ÿWPC­ …# VUNa %¯ 0(µUPÝw@- 4m   ˜ U:  0JÚ 0T$ 0^x 0hÖ 0r> 0|° 0†, 0² 1uB 0d· U> BYU*vB) DCÉ AM  D3YëŒv~w 0@õvÓ5 AOÆW 0D D/a B˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 (ÖÃ9 Z ‹6Times New Roman RegularX($¡¡.æF)Z8NewCenturySchlbk Regular STUEVWEXYDZÓ€fgz! 3|xgÂ"Arial Regular2 ÿÿ0Indent1Ô2ÔÔ3  Ô2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(&Times New Roman d< Œ 9p`(Arial% Line 7 d''''7Border 1dd€-(Cþÿ << Gÿÿ%%%%'ÿÿdxd áÝ ƒ!ÝÔ€$ÔÝ  ÝÔ€&ÔÔ€&ÔÓ  ÓÔ YYY ÔFILEDÔ€&XÔÌÌò òOctober€3,€1996ÌÌCecil€Crowson,€Jr.ÌÔ€&ôÔAppellate€Court€Clerkó óPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'@("ÿÿ$££Ò  ÒÒ  ÒStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  BA Op Geneva ÒÒ  BA Op Geneva Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€$ÔÝ  ÝÓ  ÓÑ\R AØ'\ÑÔ€&Ô›à@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€JACKSONÌÌÌœGROVER›€R.€BASS,à àà àà à)€€Ìà àà àà àà àà àà à)Ìà àà àó óPlaintiff/Appellee,à àà àò ò)€€Shelby€Chancery€No.€94827„2€R.D.Ìà àà àà àà àà àà à)ÌVS.à àà àà àà àà àà à)€€Appeal€No.€02A01„9508„CH„00178Ìœ›à àà àà àà àà àà à)ÌJOHN€C.€KIMBROUGH,à àà àà à)Ìà àà àà àà àà àà à)Ìà àà àó óDefendant/Appellantà àò ò)ó óÌÌÌà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€SHELBY€COUNTYÌà@ àAT€MEMPHIS,€TENNESSEEÌà@ àTHE€HONORABLE€FLOYD€PEETE,€JR.,€CHANCELLORÌÙ€€ÙœßL€)+(;+'h|­(` Å `€€Lß›ÌÌÌÌÌÌÌò òœROGER€A.€STONEÌSTONE,€HIGGS,€and€DREXLER›Ìó óMemphis,€TennesseeÌAttorney€for€AppellantÌÌÌò òWILLIAM€A.€COHNÌTHE€COHN€LAW€FIRMó óÌCordova,€TennesseeÌAttorney€for€AppelleeÌÌÌÌÌÌÌÌò òAFFIRMEDÌÌÌÌÌœ›ÌÌÌÌó óà àà àà àà àà àà àà àà àà àò òALAN€E.€HIGHERS,€J.ÌÌÌÌCONCUR:ÌÌW.€FRANK€CRAWFORD,€P.J.,€W.S.ÌÌHOLLY€KIRBY€LILLARD,€J.ÌœÌÑ7€ œ XXdæXXdì7Ñó ó›ÓÓà àThis€case€concerns€liability€in€connection€with€the€default€on€a€promissory€noteÏfor€the€purchase€of€stock€in€a€closely€held€corporation.€€After€a€bench€trial,€the€trial€courtÏawarded€a€judgment€in€favor€of€the€plaintiff€and€also€awarded€attorneysðð€fees€toÏplaintiff.€€Two€principal€issues€are€before€the€Court.€€The€first€is€whether€the€plaintiffÏgave€the€necessary€parties€proper€notice€of€default€under€the€terms€of€the€promissoryÏnotes€executed€by€the€parties.€€The€second€is€whether€the€guarantor€of€the€promissoryÏnotes€is€liable€under€the€personal€guaranty€if€proper€notice€was,€in€fact,€given.€€We€findÏthat€the€trial€court€was€correct€in€its€holding€that€proper€notice€was€given€and€that€theÏpersonal€guarantor€was€liable.€€Accordingly,€we€affirm€the€trial€courtððs€conclusion.€€€œÌ›Ìà@ àò òISSUESó óÌà àThe€issues€on€appeal€are€as€follows:ÌÓÓœà8 àà8 àI.›à àAre€the€contracts€in€default?Ìà àœà8 àà8 àA.›à àWas€contractual€notice€given?Ìà àœà8 àà8 àB.›à àIf€the€notice€requirements€of€anÏunambiguous€contract€have€not€œbeen€met,›€isÏthe€Chancellor€empowered€to€reform€theÍœcontract?Ìà8 àà8 àII.›à àIs€John€Kimbrough€liable€under€the€personalÏguaranty?Ìà àœà8 àà8 àA.›€à àIs€Kimbrough€liable€under€the€personalÏguaranty€if€the€underlying€œcontracts›€are€not€inÏdefault?Ìà àœà8 àà8 àB.›à àIs€Kimbrough€liable€under€the€personalÏguaranty€if€there€was€no€œconsideration›€for€theÏguaranty?€Ìœà8 àà8 àIII.›à àIf€John€Kimbrough€is€liable€under€the€personalÏguaranty,€œà8 àis›€he€entitled€to€œcure,›€andÏtherefore€liable€only€forÏpayments€due€through€OctoberÏ1,€œ1987?›Ìœà8 àà8 àIV.›à àœIs›€John€Kimbrough€entitled€to€attorneysðð€fees€uponÏœà8 àà8 àà8 àà8 àreversal?›€œÓÓÌÌ›à@ àò òFACTSÌó óà àœGrover›€R.€Bass€was€a€stockholder€in€Newark,€Inc.,€an€Arkansas€corporation.€€OnÏOctober€10,€1984,€Grover€R.€Bass€(hereinafter,€ð ðBassðð)€and€Newark,€Inc.€(hereinafter,Ïð ðNewarkðð)€entered€into€a€Stock€Redemption€Agreement€in€order€for€Newark€toÏpurchase€Bassðð€shares€of€stock€in€Newark.€€The€agreement€was€signed€by€Bass€andÏby€John€Kimbrough€(hereinafter,€ð ðKimbroughðð),€as€president€of€Newark.€€The€StockÏRedemption€Agreement€provided€that€at€closing,€Bass€would€deliver€his€shares€ofÏstock€to€the€law€firm€of€Kimbrough€&€Norfleet,€P.C.,€as€Escrow€Agent.€€John€KimbroughÏwas€a€principal€in€the€Memphis€law€firm€of€Kimbrough€&€Norfleet.€€œÌÌ›à àPayment€of€the€purchase€price€of€Bassðð€shares€of€stock€was€secured€by€twoÏpromissory€notes€executed€on€or€about€October€10,€1984.€€A€ð ðMonthly€InstallmentÏAmortized€Noteðð€was€executed€by€Newark€through€its€president,€John€C.€Kimbrough,Íand€it€provided€that€Bass€would€be€paid€the€principal€sum€of€$132,033.00€plus€interestÏfor€the€purchase€of€the€stock.€€An€ð ðAnnual€Installment€Noteðð€was€executed€by€NewarkÏthrough€its€president,€John€C.€Kimbrough,€and€it€provided€that€Bass€would€be€paid€theÏprincipal€sum€of€$33,952.00€plus€interest€for€the€purchase€of€the€stock.€€Both€notesÏspecified€the€procedure€to€be€followed€in€case€of€default.€€The€procedure€in€case€ofÏdefault€stated:€€ÌÓÓà8 àà8 àUndersigned€shall€not€be€deemed€in€default€unless€theÏholder€shall€first€give€to€the€undersigned€written€notice€byÏcertified€mail€of€such€default,€at€the€undersignedððs€currentÏaddress,€and€the€undersigned€then€fails€to€cure€such€defaultÏwith€thirty€(30)€days€from€receipt€of€such€notice.€€Ìà àà àÌÓÓà àBoth€promissory€notes€also€declared:ÌÓÓà8 àà8 àThis€note€is€subject€to€all€the€terms€and€provisions€of€thatÏcertain€Stock€Redemption€Agreement€by€and€betweenÏpayee€and€the€undersigned€dated€May€1,€1984.€€Ìà àà àÌÓÓà àIn€the€case€of€default,€the€Stock€Redemption€Agreement€provided:ÌÓÓà8 àà8 àIf€Corporation€should€default€in€the€payment€of€the€balanceÏowed€Stockholder,€Stockholder€shall€notify€Escrow€Agent,Ïwho€shall€in€turn€notify€Corporation€within€30€days€of€receiptÏof€said€notice€from€Stockholder.€€If€Escrow€Agent€is€notÏnotified€within€30€days€from€the€date€it€notified€CorporationÏthat€said€default€has€been€cured,€waived€or€is€nonexistent,Ïthen€Escrow€Agent€shall€sell€the€stock€or€other€collateralÏbeing€held€by€it€to€the€highest€bidder€in€accordance€with€theÏprovisions€of€the€Uniform€Commercial€Code,€and€shall€payÏto€Stockholder€the€funds€received,€less€any€expense€of€saidÏsale.€€€œÌ›€Ìà àà àÌÌÓÓà àIn€addition€to€executing€the€two€promissory€notes,€John€Kimbrough€executed€onÏOctober€10,€1984,€a€personal€guaranty€to€secure€payment€of€the€Monthly€InstallmentÍAmortized€Note€and€the€Annual€Installment€Note.€€By€its€terms,€Kimbroughððs€personalÏguaranty€was€to€expire€on€October€1,€1987.€œÌ›Ìà àNewark€failed€to€make€all€the€required€installment€payments€for€purchase€ofÏBassðð€stock.€€By€letter€dated€April€24,€1987,€William€Cohn,€Bassðð€attorney,€wrote€a€letterÏto€John€Kimbrough€requesting€full€payment€of€the€contract€indebtedness.€€On€July€1,Ï1987,€Cohn€wrote€a€letter€to€Kimbrough,€June€Merrell€and€Newark,€Inc.,€at€theirÏrespective€addresses,€notifying€the€parties€of€the€delinquency€in€payment€andÏdeclaring€that€all€amounts€had€been€accelerated€and€were€due€and€payable.€€œWhen›Ïpayment€was€not€received€after€30€days,€Bass€filed€a€complaint€on€August€18,€1987,€inÏthe€Chancery€Court€of€Shelby€County,€Tennessee,€against€Newark,€Inc.,€John€C.ÏKimbrough€and€the€Estate€of€Virgil€C.€Merrell,€June€E.€Merrell,€Administratrix/Executrix.ÏœIn›€the€Complaint,€Bass€prayed€for€over€$192,000.00€in€damages€plus€interest,Ïattorneysðð€fees€and€costs.€€The€cause€was€tried€on€May€21,€1992.€€œÌ›Ìà àAfter€post„trial€briefs€had€been€submitted,€the€trial€court€entered€its€ð ðOrder€œof›ÏFindings€of€Court€and€Post€Trial€Procedureðð€on€February€17,€1993,€and€later€enteredÏits€ð ðOrder€Awarding€Attorney€Fees€and€Final€Judgmentðð€on€August€13,€1993.€€œThe›€trialÏcourt€found€that€the€parties€had€engaged€in€a€single€transaction€which€included€theÏsigning€of€promissory€notes€and€a€personal€guaranty€to€secure€the€promissory€notesÏand€that€said€transaction€occurred€on€October€10,€1984.€€The€trial€court€found€that€notÏonly€was€there€a€default€in€the€payments€but€also€that€John€Kimbrough€had€notice€ofÏthe€default€and€was€knowledgeable€of€the€procedures€to€be€taken€after€receipt€of€theÍnotice€of€default.€€Finally,€the€trial€court€found€that€John€Kimbrough€had€executed€aÏpersonal€guaranty€securing€payment€of€the€promissory€notes€to€Grover€Bass€whichÏwas€for€a€period€expiring€on€October€1,€1987.€€Since€Kimbrough€received€notice€ofÏdefault€prior€to€October€1,€1987,€Kimbrough€was€personally€liable€to€Bass€on€theÏguaranty.€€The€trial€court€found€Kimbrough€liable€under€the€guaranty€and€subsequentlyÏentered€a€judgment€in€favor€of€Grover€Bass€in€the€amount€of€$262,754.60€plus€interestÏand€$39,413.19€in€attorneysðð€fees,€for€a€total€judgment€of€$302,167.79€plus€costs.€œThe›Ïtrial€courtððs€subsequent€order€entered€July€19,€1994,€dismissed€the€lawsuit€as€toÏdefendants€Newark,€Inc.,€and€the€Estate€of€Virgil€C.€Merrell,€June€E.€Merrell,ÏAdministratrix/Executrix.€€œThe›€final€judgment€was€subsequently€withdrawn€by€the€trialÏcourt€pursuant€to€Rule€60.02€œT.R.C.P.›€in€its€ð ðOrder€Granting€Relief€from€JudgmentððÏentered€January€4,€1995,€and€reentered€as€of€that€œdate.€›€œKimbrough›€timely€filed€aÏnotice€of€appeal€on€January€26,€1995,€and€the€cause€is€properly€before€this€Court€forÏconsideration.€œÌÌ›à àThis€is€a€contract€action€held€without€the€intervention€of€a€jury.€€œT.R.A.P.€13(d)›Ïrequires€this€Court€to€review€the€findings€of€fact€by€the€trial€court€òòdeóó€òònovoóó€upon€theÏrecord,€accompanied€by€a€presumption€of€the€correctness€of€the€findings.€€Unless€theÏpreponderance€of€the€evidence€is€otherwise,€we€must€affirm€the€trial€court€absent€errorÏof€law.€On€appeal,€this€Court€has€been€presented€with€the€transcript€of€the€evidence,Ïthe€technical€record,€exhibits,€the€trial€court's€findings€of€fact€as€well€as€the€ordersÏentered€in€the€cause.€œÌ›Ìà@ àò òDEFAULTó óÌà àThe€promissory€notes€executed€by€Newark€for€Bass€require€that€notice€ofÏdelinquency€in€payment€be€given€by€Bass€to€Newark€in€order€for€the€notes€to€be€inÏdefault.€€Specifically€both€the€Monthly€Installment€Amortized€Note€and€the€AnnualÏInstallment€Note€provide:ÌÓÓÔ€Ôà8 àà8 àœÔ€&ÔUndersigned›€(Newark)€shall€not€be€deemed€in€defaultÏunless€the€holder€(Bass)€shall€first€give€to€the€undersignedÏwritten€notice€by€certified€mail€of€such€default,€at€theÏundersignedððs€current€address,€and€the€undersigned€thenÏfails€to€cure€such€default€within€thirty€(30)€days€from€receiptÏof€such€notice.€€(Emphasis€Added).€€€ÌÌÓÓThe€notes€themselves€incorporate€the€Stock€Redemption€Agreement€entered€betweenÏBass€and€Newark€which€provided:€€à8 àà8 àÌÓÓà8 àà8 àœIf›€Corporation€should€default€in€the€payment€of€the€balanceÏowed€Stockholder,€Stockholder€shall€notify€Escrow€Agent,Ïwho€shall€in€turn€notify€Corporation€within€30€days€of€receiptÏof€said€notice€from€Stockholder.€€If€Escrow€Agent€is€notÏnotified€within€30€days€from€the€date€it€notified€CorporationÏthat€said€default€has€been€cured,€waived€or€is€nonexistent,Ïthen€Escrow€Agent€shall€sell€the€stock€or€other€collateralÏbeing€held€by€it€to€the€highest€bidder€in€accordance€with€theÏprovisions€of€the€Uniform€Commercial€Code,€and€shall€payÏto€Stockholder€the€funds€received,€less€any€expense€of€saidÏsale.€€€€Ìà àà àà àÌÓÓThe€Stock€Redemption€Agreement€expressly€incorporated€by€reference€the€EscrowÏAgreement€between€Newark€and€Kimbrough€&€Norfleet,€P.C.€€The€Escrow€AgreementÏspecified€that€stock€would€be€held€by€Kimbrough€&€Norfleet€as€collateral€and€that€toÏcause€the€collateral€to€be€sold,€a€stockholder€such€as€Bass€would€have€to€give€noticeÏto€Kimbrough€&€Norfleet.€€In€particular,€the€Escrow€Agreement€expressly€stated:ÌÓÓà8 àà8 à3.€òòDEFAULTó󀄀Upon€notification€by€a€stockholder€of€defaultÍin€the€payment€of€the€redemption€price€due€suchÏStockholder,€Escrow€Agent€shall€notify€Corporation€withinÏ30€days€of€receipt€of€such€notice€of€default.ÌÌà8 àà8 àà àIf€Escrow€Agent€is€not€notified€that€the€default€hasÏbeen€cured,€waived€or€is€nonexistent€within€30€days€of€itsÏnotice€to€Corporation,€then€Escrow€Agent€shall€sell€the€stockÏor€other€collateral€of€that€particular€Stockholder€to€theÏhighest€bidder€under€the€provisions€of€the€UniformÏCommercial€Code€then€in€effect.€€€€ÌÌà8 àà8 àà àAny€proceeds€received€from€such€sale€shall€be€paidÏto€the€Stockholder,€less€any€expenses€of€the€sale€incurredÏby€Escrow€Agent.€€€œÌ›à àà àÌà àà àœÌ›ÌÓÓà àJohn€Kimbrough€asserts€that€for€the€notes€to€be€in€default,€Bass€must€haveÏgiven€notice€by€certified€mail€to€Newark€at€its€Forrest€City,€Arkansas,€address.€€If€theÏdelinquency€were€not€cured€and€if€Bass€wished€to€liquidate€the€stock,€he€had€to€giveÏnotice€to€Kimbrough€&€Norfleet,€as€Escrow€Agent.€€The€Escrow€Agent,€in€turn,€was€thenÏobligated€to€give€notice€to€Newark,€Kimbrough€and€the€others€listed€in€the€EscrowÏAgreement,€and€then€allow€them€an€opportunity€to€cure€before€selling€the€stock.€€ÌÌà àOn€April€24,€1987,€Bassðð€attorney,€William€Cohn,€sent€a€letter€to€John€KimbroughÏnotifying€him€that€Newarkððs€payments€on€the€promissory€notes€were€delinquent€andÏdemanding€full€payment.€€œThe›€letter€was€sent€to€Kimbrough€at€the€offices€of€KimbroughÏProperties,€Inc.€€By€certified€letter€dated€July€1,€1987,€Cohn€notified€John€KimbroughÏand€Newark€that€the€payment€of€the€notes€was€delinquent€and€demanded€fullÏpayment.€€œThe›€letter€was€again€sent€to€Kimbrough€at€the€offices€of€KimbroughÏProperties€in€Memphis€and€also€to€Newark€at€its€Forrest€City,€Arkansas,€address.€ÍWhile€it€does€not€appear€that€the€address€of€Kimbrough€Properties€was€listed€in€theÏpromissory€notes,€Stock€Redemption€Agreement€or€Escrow€Agreement,€the€recordÏreveals€that€œJohn›€Kimbrough,€by€letter€dated€January€30,€1987,€and€written€onÏKimbrough€Properties€stationery,€had€notified€Bass€that€Newark€was€experiencingÏcash€flow€problems.€€œIn›€that€letter,€Kimbrough€made€proposals€to€Bass€regardingÏpayment€for€the€stock.€€Under€these€circumstances,€the€Court€concludes€that€CohnððsÏsending€the€letter€to€Kimbrough€at€the€offices€of€Kimbrough€Properties€wasÏreasonable.€€òòSee€generallyóó€òòBlazer€Ins.€Ag.,€Inc.€v.€Jim€Cogdill€Dodge€Co.óó,€809€S.W.2dÏ745€(Tenn.€App.€1991).€€Further,€Kimbrough€does€not€deny€that€he€received€notice€ofÏthe€delinquency.€€At€trial€he€testified:ÌÓÓà8 àà8 àTHE€COURT:€You€donððt€deny€getting€that€notice,€though,€doÏyou?€€You€got€actual€notice?ÌÌà8 àà8 àTHE€WITNESS:€I€got€actual€notice;€I€do€not€I€deny€that,€YourÏHonor.Ìà àà àœÌ›ÌÌÓÓà àKimbrough€asserts€on€appeal€that€œBass›€failed€to€notify€Newark€of€theÏdelinquency€of€payment€on€the€notes.€€The€Court€finds€Kimbroughððs€position€to€beÏwithout€merit.€€On€its€face,€the€July€1,€1987,€letter€indicates€that€it€was€sent€via€certifiedÏmail€to€Newark€at€the€Forrest€City€address€contained€in€the€Escrow€Agreement.€€TheÏJuly€1,€1987,€letter€referred€to€the€Monthly€Installment€Amortized€Note€and€to€theÏAnnual€Installment€Note.€€Furthermore,€Kimbrough€was€president€of€Newark,€andÏKimbrough€admitted€to€the€trial€court€that€he€received€notice€of€the€delinquency.€ÏTherefore€if€Kimbrough€received€notice,€Newark€also€received€notice.€€Notice€to€aÏcorporate€officer€constitutes€notice€to€the€corporation.€€òòMcConnell€v.€Sprouseóó,€13€Tenn.ÍApp.€291,€297€(Tenn.€App.€1931);€òòHolt€v.€Southern€Ry€Co.óó,€51€F.R.D.€296,€299€(E.D.ÏTenn.€1969);€òòSee€alsoóó€òòHurst€Boillin€v.€Jonesóó,€279€S.W.€392,€393€(Tenn.€1926);ÏòòWilliams€v.€Title€Guaranty€&€Trust€Co.,óó€212€œS.W.2d›€œ897,›€901€(Tenn.€App.€1948)(It€is€aÏgeneral€rule€of€law€that€a€principal€is€bound€by€the€knowledge€of€or€notice€to€his€agent,Ïreceived€while€the€agent€is€acting€within€the€scope€of€his€authority€and€which€is€inÏreference€to€a€matter€over€which€his€authority€extends).€€In€this€regard,€we€affirm€theÏtrial€courtððs€finding€that€Newark€did€receive€notice€of€the€delinquency€of€payment€onÏthe€promissory€notes.€€œÌ›Ìà àBoth€promissory€notes€provided€that€once€Newark€received€notice€of€theÏdelinquency,€it€had€30€days€in€which€to€cure€the€delinquency.€€Failure€to€cure€theÏdelinquency€within€30€days€would€render€the€notes€to€be€in€default.€€It€is€not€disputedÏthat€Newark€failed€to€cure€the€delinquency.€€Therefore,€by€their€own€terms,€theÏpromissory€notes€were€in€default,€and€Bass€could€demand€payment€in€full€of€theÏremaining€balance€due€on€the€notes€plus€interest€and€attorneysðð€fees.€€œKimbrough›Ïmaintains€that€upon€default,€Bass€had€an€obligation€under€the€Stock€RedemptionÏAgreement€to€notify€Kimbrough€&€Norfleet,€as€Escrow€Agent,€which€would€in€turn€notifyÏNewark€of€the€default.€€If€payment€from€Newark€were€not€forthcoming€within€anÏadditional€30€days,€the€Escrow€Agent€could€then€sell€the€stock€being€held€as€collateralÏand€pay€Bass€the€proceeds.€€Kimbrough€maintains€that€through€the€agreements€of€theÏparties,€an€elaborate€scheme€had€been€created€that€Bass€was€bound€to€follow€or€beÏprecluded€from€recovery.€€Kimbrough€would€have€the€Court€believe€that€Bass€wasÏbound€to€follow€the€following€scenario:€€Upon€learning€of€delinquency€on€theÍpromissory€notes,€Bass€should€have€notified€Newark,€of€which€John€Kimbrough€servedÏas€president.€€Upon€receiving€notice,€Newark€would€have€had€30€days€in€which€to€cureÏor€be€found€in€default.€€If€Newark€defaulted€on€the€promissory€notes,€Bass€then€wasÏobligated€to€notify€the€Escrow€Agent,€Kimbrough€&€Norfleet,€a€law€firm€in€which€JohnÏKimbrough€was€a€principal.€€Upon€receipt€from€Bass€of€notice€of€Newarkððs€default,ÏKimbrough€&€Norfleet€would€notify€Newark,€a€corporation€for€which€its€own€principalÏJohn€Kimbrough€served€as€president,€regarding€the€default.€€Once€the€Escrow€AgentÏnotified€Newark,€it€was€obligated€to€wait€another€30€days€for€Newark€to€cure€theÏdefault.€€Only€after€60€days€had€passed€since€Bass€first€had€notified€Newark€of€theÏdelinquency€could€the€stock€be€sold€to€satisfy€the€default.€€œÌ›Ìà àThe€Court€is€urged€to€believe€that€a€system€had€been€created€in€which€the€leftÏhand€would€not€know€what€the€right€hand€was€doing,€in€spite€of€the€fact€that€bothÏhands€were€attached€to€one€and€the€same€body,€namely€that€of€John€Kimbrough.€ÏSuch€a€position€is€untenable€and€is€expressly€rejected€by€this€Court.€€œÌ›Ìà àIt€appears€to€the€Court€that€Bass,€through€his€attorneyððs€letter€of€July€1,€1987,Ïproperly€notified€John€Kimbrough,€individually,€at€his€Memphis€address€and€Newark,ÏInc.,€of€which€John€Kimbrough€served€as€president,€at€its€Forrest€City,€Arkansas,Ïaddress.€€It€is€undisputed€that€Newark€failed€to€cure€the€delinquency€and€defaulted€onÏthe€promissory€notes.€€The€Court€finds€that€as€of€that€time,€John€Kimbrough€had€noticeÏof€delinquency€and€default€in€his€three€capacities:€individually,€as€president€of€Newark,Ïand€as€a€principal€in€the€law€firm€of€Kimbrough€&€Norfleet,€the€Escrow€Agent.€€SinceÍKimbrough€had€notice,€Newark€had€notice€of€the€delinquency€in€payment.€ÏAccordingly,€the€Court€declines€to€find€that€the€Chancellor€reformed€the€contract.€ÏInstead,€it€is€apparent€that€Bass€satisfied€all€contractual€prerequisites€to€declaring€theÏnotes€to€be€in€default€and€was€entitled€at€that€time€to€maintain€a€suit€to€collect€upon€theÏpromissory€notes€and€to€enforce€the€personal€œguaranties›€executed€by€œKimbrough.Ì›Ìà@ àò òPERSONAL€GUARANTYó óÌà àOn€October€10,€1984,€Kimbrough€executed€a€ð ðPersonal€Guarantyðð€in€which€heÏagreed€œpersonally€to›€secure€payment€of€the€Monthly€Installment€Amortized€Note€andÏthe€Annual€Installment€Note€that€Newark€owed€to€Bass.€€There€is€no€dispute€among€theÏparties€that€the€personal€guaranty€was€executed€on€October€10,€1984,€and€wouldÏexpire€on€October€1,€1987.€€Both€Bass€and€Kimbrough€stated€at€trial€that€the€personalÏguaranty€was€executed€on€October€10,€1984.€œÌ›Ìà àThe€dispute€among€the€parties€concerns€the€date€the€promissory€notes€wereÏexecuted.€€Kimbrough€asserts€that€both€promissory€notes€were€executed€on€October€1,Ï1984.€€Therefore,€since€the€personal€guaranty€subsequently€was€executed€on€OctoberÏ10,€1984,€there€was€no€separate€consideration€for€the€guaranty,€and€it€is€not€binding€asÏa€separate€contract.€€Bass€maintains€that€both€promissory€notes€and€the€personalÏguaranty€were€executed€on€the€same€date,€October€10,€1984.€€€€€œÌ›Ìà àThe€trial€court€found€that€the€promissory€notes€and€personal€guaranty€were€partÏof€one€and€the€same€transaction.€€Therefore,€the€trial€court€found€that€Bass€was€entitledÍto€enforce€Kimbroughððs€personal€guaranty.€€We€agree€with€the€trial€courtððs€conclusionÏin€this€regard.€€œÌ›Ìà àBass€testified€at€trial€that€he€would€not€have€entered€into€the€sales€contractÏwithout€the€personal€guaranty.€ÌÓÓà8 àà8 àA:€He€(Kimbrough)€sent€me€by€mail€a€buy„and„sellÏagreement,€and€I€think€he€sent€copies€of€the€notes€as€well;ÏIððm€not€sure€about€that.€€And€I€called€him€and€I€said,€ð ðIððd€beÏwilling€to€sell,€but€only€if€I€have€your€personal€guaranties.ðð€€ÌÌà8 àà8 àQ:...€You€said€you€would€only€sell€if€you€had€his€personalÏguaranty;€is€that€correct?ÌÌà8 àà8 àA:€Thatððs€correct.€€Ìà àÌÓÓKimbrough€admitted€that€it€was€his€intent€to€give€Bass€a€personal€guaranty€as€part€ofÏthe€deal€to€sell€Bassðð€shares€of€stock.€€At€trial,€Kimbrough€stated:ÌÓÓà8 àà8 àTHE€COURT:€Let€me€ask€you€this.€€Did€you€intend€to€giveÏhim€a€personal€guaranty€at€that€„„€when€you€signed€thisÏdocument,€what€was€your€intent€at€the€point€you€signed€thisÏdocument?€€€€Ìà8 àà8 àTHE€WITNESS:€I€intended€to€give€him€œone.Ì›Ìà àà8 àà àœÌ›ÌÓÓà àThe€personal€guaranty€was€executed€on€October€10,€1984.€€Kimbrough€assertsÏthat€the€promissory€notes€were€previously€executed€on€October€1,€1984,€which€is€theÏdate€stated€on€the€face€of€the€œinstruments.›€€However,€both€promissory€notesÏspecifically€refer€to€the€Stock€Redemption€Agreement.€€The€notes€state€in€pertinentÏpart:ÌÓÓà8 àà8 àThis€note€is€subject€to€all€the€terms€and€provisions€of€thatÏcertain€Stock€Redemption€Agreement€by€and€betweenÍpayee€œand›€the€undersigned€dated€May€1,€œ1984.Ì›€€œÌÓÓThe›€Stock€Redemption€Agreement€states€that€it€was€executed€on€May€1,€1984;Ïhowever,€the€notary€certificate€on€said€agreement€states€that€it€was€executed€onÏOctober€10,€1984.€€The€acts€of€a€notary€public€are€presumed€correct€and€must€be€reliedÏupon€with€confidence.€€òòSee€generallyóó€òòFiguers€v.€Flyóó,€193€S.W.€117€(Tenn.€1917).€ÏSince€both€the€personal€guaranty€and€the€Stock€Redemption€Agreement€wereÏexecuted€on€October€10,€1984,€this€is€strong€evidence€that€the€promissory€notes€wereÏalso€executed€on€said€date.€€As€Bass€testified€at€trial:ÌÓÓà àà8 àA:€...€I€said,€ð ðFine.€€Iððll€come€on€down€and€weððll€sign€theÏdocuments€and€you€give€me€the€guaranty.ððÌÌà8 àà8 àQ:€When€was€this,€do€you€remember?ÌÌ€à8 àà8 àA:€Oh,€this€was€several€days€after€he€had€sent€theseÏdocuments€to€me€by€mail.€€I€went€down€to€this€office.€€TheÏdocuments€had€been€previously€dated€and€so€on.€€I€wentÏdown€to€his€office€„„€and€the€dates€on€the€documents€wereÏnot€changed,€but€they€were€signed€in€his€office€„„€theÏguaranty€was€given€to€me€in€his€office.€€Where€notarizationsÏwere€required€of€Mr.€Kimbroughððs€signature€and€myÏsignature,€a€young€lady€in€his€office€notarized€ourÏsignatures€„„€all€on€the€same€date.€€Ìà àà8 àÌSimilarly,€on€cross„examination,€Bass€stated:ÌÌà8 àà8 àQ:€At€the€time€„„€at€the€closing€of€this€deal€as€„„€toÏparaphrase€your€lawyer,€are€you€stating€that€simultaneouslyÏwith€that€Mr.€Kimbrough€gave€you€his€personal€guaranty?ÌÌà8 àà8 àA:€Yes,€it€all€took€place€in€his€office€at€the€same€time.ÌÌà8 àà8 à.....ÌÌà8 àà8 àQ:€Youððre€telling€this€Court,€Mr.€Bass,€that€you„all€met€oneÏtime€and€that€the€note€was€signed€by€Mr.€Kimbrough€and€atÏthe€same€time€he€gave€you€a€personal€guaranty.€€Is€thatÍwhat€youððre€telling€this€Court?ÌÌà8 àà8 àA:€Thatððs€exactly€what€happened.€€€€€Ìà àà8 àÌÓÓThe€Court€finds€that€the€personal€guaranty,€promissory€notes€and€Stock€RedemptionÏAgreement€were€all€part€of€one€and€the€same€transaction€that€occurred€on€October€10,Ï1984.€€œThere›€is€evidence€that€none€of€the€other€shareholders€received€personalÏguarantees€in€connection€with€the€purchase€of€their€stock€in€Newark.€€However,€it€isÏundisputed€that€Bass€requested€and€obtained€Kimbroughððs€personal€guaranty€toÏsecure€payment€of€the€promissory€notes,€and€Bass€is€entitled€to€the€benefit€of€hisÏbargain.€€Personal€œguaranties›€are€construed€against€the€guarantor€as€strongly€as€theÏlanguage€of€the€guaranty€will€permit.€€òòMemphis€Sheraton€Corp.€v.€Kirkleyóó,€640€F.2d.Ï14,€17€(6th€Cir.€1981);€òòFarmers„Peoples€Bank€v.€Clemmeróó,€519€S.W.2d€801,€805Ï(Tenn.€1975)(A€guarantor€shall€be€held€to€the€full€extent€of€his€engagements€and€theÏrule€in€construing€such€an€instrument€is€that€the€words€of€the€guaranty€are€to€be€takenÏas€strongly€against€the€guarantor€as€sense€will€admit).€€œÌ›Ìà àKimbrough€asserts€that€even€if€he€is€liable€under€the€personal€guaranty,€heÏshould€not€be€liable€for€payments€due€after€October€1,€1987,€the€expiration€date€of€theÏpersonal€guaranty.€€Both€promissory€notes€contained€an€acceleration€clause€whichÏprovided€in€relevant€part:ÌÓÓà8 àà8 àUpon€default€in€any€payment,€or€part€thereof,€the€remainingÏamount€of€the€principal€of€this€note€with€all€interest€thenÏaccrued€shall,€at€the€option€of€the€holder€of€this€note,€atÏonce€become€due€and€payable.€€Ìà àà8 àÌÓÓAs€previously€discussed,€default€did,€in€fact,€occur,€and€it€occurred€before€October€1,Í1987.€€Once€default€on€the€promissory€notes€occurred,€the€remaining€balance€wasÏaccelerated€and€became€due€and€payable€according€to€the€terms€contained€in€theÏnotes.€€The€personal€guaranty€provided€as€follows:ÌÓÓà8 àà8 àThe€undersigned€agree€to€personally€guarantee€theÏfollowing€notes,€copies€of€which€are€attached,€for€the€limitedÏperiod€stated:...ÌÌÓÓWhen€a€guaranty€is€limited€as€to€the€time€during€which€it€will€be€binding€on€theÏpromisor,€construction€of€the€guaranty€will€depend€on€the€intention€of€the€parties€asÏthat€intention€is€determined€from€the€language€of€the€instrument€and€the€factsÏsurrounding€its€execution.€€òòBank€of€Waynesboro€v.€Ghoshóó,€576€œS.W.2d›€œ759,›€761Ï(Tenn.€1979).€€The€Court€finds€the€guaranty€in€this€cause€to€be€clear€andÏunambiguous.€€Had€Kimbrough€desired€to€limit€his€exposure€on€the€guaranty€to€aÏsingle€transaction,€to€a€certain€number€of€transactions€or€even€to€a€specific€dollarÏamount,€he€could€have€done€so€by€express€language€in€the€guaranty.€òòStearns€v.ÏJonesóó,€199€S.W.€400,€401€(Tenn.€1917).€€œÌ›Ìà àKimbroughððs€personal€guaranty€was€intended€to€protect€Bass€in€case€NewarkÏdefaulted€on€payment€of€the€notes.€€Newark€failed€to€make€the€necessary€installmentÏpayments,€and€the€notes€were€in€default€prior€to€October€1,€1987.€€By€the€expressÏterms€contained€in€the€promissory€notes,€upon€default,€Bass€had€the€option€ofÏaccelerating€repayment€and€declaring€the€unpaid€principal€and€interest€due€andÏpayable.€€Therefore,€the€Court€concludes€that€Kimbrough€is€liable€not€only€for€theÏinstallments€due€through€October€1,€1987,€but€also€for€the€entire€principal€amount€plusÏinterest.€€€€œÌ›Ìà@ àò òATTORNEYSðð€FEES€ó óÌà àThe€final€issue€to€be€addressed€is€that€of€attorneysðð€fees.€€The€promissory€notesÏeach€provided:ÌÓÓà8 àœà8 àIf›€this€note€is€placed€in€the€hands€of€an€attorney€forÏcollection,€by€suit€or€otherwise,€or€to€protect€the€security€forÏits€payment€or€to€enforce€its€collection,€the€undersigned€willÏpay€all€costs€of€collection€and€litigation,€together€with€aÏreasonable€attorneyððs€fee,€should€the€holder€prevail€in€suchÏaction.€€Ìà àÌÓÓThe€Court€finds€that€Bass€is€the€prevailing€party€in€his€efforts€to€enforce€the€paymentsÏon€the€promissory€notes.€€Therefore,€he€is€entitled€to€recover€from€Kimbrough€the€costsÏof€litigation€together€with€reasonable€attorneysðð€fees€pursuant€to€the€express€terms€ofÏthe€promissory€notes.€€€œTherefore,€the€judgment€of€the€trial€court€is€affirmed.€Costs€areÏadjudged€against€Kimbrough.ÌÌÓÓà àà àà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ïóóà àà àà àà àà àà àà àà àHIGHERS,€J.ÌÌÌÌCONCUR:ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌóóCRAWFORD,€P.J.,€W.S.ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌLILLARD,€J.€›à à