FILED

May 21, 1999

Cecil Crowson, Jr.

Appellate Court Clerk

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

JAMES E. FARRAR, )

)

Plaintiff/Appellee, )

) Appeal No.

) 01-A-01-9808-CH-00443

VS. )

) Bedford Chancery

) No. 21,083

MINNIE R. SEGROVES and )

ROLAND SEGROVES, Individually, )

and as Executor of the Estate of )

TOM SEGROVES, )

)

Defendants/Appellants. )

APPEALED FROM THE CHANCERY COURT OF BEDFORD COUNTY

AT SHELBYVILLE, TENNESSEE

THE HONORABLE TYRUS H. COBB, CHANCELLOR

R. WHITNEY STEVENS, JR.

P. O. Box 428

Fayetteville, Tennessee 37334

Attorney for Plaintiff/Appellee

VANESSA A. JACKSON

111 North Atlantic Street

Tullahoma, Tennessee 37388

Attorney for Defendants/Appellants

AFFIRMED AND REMANDED

BEN H. CANTRELL

PRESIDING JUDGE, M.S.

CONCUR:

KOCH, J.

COTTRELL, J.
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O P I N I O N

This is an action to receive a credit on a note and deed of trust for

payments made to the holder’s husband/agent. The Chancery Court of Bedford

County granted the relief requested. We affirm.

I.

Minnie Segroves owned two parcels of property in Shelbyville. Charles

Blackwell occupied one parcel, upon which he operated a business called Blackwell

Sales and Tires. Ms. Segroves’ husband, Tom Segroves, a real estate broker,

handled the properties for her. On January 24, 1996 Tom Segroves negotiated a sale

of the two parcels to James E. Farrar for $200,000. The contract stated that the sale

was in consideration of $5,000 in earnest money and $195,000 to be paid at the

closing. Mr. Farrar paid $5,000 in cash to Mr. Segroves.

The next day, Mr. and Ms. Segroves signed a warranty deed conveying

the two parcels to Mr. Farrar. Mr. Segroves did not deliver the deed at that time,

however, because the parties were still working out some details. Since Mr. Blackwell

needed a place to move, Mr. Farrar offered to sell him another parcel of property Mr.

Farrar owned. Mr. Farrar offered the property to Mr. Blackwell for $20,000 and

worked out a way to have that $20,000 applied to the purchase price for the two lots

Mr. Farrar bought from Ms. Segroves. All of the negotiations took place with Mr.

Segroves, who acted as his wife’s agent. She testified that “what Tom said was

okay.”

The record shows that Mr. Farrar signed a $200,000 note and deed of

trust to Ms. Segroves on January 26, 1996. Mr. Segroves apparently also held these
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documents until the deal with Mr. Blackwell was worked out. On February 1, 1996 Mr.

Farrar deeded his other parcel to Mr. Blackwell, and Mr. Blackwell wrote a $1,000

check to Tom Segroves. Mr. Blackwell also signed a $19,000 note to Mr. Segroves

and Mr. Farrar co-signed it. The parties met at the courthouse in Shelbyville and

recorded the various deeds.

Shortly thereafter Tom Segroves became ill. He died in the summer of

1996. Mr. Farrar discovered that the note he gave Ms. Segroves had not been

credited with the $25,000, and he asked the court for relief.

The chancellor found as a fact that the contract price for the two parcels

of property was $200,000; that Mr. Farrar paid $5,000 as earnest money and it was

not returned to him; and that Mr. Segroves agreed to let Mr. Farrar have a credit on

the $200,000 note for the $20,000 sale of his lot to Mr. Blackwell. The chancellor

decreed that Mr. Farrar could be made whole by giving him a $25,000 credit on the

$200,000 note as of February 1, 1996.

II.

The appellant asserts that the chancellor erred in allowing parol

evidence to alter the terms of the note. See Rush v. Chattanooga DuPont Employees’

Credit Union, 358 S.W.2d 333 (Tenn. 1962). The controversy in this case, however,

is not over the terms of the note, but over the credits to be given to the balance owed

on the note.

As to the $20,000 transaction with Mr. Blackwell, there can be no doubt

that it took place subsequent to the date Mr. Farrar signed the note. Therefore, it

could not be affected by the parol evidence rule, which prohibits evidence of

agreements made prior to or contemporaneous with the execution of the note.
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Whelchel Co. v. Ripley Tractor Co., 900 S.W.2d 691 (Tenn. App. 1995). A stronger

case could be made about the $5,000 earnest money, which was paid before the

execution of the note. But the chancellor found that the parties apparently anticipated

that the $5,000 would be returned to Mr. Farrar, and that due to Mr. Segroves’ illness

the money was not returned. Therefore, the testimony did not vary the terms of the

note.

III.

The appellant also contends that the estate of Tom Segroves was a

necessary party to the proceedings below. Rule 19.01 of the Tennessee Rules of

Civil Procedure requires the joinder of all persons necessary to give complete relief

to those already parties, and all persons claiming an interest in the subject of the

action, if their interest or the interests of those already parties might be adversely

affected.

The appellant argues that the effect of the chancellor’s decree was to

make the estate of Tom Segroves liable to Minnie Segroves for the $20,000 credit

stemming from the Blackwell transaction. (The $1,000 check and the $19,000 note

were made payable to Tom Segroves.)

We disagree. The only effect of the chancellor’s decree was a finding

that the consideration received by Tom Segroves from these transactions was

received by him as the agent of Minnie Segroves. As we view the proof, such a

finding was inescapable. Ms. Segroves testified that she left the transaction entirely

in her husband’s hands; whatever consideration he received she considered it paid

to her because it was all theirs. She said, “He just handled it and it was his as far as

he’s concerned.”
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Whether there are any obligations between Ms. Segroves and her

husband’s estate is a matter not decided in this case. We do not think the estate was

a necessary party.

The judgment of the lower court is affirmed and the cause is remanded

to the Chancery Court of Bedford County for any further proceedings necessary. Tax

the costs on appeal to the appellant.

_________________________________

BEN H. CANTRELL, 

PRESIDING JUDGE, M.S.

CONCUR:

_____________________________

WILLIAM C. KOCH, JR., JUDGE

_____________________________

PATRICIA J. COTTRELL, JUDGE