IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON

November 20, 2000 Session

CHRIS FARLEY v. CHARLES ELLIS, ET AL.

A Direct Appeal from the Chancery Court for Crockett County

No. 7642 The Honorable George R. Ellis, Judge

No. W2000-00354-COA-R3-CV - Filed December 27, 2000

Plaintiff sued defendants to enforce alleged oral agreement to convey real estate or alternatively for

damages. The trial court found that the oral agreement violated the statute of frauds, but ordered,

under the doctrine of equitable estoppel, the specific performance of the oral agreement. Defendants

have appealed.

Tenn.R.App.R. 3; Appeal as of Right; Judgment of the Chancery Court Reversed As

Modified and Remanded

W. FRANK CRAWFORD, P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,

J. and DAVID R. FARMER, J., joined.

Mitchell G. Tollison, Humboldt, For Appellants, Charles Ellis and Wanda Borders Ellis

Jerald M. Campbell, Jr., Trenton, For Appellee, Chris Farley

OPINION

Plaintiff, Chris Farley, filed a complaint on March 9, 1999, against defendants, Charles Ellis

(hereinafter defendant or Ellis) and Wanda Borders Ellis (hereinafter Ms. Borders) seeking specific

performance of an alleged oral agreement to convey real estate or in the alternative for money

damages. The complaint alleges that the defendants, Charles Ellis and Dorothy Ellis, plaintiff’s

mother, were married in June 1990. In the summer or fall of 1993, defendant began asking the

plaintiff to move from Arkansas to Crockett County, Tennessee, to help defendant care for

plaintiff’s mother. The complaint avers that in exchange for plaintiff doing this, Charles Ellis

agreed to deed “some” acreage of land to plaintiff. The complaint further avers that Ellis continued

asking plaintiff to move and, finally, in approximately June or July, 1994, plaintiff did begin

improving the real property. He worked on clearing the land for nearly three months and lived there

part of that time in a trailer in defendant’s yard. Plaintiff further avers that subsequently he

purchased a double-wide trailer, moved it on the property, and moved his family from Arkansas to

the property. He alleges that he expended sums of money in placing improvements on the property
-2-

and spent many hours of labor improving the property. Plaintiff further avers that some time after

doing this work, he requested the defendant to deed the property as he had agreed, but that instead,

defendant “told plaintiff he could live on the property as long as he liked, so long as he paid the

property taxes on the land.” The complaint avers that plaintiff’s mother and Ellis divorced and that

plaintiff had paid the property taxes every year that he lived on the property since he was told to do

so by the defendant, except for the 1998 property taxes, which Ellis paid before plaintiff knew that

they were due. Plaintiff avers that in April of 1998, defendant, began telling the plaintiff that he

must move himself and his mobile home from the real property, and also quit claimed the property

to defendant, Wanda Borders Ellis, who was then Wanda Borders. Ms. Borders then made attempts

to remove plaintiff from the property and filed a criminal trespass warrant against the plaintiff. The

complaint alleges that the property was transferred to said Wanda Borders in an attempt to defraud

the court and the plaintiff and prays that the conveyance be set aside. Plaintiff avers that defendant

breached his contract with plaintiff by not transferring the property and prays that defendant be

required to specifically perform the contract. 

Alternatively, plaintiff seeks reimbursement for his labor and improvements on the real

estate, for the losses he incurred by moving from Arkansas and for the cost of moving his home to

another location. Alternatively, he prays that he be allowed to live on the property as long as he

pays the taxes.

Defendants responded to the complaint by a motion to dismiss for failure to state a claim,

a motion to strike the allegations concerning the alleged fraudulent transfer, and an affirmative

defense of the statute of frauds. Defendants further answered the complaint by denying the material

allegations thereof as to an agreement. Defendants also filed a counter-complaint seeking

possession of the property and rental for the property from April 17, 1998 until plaintiff removes

himself from the property at the rate of $150.00 per month. 

A non-jury trial was held on September 27, 1999. Mr. Farley testified regarding the oral

agreement as follows:

But the property itself, I invested all the money into it.

Charlie said, “Hey, you can put you a trailer up there. You can live

there as long as want. I’m going to give you the property.

Eventually, I’ll deed it in your name.”

Me and my wife eventually started having trouble, as far as

the marriage and stuff. You know, it wasn’t nothing that we didn’t

breeze through later on. But he told me - - the exact words he said

is, “Hey, if ya’ll got a divorce, I don’t want a bunch of scallywags

living up there, so right now I’m going to hang on to the deed.” 

Once it became apparent to Mr. Farley that he was not going to receive the deed, he

continued living on the property. Prior to the marriage of Ms. Borders to Ellis in June of 1999, Mr.

Farley was called to testify in a custody dispute regarding Ms. Borders’ child from a previous
-3-

marriage. The nature of his testimony was that Ms. Borders was living with Ellis. Subsequent to

testifying, he received a letter from Ms. Rainwater, counsel for Ms. Borders, asking him to remove

himself from the property. 

 Mr. Farley claimed to have spent fourteen thousand to fifteen thousand dollars in making

improvements to the property, however, he did not have documentation to verify that amount. He

stated that the improvements to the property at his expense include: a septic tank, a concrete

driveway, a water line, dozer work, grass seed, trees, a concrete pad, an outbuilding, concrete

sidewalks and molding. He also claims compensation for his labor in making these improvements.

Regarding the property taxes on the land, Mr. Farley estimates they were $22.23 before he moved

his trailer on the land and $232.00 after. 

Mrs. Dorothy Ellis next testified, stating that she wanted her son and his wife and child to

move to Crockett County. Charles Ellis said that they could have the place where Chris Farley now

resides. Mr. Ellis told her two times that he was going to deed the land to her son, but after they

had relocated, Mr. Ellis stated that he wanted to wait a while before changing the deed. Mr. Farley

and his wife worked very hard to make the land level and attractive. Dorothy Ellis further testified

that the terms of the agreement included that her son would receive the land, if he helped in taking

care of her, as she had suffered two nervous breakdowns. Barbara Froio, Mr. Ellis’s sister, testified

that before Mr. Farley moved from Arkansas, her brother told her sometime in 1993 or 1994 that

he had made a verbal agreement with Mr. Farley to give him a place to live.

Mr. Wayne B. Parlow, owner of Parlow Realty Company and Parlow Appraisal Services,

testified on behalf of the defendants. Mr. Parlow stated that he had prepared an appraisal of the

5.62 acre tract of land deeded from Ellis to Ms. Borders on March 17, 1999, and determined that

the value of the land was $15,000.00. Mr. Parlow estimated that the market rental value of the

property was $150.00 per month, $1,800.00 annually. 

Mr. Charles Ellis testified on his own behalf, denying that he told Mr. Farley that he could

live on his land as long as he paid the taxes. He admits that he allowed Mr. Farley to live on the

land so that Dorothy Ellis’s grandchild could be near her, and stated that Mr. Farley never paid any

rent while living on the property. Mr. Ellis had no intention of reimbursing Mr. Farley for

improvements made on the land, because he benefitted from the improvements, as he was living

on the land. Mr. Ellis denies that he encouraged, or asked Mr. Farley to move from Arkansas, and

testified that he had no intention at any time of deeding the property to Mr. Farley. Mr. Ellis stated

that the only thing that he had communicated to Mr. Farley regarding the land was that “while he

was living there, he would pay the taxes. Not as long as you want to live there, no.” Mr. Ellis

testified that he conveyed the property to Ms. Borders in April of 1998, for the consideration of

$10.00, but denies that the conveyance had any relation to a court order mandating that Ms.

Borders’s daughter not reside or be left alone with Mr. Ellis. Ms. Borders testified that she is the

owner of the 5.62 acre tract and although she has no plans for the land, she wants Mr. Farley to

leave, because she would rather have the land vacant. 
-4-

On February 3, 2000, the trial court filed its decree which included finding of facts and

conclusions of law. The court found that in the summer of 1993, Mr. Ellis made an offer to plaintiff

that he would deed plaintiff land for a home in exchange for plaintiff relocating his family from

Arkansas to Crockett County, Tennessee, to help Mr. Ellis with his wife, Dorothy Ellis. The trial

court found that after one year, Mr. Farley accepted the offer, began improving the subject land, and

relocated his family. After Mr. Farley fulfilled his part of the agreement, Mr. Ellis refused to deed

the promised property to him, but told him he could remain on the property for as long as he paid

the property taxes. The court took judicial notice that Charles Ellis began a liaison with Wanda

Borders, and that she alleged that she was not living with Mr. Ellis, but staying in the camper trailer

outside of his residence. The trial court found that in 1998, Charles Ellis told Chris Farley that he

would have to move. Mr. Ellis subsequently transferred the property to Wanda Borders, following

the entry of an order forbidding Wanda Borders to bring her minor daughter on to the property of

Charles Ellis. The trial court found that Chris Farley had testified at a custody hearing that Wanda

Borders had been living with Charles Ellis. That court found a lack of credibility in the testimony

of Charles Ellis and Wanda Borders. Some time thereafter, Charles Ellis married Wanda Borders,

and Chris Farley continued to make improvement on the property. In addition, the trial court found

that although Charles Ellis denied that he made an offer to induce Chris Farley to move from

Arkansas to Tennessee, he had no creditable explanation as to why Chris Farley moved to this

property, and expended time and money to improve the land. The court found that Charles Ellis

was not a credible witness.

The trial court found that plaintiff relied upon the promise of Mr. Ellis in moving his family

from Arkansas to Tennessee, and in spending a great deal of money on the subject property, and

that a valid contract existed between plaintiff and Mr. Ellis, based upon the theory of promissory

estoppel. The trial court stated in pertinent part:

The agreement between Charles Ellis and

Chris Farley violates the statute of frauds;

nevertheless, specific performance is appropriate

under the equitable estoppel doctrine. At this

juncture, justice and good conscience dictate that the

agreement, which Charles Ellis entered into with

Chris Farley should be enforced. The conveyance to

Wanda Borders Ellis is set aside as an attempt by

Charles Ellis and Wanda Borders to fraudulently

evade performing his contract with his former

stepson. Charles Ellis is ordered to deed the property

to Chris Farley as he agreed to do when he induced

him to move to Tennessee.

Defendants have appealed and present five issues for review.

Since this case was tried by the trial court sitting without a jury, we review the case de novo

upon the record with a presumption of correctness of the findings of fact by the trial court. Unless
-5-

the evidence preponderates against the findings, we must affirm, absent error of law. Tenn. R. App.

P. 13(d).

The first issue for review as stated in defendants’ brief is:

I. The trial court erred in taking judicial notice of matters not

presented at trial.

Defendants complain about the trial court’s following statements in the findings of fact: 

The court takes judicial notice that at sometime between then

and this hearing Charles Ellis began a liaison with Wanda Borders.

At one point she alleged that she was not living with Charles Ellis

but was staying in the camper trailer outside of his residence.

Charles Ellis told Chris Farley that he would have to remove

himself from the property in 1998. After a hearing in this court

where Wanda Borders was ordered not to take her minor daughter

back to the home of Charles Ellis where the court found she had

been living, Charles Ellis testified that he sold this property to

Wanda Borders for ten dollars. In the custody hearing of Wanda

Borders, Chris Farley had testified that she had been living with

Charles Ellis. The court found a lack of credibility in the testimony

of Charles Ellis and Wanda Borders.

“The court cannot take judicial knowledge of a former suit in the same court. It must be

established by evidence.” (Citations omitted.) Hudson v. Shoulders, 22 Tenn.App. 301, 122

S.W.2d 817, 819 (1938).

In Sutherland v. Sutherland, 831 S.W.2d 283 (Tenn. Ct. App. 1991), this Court said:

Courts may not take “judicial notice” of testimony in prior

unrelated cases. Courts must decided cases on competent evidence

introduced in the trial of the case. However, it may take judicial

notice of certain facts which are common knowledge to all

intelligent men. 29 Am.Jur.2d Evidence § 14 (1967). “[F]acts

which are not judicially cognizable must be proved, even though

known to the judge or to the court as an individual.” Id. at § 15. 

Id. at 285.

While it appears that the trial court erroneously took judicial notice of certain facts in a prior

case it appears from the record as a whole that the facts which the trial court noticed did not have

a bearing on the trial court’s decision in this case. Therefore, this issue is without merit.
-6-

The second issue presented for review, as stated in appellants’ brief, is:

II. The evidence preponderates against the trial court’s finding that

defendant Charles Ellis had no credible explanation as to why

plaintiff moved to the property at issue and spent time and money

making it livable.

The trial court merely stated in its findings of fact that “he [Ellis] had no credible

explanation why Chris Farley moved to this property and spent so much time and money on making

it livable. The court did not find Charles Ellis a credible witness.”

Defendants point out in their brief that Ellis testified that plaintiff’s mother wanted him to

move and have the grandchild there and also that the plaintiff wanted to move to be with his mother.

The transcript shows no factual basis for these statements, such as conversations with Farley

and similar testimony. Perhaps, the trial judge felt that this was Ellis’s impression. In any event,

the trial court considered the record as a whole and as the trier of fact must give the testimony the

weight, faith, and credit which it deserves. The trial court had the benefit of other explanations

made by Mr. Ellis concerning his dealings with plaintiff and was charged with the responsibility

of weighing that evidence, along with all the other evidence, to determine Mr. Ellis’s credibility.

We find no merit in this issue.

The three remaining issues presented for review, as stated in appellants’ brief, are:

III. The trial court erred in setting aside the conveyance from

defendant Charles Ellis to defendant Wanda Borders Ellis.

IV. The trial court erred in concluding that plaintiff had an

enforceable parol contract for the sale of land in violation of the

statue of frauds and ordering defendant Charles Ellis to deed the

property to plaintiff.

V. The trial court erred in refusing to grant the relief sought in

defendants’ counter-complaint.

We believe these three issues can be combined into a single issue:

Whether the trial court erred in ordering the specific performance of

the alleged oral contract, and, if so, whether plaintiff is entitled to

any relief.

Charles and Wanda Ellis contend that, assuming that there existed an oral contract, as

alleged by plaintiff, such contract would be in violation of the statue of frauds, and therefore
-7-

unenforceable. Defendants contend that under Tennessee law, such a contract is voidable at the

election of either party. Once an oral contract is disaffirmed, neither specific performance, nor

damages are available. They further argue that the alleged oral contract is not enforceable, as it did

not contain the essential terms or mutuality of obligation. Defendants assert that Mr. Farley realized

a profit of $15,000.00 by selling his property and moving from Arkansas to Tennessee to be closer

to his mother at her request. Furthermore, after Charles and Dorothy Ellis divorced, there was no

longer a reason for Chris Farley to live on the property. 

The Tennessee statute of frauds prohibits the enforcement of contacts for the sale of land

unless the promise or agreement is in writing, and signed by the party to be charged. See T. C.A.

§ 29-2-101(5). Tennessee appellant courts continuously have denied enforcement of an oral

contract for the sale of land on the basis of part performance, making it the rule in this state that part

performance of an oral contract for the sale of land will not take the agreement out of the statute of

frauds. Baliles v. Cities Service Co., 578 S.W.2d 621, 624 (Tenn. 1979) (citing Knight v. Knight,

222 Tenn. 367, 436 S.W.2d 289 (1969); and Goodloe v. Goodloe, 116 Tenn. 252, 92 S.W. 767

(1905)). The statue of frauds is designed “to reduce contracts to a certainty, in order to avoid perjury

on the one hand and fraud on the other.” Price v. Tennessee Products & Chemical Corporation,

53 Tenn. App. 624, 385 S.W.2d 301 (1964). Therefore, to comply with the statute of frauds, such

agreement must show, with reasonable certainty, the material terms intended by the parties to the

sale. See Johnson v. Haynes, 532 S.W.2d 561 (Tenn. Ct. App. 1975), (“The memorandum must

contain the essential terms of the contract expressed with such certainty that they may be understood

from the memorandum itself or some other writing to which it refers or with which it is connected

without resort to parol evidence.”) Id. at 565. To comply with the statute of frauds, the

memorandum agreement to sell real estate must show with reasonable certainty the estate intended

to be sold. See Baliles at 623. 

 In exceptional cases, the application of the doctrine of equitable estoppel has been used to

mitigate the harshness of this rule, “where to enforce the statute of frauds would make it an

instrument of hardship and oppression, verging on actual fraud.” Baliles, 578 S.W. 2d 624 (citing

Covington v. McMurray, 4 Tenn. C.C.A. 378 (1913); and Gheen v.Osborn, 58 Tenn. 61 (1872).

See also Decherd v. Blanton, 35 Tenn. 373 (1855); Williams v. Conrad, 30 Tenn. 412 (1850);

Bloomstein v. Clees Brothers, 3 Cooper’s Tenn. Ch. 433 (1877); and Interstate Co. v. Bry-Block

Mercantile Co., 30 F2d 172 (D.C.W.D. Tenn.) (1928)). 

The record in the instant case is devoid of proof of the material terms of any agreement to

convey the real estate, including, but not limited thereto, the terms of the performance, price, if any,

and the specific property covered by the alleged agreement. Mr. Farley’s own testimony tended to

negate a certain oral agreement for conveyance of the title to the property. Under the state of this

record, the doctrine of equitable estoppel cannot be used to order a conveyance of the property. To

do so would be in effect making a contract for the parties. Courts do not make contracts; they only

interpret and enforce them. See Turner v. Zager, 363 S.W.2d 512, 519 (Tenn. Ct. App. 1962).

However, Mr. Farley is not without relief. The proof demonstrates that Mr. Farley was granted a

license to enter and occupy some of Ellis’s property for as long as he wished if he paid the property
-8-

taxes. We distinguish Mr. Farley’s right from a lease, as he was granted permission by Mr. Ellis

under their agreement which was not a leasehold. 

“A ‘license’, with respect to real estate, is an authority to do a particular act or series of acts

on another’s land without possessing any estate therein.” Barksdale v. Marcum, 7 Tenn. App. 697,

708, cert, den., (1928). 

In Heiskell v. Cobb, 58 Tenn. 638 (1872) the Court held an oral agreement enforceable that

allowed the plaintiff to erect a milldam which flooded a section of the adjacent land owned by the

defendant, where the defendant not only encouraged the plaintiff to build the dam, but also assisted

in its construction, and acquiesced in the use of the dam for several years. The Heiskell Court

stated:

If one enters upon the land of another by virtue of a parol license,

given for a consideration, and erect fixtures, such license becomes

irrevocable.

Id. at 639. 

In Daugherty v. Toomey, 222 S.W.2d 195, 196 (Tenn. Ct. App. 1949) the parties owned

adjoining property and orally agreed to build a wall near the property line to serve as a shared

garage wall. The wall, and part of the defendants’ garage, were on the plaintiffs’ property, a fact

of which the plaintiffs were aware. Id. Several years after the wall was built, the plaintiffs sought

to require the defendants to remove that part of their garage located on the plaintiffs’ property. Id.

The trial court decision, denying plaintiffs’ request, and applying the doctrine of equitable estoppel

was affirmed on appeal. The Daugherty Court quoted the following from 53 C.J.S., Licenses § 90:

Where the licensee has acted under the license in good faith, and has

incurred expense in the execution of it, by making valuable

improvements or otherwise, it is regarded in equity as an executed

contract and substantially an easement, the revocation of which

would be a fraud on the licensee, and therefore the licensor is

estopped to revoke it, particularly where the licensor joins in the

enterprise and accepts the benefits of the licensee’s labor and

expense; and the rights of the licensee will continue for as long a

time as the nature of the license calls for. It has also been held that

the license cannot be revoked without reimbursing the licensee for

his expenditures or otherwise placing him in statu quo.

Dougherty, 222 S.W.2d at 196 (emphasis added). The Court also stated that the plaintiffs had

acquired an estimate of the cost to move and rebuild defendants garage, yet they had made no offer

to pay the expense, or to reimburse the defendants. Therefore, the Court reasoned, it would be a

manifest inequity to grant the plaintiffs the sought relief. Id. at 197.
-9-

 In Lee Highway & Associates, L.P., v. Pryor Bacon Company, supra, the Eastern Section

 of this Court held that a license for a right of access could be revoked “without working a fraud on

the plaintiff provided the defendant fully reimburses the plaintiff for the monies it expended in

building the cut-through.” Id. at *5.

In the instant case, the record indicates that Charles Ellis gave Chris Farley permission to

enter and occupy the subject property for as long as he wished, as long as he paid the taxes. We

agree with the trial court that the consideration provided by Mr. Farley pursuant to his agreement

was that he “move his home in Arkansas to Crockett County, Tennessee to help Charles Ellis care

for Dorothy Ellis.” However, we believe the evidence preponderates against the trial court’s finding

that the agreement was an oral contract for the sale of land. Instead, we believe that Mr. Ellis

granted Mr. Farley a license, allowing Mr. Farley to occupy the property in exchange for the

consideration he provided, as long as he paid the taxes. The record shows that upon Mr. Ellis’s

representations, Mr. Farley moved his family to Crockett County, taking up residence on the

property adjacent to the home of Charles and Dorothy Ellis. Mr. Farley paid the property taxes from

1994 though 1997, while Charles Ellis owned the property. He attempted to meet the condition of

his occupancy by mailing a check to Wanda Ellis for the 1998 property taxes, however, was

prevented from fulfilling his obligation in 1998, as she returned the check. 

Based on the trial court’s findings which are supported by the record and under the above

authorities, Mr. Ellis is estopped from removing Mr. Farley from the property without proper

reimbursement for the damages lawfully due. When parties would be estopped, their heirs and

privies in estate are also estopped. See LaRue v. Greene County Bank, 179 Tenn. 394, 166 S.W.2d

1044, 1052 (1942) and Heiskell v. Cobb, 58 Tenn. 638 (1872). Therefore, although it was Mr. Ellis

that granted a license to Mr. Farley, Wanda Ellis, as the present owner of the property, is estopped

to revoke Mr. Farley’s license without tendering reimbursement to Mr. Farley for his expenditures

for permanent improvements on the land.

In his complaint, Mr. Farley sought the alternative relief of damages to reimburse him for

his labor and the material purchased in making permanent improvements to the property as well as

his moving expenses. Although Mr. Farley claims that he spent somewhere between $15,000 and

$16,000 in improving the land, the record does not establish the value of the improvements on the

land. It appears that Mr. Farley and his wife did much of the work themselves and were able to

trade some of the materials. Mr. Farley should not receive reimbursement for the property taxes

paid nor for his relocation expenses, as these appear to be part of the licensing agreement. Also,

no additional rent is due Mr. and Mrs. Ellis, as he provided the consideration agreed to and when

requested to vacate the premises, he was not tendered reimbursement for the improvements made.

The case should be remanded to the trial court for a determination of damages based upon the value

of the permanent improvements to the land.

The decree of the trial court setting aside the deed of the property to defendant Wanda Ellis

is reversed, and that part of the decree ordering Charles Ellis to deed the property to Chris Farley

is reversed. The decree is modified to order that the plaintiff and counter-defendant, Chris Farley,
-10-

remove his mobile home and vacate the property upon reimbursement by Wanda Ellis for the

permanent improvements made to the property by Mr. Farley. The case is remanded to the trial

court for further proceedings to determine the value of the permanent improvements made to the

property by Mr. Farley. Costs of the appeal are assessed one-half to Chris Farley and his surety and

one-half to counter-plaintiffs, Charles Ellis and Wanda Ellis, and their surety.

__________________________________________

W.FRANKCRAWFORD, PRESIDINGJUDGE,W.S.