# FILED March 27, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

JEAN PEELE, ) C/A NO. 03A01-9707-CV-00244 ) Plaintiff-A ppellant, ) KNOX CIRCU IT ) v. ) HON. DAL E C. WORKMAN, ) JUDGE RICH ARD M. EA RL, JR ., ) Indi vidu all y and d/b /a FI NANCIAL ) SERVICE S COMPANY, ) AFFIRMED ) AND Defendant-Appellee. ) REMANDED

SAMUEL W. BROWN , LOCKRIDGE, BE CKER & V ALONE, P.C., Knoxville, for Plaintiff-A ppellant. FARRELL A. LEVY a nd JAY W. MADER, MCDONALD, LEVY & TAYLOR, Knoxville, for Defendant -Appellee.

O P I N I

O N
Franks, J.
In this act

ion for debt, t

he Trial Judge, a

fter an evident

iary hear ing, dismissed the suit as to Richar d M. Earl, Jr.,

and entered judgment agai nst Financial Services Company in t

he amount of $5,000.00. Plaintiff has appe aled. Plaintiff br

ought the init

ial acti on in Sessions Court, wherein her stat

ed cause of a ction was :2 [For] $7,200.00 which re presents a debt of

a partnership Fi

nancial Services C ompany inc urred by M ichael B. M etzger, a partn er in this company, on beha lf of the partnership. M r. Earl is also a partner. We conclude after reviewing the narrati ve transcript

of the evidence and exhibits,that the evidence does not preponderat e against the Trial Judge’s findi ng that defen dant E arl was not liabl e to the p laintiff f or the d ebt. See T.R.A .P. Rule 13(d).

The record shows that pl aintiff engaged i n certain busi

ness dealings with Michael B. Metzger, who in some fas hion was involved with a t rust known as Financial Services Company, wherein defendant Earl acted as the Managing Trust Director. Metzger ’s dealings wit h the plainti

ff can be characteri

zed as a variati

on on a “Ponzi sc heme”. T he eviden ce prepon derates that M etzger wa s not autho rized to borrow any money on behal f of Financial Servi

ces Company or otherwise bind the compan y or Earl by signing or stampin g Earl’s nam e. In plaintiff’s relationship w ith Metzger, she wrote a check i n the amount of $5,000.00 pay able to Metzger on July 5, 1994. In re turn for this c heck, M etzger wro te a check in the amou nt of $6,00 0.00 to plaintiff on t

hat date. The check t

o plaintiff was dr

awn on Metzger’s personal account in his bank, and plaintiff’s $6,000.00 check was honored on Jul y 13, 1994. After Metzger’s check was honored, plaintiff wrote a second check to Metzger in t he amount of $6,000.00 on July 18, 1994. Metzger was about t o leave town and defendant Earl picked up the check for Metzger at plaintiff’ s business. The chec k was deposited in Metzger’ s personal checki ng account the same day . In return f or that check, Metzger provided plaintiff with hi s personal check post -dated August 8, 1994, in the amount of $7,200. 00. When plaintiff negotiated tha t check, however, i

t was returned not pai

d as the result

of insufficient

funds. When this occurr ed, Metzger issued plaint

iff and her husband a le tter in t he form of a promissory note for $7,200.00 at 12% i nter est, date d Sept

ember 29, 19 94. The note

was si gned by

Michael B. Metzger, who identifi

ed himself on the not

e as Trust Direct

or/Financial

Services3

Company. At this j uncture, we note t hat defendant Earl t

estified t hat Metzger was not authorized to r

epresent the company

in that capaci

ty, and t hat any document purporting to a

uthorize Metzger t

o act was forged. The Trial Judge evidently

accepted Earl’s test

imony as true

on this issue . Metzger then left town and failed to make good on the check or promiss ory note. Subsequently, Earl signed a check dr

awn on Financial Servi

ces Company in the amount of $200. 00 to plainti ff for “interest on Metzger’s loan”. Ear

l also test

ified that ne

ither Financi al Services Company nor himself rec eived the m oney obtaine d by Metzg er or benef itted from th e transaction in any way, nor did Financial Serv ices guarantee the loan m ade by Metzger.

The evid ence as de monstrated by the check s and othe r docum ents, is that the tr

ansactions were bet

ween the plainti

ff and Metzger individual ly, and plaintiff has esta blished no bas is to hold defen dant E arl perso nally liable for thes e transa ctions.

As best we can tell fr

om the record, it

was plaintiff’ s theory bel ow that Earl w as a par tner of M etzger in a partne rship kn own a s Finan cial Serv ices Co mpan y. The evidence establi shes there was no part nership operati

ng under this name or t

hat Metz ger and Earl w ere part ners.

Plaintiff ar

gues that Earl i s liable underT.C.A. §48-12-104 for precorporation t

ransactions. The record does not est ablish that

this theory

was advanced below, bu t in any event, the evidence does not e stablish a bas is to hold Ea rl liable under t his prov ision of the Co de.

Finally , plainti

ff argues that she should have been awarded $7,200. 00 plus interest ag ainst the rem aining def endant. W e find this issu e to be with out merit from the evidence in t

he record. Accordingly,we affirm the judgment of t he Trial Court wit

h costs of the appeal asse ssed to app ellant.4 __________________________ Herschel P. Franks, J.
CONCUR:

___________________________ Don T. McM urray, J.

___________________________ William H. Inman, Sr.J.