ÿWPC¡& …# VUNa %¯ 0 (µw@Ý4 1 0 l@ 0D¬ 0Jð 0T: 0^Ž 0hì 0rT 0|Æ 0†B 0È 1uX U ,Í 0dù U,]U >‰B)ÇDCð AM3U*€ª*­?×3ôI= D3V B‰ü¦ 0@¢Œâ\náÊv~«vÓ) AOü$ÆK% 0D& D/U& B„&˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTÀÌÀääÀÀÌ0 (ÖÃ9 Z ‹6Times New Roman RegularX($¡¡ … † ‡ ˆ£‰Š‹DŒUÓ€™z!<°(#3|x™((3üÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó2 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)< Œ 9p`(ModernP ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ< Œ 9p`(Monaco< Œ 9p`(&Times New Roman% Line 7 d 7Border 1dd€-!Cþÿ << Gÿÿ< Œ 9p`(Arial ùÝ ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÔ€#ÔÔ€#ÔÓ  ÓÔ YYY ÔFILEDÔ€#XÔÌÌò òSeptember€11,€1996ÌÌCecil€Crowson,€Jr.ÌÔ€#ôÔAppellate€Court€Clerkó ó Ý ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝFor€answer,€it€was€asserted€that€the€proper€corporate€defendant€ð ðis€Heffernan,€Ballinger,ÏPounds€and€Yarbrough,€Inc.€and€it€has€not€changed€its€name.ððÌ 5Ý ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝAfter€filing€of€the€masterððs€report,€Heffernan€amended€his€complaint€to€allege,€òòò òinter€aliaóóó ó,Ïconspiracy€and€wrongful€conversion€against€the€individual€defendants.€Ì )Ý ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€judgment€was€rendered€as€against€ð ðHeffernan,€Ballinger,€Pounds€and€Yarbrough,ÏInc.ðð€and€made€final€pursuant€to€Rule€54.02€T.R.C.P.€€By€separate€order,€the€trial€court€referredÏthe€matter€back€to€the€clerk€and€master€for€further€hearing€to€determine€the€liability,€if€any,€ofÏð ðBallinger,€Pounds€and€Yarbrough,€Inc.€and€Lynn€H.€Ballinger,€Charles€O.€Pounds€and€Robert€A.ÏYarbrough.ðð€€The€suit€as€to€Ballinger,€Pounds€and€Yarbrough,€Inc.€was€subsequently€nonsuited.€ÏFor€our€purposes,€the€only€appellant€in€this€action€is€Heffernan,€Ballinger,€Pounds€and€Yarbrough,ÏInc.,€which€we€refer€to€throughout€this€opinion€as€ð ðAppellantðð€or€ð ðthe€Corporation.ðð€€Ì êÝ ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€record€establishes€that€the€four,€as€partners,€purchased€the€building€occupied€by€theÏCorporation.Ì Ý ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝWhen€questioned€about€this€conversation€on€cross„examination,€Heffernan€stated€that€heÏdid€not€recall€admitting€or€denying€the€allegation.€Ì++++'ÿÿdxd d òÝ ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThis€amount€was€subsequently€reduced€by€the€master€for€sums€that€were€determined€dueÏAppellant€from€Heffernan.Ì("ÿÿ$££Ò  ÒÒ  Ò ‚Ý ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThis€decision€is€the€second€of€two€appeals.€€On€remand€from€the€first€appeal,€the€trialÏcourt€awarded€the€plaintiff€corporation€the€profits€made€by€the€officer€by€participating€inÏcompetitive€enterprises.€€òòò òSee€Wilshire€Oiló óóó,€406€F.2d€at€1062.€Ì RÝ ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝWe€note€here€that€Appellant€has€not€sought€recovery€of€these€funds€by€way€ofÏcounterclaim€or€setoff.€€However,€we€agree€that€the€issue€was€in€fact€tried€by€the€parties€inÏaccordance€with€Rule€15.02€T.R.C.P.Ì ×Ý ƒ!ÝÔ€ÔÔ€ÔÝ  ÝÝ ƒ $Ýà àòòÚ  ÚÚ  ÚóóÝ  ÝThis€issue€was€also€tried€by€consent€of€the€parties€pursuant€to€Rule€15.02€T.R.C.P.ÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'@Styl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑMonacoÑÑ ÑÒ  BA Op Monaco ÒÒ  BA Op Monaco Ò€-‚ƒCþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5($$””ò òÚ  Ú1Ú  Úó ó„„'÷ÿ dxdüÿP PdÝ ƒ!ÝÔ . ÔÔ€ÔÓ&€X„d&ÓÑ#€Xd#ÑÔ€ÔÝ  ÝÑ\R AØ'\ÑÓ` Ü` p”XÓÑ\R AØ'\Ñà@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEE,€WESTERN€SECTIONÌà@ àAT€JACKSONÌà@ à_______________________________________________________ÌÌó óà à)ò òÌH.€PATRICK€HEFFERNAN,ó óà à)à àShelby€County€Chancery€CourtÌà à)à àNo.€96510„3€R.D.Ì€€€€€Plaintiff/Appellee.à à)Ìà à)ÌVS.à à)à àC.€A.€No.€02A01„9504„CH„00080ÌÙ€€ÙÙ€€ÙßL€"$!;+'h|%` Å `€€Lßà à)Ìò òHEFFERNAN,€BALLINGER,€POUNDS,ó óà à)Ìò òAND€YARBROUGH,€INC.€andó óà à)Ìò òLYNN€H.€BALLINGER,€CHARLES€O.ó óà à)Ìò òPOUNDS€and€ROBERT€A.ó óà à)Ìò òYARBROUGH,ó óà à)Ìà à)Ì€€€€€Defendant/Appellant.à à)Ìà à)Ì______________________________________________________________________________ÌÌFrom€the€Chancery€Court€of€Shelby€County€at€Memphis.Ìò òHonorable€D.€J.€Alissandratos,€Chancellor€ó óÌÌÌÌò òCarl€H.€Langschmidt,€Jr.ó ó,ÌARMSTRONG€ALLEN€PREWITT€GENTRY€ÌJOHNSTON€&€HOLMES,€Memphis,€TennesseeÌAttorneys€for€Defendant/Appellant€Heffernan,€Ballinger,€Pounds,€and€Yarbrough,€Inc.ÌÌÌò òJoseph€W.€Barnwell,€Jr.ó ó,ÌEVANS€&€PETREE,€Memphis,€TennesseeÌAttorney€for€Plaintiff/Appellee.ÌÌÌÌOPINION€FILED:ÌÌò òREVERSED€AND€REMANDEDÌÌÌà àFARMER,€J.ÌÌÌÌHIGHERS,€J.€ó ó:€(Concurs)Ìò òLILLARD,€J.€ó ó:€(Concurs)ÌÌÌÌÌÌÌÌÌÌÌÌÓÓÓ  ÓÓ` Ü` ˜XÓà àThis€litigation€was€initiated€by€Appellee,€H.€Patrick€Heffernan,€against€Ballinger,ÏPounds€and€Yarbrough,€Inc.,€formerly€Heffernan,€Ballinger,€Pounds€and€Yarbrough,€Inc.,× ƒ% ××  ×€andÏGlen€H.€Ballinger,€Charles€O.€Pounds€and€Robert€A.€Yarbrough,€to€recover€the€earnedÏcommissions€and€share€of€corporate€profits€allegedly€due€him.€€The€trial€court€referred€the€matter€toÏthe€clerk€and€master€who,€after€a€hearing,€determined€that€Heffernan€was€entitled€to€compensationÏin€the€amount€of€$44,242.92.× ƒ& ××  ×€€The€masterððs€report€was€affirmed€by€the€chancellor€who€enteredÏjudgment€for€Heffernan€accordingly.× ƒ' ××  ×€€The€Corporation€has€appealed,€presenting€the€followingÏissues€for€our€review:ÌÌÓÓà8 àà à1.€€Whether€the€Chancellor€and€the€Clerk€and€Master€erred€inÏconcluding€that€Heffernan€did€not€owe€Heffernan,€Ballinger,ÏPounds€and€Yarbrough,€Inc.€$15,620.01€for€commissions€he€placedÏin€his€own€agency€for€his€personal€benefit€while€he€was€still€anÏemployee€of€Heffernan,€Ballinger,€Pounds€and€Yarbrough,€Inc.ÌÌà8 àà à2.€€Whether€the€Chancellor€and€Clerk€and€Master€erred€inÏholding€that€the€corporation€should€have€given€Heffernan€a€partialÏdistribution€of€profit€of€$22,680.ÌÌà8 àà à3.€€Whether€the€Chancellor€and€the€Clerk€and€Master€erred€inÏconcluding€that€the€plaintiff€€was€entitled€to€receive€commissionsÏwhich€the€corporation€owed€him€for€the€fiscal€year€ending€May€31,Ï1987.ÌÌà8 àà à4.€€Whether€the€Chancellor€and€Clerk€and€Master€erred€inÏconcluding€that€Heffernan€did€not€have€to€repay€his€loan€of€$15,000Ïto€the€corporation.ÌÌÌÌÓÓFor€reasons€hereinafter€discussed,€we€reverse€the€judgment€of€the€trial€court.ÌÌà àThe€proof€establishes€that€the€Corporation€was€formed€in€October€1979€to€operateÏas€an€insurance€agency.€€Heffernan€and€the€individually€named€defendants€were€its€officers€andÏdirectors,€with€Heffernan€serving€as€president.€€Each€owned€25%€of€the€corporate€stock.€€Each€hadÏbeen€insurance€agents€prior€thereto€and€had€developed€their€own€ð ðbook€of€business.ðð€€They€did€notÏexecute€a€no„compete€agreement.€€The€Corporation€operated€under€a€fiscal€year€ending€May€31.€€ÌÌà àProblems€arose€among€the€four€when€all€did€not€agree€to€Heffernanððs€suggestionÏthat€they€enter€into€a€buy„sell€agreement.€€The€three€other€stockholders,€however,€offered€to€buyÏout€Heffernan€in€a€February€1987€meeting€with€him.€€According€to€Heffernan,€he€informed€theÏothers€at€this€meeting€that€he€was€unsure€of€his€future€plans€regarding€the€company€and€would€letÏthem€know€his€decision€on€April€1.€€The€parties€agree€that€sometime€around€April€1,€HeffernanÏmade€known€his€intentions€to€leave€the€business.€€He€testified:€ð ð[o]n€April€first€I€met€[with]€themÏand€I€said€.€.€.€I€would€not€want€to€continue€in€business€with€you€.€.€.€.€€I€will€take€my€businessÏand€you€keep€your€business.ðð€€Mr.€Pounds€testified€that€he€recalled€Heffernan€announcing€that€ð ðheÏwas€going€to€leave€in€several€months.ðð€€ÌÌà àHeffernan€testified€that€the€stockholders€met€again€in€May€and€that€ð ðit€was€laid€outÏvery€intelligently€how€I€would€take€my€accounts.ðð€€He€said€that€prior€to€the€completion€of€hisÏproposal€as€to€how€they€would€ð ðsplit,ðð€Pounds€strongly€suggested€that€he€ð ðget€out€right€now.ðð€ÏAccording€to€Heffernan,€he€replied,€ð ðI€have€no€intention€of€getting€out.€€I€own€25€percent€of€thisÍagency€and€25€percent€of€.€.€.€the€building× ƒ( ××  ×€and€my€book€of€business.€€And€when€I€get€my€deal€setÏup€and€we€get€through€the€end€of€this€month,€then€I€will€depart.ðð€€He€continued,€ð ðmy€goal€[was]€toÏmove€over€at€the€end€of€May€and€all€the€business€up€to€that€date€was€being€placed€with€[theÏCorporation].ðð€ÌÌà àHeffernanððs€plans€did€not€materialize,€however,€as€the€record€establishes€that€heÏphysically€vacated€the€premises€no€later€than€May€7.€€Mr.€Ballinger€testified€that€on€April€13,€1987,Ïhe€first€learned€that€Heffernan€was€renewing€business€in€his€new€agency€while€continuing€to€workÏfor€the€Corporation.€€He€and€Yarbrough€confronted€Heffernan€who,€according€to€Ballinger,€deniedÏthe€allegations.€€According€to€Heffernan,€he€admitted€that€he€was€ð ðwriting€some€business€withÏ[his]€new€agency.ðð× ƒ) ××  ×€€Ballinger€and€Pounds€requested€that€he€leave,€prompting€his€early€departure.€ÏHeffernan€testified€that€prior€to€the€conversation€with€Ballinger€and€Yarbrough,€he€believed€that€heÏhad€effectively€ended€his€relationship€with€and€his€obligations€to€the€Corporation€and€furtherÏbelieved€that€he€was€entitled€to€stay€on€the€premises€because€of€his€ownership€of€part€of€theÏbuilding€and€agency.€€Heffernan€testified€that€his€last€paycheck€from€Appellant€was€for€the€monthÏof€April€1987.€€ÌÌà àThe€board€of€directors€did€not€declare€Heffernan€a€bonus€in€1987,€according€toÏPounds,€ð ðbecause€at€the€time€we€did€it€he€left€before€the€year€was€out€and€if€he€would€have€stayed,Ïwe€would€have€looked€at€it€differently,€but€in€the€meantime€he€was€diverting€business€away€fromÏour€shop€two€months€before€he€was€to€leave.€€And€a€lot€of€that€business€expired€April€one€€andÏaffected€the€bottom€line€of€the€company,€and€I€couldnððt€see€giving€a€bonus€in€that€kind€ofÏsituation.ðð€€ÌÌà àThe€record€includes€a€letter€dated€April€8,€1987€from€Pounds€to€an€insuranceÏcompany€represented€by€€the€Corporation€informing€the€latter€of€Heffernanððs€ð ðdecision€to€leaveððÏand€requesting€that€any€future€contacts€regarding€the€Corporation€be€directed€to€either€Pounds,ÏYarbrough€or€Ballinger.€€It€was€Poundsðð€testimony€that€he€wrote€similar€letters€to€all€companiesÏdoing€business€with€the€Corporation.€€Pounds€further€testified€that€at€that€point€in€time€he€had€noÏidea€that€Heffernan€would€be€taking€business€in€a€new€agency€before€the€end€of€the€fiscal€year.€ÏThe€corporate€charter€for€Heffernanððs€new€agency,€H.€P.€Heffernan€Insurance,€Inc.€was€signed€byÏhim€on€April€14,€1987€and€filed€by€the€State€of€Tennessee€on€the€following€day.€€A€letter€datedÏApril€1,€1987€from€a€customer€of€the€Corporation€to€CNA€Insurance€identifies€its€ð ðagent€of€Ïrecordðð€as€Heffernan€Insurance.€€ÌÌà àOn€cross„examination,€Heffernan€admitted€that€he€renewed€certain€policies€handledÏby€the€Corporation€through€his€new€agency.€€He€insisted,€however,€that€such€policies€would€neverÏhave€been€issued€without€Poundsðð€approval.€€When€questioned€further,€ð ð[b]ut€you€didnððt€tellÏ[Pounds]€you€were€soliciting€this€to€go€into€another€agency;€right?ðð,€Heffernan€replied,€ð ð[n]ot€onÏApril€first,€no€.€.€.€.€€I€told€him€I€was€leaving€and€he€would€have€been€awfully€naive€if€he€thoughtÏeverything€that€came€after€that€date€was€going€back€into€their€pockets.ðð€€Heffernan€explained€thatÏthe€policies€were€originally€ordered€April€1€for€the€Corporation€and€the€order€from€his€new€agencyÏdid€not€take€place€until€sometime€in€May,€with€the€policies€actually€being€issued€in€June.€€TheÏpolicies,€however,€were€ð ðback€datedðð€to€April€1€for€continuous€coverage.€€He€was€questioned:ÌÌÓÓà8 àQ.€€You€are€totally€satisfied€they€were€covered€though?ÌÌà8 àA.€€Absolutely,€April€first.ÌÌà8 àQ.€€Through€what€agency€were€they€covered?ÌÌà8 àA.€€Through€my€agency.ÌÌà8 àQ.€€April€one€through€your€agency€Heffernan,€Inc.?ÌÌà8 àA.€€That€is€right.€€ÌÌÌÌÓÓOn€redirect€examination,€Heffernan€insisted€that€all€of€the€accounts€renewed€through€his€newÏagency€were€those€he€developed€prior€to€the€formation€of€the€Corporation.€€He€agreed€that€theÏpremiums€and€commissions€earned€by€the€Corporation€from€the€accounts€subsequently€placed€withÏhis€new€agency€totaled€approximately€$15,000€in€the€year€preceding€their€removal.€€ÌÌà àHeffernan€further€admitted€that€he€wrote€new€business€for€his€new€agency€whileÏpresident€of€the€Corporation.€€He€was€asked:ÌÌÓÓà8 àQ.€€You€sold€a€new€policy€in€your€new€agency€while€you€still€wereÏpresident€of€Heffernan,€Ballinger,€Pounds€and€Yarbrough€for€WestÏPools;€right?ÌÌà8 àA.€€After€I€had€made€my€commitment.ÌÌà8 àQ.€€While€you€were€still€president?ÌÌà8 àA.€€Well,€yes,€I€guess.€€ÌÌÌÓÓÌà àUpon€hearing€the€evidence,€the€master€awarded€Heffernan€$22,680€for€his€share€ofÏdistributed€corporate€profits€and€approximately€$33,000× ƒ, ××  ×€in€earned€commissions€for€the€yearÏending€May€31,€1987.€€The€method€of€computation€was€based€on€the€masterððs€determination€thatÏfor€several€years€prior€to€1987,€the€parties€operated€under€an€agreement€wherein€each€individualÏproducer€of€commission€income€was€compensated€based€upon€the€percentage€of€what€he€producedÏcompared€to€total€commissions.€€When€year€end€profit€was€computed,€each€producer€received€theirÏestablished€percentage€of€profit.€€ÌÌà àAlthough€it€was€determined€that€prior€to€May€31,€1987,€ð ðHeffernan€began€seekingÏand€filing€agent€of€record€letters€with€the€insurance€companies€on€insurance€he€had€written€.€.€.€.€toÏinsure€that€he€or€his€new€agency€would€be€entitled€to€future€commissions€rather€than€theÏcorporation.€.€.€,ðð€the€master€concluded€that€such€action€did€not€violate€Heffernanððs€fiduciary€dutiesÏto€the€Corporation.€€The€master€reasoned:ÌÌÓÓà8 àThe€other€shareholders€knew€a€breakup€was€in€progress€and€Mr.ÏHeffernan€was€extremely€displeased€and€knew€that€he€was€going€toÏleave.€€His€decision€to€seek€agent€of€record€letters€on€insurance€heÏhad€written,€that€was€being€renewed,€was€not€unreasonable€orÏimproper.ÌÌà8 àà à.€.€.€.ÌÌà8 àà à.€.€.€.€€Mr.€Heffernan€did€not€breach€his€duty€to€theÏcorporation€by€directing€business€to€himself.€€ÌÌÌÌÓÓIt€was€further€concluded€that€Heffernan€was€neither€obligated€to€Appellant€for€any€commissionsÏplaced€in€his€own€agency€prior€to€his€departure€or€a€$15,000€loan€from€the€Corporation€to€him.€ÏThese€findings,€as€hereinabove€noted,€were€concurred€in€by€the€chancellor.ÌÌà àWe€begin€our€review€cognizant€of€the€general€rule€that€concurrent€findings€by€theÏmaster€and€trial€court€are€conclusive€on€appeal.€€Four€exceptions€render€the€rule€inapplicable:€(1)Ïthe€issue€should€not€have€been€referred€to€a€master;€(2)€the€findings€are€based€on€an€error€of€law;Ï(3)€the€findings€involve€a€question€of€law€or€a€mixed€question€of€law€and€fact;€or€(4)€the€findingsÏare€not€supported€by€substantial€and€material€evidence.€€òòò òSee€In€re€Estate€of€Wallaceóóó ó,€829€S.W.2dÏ696,€700€(Tenn.€App.€1992);€òòò òCrouch€v.€Crouchóóó ó,€385€S.W.2d€288,€291€(Tenn.€App.€1964).ÌÌà àIt€is€well€established€that€officers€and€directors€of€a€corporation€owe€a€fiduciaryÏduty€to€the€corporation€and€its€members€or€shareholders€and,€while€occupying€such€a€position€ofÏtrust,€must€act€in€the€utmost€good€faith.€€òòò òE.g.,€State€ex€rel.€Oliver€v.€Society€for€Preservation€ofÍCommon€Prayeróóó ó,€693€S.W.2d€340,€343€(Tenn.€1985).€€In€òòò òKnox„Tenn€Rental€Co.€v.€JenkinsÏIns.,€Inc.óóó ó,€755€S.W.2d€33€(Tenn.€1988),€our€supreme€court€further€observed:€ÌÌÓÓà8 àà àIn€a€broad€sense,€the€directors€and€officers€of€a€corporationÏare€its€agents.€€While€they€may€not€be€in€a€strict€sense€trustees,€it€isÏwell€established€that€they€occupy€a€fiduciary,€or€more€exactly€aÏquasi„fiduciary,€relation€to€the€corporation€and€its€stockholders.€Ï18B€Am.Jur.2d,€Corporations,€ðð€1689,€p.€541.€€An€agent€is€aÏfiduciary€with€respect€to€the€matters€within€the€scope€of€his€agency.€ÏThe€very€relationship€implies€that€the€principal€has€reposed€someÏtrust€or€confidence€in€the€agent€and€the€agent€or€employee€is€boundÏto€the€exercise€of€the€utmost€good€faith,€loyalty,€and€honesty€towardÏhis€principal€or€employer.€€3€Am.Jur.2d€Agency,€ðð€210,€p.€713.€ÏThe€correct€rule€on€the€status€of€a€corporate€officer€as€a€fiduciary€isÏfound€in€òòò òHayes€v.€Schweikartððs€Upholstering€Co.óóó ó,€402€S.W.2dÏ472,€483,€55€Tenn.App.€442€(1965),€citing€from€19€C.J.S.,€p.€107,Ïas€follows:ÌÌà8 àà8 àð ðA€corporate€officer€must€at€all€times€be€loyal€to€hisÏtrust€and€act€in€good€faith€and€unselfishly€toward€theÏcorporation€and€its€stockholders,€and€cannot€assumeÏpositions€in€conflict€with€the€interests€of€theÏcorporation;€but€the€restrictions€on€their€activitiesÏgrowing€out€of€the€fiduciary€status€extend€only€toÏsuch€corporate€interests€as€exist€at€the€time€or€mayÏreasonably€be€expected€in€the€development€of€theÏcorporate€business.€€If€the€officers€transcend€orÏabuse€their€powers,€they€are€as€much€responsible€toÏtheir€principal€as€the€agent€of€an€individual€is€toÏhim.ððÌÌà8 àà8 àð ðA€mere€employee€does€not€ordinarily€occupy€aÏposition€of€trust€or€confidence€toward€the€corporationÏunless€he€is€also€an€agent.€.€.€.ðð€Vol.€19€C.J.S.ÏCorporations€ðð€761b,€p.€107.ÌÌÌÌÓÓòòò òKnox„Tenn€Rentalóóó ó,€755€S.W.2d€at€36„37.€€The€òòò òHayesóóó ó€court€further€held€that€such€ð ðobligation€ofÏloyaltyðð€by€directors€and€officers€to€the€corporation€ð ðextend[s]€up€until€the€very€last€day€of€theirÏterms€of€office.ðð€€òòò òHayes€v.€Schweikartððs€Upholstering€Co.óóó ó,€402€S.W.2d€472,€482€(Tenn.€App.Ï1965).ÌÌà àHaving€addressed€the€applicable€law,€we€turn€attention€to€the€facts€of€our€case.€OnÍApril€1,€Heffernan€informed€the€other€directors/shareholders€of€his€intention€to€leave€theÏCorporation.€€He€physically€vacated€the€premises€in€early€May,€although€the€record€suggests€thatÏhis€original€intention€was€to€remain€with€Appellant€until€the€end€of€the€fiscal€year.€€Heffernan€wasÏadmittedly€compensated€by€the€Corporation€through€the€month€of€April€and€he,€undoubtedly,Ïremained€an€employee,€officer€and€director€of€the€Corporation€at€least€through€the€end€of€thisÏmonth.€€As€enunciated€in€òòò òHayesóóó ó,€his€fiduciary€duty€to€Appellant€extended€until€this€time.€As€aÏresult,€and€in€accordance€with€the€foregoing€law,€Heffernan€could€not€direct€business€toward€hisÏown€agency€during€this€period€without€violating€his€fiduciary€duty€to€Appellant.€€It€is€abundantlyÏclear,€however,€that€Heffernan€did€just€this;€it€being€never€more€apparent€than€when€HeffernanÏhimself€testified€that€he€wrote€new€business€for€his€own€agency€while€president€of€theÏCorporation.ÌÌà àThe€master,€likewise,€found€that€Heffernan€ð ðdirect[ed]€business€to€himselfðð€prior€toÏMay€31€and€that€his€purpose€for€doing€so€was€to€ensure€that€his€new€agency€would€be€allowed€theÏfuture€commissions€rather€than€the€Corporation.€€The€master€nonetheless€concluded€that€HeffernanÏwas€not€in€breach€of€his€fiduciary€duty€because€the€other€shareholders€ð ðknew€a€breakup€was€inÏprogressðð€and€that€Heffernan€was€ð ðgoing€to€leave.ðð€€Inasmuch€as€the€masterððs€findings€in€thisÏregard€involved€mixed€questions€of€law€and€fact,€we€do€not€find€ourselves€bound€by€theÏconcurrent€finding€rule€and,€therefore,€hold€that€Heffernan€breached€his€fiduciary€duty€to€theÏCorporation.€€As€a€consequence€thereof,€he€must€forfeit€a€portion€of€the€compensation€otherwiseÏdue€him.€ÌÌà àIn€òòò òWilshire€Oil€Co.€v.€Riffeóóó ó,€406€F.2d€1061€(10th€Cir.€1969),€the€plaintiffÏcorporation€filed€suit€against€its€former€corporate€officer€to€recover€compensation€paid€the€officerÏð ðduring€the€period€he€was€interested€in€a€competitive€corporation.ðð€€òòò òWilshire€Oilóóó ó,€406€F.2d€atÏ1062.€€òòò òWilshireóóó ó€quoted€the€general€rule€that€corporate€officers€who€engage€in€activities€whichÏconstitute€a€breach€of€their€duty€of€loyalty€or€who€willfully€breached€their€contract€of€employmentÍare€not€entitled€to€compensation€for€services€performed€during€that€time€period€even€though€part€ofÏtheir€services€were€properly€performed.€€òòò òIdóóó ó.€€òòò òSee€In€re€Omni€Mechanical€Contractors,€Inc.óóó ó,€114ÏB.R.€518€(Bankr.€E.D.€Tenn.€1990);€5A€William€M.€Fletcher,€òòò òFletcher€Cyclopedia€of€the€Law€ofÏPrivate€Corporationsó óóó€ðð€2145€(perm.€ed.€rev.€vol.€1995).€€The€court,€in€quoting€from€theÏRestatement€(Second)€of€Agency€ðð€469,€further€acknowledged€that€ð ð[a]n€agent,€who,€without€theÏacquiescence€of€his€principal,€acts€for€his€own€benefit€or€for€the€benefit€of€another€in€antagonism€toÏor€in€competition€with€the€principal€in€a€transaction€is€not€entitled€to€compensation€which€otherwiseÏbe€due€him.ðð€€òòò òWilshireóóó ó€found€the€foregoing€rule€applicable€to€the€facts€before€it€and€allowed€theÏplaintiff€to€recoup€the€compensation€paid€the€corporate€officer€during€the€period€of€time€that€theÏð ðfailure€commencedðð€to€its€end.€€òòò òIdóóó ó.€€òòò òWilshireóóó ó€determined€that€the€period€of€violation€was€sevenÏmonths€and€awarded€the€plaintiff€an€amount€equal€to€seven„twelfths€of€all€compensation€paid€theÏofficer€for€that€particular€calendar€year.× ƒ. ××  ×€€òòò òIdóóó ó.€at€1062„63.ÌÌà àHeffernanððs€complaint€seeks€earned€commissions€and€his€share€of€corporate€profitsÏthrough€May€31,€1987.€€The€chancellorððs€award€to€Heffernan€was€based€on€earned€commissionsÏand€profits€for€the€entire€fiscal€year.€€As€heretofore€stated,€Heffernan€is€not€entitled€to€anyÏcompensation€for€the€period€in€which€he€was€in€breach€of€his€fiduciary€duty€to€Appellant.€€Clearly,ÏHeffernan€was€in€violation€of€this€fiduciary€duty€no€later€than€April€1.€€We,€therefore,€find€aÏremand€of€this€cause€to€the€trial€court€necessary€to€determine€the€commissions€and€profit€shareÏrightfully€due€Heffernan,€with€no€compensation€allotted€for€the€two€months€prior€to€the€end€of€theÏfiscal€year.ÌÌà àAs€to€the€commissions€allegedly€due€the€Corporation€from€Heffernan,€òòò òCentral€BusÏLines,€Inc.€v.€Hamilton€Natððl€Bankó óóó,€239€S.W.2d€583,€(Tenn.€App.€1951),€holds:€ÌÌÓÓà8 à[Corporate€officers]€are€not€permitted€to€deal€with€the€corporation€orÏits€assets€for€their€own€private€gain€and€cannot€deal€for€themselvesÏand€for€the€corporation€at€one€and€the€same€time€.€.€.€.€€If€they€do€soÏact€in€violation€of€their€trust,€they€must€account€for€any€profits€madeÏby€use€of€corporate€assets.€€ÌÌÌÌÓÓòòò òCentral€Bus€Linesóóó ó,€239€S.W.2d€at€585.€€Based€upon€the€foregoing,€we€believe€Appellant€entitledÏto€the€approximately€$15,000€in€commissions€that€were€placed€in€Heffernanððs€own€agency.× ƒ/ ××  ×€ÌÌà àWe€now€address€Appellantððs€final€issue€regarding€whether€Heffernan€should€beÏobligated€to€the€Corporation€for€the€$15,000€loaned€to€him.× ƒ0 ××  ×€€The€Master€determined€the€followingÏin€regard€to€this€issue:ÌÌÓÓà8 àà àThere€were€a€number€of€loans€made€by€the€corporation€toÏvarious€principals€over€a€period€of€years.€€These€loans€were€paid€offÏMay€25,€1986€and€each€of€the€principalsðð€loans€were€renewed€in€theÏamount€of€$15,000€on€June€25,€1986€.€.€.€€In€the€spring€of€1987,€atÏthe€time€Mr.€Heffernan€left€to€form€his€own€agency,€each€of€theÏprincipals€owed€the€corporation€$15,000.€.€.€.€€Mr.€Ballinger,€Mr.ÏPounds,€and€Mr.€Yarbrough€continued€using€the€old€corporateÏstructure€for€operation€of€business€for€another€year€and€perhaps€aÏlittle€longer€at€which€[time]€they€formed€the€new€corporationÏBallinger,€Pounds,€and€Yarbrough,€Inc.€€During€that€next€fiscal€yearÏwhich€began€after€May€31,€1987€the€remaining€principals€borrowedÏan€additional€$10,000€from€HBP&Y,€and€then€.€.€.€on€May€31,Ï1988€they€each€paid€back€$25,000.€€Mr.€Heffernan€never€paid€theÏ$15,000€he€had€borrowed,€and€the€question€is,€does€he€owe€thisÏmoney€to€HBP&Y€which€still€exists€as€a€shell€corporation.€€TheÏproof€is€not€clear,€but€presumably€the€$75,000€which€was€paid€intoÏthe€corporation€by€the€three€principals€and€other€assets€still€belong€toÏthe€old€corporation.€€The€answer€to€the€question€of€whether€Mr.ÏHeffernan€should€pay€the€old€corporation€$15,000€depends€onÏwhether€or€not€Mr.€Heffernan€is€making€claim€to€any€of€the€$75,000Ïwhich€was€paid€back.€€If€he€is€not€making€any€claim€to€the€$75,000Ípaid€in€by€the€defendants,€then€there€would€be€no€reason€for€him€toÏpay€back€the€$15,000€he€borrowed€since€the€defendants€had€theÏpower€to€draw€the€$75,000€out€at€any€time.€€Also€it€does€not€appearÏthat€the€money€was€used€to€pay€corporate€debts€existing€at€the€timeÏMr.€Heffernan€left.€€If€he€is€making€claim€to€part€of€the€$75,000,Ïthen€he€should€pay€back€the€money.ÌÌà8 àà àIt€should€be€noted€that€Mr.€Heffernan€is€not€required€to€payÏback€the€$15,000.€€It€should€be€treated€as€income€and€presumably€heÏshould€show€this€as€income€on€his€tax€return.€€ÌÌÌÌÓÓà àHeffernan€does€not€dispute€that€the€Corporation€loaned€him€$15,000€which€he€hasÏnot€repaid.€€We€believe€he€remains€obligated€to€the€Corporation€for€this€amount.€€Our€holding€inÏthis€regard€is€not€meant€to€preclude€Heffernanððs€recoupment€of€a€portion€of€this€amount,€should€theÏtrial€court€ultimately€deem€him€entitled€after€its€reconsideration€of€the€proper€amount€ofÏcompensation€due€Heffernan.ÌÌà àIt€results€that€the€judgment€of€the€trial€court€is€reversed,€with€this€cause€remanded€toÏthe€trial€court€with€instructions€to€recalculate€the€amount€of€compensation€due€Heffernan€in€light€of€Ìthe€breach€of€his€fiduciary€duty€to€the€Corporation.€€Costs€are€assessed€against€H.€PatrickÏHeffernan,€for€which€execution€may€issue€if€necessary.ÌÌÓÓÓ` Ü` È“XÓà à________________________________Ìà àFARMER,€J.ÌÌÌÌÌ______________________________ÌHIGHERS,€J.€(Concurs)ÌÌÌÌ______________________________ÌLILLARD,€J.€(Concurs)Ì