˙WPCļ …# VU:a %› 0(Ąb Éw@Õ4 ) 0l8 0D¤ č 0Jđ 0T: 0^Ž 0hė 0rT 0|Æ 0†B 0Č 1uX 0dÍ U *1B)[DC„ AMĮû!v~0vĶŽ B D3ž 0@Ņ AOÆ` 0D& D/j B™˜HP LaserJet 4Si/4SiMX PS 600dpiPSCRIPTĀĖĀääĀĀĖ0 ,†r‰AZ‹"Arial RegularX($ĄĄ- ų - —˜™Dš›œDžŸĶ€ŠDŌ ™š›œžŸ ĄĸŖ¤3|xĢ((3üŨ$¤¤Ũ ƒ!ŨŨ  Ũā  āōōÚ  Ú0Ú  Úķķ(#Ã$ōōÚ  Ú0Ú  Úķķ2 ˙˙0Indent1Ô2ÔÔ3  Ô2" ˙˙0Indent2ā0 āÔ2ÔÔ3  Ô2, ˙˙0Indent3ā0 āā0 āÔ2ÔÔ3  Ô26 ˙˙0Indent4ā0 āā0 āā0 āÔ2ÔÔ3  Ô2@ ˙˙0Indent5ā0 āā0 āā0 āā0 āÔ2ÔÔ3  Ô2J ˙˙0Indent6ā0 āā0 āā0 āā0 āā0 āÔ2ÔÔ3  Ô2T ˙˙0Indent7ā0 āā0 āā0 āā0 āā0 āā0 āÔ2ÔÔ3  Ô2^ ˙˙0Indent8ā0 āā0 āā0 āā0 āā0 āā0 āā0 āÔ2ÔÔ3  Ô ˙˙?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ˙˙8Mac DefaultMac DefaultĶ ` °šXĶ< Œ 9p`(Arial% Line 7 d""""7Border 1dd€-#Cū˙ << G˙˙ ņŨ ƒ!ŨŅ  ŅŅ#€d#ŅÔ€!ÔŨ  ŨÔ€!ÔĶ  Ķō ōÔ YYY ÔFILEDÔ€!XÔĖĖJanuary€15,€1997ĖĖCecil€W.€CrowsonĖAppellate€Court€ClerkÔ  Ôķ ķ Ũ ƒ!ŨŅ#€d#ŅÔ€!ÔŨ  ŨŌ € ŌŌ „ ŌÔ€!ôÔĶ  Ķā āōōÚ  ÚÚ  ÚķķSometime€before€he€retired,€Mr.€Sharp€agreed€that€Mr.€Tune€should€own€fify„five€percent€ofĪthe€company.ĖPtPtHHÚ(˙á˙âųFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃĐ ĐĐHHĐĐ  ĐĐ2ĐĐ˙˙¸æ$˙ĐĐHHĐĐĐĐĐĐĐĐ  ĐĐ ĐĐ ĐŅŅŅGenevaŅŅ ŅŅ € ŅŅ<Px–ČŅŌŌŌ443!#4ŌŌ$ *$ŌŌ$*$ŌŌ ˙KK ŌŌ  Geneva ŌŌ  Geneva ŌĶ.,ĶĶĶĶ6ĶĶ ĶßßßßßßßßßßßßßßßßßßŅGenevaŅŅ ŅŌ  h HD: Geneva ŌŌ  h HD: Geneva Ō d))))'˙˙dxd("˙˙$ŖŖŌ  ŌŌ  Ō€-‚ƒCū˙<< C˙˙ƒLevel 1Level 2Level 3Level 4Level 5($$””ō ōÚ  Ú1Ú  Úķ ķ„„'÷˙ dxdü˙P PdŨ ƒ!ŨÔ . ÔÔ€!ÔŨ  ŨŅ  ŅŌ € ŌŌ ° ŌŌ € ŌŌ „ ŌŅ\R AØ'\ŅŅ\R AØ'\ŅŅ€ŅŅ7€—ÕXXdædČ7ŅŅ  ŅŅ  Ņ›Ū ŪĖROBERT€K.€SHARP,ā āā āā ā)Ėā āā āā āā āā āā ā)Ėā āPlaintiff/Appellant,ā āā āā ā)ā āAppeal€No.Ėā āā āā āā āā āā ā)ā ā01„A„01„9606„CH„00279Ėā āā āā āā āā āā ā)ā ā˜VS›.ā āā āā āā āā āā ā)ā āDavidson€ChanceryĖā āā āā āā āā āā ā)ā āNo.€94„99„I(II)˜Ų€€ŲßR€$%#A1-j|oL` į `€€@˙Rߛā āā āā āā āā āā ā)ā āĖJOHNNY€R.€TUNE€and€TUNEā āā ā)ā āĖINSURANCE€CENTER,€INC.,ā āā ā)ā āĖā āā āā āā āā āā ā)ā āĖā āDefendants/Appellees.ā āā ā)ĖĖĖā@ āCOURT€OF€APPEALS€OF€TENNESSEEĖā@ āMIDDLE€SECTION€AT€NASHVILLEĖĖĖAPPEALED€FROM€THE€CHANCERY€COURT€OF€DAVIDSON€COUNTYĖAT€NASHVILLE,€TENNESSEEĖĖTHE€HONORABLE€ELLEN€œHOBBS›€LYLE,€CHANCELLORĖĖĖĖĖĖF.€CLAY€BAILEY,€JR.ĖTUNE,€œENTREKIN›€&€WHITEĖ315€œDeaderick›€StreetĖFirst€American€Center,€œ21st›€FloorĖNashville,€Tennessee€37238Ėā āAttorney€for€Plaintiff/AppellantĖĖTHOMAS€W.€œHARDIN›ĖœHARDIN›€&€PARKESĖ102€West€Seventh€StreetĖP.€O.€Box€692ĖColumbia,€Tennessee€38402„0692Ėā āAttorney€for€Defendants/AppelleesĖĖĖĖĖĖā@ āAFFIRMED€AND€REMANDEDĖĖĖĖĖĖā āā āā āā āā āā āā āBEN€H.€CANTRELL,€JUDGEĖĖĖCONCUR:ĖTODD,€P.J.,€M.S.ĖLEWIS,€J.ĖĖĖĶĶĶ  Ķā@ āō ōōōÔ€!„ÔO€P€I€N€I€O€Nķ ķķķÔ€!XÔĖĖā āā āOne€of€the€founders€of€an€insurance€agency€œclaimed€that›€his€stock€inĪthe€company€is€being€held€in€trust€by€the€other€founder.€€The€Chancery€Court€ofĪDavidson€County€held€that€the€plaintiff€failed€to€prove€his€case€by€the€high€degreeĪof€proof€required€to€establish€an€oral€trust.€€We€œaffirm€the€chancellorđđs€dismissal€ofĪthe€claim,€but€on€the€alternate€ground€that€the€plaintiff€failed€to€prove€that€heĪsatisfied€the€conditions€precedent€to€the€obligation€to€convey€the€shares€to€him.›ĖĖā@ āō ōI.ķ ķĖĖā āā āIn€1987,€Robert€K.€Sharp,€an€agent€with€Allstate€InsuranceĪCompany,€and€Johnny€R.€Tune,€a€veteran€insurance€agent,€agreed€to€start€anĪinsurance€agency.€€Sharp€agreed€to€get€some€of€his€friends€to€invest€$40,000€forĪwhich€they€would€own€œforty€percent€(800›€œshares)›€œof›€the€company.€€œThe€remainingĪ1200€shares€in€the€company€were€issued€to€Mr.€Tune.€€Six€hundred€of€the€sharesĪwere€to€belong€to€Mr.€Tune€absolutely.€€The€conditions€under€which€he€held€theĪremaining€600€shares€are€the€subject€of€this€dispute.€€ĖĖā āā āMr.›€Tune€immediately€joined€the€company€and€brought€his€book€ofĪbusiness€with€him.€€Mr.€Sharp€continued€with€Allstate,€anticipating€that€he€wouldΜjoin€the€agency€at€some€future€date.›ĖĖā āā āœMr.›€Sharp€contends€that€Mr.€Tune€held€600€shares€in€trust,€to€beĪdelivered€to€Mr.€Sharp€when€he€retired€from€Allstate.€€Allegedly,€Mr.€SharpđđsĪreason€for€having€Mr.€Tune€hold€the€shares€for€him€was€that€he€didnđđt€wantĪAllstate€to€know€he€had€an€interest€in€another€company.€€œ(Mr.€Sharp€had,Īhowever,€held€an€interest€in€another€agency€while€employed€at€Allstate.€€WhenĪthe€parties€established€the€Tune€Agency€they€assumed€a€debt€of€approximatelyĪ$26,000€from€Mr.€Sharpđđs€former€company.)€€Mr.›€Tune€contends€that€as€aĪcondition€precedent€to€Mr.€Sharpđđs€right€to€receive€the€shares€Mr.€Sharp€had€toĪrefer€business€to€the€new€agency,€join€the€business€on€a€full€time€basis€when€heÍretired€in€1990,€and€bring€œwith€him€his›€book€of€œbusiness€generating€approximatelyĪ$1,000,000€in€annual€premiums.›ĖĖā āā āœThe›€firm€prospered€œunder€Mr.€Tuneđđs€control,€and›€Mr.€Tune€had€theĪcompany€buy€out€the€outside€investors€for€$65,000.€€Mr.€Tune€and€his€wifeĪpersonally€guaranteed€a€$40,000€bank€loan€to€be€used€in€the€transaction.€€InĪ1988,€Mr.€Sharp€needed€to€borrow€some€œmoney,€so€he›€asked€Mr.€Tune€to€beĪallowed€to€use€600€shares€of€the€company€stock€œas€collateral€for›€the€loan.€€Mr.ĪTune€agreed€on€the€condition€that€he€retain€the€voting€rights€and€that€the€stock€beĪreturned€to€him€when€the€loan€was€repaid.€€œ›œ›œ›ĖœĖ›ā āā āœMr.€Sharp€retired€from€Allstate€in€November€of€1990.€€He€joined€theĪTune€Agency,€repaid€the€loan,€and€delivered€the€stock€certificate€back€to€Mr.ĪTune.€€He›€was,€however,€unable€to€devote€much€time€to€his€work€because€ofĪmounting€financial€difficulties€and€his€wifeđđs€illness.€€He€executed€a€petition€inĪbankruptcy€and€fought€with€the€Internal€Revenue€Service€over€a€tax€claim.€€He€didĪnot€take€any€part€in€the€management€of€the€business,€but€he€did€share€in€theĪrevenues€on€a€œ45„55× ƒ& ××  כ€basis€with€Mr.€œTune€for€the€years€of€1990,€1991€and€1992.›ĖĖā āā āAlthough€Mr.€Tune€continued€to€encourage€Mr.€Sharp€to€spend€moreĪtime€at€the€agency,€the€relationship€between€the€parties€cooled€œlate›€œin€1992›€whenĪMr.€Tune€would€not€agree€to€allow€the€company€to€loan€money€to€Mr.€Sharp€or€Mr.ĪSharpđđs€son.€€In€May€of€1993€Mr.€Sharp€left€the€company€after€failing€to€get€Mr.ĪTuneđđs€agreement€that€he€(Mr.€Sharp)€owned€forty„five€percent€of€the€œcompany.€ĪHe€filed€this€action€claiming€a€full€one„half€of€the€stock.›ĖĖā@ āō ōII.ķ ķĖĖā āā āThe€chancellor€held€that€Mr.€Sharp€had€failed€to€carry€the€highĪburden€of€proof€required€to€establish€a€parol€trust.€€See€ōōGray€v.€œTodd›ķķ,€819€S.W.2dĪ104€(Tenn.€App.€1991).€€Mr.€Sharp€argues€that€the€proof€does€establish€the€trustĪand€that€Mr.€Tune,€as€the€trustee,€has€the€burden€of€proving€his€version€of€theĪconditions€under€which€he€held€title€to€the€shares.€€See€ōōœBrowder›€v.€œHite›ķķ,€602ĪS.W.2d€489€(Tenn.€App.€1980).ĖĖā āā āThe€legal€theories€relied€on€by€the€parties€are€correct,€but€the€troubleĪis€that€they€are€fighting€on€different€fronts.€€The€œarguments›€do€not€meet,€probablyĪbecause€they€are€both€focusing€on€who€has€the€burden€of€proof€rather€than€whatĪthe€evidence€actually€establishes.ĖĖā āā āThe€proof€is€clear€that€œin€the€beginning€Mr.›€Sharp€was€to€have€anĪequal€ownership€interest€in€the€Tune€Agency€when€certain€conditions€were€met.€ĪœTherefore,›€Mr.€Tune€was€holding€600€shares€of€the€agency€stock€subject€to€œaĪcontractual›€€obligation€to€transfer€them€to€Mr.€Sharp€when€he€satisfied€theĪconditions.€€Mr.€œSharp›€œsays€he€had€satisfied€all€the€conditions.›€€Mr.€œTune€says€Mr.ĪSharp€failed€to€fulfill€the€two€most€important€conditions:€to›€come€to€work€full€timeĪwhen€he€retired€from€Allstate€and€œto€bring›€a€$1,000,000€book€of€business€withĪhim.ĖĖā āā āThe€truth€of€the€matter€depends€mainly€œon›€the€credibility€of€the€twoĪparties.€€The€circumstantial€evidence€is€about€evenly€balanced.€€On€one€hand€Mr.ĪSharp€points€to€the€fact€that€he€shared€in€the€profits€once€he€retired€from€Allstate;Īthat€he€used€his€shares€as€collateral€for€a€loan€in€1988;€that€in€December€of€1988ĪMr.€Tune€asked€an€attorney€to€prepare€documents€reflecting€the€partiesđđĪagreement€and€did€not€mention€the€conditions€he€now€insists€on;€and€that€the€firstĪtime€Mr.€Tune€mentioned€the€additional€conditions€was€in€1993€when€the€partiesĪwere€in€open€dispute€about€the€shares.ĖĖā āā āOn€the€other€hand,€Mr.€Sharp€did€not€demand€œthe€stock›€when€heĪretired€œfrom›€œAllstate€nor€did›€œhe›€ask€that€the€stock€be€issued€to€œhim€when€he€paidĪoff€the€loan,€even€though€he€had€retired€by€that€time.›€€In€documents€executed€inĪ1989€and€1991€he€took€inconsistent€positions€with€respect€to€his€ownership€ofÍstock€in€the€agency.€€In€financial€statements€filed€with€two€different€banks€in€1989,Īhe€claimed€œhe›€œowned›€1,000€shares€in€the€corporation€and€that€they€were€worthĪ$300,000.€€In€1991€he€executed€a€petition€to€be€filed€in€the€bankruptcy€court€œbutĪhe›€did€not€list€the€stock€as€an€asset.€€In€1993€he€œdenied€owning€any€shares€in€aĪcorporation€when€he€had€to€file€a€financial€statement€with€the›€Internal€RevenueΜService.›ĖĖā āā āWith€respect€to€the€partiesđđ€credibility€œthe›€chancellor€made€only€oneĪspecific€finding.€€She€found€that€Mr.€Tuneđđs€testimony€was€credible€when€heĪtestified€that€he€did€not€sign€the€papers€prepared€by€the€attorney€because€đ đtheĪpapers€did€not€reflect€his€understanding€of€the€partiesđđ€positions.đđĖĖā āā āThe€chancellor€did,€however,€make€implicit€findings€with€respect€toĪMr.€Sharpđđs€credibility.€€First,€she€found€as€a€fact€that,ĖŌ 0 ŌŌ „ ŌŌ 0 ŌŌ  ŌĶĶā āThe€bankruptcy€papers€contained€a€number€ofĪinaccuracies,€such€as€the€plaintiff€stated€in€the€bankruptcyĪpaper€that€no€one€else€was€holding€property€for€him€andĪthat€no€one€was€holding€anything€of€value€for€him.€€TheĪplaintiff€also€stated€in€the€papers€that€he€was€not€theĪowner€of€any€stock.€€All€of€these€statements€were€madeĪunder€oath€at€a€time€when€the€plaintiff€thought€the€papersĪwould€be€filed.ĖĖŌ € ŌŌ  ŌThen,€in€her€conclusions€she€stated,ĖĖŌ 0 ŌŌ  Ōā āSpecifically,€the€Court€concludes€from€the€testimonyĪof€the€parties€that€from€the€outset€of€the€formation€of€TuneĪInsurance€Center€the€parties€had€no€definite€agreement€orÍdecision€regarding€how€ownership€by€the€plaintiff€of€stockĪin€the€corporation€would€be€handled.€€Thereafter,€theĪtransaction,€where€600€shares€of€stock€was€pledged€toĪsecure€a€loan€and€held€by€Davenport€as€trustee,€similarlyĪdemonstrated€no€clear€agreement€by€the€parties€regardingĪthe€ownership€of€the€600€shares€of€stock.€€That€uncertaintyĪwas€further€manifested€by€the€plaintiffđđs€inaction€as€to€theĪstock€when€it€was€released€as€security.€€That€is,€in€1990Īwhen€the€plaintiff€had€left€his€employment€with€Allstate,Īwas€no€longer€under€the€constraint€of€đ đmaking€waves€withĪAllstate,đđ€had€commenced€employment€with€TuneĪInsurance€Center,€had€paid€off€the€note€held€by€RichardĪDavenport€as€trustee€and€the€stock€was€returned€to€TuneĪInsurance€Center,€the€plaintiff€did€not€seek€transfer€of€theĪstock€to€him.€€At€that€critical€time,€the€plaintiff€did€not€actĪconsistent€with€the€theory€he€has€posited€with€the€Court,Īi.e.€that€defendant€Tune€was€holding€the€stock€for€theĪplaintiff€until€the€plaintiff€left€Allstate€and€was€no€longerĪconstrained€by€perceptions€of€Allstate.ĖĖā āAgainst€this€backdrop€of€uncertainty€is€the€highlyĪsignificant€evidence€regarding€plaintiff€SharpđđsĪinconsistent€public€representations€about€the€ownershipĪand€holding€of€the€stock.€€On€one€hand,€in€1989,€whenĪtrying€to€secure€a€loan,€he€represented€to€two€differentĪbanks€that€he€owned€1000€shares€of€stock€in€TuneĪInsurance€Center€which€he€valued€at€$300,000.00.€€ButĪthen,€in€1991,€when€signing€bankruptcy€documents€inĪwhich€he€attested€under€oath€to€the€veracity€of€theĪdocuments,€plaintiff€Sharp€failed€to€reveal€ownership€ofĪthe€stock€or,€at€a€minimum,€state€that€the€stock€was€beingĪheld€for€him€by€another.€€Additionally,€in€documents€filedĪwith€the€IRS€in€December€of€1992,€plaintiff€Sharp€also€didĪnot€reveal€his€alleged€stock€ownership.ĖĖā āIt€is€apparent€from€the€foregoing€that€at€differentĪtimes€plaintiff€Sharp€made€different€representations€andĪacted€inconsistently€about€his€ownership€of€stock€in€TuneĪInsurance€Center.€€Such€inconsistent€and€variedĪmanifestations€by€the€plaintiff€fall€well€below€the€highÍstandard€of€proof€required€to€justify€a€court€imposing€aĪconstructive€trust€based€on€a€parol€agreement.ĖĖĖĖŌ € ŌŌ  ŌŌ € ŌŌ „ ŌĶĶā āā āWe€think€these€findings€and€conclusions€demonstrate€that€theĪchancellor€œresolved›€the€credibility€issue€against€Mr.€œSharp€and€in€favor€of€Mr.ĪTune.›€€œWithout›€œcredible›€testimony€œby€Mr.€Sharp€that›€the€only€thing€he€had€to€doĪwas€demand€his€shares€from€Mr.€Tune,€he€has€indeed€failed€to€carry€his€burden€ofĪproof€„„€whether€œthat€is›€a€high€œstandard,›€or€merely€a€preponderance€of€theĪevidence.ĖĖā āā āThe€judgment€of€the€court€below€is€affirmed€and€the€cause€isĪremanded€to€the€Chancery€Court€of€Davidson€County€for€any€further€proceedingsĪthat€may€become€necessary.€€Tax€the€costs€on€appeal€to€the€appellant.ĖĖĶ͜ĖĖĖ›ā āā āā āā āā āā ā_____________________________Ėā āā āā āā āā āā āBEN€H.€CANTRELL,€JUDGEĖĖĖ˜ĖCONCUR:›ĖĖĖĖĖ_______________________________ĖHENRY€F.€TODD,€PRESIDING€JUDGEĖMIDDLE€SECTIONĖĖĖĖĖ_______________________________ĖSAMUEL€L.€LEWIS,€JUDGEĖĖĮŅ  Ņā@ āIN€THE€COURT€OF€APPEALS€OF€TENNESSEEĖā@ āMIDDLE€SECTION€AT€NASHVILLEĖĖĖĖĖROBERT€K.€SHARP,ā āā āā ā)Ėā āā āā āā āā āā ā)Ėā āPlaintiff/Appellant,ā āā āā ā)ā āAppeal€No.Ėā āā āā āā āā āā ā)ā ā01„A„01„9606„CH„00279Ėā āā āā āā āā āā ā)ā ā˜VS.›ā āā āā āā āā āā ā)ā āDavidson€ChanceryĖā āā āā āā āā āā ā)ā āNo.€94„99„I(II)Ėā āā āā āā āā āā ā)ā āĖJOHNNY€R.€TUNE€and€TUNEā āā ā)ā āAffirmedĖINSURANCE€CENTER,€INC.,ā āā ā)ā āandĖā āā āā āā āā āā ā)ā āRemandedĖā āDefendants/Appellees.ā āā ā)ĖĖĖā@ āō ōōōÔ€!ŧÔJ€U€D€G€M€E€N€Tķ ķķķÔ€!XÔĖĖĖĶĶā āā āThis€cause€came€on€to€be€heard€upon€the€record€on€appeal€from€theĪChancery€Court€of€Davidson€County,€briefs€and€argument€of€counsel;€uponĪconsideration€whereof,€this€Court€is€of€the€opinion€that€in€the€decree€of€theĪChancellor€there€is€no€reversible€error.Ėā āā āIn€accordance€with€the€opinion€of€the€Court€filed€herein,€it€is,Ītherefore,€ordered€and€decreed€by€this€Court€that€the€decree€is€affirmed.€€TheĪcause€is€remanded€to€the€Chancery€Court€of€Davidson€County€for€theĪenforcement€of€the€decree€and€for€the€collection€of€the€costs€accrued€below.Ėā āā āCosts€of€this€appeal€are€taxed€against€Robert€K.€Sharp,€Principal,Īand€F.€Clay€Bailey,€Surety,€for€which€execution€may€issue€if€necessary.Ėā āā āENTER€_______________________.ĖĖĶĶĶ` °ƒX.h—XĶā āā āā āā āā āā ā_________________________________Ėā āā āā āā āā āā āHENRY€F.€TODD,€PRESIDING€JUDGEĖā āā āā āā āā āā āMIDDLE€SECTIONĖĖā āā āā āā āā āā ā_________________________________Ėā āā āā āā āā āā āSAMUEL€L.€LEWIS,€JUDGEĖĖā āā āā āā āā āā ā_________________________________Ėā āā āā āā āā āā āBEN€H.€CANTRELL,€JUDGEĖĖā āā āā āā āā āā ā