author: TODD, Judge.

text:
    W. W. BILLINGTON d/b/a Billington and Company, Plaintiff-Appellee-Appellant, v. P. K. CROWDER and wife, Paula Davis Crowder and Bessie T. Davis, Defendants-Appellants.
    Court of Appeals of Tennessee, Middle Section.
    Original Opinion Feb. 25, 1977.
    Certiorari Denied May 31, 1977.
    Abridged Opinion June 29, 1977.

      McWilliams, Berry & Ogelsby, Franklin, for plaintiff-appellee-appellant.
    Harwell, Bottoms & Plant, Lawrence-burg, for defendants-appellants.
   OPINION

TODD, Judge.

The Chancellor awarded plaintiff a judgment against all defendants for $20,000.00 damages for alleged breach of real estate brokerage contract. Defendants have appealed from the award of judgment to the plaintiff, and plaintiff has appealed from the amount awarded.

The complaint alleges that plaintiff had an oral, nonexclusive listing of defendant’s farm; that plaintiff produced a buyer ready, willing and able to buy on defendant’s terms; that defendants refused to sell to said buyer and thereby deprived plaintiff of the commission which he would have been able to collect from the buyer if plaintiffs had sold to him. Plaintiff does not claim that defendants agreed to pay him a fee, but admits that, at all times, it was understood that all expenses, including broker’s commission, were to be paid by the purchaser in addition to the announced sale price.

The answer denies any “listing agreement” or other contract with plaintiff, but admits that plaintiff and other real estate brokers were informed that the subject farm could be purchased on specific terms. The answer denies that plaintiff ever presented an offer on the terms stated by defendants.

The memorandum opinion of the Chancellor contains the following pertinent findings of fact:

“In the fall of 1972 plaintiff W. W. Billington had information that they (defendants) were interested in selling the farm. Plaintiff called Mr. P. K. Crowder and was informed by him that the farm was listed for sale and was available to any agent. .
“Plaintiff contacted a Mr. Stewart Campbell of Williamson County. Mr. Campbell made a counter proposal which was not accepted. Mr. Campbell then told plaintiff to meet whatever conditions that were necessary. The plaintiff then called Mr. Crowder and Mr. Crowder informed him that they had decided not to sell.
“On or about the 18th of April 1974, plaintiff again called Mr. P. K. Crowder and told him that he had heard that the property was back on the market. Mr. Crowder informed him that it was. The plaintiff then traveled to the Crowder’s home in Lawrence County where Mr. Crowder gave him the terms of the sale. They were as follows: The 392.42 acres was for sale for $400,000.00 net, meaning that they would not pay any commission and further they would not furnish title insurance. They were to be paid twenty nine per cent down at closing with a balance in ten years at eight per cent interest. The plaintiff was also informed that the lease on the farm did not expire until January 1, 1975.
“A new contract was drawn which agreed to all the conditions imposed by the sellers. This contract was taken to the home of Mr. Crowder in Lawrence County by plaintiff on May 1, 1975 and the contract was gone over with Mr. Crowder. No objections were raised at that time to the contract.
“The contract was left with Crowder and some two weeks after that the plaintiff called him and was told that he decided not to sell.
Plaintiff then contacted his attorney who corresponded with Mr. Harwell, Crowder’s attorney and plaintiff’s attorneys were advised that one of the problems that might be standing in the way of the consummation of the sale was the estate tax clearance of Mr. Leroy Davis’ estate.
“Plaintiff then contacted Mr. Stewart Campbell and determined that he would re-execute a contract which would contain a further provision that the sale would not be closed until after the estate tax clearance on the Davis estate was received and further, that they would lease the property upon the same terms of rental that was in effect at that time.
“This proposal was likewise declined by defendants and shortly thereafter plaintiff filed this suit.
“On 28 April 1975, a contract for the sale of the real estate in question was entered into between Hillsboro Enterprises Inc., and the defendants for the sale of the property for $400,000.00, twenty nine per cent down with interest at seven and one-half per annum, balance payable in ten years. This sale was handled by Whitfield Realty Company in Franklin, and it should be noted that Mr. Stewart Campbell was one of the principal stock holders of Hillsboro Enterprises Inc., and that he, individually, was contracted by the broker from Whitfield Realty Co.
“The terms and conditions under which the real estate was sold were the same as had been offered earlier by Mr. Campbell except it was $25,000.00 cash earnest money instead of $40,000.00 in municipal bonds.”

There is no serious controversy as to the correctness of the foregoing findings which are adopted by this Court. A few minor additional facts will be mentioned in the discussion of the contentions of the parties.

The first issue for resolution is whether, under the facts stated above, the plaintiff actually had a contractual relationship with defendants. (The agency of Mr. Crowder to speak for the other defendants is stipulated.)

Plaintiff first insists that a broker is one who is engaged for others, on a commission, in negotiating contracts relative to property of which he has no concern. Krasner v. Moore, 32 Tenn.App. 306, 222 S.W.2d 623 (1949).

However, a broker may act on behalf of the seller, the buyer, or both. In 12 C.J.S. Brokers § 14, pp. 36 et seq. it is stated that the identity of the principal of a broker is generally a question of fact. Where the facts are undisputed, however, the determination is more legal than factual.

In Erwin Nat. Bank v. Riddle, 18 Tenn.App. 561, 79 S.W.2d 1032 (1934), it was held that where the compensation and expenses of a loan broker were paid by the borrower, the broker was the agent of the borrower.

In Hamilton v. Galbraith, 15 Tenn.App. 158 (1932), it was held that, where the owner of a farm employed a broker and he (owner) alone paid the commission, the broker was the agent of the seller alone and not that of the purchaser, even though the purchaser first consulted the broker about buying the farm.

Even though the identity of the party who is to pay the broker may not be conclusive of the identity of his principal, it is nevertheless a strong circumstance. In the present case, there is no evidence to show that the defendants specifically and expressly employed plaintiff as their broker. On the contrary, all of the evidence indicates that defendants merely stated orally that their farm was for sale on specified terms to Whomsoever would purchase on such terms, through an agent or otherwise.

There is considerable difference in the legal effect of saying to a broker:

(1) You are authorized to try to sell my farm; and

(2) I will sell my farm on these terms to anyone. If you produce such a buyer, I will sell to him; but you will have to get your commission from him.

In the first instance, there is an informal employment as agent with implied agreement to pay a commission for producing a buyer, which may be enforceable, though oral. See Lowe v. Wright, 40 Tenn.App. 525, 292 S.W.2d 413 (1956) and authorities cited therein.

In the second instance, there is no agreement or expectation that the owner will pay any commission. This is merely an oral offer to sell land which is unenforceable. T.C.A. § 23-201(4).

Plaintiff insists that the obligation to pay a sales commission arises from acceptance of services with knowledge or reasonable ground to believe that such services are rendered with expectation of payment therefor. In the present case, such expectation is negated by the admitted understanding that plaintiff was to receive nothing from defendants. Moreover, the services were not accepted. Defendants chose to accept an offer presented by another broker who was paid by his principal, the buyer.

In 12 C.J.S. Brokers § 61a, p. 139, is found the following text:

“To constitute an implied contract it is necessary and sufficient that the person from whom compensation is claimed consent to, or accept, the broker’s services with knowledge or reasonable ground to believe that they are being rendered in his behalf, by the broker as such, with an expectation of receiving payment therefor. A contract of employment of a broker to sell realty cannot be implied after a flat refusal by the owner to pay a commission in absence of other acts of the owner which may be construed as an employment. A mere statement of the owner of realty to a broker that he desires to sell certain of his property is not sufficient as basis of a claim by the broker for compensation for procuring a purchaser.”

Plaintiff cites authority for the liability of the owner to the broker for damages for wrongful refusal to sell even though the brokerage contract provided that the broker was to look to the seller for his commission. Such liability applies where there was an actual contract of employment. In the present case there was no express contract of employment, and the proffered terms of “no commission to be paid” prevent reliance upon an implied contract to pay commissions.

Plaintiff cites a number of Tennessee authorities in support of his insistence that he is entitled to commission from defendants.

In Hammond v. Hood, 31 Tenn.App. 683, 221 S.W.2d 98 (1948), this Court recited a lengthy chain of circumstances and conversations which were held to constitute an implied employment of the broker, and said:

“. . . where a broker has been employed to sell real estate . . . he is entitled to his commission in case he produces a party . . . able, ready and willing to buy on the agreed terms.” p. 695, 221 S.W.2d p. 103.

In the cited case, it was stated:

“it appears that other brokers were likewise active in undertaking a sale.” Plaintiff urges that the foregoing renders the cited case in point with the present case; however, in the present case, there was the specific refusal to pay any commission, and the offer to sell on given terms was open to all comers with or without the participation of a broker.

Plaintiff cites Woodall v. Foster, 91 Tenn. 195, 18 S.W. 241 (1892). In that case, the Court found:

“On September 6, 1890, defendants employed plaintiffs to sell certain lots

Also, a principal ground for allowing a recovery was the failure of defendant to notify plaintiff to cease his efforts when defendant sold the property.

Plaintiff cites Cheatham v. Yarbrough, 90 Tenn. 77, 15 S.W. 1076 (1890). In that case, the Court found:

“Cheatham placed certain real estate in the hands of plaintiffs for sale, agreeing to pay them a certain commission . . ”

The distinction is obvious.

Plaintiff cites Parker v. Walker, 86 Tenn. 566, 8 S.W. 391 (1888), wherein the Court states:

“. . . plaintiffs approached the defendant and offered their services to sell a certain lot . The defendant . agreed to pay the usual commission ... to sell same.”

In short, plaintiff cites no authority, and none has been found, where, without an express contract, an employment and obligation to pay commissions is implied in spite of a specific disavowal of obligation to pay commissions.

It appears to this Court that the disavowal of liability for commissions relieves the seller of any implied liability therefor; and, in such a case, any action for breach of contract should be based upon an express, rather than an implied contract.

It should be noted that the Chancellor did not find that plaintiff had a contract with defendants. His conclusion was based upon the premise that defendants allowed plaintiff to seek a buyer and then unreasonably refused to deal with the buyer, which was a ' finding of implied, not express, contract.

Plaintiff devotes considerable argument to the rights of an employed broker where the offer obtained by him is not identical with the terms of the listing. It is true that the offer presented by plaintiff was not identical with the terms demanded by defendant, and this might represent an additional, effective defense in the present action. However, the other grounds heretofore mentioned are adequate grounds for the results reached.

Plaintiff relies upon the presumption of correctness created by § 27-303 T.C.A. However, the result reached by this Court is not based upon a finding of facts different from that of the Chancellor, but upon a different conception of the legal effect of the admitted facts.

Where there is no conflict in the evidence as to any material fact, the questions on appeal are entirely of law. Robinson v. Kemmons Wilson Realty Co., 41 Tenn.App. 297, 293 S.W.2d 574 (1956); Continental Ins. Co. v. Cooper, 58 Tenn.App. 316, 430 S.W.2d 661 (1968).

The statutory presumption of correctness relates to findings of fact and not conclusions of law.

For the same reason, the arguments of plaintiff as to credibility of witnesses are not determinative.

Plaintiffs rely upon the fact that the ultimate purchaser was a corporation which was solely owned by Mr. Stewart Campbell, the prospect produced by plaintiff. This fact would be a circumstance of fraud or sharp dealing if other necessary circumstances were shown, such as malice or ill will of defendants toward plaintiff such as to suggest a motive to defraud plaintiff of a fee, or a conspiracy between Mr. Campbell and defendants to defraud plaintiff, or a monetary advantage gained by plaintiffs by avoidance of payment of commission or sale for a higher price without broker’s commission. No such motive is even suggested in the evidence. In fact, the sale which defendants ultimately made to a buyer who paid commission to another broker was somewhat less advantageous to defendants than the sale offered by plaintiff’s prospect.

Lawsuits by brokers for commissions based upon oral contracts or implied contracts are numerous and usually present difficult questions for the courts. Much difficulty and litigation could be avoided by legislation adding to the Statute of Frauds all contracts with brokers relating to the sale of realty, thereby requiring such contracts to be in writing.

Real estate brokers are a necessary and beneficial part of a business community. They succeed and benefit the community in proportion to their industry, ingenuity, aggressiveness and persistence. However, the imposition of their services upon unwilling recipients and attempts to create contractual relationships and resultant liability for commissions should be viewed with some degree of strictness to prevent unwary members of the public from being victimized by the aggressiveness of the brokers.

A real estate owner who orally expresses a mere willingness to sell his property on certain terms does not obligate himself to sell to the first buyer produced by a volunteer broker.

For the reasons stated, the decree of the Chancellor is reversed, and the suit is dismissed. All costs including costs of this appeal, are taxed against plaintiff.

Reversed and Dismissed.

The original opinion has been abridged for publication.

SHRIVER, P. J., and DROWOTA, J., concur.


source: Caselaw Access Project

author: SHRIVER, Presiding Judge.

license: Public Domain

text:
    SMALL WORLD, INC., and McClure’s Stores, Incorporated, Plaintiffs-Appellants, v. INDUSTRIAL DEVELOPMENT BOARD OF the CITY OF TULLAHOMA, Tennessee, et al., Defendants-Appellees.
    Court of Appeals of Tennessee, Middle Section.
    Dec. 3, 1976.
    Certiorari Denied by Supreme Court March 7, 1977.
    Thomas A. Wiseman, Jr., Chambers & Wiseman, Nashville, for plaintiffs-appellants.
    James H. Henry, Henry & McCord, Tulla-homa, for defendants-appellees.
   OPINION

The Case

SHRIVER, Presiding Judge.

This is an appeal by the plaintiffs below from a decree entered by Chancellor Earl H. Henley, sitting by designation in the Chancery Court of Coffee County, which decree sustained the motion of defendants for a summary judgment and dismissed the complaint.

The Pleadings and Proceedings Below

The bill of complaint, filed April 30,1976, recites that the plaintiff, Small World, Inc., is a Tennessee corporation located in the City of Tullahoma and is engaged in the retail business of selling ladies and chil-drens clothes and specialty items; that plaintiff, McClure’s Stores, Incorporated, is a Tennessee corporation with its principal offices in Nashville, Davidson County, Tennessee, and is engaged in the business of retail sales of general merchandise through a chain of retail stores located principally in Tennessee, one of which is in the City of Tullahoma.

It is averred that the defendant, Industrial Development Board of the City of Tulla-homa, Tennessee is a public, non-profit corporation organized and existing under the laws of Tennessee and is established pursuant to the provisions of Section 6-2801, et seq., T.C.A.

The bill of complaint names the individual members of the Industrial Development Board of Tullahoma as defendants but they were dismissed as unnecessary parties.

The complaint alleges, and the record shows that on December 30, 1975 the defendant, Industrial Development Board, hereinafter referred to as the Board, or defendant, entered into an Inducement Contract with Mercantile Stores Company, Inc., a Delaware corporation, copy of which contract is attached as Exhibit “A” to the bill, and that said contract states that said Company proposes to construct and equip a retail store and related facilities on a tract of land located in the City of Tullahoma. Pursuant to the contract, the Board has agreed that it will authorize the issuance of first mortgage revenue bonds in an amount sufficient to reimburse the Company for the entire cost of the project site and equipment, including financing costs, etc. The bonds to be issued would purportedly be authorized by the provisions of 6-201, et seq., T.C.A.

It is further averred that the aforesaid Company operates under the name “Cast-ner-Knott” which is a trade name of a chain of department stores located in various parts of Tennessee.

It is averred that a significant portion of the retail business of Castner-Knott consists of sales of ladies and childrens clothes and speciality items and of general merchandise; that the facility intended to be constructed with the proceeds of the bond issue is to be located in a shopping center to be known as Northgate Mall in Tullahoma; that the net effect of the proposed arrangement would be to very substantially reduce the cost to the retail establishment of its facilities and equipment, which such reductions are not available to the plaintiffs.

It is pointed out that the Inducement Contract above referred to states that, as a result of the proposed development, a total of one hundred and twenty new jobs would be created for the community but the Development Board has made no finding to the effect that this would constitute one hundred and twenty new jobs as opposed to one hundred and twenty jobs at the expense of those generally available in the retail trade in Tullahoma.

It is averred that the land securing the first mortgage revenue bonds to be issued by the Board would be owned by the Board and is, therefore, tax exempt; however, such property is not to be used exclusively for public purposes. It is further averred as follows:

“The undertaking by the Company with the Board to pay amounts in lieu of taxes does not say that the property itself is exempt from taxes. The plaintiffs would show to the Court that this violates Article II, Section 28 of the Tennessee Constitution.
The Plaintiffs would further show that the act of the Board in issuing said bonds would be violative of Article, I, Section 8 and Article XI, Section 8 of the Tennessee Constitution as creating unreasonable class benefits to one class of retailer in contravention of the rights and privileges of other retailers, including these plaintiffs.”
The prayers of the bill are:
(1) For process.

(2), (3), (4), (5), (6) and (7) pray for an injunction against the Board and its members, restraining them from issuing the proposed bonds as being in violation of Sections 6-2801 and 6-2802, T.C.A., and Article I, Section 8, Article II, Section 28, and Article XI, Section 8 of the Constitution of Tennessee.

(8) That in the event the bonds are issued, they be declared void as in violation of the statutes and Constitution of Tennessee.

(9) For general relief.

The answer of the defendants admits the statistical data set forth in the bill of complaint but denies the other material allegations of the bill wherein the proposed bond issue and the project involved herein are alleged to be in contravention of the statutes and Constitution of Tennessee.

The defendants filed their motion for summary judgment on May 26,1976, pursuant to Rule 56, Tennessee Rules of Civil Procedure, seeking dismissal of the bill of complaint on the ground that there is no genuine issue as to any material fact and that defendants are entitled to a judgment as a matter of law.

The foregoing motion is supported by the affidavit of Charles B. Alexander, Executive Director of the Industrial Development Board of Tullahoma, wherein he recites that in 1968 a study was made and prepared by the Tullahoma Regional Planning Commission with the assistance of Sanders and Associates Consulting City Planners of Atlanta, Georgia, a copy of which report is made Exhibit “A” to the affidavit.

It is stated in the affidavit that the report, Exhibit “A”, reflects that the Tullaho-ma merchants were losing three out of every four dollars primarily to major department stores in other cities and that there existed a critical need for Tullahoma to have its own major department store; that at a community meeting it was decided to form a committee to invite a large department store to open a branch in Tullahoma.

The affidavit goes into some detail about negotiations which eventually resulted in Mercentile Stores, Inc., (Castner-Knott) entering into negotiations which resulted in the proceedings which are the subject of this lawsuit.

Several letters and items of correspondence relating to the subject are included as exhibits. The Minutes of the meeting of the defendant Industrial Board are also exhibited.

An amendment to the answer of defendants was filed July 21, 1976, pursuant to leave granted by the Court, wherein it is averred that the proposed bonds will be paid solely from the revenues to be derived from the lease of the commercial facility to Mercantile Stores, Inc., and that in no sense can it be said that the credit of the City of Tullahoma is given in aid of Mercantile Stores, Inc., in the subject transaction, and that under no circumstances could a tax be levied by the City of Tullahoma to retire any part of the bonds.

In response to the motion for summary judgment, the plaintiffs assert that not only are serious questions of law presented by the pleadings in this cause, but that there are questions of fact upon which diverse proof will be presented and the counter-affidavit of Sam Goldberg is attached, setting forth some of the questions which are said to be in dispute.

The affidavit of Mr. Goldberg asserts that he has had over twenty years experience as a retail merchant in Tullahoma and disputes the allegation that three out of every four dollars is being lost by Tullaho-ma merchants to department stores in other cities. He denies the need for a department store in Tullahoma and states:

“This affiant, therefore, denies the basic premise and inducing reason for the bond issue.”

The cause came on to be heard before Chancellor Earl H. Henley on the 17th of June, 1976 upon the original complaint, motion for summary judgment filed by the defendants, together with supporting affidavits and a counter-affidavit filed by the plaintiffs, argument of counsel and the entire record, at the conclusion of which the Chancellor took the cause under advisement and, thereafter, on July 9, 1976, issued a Memorandum Opinion sustaining the motion in all respects. Said decree, entered on July 14, 1976, among other things, recites:

“IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED by the Court that the motion for summary judgment heretofore filed in this cause by the defendants be and the same is hereby sustained and plaintiffs’ suit is accordingly dismissed.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED by the Court that the defendant's be and they are hereby permitted to proceed with the issuance of the bonds as described in the pleadings.”

The costs are assessed to the plaintiffs and an appeal granted.

Chancellor’s Memo Opinion

The Chancellor, in a well reasoned and exhaustive opinion, describes the parties to the suit and sets out the pertinent parts of the bill of complaint and the answer thereto.

Among other things, the opinion recites, in response to the insistence of plaintiffs that the Inducement Contract involved here is in violation of Article I, Section 8 of the Constitution of Tennessee:

“Although there is no decision within our jurisprudence which has made a determination of the Industrial Bonds Act, under this provision of the Constitution; nevertheless, the Court is of the opinion that the use of such bonds does not violate the Constitution. The Court sees no property right of which plaintiffs are being deprived.”

He then addresses himself to the proposition insisted upon by plaintiffs that the issuance of the bonds in question is in violation of Article XI, Section 8 of the Constitution of Tennessee, and states:

“There is no reason to conclude that the defendants are in a different category than the plaintiffs in this cause. The plaintiffs have the same right to petition for industrial funds as the defendants had. In view of this, there can be no violation of the Constitution in this respect.
In reality, the Court finds no real issue that involves the Constitution which have not already been decided by either West v. Industrial Development Board, 206 Tenn. 154, 332 S.W.2d 201 or Industrial Development Board v. First U.S. Corporation, 219 Tenn. 156, 407 S.W.2d 457.”

The Chancellor then discusses the insistence by plaintiffs that the proposed project fails to fulfill the purpose of the Industrial Development Bond Act, Section 6-2802, T.C.A., et seq. He then quotes from that section and concludes:

“From the liberal construction that the Act demands and the liberal construction which has been given the Act by our previous decisions, this Court is of the opinion that the proposed project fulfills the purpose of the Industrial Bonds Act. Jobs are provided by retail establishments just as they are provided in the manufacturing process, and service is necessary to a community for its common good. It appears to this Court that the Legislature intended such result. It is true that there are conflicts of facts in this cause, but under the provisions of the Act, they are not facts which govern the issue. After reviewing the allegations and the documents which are filed, it is the opinion of the Court that the defendants have fully complied with the legislative act, and it is, therefore, held that the Summary Judgment should be sustained in all respects. The defendants shall be permitted to proceed with the bond issue.
Thus the 9th day of July, 1976.
/s/ Earl H. Henlev. Chancellor”
Assignment of Error
There is a single assignment, as follows:
“The learned Chancellor erred in sustaining the motion for summary judgment when there were material facts in dispute as evidenced by the pleadings, the affidavit and counter-affidavit.”

Our Conclusions

As is seen from the foregoing assignment, the single question for decision on this appeal is whether the pleadings, together with the affidavits and exhibits thereto, raise a material issue of fact for determination by the Court, or, whether, as the Chancellor concluded, the record here presents only a question of law for decision by the Court.

The overriding question presented by this lawsuit is simply whether or not a department store, such as Castner-Knott which is engaged in selling merchandise at retail, is covered by the Tennessee statutes, Chapter 28 of the Code, entitled “Industrial Development Corporations” and the definitions and provisions therein contained in the original act, as amended and set forth in the supplement to Volume 2A of the Code.

Section 6-2801, T.C.A., et seq., comprising the Industrial Development Corporation Act contains definitions which, in pertinent part provide that it applies to:

“. . . Any industry for the manufacturing, processing or assembling of any agricultural or manufactured products; any commercial enterprise in selling, providing, or handling any financial service or in storing, warehousing, distributing or selling any products of agriculture, mining, or industry
‘Enterprise’ shall mean the manufacturing, processing, assembling, commercial and service operations to be carried on with the facilities of a project.” [emphasis supplied]

Section 6-2802, T.C.A., entitled “Purposes of Chapter,” states that the intention of the Legislature by the passage of this chapter is to authorize:

“. . . the incorporation in the several municipalities in this State of public corporations ... to promote industry and develop trade by inducing manufacturing, industrial, governmental, educational and commercial enterprises to locate in or remain in the State and further the use of its agricultural products and natural resources.”
It is then provided:
“The statement of public policy set forth in Section 3 of Chapter 209 of the Public Acts of 1955 is hereby incorporated into and made a part of this chapter.”

In an examination of said 1955 Act, we find that it states that the declared purpose of the Act is to do that which the State welfare demands and the State public policy requires. It further states that it is to alleviate the problems of unemployment and to raise family income and to provide a means by which the citizens of the community may promote and develop industry in their area so as to obtain a balanced economic development highly essential to the welfare of the State, and to promote the development of commercial, industrial, agricultural and manufacturing enterprises by the several municipalities so as to be given local benefits peculiar to each and general benefits to the entire State.

When we consider the real question to be determined in this lawsuit, we do not find that the statements in the pleadings and the affidavit of Mr. Goldberg raise any material questions of fact for determination by the Court and we agree with the Chancellor that the genuine issue in this suit is one of law and the application of the law to the admitted facts.

In Holly v. City of Elizabethton, 193 Tenn. 46, 241 S.W.2d 1001, it was held that the issuance of revenue bonds for construction and lease of an industrial building was at least incidentally for a public purpose and was valid although it resulted in promotion of a private corporation.

In McConnell v. City of Lebanon, 203 Tenn. 498, 314 S.W.2d 12, among other things, the Court held that an act of the Legislature will be upheld if it can be justified upon any rational ground. It was further held that the Industrial Building Bond Act of 1955, as applied to the City which contracted with a foreign corporation for a lease with renewal privileges of a building to be constructed with the proceeds of bonds authorized by the Tennessee Industrial Development Commission and the Building Committee which, after a full hearing made necessary findings required by the Act and authorized the issuance and sale of $350,000.00 worth of bonds, did not violate the constitutional provisions of Article II, Section 29 of the Tennessee Constitution which prohibits a municipality from giving or lending its credit to a private corporation in view of the purpose of the Act to attract industry to the State and in view of the purpose to avoid the evils of low wages and unemployment.

In West v. Industrial Development Board of Nashville, 206 Tenn. 154, 332 S.W.2d 201, the Supreme Court of Tennessee held that the Industrial Development Act was not violative of the constitutional section requiring all property to be taxed since the property in question was held by the City for a public or corporation purpose within the exception, citing T.C.A. § 6-2801 to § 6-2820, and Article II, Section 28 of the Tennessee Constitution.

Referring to the Act in question, the Court held that the purpose of the Act of promoting industry and developing trade to provide against low wages and unemployment was a public purpose.

In Industrial Development Board of Sevier County v. First U.S. Corp., 219 Tenn. 156, at 163, 407 S.W.2d 457, at 460 (1966), the Court said:

“The Court finds the development of a planetarium and/or museum in Gatlin-burg is to promote industry and develop trade to provide against low wages and unemployment. This being the case, the purposes of the financing of the project should be held to be public in all respects.”

It was further held by the Court that since the development of the subject in question would be for a public purpose, the Act, T.C.A. Sec. 6-2811, under the authority of which the bonds would be issued, does not violate Article II, Section 28 of the Constitution.

While counsel for appellant does not specifically assign as error the Chancellor’s action in holding that the Inducement Contract involved here does not violate the Constitution of Tennessee, he so insists in his brief and argument, hence, we have responded to this insistence. We are of opinion that the arguments of counsel for plaintiffs to the effect that the action of the Industrial Board, as it applies to its stated purpose in the case under consideration, violates certain provisions of the Constitution of Tennessee, must be rejected and that the conclusions reached by the Chancellor in his Memorandum Opinion, herein-above referred to and quoted from, are correct and are concurred in by us.

We are also of the opinion, as above stated, that the Chancellor was correct in concluding that the primary and essential question involved here is one of law and that the pleadings and affidavits do not present material questions of fact for determination by the Court.

Essentially, the plaintiffs seek to have the Court “second guess” the Tullahoma Industrial Board as to the need and the importance of attracting another retail outlet in Tullahoma and to have us adopt the opinions expressed by the plaintiffs and by Mr. Goldberg who gave his affidavit in support of plaintiffs’ position, as facts in contradiction of the combined and corporate judgment and official acts of the Development Board as recorded in its resolution which is made a part of the record herein.

As hereinabove indicated, we do not agree with this position but we do concur in the conclusion of the Chancellor in this regard.

It results that the assignment of error is overruled and the judgment of the Chancellor is affirmed.

AFFIRMED.

TODD, and DROWOTA, JJ., concur.


author: W. E. QUICK, Special Judge. NEARN, Judge,

text:
    Willis PARTEE et al., Appellants, v. Billy M. PIERCE et al., Appellees.
    Court of Appeals of Tennessee, Western Section.
    Jan. 10, 1977.
    Certiorari Denied by Supreme Court May 31, 1977.

      John C. Nowell, Jr., Tom W. Crider, Trenton, Hewitt Tomlin, Jackson, for appellants.
    Sidney W. Spragins, Jackson, Thomas E. Harwood, Trenton, for appellees.
   W. E. QUICK, Special Judge.

This appeal involves the constitutionality of Chapter 95 of the Private Acts of 1975, authorizing the Bradford Special School District, in Gibson County, created by Chapter 153 of the Private Acts of 1917, to issue bonds in an aggregate amount not to exceed one million six hundred thousand dollars ($1,600,000) for the purpose of constructing, improving and equipping school buildings and additions thereto, and to levy a tax of one dollar and seventy-five cents ($1.75) on each one hundred dollars worth of taxable property in the Bradford Special School District for the payment of such bonded indebtedness.

Section 4 of the Act provides that the bonds therein authorized shall not be issued until the issuance thereof has been approved by a majority of the qualified voters in the District voting in a referendum to be called for such purpose by the Election Commissioners of Gibson County.

Section 5 of the Act further provides that the Act shall have no effect unless the issuance of the bonds therein authorized shall have been approved by a single majority of the qualified voters in the Bradford School District voting in such referendum election.

The Act further provided for an appropriate notice of the election to be published in a newspaper of general circulation in the District at least twenty (20) days prior to the date of referendum.

Pursuant to this authority a referendum was held on July 12, 1975, and the bond issue was approved by a majority of those voting in the referendum election.

Thereafter, on December 30, 1975, suit was filed in the Law and Equity Division of the Court of Gibson County, by certain of the taxpayers within the Bradford Special School District, seeking to have the Court declare Chapter 95 of the Private Acts of 1975 unconstitutional and void, and to enjoin the sale of the bonds therein authorized.

The matter was heard on the pleadings and stipulation and exhibits, with the result that the Chancellor found that Chapter 95 was not unconstitutional as an improper delegation of the legislative power to the people; that adequate notice had been given for the referendum election, and the suit was accordingly dismissed.

Appellants assign two Assignments of Error, as follows:

I

It was error for the Trial Court to find and declare that Chapter 95 of the Private Acts of 1975 is not unconstitutional as an improper delegation of the legislative power to the people.

II

It was error for the Trial Court to find and declare that adequate notice was given for the Bradford Special School District bond referendum held on July 12, 1975.

By the first assignment, it is appellants’ contention that by making issuance of the bonds conditioned upon obtaining a majority vote in the District, under the provisions of Section 4 of the Act, the Act is rendered unconstitutional as an improper delegation of power to the people, in violation of the provisions of Article II, Section 3, and Article XI, Section 3, of the Constitution of the State of Tennessee.

In support of this position, appellants cite as authority Wright v. Cunningham, 115 Tenn. 445, 91 S.W. 293; Arthur v. State, 148 Tenn. 434, 256 S.W. 437, and Buena Vista Special School District v. Board of Election Commissioners, 173 Tenn. 198, 116 S.W.2d 1008.

It is believed these cases may be distinguished. In Wright v. Cunningham there was involved an amendment of a legislative act of general application, making it unlawful to permit livestock to run at large in counties in Tennessee having a population of between 14,000 and 200,000. The amendment sought to limit application of the general act by providing that it would apply only to such counties as might adopt the same by a majority vote of legal voters in such county. The Court held the amendment to be unconstitutional as delegating legislative power to the people. This would appear to be quite a different situation than involved in the case at bar, dealing with a private act applicable to a purely local situation. Moreover, the holding in Wright v. Cunningham, supra, has been considerably modified in later decisions, as will be pointed out in this opinion.

In Arthur v. State, supra, the Court had for consideration a private act which undertook to create a new circuit court of Washington County, subject to vote of the citizens of the County. The particular section of the act read as follows:

“If a majority of the lawful voters voting at said election vote ‘for the circuit court’ then this act shall take effect; but if a majority of the lawful voters at said election vote ‘against the circuit court,’ then this act shall not take effect and shall not become a law.”

It is not conceivable that the Legislature could delegate to the citizens of a particular county the power to create a State court, and the act was clearly unconstitutional.

In Buena Vista Special School District v. Board of Education Commissioners, supra, the Legislature, by private act, delegated to the citizens of the School District the right, by popular vote, to amend a previous act of the Legislature by replacing the old board of directors, and to provide for management of the district by the County Board of Education. The Court properly held this to be an improper delegation of legislative authority. It would appear there is a vast difference in undertaking an amendment of a previous act by popular vote and implementing a current act, and it is not believed this case is in point in dealing with the situation here under consideration. In any event, there is an abundance of later authority upholding the validity of legislation of the character here involved.

In Weil v. Newbern, 126 Tenn. 223, 148 S.W. 680, there was involved an act of the legislature authorizing the issuance of bonds for the erection and furnishing of school buildings. Section 3 of the Act provided:

“Be it further enacted, that the said bonds shall not be issued or used unless so ordered by a vote of a majority of the qualified voters of the town of Newbern at any time and as many times as the mayor and aldermen may deem necessary.”

The attack made upon Section 3 of the Act was limited to that part of the section giving to the mayor and aldermen the right to hold elections at any time and as many times as the mayor and aldermen may deem necessary.

While the election was held to be void for the reason it was held by the sheriff instead of the Commissioners of Election of Dyer County, the Court did hold the attack made on Section 3 of the Act to be unfounded.

In Kee v. Parks, 153 Tenn. 306, 283 S.W. 751, the Buena Vista Special School District of Carroll County was authorized to issue bonds in the sum of $12,000, the proceeds to be used in the purchase of a lot and the construction of a school building thereon. The Private Act provided an annual tax of forty cents on the one hundred dollars worth of taxable property within the district for payment of the bonds with interest. The act further provided that the bonds should not be issued until authorized by a majority of the voters in an election called for that purpose.

The Court, after considering and distinguishing Wright v. Cunningham, supra, and Weil v. Newbern, supra, held:

“It follows that, whether the submission feature of the act be treated as only an incident to the issuance of the bonds, or as a condition or contingency upon which their issuance is to take place, or as an immemorial usage, or as a delegation of power under article II, section 9, or the act be treated as special rather than general, the constitutional provisions here considered do not render it invalid.”

In Clark et al. v. State, 172 Tenn. 429, 113 S.W.2d 374, the Court had for consideration application of the local option law for the manufacture and sale of intoxicating liquors. The Public Act provided that upon the filing of a petition by ten percent or more of the qualified voters of a county, it became the duty of the county election commissioners to hold an election permitting residents of the county to vote for or against the manufacture of intoxicating liquors within the county. A petition was filed in the Chancery Court to enjoin the county officers from calling such an election.

The Chancellor, holding the Act to be unconstitutional, sustained the petition and granted the injunction.

On appeal, petitioners, relying upon Wright v. Cunningham and Arthur v. State, insisted that the act was unconstitutional as an improper delegation of legislative power to the people. The Supreme Court, in reversing the judgment of the Chancery Court, held:

“After a careful consideration of the questions involved in this cause, we hold Chapter 193, Public Acts of 1937, to be valid and constitutional. The decree of the chancellor holding the act unconstitutional must be reversed and the bill dismissed.”

In Melvin v. Bradford School District, 186 Tenn. 694, 212 S.W.2d 668, complainant sought a declaratory judgment as to the validity of Chapter 707, Private Acts of 1947, which, among other things, authorized the issuance of bonds in an amount not to exceed Fifty Thousand Dollars ($50,000) for the purpose of erecting' and equipping school buildings. And, as in the case at bar, the Act provided that the power to issue the bonds should not be exercised until a majority of the qualified voters, resident in the District, have voted in favor of the issue and sale of the bonds.

While that portion of the Act providing for a majority vote of the people was not specifically attacked, the validity of the entire Act was nevertheless within the purview of the pleadings, seeking a declaratory judgment to declare the Act invalid. We believe, therefore, that the holding of the Court is significant in our consideration of this case. We quote from the opinion:

“The last assignment of error challenges the correctness of the Chancellor’s decree in holding Chapter 707, Private Acts of 1947, as valid. This Act purports to amend the original Act of 1917 by authorizing the issuance of $50,000.00 in bonds for special school purposes. We find nothing in this Act that is violative of the Constitution. Counsel for appellant fails to suggest any reason for holding the Act unconstitutional and upon full consideration we can conceive of none. We are, therefore, constrained to agree with the Chancellor that it is a valid Act.” (italics ours)

From this review of authorities, it clearly appears that our Supreme Court, in the more recent decisions, has consistently held that Private Acts, of local application, giving to the people a right of adoption or rejection of rights or responsibilities therein provided is not an improper or unconstitutional delegation of legislative power.

We believe, therefore, that the constitutionality of Chapter 95 of the Private Acts of 1975 is clearly established by the line of authorities herein discussed, but, by way of answer to appellants’ attack directed particularly to Section 5 of the Act, providing that the Act shall have no effect unless the proposition to issue the bonds shall have been approved by a simple majority of the qualified voters residing in the District, we would urge that this section neither adds to nor detracts from the body or meaning of the Act.

By Section 4 of the Act it is provided that the bonds shall not be issued until approved by a majority of the qualified voters in the special school district. It follows then, as a matter of course, that if the bond issue is not approved by the voters, the Act is of no effect. The Act merely authorizes the bond issue — it does not require it. Section 5 could, therefore, be elided from the body of the Act without in any way impairing the intent or purpose, or even the effectiveness of the Act.

The doctrine of elision is recognized in Davidson County et al. v. Elrod, 191 Tenn. 109, 232 S.W.2d 1, wherein the Court had for consideration Chapter 806 of the Private Acts of 1949. The Act provided certain benefits for widows of pensioned employees of Davidson County. The body of the Act, after providing for the widow, provided certain such benefits if there be no widow, to dependent children under sixteen years of age, or a dependent mother, if there be no such children.

The widow, Mrs. Elrod filed suit to recover benefits under the Act, and was met by demurrer insisting that the Act was unconstitutional, in violation of Article II, Section 17, in that the body of the act was broader than the caption, since it included dependent minor children or mother of beneficiaries.

The Circuit Judge overruled the demurrer, holding that the provision in the body of the Act, applying to children or mother could be elided without destroying the integrity of the Act insofar as it applied to the widow. On appeal, the Supreme Court held:

“The rule of elision applies where the valid portion of the statute is not so dependent upon the portion said to be void that the Court cannot presume that the Legislature would not have enacted the valid portion in the absence of the inclusion within the enactment of that portion which is said to be void.”

Section 6 of Chapter 95 specifically provides for severance, and under authority of Davidson County v. Elrod, supra, we hold that the principle is applicable here.

Finally, by Assignment of Error II, appellants raise the question of adequacy of notice as respects the call for the referendum election held on July 12, 1975.

The Act here under consideration provides that notice shall be given at least twenty days prior to the date of election by publication in a newspaper circulated in the school district.

It is conceded that there are no newspapers published within the boundaries of the Bradford Special School District. The closest towns in Gibson County publishing newspapers are Trenton, Milan and Dyer. The record discloses that newspapers published in these several surrounding towns have regular circulation within the Bradford Special School District, and there is attached, as exhibits to the transcript, seventeen newspaper clippings covering stories with respect to the referendum, beginning on May 21, 1975, and ending July 10, 1975. It is further noted that among the clippings are four from the Jackson Sun, published in Jackson, Tennessee.

It is further noted, in article appearing in the Jackson Sun issue of June 8, 1975, that reference is made to a printed letter explaining why people should vote against the bond issue, and it states the letter would be circulated to everyone in the district by persons opposed to the bond issue. Furthermore, that a door to door canvass of the district would be begun on that date (June 8,1975) to “warn people not to vote in favor of this bond issue.”

It is conceded that the twenty-day official notice, as required by the Act, was delayed by some four or five days, but it is noted the press releases began as early as May 21, 1975, with a story appearing on that date in the Milan Mirror, and continued until the election on July 12, 1975.

It would appear, therefore, that with the wide circulation of news, together with the letter herein referred to and the door to door canvass of voters, the short delay in publishing the official notice is relatively unimportant. Our Courts have held that statutory notice is not necessarily a condition precedent to a valid election. In Hanover v. Boyd, 173 Tenn. 426, 438, 121 S.W.2d 120, 124, wherein the Governor failed to issue a writ of election within the prescribed time to fill a vacancy upon the death of an attorney general, the Court held:

“The official returns show that the vote cast in this election for District Attorney General on August 4, 1938, was higher than the vote cast for candidates for any other office on the same day except for candidates running for sheriff. As it heretofore appears, more than forty-four thousand votes were cast in this special election and there can be no question but that the people had adequate notice of the election and that there was a full expression therein by the people.
“For the reasons stated, under the authorities set out, we are unwilling to set aside this election because of the failure of the Governor to issue a writ of election and to cause one month’s publication thereof to be made. The time and place of the election were fixed by a higher authority. The vacancy was a matter of public knowledge. The election machinery was set up. It can make little difference who started the machinery so long as it functioned properly on a proper occasion. We must regard the inaction of the Governor in this particular case as merely an immaterial official oversight.”

In State of Tennessee v. Quarterly County Court et al., 209 Tenn. 153, 351 S.W.2d 390, where there was a delayed statutory notice of special election referendum on a school bond issue, the Court stated:

“We have held that this statute is directory only.”

To the same effect is holding in State v. City of Jackson, 218 Tenn. 322, 326, 403 S.W.2d 304.

Finally, appellant contends that the notice prepared and published by the Election Commissioners of Gibson County did not conform to the requirements of Chapter 95 of the Private Acts of 1975, nor did it comply with the provisions of T.C.A. Sec. 2-1216(b).

Chapter 95 simply required publication of an “appropriate notice” of the holding of the election. It further required that the ballot should “state briefly the maximum amount of bonds authorized and the purpose of which such bonds are to be issued and shall contain the words ‘for the issuance of bonds’ and ‘against the issuance of bonds’.”

An examination of the official notice of election, appearing as Exhibit 7 to the Transcript, and the official ballot, appearing as Exhibit 8, indicates clearly a substantial, if not literal, compliance with the provisions of Chapter 95, as well as T.C.A. sec. 2-1216(b).

Appellant contends further that the notice of election must include “in its entirety” the resolution requiring the election. This contention is answered in Pidgeon-Thomas Iron Company v. Shelby County, 217 Tenn. 288, 397 S.W.2d 375, which involved a referendum for the approval of a local option sales tax. The same contention was made there, as here, that the complete resolution calling for the election was not “copied in toto” upon the ballot.

The Court, in approving the abbreviated legend, held:

“When citizens vote in a referendum, they are presumed to know the issue on which they are voting, and in the instant case we find that the abbreviated or short form of the pertinent part of the Resolution complies with the statute and that * * * the voter by reading such notice could intelligently vote his or her preference by making cross marks opposite the proper words.”

And quoting further, the Court made the following pertinent observation:

“And after all, this is the people’s government. Their wishes, constitutionally expressed, must prevail, no matter how much it upsets the previous status quo.”

In conclusion, it is stipulated that there were at the time 2,445 registered voters within the School District; that there were 916 votes favoring the bond issue, and 476 votes against, or a total vote of 1,392. This indicates that approximately fifty-eight percent of the registered voters in the Bradford Special School District voted in this special election.

This, it seems, should indicate that the qualified voters in the Special School District were well aware of the issues involved, and that the will of the people has been expressed by a most representative vote.

As stated in Heiskell v. Lowe, 126 Tenn. 475, at page 497, 153 S.W. 284, at page 289, and again repeated in Hanover v. Boyd, supra:

“It is a serious thing for any court to interfere with the result of an election, and set aside what appears to be the expression of the popular will. No court will do so on slight ground”.

We accordingly affirm the decree of the learned Chancellor holding that Chapter 95 of the Private Acts of 1975 is not unconstitutional as an improper delegation of the legislative power to the people, and that adequate notice was given for the Bradford Special School District referendum, and the cause is hereby dismissed at appellants’ cost.

Honorable W. E. QUICK, by designation of the Supreme Court of Tennessee, took part in the hearing of this appeal in the absence of Presiding Judge C. S. CARNEY.

MATHERNE, J., concurs.

NEARN, J., dissents.

NEARN, Judge,

dissenting.

I must respectfully dissent from the Opinion of my colleagues.

Section 4 of the Act is as follows:

“The bonds herein authorized shall not be issued until the issuance thereof has been approved by a majority of the qualified voters, who are residents and/or land owners of the district, in the special school district voting in a referendum called for such purpose by the Election Commissioners of Gibson County. The referendum shall be held at a time agreed upon between the Election Commission and the school board. Such referendum shall be held in the same manner and by the same officials as general elections are required to be held in Gibson County and notice thereof shall be given at least twenty (20) days prior to the date of said election by publication of an appropriate notice not less than one time in a newspaper of general circulation in such special school district. At such referendum election, the ballot shall state briefly the maximum amount of bonds authorized and the purpose of which such bonds are to be issued and shall contain the words ‘for the issuance of bonds’ and ‘against the issuance of bonds’. Opposite each of said phrases shall be a hollow square and the elector shall indicate his vote ‘for the issuance of bonds’ or ‘against the issuance of bonds’ by inserting a mark in the square opposite the appropriate phrase. The Election Commissioners of Gibson County shall canvass the returns of such referendum election and determine and declare in writing the results thereof. Such declaration shall constitute conclusive evidence of the results of the referendum election.”
Section 5 of the Act is as follows:
“This Act shall have no effect unless the proposition to issue the bonds herein authorized shall have been approved by a simple majority of the qualified voters residing in the area and/or landowners embraced within the Bradford Special School District voting in such referendum election. But upon such approval of the proposition, this Act shall be deemed to have been approved by such voters and shall be in full force and effect. The Election Commissioners of Gibson County shall certify the approval or nonapproval of this Act to the Secretary of State and to the Board of Education of the Bradford Special School District. The qualification of voters shall be that as provided by the General Election Laws of the state.”
Section 7 of the Act is as follows:
“Except as otherwise provided herein, this Act shall take effect upon becoming a law, the public welfare requiring it.”

First, with due deference, I do not agree with the majority’s statement regarding the contention of the appellants. I do not understand the appellants’ contention to be that Section 4 of the Act is unconstitutional because it makes the issuance of the bonds conditional upon a majority vote in the district. I believe the appellants would agree that making the issuance of the bonds conditional upon obtaining a majority vote would in no way affect the validity of Section 4 or any other Section of the Act. As I understand the complaint, Section 4 is attacked only because of alleged non-compliance with its notice provisions.

Section 5 is the one attacked as an improper delegation of power and I fear properly so. It is not the vote on the issuance of the bonds that creates the constitutional infirmity; but it is that part of Section 5 which clearly, to me at least, creates an unconstitutional delegation of legislative power to the general public. That constitutionally offensive delegation is found in the words, “This Act shall have no effect unless” and . . . “upon such approval of the proposition, this Act shall be deemed to have been approved by such voters and shall be in full force and effect.” These are the words whereby the Legislature unconstitutionally delegated its authority.

The declaration of the effective date of an Act is a non-delegable legislative function. Section 7 of the instant Act, when read with Section 5, is a delegation of that function to the people of Gibson County.

It is my position that in Wright v. Cunningham (1905) 115 Tenn. 445, 91 S.W. 293, the Supreme Court held that just such attempted delegations as set out in the Act under scrutiny are unconstitutional. I do not believe that the holding, in Wright v. Cunningham has been watered down by any subsequent decision of the Supreme Court dealing with the issue here presented.

In Wright v. Cunningham, supra, the Act called the “small stock Act” in essence provided:

This act shall only apply to such counties as may adopt the same by a majority vote by tickets which shall provide for those favoring the small stock law; “for the small stock law” and for those opposing the small stock law; “against the small stock law”.

The Court held such Act to be an unlawful delegation of power because it “leaves to the people the power to say whether, when such a rule has been enacted, it shall ever become operative.”

The Court further held:

“We are of the opinion that, under our constitution, no legislative act can be so framed as that it must derive its efficacy from a popular vote. To be valid it must leave the hands of the legislature complete; not in the sense that it must go into effect at once, it is true, but it must at its birth bear the impress of sovereignty, and speak the sovereign will.”

In closing the Wright Court noted:

“It is said in some of the cases that the vote is the effect of the law, and not the law the effect of the vote; but we think this is a mere play on words, since it is clear that, if all laws were made dependent upon such a contingency, representative constitutional government would be destroyed.”

Following the 1905 Opinion in Wright v. Cunningham, supra, we have the 1912 Opinion in Weil v. Newbern, 126 Tenn. 223, 148 S.W. 680. It is my opinion that the Weil Opinion deals with the problem of whether the issuance of local bonds, not the efficacy of the Act, may be left to a popular vote. The Court held that portion of the Act which permitted a vote on whether bonds would or would not issue was not a delegation of legislative authority. This in no way weakened the Wright v. Cunningham, supra, Opinion as the problem in Wright was whether the efficacy of the Act could be delegated to the people.

The Act in Weil, supra, provided as follows:

“ ‘An act to amend the charter of the town of Newbern and all the acts heretofore passed amendatory thereof, so as to empower the mayor and aldermen of said town to issue coupon bonds in an amount not to exceed fifty thousand dollars in excess of the present bonded indebtedness of the town.
‘Section 1. Be it enacted by the general assembly of the State of Tennessee, that the charter of the town of Newbern and all acts amendatory thereof be, and the same are hereby, so amended that the mayor and aldermen of said town shall be vested with power and authority to issue fifty thousand dollars of coupon bonds of said town as follows: To issue twenty-five thousand dollars of said bonds for the purpose of erecting and furnishing school buildings for the benefit of the children of school age in said town, ten thousand dollars of coupon bonds to improve and extend the water and light system of said town, and fifteen thousand dollars for paving or graveling the streets of said town.
‘Sec. 2. Be it further enacted, that all bonds issued under this act shall be of such denomination, bear such rate of interest, not exceeding six per cent per annum, and be due in such time not less than twenty — nor more than thirty— years from date, and be payable at such times and places as the mayor and aider-man may determine.
‘Sec. 3. Be it further enacted, that the said bonds shall not be issued or used unless so ordered by a vote of a majority of the qualified voters of the town of Newbern at any time and as many timés as the mayor and aldermen may deem necessary.
‘Sec. 4. Be it further enacted, that this act take effect from and after it (sic) passage, the public welfare requiring it.
‘Passed March 13, 1907.’ ”

If the Act sub judice provided as did the Weil v. Newbern Act, supra, I would agree that the present attack is unfounded. But, unfortunately, the present Act does not. Section 3 of the Act in Weil v. Newbern, supra, provides “said bonds shall not be issued or used unless so ordered by a vote of a majority . . . .” This is not the same as saying the Act shall not have effect until the bond issue is approved. Section 4 of the Weil v. Newbern Act, supra, provided “that this act take effect from and after it (sic) passage . . . It did not leave it up to a popular vote as to the time when the Act of the Legislature shall become effective.

Next, in 1923 we have Arthur v. State, 148 Tenn. 434, 256 S.W. 437. The Act therein held unconstitutional provided:

“ ‘If a majority of the lawful voters voting at said election vote “for the circuit court” then this act shall take effect; but if a majority of the lawful voters at said election vote “against the circuit court,” then this act shall not take effect and shall not become a law.’ ”

This is exactly, as far as I can perceive, what the present Act provides. The words “and shall not become a law” are surplus-age because if the law never takes effect, it shall never become a law. In addition, the Legislature may not leave it to popular vote to determine what the Legislature must determine, that is, when the Act shall take effect. The Constitution, Article 2, Section 20 gives to the Legislature the prerogative of setting the effective date of an Act and it may not be done by referendum.

Then we have in 1926 Kee v. Parks, 153 Tenn. 306, 283 S.W. 751. The Act there under consideration provided that the bonds shall not issue until approved by vote. The holding in this case is the same as that in Weil v. Newbern, supra. The Act under consideration was not unconstitutional. It left to the people to decide whether the bonds would issue. It did not attempt to permit the people to vote on when an Act of the Legislature shall take effect.

The majority Opinion quotes a portion from the Kee v. Parks, supra, decision. However, it should be understood that the “submission feature” spoken of in the quote is that feature of the Act which submits to a popular vote the question of whether or not the bonds shall issue. It did not submit to a vote the efficacy of the Act itself.

Two cases appeared in 1938. The first is Clark v. State 172 Tenn. 429, 113 S.W.2d 374. The question there was: Could the Legislature authorize the people of a county to vote on whether a general law should apply to that County (possession of intoxicating beverages)? That is not the issue now before us. But in the Clark case the Court discussed Wright v. Cunningham, supra, and held that the Act then under consideration did not run counter to the prohibitions announced in Wright v. Cunningham. The Clark Court first noted that the Act before it

. . was a complete law when it passed through the several stages of legislative enactment and, by its terms, took effect from and after its passage. It required nothing further to give it validity.”

The Clark Court then approved Wright v. Cunningham, supra, and noted that there the Act was unconstitutional because:

“The act did not provide any time when it should go into effect, other than the favorable vote for the law by the voters of Rhea county.”

In Clark v. State, supra, the Act was not dependent upon a favorable vote before the Act went into effect. In the present case it is.

The second case to appear in 1938 was Buena Vista Special School Dist. v. Board of Election Com’rs of Carroll County, 173 Tenn. 198, 116 S.W.2d 1008. While not giving the exact verbiage of the Act under question, Justice Green speaking for the Court noted:

“[1] While the Act is framed somewhat differently from others previously invalidated by the court, it is obvious that the Act will derive any efficacy it may have from a favorable popular vote. An unfavorable vote leaves the Act nugatory. The case, therefore, falls within the authority of Wright v. Cunningham, 115 Tenn. 445, 91 S.W. 293, and Arthur v. State, 148 Tenn. 434, 256 S.W. 437, in which cases it was held that no legislative Act can be so framed as that it must derive its efficacy from a popular vote.”

It is my opinion that this is the exact prohibited situation presented by the Act now under consideration by this Court.

Melvin v. Bradford Special School Dist. (1948) 186 Tenn. 694, 212 S.W.2d 668, simply held an Act which provided that bonds were not to be issued until the people voted on. them was constitutional. I have no quarrel with it as it appears to me to be a reiteration of Weil v. Newbern, supra. However, it does not touch the problem as I see it, raised by this appeal.

My analysis of the pertinent cases leads me to believe that Wright v. Cunningham, supra, has not been softened by any later decision, but on the other hand, has been reaffirmed.

The majority would hold that even if my views on the subject were correct, the offensive words could be elided, and rely upon Davidson County v. Elrod (1950) 191 Tenn. 109, 232 S.W.2d 1, as an authority. With this position I do not agree. In my opinion the Act under consideration and the words sought to be elided in Davidson County v. Elrod, supra, are in no way similar or germane to the Act and words we must now consider. In Arthur v. State, supra, the same words now suggested by the majority to be the subject of elision were sought to be elided. The Court held it could not be done and stated:

“The legislature conditioned the life of the act before us upon the result of the election provided for. There can be no mistake about this. It would be a palpable contempt of the legislative will for us to strike out the election provision from the act and give effect to the act regardless of the election.”

Therefore, I believe elision is impermissible.

It may well be that the school bond issue is needed in Gibson County. It very well may be that the Legislature, through oversight, has made a poor choice of words and it did not intend to let the effective date of the Act be determined by popular vote. However, as noted in Wright v. Cunningham, supra:

“All legislative acts, regardless of their contents or of their relative importance, must pass the same ordeal; not one, from a constitutional standpoint, being entitled to more consideration, or subjected to more stringent limitations, or to be treated with more leniency than any other.
All must be measured with the same measure.”

For these reasons, I dissent and am constrained to declare the Act unconstitutional.


text:
    James Lester USREY, a minor, by his father and next friend, T. H. Usrey, Plaintiff-Appellant, v. J. W. LEWIS, Phyllis Lewis and Barbara Usrey, Defendants-Appellees. T. H. USREY and wife Mary Usrey, Plaintiffs-Appellants, v. James W. LEWIS, Phyllis Lewis and Barbara Usrey, Defendants-Appellees.
    Court of Appeals of Tennessee, Middle Section.
    Jan. 31, 1977.
    Certiorari Denied by Supreme Court July 5, 1977.

      E. A. Langford, Langford, Mitchell & Langford, Cookeville, for plaintiffs-appellants.
    John L. Camp, Camp & Camp, Sparta, for def endants-appellees.
   OPINION

TODD, Judge.

In these consolidated cases, James Lester Usrey, a minor by next friend, and T. H. Usrey and wife, Mary Usrey, sued J. W. Lewis and others for personal injuries sustained in an automobile collision. Their suits were dismissed by the Trial Judge upon a “Motion to Dismiss on Plea of Res Adjudicata,” and plaintiffs have appealed.

Upon a former appeal to the Supreme Court from a similar ruling, the Supreme Court in its opinion stated:

“With the record in this state, there is no way this Court can pass upon the sufficiency of the plea of res adjudicata. In the first place, the plea of res adjudi-cata should have been in writing. And, as a plea in bar, when issue is joined thereon, it should have been proved by the introduction of the record in the case relied on as a bar thereto.
“The proper disposition of this case will be to remand it, in order that a proper written plea of res adjudicata may be filed, that issue may be joined thereon, and that proof in the form of the records and judgments in the cases pleaded as res adjudicata may be filed for consideration by the trial court and, if necessary, for consideration by the proper appellate court. This remand should be without prejudice to any of the parties.”

Upon remand to the Trial Court, the defendant filed the “Motion to Dismiss on Plea of Res Adjudicata,” and plaintiffs moved to “strike, quash and dismiss” said “Motion to Dismiss, etc.” on the grounds that,

“same is not good in either law or fact, and same does not conform to the rules of pleading and is not verified as required by law.”

Plaintiffs also filed an untitled pleading in which they joined issue upon said “Motion to Dismiss . . . etc,”

“. . . in each instance where the said ‘plea’ and the conclusions therein are not in accordance to the record and the facts.”

The Trial Judge then entered an order wherein:

1. Plaintiffs’ motion to strike, quash and dismiss was “dismissed” (overruled).
2. Defendants’ motion to dismiss plaintiffs’ causes of action was held to be “well taken” (sustained),
3. Plaintiffs’ suits were dismissed.

From said order, plaintiffs perfected their appeals to the Supreme Court, which Court has remanded the appeals to this Court for disposition.

The manner and terminology of the pleadings heretofore mentioned presents some difficulty of analysis; however, this Court will endeavor to give effect to the substance, rather than form and terminology with due regard to the new Tennessee Rules of Civil Procedure as supplemented where necessary by previous and unsup-planted and recognized rules of civil pleading and procedure.

Rule 8.03, T.R.C.P., reads in pertinent part as follows:

“In pleading to a preceding pleading, a party shall set forth affirmatively facts in short and plain terms relied upon to constitute accord and satisfaction, arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of limitations, waiver, and any other matters constituting an avoidance or affirmative defense.” (Emphasis supplied)

It appears, therefore, that res ju-dicata is an affirmative defense which must be plead specially. It would therefore appear that the proper method to present the defense of res judicata is by a pleading (answer), and not by a motion. If, from affidavits or other evidence, the facts supporting the defense are made to appear uncontroverted, then a motion for summary judgment would be in order.

The defendants’ “Motion to Dismiss on Plea of Res Adjudicata” will therefore be considered to be an answer presenting the affirmative defense of res judicata and a motion for summary judgment for defendant.

Rule 12.06 T.R.C.P. states:

“12.06. Motion to Strike
Upon motion made by a party before responding to a pleading or, if no responsive pleading is permitted by these rules, upon motion made by a party within 30 days after the service of the pleading upon him or upon the court’s own initiative at any time, the court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent or scandalous matter.” (Emphasis supplied)

The plaintiffs’ motion to strike the defendants’ defense “because same is not good in law . . .,” therefore properly raised the issue of the legal sufficiency of said defense.

The substance of the quoted portion of plaintiffs’ motion is a demurrer to the plea or “setting down the plea for argument.” See Gibson’s Suits in Chancery, Fifth Edition, Vol. 1, § 359, pp. 414, 415; Witt v. Ellis, 42 Tenn. 38 (1865); Klepper v. Powell, 53 Tenn. 503 (1871).

It therefore behooves this Court to respond to the motion of plaintiffs by examining the sufficiency of the “Motion to Dismiss, etc.” (answer, plea, or defense) of the defendant.

Said pleading alleges that a collision occurred on December 24,1969, between vehicles operated by Barbara Usrey and Phyllis Lewis, that each of the occupants of the vehicles was injured or killed, that suits were brought to recover damages for or on behalf of each person involved, that all of said suits were tried on July 1,1971, except the two suits now pending on appeal, which were deferred by “severance”; and that the defendant in the present cases claims that the disposition of the cases which were tried is conclusive or res judicata as to the present cases which have not been tried.

Exhibited to defendants’ “Motion” are copies of the pleadings and orders in the following cases:

1. James Lewis v. Barbara Usrey.
2. Phyllis Lewis v. Barbara Usrey.
3. Jess Hale v. Barbara Usrey.
4. Ruby Hale v. Barbara Usrey.
5. Jacqueline Michelle Lynch v. Barbara Usrey, J. W. Lewis and Phyllis Lewis.
6. Stephanie Dawn Lynch v. Barbara Us-rey, J. W. Lewis and Phyllis Lewis.

In the first four cases, verdicts were rendered and judgments entered in favor of plaintiffs and against Barbara Usrey on July 15, 1971.

In the last two cases, verdicts were rendered and judgments entered in favor of the plaintiffs and against Barbara Usrey, and the defendant Phyllis Lewis was dismissed on July 27, 1971.

It is alleged in said defensive pleading that the present cases arise out of the injury of James Lester Usrey and the death of Helen Marie Usrey, both of whom were passengers in the vehicle operated by Barbara Usrey.

It is also alleged in said defensive pleading that Jacqueline Michelle Lynch (No. 5) and Stephanie Dawn Lynch (No. 6) were also passengers in the vehicle operated by Barbara Usrey.

Said motion of the defendant also states:

“They (the jury) found that Phyllis Lewis was not guilty of negligence and rendered judgment for her and her husband against Barbara Usrey and did not render a judgment against her in favor of any plaintiff who had sued her.”

The legal issue therefore becomes reasonably clear. That is, where several passengers are injured in a two-car collision, and the suits of some, but not all, of the passengers are tried with results unfavorable to one driver and favorable to the other, are the rights of the other passengers whose suits have not been tried concluded by the judgments in the cases which were tried? Also, where the driver of one vehicle obtains judgment against the driver of the other vehicle, does this conclude the rights of the passengers in the latter vehicle as against the driver of the former vehicle?

According to the allegations in the defensive pleading, the subject matter in the cases heretofore decided was the same as that in the present cases, to the extent of the issue of fault for the collision; but identity of this issue does not render the cases sufficiently identical to justify the application of res judicata. Identity of parties is required. Clements v. Pearson, 209 Tenn. 223, 352 S.W.2d 236 (1962); Melton v. Pace, 103 Tenn. 484, 53 S.W. 939 (1899). Merchants & Mfrs. Transfer Co. v. Johnson, 55 Tenn.App. 537, 403 S.W.2d 106 (1966); Polk v. Davidson County, 39 Tenn.App. 68, 281 S.W.2d 257 (1955); State v. Delinquent Taxpayers, 26 Tenn.App. 62, 167 S.W.2d 690 (1942).

There is no allegation or indication of any identity or privity between the present plaintiffs and the parties whose cases have already been decided.

Appellee cites no authorities contrary to the above, but relies upon the fact that plaintiffs sought and obtained a “severance” whereby they abstained from participation in the consolidated trial of other cases arising out of the same collision. In 50 C.J.S. Judgments § 774, pp. 302, 303 is found the following text:

“Where one of several plaintiffs or defendants in an action is put out of the case by a dismissal or discontinuance as to him, the judgment thereafter rendered is not conclusive on such party and it does not constitute a merger of the cause of action for or against him. The same rule applies where there is a severance and separate trials are had as to the different parties, where the action abates as to one, or where one is permitted to withdraw from the case; but it does not apply where a party merely abandons or neglects to present his case or defense.”

No authority has been cited or found to support defendant’s insistence that a request for severance subjects the requester to the results of trial of other cases. Such would defeat one of the purposes of severance, that is, the freedom to try a case separately unhindered by other cases.

It should be noted that the “severance” was not a true severance, but rather a continuance of cases and release of same from an order or agreement for simultaneous “consolidated” trial. It is not alleged that the present plaintiffs were ever parties to any of the cases previously decided.

Finally, defendant insists that a remand for trial of the present cases may result in verdicts inconsistent with the verdicts previously rendered. This is true, but no known legal principle prohibits a plaintiff from seeking his remedy because another plaintiff has been unsuccessful before a previous jury upon the same or similar evidence.

In Chitwood v. Myers, 60 Tenn.App. 1, 443 S.W.2d 827 (1969), cited by defendant, all of the cases were tried to the same jury, and two were submitted to the jury first, but the same jury decided all cases. This Court did comment upon the duty of a trial judge to reject inconsistent verdicts, but the reference was to verdicts of the same jury resulting from the same trial.

Appellee relies upon the presumption of correctness of judgment where no bill of exceptions is preserved. Such presumption relates only to findings of fact and not to conclusions of law. Regardless of the evidence, if any, it was error to sustain a defensive pleading which was in law insufficient and to dismiss on the basis of such pleading.

The defensive pleading was insufficient in law and did not authorize dismissal of plaintiffs’ suits.

For the reasons stated, the orders of the Trial Judge dismissing these cases upon the special plea of res judicata is reversed and the causes are remanded to the Trial Court for further proceedings leading to a trial upon the merits.

Costs of this appeal are adjudged against the defendant-appellee.

Reversed and Remanded.

SHRIVER, P. J., and DROWOTA, J., concur.