American Collectors Exchange, Inc. v. Kentucky State Democratic Central Executive Committee

• Decision Date: 14 November 1974
• Citation: 566 S.W.2d 759
• Parties: AMERICAN COLLECTORS EXCHANGE, INC., and Torami, Inc., Appellants, v. KENTUCKY STATE DEMOCRATIC CENTRAL EXECUTIVE COMMITTEE, an Unincorporated Association, and William L. Sullivan, Martha Layne Collins, John Y. Brown, Jr., Daniel D. Briscoe, and Blanche Mahoney, Individually and as Representatives of the Class of Persons Composing the Kentucky State Democratic Central Executive Committee, an Unincorporated Association, as of on or about
• Court: Kentucky Court of Appeals

Page 759

566 S.W.2d 759

AMERICAN COLLECTORS EXCHANGE, INC., and Torami, Inc., Appellants, v. KENTUCKY STATE DEMOCRATIC CENTRAL EXECUTIVE COMMITTEE, an

Unincorporated Association, and William L. Sullivan, Martha

Layne Collins, John Y. Brown, Jr., Daniel D. Briscoe, and

Blanche Mahoney, Individually and as Representatives of the

Class of Persons Composing the Kentucky State Democratic

Central Executive Committee, an Unincorporated Association,

as of on or about November 14, 1974, Appellees.

AMERICAN COLLECTORS EXCHANGE, INC., and Torami, Inc., Appellants, v. AUTER, SMALLEY AND STENGEL, INC., Appellees.

Court of Appeals of Kentucky.

Jan. 6, 1978.

Rehearing Denied Feb. 24, 1978.

Discretionary Review Denied June 6, 1978 and June 27, 1978.

Kenneth S. Handmaker, Carl W. Brown, Louisville, for appellants.

Thomas C. Carroll, Louisville, for Kentucky State Democratic Central Executive Committee.

Bill V. Seiller, Louisville, for Auter, Smalley & Stengel, Inc.

Before HOWARD, REYNOLDS and WILHOIT, JJ.

WILHOIT, Judge.

These two appeals, which have been consolidated, are from judgments of the Jefferson Circuit Court. The first is from a judgment dismissing two third- party complaints. The second is from a judgment entered upon a jury verdict. Both appeals arise out of a project of the Kentucky State Democratic Central Executive Committee to raise money through the sale of art prints of works by noted Kentucky artists. To this end, the Executive Committee entered into two contracts, one with American Collectors Exchange, Inc., which was to act as purchasing agent for the Committee, and the other with Torami, Inc., which was to act as distribution agent. Each of the contracts was signed on behalf of the Executive Committee, an unincorporated association composed of 52 members, by William L. Sullivan, its chairman, and Martha Layne Collins, its secretary. The contracts were signed on behalf of the respective corporations by Robert B. Wheeler, president of both. Torami is a wholly owned subsidiary of American Collectors Exchange.

According to his testimony, Mr. Wheeler, acting on behalf of Torami, orally contracted with Auter, Smalley and Stengel, Inc., an advertising agency, for advertising services and materials in furtherance of the project. These services and materials were supplied prior to February 8, 1975. When payment was not received, Auter, Smalley and Stengel on April 8, 1976, brought suit against American Collectors Exchange and Torami for $7,813.33.

American Collectors Exchange and Torami filed a third-party complaint seeking to join the Executive Committee in its own name as a party defendant for contribution. On motion of the Executive Committee this complaint was dismissed. Later, another third-party complaint was filed by American Collectors Exchange and Torami. This complaint, also for contribution, named as defendants William L. Sullivan, Martha Layne Collins, John Y. Brown, Jr., Daniel Briscoe, and Blanche Mahoney, individually and as representatives of the class of persons composing the Kentucky State Democratic Central Executive Committee. The named class members moved for dismissal of this complaint and their motion was granted. The trial court's dismissal of the two third-party complaints is the subject of the first appeal.

The original action then proceeded to trial before a jury which returned a verdict in favor of Auter, Smalley and Stengel against American Collectors Exchange and Torami for the full amount claimed. Judgment was entered in accordance with the verdict. This judgment is the subject of the second appeal.

I.

With respect to the first appeal, we believe the court properly dismissed the initial third-party complaint because under the law in this jurisdiction an unincorporated association cannot be sued solely in its own name. Business Realty, Inc. v. Noah's Dove Lodge # 20, Ky., 375 S.W.2d 389 (1964). Our conclusion as to the second third-party complaint, however, is otherwise. This third-party complaint not only properly asserted a claim under CR 14.01, but also appears to have met the initial prerequisites of CR 23.01 and 23.02 for the maintenance of a class action. We do not agree with the contention that venue was improper because the headquarters of the Executive Committee is in Frankfort and the only one of the named individual members of the Executive Committee who was summoned did not reside in Jefferson County. Under CR 14.01, a third ...