author: STONE, Judge.

text:
    M. F. A. COOPERATIVE ASSOCIATION OF MANSFIELD, Missouri, Plaintiff-Apellant, v. Bill MURRAY and Floyd Lawson, Defendants-Respondents.
    No. 8119.
    Springfield Court of Appeals. Missouri.
    March 1, 1963.

      Lincoln, Haseltine, Keet, Forehand & Springer, Springfield, for plaintiff-appellant.
    No appearance for defendants-respondents.
   STONE, Judge.

This is a replevin action, in which M. F. A. Cooperative Association of Mansfield, Missouri (hereinafter referred to as plaintiff) appeals from an adverse judgment (a) directing the return to Bill Murray and Floyd Lawson (hereinafter referred to as defendants) of a 1955 Fruehauf refrigerated trailer, Serial No. AV-198283 (hereinafter sometimes referred to as the trailer) and (b) adjudging that defendants recover from plaintiff $1,500 for loss of use of the trailer together with costs. An approved bond having been given by plaintiff [Rules 99.03 and 99.04; Secs. 533.030 and 533.040] when suit was instituted on May 3, 1960, the sheriff took the trailer the following day and delivered it to plaintiff, who still has possession of it by virtue of the filing and approval of a supersedeas bond. Rule 82.-09.

During the first half of 1959, defendants, operating out of Crane, Missouri, as partners under the firm name of Lawson and Murray, were engaged in hauling live chickens to the Clinton, Missouri, processing plant of Anderson-Haley Poultry Company (hereinafter referred to as Anderson-Haley), to whom a Missouri certificate of incorporation had been issued on January 14, 1959. Defendants “bought some” of the poultry themselves and “hauled some for other people.” For the poultry delivered to its Clinton plant, Anderson-Haley was to pay the “market price” plus 1½{⅛ per pound for hauling. Defendants were to collect the sale price of the chickens hauled for others and were “to pay those other people” for their poultry. At first, Anderson-Haley usually paid defendants within two or three days after delivery of chickens to the Clinton plant. However, as time passed, the indebtedness of Anderson-Haley to defendants mounted steadily so that,, by June 22, 1959, that,indebtedness was (as defendants testified) “a little less than $65,000 " In these circumstances, defendants sought and obtained “some security from (Anderson-Haley) for this indebtedness” in the form of a negotiable promissory note in the principal sum of $100,000, dated June 22, 1959, payable in monthly installments of $1,000 each, and secured by deed of trust of even date (hereinafter referred to as the deed of trust of June 22) which covered Anderson-Haley’s processing plant at Clinton, including “all plant machinery and equipment * * * which are permanent fixtures.” This deed of trust was, on the same day, filed for record in the office of the Recorder of Deeds of Henry County, Missouri. We note parenthetically defendants’ trial explanation of the $100,000 principal sum in the note of June 22, to wit, that, although Anderson-Haley’s processing plant was not operating then, Frank M. Haley (identified as president of Anderson-Haley) “was figuring on starting up again and we wanted enough of those assets to assure us (defendants) of our money” — “we didn’t know how much poultry they (Anderson-Haley) would let us haul in there to them” in the future.

On August 7, 1959, plaintiff sold and delivered two loads of broilers to Anderson-Haley at Clinton, for which check “was supposed to issue ⅜ * * within the next day or two.” No remittance having been received in the meantime, plaintiff’s manager Tripp went to Clinton on September 22, 1959, found that Anderson-Haley’s plant was not operating, and after talking with Haley examined the recorded deed of trust of June 22. On the day following his trip to Clinton, to wit, on September 23, 1959, Tripp went to the office of attorneys (herein identified as M & P) in a city (not Springfield) within the same general area as Crane. When asked why he had contacted those attorneys, Tripp said that he had understood that they represented defendants “who were having trouble on their claims” and that they (M & P) “could and would help me.” According to Tripp (neither M nor P testified), he told P on September 23 that he (Tripp) had found of recr ord in Henry County the deed of trust of June 22 and “that with this four-month period facing me, I would have to force them (Anderson-Haley) into bankruptcy, ■and he (P) advised me that if I ‘would not rock the boat, they (M & P) would contact Haley and get something worked out, and I told him (P) then that I would wait a day or two.”

On September 25, 1959, P called Tripp over long distance and “wanted to know if I (Tripp) had made up my mind about starting bankruptcy proceedings against Anderson-Haley,” to which Tripp replied that “by five o’clock I would give him my answer as to whether (plaintiff) was going to start the bankruptcy proceedings or let them (M & P) try to get us some security and work it out.” On the same day, Tripp conferred with and employed attorneys in Springfield (herein identified as W & E), who thereafter represented plaintiff in protracted negotiations with M & P. The positive and undisputed testimony of Tripp and of attorneys W & E was that attorneys M & P said, from time to time, that they were representing defendants and had conferred with their clients on several occasions concerning the matters under discussion. Since the relationship of attorney and client is essentially one of agency [Henderson v. Cape Trading Co., 316 Mo. 384, 392, 289 S.W. 332, 334 (9)], it is recognized that neither the agency of attorneys M & P nor the scope of their authority could be established by their unsworn statements. See cases collected in 23A West’s Missouri Digest under Principal and Agent,. However, grudging admissions wrung from defendants themselves were sufficient, we think, to have permitted a finding that, at all times and in all things here material, M & P were acting as defendants’ agents and attorneys and within the scope of their authority as such.

During the period from September 25 .to October 21, 1959, there was a running exchange of long distance telephone calls between plaintiff’s attorneys W & E and defendants’ attorneys M & P. These discussions obviously proceeded upon the accepted premise tha,t an effective , involuntary petition in bankruptcy could be filed against Anderson-Haley [11 U.S.C.A. § 95]; that such petition would be filed on or before October 21, 1959, unless in the meantime Anderson-Haley’s indebtedness to plaintiff was secured adequately; and that, if Anderson-Haley were adjudicated a bankrupt, the lien of the deed of trust of June 22 would be avoided and defendants thereby would be reduced to the status of common, unsecured creditors. In the initial conversation between plaintiff’s attorney W and defendants’ attorney M on September 25, M commented that bankruptcy should be avoided. W agreed but insisted that plaintiff “wanted its money the same as (defendants) wanted their money.” Whereupon, M “said that there was no money, no cash, but that he believed he could find some equipment as security for our client (plaintiff) if we would give him a reasonable length of time to work it out.”

On September 29, plaintiff’s attorney E talked with defendants’ attorney M, who stated that defendants “had two trailers and one tractor down at Crane that had been transferred from Clinton to Crane” and that “an arrangement could be worked out and security could be given” for Anderson-Haley’s indebtedness to plaintiff. E asked for a note secured by chattel mortgage on the tractor and one of the trailers. “At first, M agreed that would be satisfactory, but he then said he would check with his clients (defendants) and also with Haley, and then would give me an answer in a few days.” In a subsequent conversation between E and M “a few days later, a day or two later,” M reported “that he had checked with these gentlemen and that they could not give us a chattel on the tractor but could and would give us * * * a chattel on the trailer * * * that the trailer was in good condition and was refrigerated * * * and that they considered that as adequate security” for plaintiff’s account. At that time, E and M “agreed that would be the arrangement, that is, the chattel mortgage would be executed on this trailer, and the title obtained from Mr’ Haley.” M represented that title to the trailer “was clear” and “had never been touched, and that Mr. Haley had that title.”

This agreement for execution of a note and chattel mortgage covering one of the trailers was confirmed early in October in another long distance telephone conversation (this time between plaintiff’s attorney W and defendants’ attorney P), in which P said that the two trailers would be made available for personal inspection by plaintiff's manager Tripp and that, after such inspection, “a note and chattel mortgage on the equipment of his choice” would be executed. Tripp did inspect the two trailers at Crane about the middle of October, copied the serial number of one of those trailers (the trailer here in controversy), and took that information to plaintiff’s attorney E in Springfield for use in preparation of a chattel mortgage. E then called defendants’ attorney M “to make the final arrangements for getting both the title to the trailer and Mr. Haley” to M’s office where the note and chattel mortgage were to be executed and the title to the trailer was to be delivered. M said that title “was in the name of * * * Anderson-Haley” and repeated that it “was free and clear.” M also told E that the title was in M’s office; and, without objection, E testified, that he “understood * * * we were to get the title as soon as the chattel mortgage was signed” so that the mortgage lien could be noted on the face of the certificate. Furthermore, among the exhibits in evidence we find a memorandum by E’s secretary recording the fact that on October 16 defendants’ attorney P had called over long distance and, finding E then out of the office, had asked his secretary to tell him that M & P then had “a clear title” to the trailer.

Although the attorneys twice agreed upon definite dates for the closing of the contemplated transaction in M’s office, Haley “did not show up” on either occasion. Finally, M advised that Haley “was tied up with internal revenue people in Clinton and could only be reached up there,” so Tripp took the note and chattel mortgage to Clinton where they were executed on behalf of Anderson-Haley by Haley, as president. The note in the principal sum of $3,818.33, payable to plaintiff’s order ninety days after date, and the chattel mortgage on the trailer in controversy were dated October 21, 1959. In the mortgage acknowledgment before a notary public in Henry County (the notary being the attorney who subsequently acted as trial counsel for defendants), Haley declared Anderson-Haley “to be lawful owner of said property (the trailer), in full possession thereof, and as having good right to mortgage the same.” The mortgage was filed for record in Henry County on October 24. Nothing having been paid on the note in the meantime, plaintiff sought in April 1960, by virtue of condition broken in the chattel mortgage, to take possession of the trailer at Crane. Defendant Lawson refused to release it because (so plaintiff’s evidence ran) “ownership had not been established on it, and he was afraid it would cause trouble with Anderson-Haley if he released it.” This replevin action followed shortly.

Defendants introduced in evidence the certificate of title to the trailer, which had been issued on October 9, 1957, to R. S. Anderson Co., Inc., of Clinton, Missouri, and the assignment on the reverse side of the certificate to “Lawson & Murray, Box 333, Crane, Missouri” bearing the individual signature of Frank M. Haley acknowledged before a notary public in Henry County on October 14, 1959. Upon trial, defendants testified that Haley had delivered into their possession the tractor and the two trailers (one of which was the trailer in controversy) “one month or so” prior to October 14; that the assigned certificates of title to those vehicles had been mailed to defendants at Crane and probably had been received “right after he (Haley) signed” them; and that defendants’ attorney M thereafter “might have had” the certificates of title “for a while, anyway.” Neither plaintiff’s manager nor its attorneys had seen the certificate of title to the trailer in controversy prior to institution of this action. Upon cross-examination, plaintiff’s attorney E thus explained his failure to pursue more diligently physical examination and possession of the certificate of title to the trailer: “When you have dealt with (M) as long as I have * * * you can take his word for a fact, and I honestly think (M) thought it was a clear title. * * * I think he had it (the certificate of title) and thought it was clear. He told us he had it, and I believed him.” As herein-before recorded, neither M nor P testified; and, although they initially represented defendants in this suit, they withdrew long before trial.

Plaintiff’s theory of the case has been and is that, under and by virtue of the chattel mortgage executed by Anderson-Haley, plaintiff had an “equitable special interest” in the trailer entitling plaintiff to possession thereof as against defendants, who acquired no title by Haley’s purported assignment of the certificate of title issued to R. S. Anderson Co., Inc., and who, in any event, were estopped to assert their (defendants’) claim of ownership or to deny plaintiff’s right to possession under the chattel mortgage. Defendants pleaded and submitted in the trial court on the theory that, at all times from and after October 14, 1959, they were the owners, and as such entitled to possession, of the trailer. Plaintiff-appellant has filed an exhaustive appellate brief with eight principal points relied on and numerous sub-points; but, although defendants-respondents vigorously and successfully defended in the circuit court, they have filed no brief here, thus offering no aid or assistance to us and indulging a practice neither helpful nor commendable. Mannon v. Frick, 365 Mo. 1203, 1205, 295 S.W.2d 158, 161; John Deere Co. of St. Louis v. Davis, Mo.App., 335 S.W.2d 686, 688.

Before ruling the points presented by plaintiff-appellant, certain preliminary observations may be appropriate and advisable. Replevin is primarily an action to determine the right of possession [Dugan v. Trout, Mo.App., 271 S.W.2d 593, 600(13); Harrington v. Interstate Securities Co., Mo.App., 57 S.W.2d 438, 439], not to try title or the right of property. Rankin v. Wyatt, 335 Mo. 628, 634, 73 S.W.2d 764, 767(8), 94 A.L.R. 941; Wilkison v. Grugett, 223 Mo.App. 889, 895, 20 S.W.2d 936, 939(2). So, a plaintiff in replevin, who is not invested with the legal title to a motor vehicle but who establishes a special property or interest therein with an attendant right of possession, may recover possession from one who has no title or right of possession. Pearl v. Interstate Securities Co., 357 Mo. 160, 164, 206 S.W. 2d 975, 978(8); Rankin v. Wyatt, supra; Robinson v. Poole, Mo.App., 232 S.W.2d 807, 811(2). Insofar as we are advised, no one has undertaken to define or delimit the “special property or interest” which will support a claim of right of possession in replevin. This, no doubt, because “(a)s the right of a defendant to retain the property descends the scale of relative rights of possession to the vanishing point of a wrongful detention by a trespasser, the interest sufficient to sustain plaintiff’s action in replevin diminishes.” Rankin v. Wyatt, supra, 335 Mo. loc. cit. 634, 73 S.W.2d loc. cit. 767

By their pleading and proof, instant defendants rested their asserted right of possession upon alleged ownership of the trailer from and after October 14, 1959, and in turn this claim of ownership upon the assignment of the certificate of title to the trailer. As hereinbefore noted, that certificate of title had been issued to R. S. Anderson Co., Inc., in 1957 (prior to incorporation of Anderson-Haley), and the assignment on the reverse side thereof had been signed by Frank M. Haley individually. The name of the registered owner, R. S. Anderson Co., Inc., did not appear in the assignment, and Haley’s position with, relationship to, or authority to sign for, that corporation was not shown either in the assignment or by evidence aliunde. In short, there was nothing to take the assignment without the general rule that, “in order to bind the corporation, a contract or other instrument entered into by an officer or agent must be executed in such a manner as to show on its face that it is the act of the corporation, that is, that it was the intention of the parties to bind the corporation and not the officer or agent individually” [19 C.J.S. Corporations § 1074, p. 611] ; and, on the record before us, the purported assignment by Haley individually was not the act of, or binding upon, R. S. Anderson Co., Inc. With no properly-assigned certificate of title to the trailer having been delivered to defendants, they acquired no legal title to the trailer and were not the owners thereof when this action was instituted; and their right to possession of the trailer, depending (as it did under their pleading and proof) upon their alleged ownership, thus “descends the scale of relative rights of possession to the vanishing point.” Rankin, supra.

Plaintiff rested its asserted .right of possession upon condition broken in the chattel mortgage on the trailer executed under date of October 21, 1959, on behalf, of Anderson-Haley by Haley, its president. As we have seen, legal title to the trailer was, at all times herein material, in R. S. Anderson Co., Inc. However, in Anderson-Haley’s articles of incorporation subscribed and sworn to on January 13, 1959, by Frank M. Haley, Marilyn Anderson Haley and Robert R. Anderson, it was recited and represented that 1,500 shares of common stock having an aggregate par, value of $150,000 had been paid up with $2,000 in cash and $148,000 in property, which consisted of realty valued at $128,643.59 and personalty (itemized .and identified as eleven motor vehicles and two trailers, one of which was the trailer in controversy) having an aggregate valuation of $19,356.-41. Thus, although the facts were not developed in sufficient detail to support such conclusion at this time, the situation suggests that Anderson-Haley may have acquired a “special interest” in the trailer which it could have perfected into legal title. See Peper v. American Exchange Nat. Bank in St. Louis, 357 Mo. 652, 659, 210 S.W.2d 41, 45(7); Allstate Ins. Co. v. Hartford Acc. & Ind. Co., supra, 311 S.W.2d loc. cit. 46 (footnote 6).

Regardless of that, Anderson-Haley’s execution and delivery to plaintiff of the chattel mortgage on the trailer dated October 21, 1959, implied that title was then in the mortgagor (Anderson-Haley), and that implication was strengthened and confirmed (a) by the specific declaration of its president, in acknowledgment of the chattel mortgage, that Anderson-Haley was “lawful owner of said property, in full possession thereof, and (had) good right to mortgage the same,” and (b) by the conduct and statements of defendants’ attorneys M & P, including the positive representation (according to plaintiff’s uncon-tradicted evidence) that title to the' trailer was “in the name of * * * Anderson-Haley” and “was free and clear.” Furthermore, defendants did not challenge the legal validity of the chattel mortgage executed by Anderson-Haley [cf. Ashby v. National Bond Finance Co., Mo.App., 343 S.W.2d 218, 222(4, 5)], and the submissibility of plaintiff’s cause of action on its so-called “estoppel theory” as hereinbefore outlined [cf. Public Finance Corp. of Kansas City v. Shemwell, Mo.App., 345 S.W.2d 494, 497] was, in necessary effect, conceded by defendants when upon trial they failed to move for a directed verdict and joined voluntarily in submission to the jury with no objection to any of plaintiff’s instructions. On that premise of submissibility, we proceed to a particularized consideration of the points in plaintiff’s brief.

The first point is that “the court erred in failing to grant plaintiff’s motions for a directed verdict and in failing to enter judgment for plaintiff because the un-contradicted evidence shows that defendants were and are estopped to assert a claim to the trailer as against this plaintiff.” The sole motion for a directed verdict was plaintiff’s motion at the close of all the evidence for a directed verdict on defendants’ comitcrclaim only. In this state of the record, plaintiff is in no position to complain here that the trial court erred in failing to direct a verdict on plaintiff’s petition or cause of action. But, if this point were to be ruled on its merits, we would be impelled to deny it. For, where plaintiff has the burden of proof on an issue (as instant plaintiff did on the issue of estoppel) and proof of such issue depends upon oral evidence (as here), plaintiff is not entitled to a directed verdict regardless of whether or not such oral evidence is controverted, because the credibility of witnesses and the weight to be accorded their testimony are for the jury and plaintiff must shoulder the risk of nonpersuasion.

In its second point, plaintiff alleges that, for the reasons hereinafter discussed, the trial court erred in giving defendants' instructions 6 and 7. Number 6 closed with conventional verdict-directing language, while number 7 plainly sought the same end by declaring that, upon certain hypothesized findings, “then the trailer became and was tlie property of defendants.” Both instructions obviously submitted upon the theory that Anderson-Haley had been “the owner” of the trailer prior to October 14, 1959, but that, on said date, defendants had become ■“the owners” thereof by virtue of the purported assignment by Haley individually of the certificate of title issued to and in the name of R. S. Anderson Co., Inc. Direction of a verdict by instruction 6 also was predicated upon a finding that defendants “had acquired the ownership of (the) trailer by reason of a certain bonifide sale to them for a money consideration from Anderson-Haley.” Although (as we have found) Anderson-Iialey may have had some “special interest” in the trailer which could have been perfected into legal title, it (Anderson-Haley) was not “the owner” of the trailer; defendants’ own testimony negated the idea that there had been a “bonifide sale to them for a money consideration from Anderson-Haley”; and, on the record before us, defendants did not become “the owners” of the trailer by virtue of the purported assignment by Haley individually of the certificate of title issued to R. S. Anderson Co., Inc. Thus, instructions 6 and 7 submitted hypotheses for which there was no evi-dentiary support, thereby offended against an elementary but basic principle, and clearly were erroneous. See the multitude of cases collected in 27 West’s Missouri Digest under Trial,.

Plaintiff also attacks instructions 6 and 7 (and, under another point, defendants’ instruction 5) because they did not negate or refer to “plaintiff’s estoppel evidence which was a complete affirmative defense to defendants’ claim of ownership” as pleaded in their counterclaim. Counsel have sent us to the broad and unqualified statement that a verdict-directing instruction “offered by a party asserting a cause of action must negative all affirmative defenses separately submitted in other instructions covering them.” Missouri Civil Instructions (1961), § 2.2, p. 28. Id., § S.S, p. 67. No doubt, this is sound, safe advice which the careful trial practitioner would be well-advised to follow. However, the only case cited in support of the quoted statement [Moore v. Ready Mixed Concrete Co., Mo. (banc), 329 S.W. 2d 14, 22-24(6)] was a tort action in which the affirmative defense of contributory negligence had been pleaded and submitted. It may be “that logic makes the rule equally applicable to all affirmative defenses.” Prevost v. Wilkin, Mo.App., 358 S.W.2d 417, 421. But the Kansas City Court of Appeals has pointed out that Moore, supra, did not announce “an instruction rule for all affirmative defenses” and that, in other categories of actions, whether the failure of a verdict-directing instruction to negate an affirmative defense constitutes reversible error should depend upon whether the jury thereby was misled or misdirected when all of the instructions are read together. Prevost, supra, 358 S.W.2d loc. cit. 421; application to transfer denied by Supreme Court 9/10/62, No. 49679. That is the test we would employ if it were either essential or useful for us to determine upon this appeal whether instant defendants’ instructions were reversibly erroneous for failure to negate “plaintiff’s estoppel evidence.” Since the cause must be remanded and upon retrial the criticized instructions must undergo drastic revision anyway, we pass the complaint presently under discussion without ruling it.

In its next point, plaintiff lists five specific respects in which defendants’ instruction 5 is alleged to have been erroneous. To the giving of this and other instructions, plaintiff’s counsel interposed only a general objection before submission to the jury; and, in its motion for new trial, plaintiff included only one of the five specific objections now urged against instruction 5. That objection was the one upon which we commented in the last preceding paragraph, to wit, that instruction 5 failed “to negate the estoppel defense.” Not having been presented to the trial court by specific objection either before submission to the jury or in the motion for new trial, the other four objections to instruction 5 have not been preserved for appellate review.

Plaintiff charges that defendants’ instruction 8 was erroneous in three respects. In two respects, i. e., (1) in directing the allowance to defendants of “such sum in damages” as would compensate for the reasonable value of the trailer “as of this date” and (2) in authorizing a further allowance for “damage to the trailer,” if any, instruction 8 indeed permitted consideration of subjects upon which no evidence had been introduced and thus transgressed the elementary but basic principle to which we heretofore have referred, to wit, that instructions submitting elements, issues or hypotheses for which there is no evidentiary support should not be given. See again the cases collected in 27 West’s Missouri Digest under Trial, However, the jury made no finding as to the reasonable value of the trailer and allowed nothing for damage thereto, so it does not appear that the unjustified submission of the noted elements in instruction 8 constituted error “materially affecting the merits of the action,” which, standing alone, would require reversal. Rule 83.13 (b); Section 512.160(2).

The third complaint leveled at instruction 8 is that it improperly permitted the jury to award damages for loss of use of the trailer. Eschewing indulgence in idle speculation as to the evidence or the findings upon retrial, we confine ourselves to the observation that, generally speaking, “(w)hen property having a use value is wrongfully taken from a defendant, damages for the loss of its use may be awarded” [Stephen Burns, Inc. v. Trantham, Mo.App., 305 S.W.2d 66, 70-71(6-8)], but that, where a defendant deprived of the use of a motor vehicle or trailer could not have operated it lawfully anyway, no recovery for loss of use should be allowed. Robertson v. Snider, Mo.App., 86 S.W.2d 966, 968(3); Desmet v. Sublett, 54 N.M. 355, 225 P.2d 141. See also United Shoe Mach. Co. v. Ramlose, 231 Mo. 508, 541-542, 132 S.W. 1133, 1141-1142(10).

Two of plaintiff’s points deal with the form of verdict (given as defendants’ instruction 9 and returned by the jury as shown marginally) and with the form of judgment. Again, we need not and do not determine whether the form in which the verdict was returned on September 28 and the judgment was entered fifteen days later on October 13 would have required reversal, if no other error had been demonstrated on the record; but, in the interest of minimizing the possibility of error upon retrial, we add these brief comments. Our rules of civil procedure [Rules 99.11, 99.12 and 99.14; cf. Secs. 533.110, 533.120 and 533.140] contemplate that the verdict and judgment in a replevin suit (a) will find and declare the prevailing party’s right of possession, (b) will determine and assess the value of the property in suit at the time of trial, thus affording to the prevailing party an election to take the property or its assessed value, and (c) will determine and assess damages, if any, for taking and detention. Since the right of possession is the basic and vital issue in the case, the verdict should be responsive to that issue and should require an express finding thereon. Cf. Harrington v. Interstate Securities Co., Mo.App., 57 S.W.2d 438, 439(5). And, if the losing party has possession of the property in controversy at the time of trial, the evidence should show, and the jury should determine and assess, the value of the property as of that date. Clearly, the verdict in the case at bar was not in the form contemplated and required. Furthermore, as we have noted, there was no evidence from which the jury could have found the value of the trailer at the time of trial.

In another point, plaintiff complains of the admission in evidence of defendants’ exhibit 2, a Missouri certificate of title to the trailer issued to and in the names of defendants in August I960. The basic and determinative issue in the instant action was the right to possession' of the trailer at the time of institution of suit, to wit, on May 3, 1960. Cindrick v. Scott, 226 Mo.App. 153, 155, 42 S.W.2d 957, 958(2); Blake v. Keiser, Mo.App., 267 S.W. 94, 96. Exhibit 2 was not relevant or material to this (or any other) issue in the case and, upon plaintiff’s timely and sufficient objection thereto, should have been excluded.

For the reasons stated, the judgment for defendants is set aside and the cause is remanded for further proceedings not inconsistent with this opinion.

RUARK, P. J., concurs.

HOGAN, J., not sitting.

      . All references to rules are to the Supreme Court Rules of Civil Procedure, Y.A.M.R., and all references to statutes are to RSMo 1959, V.A.M.S.

      . That, by execution of the deed of tnist of June 22, Anderson-Haley made a preferential transfer [11 U.S.C.A. §§ 96 (a) (1) and 1(30)] constituting an act of bankruptcy [11 U.S.C.A. § 21(a) (2)], for which a petition in bankruptcy might have been filed against Anderson-Haley within four months thereafter, to wit, on or before October 21, 1959 [11 U.S. O.A. § 21(b)], appears to have been conceded from the outset by all interested counsel.

      . Generally speaking, “a special interest in property denotes, not outright ownership, but a limited or qualified right distinct from and subordinate to the interest of the general owner, such as the right of lawful custody of goods, with the right to detain them against the general or absolute owner.” Hall v. Martindale, Mo.App., 166 S.W.2d 594, 607.

      . Contrast Willson v. Chicago Bonding & Surety Co., Mo., 214 S.W. 371; Reifeiss v. Barnes, Mo.App., 192 S.W.2d 427, 431(7); City of Maplewood v. Johnson, Mo.App., 273 S.W. 237; Morton v. Manchester Inv. Co., 181 Mo.App. 364, 168 S.W. 904; Lewis v. Pulitzer Pub. Co., 77 Mo.App. 434.

      . Section 301.210; Kesinger v. Burtrum, Mo.App., 295 S.W.2d 605, 608(6), and cases collected in footnote 9; Allstate Ins. Co. v. Hartford Acc. & Ind. Co., Mo.App., 311 S.W.2d 41, 46(2, 3) ; Craig v. Rueseler Motor Co., Mo,App., 159 S.W.2d 374, 378(4). See also State ex rel. Connecticut Fire Ins. Co. v. Cox, 306 Mo. 537, 545, 268 S.W. 87, 90(1), 37 A.L.R. 1456.

      . International Harvester Co. v. Threlkeld, 226 Mo.App. 600, 603, 44 S.W.2d 182, 184 (1); Public Finance Corp. of Kansas City v. Shemwell, Mo.App., 345 S.W.2d 494, 497; Illinois State Bank of Quincy v. Pedersen, Mo.App., 350 S.W.2d 102, 106. See also Dierling v. Pettit, 140 Mo.App. 88, 94-95, 119 S.W. 524, 527 (5); Local Finance Co. v. Yantis, Mo.App., 152. S.W.2d 989, 990.

      . “ ‘A mortgagor having the possession and the apparent ownership of personal property confers them upon his mortgagee, who may maintain his right against every one except the real owner, in case the mortgagor is not the real owner.’ ” National Bond & Investment Co. v. Mound City Finance Co., Mo.App., 161 S.W.2d 664, 668.

      . Harbison v. Chicago, R. I. & P. Ry. Co., 327 Mo. 440, 37 S.W.2d 609, 614(12), 79 A.L.R. 1; Clay v. Owen, 338 Mo. 1061, 93 S.W.2d 914, 916(8); Millar v. Berg, Mo., 316 S.W.2d 499, 502(2); Sides v. Mannino, Mo.App., 347 S.W.2d 391, 394 (3); Edmisten v. Dousette, Mo.App., 334 S.W.2d 746, 750(2); Silberman v. Hicks, Mo.App., 231 S.W.2d 283, 285(3); Lintz v. Atlanta Life Ins. Co., 226 Mo.App. 1087, 49 S.W.2d 675, 677(6).

      . Rule 72.01; Section 510.280; Heideman v. Lorenz, Mo., 349 S.W.2d 230(1, 2); Robbins v. Robbins, Mo., 328 S.W.2d 552, 555(1, 4) ; Arnold v. Fisher, Mo.App., 359 S.W.2d 602, 606(1); Warren v Weaver, Mo.App., 343 S.W.2d 682, 684-685(3).

      . State ex rel. and to Use of Hickory County v. Davis, Mo., 302 S.W.2d 892, 896(3); Cluck v. Abe, 328 Mo. 81, 84, 40 SW.2d 558, 559(1-3); Daly v. Schaefer, Mo.App., 331 S.W.2d 150, 154(6); Holtzman v. Holtzman, Mo.App., 278 S.W.2d 1, 4 (4-6). See also Schaefer v. Accardi, Mo., 315 S.W.2d 230, 233(7); Beezley v. Spiva, Mo., 313 S.W.2d 691, 695(6, 7).

      . As we have seen, plaintiff also submitted its cause of action on what it appropriately refers to as an “estoppel theory.”

      . Rules 79.03 and 70.02; Hanff v. St. Louis Public Service Co., Mo., 355 S.W.2d 922, 926(4); Overton v. Tesson, Mo., 355 S.W.2d 909, 913-914(6); Arnold v. Fisher, Mo.App., 359 S.W.2d 602, 609-610(11— 3); Wolff v. Richardson, Mo.App., 358 S.W.2d 112, 116(5); Sullivan v. IIanley, Mo.App., 347 S.W.2d 710, 711 (1).

      . “We, the jury, find the issues in favor of the defendants and against the plaintiff and find that the defendants are entitled to judgment against the plaintiff in the following sum: $-- for the reasonable value of the trailer, its equipment and accessories: $1500.00 for the reasonable value of the loss of use of the trailer and its equipment and accessories: $None for the reasonable value of the damage to the trailer, its equipment and accessories.”

      . Richey v. Burnes, 83 Mo. 362, 365 (2); Vitt v. Baer, Mo.App., 335 S.W.2d 681, 684(4); Huntington v. Jamieson, Mo.App., 50 S.W.2d 705, 707(1). See also Townsend v. Homan, Mo.App., 347 S.W.2d 460, 461-462(3-5).


source: Caselaw Access Project

author: MONTGOMERY, Judge.

license: Public Domain

text:
    BROWN HOTEL COMPANY, Appellant, v. Alberta B. EDWARDS et al., Appellees.
    Court of Appeals of Kentucky.
    March 23, 1962.
    Rehearing Denied March 22, 1963.

      S. L. Greenebaum, Charles F. Wood, Greenebaum, Barnett, Wood & Doll and Thomas C. Carroll, Louisville, for appellant.
    Christopher C. Frishe, Paul E. Tierney, Legal Section, Dept, of Economic Security, Div. of Unemployment Ins., Frankfort, for appellees.
   MONTGOMERY, Judge.

This is one of seven cases considered together on motions for appeal by the Brown Hotel Company and its affiliate, Broadway and Fourth Avenue Realty Company, from judgments confirming awards of the Kentucky Unemployment Insurance Commission to their former employees. The judgments range from $200 to $728. In each case the claimant has been paid the benefits claimed. These cases are for the purpose of determining whether the employer’s reserve account or the Commission pooled account shall be charged with the benefits so paid. The cases present questions of interpretation and application of KRS Chapter 341,, Unemployment Compensation. The cases have several procedural questions in common.

The procedure for determining the validity of claims for unemployment compensation is prescribed by statute. KRS 341.420 provides for the appointment of “impartial referees” to hear and decide appealed claims. A review of the referee’s decision by the Commission is provided. KRS 341.430. The Commission is authorized by statute to make regulations to provide for the conduct of hearings in a summary manner and for the presentation of appeals. KRS 341.115(3) and 341.440. A method of judicial review is provided. KRS 341.450 et seq.

In the hearing before the referee, counsel for appellant presented an affidavit of a witness absent from the state. Counsel moved for permission to take the witness’ deposition if the affidavit was not accepted as the testimony of the witness with the full force and effect as if the witness had been present. The motion was overruled by the referee, and appellant complains, insisting that the regulations adopted by the Commission do not provide for the taking of depositions.

The pertinent regulation adopted is Regulation 17, Section 3D, which provides •

“All hearings shall be conducted informally without regard to common law, statutory or technical rules of procedure and in such a manner as to determine the substantial rights of the parties. The parties and their witnesses shall testify under oath or affirmation. All issues relevant to the claim shall be considered and passed upon.”

Appellant insists that the Kentucky Rules of Civil Procedure should govern the proceedings before the referee and Commission. KRS 447.151 provides that the Civil Rules apply “in all civil proceedings in all courts of the state.” Thus, there is no difficulty in holding that the Civil Rules apply to the proceedings for judicial review under KRS 341.450 et seq., since this review originates in the circuit court. It is equally clear that the Civil Rules do not apply to the proceedings before the referee or Commission since neither is a “court.” Without question, the Commission, by regulation under its cited statutory authority, could adopt and make the Civil Rules applicable, but this has not been done.

No question is presented as to any constitutional or further statutory limitations on such procedures. Complaint is made in appellant’s brief that the referee who conducted the hearing on the claim assisted the claimant in the development of the claim. It is recognized that usually the claimant in this type of case is not represented by legal counsel. The nature of the claim and frequently the amount may not seem to justify employment of an attorney. In such cases it may be necessary for the referee to question the claimant in order to elicit the information relative to the eligibility of the claimant for benefits. In so doing the referee should abide by the statutory obligation to remain “impartial.” The failure of the referee to remain “impartial,” upon timely and proper objection, which was absent here, might well constitute prejudicial error. As to the duty of one sitting in judgment of the rights of adverse parties to remain impartial, see Collins v. Sparks, Ky., 310 S.W.2d 45.

To return to the referee’s ruling on the motion to take the deposition, no prejudicial error is found since the decision shows that the content of the affidavit was considered in making the decision. For the same reason, the objection to the decision of the Commission is not meritorious. The procedure before the referee and Commission illustrates the need for a uniform code of administrative procedures with trained .and truly impartial referees or examiners who are independent of the various administrative bodies for which hearings are conducted.

Appellant insists that the claimant is required to bear the burden of proof to establish the statutory requirements for benefit eligibility. It is urged that the referee ■and Commission have not required the claimant to meet this burden. At the Rearing before the referee in each of the seven cases considered, the testimony of the •employer was introduced first and was usually followed by the testimony in behalf •of the claimant. This is the reverse of the usual procedure and is contrary to the ■usual rules concerning the orderly introduction of evidence in the burden of proof. 'The unorthodox procedure has contributed materially to the difficulty of decision in these cases. No objection was made to the order of introduction of the testimony.

The general rule as to claims before an .administrative body under a statute is stated an Annotation, 14 A.L.R.2d 1311, as follows:

“As in ordinary court proceedings, it is held generally that the burden is on the claimant to show that he has met all of the eligibility requirements contained in the particular statute.”

No reason is perceived why this basic rule governing burden of proof should not apply here. The claimant seeking to establish eligibility for benefits under KRS 341.350 must bear the burden of proof in order to recover on the claim. The employer trying to show a disqualification under KRS 341.370 must bear the burden to defeat recovery of the claim. Broadway v. Bolar, 33 Ala.App. 57, 29 So.2d 687; Unemployment Compensation Commission v. Tomko, 192 Va. 463, 65 S.E.2d 524, 25 A.L.R.2d 1071; Haynes v. Unemployment Compensation Commission, 353 Mo. 540, 183 S.W.2d 77; Howells v. Review Board of Indiana Employment Security Division, 122 Ind.App. 14, 102 N.E.2d 382. To the same effect, see Rymer v. Garnett, Ky., 244 S.W.2d 439. The claimant to establish eligibility should introduce testimony first at the hearing and has the burden of proof in this respect. The testimony of the employer to defeat the claim of eligibility or to show a disqualification should then follow with the burden of proof on the employer to show disqualification. Appellant has failed to demonstrate, however,; that the claimant failed to meet the burden of proof as to eligibility or that the appellant sustained the burden of proof of disqualification.

Alberta B. Edwards, a young colored maid at the Brown Hotel in Louisville, was discovered by her immediate supervisor allegedly engaged in improper conduct with a white male guest. She was promptly discharged. Alberta contended that she was discharged wrongfully because she was not willingly engaging in the activities but, on the contrary, she was resisting the unwanted advances of the unknown surprise guest. It was the rule of appellant’s that employees were forbidden to fraternize with guests or nonemployees while working. An issue of fact was thus created as to the willingness or unwillingness of Alberta, with the referee and Commission resolving the issue in her favor.

The evidence consisted of Alberta’s oral testimony before the referee and the affidavit of the former supervisor which has already been mentioned. Although the former supervisor was no longer an employee of appellant’s and thus presumably in the category of a disinterested witness, the referee and Commission accepted the testimony of Alberta, an interested claimant, with a comment by the Commission that it was “the most competent and probative evidence.” While this conclusion is debatable, the testimony of Alberta does constitute substantial evidence of probative value sufficient to sustain the decision of the referee and Commission. When the facts are in dispute and the findings of fact by an administrative board are supported by substantial evidence, and the board has applied the correct rule of law to the facts so found, its final order must be affirmed. State of Alabama v. United States, D.C., 56 F.Supp. 478, reversed 325 U.S. 535, 65 S.Ct. 1274, 89 L.Ed. 1779.

Appellant argues that in reviewing the Commission’s award the circuit court without statutory authority applied the rule governing circuit court review .of Workmen’s Compensation awards. The procedure on appeal under KRS Chapter 341, Unemployment Compensation, is similar to the procedure on appeal set forth in KRS Chapter 205, Public Assistance. The rule stated in-the Alabama case has been followed in the appeal procedure under 'KRS Chapter 205. Barnes v. Hembree, Ky., 339 S.W.2d 162; Barnes v. Neal, Ky., 287 S.W.2d 419; Barnes v. Turner, Ky., 280 S.W.2d 185. This is in accord with the general rule. Southeastern Greyhound Lines v. Pendleton, 309 Ky. 372, 217 S.W.2d 962; McKnelly v. Gaddis, 309 Ky. 698, 218 S.W.2d 1; H. Smith Coal Company v. Marshall, Ky., 243 S.W.2d 40; Middlekamp v. Willis, Ky., 267 S.W.2d 924. While KRS 341.450 provides that the judicial review shall be heard in a summary manner, it does not change the general rule governing judicial review of administrative action.

The judgment of the circuit court affirmed the Commission’s decision in favor of the claimant. The benefits paid the claimant were properly charged to appellant’s reserve account. The motion for an appeal is sustained and an opinion delivered because of the importance of the questions presented.

Judgment affirmed.


text:
    BROADWAY & FOURTH AVENUE REALTY COMPANY, Appellant, v. Leona ALLEN et al., etc., Appellees.
    Court of Appeals of Kentucky.
    March 23, 1962.
    Rehearing Denied March 22, 1963.

      S.L. Greenebaum, Charles F. Wood, Greenebaum, Barnett, Wood & Doll and Thomas C. Carroll, Louisville, for appellant.
    Christopher C. Frishe, Paul E. Tierney, Legal Section, Dept, of Economic Security, Div. of Unemployment Ins., Frankfort, for appellees.
   MONTGOMERY, Judge.

This case was considered with Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299, and other cases (decided this day). Involved in each appeal is the question whether compensation benefits paid to a claimant shall be charged to the employer’s reserve account or to the Commission’s pooled account. The circuit court affirmed the Commission’s order approving the referee’s award of benefits.

Leona Allen had been employed by the Broadway & Fourth Avenue Realty Company since September 1948 as a maid at the Brown Building. The last day she worked was March 19, 1954.

Leona broke her arm on March 20, 1954. Her injury was not connected with the employment; hence, appellant was not liable for workmen’s compensation benefits. Leona reported her injury to her immediate superior and was advised that because of her inability to work she would have to be replaced but that her job would be held ninety days for her. Because Leona was unheard from at the end of that period, her employment was terminated on June 30, 1954.

Leona filed a claim on October 5, 1954, stating that severance from her employment was because of “lack of work.” She signed another Commission form on November 4, 1954, and gave as the reason for her separation, “Voluntarily quit.” Both statements were made under penalty for false statement. See KRS 341.370(3) for false statement disqualification. Appellant’s response was that she voluntarily quit.

On February 18, 1955, Leona testified that she had not worked since March 19, 1954, and had not been able to work until October 1954. She said that she called in to her employer in July and August and was told that there was no place for her. At that time, according to her, her arm was still in a sling. In September 1954, she refused appellant’s offer of employment because she would have had to work under a different supervisor. She made no attempt to obtain other employment.

Appellant urges that the Commission acted without authority or in excess of its authority and not in conformity with the pertinent statutes. The trial court upheld the award made by the Commission, which had refused to relieve appellant’s reserve account from the benefit? paid. The Commission held that KRS 341.370 prescribing the disqualifications to receive benefits should be construed narrowly and that the facts did not clearly and convincingly show that the claimant voluntarily quit without good cause or was discharged for misconduct.

In holding that KRS 341.370 should be construed narrowly against the employer, the Commission was in error. KRS 341.370 stands on a par with KRS 341.350 and KRS 341.530(3). Originally it was provided that the “Act shall be liberally construed to accomplish the purposes thereof.” Carroll’s Kentucky Statutes, Section 4748g-21. This statute was repealed in 1940. Kentucky Acts 1940, Chapter 191. In Barnes v. Indian Refining Company, 280 Ky. 811, 134 S.W.2d 620, it was held, “As a taxing statute, the limitations of the Act are to be strictly interpreted.” In Elkhorn & Jellico Coal Company v. Kentucky Unemployment Compensation Commission, 310 Ky. 674, 221 S.W.2d 640, it was held that “the employer’s reserve account from which these benefits are to be paid is financed by taxes levied on the employer, and they should only be disbursed when clearly required by the terms of the taxing statute.”

It would seem from the action of the Commission in this and related cases that these decisions have been ignored. The General Assembly in 1958, c. 4 provided that the eligibility requirements of KRS 341.350 and the conditions of benefit disqualifications of KRS 341.370 “shall be strictly construed.” This was an embodiment of the existing case law. Accordingly, both statutes should have been construed strictly as taxing statutes, and the Commission was wrong in its manner of construction. Inasmuch as KRS 341.530(3) concerns the charges made against the employer’s reserve account, it, as a taxing statute, also should be construed strictly.

The burden was on Leona to establish her claim by proving eligibility under KRS 341.350. Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299 (decided this day). Further, it was a necessary part of establishing her claim to carry the burden of proving that she did not quit voluntarily without good cause attributable to her employment under KRS 341.530(3). Fannon v. Federal Cartridge Corporation, 219 Minn. 306, 18 N.W.2d 249; John Morrell & Company v. Unemployment Compensation Commission, 69 S.Dak. 618, 13 N.W.2d 498; Henderson v. Department of Industrial Relations, 252 Ala. 239, 40 So.2d 629; Wolpers v. Unemployment Compensation Commission, 353 Mo. 1067, 186 S.W.2d 440; Seroskie v. Unemployment Compensation Board of Review, 169 Pa.Super. 470, 82 A.2d 558.

The Commission concluded that appellant’s reserve account was entitled to no relief. Apparently the referee, Commission, and trial court ignored KRS 341.530 concerning employer reserve accounts. Subsection (1) provides for the keeping of a separate reserve account for each employer. Subsection (2) provides that the benefits paid each eligible worker shall be charged to the employer’s reserve account excepting the benefits paid under Subsection (3), the pertinent part of which provides:

“Notwithstanding the provisions of subsection (2) of this section, benefits paid to an eligible worker and chargeable to an employer’s reserve account under such subsection shall be charged against the pooled account if such worker * * '* voluntarily left his most recent work with such employer without good cause attributable to the employment, * *

The quitting of a job by a woman for the purpose of joining her husband at a distant place is not “good cause attributable to the employment” and was held to preclude charging any benefits paid to the employer’s reserve account. Unemployment Insurance Commission v. Cochran Foil Company, Ky., 331 S.W.2d 903. To the same effect, see Kentucky Unemployment Insurance Commission v. Kroehler Manufacturing Company, Ky., 352 S.W.2d 212, wherein it was held that retirement under a voluntary system precluded charging the employer’s reserve account.

Other courts have been strict in construing similar statutes. An employee who left her employment because of her pregnancy was barred from receiving any bene1 fits. It was held that she left without good cause attributable to the employment or the employer. John Morrell & Company v. Unemployment Compensation Commission, 69 S.Dak. 618, 13 N.W.2d 498. Benefits were denied an employee when he had to quit work because of colds. It was pointed out that “unemployment compensation is in no sense sick benefits.” Brown-Brockmeyer Company v. Board of Review, 70 Ohio App.370, 45 N.E.2d 152. Unless the ill health or physical infirmity is shown to have resulted from the employment, the employee is disqualified from receiving benefits when he voluntarily leaves his employment on such account. The cause of the quitting must have been connected with the work. Henderson v. Department of Industrial Relations, 252 Ala. 239, 40 So.2d 629. In that case, the claim was filed two days after the employment ended. In State v. Hix, 132 W.Va. 516, 54 S.E.2d 198, three employees left work because of a bladder condition, hypertension, and the possibility of contracting tuberculosis because of dust conditions, respectively. In pointing out that the employers were not at fault in connection with the circumstances which caused claimants to cease work, it was said:

“In whatever way we view this case, claimants are not entitled to benefits. If they were ill and unable to work, they were not eligible to work, and, therefore, not entitled to benefits. If they were eligible to work by reason of being able for full time work, they were disqualified under Section 4(1) of the statute.”

See also Wolpers v. Unemployment Compensation Commission, 353 Mo. 1067, 186 S.W.2d 440; Zielinski v. Unemployment Compensation Board of Review, 174 Pa. Super. 244, 101 A.2d 419.

Leona is in a similar situation. Section 4(1) of the West Virginia statute contains the “without good cause” provision found in KRS 341.530(3). Under some of the foreign cases, Leona’s quitting when she first broke her arm would have constituted a voluntary quitting without good cause attributable to her employment. Certainly her failure to return to work at the end of ninety days or after having been offered suitable employment in September 1954 under KRS 341.370(1) (a) would have constituted a disqualification under the “good cause” statute, KRS 341.530(3).

In Unemployment Insurance Commission v. Cochran Foil Company, Ky., 331 S.W.2d 903, refusal of employment following a layoff period was deemed a leaving of her employment “without good cause attributable to the employment.” In a similar factual situation, where the employee was granted one month’s leave of absence on account of her illness and did not re-apply for employment at the end of the month although her former job was open to her, benefits were denied for the same reason. Rivers v. Director of Division of Employment Security, 323 Mass. 339, 82 N.E.2d 1.

Leona failed to sustain the burden of establishing her claim and the Commission was in error in charging appellant’s reserve account with the benefits paid. Again, it is appropriate to recall that the question of Leona’s entitlement to any benefits is not presented here, although some of the foreign decisions indicate that she would .not have been entitled to receive, any benefits. It is unnecessary to consider other contentions made.

The motion for an appeal is sustained and the judgment is reversed.

PALMORE, J., concurs in result only.

BIRD, J., dissents.


text:
    BROWN HOTEL COMPANY, Appellant, v. Mamie F. WHITE et al., etc., Appellees.
    Court of Appeals of Kentucky.
    March 23, 1962.
    Rehearing Denied March 22, 1963.
    S. L. Greenebaum, Charles F. Wood, Greenebaum, Burnett, Wood & Doll and Thomas C. Carroll, Louisville, for appellant.
    Christopher C. Frishe, Paul E. Tierney, Legal Section, Dept, of Economic Security, Div. of Unemployment Ins., Frankfort, for appellees.
   MONTGOMERY, Judge.

The Brown Hotel Company has moved for an appeal from the judgment of the ■circuit court which affirmed the Unemployment Insurance Commission’s award to Mamie F. White. Appellant questions the authority of the Commission to charge the benefits paid to appellant’s reserve account. See KRS 341.530. This case was considered with Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299, Broadway & Fourth Avenue Realty Company v. Allen, Ky., 365 S.W.2d 302, and other related cases (decided this day).

Mamie worked as a cleaning woman at the Brown Hotel on her last employment from January 1947 to 1954. Until February 20, 1954, her record for attendance at work had been satisfactory. On February 21, 1954, she reported that she was sick. She was absent from February 20 through March 15, 1954. Next, she was absent from April 2 through April 11, 1954. Her daughter reported that she was sick. May 9, 1954, was the last day she worked for appellant. On May 16, 1954, she again reported that she was sick. She made the same report on May 31, 1954. It is admitted that Mamie was ill on the occasions claimed. It was appellant’s rule, known to Mamie, that any employee should keep the employer informed when she was going to be absent and for how long. No further word was received from her and on June 13, 1954, her employment was terminated because of excessive absenteeism without notice to the employer. Mamie called in on June 20, and was told that her card had been pulled. She felt able to do her work at that time, she testified, but did not request re-employment.

Appellant contends that the Commission acted without authority, or in excess of its authority, and not in conformity with the pertinent statutes.

The decisions of the referee, Commission, and trial court were based on the theory that absence from work because of personal illness was involuntary and was not an act of misconduct justifying a denial of benefits. This conclusion is in error because it is the excessive absenteeism, coupled with the failure to give notice thereof to the employer, that constitutes the misconduct for which the employee was discharged. KRS 341.530(3) provides that benefits paid to an eligible worker are not chargeable to the employer’s reserve account “if such worker was discharged by such employer for misconduct connected with his most recent work for such employer.”

It is not disputed that Mamie knew of appellant’s rule concerning notice of absence from work. It is admitted that Mamie last worked on May 9, 1954, and that she called in on May 16 and 31, but was unheard from again until June 20. During this period of unexplained absence without notice, her employment was terminated at the end of the second week.

In excuse of her dereliction, Mamie says she gave the indefinite information to her supervisor that she would return to work when she was able. The evidence is conflicting on this point. Under the employer’s rule concerning notice of absence, weekly notices were considered sufficient.

An employee is obligated to render loyal, diligent, faithful, and obedient service to his employer. A failure in this respect is a disregard of the standards of behavior which the employer has the right to expect of his employee. Sopko v. Unemployment Compensation Board of Review, 168 Pa. Super. 625, 82 A.2d 598.

Mamie’s supervisor testified that it was necessary in the operation of the hotel for such employees to be present and to perform their duties regularly. Absences from work affect the entire work schedule of an employer and frequently make it impossible to utilize to the full extent the services of the employees who are present. When repeated or prolonged without justification, the absences tend to disrupt the discipline and order necessary for the proper maintenance and operation of any business enterprise. Luciano v. Unemployment Compensation Board of Review, 169 Pa.Super. 155, 82 A.2d 600.

In Merkle v. Review Board of Indiana Employment Security Division, 120 Ind.App. 108, 90 N.E.2d 524, it was held that continued absence from work without leave showed such disregard of the employer’s interest as constituted willful misconduct under a statute similar to KRS 341.530(3) and barred benefits. Under a strict construction of the statutes, Mamie has failed to show that she was not guilty of misconduct under KRS 341.530(3), thus barring the charging of her benefits to appellant’s reserve account. Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299; Broadway & Fourth Avenue Realty Company v. Allen, Ky., 365 S.W.2d 302.

Also for the reasons set forth in the latter case and in State v. Hix, 132 W.Va. 516, 54 S.E.2d 198, cited therein, appellant’s reserve account should not have been charged with the benefits paid. The judgment and awards to the contrary are in error.

The motion for an appeal is sustained and the judgment is reversed.

BIRD and PALMORE, JJ„ dissent.


text:
    BROWN HOTEL COMPANY, Appellant, v. Russell ROBERTS et al., etc., Appellees.
    Court of Appeals of Kentucky.
    March 23, 1962.
    Rehearing Denied March 22, 1963.
    S. L. Greenebaum, Charles F. Wood, Greenebaum, Barnett, Wood & Doll and Thomas C. Carroll, Louisville, for appellant.
    Christopher C. Frishe, Paul E. Tierney, Legal Section, Dept, of Economic Security, Div. of Unemployment Ins., Frankfort, for appellees.
   MONTGOMERY, Judge.

The Brown Hotel Company appeals from a circuit court judgment affirming an award made by the Unemployment Insurance Commission and its referee to Russell Roberts. Appellant challenges the charging of the benefits paid to its reserve account as being in violation of the pertinent statutes. See Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299, and related cases (decided this day).

Russell Roberts was employed as an engineer by appellant at its Kentucky Hotel from September 21, 1951, to January 15, 1955. On his claim application, Roberts gave as the reason for separation, “Voluntarily quit.” Appellant contested the payment of benefits on the ground that Roberts had been discharged.

The evidence discloses that on numerous occasions complaint had been made to Roberts because of his failure to provide the hotel kitchen with sufficient steam with which to operate the steam table. The chef who made these complaints said that he had talked to Roberts several times about it. Roberts’ immediate supervisor testified he had discovered that Roberts was turning off a valve which should not have been touched and that this was the cause of the trouble. He also said that Roberts was familiar with this work and knew what he was doing wrong. He said that he had warned Roberts about doing this work properly and that Roberts had not tried to do better.

After having warned Roberts, the supervisor was called at home and was informed that there was again no steam in the kitchen. Upon checking at the hotel, the supervisor found that the lack of steam was because Roberts again had turned off the valve in question in violation of orders. He was then discharged. Roberts admitted receiving the complaints and warnings, but attributed the lack of steam to a defective valve and said that other duties prohibited him from watching the manually-operated valve. Roberts testified that his supervisor had used some “pretty rough language” to him over the telephone and that he was practically forced to quit the job because “no man with any general principle and caring anything about himself would work under those conditions.” On the hearing, he admitted that he voluntarily quit his employment.

In rebuttal, the supervisor testified that there was no defect in the valve and that the same valve had been operating satisfactorily since Roberts’ dismissal.

The issue presented is whether the conduct of Roberts amounts to such misconduct under KRS 341.530(3) as to bar the charging of the employer’s reserve account with any benefits paid. The evidence is uncon-tradicted that as soon as Roberts’ employment was terminated the trouble with insufficient steam ended. It is true that Roberts placed the blame on a defective valve but nowhere does he show that he had made known this claimed defect while he was working. Nor does he deny that the matter was properly remedied by a turn of the manually-operated valve after complaint had been made. Roberts admits receiving the warnings in which his supervisor told him to leave the valve alone.

Under such circumstances, Roberts’ continued failure or refusal to perform a simple task in obedience to explicit and direct orders of his supervisor constitutes such misconduct under KRS 341.530(3) as bars the charging of appellant’s reserve account with the benefits paid. Siderio v. Unemployment Compensation Board of Review, 168 Pa.Super. 642, 82 A.2d 567; Sopko v. Unemployment Compensation Board of Review, 168 Pa.Super. 625, 82 A.2d 598; Luciano v. Unemployment Compensation Board of Review, 169 Pa.Super. 155, 82 A.2d 600; 48 Am.Jur., Social Security, etc., Section 38, page 541; 81 C.J.S. Social Security and Public Welfare § 162, page 245.

The motion for an appeal is sustained and the judgment is reversed.

BIRD and PALMORE, JJ., dissent.


author: ' MONTGOMERY, Judge.

text:
    BROWN HOTEL COMPANY, Appellant, v. Zula P. ELMORE et al., Appellees.
    Court of Appeals of Kentucky.
    March 23, 1962.
    Rehearing Denied March 22, 1963.

      S. L. Greenebaum, Charles F. Wood, Greenebaum, Barnett, Wood & Doll and Thomas C. Carroll, Louisville, for appellant.
    Christopher C. Frishe, Paul E. Tierney, Legal Section, Dept, of Economic Security, Div. of Unemployment Ins., Frankfort, for appellees.
   ' MONTGOMERY, Judge.

This case was considered with Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299, and other cases (decided this day).

Zula P. Elmore was employed at the Kentucky Hotel, operated by the Brown Hotel Company, from April 27 to August 23, 1954, when she was laid off due to a reduction in the working force. She was recalled to work on August 27, September 19, and October 15, 1954. Zula’s employment had been in the laundry. On recall, she was offered employment in the pantry preparing salads.

The employment in the pantry would have been in cooler surroundings at the same pay and hours with an opportunity for advancement. She refused the employment on the first two recalls for two reasons: lack of experience and rash on her hands. On the third call, she said the rash had disappeared but that she couldn’t do the type of work offered. The uncon-tradicted evidence introduced at the hearing before the Kentucky Unemployment Insurance Commission referee was to the effect that no experience was needed for the work offered and that it was customary to employ unskilled persons and to train them. It also was uncontradicted that the offer of employment was kept open until January 3, 1955, the date when claim for benefits was filed, and that the offer of employment was renewed at the referee’s hearing on April 25, 1955. Zula did not attend the hearing and did not testify.

The circuit court found that there was nothing in the record to show the availability of Zula for suitable work on the date of her application for benefits. The only statement in the record from Zula is the one made on February 14, 1955, to an examiner for the Commission. Her statement contains the following:

“Some time after the hotel laid me off the manager called me telling me he had a job for me working around food. Something I did not know anything about. I told the manager plus the fact I had a little ailment (rash) at the time did not accept the offer of work.”

The referee and Commission held that appellant’s reserve account was chargeable with the benefits paid Zula. The circuit court adjudged that the matter be remanded to the Commission for further proceedings to determine the availability or nonavailability of Zula for suitable work on the date of her claim for benefits. For this reason, the Commission argues that appellant’s appeal is premature because of a failure to exhaust its administrative remedy. No motion to dismiss the appeal has been made. However, in workmen’s compensation cases an order of the circuit court remanding the case to the Board has been held to be a final order and appealable. Searcy v. Three Point Coal Company, 280 Ky. 683, 134 S.W.2d 228; Department of Highways v. Giles, 284 Ky. 846, 146 S.W.2d 37; Kenmont Coal Company v. Clark, 294 Ky. 226, 171 S.W.2d 242; Mullins v. Kentucky West Virginia Gas Company, Ky., 307 S.W.2d 169. There is no apparent reason why the same rule should not obtain here. There is no merit in the contention.

There is no showing in the record of this case that the employee met the conditions of being able and available for suitable work in order to be eligible for benefits. KRS 341.350(3) and (4). The application for a determination of benefits contains no such showing. The claimant failed to show an eligibility for benefits while the employer showed, without contradiction, offers of suitable work. KRS 341.370(1) (a). Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299. The award made by the referee and confirmed by the Commission was erroneous. Appellant’s reserve account is not chargeable with the benefits paid to Zula. KRS 341.420(3).

The motion for an appeal is sustained and the judgment is reversed.

BIRD, J., dissents.


text:
    BROWN HOTEL COMPANY, Appellant, v. Edna A. NAPIER et al., Appellees.
    Court of Appeals of Kentucky.
    March 23, 1962.
    Rehearing Denied March 22, 1963.

      S. L. Greenebaum, Charles F. Wood, Greenebaum, Barnett, Wood & Doll and Thomas C. Carroll, Louisville, for appellant.
    Christopher C. Frishe, Paul E. Tierney, Legal Section, Dept, of Economic Security, Div. of Unemployment Ins., Frankfort, for appellees.
   MONTGOMERY, Judge.

This is a companion case to Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299 (this day decided). It involves the liability of appellant for an award to Edna A. Napier made -by the Kentucky Unemployment Insurance Commission and approved by judgment of the circuit court.

Edna A. Napier was employed as a waitress at the Kentucky Hotel operated by the appellant, Brown Hotel Company, from May 15, 1954, until her employment was terminated on February 22, 1955. She was absent from work on December 13, 19, 24, 26, 28, 29, 30, and 31, 1954, January 2 through 21, 1955, and February 17, 18, 20, 21, and 22, 1955, for a total of thirty-three days. She testified that illness due to “a cyst on my ovaries” caused her absence. At the time of the hearing, June 30, 1955, she was five and one-half months’ pregnant.

Edna made contradictory statements as to whether she was able to do the work as a waitress. She testified that her doctor had advised her that “the work was too hard for me” and “not to go back to work,” but insisted that she had no intention of quitting and “would accept the job if they would put me back.” At the hearing she was asked, “ * * * are you able to work now?” to which she replied, “* * * they have sent me out on two or three jobs— they won’t accept me.”

The pertinent statute, KRS 341.350, provides in part:

“An unemployed worker shall, * * be eligible for benefits with respect to any week of unemployment only if:
⅜ * ⅜ ⅝ ⅜ *
“(3) He is physically and mentally able to work;
“(4) He is available for suitable work.”

It should be noted that an amendment, KRS 341.350(7), enacted later provides for strict construction of this statute and of KRS 341.370 concerning disqualifications. This indicates the legislative intent. See Broadway & Fourth Avenue Realty Company v. Allen, Ky., 365 S.W.2d 302 (decided this day).

The physical condition of the claimant as shown by her continued absences from work, her doctor’s statement, and her rejections by prospective employers was such that she did not meet the eligibility requirements of being “physically and mentally able to work” or “available for suitable work.” In this respect, she failed to sustain the burden of proof of eligibility. Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299 (decided this date). The evidence for the claimant is insufficient to sustain the award made. It is unnecessary to consider the question of claimed industrial misconduct.

The motion for an appeal is sustained and the judgment is reversed.

BIRD, J., dissents.


text:
    BROADWAY & FOURTH AVENUE REALTY COMPANY, Appellant, v. Wesley CRABTREE et al., etc., Appellees.
    Court of Appeals of Kentucky.
    March 23, 1962.
    As Modified on Denial of Rehearing March 22, 1963.
    S. L. Greenebaum, Charles F. Wood, Greenebaum, Barnett, Wood & Doll and Thomas C. Carroll, Louisville, for appellant.
    Christopher C. Frishe, Paul E. Tierney, Legal Section, Dept, of Economic Security, Div. of Unemployment Ins., Frankfort, for appellees.
   MONTGOMERY, Judge.

This is a companion case to Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299, and other cases (decided this day). The right of the Unemployment Insurance Commission to charge the reserve account of the Broadway & Fourth Avenue Realty Company with the benefits paid to Wesley Crab-tree is challenged. The referee, Commission, and circuit court sustained the charge.

Wesley Crabtree worked for a few months as a “car hop” parking cars in the public storage garage operated by appellant. He was discharged on November 26, 1953, because he was not dependable.

The garage manager testified as follows:

“ * * * you couldn’t depend on him; you didn’t know when he would be there. He would call up and say he was sick, and after so many times of that we had to have help we could depend on; and I would get reports from other fellows who said they saw him on the street after he said he was sick, and I had to let him go.”

Wesley was warned repeatedly concerning his derelictions and was told that it was necessary for him to report at the proper time in order that the garage might he operated efficiently. Wesley admitted receiving the warnings and claimed that his absences were occasioned by a stomach ailment.

On the day Wesley was discharged, his supervisor said, Wesley reported for work at noon instead of at 7 a. m.; that Wesley tried, unsuccessfully, to get someone to work for him that afternoon; and that he stayed around until about 4 p. m. and then said he was sick and left. The evidence is conflicting as to whether his-supervisor told him not to come back. At any rate, he went back about ten or eleven o’clock the next morning and was told that he had been replaced. Wesley undertook to contradict this testimony, but admitted that he could not say that it was not a correct version.

Wesley said that after being fired he went to work for Asplundh Tree Expert Company and worked for them until July 2, 1954, when he was laid off. The claim prosecuted here was filed July 13, 1954, against As-plundh. The Commission record of base period wages indicates that Wesley may have worked for Midwest Mortgage Company after his discharge by appellant. The same record also shows Louisville Crushed Stone Company as a prior employer. The unemployment for which benefits were paid to Wesley occurred after July 2, 1954, and after employment by one or more other employers since his discharge by appellant on November 26, 1953, and did not result from that discharge. No unemployment is claimed by reason of the discharge by appellant on November 26, 1953. There is no explanation or question raised in the record why the claim was not prosecuted against Asplundh or Midwest for the “most recent work.” See KRS 341.370 and 341.530. This case characterizes the procedural informality and irregularity common in the records of such cases.

Appellant urges that under the pertinent statutes the Commission was in error in charging the benefits paid to Wesley to appellant’s reserve account. KRS 341.370(1) (c) provides a benefit disqualification if the employee “has been discharged for misconduct connected with his most recent work.” KRS 341.530(3) provides that the employer’s reserve account shall not be charged with any benefits paid to an employee discharged for such misconduct.

The rule is that persistent or chronic absenteeism without notice or excuse in the face of continued warnings from the employer constitutes such misconduct as requires a denial of benefits or of the charging of benefits paid to an employer’s reserve account. See cases, Annotation, 41 A.L.R. 2d, Section 3, page 1160. In Krawczyk v. Unemployment Compensation Board of Review, 175 Pa.Super. 361, 104 A.2d 338, a single day’s absence in the face of a warning to be present at work on a particular day was held sufficient. Habitual tardiness in the face of warnings in reporting for work constitutes misconduct which disqualifies a claimant from receiving benefits. Chapman v. Division of Unemployment Security of Department of Labor, La.App., 104 So.2d 201; Matthews v. Unemployment Compensation Board of Review, 188 Pa.Super. 522, 149 A.2d 187; Atlantic Freight Lines, Inc. v. Unemployment Compensation Board of Review, 189 Pa.Super. 527, 151 A.2d 822. Unless Wesley’s tardiness and absenteeism were excusable by reason of his claimed stomach ailment, his discharge was justified and he was disqualified from receiving any benefits chargeable to appellant’s reserve account.

The only testimony of a stomach ailment was given by Wesley. The burden of proof in this respect rested on him. Brown Hotel Company v. Edwards, Ky., 365 S.W.2d 299; Broadway & Fourth Avenue Realty Company v. Allen, Ky., 365 S.W.2d 302. Wesley attributed his delinquencies to the ailment and claimed to have had a Dr. Lake treat him on the afternoon of his discharge. The evidence that he was seen walking on the streets when he had claimed to be ill would indicate that he may have had a “walking” ailment. No one else testified to Wesley’s having an ailment. His burden of prcof could have been sustained by the introduction of testimony from Dr. Lake or other medical testimony. This failure and his statement that he went to work on another job indicate that there was little substance in the testimony of his claimed ailment and constitutes a failure to sustain the burden imposed upon him. It was error to charge appellant’s reserve account with any benefits paid to Wesley.

The motion for an appeal is sustained and the judgment is reversed.

BIRD, J., dissents.


author: STEWART, Chief Justice.

text:
    C. Hobart MILLS et al., Appellants, v. Henry BROUGHTON et al., Appellees.
    Court of Appeals of Kentucky.
    Sept. 28, 1962.
    Rehearing Denied March 22, 1963.
    Robert J. Watson, Middlesboro, for appellants.
    Charles G. Cole, Jr., Barbourville, for ap-pellees.
   STEWART, Chief Justice.

This appeal is from a judgment of the Knox Circuit Court, decreeing it was impossible to determine the will of the voters in the general election held in Knox County on November 7, 1961, in Upper Stinking Creek Precinct #6, and that no legal election had been held in that precinct.

This ruling obliterated the majority of votes received by Mattie Mills, C. Hobart Mills, and Garrett Brown, the Democratic candidates in the order named for jailer, magistrate and constable, who are appellants herein and were the contestees in circuit court, and declared duly elected to the respective offices Lester Broughton, Henry Broughton and Clark Sizemore, who were the Republican candidates and the contestants below.

The basis for the election contest brought by the apparently unsuccessful Republican candidates was that at this particular precinct the secrecy of the voting procedure was not preserved, as required by Section 147 of the Constitution of Kentucky and especially by KRS 125.140(2).

This subsection relates to voting by machine, and the portion thereof claimed to have been violated reads: “No voter shall be permitted to receive any assistance in voting unless he makes and signs an oath that, by reason of inability to read English * * * he is unable to vote without assistance. * * * ” This statutory provision then specifically outlines the duties imposed upon certain precinct election officers, who are required to aid such a handicapped person to register his vote on the voting machine, after the latter makes known his need for help in the manner prescribed.

The trial court found that a high rate of illiteracy prevailed in the voting precinct involved in this contest; that 68 of the 347 persons (19.5%) who voted signed the comparative signature book with an “X”; that 50% of all the voters were given aid by the judges in voting on the voting machine; and that none of the assisted voters made or signed the oath required by KRS 125.140 (2).

The record discloses that well over one hundred persons, of the one hundred and seventy-two who were named by the contestants (appellees) in their pleadings as illegally assisted voters, were subpoenaed. Approximately one-half of these appeared; some were brought in by bench warrants and some were produced as witnesses through the efforts of a specially appointed bailiff. Those who testified brought out the fact that some of these persons would have been entitled to assistance because of their inability to read, had they requested help and made and signed the proper oath. Others who were aided appeared not to have been illiterate and were therefore not due to receive any assistance. It is conclusively established, however, as pointed out by the findings of fact, that none of those who asked for and accepted the services of the judges in casting their votes made and signed the oath in conformity with KRS 125.140 (2).

A further finding of the trial court was that eleven persons were allowed to vote whose names did not appear on the registration list, and seven persons from another precinct were allowed to vote in the precinct under scrutiny. Twenty-three other persons were challenged but were permitted to vote after they signed affidavits; and they also were assisted by the judges without compliance with the oath provision abovemen-tioned.

The question arises: Is the making and signing of an oath mandatory before a voter may obtain the help described in KRS 125.-140(2) to enable him to vote on a voting machine ?

This particular subsection has never been construed by this Court. Nevertheless, KRS 118.300(1), a similar statutory provision in respect to voting by ballot, which is still in full force and effect, requires a voter who is disabled by illiteracy and desires to vote to make oath before his ballot is marked under the conditions and in the manner set forth in that subsection; and it has been uniformly held that a failure to make the prescribed oath invalidates the vote which is later cast. See Muncy v. Duff, 194 Ky. 303, 239 S.W. 49; Marilla v. Ratterman, 209 Ky. 409, 273 S.W. 69; Allen v. Griffith, 160 Ky. 528, 169 S.W. 1003; Harrison v. Stroud, 129 Ky. 193, 110 S.W. 828, 33 Ky.Law.Rep. 653.

If it is imperative under KRS 118.300(1) that oath be made before the clerk of an election precinct marks the ballot of the voter who cannot read, or otherwise the vote may not be counted, we can perceive of no reason why the same type of voter should be excused from making and signing the prescribed oath in order to obtain help in voting by machine. We believe it is clear the Legislature intended, where illiterates are involved, to carry over the same system to voting by machine that has all along been applicable to voting by ballot. Any other conclusion would be illogical.

Instead of providing for the vote to be set up by the judges and then for them to withdraw so the voter can activate the machine, thus registering his vote as set up or as he sees fit in the secrecy of the booth, KRS 125.140(2) states that one of the judges shall cast the vote in the presence of the voter and the other judge. Under these circumstances, it would appear the courts are under a duty to require that thei exact terms and conditions of this law he observed when assistance must be given to a voter who is unable to read.

In the present case, as has been mentioned, the trial court found that 50% of the votes were illegal, and that those few who did testify could not say for sure, due to their illiteracy, for whom their votes were cast. It has also been shown that others who were subpoenaed would not appear as witnesses. It was impossible, the trial court found, to ascertain for whom any of the illegal votes were cast.

According to KRS 122.080(4) the courts “may adjudge that there has been no election” only “if it appears from an inspection of the whole record that there has been such fraud, intimidation, bribery or violence in the conduct of the election that neither contestant nor contestee can be judged to have been fairly elected * *

However, in Napier v. Noplis, Ky., 318 S.W.2d 875, one of the most recent cases on the point, it was held that, even though there be no fraud or other gross impropriety in the conduct of the election, if it has been established that a large proportion of the votes cast were illegal, and it is not possible to determine how the votes were cast so as to charge them to the recipient, the election will nevertheless be voided. This holding was predicated upon the reasoning that, when a substantial number of the votes cast was shown to be illegal, it could therefore be reasonably presumed there had been a miscarriage of so great a magnitude in the voting process as to taint the election with fraud.

We can come to no other conclusion except that the number of the illegal votes in the precinct involved in this contest was so substantial in quantity that we must declare a fair election was not held therein. See Wells v. Wallace, Ky., 337 S.W.2d 18.

Wherefore, the judgment is affirmed.


text:
    Marion McALISTER et al., d/b/a Nashville Sash and Door Company, Appellants, v. W. R. WHITFORD et al., Appellees.
    Court of Appeals of Kentucky.
    June 15, 1962.
    Rehearing Denied March 22, 1963.

      L. B. Weir, Madisonville, for appellants.
    Carroll S. Franklin, Madisonville, for ap-pellees.
   MONTGOMERY, Judge.

Marion McAlister, et al., doing1 business as Nashville Sash and Door Company, appellants, sued W. R. Whitford and his wife, Helen, to recover $3,137.69 as the balance due on an account for materials and supplies furnished for the Whitford house and to enforce a materialman’s lien thereon. Both parties moved for summary judgment. Judgment in the sum of $128 was granted appellants. They appeal from the judgment in so far as any further recovery was denied.

By a contract dated June 30, 1958, the Whitfords, appellees, agreed to pay .$42,-891.47 to James B. Barker, doing business as Barker Construction Company, for the construction of a house in Madisonville. An advance payment of $8,000 was made when the contract was signed. The balance of the contract price was to be paid upon completion of the contract.

The construction started July 1, 1958. About four or five weeks later, Barker requested that appellees make him a further advance. Upon advice of their counsel, appellees agreed to make the advance if receipts from the suppliers of building materials’used on the job were furnished to .show that the cost of the materials had been paid. On September.29, 1958, Barker .furnished appellees with the requested receipts, including the following statement from appellants, to-wit:

“Received check from Barker Const Co. 9/29/58 for Jack Whitford Job /s/ Duncan Kennerly”

The statement was written on a memo pad sheet which bore at the bottom the following printed inscription, to-wit:

“Nashville Sash & Door Company 152 Second Ave., N. Nashville, Tennessee Telephone AL 6-3171”

Kennerly identified himself as the representative of appellants who handled the sale of the material and supplies on the Whitford job on order from Hayden Gil-key, Barker’s representative. Gilkey had been buying from appellants and dealing with Kennerly for more than three years. Kennerly testified that he gave the statement to Gilkey at his request when Gilkey presented him with a postdated check for the amount then due appellants. Kennerly said that Gilkey wanted the statement so that Barker could make a “draw” from Whitford.

Barker presented the receipts to appellees and received from them a check for $16,000 on October 1, 1958. A day or so later, Whitford learned that Barker had obtained the receipts by delivering postdated checks to the suppliers. Whitford undertook to stop payment on his check but it had already been honored by his bank.

Barker’s postdated check to appellants was not honored. Appellants continued to ■sell material to Barker. Thereafter, Bark•er’s contract was nullified. Appellees completed the house themselves. Appellants filed a materialman’s lien against the property which they have sought to enforce.

Appellants contend that: (1) Barker and Gilkey were the agents of appellees in procuring the statement from them; (2) ap-pellees had sufficient notice to protect themselves from any loss; and (3) there was no consideration for the statement.

Barker, in making the request for an advance, was acting for himself and for his sole benefit. He obtained the receipts in order to accomplish his own purpose: to get the advance. In seeking the advice of counsel, appellees were trying to protect themselves in making the payment. Gilkey, an employee of Barker’s, obtained the receipts to be presented to appellees. The entire transaction was one at “arm’s-length.” Presumably, appellees had no interest in making any payment in advance of completion of the contract.

Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. Restatement, Second, Agency, Volume I, Section 1, page 7; Palmer & Hardin v. Grand Lodge K. of P. of Kentucky, Ky., 121 S.W. 678. Under such circumstances, Gil-key was acting for his employer, Barker, who was seeking an advance for himself. Hence, neither Barker nor Gilkey was acting under any authority from appellees and neither was the agent of appellees.

Appellants argue that appellees were under a duty to use diligence to learn whether Barker’s suppliers had been paid and thus would have discovered the use of the postdated checks. It is sufficient to say that appellees used diligence in seeking the advice of counsel, and there was no obligation to call appellants to determine the nature of the check received by them. On the other hand, appellants’ representative, Kennerly, knowingly accepted the postdated check and gave the statement upon which appellees acted, to their detriment. Appellants, by their representative, induced ap-pellees to act, knowing that the postdated check accepted from Barker gave notice of its lack of honor and was given for the purpose of inducing appellees to act, and will not now be heard to say the contrary against appellees who relied on the statement. Bass & Co. v. Trustees of Madisonville First Christian Church, 250 Ky. 36, 61 S.W.2d 1074. This being true, the argument that there was no consideration given for the statement is meritless.

Judgment affirmed.