*1 Shirley and Pamela K. SOLOMON

Sands, Plaintiffs-Appellees,

v. NATIONAL BANK

FIRST AMERICAN NASHVILLE, Defendant-Appellant.

OF Tennessee, Appeals

Court of Section,

Middle

at Nashville. 8,

March Appeal

Permission Denied

Supreme June Court

leged wrongful Bank, conduct of the con- sisting of: 1. fraud negligence 2. —misfeasance 3. intentional infliction of dis- emotional tress good accelerating 4. breach of faith debt duty 5. breach of to sell collateral commercially reasonable manner rescission outrageous conduct against plaintiff, bank counterclaimed Solomon, upon guaranty signed by her personal obligations and certain of Solomon Sands, independent Lingerie by Inc. loan.

The counterclaim of the Bank states: Defendant, Comes now the First Ameri- can National Bank of Nashville and as- sumes the role as Counter-Plaintiff and Shirley grounds sues Solomon on the as Further, stated below. First American Bank, National states that it it believes rights Sands, against has Pamela K. however, Pamela K. Sands has filed a provisions Petition for Relief under the Reese, Mary Ann Baydoun, Nador John 7, Chapter Title 11 of the United I.Harris, III, Nashville, plaintiffs-ap- for Bankruptcy States in the Code United pellees. Bankruptcy States Court for the Middle Bass, Jr., Sweeney, J.O. M. Milton Nash- Tennessee, pur- District of and therefore ville, defendant-appellant. suant to such action this Counter-Plain- stayed against tiff is proceeding from OPINION Pamela K. In Sands at this time. pending event action the Bank- TODD, Presiding Judge. ruptcy Court the Middle District of defendant, First American National dismissed, Tennessee is First American Nashville, appealed Bank of has from the National Bank of Nashville reserves its disposition sepa- of this case which includes right bring against an action said plaintiffs rate actions the two and coun- Pamela K. Sands. terclaims the defendant appellant The brief of states: plaintiff. against Plain- The Bank counterclaimed liability tiff Solomon 1. to enforce her on The Case her and also on other indebted- $40,000 controversy originated This in ness she owed to the bank. Sands, Lingerie by loan the Bank to bankruptcy 2. The on Plaintiff Sands Inc., guaranteed by which loan was stayed any against her. counterclaim plain- Small Business Administration. The guaranties bankruptcy tiffs executed to secure the No other reference to the corporation, bankruptcy justification loan. After Ms. Sands or for the rendition plaintiffs joined judgment in this action for al- of a in her favor if she was 5, that, testimony April on bankrupt is in the record or There is also fact a found 1984, her from a briefs. Solomon removed name son; that, 9, April with her on

joint account The Evidence 1984, in the credited said account the bank Lingerie by to the amount testimony September on There is Sands, Inc., This action was subse- Inc., debt. Sands, Lingerie by executed *3 pursuant to by the bank $40,000 by quently all reversed a note of secured defendant 25, 1984, per- and corporation, agreement April of the reached on of the assets an of guaranties plaintiffs delinquent and the pay sonal whereby plaintiffs would guar- The $40,000 Small Business Administration. note and the on the installments Sands, by of was secured anty plaintiff, limit and extend other debts bank would realty, guar- to certain and the trust deeds $10,- liability guaranty of Solomon the Solomon, plaintiff, by anty of was secured 000. $10,000 pledge depos- of a certificate of the that, May undisputed It is on or about it in the defendant bank. Inc., 11, 1984, by Sands, a Lingerie filed controversy original arose over the protection Chapter 11 of petition for under liability on her extent of the of Solomon Act, which the bank Bankruptcy the after issue, As is evi- guaranty. there payment of accelerated and demanded understanding a oral with bank dence an $40,000 note from the due on balance guaranty that the was limited employee guarantors, Sands and Solomon. $10,000 C.D.; that did pledged subsequently an- is that There evidence it; signing read the before not employee of demanded the other the bank employee subsequently acknowl- that $40,000 on note from entire balance due edged there had been an error and the that Solomon, or threatening to accelerate liability amount of the Solomon correct of Solomon’s debts to bank. “call” all $10,000. The record a letter .contains stating: employee signed by the bank 16, 1984, Bank accelerated May On guarantee This letter will also limit the payment of debts due and demanded all $10,000.00 for Ms. Solomon em- the Bank. A bank from Solomon to testimony in his that Solo- ployee admitted Solomon, undisputed plaintiff, is It be- personal debts were accelerated mon’s subsequently loans from defendant secured pay the entire refused cause Solomon by equity trust to her bank secured deeds $40,000 Lingerie on note amount due realty. parcels in various Sands, by Inc. in undisputed late 1988 It also Sands, Inc., experi- 1984, Lingerie by early by accelerated debts that, problems” enced “cash flow consisted of three notes: bank March, 1984, Corporation and bank 1, 1983, in the (1) A note dated June might pay only corporation agreed that the in- $20,000 monthly payable in amount of interest, delinquent install- delinquent 1, 1983, July secured beginning stallments deferred, and principal ments of would interest of Solomon of trust deed “working capital debt” due Febru- that a unite on Glenrose. in six residential 1984, ary be renewed. would 1983, 15, in the (2) note dated June A that, shortly after the testimony There is in- $25,000 monthly payable in amount March, 1984, demand- agreement, the bank 1983, 1, August beginning stallments $10,000 certificate replacement ed a same Glen- deed on the trust secured lost, allegedly deposit, had been which property. rose a assignment of evidence suitable $50,000 line (3) note” for A “master Sands, life of policy on the life insurance 9,1984, by deed March secured credit dated to “offset” threatened and that the bank property interest on Solomon’s of trust plaintiffs against personal deposits 26,1984, April Road. On on Battle they if did bank the amounts due the note with under this had been borrowed comply. monthly beginning 1, interest due June you 3. Do find that First American Na- tional Bank made representa- fraudulent tions, or intentional negligent misrep- The bank subsequently sold the assets of resentations, or otherwise Shirley misled Lingerie Sands, Inc., $548.50, which Solomon, agents, or her and that she has produced a net of payment $115.04after relied on such statements to her detri- expenses of sale. ment? 3, 1985, January On and January x Yes: No: _ began the bank proceed- foreclosure youDo find that First American Na- ings on the two trust deeds securing the tional Bank made representa- fraudulent guaranty. Sands produced The first sale tions, or negligent intentional or misrep- only superior $100.00 excess of a mort- resentations, or otherwise misled Pamela gage. There were no bidders at the other Sands and that she has on relied such sale, being there prior mortgage on the statements to her detriment? *4 property. x Yes: No: _ The bank advertised the Battle Road 5. youDo find that First American Na- property sale, for foreclosure but the sale tional Bank acted in bad faith with re- was aborted because Solomon demanded spect Shirley to by refusing Solomon to property that the in separate par- be sold discuss Shirley whether guar- Solomon’s Subsequent, cels. the property was sold to anty $10,000 was limited to origi- either prior enforce a mortgage, and the lien of nally by or the acts of First American thereby Bank was lost. Bank, National acting through its em- deposit certificate of of Ms. ployees, by or demanding Shirley Solomon by ap- was cashed the Bank and pay obligations once, Solomon off all at plied Lingerie Sands, Inc., on by note. or otherwise acted bad faith? x appear It does not any that there was Yes: No: _ effort to enforce the lien of the Bank you 6. Do find that First American Na- against property. the Glenrose commercially tional Bank was unreason- or able acted in bad faith or was reckless

The Findings Jury by disposing of collateral in the manner The Trial Court jury did, submitted to the 15 in which it or failed dispose to interrogatories which, together with the re- providing collateral after notice of intent sponses jury so, thereto are as follows: to do or failed to obtain a commercial- ly collateral, reasonable value for the or

1. you Do find that First American Na- give notice, failed to reasonable or other- Bank, tional acting by through its wise failed to act in commercially a rea- employees, negligent dealings in its regard sonable manner with to the meth- with Shirley by failing Solomon to act as od, manner, time, place and/or terms of would, reasonably prudent person or disposition any of the collateral or failing causing to use due care to avoid otherwise? injury borrowers, otherwise, to its or that these Bank actions were Yes: No: _ X causing injuries substantial factor in her you any 7. If have answered “Yes” to or loss? one interrogatories of or all of the num- 1, 2, 3, 5, 6, Yes: No: bered _ please or state the X necessary compensate amount that is to 2. you Do find American that First Na- Shirley damages Solomon any for actual tional Bank has caused severe emotional she has sustained. distress Shirley by acting to Solomon 161,000.00 so, acting with to intent do or with a $ disregard possibility reckless for you any 8. If have answered “Yes” to doing so, or otherwise caused her severe interrogatories one of or all of the num- emotional distress? 6, 4 please bered or state the amount _ necessary compensate Yes: No: that is Pamela x Hams- you has Do find Ms. Linda any damages actual she 15. Sands for First any representative other ley or sustained. fraudulently or American National Bank 42,000.00 $ represented negligently to Ms. Solomon you If determine that as a result 9. her the time nature of at Bank’s actions First American National Lingerie guaranteed loan to the S.B.A. Shirley punitive concerning Solomon 2, Sands, September Inc. closed on damages appropriate in this case are 1982. Bank, or First American punish National No: Yes: _ X doing Bank sim- deter the from ever a verdict The Trial Court directed again, example or to an ilar acts make judgment in therewith others, entered accordance puni- amount of the Bank what as follows: damages punish are sufficient tive First American National Bank? $20,- against Judgment for 1. Solomon 1.000,000.00 interest, ex- plus attorneys fees and $ 26, upon April note 1984. penses dated you If determine that as a result 10. American National Bank’s actions First $20,- Judgment against 2. punitive Pamela concerning Sands that interest, 000, attorneys expenses fees appropriate in case to damages are 1, dated 1983. upon note June Bank, American punish First National $25,- Judgment doing sim- deter the Bank from ever interest, attorneys expenses fees and example of again, or to an ilar acts make dated June upon note *5 others, puni- Bank to what amount of the Mas- Judgment against for 4. Solomon punish damages are sufficient to tive of account the amount $308.24. ter Card American Bank? First National of out- grounds suit on 5. Solomon’s 100,000.00 $ commercially of rageous conduct lack of American National Counterclaim First was reasonable sale dismissed. Bank except grounds on 6.Sands’ suit all you Shirley Do find to be 11. Solomon pu- of commercial reasonableness lack Adminis- obligated on the Small Business damages nitive was dismissed. $40,- Guaranty in amount of tration above, findings 000? jury, Pursuant to of No: b Yes: in favor _ judgment rendered x the Trial Court $1,161,000.00and in favor of Solomon in- your If answer counterclaim 12. to $242,000.00. of Sands then in what terrogatory yes, No. is Shirley find Solomon you amount to respect to each of the three Solomon In Bank? First National liable to American notes, judgment states: Principal $-0- $-0- Interest ORDERED, ADJUDGED Be it further Shirley Solo- you 13. Do also find that American Na- DECREED that First attor- pay reasonable mon is liable to its rea- is entitled to recover tional Bank by First ney expenses incurred attorney expenses fees and fees and sonable in connection respect American National Bank to said collection costs of with obligations? the collection of their with Note.

Yes: No: _ X specify the judgment The does not any find time after you 14.Do attorneys expenses or of fees amount on execution of Ms. Solomon’s not collection. It is therefore costs of 2, 1982, American September First right. Un appealable as of judgment final negligent- fraudulently or National Bank decided, are actions of issues til all ly represented to Ms. it subject remain to revision Trial Court $10,- $40,000 guaranty limited to right. T.R. appealable not as and are stage 000.? 3(a). At this Rule advanced A.P. ex- process, not deemed appellate it is No: _ Yes: X 3(a) pedient to enforce upon Rule which is Bank its counterclaim Ms. prejudice continuing waived without to response arguments Solomon. No to the power of the Trial any supporting appellant’s Court revise this issue is found its decisions if it should principal reply see fit to do so. or brief brief. Solomon concedes that she is indebted to

The Issues the Bank on a note dated June presented principal but insists that the entire issues the Bank in- due, having it volve: amount was been re- $13,895 May, 1984. duced 1. & 2. Failure to direct a verdict for the bank. Solomon also concedes an indebtedness

3. Submission of certain issues to the 15, 1983, note, on the June but asserts that jury. $20,264.90 had the balance been reduced to May jury. 5. & 6. Instructions to the

7. Excessiveness of the verdicts. noted, As heretofore amount col- expenses adjudged lection had not been on presented by plaintiffs Issues in- 26, 1984, notes April these two and the volve: reason, judgment, espe- note. For this 1. Direction of verdict on counter- them, cially open as to remains for revision claim. by the Trial Court. part 2. Direction of verdict as judgments against on plaintiffs’ claims. and, them, three notes are vacated as judgment is remanded for revision and Standard Review completion. verdict, partial either The direction argues Solomon also that none of these total, ruling upon is a law based according *6 lect, including foreclosure. Whether these (1907). 1088 “in is one of the issues notes were default” verdict, On motion for a directed in relating right to recover to Solomon’s appellate must take judges trial courts damages, be discussed her suit will strongest legitimate of the the view evi in that connection. opponent, in of the draw all dence favor in inference therefrom his fa reasonable Second Issue Plaintiffs’ vor, countervailing evidence and discard all (Direction dismissing part of of verdict any deny the motion if there is doubt claim) plaintiffs’ A from the whole evidence. verdict drawn Judge Trial recalled that the It will be only should be directed when reasonable as a against Solomon directed a verdict could one conclusion. minds draw but outrageous in conduct plaintiff respect to Tenn., Evans, v. 635 S.W.2d Sauls commercially of reasonable sale. and lack (1982). interrogatories 1 response In Likewise, prop the determination of above, Bank was jury the found that the question of jury instructions to the is a er causing inju- guilty negligent conduct of no of determined from the theories law to be not that the Bank was ry to Solomon and the evidence in the record and parties, the of emotional guilty of intentional infliction applicable the law thereto. complain of the do not distress. Plaintiffs respect. These jury of in this verdict First Issue Plaintiffs’ any complaint findings jury preclude by the of dismissal Solo- peremptory as to the that the Trial Court Plaintiffs first assert conduct, outrageous for such mon’s suit for directing in favor of the in a verdict erred judgment in thereby support ren- a favor of peremptory dismissal was dence holding commercially harmless. a dered Solomon unrea- Judge sale. The Trial correct sonable against As to the direction of a verdict directing in for the defendant on a verdict charge lack Solomon on her of of commer- in error in ground recovery, of and was sale, cially plaintiff the brief of reasonable submitting jury accept- the issue to the point fails to out wherein defendant ing response portion This of its thereto. commercially a not conducted sale 6) (No. jury set aside. verdict of the is any as Ms. Solo- property reasonable of above, pointed mon. Bank As out plaintiffs next insist that it was er- The deposit of “cashed" the certificate of Ms. against ror on her to direct a verdict Sands Solomon. It cause of action. will be remembered disposition Solomon insists that of against that a verdict was directed Sands Deposit was not commer- Certificate respect except for lack to her actions those cially the bank did not reasonable because In other of commercial reasonableness. sell certificate to an investor offer to words, directed Sands verdict was simply deposit ma- but withdrew before respect to her actions for: No turity at a discount evi- $640.00. 1. Fraud support finding is cited or found to dence Negligence 2. larger would real- that a amount have been infliction of emotional dis- Intentional ized of the certificate or other- sale tress wise. good accelerating 4. Breach of faith agreement, B pledge Exhibit to this debt opinion, provides: 5. Rescission hereby apply any is authorized Bank represented by or all funds said ... Cer- suggestion of only 1. The fraud Deposit payment tificate toward record the confusion as to whether entire is unpaid any representing note or notes $40,000. guaranteed maturi- balance above loans of debtor liability This had no relation to not).... (whether ty by acceleration or no Sands, has loss there- and she shown No merit found in the insistence from. dis- commercially

there was a unreasonable only negligence shown position deposit. the certifícate negligence defen- is technical record Next, the amount Solomon insists that failure of communications dant due promptly not credited to the realized was departments employees its and/or between debt the entire amount was credit- department its insisted whereby collections is cited or ed to the No evidence debt. $40,000 by upon payment of Ms. pro- misappropriation found as to *7 employee agreed had when another complaint The real ceeds of certificate. $10,000.00. only There she liable for was should have seems to be that the Bank injured showing that Ms. Sands was is no maturity cash the certifi- waited until to negli- if it by action were actionable this cate, early thereby penalty of to avoid the gence. Although might have withdrawal. sup- or 3. is cited found No evidence absence preferable procedure, been a dis- infliction of emotional port intentional evidence, in the record there is no basis conduct). (outrageous upon tress Ms. Sands disposition of the finding the manner of Moreover, unreasonable. certificate be support an 4. The evidence does realized, ergo dam- the difference to be good faith by for breach action Sands minimal. ages, this instance would be par- It accelerating is true that debt. agreements good faith certain ties made the Battle Road sale of The foreclosure payment regarding of time extension aborted, held. and never was property debt, agreements these corporate but Glen- sale of the is no a There evidence intervening bank- by the superseded no evi- were There is therefore property. rose ruptcy corporation of the which Moreover, authorized plaintiffs provided have no ev- the acceleration of corporate debt, ergo identiary citation support an affirmative the obligation guarantors. of the any answer to one of specific ques- the 13 tions included in interrogatory.

6. might There is sup- evidence which As to the port partial sale of the corpo- a assets rescission of the of the ration, guarantors ground Ms. have no Solomon to the extent of the excess complaint unless it $10,000.00. However, shown that over another there is no evi- form or manner of produc- sale would have any damage dence to show by Sands ed guarantor. exoneration of the Sedalia failure of the to effectively agree bank Mercantile Loges Inc., Bank v. Farms Mo. rescission, such or to show that Sands was App., (1987); 740 S.W.2d 188 Ferrous Fi- entitled to this relief. nancial Services Co. Wagnon, v. 70 Or. Accordingly, plaintiffs’ complaints as to App. 285, (1984). 689 P.2d 974 There is no partial directed verdict Sands showing that another form or manner of are found to be without merit. sale corporate of the property would have completes This plain- discussion of produced greater a return. tiffs’ issues. The uncontroverted evidence shows commercially that a reasonable sale was Issues Defendant held; that the property was recovered from stored; Defendant mini-warehouse where it asserts that the was Trial Court it transported should was to an have set auction house aside the verdict in favor held; where auctions were Sands for three that the sale reasons. publicised by newspaper advertise First, it is insisted that there is no basis circulars; ments and and that about 100 for finding No. 6 of jury that the defen- people present were of whom 65 reg were dant istered bidders. disappointing results 1. commercially unreasonable, or were any not attributable to lack of com 2. acted in bad faith or mercial reasonableness. 3. disposing was reckless in of collat- As realty, to the sale of the Uniform eral in did, the manner in which it or requirements Commercial Code of a com dispose 4. failed to of collateral after mercially applica reasonable sale have no providing so, notice of intent do or 47-9-102(1); tion. T.C.A. 47-9-104(j). §§ failed to commercially obtain a rea- argued It is personalty some of the collateral, sonable value for the or sold actually defendant was property give notice, failed to reasonable or Sands, complaint but as amended con- 7. otherwise failed to act in a commer- allegation tains no support which would cially regard reasonable manner with verdict in favor of Sands for conversion of to the personal property. her method, a. or Defendant next insists that there was no manner, or b. support material evidence to an award of time, c. or compensatory damage plaintiff, to the place, d. Sands. and/or disposition,

e. terms any of the or of only damages shown Sands is the collateral, loss foreclosure of her *8 equity two parcels realty by f. of otherwise foreclosure to enforce guaranty her obligation. There is no show- respect Judge With due the Trial this ing any of impropriety in either foreclosure proper is presentation not a issue for to a sale, therefore, any damage suffered jury yes-no interrog- for a answer. The Sands is not attributable to the Bank. atory being erroneous, response the there- support to is invalid and any Thirdly, ineffectual to defendant insists that no damages. verdict of grounds puni- are shown for the award of

943 opinion is as damages to to recover which attached Exhibit tive Sands. In order damages must damages, exemplary actual A. Insurance Co. Liberty Mutual

be shown. $40,- figures the It is to noted that be 178, Stevenson, Tenn. 368 212 S.W.2d v. blank, different typed 000.00are a are of (1963); Maxey Camping & 760 Cullom instrument, type body from and the Adams, Center, Tenn.App., 640 Inc. v. person. any are obvious to literate (1982); Melton, 20 22 Allen v. S.W.2d It is uncontroverted that Ms. Solomon (1937). 219 Tenn.App. 99 S.W.2d person, real was a literate business a estate of must set The favor Sands be verdict and a dealer in real estate. broker must her suit be dismissed. aside and fraud, party To must recover for a issue, By second defendant insists its upon par have acted in reliance the other in favor of Ms. Solomon judgment that the misrepresentations or failure dis ty’s dismissed set aside and her suit should be Develop close the facts. Southern States reasons. for three Robinson, Tenn.App., 494 ment Co. Inc. v. indicated, a jury As the returned above (1972), S.W.2d 777 Hamilton v. Galbraith Bank, against and in favor of the verdict (1932), Tenn.App. 158 37 Fraud 15 C.J.S. negligence and on the issues of 29, p. 269. § of intentional infliction emotional distress Generally, dealing equal a on conduct). party (outrageous There is no com- justified in findings rely with another is not plaint appeal which are terms on to these ing upon representations where the means final. treated as readily his knowledge of are within reach. remaining grounds As of to the Solo- p. 37 C.J.S. Fraud 34a § suit, plaintiff, the jury mon’s the found for Solomon, and the defendant on the having ability the Ordinarily, one (fraud), misrepresentation bad issues of opportunity to himself inform faith, commercially dis- unreasonable writing he executes it of a before contents position of collateral. showing avoid it not be allowed to will theory ignorant he of its contents that remaining of rescission was that was Solomon, it. v. pursued by is he failed read Evans Tillett Bros. evidently not Inc., Tenn.App., 545 S.W.2d 8 presumed to Co. have been abandoned. Const. above, (1976). not mention judgment, quoted does guaranty of liability on the Daughters In v. Domholz Home of note, complaint is corporate and no Mun.Ct., Hebrew, 19 N.Y. Aged Jacob for $10,- appeal. made of this on Since (1940), it held an oral 17 was S.2d guaranty obligation on the 000.00 admitted that a written instrument representation by cashing pledged has satisfied been from those which contained different terms deposit, appears it certificate in it not ac- actually contained were were guar- collect remainder of the effort to person to whom fraud since the tionable obligation (claimed by the bank and anty pre- representation made was Solomon) has abandoned. denied been writing and could to have read the sumed true, rescission, that being issue of This repre- relied on the oral said to have be is, of the excess liability the avoidance It also held its contents. sentation of 40,000 has, guaranty obligation over sign- read contract before failure to moot. practical purposes, become pre- should ing gross negligence it negligence guilty of such person the issues vent leaves for discussion

This writing contained setting up that the misrepresen- from rights upon based Solomon’s it to those she believed faith, commercially other than (fraud), terms bad tation contain. unreasonable sales. Larsen, 182 Va. fraud, In v. ground consideration Costello As that, if (1944), held it was S.E.2d given the form of

must so equal of information means Solomon, copy parties have photostatic signed by *9 944 prudence

that with ordinary either may First dealings American’s overall with rely upon they judgment, pre- his own are Sands and by Solomon as exhibited its sumed to have done so and no cause agents of employees, Hamsley and & for fraud action arises. Martin. Reed, Cal.App.2d 445, In v. Bland 261 This Court has previously held that mis- Cal.Rptr. (1968), that, it was held if representation guar- the of contents of the knowledge of equal

means are at hand and anty instrument was not actionable fraud. to ly parties, available both injured the misrepresentation Such might be a material party must show he has him availed circumstance to establish other actionable self of the means of existing information at conduct. the time of the transaction before he will The second element of bad faith al- say heard by to that he was deceived the leged to be the of acceleration the S.B.A. misrepresentations the party. of other guaranteed (the $40,000 note note of the In v. Haviland Southern Ed- corporation). California provides: The note Co., 601, (1916) ison 172 Cal. 158 P. 328 it immediately The indebtedness shall be- employee signing was held an a re- due payable, come or without notice possession lease in his could not avoid the demand, upon appointment of a re- by claiming release employer that the mis- liquidator, ceiver or voluntary whether or represented the or contents effect of the involuntary undersigned any for the or release. property, of its or upon the filing of petition or by undersigned Under the circumstances of this any the provisions under insol- State of cited, case the authorities this Court vency provisions law or under the any misrepresentation concludes that as to 1978, Bankruptcy as Act Reform agreement the contents amended,_ (Emphasis supplied). fraud, jury not actionable and the was justified finding. so It is the corporation uncontradicted that protection petition Chap- filed a under ground The next of recovery by found May 11, ter 11 the Bankruptcy Act on faith”, jury “bad described issue No. 5 as follows: that, you 16,

Do find that First American Na- It is on May uncontroverted 1984, notify- tional Bank acted in bad faith with re- the Bank wrote Ms. Solomon Shirley refusing spect petition Solomon ing bankruptcy of the her Shirley guar- corporation demanding payment discuss whether Solomon’s under $10,000, anty origi- was limited to either guaranty. guaran- On the basis nally acts First American ty signed by Ms. Solomon and the bank- Bank, acting through its em- National ruptcy petition corporation, the de- by demanding Shirley ployees, or letter justified. mand would have been obligations once, off at pay all However, two other factors intervene. acted in bad or otherwise faith? First, 16, 1984, at May the time of the Plaintiffs’ asserts that “bad brief letter, holding the Bank was of: faith” of the defendant consisted deposit. certificate of It was “cashed later representations Hamsley’s maturity, on December Sands before $9,445.90 corporate pertaining the limit Solo- and credited on the liability. mon’s note. guaranteed of the SBA

The acceleration 3,1983, prior Secondly, on October note. corporation and bankruptcy of the acceler- and Sands’ The acceleration Solomon’s note, ation of its a letter was addressed other loans. stationary of Bank Ms. on the Sands Hamsely B. as fol- concerning signed Linda First American’s actions lows: collateral. *10 wrong produced actionable is ployees the an agreed have to release certificate

We $10,000.00 question. in deposit of in the amount of another mortgage of a second deed consideration Plaintiff, Solomon, is insists that there a $20,000. in of equity of excess trust with authority is tort bad faith. No cited to of will also limit the This letter statement, none has been support this and $10,000 Ms. Solomon. A current for by this court. Research discloses found more than appraisal not twelve months an may or lack of it be good that faith the acceptable may for use. However old be recognized or circumstance of element required. letter opinion will be current contracts, torts, but it does or breaches of supplied). (Emphasis faith, of it good or the lack appear not that emphasized por- the unquestioned It is alone, is, standing an actionable tort. conveyed the letter to Ms. tion of was above, quoted asserts complaint, The There is no Solomon. evidence that the “arbitrarily capricious- Bank the of the letter remainder was ever activated. payment of demanded ly” accelerated and Bank had au- unquestionable While the obligations the Bank and Ms. Solomon’s note, thority corporate it accelerate wrongfully security for sale. advertised questionable is that the Bank had the au- only is evidence that reason There payment thority to demand of Ms. Solomon personal accelerating the debts of Solomon representative previously its had when liability of was her denial the entire liability $10,000 her in waived excess $40,000 corporate debt. deposit in held a certificate of bank that, may reasonably argued where It be $10,000 liability. to secure the amount powers grants discretionary a contract ground by next faith cited The of bad agreement party, implied one there is an her personal is the acceleration of powers reasonably exer- such be will It is not that Ms. Solo- loans. controverted cised. personal May on mon’s loans were current 16, 1984, the Bank when accelerated allegations complaint of the The threatened to enforce corporate note and are suffi and the evidence in record The asserts that personal loans. Bank support an action for breach cient “calling” in the loans be- justified it was implied to exercise with contract failure bankruptcy, corporate the re- cause of the discretionary in bounds reasonable note Ms. sultant acceleration its See powers by the contract. conferred it under her satisfy failure to Solomon’s these limita Within T.C.A. 47-1-203. § guaranty. tions, Ms. suit portion Solomon’s rights legal of the Bank to subject styled may Whatever not be the “bad faith” Solomon, $40,000from Ms. there collect the verdict. a directed in com- “good faith” was some lack remaining ground of Solomon’s suit The employees of the bank action of the bined “commercially sale”. unreasonable Ms. employee of the Bank wrote when one commercial reasonableness liability only her Solomon that deposit has cashing of certificate of deposit) (secured certificate already been discussed. subsequently tried to employee the other $30,000from Ms. Sol- com- remaining argues that there was a collect the estate, together other indebtedness sale of real mercially omon with unreasonable “off- foreclosure and sale yet fails to state what argument due threats her but deposit. in setting” personal commercially unreasonable where may found. details the record the lack of communica- Unquestionably, the merely argument states: employees keeping by the tion and record clearly present case The evidence embarrassing bank resulted an American failed that First established relations of regrettable episode in the faith, good of the real estate dispose one of its customers. the Bank with con- statutory and with the em- accordance the bank misfeasance of Whether the above, As stated no sale of requirements or in accordance with Solomon’s tract shown, realty is hence there was no occa- the deeds of trust. *11 charging sion for on this issue. stated, record does not previously As The Bank’s sixth issue is as follows: by or a sale of Solomon’s real estate show erred, Bank. It does show that in in- on behalf Whether the Chancellor advertised property structing jury, by applying the Battle Road Uniform sale, requirements the sale was Commercial to the for foreclosure but that Code property. of real held because demanded foreclosure sale If parts in and not as a whole. the sale be respect In suits before this two sale at fore- has no seizure or there been Court, default accel- the issue was not but right closure, of a it is difficult to conceive petition bankruptcy eration. The admitted to hold a sale that is of action for failure corporation grounds for acceler- of the comply or fails to commercially reasonable enforcing guaran- purposes ation for require- any statutory or contractual with securing corporate ties loan. ments. the Bank relates to the The final issue of issue, summary Bank’s second In of the imma- of the award which is excessiveness support finds no evidence this Court terial, being is set aside for since the award except the action of the for Solomon verdict different reasons. accelerating demanding pay- and in Bank obligations personal be-

ment of Solomon’s Summary fpr liability the full cause of her denial in fa- judgment The directed verdict and $40,000 corporate of the debt. amount against plaintiff, and Solo- vor of the Bank rulings upon the Bank’s previous The 26,1984, mon, April June upon notes dated largely dispose and second issues will first 15, 1983, 1, 1983, and and June is vacated example, the remaining issues. For of the and for further consideration remanded third issue is: Bank’s proper determination of: in erred sub- Whether Chancellor A. Solomon Notes liability mitting jury theories of to the due on said notes were Whether from the case that had been eliminated counterclaim, September of the the date of the by directed verdict at the close 14, 1984. plaintiff’s evidence. and principal balance 2. The correct on said notes. interest due heretofore, Judge the Trial As discussed attorneys fees 3. The amount submitting Jury all of the err in to the did expenses. other allowable except the acceleration issues unreasonable Bank on said personal debts. The amount due the of Solomon’s filing of notes, of the any, if at the time is as follows: The Bank’s fourth issue the counterclaim. in- in the Chancellor erred Whether account. Master Card B. Solomon collateral structing jury that a sale of in or found error is asserted No gives rise than the secured debt for less item is judgment, but this portion of the commercially un- presumption of a in for inclusion and remanded vacated sale. reasonable by the Trial ultimated judgment heretofore, no there was As discussed Court. jury any issue to submit to the occasion is in favor of Sands judgment The C. commercial reasonableness. as reversed; is entered a directed verdict thereof; follows: suit of fifth issue is as and the aspects The Banks’ to all is dismissed. Sands erred, in- the Chancellor Whether of Solomon favor judgment D. The applying Uniform structing jury, by is entered A directed verdict reversed. to the requirements Code Commercial as to is dismissed the Solomon suit property. of real foreclosure sale equal- appeal are taxed alleged of this except for the costs aspects all its is, appellate costs are taxed ly. That personal acceleration unreasonable Bank, Sands one third to third to one As to the Bank. obligations of Solomon cause is one third to Solomon. suit, aspect of the Solomon to this Trial for further to the Court remanded for a trial is remanded new cause proceedings. unreasonable whether determination and, so, as- occurred if acceleration part, re- part, vacated Reversed proper damages of such as are sessment manded. resulted proven proximately to have J., KOCH, concur. CANTRELL therefrom. *14 ORDER plaintiffs, Shirley Solomon and Sands,

Pamela K. separate have filed peti-

tions to rehear which are found to be with-

out merit and are denied. CHRIST, INC.,

CHURCH OF IN GOD Memphis, Tennessee,

Plaintiff-Appellant,

MIDDLE CITY CHURCH OF GOD IN

CHRIST, Dyersburg, Tennessee, Ned

Bernard, Betty Taylor, Perry K. Lee

Middlebrook, Jr., Mrs. Eddie Lee Dorothy

Williams and Mrs. Ruth Mid

dlebrook, Individually and as Trustees City of the Middle Church of God

Christ, Tennessee, Dyersburg, New Je Temple, Inc.,

rusalem and New Jerusa Christ, Dyers

lem Church of God Tennessee;

burg, New Jerusalem Tem

ple, Inc., Dyersburg, Tennessee,

New Jerusalem Church God in Blair, Jr., Wade, Sam B. Allan J. Heis- Christ, Tennessee, Dyersburg, Defen kell, Donelson, Bearman, Adams, Williams *15 dants-Appellees. Kirsch, Memphis, & plaintiff-appellant. Defendants-appellees no filed brief and Tennessee, Appeals

Court of argument. Section, Western at Jackson. McLEMORE, Special Judge. March This is a conveyanc- suit set aside two Appeal

Permission to Denied es property Dyer County. real Supreme Court Christ, (COGIC) Church of inGod Inc. filed July Chancery suit in Dyer County Court of City Middle Church of God (Middle City), City’s Christ Middle trustees individually, Temple, and New Jerusalem (Temple). Inc. City The Middle trustees allegedly property held certain real under warranty deed in trust for COGIC. City prop- Middle trustees transferred the erty by warranty Temple. deed to COGIC maintains the trustees transferred the property in provisions violation of trust im- notes “in default” to its or lack of neces uncontroverted evidence right terms and that the Bank had no sary requires entry judg evidence which maturity “call” or accelerate the moving party. ment for the Norman v. notes, attempts to thereby justify col- Co., 401, 104 119 Tenn. Ry. Southern S.W.