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TEMTEX PRODUCTS, INC. v. CLEVE B. BROCK

MAY 18, 1983

TEMTEX PRODUCTS, INC.
v.
CLEVE B. BROCK, III a/k/a CLEVE B. BROCK and MRS. JACK (LIBBY) FORBES



BEFORE PATTERSON, ROY NOBLE LEE and ROBERTSON

ROY NOBLE LEE, JUSTICE, FOR THE COURT:

Temtex Products, Inc. (Temtex) filed suit in the Circuit Court of Rankin County, Mississippi, Honorable Henry Palmer, Special Judge, presiding, against Cleve B. Brock, III and Mrs. Libby Forbes, to enforce a default judgment rendered February 27, 1980, against them and Hearth and Homes Furnishings, Inc. (Hearth & Home), a Mississippi corporation, in the sum of $39,126.17 by the Second Circuit Court of Davidson County, Tennessee. The lower court entered judgment in favor of Temtex, against Cleve B. Brock, III, for the judgment amount, and in favor of Mrs. Libby Forbes that the Tennessee judgment was not entitled to full faith and credit as to her. Temtex has appealed and Brock has cross-appealed.

Temtex is a Texas corporation with its principal offices located in Nashville, Tennessee. The corporation manufactures prefabricated fireplaces. Prior to February 27, 1980, Hearth & Home, with offices located in Pearl, Mississippi, and at the Jackson Metrocenter Mall, was engaged in the business of selling and installing fireplaces and stone facings. Brock owned twenty percent (20%) of the corporation stock and served as president and director. His sister, Mrs. Libby Forbes, owned sixty percent (60%) of the stock and served as secretary-treasurer and director, although she did not take an active part in the business. The corporation has been adjudged bankrupt and is no longer in existence.

 In the latter part of 1975, a salesman from Temtex began calling upon Brock, who was operating the corporation, and in early 1976, after several contacts by Temtex with Hearth & Home, the latter corporation decided to carry the line of products offered for sale by Temtex, and Brock gave it an order. Those transactions occurred in the Pearl, Mississippi, office of Hearth & Home. Several months later, Temtex invited Brock to visit the Temtex company at Nashville for the purpose of inspecting the factory and meeting other distributors. This was Brock's only visit to Tennessee and

 while there, no goods were purchased, no contracts or personal guarantees for credit were executed, and no financing was discussed. At that time, the parties operated on a 30-day open account basis.

 The suit in Davidson County, Tennessee, after stating the claim of Temtex against Hearth & Home, charged that Brock and Mrs. Forbes, the individual defendants, negotiated with Temtex for services to be rendered to Hearth & Home; that, in order to induce Temtex to render such services, and to extend credit to Hearth & Home, the defendants entered into a general and unlimited guarantee to pay any indebtedness incurred by Hearth & Home; and that the individual defendants were liable for the amount of $31,882.63 owed by Hearth & Home.

 I.

 Did the evidence establish in personam jurisdiction over Mrs. Libby Forbes in the State of Tennessee under the long-arm statute of that state?

 The pertinent parts of the long-arm statute, Tenn. Code Ann. 20-2-214 (1980), which applies to this case, follow:

 (a) Persons who are nonresidents of Tennessee and residents of Tennessee who are outside the state and cannot be personally served with process within the state are subject to the jurisdiction of the courts of this state as to any action or claim for relief arising from: * * *

 (4) Entering into any contract of insurance, indemnity, or guaranty covering any person, property, or risk located within this state at the time of contracting;

 (5) Entering into a contract for services to be rendered or for materials to be furnished in this state; . . .

 The uncontradicted evidence reflects that Mrs. Forbes never signed the guaranty agreement and had never seen the instrument; that the signature was not hers; that she had never discussed such an agreement with Temtex or its representatives; and that she had never been in the State of Tennessee.

 In Galbraith and Dickens Aviation Ins. v. Gulf Coast Aircraft, 396 So. 2d 19, 21 (Miss. 1981), which involved the Oklahoma ...


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