author: McDONALD, Chief Justice.

text:
    METHODIST RIVER OAKS APARTMENTS, INC., Appellant, v. The CITY OF WACO et al., Appellees.
    No. 4542.
    Court of Civil Appeals of Texas. Waco.
    Nov. 17, 1966.
    Rehearing Denied Dec. 15, 1966.
    Beard, Kultgen & Beard, Waco, for appellant. °
    V. H. McClintock, Thomas R. Hunter, City Atty., Earl Bracken, Jr., John Houston, Don J. Rorschach, Asst. City Attys., Waco, for appellees.
   OPINION

McDONALD, Chief Justice.

This is an appeal from a judgment denying Methodist River Oaks Apartments, Inc. exemption from the payment of ad valorem taxes upon its property.

Methodist brought suit for a declaratory judgment that its apartments located in the City of Waco and LaVega School District be exempted from ad valorem taxes, on the ground that the Constitution and laws of Texas exempt from ad valorem taxes, properties of purely public charities, which are devoted to charitable purposes. Trial was before the court without a jury which, after hearing, entered judgment denying Methodist tax exemption as a charitable organization.

Methodist appeals on four points, contending the trial court erred in holding that its apartment complex was subject to ad valorem taxes.

Methodist is a non-profit corporation organized under the laws of Texas “to provide dwelling accommodations for families displaced from urban renewal areas,” “and to assist further the provision of housing for moderate and low income families.” It was formed by 4 negro Methodist churches. The members of the corporation are chosen by the churches which organized it; and no officer or member of the corporation has ever profited from its operation. The apartment complex contains 152 units; is a first-class facility; and is integrated. The units rent for $72.50 and $76.50 per month; one apartment has been furnished a tenant at a reduced rental, but no apartment has been provided rent free. The apartments are 79% occupied; are advertised in both Waco telephone book and in newspapers; are centrally air conditioned and heated; have 30 inch range; Venetian blinds; prompt maintenance; central TV antenna; and 11.8 cubic foot refrigerators.

Other housing is available in Waco. In 1960 there were 2,036 vacant housing units in Waco. Maxey Apartments are operated by Public Housing Authority and rented for $23 to $71 per month and have 90% occupancy. Private Housing is available in the area of Methodist at $50 per month.

Article 8, Section 2 of the Texas Constitution, Vernon’s Ann.St., provides: “* * * the legislature may, by general laws, exempt from taxation property used for public purposes * *

And Article 7150 Vernon’s Ann.Tex. Civ. St. provides:

“The following property shall be exempt from taxation: * * * 7.. Public charities. — All buildings belonging to institutions of purely public charity, together with the lands belonging to and occupied by such institutions not leased or otherwise used with a view to profit, * *

Exemptions from taxation are never favored, and in construing laws exempting any organization, all doubts are resolved against the exemption. Morris v. Lone Star Chapter No. 6, Royal Arch Masons, 68 Tex. 698, 5 S.W. 519; Santa Rosa Infirmary v. City of San Antonio, Tex.Com.App., 259 S.W. 926.

Whether an organization is a “purely charitable institution” so as to entitle its property to tax exemption is a question of fact; and the burden is on the organization claiming exemption from taxation to clearly prove it. Benevolent & Protective Order of Elks, etc. v. City of Houston, Tex.Civ.App., Er. Ref., 44 S.W.2d 488; Malone-Hogan Hosp., etc. v. City of Big Spring, Tex.Civ.App., (nre), 288 S.W.2d 550.

An organization is not an “institution of purely public charity” within the constitutional and statutory tax exemption, unless the organization: 1) makes no gain or profit; 2) accomplishes ends wholly benevolent; 3) benefits persons, indefinite in numbers and in personalities, by preventing them, through absolute gratuity, from becoming burdens to society and to the State. City of Houston v. Scottish Rite, 111 Tex. 191, 230 S.W. 978; River Oaks Garden Club v. City of Houston, Sup.Ct., 370 S.W.2d 851.

In River Oaks, supra, the court says:

“ ‘One ground upon which exemptions from taxation of charitable institutions * * * can be justified * * * is that they minister to human and social needs which the state itself might and does to a greater or less extent undertake to satisfy. The ultimate obligation of the state thus is discharged by the private charity. To that extent the state is relieved of its burden. * * *

Applying the rules of law to the factual situation here involved, we think the trial court correctly denied Methodist tax exemption as a purely public charity.

Methodist does not alleviate suffering caused by inadequate housing, and it provides no service which the State would be obligated to assume. The record reflects many other sources of adequate housing at rates below those charged by Methodist. And if a family does not live in centrally air conditioned and heated housing, renting for $72.50 to $76.50 per month with 30 inch range, Venetian blinds, prompt maintenance, centrally located TV antenna, and an 11.8 foot refrigerator, such family will not necessarily, under the record here, become an obligation of the community or State.

All appellant’s points and contentions are overruled. The judgment is correct Affirmed.


source: Caselaw Access Project

author: COLEMAN, Justice.

license: Public Domain

text:
    Herbert M. BEAZLEY et al., Appellants, v. Nowlin RANDOLPH et al., Appellees.
    No. 14921.
    Court of Civil Appeals of Texas. Houston.
    Dec. 8, 1966.
    Rehearing Denied Dec. 22, 1966.
    Joseph D. Jamail and John Gano, Houston, for appellants.
    Herbert M. Beazley, Houston, pro se, and as attorney for Mrs. Mary Gaillard, Julia Beazley, Rosadele Beazley, Hamilton Beazley, Sr., Hamilton Beazley, Jr., and Herbert M. Beazley.
    Branscomb, Gary, Thomasson & Hall, Harry L. Marks, Corpus Christi, for Jack Modesett, Jr., Nan Modesett Morgan and Fred Morgan.
    Nowlin Randolph, Houston, pro se.
    Rolland Bradley, Houston, pro se.
   COLEMAN, Justice.

This was a suit for the partition of real estate brought by appellee, Nowlin Randolph, against appellee, Rolland Bradley and various appellants. The trial court entered a judgment designated “An Agreed Order of Partition” and this appeal followed.

There has been no trial on the merits of this cause. During a pre-trial hearing, the parties reached an agreement on a tentative settlement of the case subject to the approval of one of the parties. Mr. Randolph and Mr. Bradley agreed to accept in joint ownership 14¼ acres off of the south end of a 59½ acre tract of land “to be surveyed” by a named surveyor. An agreed judgment was prepared and submitted to the parties for approval. During the course of a hearing for another purpose, the trial court learned of the failure of the settlement and that none of the parties objected to the terms of the “Agreed Order of Partition” with the exception of the provision for having a survey made after the judgment was entered. The trial court ascertained that Mr. Randolph and Mr. Bradley had no objections to the terms of the judgment. He then asked Mr. Beazley what his objection was and was told that he and his clients objected to the entry of the judgment before the survey was made. Thereupon the trial court, without the suggestion or request of anybody, signed the judgment “because it embodied the agreement of the parties”.

The trial court found as a fact that “the provision for the appointment of a surveyor is exactly in accordance with the agreement made in my office * * *, said provision having been included in the original agreement at my office at my suggestion.”

Although the parties to a lawsuit have' agreed on all of the terms of a settlement, the trial court is not authorized to sign a judgment as an agreed order without a trial on the merits when at the time the judgment is signed the judge knows that one of the parties objects to his signing and entering the judgment. Burnaman v. Heaton, 150 Tex. 333, 240 S.W.2d 288 (1951); Wyss v. Bookman, 235 S.W. 567 (Tex.Com.App.1921); Fernandez v. Villarreal, 388 S.W.2d 766 (Tex.Civ.App., San Antonio 1965, no writ hist.).

Appellants contend that this case is distinguished from Burnaman v. Heaton, supra, in that here the judgment entered was one enforcing a contract of settlement. They cite Gilliam v. Alford, 69 Tex. 267, 6 S.W. 757; J. Kahn & Co. v. Clark, 5 Cir., 178 F.2d 111; Irwin v. Huey, Tex.Civ.App., 23 S.W. 324; Ward v. Wilson, 92 Tex. 22, 45 S.W. 8; Milner v. Schaefer, Tex.Civ.App., 211 S.W.2d 600, and other cases.

This is a direct appeal from the judgment. There was no pleading that a compromise settlement had been agreed upon and no prayer that it be enforced. Issue was not joined on this question. It is evident from the record that there was no trial on the merits and that the parties did not agree that the judgment be entered. The trial court erred in entering the judgment. Ward v. Wilson, supra; Burnaman v. Heaton, supra; Glenn v. Nelis, 400 S.W.2d 395 (Tex.Civ.App., Houston 1966, no writ hist.).

The judgment is reversed and the cause is remanded to the trial court.


author: TOWNSEND, Commissioner.

text:
    HENGES COMPANY, Inc., a Corporation, Plaintiff, v. DOCTORS’ NORTH-ROADS BUILDING, INC., a Corporation et al., Defendants-Respondents. Eric W. SMITH, Jr., and Robert Entzeroth, a Partnership, doing business as Smith & Entzeroth, Defendants-Cross Claimants-Appellants, v. ST. LOUIS COUNTY NATIONAL BANK and Dalton W. Schreiber, Trustee, Defendants-Respondents.
    No. 32390.
    St. Louis Court of Appeals. Missouri.
    Nov. 15, 1966.
    Motion for Rehearing and for Transfer to Supreme Court Denied Dec. 12, 1966.

      Tremayne, Joaquin, Lay & Carr, Clayton, for defendants-cross claimants-appellants.
    Dubail, Judge & Kilker, St. Louis, for defendant-respondent Doctors’ North-Roads Bldg., Inc.
    Rader & Love, Clayton, for defendants-respondents St. Louis County Nat. Bank and another.
   TOWNSEND, Commissioner.

This equity proceeding was instituted by Henges Company, Inc. in accordance with the terms of Section 429.270 V.A.M.S. for the purpose of marshalling mechanics’, liens and other encumbrances on an office building owned by defendant Doctors’ North-Roads Building, Inc. Joined as parties defendant, in addition to the owner, were four mechanics’ lien claimants who had filed their respective statutory notices of lien and two mortgagees. After the equity suit was started one of the mortgagees, St. Louis County National Bank, hereinafter referred to simply as “Bank”, foreclosed its mortgage and at the trustee’s sale purchased the property in question. Among the mechanics’ lien claimants joined as defendants were the partners, Smith and Entzeroth, architects, who in due course filed their answer and a cross-bill. Subsequently the plaintiff and all mechanics’ lien claimants who were joined as defendants, other than Smith and Entzeroth, settled their claims with the Bank and so pass from the scene. The record is devoid of any evidence as to the purchase price of the building at the foreclosure sale.

At the trial on the cross-bill the court held that the mechanic’s lien statute was not intended by the Legislature to confer mechanic’s lien rights upon one furnishing the services of an architect. The court’s decree adjudged that the owner was indebted to the appellants in the sum of $18,-087.69 and gave no other relief The architects appeal from the denial of their lien claim.

On April 1, 1958, the architects, appellants herein, entered into a contract “with Doctors’ North-Roads Building, Incorporated” for the performance of their professional services, using the standard form of the American Institute of Architects. The services to be performed consisted of “the necessary conferences, the preparation of preliminary studies, working drawings, specifications, large scale and full size detail drawings, for architectural, structural, plumbing, heating, electrical, and other mechanical work; assistance in the drafting of forms of proposals and contracts; the issuance of certificates of payment; the keeping of accounts, the general administration of the business and supervision of the Work.” For these services the owner agreed to pay the architects a fee of six per cent of the “cost of the Work, * * * the said percentage being hereinafter called the Basic Rate”.

Prior to the execution of the contract of April 1, 1958 the architects had prepared for the promoters of the corporation schematic designs for feasibility studies. After execution of the contract the architects refined the schematic drawings and prepared other preliminary drawings which were put in booklet form; they prepared detailed cost estimates for the construction of the building; working drawings and specifications for the job followed. The specifications encompassed sixty-three pages for construction of the building and thirteen pages for the elevators. In addition ninety-two pages were devoted to plumbing, heating, ventilating, air conditioning and electrical specifications. Following the completion of the working drawings and specifications the architects furnished the same to prospective bidders and on December 7, 1958, received the bids of various general contractors and sub-contractors.

The construction contract between the owner and the general overall contracting company was executed on December 15, 1958.

The owner’s note for $500,000, payable to Bank, and the deed of trust securing the same were executed on December 30, 1958. On the same date an escrow and disbursing agreement was signed by the owner, the general contractor, the Bank and the Guaranty Land Title Company, escrowee, by the terms of which the approval of the architects was required on all bills prior to payment therefor being made out of the escrow fund.

The only Missouri case cited by the parties which involved the question of the lien-ability of architect’s services is Raeder v. Bensberg, 6 Mo.App. 445, decided in 1879; research has disclosed no other. That case held that an architect was not entitled to a mechanic’s lien on two grounds, first, that by application of the doctrine of ejusdem generis an architect was not included within the statutory description of “every mechanic or other person who shall do or perform any work or labor” and, second, that an architect performed no work or labor “upon” a building. We agree with appellants that, in the light of subsequently decided cases, the first ground of decision stated in the Raeder case can no longer stand; such cases have clearly shown that the general term, “other person”, is not limited to the class specifically designated, “mechanic”, or other persons like mechanics.

Appellants would find in cases cited to us parallels to the instant case in that in the cited cases the relative court allowed as part of the lien amount some items which appellants denominate supervision or superintendence or planning and engineering. We proceed to consider such cases.

In Fagan v. Brock Motor Car Co., Mo.App., 282 S.W. 135, the lien claimant contracted to install a heating system, for which he was to be paid the exact cost to him of the equipment plus twenty per cent, the overall cost not to exceed a named figure. It was held that the twenty per cent was includable in the amount of the claimant’s lien. In Tual v. Martin, 228 Mo.App. 30, 66 S.W.2d 969, the agreed contract price for the erection of a building was stated in terms of the cost of the materials to the contractor plus $1.00 per hour for the contractor’s own labor as a carpenter plus ten per cent; it was held that the lien covered the sum total of the recited elements. It is to be noted that in each of these cases the contract was fully performed by the contractor, that in each case the claimant furnished the materials which went into the structure and that the lien amount was held to be properly computed at the precise contract amount.

In contrast to the last two cases, the claim of lien in Fuhler v. Gohman & Levine Construction Co., 346 Mo. 588, 142 S.W.2d 482, and in Leach v. Bopp, 223 Mo.App. 254, 12 S.W.2d 512, was based not on a contracted price but upon quantum meruit —the reasonable value of work and labor. In the Fuhler case, the claim of lien set out various items of services which the claimant furnished through sub-contractors or employees and stated a certain value for each; to the sum total of such values the claimant added ten per cent for overhead and ten per cent for profit “over actual cost”. The ten per cent additions were held properly included in the total amount of lien claim. The same situation existed in the Leach case. In each of these cases the claimant was responsible for the furnishing of labor to the structure through sub-contractors or employees, did furnish labor for the structure in this manner and in the course of doing so devoted his own personal attention to the superintendence of the subcontractors and employees in the course of their performing their jobs, thereby contributing his own efforts in the course of construction. Since, in the four cases cited, the relative court approved the added percentages, and in doing so, sometimes approved the term, “overhead”, and sometimes “superintendence” and sometimes “profit”, the appellants would find authority for their proposition that the trial court erred in concluding that Chapter 429 of the statutes “is not intended by the legislature to include the services of an architect”. We find no parallelism between the cited cases and the present one; the cases are so different factually that they cannot be said to be made comparable by the fact that the claims allowed included some compensation for superintendence. In the instant case the architects furnished no materials; they were under no contractual duty to furnish any and in connection therewith to supervise their installation. Neither did they furnish the labor of others upon the building; they were under no obligation to furnish such labor of others and to oversee the proper performance of duty by such others. The cited cases cannot be regarded as relevant to our present problem, for in each of them the claimant satisfied the statutory requirement of performing “any work or labor upon, or furnish any material * * * for any building, erection or improvements upon land * * * ”; in them the superintendence factor is pertinent only to the problem of determining the contract price or the reasonable value of the labor or materials so furnished.

The argument of counsel intermingles the preparation of plans and specifications with the architect’s supervision of construction as the building goes up as if this combination constituted one unitary whole, thereby giving a lien for the full contract fee. Such comprehensive concept would thereby give a lump sum lien overall for work done in connection with construction and for work done long before construction started. It is our opinion that proper analysis requires the separate consideration of these elements. Cf. Edgar v. Salisbury, 17 Mo. 271. Consideration is given first to the question of the lien-ability of fees for plans and specifications. It is contended that the statutory term “other person” includes anyone who contributes to the form, shape and structure of the overall project, that the architect’s services are directly related — and necessary — to the progress of the subsequent erection of the building and that the true test of lienability is whether or not the services are a direct and integral part of the overall construction plan for the building. The difficulty with this position is that the statute, neither directly, nor by implication, speaks in such terms. The statute does not give a lien for the exercise of professional thinking, no matter how meritorious; it does not reward with a priority digital or graphic competence or even mathematical genius. It deals with specifics; it enumerates the bases upon which a lien may he established. The preparation of plans and specifications, no matter how laborious or brilliant, does not fall within either of the categorical bases statutorily prescribed.

For generations it has been the rule in the courts of Missouri that the mechanic’s lien statute is to be liberally construed in order to effectuate the beneficent purposes for which the statute was adopted. Expression of this rule of construction will be found in Raeder v. Bensberg, supra. The reported cases give convincing evidence that, in subsequent proceedings, the appellate courts have fully honored the precept of liberal construction. And yet situations do arise where even the utmost liberality of attitude could not lead one to the conclusion that the requirements of the statute had been satisfied, e. g., see Tallman Co. v. Villmer, Mo.App., 133 S.W.2d 1085; McGuinn v. Federated Mines & Milling Co., 160 Mo.App. 28, 141 S.W. 467; Putnam v. Heathman, Mo.App., 367 S.W.2d 823. Those cases which have been most generous in awarding the lien involved what would seem to be the irreducible minimum to bring a claim within the scope of the statute, namely, that the services (labor) rendered had a physical connection with the land. Nothing of that nature is found in the claim for fees for the preparation of plans and specifications. In any event, if the words of the statute— “perform any work or labor upon * * * any building” — are to be accorded any respect, we suggest the possibility that the limits of liberal construction may have been reached in Arthur Morgan Trucking Co. v. Shartzer, supra, and Ladue Contracting Co. v. Land Development Co., supra.

Appellants maintain that, even if no lien is allowable for their services in drawing plans and specifications, a lien does lie for supervision of construction. This contention necessitates consideration of the contract of the architects with the owner. That document provides that the owner will pay the architects “a fee of six per cent of the cost of the Work”. The services to be performed by the architects have been previously enumerated. The detailed provisions for payment of architect’s fee follow:

“PAYMENTS. — Payments to the Architect on account of his fee shall be made as follows, subject to the provisions of Article 4:
Upon completion of the preliminary studies, a sum equal to 25% of the basic rate computed upon a reasonable estimated cost.
During the period of preparation of specifications and general working drawings monthly payments aggregating at the completion thereof a sum sufficient to increase payments to 75% of the rate or rates of commission arising from this agreement, computed upon a reasonable cost estimated on such completed specifications and drawings, or if bids have been received, then computed upon the lowest bona fide bid or bids.
From time to time during the execution of the work and in proportion to the amount of service rendered by the Architect, payments shall be made until the aggregate of all payments made on account of the fee under this Article, but not including any covered by the provisions of Article 4, shall be the sum equal to the rate or rates of commission arising from this agreement, computed upon the final cost of the Work”.

The appellants construe these provisions to mean that 25% of their total fee (or 1½% of the cost of the work) was for supervision of construction. This presents immediately a problem of contract construction. The basic promise of the owner is to pay “the Architect for such [enumerated] services a fee of six per cent.” This basic promise is not broken down into a commitment to pay a certain per cent of cost for plans and a certain other per cent for supervision. In other words the promise is unitary in character — a certain overall single total amount in exchange for all the services to be performed by the architect. When we inspect the clauses headed “payments”, we find that these provisions relate to times of payment of parts of the fee, without any specific allocation of any part of the fee to any part of the services. However appellants’ evidence shows that the statements which they rendered to the owner were prepared on the basis of allocating 75% of their fee to plans and specifications and 25% to supervision. Thus on December 5, 1958, appellants’ statement billed the owner for $22,812.75 as “Amount of fee due for preliminary architectural services, and for preparation of working drawings and specifications” and acknowledged prior payments thereon of $7,350. This billing carried the explanatory comment that the fee so billed was 4(4% of $506,950 (the original bid of the contractor) and stated further that “The final fee of 6% of the cost of the work will take into account all change orders affecting the total cost.” On January 19, 1959, appellants billed the owner for “4(4% of $485,-200 (the revised contracted cost of construction) $21,834.00” for preliminary services and preparation of working drawings and specifications and added $265.95 as “Amount of fee due for supervision to date — 1(4% of Estimate #1: $17,730”. Deducting payments previously made the statement shows a balance owing of $4287.-20.

Thereafter successive billings of April 17, 1959, May 4, 1959, June 2, 1959, July 13, 1959 and August 11, 1959 carried the separate item of “Amount due for supervision to date” and each such billing carried forward the above stated $4287.20 as “Balance due for working drawings and specifications”.

Beginning with appellants’ statement of September 11, 1959, a charge for accrued interest on unpaid balances is found in each statement thereafter rendered in October, November and December, 1959, and in January, February, April, June, October, November, 1960. The added interest charge had been agreed to in a conference between the promoters and appellant Smith, probably in September 1959. Separate charges for supervision were made in the monthly billings through February 1960. Thereafter appellants’ statements billed the “Amount due for architectural services and interest to” a stated date without separation for supervision.

It was stipulated by the parties that no objections to any of the statements were made on behalf of the owner. And during the course of appellant Smith’s testimony counsel put to him the question: “Mr. Smith, did any of the Weitzmans [promoters] or anybody else connected with Doctors’ North-Roads Building, Inc. complain to you about your bills?” to which the witness answered: “No, sir”. Appellants’brief states that “Smith & Entzeroth construed this contract to mean that the balance of the fee, one and one-half percent (1(4%) was for supervision and the bills were prepared accordingly. There was no evidence that the Owner placed any different meaning on the contract or that it objected in any manner to the billing. Thus a fee of one and one-half percent (1(4%) of the cost of the work, or Eight Thousand Dollars Fifty-Two Cents ($8000.52), was due for supervision.” This argument plainly addresses itself to any question which may be raised regarding the divisibility of the architects’ contract and amounts to a contention that if there be any doubt as to sever-ability the parties themselves have given a practical construction to that part relating to payments. Assuming for the moment that the architects’ contract was so made severable, that assumption naturally suggests the question of whether or not the performance of an original contract for architectural supervision alone of a general contractor’s construction, unrelated to the preparation of plans and specifications, would by itself give the architect a right to a mechanic’s lien. We do not purport to pass upon that question here; suffice it to say that the supervision so envisaged does not equate to the supervision which was found in the appellants’ cited cases of Fagan v. Brock Motor Car Co., Tual v. Martin, Leach v. Bopp and Fuhler v. Gohman & Levine Construction Co., supra.

We do not find that appellants have sustained the burden of showing the divisibility of their contract. First, the contract calls for a flat fee of six per cent, without attempting to apportion that fee among the different kinds of services to be rendered. In this respect such a contract is sometimes labelled entire. Then, the payment clauses of the contract call for monthly payments in unspecified amounts during the preparation of plans and specifications but here again there is no allocation of any part of the overall fee to a specific part of the services rendered. The requirement that by the time of completion of plans and specifications seventy-five per cent of the fee be paid appears to be only a time-of-payment clause without any implication that overall payment of that amount and the preparation of plans and specifications were agreed exchanges of performance. We cannot even deduce from mere time-of-payment clauses an implication that the parties placed upon supervisory services a value equal to one-third the value of the work in preparing plans and specifications. The practice of billing separately for supervision involved acts which were unilateral in character and we do not believe that any rule of practical construction by the parties is here applicable in view of the fact that the owner made no payments to the architects after the latter began the practice of so billing separately for supervision.

What results is a contract in which no specific amount or percentage of a promised total fee is designated as compensation for appellants’ services in supervision. Under these circumstances there is no contractual basis for the imposition of a lien for supervision alone.

On this trial de novo it is within the province of this Court to make its own findings of fact. However we find no reason to disturb the findings made by the trial court although one of its findings, objected to by appellants, was immaterial. We refer to the trial court’s finding (20) that appellants did not rely on the mechanic’s lien statute.

The trial court’s denial of a lien to appellants is approved. However we do not believe that the court’s conclusion of law that “Chapter 429 of the Missouri Revised Statutes relating to mechanic’s and materialmen and conferring mechanic’s lien rights upon such individuals is not intended by the legislature to include the services of an architect” should stand. The services of an architect may be many and varied. The consideration above given to the question of the divisibility of the architects’ contract in this case suggested that some types of architectural services might be found to satisfy the requirements of the lien statute and therefore it was intended to leave open the question of their lien-ability in particular cases. Left open is the question of whether or not a severable part of an architect’s contract in which a stated fee is promised to be paid as the agreed exchange for the architect’s supervisory services alone can bring the performance of such services within the purview of the mechanic’s lien statute. Necessarily left open is the same question where a contract provides only for an architect’s supervision of construction, unconnected with the furnishing of any other work or materials.

The holding that here there was no lien for supervision renders it unnecessary to consider appellants’ argument as to priorities among encumbrances. As to such an issue the pertinent statute would be Section 429.060 which would require clear evidence as to the time of “the commencement of such buildings or improvements.” In this connection Potwin State Bank v. J. B. Houston & Son Lumber Company (Ward) 183 Kan. 475, 327 P.2d 1091, and the annotation at 80 A.L.R.2d 179 will be found enlightening.

Judgment in favor of appellants against Doctors’ North-Roads Building, Inc. in the amount of $18,087.69 and costs should be affirmed.

PER CURIAM.

The foregoing opinion by TOWNSEND, C, is adopted as the opinion of this Court. Accordingly, judgment in favor of appellants against Doctors’ North-Roads Building, Inc. in the amount of $18,087.69 and costs is affirmed.

WOLFE, P. J., and ANDERSON and RUDDY, JJ., concur.

      . Appellants’ conclusion as to the “true test of lienability” is attempted to be derived from cases where the lien claimant had an actual physical connection with the land in question, a factor completely lacking in the architect’s preparation of plans and specifications. Arthur Morgan Trucking Co. v. Shartzer, 237 Mo.App. 535, 174 S.W.2d 226; Ladue Contracting Company v. Land Development Co., Mo.App., 337 S.W.2d 578; Vasquez v. Village Center, Inc., Mo., 362 S.W.2d 588.

      . The architects’ contractual duty of supervision was stated in these words:
      “7. Supervision of the Work. — The Architect will endeavor by general supervision to guard the Owner against defects and deficiencies in the work of contractors, but he does not guarantee the performance of their contracts. The general supervision of the Architect is to be distinguished from the continuous on-site inspection of a elerk-of-the-works.”
      There was no evidence relating to the appointment or functioning of a clerk-of-the-works.


author: WADDILL, Commissioner.

text:
    Frank RATLIFF, Appellant, v. Hattie RATLIFF, Appellee.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.
    V. R. Bentley, Pikeville, for appellant.
    Francis D. Burke, Pikeville, for appellee.
   WADDILL, Commissioner.

On this appeal from a judgment reforming a deed, appellant Frank Ratliff contends the trial judge erred in finding that the deed as recorded was fraudulent.

After the death of appellant’s father the real estate which he had owned was partitioned among his children.. The tract allotted to appellant was made subject to a life estate in favor of his mother, appellee Hattie Ratliff. Appellant and appellee resided on the tract for several years until an estrangement developed between them. Appellant moved from this land on December 25, 1962, and two days later prepared a deed from appellee to him and asked her to sign it. She read the deed, signed and acknowledged it. During February 1963 appellant had the furnace (which he owned) removed from the residence occupied by appellee after which she moved from the property. Appellant recorded the deed from appellee on May 18, 1963. Later appellee instituted this action to have this deed reformed alleging fraud in that it was not the one she had signed.

This deed purports to convey appellee’s life estate in the entire tract owned by appellant. The descriptive portion of the deed appears on the first page while her signature and acknowledgment are on the second page.

Appellee testified that she had agreed to relinquish her life estate in only a portion of the tract so that appellant could build a house there. She further testified that the deed which she had signed called for a boundary line which “started on that headwall [behind her residence] and included only about half this tract.” She insisted that the first page had been removed from the deed and a new page, containing a description which included her life estate in the whole tract, had been substituted before it was recorded.

When appellee signed the deed the only other persons present were appellant and Ralph May, who took her acknowledgment. May testified that he had not read the deed and was therefore unable to determine whether a new first page had been substituted. Nor is there any evidence that the original first page had been initialed or otherwise marked in any identifying manner. Appellant denied that there had been any change in the deed since it was executed by appellee and stated further that the recorded deed confirmed appellee’s agreement to convey her life estate in the entire tract to him.

It is apparent that there is a sharp conflict in the evidence as to whether the original deed was fraudulently changed. The special commissioner appointed by the trial judge to hear the case was of the opinion that a fraud had been committed upon appellee and recommended that the deed be reformed. The trial judge accepted this recommendation, found that the first page had been substituted and entered judgment accordingly.

We conclude that this finding is amply supported by the evidence and therefore under CR 52.01 we will not say it is clearly erroneous.

The judgment is affirmed.


author: MILLIKEN, Judge.

text:
    COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellant, v. Arlin COLLINS and Carmi Collins, Appellees.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.
    Robert Matthews, Atty. Gen., H. C. Smith, Sp. Asst. Atty. Gen., Bradford T. Garrison, Watts & Garrison, Nicholasville, Wm. O. Gilbreath, Lexington, for appellant.
    Delbert Eagle, Eagle & Cox, Lancaster, for appellees.
   MILLIKEN, Judge.

This is an appeal of -a judgment in a highway condemnation proceeding.

Appellees, Arlin and Carmi Collins, husband and wife, own approximately three acres of land fronting on Lexington Street (U. S. 27) inside the northern city limits of Lancaster, Garrard County. A strip of land averaging 13.8 feet in depth and extending 322 feet across the front of their property was condemned for the purpose of obtaining a right of way for the widening and reconstruction of a portion of U. S. 27. In addition, a permanent easement was taken over an approximately 40 x 70 foot strip for a drainage ditch across a portion of the front of the property and adjacent to Lexington Street. The grade of the new roadway was elevated above the old level from one to four and one-half feet. Judgment was entered on a verdict for $6,000 for the taking, which the Commonwealth contends is excessive.

The improvements on appellees’ lot include a two-story frame residence, a 24 x 24 foot barn and chicken house, all of which are located on the back of the lot, this portion being zoned residential. A strip approximately 100 x 125 feet deep across the front of the lot is zoned commercial. Near Lexington Street, within the commercial area, is a small frame building 18½ x 21 feet, built in 1940, which was once used as a service station until such use was abandoned approximately four years before the initiation of this condemnation proceeding. None of the improvements was taken.

The last lessee of the gas station made no use of it during the term of its lease because there was no adequate drain to remove the surface water on the lot. The gasoline pumps had been removed at least four years prior to the taking. After the construction, the small frame building is eight to ten feet from the right of way and about 27 feet from the pavement. The grade of the road in front of it was raised approximately one to one and one-half feet. After the construction, the residence is approximately 105 feet from the right of way and 125 feet from the roadway. There was a slight drainage problem in front of the residence prior to construction because the roadway was approximately a foot above the yard. This condition was aggravated by an additional one-foot increase in elevation by the construction of the new highway, but an adequate drain was provided for the relief of the area. There was a more serious drainage problem near the old gas station. The Department of Highways, however, installed a larger culvert to take care of the surface water and obtained a permanent easement for the purpose of maintenance of a drainage ditch and the culvert.

The appraisals of the property showed a difference in before and after taking values ranging from $10,000 to $15,-500 as given by witnesses for appellees, and $2,500 to $2,800 as given by witnesses for appellant, so the $6,000 verdict is within the range of the appraisal evidence. Although it was made clear that the leased 18½ x 21 foot frame building had been abandoned as a gas station four years prior to the taking and had produced no rental income for two years prior to the taking, it was improper even after this preface to admit evidence that the station had been rented to one lessee for $90 a month and later to another lessee for $75 a month. Moreover, here the gross rentals that were once received had no relation to the productivity of the property immediately prior to the taking. There was no evidence indicating that any oil companies were interested in the old station, and from the testimony of witnesses it appears that the frame building was more of a liability than an asset because any new lessee of the property probably would have to remove it. In view of the excessiveness of the verdict, as hereinafter discussed, the admission of this rental evidence was prejudicial in all probability. As before mentioned, the frame building had no value to speak of as a service station, was not being used as such, and to indicate that it had lost service room also was improper. But see Commonwealth, Department of Highways v. Whipple, Ky., 392 S.W.2d 81, at page 82 (1965), where evidence of rents was used for rent capitalization purposes to establish value.

A comparison of the percentage of property taken with the total value of the property was approved in Commonwealth, Department of Highways v. King, Ky., 400 S.W.2d 517. Here, along with some consequential damage, appellees have lost a strip of approximately 13.8 feet in depth across the 322-foot front of their property. This represents about %i of the entire lot. Taking the highest before value given to the property by appellees’ witnesses ($43,-000) and multiplying that by ⅛, the 13.8-foot strip would be worth $1,390. Although there is testimony that the taking of the permanent easement by the Highway Department for drainage purposes would not hinder commercial development, by including that area in with the 13.8-foot strip taken the total would amount to about ¾8 of appellees’ property. Taking ¾8 of $43,-000, then the value of this new area would be $2,388. Appellees have suffered some damage because of the reduction in the depth of the commercially zoned area, but that factor coupled with the actual property taken and the permanent easement did not totally destroy the commercial value of appellees’ property which some of the witnesses asserted. Appellees had approximately a 110-foot in depth strip across the front of their property zoned commercial before the construction, which was reduced 13.8 feet in depth by the construction. In view of the foregoing mathematical comparison of the value of the property taken with the value of the whole, and making some allowance for the reduction in size of the commercial area, we conclude that the judgment was excessive.

It does not appear that appellant objected to the comparative sales that were introduced by appellees’ witnesses so such objections have not been preserved for this appeal. Commonwealth, Department of Highways v. Williams, Ky., 317 S.W.2d 482. Commonwealth, Department of Highways v. Tyree, Ky., 365 S.W.2d 472, agrees with this rule stating that “the sale price of a non-comparable other piece of property” is an irrelevant measure of value and “that it is necessary to make an objection or a motion to strike at the trial in order to preserve grounds of error for appellate review.”

The judgment is reversed.

PALMORE, C. J., concurs in the result, but differs with the reasoning.


author: CLAY, Commissioner.

text:
    Kelley ASBURY, Petitioner, v. Hon. J. G. M. ROBINSON, Judge, Division II, Boyd Circuit Court, Respondent.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.

      Kelley Asbury, Asbury & Asbury, Cat-lettsburg, for appellant.
    Ben B. Fowler, Frankfort, John M. Williams, Ashland, for appellee.
   CLAY, Commissioner.

This is an original proceeding in this Court seeking an order prohibiting respondent, a judge of the Boyd Circuit Court, from acting in that capacity on the ground that the act authorizing his appointment is unconstitutional. No question is raised concerning the propriety of this procedure, which we accepted as appropriate in Harrod v. Meigs, Ky., 340 S.W.2d 601. Respondent raises a question of timeliness in bringing this suit, but we do not consider this a sufficient defense.

In 1966 the legislature authorized an additional judge for the Thirty-second Circuit Court District, which theretofore had been established as Boyd County. KRS 24.046. Section 4 of Senate Bill 191, which created this additional judgeship, provided for the appointment of a new judge and it is not questioned that respondent was properly appointed thereunder. The issue presented is whether this legislation was invalid as violating section 138 of the Kentucky Constitution. That section in its entirety provides :

“Each county having a city of twenty thousand inhabitants, and a population, including said city, of forty thousand or more, may constitute a district, and when its population reaches seventy-five thousand, the General Assembly may provide that it shall have an additional Judge, and such district may have a Judge for each additional fifty thousand population above one hundred thousand. And in such counties the General Assembly shall, by proper laws, direct in what manner the court shall be held and the business therein conducted.” (Emphasis added.)

The following facts we consider established by the record before us. Boyd County has a total population of less than 75,000. Considering the industrial character of the county, the substantial increase in court business and other factors, from the standpoint of proper judicial administration an additional judge is needed in this judicial district.

It is petitioner’s contention that, regardless of other considerations, the legislature lacked the power to create another judgeship for this district because Boyd County did not have a population of at least 75,000, as required by section 138 of the Constitution. As we shall see, that section has an interesting case history.

At first blush, section 138 would seem to require the specified population, and it was so held in Nagel v. Bosworth, 148 Ky. 807, 147 S.W. 940. That decision was expressly based upon Scott v. McCreary, Governor, 148 Ky. 791, 147 S.W. 903, decided the preceding day. The latter case involved the construction of the first part of section 138 relating to the creation of judicial districts. The legislature had attempted to convert Franklin County into a single judicial district when it did not have, as section 138 provides, a population of at least 40,000. This Court ruled the statute unconstitutional. There was a strong dissenting opinion, which we will refer to later. The Scott case was followed in Nolan v. Jones, 215 Ky. 238, 284 S.W. 1054.

In Runyon v. Smith, 308 Ky. 73, 212 S.W.2d 521, decided in 1948, the reasoning in the Scott case was repudiated, and it and the Nolan case were effectively overruled. The Runyon decision was followed in Harrod v. Meigs, Ky., 340 S.W.2d 601, and in that case, as in the Runyon case, this Court adopted the dissenting opinion of the Scott case as constituting the correct view of the constitutional question involved. These decisions knocked the props from under the Nagel case, which had construed section 138 in isolation.

The following is a brief summary of the reasoning followed in the Runyon and Harrod cases with respect to the construction of section 138. The various sections relating to the creation and alteration of judicial districts must be read together. Section 128, relating to the original creation of judicial districts, directed the legislature to have “due regard to territory, business and population”. Section 132 authorized the legislature “when deemed necessary” to establish additional districts. Section 138 makes no reference to “territory”, “business” or “necessity,” but instead specifies a county population figure (of 40,000 or more) which would authorize the legislature to convert it into a single distict.' Such specification was construed to mean that, regardless of other considerations (such as territory, business or necessity), the legislature could create a single county judicial district if the stated population condition existed. This did not, however, rule out the right of the legislature to adopt the criteria set forth in sections 128 and 132 in lieu of the population yardstick.

If, as has been decided, the legislature may consider other pertinent (and very practical) factors in determining the necessity for the creation of an additional district, regardless of population, by the same token it has the authority to create another judgeship in an existing district. This is so because the language of section 138 relating to the single county district and the additional judgeships is substantially similar, and the obvious objective sought, from the standpoint of proper judicial administration, is the same. We therefore are of the opinion that the Runyon and Meigs decisions are dispositive of the question presented. It is unnecessary for us to invoke other constitutional provisions, such as the Sixth Amendment to the United States Constitution and section 14 of our Kentucky Constitution, which recognize every person’s right to prompt judicial recourse and disposition, although this consideration is a significant one.

It may be observed that the preamble to the statute under attack referred to “the right of all persons to a speedy trial”, and also recited that the General Assembly was giving due regard to territory and business as well as population in creating this additional judgeship. The practical necessity for the additional judicial service provided is not questioned. Bearing in mind that we should uphold this legislation unless it clearly violates our Constitution, we have no hesitancy in declaring the act in question was not prohibited by section 138 of the Constitution.

The prohibition relief prayed for in the petition is denied.


author: W. MAJOR GARDNER, Special Commissioner.

text:
    Robert W. McCOY et al., Appellants, v. The CITY OF FLORENCE, Kentucky, etc., Appellee.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.
    Sam Neace, Jr., Florence, Stanley Chris-man, Covington, for appellant.
    Raymond R. Vincent, Florence, for ap-pellee.
   W. MAJOR GARDNER, Special Commissioner.

A declaratory judgment action was brought against the City of Florence, Kentucky, by owners of property in Sunglow Valley Subdivision, a residential community of sixty-two homes annexed to the City of Florence.

Under authority of KRS Chapter 58 the City of Florence enacted an ordinance for the financing, construction, operation and maintenance of a municipal sewer system. The sewer system was constructed before Sunglow Valley Subdivsion was annexed. After the annexation the city determined that the sewer system in the subdivision was inadequate and that a public nuisance existed, and it adopted another ordinance for the construction of a sewer lift station for the purpose of connecting the sewer lines in the subdivision with the municipal sewer system. Construction of the lift station amounted to $31,598.92, and the city levied a special assessment of $509.66 against each of the sixty-two property owners in the subdivision to pay it.

Appellants contend that the city, after electing to build and maintain a municipal sewer system under KRS Chapter 58, cannot thereafter assess appellants for sewer improvement under KRS Chapter 94 while simultaneously charging them a monthly service rental fee under Chapter 58. They insist this violates the 14th Amendment of the U. S. Constitution.

It is conceded that a nuisance existed and that the city was under obligation to take remedial steps. The age-old problem of limited funds presented itself again. There was not sufficient revenue from the general funds of the city to construct the sewer lift. Who was to pay for it ? There appear to be two ways of financing the project: (1) By assessing the individual landowners as provided by Chapter 94, which was done in the instant case, or (2) by paying for the construction out of revenues from the existing system, which would require an increase in rentals and service charges. The latter appears to be authorized by Chapter 58. See Walker v. City of Maysville, 310 Ky. 118, 220 S.W.2d 96.

This court has held firmly to the position that although a local assessment imposes an involuntary burden upon the property improved and that the right so to impose it is derived from the taxing power, such a charge is not strictly a tax and does not violate § 171 of the Kentucky Constitution. Krumpelman v. Louisville & Jefferson County Metropolitan Sewer District, Ky., 314 S.W.2d 557, 75 A.L.R.2d 1110; Robertson v. City of Danville, Ky., 291 S.W.2d 816; Baker v. City of Princeton, 226 Ky. 409, 11 S.W.2d 94. Appellants argue broadly that their rights under the 14th Amendment of the U. S. Constitution have been violated, but they do not pinpoint the violation nor do they cite any authority supporting their contention. Their main argument is that the city having once set up a formula by which the sewer system was to be constructed, operated and extended, it could not change that method by placing an unequal burden upon some of the users. In support of this position they cite City of Tompkinsville v. Miller, 195 Ky. 143, 241 S.W. 809, and Wickliffe v. City of Greenville, 170 Ky. 528, 186 S.W. 476. While these cases contain statements seemingly upholding appellants’ position, this court in Shaver v. Rice, 209 Ky. 467, 273 S.W. 48, pointed out that a strict adherence to that view could result in an intolerable situation As said in the Shaver case:

“To adopt appellants’ view upon that question would be to hold that, when a city of the fifth class has reached the limit of a bonded indebtedness, under § 158 of the Constitution, although in expending the proceeds of the bond issue the city may have constructed its entire system of streets, thus distributing with uniformity and equality the benefits derived from and the burdens imposed by the bond issue, if any of its streets wear out and need reconstruction, the city is without power to have the work done, except from what may remain of its annual levy after paying its general expenses and setting aside the yearly quota to pay interest on the bonds and to provide a sinking fund for their retirement. If nothing should be left then, the worn-out streets could not be reconstructed at all.”

In the Shaver case this court upheld the city’s plan of financing the reconstruction of streets, which plan was different from the plan of payment for the original street improvement.

There is a limited persuasion in appellants’ argument that when they pay the same rental fees as the users in the city proper plus the special assessment an unequal burden is imposed upon them. The argument on the other side might be that to require all the users to absorb the cost of the sewer lift station by increasing the rental fee would cause them to help pay for something that benefits only the residents of Sunglow Valley Subdivision. It would be impossible and certainly impracticable to reach a formula by which every person pays in exact proportion to the benefit derived. We think that a city must be permitted considerable latitude within the framework of the statutes and the Constitution in solving its fiscal problems.

It appears to us that the city of Florence was within its legal right in electing to proceed under KRS Chapter 94.

The judgment is affirmed.


author: CULLEN, Commissioner. MONTGOMERY, Judge

text:
    W. E. NEWBOLT, a Citizen, Resident and Taxpayer of the City of Berea, Kentucky, and the Berea Independent School District, Individually and as a Representative of All of the Citizens, Residents and Taxpayers of Said City and District, Appellant, v. BOARD OF EDUCATION OF BEREA INDEPENDENT SCHOOL DISTRICT and the City of Berea, Kentucky, Appellees.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.
    George T. Ross and John W. Palmore, Richmond, for appellant.
    Guy K. Duerson, Jr., Berea, Grafton, Ferguson, Fleischer & Harper, and Jo M. Ferguson, Louisville, for appellees.
   CULLEN, Commissioner.

Last week, in Fayette County Board of Education v. White, Ky., 410 S.W.2d 612 (decided December 6, 1966) this court construed subsection (7) of KRS 160.477, relating to special voted taxes for school building purposes. In the case now before us we are called upon to construe subsection (6) of the statute. In this case, as we did in the Fayette County case, we shall give prime consideration to the objective sought to be accomplished by the 1965 legislation which by amendment to KRS 160.477, created the two subsections.

The question in issue here is whether a special building fund tax voted by the people of the City of Berea Independent School District on December 8, 1965, after the enactment of the 1965 legislation amending KRS 160.477 but before the effective date of that legislation (which was December 16), could be levied for 1966 at the voted rate of 45 cents per hundred dollars of assessed valuation or was limited to the “compensating rate” as defined in KRS 132.010. The circuit court held that the tax could be levied at the voted rate. A protesting taxpayer has appealed.

Subsection (6) of KRS 160.477 is as follows:

“Notwithstanding the provisions of any other subsection of this section to the contrary, for the 1966 tax year and for all subsequent years no district board of education shall request the levy of a rate under the provisions of this section which exceeds the compensating tax rate as defined in KRS 132.010, * * * except that a rate which has been approved by the voters under this section but which was not levied by the district board of education in 1965 may be levied after it has been reduced to the compensating tax rate as defined in KRS 132.010.”

Literally construed, this subsection prohibits the levy of any rate if no rate was levied in 1965, because the “compensating tax rate” as defined in KRS 132.010 is such rate as produces an amount of revenue approximately equal “to that produced in 1965.” Obviously, if nothing was produced in 1965 the compensating rate would be zero.

The appellant here, although purporting to argue for a literal interpretation of the statute, actually is arguing that the statute should be construed as if it provided that a tax which had been approved but was not levied in 1965 can be levied at such a rate only as will produce approximately the same revenue as the tax would have produced if it had been levied in 1965.

The appellees maintain, and the circuit court in substance held, that the statute means that any tax levied in 1965 must be “rolled back” to the compensating rate, and any tax that could have been levied in 1965, because a vote authorizing it had been taken prior to the time for making the 1965 levy, must be “rolled back” to a rate which will produce no more revenue than would have been produced in 1965 had the tax been levied in 1965. See Boggs v. Reep, Ky., 404 S.W.2d 24.

We think the literal interpretation is unacceptable because, first, if the legislature had intended simply to forbid any future voted tax levies it would not have used such obtuse language; and, second, the literal interpretation would not be compatible with the obvious object and purpose of the 1965 legislation. It is an established rule of statute construction that the courts will consider the purpose which the statute is intended to accomplish and will not give a strict, literal construction to the statute if it would lead to an unreasonable or absurd conclusion. City of Frankfort v. Triplett, Ky., 365 S.W.2d 328; Kentucky Mountain Coal Co. v. Witt, Ky., 358 S.W.2d 517.

The obvious purpose of the 1965 legislation was to prevent the taxpaying public from being subjected by governmental bodies to taxes far in excess of those paid in the past, through the application of old tax rates to greatly increased assessments. There existed no reason to prohibit the voters from voting upon themselves, with full knowledge of all the facts, an additional tax. (The evidence in this case is that the voters were fully informed that the tax on which they were voting would be levied on a 100-percent property assessment.) As we said with respect to this same 1965 legislation in Raque v. City of Louisville, Ky., 402 S.W.2d 697, at 699:

“ * * * Considering the background-of the Act, it seems quite certain that it was designed to safeguard against unintended tax burdens, and not those which are specifically intended and specially authorized.”

For the reasons just stated, the nonliteral interpretation of the statute advocated by the appellant is not acceptable. If the voters deliberately and intentionally voted upon themselves a tax of 45 cents per hundred, knowing it would be levied on a 100-percent assessment, what possible reason could the legislature have had for requiring that the rate be reduced to 15 cents ?

It is our conclusion that the only reasonable construction of the statute is that its limitations apply only to such taxes as were voted prior to the time of making the 1965 tax levy.

The judgment is affirmed.

MONTGOMERY, Judge

(dissenting).

In Fayette County Board of Education v. White, Ky., 410 S.W.2d 612 (decided December 6, 1966), this court held that the Fayette County Board of Education was compelled to “roll back” a voted building fund levy authorized by KRS 160.477 and to include it in the compensating tax rate as defined by KRS 132.010.

The only distinguishing feature in this case is that here the school board undertook to beat the “roll back” by voting a building tax levy under KRS 160.477 after the “roll back” legislation had been enacted and before its effective date, December 16, 1965. The wording of KRS 160.477(6), as quoted in the majority opinion, expressly forbids such action. The majority opinion is a masterfully-written avoidance of the plain language of this section.

It is a cardinal rule of statutory construction that words shall be given their ordinary meaning. When this rule is applied, the statute is plain.

The pertinent part is quoted for convenience :

“Notwithstanding the provisions of any other subsection of this section to the contrary, for the 1966 tax year and for all subsequent years no district board of education shall request the levy of a rate under the provisions of this section which exceeds the compensating tax rate as defined in KRS 132.010, * * $ except that a rate which has been approved by the voters under this section but which was not levied by the district board of education in 1965 may be levied after it has been reduced to the compensating tax rate as defined in KRS 132.010.”

It is to be noted that the statute was written in contemplation of action to be taken for the 1966 tax year. It expressly forbids any district board of education to request the levy of a rate which exceeds the compensating rate. The majority opinion concedes that this is the literal construction of the section. The latter part of the section fits this case like a glove when it says that any rate approved by the voters but not levied in 1965 may be levied “after it has been reduced to the compensating tax rate as defined in KRS 132.010.” The rate in question had been approved before the 1966 tax year and had not been levied in 1965. It is hard to envision a plainer case where the facts come completely under the language of a statute.

The action of the Berea board is nothing more, nor less, than an attempt to defeat the very purpose of the “roll back” legislation. KRS 132.010(6) expressly limits the amount of revenue to be produced in 1966 to an “amount of revenue approximately equal to that produced in 1965.” The facts of the Berea case are not distinguishable from the facts of the Fayette County Board of Education case, in which an attempt to get increased taxes was prohibited as “contrary to the overall purpose and objective of the ‘roll back’ legislation.”

The argument that the taxpayers knew what they were voting is not persuasive. It is irrelevant since the action in any view was prohibited by the statute. To place the majority decision on the basis that the voters were fully informed concerning the effect of the 100% assessment and the voted increased rate of taxation is to place it on a very dubious and uncertain ground.

For these reasons I respectfully dissent.

HILL, J., joins in this dissent.


text:
    L. E. BEARD et al., Appellants, v. ECONOMY FINANCE CORPORATION, Appellee.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.
    Paul R. Huddleston, Huddleston & Hud-dleston, Bowling Green, for appellants.
    Angus W. McDonald, Lexington, for ap-pellee.
   W. MAJOR GARDNER, Special Commissioner.

North American Leasing Company leased bowling equipment to Newtown Investment Corporation for a total rental of $88,997.96, payable in 59 monthly installments of $1508.-44 each. Simultaneously with the execution of the lease, appellants, who were stockholders of the Newtown Investment Corporation, individually executed and delivered to North American Leasing Company a “Guarantee of Lease,” which provided that they jointly and severally guarantee the rental payments.

North American Leasing Company assigned the lease to appellee, Economy Finance Corporation. Newtown Investment Corporation made seventeen monthly payments and, upon default of other installments, Economy Finance Corporation declared all future installments due under the terms of the lease and instituted this action.

Appellants contend that as a condition precedent to the validity of the loan guarantee it was understood and agreed by all parties that the agreement was to be signed by certain persons; that it was not signed by one of the intended signatories and, therefore, was unenforceable as to those who did sign. This defense is set forth in the answer as follows:

“The defendants signed and delivered the Guarantee of Lease * * * upon the condition and pursuant to their agreement with North American Leasing Company that said guarantee would not become effective for any purpose unless and until it should be signed by all officers, directors, and stockholders of Newtown Investment Corporation, including Peter G. Powell, whose name was typed under a blank signature space appearing in that document shown with the complaint as Exhibit C * * * The Guarantee of Lease was not signed by Peter G. Powell in fulfillment of the condition upon which it was signed and delivered by the defendants.”

The chancellor sustained appellee’s motion for a judgment on the pleadings and adjudged appellee was entitled to recover the sum of $63,356.48 from appellants.

The specific question confronting us is whether a written contract not signed by all obligors is enforceable against those who do sign when there was a parol agreement that the contract was not to be effective unless signed by all. Appellee argues that the written contract provided that each person signing guaranteed the rental payments “jointly and severally,” and therefore it was of no consequence to the guarantors whether the others executed the instrument. Ap-pellee further contends that the parol evidence rule providing that all prior agreements are merged in the written contract should be invoked and cites Smith v. Ferguson, Ky., 295 S.W.2d 792, in support thereof.

It appears to us that the position of appellee is sound only if there was a valid subsisting contract. We are of the opinion, however, that the Guarantee of Lease never became effective if appellants are able to prove the defense stated in their answer. In the case of Castle Petroleum Co. et al. v. Becker Co. et al., 214 Ky. 7, 282 S.W. 186, there was a parol agreement that the promissory notes were to be signed by the defendants and one John F. Howes. They were not signed by John F. Howes and the parol agreement was set forth as a defense. The court held the defense sufficient and pointed out the distinction between parol evidence to vary or contradict a written contract and parol evidence to prove there was no contract in the first instance. The distinction is further emphasized in Pickrell et al. v. Wilson et al., 199 Ky. 20, 250 S.W. 135, where we find:

“While there is conflict in decisions upon this question, it seems that in part it is due to a failure to distinguish between a condition precedent, upon which the existence of the contract depends, and a condition subsequent, which admits of the existence of the contract, but superimposes additional conditions therein. In the latter class of cases the evidence is clearly inadmissible, but in the former practically all the text-writers and the great majority of the decisions are in accord that such evidence is admissible.”

See also Cumnock-Reed Co. v. Lewis, 278 Ky. 496, 128 S.W.2d 926, and authorities cited therein.

We are of the opinion that appellants should have the opportunity to present their defense in a trial of the case which was precluded by the summary judgment on the pleadings.

The judgment is reversed for proceedings consistent with this opinion.


text:
    James E. LUCKETT, Commissioner of Revenue, Appellant, v. FIRST NATIONAL LINCOLN BANK OF LOUISVILLE, Executor of the Will of Robert E. Adams, deceased, Appellee.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.

      Robert Matthews, Atty. Gen., William S. Riley, Asst. Atty. Gen., Larry A. Carver, Dept, of Revenue, Frankfort, for appellant.
    J. H. Gold, Gene Sims, Louisville, for appellee.
   CLAY, Commissioner.

The Commissioner of Revenue appeals from a judgment reversing an order of the Kentucky Tax Commission which increased an inheritance tax assessment against ap-pellee approximately $6,000. The question involved is one of statutory interpretation.

Appellee is the executor of the will of Robert E. Adams, Sr., who died in 1960. Four years before his death he had entered into an irrevocable life insurance trust agreement with appellee as trustee, and assigned to it eleven insurance policies having a face value of about $104,000. Adams was the original named beneficiary in these policies but after the assignment'the trustee was named as the beneficiary in eight of them, and it is not questioned that the proceeds of all the policies were payable (and were paid) to the trustee.

The trust instrument identified the beneficiaries as the then living children of the trustor, with certain contingent beneficiaries in the event no children were living when the insurance proceeds were collected by the trustee. At the time of his death the trustor was survived by three children, and of course they had a vested interest in these proceeds.

The controversy concerns principally the construction of KRS 140.030(2), which provides in part:

“The proceeds payable under any life insurance policy on the death of the assured * * *, payable to the assured or his estate, shall be taxable as a part of the legacy as a distributable share of the beneficiary. The proceeds of an insurance policy payable to a designated beneficiary other than the assured or his estate or a trustee of a designated beneficiary * * * shall be tax-free. * * (Emphasis added.)

The parties in their briefs have entered into an extended argument as to whether the above quoted subsection levies the tax on life insurance proceeds or whether such tax is levied by KRS 140.010 and KRS 140.030(1). KRS 140.010 is a general statute imposing inheritance taxes upon property transfers effected by death. KRS 140.030(1) relates to contractual obligations payable at or after death. The subsection above quoted is the only one which deals specifically with proceeds payable under life insurance policies. We think the issue here presented can be resolved by interpreting the quoted lan-gauge and resort to the other statutes is unnecessary.

The first contention of appellant is that the proceeds of an insurance policy payable to a trustee are not tax-free unless the policy names the designated beneficiaries of the trust. This contention is based on the argument that if the proceeds payable to a trustee were exempt from taxation, there was no reason for the legislature to add the phrase, “of a designated beneficiary”.

We believe it unnecessary to determine if the subsection under consideration is geared to insurance policy provisions or is more concerned with the ultimate disposition of the “proceeds payable”, whether effected by naming the insurance beneficiary, or by assignment, or trust, or otherwise. See 28 Am.Jur., Inheritance, Estate and Gift Taxes, section 251 (p. 187) ; Wachovia Bank & Trust Co. v. Maxwell, 221 N.C. 528, 20 S.E.2d 840, 150 A.L.R. 1273.

There is another ground which forces the conclusion that the statute does not require the beneficiaries of the trust to be named in the policy. Let us requote the pertinent provision:

“The proceeds of an insurance policy payable to a designated beneficiary other than the assured or his estate or a trustee of a designated beneficiary * * * shall be tax-free.”

At first blush this provision is meaningless, for the simple reason that the preceding sentence of the statute imposes an inheritance tax only upon proceeds “payable to the assured or his estate”. That being the case, there is no tax upon proceeds payable to others. For some reason the legislature saw fit to re-emphasize this proposition by reciting that the proceeds “payable to a designated beneficiary other than the assured or his estate” should be tax-free. This is like imposing a tax on horses and then providing that cows are exempt from the horse tax. However, another phrase was added which apparently has some significance. The statute refers to proceeds payable to “a trustee of a designated beneficiary”. To determine why these words were used, it is necessary to consider the pre-existing law relating to the exemption of insurance proceeds which are placed in trust.

The majority view is that where insurance proceeds are payable to a trustee of an inter vivos trust, the trustee is an “other” beneficiary, and the proceeds are not subject to tax. 73 A.L.R.2d 176. In 1928 the New Jersey Supreme Court created a controversy when it held the mere fact that the proceeds were payable to a trustee did not necessarily create the tax exemption, on the ground that the tax was imposed upon the transfer of the proceeds to the ultimate beneficiary, and it was the nature of the trust which determined the taxability of the transfer. Fagan v. Bugbee, 105 N.J.L. 85, 143 A. 807. That decision is said to have induced many state legislatures to expressly exempt insurance proceeds payable to trustees. 73 A.L.R.2d 177. The policy behind such an exemption is set forth in Re Killien’s Estate, 178 Wash. 335, 35 P.2d 11.

The specific exemption of proceeds payable to a “trustee”, however, led to another problem. Suppose the trustee is required to distribute the proceeds as directed by the will of the testator assured? Such a trust would constitute an indirect means by which the testator disposed of the proceeds at his death, and this was the type of death transfer the legislature intended to tax. See Re Myers’ Estate, 309 Pa. 581, 164 A. 611; Re Kenin’s Trust Estate, 343 Pa. 549, 23 A.2d 837; Re Rothenbuecher’s Estate, 76 Ohio App. 425, 64 N.E.2d 680, 32 Ohio Ops. 174.

In order to avoid the problem just discussed, it is apparent that an adequate statute must somehow identify the nature of the trust which falls within the exempted category. Michigan and Pennsylvania statutes do this by requiring trust agreements which designate beneficiaries who acquire an interest thereunder. See 73 A.L.R.2d 205.

The purpose of the statute we are considering was to tax life insurance proceeds which actually pass through the assured’s estate by reason of his death or by reason of his testamentary disposition. If some beneficial interest therein had been created in another, or others, prior to his death, the proceeds were not taxable. Had this statute done no more than exempt proceeds payable to a “trustee”, anyone could avoid payment of inheritance taxes on insurance proceeds even though the trust terms permitted a testamentary disposition. It is apparent the legislature was attempting to prevent this circumvention of the purpose of the law by further identifying the exempted trustee. Thus the addition of the words “of a designated beneficiary”. While more certainty could have been achieved, we believe these words were used to insure that the proceeds payable to such trustee would be exempt from taxation only if the trust had a pre-testamentary designated beneficiary who was someone other than the assured or his estate.

This interpretation requires us to construe the words “other than the assured or his estate” as modifying the “designated beneficiary” of a trust as well as a “designated beneficiary” of a policy, and requires us to differentiate between a “designated beneficiary” of the policy and a “designated beneficiary” of the trust, but we can find no other means of rationalizing the language of this skeletal statute. It is, therefore, our conclusion that the statute does not require a recital of the trust beneficiaries in the insurance policies, but the purpose is accomplished if the trust arrangement sufficiently identifies them.

The other contention of appellant is that a class of persons entitled to the proceeds under a trust arrangement is not equatable with “designated beneficiaries”. The bald argument is that one cannot designate a beneficiary unless his name is specified. We find nothing in the statute which would require or authorize such a hyper-technical construction of the words “designated beneficiary”.

We must bear in mind that we are considering beneficiaries of a trust. It is common usage in the creation of trusts to designate them as a class. See Sandford’s Adm’r v. Sandford, 230 Ky. 429, 20 S.W.2d 83. Members of the class are sufficiently designated if they may be reasonably identified. See 54 Am.Jur., Trusts, section 140 (p. 118). Surely the words “designated beneficiary” require no more than that the ultimate recipient of the insurance proceeds be ascertainable. As discussed above, the terminology was used to identify a beneficiary “other than the assured or his estate”. No reason is apparent why it should have the restricted meaning which appellant ascribes to it.

We quote with approval these sound observations from the opinion of the Chancellor:

“Designation of a class, without more, would amply satisfy the requirement of “designated beneficiary”, since “taxpayers”, “heirs”, “children”, “descendants”, and words of like import are proper objects of “designation”, as customarily used and ordinarily understood. However, bearing in mind that the incidence of inheritance tax is upon transfer of property at death of the grantor or donor, (KRS 140.010) the class herein designated was fully determinable, and its members individually identifiable, simultaneously with the demise of (ap-pellee’s) decedent. It requires no strained construction, even if rules of strict construction be observed, to reach the conclusion that the Legislature intended, and clearly provided that these proceeds should be free from the tax sought to be imposed.”

The judgment is affirmed.

      . Attention is called to KRS 391.075, enacted in 1966, which provides for testamentary dispositions in trust.


text:
    COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellant, v. Fred SHIRLEY et al., Appellees.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.
    Robert F. Matthews, Atty. Gen., H. C. Smith, Dept, of Highways, Frankfort, Charles W. Huddleston, Bowling Green, for appellant.
    Joe S. Garman, Chester I. Bays, Bowling Green, for appellees.
   CLAY, Commissioner.

The Commonwealth condemned approximately 7½ acres of appellee Shirley’s 21-acre tract of land for the construction of I-6S in Warren County. The jury awarded $22,000 and we are sustaining the Commonwealth’s contention that this amount is excessive.

The property involved is situated about two miles southeast of Bowling Green. It was roughly triangular in shape near the intersection of U.S. 231 and the Three Springs Road, and abutted for a substantial distance on both sides of these roads. It had substantial improvements, including a residence which faced the Three Springs Road, and was apparently used for agricultural purposes. The 7½ acres taken was at the rear of this tract that abutted U.S. 231 (which will become non-access 1-65), considering the front to be that facing on the Three Springs Road where the residence was located.

In 1959 appellee Shirley purchased this property for $19,000, and subsequently gave a substantial residential building lot (facing Three Springs Road) to his son.

At the trial the landowner’s allegedly expert witnesses testified to before values ranging from $54,000 to $61,000, and a difference in value ranging from $30,000 to $41,000. None alluded to any comparable sales. One of them, a licensed real estate dealer, testified that he had never owned any real estate in Warren County, had never bought or sold any real estate for anyone and had never been present in connection with any private or public real estate transaction in Warren County. These witnesses briefly mentioned a possible use of this property for subdivision purposes, but there is nothing in the record to indicate any similar development in the vicinity and this potentiality appeared entirely speculative.

At first blush it is difficult to comprehend how approximately one-third of a tract of land, which in its entirety was purchased for $19,000 in 1959, could have a value in 1964 for condemnation purposes of $22,000, particularly when the remaining 13½ acres contained all of the valuable improvements and had almost unlimited access to an adequate highway. Had the landowner’s witnesses made some effort to justify their bald opinions of seemingly extravagant valuations and devaluations, their testimony might have tended to induce conviction. However, it was so lacking in probative value that it does not alter our first blush conclusion that this award was grossly excessive.

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


author: MONTGOMERY, Judge.

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. Elba JACOBS, Adm’r of the Estate of Burton Slone, Deceased, Appellee. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. Tony CRAFT, Guardian for Delmar Ray Craft, Appellee.
    Court of Appeals of Kentucky.
    Dec. 16, 1966.
    Edward J. Hogan, Henry V. B. Denzer, John L. Bennett, Louisville, Alva A. Hol-lon, Hazard, for appellant.
    Cordell H. Martin, Hindman, Rudy Yes-sin, Frankfort, for appellees.
   MONTGOMERY, Judge.

State Farm Mutual Automobile Insurance Company appeals from a judgment in consolidated actions by which Elba Jacobs, administrator of the estate of Burton Slone, deceased, and Tony Craft, guardian for Delmar Ray Craft, recovered $10,000 and $3,000, respectively. Each appellee sued appellant as the insurer of Boyd Deaton on unsatisfied judgments recovered by each against Deaton and Jess Rowe. Appellant resists liability as the insurer of Deaton because, it claims, Deaton failed to cooperate with appellant, in violation of the policy provision, in the defense of the actions in which Deaton and others had been sued.

The recoveries are for losses suffered in a three-car collision which occurred on Kentucky Highway 80, just east of Hind-man, in Knott County on March 21, 1959. Burton Slone and Delmar Ray Craft, victims of the accident, were passengers in a car being driven eastwardly by Alva Slone. James R. Rowe was driving Jess Rowe’s car, with Paul Stepp and Jack Symley as passengers. Deaton was driving alone. Both Rowe and Deaton were traveling westwardly. In substance, the Slone car collided with the left rear side of the Rowe car as it was returning to the right-hand side of the two-lane highway in completion of the act of passing the Deaton car in its proper traffic lane, and thus the Slone car collided head-on with the Deaton car.

Controversial issues of fact concerned the speed of the three cars, their courses of travel, and their positions on, or with reference to, the highway and with each other. Deaton did not testify at the trial. His deposition was taken subsequent to the trial. Deaton said that the Slone and Rowe cars collided in front of his car, and to avoid collision therewith, he pulled his car onto the shoulder of the road on his right hand side, and that his car had slowed or stopped before the Slone car came into contact with his car. Further details of the testimony concerning the collision are unnecessary.

In Beam v. State Farm Mutual Automobile Insurance Company, 6 Cir., 269 F.2d 151, Judge Shackelford Miller, Jr., in commenting on the effect of the absence of an insured at a trial, noted that “ * * * the loss of the insured’s testimony as a witness in chief is not the only result of his failure to appear at the trial. His failure to be present in defense of the claim can have an intangible effect upon the jury both as to the question of liability and the amount of the verdict, the net effect of which is difficult to measure. Unexpected developments in the plaintiff’s evidence might be offset by an explanation on the part of the insured. Inaccurate or exaggerated testimony at the time of the trial may be prevented or held to a minimum by the mere presence of the insured.” Under the facts of this case the absence of Deaton was damning. It was neither excusable nor justifiable and was prejudicial to the defense of the actions. Glen Falls Indemnity Co. v. Keliher, 88 N.H. 253, 187 A. 473; Hynding v. Home Acc. Ins. Co., 214 Cal. 743, 7 P.2d 999, 85 A.L.R. 13.

One of the policy conditions contained in the liability policy issued by appellant to Deaton is as follows:

“3. Assistance and Cooperation of the Insured. The insured shall cooperate with the company and upon its request, attend hearings and trials, assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of any legal proceedings in connection with the subject matter of this insurance. The insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.”

Appellant contends that Deaton’s failure to cooperate relieved appellant of liability. Upon Deaton’s failure to appear at the trial, counsel for appellant, under protest, proceeded with the defense of the actions against Deaton.

Deaton’s home was in Chavies, near Hindman. He was a licensed pipefitter and worked out of union headquarters in Louisville. According to Deaton, he could always be reached through the union headquarters. This was his address, as shown on the policy.

On April 6, 1959, sixteen days after the collision, Deaton visited Alva A. Hollon, the local counsel for appellant, at his office in Hazard. Hollon took notes on what Deaton told him about the collision and notified Carl Floyd, the resident claims superintendent for appellant in Louisville. Thereafter, Hollon, Floyd, and Richard Garman, a claims representative, sought, unsuccessfully, to secure Deaton’s cooperation in the defense of the actions and his attendance on the two trial dates, December 15, 1959, and May 16, 1960. Telephone calls, personal search, and certified mail with return receipt were the methods used. The receipts were signed by Deaton or a member of his family, or by his union representative. Apparently Deaton ignored the process served on him. The record shows that he received timely notice of both trial dates, of the necessity for him to cooperate with appellant in the defense of the action, and of appellant’s reservation of the right to deny liability under the policy because of his failure to cooperate. He also was advised of his right to employ additional counsel since he had been sued for more than the policy limits. Hollon talked with Deaton at times but was unable to get his deposition before he disappeared. Dea-ton was advised by Hollon that his expenses in attending the trial set for May 16, 1960, would be paid.

Shortly after the May 16, 1960 trial, Dea-ton admitted that he had known of the trial dates. He said that he would not attend in the event a new trial should be granted. In response to a question as to what more the company (appellant) could have done to advise him of the trial, Deaton said, “I realize when I want to stay hid I can do a pretty good job of it.” He assigned as his reason for refusing to cooperate that appellant had failed to settle to his satisfaction a claim for damages to his car. The claim was settled before the trial on May 16, 1960. He also claimed that he should have been reimbursed for travel expense of two trips from Chicago, Illinois. On the issue of Deaton’s being financially unable to attend the trial, he admitted that in 1960 he was making $600 per month and owned a 1960 Cadillac.

The question is whether Deaton, the insured, cooperated in good faith with appellant, the insurer, in the defense of the actions filed against him. In Sun Indemnity Company v. Dulaney, 264 Ky. 112, 89 S.W.2d 307, and Travelers Ins. Co. v. Boyd, 312 Ky. 527, 228 S.W.2d 421, the failure of an insurer to give notice was held to be sufficient cause to relieve the insured of liability. The Travelers case and Kentucky Farm Bureau Mutual Insurance Company v. Miles, Ky., 267 S.W.2d 928, uphold the defense of non-cooperation. While Deaton did give appellant’s counsel notice of the accident, he failed to cooperate further. Such failure has been held to release the insurer from liability. Omorrow v. Borad, 27 Cal.2d 794, 167 P.2d 483, 163 A.L.R. 894, and cases cited therein; Bauman v. Western & Southern Indemnity Company, 230 Mo.App. 835, 77 S.W.2d 496; Rohlf v. Great American Mutual Indemnity Company, 27 Ohio App. 208, 161 N.E. 232; Hartford Accident & Indemnity Company v. Partridge, 183 Tenn. 310, 192 S.W.2d 701.

The difficulty in locating Deaton was similar to the situation in Indemnity Insurance Company of North America v. Smith, 197 Md. 160, 78 A.2d 461, where the insureds “completely disappeared within a short time after they were notified of the suit against them. They succeeded in eluding everyone.” This recalls Deaton’s statement that he could do a good job of staying “hid.” The Maryland court used Chief Judge Cardozo’s words in Coleman v. New Amsterdam Casualty Company, 247 N.Y. 271, 160 N.E. 367, 72 A.L.R. 1443, when he said: “If this was cooperation, one is at a loss to imagine when cooperation could be lacking.” These words are equally applicable here. Deaton’s conduct amounted to such lack of cooperation as to relieve appellant of liability under the policy.

The quarrel with appellant over the satisfaction of another claim is not sufficient to excuse Deaton’s lack of cooperation in these actions. Nor is the claim that he lacked expense money valid in view of his earnings and the offer of appellant’s counsel to pay his expenses to attend the trial.

Appellees also contend that appellant waived the breach of the policy provision by settling the claim of Alva Slone, a cross-claimant. This matter was presented by appellees’ motion to dismiss the appeals, which motion was overruled. No further consideration is to be given the matter.

Judgment reversed, with directions to enter a judgment for the appellant.