                IN THE COURT OF APPEALS OF TENNESSEE

                                                     FILED
THE COPPER CELLAR CORPORATION,   )   C/A NO. 03A01-9607-CV-00239
                                 )                   April 29, 1997
     Plaintiff-Appellant,        )
                                 )                   Cecil Crowson, Jr.
                                 )                   Appellate C ourt Clerk
                                 )   APPEAL AS OF RIGHT FROM THE
v.                               )   KNOX COUNTY CIRCUIT COURT
                                 )
                                 )
                                 )
JOHN F. MILLER,                  )
                                 )   HONORABLE WHEELER A. ROSENBALM,
     Defendant-Appellee.         )   JUDGE




For Appellant                         For Appellee

DUDLEY W. TAYLOR                      EDWIN L. TREADWAY
DAVID H. JONES                        MARK S. DESSAUER
The Taylor Law Firm                   Hunter, Smith & Davis
Knoxville, Tennessee                  Kingsport, Tennessee




                            OPINION




AFFIRMED AND REMANDED                                           Susano, J.

                                 1
            The Copper Cellar Corporation (Copper Cellar)1 sued

John F. Miller (Miller)2 to recover the proceeds from a $550,000

cashier’s check that Copper Cellar had originally delivered to a

financial advisor, Joseph C. Taylor (Taylor), for investment

purposes.    Rather than investing the corporation’s funds, and

unbeknownst to Copper Cellar, Taylor negotiated the check, which

was payable to Taylor’s company, to Miller.              The trial court

granted Miller summary judgment, rejecting Copper Cellar’s

theories of recovery against him.            The corporation appealed,

raising various issues.       We affirm.



                                  I.   Facts



            The material facts are undisputed.3           Between August,

1994, and November, 1995, Miller made numerous investments

through Taylor.     One transaction took place on October 11, 1995,

when Miller gave Taylor $2,000,000 to purchase bonds that were,

according to Taylor, scheduled to mature eight days later.                 In

subsequent meetings, Taylor informed Miller that there would be a

delay in securing the proceeds from the sale of the bonds.

Taylor finally promised that he would pay Miller $2,000,000 on

November 2.




      1
       This suit was filed by Copper Cellar and a second plaintiff, Kenneth R.
Davis. Davis initially appealed the trial court’s adverse decision as to him,
but later dismissed his appeal.
      2
       The estate of Joseph C. Taylor was originally named as a defendant.
The plaintiffs subsequently took a voluntary non-suit as to the estate.
      3
       Copper Cellar argues in its reply    brief that there are disputed facts
making summary judgment inappropriate.     It relies upon the affidavit of its
president, Mr. Chase. We disagree. In      reaching our conclusions in this case,
we have assumed that all of the factual    statements in Mr. Chase’s affidavit
are true.

                                       2
          In the meantime, Taylor spoke with Michael D. Chase

(Chase), President of Copper Cellar, and recommended that the

corporation purchase some stock options.       Chase agreed to

purchase the stock options and delivered to Taylor a cashier’s

check in the amount of $550,000.       The cashier’s check reflects

Copper Cellar as the remitter and is payable to “Taylor and

Associates.”



          On November 2, 1995, Taylor delivered eighteen

cashier’s checks, including the one from Copper Cellar, to

Miller, ostensibly in payment of the bond investment and other

debts.   In his deposition, Miller testified that Taylor explained

that the cashier’s checks were “cash”, and that Taylor needed

only to endorse them to transfer that “cash” to Miller.       Taylor

then endorsed the checks, and Miller deposited some of the

checks, including the cashier’s check from Copper Cellar, in his

savings account.



          At the time of these transactions, Miller had never

been involved in any business or other dealings with Copper

Cellar or Mr. Chase.   Miller and Chase did not know each other.

In his affidavit, Miller states that he was unaware of any

investment relationship between Copper Cellar and Taylor.



          Taylor committed suicide on November 3, 1995.       Copper

Cellar, not having received its stock options, shortly thereafter

filed suit against Miller, seeking to recover its $550,000, as

well as treble damages for Miller’s alleged inducement of breach

of Copper Cellar’s contract with Taylor.       After the trial court


                                   3
granted Miller summary judgment, Copper Cellar appealed,

advancing the following theories of recovery: fraud and

conspiracy to defraud; conversion; unjust enrichment;

constructive trust; resulting trust; inducement to breach

contract; and liability under T.C.A. § 35-2-104.



                       II.   Elkins v. Miller



          The facts in this case are similar to the facts in the

recently-decided case of Elkins v. Miller, C/A No. 03A01-9607-CV-

00227, 1996 WL 599704 (Tenn. App., E.S., filed October 21, 1996,

Inman, Sr. J.), perm. app. denied by Supreme Court.     In that

case, the plaintiff Harold E. Elkins sued the same defendant,

Miller, under similar theories, seeking to recover an amount he

had remitted to Taylor in the form of three cashier’s checks.     As

in the instant case, the cashier’s checks at issue were obtained

by Taylor for the stated purpose of investing the money on behalf

of Elkins, but were instead delivered over to Miller.



          The plaintiff in Elkins sought recovery on the theories

of, among other things, conversion, unjust enrichment, and

constructive trust.    As in the instant case, Miller’s motion for

summary judgment in the Elkins case was granted.    The only

significant factual difference between the two cases is that the

cashier’s checks in the Elkins case were payable directly to

Miller, while in the instant case the cashier’s check was payable

to Taylor’s company.




                                  4
                       III.   Standard of Review



          We review the trial court’s grant of summary judgment

against the standard of Rule 56.03, Tenn.R.Civ.P., which provides

that summary judgment is appropriate where



          the pleadings, depositions, answers to
          interrogatories, and admissions on file,
          together with the affidavits, if any, show
          that there is no genuine issue as to any
          material fact and that the moving party is
          entitled to a judgment as a matter of law.



Since the material facts are not in dispute, our review only

involves a question of law, and therefore no presumption of

correctness attaches to the trial court’s judgment.     Gonzales v.

Alman Constr. Co., 857 S.W.2d 42, 44 (Tenn. App. 1993).



          In view of the striking similarities between the

instant case and Elkins, we find that Copper Cellar’s theories of

recovery common to both cases are controlled by Elkins.

Accordingly, we hold, based on Elkins, that the trial judge was

correct in granting Miller summary judgment as to Copper Cellar’s

theories of conversion, unjust enrichment, and constructive

trust.   These three theories were advanced by the plaintiff in

Elkins and rejected by the holding in that case.



           Copper Cellar’s remaining theories of recovery were not

addressed in Elkins.    We will discuss each in turn.




                                   5
                 IV.   Fraud and Conspiracy to Defraud



          Copper Cellar contends the facts show that Miller is

guilty of fraud or conspiracy to defraud.     It insists that,

because of the designation of Copper Cellar as remitter, and the

fact that Miller was aware that Taylor was in the investment

business, Miller either knew or should have known that Copper

Cellar had furnished the cashier’s check to Taylor for investment

purposes only.    Copper Cellar argues that this “uncontroverted

evidence” establishes that Miller knowingly participated in

Taylor’s fraudulent activity.



          The elements of fraud are: 1) an intentional

misrepresentation as to a material fact; 2) knowledge of the

representation’s falsity; 3) that the plaintiff reasonably relied

on the misrepresentation and suffered damage; and 4) that the

misrepresentation relates to an existing or past fact.     Oak Ridge

Precision Indus. v. First Tennessee Bank, 835 S.W.2d 25, 29

(Tenn. App. 1992); Stacks v. Saunders, 812 S.W.2d 587, 592 (Tenn.

App. 1990).   A conspiracy by two or more persons to defraud



          means a common purpose, supported by a
          concerted action to defraud, that each has
          the intent to do it, and that it is common to
          each of them, and that each has the
          understanding that the other has that
          purpose.



Dale v. Thomas H. Temple Co., 208 S.W.2d 344, 353-54 (Tenn.

1948).




                                   6
            We believe that the facts before us suggest neither

fraud nor conspiracy to defraud on the part of Miller.    It is

clear that Miller made no representations, false or otherwise, to

Copper Cellar.    Oak Ridge, 835 S.W.2d at 29; Stacks, 812 S.W.2d

at 592.    Furthermore, there is no proof of any “common purpose”

or “concerted action to defraud” involving Miller and Taylor.

Dale, 208 S.W.2d at 353-54.    In short, there is no evidence to

allow even an inference of fraudulent intent on the part of

Miller.    Id.



            The fact that Miller knew that Taylor was in the

business of investing other people’s money does not charge him

with knowledge of the nature of every transaction conducted by

Taylor.    By the same token, the designation of Copper Cellar as

remitter on the cashier’s check is of little consequence.      Taylor

told Miller that the cashier’s checks, including the one from

Copper Cellar, were “cash” that belonged to Taylor, and that once

Taylor endorsed the checks, they would be Miller’s.    None of the

checks reflect that Taylor’s right to the funds was conditional

or otherwise restricted.    Copper Cellar, as the remitter,

certainly had the wherewithal to indicate on the face of the

instrument any desired restrictions on its negotiability.      It

made no such effort.    For all that Miller knew, the Copper Cellar

check simply represented payment due Taylor in his individual

right.    Miller had no knowledge, or reason to know, that Taylor

could not dispose of that “cash” as he saw fit.



            Copper Cellar relies on the case of Dale v. Thomas H.

Temple Co., 208 S.W.2d 344 (Tenn. 1948).    We do not find Dale


                                  7
applicable.   In that case, the court found that a preponderance

of the evidence “disclosed a knowing and intentional

participation” of the alleged co-conspirators with those who

perpetrated the actionable fraud.       Id. at 353.   In the instant

case, there is no evidence or reasonable inferences from proven

facts to indicate that Miller was aware of Taylor’s fraudulent

investment activities.    We do not agree with Copper Cellar’s

assertion that it is a reasonable inference from the proof “that

the money . . . Taylor remitted to [Miller] by virtue of the 18

cashier’s checks, was money that . . . Taylor diverted from other

individuals.”    As pertinent to this case, Taylor gave Miller a

cashier’s check that was payable, without condition or

restriction, to Taylor.    There was nothing about the check to

indicate that the funds represented by it did not belong

absolutely to the payee, Taylor.        The fact that an individual

handles investments for others does not mean that he or she

cannot possess his or her own funds.        Handling money for others

and participating in investments or “deals” for one’s own account

are not mutually exclusive concepts.



          Given the foregoing, we find that Miller was entitled

to summary judgment as to Copper Cellar’s theories of fraud or

conspiracy to defraud.



                          V.   Resulting Trust



          Copper Cellar next contends that a resulting trust

should be imposed for its benefit on the $550,000 in Miller’s

possession.     A resulting trust is a judge-formulated means by


                                    8
which the court may “reach an interest in property belonging to

one person yet titled in and held by another.”    Wells v. Wells,

556 S.W.2d 769, 771 (Tenn. App. 1977).   This court has cited with

approval the definition of a resulting trust found in Gibson’s

Suits in Chancery, § 382 (Inman, 7th ed. 1988):



          Resulting trusts are those which arise where
          the legal estate is disposed of, or acquired,
          without bad faith, and under such
          circumstances that Equity infers or assumes
          that the beneficial interest in said estate
          is not to go with the legal title. These
          trusts are sometimes called presumptive
          trusts, because the law presumes them to be
          intended by the parties from the nature and
          character of their transactions. They are,
          however, generally called resulting trusts,
          because the trust is the result which Equity
          attaches to the particular transaction.



Id.   (Emphasis in original).   See Estate of Wardell ex rel.

Wardell v. Dailey, 674 S.W.2d 293, 295 (Tenn. App. 1983).



           Proof of a resulting trust must be “clear, cogent and

convincing.”   Bowman v. Bowman, 836 S.W.2d 563, 570 (Tenn. App.

1991)(quoting Sanderson v. Milligan, 585 S.W.2d 573, 574 (Tenn.

1979)); see also, Estate of Wardell, 674 S.W.2d at 295 (“[a

resulting trust] must be sustained by proof of the clearest and

most convincing character.”).



           Copper Cellar relies primarily on the case of Sliger v.

Sliger, 105 S.W.2d 117 (Tenn. App. 1937).    In that case, a

borrower violated his agreement with a bank by loaning part of

the loan proceeds to a third party who had earlier been refused a

loan by the same bank.   The court imposed “a constructive or

                                  9
resulting trust” on a mortgage that the third party had made to

the borrower as security for the unauthorized loan.   Id. at 120.



            Copper Cellar insists that, as in the Sliger case, a

resulting trust should be imposed on the funds in question.       We

do not agree.    The trust in Sliger was imposed on a mortgage that

was executed by the third party to the defendant in that case.

In other words, the mortgage existed for the benefit of the

defendant, who had violated his loan agreement.    We view these

circumstances as very different from those in the instant case.

Specifically, the funds on which Copper Cellar seeks to impose a

resulting trust were transferred to a third party, Miller.      Once

Taylor negotiated the cashier’s check to Miller, the former lost

ownership interest in those funds.    In contrast, the borrower in

the Sliger case, as mortgagee, continued to own an interest in

the wrongly-obtained funds, upon which the court imposed a trust.

Therefore, by imposing a trust on the mortgage, the court reached

an interest still owned by the guilty party.    In the instant

case, Copper Cellar would have the court impose a resulting trust

on funds that no longer belong to Taylor, the perpetrator of the

fraud.   Because of this distinction, we believe that Sliger does

not control the result in the instant case.



            Furthermore, resulting trusts are generally imposed

only “in accordance with the actual or assumed intention of the

parties.”    Burleson v. McCrary, 753 S.W.2d 349, 352-53 (Tenn.

1988).   Nothing in the record indicates that the parties intended

to create any kind of trust.    It appears that Miller had no

intention other than to recover his investment and other funds

                                 10
that Taylor owed him.   We therefore hold that this case does not

involve the proper circumstances for the imposition of a

resulting trust.



               VI.   Inducement to Breach Contract



          As a third theory of recovery, Copper Cellar argues

that Miller’s actions constitute an unlawful inducement to breach

contract under T.C.A. § 47-50-109, which provides as follows:



          It is unlawful for any person, by inducement,
          persuasion, misrepresentation, or other
          means, to induce or procure the breach or
          violation, refusal or failure to perform any
          lawful contract by any party thereto; and, in
          every case where a breach or violation of
          such contract is so procured, the person so
          procuring or inducing the same shall be
          liable in treble the amount of damages
          resulting from or incident to the breach of
          the contract. The party injured by such
          breach may bring suit for the breach and for
          such damages.



Copper Cellar argues that an agency relationship, and therefore a

contract, existed between it and Taylor, and that Miller

knowingly induced a breach of that contract by accepting the

cashier’s check from Taylor.



          The elements of a cause of action for inducement to

breach a contract are: 1) that there was a legal contract; 2)

that the wrongdoer had sufficient knowledge of the contract; 3)

that the wrongdoer intended to induce its breach; 4) that the

wrongdoer acted maliciously; 5) that the contract was breached;

6) that the act complained of was the proximate cause of the


                                11
breach; and 7) that damages resulted from the breach.    Campbell

v. Matlock, 749 S.W.2d 748, 751 (Tenn. App. 1987); TSC Industries

v. Tomlin, 743 S.W.2d 169, 173 (Tenn. App. 1987).



          Even assuming the existence of a contract between

Copper Cellar and Taylor, there is no evidence of several of the

other necessary elements.   As stated earlier, Miller was unaware

of any investment relationship between Copper Cellar and Taylor.

The mere designation of Copper Cellar as the remitter of the

cashier’s check is insufficient to establish such knowledge.

Furthermore, there is absolutely no evidence of malice or of any

intent on the part of Miller to induce a breach of contract.

Again, it seems clear that Miller was simply attempting to

recover money that he had invested with Taylor.   Thus, Copper

Cellar’s claim of inducement to breach its contract fails as a

matter of law, and we hold that the trial court properly granted

Miller summary judgment as to that theory.



                     VII.   T.C.A. § 35-2-104



          Finally, Copper Cellar contends that Miller is liable

to it under T.C.A. § 35-2-104, which provides:



          If any negotiable instrument payable or
          endorsed to a fiduciary as such is endorsed
          by the fiduciary, or if any negotiable
          instrument payable or endorsed to the
          principal is endorsed by a fiduciary
          empowered to endorse such instrument on
          behalf of the principal, the endorsee is not
          bound to inquire whether the fiduciary is
          committing a breach of the fiduciary’s
          obligation as fiduciary in endorsing or
          delivering the instrument, and is not
          chargeable with notice that the fiduciary is

                                12
           committing a breach of the obligation as
           fiduciary unless the endorsee takes the
           instrument with actual knowledge of such
           breach or with knowledge of such facts that
           the action in taking the instrument amounts
           to bad faith. If, however, such instrument
           is transferred by the fiduciary in payment of
           or as security for a personal debt of the
           fiduciary to the actual knowledge of the
           creditor, or is transferred in any
           transaction known by the transferee to be for
           the personal benefit of the fiduciary, the
           creditor or other transferee is liable to the
           principal if the fiduciary in fact commits a
           breach of the obligation as fiduciary in
           transferring the instrument.



(Emphasis added).



           We acknowledge that the cashier’s check in this case

constitutes a negotiable instrument that was payable to Taylor,

Copper Cellar’s fiduciary.     However, T.C.A. § 35-2-104 only

applies to negotiable instruments “payable or endorsed to a

fiduciary as such.”   Id.     (emphasis added)   The cashier’s check

at issue here was made payable simply to “Taylor and Associates”.

It contained no reference to Taylor’s or Taylor and Associates’

status as a fiduciary of Copper Cellar.      Thus, T.C.A. § 35-2-104

is not applicable to the facts of this case, and Copper Cellar’s

claim under that provision is without merit.



                            VIII.   Conclusion



           For the foregoing reasons, we hold that the trial court

properly granted summary judgment to Miller as to Copper Cellar’s

theories of fraud, conspiracy to defraud, resulting trust,

inducement to breach contract, and liability under T.C.A. § 35-2-

104.   The remaining theories advanced by Copper Cellar are

                                    13
controlled by our decision in Elkins.    We find that Miller was

entitled to judgment as a matter of law under the standard of

Rule 56.03, Tenn.R.Civ.P.   The judgment of the trial court is

therefore affirmed.   Costs on appeal are assessed to the

appellant and its surety.   This case is remanded to the trial

court for collection of costs assessed there, pursuant to

applicable law.




                                     __________________________
                                     Charles D. Susano, Jr., J.



CONCUR:



________________________
Houston M. Goddard, P.J.


________________________
Don T. McMurray, J.




                                14
