author: GANT, Judge.

text:
    UNIVERSITY OF LOUISVILLE, Appellant and Cross-Appellee, v. Kathryn MARTIN, Appellee and Cross-Appellant.
    Court of Appeals of Kentucky.
    Opinion Rendered March 10, 1978.
    As Modified On Denial of Rehearing June 23, 1978.
    Discretionary Review Denied Oct. 24, 1978.
    Ordered Published Dec. 1, 1978.
    Robert Matthews, John S. Reed, Jr., Greenebaum, Doll, Matthews & Boone, Edwin W. Paul, Legal Affairs Officer, University of Louisville, Louisville, for appellant and cross-appellee.
    Frank A. Logan, John T. Fowler, Louisville, for appellee and cross-appellant.
    Before GANT, HOGGE, and WILHOIT, JJ.
   GANT, Judge.

This is an appeal from a judgment of the Jefferson Circuit Court granting the appel-lee, Kathryn Martin, one year’s salary ($14,-400) and one year’s contribution to the appropriate retirement fund based upon one year’s salary from the appellant, University of Louisville. The pertinent facts are set out in a companion case, Martin v. University of Louisville, 541 F.2d 1171 (6th Cir.1976) wherein the appellant (appellee herein) through the Federal court sought back wages she claims were wrongfully withheld following her dismissal from a teaching assignment at the University of Louisville. On appeal before us is a similar request for relief filed in the State court.

As presented by the appellee, the decisive issue on appeal is whether the language contained in KRS 273.171(2) which was incorporated into and adopted as a part of the Articles of Incorporation of the University of Louisville constitutes an expression by the Commonwealth of Kentucky of consent to suit against the University of Louisville in state courts as permitted by § 231 of the Kentucky Constitution. We choose to answer in the negative.

A brief review of the statutory language and history surrounding this controversy is helpful in resolving this dispute. Prior to July 1, 1970, the University of Louisville was a municipal institution under Chapter 165 of the Kentucky Revised Statutes and, by KRS 164.810(3) promulgated that year, the university was designated as a “state institution”. At this time the university amended its Articles of Incorporation by adopting as a part of its charter the provisions of KRS 273.161 et seq. which provides in KRS 273.171(2) that the university shall have the power “[t]o sue and be sued, complain and defend . . . ” This provision would have been applicable even though the university had not amended its Articles of Incorporation since KRS 273.387(3) dictates that any “. . . nonstock, nonprofit corporation in existence on June 30,1968 . . ” includes in its Articles the provisions of KRS 273.161 to 273.390 without the necessity of amendment. The doctrine of sovereign immunity is granted in § 231 of our Constitution wherein it states: “The General Assembly may, by law, direct in what manner and in what courts suits may be brought against the Commonwealth.”

First this Court must determine whether the University of Louisville comes under the protective veil of the defense of sovereign immunity under any circumstances. As stated above, the university became a state institution of higher education in mid-1970 with all the attendant powers and protections, including immunity from suit except where the Kentucky General Assembly specifically waives it. Knott County Board of Education v. Mullins, Ky.App., 553 S.W.2d 852 (1977); Smith v. Commonwealth of Kentucky Department of Highways, Ky., 495 S.W.2d 178 (1973); Daniel’s Adm’r. v. Hoofnel, 287 Ky. 834, 155 S.W.2d 469 (1941); Commonwealth v. Madison, 269 Ky. 571, 108 S.W.2d 519 (1937). The doctrine extends to both actions in tort and contract. All-American Movers v. Kentucky Ex Rel. Hancock, Ky.App., 552 S.W.2d 679 (1977) and Foley Construction Co. v. Ward, Ky., 375 S.W.2d 392 (1964).

Next we must consider whether the defense is applicable to situations of this type. In essence the appellee contends that the contract claim herein is not a suit against the Commonwealth within the scope of § 231. In support of this position she cites several cases, including Kentucky State Parks Commission v. Wilder, et al., 260 Ky. 190, 84 S.W.2d 38 (1935); J. S. Watkins v. Dept. of Highways of the Commonwealth, Ky., 290 S.W.2d 28 (1956); and Board of Councilmen of City of Frankfort v. State Highway Commission, 236 Ky. 253, 32 S.W.2d 1008 (1930). Upon a close reading of these cases, it is readily apparent that each action was maintained either to compel state officers or agencies to perform a duty imposed upon them by law or to refrain from doing something that the law directs them not to do and that such actions are not regarded as suits against the state as required by § 231. In essence, these actions constitute actions of mandamus or prohibition which were not directed against the state but rather toward the official having the ministerial duty to execute the contract or comply with its terms. Although criticized on other grounds in Foley Construction Co. v. Ward, supra, the case of J. S. Watkins v. Dept. of Highways of the Commonwealth of Kentucky, supra, notes this distinction wherein it states:

. it has been recognized that a certain class of action may be brought against an agency of the state government even though not expressly authorized by the legislature. If the suit is to compel the performance of a ministerial duty by a state agency, it is not a suit against the state within the scope of sovereign immunity. 81 C.J.S., States, § 216(3). In this latter category is an action to compel a state agency to perform a contract legally entered into. Kentucky State Parks Commission v. Wilder, 256 Ky. 313, 76 S.W.2d 4.

This position is consistent with the earlier view of the court in Board of Councilmen v. State Highway Commission, supra, which states:

It is to be observed that in cases of this kind the distinction is drawn between suits seeking to create or increase the liability of the state, and suits seeking to compel administrative officers to satisfy a liability theretofore created — one to establish a right and the other to satisfy a right already established under authority of law.

In the present case the basis for her claim is a decision by the university to terminate her at the end of the spring semester in 1970. Whether she was denied a hearing or she failed to request one does not have any bearing on the propriety of the Board’s decision which is the subject of this controversy. Clearly this is a proprietary function of the university and any recovery against it would . . create or increase the liability of the state . . .” In the absence of performance on her part, the granting of the requested relief constitutes damages for a breach of contract by the university measured by the amount of her wages during the period of the breach. See Foley Construction Co. v. Ward, supra; Commonwealth of Kentucky Department of Highways v. Davidson, Ky., 383 S.W.2d 346 (1964); Wells v. Commonwealth of Kentucky, Ky., 384 S.W.2d 308 (1964).

We are now confronted with the problem of whether the Commonwealth waived the university’s immunity from suit in state courts by the language contained in the original charter of the university and the language of KRS 273.171 regarding the power “[t]o sue and be sued, complain and defend . . . ” As previously mentioned, the defense of sovereign immunity is a constitutional protection that can be waived only by the General Assembly. See Wells v. Commonwealth of Kentucky Department of Highways, supra. In a letter to both attorneys dated January 12, 1977, the trial judge explained that immunity was waived because the university bound itself and the teachers to an “elaborate document” referred to as “The Red Book.” Appellee takes this reasoning one step further by arguing that the university waived immunity by its charter which states that it can “sue and be sued.” Both are in error in that § 231 of the Constitution and the cases interpreting it have limited the right to waive immunity to the General Assembly. Thus, any action taken by the university cannot affect a waiver.

In the alternative the appellee contends that the legislature had waived immunity by the “sue and be sued” language of KRS 273.171. The courts of this Commonwealth confronted a similar argument in Wallace v. Laurel County Board of Education, 287 Ky. 454, 153 S.W.2d 914 (1941) and concluded that the words “to sue and to be sued” in the legislative acts creating Boards of Education do not authorize an action for negligence. As previously stated, the governmental immunity protection afforded by § 231 extends to contracts as well as actions in tort and as such we believe the reasoning in Wallace is applicable to the case at bar.

This Court is cognizant of the dictum in J. S. Watkins v. Department of Highways of the Commonwealth of Kentucky, supra, discussing the “mutuality of obligation” inherent in a contract and the court’s conclusion that “. . . the legislature, in authorizing the Highway Department to enter into a contract, by necessary implication, authorized it to sue or be sued thereon.” Cf. Derby Road Building Co. v. Commonwealth, Ky., 317 S.W.2d 891 (1958); Contra, H. E. Cummins & Sons Construction Co., Inc. v. Turnpike Authority of Kentucky, Ky.App., 562 S.W.2d 651, 24 K.Y.L.Summ. 14 (October 28, 1977) and George M. Eady Co. v. Jefferson County, Ky., 551 S.W.2d 571 (1977). However, the court explicitly rejected this viewpoint some six years later in Foley Construction Co. v. Ward, supra, wherein it states:

. it is concluded that in the Watkins case the discussion of mutuality of contractual obligation was and is erroneous dictum . The Watkins case affords no authority to support a suit for damages based on breach of contract against the state or its Department of Highways . . . The allowance of suits for damages such as this one would create havoc and confusion in the operation of the Department of Highways . The wisdom of this sound public policy . is obvious.

The proper course to be followed in actions of this type is found in KRS 44.260 et seq. which provides for . . an action against the Commonwealth on a claim for enforcement of contract or on a claim for breach of contract . . . ” This section, the Board of Claims Act, was enacted by the legislature to waive the defense of immunity by providing a remedy for this particular character of claim. In prescribing this procedure, the legislature was acting under § 231, which authorizes the General Assembly to direct the manner and in what courts suits may be brought against the Commonwealth. As a matter of grace, such a remedy may be granted, withdrawn or restricted at the will of the legislature. University of Kentucky v. Guynn, Ky., 372 S.W.2d 414 (1963). The present claim should have been brought in the Franklin Circuit Court as provided by KRS 44.270(1) and her failure to do so should have resulted in a dismissal by the Jefferson Circuit Court. See if. E. Cum-mins & Sons Construction Co., Inc. v. Turnpike Authority of Kentucky, supra.

For the above stated reasons, the judgment of the lower court is reversed with directions to enter an order dismissing the action in this court.

All concur.


source: Caselaw Access Project

author: WHITE, Judge.

license: Public Domain

text:
    Albert C. PARTON, Administrator of the Estate of Robert Schindhelm, Appellant, v. Link ROBINSON, Hallie Robinson, Florence Deposit Bank, Covington Trust and Banking Company, Metropolitan Life Insurance Company, Loredo Estenfelder d/b/a Estenfelder Realty Company, and Emma Jurgens, Appellees.
    Court of Appeals of Kentucky.
    Dec. 1, 1978.

      Edward S. Monohan, IV, Charles H. Marksberry, Vest, Ware & Monohan, Florence, for appellant.
    William P. McEvoy, Burlington, for ap-pellees, Link Robinson, Hallie Robinson and Florence Deposit Bank.
    James G. Woltermann, Adams, Brooking & Stepner, Covington, for appellee, Coving-ton Trust and Banking Co.
    John J. O’Hara, Donald J. Ruberg, O’Hara, Ruberg, Cetrulo & Osborne, Cov-ington, for appellee, Metropolitan Life Ins. Co.

      John R. Blakely, Covington, for appellee, Loredo S. Estenfelder d/b/a Estenfelder Realty Co.
    Clyde W. Middleton, Covington, for ap-pellee, Emma Jurgens.
    Before WHITE, HOWARD and PARK, JJ.
   WHITE, Judge.

Appellant appeals a summary judgment rendered in favor of appellees by the Boone Circuit Court.

Appellant Parton, administrator of the estate of Robert Schindhelm, brought suit against Eileen Franklin Oates, James Drew and Darnell Drew for alleged conversion of personal and real property of decedent Schindhelm. Subsequent thereto, appellant filed an amended complaint to include the present appellees as defendants to the suit. The original defendants are not appellees here but apparently are still parties below in some respect. All appellees except Metropolitan Life Insurance Company are allegedly involved because of a transfer of property owned by decedent. As appellees are numerous and the fact situation rather complex, a chronological narration of the facts is in order at this point.

On June 21, 1973, the deceased, Robert Schindhelm, executed an instrument giving power of attorney to his niece, Eileen Franklin (now Oates), which was duly recorded with the County Clerk of Boone County on October 1, 1973. On October 3, 1973, property owned by Robert Schindhelm located at 14 Julia Avenue, Florence, Kentucky, was conveyed to appellees Link and Hallie Robinson for the sum of $20,860.45. The transaction was negotiated by appellee Estenfelder Realty Company. At the closing of the real estate transaction, the Rob-insons drew certain checks payable to “Eileen Franklin attorney in fact for Robert Schindhelm.” One of these checks, in the amount of $100, was then endorsed by Eileen Franklin as attorney in fact for Robert Schindhelm to Estenfelder Realty Company for payment of a commission fee. The other check was endorsed by Eileen Franklin to Darnell Drew, who deposited it to her checking account at Covington Trust and Banking Company. Appellee Covington Trust and Banking Company credited the deposit to Drew’s checking account and forwarded the instrument through banking channels to the drawer, appellee Florence Deposit Bank, which paid it. On August 29, 1975, the Robinsons deeded the above property to appellee Emma Jurgens.

On June 26, 1973, appellee Metropolitan Life Insurance Company issued two checks totaling $2,910.79 payable to the order of Robert A. Schindhelm, representing cash surrender value of two life insurance policies issued by appellee on the life of Schin-dhelm. The record is unclear as to whether Schindhelm or Eileen Franklin as attorney in fact endorsed the checks.

All of appellant’s complaints against the appellees stem from Eileen Franklin’s exercise of power of attorney. Appellant contends that Schindhelm did not have the requisite mental capacity to execute a valid power of attorney and that Franklin fraudulently induced Schindhelm to sign such document. At the time of the execution of the document, Schindhelm was a resident in a nursing home. Appellant contends that prior to execution of the power Schindhelm had suffered a cerebro vascular accident which resulted in massive brain damage, leaving Schindhelm almost totally blind, non-ambulatory and incoherent from March 5,1973, until the date of his death, April 11, 1974.

Appellant contends that appellees Link and Hallie Robinson were never legal owners of the aforementioned real estate and that their deed was void because Franklin had no power to convey any interest in said real estate; therefore, the Robinsons’ transfer to appellee Jurgens was also void. Appellant seeks to have these transfers set aside.

Appellees Link and Hallie Robinson and Emma Jurgens contend they were bona fide purchasers for value without notice and, as such, appellant cannot seek to have their deeds conveying the property in question set aside. It is noted that appel-lees dealt with Eileen Franklin, who represented herself as possessing power of attorney for Robert Schindhelm. This power of attorney was duly recorded. There is nothing in the record to indicate that appellees had any reason to question the validity of this power or the competency of Schin-dhelm to execute same. Nor is there evidence that appellees had notice of Schin-dhelm’s alleged incompetency or any reason to suspect the power might be defective. It has long been established in this jurisdiction that a third party dealing with the attorney in fact is only required to look to the language of the power of attorney to determine the extent of the power. Reed v. Welsh, 11 Bush 450, 74 Ky. 450 (1875). Furthermore, a good faith purchaser “ . [will] not be bound to consult an attorney, or to look for subtle rules of law, or to make a hypercritical analysis of the language of the power, but must be protected in his purchase made in good faith.” Id. at 458. Under this rule of law, appellees Link and Hallie Robinson are protected in their title to the property. Appellee Jurgens, as a good faith purchaser from the Robinsons, is also protected.

Appellant claims the deeds should be voided because the power of attorney was void due to Sehindhelm’s incapacity. Appellant contends Eileen Franklin induced Schindhelm to sign the power of attorney knowing he had not the requisite mental capacity and therefore any of Ms. Franklin’s actions under the power are fraudulent. The question of the validity of the power of attorney and Schindhelm’s capacity to execute same is not before this court, and it would be improper to rule on the issue at this time. We would point out, however, even if Schindhelm had lacked the requisite mental capacity to execute a power of attorney, the power would not necessarily be void, but merely voidable. 3 Am. Jur.2d Agency § 24. Further, even if it is found that Schindhelm could not legally execute such power and Ms. Franklin fraudulently conveyed the property in question knowing Schindhelm had outstanding debts, appellees Robinsons and Jurgens are protected by KRS 378.010, which states:

Every gift, conveyance, assignment or transfer of, or charge upon, any estate, real or personal, or right or thing in action, or any rent or profit thereof, made with the intent to delay, hinder or defraud creditors, purchasers or other persons, . . . shall be void as against such creditors, purchasers and other persons. This section shall not affect the title of a purchaser for a valuable consideration, unless it appears that he had notice of the fraudulent intent of his immediate grantor or of the fraud rendering void the title of such grantor.

Appellant contends the appellee banks are liable in conversion for paying checks with the endorsement of Eileen Franklin as attorney in fact for Robert Schindhelm. Appellant claims Ms. Franklin’s signature was unauthorized or forged due to the invalid power of attorney, making appellee banks liable for conversion under KRS 355.-3-419(l)(c), which states: “(1) An instrument is converted when . (c) it is paid on a forged indorsement.”

The checks in question were made out to “Eileen Franklin Attorney in Fact Robert Schindhelm” as payee and endorsed in the same manner. KRS 355.3-117 states:

(1) An instrument made payable to a named person with the addition of words describing him (a) as agent or officer of a specified person is payable to his principal but the agent or officer may act as if he were the holder; (b) as any other fiduciary for a specified person or purpose is payable to the payee and may be negotiated, discharged or enforced by him.

The checks were made payable to Eileen Franklin as agent or fiduciary for Robert Schindhelm. Thus, KRS 355.3-117 applies, making negotiation and payment upon this endorsement proper.

Appellant contends that such endorsement was invalid because unauthorized and cites KRS 355.1-201(43), which provides that an endorsement is unauthorized if made without actual, implied, or apparent authority and includes a forgery. However, KRS 355.3-419(l)(c) allows for recovery only when an endorsement is forged. Appellant cites several cases finding an unauthorized signature a forgery for purposes of conversion under similar statutes. However, both cases involved actually forging the name of others. We feel the facts of this case are more closely aligned to Asher v. U. S., 480 F.2d 580 (6th Cir.1973). Asher involved a forgery prosecution under 18 U.S.C. § 495, where the defendant, appointed as custodian for an incompetent, continued to endorse government checks made payable to her as custodian, using her own name followed by that of the incompetent, even after the death of the incompetent. The court found defendant’s signature an agency endorsement and held an agency endorsement is not a forgery even though it may be fraudulent or for the purpose of defrauding.

We do not find Eileen Franklin’s signature a forgery as it relates to the issue of conversion in this case. No actual forging of another’s name was involved. As far as appellee banks were concerned, apparent authority appeared to reside in Ms. Franklin by virtue of the recorded power of attorney and no proof was offered by appellant indicating the banks were put on notice of any irregularity in the power or its execution. Thus, we are hard pressed to find a forgery in this instance under KRS 355.3-419(1)(c).

Appellant also contends Loredo Es-tenfelder d/b/a Estenfelder Realty is liable for conversion under KRS 355.3-419(1)(c). Appellant quotes Bender’s UCC Service, Hart & Wilber, Commercial Paper § 12.38, for the proposition that appellee Estenfelder “paid” within the meaning of the statute. Estenfelder received a check for a commission, payable to Franklin as attorney in fact for Schindhelm and endorsed in the appropriate manner to Estenfelder. Bender’s Service, supra, states:

. anyone paying at any point following an essential endorsement which has been forged is converting the instrument as against the true owner. The result is that there can be a series of conversions following such an endorsement, each person paying becoming liable to the owner or victim of the wrongdoing. This is because no person following the endorsement has title to the instrument and hence is misappropriating property of another.

Even accepting appellant’s argument that Estenfelder had “paid” on the check, no liability for conversion could be established for the reasons in the foregoing discussion concerning the appellee banks’ liability.

Appellant contends that appellee Metropolitan Life Insurance Company is liable on checks issued for the cash surrender value of life insurance policies on Schin-dhelm. Metropolitan issued the checks payable to Schindhelm. Appellant claims these checks were stolen by Ms. Franklin and subsequently paid to her upon her endorsement as attorney in fact for Schindhelm and upon appellant’s presentment of these checks, Metropolitan refused to again pay. Metropolitan claims the cheeks were endorsed by Schindhelm. We are unable to determine from the record who actually endorsed the checks and the trial court makes no finding concerning the matter. In any event, summary judgment was properly granted.

KRS 304.14-260 provides:

Whenever the proceeds of or payments under a life or health insurance policy or annuity contract heretofore or hereafter issued become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in accordance therewith or in accordance with any written assignment thereof, the person then designated as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor, and such payments shall fully discharge the insurer from all claims under the policy or contract unless, before payment is made, the insurer has received at its principal office written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.

The checks were payable to Robert A. Schindhelm. If Schindhelm endorsed the checks, Metropolitan is discharged under the above statute. If Eileen Franklin endorsed the check as attorney in fact for Schindhelm, the issue is whether her signature is authorized. KRS 355.3-307(1) creates a presumption that the signature was authorized. Franklin’s authority appeared valid from the recorded power of attorney. Again we cite Reed v. Welsh, supra, for the proposition that a third party dealing with the attorney in fact need not look beyond the language of the power to determine the extent of the power.

Appellant lastly asks this court to dismiss appellees Link and Hallie Robinson and Estenfelder’s counterclaims for malicious prosecution. The trial court overruled appellant’s motion on this issue. The trial court’s ruling was not a final order and thus not appealable. Consequently, we cannot review this issue at this time.

The judgment is affirmed.

All concur.


author: LESTER, Judge.

text:
    Floyd M. ABBOTT, Jr. and Bugs Distributors, Inc., Appellants, v. SOUTHERN SUBARU STAR, INC., Appellee.
    Court of Appeals of Kentucky.
    Dec. 1, 1978.

      Henry S. Johnson, Handmaker, Weber & Meyer, Louisville, for appellants.
    George E. Morrow, Martin, Tate, Morrow & Marston, Memphis, Tenn., Robert S. Walker, III, Bradford L. Cowgill, Brown, Sledd & McCann, P. S. C., Lexington, for appellee.
    Before HAYES, HOWERTON and LESTER, JJ.
   LESTER, Judge.

This appeal arises from a final judgment of October 25, 1977, which referred to a default judgment (as to liability of appellants) entered on September 30, 1977, amended on October 4,1977, and which was based upon CR 37.02.

Appellee, a Texas corporation, brought this action in November, 1975, against appellants for fraud and conversion. Prior to May 25, 1973, both Southern Subaru Star, Inc. and Bug’s Distributors, Inc., a Kentucky corporation, had distributorship agreements with an importing firm (Subaru of America, Inc.) for the sale of automobiles to retail dealers in about eight southern states. The two companies decided to enter into a joint venture for the aforesaid purpose and by agreement of the last mentioned date, undertook to do so, operating under the name of Subaru of the South. Star was to receive 78.6% of the profit while Bug’s was to have 21.4%. Floyd Abbott was to manage the affairs and conduct the business for the venture. On November 8, 1974, both Star and Bug’s surrendered their respective distributorships to the importer and formed yet another corporation, denominated Subaru of the South, Inc., which in turn became the distributor of the vehicles in a number of southern states. South was a Kentucky corporation and Abbott, again, was the chief operating officer. Both Star and Bug’s contributed most of their assets to South and the ratio of stock held was 51% Bug’s and 49% to Star.

From all outward appearances the business was fairing well until Abbott purchased a jet airplane for approximately one million dollars in December of 1974 in the name of the new company. From this point forward, everything went “downhill,” and in November of the following year, Star filed its complaint in the Boyle Circuit Court charging that Abbott and the corporation that he controlled, namely, Bug’s, had converted in excess of three hundred thousand dollars from South. Appellants counterclaimed for more than a million.

Through their first set of attorneys, the defendants below filed an answer in which they denied, among other allegations, that the plaintiff was at all times mentioned in the complaint as a Subaru distributor. Not until some two years later after the entry of the default judgment as to liability is there even the slightest reference in the numerous pleadings, interrogatories and depositions to the character, nature or capacity of the plaintiff to maintain a suit.

On December 3, 1976, the court entered an order granting leave to appellants’ original counsel to withdraw because differences had arisen between them. Mr. W. A. Wickliffe and Mr. Tebbs S. Moore then undertook the defense of the case which lasted until September 19, 1977, when leave was also granted them to withdraw because of Abbott’s failure to pay them a fee or expenses, and because of his attempts to practice the case. It should be noted that on July 21, 1977, the trial court had ordered a pretrial conference to be held on October 4, 1977, and trial set for the eleventh of that month. On the same day (9/19/77) as defendants’ lawyers were relieved, the trial judge, by written order in the presence of Abbott, required that he obtain counsel no later than September 23,1977, that the new lawyer report to the court no later than that date and that the defendants submit memorandum ten days prior to the pretrial conference.

Appellants failed to abide by the court’s orders and the default was entered, and in so doing, the judge assigned his reasons. Rather than our reviewing the problems the circuit court had with Abbott, we think the best resume would be to quote parts of the judgment. After pointing out that defendants below had not requested relief from the original order setting pretrial proceedings (7/21/77), the court said:

In addition, the Court upon a thorough and complete review of the record in this case, finds . . . that as far back as December 10, 1976, defendants having failed to comply with pretrial discovery, caused the plaintiff to seek relief under Rule 37 and that further on March 22, 1977, the defendants’ failure to comply with the Civil Rules of Discovery caused the plaintiff once again to seek relief from the Court; that on March 4, 1977, additional relief was sought and granted to the plaintiffs for failure of the defendants to comply with the Rules of Discovery and orders of this Court, that on May 13, 1977, the defendants once again sought relief from this Court which was granted, for the defendants’ failure to comply with the orders of this Court relating to discovery which again occurred on July 6, 1977, to which the plaintiffs objected and moved for a default judgment on July 15, 1977 which was overruled by this Court in deference to the defendants.
On September 2, 1977, pursuant to the motion of the defendant, additional time to comply with this Court’s orders [was] granted the defendant and finally, on September 13, 1977, it was ordered that the defendants comply with the orders of this Court in preparation for their pre-trial of October 4, 1977, to present pre-trial memorandum although the Court granted the defendant relief from certain other orders of the Court, relating to the payment of Court costs.
On September 16, 1977, this Court allowed the defendants’ attorneys to withdraw on the grounds that the defendant was not cooperating with their counsel as well as creating other problems, as contained within the affidavit of counsel filed in support of their motion which was heard on September 16, 1977.
The defendants, on September 23, 1977, filed a certain affidavit together with a letter allegedly written by defendant, Floyd Abbott, Jr.’s doctor.
It is the opinion of the Court, that the allegations contained in the affidavit, and information contained in the letter of the defendant, Bug Abbott’s alleged doctor, are on their face insufficient reasons to grant a continuance or to allow the defendant to be relieved from the obligations of filing a pre-trial memorandum as ordered by this Court.
The Court is further of the opinion, that manifest injustice has resulted to the plaintiff as a result of the defendants’ repeated failure to comply with the Civil Rules of Discovery and orders of this Court without justification although the Court has, in each instance, overruled the plaintiff’s previous motions for default judgment and has in most instances, granted the defendants additional time to comply with the Civil Rules or orders of this Court which the defendants had failed to previously comply with.
However, it has been the policy of this Court for many years to demand strict adherence by parties to litigation, to comply with the orders of this Court in filing pre-trial memorandum using the format provided by this Court.
The Court specifically finds that the defendants have presented no justification in the opinion of this Court for failing to comply with the Court’s order to file a pre-trial memorandum and such failure is a material and substantial breach of not only this Court’s order, but of the design to have a meaningful pre-trial conference and orderly trial in this extremely complex case.
Because of the breach by the defendants of this Court’s order in failing to file pre-trial memorandum, taken in the context of the defendants’ repeated failure to comply with the Civil Rules of Procedure relating to discovery and other orders of this Court; the Court hereby SUSTAINS the motion of the plaintiff and ORDERS that the answers of the defendant herein be stricken and that pursuant to Civil Rule 37 and Civil Rule 55, a default judgment be granted, in favor of the plaintiff on the issue of liability as alleged in the plaintiff’s Complaint.
Further, it is ORDERED by this Court, that a hearing on the issues of damages shall be held before the Court, in the chambers of the Boyle County Grand Jury, Boyle County Courthouse, Second Floor, shall be held on October 11, 1977 beginning at 9:00 a. m. in Danville, Kentucky.

The record supports the foregoing.

On the date set for the hearing as to damages, October 11, 1977, the defendants, through their present counsel, filed a motion to dismiss the complaint upon the ground that the appellee had not qualified to transact business in this jurisdiction which disqualified it from maintaining an action in the Kentucky courts. KRS 271A.610. The court entered final judgment and overruled the motion.

Appellants raise the issues concerning ap-pellee’s capacity to maintain the action, the court’s jurisdiction and abuse of discretion.

KRS 271A.610 provides that any foreign corporation that fails to qualify to do business in this jurisdiction shall be denied the privilege of maintaining any action, suit or proceeding in any court of this state.

Nothing contained in KRS 271A.610 deals with jurisdiction of the circuit courts, but it sets forth the capacity or lack thereof of a nonqualifying foreign corporation to bring suit in our courts. The appellants recognize this principle when they state, in part, in their first issue, “The appellee in this action is barred from this suit, and lacks the capacity to sue, . . . ” CR 9.01 requires that:

When a party desires to raise an issue as to the legal existence of any party or the capacity of any party to sue or be sued or the authority of a party to sue or be sued in a representative capacity, he shall do so by specific negative averment, which shall include such supporting particulars as are peculiarly within the pleader’s knowledge.

Prior to the entry of the default judgment, the only references to the capacity of the appellee were contained first, on the complaint where Southern Subaru Star, Inc. alleged it was an authorized distributor; secondly, in the answer where appellants generally denied the foregoing allegation; and, thirdly, in defendant’s motion for a bond of costs which contains the following language:

Defendants state that plaintiff is a foreign corporation and is a non-resident of the State of Kentucky, and as authority for this motion, defendants rely upon the provisions of KRS 453.220 and KRS 453.-225.

We observe that appellant recognized that appellee was a foreign corporation but failed to raise the issue of capacity by reference to KRS 271A.610. In and of itself, this omission would constitute an implied waiver of the defense.

At 20 C.J.S. Corporations § 1910 at 138, the rule is enunciated that:

The plea or answer must set up distinctly that plaintiff is a corporation of the kind or class named in the restrictive statute, and the defense must be clearly raised by affirmation of facts which, if proved, bring plaintiff within the operation of the statute prohibiting it from maintaining the action.

And failure to so plead specifically is a waiver of that defense. See also 36 Am. Jur.2d Foreign Corporations § 588 at 584.

In Borderland Coal Sales Company v. Walker, 208 Ky. 146, 270 S.W. 717 (1925) the rule set out above is contained in the following:

The ground of the court’s action appears to be that the petition does not show that the plaintiff has complied with section 571, Kentucky Statutes, which requires corporations before carrying on any business in this state to file in the office of the secretary of state the statement therein provided for. This is a matter of defense and must be presented by way of answer. It is not ground for a general demurrer to the petition. Id., 270 S.W. at 717.

This principle has been the law in this jurisdiction as early as 1908, Kirk-Christy Co. v. American Association, 128 Ky. 668, 32 Ky.Law Rep. 1177, 108 S.W. 232 (1908), and continues to be so by virtue of CR 9.01 with the further requirement that the “specific negative averment” shall include “supporting particulars.”

The Kentucky position is the same as many jurisdictions and we refer to two of somewhat recent origin. In King v. Petroleum Services Corporation, 536 P.2d 116, 118 (Alaska 1975), the Supreme Court of Alaska said:

As we held in Brown v. Music, Inc., 359 P.2d 295 (Alaska 1961), failure to raise the issue of capacity to sue results in a waiver of the defense.

The Alaska statute (AS 10.05.720) denies foreign corporations access to the courts unless certain filing prerequisites are met, much like the Kentucky law. The Brown case, supra, relied upon Rule 9(a) of the Federal Rules of Civil Procedure and we invite attention to the cases collected in Notes of Decisions at Fed. Rules Civ. Proc. rule 9, 28 U.S.C.A.

An Illinois case bears certain similarities to the one at bar. In that litigation, Amerco Field Office v. Onofario, 22 Ill.App.3d 989, 317 N.E.2d 596 (1974), after an order was entered vacating a default judgment, the plaintiff filed notice of appeal, and three days thereafter the defendant filed a motion in the trial court to dismiss the appeal on the grounds that the plaintiff, a foreign corporation, had never qualified to do business in the state and was thus statutorily precluded from maintaining an action in the courts. The Appellate Court of Illinois, Second District, responded:

The failure of a foreign corporation to obtain a Certificate of Authority is not a prerequisite to the court’s acquiring jurisdiction over the litigation. The failure of the plaintiff to obtain a certificate, if required, is a defense which will be considered waived unless raised by the defendant at the earliest opportunity. In the case at hand, it cannot be said that defendant raised this defense at the earliest opportunity. Accordingly, we believe this defense has been waived and we do not remand.

We believe the foregoing disposes of appellant’s issue as to jurisdiction, but we would remind them that jurisdiction refers to the power of a court to hear and determine the subject matter of the litigation while capacity deals with the ability of a party to participate in that litigation.

Although not submitted for our review, lurking in the background is the issue of whether the doors of the courts may be closed to a foreign corporation when it has been deprived of its goods by tortious acts such as the conversion and fraud alleged herein if and when it has been doing business in this jurisdiction without qualifying to do so. In Borderland Coal Sales, supra, 270 S.W. at 717, the court in referring to such a litigant, said:

The plaintiff may maintain the action to protect its property rights from a wrongdoer, though it has not complied with section 571, Kentucky Statutes.

See also § 14, Constitution of Kentucky. The judgment is affirmed.

All concur.


text:
    Eldridge D. SHANKS, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    Dec. 1, 1978.

      Jack Emory Farley, Public Advocate, Com. of Kentucky, Larry H. Marshall, Asst. Public Defender, Frankfort, for appellant.
    Robert F. Stephens, Atty. Gen., Rodney V. Tapp, Asst. Atty. Gen., Frankfort, for appellee.
    Before GANT, HOGGE and HOWER-TON, JJ.
   GANT, Judge.

Appellant was convicted of trafficking in heroin and sentenced to 15 years imprisonment as a persistent felony offender. His first assignment of error involves an interpretation of Article IV(e) of the Interstate Agreement on Detainers, 18 U.S.C.A. Appendix 136, 138 (1978), which is KRS 440.-450, Article IV(5). This section provides as follows:

If trial is not had on any indictment, information or complaint contemplated hereby prior to the prisoner’s being returned to the original place of imprisonment pursuant to article V(e) hereof, such indictment, information or complaint shall not be of any further force or effect, and the court shall enter an order dismissing the same with prejudice.

The facts affording the basis of this argument commenced on December 6, 1975, when the appellant, while under indictment for this charge, escaped from custody about two days before he was scheduled for trial. He was apprehended January 24, 1977, by the FBI and returned to the Fayette County Jail on a fugitive warrant arising from the state charge, a state warrant for escape and a federal charge of aiding and abetting the escape of a federal prisoner. He was brought to trial on the state escape charge within three weeks of arrest, convicted and sentenced to five years in prison. The next week he was convicted in the United States District Court for Eastern Kentucky on the charge of aiding and abetting the escape of a federal prisoner and was also sentenced to five years imprisonment on this charge. After both these convictions, the appellant remained in the Fayette County Jail, a federal prisoner but in the custody of both state and federal authorities.

In April, 1977, the Fayette Circuit Court brought the defendant before that court pursuant to a writ of habeas corpus ad prosequendum, and a trial was held which resulted in a hung jury. A mistrial was declared and the defendant placed in the custody of the federal authorities, who sent him to the Federal Correctional Institution in Atlanta, Georgia. A detainer was placed against the appellant and he was returned in October, 1977, to face a second trial, from which this conviction resulted.

This consideration of Article IV(e) is a question of first impression before the courts of Kentucky. As we conceive the questions posed, there are two. First, is the writ of habeas corpus ad prosequendum under these circumstances a detainer within the meaning of the Interstate Agreement on Detainers, (hereinafter called IAD)? Second, if it is, does the IAD require final disposition before the prisoner is returned to the federal authorities?

The first question had been considered by four separate Circuit Courts of Appeal from the federal side, with an even split among them. However, that split was resolved by the United States Supreme Court in the case of United States v. Mauro, 436 U.S. 340, 98 S.Ct. 1834, 56 L.Ed.2d 329 (1978). That opinion holds that where the writ of habeas corpus ad prosequendum is issued prior to the detainer, it “is not a detainer within the meaning of the Agreement.” However, in a companion case, the court held that had the detainer been filed first, the Agreement was then “triggered” and the • subsequent writ required compliance with the agreement. Here, the first situation applied and the writ was not a detainer.

Second, it is our opinion that the IAD does not require a final disposition of the case before the prisoner is returned to the federal authorities pursuant to Article V(e) of the IAD, which section requires the prisoner to be returned “[a]t the earliest practicable time.” Article IV(e), supra, requires a “trial,” not a final disposition. The legislative history of the Interstate Agreement on Detainers convinces us that our opinion is correct, which history is set out in Mauro, supra. The IAD was fashioned to secure speedy trials of prisoners in state and federal institutions against whom de-tainers had been filed by foreign jurisdictions. It was discovered that a vast number of the detainers which were filed prior to the act creating this agreement were frivolous and vindictive, for the sole purpose of preventing early release, parole or privileges, and that a large number of these detainers were withdrawn near or at the end of the sentence when notification of pending release was sent to the parties requesting the detainer. In this context, we do not feel that a single detainer is all that is available when a hung jury results. We note that Mauro was not factually parallel, as in that case there was no trial at all when the prisoner was first presented before court as a result of the writ of habeas corpus ad prosequendum. In this case, of course, we had a trial and a resulting hung jury.

Once we establish that the purpose of the IAD was to insure a speedy trial and to prevent punitive detainers, we examine the situation here. Even should we feel that the writ of habeas corpus ad prosequendum was a detainer, the appellant herein was granted a speedy trial. Indeed it would have been even speedier had he not escaped. To hold that Article IV(e) would require retaining custody of the prisoner until final disposition would fly in the face of the clear language of the Agreement, which requires only trial and not disposition. For example, suppose the prisoner is convicted and returned to the original state of incarceration. Notice of appeal is filed and the conviction is reversed and remanded for a new trial. To hold that a new detainer could not be filed to return him for the second trial would be obvious error. Similarly, a hung jury would result in acquittal of the prisoner if he had been returned to the original institution.

For the reasons above stated, it is the holding of this Court that the Fayette Circuit Court did have jurisdiction over this case.

The second assigned error was the failure of the lower court to suppress the evidence seized in a warrantless search of a vehicle belonging to the appellant. The evidence showed that the officers obtained a search warrant for certain premises which were rented by appellant’s brother, the officers having been informed that heroin was being sold from the premises and from a Chrysler automobile. The search warrant did not describe the automobile but did describe, in sufficient detail, the premises which were to be searched. After a search of these premises and of the appellant, who was found therein, produced no heroin, the brother arrived. He was searched and heroin found on his person. The vehicle being driven by the brother at the time of his arrival contained another “considerable quantity of heroin.” The keys to the appellant’s car were also found, this car being a Chrysler, and this vehicle was searched, without a search warrant or consent from the appellant. Ninety-eight packets of heroin were found in the locked glove compartment of the appellant’s car. Appellant urges that there was neither probable cause nor exigent circumstances to justify the search. We do not agree that probable cause was absent. In light of the above evidence, it is our opinion that there was sufficient probable cause for a proper search, but we can find no exigent circumstances. There were six officers at the scene, the two men present were under arrest, the officers had the keys to the car in their possession and wreckers were called to tow the vehicles. The law in this state is clearly enunciated in Middleton v. Commonwealth, Ky., 502 S.W.2d 517, 519 (1973), in which the court stated as follows:

In Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971), the court held that even though there may be probable cause for the search of an automobile without a valid search warrant such search would be unconstitutional unless exigent circumstances made it impractical to obtain a warrant.

In this case it is manifestly clear that it was not impractical in any sense of the word for the officers to obtain a warrant, and in fact it was admitted by one of them that they “probably could have” obtained a warrant. This admission alone would not void the search but under the circumstances here it is obvious that a warrant should have been obtained.

The other issue presented by the appellant having been rendered moot by our holding herein, we shall not consider it.

Being unable to find any exigent circumstances to justify the warrantless search of the vehicle herein, the evidence seized therefrom should have been suppressed at trial. Since the conviction herein could not have been obtained without it, the judgment of the lower court is reversed.

All concur.


author: SEILER, Judge.

text:
    STATE ex rel. GREENE COUNTY, Missouri, Plaintiff-Appellant, and Clay County, Missouri, Plaintiff-Intervenor, v. James R. SPRADLING and Department of Revenue, Defendants-Respondents.
    No. 60444.
    Supreme Court of Missouri, En Banc.
    Dec. 18, 1978.
    Theodore L. Johnson, III, Greene County Counselor, Springfield, for plaintiff-appellant.
    John D. Ashcroft, Atty. Gen., Stanley H. Robinson, Asst. Atty. Gen., Jefferson City, for defendants-respondents.
   SEILER, Judge.

This appeal involves the construction of sections 137.330 and 53.071, RSMo Supp. 1975, which became effective September 1, 1970 and were in effect at the times pertinent herein, as to what amount should be paid by the state (or reimbursed to the county by the state) of the costs and expenses of making the county assessment and in the preparation of abstracts of assessment, lists and tax bills.

The pertinent portions of the two statutes in question provide as follows:

“137.330. State to share cost of assessment. One-half of all the costs and expenses of making the assessment and in the preparation of abstracts of assessment lists and tax bills shall be paid by the state, but in calculating these costs and expenses no amount shall be allowed for the salaries of the assessors, his clerks, and his deputies in excess of that provided in section 53.071, RSMo. When the amount due has been determined by the state director of revenue, he shall pay such claim out of funds appropriated for that purpose.”
“53.071. Compensation — fees, disposition of (second, third, and fourth class counties). 1. For the performance of their existing statutory duties and for the additional duties set forth in sections 53.081 and 53.091, each county assessor, except in counties of the first class, shall receive an annual salary for his services and shall, subject to the approval of the county court, appoint the additional clerks and deputies that he deems necessary for the prompt and proper discharge of the duties of his office. A portion of each county assessor’s salary and of the salaries for his clerks and deputies shall be paid by the state in an amount equal to the sum paid by the state for assessor’s, clerks’, and deputies’ compensation in that county in the year 1969, and the remainder of the assessor’s salary and the salaries for his clerks and deputies shall be paid by his county . . . ”

The dispute is over what Greene County is entitled to for 1974 and 1975 and what Clay County is entitled to for 1975.

For 1974, a year in which it was still a second class county, Greene County contends it was entitled to one-half of what the salaries of the assessor and his deputies and clerks were for 1969, plus one-half of the other costs and expenses of assessment, such as preparation of plats, cost of binders, plat books, assessment blanks, mileage, postage, business machine rental, printouts, etc. The defendant takes the position that under § 53.071, all the state is obligated to reimburse is an amount equal to what it paid Greene County for the assessor’s, clerks’ and deputies’ compensation in 1969.

For 1975, the year in which it became a first class county, Greene County again contends it was entitled to one half of what the salaries were in 1969, plus one-half of the other costs and expenses of assessment for 1975. The defendants agree the state owes one-half of the other expenses, but as to salaries contends that all it is obligated to pay is an amount equal to what it paid Greene County for salary compensation in 1969.

Clay County, for which only 1975, the year in which it became a first class county, is involved, makes substantially the same contentions as to reimbursement as does Greene County and the defendants make the same response. Clay County prayed relief for 1975 by asking for an amount equal to one-half the salaries for 1969 and one-half the other expenses incurred in 1975 in making the assessments. Included in this was a pro rata share of the salaries paid the employees of the county data processing department, a separate department, based on the amount of time used for assessor’s work.

The trial court concluded that in all instances the amount of reimbursement is limited by § 53.071 to an amount equal to what the counties received in 1969 and denied the prayers of relief of the plaintiff and intervenor.

As developed by the briefs and oral argument, the real issue is how much is to be reimbursed by the state for the salaries of the assessor, his clerks, and deputies. Plaintiff argues it is absurd and unreason-able to believe the legislature intended that it should be reimbursed for salaries only in an amount equal to whatever the state paid the particular counties in 1969 when, it contends, the policy of the state for over one hundred years has been to reimburse the counties for approximately one-half the cost of assessing property; that what the statutes really mean is that the county is to be reimbursed for one-half of the salary levels for 1969, with first class counties to receive, in addition, one-half the other costs and expenses of making the assessment and preparation of the lists and tax bills. Plaintiff and intervenor argue further that had they been first class counties in 1969, under the law as it then stood with respect to first class counties they would have received one-half of all the costs and expenses of the assessor in making the assessment, § 137.-330, RSMo 1969, and thus “the defendants are willing to reimburse Greene County only one-fifth of the amount to which it would have been entitled had Greene County been a first class county in 1969”, a result which they say the legislature never intended.

The statutes seem clear enough. Prior to the change in § 137.330 which became effective September 1,1970, there was no limitation in § 137.330, RSMo 1969, by reference to § 53.071. In fact, there was no § 53.071 in existence. The prior statute, § 137.330, RSMo 1969, called for an outright payment by the state to a first class county of one-half of “all the costs and expenses of the assessor in making the assessment and in the preparation of abstracts of assessment lists and tax bills . . .’’At the same time, in second class counties, another statute, § 53.110, RSMo 1969, provided for a system of fees for services of the county assessor, one-half to be paid by the county and one-half to be paid by the state and deposited in the county treasury. Then, by S.B. 1, Laws of Mo.1969, 3rd Ex.Sess., at 78, the former § 137.330 was repealed and a new § 137.330 enacted in lieu thereof, worded as set out at the beginning of this opinion. The same S.B. 1 also repealed § 53.110 RSMo 1969, and enacted, as a new section, § 53.071, also set out earlier herein.

We fail to see where the fact that prior to the amendment becoming effective September 1, 1970, the law had been that first class counties were entitled to reimbursement or payment by the state of one-half of the assessor’s costs and expenses could work any change or increase in what the terms of the new § 137.330 called for. If the legislature decided to limit reimbursement for salaries to an amount equal to whatever amount was paid in 1969, it could do so. Nor is there any merit in plaintiff’s argument that had Greene County been a first class county in 1969 and hence entitled at that time to have the state pay one-half the costs, it means that for 1974 and 1975 the state should be required to pay more in salaries than an amount equal to what it did pay Greene County in 1969. In State ex rel. Jackson County v. Spradling, 522 S.W.2d 788 (Mo. banc 1975), the court held that first class charter counties are subject to the limitation imposed by § 53.071 that salary reimbursement is limited to whatever the reimbursement was in the year 1969. The same would be true of first class counties not having a charter, such as Greene and Clay.

The plaintiff and intervenor point to the statement in that case that “It has been the settled policy of this state for more than a century to pay approximately one-half of the cost of assessing property in all of the counties and the City of St. Louis”, id. at 791, in support of their contention that the proper interpretation of § 53.071 is that the state is to pay an amount equal to one-half the actual compensation for assessor, clerks and deputies in the year 1969. The opinion does refer to the long-standing policy of the state in the regard stated, but it goes on to conclude that the 1969 amendments contained in S.B. 1 modified that policy by placing a ceiling on the amount of salary expense the state will share. Id. at 792. The opinion recognizes that there has been a change in policy and offers no comfort to one seeking to apply the former policy to a later time — here to the years 1974 and 1975.

Appellants seem to be arguing that the legislature could not have intended to limit reimbursement to an amount equal to whatever was paid in 1969 because to do so is absurd and unreasonable and therefore not the meaning to be given § 53.071. But as State ex rel. Jackson County points out, this limitation represents “a decision [by the legislature] not to participate in reimbursement for any future salary increases”, it being well known “that as a result of inflation in our economy many salaries are frequently increased.” Id. at 792. Plaintiffs can call this legislative intent absurd and unreasonable, but this does not make it so and we find that it is not.

That the legislature is not insensitive to the needs of the counties is seen by the change made in 1977, by S.B. 277, Laws of Mo.1977, at 167, whereby the legislature repealed § 53.071 and § 137.330, RSMo Supp.1975, and added § 137.710, the salient portion of which reads as follows:

“State to pay part of assessors’, deputies’, clerks’ and other employees’ salaries— amount, how determined. 1. A portion of the salary for the prior year of the assessor, deputies, clerks, officers and other employees of all counties and cities not within a county charged with duties imposed by law upon assessors, their clerks, deputies, officers and employees shall be paid by the state. The state shall pay one-half of such salaries for the year 1976 and each year thereafter shall pay the amount paid for the previous year plus not more than a five percent increase over that amount, but the amount paid by the state shall in no year exceed one-half of the actual salaries.”

The base year now becomes 1976 instead of 1969 and future reimbursement will consist of one-half of the actual salaries paid in 1976, plus a five percent growth factor.

Appellants raise another point: that the reimbursement or payment by the state is to include the expenses of the services of the county counselor with respect to appeals from assessments, whether to the board of equalization, the state tax commission, or the courts. The trial court held not, although agreeing with appellants as to expenses of the county counselor which are part of the cost and expenses of making the assessment and in the preparation of abstracts of assessment lists and tax bills. We agree with the trial court. The county assessor prepares the tax bills. The board of equalization, state tax commission, and the courts review the tax bills, but their deliberations are not part of the preparation of the tax bills. The tax bill is the piece of paper evidencing the tax liability. Troost Ave. Cemetery Co. v. Kansas City, 348 Mo. 561, 154 S.W.2d 90, 100 (banc 1941). The bill is prepared by the assessor before the expenses for which appellants claim a right to reimbursement have been incurred. Such expenses, subsequent to the assessment and issuance of the tax bills, are not within the scope of the reimbursement provided for by § 137.330, RSMo Supp.1975.

Judgment affirmed.

MORGAN, C. J., and BARDGETT, FINCH, DONNELLY and RENDLEN, JJ., concur.

SIMEONE, J., not participating because not a member of the court when cause was submitted.

      . This case arose as a declaratory judgment action, filed by Greene County, in which Clay County was allowed to intervene. The case was tried under a stipulation of facts. The trial court found for the defendants and plaintiff and intervenor appealed to this court, under the “construction of the revenue laws of this state” clause of our jurisdiction, Mo.Const. art. V, § 3.

      . Section 137.330, however, applies only to counties within the first class. § 137.325, RSMo 1969.

      . The trial court found that the amounts paid the data processing department in Clay County, which was a separate department under the control of the county court, were reimbursable when directly related to costs and expenses of making the assessment and the lists and tax bills, but where the services performed were previously performed by the assessor, his clerks and deputies, the costs were salaries subject to the 1969 salary reimbursement. No claim is made in the briefs that the court erred in this finding and so we do not address it further.


author: CLEMENS, Judge.

text:
    STATE of Missouri ex rel. John W. REID, II, Prosecuting Attorney, Madison County, Missouri, Respondent, v. Michael KEMP, Defendant, Lindell Kemp and Annette Kemp, Intervenors-Appellants.
    No. 38690.
    Missouri Court of Appeals, St. Louis District, Division Three.
    Sept. 26, 1978.
    Motion to Transfer to Supreme Court Denied Oct. 23, 1978.
    Application to Transfer Denied Nov. 6, 1978.

      Daniel P. Reardon, Jr., St. Louis, for in-tervenors-appellants.
    John W. Reid, II, Pros. Attorney of Madison County, Fredericktown, for respondent.
   CLEMENS, Judge.

Appeal by intervenors Lindell and Annette Kemp from the trial court’s judgment confiscating their automobile to the state because it had been used illegally by inter-venors’ son to transport a controlled substance. Intervenors do not dispute the state’s evidence: Their son, defendant Michael Kemp, was arrested for driving while intoxicated; as he exited his parents’ car he tried but failed to destroy a packet of marijuana.

The state brought this proceeding under § 195.145, VAMR, authorizing confiscation of such an automobile. The issue here arises from intervenors’ pleaded contention they were ignorant of their son’s illegal use of their automobile.

Intervenors rely on the portion of the statute declaring: “The court shall render such judgment as to it seems meet and just, and if it appears that any person who has made claim to the vehicle, vessel or aircraft is the owner thereof and was ignorant of the illegal use thereof and the illegal use was without his connivance or consent, express or implied, . . the court shall relieve the property from forfeiture and restore it to the rightful owner, . . . .” They pleaded “That Intervenor Defendants further state that they were ignorant of any alleged illegal use of said 1972 Volkswagen automobile and that any alleged illegal use of said automobile was without their connivance or consent, expressed or implied.”

At the close of the state’s evidence inter-venors asked for judgment on the ground there was “no evidence of any illegal activity on their part in the use of that automobile.” The trial court took the case under advisement, frankly commenting, “I haven’t read that statute.” Later, the court entered judgment ordering the confiscation.

The transcript shows that at trial time defense counsel — and possibly the court— was unaware of another statute, § 195.180, VAMR, casting on intervenors the burden of proving an exemption, such as ignorance of their son’s illegal use of their automobile. They so pleaded, but offered no evidence thereof, believing incorrectly it was the state’s obligation to refute their claimed ignorance.

It is axiomatic that forfeitures are not favorites of the law and should be enforced only when within both the letter and spirit of the law. See United States v. Ford 2 Ton Truck, 95 F.Supp. 214 (W.Dist.Mo., 1951), relying on United States v. One Ford Coach, 307 U.S. 219, 236, 59 S.Ct. 861, 83 L.Ed. 1249. Courts should approach forfeitures with caution in dealing with property of innocent persons, as intervenors pleaded they were.

Here, § 195.145, VAMR, authorizes a trial court to order forfeiture only when that seems “meet and just.” That condition accords with the principle disfavoring forfeiture. This brings us to the issue of our authority to remand the cause for further evidence.

Where a record on appeal shows an aggrieved party has misconceived his rights, an appellate court has discretion to remand the case for further proceedings. Wright v. Brown, 177 S.W.2d 506[4] (Mo.1944); Wile v. Donovan, 538 S.W.2d 906[3] (Mo.App.1976). Exercising our discretion to remand a case when a defendant has not fully developed a viable defense warrants remand for a new trial “to avoid closing the door to substantial justice.” Hetzler v. Millard, 348 Mo. 198, 153 S.W.2d 355[2-4] (1941).

Here, the harsh remedy of forfeiture was applied against intervenors because they relied on their pleaded defense of ignorance, misconceiving their burden of going forward with evidence as cast upon them by § 195.180, VAMR.

The quoted statute requires the proceedings reach a just result. We believe justice requires us to remand the cause to the trial court to reopen the case to give intervenors leave to present evidence on their pleaded assertion of ignorance, and leave to the state to refute that evidence.

Reversed and remanded.

REINHARD, P. J., and GUNN, J,, concur.


author: DON W. KENNEDY, Special Judge.

text:
    Larry James DYKES, Movant-Appellant, v. STATE of Missouri, Respondent.
    No. 10757.
    Missouri Court of Appeals, Springfield District.
    Oct. 17, 1978.
    Motion for Rehearing or Transfer Denied Dec. 6, 1978.

      Robert W. Richart, Edward James Her-shewe, Joplin, for movant-appellant.
    John D. Ashcroft, Atty. Gen., Daniel F. Lyman, Asst. Atty. Gen., Jefferson City, for respondent.
    Before FLANIGAN, P. J., STONE and TITUS, JJ., and MOORE, KENNEDY, PYLE and CAMPBELL, Special Judges.
   DON W. KENNEDY, Special Judge.

This is an appeal from the trial court’s order overruling defendant (as we shall designate movant) Larry James Dykes’ motion under Rule 27.26, V.A.M.R. to vacate, set aside or correct sentences in two cases, one of rape and the other of robbery.

On September 27, 1976, defendant Dykes pleaded guilty in the Circuit Court of Jasper County to separate charges of rape and robbery. He was sentenced to 25 years’ imprisonment in each case, to be served concurrently. He later filed in the same court this motion under Rule 27.26, V.A. M.R. to vacate the sentences. The trial court declined to appoint counsel for defendant and overruled his motion without an evidentiary hearing. It is from this order that the defendant has appealed to this court.

If the allegations of the motion are refuted by the record of the guilty plea and sentencing proceedings, as the trial court found, then the action of the trial court is correct and should be affirmed. Smith v. State, 513 S.W.2d 407 (Mo. banc 1974).

The defendant as grounds for his motion says therein that he was told by his counsel, before his guilty plea was entered, that he would receive a 5-year sentence in the robbery case and that the rape case would be dismissed — that if he did not agree to this arrangement he would get 25 years upon trial.

This allegation is thoroughly refuted by the transcript of the guilty plea and sentencing proceedings. The rape case was taken up first. At that time the assistant prosecuting attorney and defendant’s counsel, the public defender, advised the court that they had agreed upon a 25-year sentence in the rape case, with a like sentence in the robbery case to be served concurrently. The court asked the defendant if he had been advised of this bargain before he entered his guilty plea. He answered that he had. When the court granted allocution, the defendant said: “Well, 25 years is a long time, I’ll admit that, and I am sorry about what happened, but that is not going to help either. I know I done wrong, and I’ve got to pay for it. I think that’s all I have to say.”

The court then sentenced the defendant to 25 years’ imprisonment by the Department of Corrections.

The robbery case was taken up immediately following the rape case. The prosecutor recommended a sentence of 25 years to run concurrently with the 25-year sentence in the rape case. The court asked the defendant: “This is a correct statement and what we just went over in the preceding case, is that not true?”

“Yes, sir, it is true,” the defendant answered.

Defendant was asked by the court if he had any legal reason why sentence ought not to be pronounced, and then if he had anything to say to the court before sentence was pronounced. To each question the defendant answered, “No, Sir.”

Two felonious assault cases and another robbery case against the defendant were dismissed by the State.

From the foregoing it is quite clear that the defendant was fully informed and was acting under no misunderstanding when he entered his guilty plea. Defendant has shown no right to relief on this point.

Next, defendant says his counsel had not given him effective assistance. At the sentencing proceeding he stated in answers written on a printed questionnaire that his counsel had done or omitted nothing of which he had any complaint. In his motion for relief under Rule 27.26, V.A.M.R., however, he complains of two omissions by his counsel.

Defendant says first that his counsel failed to interview an unnamed witness.

We pause here to recount the facts of the original crime gathered from the record of the sentencing proceeding: The defendant was alleged to have picked up two girls in Springfield who wanted defendant to drive them to Joplin. Defendant drove on a country road, forced the girls at knife point to undress, raped one of them, took the purse of the other one and drove off leaving them by the roadside.

Now in his motion defendant says the girls had a male companion who was also an occupant of his car, and that he discharged all three of them from his car because of an altercation with the male companion. It is this unnamed male who the defendant says should have been interviewed by his attorney. (We can find no reference to any male companion of the girls in the transcript of the guilty plea and sentencing proceeding.)

This complaint of the defendant has a hollow sound in view of his admissions at the sentencing proceeding. He admitted not only the ultimate facts of rape and robbery as charged in the informations, but also admitted the underlying evidentiary facts. In response to the court’s questions, he admitted he had had intercourse with “the girl” against her will, by threatening her with a knife which he held in his hand, and that she afterward had several knife wounds. He likewise acknowledged the accuracy of an account of the robbery which was that he threatened to kill the raped girl and her companion, who gave him her purse as an inducement to let them go.

In view of these admissions, going far beyond a formal guilty plea to a formal accusation, he cannot now be heard to say that some witness might have given an exculpatory version contrary to the defendant’s own. Haliburton v. State, 546 S.W.2d 771, 773 (Mo.App.1977).

Then defendant says in his motion that his attorney was derelict in not requesting a hearing on defendant’s sanity, as authorized by § 552.020(6), RSMo 1969. Defendant had entered a plea of “not guilty by reason of mental disease or defect,” and the court had ordered a mental examination. Defendant was examined at State Hospital No. 1 at Fulton over a 22-day period. The finding of such examination was that the defendant was suffering from no mental disease or defect.

At that point, nothing else appearing to suggest to defendant’s attorney that defendant had a mental disease or defect excluding criminal responsibility — and no such suggestion appears anywhere in this record, —defendant’s attorney was under no responsibility to pursue it further. An attorney does not have to chase down every will-o’-the-wisp. He is to use an informed and trained judgment to select viable defense theories and to discard fanciful ones.

In sum, we find no basis for defendant’s claim that he was denied effective assistance of counsel.

Defendant’s brief in this court argues that he did not voluntarily and knowingly waive his constitutional rights, including the privilege against self-incrimination, the right to trial by jury, and the right to confront one’s accusers. Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969). Defendant’s motion, however, upon which the trial court ruled, contained no such allegation. We therefore do not consider that question. Coleman v. State, 542 S.W.2d 53, 54-55 (Mo.App.1976). We note, however, that his answers to the written questionnaire, made with assistance of counsel and adopted by his statement to the court, show an informed waiver of these rights.

It appearing that the allegations of defendant’s motion under Rule 27.26, V.A. M.R. are refuted by the record of the guilty plea and sentencing proceedings, as found by the trial court, the order overruling said motion is hereby affirmed.

All concur.