First National Bank of Lenoir City v. Ivie , 41 Tenn. App. 187 ( 1955 )

On Petition to Rehear

HOWARD, J.

The complainants have filed a petition to rehear in which they respectfully aver that “If we consider the matter from the angle that Dannel was supposed to hold the notes, collect them and then remit the proceeds— we come up with this: It required the $750.00 check and 11 of the notes to pay the agreed claims. That is to say, the 11th note was due August 5, 1952, or some 13 months after the agreement was signed. Surely the Ivies did not expect Dannel to wait longer than that for them to contact Rivers, if it was their sincere intention or desire of doing so.”

Apparently the complainants have overlooked the fact that Judge Dannel was also acting, under the agreement, as a Trustee in collecting the notes, and disbursing to the respective designated creditors' the funds collected, and he was under a duty not only to exercise “good faith, with due diligence, ’ ’ but likewise not to act contrary to the authority conferred upon him by the written agreement. Knox County v. Fourth & First Nat. Bank, 181 Tenn. 569, 182 S. W. (2d) 980; Falls v. Carruthers, 20 Tenn. App. 681, 103 S. W. (2d) 605.

As previously pointed out, Judge Dannel did not wait 13 months after the agreement was signed to dispose of the notes and pay the Rivers’ claim in full, but waited only three months, despite the fact that the last note did not mature for 24 months, and under these circumstances the argument that the Ivies had, by their conduct, abandoned the idea of getting a reduction on the claim, is without merit.

On remand we are of the opinion that the burden of proving the amount of the Rivers’ claim is upon the complainants, since the Ivies in their depositions have denied owing Rivers any amount in excess of the $1,734.47 which they authorized Judge Dannel to pay.

While we realize that our opinion in this case may work a hardship upon some of the parties concerned, we likewise realize that good conscience and basic principles of equity must be applied.

Petition to rehear will be denied.

McAmis, P. J. and Hale, J., concur.