                   IN THE COURT OF APPEALS OF TENNESSEE
                               AT NASHVILLE
                                 Assigned on Briefs July 19, 2000

        DONNA BROWN MARTIN v. MARY LYNN COLEMAN, ET AL.

                     Appeal from the Chancery Court for Humphreys County
                          No. 24-068 Allen W. Wallace, Chancellor


                        No. M1999-02238-COA-R3-CV - Filed June 18, 2001


This is a dispute over real property which was the subject of an installment land sales contract
between the parties and over the proceeds of an insurance policy after the dwelling on the property
burned. The trial court ordered that the title to the property be divested from the Seller and be vested
in the Buyer and that the remaining proceeds of the insurance policy be awarded to Buyer after all
overdue payments of taxes and insurance and the incurred clean up costs were deducted. The Seller
appeals on the grounds that the evidence was contrary to the judgment and that the plaintiff had
breached the contract and is entitled to neither the property nor the insurance proceeds. For the
reasons below, we affirm the judgment as modified.

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

PATRICIA J. COTTRELL , J., delivered the opinion of the court, in which BEN H. CANTRELL , P.J., M.S.,
and WILLIAM C. KOCH , JR., J., joined.

David D. Wolfe, Dickson, Tennessee, for the appellant, Mary Lynn Coleman, et al.

J. P. Bradley, Waverly, Tennessee, for the appellee, Donna Brown Martin.

                                                  OPINION

       This appeal involves an installment land sales contract entered into between the parties in
1988.1 Ms. Coleman (“Seller”) bought the property in question in the spring of 1988 and borrowed
$11,000 from a credit union to finance the purchase. However, shortly thereafter she agreed to sell



        1
          Originally, J. R. Coleman, M ary Lynn Colem an’s husband, was mad e a defendant to this suit, however,
plaintiff did not pr oceed a gainst him at trial due to evid ence and belief that he d id not ha ve an ow nership
interest in the property in question which was titled solely in Mrs. Coleman’s name.

                                                       1
the property to Ms. Martin (“Buyer”) under an installment land sales contract. The contract provides
in pertinent part:

       The purchase price of said property shall be $15,500.00 (fifteen thousand five
       hundred dollars) and to be paid as follows:

       $500.00 down payment to be paid before the 1st day of August, 1988, and 120
       monthly payments of $215.21 to be paid the 1st of each month, 1st payment being
       due August 1, 1988.

       After receipt of last payment SELLER agrees to convey the subject property to
       BUYERS by good and valid warranty deed, subject only to any restrictive covenants
       and easements of record, zoning ordinances or regulations affecting same.

       If any payment is not paid on or before the 10th of the month in which it is due, an
       additional 10 percent of said payment must be paid.
                                             *****
       BUYERS agree to purchase a fire insurance policy on said property in an amount to
       the satisfaction of the SELLER.
                                             *****
       BUYERS agree to make all necessary repairs to the property after the signing of this
       agreement and continue to keep the property in a good state of repair until said
       contract is fulfilled.

       The contract is non-transferrable without written consent from the SELLER.

       If during the existence of this agreement, BUYERS should be more than thirty (30)
       days late in making said monthly payment, the SELLER shall have the right to
       declare this agreement null and void and shall send BUYERS notice to vacate the
       premises within ten (10) days of such notice. In this event, the SELLER shall retain
       any and all sums paid by BUYERS as liquidated damages or as rental for the use of
       the premises during the period of occupancy by the BUYERS or his lessees.
                                              *****
       BUYERS shall also pay for property taxes on an annual basis for subject property.

        The contract was signed by Donna Brown Martin and Mary Coleman on July 29, 1988 in
front of a notary public. Buyer took possession immediately. The parties reviewed the terms of the
contract and even discussed the provisions prior to the contract being signed. There is a dispute
between the parties as to who drafted the contract. Buyer testified that she did not know where the
contract came from and assumed that Seller had it drafted because she presented it to her for her final
approval before signing. On the other hand, Seller testified that she had a friend type the contract
from a copy of a similar contract which Buyer provided and had previously signed in another deal.



                                                  2
        One of the terms discussed prior to signature was the issue of insurance. Buyer testified that
she stated she was concerned that because the property was not in her name, she would not be able
to obtain insurance. Therefore, Seller agreed that Buyer would simply reimburse her for the
premium payments because she had to keep insurance on the property according to the mortgage
lender. Seller does not directly dispute this but states, “I told her that I had to have insurance on the
house because of borrowing money against it, that I had to have it for what I owed against it and that
she needed to get her own insurance, renters insurance, several times.” Additionally, Seller admitted
to accepting reimbursement payments from Buyer for the premiums she paid on the insurance policy
she held in her name. She even kept a running ledger of what the annual taxes and insurance
premiums were and deducted payments made by Buyer.

        The ledger does not begin until 1990 and shows that Buyer reimbursed Seller for the
insurance policy premiums and the taxes periodically over time. Seller admitted that the ledger did
not reflect a payment made in March of 1993 for $439 and that there were calculation errors. The
principal payment under the installment note was current on the property, but Seller testified that
over the early 1990's, the payments for insurance and taxes were not made in full and were late.

         Buyer lived alone on the property until the early 1990's. After that time, she moved out and
allowed her sisters and mother to move onto the property. However, Buyer testified that while she
was not residing on the property full time, she still maintained the property with her belongings, and
it was still a home place for her and her family whenever someone needed a place to live. She
testified that she visited the property and considered it home. Even though she was not living there
full time, she contributed to the payments and never considered the property nor the contract to be
assigned or transferred to anyone else. Buyer fully expected that when all the payments were made
under the contract, she would obtain title to the property. In fact, the parties discussed other people
living there and Seller responded, “She mentioned her sister moving in and I said that’s fine. I just
need the money to make the monthly payment at the credit union.”

       The building located on the real property burned on October 5, 1995 and Seller collected
$11,000 in insurance proceeds. The proceeds paid off the remaining debt on Seller’s loan and she
paid $2,500 to have the debris cleaned up from the fire.

        On October 24, 1995, Seller refunded Buyer’s October payment paid by money order.
Shortly thereafter, Buyer demanded title to the property, and this suit ensued. After a bench trial,
the judge found that Seller had applied any overpayments in rent to the taxes and insurance due and
that these were current as of March 3, 1993, but not paid after that date. Therefore, at the time of
the fire, there was an unpaid balance of $810 for taxes and insurance. Finally, based on the
calculation that $5,899 was left owed under the sales contract and deductions for clean up and
overdue taxes and insurance, the court awarded a judgment against Seller for the remaining $1,791
of the insurance proceeds to Buyer and awarded the title to the property to Buyer.

        Seller appeals the judgment on the grounds that Buyer breached the contract by allowing
others to live on the property, thereby attempting to assign or transfer the contract without her


                                                   3
consent, and by being delinquent in payment of property taxes and insurance as required by the terms
of the contract. For the reasons herein, we affirm the trial court’s judgment. However, we modify
the calculation of damages.

                                                  I.

         This is an appeal from a bench trial and accordingly, our standard of review is governed by
Tenn. R. App. P. 13(d). Our review of the record is de novo with the presumption that the findings
of fact are correct “unless the preponderance of the evidence is otherwise.” Tenn. R. App. P. 13(d).
We must also give great weight to such factual findings by the trial court that rest on determinations
of credibility. Randolph v. Randolph, 937 S.W.2d 815, 819 (Tenn. 1996). However, no
presumption of correctness attaches to the trial court’s conclusions of law. Tenn. R. App. P. 13(d);
Hansel v. Hansel, 939 S.W.2d 110, 111 (Tenn. Ct. App.1996).

                                                 II.

        Tennessee courts have addressed the rights of the parties in similar fact situations,
particularly in King v. Dunlap, 945 S.W.2d 736 (Tenn. Ct. App. 1996), which relies heavily on and
quotes extensively from Parker v. Tennessee Farmers Mut. Ins. Co., No. 141, 1988 WL 138923
(Tenn. Ct. App. Dec. 30, 1988). In King, the sellers, the Dunlaps, entered into a contract to sell to
Mr. King a lot and house for $6,500 to be paid in monthly installments including interest and an
additional monthly amount to pay for insurance and taxes. Upon payment of the purchase price, the
sellers would convey the property by warranty deed to Mr. King. The sellers purchased an insurance
policy. Mr. King moved onto the property, made some repairs, and made mortgage payments with
irregularity. Two years after the contract was signed, the building was destroyed by fire. The
insurance company denied that Mr. King had any insurable interest in the property and that the extent
of recovery, if any, to the Dunlaps was the balance owed them by King, not the value of the property.
After a thorough examination of authorities, this court held:

       Also, as indicated by the foregoing authorities, King, upon entering into the sales
       agreement with Dunlaps and taking possession of the property, became the equitable
       owner of it. Consequently, via the doctrine of equitable conversion, the risk of loss
       had accrued to King at the time the fire occurred. Consequently, the proper result
       would be that the Dunlaps, though entitled to full recovery from Mid-Century (the
       insurance company), must hold those proceeds in excess of their interest, i.e., the
       unpaid balance of the purchase price, in trust for King.

King, 945 S.W.2d at 744 (citations omitted).

       In a more recent case, this court has had occasion to focus on the rights between the buyer
and the seller in a similar fact situation, expanding on King:




                                                  4
        King and Parker, as well as the cases discussed in those opinions, deal primarily with
        the question of whether an insurance company is required to pay the full amount of
        the policy or whether its obligation is limited to the seller’s beneficial interest in the
        property, i.e., the unpaid balance of the purchase price. In the instant case, the
        insurance company has already paid the full amount of the policy to Seller, and the
        question at issue is whether the proceeds received by Seller must be applied towards
        the purchase price.

Hillard v. Franklin, 41 S.W.3d 106, 115 (Tenn. Ct. App. 2000).

        In Hillard, the parties entered into a contract for the sale of real property for a total price of
$80,000, which included a down payment of $10,000 at closing and equal monthly installments
thereafter. The actual sale was not closed, but buyers took possession and had some work done on
the property. The main house on the property was destroyed by fire two months after the contract
was executed, and the seller recovered from her insurance company an amount that included $35,000
for the loss of the dwelling. The sale did not close, and the buyers brought suit for specific
enforcement of the contract and reduction of the sales price by the $35,000 the seller had received
from the insurance company. This court affirmed the trial court’s judgment for the buyers on both
issues, and it is the court’s resolution of the second issue that is relevant to our discussion herein.

        This court in Hillard quoted from Parker the general rule that:

        where the insured vendor has sold the property and vendee has gone into possession
        and paid a portion of the purchase price, but title is still held by the insured, as
        between the insured and the insurer the insured is the owner of both the legal and
        equitable titles to the property and entitled to recover the full amount of the policy.
        However, as between the vendor and the vendee, the insured takes the proceeds of
        insurance which exceed the amount owed to the vendor, as trustee for the vendee.

Hillard, 41 S.W.3d at 114 (quoting Parker, 1988 WL 138923 at *1).

        Relying upon the authority cited in King and Parker as dicta as well as other authority, this
court held that the proceeds collected by the seller must be applied to the purchase price in buyer’s
favor. Id. at 116. Specifically, we concluded “a seller must apply insurance proceeds to the purchase
price, at least where the risk of loss falls on the purchaser. The risk of loss during the period between
execution of a contract from the conveyance of real property and the closing generally falls on the
purchaser.” Id. at 115 (citations omitted).

        Hillard dealt with a situation where no part of the purchase price had been paid and there was
an executory contract to convey the property. In the case before us, Buyer had been in possession
of the property and making payments on it for over seven years. Therefore, although we consider
Hillard helpful to our analysis, its main import is its reinforcement of the principles of King v.



                                                    5
Dunlap as those principles apply to the facts before us: once the insurance proceeds have been paid,
must they be applied to the purchase price.

       Tennessee is one of the jurisdictions which follows the equitable rule “that where the
building which was the subject of conveyance is destroyed or damaged, the vendor must apply the
proceeds upon the purchase price and account for the balance to the purchaser.” Hillard, 41 S.W.3d
at 115; King, 945 S.W.2d at 743; Parker, 1988 WL 138923 at *4 (quoting 5A APPLEMAN,
INSURANCE LAW AND PRACTICE , 212-15 (1970)).

        In this case, the contract provided that Buyer was to maintain insurance, confirming the risk
of loss would fall on her. The parties agreed, as their course of conduct shows, that Buyer would
reimburse Seller for insurance premiums. Thus, the continued acceptance of the reimbursement of
payment for the insurance premiums supports the trial court’s conclusion that the parties agreed
Seller would maintain the policy and Buyer would pay the premiums. Therefore, any proceeds from
the policy were held in trust by Seller for Buyer’s benefit, and may, in the first instance be applied
to the remaining balance owed to Seller under the contract. Any excess belongs to Buyer, absent
other obligations owed to Seller by Buyer. If the insurance proceeds pay off the balance of the loan,
the Buyer is entitled to conveyance of the real property under the contract.

        The trial court applied these general principles, ordering the insurance proceeds to be applied
to the loan balance, ordering conveyance of the real property to Buyer, and ordering the excess
insurance proceeds paid to Buyer, after deduction of other obligations or expenses the court found
due to Seller.

                                                       III.

        Seller acknowledges the King v. Dunlap case, but argues its principles should not be applied
here. She contends that Buyer is not entitled to the insurance proceeds because Buyer breached the
installment contract (1) by not making timely payments on the taxes, as required in the contract2 and
(2) by allowing other persons to live on the property and, in effect, assigning the contract to someone
else. The consequence of these breaches, Seller argues, is that Buyer cannot avail herself of the
equitable theories of unjust enrichment and equitable conversion.




        2
          Seller asserts that the alleged oral modification of the contract regarding insurance coverage on the
property, found by the court based on the partie s’ course o f condu ct, was no t valid and, therefore, Buyer has
no interest in the insurance proceeds. Consequently, Seller is restrained from arguing that Buyer’s arrearage
in reimbursement of insurance premiums was also a breach of the installment sales co ntract. She do es, however,
make the argument that if there were an oral agre ement, Buyer breached it since the trial court found no
reimbursement occurred after March 1993. She also argues that Buyer breached the written contract by failing
to maintain insurance as the contract required. We agree with the trial court’s conclusion that Buyer fulfilled
this provision by agreeing with Se ller for Selle r to main tain the co verage s he alrea dy had and Bu yer wo uld
reimburse her for the premium s.

                                                        6
       First, we disagree with Seller’s theory that her obligation to perform under the contract was
eliminated by Buyer’s breach due to the late payments of taxes. The contract required Buyer to “ pay
for property taxes on an annual basis for subject property.” While the tax and insurance payments
were in arrears, the payments on the sales contract were up to date at the time of the fire. The
contract provided:

       If during the existence of this agreement, BUYERS should be more than thirty (30)
       days late in making said monthly payment, the SELLER shall have the right to
       declare this agreement null and void and shall send BUYERS notice to vacate the
       premises within ten (10) days of such notice. In this event, the SELLER shall retain
       any and all sums paid by BUYERS as liquidated damages or as rental for the use of
       the premises during the period of occupancy by the BUYERS or his lessees.

        It is undisputed that Seller never provided any notice that the contract was being declared null
and void, Buyer was never asked to vacate the property, nor was she informed that any future
payments would be treated as rent, rather than installment payments under the contract. In fact,
Seller testified that payments for rent, taxes and insurance were late or not paid, but also testified:

        Q: In regards to this contract, if they did not comply with paying on a timely basis,
        what did you have the right to do at that point in time?
        A: I could ask them to move, to leave.
        Q: And did you at any point ever ask them to move?
        A: No, I never did.
                                                 *****
        Q: As far as the contract, was there a provision if they were late in paying the rent
        that a late charge would be added to the payment?
        A: Yes.
        Q: Did you ever add a late charge?
        A: Not that I remember.
                                                 *****
        Q: By the contract if they didn’t pay it, you would have a right to cut them off in ten
        days and say the contract’s null and void, why didn’t you do that?
        A: I’m not that type person to do that.

        Even if the tax payments, due on an annual basis, could be considered “monthly payments”
subject to the Seller’s right to declare the contract void, she never took that step.

       Further, it is well settled that continued acceptance of late or non payment without notice that
such will no longer be tolerated constitutes a waiver of a right to forfeiture of a contract. Lively v.
Drake, 629 S.W.2d 900, 904 (Tenn. 1982); American Nat’l Ins. Co. v. Davidson, 166 Tenn. 13, 57
S.W.2d 788, 789-91 (1933); Webb v. First Nat’l Bank and Trust Co., No. 74, 1990 WL 19643 at *1-
2 (Tenn. Ct. App. Mar. 6, 1990) (no Tenn. R. App. P.11 application filed); Dacus v. Weaver, No. 29,
1988 WL 138918 at *2 (Tenn. Ct. App. Dec. 28, 1988) (no Tenn. R. App. P. 11 application filed).


                                                   7
For example, in Lively, our Supreme Court held that where late payments had been accepted over
a period of two years without protest or complaint, the other party must be given notice to cure the
arrears and that no further late payments would be accepted before foreclosure would be permitted.
629 S.W.2d at 904.

        We cannot conclude that the contract was unenforceable due to late payments of tax
reimbursements. Seller never provided any notice to Buyer that the established course of dealings
between the parties was unacceptable, no notice was given that the late payments were unacceptable,
Buyer was never provided notice that the contract would be deemed voided, Seller never gave Buyer
ten days notice to vacate, nor did Seller give any other form of notice that late payments would no
longer be acceptable. The fact that Buyer was current on the monthly purchase price payments and
had made over seventy percent of the total payments under the contract further militates against any
interpretation that Seller was relieved of her obligations under the contract. She was entitled to
payment of the unpaid amounts, and the court properly ordered them paid out of the insurance
proceeds.

        Seller’s other argument is that the contract prohibited its assignment without Seller’s
approval and that Buyer breached this provision. Seller asserts that the contract includes a provision
allowing conversion of the sales arrangement to a rental arrangement upon any breach or
termination.3 We find no such provision in the contract. The provision to which Seller refers allows
Seller to declare the contract void if Buyer is more than thirty days late in making a monthly
payment. When that provision is revoked,

        In this event [notice of voiding the agreement], the SELLER shall retain any and all
        sums paid by BUYERS as liquidated damages or as rental for the use of the premises
        during the period of occupancy by the BUYERS or his lessees.

       We read this language as allowing Seller to retain prior monthly payments if she declared the
contract void because of late payment. Further, we do not find any language in the contract, nor any
evidence in the record, to support the conclusion that Buyer was not allowed to have someone
besides herself live in the home. The contract only provided that she could not assign the contract
to someone else without Seller’s consent. The record reveals testimony by both parties that they did
not consider that the contract had been “assigned” to any one other than Buyer.

        Additionally, the contract provision quoted above leads us to believe the parties contemplated
that the property could be subleased during the installment period. Clearly, the language provides
that occupancy may be by Buyer or her lessees. Therefore, there could be no breach of the contract
by the mere fact that persons other than Buyer occupied the premises. Additionally, the record
reflects Seller was aware Buyer’s sister was living on the property and did not object; therefore the
Seller acquiesced in the arrangement.


        3
          Seller asserts that when Buyer’s sister moved into the house in 1990, she considered the contract for
sale to be terminated and the subseq uent holding by Buyer’s family m embers to be a rental arrangem ent.

                                                      8
       Finally, Seller asserts that the trial judge improperly relied on the doctrine of “unjust
enrichment” in its reasoning. Specifically, she claims that there is no unjust benefit she received
from the insurance proceeds.

        Unjust enrichment is a quasi-contractual theory or is a contract implied-in-law in
        which a court may impose a contractual obligation where one does not exist. Courts
        will impose a contractual obligation under an unjust enrichment theory when: (1)
        there is no contract between the parties or a contract has become unenforceable or
        invalid; and (2) the defendant will be unjustly enriched absent a quasi-contractual
        obligation.

Whitehaven Comm. Baptist Church v. Holloway, 973 S.W.2d 592, 596 (Tenn. 1998) (citing
Paschall’s, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150, 154-55 (1966)). Moreover, under the
theory of unjust enrichment, “liability can be created where one person receives a benefit at the
expense of another and it is unjust or inequitable for him to retain this benefit.” Newton v. Cox, 954
S.W.2d 746, 747 (Tenn. Ct. App. 1997) (quoting Jaffe v. Bolton, 817 S.W.2d 19, 26 (Tenn. Ct. App.
1991)).

         In this case, the contract required that Buyer maintain fire insurance on the property and the
evidence shows the parties orally agreed that Buyer would reimburse Seller for the premiums on her
existing policy. Seller collected and credited these payments. Therefore, she was, in essence,
holding the policy in trust for Buyer. While both an oral and written contract existed in this case,
if Seller were allowed to keep the insurance proceeds, as well as the real property, she would receive
a benefit for which she did not pay, and would thereby be unjustly enriched. While we do not think
it necessary to rely on the doctrine of unjust enrichment, because the authorities discussed earlier
provide the same result on the basis of other equitable principles, we do not find that the trial court
erred in considering that doctrine as well.

                                                      IV.

       The trial court applied the principles set out earlier regarding distribution of the insurance
proceeds: payment of the remaining balance on the loan to Seller, with remainder to Buyer. It also
granted Seller payment of unpaid taxes and insurance payments due from Buyer and reimbursement
for expenses Seller incurred in cleaning up the property after the fire. We agree this was the proper
method of allocating the proceeds.4 However, the actual calculation of the amount of payments



        4
          Buyer apparently disagrees with the calculations and asks this court “to modify wha t the Plaintiff
should receive from the insurance proceeds that was above the purchase price.” No specific suggestion is made
as to an appropriate modification, but we interpret this statement as suggesting that the trial court should not
have deducted the insurance and tax payments due from Buyer to Seller and the cleanup costs. However, Buyer
has not specifically raised those deductions as an issue on appeal or provided any authority or argument
regarding their propriety. In any event, we find no error in the court’s decision to award those reimbursemen ts
to Seller o ut of the in surance proceed s otherw ise due B uyer.

                                                       9
remaining on the loan is more problematic. In making that calculation the trial court accepted
testimony from a question asked by Buyer’s counsel to Seller:

        Q: My question is: Do you know what Donna owed you when the house burned and
        do you know what you owed the credit union when the house burned, two different
        figures, do you know what they are?
        A: I just paid the credit union what they said I owed them. I never figured Donna’s.
        I guess could have figured it up in monthly payments.
                                                *****
        Q: For our calculation purposes, we could start at August 1, 1988, and figure all the
        months until October of 1995, or September, cutoff at October, and that would be
        how much she’s paid you; is that right?
        A: Correct.
        Q: And then whatever’s left owing is what was left out of that?
        A: I’m confused, but I think so.
        Q: Well, I calculated it up and she lacked 56 months paying you off when the fire
        happened.
        A: If you say so. I haven’t figured it up.
        Q: That’s just my calculation. Somebody else needs to do it too.

        As the initial series of questions indicates, there appears to have been some confusion
regarding the amount Seller still owed the credit union on the mortgage and the amount Buyer owed
Seller under the installment sales contract. In other testimony Seller states she paid off the mortgage
on the property with $6,700 of the proceeds from the insurance policy. The only relevant payoff
figure, however, is the amount owed by Buyer to Seller. The law is that Buyer is entitled to have the
insurance proceeds applied toward payment of her loan to Seller.

        The judge also accepted an amortization schedule which was introduced through testimony
of Seller. She testified that her ex-husband had run the schedule off some time prior in response to
a question by Buyer’s sister as to the payoff amount on the loan.5 The amortization schedule is for
a loan amount of $12,591.48 at 12% interest based on a payment of $215.64 for 88 months. There
is no testimony in the record as to what the numbers represent. The findings and ruling of the court
show that the judge accepted the statement that 56 months were left owed under the contract.
However, using the amortization table, the trial court apparently used the remaining principal balance
applicable after 56 payments had been made, rather than 56 payments remaining, and held that
amount, $5,899, was what Seller was owed under the loan.

        We agree with the methodology employed by the trial court. Seller argues that she was
entitled to an amount calculated by the number of months remaining on the contract multiplied by


        5
          The trial court indicated it was using “Defendant’s figures” to calculate the payoff, and Seller disputes
that the figures used b y the court were her figures. Because of our resolution of the issue of calculation of the
loan’s payoff, Seller’s arguments in this regard are moot.

                                                        10
the monthly payment amount of $215.21, a figure she asserts would be greater than the total amount
of the policy proceeds. However, the contract states, “In the event that the BUYERS wish to pay the
entire indebtedness off early they may do so depending upon Lakeside Employees Credit Union.”
Although we are not certain what the last clause was intended to mean, it is clear that the parties
anticipated that Buyer could pay off the loan prior to its ten year expiration. Although Seller was
entitled to the benefit of the bargain she made, selling the property for $4,000 more than she paid or
financed to buy it and receiving 12% interest as long as the balance of the loan was unpaid, she was
not entitled to 12% interest beyond the date Buyer paid the principal indebtedness.

         The parties did not specify how the payoff amount would be computed, and resort to an
amortization table is the usual and accepted method of making such a determination. However, the
table used by the trial court was based on a principal amount and duration that do not match the
terms stated in the contract between the parties. Therefore, we find that this amortization schedule
is irrelevant to calculation of the payoff amount in this case.

        There is no evidence in the record of an amortization schedule for $15,000 for 120 months
at 12% interest. However, we are able to take judicial notice under Tenn. R. Evid. 201 of an
amortization schedule based on these terms. Rule 201 states “[a] judicially noticed fact must be one
not subject to reasonable dispute, in that it is either (1) generally known within the territorial
jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources
whose accuracy cannot be reasonably questioned.” “While a court can take judicial notice of a
mathematical computation that is understandable to a layman . . . it cannot judicially notice a
complex mathematical formula . . . in the absence of ‘sources whose accuracy cannot reasonably be
questioned.’” Corbett v. Corbett, No. 03A01-9601-CH-00008, 1996 WL 480741 at *4 (Tenn. Ct.
App. Aug. 26, 1996) (no Tenn. R. App. P. 11 application filed) (quoting Tenn. R. Evid. 201(b)). The
standard and readily available and accepted mathematical calculation of an amortization schedule
may be judicially noticed. Therefore, we will use an amortization schedule for $15,000 at 12%
interest to be paid in 120 months.6

       The sales contract called for 120 monthly payments of $215.21. The first payment was made
in August 1988, and the monthly payments were current as of September 1995. By our calculations,
that equates to 86 payments having been made by Buyer prior to the fire. Therefore, only 34
payments, of the 120 contemplated by the contract, remained. Using the appropriate amortization
schedule, after 86 payments are made, the remaining balance of the loan is $6,175.16. This is the
amount Buyer owed Seller for the property at the time of the fire and is the amount properly credited
to Buyer’s principal balance from the insurance proceeds and awarded to Seller.




        6
          W e obtained a reliable and readily accessible amortization schedule from an amortization calculator
located at http://www.townandco untryfinance.com/amort.htm and used the number of months of the contract,
120, at 12% interest for a loan amount of $15,000 . Those facts produce a monthly payment of $215.22, and the
contract herein provided for monthly payments of $215.21

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       We agree that the amount of delinquent payments due from Buyer to reimburse Seller for
taxes and insurance premiums ($810) should also be deducted from the insurance proceeds, along
with the costs of cleaning up the property ($2,500). Deducting, from the $11,000 of insurance
proceeds, the $6,175.16 for remaining payments under the contract, $810 for owed taxes and
insurance premiums and $2,500 for clean-up costs, the remainder from the policy proceeds is
$1,514.84. Because the Seller was paid the insurance proceeds in this case, a judgment should
accordingly be entered against Seller for the remaining proceeds of $1,514.84.

                                                   V.

        For the reasons stated herein, we affirm the order and judgment of the trial court that the title
to the property at issue shall be vested with Buyer. However, we modify the amount of damages
awarded and order that Seller pay to Buyer $1,514.84. Further, the costs of this appeal are taxed to
the appellee, Ms. Coleman, for which execution may issue, if necessary.



                                                        ___________________________________
                                                        PATRICIA J. COTTRELL, JUDGE




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