author: HOWERTON, Judge.

text:
    James C. LEIBEL, Appellant, v. RAYNOR MANUFACTURING COMPANY, Appellee.
    Court of Appeals of Kentucky.
    June 23, 1978.
    Discretionary Review Denied Oct. 24, 1978.

      Todd S. Horstmeyer, Lexington, for appellant.
    Charles G. Wylie, Lexington, for appellee.
    Before HOWERTON, LESTER and WINTERSHEIMER, JJ.
   HOWERTON, Judge.

This is an appeal from a summary judgment dismissing Count I of appellant’s three-count complaint. The dismissal of Count I was deemed to be a final, appeala-ble judgment. With this we agree and accept jurisdiction.

The essential facts are that the parties entered into an oral agreement whereby appellant was to have an exclusive dealer-distributorship for appellee’s garage doors in a territory extending for a 50-mile radius from Lexington, Kentucky. The agreement was entered into on or about March 1, 1974. The appellee agreed to sell and deliver to the appellant its garage doors, operators and parts at the factory distributor price, and the appellant agreed to sell, install and service Raynor products exclusively, thereby establishing a relationship of dealer-distributor and manufacturer-supplier. There is no real dispute concerning the nature of the relationship.

As a result of the agreement, the appellant borrowed substantial sums of money in order to make certain capital expenditures, purchase an inventory, and to provide working capital for starting the business, including the rental of storage and office space, employment of personnel, and the purchase of a service truck, tools and equipment.

After two years of what appears to have been decreasing sales of Raynor products in the Lexington area, appellee notified the appellant on or about June 30,1976, that as of that date the relationship was terminated. Appellant was also notified that Helton Overhead Door Sales had been established by the appellee as the new dealer-distributor for the area, and that the appellant would be required to order all future doors, operators and parts from the new dealer-distributor.

Appellee’s motion for a summary judgment was based on the ground that the agreement was for an indefinite duration, and that it could be terminated at will by either party. The appellant resisted the motion on the theory that he was entitled to reasonable notice of appellee’s intention to terminate the agreement.

On April 20,1977, the circuit court granted the summary judgment and entered its memorandum opinion, setting forth its four reasons for the judgment. Appellant had relied in part upon the provisions regarding sales in the Uniform Commercial Code, and specifically subsections (2) and (3) of KRS 355.2-309. The trial court concluded that the Code, as it applies to the sale of goods, was not intended to apply to the situation in this case. Secondly, the court concluded that even if the Uniform Commercial Code did apply, KRS 355.2-309(2), (3) means merely that actual notice of the termination must be given. Written notice had been given. The court concluded that the additional requirement of “reasonable notification” was not necessary. The opinion next concluded that although there are no Kentucky cases directly on point, Peters Branch of International Shoe Company v. Jones, 247 Ky. 193, 56 S.W.2d 994 (1933), holds that in an exclusive franchise agreement where there was no agreement as to the duration of the contract, either party could terminate the agreement at will, and there was no mention of notice. Finally, the court concluded that if it required reasonable notification for termination of the agreement, it would be making a contract for the parties by stating a time for the duration of the contract.

We disagree with the conclusions of the trial court and hold that reasonable notification is required in order to terminate an on-going oral agreement for the sale of goods in a relationship of manufacturer-supplier and dealer-distributor or franchisee. The summary judgment must therefore be set aside and a determination must be made on the factual issue of whether or not the notification of termination given in this case was reasonable under the circumstances.

Appellant argues that this contract is now controlled by Article II of the Uniform Commercial Code. The opinion of the trial court provided only that, “It is the opinion of the court that the Uniform Commercial Code applies to the sale of goods and is not intended to apply to the type of situation we have in this case.” The rule for application of Article II in Kentucky was stated in Buttorff v. United Electronic Laboratories, Inc., Ky., 459 S.W.2d 581 (1970). According to the opinion in Buttorff, supra, we are to look to the real nature of the agreement, the real purpose, and what the parties really intended. It appears that the case sub judice can be distinguished from Buttorff, supra, on its facts. The relationship in But-torff, supra, was found to be a contract for personal services, not for the sale of goods or merchandise. Buttorff was actually a commissioned salesman for United Electronics Laboratories’ cameras and related equipment.

We must now consider the provisions of the Uniform Commercial Code in order to determine whether or not the article on sales is applicable to the situation at bar. This question has not yet been decided by a Kentucky court.

Article II of the Uniform Commercial Code applies to transactions involving goods and merchandise. “A contract between an automobile manufacturer and an automobile dealer is a contract of sale since it is apparent that its over all purpose and object is to effect the sale of the automobiles manufactured by the manufacturer, and the fact that it may speak in terms of franchises does not change its true character.” 1 Anderson, U.C.C. § 2-101:5, p. 201 (2nd ed.) “When a manufacturer sells its product to the public through a local dealer, the transaction is a sale, and the application of the Code is not avoided by describing the relationship as a ‘sales distribution’ plan.” Id., at 202. In relation to the same section of the Code, Anderson also cites a Pennsylvania case which held that, “A dealership contract for the sale of automobile parts is a contract for the sale of goods, even though the contract declares that it is a personal service contract.” Cum.Supp., Anderson, U.C.C., p. 174 (2nd ed.) Anderson also cites a California case holding that, “Where a supplier of milk agreed with a distributor that the latter would resell milk purchased from the supplier to wholesalers, the relationship between the supplier and the distributor was a sale of goods, and not a contract for services.” Id.

In the case at bar, we have a clear situation where the dealer-distributor was to sell the “goods” of the manufacturer-supplier. Appellant was not a commissioned salesman, and the agreement appears to be for the sale of goods.

We conclude that the time has come to recognize that a distributorship agreement must be recognized as an agreement for the sale of goods and subject to the provisions of Article II of the Uniform Commercial Code, which has been adopted by Kentucky in Chapter 355 of the Kentucky Revised Statutes. The amount of money being invested pursuant to distributorship agreements is ever increasing. Often there are no formal written agreements, and it may be that the manufacturer’s policy is to have no written agreements. By not establishing a length of time for the contract to exist, either party may terminate the relationship at will, but without a requirement for good faith and fair play, either party may be severely damaged. When sales are the primary essence of the distributorship agreement, the dealer is compelled to keep a large inventory on hand. If the distributorship is terminated without allowing the dealer sufficient time to sell his remaining inventory, substantial damages may result, even if the manufacturer agrees to repurchase the inventory. Reasonable notification should be the minimum amount of protection afforded to either party upon the termination of an ongoing sales agreement. When such reasonable notice is not given, a cause of action for damages may exist.

Having concluded that the Code is applicable to the relationship between the appellant and appellee, we must look at the specific requirements of KRS 355.2-309, “Absence of Specific Time Provisions — Notice of Termination.” Subsection (2) reads, “Where the contract provides for successive performances, but is indefinite in duration, it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.” Subsection (3) goes on to provide, “Termination of a contract by one (1) party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable.” There can be no doubt that reasonable notice is now required, whether or not prior Kentucky decisions, such as Peters Branch of International Shoe Company v. Jones, supra, which was relied upon by the trial court, held that notification was not required in an agreement which could be terminated at will. There is a real question of whether Jones, supra, actually reached a decision on the reasonable notice question, but we need not determine that point here. Today, in Kentucky, if the provisions of Article II of the Uniform Commercial Code apply to the relationship, reasonable notice of the intention to terminate the agreement must be given. In some cases, it would be required even if a written agreement provided for dispensing with notification. We therefore find additional error in the trial court’s opinion when it concluded that even if the provisions of the Code were applicable, only actual notice of termination would be required.

Comment 8 to § 2-309 in 1 Anderson, supra, at p. 445 reads:

Subsection (3) recognizes that the application of principles of good faith and sound commercial practice normally call for such notification of the termination of a going contract relationship as will give the other party reasonable time to seek a substitute arrangement. An agreement dispensing with notification, or limiting the time for the seeking of a substitute arrangement, is of course valid under this subsection unless the results of putting it into operation would be the creation of an unconscionable state of affairs.

It is also quite clear that the requirement of a reasonable notification does not relate to the method of giving notice, but to the circumstances under which the notice is given and the extent of advanced warning of termination that the notification gives.

Anderson, supra, in the cumulative supplement volume at p. 282, cites two Minnesota cases relating to the time which might be needed for recoupment of investment. McGinnis Piano and Organ Co. v. Yamaha International Corporation, 480 F.2d 474 (8th Cir. 1973) is cited for the proposition that “in some states, it is implied that a dealership contract which may be terminated upon notice must be allowed to continue for a sufficient period to enable the franchisee to recoup his investment.” The case of O. M. Droney Beverage Co. v. Miller Brewing Co., 365 F.Supp. 1067 (D.Minn.1973), is cited for the proposition that “under Minnesota law ‘a reasonable duration will be implied in franchise agreements where a dealer has made substantial investments in reliance on the agreement.’ ”

The distributorship agreement existing between appellant and appellee is one in which the essence was the sale of goods. Appellant was certainly not an employee or commissioned salesman of appellee. Appellant purchased the products of the appellee at wholesale prices, and marketed them in the Lexington area. The appellant does not dispute the fact that the agreement was terminable at will, but he contends, and the law so holds, that the appellee was required to give reasonable notification of intent to terminate the contract. What length of time constitutes reasonable notice is a question of material fact which remains to be decided. We cannot say that the written notice given in this case was “reasonable” as a matter of law.

The summary judgment granted by the trial court must therefore be vacated, and the case remanded for further proceedings.

All concur.


source: Caselaw Access Project

author: GANT, Judge.

license: Public Domain

text:
    UNITED STATES FIDELITY & GUARANTY COMPANY, Appellant and Cross-Appellee, v. NAPIER ELECTRIC & CONSTRUCTION COMPANY, INC., Hadward Napier and Frances Napier, Appellees and Cross-Appellants.
    Nos. 76-316, 76-348.
    Court of Appeals of Kentucky.
    July 7, 1978.

      C. Dant Kearns, John W. Potter, Stites, McElwain & Fowler, Louisville, Richard D. Cooper, Cooper, Gullet, Combs & Engle, Hazard, for appellant.
    Lohren F. Martin, Jr., Rose, Martin & Scalf, Williamsburg, for appellees.
    Before GANT, HOWARD and HOWER-TON, JJ.
   GANT, Judge.

The corporate appellee contracted to construct the sewer lines, water lines and a sewage treatment facility for Woodson Bend, Inc., near Somerset, Kentucky. Appellant, United States Fidelity & Guaranty Company, was surety on two bonds for the corporate appellee, one being a Labor and Material Payment Bond in the face amount of $778,000, obligating the appellant to pay all materialmen and suppliers should the appellee default; the other being a Performance Bond, binding the appellee to complete the project in the event of default. As a part of the consideration for writing this and other bonds for the corporate ap-pellee, the latter, together with the individual appellees, owners of the corporation, executed an Indemnity Agreement to the appellant, which bound the appellees to indemnify the appellant for all “liabilities, losses and expenses” incurred by the appellant, including all amounts paid by appellant “in good faith under the belief that: (1) Surety was or might be liable therefor; (2) Such payments were necessary or advisable to protect any of Surety’s right or to avoid or lessen Surety’s liability or alleged liability.

Appellee defaulted on his contract, causing the appellant to pay out $145,956.98 as surety on the Labor and Material Payment Bond to materialmen and suppliers who had not been paid by the appellee company, even though draws had been paid by the owner to that company pursuant to progress reports. In order to complete the project, under the terms and conditions of the Performance Bond, another contractor was hired for the sum of $257,000, the owner applying the unpaid sums remaining on the contract and the appellant paying the balance of $124,163.36. Thereafter, appellant instituted this suit asking the sum of $270,120.34, basing the action on the written Indemnity Agreement signed by the appellee and not on the surety relationship.

The lower court held as a matter of law that all sums paid by the appellant under the Performance Bond were paid in good faith- — indeed there was no evidence to the contrary. The evidence further disclosed that the appellant had, in fact, paid the sum of $124,163.36 for completion of the project. The parties stipulated that the Indemnity Agreement was valid and binding. This case was submitted to the jury under instructions objected to by both appellant and appellees, which jury returned a verdict in favor of the appellant for $40,877.98.

Appellant directs its argument primarily toward its contention that, under the circumstances of this case, appellant was entitled to a directed verdict in the amount of $270,120.34. As hereinabove pointed out, this was an action based upon the Indemnity Agreement, not an action based upon the surety contract or quantum merit. The instructions to the jury, herein, permitted the jury to find such things as the “fair market value of all materials,” the “fair standard cost of labor and services,” the “amount necessary to complete the performance of the contract,” and other extraneous matters. We feel that the law is well settled in Kentucky as set out in the case of National Surety Corp. v. Peoples Milling Co., 57 F.Supp. 281 (W.D.Ky.1944), in which the court states:

The right of an indemnitee to recover of the indemnitor under a contract of indemnity according to the terms of such a contract is well recognized. Such a contract is not against public policy and will be enforced if the indemnitee has suffered loss thereunder and has complied with its terms. Id. at 282.

In a case in which the Indemnity Agreement was virtually identical with the one in the instant case, originating in Texas and under the law of that state which we conceive to be the same as that of Kentucky, the guidelines for indemnity are clearly set out. This case is the case of Engbrock v. Federal Insurance Co., 370 F.2d 784 (5th Cir. 1967).

It is our opinion that the following law applies to the case before us:

1. The nature of an indemnitor’s liability under an indemnity contract shall be determined by the provisions of the indemnity agreement itself.

2. The provisions of an indemnity agreement that vouchers or other evidence of payments or an itemized statement of payments sworn to by an officer of the surety shall be prima facie evidence of the fact and extent of the liability of the in-demnitor to the surety, and provisions that the indemnitor shall be liable for all liabilities, losses and expenses incurred by the surety and all sums paid by the surety in good faith under the belief that surety was or might be liable for said payments or that said payments are necessary and advisable to protect the surety’s right or to avoid and lessen the surety’s liability were not against public policy.

3. Under an indemnity agreement containing the provisions hereinabove set out in Paragraph 2, the indemnitor may successfully attack payments made by the surety only by pleading and proving fraud or lack of good faith by the surety.

Applying the above standards to the case at bar, the Indemnity Agreement, which was stipulated, to be valid and binding, called for the indemnitor to pay the surety for all liabilities, losses and expenses and for all sums paid by the surety in good faith. There was no proof of bad faith or fraud on behalf of the surety and the lower court found on sufficient evidence that all payments were made in good faith. The surety provided proper evidence pursuant to the agreement of all payments made under both the Labor and Material Payment Bond and the Performance Bond. There was no issue to submit to the jury, and the instructions under these facts were clearly erroneous.

For the reasons above stated, this case is reversed and remanded to the lower court with directions to enter judgment therein for the appellant against the appellees in the amount of $270,120.34.

All concur.


author: WHITE, Judge. PARK, Judge,

text:
    Charlie W. TEMPLE, Jr., Administrator of the Estate of Charlie W. Temple, III, Appellant, v. Eugene HELTON and Mark A. Helton, Appellees.
    No. 78-CA-139-MR.
    Court of Appeals of Kentucky.
    Sept. 22, 1978.
    John E. Anderson, Barbourville, for appellant.
    Herman E. Leick, Corbin, Robert L. Mil-by, London, for appellees.
    Before WHITE, HOGGE and PARK, JJ.
   WHITE, Judge.

This appeal involves an action for wrongful death in which a jury verdict was returned in favor of defendant-appellees. Two issues are presented on appeal: (1) whether plaintiffs were entitled to a directed verdict on the theory of res ipsa loquitur and (2) whether defendant’s testimony that he was not under the influence of drugs or any intoxicant at the time of the accident had the effect of a judicial admission, barring any instruction on contributory negligence.

On the night of June 4, 1975, appellee Mark A. Helton, Gail Steenburgen, Carolyn Sears and Charlie W. Temple III were en route from Corbin, Kentucky to Knoxville, Tennessee to attend a rock concert when the car in which they were traveling was involved in a one-car accident. Appellee Mark A. Helton was the driver. Charlie Temple III sustained fatal injuries as a result of the accident. Ms. Steenburgen received a broken pelvis, ruptured bladder and concussion; Ms. Sears and appellee also received injuries necessitating hospitalization for a short period of time. This lawsuit was brought by Ms. Steenburgen and Charlie Temple, Jr., as administrator of the estate of Charlie Temple III, seeking damages as a result of appellee’s alleged negligence. Ms. Steenburgen does not appeal the judgment.

The accident occurred around midnight on the stretch of highway detouring 1-40 approximately 35 miles east of Knoxville. No other cars were involved in the accident and no testimony was offered by either side as to the cause of the accident, except for testimony by Ms. Sears and Ms. Steenbur-gen that all four occupants of the vehicle had smoked three marijuana cigarettes while en route to Knoxville. Appellee denied being under the influence of any drug or intoxicant at the time of the accident.

At the close of all evidence, appellant moved for a directed verdict on the issue of liability, which motion was overruled. Upon tender of instructions, appellant objected to Instruction B concerning the issue of contributory negligence. Appellant now asks this court to find that the instruction concerning, contributory negligence was erroneous because no proof was offered that appellant’s decedent knew that appellee’s driving ability was affected by the use of marijuana. Furthermore,, appellant contends the instruction was erroneous because Mark Helton’s testimony that he was not under the influence of drugs amounted to a judicial admission that since he was not under the influence of drugs, appellant’s decedent could not have been contributorily negligent in riding with appellee.

Upon a thorough examination of the record and points raised in both parties’ briefs, we find the case pivots on Instruction A. Instruction A recites the duty of ordinary care imposed upon a driver of an automobile to insure the safety of his passengers. In addition to this duty, four specific duties incorporated in the general duty are enumerated. Following this, Instruction A states:

If you believe from the evidence that the defendant, Mark Helton, failed to observe any one or more of these duties and that such failure, if any, was a substantial factor to the collision and to the injuries and damages sustained by the plaintiffs, then the law is for the plaintiffs, and you will so find. However, unless you so believe, or if you believe as set forth in Instruction No. B [concerning contributory negligence], you will find for the defendants on the claim of Charlie W. Temple, III .

The verdict form allowed for the jury to find either for defendant or plaintiffs.

As Instruction A reads, it allows the jury to find appellee was not negligent, absent any consideration of contributory negligence. No objection was made to Instruction A. Since no special interrogatories were submitted to the jury, we cannot make a determination of whether the jury found for defendant because he was not negligent or because plaintiffs were con-tributorily negligent. In Mason v. Stengell, Ky., 441 S.W.2d 412, 417 (1969), the Court of Appeals held where there is prejudicial error affecting one of the grounds of action or defense presented, a general verdict must generally be set aside if it cannot be determined on which issue or defense the jury relied.

Appellant contends such error occurred when the court refused to consider appel-lee’s testimony as a judicial admission. Bell v. Harmon, Ky., 284 S.W.2d 812, 817 (1955), cautions, “. . . it is only in exceptional cases that a verdict should be directed on the ground of judicial admission in negligence cases . . . .” Sutherland v. Davis, 286 Ky. 743, 151 S.W.2d 1021, 1024 (1941), the leading case on the point, explains the consequences of a judicial admission:

. [A] judicial admission is conclusive, in that it removes the proposition in question from the field of disputed issue, and may be defined to be a formal act done in the course of judicial proceedings which waives or dispenses with the necessity of producing evidence by the opponent and bars the party himself from disputing it; and, as a natural consequence, allows the judge to direct the jury to accept the admission as conclusive of the disputed fact.

In Sutherland, the court found plaintiff’s testimony that defendant was drunk when she accepted a ride from him as a judicial admission barring plaintiff from recovery on the grounds of her contributory negligence. The defendant had testified he was not intoxicated. Appellant cites Sutherland in support of his position; we feel this case in fact tends to support appellee’s viewpoint. In this case, like Sutherland, the appellant-plaintiff offered proof inferring appellee-defendant was negligent due to his intoxication or use of marijuana, even though appellee testified he was not under the influence of any drug. Appellant wants us now to disregard the very evidence he offered to impute negligence to the driver and instead rely on the appellee’s testimony to remove the cloud of contributory negligence appellant created. Appellant seeks this court’s assistance in placing the appellee in an untenable position. First appellant introduces evidence inferring ap-pellee was negligent in operation of the vehicle as a result of smoking marijuana. Since this very evidence would result in the possibility that appellant’s decedent was contributorily negligent, appellant contends this evidence must be disregarded because appellee stated he did not smoke marijuana on this occasion. Because no cause of the accident was proved, other than possible negligence through appellee’s use of marijuana, appellant argues the doctrine of res ipsa loquitur applies. Thus, appellant may recover under either theory. If appellee admits to use of the marijuana, he opens himself to the charge of negligence; if he denies its use, he relieves himself of the defense of contributory negligence. Appel-lee is thus responsible under either theory.

Sutherland, supra, lists five circumstances which should be considered in determining whether or not a party’s statement rises to a judicial admission. One of these five is whether testimony sought to be declared an admission is contradicted by other witnesses. In this case appellant’s witnesses contradicted the very testimony he sought to have declared an admission. We feel the trial court correctly perceived the issue as a question of fact and placed before the jury the resolution of same through an instruction on negligence. Since no error is perceived in Instruction B and since no objection was made as to Instruction A, there is no basis for disturbing the jury verdict.

Once it is determined that the issue of contributory negligence was properly put before the jury, appellant’s contention that he was entitled to a directed verdict on the issue of liability must necessarily fail.

The judgment is affirmed.

HOGGE, J., concurs.

PARK, J., concurs by separate opinion.

PARK, Judge,

concurring.

I concur with the decision to affirm the judgment of the circuit court.

The circuit court did not err in failing to direct a verdict on the issue of Helton’s negligence in the operation of the van in which Temple was a passenger. At trial, Temple’s administrator made no objection to Instruction A relating to the duties of Helton in the operation of the van. Had an objection been made, he would have been obligated to state the grounds of his objection to Instruction A. CR 51(3). Temple’s administrator relies upon the fact that he filed a motion for a directed verdict “on the question of liability.” However, the motion for directed verdict was not accompanied by a statement of the “specific grounds therefore.” CR 50.01. Failure to specify the grounds for a directed verdict forecloses appellate review of the circuit court’s denial of the motion for directed verdict. Hercules Powder Co. v. Hicks, Ky., 453 S.W.2d 583 (1970).

The circuit court did not err in refusing to direct a verdict on the issue of Temple’s contributory negligence.

For the reasons stated in the majority opinion, I agree that Helton’s denial that he smoked marijuana was admissible as the admission of a party opponent, but that it was not a binding judicial admission that marijuana was not a factor in the accident. In Bryant v. Corley, Ky., 455 S.W.2d 566, 569-70 (1970), the court stated:

In other words, that a litigant has made inconsistent statements on a critical issue of fact does not always and inexorably destroy his case. It depends to some extent on what the fact in issue is and what the rest of the evidence indicates. In the final analysis, the question adds up to whether upon the whole case, including but not limited to his self-stultification, a verdict in his favor would be unconscionable. The same is true when the witness whose testimony is under consideration does not happen to be one of the litigating parties.

See also McCormick on Evidence § 267 (2d Ed. 1972). The trial judge in the exercise of discretion should be permitted to determine on the basis of all of the evidence whether the party’s testimony should be deemed a judicial admission. As has been stated:

The truth of the case depends on a comparison of what all the witnesses say and all the circumstances indicate. A rule which binds a party to a particular statement uttered on the stand becomes an artificial rule. It is out of place in dealing with testimony. Let the judge test each case by itself.

9 Wigmore on Evidence § 2594a, pg. 601 (3d Ed. 1940). Taking into consideration all of the evidence in the case, the trial judge did not err in refusing to treat Helton’s testimony as a judicial admission.

One of the girl passengers in the van was also a plaintiff in the case. She testified that Helton smoked marijuana. Arguably, this was a judicial admission on the issue of her contributory negligence. The trial court wisely left the credibility of the parties to the jury.

The evidence in the case justified submitting the issue of Temple’s contributory negligence to the jury. According to the testimony of the two girl passengers, Helton, Temple and the girls together smoked three marijuana cigarettes during the drive from London to Knoxville. There was expert testimony that marijuana could affect a person’s judgment and ability to drive. Helton drove 35 miles beyond Knoxville before he decided that he had missed the exit for the rock concert in Knoxville. When returning to Knoxville over the same road, the van left the highway for no apparent reason. Based upon this evidence, a jury could reasonably believe that Helton’s judgment and ability to operate the van was impaired by the smoking of marijuana, that the accident was the direct result of Helton’s impaired judgment, that Temple was aware of Helton’s condition, and that a reasonably prudent person would not have ridden with Helton under the circumstances.

Therefore, I agree with the decision to affirm the judgment of the circuit court.


author: REYNOLDS, Judge.

text:
    Kim Lee ESTELL, Appellant, v. Robert BARRICKMAN, Appellee.
    No. 78-CA-245-MR.
    Court of Appeals of Kentucky.
    Sept. 22, 1978.

      Robert P. Hastings, Louisville, for appellant.
    William P. Swain, Raymond 0. Harmon, Louisville, for appellee.
    Before MARTIN, C. J., and REYNOLDS and WILHOIT, JJ.
   REYNOLDS, Judge.

This is an appeal from a summary judgment granted appellee, Robert Barrickman, on the issue of his liability for injuries incurred by the appellant, Kim Lee Estell, while a passenger in a vehicle owned by Barrickman, but driven by his employee. The sole question presented is whether the trial court was correct in concluding that there was no genuine issue of material fact as to Barrickman’s liability.

This action arose out of an accident that occurred on November 18, 1975, when the truck driven by Barrickman’s employee, Davis Chipman, went out of control and flipped over while towing a disabled car. The parties agree that Estell was not an employee of Barrickman, but rather rode along with Chipman merely to provide him with company. It is further agreed that at the time of the accident, Chipman was on an authorized service run for his employer, Robert Barrickman, d/b/a Barrickman’s Standard Service Station, which is a sole proprietorship. It also appears uncontra-dicted that while not aware that Estell had accompanied Chipman on this particular occasion, Barrickman did have knowledge of other instances where Chipman, as well as a fellow employee, had taken nonbusiness passengers, including Estell, along with them on service runs. While Chipman was relatively unhurt, Estell sustained severe injuries and subsequently filed suit against both Barrickman and Chipman. The judgment, which dismissed the complaint as to Barrickman only, did not specifically state the grounds for the dismissal, but the decision appears to be based on the principle that Chipman had no authority to invite Estell to ride along with him, and thus was not acting within the scope of his employment.

Estell argues that, because Barrickman placed no restrictions on who his employees might take along as passengers and, in fact, never objected when he saw nonbusiness passengers, including Estell, riding in his vehicle, his apparent acquiescence raises a question of fact as to whether Chipman had permission or authority to take guests with him on service runs. Barrickman, on the other hand, contends that the law is clear that an employee has no implied authority to permit a third person to ride in his employer’s vehicle, and that, if the guest sustains injuries as a result of the employee’s negligence, the employer will not be liable because the employee is not acting within the scope of his authority. Wigginton Studio v. Reuter’s Administrator, 254 Ky. 128, 71 S.W.2d 14 (1934). Barrickman also asserts that even conceding that he had seen Estell in the wrecker on other occasions, such is not material to this case because she was not his invitee then, or on the particular day in question.

While it is true that, in general, a servant has no implied authority to invite a third party to ride in his employer’s vehicle, we cannot agree with Barrickman’s contention that his knowledge of other occasions where nonbusiness passengers rode in his vehicle is immaterial to this case. Rather, we are of the opinion that if evidence of such knowledge is substantial enough, a question of fact is raised as to whether this knowledge and lack of objection make the nonbusiness passenger an invitee of the employer or constitutes a grant of apparent authority to the employee to offer these rides. While no cases were cited by Estell for this proposition, and though we are unable to discover any Kentucky cases involving this particular situation, we have found cases in other jurisdictions that have held that evidence of the owner’s knowledge of an employee’s practice of giving rides to nonbusiness passengers presents a jury question as to the owner’s liability for the passenger’s injuries. In Wright v. Wright, 229 N.C. 503, 50 S.E.2d 540 (1948), the North Carolina Supreme Court held it was error to grant a nonsuit at the close of the plaintiff-passenger’s case where the evidence showed that the owner of the taxi had never told his driver not to take the driver’s child, the plaintiff, with him, and had in fact seen the child in the taxi on several occasions, including the night of the accident. The court stated that evidence of the knowledge and consent of the owner to this practice was sufficient to raise the inference that the passenger was the owner’s guest or invitee, and that the question of the owner’s liability should have been submitted to the jury. In DeParcq v. Ligget & Myers Tobacco Company, 81 F.2d 777 (8th Cir. 1936), the Court held it was error to refuse to submit to the jury the question of whether the “no riders” rule had been waived where the employee responsible for enforcing this rule had knowledge of rides given by another employee to nonbusiness passengers. The Court also ruled that these rides constituted evidence of a holding out by the employee responsible for enforcement of the “no riders” rule that the driver had apparent authority to permit nonbusiness passengers to ride with him, and that such a holding out sufficiently clothed the driver with apparent authority so as to allow riders to rely on this authority, and thus presented a jury question as to the driver’s apparent authority. At this point, we believe that in order to avoid confusion we should distinguish between implied and apparent authority. Implied authority is actual authority, circumstantially proven, which the principal is deemed to have actually intended the agent to possess, and includes only such powers as are practically necessary to carry out the duties actually delegated. 3 Am.Jur.2nd Agency § 71. Apparent authority is not actual authority, but rather “is that which, by reason of prevailing usage or other circumstance, the agent is in effect held out by the principal as possessing. It is a matter of appearances, fairly chargeable to the principal and by which persons dealt with are deceived, and on which they rely.” Annot., 2 A.L.R.2d 406, 407 (1948).

Here, Estell testified, (deposition of Kim Lee Estell, Pages 9-10) and Barrick-man did not deny, that Barrickman had not only seen her riding in his vehicle with Chipman, but also had observed another employee and his girlfriend riding in this vehicle. It is also undisputed that Barrick-man did not voice any objections to these activities. It is our opinion that whether Estell’s theory of recovery against Barrick-man is premised upon the apparent authority of the employee discussed in the DeParcq case, supra, or merely on the principle of respondeat superior based on the appellee making the appellant his invitee by his acquiescence, Wright, supra, the evidence presented to this point requires the judgment be reversed and the case remanded for trial on the question of Barrickman’s liability for Estell’s injuries. In determining whether a genuine issue of material fact exists, all doubts as to the existence of a question of fact must be resolved against the moving party. Tillery v. Louisville & Nashville Railroad Co., Ky., 433 S.W.2d 623 (1968). In this case, we believe that Bar-rickman’s inaction with respect to his employee’s practice of permitting nonbusiness passengers to ride in his vehicle raises sufficient doubt so as to preclude summary judgment.

The judgment is reversed.

All concur.


author: SMITH, Judge.

text:
    Patricia Marie HUFF, Plaintiff-Appellant, v. David LaSIEUR, Defendant-Respondent.
    No. 38653.
    Missouri Court of Appeals, St. Louis District, Division One.
    July 25, 1978.
    Motion for Rehearing and/or Transfer Denied Sept. 15, 1978.
    Application to Transfer Denied Nov. 6, 1978.
    Elmer C. Oberhellmann, St. Louis, for plaintiff-appellant.
    Sommers & Holloran, Inc., Don B. Som-mers, St. Louis, for defendant-respondent.
   SMITH, Judge.

Plaintiff appeals from the action of the trial court granting defendant’s motion for summary judgment. We outline the factual circumstances under which the case reaches us.

Plaintiff was injured in an automobile accident while riding in a vehicle operated by defendant. The accident occurred in the State of Texas in April 1974. In September 1974, the parties were married in Texas. Thereafter the parties moved to Missouri and in January 1976, this suit was filed seeking damages for the injuries sustained by plaintiff as a result of defendant’s negligence. For purposes of the summary judgment and this appeal, the move to Missouri was a valid change of domicile and was not made for the purpose of bringing this suit.

Under Texas law a spouse may not bring an action against the other spouse for damages resulting from a premarital negligent tort. Latiolais v. Latiolais, 361 S.W.2d 252 (Tex.Civ.App.1962). Under Missouri law such suit is allowed. Hamilton v. Fulkerson, 285 S.W.2d 642 (Mo.1955). The question before us — which law applies?

Since Kennedy v. Dixon, 439 S.W.2d 173 (Mo.banc 1969), Missouri has been committed to resolving a conflict of laws in tort cases by using the analysis found in Sec. 145 Restatement (Second) Conflict of Laws. This analysis abandons the previously utilized lex loci delicti (place of the tort) doctrine in favor of the more flexible principal contacts approach. As stated in Sec. 145(1):

“The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.” (Emphasis supplied).

The issue here to be decided is intraspousal immunity as to a premarital tort. In Latiolais, supra, the Texas court placed its granting of immunity in that situation upon the public policy of protecting and maintaining inviolable the marital relationship by preventing suits between the spouses. The court did not place the immunity upon other grounds, such as the potential of fraud, which might reach beyond the marital relationship. From the standpoint of the Texas law it is apparent that it is the effect upon the marriage that creates the immunity. We must conclude that this relationship is of concern to Texas only so long as the marriage has some continuing nexus with that State. Once that nexus has terminated it can be of little other than academic concern to Texas what happens to the marriage. It should also be noted that in Latiolais, supra, the court stated that the cause of action for premarital tort was not necessarily cancelled by the marriage but simply that the right to sue was abated or suspended by the marriage, that is, the marriage affects only the capacity to sue.

In Missouri intraspousal immunity exists as to torts occurring during the marriage. This immunity was originally based upon the concept that the spouses are a single unit and a tort committed by one against another does not create a cause of action. It is the equivalent in law of negligently injuring oneself. That may still be the basis for such immunity. It may rest on some other basis. See Ebel v. Ferguson, 478 S.W.2d 334 (Mo.banc 1972); Klein v. Abramson, 513 S.W.2d 714 (Mo.App.1974). The same doctrine obviously does not apply to premarital torts. The tort creates a cause of action; the marriage can affect only the capacity to sue.

Missouri has held that permitting suits for premarital torts does not conflict with the marital relationship. See Hamilton v. Fulkerson, supra. Such suits are therefore permitted in Missouri. It appears to us that the application of the standards of Sec. 145 compel a conclusion that the state with the most significant contacts on the issue of a spouse’s capacity to sue is the state of the marital domicile at the time of suit, providing such domicile is in fact legitimate and not acquired simply for the purpose of suit. It is, after all, the domiciliary state which has the greatest concern with the marital relationships of its citizens. See Sec. 169, Restatement (Second) Conflict of Laws. In this instance Missouri’s law on capacity to sue should be applied.

We disagree with defendant’s contention that the capacity to sue must be judged at the time of the occurrence, not at the time of suit. Initially we would point out that at the time of the occurrence of the tort no incapacity existed under the law of either state. Secondly, the capacity question in both Missouri and Texas is determined on the basis of the effect upon the marital relationship, and obviously the effect on the marriage occurs when the suit is filed, not on the date of marriage. See Washington v. Washington, 486 S.W.2d 668 (Mo.App. 1972). Thirdly, See. 169 of Restatement (Second) dealing with Intra-family Immunity specifically states: “The applicable law will usually be the local law of the state of the parties’ domicil.”

Nor do we believe this case can or should be decided by resort to definitions of “procedural” and “substantive” law. To a. very real degree the “significant contacts” approach is designed to avoid this maze by placing the emphasis upon the importance to each state of the issue involved rather than upon the definition of the issue in procedure vs. substance terms.

We now reach the question which presents the greatest difficulty. Defendant contends that under the provisions of Sec. 145, the court must make its determination under the principles of Sec. 6 of the Restatement (Second). This is correct. See Griggs v. Riley, 489 S.W.2d 469 (Mo.App.1972). The first paragraph of Sec. 6 is as follows: “A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.”

This obviously means that if a statute mandates the use of a certain law the court must apply that law without regard to the “significant contact” directives of the remainder of Sec. 6, Sec. 145 and Sec. 169. Defendant then points to Sec. 507.020 RSMo 1969 as a statutory directive applicable here. See also Rule 52.03. There are two potential ways of interpreting this statute. The first interpretation, urged by defendant, is that this section incorporated into the law of Missouri by statute the doctrine of lex loci delicti, at least insofar as capacity to sue is concerned. The other interpretation is that, as a matter of comity, Missouri has by this statute expanded the availability of its courts to those persons who lack capacity to sue in Missouri but have such capacity in other states. Newlin v. St. Louis & S.F.R. Co., 222 Mo. 375, 121 S.W. 125 (1909) and State v. Mayfield, 362 Mo. 101, 240 S.W.2d 106 (Mo.banc 1951), overruled in State ex rel. Chicago, R.I. & P.R. Co. v. Riederer, 454 S.W.2d 36 (Mo.banc 1970), addressed the statute as essentially an exercise in comity. See also Elliott v. Johnston, 365 Mo. 881, 292 S.W.2d 589 (1956). Other cases have, however, treated the statute as a codification of the lex loci delicti doctrine, and held that if no cause of action exists or plaintiff lacks capacity to bring that cause of action in the state of the occurrence of the tort, the action may not be brought in Missouri. See Osagera v. Schaff, 293 Mo. 333, 240 S.W. 124 (1922); Burg v. Knox, 334 Mo. 329, 67 S.W.2d 96 (1933); Robinson v. Gaines, 331 S.W.2d 653 (Mo.1960). All of these cases must be viewed from the standpoint that at the time they were decided lex loci delicti was the judicially approved common law conflicts rule. We find little critical analysis of the scope of the statute in the pre-Kennedy v. Dixon era probably because none was necessary. Nor, does Kennedy discuss the statute. We conclude, however, that the Supreme Court in Kennedy must have treated the statute as simply an expansion of jurisdiction, through comity, of Missouri courts to persons lacking capacity to sue in Missouri but having such capacity in other states. If the statute is viewed as restrictive in nature and simply a codification of lex loci delicti, the plaintiff in Kennedy would have been precluded from bringing suit by the first paragraph of Sec. 6, Restatement (Second). We, therefore, hold here that Sec. 507.020 does not preclude the utilization of the significant contacts principles of the Restatement (Second). Applying those principles to the facts here, we hold that the trial court erred in granting the summary judgment against plaintiff.

Judgment reversed and cause remanded.

CLEMENS, P. J., and McMILLIAN, J., concur.

      . 507.020. Action on claim under foreign law
      1. Whenever a claim exists under the law of another state, action thereon may be brought in this state by
      (1) The person or persons entitled to the proceeds of such claim if he or they are authorized to bring such action by the laws of said other state;
      (2) The executor, administrator, guardian, guardian ad litem or other person empowered by the laws of said other state to sue in a representative capacity if the person or persons entitled to the proceeds of such claim are not authorized to sue in such cases under the law of said other state.
      2. In the cases mentioned in subdivision (2) above, the proceeds of the action, resulting either from judgment or settlement, shall be paid to the person bringing such suit and such person is authorized to satisfy the judgment and execute release. Such person to whom the proceeds are paid shall have authority to distribute and pay same to the person or persons entitled thereto, according to their respective interests therein, under the laws of said other state. (L.1943, p. 353 § 14)

      . We deny defendant’s motion to dismiss the appeal for the alleged failure of appellant to comply with the Rules.


author: McMILLIAN, Judge.

text:
    Theodore D. McNEAL, George T. Mehan, Edward Walsh, Salees Seddon, Mayor John Poelker, comprising the Board of Police Commissioners of St. Louis, Missouri, Defendants-Appellants, v. Richard BEQUETTE, Plaintiff-Respondent.
    No. 39746.
    Missouri Court of Appeals, St. Louis District, Division One.
    July 25, 1978.
    Motion for Rehearing and/or Transfer Denied Sept. 15, 1978.
    Application to Transfer Denied Nov. 6, 1978.
    Whalen, O’Connor, Danis .& Tobben, David 0. Danis, Daniel G. Tobben, St. Louis, for defendants-appellants.

      London, Greenberg & Fleming, C. John Pleban, St. Louis, for plaintiff-respondent.
   McMILLIAN, Judge.

The St. Louis Metropolitan Board of Police Commissioners (hereinafter the Board), appeals from a judgment entered by the circuit court of St. Louis County reversing an administrative decision by the Board suspending respondent Richard Bequette, a police officer, for four days without pay. For reversal of this judgment the Board argues that the trial court erred in reversing the Board’s finding that respondent was insubordinate and disrespectful to a superi- or officer because its finding was supported by competent and substantial evidence on the whole record. For the reasons discussed below, we reverse and remand with directions to the trial court to reinstate and sustain the decision of the Board.

The facts in this case are long and convoluted. Suffice it to say there was considerable confusion surrounding an order given to respondent by his supervisor, Sergeant Buchanan; that is, whether respondent was still obliged to follow the order after he went off duty; whether respondent was relieved of his duty by another sergeant; and whether respondent related the entiré facts surrounding the order to the second sergeant. The entire controversy culminated in a telephone conversation between Sergeant Buchanan and respondent in which respondent was allegedly insubordinate and disrespectful to Buchanan. After a hearing, the Board found that respondent was insubordinate and suspended him for four days without pay. The trial court reversed the Board’s finding on the ground that it was not supported by competent and substantial evidence.

What was actually said in this conversation is known to only two parties: Bequette and Buchanan. Respondent admitted most of the language Sergeant Buchanan attributed to him but provided a less offensive context of his remarks than that testified to by the sergeant. Sergeant Buchanan was unable to recall if he said the language attributed to him by respondent. In any event, who offered the more reliable version of the conversation is a matter of credibility, and while we may have decided the case differently as an original proposition, we, as well as the trial court, must defer to the administrative tribunal’s findings of fact. Neither a circuit court nor an appellate court may substitute its judgment for that of the administrative board. State v. Simmons, 299 S.W.2d 540, 542 (Mo.App. 1957). Rather, our standard of review is limited; we may not set aside the board’s decision unless it is not supported by competent and substantial evidence on the whole record. § 536.140(2)(3) RSMo 1969; e.g., Board of Education, Mt. Vernon Schools v. Shank, 542 S.W.2d 779, 782 (Mo. banc 1976); State ex rel. Hoffman v. Public Service Comm’n, 550 S.W.2d 875, 878 (Mo.App.1977). In addition, the determination of the credibility of witnesses is a matter for the board. E.g., Bd. of Education, Mt. Vernon Schools v. Shank, supra, at 782; Lindsay v. Ford Motor Co., 548 S.W.2d 618, 619 (Mo.App.1977).

Because the issue in the present case is a matter of credibility, we must defer to the board’s finding that Sergeant Buchanan’s version of the telephone conversation was more credible than that offered by respondent. The decision of the board was not unsupported by competent and substantial evidence on the whole record. Therefore, we must reverse and remand with directions to the trial court to reinstate and sustain the decision of the board.

Judgment reversed and remanded with directions.

CLEMENS, P. J., and SMITH, J., concur.

      . This controversy began with Sergeant Buchanan’s order to Officer Bequette to view the body of a heart attack victim at the morgue for signs of violence. The body had not arrive at the morgue when respondent’s tour of duty ended and he went home without viewing it. At this point the story becomes very confused. The morgue apparently notified the wrong station when the body arrived: Sergeant Buchanan possibly failed to tell respondent that the body was available, and; it is questionable whether respondent made adequate arrangements before leaving the station for someone else to complete the assignment. At 12:45 A.M., when respondent learned that the body was at the morgue, he apparently obtained permission from the morgue and the sergeant then on duty for someone else to view the body.

      . When Sergeant Buchanan learned that Sergeant Spencer was completing the morgue assignment, he called respondent to tell him that respondent, and not anyone else, was to view the body. Exactly what was said and the tone with which it was said is unclear.

      . We find it somewhat significant that the only witness independent to the Buchanan-Bequette controversy gave testimony which supported Sergeant Buchanan’s version of the fateful phone call. Whereas Bequette testified that he told Sergeant Spencer that Sergeant Buchanan had told him to view the body, Spencer testified that Bequette never stated that he had been ordered to view the body by his supervisor. After Bequette spoke with Spencer, Spencer called Buchanan to inquire why he had not instructed Bequette to finish the report. This is how Buchanan found out respondent was not going to the morgue and what prompted the controverted call. If, as Bequette alleged, he had told Spencer that Sergeant Buchanan had ordered him to view the body, there would have been no need for Spencer to call Buchanan, which he obviously did.


author: SNYDER, Judge.

text:
    Roland ROTH, Plaintiff-Respondent, v. Anna ROTH, G. H. Walker & Co., a partnership, Mercantile Trust Company National Association, Union Electric Company, Manufacturers Hanover Trust Co., Fidelity Fund, Inc., Puritan Fund, Inc., the National Shawmut Bank of Boston, Broad Street Investing Corporation, Irving Trust Company, and Union Service Corporation, Defendants-Appellants.
    Nos. 38789, 38794.
    Missouri Court of Appeals, St. Louis District, Division Four.
    Aug. 1, 1978.
    Motion for Rehearings and/or Transfer to Supreme Court Denied Sept. 15, 1978.
    Application to Transfer Denied Nov. 6, 1978.

      Francis A. Casserly, Biggs, Casserly, Barnes, Fickie & Wolf, Clayton, for defendant-appellant Anna Roth.
    Coburn, Croft, Shepherd, Herzog & Put-zell, Joseph R. Soraghan, Thomas H. Rost, St. Louis, for defendant-appellant G. H. Walker & Co.
    Campbell & Campbell, P. C., David L. Campbell, Clayton, Sommers & Holloran, Inc., Don B. Sommers, St. Louis, for plaintiff-respondent.
   SNYDER, Judge.

This equity action arises out of an unfortunate family dispute between Roland Lee Roth (Roland) who sued his mother Anna Roth (Anna), G. H. Walker & Company (Walker), a partnership, and others to establish a constructive trust and to recover his share of the value of certain bank certificates of deposit and shares of stock. Walker is a stockbroker, a dealer in investment securities. There was a judgment: (1) in favor of Roland and against Anna in the amount of $5,750.00 principal and $3,077.00 interest for conversion of savings certificates; (2) in favor of Roland and against both Anna and Walker in the amount of $13,992.63 principal and $4,102.28 in dividends for conversion of shares of corporate stock; (3) in favor of Anna and against Walker on a cross-claim filed by Walker; and (4) in favor of Roland and against both Anna and Walker in the amount of $6,740.00 for attorney’s fees. Anna and Walker appeal from the judgments in favor of Roland and Walker appeals from the judgment rendered against it on its cross-claim.

Roland has filed a motion to dismiss the appeals of both Anna and Walker for noncompliance with the rules and for damages for vexatious appeal. The motion characterizes the appeals as frivolous. The briefs filed by both appellants do not comply strictly with the rules as to the statement of the points relied on, but the appeals are not frivolous. Instead, they indicate a good faith effort to set forth claims of error believed by the appellants to support a reversal. Certain defective points relied on will be considered and discussed in subsequent paragraphs. The motion to dismiss the appeals is denied.

Roland Lee Roth was 24 years old in 1956 when he was discharged from the armed services. He lived with his parents, Arnold Roth and Anna Roth, until the death of his father April 14, 1961. During that time he turned his entire paycheck over to his mother who used it, along with the father’s earnings and other money coming to the household, for living expenses and investments. She gave Roland whatever sums he needed for clothing, recreation and other expenses. Roland worked at the Fisher body plant of the General Motors Corporation when work was available there but in the years before his father’s death he was laid off from time to time and found work at other establishments.

Prior to Arnold Roth’s death, he and his wife invested funds in stocks and bank accounts, all of which were held in their names as tenants by the entirety or as joint tenants with the right of survivorship. After Arnold’s death, Anna had the shares transferred to the joint names of herself and her son, Roland, as joint tenants with the right of survivorship.

Roland worked steadily at the Fisher body plant of the General Motors Corporation after 1961 and continued to turn over his paycheck to his mother until September 20, 1967 when he left his mother’s house to be married. Anna had other income by way of social security, dividends and interest and $10 weekly from a boarder. From time to time after her husband’s death and until 1963, Anna obtained casual employment with various employers. From 1963 to 1967 she was unemployed. Anna received insurance payments upon her husband’s death but there was no evidence of the exact amounts.

Anna continued to give Roland money for clothes, recreation and other expenses. She also paid household expenses out of the proceeds of his cheek and Roland testified that the money left over after all expenses were paid was used for investments. Roland declared his mother as a dependent on his tax returns. Neither party kept any accounting of contributions, expenses or amounts invested. They enjoyed a steady income and managed to save enough to invest in stocks and savings certificates, all of which were put in the names of Anna and Roland as joint tenants with the right of survivorship.

Anna took a more active role in the control of the stocks and their investment planning than did Roland. The stock certificates were kept in a safe-deposit box which was in Anna’s name. The broker at G. H. Walker & Company, Joseph W. McCormack, testified that Anna called him to discuss the brokerage account and give him instructions. He could not recall whether Roland had ever telephoned him with instructions on transactions. Anna and Roland went down to the broker’s office together when investments were made and papers needed to be signed and Roland always helped to decide what investments to make. No joint tenancy agreement was ever filed for their account with Walker. Such an agreement allows either joint tenant to act on behalf of the other.

In September of 1967, Roland and his mother had an argument over Roland’s plans to marry and Roland left home. Within the next few days, Anna went to Mr. McCormack at Walker and told him she wanted to transfer all of the stocks out of the joint tenancy and into her name alone. Mr. McCormack told her she would have to obtain Roland’s signature on the necessary stock powers and on a letter of instruction before he could accomplish the transfer. He gave Anna the necessary forms and she later returned the stock powers and the letter of instruction signed by her and containing signatures Anna said were Roland’s.

Without any attempt to contact Roland to confirm his assent to the destruction of his interest in the shares, or to ascertain that this was, indeed, his signature, Mr. McCormack guaranteed the genuineness of the signatures. In reliance on this guarantee, the issuers transferred all the shares into Anna’s name.

William Storer, a qualified handwriting expert, testified unequivocally that Roland’s signatures on the stock powers and letter of instruction were forged by whoever signed the name “Anna Roth”. Anna admitted that she signed her name to the documents.

Similarly, two of three certificates of deposit from Mercantile Bank were presented for reissue endorsed by Anna and purportedly endorsed by Roland. They were reissued in Anna’s name alone on the basis of these endorsements. The signatures on two of the certificates of deposit were forgeries, according to the expert witness, and were placed on the documents by the same person who signed the name “Anna Roth”. Roland in 1966 endorsed the other certificate of deposit which was in the face amount of $10,000, but he signed it pnly for the purpose of allowing it to be deposited as collateral for a home improvement loan for his mother’s house. It, too, was transferred to Anna’s name alone upon Anna’s request and without Roland’s knowledge. Roland testified that he signed the one $10,000 certificate but denied that he signed the stock powers, the letter of instruction or the other two certificates of deposit.

The following shares of stock and certificates of deposit are in question:

Value at Date of Transfer to Anna Roth
353 shares Puritan Fund $ 4,115.98
500 shares Fidelity Fund 10,150.00
210 shares Union Electric 4,912.90
549 shares Broad Street 8,844.39
Savings Certificate # 15136 (face value) 10,000.00
Savings Certificate # 25872 (face value) 1,000.00
Savings Certificate #27253 (face value) 500.00

The dividends paid on the shares after the transfer to Anna totaled $8,234.03.

Roland brought suit against Anna, Walker and certain corporate defendants in four counts, the first alleging a constructive trust and asking for certain equitable relief including a decree that one-half of the assets of the trust estate be distributed to him. The second count alleged that one-half of the assets were the property of Roland and that Anna had converted them to her own use and prayed for a money judgment against Anna. The third count for a money judgment against Walker alleged negligence and breach of fiduciary relationship. The defendants in count four were various corporations which issued the stock certificates in question.

Defendant Walker cross-claimed against Anna for the amount of any judgment which might be rendered against it, claiming that any liability incurred by Walker was the direct and proximate result of the misrepresentation by Anna of the genuineness of Roland’s signatures.

The standard of review of an appellate court in suits of an equitable nature has been set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976) in which the supreme court cut through the confusion that had previously existed as to the appellate review of suits of an equitable nature. The court construed Rule 73.01 to mean that “the decree or judgment of the trial court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law.” The court said further, “Appellate courts should exercise the power to set aside a decree or judgment on the ground that it is ‘against the weight of the evidence’ with caution and with a firm belief that the decree or judgment is wrong.”

Contrary to the argument of Walker in its brief, the standard of review mandated in Murphy is applicable to both court tried law cases and equity cases. The philosophy of appellate review does not differ from the Murphy standard in equity cases and if there is substantial evidence to support it, the trial court’s judgment must be affirmed. The cases cited by Walker to support a more liberal standard in equity cases were decided prior to Murphy.

Where the trial court has made no findings of fact or conclusions of law, none having been requested, all fact issues will be deemed found in accordance with the result reached and the judgment will be affirmed if it is correct on any reasonable theory supported by the evidence. Hoefel v. Hoefel, 533 S.W.2d 704 (Mo.App.1976); Corley v. Kiser, 556 S.W.2d 218 (Mo.App. 1977); Rule 73.01(1)(b).

Appellant Anna Roth relies on five points in her brief including one relating to attorney’s fees awarded by the court.

Her claim of error in which she maintains that the court should have ordered a surrender of certificates for reissue instead of rendering a money judgment is not preserved for review because it does not comply with Rule 84.04 in that it states only that the court erred without stating wherein and why.

The other three specifications of error resolve themselves into a charge that the judgment of the trial court was against the weight of the evidence in finding: (1) that Roland’s signatures were forged; and (2) that Roland was entitled to a half interest in the certificates of deposit and shares of stock.

The evidence as to forgery was conflicting. Anna testified that Roland signed the documents and a witness who had boarded with her for a number of years testified that he saw Roland signing some papers in the kitchen in Anna’s house. The boarder admitted that he did not know the nature of the papers he saw. Roland denied ever signing the stock powers and letter of instruction or endorsing two of the certificates of deposit. A handwriting expert testified unequivocally that the signatures appearing on the stock powers, the letter of instruction and the two certificates of deposit were forgeries. The expert also testified that whoever signed “Anna Roth” to the questioned documents also signed Roland’s name. Anna admitted that she signed her name to these documents. The handwriting expert’s testimony was not challenged.

In such a situation, we

‘heed the well fixed principle that in court tried cases where the evidence conflicts sharply, appellate courts resolve the conflict by according due deference to the trial court because of its superior opportunity “to observe the conduct and demeanor of the parties and their witnesses and to weigh, evaluate and assess their testimony” ’ [Pittman v. Great American Life Insurance Co., 512 S.W.2d 857, 861-862[7] (Mo.App.1974)], and because the trial judge has leave to disbelieve all the testimony of any witness [Southwestern Bell Tel. Co. v. Crown Insurance Co., 416 S.W.2d 705, 711[6] (Mo.App.1967)] or to believe part of a witness’ testimony and reject the rest. North Side Finance Co. v. Sparr, 78 S.W.2d 892, 894[4] (Mo.App.1935).

Long v. Lincoln, 528 S.W.2d 512, 513[3] (Mo.App.1975). These principles compel rejection of Anna’s contention that the finding that Roland’s signatures were forgeries is against the weight of the evidence.

There was substantial evidence to support a finding that Anna Roth forged Roland’s signature on the questioned documents.

Two issues must be considered in deciding whether Roland was entitled to a one-half interest in the assets in question. First, was Roland’s contribution to the funds of the family sufficient to support a finding of fifty percent ownership? Second, if evidence of Roland’s contribution to the family funds over the years was not sufficient to support the court’s finding in his favor, was there a gift by Anna to Roland when she placed the certificates in his name and hers as joint tenants with the right of survivor-ship?

Bearing in mind that the power of an appellate court to set aside a judgment on the ground that it is against the weight of the evidence should be exercised with caution and only when there is a firm belief that the judgment is wrong [Murphy v. Carron, supra; Mitchell v. Atherton, 563 S.W.2d 13 (Mo. banc 1978)], we cannot say that there was such a paucity of evidence as to justify a holding that the trial court erred.

The fact that Roland contributed his entire income to the family fund from the time he returned from the service in 1956 to the time he left home in 1967 is evidence of a substantial-contribution on his part to the family savings and investments. It is only natural that in a family situation such as this no books would be kept and no detailed records made of the amounts spent by Roland for his personal needs and hence, the. amounts contributed by him for the support of his parents. Any amounts paid over to his mother for family purposes over and above his personal expenses were a contribution by him to the investment program because he was an adult during this entire period and had no legal duty to provide support for his parents. Howlett v. Social Security Commission, 347 Mo. 784, 149 S.W.2d 806 (1941); Thornsberry v. State Dept. of Public Health and Welfare, 365 Mo. 1217, 295 S.W.2d 372 (1956). Therefore, the excess of his contributions over his expenses, whatever the amount was, went into the investments. According to the record, all of the shares of stock were purchased or acquired subsequent to March 13, I960. The certificates of deposit in question were dated in 1966. Anna testified that her husband earned “plenty” of money and received “plenty” of money from General Motors for his suggestions. She also testified that Roland “got plenty of money” from her. Her testimony was barren, however, of any actual dollar amounts earned or spent. There were some insurance benefits but the record again does not tell us the amount.

In fact, an inference can be drawn that in the years from 1961 to 1967, after the death of his father, Roland was the only contributor to the investments since his mother’s income was limited during that time. She received monthly social security payments of between $125 and $150, interest and dividend income from the investments and rent payments from a boarder of $10 per week. The evidence as to her employment was indefinite but apparently she worked only intermittently from 1961 to 1963. The record does not show exactly when nor does it show any amounts that she earned. She was unemployed from 1963 to 1967.

The evidence is clear that Roland made substantial contributions to the investment program of the family during the eleven years after he left the service, even though the exact amount of his contributions cannot be determined.

Did Anna, when she placed the shares of stock and the certificates of deposit in joint names with Roland, make a gift of an interest to Roland over and above his contribution? The shares in question can be separated into two classes. The following shares were originally held in the names of Anna Roth and Arnold Roth and were transferred to the joint names of Anna and Roland after Arnold’s death:

200 shares General Motors Corporation 50 shares Union Electric Company 100 shares Fidelity Fund

The remaining disputed shares were originally issued in the names of Anna and Roland. They were:

353 shares Puritan Fund 400 shares Fidelity Fund 160 shares Union Electric 549 shares Broad Street

The General Motors Corporation shares were sold and the proceeds used to purchase the $10,000 certificate of deposit at Mercantile Bank which, along with the other two certificates of deposit, was originally issued in the joint names of Anna and Roland.

It is readily apparent that only a portion of the shares could be the subject of a “gift” to Roland from Anna. A substantial fraction of the shares were originally purchased by and issued to Anna and Roland jointly, although fifty of Anna and Roland’s Union Electric shares were issued as a result of a stock split of the fifty shares first held in the names of Anna and Arnold, and a small number of Anna and Roland’s Fidelity Fund shares were attributable to capital gains distributions on the 100 Fidelity Fund shares first held in the names of Anna and Arnold.

There was substantial evidence to support a finding that Roland’s contributions helped purchase all of the disputed assets, but particularly those purchased after Arnold’s death. There was also substantial evidence of a gift from Anna to Roland, assuming arguendo that Roland’s contributions did not amount to fifty percent of the value of the investments.

The essential elements of a gift are: (1) a present intention on the part of the donor to make a gift; (2) delivery of the property by the donor to the donee; and (3) acceptance by the donee whose interest takes effect immediately and absolutely. Wantuck v. United Savings and Loan Association, 461 S.W.2d 692 (Mo. banc 1971) [overruled on another ground in In re Estate of LaGarce, 487 S.W.2d 493 (Mo. banc 1972)]; Firestone v. Yoffie, 494 S.W.2d 394 (Mo.App.1973).

In Firestone, the court found a completed intervivos gift from a father to his daughter saying, at page 398:

Although there are some decisions to the contrary, the great weight of authority is to the effect, and the later decisions hold, that there is a completed gift of corporate shares when by direction of the owner they are transferred to the donee on the books of the corporation and new certificates are issued in the name of the donee . . even though the certificates so issued are retained by the donor and not delivered to the donee (cites omitted).

The court in Firestone also notes, at page 399: “In the case of a transfer of stock to children or to persons considered ‘almost as children’, Wahl, supra, [Wahl v. Wahl, 357 Mo. 89], 206 S.W.2d 334 at 338, the law will raise a presumption of a gift from parent to child where it would not be presumed between strangers (cites omitted).”

Two elements are of the greatest importance in determination of donative intent: (1) transfer of ownership into the donee’s name on the corporation’s books; and (2) the existence of a parent-child relationship. Both elements are present here. The transfer to Roland from his mother made him a joint tenant instead of sole owner but there was a transfer of ownership to the extent of the joint tenancy.

In accord with this result is Wahl v. Wahl, 357 Mo. 89, 206 S.W.2d 334 (1947). There the donor had stock transferred on the books of the corporation to show himself as a life tenant and the donees as remaindermen. It was held that the transfer consummated an irrevocable gift of a remainder interest to the donees, whose estate therein was vested, with only the enjoyment thereof postponed. Similarly, the transfer on the books to a joint tenancy, or the purchase as joint tenants, evidences do-native intent on Anna’s part.

The only evidence rebutting do-native intent is the testimony of Anna who said that she did not believe in wills and that she put Roland’s name on the certificates so that they would pass to him on her death. Clearly, the trial court chose to reject her testimony because she lacked credibility as a witness. That issue was for the trial court to decide. Dickey v. Johnson, 532 S.W.2d 487 (Mo.App.1975). The trial court has leave to disbelieve all the testimony of any witness or to believe part and reject the rest. Corley v. Kiser, supra. Given the form of ownership and the presumption raised by the parent-child relationship, we cannot say the trial court’s implicit finding of donative intent is not supported by substantial evidence, or that it misapplies or misinterprets the law.

The fact that there was no delivery of the shares because they were kept in the safe-deposit box does not rebut the contention that there was a gift. The case law is clearly to the contrary to this assertion. In Firestone, supra, the court held that there need not be a physical delivery but that constructive delivery is sufficient. There are many cases abrogating the requirement of delivery as between parent and child. Wantuck, supra, at page 695, footnote 4.

Anna’s relinquishment of dominion over the shares was recognized by Walker when it required Roland’s authorization before the shares could be transferred. She could not act without Roland’s approval. She had put it out of her power to repossess the shares. Firestone, supra, at 400[8, 9]. Accord, In re Estate of Wintermann, 492 S.W.2d 763 (Mo.1973), which also states at page 768, “We approve the rule that less proof is required to show delivery as between parties within the family relationship.”

The element of acceptance may be presumed here because of the benefit to Roland. “The rule is that acceptance will be presumed when the gift is entirely beneficial to the donee, unless the contrary appears. Jones v. Jones, supra, 201 S.W. [557] at 558 (Mo.App.).” Firestone, supra, at 400.

There was substantial evidence to support a finding that there was a gift of an interest in the shares and certificates which, coupled with his contribution, was sufficient to make Roland a one-half owner of the assets.

The Walker appeal contends that the judgment against it was against the weight of the evidence and it erroneously applied the law: (1) in that the court failed to recognize that a joint tenant may withdraw all securities from a joint account without liability to the account holder; (2) in holding Walker liable for guaranteeing the alleged signatures of Roland; and (3) in denying the cross-claim of Walker against Anna if the signatures were forged. Error was also claimed in the award of attorney’s fees to plaintiff because there was no evidence to support such an award. The first two points will be considered together.

The judgment against Walker was for conversion of the stocks held by Anna and Roland as joint tenants. There is little evidence to support a conversion on the part of Walker but Roland pleaded a breach of trust and fiduciary duty by Walker and the judgment can be supported on that basis. All fact issues may be deemed found in accordance with the result reached and the judgment must be affirmed if it is correct on any reasonable theory supported by the evidence. Hoefel v. Hoefel, supra.

The ordinary relationship of a stockbroker to his customer is that of principal and agent. A stockbroker, like any other broker, is under a duty to act in good faith toward his customer, and it is held that the relation between a stockbroker and his customer is a fiduciary one. .

12 Am.Jur.2d Brokers §113. The responsibility of a broker “is in the nature of a trust, to be executed for the principal.” 12 C.J.S. Brokers § 5.

If a broker does not perform his duty, or is guilty of negligence, misconduct or unskillfulness, he not only becomes liable to his principal for the damages the latter may have sustained, but also forfeits his claim for compensation. He is liable to his principal for all damages which flow naturally from his negligence and which are a direct consequence thereof.

12 Am.Jur.2d Brokers § 96.

The view of the broker-principal relation adopted by Missouri courts is consistent with that expressed in the encyclopedias. It is the duty of a broker to act with the utmost good faith and undivided loyalty in the interest of his principal. King v. Pruitt, 365 Mo. 823, 288 S.W.2d 923 (banc 1956). In real estate broker cases, the courts have consistently stated that broker-customer relation is fiduciary and confidential in nature and that the broker’s obligations are as exacting as those imposed on a trustee in favor of his beneficiary. Martin v. Hieken, 340 S.W.2d 161 (Mo.App.1960); Herb Tillman Co. v. Sissel, 348 S.W.2d 819 (Mo.App.1961).

Included among those duties have been the obligation to keep the customer fully informed of all facts pertinent to transactions in which the broker is representing the principal, to make full disclosure of all facts which materially affect the subject matter of the agency, and to exercise reasonable care and diligence in the performance of his duties: Acy v. Inland Security Co., 287 S.W.2d 347 (Mo.App.1956); Politte v. Wall, 256 S.W.2d 283 (Mo.App.1953); Herb Tillman Co., supra; Martin v. Hieken, supra; Leuzinger v. Merrill Lynch, Pierce, Fenner & Smith, 396 S.W.2d 570 (Mo. banc 1965). Leuzinger will be discussed in some detail because it sets out the standard of care we must apply.

The plaintiff m Leuzinger opened an account at a Merrill Lynch office in the name of her and her husband as joint tenants with a right of survivorship. The two of them later signed a standard account form for joint accounts which included the following language: “ ‘With respect to our joint account with right of survivorship we confirm that: “1. In all matters pertaining to the account you may act upon orders and instructions from either of us”.’ ”

Plaintiff then instructed Merrill Lynch to purchase certain securities. Her husband gave no instructions or directions in that transaction. Over the next three and one-half years Merrill Lynch handled approximately 100 transactions for this account. With the exception of two transactions which took place shortly after the account was opened, in which plaintiff gave the instructions, all of these transactions were undertaken pursuant to orders from plaintiff’s husband.

On December 10, 1962, without any written or unwritten request or authorization by plaintiff, but upon the request of her husband, Merrill Lynch sold all of the securities in the joint account and held $59,000 for the account. Again at the husband’s sole request, .Merrill Lynch disbursed the entire $59,000 by a check payable to “North Kansas City State Bank for account of W. C. Leuzinger and Leta M. Leuzinger” and delivered the check to the husband without the consent of plaintiff. The husband presented the check to the bank and requested that it be deposited in the joint checking account. Once the proceeds were credited, the husband, without any consent or authorization by plaintiff, withdrew the funds and appropriated them to his own use. The court held that Merrill Lynch was not liable under these circumstances, assigning three different reasons for its decision.

First, plaintiff had given Merrill Lynch broad general authority to act upon the instructions of one tenant alone by signing the joint tenancy agreement.

Second, the manner in which Merrill Lynch executed plaintiff’s husband’s instructions was not inconsistent with her interest in the joint account. The check, on its face, showed that the proceeds of the check constituted jointly owned property in which plaintiff had an interest.

Third, the court believed that there was nothing in the facts shown which, under the circumstances, would have aroused the suspicions of an ordinarily careful and diligent stockbroker.

The present case is distinguishable on each of these points, and the opposite result, broker liability on the part of Walker, is indicated.

First, no joint tenancy agreement was signed by the Roths. Walker did not have authority to act on the instructions of one tenant alone. Walker’s own witness testified that it was custom and practice for ^stockbrokers to obtain a joint tenancy .greement.

Second, Walker contributed to a change in the form of ownership from Anna and Roland as joint tenants to Anna alone. In Leuzinger, the account was closed but the proceeds transferred by means of a check made out in joint names. In Leuzinger, there was no way for the broker to know from the check made out in both names that Mrs. Leuzinger’s interest was being destroyed (and as the court points out, it was not destroyed at that time). Here, a change in ownership to Mrs. Roth alone was absolutely inconsistent with Roland’s interest in the account, both as to his present and his future interest, and completely destroyed his rights as a joint tenant with the right of survivorship. Roland was deprived of his interest in the stocks while they were under Walker’s control.

Third, the facts here should have aroused suspicion on Walker’s part. Mr. McCor-mack had been this family’s broker for years. Stocks in this account had always been held in joint tenancy. If there is any value to Mrs. Roth’s testimony that the stocks were held in this fashion for probate purposes, Mr. McCormack surely knew of that purpose and realized such an action would destroy Roland’s right if his mother died. While Mr. McCormack may not have known of the family dispute which prompted Mrs. Roth’s action, such a change in the method of handling the account after years of consistent behavior should have prompted suspicion. Further, this is not a case where 98 out of 100 transactions were conducted by one party alone, as in Leuzinger. Roland testified (and we must accept this as consistent with the judgment) that he accompanied his mother to the broker whenever any papers needed to be signed. It is unusual that Roland did so for sales of individual stocks but did not so do when he supposedly agreed to the complete destruction of his interest in the entire account.

The totality of the circumstances here would put a prudent man on notice that perhaps questions should be asked. Here are a mother and son who have dealt with the broker for a number of years. The mother did more of the dealing than the son, some of it over the telephone, but the son participated in the decisions and both the mother and son visited the broker’s office whenever papers were to be signed. During the father’s lifetime, Roland visited Walker with his father and mother to transact investment business. After these dealings over a period of twelve years, first with Roland and both parents and then with Roland and his mother, Walker failed to notify Roland. The first time Roland heard of the transfers was after they had all been accomplished. There was no rebuttal to this. There was no evidence on the part of Walker of attempts to communicate with Roland.

It is not customary in the securities business to require endorsements to be made in the presence of the broker. Therefore, the fact alone that the stock powers and transfer instructions were not signed at the Walker office would not constitute a breach of fiduciary duty. But this fact, along with the other circumstances surrounding the transfers, adds to the weight of the evidence of negligence. The failure on the part of Walker to notify Roland, coupled with the forgery and the guarantee of the forged signature without question, was a contributing proximate cause of the transfer of the securities out of Roland’s name and the resulting damage to him.

For our purposes, the court’s language at page 576 in Leuzinger is crucial:

Pursuant to the general duty of a stockbroker to act in good faith with customers and to make a complete and full disclosure of all material facts concerning a transaction, if the stockbroker knows of facts and circumstances which would lead an ordinarily careful and diligent person to believe that one joint tenant of a joint brokerage account was in the process of wrongfully converting to his own uses and purposes the interest of the other joint tenant, a duty to inform the latter would arise, and in such case the broker would be derelict in disbursing the whole account to the joint tenant under suspicion, without first informing the other and obtaining consent and approval to the disbursement.

Applying this standard, Walker had a duty to inform Roland before transferring the shares. Sending the papers with the party under suspicion does not satisfy that duty. Knowing of facts which should have led an ordinarily careful and diligent broker to believe a conversion might be taking place, Walker was derelict in not communicating with Roland and obtaining his personal consent and approval. Walker breached the fiduciary duty owed Roland as their client.

“If a broker does not perform his duty, or is guilty of negligence, * * * [h]e is liable to his principal for all damages which flow naturally from his negligence and which are a direct consequence thereof.” 12 Am.Jur.2d Brokers § 96, supra.

The injury to Roland was “the reasonable and probable consequence of the act or omission of the defendant.” Green v. Kahn, 391 S.W.2d 269 (Mo.1965). It is not necessary that the negligence of the defendant be the sole cause of the injury. It is sufficient that it be one of the efficient causes thereof, without which the injury would not have resulted. Green, supra.

Walker places emphasis on the inapplicability of § 400.8-312, RSMo1969 relating to the warranties flowing from, the guarantee of an endorsement signature. Section 400.-8-312, subparagraph 3, RSMo1969 provides that the warranties “are made to any person taking or dealing with the security in reliance on the guarantee . . . .” Roland did not take or deal with the securities in reliance on the guarantee but they were taken from him by those who relied on the guarantee.

However, Roland’s claim is not based on the guarantee but upon the relationship between broker and client and the breach of the duty on the part of Walker to inform Roland that the securities were being transferred to Anna’s name alone. It is obvious that the section relating to the guarantees of signatures was made a part of the law to protect subsequent transferees and purchasers, “any person taking or dealing with the security in reliance on the] guarantee.” § 400.8-312, RSMo1969. However, the section does not preclude owners or others from pursuing different types of remedies. “Any person against whom the transfer of a security is wrongful for any reason, including his incapacity, may against anyone except the bona fide purchaser . . have damages.” § 400.8-315(1), RSMo1969. It is not necessary that Roland have standing as a claimant under § 400.8-312, RSMo1969 in order for him to recover against Walker. Southern Ohio Bank v. Merrill Lynch, Pierce, Fenner & Smith, 479 F.2d 478 (6th Cir. 1973) holds that a statute such as § 400.8-312, RSMo1969 does not apply to the owner. However, the court also holds in that case that a statute such as § 400.1-103, RSMo1969 specifically provides that traditional rights and remedies remain in force unless eliminated by a particular provision of the Uniform Commercial Code.

On this authority, Walker’s breach of fiduciary duty in failing to observe reasonable commercial standards in dealing with Roland is a fact question which was decided adversely to them. A review of the evidence reveals that determination is supported by substantial evidence and does not misapply or misstate the law.

Walker urges that it was error for the trial court to render a judgment for Anna on Walker’s cross-claim for damages. We rule against Walker on this point.

Walker argues that because Anna forged Roland’s signatures on the transfer documents, that forgery caused a loss to Walker and therefore, Anna should be liable over to it for damages. Walker bases this claim upon § 400.8-306(2) and (5) and § 408.315(1), RSMol969, sections relating to warranties and wrongful transfer. However, these sections do not apply.

Walker has the rights and privileges of a purchaser under § 400.8-306(5), RSMol969, but the warranties run to a purchaser for value. A purchaser is one who takes by purchase, § 400.1-201(33), RSMo1969, but not every purchaser is necessarily a purchaser for value. Value is defined in § 400.1-201(44). Obviously here Walker was not a purchaser for value, nor was Anna, and the warranties do not extend to them.

The section on wrongful transfer [§ 400.8-315(1), RSMo1969] was included in the Uniform Commercial Code primarily for the benefit of owners of securities. Even assuming that it could be construed to apply to a broker under certain circumstances, Walker here was guilty of negligence and should not be permitted to take advantage of a wrongful transfer statute if its negligence contributed to the wrong.

Neither Anna nor Walker identified this issue as one of indemnity and their briefs do not speak to this point, but the cross-claim is, in fact, a plea for indemnity praying for judgment against Anna in an amount “equal to any amount which defendant Walker is required to pay to plaintiff.”

The issue may be stated as follows: Where a stockbroker, in breach of its fiduciary duties negligently allows or aids one joint tenant to commit the wrongful act of conversion against another joint tenant, should the negligent tortfeasor (Walker here) be indemnified by the intentional tortfeasor (Anna)?

Under the case law on indemnification as it stood at the time of the trial of this case, and at the time the appeal was argued, the trial court’s denial of Walker’s cross-claim for indemnity against Anna would have been affirmed. Walker’s own “active” negligence had been established. Its liability was not derivative nor was it based on “passive” negligence. The parties would have been left to divide the liability on the judgments against them. State v. McLaughlin, 315 S.W.2d 499 (Mo.App.1958); Crouch v. Tourtelot, 350 S.W.2d 799 (Mo. banc 1961).

Since this case was argued, however, the Missouri Supreme Court has handed down its opinion in Missouri Pacific Railroad Company v. Whitehead & Kales Company, 566 S.W.2d 466 (filed April 28, 1978), substantially altering the principles of noncon-tractual indemnity and contribution as they are applied in Missouri. In Missouri Pacific the court abandoned the “active-passive” negligence standard and adopted a system of distribution of joint tort liability based on relative fault. “The two concurrent tortfeasors should be treated according to their respective fault or responsibility.” Missouri Pacific, supra, 472. This principle of apportionment of liability applies “whether the tortfeasors were joined as defendants by the plaintiff or a third party defendant was added to a cause under our rule 52.11.” Missouri Pacific, supra, 474.

In deciding whether to apply an overruling case prospectively or retrospectively, Missouri courts have adopted a “procedural-substantive” law test. If the overruled decision is one dealing with substantive principles of law, the subsequent overruling decision is retroactive in effect. Shepherd v. Consumers Cooperative Association, 384 S.W.2d 635 (Mo. banc 1964).

“ ‘The distinction between substantive law and procedural law is that “substantive law relates to rights and duties which give rise to a cause of action,” while procedural law “is the machinery for carrying on the suit.” ’ ” Shepherd, supra, 640, quoting Barker v. St. Louis County, 340 Mo. 986, 104 S.W.2d 371, 377[10] (1937). Since the ruling in Missouri Pacific, supra, affects apportionment of damages and the rights of recovery among joint tortfeasors, it is a change in substantive law. This court is required, therefore, to apply the correct rule of law even though counsel and the trial court could not have been aware of it when the suit was heard. Skidmore v. Back, 512 S.W.2d 223 (Mo.App.1974).

Under § 512.160(3), RSMo1969, and Rule 84.14, appellate courts have an obligation to dispose finally of a case on appeal unless justice otherwise requires. However, because of the change in the law mandated by Missouri Pacific, supra, which was unknown to both the court and litigants when the case was decided in the circuit court, the cause will be remanded for a hearing on the apportionment between Anna and Walker of the liability for the damages awarded in the total amount of $18,094.91 for conversion of the shares of corporate stock. In apportioning the liability for these damages, the trial court shall consider the “principle of fairness,” Missouri Pacific, supra, 469, and the relative weight of the fault and responsibility of each defendant, casting aside formerly used concepts of “primary and secondary” duty and “active and passive” negligence.

Both Anna and Walker allege error on the part of the trial court in its award of attorney’s fees to Roland. Unfortunately, neither appellant has complied with Rule 84.04(d) in the briefs submitted. Both briefs, in the points relied on sections, state only that the court erred in awarding attorney’s fees without telling this court, or the respondent, wherein and why the court erred. Because this point has not been preserved for review, it is ruled against both appellants. Greater Missouri Builders v. Blattner, 555 S.W.2d 648 (Mo.App.1977). The apportionment between Anna and Walker of the liability for the attorney’s fees shall be in the same proportions as the respective liabilities of the defendants, taking into consideration both the amount of .the judgment against Anna for conversion of the savings certificates and the apportionment of liability between Anna and Walker upon rehearing for conversion of the shares of corporate stock.

No issue has been raised on appeal as to the judgment on count four of the petition and the cross-claim of the count four defendants.

The judgment is affirmed expect as to the apportionment of liability for the damages for conversion of the corporate shares and the attorney’s fees. The cause is remanded for the determination by the trial court of the proportionate liability of each defendant as to these parts of the judgment.

DOWD, P. J., and ALDEN A. STOCK-ARD, Special Judge, concur.

      . Section 400.1-201(44), RSMo1969 reads as follows:
      (44) “Value”. Except as otherwise provided with respect to negotiable instruments and bank collections (sections 400.3-303, 400.4-208 and 400.4-209) a person gives “value” for rights if he acquires them
      (a)in return for a binding commitment to extend credit or for the extension of immediately available credit whether or not drawn upon and whether or not a charge-back is provided for in the event of difficulties in collection; or
      (b) as security for or in total or partial satisfaction of a pre-existing claim; or
      (c) by accepting delivery pursuant to a preexisting contract for purchase; or
      (d) generally, in return for any consideration sufficient to support a simple contract.