### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE July 9, 2001 Sessi

on PAUL RAY SEATON, ET AL 

### . v. RICHARD ROWE, ET AL 

### . Appeal from the Chancery Court for Monroe County No. 12,385 John B. Hagler, Jr., Judge FILED AUGUST 29, 2001

No. E2000-02304-COA-R3-CV

This is an action for specific performance of an option agreem ent for the sale of some farmland acreage, from which a 60-acre tract was excepted. The trial court dismissed the action, holding that the option agreement did not satisfy the statute of frauds because the de scription of t he excepted property was inad equa te and that the deficiency could not be remedied by parol evidence. Thereaf t er, the plaintiffs filed a motion to “reopen the proof” to introduce evidence to support reformationof the descriptio n of the excepted property. The motion was denied. The plaintiffs appeal, arguing that the trial court erred in (1) finding that the option agreeme ntdid notsatisfy the statute of frauds; (2) refusing to consider parol evidence of the location of the excepted property; and (3) refusing to “reopen the proof” on the issue of reformation. The defendants argue that the appeal is frivolous. We find that

the option agre

ement is sufficie

ntly definite

to satisfy the statute of frauds andthat parol evidence should have been ad mitted to loc ate the excepted property. We therefore vacate the judgment of the trial court and remand for further p roceedings consistent with this opinion. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Vacated; Case Remanded

C HARLES D. S USANO , J R ., J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS and D. M ICHAEL S WINEY , JJ., joined.

William T. Alt, Chattanooga, Tennessee, for the appellants, Paul Ray Seaton and John Nolan Seaton.

John W. Cleveland, Sweetwater, Tennessee, for the appellees,

Richard Rowe, Individually and as Personal Represen tative of the Estate of Zola G. Howell, Faye Howell Jones, David Howell, F redrick Howell, Frankie Howell, Steven Howell, Roger Howell, Debbie Howell, James D. Parks, andBrian Jones.
OPINION1 Mr. Howell di ed in March, 1996; Ms. Howell died lat er, in October, 1997.

2 One of these exceptions was for a portion of the farm previ ously conveyed by the Howells to Red Ridge Company. This exception is not at issue in th e instant case. -2- I. Facts

On March 8, 1988, the plaintiffs, Paul Ray Seaton andJohn Nolan Seaton, entered into a tenyear option contract w

ith Carl R. Howell an

d his wife, Zola G

. Howell (collectively

“the optionors”), fo r the purchase of the Howells’ farm. The plaintiffs exercised their option on January 13, 1998, following the death of

both optionors. 1 The personal representative and heirs of Ms. Ho

well’s estate (collectively

“the defendant

s”) refused to se

ll the property

to the plaintiffs, a

nd this lawsuit ensued. In their answer, the defendants allege that the option is unen forceab le because it was unfairly or fraudulently procured.

The option agreement describes the Howells’ farm as two tracts, one consisting of 318 acres andanother consistin

g of 263.5 acre

s, located in the F

irst Civil Dist

rict of Monroe County. The mete s and bounds of these two tracts are accurately set for th in the option agreement and a re no t disputed. The option agreement provides, however, for two exception s 2 to these tracts. The exception pertine

nt to our discussion p

rovides as follows :
AL SO E XCEPTED from the above described property that portion of pro perty leased by Carl R. Howell and wif e, Zola G. Howel l t o DiversifiedSystems, I

nc., a Tennesse

e corporatio

n , which Lease Agreement

was entered into on July 11, 1985, and which has not been recorded as of the date of ex ecution o f this agreement, a copy of which is attached hereto as an exhibit, and it further being understood by and between the parties hereto that said Lease Agreement includes approximately

sixty (60) ac

res, more or less , all in accordance w ith the terms thereof.

The plaintiffs and Mr. Howell were shareholders of Diversified Systems, Inc., a corporation engaged in the business of solid waste disposal. The lease provides that the pro pert y w as to be used as a landfill. Although Diversified Systems paid rent under the lease until the lea

se was discontinue

d in 199 0, a lan dfi ll w as n ever ope rat ed o n th e pro pert y.
The referenced le

ase is at tached to the option agreement and is signed by the Howells as lessors and by the plaintiff Paul Ray Seaton as the president of D iversified S ystems. T he lease describes the le

ased property

as follows:

LY ING AND BEING i

n the First Civil Dist

rict of Monroe Co

unty , Tennessee, and

being more par

ticularly de

scribed as follow

s:3 In its memorandum opinion, the trial court r ejected the defendants’ argument that the opt

ion agreement was fraudulently pr ocured. T hat ruling is not a su bject of this ap peal.
-3- BEGINNING

at a stake at the s

outheast corner of the property

herein conveyed with property

of Frankie Howell, other lands of the grantors herein; thence westwardly with the line of other lands of the grantors herein, 2,664 feet to a stake at the sou t hwest corner of the property herein conveyed with Fridley and othe r lands of the grantors herein; thence northwardly

with Fridley

, 988 feet to a stak

e at the northwes

t corner of the prope rty he

rein conveyed with Fridley and Whited; thence eastwardly with Whited, 2,664 feet to a stake a t the northeast
corner of the property

herein convey

ed with Whit

ed and Frankie Howell; thence southwar dly with Fra

nkie Howell, 988 f

eet t o t he pointof beginning, containing approximately 60

acres, more or l

ess.
It appears that shortly before trial, the parties learned that the property de

scription in the lea

se agreement

exhibited to the option agreement is erroneous. The problem, as outlined by the trial court in its memorandum opi

nion, is as follows:

The description in the lease...do es n ot work and canno t be fixed so that the leased premises can be locat ed. In short, i t describes nothing; it does not close

except as a rectangle containing sixty acres without
a point of reference except the general grant. I f one uses the distances anddirections to describe a r ectangular tract from the beginning point, it describes a tract of a pproxima tely sixty acres running

eastwest. Pla intiffs assert that the actual leased sixty acres ran northsouth and are in a

nother part of the

farm.

As illustrated by an exhibit in the record, the metes and bounds descript ion does not touch the Fridley property, contrary to the a ssertion in the descriptio n that the subject r ectangle shar

es a com mon corn er t o Fri dle y’s p rop ert y.
At the trial , the defendants rais ed – for the first t

ime – the defense

of the statute of f

rauds, andthey arg

ued that parol evi

dence was inadmi

ssib le to locate the property. The plaintiffs maintained, on the other hand, that th e leased proper

ty could properly be located by pa rol evidence. Recognizing tha

t the parties had ju

st recently discovered the discrepancy and had not had

time to brief the legalissues involved, the trial court allowed the plaintiffs to introduce extrinsic evidence as to the location of the leased property and reserved ruling on the issue of the statute of frauds. Following the trial, the court below entered a memorandum opinion 3
, finding that the option
was “neither clear nor definite, nor complete,” in that the “failure to describe

in writing the exception to a gra nt i s ne cess ari ly a failure to describe clearly and definitely the grant itself.” The trial court found that the descripti

on contained in the

lease “does not w

ork except as a

rectan gle of precise-4-

measurements

containing approximately sixty acres[;] it could describe any number of tracts within the larger tract from which it is reserved.” The court decreed that the defect could not be remedied by parol evidence, and it dismissed the plaintiffs’ complaint. Thereafter, the plaintiffs filed a motion seeking “to reopen the proof” and to reform the description of the excepted property in the option agreement. The trial court denied this motion, and this appeal followed.

II. Standard of Review

In thi s non-jury c

ase, our review

is de novo upon the record of the proceedings below; howe ver, that rec ord comes to us with a presumption of correctness as to the trial court’s factual findings that we must honor “unless the preponderance of the evidenceis otherwise.” Tenn. R. App. P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn. 1993). The trial court’s conclusions of law are reviewed de novo wi th no such pre sumption. Campbell v. Florida Steel Corp., 919 S.W.2d 26, 35 (Tenn. 1996).

III. Discussion

We begin by addressing the fundamental issue in this case, i.e. , whether the trial court erred in holding that the option agreement failed to adequately describe the property at issue and that parol evi den ce wa s in adm iss ibl e to loc ate the exc ept ed p rop ert y.
In the seminal case of Dobson v. Litton, 45 Tenn. (5 Cold.) 616 (1868), the Supreme Court stated as follows:

Where an instrument is so dr awn th at, upon its face, it refers necessarily

to some existing tract of l

and, and its

terms can be applied to tha t on e tr act onl y, parol evidencemay be employed to show where the tract so ment ioned i s located. But where the description employed, is one that must necessarily apply with equal exactness to any one of an indefinite number of tracts, parol evidence is not admissible

to show thatthe parties intended to designate a particular tract by the description.
Id. at 620. In Dobson , the instrumen t a t issue described the property to be sold as “a certain tract of land, containing nine acres and sixty-six poles, near the junction of Broad Street, Nashville, and the Hil lsb oro Tur npi ke, Dav ids on C oun ty, Tennessee.” Id. at 617. The Supreme Court held that the instrument was insu

fficient to requi

re specific per

formance beca

use, “[w]ithout the a

id of parol proof it does not point out and identify the premises and is too vague and uncertain to be enforced.” Id. at 618, 619. The Court noted tha t had the property

been described

as “ my tract of nine acres and sixty-six poles, near the junction,” the description would have adequately designated a par ticular tract, and parol evidence would have been admissible to determ in e that tract’s boundaries and location. Id. at 619-20 (emphasis added). However, because the property was referred to only as “a tract,” the description failed to identify a particular tract of land, and, thus, parol eviden ce would-5-

be “inadmissible, because its effect is to supply by par ol, a material part of the agreement, which the statute of frauds requires to be wholly in writing.” Id.

The principles set for

th in Dobson have b een fo llowe d in nu merou s case s. In Dougherty v. Chesnutt, 86 Tenn. 1, 6, 5 S.W. 444, 445 (1887), the Supreme Court held that the description of the leasedproperty

only as the “Rose Hill” farm sufficiently identified the property

to satisfy the

statute of frauds. In so holding, the Court noted that the lease showed on its face that both the lessor and lessee lived in Hawkins County, “from which it may be reasona bly inferred that

the lands lay

in that county.” Id. Further, the Court noted that the farm was recognized and generally known by that name by many

people in the com mun ity. Id. at 6-7, 5 S.W. at 445. The Court thus found that the introduction of parol evidence was appropriate “to show where the property is,” id. at 7, 5 S.W. at 445, noting that the admission of parol evidence was “not to introduce any additional evidence as to the terms of the contract, but simply to ascertain if there be lands or property

known by the

name or description given in the writing, and where that property is.” Id. at 7, 5 S.W. at 445-46 (quoting Johnson v. Kellogg, 54 Tenn. (7 Heisk.) 262, 265 (1872)).

In Parsons v. Hall, 184 Tenn. 363, 365, 199 S.W.2d 99, 99 (1947), the pro pert y was described as “one house andlot in 13 district of Coffee County near Corporation line in Tullahoma, Beginningat a

fence post in the o

ld Winchester-Tullahoma Old Road, running southerly a distance of 100 feet running

back 205 feet. Co

ntaining seven r

oom house, garage wood house, etc.” The Court found the des

cription fatally

defective, as it

failed to identify

a particular tra

ct:

It is not clear what w

as meant by “

the old Winchester

-Tullahoma Old Road;” whether the prop

erty lay north, south, east o

r west of i t; or what was meant by the words, “running southerl y a di stance of 100 feet running back 205 feet.” The language used is “one house and lot,” not my house and lot. Obvio usly no ap t words were used to designate a pa

rticular house a

nd lot.
Id. at 367-68, 199 S.W.2d at 101 (emphasis in original). Because no particular tract was identified in the instrument, the Court rejected the introduction of parole evidence, holding “[p]arol evidence is admissible to ‘appl

y’ the desc

ription contained

in the written instr

ument, but such evid

ence is inadmissible to ‘supply’ a description omitted therefrom.” Id. at 368, 199 S.W.2d at 101.

In Branstetter v. Barnet

t, 521 S.W.2d 818, 819 (Tenn. Ct. Ap p. 19 74), the property was described as “120 acres loca

ted in 7th C.D. of Morgan County.” The Court found that the contract sufficiently

identified a par

ticular tract:
[T]he distinction lies in tho se cases where

the tract is an inde

finite
one (a tract) as opposed to a definite one (my tract). In the instan t case, in the option contract in qu estion , prior to the description the seller “covenants that he is the owner th ereof”. This is the same as-6- saying “my” 120 acres and parol eviden ce was a

dmissible to particularize the

description conta

ined in the option co

ntract.
Id. at 821.

In Gorbics v. Close, 722 S.W.2d 672, 673 (T enn. Ct. App. 1986), the property was described
as “a one acre tract of land on the northwest corner of my land.” Thi s Court found tha t the description failed to identify which part of the defendants’ land was to be sold:

In the present case, if t he description had read, “The one acre enclosedby a fence

in the northwest

corner of my land”; and if parol evidence had shown that the defenda nts owned only one tract of land, the description might havebeen valid. However, the writing contains nothin g which w ould locate the one acre within the land of defendants

or define its li

m its or shape, except the area of one acre andbeing at the northwest corner of defen dants’ land. “Nor thwest corner” is a general location, but does not specify which of numerous possible one acre tracts might be within the general location.
Id. at 675. Upon our review of the relevant auth ority, we fi nd and hold that the

trial court erre

d in determining that the option agreement in the instant case failed to adequately identify

the property t o be sold. The description of the property excepted from the option as “that portion o f propert y leasedby Carl R. Howell and wife, Zola G. Howell to Diversif ied Systems, I

nc.,...which L

ease Agreement

was entered into

on July 11, 1985,” is an identification of a particular

tract of land with

in th e Howells’ farm. This description could not “apply with equal exactness to any one of a n indefinite number of tracts,” see Dobson, 45 Tenn. at 620, as only one tract of land was subject to the July 11, 1985, lease between Diversified Systems and th

e Howells. Accordingly, we conclude that parol evidence is admissible “to show where the tract so mentioned is located.” See id.

We recognize that any parol evidence introduced re garding the

location of the pr

operty will contradict or vary the legal description of the property contained in the lease. Gener ally speaking, parol evidence that

contradicts, varies, or alters a complete, valid, and unambiguous written contract is not admissible. Harry J. Whelchel Co. v. Ripley Tractor Co., 900 S.W.2d 691, 692-93 (Tenn. Ct. App. 1995). However, parol evidence is admissible to vary, contradict, or a lter a written contract termif fraud, accident, or mistake is shown. McMillin v. Great Southern Corp., 63 Tenn. App. 732, 740, 480 S.W.2d 152, 155 (1972). It is undisputed that the legal description contained in the lease is unworkable; in the words of the trial court, “it des cribes nothi ng.” However, the Howells and DiversifiedSystems operated under this lease for fiv

e years. Although the land was never used for its intended purpose, Diversified Systems made the required rent

payments. Cle

arly, altho ugh their lease described “nothing,” the parties acted as if the le ase described “

something.” I

ndeed, it was not until years later, after the lease was discontinued, that the discrepa ncy in the legal description was-7-

discovered

and a question ar

ose as to which property was intended to be covered by the lease. Given these circum stance s, it is logical to conclude that the wording of the description was the result of
someaccident or mistake. That being the case, parol evidence is admissible to vary the lease so that it may accurately desc

ribe the subject property. Although we have determined that parol evidence is admissible to establish the location of the exc ept ed p rop ert y, we hasten to add that our decision in no way predetermines the outcome of this litigation. We dec

line to locate the p

roperty our

selves u pon the record before us, as we are mindful that the parties became aware of the problematic

description in the

lease only

shortly before trial and had little time to adequately prepare for the factual and legalissues that resulted from that dis cov ery. We thus remand this case in order to provide both sides an opportunity to present parol evidence regarding th

e location of the l

eased property

. If the cour

t below i s able to locate the exceptedproperty f

rom the evidence

presented, then

the court may

consider orderi

ng specific performance of

the option agre

ement, as well as a

ny other re

lief properly

sought by th

e parties.

IV. Frivolous Appeal

In view of our ruling in this case, it follows that the de fendants’ arg

ument that the plain

tiffs’ appeal is a frivo

lous one is without me

rit.

V. Conclusion

The judgment of the trial court is vacated. This case is remanded f or furthe r proceedings , consistent with this opinion. Costs on appeal ar e taxed to the appel

lees, Richard Row

e, Individual

ly andas Personal Representative of the Estate of Zola G. Howell, Fay e Howell Jones, Dav

id Howell, Fredrick Howell, Frankie Howell, Steve Howell, Roger Howel l, Debbie Howell, James D. Par ks, and Brian Jones.

_______________________________ CHARLES D. SUSANO, JR., JUDGE