author: CULLEN, Commissioner.

text:
    COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellant, v. E. R. DeHART et al., Appellees.
    Court of Appeals of Kentucky.
    Oct. 16, 1964.
    Rehearing Denied Jan. 22, 1965.

      John A. Breckinridge, Atty. Gen., William A. Lamkin, Asst. Atty. Gen., Frankfort, Walter Mobley, Dept, of Highways, Flemingsburg, Charles D. Kearns, Dist. Atty., Dept, of Highways, Frankfort, for appellant.
    O. F. Duval, -Olive Hill, for appellees.
   CULLEN, Commissioner.

The Commonwealth of Kentucky, Department of Highways, appeals from a judgment which “set aside and held for nought” a deed from E. R. DeHart and wife to the department, conveying the title to land in front of the DeHarts’ store building in the business section of the city of Olive Hill, as right of way for reconstructed U. S. Highway No. 60 and a sidewalk. The judgment was based upon the findings of an advisory, jury that the right of way agents of the department had “misrepresented” to the DeHarts that “the sidewalk would revert to them” and that the agents “gave the DeHarts the impression the sidewalks would be converted back to them.”

Prior to the execution of the deed U. S. Highway No. 60 ran through Olive Hill in front of the DeHarts’ store, apparently on an easement. The DeHarts had built a sidewalk between the store and the highway. In connection with a project for reconstruction and minor relocation of the highway the department obtained deeds from the abutting property owners, including the DeHarts. The deed from the DeHarts, for which the department paid a consideration of $666.20, conveyed title to a strip 26 feet deep, measured from the center line of the reconstructed highway. This included the sidewalk area.

After the deed was executed the highway and sidewalk were reconstructed. Two years elapsed. Then, in front of their store, the DeHarts erected an awning which extended over the sidewalk. The Federal Bureau of Public Roads discovered the awning, asserted that it was an encroachment on the right of way, and demanded of the Department of Highways that the awning be removed as a condition of payment by the Bureau of the federal government’s share of the cost of the highway project (around one million dollars). The department brought action against the DeHarts to compel them to remove the awning. The DeHarts counterclaimed for rescission of the deed. The judgment here appealed from was entered on the counterclaim.

The DeHarts asserted two grounds —mutual mistake or unilateral mistake and fraud — as a basis for rescission. It is our conclusion that even if it be considered that the testimony in support of either of these theories was clear and convincing (which is questionable), still this was not a proper case for rescission. A court of equity will not do the vain act of rescinding a deed when it is clear that the party seeking rescission will not be materially benefited. Likewise, a court of equity will not rescind where the equities do not lie with the movant.

Since the state possesses the power of condemnation, and in view of the position taken by the Bureau of Public Roads, it should be evident that the DeHarts will never be allowed to maintain their awning. The only benefit the DeHarts could obtain from rescission would be the right to re-litigate the question of damages in a condemnation suit with full knowledge that the taking of their property would mean that they could not use the awning. They have not alleged or shown that $666.20 was unfair consideration for the property conveyed (in fact, they originally offered to give the deed without payment).

Thus, the equity in the DeHart’s case is that they have not received compensation for whatever damage they will suffer if they are forced to remove the awning. We think that whether or not such damage would be compensable, it is overbalanced by the serious prejudice which would be suffered by the Commonwealth by the withholding of federal funds until the fee to the sidewalk area could be reacquired by negotiation or more likely condemnation.

It is our conclusion that the judgment granting rescission is erroneous.

We have chosen to dispose of this case on the equities without giving consideration to the serious question (not raised in the pleadings or in briefs) of whether the doctrine of sovereign immunity would bar the DeHarts’ counterclaim. See Commonwealth, Department of Highways v. Davidson, Ky., 383 S.W.2d 346 (decided October 16, 1964).

The judgment is reversed with directions to enter judgment dismissing the counterclaim for rescission.

PALMORE, J.,

concurs in the result only, on the ground that under the principle of Foley Construction Company v. Ward, Ky., 375 S.W.2d 392, the state’s sovereign immunity applies to the claim for rescission of the deed.

      . The DeHarts have relied on constructive or unintentional fraud as distinguished from actual fraud. See Commonwealth v. Smith, 242 Ky. 365, 46 S.W.2d 474 (1923).


source: Caselaw Access Project

author: STEWART, Judge.

license: Public Domain

text:
    Marvin GRIFFEY et al., Appellants, v. BOARD OF EDUCATION OF WASHINGTON COUNTY, Kentucky, et al., Appellees.
    Court of Appeals of Kentucky.
    Nov. 6, 1964.
    Rehearing Denied Jan. 22, 1965.

      John C. Anggelis, Anggelis & Collins, Lexington, for appellants.
    Ben B. Fowler, Dailey & Fowler, Frankfort, for appellees.
   STEWART, Judge.

In this class action by appellants, who are four residents and taxpayers of Washington County, against appellees, Board of Education of Washington County and three members thereof, a declaration was sought to the effect that the board could not perform, and should be enjoined from performing, certain official acts. It is claimed the three members named in the complaint, who constitute a majority of the board, had become ineligible to hold their offices because they had committed acts which con= travened the provisions of KRS 160.180(1) (d) and (e), KRS 160.180(2) and (3) and KRS 61.080(1). The trial court dismissed the complaint This appeal followed.

This whole case is predicated upon the assumption that a member of a board of education vacates his office without any further action when he is guilty of conduct which violates the provisions of KRS 160.-180, noted above.

This Court has previously settled the question presented. The rule is firmly established that a public officer may not be ousted, or enjoined from the performance of his duties, except as the result of an action brought by a person who claims the office or, in the case of a state officer, in an ouster action brought by the Attorney General of the Commonwealth. See Kirwan v. Speckman, 313 Ky. 578, 232 S.W.2d 841; Salyers v. Lyons, 304 Ky. 320, 200 S.W.2d 749; Hermann v. Morlidge, 298 Ky. 632, 183 S.W.2d 807; Jones v. Browning, 298 Ky. 467, 183 S.W.2d 38.

These holdings are based on Section 480 et seq. of the old Civil Code of Practice. These sections have been transferred into what is now KRS Chapter 415 without any change of their provisions.

The case of Salyers v. Lyons, supra, involved the same question as that raised in the instant case. There the Board of Education of Lawrence County, acting pursuant to the language of KRS 160.180(2), declared the office of Salyers, one of its members, vacant and in his place appointed Lyons. In an action brought to test Lyons’ right to the office, this Court, in nullifying the action taken by the board, stated that, under the circumstances, Salyers could be ousted only by an action prosecuted by the Attorney General, as he was classified as a state officer.

Appellants maintain Commonwealth ex rel. Breckinridge v. Collins, Ky., 379 S.W.2d 436, and Douglas v. Pittman, 239 Ky. 548, 39 S.W.2d 979, uphold their right to resort to a declaratory action to oust a member of a board.of education from office, or restrain such an officer from acting, without the necessity of the Attorney General or the claimant bringing the suit.

The first case passed upon the sole question of whether a member of a board of education, within the purview of KRS 160.-180(1) (e) and KRS 160.180(2), had become ineligible to hold his office by reason of his acts in making certain sales to schools in his district. Furthermore, the action was instituted and prosecuted by the Attorney General. In the second case the question of whether any one but the Attorney General or the claimant has the right to maintain an ouster suit was not presented or decided.

It follows the complaint was properly dismissed.

Wherefore, the judgment is affirmed.


text:
    Orville FANNIN et al., Appellants, v. David L. DAVIS et al., Appellees.
    Court of Appeals of Kentucky.
    June 26, 1964.
    Rehearing Denied Dec. 18, 1964.
    As Modified Dec. 18, 1964.

      Jesse, K. Lewis, John C. Anggelis, Lexington, for appellants. ,
    J. Blaine G. Nickell, Nickell & Walter, West Liberty, William A. Young, Frankfort, Walter E. Mobley, Sandy Hook, D. B. Caudill, Morehead, Thomas D. Theo-bald, Jr., Grayson, for appellees.
   STEWART, Judge.

This is an appeal from a judgment of the Elliott Circuit Court. The action was filed by Orville Fannin, as a justice of the peace of Elliott County, suing as a member of the fiscal court on behalf of the county, and also suing as a citizen and taxpayer for the use and benefit of the county. He will be referred to as appellant.

The defendants, appellees herein, included former and then members of the Elliott Fiscal Court, namely, Delbert Kitchen, Lova Ison, Robert F. Miller, E. H. Maggard and Ray H. Binion, and their sureties; the county judge, David L. Davis, and his sureties; the county court clerk, Estill Hutchinson, and his sureties; the county treasurer, Mrs. Blanche Adkins, and her sureties; the county attorney, Virgil Redwine; the county jailer, Levi Wag-goner; and the sheriff, Bill Y. Manning.

A recovery of various sums was sought from these parties of county funds alleged to have been illegally paid out either to them or on their authorization. Thereafter, on August 31, 1955, Elliott County brought an action against Orville Fannin, as a justice of the peace, and his surety, to recover certain county funds alleged to have been illegally paid out on his authorization. These actions were consolidated. Whayne Supply Company and Peoples Bank of Sandy Hook were made third-party defendants, on motion of appellant.

In the judgment entered it was ordered that Estill Hutchinson, the county court clerk, refund $168 to the county; that this clerk also pay $125 to the county, which sum had been paid into county court by Virgil H. Redwine, the county attorney, ■ in the action against him;' and that as to all other parties named in the consolidated actions, the suit'be dismissed at the cost of appellant.

We believe it will be easier to relate the facts that pertain to each issue as it is separately discussed hereinafter, rather than undertake to make a general prefatory statement. One matter of general interest noted in appellees’ brief is that the average yearly gross revenue of Elliott.County for 1950 through 1953, the years in controversy, was $27,000. Appellant is attempting to recover an amount exceeding $122,146, which sum is roughly $19,000 in excess of the total income of Elliott County for this period of time.

The issues, as presented by appellant, are:

1. Did the trial court err in holding that the fiscal court had the right in October of- 1949 to' change the previous order of May, 1949, fixing the salaries of the county officers for the ensuing term?

The trial judge found as a fact that during Octpber, 1949, the fiscal court caused its order of May 3, 1949, limiting maximum compensation of the county officials, to be amended on its face so as to increase the salaries of the county judge from $150 to $200 per month, of the county attorney from $125 to $200 per month, of the county court clerk from $12.50 to $25 per month, and of the jailer from $33.33 to $50 per month.

As to each of the officials named, the statutory provisions- then, as well as now, in effect required their salaries to be fixed not later than the first Monday in May in the year in which each of them was elected. See KRS 25.250, KRS 69.250 and KRS 67.-120(1), (1942 Edition).

There is no showing in the record of the reason for the payment of a salary to the jailer. We assume such an order was an. allowance-'of' compensation within the purview of KRS 67.130. If so, it was incumbent upon the fiscal court to fix the jailer’s annual salary at the same time the yearly income of other officials was established. See Perkins v. Cumberland County, 294 Ky. 737, 172 S.W.2d 651.

The attempt of the Elliott Fiscal Court to substitute a new salary schedule for the above four officials in October, after'their pay scale by the prior order of May had been set up in the manner required by law and had become binding by reason thereof, was a void act. See Stokely v. Fleming County Fiscal Court, Ky., 323 S.W.2d 844.

However, at a meeting of the Elliott Fiscal Court, held June 30, 1950, the compensation of the county judge was set at a maximum amount of $3600 per year, that of the county attorney at $2400 per year, that of the county court clerk at $600 per year, and that of the jailer at $600 'per year. These changes were authorized by an amendment to Section 246 of the Constitution of Kentucky, voted by the people at the general election in 1949, which made possible the payment of compensation not to exceed $7200 per annum to county officials. And the 1950 session of the General Assembly thereafter enacted legislation which provides that in each county the fiscal court prescribe by order the maximum compensation a county officer, who was in office June 30, 1950, may receive for the remainder of his term. See KRS 64.530(1), KRS 64.680.

The salary revision of the four officials, pursuant to KRS 64.530(1) and in conformity with the order of the fiscal court of June 30, 1950, was valid, but it did not become effective until July 1, 1950. As a result, there was a time lag of six months from. January 1, 1950, until June 30, 1950, during which time these officials were paid illegal sums by virtue of the void October, 1949, order.

It therefore follows that appellant may recover in behalf of Elliott County the sum of $300 from David L. Davis, the county judge, $450 from Virgil H. Redwine, the county attorney, $75 from Estill Hutchinson, the county court clerk, and $160.02 from Levi Waggoner, the jailer.

2. Did the trial court err in holding that appellant, representing the Elliott County taxpayers, was estopped to recover certain allowances made to the magistrates of Elliott County, all appellees herein?

During their term of office from 1950 through 1953, the five magistrates of Elliott County ordered the payment of certain claims to themselves, allegedly for work done and for supplies furnished to the county in connection with the roads and bridges. The specific amounts received during the years mentioned were $2620.34 by Magistrate Miller, $1084.82 by Magistrate Binion, $519 by Magistrate Ison, $276 by Magistrate Maggard, and $107 by Magistrate Kitchen.

In Trimble County by Shaver v. Moore, Ky., 275 S.W.2d 50, it was pointed out that KRS 61.210(1) forbids a magistrate from contracting with the fiscal court, of which he is a member, to do or supervise road work or furnish any material to the county for road or bridge improvement. All sums allowed as described were illegally received. Therefore, appellant is entitled to recover in behalf of Elliott County from each magistrate the amount of money paid each.

3. Did the trial court err in refusing to enforce the terms of KRS 68.300 in the face of facts showing that budgetary funds were exceeded in the total sum of $27,484.40?

The proof showed that, during the years 1950 through 1953, the fiscal court entered orders which directed the county court clerk to issue warrants in payment of all claims presented to him, without regard to the question of whether any warrant might overdraw the budgetary item or appropriation against which it was drawn.

On November 11, 1950, the fiscal court entered the following order relating to the 1950-51 budget:

“The court upon being informed by the clerk that certain funds of the 1950-51 general fund budget were already used so that no more warrants could be written without exceeding said funds:
“Now, therefore, on motion of Justice Ison and all justices present which is a majority agreeing it is ordered by the court that the said clerk is directed to write warrants for any claims that have been passed by said court or any claims in the future that may be passed regardless whether the budget is exceeded in that particular fund or not.” (Emphasis added.)

We do not find in the record a similar order for each of the three fiscal years thereafter; but it is undisputed the anticipated income of the county was overspent during the time periods involved in this litigation. Both the county court clerk and the county treasurer were charged with the duty of keeping accurate records of all transactions affecting the budget (KRS 68.-340(1) and KRS 68.340(2); and the county court clerk’s quarterly report (KRS 68.-370) and the county treasurer’s monthly report (KRS 68.360) fully apprised the members of the fiscal court at all times of the condition of the county finances. Thus, the members, under the facts shown, must be deemed to have wilfully exceeded the budget funds set up by the fiscal court for each of the four fiscal years involved. Therefore, to the extent these budget appropriations were overdrawn, such expenditures were illegal.

Who is liable to the taxpayers of Elliott County for these unlawful expenditures ? The answer to this question is clearly set forth in part in KRS 68.300, which reads: “Any appropriation made or claim allowed by the fiscal court in excess of any budget fund, and any warrant or contract not within the budget appropriation, shall be void. No member of the fiscal court shall vote for any such illegal appropriation or claim. The county treasurer shall he liable on his official bond for the amount of any county warrant willfully or negligently signed or countersigned by him in excess of the budget fund out of which the warrant is payable.”

When KRS 68.300 is applied to the facts stated Mrs. Blanche Adkins, the county treasurer during the period of time involved, must be deemed to be liable on her official bond for the amount of any county warrants willfully or negligently signed or countersigned by her in excess of the budget fund out of which the warrant was payable. See Breathitt County v. Cockrell, 250 Ky. 743, 63 S.W.2d 920, 92 A.L.R. 626.

In 43 Am.Jur., Public Officers, sec. 306, p. Ill, it is stated: “Public officers who have charge of public funds and public money are charged with the duty, as trustees, to disburse and expend the money for the purposes and in the manner prescribed by law”; and any public officer who authorizes the illegal disbursement of public funds is personally liable therefor. See 67 C.J.S. Officers § 118, pp. 409-410. See also KRS 68.110(3). If the county funds disbursed unlawfully by the members of the fiscal court cannot be recovered from the persons to whom these payments were made, then the members themselves will be liable, jointly and severally. We can perceive of no legal basis for imposing liability upon the county court clerk.

4. Did the trial court err in holding that the county treasurer was not liable for the payment, without an order of the fiscal court, of $27,286.90 in warrants from county funds from 1950 through 1954?

The practice adopted was that each year the fiscal court entered a blanket order directing the county court clerk to issue warrants when the fiscal court was not in session, upon the request of either the county judge or any one of the magistrates. This procedure was followed: No fee bills or written claims were presented (or at least such do not appear in the record) and no orders of the fiscal court were made authorizing any of these payments. Nor was any order later entered by the fiscal court ratifying any of these payments.

The argument made by the appellees who brought about these disbursements is that Elliott County, once having benefited from the expenditure of these funds, should not be permitted to recover any part of this same money. The difficulty we have in accepting this argument is that we have no evidence before us which in any respect informs us whether this money was spent, in the many instances testified to by the county court clerk, for a lawful county purpose.

In McKechnie v. Canada, 198 Ky. 807, 250 S.W. 111, this Court said: “[N]o valid appropriation can be made except by a majority of the members of the court acting together as a court, at a meeting held for that purpose.” See also McDonald’s Adm’x. v. Franklin Co., 125 Ky. 205, 100 S.W. 861; and Scoville v. Baugh, 27 Ky.Law Rep. 319, 84 S.W. 1146, which affirm this same principle.

In McDonald’s Adm'x. v. Franklin Co., cited above, a paper was signed by the county judge and the magistrates of Franklin County, who constituted its fiscal court, but not by them when the fiscal court was in regular session, directing the county court clerk to issue a warrant of $450 to one Pat McDonald. This was done. The acts of these officials were pronounced a nullity and the county was permitted to recover the amount of the warrant from the estate of Pat McDonald, who in the meantime had died. This Court there said:

“ * * * The fiscal affairs of the county are not, as seems to be supposed, confided to a certain number of magistrates, but are given solely to the fiscal court of the county (or to county commissioners, if the people of the county so elect). This tribunal acts as a body. It can only act at stated or called public meeting’s, at which a majority of the magistrates constituting it must be present, and a majority of those present concurring. (Citation omitted.) It must keep a record of its acts. It must show by whom it was holden, and be signed by its presiding officer, or its acts are null. * * * ”

It would seem the same liability would attach to the county treasurer and the members of the fiscal court in respect to these numerous invalid disbursements, as would attach in the case of claims allowed and paid in excess of the budget funds, set up for the years in question mentioned above. Recovery may also be had from the persons to whom the payments were made, if such is not barred by the applicable statute of limitations as was allowed by McDonald Adm’x v. Franklin Co., cited above.

Of course recovery may not be had, in respect to a particular item, against both the members of the fiscal court and the person, or persons, to whom the illegal payments were made.

5. Did the trial court err in its holding concerning the transfer of money from the sinking fund to the general fund?

At the beginning of 1950, Elliott County had outstanding two $1000 road and bridge bonds. A special tax levy of for sinking fund purposes to retire these bonds had been set up when the bonds were voted. These bonds were presented for payment and paid on October 5, 1955. Thereafter, the special levy was discontinued. Between January, 1950, and January, 1955, various sums totalling $8955.58 were transferred from the sinking fund to either the general fund or road fund. These transfers were tacitly approved by the fiscal court and all were acquiesced in by the county budget commission, although not ail of them were authorized by orders entered on the fiscal court order book.

KRS 68.290 sets forth the procedure which may be resorted to in shifting money from one budget fund to another, and; from a defunct sinking fund account to., one devoted to another legal county purpose. It reads:

“The fiscal court, subject to the approval of the county budget commission, may transfer money from one budget fund to another to provide for emergencies. The order of the fiscal court making the transfer shall show the nature of the emergency and the reason for making the transfer. Neither the fiscal court nor the commission shall have any power to transfer money from any sinking fund or special fund raised for a specific purpose until the obligation or purpose for which the fund was raised has been satisfied.”

We conclude the manner and form in which the transfers were made were neither in keeping with statutory requirements nor with good fiscal practices; however, since it appears from the fiscal court records that all of the moneys thus transferred were expended for legal purposes, in payment of just and proper items of indebtedness of Elliott County, we cannot say there was an unlawful diversion of the surplus withdrawn from the sinking fund.

The surplus remaining after the object of a levy has been accomplished is treated as a part of the general fund of the county, and becomes available for general county use, notwithstanding Section 180 of the Constitution of Kentucky, forbidding the diversion of taxes from the purposes for which they were levied. See KRS 68.120; Field v. Stroube, 103 Ky. 114, 44 S.W. 363, 19 Ky.Law Rep. 1751.

6. Did the trial court err in failing to hold members of the fiscal court liable for the loss of tax funds due to the fiscal court’s attempt to exonerate or correct certain assessments claimed to have been wrongfully made ?

The record shows that the fiscal court entered orders attempting to release certain named persons from the payment of taxes on property assessed to them. Since KRS 133.130 vests in the county court (our emphasis) exclusive authority to exonerate erroneous assessments, any orders of the fiscal court seeking to accomplish this result were null and void. The trial court concluded there was no basis for the imposition of individual liability upon members of the fiscal court who voted for the orders of exoneration.

We believe the members of the fiscal court did not become liable for their acts under the circumstances in diverting this money, $315 in amount, away from Elliott County, if in fact they did divert the money. Furthermore, it was not proven that the assessments which were exonerated were valid ones, and we are unable to assume that Elliott County lost any taxes by reason of voiding them.

7. Did the trial court err in holding the provisions of KRS 64.410(1) were directory only in respect to Bill Y. Manning, the sheriff ?

Appellant sought to recover $2640.27 from Bill Y. Manning, which sum represented the total of fees paid him as Elliott County sheriff from 1950 through 1953. It seems that written, but unsigned, fee bills were presented to the fiscal court for a portion of these fees; and that payment of the balance was made pursuant to the written direction of the county judge.

KRS 64.410(1) reads: “The fee-bills of every officer shall be made out at length, in figures and in plain English, and signed by the officer in his official capacity.”

Appellant cites Goodlett v. Anderson County, 267 Ky. 166, 101 S.W.2d 421, 425, where this Court said: “When a claimant has a claim qgainst a fiscal court, he must itemize it, and then point out the statutory provisions for its payment. He must be able to say, ‘Here’s the service, here’s the statute, now pay me.’ ” Appellant contends all the payments in question made to Manning were illegal, for the reason that this statute was not rigidly complied with, and should be recovered by Elliott County.

Appellees argue that the statute is “directory,” and we are inclined to accept this view. Generally, a statute is regarded as “directory” if it relates to some immaterial matter or if it does not reach the substance of the thing to be done and if, by an omission to observe it, the rights of those interested will not be prejudiced. See Middleton’s Adm’x v. Middleton, 297 Ky. 109, 179 S.W.2d 227. In Wait v. Southern Oil & Tire Co., 209 Ky. 682, 273 S.W. 473 it was pointed out that, ordinarily, the provisions of statutes outlining and prescribing the procedure to be followed by a public officer are considered and held to be directory.

In the present instance, there is neither argument nor proof that Manning received fees greater than or other than those allowable by law, or that he was paid fees for services not actually rendered by him. Only the method of collection is questioned here, and we believe the contention for a recoupment by Elliott County of the money paid him is without merit.

8. Did the trial court err in refusing to give a judgment against Peoples Bank of Sandy Hook for $12,000, allegedly borrowed from that bank by the fiscal court in violation of section 157 of the Constitution of Kentucky?

In 1954, the fiscal court, of which appellant was a member, voted to borrow $12,000 from this bank. The loan was made and a note executed. Before this suit was filed $8000 had been paid on the note. Appellant sued the bank for $12,000; the remaining $4000 was paid on the note during the pendency of the litigation. The trial court dismissed the action.

Appellant contends tliat such borrowing contravened the provisions of Section 157 of the Constitution of Kentucky, as it exceeded the limit of the county’s power to go into debt for that year; that such a transaction was void and unenforceable; and that under KRS 68.100(4), any money paid under any such contract may be recovered by the county.

The bank relies upon George A. Eyer & Co. v. Mercer County, D.C.Ky., 292 F. 292, which was an action to recover $50,000 loaned to a county and evidenced by a note. Recovery was allowed against the county, the court there saying: “Section 157 (of the Constitution of Kentucky) invalidates voluntary debts of a municipality. It has reference solely to such indebtedness. It has nothing to do with involuntary obligations created on the principles of unjust enrichment. In other words, it invalidates the note in suit if it comes within its prohibition. But the obligation of the defendant to return the money obtained from plaintiff upon the mistaken idea that it had the power to borrow it, on the principle of common honesty, is not within such prohibition. Municipalities as well as other artificial persons and real persons are subject to such principle.”

The taxpayers of Elliott County have not lost any money by the transaction between the county and appellee bank. The county used $12,000 of this appellee’s money for a lawful purpose, namely, for the purchase of the hereinafter mentioned road machinery. When it repaid the money, it was only doing what justice and equity required that it should do. Certainly the county should not prosper at this appellee’s expense.

9. Did the trial court err in refusing to grant a recovery of money paid to Whayne Supply Company for the purchase of road machinery?

In March, 1954, the fiscal court entered into a lease-purchase agreement with ap-pellee, Whayne Supply Company, for the acquisition of certain road machinery. The county thereafter exercised the option to purchase the equipment and paid $12,000 (nearly the full purchase price) and received delivery of the machinery in March, 1954. The machinery has been in constant use on the county roads since then. Appellant sued for the return of this money to the county, on the theory that the purchase contract was illegal because no advertisement for bids was made as provided in KRS 178.050 and because the machinery was not purchased from county road funds or from proceeds of bonds issued for that purpose as provided in KRS Chapter 179. Also, appellant claims the contract was never approved by the fiscal court.

If the purchase contract is held to be void, the lease contract would still be in' effect (Whayne Supply Co. v. I. H. Gregory, Ky., 291 S.W.2d 835) and all unpaid rent from 1954 to the present would be due, and appellee, Whayne Supply Company, would be entitled to possession of the equipment. Furthermore, KRS 179.180 allows the lease of machinery by a fiscal court without the requirement of a bid.

The trial judge correctly dismissed this action as to appellee, Whayne Supply Company.

Unquestionably duplications exist in the record of this case as to many items sought to be recovered in behalf of Elliott County. For instance, it is contended, during 1950 through 1953, the fiscal court disbursed $27,-484.40 in excess of the budget funds set up for the respective fiscal years, whereas, during that same period it is asserted $27,-286.90 of county money was paid out under the blanket orders we have held were void. If the latter sum should be recouped in full by the county, it might result that there would be no payments in excess of the budget funds chargeable against the fiscal court and the county treasurer, save for a nominal amount. Other amounts that are in controversy may also be included in these two sums.

We have no way of determining the correctness of the numerous payments argued, pro and con as to their validity, by the litigants. In our approach to this case we have striven to lay down general principles in respect to the facts as we interpret them. Therefore, we are remanding this case with .-directions that a thorough audit be made ■ of the fiscal years involved and that the • case be judicially reconsidered in the light of such an audit.

Wherefore, the judgment is reversed for ^consistent proceedings.


author: DAVIS, Commissioner.

text:
    COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellant, v. Drura O. SCOTT et al., Appellees.
    Court of Appeals of Kentucky.
    Nov. 20, 1964.
    John B. Breckinridge, Atty. Gen., Wm. A. Lamkin, Jr., Asst. Atty. Gen., Joyce

      Nedde, Frankfort, George S. Clay, Henderson, for appellant.
    William M. Deep, Henderson, for appel-lees.
   DAVIS, Commissioner.

In this condemnation proceeding the appellant Department of Highways is acquiring 0.8 of an acre from appellees’ tract, which consisted of 13.2 acres prior to. the taking. The Department appeals from the judgment entered on the jury’s verdict awarding total recovery of $7,550, itemized as $3,600 for the land taken, plus $3,950 for resultant damages. (This trial was before the decision in Com., Dept. of Highways v. Sherrod, Ky., 367 S.W.2d 844.)

Basically, the appellant attacks the judgment on the ground that it is not supported by evidence substantiating it. Other complaints are made relating to claimed error in admission of evidence and refusal of a tendered instruction.

The subject property is situated about 1¼ miles south of Henderson on the east side of U.S. Highway 41. For practical purposes, the original boundary may be described as a right-angled triangle, with its hypotenuse fronting ■ on U:S. 41,- and its base being its southern boundary. Before the taking the boundary had a frontage along existing -U.S. 41 for a distance of • about 1,800 feet. Former U.S. 41 is being changed from a two-way two-lane highway to a four-lane road, with median strip at a point along this frontage. In order to accommodate the added highway facilities the Department is acquiring an irregularly shaped strip along the front of the original tract. The acquired strip extends from the northern point of the original triangle, along the highway right of way, a distance of 1,166 feet. Its width is variable, beginning at zero on the north, widening to sixty feet as it courses soutíx-westwardly, and ultimately having a width of ten feet at its southern extremity. As noted, the taken area embraces 0.8 of an acre.

The proposed new U.S. 41 is to be a free access road. However, due to the narrow-tip of the triangle as it existed prior to the taking, the northernmost 130 feet of former frontage will be lost to the appellees.

Appellees have a substantial residence-situated upon the tract; there will be no-taking or change of condition with respect to the road at any point west of the residence. However, it appears that the residence does not face westwardly toward U. S. 41, but is so situated as to face generally toward the north — and, therefore, toward the site of the taken portion.

The extent of the divergence in the testimony offered by the litigants is summarized:

Witnesses for Appellant:

It will be seen from the foregoing that the witnesses for the appellant attributed no damages to the remaining land by reason of the taking. For the appellees damages were estimated to the remainder in sums ranging from $13,416.00 to $17,520.-00. As observed, the jury’s verdict for resultant damage was $3,950.00. The verdict, both with respect to value of land taken and resultant damage was well within the range of the testimony offered. No serious question is raised as to the verdict for $3,-600.00 for land taken. The chief complaint of appellant addresses itself to the verdict for resultant damage.

Appellant attacks the competency of the evidence for appellees as to resultant damages on the ground that the witnesses applied a hat percentage of reduction, e. g. 12% to 25%. We do not find this to be a valid complaint, since the witnesses did cast their testimony within the framework of' market values “before” and “after.”

However, we do regard as significant the basis upon which-the witnesses for appellees pitched their estimates of the resultant damages. For the- appellees it was shown that much care and considerable expense had gone into the matter of properly locating the residence upon the land. Ap-pellees showed that a substantial sum had been expended for landscaping and grading: in order that the residence and its appurtenant land would conform. It appears that the residence is so constructed and situated that its “picture” windows afforded a view toward the north, rather than toward the highway on the west. Witnesses for thé appellees asserted that impairment of the view is heavily damaging to the remaining land. The character of this type of evidence may be better tinderstood from some excerpts from the evidence of the witnesses for the appellees:

“39. Tell the Jury what in your opinion is the damages to the remainder as a result of this taking.
“A. I figured the damages to the remainder would be $10,234.37.
“40. Please explain to the Jury if you will what in your opinion are the elements that constitute this damage.
“A. Well, Mr. Scott’s house when it was originally built, I think, I verified this, it was designed by an architect and it was designed to look right down this strip of land down to the point and of course, we had dealings with an architect to design our shopping center and someone, we find out you pay the architect about five percent of the construction price ; this architect has designed this house around the land there to. make it look a certain way and I judge that an architect’s fee today on a house of that type would be seven or eight thousand dollars, and now when this tract of ground is gone from there you wouldn’t have no use to hire an architect if you later are not going to abide by .his decisions.”
* * * ¡ * *
“14. Do you think when you look out and see this highway rather than this one that it is going to cause you to say it has just ruined that view?
“A. I wouldn’t say it has completely ruined it, I would say it takes something away from the .view and from the dwelling.
“15. So your estimate of the damage to the remainder is based entirely, is it, upon the view out away from this house, is that the basis of your taking away from the remainder ?
“A. Well I say it detracts from the homesite and of course it will affect the landscaping, he will probably have to change the landscaping.
"16. Now is there any landscaping on this part of the tract at all?,
"A. I think there is about two trees.
'“17. Other than these trees down this old way or fence line, is there anything that he has done out there since he has been there to landscape this portion of the property ?
‘“A. I’d say he has spent a world of money getting that sod and grass.
“18. Well, are there any trees or landscaping on it?
'“A. No.
“19. Is there landscaping on the other property ?
“A. Yes sir.
“20. Is not the landscaping around the house and leads out to the road along the driveway and in front of the house and toward the road?
"A. Yes sir.
""21. So that that is where he has done his landscaping and beautified his place up there around his house and between his house and road, is that right?
“A. I’d say he has done a lot of dirt work on all of it to get it in shape to have the smooth lawn and sod he has.
“22. And as I understand your figure, you haven’t called attention to anything else except the change in the view and making it so that the house doesn’t fit right as being the basis for the damage to the remainder, is that right?
"“A. I would say one other factor, the fact that the highway will be some closer to his home.
“23. Well that all enters into the same thing?
“A. Correct.
“24. It won’t be any closer out here at the closest place?
“A. No, it won’t be.”

It should be stated that although appel-lee Drura Scott flatly said that he would not utilize his property for purposes of subdivision during his lifetime, he nevertheless premised his resultant damage figures on diminution of its adaptability for subdivision purposes. In his own words, his ideas are thus put:

“58. Now just review for the Jury what items of damage you considered as being incurred to your property as a result of this tak-. ing other than what you. have just discussed .there?
“A. Well, in case of my death and 'v my wife ever saw fit to want-'to build houses or :plat this thing •' out by taking this here,, it would run way up along here then before she could ' start anything, ■ and it just absolutely ruins this piece of ground as far as ever ■ doing anything With it ’ I don’t have any intention of 'doing it in ! my lifetime, 'but if'she ever did ■ take a notion.”

Moreover, in support of the acreage prices quoted for the land, appellee Scott and his witnesses referred to lots sold for subdivision purposes. The appellant made timely motions to strike the evidence relating to the resultant damage, primarily on the ground that it is inconsistent to ascribe damages for loss of an aesthetic panorama in one breath, while fixing lot values which presuppose building of dwellings which will effectively interrupt the same view. We agree with appellant’s position.

We believe it is apparent that the evidence offered for appellees as to resultant damages bears an ipso-facto stigma of being without sufficient probative value to warrant the conclusions expressed by the witnesses. There can be no question that it was- improper to allude to the expense of architectural planning as a premise for “after” market value. Neither may it be supposed that compensation may be had for impairment of the aesthetic appreciations of the appellees. We have no quarrel with the idea that impairment of appearance or outlook which affects market value is compensable. The difficulty before us arises from the fact that both “before” and “after” values of the land are based on use of the property as a developed subdivision. The subdivision would certainly materially disturb the view from the Scott residence, and substantially more than could the new highway construction. Under these conditions we hold that the present case is ruled by the precepts outlined in Com., Dept. of Highways v. Raybourne, Ky., 364 S.W.2d 814, and Com., Dept. of Highways v. Tyree, Ky., 365 S.W.2d 472. Consequently, the - unsatisfactory evidence for appellees- as - to • resultant damages falls short of the probative quality required to support-the jury’s finding on that issue.

- Likewise, it was error to permit one of the witnesses for appellees to attribute separate damages of $1,000 for trees embraced in the taking. Upon another trial, this will not be allowed. Com., Dept. of Highways v. Stamper, Ky., 345 S.W.2d 640.

Neither should there be allusion to-the question of inconvenience because the four-lane highway will require some additional driving in approaching the property from the north. Cartee v. Com., Dept. of Highways, Ky., 374 S.W.2d 860.

There appears to be no merit in appellant’s contention that the court should have instructed the jury to give consideration to enhanced value by reason of the prudent construction of the highway. There was no evidence offered reflecting any such enhancement. If the evidence upon a new trial is the same, there will be no requirement for an instruction as to enhancement.

Upon a new trial the jury will be instructed as prescribed in Com., Dept. of Highways v. Sherrod, Ky., 367 S.W.2d 844, and Com., Dept. of Highways v. Priest, Ky., 387 S.W.2d 302. (Decided November 20, 1964).

The judgment is reversed for proceedings-consistent with this opinion.

PALMORE, J., not sitting.


author: RUARK, Presiding Justice.

text:
    Ada USREY, Plaintiff-Appellant, v. DR. PEPPER BOTTLING COMPANY, POPLAR BLUFF, Inc., a corporation, Defendant-Respondent.
    No. 8334
    Springfield Court of Appeals. Missouri.
    Dec. 23, 1964.

      Dwight Crader, Sikeston, for plaintiff-appellant.
    J. Lee Purcell, Hyde, Purcell & Wilhoit, Poplar Bluff, for defendant-respondent.
   RUARK, Presiding Justice.

Ada Usrey obtained a jury verdict for $12,500. Thereafter the trial court entered judgment for the defendant Dr. Pepper Bottling Company in accordance with its motion for directed verdict. Mrs. Usrey has appealed. On Sunday, April 1, 1962, Ida Mae Howell was driving an automobile belonging to her husband Charles Howell: She collided with the Usrey automobile and Homer Usrey was killed. The sole question is whether or not, at the time of the collision, Ida Mae Howell was the servant, agent, and employee of Dr. Pepper Bottling Company so that the doctrine of respondeat superior applies.

Dr. Pepper had a bottling plant at Poplar Bluff arid ⅛ warehouse at Sikeston, which is on Highway 60 approximately east of Poplar Bluff. Charles Howell lived in Poplar Bluff and had been working for Dr. Pepper since the previous November. He described his duties as “truck driver and maintenance.” He had no authority to hire or fire. One Crossfield was the principal owner and manager. His wife, Ruby Crossfield, worked in the office. Ida Mae Howell (wife of Charles) did not work at the plant, apparently had never been there, and the Crossfields were not acquainted,with her. On Saturday arrangements were made for Howell to take a truck load of beverage on the following day from the plant to the warehouse at Sikeston and leave it.for use by the “routeman.” Cross-field had made arrangements with Mrs. Crossfield to drive over to Sikeston and bring Howell back after he delivered the truck. While Howell was loading the truck, Crossfield called Mrs. Crossfield and told her to come to the office preparatory to going after Howell at Sikeston in order to return him to Poplar Bluff. .Then Howell volunteered the information that his (Howell’s) wife, Ida Mae, was going to pick him (Howell) up at Sikeston and take him to New Madrid and (also) to visit his folks. Mrs. Crossfield came to the plant. Then, quoting from Howell’s examination :

“Q. Is it true that Mr. Crossfield had made arrangements for Mrs. Cross-field to go over and to bring you back in their own vehicle?
“A. Yes, sir.
“Q. And is it also true that you told Mrs. Crossfield and Mr. Crossfield there in the plant that that' wouldn’t ' be necessary, that your wife was going to pick you up and take you on to New Madrid?
“A. Yes, sir, that’s what we had planned.
“Q. Then you were going on to New Madrid on a social trip, is that correct?
“A. That’s correct.
“Q. And I believe you said you were also going somewhere else?
“A. I was going to see my dad ¿t Hayti. ;
“Q. Now, this trip that your wife was making on the occasion when the accident occurred, that was at your request and not at the request of the Dr. Pepper Bottling Company in Poplar Bluff, wasn’t it?
“A. Yes, sir, it was.”

Howell told Crossfield he would have to have some money for gas. About the only place there is any possible difference in the testimony.of Howell and Crossfield is in reference to this gas. Howell testified that "I told him I had to have some money for gas.” Later he was asked:

“Q. You told him you had to have gasoline for what?
“A. For the truck and car, too.
“Q. I didn’t hear your answer.
“A. For the car and truck, too.”

Crossfield testified that gas for the car was not discussed. At any rate Crossfield gave Howell five dollars and Howell put $2.05 worth of gas in the truck and $2.50 worth in his own car; but he (Howell) testified he understood that he was to pay for the gasoline that went into his own car. Later (after the accident) Howell turned in filling station tickets showing these gasoline purchases. He was credited with the $2.05 gas which went in the truck and his wages were charged with the balance of the five dollars.

Ida Mae Howell was not at the plant that morning. Crossfield testified “I knew that he told me she would pick him up in Sikes-ton but I didn’t know she was going to follow' him.” Howell’s “time” ended when he left the truck at the warehouse. Actually he and his wife planned to go witness' a mock battle at New Madrid (which is south of Sikeston on Highway 61), and then go visit Mr. Howell’s father who lived at Hayti, which is still farther south on Highway 61. They were making a family outing of the trip and Mrs. Howell had some of the children in the car. Also, it would appear Howell had two of their children in the truck with him, but there is no evidence that Crossfield knew of this. He testified it was against company rules for the drivers to have riders in the cab with them. ■ ■

The collision occurred at Dexter, between Poplar Bluff and Sikeston. Instead of going around Dexter on the highway, Howell went in on what might be called the “business” route in order to buy some bologna and sandwiches. At this time Mrs. Howell, in the family car, was following the truck, and while so engaged she collided with the Usrey car. There is no contention that Howell was negligent in the operation of the company truck. Nor is there any evidence that Howell was directing the operation of the family car. Plaintiff’s case was based entirely on the negligence of Ida Mae Howell in the operation of the car.

Appellant contends she made a sub-missible case of liability based on respon-deat superior because Ruby Crossfield. testified that Dr. Pepper Bottling Company “made arrangements” with Ida Mae-Howell to return Howell to Poplar Bluff. The testimony referred to is as follows: - -

. “Q. Did the Dr. Pepper Bottling Company or anyone on their behalf make arrangements for Ida Mae Howell (sic) to go to Dexter (sic) for the purpose of returning Charles- Howell to Poplar Bluff? A. Did we make any?
“Q. Yes. Did the Dr. Pepper Bottling Company? A. Yes.
“Q. When was that made?
“A. Well, I was home, and my husband called me and told me to come down to the office, he wanted me to go over to Sikeston and pick 'Charles up.
“Q. Did you go to the Poplar Bluff Bottling Company plant thereaft- • er? A. Yes.”

Later she said she didn’t understand the question and her whole testimony indicates that the only knowledge she had concerning the transaction was that her husband asked her, not Mrs. Howell, to make the trip, that she went to the plant prepared to go, and Howell said that his wife Was going to pick him up. It is true, as appellant asserts, that we must give the verdict holder the benefit of all favorable evidence and inferences; but we think this does not require us to place an interpretation on a statement which the witness said she' did not intend and which is completely out of harmony not only with the whole testimony of the witness but also with all the other evidence in the case. Both plaintiff’s and defendant’s evidence show that Howell made the arrangement with his wife. There is no evidence that anyone representing Dr. Pepper Bottling Company (unless Howell be taken as a representative) had any contact whatsoever with Mrs. Howell. The whole sense of Mrs. Crossfield’s testimony is contrary to the meaning which appellant seeks to apply. However, the whole testimony further shows that Crossfield, representing the defendant, acquiesced in the arrangement (by Howell) for Mrs. Howell to pick up Howell at Sikeston. The question is, was that an acquiescence or consent, either express or implied, to her performing a service for the defendant.

' Appellant contends the evidence showed that defendant furnished money to buy gasoline for the truck and the car. This involves the proposition that the jury could accept the testimony of Howell, and to some extent of' Crossfield, that defendant furnished the money for the gas in the car and disregard and refuse to believe the testimony of the same two witnesses that it was an advance for the personal account of Howell. This is contrary to the whole sense of the testimony of both witnesses, but for the purpose of this appeal we will assume, although it is a rather labored assumption, that defendant furnished the gas for the car.

Did the relationship of master and servant apply as between Ida Mae Howell and the defendant Dr. Pepper? Was she, in going to Sikeston to “pick up” her husband, engaged in the service of Dr. Pepper Bottling Company? If not, Dr. Pepper would not be responsible for independent acts of a third person not in its service. It is elemental that the person sought to be charged as master is liable only when the relationship of master and servant exists in respect to the very transaction out of which the injury arose. Oganaso v. Mellow, 356 Mo. 228, 201 S.W.2d 365, and cases cited at loe. cit. 365. We ágree that a master can be liable for the acts of a servant or sub-servant appointed expressly or by implication, acquiescence, and ratification, this depending upon the circumstances involved. Also we agree that the- fact the person sought to be classified as servant uses his own automobile with knowledge of the person sought to be charged as master is not necessarily controlling in the application of the doctrine of respondeat superior. We also assume, without finding it necessary to decide, that Charles Howell was engaged on a “special errand” as the servant of the defendant, so that the ordinary “going and coming” rule, if otherwise applicable, might not apply; and that defendant owed Howell a duty to provide a means for return, if he so chose, from Sikeston to Poplar Bluff, and therefore it was the employer’s business to provide for such return. The question is, was this trip of Ida Mae Howell in furtherance or promotion of the business of Dr. Pepper. Wolf v. Terminal R. Ass’n of St. Louis, 282 Mo. 559, 222 S.W. 114. In. this connection, it is not sufficient to impose liability on Dr. Pepper that the use of the vehicle driven by Ida Mae Howell may have incidentally benefited or remotely promoted the business of the defendant. 8 Am Jur.2d, Automobile and Highway Traffic, § 635, p. 194; 52 A.L.R.2d, Anno. § 16, p. 339; Wines v. Goodyear Tire & Rubber Co., Mo.App., 246 S.W.2d 525(6); Sowers v. Howard, 346 Mo. 10, 139 S.W.2d 897; Oganaso v. Mellow, supra, 356 Mo. 228, 201 S.W.2d 365; Klotsch v. P. F. Collier & Son Corp., 349 Mo. 40, 159 S.W.2d 589. Attention must be paid to the “inducing factor,” or “the object of the trip,” the “purpose.” Even the motive and the intent of the parties is in many instances a determining factor. 5 Blashfield, Automobile Law, Perm.Ed., §§ 3007, 3008; Smith v. Fine, 351 Mo. 1179, 175 S.W.2d 761, 767. Mullally v. Langenberg Bros. Grain Co., 339 Mo. 582, 98 S.W.2d 645, 649; Dilallo v. Lynch, 340 Mo. 82, 101 S.W.2d 7, 13; see Sowers v. Howard, supra, 346 Mo. 10, 139 S.W.2d 897, 901; also, Montana v. Nenert, Mo.App., 226 S.W.2d 394, 398, 400. In Klotsch v. P. F. Collier & Son Corp., supra, 349 Mo. 40, 159 S.W.2d 589, at loc. cit. 593, the court requoted from Marks’ Dependents v. Gray, 251 N.Y. 90, 167 N.E. 181, 183, as follows:

“ * * * ‘If the journey would have gone forward though the business errand had been dropped, and would have been cancelled upon failure of the private purpose, though the business errand was undone, the travel is then personal, and personal the risk.’ ”

As applied to our situation, defendant had arranged transportation of Howell back to Poplar Bluff. But that arrangement was rejected. Howell chose instead to make a family and social outing of the occasion. He, with his family, planned to go to New Madrid and then down the highway to Hayti for a family visit as soon as Howell’s “time was ended” when he reached Sikeston. He could have chosen to accept defendant’s proffer of return transportation. Instead he chose to use the rest of the day after his “time had ended” for a personal venture. He did not plan to return to Poplar Bluff, the means for which defendant had offered to provide. Ida Mae was not driving to Sikeston to bring Howell back to work or to return from work. She was driving there for the purpose of accomplishing a personal end entirely unrelated to the business of the employer— i.e., that of driving with her husband and family to New Madrid and Hayti. It would appear therefore that she was driving toward Sikeston not for the purpose or object of accomplishing any service to defendant, but for a purpose which was to be accomplished when the Dr. Pepper truck was left at the warehouse and her husband’s “time was done.” The fact that she happened to be following the truck is only coincidental. It was not necessary that she follow it at the time of the collision nor at any other time insofar as Dr. Pepper’s business was concerned.

The test almost universally applied in determining whether or not re-spondeat superior applies to torts is, did the person sought to be charged as master have the right or power to control and direct the physical conduct of the other in the performance of the act. If there was no right to control there is no liability; for those rendering service but retaining control over their own movements are not servants. Skidmore v. Haggard, 341 Mo. 837, 110 S.W.2d 726; Reiling v. Missouri Insurance Co., 236 Mo.App. 164, 153 S.W.2d 79, 83. And the relationship (of servant and master) begins only when the person charged as master has the right to direct the method by which the master’s service is performed. Restatement, Agency 2d § 233. We cannot find anything indicating that the defendant had any right of control whatsoever over Ida Mae Howell or her automobile. Had she chosen to go by a roundabout route, or had she chosen to stop at a sale or to have a picnic with her children, and had defendant objected, she, quite properly, could have said, "It’s none of your business.” Had she changed her mind after leaving Poplar Bluff and decided that she did not wish to continue on the trip, defendant would have been powerless to order her to do otherwise. , Had word come to defendant that she was proceeding recklessly and was endangering others on the highway, defendant could not have directed her to cease driving or to return to Poplar Bluff — this because she was not answerable to Dr. Pepper for her movements. We conclude that defendant had no right or power of control over the' conduct of Ida Mae Howell when she drove toward Sikeston and at the time of the collision.. For reasons aforesaid, the judgment is affirmed.

STONE and HOGAN, JJ., concur.

      . 57 C.J.S. Master and Servant, § 563 d, p. 279; Restatement, Agency 2d, § 5, p. 21; Fuqua v. Lumbermen’s Supply Co., 229 Mo.App. 210, 76 S.W.2d 715, 719; Weatherman v. Handy, Mo.App., 198 S.W. 459, 460.

      . Riggs v. Higgins, 341 Mo. 1, 106 S.W.2d 1, 5; Schmitt v. American Press, Mo.App., 42 S.W.2d 969, 972; see Chiles v. Metropolitan Life Ins. Co., 230 Mo.App. 350, 91 S.W.2d 164, 169; also, McCaughen v. Mo. Pac. R. Co., Mo.App., 274 S.W. 97.

      . See 5 Blashfield, Automobile Law, Perm. Ed., § 3041; Church v. Ingersoll (10th Cir.) 234 F.2d 176; 8 Am.Jur.2nd, Automobiles and Highway Traffic, § 637, p. 195; 52 A.L.R.2d Anno., p. 311; Beck with v. Standard Oil Co., Mo., 281 S.W.2d 852.

      . 56 C..I.S. Master and Servant, § 2, p. 33 et seq.; 35 Am.Jur. Master and Servant, § 3, p. 445; Sherwood v. Arndt, Mo., 332 S.W.2d 891; Stokes v. Four-States Broadcasters, Mo., 300 S.W.2d 426; Rubinelli v. Union Elec. Light & Power Co., Mo.App., 187 S.W.2d 762; Talley v. Bowen Construction Co., Mo., 340 S.W.2d 701, 704; Douglas v. National Life & Accident Co., Mo.App., 155 S.W.2d 267, 271.


author: RUARK, Presiding Judge.

text:
    James L. COOPER, Plaintiff-Respondent, v. V. R. FREER and Ethel Freer, Defendant-Appellants. R. Y. Hopkins, Margaret Hopkins and Transportation Service Company, Garnishee, Ozark Air Lines, Inc., Garnishee.
    Nos. 8322, 8323.
    Springfield Court of Appeals. Missouri.
    Dec. 10, 1964.

      Henry Warten, Emerson Foulke, Joplin, for defendant-appellants.
    Max Patten, Joplin, for plaintiff-respondent.
   RUARK, Presiding Judge.

These are appeals from two separate judgments holding separate assignments and transfers of (1) a leasehold interest with a hangar situate thereon from V. R. Freer to V. R. Freer and Ethel Freer, and (2) a Cessna airplane from V. R. Freer to V. R. Freer and/or Ethel L. Freer (tenants by the entirety), to be fraudulent and void as to plaintiff, now respondent, James L. Cooper.

Litigation between plaintiff-respondent Cooper and defendant-appellant V. R. Freer has followed a long and tortuous course. It commenced in September 1949, when Cooper brought suit against Freer, who was charged (in the amended petition) as doing business under the name of “Freer Construction Company.” By this suit Cooper claimed a share of the profits from the construction company business and prayed an accounting for the period extending from February 1947 to July 25, 1949. On September 15, 1952, judgment was rendered ordering the accounting and appointing a referee. On December 1,1958, the referee-filed report in which he found Freer to be indebted to Cooper in the sum of $6,857.11,' plus interest. On March 14, 1960, the court* sustained only one of Freer’s exceptions to-the referee’s report (that which allowed" Cooper a share in the rentals received from-machinery- owned by Freer) and overruled and denied all others. Final judgment was rendered in favor of Cooper and against Freer in the total sum of $7,368.84. Executions were issued, the plane and hangar property were levied upon and sold in partial satisfaction; and out of such proceedings arose the present controversies.

On March 11, 1954, V. R. Freer bought the Cessna airplane (price seven thousand dollars) and took title in his own name. In January 1955, he took a sublease agreement on certain land at the Joplin airport. This also was taken in his name. Later this subleáse ágfeement'was amended (in order to change the description) and the amendment was likewise signed by V. R. Freer as owner. After the sublease was obtained, a hangar was built on the land. On March 12, 1959, (which was after the referee’s report had been filed), V. R. Freer executed an assignment of the airplane to “V. R. Freer and/or Ethel L. Freer, tenants by the entirety.” The consideration stated was “one or more dollars.” V. R. Freer’s notarial acknowledgment to this instrument was taken by his wife Ethel who signed as “E. L. Freer.” On December 16, 1959, V. R. Freer, in consideration of “one dollar and other valuable considerations,” assigned the leasehold interest, with the hangar situate thereon, to V. R. Freer and Ethel L. Freer. Without going into detail, we can say that the evidence justified the conclusion that V. R. Freer, the assignor in these two transfers, had no other property out of which satisfaction of plaintiff’s judgment could be obtained; and it is these transfers which the creditor Cooper contended, and the court found, were fraudulent and void.

Every conveyance or assignment made or contrived' with intent to hinder, " delay, or defraud creditors is void as to such creditors (§ 428.020 V.A.M.S.), and a voluntary assignment from husband to wife to the prejudice of the husband’s creditors is presumptively fraudulent and void as to such creditors. Such transfers are looked upon with suspicion, and their good faith must be so clearly shown that there is no reasonable doubt as to the honesty of the transaction.

Appellants Freer, in their briefs, recognize .the Above rule and frankly .state that plaintiff Cooper made a prima facie case of fraud; but they contend that defendants have clearly shown by “overwhelming evidence” that the two properties were originally purchased (and built) from the joint funds of Ethel and V. R. Freer, husband and wife; that there was a resulting trust in the properties in favor of the wife, and the (later) transfers to husband and wife were only in rectification of the error in-taking title in the name of the husband in the original transfers. The airplane was paid for by one check on the account of “V. R. Freer Construction Company” which was signed “V. R. Freer Construction Co. by E. L. Freer” (italics are printed). The rent for the sublease was paid by check in similar fashion. Subsequently a hangar was constructed upon the sublease, and various checks for labor and material extending over several months were issued on the same account and in the same manner. “E. L. Freer” is Ethel Freer.

In order to sustain their burden, defendants-appellants relied upon the testimony of Ethel Freer. She stated that she kept the office of V. R. Freer Construction Company (it was in the home), looked after the payroll and the records, attended to the telephone, wrote and signed most of the checks,, and paid the bills. In fact, she had been “bookkeeper for Vic ever since he started’ in business.”' She. said that the.business of V. R. Freer Construction Company was a partnership, but we must remark that the testimony was an assent' which followed' a. leading question from counsel.' She stated, again in assent to a leading question concerning the bank account, “Q. Joint account as partners and husband and wife, is that right? A. Yes, sir.” On another occasion she testified that the partnership account was “just like it has always • been.” Her testimony concerning her knowledge (or lack of knowledge) of the fact that title to the airplane and the hangar lease-had been taken in her husband’s name, and the fact of the transfer (some five years later) to husband and wife, leaves us much in doubt. We are unable to find that she •ever said specifically that she did not know •or learn that her husband took sole title to the airplane and the hangar lease. As to the hangar lease she said “Yes, we have a copy of it. I don’t know that I have completely read it.” She said she had never Tead the hill of sale for the airplane. “Vic usually takes care of these things. I didn’t read it.” Asked if the plane was purchased in her name or V. R. Freer alone, she remarked “Well, that I don’t know, Mr. Foul-ke.” She took an acknowledgment on the hill of sale from V. R. Freer to V. R. Freer and Ethel (herself), as husband and wife. “I acknowledged his signature. Vic takes care of those things.” She said, “I won’t say that I did” examine it before taking the acknowledgment. “If Vic comes in and asks me to notarize something for him, why I notarize his signature. I don’t read it, no.” It appeared from the cross-examination that V. R. Freer Construction Company had been incorporated (apparently in 1958). Asked if she was a stockholder in it, she said, “Yes, sir, I expect I am”; but that the corporation had never been “activated” and that V. R.-Freer Construction Company had never done business as a corporation; that it had continued to do business from 1950 on the same bank account, and it was still a partnership at the bank. Defendants then introduced a certified copy showing that on September 12, 1950 (after the parent suit was filed), there was filed with the Secretary of State a registration of fictitious name for V. R. Freer Construction Company, which listed both Freer and his wife Ethel as owners and tenants by the entirety. Both signed the registration. The testimony of Ethel, with the cancelled checks of V. R. Freer Construction Company, and the fictitious name registration, is substantially appellants’ case. From this evidence, their reasoning makes one mighty bound from the level of sole ownership to the pinnacle of tenancy by entirety where

the debtor and the property can stand untouched by creditors. We find that we must plod more slowly.

Does the evidence clearly show that the bank account was a tenancy by the entirety? If so, when did it become so? Neither the bank record, the pass book, nor the depositors’ agreement was offered to substantiate the claim. In Harrellson v. Barks, Mo.App., 326 S.W.2d 351, 360, we said:

“In regard to this purchase the defendant relies upon the testimony of the plaintiff that ‘we both had a bank account together.’ The words ‘joint account’ are the words of the cross-examining lawyer, not the witness. The form of the account is not shown, nor was any effort made to show it. The expression ‘joint account’ is, by long continued common usage, a rather general and often erroneous term. It is often and indiscriminately applied to accounts which are held as tenants in common, as tenants by entirety, as joint tenants with right of survivorship, and to accounts which simply carry authority to check. We think this ■ evidence, standing alone, is insufficient to overcome the strong evidence of ownership standing in and by the certificate of title. * * *”

In absence of proof of the form of deposit, the appellants had the burden of proving the interest of the wife therein. The actual record .could have been easily produced. In its absence, the trier of the fact is, at best, faced with a choice as to credibility and accuracy. And, if so, going back to the original proceeding (instituted in 1949), we find that plaintiff charged that V. R. Freer (not V. R. and Ethel Freer) was engaged in business as a general contractor under the name of Freer Construction Company. The defendant in his answer admitted such. One of the issues before the referee was whether or hot defendant Freer should be entitled to deduct from the profits a monthly charge of one hundred dollars, which had not been paid, for services of Ethel Freer in keeping the records, answering the telephone, and taking care of the office. The referee found that the service of Ethel Freer was a gratuitous service to her husband and disallowed the deduction. The defendant excepted to such finding, and the exception was denied in the final judgment. In the written suggestions and memorandum brief of Freer’s (then) attorneys which were filed with the referee, we note this statement: “The defendant (V. R. Freer) was the sole owner of all of his capital assets, including machinery and equipment * * We must conclude that during the period Cooper and Freer had their profit-sharing arrangement and at the time the original indebtedness was incurred Ethel Freer had no interest in the business or assets of V. R. Freer Construction Company. The establishment of a partnership in this case must be proved by clear and convincing evidénce that the terms and conditions were unequivocally and unconditionally agreed to by the parties. Prasse v. Prasse, Mo., 77 S.W.2d 1001, 1005; Bussinger v. Ginnever, Mo.App., 213 S.W.2d 230, and cases cited at loe. cit. 237; Johnson v. Johnson, Mo.App., 270 S.W.2d 65. Registration under fictitious name (in 1950) would indicate some intention of the parties to establish a partnership and tenancy by entirety. But there is no evidence of any transfer, any act, any contract, any assignment, or any agreement, written or verbal, by which the intention was (to use Mrs. Freer’s word) ever “activated.’’

There is yet another ledge along which we must plod: Assuming that the account was in 1950 or at some later time placed in the name of husband and wife as tenants by the entirety, was not that transfer in fraud of the then existing creditor Cooper who had a suit pending? If there was no consideration for the transfer of ari interest to his wife, under these circumstances, the appellants have the burden of showing that the donor had adequate means and property to satisfy his creditors. There is no dispute that respondent was a creditor and his suit was pending. The only consideration indicated or argued is the fact that Mrs. Freer worked in the office, kept the books, et cetera, (as she had done theretofore). In Pelsue v. Pelsue, Mo., 367 S.W.2d 487 (one of the two cases upon which appellants rely), the wife had transferred her stock of goods to join with that of her husband’s. Shortly before he died the husband signed a credit statement which indicated the business was a partnership; but it was held this was not sufficient to establish a “survivorship estate”; and also, that the fact the wife worked regularly in the operation of the business was not convincing proof of an agreement to make it an entirety, because that fact “may just as reasonably be attributed to the marriage relationship.” Ray v. Ray, Mo.App., 336 S.W.2d 731, the only other case cited by appellants, was a contest between husband and wife. No creditors were involved and there was a-joint account accumulated from deposits by both parties of their separate earnings. We believe that if there was at some time a transfer of the account of V. R. Freer doing business as Freer Construction Company to V. R. Freer and Ethel Freer, it would still have to be presumed fraudulent as to .existing creditors because there is not shown to be any consideration therefor; and the subsequent reappropriation of a portion of the assets by the debtor would not destroy the fraudulent character.

There is yet another facet of the case to be considered. Assuming that in 1950, t/r at some time prior to the purchase of the airplane and the acquiring of the hangar lease, Freer transferred an interest in his business and its assets to his wife, and assuming that the transfer was not at that time in fraud of plaintiff, who was then a creditor with a suit pending, and assuming that the hank account of V, R. Freer Construction Company belonged to both parties as tenants by the entirety and co-partners, there is still the question of whether or not the acquisition of the plane and the lease and hangar, all in the name of the husband, was with the assent or acquiescence of the wife. The courts have had some difficulty with withdrawals from entirety accounts. It is said there is a “weak” presumption that property purchased with entirety funds takes on the character of entirety property. But the use of entirety funds by one of the owners becomes a matter of intention, and this intention must often be determined from the facts and circumstances which imply that intention. The husband and wife can by consent, agreement, or acquiescence change the character of entirety property. Where there is a “manifestation of intention” that the person acquiring the property is to have the beneficial interest, the entirety dies and the resulting trust does not follow. Restatement, Trusts 2d, § 441. Certainly the acquiescence of one tenant by the entirety to the purchase (from the joint funds) of property taken in the name of the other would destroy the entirety interest (and the resulting trust) from following the proceeds. Otherwise the character of entirety interest would extend on ad infinitum.

The airplane was bought in 1954, the hangar lease was taken in early 1955, and for several months thereafter there was qon-siderable activity (and writing of checks) in the construction of the hangar. It was over five years later that the disputed transfers were made to husband and wife. We find testimony that Freer was flying the plane during this period, but we find no evidence that it was ever used in the construction company business, or that either the plane or hangar were treated and regarded as business assets until after the final judgment in the parent case. We have read and reread the testimony of Ethel Freer. Nowhere do we find a definite statement that she did not know or learn that her husband had acquired the properties in his own name. Five years is a long time for one who kept the office, including the books and records of the business and who had kept them “for Vic ever since he started in business,” and who wrote and signed the checks for these particular withdrawals. Certainly there is no evidence that she ever objected or protested against it. Her testimony is in some respects “naively unrealistic.” Kinsella v. Gibson, Mo., 307 5.W.2d 491. The implication, whether designed or unintentional, is that she has been a dutiful wife helping her husband in his affairs, doing his bidding, without question, and without understanding or comprehension. Her testimony would lead one to believe that whatever her husband did or bought was with her consent and approval; it suited her. And she does not now claim that her husband defrauded or misled her in regard to taking title to the property or in concealing such fact. If there are withdrawals from an entirety account for purposes which could reasonably suit the wishes, purposes, and intention of the parties, and there is no apparent objection after the withdrawals are known, the presumption should be that the withdrawals were by consent and acquiescence. This is stated in the Pelsue and Harrellson cases, supra.

In cases of this character, we must defer to the trial court in his judgment of the credibility of spoken evidence, and we should not reverse unless we find the judgment to be clearly erroneous. Harrison v. Harrison, Mo.App., 339 S.W.2d 509, and authorities at loe. cit. 514. We cannot say in this case that defendants’ evidence was such as to “clearly show” that Mrs. Freer had ever had any interest in the properties involved; or, if she ever did have such an interest, that she did not acquiesce in the taking of title thereto by the husband. There are too many “unexplained factors and the absence of certain available evidence.” Kinsella v. Gibson, supra; see also Brown v. Oehler, Mo.App., 192 S.W.2d 515, 517, and Russell v. Franks, 343 Mo. 159, 120 S.W.2d 37, 41. The trial court was justified in finding that the purported transfers to the name of husband and wife were fraudulent and void as an attempt to hinder and delay the creditor whom the husband has battled over the years. It is now time that the litigation should end.

The judgments are affirmed.

STONE and HOGAN, JJ., concur.

      . Harrison v. Harrison, Mo.App., 339 S.W.2d 509; Bank of New Cambria v. Briggs, 361 Mo. 723, 236 S.W.24 289; Oetting v. Green, 350 Mo. 457, 166 S.W.2d 548; Conrad v. Diehl, 344 Mo. 811, 129 S.W.2d 870; and West’s Mo. Digest, Fraudulent Conveyances,

      . See Pearl v. Interstate Securities Co., 357 Mo. 160, 206 S.W.2d 975(11), State ex rel. Nelson v. Hammett, Mo.App., 203 S.W.2d 115(2).

      . Murphy v. Wolfe, 329 Mo. 545, 45 S.W.2d 1079; see In re Baker’s Estate, Mo.App., 359 S.W.2d 238, 244.

      . 37 C.J.S. Fraudulent Conveyances § 387, p. 1223; Lynes v. Holt, Mo., 1 S.W.2d 121; Minium v. Slavin, 338 Mo. 1014, 93 S.W.2d 869; Godchaux Sugars v. Quinn, Mo., 95 S.W.2d 82; see Bostian v. Bono, Mo., 322 S.W.2d 813.

      . There can often he some distinction in ■whether the withdrawal substantially destroys the fund, or whether the withdrawal is only of a portion or moiety. See 77 A.L.R. Anno. 79, and Feltz v. Pavlik, Mo.App., 257 S.W.2d 214, 218.

      . Ambruster v. Ambruster, 326 Mo. 51, 31 S.W.2d 28, 77 A.L.R. 782; Ray v. Ray, Mo.App., 336 S.W.2d 731, and eases at loe. cit. 734; Zahner v. Voelker, Mo.App., 11 S.W.2d 63; Pelsue v. Pelsue, Mo., 367 S.W.2d 487; Harrellson v. Barks, Mo.App., 326 S.W.2d 351.