Bingo! Found them, he did go by Layton, and is in fact your grandfather. Not the one you have in your tree born in the 1800's and died in 1974.

1940 US Federal Census Knox Co, 61-16 page 34 of 52
Morgan, Layton, 24 Married , born KY, waiter- restaurant
Morgan, Vivian, 22 Married, born TN

To find their census record to attach to your tree, it is indexed as Layton Margan and Vinan Margan. Now you can work your way back from his father Griffin Morgan and mother Martha Ellen (nee Moore).