
    Bernard v. Walker et al.
    
    
      (Knoxville,
    
    Sept. Term 1947 (May Session 1948).)
    Opinion filed June 12, 1948.
    Rehearing denied July 17, 1948.
    
      Jennings,.O’Neil & Jarvis, of Knoxville, for appellant.
    Egerton, McAeee & Armistead, of Knoxville, for ap-pellees.
   Mr. Justice G-ailor

delivered the opinion of the Court.

This appeal presents a family controversy over a one-fourth partnership interest in a tobacco business at Ashe-ville, North Carolina. By the original bill, Complainant, Park Bernard, seeks to reform a deed and-certain other documents and have a trust declared in his favor: to the extent of 25% of a business now owned and operated by the Defendant, James E. Walker, Jr., and his associates. Park Bernard is the son of the defendant, W. W. Bernard, the nephew of the. defendant, John S. Bernard and the cousin of the defendant Walker. By an amendment of the original hill Bernard Warehouses, Inc., a Tennessee corporation, was made a party defendant. As the Corporation has its situs at Greeneville, it is referred to in the record as “Bernards of Greeneville.” The majority stock in this corporation is owned by various members of the Bernard family, and the defendant W. W. Bernard as President, signed pleas for the corporation.

The defendants John S. Bernard and the Walkers filed demurrers to the original bill and when these demurrers were overruled, filed answers. The defendant W. W. Bernard, individually, and as President of Bernard Warehouses, Inc., did not demur but filed separate answers for himself and the corporation, and by these answers, admitted the essential allegations of the bill, and further admitted that Complainant was entitled to a decree as prayed. At the outset, it is to be stated that the record affords abundant, and we think, conclusive evidence that the bill was filed by the son in friendly agreement with the father, and that though the father was' made a nominal defendant, his interests were not antagonistic to those of the son, but on the contrary, if by the litigation the son succeeded in securing a one-fourth interest in the property involved, the father might well secure an identical share in similar litigation on his own behalf. That there was this agreement between father and son is clear from this statement in the original bill: “Complainant brings this bill on his own behalf and on behalf of any other interested party, including the defendant, W. W. Bernard, to the end that they may come in and assert their rights, titles and interests in and to said property and the earnings of said business. ’ ’

And the following’, excerpt from the father’s answer: “At this time, the answers of the other defendants have not been, filed, and your- defendant, after said answers are filed, may find it'necessary to file a cross-bill himself and seek affirmative relief. Should such necessity arise, he now reserves to himself the right to file such cross-bill.”

The conclusion is fortified-by the father’s subsequent failure and refusal-to testify-against his son’s interests, although principal facts of the> controversy were known to the father and determinative issues arose from his decisions and conversations.

After the defendants had answered, and certain minority stockholders of Bernards Warehouses, Inc., had successfully intervened on the ground that W. W. Bernard, though President of the corporation, was not in fact defending the action or raising defenses available to the corporation, the case was tided before a jury in the Chancery Court. At the close of Complainant’s evidence, which consisted of his own testimony and that of an accountant,'and again at the close of all. the - evidence, the defendants moved that the issues be withdrawn from the jury and the bill be dismissed. The Chancellor overruled these motions, exceptions were preserved, and- thereafter there was a verdict and a decree for the Complainant.

On appeal to the Court of Appeals, that Court held that the Chancellor was-in error, in submitting issues to the jury, that the -motions to withdraw the issues should have been granted and dismissed the bill. The Court of Appeals-further overruled a motion of the Complainant to dismiss fhe bill of exceptions. .

The Complainant'filed petition for certiorari, which we granted, we have heard argument and the case is'now before us for disposition.

''Thiee-of-the assignments'.óf error assail-tie' action of tie'Úourt' óf Appeals’ll overfilling a motion- of petitioner' to strike tie-bill of exceptions and affirm, tie decree. Tie facts upon wlicl tie motion is predicated are tlese. Tie jury returned a verdict against tie defendants on August 17, 1946. Tie several'defendants filed motions for néw’ trial between August 24 and August 29, 1946. According to a 'photostat of tie Chancery motion docket, on September 13tl motions for new trial lad been filed and opposite the motions in tie column leaded “ Action,” there appears this entry, “heard, denied and appeal allowed.” There is no signature of' the entry and tie statement is'made in briefs that tie entry was made by tie Clerk and Master, but--since it was unsigned it is immaterial who made it. Tie term of tie Chancery Court at wlicl this case was tried ended on November 2, and a new term commenced on November 4, 1946. On October 31, 1946, and before expiration of the trial term, tie following order was signed by tie Chancellor and entered on tie minutes: “In this cause it appearing to the Court- that motions for new trials lave been seasonably filed by defendants (naming them,) and that tie present term of this Court will expire before tie Court has acted upon said motions, it is therefore ordered, adjudged and decreed- that tie aforesaid motions for new trials and-all other matters to be adjudicated in this cause bé, and the same are,, hereby continued to the next term of this court, which begins on Monday, November 4, 1946.”

-On1'January-7,-1947, and within the1, November term, a “final decree”’ 'was entered on the minutes and commences with the following recital: ' " ' '

“ This cause'came'on for final hearing before the Honorable A. E. Mitchell,’ Chancellor, on Friday, September 13, 1946, upon the motion of tie defendants to set aside' the findings of the. Jury, and.to grant them a new trial on the issues of fact submitted to the Jury, which motion on due consideration thereof, is by the Court overruled.

“And, thereupon, the cause coming on to be further and finally heard on said day . . . ”

On this, petitioner argues at length that since the motion docket shows that, the recital of the first paragraph of the January 7th decree was true, that therefore, the decree of October 31, 1946, was ineffectual to extend the term. We think it immaterial whether as defendants insist, the insertion of “September 13,1946” was a typographical error, the recital did not determine the effective date of the decree which was the date of its entry on the minutes, January 7, 1947. The oral announcement of the Chancellor and the memorandum of it entered on the motion docket was not action of the Court, which can only be by entry on. the. minutes and signature of the Chancellor. “While in this case the chancellor had announced the decree, still' none had been entered and signed. It was still in the breast of the court, and there was nothing of binding force in any sense upon the chancellor or the parties. If the chancellor had died or resigned before the enrollment of a decree, the case would have remained on the docket for trial. The law recognizes nothing as an order or decree until it is upon the minutes of the court.” Fraker v. Brazelton, 80 Tenn. 278, 280, 281.

This rule as stated in Fraker v. Brazelton, supra, has been approved in all of our more recent cases. ' Citizens’ Bank & Trust Co. v. Bayles, 153 Tenn. 40, 50, 281 S. W. 932; Wilkinson v. Johnson City Shale Brick Corporation, 156 Tenn., 373, 378, 299 S. W. 1056, 2 S. W. (2d) 89; Mullen v. State, 164 Tenn. 523, 529, 51 S. W. (2d) 497; Jackson v. Jarratt 165 Tenn. 76, 81, 52 S. W. (2d) 137.

. ■ Since, therefore, the language of the decree of October 31, 1946, “that'the present term will expire before the court has acted upon, said motions, ’ ’ was not contradicted by any other language in the. minutes of the Court, the recital imports absolute, yerity, and the case stood as if at' the. end of the May term, the. Chancellor had the motions for new trial under advisement.

. In a supplemental brief filed after the case was argued before us, counsel for the motion makes this statement: “We again call the Court’s attention to the fact that this order in its recitation that the present term of this court will expire before the Court has acted upon said motions (referring to the motions for new trials) is in the teeth of the admitted fact that said motions were overruled by the Court on September 14, 1946, . . . ”

Apparently, counsel in this zeal is unwilling to recognize the difference which here exists, between ‘ ‘ admitted fact” and “admitted law.” Waller v. Skelton, 186 Tenn. 433, 211 S. W. (2d) 445.

The motions for new trial being ‘ ‘ still in the breast of the. court” (Fraker v. Brozelton, supra), the order of October 31, was fully effective to carry the case over to the new term, and to preserve rights of the defendants to file a bill of exceptions within 60 days after January 7, 1947, when the final decree was entered. That final decree so provided and the bill of exceptions was approved by the Chancellor, and filed on February 21, 1947. The pertinent section of the Code, as it had been amended and-was then in force, is as follows: “Whenever a motion for a new trial has been filed in a suit tried in any of, :the criminal or circuit or'chancery courts within the t|me. allowed by law and by rule of said court, and said motion has not been acted upon by said court at the time of the adjournment- of its term, but shall be overruled granted or otherwise acted upon at the next or any subsequent term, any party to such suit may, by leave of court, tender, have approved and filed a bill of exceptions within sixty days from and after the date of the court’s fiction upon such motion; and no special order of the court granting leave to file a bill of exceptions shall be necessary, but the certificate of approval of the trial judge upon any bill of exceptions, filed within sixty days fis' aforesaid, shall be sufficient evidence of the leave of the court to file such bill of exceptions. ’ ’ Williams ’ Code, sec. 8822, (1946 Supplement).

We think the Court of Appeals correctly overruled the ¿notion to dismiss the bill of exceptions and assignments of error attacking that action, are overruled.

The Bernard family, represented here, has been in the tobacco business at Greeneville, Tennessee, for many years. Bernard Warehouses, Inc., was organized by Complainant’s grandfather, and has since been owned find operated by two generations of the Bernard family, with minor stock interests in others. For some years prior to Í937, the Greeneville corporation had done satisfactory business with one B. B. Saunders, in Asheville, North Carolina. He knew personally several members of the Bernard family, who were active in the tobacco business. Several of the corporate officers at Greeneville wanted an' Asheville subsidiary, and some months prior to Sép-teniber 1937, defendant-John S. Bernard negotiated with Saunders to buy his business. Later W. W. Bernard lefirned that Saunders was willing to sell, find instructed the Complainant, Park Bernard, who was then in North' Carolina, ' to contact Saunders and report what price Saunders would take for his business. • The Complainant' carried out his father’s instruction and reported, according-to Complainant’s testimony, that on account of -the friendly feeling Saunders had for Bernards of G-reeneville, that Saunders would sell to Bernards' of Greeneville his lease and equipment for $3,500. This action of Complainant was in the early part of September 1937, and so far as the evidence discloses, this was the last and only activity of Complainant in the organization and operation of the Asheville tobacco business, which is the subject of this lawsuit.

When Saunders’ selling price was communicated to W. W. Bernard, he went to North Carolina to raise the money for the acquisition of the Saunders business and to "form a- partnership for its operation. Although Park Bernard was with his father in North Carolina, he took no part in the negotiations and there is no suggestion in the record that he contributed or offered to contribute, or was able to contribute any part of the money or credit necessary to acquire the Saunders business. W. W. Bernard had a private conference with defendant James E. Walker, Jr., and as a result of that conference, Walker prepared'the following memorandum:

“September 15, 1937.

“We, the undersigned do, hereby, enter into a partnership agreement for the said purpose of operating a tobacco warehouse in Asheville, North Carolina,-to be called Bernard’s Warehouse. Each of the undersigned shall be equally interested in said business. W. W. Bernard 25:%, J. S. Bernard' 25%, Park Bernard 25% and James E. Walker, Jr., 25%.

“It is further agreed 'that James E. Walker, Jr., shall be the manager and his salary be fixed at $1500.00 and said party shall have one third of the profits of the leaf account. 7

“In tlae event, that the services, of James E.. Walker, Jr., be needed in G-reeneville, Tenn., following one year’s operation or any succeeding years, in Asheville he will resume his duties in Greeneville with Bernard’s .Warehouses, Inc.

“ (Signed) W. W. Bernard

“James E. Walker, Jr.”

' It is to be noted that this memorandum was signed only by Walker and W. W. Bernard. When W. W. Bernard showed this memorandum to John S. Bernard, the latter refused to agree and W. W. Bernard notified Walker that the deal proposed in the memorandum was off, hut that Bernards of Greeneville would buy the business of Saunders in its own name. This occurred two or three days after the preparation of the memorandum, or about September 18,1937. On September 21, 1937, W. W. Bernard, who was accompanied by the Complainant, Park Bernard, so that the latter knew the events as they occurred, went to Valdosta, Georgia, and closed the trade with Saunders, and the bill of sale from Saunders to Bernards of Greeneville, is an exhibit to Complainant’s testimony. In October'1937, the corporation bought the real estate on which the Asheville business had been operated under a lease, and thereafter spent several thousand dollars in enlarging the building and making improvements.

J. E. Walker, Jr., was the salaried manager of the Asheville operation and during the season 1937 and 1938 did a profitable business, turning in some $12,000 to the corporation at Greeneville. Nevertheless, on account of pressure from its banking connection, the Greeneville corporation decided to sell the Asheville property and business after a formal meeting of the directors had decided that this should be done. Learning that the corporation was about to sell the business in Asheville, Jame.s E. Walker, Jr. made, an offer to buy the business for $30,000 on terms as follows:

$5,000 in cash; 4 notes of $2,500 each, to be dated April 15,1938, maturing October 1,1938, March 1,1939, October 1, 1939; March 1, 1940 and tbe assumption by him of a balance of $15,000 due on the real estate to an Asheville bank.

The offer of Walker was accepted and the corporation executed and delivered to him and his associates, an absolute bill of sale and an unconditional deed to the realty, conveying without reservation, the entire business in Asheville, North Carolina. The transaction was consummated in the early part of April 1938. From letters written by W. W. Bernard to J. E. Walker, Jr., dated April 28, and May 3, of 1938, and by the clear admission of Complainant on cross-examination, Complainant knew all details of the sale to J. E. Walker, Jr., .and his associates shortly after the sale occurred, and when asked why he took no steps then to protect his alleged interest, his only excuse was that his father advised against it.

From the time of the purchase in 1938 until July 1940, James E. Walker, Jr., and his associates operated the Asheville business as individuals, and in July 1940, the business was incorporated under North Carolina law, and all assets transferred to the corporation. The business had some bad years and it was necessary from time to time, to secure financial help from third persons. In January 1942, the charter was surrendered and a limited partnership was formed. Three members of this limited partnership are not parties to this litigation and are not before this Court. Under this first limited partnership agreement, the business was operated until Jan-úáfy'í, 1945,. when on aconnt of the fact that to save the business, it had been necessary again to secure new capital, a new limited partnership was formed and two more ineinbers'were added, neither of whom is a party to this suit ór before this Court. So, as matters stood when the case was tried in the Chancery Court, there were five members of the partnership who owned and operated the business at Asheville, North Carolina, who were not parties to the suit and not before the Court.

The original bill was filed April 15, 1945, — seven years and seven months after the sale by Saunders to the Ber-nards.. of Greeneville, and seven years after the sale by the corporation to J. E. Walker, Jr., and his associates. The theory of Complainant may be deduced from the prayers'of the bill which are as follows:

“(2) That on the hearing, complainant be granted a decree declaring him to be the owner of and entitled to a one-fourth undivided interest in and to said Asheville warehouse property and all equipment therein, and to decree for one-fourth of the earnings of said business froxn and including the 1937-1938 sales season to date, • and to this end that all necessary orders, references and decrees be had.

“,(3) "Complainant prays that said deed executed on of about April 15, 1938, by Bernard Warehouses, Inc., to the defendant James E. Walker, Jr., conveying to him said Asheville warehouse property and the' equipment and business, a description of which property will be furnished on or before the hearing, be reformed so as to express the true intent and purposes of said deed, and that it be decreed that the defendant, James E. Walker, Jr. was never the owner in fee of said property at any time', but that he has held said property in trust as Trustee for himself and the defendants W. W. Bernard and ■ John S. Bernard and this complainant;”

It is immaterial to a decision of this case, that we find that.parties necessary to an effectual decision for Complainant are not before the Court, and that the Coni-plainant has wholly failed to introduce ‘ ‘ clear, cogent and convincing” (Hunt v. Hunt, 169 Tenn. 1, 80 S. W. (2d) 666) evidence to modify the terms of the. written documents of sale by Bernards of Greeneville to- Walker •and his associates, and so to set up by parol a trust in favor of himself, because we find on undisputed evidence that the Court of Appeals was justified in dismissing Complainant’s bill for laches. . rj - ,

A plea of laches supported by the 6 and 3 yeau statute of limitations (Carpenter v. Wright, 158 Tenn. 289, 13 S. W. (2d) 511) was interposed by counsel for. the Walkers and Bass, and motions were made -to dismiss the bill on that ground and exceptions were preserved to the Chancellor’s action in overruling the motion.

From our statement of the undisputed evidence in this record, the two essential elements of laches concur. These are the negligence and unexcused delay'of Complainant in asserting his alleged claim and injury to the rights of third persons 'intervening during and therefore on account of the delay. Here, the Complainant knew immediately of the sale by Bernards of Greeneville to Walker. He asserted no objection or claim on account of the sale. Rights of third and innocent parties have clearly intervened, and we think his is clearly a “stale demand” (Gibson, p. 87, sec. 70) on which a Court of Equity will afford him no relief. . . when the court sees negligence on one side and injury therefrom on the other, it is a ground for denial of relief. ’ ’ Evans v. Steele, 125 Tenn. 483, 495, 145 S. W. 162, 165.

The rule so stated by Judge Lansden has been frequently upheld in more recent decisions. State v. McPhail, 156 Tenn. 459, 2 S. W. (2d) 413; Samuel v. King, 158 Tenn. 546, 14 S. W. (2d) 963; Carpenter v. Wright, 158 Tenn. 289, 13 S. W. (2d) 511.

Other cases where rescission or modification of written contracts was sought and where this Court refused relief because of unreasonable delay, are Talbott v. Manard, 106 Tenn. 60, 71, 59 S. W. 340; Smith v. Greaves, 83 Tenn. 459; Knuckolls v. Lea, 29 Tenn. 577; Woodfolk v. Marley, 98 Tenn. 467, 40 S. W. 479.

We think it so clear that the judgment of the Court of Appeals must be affirmed on account of Complainant’s laches, that it is unnecessary to discuss further the validity of the other grounds on which the Court of Appeals was impelled to dismiss the bill.

Affirmed.

Burnett, J., not participating; Neil, C. J., and Prewitt and Tomlinson, JJ., concur.  