author: CLEMENS, Presiding Judge.

text:
    STATE of Missouri, Respondent, v. Sherman STRICKLAND, Appellant.
    No. 36093.
    Missouri Court of Appeals, St. Louis District, Division Two.
    Dec. 2, 1975.
    William J. Shaw, Public Defender, Alan G. Kimbrell, David Adams, Asst. Public Defenders, Clayton, for appellant.
    John C. Danforth, Atty. Gen., Preston Dean, Asst. Atty. Gen., Jefferson City Courtney Goodman, Jr., Pros. Atty., Gene Fahrenkrog, Asst. Pros. Atty., Clayton, for respondent.
   CLEMENS, Presiding Judge.

A jury found defendant guilty of second degree burglary and stealing. The court sentenced defendant consecutively to eight years for burglary and four years for stealing. He appeals.

During trial the State introduced evidence of scratches and prymarks found on the Lee residence next door to the victim’s. Defendant contends this evidence was proof of another crime, attempted burglary, and was prejudicial. We agree.

The townhouse apartment of James Murray was burglarized on November 14, 1973. Hattie May, a next door neighbor, heard banging sounds and from her window saw defendant walking away from the Murray residence carrying clothing and a small suitcase. As she watched, defendant handed the items to another man, telling him to “bring the car down.” Mrs. May then called the police.

Police found defendant in an alley behind the apartments and found Murray’s personal property in a parked car. They detained him for questioning; Mrs. May identified him at the scene.

The challenged evidence: Later, on the day the Murray house was burglarized, John Lee who lived next door came home to find a groove on his door and other signs it had been jimmied. John Lee also found a tire iron near the alley behind the buildings. Again the police were summoned and placed the tool found by Lee into the marks on Lee’s door; the fit was snug. Lee said the marks on his door were “similar” to those on Murray’s door.

Defendant was not linked by fingerprints to the tire tool, nor was it ever seen in his possession. The tire tool is linked to defendant only by “similar” marks on the victim’s door. The record does not show that the tool was placed into the grooves on Murray’s door to determine the fit. Nor is there any indication that the grooves in the victim’s door were made with the same tool or type of tool as those on Lee’s door — or that defendant made the marks on either door. Counsel for the State concedes this tire tool was never connected with the defendant.

Evidence of separate and distinct crimes from that charged to a defendant are generally inadmissible. State v. Reese, 274 S.W.2d 304, 307[1] (Mo.1955). Of the several exceptions to this general rule, the State relies on two. The prymarks are said to be indicative of defendant’s intent and are part of the res gestae of the offense. Since the evidence failed to tie the tire tool to the defendant neither exception applies.

Our case is akin to State v. Hancock, 451 S.W.2d 6[2] (Mo.1970), where stolen items were found in the trunk of the car in which defendant was riding. Some of these items were not taken in the burglary for which the defendant was on trial; they were identified as items taken in earlier thefts. The court reversed the conviction because of the extraneous evidence even though the trial court had instructed the jury to disregard it.

Since defendant was not connected with the incident at Lee’s door, evidence thereof was irrelevant and should have been excluded. State v. Lamb, 468 S.W.2d 209[2] (Mo.1971). See also State v. Mathis, 375 S.W.2d 196 (Mo.1964), where defendant was charged with burglary of a showroom. Evidence was adduced of a similar breakin two blocks away on the same night. The court found each burglary was a separate, completed transaction and reversed the conviction.

Injection into a case of separate crimes from that charged has a “dangerous tendency and misleading probative force” causing the defendant to suffer unfair disadvantage at his trial, State v. Lee, 486 S.W.2d 412, 415[3, 4] (Mo.1972). So it is here.

We reverse the judgment and remand for a new trial.

KELLY and STEWART, JJ., concur.


source: Caselaw Access Project

license: Public Domain

text:
    STATE of Missouri, Respondent, v. James STURGELL, Appellant.
    No. 36615.
    Missouri Court of Appeals, St. Louis District, Division Two.
    Dec. 2, 1975.

      Charles D. Kitchin, Public Defender, Kent Fanning, Asst. Public Defender, St. Louis, for appellant.
    John C. Danforth, Atty. Gen., Preston Dean, Asst. Atty. Gen., Jefferson City, Brendan Ryan, Circuit Atty., James F. Booth, Asst. Circuit Atty., St. Louis, for respondent.
   CLEMENS, Presiding Judge.

Defendant appeals from a conviction of stealing a motor vehicle. (§§ 560.156 and 560.161, RSMo 1969). A jury found him guilty and the court sentenced him to five years’ imprisonment.

On the evening of April 30, 1974 defendant was found tampering inside Garry Smith’s 1961 Chevrolet. When confronted, defendant announced an interest in buying the automobile. Later, Smith parked his car in front of his girl friend’s house. Shortly after midnight, a witness saw defendant tampering with the car and when she called for him to get out of the car he drove off in it. The car was soon abandoned.

Police recovered the Smith car in a few hours but there was no evidence about the circumstances of its abandonment or recovery. Defendant did not testify, but offered one alibi witness.

Defendant contends the State failed to establish his intention to permanently deprive Smith of the car’s possession. The test for determining the sufficiency of circumstantial evidence is whether the circumstances relied on by the State are consistent with each other and with a theory of guilt and are inconsistent with the defendant’s innocence. State v. Hill, 519 S.W.2d 326[1] (Mo.App.1975) and State v. Sallee, 436 S.W.2d 246[1] (Mo.1969). Defendant contends that because the car was abandoned soon after its asportation, an inference exists that he intended only temporary deprivation. The State’s case, as defendant sees it, is devoid of evidence showing the necessary intent to steal.

Defendant showed an unusual interest in Smith’s automobile by returning to the car after first being seen tampering with it. This persistent interest in the car was inconsistent with defendant’s theory (argued but not in evidence) that defendant was casually seeking available transportation or intending a mere temporary deprivation. Furthermore, the manner of the car’s taking infers an intent to steal it. The taking at such a late hour suggests more than an intent to test drive the automobile. Defendant broke into the ear at night, breaking its distributor cap to allow the “hot wiring” of the car. In this condition it was readied for theft. While this wilful damaging of the car does not by itself satisfy the State’s burden to prove an intent to steal, considered with the evidence of defendant’s peculiar interest in the car and his driving it off, we find the evidence sufficiently supports the jury’s verdict of stealing. The jury was properly instructed on the necessity of finding defendant intended to permanently deprive the owner of his property, and by its verdict did so find. We hold the verdict was supported by the evidence.

Defendant’s other point on appeal challenges the trial court’s failure to submit a § 560.175 tampering instruction. Defendant offered no such instruction and failed to raise this point in his brief. However, Rule 26.02(6) required the trial court to instruct on all necessary questions of law. Where the evidence supports an asserted defense, or lesser included offense, failure to instruct thereon would be plain error under Rule 27.20(c). State v. Haygood, 411 S.W.2d 230 (Mo.Sup.1967); State v. Randolph, 496 S.W.2d 257[4] (Mo.1973).

We consider defendant’s point under that rule. Defendant’s argument is based on his premise that the State failed to prove his intent to steal and he was therefore entitled to an instruction on tampering, which the State did prove. Since we have ruled against the premise considering intent, the defendant’s argued conclusion falls.

We deny defendant’s point on another ground. The test of whether an instruction on a lesser, included offense is required is whether “the evidence shows that a defendant may not be guilty of the offense charged (stealing), but may be guilty of an offense (tampering) necessarily embraced in the charge.” State v. Leigh, 466 S.W.2d 685[2] (Mo.1971). “Before instructions on the included or lesser offenses are compelled, however, there must be evi-dentiary support for such offenses.” State v. Washington, 357 S.W.2d 92[6-8] (Mo.1962). See also State v. Walker, 505 S.W.2d 119[5 — 8] (Mo.App.1973). We note the only defense evidence concerned an alibi, and there was no evidence in the State’s case that defendant merely tampered with but did not steal the car. Had the evidence warranted a finding that defendant was guilty only of tampering he would be entitled to a separate instruction thereon. But here the tampering and theft were continuous inseparable acts: Hence, the court did not err in failing to instruct on tampering as a lesser, included defense.

Judgment affirmed.

KELLY and STEWART, JJ., concur.


author: GUNN, Judge.

text:
    Lawrence Harry WILLIAMS, Defendant-Appellant, v. STATE of Missouri, Plaintiff-Respondent.
    No. 36170.
    Missouri Court of Appeals, St. Louis District, Division Three.
    Dec. 2, 1975.

      James C. Jones, Asst. Public Defender, St. Louis, for defendant-appellant.
    John C. Danforth, Atty. Gen., Preston Dean, Asst. Atty. Gen., Jefferson City, J. Brendan Ryan, Circuit Atty., J. Paul Allred, Jr., Asst. Circuit Atty., St. Louis, for plaintiff-respondent.
   GUNN, Judge.

This appeal is taken from an order of the circuit court denying movant’s motion to vacate sentence pursuant to Supreme Court Rule 27.26. The 27.26 motion alleged two grounds which are asserted on appeal: 1) that movant was denied effective assistance of counsel in that his attorney persuaded him to waive his right of appeal without advising him of the consequences; and 2) that the conviction was based on prejudicial hearsay testimony. After reviewing the record and considering the issues raised, we affirm the order of the circuit court denying the motion to vacate.

Movant was convicted of first degree robbery by jury verdict entered April 16, 1965 and was sentenced under the Second Offender Act to 30 years imprisonment. On July 26,1965, William J. Hough entered his appearance as attorney for movant and filed a motion to reduce sentence. Mr. Hough had been retained by movant’s family and had held some preliminary conversations with movant prior to hearing on the motion to reduce sentence. The motion to reduce was granted on July 30, 1965. The results of the motion were that the 30 year sentence was reduced to 25 years, and it was provided that two other unrelated 10 year sentences movant had received were to run concurrently with the 25 year sentence. Movant thereupon filed a waiver of his right to appeal from the jury conviction of April 16, 1965.

Movant argues that he was denied effective assistance of counsel in that Mr. Hough persuaded him to sign the waiver without explaining the rights of appeal or the consequences of the waiver. The waiver which both movant and Mr. Hough signed in open court and for which movant was given a reduction in sentence reads:

“By leave of court sought and obtained Defendant waives right to appeal and requests sentence as reduced by the court.
(signed) Wm. J. Hough Atty. for Deft.
(signed) Lawrence Williams”

Movant contends that the decision to waive appeal was the unilateral decision of Mr. Hough and was not a voluntary and intelligent waiver by movant of his constitutional right; that he had not read the waiver he signed. The only evidence in support of movant’s position in this record is his own testimony; Mr. Hough is deceased.

In denying movant’s motion to vacate sentence, the circuit court found that movant had knowingly waived his right for appeal for the purpose of reducing his sentence. Movant’s testimony was rejected as being not credible, and the circuit court found that movant had not carried his burden of proof. It is the movant’s burden to establish his grounds for Rule 27.26 post conviction relief. Floyd v. State, 518 S.W.2d 700 (Mo.App.1975). And we are interdicted in our scope of review in this 27.26 appeal to a determination of whether the findings, conclusions and judgment of the trial court are clearly erroneous. Dill v. State, 525 S.W.2d 437 (Mo.App.1975); Slankard v. State, 525 S.W.2d 101 (Mo.App.1975). There was no clear error here by the trial court. The only evidence in support of movant’s position was his own testimony given before the same circuit judge who had ruled favorably on movant’s motion to reduce sentence. The issue of credibility of movant’s testimony should be decided by the court hearing it. Campbell v. State, 515 S.W.2d 453 (Mo.1974); Powell v. State, 528 S.W.2d 767 (Mo.App.1975). Further, the court may reject the testimony of the mov-ant having a personal and scarcely impartial interest in the outcome of the proceeding, even though uncontradicted by the State. Thurman v. State, 523 S.W.2d 521 (Mo.App.1975); Cooper v. State, 520 S.W.2d 666 (Mo.App.1975). In considering mov-ant’s good faith and credibility, the court may consider that there has been, as in this case, a significant passage of time and death of one of the principals before effort was made to seek relief under Rule 27.26. State v. Hurtt, 509 S.W.2d 14 (Mo.1974); Thurman v. State, supra; Hamel v. State, 508 S.W.2d 288 (Mo.App.1974); Rhoades v. State, 504 S.W.2d 291 (Mo.App.1973). And even though the constitutional right of appeal is here involved, it is for the trial court to determine whether movant had knowingly and intelligently decided to waive his right to appeal after discussing the matter with his attorney. Burnside v. State, 473 S.W.2d 697 (Mo.1971). Here, the record perspicuously reveals that the State agreed to a reduction in sentence because of mov-ant’s agreement to waive right of appeal; that movant had discussed the reduction of sentence secured by his attorney and acknowledged that it was “not too bad;” that the trial court clearly pointed out that there was a reduction in sentence not only from a 30 to 25 year term but also to run concurrently with two nonrelated sentences which could have been consecutively served. We have no reason to disagree with the trial court’s findings that movant knowingly and intelligently waived his right of appeal for a lesser imprisonment sentence.

Movant relies on Rodriquez v. U. S. 395 U.S. 327, 89 S.Ct. 1715, 23 L.Ed.2d 340 (1969), which is not felicitous here, for in Rodriquez, the evidence was palpable that there was a deprivation of right of appeal. Not so in this case, as there is ample support for finding that movant intelligently waived his right of appeal for gain.

Movant also argues that his original conviction was based on prejudicial hearsay testimony, but there is no need for us to investigate the circumstances of this allegation. Even if the State made improper reference to hearsay, such would be trial error to have been argued on appeal. Improper reference to hearsay testimony is analogous to improper admission of evidence, which is trial error, Agee v. State, 512 S.W.2d 401 (Mo.App.1974), and mere trial errors are not cognizable in a 27.26 proceeding. Lee v. State, 526 S.W.2d 329 (Mo.App.1975); Jewell v. State, 515 S.W.2d 806 (Mo.App.1974); McCrary v. State, 529 S.W.2d 467 (Mo.App.1975). Further, a trial error cannot be brought within the scope of Rule 27.26 by alleging that an unfair trial resulted or that constitutional rights were thereby affected. O’Neal v. State, 486 S.W.2d 206 (Mo.1972); Agee v. State, supra.

Although movant is precluded by this decision from raising the prejudicial hearsay argument since appeal was waived, movant cannot complain or be heard on alleged trial errors affecting his constitutional rights where right to appeal, as here, has specifically been waived. “[0]ne may effectively waive a hearing on a constitutional question so that it may not be heard in a proceeding under Rule 27.26, even though that question has not been ruled upon ... on direct appeal . . ..” Nickens v. State, 506 S.W.2d 381, 386 (Mo.1974).

The order denying movant’s motion to vacate sentence is affirmed.

SIMEONE, P. J., and McMILLIAN, J., concur.

      . Mr. Hough and movant both appeared before St. Louis circuit Judge Scott on the motion to reduce sentence, and at the time that Judge Scott announced that he was sustaining movant’s motion to reduce sentence, movant, in direct response to a question asked by Judge Scott, acknowledged that there was no reason why the sentence providing for reduction of sentence should not be passed on. Judge Scott also ruled on this motion of movant for Rule 27.26 relief.

      » Mr. Hough died in 1966; movant filed his Rule 27.26 motion on September 17, 1971.


text:
    NU-WAY SERVICES, INC., Plaintiff-Respondent, v. MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION, Defendant-Appellant.
    No. 36242.
    Missouri Court of Appeals, St. Louis District, Division Three.
    Dec. 2, 1975.

      Thompson & Mitchell, W. David Wells, Charles A. Newman, Donald B. Dorwart, St. Louis, for defendant-appellant.
    Leadlove & Byrne, James M. Byrne, Steven T. Biesanz, St. Louis, for plaintiff-respondent.
   GUNN, Judge.

Plaintiff-respondent Nu-Way Services, Inc. (Nu-Way) sued defendant-appellant Mercantile Trust Company National Association (Mercantile) to recover charges against Nu-Way’s account made by Mercantile on 43 forged and six altered cheeks. The jury returned a verdict for $7,903.29 in favor of Nu-Way, and on Mercantile’s motion for new trial, the trial court granted a new trial as to damages only. Mercantile has appealed alleging: 1) that under § 400.-4-406(3) of the Uniform Commercial Code, Nu-Way failed to establish lack of ordinary care on the part of Mercantile in paying on the forged and altered checks; 2) that the trial court erred in limiting a new trial to the issue of damages only. For the reasons which follow, we find that Nu-Way is entitled to recover on the altered checks but not on the forgeries. We therefore reverse and remand.

Nu-Way, a truck repair company, maintained a checking account with Mercantile. The signature card for Nu-Way’s president, Mariano Costello, was kept on file by the bank. Each month, Nu-Way wrote approximately 175 checks on its account, and Mercantile sent Nu-Way a monthly statement indicating the fluctuating checking account balance as each check was charged against the account with the cancelled checks being returned with the statement.

In an altruistic gesture designed for the rehabilitation of a former convict, Mr. Costello hired James Ussery as night manager for Nu-Way. Part of Ussery’s duties entailed obtaining automotive parts from parts companies. Mr. Costello would on occasion date and sign checks and fill in the name of the payee (always a parts company) for payment of parts used by Nu-Way, and the amount of the check would be left blank for Ussery to fill in when the cost of the parts was determined at the time they were picked up by him. On seven such checks which Mr. Costello had signed, Uss-ery made alterations to substitute his name as payee and cashed the checks for his own benefit. Ussery also had unauthorized access to Nu-Way’s checkbook and removed a substantial number of blank checks therefrom. Ussery made use of 43 of the blank checks by forging Mr. Costello’s signature on them after making himself the payee. The dates on the altered and forged checks were from July 29, 1971 to January 13, 1972.

Each of the forged checks was returned to Nu-Way by Mercantile along with an itemized statemei ; of account at the end of each month the checks were cashed. And each month Mr. Costello would have a company clerk compare the amount of the checks with the statements. At Mr. Costello’s direction the bookkeeping employee merely compared the amount of the checks with the statements looking only for mathematical computation errors by Mercantile. None of the Nu-Way employees, including Mr. Costello, examined any of the checks for forgeries or alterations nor compared the checks with the company checkbook. Ultimately, one of Nu-Way’s vendors called Mr. Costello’s attention to a check made payable to Ussery, and an investigation revealed the alterations and forgeries. Mercantile was notified of the irregularities and subsequently reimbursed Nu-Way for $231 to cover the amount of the first check altered by Ussery. Nu-Way brought suit to recover the amount paid out on its checking account on the forged and altered checks. The jury awarded Nu-Way $1,438.29 on the altered checks, which included the full amount of the altered checks, less the $231 previously paid by Mercantile, and $6,565 on the forgeries, although the total sum of the 43 forged checks was $10,716.66. The trial court ordered a new trial on the issue of damages only having found that it erroneously omitted a portion of MAI 4.01 in the given instruction. Mercantile’s two grounds of appeal are that under § 400.4-406 of the Uniform Commercial Code there should have been no recovery against it and that the trial court was in error in limiting the new trial on the issue of damages only.

In its argument that it has no liability to Nu-Way for the payments made on the altered and forged checks, Mercantile relies on § 400.4-406, which in pertinent part provides:

“(1) When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request or instructions of its customer or otherwise in a reasonable manner makes the statement and items available to the customer, the customer must exercise reasonable care and promptness to examine the statement and items to discover his unauthorized signature or any alteration on an item and must notify the bank promptly after discovery thereof.
“(2) If the bank establishes that the customer failed with respect to an item to comply with the duties imposed on the customer by subsection (1) the customer is precluded from asserting against the bank
(a) his unauthorized signature or any alteration on the item if the bank also establishes that it suffered a loss by reason of such failure; and
(b) an unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank after the first item and statement was available to the customer for a reasonable period not exceeding fourteen calendar days and before the bank receives notification from the customer of any such unauthorized signature or alteration.
“(3) The preclusion under subsection (2) does not apply if the customer establishes lack of ordinary care on the part of the bank in paying the items.”

Nu-Way concedes that under the facts of this case that § 400.4-406(3) places the burden upon it of proving that Mercantile lacked ordinary care in paying on the altered and forged checks. We find as a matter of law that Nu-Way failed in this case in its proof of lack of ordinary care by Mercantile as to the 43 forged checks but that there was sufficient evidence to uphold the jury verdict of $1,438.29 as to the alterations.

The paucity of Missouri legal rubric touching the issues confronting us in this case requires our reference to decisions in other jurisdictions for guidance. We first consider the question of Mercantile’s liability on the 43 forged checks. The fundamental rule in the Uniform Commercial Code regarding unauthorized signatures is stated in § 400.3-404(1) as follows:

“Any unauthorized signature is wholly inoperative as that of the person whose name is signed unless he ratifies it or is precluded from denying it . . . .”

It is accepted that Ussery’s forgeries of Mr. Costello’s signature were unauthorized and would therefore be “wholly inoperative” as to Nu-Way unless Nu-Way is “precluded from denying it.” § 400.4-406 relates directly to the relationship between depositor and bank and affords an apt guide for determining whether a basis exists for precluding Nu-Way’s denial of the signatures. Hardex-Steubenville Corp. v. Western Pennsylvania National Bank, 446 Pa. 446, 285 A.2d 874, 877 (1971).

Initially, we find that Nu-Way failed to meet its obligation under subpara-graph (1) of § 400.4-406, in that it did not “exercise reasonable care and promptness to examine the statement and items to discover [the] unauthorized signature on an item.” In accordance with Mr. Costello’s instructions, the Nu-Way clerk in charge of examining the bank statements examined Mercantile’s statements to check the accuracy of the mathematics. The “items” — the cancelled checks — were not examined at all. Mr. Costello readily admitted that the checks were not scrutinized for forgeries as required by statute nor was reasonable notice given to Mercantile of any wrongdoing after the first check and statement was made available to Nu-Way within the meaning of § 400.4-406(2)(b). Hence, Nu-Way failed in its duties to discover and report the forgeries under § 400.-4-406(2) and is precluded from recovering against Mercantile unless it can establish under § 400.4-406(3) lack of ordinary care on the part of Mercantile in paying the forgeries.

Under § 400.4-406(3) the burden of establishing Mercantile’s lack of ordinary care rests staunchly on Nu-Way. Westport Bank & Trust Co. v. Lodge, 164 Conn. 604, 325 A.2d 222, 227 (1973); Huber Glass Co. v. First National Bank of Kenosha, 29 Wis.2d 106, 138 N.W.2d 157, 160 (1965). Thus, we examine the evidence to determine whether it was sufficient to present a jury question if there was a lack of ordinary care exercised by Mercantile in paying on the forgeries. The method used by Mercantile for detecting forgeries and alterations was to assign a bank clerk to examine the checks of each of Mercantile’s accounts, and the examination was not desultorily performed. The clerk assigned to Nu-Way’s account was responsible for approximately 200 accounts and examined all the checks from each account daily. The total number of checks for all accounts examined by the bank clerk totaled between 900-1,000 daily, except on Tuesdays or when another clerk was absent, causing the work load to be substantially increased. Two supervisors were present when the clerk reviewed the checks, but only the clerk in charge of the particular account would actually check for forgeries. Each clerk, including the clerk in charge of the Nu-Way account, had possession of the authorized signature cards for the accounts for which the clerk was responsible and would examine each check on each account. The clerk would look at the signature card while examining the checks until familiarity with the authorized signature was achieved, then the comparison of the signatures on the checks was made based on the memorization of the signature on the signature card. Each clerk, including the Nu-Way clerk, was given a two week training session. Nu-Way’s clerk followed the regular procedure and compared Mr. Costello’s signature on the forged checks with her memory of Mr. Costello’s signature on the authorized signature card. The clerk was unable to detect the forgeries.

After Mr. Costello notified Mercantile that there had been payments made on some forgeries and alterations, the clerk responsible for examining Nu-Way’s account and her two supervisors made comparison between the authorized signature card and all Nu-Way’s checks for the period covered by the forgeries and alterations and were unable to differentiate between the forgeries and the authorized signature. The forgeries were sufficiently adroit so as to escape detection even under the supervisors’ scrutiny. However, the clerk was reprimanded for allowing the alterations to pass, as erasures appearing on the altered checks were perspicuous.

The only testimony presented by Nu-Way regarding any method used for determining forgeries was the above described method utilized by Mercantile. Additionally, Mercantile presented uncontradicted evidence from one of its officers that the forgery detection method applied by Mercantile— specifically the memory of the signature card method — was substantially the same as employed by other commercial banks in the St. Louis area. An operations officer of another St. Louis bank testified that the method used by Mercantile to detect forgeries by memorization of the authorized signature card was the same as utilized by his bank. Therefore, the only evidence before the jury and this court of any forgery detection method was that applied by Mercantile. And the issue is whether a jury question was presented that such procedure did not constitute ordinary care under § 400.4-406(3). We find in this case that there was no such jury question presented.

There is a seeming conflict of decisions in jurisdictions ruling on the use of the memory of signature cards for forgery detection purposes. In Jackson v. First National Bank of Memphis, Inc., 55 Tenn.App. 545, 403 S.W.2d 109 (1966), a bank was held negligent on a forgery for its failure to compare all checks with the signature cards on file. It was noted, however, that such continuous use of signature cards might be impractical but that a bank had certain obligations to protect its depositors from forgeries. But in the Jackson case there was no mention of any surrogate method for examining signatures, where here the means used by Mercantile to search for forgeries was related in elaborate detail. The means employed by Mercantile provided for a clerk- familiar with Mr. Costello’s signature to examine each of Nu-Way’s checks. Also, in Jackson, the court noted that an unfaithful servant of his church— the financial secretary — had been making personal use of church checks; that such personal use was palpable and should have been discovered by the bank, in that the perfidious church official had been cashing the checks at the local dog track. Such obvious illicit conduct was not present here for Mercantile to notice.

Nu-Way also relies on Exchange Bank & Trust Co. v. Kidwell Constr. Co., 463 S.W.2d 465 (Tex.Civ.App.1971), aff’d. 472 S.W.2d 117 (Tex.1971), which held a bank liable for failing to detect forgeries even though the bank’s customer did not check its bank statement. But the Exchange Bank case is readily distinguishable, for the forgeries were crude, there was no mention of any substitute detection system, and there was evidence that the volume of checks handled was too great to allow each signature to be checked. Mercantile did examine each of Nu-Way’s checks, and the forgeries were so artfully accomplished that even the clerk’s supervisors were unable to detect them.

There is also sound authority for holding that the system utilized by Mercantile for detecting unauthorized signatures establishes ordinary care on the part of a bank. Terry v. Puget Sound National Bank, 80 Wash.2d 157, 492 P.2d 534 (1972); Huber Glass Co. v. First National Bank of Keno-sha, supra. In the Huber Glass Co. case, it was found that the system utilized by the defendant bank (similar to that applied by Mercantile here) was a reasonable means of inspecting and processing checks and that the bank had met the more strict pre-Uni-form Commercial Code burden of proving itself free of negligence by employing such a method as contrasted with current § 400.-4-406(3) requirement placing the burden on the depositor to prove the bank’s negligence.

We have only before us evidence of the method applied by Mercantile in processing Nu-Way’s checks. There was no evidence presented by Nu-Way of any other methods employed by other banking institutions. On the record which we review we cannot rule that Mercantile lacked ordinary care in processing Nu-Way’s checks. § 400.4-103(3) offers the following partial definition of ordinary care:

“Action or nonaction approved by this article or pursuant to Federal Reserve regulations or operating letters constitutes the exercise of ordinary care and, in the absence of special instructions, action or nonaction consistent with clearing house rules and the like or with a general banking usage not disapproved by this article, prima facie constitutes the exercise of ordinary care.” (emphasis added)

The record contains no references to Federal Reserve regulation or clearing house rules, and the only evidence of “general banking usage” came from Mercantile which described the system administered by it as being in general banking usage. Further, an operating officer of another area bank described his bank’s check processing system as the same employed by Mercantile. Nu-Way presented no evidence to refute Mercantile’s evidence that the check processing method followed by Mercantile was consistent with general banking usage. By Nu-Way’s failure to review its own bank statements when supplied by Mercantile, it had the burden under § 400.4-406(3) to establish lack of ordinary care by Mercantile. On the record before us we conclude that Nu-Way failed to meet its burden as to the 43 forged checks.

The matter of the altered checks presents a different question. Whereas the forgeries were skillfully written, the alterations were maladroitly performed and the changes so egregious as to call for the re-proval of the bank clerk. The alterations should have been readily discovered, and the bank clerk ignored specific instructions to withhold payment on altered checks. Thus, there was substantial evidence to uphold the jury verdict of $1,438.29 on the alterations. See Basch v. Bank of America National Trust & Savings Ass’n., 22 Cal.2d 316, 139 P.2d 1 (1943).

The second major allegation of error alleged by Mercantile relates to the question of the new trial granted on the issue of damages only. The new trial was ordered for the reason that a portion of MAI 4.01 as submitted to the jury was erroneously omitted. MAI 4.01 reads as follows, but the underlined portion was omitted:

“If you find the issues in favor of the plaintiff, then you must award the plaintiff such sum as you believe will fairly and justly compensate the plaintiff for any damages you believe he sustained as a direct result of the occurrence.”

Since we have determined as a matter of law that the recovery against Mercantile on the 43 forged checks is precluded by § 400.-4-406, we need only consider the effect of the error in the instruction as to the altered checks. Under Rule 70.01(b), MAI 4.01 should have been given in its entirety to the exclusion of any other instruction. Under Rule 70.01(c), the instruction as given was erroneous, but its prejudicial effect is to be judicially determined. Jefferson County Bank & Trust Co. v. Dennis, 523 S.W.2d 165 (Mo.App.1975). We find that there was no prejudice in giving the incomplete instruction in this instance. The inelegantly altered checks totaled $1,438.29, and the jury verdict was in that exact amount; indeed, that is the only amount the jury could have returned for that was the face amount of the checks altered. There was no room for jury conjecture or speculation as to the damages on the alterations, and even Mercantile concedes that the damages on the altered checks involved only a mathematical computation by referring to the checks themselves. Therefore, a new trial on this point would be unavailing. Collier v. Roth, 515 S.W.2d 829 (Mo.App.1974); La Plante v. E. L. DuPont DeNemours & Co., 346 S.W.2d 231, 244 (Mo.App.1961). In finding no prejudicial error in the instruction, we do not palliate or deviate from the application of the rule that MAI instructions should be precisely followed — only that here there was no prejudice to Mercantile by the omission. We abjure not the principles indited in Brown v. St. Louis Public Service Co., 421 S.W.2d 255 (Mo. banc 1967), and Offenbacker v. Sodowsky, 499 S.W.2d 421 (Mo.1973), but acknowledge that we are thereby bound.

The judgment of the trial court in ordering a new trial as to damages only is reversed and the cause remanded with directions to enter judgment in favor of Nu-Way for $1,438.29 on the altered checks and in favor of Mercantile and against Nu-Way on the 43 forged checks.

SIMEONE, P. J., and McMILLIAN, J., concur.

      . Statutory references are to RSMo. 1969.

      . § 400.3-406 also precludes denial of an unauthorized signature where a person’s negligence has substantially contributed to an alteration or forgery, but we believe the provisions of § 400.3-406 do not apply to these facts.

      . Huber Glass Co. v. First National Bank of Kenosha was decided on the basis of pre-Uniform Commercial Code law which required that a bank exercise “due diligence.” The court noted that the Code specifically placed the burden of proving negligence on the depositor.

      . In the Exchange Bank case, as well as In the Jackson case, it was the perpetrator of the fraud who was in charge of examining the bank statement, who would quite logically conceal his misdeeds, and who was scarcely impartial in his examination of the bank statement. Not so here.

      . See also State ex rel. State Highway Commission v. Beaty, 505 S.W.2d 147, 154 (Mo.App.1974).

      . Brown v. St. Louis Public Service Company, supra, and its progeny hold, of course, that “where there is deviation from an applicable MAI instruction which does not need modification under the facts in the particular case, prejudicial error will be presumed unless it is made perfectly clear by the proponent of the instruction that no prejudice could have resulted from such de- ■ viation.” 421 S.W.2d at 259.


author: KELLY, Judge.

text:
    STATE of Missouri, Plaintiff-Respondent, v. Michael James SANDERS, Defendant-Appellant.
    No. 35734.
    Missouri Court of Appeals, St. Louis District, Division Two.
    Dec. 2, 1975.

      Charles D. Kitchin, Public Defender, James C. Jones, St. Louis, Christelle Adel-man-Adler, Asst. Public Defender, for defendant-appellant.
    John C. Danforth, Atty. Gen., Preston Dean, Asst. Atty. Gen., Jefferson City, J. Brendan Ryan, Circuit Atty., John D. Chancellor, Asst. Circuit Atty., St. Louis, for plaintiff-respondent.
   KELLY, Judge.

Michael James Sanders, defendant-appellant (hereinafter defendant) presents this appeal from a finding and judgment of the trial court in a jury-waived trial that he was guilty of carrying a concealed weapon, § 564.610 RSMo.1969, and imposition of sentence of three years in the custody of the Missouri Department of Corrections. We affirm.

Defendant’s sole contention on appeal is that the weapon in question was seized from his person as a result of an illegal search and that the trial court erred in failing to sustain his motion to suppress the gun on those grounds.

Prior to the commencement of trial on June 5, 1973, defendant filed a memorandum waiving his right to jury trial and requested a jury-waived trial. Both sides announced ready for trial and defense counsel requested that the case be heard subject to an oral motion to suppress the evidence “as unconstitutionally seized” and advised the trial court that he would supply the court with a “typed motion to suppress.” The trial court advised counsel to make his objection when the evidence was offered. The trial was commenced and since the defendant does not challenge the sufficiency of the evidence to support a conviction we set out a short statement of the facts adduced by the State’s evidence.

The State’s evidence was that on the early morning of December 23,1972, the St. Louis Police Department received a report that a suspicious person was in a Chinese restaurant located at 5514 Martin Luther King Drive in the City of St. Louis. Two police officers responded to the report and when they arrived on the scene they were met by an employee of the restaurant, one Anthony Woods, and a security guard, Walter Walker, on the sidewalk in front of the restaurant. These men informed the police officers that they had observed a man “hanging around” inside the restaurant for about an hour and that they had observed a chrome-plated revolver under this man’s coat. The two men pointed out the man, who was still in the restaurant, and the officers approached and advised him to put his hands in the air and face the wall. While the man stood in this position the two officers observed a chrome-plated revolver in a shoulder holster the man was wearing under his jacket. One of the police officers, Officer Hagedorn, reached under the man’s jacket and removed a .38 Smith & Wesson revolver, fully loaded, from the shoulder holster and thereupon placed the man under arrest for carrying a concealed weapon. Defendant was the man.

It was admitted by both officers who testified that the defendant was searched prior to the time he was placed under arrest and the reason he was searched was the information furnished them by the two employees of the restaurant that the defendant had a gun on his person concealed from view. When the State offered into evidence the gun, shells and shoulder holster, defendant’s counsel objected to their receipt in evidence on the grounds that the defendant’s constitutional rights had been violated. The thrust of defendant’s argument was that the search preceded the arrest and was therefore unreasonable. Defendant offered no evidence. The trial court took both the motion and the cause under submission, and without specifically ruling on defendant’s motion, found him guilty as charged of carrying a concealed weapon and assessed his punishment at three years in the custody of the Missouri Department of Corrections. Defendant’s counsel never filed the “typed motion to suppress” he had stated he would, but he did file a timely motion for new trial which was overruled, and the defendant was sentenced in accordance with the assessment of punishment previously announced by the trial court. This appeal followed.

In the brief filed in this court defendant in his Points Relied On presents the question of the reasonableness of the search and seizure on federal constitutional grounds only, i. e., that his Fourth Amendment rights were violated. The thrust of his argument is that the police officers had no search warrant and the facts of this case do not bring it within the exception carved out in Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968) and Adams v. Williams, 407 U.S. 143, 92 S.Ct. 1921, 32 L.Ed.2d 612 (1972); that therefore the search and seizure was illegal, his motion to suppress should have been sustained by the trial court, and the weapon seized from his person excluded from evidence at trial. He asks that we reverse his conviction and order him discharged.

The State relies on the same authorities cited by the defendant and argues that the facts of this case bring it within the holdings of both Terry and Adams, supra.

The holding of the Supreme Court in Terry v. Ohio, supra, was that a police officer who observes unusual conduct which leads him to reasonably conclude in the light of his experience that criminal activity may be afoot and that the persons with whom he is dealing may be armed and presently dangerous, and who, in the course of investigating this behavior identifies himself as a police officer and makes reasonable inquiries, and there is nothing in the initial stages of the encounter to dispel his reasonable fear for his own or others’ safety, is entitled for the protection of himself and others in the area to conduct a carefully limited search of the outer clothing of such persons in an attempt to discover weapons which might be used to assault him. A search under those circumstances was held to be a reasonable search under the Fourth Amendment, and any weapons seized held properly introduced into evidence against the person from whom the weapons were taken. The Court there refused to justify the search and seizure on the basis of “stop and frisk” theories, but did decide the case on the question whether, at that point, the police officer conducting the search had available at the moment of the seizure or the search “facts” which would warrant a man of reasonable caution in the belief that the action taken was appropriate. The case was decided on the need for a law enforcement officer to protect himself and other prospective victims of violence in situations where there may be a lack of probable cause for the arrest. The court, 392 U.S., l.c. 24, 88 S.Ct. at 1881, said:

“When an officer is justified in believing that the individual whose suspicious behavior he is investigating at close range is armed and presently dangerous to the officer or to others, it would appear to be clearly unreasonable to deny the officer the power to take necessary measures to determine whether the person is in fact carrying a weapon and to neutralize the threat of physical harm.”

The search in such circumstances is not an unbridled one, but has its limitations. As the court in Terry stated, it is limited to a search which is necessary for the discovery of weapons which might be used to harm the officer or others nearby and may realistically be characterized as something less than a “full” search, even though it remains a serious intrusion.

Adams v. Williams, supra, was a search and seizure prior to arrest made by a Bridgeport, Connecticut police officer who, while alone on patrol in a high crime area of that city at 2:15 a. m. was informed that Williams was seated in a nearby vehicle carrying narcotics and with a gun at his waist. The police officer went to the scene and approached the vehicle to investigate the informant’s report. He tapped on the car window and asked the occupant to open the door. Williams was the occupant and instead of opening the door, lowered the window in the car door. The police officer reached into the car and removed a fully loaded revolver from Williams’ waistband, precisely in the place indicated by the informant. Williams was then placed under arrest and a search of both his person and the car followed bringing to light some heroin on Williams’ person and in the car, along with a machete and another revolver. Seizure of the gun from Williams’ waistband was held not an unreasonable search and seizure violative of his Fourth Amendment rights because it came within the limitations set out in Terry as a weapon search for the protection of the life of the officer.

One problem confronting the Adams court was that citizens of the State of Connecticut are permitted to carry weapons, concealed or otherwise, at will so long as they possess a permit. Conn.Gen.Stat.Rev. §§ 29-35, 29-38. The legislature of this State has outlawed the carrying of a concealed weapon on or about the person, § 564.610 RSMo.1969. Our Supreme Court has held that where a report was received by a police officer over a radio from a police dispatcher than one hour previously a bus driver had seen the occupants of a blue-painted Volkswagen, bearing a specified license number, flourishing a weapon at a place in the immediate vicinity of where the arrest was subsequently affected, constituted probable cause for the arresting officer who had heard the radio dispatch to make an arrest on the grounds that one or more of the occupants of the car had committed or were committing an offense and to conduct a search of the person of the defendant and her purse wherein was found the weapon forming the basis for the concealed weapons charge of which she was convicted. State v. Perry, Mo., 499 S.W.2d 473, 475[4] (1973). Under the holding in Perry the police officers here had even stronger bases for reason to believe the defendant was committing a crime, was armed and dangerous. Two persons who actually saw the defendant with a weapon concealed under his coat and who were employees of the restaurant where he was “hanging around” had notified the St. Louis Metropolitan Police Department that a “suspicious person” was in the restaurant. A radio dispatch was put out over the air directing the arresting officers to the scene, and upon their arrival they found the two employees standing on the sidewalk in front of the restaurant. And they again reported to the officers what they had seen. The defendant was pointed out to the police officers who thereupon entered the restaurant and proceeded to disarm the defendant. We conclude that this was a proper exercise of the rights to protection afforded police officers in the course of investigations by Terry and Adams, and the search and seizure of the gun, bullets and shoulder holster here was not violative of defendant’s Fourth Amendment rights.

We have examined those portions of the record as required by Rule 28.02 and find them to be sufficient.

The conviction of defendant is affirmed.

CLEMENS, P. J., and STEWART, J., concur.


author: DOWD, Judge.

text:
    Stanley WURTZ and Ula Wurtz, Plaintiffs-Respondents, v. DANIEL HAMM DRAYAGE COMPANY, a corporation, and Daniel Hamm, Defendants-Appellants.
    No. 36584.
    Missouri Court of Appeals, St. Louis District, Division One.
    Dec. 2, 1975.

      Harry Gershenson, St. Louis, for plaintiffs-respondents.
    Thompson & Mitchell, Edwin D. Akers, J., St. Louis, for defendants-appellants.
   DOWD, Judge.

Defendants appeal from the award of attorney fees in favor of plaintiffs.

On December 23, 1972, the defendants executed and delivered to plaintiffs a promissory note for the sum of $90,000. The note was due thirty days after date, and was payable to the order of the plaintiffs. The note bore an interest rate of eight percent per year after maturity. The note also provided that the makers agreed to pay “all costs, expenses and fees of collection (including fees for legal services or advice) in case payment is not made at maturity.”

On May 31, 1974, after a lawsuit, deposition, and interrogatories, the defendants paid plaintiffs a total of $97,938 which represented the full maturity value of the note plus interest in the amount of $7,938. Plaintiffs’ counsel, Mr. Harry Gershenson, Sr., also received check for $1,000, payable to counsel and client, which was stipulated to be applied on whatever attorney fees the circuit court deemed proper under the provisions of the note for the services rendered by counsel. After a hearing the circuit court awarded attorney fees of $12,500.

Counsel for plaintiffs testified at the hearing. Mr. Gershenson has been engaged in civil practice for over fifty years, and has a distinguished record of service in the American Bar Association, the Missouri Bar, and the Bar Association of Metropolitan St. Louis. Counsel recited the following chronological record of his work in this case, from which we omit mention of numerous correspondence, by phone and by mail, and meetings between counsel and his clients, the defendants, defendants’ counsel, and interested third parties.

Counsel was retained in this matter on May 23, 1973. He immediately contacted the Chambers Land Company, which had executed a collateral deed of trust to secure the Hamm deed of trust. After weeks of unsuccessful efforts to secure payment of the note, counsel filed a petition in St. Louis Circuit Court on July 10, 1973; the petition sought the face amount of the note, accrued interest, and “reasonable attorney’s fees.” On September 7, 1973, after receiving the defendants’ answers, counsel prepared interrogatories and sent them to opposing counsel. When he had not received answers to the interrogatories by November 13, 1973, counsel prepared a Motion to Compel Answers to Interrogatories.

On January 18, 1974, counsel deposed defendant Daniel Hamm and then met with opposing counsel relative to payment of the obligation.

April and May of 1974 saw counsel become involved in several complicated transactions. The Ace Doran Hauling and Rigging Company was attempting to acquire defendant Daniel Hamm Drayage Company. Bob Doran, in order to arrange necessary financing to pay off plaintiffs’ note and some tax obligations, wanted Hamm Drayage Company to obtain a release of the two deeds of trust, the first being held by the Bank of St. Louis and by the Chambers Land Company and the second being held by plaintiffs to secure their note. The Bank of St. Louis, however, would release its first deed of trust only if plaintiffs put up collateral to protect them.

After working with opposing counsel and the Bank of St. Louis, counsel met with defendants and other interested parties on May 31, 1974, to close the matter and receive payment of the note and accrued interest.

Counsel’s professional opinion of the customary charges of lawyers in the community for the legal work performed here was a minimum of fifteen percent of the full amount collected. His charges for other kinds of legal work is $75.00 per hour. On this case his records showed about twenty hours of work, but he did not record all his hours of work.

David Strauss, a lawyer for forty-seven years and a specialist in the field of creditor’s rights, had listened to counsel’s recitation of his services. For the same work Strauss’s office would have charged $12,-846, plus an additional $6,500 if suit were filed for a total fee of $19,346. Mr. Strauss stated that $19,346 was a reasonable fee for the legal work performed here and that this amount is the standard and accepted fee charged by lawyers in the commercial practice in all of the large areas in the country. Mr. Strauss further testified that this case was not a simple collection matter as it is normally understood by lawyers. The defendants presented no evidence.

Defendants’ contention on appeal is that the amount of attorney fees awarded is so grossly excessive as to constitute an abuse of judicial discretion.

As always on appellate review of court-tried cases, we review the ease upon both the law and the evidence, giving due regard to the opportunity of the trial court to have judged the credibility of the witnesses. Rule 73.01(3).

Defendants concentrate on the amount of the award in relation to the time counsel spent to perform his services. But the amount of time spent on a case is only one element to consider and is ordinarily of minor importance. Scott v. Home Mutual Telephone Co., 510 S.W.2d 793 (Mo.App.1974).

In a very recent case the Missouri Supreme Court has outlined the factors to be considered in determining the reasonableness of attorney fees. First National Bank of Kansas City v. Danforth, 523 S.W.2d 808, 822-23 (Mo.1975), cert. denied, 421 U.S. 992, 95 S.Ct. 1999, 44 L.Ed.2d 483; & 421 U.S. 1016, 95 S.Ct. 2424, 44 L.Ed.2d 685 (1975). These factors are identical to those listed in the Missouri Code of Professional Responsibility, Rule 4, DR2-106:

“(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.
(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.
(3) The fee customarily charged in the [area] for similar legal services.
(4) The amount involved and the results obtained.
(5) The time limitations imposed by the client or by the circumstances.
(6) The nature and length of the professional relationship with the client.
(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.
(8) Whether the fee is fixed or contingent.”

There is ample evidence in the record to enable this court to take the listed factors into consideration as guides in determining the reasonableness of the fee.

Counsel is a distinguished and veteran attorney who has had experience in this field of law. A considerable sum of money was involved, $97,938, and counsel succeeded in collecting the entire amount of the note ($90,000) plus interest in the amount of $7,938. Both counsel and the attorney who served as his expert witness testified that the requested fee was comparable to the fees charged by lawyers in collection work both in this area and in urban commercial centers across the nation.

Counsel worked for over a year to obtain the money owed his client. The legal work involved ranged from a court suit to telephone calls. This was not a normal collection case. Here counsel’s efforts to collect the sum were complicated by a number of factors: takeover bids, releases of first and second deeds of trusts, financing the buying of a business, seeking relief from tax obligations. To secure payment of the note for his client, counsel had to negotiate not only with defendants and their counsel, but also with the Bank of St. Louis.

The determination of reasonable attorney fees is a matter within the sound discretion of the trial court. Billinger v. Jost, 510 S.W.2d 57 (Mo.App.1974). We find no abuse of discretion. The award was made by an experienced trial judge. The evidence in this case supports the amount of attorney fees awarded plaintiff by the trial court.

Affirmed.

WEIER, P. J., and RENDLEN, J., concur.


author: BROCK, Justice.

text:
    AZTEC PROPERTIES, INC., Appellant, v. UNION PLANTERS NATIONAL BANK OF MEMPHIS, Appellee.
    Supreme Court of Tennessee.
    Oct. 27, 1975.

      Larry D. Austin, Pete Sisson, Sisson, McWhirter, Lowrance & Austin, Memphis, for appellant.
    Edward P. Russell, Jr., Robert M. Johnson, Canada, Russell & Turner, Memphis, for appellee.
   OPINION

BROCK, Justice.

This is an action to recover on a promissory note. The facts are stipulated.

On July 12, 1974, Aztec Properties, Inc., executed a promissory note payable to Union Planters National Bank of Memphis in exchange for a $50,000.00 loan. The prom-isor agreed to pay the promisee $50,000.00, “in constant United States Dollars adjusted for inflation (deflation)” with interest at ten percent per annum. The adjusted principal was to be calculated according to a formula contained in the note, to wit:

“Amount of principal due shall equal the amount of original principal multiplied by the consumer price index adjustment factor. This adjustment factor shall be computed by dividing the consumer price index at maturity by the consumer price index on date of borrowing. Said consumer price index numbers shall be for the most recent month available preceding borrowing and maturity dates. This consumer price index shall be the index not seasonably adjusted for all items as reported by the United States Department of Labor.”

On maturity of the note Aztec Properties repaid to the bank $50,000.00, with discounted interest at the rate 9.875 percent, in the amount of $419.35 (which is an effective yield of 9.96% per annum), but the borrower refused to pay the additional “indexed principal” of $500.00, based on the inflation adjustment formula.

Whereupon, the bank sued Aztec Properties in Chancery Court for the “indexed principal” together with interest from maturity at the rate of ten percent per annum. Both parties filed Motions for Summary Judgment, the Chancellor holding in favor of the bank. Aztec Properties now appeals to this Court alleging that the Chancellor erred in granting the bank’s Motion and in denying its own.

The first issue to be resolved is whether this note is usurious, i. e., whether it charges interest in excess of the legal rate of ten percent per annum. T.C.A. § 47-14-104. A defendant sued for money may avoid the excess over legal interest, by a plea setting forth the amount of the usury. T.C.A. § 47 — 14—112. Interest includes all compensation for the use of money. “Any payment to the lender in addition to the rate of interest legally permissible, whether called by the name of bonus or commission or by any other name, is usurious.” (Emphasis added.) Restatement, Contracts, § 526. Compensation is determined not by what the borrower pays but by what the lender receives; thus, if the borrower is the beneficiary of a payment it will not be interest. Silver Homes, Inc. v. Marx & Bensdorf, Inc., 206 Tenn. 361, 333 S.W.2d 810 (1960). Nor are expenses incident to making a loan and furnishing the lender with satisfactory security for its repayment compensation or interest. Silver Homes, Inc. v. Marx & Bensdorf, Inc., supra.

The note executed by Aztec Properties bears ten percent interest on its face; that interest has been paid and is not in issue here. The borrower claims that the “indexed principal” constitutes additional interest. The bank argues that the “indexed principal” equals the difference in value between the principal lent and returned, and is not extra compensation.

There being no Tennessee case law directly on point, both parties attempt to analogize the long series of “exchange of money” cases.

One of the earliest of these cases was Lawrence v. Morrison, 9 Tenn. 444 (1830). In that case the borrower gave a note to Sullivan for $607.87½ in Tennessee bank notes, payable on December 25,1825. Sullivan assigned the note to Lawrence. On December 24,1825, the borrower executed a second note in exchange for the first note for the same sum payable in gold and silver on August 1, 1825 [sic]. After the second note fell due a suit was instituted to which the borrower plead usury averring that that $607.00 in bank notes was worth only $456.00 specie. The Court set guidelines for determining usury:

“A jury in trying the case before us would . . . first enquire what was the value of the bank notes on the day the second note was given. If the sum found, compared with the amount of the note given for specie, fell so far short as to show that more than the rate of six per cent, per annum had been reserved, they might then infer that the whole amount was a device to cover usury. In short, it would be for the jury to ascertain whether under all the circumstances, it was intended by the parties under color of supposing depreciated paper equal to specie, to cover a corrupt bargain against the statutes concerning usury.” Id. at 446.

In Weatherhead v. Boyers, 15 Tenn. 545 (1835), Weatherhead borrowed a sum in Tennessee bank notes from Boyers and agreed to repay an equal nominal amount in specie or notes on the Bank of the United States. The latter were equal to gold or silver while the former were greatly under par. The Court looked beyond the devices and disguises of the parties to the substance of the transaction and found usury.

The Court reached the opposite result in Turney v. State, 24 Tenn. 407 (1844). In that case a contractor with the post office had an arrangement with the bank whereby he deposited eastern funds and gold and silver and received Tennessee bank notes of equal face value in exchange. The later were only worth 92-93% of the former. The contractor also had the privilege of borrowing additional money from the bank up to twice the amount of his funds. Although the difference in value between the eastern funds and specie, on one hand, and the Tennessee bank notes, on the other, exceeded the legal maximum interest at that time (6%), the Court found no usury because the parties had no corrupt intentions. It pointed out that the notes received by the contractor “were notes of specie-paying banks, as sound or available, perhaps, to him and to others, in ordinary transactions, as eastern funds.” Id. at 409.

The Court in Turney v. State, supra, relied heavily upon United States v. Waggener, 9 Pet. 378, 9 L.Ed. 163 (1835). In Wag-goner, the borrower executed a promissory note for $5,000.00 and 6% interest per an-num payable to the Bank of the United States in exchange for which he received $5,000.00 in Kentucky bank notes. At the time of the loan the Kentucky bank notes were circulating at a rate of thirty-three to forty percent depreciation below their nominal amounts. In response to the claim of usury the United States Supreme Court stated, “to constitute usury within the prohibitions of the law, there must be an intention knowingly to contract for or to take usurious interest; for if neither party intend it, but act bona fide and innocently, the law will not infer a corrupt agreement.” Id. at 171. The Court concluded that the loan in Waggoner was not per se illegal because the Kentucky bank notes might have been worth more to the parties than their marketable value at the time of the loan. If the parties bona fide estimate equivalent values in the credits or commodities they are exchanging, there is no usury, said the Court.

In Hamilton v. Moore, 26 Tenn. 35 (1846), the complainant borrowed a sum of money in Alabama bank notes and sometime after-wards bound himself by a bill single to repay the face value of the loan in Tennessee bank notes. He later claimed that the bill single was usurious because Alabama bank notes were worth less than those of Tennessee. The parties agreed that they did not intend to commit usury and that the borrower said at the time that Alabama notes would be as valuable to him as Tennessee money. The Court relying on Tur-ney v. State, supra, found no usury. It stated that “usury is not an inference of law, to be drawn from the mere inequality of value between the currency loaned and that stipulated to be paid for it, but, on the contrary, is a question of intention, to be made out by the proof of facts.” Id. at 36.

In Finley v. McCormick, 53 Tenn. 392 (1871), the complainant lent the borrower $200.00 in gold, $150.00 in silver, and $200.00 in greenbacks or United States currency, and the latter agreed to pay back the gold and silver or to pay $1.50 for every dollar in gold, and the difference in value of silver. The borrower argued that this was usurious. The Court concluded that it could “not judicially know the value of ‘greenbacks,’ so called, and for ought that appears on the face of the bill, the parties may have fairly estimated the difference in value be- ■ tween them and gold and silver, and the contract is, prima facie, lawful." Id. at 394.

Finally in In re Mansfield Steel Corporation, 30 F.2d 832 (E.D.Mich.1929), a Canadian resident lent a Michigan corporation $88,000.00, primarily in Canadian money. The corporation in exchange executed a promissory note for that amount in American funds plus the maximum legal interest in Michigan. At the time of the loan Canadian money was worth less than American money, but the parties anticipated they would be at par by the time of repayment. Evidence of the parties’ expectations was an important factor in the court s decision that they lacked the intention to lend money at usurious interest.

In our view these cases are fundamentally different from the case under consideration here. With the exception of the last case all occurred in a very particular historical context; they were decided at a time when different kinds of money with different values were in circulation. Faced with the problem of the interchange of this money the court concluded that usury should be ascertained according to the parties’ intentions; thus, when the moneys exchanged pursuant to a loan are different in kind but equal in value in the honest judgment of the parties, the courts will not assume that a difference in their market value is hidden interest. It is important to note that except for Mansfield, supra, equality of value was evaluated in these cases as of the time of the loan or agreement to repay; in no case was the sum owing adjusted at the time of repayment according to fluctuations in value of the principal after it was lent. And in Mansfield the parties merely considered the projected fluctuation in value of the currency of repayment, not appreciation or depreciation in value of the principal loaned.

We have found no case holding that an intentional increase in the face value of the principal to account for inflation does not constitute interest. In practice the lender has long borne the risk of inflation in this state. The interest charged by a lender is not profit, strictly speaking, but compensation for the use of money and for bearing the risk that the borrower might not repay or the principal might depreciate in value. We accordingly hold that the “indexed principal” constitutes usurious interest.

The next question raised is whether the defense of usury, provided in T.C.A. § 47 — 14-112, is available to corporate borrowers. The usury statutes of many states exempt corporations from their protection. See Hershel Shanks, Practical Problems in the Application of Archaic Usury Statutes, 53 Va.L.Rev. 327 at 346 et seq. (1967). Tennessee, however, has never adopted such a statute nor have its courts recognized a corporate exclusion. But the Bank argues that the Legislature has granted corporations organized under Tennessee law the right to borrow at whatever interest rate they choose. T.C.A. § 48-402 provides:

“Each corporation shall have power:
“(g) To make contracts and, subject to such limitations, if any, as may be contained in the charter, to incur liabilities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds and other obligations, and secure any of its obligations by mortgage, pledge or otherwise.” (Emphasis added.)

In our opinion this statute merely enables corporations to borrow money at such rates as are permitted by law. The Legislature has no power to authorize corporations to lend or borrow at any interest rate exceeding the uniform and equal rate fixed by general law. McKinney v. Memphis Overton Hotel Company, 59 Tenn. 104 (1873). Nor can this rate exceed ten percent per annum. Constitution of Tennessee, Article 11, § 7.

Aztec Properties executed a written waiver of the defense of usury at the time the note was signed, and the Bank relies upon this waiver. We find no merit in this argument because the consent or cooperation of the one paying the usurious interest is immaterial. Providence A. M. E. Church v. Sauer, 45 Tenn.App. 287, 323 S.W.2d 6 (1958).

Even if the “indexed principal” were not considered to be interest, we are of the opinion that as employed in this case the device of an “indexed principal” could not withstand analysis under the Joint Congressional Resolution of June 5, 1933, popularly referred to as the “Gold Clause” Resolution.

Congress made its intention extremely clear in this resolution, in which it stated:

“Every obligation, heretofore or hereafter incurred, whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment, dollar for dollar, in any coin or currency which at the time of payment is legal tender for public and private debts.” 31 U.S.C.A. § 463.

We are not concerned in this case with the exchange of currencies upon an international market, nor does the case involve the sale of any commodity. In this case a domestic customer borrowed funds from a national bank in a principal amount expressed in and repayable in United States dollars. It would be contrary to the national policy, as expressed by the Congress and as interpreted in several cases by the United States Supreme Court, to permit a lender to require of a borrower a different quantity or number of dollars from that loaned, insofar as the principal amount is concerned. In Guaranty Trust Company, Trustee v. Henwood, Trustee et al., 307 U.S. 247, 252, 59 S.Ct. 847, 850, 83 L.Ed. 1266 (1939), the United States Supreme Court said:

“Having thus unmistakably stamped illegality upon both outstanding and future contractual provisions designed to require payment by debtors in a frozen money value rather than in a dollar of legal tender current at date of payment, Congress — apparently to obviate any possible misunderstanding as to the breadth of its objective — added, with studied precision, a catchall second sentence sweeping in ‘every obligation’, existing or future, ‘payable in money of the United States’, irrespective of ‘whether or not any such provision is contained therein or made with respect thereto.’ The obligations hit at by Congress were those ‘payable in money of the United States.’ All such obligations were declared dischargeable ‘upon payment, dollar for dollar, in any coin or currency [of the United States] which at the time of the payment is legal tender for public and private debts.’ ”

See also Norman v. Baltimore & Ohio Railroad Company, 294 U.S. 240, 55 S.Ct. 407, 79 L.Ed. 885 (1935); Holyoke Water Power Company v. American Writing Paper Company, 300 U.S. 324, 57 S.Ct. 485, 81 L.Ed. 678 (1937).

Accordingly, even if the reserved interest in the present case were only five percent, or some other rate clearly free from any question of usury, we are of opinion that a national or state banking institution would not be authorized to “index” the principal amount of money loaned to a domestic customer on a promissory note, so as to vary the number of dollars which may be required to be paid in satisfaction of the debt.

It is recognized, of course, that “indexing” is a current and very legitimate concept in modern business transactions. Nothing in this opinion should be taken to suggest that there is an impropriety in measuring future rentals by a consumer price index, or some comparable standard, in leasing agreements. Nor is there anything improper in computing future wages or salaries by such an index in collective bargaining or employment contracts. As long as there is a national currency, however, which by law is legal tender for the payment of public and private debts, we hold that the indexing device cannot properly be applied to the principal of a debt evidenced by a promissory note payable in that currency.

Accordingly, the judgment of the Chancellor is reversed, all costs taxed against the appellee, Union Planters National Bank of Memphis.

FONES, C. J., and COOPER, HENRY and HARBISON, JJ., concur.

OPINION ON PETITION TO REHEAR

The appellee has filed a petition to rehear which the Court has considered but found to be without merit. Accordingly, the petition to rehear is denied at the cost of the appellee.

FONES, C. J., and COOPER, HENRY ' and HARBISON, JJ., concur.


author: HARBISON, Justice.

text:
    Billy VINSON, d/b/a Vinson Insurance Agency, Petitioner, v. Jack MILLS, Respondent.
    Supreme Court of Tennessee.
    Dec. 1, 1975.

      Paul Simpson, Selmer, for petitioner.
    Terry Abernathy, Selmer, for respondent.
   OPINION

HARBISON, Justice.

This action was instituted in the General Sessions Court of McNairy County by a fire insurance broker, petitioner here, to recover the first annual premium on a policy of fire insurance issued to the respondent as owner of the insured premises, with a standard mortgage clause showing loss payable to the holder of a mortgage against the property.

Recovery was awarded to the plaintiff in the General Sessions Court, and the case was appealed to the Circuit Court of McNairy County where it was heard de novo by the circuit judge sitting without a jury. The Circuit Court affirmed the judgment of the General Sessions Court and awarded recovery to the petitioner.

On appeal, the Court of Appeals reversed, holding that the respondent was not liable for the premium upon the ground that the proof showed that he was a minor at the time of contracting. The Court of Appeals, in its opinion, discussed issues of procedure in civil actions appealed from the general sessions court to the circuit court which we deemed to be of general significance, and accordingly certiorari was granted.

Turning first to the substantive issues in the case, we are of the opinion that the Court of Appeals was in error and that the judgment of the Circuit Court should be reinstated.

The case is here on a narrative bill of exceptions, which is extremely meager, and which leaves unanswered a number of pertinent questions. Basically, however, it appears that the petitioner is in the general insurance business in Adamsville, Tennessee, operating an insurance agency. There seems to be no question but that the respondent initiated the negotiations which led to the issuance of the policy in question, and that he contacted petitioner with reference to obtaining insurance upon a commercial building recently constructed. The petitioner testified that respondent referred to the building as being his property. Respondent was engaged in business in the community, was known to the petitioner, and petitioner made no further inquiry from the respondent as to the actual manner in which title to the premises was held. Petitioner caused a policy to be issued, showing respondent as the owner, with a loss payable clause to a bank which held a mortgage on the property. Both parties, according to the summary of their testimony in the record, recognized that the exact amount of the premium could not be ascertained at the inception of coverage, and both testified that petitioner stated that he could issue a binder without any payment being required at that time. This was done, and the agent advanced the first annual premium, in the amount of $580.30, to recover which this suit was brought.

Both parties admit that after the policy had been issued, petitioner demanded payment from respondent. Both state that respondent indicated that he would take the matter up with his father. At no time, according to the bill of exceptions, did respondent deny liability for the premium. According to the testimony of petitioner, he himself also took the matter up with the father of respondent, and the father promised to discuss the matter with respondent. Neither of them ever paid any premium to the agent, however, and the policy was can-celled after the first year.

Respondent denied having represented the property in question as being his own, although he admitted that he made the contact with petitioner and did not advise petitioner accurately as to the ownership. It was the testimony of respondent that the building was actually owned by his father, and respondent was simply acting on his father’s behalf in requesting the issuance of insurance. The Court of Appeals correctly pointed out that this conflict in the testimony was resolved in favor of the petitioner by the trial court, so that as the case reaches us it must be assumed that the respondent did represent himself to be the owner of the premises.

A further conflict between the parties concerns a tender of a copy of the policy. Petitioner testified that he tendered a copy to the respondent some months after its issuance; respondent denied this, but again the conflict in evidence was resolved by the trial court in favor of the petitioner.

In denying liability, the respondent insisted that he had no insurable interest in the premises, and that therefore the policy was void, being in effect a wagering contract and violative of public policy of the state. See T.C.A. § 23-1701 et seq. It is indeed the rule in this state that where a policy of insurance had been issued to one having no insurable interest therein, the policy is void, and ordinarily the person paying the premiums thereon can recover the same from the insurer. See Washington v. Atlanta Life Insurance Company, 175 Tenn. 529, 136 S.W.2d 493 (1940); Interstate Life & Accident Company v. Cook, 19 Tenn.App. 290, 86 S.W.2d 887 (1935); cf. Jones & Abbott v. Insurance Company, 90 Tenn. 604, 18 S.W. 260 (1891).

In the present case, however, it is the testimony of both parties that the original policy was actually issued and delivered to the holder of the mortgage, with a loss payable clause in favor of the mortgagee, and there is no contention made but that the mortgage holder did have a valid indebtedness and therefore a valid insurable interest in the property. We note further that the policy contains general liability insurance coverage for personal injury and property damage, as well as providing comprehensive hazard insurance to the buildings and personal property.

On the meager information before us, had a fire loss occurred or a liability claim arisen, we doubt that the insurance company would have been permitted to deny coverage or escape its contractual obligation upon the ground that the policy in question was a wagering contract and therefore void. If there was a technical error in the listing of the property owner, reformation of the policy to conform to the true facts might well have been possible. These are issues which cannot be decided upon the very incomplete record before us, but under all of the circumstances we are unwilling to hold that the policy was void and afforded no type of coverage to any person, so as to justify a recovery of premiums paid, within the purview of the cases above cited.

A second defense offered by respondent has to do with the statute of frauds, but the Court of Appeals correctly concluded that this defense could not be sustained. The factual disputes were resolved by the trial court in favor of the petitioner, and it therefore must be concluded that the respondent represented the property as his own, and not that of another.

The third defense, and one which was sustained by the Court of Appeals, is that of minority. Respondent testified that he was twenty years of age when the insurance was obtained, and there is no claim that he misrepresented his age to the agent. No inquiry was made on the subject. There is, however, further no question from this record but that the respondent did not repudiate his obligation to pay the premium within a reasonable time after attaining his majority. It is undisputed that demand was made upon him for payment of the premium several months after the policy was issued — at a time when he had attained his majority (respondent lacked less than three months of being twenty-one years of age when the policy was issued). At that time he did not deny liability, but said that he would take the matter up with his father. Also at that time, according to the testimony of petitioner, respondent was tendered a copy of the policy, and there is no testimony that he denied responsibility for its issuance.

Suit was not brought on the policy until February 1973, at which time respondent lacked only one month of attaining his twenty-fifth birthday. There is no evidence whatever in the record that at any time between his reaching the age of majority and the time of filing suit, he repudiated the contract or in any other way claimed a right to avoid his obligation by reason of his minority. Under these circumstances, it is our opinion that the respondent may not avail himself of the defense of minority, and that the Court of Appeals was in error in dismissing the suit upon that basis. See generally Harwell Motor Co. v. Cunningham, 47 Tenn.App. 253, 258, 337 S.W.2d 765 (1959); Human v. Hartsell, 24 Tenn.App. 678, 148 S.W.2d 634 (1940).

As stated previously, however, the principal reason for the grant of certiorari by this Court has to do with procedural matters. The Court of Appeals held that when a case is appealed from a general sessions court to a circuit court, the Tennessee Rules of Civil Procedure become applicable to such extent that it is necessary that the parties file written pleadings (that is, a formal complaint and a written answer) before going to trial. The Court of Appeals recognized that the Rules contain no such provisions, but concluded that the general spirit of the Rules was to abolish oral pleadings and to require more formal procedures in the circuit court than had obtained in the past.

The Court of Appeals recognized that pursuant to T.C.A. § 16 — 1135 (governing general sessions courts) and T.C.A. § 19-402 (governing civil actions before justices of the peace), civil actions are begun by the suing out of a warrant. The Court was of the opinion that the warrant itself, which is required to contain a minimal statement of the cause of action, would suffice for a complaint when the action reached the circuit court, but that it would be necessary for the defendant, when the case reached that court, to file a formal answer. Since no time was provided for such filing under the Rules of Civil Procedure, the Court of Appeals held that “a defendant is not required to file same until called upon to do so by Court or opposing counsel.”

It is true that Rule 1 of the Tennessee Rules of Civil Procedure provides that the Rules are applicable to civil actions appealed or otherwise transferred to the circuit or chancery courts. The Rules are expressly not applicable in the general sessions court, except in those instances where that court exercises equivalent jurisdiction to circuit or chancery by virtue of a special statutory provision.

Nothing in the Rules, however, requires that the parties replead their action, reissue process or take any other retrospective step, once a case is appealed from a general sessions court to a circuit court. A special provision is contained in Rule 38.03 for the filing of a jury demand in such cases, and the time for doing so is specified.

It is the opinion of this Court that the Tennessee Rules of Civil Procedure are applicable, insofar as pertinent, to cases appealed to the circuit court from the general sessions court, but that the Rules do not require the filing of written pleadings, issuance of new process, or any other steps which have been completed prior to the appealing of the case to the circuit court.

T.C.A. § 19-425, which applies to general sessions courts as well as to justice of the peace courts, is still in force and effect, and it provides:

“No civil case, originating before a justice of the peace and carried to a higher court, shall be dismissed by such court for any informality whatever, but shall be tried on its merits; and the court shall allow all amendments in the form of action, the parties thereto, or the statement of the cause of action, necessary to reach the merits, upon such terms as may be deemed just and proper; and the trial shall be de novo.”

While we are in agreement with the Court of Appeals that written pleadings are more desirable than oral ones, the practice prior to the adoption of the Tennessee Rules of Civil Procedure was to have oral pleadings in the circuit court, upon appeal there from the general sessions court, unless, of course, either party relied upon a claim or defense which was required to be under oath or otherwise in written form. In such cases, of course, a written statement of the matter would probably have been necessary initially in the general sessions court or would have been supplied in the circuit court on appeal.

The Rules of Civil Procedure did not change the practice in regard to the pleading of appealed cases in the circuit court. The Rules are applicable to such cases, after the appeal has been docketed, only insofar as then pertinent or relevant. Certainly pretrial discovery procedures are available in the circuit court in such cases, time permitting, and the Rules governing the trial and disposition of cases in that court are also applicable. The rules governing pleadings, however, do not apply except to such extent and insofar as the trial judge may direct them to be applied in given cases, in carrying out the provisions of T.C.A. § 19— 425 or in the disposition of his docket under any applicable local rules.

In accordance with all of the foregoing, the judgment of the Court of Appeals is reversed and the judgment of the circuit court is reinstated in this case, at the cost of respondent.

FONES, C. J., COOPER and HENRY, JJ., and DYER, Special Justice, concur.


text:
    STATE of Tennessee, Petitioner, v. Willie B. WILSON, Respondent.
    Supreme Court of Tennessee.
    Dec. 1, 1975.
    Robert H. Roberts, Asst. Atty. Gen., Nashville, for petitioner.
    James E. Swearengen, Memphis, for respondent.
   OPINION

BROCK, Justice.

This is a proceeding for relief under the Post Conviction Procedure Act, T.C.A. §§ 40-3801 — 40-3824.

A detailed review of the proceedings, both original and post-conviction, is essential to a proper understanding and disposition of the issues presented. Respondent was indicted in the criminal court for Shelby County on July 30, 1965, for the crime of rape. On August 2, 1965, a minute entry was made indicating that respondent represented to the court at arraignment that he would retain private counsel. The evidence shows that private counsel was retained by his mother to represent him. But, on December 20,1965, the trial court, pursuant to a motion filed by respondent’s counsel in connection with proceedings to determine whether respondent was mentally competent to stand trial, entered the following Order, to-wit:

“ORDER DECREEING DEFENDANT INDIGENT
“This cause came on to be heard before the Hon. W. Preston Battle, Judge, Div. Ill, Criminal Court, Shelby County, Tennessee, upon the petition of the defendant’s attorney, and upon the hearing of the cause, including the testimony of the defendant, Willie B. Wilson, his mother, Louise Wilson, and the statement of attorney for defendant, and for the State of Tennessee, the Court finds that the defendant, Willie B. Wilson, is without funds, and has been confined to the Shelby County jail, and that he is indigent. “IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED that the defendant, Willie B. Wilson, be, and he is declared, indigent for the purpose of ordering a mental examination.
W. Preston Battle/s/
JUDGE Dec. 20, 1965”

After examination at Central State Hospital, respondent was found to be competent, his plea of present insanity was withdrawn, and a plea of not guilty was entered. On August 9, 1966, respondent’s trial was concluded and he was found guilty of rape and sentenced to twenty years imprisonment. A motion for a new trial was filed and was overruled on September 23, 1966. In that order respondent was granted thirty days in which to file a bill of exceptions. On October 21, 1966, a further order was entered that “for good cause shown” respondent was “allowed an additional thirty (30) days from this date” for filing a bill of exceptions. Then, on November 21, 1966, the court entered the following Order, to-wit:

“ORDER EXTENDING TIME AND DIRECTING TRANSCRIPT
“In this cause, for good cause shown, the defendant is granted an additional 30 days to file his bill of exceptions.
“The defendant, having heretofore been declared indigent, is entitled to the transcript of the record, and the Clerk is directed to transcribe the balance or remaining portions of the record at the State’s cost.
“All of which is so ordered.
/s/ W Preston Battle,
JUDGE — Nov. 21, 1966
/s/ James C Beasley Assistant Attorney General
/s/ R L Pearson Attorney for Defendant”

Finally, on December 19, 1966, the trial court entered an order reciting that “. a Bill of Exceptions (had) been prepared for and on behalf of both the State and the defendant . . . ” and had been presented to the court, examined and authenticated, and ordering that the same be filed and made a part of the record. This order was “approved” by the attorney for the defendant and the Assistant Attorney General for the State. Thus, the case was presented to the Supreme Court for review. In the Supreme Court the respondent sought to present substantial claims of error in the trial resulting in his conviction. But, alas, his appeal was an exercise in futility, for the Court, upon motion of the State, ordered the bill of exceptions stricken from the record because it was not filed within the time allowed by T.C.A. § 27-111, as it then existed. Since none of the errors asserted by respondent could be disclosed without a bill of exceptions, they were all overruled and the conviction was affirmed. Thereafter, respondent began this proceeding for post-conviction relief.

One of the principal grounds for relief advanced by respondent is that he has been denied his “constitutional right of appellate review.” He also contends that he was represented by incompetent or ineffectual counsel at trial and on appeal to the Supreme Court. The trial court denied relief upon the ground that respondent had failed to carry the burden of proof. Upon appeal, the Court of Criminal Appeals has reversed the judgment of the trial court and, by way of relief, has ordered (1) that the transcript of the criminal trial be filed as a late bill of exceptions, as now permitted by T.C.A. § 27 — 111, and (2) that respondent is granted a delayed appeal, as provided by T.C.A. § 40-3820(1), (2). The State has petitioned this Court for certiorari, contending (1) that the 1970 and 1972 amendments to T.C.A. § 27 — 111, authorizing appellate courts upon a finding of “good cause” to order the late filing of a bill of exceptions should not be made retroactive to this 1966 conviction and (2) that T.C.A. § 40-3820 permits only trial courts to grant delayed appeals; hence, the Court of Criminal Appeals had no authority to grant respondent a delayed appeal. We affirm the conclusion reached by the Court of Criminal Appeals, but for somewhat different reasons.

As noted, T.C.A. § 27 — 111 requires, as a predicate for permitting the late filing of a bill of exceptions, that “good cause” be shown. The Court of Criminal Appeals merely adopted the “good cause” recited by Judge Battle in his orders granting extensions of time for filing a bill of exceptions. We think that good cause for allowing the late filing of a bill of exceptions, as well as justification for granting a delayed appeal, can be placed upon firmer ground in this case.

The order of Judge Battle, dated December 20, 1965, and his later order, dated November 21, 1966, both show conclusively that the respondent was indigent, despite the fact that his mother had provided him with counsel. The December 20, 1965, order expressly finds, from evidence, that “defendant, Willie B. Wilson, is without funds, and has been confined to the Shelby County jail, and that he is indigent.” (Emphasis added.) And, the order of November 21, 1966, is even more pertinent:

“The defendant, having heretofore been declared indigent, is entitled to the transcript of the record, and the clerk is directed to transcribe the balance or remaining portions of the record at the State’s cost.” (Emphasis added.)

As such an indigent, respondent was entitled to have a bill of exceptions prepared for purposes of appeal, free of charge to him. That right was based not only upon a statute, T.C.A. § 40-2040, but upon the equal protection clause of the Constitution of the United States, Griffin v. Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891 (1956); State v. Elliott, 524 S.W.2d 473, 475 (1975). And, he was entitled to have such a bill of exceptions in time to have it considered by the appellate court. Pulley v. Norvell, 431 F.2d 258 (6th Cir. 1970), cert. denied, 401 U.S. 916, 91 S.Ct. 896, 27 L.Ed.2d 817 (1971). Failure of the State to thus provide a bill of exceptions to respondent clearly constitutes “good cause” for ordering the late filing of the bill of exceptions. The failure to file a timely bill of exceptions was “due to a cause beyond the control of the appealing party.” Bryant v. State, 527 S.W.2d 742 (1975); State v. Davis, 3 Tenn.Cr.App. 625, 466 S.W.2d 237 (1971) and, thus, constitutes “good cause.” Furthermore, the recent amendments to T.C.A. § 27 — 111, here invoked, have, contrary to the insistence of the State, been held to have retrospective application. Daily v. State, 225 Tenn. 472, 470 S.W.2d 608 (1971). Accordingly, the first assignment of error is overruled.

The argument of the State that only a trial court is authorized to grant a delayed appeal under the Post-Conviction Procedure Act is without merit. T.C.A. § 40-3820, provides that the trial court may grant a delayed appeal in the nature of a writ of error when it is found that a petitioner has been denied his right to such an appeal in violation of the Constitution of the United States or the Constitution of Tennessee. But, the statute, T.C.A. § 40-3822, also provides for appeal to the Court of Criminal Appeals from any judgment of the trial court granting or denying relief, and it is clearly within the power of the appellate court to correct an error of the trial court in refusing to grant a delayed appeal by ordering that such delayed appeal be granted. T.C.A. § 27-326.

The only question remaining is whether or not the respondent’s loss of his right to a meaningful review of his conviction was occasioned through a violation of his constitutional right. He had an appeal, but it was ineffective to present his claims of error to the Supreme Court. A valid bill of exceptions was absolutely essential for it is the only document under our procedure wherein the occurrences at a trial are recorded and preserved. The appeal, unaccompanied by a bill of exceptions, was a nullity in this case. It necessarily follows that, in the circumstances of this case, the failure of the State to provide respondent with a timely bill of exceptions operated to deny him a meaningful appellate review of his criminal trial, in violation of his rights under the Constitutions of the United States and Tennessee. Griffin v. Illinois, supra ; Pulley v. Norvell, supra.

The judgment of the Court of Criminal Appeals is affirmed.

FONES, C. J, and COOPER, HENRY and HARBISON, JJ., concur.

Addendum:

Costs incident to the proceedings in this Court are taxed against the State.