February 17, 1994
DIANE BROOK OGLE, PLAINTIFF-APPELLEE
ROCKY JAMES OGLE AND JAMES VON OGLE AND WIFE, MARGIE M. OGLE, DEFENDANTS-APPELLANTS
CIRCUIT COURT. SEVIER COUNTY. HON. W. DALE YOUNG, JUDGE
Sanders, Franks, McMurray
The opinion of the court was delivered by: Sanders
The pivotal issue on this appeal is whether or not the court was in error in holding the real property in dispute in this litigation "is equitably owned by Rocky James Ogle and Diane Brooks Ogle, as marital property." We hold it was not error, and affirm for the reasons hereinafter stated.
The Plaintiff-Appellee, Diane Brook Ogle, (Diane) and Defendant-Appellant Rocky James Ogle (Rocky) were married in October, 1988. In February, 1992, Diane filed suit against Rocky for divorce on grounds of inappropriate marital conduct. She asked for a divorce and an equitable division of marital property. By amendment, she also made James Von Ogle and wife, Marjorie Ogle (the Ogles) Defendants to the complaint and, as pertinent here, alleged: "Plaintiff further avers that she and her husband purchased real property from the defendants, James Von Ogle and wife, Marjorie Ogle, by land contract dated January 1, 1989, for $40,000.00, payable at $400.00 per month with balance of $38,501.00 as of January 1, 1992, a copy of which is attached as Exhibit A to this Complaint. Said land is situated in the Third (3rd) Civil District of Sevier County, Tennessee, which is titled in the names of the defendants, James Von Ogle and Marjorie Ogle, and being held in trust for the plaintiff and defendant. Said real property is more particularly described in Warranty Deed of record in Warranty Deed Book 254, page 458, in the Register's Office of Sevier County, Tennessee. A copy of said deed is attached as Exhibit B to this Complaint. That upon the hearing of this cause a fair and equitable division of same be made by this Honorable Court." Diane also attached a copy of a document written by Mrs. Ogle, which states as follows: Jan 1st 1989. (We have built and paid for a house for Rocky and wife Diane to live.) It is our will and desire that in the event of our deaths - should we both die simultaneously - we want it understood that our only son Rocky James Ogle should have the new house on Shields View Drive Lot 3 free and clear (Otherwise He pays $400.00 per month for 10 year.
"Husband /s/ James Von Ogle
"Wife /s/ Margie M. Ogle
/s/ "Woody Brackins
/s/ "Aileen Ogle
"Notary Public 12-20-89
"The said lot - appraised at $12,000 will be deeded over when the ten years of payments are complete.
As of Nov. 15, 1989 Rocky and Diane Ogle have paid $4,540.00 on the House."
The Ogles, for answer, admitted Diane and Rocky had lived in the residence and paid $400 per month since January, 1989, but said "this is only to be construed and inferred by defendants as rent." They also said the document written by Mrs. Ogle, which was dated January 1, 1989, was not signed by James Von Ogle. They denied they held the property in trust for Diane and Rocky or that it was their marital property.
Upon the trial of the case, the court granted a divorce and made a division of the marital property. As pertinent here, the decree provided:
"In keeping with the Court's Memorandum, the Court finds as follows:
"1. The real property in dispute is equitably owned by Rocky James Ogle and Diane Brook Ogle, as marital property.
"2. That said real property in dispute is awarded to the defendant, Rocky James Ogle. That the plaintiff, Diane Brook Ogle, will quit claim her entire interest in said property to the defendant upon his payment of the sum of $16,000.00, $10,800.00 of which constitutes one-half of the increase in value of said real property and $5,200.00 of which constitutes mortgage payments made by Diane Ogle to Marjorie and James Von Ogle, during the separation.
"3. The plaintiff, Diane Brook Ogle, will vacate said real property within fourteen (14) days of her receipt of the said $16,000.00 and the defendant, Rocky James Ogle, will be responsible for all mortgage payments to be made to Marjorie and James Von Ogle, beginning with the May, 1993, mortgage payment."
The court also awarded attorney's fees to Diane's attorney and gave a lien on the real estate to secure payment of the fee.
Rocky did not appeal and the decree as to him has become final. The Ogles have appealed, saying the court was in error. They have presented three separate issues for review, but the controlling issue is whether or not the court erred in holding Diane and Rocky are the equitable owners of the property. The Conclusionary result of this holding is the Ogles did contract with Diane and Rocky to sell them the property.
"A contract is simply an agreement between two parties, based on adequate consideration, to do or not to do a particular thing." Bill Walker & Associates v. Parrish, 770 S.W.2d 764, 771 (Tenn.App.1989) (Citation omitted.)
If the Ogles sold the realty to Rocky and Diane, it would be marital property under T.C.A. § 36-4-121(b)(1)(A) and (B) (1991). As pertinent here, it states:
(b) For purposes of this chapter:
(1)(A) "Marital property" means all real and personal property, both tangible and intangible, acquired by either or both spouses during the course of the marriage up to the date of the final divorce hearing and owned by either or both spouses as of the date of the filing of a complaint for divorce, except in the case of fraudulent conveyance in anticipation of filing, and including any property to which a right was acquired up to the date of the final divorce hearing, and valued as of a date as near as reasonably possible to the final divorce hearing date.
(B) "Marital property" includes income from, and any increase in value during the marriage, . . . .
To prove the Ogles intended to sell the house and lot to her and Rocky, Diane has relied primarily on the handwritten document by Marjorie Ogle, a copy of which was attached to the complaint, an amortization schedule, a homeowners insurance policy, her checks marked "house payment," and oral testimony.
Marjorie Ogle admittedly wrote all of the document attached to the complaint except for the signatures of Woody Brackins and Aileen Ogle and the words immediately below those signatures. James and Marjorie Ogle said James did not sign the document, although it purports to bear his signature.
Diane argued this document shows Marjorie and James Ogle understood the $400 monthly checks to be house payments, not rent. She relied particularly on the statements that the payments will continue for 10 years, at which time the house would be deeded over to Rocky and her. Marjorie Ogle could not explain why she drafted the document as she did if she did not intend to sell the house and lot.
Another important document in evidence is a "Mortgage Amortization Table" with Rocky Ogle's name at the top. It broke down monthly payments of $400 into the amount of principal and the amount of interest included in each payment. One line of the table listed the amount of debt remaining after each payment and another showed total interest paid to date. The parties argued over the origin, use, and significance of the schedule, but it appears Marjorie Ogle obtained it from their accountant for tax purposes. It appears Marjorie marked through each payment listed on the table when she received a check from Rocky or Diane. Diane argues on appeal that because rent would not be broken down into principle and interest payments, as mortgage payments would be, the schedule proves the Ogles intended to sell the property, not rent it. The Defendants said they obtained the schedule because they had considered selling the property before Diane filed for divorce. Also, the homeowners insurance policy covering the disputed house lists Rocky Ogle as the insured and James Ogle as an additional insured.
Other documentary evidence includes approximately 50 checks ranging from October, 1989, through February, 1993, which, with few exceptions, were each for $400, payable to "James Von Ogle" and marked "[name of month] house payment." Diane argued the Ogles indicated their intent to sell the house by failing to protest this notation on the checks.
The oral testimony on the issue of the intent of the parties was in irreconcilable conflict. The chancellor, in his memorandum opinion, did not comment on the conflicting testimony. We find, however, the evidence very strongly supports the findings of the trial court.
The trial court did not address the issue of the statute of frauds in his memorandum opinion but there is also another compelling reason why it is not a viable defense in the case at bar. Although James Ogle denied the signature on the document attached to the complaint was his signature, he did endorse "house payment" checks issued to him by Diane. The memorandum required by the statute of frauds may be two or more papers but only one signed by the party to be charged. See Price v. Tennessee Products & Chemical Corporation, 53 Tenn.App. 624, 385 S.W.2d 301 (1964); Batey v. H. D. Overmeyer Warehouse Company, 60 Tenn. App. 310, 446 S.W.2d 686 (Tenn.App.1969), and cases cited therein.
Either Marjorie or James Ogle endorsed each of Diane's "house payment" checks. James's signature on those checks combined with Marjorie's signature on both the document attached to the complaint and the checks are sufficient to satisfy the requirements of the statute of frauds under Batey v. D. H. Overmeyer Warehouse Company, 60 Tenn. App. 310, 446 S.W.2d 686 (Tenn.App.1969). In Batey, this court held an unsigned lease and a subsequent endorsed check "are sufficient written memoranda to complete an agreement which complies with the Statute of Frauds." Id. at 693. The evidence shows both of the writings "relate to one general transaction" See Id. at 692.
Even if the Ogles's agreement did not meet the requirements of the statute of frauds, it is not void, it is only voidable. See Sneed v. Bradley, 36 Tenn. 301 (1856); 73 Am.Jur.2d Statute of Frauds § 513 (1974). Either party may rely on the statute in defense of specific performance or for damages. 73 Am.Jur.2d Statute of Frauds, § 513, pp. 517-18. There are, however, exceptions to the rule, and one of the leading exceptions, particularly in other jurisdictions, is part performance. In this jurisdiction an oral contract, otherwise unenforceable, can be the basis of an action if one of the parties has performed and the subject matter of the contract is personalty, but not if it is realty. See Trew v. Ogle, 767 S.W.2d 662 (Tenn.App.1988). Tennessee is one of four states which refuse to recognize part performance of contracts relating to real estate. See Goodloe v. Goodloe, 116 Tenn. 252, 92 S.W. 767 (1906); A Corbin, Corbin on Contracts § 443 (one volume Ed.1952); 101 A.L.R. 923, 944-48 (1936). Equitable estoppel, however, has been used in this jurisdiction to mitigate the harshness of that rule where to enforce the statute of frauds would "make it an instrument of hardship and oppression, verging on actual fraud." Baliles v. City Services, 578 S.W.2d 621, 624 (Tenn.1979); see also Disney v. Henry, 656 S.W.2d 859 (Tenn.App.1983) (specific performance of an agreement to sell property under the statute of frauds ordered on an equitable estoppel theory).
In the case of GRW Enterprises, Inc. v. Davis, 797 S.W.2d 606, 611 (Tenn.App.1990) the court, in addressing the issue of equitable estoppel in statute of fraud cases, said:
While the statute should be strictly adhered to and construed to accomplish its purpose, . . . it should not be used to avoid contracts or to "grant a privilege to a person to refuse to perform what he has agreed to do." . . . . The courts have accordingly recognized that equitable estoppel is an exception to the statute of frauds, and that equitable estoppel can be used to relieve a party from the statute of frauds where enforcement would make the statute an instrument of hardship and oppression." (Citations omitted.)
From the record in the case at bar, one can reach but one Conclusion - the Ogles are trying to avoid their agreement to convey the property only because Diane is divorcing Rocky. To enforce the statute of frauds in the case at bar "would make the statute an instrument of hardship and oppression."
The issues are found in favor of the Appellee. The judgment of the trial court is affirmed. The cost of the appeal is taxed to the Appellants and the case is remanded to the trial court for any further necessary proceedings.
Clifford E. Sanders, Sr.J.
Herschel P. Franks, J.
Don T. McMurray, J.
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