ÿWPC‹ 3# ÚUNå %3 0(9w@a4¡µÄLÌU:  0JZ 0T¤ 0^ø 0hV 0r¾ 0|0 0†¬ 02 1u 0d7 AQ› Æì 0D² 0@ö 0D6 D/z B© BÆ D3ã U> U *T B)~ DC§ AMê 7 v~:vÓ¸˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLNÎ(ÈhH  Z 6Times New Roman RegularX($¡¡ ÌDÍDÎDÏÐDÑÒDÓÔÓ€àn~<$--123|xàC:\OFFICE\WPWIN\TEMPLATE\STANDARD.WPT_"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 !"#%Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý("ÿÿ$££Ò  ÒÒ  Ò($$””ò òÚ  Ú1Ú  Úó ó'''÷ÿ dxd düÿP Pd&&&&'ÿÿdxd< Œ 9p`(&Times New Roman< Œ 9p`(Arial% Line 7 d----7Border 1dd ".Cþÿ << Gÿÿ ùÝ ƒ!ÝÔ€+ÔÝ  ÝÝ ƒ!"ÝÝ  ÝÔ€,ÔÔ€,ÔÓ  ÓÔ YYY ÔFILEDÔ€,XÔÌÌò òJuly€30,€1998ÌÌCecil€Crowson,€Jr.ÌÔ€,ôÔAppellate€Court€Clerkó óPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{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  h HD: Geneva ÒÒ  h HD: Geneva ÒÝ ƒ!ÝÔ . ÔÔ€+ÔÝ  ÝÓ  ÓÑ\R AØ'\ÑÔ€,Ô›Þ ÞÌà@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àœAT›€JACKSONÌÌÌHENRY€DANIEL€ANDREWS,à àà à)€€Ìà àà àà àà àà àà à)Ìà àà àó óPlaintiff/Appellee,à àà àò ò)€€Shelby€Chancery€No.€107152„1€R.D.Ìà àà àà àà àà àà à)ÌVS.à àà àà àà àà àà à)€€Appeal€No.€02A01„9708„CH„00202ÌÙ€ ÙœßR€/0.A1-j|Àûm` Å `€€@ÿRß›à àà àà àà àà àà à)ÌLUBRICON,€L.P.,à àà àà àà à)ÌPROGRESSIVE€CAPITAL€à àà à)ÌINVESTMENT€CORP.,à àà àà à)Ìand€CRAMER€ENTERPRISES,€INC.,à à)Ìà àà àà àà àà àà à)Ìà àà àó óDefendants/Appellants.à àò ò)ó óÌÌÌà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€SHELBY€COUNTYÌà@ àAT€MEMPHIS,€TENNESSEEÌà@ àTHE€HONORABLE€NEAL€SMALL,€CHANCELLORÌÌÌÌÌÌÌÌÌò òMICHAEL€B.€NEALó óÌò òKRIVCHER€MAGIDS€PLCÌó óMemphis,€TennesseeÌAttorney€for€AppellantsÌÌÌÌò òRALPH€D.€GOLDENÌGOLDEN€&€MATHISó óÌMemphis,€TennesseeÌAttorney€for€AppelleeÌÌÌÌÌò òAFFIRMEDÌÌÌÌÌÌÌó 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.ó óà àœÌÓÓà àThis›€appeal€is€taken€from€the€judgment€of€the€Shelby€County€Chancery€CourtÏwhich€Ñ7€ kž XXdðXXdð7Ñheld€that€the€plaintiff€was€entitled€to€a€judgment€against€the€defendants€forÏ$263,636.71€arising€from€an€unpaid€debt€obligation€and€unpaid€consulting€fees.€€AfterÏdue€consideration€of€the€appeal,€the€Court€affirms€the€ruling€of€the€trial€court.€€€œÌ›€€€Ìà@ àœò òÔ€,¼ÔFACTSÔ€,XÔó óÌ›à àThe€plaintiff€Dan€Andrews€is€a€former€retail€store€executive€with€over€twentyÏyears€of€experience.€€œAfter›€leaving€his€job€as€the€chief€financial€officer€of€majorÏdepartment€store€chain,€Andrews€became€a€consultant€and€an€entrepreneur,€investingÏin€a€variety€of€ventures.ò ò€€œó óOne›€such€venture€was€The€Marketing€Group,€L.P.,€a€limitedÏpartnership€organized€to€market€products€via€televised€ð ðinfomercials.ððò ò€€œó óIn›€1992,ÏAndrews€invested€$10,000€in€The€Marketing€Group€and€signed€a€$40,000€note€onÏbehalf€of€The€Marketing€Group€to€complete€his€$50,000€subscription.€€œò ò€ó óIn›€1993,€TheÏMarketing€Group€enjoyed€strong€sales€in€excess€of€$7.8€Million.€€œHowever,›€despite€theÏstrong€sales,€The€Marketing€Group€was€losing€money,€and€by€the€end€of€1993,€thereÍwas€ð ðsubstantial€doubtðð€as€to€whether€the€partnership€could€continue€as€a€goingÏconcern.€€That€apprehension€was€reflected€in€the€partnershipððs€audited€financialÏstatements€of€1992€and€1993.€œò òÌó ó›Ìà àThe€Marketing€Group€was€owned€by€two€general€partners€and€a€number€ofÏlimited€partners.€€The€general€partners€were€Cramer€Enterprises,€Inc.,€(hereinafter,Ïð ðCramer€Enterprisesðð)€and€Progressive€Capital€Investment€Corporation€(hereinafter,Ïð ðProgressiveðð),€an€investment€banking€firm.€€Cramer€owned€45€percent€of€TheÏMarketing€Group€and€served€as€the€managing€general€partner,€running€the€day„to„dayÏoperations.€€œProgressive›€owed€5€percent€of€the€shares€of€the€partnership€œand›€servedÏas€the€administrative€general€partner,€raising€capital€for€the€partnership.€€œThe›€limitedÏpartners€owned€the€remaining€50€percent€of€the€outstanding€shares€of€The€MarketingÏGroup.€€œAfter›€a€priority€return€of€profits€to€the€original€investors,€Cramer€EnterprisesÏreceived€45€percent€of€the€profits€of€The€Marketing€Group,€Progressive€received€5Ïpercent€of€the€profits,€and€the€remaining€50€percent€of€the€profits€were€distributed€to€theÏlimited€partner€investors.€€In€addition€to€receiving€45€percent€of€the€profits,€CramerÏEnterprises€received€3€percent€of€the€gross€sales€of€The€Marketing€Group€before€anyÏmoney€was€paid€to€investors€or€paid€to€creditors.€€Andrews€was€hired€by€CramerÏEnterprises€in€May,€1993,€to€be€a€consultant€for€The€Marketing€Group€to€help€with€aÏmyriad€of€marketing,€financial€planning,€operations€and€sales€projects.€€œAndrews›€wasÏto€be€paid€$5,000€per€month€for€his€services.€œò òÌó ó›Ìà àAs€previously€noted,€The€Marketing€Group€enjoyed€strong€sales€in€1993€andÍtherefore€needed€to€have€large€inventories€of€goods€on€hand.€€Being€short€on€cash,Ïthe€partnership€enlisted€the€aid€of€a€factoring€company€which€permitted€the€partnershipÏto€turn€over€its€accounts€receivable€in€exchange€for€immediate€credit.€€However,€theÏfactoring€company€required€$500,000€in€security,€which€The€Marketing€Group€did€notÏhave.€€Therefore,€in€œAugust›€1993,€Andrews€agreed€to€loan€$500,000€to€The€MarketingÏGroup€to€pay€to€the€factoring€company.€€On€August€11,€1993,€and€later€on€August€15,Ï1993,€Andrews€wrote€two€checks€to€The€Marketing€Group,€totaling€$500,000.€€€BothÏchecks€bore€the€notation€ð ðLoan.ðð€€œThere›€was€no€note€executed€between€Andrews€andÏThe€Marketing€Group,€but€all€parties€agreed€that€Andrews€loaned€$500,000€to€theÏpartnership€and€that€he€became€an€unsecured€creditor.€€œIn›€fact,€the€terms€of€the€debtÏwere€noted€in€The€Marketing€Groupððs€audited€financial€statement€for€1992€and€1993.€ÏœThe›€audited€financial€statement€provided€in€relevant€part:ÌÓÓà8 àà8 àThe€note€payable€represents€$500,000€advanced€by€aÏlimited€partner€to€the€Partnership€in€August,€1993.€€The€noteÏbears€interest€at€16%,€is€unsecured,€and€is€due€on€demand.€ÏThe€related€accrued€interest€due€to€the€limited€partnerÏtotaled€$31,768€as€of€December€31,€1993.€œÌ›€œ›à àà àÌÓÓœEvidently,›€Andrews€borrowed€a€portion€of€the€money€that€he€loaned€to€The€MarketingÏGroup.€œò òÌó ó›Ìà àIn€the€Spring€of€1994,€The€Marketing€Groupððs€sales€had€declined€drastically.€ÏTherefore,€the€managing€general€partner,€Cramer€Enterprises,€moved€its€operationsÏfrom€Atlanta,€Georgia,€to€Progressiveððs€offices€in€Memphis.€€œCramer›€Enterprises€wasÏowned€by€Michael€Lynn,€John€Williams,€Thomas€Peters€and€Thomas€Cramer.€€œThomas›ÏCramer,€the€president€and€founder€of€Cramer€Enterprises,€left€Cramer€Enterprises€atÍthe€time€of€the€move,€and€his€35€percent€of€the€outstanding€shares€of€CramerÏEnterprises€reverted€to€the€corporationððs€treasury.ò ò€€œó óLynn,›€Williams€and€Peters€wereÏalso€the€shareholders€of€Progressive.€€Therefore,€as€of€the€Spring€of€1994,€both€of€TheÏMarketing€Groupððs€general€partners,€Progressive€and€Cramer,€were€operating€out€ofÏthe€same€offices€in€Memphis.€œò òÌó ó›Ìà àIn€June,€1994,€The€Marketing€Group€paid€Andrews€$387,000€as€partialÏrepayment€on€the€outstanding€debt.€€œIn›€October,€1994,€Andrews€loaned€the€partnershipÏan€additional€$36,000,€and€in€February,€1995,€the€partnership€repaid€Andrews€anÏadditional€$48,000,€leaving€an€outstanding€balance€due€to€Andrews€on€the€note€ofÏ$101,000.€€œIn›€the€Spring€of€1995,€Andrews€told€the€shareholders€of€The€MarketingÏGroup€that€he€was€owed€approximately€$300,000€in€unpaid€debt€plus€interest€andÏunpaid€consulting€fees.€€Andrews€had€been€paid€for€his€consulting€services€for€onlyÏtwo€months€prior€to€œMay›€1995,€though€after€that€time,€he€was€paid€for€the€11€months€heÏremained€from€œMay›€1995,€until€his€departure€in€œMarch›€1996.€ò ò€ó óIn€all,€Andrews€was€paidÏfor€only€13€of€the€35€months€he€worked€as€a€consultant€to€The€Marketing€Group.€ÏThough€not€the€subject€of€the€instant€suit,€The€Marketing€Group€also€owed€ProgressiveÏapproximately€$440,000,€which€Progressive€had€borrowed€on€the€partnershipððs€behalfÏfrom€the€National€Bank€of€Commerce€in€Memphis.€€Ìà àIt€was€readily€evident€to€the€shareholders€of€The€Marketing€Group€that€the€onlyÏhope€of€repaying€the€debts€and€salvaging€the€business€was€to€generate€sales.€ÏProjections€prepared€by€Andrews€and€others€indicated€that€annual€sales€ofÏ$30,000,000€were€possible€through€sales€of€a€new€product€named€ð ðEngine€œIce,ðð›€andÍaround€that€time,€The€Marketing€Group€changed€its€name€to€ð ðLubricon,€L.P.ðð€to€reflectÏits€new€direction.€œ›€€However,€the€fiscal€problems€remained.€€Had€the€projected,€thoughÏunprecedented€sales€of€$30€œmillion›€materialized,€Cramer€Enterprises€could€haveÏrealized€at€least€$900,000€annually€due€to€its€right€to€3€percent€of€The€MarketingÏGroup/Lubriconððs€gross€sales.€œÌ›Ìà àOn€May€19,€1995,€Cramer€Enterprises€held€a€shareholders€meeting.ò ò€€œó óPrior›€toÏthe€meeting,€Cramerððs€ownership€was€as€follows:€John€Williams,€35€percent;€MichaelÏLynn,€7.5€percent;€and€Thomas€Peters,€22.5€percent.€€The€remaining€35€percentÏpreviously€owned€by€Thomas€Cramer€had€been€promised€to€Dan€Andrews€in€theÏamount€of€20€percent€and€to€Pat€Adams€in€the€amount€of€15€percent,€though€PetersÏtestified€that€the€shares€were€ð ðnot€really€issuedðð€to€either€Andrews€or€Adams.€€œIncluded›Ïamong€the€items€on€the€agenda€was€the€$300,000€in€unpaid€debt€and€compensationÏowed€to€Andrews.€€The€minutes€of€the€May€19,€1995,€meeting€indicate€that€anÏagreement€was€reached€to€repay€Lubriconððs€debts€to€both€Andrews€and€Progressive.€ÏThe€minutes€of€the€shareholderððs€meeting€constitute€the€only€written€documentÏmemorializing€the€partiesðð€agreement€and€intentions€regarding€the€repayment€of€theÏdebt€owed€to€Andrews.€The€relevant€portions€of€the€minutes€written€by€the€corporateÏsecretary,€D.€Patterson€(ð ðPatðð)€Adams€are€set€forth€below:ÌÓÓà8 àà8 àA€meeting€of€the€Cramer€Enterprises€stockholders€was€heldÏat€the€offices€of€The€Memphis€Group€in€Memphis,ÏTennessee,€pursuant€to€notice€duly€given.€€In€attendanceÏwere€stockholders€S.€Thomas€Peters,€C.€Michael€Lynn€andÏJohn€Williams;€guests€were€Dan€Andrews€and€PattersonÏAdams.€€Ìà àà à.....ÌÌà8 àà8 àThe€next€order€of€business€was€to€address€the€approximateÏ$300,000€owed€to€Dan€Andrews€and€the€equity€split€thatÏhad€previously€been€promised€to€Mr.€Andrews€and€Mr.ÏAdams.€€When€Mr.€Cramer€was€terminated€from€theÏCompany,€his€35€percent€equity€in€the€company€wasÏpromised€20€percent€to€Dan€Andrews€and€15€percent€to€PatÏAdams.€€Since€that€time,€Mr.€Andrews€has€continued€toÏserve€as€consultant€to€the€Company.€€Although€theÏCompany€has€not€paid€its€consulting€fees,€it€has€beenÏcovering€his€expenses€since€he€moved€to€Memphis€in€MayÏ1994.€€Various€mechanisms€were€discussed€for€how€toÏhandle€the€equity€ownership€and€the€payout€of€profits,€ifÏany,€versus€the€funds€owed€by€Progressive€Capital€and€theÏfunds€owed€by€Dan€Andrews.€€It€was€ultimately€agreed€thatÏthe€Company€would€pay€back€the€loans€to€ProgressiveÏCapital€and€to€Dan€Andrews€(if€and€when€funds€wereÏavailable)€on€a€percentage€basis€with€40ðð€percent€of€theÏallotted€funds€going€to€Mr.€Andrews€for€his€debt€reductionÏand€59ðð€percent€going€to€Progressive€Capital€for€its€debtÏreduction.€ÌÌà8 àà8 àIt€was€suggested€the€equity€between€Mr.€Andrews€and€theÏother€shareholders€be€split€also€on€an€equal€basis€for€whatÏwas€owed€versus€what€was€originally€projected.€€Mr.€PetersÏquestioned€this€40ðð€percent€split€for€Dan€Andrews,€15Ïpercent€split€for€Pat€Adams,€and€the€balance€for€theÏProgressive€Capital€entities.€€(Mr.€Lynn,€Mr.€Peters€and€Mr.ÏWilliams€had€agreed€to€transfer€their€Cramer€EnterpriseÏstock€to€Progressive€Capital€previously.)€€After€someÏdiscussion,€Mr.€Adams€offered€to€forego€taking€any€equity€inÏthe€Company.€€It€was€agreed€that€the€equity€in€CramerÏEnterprises€would€be€split€40ðð€percent€to€Dan€AndrewsÏand€59ðð€percent€to€Progressive€Capital.€à àÌÌà8 àà8 àMr.€Andrews€agreed€to€continue€working€as€a€consultant€forÏ90€days€and€the€shareholders€agreed€to€cover€hisÏexpenses€(up€to€$2,000/month)€during€this€90„day€period.€ÏThe€shareholders€agreed€to€meet€again€in€60€days€toÏreview€progress.€Ìà àà àœ›ÌÓÓThe€minutes€were€signed€by€S.€Thomas€Peters,€C.€Michael€Lynn,€John€Williams,ÏDaniel€Andrews€and€D.€Patterson€Adams.€œò òÌó ó›Ìà àCramer€Enterprises€was€entitled€to€receive€3€percent€of€gross€sales€of€theÏpartnership€before€any€other€distribution€was€made.€€Therefore,€Andrews€would€haveÏbeen€entitled€to€receive€40ðð€percent€of€3€percent€of€Lubriconððs€gross€sales.€€AsÏAndrews€testified€at€trial,ÌÓÓà8 àà8 àI€felt€I€was€owed€$300,000,€and€I€wanted€„„€if€The€MarketingÏGroup€was€going€to€continue€doing€business€and€if€€„„€if€€„„€ifÏit€worked€out€that€we€were€successful,€I€didnððt€want€to€„„Ïmoney€going€to€Cramer€Enterprises€with€me€still€having€aÏnote€sitting€over€in€Lubricon€unpaid.€€ÌÌà8 àà8 àWhat€I€was€looking€for€was€any€way€I€could€get€cash€or€aÏproportion€of€cash€to€get€my€notes€paid€because€I€wasÏgetting€pressure€from€the€banks€about€right€then.€€Ìà àà àœò òÌó ó›ÌÌà8 àOn€cross„examination,€Andrews€testified.ÌÌà8 àà8 àBut€all€I€want€is€cash€flow€to€reduce€my€note.€€If€part€of€theÏcash€flow€comes€from€The€Marketing€Group€and€part€of€itÏcomes€from€Cramer€Enterprises,€what€do€I€care?€€Cash€flowÏis€cash€flow.€€€€à8 àÌà àà àœò òÌó ó›ÌÌÓÓà àLubricon€never€had€any€substantial€sales,€though€Andrews€worked€for€10€moreÏmonths€in€an€effort€to€build€the€business.€€At€trial,€the€defendantsðð€witness€ThomasÏPeters€testified€that€Andrews€was€not€issued€the€stock€in€Cramer€Enterprises€that€wasÏpromised€to€him€at€the€May€19€meeting.€€œNonetheless,›€from€May,€1995,€until€March,Ï1996,€when€Andrews€left€Lubricon,€he€was€paid€$5,000€per€month€in€consulting€fees.€œò òÌ›€€€€€€€€ó óÌà àOn€March€15,€1996,€Andrews€filed€suit€against€Lubricon,€Progressive€andÍCramer€Enterprises€for€the€accrued€and€unpaid€debt,€consulting€fees€and€interest€thatÏwas€due€to€him.€€œThe›€defendants€filed€an€answer€in€which€they€denied€that€any€fundsÏwere€due€and€payable€to€Andrews€because€he€had€subordinated€his€debt€in€exchangeÏfor€40ðð€percent€of€the€outstanding€shares€of€Cramer€Enterprises.€œò òÌó ó›Ìà àThe€trial€court€entered€an€Order€for€Default€Judgment€for€$358,644.25€againstÏCramer€Enterprises€on€September€13,€1996.€€œThis›€cause€came€to€trial€on€June€5,Ï1997.€€Following€a€hearing€on€the€matter,€the€Chancellor€ruled€from€the€bench€in€favorÏof€the€plaintiff€Andrews€against€defendants€Lubricon€and€Progressive.€€On€July€25,Ï1997,€the€trial€court€entered€a€Judgment€against€the€defendants€for€$263,636.71,Ïwhich€included€$101,000€for€the€outstanding€loan€balance,€$110,000€in€unpaidÏconsulting€fees€and€$52,636.71€in€interest€on€the€loan€at€7€percent€annually.€€œThe›Ïdefendants€timely€filed€a€notice€of€appeal€on€August€21,€1998,€and€the€cause€isÏproperly€before€this€Court€for€consideration.€œò òÌó ó›Ìà àSince€this€matter€was€heard€before€the€court€sitting€without€a€jury,€review€of€theÏfindings€of€fact€shall€be€òòde€novoóó€upon€the€record,€accompanied€by€a€presumption€ofÏthe€correctness€of€the€findings.€€Rule€13(d)€Tenn.R.App.P.€€Unless€the€evidenceÏpreponderates€against€the€findings,€the€Court€must€affirm,€absent€error€of€law.€€€€€œÌ›Ìà@ àò òÔ€,¼ÔANALYSISÔ€,XÔó óÌà àOn€appeal,€the€defendants€assert€that€Andrews€subordinated,€settled,€novatedÏor€otherwise€released€the€debt€owed€to€him€in€exchange€for€40ðð€percent€of€theÍshares€of€Cramer€Enterprises.€€Therefore,€the€defendants€maintain€that€Andrews€isÏestopped€from€demanding€payment€from€Progressive€and€Lubricon.€€We€disagree.€ÏThe€theories€of€release€and€subordination€propounded€by€the€defendants€are€notÏsupported€by€the€facts€of€this€case.€€œÌ›Ìà àReleases€are€valid€in€Tennessee€and€are€not€against€public€policy.€€òòDixon€v.ÏManieróó,€545€S.W.2d€948€(Tenn.€App.€1976).€€A€release€is€a€contract,€and€the€rules€ofÏconstruction€applied€to€contracts€are€used€in€construing€a€release.€€òòRichland€CountryÏClub,€Inc.€v.€CRC€Equities,€Inc.óó,€832€S.W.2d€554,€557€(Tenn.€App.€1991).€€Therefore,Ïthe€task€of€the€courts€is€to€ascertain€the€intention€of€the€parties.€€œTo›€determine€theÏpartiesðð€intent,€we€first€look€to€the€material€contained€within€the€four€corners€of€theÏdocument€itself.€€Words€or€phrases€contained€in€the€instrument€are€to€be€given€theirÏordinary€and€usual€meaning,€unless€otherwise€expressly€provided.€€òòRogers€v.€FirstÏTennessee€Bank€Natððl€Assn.óó,€738€S.W.2d€635,€637€(Tenn.€App.€1987);€òòJaffe€v.€Boltonóó,Ï817€S.W.2d€19,€25€(Tenn.€App.€1991).€€In€determining€whether€the€meaning€of€theÏcontract€is€clear€or€ambiguous,€the€language€in€dispute€must€be€examined€in€context€ofÏthe€entire€agreement.€òòGredig€v.€Tenn.€Farmers€Mut.€Ins.€Co.óó,€891€S.W.2d€909,€912Ï(Tenn.€App.€1994).€€If€the€language€of€the€contract€is€clear€and€unambiguous,€it€mustÏbe€construed€as€written.€€òòCummings€v.€Vaughnóó,€911€S.W.2d€739,€742€(Tenn.€App.Ï1995).€€In€such€case,€neither€party€is€to€be€favored€when€construing€the€contract.€ÏòòHeyer„Jordan€&€Assoc.,€Inc.€v.€Jordanóó,€801€S.W.2d€814,€821€(Tenn.€App.€1990).€€TheÏlanguage€of€the€contract€is€said€to€be€ambiguous€when€its€meaning€is€uncertain€andÏwhen€it€can€be€fairly€construed€in€more€than€one€way.€€òòGredigóó,€891€S.W.2d€at€912.€€IfÍthe€contract€is€determined€ambiguous,€we€are€to€determine€the€intention€of€the€partiesÏnot€only€from€the€language€but€also€from€the€surrounding€facts€and€circumstances.€ÏòòHMF€Trust€v.€Bankers€Trust€Co.óó,€827€S.W.2d€296,€299€(Tenn.€App.€1991).€€€Ìà àThe€scope€and€extent€of€a€release€depends€on€the€intent€of€the€parties€asÏexpressed€in€the€instrument.€€òòCross€v.€Earlsóó,€517€S.W.2d€751,€753€(Tenn.€1974).€€AsÏthis€Court€noted€in€a€recent€opinion,€òòBurks€v.€Belz„Wilson€Propertiesóó,€958€S.W.2d€773,Ï776€(Tenn.€App.€1997),ÌÓÓà8 àà8 àIn€interpreting€a€release€to€determine€whether€a€particularÏclaim€has€been€discharged,€the€primary€rule€of€constructionÏis€that€the€intention€of€the€parties€shall€govern,€and€thisÏintention€is€to€be€determined€with€a€consideration€of€whatÏwas€within€the€contemplation€of€the€parties€when€theÏrelease€was€executed,€which€in€turn€is€to€be€resolved€in€theÏlight€of€all€of€the€surrounding€facts€and€circumstances€underÏwhich€the€parties€acted.€€òòId.óó€at€776,€citing€òòJackson€v.€Milleróó,Ï776€S.W.2d€115€(Tenn.€App.€1989).€€ÌœÌÌ›ÌÓÓà àCentral€to€this€case€is€the€interpretation€of€the€minutes€of€the€May€19,€1995,ÏCramer€Enterprises€shareholders€meeting.€€The€minutes€recite€that€the€shareholdersÏpresent€were€Peters,€Lynn€and€Williams.€€The€minutes€further€state€that€Andrews€andÏAdams€attended€the€meeting€as€guests.ò ò€€œó óAs›€previously€noted,€when€Thomas€CramerÏleft€Cramer€Enterprises,€his€35€percent€of€the€outstanding€shares€reverted€to€CramerÏEnterprisesðð€treasury.€€Of€the€35€percent€formerly€owned€by€Cramer,€20€percent€hadÏbeen€promised€to€Andrews€and€15€percent€had€been€promised€to€Adams;€however,Ïthe€shares€had€not€been€delivered€to€either.€€Andrews€testified:ÌÓÓà8 àà8 àQ.€You€have€a€„„€you€had€acquired€or€owned€20€percent€ofÏCramer€at€that€point.ÌÌà8 àà8 àA.€€Supposedly,€but€it€never€happened.ÌÌà8 àà8 àQ.€€All€right.€€Well,€Iððm€„„€Iððm€going€to€talk€about€what€„„Ïanother€agreement€thatððs€made€after€that.€€But€you€owned€„„ÌÌà8 àà8 àA.€€My€understanding€is€I€owned€20€percent€but€I€had€noÏproof.Ìò òà àà àó ó.......Ìà àà àQ.€....Now,€you€had€previously€been€promised€20€percent,€right?ÌÌà8 àà8 àA.€€And€that€never€happened.€€Ìà àà àœò òÌó ó›ÌÌÓÓà àThe€parties€understood€that€The€Marketing€Group€owed€Andrews€approximatelyÏ$300,000.€€œFurthermore,›€the€defendants€understood€that€both€Cramer€Enterprises€andÏProgressive,€The€Marketing€Groupððs€general€partners,€were€liable€for€the€partnershipððsÏdebts.€€œThomas›€Peters,€the€president€of€Cramer€Enterprises€and€a€shareholder€of€bothÏCramer€Enterprises€and€of€Progressive€testified:€ÌÓÓà8 àà8 àQ.€€Mr.€Peters,€isnððt€it€true€that€under€the€terms€of€the€limitedÏpartnership€that€the€two€general€partners€„„€that€isÏProgressive€Capital€and€Cramer€„„€are€responsible€for€theÏobligations€of€the€limited€partnership?ÌÌà8 àà8 àA.€€Yes,€they€are.€€Ìà àà àœò òÌó ó›ÌÌÓÓà àBecause€Cramer€Enterprises€was€entitled€to€3€percent€of€the€gross€sales€of€TheÏMarketing€Group/Lubricon,€the€parties€understood€that€it€was€beneficial€for€bothÏAndrews€and€Progressive€to€be€paid€Cramerððs€share€of€the€proceeds€in€order€toÏgenerate€cash€flow€so€that€Andrews€and€Progressive€could€repay€their€debts.€€AsÏAndrews€testified:ÌÓÓà8 àà8 àA.€....And€the€reason€that€this€meeting€occurred€was€thatÍCramer,€Incorporated,€received€its€money€right€off€the€top,Ïas€he€said€earlier,€of€any€sales€that€would€happen€withinÏThe€Marketing€Group.€€ÌÌà8 àà8 àIn€other€words,€if€The€Marketing€Group€made€a€millionÏdollars€worth€of€sales,€3€percent€at€this€point€in€time€wouldÏcome€right€off€the€top,€roughly€in€whatever€dollar€amountÏthat€is,€and€go€straight€to€Cramer€Enterprises.€€I€felt€that€IÏwas€owed€$300,000,€and€I€wanted€„„€if€The€Marketing€GroupÏwas€going€to€continue€doing€business€and€if€„„€if€„„€if€itÏworked€out€that€we€were€successful,€I€didnððt€want€to€„„€Ïmoney€going€to€Cramer€Enterprises€with€me€still€having€aÏnote€sitting€over€in€Lubricon€unpaid.€€ÌÌà8 àà8 àWhat€I€was€looking€for€was€any€way€I€could€get€cash€or€aÏproportion€of€cash€to€get€my€notes€paid€because€I€wasÏgetting€pressure€from€the€banks€about€right€then.€€Ìà àà àœò òÌó ó›ÌÌLikewise€on€cross„examination€Andrews€testified:ÌÌà8 àà8 àA.€€So€„„€and€all€Iððm€interested€in€is€getting€my€money€back.€ÏAnd€I€donððt€care€how,€if€you€will€remember,€I€got€it€back.€€ButÏI€couldnððt€see€the€money€being€diverted€to€another€companyÏthat€had€no€expenses€and€me€not€sharing€with€it.€€I€mean,€IÏwas€the€largest€creditor.€€ÌÓÓœ›à àà à......ÌÓÓà8 àà8 àBut€all€I€want€is€cash€flow€to€reduce€my€note.€€If€part€of€theÏcash€flow€comes€from€The€Marketing€Group€and€part€of€itÏcomes€from€Cramer€Enterprises,€what€do€I€care?€€Cash€flowÏis€cash€flow.€€€€à à€Ìà àà àœò òÌó ó›ÌÌÓÓà àObviously,€Andrews€and€the€defendants€in€this€cause€have€different€positionsÏregarding€the€purpose€and€intent€of€the€agreement€reached€at€the€Cramer€EnterprisesÏshareholders€meeting€on€May€19,€1995.€€As€previously€stated,€Andrews€maintainedÏthat€the€purpose€of€the€agreement€was€to€provide€cash€flow€to€him€in€the€event€thatÍLubricon€had€sales€because€he€stood€to€benefit€from€his€share€of€Cramer€EnterprisesððÏrights€to€3€percent€of€Lubriconððs€gross€sales.€€It€should€be€remembered€thatÏProgressive,€which€was€owned€by€the€same€shareholders€as€owned€CramerÏEnterprises,€also€stood€to€benefit€from€the€same€arrangement€to€which€Andrews€hadÏtestified.€€Andrews€asserts€that€the€debt€was€to€be€discharged€from€the€cash€flow,€if€andÏwhen€there€was€cash€flow.€€Therefore,€Andrews€wanted€to€obtain€a€share€of€CramerÏEnterprisesðð€rights€to€the€proceeds€of€the€partnership.€€Ìà àConversely,€the€defendants€maintain€that€under€the€agreement,€AndrewsÏsubordinated€the€outstanding€debt€in€exchange€for€an€equity€interest€in€CramerÏEnterprises.€€The€defendants€maintain€that€the€40ðð€percent€equity€interest€in€CramerÏEnterprises€and€the€corresponding€entitlement€to€a€share€of€the€gross€profits€ofÏLubricon€was€not€simply€a€way€to€pay€the€debt,€but,€instead,€was€consideration€forÏAndrewsðð€agreement€to€subordinate€the€debt.€œThe›€defendants€aver€that€the€cash€flowÏwas€not€designed€to€pay€Andrewsðð€debt,€but€rather,€to€push€his€debt€behind€that€ofÏevery€other€creditor.€€Defendants€assert€that€until€Lubricon€repaid€all€of€its€otherÏcreditors,€Lubricon€would€still€be€liable€for€its€debt€to€Andrews.€€In€the€meantime,ÏAndrews€would€benefit€by€getting€cash€from€his€40ðð€percent€interest€in€CramerÏEnterprises.€€Simply€stated,€the€defendants€maintain€that€Andrews€subordinated€hisÏdebt€in€exchange€for€an€equity€interest€in€Cramer€Enterprises€and€the€hope€of€makingÏmoney€in€excess€of€the€repayment€amount.€€While€Andrewsðð€gamble€did€not€pay€off,Ïthe€defendants€maintain€that€he€is€entitled€to€his€40ðð€percent€equity€interest€in€anÏotherwise€worthless€company.€€œÌ›Ìà àThe€defendants€assert€that€evidence€of€the€subordination€agreement€is€found€inÏthe€phrase€ð ðif€and€when€funds€were€availableðð€contained€in€the€minutes€of€the€May€19Ïshareholders€meeting.€€The€minutes€state€in€relevant€part:€ÌÓÓà8 àà8 àIt€was€ultimately€agreed€that€the€Company€would€pay€backÏthe€loans€to€Progressive€Capital€and€to€Dan€Andrews€(òòif€andÏwhen€funds€were€availableóó)€on€a€percentage€basis€withÏ40ðð€percent€of€the€allotted€funds€going€to€Mr.€Andrews€forÏhis€debt€reduction€and€59ðð€percent€going€to€ProgressiveÏCapital€for€its€debt€reduction.€Ìà àà àœ(Emphasis›€Added)€€œÌ›ÌÌÓÓà àWe€find€that€the€phrase€ð ðif€and€when€funds€were€availableðð€does€nothing€moreÏthan€to€establish€a€timing€provision€of€when€the€money€would€be€disbursed.€€As€notedÏin€the€audited€financial€statement€of€1992€and€1993,€Andrews€held€a€note€payable€onÏdemand.€€It€appears€that€by€agreeing€to€accept€repayment€from€the€cash€flow€ofÏCramer€ð ðif€and€when€funds€were€availableðð€instead€of€demanding€immediateÏrepayment,€Andrews€acquired€an€equity€interest€in€Cramer€Enterprises€from€which€heÏwould€obtain€cash€flow€to€repay€his€debts.€€The€contested€phrase€is€no€different€thanÏthe€ð ðpay€as€paidðð€clauses€found€in€construction€contracts.€€òòKoch€v.€ConstructionÏTechnology,€Inc.óó,€924€S.W.2d€68,€71„72€(Tenn.€1996).€€By€analogy,€we€do€not€find€thatÏsuch€language€is€sufficient€to€subordinate€a€debt€in€the€absence€of€contract€languageÏthat€clearly€indicates€that€the€parties€intended€to€do€so.€œòòÌóó›Ìà àIn€analyzing€the€release€and€subordination€issue,€we€find€Pat€Adamsðð€testimonyÏregarding€the€purpose€and€intent€of€the€parties€to€be€compelling.€€Adams€was€theÏcorporate€secretary€of€Cramer€Enterprises,€and€in€that€capacity,€he€attended€the€MayÍ19€shareholders€meeting€and€transcribed€the€minutes€from€that€meeting€that€are€atÏissue€in€this€lawsuit.€€œò ò€ó óAdams›€was€not€a€shareholder€of€Cramer€Enterprises,€though€heÏagreed€at€the€May€19€meeting€to€forego€the€15€percent€equity€interest€in€CramerÏEnterprises€that€he€had€been€promised.€€œAdams,›€a€witness€called€by€the€defense,Ïtestified€that€he€had€no€bias€against€or€preferred€interest€in€either€of€the€parties.€€œOn›Ïdirect€examination,€Adams€testified:ÌÓÓà8 àà8 àQ.€€All€right.€€Was€an€agreement€reached€as€to€when€and€onÏwhat€terms€Mr.€Andrews€was€going€to€be€repaid€monies€atÏthat€point?ÌÌà8 àà8 àA.€€Yes.ÌÌà8 àà8 àQ.€€What€was€that€agreement?ÌÌà8 àà8 àA.€€Both€Dan€(Andrews)€and€Progressive€Capital€hadÏmonies€owed€to€them€that€had€been€put€in€the€partnershipÏ(The€Marketing€Group/Lubricon)€to€sustain€it,€just€to€keep€itÏopen,€in€trying€to€sell€the€engine€ice€product.€€There€was€aÏpercentage€based€on€if€the€company€could€generate€someÏprofits€in€selling€the€engine€ice€product€or€anything€else€thatÏthey€had....ÌÌà8 àà8 àAnd€if€profits€were€generated€off€that,€then€how€those€profitsÏwould€be€split€to€satisfy€both€Danððs€outstanding€debts€andÏProgressive€Capitalððs.€€Ìà àà àœ›Ìà àà à......ÌÌà8 àà8 àQ.€€Did€Mr.€Andrews€agree€to€forgo€payment€of€his€$300,000Ïat€this€meeting€in€exchange€for€anything?ÌÌà8 àà8 àA.€€What€Mr.€Andrews€agreed€to€at€this€meeting€was€that€theÏonly€source€of€payment€that€we€could€identify€was€makingÏThe€Marketing€Group€profitable€and€that€there€was€anÏopportunity€to€do€that.ÌÌà8 àà8 àAnd€the€debt€of€several€hundred€thousand€that€ProgressiveÏhad€put€into€the€company,€and€debt€or€back€consulting€feesÍor€whatever€else€there€may€have€been€that€was€theÏcumulative€amount€that€Dan€was€owed€for€what€he€had€putÏinto€the€company,€would€be€repaid€coming€out€of€profitsÏfrom€this€company.€Ìà àà àœò òÌó ó›Ìà àà àÌà àOn€cross„examination,€Adams€testified:ÌÌà8 àà8 àQ.€€And€Progressive€Capital€didnððt€have€any€money€at€theÏtime,€and€The€Marketing€Group€probably€didnððt€have€anyÏmoney€at€that€time.€€And€you€were€talking€about€makingÏpayments€from€the€profits.€€That€would€have€been€theÏnatural€funds€to€use€to€pay€any€debt.ÌÌà8 àà8 àA.€€Mm„hum.ÌÌà8 àà8 àQ.€€Isnððt€that€true?ÌÌà8 àà8 àA.€€Yes.ÌÌà8 àà8 àQ.€€I€mean,€if€you€didnððt€have€profits,€you€werenððt€going€toÏpay€anybody?ÌÌà8 àà8 àA.€€Thatððs€correct.ÌÌà8 àà8 àQ.€€So€basically€what€this€agreement€was€doing€as€far€asÏCramer€was€to€figure€out€a€way€to€pay€back€the€debts€on€aÏplan€so€that€Progressive€could€be€paid€its€loan€and€DanÏcould€be€paid€his€loan.€€ÌÌà8 àà8 àA.€€Thatððs€correct.ÌÌà8 àà8 àQ.€€And€nobody€was€forgiving€any€debts€against€anybody;Ïisnððt€that€true?€€ÌÌà8 àà8 àA.€€Thatððs€correct.€€Ìà àà àœ›ÌÓÓLikewise,€Thomas€Peters,€a€shareholder€of€both€Cramer€Enterprises€and€ProgressiveÏtestified€that€the€agreement€memorialized€in€the€minutes€of€the€May€19€meeting€did€notÏexpressly€release€Progressive€Capital€of€its€obligations€to€Andrews,€though€heÍasserted€that€such€was€the€intent.€€He€stated:ÌÓÓà8 àà8 àQ.€€Well,€but€what€Iððm€saying€in€black€and€white,€Mr.€Peters,Ïthereððs€nothing€in€Exhibit€Number€4,€I€believe,€or€theÏminutes€of€May€the€19th,€1995,€that€releases€ProgressiveÏCapital€in€plain€and€simple€language€of€its€obligations€to€Mr.ÏAndrews,€is€there?ÌÌà8 àà8 àA.€€In€plain€simple€language,€no.€Ìà àà àœò òÌó ó›ÌÌÓÓà àThe€Court€does€not€find€that€the€language€of€the€minutes€can€be€interpreted€asÏchanging€Andrewsðð€creditor/debtor€relationship€with€the€defendants.€€In€light€of€theÏforegoing€rules€of€construction€and€proof€introduced€at€trial,€we€find€that€the€agreementÏmemorialized€in€the€minutes€of€the€May€19€Cramer€Enterprises€shareholders€meetingÏdoes€not€constitute€an€agreement€by€Andrews€to€subordinate€or€otherwise€to€releaseÏthe€debt€owed€to€him€in€exchange€for€an€equity€interest€in€Cramer€Enterprises.€€œÌ›Ìà àThe€debt€obligation€due€to€Andrews€was€due€on€demand,€and€in€exchange€forÏAndrewsðð€agreement€to€accept€repayment€ð ðif€and€when€funds€were€available,ðð€theÏsignatories€of€the€minutes€of€the€Cramer€Enterprises€May€19€shareholdersðð€meetingÏpromised€Andrews€a€40ðð€percent€equity€interest€in€Cramer€Enterprises€in€order€toÏgive€him€access€to€a€ready€source€of€cash€flow€to€pay€his€debts.€€In€fact,€the€defendantsÏnever€delivered€on€their€promise€to€make€Andrews€a€shareholder€because€he€wasÏnever€issued€stock€nor€afforded€any€other€benefits€of€stock€ownership.€œò òÌó ó›Ìà àAfter€consideration€of€the€record,€the€briefs€on€appeal€and€the€argument€of€theÏparties,€it€appears€that€the€agreement€memorialized€by€the€minutes€of€the€May€19Íshareholderððs€meeting€was€simply€an€attempt€to€provide€Lubriconððs€œprincipal›€creditorsÏwith€cash€flow€in€order€to€repay€their€own€obligations.€€Accordingly,€we€find€that€theÏagreement€memorialized€by€the€May€19€minutes€does€not€constitute€a€subordination,Ïsettlement,€release€or€novation€of€any€obligation€existing€between€The€MarketingÏGroup/Lubricon€and€Andrews.€€For€the€foregoing€reasons,€we€affirm€the€ruling€of€theÏtrial€court.€€All€other€issues€raised€by€the€parties€are€pretermitted€by€this€ruling.€€œCostsÏare€adjudged€against€appellants.ÌÓÓÌÌà àà àà àà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ïóóà àà àà àà àà àà àà àà àà àHIGHERS,€J.ÌCONCUR:ÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌCRAWFORD,€P.J.,€W.S.ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌLILLARD,€J.›œ›