# FILED July 31, 1997 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COURT OF APPEALS OF TENNESSEE WESTERN SECTION AT JACKSON

______________________________________________ BILLIE FRAN CES MCLEMO RE, EXECUTRIX

OF THE ESTATE OF WILLIAM RALPH MCLEMORE, Plaintiff-Appellee, C.A. No. 02A01-9702-CH-00030 Vs. Gibson Chancery No. 7689 J. W. POWELL, Defend ant-App ellant, RAYMOND NELSON, Defend ant.

_________________________________________ __________________________________ _ FROM THE GI

BSON COUNT

Y CHANCERY

COURT THE HONORABLE GEORGE R. ELLIS, JUDGE
William F. Kendall, III; Gregory A. Petrinjak Waldrop & Hall, P.A., of Jackson

For Appellee Thomas E. Harwood of Trenton For Appellant
REVERSED AND D

ISMISSED Opinion fi led:

W. FRANK CRAWFORD,

PRESIDING J

UDGE, W.S.
CONCUR: ALAN E. HIGH

ERS, JUDGE DAVID R.FARMER,

JUDGE
This is a suit to c ollect a d ebt owing from a pu

rchase of cattle . Defen dant, J. W . Powell (Powell), appealsthe judgme nt of the trial cou

rt finding that ther e was an agency relation ship between Powell and his co-defendant, Raymond Nelson (Nelson), and awa rding t he plaintiff,1 McLemore died on May 22, 1996. The executrix of his estate, Billie France s

McLemore, who is also his widow, revived the action in her name. 2 Ralph McLemore (McLemore), a judgment against Powell in the amount of $9,867.98. 1 In November 1987, McLemore sold Nelson sixty-seven head of c attle at $350.00 a head. Nelson then sold forty-five head of the cattle at a cattle auction

in McLemore’s name, and the checks in payment

for the cattle were payable to McLe more. McLemore endorsed some of the checks that he r

eceive d from the

sale of th

e cattle over to N elson. In

retu rn, Nelson gav e McLemore a signed, blank note . McLemor e later f illed in the note for the amount of $27,500.00 and contends that

Nelson a ssured hi m that Powe ll, as Nel son’s pri ncipal, w ould make payment within ninety days. Powell and McLemore had entered into six transactions before this date that
were negotiated by Nelson on Powell’s behalf. Neither Nelson nor Powell paid McLemore for the cattle in this particular transaction. On December 30, 1988, McLemore filed a c omplaint against Ne lson and Powell all eging, inter alia , that Nelson negotiated the sale of sixty-seven head of ca ttle with McLemore and

that Nelson was acting as Powe ll’s agen t or repr esentat ive in the sale . In the c omplaint, McLemore
avers that Nelson execute d a promis sory note in the amount of $27, 500.00 on b ehalf of Powell, that Powell ad

mitted toMcLemore that Nelson was his agent or represe ntative in the sale of the cattle, and that Powell obtained ownership of the cattle pursuant to the transaction. McLemore further avers th at Powell

paid $4,000.00 of the $27,500.00, but that McLemore has not received the remaining $23,500.00 due under thepromissory note. In C ount I of t he compla

int, McLemore demands payment of the promissory note from Powell, pursuant to T.C.A. § 47-2- 201 et seq. , for the transaction entered into byNelson on Powell’s behalf, plus attorney’s fees and interest . In Count II of the complaint, McLemore avers that Nelson and Powell violat e d certain maxims of equity and demands judgment in the amount of $23,500.00, plus attorney’s fees and interest. On February 1, 1989, Powell filed an answer admitting that Nelson executed a promissory note for the purchase of the cattle from McLemore, but denying all of the material allegations in the com

plaint, including that Nelson was acting as his agent or representative in the sale. Als o on Febru ary 1, 19 89, Powell fil ed a c ross-claim against Nelson averring that N elson would be liable to Powell should McLemore obtain a judgment against Powe ll. O n August 8, 1989, Nelson filed an answer in which he admitted that he signed a

blank note after buying some cat

tle from M cLemore

and that t he note was part of the proceeds for the payment3

of catt le that he bought from McLemore. Nelson alleges, however , that McLemore received most of the proceeds for

the cattle and that Nelson signed the blank note for the small balance remaining after the sale an d payment. On October 1, 1991, Powell filed an amended answer raising the Statute of Frauds in T.C.A. § 47-2-201 and § 29-2-101 and a la ck of consideration
as additiona

l defens es. Also on October 1, 1991, Powell filed a motion for

summary ju dgment. After a hearing, the trial court

entered an order on January 25, 1993 granting summary judgment in favor of Powell and dismissing the action as to Nelson. McLemore appeale d the judgm ent of the trial cou rt to this Court, and in an opinion dated February 24, 1994, this Court held that there was a material fact in dispute as to the existence of
an agency relation ship betwe

en Powell and Nelson at the time of the transaction. See McLe more
v. Powell , No. 02A01-9302-CH-00043, 1994 WL 53643, at *4 (Tenn. App. Feb. 24, 1994). Th is Courtfurther held that T.C.A. § 29-2-101 was inapplicable, but that if the proof established an agency relationship, McLemore’s claim “m ay indeed f all within t

he exce ptions set f

orth in T.C.A. § 47-2-201.” Id. at *4-5. Accordingly, this Court reversed the grant of summary o f judgment and remanded the case for trial. Id. at *5. On Novembe

r 17, 1995 , Nelson f

iled a moti on to amend h is answer to add that McLemore’s rightof action accrued on November 4, 1987. In the proposed amendment, Nelson asserted that McLemore had not amended his complaint to assert a right of action for breach of contract and that such a claim was now barred b y t he statute of limitations. The trial court entered an order granting this motion on January 11, 1996. After a bench trial, the trial court entered an order on August 29, 1996 incorporating the following findings by reference. The trial court found that Nelson purchased sixty-seven head of cattle from McLemore at $350.00 per head for a total of $23,450.00. The trial court further found that Nelson took approximately forty-five head of cattle and sold them at an auction, but instructed the sale barn to issue the checks for the proceeds in McLemore’s name. The trial court then found that McLemore endorsed $13,582.02 in checks over to Ne lson at his request, that Nelson promised

to pay McLemore back in sixty to ninety days, and that Nelson signed a blank document to evidence the de

bt. McLemore later filled in the amount portion of the document in the amount of $27,500.00, which included $4,000.00 that is not part of this sui t. The tri a l court found tha

t N elson was acting as Powell’s agent in the original transaction and that the document in questio n fell

within an exception to the Statute of Frauds. The trial court also found4

that Nelson was not acting as Powell’s agent when McLemore endorsed the che cks for the sale of the cattle over

to Nelson and that the amount owing as a result of this transaction, which was in effec t a loan fro m McLemor

e to Nelso n, was Ne

lson’s ind ividual de bt. Finally, the trial court award ed McLemore a judgment against Powell in the amount of $9,986.98 for the difference between the note and the amount owing under the original cattle purc hase agreement. Powell ap peals the judgment o f the tria

l court a nd prese nts six issue s for review: (1) Whether

th e evidence supports the verdict when the de p ositions of the de cedent, McLemor e, and the

defenda nt, Powell, were not read into the re cord, bu t were f iled as exhibits in violation of Tenn. R. Civ. P. 32.01. (2) Whether the trial court erred when it failed to dismiss the suit upon motion of the defendant, Powell, because the complai nt reflected on its face that McLemore wa s suing on a note, but McLemore and his counsel admitted t h at the note was merely a record of the transaction and argued that McLemore was entitled to a judgme

nt under t he equita ble count s of the c omplaint. (3) Whether the defendant Nelson was an a gent of Powell in the transaction out of which this lawsuit arose. (4) Whether the provisions of T.C.A. § 47-3-401 are applica ble to the note in this case. (5) Whether

the provi sions of T .C.A. § 47- 3-403 ar e applic able to the note in this case. (6) Whether the defendant Powell is relieved of liability under the Statute of Frauds in T.C.A. § 47-2-201. Since this case was tried by the court sitting without a jury, we review the case de novo up on the record w ith a pre sumption of correctness of th

e finding s of fac t by the tri al court
. Unless the evidence preponderates against the findings, we must affirm, absent error of law. T.R.A.P. 13(d). In his first issue, Powell

contendsthat the e

vidence does not su

pport the judgment in

this
case. He points outthat the trial court must have relied on McLemore and Powell’s depos itions, which were a

dmitted asexhibits a

t trial, in making its decision because the trial court could not have found that there was an agency rela tionship otherwise. Powell argues that the depositions
were not evidence that the trial cour t could pro perly consider because the depositions were improper ly admitted a s exhibits. In suppor t of his ar

gument, Pow ell relie s o n Nelm s v. Tennessee Farmers Mutual Insurance Co. , 613 S.W.2d 481 (Tenn. App. 1978), and Doochin
v. United States Fidelity & Guaranty Co. , 854 S.W.2d 109 (Tenn. App
. 1993), for the proposition that depositions may not be admitted as exhibits at trial.5 The Tennessee Rules of

Civil Procedure provide t he follow ing with re spect to the use of deposi tions in court proc eedings: 32.01. Use of Depositions. — At the trial or upon the hearing of a motion or an interlocutory proceeding , any part or all of a deposition, so far

as admissible under the rules of evidence app lied as though the witness were then present and testifying, may be used against any party who was present or represented at the taking of the deposition or who had reasonable notice thereof , in accor dance w ith any of

the following provis ions: (1) Any deposition may be used by any party for the purpose of cont

rad icting or impeaching the testimony o f depone

nt as a wit

ness. (2) The deposition of a party or of anyone who at t he time of taking the deposition was an o fficer , director, or managing agent, or a person designatedunder Rule 30.02(6) or 31.01 to testify on behalf o f a public or private corporation, partner ship or association , governmental agency or individua

l proprie torshipwhich is a party may be used by an adverse party for any pur pose. (3) The depo sition of a

witness, w

hether o r not a par ty, may be use d by any pa rty for a ny purpos e if the cour t finds: (A) that

the witness is dead; or ( B) that the w itness is a

t a grea ter dista nce tha n 100 miles from the p lace of trial or h earing o r is outof the state, unless it appears that the absence of the witness was procure d by the pa rty offering the depositio n; or (C) that the w itness is un able to attend or testif

y becau se of age, illness, infirmity, or imprisonme

nt; or (D) that the p arty offering the deposition has been unable to procure the attendance of th e witness by subpoena or the witness is exempt from subpoena to trial under T. C.A. § 24-9-101; or (E) upon application and notice, that such e xcep tional cir cumstanc es exist as to mak e it d esirable, in the interest of justice and with due regard to the import a nce of presenting the testim

ony of witn

esses or ally in open court, to all ow the deposition to be used. No twithstanding the foregoing pro visions, depositions o f e xperts taken pursuant to the provisions of Rule 26.02(4) may not be usedat the trial except t

o impeac h in acco

rdance with the provisions of Rule 32.01(1). Tenn. R. Civ. P. 32.01(1)-(3). The cases on

which Pow ell relie s are dis tinguish able from t his case. Those cases involved jury t r ials, whereas this case involved a bench trial. As stated in Campbell Co unty Board of Education v. Brownlee-Kesterson, Inc. , 677 S.W.2d 457 (Tenn. App. 1984), “If the deposition is admissible it may be read to the trier of facts bycounsel or may simply be handed to the Judge

for his re ading if th

e Judge h appens to

be the tr ie r of fa cts.” Id. at 463-64.6

Obviously, in a jury case it would not be feasible to allow each juror to rea d the depositions. In this case, the use of

McLemore’s deposition is clearly authorized by Tenn. R. Civ. P. 32.01 (3)(A) because McLemore died before t

he trial of

this cause. Additionally, the use of Powell’s deposition was proper as well because Tenn. R. Civ. P. 32.01(2) provides that the deposition of an adverse party may be used for a ny purpose. Powell contends that the use of his deposition was improper because he was pr esent at the trial and able to testify. In Ball v. Overton Square, Inc. , 731 S.W.2d 536 (Tenn. App. 1987), the plaintiff’s attorney read the deposition of the defendant company’ s preside

nt into the record at a jury trial. Id. at 539. On appeal, the defendant company challenged the use of the deposition because its president was present during the reading of the deposition and testifyin g at the tr

ial. I d. This Court noted that Tenn. R. Civ. P. 32.01 “clearly provides that a party ma y use th e deposition of an adverse party for any purpose .” Id. Consequently, the Court held that the trial court did not err in allowing the deposition to be read into the record, even though the company’s president was present and testifying at the trial. Id. Although these depositions were admitted as exhibits at trial and not simply filed as part of the rec ord, this is merely form over substance and will be considered as filed and part of the record. It is clear that these depositions were evidence that could be considered by the trial court, and the trial

court wa s well with

in its provinc e as the t

rier of f act to co nsider them in this
manner. This issue

is without me

rit. W e next address Powell’s second issue. In his second issue, Powell contends that th e trial court erred in failing to dismiss the suit. Powell asserts that McLemore’s complai n t reflected on its f

ace tha t he was su

ing on a no te, but tha

t McLemor

e and his c ounsel bot

h admitted that the document at issue was never intended to be a note, but merely a record of the transaction. Powell argues that, despite McLemore’s assertions to the contrar y, McL emore is notentitled t

o a judgme

nt under t he equita ble counts of the complaint under the theory that the note is merely a record of the transaction. McLemore, on the o ther han d, contends that the trial cou rt found t hat Powel l is liable under the oral c ontract to purchase cattle that Nelson entered into on his beha lf. McLemore argues that Powell’s liabil ity arise s out of his agreem ent to a c ontract , and not out of the note, and that t his contr act is co ntemplate d under th e equita ble count s of the c omplaint. The trial cou

rt in this c ase found that Nel son was a c ting as Powell’s agent when he7

purchas ed cattle from McLemore in November 1987, and the trial c ourt rendered a judgment again st Powell for

the amoun

t owing und

er this alleged contract. The comp laint in th is cas e merely demands payment of the promissory note and a judgment under the principles of e quity. The complaint does not seek t o recove r for a b reach o f contra

ct, nor ha s McLemor

e amende d his complaint to bring su ch a cau se of ac tion. More over, we fail to se e th at a cau se of ac ti on for breach of contr act is en compasse d within the second c ount of the

complain t. Because the case went to tr

ial despit e the fa ct that ple adings did

not encom

pass a cause of action f or brea ch of con tract, w e must dete

rmine whe

ther this issue was triedby the implied consent o f the par

ties unde r Tenn. R. Civ. 15.02. The Rule r eads in pe rtinent pa rt as foll ows: 15.02. Amen dment s to Conform to the Evidence. — When issues not raised by the pleading s are tri ed by exp ress or implied c onsent o f the par

ties, they shall be tr

eated in all respects as if they had been raised

in the pl eadings. Such amendment of the pleadings as ma

y be nec essary to cause them to conform to the evidence a nd to r aise these issues may be made upon motion of any party at

any time, even af

ter judgme

nt; but fai lure so to amend doe s not aff

ect the r esult of th e trial of these issu es. Tenn. R. Civ. P. 15.02. Implied consent hinges on the issues that were actually litigated by the parties, and the f

ailure to amend or to request to amend is not dispositive. Zack Cheek Builde rs, Inc. v. McLeod , 597 S.W.2d 888, 890 (Tenn. 1980). Genera lly speaking, trial by implied consent will be fo und when t

he party opposed to

the
a mendment

knew or reasonably should have known of the evidenc e relating to the new issue , didnot objec t to this evidence, and was not prejudiced thereby. Id. As the Te nnessee Supreme Court stated in Zack Cheek Builders, Inc. v. McLeod : “Implied consent . . . is much mor e difficult to esta

blish (than ex press co nsent) and seems to depend on whet he r the parties recognized that an issue not presented by the ple adings en

tered the case a

t trial. A p arty who

knowingly acquiesces in the introduction of evidence relating to issues that are beyond the pleadings is in no positi on to contest a motion to conform. Thus, consent genera lly is f ound when evidence is introduced without objection, or when the partyopposing th

e motion to a

mend himse

lf produced evidence bearing on the new issue.” Id. (quoting 6 Wright & Miller, Federal Practice and Proc edure § 1493, at 462-63 (1971)). Trial by implied consent is not shown by the pre sent ation of evidence that is relevant to an unestablished issue when that evidence is also relevant to the established issue. Hiller v. Hailey , 915 S.W.2d 800, 805 (Tenn. App. 1995) (citations omitted). In this case, Powell made an oral motion to dismiss the suit on the ground that McLemore
was not seeking recovery on the note, but on the original contract, and that thi s was not8

encompassed

within his pleadings. In fact, Pow ell repeatedly pointed out to the trial court that McLemore and his co

unsel both

admitted t

hat the no te was no t a

note, but merely a record

of the transaction. The trial court reserved its ruling on Powell’s motion, however, the trial court never ruled on the motion and eventually rendered a v erdic t in this case without having done so. Nonetheless, Powell made known his objection to the trial of this issue. Addi tionally, t he evide

nce intr oduced a t trial on t he contr act for the purchase of c attle didnot fall outside the scope of t he issues raise d by the pleadings so as to constitute implied consent to the trial of a separate claim for breach of contract. The surr ounding c ircumsta

nces, including the evidence as to whether Nelson was acting as Powell’ s agent when he e ntered i nto the alleged contract, were releva nt to the issue of whether Nelson was acting as Powell’s agent when he executed the promissory note. Because the evide nce concerning the contract was relevant to the cla im on the pr

omissory n ote, it ca

nnot be sa id that a separate breach of contra ct claim wa s tried by

the implie d consen

t of the pa

rties. Under the principles above, we cannot say that the issue of the bre ach o f contract was tried by the impli ed conse nt of the p arties. T

he trial c ourt err

ed in failing to dismiss the suit and in rendering a judgment in favor of McLemore be cause a cause of action for a breach of contract
was neither contained in the complaint nor tried by the expr

ess or impl

ied conse nt of the p arties. All other issues are pretermitted. Accordingly, the judgment of the trial court is reversed, and the c ase is dism issed. Cost s of this appeal are taxed against the appellee
.

_________________________________ W. FRANK CRAWFORD, PRESIDING J

UDGE, W.S. CONCUR:

____________________________________ ALAN E. HIGH

ERS, JUDGE

____________________________________ DAVID R.FARMER,

JUDGE