author: POPE, Justice.

text:
    JOSEY MILLER COMPANY, Inc., Appellant, v. Jesse WILSON, Jr., Appellee.
    No. 14292.
    Court of Civil Appeals of Texas. San Antonio.
    Oct. 28, 1964.
    David A. Grose, Alice, Walter Groce, Corpus Christi, for appellant.
    Lloyd, Lloyd, Dean & Ellzey, Alice, for appellee.
   POPE, Justice.

This venue action arises under Section 23, Article 1995, Vernon’s Ann.Civ.Stats. Plaintiff, Jesse Wilson, Jr., a resident of Jim Wells County, brought suit in that County against Josey Miller Company, Inc., of Jefferson County, Texas. The court overruled defendant’s plea of privilege and defendant here urges that the action sued upon did not arise in Jim Wells County and, if it did, it is void under the Statute of Frauds. We affirm the judgment

Plaintiff operated several feed stores, one of which was in Jim Wells County. He asserted an oral contract made in that County, which obligated defendant to supply him feed, which he in turn sold to his customers. He alleged that defendant sent sacked feed to him in Jim Wells County, which he sold to his customers; that the feed was spoiled and adulterated and caused his customers’ livestock to become sick, as a result of which he lost business and customers, and was subjected to claims by his customers. Sec. 23, Art. 1995 states several alternative sites at which a plaintiff may bring a suit against a private corporation. One place is the county in which the cause of action or a part thereof arose.

Plaintiff had to prove that some part of the transaction creating the primary right, or some part of the transaction relating to the breach of that right, occurred in Jim Wells County. Stone Fort Nat. Bank of Nacogdoches v. Forbess, 126 Tex.

568, 91 S.W.2d 674. It is our opinion that plaintiff proved defendant breached its implied warranty, and that his resale of the spoiled and adulterated feed subjected him to business losses and claims in Jim Wells County. That part of his action, at least, arose in the county of the suit. Davis v. Ferguson Seed Farms, Tex.Civ.App., 255 S.W. 655; Teague Brick Sales Co. v. Dewey, Tex.Civ.App., 355 S.W.2d 249; Brown Cracker & Candy Co. v. Jensen, Tex.Civ.App., 32 S.W.2d 227, 232; Texas Portland Cement Co. v. Carsey, Tex.Civ.App., 3 S.W.2d 930.

Defendant also insists that the contract is in violation of the Statute of Frauds. This is an affirmative defense, Rule 94, Texas Rules of Civil Procedure, and may properly be heard upon the trial of the case, but not in a venue hearing. Clark, Venue in Civil Actions, pp. 246-248; 1 McDonald, Texas Civil Practice, § 4.55.

The judgment is affirmed.


source: Caselaw Access Project

author: WOLFE, Judge.'

license: Public Domain

text:
    BURTON W. DUENKE BUILDING COMPANY, a Corporation, (Plaintiff) Respondent, v. Charles W. WHITNEY and Helen M. Whitney, (Defendants) Appellants.
    No. 31592.
    St. Louis Court of Appeals. Missouri.
    Nov. 17, 1964.
    Jones & Alexander, D. Calhoun Jones, St. Louis, for appellants.
    William R. Bascom, C. Perry Bascom, Bryan, Cave, McPheeters & McRoberts, St. Louis, of counsel, for respondent.
   WOLFE, Judge.'

This is a suit by the corporate plaintiff for damages arising out of an alleged breach of contract. The defendants entered into a contract to purchase a home constructed by the plaintiff company and paid $100 earnest money. The defendants later declined to purchase the home for the reason that it was used as a display house in the subdivision being developed by the plaintiff after the contract of sale was signed. The defendants counterclaimed for the $100 earnest money which they had paid. There was a verdict for the plaintiff on the defendants’ counterclaim and a verdict for the plaintiff on the plaintiff’s cause of action with an award of $1.00 damages. The plaintiff filed a motion for a new trial, and the court sustained the motion and ordered a new trial on the issue of damages only. The defendants appealed.

The facts of the case are that the defendants agreed, by a written contract of sale, to purchase from the plaintiff a lot improved by a newly constructed house for the sum of $30,500. This house and lot were in Harwood Hills Subdivision being developed by the plaintiff. The contract was entered into with the Suburban Real Estate Company, as agent for the plaintiff. This was a corporation the stock of which was owned, one-half by Burton W. Duenke, president of the plaintiff company, and the other half by the vice-president of the Burton W. Duenke Brtilding Company, the plaintiff. The building company plaintiff was completely owned by Duenke. The contract entered into on July 27, 1959 provided that if the defendants sold the home that they then owned and financing could be obtained, the sale would be closed on October 2, 1959. Both of these conditions were met.

After the contract was signed plaintiff used the garage of the house as an office, and the house was used and shown as a display house for prospective purchasers who came to the subdivision. Defendant Charles W. Whitney testified that he visited the house several times after the contract was entered into, and each time he found it filled with people and the plaintiff using the garage as an office and the house as a display home. He said that the plaintiff’s whole operation was being conducted from the house that he had contracted to buy as a new house. The defendants objected to the use of the house, but in spite of the objections, the plaintiff continued to so use it. On October 2, 1959, the defendants refused to close the purchase agreement because the house had been so used.

The plaintiff sold the house for the same price on July 27, 1960 to another person. Plaintiff seeks by this action to recover commissions paid to the Suburban Real Estate Company on the contract signed by the defendants and expenses in maintaining the house up to the time of its sale on July 27, 1960. A witness for the plaintiff said that this expense was $200 a month. There was evidence that a bath tub in the house had been damaged and that the plaintiff had collected insurance for the damages.

The contract provided that the house would be accepted by the purchaser in the condition it was in at the time the contract was signed. It also provided that the purchaser had an option to cancel the contract if the property was damaged and not restored. Neither of these provisions was mentioned in the instructions to the jury, either given or offered. After the jury had retired and deliberated for an hour and five minutes, they sent a note to the Judge with the question: “Is it legal to award token damages of $1.00?” The court ordered the jury in and answered the question by referring them to the instruction it had previously given. Ten minutes later they returned with the verdict mentioned, awarding the plaintiff $1.00 damages.

As stated, the trial court granted a new trial on the issue of damages only. It was proper to grant a new trial for the verdict was inconsistent. The jury plainly expressed the conclusion that the defendants breached the contract, but that the plaintiff was not entitled to damages for the breach. This probably arose from the fact that the jury was not fully instructed. The verdict-directing instruction made no mention of the plaintiff’s obligation under the contract to deliver the house in the same condition that it was in at the time the contract was entered into. The instruction tended to negate that part of the contract by stating that the jury should find for the plaintiff “even though you should find that the plaintiff used the real estate as a display house from the time of the execution of the contract to the sale of the real estate.” There was evidence of damage to the house, as stated, and the jury was not instructed upon the only obvious defense available to the defendants under the evidence.

The respondent contends that we cannot consider any errors not properly preserved for review under Supreme Court Rule 83.13 (a), V.A.M.R. This is a rule from which we cannot depart except when the case before us comes under Supreme Court Rule 79.04, which states: “Plain errors affecting substantial rights may be considered on motion for a new trial or on appeal, in the discretion of the court, though not raised in the trial court or preserved for review, or defectively raised or preserved, when the court deems that manifest injustice or miscarriage of justice has resulted therefrom.”

Here it is evident that the defense that the defendants had was never presented to the jury. It is also evident that the verdict returned was not only inadequate but inconsistent. For these reasons we hold that since the case must be retried, it would be manifestly unjust to try only the issue of damages to the plaintiff. Highfill v. Brown, Mo.Sup., 320 S.W.2d 493; Kamo Electric Cooperative v. Brooks, Mo.App., 337 S.W.2d 444.

We therefore reverse the order of the trial court granting a new trial upon the issue of damages only and remand the case for a new trial upon all issues.

RUDDY, P. J., and ANDERSON, J., concur.


author: ANDERSON, Judge.

text:
    STATE of Missouri at the relation of Dan BOYER, Relator, v. Honorable Noah WEINSTEIN, Judge of the Circuit Court of St. Louis County, Respondent.
    No. 31681.
    St. Louis Court of Appeals. Missouri.
    Nov. 17, 1964.
    Carter, Fitzsimmons & Brinker, Bernard C. Brinker, Clayton, for relator.
    London & Greenberg, Burton M. Green-berg, St. Louis, for respondent.
   ANDERSON, Judge.

This is an original proceeding in prohibition brought by relator, Dan Boyer, to prevent respondent as Judge of the Circuit Court of St. Louis County from assuming jurisdiction of a case filed in said court styled Richard Pacanowski, plaintiff, vs. Dan Boyer, defendant, it being cause numbered 251,107, of the causes in said Circuit Court. Upon the filing of said petition for the writ in this court our preliminary writ issued, to which respondent in due time filed his return. Thereafter, relator filed a motion for judgment on the pleadings, and the cause was submitted to this court upon briefs and oral arguments.

The facts, which appear from the pleadings are not in dispute. Richard Pacanow-ski, plaintiff in the Circuit Court case, is a resident of St. Louis County, Missouri, and Dan Boyer, defendant, relator here, is a resident of the State of Indiana. Pac-anowski and Boyer were involved in a two car collision on the premises owned by Famous-Barr Company, which was used by said company as a parking lot available to its customers at its Northland Store, 7601 West Florissant Avenue in the County of St. Louis. The collision occurred at the intersection of two driving lanes on said premises. Thereafter, Pacanowski instituted the suit in question, it being an action for damages for personal injuries alleged to have been sustained by him as a result of the alleged negligence of Dan Boyer. No personal service of summons was obtained on Boyer. Pacanowski sought to obtain service on Boyer by means of the so called “Long Arm Statute.” Sections 506.200 to 506.320, RSMo 1959, V.A.M.S. The petition and summons in said cause was served on the Secretary of State of Missouri in accordance with Section 506.240, RSMo 1959, V.A. M.S., and as provided in paragraph 2 of said section, the Secretary of State mailed to defendant, by registered mail, a notice of such service together with a copy of the process and petition served upon him.

Thereafter, defendant, Dan Boyer, appeared specially and filed a motion to quash the service and sheriff’s return showing service on the Secretary of State, and to dismiss the action on the grounds that the court could not acquire jurisdiction over the person of defendant by service in accordance with Sections 506.210 and 506.-240, RSMo 1959, V.A.M.S., because defendant, a nonresident, was not, at the time of the collision, operating his motor vehicle on a public highway of the state, but on private property. The respondent overruled said motion. Relator then filed in this court his petition for a writ of prohibition.

In this court, relator contends, as he did in the Circuit Court, that the service of summons on the Secretary of State is invalid because the cause of action by Richard Pacanowski against relator did not arise out of the use and operation of his motor vehicle on a public highway in this state.

The statute (Section 506.210 RSMo 1959, V.A.M.S.), so far as applicable to the matter before us provides:

“The use and operation of a motor vehicle or trailer in this state on the public highways thereof by a person who is'a nonresident of this state shall be deemed:
“(1) An agreement by him that he * * * shall be subject to the jurisdiction of the courts of this state in all civil actions and proceedings brought against him * * * by either a resident or a nonresident plaintiff, for damages to person or property, * * * growing or arising out of such use and operation; and
“(2) An appointment by such nonresident * * * of the secretary of state of Missouri as his lawful attorney and agent upon whom may be served all process in suits pertaining to such actions and proceedings;
“(3) An agreement by such nonresident that any process in any suit so served shall be of the same legal force and validity as if personally served in this state.”

The phrase “such use and operation” in •subsection (1) of the foregoing statute must refer to “use and operation of a motor vehicle or trailer in this state on the public highways thereof,” which appear in the first paragraph of said section, or else the word “such” would have no meaning.

There are no Missouri cases in point on the issue involved herein. However, the better rule seems to us to be that where the statute providing for substituted •service on a nonresident is limited to actions growing out of the operation of motor vehicles upon the highways of the state, nonresidents involved in automobile accidents occurring on private property are not amenable to service under such statute; that the cause of the injury must arise on the highway. Brauer Machine and Supply Co. v. Parkhill Truck Co., 383 Ill. 569, 50 N.E.2d 836, 148 A.L.R. 1208; Harris v. Hanson et ux., D.C., 75 F.Supp. 481; Langley v. Bunn, 225 Ark. 651, 284 S.W.2d 319; Boulay v. Pontikes et al., D. C., 93 F.Supp. 826. In the latter case, the Missouri Statute was involved, and in disposing of the case as to one of the defendants charged with negligence, which did not occur on the highway, although the collision did occur on a highway in this state, the court said:

“ * * * a contractual obligation on non-resident motorists who use the highways of said state for the operation of their motor vehicles, is in derogation of the common law and affects substantial rights so that it cannot be extended by implication but must be strictly construed. Cf. Wood v. White [68 App.D.C. 341], 97 F.2d 646; certiorari denied 304 U.S. 578, 58 S.Ct. 1048, 82 L.Ed. 1541; Kirchner v. N. & W. Overall Co., D.C., 16 F.Supp. 915. * * * ”

Where the statute providing for substituted service covers any accident growing out of the operation of the nonresident’s motor vehicle “within the state,” the nonresident motorist is generally held amenable to service of process under the statute even though the accident happened on private property. Such was the situation in Kohanovich v. Youree, 1 Storey 440, 51 Del. 440, 147 A.2d 655, 73 A.L.R.2d 1347 (1959), and Bertrand v. Wilds, 198 Tenn. 543, 281 S.W.2d 390, which cases are relied upon by respondent. The foregoing cases are also bottomed in the theory that, although, the accident occurred on private property, the use to which the automobile was put at the time the alleged negligent acts were committed was incidental to the operation of the vehicle upon the highway. This same reason is put forward to support the service of process in Schefke v. Superior Court of San Francisco, 136 Cal.App.2d 715, 289 P.2d 542 (1955); and State ex rel. Mohr v. District Court of the Thirteenth Judicial District, 138 Mont. 452, 357 P.2d 891, also relied upon by respondent. In Kohanovich, the accident happened on a private parking lot. In Bertrand, it occurred on a driveway of a Veterans Hospital owned and operated by the federal government in Tennessee. There was a statute in Tennessee which defined highways and in said definition there was included “drive way” under the control of the state or federal government. In Schefke, defendant backed his automobile into plaintiff on the premises of Standard Oil Company where he had gone to have it serviced. In State ex rel. Mohr v. District Court, plaintiff was injured when a truck overturned on a temporary road which led from the public highway to a gravel pit over which gravel was hauled to the highway for the purpose of repair or reconstruction of a part of the highway. There were no signs excluding the public from use of the road or guards to prevent members of the public from using it. Mohr used this road as did salesmen and others desiring to view the project. The court held that the road in question was an integral part of the highway system.

In our judgment, the operation by Dan Boyer of his automobile on the Famous-Barr parking lot, though an event which followed his use of the highway, was not incidental to such use because it was not a necessary or essential part thereof and directly related thereto. Such being the case, relator was not amenable to service of process under Section 506.240, supra, in the action brought against him.

Our writ should be made permanent as to proceeding further with the trial of the case under the present service of process. It is not our purpose to prohibit the prosecution of said suit in the event legal service is had on defendant.

Our preliminary rule in prohibition is therefore amended so as to provide that respondent take no further action in said cause unless legal service is had on defendant, and as amended said writ is made absolute.

RUDDY, P. J, and WOLFE, J., concur.


text:
    Karen Black HUTSON, by her next friend, Vivian Black, Plaintiff-Respondent, v. Alvin John HIGHLEY, Defendant-Appellant.
    No. 31644.
    St. Louis Court of Appeals. Missouri.
    Nov. 17, 1964.

      Dearing, Richeson & Weier & Roberts, H. L. C. Weier, Hillsboro, for defendant-appellant.
    Robert A. Mcllrath, Flat River, for plain-itiff-respondent.
   ANDERSON, Judge.

In this action Karen Black Hutson, by next friend has sued Alvin John Highley for damages for personal injuries, alleged to have been sustained on March 7, 1962, as a result of a collision between an automobile driven by Mrs. Hutson, and an automobile operated by defendant. The trial resulted in a verdict and judgment for plaintiff in the sum of $1500.00. Defendant has appealed.

The collision occurred in St. Francois County at the intersection of Highway 8 and St. Francois County Highway P. Highway 8 runs east and west. Highway P runs in a northeastward direction from Highway 8.Both are blacktopped and are about 20 feet in width. The intersection is at the crest of a hill over which Highway 8 runs. Plaintiff, just prior to the collision had been driving westwardly on Highway 8, and defendant was operating his car eastwardly on said highway intending to turn left onto Highway P. Plaintiff, as she approached the intersection was traveling at a speed of 50 to 55 miles per hour. The accident occurred about 9 :30 P.M.

Highway 8 slopes downward from the intersection in both directions. According to plaintiff’s testimony the downward slope to the east is 140 feet. The highway there runs up and over another hill, then downward for approximately 125 or 130 feet. A car cannot be seen from the intersection when it is. beyond the second hill. The western slope from the intersection is more abrupt than it is to the east. Prior to the trial, plaintiff returned to the scene of the accident and made various measurements. She testified that when she stood on Highway 8, 122 feet east of the scene of the collision she could not see the top of a car coming west up the hill until it reached a point 85 feet west of the crest of the hill. Herman Barr, an officer of the Highway Patrol testified that a person traveling west could not see eastbound traffic until his car about reached the top of the hill. He also testified that if one traveling east would pass beyond the center line of Highway P, if extended across Highway 8, before making a left turn he could see cars approaching from the east for a distance of two or three hundred feet, and that if such a turn was made a car approaching the intersection from the east could see it. He further testified that the crest of the hill was more or less level.

Plaintiff testified that when she first saw defendant’s car it was in her traffic lane about 30 feet away, making the turn into Highway P. She stated that defendant was at the time west of the center line of Highway P, if that line was extended across Highway 8. Plaintiff further testified that when she saw the defendant’s car she swerved her car to the left to avoid hitting it, but ran into its right rear fender. From there, her car ran some 140 to 150 feet and turned over in a ditch on the south side of the highway. Plaintiff’s automobile was damaged principally on the right side. Defendant’s car received damage to the right rear fender.

Defendant testified that he was traveling about 30 miles per hour when about 200 feet from the intersection, but reduced his speed thereafter to about 10 miles per hour. He stated that when he reached the intersection he looked up Highway P and Highway 8 and both were clear of traffic. He then turned into the right hand lane of Highway P, and when there was not more than a foot of his car in Highway 8, his car was hit. He stated that he turned to the right of the center of the intersection. He first saw the lights of plaintiff’s car when it was about 10 feet from him.

Appellant contends that the court erred in refusing to sustain his motion for a directed verdict at the close of all the evidence, for the reason that it appears from plaintiff’s testimony that she was guilty of contributing negligence as a matter of law. In support of this contention it is urged that it appears from plaintiff’s evidence that she failed to maintain a proper lookout, and by reason thereof, she failed to see defendant’s automobile as it approached the intersection when it was plainly visible 85 feet west of the intersection, and when plaintiff was 122 feet east of the intersection, at which time, plaintiff could have taken precautionary measures to avoid the collision.

In determining the issue presented we must view the evidence in the light most favorable to plaintiff. Contributory negligence, as a matter of law must appear in plaintiff’s case, or be established by evidence on the part of defendant, which is; binding on plaintiff or which plaintiff has conceded to be true. It is also a fundamental principle that before the negligence of a plaintiff can defeat a recovery, it must result from a breach of duty which the law imposes upon plaintiff, and enter into, and become a contributing cause to the-injury.

It is true that plaintiff was under a continuous lookout duty as she approached; the intersection, and must be held to have seen what was plainly visible. But her failure to perform such duty could only be-classified as contributory negligence if her failure in this respect occurred at a time-when there was apparent danger of collision and at a time when she could take-effective measures to avoid such collision. It is only in such instances that her negligence can be said to be a contributing proximate cause of the injury. The fact that-she was negligent at some prior time does-not affect her action.

In the case at bar, the danger of' collision between the two vehicles arose-when defendant entered the traffic lane over which plaintiff was proceeding or-gave evidence of an intention to do so. Plaintiff’s testimony was that she first saw defendant in her lane of traffic when she-was thirty feet from it. At that time defendant was turning into Highway P. That was the only testimony given by plaintiff which throws any light upon the time when-the apparent danger arose. Defendant testified that he turned to the right of the center of the intersection. Plaintiff was traveling SO to 55 miles per hour or 74 to ■81 feet per second. Plaintiff’s speed cannot he said to be a negligent speed as a matter of law. Whether she should have reduced her speed as she approached the intersection in order to avoid left turning vehicles depends upon the circumstances shown by the evidence. If she knew of the intersection, it could be reasonably said that plaintiff had a right to assume that cars approaching from the west would yield to her the right of way under the circumstances shown by the evidence viewed in the light most favorable to plaintiff. We hold that plaintiff was not guilty of contributory negligence as a matter of law.

Plaintiff submitted the case to the jury by instruction number 1, on two ■grounds of negligence, which are as follows : “ * * * and if you further find that in attempting to make the left turn, the Defendant failed to keep to the right ■of the center of where Highway P intersects Highway 8, if so, and if you further find that the Defendant made a left turn directly in front of the Plaintiff’s motor vehicle and that their motor vehicles came into collision, if so, and if you further find that the Plaintiff was injured, and if you further find from the evidence that the Defendant’s acts as set out above in making a left turn onto Highway P before passing the right of the center of its intersection with Highway 8 and in making a left turn directly in front of Plaintiff’s motor vehicle, if you find he did so was a failure on Defendant’s part to exercise the highest degree of care in the operation of his motor vehicle and was negligence, * *

It is complained that it was error to submit the hypotheses of turning left before passing the center of the intersection.

This is a valid complaint. Section 304.--020(6) RSMo 1949, V.A.M.S. which required an operator of a motor vehicle to travel beyond the center of the intersection and pass to the right thereof before turning left was repealed. (Laws 1953, p. 587) and a new section, now section 304.018 RSMo 1959, V.A.M.S. was enacted to govern left turns at intersections. This new section does not require one making a left turn at an intersection to pass to the right of the center of the intersection, but that “the left turn shall be made so as to leave the intersection to the right of the center line of the roadway being entered, * *

The instruction was prejudicially erroneous in that it submitted a false ground of negligence based upon a repealed statute. This placed an undue burden on defendant. Berry v. Harmon, Mo., 329 S.W.2d 784; Bowman v. Heffron, Mo., 318 S.W.2d 269.

Instruction number 1 was erroneous for another reason. It authorized a recovery against the defendant if the defendant made a left turn directly in front of the plaintiff’s motor vehicle. No such assignment of negligence was pleaded. But aside from that there was no duty on the defendant to refrain from making a left turn in front of plaintiff’s car, unless there was apparent danger of collision, which basic fact the jury was not required to find. Stakelback v. Neff, Mo.App., 13 S.W.2d 575.

While it is clear that plaintiff failed to make a case upon the only pleaded negligence submitted, we prefer to remand the case rather than reverse the judgment, for the reason that it appears a case may be made under other pleaded assignments.

Various other alleged errors have been assigned, but they are not likely to recur in the event of a new trial. For that reason they may be disregarded.

The judgment is reversed and the cause is remanded.

RUDDY, P. J., and WOLFE, J., concur.


author: BRADY, Commissioner.

text:
    Gladys E. DOWDY, Plaintiff-Appellant, v. The LINCOLN NATIONAL LIFE INSURANCE COMPANY, a Corporation, and Larry Connors, Reverend Carl Poelker, Clarence Miller, Trustees of District No. 9 I. A. of M. Welfare Association, Defendants-Respondents.
    No. 31696.
    St. Louis Court of Appeals. Missouri.
    Nov. 17, 1964.

      Wyne & Delworth, Edward J. Delworth, Clayton, for plaintiff-appellant.
    Green, Hennings, Henry, Evans & Arnold, John Fox Arnold, St. Louis, for The Lincoln Nat. Life Ins. Co.
    Bartley, Siegel & Bartley, Donald S. Siegel, Malcolm L. Bartley, Clayton, for Larry Connors and others.
   BRADY, Commissioner.

The appellant, hereinafter referred to as the plaintiff, brought an action against the respondent life insurance company, hereinafter referred to as the company, and the individual respondents, hereinafter referred to as the trustees, to recover on an insurance policy in the sum of $2,000.00. The policy allegedly insured the life of the plaintiff’s deceased husband. The trial court sustained the company’s motion to dismiss plaintiff’s petition for failure to state a cause of action against it and also sustained the motion for summary judgment filed by the individual trustees on the ground that the pleading showed no genuine issue as to any material fact. The plaintiff has appealed.

The petition was in three counts. In the first count the plaintiff alleged that the company had authorized the trust known as “District No. 9 I.A. of M. Welfare Association” to act as agent for it in issuing certain certificates of insurance under certain group policies which were enumerated; that pursuant to that authority the trust issued a certificate to the plaintiff’s deceased husband insuring his life in the sum of $2,000.00 and naming the plaintiff as beneficiary; that the certificate of insurance * * * was in good standing and in full force and effect on September 25, 1962” which was the date on which her husband’s death was alleged to have occurred. It was also alleged “[t]hat plaintiff has performed all conditions of said certificate of insurance on her part to be performed, generally, and also with regard to notification to defendant * * * insurance company * * The plaintiff prayed for judgment against the company in the amount of the policy, interest, ten per cent for vexatious refusal to pay, attorneys’ fees and costs. The second count of the petition alleged that the trust was “ * * * carrying on an insurance business in the State of Missouri and issuing policies of insurance on policy forms of the defendant * * * ” company; that the certificate of insurance issued to plaintiff’s husband was in good standing and in full force and effect on September 25, 1962, the date of the insured’s death; and that the trust “ * * * has refused to make any payment according to said certificate of insurance and has wilfully and vexatiously, and without justification, refused to pay the same.” In this count the plaintiff prayed for judgment against the trustees for the same sums and based upon the same sources as in Count I. The theory under which Count III of the petition was filed was that under the terms of the policy the trustees had an option to consider the policy still in force during a period of temporary layoff from work; that on July 9, 1962 the insured was temporarily laid off from work; “[t]hat premiums on said policy were paid through July, 1962”; that the trust did not elect to consider Dowdy’s policy in force and did not inform him of their decision not to so elect; and “[tjhat by such failure to so elect and failure to inform said insured, he was deprived of his right to convert said insurance and thereby maintain it in force, and the trust thereby failed in its duties to said insured as Trustee and to plaintiff as beneficiary of said policy to her damage in the sum of Two Thousand Dollars ($2,000.00) under said policy.” Under this count the plaintiff prayed for judgment against the trustees for the sum of $2,000.00 with interest and costs.

The policy was attached to the petition and in those parts pertinent to our inquiry states that “The Lincoln National Life Insurance Company (Hereinafter called the Company) Agrees to Pay * * Other pertinent provisions are that the insurance of an employee automatically terminates upon “termination of employment” which is stated to have deemed to have occurred “ * * * if an employee is pensioned or retired or upon cessation of active full-time work for any other reason * * *.” It is further provided that if the trust continues to pay the premiums for an employee’s insurance as called for under the policy, the trust then has an option to consider an employee on temporary layoff as being still employed. There is a conversion privilege in the policy which in its application to this case provides that any employee upon written application to the company made within thirty-one days after the end of the policy month in which termination of his employment occurs “ * * * shall be entitled to have issued to him by the Company, without evidence of insurability, an individual policy of life insurance * * * ” provided that the first premium payment on such individual policy issued under such a provision “ * * * shall be made to the Company within the thirty-one day period during which application for such individual policy may be made.” The policy provides for a grace period of one month or not less than thirty days for the payment of every premium after the first payment but also provides; “ * * * jf any pre_ mium be not paid before the end of the grace period, this Policy shall thereupon terminate * *

We will first rule upon the plaintiff’s contention the trial court prejudicially erred by sustaining the separate motion for summary judgment filed by the trustees. Rule 74.04(c), V.A.M.R., provides for summary judgment “ * * * if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law. * * * ” The purpose of this rule has been set forth by this court in Brown v. Prudential Ins. Co. of America, Mo.App., 375 S.W.2d 623, 1. c. 629. In that case this court also held that the burden to show there is no genuine issue as to any material fact rests upon the party seeking to take advantage of the summary judgment procedure. Our duty upon review of such cases is to resolve the question of the sufficiency of the proof to support the summary judgment if granted by the trial court and, if necessary, to enter such judgment as the trial court ought to have given. Brown v. Prudential Ins. Co. of America, supra.

The plaintiff first contends the trial court prejudicially erred in sustaining the separate motion for summary judgment filed by the trustees. In support of this assignment of error the plaintiff contends the trial court cannot rule upon the motion for summary judgment and base its ruling upon the pleadings alone. To so interpret Rule 74.04(c), supra, would require us to ignore the plain language in which it is phrased. That language does not require that the pleadings and the depositions and admissions and the affidavits, if any, must be consulted in order to support a ruling upon a motion for summary judgment. As is stated in Federal Practice and Procedure, Barron and Holtzoff, Section 1231, page 96, the plain meaning of that section is that a motion for summary judgment may be based on the pleadings or on the record or upon affidavits, if any, filed in support thereof. Rule 56 of the Federal Rules is the same as our Rule 74.04(c), supra, in the language with which we are here concerned.

Neither is there any provision in Rule 74.04(e), V.A.M.R., which supports plaintiff’s contention. That rule does provide that when a motion for summary judgment is made “ * * * and supported as provided in this Rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial. * * * ” However, by express terms this rule applies to the party adverse to the movant and is only applicable where the motion is supported by affidavits. Rule 74.04(b), V.A.M.R., provides that a party against whom a claim is asserted may move for summary judgment with or without supporting affidavits. In this case the trustees chose not to support its motion with affidavits. Accordingly, Rule 74.04(e), supra, lends no support to plaintiff’s contention the trial court could not base its ruling upon the motions for summary judgment solely upon the pleadings.

The plaintiff has failed to brief any contention the trustees were not entitled to a summary judgment as to Count II of the petition. Doubtless this is because the specific provisions of the policy clearly refute any such contention. The policy clearly and unequivocally states that “The Lincoln National Life Insurance Company (Hereinafter called the Company) Agrees to Pay * * It should be stated that there is no provision in the policy that would place any express or implied duty upon the trustees to pay the amount of the policy upon proof of the insured’s death. Failure to raise any point with regard to the trial court’s action sustaining the trustees’ motion for summary judgment as to Count II of the petition renders unnecessary any specific ruling on the matter by this court.

Reference to the policy also illustrates that the trustees are entitled to judgment as a matter of law as to Count III. In that count the plaintiff has alleged that the trustees’ failure to elect to continue the policy in force and their failure to inform her husband of that decision deprived him of his right to convert the insurance and to maintain it in force. The policy provides that the insurance of an employee automatically terminates on “termination of employment.” As stated earlier herein that condition is deemed to have occurred upon cessation of active full-time work for any reason except being pensioned or retired, unless the trust elects to continue to pay the premiums for the employee’s insurance. In that event the trust then has an option to consider an employee on temporary layoff as being still employed. In this same count of the petition the plaintiff herself alleged the existence of such an option. Certainly, its existence illustrates there could be no merit to plaintiff’s contention the trustees were under a duty to elect to continue her husband’s coverage.

The plaintiff also contends that the trustees breached their trust because they failed to inform the deceased of their failure to exercise their option. The plaintiff does not point to any provision of the policy that places such an obligation on the trustees and on careful search of the policy we cannot discover any express or implied provision placing such a duty upon them. In addition, it should be noted that it was not the failure of any alleged duty on the part of the trustees that caused the deceased to be deprived of his right to convert his insurance. The policy provides that the deceased could apply at any time within thirty-one days after the termination of his employment to convert his policy and upon such application he would have been entitled to receive, without evidence of insurability, an individual policy of life insurance in the same amount and for the same premium. The existence of this privilege was in no way dependent upon the trustees’ decision not to exercise their option nor upon any alleged duty to notify the deceased of that decision. The conversion privilege existed independently of these factors and its loss resulted solely from the failure of the plaintiff’s husband to avail himself of it. We find no error in the trial court’s action in sustaining the motion for summary judgment filed by the trustees.

We pass now to the plaintiff’s allegation of prejudicial error with reference to the trial court’s action in sustaining the company’s motion to dismiss. That motion went to the plaintiff’s cause of action against the company as stated in Count I of the petition. It will be recalled the company was not named as a defendant in Counts II and III. On a motion to dismiss we are to construe the petition liberally and favorably to the plaintiff giving her the benefit of all inferences fairly deducible from the fact stated. Hall v. Smith, Mo., 355 S.W.2d 52 [1-5]. The motion to dismiss admits the truth of all facts well pleaded in the petition, Jacobs v. Jacobs, Mo., 272 S.W.2d 185, and is in effect a concession that even if these facts are true, the petition does not state a claim upon which relief can be granted. Ezell v. Ezell, Mo.App., 348 S.W.2d 592.

In Count I of her petition the plaintiff alleges the existence of the policy, that she is the beneficiary thereof thus showing the right or interest which entitled her to bring suit on the policy, the performance or waiver of conditions precedent on her part, the death of the insured, the amount of the insurance, and the fact that this amount is due and payable and has not been paid. These are sufficient allegations to support an action upon a life insurance policy. McDonnell v. Hawkeye Life Ins. Co. of Des Moines, Iowa, Mo.App., 64 S.W.2d 748. The company supports the trial court’s action sustaining its motion to dismiss on the grounds that the effect of the allegations in Count III when combined with the allegations in Count I are that the coverage had lapsed as to the plaintiff’s husband due to nonpayment of premiums.

The plaintiff did not include in Count I any allegation as to the payment of premiums on the policy. In Count III of the petition the plaintiff alleged “[t]hat premiums on said policy were paid through July, 1962.” The company contends the trial court could properly use this allegation and combine it with the allegations in Count I so as to form a basis for sustaining the company’s motion to dismiss. The company’s argument proceeds first on the basis that the policy attached to the petition shows the grace period for payment of premiums to be thirty days. Next, it is urged that reference be made to the allegation in Count I as to the date of insured’s death as being September 25, 1962. Then the company’s argument incorporates the allegation in Count III that the premiums on the policy were paid “through July, .1962.” The conclusion the company draws is that it must necessarily follow from this latter allegation that the insured’s death occurred more than thirty days after payment of the last premium and at a time when the grace period had expired and the policy had lapsed for nonpayment of premiums.

We think this argument must fail for two reasons. First, the allegation in Count III is not as the company states it to be in its brief; i. e, “ * * * that there were no premium contributions made after July, 1962.” There is no allegation to that effect to be found in any of the three counts of the petition. To allege that the premiums were paid “through July” is not tantamount to alleging there were no premiums paid after July.

The second reason we think the company’s argument cannot be upheld is that the burden was on the company to prove that the coverage afforded to the plaintiff’s husband by the policy sued on had lapsed for nonpayment of premiums. Green v. American Life & Accident Ins. Co, Mo. App, 93 S.W.2d 1119, 1. c. [2-4], p. 1123; Novosel v. Mid-West Life Ins. Co. of Missouri, Mo.App., 276 S.W. 87; Girvin v. Metropolitan Life Ins. Co., Mo.App., 84 S.W.2d 644. Certainly, Count I cannot be held to have failed to state a claim upon which relief can be granted because it fails to negate or is silent as to an affirmative defense; in this instance, the nonpayment of premiums. Accordingly, the company’s motion to dismiss should have been denied.

The judgment should be affirmed as to the trustees and reversed and the cause remanded as to the company. The Commissioner so recommends.

PER CURIAM:

The foregoing opinion of BRADY, C., is adopted as the opinion of this court. The judgment is affirmed as to the trustees and reversed and the cause remanded as to the company.

RUDDY, P. J., WOLFE, J., and JAMES D. CLEMENS, Special Judge, concur.

ANDERSON, J., not participating.


author: DOERNER, Commissioner.

text:
    Deloyd WARE, Plaintiff-Appellant, v. ST. LOUIS CAR COMPANY, a Division of General Steel Industries, Inc., a Corporation, Defendant-Respondent.
    No. 31751.
    St. Louis Court of Appeals. Missouri.
    Nov. 17, 1964.
    Wilson Gray, St. Louis, for plaintiff-appellant

      Frank C. Mansfield, St. Louis, for defendant-respondent.
   DOERNER, Commissioner.

Plaintiff claims to have been wrongfully-discharged from his employment with defendant, and brought this action to recover damages. After the defendant had filed its answer and the defendant had responded thereto by his reply, the court sustained defendant’s motion for summary judgment, from which plaintiff brings this appeal.

The undisputed facts disclosed by the pleadings and the defendant’s motion for summary judgment, including two affidavits filed in support thereof, show that plaintiff was employed by defendant, a St. Louis manufacturing concern, from 1952 to October, 1962. On October 20, 1962, plaintiff was suspended from his job for “allegedly threatening a fellow employee with an open knife and using abusive language * * * ” as plaintiff expressed it, or for assaulting a fellow employee “ * * * with a deadly weapon, a violation of the laws of the City of St. Louis and State of Missouri,” as defendant described it. Plaintiff was a member of Local Union No. 1055 of the United States Steel Workers of America, AFU-CIO, the collective bargaining representative of the unit to ’which plaintiff belonged. Prior to plaintiff’s discharge the Union and the defendant had entered into a collective bargaining agreement which included, among other matters, certain provisions regarding the processing of discharge cases and the adjustment of grievances. Article X of the Agreement provided, in brief, that in exercising its prerogatives of management the Company would not summarily discharge an employee, but would first suspend him; that the employee, if he believed he had been unjustly dealt with, would be furnished with a written statement of the offense or misconduct for which he was suspended, and, upon written request, was entitled to a hearing before a representative of the Company or the Company Executive Shop Committee.

At his request plaintiff was furnished with a written statement setting forth his offense, and was afforded a hearing, held on October 23, 1962 before the Company Executive Shop Committee, at which he testified and was offered the right to be represented and to adduce evidence in his favor. As authorized by Article X of the labor contract, the Company Executive Shop Committee decided that plaintiff’s suspension should be converted into a discharge. Written notice of the Committee’s decision (the date of which does not appear in the record) was sent to Local Union No. 1055, but not directly to the plaintiff.

Plaintiff alleged in his petition that he did not learn of the notice of his discharge until he was given a copy by the Union on October 31, 1962. Plaintiff further pleaded in his petition that “ * * * because of said wrongful action on the defendant’s part in mailing the notice of discharge to the Local Union and not to the plaintiff, the plaintiff was thereby prevented from appealing his discharge within twenty-four hours as provided in Article X of the Agreement (actually, 48 hours) but did make the appeal within twenty-four hours after his knowledge of the defendant’s decision.” Plaintiff also alleged in his petition that his discharge was in violation of Rule No. 16 of the defendant’s rules and regulations as set forth in a booklet titled “On The Job With St. Louis Car Company” which rule stated:

“ ‘Threatening, intimidating, coercing or interfering with fellow employees on the premises. First Offense, Warning. Second Offense, Three days off. Third Offense, Discharge.’ ”
The gravamen of plaintiff’s action, as contained in the concluding paragraph of his petition, is as follows:
“7. That the discharge of plaintiff by the defendant without allowing him a chance to appeal his dismissal and in refusing to hear his appeal when made and discharging him contrary to the above Rule 16 was wrongful and. unjust and as a result thereof, his reputation and character have been irreparably damaged. That he has been deprived of working at his usual occupation or any employment commensurate with his experience and ability; that he has suffered loss of seniority rights and other fringe benefits that he has suffered undue hardships, humiliation and loss of income and has caused his health to become impaired through nervousness and mental anguish all to his damage to the sum of $5,000.00.”

In its answer defendant admitted the existence of the collective bargaining agreement, plaintiff’s suspension, his request for a hearing, the holding of the same, and the decision to discharge plaintiff. Affirmatively, it alleged that Local Union No. 1055 represented plaintiff at the hearing before the Company Executive Shop Committee; that plaintiff never advised defendant that the Union did not represent plaintiff; and that in sending the notice of discharge to the Union it followed strictly the grievance procedure prescribed in Article V, Paragraph 4 of the collective bargaining agreement, relating to the procedure for the adjustment of grievances; that “ * * * the Union did not notify it that its reply was not satisfactory and/or that it desired to appeal such decision. Therefore, the matter was considered closed on the basis of this provision of the labor-management agreement. Defendant further states that it went beyond the terms of this contract in an effort to be completely fair with Plaintiff and that the ‘Chief Executive Officer of the Company’ personally heard Plaintiff’s appeal in several lengthy telephone conversations and after serious consideration affirmed the decision that dismissal was fair and even necessary.” Defendant also denied that plaintiff’s discharge was a violation of Rule 16, alleged that it was based on the more serious charge of assaulting a fellow employee with a deadly weapon, in violation of the laws of the city and state, and alleged that the last two sentences of the booklet state:

“* * * ‘GENERAL — Violation of any Shop or Safety Rule subjects an employee to disciplinary action whether or not provided herein. When no penalty is provided, the action taken will be such as is warranted by circumstances.’ ”

On the same day on which defendant filed its answer it also filed its motion for summary judgment, supported by two affidavits. One was by Glenn R. Foelsch, defendant’s Personnel Manager, and the other by Sev-erin Merz, who supervised the administration of labor problems for defendant, particularly those involving Local Union No. 1055. The substance of the affidavits, so far as material here, is that after his suspension plaintiff admitted to Foelsch that he had pulled a knife on Troy Brewer, plaintiff’s fellow employee and fellow union member; that the Union represented plaintiff, “ * * at all times mentioned in Plaintiff’s Petition against St. Louis Car”; that at the hearing Brewer testified that plaintiff had assaulted him in the Tin Shop with a large open knife, accompanied by a menacing attitude and obscene, vicious words; that the Company Executive Shop Committee decided that plaintiff’s suspension should be converted to dismissal; that the Union and its officers were advised of that decision; and that they did not appeal the decision.

Plaintiff did not file any affidavit in opposition to those filed by the defendant, but before defendant’s motion for summary judgment was heard and submitted plaintiff filed his reply to defendant’s answer. He denied therein that the Union had represented him at the hearing and alleged that he had represented himself, as he had a right to do “ * * * under the Labor Management Relations Act of 1947 as amended, Section 9(a) * * from which he quoted; and that “ * * * therefore any further action on the part of the employer defendant would have to be based on Article X of the Labor-Management Agreement of June 1, 1960, Subject — Discharge Cases and the plaintiff denies that the employer defendant followed said Article X.”

Plaintiff has incorporated in his brief copies of certain letters between the Union and plaintiff, and between plaintiff and the defendant. Since the correspondence was not before the court at the time it sustained defendant’s motion for summary judgment, and is not properly a part of the record before us, we cannot, of course, give it any consideration. Cooper v. Finke, Mo, 376 S.W.2d 225, 228. Parenthetically, we add that the correspondence, if considered, would hurt rather than help plaintiff’s position.

It is important to note that plaintiff did not deny that he assaulted or threatened his fellow employee with a knife. The cause of action attempted to be pleaded in his petition is not based on a denial of the charge which culminated in his dismissal, but on the grounds, first that under Rule 16 the extent of the penalty was limited to that of a warning, and that the discharge was therefore wrongful; and second, that the action of the defendant in discharging the plaintiff, “ * * * without allowing him a chance to appeal his dismissal and in refusing to hear his appeal when made * * * ” was wrongful and unjust. Plaintiff argues that both of these matters were genuine issues as to material facts which should have been tried, and that the court therefore erred in rendering summary judgment in favor of defendant.

Civil Rule 74.04(c), V.A.M.R, provides that when a motion for summary judgment is presented, “ * * * Judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law. * * * ” Corresponding Federal Rule 56 has been interpreted to mean that not every factual dispute bars summary judgment. Rather, the Federal courts have uniformly ruled that the dispute must involve a material fact, that is, one which has legal probative force as to a controlling issue. Thus in Durasteel Co. v. Great Lakes Steel Corp., C.A., 8th, 205 F.2d 438, 441, it was said :

“ * * * An issue of fact is not genuine unless it has legal probative force as to a controlling issue, 35 C.J.S, Federal Courts, § 144 p. 1205. The motion for summary judgment is not a trial of the issues but for the purpose of determining whether in fact there are any genuine issues as to material facts. If it is made clearly to appear on such a motion that even though there is an issue under the pleadings there is in fact no dispute as to the controlling material facts, then the court should enter summary judgment.”

To the same effect see Barron and Holtzoff, Federal Practice and Procedure, Vol. 3, Sec. 1234, p. 131; Robbins v. Gould, C.A. 5th, 278 F.2d 116; Leas v. Courtney Co, C.A.4th, 261 F.2d 13; Burton v. United States, D.C.Utah, 139 F.Supp. 121; Bank of China v. Wells Fargo Bank and Union Trust Co, D.C., N.D.Calif., 104 F.Supp. 59. The standard to be employed in determining the merits of plaintiff’s appeal is not, therefore, whether under the pleadings and the affidavits there remained any factual dispute; rather, the test to be applied is whether the factual dispute, if one existed, was of such legal probative force as would control or determine the result of the litigation, and hence preclude the entry of summary judgment.

For the purpose of making that determination we will assume (what is not pleaded) that Rule 16 was a part of plaintiff’s contract of employment; that the contract thereby limited the penalty which the defendant could impose for plaintiff’s transgression to that of a warning (see Culver v. Kurn, 354 Mo. 1158, 193 S.W.2d 602, 166 A.L.R. 644); and that defendant therefore wrongfully discharged plaintiff. We will further assume that plaintiff represented himself at the hearing before the Company Executive Shop Committee; that he had the right to do so under the Federal Law, 29 U.S.C.A. § 159(a); and that the notice of his discharge should have been sent to him instead of to the Union. Lastly, we will assume that upon learning of defendant’s decision to discharge him plaintiff appealed therefrom, as he alleged; and that the Chief Executive Officer of defendant refused to discuss the matter with him (plaintiff did not directly allege that the Chief Executive Officer so refused, but we infer that is what he meant by his allegation that defendant’s action, “ * * in refusing to hear his appeal when made * * * was wrongful and unjust * for there is no provision for a “hearing” before the Chief Executive Officer). Assuming that all of the foregoing factual allegations were in dispute, we nevertheless are of the opinion that such issues were not determinative or controlling as to plaintiff’s action. The material fact which determined and controlled the merits of plaintiff’s suit, as shown by plaintiff’s own pleadings and exhibits, was not in dispute. We refer to plaintiff’s failure to exhaust the adequate remedy afforded him under the grievance procedure established by the collective bargaining agreement.

In Reed v. St. Louis Southwestern R. Co., Mo.App., 95 S.W.2d 887, 888-889, this court held:

“Appellant’s first assignment of error is that the trial court erred in overruling its demurrer offered at the close of the case, in that though the contract of employment provided that ■‘should the accused be discharged or otherwise disciplined and consider such action unjust, his committee may, within thirty days, appeal in writing to the superintendent; should they be dissatisfied with the decision of the superintendent they may appeal in writing within thirty days to the vice president and general superintendent who will then grant a hearing, rendering decision within fifteen days,’ neither the respondent, nor any one for him, took an appeal from the action of the assistant superintendent in ordering his discharge after the hearing. This assignment of error is based upon the rule that where a contract of employment provides, as in the instant case, that a discharged employee may seek redress by appealing to certain designated officers, boards, or tribunals, such an employee is required to pursue and exhaust his contract remedy and cannot properly complain to a court for redress until he has exhausted the remedies accorded him by his contract. The point is well taken.”

The rule that a discharged employee must exhaust the administrative remedies provided for in his contract of employment before seeking redress in a court is in accord with the weight of authority- 72 A.L.R.2d 1439; Hamilton, Individual Rights Arising from Collective Labor Contracts, 3 Mo.L.Rev. 252, 266; 31 Am.Jur., Labor, Sec. 124, p. 485; Transcontinental and Western Air, Inc. v. Koppal, 345 U.S. 653, 73 S.Ct. 906, 97 L.Ed. 1325; May-field v. Thompson, Mo.App., 262 S.W.2d 157; Jorgensen v. Pennsylvania R. R. Co., 25 N.J. 541, 138 A.2d 24, 72 A.L.R.2d 1415; Harrison v. Pullman Co., C.A.8th, 68 F.2d 826.

As stated, plaintiff attached and incorporated as part of his petition Exhibit A, the collective bargaining agreement. Article X of the Agreement, governing discharge cases, provides that if the decision of the Company Executive Shop Committee, after holding the hearing, is to discharge the employee, and such decision is unacceptable to him, the employee “ * * may allege a grievance which shall be handled in accordance with Article V — Ad • justment of Grievances, beginning with Par. 4 of said Grievance Procedure.” Arti--ele V, Paragraph 4 provides that the ap ■ peal or grievance shall be “ * * * passed for consideration to the representative of the National Organization of the Union and the Chief Executive Officer of the Company or their designated representatives. If no such notice is received by the Company within the time specified the matter shall be considered closed, but if the appeal is referred to the representatives, a memorandum of the settlement reached by them signed jointly by the officer of the Company and the representative of the National Organization shall be furnished to Local Union No. 1055.” Since plaintiff was representing himself in the processing of his grievance over his alleged wrongful discharge, the matter was one for discussion between plaintiff and defendant’s Chief Executive Officer. However, if, as plaintiff alleged in substance, the defendant’s Chief Executive Officer refused to discuss his grievance with him, plaintiff had an adequate remedy which he was required to follow. Paragraph 6 of Article V reads:

“6. When grievances are not disposed of within the prescribed time, in any step, unless an extension of time has been mutually agreed upon, they may be appealed to the next step.”

The next and last step provided for the adjustment of grievances is contained in Paragraph 5, which provides that, if within 10 days from the date of the receipt of the notice of grievance, the difference has not been satisfactorily settled between the representative of the national union (plaintiff, here) and the Chief Executive Officer, then:

“5. * * * the matter shall be appealed to an impartial Umpire to be appointed by mutual agreement of the parties hereto. In the event that the parties cannot agree upon the selection of an impartial Umpire within five (5) days (Saturdays, Sundays and Holidays excepted) it shall be understood and agreed that the United States Conciliation and Mediation Service shall be requested to furnish a list of three qualified arbitrators from which the Union and the Company shall each have the right to eliminate one name. The remaining man shall be the impartial Umpire to hear said case or cases. The impartial Umpire shall hold said hearing as expeditiously as possible and his decision shall be final.”

Plaintiff obviously recognized his obligation to pursue the remedy provided for in Articles X and V of the collective bargaining agreement, for he did appeal from the decision of the Company Executive Shop Committee to the Chief Executive Officer. But it is obvious from plaintiff’s own pleadings that he made no effort to appeal his grievance to an impartial Umpire, as he was required to do by Article V, Paragraph 5 of the Agreement. Having failed to pursue and exhaust the remedy accorded him by the Agreement, he cannot properly complain to a court for redress. Reed v. St. Louis Southwestern R. Co., supra, and authorities cited.

It follows that the court did not err in entering summary judgment in favor of the defendant, and that the judgment should be affirmed. The Commissioner so recommends.

PER CURIAM:

The foregoing opinion by DOERNER, C., is adopted as the opinion of this court.

Accordingly, judgment is affirmed.

WOLFE, Acting P. J., ANDERSON, J., and L. F. COTTEY, Special Judge, concur.

RUDDY, P. J., not participating.


author: PALMORE, Judge. MONTGOMERY, Judge

text:
    Lonnie HOLLAND, Appellant, v. CHILDERS COAL COMPANY et al., Appellees.
    Court of Appeals of Kentucky.
    Nov. 20, 1964.
    Francis Dale Burke and Dan Jack Combs, Pikeville, for appellant.
    Robert Matthews, Atty. Gen., Edward R. Hays, Baird & Hays, Pikeville, J. Keller Whitaker, Ex. Sec. Ky. Wkmn’s Comp. Bd., Frankfort, for appellees.
   PALMORE, Judge.

The appellant, Lonnie Holland, sustained a relatively minor physical injury from an accident arising out of and in the course of his employment as a coal loader in a mine. The injury resulted in a permanent functional impairment of approximately 10%. This physical impairment, however, precipitated or “triggered” a psychosomatic mental condition from which Holland was completely (though probably temporarily) disabled and confined in a mental institution at the time the hearing on his workmen’s compensation claim was concluded. He appeals from a judgment confirming an award of the board based on a finding of 20% permanent partial disability.

The scope of our review is to determine whether there was substantial evidentiary basis for the finding of but 20% disability.

At the time of the accident Holland was 49 years of age and, except for unrelated matters of no apparent consequence here, had always been in good health. At about noon on October 9, 1962, while on his hands and knees gathering up loose coal he was struck “around my neck and back plum down” by falling slate. He experienced a sensation that “seemed like electric run down my legs and arms. * * * The right leg and arm,” and thought his shoulder was broken. His employer took him home and he did not work any more that day. He returned to the mine and “tried” to work on each of the next three days, remaining throughout the shift, but “was just in the way.” He says he was suffering pain in the back and could not do any lifting.

On October 13, 1962, Holland went to see Dr. Ballard Cassady, a physician and surgeon, at the Methodist Hospital in Pike-ville. Dr. Cassady had X-rays taken of his back (which proved negative) and administered treatment for muscle strain. On October 18 Holland tried again to work at the mine, and stayed all day, but (as he relates it) could not perform and so reported to his employer. His right hand was numb and he had pains in his legs and back “from the neck down.” He returned to Dr. Cas-sady, who then caused his neck to be X-rayed. The neck X-rays disclosed a marked narrowing of the 6th cervical interspace, which to Dr. Cassady indicated strong possibility of a herniated disc. Holland was re-admitted to the hospital and placed in cervical traction from October 26 to November 27, 1962, after which he was released and put in a neck brace, the pain having moderated and the “numbness and tingling” having disappeared.

At this juncture it was Dr. Cassady’s opinion that Holland was “unable to do any type of manual labor,” but he would not estimate the probable duration, because he thought the patient would have to be referred to a neurosurgeon for further examination, diagnosis (by cervical myelogram) and treatment, in the absence of which “his disability could continue indefinitely.”

Meanwhile this compensation proceeding had been filed, and on January 17, 1963, Dr. Ralph Angelucci, of Lexington, a neurosurgeon, examined the claimant in behalf of the defendant employer and “could not determine anything of consequence on clinical examination.’’ Holland was wearing his neck brace and “was helped into the office by his wife,” the reason for which Dr. Angelucci says he does not know, since the patient did not otherwise “demonstrate any problems in locomotion.” He felt that Holland was exaggerating his pain and weakness, since they were not objectively supported except for X-ray findings “which revealed the narrowed interspace which is certainly present in a lot of people without all of this difficulty.”

Dr. Angelucci observed arthritic spurring in the cervical spine. The interspatial narrowing appeared to be of earlier origin than October 9, 1962, but could have occurred at that time. On sensory examination Holland “demonstrated a hypesthesia of the entire right half of the body, including the face.” The possible source or significance of this symptom elicited only the comment, “Of course that is not a neurological problem.” It was Dr. Angelucci’s conclusion that there was not enough indication of a herniated disc to warrant a myelogram.

In view of the X-ray disclosure of a narrowed cervical interspace Dr. Angelucci estimated that Holland has a permanent “impairment in function” of approximately 10% of the body as a whole. Whether this resulted from the injury, a pre-existing arthritic condition, or both, he did not undertake to say. With respect to Holland’s other symptoms, including insensitivity to pin pricks in the right half of his body, the doctor said he was “either faking or emotionally upset.” He would not, however, accuse him of malingering, and admitted that “in view of this man having this multiplicity of problems, his difficulty in walking, his little wife having to help him along, his difficulty in swallowing that would have nothing to do with this problem, the hy-pesthesia of the entire one-half of the body, pain in the small of the back, without any objective findings, and all this multiplicity of complaints,” he is not presently fit for employment as a coal miner. His prognosis was as follows:

“I think it is a matter of rehabilitation on this man, make him understand his problem and treat him not only as far as his neck findings are concerned but try to rehabilitate him on his mental attitude or outlook toward life. That would be my feeling about it, with reassurance, psychotherapy and that sort of thing. At least that is the way I would attempt to rehabilitate this man. I think it will be a difficult job, but I think it could be done.”

On the basis of the evidence summarized thus far the referee, expressing difficulty in deciding the case, found a 20% permanent partial disability from the injury but suggested that the board have the claimant examined further by a disinterested physician. The referee’s opinion was rendered September 17, 1963, at which time the latest information in the record was Dr. Angeluc-ci’s testimony from the physical examina-tion conducted by him on January 17, 1963.

On November 7, 1963, pursuant to KRS 342.315, the board appointed Dr. T. Roth-rock Miller, an orthopedic surgeon, to examine the claimant. In the meantime Holland’s physical condition had remained unimproved and his mental condition had deteriorated badly. Recalled for supplementary testimony, Dr. Cassady reported that on November 20, 1963, he “was now unable to feed himself, or dress himself, and is practically a bed patient, and in the office he was very restless and agitated. He was noncommunicative and attempt to examine him was done, and only a superficial examination could be done because of inability of the patient to cooperate. * * * He was still wearing his neck brace when seen on the 20th,” etc.

On the date of the last examination by Dr. Cassady, November 20, 1963, Holland was committed on a certificate of the county health officer to Eastern State Hospital for observation, and he was a patient at that institution when taken to Dr. Miller’s office for examination on December 17, 1963.

Dr. Miller found the patient "so withdrawn that it was impossible to obtain any history from him and it was only with extreme difficulty that any comment at all could be extracted from him. * * * He sat quietly, saying nothing, continually picking at the hair over his left temple with his left hand,” and had picked a bald spot on his head. The only objective findings Dr. Miller could make were from X-ray examination, which again revealed a marked narrowing at one of the cervical inter-spaces and also showed evidence of degenerative arthritis in the neck area. His report concluded as follows:

“I doubt that the arthritis is on the basis of trauma although may have been aggravated by it. I do not believe that his present physical condition would permit his returning to the occupation of a miner but I am unable to state what bearing, if any, the injury of October 9, 1962, might have on his present condition. His emotional state is such that this would preclude any type of employment and I do not believe he would respond satisfactorily to any type of treatment until this has improved.”

The latest information in the record concerning Holland’s condition was provided by the testimony of Dr. Arthur L. Robert-shaw, a psychiatrist and departmental director at Eastern State Hospital, given on January 27, 1964. He described the patient’s behavior when first admitted in much the same way as did Dr. Cassady on his last examination. Holland’s condition was diagnosed as psychotic depressive reaction and he was put on a course of tranquillizing drugs and electro-shock treatment, “with very marked improvement in his mental condition, so that presently he is no longer depressed and he no longer complains of pain in his neck or arm” and “is approaching the time when his discharge can be expected.” As to the future, when released he should be able to work but would be subject to possible recurrence of his depressive state.

From X-rays, Dr. Robertshaw had observed the aforementioned narrowing of one of the cervical interspaces as well as the signs of degenerative arthritis. From these he concluded that Holland had some degree of physical disability, and it was his opinion that this disability had in turn “triggered off a psychosomatic mental condition which further magnified his symptoms and which was accompanied in increasing amounts by a depressive reaction. * * * The complicating factor in these cases is the presence of both a physical and a mental condition, and the mental condition does magnify the symptoms, but the mental condition is a very real component of the total picture. * * * This mental condition is an actual mental illness as evinced by marked retardation, withdrawal, slowing down of mental and bodily functions and misery.”

After Dr. Miller had filed with the board his report indicating degenerative arthritis as a causal factor in Holland’s disability the defendant employer moved for and obtained an order making the Subsequent Claim Fund a party defendant. KRS 342.-120(1); Alva Coal Corporation v. Ealy, Ky, 367 S.W.2d 833 (1963).

Upon full board review the referee’s finding of 20% permanent partial disability to the body as a whole resulting from the accident was confirmed, and the Subsequent Claim Fund was determined not to be a proper party and was dismissed.

There are three distinct questions against which the evidence must be measured, being the (1) causation, (2) extent and (3) duration of the disability.

The board specifically found that Holland sustained an injury arising out of and in the course of his employment, and there is no contention that this finding is not supported by sufficient evidence. Therefore it is conclusive.

KRS 342.120(1) provides for joining the Subsequent Claim Fund if it appears that the claimant (a) was already to some extent disabled at the time of sustaining a subsequent compensable injury or (b) had a dormant nondisabling disease condition which was lighted into an actual disability by a subsequent compensable injury. So far as relevant to this proceeding, (a) there is no evidence that Holland was to any extent already disabled at the time of the accident and (b) despite testimony indicating the presence of a degenerative arthritic condition in the cervical region the board’s dismissal of the Subsequent Claim Fund was necessarily a determination that Holland’s condition did not result in part from pre-existing disease.

What the board appears to have done in this case is to find that Holland’s physical or functional disability is entirely attributable to the accident of October 9, 1962, and that the ensuing mental or emotional complications are not attributable to the accident.

Insofar as its finding of causal connection between the accident and the disability relates to that aspect of the disability that is purely physical, neither party complains. Hence our further analysis can be and is cast upon the premise that the accident was the sole cause of the physical disability.

With respect to causal connection there is no tenable basis on which a line can be drawn between consequences that are purely physical and those that are part physical and part mental. The brain and nervous system are parts of the body. They affect and are affected by the functioning of the rest of the physical apparatus. Certainly what we identify as mind and emotion are direct products of a wholly physical process. If the psychosomatic illness described by Dr. Robertshaw was precipitated or “triggered,” as he says, by a physical disability that the board has found to have resulted from the accident, then the causal relationship between the accident and the over-all' disability is complete and unbroken.

Aside from the indication of degenerative arthritis, which was eliminated as a causal factor by the board’s dismissal of the Subsequent Claim Fund, and aside from the possibility of malingering, an accusation no witness was willing to make, the record contains nothing whatever to suggest that any part or aspect of Holland’s over-all disability originated from a cause other than the accident and injury of October 9, 1962. It is possible, of course, to speculate that he was emotionally unbalanced, but there is no proof to that effect. Moreover, KRS 342.120(1) (b) relieves the employer from the consequences of a dormant nondisabling infirmity only if it is a “disease condition.” A low-threshold emotional breaking point, as such, could hardly be so classified.

This court has held disability from traumatic neurosis to be fully compensable if the originating or precipitating trauma arises out of and in the course of the employment. Stone v. Arthur Hewitt Designs, Inc., Ky., 358 S.W.2d 513 (1962); Eastern Coal Corporation v. Thacker, Ky., 290 S.W.2d 468 (1956). According to Dr. Robert-shaw, “the difference between psychoneurosis and psychosis is that in the psychoneurosis the patient still retains his insight. He realizes he is ill and he asks for psychiatric help.” In space age vernacular the psychotic might be described as farther out. From the standpoint of causation, we perceive no logical distinction between traumatic neurosis and a psychotic depressive reaction resulting from an injury.

Dr. Robertshaw did not deny that anxiety over his compensation claim probably figured in Holland’s condition, and we recognize the existence of so-called “compensation neurosis” and the difficulty of distinguishing this type of ailment from malingering. Cf. Larson on Workmen’s Compensation, § 42.24, p. 619; Commonwealth, Dept. of Highways v. Lindon, Ky., 380 S.W.2d 247 (1964). But as Larson suggests, if the mental illness is genuine the line of causation from the original injury to the existing disability is not broken by the fact that anxiety over compensation is a factor in it. Whether the claimant is malingering is a question that is not beyond the competence of the fact-finding agency to resolve.

We conclude that the board, having found that Holland’s physical impairment resulted exclusively from the accident, had no alternative but to find that his entire disability resulted from the same cause.

With regard to the extent of disability, Dr. Angelucci made it clear that his approximation of 10% was intended to reflect only the purely functional impairment. He conceded that the multiplicity of other complications, mental or emotional, added up to a man who was not fit to work and was in need of “difficult” rehabilitative therapy. In the whole of the testimony there is not a scintilla of evidence that Holland was not totally disabled until the last deposition was taken from Dr. Robertshaw, at which time his recovery was imminent but he had not yet been discharged from the hospital. To the contrary, the testimony of every witness points to an inescapable conclusion that he was totally and continuously disabled from the time of the accident and would remain so until released from the hospital.

This brings us to the last question, that of duration. We find no fault with the award for permanent partial disability but are of the opinion that, subject to the maximum statutory limits (KIRS 342.095), Holland should have been awarded compensation for temporary total disability until released from Eastern State Hospital. Upon remand further evidence may be taken to ascertain the release date and, of course, in event of a change of conditions the parties will have resort to the reopening provision of KRS 342.125(1).

The cause is reversed for further proceedings consistent with this opinion.

MONTGOMERY, J., dissenting.

MONTGOMERY, Judge

(dissenting).

I respectfully dissent because I feel that the appellant’s mental condition and accompanying total disability are not properly shown to have arisen from and out of the course of his employment. This condition arose twelve months or more after the injury to his neck and shoulder was suffered. To use the language of the majority opinion, it would require a long fuse indeed to “trigger” such a delayed action.

A further reason is that the Board made a finding of 20% permanent partial disability on the same record now considered by this Court. This finding is supported by the testimony of the claimant and Dr. An-gelucci. The majority opinion does not condemn the Board’s finding as clearly erroneous or as not being supported by substantial probative evidence. In the absence of such a conclusion, the Board’s finding approved by the circuit court should be affirmed. It is unnecessary to cite the many cases that so hold.

      . On the basis of a hypothetical question he assumed that this physical disability resulted from the injury of October 9, 1962.

      . There is no cross-appeal.

      . He has a wife and nine children to support.


author: CULLEN, Commissioner.

text:
    Robert B. GARTIN, Appellant, v. Betty L. GARTIN, Appellee.
    Court of Appeals of Kentucky.
    Nov. 20, 1964.
    Hatcher & Lewis, Elizabethtown, for appellant

      John Arnett, Elizabethtown, for appellee.
   CULLEN, Commissioner.

Robert B. Gartin appeals from a judgment which dismissed his complaint seeking a divorce on the ground of cruel and inhuman treatment. The judgment also dismissed the wife’s counterclaim in which she had asked for a divorce on a similar ground.

The trial judge’s memorandum opinion contained these recitations:

“Both plaintiff and defendant testify to facts which might constitute cruel and inhuman treatment, however each party denies the facts testified to by the other and neither party offers any corroborative evidence.

“Under the proof the Court is of the opinion that neither party has made out a cause of action.”

The appellant maintains that the trial judge imposed a rule requiring corroborative evidence to sustain a claim of cruel and inhuman treatment and that there is no such rule. We do not so construe the judge’s opinion. As we view it, the judge simply found that the parties were truthful in their denials but not truthful in their affirmative claims. This is not unusual for a divorce action, because frequently the accusations of the parties against each other find their basis more in a desire for incrimination or retaliation than in cold reality. We have read the evidence. The husband’s chief complaints were that the wife, without cause, nagged him and impaired his career as a soldier by discussing family problems with his commanding officers. The wife’s testimony showed that she had cause for what she did. On this evidence the judge was warranted in denying a divorce to the husband. We do not see how the husband can complain here of the trial court’s refusal to grant a divorce to the wife, but in any event we think that refusal also was justified, because the wife’s complaints appear to have been exaggerated.

After the case was submitted in the lower court, the wife wrote a letter to the judge stating among other things that she still loved her husband and did not want a divorce. In his memorandum opinion the judge rebuked the wife for writing the letter and stated he had reached his decision in the case in spite of the letter and not because of it. The appellant argues that the letter created a prejudice that could be removed somehow by a reversal of the judgment. The wife’s statement in the letter that she did not want a divorce was nothing new because in her deposition she had said the same thing. In our opinion there was no material prejudice and the trial judge handled the matter with proper discretion.

The judgment is affirmed.


author: STEWART, Judge.

text:
    Cecil CLEMENTS, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    Nov. 20, 1964.

      Cabell D. Francis, Stanford, for appellant.
    Robert F. Matthews, Atty. Gen., George F. Rabe, Asst. Atty. Gen., Frankfort, H. Myer Garner, County Atty., Liberty, Paul Carter, Commonwealth’s Atty., Tompkins-ville, for appellee.
   STEWART, Judge.

This is an appeal from a judgment sentencing Cecil Clements to two years in the penitentiary upon a jury verdict finding him guilty of incest. See KRS 436.060.

Two questions are raised: (1) Was there sufficient evidence to sustain the verdict? (2) Does a certain portion of the testimony of a witness for the Commonwealth, noted in detail hereinafter, constitute a reversible error?

The prosecutrix, a 35-year-old daughter of appellant, testified that on the 26th or 27th of October, 1953, appellant came to her bed early in the morning four different times and attempted to have sexual intercourse with her. At the time of these visits, she stated, her mother had already gotten up and gone to the kitchen to fix breakfast. According to her testimony, on three of these trips to her bed she was able to “beg him to leave me alone,” but that “the last time, I didn’t get away from him.” She said on that occasion he beat her in the face, held her and forcibly had relations with her. She was then 25 years of age and her father was 49.

She testified she cried out for her mother and, when the latter came to the door, she was told what appellant had done. She said her mother walked to the bed and asked her father why he was so “sorry and low down” to treat a child of his “that way.” Her father replied, “She told a lie, I didn’t touch her.”

The prosecutrix was married within a short time after the alleged offense was committed, and she testified it was not until 1962 that she divulged to her husband or to any other person what had occurred. She said the reason for her silence about the matter was that her father had threatened to kill her if she “told it.” He had often beat her while she lived with him, which made her afraid of him.

Appellant made a sweeping denial of all the testimony of the prosecutrix. A sister who slept in the same room and a brother whose bed was a couch in an adjoining room testified they never witnessed any misconduct upon the part of appellant toward the prosecutrix. Carrie Clements, wife of appellant and mother of the prose-cutrix, never saw an act of sexual intercourse between appellant and his daughter, but stated that her daughter had complained to her of such an act in 1953 when it allegedly occurred.

Although the testimony of the prosecutrix is definite that appellant, along about the time mentioned above, had sexual intercourse with her in her bed at their home, appellant undertakes to show that, according to certain correspondence between her and her mother, the daughter makes it appear uncertain that the offense was ever perpetrated. While the letters exchanged between the daughter and the mother, standing alone, perhaps cannot be said to establish definitely that the father is guilty, her positive testimony does tend to show the incident occurred.

It is also argued that the act of incest could not have taken place in a four-room house with no inside doors (such was the habitation where it supposedly happened) without the knowledge of the other occupants, three in number. We have been unable to find any substantial evidence in the record that anyone else was present besides the father and daughter at the time the act of incest was said to have taken place, aside from the mother who was in the kitchen preparing breakfast.

It is settled beyond cavil in this jurisdiction that the uncorroborated testimony of the prosecuting witness is sufficient to sustain a conviction of incest. See Browning v. Commonwealth, Ky., 351 S.W.2d 499; Salyers v. Commonwealth, Ky., 255 S.W.2d 605. However, some corroboration, although not required in this state, exists as to the testimony of the prosecuting witness. It appears both from her testimony and from that of her mother that she made complaint when the offense occurred, although her father denied he molested her.

Under the evidence presented, which has been shown to be conflicting, it was proper for the jury to determine the guilt or innocence of appellant. They had a right to believe the testimony of the prosecutrix and by like token to disbelieve that of appellant and his witnesses. Nor can we say the evidence does not support the verdict.

The hearsay evidence of which appellant complains was brought out by his counsel on cross-examination of Etheridge Strong, the husband of the alleged victim. The latter testified he went to see the invalid brother of the prosecutrix, who was in an institution, in January, 1962. We recite the portion of the testimony claimed to be prejudicial.

“A I went there and seen him, and he held his hand to God and told me Cecil Clements raped his sister. He said, T won’t lie to you Etheridge, I got my neck broke.’
“14 You are testifying about another fellow?
“A No, his boy is the one that told me about this. I went and seen him last January.
“15 He isn’t here, is he?
“A He can’t be here. He told me he would write an affidavit on that.
“Objection
“By the Court: The jury will not consider that”

As the transcript shows, upon appellant’s objection, the court promptly and without request therefor, admonished the jury not to consider the evidence to which the objection was interposed, even though it resulted from questioning upon the part of appellant’s own counsel. There was no motion to strike, no motion for an admonition, and no motion to discharge the jury.

The law is well settled that a defendant waives his right to an admonition or a discharge of the jury by not promptly asking for it. See Senibaldi v. Commonwealth, Ky., 338 S.W.2d 915. In the case of Hendrickson v. Commonwealth, 232 Ky. 691, 24 S.W.2d 564, this Court stated:

“It is always difficult to restrain witnesses from giving hearsay testimony. Ordinarily, the exclusion of the evidence, though repeated, followed by an admonition not to consider it, will be sufficient to protect the rights of the accused. If in the opinion of counsel this is not sufficient to remove the effect of the evidence, or the witness persists in making statements that have been excluded, he should ask that the swearing of the jury be set aside. If he fails to do this, the judgment will not be reversed on the ground mentioned unless the circumstances are exceptional * *

To the same effect is Daniels v. Commonwealth, 181 Ky. 392, 205 S.W. 402.

Under the circumstances, which are not exceptional here, the admonition of the trial court to the jury cured any substantial prejudice to appellant from the incompetent evidence, and, if not, he certainly waived any right to a discharge of the jury by failing to request it and by thereafter proceeding with the trial.

Wherefore, the judgment is affirmed.


author: DAVIS, Commissioner.

text:
    CORBIN DEPOSIT BANK, Appellant, v. Thomas L. KING et al., d/b/a King Brothers Garage, Appellees.
    Court of Appeals of Kentucky.
    Nov. 20, 1964.
    Sutton & Martin, Corbin, for appellant.
    Cole & Cole, Barbourville, for appellees.
   DAVIS, Commissioner.

The question presented on this appeal is One of priorities as between a properly filed security agreement and a subsequent lien arising under KRS 376.270. The appellant, holder of the security instrument, appeals from the judgment placing priority in the statutory repairman’s lien.

The parties stipulated the facts, which are thus summarized: Floyd Foreman, owner of a motor vehicle, executed and delivered a valid security agreement to appellant bank; on August 7, 1961, the security interest was perfected by proper filing of the agreement as a financing statement in the County Court Clerk’s office of Whitley County. KRS 3S5.9-302.

While his obligation to appellant was in full force and unpaid, Foreman engaged ap-pellees to make repairs and furnish materials for repairing the vehicle. Appellees were then engaged in the business of selling, repairing or furnishing accessories or supplies for motor vehicles as set out in KRS 376.270. Foreman did not pay for the repairs and incident materials furnished by appellees.

It is stipulated that appellees did not know of the recorded financing statement, although we ascribe no significance to that fact, since its proper filing placed appellees on constructive notice thereof. KRS 355.9-303.

Appellant obtained possession of the motor vehicle by legal process in the instant action; it was removed from the possession of the appellees by the sheriff, acting under proper court order. The motor vehicle was sold by appellant pursuant to the provisions of KRS 355.9-504. The narrow question is whether the first rights to the proceeds inure to the appellant under its perfected security interest or to the appellees under its subsequently acquired statutory lien for services and materials furnished to repair Foreman’s vehicle.

Determination of the question requires examination of KRS 355.9-310, which is as follows:

“When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise.”

In the 1958 text of the Uniform Commercial Code as published by National Conference of Commissioners on Uniform State Laws, American Law Institute, one of the purposes of the just quoted section is said to be:

“(1) : To provide that liens securing claims arising from work intended to enhance or preserve the value of the collateral take priority over an earlier security interest even though perfected.”

It is recognized by the parties that prior to the effective date of Kentucky’s Uniform Commercial Code (KRS Ch. 355, effective July 1, 1960) in similar circumstances, this court had adhered to the rule allowing priority to a properly recorded chattel mortgage. See Lincoln Bank & Trust Co. v. Netter, Ky., 253 S.W.2d 260; 4 Ky.Digest, Chattel Mortgages, ^138(1). The inquiry here is whether the pertinent sections of the Uniform Commercial Code require an opposite result. The trial court found that the provisions of the Commercial Code demand the opposite result, and we agree.

The course for construction of the Uniform Commercial Code was charted in Lincoln Bank & Trust Co. v. Queenan, Ky., 344 S.W.2d 383, in which this court said:

“The Code represents an entirely new approach in several areas of commercial law, and especially as to security transactions. Its adoption in this state signifies a legislative policy to join with other states in achieving uniformity. Code § 1-102(2) (c). The realization of this purpose demands that so far as possible the meaning of the law be gathered from the instrument itself, unfettered by anachronisms indigenous to the respective jurisdictions in which it is in force. Cf. 50 Am.Jur. 480 (Statutes, § 465). Accepting- that principle, we adopt as a rule of construction that the Code is plenary and exclusive except where the legislature has clearly indicated otherwise.”

It is patent that KRS 376.270 contains no provision which may be said to subordinate its statutory lien to an earlier security interest as prescribed in KRS 355.9-310. Therefore, by the terms of the latter section, the lien of the security interest yields to the statutory mechanic’s lien of KRS 376.270, despite the line of cases which had afforded priority to chattel mortgages in similar circumstances.

For the appellant it is urged that the provisions of KRS 376.440, 376.445 and 376.450 reflect that the statutory lien is to yield to the security interest. It is true that by the terms of KRS 376.450 the lien provided in KRS 376.440 shall “not take precedence over a mortgage or bona fide sale and delivery for value without notice * * * ” unless certain procedural steps are taken (not here pertinent). However, the Uniform Commercial Code, and particularly KRS 355.9-310, as it deals with the question of priorities, is treating the matter of security interests — not mortgages. Although there -are many similarities between a mortgage and security interest, there are many dissimilarities also. See the definition of “security interest,” KRS 355.1-201 (37). Therefore, it is our conclusion that the language of KRS 376.450 as it relates to precedence for a mortgage has no validity as to the security interest here before us. We observe, in passing, that doubt exists whether 376.440, 376.445 and 376.450 relate to motor vehicles at all, but it is not necessary to determine that question here.

■ There is no merit in appellant’s contention that the trial court’s construction of the statutes results in a violation of Sec. 19, Kentucky Constitution, as it relates to impairing the obligation of contracts. The simple answer is that the Uniform Commercial Code, containing the statutory provisions at hand, became effective July 1, 1960, and before the appellant entered into its lien contract. It is well set-led that implicitly included in the terms of contracts are the laws subsisting at the time and place of the making of the contract. City of Covington v. Sanitation Dist. No. 1, Ky., 301 S.W.2d 885, 888.

Neither do we find any basis for appellant’s assertion that the result reached amounts to a denial of due process because of lack of notice. Appellant suggests no authority for that argument; we know of none. The fact that the effect of the statute is implicit in the contract is a complete answer to this contention also.

Finally, appellant contends that permitting priority to the furnisher here contravenes established public policy of the-Commonwealth. The primary basis for this, point rests upon the language of Indiana. Truck Corporation of Ky. v. Hurry Up Broadway Co., 222 Ky. 521, 1 S.W.2d 990. There it was observed that the great importance of financing purchase of motor-vehicles demanded protection of the lien to-the financer. The tenets there promulgated were sound when written; the legislature-has now seen fit to fashion a change in that policy in light of changed conditions. We-think it may not be doubted that the General Assembly possesses competence to» make such changes.

The judgment is affirmed.