author: MURRAY, Justice.

text:
    Richard GARCIA and Colleen Kid Garcia, Appellants, v. MEMORIAL HOSPITAL, Appellee.
    No. 15746.
    Court of Civil Appeals of Texas, San Antonio.
    Nov. 2, 1977.
    Paul D. Rich, San Antonio, for appellants.
    David Stephenson, San Antonio, for ap-pellee.
   MURRAY, Justice.

This is a wrongful death action involving the Texas Tort Claims Act, Tex.Rev.Civ. Stat.Ann. art. 6252-19, §§ 3 and 4 (1970). Plaintiffs are the parents of deceased child, Richard S. Garcia, age 3 years, who died while undergoing treatment at the Memorial Hospital of Uvalde. Memorial Hospital is a political subdivision of the State of Texas and was established under authority of Tex.Rev.Civ.Stat.Ann. art. 4494r (1976). Defendants were Memorial Hospital of Uvalde, Alan Holmes, and Thavian Thre-siamma.

Plaintiffs alleged that defendants were negligent due to failure to insure that the vital components of necessary life sustaining equipment would be available and ready for use.

On or about October 24, 1974, the deceased child, Richard S. Garcia, experienced difficulty in breathing. Memorial Hospital of Uvalde was notified by plaintiffs to be ready to admit the child. At approximately 12:15 a.m., the deceased child was taken to the emergency room of Memorial Hospital, where the child was not admitted. Plaintiffs telephoned Dr. George M. Allison, who ordered medication over the phone. After returning home, the plaintiffs rushed the deceased back to Memorial Hospital at approximately 7:30 a.m., and the child was then admitted to the Hospital.

In treating the deceased child, Dr. Allison used equipment furnished and maintained by Memorial Hospital. Assisting Dr. Allison was Thavian Thresiamma. Due to the unavailability of a Pediatric Endo-Tracheal Tube, the deceased child could not be properly treated for his condition and died due to aspiration of mucous and vomitus filling the lungs.

Defendants filed a motion for summary judgment alleging that the Memorial Hospital of Uvalde, Texas was incorporated under the terms of art. 4494r, Tex.Rev.Civ. Stat.Ann., and as a political subdivision of the State of Texas was entitled to governmental immunity and that the two individual defendants, as employees of Memorial Hospital, were entitled to immunity. The lower court granted and rendered an order for summary judgment in favor of the defendants, based on their claim of governmental immunity.

Appellants’ appeal rests on the question of whether there exists a cause of action under § 3 of the Texas Tort Claims Act. art. 6252-19, Tex.Rev.Civ.Stat.Ann. Appellants do not dispute the fact that appellee is generally immune from tort liability; however, such immunity from liability is waived through the acts of appellee, as provided by the Texas Tort Claims Act. § 3 of the Texas Tort Claims Act reads as follows:

Each unit of government in the state shall be liable for money damages for personal injuries or death when proximately caused by the negligence or wrongful act or omission of any officer or employee acting within the scope of his employment or office arising from the operation or use of a motor-driven vehicle and motor-driven equipment, under circumstances where such officer or employee would be personally liable to the claimant in accordance with the law of this state, or death or personal injuries so caused from some condition or some use of tangible property, real or personal, under circumstances where such unit of government, if a private person, would be liable to the claimant in accordance with the law of this state.

The pertinent language in § 3 upon which appellants base their appeal is that the death of Richard S. Garcia was “ . caused from some condition or some use of tangible property, real or personal . . ” while the child was in the care and treatment of the appellees.

We hold that plaintiffs’-appellants’ petition stated a cause of action under the Texas Tort Claims Act. This cause is governed by the decisions in Lowe v. Texas Tech University, 540 S.W.2d 297 (Tex.1976); McGuire v. Overton Memorial Hospital, 514 S.W.2d 79 (Tex.Civ.App.—Tyler), writ ref’d n.r.e. per curiam, 518 S.W.2d 528 (Tex. 1975); Rodriguez v. Holmes, 556 S.W.2d 125 (Tex.Civ.App.—San Antonio, 1977).

In Rodriguez, the plaintiff alleged various acts of negligence, including inadequate services for treatment of heart patients and failure to provide adequate oxygen. The trial court granted defendants’ motions for summary judgment. Plaintiff’s appeal was predicated upon a portion of the Texas Tort Claims Act, which provides liability of governmental entities for the injuries arising out of conditions or use of property. This court reversed and remanded the cause, holding that the failure of defendants to provide adequate equipment stated a cause of action under the Texas Tort Claims Act.

We hold that appellants’ allegations of a negligent failure to furnish a Pediatric Endo-Tracheal Tube to be used in the treatment of Richard S. Garcia bring the case within the statutory waiver of immunity arising from some conditions or some use of personal property.

The judgment of the trial court is reversed and the cause remanded for a new trial.


source: Caselaw Access Project

author: DUNAGAN, Chief Justice.

license: Public Domain

text:
    James BELLOWS, Appellant, v. Calvin CROW, Appellee.
    No. 1049.
    Court of Civil Appeals of Texas, Tyler.
    Nov. 3, 1977.
    Rehearing Denied Dee. 1, 1977.
    Richard S. Stark, Stark, Barnhart & Moore, Gainesville, for appellant.
    Clifford Powell, Sherman, for appellee.
   DUNAGAN, Chief Justice.

This is a forcible detainer suit filed by the appellant, James Bellows, against the appel-lee, Calvin Crow. The major question on appeal is the validity of a renewal option contained in a lease covering the premises in controversy.

The appellee entered into a lease agreement on November 1, 1960, with Mrs. J. P. Hickey, owner of the property in question at that time. The lease was for a period of five (5) years beginning October 1, 1960, payable on the first day of each month at the rate of $60.00 per month, being the aggregate sum of $3,600.00. Said lease contained an option clause for the renewal of the lease for the additional period of ten (10) years under the same terms and conditions.

Appellee exercised the option by making a new lease (second lease), Mrs. J. P. Hickey leasing the premises to appellee for a term of ten years beginning November 1, 1965, and ending October 31, 1975. The second lease and the construction of the renewal option contained in it is the crucial question in this case. The lease contained the following provisions:

“1. As rent for said property during the term of this lease, lessee agrees and obligates himself to pay and the lessor obligates herself to accept Seven Thousand Two Hundred and No/100 Dollars ($7,200.00), payable in monthly installments of Sixty and No/100 Dollars ($60.00) per month on the 1st day of each consecutive month.
“2. Lessee is hereby given the option for a renewal of this contract for the additional period of five (5) years under the same terms and conditions upon the giving of written notice to lessor thirty (30) days prior to the expiration of the primary term hereof.”

The appellee timely gave notice of his intention to exercise his option to extend the lease for five more years. The appellant had purchased the property from Mrs. Hickey in 1966, and he refused to renew the lease. Appellee has tendered $60.00 a month as rental payments prior to trial and appellant has refused these.

The appellant in his first point of error asserts that the renewal option contained in the lease is void because it is legally uncertain and does not form a contract. We do not agree.

In Haddad v. Tyler Production Credit Ass’n, 212 S.W.2d 1006, 1007 (Tex.Civ.App.-Texarkana 1948, writ ref’d), a renewal option provision that did not specifically set out any rental rate, other than a maximum rate as referred to and set out in the original lease, was construed to be valid. Similar renewal option provisions have been upheld in other instances. Pruett Jewelers, Inc. v. J. Weingarten, Inc., 426 S.W.2d 902 (Tex.Civ.App.-Tyler 1968, writ ref’d n. r. e.); Red Oak Fishing Club v. Harcrow, 460 S.W.2d 151 (Tex.Civ.App.-Waco 1970, no writ).

It has been held that no distinction will be drawn between the terms “extension” and “renewal” as used by men of practical affairs in a lease. Haddad v. Tyler Production Credit Ass’n, supra. Therefore, we find no significance in the fact that the word “renewal” was used in the lease before us.

We think it is clear from the face of the instrument that the option provision contemplated a five-year renewal of the lease at a rental rate of $60.00 per month. We find no merit in the appellant’s argument that setting the rental rate at $60.00 per month necessarily involves a total disregard of the $7,200.00 figure contained in the lease. It is clear that this $7,200.00 figure represents an aggregate amount of the rental rate for a ten-year primary term; and recognizing the rental rate to be $60.00 per month under the five-year renewal option merely recognizes such figure to be an aggregate amount.

In our opinion, “the same terms and conditions” is clear and unambiguous and refers to a rental rate of $60.00 per month. The $7,200.00 figure must be recognized for what it is, namely, an aggregate figure of the monthly rental rate set out to encompass the primary ten-year term of the lease. Appellant’s first point of error is overruled.

Appellant’s second point of error complains of the admission into evidence of the first lease executed by Mrs. J. P. Hickey and the appellee. We feel that the appel-lee’s pleadings properly permitted the admission of this evidence, and we do not feel such evidence was hearsay since it was not offered to prove the truth of the matters contained therein. 1 McCormick & Ray, Texas Practice, Evidence, sec. 781 (2d ed. 1956). In any event, even if the evidence

was improperly admitted, in a trial before the court it is presumed that the trial judge disregarded evidence improperly received, where there is independent evidence upon which to base the judgment. Ferguson v. Ferguson, 23 S.W.2d 673 (Tex.Comm.App. 1930); Menefee v. National Aid Life Ass’n, 161 S.W.2d 508, 510 (Tex.Civ.App.-Waco 1942, err. ref’d w. o. m.); Texas-New Mexico Utilities Co. v. State ex rel. City of Teague et ah, 174 S.W.2d 57, 62 (Tex.Civ. App.-Fort Worth 1943, err. ref’d w. o. m.). The judgment here is based upon the second lease. Thus, the admission of the evidence, even if improper, was harmless error. Wright v. Traders & General Ins. Co., 132 Tex. 172, 123 S.W.2d 314 (1939, opinion adopted); Tex.R.Civ.P. 434.

Appellant’s third point of error alleges that the trial court erred in not rendering a money judgment in favor of the appellant for any rental consideration. The appellant’s pleadings do not support the awarding of any money judgment for rental purposes, since his pleadings refer only to damages suffered based on the allegedly invalid option provision in the lease. We have already upheld the trial court’s action in upholding the validity of the renewal option in the lease; therefore, we overrule appellant’s third point of error because his pleadings do not allow the trial court to render a money judgment for any rental payments. However, based upon our holding regarding the validity of the renewal option in the lease, the appellant is entitled to receive a monthly payment of $60.00 per month. Appellant’s right to these payments is based upon his contractual rights contained in the renewal option provision of the lease.

Judgment affirmed.


author: HOWARD, Judge.

text:
    Lillian D. BENNETT and Frank A. Bennett, Appellants, v. Harold B. GRAVES, M.D., Appellee.
    Court of Appeals of Kentucky.
    Oct. 14, 1977.
    Rehearing Denied Nov. 18, 1977.
    Norman R. Lemme, Pike, Lemme & Conway, Shepherdsville, for appellants.
    James G. Apple, Stites, McElwain & Fowler, Louisville, for appellee.
    Before MARTIN, C. J., and COOPER and HOWARD, JJ.
   HOWARD, Judge.

This is an appeal from the Jefferson Circuit Court wherein summary judgment was granted for defendant-appellee, Harold B. Graves, M.D.

Plaintiff-appellant, Lillian D. Bennett (hereinafter referred to as Mrs. Bennett), was pregnant with her eighth child when she first saw defendant-appellee, Harold B. Graves, M.D. (hereinafter referred to as Dr. Graves), in connection with this pregnancy. Mrs. Bennett expressed her great desire not to have any more children and she and Dr. Graves discussed sterilization procedures. Dr. Graves advised against a hysterectomy immediately after the delivery of a child because of the enlargement of the uterus and blood vessels and the danger of hemorrhage and infection. He advised that Mrs. Bennett have a tubal ligation, a simple sterilization procedure.

Dr. Graves performed a tubal ligation on Mrs. Bennett immediately after delivery of her eighth child, on November 5, 1971. Dr. Graves used the Pomeroy method whereby a loop is made in each of the Fallopian tubes, tied off, and each loop is then cut. The statistical rate of failure with this type of surgery is about one percent (according to Dr. Graves) or one in every 1200 to 1500 cases (according to Dr. James Childers). Mrs. Bennett however did become pregnant.

After the birth of her ninth child on September 14, 1972, Mrs. Bennett arranged for a hysterectomy to be performed by Dr. James Childers. Dr. Childers first examined Mrs. Bennett on October 30, 1972 and advised her that she would have to wait several months before a hysterectomy could be performed. Because of the failure of the tubal ligation, Dr. Childers recommended a vaginal hysterectomy to be preceded by a “hysterosolpingogram” which is a test to determine the reason for the tubal ligation failure. This test involves the injection of radiopaque dye into the uterus under pressure to see if it can be forced through the Fallopian tubes. Dr. Childers stated that the test revealed that both tubes were blocked because the dye could not be forced into the tubes. When Dr. Childers performed the hysterectomy on Mrs. Bennett, he was able to visualize both ends of her tubes and the areas where Dr. Graves had performed the tubal ligation. The ends of the tubes were both blunted and closed. From everything Dr. Childers was able to observe, Dr. Graves had performed the tubal ligation according to accepted standards and techniques. Dr. Childers testified that he had seen pregnancies occur after a tubal ligation in his own practice.

Mrs. Bennett raises on appeal the issue of “informed consent” and that Dr. Graves breached this duty to inform her that the operation might not prevent further pregnancy which resulted in injury to her (i. e., the resulting pregnancy, delivery of the child, the child itself, and all the attendant costs until the child reaches the age of majority). There is some testimony that Mrs. Bennett’s ninth child may have some physical disabilities and may be retarded, as two of her other children are.

Mrs. Bennett alleges that she was not informed that the tubal ligation was not absolutely foolproof in preventing pregnancy. Dr. Graves, on the other hand, testified that he had talked about the possibility of failure with a tubal ligation. Mrs. Bennett, before the tubal ligation was performed, signed a consent to surgery form, as did her husband. That consent form contained the following statements:

The risks involved and the possibility of complications have been explained to me. Even though good results are expected I acknowledge that no guarantee or assurance has been given to me as to the results that may be obtained.

In Holton v. Pfingst, Ky., 534 S.W.2d 786, at page 789, the court discussed the concept of informed consent and draws this conclusion:

. It is our view that the cases considering the extent of required disclosure have failed in many instances to relate the requirement to the overall policy consideration. If it is the law, and it surely is, that a physician ordinarily is not liable for an honest mistake in judgment, when he follows acceptable medical standards for examination and diagnosis and treatment, then the extent of disclosure relevant to securing the patient’s consent must'be evaluated in terms of what the physician knew or should have known at the time he recommended the treatment to the patient.

The court in Holton held that a verdict was properly directed for the defendant-ophthalmologist and he was not liable to a patient for the loss of the sight of one eye which resulted from a properly performed but unsuccessful surgical procedure.

Mrs. Bennett argues that Dr. Graves knew of her eight children and knew that a hysterectomy was better suited for sterilization. However, this argument works both ways. Mrs. Bennett knew she had eight children and knew that a hysterectomy could not be performed until some time after the delivery of a child. It is inconceivable to this court that a woman who knew of her propensity to become pregnant would not have discussed with her doctor the chances of success or failure of the tubal ligation procedure. Mrs. Bennett’s eighth child was born November 5, 1971, and her ninth child was born September 14, 1972.

As stated in Holton, the ophthalmologist’s conduct was such that, giving the patient’s evidence all favorable inferences, the ophthalmologist “was guilty, if anything, of only an honest mistake in judgment.” Mrs. Bennett, quite understandably, did not desire to have any more children. Dr. Graves performed an operation with a very low failure rate, which he thought was best for Mrs. Bennett’s health following delivery of her eighth child, and which he thought would be effective.

There being no genuine issue as to any material fact, summary judgment was properly granted to Dr. Graves. CR 56.01.

The judgment of the trial court is affirmed.

All concur.


author: REYNOLDS, Judge.

text:
    NORTON-CHILDREN’S HOSPITALS, INC., Appellant, v. FIRST KENTUCKY TRUST COMPANY, Executor under the Will of Lily B. Moorman, Deceased, Berea College, University of the South, and Mrs. Jean Des Vignes, Appellees.
    Court of Appeals of Kentucky.
    Nov. 4, 1977.

      John E. Tarrant, John S. Osborn, Jr., and Charles R. Simons, Tarrant, Combs & Bul-litt, Louisville, for appellant.
    Joseph E. Stopher, Wm. P. Swain, Stuart E. Lampe, Henry R. Heyburn, Randolph A. Brown, and S. Timothy Lemon, Louisville, for appellees.
    Before HOWERTON, COOPER and REYNOLDS, JJ.
   REYNOLDS, Judge.

This is an appeal by Norton-Children’s Hospitals, Inc. from a judgment of Jefferson Circuit Court, construing the will of Mrs. Lily B. Moorman.

Mrs. Moorman died, testate, in Jefferson County, Kentucky, on September 15, 1972, and after her will was probated, First Kentucky Trust Company qualified as executor. The Trust Company, appellee, pursuant to KRS 418.040 et sequi, filed this action for a declaration of rights and named as defendants, among others, Norton-Children’s Hospitals, Inc., Berea College, University of the South and Mrs. Jean Des Vignes, who were devisees under the will. The gross value of the decedent’s estate, prior to payment of estate taxes, was $2,493,000. This included assets received by Mrs. Moorman from the Belknap estate, now evaluated at $377,000. Item IV and Item VII of the will are the subject of construction on this appeal. Item IV of Mrs. Moorman’s will provides:

My stepmother, Marion S. D. Belknap, died on or about May 6, 1966, and under the provisions of her will dated February 10,1960 I became entitled to receive one-half of the residue of her estate. It is this particular portion of my estate, which has been devised to me under the will of my said stepmother which I am disposing of in this item of my will.
(a) In October, 1967 I made a pledge of Two Hundred Thousand Dollars ($200,-000.00) payable to the Frontier Nursing Service, Inc., of Hyden, Kentucky, to be used in connection with the Mary Breck-inridge Hospital Fund. In the event said pledge has not been paid during my lifetime, then same shall be payable first out of the estate received by me from my said stepmother, Marion S. D. Belknap.
(b) I hereby make the following bequests to be paid out of said fund:
(1) Mrs. Jean des Vignes, of New York City, $5,000.00;
(2) University of the South, Sewanee, Tennessee, the sum of Two Hundred Twenty-five Thousand Dollars ($225,-000.00) in trust, to be added to any sums I have previously given to said University to be invested and reinvested and held as a perpetual fund to be devoted to the following purposes: The annual net income from said trust shall be used to provide annual scholarships to worthy students who are ambitious to receive a college education. Each scholarship herein provided for shall be known as the ‘Morris B. Moorman and Charles H. Moorman, Jr. Scholarship’ in memory of my sons. * * *
(3) Berea College, of Berea, Kentucky the sum of Two Hundred Thousand Dollars ($200,000.00) as a memorial to my father, Morris B. Belknap, for its permanent Endowment Fund, the income only to be expended.
All the rest and residue, if any, remaining from the portion of my estate devised to me under the will of my stepmother, I hereby provide shall be distributed pursuant to the provisions of Item YII of my will.

Item VII disposes of the residue of her estate and provides:

All the rest and residue of my estate of every kind and description, and wheresoever located, that I may own at my death or have the power to dispose of by will, including any residue of the estate received by me as a devisee under the will of my stepmother, Marion S. D. Belknap, not previously disposed of in Item IV above, and including lapsed legacies, I give, devise and bequeath in equal shares to the following:
(a) To Berea College, "of Berea Kentucky, as a memorial to my husband, Charles H. Moorman, and my sons, Morris B. Moorman and Charles H. Moorman, Jr., for its permanent Endowment Fund, the income only to be expended.
(b) To Children’s Hospital, of Louisville, Kentucky [now Norton-Children’s], for the endowment of a suitable memorial in memory of my mother, Lily Buckner Belknap.

The sum of the aggregate legacies referred to in Item IV amounted to $430,-000 while the assets traceable from the Belknap estate were in the amount of $377,-000. The amount of payment to be made to the Item IV legatees, therefore, is in controversy, and we hold that the only question that is, or can be, before this court at this time consists of the correctness of the interpretation given to the document in controversy by the trial court’s judgment. Midlow v. Ray’s Adm’x, 302 Ky. 471, 194 S.W.2d 847 (1946). Since the trial court’s interpretation of the will demonstrates such a degree of logic and thoroughness, embodied with reasonableness and correctness, this court both adopts and reiterates that portion of Judge Lyndon R. Schmid’s findings of fact and conclusions of law that are raised on this appeal:

Basically, there are three types of bequests — general, specific and demonstrative. The gift of a specific sum of money with reference to a certain fund must be either specific or demonstrative. It is specific if the fund is designated as the exclusive source out of which the legacy is to be paid. It is demonstrative if the fund is merely the primary — but not the exclusive — source for satisfaction of the legacy. Ruh’s Executors v. Ruh, 270 Ky. 792, 110 S.W.2d 1097 (1937). A legacy is specific ‘when it is a bequest of a specified part of a testator’s estate which is so distinguished and which may be satisfied only by the delivery of the particular thing.’ 69 S.W.2d at 71A-15. Tagnon’s Adm’x v. Tagnon, 253 Ky. 374, 69 S.W.2d 715 [714] (1934); Jones v. Edmunds, Ky., 477 S.W.2d 771 (1972). The legacies in Item IV of Mrs. Moorman’s will are of cash sums, not of portions of the assets received from the Belknap Estate.
The primary consideration in determining whether the bequests contained in Item IV of Mrs. Moorman’s will are demonstrative or specific is the intention of Mrs. Moorman as determined from an examination of the entire will. 96 C.J.S., Wills, § 1127. However, it is clear that the law favors demonstrative legacies over specific legacies and that a legacy is presumed to be demonstrative rather than specific. It has been stated that a legacy will not be construed as specific unless the testator clearly intended it to be specific. Tagnon’s Adm’x v. Tagnon, supra; Ruh’s Executors v. Ruh, supra; 96 C.J.S., Wills, § 1128.
The legal presumption in favor of demonstrative legacies is based on the factual presumption that a testator’s or testatrix’ expressed affection for a beneficiary is not so ephemeral as to be contingent upon the value of the property remaining unchanged. Tifft v. Porter, 8 N.Y. 516; Johnson v. Conover, 54 N.J.Eq. 333, 35 Atl. 292 [291] (1896), aff’d. 39 Atl. 1114 (1897).
Item IV(b) of Mrs. Moorman’s will states that the cash bequests therein are ‘to be paid out of said fund’ (the assets received from the Belknap Estate). In Smith v. Lampton, 38 Ky.Rep. 69 (8 Dana 69) (1839), the Court of Appeals held that a bequest of a certain sum of money ‘out of or to be paid out of a designated fund’ is presumed to be demonstrative.
Since it is the finding of this Court from an examination of the instrument as a whole that Mrs. Moorman intended the Belknap fund to be the primary rather than the exclusive source of payment for the bequests in Item IY, this Court concludes that the bequests contained in Item IV are demonstrative and that they will not be deemed pro tanto merely because of the failure of the sufficiency of the Belknap fund.
In addition to the authorities herein-above cited, this Court is persuaded by the following decisions from other jurisdictions: In re Peter’s Estate, [32 Misc. 2d 1004], 224 N.Y.S.2d 305 (1962); Lenzen v. Miller, 378 Ill. 170, 37 N.E.2d 833 (1941); In re Ruhr’s Estate, 120 N.Y. S.2d 729 (1950); In re Lewis’ Estate, 148 Neb. 592, 28 N.W.2d 427 (1947); In re Cline’s Estate [67 Cal.App.2d 800], 155 P.2d 390 (Calif.1945); Moore v. Langston, 251 N.C. 439, 111 S.E.2d 627 (1959).
It is therefore the opinion of this Court that the residuary estate disposed of in Item VII of Mrs. Moorman’s will must be used to provide the deficiency necessary in order to satisfy the bequests contained in Item IV.
* * * * * *
In addition to the testatrix’ will, the evidence in this case consists of certain facts, the truth of which has been stipulated by the parties, as well as the depositions of Marcus L. Oliver, Director of Development of the University of the South, and Joseph E. Stopher, Attorney for Mrs. Moorman. This Court has reviewed these depositions and has taken note of the continuing objection by counsel for Norton-Children’s Hospitals, Inc. to certain testimony of Mr. Stopher as being incompetent under KRS 421.210 and also in violation of the Parole Evidence Rule. The Court finds it unnecessary to rule upon the objection since its findings of fact and conclusions of law are based entirely upon an examination of the ‘four comers’ of the will of Mrs. Moorman and not from any extrinsic evidence contained in the Stopher deposition.

6 Page on Wills § 48.8 at 28 (Bowe-Parker rev. 1962), which deals with the construction of demonstrative legacies, provides that “[t]he courts prefer to construe a gift as demonstrative, in preference to specific, if such intention can be fairly deducted from the language of the will.” The legal presumption in favor of demonstrative legacies is based on the factual presumption that a testator’s expressed affection for a beneficiary is not so ephemeral as to be contingent upon the value of the property remaining unchanged. Johnson v. Conover, 54 N.J.Eq. 333, 35 A. 291 (1896), aff’d, 39 A. 1114 (1897).

Although courts favor general or demonstrative legacies rather than specific legacies, the intent of the testator at the time the will is executed, as gathered from the language of the entire will, is the controlling factor if that intention can be ascertained. Howe v. Howe’s Ex’x, 287 Ky. 756, 155 S.W.2d 196 (1941); Ruh, supra; Tagnon, supra; Ballenger’s Devisees v. Ballinger’s Adm’r, 251 Ky. 405, 65 S.W.2d 49 (1933). This intention must be clear from the will itself.

In Moore v. Langston, 251 N.C. 439, 111 S.E.2d 627 (1959) the Supreme Court of North Carolina was confronted with a codicil which stated “that my beloved sister . receive from the rentals of my property two hundred dollars every month as long as she shall live.” In holding the legacy to be demonstrative rather than specific, the court said that “the designation of a fund out of which the legacy is to be satisfied is not enough to make the bequest specific.” Kentucky’s law is in accord with this proposition. Smith v. Lampton, supra. Professor Philip Mechem, in his article, “Specific Legacies of Unspecific Things,” 87 U.Pa.L.Rev. 546, 566 (1939), profusely cites jurisdictions construing cash bequests as demonstrative and concludes as follows:

‘X dollars, to be paid from Y fund’. This is certainly the most common form [of a demonstrative legacy]; such a legacy is almost universally treated as at least pri-ma facie demonstrative.

It is clear from the foregoing authority that the intent of the testator must be clear and convincing for a legacy to be treated as specific rather than demonstrative.

We are not persuaded by the cases cited by appellant that involve the construction of will provisions bequeathing specific property (Ballinger’s Devisees v. Ballinger’s Adm’r, supra; Pinkston v. Pinkston, 81 S.W.2d 196 (Tex.Civ.App.1935); Hoffman v. Jinks, 134 N.J.Eq. 91, 33 A.2d 874 (1943); etc.), or a portion of specific property (In Re Babb’s Estate, 200 Cal. 252, 252 P. 1039 (1927); Haslam v. De Alvarez, 70 R.I. 212, 38 A.2d 158 (1944); etc.) received from the estate of another. Under the Moorman will we have a bequest of a cash sum with but a reference to a fund for payment. We observe that Mrs. Moorman was not bequeathing a mere expectancy as appears in some of appellant’s referenced citations (Gelbach v. Shively, 67 Md. 498, 10 A. 247 (1887); Waters v. Selleck, 201 Ind. 593,170 N.E. 20 (1930); etc.). Pridemore’s Executor v. Bailey, Ky., 300 S.W.2d 559 (1957) is not supportive of appellant’s position when Commissioner Cullen’s entire opinion is considered. Therein decedent had made a devise of “all real estate owned by me which was conveyed to me in my former name, Minnie S. Blackerby.” No specific sums of money were mentioned. Also, a specific devise was defined as “a gift of a particular thing, or a specified part of the testator’s estate, which is so described as to be capable of identification from all others of the same kind, and which gift may be satisfied only by the delivery of the particular thing.” Unlike this case, the devise in Bailey, supra, could not have been satisfied by the delivery of any other thing. In Item IV, Mrs. Moorman did not give the beneficiaries the property she received from the Belknap estate but cash sums.

We find that those bequests made in Item IV of Mrs. Moorman’s will were demonstrative rather than specific. In order that a legacy be considered specific, the testator’s intent must be evidenced by clear language. Otherwise, the legacy will be considered demonstrative. The unnumbered introductory paragraph of Item IV does not establish that Mrs. Moorman intended the bequest in question to be specific. Therefore, the residuary estate disposed of in Item VII of Mrs. Moorman’s will must be used to provide the deficiency necessary in order to satisfy the bequests contained in Item IV. Additionally, we have considered appellant’s long line of authorities, and there appears little necessity for discussing appellant’s contention regarding extrinsic evidence, insofar as the chancellor neither considered nor utilized such testimony.

Since we have determined that the Item IV bequests are demonstrative, both parties are in agreement that they will bear interest as provided under KRS 394.520.

The judgment is affirmed.

All concur.


author: WILHOIT, Judge.

text:
    Howard NORRELL and Consolidated T. V. Cable Service, Inc., Appellants, v. ELECTRIC & WATER PLANT BOARD OF the CITY OF FRANKFORT, Kentucky, Community Service, Inc., the City of Frankfort, Kentucky, James W. Locke, James L. Morris, and C. A. McClain, Appellees.
    Court of Appeals of Kentucky.
    Nov. 4, 1977.

      William A. Young, Frankfort, for appellants.
    Marion Rider, Allen Prewitt, Ben B. Fowler, Stites, McElwain & Fowler, William P. Curlin, II, Hazelrigg & Cox, Frankfort, for appellees.
    Before GANT, HOWERTON and WIL-HOIT, JJ.
   WILHOIT, Judge.

This appeal is from an order of the Franklin Circuit Court dismissing the claims of the appellants, Howard Norrell and Consolidated T.V. Cable Service, Inc., against the appellees, Electric & Water Plant Board of the City of Frankfort, Community Service, Inc., the City of Frankfort, James W. Locke, James L. Morris, and C. A. McClain. The trial court held that the claims were barred under the doctrine of res judicata.

In an effort to provide the city of Frankfort with adequate television reception, the Plant Board, following a study made for it by the Radio Corporation of America, determined to construct a cable television system. The Plant Board deemed it impractical for it to operate the system so it caused a self-perpetuating, private, nonprofit corporation, Community Service, Inc., to be formed for this purpose. On August 11, 1952, the Plant Board entered into a contract with Community whereby the Plant Board would complete the construction of the cable television system and Community would operate it, reimbursing the Plant Board for its investment out of receipts from the system. Title to the property of the system and any extensions thereto remained in the Plant Board.

Consolidated T.V. Cable Service, Inc., is a private corporation also engaged in furnishing cable television service in Frankfort. Its president and principal stockholder is Howard Norrell. At the time this particular controversy arose, Community served the southern, western, and northern areas of Frankfort while Consolidated served the eastern area and the area north of Broadway in Frankfort. The rates charged by Consolidated in the eastern area were apparently in excess of those charged by it elsewhere and were in excess of those charged by Community. In 1971 Community proposed to extend its operation into this area.

In July, 1971, Howard Norrell, as a taxpayer, filed suit against the Plant Board and Community Service, Inc., seeking to enjoin the Plant Board from entering into any contract or performing under any contract entered into between it and Community pledging the property or credit of the Plant Board for the purpose of financing the extension of Community’s service into eastern Frankfort. The complaint was amended, joining Consolidated T.V. Cable Service, Inc., as a plaintiff and Jerrold Electronics Corporation as a defendant. Jerrold was to construct the proposed extension. In addition to the relief asked in the original complaint, the amended complaint sought to enjoin Community and Jerrold from entering into a contract for the extension. Appellees Locke, Morris, and McClain were then permitted to join in the action as intervening taxpayers.

The court granted the injunction against the Plant Board but denied that sought against Community and Jerrold as inappropriate because they were private corporations.

In October, 1971, the complaint was amended for a third time. It now alleged that an agreement between the Plant Board and Community, whereby Community would lease the Plant Board’s cable facilities including the eastern extension for $1.00 per year, was in violation of KRS 84.010 and KRS 96.175(4) because the lease was not approved by the City of Frankfort which under the statute holds legal title to all property of the Plant Board. Paragraph 11 of this amended complaint further alleged that the Plant Board had no authority to own, operate, control, or supervise a television distribution system or to provide television service to the inhabitants of the city.

In November, 1971, yet another amended complaint was filed but only for the purpose of deleting the allegations contained in paragraph 11 of the previous amended complaint. This was apparently done because in the latter part of October Consolidated had commenced an action in the United States District Court against the City of Frankfort, the Plant Board, and Community, alleging that the extension of Community’s service into eastern Frankfort would violate Consolidated’s rights under the fourteenth amendment to the United States Constitution. The premise for this action was that to avoid duplication KRS 96.045 requires a municipality either to purchase or condemn an existing utility facility in an area where the municipality proposes to construct a similar facility and no effort had been made by the city to purchase or condemn Consolidated’s facilities in east Frankfort. The District Court found no violation of the fourteenth amendment, and this finding was affirmed by the Sixth Circuit Court of Appeals in Consolidated T.V. Cable Service, Inc. v. City of Frankfort, 465 F.2d 1190 (1972).

In August, 1972, Consolidated filed a declaratory judgment action in the Franklin Circuit Court naming as defendants those named in the federal suit. This action asked the court to declare that the city, the Plant Board, and Community had no authority to own or operate a cable T.V. system or, in the alternative, to require the city and Plant Board to comply with KRS 96.045. The action was consolidated by the court with the October, 1971, action. On November 22, 1976, an order of the circuit court dismissing the action as consolidated was entered. It is from that order that this appeal is brought.

In its opinion the circuit court determined that the ultimate questions before it were whether the city had legal authority to operate a cable television system and, if so, whether it had violated the antiduplication provisions of KRS 96.045. The court found that both of these questions could have been presented in former cases involving the parties or their privies. These cases referred to by the court were Norrell v. Judd, Ky., 374 S.W.2d 192 (1963); Consolidated Television Service, Inc. v. Leary, Ky., 382 S.W.2d 78 (1964); and Norrell v. Judd and Consolidated Television Service, Inc. v. Flynn, Ky., 387 S.W.2d 7 (1965). The court reasoned that since the prior cases afforded the parties or their privies an opportunity to litigate these very questions, under the rule set out in Combs v. Prestonsburg Water Co., 260 Ky. 169, 84 S.W.2d 15 (1935), the questions actually were in issue in those former suits by implication and principles of res judicata therefore precluded their being raised in this action.

The rule of issue preclusion set out in Combs, supra, however, is subject to the limitation that only those issues which are germane to, implied in, or so essentially connected with the actual issues in a previous case as to be involved in the scope of the proceedings are precluded from being raised in a later case between the parties or their privies. Gilbert v. Bowling Green Bank & Trust Co., Ky., 460 S.W.2d 14 (1970); Hays v. Sturgill, 302 Ky. 31, 193 S.W.2d 648, 164 A.L.R. 868 (1946).

The first of the prior cases between the parties or their privies involved the question of whether a contract between the municipal housing commission and Community was void because of a conflict of interest involving an individual who was at once an officer and employee of the housing commission and a director of Community. The second case involved the question of whether the Plant Board’s refusal to permit Consolidated to use its utility poles in certain areas of Frankfort was discriminatory. The question of the Plant Board’s authority to operate a cable system was apparently raised in that case but not decided because the Court found that a determination of that issue had no bearing on the disposition of the case. The third case involved the question of whether Community should be required to remove its facilities from a housing project in order to place it on. an equal footing with Consolidated after the court had found Community’s contract with the housing commission void because of the conflict of interest involved in the first case.

While we fully appreciate what must have been the trial court’s desire to bring about some finality to the disputes between these parties and perhaps its feeling of déjá vu, we do not believe that the question of the legal authority of the City of Frankfort through its Plant Board to operate a cable television system was so involved in the scope of the previous cases between the parties or their privies as to have been germane to, implied in, or essentially connected with the actual issues determined in those cases. The question of the duplication of utilities does not appear to have been at all involved in the scope of the previous cases. These questions, therefore, are not precluded from being raised in this litigation by those former cases.

Appellees argue, nevertheless, that principles of judicial estoppel or estoppel by contract preclude these questions from being raised by the appellants. As to the question of the duplication of utilities, we find no basis in the long history of the dealings between the parties for asserting either a judicial estoppel or an estoppel by contract. The question of the legal authority of the city through the Plant Board to operate a cable television system we view in a different light. We need consider only the question of judicial estoppel.

After having raised the issue of the authority of the city through the Plant Board to operate a cable television system when this action was originally brought in state court, Consolidated amended its complaint to drop that specific issue when its action in federal court was begun. It then represented to the federal district court that “the city does have the power to run a CATV system itself as a part of its electrical plant facility” and that this was “no longer an issue” in the state court. Having assumed this position as a necessary predicate to its success in federal court and having lost, Consolidated now seeks to reassume its inconsistent position in the state court. Under all of the circumstances of this case, to permit this question to be raised now would be to permit the appellants to “play fast and loose with the courts.” See Scarano v. Central R. Co. of New Jersey, 203 F.2d 510 (3d Cir. 1953). This we will not do. This question was raised once and then affirmatively abandoned, and a contrary position was asserted before another court in an action in which the same parties or their privies were involved. Appellants are es-topped to raise this issue now.

The judgment of the trial court is affirmed as_ to the question of the authority of the City of Frankfort to operate a cable television system through its Plant Board, but it is reversed as to the question of duplication of utilities. This case is remanded for further proceedings on that question.

All concur.

      . For additional factual background see Cc 382 S.W.2d 78 (1964). ¡olidated Television Service, Inc. v. Leary, Ky.,

      . See Consolidated Television Service, Inc. v. Leary, supra, at p. 81.


author: VANCE, Judge:

text:
    James R. YOCUM, Commissioner of Labor, etc., Appellant, v. Denver STEWART et al., Appellees.
    Court of Appeals of Kentucky.
    Nov. 4, 1977.
    Cyril E. Shadowen, Dept, of Labor, Louisville, Kenneth E. Hollis, Gen. Counsel, Dept, of Labor, Frankfort, for appellant.
    Kelsey E. Friend, Pikeville, Richard M. Joiner, Frankfort, for appellees.
    Before PARK, VANCE and WHITE, JJ.
   VANCE, Judge:

This is the second appeal in this case. Appellee, Denver Stewart, was given a total disability award which was apportioned by the Board between the employer and the Special Fund. All compensation was directed to be paid by the employer subject to reimbursement from the fund for that part of the award apportioned to it. KRS 342.-316(13)(a). On a petition for review the trial court adjudged that all compensation should be paid by the Special Fund, subject to reimbursement by the employer, in accordance with a 1974 amendment to KRS 342.316(13)(a).

On the first appeal (Yocum v. Stewart, memorandum opinion per curiam, March 26, 1976) the total disability award was affirmed, but the method of payment adjudged by the trial court was reversed and the payment was directed to be made by the employer with reimbursement from the Special Fund.

Thereafter, Stewart caused execution to issue against S & R Coal Company, the employer. Stewart was president of the employer corporation. The execution was returned “no property found”. Stewart then petitioned the Workmen’s Compensation Board for an order directing the award be paid by the Uninsured Employers Fund. This petition was denied.

Stewart then petitioned the Pike Circuit Court for review of that order. S & R Coal Company was not made a party to the proceeding. The trial court entered judgment directing the Workmen’s Compensation Board to make the Uninsured Employers Fund a party and to hold hearings to resolve issues raised by the Uninsured Employers Fund as to its liability for the award. The Special Fund was ordered to pay directly to Stewart that part of the compensation fund apportioned to it. The Special Fund has appealed that part of the judgment.

Under the law which governs this proceeding apportioned awards must be paid by the employer who may then have reimbursement from the Special Fund. A ruling that the Special Fund should pay directly to the claimant was reversed by the Supreme Court of Kentucky and that decision is the law of this case. No payments of the award have been made by the employer and apparently the employer is insolvent.

The question of whether the Uninsured Employers Fund will be required to “stand in the shoes” of the employer is still pending before the Board. It is being resisted on several grounds including the ground that the award was procured by fraud.

We conclude that Stewart’s only remedy is to proceed with his claim against the Uninsured Employers Fund. If that fund is ultimately determined to be liable for payment of the award, it may have reimbursement against the Special Fund for the portion of the award assessed to the Special Fund.

This disposition of the case makes it unnecessary to consider the procedural question brought about by the failure of Stewart to make S & R Coal Company a party to the petition for review in the Pike Circuit Court.

The judgment is reversed insofar as it orders payment by the Special Fund directly to Stewart.

All concur.


author: HOWERTON, Judge.

text:
    UNITED STATES FIRE INSURANCE COMPANY, Appellant, v. AMERICAN TURNERS OF LOUISVILLE, INC., Appellee.
    Court of Appeals of Kentucky.
    Nov. 4, 1977.

      William A. Miller, Louisville, for appellant.
    Rocco J. Celebrezze, Louisville, for appel-lee.
    Before HOWERTON, GANT and WHITE, JJ.
   HOWERTON, Judge.

This is an appeal from a judgment in favor of appellee on an employee dishonesty bond. The appellant raises three issues on this appeal. The appellant first contends that appellee’s complaint should have been dismissed because it was not brought within the period of limitations provided for in the bond. The second issue is that the proof merely showed a shortage of accounts without any act of dishonesty, and therefore, appellant’s Motion for a Directed Verdict should have been sustained. The appellant’s final argument is that the complaint made no request for interest, and it was therefore erroneous for the trial court to render any judgment for interest relating back to the date of the alleged money shortage.

The bond in question provided in part: Fourth: —Upon discovery of the Employer of any loss, the Employer shall promptly deliver notice thereof to the Surety at its Home Office, in New York, New York, and within Four months after such discovery, the Employer shall file with the Surety at its Home Office a written statement of claim giving particulars of such loss. The Surety shall have Two months after claim has been presented in which to verify and pay same, during which time no legal proceeding shall be brought against the Surety as to that claim, nor in all as to that claim after the expiration of Fifteen months from the time of its presentation. If this limitation is void under the laws of the place governing the construction thereof, it shall be extended to the shortest period of limitation permitted by such law. (emphasis ours)

The facts are uncontradicted that the claim was first presented on May 2, 1972, with the filing of a Proof of Loss. It is also uncontradicted that the complaint was not filed until February 20, 1974, some 21 months and 18 days after the presentation of the claim.

In the absence of a contractual limitation, the statute of limitations would permit an action on the contract to be brought within fifteen years after the date of the occurrence. Periods of limitation shorter than that provided by the statute are commonly found in insurance policies, however, and they have been sustained. See, for example, Ashland Finance Co. v. Hartford Accident & Indemnity Co., Ky., 474 S.W.2d 364 (1971) and Stansbury v. Smith, Ky., 424 S.W.2d 571 (1968), in which one year limitations were sustained as reasonable. In the Ashland Finance case, the limitation for filing a suit was one year from the date of the discovery of the loss. The bond also provided a three-month period in which to file the Proof of Loss after the discovery of the loss, and also that no suit could be brought within the three-month period following the filing of the Proof of Loss. In the case sub judice, the contractual limitation is considerably longer. The time for filing a suit on the claim is fifteen months after the presentation of the Proof of Loss. The bond also bars a suit for two months after the presentation of the Proof of Loss and thus provides an actual period of thirteen months in which a suit may be filed. Furthermore, the Proof of Loss may be presented at any time within four months after the discovery of the loss. Thus, appellant’s bond allows a total of nineteen months from the discovery of the loss in which to file a suit, if the claim is otherwise denied.

The appellee argues — as was apparently accepted in the circuit court — that it did not receive a copy of the bond until after the contractual period of limitations within the bond had already passed. Appellee did request a copy of the bond which was immediately furnished by the appellant, but the request for a copy was not made until after the fifteen-month deadline.

We believe that as a matter of law the purchaser of a fidelity bond may be presumed to have received a copy of the bond. It would therefore be incumbent upon the bond holder to overcome the presumption. Furthermore, in this case, a Mr. Thoman. who was responsible for purchase of the bond at the time it was originally acquired, indicated in his direct testimony that he would have to say that the appellee did receive the bond. He indicated in his redirect testimony that he had no actual memory of having received the bond, but he did state that he would not have paid for the bond if he had not been given a copy of it. Appellee is an organization which apparently has frequent elections of new officers. At best, the evidence in this case indicates that the current officers were unable to locate a copy of the bond. This conclusion does not necessitate the conclusion that ap-pellee never received a copy of the bond at the time of its purchase.

Surely, appellant was entitled to presume that the appellee had a copy of the bond until it received a request for another copy. Appellant was under no obligation to furnish any additional copies of the bond until so requested. The appellee must be charged with knowledge of the terms and conditions of the bond, and it is clear that appellee failed to comply with its requirements for instituting a legal proceeding on a claim.

Having found that the appellee’s complaint should have been dismissed, we need not discuss or decide the two remaining issues.

The judgment of the circuit court is reversed.

All concur.


author: WHITE, Judge.

text:
    MALONE AND HYDE, INC., Appellant, v. Kenneth R. MAXWELL and Robert G. King, Appellees.
    Court of Appeals of Kentucky.
    Nov. 11, 1977.
    William Miles Arvin, Nicholasville, for appellant.
    John R. Adams, Hays & Moss, Lexington, for appellee, Kenneth R. Maxwell.
    Thomas W. Miller, Miller, Griffin & Marks, Lexington, for appellee, Robert G. King.
    Before WHITE, PARK and WINTER-SHEIMER, JJ.
   WHITE, Judge.

This appeal concerns the question of whether a security agreement incorporating a “future advances” clause also secures a separate open account between the parties for purposes of the KRS 355.6-103(3) security interest exemption from the Bulk Sales Act.

The facts are quite simple and largely uncontroverted. On September 26, 1973, Robert G. King signed a promissory note and accompanying security agreement which was subsequently assigned to appellant Malone and Hyde, Inc. As defined in the security agreement, the term “secured party” included an assignee, such as Malone and Hyde, Inc., who was a holder of the security agreement. The security interest was perfected by filing in the Fayette County Court Clerk’s office on October 23, 1973. The note and agreement were to secure the sum of $369,200.00, which was obtained by King in order to purchase and operate a Pic Pac grocery store located in Lexington, Kentucky. The note provided that it and all subsequent agreements be governed by the law of Tennessee. The security agreement gave the secured party a security interest in various fixtures and appliances used in the store and:

including all of Debtor’s inventory located in Pic Pac # 120, whether now in existence or hereafter acquired, entered into or created, and any and all products or proceeds thereof, together with inventory returned or repossessed from sale, disposition or otherwise, and all other goods of the same class whether now owned or hereafter acquired by Debtor, and the proceeds thereof.

The security agreement also contained a future advances clause which stated that the above described collateral also secured the payment of:

(III) all other money heretofore or hereafter advanced by Secured Party to or for the account of Debtor at the option of Secured Party, and all other present or future, direct or contingent liabilities and indebtedness of Debtor to Secured Party of any nature whatsoever and any extensions or renewals thereof.

In September and October of 1975, Kenneth R. Maxwell supplied $4,276.86 worth of merchandise to Robert King’s Pic Pac store. On November 3, 1975, King defaulted on the payment of his obligation to Malone and Hyde. King accepted Malone and Hyde’s proposal that he assign his interest in the inventory, fixtures, cash and bank account to Malone and Hyde, Inc. in exchange for their forgiveness of the balance of the September 12, 1973 note ($204,348.00) and an open account in the amount of $182,002.77.

Kenneth R. Maxwell demanded payment of the account, and upon a refusal to pay, instituted this action against both Robert G. King and Malone and Hyde, Inc. Maxwell alleged they were liable because of their refusal to pay for the merchandise and because they failed to comply with KRS 355.-6-102, et seq. (Bulk Sales Law). Summary judgment was rendered in favor of Kenneth R. Maxwell against the defendants on the basis that the open account was not secured by the security agreement and therefore the assignment was made only partly in settlement of a security interest and as a result Malone and Hyde, Inc. was not entitled to the KRS 355.6-103(3) exemption. Malone and Hyde, Inc. has appealed.

A preliminary matter needs to be disposed of first. Though neither party argued the law of Tennessee in the briefs or orally, it is clear that Tennessee law is dispositive as to the interpretation of the language of the promissory note and accompanying security agreement. However, after a comparison of the applicable law of Tennessee and Kentucky, we are persuaded that there would be no difference in the interpretation. See 8A Tennessee Code Annotated § 47 — 9-204 (1964). Murdock Acceptance Corp. v. Jones, 50 Tenn.App. 431, 362 S.W.2d 266 (1961). Future Advance Clauses in Tennessee — Construction and Effect, 5 Memphis State L.Rev. 586 (1975).

All the parties agree that the transfer between King and Malone and Hyde, Inc. was a bulk transfer. On appeal, Malone and Hyde, Inc. contends that the “future advances” clause in the security agreement covers the open account. Appellant argues that therefore the unpaid balance of the note and the open account were secured, and as a result, the transfer falls within the KRS 355.6-103(3) exception. We agree.

KRS 355.6-103(3) provides as follows:

The following transfers are not subject to this article:
(3) Transfers in settlement or realization of a lien or other security interest.

KRS 355.9-204(3) provides for the inclusion of future advances clauses in the security agreement. We hold that the open account between King and Malone and Hyde, Inc. clearly comes within the future advances clause incorporated in the security agreement by the parties. As such, the “open account” is also secured by the collateral named in the security agreement and the transfer by King to Malone and Hyde, Inc. is within the exception to KRS 355.6-103(3).

The judgment is reversed.

All concur.


author: SHANGLER, Presiding Judge.

text:
    Vivian R. ELMORE, Appellant, v. Ray A. ELMORE, Respondent.
    No. KCD 28074.
    Missouri Court of Appeals, Kansas City District.
    Feb. 28, 1977.
    Transfer Granted by Supreme Court May 10, 1977.
    Remanded to Court of Appeals May 17, 1977.
    Mandate Issued May 20, 1977.
    Wm. Harrison Norton, Norton & Pollard, Inc., North Kansas City, for appellant.
    Wayne R. Starr, Jr., Independence, George E. Murray, Chesterfield, for respondent.
    Before SHANGLER, P. J., and WEL-BORN and HIGGINS, Special Judges.
   SHANGLER, Presiding Judge.

The marriage was dissolved and division of marital property adjudged between the husband and wife. The evidence was the stipulation of the parties and their oral testimony. The only contest was as to certain farm land given to the couple twenty-five years earlier by the grandparents of the wife. The trial court determined that this conveyance was a gift to both husband and wife and that the title should remain undisturbed. The wife contends here that the conveyance was meant as a gift to her alone and should have been declared her sole title and ownership. This issue was not pleaded and is new on appeal.

The petition for dissolution of marriage went without contest as did the division of the personal property. During the marriage, the parties had executed to their children — with reservation of a life estate to themselves — deeds to the farm land conveyed to them by the grandparents. Two days after their separation, the deeds were recorded by the husband without the knowledge of the wife.

The petition for dissolution pleaded, among other claims, an action to set aside the delivery of the deeds and recordation for fraud. The relief sought was that “fee simple title be invested in the parties with the right of survivorship.” There was no evidence from any source that the recordation of the deeds to the children had been fraudulent. In any event, since the children grantees were not parties to the action, the court deemed the necessary parties for such a determination were not before the court and refused adjudication. [It happens, we are told on oral argument, that since, the recordation has been set aside in a separate action.]

The theory of the contested litigation was merely that the title to the farm land conveyed to the parties by the grandparents was a gift to both of them, and so the recordation of the deeds to the children of the land by the husband alone without assent of the wife, was in fraud of her rights. The court properly found it was without jurisdiction to bind the children-grantees not joined in the action to a judgment. That issue, in any event, has since been adjudicated in favor of the wife. The theory on appeal asserts a different issue: that the trial court should have determined that the conveyance from the grandparents was a gift to her alone, and so should have vested title in her solely. No such claim appears from the petition or evidence; no such issue was adjudicated. It was not litigated and may not be appealed.

There is no doubt that the trial court correctly adjudicated the issue presented. The conveyance from the grandparents to Ray A. Elmore, and Vivian R. Elmore, then husband and wife, presumptively created an estate by the entireties. Holt v. Myers, 494 S.W.2d 430, 444[18, 19] (Mo.App.1973).

There was no evidence to contradict the presumption that the conveyance given in the joint names of the husband and wife was intended for them both in that status. In the absence of ambiguity, the intention of the grantors must be determined by what the deed actually says, not what they might have said had they undertaken to explain their intentions. Wolf v. Mir avalle, 372 S.W.2d 28, 34[4, 5] (Mo.1963).

The petition of the wife concedes the conveyance was to both parties and that both parties executed deeds of the land to their children. There was simply no evidence from any source as to the intention of the transaction other than the document of conveyance itself.

The judgment treats the farm land as property acquired subsequent to the marriage by gift, and therefore exempt from the definition of marital property under § 452.330.2(1). There is no contention here that a gift to a husband and wife jointly excludes the operation of that exemption for purposes of division of marital property.

The judgment is affirmed.

All concur.


text:
    C. W. LONG, M. D., and C. W. Long & Associates, Inc., Respondents, v. Thomas Laurence HUFFMAN, M. D., Appellant, and C. W. Long & Associates, Inc., Third-Party Defendant.
    No. KCD 28440.
    Missouri Court of Appeals, Kansas City District.
    Oct. 11, 1977.

      John M. Carnahan, III, and James P. Ferguson, Springfield, for appellant; Greene, Cassity, Ferguson, Carnahan & Freeman, Springfield, of counsel.
    Edward J. Murphy, Inc., Butler, for respondents.
    Before SHANGLER, P. J., and WEL-BORN and HIGGINS, Special Judges.
   SHANGLER, Presiding Judge.

This appeal comes from an injunction which restrains physician Huffman from the practice of medicine within a radius of 60 miles of the City of Butler for five years after termination of employment by Physician Long in accordance with the restrictive covenant provision of the contract between them. The appellant Huffman does not dispute that he violated the noncompetition covenant, but asserts equity should not give aid to remedy the breach because the terms of the restriction contradict the public policy of this state, and because respondent Long was himself in breach of the contract.

The appellant Huffman became acquainted with Long while still a senior medical student in 1972. He solicited employment with Long during the interim before internship. He worked for Long for eight weeks and then returned to Kansas City for further training. On July 28,1972, the parties concluded a formal two-year employment contract to begin when Huffman completed internship. Huffman received $5000 as consideration for execution of the contract. The essential terms of the agreement provided that Huffman was to receive 40% and Long 60% of the net profits. Huffman was guaranteed a minimum of $25,000 per year, payable at the rate of a minimum of $2,000 per month. Huffman was given an option, upon the “approval of the Employer”, to purchase an equal share in the clinic according to a predetermined formula. The contract also provided — in addition to the restrictive covenant — that the undertaking was personal and not assignable, transferable or delegable. This much of the facts is not disputed.

The appellant Huffman took up employment with Long under the contract of July 1,1973, and worked to the completion of the two-year term. Prior to the commencement of that employment, Long had incorporated his practice as C. W. Long & Associates, Inc. Huffman testified that he first had certain knowledge of that change of business status when he arrived at the clinic in July of 1973. Long testified that some months earlier he told Huffman of his plans to incorporate and directed financial adviser Finke to discuss the matter with him. Huffman conceded that he made no objection to the incorporation and throughout the association with Long was paid by corporate check.

During the second year of association, Huffman informed Long he wished to exercise the contract option to purchase an equal ownership in the clinic. Formal discussions resulted in an offer of contract by Long which Huffman rejected. He objected because the proposal offered Huffman the purchase of only 249 of the 500 shares in the Long Associates corporation. The other impediment to consent, according to Long, was that Huffman refused any provision for noncompetition. They renewed negotiations in early 1974 in the office of the attorney for Long. The memorandum of this meeting by Attorney Murphy discloses that Long then proposed to sell Huffman 250 shares [a one-half interest] in the clinic, and in place of a noncompetition clause, a penalty provision whereby Huffman was bound to pay Long $40,000 if he left within five years of the agreement, $20,000 within 5 to 10 years, $10,000 within 10 to 15 years, and whereby Huffman would sell back his interest in the corporation to Long for $1 if he left after fifteen years. These proposals were never embodied in a formal agreement. Huffman testified that the only time he was offered an equal interest in the clinic was two days before he left that practice. Long testified he always intended that Huffman have the option to purchase one-half of the clinic. They both agreed that Huffman never tendered money for the purchase.

At the completion of the two year employment term Huffman left the Long clinic and about a month later began his own practice in Butler. Huffman hired away from the Long clinic two employees — Margaret Sandeen and Gayle Cook — to work in his new office. He acknowledged that during the first month of this practice he sent fifty requests for medical records to the Long clinic office. Of these, about eighty per cent were concerning former patients of Dr. Long.

A petition for injunction followed to restrain Huffman from violation of the restrictive covenant provision of the contract. Huffman counterclaimed for an accounting of the finances of the clinic during the employment. The parties have deferred the accounting issue, and the trial court decree that Huffman be enjoined according to the terms of the restrictive covenant comes to us as a final appealable judgment.

Huffman argues first that such a restrictive covenant contradicts the public policy of this state against restraint of trade and, because of the need for medical practitioners, causes serious public inconvenience. He argues also that Long failed to show lack of an adequate legal remedy and proved no pecuniary damage from the Huffman conduct, and so may not have the aid of equity. The rule of law is to the contrary: Contracts of noncompetition between physicians and surgeons will ordinarily be enforced in equity because, for the breach of such a covenant, there is no adequate remedy at law and the very purpose of such a contract may be met only by exact conformance to the terms undertaken. Thompson v. Allain, 377 S.W.2d 465, 467[3] (Mo.App.1964). Thus, the injunctive remedy is peculiarly appropriate both because of the obligation of the contract and because the full damage to be suffered by the breach cannot be known certainly. Mills v. Murray, 472 S.W.2d 6, 18[20] (Mo. App.1971). Cognately, there is no need to prove damage to enforce a noncompetition employment agreement by injunction. Reed, Roberts Associates, Inc. v. Bailenson, 537 S.W.2d 238, 242[12-14] (Mo.App.1976).

A restrictive covenant is enforceable in equity if it is “limited as to area and time, reasonably necessary to protect the fair and legitimate contract rights and interests of the parties, and otherwise reasonable and not contrary to public policy.” Willman v. Beheler, 499 S.W.2d 770, 777[17-19] (Mo.1973). The covenant of the employment contract limited noncompetition to a sixty mile radius of Butler for a period of five years. There was testimony by Dr. Long and Gayle Cook, who had worked at the clinic for eighteen years, that patients came from as far as sixty miles away. And both Willman and Allain, supra, upheld five year restrictions on employments for the practice of medicine. Thus, as a matter of evidence, the covenant was proven to impose a restriction no greater than reasonably necessary to protect Long, and as a matter of law was otherwise reasonable. Renwood Food Products v. Schaefer, 240 Mo.App. 939, 223 S.W.2d 144, 152[5, 6] (1949).

Nor does the established public policy of the state inhibit enforcement of an otherwise valid noncompetition employment contract between medical practitioners. That contention was expressly rejected in Willman v. Beheler, supra. That defendant asserted that to enforce the restrictive covenant would deny the people of St. Joseph the services of a skilled surgeon and so outweigh any benefit to the covenantor. The court first noted that the shortage in medical practitioners was pandemic, so his services were as valuable in one locale as in another. A more fundamental public policy is served, said the court, by the preservation of the obligations of contracts. Willman v. Beheler, supra, 1. c. 777[17-19]. Huffman offered no evidence as to the need of doctors in Butler and the record indicates no shortage. The rationale of Willman controls. The noncompetition covenant assumed by Dr. Huffman was reasonable in time and place, consistent with public policy, and enforceable in equity by injunction.

The appellant Huffman next contends that Long breached the employment contract in a number of ways, and thereby invokes the general principle that injunc-tive relief is not available to a party who has been the first to materially breach the undertaking. Boten v. Brecklein, 452 S.W.2d 86, 92[1, 2] (Mo.1972); 43 C.J.S. Injunctions § 84, p. 573. Huffman contends three antecedent breaches of contract by Long on principle prevent his recourse to equity for injunction: First, that the incorporation of the clinic practice by Dr. Long violated the prohibition against assignment of the contract obligation; second, that the failure to sell Huffman a half-interest in the clinic was an unreasonable exercise of his discretion to withhold consent; third, that the deductions from income for the retirement plan violated the contract provision as to the disposition of clinic income.

The dispute as to whether the clinic was incorporated without the consent of Huffman, and so contrary to the terms of contract — even if a valid issue — is resolved by his conduct. Huffman acknowledged he was aware of the incorporation from the first day of the contract term, notwithstanding, he made no objection, worked in the corporation, and was paid well. This conduct of acquiescence induced Long to continue to employ, pay and benefit Huffman through the corporation, and now estops him to contradict his earlier consent. To deny enforcement of the restrictive covenant in these circumstances would be to allow a party to benefit from a contract he disaffirms. 31 C.J.S. Estoppel § 110(2). Rodgers v. Seidlitz Paint and Varnish Company, 404 S.W.2d 191 (Mo. 1966), estopped the plaintiff from assertion of claim to commissions, where with his knowledge and acceptance, his salary was increased in lieu of commissions. That is because one who waives a breach of the contract cannot set it up in justification of his own breach. Phillips v. Todd, 180 S.W. 1039, 1041[1] (Mo.App. 1915); Labor Discount Ct. v. State B & T Co., 526 S.W.2d 407, 425[22] (Mo.App.1967). Huffman is bound by the rule that a person who accepts benefits may be estopped to question the existence, validity, and effect of the contract from which they derive. That person will not be allowed to assume the inconsistent positions which affirm a contract in part by acceptance of its benefits and disaf-firm it in part by avoidance of its obligations. DuBail v. Medical West Building Corporation, 372 S.W.2d 128, 132[1—3] (Mo. 1933). Huffman accepted the benefits of the contract for the full employment term and must now accept the burden of the covenant not to compete to which he also agreed.

Huffman contends another antecedent breach of contract by Long prevents his recourse to equity for injunction: that Long unreasonably withheld consent [“approval”—in the terms of the contract] to convey one-half of the clinic to him. Huffman relies on the principle that where performance of a contract is to be to the satisfaction of the promisor [Long] he must exercise that judgment in good faith and as a reasonable man. 17 Am.Jur.2d Contracts, § 366. That is, the promisor may not act arbitrarily or capriciously and there must be a bona fide reason for his dissatisfaction. See, Norman v. McLelland, 354 S.W.2d 906, 910[4] (Mo.App.1962).

Taken in that perspective, Long was neither unreasonable nor in bad faith during the negotiations with Huffman. Their discussions commenced in March of 1974, more than a year before the end of the employment contract term, and seems to have continued until the day Huffman left the clinic. At one instance, as Huffman contends, the proposal was for less than an equal sale [of only 249 of the 500 corporate shares], but that was redressed in subsequent negotiations. The basic obstacle to agreement was the insistence that Huffman consent to a noncompetition clause. Thus, the question Huffman poses reduces to whether insistence by Long that Huffman consent to a comparable restriction—or the fixed penalty surrogated for that provision—as one of the agreements for the sale of stock was reasonable. The same considerations which validate a reasonable noncompetition agreement by one physician who comes into the employment of another also validate such a restriction when one practitioner, established by years of practice, agrees to share ownership with a novice. The competition which marks the medical practice and the time required to gain the confidence of a clientele makes the insistence on such protection not only reasonable but a practical necessity. Long conducted the negotiations in good faith and his insistence on a noncompetition clause, or the penalty, as a provision of sale was not a breach of contract.

Huffman contends that yet a third breach of contract denies him the right to injunction. He claims that payment of clinic funds to a retirement plan was completely outside the employment agreement and a breach of the contract definition of clinic income. He argues that because benefits of the plan do not vest until after employment for four years, appellant received no benefit from the fund since he worked only two years. The trial court found that in furtherance of their relationship ■ Long had a right to establish the plan and that Huffman received benefit in terms of tax savings. The court also found that Huffman knew about the plan and acceded to it. Huffman argues this point without the support of any relevant authority. It should be noted that the parties chose to defer trial of the accounting issue until the determination on review of the judgment for injunction. Among the funds for which Long is called to account, we are made to understand, are the sums contributed from the Huffman earnings to the retirement fund. The issue before us, however, is not what—if anything at all—Long owes Huffman under the contract for earnings paid into the retirement fund, but whether Long breached the contract by that practice and so forfeits the right to rely on its terms for injunction. As to that question, we must conclude as to the other claims of breach, that outside of a random inquiry as to why money retained for such purpose from his earnings not those of Long, Huffman accepted the benefits of the contract without active objection to this known practice for the entire term of employment. It remains for the accounting action to determine the validity of the pension plan within the provisions of the contract and the right of Huffman to his contributions.

The judgment is affirmed.

All concur.


author: DIXON, Judge.

text:
    In re MARRIAGE OF James Herschel and Jo Ann Madorin BURRIS. James Herschel BURRIS, Petitioner-Appellant, v. Jo Ann Madorin BURRIS, Respondent.
    No. KCD 28533.
    Missouri Court of Appeals, Kansas City District.
    Oct. 31, 1977.

      Collins & Grimm, Macon, for petitioner-appellant.
    Wasinger & Parham, Hannibal, for respondent.
    Before PRITCHARD, P. J., and SWOF-FORD, C. J., and DIXON, J.
   DIXON, Judge.

The husband appeals from the monetary provisions of a dissolution decree entered on his petition in the Circuit Court of Macon County. The complaint of error relates only to the division of marital property, the maintenance award, and the award for “back support money.”

Before a statement of the factual background in this case, it will be well to posit the scope of review. The husband suggests that the standard of review is determined by Singleton v. Singleton, 525 S.W.2d 642 (Mo.App.1975). Singleton was decided in 1975, as the reported opinion discloses. Unfortunately, the opinion does not specifically note that the notice of appeal was filed in 1972, which indicates the trial court decided the issue in 1972. Under the provisions of Section 452.415(4) RSMo 1969, those facts make the prior divorce law applicable to that case. In any event, this court had adhered to the view that the review of dissolution proceedings is governed by Rule 73.01(3) as explicated in Murphy v. Carrón, 536 S.W.2d 30 (Mo. banc 1976).

Since a portion of the trial court’s order must be reversed rather than affirmed, this case may not be disposed of under Rule 84.16. Two of the three points raised, however, relate solely to the trial court’s fact finding role and may be summarily disposed of under Rule 73.01.

The husband claims the division of marital property is unjust, asserting that the wife received 88% of the marital property. The percentage received is a matter of dispute depending upon the estimates of value attributed to the various items of property. In any event, the trial court made express findings of value and a specific division of the property. The trial court listed the relevant factors to consider in a division of the marital property and set off to the wife as her share of the marital property the family home, the household goods, a car, and a life insurance policy with a cash value of $500. The court found the husband had separate property valued at approximately $40,000. The court found that the husband had been guilty of misconduct, which was the contributing factor to the irretrievable breakdown of the marriage. Considering, as the trial court did, that the relevant factors in the division of marital property, the contribution of each spouse, conduct during marriage, the value of the separate property of each, and the economic circumstances of both parties, there is substantial evidence to support the trial court’s division of the marital property. Weighing that evidence, this court does not have a firm belief that the division made by the trial court was wrong.

The same may be said with respect to the allowance of $20 a month maintenance to the wife. The court found her need to be $548 per month and her income $528. There is substantial evidence to support those findings. The husband earns about $13,000 per year, and the income from his separate property will augment that figure. He can obviously pay the modest support payment.

The husband also complains of the trial court’s order directing that the husband pay the wife $1,100 back support. The husband claims the court was without authority to retroactively impose an order for maintenance pending the divorce. Arguing that Section 452.315(1) RSMo 1969 was not complied with, he urges that the trial court order as to “back support” be reversed. The issue of the trial court’s power to enter an order of temporary maintenance at the time of final decree need not be reached or decided. The wife plainly did not comply with the requirement of Section 452.315(1), that a motion be filed which “shall be accompanied by an affidavit setting forth the factual basis for the motion and the amounts requested.” The obvious purpose of the statute is to permit the other party to properly present a defense to the claim for temporary maintenance. The trial court erred in entering the order for temporary maintenance.

The cause is reversed with directions to amend the decree as to the $1,100 back support. As amended, the decree is affirmed.

All concur.


author: HARBISON, Justice.

text:
    W & O CONSTRUCTION CO., INC., Appellant-Plaintiff, v. CITY OF SMITHVILLE, Appellee-Defendant.
    Supreme Court of Tennessee.
    Nov. 21, 1977.
    T. Eugene Jared, Cookeville (Cameron & Jared, Cookeville, of counsel), for appellant-plaintiff.
    McAllen Foutch, Smithville, for appellee-defendant.
   OPINION

HARBISON, Justice.

This suit was brought by a contractor to recover extra costs for rock removal under a building contract with the City of Smith-ville for the erection of a waste water treatment plant. The Chancellor sustained a motion of the defendant to strike a number of documents exhibited to the complaint and also sustained a motion to dismiss for failure to state a claim upon which relief could be granted. Plaintiff has assigned error to these rulings.

After the case had been briefed and orally argued in this Court, plaintiff tendered a detailed amendment to its complaint, seeking to add a number of material factual allegations and to establish a claim of waiver or estoppel with respect to the controlling contract provisions. Neither waiver nor estoppel was plead in the original complaint, nor were facts alleged tending to establish either of these theories.

There is authority for amending pleadings in an appellate court in order to correct technical or formal errors, such as the proper capacity of a party or the designation of a pleading. See Royal Indemnity Company v. Schmid, 225 Tenn. 610, 474 S.W.2d 647 (1971); American National Ins. Co. v. Thompson, 44 Tenn.App. 627, 316 S.W.2d 52 (1957). Parties may not ordinarily amend pleadings in an appellate court, however, to set up new claims or defenses of a substantive nature, particularly where no application for amendment was made in the trial court. See McEwen v. Gillespie, 71 Tenn. 204 (1879); Fogg v. Union Bank, 63 Tenn. 539 (1874); Loftis v. Stuyvesant Ins. Co., 54 Tenn.App. 371, 390 S.W.2d 722 (1965).

The record in the present case shows that suit was filed on March 12,1976. Motion of the defendant to strike certain exhibits and to dismiss was filed November 18, 1976. Pinal judgment on these motions was entered on March 29, 1977. At no time, either prior to or subsequent to the ruling of the trial judge on these motions, does it appear that any amendment to the complaint was offered, despite the fact that the sufficiency of its allegations was directly challenged. Accordingly, we are of the opinion that the motion to amend here, at this stage of the proceedings, to add material factual allegations and theories of recovery is not well taken and should be denied. In reviewing the action of the trial judge, we must consider the complaint as it was presented to him on motion to dismiss. So viewing it, we are of the opinion that his rulings were correct.

This case involved a public works contract, which was let on competitive bidding. On its face, the contract shows that the work was funded in part by grants from a number of federal agencies and from the state. It was bid by plaintiff on a lump-sum basis, not by unit prices or on a cost-plus arrangement. Plaintiff alleged that it was an experienced and well-qualified contractor, having built or enlarged a number of similar sewage treatment plants in the Middle Tennessee area. Exhibited to the complaint were the contract documents and the detailed specifications. Since these represented the foundation of the suit, their provisions were incorporated into and became part of the pleadings and could properly be relied upon by both parties. Rule 10.03 T.R.C.P.

The complaint alleged that in excavating the construction site plaintiff encountered a large quantity of rock which had been unanticipated, and which plaintiff had been led to believe did not exist because of some core drillings done by an engineering firm prior to the letting of bids. The project engineer called attention to these core drill-ings in the instructions to bidders, but it is clear from the plans and specifications that ultimate responsibility for subsurface conditions rested upon the contractor, not upon the owner or the project engineer.

In the original complaint, plaintiff claimed a breach of paragraph 21 of the General Conditions, which provided that if materially different subsurface conditions were found from those shown on the plans or specifications, the contractor should give notice to the project engineer before the conditions were disturbed. The contract provided that the engineer would investigate the conditions, and that if he found that these so warranted, he would make appropriate changes in the plans or specifications. Any increase or decrease in cost was to be adjusted as provided in paragraph 17 of the General Conditions. The latter paragraph set out methods of computing additional costs but expressly provided that changes in the work were not authorized without express written approval from the owner.

Paragraph 22 of the General Conditions also disallowed claims for extra work or costs unless done pursuant to written order of the architect, approved by the owner.

No such written order, either prior or subsequent to the removal of rock, was alleged in the complaint, nor were there any allegations that this requirement was waived or that the owner was estopped to rely upon the contract provisions.

Generally such provisions in building contracts are valid and binding according to their terms. See Bannon v. Jackson, 121 Tenn. 381, 117 S.W. 504 (1908). Such provisions, of course, may be altered, abrogated or waived, but facts showing such modifications must be alleged. See 13 Am.Jur.2d, Building and Construction Contracts §§ 22—25; Annot., 2 A.L.R.3d 620 (1965) (private building contracts); Annot., 1 A.L.R.3d 1273 (1965) (public contracts).

The original complaint alleged that the engineer and owner were notified of the additional rock which had been encountered by plaintiff, but at no point is there any allegation that additional compensation was authorized or agreed upon. Plaintiff apparently performed the contract, was paid the agreed price, and, according to its complaint, only claimed a breach because of non-compliance with paragraph 21 of the General Conditions, above referred to. The complaint alleged that written notice was given to the project engineer. In addition plaintiff sought to attach to the complaint, without explanation or elaboration, some fifteen letters which passed between plaintiff, the engineer and some of the federal funding agencies over a period from July 1973 to January 1976. It was these letters which were stricken by the trial judge, because the facts which they purported to, show were nowhere stated in the complaint, nor were these the documents upon which the claim was founded under Rule 10, T.R. C.P. The complaint merely stated that these documents were “material” to the rock encountered and to the notice given.

We are of the opinion that the trial judge correctly sustained the motion to strike these documents. Rule 8.01 requires that the facts upon which a claim for relief is founded must be stated, and this cannot be done simply by exhibiting a series of correspondence without elaboration or comment. The fact that notice was given and that rock was encountered had already been alleged in the complaint, and if these exhibits were material only to support those allegations, they were unnecessary and redundant. See Rule 12.06, T.R.C.P.

In addition to suing for breach of paragraph 21, however, plaintiff, in a concluding paragraph to the complaint, listed, without elaboration or statement of any factual basis, several other theories of relief, these being subsequent parol amendment to the contract, implied contract, quantum meruit and unjust enrichment. In its appeal brief, plaintiff claims that the foundation for at least some of these additional theories was contained in the exhibited correspondence. Again, however, the manner in which the correspondence purported to show a basis for such claims is nowhere stated in the complaint, and a mere listing of a series of theories of recovery does not, in and of itself, state a cause of action.

Although we are satisfied that the trial judge correctly sustained defendant’s motion to strike this correspondence, we have examined the contents thereof. It affirmatively shows that no written change order was ever authorized by the owner, or by the federal funding agencies, and that no agreement was ever made by the owner or by any responsible funding agency to compensate the plaintiff for the removal of rock. Indeed, on at least two occasions, officials of the funding agencies pointed out the failure of the contractor to comply with the contract provisions under which a change order might have been obtained and additional compensation authorized.

With or without the stricken material, we are of the opinion that the complaint fails to state a breach of contract in that it fails to show that any written change order was ever obtained, nor are there any facts alleged showing waiver, modification or abrogation of this express contract requirement with which an experienced building contractor, such as plaintiff, must have been familiar.

The judgment of the trial court is affirmed at the cost of appellant.

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


author: TODD, Judge.

text:
    Robert L. DERRYBERRY and wife, Bertha M. Derryberry and Harold N. Derryberry, Plaintiffs-Appellees, v. Paul W. PRATT and Aetna Insurance Company, Defendants-Appellants.
    Court of Appeals of Tennessee, Middle Section.
    Aug. 26, 1977.
    Robert W. Knolton of Leech, Hardin & Knolton, Columbia, for plaintiffs-appellees.
    Jerry Colley of MacFarland, Colley, Blank & Jack, Columbia, for defendants-appellants.
   OPINION

TODD, Judge.

Aetna Insurance Company, uninsured motorist insurer of plaintiff, has appealed from the refusal of the Trial Judge to set aside a default judgment against an alleged uninsured motorist and in favor of plaintiffs.

This suit was filed by three plaintiffs against Paul W. Pratt for injuries and damages in an automobile collision allegedly resulting from the negligence of Pratt. Process was regularly issued and served upon Pratt.

A summons was also issued against and served upon Aetna Insurance Company. Aetna Insurance Company was not named in the complaint; no right was asserted against Aetna Insurance Company; and no judgment was sought therein against Aetna Insurance Company.

On January 14, 1976, a motion was made for judgment by default and writ of inquiry against Paul W. Pratt for failure to timely plead to the complaint.

On January 20, 1976, a judgment by default was entered against Paul W. Pratt and writ of inquiry granted.

On February 17, 1976, a final judgment was entered against Paul W. Pratt and in favor of each of the plaintiffs for their respective damages.

On June 16, 1976, Aetna Insurance Company filed a motion pursuant to Rules 55.02 and 60.02 T.R.C.P. to set aside the default judgment “insofar as said default judgment affects the rights of Aetna Insurance Company.” The grounds of said motion in substance were,

1. Aetna carried uninsured motorist insurance on a vehicle owned by the plaintiff, Robert L. Derryberry.
2. The injuries and damages herein alleged occurred in a collision of the Pratt vehicle with a vehicle owned by Harold N. Derryberry, son of Robert L. Derry-berry. Neither of said vehicles were insured.
3. The uninsured motorist insurance on the vehicle of Robert L. Derryberry did not cover injuries in the subject collision because the Robert L. Derryberry vehicle was not involved in the collision and because the vehicle of Harold N. Derryberry was uninsured and owned by a member of the family of Robert L. Derryberry.
4. Aetna Insurance Company, believing that its policy did not cover the collision, so notified plaintiffs and refrained from any participation in the suit against Pratt.
5. On March 28, 1976, the opinion of the Supreme Court in the case of Harvey v. Birchfield, 535 S.W.2d 334, held that defenses of an uninsured motorist insurer must be asserted in the tort action brought against the uninsured motorist.
6. That said Supreme Court opinion was not published until May, 1976.

Said motion sought relief only to the extent of an opportunity to present its defense of lack of coverage.

On September 29, 1976, the Trial Judge overruled the motion of Aetna Insurance Company, and this appeal ensued.

The sole assignment of error complains of the action of the Trial Court in overruling the motion.

In the case of Harvey v. Birchfield, supra, plaintiff sued the uninsured motorist and served process upon her uninsured motorist insurer as provided by T.C.A. § 56-1153. Neither the uninsured motorist nor plaintiff’s insurer answered the suit, but the insurer notified plaintiff’s attorney that it denied coverage. On February 13, 1973, default judgment was entered against both parties; and, on May 8, 1973, final judgment was entered. The opinion does not state against whom final judgment was rendered. On August 14, 1973, a motion was filed to set aside the judgment and, on May 7,1974, the motion was overruled. On appeal, the Court of Appeals reversed, holding that the insurer was bound by the tort judgment only to the extent of liability of the tort-feasor and the amount of damages and not as to the question of coverage. The Supreme Court reversed the Court of Appeals and affirmed the refusal of the Trial Judge to set aside the default judgment.

With minor exceptions, Harvey v. Birchfield appears to be identical with the present case. The appellate record in said case has been retrieved from the archives and studied. It shows that the plaintiff specifically moved for and was granted a default judgment against plaintiffs’ uninsured motorist insurer, upon whom process had been served. Said record also contains a final judgment which recites:

“It further appearing to the Court that State Farm Mutual Insurance Company was regularly served with process as the uninsured motorist carrier for the Complainant, and that said State Farm Mutual Insurance Company ignored said process and failed to plead or otherwise make defense as provided by the Tennessee Rules of Civil Procedure either on its own behalf or on behalf of the Defendant herein as it had a right to do pursuant to Tennessee Code Annotated Section 56-1153, and further, that said State Farm Mutual Insurance Company had a duty to bring any lack of coverage to the attention of the Court and has failed to do so, and the Court therefore finds by the action or inaction of said Defendant that there is uninsured motorist coverage and that the said State Farm Mutual Insurance Company is bound by the judgment herein.
“It is, therefore, ORDERED, ADJUDGED AND DECREED that the Plaintiff have and recover of the Defendant, Jerry Birchfield, the sum of Nine Thousand Dollars ($9,000.00) for bodily injury and the sum of One Thousand Five Hundred Dollars ($1,500.00) as damage to her automobile, together with the costs of this cause for all of which let execution issue if necessary.”

It appears, therefore, that, in Harvey v. Birchfield, default judgment (pro confesso) was entered against the insurer, and final judgment stated that the insurer was bound thereby.

The opinion of the Supreme Court held that the insurer was precluded from pleading non-coverage in any action except the tort action against the uninsured motorist and that it was error for this Court to set aside the judgment of the Trial Court to allow the insurer to present its defenses.

Rule 60.02 T.R.C.P. reads in pertinent part as follows:

“60.02 Mistakes; Inadvertence; Excusable Neglect; Fraud, etc.
On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; . (5) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1) and (2) not more than one year after the judgment, order or proceeding was entered or taken.”

Prior to the decision of the Supreme Court in Harvey v. Birchfield, it was the announced opinion of this Court that uninsured motorist insurers were not required to litigate coverage until sued directly; wherefore, this Court would not be disposed to penalize parties whose counsel held a like opinion and acted accordingly, except for Harvey v. Birchfield.

This is especially true in the light of Rule 60.02, since the relief requested is not the avoidance of the judgment which was rendered (i. e., against Paul W. Pratt, not appellant); but the requested relief is from the bar of defense of non-coverage as imposed in Harvey v. Birchfield.

The present case might be distinguished from Harvey v. Birchfield on the ground that no judgment was entered in the Trial Court against the insurer-appellant. However, in view of the forceful and general nature of the declarations of the Supreme Court in Harvey v. Birchfield, such a distinction does not appear to be justified.

The action of the Trial Judge is affirmed. The costs of this appeal are adjudged against appellant.

Affirmed.

GILLIAM and MILES, S. JJ., concur.