text:
    BANK OF COMMERCE, a Tennessee Banking Corp., with offices and principal place of business in Morristown, Hamblen County, Tennessee, Appellant, v. Jayne Ann WOODS, Commissioner of Revenue, State of Tennessee, Nashville, Tennessee, Appellee.
    Supreme Court of Tennessee.
    Aug. 13, 1979.

      H. Scott Reams, Taylor, Tilson, Inman & Reams, Morristown, for appellant.
    William M. Leech, Jr., Atty. Gen., Jim G. Creecy, Asst. Atty. Gen., Nashville, for ap-pellee.
   OPINION

FONES, Justice.

In a suit by plaintiff, Bank of Commerce, to recover sales taxes paid under protest, the trial court granted the Commissioner’s motion for summary judgment. The sales taxes were incurred by the owners of a food store. The Bank held a security interest in the inventory, furniture, fixtures and equipment, and after default, the owner-debtor transferred the secured property to the Bank. The Bank operated the food store as a going business for a short time and then sold it to a third party.

The issue is whether the Bank was a successor of, and liable for the sales taxes owed by, delinquent taxpayers who sold or quit a business, within the purview of T.C.A. § 67-3025.

The Bank’s principal defense is that it provided no cash “purchase money,” as that term is used in the statute, to the taxpayers and thus was not in a position to protect the State’s interest because it had no fund from which to withhold the delinquent sales tax. Our analysis of the relevant case law from other jurisdictions, including cases relied upon by the Bank of Commerce, persuades us that the Bank should be held liable for its transferor’s sales tax, and we affirm the judgment of the trial court.

The facts of the case are undisputed. Prior to June 1976 the Bank of Commerce made a secured loan of $50,000 to Tucker Enterprises in order to finance the operation of a convenience food store in Morris-town. In June of 1976 Tucker Enterprises sold the store to Clifford and Pelle Stepp, who assumed the indebtedness to the Bank, then in the amount of $44,627.59, as part of the purchase agreement. Between June 1976 and February 1977 the Stepps became delinquent in their payments on the note, and in February 1977 the parties restructured the note to include and bring to a current status the principal and interest, a total of $49,200. At all times the Bank of Commerce had a perfected security interest in all inventory, furniture, equipment and fixtures in the Stepps’ store.

The Stepps again fell behind on their payments, and when they failed to bring their note to current status by June 1977 the Stepps agreed to transfer their entire interest in the business to the Bank of Commerce in consideration of a settlement of the $49,200 note. The Bank of Commerce contends that it desired to avoid a foreclosure because of the possible harm to the Stepps’ credit record, as well as the adverse effect on the store itself. According to the deposition of C. G. Williams, president of the Bank of Commerce, the Bank appreciated the business advantages in avoiding a foreclosure:

“Well, at that particular time, the new convenience store had just opened across the street and this business is located right beside a Holiday Inn, and right at an entranceway to a large subdivision. And we felt that had we closed that business down, that with the neighborhood business they had acquired and had a following from, would immediately shift across the street to the new store. It was tough enough to lose or have the possibility of losing a share of the business anyway as a going concern. But if we closed the doors and they remained closed for some period of time during foreclosure proceedings, we felt we would have serious difficulties getting that business back.
More than that, though, is probably the fear of the drastic reduced value of that inventory during the period it would be closed.”

Thus, the Stepps executed a “bill of sale” as “sellers” to the Bank of Commerce as “buyer,” and the Bank proceeded to find a new owner for the store. On July 1, 1977, the Bank transferred its interest in the store to the present owner, Leonard Dryer, who agreed to assume the outstanding balance on the Stepps’ note. A notice of the state tax lien was recorded in the Registrar’s Office of Hamblen County against Clifford and Pelle Stepp on September 16, 1977. The Commissioner of Revenue made a final demand for payment on the Bank of Commerce pursuant to the successor liability provisions of T.C.A. § 67-3025, and on December 21, 1977, the Bank paid $3,634.41 to the Department of Revenue under protest.

The Bank of Commerce filed this lawsuit in January 1978 for a refund plus interest, and after both parties moved for summary judgment based upon the pleadings, the deposition of the president of the Bank of Commerce and supporting briefs, the trial court granted judgment for defendant and ruled that the Bank of Commerce was not entitled to a refund since it was liable under T.C.A. § 67-3025 for the sales tax owed by the Stepps.

T.C.A. § 67-3025 provides as follows: “67-3025. Settlement of tax on quitting business — Collection of tax from debtor or dealer. — (a) If any dealer liable for any tax, interest or penalty levied hereunder shall sell out his business or stock of goods, or shall quit the business, he shall make a final return and payment within fifteen (15) days after the date of selling or quitting the business. His successor, successors, or assigns, if any, shall withhold sufficient of the purchase money to cover the amount of such taxes, interest, and penalties due and unpaid until such former owner shall produce a receipt from the commissioner showing that they have been paid, or a certificate stating that no taxes, interest, or penalties are due. If the purchaser of a business or stock of goods shall fail to withhold the purchase money as above provided, he shall be personally liable for the payment of the taxes, interest, and penalties accruing and unpaid on account of the operation of the business by any former owner, owners, or assigns.
(b) In the event any dealer is delinquent in the payment of the tax herein provided for the commissioner may give notice of the amount of such delinquency by registered mail to all persons having in their possession or under their control any credits or other personal property belonging to such dealer, or owing any debts to such dealer at the time of receipt by them of such notice, and thereafter any person so notified shall neither transfer nor make any other disposition of such credits, other personal property, or debts, until the commissioner shall have consented to a transfer or disposition, or until thirty (30) days shall have elapsed from and after the receipt of such notice. All persons so notified must, within five (5) days after receipt of such notice, advise the commissioner of any and all such credits, other personal property, or debts, in their possession, under their control, or owing by them, as the case may be.
(c) Any violation of the provisions of this section shall be a misdemeanor and punishable as such. [Acts 1947, ch. 3, § 7; C.Supp. 1950, § 1248.63 (Williams, § 1328.29).]”

Although there are no decisions construing this statute in Tennessee, cases from other jurisdictions with similar statutes have discussed the purpose behind successor liability statutes. It generally has been recognized that the purpose of such statutes is to insure the collectibility of sales taxes due the state by imposing liability upon the purchasing corporation, which is in a financially better position to collect the tax ordinarily than the vendor corporation, which is quitting the business. The clear intention of statutes such as T.C.A. § 67-3025(a) is to provide that the “tax debt . . . follow the business, its assets or any portion of them” Tri-Financial Corp. v. Department of Revenue, 6 Wash. App. 637, 641, 495 P.2d 690, 692 (Ct.App. 1972); see also Annot.: Validity and Construction Of State Statute Making Successor Corporation Liable For Taxes Of Predecessor, 65 A.L.R.3d 1181, 1184-87 (1975).

The Bank of Commerce contends that the statute imposes liability upon a transferee only if it fails to “withhold sufficient of the purchase money to cover the amount of such [unpaid] taxes . . . Because it did not provide any money to the Stepps in connection with its purchase of the store, the Bank argues that it was not required to “withhold” the amount of the unpaid taxes. The Bank characterized the June 1977 transaction as the “satisfaction of a security interest which was accomplished without the necessity of a lawsuit.” To allow the Commissioner of Revenue to collect a tax from the Bank under such circumstances, the Bank argues, would encourage unnecessary litigation and result in a “windfall” to the Commissioner of Revenue.

We disagree with the position taken by the Bank of Commerce and find that cases from other jurisdictions that have considered similar issues have broadly construed successor liability statutes in order not to jeopardize the interest of the public in insuring the collectibility of taxes. See, e. g., People ex rel. Salisbury Axle Co. v. Lynch, 269 N.Y. 228, 181 N.E. 460 (1932); Sterling Title Co. v. Commissioner of Revenue, 85 N.M. 279, 511 P.2d 765 (Ct.App. 1973); Tri-Financial Corp. v. Department of Revenue, supra; see generally Annot., supra.

In Knudsen Dairy Products Co. v. State Bd. of Equalization, 12 Cal.App.3d 47, 90 Cal.Rptr. 533 (1970), a supermarket corporation became heavily indebted to a dairy products company and transferred all of its operating assets to a wholly-owned subsidiary of the dairy products corporation in exchange for the subsidiary’s issuance of a promissory note for the value of the assets to the parent company, which agreed to cancel a portion of the supermarket corporation’s debt. The court held the subsidiary corporation liable under a statute that required a “successor or assigns” of a delinquent taxpayer to withhold the amount of such taxes from the “purchase price.” The subsidiary corporation argued that it was not a “purchaser” of the supermarket corporation’s assets, which the court found was intended by the legislature even though the statute referred to successors and assigns, because the purchase price was received by a third party, the dairy products corporation. The Knudson court rejected this argument, reasoning:

“In a purchase and sale, the purchase price need not necessarily flow directly to the seller. The fact that the purchase price here went to a third party, to wit, Creamery, does not militate against the finding that Dairy was a ‘purchaser.’ To hold otherwise would permit a taxpayer to avoid liability by the simple device of having the purchase price paid through an intermediary.
Furthermore, it is clear that in the circumstances of present day business practice it would be illogical to hold that a ‘purchase price’ must take the form of cash or tangible property. Most, if not all, purchases of any size and substance in today’s economic world involve a promissory note for at least some part of the purchase price.
We agree with plaintiffs that the successor liability cannot be imposed when the duty to withhold, as here defined, under section 6811 cannot possibly be performed by the successor.
However, as we interpret it, the term ‘withhold’ as used in the statute does not necessarily mean having physical assets in hand but simply means dealing with the purchase consideration in such a manner as to deny to the seller the benefit of the purchase consideration and to thereby make a portion of it available for the satisfaction of the tax liability.” 12 Cal. App.3d at 54-55, 90 Cal.Rptr. at 538-39. Our successor liability statute broadly im-

poses a duty on a “successor, successors, or assigns” of a taxpayer who sells out or quits his business. The use of the words “purchase money” cannot be construed as a limitation on this duty, but is merely a descriptive term of the action to be taken by the person or business entity on whom the duty has been imposed.

In State v. Sloan, 164 Ohio St. 579, 584, 132 N.E.2d 460, 464 (1956), the Ohio Supreme Court upheld a similar statute which was challenged because of the absence of notice, and said:

“It was their duty to discover whether such taxes were due at the time they purchased the business, and, if they had complied with the statutory requirements which they are presumed to know, they would have been completely aware of the tax situation in regard to the business which they were purchasing.”

Accord, Richards v. Blackmon, 233 Ga. 739, 213 S.E.2d 638 (1975). It would have been a simple procedure for the Bank to require a certificate from the Department of Revenue that the Stepps had paid sales taxes due the State in connection with its purchase of the assets. It would have been one more factor to weigh in the decision whether to foreclose on their security interest or continue the business. The public interest in the efficient collectibility of State revenue cannot be jeopardized on account of private business decisions. When the Bank decided to purchase the store instead of foreclosing on the loan, it took the risk that it would be liable for unpaid sales taxes.

The Bank of Commerce contends that it actually was foreclosing on its security interest rather than purchasing the assets of the store, despite the execution of a purchase and sale agreement. We find that the evidence does not support this proposition because it is obvious from the desposition of the Bank’s president that it was the intention of the parties that foreclosure be avoided.

The Bank relies on State v. Standard Oil Co., 39 Ohio St.2d 41, 313 N.E.2d 838 (1974). Standard terminated the gasoline service station lease of Donald Bleim for breach of the terms of the léase. Standard owned a large portion of the equipment located on the premises and had a UCC security interest in the inventory, equipment and accounts receivable belonging to Bleim, to secure any indebtedness due it by Bleim. In terminating the business relationship between them, Bleim transferred and conveyed to Standard certain inventory and merchandise listed on a schedule showing the amount of credit allowed for each item. Bleim also executed a bulk sales affidavit at Standard’s request. The State of Ohio sought to collect Bleim’s delinquent sales taxes from Standard pursuant to its successor liability statute, relying principally upon the execution of the bulk sales affidavit as converting a foreclosure into a sale. The Supreme Court of Ohio held that in consideration of the totality of the business dealings and contractual relationship between the parties, the execution of the bulk sales affidavit, which characterized the transaction as a purchase, did not have the effect of converting a foreclosure into a sale. In short, the Court held that substance would prevail over form.

There are obvious distinctions between the totality of the business and contractual relationships of Standard and Bleim and those existing between the Bank and the Stepps, as in the documents that evidenced the two transactions. But, conceding that State v. Standard Oil Co., supra, supports the Bank’s position, we think it represents the minority view of those jurisdictions that have considered the issue of successor liability in similar context and we are not disposed to follow that Court. In the field of taxation the dichotomy of form and substance is not applied with the same force as in other areas of the law, and the form is often treated as the substance of the transaction.

Unlike the Standard Oil case, however, the substance of the transaction in this case was not an enforcement of the Bank’s rights under the security agreement. The deposition of the Bank’s president unequivocally reveals its actual intentions in structuring the transaction as it did. The Bank desired to protect its investment and avoid a foreclosure, by purchasing the food store so that it could be operated without interruption as a going business. The Stepps sold their equity in satisfaction of the debt and quit the business. The Bank as buyer became their successor and liable for the sales tax. The fact that the Bank’s objective was to be a short-term owner and in turn to sell the going business to a third party did not alter their successor status under the statute.

The judgment of the trial court is affirmed. Costs are adjudged against appellant, Bank of Commerce.

BROCK, C. J., and COOPER, HENRY and HARBISON, JJ., concur.


source: Caselaw Access Project

author: BROCK, Chief Justice.

license: Public Domain

text:
    ROYAL INDEMNITY COMPANY, INC., Appellant, v. George T. FUTTRELL, Appellee.
    Supreme Court of Tennessee.
    Aug. 20, 1979.
    Robert R. Campbell, Knoxville, for appellant; Hodges, Doughty & Carson, Knoxville, of counsel.
    H. Calvin Walter, Knoxville, for appellee; Walter, Gilbertson & Assoc., Knoxville, of counsel.
   OPINION

BROCK, Chief Justice.

This is a workmen’s compensation case.

The plaintiff was employed for many years as a coal miner by the Cumberland Coal Company who insured its liability under the Workmen’s Compensation Act with the appellant, Royal Indemnity Company, Inc. In 1972 plaintiff became disabled to continue said employment and brought an action under the workmen’s compensation law in the Chancery Court for Knox County seeking benefits for permanent total disability by reason of coal miner’s pneumoco-niosis and at that time, May 27, 1974, the Chancellor adjudicated his disability at 75% permanent partial disability to the body as a whole due to coal miner’s pneumoconiosis and awarded benefits accordingly. In May, 1978, the plaintiff, conceiving that his disability by reason of the pneumoconiosis had increased to permanent total disability, filed a petition pursuant to T.C.A., § 50-1025, alleging that his disability had increased from 75% to 100% permanent disability and praying that his benefits be increased accordingly. The defendant denied that any increase in disability had occurred. The Chancellor conducted an evi-dentiary hearing and concluded that the employee’s disability due to coal miner’s pneumoconiosis had increased since the pri- or decree from 75% permanent disability to 100% permanent disability and rendered a decree accordingly. From that decree, the defendant has appealed to this Court asserting that (a) the evidence does not support the findings of the Chancellor and (b) that the Chancellor erred in computing the benefits payable under the Workmen’s Compensation Act by applying the workmen’s compensation rate in force at the time of the second hearing rather than the rate which was in force at the time of the injury and which was used in the decree following the first hearing.

I

It is elementary that our sole function with respect to the first issue is to determine whether there is any material evidence in the record to support the finding of the Chancellor that the employee’s disability due solely to the coal miner’s pneumoconiosis had increased from 75% permanent disability to total permanent disability.

We conclude that there is such evidence consisting of testimony of the employee that since the first decree was entered he has suffered from blackout spells when he suffered spasms of coughing, that his coughing is now worse and more intense than it was at the time the first decree was entered, and the testimony of the thoracic surgeon that the x-ray evidence of the condition of the employee’s lungs indicates that his condition now is more extensive and more acute than it was when the first decree was entered. These differences in the employee’s condition were sufficient to convince the Chancellor who saw the employee at the time of the first hearing as well as at the time of the second hearing, that the employee’s disability has increased from 75% permanent disability to 100% permanent disability.

There is no merit in the argument of the defendant that simply because the thoracic surgeon, Dr. Swann, gave opinion testimony at both the original hearing and at the hearing upon the petition for an increase in the award that the employee was permanently and totally disabled by reason of coal miner’s pneumoconiosis; the Chancellor was entitled to conclude from all of the evidence introduced at the second hearing, including that above mentioned, that the employee’s disability had increased since the entry of the first decree from 75% permanent disability to 100% permanent disability. Cf. Dingus v. Holston Defense Corp., 211 Tenn. 20, 362 S.W.2d 249 (1962).

II

In support of the Chancellor’s action in applying the compensation rate currently in force at the time of the second hearing rather than that in force at the time the plaintiff became incapacitated for work and which was applied by the Chancellor at the first hearing, the plaintiff asserts that the Chancellor was following the directive of 30 U.S.C. § 922 as he was required to do under T.C.A., § 50-1105. That Federal statutory provision is as follows:

“922. Payment of Benefits — Schedules
(a) Subject to provisions of subsection (b) of this section, benefit payments shall be made by the Secretary under this part as follows:
(1) In the case of total disability of a miner due to pneumoconiosis, the disabled miner shall be paid benefits during the disability at a rate equal to 50 per centum of the minimum monthly payment to which a Federal employee in grade GS-2, who is totally disabled, is entitled at the time of payment under Chapter 81 of Title 5.” (Emphasis added.)

It is our opinion, however, that a determination of the rate of compensation to be paid under the Workmen’s Compensation Act must be governed, not by the Federal statute, but by the Workmen’s Compensation Act of Tennessee and the decisions of this Court construing it. We do not agree with the plaintiff’s argument that T.C.A., § 50-1105, adopts the schedule of benefits provided by the Federal Coal Mine Health and Safety Act of 1969. In pertinent part, § 50-1105, provides:

“An employee totally disabled due to a coal worker’s pneumoconiosis shall be paid benefits during disability as provided for by this law. If an employee has one or more dependents the payments shall be increased fifty per cent (50%) of such payment for the first dependent, seventy-five per cent (75%) for two (2) dependents, and one hundred per cent (100%) for three (3) or more dependents. In case of death of an employee due to coal worker’s pneumoconiosis, or of an employee receiving benefits under this law, benefits shall be paid to his widow and any dependents in the same manner provided for in this section. Benefits paid under this paragraph shall not be subject to the maximum compensation limitations set forth in § 50-1005, subsections (a), (c), (d) and (e) of § 50-1007, §§ 50-1008, 50-1010, 50-1011, subsection (c)(ll) of § 50-1013, or any other sections of the Workmen’s Compensation Law, but the maximum compensation limitations shall be controlled exclusively by the maximum compensation benefits and limitations established under the Federal Coal Mine Health and Safety Act of 1969 (U.S.C., tit. 30, §§ 801-960) as applicable to employees suffering from coal workers pneumoconiosis. However, the minimum compensation limitations for employees suffering from coal workers pneumoconi-osis shall be no less than those set forth in subsection (d) of § 50-1007 for employees permanently and totally disabled by reason of injury.” (Emphasis added.)

We hold that this statutory provision incorporates only the maximum limits of compensation contained in the Federal Coal Mine Health and Safety Act of 1969, but that in all other respects the benefits payable under the workmen’s compensation laws of Tennessee for coal worker’s pneu-moconiosis are as set out in the Tennessee statutes, e. g., T.C.A., § 50-1007(d).

It is true that this Court reached the contrary conclusion in Moore v. Old Republic Ins. Co., Tenn., 512 S.W.2d 564, 567 (1974), but there is no inconsistency because the crucial language of T.C.A., § 50-1105, has been materially altered since that decision. Thus, in contrast to the provisions of T.C.A., § 50-1105, as above quoted, that code section, as it existed and was construed by the court in Moore, provided:

“Benefits paid under this paragraph shall not be subject to the maximum compensation limitations set forth in § 50-1005, subsections (a), (c), (d) and (e) of §§ 50-1007, 50-1008, 50-1010, 50-1011, subsection (c)(ll) of § 50-1013, or any other sections of the act, but shall be controlled exclusively by the compensation benefits and limitations established under the Federal Coal Mine Health and Safety Act of 1969 (U.S.C., tit. 30, §§ 801-860) [960] as applicable to employees suffering from coal workers pneumoconiosis.”

Obviously, the legislature changed the import of T.C.A., § 50-1105, when it enacted Chapter 210, Public Acts of 1975, which deleted the sentence beginning “Benefits paid under this paragraph, etc.” and substituted in lieu thereof the language beginning with the same words, “Benefits paid under this paragraph etc.” as it now exists in that code section and is first above quoted. At the time of the Moore decision, T.C.A., § 50-1105, provided that the Federal Coal Mine Health and Safety Act of 1969 was controlling not only with respect to the maximum compensation benefits to be paid for coal worker’s pneumoconiosis but that such benefits

. . shall be controlled exclusively by the maximum compensation benefits and limitations established under the Federal Coal Mine Health and Safety Act of 1969 as applicable to employees suffering from coal worker’s pneumoconiosis.”

Accordingly, we conclude that, although the Moore decision was correct at the time it was rendered, it is not a controlling precedent for construing the language of T.C.A., § 50-1105, as it presently exists.

We conclude that this issue is controlled by the recent decision of this Court in Liberty Mutual Ins. Co. v. Starnes, Tenn., 563 S.W.2d 178 (1978), opinion by Mr. Justice Cooper in which we said:

“Absent some indication of a contrary intent on the part of the legislature, the statute that determines the rights of the parties under the Workmen’s Compensation Law is that in effect on the date of the accident or injury that provides the basis for the employee’s claim. See Cates v. T. I. M. K, DC, Inc., 513 S.W.2d 508 (Tenn.1974). In the case of a claim arising from an occupational disease, the date of the ‘accident or injury’ is the date on which the employee becomes partially or totally incapacitated for work. T.C.A. § 50-1105. See Tennessee Products & Chemical Corp. v. Reeves, 220 Tenn. 148, 415 S.W.2d 118 (1967); Adams v. American Zinc Co., 205 Tenn. 189, 326 S.W.2d 425 (1959).” 563 S.W.2d at 179.

Therefore, we conclude that the Chancellor should have applied the rate of compensation in effect at the time the plaintiff’s “partial or total incapacity for work” due to coal worker’s pneumoconiosis occurred, rather than the rate of compensation which was thereafter enacted and was in effect at the time of the last hearing in the Chancery Court. In this respect, the decree of the Chancellor is in error and must be reversed.

The appellant’s first assignment of error is overruled but its second assignment of error is sustained and the decree of the Chancellor is set aside. The cause is remanded to the trial court for further proceedings consistent with this opinion. Costs incurred in this Court will be assessed equally against the appellant and the appel-lee.

FONES, COOPER and HARBISON, JJ., and FRANKS, Special Justice, concur.


author: COOPER, Justice.

text:
    STATE of Tennessee, Petitioner, v. Stephen Anthony BRYANT, Respondent.
    Supreme Court of Tennessee.
    Aug. 20, 1979.

      William P. Sizer, Asst. Atty. Gen., William M. Leech, Jr., Atty. Gen., Nashville, for petitioner.
    Burkett C. Mclnturff, Kingsport, for respondent.
   OPINION

COOPER, Justice.

We granted certiorari to consider an opinion by the Court of Criminal Appeals, which held that T.C.A. § 39-2802 creates an unconstitutional inference. We reverse. However, because of errors in the trial court’s instruction, the case is remanded for a new trial.

The defendant was convicted under this statute as a result of his apparent complicity in the attempted robbery of a shoe store, carried out by two others, both masked. The statute provides, in pertinent part:

If any person or persons, disguised or in mask, by day or by night, shall enter upon the premises of another, it shall be considered prima facie that his or her intention is to commit a felony, and the person or persons so offending, shall, upon conviction, be punished by imprisonment in the penitentiary not less than ten (10) nor more than twenty (20) years.

The statute has been construed as authorizing the jury to infer that the defendant possessed the intent to commit a felony from the entry while masked, and to convict on that basis. Cf. Walpole v. State, 68 Tenn. 370 (1878). The Court of Criminal Appeals reversed and dismissed, holding that this inference was unconstitutional, because there was an insufficiently rational connection between the presumed fact and the proved fact upon which the presumption was based. In analyzing this question, the court relied explicitly on Tot v. United States, 319 U.S. 463, 63 S.Ct. 1241, 87 L.Ed. 1519 (1943), and implicitly on Tot’s progeny, Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969), Turner v. United States, 396 U.S. 398, 90 S.Ct. 642, 24 L.Ed.2d 610 (1970), and Barnes v. United States, 412 U.S. 837, 93 S.Ct. 2357, 37 L.Ed.2d 380 (1973). The import of this line of cases has, in the past, been taken to be that, if a statutory inference is to be submitted to a jury as being sufficient to support a conviction, the evidence necessary to invoke the inference must be such that “it can at least be said with substantial assurance that the presumed fact is more likely than not to flow from the proved fact on which it is made to depend.” Leary v. United States, 395 U.S. 6, 36, 89 S.Ct. 1532, 1548, 23 L.Ed.2d 57 (1969). See also Barnes v. United States, 412 U.S. 837, 93 S.Ct. 2357, 37 L.Ed.2d 380 (1973).

However, after the filing of the Court of Criminal Appeals opinion, the Tot line of cases was reinterpreted in County Court of Ulster County, New York v. Allen, - U.S. -, 99 S.Ct. 2213, 60 L.Ed.2d 777 (1979). In the Allen case, it was held that the extent of the rational connection between the inferred fact and the proved fact of a presumption necessary to withstand an attack under the due process clause is determined by whether the presumption is a “permissive inference,” which the Court defines as one which allows, but does not require, the jury to infer the pre-sümed fact from the proved fact, or whether the presumption is a “mandatory presumption,” which is defined as one which requires the jury to find the inferred fact upon proof of the underlying fact, unless the defendant has produced evidence to rebut the presumed connection between the two. In the case of a mandatory presumption, the Court indicated that some form of the standard established in Tot and the subsequent cases would still obtain, in that the constitutionality of the presumption would be determined by its rationality in the abstract, without regard to the facts of the case. However, in the case of a permissive inference, the Court held that, in addition to examining “the presumption’s accuracy in the run of cases,” one must also look at the evidence adduced at the particular trial: Instructing the jury concerning the permissive inference will be error only if, “under the facts of the case, there is no rational way the [jury] could make the connection permitted by the inference.” - U.S. at-, 99 S.Ct. at 2224.

Thus, we must first determine whether the inference created by this statute is permissive or mandatory. The statute states that masked entry is “prima facie” evidence of intent to commit a felony. This language, however, is not determinative, as “prima facie” may be used in various senses, with a range of meaning such that some would fall into each of the categories defined in Allen, supra. See, e. g. Topinka v. Minnesota Mutual Life Insurance Co., 189 Minn. 75, 248 N.W. 660, (1933); Vance v. Guy, 224 N.C. 607, 31 S.E.2d 766 (1944); In re Fink’s Estate, 343 Pa. 65, 21 A.2d 883 (1941). See also, McCormick, Evidence, § 342 at n. 26 (2d ed. 1972). Nor can the question be resolved by reference to past judicial interpretation of the statute, as this particular issue appears to be one of first impression. In this context, we are free to interpret the statute liberally so as to sustain its constitutionality. See, e. g., State v. Netto, 486 S.W.2d 725 (Tenn.1972). We have doubts — as did the Court of Criminal Appeals — as to whether there is sufficient rational connection, in the abstract, between the fact of entry while masked and the intent to commit a felony for the presumption to stand if measured against the “more likely than not” standard of review, which still applies to the analysis of mandatory presumptions. See, County Court of Ulster County, New York v. Allen, - U.S. -, -, 99 S.Ct. 2213, 2230, 60 L.Ed.2d 777 (1979). To avoid this difficulty, we hold that the inference created by this statute is permissive only. Under the holding of County Court of Ulster County, New York v. Allen, supra, a permissive inference is unconstitutional as applied to a given defendant only if, on the basis of all the evidence introduced at trial, it would be irrational for a juror to find the presumed fact. The Court of Criminal Appeals predicated its holding on the abstract rationality of the presumption, rather than addressing the question of the constitutionality of the application of the presumption to the defendant in this case. Consequently, its holding that the statute was unconstitutional was error.

The question remains whether the application of the presumption to the defendant in the instant case was unconstitutional. From the evidence presented at trial, there is no doubt but that the defendant’s two accomplices entered the store with the intent to rob it. Thus, under proper instructions, the use of the statutory presumption in this case would have been constitutional. However, proper instructions were not given. When a jury is instructed concerning a permissive inference, the instructions should make clear that the jury may, but need not, draw the inference suggested by the statute, regardless of whether there is any evidence in the record to rebut the connection between the proved and the presumed facts. Bush v. State, 541 S.W.2d 391 (Tenn.1976). See State v. Roberts, 88 Wash.2d 337, 562 P.2d 1259 (1977). In the instant case, no express instructions were given as to the effect of the inference. To the contrary, the instructions given were susceptible to the interpretation that the jury must convict upon a showing of masked entry, absent proof that there was no criminal intent. This was reversible error. See Sandstrom v. Montana, - U.S. -, 99 S.Ct. 2450, 61 L.Ed.2d 39 (1979). Accordingly, the defendant’s conviction is reversed, and the case remanded for a new trial.

On retrial, the trial judge will instruct the jury fully concerning the nature of the permissive inference established by the statute, assuming of course that there is sufficient evidence introduced at trial to make the inference a rational one. The instructions should indicate that the jury may, but need not, infer that a person intended to commit a felony from the fact of his entry upon the premises of another while masked. The jury should be further instructed that the inference has no effect on the requirement that the State prove all elements of the offense beyond a reasonable doubt.

The case is remanded for further proceedings consistent with this opinion. Costs will be taxed to the defendant.

BROCK, C. J., and FONES, HENRY, and HARBISON, JJ., concur.

      . The Court of Criminal Appeals held that the offense as set forth above has two elements: 1) Entry upon the premises of another while masked, 2) with the intent to commit a felony. We agree, despite language in each of the two reported cases that have construed the statute to the effect that there is only one element, masked entry, which is punishable even without a showing that the entry was effected to commit any other felony. Walpole v. State, 68 Tenn. 370 (1878); State v. Box, 1 Shannon’s Cases 461 (1875). We simply cannot accept the strained and unreasonable construction of the statute made in those cases, a construction which obviously would permit the conviction of numerous innocent persons. Cf. Capitol News Co., Inc. v. Metropolitan Government of Nashville and Davidson County, 562 S.W.2d 430 (Tenn. 1978). Our reading of the statute is supported by language in Walpole v. State, supra. While, as noted above, that case holds that mere masked entry is the substantive offense, it also indicates that a defendant may defeat the State’s case “by showing that there was in fact no purpose to commit crime." Walpole v. State, 68 Tenn. 370, 372 (1878). Such a defense would not be effective if the intent to commit a felony were not an element of the crime.

      . Only Walpole v. State, 68 Tenn. 370 (1878), alludes to the issue, in dicta to the effect that, upon proof of masked entry, a defendant must prove that he had no intent to commit a felony.

      . It would serve no purpose to attempt an exhaustive catalogue of those instances in which persons go about in mask or disguise with innocent intent. Suffice it to say that, at the trial of this case, one of the store clerks testified that it was a common occurrence for persons to enter the store while wearing ski masks similar to those worn by the robbers. There is no indication that any of those others did so with felonious intent.

      . This opinion seems to imply that it is not constitutionally impermissible to instruct a jury concerning a permissive inference even absent any rational connection between the proved fact and that presumed, as long as there is other evidence that would permit a rational juror to infer the presumed fact. See County Court of Ulster County, New York v. Allen,U.S. -, -, 99 S.Ct. 2224, 2228 (1979); id., - U.S. at -, 99 S.Ct. at 2230 et seq. (Powell, J., dissenting). Given that there is some rational connection between the fact of masked entry and the presence of an intent to commit a felony, we find it unnecessary to determine whether a completely irrational presumption would satisfy the requirements of the due process clause of the Tennessee Constitution, Article I, § 8, assuming that, under Allen, supra, it would satisfy those of the 14th amendment. The Tennessee provision did not provide a basis for the holding of the Court of Criminal Appeals, and arguments based upon it have been advanced before this court by neither the State nor the defendant.

      . The trial judge’s instructions concerning T.C.A. § 39-2802 were as follows:
      The charge set out in the first count of this indictment or presentment is founded on Section 39-2802 of the Tennessee Code Annotated, which reads as follows, and I quote:
      If any person or persons disguised or in mask, by day or by night, shall enter upon the premises of another, or demand entrance or admission into the house or inclosure of any citizen of this state, it shall be considered prima facie that his or her intention is to commit a felony, and the person or persons so offending, shall, upon conviction, be punished by imprisonment in the penitentiary not less than ten (10) years nor more than twenty (20) years.
      Defendant is not charged with a principal offense, but he is charged with aiding and abetting another.
      So, in this case, if you find from all of the evidence, beyond a reasonable doubt that the defendant, aided and abetted Scott Roller, or was present, aiding and abetting and ready and consenting to aid and abet Scott Roller in the commission of the criminal offense of entering the premises of another while disguised or in mask, within this county and prior to the finding of this indictment or presentment, then you should convict him and fix his punishment.


text:
    Edward A. COX, Superintendent of Schools of Maury County, et al., Appellants, v. Nancy Hull PERKINS, Appellee.
    Supreme Court of Tennessee.
    Aug. 20, 1979.
    William H. Dale, Columbia, for appellants; Tomlinson & Dale, Columbia, of counsel.

      Robert W. Knolton, Columbia, for appel-lee; Hardin & Knolton, Columbia, of counsel.
   OPINION

BROCK, Chief Justice.

Nancy Hull Perkins, a teacher in the public schools of Maury County, brings this action pursuant to T.C.A., § 49-1417, against the Superintendent of Schools and the Board of Education of Maury County contesting her discharge from a teaching position in the Maury County public schools. The defendants have advanced no reason for the discharge but defend upon the ground that the teacher did not have tenure rights and, therefore, could be discharged without cause. The case was submitted to the Chancellor for decision upon motions for summary judgment filed by both sides and the Chancellor decided the case in favor of the teacher, awarding reinstatement and back pay. The defendants have appealed.

It is conceded that the plaintiff was employed as an elementary school teacher by the Maury County Board of Education for a period of five years from 1968 thru 1973 and that she, accordingly, acquired the status of permanent tenure. But on May 3, 1973, the teacher wrote a letter to the Superintendent of Education for Maury County in which she tendered her resignation as of June 4, 1973, for the stated purpose of going into business for herself. This resignation was duly accepted by the Maury County Board of Education. After a lapse of two years, the Maury County Board of Education re-employed the plaintiff for the school years 1975-76 and 1976-77, but the Board refused to employ the plaintiff for the school year 1977 — 78. The plaintiff protested her discharge and was accorded a formal hearing before the Maury County Board of Education resulting in a determination by that Board that she would not be re-employed. The plaintiff thereupon filed this action seeking to review and reverse the action of the Board.

Thus, the question presented for our decision is whether the plaintiff teacher was protected by tenure at the time of her discharge in 1977. This issue is purely a legal one, there being no disputed issues of fact.

The Board contends that by resigning in May, 1973, the plaintiff waived or lost her rights of tenure. The Board relies primarily upon the language of T.C.A. § 49-1401(4)(a), which provides:

“ ‘Permanent tenure’ refers to a term and condition of tenure, extending from the time when the teacher acquires the status of permanent tenure until such time as the teacher arrives at the maximum age set forth in this chapter, resigns, retires or is dismissed under provisions of this chapter.”

The Board also relies upon certain decisions of the courts of other states, e. g., Pitcher v. Iberia Parish School Board, La.App., 280 So.2d 603, cert. denied, 416 U.S. 904, 94 S.Ct. 1608, 40 L.Ed.2d 109 (1973); Gardner v. Hollifield, 96 Idaho 609, 533 P.2d 730 (1975); Norwitz v. Board of Education of Harrison TP., 128 N.J.L. 13, 23 A.2d 913 (1942).

The plaintiff teacher argues that T.C.A., § 49-1401(4)(a), above quoted, when read in conjunction with T.C.A., § 49-1408, as construed by this Court in Ryan v. Anderson, Tenn., 481 S.W.2d 371 (1972), does not provide that her resignation resulted in the loss of tenure status. The portion of T.C.A., § 49-1408, which is of particular pertinence here is as follows:

“A teacher shall give the superintendent notice of resignation at least thirty (30) days in advance of the effective date of the resignation. A teacher who fails to give such notice, in the absence of justifiable mitigating circumstances, shall forfeit all tenure status under this chapter; provided, that the board may waive the thirty (30) days’ notice requirements and permit a teacher to resign in good standing.”

The plaintiff gave the thirty days’ notice of resignation as required by this section and argues, of course, the only reasonable construction of this statutory provision is that one who resigns without giving the thirty days’ notice as required forfeits rights of tenure but that one who complies with the notice requirement does not lose tenure status by resignation.

We have concluded that the plaintiff’s contentions are correct. These same statutes were construed by this Court in Ryan v. Anderson, supra, a case in which the facts were almost identical to the facts in the instant case, except for one significant difference, viz., in Ryan the teacher had failed to give the thirty days notice of resignation, whereas, in the case at bar the plaintiff did give the thirty days’ notice of resignation required by T.C.A., § 49-1408. In the Ryan opinion, the Court said:

“In State v. Yoakum (1956) 201 Tenn. 180, 297 S.W.2d 635, this Court noted that the basic purpose of the Teacher Tenure Act T.C.A., § 49-1401, et seq., is to afford a measure of job security to those educators who have attained tenure status. The General Assembly recognized that the efficient administration of the local educational systems of this State requires stability of programs and trained personnel.
“In T.C.A. § 49-1408 the Legislature recognized that under certain circumstances a teacher could break a contract with a board of education and retain tenure status by giving ‘notice of resignation at least thirty (30) days in advance of the effective date of the resignation.’ The statutory penalty for failure to give the required notice is forfeiture of ‘all tenure status’ under the Teacher Tenure Act. The legislative purpose of the notice of resignation requirement is to give a board of education an opportunity to employ a trained person to replace the teacher resigning.” 481 S.W.2d at 374.

Because in Ryan the record was “devoid of any evidence to show that complainant ever submitted a notice of resignation to the superintendent thirty days in advance of leaving the employment of the Hawkins County Board of Education” it was there held that the teacher had lost tenure status by resigning without giving the notice. But, as shown by the above quotation from that opinion, the Court recognized that

“ . . .' a teacher could break a contract with a board of education and retain tenure status by giving ‘notice of resignation at least thirty (30) days in advance of the effective date of the resignation.’ ”

We adhere to the view expressed in Ryan that a teacher who enjoys permanent tenure status does not lose that status by resignation, provided the thirty (30) days notice of resignation is given as required by T.C.A., § 49-1408.

The Board cites respectable authority from other states which we have examined but we find it to be of little assistance because the statutes construed in those cases differ from ours in that they contain no provision equivalent to that in T.C.A., § 49-1408, which we have quoted above.

It is our conclusion that the plaintiff enjoyed permanent tenure status at the time of her discharge in 1977 and, therefore, could not be dismissed except for one of the causes specified in T.C.A., § 49-1412. Since no such cause is alleged, the plaintiff’s discharge in this case was unlawful and entitles her to the relief of reinstatement and back pay as awarded by the Chancellor.

Our decision should not be interpreted to mean that a teacher who enjoys permanent tenure status and who resigns' upon complying with the notice provisions of T.C.A., § 49-1408, may require re-employment by the board following such resignation. We merely hold that such a teacher, if re-elected by the Board following such a resignation, continues to have the rights of tenure which he or she enjoyed prior to the resignation.

The decree of the Chancellor is affirmed and costs are taxed against the appellants.

FONES, COOPER, HENRY and HARBI-SON, JJ., concur.


author: HARBISON, Justice.

text:
    Ronald Henry ROBINSON, Petitioner-Defendant, v. UTICA MUTUAL INSURANCE COMPANY, Respondent-Plaintiff.
    Supreme Court of Tennessee.
    Aug. 20, 1979.
    H. Fred Ford, Steve C. Norris, Nashville, for petitioner-defendant.
    James M. Doran, Jr., Terry L. Hill, Nashville, for respondent-plaintiff.
   OPINION

HARBISON, Justice.

In this action a homeowner’s insurance carrier sought a declaratory judgment to determine whether its policy afforded coverage and required defense of a tort action filed against the insureds. The insurer denied coverage, relying upon an exclusion in the policy. The Chancellor held that there was coverage. In a divided decision, the Court of Appeals reversed.

All parties moved for summary judgment after depositions of the insured, Sherman Cherry and Harriet Cherry, were filed. Neither party contends that there is any dispute as to material fact. Although the insurer mentions the credibility of Mrs. Cherry and refers to prior contradictory statements given by her, it did not seek a trial but has pursued its claim for summary judgment throughout the litigation. Issues of credibility and weight of evidence address themselves to the trial of contested facts, not to summary judgment.

The tort claim against the insureds arose out of an accident which occurred in their home on June 17, 1975. In the accident their infant grandchild received fatal injuries. The grandparents were keeping the infant and another young grandchild for a few hours to accommodate their married daughter, as they frequently did. In addition, their two sons, aged seventeen and twenty, were at home. Also there on the occasion of the injury was a nine or ten-year-old child, Bobby Norris, who was being eared for by Mrs. Cherry under a babysitting arrangement with his parents. Bobby was alleged to be mentally retarded. The injury to the insureds’ grandchild occurred when Bobby picked up the baby and then in some manner dropped her or allowed her to fall from the carrier in which she had been lying.

The facts surrounding the accident are very briefly mentioned in the depositions. The only description was given by Mrs. Cherry, as follows:

‘T was back — well, I was laying on the bed next to her, and had got up to go to the kitchen to start my supper. And I heard her kind of gurgle, or something, and I ran in there, and that’s when I found her.”

The complaint in the tort action alleged that on the previous day, when Mrs. Cherry had been caring for both children, Bobby Norris had picked up the baby. It alleged that on the day of the accident when Mrs. Cherry left Bobby alone in the room with the infant, the baby began crying, and Bobby injured the child in an effort to quiet her.

The complaint alleged negligence, primarily against Mrs. Cherry, in leaving the two children together and unattended while she went elsewhere in the house. It alleged that on the same date Mrs. Cherry was caring for two other children of other persons. In her deposition, however, Mrs. Cherry denied this. She testified that Bobby was the only child other than her family members for whom she furnished care on that day.

In their depositions, Mr. and Mrs. Cherry admitted that Mrs. Cherry for several years had engaged in providing daily babysitting and childcare services for a few children. Mrs. Cherry testified that she never cared for more than “about four” children. Apparently in a prior statement to the insurer she had stated that the Norris child was the only one for whom she was babysitting on a regular basis. In her deposition she admitted that this was incorrect and that she eared for additional children, “but not all the time.” She said she kept some of the other children three or four days a week but was not keeping them “on a regular basis.” Her husband said that he assumed that she kept as many as “two, three children.”

Mrs. Cherry stated that on one occasion, about a year prior to the accident, she had run one newspaper advertisement offering childcare services. Her husband said that she kept pre-school children during part of the year and that during the summer, after school was out, she took older children. She had begun caring for the Norris child during 1974 as a result of her advertisement. She charged thirteen dollars per week for care for five days, which included lunch for each child. When children were left with her on a daily, rather than a weekly, basis, she charged four dollars per day. She had no records of the dates on which she kept children, had no written contracts or formal business organization, and named only one other person, a fellow church member, for whom she kept children. She said that sometimes she would keep “some” of the three children of that individual. At the time of her deposition she was regularly keeping one child in the afternoon after school and a very young child all day.

The insurance carrier filed a specimen of the policy held by Mr. and Mrs. Cherry. It appears to be a standard form. In addition to providing fire and comprehensive insurance coverage on their home, the policy provided medical benefits and liability insurance for personal injury and property damage. Although there are several exclusions from coverage, in this case the company relies entirely upon the following clause, providing that the policy does not apply:

“d. to bodily injury or property damage arising out of business pursuits of any Insured except activities therein which are ordinarily incident to non-business pursuits;”

In the general conditions of the policy there are several definitions applicable to all of the coverages. Among these is the following:

“d. ‘business’ means
(1) a trade, profession or occupation, including farming, and the use of any premises or portion of residence premises for any such purpose . . . .”

Excluded from the definition of “business” is the rental of portions of the residence “unless for the accommodation of three or more roomers or boarders.” It would appear, therefore, that the keeping of one or two “roomers or boarders” would not fall within the definition of a “business” and thus might not be a “business pursuit” under the exclusion involved here. Neither the insureds nor the third-party claimant insist that Mrs. Cherry regularly kept fewer than three children, however, and they seemingly concede that her caring for Bobby Norris constituted a “business pursuit” even though he was her only “customer” on the day of the accident.

There is little information in the record as to the underwriting involved. The insurer insists that the policy was issued at a lower premium than would otherwise be charged because of the exclusion relied upon. There is no proof in this regard, however, nor any other testimony from the underwriting agent. Mr. Cherry testified that he had had homeowner’s insurance for twenty-three years, but not always with the same agent or company. Only once did he ever recall an insurance agent visiting his home, and he said there had never been any discussion between him and the insurer regarding the policy provisions or exclusions. He thought that his wife had been providing child care for some five or six years before the accident but could not recall whether she was doing so when the underwriter visited the premises. It is therefore not possible to dispose of this case upon a factual determination as to the intent of the parties, waiver or estoppel. In the recent case of American Family Insurance Co. v. Dewald, 597 F.2d 1148 (8th Cir. 1979) coverage under a similar policy was denied because the insurance agent informed the insured that the policy would not cover injuries to children being kept in the home by the wife. He offered such coverage for an additional premium. The appellate court held as a factual matter that no coverage was expected or anticipated and found it unnecessary to decide whether the insured’s activities constituted a “business pursuit” within the language of the exclusion.

Assuming, as we must on this record, that Mrs. Cherry was engaged in such a pursuit, it must be determined whether the exclusion is applicable to the facts presented or whether the “exception” to that exclusion provides coverage.

The language of this exclusion has been the subject of many cases throughout the United States. These have arisen in many different contexts, and divergent results have been reached. See generally Annot., 48 A.L.R.3d 1096 (1973). A number of courts have found the language of the exclusion, and the exception contained therein, to be ambiguous. Others have held to the contrary on specific facts. Nearly all of the courts have found the language difficult of interpretation and application. As stated by the Alabama Supreme Court in the recent case of Stanley v. American Fire & Casualty Co., 361 So.2d 1030, 1032 (Ala. 1978):

“The provision does not lend itself to clarity, resulting in a split of opinion over whether it is ambiguous, with the consensus being that it is poorly worded.”

While the Michigan Court of Appeals concluded that the clause was not ambiguous, it found it difficult to apply and stated that its application was “resolvable only in specific factual contexts.” State Mutual Cyclone Insurance Co. v. Abbott, 52 Mich.App. 103, 216 N.W.2d 606, 608 (1974).

The exclusion was considered by the Court of Appeals of this state in Cincinnati Insurance Co. v. Shelby Mutual Insurance Co., 542 S.W.2d 822 (Tenn.App.1975). There, it was held that when the insured, who operated a business involving the sale of animals and pet supplies, kept a pregnant lioness at home, he was engaged in a “business pursuit” within the meaning of the exclusion. A child was injured by the lioness, and her claim against the insured was held not to be covered by the policy, despite a contention that the exception contained within the exclusion was applicable. Construing that exception, involving activities “ordinarily incident to a non-business pursuit,” the court said:

“ . . . this exception seems to be intended to provide coverage for ordinary homeowner activities even though money may be earned from them.” 542 S.W.2d at 825.

The Court concluded, however, that the keeping of a lion was not ordinarily incident to nonbusiness pursuits, observing:

“Lions are not ordinarily kept at home.” Id.

Similarly, the exclusion, rather than the exception, was held applicable and coverage was denied when a child was bitten by a wolf kept at home by an insured engaged in wild animal research. North River Insurance Co. v. Poos, 553 S.W.2d 500 (Mo.App. 1977).

A number of cases have involved injuries incident to babysitting services. The courts have reached different conclusions, as did the Chancellor and the Court of Appeals in the present case, in deciding whether coverage was afforded. All of these cases have involved injuries to children who were being kept under a childcare agreement, rather than to a member of the insured’s own family as in the present suit.

Probably the leading case holding that coverage was afforded when one of the children being kept in a home suffered burns is Crane v. State Farm Fire & Casualty Co., 5 Cal.3d 112, 95 Cal.Rptr. 513, 485 P.2d 1129, 48 A.L.R.3d 1089 (1973). In that case the insured had two young children of her own, and she simultaneously cared for two other infants of a working mother under an arrangement of indefinite duration between the two mothers.

Reversing an intermediate appellate court which had held that the insured was engaged in a “business pursuit”, the California Supreme Court concluded that the policy provisions were ambiguous and should be construed against the insurance carrier. The court stated that the policy language should be considered as it would be when read by a layman, rather than by an attorney or an insurance expert, and that exclusionary clauses, in order to be enforced, must be plain, conspicuous and clear in meaning.

In that case, the court concluded that the language of the exception, rather than the general exclusion, was applicable, and that the insured was engaged in activities “ordinarily incident to nonbusiness pursuits” in caring, for children in her home. The Court said:

“Indeed, it is difficult to conceive of an activity more ordinarily incident to a noncommercial pursuit than home care of children.” 95 Cal.Rptr. at 515, 485 P.2d at 1131.

Referring to other cases' in which the language of the exception had been construed, the court stated that the insurance carrier had, in an Illinois case, posed a hypothetical situation. Assuming that a salesman entertained a business guest on the golf course and accidentally struck the guest while swinging a golf club, the insurance carrier conceded that the exception to the exclusion would apply, despite the fact that the salesman was engaged in a “business pursuit” while entertaining the guest. Commenting upon the Illinois case, the California court said:

“Thus, State Farm in effect agreed in Illinois that its policy provides coverage if the insured is acting simultaneously in a business and a nonbusiness capacity and the accident occurs during the course of carrying out this dual role.” Id., 95 Cal. Rptr. at 516, 485 P.2d at 1132.

The California court in the Crane case relied upon another frequently cited ease, Gulf Insurance Co. v. Tilley, 280 F.Supp. 60 (N.D.Ind.1967), aff'd, 393 F.2d 119 (7th Cir. 1968). There a child being kept in the home for compensation was injured when she pulled a percolator filled with hot coffee off a table. The insured was held to be engaged in an activity ordinarily incident to nonbusiness pursuits in preparing coffee for herself and a friend.

The analysis in Crane and Tilley was questioned by the Supreme Court of Alabama in the case of Stanley v. American Fire & Casualty Co., 361 So.2d 1030 (Ala. 1978). There a one-year-old child fell into some hot coals in the fireplace of the Stanley home where she was being kept. Mrs. Stanley regularly cared for some eight different children, no more than five at a time, at a charge of three dollars per day. She had gone to the kitchen to prepare lunch for herself, her own children and the other children whom she was keeping when the accident occurred.

Although finding that the policy language, identical to that involved here, was poorly worded and “could have been written with more specificity,” the Alabama court concluded that the language was not ambiguous. It said:

“The baby was burned because of the condition on the premises, and the baby’s own activity. The business of child care contemplates the exercising of due care to safeguard a child of tender years from household conditions and activities; and, any activity of the insured in this regard from which injury results cannot logically be called an activity ordinarily incidental to a non-business pursuit. In other words, the activity referred to is a failure to supervise rather than making coffee for a third party. Undertaking the business relation of child care for compensation is certainly not ordinarily incident to the conduct of a household.” 361 So.2d at 1032.

To the same effect was the decision of the Florida Court of Appeals in Peterson v. Highlands Insurance Co., 328 So.2d 49 (Fla. App.1976), where the insured was “running a nursery or babysitting service for compensation.”

On the other hand, the policy provisions were found to be ambiguous and the insurer not entitled to summary judgment in the case of Nationwide Mut. Fire Insurance Co. v. Collins, 136 Ga.App. 671, 222 S.E.2d 828 (1975), where the insured kept two children for compensation in addition to two young children of her own. She did not run a licensed establishment and had never advertised for customers. Using the same general rules of construction and interpretation as had the California court in Crane, supra, the Georgia court concluded that the insured, in caring for the child of a working mother was, or could be found by a trier of fact to be, engaged in activities ordinarily incident to nonbusiness pursuits. It therefore affirmed a decree of the trial court denying summary judgment to the carrier which relied upon the policy exclusion.

It is apparent that there is a substantial split of authority in the cases dealing with injury to a child being kept in a private home under a contract with his parents for part-time daily care. In these cases the duty of the insured to the child arises solely out of the contractual or business arrangement. Some of the courts have held that that arrangement constitutes a “business pursuit.” Others have concluded that even if it does, the policy provision does not exclude coverage for all such activities and expressly covers claims connected with business pursuits if these involve activities “ordinarily incident” to non-business pursuits. Commercial childcare has been found by some to fall within the exception. In some of these cases, and in other types of cases involving the policy provision, the emphasis has been upon the “instrumentality” causing the injury; in others, upon the particular activity in which the insured was engaged at the moment of the accident.

As pointed out by the California court in the Crane ease, supra, the policy provision deals in general terms with activities which, in some instances, may simultaneously involve both a business purpose and a noncommercial one. Not in every ease are the two portions of the clause mutually exelu-sive~as in the hypothetical golfing incident.

In the present ease it seems to us that it could reasonably be concluded that at the time of the accident the insured was simultaneously engaged in a “business pursuit" in caring for Bobby Norris and in nonbusiness activities in caring for her two grandchildren and in preparing dinner for her family. The gravamen of the tort claim against her, however, is not a breach of duty toward Bobby Norris resulting in injury to him, as in the cases discussed above, but in the alleged neglect of her granddaughter, for whose injury the suit is brought. Even though the keeping of Bobby may have met the definition of “business” under the general .conditions of the policy, Mrs. Cherry was also engaged in activities usually incident to nonbusiness pursuits in gratuitously caring for her own household and grandchild. It is her failure to provide proper care for that child which constitutes the legal basis, if any, for her alleged liability. The claim, at least in part, arises out of or is “incident to” that noncommercial activity.

On these facts, therefore, we do not believe that the wrongful death claim arose exclusively out of the “business pursuit” of the insured so as to entitle the insurer to summary judgment. We do not attempt here to resolve the issue of whether the policy language is “ambiguous” or merely “difficult” to apply. Unless the facts clearly bring a case within the ambit of a policy exclusion, doubt should be resolved in favor of coverage. Travelers Insurance Co. v. Aetna Casualty & Surety Co., 491 S.W.2d 363, 367 (Tenn.1973).

We are of the opinion that the Chancellor correctly concluded that the insured was entitled to coverage and a defense in the tort action. We express, of course, no opinion upon the merits of that action or upon whether the claimant would be entitled, either legally or factually, to recover. It is sufficient to note that the policy provides coverage for alleged liability for personal injury even if the allegations of the complaint are groundless.

The judgment of the Court of Appeals is reversed and that of the trial court reinstated at the cost of respondent. The cause will be remanded to the trial court for collection of costs accrued there and for any further orders which may be necessary.

BROCK, C. J„ and FONES, COOPER and HENRY, JJ., concur.

      . Joined as a defendant by the insurer was the plaintiff in the tort action. Initially an injunction was sought against his proceeding with that action pending resolution of the coverage issue. However, he was permitted, to answer on the merits, to participate in the taking of depositions and to pursue a motion for summary judgment, without apparent objection to his standing. He, rather than the insureds, has taken the leading role in the litigation on the coverage issue. When the insurer lost in the trial court, it made him a party to the appeal. The insurer challenges his standing in this Court to seek review by petition for certiorari, but under the circumstances we think this claim comes too late.

      . The testimony does not indicate sufficient activity on the part of Mrs. Cherry to qualify her residence as a “family day-care home,” T.C.A. • § 14-1401(6), so as to place it within the licensing requirements and regulations governing “child welfare agencies,” T.C.A. §§ 14-1401 et seq.

      . State Farm Fire & Cas. Co. v. National Union Fire Ins. Co., 87 Ill.App.2d 15, 230 N.E.2d 513 (1967) (horseplay in momentary deviation from regular work held covered).


text:
    S. T. COLLINS, Jr., et al., Petitioners-Plaintiffs, v. John L. SMITHSON et al., Respondents-Defendants.
    Supreme Court of Tennessee.
    Aug. 20, 1979.

      Robert C. Henry, Henry & Henry, Pulaski, for petitioners-plaintiffs.
    Carol L. Mittlesteadt, White & Mittles-teadt, Lawrenceburg, D. C. Lee, Pulaski, for respondents-defendants.
   OPINION

HARBISON, Justice.

This case involves the interpretation and legal effect of a deed executed by parents to their daughter in 1905. The daughter survived her parents and died without issue in 1976. There was language in the deed providing for reversion of the subject property to the grantors, or to their estates, in the event of the death of the daughter without issue.

Both the trial court and the Court of Appeals held that the daughter owned the property in fee simple and that her grantees under subsequent deeds acquired a similar title valid against the claims of the heirs of the grantors. We affirm their decision, although for reasons somewhat different from those stated by them.

The case has been presented upon a stipulation of facts and documentary evidence. At some points the information contained in the record is meager, but the following is a chronological summary of the relevant facts and circumstances as adduced by the parties in the trial court.

On March 18, 1905, F. M. Collins and wife, Anna A. Collins, executed two separate deeds, conveying property to two of their children. Whether the parents owned the property as tenants by the entirety or whether title rested in one of them separately does not appear from the record. Both parents joined in the deeds, which contain no derivation clause or other information as to source of title. These parents had a third child to whom no conveyance was made in March 1905, but the record does not indicate his age or date of birth or whether he at any other time received a similar conveyance from his parents. Both of the deeds executed in 1905 were deeds of gift. Both contain language indicating that they were intended to be advancements to the grantees against their future inheritance from their parents. Both contain the grantors’ estimate of the current value of the property conveyed, which values are not contested in this litigation. Both deeds required the grantees to be charged with the value of the properties being received by them as a part of each grantee’s interest in the estates of the parents. Both parents later died intestate, so that, in our opinion, the law of advancements must be given consideration in determining the intent of the grantors and the legal effect of the deed in question.

That deed was executed by F. M. Collins and wife Anna Collins to Maggie L. Paisley under date of March 18, 1905. It was not recorded until June 18, 1921. None of the parties makes any issue of the latter fact, nor is there any explanation of the delay in recordation. There is no question that the grantee did in fact accept the gift from her parents, although whether the deed was delivered in 1905 upon the date of its execution or delivered later does not appear.

The pertinent provisions of the deed are as follows:

“For and in consideration of the sum of one dollar in hand paid, and for the love and affection we have for our daughter, Mrs. Maggie L. Paisley, we, F. M. Collins and wife, Anna Collins, have this day bargained and sold and donated and by these presents do transfer and convey unto Mrs. Maggie L. Paisley, her heirs and assigns, two certain tracts or parcels of land, situated and lying in the 14th and 19th civil districts of Giles County and State of Tennessee . . . [here follow descriptions of a tract of 149.85 acres and a tract of 29 acres, the former tract being the only one involved in this litigation]
“To have and to hold to the said Mrs. Maggie L. Paisley, her heirs and assigns; and we convenant with the said Mrs. Maggie L. Paisley, her heirs and assigns, that we are lawfully seized and possessed of said land in fee simple, and have a good right to convey, and that the same is unencumbered; we further covenant and bind ourselves, our heirs and representatives to warrant and forever defend the title to said land to the said Mrs. Maggie L. Paisley, her heirs and assigns, against the lawful claims of all other persons.
“But in making this deed of gift to our daughter, Mrs. Maggie L. Paisley, it is understood that in the event she, the said Maggie L. Paisley should die without issue the property herein conveyed shall revert back to us or to our estate to be redistributed between our legal heirs. We place a value of Five thousand and three hundred dollars upon the lands herein conveyed and shall be held against her the said Mrs. Maggie L. Paisley as a part of her interest in our estate, but she shall not be liable for any interest on said amount.”

A similar deed, conveying other real property to S. T. Collins, son of the grantors, was executed on the same date and was recorded on January 16, 1914. This deed, both its granting clause and its habendum clause, like the deed to Mrs. Paisley, purported to convey a fee simple absolute. Like the deed to Mrs. Paisley, however, in the deed to Mr. Collins, after the general warranties, there was the following clause:

“ . . . but in making this deed of gift to our son, S. T. Collins it is understood that in the event he the said S. T. Collins should die leaving no bodily heirs, the property herein conveyed shall revert back to us or our estate to be redistributed between our legal heirs and we place a value of five Thousand and sixty Dollars upon the lands herein conveyed and shall be held against the said S. T. Collins as a part of his interest in our estate, but he shall not be liable for any interest on said amount.”

The record is silent as to any events between the execution of the deeds and 1934, except for the respective dates of recordation. On December 31, 1934, the original grantors P. M. Collins and wife Anna Collins executed a quitclaim deed to their son S. T. Collins with respect to the tract previously conveyed to him. It was recorded on April 30, 1935. The stipulation states that in this instrument the parents “did release the restriction” in their prior deed to S. T. Collins. The actual language of the deed is as follows:

“The purpose of this, quit-claim deed is as follows: The grantors herein, by deed dated March 18, 1905, and of record in Deed Book 72, page 543, conveyed the foregoing real estate to their son, S T Collins, with a reservation that in the event the said S T Collins should die, leaving no bodily heirs, the property therein conveyed should revert to them or to their estate, to be redistributed among their heirs. It is now our intentions by this quit-claim deed to forever release and relinquish all interest and claims which we have in this land, with no reservations or restrictions, the intent being to perfect in our son, S T Collins, a fee simple title.”

At this time, of course, both parents were still living, and by this deed they undertook to divest themselves of any future or rever-sionary interest in the tract previously conveyed to their son. They did not purport to relieve him of accounting for its value in final distribution among their heirs.

After he had obtained the quitclaim deed from his parents, but before it was recorded, S. T. Collins executed two mortgages on the property which his parents had deeded to him. These mortgages were recorded after he recorded the quitclaim deed.

It is further stipulated that F. M. Collins died intestate in 1936. His estate was administered by his son S. T. Collins and by L. E. Paisley, husband of Maggie L. Paisley. None of the records from this administration have been filed in the present litigation, and the record is silent as to what, if any, accounting was made by S. T. Collins or Mrs. Paisley for the advancements received from their parents. Such advancements, by law, are required to be accounted for, unless such accounting is waived. See T.C.A. §§ 31-701 to 705.

Mrs. Anna Collins, according to the stipulation, died intestate in 1943. There was no formal administration of her estate. An affidavit filed on February 22, 1947 in the Register’s Office of Giles County by S. T. Collins stated that F. M. Collins and Anna Collins were then deceased, survived by three children, S. T. Collins, Mrs. Maggie L. Paisley and Solon E. Collins.

It is then stipulated that following the death of Mrs. Anna Collins, all of the real estate owned by F. M. Collins and Anna Collins was sold by their three children. The stipulation recites six separate deeds, naming the grantees and giving the recording data, but not the date, of each deed.

On December 6, 1947, Mrs. Paisley and her husband L. E. Paisley conveyed to third parties, in fee simple, the twenty-nine acre tract which she had received from her parents in 1905. It was stipulated that when the present suit was filed, the deed from Mrs. Paisley to these grantees had been of record continuously and there had been no litigation concerning the sale of that tract. The present suit likewise does not involve the 1947 deed given by Mrs. Paisley.

Although otherwise unexplained or elaborated upon by testimony, the record shows that on July 8, 1950 Solon E. Collins conveyed unto Mrs. Paisley and her husband any present interest or expectancy which he might have in the 149.85 acre tract received by Mrs. Paisley from her parents in 1905.

This deed was executed in Ohio by Solon E. Collins and his wife for a stated consideration of one thousand dollars cash. It purported to convey to Mr. and Mrs. Paisley, as tenants by the entirety, “all of our right, title, interest and estate, both present and in expectancy” to the 149.85 acre tract. This deed cites as the source of title the original deed from her parents to Mrs. Paisley. Following its habendum clause, the deed contains the following statements:

“The parties to this deed are advised that Maggie L. Paisley took, under said deed to her, a fee simple title in and to the above described real estate. The grantor, Solon E. Collins, is one of the children of F. M. Collins and wife, and it is out of deference to their wishes as expressed in the last paragraph of the deed aforesaid that the grantees are taking this conveyance for the above consideration.”

This statement is cryptic, and its significance is difficult to determine. The deed does show either that Mrs. Paisley in 1950 attempted to purchase any possibility of reverter that Solon E. Collins may have had or that she intended, in some way, to account to him for the advancement with which she had been charged in the 1905 deed. As stated, there is no other information in the record. Although Solon E. Collins was still living when this litigation was brought, he did not testify. An answer was filed on his behalf, insisting that his sister did indeed have fee simple title to the 149.-85 acre tract, and he expressly disclaimed any interest therein. S. T. Collins also survived his sister, Mrs. Paisley, but he did not testify.

The record further shows that L. E. Paisley died in 1963, but Mrs. Maggie L. Paisley lived until 1976, dying at age ninety-five. No children were ever born to her.

In the latter years of her life, Mrs. Paisley deeded a number of tracts of real property to her nephews, first conveying a remainder and reserving a life estate and thereafter transferring her life estate. These deeds are in the record. They cover a number of separate tracts. However, only the title to the 149.85 acre tract received by Mrs. Paisley in 1905 is involved in this case.

The suit was filed on behalf of S. T. Collins, contending that upon the death of his sister without issue in 1976, her title failed and the property reverted to the heirs of their parents. It is insisted on behalf of S. T. Collins that his sister took either a life estate or a defeasible or qualified fee under the 1905 deed. His brother Solon E. Collins and the grantees of Mrs. Paisley insisted that she acquired fee simple initially or that her title became absolute when she survived her parents, so that her subsequent death without issue did not terminate her interest.

The trial court dismissed the suit, holding that the legal effect of the deed from her parents to Mrs. Paisley was to create a fee tail estate, which was converted, by T.C.A. § 64-102, into a fee simple. In the alternative, he held that unless the gift over took effect during the lifetime of the grantors— that is, unless Mrs. Paisley died without issue while her parents were still living— her title became absolute upon her surviving them.

The Court of Appeals affirmed the judgment of the trial court but did so primarily upon the theory that there was an irreconcilable conflict between the granting clause of the 1905 deed and the subsequent conditions appearing therein. Relying upon rules of construction, the Court of Appeals held that the absolute estate in fee apparently conveyed in the granting and the ha-bendum clauses of the deed could not be reduced into a lesser estate by subsequent conditions which the Court regarded as indefinite and uncertain in legal effect.

We granted certiorari to give full consideration to the issues. The Court has been furnished excellent briefs by all counsel.

We are unable to sustain the conclusion of the trial court that the 1905 deed created a fee tail estate in the grantee, which, by operation of statute, was automatically converted into fee simple title.

The statute abolishing fee tail estates was enacted in North Carolina in 1784 and has been a part of Tennessee law since its statehood. It presently appears as T.C.A. § 64-102.

In construing a deed, as in construing a will, the Court is primarily concerned in trying to ascertain the intention of the parties. There is some early case law in this state to the effect that when there is a conveyance to an individual with a gift over upon failure of issue, a fee tail may be created. This, however, depends upon a construction of the conveyance under which the court finds that the grantor or testator intended an indefinite failure of issue — that is that the grantee and his issue take title indefinitely and into future generations, and that the title fails only when there is ultimately a cessation of the blood line. See Harris v. Bittikofer, 541 S.W.2d 372, 375, 384 (Tenn.1976).

Since the legislative acts of 1851 — 52 there has been a statutory presumption in this state that a testator or grantor did not intend such an indefinite failure of issue. T.C.A. § 64 — 104. Because the estate tail had, in effect, been abolished for more than one hundred years prior to the date when the deed in question was executed, we think that the possibilities are remote that these parents intended to create such an estate in their daughter by their deed in 1905. It seems to us that it would have been a scrivener’s error amounting almost to an accident if such an estate had resulted from the words used in this deed. None of the language classically used to denote or establish such an interest in real estate was employed. Accordingly we agree with the petitioners that the trial court erred in finding that the deed created a fee tail estate. We find nothing in Harris v. Bittikofer, supra, which requires such a result.

Nor are we able to agree with the Court of Appeals that the case should be disposed of by separate consideration of the technical portions of the deed. There are cases, many of which were cited by the Court of Appeals, to the effect that where there is an irreconcilable conflict between the granting and the habendum clauses or where later portions of a deed, in an uncertain or unintelligible manner, attempt to reduce a greater estate apparently conveyed in an earlier clause, the later provisions will be ineffective. It has long been the preferred rule in this state, however, that all of the provisions of an instrument be considered together and that the intention of the grantor of a deed be ascertained from the entire document, not from the separate parts thereof, if at all possible. See generally Moore v. Stanfill, 44 Tenn. App. 217, 225-37, 313 S.W.2d 486 (1957) and cases cited therein. We are of the opinion that the intention of the grantors in the present case can be ascertained from the entire instrument and that no part of it can be or should be disregarded.

The second reason given by the trial court for sustaining the title as a fee simple, in our opinion, has merit, particularly when the provisions of the deed are considered in connection with the law of advancements between parents and children in cases of intestate distribution.

Since we have concluded that the grantors did not intend an indefinite failure of issue by the language employed, in our opinion the controlling question in this case is whether they intended for the reversion, upon failure of issue of Mrs. Paisley, to occur at the date of her death at any time or only if she died before her last surviving parent. In the absence of language or circumstances indicating a contrary intention, probably the former would be the usual interpretation or construction given to a deed or will; indeed it is the interpretation which is called for by T.C.A. § 64-104, in the absence of language in the document expressing a contrary intention. The statute, however, as previously noted, was primarily directed against an interpretation that an indefinite future failure of issue was intended. Shannon v. Union Planters National Bank, 537 S.W.2d 919, 922 (Tenn. 1976).

There is strong authority in this jurisdiction, supported by a great number of cases, to the effect that where there has been a devise or gift of property to take effect immediately, with a gift over on the contingency of the first taker’s death without issue, the reference is to death during the lifetime of the testator or grantor, absent a contrary intention from the language of the instrument or circumstances surrounding its execution. See, e. g. Shannon v. Union Planters National Bank, supra; Martin v. Taylor, 521 S.W.2d 581, 584 (Tenn.1975); Vickers v. Vickers, 205 Tenn. 86, 325 S.W.2d 544 (1959); Lones v. Winzer, 486 S.W.2d 758 (Tenn.App.1971). Because of basic differences between the two documents, this rule has been more frequently applied in cases of wills than of deeds, but we know of no rule of law or policy which would prevent its application in the interpretation of a deed. It was discussed in the cases of Templeton v. Strong, 182 Tenn. 591, 188 S.W.2d 560 (1945) and Moore v. Stanfill, 44 Tenn.App. 217, 313 S.W.2d 486 (1957), both involving deeds.

The trial court held from the language of the deed and the circumstances shown in evidence that the more probable intention of the grantors was that the time when the death of their daughter without issue would cause a reversion was during their lifetime, rather than upon her death thereafter. This conclusion could be supported by respectable authority even if the deed in question did not contain any reference to advancements. Without that language, in our opinion, a closer question would be presented. When all of the language of the grantors is considered, however, it seems clear to us that the interpretation given by the trial court is that which the grantors probably intended and is more consistent with the known facts and circumstances.

Petitioners do not take issue with the assertion of respondents that the deed to Mrs. Paisley in 1905 was intended by her parents as an advancement to her against her future inheritance. The language used leaves little doubt on that point, because the grantors placed a valuation on the property and directed that its value “shall be held against her . . . as a part of her interest in our estate . . . .” Identical language was used in the deed simultaneously executed to their son S. T. Collins, and, insofar as we can tell, was never revoked.

In the case of Johnson v. Patterson, 81 Tenn. 626, 632-33 (1884), the Court said:

“An advancement is defined by the authorities to be, ‘an irrevocable gift, by a parent, who dies afterwards intestate, of the whole or a part of what it is supposed the child will be entitled to on the death of the parent making the advancement:’ [citing cases]. A shorter definition is, a gift by a parent in presentí, of a portion or all of the share of his child in his estate which would fall to such child at the parent’s death by the statute of distribution or descent.”

Further, the Court said:

“In view of our statute law on this subject, as well as on sound principles, it is settled that when a gift is shown by parent to a child the presumption of law is that it is intended as a advancement— it is a prima facie case, [citation omitted] which means, that a case of advancement is fully made out, justifying or demanding a decree by a court to that effect until the contrary case is made out by a fair preponderance, that is, the proof shall show satisfactorily a contrary purpose.” 81 Tenn. at 633.

See T.C.A. §§ 31-701 to 705.

There is no question in the present case but that a gift in presentí was intended. The deed was either delivered when executed or, at the latest, when it was recorded in 1921. The grantee apparently went into possession and accepted the advancement.

Although petitioners place great emphasis upon the deed later given by the parents to their son in 1934, releasing the “restriction”, or reversion, it should be noted that at that time both parents and the grantee were still living. The reversion to them, or to the survivor of them, could not occur in any event until the death of the grantee. Their inter vivos release of the reversion was not inconsistent with an interpretation that the reversions called for in the 1905 deeds were to occur, if at all, only upon the death of the grantee prior to the last surviving parent.

The record contains almost no information concerning the estates of the parents. It is shown that they were survived by three children and that these children later sold, by six separate deeds, lands owned by their parents. Whether or not Mrs. Paisley accounted to her brothers for her advancement does not clearly appear. Obliquely, it may be inferred that such an accounting was waived or was only partly made, because she accepted a conveyance from one brother in 1950 and paid him the sum of one thousand dollars, having in mind the provisions of her parents’ deed to her and “out of deference to their wishes as expressed in the last paragraph of the deed aforesaid.

In the absence of any further information in the record, we must assume either that Mrs. Paisley did make an accounting to her brothers in the administration of her father’s estate or in the adjustment of the family property after her mother’s death, or that such an accounting was waived. In all events, it clearly appears that the grantors expected and directed that such an accounting should be made. As pointed out by the respondents in their brief, it would be a harsh provision if the grantee were required to account to the other heirs of the grantors for the value of the property received and still suffer a divestiture of title upon death without issue at some time thereafter. The requirement that the grantee account to the estate of her father or mother (the deed used the inexact phrase “our estate”) is consistent with an intention that the grantee not be required to forfeit the property after their deaths and that if the reversion to the parents were to take effect, it would do so only if the grantee died without issue before they died. It would revert to them (or the survivor) for redistribution in that event, but would not revert if the grantee survived and made an accounting (“collated” the advancement, T.C.A. § 31-702). Obviously if Mrs. Paisley had inherited the real estate from her parents by intestate succession, her title would not have been subject to a reversion; the 1905 deed, by its terms was intended to represent part of that inheritance and to advance it to her.

This provision of the deed distinguishes the present ease from many others relied upon by the petitioners where conveyances providing for a gift over or a reversion upon death without issue have been construed and interpreted.

The judgments of the trial court and the Court of Appeals are affirmed at the cost of petitioners. The cause will be remanded to the trial court for the entry of any further orders which may be necessary.

BROCK, C. J., FONES and COOPER, JJ., and HUMPHREYS, Special Judge, concur.

      . Referred to in the stipulation as being made in 1949.

      . A physician’s statement in the record dated March 29, 1977, showed that Mr. Collins was a resident of a nursing home, was physically unable to appear in court and had been in that condition for some four and one-half years. He died during the pendency of the appeal.

      . E. g., Teague v. Sowder, 121 Tenn. 132, 114 S.W. 484 (1908).

      . A gift of a contingent future interest generally does not qualify as an advancement. Thornton v. Thornton, 39 Tenn.App. 225, 282 S.W.2d 361 (1955).