author: SWOFFORD, Judge.

text:
    BERMAN LEASING COMPANY (Irving M. Rosen, Trustee Under Chapter 10 of the Bankruptcy Act of Bermec Corporation), Respondent, v. BEST TRUCK LINES, INC., a corporation, Appellant.
    No. KCD 27831.
    Missouri Court of Appeals, Kansas City District.
    Nov. 4, 1976.

      Charles W. Hess, Linde, Thomson, Pair-child, Langworthy & Kohn, Kansas City, for appellant.
    Thomas D. Circle, Buck & Circle, Kansas City, for respondent.
    Before SHANGLER, P. J., and SWOF-FORD and SOMERVILLE, JJ.
   SWOFFORD, Judge.

This is an appeal from a judgment entered in a court-tried case in favor of the respondent Rosen, Trustee (Trustee), in the amount of $8,232.93 and costs, based upon certain leases and rental agreements between the Best Truck Lines, Inc. (Best), as lessee, and the Berman Leasing Company (Berman), as lessor. The amount of the judgment covers agreed and unpaid rentals for certain trucking equipment together with overhead property damage to one such piece of equipment, which type of damage was excluded from insurance coverage and which was paid by Berman and thus became the contractual obligation of Best under the terms of the rental agreements.

Initially, Best raised, by pleading, a number of defenses, including payment and the fact that Best at the time of the rental agreements, was non-existent by reason of a forfeiture of its corporate charter in the state of Kansas. No evidence of payment was produced by Best and its “corporate” defense has been previously decided by this court upon three separate occasions. This court is no stranger to Best’s recent history.

There remains for review the single point urged by Best upon this appeal, that the trial court was without jurisdiction to enter judgment because it erred in permitting the substitution of the Trustee ih bankruptcy as party plaintiff after the original plaintiff, Berman, had rested its case, and that such substitution clearly prejudiced the rights of Best. To avoid confusion, it should be pointed out that Berman, the original plaintiff, was a division or wholly owned subsidiary of the Bermec Corporation, and that Rosen is the Trustee of Bermec under Chapter 10 of the Bankruptcy Act, providing for corporate reorganization, by appointment of the United States District Court, Southern District of New York. The Trustee’s appointment and qualification and the interrelation of Berman, Bermec and the Trustee are not challenged.

The determination of the sole question on this appeal requires a review of the lengthy and somewhat complicated and sometimes inexplicable procedural history of this case.

Suit was filed on July 8,1970 by Berman; service was obtained and the issues drawn. So far as this record discloses, no bankruptcy proceedings were then in progress and it was not until June 2, 1971, that Bermec came into bankruptcy reorganization proceedings under Chapter 10, and the Trustee was appointed in New York to operate and manage the property and business of the Bermec Corporation (including the property and business of its division, Berman).

Nevertheless, the long-delayed trial of this action in the court below did not commence until April 24,1973. The then plaintiff, Berman, offered evidence in support of its claim, and at the conclusion thereof, the court inquired of counsel for Best if it would offer any evidence in defense; otherwise judgment would be entered for plaintiff. Counsel replied that he was uncertain as to whether evidence would be offered in defense until he had an opportunity to confer with his associates, and the court thereupon continued the matter until the afternoon of the next day, April 25,1973. It had been brought out in Berman’s evidence that some sort of bankruptcy proceedings were in progress which might or could affect the ease.

A long period of silence on the record ensues until January 21, 1974, when the plaintiff, Berman, filed a motion to substitute the Trustee as party plaintiff by reason of his appointment of June 2, 1971, and an order dated October 24, 1973 of the United States District Court in the reorganization proceedings specifically authorizing the Trustee to take over and proceed with this case. It does appear that the case was placed upon a peremptory call in February of 1974, and the court set it down for final disposition for March 25, 1974. In the meantime, however, the court, having received no response from Best to the motion to substitute the Trustee as party plaintiff, sustained such motion on March 19, 1974.

On March 25, 1974, the trial court reviewed the status of the case, stated that the evidence and proceedings had not been completed nor judgment entered, and again afforded Best an opportunity to offer any testimony or evidence in defense it desired. Best, however, chose to stand upon its motion to dismiss for lack of jurisdiction because of the alleged improper substitution of the Trustee as party plaintiff. The trial court thereupon overruled the motion to dismiss, entered judgment for the substituted plaintiff, and this appeal followed.

At the outset of any discussion of the legal problem thus raised, it must be noted that the powers and duties of a trustee under Chapter 10 of the bankruptcy laws concerning corporate reorganization, insofar as litigation is concerned, are generally the same as any other trustee appointed under Chapter 11 or any other section of the bankruptcy laws. Sections 586, 587, Chapter 10, U.S.C.A., Bankruptcy. Title to the property of the bankrupt rests in the trustee, including rights of action upon contracts. Section 110(a)(5)(6), Chapter 7, U.S. C.A., Bankruptcy Estates.

The trustee is granted specific statutory authority, with court approval, to continue suits already commenced before his appointment. Section 29(c), Chapter 3, U.S. C.A., Bankrupts, provides:

“(c) A receiver or trustee may, with the approval of the court, be permitted to prosecute as receiver or trustee any suit commenced by the bankrupt prior to the adjudication, with like force and effect as though it had been commenced by him.”

The Supreme Court of the United States has spoken to this subject in Meyer v. Fleming, 327 U.S. 161, 646 S.Ct. 382, 90 L.Ed. 595, where the court said, 66 S.Ct., l.c. 385[2-6]:

“Litigation instituted by a creditor may not be defeated merely by reason of the fact that he has become a bankrupt. * * * Title to the claim vests, of course, in the bankruptcy trustee. He is in position to take control of the litigation. He may * * * start a new suit and cause the old one to be abated, or intervene in the old one and obtain such benefits as it affords. * * * And the speculative nature of the litigation or the expense involved might indicate to the trustee that it was more provident for him not to intervene in the existing suit, nor to institute a new one, but to let the one which had been started run its course. * * * ”

The Meyer court, following Johnson v. Collier, 222 U.S. 538, 32 S.Ct. 104, 56 L.Ed. 306, held that where the trustee did not intervene in the old suit or start a new one, the bankrupt could continue the litigation and hold any money or property finally recovered for the benefit of the estate, and the defendant in the litigation is “amply protected from any danger of being made to pay twice.” See also, Paradise v. Vogtlandische Maschinen-Fabrik, 99 F.2d 53, 55 [7-10] (3rd Cir. 1938); Hahlo v. Cole, 112 A.D. 636, 98 N.Y.S. 1049 (1906).

In the case at bar, the bankruptcy trustee chose to intervene in the litigation, and under the statutory and case law above noted, he was entitled to do so, and the court below properly permitted the substitution. Nor was this substitution in any way inimical to Missouri procedure. Rule 52.13(c), Rules of Civil Procedure specifically provides for a substitution upon a “transfer of interest” which ensued by reason of the Bermec bankruptcy proceedings.

Nor does it appear that any rights of Best were prejudiced or how its interests would be served by a new start or beginning of the case, as it urged both below and here. The nature and quantum of proof of its liability or non-liability on the rental agreements and for the property damage would be the same and its defenses, if any it had, would not be affected by the substitution.

The court below properly ruled the substitution,' and the judgment is affirmed.

All concur.

      . Schneider v. Best Truck Lines, Inc., 472 S.W.2d 655 (Mo.App.1971); Riley v. Best Truck Lines, Inc., 510 S.W.2d 229 (Mo.App.1974); Pacific Intermountain Express v. Best Truck Lines, Inc., 518 S.W.2d 469 (Mo.App.1974).

      . The record discloses that the trial court did receive by hand delivery a letter from counsel for Best on March 21, 1974, objecting to the substitution. This letter was dated February 6, 1974, and no explanation appears as to why it was not previously received.


source: Caselaw Access Project

author: COOPER, Chief Justice.

license: Public Domain

text:
    C. D. SWALLOWS, Appellant, v. WESTERN ELECTRIC COMPANY, INC. and Pinkerton’s, Inc., Appellees.
    Supreme Court of Tennessee.
    Nov. 15, 1976.
    William P. Sutherland, Watkins, McGug-in, McNeilly & Rowan, Nashville, for appellant.
    J. G. Lackey, Jr., Stephenson & Lackey, Don R. Binkley, Gracey, Maddin, Cowan & Bird, Nashville, for appellees.
   OPINION

COOPER, Chief Justice.

C. D. Swallows filed an action in the Circuit Court for Davidson County, against his employer, Western Electric Company, Inc., and a detective agency, Pinkerton’s, Inc., charging the defendants were guilty of “outrageous conduct” and “invasion of privacy,” which caused the plaintiff to suffer severe physical and emotional harm. The defendants filed motions to dismiss, testing the sufficiency of the complaint, as amended. The trial judge then dismissed the action, holding that the complaint failed to state a cause of action on either of the theories advanced by Mr. Swallows.

We affirm.

The predicate for the action against ap-pellees is set forth in the following paragraphs of the complaint, as amended:

5. On or about January 29, 1975, G. C. Hunt and L. W. Weis, Section Chief and Department Chief, respectively, for Western at its Nashville facility, received in their office mail certain envelopes, without return addresses, each of which contained an ace of spades. For reasons apparently sufficient and satisfactory unto themselves, Weis and Hunt, acting in their official capacities as Western employees, determined that these aces of spades were intended as threats upon their lives.
6. On that same day, Weis and Hunt, once again acting within their official capacity as Western employees, advised Swallows that he was the “number one suspect” in the mailing of the playing cards. Plaintiff avers that he immediately advised Weis and Hunt that not only had he not mailed the cards, but also that he had absolutely no knowledge whatsoever of their mailing, and further charges that even in the face of his denial, and even in the face of the fact that Weis and Hunt had absolutely no reason whatsoever to believe that Swallows was implicated in any way in the mailing of the playing cards, the said Weis and Hunt continued to harass him and accuse him.
7. Shortly thereafter, Weis and Hunt somehow managed to convince their superiors at Western that Swallows had in fact been guilty of mailing the playing cards. Thereafter, Western caused defendant Pinkerton’s, which is engaged in the business of general security services, to investigate Swallows’ background, his private life, and all other manner of things concerning Swallows in the most minute and personal detail. Swallows charges that although Western and Pinkerton’s knew, or in the exercise of reasonable diligence and good judgment, should have known, that he had nothing to do with the mailing of the playing cards to Weis and Hunt, Western and Pinkerton’s, acting by and through one D. M. Perrine, continued to harass and investigate him for a period of approximately six (6) months. Plaintiff avers that Western and Pinkerton’s became so adamant in their harassment that Western even attempted to formally discipline him, without sufficient cause, and that such attempted discipline was eventually reproved by a Federal mediator under the terms and conditions of Western’s master agreement with the Communication Workers of America, AFL-CIO, of which Swallows is a member.
8.Plaintiff avers that throughout the six (6) months period referred to herein, Weis and Hunt, acting in their official capacity, did everything within their power to make his time spent at his employment as miserable as possible. Weis, Hunt and Perrine made it plain to Swallows that it was their intention to “get him”, and Weis and Hunt further made it plain to Swallows that it was their desire to see him no longer in the employ of Western, and that they would use all means at their disposal to see to it that end met with fruition.

The appellant also charged that the ap-pellees had actual knowledge that appellant has suffered from mild emotional difficulties in the past and that they should have known that the conduct described above would have “a most deleterious effect upon [appellant’s] emotional stability and well being,” and that the actions of appellants, in fact, did cause appellant to suffer “the most grievous mental and emotional pain and suffering. . .

Liability for the tort of “outrageous conduct” exists only where (1) the conduct of the defendants has been so outrageous in character, and so extreme in degree, as to be beyond the pale of decency, and to be regarded as atrocious and utterly intolerable in a civilized society, and (2) the conduct results in serious mental injury. Medlin v. Allied Investment Co., 217 Tenn. 469, 398 S.W.2d 270 (1966). “ ‘The liability clearly does not extend to mere insults, indignities, threats, annoyances, petty oppression, or other trivialities.’ ” Restatement of Torts (2d), § 46, comment (d), quoted with approval in Medlin, supra 398 S.W.2d at page 274.

In Martin v. Senators, Inc., 220 Tenn. 465, 418 S.W.2d 660 (1967), assuming the existence of the common law right of action for invasion of privacy, this court pointed out a condition engrafted on the action, in that:

[Liability (for invasion of privacy) exists only if the conduct is such that a defendant should have realized it would be offensive to persons of ordinary sensibilities; and that it is only where the intrusion has gone beyond the limits of decency that liability accrues . . . . (Emphasis supplied.)

The Tennessee Rules of Civil Procedure, while simplifying and liberalizing pleading, do not relieve the plaintiff in a tort action of the burden of averring facts sufficient to show the existence of a duty owed by the defendant, a breach of the duty, and damages resulting therefrom. The complaint in this action is replete with conclusions couched in the language of Medlin, supra, but does not undertake to describe the substance and severity of the conduct of appellee’s employees which allegedly amounted to harassment, nor the substance and severity of the conduct of Pinkerton in its investigations, nor the actions of Western Electric in attempting to discipline appellant. And, as was pointed out in Medlin, “it is not enough in an action of this kind to allege a legal conclusion; the actionable conduct should be set out in the [complaint],” supra 398 S.W.2d at page 275. This is so because the court has the burden of determining, in the first instance, whether appellees’ conduct may reasonably be regarded as so extreme and outrageous as to permit recovery or whether the conduct is such as to be classed as “mere insults, indignities, threats, annoyances, petty oppression, or other trivialities,” for which appellees would not be liable. See comments to § 46 of the Restatement of Torts, Second.

The judgment of the trial court dismissing appellant’s suit for failure to state a cause of action is affirmed. Costs incident to the appeal are adjudged against the appellant and his surety.

FONES, HENRY, BROCK and HARBI-SON, JJ., concur.

      . See Johnson v. Woman's Hospital, 527 S.W.2d 133 (Tenn.App.1975), for conduct which meets the test prescribed in Medlin, supra.


text:
    The CROWN ENTERPRISES, INC., Appellant, v. The STATE BOARD OF EQUALIZATION et al., Appellees.
    Supreme Court of Tennessee.
    Nov. 15, 1976.

      James W. Bradford, Jr., Edwin 0. Norris, Hunter, Smith, Davis, Norris, Treadway & Hadden, Kingsport, for appellant.
    R. A. Ashley, Jr., Atty. Gen., Everett H. Falk, Deputy Atty. Gen., Nashville, for ap-pellees.
   COOPER, Chief Justice.

OPINION

In this action Crown Enterprises, Inc., challenges the classification of real property as “public utility property” for ad valorem tax assessment purposes.

The action originated as a petition for certiorari from the State Board of Equalization. Appellant contended that the taxing authority usurped the jurisdiction of the Tennessee Public Service Commission by classifying and assessing the taxpayer’s property according to the use made of the property by the lessees, that the property should have been classed as “industrial and commercial property,” and that the procedure followed by the Board in considering the appeal of the property classification violated due process. On considering the issues in the light of the record filed with the court by the State Board of Equalization and the evidence submitted in the chancery court, the chancellor concluded the Board had not acted illegally or in excess of its jurisdiction in classifying appellant’s property for tax purposes and dismissed the petition for certiorari. Crown Enterprises, Inc., appealed, taking issue with the chancellor’s holding on each of the issues raised in the petition for certiorari.

Appellant is a Tennessee corporation engaged in the business of acquiring, leasing, renting, and owning real property. In the prosecution of its business, it has leased real property to regulated public utilities in several of the larger cities of Tennessee. One such lease involves 6.3 acres of land located at 1500 Second Avenue, South, Nashville, Tennessee. The property is leased to the Mason and Dixon Lines, Inc., for use in the conduct of its business as a regulated public utility. Mason Dixon operates a truck terminal and repair shop on the property.

In 1973, the Assessor of Property for Metropolitan Nashville and Davidson County classified the property as public utility property and assessed the property to appellant at fifty-five per cent of its fair market value. Appellant perfected an appeal to the State Board of Equalization, challenging the classification of the property. The appeal was heard by a “hearing examiner” for the State Board, with the result that the “hearing examiner” orally informed appellant the property would be classified as commercial and industrial property, which carries a lower assessment than public utility property.

On reviewing the report of the “hearing examiner,” the Executive Secretary of the State Board of Equalization notified appellant that he disagreed with the conclusion of the “hearing examiner,” and issued a “Corrected Official Certificate” classifying the property as public utility property.

Appellant took issue with the action of the Executive Secretary and was granted a hearing before the State Board of Equalization. The State Board classified the property as “public utility property,” subject to being assessed at fifty-five per cent of its fair market value.

Article II, Section 28 of the Tennessee Constitution, as amended in 1973, requires classification of property for ad valorem tax purposes, and prescribes four subclassi-fications: (1) public utility property, (2) industrial and commercial property, (3) residential property, and (4) farm property. In establishing the classifications and subelas-sifications, Article II, Section 28 specifically provides that the Legislature shall direct the manner in which the value and definition of the property in each class or subclass are to be ascertained.

The Legislature has enacted a comprehensive Property Assessment and Classification Act, now codified in Title 67, Tennessee Code Annotated, and has provided in Section 67-611 that:

“For the purpose of taxation all real property except vacant or unused property or property held for use, shall be clássi-fied according to use, and assessed as hereinafter provided . . . ” (Emphasis supplied.)

Appellant insists that the phrase “according to use” requires property to be assessed to the owner in accordance with the use the owner makes of the property. On the other hand, appellee insists it is the actual use to which the property is put that determines its classification. This court considered similar contentions with respect to personal property — specifically, railroad cars designed to transport meats and other products requiring special equipment and which were leased to private businesses — and held that it was the use to which the property was being put, not ownership of the property, that determined property classification.

“The Tennessee statutes do not attempt to assess or tax property according to ownership, but according to use.” Gen. Am. Transp. Corp. v. Tenn. Bd. of Equal., Tenn., 536 S.W.2d 212 (1976).

If it were otherwise, and the classification depended upon ownership of the property, a public utility could defeat the constitutionally prescribed classification of property merely by leasing property needed to operate the public utility from a non-public utility owner of property.

Public utility property is defined in T.C.A. 67-601(7)

“ . . .to include all property of every kind, whether owned or leased, and used, or held for use, directly or indirectly in the operation of a public utility, which shall include but not necessarily be limited to the following business entities, whether corporate or otherwise: . (11) motor bus and/or truck companies holding a Certificate of Convenience and Necessity or contract haulers permit from the Tennessee public service commission or the interstate commerce commission and domiciled in this state and/or owning or leasing real or personal property located in this state; . . . .”

By its terms, the public utility property definition includes all property, whether owned or leased, and used or held for use directly or indirectly in the operation of a public utility. The 6.3 acre tract of land owned by appellant was in fact put to use as a truck terminal and repair facility by a trucking company which is a public utility. The property, being used directly in the operation of a public utility, is public utility property within the definition of T.C.A. § 67-601(7), and must be classified as such for the purpose of ad valorem taxes.

Appellant argues that if the subject property is classified as public utility property for tax purposes, it must be assessed by the Public Service Commission and not by the Metropolitan Assessor of Property, citing T.C.A. § 67-901 which provides in part as follows:

“The Tennessee public service commission, hereinafter called the commission, is authorized and directed to assess for taxation, for state, county, and municipal purposes, all of the properties of every description, tangible and intangible, within the state, owned by and all personal property used and/or leased by the following named persons hereinafter referred to as companies, namely: . (11) motor bus and/or truck companies holding a certificate of convenience and necessity or contract hauler’s permit from the Tennessee public service commission or the interstate commerce commission and domiciled in this state and/ owning or leasing real or personal property located in this state; . . . ”

As pointed out by appellees, “this statute directs the Public Service Commission to assess two basic groups of properties — (1) all properties within the State owned by the described companies, and (2) all personal property used and/or leased by the described companies.”

Appellant argues the leasehold interest of Mason Dixon is personalty and thus is within the basic groups of property to be assessed by the Public Service Commission. The fallacy of this argument is that the leasehold interest is not the property interest that was assessed. It was the fee interest in real property owned by appellant, who is not a company described in T.C.A. § 67-901; consequently, the property does not fall within either of the basic groups of properties that are to be assessed by the Public Service Commission.

Aside from questioning the merits of the classification of appellant’s property for ad valorem tax purposes, plaintiff insists there were two flagrant violations of procedural due process in this case:

One, that appellant was not given notice nor an opportunity for a hearing before the Executive Secretary issued the “Corrected Official Certificate” classifying appellant’s property as “public utility property;”

Two, that appellant was coerced into a hearing on the merits of its claim before the State Board of Equalization.

We see no basic violation of due process in the procedure followed in classifying appellant’s property for ad valorem tax purposes or in the review of the classification. Cf. T.C.A. § 67-639. Certainly, there was no coercion so as to invalidate the hearing before the State Board of Equalization wherein appellant was represented by counsel, offered testimony, and was given the opportunity to submit a post-hearing brief. Further, it is interesting to note that appellant at no time questioned the value placed on the property by the assessing authority, but only questioned the classification of the property for ad valorem tax purposes. The facts on which the classification was based were undisputed, leaving in issue only the legal conclusion to be drawn from the facts. Appellant had a full opportunity, both before the State Board of Equalization, the chancery court, and this court, to present its position on the controlling issue of law. This being so, any error in the procedure before the “hearing examiner” or the State Board of Equalization would be harmless error.

Decree affirmed. Costs incident to the appeal are adjudged against appellant, The Crown Enterprises, Inc., and its surety.

FONES, HENRY, BROCK and HARBI-SON, JJ., concur.


author: FONES, Chief Justice.

text:
    The METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, Tennessee, et al., Appellants, v. The STATE BOARD OF EQUALIZATION of the State of Tennessee et al., Appellees.
    Supreme Court of Tennessee.
    Nov. 22, 1976.
    Edward W. McCabe, Robert W. Rutherford, Metropolitan Legal Dept., Nashville, for appellants.
    Brooks McLemore, Jr., Atty. Gen., Everett H. Falk, Deputy Atty. Gen., John T. Conners, Jr., Michel G. Kaplan, Boult, Cummings, Conners & Berry, Nashville, for ap-pellees.
   OPINION

FONES, Chief Justice.

This appeal involves a grant of exemption from taxation on property owned by St. Thomas Hospital in Nashville. The exemption was awarded by the Tennessee State Board of Equalization and upheld by the Chancellor over opposition of appellants, the Metropolitan Government of Nashville and Davidson County, the Metropolitan Tax Assessor and the Metropolitan Board of Equalization.

Saint Thomas Hospital is a non-profit corporation which has provided medical service to citizens of Nashville since 1905. Because of demands for a larger and more modern medical facility, St. Thomas procured the land in question to build a new hospital. It paid the property tax on the land for the years 1970 through 1973, and applied for the exemption to be effective January 1,1974. On January 1, 1974, construction on the new hospital was in its final stages. The hospital actually began operation in December, 1974. There is no controversy between the parties for years subsequent to 1974, the exemption having been allowed except for a minor portion of the premises.

Pursuant to Article 2, Section 28 of the Constitution of Tennessee, the state legislature enacted T.C.A. § 67-513 which insofar as is relevant here, provides:

“(a) There shall be exempt from property taxation, the real and personal property owned by any religious, charitable, scientific or educational institution which is occupied and used by such institution or its officers purely and exclusively for carrying out thereupon one or more of the purposes for which said institution was created or exists . . .”

The sole issue is whether property during construction is “occupied and used” within the meaning of the exemption statute.

In City of Nashville v. State Board of Equalization, 210 Tenn. 587, 360 S.W.2d 458 (1962), Mr. Justice Felts, writing for the Court, succinctly stated the requirement for an exemption:

“. . . the plain intent of this Act is to exempt such an institution’s real estate only when it is both (1) ‘occupied ’ and (2) ‘used exclusively’ by the institution for one of its charter purposes . . 210 Tenn. at 606, 360 S.W.2d at 466.

Our next opportunity to apply this test involved the converse of the factual situation of the present case. In Mid-State Baptist Hospital Inc. v. City of Nashville, 211 Tenn. 599, 366 S.W.2d 769 (1963) the hospital had been tax exempt for a period of years. They began construction in 1958 on a commercial building located on the exempt property. The building was completed and occupied in January, 1960. The hospital paid its tax for 1960 but refused to pay it for 1958 and 1959. The City of Nashville contended that commencement of construction on the commercial building ended the exemption. This Court held that the hospital owed no taxes during the period of construction,

“The better rule is that it requires use to take real property off the tax rolls. When real property is not on the tax rolls by reason of being exempt it should take use to put it back on, not intention.” 211 Tenn. at 607, 366 S.W.2d at 773.

Since Mid-State Baptist Hospital, we have continued to look for actual physical use in determining exemptions. See La Manna v. Electrical Workers, 518 S.W.2d 348 (Tenn.1974); Book Agents of Methodist Episcopal Church South v. State Board of Equalization, 513 S.W.2d 514 (Tenn.1974).

Appellees urge that tax exemptions in favor of charitable institutions are liberally construed rather than strictly construed in this State. We are aware of that line of cases. Peabody College v. State Board of Equalization, 219 Tenn. 123, 407 S.W.2d 443 (1966); Sunday School Board of Southern Baptist Convention v. Evans, 192 Tenn. 495, 241 S.W.2d 543 (1950); City of Athens v. Dodson, 154 Tenn. 469, 290 S.W. 36 (1926). Nevertheless as Mr. Justice Pelts noted in Nashville v. State Board of Equalization, supra and Chief Justice Dyer quoted in Book Agents of Methodist Episcopal Church, . . the scope of tax exemption of property of such institutions has been steadily narrowed by decisions of this Court under our successive revenue acts ...” 210 Tenn. at 601, 360 S.W.2d at 464, and 513 S.W.2d at 521. This case is controlled by the rule that it requires use to take real property off the tax roles. Giving the statute a liberal construction would not, in our opinion, permit a finding that the hospital was in use for charitable purposes on January 1, 1974.

The decree of the Chancery Court is reversed. Costs are assessed against St. Thomas Hospital.

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

      . Chapter 644, Public Acts 1974, changed the lien date from January 10 to January 1.


text:
    In re ESTATE of Adele Shepherd TATE, Deceased.
    Supreme Court of Tennessee.
    Nov. 29, 1976.

      S. Shepherd Tate, W. Thomas Hutton, Martin, Tate, Morrow, & Marston, P. C., Memphis, for appellants-executors.
   OPINION

COOPER, Chief Justice.

This appeal involves the question of whether a testatrix may make a bequest to a minor in excess of One Thousand ($1,000) Dollars and authorize the executor to deliver the money to the parents of the minor without guardians and without bond.

Adele Shepherd Tate died testate on October 3,1974. The will admitted to probate contains several bequests of cash and stock to minor beneficiaries, the bequest to David Shepherd Walker being Two Thousand Five Hundred no/100 ($2,500.00) Dollars. The will provides that:

“If at my death any of said beneficiaries is a minor, I authorize my Executor to deliver the sum bequeathed to such beneficiary in this item to the then living parents of such minor, without bond, and the receipt thereof of such parents shall be a full and complete discharge to my Executor, with respect to said property. It is my hope that these bequests will be used for educational advantages and foreign travel.”

In accordance with the authorization in the will, the executor delivered the cash and the stock bequeathed to the minor beneficiaries to the parents of the beneficiaries. On the filing of a petition for approval of the payments, the trial judge held that, notwithstanding the express provisions in the will concerning the distribution of bequests to minor beneficiaries, the court would not approve of the executor making delivery of the bequest to David Shepherd Walker to his parents, and would only approve the delivery to a legally appointed guardian, citing T.C.A. § 34-108 which provides that:

“When a personal representative shall have made a settlement of an estate, and there remains in his hands a sum of money, not exceeding one thousand dollars ($1,000.00) due a minor, regardless of whether said minor has a regular guardian, the court may, when in its opinion the interest arising on such is not sufficient to pay the expenses of appointing a guardian, making settlements, and other expenses attending a guardianship, by an order or decree make such disposition of same for the benefit of said minor as will in its judgment best promote his interest.”

We agree with appellant that T.C.A. § 34-108 applies only to situations where funds from an estate are due a minor, and there is no authorization in the will concerning the delivery of the funds to the parents or any other adult person for the use of the minor. See Phillips’ Pritchard on the Law of Wills and Administration of Estates (3rd Edition) which states in Section 751 as follows:

“Legacies must be paid to the persons to whom they are due by the will of the deceased; payment to the wrong person, or to one not entitled to receive the legacy, — as to the clerk of the county court,— will not relieve the executor. If the legatee has died, and the legacy has not lapsed, his executor or administrator is entitled to receive it. If the legatee is an infant, the executor is not justified in paying the legacy either to the infant, or to the father or other relative of the infant, without the sanction of a court of equity, unless so directed by the will. Of course, if the will directs that payment be made to the father, or any other trustee for the use of the child, he is entitled to receive the legacy, and his receipt will be a good discharge to the executor; but the directions must be found in the will, and cannot be proved by parol.” (Emphasis added.)

Where, as in this case, there is a clear declaration by the testatrix that bequests to minor beneficiaries are to be made to the minor’s parents, to require the appointment of a legal guardian to receive the bequest would thwart the expressed intention of the testatrix and will result in additional expenses which the testatrix sought to avoid by authorizing the executor to deliver the bequest to the minor’s parents, without bond.

The order of the Probate Court disapproving the distribution of the bequest to the parents of the minor beneficiary, David Shepherd Walker, is reversed. Costs incident to the appeal will be paid by appellant First National Bank of Memphis in its capacity as Executor of the Estate of Adele Shepherd Tate, deceased.

FONES, HENRY, BROCK and HARBI-SON, JJ., concur.


author: NEARN, Judge.

text:
    Joe E. RICHARDSON, Appellant, v. RUSSOM CRANE RENTAL COMPANY et al., Appellees.
    Court of Appeals of Tennessee, Western Section.
    Jan. 28, 1975.
    Certiorari Denied by Supreme Court July 21, 1975.

      Thomas A. Stroud, Memphis, for appellant.
    Leo Bearman, Memphis, for appellees.
   NEARN, Judge.

This suit was for personal injuries. The Trial Judge directed a verdict for the defendant at the close of plaintiff’s proof. The plaintiff has appealed.

Plaintiff, Joe E. Richardson, originally filed suit against Russom Crane Rental Company, Central Foundry Company, and Ray Cook Plumbing Company. Prior to trial, voluntary non-suit was taken as to defendants Central Foundry Company and Ray Cook Plumbing Company and the matter proceeded to trial against Russom Crane Rental Company with the aforesaid results.

Plaintiff was sales and office manager of Mid-South Sales Company. Among other things, Mid-South sells soil pipe as a manufacturer’s representative. Plaintiff in his capacity as manager sold a load of pipe to Hollingsworth Supply Company which in turn had sold the pipe to Ray Cook Plumbing Company where it was to be unloaded. As part of the deal, plaintiff made arrangements to have the pipe brought directly to the premises of Ray Cook from the manufacturer, Central Foundry, on a Central Foundry truck and plaintiff employed or rented on an hourly basis a crane and crane operator from Russom Crane Rental Company to offload the pipe.

The pipe arrived via Central Foundry truck on the Cook premises on the morning of September 9, 1969. The Russom crane and operator were there to unload. The Central Foundry driver and a helper from Ray Cook were supposed to assist in the unloading, but decided first to have a little breakfast. Plaintiff was not pleased with the fact that Mid-South was being charged rental time on the crane for the time the Central Foundry and Ray Cook employees were enjoying their breakfast. Plaintiff instructed the Russom crane operator to proceed with the offloading. While so doing, a load of pipe slipped, fell upon plaintiff and injured him.

Plaintiff testified that the crane operator operated the machine under plaintiff’s directions; that is, plaintiff controlled when, where, and for what purpose the crane was to be operated. Of course, plaintiff did not direct the crane operator in regard to the technical, physical operation of the crane, for plaintiff did not know how to operate a crane.

As to the manner in which plaintiff sustained his injuries, plaintiff testified that the several sections of pipe were packaged on the truck on pallets and that one pallet load of pipe had been set off. To facilitate unloading the pallets Mid-South, plaintiff’s employer, had furnished a tool called a fork adapter. From an exhibit in the record we would describe it as a heavy metal plate with two prongs or forks affixed at each bottom corner extending outwardly at a 90° angle from the plate. From the top of the plate and center thereof there extends a single arm at a 90° angle running in the same direction as the bottom forks. An “eye” bolt is affixed to the end of the top arm so that a crane hook may be inserted. From a side linear view it would appear as a three sided box. The idea being that the bottom forks are inserted to maximum depth in the bottom of a pallet or underneath the load to be lifted; then the crane hook is inserted on the top arm and the load is lifted. In removing the second load this fork adapter became hung either in pipe or a pallet so that it was not properly aligned. The crane operator requested that plaintiff unhang it. Plaintiff proceeded to attempt to do so, but while in the process the cable line from the adapter to the crane, which had been slack, became taut and “the whole pipe, the fork and everything just came loose and fell.” In falling, the pipe struck and injured plaintiff.

We are of the opinion that the Trial -Judge was right in directing a verdict in favor of the defendant Russom.

The crane operator falls in the category of a loaned servant. At the time of the injury complained of he was not acting as the agent or servant of Russom so as to make Russom answerable for his alleged negligence under the doctrine of respondeat superior.

We believe this case to be on “all fours” with the case of Gaston v. Sharpe (1943) 179 Tenn. 609, 168 S.W.2d 784. In that case it was a dragline involved instead of a crane. The proof showed that:

“It was the duty of the operator to use the machine on the project as directed by those (Richardson) supervising the work.
* * * * * *
“The operator furnished by Sharpe (Rus-som) was in charge of the dragline (crane) and its manipulation and his duty was to employ it as directed by the foreman or supervisor (Richardson) of the work.
* * * * * *
“It was in pursuance of an order of the foreman or supervisor (Richardson), which that party was entitled to give, that the operator did the thing that injured the plaintiff.” (Parenthetical words added.)

That statement of the proof is exactly what the proof shows in this ease. The crane operator was attempting to unload pipe just as he had been ordered to by Richardson. In the process of unloading, the adapter became entangled, and the attempt to disengage it was in the furtherance of Richardson’s order to unload the pipe. If the operator was negligent, it was in the process of doing what he had been ordered to do.

In the Gaston case, supra, the Supreme Court quoted with approval from Restatement of Agency in giving the test for determining whether or not the actor is a “loaned servant” or the agent of another. The meat of the Restatement rule is that the determination is dependent upon

“ ‘ — whether or not, as to the act in question, he is acting in the business of and under the direction of one or the other. It is not conclusive that in practice he would be likely to obey the directions of the general employer in case of conflict of orders. The question is as to whether it is understood between him and his employers that he is to remain in the allegiance of the first as to a specific act, or is to be employed in the business of and subject to the direction of the temporary employer as to the details of such act. * * * >

There is no conflict in the testimony that the operator was engaged in the act of unloading directly ordered by Richardson.

Therefore, we conclude that the crane operator was not employed in the business of and subject to the orders of Russom as to the act in question.

It results that the judgment of the Trial Judge is affirmed with costs of appeal adjudged against appellant and surety.

Judge ANDREW T. TAYLOR, by designation of the Supreme Court of Tennessee, took part in the hearing of this appeal in the absence of Presiding Judge C. S. CARNEY.

MATHERNE, J., and TAYLOR, Special Judge, concur.


author: SHRIVER, Presiding Judge.

text:
    MAPLE MANOR HOTEL, INC., Plaintiff-Appellant, v. METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, Tennessee, Defendant-Appellee.
    Court of Appeals of Tennessee, Middle Section.
    Nov. 28, 1975.
    Certiorari Denied by Supreme Court April 19, 1976.
    Hugh C. Howser, Thos. C. Binkley, Hugh C. Howser, Jr., Nashville, for plaintiff-appellant.
    Robert W. Rutherford, Donald L. Corlew, Metropolitan Attys., Dept, of Law of Metropolitan Government, Nashville and Davidson County, for defendant-appellee.
   SHRIVER, Presiding Judge.

OPINION

The Case

This is a suit to enjoin defendant from interfering with the ingress and egress to plaintiff’s property and for damages because of said interference by the closing of a street.

The case arose as a result of the action of the Metropolitan Council in enacting Bill No. 73-482 by which a portion of Surf Drive, a public street adjacent to plaintiff-appellant’s property, was abandoned.

The complaint, as originally filed, prayed for an injunction to restrain the enforcement of Bill No. 73 — 482 as being capricious and a manifest abuse of discretion by the Metropolitan Council and, in the alternative, for damages pursuant to Sections 54-2005 and 23-1423, T.C.A., in the amount of $720,000.00.

The amended complaint reiterates the prayer for injunction and further prays:

“5. That should the enforcement of Bill 73-482 be enjoined by the Court, and/or held unconstitutional, the plaintiff be awarded damages in the amount of $200,000.00, which represents damages plaintiff suffered while said street was unconstitutionally and illegally closed.
“6. That in the alternative, if Bill No. 73-482 is enforced, the plaintiff be awarded damages pursuant to T.C.A. Section 23-1423 in the amount of $720,-000.00.”

In the final decree, Chancellor C. Allen High sustained the prayer for injunction and awarded plaintiff damages in the amount of $12,500.00 as being the fair market rental value of plaintiff’s property for the period during which interference with ingress and egress existed.

The defendant did not perfect an appeal but plaintiff prayed for, was granted and perfected an appeal to this Court and has assigned error.

Assignment of Error

There is a single assignment of error, as follows:

“The Chancellor erred in limiting the plaintiff’s recovery to the fair rental value of its property for the time in which defendant’s bill was in full force and effect in that said holding is contrary to law.”
Appellant insists that:
“This was error because the method utilized by the Court in computing damages does not make the plaintiff whole, or place it in the same position it would have been had it not been for the enactment of Bill No. 73-482, which was enacted without an intended or contemplated purpose. The Court failed to consider the increased construction costs, increased interest costs, or loss of cash flow, about which plaintiff’s witnesses testified.
“The plaintiff must recover these elements or it will never be placed in the same position it would have been had the Bill never been enacted and enforced. Failure to award damages for these elements perpetuates the act of the defendant to the detriment of the plaintiff.”

The Facts and Proceedings Below

The plaintiff owned a tract of land in the 12th Civil District of Davidson County, described in the bill, comprising nineteen acres, which property was adjacent to a public street known as Surf Drive.

The Metropolitan Council enacted Bill No. 73-482 by which a portion of Surf Drive, south of Kenneth Drive, was vacated and abandoned. It was the insistence of the plaintiff that said street was the only means of ingress and egress to and from its property from the northerly end thereof.

It was alleged and shown that, upon application to the Metropolitan Planning Commission, plaintiff was granted permission to construct fifty-eight duplexes on the property in question. Later, however, upon further application, the Metropolitan Planning Commission voted to allow construction of an apartment complex on the property and it was subsequent to this action of the Planning Commission that the above mentioned Metropolitan Ordinance was passed closing a part of Surf Drive.

It was alleged and shown that the Planning and Zoning Committee of the Metropolitan Council had voted to keep Surf Drive open so that plaintiff’s projects could be constructed; however, the Council passed said ordinance, as above indicated.

It was alleged and shown that before a particular parcel of land in Davidson County can be subdivided or developed, it is necessary to have ingress and egress provided by a roadway fifty feet in width and, without the ingress and egress provided by Surf Drive, plaintiff’s property no longer had the required roadway footage for the construction of the proposed multi-unit project.

Plaintiff filed a Request for Admissions by the defendant, which request, upon motion of plaintiff and response of defendants, was granted to the extent that certain requests were stricken and others allowed, following which a motion for summary judgment was filed by the plaintiff, supported by affidavits and depositions by interrogatories, pursuant to which the Chancellor filed his Memorandum Opinion on July 2nd, 1974.

Chancellor’s Memorandum Opinion

The Opinion recites that the cause came on to be heard on June 28, 1974 for further argument on the motion of plaintiff for summary judgment; that plaintiff contends that the defendant’s closing of Surf Drive was unreasonable, without public purpose and, therefore, invalid, and that the pleadings, affidavit of counsel, admissions and answers to the interrogatories before the Court reflect no genuine issue of fact relating to the validity of Ordinance No. 73-482; that plaintiff filed fourteen numbered paragraphs, each of which was responded to by the answer of the defendant; that plaintiff was given leave to amend its complaint, from all of which certain averments of the amended complaint were denied and that there being no further application for amendment, the Court, pursuant to authority of Rule 8.04 TRCP, finds that the factual averments in Paragraph 15 of the amended complaint are admitted and: “The Court accordingly finds that the complained of closing of Surf Drive was a taking by the defendant without an intended or contemplated public use.”

The Opinion further refers to the action of the Metropolitan Planning Commission and Zoning Committee of the Metropolitan Council with respect to keeping Surf Drive open. It also refers to the testimony by interrogatories of Faris A. Deep, Executive Director of the Metropolitan Planning Commission, and Francis May, Chief Traffic Engineer of the Metropolitan Traffic and Parking Commission. The opinion also recites that the defendant filed no affidavits, requests for admissions, depositions or interrogatories in opposition to the plaintiff’s motion for summary judgment and that, in response to questioning by the Court, counsel for the defendant stated that in the event plaintiff’s motion for summary judgment was denied, defendant, upon a trial on the merits, would offer no evidence upon the issue of validity of the ordinance in question but would stand solely upon the presumption of validity accorded the ordinance.

The opinion proceeds:

“The Court finds that there is no genuine issue of fact upon the question of the validity of Bill No. 73-482. The Court finds that the ordinance was enacted without an intended or contemplated public use, was not enacted for a valid public purpose, is unreasonable and is invalid.
“The Court enjoins the defendant from the further enforcement of Bill No. 73-482 and directs that Surf Drive be reopened to permit the same ingress and egress to the plaintiff’s realty which it enjoyed prior to the complained of closing.”

The Court then orders a reference to the Master for a determination of damages, if any, sustained by the plaintiff as a result of the closing of Surf Drive.

Said opinion was implemented by a decree duly entered.

Pursuant to the order of reference, the following Report of the Clerk and Master was filed:

“REPORT OF THE CLERK & MASTER
TO THE CHANCELLOR:
Pursuant to the order entered in Part II of the Chancery Court, Davidson County, Minute Book 90, page 455,1 report as follows:
1. What are the damages to which Plaintiff, Maple Manor Motel, Inc., is entitled for the closing of Surf Drive and the taking of said property interest from the date of the passage of Bill No. 73-482 on April 15, 1973 to August 8, 1974.
It is the finding of the Clerk and Master that the Plaintiff, Maple Manor Motel, Inc., is not entitled to any damages from the defendant, Metro Government of Nashville and Davidson County.
(See Deposition of Hugh J. Bradley, David Knight, John R. Moore, George Hussey, Harry G. Hemmerly, J. L. Harper).
Respectfully submitted,
RAYMOND L. BARRETT
CLERK AND MASTER
Bv /s/ Philip D, Baltz
Deputy Clerk and Master”

After the filing of the foregoing report, plaintiff moved the Court, pursuant to 53.-04(2), Rules of Civil Procedure, for an order rejecting the report of the Clerk and Master for reasons stated in the exceptions and objections attached to the motion.

Thereafter, on February 14, 1975, the Chancellor entered a decree reciting that the cause was heard on motion of plaintiff for an order rejecting the report of the Clerk and Master filed January 15,1975 for reasons stated in the exceptions to said report, pursuant to which it was ordered that the parties were to submit within fifteen days from the date of the decree, findings of fact and conclusions of law, after which the Clerk and Master should prepare an amended and supplemental report with pertinent findings of fact and conclusions of law.

Pursuant to the foregoing decree, the respective parties filed their proposed findings of fact and conclusions of law for consideration by the Master and, thereafter, the Master filed his Supplemental Findings of Fact and Conclusions of Law, as follows:

“MASTER’S SUPPLEMENTAL FINDING OF FACT AND CONCLUSION OF LAW
TO THE CHANCELLOR:
Pursuant to the order entered on Minute Book 92, Page 202, I report as follows:
FINDING OF FACT
1. That plaintiff at any time was under no commitment from any lending institution for any construction on property in question.
2. That there was no development of the property at any time pertinent to this case, and that said property is now totally undeveloped.
3. That one of the two possible accesses to the property in question was closed.
4. That all future profits, expenses, cost and losses are based on the plaintiff’s speculation that an apartment could have been built with certain financial results.
CONCLUSION
It is the finding of the Master that the plaintiff’s assertion of damages are supported by a speculative foundation and being such, no damages can be awarded the plaintiff.
The Master grants an appeal to the Chancellor.
Respectfully submitted,
RAYMOND L. BARRETT
CLERK AND MASTER
Bv /s/ Philip D. Baltz
Deputy Clerk and Master”

This was followed by a motion of plaintiff to reject the supplemental report of the Master.

Thereupon, on April 1, 1975, the Chancellor filed the following Memorandum Opinion:

“MEMORANDUM
This cause came to be heard on March 28, 1975, upon motion of the plaintiff to reject the report and supplemental report of the Master, and for an order awarding damages to the plaintiff. After argument of counsel the matter was taken under advisement to consider the entire record.
After full consideration the Court will modify the Master’s report by making these additional findings:
1. The closing of the street by the defendant did deprive plaintiff of a legal building site.
2. The plaintiff is entitled to recover the fair rental value of the land during the period from April 15,1973 until April 8, 1974.
3. The Court finds, from all the evidence, that plaintiff is entitled to recover damages in the amount of $12,500.00.
The report of the Master will be further amended by striking the ‘conclusion’ portion of the report in its entirety.
The parties also submitted to the Court for decision the defense of governmental immunity raised by an amendment to the answer.
The defense of governmental immunity is not available as it is well settled in this State that impairment of the right of land owner’s ingress and egress is taking property for which compensation must be paid. Hamilton County v. Rape, 101 Tenn. 222.
Mr. Howser should prepare a judgment in accordance with this Memorandum.
/s/ C. Allen High
CHANCELLOR”

The foregoing Memorandum was implemented by a decree duly entered, from which the appeal herein was perfected.

Our Conclusions

As is seen from the Chancellor’s opinion and decree, he held that the Metropolitan Government had wrongfully closed a portion of Surf Drive and enjoined the operation of the ordinance of closing. He also held that plaintiff is entitled to damages for the temporary interruption of the means of ingress and egress and awarded plaintiff $12,500.00 as damages for said temporary closing of the street. Since there was no appeal by the defendant, the question of the allowance of damages based on the reasonable fair rental value of the property for the period of the taking is not subject to review here. Thus, the only question for determination on appeal is as to the amount of damages to which plaintiff is entitled.

The award was made on motion of plaintiff for summary judgment and the right of plaintiff to a summary judgment is not questioned on this appeal.

It is to be noted that counsel for appellant state in their brief that the plaintiff acknowledges damages based on the fair rental value of the property for the period the street was closed is one method of determining the amount of compensation to which the landowner is entitled, citing Cape Girardeau v. Hunze, 314 Mo. 438, 284 S.W.2d 471. But plaintiff asserts that the Chancellor was in error in limiting its compensation to this single element in light of the proof of additional loss and damages.

Counsel for plaintiff summarizes the evidence of its expert witnesses upon which its claim for damages over and above the fair rental value is based, stating as follows:

“Plaintiff’s expert witnesses testified that in addition to the loss of rental value awarded, plaintiff suffered damages as evidenced by the following elements:
(a) Increase in construction cost— $160,180.00 (Deposition of Harry Hem-merly, R. Col. I, p. 85).
(b) Loss of rental income — $105,520.00 (Deposition of David Knight, R. Vol. I, p. 127).
(c) Loss of interest — $55,556.00 (Deposition of David Knight, R. Vol. I, p. 128).
(d) Loss of cash flow — $23,702.00 per year (Deposition of David Knight, R. Vol. I, p. 126).”

Plaintiff continues by saying that it can never recoup these losses unless the Court awards recovery for these specific elements and, therefore, respectfully requests that plaintiff be restored to its former condition by recovering damages in the amount of $321,256.00.

Counsel for defendant calls especial attention to the report of the Clerk and Master who found:

“1. That plaintiff at no time had a loan commitment from any lending institution for any construction on the property in question.
2. That there was no development of the property at any time pertinent to this case, and that said property is now totally undeveloped.
3. That one of the two possible accesses to the property in question was closed.
4. That all future profits, expenses, cost and losses are based on the plaintiff’s speculation that an apartment could have been built with certain financial results.”

It appears that these findings of fact by the Master were concurred in by the Chancellor, hence, are conclusive on appeal if supported by any material evidence. Dale v. Hartman, 157 Tenn. 50, 6 S.W.2d 319; Crouch v. Crouch, 53 Tenn.App. 594, 385 S.W.2d 288. Said findings are supported by ample evidence.

The Chancellor added the following findings in his Memorandum of April 11, 1975:

“1. The closing of the street by the defendant did deprive plaintiff of a legal building site.
2. The plaintiff is entitled to recover the fair rental value of the land during the period from April 15,1973, until April 8, 1974.
3. The Court finds, from all the evidence that plaintiff is entitled to recover damages in the amount of $12,500.00.”

It is, of course, the position of appellant that if Surf Drive had not been abandoned by the passage of Ordinance No. 73-482, the appellant would have built an apartment complex, would have rented apartments therein, and would have realized a profit from its operation. However, it is to be further noted that the property in question was and still is unimproved and whether the appellant would have built the purported apartment is, of coui&e, not certain; appellant had not acquired financing for the project and, although he had negotiated with financial institutions about such financing, it had not even reached the stage of an actual application for a loan for such financing.

The proof of appellee was to the effect that even if the proposed project were undertaken by appellant, it would be a speculative venture; that the profits therefrom are uncertain; that completion dates would be affected by availability of materials and labor and that many unforeseen events might affect the success or failure of such an undertaking.

The proof as to the value of the property varies, one estimate being $100,000.00 with a rental figure of 10% of its value per year and while there was no proof introduced as to the potential market for the rental of said property, its market value and rental value are not now subject to review on this appeal.

There is evidence in the record that the construction of the proposed apartment complex came at a time of economic uncertainty with fluctuating interest rates, construction costs and possible material shortages. In short, there is ample evidence in the record to support the conclusion reached by the Master and Chancellor that the elements relied on by appellant to support a claim for damages other than the reasonable rental value are based on speculation and are so uncertain in character that a judgment cannot be reasonably based on same.

As was held in Anderson-Gregory Co. v. Lea, 51 Tenn.App. 612, 370 S.W.2d 934, speculative damages cannot be recovered and, as is said in that case:

“Only in a clear case, where proof of profits is devoid of any element of speculation and shows all proper means taken to minimize loss, should recovery be allowed for prospective profits where the contract is informal and nothing has been produced thereunder but only preparation to produce is made.”

In Baker v. Riverside Church of God, 61 Tenn.App. 270, 453 S.W.2d 801, it was held that a party who had failed to fulfill a contract cannot be held liable for remote, contingent and uncertain consequences, or for speculative or possible results which may have ensued from his breach.

In Oman Construction Co. v. City of Nashville, 49 Tenn.App. 171, 353 S.W.2d 97, it was said that under the circumstances of that case, since the amount of capital actually immobilized by reason of delay was not readily susceptible of reduction to a definite amount, interest on invested capital was disallowed, it being further observed:

“Ordinarily, profits that might have been made but for breach of contract are not recoverable, although there are exceptions.”

In the early case of Pettee v. Tenn. Mfg. Co., 33 Tenn. (1 Sneed) 380, it was held that the amount which claimant might have realized from running his factory during the delay caused by defendant and other losses occasioned by the idleness of the factory during the delay-were merely speculative profits and not subjects upon which claimant could recover.

In Hurley & Son v. Buchi, 78 Tenn. (10 Lea) 346, plaintiff purchased potatoes for planting which turned out to be a different kind than they were represented to be. Having suffered loss because his crop did not mature for the early market, he sued for damages and the Court held that he could only recover the difference in value and could not recover speculative damages.

In Chisholm & Moore Mfg. Co. v. U. S. Canopy Co., 111 Tenn. 202, 77 S.W. 1062, it was stated that it is a general rule that expected profits cannot be allowed as damages, where they are uncertain, speculative and contingent, and are dependent upon numerous, uncertain and dangerous contingencies.

In 25 C.J.S. Damages § 26, it is stated:

“The rule, applicable in actions of contract and in actions of tort, is that uncertain, contingent, or speculative damages may not be recovered.”

For reasons indicated, it results that the assignment, of error is overruled and the judgment of the Chancellor is affirmed.

AFFIRMED.

TODD and DROWOTA, JJ., concur.


author: CARNEY, Presiding Judge.

text:
    Bob HANLEY, Plaintiff-Appellee, v. Edmond Ramsey BURTON, Defendant-Appellant.
    Court of Appeals of Tennessee, Western Section.
    Dec. 1, 1975.
    Certiorari Denied by Supreme Court March 8, 1976.
    Joseph L. Lackey, Sr., Nashville, fot defendant-appellant.
    Howard F. Butler, Nashville, for plaintiff-appellee.
   CARNEY, Presiding Judge.

The Defendant below, Edmond Ramsey Burton, appeals from a judgment of the Circuit Court awarding the Plaintiff, Bob Hanley, $401.00 as back rent on a building formerly owned by Defendant. The case had been appealed from the General Sessions Court of Davidson County, Tennessee, and was tried below without a jury.

Prior to May, 1,1972, the Appellant, Burton, was the owner of a building on Tenth Avenue North in Nashville in which the Appellant had stored some x-ray machines, equipment, tools, and other personal property. Appellant persuaded his uncle, Buford Jennings, to pay off a mortgage on the property and to take title in the name of the uncle with the understanding that the Defendant would redeem the property when financially able and when his domestic affairs were in better shape. The Defendant failed to pay his uncle, Jennings. The uncle, Jennings, deeded the property to the Plaintiff, Robert C. Hanley, and wife, Helen Hanley, on November 1, 1973.

On December 4, 1973, the Plaintiff, Han-ley, brought suit for possession against the Defendant and was awarded judgment for possession on December 13, 1973. No rent was sued for in said suit. No appeal was taken from this judgment.

A writ of restitution was issued December 28,1973, but was never served upon the Defendant. No return was made by the sheriff. The Defendant continued to use the property to the extent that he left his personal property within the building. On July 25,1974, the Plaintiff sued the Defendant in the General Sessions Court of Davidson County for $1,125.00 for back rent. Process was returned “Not to be found in my county” by the sheriff. On October 8, 1974, writ of attachment was issued. The sheriff was commanded to attach an air conditioner, a junk automobile, and other personal property located at Tenth Avenue North. Process was had against Defendant by publication. Judgment was entered against the Appellant in the General Sessions Court in the amount of $1,125.00 on November 15, 1974.

No property was actually attached by the sheriff or the deputy. On November 15, 1974, the Plaintiff prepared a “Notice of sale” sign and posted it on a wall of the building advertising various items of the building for sale. On November 19, 1974, Defendant’s attorney notified the Plaintiff that he had no legal right to enter the building and sell the Defendant’s property. However, the Plaintiff entered, sold and gave away many items of personal property belonging to the Defendant. From the sale of the Defendant’s property, the Plaintiff received $724.00. On November 21, 1974, the Appellant appealed on the pauper’s oath the judgment in the General Sessions Court to the Circuit Court.

Upon the trial in the Circuit Court on April 21, 1975, the Trial Judge dismissed the Writ of Attachment as improvidently issued and defective on its face. The Trial Judge further held that while there was no personal service of process on the Defendant, the Defendant voluntarily appeared and defended the action and that the Defendant was liable to the Plaintiff in the sum of $401.00, the Court having given him credit for the $724.00 which the Plaintiff received from the sale of the personal property. The Court thereupon rendered personal judgment for $401.00. The judgment of $401.00 is the subject of the appeal to this Court.

By assignment of error No. I, the Defendant insists that the Court erred in holding that he submitted to the jurisdiction of the Court by voluntarily appearing and defending the attachment. He cites no authority to support such assignment of error. On the contrary, the Appellee cites and relies upon the cases of John Weis, Inc. v. Reed, 22 Tenn.App. 90, 118 S.W.2d 677 (1938); Straus v. Weil, 45 Tenn. 120 (1867); Akers v. Gillentine, 33 Tenn.App. 212, 231 S.W.2d 372 (1950), and Hall v. Jordan, 190 Tenn. 1, 227 S.W.2d 35 (1950). These authorities support His Honor’s holding that because the Defendant appeared generally and defended the action, he was subject to the judgment of the Court. Therefore, assignment of error No. I is respectfully overruled.

Assignment of error No. II insists that there is no competent evidence to sustain the judgment of $401.00 for “back rent.” The Appellant emphasizes that the Plaintiff testified on cross-examination that in the beginning he met with the Appellant, told him he would rent the property to him for $325.00 but they never did have a definite agreement.

There was ample evidence in the record from which the Judge could find that the Defendant-Appellant kept possession of this property from November 1973 until November 1974. The Trial Judge could consider the $325.00 per month rental asked by Plaintiff in determining the rent on a quantum meruit. The $1,125.00 approved by the Trial Judge appears reasonable. Assignment of error No. II is, therefore, overruled.

The judgment of the lower Court is affirmed at the cost of the Appellant.

MATHERNE and NEARN, JJ., concur.


text:
    Edward MITCHELL et al. Plaintiffs-Appellants, v. Judge Taylor CRAWFORD et al., Defendants-Appellees.
    Court of Appeals of Tennessee, Middle Section.
    Jan. 30, 1976.
    Certiorari Denied by Supreme Court April 5, 1976.
    Rehearing Denied by Supreme Court April 19, 1976.
    Certiorari Denied by U. S. Supreme Court Oct. 4, 1976.
    Jack Kershaw, Nashville, for plaintiffs-appellants.
    Robert W. Simms, County Atty, Lincoln County, Fayetteville, R. A. Ashley, Jr, Atty. Gen, Richard Lodge, Asst. Atty. Gen, State of Tenn, for defendants-appellees.
   OPINION

SHRIVER, Presiding Judge.

I. The Case

Certain taxpayers and certain parents of schoolchildren and several schoolchildren, by next friend, filed their bill under the Declaratory Judgment Act, seeking relief from actions of the School Board of Lincoln County and the action of the Quarterly County Court of that County in authorizing the issuance of $4,000,000.00 of school bonds for the improvement of the schools of the County and the building and establishment of a central Consolidated High School at or near Fayetteville, Tennessee.

After an extended hearing, the Chancellor denied the relief sought by plaintiffs and dismissed their bill, from which action plaintiffs have appealed to this Court and have assigned errors.

II. The Proceedings Below

Appellants originally filed their suit in the Chancery Court at Nashville and, following an appeal from the Davidson County Chancery Court to the Supreme Court, the case was sent back with instructions that it be proceeded with in the Chancery Court of Lincoln County with dispatch, it having been shown that the school bond issue was being delayed because the County could not deliver a “No Litigation Certificate” to prospective purchasers of the bonds and, thus, the program of building, repairing and improving existing school buildings and the erection of a new High School in Lincoln County in order to meet the minimum State requirements, could not be proceeded with.

It is shown that the Lincoln County School System in the year 1973 and prior years failed to meet minimum State standards and the local authorities were so notified by the State Commissioner and the State Board of Education. Following numerous discussions between the State and County School Officials, plans were made and approved by the State and local authorities for the building of one comprehensive High School near the center of the County and the remodeling of other schools so as to meet minimum State standards.

A $4,000,000.00 school bond issue was voted by a majority of the members of the Quarterly County Court of Lincoln County on June 28, 1974 under the authority of T.C.A. Sec. 49-701, et seq., with the understanding and agreement that the State of Tennessee would make available an additional $2,000,000.00 for certain facilities in connection therewith.

Following a hearing on the merits, Chancellor John D. Templeton entered a Final Decree on July 14, 1975 wherein he set forth in a well reasoned and concise manner the history of the litigation and the proceedings below, together with his findings of fact and conclusions of law, which we summarize as follows:

The Chancellor’s Findings and Decree

The final decree recited that the cause came on to be heard before Chancellor Tem-pleton on June 17, 1975 upon the complaint filed by plaintiffs, exhibits thereto, answer of the defendant County and State of Tennessee officials and the entire record in the cause, including briefs and prior orders of the Court, from all of which the Court found and decreed: that the $4,000,000.00 bond issue by Lincoln County as shown by the Minutes of the Quarterly County Court of that County at a Special Session on July 28,1974, was to be issued under the authority of Section 49-701, et seq., T.C.A., by which no referendum is required; that it was further found and decreed that it was the duty of the State Commissioner of Education and/or the State Board of Education to require the County schools to meet the minimum standards prescribed by the State and, upon failure to do so, the State Commissioner of Education, under authority of T.C.A. § 49-604(B), has the right to withhold minimum foundation school program funds from the local school system.

The Court further found that the proof in the case conclusively shows that for a number of years Lincoln County School System had failed to meet the minimum standards as prescribed by the State Board of Education and that, after numerous deficiencies, and after discussion of a number of plans reflected in the Minutes of the County Board of Education and the Quarterly County Court, the said Quarterly County Court met in special session on August 13, 1973 to consider an appropriation of school funds to help alleviate the deficiencies then existing; that at said special session no funds were actually appropriated, which resulted in a delay in the opening of Lincoln County schools; that, subsequently, the Lincoln County School Board, with the approval of the State authorities, recommended to the Quarterly County Court of Lincoln County a plan for the renovation, remodeling and erection of school buildings in Lincoln County which called for the elimination of three Rural High Schools and the building of a new Comprehensive High School near Fayetteville, along with the remodeling of other schools in the County so as to bring the County’s schools up to the minimum State standards.

It further appeared to the Court that by virtue of a plan concurred in by the State and local school authorities the Lincoln County Quarterly Court, by resolution at its August 28, 1974 special session, authorized the issuance of $4,000,000.00 in school bonds for the purpose above indicated, the State having made available $2,000,000.00 for vocational facilities as agreed upon; that following the adoption of the bond resolution above mentioned, sale of the bonds was advertised and bids were to be received on September 17,1974; however, plaintiffs, on August 28, 1974, instituted their suit in the Chancery Court of Davidson County, Tennessee against the various State and County officials which had the effect of halting or stopping the sale of said bonds; that the plaintiffs filed their suit in the Chancery Court of Lincoln County which is identical to that brought in Davidson County, it being contended in said suit that Section 49-604(B), T.C.A. is unconstitutional and void and prays for a judgment declaring said statute to be unconstitutional and void. It is further prayed therein that an injunction issue against the Quarterly County Court and County Judge restraining the issuance of the above mentioned school bonds and requiring a referendum on the bond issue question. It is further prayed that the Commissioner of Education of Tennessee be enjoined from withholding funds from Lincoln County pending the outcome of this suit.

Upon consideration of the matters above mentioned, the Court found and decreed that Section 49-604(B) is in no way unconstitutional and does not delegate to the Commissioner of Education any absolute power but confers upon said Commissioner duties circumscribed by guidelines laid down by the law and by rules and regulations adopted by the State Board of Education.

The Court further found and decreed that the Commissioner had in no way made improper demands with reference to the contracts made by him with the Quarterly County Court of Lincoln County and the School Board of said County.

The decree concludes as follows:

“Under these circumstances, the Court finds and decrees that plaintiffs’ suit cannot be maintained, and it is, therefore, ordered, adjudged and decreed by the Court that the plaintiffs suit be and the same is hereby dismissed in its entirety, to which action of the Court in dismissing plaintiffs’ complaint, the plaintiffs except and pray an appeal to the next term of the Court of Appeals sitting in Nashville, which is granted upon plaintiffs making proper bond within the time allowed by law, and otherwise perfecting their appeal.
All costs of this cause will be taxed against plaintiffs, for which execution may issue, if necessary.”

III. Assignments of Error

Counsel for plaintiffs has filed fourteen separate assignments of error which it will not be necessary to set forth seriatim.

Said assignments may be summarized as follows:

It is charged that the Chancellor erred in failing to recognize that the County or Local School Board has exclusive power to determine school policy while the Commissioner of Education of Tennessee is an administrative officer whose duty it is to serve the Local School Boards and not to dictate to them.

The plaintiffs earnestly insist that T.C.A. Section 49-201(5) imposes a duty on the County Court to call a referendum on the question of a bond issue for schools, particularly where, as in the case at bar, some four or five thousand citizens of the County petitioned the Court for such a referendum.

Assignments 4, 5, 6, 7, 8, 9 and 10 complain of the action of the Chancellor in either refusing to admit certain testimony or in disregarding certain testimony and evidence with respect to the building of the comprehensive High School and the abandoning of certain other existing High Schools in the County, and a failure to give credence and weight to the testimony of witnesses with regard to the action of the County Court in voting the bond issue and the influences that were brought to bear on the Court to induce such action.

The remaining assignments complain of the refusal of the Chancellor to allow interrogatories to be taken of a prominent national authority on education regarding the controversy between its finding regarding centralized comprehensive schools as opposed to local community schools and his failure to give due weight to the sentiments of a large number of taxpayers, parents of schoolchildren and the welfare of the children themselves regarding the central issue involved here or the proper authority to be accorded Local School Boards as opposed to dictation by the State Board, and in failing to give due weight to the testimony of expert witnesses concerning the serious controversy in the educational world as to the respective merits of central consolidated schools as opposed to community oriented schools.

IV. —Our Conclusions

We feel it is unnecessary to discuss at any length the questions fully discussed and decided by the Chancellor.

We deem it proper, however, to call attention to certain facts and decisions bearing on the questions at hand.

Attention is called to the following stipulation which was entered into by counsel for the parties and filed prior to the hearing below:

“Come the parties by and through their attorneys and agree and stipulate to the following facts:
1. That the Lincoln County Quarterly Court is composed of 32 Magistrates.
2. That at the time of the filing of plaintiffs’ suit, Lincoln County was in the process of advertising its $4,000,000.00 school bonds in the Lincoln County News, and in The Bond Buyer, a New York newspaper, with sealed bids to be received on September 17,1974. The filing of the plaintiffs’ suit had the effect among others of halting or enjoining the bond sale until such time as Lincoln County can furnish the prospective bond purchaser with a ‘no litigation certificate’, stating in effect that no litigation is pending or threatened with reference to the sale of Lincoln County’s $4,000,000.00 school bonds.
APPROVED:
/s/ Jack Kershaw
Attorney for Plaintiffs
/s/ Robert W. Simms
Attorney for Lincoln County Defendants
/s/ Richard Lodge
Assistant Attorney General,
Attorney for State Defendants”

Plaintiffs’ Motion to Reconsider, filed in the Chancery Court on June 17, 1975, states:

“Plaintiffs would respectfully call the Court’s attention to the fact that plaintiffs challenge the right of the County Court to use T.C.A. 49-701 as authority for issuance of bonds; therefore the mere fact that it did cite said statute does not obviate the necessity of considering a subsequent statute T.C.A. 49-201(5) heretofore overlooked by the Supreme Court of this State.”

Section 49-201 is entitled “Duties of Quarterly County Court.” Subsection (5) thereunder is as follows:

“(5) To submit to the voters of the county, at any regular session, or at any special session called for that purpose, the proposition to issue bonds for the purpose of purchasing grounds, erecting and furnishing school buildings, and, upon the affirmative vote of the majority cast in said election, to issue said bonds in accord therewith.”

Section 49-701, T.C.A. is the first section in Chapter 7 entitled “BONDS FOR SCHOOL PURPOSES”. Said section provides:

“49-701. Issuance by county courts authorized. — The counties through their respective quarterly county courts are authorized to issue and sell bonds for the purposes and in the manner provided in this chapter.”

The succeeding sections in said Chapter set forth certain regulations and proceedings regarding the issuance of bonds for actual school purposes which are not in question in this suit.

Contrary to the insistence of counsel for plaintiffs that T.C.A., Section 49-201(5) has been overlooked by the Courts of Tennessee and not heretofore acted on, we think State ex rel. v. Safley, Chairman, etc., et al. (1937), 172 Tenn. 385, 112 S.W.2d 831, deals with the question at hand. In that case a bill by the State of Tennessee, on relation of certain taxpayers, was filed against C. R. Safley, Chairman, and others, to enjoin the issuance of school bonds under a resolution of the County Court. From a decree dismissing the bill, the complainants appealed. In the Opinion by Mr. Justice Chambliss, it is pointed out that the County Court acted under the authority of Chapter 5 of the Code entitled “Bonds for Schoolhouses,” and under Title 7 of the Code, entitled “Education”.

In the course of the Opinion, the section of the Code being dealt with was quoted, as follows:

“Quarterly County Courts may issue and sell bonds for school buildings, etc. —The Counties through their respective Quarterly County Courts are authorized to issue and sell bonds for the purposes and in the manner hereinafter provided.”

This is the language of the present section under consideration, to-wit, Section 49-701.

The Court further quotes what is now Section 49-702, providing that bonds may be issued by the Quarterly County Court by resolution adopted by a majority of the members.

The Opinion continues by stating that, by an amendment to the original bill, the issuance of these bonds was challenged because not authorized by an election of the qualified voters of the County, as provided by another section of the Code. The Court goes on to say that the specific statutory authorization in Chapter 5, hereinabove quoted, prevails over the general requirements of the section calling for a majority vote of the qualified voters of the County and states that the specific authorization constitutes an exception because the special provisions of the Code prevail over the general provision invoked. He then quotes from Section 13 of the Code as it was adopted in 1932, as follows:

“Conflicts. — If provisions of different chapters or articles of the Code appear to contravene each other, the provisions of each chapter or article shall prevail as to all matters and questions growing out of the subject matter of that chapter or article.”

The Court, quoting with approval from Rodgers v. United States, 185 U.S. 83, 22 S.Ct. 582, 46 L.Ed. 816, and from Crane v. Reeder, 22 Mich. 322, said:

“ ‘Where there are two acts or provisions, one of which is special and particular, and certainly includes the matter in question, and the other general, which, if standing alone, would include the same matter and thus conflict with the special act or provision, the special must be taken as intended to constitute an exception to the general act or provision, especially when such general and special acts or provisions are contemporaneous, as the legislature is not to be presumed to have intended a conflict.’
“Finally, the views indicated are in harmony with our Tennessee cases, and find direct support in the following excerpt from the opinion of Chief Justice Neil in Board of Park Commissioners v. Nashville, 134 Tenn. 612, at page 629, 185 S.W. 694, 698.”

The result of the decision of the Court in Safley is as stated in Syllabus 4:

“4. Statutes: An act treating a subject in general terms and not expressly contradicting provisions of a special statute should not be considered as intended to affect the more specific provisions of a special statute, unless it is absolutely necessary so as to construe general act to give its words any meaning at all.”

We, thus, agree with the Chancellor that the bond issue as authorized by the Quarterly County Court is a valid issue without submission to the voters by referendum.

As to the constitutionality of the statutes involved, we concur in the Chancellor’s decree holding said statutes valid.

While this Court is sympathetic with the views held by plaintiffs in this case concerning the desirability of community oriented schools as generally opposed to large consolidated schools that require extensive busing of children for long distances, we are compelled to agree with the Chancellor that, in the case at bar, the relief prayed for by plaintiffs must be denied.

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

AFFIRMED.

TODD and DROWOTA, JJ., concur.