please, I just want to suggest that the agreement and the decree provide that title to all of that tract of the Horton lands as shown on the survey of B. C. Harwell, with exception of the 500 acres reserved to Aleen Horton Cole and Lawrence Bernard Matlock, and the 87.5 acres lying immediately south thereof be conveyed to Philsar Development Company and that a metes and bounds description of said property will be incorporated in the decree.
“THE COURT: I have no objection to that, and I think further that you had better assure title to the 587 or whatever acreage it might be which lies north of the — (interrupted)
“MR. TAYLOR: Philsar Development Company.
“THE COURT: Philsar Development Company.
“MR. TAYLOR: To be in the two Complainants.
‘ ‘ THE COURT: What is that?
“MR. TAYLOR: To be in the two Complainants. We have no interest in it except that statement.
“THE COURT: I think the decree should show who owns that property myself.
*113“ME. TAYLOE: Well, he had an unrecorded deed that was signed.
‘ ‘ THE COUET: What was that?
“ME. TAYLOE: I think he has an unrecorded deed to accomplish that, but maybe he will want to.
“ME. BEATY: I believe, Mr. Thomas, we had better get a deed. I don’t believe you can vest and divest title. I believe a deed would be better on that.
“THE COUET: I have no object to that, but I think it should be stated in this record who it was agreed by all parties to this cause owns the 587 some odd acres which will lie north of the revamped Phil-sar tract.
“ME. BEATY: I don’t think there is any doubt that everyone here agrees that Aleen Horton Cole and Lawrence Bernard Matlock are to be the owners of that property. At least, my — (interrupted)
“ME. BODGEES: The decree recognizes that fact, or should recognize that fact.
“ME. BEATY: The decree recognizes that fact, but I think a deed from Emma Horton Kittrelle should be given, too. We will pay half the costs.
“ME. THOMAS: That the costs of this cause will be paid, one-half by the complainants and one-half by the Defendant, Philsar Development Company.
“THE COUET: All right, gentlemen.
“ME. BEATY: Mr. Eodgers hasn’t been a party to the lease agreement but I have no objections.
*114“ME. BODGEBS: I have no objections to it, if I understand it properly, and I am just going to wait until they submit the decree, but I believe they have taken care of me in it, as I understand the statement.
“THE COUET: Let this record show further that in this Courtroom at the present time are all the Complainants who have heard that which has been dictated as it was dictated, together with Mr. Thomas representing Philsar Development Company and Mr. Hammond, Mr. Henry Beaty representing all the Complainants, Mr. Eobert L. Taylor likewise associated with Mr. Thomas, representing Phil-sar Development Company; is that correct?
“ME. TAYLOE: Yes, sir.
“THE COUET: All right, you may have to polish this up to some extent but I see no reason at the present time, since the parties are sui juris and I know of no protective rule of law that is being violated by this agreement, and, as I say, I know of no reason why the agreement should not be . incorporated in a decree of the Court and entered as such.
“Is there anything further, gentlemen?
“ME. TAYLOE: No, Your Honor.”
Apparently the complainants were never shown the decree which embodied the agreements as stated by solicitor for the defendant. On the same day that the decree was filed with the Clerk & Master the complainants filed a letter with the secretary of the Chancellor withdrawing their consent to what they term the. “so-called settlement between the Philsar Development Company and ourselves.”
*115The settlement was not reduced to writing at the time it was announced, in open court. The provisions of the agreement are rather complex and far reaching. As I understand the .agreement, after reading it several times, Philsar will have title to 587.5 acres of old bottom land plus title to 545 acres of accretions. In addition it will have the unqualified right to purchase any part of the remaining 587.5 acres of bottom land from time to time and at any time it desires in such amounts as it desires at a price to be determined by three appraisers. Further, as I understand it Philsar has the first right of refusal to purchase all the remaining Horton lands at any time during the life of Emma Horton Kittrelle and during a period of 21 years after her death.
I express no opinion as to whether this was a good settlement or a bad settlement. However, I don’t think that the complainants should be bound by a consent decree which vitally affects their entire inheritance unless the record shows affirmatively that the complainants fully understood and voluntarily agreed to all of the terms of the settlement. I do not think the record affirmatively shows that the complainants fully understood and agreed to all of the terms of the settlement and for that reason the decree should have been set aside.
Although the complainants were sitting in the courtroom while solicitor for defendant made oral explanation of the terms of the settlement and although they had previously indicated to their solicitors of record that they had approved the settlement, yet we must remember that these were colored people and probably not too well versed in business affairs. Further, we must remember that the entire financial situation was at that time con*116siderably muddled and very probably tbe complainants under great stress and worry. They bad already made deed to a tract of land wbicb they thought contained only 500 acres of old bottom land plus accretions when in fact the defendant had received title to 675 acres of old bottom land and had only paid for 500 acres.
The settlement gave the complainants one-half of the 175 excess acres but in turn extended defendant’s option to purchase remaining lands in two respects: First, the defendant received an unqualified option to purchase the 587.5 acres at a price to be determined by appraisers and second, received the first refusal on all of the remaining Horton lands for an unusually long time, namely 21 years after the death of Emma Horton Kittrelle.
I see no legal prejudice that can result to the defendant if the decree is set aside. I think much prejudice may accrue to the complainants if they are held bound to a contract which was not reduced to writing and which they may not have fully understood.
The decree was within the the breast of the Chancellor for a period of 30 days from and after its entry. His Honor the Chancellor could have waived Bule XXII of his Court and sustained the petition to rehear as a motion to set aside the decree or he could have set the consent decree aside on his own motion. Gibson’s Suits in Chancery, 5th Edition, Section 614. I feel that he should have done one or the other and would therefore sustain the appeal and remand the case accordingly.