Harlan Public Service Co. v. Eastern Const. Co.

• Decision Date: 01 May 1934
• Citation: 71 S.W.2d 24,254 Ky. 135
• Parties: HARLAN PUBLIC SERVICE CO. v. EASTERN CONST. CO.
• Court: Kentucky Court of Appeals

71 S.W.2d 24

254 Ky. 135

HARLAN PUBLIC SERVICE CO. v. EASTERN CONST. CO.

Court of Appeals of Kentucky

May 1, 1934

Appeal from Circuit Court, Harlan County.

Action by the Eastern Construction Company against the Harlan Public Service Company and another. Judgment for plaintiff, and named defendant appeals.

Reversed and new trial awarded. had made different statement to that disclosed by his testimony, he must be inquired of concerning statement with circumstances of time, place, and persons present, as correctly as examining party can present them. Civ.Code Prac. § 598.

S. S Willis, of Ashland, for appellant.

J. B Snyder, of Harlan, for appellee.

RICHARDSON Justice.

The Eastern Construction Company, a corporation, was the owner of a rock crusher.

The decisive question in this case is, whether it was loaned to the Harlan Public Service Company, or the Union Water Works Company, or both of them.

In its petition, the Eastern Construction Company alleged it loaned to the Harlan Public Service Company the crusher for the construction of a reservoir, near the city of Harlan, Ky. for reasonable use; its fair market value at the time of the loan was $700 and it was totally destroyed while being used in the construction of the reservoir. The damage by its use during the period of construction was fixed at $700. An amended petition was filed in which its value was fixed at $900 and the damage at the same amount.

The Harlan Public Service Company, by the first paragraph of its answer, traversed the allegations of the petition; in the second, the terms upon which the crusher was loaned are set out, with the further allegation it was represented to be in a reasonably fit condition for the work necessary to construct the reservoir, and at the time it was received, it was out of repair, and it had expended for repair parts and labor to put it in workable condition $100, and thereafter $200 for like purpose. Later, leave was sought and obtained to withdraw the original, and file an amended and substituted answer. In the amended and substituted answer, it denied it borrowed the crusher and alleged by mistake of counsel it admitted in the original answer it had borrowed the crusher, when in fact it was loaned by the Eastern Construction to, and borrowed by, the Union Water Works Company, with which to construct the reservoir used in connection with the waterworks system of the Harlan Public Service Company, which it used in supplying water to the town of Harlan; that the Union Water Works Company, under a contract with the Harlan Public Service Company, agreed to, and did, construct the reservoir with its own necessary labor, materials, machinery, and equipment; in the construction of the reservoir, the Union Water Works Company was an independent contractor, employed, controlled, and discharged its own employees, and furnished and had control of the material and equipment used by it, "free from any let or hindrance" of the Harlan Public Service Company.

The Eastern Construction Company filed a reply, traversing the amended and substituted answer. Thereafter, it filed an amended petition, making the Union Water Works Company, a corporation, a defendant, in which it charged it loaned the crusher to the Harlan Public Service Company and the Union Water Works Company. It iterated the allegations of the original petition respecting the loan of the crusher, so as to constitute a cause of action against both the Harlan Public Service Company and the Union Water Works Company. The Harlan Public Service Company entered a motion to require the Eastern Construction Company to elect as to which of the defendants it would prosecute its action. The motion was overruled; a proper exception was saved to the ruling of the court. The Harlan Public Service Company traversed the amended petition. A judgment, without the intervention of a jury, was rendered against the Union Water Works Company. On the issues formed, a trial was had before a jury, a verdict of $500 was returned against the Harlan Public Service Company and a judgment accordingly entered, from which this appeal is prosecuted. A disposition of the issues requires a review and appraisal of the evidence in the light of those principles applicable and controlling in such cases.

For the Eastern Construction Company, Dr. E. M. Howard testified to the substance of the contract made by him with C. H. Martin. He claims in his conversation with Martin, he offered to loan the crusher to Martin, and at the time informed him as far as he was concerned he could have it, but he "rather" Martin would see Mr. Bowling and if it was agreeable with Bowling it was all right with him. The Eastern Construction Company was a corporation and Dr. Howard and Mr. Bowling were respectively the president and the vice president. The corporation employed a superintendent to look after the road construction in which it was concerned. Dr. Howard, in his testimony, did not claim he knew or had information for whom Martin was obtaining the rock crusher, or that Martin was an agent, employee, or an officer of the Harlan Public Service Company. Dr. Howard was a patron of the old Harlan Water Company which sold out to the Harlan Public Service Company, and, thereafter, the latter issued statements and collected bills from its customers for their use of water. It was his information the Harlan Public Service Company operated the water plant that furnished water to the residents of the city until the same was sold to the city. After the reservoir was completed, the Harlan Public Service Company used it as a part of its water system. Dr. Howard testified he had no idea who paid the freight for the transportation of the rock crusher, or shipped it, to the point where it was used to construct the reservoir; he only loaned it to Martin who said he wanted it for the "water company." Mr. Bowling did not testify. J. H. Brown, local manager of the Harlan Public Service Company, who was a witness of the Eastern Construction Company, disclaimed any connection with the Union Water Works Company, and declared he had no knowledge of the connection of the two corporations. Through his testimony, letterheads were presented containing the names: "Harlan Public Service Company, Incorporated, Subsidiary of the Union Water Works Company, Incorporated, 706-8 Guaranty Bank Building, Lexington, Kentucky, Barbourville Water, Light & Ice Company, Citizens Electric Service Company, Harlan Public Service Company, London Utility Company, Pineville Water Supply Company, Richmond Water & Light Company, Paris Water Works Company, Corbin Ice & Beverage Company, Morgantown Public Service Company, Glasgow Public Service Company, Horse Cave Water Works Company, under management of U.S. Engineering Corporation, New York, J. C. McClendon, District Manager, Telephone Ashland 6120."

Brown was asked if he had a conversation with J. B. Snyder and if he did not state to him, the Harlan Public Service Company borrowed and used the crusher in the construction of the reservoir. His answer was "No"; he only stated the crusher was in "bad shape when it come over." Also Brown testified the Union Water Works Company bought and through Martin, paid for certain rights of way; the options were taken in the name of the Union Water Works Company; thereafter, when certain deeds conveying the same were executed, they were taken in the name of the Harlan Public Service Company. He testified Martin was the local manager of the Union Water Works Company and exercised control and supervision of its affairs and business; that Martin had no connection whatsoever with the Harlan Public Service Company. Martin purchased and paid for all material, hired all labor, and exercised exclusive control of the construction of the reservoir in the name, and as manager, of the Union Water Works Company. After the reservoir, the pump station and a pipe line were constructed by the Union Water Works Company, the same were turned over to the Harlan Public Service Company, together with certain tools and machinery, and after the same were turned over, he (Brown) saw Bowling at his store at Loyal and Bowling directed him where to leave and place the crusher, and he did so. The Harlan Public Service Company paid no part of the expenses of the work, furnished no labor, and exercised no control over the labor, the tools, or the machinery used in the construction of the reservoir, while it was in process of construction. In explanation of a "blue print," he stated: "It's to show the different groups of water works under the management of different men in the 'Central Kentucky Group."' A letter of the Union Water Works Company, signed thus: "The Union Water Works Company by A. J. Hinkenberg, Assistant Treasurer," and addressed to the Citizens' National Bank, inclosing a check for $427.28, was introduced. Mr. Rice, the real estate agent, with office in Harlan, testified he corresponded with the water company at Harlan relative to its plant. He addressed his letter: "Union Water Works Company, Lexington, Kentucky." He obtained the name and address of Mr. Brown, local manager of the Harlan Public Service Company. J. B. Snyder, an attorney of Dr. Howard and the attorney of record of the Eastern Construction Company, was permitted to narrate a conversation he claimed he had had with Brown, the local manager of the Harlan Public Service Company, in which Brown stated to him: "We got the rock crusher and it was in bad shape when we got it and we spent a lot of money on it"; "it broke down on the job." The witness, over the objections of the Harlan Public Service Company, was permitted to detail his statements to Brown, as well as Brown's statements to him. Continuing, he claimed Brown stated: "They did not...