Roberts v. Iddins, 77

Decision Date03 May 1990
Docket NumberNo. 77,77
Citation797 S.W.2d 615
PartiesDavid W. ROBERTS and wife Ruth Anne Roberts, and Jane Adele Roberts, and John F. Hueffner, Plaintiffs-Appellees, v. Bart IDDINS and Clayton Pangle, Defendants-Appellants. 797 S.W.2d 615
CourtTennessee Court of Appeals

James H. Harris, Arnold, Winfrey, Simpson & Harris, Loudon, for defendants-appellants.

Richard K. Evans, Kingston, for plaintiffs-appellees.

OPINION

FRANKS, Judge.

In this action, the chancellor entered judgment for plaintiffs against defendants on the basis they were acting as plaintiffs' agents for the purchase of stock. We affirm.

In 1985, Robert Foster owned all of the stock in two Loudon County restaurants: the corporations were the Pier House and the Mountainview Farm. Foster experienced financial problems and decided to increase his capital through outside investors. Foster asked Clayton Pangle, a member of the local Chamber of Commerce to assist in drafting a concept summary to entice new investors. The concept summary stated that all of the Mountainview stock would be transferred to the Pier House to form a single corporation and that 20 shares would be available to new investors, who would be limited to 5 per cent ownership at $10,000.00 each. Foster would retain 50 per cent of the corporate stock but corporate control would expand by inclusion of new board members. The concept summary included a statement that investors should not purchase shares unless they could bear to lose their entire investment.

David Roberts met Pangle and Pangle's close business associate Bart Iddins in 1985. Roberts had planned to move from Ohio to Tennessee and was investigating investment opportunities in the Loudon County area. Pangle visited with Roberts and his family in the spring of 1986 in Ohio and Roberts and his family invested $20,000.00 by writing checks to Roberts. David Roberts gave the checks from the family to Pangle to purchase stock. Roberts placed a restrictive endorsement on the back of the checks to indicate the money was "for deposit only to MFR, Inc." 1 Roberts testified that he had not met Foster at that time but later received promissory notes from Foster as a "receipt" of the payments for the shares. There is conflicting testimony about whether Roberts told Pangle and Iddins that the money should be applied solely to fund the new corporation or to pay for capital improvements on the restaurants before the new corporation was formed.

Foster endorsed the checks over to M & B Construction, operated by Pangle and Iddins, to make repairs to the restaurants. Roberts relied on Pangle and Iddins, who worked very closely together, to purchase the stock for the Roberts' family in their absence. Roberts' demands to receive the stock were not met and ultimately Foster declared bankruptcy. A single corporation was never formed and no stock was ever issued.

At trial, the chancellor determined defendants did not engage in unethical or illegal conduct but found defendants expressly agreed to deliver plaintiffs' money in exchange for stock. They acted in concert and the promissory notes were never intended to substitute for stock and could not be so construed under the concept summary. He concluded defendants as agents breached their duty to plaintiffs and entered judgment for the $20,000.00 invested.

First on appeal, defendants argue it was error for the chancellor to allow plaintiffs to amend their pleadings to allege breach of contract. Tenn.R.Civ.P. 15.01 allows amendment of pleadings with the leave of the court which is to be freely given when justice requires. We conclude the amendment was not prejudicial to the defendants. While they allege they could have challenged the timing of Pangle's visits to Ohio and proved his representations were made after Roberts' family had already invested, the essence of plaintiffs' complaint is not that Pangle urged them to invest in the spring of 1986 but that pl...

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13 cases
  • Stewart v. Sewell, No. M2003-01031-COA-R3-CV (TN 4/14/2005)
    • United States
    • Tennessee Supreme Court
    • April 14, 2005
    ... ... 1977); Turner v. Leathers, 232 S.W.2d 269, 271 (Tenn. 1950); Roberts v. Chase, 166 S.W.2d 641, 650 (Tenn. Ct. App. 1942). It is not merely a relationship of mutual ... See Knox-Tenn Rental Co. v. Jenkins Ins., 755 S.W.2d 33, 36 (Tenn. 1988); Roberts v. Iddins 797 S.W.2d 615, 617 (Tenn. Ct. App. 1990) ...         The burden of proof regarding a ... See York v. Georgia-Pacific Corp., 585 F.Supp. 1265, 1276-77 (D.C. Miss. 1984) (permitting suit by the grantor or his heirs to bring an action to rescind a deed ... ...
  • Ralston v. Hobbs
    • United States
    • Tennessee Court of Appeals
    • January 25, 2010
    ... ... Id. (citing Roberts v. Iddins, 797 S.W.2d 615 (Tenn.Ct.App.1990); Knox-Tenn Rental Co. v. Jenkins Ins., Inc., 755 ... ...
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    • U.S. District Court — Western District of Tennessee
    • January 4, 2011
  • Conkin v. Mett
    • United States
    • Tennessee Court of Appeals
    • December 17, 2015
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