might have arisen on that appeal can now be raised on the exceptions to and appeal from the judgment confirming the sale of the other property. We do not think the chancellor erred, however, in overruling the exceptions to the report of sale, notwithstanding his error in refusing to sell the book of expirations with the other property sold. The purchaser at the sale did not claim to have been prejudiced by that error of the court, and, in all probability, the book of expirations at the time of the sale had become practically valueless. from the lapse of time, and the expiration, in large part, of the policies, the dates of which appear therein. The book of expirations should yet be sold by order of the court.

Appellant complains that the commissioner's report of settlement and the judgment rendered thereon should have allowed him, in addition to his share of the profits of the partnership business, compensation or salary as manager of the business during the existence of the partnership, which compensation, he insists, should be at least $100 per month. It is contended by appellant that he had, during the existence of the partnership, the active management of the business of the firm, and was faithful and efficient in the conduct thereof, whereas appellee during the whole of the partnership, except the last two years, was assessor of the city of Covington, at a salary of $2,400 a year, and, by reason thereof, had no time to devote to the business of the firm, and did not, in fact, do so. It, however, appears that, when taken into the firm by appellee as a partner, appellant was quite young and inexperienced, and out of employment. Upon the other hand, appellee at that time was a wellknown and active business man, with an established insurance business, and his position as assessor of Covington gave him a wide acquaintance with the people of that city having property to insure; and it appears from the evidence that he used his official position to good effect in obtaining business for the firm. Though but little of his time was spent in the office, and the clerical and other active work of the firm was done by appellant, there can be no question but that appellee, by reason of his older business head and experience as the senior member of the firm, his official position, and personal popularity, was at all times during the continuation of the partnership a potent factor in maintaining its financial standing and bringing to it business and patronage. The mere fact that appellant did the greater part of the clerical and other work of the firm, and had the active management of its business, would not have justified the court in allowing him a salary. It is a wellrecognized rule of law in respect to partnerships that partners are not entitled to charge each other, or the firm of which they are members, for their services in the firm business, unless there is a special agreement

to that effect, or such agreement can be readily implied from the course of business between the partners. The evidence in this case does not show such an agreement between the partners, nor does it, in our opinion, raise the implication that such an understanding existed between them. Therefore the chancellor did not err in refusing appellant the additional compensation asked. It is also insisted for appellant that the commissioner and court erred in allowing appellee one-half the profit of $1,100 made on the Stem property. An option was taken on this property by appellant in the name of the firm, and sold to Overman & Scroder Cordage Company at the profit named. We think the evidence shows that while this transaction was, in the main, conducted by appellant, it was done in the firm name and for the firm. And the suit which was brought against Stem to recover the profit realized on the transaction was in the name of the firm. If no recovery had resulted, appellee would have been equally liable with appellant for the attorney's fees and other costs incident to the action. It was not error, therefore, to allow appellee one-half of the profit on the Stem property.

There, are, however, at least three errors in the report of settlement and judgment: First. They fail to charge appellee with half the attorney's fee and costs expended by appellant in the suit against Stem. Second. They fail to charge the firm with certain expense moneys necessarily paid out by appellant from year to year during the partnership in the conduct of the firm's business. Appellant should have credit by such of these expenditures as the evidence may show were made by him for the firm. Third. Appellant should have been allowed one-half of the dividends collected by appellee on four shares of stock in the Covington Coal Company which had never been charged to appellee on the books of the firm. We think the evidence shows that this stock was the property of the firm, though transferred to and held by appellee alone to enable him to become a director in the coal company.

Because of the errors indicated, the judgment confirming the report of settlement is reversed, and the cause remanded for further proceedings consistent with the opinion.

monthly assessment, proportionate to their salaries, for its support. These assessments were deducted by the railroad from the employés' salaries, and paid over to the treasurer of the hospital association for its benefit. Held, that the hospital corporation was a separate and distinct organization from the railroad, and the latter was not liable for the conduct of the hospital directors, nor for the negligence of physicians or attendants of the hospital in treating a railroad employé.

[Ed. Note. For cases in point, see vol. 36, Cent. Dig. Charities, § 103.]

ty.

Hobson, C. J., and Nunn, J., dissenting.

Appeal from Circuit Court, Hopkins Coun

"Not to be officially reported."

Action by Ed Buchanan against the Illinois Central Railroad Company. From a judgment for plaintiff, defendant appeals. Revcrsed.

J. M. Dickinson, Trabue, Doolan & Cox, and Gordon, Gordon & Cox, for appellant. C. J. Waddill and Wm. Worthington, for appellee.

The

PAYNTER, J. While appellee was in the service of the Illinois Central Railroad Company his kneecap was broken, and he was sent to the Illinois Central Hospital for treatment. He claims that while under the care of the physicians and nurses of the hospital he was unskillfully and improperly treated, and thereby sustained damages, and this action was instituted to recover them, a trial of which resulted in a verdict for him. alleged right to recover of the Illinois Central Railroad is based upon the averment that it had entered upon a contract with him by which it undertook, in the event of his injury, "that he should be properly and skillfully treated by proper and skillful surgeons in attendance." The court, by its instructions, in substance, submitted to the jury the issue made by a denial of the above averment.

The appellee had been in the employ of the Illinois Central Railroad Company for more than four days, and therefore was entitled to be received by the Illinois Central Hospital Association at Paducah for treatment. The Illinois Central Railroad Hospital Association is a corporation organized under the general laws of this state. The articles of incorporation read as follows:

"That M. Gilleas, W. J. Harahan, A. Philbrick, D. G. Murrell, John L. McGuire, John W. Whedon, have associated themselves pursuant to an act of the General Assembly of the commonwealth of Kentucky of March 22, 1892, which act is incorporated into chapter 32, section 879, 880, and 881, Kentucky Statutes, to form a charitable corporation, from which no private pecuniary profit is to be derived, and have formed and now form such corporation and adopt the following articles of incorporation:

"Article 1. The name of the corporation is Illinois Central Railroad Hospital Associa

tion. The hospital of said association is located at Paducah, Kentucky, and the prin cipal office and place of business is at Paducah, Kentucky.

"Art. 2. The object for which the corporation is formed is to give proper care and treatment to the sick and wounded employees of the Illinois Central Railroad Company on the Louisville Division, and that portion of the Memphis Division extending from Paducah, Kentucky, to Memphis, Tennessee, and including Memphis, Tennessee.

"Art. 3. The corporation shall have the right to sue and be sued, contract and be contracted with, have and use a common seal and alter the same at pleasure, and receive and hold such property real and personal, whether obtained by purchase, gift, or devise as may be necessary to carry on or promote the objects of the corporation, and may sell or dispose of such property at pleasure, unless the property has been received as a gift or devise, for some special purpose and if so received it shall be used and applied only for such purpose. The corporation may adopt such rules for its government and operation not inconsistent with law as the directors may deem proper, but it shall not be operated, managed or used for private gain or engaged in any plan or scheme of banking or insurance. The corporation by the consent of two-thirds of the directors may amend any part of the articles of incorporation by filing and recording the amendment in the office of the Secretary of State and recording in the county clerk's office of McCracken county, Kentucky. The corporation for the support of its hospital shall have power to levy a monthly assessment upon the members of the corporation of such sums as shall be fixed by the bylaws of the corporation and enforce the payment of such assessment in the manner provided by the by-laws of the corporation.

"Art. 4. All officers and employees of the Illinois Central Railroad Company on the Louisville Division and that portion of the Memphis Division extending from Paducah, Kentucky, to Memphis, Tennessee, including Memphis, Tennessee, shall be members of the corporation except persons of known disability or suffering from chronic disease.

"Art. 5. The corporation shall be governed by a board of eleven directors constituted as follows: M. Gilleas, the assistant general superintendent of the Southern lines of the Illinois Central Railroad Company and his successors in office; D. G. Murrell, the assistant chief surgeon of the Illinois Central Railroad Company, located at Paducah, Kentucky, and his successors in office; W. J. Harahan, superintendent of the Louisville Division of the Illinois Central Railroad Company, and his successor in office; A. Philbrick, the superintendent of the Memphis Division of the Illinois Central Railroad Company, and his successor in office; H. R. Dill, the assistant superintendent of the Ev

ansville District of the Illinois Central Railroad Company, and his successor in office; L. A. Downs, the road master of the 10th Division of the Illinois Central Railroad Company, and his successor in office; D. Sheahan, the road master of the 13th Division of the Illinois Central Company, and his successor in office; John McGuire, John W. Whedon, and John Lane. The term of office of the first-named eight members of the board of directors shall be continuous. The term of office for the last named three of the board of directors shall be for one year, and until their successors shall be elected. The successors of the said three members shall be elected by the other eight members of the board on the second Friday in August, 1901, and annually thereafter, and shall be so selected as to represent as nearly as possible the employees of the transportation department, of the mechanical department and of the road department and such persons shall be selected from said departments as will best be able to attend all meetings of the board of directors. M. Gilleas shall be chairman of the board of directors and shall be succeeded in the chairmanship of the board of directors by his successor in office, the assistant general superintendent of the southern lines of the Illinois Central Railroad Company. The regular meetings of the board of directors shall be held quarterly on the second Friday in February, May, August and November of each year, and the meeting held in August shall be the annual meeting of the board of directors. All the corporate powers of the corporation shall be vested in the board of directors. The board of directors

shall elect all officers except chairman of the board, and shall fix the term of office of the officers of the hospital at one year with power to remove such officers for cause, which shall be stated in writing and acted upon by a majority of the members constituting the board. The by-laws shall provide for the government of the hospital, for proper committees of the board and for such officers as the board of directors may deem proper for conducting the business of the corporation. The principal officer of the corporation shall be the chairman of the board of directors.

"Art. 6. The corporation shall begin its existence when these articles have been filed in the office of the Secretary of State of Kentucky and recorded in the office of the county clerk of McCracken county, Kentucky, and shall continue for fifty years from that date."

These articles of incorporation were signed by the persons designated as directors therein, and were duly acknowledged and recorded, and the corporation was thus regularly formed. It is contended that the directors are officers and agents of the Illinois Central Railroad Company, and therefore the Illinois Central Railroad Company is liable for the misconduct or unskillful act of

the physicians and nurses in charge of the institute. It will be observed, by article 4, that all officers and employés of the Illinois Central Railroad Company are members of the corporation, with certain exceptions. By article 3, the hospital corporation, for its support, shall have power to levy upon its members such sums as shall be fixed by the by-laws of the corporation, and enforce their payment as provided by the by-laws. Under the by-laws of the corporation, those entering the service of the Illinois Central Railroad Company who work more than four days are entitled to the benefits of the hospital. Under the by-laws, the members of the association who receive $40 per month and under are required to pay 40 cents monthly, and the amounts to be paid by other employés are governed by the salary or compensation received by them. Members of the association are entitled to free medical and surgical attendance, medicine, board, and nursing at the hospital while disabled, whether from sickness or injury, unless the disability arises from certain diseases. Sums which the members of the association are required to pay are collected by the Illinois Central Railroad Company to pay the expenses of the hospital, and it goes into the hands of the treasurer of the hospital association, who is also the treasurer of the Illinois Central Railroad Company. There is no evidence that the Illinois Central Railroad Company retains or gets the benefit of a cent of the money or enjoys any profit by the operation of the hospital. Under the articles of incorporation, the appellant does not even retain control of the funds which it gathers for the association, for they go to the treasurer of the hospital association. The parties who are designated as directors are not made so as the officers of the Illinois Central Railroad Company, but they are selected by the hospital association by reason of the fact that they hold such positions with the Illinois Central Railroad Company. The evident purpose is to make it easy to keep a full board of directors of the hospital, and that that board shall be composed of persons who are entitled to the benefits of it, and who are interested in its success. The mere fact that the board of directors are selected by the hospital association by reason of the fact of their connection with the Illinois Central Railroad Company does not make them the agents or officers of the Illinois Central Railroad Company in the performance of a duty for another and distinct corporation. The duties which they are required to perform are not such as are required in the execution of the purposes and objects of the organization of the appellant.

w

There is no evidence showing that the Illinois Central Railroad Company made any contract with the appellee that he should be "properly and skillfully treated by proper and skillful surgeons and attendants." The

fact that the hospital association was organized for that purpose does not tend to prove that the appellant made such a contract with the appellee. There is an implied contract between the employé who becomes a member of the association and the Illinois Central Railroad Company that the latter will pay over the money which it retains out of his earnings to the treasurer of the hospital association for its benefit. The Illinois Central Railroad Company is simply the agent that gathers the funds for the benefit of the hospital association-consequently for the benefit of its members. So the proposition is presented that, because the Illinois Central Railroad Company simply acts as the agent in the gathering of the funds from its employés for the hospital purposes, it thereby made a contract to be responsible for the conduct of those in control of the hospital-a separate and distinct corporation. If the Illinois Central Railroad Company was the real party in interest, and was simply using the hospital association for its financial profit, then the court might consider whether or not it was a case where it should look at the substance, and not the shadow, of things, in determining its liability. But this question has not arisen because of the facts we have detailed. Doubtless the Illinois Central Railroad Company is indirectly benefited by its employés having proper and humane treatment at the hospital prepared for them, but that incidental benefit cannot raise the question suggested, or make it liable for the act of servant or agent of an independent corporation.

Our conclusion is that the hospital corporation is a separate and distinct corporation from the Illinois Central Railroad, and that the latter has no financial interest in the result of its management, and in no way is it liable for the conduct of its directors, or the physicians or the attendants at the hospital. The appellee is a member of the hospital association, and those in charge of it in part serve him and his interest; and he contributes to help pay the expenses of those performing that service, and for the care and treatment of his associate employés. A peremptory instruction should have been given to the jury to find for the appellant.

We have not seen proper to discuss the question as to the liability of the Illinois Central Railroad Company for plaintiff's injury, had it owned or controlled the hospital, nor the liability of the hospital association for the alleged unskillful acts of the surgeons and attendants in charge of it, because, from the conclusions we have reached, these questions do not arise, and had best be discussed when a case involving them is brought to the consideration of the court.

The judgment is reversed for proceedings consistent with this opinion.

NUNN, J. (dissenting). The appellee recovered a judgment against appellant on account

of injuries and damages sustained by the malpractice of the house surgeon of the Illinois Central Railroad Hospital Association. The evidence shows that this surgeon was either incompetent, or that he treated appellee so negligently and carelessly that he was injured, rather than benefited, and was amply sufficient to authorize the court to submit the question to the jury. This court reverses this judgment upon the ground that there was a failure of proof showing any contract on its part to furnish appellee competent and skillful surgeons to treat his injuries while in its employ; that the hospital association was and is a charitable, independent corporation; that appellant was and is in no wise responsible for its conduct; that the services performed by the appellant for the hospital association were performed as its agent. The effect of the opinion by a majority of the court is to overrule the case of this appellant against Gheen, 66 S. W. 639, 23 Ky. Law Rep. 1952.

I have the record in the Gheen Case before me, and have examined it with care. The appellant made the same defense as to nonliability for the acts of the association in that case as in this. The same proof upon this question was introduced in that case as in this. The by-laws for the operation and control of the association were introduced in that case and in this, and they are identical, except in verbiage, and also at that time there were 9 directors, while now there are 11. In that case, as in this, the court told the jury, in substance, that if they believed from the evidence that the hospital association was operated and controlled by its members, and was not operated and controlled by the appellant, they should find for it. The only difference between the facts in the two cases with reference to the point under discussion is that the association was then a copartnership, while now it is a corporation. In the Gheen Case, supra, this court said: "The testimony as to the formation, conduct, and management of the hospital presents no material disagreements as to the facts. These appear to be that each employé on the Louisville and Memphis Division, who is employed as much as four days in a month, contributes to the maintenance and support of the hospital. The sum payable is fixed by a scale according to wages earned per month, and the amount payable is withheld by the paymaster of the appellant out of the wages due the employé, and turned into the hospital fund, which is held by the treasurer of the appellant. The hospital association is not incorporated, nor, on the other hand, is it purely voluntary. If the fact that an employé has no option about paying out of his earnings the fixed assessment for the support of the hospital could be termed a voluntary payment, then the hospital association might be termed a voluntary association. It has a board of directors, but these are such, save two, by reason

of the official position with appellant's road. The two exceptions are a conductor and an engineer, who are selected by the other members. The surgeon in charge is practically appointed by the chief surgeon of appellant. The men who contribute the monthly assessment to pay the hospital expenses have in fact no voice in the management or control of the hospital, save and except that of giving certificates of admission thereto to subordinate employés when sick or injured. Employés of the class of appellee have no rights or powers in regard to the hospital, save that of paying the monthly assessment, which in fact they never see, and the right of treatment in case of injury or sickness. As to the ownership of the hospital grounds and buildings and equipment there is no proof. We are of opinion that these facts, proven without serious, if any, contradiction, would have authorized the court to instruct the jury peremptorily that, if appellee had been engaged more than four days, he was entitled to admission into the hospital, and, if he was refused permission to enter, or certificate entitling him to transportation and entrance to the hospital, and was injured by such refusal, he was entitled to recover. It is clear, that if appellant corporation ceased to exist or should attempt to withdraw from the hospital, the hospital would cease to be of any service. The appellant is the very life of the hospital association. Its funds, management, control, and service are all furnished by appellant. In fact, the hospital association is the Illinois Central Railroad."

The facts stated in this opinion agree precisely with the facts as shown by the record in the case at bar, except that the hospital was then an association or copartnership, and, since then, and in the year 1900, it attempted to become incorporated as a charitable organization. If in the Gheen Case the facts proven showed conclusively that the appellant operated and controlled the hospital, then, under the same facts, why or how is it to be said that it does not operate and control the same association? Can it be that it is because it now has the name of "corporation"? Has the word "corporation" about it some magic which prevents its control by anybody or anything? In my opinion, if the appellant controlled and operated the hospital as an association or a copartnership, it controls and operates it as a corporation. By a unanimous opinion in the Gheen Case this court decided that appellant did control and operate this hospital, and that the hospital was a part of appellant. The incorporation of the hospital did not give it any greater rights or higher powers than it had before the incorporation, the only difference being that it would be more convenient to sue and be sued in its corporate name than as a copartnership. Under the articles of incorporation, copied in the opinion, it is provided that the term of office of the first-named eight members of the board of directors

By

shall be continuous. The term of office of the last-named three of the board of directors shall be for one year, and also the successors of the last three shall be elected by the other eight members of the board. section 3 of the by-laws it is provided: "The association shall be governed by a board of eleven directors constituted as follows, the assistant general superintendent, Southern lines, who shall be chairman of the board, the assistant chief surgeon, Paducah, Ky., the superintendent, Louisville Division, the superintendent, Tennessee Division, the assistant superintendent, Evansville District, the road master, Louisville Division, the road master, Tennessee Division, the master mechanic, Paducah shops, an employee of the transportation department, an employee of the machinery department and an employee of the road department." By section 8 of the by-laws it is provided that the chief surgeon of the Illinois Central Railroad Company will appoint the surgeon in charge of the hospital, and is also required to appoint and fix the salaries of the local physicians within the territory covered by the association. By section 9 it is provided: "The local treasurer of the Illinois Central Railroad Co. at Chicago shall be the treasurer of this association, and shall receive all moneys belonging to the hospital, and pay all bills against it, upon vouchers certified to by the surgeon in charge and approved by the chief surgeon of the Illinois Central Railroad Co." By section 10 it is provided: "The auditor of disbursements of the Illinois Central Railroad Co. shall act as the auditor of this association." It appears from the proof that these three officials last named have their offices in Chicago, and are the chief officers of their respective departments of the appellant, and it is not contended that they are or ever have been members of the hospital association. It is, indeed, singular, if it is a fact that this hospital association is an independent association, and not governed or controlled to any extent by appellant, that it would organize by selecting the chief officials of appellant, who are not members of the association, and give them full and complete power to control and govern the association, and take from itself all power and right to manage the institution. As will be seen, the association is controlled by the officials of the appellant, and the employés have no voice in its control. The board of directors provided in by-law No. 2 that all officers and employés in the above territory shall be members of the association, except those afflicted with chronic or other named diseases. By section 15 it is provided: "Any member of the association in any manner leaving the service of the company, ceases at once to have any participation in the funds." Thus it appears that a prerequisite to membership in this association is that the party must be an employé of appellant, and, when he ceases to be an employee of appellant, it matters