author:
MONTGOMERY, Judge. , MILLIKEN, Judge (concurring).
      PALMO RE, Judge (dissenting).

text:
    R. Keith CULLINAN, Appellant, v. JEFFERSON COUNTY et al., Appellees.
    Court of Appeals of Kentucky.
    March 17, 1967.
    Rehearing Denied Oct. 6, 1967.
    Robert P. Hastings, Louisville, for appellant.
    E. T?. Sawyer, County Atty., Charles Speed Gray, Asst. County Atty., Louisville, for Jefferson County and Jefferson County Playground and Recreation Board.
    Lucian L. Johnson, Louisville, for Jefferson County School Board.
   MONTGOMERY, Judge. ,

The question is whether sovereign immunity extends to Jefferson County, Jefferson County Board of Education, and Jefferson County Playground and Recreation Board so as to bar an action by R. Keith Cullinan for damages arising from his stepping into a hole on the premises of the Middletown Elementary School. Summary judgment was granted on the basis that sovereign immunity barred recovery.

The appellant was engaged in playing tennis on the school premises. While attempting to stop a ball that had gone some twenty feet off the tennis court, he stepped into a hole and fractured his ankle. A supervisor of the Jefferson County Playground and Recreation Board was in attendance while appellant was playing tennis at the school ground of the Jefferson County Board of Education.

A board of education in Kentucky is performing a function of the state in operating the public schools as state institutions. City of Louisville v. Board of Education, 154 Ky. 316, 157 S.W. 379. “Public education has always been regarded as a matter of state concern * * Commonwealth ex rel. Baxter v. Burnett, 237 Ky. 473, 35 S.W.2d 857.

School taxes are classified as state and not local taxes. Commonwealth by Board v. Louisville Nat. Bank, 220 Ky. 89, 294 S.W. 815. Members of county boards of education are state and not municipal officers. Middleton v. Middleton, 239 Ky. 759, 40 S.W.2d 311. Local school boards fulfill • a governmental function of state government by providing public education within a particular geographical area. Board of Education v. Society of Alumni of L.M.H.S., Ky., 239 S.W.2d 931.

This court has held that a school board is a political subdivision and arm of the state government. City of Louisville v. Board of Education, 302 Ky. 647, 195 S.W.2d 291; Board of Education v. City of Corbin, 301 Ky. 686, 192 S.W.2d 951. The sovereign immunity of the state as to the Department of Highways was upheld after thorough consideration in Foley Construction Co. v. Ward, Ky., 375 S.W.2d 392. As an integral part of the state the Jefferson County Board of Education likewise is entitled to protection under the state’s sovereign immunity. Thacker v. Pike County Board of Education, 301 Ky. 781, 193 S.W.2d 409.

Jefferson County is a political subdivision of the Commonwealth as well, and as such is an arm of the state government. It, too, is clothed with the same sovereign immunity. Monroe County v. Rouse, Ky., 274 S.W.2d 477; Ginter v. Montgomery County, Ky., 327 S.W.2d 98; 20 C.J.S. Counties, § 1, page 753. The Recreation Board is a part of such subdivision.

Appellant relies on Haney v. City of Lexington, Ky., 386 S.W.2d 738, 10 A.L.R.3d 1362, wherein it was held that sovereign immunity did not render the City of Lexington immune from its torts. The decision in Haney was expressly limited to a municipal corporation and the sovereign immunity of the state was again recognized.

In the Haney case it is pointed out that the Florida Supreme Court “was the first to pierce the armor of municipal immunity,” citing Hargrove v. Town of Cocoa Beach, Fla., 96 So.2d 130, 60 A.L.R.2d 1193. In a later case, Buck v. McLean, Fla.App., 115 So.2d 764, the Hargrove case was distinguished, and it was held that “county boards of public instruction are agencies of the State and as such are clothed with the same degree of immunity from suit as is the State.” In a still later case, Kaulakis v. Boyd, Fla., 138 So.2d 505, it was held that counties “partake of the sovereign immunity from liability.” Thus, sovereign immunity has been held to extend to counties and county boards of education in Florida despite the holding that immunity did not extend to a municipality. Such is the situation here and no justifiable reason for holding otherwise has been advanced.

It was pointed out in Foley Construction Co. v. Ward, Ky., 375 S.W.2d 392, and in the dissent in Haney v. City of Lexington, Ky., 386 S.W.2d 738, at page 743, 10 A.L.R.3d 1362, that the power to grant authority to sue the Commonwealth or any of its subdivisions is within the legislative power vested in the General Assembly. Kentucky Constitution, Sections 27, 29, and 231. Section 231 provides: “The General Assembly may, by law, direct in what manner and in what courts suits may be brought against the Commonwealth.” This same language has been embodied in the Constitution since the first one. Kentucky Constitution (1792), Article VIII, Section 4; Kentucky Constitution (1799), Article VI, Section 6; Kentucky Constitution (1850), Article VIII, Section 6.

From time to time the General Assembly has provided remedies for certain torts committed by agents of the Commonwealth and its subdivisions. The remedy has been in the form of a legislative enactment which recognized the protection of sovereign immunity as it applied to the particular subdivision, either a county or a board of education, but authorized the subdivision to carry insurance to cover certain types of hazards. In each instance suit is authorized against the subdivision only for the purpose of obtaining a judgment which when final shall measure the liability of the insurance carrier to the insured party for whose benefit the insurance policy was issued. It is expressly provided that such judgment shall not be enforceable against the political subdivision or the members composing its governing board.

By KRS 67.180, 67.185, and 67.186 the General Assembly has authorized relief against the negligence of county employees in the operation of motor vehicles and hospitals and protection against compensation claims. Similar relief has been authorized by KRS 160.310 against the negligence of drivers or operators of school buses, other motor vehicles, and motor equipment owned or operated by a board of education. In each of those statutes the sovereign immunity of the county or board of education is expressly recognized and preserved.

The General Assembly at its regular 1966 session enacted House Bill 442, now Chapter 180, Acts 1966, pages 792-795. This Act was passed apparently as a result of the decision in Foley Construction Co. v. Ward, Ky., 375 S.W.2d 392. The Act authorizes the bringing of actions for breach of contract against the Commonwealth. It expressly provides: “All defenses in law or equity, except the defense of governmental immunity, shall be preserved to the Commonwealth.”

This awareness by the General Assembly of its constitutional authority, with the corresponding responsibility, is pointed out in order to demonstrate that this court should not invade the constitutional authority of the General Assembly by holding that the doctrine of sovereign immunity does not bar a tort action against Jefferson County or the Jefferson County Board of Education. The General Assembly has shown that it will exercise the authority entrusted to it in this respect when it feels that it is needed.

It is a fundamental concept of our form of government that the members of the legislative branch of government are elected from time to time to reflect the feeling of the people and to enact laws to meet their needs. When the people of this Commonwealth want sovereign immunity waived as to counties or county boards of education, their elected legislative representatives will be charged with this responsibility.

The Supreme Court of North Dakota in Fetzer v. Minot Park District, N.D., 138 N.W.2d 601, decided recently, reached the same conclusion in a similar case. The North Dakota Constitution, Section 22, provides that “suits may be brought against the state in such manner, in such courts, and in such cases, as the legislative assembly may, by law, direct.” The language is strikingly similar to Kentucky Constitution Section 231. In denying the action the court recognized the constitutional authority reposing in the Legislature and refused to assume any legislative function.

The Missouri Supreme Court recently upheld the doctrine of sovereign immunity in an action by a student against a public school district for injuries received while wrestling as a part of a physical education class. Smith v. Consolidated School District No. 2, Mo., 408 S.W.2d SO. It was pointed out that the rejection of the theory of governmental immunity in California had created such chaos that immediate remedial legislative action was required. Problems of a Sovereign Without Immunity, 36 So.Cal.L.Rev. 168. Reference was also made to Tesone v. School District No. RE-2, in the County of Boulder, etc., 152 Colo. 596, 384 P.2d 82, wherein it was said that the removal of sovereign immunity and the creation of liability against a governmental agency for the negligent acts of its servants “must be a creation of the legislative branch of the government.” See also Supler v. North Franklin Township, Washington County School District, 407 Pa. 657, 182 A.2d 535, and Campbell v. Pack, 15 Utah 2d 161, 389 P.2d 465.

In Gnau v. Louisville & Jefferson County Metropolitan Sewer District, Ky., 346 S.W.2d 754, after pointing out that a limited waiver of immunity exists by reason of KRS 44.070 et seq., dealing with the Board of Claims, the court said:

“Until the Legislature sees fit to waive immunity for public agencies other than those directly administered by the central State government, then such immunity will continue for all such public agencies performing a governmental function of the sovereign.”

It, therefore, is concluded that the relief sought here will have to come from the General Assembly.

Judgment affirmed.

WILLIAMS, C. J., and MILLIKEN, OSBORNE, and STEINFELD, JJ., concur.

HILL and PALMORE, JJ., dissent.

MILLIKEN, Judge (concurring).

I concur in the majority opinion because I think it fairly reflects the law as it is, but I rejoice in the minority opinion for calling attention to the harshness of the effects on unfortunate persons so often wrought by the doctrine of sovereign immunity.

The taking of private property for public use involves a deliberate, intentional act of the various units of government which are authorized to exercise the power of eminent domain and the law justly compensates the individual for the taking; but personal injuries to our citizens which are inflicted by governmental units or agencies are perhaps exclusively the result of negligence on the part of a governmental employee or officer.

As a result of their respective natures, the taking of property can be considered with its budgetary effect on the public treasury in mind, but a large judgment against a local school board, for example, for the negligence of an employee might very well result in closing the schools in that school district if the judgment were collectible by execution.

Because of the budgetary dangers and the many unforeseeable side effects inherent in judicial withdrawal of the defense of sovereign immunity from the sundry governmental units of the state, (as distinguished from the State government itself) which have so long operated within its protection, I adhere to the established law as expressed in the majority opinion, but I do believe that some comprehensive legislation is possible to soften the harsh results to the victims of the wrongful acts of these protected governmental units by authorizing the purchase of liability insurance by them and permitting limited recovery, within the terms of the policies for injuries inflicted by their wrongful acts.

PALMO RE, Judge (dissenting).

In Foley Construction Company v. Ward, Ky., 375 S.W.2d 392 (1964), we held that the Commonwealth of Kentucky and its administrative agency, the Department of Highways, which is a part of the executive branch of the state government, are protected by the doctrine of sovereign immunity. The source of that immunity is § 231 of the Constitution, which provides as follows:

“§ 231. Suits against the Commonwealth. The General Assembly may, by law, direct in what manner and in what courts suits may be brought against the Commonwealth.” (Emphasis added.)

To hold otherwise would necessarily have rendered § 231 meaningless. But the extension of § 231 to suits against other units of government, in which no recovery would or could constitute a claim upon the state treasury, is a conclusion that is not and never was demanded by its language.

The viewpoint of the majority of the court has been stated ably and well. Nonetheless, it is my belief that sovereign immunity should be limited strictly to what the Constitution demands, for the simple reason that in a civilized society it is morally indefensible. The very idea that an innocent citizen run down on the street by a reckless motorist can recover of the driver’s employer if the employer is another private citizen, or a private business organization, but has no such recourse if the employer happens to be one of the myriad governmental agencies which today engage in so many activities formerly considered to lie within the exclusive domain of private enterprise, is offensive on its face. It is no answer to say that the government must see to its fiscal integrity. So must every private citizen be concerned for his own financial resources. It is no more a hardship for a governmental unit to buy liability insurance than it is for a private individual.

Nor is it an answer to say that when the public is ready to right the wrong it will do so through its representatives in the General Assembly. The average man in the street never heard of sovereign immunity and would scarcely believe it if he did. Indeed it is unbelievable. And it is in the name and for the sake of the average citizen that I record this protest against it.

“The shocking effect of the immunity doctrine is well illustrated by the fact that, in view of some courts, no immunity attaches where property rights are violated by governmental action, but does attach where it is merely a matter of the life or limb of a human being.
“Where property rights are infringed, the courts are willing to rely upon the overriding constitutional principle prohibiting the taking of private property for public use, and to hold a governmental unit or agency liable for such an infringement. On the other hand, a constitutional guaranty of the right of an action of wrongful death will as readily be disregarded and held insufficient to defeat governmental immunity.” Annotation, “Immunity from liability for damages in tort of state or governmental unit or agency in operating hospital,” 25 A.L.R.2d 203, 210.

Cited as authority for this preposterous anomaly are the decisions of none other than our own court in Twyman v. Board of Council of Frankfort, 117 Ky. 518, 78 S.W. 446, 64 L.R.A. 572, 4 Ann.Cas. 622 (1904), and Ketterer v. State Board of Control, 131 Ky. 287, 115 S.W. 200, 20 L.R.A., N.S., 274 (1909). If property is damaged, either wilfully or through negligence, the court “implies” a promise to pay. See Curlin v. Ashby, Ky., 264 S.W.2d 671 (1954).

The word “shocking” is well said. It is inexcusable. I rest my case on the proposition stated long ago by one of the greatest human beings of all time: “It is as much the duty of Government to render prompt justice against itself in favor of citizens as it is to administer the same between private individuals.” First Annual Message by Abraham Lincoln, December 3, 1861, in “The State of the Union Messages of the President, 1790-1966,” Vol. II, p. 1060 (ed. by F. T. Israel, 1966).

HILL, J., joins in this dissenting opinion.


source: Caselaw Access Project

author:
MONTGOMERY, Judge.
      HILL and PALMORE, JJ.,

license: Public Domain

text:
    Heber S. MOORES, Appellant, v. FAYETTE COUNTY, Kentucky et al., Appellees.
    Court of Appeals of Kentucky.
    March 17, 1967.
    Rehearing Denied Oct. 6, 1967.
    William C. Jacobs, Lexington, for appellant.
    Armand Angelucci, William H. McCann, Brown, Sledd & McCann, Lexington, for appellees.
   MONTGOMERY, Judge.

Heber S. Moores, appellant, sued Fayette County, Kentucky; Fayette County Fiscal Court and its members, officially and individually; Bart N. Peak as County Judge; Fayette County Government, doing business as Fayette County Court House; and Cincinnati Insurance Company of Cincinnati, Ohio, to recover damages for injuries suffered by her in a fall on “certain steps and/or sidewalk” on the premises of the Fayette County Court House. It was alleged that the fall was the proximate result of the negligence of the defendants in failing to remove an accumulation of “snow, sleet and ice” which had thereon collected. The action was dismissed as to the county, the fiscal court, and the fiscal court members as being barred by governmental immunity. The other named defendants were held to be improper parties to the action.

Appellant contends that the doctrine of sovereign immunity should not bar a negligence action against the county. The same contention was adversely decided in Cullinan v. Jefferson County, Ky., 418 S.W.2d 407.

The dismissal of the action as to the insurance company was proper. A claimant may not join the insured and the insurer in an action based on the insured’s negligence. New York Indemnity Company v. Ewen, 221 Ky. 114, 298 S.W. 182; Ocean Accident & Guarantee Corporation v. Milford Bank, 236 Ky. 457, 33 S.W.2d 312; Chambers v. Ideal Pure Milk Company, Ky., 245 S.W.2d 589; Happy v. Erwin, Ky., 330 S.W.2d 412. It was pointed out in the latter case that the insurer is not liable until after a judgment has been rendered fixing liability against someone insured by the insurer. Under the contract of insurance in the present case, the insurance company is not obligated to pay until “the insured (the county) shall become legally obligated to pay.” The facts of the present case are singularly like the facts in Happy v. Erwin in this respect. To inject the insurance angle into a case is generally considered to be reversible error. Hall v. Ratliff, Ky., 312 S.W.2d 473. Further, in a majority of jurisdictions it is held that the procurement of liability or indemnity insurance by a governmental unit has no effect upon its immunity from tort liability. See Annotation, 68 A.L.R.2d 1437.

The dismissal of the action as to the Fayette County Government, doing business as Fayette County Court House, was also proper. It is difficult to conceive the ground upon which such might be considered as a legal entity and thus be suable. “Legal entity” means legal existence. Department of Banking v. Hedges, 136 Neb. 382, 286 N.W. 277. The abilities to sue and be sued and to be made amenable to legal processes are characteristics of a legal entity. Each is lacking here. The Fayette County Government, doing business as Fayette County Court House, was not a party suable in this action.

The remaining question is whether the members of the Fayette County Fiscal Court are liable individually for the injuries suffered by appellant. She argues that KRS 67.140 places certain duties on the fiscal court and that the members of the court should be held liable for negligently failing to perform such duties.

KRS 67.140 provides:

“In counties containing a city of the second class wherein all terms of the circuit court are held at the county seat, the fiscal court shall have the care and custody of the courthouse at the county seat, the courtrooms and offices therein, and the public grounds adjacent thereto, and shall have authority and jurisdiction to levy and collect property taxes necessary for the purpose of keeping and maintaining the courthouse and grounds in proper condition and repair, to prevent injury thereto, to keep them in a proper state of cleanliness and sanitation, to provide heat and lights for them, and to provide sufficient water for the courts and offices therein.”

Fayette County falls within the classification of this statute.

Appellant has seized upon that part of the statute ending with the words “adjacent thereto” on which to base the argument that the fiscal court had a statutory duty to prevent injury to third persons who might be on and about county premises, citing Upchurch v. Clinton County, Ky., 330 S.W.2d 428.

A reading of the entire statute makes it apparent that the purpose of the statute is to give taxing authority to the fiscal court to raise money to protect and prevent injury to the property of the county and to make adequate provisions for the maintenance of appropriate offices and court facilities. The county judge and members of the fiscal court have many other duties and responsibilities that demand of their time and efforts. Such statute does not contemplate that the members of the fiscal court shall be at the place where work is being done to carry out the purpose of the statute, nor does it contemplate that such members shall personally superintend the manner in which it is being done.

The law contemplates that the courthouse, courtrooms, offices, and adjacent grounds shall be physically maintained in proper condition and repair and shall be kept protected from injury, as well as for the other purposes mentioned specifically. It is contemplated that such work shall be done under the general supervision of the court and that subordinates shall be employed to handle the details of the work, such as to clean “snow, sleet and ice” from the courthouse steps. This is the necessary implication of the statute. It is compelled by physical necessity.

The rule is that public officers are responsible only for their own misfeasance and negligence and are not responsible for the negligence of those who are employed by them if they have employed persons of suitable skill. Stone v. Arizona Highway Commission, 93 Ariz. 384, 381 P.2d 107; Coldwater v. State Highway Commission, 118 Mont. 65, 162 P.2d 772; Fernelius v. Pierce, 22 Cal.2d 226, 138 P.2d 12; Corliss v. Van Duzer, 132 Or. 265, 285 P. 253.

The rule was recognized in Whitt v. Reed, Ky., 239 S.W.2d 489, 32 A.L.R.2d 1160, wherein public officers were held liable for their failure to exercise ordinary care in selecting subordinates who were known to them to be unsatisfactory to perform the task which they negligently performed, and in the execution of which it was reasonable to infer that.disastrous consequences would result. In Spillman v. Beauchamp, Ky., 362 S.W.2d 33, 2 A.L.R.3d 814, it was pointed out that there must be “some element of personal fault on the part of the officer or agent, such as negligence or deliberate wrongdoing.”

In Shearer v. Hall, Ky., 399 S.W.2d 701, the majority of the court proceeded on the theory that the duties imposed on the members of the fiscal court by KRS 67.080 with respect to county roads and bridges were ministerial in character and held that an allegation of willful and wanton failure to perform such duties was sufficient to charge liability. There is no such charge in this case.

Appellant does not allege that the members of the fiscal court were negligent in selecting subordinates to service the courthouse and grounds adjacent thereto. She does not contend that the statute contemplates that such members shall personally remove the accumulation of “snow, sleet and ice.”

While it is alleged that the fiscal court members were negligent in failing to cause to be removed the accumulation, this is not sufficient. Nor is it sufficient to allege that they “know, or should have known by reason of the existing weather conditions at the time and place aforesaid, that the premises were unsafe,” etc. The last allegation would require that the members of the fiscal court should assume that an employee would not perform his duties in a proper and timely manner. Such assumption is not warranted.

The order of dismissal was proper.

Judgment affirmed.

WILLIAMS, C. J., and MILLIKEN, OSBORNE and STEINFELD, JJ., concur.

HILL and PALMORE, JJ.,

dissent for the same reasons stated in dissent in Cul-linan v. Jefferson County, Ky., 418 S.W.2d 407.


author: CLAY, Commissioner.

text:
    Sadie CLICK, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    May 19, 1967.
    Rehearing Denied Oct. 6, 1967.
    Joe P. Tackett, Prestonsburg, for appellant.
    Robert Matthews, Atty. Gen., David Mur-rell, Asst. Atty. Gen., Frankfort, for appel-lee.
   CLAY, Commissioner.

Appellant was convicted of selling alcoholic beverages in dry territory, and her punishment fixed at a $100 fine and 30 days in jail.

The case had been continued for trial several times. It was called for trial one morning and on motion of defendant court was adjourned until 1:00 p. m. Upon reconvening the defendant’s counsel moved for a further continuance on the ground that defendant had become ill. The court overruled the motion and a trial was had in which defendant’s counsel participated. It is contended that the failure to grant a continuance was reversible error.

At no time did defendant file an affidavit or present any other evidence that defendant was, unable to attend the trial. A motion for -a continuance must be supported by some competent evidence. Vow-ells v. Commonwealth, 84 Ky. 52, 8 Ky. Law Rep. 74; Mullins v. Commonwealth, 196 Ky. 443, 245 S.W. 2. In the latter case it was specifically held that a statement of defendant’s counsel “was not in any sense a proper showing even that defendant was sick, much less that he was thereby prevented from attending the trial”. We do not think the court abused its discretion under the circumstances shown by this record in declining to grant a continuance on the basis of counsel’s oral statement that the defendant was not physically able to be present.

In a proceeding of this nature a trial may be had in the absence of defendant. RCr 8.28(3).

Defendant also contends that she was misled because she could not locate a witness the prosecution had named in a bill of particulars as having purchased alcoholic beverages from her. But she fails to point out any error committed by the court with respect to this prospective witness. We do not know how we could properly reverse a judgment simply because the appellant was unhappy about a development which the court was not able to or called upon to rectify.

The judgment is affirmed.

All concur.


author: CULLEN, Commissioner.

text:
    Sidney LASHER, Appellant, v. COMMONWEALTH of Kentucky ex rel. Robert MATTHEWS, Attorney General, Appellee.
    Court of Appeals of Kentucky.
    June 30, 1967.
    Rehearing Denied Oct. 6, 1967.

      William B. Byrd, Paducah, for appellant.
    Ben Fowler, Dailey & Fowler, Frankfort, Boyce G. Clayton, Benton, for appel-lee.
   CULLEN, Commissioner.

Sidney Lasher appeals from a summary judgment ousting him from the office of member of the board of education of Livingston County. The basis of the judgment was that Lasher is ineligible to hold the office because he holds the position of rural mail carrier. The circuit court was of the opinion that the position of rural mail carrier is “an office of trust or profit under the United States” within the meaning of Section 237 of the Kentucky Constitution, which declares a person holding such an office to be ineligible to hold an office of trust or profit under the Kentucky Constitution or statutes.

The ruling of the circuit court was in accord with our decision in Waddle v. Hughes, 260 Ky. 269, 84 S.W.2d 75, that the position of city mail carrier is an “office of trust or profit.” The appellant argues that Waddle should be overruled. A majority of this court so agrees.

Under our decisions a requisite of a position’s being a public “office” is that it possess a delegation of a portion of the sovereign power of government — authority to exercise some portion of the sovereign power — independent of any superior human authority other than a statutorily prescribed general control. Commonwealth v. Bush, 131 Ky. 384, 115 S.W. 249; City of Lexington v. Thompson, 250 Ky. 96, 61 S.W.2d 1092; Bernard v. Humble, 298 Ky. 74, 182 S.W.2d 24; Black v. Sutton, 301 Ky. 247, 191 S.W.2d 407; Taylor v. Com. ex rel. Dummit, 305 Ky. 75, 202 S.W.2d 992; Howard v. Saylor, 305 Ky. 504, 204 S.W.2d 815; Nichols v. Marks, 308 Ky. 863, 215 S.W.2d 1000; Love v. Duncan, Ky., 256 S.W.2d 498.

The record in the instant case shows that a mail carrier of Lasher’s category has no supervisory powers or duties; he has no decision-making powers in respect to procedures; he exercises no discretionary powers; he is bound by detailed rules. In fact, it is a matter of common knowledge that some postal employes work under rules probably more rigid and unvariable than those of any other department of the federal government. In no sense can it be said that the carrier exercises any of the sovereign power of government or has any independent authority. He merely performs duties assigned to him under superior authority in accordance with a manual of rules.

In Waddle v. Hughes the decision that the mail carrier was an officer seems to have been based primarily on the fact that carriers are appointed directly by the head of the post-office department. However, in none of our other cases do we find that the source of appointment was stated to be a major factor, or even a factor at all, in determining whether a position is an office. Other factors were mentioned in a federal decision cited in Waddle v. Hughes, such as the requirement of an oath and bond, a salary fixed by law, and regular, permanent duties. It is true that in some of our other cases we have mentioned these as factors to be considered, but we have continued to list as essential the possession of a delegation of a portion of the sovereign power.

It appears that the purpose of Section 237 of our Constitution is to prohibit a separation of allegiance from one sovereign to another and to prevent a division of loyalty. See Baker v. Dixon, 295 Ky. 279, 174 S.W.2d 410. Where a position involves authority, judgment, or discretion, obviously allegiance and loyalty are matters of prime concern. But where a position carries no power to make decisions, and its incumbent merely performs routine functions according to orders of superiors, any possible danger from a separation of allegiance or a division of loyalty would not seem to be significant, and we cannot conceive that the framers of our Constitution deemed it significant enough to be brought within the prohibition of Section 237.

As we view it, the fact that the federal government or the federal courts may designate or classify mail carriers as officers is not controlling of our interpretation of our Constitution. What “office” means in Section 237 should be decided according to the standard Kentucky meaning of the word as established by the decisions of this court. And we think that we must conclude that in using the word “office” in Section 237 the framers of the Constitution meant an office as distinguished from some other kind of a position. Otherwise, why did they not say “regular salaried position” instead of “office?”

We point out that the ineligibility imposed by Section 237 upon the holder of a federal “office of trust or profit” is from holding a Kentucky “office of trust or profit.” Certainly this court would not say that a mail clerk in the Kentucky Department of Finance, though appointed by the head of the department and drawing a regular, fixed salary, holds a Kentucky “office.” Clearly the word must be given the same meaning when applied to positions in the federal government as when applied to those in the state government.

It is our conclusion that the position of mail carrier, city or rural, such as held by Lasher, is not an “office” within the established standard definition of that term, and therefore is not one within the meaning of Section 237 of the Kentucky Constitution. Accordingly, we overrule Waddle v. Hughes, 260 Ky. 269, 84 S.W.2d 75.

It does not follow, however, that the judgment ousting Lasher should be reversed. For reasons hereinafter stated, the new holding of this opinion will be prospective only — not applicable to present occupants of Kentucky offices during the remainder of the terms they now hold.

It is, of course, within our inherent power to give a decision prospective or retrospective application. See Great Northern Railway Co. v. Sunburst Oil & Refining Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360. We can make a decision applicable only to future fact situations, or to future fact situations and to the instant case, or to all situations, past. or future. See Haney v. City of Lexington, Ky., 386 S.W.2d 738. The chief reason for denial of retrospective application has been to preserve property rights acquired in reliance upon the law that is being changed by the new decision. See Bishop v. Bishop, Ky., 343 S.W.2d 587. Another reason has been to prevent confusion and expense arising from the unsettling of matters deemed to have been settled under the old law. See Commonwealth, Department of Highways v. Sherrod, Ky., 367 S.W.2d 844.

As pointed out in Haney, supra, to make a law-changing decision applicable to the instant case is in effect to reward the appellant for his industry in attacking the soundness of the old law. But it seems a little incongruous to reward someone who is in the position of having defied the old law. Lasher took office as a member of the board of education, and continued to hold it until entry of the judgment in this litigation, charged with the knowledge that under then existing law he was ineligible to hold the office. We believe it would not be consonant with generally prevailing concepts of fairness to relieve him of the bar of ineligibility. The same is true as to any other person now holding a Kentucky office which he was ineligible to hold under the rule of Waddle v. Hughes. Accordingly, this opinion will have prospective application only, as hereinbefore stated.

The judgment is affirmed.

WILLIAMS, C. J., and MILLIKEN, OSBORNE, PALMORE, and STEIN-FELD, JJ., concur.

MONTGOMERY, J., concurs m the result but not in the limitation to prospective application.


author: DAVIS, Commissioner. MONTGOMERY, Judge.

text:
    Albert DEMPSEY, Appellant, v. Thelma STOVALL, Secretary of State of Commonwealth of Kentucky, Fred Wolchik, James Muncy, County Court Clerk of Martin County, Roy R. Ross, County Court Clerk of Johnson County, Appellees.
    Court of Appeals of Kentucky.
    Sept. 15, 1967.

      Sam G. McNamara, Frankfort, for appellant.
    Jack L. Lewis, Paintsville, for appellee Wolchik.
    Robert Matthews, Atty. Gen., for ap-pellee.
    Walter C. Herdman, Asst. Atty. Gen., Frankfort, for appellee Stovall.
   DAVIS, Commissioner.

Albert Dempsey, the appellant herein, a qualified voter of the 97th Legislative District composed of Johnson and Martin Counties, instituted this action in the Franklin Circuit Court asserting that appellee, Fred Wolchik, failed to comply with pertinent provisions of KRS Chapter 123. Dempsey alleged that Wolchik had received a majority of the votes cast in the Republican Primary held May 23, 1967, in the contest for representative in the 97th Legislative District of Kentucky, and demanded that the Secretary of State and the county court clerks be enjoined from taking the administrative steps looking toward placing the name of Wolchik on the ballot to be used in the general election to be held November 7, 1967, in the legislative district.

The trial court denied the relief sought and dismissed the complaint, and Dempsey prosecutes this appeal testing the propriety of that judgment.

KRS Chapter 123 was enacted as Senate Bill No. 265 in the General Assembly of 1966 and became effective June 16, 1966. The legislation referred to substantially supplanted the Corrupt Practices Act which had previously been embodied in KRS Chapter 123.

KRS 123.071(1) provides:

“Each candidate in an election shall appoint one campaign treasurer and shall designate a campaign depository on or before the date of public announcement of his candidacy or on the date he files as a candidate, whichever is sooner. The candidate may appoint himself or any other registered voter in Kentucky as his campaign treasurer and may designate any bank authorized by law to transact business in Kentucky as his campaign depository. The candidate shall file the name and address of the campaign treasurer and the campaign depository with the Registry, and his qualification shall not be complete until he has met this requirement.”

KRS 123.086 directs the filing of reports to the Kentucky Registry of Election Finance (hereinafter Registry).

KRS 123.991 is as follows:

“(1) Any person who violates a provision of this act is guilty of a misdemeanor and shall be punishable by a fine not exceeding $1,000 or by imprisonment for not more than one year, or both. Violations shall include but shall not be limited to any of the following acts or omissions;

(a) Failure to make required reports or to file reports at times specified;
(b) Making any false statement or report;
(c) Giving money under a fictitious., name;
(d) Making any communication to support or defeat a candidate without identification of sponsorship.

(2) The nomination for, or election to, an office of any candidate who violates any provision of this act, or whose campaign treasurer or any deputy campaign treasurer violates a provision of this act with such candidate’s knowledge, shall be void, and the office or candidacy shall be filled as provided by law for the filling of a vacancy.

(3) Promptly after the final date for filing statements and reports the Registry shall notify all persons who have become delinquent in filing the same, including contributors, and shall make available a list of such delinquents for public inspection. The registry shall also report to the Attorney General and the Commonwealth attorneys such list.

(4) Any registered voter may sue for in-junctive relief to compel compliance with the provisions of this act.

(5) Prosecution for violation of any provision of this act shall not be commenced after one year has elapsed from the date of the violation.”

In his answer, Fred Wolchik, the successful candidate in the Primary, admitted:

“ * * * that he did not appoint or designate his campaign depository until May 31, 1967, or file any financial reports required by Chapter 123.086 (sic) until May 24, 1967, and that the same were deposited in the United States mail late on May 22,1967, and that it is probably true that the postmark thereon reflects the date of May 23, 1967.”

An'affidavit of Kenneth P. Vinsel, Executive Director of the Kentucky Registry of Election Finance, disclosed that three written communications were directed to appel-lee Wolchik from the Registry apprising him of the requirements of KRS Chapter 123, but that no reply was received by the Registry until May 24, 1967, in an envelope postmarked at Paintsville on May 23, 1967. The affidavit of Mr. Vinsel reflects that the name of the depository was not furnished to the Registry until June 1, 1967, in an envelope postmarked May 31, 1967. On June 5, 1967, the Registry received two reports of contributions and expenditures dated June 2, 1967.

The appellant asserts that the provisions of KRS Chapter 123 requiring the appointment of a campaign treasurer and designation of a campaign depository are mandatory. It is also contended that the financial reports prescribed by KRS 123.086 are mandatorily required and that Wolchik’s nomination is void for his failure to comply with the requirements of the act in these respects.

The appellee Wolchik contends, and was upheld in his contentions by the trial court, that the interests and rights sought to be served and protected by KRS Chapter 123 are those of the voters and the general public of the district, and that absent a showing that non-compliance or dilatory compliance injured or denied such protection to the public, it cannot be said that Wolchik is disqualified from the nomination which a majority of the voters conferred upon him. Moreover, it is contended by appellee Wol-chik and was found by the trial court that there was substantial compliance with the provisions of the act.

It is to be observed that appellee Stovall, Secretary of State for the Commonwealth of Kentucky, filed answer herein in which the court was requested to decide the issue prior to the deadline for certifying the names and addresses of the duly nominated candidates. The county court clerks of Johnson and Martin Counties have not filed any pleadings in this proceeding.

The litigants point out that there has been no decision of this court construing present KRS Chapter 123. The appellant and ap-pellee Wolchik direct our attention to prior decisions of this court construing provisions of KRS Chapter 123 as they existed prior to the 1966 legislation. These decisions are: Sparkman v. Saylor, 180 Ky. 263, 202 S.W. 649; Best v. Sidebottom, 270 Ky. 423, 109 S.W.2d 826; Raney v. Stovall, Ky., 361 S.W.2d 518; Breathitt v. Warren County Election Commission, Ky., 372 S.W.2d 793; Board of Trustees of Demossville Graded Common School District v. Board of Education of Kenton County, 193 Ky. 502, 236 S.W. 1038; Raymer v. Willis, 240 Ky. 634, 42 S.W.2d 918; Monhollan v. Rice, 287 Ky. 814, 155 S.W.2d 223. In addition to the domestic cases cited, appellee invites our attention to United Fuel Gas Company v. Railroad Commission, 278 U.S. 300, 49 S.Ct. 150, 73 L.Ed. 390.

Without undertaking an analysis of each of the authorities cited and numerous others which have emanated from this court incident to litigation involving prior legislation, it suffices to say that the filing of financial reports as required by the Corrupt Practices Act is a mandatory requirement. We need not now decide whether , a substantial compliance vis-a-vis strict compliance satisfies the mandate of the act. It is patent that failure to file reports and designations required by the act until after the date of the Primary cannot be deemed compliance, substantial or strict. In this state of case, it would be to emasculate the salutary provisions of the act to permit ap-pellee Wolchik to receive the benefits of the nomination obtained in flagrant violation of the law’s clear provisions.

We are not to be understood as here holding that the appellant Dempsey has sufficient standing in court to obtain the redress ordered in this appeal. We reserve that question without adjudication. It is significant that the terms of KRS 123.071(1) made appellee Wolchik unqualified for the office by his failure to comply with its terms.

In view of the public question involved, and in view of the fact that a public official, here the Secretary of State, seeks judicial determination of her duties in the premises, we are constrained to hold that the nomination of Wolchik in the circumstances presented by this record is a void nomination under the clear provisions of KRS 123.991. Accordingly, the Secretary of State will not certify appellee Fred Wol-chik as the Republican nominee for House of Representatives from the 97th Legislative District of Kentucky, and the appellees, James Muncy, county court clerk of Martin County, and Roy R. Ross, county court clerk of Johnson County, will not place the name of Wolchik on the ballot for the November 7, 1967, election based upon the nomination of Wolchik in the Primary held May 23, 1967. The candidacy for such office shall be filled as provided by law for the filling of a vacancy.

The judgment is reversed with directions to enter a new judgment in conformity with the opinion.

WILLIAMS, C. J., and OSBORNE, STEINFELD, MILLIKEN and EDWARD P. HILL, JJ., concur.

MONTGOMERY, J., dissents.

PALMORE, J., not sitting.

DISSENTING OPINION

MONTGOMERY, Judge.

I respectfully dissent from the majority opinion primarily because Albert Dempsey, who seeks injunctive relief, has failed to show any irreparable injury. It is elementary law that such a showing must be made to entitle one to such relief.

The basis of my dissent is expressed in a unanimous opinion in Breathitt v. Warren -ty Election Commission, Ky., 372 S.W.2d 793. The plaintiffs therein sought in-junctive relief for a violation of an election statute.

After pointing out that those who sought relief had failed to allege or prove that the act done “will in any way adversely affect or injure them either as candidates or as citizens and taxpayers”, the court said:

“ * * * unless the plaintiffs show some damage different in character from that which may be sustained by the public generally, they have not established a right to relief. 28 Am.Jur., Injunctions, section 178 (page 681).
“It is axiomatic that an injunction will not lie unless the defendant is doing or threatening an act which will be injurious to the one seeking the injunctive relief. Board of Trustees of Demossville Graded Common School Dist. v. Board of Education, 193 Ky. 502, 236 S.W. 1038. As said by the Supreme Court of the United States in United Fuel Gas Co. v. Railroad Comm., 278 U.S. 300, 310, 49 S.Ct. 150, 152, 73 L.Ed. 390:
“ ‘Suitors may not resort to a court of equity to restrain a threatened act merely because it is illegal or transcends constitutional powers. They must show that the act complained of will inflict upon them some irreparable injury.’
“To the same effect is Morrow v. City of Louisville, Ky., 249 S.W.2d 721. The fact that public acts or officials are involved does not change the rule. See Hettel v. Furste, 260 Ky. 844, 86 S.W.2d 1018; Little v. Bogie, 300 Ky. 668, 190 S.W.2d 26.”

This was the law decided in 1963. The majority opinion does not satisfactorily say why it should not be law of this case. Likewise, the majority opinion does not overrule or distinguish the cases listed therein which established a rule of long standing that the filing of such reports is discretionary as to time of such filing and that a substantial compliance in reporting is sufficient. See also Sparkman v. Saylor, 180 Ky. 263, 202 S.W. 649; Creech v. Fields, 276 Ky. 359, 124 S.W.2d 503.

The effect of the decision by the majority is to thwart the will of the majority of the voters in the Republican Primary in Johnson and Martin Counties at the instance of his defeated opponent. The fact that the seeker of the relief is the defeated incumbent is a proper subject of judicial notice. No other citizen of the two counties complains.

I do not feel that the appellant has sufficient standing to “obtain the redress ordered in this appeal,” to borrow a term from the majority opinion. By express language the majority opinion refrained from holding that he does have such standing. Such being the case, the majority of the court is in the position of rendering a favorable decision for one it is unwilling to say has a right in court. Accordingly, I do not feel that the appellant is entitled to receive the extraordinary relief granted by a court of equity when no one is willing to say that he is entitled to seek or obtain equity.

For these reasons I dissent.


author: EDWARD P. HILL, Judge.

text:
    NEIGHBORHOOD OIL COMPANY, Appellant, v. COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellee.
    Court of Appeals of Kentucky.
    March 31, 1967.
    Rehearing Denied Oct. 6, 1967.
    Robert P. Hobson, Kenneth L. Anderson, Woodward, Hobson & Fulton, Louisville, for appellant.
    Robert Matthews, H. C. Smith, Frankfort, E. Preston Young, Louisville, for ap-pellee.
   EDWARD P. HILL, Judge.

This is a highway condemnation action filed by appellee against Dahlem Foundation, Inc., as owner and appellant Neighborhood Oil Company as lessee to condemn a strip of land 33 feet wide and 1280 feet in length along the Preston Highway side of a triangular shaped tract of land situated in the southwest corner of the junction of Indian Trail and Preston Highway near Louisville, Kentucky.

Only Neighborhood Oil Company has appealed from a judgment entered pursuant to the jury’s verdict finding its leasehold interest to have the same value after as before the taking. Dahlem Foundation was apparently satisfied with the report and award of the commissioners of the county court fixing the difference in the before and after value of its property at $13,199 and did not appeal to the circuit court, although it entered into and filed in circuit court an agreement with Neighborhood Oil Company for the division of any judgment in that court.

The county court commissioners awarded appellant Neighborhood Oil Company $4,-994 as the difference in the before and after value of its leasehold interest. The con-demnor filed exceptions to this report, but the circuit court properly dismissed the exceptions for failure to file within the time required. We do not find in the record an order dismissing appellee’s exceptions to the report of the county court commissioners, but the judgment entered by the circuit court on the jury’s verdict recites that “the appeal and exceptions of the plaintiff in this action having been dismissed, the defendant * * * Neighborhood Oil Company, Inc. * * * recover and be paid the sum of FOUR THOUSAND. NINE HUNDRED NINETY-FOUR DOLLARS.” Both parties and the trial judge conducted the trial as though the appeal of condemnor had been properly dismissed by allowing Neighborhood Oil to have the opening and closing arguments and the presentation of its evidence first. We, likewise, shall treat the order as entered.

The trial in circuit court was conducted in strict accord with the rules outlined in Commonwealth, Department of Highways v. Sherrod, Ky., 367 S.W.2d 844 (1963). Appellant is insisting here that, inasmuch as Dahlem Foundation did not appeal to the circuit court and the value of the land taken was not an issue at the trial, only the question of the value of its lease should have been submitted to the jury. It complains also that the trial court erred in “failing to follow the order entered in the case in which” the parties agreed to an apportionment of the award; and that the verdict of the jury was contrary to “the evidence and law.”

Appellant’s evidence was directed to the value of the lease alone, along with other items in the nature of cost of repairs made necessary by the taking. Appellee’s evidence followed this court’s guildelines set out in Sherrod, supra, by fixing the before value of the entire tract free of the lease; its before value subject to the lease; and its value after the taking free of the lease. Appellant offered instructions embodying its theory of the case. They were refused by the court and instructions were given substantially as approved in Sherrod, supra. Appellant relies on Commonwealth, Department of Highways v. Dowdy, Ky., 388 S.W.2d 593 (1965) and Commonwealth, Department of Highways v. Polk, Ky., 389 S.W.2d 928 (1965).

In the Dowdy case the opinion states that, “On retrial, evidence concerning the leasehold should be admitted as is provided in Commonwealth, Department of Highways v. Sherrod, supra.(Emphasis ours.) Clearly there is nothing in Dowdy to support appellant’s position in the present case.

Polk, supra, differs from the present case in this important respect: In Polk the landowner and lessee were properly before the circuit court and agreed to a division of the amount of the verdict with the acquiescence of the condemnor. In the present case the landowner was not properly before the circuit court, although the trial court held otherwise. The mere filing of an agreement relative to division of the circuit court award did not operate to join the landowner as a party in circuit court. The agreement in Polk rendered unnecessary the determination of the value of the lease; while in the present case, the only question was the value of the lease. But in Sherrod this court “after thorough deliberation * * * worked out” the “most reasonably fair and workable method for determining compensation in” this class of condemnation cases.

In Gulf Interstate Gas Company v. Gar-vin, Ky., 368 S.W.2d 309, 313 (1963) this court said: “The fact that the interests in the land may be separately owned does not affect this basic method of determining just compensation.”

The bench and bar have, for nearly four years, endeavored to follow the rule outlined in Sherrod. We think of no valid reason to upset Sherrod. It is to be noted the important purpose of Sherrod is to safeguard not only that “just compensation” be awarded the condemnee, but that the award not exceed the difference between the before and after value of the entire property. This safeguard, relative to the difference between the before and after value, may be hopelessly lost if the owners of various interests in real estate are allowed to try piecemeal the value of their respective interests.

Appellant next argues the trial court erred in “failing to follow the order” agreeing to division of the award in circuit court. The verdict literally followed Sherrod. It found the before value free and clear of the lease at $115,000 and the before value subject to the lease at the same amount.

The verdict of the jury is not supported by the evidence. Appellee’s witness fixed the value of the lease at $1,470. The evidence shows appellant paid $60,000 for the lease. The lease was to run 15 years from January 1, 1958, and contained three (five year) options for its extension. Only five years of the original term of the lease had expired on the date of the taking.

The evidence also shows 5,360 square feet of asphalt paving was removed. It was necessary to raise 1,050 square feet of concrete curbing to relocate a sign thereon, and the approaches were substantially reduced.

The lease in question surely had some substantial value. The jury was not governed by the evidence when it found the leasehold interest to have no value. The jury should have determined the value of the lease as outlined in Sherrod and left to the court the mathematical question of the amount of the judgment to be entered. The county court judgment for the leasehold interest was $4,994. The condemnor’s exceptions having been filed too late, it is bound on appeal for no less than this amount. In the event the circuit court jury fixes the value of the lease in excess of the county court judgment, the lessee is entitled to recover such excess.

The judgment is reversed with directions to grant appellant a new trial.

WILLIAMS, C. J., and MILLIKEN, OSBORNE, PALMORE, and STEIN-FELD, JJ., concur.


text:
    CITY OF HARRODSBURG, Kentucky et al., Appellants, v. Roy DEVINE et al., Appellees.
    Court of Appeals of Kentucky.
    May 19, 1967.
    As Modified on Denial of Rehearing Oct. 6, 1967.

      John L. Keller, Harrodsburg, for appellants.
    W. Earl Dean, Dean & Dean, Harrods-burg, James F. Clay, Clay & Clay, Danville, for appellees.
   EDWARD P. HILL, Judge.

The validity of section (s) of Ordinance No. 45 of the city of Harrodsburg enacted March 1, 1943, is the question presented by this appeal.

The section of the ordinance under attack is quoted as follows:

“(s) For each slot machine of any description, not prohibited by law, into which are dropped or deposited nickles or coins of other denominations, for the purpose of operating musical, gaming, weighing or other machines, or any other device that operates on the coin-in-the-slot principle, except pay telephones and U. S. postage stamp machines, $10.00 per year.”

This action was filed by appellees, persons who own or permit the operation of merchandise vending machines in their places of business, to enjoin the collection of the license fee required by the ordinance in question. The trial court found the ordinance invalid and enjoined its enforcement. The city has appealed.

The right of municipalities of the class in question in this case to levy taxes is governed by section 181 of the Constitution of Kentucky. It authorizes the Legislature to confer upon the city the power to license trades, occupations, and professions and to levy other taxes not material to this appeal.

The Legislature has conferred by KRS 92.280 and 92.281 blanket authority upon municipalities of the second to sixth class to levy any and all taxes authorized in section 181 of the Constitution.

The appellant City of Harrodsburg contends on this appeal that the ordinance in question is valid under the authority of City of Lexington v. Edgerton, 289 Ky. 815, 159 S.W.2d 1015, 151 A.L.R. 1207.

The appellees endeavoring to uphold the correctness of the judgment of the trial court contend: (1) The ordinance in question is discriminatory; and (2) the penalty for nonpayment of the license tax is unreasonable, confiscatory, and arbitrary.

The position of appellees that the ordinance in question is discriminatory is based upon the following provision of the ordinance : “ * * * (T)he license imposed by section * * * (s) shall not apply to such businesses while set up on the fair grounds and operating in connection with and as a part of the annual weekly program of the Mercer County Fair & Horse Show.”

One of the basic rules of taxation is that the power to tax should always be exercised so as to produce as nearly as possible equality and uniformity in the burdens imposed. 84 C.J.S. Taxation § 21.

It should be kept in mind that this rule of equality and uniformity applies also to the rate or the amount of the tax imposed. 84 C.J.S. Taxation § 31. The ordinance in question provides for an equal license fee for each machine, and the person who desires to operate such a machine in the city has a right to operate it for a full year upon payment of the $10 license fee fixed in the ordinance. The exclusion applies only to the operation of machines for a period of one week or possibly a shorter period, and it would certainly not be a uniform and equal tax as to rate had the city attempted to require a $10 license fee for the operation of these machines for the brief period of one week. Such a tax could well be confiscatory.

The question here presented is whether the exemption of machines “set up on the fair grounds” and operated “in connection with and as a part of the annual weekly program of the Mercer County Fair & Horse Show” constituted such discrimination or inequality as to invalidate the licensing ordinance. We do not think it did. We find authority for this view in 53 C.J.S. Licenses § 22, page 537, wherein it is stated:

“In the classification of occupations and privileges for licensing and taxation, general classes may be subdivided into particular classes, where such subdivision is reasonable and not arbitrary, and, in the interest of the public, particular privileges, occupations, or classes of business may be licensed or taxed and other privileges, occupations, or businesses be entirely exempt therefrom.” (Emphasis ours.)

There is also support for the rule above stated in many decisions of this court, among which are, Hartman v. City of Louisville, 282 Ky. 487, 138 S.W.2d 948 and City of Louisville v. Sebree, 308 Ky. 420, 214 S.W.2d 248. We quote the following from page 256 of Sebree:

“It is familiar law that the selection of subjects of classification for taxation founded upon a natural and reasonable basis, with a logical relation to the purposes and objectives of a statute or ordinance, does not offend the principle of equality or uniformity in the imposition of a tax of this character so long as it operates equally upon all of those within the class.”

The exemption in the instant case is insubstantial and inconsequential. It should not invalidate the ordinance.

In City of Lexington v. Edgerton, supra, this court upheld a licensing ordinance of the city of Lexington wherein cigarette vending machines were involved. We see no distinction between cigarette vending machines and those that vend other merchandise, such as candy or a combination of candy and other merchandise.

Appellees rely on Great Atlantic & Pacific Tea Co. v. Kentucky Tax Commission, 278 Ky. 367, 128 S.W.2d 581, and City of Greenville v. Martin, 308 Ky. 247, 214 S.W.2d 271, also Martin v. City of Greenville, 312 Ky. 292, 227 S.W.2d 435, in which the tax increased with the number of units involved. Such is not the case here where the same tax per unit is charged regardless of the number of units. In the Greenville case, the tax was $2 for one apartment, $10 for two apartments, and $15 for three apartments, etc. Here, the tax is $10 per unit; that is, $10 for one unit, $10 for each of two units, etc. On this basis there is no discrimination, and the tax is uniform.

In regard to part V of appellees’ brief in which they say the penalty is unreasonable, confiscatory, and arbitrary, ap-pellees saw off the limb they attempt to stand on when they make this statement:

“Apparently the appellants realize that the defense of the penalty clause provided in Ordinance No. 45 was impossible, and by withdrawing of the counterclaim seeking to enforce such penalty, perhaps remove this question from this appeal. Nevertheless, something should be said about the penalty provision of Ordinance No. 45.”

It appears from the record the ordinance provides for a 10% penalty and a fine equal to the amount of the license for each day the tax is not paid. We do not find this confiscatory.

The judgment is reversed with direction to enter judgment validating the ordinance in question.

All concur.


author: PER CURIAM.

text:
    O. M. FRANKLIN SERUM COMPANY, Petitioner, v. C. A. HOOVER & SON et al., Respondents. No. B-91.
    Supreme Court of Texas.
    July 19, 1967.
    Rehearing Denied Oct. 4, 1967.
    Underwood, Wilson, Sutton, Heare & Berry, R. A. Wilson, Amarillo, for petitioner.
    Lemon, Close & Atkinson, R. D. Lemon, Perryton, for respondents.
   ON APPLICATION FOR WRIT OF ERROR

PER CURIAM.

In McKisson v. Sales Affiliates, Inc., Tex.Sup., 416 S.W.2d 787, we adopted the rule of strict liability in tort with respect to sellers of defective products which cause physical harm to persons. The Court of Civil Appeals has held in the present case that the seller of a defective product is also subject to strict liability for damage caused to the property of the ultimate consumer. 410 S.W.2d 272. We are in agreement with this holding and accordingly disapprove the opinions in Brown v. Howard, Tex.Civ.App., 285 S.W.2d 752 (wr. ref. n. r. e.), and Cruz v. Ansul Chemical Co., Tex.Civ.App., 399 S.W.2d 944 (wr. ref. n. r. e.), in so far as they are inconsistent therewith. The application for writ of error is Refused, No Reversible Error. See Rule 483, Texas Rules of Civil Procedure.


author: NORVELL, Justice.

text:
    William KRAFT et al., Petitioners, v. TEXAS EMPLOYMENT COMMISSION and the Shamrock Oil and Gas Corporation, Respondents.
    No. B-136.
    Supreme Court of Texas.
    July 26, 1967.
    Rehearing Denied Oct. 4, 1967.

      H. B. Porter, Dumas, Sam Houston Clinton, Jr., Austin, for petitioners.
    Crawford C. Martin, Atty. Gen., J. H. Broadhurst, Asst. Atty. Gen., Austin, Underwood, Wilson, Sutton, Heare & Berry, W. M. Sutton, Amarillo, for respondents.
   NORVELL, Justice.

The petitioners, William Kraft and forty-eight others, claim benefits under the Texas Unemployment Compensation Act. The primary question for decision is whether petitioners are disqualified from receiving such benefits under subsection (d) of section 3 of the Act, as amended in 1955, Article 5221b-3(d), Vernon’s Ann.Tex. Stats.

Petitioners were employed by Shamrock Oil and Gas Corporation in 1964 and on August 9th of that year went on strike against the company’s three plants. Thereafter, they offered to return to work but were told that the places formerly held by them had been filled and that no jobs were available.

Article 5221b — 3(d) provides that:

“An individual shall be disqualified for benefits: * * *
“(d) For any benefit period with respect to which the Commission finds that his total or partial unemployment is (i) due to the claimant’s stoppage of work because of a labor dispute at the factory, establishment, or other premises (including a vessel) at which he is or was last employed, or (ii) because of a labor dispute at another place, either within or without this State, which is owned or operated by the same employing unit which owns or operates the premises at which he is or was last employed, and supplies materials or services necessary to the continued and usual operation of the premises at which he is or was last employed; provided that this subsection shall not apply if it is shown to the satisfaction of the Commission that:
“(1) He is not participating in or financing or directly interested in the labor dispute; provided, however, that failure or refusal to cross a picket line or refusal for any reason during the continuance of such labor dispute to accept and perform his available and customary work at the factory, establishment, or other premises (including a vessel) where he is or was last employed shall be considered as participation and interest in the labor dispute; and * * *.” (Exception (2) of the subsection is not pertinent to this cause.)

This subsection of the Unemployment Compensation Act was considered in Texas Employment Commission v. Hodson, 346 S.W.2d 665 (Tex.Civ.App., 1961, writ ref’d n.r.e.), wherein it appeared that Hodson joined a sheet metal workers’ strike on April 2, 1959, and thereafter on September 25, 1959, he voluntarily crossed the picket line of his union and made an unconditional offer to go to work but was refused employment because the employer had already employed other workers to take the place of those who had gone on strike and there was no opening for him. The Court of Civil Appeals said:

“When appellee crossed his own picket line during the strike and was refused employment because there was no work available due to his job having been filled by another, his unemployment was no longer ‘because of a labor dispute at the factory’; it was because there was no job for him. Resort to the escape clauses, subsection (d) (1) and (2) is not required, since the basic disqualification did not then exist. A new cause of involuntary unemployment had then displaced the original disqualifying cause.”

In the present case, the trial court rendered judgment for petitioners which was reversed by a divided Court of Civil Appeals. 411 S.W.2d 624. The majority took the position that Hodson was distinguishable from the present case. In its opinion, it was said:

“There is nothing in that case (Hod-son) to show that the appellee participated further in the union. It is stated in Subsection (d), Article 5221b-3: ‘[PJrovided that this subsection shall not apply if it is shown to the satisfaction of the Commission that: (1) He is not participating in or financing or directly interested in the labor dispute.’ Ap-pellees herein did not show to the satisfaction of. the Commission that they were not participating in or directly interested in the labor dispute. Appellees crossed the picket line with the consent of the union and were to report back to the union, and continued to take part in the picketing. We think the evidence clearly shows in this case that appellees were participating and directly interested in the labor dispute which still existed at the time of the trial in the district court.”

The Chief Justice was of the opinion that the result reached by the majority was in direct conflict with Hodson and quoted the excerpt from the Hodson opinion which is set out above.

We think there is a well defined conflict between the majority opinion in this case and the opinion rendered in Hodson. The decision in this case is squarely bottomed upon the first exception or escape clause in subsection (d). The court stated that Kraft and his co-petitioners failed to show that they were not participating in or directly interested in a labor dispute. In Hodson it was clearly held that the escape clauses or exceptions of subsection (d) were not applicable since the basic disqualification did not exist as a “new cause of involuntary unemployment had then displaced the original disqualifying cause.”

Whilé Shamrock and the Employment Commission say that the present case may be distinguished from Hodson, the burden of their argument is that Hodson was incorrectly decided and was based upon authorities which properly had no application to the statute after it had been amended in 1955. In view of this vigorously urged contention, a more detailed statement of the facts in this case is deemed essential.

The Oil, Chemical and Atomic Workers International Union, AFL-CIO, was the recognized bargaining agent for the employees of Shamrock at its three plants. On August 6, 1964, the union called an economic strike because no agreement had been reached between Shamrock and the union as to wages and working conditions. Shamrock notified the union and its members that it would continue operations despite the strike and would proceed to secure new employees upon a permanent basis to take the place of the strikers. From August 9th to October 5th, Shamrock hired approximately 212 new employees as permanent replacements. On October 5th, Shamrock also had in its employ some 83 workmen who either did not go on strike or had returned to work despite the strike. After October 5th, some 105 to 110 strikers were reinstated by Shamrock and all jobs or positions at the company plants were filled with one exception. In October, it was recognized as a practical matter that the strike had failed to gain the objectives sought by the striking workmen and the union granted permission to its members to cross the picket line and unconditionally agree to resume labor for the company. A semblance of a picket line was maintained thereafter, and the picket signs were changed from “strike” to “lockout.” Between October 5th and October 19th, William Kraft and forty-eight others who had been employed by Shamrock prior to the strike, voluntarily crossed the union picket lines and made an unconditional offer to go to work for Shamrock. They were denied employment by the company on the ground that there were no jobs open as all available positions which could be held by petitioners had been filled by re-employed persons or new personnel hired since the commencement of the strike. On February 8, 1965, Shamrock sent its former employees a letter saying that they had been permanently replaced. Enclosed with the letter were any monies due from Shamrock, income tax W-2 forms and instructions for the withdrawal of retirement benefits on deposit with the company. Prior to this time, the company had ceased to pay premiums of the former employees’ group insurance.

The parties stipulated at a hearing in December 1965 that the labor dispute commenced by the strike called in August of the preceding year was still in existence and that after petitioners had been refused employment by Shamrock, they (with certain exceptions) during the period extending from the week ending October 10, 1964 through June 19, 1965, met the eligibility requirements specified in the constitution of the international union for strike benefits by reporting for strike duty which was construed to mean participating in (lockout) picketing for at least eight hours per week, or in other activity relating to the labor dispute, including consumer boycott against Shamrock products.

Under the Hodson holding, when a workman crosses the union picket line and makes an unconditional offer to go to work and employment is refused because no job is available, this circumstance is considered the then cause of unemployment rather than the original stoppage of work by the workman or claimant because of a labor dispute. It is argued by respondents that this construction of the statute is wrong and that the facts of this case demonstrate the unsoundness of the Hodson decision.

Respondents argue that in 1955, the Legislature intended to effect a major change in the disqualification provisions of the Unemployment Compensation Act.

Prior to 1955, Article 5221b-3(d) contained the following disqualification provision :

“(d) For any benefit period with respect to unemployment which the Commission finds that his total or partial unemployment is due to a stoppage of work which exists because of a labor dispute at the factory * * * at which he is or was last employed * * *.”

By Acts 1955, 54th Leg. Reg. Session, ch. 517, p. 1310, subsection (d) was amended so as to read as follows:

“(d) For any benefit period with respect to which the Commission finds that his total or partial unemployment is (i) due to the claimant’s stoppage of work because of a labor dispute at the factory * * * at which he is or was last employed ⅜ * *.”

The wording of the earlier statute is, “his total or partial unemployment is due to a stoppage of work which existed because of a labor dispute * *

The 1955 amendment uses the words, “his total or partial unemployment is * * * due to the claimant’s stoppage of work because of a labor dispute.”

Respondents say that the old statute has reference to “stoppage of work at the plant,” while the amended statute relates to the “claimant’s stoppage of work”, which means that if the individual workman stops work because of a labor dispute, he becomes disqualified regardless of whether the work at the plant stops or not.

It is argued that under the statute as it existed prior to 1955, the present claimants would not have been disqualified because there was no stoppage of work at the Shamrock plants, and that the Legislature intended to change the law and disqualify anyone from receiving unemployment benefits while he remained on strike and the plant or factory continued to operate. It is said that under a proper construction of the 1955 amendment, a workman’s “stoppage of work” because of a strike, that is, joining in a strike, disqualified him from receiving unemployment compensation and that such disqualification was not removed by an employer’s refusal to accept his unconditional offer to return to work because no work was available. Respondents contend that such disqualification could only be avoided by the workman’s bringing himself within one of the exceptions or escape clauses of subsection (d).

We are not prepared to say that respondents’ theory of construction of the statute is unreasonable or untenable. However, as stated in the forepart of this opinion, it is contrary to that reached by the Court of Civil Appeals in the Hodson case. We refused a writ of error in that case, no reversible error, and while by so doing, we did not necessarily approve all that was said in the opinion, Rule 483, we necessarily approved that court’s construction of Article 5221b-3(d) and its holding that when the workman crossed his own picket line during a strike and was refused employment because there was no work available, “a new cause of involuntary unemployment had then displaced the original disqualifying cause,” i. e., the workman’s stoppage of work because of a labor dispute.

We have again examined the Hodson decision in some detail. The construction placed upon the statute in that case is deemed clear, unambiguous and reasonable. The decision was rendered in 1961 and although the Legislature has convened at least three times since that time, it has not amended the subsection construed in Hod-son. In the present case, as in Hodson, the basic disqualification no longer existed after claimants were refused work because no jobs were available, and there is no necessity to resort to the exceptions or escape clauses set forth in subsection (d).

The judgment of the Court of Civil Appeals is reversed and that of the trial court affirmed.


author: CALVERT, Justice.

text:
    TEXAS HIGHWAY DEPARTMENT, Petitioner, v. Eldridge JARRELL, Respondent.
    No. B-66.
    Supreme Court of Texas.
    July 19, 1967.
    Rehearing Denied Oct. 4, 1967.

      Crawford C. Martin, Atty. Gen., Malcolm L. Quick and James C. McCoy, Asst. Attys. Gen., Austin, for petitioner.
    Flanary & Bailey, C. V. Flanary, Jr., Paris, for respondent.
   CALVERT, Justice.

This cause originated in a suit by respondent, Eldridge Jarrell, against his former employer, the Texas Highway Department, petitioner, to set aside a Workmen’s Compensation settlement agreement on grounds of fraud. The trial court, with a jury, entered judgment setting aside the settlement agreement. The court of civil appeals has affirmed. 408 S.W.2d 957. We affirm.

Jarrell was first granted permission to sue the State by Senate Concurrent Resolution No. 53, which was silent as to venue. See Acts 58th Leg., R.S.1963, p. 1717. Pursuant thereto, Jarrell’s first suit, Cause No. 6097, was filed on July 3, 1963, in the 62d District Court of Delta County, Texas.

The Texas Highway Department filed a plea of privilege contending that, as a state agency maintaining its principal place of business in Austin, Travis County, Texas, it was entitled to be sued in that county. The trial court overruled the plea of privilege ; but on May 5, 1964, the court of civil appeals reversed and ordered Cause No. 6097 transferred to a district court of Travis County. Texas Highway Dep’t v. Jar-rell, 379 S.W.2d 417 (Tex.Civ.App. — Tex-arkana 1964, writ dism’d w. o. j.). The transfer was effected.

On April 22, 1965, Jarrell again was granted permission to sue the State, in this instance by Senate Concurrent Resolution No. 27. See Acts 59th Leg., R.S. 1965, p. 1986. Unlike the earlier resolution which was silent as to venue, Resolution No. 27 placed venue in Delta County. Again Jar-rell filed suit in Delta County; this action, designated as Cause No. 7064, involved the same parties and subject matter as Cause No. 6097.

On September 9, 1965, the Texas Highway Department filed a plea in abatement and a general denial in Cause No. 7064. Abatement was sought on the ground that Cause No. 6097 constituted a prior pending action involving the same controversy. On January 10, 1966, Jarrell took a non-suit in Cause No. 6097. On February 2, 1966, the Texas Highway Department filed a second plea in abatement in Cause No. 7064. In this plea, abatement was sought on the grounds that the final judgment as to venue in Cause No. 6097 was conclusive as to venue in Cause No. 7064, and the provision of Resolution No. 27 attempting to place venue in Delta County was an unconstitutional invasion of judicial authority and was null and void.

On March 31, 1966, the plea in abatement was overruled, and Cause No. 7064 was called for trial. Pursuant to the jury’s answers to special issues, the court entered judgment setting aside the settlement agreement.

The Texas Highway Department’s single point of error in the court of civil appeals was that the trial court erred in overruling its plea in abatement. In sustaining the judgment of the trial court, the court of civil appeals held that the State expressly waived its venue right by agreeing in Resolution No. 27 to be sued in Delta County.

Texas Highway Department contends first that the final judgment of the court of civil appeals sustaining petitioner’s plea of privilege in Cause No. 6097 is res judicata with respect to the venue of this cause; that the trial court was, therefore, without jurisdiction to proceed to trial in Delta County, and the cause should be remanded to Travis County for trial on the merits.

We observe that a plea of res judicata is not a plea in abatement or a plea to the jurisdiction, but is a plea in bar. 34 Tex.Jur.2d, Judgments § 450. The three pleas have different objectives, and different consequences flow from their sustention. As applied to a pending claim for relief or cause of action, a plea to the jurisdiction, if sustained, would require a dismissal; a plea in abatement, if sustained, would require an abatement of the claim or cause of action until some obstacle to its further prosecution was removed, Life Ass’n of America v. Goode, 71 Tex. 90, 8 S.W. 639, at 640; and a plea in bar, if sustained, would require a judgment that the claimant take nothing. Kelley v. Bluff Creek Oil Co., 158 Tex. 180, 309 S.W.2d 208, at 214.

We attach no controlling effect to petitioner’s erroneous styling of its plea of res judicata, and we treat the plea as a plea in bar. See Rule 71, Texas Rules of Civil Procedure. But petitioner seems also to have misconceived the posture of the case when the plea was filed. The plea of res judicata was directed only to an issue of venue, and petitioner had not raised an issue of proper venue by a plea of privilege as is required by Rule 86, Texas Rules of Civil Procedure. If petitioner had filed a plea of privilege and respondent had filed a controverting affidavit, proper venue of this cause would have been placed in issue, and petitioner’s plea that the judgment in Cause No. 6097 was res judicata of respondent’s right to maintain venue in Delta County would have been in order. The plea if sustained, would have resulted in barring the right of respondent to assert that venue of this cause was properly laid in Delta County, and in automatic transfer of the cause to Travis County. Such was the course taken by the defendant in Murphy v. India Tire & Rubber Co., 27 S.W.2d 1110 (Tex.Civ.App.—Dallas 1930, no writ) on which respondent relies so heavily. Such also was the course taken by the defendants in a number of other cases in which our courts have held pleas of res judicata good on the issue of venue. See Tempelmeyer v. Blackburn, 141 Tex. 600, 175 S.W.2d 222 (1943); Southwestern Inv. Co. v. Gibson, 372 S.W.2d 754 (Tex.Civ.App.—Fort Worth 1963, no writ); Dearing v. Morgan, 120 S.W.2d 555 (Tex.Civ.App.—Fort Worth 1938, no writ); Landa v. Bogle, 62 S.W.2d 579 (Tex.Civ. App.—San Antonio 1933), rev’d on other grounds, 127 Tex. 317, 94 S.W.2d 154 (1936); Williams v. City of Dallas, 52 S.W.2d 373 (Tex.Civ.App.—Fort Worth 1932, no writ); Carter v. Calhoun, 6 S.W.2d 191 (Tex.Civ.App.—Beaumont 1928, no writ); Deatherage v. Kerrigan, 294 S.W. 698 (Tex.Civ.App.—Amarillo 1927, writ ref’d) ; Jacobson v. Berwick, 289 S.W. 1035 (Tex.Civ.App.—Beaumont 1926, no writ); Old v. Clark, 271 S.W. 183 (Tex.Civ.App.—Dallas 1925, no writ); Dallas Joint-Stock Land Bank v. Webb, 48 S.W.2d 434 (Tex.Civ.App.—San Antonio 1932, writ dism’d).

Much of what has been said with respect to the plea of res judicata is also applicable to the pleading that the provision of Resolution No. 27 placing venue in Delta County is unconstitutional and null and void. That fact, if it be one, did not constitute a sound ground for a plea to the jurisdiction of the court or to abate the cause. At most it was but a reason why the provision could not be relied upon to defeat petitioner’s right to have the cause transferred to Travis County upon timely filing of a plea of privilege.

Venue cannot be put in issue by pleas to the jurisdiction, pleas in bar, or pleas in abatement, but only by a plea of privilege. See Lanier v. Looney, 2 S.W.2d 347 (Tex.Civ.App. — Dallas 1928, writ ref’d). We disapprove Richardson v. Mohon, 157 S.W.2d 655 (Tex.Civ.App. — Fort Worth 1941, no writ) and Roach v. Trinity Universal Ins. Co., 119 S.W.2d 127 (Tex.Civ. App. — Texarkana 1938, no writ) in so far as they hold to the contrary. By failing to file a plea of privilege, petitioner waived its right, if any it had, to have the case transferred to Travis County. O’Neal v. Texas Bank & Trust Co., 118 Tex. 133, 11 S.W.2d 791 (1929). The plea in bar was properly overruled.

The judgment of the court of civil appeals is affirmed.


author: POPE, Justice. GREENHILL, Justice.

text:
    S & H SUPPLY COMPANY, Inc., Petitioner, v. John M. HAMILTON et al., Respondents.
    No. B-25.
    Supreme Court of Texas.
    July 26, 1967.
    Rehearing Denied Oct. 4, 1967.

      Thompson, Coe, Cousins & Irons, Larry L. Gollaher, Sanders & Nolan, Virgil Sanders, Dallas, for petitioner.
    Andress, Woodgate, Richards & Condos, William Andress, Jr., Dallas, for respondents.
   POPE, Justice.

S & H Supply Company, Inc., sued John Hamilton and W. N. Craig on a promissory note they executed for the principal sum of $7,500.00. Hamilton and Craig’s defense was that there was a failure of consideration for their note. The trial court, without the intervention of a jury, found there was no failure of consideration and rendered judgment for plaintiff. The court of civil appeals reversed that judgment and rendered judgment for the defendant. 408 S.W.2d 773. We reverse the judgment of the intermediate court and affirm that of the trial court.

On May 1, 1964, Hamilton and Craig executed a note to J.T.R. Plumbing Co. as payee, payable in two equal installments, one to become due on August 1, 1964, and the other on November 1, 1964. The makers defaulted on the first installment and in September, after the default, J.T.R. Plumbing Co. assigned the note to S & H Supply Company to whom it was indebted. Plaintiff concedes that it is not a holder in due course and that it took the note subject to any defenses available against the original payee. The issue in the case is thus reduced to the single question: Was there a failure of consideration for the note that Hamilton and Craig executed and delivered to J.T.R. Plumbing Co., the original payee?

In the early part of 1963, J.T.R. Plumbing Co. contracted with Lewis C. Krodell to install the plumbing in an apartment Kro-dell was erecting in Dallas. J.T.R. Plumbing Co. completed its work in December of 1963, at which time Krodell still owed a balance of $11,300.00. Krodell in the meantime had run into financial difficulties and owed a number of other bills including one to the creditor who had furnished the interim financing.

Krodell on April 9, 1964, entered into a contract with Hamilton and Craig which in general provided that Krodell would transfer the apartment to them, and they would assume the debts arising out of the construction of the apartment. The contract contained an itemized list of debts Hamilton and Craig agreed to assume. J.T.R. Plumbing Co.’s debt was included in the list.

Hamilton and Craig, soon after they made their contract with Krodell, in order to protect their contract, put their own manager in charge of the apartment which was already occupied by tenants. It is apparent from the record that Krodell was unable to pay his bills, and it was imperative that Hamilton and Craig take prompt action to maintain the apartment’s operations and satisfy the creditors. Their manager collected the rents, paid the operating expenses, and applied the rental income upon the mortgage payments. Krodell was not thereafter in possession of the property.

The creditor who provided the interim financing had to be paid. Krodell had made arrangements for permanent financing, and the transaction was scheduled for closing on or about May 1, 1964. The mortgagee required proof that all construction bills were paid. The necessity of furnishing the proof, as well as the obligation of the contract with Krodell, compelled Hamilton and Craig to deal directly with the creditors. J.T.R. Plumbing Co.’s debt was due and unpaid. Under these circumstances Hamilton and Craig paid J.T.R. Plumbing Co. $3,-800.00 by check and on the same day executed and delivered the installment note payable to J.T.R. Plumbing Co. These steps were necessary before Hamilton and Craig could deliver to the closing agent for the mortgagee their affidavit that all bills were paid. Upon the execution of the note, they on May 1, 1964, signed an affidavit which stated:

“The undersigned, being first duly sworn, declare that they have recently erected certain improvements on all of Lots 6, 7, 8 and 9, in Block 2/692 of Monarch Place Addition to the City of Dallas, Texas, and that all labor and materials used in the construction of said improvements have been paid for in full and there are no outstanding bills or claims for such labor or materials.”

Hamilton and Craig’s manager therafter remained in possession of the apartment and continued to pay the bills and debts to the extent that funds were available. He was still in possession of the apartment at the time this suit was filed on October 21, 1964. The income from the apartment proved insufficient to discharge the debts and also make the payments to the mortgagee. The mortgagee later foreclosed the property.

Hamilton and Craig urged that the consideration for the note they made to J.T.R. Plumbing Co. failed because Krodell never delivered to them a deed to the apartment. Plaintiff did not seek recovery as a third party beneficiary. Plaintiff alleged an action upon a promissory note and tried its case in the trial court upon that theory. The findings of the trial court fully supported plaintiff’s theory of action upon the note as an original undertaking.

There was new consideration for the note upon which the plaintiff sued. Hamilton and Craig, by their contract with Krodell, became obligated to pay certain debts of Krodell including the delinquent debt owing to J.T.R. Plumbing Co. Hamilton and Craig were also faced with a May 1, 1964, deadline to supply an affidavit that all the debts arising out of the construction of the apartment had been paid. Such an affidavit was essential to the closing of the transaction for the permanent loan. Hamilton and Craig needed additional time and they also needed to make arrangements with J.T.R. Plumbing Co., which would entitle them to make the required affidavit that all of the construction debts were paid. For the additional time they needed, they were willing to pay six per cent interest. J.T.R. Plumbing Co. was willing to forego its right to an immediate suit for its delinquent claim and did so by accepting some cash and the note from Hamilton and Craig payable in future installments three and six months later.

The evidence supports the trial court’s findings that the note sued upon was supported by new consideration which did not fail. Shaw v. McShane, 50 S.W.2d 278 (Tex.Com.App. 1932); Benson v. Phipps, 87 Tex. 578, 29 S.W. 1061 (1895); Schwarz v. Straus-Frank Company, 382 S.W.2d 176 (Tex.Civ.App. 1964, writ ref. n.r.e.); 39 Am.Jur., Novation, § 22; 9 Tex. Jur.2d, Bills and Notes, § 12. In Benson v. Phipps, supra, this court held that a similar arrangement constituted consideration, saying:

“ * * * But a promise to do what one is not bound to do, or to forbear what one is not bound to forbear, is a good consideration for a contract. In case of a debt, which bears interest either by convention or by operation of law, when an extension for a definite period is agreed upon by the parties thereto, the contract is that the creditor will forbear suit during the time of the extension, and the debtor foregoes his right to pay the debt before the end of that time. The latter secures the benefit of the forbearance ; he former secures an interest bearing investment for a definite period of time. One gives up his right to sue for a period, in consideration of a promise to pay interest during the whole of the time; the other relinquishes his right to pay during the same period, in consideration of the promise of forbearance. To the question why this is not a contract, we think no satisfactory answer can be given. It seems to us it would be a binding contract, even if the agreement were that the debt should be extended at a reduced rate of interest * *

The contention that Krodell may have breached his contract with Hamilton and Craig in failing to deliver the deed to the apartment is immaterial to the cause of action upon which the holder of the note sued. The judgment of the court of civil appeals is reversed and that of the trial court is affirmed.

DISSENTING OPINION

GREENHILL, Justice.

It is my opinion that there was a failure of consideration for the note given by Hamilton and Craig when Krodell refused to deliver a deed to the apartment house. There was a failure of consideration for the original assumption agreement, and the note in question was part of that agreement.

Since the majority does not discuss the merits of the defense of failure of consideration, I will set out the reasons why there was a failure of consideration for Hamilton’s and Craig’s promise to assume Kro-dell’s debts. When a defendant asserts the defense of failure of consideration to an action on a contract, he is saying that he has not been given the performance for which he bargained and that such performance is a condition precedent to his own duty to perform. Corbin on Contracts, §§ 133, 658 and 1255-1263 (1964 Ed.). In a contract for the sale of land, the promises of the vendor to convey and of the vendee to pay, in the absence of a contrary intent, are regarded as mutual and dependent, each performance being conditioned on tender of performance or performance by the other party. Clifton v. Charles, 53 Tex.Civ.App. 448, 116 S.W. 120 (1909, writ refused); Echols v. Miller, 218 S.W. 48 (Tex. Civ.App.1920, no writ); Reitzer v. Med-lake Development Co., 27 S.W.2d 563 (Tex.Civ.App.1930, no writ); Corbin on Contracts, § 663 (1964 Ed.). It may be assumed that Hamilton and Craig were obligated to pay Krodell’s debts as they came due; and that if they had not done so, they would have breached their promise to Krodell. That does not mean, however, that Hamilton and Craig were obligated to continue paying the debts regardless of Krodell’s actions. Though one party to a contract may be obligated to begin performance immediately, his promise in that sense being independent, he is not obligated to continue performance when the other party has refused to perform. The duty of the first party to continue his performance is conditioned on the latter party’s willingness and ability to perform. Corbin on Contracts, §§ 657, 1259 (1964 Ed.). Willis-ton on Contracts, § 814 (1936 Ed.).

The contract involved in this case is bilateral. Hamilton and Craig promised to assume Krodell’s debts in return for Kro-dell’s promise to convey his interest in the apartment house. Hamilton and Craig began performance of their obligation by paying Krodell’s debts. Their duty to continue that performance was conditioned upon Krodell’s willingness to convey title to the apartment house. The only evidence in this record concerning Krodell’s willingness to perform is that he refused to deliver the deed to Hamilton and Craig. When Kro-dell made such refusal, there was a failure of consideration; and Hamilton and Craig were discharged from their duty to pay Krodell’s debts.

The majority opinion suggested that S & H did not rely upon Rose’s status as a third party beneficiary of the assumption agreement between Hamilton, Craig and Krodell. One of the main points of error of S & H in this Court states “The Court of Civil Appeals erred in failing to hold that Krodell’s purported failure to convey [his title to the apartments] could not constitute a defense to Petitioner’s third party beneficiary rights. * * * ” In support of such point, S & H devotes several pages of its brief to a discussion of its rights as a third party beneficiary as the assignee of Rose. I therefore regard the matter as being before the Court and as being important to a correct disposition of the case.

Rose, as a third party beneficiary of the contract between Hamilton, Craig and Kro-dell, would have had no greater rights under the assumption agreement than Krodell against Hamilton and Craig. Austin Bridge Co. v. Teague, 137 Tex. 119, 152 S.W.2d 1091 (1941); Restatement of Contracts, § 140. Furthermore, Rose, being payee of the note, was not a holder in due course, and, therefore, was subject to all defenses against the note. J. I. Case Threshing Machine Co. v. Howth, 116 Tex. 434, 293 S.W. 800 (1927).

The majority of this Court holds, however, that the note given by Hamilton and Craig, because supported by an independent consideration, was a contract separate and apart from the original assumption agreement; and, therefore, not subject to the defenses available to Hamilton and Craig against an action on the original assumption agreement. I will assume that there was an additional consideration given by Rose which would ordinarily be sufficient to support the note against the defense of want of consideration. But the defense in this case is not want of consideration; it is failure of consideration, Hamilton and Craig simply did not receive the performance for which they bargained when they contracted the debt and gave the note. The note was a small part of a large transaction. There is no contention by S & H that the note was given by Hamilton and Craig solely as payment for the extension of time. In fact, in its brief S & H states that “[i]t is undisputed that the Hamilton and Craig note delivered to Rose grew out of and was in conformance with the * * assumption agreement.” The note in this case was simply evidence of Hamilton’s and Craig’s original debt to Rose. Rose could not have recovered on the debt. An action on the note should fare no better.

I would affirm the judgment of the Court of Civil Appeals.

SMITH, J., joins in this dissent.