author: WADDILL, Commissioner.

text:
    FISHER EQUIPMENT COMPANY, Inc., Appellant, v. Mildred H. WEST, Administratrix of the Estate of Carl J. West, Appellee.
    Court of Appeals of Kentucky.
    June 8, 1962.
    Rehearing Denied March 22, 1963.

      Robert P. Hobson, Fielden Woodward, John P. Sandidge, Woodward, Hobson & Fulton, Louisville, for appellant.
    Arthur W. Grafton, Edgar A. Zingman, H. Wendell Cherry, Wyatt, Grafton & Sloss, Louisville, Harry B. Miller, Jr., Robin Griffin, Miller, Griffin, Marks & Stephens, Lexington, for appellee.
   WADDILL, Commissioner.

Appellee, Mildred West, as administra-trix, recovered a verdict and judgment of $125,708 for the alleged wrongful death of her husband, Carl West, due to the negligence of a crane operator employed by appellant, Fisher Equipment Company. As grounds for reversal appellant urges that: (1) Appellee is barred from recovering damages for her husband’s death because he was contributorily negligent as a matter of law; (2) appellant is not liable for the negligent act of the crane operator since he was the loaned servant of Klug Construction Company at the time of West’s death; (3) instruction #4 was prejudi-cially erroneous in that it presented an improper criterion for determining whether the crane operator was a loaned servant; (4) the trial court erred in permitting ap-pellee’s counsel to argue an improper basis for the recovery of damages before the jury; and (5) the verdict is excessive.

Appellant, who engaged in the business of renting construction equipment, was approached by the superintendent of the Klug Construction Company (hereinafter called Klug) about leasing a crane which Klug could use in the construction of a plant at Somerset. Appellant’s president viewed the construction. site and was told of the work to be done, whereupon he informed Klug’s superintendent that he could supply a crane to perform the required work. Accordingly, they entered into a verbal agreement whereby appellant furnished Klug a transit crane with an operator and an oiler for a stated hourly rate.

On the day of the accident, which resulted in West’s death, the crane had been used in performing several different jobs on the construction site, one of which required it to be operated under certain high tension wires located approximately thirty-five feet above the ground. Later that same day it became necessary to move some pipes from under these same wires. In positioning the crane for this latter task, the crane operator raised the boom and swung it over the top of the cab of the crane. As the boom approached the vicinity of the pipes, West, who was employed by Klug, took hold of the spreaders attached to the end of the steel cable suspended from the boom. He was apparently preparing to attach them to the pipes. Immediately thereafter West was electrocuted when the crane operator caused the cable to be brought into contact with the high tension lines.

Appellant vigorously contends that West was contributorily negligent as a matter of law because he voluntarily exposed himself to an obvious danger and thereby assumed the risk of the event which caused his death. The testimony upon which this contention is based shows that West knew the pipes to be hoisted by the crane were located beneath uninsulated high tension wires, that these wires could easily be seen from the ground, and that West had no duty to take hold of the spreaders while the boom of the crane was in motion. However, there is other testimony which reveals that a short time before the fatal accident the crane operator had placed the boom of the crane beneath the high tension wires without difficulty, so that the workmen on the ground, such as West, could attach the spreader hooks into the materials beneath the wires, enabling the load to be moved. The crane operator stated that had he turned the crane around he would not have had the cab of the crane interfering with his operation of the boom. He also testified that, while he was getting the fifty-foot boom of the crane into position to go beneath the high tension wires, he did not look to see where West was located although he knew it was not unusual for the men working on the ground to take hold of the spreaders when the movement of the boom had stopped. In this connection there was testimony that the boom had been brought to a stop for several minutes before the cable came into contact with the high tension wires. Several eye-witnesses testified to the effect that the failure of the crane operator to lower the boom of the crane at the proper time had caused the cable to come into contact with the high tension wires. There was no showing that West knew the crane operator had vision in only one of his eyes.

The rule as to voluntary exposure to danger is stated in Louisville Gas & Electric Co. v. Beaucond, 188 Ky. 725, 224 S.W. 179, as follows:

“Before one as a matter of law can be held to have been so contributorily negligent as to be denied a recovery because of having exposed himself to a known danger, the danger must be so imminent and obvious that a person of ordinary prudence, under like circumstances and with like knowledge, would not subject himself to it. * * * ”

This statement of the rule was approved in Kentucky & West Virginia Power Co. v. Goodman, Ky., 257 S.W.2d 553 and in Kentucky-Tennessee Light & Power Co. v. Priest’s Adm’r., 277 Ky. 700, 127 S.W.2d 616.

Upon the application of this rule to the facts shown in the instant case and the inferences that may reasonably be drawn from them, we are unwilling to say that reasonable men could not differ as to whether West acted as would an ordinarily prudent person under the same circumstances. The cases relied upon by the appellant to support a contrary view are not controlling as they are distinguishable upon their facts. Therefore, we hold that the trial court properly submitted the issue, as to whether West was contributorily negligent, to the jury.

Appellant urges that the crane operator was Klug’s servant at the time of the accident and therefore appellant was relieved of liability. In Ambrosius Industries v. Adams, Ky., 293 S.W.2d 230, we re-examined our former opinions which had considered the “loaned servant doctrine” and concluded that the factors stated in Section 220(2) of the Restatement of the Law of Agency may be considered in determining its application.

In considering the testimony bearing on these factors we observe that appellant is engaged in the business of renting mobile cranes and furnishing persons to operate them. The crane appellant supplied to Klug was valued at approximately $40,000 and its proper operation required skill and experience which none of Klug’s employees possessed. The crane operator’s wages were paid solely by the appellant. Notwithstanding these facts appellant argues that because Klug was in charge of the construction work on the site, Klug had the right of control over the details of the work. Much stress is laid upon the fact that the crane operator had followed certain verbal instructions and hand signals given to him by Klug’s foreman with respect to the movement of the crane. The obedience to these so-called instructions showed cooperation rather than subordination since the crane operator stated in effect that he would obey only such of these instructions as he thought could be executed without harm to appellant’s crane. Moreover, it is significant that, even though Klug could request appellant to remove the crane operator from the job site, only appellant had the authority to discharge him from his position as a crane operator. The fact that Klug could not discharge the crane operator is one of the reasons why the rule stated in Turner Construction Co. v. Garrett, Ky., 310 S.W.2d 786, is not controlling in the instant case. We believe that the evidence relating to the loaned servant question established that the crane operator was a servant of the appellant at the time of the accident as a matter of law.

Since we have decided that the crane operator was not the loaned servant of Klug the giving of instruction #4 could not have been prejudicial. Therefore, we do not approve or disapprove the form of this instruction.

Appellant contends that the trial court erred in permitting appellee’s counsel to assign in his closing argument to the jury a value of $246,000 to the case by multiplying $6,000, representing West’s annual earnings in 1957, by 41 years, which was West’s life expectancy. In Kentucky & I. T. R. Co. v. Becker’s Adm’r., 185 Ky. 169, 214 S.W. 900, wherein there was no evidence of the decedent’s earning capacity, it was held permissible for the administrator’s counsel to make calculations and deductions upon hypothetical earnings of the deceased to assist the jury in arriving at a verdict. As the reasoning in the last cited case is apparently sound, it would likewise be proper for appellee’s counsel to make similar calculations since it was shown that West earned $6,185 the year before his death and had a life expectancy of 41.29 years.

Other objections during the trial were directed at a statement made by ap-pellee’s counsel in his argument to the jury to the effect that the measure of damages is how much earning power the estate has lost by reason of West’s death without considering what it would cost him to earn that money. The trial court admonished the jury to be guided by the court’s instruction “that it is damage to the estate by the destruction of the power to labor and earn money.” The presumption is that the jury followed the admonition and therefore the alleged error was not prejudicial.

The final contention is that the verdict is excessive. The damages are exceedingly liberal. However, we have frequently said that verdicts of this character will not be disturbed unless they are so large and disproportionate to the probable loss to the estate as to strike us at first blush as being a result of passion and prejudice on the part of the jury. McCoy v. Carter, Ky., 323 S.W.2d 210; Temperly v. Sarrington’s Adm’r., Ky., 293 S.W.2d 863. The evidence shows West was 29 years of age at the time of his death, and during his last four years he had substantially increased his annual earnings. His life expectancy was shown to be 41.29 years. The jury’s award was about half of the amount shown by the evidence that West could reasonably be expected to earn. Under these circumstances we conclude that the verdict is not excessive.

Judgment affirmed.


source: Caselaw Access Project

author: CULLEN, Commissioner. PALMORE, Judge MONTGOMERY, Justice

license: Public Domain

text:
    Mrs. Charles WOOLEY et al., Appellants, v. Hugh C. SPALDING, Superintendent of Schools of Marion County, Kentucky, et al., Appellees.
    Court of Appeals of Kentucky.
    Nov. 30, 1962.
    Rehearing Denied March 22, 1963.
    Jesse K. Lewis (now deceased), John C. Anggelis, Lexington, for appellants.
    Ben B. Fowler, Clifford E. Smith, Frankfort, for appellees.
   CULLEN, Commissioner.

This is the third appeal in an action commenced in 1954 by citizens and taxpayers of Marion County seeking to enjoin various practices in the operation of the county school system and to secure within that system equal and uniform educational opportunities for the children residing in the different sections of the county school district. See Wooley v. Spalding, Ky.1956, 293 S.W.2d 563, and Spalding v. Wooley, Ky.1958, 309 S.W.2d 42, which in lieu of repetitious citation herein we shall call the first and second opinions.

A proposed merger of the county school system with the Lebanon independent system, approved by the State Board of Education, has brought into the case factors not presented for consideration in the prior appeals.

The gist of the first opinion is that the St. Charles and St. Francis high schools in the predominately Roman Catholic western part of the county were in effect being operated as quasi-parochial schools with public funds and that the school board had arbitrarily and unlawfully discriminated against the citizens of the largely Protestant eastern part of the county by closing the high school at Bradfordsville and sending their children (that is, those who did not wish to go to St. Charles or St. Francis) to the independent city high school in Lebanon. It directed the discontinuance of those practices found to be sectarian in nature, and therefore illegal, and the re-establishment of “a high school system that will afford all children in Marion County equal educational opportunities/' The latter mandate was to be carried out in one of two ways, (a) “So long as the board of education chooses to continue a system of regional or area high schools, * * * (by) re-establishment of a four-year high school in the eastern section of the county,” or (b) by establishment of a system based on a centrally located high school.

Upon remand of the case the Franklin Circuit Court entered a judgment requiring the board to construct and thereafter maintain in or near the city of Lebanon (the county seat) a central high school for all county students and to discontinue the St. Charles and St. Francis high schools by September 1, 1959. On appeal and cross-appeal by the respective parties our second opinion affirmed this judgment with certain modifications, including the following:

“If, after exerting all reasonable efforts and exploring all reasonable prospects it appears convincingly that the construction of a central high school is financially impossible, or that the prescribed time limit for construction cannot be met, the circuit court can modify the judgment as seems necessary.”

In May of 1958 the electorate of the Marion County School District rejected a proposal for an additional 50-cent school tax under KRS 160.477. Nevertheless, the county school board, persevering in its efforts to carry out the judgment, acquired a centrally located site at the edge of Lebanon and engaged an architect to prepare alternate designs for a school building to serve the entire district and a smaller one to serve as a regional high school for the eastern part of the county. Meanwhile it became manifest that new facilities could not be constructed and made ready by September 1, 1959, and in April of that year the board moved that the judgment of the circuit court be modified to extend the time. In responding to this motion the plaintiffs asserted (1) that a new central high school building would cost $1,000,009 and that the maximum available bonding capacity of the school district was only $400,000, (2) that it was financially impossible to construct a new central high school, and, therefore, (3) that the only modification of the judgment permissible under our second opinion was a direction to improve and add to the facilities at Bradfordsville so as to make it a regional school for the eastern part of the county. They so moved.

The result of the counter-motions was an “Order Modifying Judgment” entered on April 23, 1959, in which the existing judgment was reiterated and affirmed in all respects except that the time given to the county board in which to get a single central high school in operation and close down the St. Charles and St. Francis high schools was extended to September 1, 1960. The board then proceeded with its plans and in August of 1959 took bids on the alternate plans, though the order of April 23, 1959, by categorically repeating the language of the judgment with respect to a single facility “for all high school students in Marion County,” had necessarily excluded any possible authorization at this time for a regional high school.

The respective amounts bid were $803,-000 and $550,000. The State Board of Education refused to approve either plan, because in its opinion the maximum available bonding capacity of the county school district was but $475,000. (We use the word “available” to indicate the bonding capacity over and above existing revenue bond obligations.) However, in view of increased appropriations made by the 1960 legislature for educational improvements the state board in May of 1960 revised its estimate to $550,000, and at this juncture the adversary parties again presented counter-motions, plaintiffs demanding that the Bradfords-ville high school be re-established and defendants that the judgment he modified to permit construction of a regional high school on the site theretofore acquired at the outskirts of Lebanon.

While the foregoing motions were pendr ing there was a change in judges for the Franklin Circuit Court pursuant to the 1960 legislation constituting Franklin County a single judicial district (c. 170, Acts of 1960), and the September 1, 1960, deadline existing under the order of April 23, 1959, evidently passed by without a further extension. Be that as it may, the motions were at length resolved by an order entered on December 2, 1960, granting a further extension and reciting (a) that “for the present” it was “an apparent fiscal impossibility for the defendants to proceed with development of an adequate central county high school,” (b) that the inference to be drawn from our second opinion was contrary to a re-opening of the Bradfordsville school, and (c) that in order to carry out the previous mandates of this court it was necessary to approve the construction of a regional high school for the eastern portion of the county according to the plan of the defendants, which was, of course, to locate it on the site at the edge of Lebanon. It was so ordered.

Now, the upshot of the controversy as it comes before us on the present appeal is this: Just as the county school board was about to receive new bids on the regional high school to be located at the site near Lebanon, the Lebanon city school district intervened, proposing a merger with the county school district, which after preliminary sparring has been agreed on by the two boards and recommended by the state board, subject to the approval of the court. In an excellent and thoughtful “Opinion, Findings of Fact, Conclusion of Law and Final Judgment” the circuit court approved the proposal over the objections of the plaintiffs, who thereupon brought this appeal.

The plan is that the existing facilities of Lebanon city high school will be improved and expanded to serve the approximately 400 high school students of Lebanon and the eastern part of Marion County.' The high school at St. Francis, which is located in leased premises, will be discontinued and the one. at St. Charles will serve the approximately 500 high school pupils of the western part of Marion County. The programs, facilities and operation of the two high schools are to be substantially equal in all respects. A new elementary school will be constructed in the city of Lebanon; The city independent school district will be merged in the county district and thereby cease to exist. The new county district will then have an available bonding capacity of $875,000, which will be reduced some $400,000 by the two construction projects mentioned, leaving ample capacity to finance further improvements.

The question presented is whether the foregoing plan satisfies the mandates of this Court on the first and second appeals.

As concerns the one option granted in the first opinion, and directed in the second opinion to be exercised if possible, namely, to establish one central high school for the entire county district, it is our opinion that the record supports the conclusion that all reasonable efforts have been exerted and all reasonable prospects explored, but nevertheless the construction of a central school is financially impossible.

This leaves the second option, “re-establishment of a four-year high school in the eastern section of the county.” Wooley v. Spalding, Ky., 293 S.W.2d 563 at 567.

In considering whether the proposed plan conforms to the second option it must be kept in mind that the basic requirement laid down by our former opinions was the furnishing of equal educational opportunities. This embraces equality of programs, curricula and facilities, equality in expenditure of funds, and equality from the standpoint of accessibility and convenience.

The original tuition arrangement with the city school board which was found un> satisfactory in our first opinion, and the proposed joint operating- agreement with the city school board that was rejected in our second opinion, did not provide any guaranty or assurance of equality in programs, curricula or facilities, nor any satisfactory standards for measuring equality in the expenditure of funds. Under both arrangements the school in Lebanon continued to be a city school geared to the needs and plans of the city school system, and the program and curricula of which were subject to control by the city school board. Expenditures by the county school board for county students attending that school would not have a suitable basis for comparison with expenditures in the maintenance and operation of the St. Charles school.

Under the merger plan, however, the Lebanon school becomes a county school, under sole control of the new board for the merged district. The same standards will be available as to it and the St. Charles school for measuring equality of programs, curricula, facilities and expenditure of funds. Therefore, we concur in the finding of the circuit court that the merger plan is a suitable system for providing equality with respect to programs, curricula, facilities and expenditure of funds.

This leaves only the question of equality from the standpoint of accessibility and convenience. While in the first opinion we stated the requirement as being the establishment of a school “in” the eastern section of the county we were of course concerned only with the selection of a site that would be convenient and accessible to the people living in the eastern part of the county, considering highway conditions and locations.

From the standpoint of travel facilities it appears that a site in the city of Lebanon is perhaps the best that could be selected for the accessibility and convenience of the people living to the northeast and to the southeast of Lebanon. If a site directly east of Lebanon were selected, most of the people living to the northeast and the southeast of the city would be required to go through the city to reach the site. And putting the site in Lebanon will be only slightly less convenient for the people living directly to the east of the city than would be a site a few miles outside the city. On the other hand, to locate the school to the southeast or northeast of Lebanon would be seriously inconvenient for the majority of the people in the eastern part of the county.

We conclude that the merger plan calling for a regional county school in Lebanon satisfies the requirement of a school “in” the eastern part of the county.

A question has arisen concerning continuance of operation of the St. Francis school during the current (1962-63) school year. The original judgment here on appeal directed that operation of the St. Francis school be discontinued permanently after June 30, 1962. On August 30, 1962, pending this appeal, this Court entered an order granting permission to the Judge of the Franklin Circuit Court to hear and determine a motion to modify the judgment so as to permit operation of the school for the 1962-63 school year. The circuit judge did so modify the judgment.

The appellants in this case attempted to take a separate appeal from the modified judgment. An order has been entered dismissing that appeal, because we consider that the judgment continued to be under the jurisdiction of this Court notwithstanding the grant of permission to the circuit judge to make a modification, and the correct procedure to obtain a review of the modified portion of the judgment was to file a supplemental record on the original appeal and to present grounds of review in a supplemental brief.

Despite the irregular procedure, we shall treat the modified portion of the judgment as here for review. But in our opinion it would be entirely impracticable at this stage, during the middle of the school year, to direct closing of the St. Francis school, even if some basis of error in the modified portion of the judgment could be shown.

The judgment as modified unequivocally requires that the St. Francis school be discontinued permanently on June 30, 1963. This shall be treated as a final and conclusive disposition of the question of further operation of that school.

The judgment is affirmed.

BIRD, MONTGOMERY and PAL-MORE, JJ., dissenting.

PALMORE, Judge

(dissenting).

As an original proposition I would have no dispute with the solution proposed in the latest plan. Perhaps this court erred in its first opinion by assuming an administrative function when it went so far as to lay out specifically what the school board must do instead of simply prohibiting the practices found to be illegal. However, I cannot help but feel that the plaintiffs, who were given to believe in 1956 that they had won their lawsuit, are now having it taken away from them. After six years it seems a little late for the court to tell them it didn’t mean what it said.

BIRD, J., joins in this dissent.

MONTGOMERY, Justice

(dissenting).

The Marion County Board of Education discontinued the Bradfordsville High School in 1954. That order precipitated this action. The principal question involved throughout this litigation has been whether the students in the eastern half of Marion County should have equal educational opportunities with the students in the western half of the county. Unfortunately, the religious issue has been injected, but it really has no part in the consideration of the case on the merits of the above stated question. Likewise, the Lebanon City School District has intervened in a problem to which it was not originally a party.

This matter has been thoroughly considered over a long period of .time. In a unanimous opinion rendered June 22, 1956, the action of the Marion County Board of Education in closing the Bradfordsville High School “without providing equal and uniform educational opportunities for children living in the eastern section of the county with those who live in the western part of the county” was held to be “clearly arbitrary, discriminatory and in violation of KRS 158.010.” It was condemned as a violation of Section 183 of the Kentucky Constitution. Wooley v. Spalding, Ky., 293 S.W.2d 563. This matter was reconsidered on petition for rehearing, which was denied October 5, 1956, by a unanimous vote.

In that opinion the circuit court was directed to order the Marion County Board and its superintendent “to re-establish, as soon as practicable, a high school system that will afford all children in Marion County equal educational opportunities.” As set forth in the majority opinion, this could be accomplished by maintaining one centrally located high school or two regional high schools.

This matter was again considered in Spalding v. Wooley, Ky., 309 S.W.2d 42, in a unanimous opinion rendered on November 15, 1957. It is summed up in this paragraph, to-wit:

“Our former opinion gave the county board of education a choice between two alternatives. The board did not choose either one. Accordingly, we think it was within the power of the circuit court to make the choice for the board, as the court did in directing the establishment of a single, centrally located high school.”

The effect of that decision was to reaffirm the first decision of the Court and to reject a suggested plan similar to the one now approved in the majority opinion. This decision was fully reconsidered and petition for rehearing was denied unanimously on February 7, 1958.

This matter was presented again on appeal, and by unanimous vote in an opinion .rendered on June 22, 1962, the previous decisions were upheld. The history of this litigation was fully reviewed therein. It is a petition for rehearing filed on that opinion that has now been sustained and a new ■majority opinion rendered by a four to three vote. Since the origin of this litigation in 1954, this matter has been considered by this Court on five separate occasions prior to the four to three vote by which the petition for rehearing was sustained. During that period ten judges have participated in the deliberations and have .voted in favor of the previous opinions. ,To put it another way, those ten judges have cast a total accumulation of thirty-five votes, without a dissent, in favor of the first three opinions. By adding the three dissenting votes against the majority opinion, the score now stands thirty-eight to four in favor of the original holding as opposed to the majority opinion.

Throughout this litigation there has been no bona fide effort to carry out the original mandate of ⅛⅛ Court by the common sense method of re-establishing a high school at Bradfordsville where there has been a •school accessible by paved roads from all of the eastern part of Marion County. The student population to support such 'school is ample unless transported elsewhere by appellees. Instead', the appellees have ignored this very practical solution of the problem created by them. The problem thus resolves itself into one of whether this Court will enforce its mandate or will permit the Marion County Board of Education to sidestep it with a good stiff arm (to use football terms) and go on its way.

In addition to this disturbing aspect of the case, the majority opinion ignores the law of the case rule, which has had a firm place in the law for many years. If the majority opinion is permitted to stand, it will destroy the stabilizing effect of the law of the case rule, and it will become a rule of convenience with little authority and without respect. It will indeed be a sad day for the Court when it removes this backbone from the body of the law. Respect for the Court and its decisions prompt me to write this dissent.

I thought the original decision in this case was sound. I am still of that opinion and, therefore, cannot agree with the majority opinion.


author: PALMORE, Judge.

text:
    CITY OF FRANKFORT, Kentucky, Appellant, v. Harry G. TRIPLETT, Appellee.
    Court of Appeals of Kentucky.
    Feb. 22, 1963.

      Allen Prewitt, Frankfort, for appellant.
    E. Gaines Davis, Jr., Smith, Reed & Leary, Frankfort, for appellee. • ;.0
   PALMORE, Judge.

The City of Frankfort was reclassified from a 3d to a 2d class city in 1956. Later in the same year its electorate adopted the city manager form of government, KRS 89.400 et seq. In January of 1958 the police judge appointed the appellee, Harry Trip-lett, as clerk of his court, whereupon the board of commissioners enacted an ordinance fixing the clerk’s salary at $250 per month and purporting to prescribe his duties. (We say “purporting” because, among other things, the ordinance directed the clerk' to collect all fines, forfeitures and costs imposed by the police court, a duty that KRS 26.530(2) assigns exclusively to the chief of police.) In 1959, pursuant to a general increase for city personnel, the police coprt clerk’s salary was raised to $275 per month, but on February 9,- 1960, a newly elected board of commissioners enacted an ordinance reducing it to $30 per month. Triplett continued to carry out his functions as police court clerk hut declined to accept the reduced salary and later brought this action contesting the validity of the 1960 ordinance. The circuit court declared the ordinance unreasonable, arbitrary and void and entered judgment directing that he be paid back wages at the rate of $275 per month to the date of judgment. The city appeals.

To say that some degree of confusion attended Frankfort’s transition from a 3d class city with a councilmanic government to a 2d class city with a city manager form of government would be an understatement. Cf. Gerard v. Judd, Ky.1959, 331 S.W.2d 119. With respect to the police court, the reclassification introduced two major changes, as follows:

‘(I) Whereas the police judge theretofore had been clerk of his own court, KRS 26.-580, he was now empowered to appoint a clerk, who was entitled to receive a salary fixed and paid by the city. KRS 26.570.

(2) Whereas all fines, forfeitures and costs recovered in the police court had been collected by the city marshal, KRS 26.530 (3), they were now to be collected by the chief of police. KRS 26.530(2). For some unaccountable reason, however, KRS 26.530(2) either remained undiscovered or was ignored by the officialdom of the city until some time after the instant litigation was commenced, and the police court clerk performed this function pursuant to the aforementioned ordinance of January, 1958.

The principal 'question in the case is whether the change in form of government affected the status of the police court clerk. The city contends that it did, in that the office or position was ipso facto abolished per KRS 89.420, and that even if this were not so, the fixing of the clerk’s salary was a matter of municipal legislative discretion which may not or should not be disturbed by the court.

KRS 89.420 literally abolishes all nonelec-tive city offices in 2d, 3d and 4th class cities that have adopted the city manager form of government. KRS 89.040 contains an identical provision with respect to 2d and 3d class cities upon adoption of the commission form of government. Nevertheless it was held in Black v. Sutton, 1945, 301 Ky. 247, 191 S.W.2d 407, that the latter statute did not have the practical effect of eliminating the nonelective office (as an office) of city attorney. Whatever may have been the ostensible rationale by which this result was reached, it is apparent that the real basis of the opinion was that the court did not believe the legislature ever actually intended (though it had the power) to reduce the position of city attorney from officer to employe and thus permit permanency of tenure.

Myopic exactitude in the construction of statutes would produce many an unfortunate and unintended result. An interpretation that would produce an effect manifestly inconsistent with sound public policy is to be avoided unless it is utterly clear that the legislature actually so intended. The more unwise and unsound the result of a literal construction appears to be, the more specifically must such an intention be expressed in the statute in order for the courts to be justified in construing it literally. This is merely a corollary of the rule that the courts will not give a strict literal construction to a statute if it would lead to an absurd or unreasonable conclusion. Cf. Commonwealth, etc. v. Wilkins, Ky.1959, 320 S.W.2d 125.

The public policy pervading this case, and against the background of which KRS 89.420 must be examined, is one of the fundamental principles of our form of government, generally secured by Const. §§ 27 and 28 and made specifically applicable by KRS 84.020, which reads as follows:

“The government of each city of the second class shall be divided into a legislative, an executive and a judicial branch. No officer of one of these branches shall exercise any power properly belonging to either of the others, except as expressly directed or permitted by law.”

The clerk is an arm of the police court. He performs duties that would have to be done by the judge himself if he had no clerk. These include the preparation of bonds (KRS 28.035), the keeping of minutes of proceedings (KRS 28.050), step sheets (KRS 28.060) and witnesses’ attendance records (KRS 28.110), and the taxation of costs (KRS 28.120). He also exercises powers that otherwise could be exercised only by the judge, including the issuance of summonses, subpoenas and warrants (KRS 26.330), and the taking of affidavits and administration of oaths (KRS 28.045). While he does not have enough of the powers and responsibilities of a judge to be himself a “judicial officer,” all that he does is part of the judicial function. Obviously he is part of the city’s “judicial branch” within the meaning of KRS 84.020.

It is to be presumed that in authorizing clerks for police courts in cities of the first and second classes KRS 26.540 and 26.570 recognize that in larger cities the volume of work creates a need for it. This need, of course, is not affected by a change in form of government, and there is no reason to suppose that the legislature intended to deprive the police judge of the services of a clerk for the irrelevant reason that the city manager form of government has been adopted. It follows, then, that if the office is indeed abolished by KRS 84.020, it must have been intended that its duties be undertaken by some other employe within one of the administrative departments (KRS 89.580) under the supervision of the board of commissioners. In other words, there must have been a legislative purpose to shift dominion over the clerk from the court to the board of commissioners. In the determination of whether such a purpose actually existed, inquiry into whether there was any reason for it provides an apt source of enlightenment. As suggested in Swift v. Southeastern Greyhound Lines, 1943, 294 Ky. 137, 171 S.W.2d 49, 51, when the literal meaning of a statute is a substantial departure from long-established state policy, “the doubt thereby arising as to the legislative intent requires an examination of available information bearing on the purpose desired to be accomplished by the legislation in question.”

The city manager form of government is designed to achieve greater efficiency in the operation of the city’s executive and legislative departments. McQuillin, Municipal Corporations (3d ed.), § 9.21, Vol. 2, p. 529. Its focus is on the “administration of the business affairs of the city.” Cf. KRS 89.570. Mention of matters judicial is conspicuously absent from KRS 89.500, which vests in the board of commissioners “all the legislative, executive and administrative power of the city,” etc. The only thing a court is supposed to administer is justice, and justice is not a “business affair.” The executive and legislative heads of the city have no responsibility for the manner in which justice is administered in the police court. The elected police judge alone is answerable, and likewise must he alone be responsible for the performance of the clerk. It is an inevitable conclusion that the mayor and commissioners simply have no legitimate supervisory interest in the police court clerk. This circumstance removes the case from analogy with Sproles v. Mauney, 1931, 239 Ky. 138, 38 S.W.2d 969, and other related precedents cited by the city.

There being no reason for abolition of the clerk’s office or for its transfer to the supervision and control of the board of commissioners, and abundant policy considerations to the contrary, it is our conclusion that KRS 89.420 is not specific enough to express a legislative intent to remove police courts in city manager operated cities from the purview of KRS 26.570. Cf. Black v. Sutton, 1945, 301 Ky. 247, 191 S.W.2d 407.

' Under our view of the case it would make no difference' whether the police court clerk is an “officer” or an “employee,” and we find it unnecessary to consider that question.

The remaining issue is whether the ordinance of February 9, 1960, fixing the salary of the clerk at $30 per month was valid.

“The fixing of salaries of public officials is impressed with public interest, and officials vested with authority to fix such salaries should act justly and reasonably and not arbitrarily in so doing.” McQuillin, Municipal Corporations (3d ed.), § 12.179, Vol. 4, p. 24.

Where compensation of a municipal officer is not fixed by statute, the power to fix it generally is vested in the municipal legislative body, but it may not effectually provide that there shall be no compensation at all, or practically destroy the office by fixing the compensation at so low a figure that no one will take the office. 62 C.J.S. Municipal Corporations § 536, p. 984.

“It is a well-settled principle of law that where the Legislature creates an office, a city council can not abolish or nullify it either by direct or indirect means. It stands to reason that a municipal council cannot fix the salary * * * so low that a competent person can not -afford to accept the office. Tf the council attempts to do this, the court may interfere to prevent the abuse by the council of its discretionary right to fix the ⅜ * * saiafy.” State ex rel. Bass v. Mayor and Board of Aldermen, 1944, 204 La. 940, 16 So.2d 527.

The foregoing principle has been recognized with approval by this court in Taylor v. Adair County, 1905, 119 Ky. 374, 84 S.W. 299, 27 Ky.Law Rep. 36, and Graves v. City of Paducah, 1905, 28 Ky.Law Rep. 576, 89 S.W. 708, and we agree with the trial court that it applies to this case. From the statutory duties and powers we have already mentioned, it is readily apparent that the office of police court clerk in a city of the second class requires a person of more than passing capabilities and character, one not likely to be attracted by the salary of a garbage collector. And considering the fact that the appellee was required to attend regular sessions of the Frankfort Police Court on four afternoons of each week, the attempted reduction of his salary from $275 to $30 per month was arbitrary and unreasonable and the ordinance was subject to judicial attack as an abuse of discretion. Const. § 2.

The judgment is affirmed.


text:
    TEXAS GAS TRANSMISSION CORPORATION, Appellant, v. James ROSE et al., Appellees.
    Court of Appeals of Kentucky.
    Feb. 22, 1963.

      Peter, Heyburn & Marshall, Gavin H. Cochran, Samuel R. Wells, Louisville, H. Elliott Netherton, LaGrange, for appellant.
    Philip P. Ardery, Louisville, for appellees.
   WADDILL, Commissioner.

The Texas Gas Transmission Corporation instituted this proceeding under the provisions of KRS 278.502 and 416.230 to condemn a second pipeline easement across the farm owned and occupied by J. W. Rose and his wife. On August 24, 1959, a judgment was entered by the Trimble County Court confirming the report of the Commissioners awarding the landowners $6,000. The company filed its appeal in the Trimble Circuit Court within the 30-day period allowed by KRS 416.280 alleging that the award was excessive. The landowners did not appeal but they did file an answer in the circuit court on September 25, 1959, the 32nd day after the date of the county court judgment, claiming that the award was inadequate with respect to the value of the easement and as to the damages to the remainder of the farm. The case was tried in the circuit court as if both parties had appealed and the landowners recovered a verdict and judgment of $6,495.

Since the landowners failed to file an appeal within 30 days after the county court judgment, the circuit court jurisdiction was limited to the question raised by the company’s appeal as to whether the county court award was excessive, and the maximum award the landowners could recover in the circuit court was $6,000, the amount of the county court judgment. Commonwealth, Department of Highways v. Berryman et al., Ky., 366 S.W.2d 525; also see Keeney v. Commonwealth, Department of Highways, Ky., 345 S.W.2d 481, and Commonwealth, Department of Highways v. Clarke, Ky., 340 S.W.2d 442.

The company has appealed from the circuit court judgment contending that it was deprived of a fair trial. It is argued that the witnesses introduced in behalf of the landowners lacked sufficient qualifications to express an opinion as to value of the land involved and also that there was no reasonable basis given upon which to rest their unrealistic estimates of value and damages. One of the landowners testified that he was generally acquainted with the value of land in Trimble County from observing the sales of property and from being specifically informed of the price paid for two farms which were sold during 1959. This witness valued the 5.4 acres being condemned for the easement at $5,400 and he assessed the damages to the remainder of his 125 acres at $6,200. M. R. Maxey, who graduated from the University of Kentucky with a degree in Agriculture and who had been serving as the Trimble County Agricultural Agent for the past seven years, testified that he was familiar with the Rose farm and that its fair market value immediately before the present easement was taken was $26,000 and that its value immediately after the easement was taken was $15,750. Several other witnesses, including a building contractor and an employee of the Soil Conservation Service who were familiar with the property involved in this proceeding, expressed opinions concerning the value of the land within the easement and resulting damage to the property which would support a larger verdict than the one returned in this case. While some of these estimates seem rather high, we do not agree with the company’s contention that the testimony of the witnesses for the landowners was without probative value. In reaching this conclusion we necessarily hold that these witnesses had established their qualifications and that they had given acceptable reasons for their estimates.

It is next contended that the court erred in rejecting the testimony of the county tax commissioner concerning the valuation the landowners had recently placed on their farm for tax purposes. Apparently the trial court excluded his testimony because there had been no change made in the valuation of the Rose farm subsequent to the reassessment made by the Commonwealth during 1953. Since it was shown that the landowners had signed the 1959-assessment list containing the valuation of their property they will not be heard to say that they have not fixed its value themselves. Commonwealth, Department of Highways v. Rankin, Ky., 346 S.W.2d 714. Evidence of the valuation placed on their property by the landowners for tax purposes was an important factor which the jury should have been permitted to consider in arriving at a proper verdict. Consequently, the exclusion of it was prejudicial. Commonwealth, Department of Highways v. Lanter, Ky., 364 S.W.2d 652.

We find no merit in the other contentions •raised by the company.

The judgment is reversed with directions to grant a new trial.


author: GREENHILL, Justice.

text:
    W. C. HENGER et al., Petitioners, v. Lewis A. SALE, Respondent.
    No. A-9098.
    Supreme Court of Texas.
    Feb. 20, 1963.
    Rehearing Denied March 20, 1963.
    James W. Leftwich, of Turner, Rodgers, Winn, Scurlock & Terry and Brundidge,
    Fountain, Elliott & Bateman, Dallas, for petitioners.
    Wm. Andress, Jr., Dallas, for respondent.
   GREENHILL, Justice.

Lewis A. Sale brought this suit against the Bachman Center Corporation and three of its officers and directors, W. C. Henger, Sam P. Wallace, and Robert Moore. Sale was also a stockholder, officer and director of the corporation. He alleged that he sued on behalf of the stockholders to recover for the corporation on two separate counts: (1) to recover for the failure of the defendants to secure and carry out a contract for the sale of dirt from property of the corporation; and (2) to recover from Hen-ger, Wallace, and Moore approximately $99,000 which he alleged was paid by the defendants to themselves without corporate authority and in breach of their fiduciary duty to the corporation. These defendants asserted that Sale had persuaded them to lend this money to the corporation for the purchase of a site upon which a shopping center was to be built; that the money was so used; and that when the property was sold, the corporation repaid these loans from the defendants.

Trial was to a jury. Judgment was rendered on the verdict of the jury against Henger, the president of the corporation, for $34,593.15, plus interest, growing out of the count for failure to obtain and carry out the dirt contract. Judgment was rendered in favor of the defendant Moore on the verdict on both counts. Judgment was rendered in favor of the defendants Hen-ger and Wallace on the second count upon their motion to disregard certain jury findings.

The Court of Civil Appeals at Waco reversed that portion of the judgment against Henger for $34,593.15. It held that there was no evidence to support the jury’s findings thereon. As to that portion of the case, judgment was rendered for Henger 357 S.W.2d 774. We have examined the record and briefs of the parties, and are of the opinion that the Court of Civil Appeals correctly announced the law of the case on this point. No useful purpose would be served by restating it here. In view of the length of this opinion, we here adopt that portion of the opinion of the Court of Civil Appeals designated “1. Defendant’s Appeal” which is found on pages 775 and 776 of 357 S.W.2d.

As to the second count, the suit to recover from Henger, Wallace and Moore, the Court of Civil Appeals reversed and remanded the cause. It held that the defendant officers and directors did not discharge their burden of showing that the payments to themselves did not constitute unauthorized payment to themselves. 357 S.W.2d, pp. 777 and 778. It was upon this point that we granted a writ of error.

The facts regarding this second count are, in substance, these: In September of 1954, Sale got an option to purchase approximately 50 acres of land in Dallas from the Slaughter Estate for $605,000. The option contract called for the payment of $105,000 in cash, the balance to be secured by notes.

Sale started work to develop the project of a shopping center on the land he hoped to purchase under the option. He got George Dahl to prepare preliminary plans (Dahl’s fees of $6,803.78 were eventually paid out of money of the Bachman Center Corporation from additional money advanced by the defendants or borrowed from a local bank). Sale also got a commitment from a large insurance company to finance the proposed venture provided major department stores were obtained as lessees of the Center and provided certain minimum rentals were contracted for. Sale add Dahl had some sort of disagreement; and Sale had neither the $105,-000 downpayment to exercise his option nor the necessary prospective tenants for the proposed Center. Through Carl Crof-ford, Sale met Thomas F. Stewart, a financier’ and partner in Southwest Securi-

ties. Stewart introduced Sale to Henger, Wallace and Jack Vaughn of Dallas. Shortly before the expiration of his option, after conferences with Sale, the defendants Wallace and Henger and Jack Vaughn agreed to lend the money for the downpayment. Wallace and Henger each put up $26,250, and Vaughn put up $52,500.

Fischbach & Moore of Texas Inc. (herein referred to as Moore) and Jack Corgan subsequently replaced and paid Vaughn. Each of them put up $26,250.

The corporation had an authorized capital stock of 4,000 shares, of which 2,000 were issued at a par value of $5 per share. As pertinent here, the ownership of the stock was as follows:

Moore 405 shares (20.25%) $2,025.
Henger 405 shares (20.25%) 2,025.
Sale 700 shares ( 35% ) 3,500.
Wallace 405 shares (20.25%) 2,025.
Corgan 85 shares ( 4.25%) 425,
Total paid-in capital stock $10,000.

For all intents and purposes, there were but five stockholders, four of whom are parties to this suit. Corgan, the fifth stockholder, here seeks no relief.

Bachman Center Corporation was thus incorporated in September of 1955. The land on which Sale had an option was purchased. The checks of the defendants Hen-ger, Wallace and Moore were handed to the secretary of the corporation who in turn handed them to the representative of the closing title company and the seller. The $105,000 downpayment for the land was furnished, as pertinent here, as follows:

Henger $26,250.
Wallace 26,250.
Moore 26,250.
26,250,
$105,000.

Sale put up none of the money.

Each of the defendants, as well as Mr. Stewart, testified that they loaned the money to the corporation, and expected to be repaid. Sale did not deny that the money was loaned to the corporation. His points are that the corporation was not authorized to borrow the money, and there was no authority for its repayment. This will be discussed below.

When the corporation was formed, all of the stockholders were named officers and directors. Thomas F. Stewart was made president, and remained as president for two years. He was not a stockholder. All the stockholders were made vice presidents. Promissory notes were issued to Corgan, Henger, Wallace, and Moore in September of 1956, signed “Bachman Center Corporation” by Stewart as president. Each note was for $26,250, due in one year, and bearing 5% interest. These notes were renewed' from time to time. Sale points out that there was no resolution of the board authorizing the notes, and this is true.

The financial statement of the Bachman Center Corporation for September 30, 1956, prepared by Alford, Meroney & Co., certified public accountants, lists the following:

Liabilities
Current Liabilities : notes payable:
Fischbach & Moore, 5%, due Sept. 16, 1957 $26,250.
Sam P. Wallace & Co., 5% due Sept. 16, 1957 26,250.
Henger . . . 5%, due Sept. 16, 1957 26,250.
Jack Corgan, 5%, due Sept. 16, 1956 26,250.
Republic Natl. Bank, Dallas, 4%, due Feb. 7, 1957 10,000.
Jack Corgan — unsecured 6,250.

These notes were carried as current liabilities, notes payable, on the balance sheets of the corporation in its statements of September 30, 1957, and September 30, 1958. The payments here in controversy were made on October 16, 1958.

If the shopping center were successful, each of the parties hoped to profit: Sale was to receive commission from the leases; Henger was a building contractor; Moore was an electrical contractor; Wallace was a mechanical contractor; and Corgan was an architect.

The promotion of the Center did not do well. None of the officers or directors was paid any salary; each was to pay his own expenses, and none was paid any expenses except Sale. Sale’s expenses were paid to San Francisco and St. Louis. He was attempting to obtain major companies as tenants for the shopping center. Sale made several other trips to New York, Chicago, Houston and other cities. He testified that he was out a substantial amount for these trips. A resolution of the directors of which Sale does not complain, however, required that no expenses be paid anyone without approval of the executive committee. Except as noted above, none was approved. Sale has no pleadings for expenses.

As the corporation existed, it had no income or profit. The only monies expended were obtained from loans from a local bank or from Henger, Wallace and Corgan. Sale contributed no additional funds to the corporation after his purchase of stock.

The minutes of the corporation for September, 1956, show that all of the stockholders including Sale were present at a meeting on that day. The minutes continue, “Jack Corgan brought up the matter of the $32,500 loaned by him to Bachman Center, with $26,250 secured by a note signed by Fritz Stewart as President. * * * That note [was] due and payable September 16, 1956. The remaining $6,250 being an unsecured open loan to Bachman Center Corporation.” The matter was discussed. Wallace pointed out that the success or failure of the venture should be settled within about 60 days. Henger agreed; and said that if the desired leases were not consummated, he was ready to sell the 50 acres.

There is no indication that Sale did not know what the $26,250-note was, where it came from, or what it was used for. Cor-gan was eventually paid his $26,250 by the corporation, and he was not made a party to this suit by Sale. His note was for the same amount and purpose as that of Henger and Wallace.

The minutes of the stockholders’ meeting of December 21, 1956, reflect the beginning of this suit. They read:

“All of the stockholders of the corporation being present, the meeting thereupon duly convened.
“Thereupon, Mr. Lewis Sale stated that in his opinion a budget should be established for the company and provisions made for necessary funds. He further said that it was his opinion that the company lacked organization and administration; that such lack of organization and administration had resulted in the failure to reduce to writing an agreement which he contended Messrs. Henger, Wallace Fischbach and Moore had made with the company to furnish working capital to the company; that it was his understanding that such named persons would advance necessary funds for the purchase of the shopping village site and any other necessary working capital; and that the company was to execute and deliver to such persons notes for any amounts so advanced, which were to be repaid by first, applying to the notes, fees to be collected by such persons as contractors for the construction of the buildings contemplated, and the balance, if any, was to be paid to such persons out of the income of the company. Messrs. Henger, Wallace, Fischbach and Moore each disagreed with Mr. Sale’s contentions and statements, and drafted the following statements which the Secretary was instructed to include in the minutes:
"Mr. Henger’s Statement
“ ‘When I was approached in regard to the Bachman Center Corporation project, it was explained to me that I would purchase 405 shares of stock and that I would make a loan of $26,250 to the corporation, such money to be used to make the first payment on the purchase of the property. I understood that Henger Construction Company was to be the General Contractor on this project. It was further explained to me that the permanent financing would be sufficient to clear the purchase price of the property and pay for all construction costs, with the possible exception of the fees to the general contractors and the mechanical contractors. I have never made any agreement, other than the above mentioned loan to finance any portion of the project.’
"Mr. Wallace’s Statement
“ ‘My understanding was that I was to advance the corporation approximately $26,250 and accrued interest at 5% to be used for the purchase of the property and that I was to receive a note from the corporation for the amount advanced. This note was to be paid off when the final financial arrangements were made. It was discussed informally on several occasions by different stockholders that as the project developed I would have a contract for the plumbing, heating, and air conditioning at a set fee. At no time did I ever agree to put up one-third or any other portion of the financing other than what money could be borrowed against the project.’
"Mr. Moore’s Statement Made on behalf of Fischbach & Moore
‘The first information I had relative to the financing of the project was through the memorandum referred to above. However, Mr. Stewart and Mr. Sale did tell me in conversation that they had talked with Mr. Fischbach in New York City and that they all understood that there was to be additional financing- other than the $26,250 to be advanced for the purchase of the property. As to what extent Mr. Fischbach agreed to go into additional financing, I do not know. The matter of this major financing, wherein we are one of the interests is concerned, has never been discussed at any of the meetings of the stockholders or directors that I have attended. Our interests were to put up $26,250 each on the initial payment of the land.’
“ ‘It was my understanding that the corporation was to execute and deliver to the contractors notes for the amounts advanced by them ($26,250 each with accrued interest at five per cent) and that such notes are to be repaid by first applying to the notes fees to be collected by the contractors for construction of the buildings contemplated.’
[Then follows the election of the directors, here omitted.]
“Thereupon, on motion duly pre- . sented and unanimously adopted, it was
“Resolved, that all the actions taken by the officers and directors of the corporation since the incorporation of the company be, and the same hereby are approved, ratified and confirmed.
“Thereupon, there being no further business to come before the meeting, upon motion duly presented and unanimously adopted, the meeting was adjourned.”

To take care of current expenses, including telephone, taxes, tax service and the like, Henger and Wallace, over this period, advanced an additional $11,000 to the corporation. Sale was unable to secure a single “major” tenant for the Center. Though the anticipated Center had some 45 to 50 sites, Sale obtained only 2 executed leases, one for a filling station and another for a Cabell’s Minute Market. Thus the corporation never got the loan from the major insurance company.

At the directors’ meeting of February 7, 1958, at which Sale was present, Henger, who had since become president, pointed out that the corporation was losing money; that taxes, attorneys’ and accountants’ fees were accruing; “that the corporation owes notes payable to its stockholders and Republic National Bank of Dallas in the total amounts of $179,332.22,” and that the corporation owed the $500,000 balance on land purchased as the shopping center site. Henger said he had had inquiries for the sale of the land. Sale expressed the hope that he would get a major lease contract from S. S. Kresge & Company. The lease was not obtained. The corporation did get a favorable offer to sell the land. The resolution for the sale for $700,000 was adopted on October 10, 1958. The actual profit realized was approximately $95,000.

The payments or repayments were then made to Henger, Wallace, and Moore, which are the subject of this suit. Henger and Wallace, after the money was paid to them, each had advanced approximately $11,000 more to the corporation than they were paid back. The money paid for capital stock is not considered here. After Moore, Wallace, and Henger were paid or repaid, and the indebtedness to the banks was paid, the corporation had on hand $3,000. It is to be made clear that there are no outside creditors involved here. This is not a suit by creditors but a suit on behalf of the corporation by a stockholder.

There was no resolution on the minutes of the corporation authorizing the payments to Henger, Moore or Wallace.

Of controlling importance here is the question as to whether the monies advanced by Henger, Wallace, Moore and Corgan were loans and were obligations of the corporation. The defendants and their witnesses all said they were. On cross-examination, Sale said that he was “well aware of the fact that Sam Wallace and Mr. Henger were making these advances from November 25, 1955, down to 1958”; that he “raised no objection to their lending the money to the corporation.” His point was that Henger and Wallace were not to get their money back until the center was completed and the permanent financing accomplished, and that there was no corporate authority for the repayment.

The jury found that the original loans of Wallace, Henger and Moore were used to purchase the lands for the corporation from the Slaughter Estate; that all other loans from Wallace and Henger which were repaid to them were used by the corporation to meet its obligations; that all of the directors did know of the loan by Moore, but all directors [meaning Sale] did not know of the loans by Henger and Wallace ; that none of the officers objected to the loans by Wallace, Henger, or Moore; that all of the directors did consent to the making of the loan by Moore, but not to the loans made by Wallace and Henger. As stated above, judgment was rendered for Moore on this verdict.

The trial court correctly disregarded the jury findings adverse to Henger and Wallace. We hold that as a matter of law, under this record, the monies advanced by them, used entirely for corporate purposes, evidenced by notes, and carried on the records of the corporation as current liabilities, were loans to the corporation and valid obligations of the corporation. Under these circumstances, the corporation could not successfully recover funds expended in repayment of its obligations. It follows that the stockholder has no greater right in a stockholder’s derivative suit. 13 Fletcher Cyclopedia Corporations (Perm. ed.) §§ 5947 and 5948, pp. 430 et seq.; Levin v. Mayer, 86 Misc. 116, 149 N.Y.S. 112. We are of the opinion that intrinsic fairness to the corporation of the repayments was conclusively shown under the evidence, from which it follows that the controlling directors did not breach their fiduciary duty to the corporation either in the transactions themselves or in the fact that the transactions were not authorized by formal corporate action.

The judgment of the Court of Civil Appeals, in so far as it reversed the judgment of the trial court as to the sale of dirt of the corporation and there rendered judgment for Henger, is affirmed. In so far as the judgment of the Court of Civil Appeals reversed the cause and remanded it for a new trial on the recovery of money repaid to. Henger and Wallace is concerned, it is reversed; and the judgment of the trial court is affirmed.


author: GRIFFIN, Justice. NORVELL, Justice

text:
    John S. LEONARD, Jr., Petitioner, v. Charles B. and Violet MAXWELL, Respondents.
    No. A-8966.
    Supreme Court of Texas.
    Jan. 30, 1963.
    Rehearing Denied March 20, 1963.

      Long, Maroney & Aronson, Brown, Sparks & Erwin, Austin, for petitioner.
    Warren McKenney, Byrd & Davis, Austin, for respondents.
   GRIFFIN, Justice.

Respondents, as plaintiffs, filed their suit in the District Court of Travis County, Texas, against petitioner, as defendant, for damages resulting from being hit by an automobile driven by the defendant. In due time — March 31, 1961 — defendant filed his plea of privilege in proper form, alleging that he resided in Dallas County, Texas, and asking for transfer of the cause for trial to Dallas County, Texas.

April 4, 1961, plaintiffs filed their plea controverting the defendant’s plea of privilege. This controverting plea was not sworn to and contained no affidavit, and therefore did not comply with the requirements of Rule 86, Texas Rules of Civil Procedure. May 29, 1961, defendant filed his motion to strike the plaintiffs’ controverting plea, on the ground that such plea did not conform to Rule 86, Texas Rules of Civil Procedure, and that no controverting plea had been filed within the time required by Rule 86, and in addition again asked that the case be transferred to Dallas County, Texas. Plaintiffs on the same date filed an answer to the motion to strike because said motion was in general terms only and alleged no facts justifying the striking of the controverting plea. On the same day, plaintiffs filed what they called their “first amended plea controverting plea of privilege” in the identical language of their original controverting plea, save and except the addition of language calling it their “first amended plea” and filed “with leave of the court first obtained.” This amended plea had an affidavit by one of plaintiffs’ attorneys and a proper jurat.

June 8, 1961, plaintiffs filed their “plea controverting plea of privilege” in the same language as their original controverting plea and also as their first amended controverting plea, except all reference to leave of the court having been first obtained and that this was an amended plea was omitted. The allegations of paragraphs 1 and 2 in all three controverting pleas were identical. This June 8th controverting plea also had appended an affidavit and jurat in all respects except as to date identical with that attached to the first amended plea.

The trial court overruled defendant’s motion to strike the controverting plea, and granted plaintiffs’ motion to be permitted to "file a controverting plea. This order shows the court acted on same June 8th but signed it June 14th. The trial court by another order dated June 8th but signed and entered June 16th, set out the facts relied upon by plaintiffs to excuse the failure to file a proper controverting plea within the ten-day period provided by Rule 86, and found these facts showed good cause and granted plaintiffs leave to file their controverting plea June 8th as was shown by the June 14th order.

Defendant on June 21, 1961, filed an answer containing exceptions to the June 8th controverting plea, and again moved to strike this plea. The grounds stated therein will he more fully discussed later in this opinion.

The trial court by its order dated June 21, 1961, but signed and entered June 27, 1961, after a hearing on the plea of privilege, overruled the same.

On appeal to the Court of Civil Appeals, the trial court’s action was affirmed, one Justice dissenting. 356 S.W.2d 335.

This being a plea of privilege case, we have jurisdiction thereof under Sec. 1 of Art. 1728, Vernon’s Ann. Revised Civil Statutes of Texas.

Defendant by his points of error raises the question that the various controverting pleas were not sufficient to permit the introduction of evidence on the hearing of the plea of privilege.

Omitting the opening and concluding paragraphs, all three of the controverting pleas found in the record are in identical language and read as follows:

“1. Plaintiffs deny the allegation contained in defendant’s plea of privilege that no exceptions to exclusive venue in the county of one’s residence provided by law exist in such case and plaintiffs say that in truth and in fact an exception to exclusive venue in the county of one’s residence does exist.
“2. Plaintiffs allege that the allegations contained in their original petition on file herein are true and correct, and that plaintiffs are entitled to bring this suit in Travis County against the defendant, John S. Leonard, Jr., under Section 9a of Article 1995, Revised Civil Statutes of Texas.”

The affidavits attached to the second and third controverting pleas are identical (except as to a showing that the second one is an amendment) and are as follows:

“The State of Texas:
County of Travis:
“BEFORE ME, the undersigned authority, a Notary Public in and for Travis County, Texas, on this day personally appeared WARREN P. Mc-KENNEY, to me well known to be a credible person of lawful age and qualified in all respects to make this affidavit, who, being first duly sworn, on oath says that he is attorney for Violet Maxwell and husband, Charles B. Maxwell, and that he has read the foregoing plaintiff’s plea controverting plea of privilege in cause No. 121,-002, Charles B. and Violet Maxwell v. John S. Leonard, Jr., in the 98th District Court of Travis County, Texas, and knows the contents thereof, and that such instrument and every statement, allegation and denial thereof are true and correct.
Warren P. McKenney” (Jurat follows)

We hold that no one of these controverting pleas is sufficient to comply with the requirements of law as to the contents of a controverting plea and its accompanying affidavit, and therefore it was error for the lower courts to overrule defendant’s plea of privilege.

Art. 1995, subdivision 9a, provides:
“* ⅜ * 'pjjg venue facts necessary for plaintiff to establish by the preponderance of the evidence to sustain venue in a county other than the county of defendant’s residence are:
“1. That an act or omission of negligence occurred in the county where suit was filed.
“2. That such act or omission was that of the defendant, in person, or that of his servant, agent or representative acting within the scope of his employment.
“3. That such negligence was a proximate cause of plaintiff’s injuries.”

A reading of the controverting pleas clearly demonstrates that no one of them alleges these necessary venue facts. Plaintiffs answer first that their reference to Subdivision 9a of Art. 1995 is a sufficient allegation. This allegation states no cause of action against anyone for any damages. At best it can only be an allegation of the statutory language and is a conclusion. In the face of an exception, as filed herein, the allegation is insufficient to permit proof of the necessary venue facts.

In discussing the requisites of a controverting plea, the court said in Jefferies v. Dunklin (1938), 131 Tex. 289, 115 S.W.2d 391:

“Under the plain terms of the above statute (Now rule 86 T.R.C.P.), the controverting plea of the plaintiffs is, and must he, a sworn pleading. Also, under the plain terms of such statutes, such controverting plea must set out specifically the fact, or facts, relied on by the plaintiff to establish venue in the court where the case is pending. In this connection, the statute unquestionably contemplates that the controverting plea constitutes the pleadings of the plaintiff on the issue of venue, and such plea must allege all the facts that are necessary to he proved to sustain the venue in the court where the suit is filed. The statute puts the burden on the plaintiff to plead in his controverting plea, and to prove, the facts which will sustain the venue in the court where the suit was filed. Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91. An examination of the controverting plea filed by the plaintiffs in this case will disclose that it neither directly nor indirectly makes the petition in such case a part thereof. Such controverting plea must therefore he tested by its own allegations, unaided in any way by the petition. Henderson Grain Co. v. Russ, 122 Tex. 620, 64 S.W.2d 347. When we test this controverting plea by its own terms or allegations, unaided by the petition, we find that it amounts to nothing, because it fails utterly to allege a cause of action against defendant in Tarrant county. In fact, it, unaided by the petition, is meaningless as a controverting plea or pleading.” (Emphasis added.)

In the case of Henderson Grain Co. v. Russ (1933), 122 Tex. 620, 64 S.W.2d 347, this court held a controverting affidavit insufficient, even though it specifically pleaded reliance upon Sections 4 and 9 of then Art. 1995, Revised Civil Statutes to maintain venue in the county where the suit was filed. Also, the plaintiff in his controverting affidavit alleged that he delivered the grain (“mentioned and described in their petition, to which reference is here made”), for conversion of which the suit was brought in Carson County, Texas, to one of the defendants in Carson County, Texas.

This court said that the controverting affidavit nowhere makes the petition a part thereof, and therefore the allegations of the controverting affidavit must be tested by its own allegations “unaided by the petition.” The controverting affidavit was held insufficient.

In A. H. Belo Corp. v. Blanton (1939), 133 Tex. 391, 129 S.W.2d 619, this court held insufficient to permit introduction of testimony the following allegation of a controverting plea:

“ ‘ “ * * * this is a civil libel suit * * * as sef. ⅛⅛ and pleaded in plaintiff’s original petition, which for the purpose of showing that this is a civil libel suit is referred to and made a part of this controverting affidavit.” ’ ”
The Court also said:
“In other words, it is necessary, in order to comply with Article 2007, that the plaintiff in his controverting affidavit to such plea of privilege must al lege, either in the controverting affidavit or by a specific reference to and adoption of allegations in his petition, sufficient facts as venue facts upon which the alleged cause of action is sought to be maintained.” (Emphasis added).

See also: C. F. Lytle Co. v. Preston et al. (1943, Tex.Civ.App.), 175 S.W.2d 440; McDonald, Texas Civil Practice, Vol. 1, pp. 447-450 ; 43B Tex.Jur. pp. 307 and 320, Sec. 118 and Sec. 125, and authorities therein cited.

Plaintiffs say that since the amendment of the Rules of Civil Procedure in 1941, a more liberal construction should be given to allegations in a controverting plea. Had the defendant not excepted to the allegations of the controverting affidavit, nor objected to the introduction of evidence to show the necessary venue facts, he could not now be heard ,to complain of the contents of the controverting affidavit. Defendant did protect his points in both courts -below and is urging them here.

A study of the case of Buchanan v. Jean, 1943, 141 Tex. 401, 172 S.W.2d 688, shows that the same strict rule regarding the allegations which must be contained in a controverting affidavit prior to the adoption of the “new rules” in 1941 is now in effect.

Buchanan v. Jean (1943), Tex.Civ.App., reported in 174 S.W.2d 98, was an appeal from the judgment of the trial court overruling defendant Buchanan’s plea of privilege. The controverting affidavit of plaintiff Jean alleged in part:

“That plaintiff had filed a petition herein alleging that the defendant coming from the south and going north crossed over and left said highway on the left side of said highway and ran into and collided with plaintiff’s car herein in Ellis County, Texas, and that said acts in so driving said automobile by the defendant is in contravention of Article 801, Penal Code, Section B, and is a violation of the law, and is a crime or trespass as defined in Article 1995, Vernon’s Annotated Civil Statutes, Section 9, which would entitle said plaintiff to sue said defendant in Ellis County, Texas, where said accident occurred. The said plaintiff further alleges that said accident did occur in said Ellis County, the county wherein said suit was brought. Plaintiff would respectfully show herein that said suit should be maintained in Ellis County, Texas, the county in which said suit was brought, and for such others (sic) herein as may be proper and necessary.”

The Court of Civil Appeals by a majority said: “It is obvious that the controverting affidavit, as originally filed, was insufficient in substance under the above decisions * * *.” The decisions referred to were Jefferies v. Dunklin, supra; Compton v. Elliott, supra; Henderson Grain Co. v. Russ, supra, and A. H. Belo Corp. v. BJanton, supra. The court proceeded to say: “Under the liberality provided by the new rules we think the allegations in the amended controverting plea are sufficient * . and affirmed the judgment of the trial court. One Judge dissented on the ground that Rules 86 and 87, Texas Revised Civil Procedure, should be given the same construction that Articles 2007 and 2008, Revised Civil Statutes (which were replaced by Rules 86 and 87) had been given by the cases last above referred to.

By virtue of the dissent, the Court of Civil Appeals certified the case to the Supreme Court. Some of the questions certified raised the correctness of majority holding on the sufficiency of the controverting affidavit.

This Court in the case of Buchanan v. Jean (1943), 141 Tex. 401, 172 S.W.2d 688, reversed the Court of Civil Appeals. Among other things the Court said: “It will be noted that the controverting affidavit does not set out a cause of action sustaining venue in Ellis County, as was held necessary in Jefferies v. Dunklin, 131 Tex. 289, 115 S.W.2d 391; Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91; City of Mineral Wells v. McDonald, Tex.Sup. [141 Tex. 113] 170 S.W.2d 466; A. H. Belo Corp. v. Blanton, 133 Tex. 391, 129 S.W.2d 619, par. 5.”

Citing some of the above authorities, the Court in another part of its opinion said that it was clear that the original controverting affidavit was insufficient. Plaintiff had amended the original affidavit by interlining, with permission of the trial court, language making “full reference” to his petition and “makes same a part hereof as though fully copied herein with all of its allegations in toto,” but did not swear to the amended plea. The court said:

“But if it be conceded that it was permissible to interline the amendment in the previously filed pleadings, it will be noted that the reference to the original petition does not evidence a clear intention to swear to the truth of all of the facts set out therein. See in this connection First National Bank v. Jaggers, Tex.Civ.App., 67 S.W.2d 924, par. 1; Rogers v. Dickson, Tex.Civ.App., 157 S.W.2d 404, par. 2; Henderson Grain Co. v. Russ, 122 Tex. 620, 64 S.W.2d 347, par. 2; A. H. Belo Corp. v. Blanton, 133 Tex. 391, 129 S.W.2d 619, par. 5.”

For other cases applying the same tests to a controverting affidavit see Robinson v. Glasse et al. (1945), Tex.Civ.App., 188 S.W.2d 598(3), no writ history; Fair v. Mayfield Grain Co., (1947) Tex.Civ.App., 203 S.W.2d 801(4), no writ history; Anderson v. Southwestern Presbyterian Home, etc. (1952), Tex.Civ.App., 248 S.W.2d 775 (6, 7), writ dismissed w. o. j.

It is clear that the plaintiffs’ controverting plea and affidavit make no specific reference to the necessary venue facts to sustain venue in Travis County, Texas. Neither is plaintiffs’ petition incorporated in the controverting plea either by reference or adoption. The only allegation is “that the allegations contained in their original petition on file herein are true and correct, * * * » 'j'jjg further allegation that plaintiffs are entitled to bring their suit in Travis County under Sec. 9a of Art. 1995, Vernon’s Ann. Revised Civil Statutes of Texas, is a pure conclusion and no facts are set forth to sustain this conclusion.

The defects in plaintiffs’ controverting plea were pointed out by defendant prior to the court’s action on the plea of privilege. First by motion filed May 29, 1961, stating that the controverting plea “did not conform to Rule 86, Rules of Civil Procedure and is fatally defective.” It was in answer to this that plaintiffs filed their first amended controverting plea and for the first time attached a sworn affidavit to such plea. Later, June 21, 1961, defendant filed an answer to the June 8th controverting plea, and moved to strike. This pleading by exception pointed out that plaintiffs’ controverting plea did not specifically allege the venue facts necessary to establish venue in Travis County; that the petition is not adopted nor incorporated in the controverting plea; that plaintiffs are not entitled to introduce evidence of venue facts; that the plaintiffs’ verification attached to the controverting plea “is not a clear and unequivocal swearing to plaintiffs’ original petition, as such original petition was not either adopted and/or incorporated into the body of plaintiffs’ plea controverting plea of privilege as filed herein on the 8th day of June, 1961, and that this is a mere verification of the allegations as set out in plaintiffs’ plea controverting plea of privilege, and does not swear or verify as to the accuracy of plaintiffs’ original petition.”

On the hearing of the plea of privilege,, the defendant made proper objection to the introduction by plaintiffs of any evidence of venue facts sufficient to maintain the suit in Travis County.

Our holding as above set out makes it unnecessary to pass on the other points of error urged by the defendant. We do not pass on them, but expressly reserve them until they may be controlling in the decision of a cause.

Judgments of the Court of Civil Appeals and the trial court are reversed and the cause is remanded to the District Court with instructions to enter an order transferring the cause to Dallas County, Texas, for a trial on the merits.

NORVELL, Justice

(dissenting).

Despite some procedural irregularities with reference to plaintiff’s statement of his venue facts, the trial judge apparently had no difficulty in recognizing this as an exception 9a venue case. While he was not required to do so under our Rules of Civil Procedure, the judge filed findings of fact and conclusions of law. He found that on October 17, 1960, the defendant, John S. Leonard, Jr. was operating his automobile “at a greater rate of speed than a person of ordinary care and prudence would have operated it under the same or similar circumstances which was negligence and a proximate cause of (plaintiff) Violet Maxwell’s injuries.” The judge also found that the defendant was guilty of negligence in three additional particulars which were likewise proximate causes of Mrs. Maxwell’s injuries. These findings are not attacked and so far as the substantive law is concerned it would be difficult to say that the Maxwells were not entitled to maintain their action in Travis County, Texas, where their petition was filed. Article 1995, § 9a, Vernon’s Ann.Tex.Stats.

But, we have procedural difficulties. I doubt if any member of this Court believes that, as a matter of substance, the plaintiffs are not clearly entitled to maintain their action in Travis County. What concerns the Court is the effect the decision in the case will have as a precedent. Upon occasion, the failure to observe procedural niceties may result in judicial inaccuracy. In this case, however, I think our course is settled by prior decisions and my disagreement with the opinion of the Court stems from two sources. I do not agree with the Court’s approach to and analysis of the case, and I do not believe the Court has given the proper weight and consideration to the decisions of the Courts of Civil Appeals in this particular field of the law. Except for the exceptions set out in paragraphs 1 and 2 of Article 1728, the decision of the Courts of Civil Appeals are final in plea of privilege cases. Venue in this state, (as well as others — 49 Mich.Law Review 307) has proved a troublesome problem. A survey made by the State Bar Committee on Administration of Justice in 1953 indicated that the full time of one Court of Civil Appeals would be required to dispose of venue appeals under Article 1995, that is, one out of every eleven appealed cases involved a plea of privilege. While a survey of the work of the Courts of Civil Appeals for the years 1951-1958 made by the Texas Civil Judicial Council, 38 Tex.Law Review 725, indicates some improvement, the situation is far from satisfactory. We should not enter this field as a bull in a china shop, overturning decisions of the Courts of Civil Appeals, unless there is a reasonable certainty that we are deciding conflicts in the furtherance of order rather than merely creating more confusion.

The first question which should be explicitly decided by this Court is one upon which there is a clear conflict of decisions between the Eastland Court of Civil Appeals in Brashears v. Strawn National Bank, 57 S.W.2d 177 and the Austin Court of Civil Appeals in this case.

The original controverting plea filed in this case which was the only one filed within the ten-day period prescribed by Rule 86 was not made under oath as required by said rule. No change as to the requirement that a controverting plea be made under oath was effected by adopting Rule No. 86 to take the place of Article 2007 from which the rule was taken. In Brashears v. Strawn it was held that:

“Giving full recognition to the fact that a controverting plea may, under certain circumstances,, be amended, it is none the less true that the filing of such a plea, not supported by affidavit, does not raise an issue of venue. A plea lacking in the essential fact of verification is simply without effect. If the controverting affidavit is insufficient and the plea of privilege be not waived, the court acquires no jurisdiction of the person of the defendant except to transfer the case.”

The basis of this holding is that under Article 2007 (now Rule 86) when a proper plea of privilege had been filed and not controverted within the time prescribed by law, the party filing the plea had the right to have the case transferred to the county of his residence and the court was without authority to do anything in the case other than to order a transfer. An unsworn plea was a nullity and hence the rule above became operative.

In the present case the Court of Civil Appeals has held that an unsworn plea may be amended and that the pleas subsequently filed were in effect amendments to the controverting plea filed within the ten-day period prescribed by the rules. The un-sworn plea was not regarded as a nullity and the amendments thereto were held to be effective.

This Court is now seemingly in accord with the liberal view expressed by the Court of Civil Appeals that an unsworn plea is not a nullity but subject to amendment.

While I do not believe the Brashears case can be reconciled with the holding of the majority of the Court of Civil Appeals in this case, I would concur in a holding that any controverting plea, no matter how defective and whether sworn to or not, is subject to amendment so long as it may be ascertained from the wording of the plea that the plaintiff is asserting a right to maintain the suit where the same had been filed. Much of the swearing required by our rules relating to pleas of privilege is somewhat incongruous. A lawyer may and usually does swear to the plea of privilege and the opposing lawyer swears to the controverting plea. They both swear to the truth of legal propositions and conclusions and to the existence of facts about which they have no personal knowledge. I am rather forced to the conclusion that the legal requisite of an oath is somewhat formal in nature and I would not regard a defective oath or even the absence of an oath as some special type of defect which is beyond the scope of an amendment.

But having accepted the Court’s holding that the controverting plea is amendable, I cannot concur in the further holding that this cause must be transferred to Dallas County. Assuming for the moment that the amended plea was defective and that the answer and motion to strike (containing two special exceptions to the plea) should have been sustained, then the proper order would be one remanding the case to the trial court with an opportunity to amend. A controverting plea is a pleading and comprehended by Rule 63. The rules set forth in Caperton v. Thorpe, Tex.Civ.App., 240 S.W.2d 329, no wr. hist., and supported by the authorities therein cited, have application here. On this point I am in agreement with the majority of the Court of Civil Appeals. I would, however, call attention to two cases directly involving defective controverting pleas which this Court, in its opinion, has failed to notice, although they are directly in point and express holdings contrary to that contained in the Court’s opinion. In the interest of clarity of the statement of the law for the benefit of the practicing lawyer, these cases and others expressing similar holdings, should be considered and dealt with.

This Court has held in effect that the trial court erroneously overruled the defendants’ motion to strike and the exceptions therein contained. Its order of rendition is contrary to the practice followed in Texas Acceptance Corporation v. Strickland, Tex.Civ.App., 91 S.W.2d 1179 and Bramblett v. Roby State Bank, Tex.Civ.App., 67 S.W.2d 450. The Strickland case involved a general demurrer which would be analogous to a motion to strike because of a failure to set up a good defense to the plea of privilege. The Bramblett case involved special exceptions. In both cases the trial court had overruled the demurrer and exceptions. This was held to be error by the Court of Civil Appeals. In other words, the appellate court sustained the demurrer in Strickland and the special exceptions in Bramblett. The plaintiff’s right to amend was, however, recognized. In Strickland the order was:

“For the error of the court in overruling the demurrer to appellee’s controverting affidavit, the cause is reversed and remanded, with directions to tranfer the cause to a district court of Harris county, Tex., unless appellee shall forthwith amend his plea ‘setting out specifically the facts relied upon- to confer venue’ on the district court of Cameron county.”
In Bramblett it was said:
“The evidence, we think, was sufficient to sustain the venue in Fisher county had the controverting pleas been sufficient. Instead of directing a transfer of the case, we will reverse and remand, with direction that, unless the pleas are so amended to state the facts showing that a trespass had been committed, and upon another trial evidence is produced to sustain that issue, the case be transferred to the county court of Taylor county. See Cassidy-Southwestern Commission Co. v. Chupick Bros. (Tex.Civ.App.) 225 S.W. 215; Hayes v. Penney (Tex.Civ.App.) 215 S.W. 571; Texas & P. Ry. Co. v. Mangum, 68 Tex. 342, 4 S.W. 617; Smith v. Rogers (Tex.Civ.App.) 34 S.W.(2d) 312; Meadows & Co. v. Turner (Tex. Civ.App.) 270 S.W. 899; Fears v. Fish (Tex.Civ.App.) 218 S.W. 507; Mueller-Huber Grain Co. v. Heid Bros. (Tex.Civ.App.) 58 S.W.(2d) 198; Olschewske v. Smyth (Tex.Civ.App.) 62 S.W.(2d) 220; Sparks v. West (Tex.Civ.App.) 41 S.W.(2d) 301; Brown v. Cox (Tex.Civ.App.) 53 S.W.(2d) 848; Randals v. Green (Tex.Civ.App.) 258 S.W. 528; Scott v. Clark (Tex.Civ.App.) 38 S.W.(2d) 382.”

See also, McDonald, Texas Civil Practice, § 4.50. The special exception has an important function to serve in the plea of privilege practice. American Casualty & Life Co. v. Robinson, Tex.Civ.App., 220 S.W.2d 204; Tolson v. Carroll, 313 S.W.2d 131; McDonald, Texas Civil Practice, § 4.49.

There is one other consideration which needs to be discussed and this relates to the doctrine of harmless error under Rule 503 relating to the Supreme Court which provides that “no judgment shall be reversed on appeal and a new trial ordered in any cause on the ground that an error of law has been committed by the trial court in the course of the trial, unless the appellate court shall be of the opinion that the error complained of amounted to such a denial of the rights of the petitioner as was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case, * * *.”

Both the Strickland and Bramblett cases were decided prior to the adoption of the 1941 Rules of Procedure. Under the rule of Golden v. Odiorne, 112 Tex. 544, 249 S.W. 822, the harmless error rule (old rule 62a) was held inapplicable to errors which involved violations of procedural statutes. This was the type of error involved in both Strickland and Bramblett and hence we find no discussion relating to harmless error. While ordinarily the construction of a rule taken from a statute will be given the same construction as that placed upon the statute from which the rule is taken, the effect of repealing the procedural statutes and replacing them with court promulgated rules was to place all rules upon a parity and remove the prior existing statutory domination over court made rules. Hence when two rules constitute a part of the same set of rules they necessarily must be read together. Rule 86 must be construed in connection with Rule 503 just as it was held that Rule 295 must be construed with Rule 434 in Denbow v. Standard Accident Insurance Co., 143 Tex. 455, 186 S.W.2d 236. See, Robert W. Calvert, “The Development of the Doctrine of Harmless Error in Texas”, 31 Tex.Law Review 1. Rulings on special exceptions are within the ambit of Rules 434, relating to the Courts of Civil Appeals and 503 relating to the Supreme Court. 4 Tex.Jur. 562, § 940.

In this case, the affidavit to the amended controverting plea effectively covered the allegations contained in the petition. In other words, the affiant swore that the allegations contained in the original petition were true and correct. The petition set forth a cause of action for injuries sustained by Mrs. Maxwell proximately caused by the negligence of the defendant Leonard. The controverting plea designated the venue exception relied upon, that is, Article 1995, § 9a. If the allegations of the petition were not true, the statement of affiant was definite enough to have rendered him liable for a prosecution for perjury.

The failure of the affidavit to clearly cover the allegations of the petition seems to be the primary basis of the decisions in Jefferies v. Dunklin, 131 Tex. 289, 115 S.W.2d 391; Henderson Grain Co. v. Russ, 122 Tex. 620, 64 S.W.2d 347 and A. H. Belo Corporation v. Blanton, 133 Tex. 391, 129 S.W.2d 619. See also, McDonald, Texas Civil Practice, § 4.49. In the Belo case, supra, it rather clearly appears that the pleader was of the opinion that the nature of the suit rather than the factual existence of a libel was the venue fact involved and hence there was no unequivocal statement that the allegations of the petition were true and correct.

The defect then rather boils down to nothing more than this: Although the plea referred to the petition, and it was stated under oath that the allegations therein were correct and the venue exception relied upon was designated, the plea did not employ the magic words, “which (referring to the petition) is hereby adopted and made part hereof.”

To my mind what was said in the plea comes close to an indirect or inferential adoption of the petition as a part of the plea. Jefferies v. Dunklin, supra. When the hearing was held, the parties litigant, as well as the judge, knew the issues involved i. e., the venue facts — and evidence in accordance with such issues was introduced and considered. The fact that the trial judge did not pause in the course of the hearing and allow the plaintiffs to interline the words “hereby adopted and made part hereof” neither misled anyone nor prejudiced the rights of any litigant. It was patently harmless even though the plea without such words did not strictly comply with the requirements of Rule 86. By analogy, the rule of Denbow v. Standard Accident Insurance Co., 143 Tex. 455, 186 S.W.2d 236 is strictly applicable here. And should it be urged that a holding supporting that of the Court of Civil Appeals should tend toward a liberality which would perhaps permit careless pleading, I would point out that in the particular before us, the choice between the hypertechnical and the liberal viewpoint was made by this Court many years ago — by the adoption of Rule 503, and the decision in the Denbow case.

I would affirm the judgment of the Court of Civil Appeals.

GREENHILL and STEAKLEY, JJ., join in this dissent.

      . The Civil Appeals cases cited herein, are for the most part venue cases. Unless otherwise indicated no application for mandamus or writ of error was made to tlie Supreme Court.

      . Upon authority of this case it is stated in McDonald, Texas Civil Practice, § 4.50 that:
      “The rules (allowing amendment) are subject, however, to an important proviso: if the plaintiff files a purported controverting plea which contains no affidavit, it is a nullity and may not be amended.” Compare, Farmer v. Cassity, Tex.Civ.App., 252 S.W.2d 788 in which the affidavit to the plea failed to show the jurat and signature of the officer administering the oath.

      . Article 2007 prescribed five days. Rule 86 now allows ten days in which to file a controverting plea.

      . These special exceptions are set forth in the dissenting opinion in the Court of Civil Appeals, 356 S.W.2d 335.