author: PALMORE, Chief Justice.

text:
    Osco SARVER and wife, Gliddie Sarver, Movants, v. The COUNTY OF ALLEN, By and Through ITS FISCAL COURT, A. R. Oliver, Judge Presiding, Respondent.
    Supreme Court of Kentucky.
    May 22, 1979.

      David W. Anderson, David F. Broderick, Cole, Harned & Broderick, Bowling Green, for movants.
    James S. Secrest, James S. Secrest, Jr., Scottsville, for respondent.
   PALMORE, Chief Justice.

This dispute concerns the status, private vis-a-vis public, of an old road or passway in Allen County. The real parties in interest are neighboring landowners, but through the device of a KRS Chapter 178 proceeding to establish the. disputed passway as a “county road” the county has been drawn into the position of acting as surrogate for one of them.

The facts of the case should be approached with a clear understanding of the distinction between a “county road” and a “public road.”

According to KRS 178.010, “ ‘County roads’ are public roads which have been accepted by the fiscal court of the county as a part of the county road system”. Prior to 1914 it was recognized that an “acceptance” by the county could be accomplished informally, e. g., by maintenance of the road at county expense. Riley v. Buchanan, 116 Ky. 625, 76 S.W. 527, 528, 25 Ky.Law Rep. 863, 63 LRA 642, 3 Ann.Cas. 788 (1903). Since the enactment of Ch. 80, Acts of 1914, however, a formal order of the fiscal court has been necessary to establish a county road. Rose v. Nolen, 166 Ky. 336, 179 S.W. 229, 230 (1915); Illinois Central Railroad Co. v. Hopkins County, Ky., 369 S.W.2d 116, 118 (1963). Otherwise, though a road may be “public,” it is not necessarily a “county road.” Ibid. The obvious reason for this particular distinction is, of course, a public policy against holding counties responsible for the upkeep of any and all highways and biways that chance to become “public” through processes of dedication or prescription over which the counties have no choice or control.

As KRS 178.010(b) necessarily implies, most “county roads” were “public roads” before they were accepted as county roads, but it is not necessary that this be so, because a county is statutorily empowered to lay out and establish a county road before acquiring the necessary right-of-way from the owners of the property over which it will be opened. Cf. KRS 178.080.

This litigation originated in an order adopted by the Allen Fiscal Court on August 16, 1976, formally accepting as a part of the county road system “that certain roadway leading from the Macedonia Ridge Road (Ky. Highway No. 1147) in a Northerly direction by the real property owned by Oseo Sarver, Randall Harper, and Joe K. Meador (formerly Audrey Lyles) to the Oseo Sarver farm.”

The strip in question runs northward several hundred feet from an elbow in Kentucky 1147, turning left, or westward, for a short distance to a sassafras tree. Many years ago it was a wagon road and continued on through to the village or community of Petroleum, but not within the past 20 years or so. In modern times it has been used only to reach the Wyatt Sarver farm, where it now ends, and the R. M. Lyles farm, which adjoins the east boundary of the Wyatt Sarver place and corners on the disputed passway at the point where it turns westward into the Wyatt Sarver tract.

Wyatt Sarver was the father of Oseo Sarver, who now owns the Wyatt Sarver farm. Oseo Sarver also owns the land situated between the Wyatt Sarver tract and Highway 1147 as it extends westwardly from the mouth of the disputed roadway, which runs on or along Oseo Sarver’s east boundary! The property on the west side of this roadway, adjoining the Lyles tract on the north and extending southward beyond the elbow of Ky. 1147, is owned by Randall Harper.

The Lyles tract is now owned by Joe Meador, but in the interest of clarity we shall call it the Lyles tract and shall likewise refer to the north part of the Sarver tract in which the passway ends as the Wyatt Sarver tract.

In 1958 Wyatt Sarver and his wife resided in a house near the end of the passway. Evidently the old lane leading to Highway 1147 had deteriorated to the extent that it was not passable for vehicular traffic, so Oseo Sarver approached the county judge for help, in order that his father’s and mother’s home might be accessible in the event of necessity. The county thereupon ditched, widened, graded and gravelled the passway at Osco’s expense. Later, in October of the same year, the fiscal court voted to accept it as part of the county road system if the adjoining landowners executed right-of-way deeds. Admittedly, however, no such deeds ever were executed. In 1959 Oseo Sarver’s mother died and he moved his father into his own home, which is located on Highway 1147. The Wyatt Sarver residence has been unoccupied since that time.

Meanwhile, the roadway had been used intermittently by occupants of the Lyles tract. Audrey Lyles, who was born on the place, left it in 1930 or 1931 and sold it to Joe Meador in 1974. Oseo Sarver lived in the Lyles house as a renter for some years until 1956, after which a family named Carter occupied it for five or six years during the 60’s, but since that time it has been uninhabitable and, perforce, uninhabited.

The legal status of the old road .first became a matter of real significance shortly after Joe Meador bought the Lyles place in 1974. Although the evidence on the point falls somewhere between scant and nonexistent, it may be inferred that this pass-way would be the only means access to the Lyles tract. It may be, of course, that there is a private easement for the benefit of the Lyles place, but that question does not fall within the purview of this litigation. In any event, it was Meador who instigated the 1976 action by the fiscal court.

As explained earlier in this opinion, it is not necessary to the establishment of a proposed county road that it be an existing public road or, indeed, that it be an existing road or passway of any kind. Hence a fiscal court order establishing a county road would not necessarily be erroneous on the ground that the designated roadway had not heretofore attained the status of a public road. In this instance, however, it is manifest from the content of the fiscal court’s preliminary order of August 10, 1976, and final order of August 16, 1976, that its action was premised upon a finding that the passway in question already had the legal status of a “public road” and that there was no intention on the part of the county either to acquire or to perfect title to the right-of-way. So, too, the case has been practiced on the issue of whether, at the time the fiscal court accepted it as a county road, it was already a public road. For that reason our review of the record is directed to that issue.

For purposes of the discussion, we need not question whether the disputed way was at one time a public road. When it was open and passable all the way through to Petroleum, we shall assume (but without deciding, of course) that it was a public road. The real issue, then, is what does the evidence prove, or not prove, with respect to its abandonment?

A public road that is not a “county road” can be abandoned without formal action. Williams v. Woodward, Ky., 240 S.W.2d 94, 95 (1951); Sowards v. Commonwealth, 297 Ky. 613, 180 S.W.2d 545, 546 (1944); Phillips v. Lawrence, 23 Ky.Law Rep. 824, 64 S.W. 411 (1901). When the public has acquired the free use of a roadway by user, as appears to be the case with respect to this old shortcut, it may abandon that right by a long period of nonuser. In Phillips v. Lawrence, 23 Ky.Law Rep. 824, 64 S.W. 411 (1901), although a road had been created by formal action of the fiscal court, its abandonment was established by proof of absolute nonuser for 33 years, during which time the road had become impassable to vehicular traffic and the travel-ling public had used other and better public roads in the neighborhood. Considering that a public user ordinarily ripens into a prescriptive easement in 15 years, cf. Cummings v. Fleming County Sportsmen’s Club, Inc., Ky., 477 S.W.2d 163, 167 (1972), it would seem reasonable to apply the same criterion to a reversal of the process — that is, an abandonment through nonuse by the general public.

The evidence leaves no room for doubt that for over thirty years, and probably longer than that, prior to the fiscal court order in this case there had been no travel whatever on the disputed passway except for the purpose of access to the old Lyles and Wyatt Sarver houses, and except for some amount of grading work done by county employes from time to time after Oseo Sarver had asked for help in 1958. In short, for thirty years or more the road has had no purpose for which it could have been put to a legitimate use by the public. Cf. Cummings v. Fleming County Sportsmen’s Club, Inc., Ky., 477 S.W.2d 163, 165 (1972). Its only possible use was to serve the private convenience of the owners or occupants of the Lyles and Wyatt Sarver tracts. Cf. Marrs v. Ratliff, 278 Ky. 164, 128 S.W.2d 604 (1939). As the acts of county officials in improving or maintaining a road, standing alone, do not constitute a public user capable of ripening into a prescriptive title, cf. 477 S.W.2d 167, by parity of reasoning neither can they alone amount to such a continued public user as will negate a public abandonment.

The characterization of the passway in question by some of the witnesses as a “public road” reflects a conclusion rather than a fact, and cannot be accorded any effect beyond the probative weight of the facts from which it was derived. Those facts do not reasonably support a finding that at the time of the fiscal court’s order of August 16, 1976, this disputed passway was a public road, and for that reason we are of the opinion that the trial court’s finding to that effect was clearly erroneous.

Two points mentioned in the opinion of the Court of Appeals affirming the judgment of the trial court require clarification. The first, upon which the county has placed reliance in its arguments to this court, is that Oseo Sarver did not prove his title to the land in question. The answer, we think, is that his title is not involved. Whether the alleged road is on his property or merely borders it, under KRS 178.115(2) he was an aggrieved party and had standing to contest the fiscal court’s order through an action in the circuit court. The contest goes only to the validity or propriety of the order.

The other point is the suggestion that because the fiscal order had been subjected to a review in the circuit court, its further review by the Court of Appeals was a matter of discretion rather than a matter of right. In this sense, however, a statutory “appeal” to the circuit court from any agency or tribunal other than the district court is an original action and not an “appeal.” Cf. KRS 23A.010(4). Though not effective until January 2, 1978, this statute reflects a proper construction of the term within the meaning of Const. Sec. 115(a) and the rules promulgated by this court.

The decision of the Court of Appeals is reversed with directions that the cause be remanded to the trial court for entry of a new judgment setting aside the order of the Allen Fiscal Court entered on August 16, 1976.

All concur.


source: Caselaw Access Project

author: LESTER, Judge.

license: Public Domain

text:
    Edward S. FITZPATRICK, Appellant, v. CRESTFIELD FARM, INC., Workmen’s Compensation Board and James R. Yocom, Commissioner of Labor and Custodian of the Special Fund, Appellees.
    Court of Appeals of Kentucky.
    July 14, 1978.
    William G. Cox, Cox & Cox, Lexington, for appellant.
    W. R. Patterson, Jr., Landrum, Patterson & Dickey, Robert S. Walker, III, Brown, Sledd & McCann, Lexington, for appellee, Crestfield Farm, Inc.
    Kenneth E. Hollis, Gen. Counsel, Dept, of Labor, Frankfort, John Riehl, Jr., Asst. Counsel, Dept, of Labor, Louisville, for ap-pellee, Special Fund.
    William L. Huffman, Director, Workmen’s Compensation Bd., Frankfort, for ap-pellee, Kentucky Workmen’s Compensation Board.
    Before LESTER, VANCE and WIL-HOIT, JJ.
   LESTER, Judge.

Appellant takes issue with a decision of the circuit court which reversed an award of the Workmen’s Compensation Board.

In order to dispose of this appeal in an expeditious manner, we will briefly comment that appellant’s third issue presented to us, namely, that the agriculture exclusion contained in the Workmen’s Compensation Act is violative of the equal protection clauses of the state and federal constitutions because of discriminatory classification of workers, is without merit. Furthermore, as was the situation in Peck v. Condor, Ky., 540 S.W.2d 10 (1976), we will not express an opinion with respect to the possible invalidity of a statute when such an issue was not presented on appeal to the circuit court from the board.

The main thrust of this appeal is whether the operator of a farm who boarded thoroughbred race horses was excluded from the operation of the Workmen’s Compensation Act in view of the definition of agriculture as provided in KRS 342.620(16). After a detailed review of the records of the board, the circuit court and the briefs before this court, we have concluded that the learned trial judge reached the correct conclusions in his well written and reasoned opinion and in affirming that judgment, we adopt his determinations as those of this court. The opinion of the Fayette Circuit Court follows.

This is an appeal from a decision of the Workmen’s Compensation Board holding that the Petitioner, Crestfield Farm, Inc., was an employer, mandatorily subject to and required to comply with the provisions of the Kentucky Workmen’s Compensation law. The Board also awarded compensation to the Petitioner’s employee, Edward S. Fitzpatrick, and dismissed the Special Fund from any liability by way of apportionment. However, since it is the opinion of this Court that the Workmen’s Compensation Board was in error in holding Petitioner subject to the Workmen’s Compensation Act, the other issues raised by this appeal need not be considered.

The findings of fact and conclusions of law of the Board typically may be found contained in one short paragraph as follows:

“We hold that the defendant, Crestfield Farm, Inc., was not engaged principally in agriculture. The financial report filed indicates the farm involved was operated principally for the boarding of horses. Therefore, this defendant was subject to the mandatory provisions of the Act.”

KRS 342.630(1), for our purposes, sets out the employers mandatorily subject to the Act as follows:

(1) Any person, other than one engaged solely in agriculture, that has in this state one or more employees subject to this chapter.

It should be noted that in order to qualify for the so called agricultural exemption, a person must be engaged solely in agriculture and not merely engaged principally in agriculture. The Board probably was confused by language used in KRS 342.610(2) which doesn’t have anything to do with this case.

The evidence before the Board clearly and unequivocally established that the petitioner operated farm premises consisting of one hundred and twenty acres of land containing one horse barn, one barn used for both tobacco and horses, and one four stall shed used for horses and to store machinery. On this farm is raised tobacco, hay, cattle, and thoroughbred yearlings. Also, thoroughbred brood mares owned by other people are fed, housed and cared for on the farm. The financial report referred to by the Board shows the gross receipts from the operation of the farm over a three year period, 1972, 1973, and 1974. The report shows a breakdown of receipts from boarding brood mares, the sale of yearlings, the sale of cattle, the sale of tobacco, and other income. The report indicated that over the three year period mentioned an average of approximately 73% of gross receipts came from boarding brood mares owned by others. Evidently, the Board came to the conclusion that feeding, housing and caring for brood mares on farm premises was not encompassed within the definition of agriculture. So far as we are able to determine from the authorities presented by the attorneys for the parties and from our own research, the Board in this case is the only Workmen’s Compensation Board in the United States to have come up with such a startling conclusion. No authority for, nor any rational basis for such a conclusion is offered by the Board, nor by any of the attorneys for the parties and this Court can find none.

Many courts throughout the United States, including the Court of Appeals of Kentucky, have had occasion to define the meaning of “agriculture”, “agricultural pursuits”, “engaged in agriculture”, and the like when faced with situations involving Workmen’s Compensation Laws, tax laws, zoning laws, and other statutes using such terminology. Although some definitions have been more restrictive than others, we have not found where any Court has held that the usual practice of animal husbandry is not included within the general term “agriculture”. According to Webster’s Dictionary “animal husbandry” is a branch of agriculture concerned with the production and care of domestic animals.

KRS 342.620 undertakes to define agriculture as follows:

(16) “Agriculture” means the operation of farm premises, including the planting, cultivation, producing, growing, harvesting, and preparation for market of agricultural or horticultural commodities thereon, the raising of livestock for food products and for racing purposes, and poultry thereon, and any work performed as an incident to or in conjunction with such farm operations. It shall not include the commercial processing, packing, drying, storing, or canning of such commodities for market, or making cheese or butter or other dairy products for market.”

Although the reasoning of the Board is not disclosed in its opinion, it would appear that the Board must have taken the position that since boarding of brood mares was not specifically mentioned within the legislative definition of “agriculture”, it should be excluded. If this was the theory of the Board, we believe it to be incorrect. The legislative definition of agriculture is stated in general terms as meaning “the operation of farm premises” and the following enumeration of more specific types of activity to be included within the general term does not have the effect of excluding all that is not mentioned. Particularly is this true when in the same definition the legislature went on specifically to enumerate those activities which were not to be included within the general term. Therefore, the question to be decided by the Court is whether or not feeding, housing, and caring for brood mares is an activity ordinarily and customarily conducted on farm premises and an activity generally recognized as an agricultural pursuit.

It would seem remarkably clear that animal husbandry is an agricultural pursuit and that feeding, housing, and caring for horses is an activity customarily conducted on farm premises and an activity generally recognized as an agricultural pursuit. This being the case, perhaps the Board considered that if the owner and operator of farm premises fed, housed, and cared for horses belonging to someone else for a fee, that this circumstance would change the activity from operation of farm premises to the operation of a “hortel” giving the operation a commercial rather than agricultural connotation. We recognize that in the case of Bob White Packing Company v. Hardy, Ky., 340 S.W.2d 245, (1960), the Court of Appeals decided that it was not just the nature of the work which the employee was doing at the time of the injury that determined coverage, but that the whole character of the employment should be considered' in determining whether a person was employed in agriculture. In that case the employer operated a slaughter house and meat packing company and incidental to that business operated a farm for the keeping and feeding of cattle' until slaughtering time.

We have also considered the case of Barres v. Waterson [Watterson] Hotel Com pany, 196 Ky. 100, 244 S.W. 308 (1922), where the Court in the domestic servant exemption, found that a maid working at a large hotel was not engaged in domestic employment, but industrial employment, even though the actual tasks which she performed were similar to those performed by a domestic servant in a private home.

We think the distinction between those cases and the case at bar is that the packing house business and the hotel business are both well recognized as being commercial and industrial enterprises even though both to some extent utilize agricultural products. However, the “hortel” has not been generally recognized as being a separate and distinct commercial enterprise. While some people may make reference to the race horse “industry”, the definition of agriculture set out in the statute specifically includes the raising of livestock for racing purposes. The “raising” of race horses obviously includes feeding, housing, and caring for brood mares. It would be an illogical and impermissibly narrow distinction to say that raising race horses is agriculture, but that once they are “raised”, (presumably from foal to racing age) their feeding, housing, and care rendered on farm premises becomes a commercial operation.

Neither can this Court find any logical basis for making a distinction based on the ownership of the horses involved. The activity of feeding, housing, and caring for the horses is exactly the same whether the horse is owned by the operator of the farm premises or someone else. The normal routine of farm operation is not changed simply because the farm operator cares for brood mares owned by others in addition to caring for his own brood mares.

Counsel for respondent argues that a “liberal” construction of the statute would authorize the holding of the Board. KRS 342.004 provides that the Act be liberally construed on questions of law, as distinguished from evidence. This requirement is not peculiar to the Workmen Compensation Statute. KRS 446.080(1) requires that all statutes of this state be liberally construed with a view to promote their objects and to carry out the intent of the legislature.

Respondent cites Dick v. International Harvester Company, Ky., 310 S.W.2d 514 (1958) which holds that any doubt as to the scope and application of workmen compensation laws must be resolved in favor of the workman or his dependents. However, the problem with this case is that the plain language of the statute leaves no room for doubt. Where the intention of the legislature is so apparent on the face of a statute that there can be no question as to its meaning there is no room for construction, liberal or otherwise. See Gilbert v. Greene, 185 Ky. 817, 216 S.W. 105 (1919).

While we must keep in mind the humane and beneficent purpose of workmen compensation laws, we must also keep in mind the duty of the Court to construe the law so as to do justice both to employer and employee. The rule of liberal construction does not mean disregard for statute or its repeal under the guise of construction. Kentucky Cardinal Coal Corporation v. Delph, 296 Ky. 295, 176 S.W.2d 886 (1943).

Counsel for respondent stated at the initial hearing before the Board Hearing Officer that it was his intention to persuade the Board to declare race horse farms covered by the Act. We believe this is a matter to be addressed to the legislature and not the Board or the Courts. As a practical matter most of the large race horse farms have come under the Act voluntarily. For the Courts to declare that boarding horses is covered by the Act would impose an unexpected hardship, primarily upon persons operating smaller farms, who have had no legislative notice nor opportunity to obtain insurance coverage. See Robinson v. Lytle, 276 Ky. 397, 124 S.W.2d 78 (1938).

It is the opinion of this Court that this case should be remanded back to the Board with Directions to dismiss the case against the Petitioner, Crestfield Farm, Inc.

The judgment is affirmed.

All concur.


author: PARK, Judge.

text:
    James WIREMAN, Willard G. Stephens, Trustees, and all other trustees, Church of God, Greenup, Kentucky, and Church of God of Greenup, Kentucky, Appellants, v. CITY OF GREENUP, Kentucky, a Municipal Corporation, Appellee.
    Court of Appeals of Kentucky.
    Jan. 19, 1979.

    Rehearing Denied April 6, 1979.
    Discretionary Review Denied June 26, 1979.
    Stanley R. Hogg, Ashland, for appellants.
    Phillip Bruce Leslie, Greenup, for appel-lee.
    Before HAYES, HOWARD and PARK, JJ.

      The decision of the panel was made prior to January 1, 1979, but the opinion was not rendered until this date.

   PARK, Judge.

This case is an appeal from a summary judgment by the Greenup Circuit Court entered in favor of the defendant-appellee, City of Greenup, in an action in which the plaintiff-appellants, Church of God and its trustees, alleged that church property was damaged by excavation for a city sewer line. The city has interposed the defense of sovereign immunity.

On December 19, 1974, the city entered into a contract with C & C Construction Company for improvements to the city sewer system. C & C agreed to perform the construction according to plans submitted by Kenco Associates, Inc., the engineering firm hired by the city.

Although the city was required to furnish the right of way necessary to install the sewer line, the Church of God denies having signed a right of way easement consenting to the construction. However, Kenco’s president, David Osborne, testified that the city had easements executed by the property owners, and an easement agreement purportedly signed by the appellants Wireman and Stephens as trustees of the Church of God is a part of the record.

The Church of God building which was damaged was constructed in 1954 and has a concrete block foundation. The front of the building is approximately eight (8) feet from the property line of the highway. The plans submitted by Kenco indicated that the sewer line and right of way would be located near the front steps of the church building. The Church of God contends that C & C Construction Company changed the proposed location of the sewer line and in fact placed it six (6) feet closer to the building acting on the basis of oral instructions from Kenco. Kenco denied that the position of the pipeline was changed.

C & C excavated a ditch for the pipeline thirty-six (36) inches wide and eight (8) feet deep in front of the church. According to the Church of God, this excavation extended beyond the boundaries of the purported easement and exposed the entire foundation of the building. The front wall of the church collapsed shortly thereafter.

According to the Church of God, the city had been warned by the construction company that moving the pipeline closer to the church could result in damage to the building. Some testimony indicated that the mayor informed the contractors the matter was out of his hands and instructed them to follow the engineer’s orders.

The Church of God filed suit against the City of Greenup for the damage caused to church property. The city denied liability but cross-claimed against C & C Construction Company for indemnity in the event it should be found liable. C & C denied liability and filed a third party complaint against Kenco alleging that Kenpo was liable to them if C & C was found liable to any party. The church subsequently filed an amended complaint which named Kenco as a defendant.

On December 21,1977, after the taking of discovery depositions, the court granted a summary judgment in favor of the city. When a motion to set aside the summary judgment was denied, the church brought this appeal. The church contends that the action taken by the city constituted a trespass in that no right of way easement was obtained before the construction. As a defense to the action, the city raises the doctrine of sovereign immunity.

In Kentucky, the old “governmental-proprietary” distinction regulating municipal tort immunity was discarded in Haney v. City of Lexington, Ky., 386 S.W.2d 738 (1964). However, the court made it clear that immunity would still be available to municipal corporations to protect the city in the exercise of legislative or judicial or quasi-legislative or quasi-judicial functions. 386 S.W.2d at 742. This principle was reaffirmed in City of Louisville v. Chapman, Ky., 413 S.W.2d 74 (1967). However, subsequent decisions have not relied upon these distinctions in redefining the boundaries of sovereign immunity in the wake of Haney and Chapman. Instead, the court adopted a new analysis in City of Louisville v. Louisville Seed Company, Ky., 433 S.W.2d 638 (1968). Although relying on the basic premise that immunity no longer existed as a general rule, the court announced the following principle:

A different situation arises when a claimant seeks to hold the cit; liable for a risk which is inherently part of the carrying on of the function of government, such as its failure to provide fire protection, police protection or, as here flood protection. We refer only to the ultimate failure and not to the situation where the city is engaging in activities with the citizen on a person to person basis . . . Where the act affects all members of the general public alike, it would be unreasonable to apply to it the broad principles of tort liability . . . . But, when the city, by its dealings or activities, seeks out or separates the individual from the general public and deals with him on an individual basis, as any other person might do, it then should be subjected to the same rules of tort liability as are generally applied between individuals.

433 S.W.2d at 643.

More recently, the Supreme Court has held that the nonliability of a city in a tort action need not rest on the doctrine of governmental immunity at all. Frankfort Variety, Inc. v. City of Frankfort, Ky., 552 S.W.2d 653 (1977); City of Russellville v. Greer, Ky., 440 S.W.2d 269 (1969). In the Frankfort Variety case, the court held that the city was not liable for damages suffered due to the negligence of city firemen since the city owed no duty to the appellants. 552 S.W.2d at 655.

In this case, the city was under a duty to the Church of God. The Kentucky Constitution expressly provides, “Municipal and other corporations, and individuals invested with the privilege of taking private property for public use, shall make just compensation for property taken, injured or destroyed by them . . . .” Kentucky Constitution § 242. A number of cases under that section of the Constitution have held municipalities liable under the law of eminent domain or “reverse condemnation” for damage to private property caused by the construction of sewer lines or other public projects. See Blair v. City of Pikeville, Ky., 384 S.W.2d 65 (1964); City of Newport v. Rosing, Ky., 319 S.W.2d 852 (1958); City of Cumberland v. Central Baptist Church, 305 Ky. 283, 203 S.W.2d 57 (1947); City of Covington v. Parsons, 258 Ky. 22, 79 S.W.2d 353 (1935); O’Gara v. City of Dayton, 175 Ky. 395, 194 S.W. 380 (1917).

Where a city takes, injures or destroys private property for a public purpose without making just compensation therefor, the fact that the city may be entitled to plead sovereign immunity as a defense to an action in tort is wholly immaterial. See O’Gara v. City of Dayton, supra. Indeed, there need be no showing of negligence at all, and the city may even be liable for the actions of independent contractors who accurately followed project plans and specifications. City of Covington v. Parsons, supra; see Blair v. City of Pikeville, supra; City of Cumberland v. Central Baptist Church, supra.

The facts of City of Cumberland v. Central Baptist Church, supra, are strikingly similar to the facts of this case. There the City of Cumberland employed an independent contractor to install a sewer line along a street in the rear of the plaintiff church. In doing so, the contractor opened a ditch four (4) feet from the church wall which had the effect of removing the lateral support of the property. Shortly thereafter, a crack in the building appeared which progressively widened until it ultimately required the corner of the building to be reconstructed. The court upheld a verdict for the plaintiff church. 305 Ky. at 285, 203 S.W.2d at 58.

While we are fully aware that the alleged agreement between the parties in this case purports to resolve the question of damages for construction of the sewer line, we do not feel the trial court would be justified in granting summary judgment on that basis alone. First, there is a genuine issue of material fact as to whether there in fact existed a valid easement agreement between the parties. Second, even if the alleged agreement was valid, there was certainly an issue as to whether the sewer line had been moved such that the construction activities may have extended beyond the legitimate scope of the easement. See Blair v. City of Pikevilie, supra, 384 S.W.2d at 68. Third, if the alleged agreement is in fact valid, there clearly remains an issue as to whether the city failed to maintain the easement so as to prevent “unreasonable damage” to the adjacent property of the church. In an analogous situation in Blair, the court stated:

Neither the city nor [the independent contractor] may be absolved from liability on the mere basis that the work was done without negligence according to plans and specifications. First, there must be a determination that the plans and specifications were in furtherance of a reasonable use of the easement, considered in light of the existing use of the property by appellant. It may not be doubted that had the plans required demolition of the residence, a serious question as to their being reasonable would have been presented.

384 S.W.2d at 67.

Because there were genuine issues of material fact, we hold that it was error to grant summary judgment to the City of Greenup. Boyd v. Badenhausen, Ky., 556 S.W.2d 896 (1977); Young v. White, Ky. App., 551 S.W.2d 12 (1977); CR 56.03.

The judgment of the circuit court is reversed for further proceedings consistent with this opinion.

All concur.

      . Although the court was sharply critical of the old governmental-propriety function test in the Louisville Seed Company case, see 433 S.W.2d at 640, fn. 1, it has been suggested that the new test adopted therein is ultimately very similar to the original test. See Richmond’s Adm’r v. Louisville and Jefferson County Metropolitan Sewer Dist., Ky.App., 572 S.W.2d 601 (1978).

      . Despite the apparent failure of the church to proceed on the theory of eminent domain below, we feel justified in raising that issue here since we are merely following the example set by the court in O’Gara v. City of Dayton, 175 Ky. 395, 194 S.W. 380 (1917). Appellate courts are not necessarily restricted to the arguments of counsel but have responsibility to the litigants for resolving cases on their merits. First National Bank of Louisville v. Progressive Casualty Insurance Co., Ky., 517 S.W.2d 226 (1974).

      . The alleged agreement states in relevant part:
      The consideration hereinabove recited shall constitute payment in full for any damages to the land of the GRANTOR, his successors and assigns, by reason of the installation, operation, and maintenance of the structures or improvements referred to herein. The GRANTEE covenants to maintain the easement in good repair so that no unreasonable damage will result from its use to the adjacent land of the GRANTOR, his successors and assigns (emphasis added).


author: MARTIN, Chief Judge.

text:
    AMERICAN COMMERCIAL LINES, INC., Appellant, v. John Thomas OSTERTAG, Appellee.
    Court of Appeals of Kentucky.
    Jan. 26, 1979.

    As Modified Feb. 9, 1979.
    Rehearing Denied March 9, 1979.
    Discretionary Review Denied June 26, 1979.

      William P. Swain, James M. Graves, Wesley G. Gatlin, Louisville, Boehl, Stopher, Graves & Deindoerfer, Louisville, for appellant.
    Gary L. Gardner, Louisville, for appellee.
    Before MARTIN, C. J., and PARK and LESTER, JJ.

       The decision of the panel was made prior to January 1, 1979, but the opinion was not rendered until this date.

   MARTIN, Chief Judge.

This is an appeal from a Jefferson Circuit Court jury award to appellee John Ostertag for injuries he received while working on a barge owned by E. I. duPont de Nemours, Inc. DuPont had leased the barge to the appellant, American Commercial Lines, Inc. (hereafter ACL), which had in turn leased it to its wholly-owned subsidiary, Inland Tugs, Inc. While Ostertag was cleaning the barge as it was passing Angola, Louisiana, on the Mississippi River, he was overcome by sulphuric acid fumes. He brought this action pursuant to Federal Maritime Statutes commonly referred to as the Jones Act, naming only ACL as a defendant.

Upon the filing of the complaint in the Jefferson Circuit Court, Ostertag attempted to serve ACL under the long-arm statute, KRS 454.210. In addition to this attempted service, Ostertag also served a summons on another subsidiary corporation of ACL, the Port of Louisville Terminal, Inc. Service of summons was also made on Floyd H. Blaske, a.Jefferson County, Kentucky resident and the chief executive officer of Inland Tugs, an Indiana corporation with principal offices in Jeffersonville.

Prior to trial, counsel for appellant moved to dismiss the action on the grounds of lack of jurisdiction over ACL and appellee’s alleged failure to sue the proper party. The trial judge reserved ruling on the motions until the completion of the voluminous testimony at the trial. The trial judge then decided that the plaintiff’s theory of jurisdiction was the controlling law of the case. That theory was that the corporate structure of ACL was a sham, and that ACL and not Inland Tugs was the proper party defendant. The trial court concluded that it had jurisdiction over ACL, a Delaware corporation, by a service of process on Port of Louisville Terminal, Inc., another of ACL’s wholly-owned subsidiaries. Having pierced the corporate veil of ACL’s subsidiary structure, the Court found that it had jurisdiction over ACL because Port of Louisville Terminal, Inc. was transacting business in Jefferson County.

The Jones Act creates concurrent jurisdiction in the state and federal courts to hear injury claims by employees of maritime companies, including those operating on inland waterways. Garrett v. Moore-McCormack, 317 U.S. 239, 63 S.Ct. 246, 87 L.Ed. 239 (1942); The J. F. Card, 43 F. 92 (E.D.Mich., 1890). Hence, Kentucky state courts have subject matter jurisdiction over this “type of case.” Duncan v. O’Nan, Ky., 451 S.W.2d 626 (1970). However, the trial court based its assumption of jurisdiction over ACL on a theory of substantive corporate law. A very well-reasoned statement of the Kentucky law on this issue is found in Poyner v. Lear-Siegler, Inc., 542 F.2d 955, 958 (6th Cir. 1976):

The approach of the Kentucky courts to piercing the corporate veil has been described as evincing “a general aversion for any disregard of the corporate entity.” Campbell, “Limited Liability for Corporate Shareholders: Myth or Matter-of-Fact,” 63 Ky.L.J. 23, 48 (1975). Poy-ner argues that we should expand the doctrine of Minton v. Cavaney, 56 Cal.2d 576, 15 Cal.Rptr. 641, 364 P.2d 473 (1961), which provides that the corporate veil should be pierced if a corporation is grossly undercapitalized, see 1 Fletcher, Cyclopedia of the Law of Private Corporations § 44.1 (1974), and apply it to this case because LSI “has refused to risk any of its subsidiaries’ assets in this country.” But Poyner has cited no cases, and we have found none, in which the Kentucky courts have followed the growing trend of denying corporate entity treatment for inadequate capitalization, except in the event of fraudulent reorganization. E. g., Harlan Pub. Svce. Co. v. Eastern Constr. Co., 254 Ky. 135, 71 S.W.2d 24, 29 (1934). We do not believe that the Kentucky courts would so extend a doctrine which they have not yet adopted in its basic formulation.

Apparently, several points brought out during the course of the trial led the court to the determination that the parent-subsidiary relationship of ACL and Inland Tugs was a sham. Three of the five directors on the Board of Inland were also directors of ACL, thereby controlling Inland’s policy. Also, there were no formal documents of the barge leases between ACL and Inland. Further, all of Inland’s assets were pledged in ACL’s credit agreement with the Chase-Manhattan Bank. ACL paid, but was reimbursed by Inland, on Inland’s policies of insurance. Finally, it appeared from the record that the trial court was sympathetic to the plight of Os-tertag, who apparently had a valid cause of action, but who was confronted with a maze of potential corporate defendants.

However, our review of the record clearly establishes that the factors in favor of Inland’s corporate status clearly outweigh those mitigating against it. There was no evidence that ACL exercised its control as the sole stockholder of Inland Tugs to frustrate recovery for injuries to barge employees regardless of the merits of their claims. The record further revealed that Inland had its own bank accounts, issued its own financial statement, operated out of its own offices, and negotiated its own labor contracts. Furthermore, Inland had approximately 900 employees and appeared from the record to have vast assets of its own that the plaintiff could have sought. The trial court should have noted that common directorships and joint credit agreements are an inevitable consequence of a parent-subsidiary relationship. Thus it should have been clear to the appellee that his de facto employer was the corporation with which he negotiated his terms of employment and by whom he was paid, Inland Tugs, and not ACL.

The failure of Ostertag to sue his employer, Inland Tugs Company, defeats any jurisdiction which may have been vested in the Jefferson Circuit Court. As was pointed out in Haskins v. Point Towing Co., 421 F.2d 532 (3rd Cir. 1970), cert. denied 400 U.S. 834, 91 S.Ct. 68, 27 L.Ed.2d 66 (1970), at page 536:

A primary prerequisite to any recovery under the statutory scheme of compensation provided by the Jones Act, 46 U.S.C. § 688 (1964), is the establishment by the seaman of an employer-employee relationship with the defendant. Rights given under the Act are an outgrowth of the peculiar condition of a seaman’s employment .

Thus, Ostertag has failed to establish jurisdiction in the Jefferson Circuit Court to prosecute his claim against ACL. His claim should have been brought against his employer, Inland Tugs Company, a validly created corporation operating in conformity with United States Maritime Laws. Having no jurisdiction over the named parties, the Jefferson Circuit Court should have dismissed the complaint.

The judgment of the Jefferson Circuit Court is reversed.

PARK, J., concurs with the result only.

      . 46 U.S.C.A. § 688 (1964). Recovery for injury to or death of seaman.

      Any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law, with the right of trial by jury, and in such action all statutes of the United States modifying or extending the common-law right or remedy in cases of personal injury to railway employees shall apply; and in case of the death of any seaman as a result of any such personal injury the personal representative of such seaman may maintain an action for damages at law with the right of trial by jury, and in such action all statutes of the United States conferring or regulating the right of action for death in the case of railway employees shall be applicable. Jurisdiction in such actions shall be under the court of the district in which the defendant employer resides or in which his principal office is located. (Emphasis added.)


text:
    Matthew McINTOSH, Appellant, v. COMMONWEALTH of Kentucky, Appellee. William ROBERTS, Appellant, v. COMMONWEALTH of Kentucky, Appellee. and Clyde ROBERTS, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    Feb. 9, 1979.
    Rehearing Denied April 13, 1979.
    Discretionary Review Denied May 15 and June 26, 1979.

      Jack Emory Farley, Public Advocate, Edward C. Monahan, Asst. Public Advocate, Frankfort, for appellant, Matthew McIntosh.
    Jack Emory Farley, Public Advocate, M. Gail Robinson, Asst. Public Advocate, Frankfort, for appellant, William Roberts.
    Jack Emory Farley, Public Advocate, Linda K. West, Asst. Public Advocate, Frankfort, for appellant, Clyde Roberts.
    Robert F. Stephens, Atty. Gen., Reid C. James, Asst. Atty. Gen., Frankfort, for ap-pellee.
    Before MARTIN, C. J., and HOWERTON and LESTER, JJ.
   LESTER, Judge.

These three appeals emanate from judgments of conviction which had their inception in a single indictment containing two counts charging each of the appellants with wanton endangerment in the first degree and criminal mischief in the first degree. Different penalties were assessed. Although three separate appeals were taken, the Lee Circuit Court conducted but one trial.

On July 2, 1977, during late afternoon hours, the Lee County Judge/Executive, Douglas Brandenburg, and his father, Dempsey, went to a remote area along the South Fork of the Kentucky River for the purpose of launching their boat in order to check their fishing “setouts”. Upon their arrival at the parking area adjacent to the launching site, they stopped the pickup truck in such a way that one of the tires was situated in a depression or “chuckhole”. Before leaving the vehicle, Douglas put it in gear and locked the doors with the windows up. A twenty-five caliber pistol was in the glove compartment. Next to the Brandenburg truck was another pickup which, as it later developed, belonged to one of the appellants.

After alighting from the vehicle, the Brandenburgs observed Matthew McIntosh, Clyde Roberts, William Roberts, and Donald Gilbert who had been attempting to repair an outboard motor and, being unable to do so, had gone swimming. Douglas exchanged pleasantries with the group, inquired if he could help them with the motor, and receiving a negative reply, he and his father launched their boat and pulled away from the shore.

The father and son floated a distance of some thirty to fifty feet to the location of the second fish “set-out” when Clyde Roberts fired two shots at them, the first of which missed Douglas’ “head approximately a foot or maybe a little farther.” He testified, “I did hear the bullet go by.” Both of the men clearly identified Clyde as the person who did the shooting since the distance between the boat and appellant was short and the view uninterrupted. On the other hand, neither of the Brandenburgs said that William or Matthew took any part in the shooting portion of the affray.

The next observation made by Douglas and Dempsey was that all three appellants were attempting to push the Brandenburg truck by hand, but due to its weight and the fact that it was parked with one wheel in the depression and in gear, they were unable to move it. At this point, William Roberts used a rock to break out the windshield and the glass on the driver’s side and to dent the roof.

Without actually seeing what occurred, Douglas heard something hitting his truck which he thought to be the other pickup. The next action the complainant saw was his truck rolling backwards over the brink of the hill at the edge of the parking area and then descending into the river for a total distance of about forty-five feet where it came to rest upon some tree stump roots, partially submerged with the grill sticking straight up in the air. Before getting out of the boat, Douglas heard “more than one voice” yell, “Judge, you God damn son-of-a-bitch, come on up here, we want to kill you.” No identification of the voices was made. The appellants were seen leaving in their truck. Repairs amounted to $1,494.77.

Dempsey Brandenburg identified William Roberts as the one who drove one truck into his son’s pickup in an effort to push the latter vehicle into the river.

McIntosh was arrested on the evening of the incident, while Clyde and William Roberts were apprehended at a later date in Middletown, Ohio, where they said they had gone to seek employment.

Appellants’ version of the incident parallels that of the Brandenburgs to the point where the latter pushed off from shore. The defendants below claimed none of them could have fired shots because they did not have a gun and that what the two men in the boat heard was Clyde slapping the water with a paddle. They denied any participation in the damage to or moving of the truck and content themselves with testifying that while they were below the parking area on the shore of the river, they heard an unseen car drive to the immediate area, and a short time later they saw the truck rolling over the bluff. At that point, they decided to leave hurriedly because, since the Brandenburgs had known them to be present, they thought they would get the blame. Moreover, they had been drinking and they feared that they would be charged with some alcoholic beverage offense.

THE INDICTMENTS

After generally reciting the provisions of the wanton endangerment (first degree) and criminal mischief (first degree) statutes, each count contained the following:

and each of said defendants, aided, abetted and assisted each other in so doing against the peace and dignity of the Commonwealth of Kentucky.

There was no separate count or indictment charging complicity, (KRS 502.020).

THE INSTRUCTIONS

An instruction on wanton endangerment in the first degree only was given which included reasonable doubt and the definition of “wantonly” and of “serious physical injury.” The criminal mischief in the first degree instruction recited the language of the statute and also contained a paragraph on reasonable doubt. On the first count, the jury fixed the punishment for McIntosh and William at one year and Clyde at five years. On the second count, each appellant was assessed three years and the judgment ordered all terms to be served consecutively-

No complicity instruction was given.

As to the appellants, William Roberts and Matthew McIntosh, there is not one shred of evidence that they participated in the wanton endangerment of one or either of the Brandenburgs; there is not one scintilla of 'testimony or circumstantial evidence reflecting a prearrangement, mutual understandings, concert of action, overt act, or an encouragement by expression, advocacy or sympathy by them of Clyde’s act; there was no instruction given as to any type of complicity on their parts; and, in general, the record is completely void as to any participation by them in the shooting. The appellee would have us sustain their convictions upon this charge because their conduct constitutes a “wanton encouragement of Clyde Roberts’ actions”, but it presented nothing to the trial court to support its contention. The Commonwealth urges us to view the evidence as a whole, Trowel v. Commonwealth, Ky., 550 S.W.2d 530 (1977), and find a single concerted effort on the part of all three, while conceding that we are dealing with two separate offenses. Without finding proof of one or more of the elements hereinbefore set out (as found in Warfield v. Commonwealth, Ky., 334 S.W.2d 913, 914 (1960)), we must adhere to the rule of Moore v. Commonwealth, Ky., 282 S.W.2d 613 (1955), and Rose v. Commonwealth, Ky., 385 S.W.2d 202 (1964), to the effect that absent a showing of other facts and circumstances connecting a defendant with the affray, the mere presence at the scene of a crime is not sufficient to attach guilt to the accused. As indicated before, there being no instruction as to complicity, the jury is prohibited from considering that aspect regarding the wanton endangerment charge. The record contains no evidence which would bring this aspect of the appeal within the exceptions delineated in Hunt v. Commonwealth, Ky., 483 S.W.2d 128 (1972). The motion for a directed verdict of acquittal should have been granted as to appellants William Roberts and Matthew McIntosh. The judgment convicting Roberts and McIntosh of wanton endangerment is reversed. A new trial of these appellants on this charge is precluded by the double jeopardy clause. U. S. v. Burks, 437 U.S. 1, 98 S.Ct. 2141, 57 L.Ed.2d 1 (1978).

Clyde Roberts raises no question as to the sufficiency of the evidence on the wanton endangerment charge, but does contend that he was entitled to an instruction on second degree wanton endangerment. The higher degree (KRS 508.060) envisions the offense committed where “under circumstances manifesting extreme indifference to the value of human life” the actor “wantonly engages in conduct which creates a substantial danger of death or serious physical injury to another person.” On the other hand, second degree requires only the creation of a “substantial danger of physical injury.” For the purposes pertinent hereto, KRS 500.080(13) defines physical injury as meaning substantial physical pain or any impairment of physical condition. The evidence placed the Branden-burgs in a boat only thirty to thirty-five feet distant from Clyde when he fired what was thought to be a .38 caliber weapon at them, with one projectile missing Douglas’ head by only twelve to eighteen inches. These facts, coupled with the threat that someone wanted to kill the judge, would allow no other conclusion than that Clyde wantonly engaged in conduct which created a substantial risk of death or serious physical injury. When the defendant fired the weapon at the relatively short distance, not once but twice, it is difficult to conceive any other circumstance than an “extreme indifference to the value of human life.”

Clyde urges that Luttrell v. Commonwealth, Ky., 554 S.W.2d 75 (1977), and Martin v. Commonwealth, Ky., 571 S.W.2d 613 (1978), support his position. We disagree. In Luttrell, supra, there was evidence from which a reasonable juror might infer that the actor fired the weapon not for the purpose of killing the police officer, but only to inflict an injury thus permitting an escape. In Martin, there was evidence to support the story that the appellant entered and remained unlawfully in a dwelling house without intent to commit a crime therein (at night). From the testimony in the appeal at bar, there is no evidence that Clyde had any intention in firing at the boat other than to inflict serious physical injury or to bring about a death.

Martin stands for the principle that,

[i]t is always the duty of a trial court to instruct a jury on lesser included offenses when it is so requested and it is justified by the evidence. (Emphasis added). Id. at 615.

There was no such justification by the evidence in the present instance, and therefore, Trimble v. Commonwealth, Ky., 447 S.W.2d 348 (1969), and Isaacs v. Commonwealth, Ky., 553 S.W.2d 843 (1977), are inapplicable.

The offenses charged in the indictment were committed July 2,1977, with the trial date being set for November 15th. Upon motion of defendants, the case was continued until November 23, 1977, upon which date the defense presented a petition for change of venue supported by two affidavits. In order to remove a trial from the county in which an offense has occurred, the provisions of KRS 452.220(2) govern and compliance therewith is mandatory. Caine v. Commonwealth, Ky., 491 S.W.2d 824 (1973). Among other requirements, it is necessary that the affidavits must state that the affiants are of no kin to the defendants and that they are acquainted with the state of public opinion in the county; further, reasonable written notice must be given to the Commonwealth Attorney. The record herein does not reveal whether one of the affiants, Wanda McIntosh, was related to the appellant of the same surname, but in any event, both of the sworn documents say that the complaining witness was the Lee County Judge, that he had recently been overwhelmingly reelected as such and

[i]t is probable that any jury panel drawn from Lee County would tend to believe the testimony of the County Judge and witnesses on his behalf simply becouse (sic) of his position to the detriment of defendants, irrespective of the truth.

We believe that the affidavits fell short of complying with the requisite that those executing them be acquainted with the state of public opinion in the county. It is not uncommon that if a panel of veniremen is exhausted that other potential panel members be called. When it appears that one list of names drawn for jury duty may be insufficient it does not in and of itself reflect the state of public opinion in the entire county.

The most blatant error on appellants’ part is that the petition showed no prior notice of the application to the prosecutor, and that it was filed on the opening day of trial. Since far in excess of four months expired between the offense and the trial, we deem the filing to be unreasonable and it was properly overruled. Bryant v. Commonwealth, Ky., 467 S.W.2d 351 (1971).

As stated above, the trial commenced on November 23, 1977, and at the close of that day, was recessed until November 28th. On the 23rd, defense counsel moved for a continuance because he had just learned the whereabouts of Donald Gilbert, who was the fourth member of appellants’ group at the scene of the affray on the previous July 2nd. A subpoena was issued on the 23rd in order that the defense could use Gilbert as a witness, but since no affidavit was submitted showing what facts it was believed the witness would prove, the motion was properly overruled at the time. RCr 9.04. The same motion was made again on the morning of the 28th and again no affidavit was filed and the court denied the continuance. There was no error or abuse of discretion. RCr 9.04. It should be noted that the defendants had neither made any effort to find and interview Gilbert between early July and the trial nor had they even checked the clerk’s office for a return on their subpoena at the time they asked for a continuance on the second occasion. As to the duty imposed upon the defense in a situation involving an absent witness, see Cornwell v. Commonwealth, Ky., 523 S.W.2d 224 (1975).

After both litigants had announced that their respective cases were closed, the appellants presented a handwritten affidavit, signed by Clyde Roberts, purporting to contain what Gilbert would testify to if present. The contents of the affidavit do not vary, add to, or delete from what had already been testified to by the appellants. After a motion was made to read the document to the jury, the Commonwealth objected and the motion was denied. Appel-lee argues that since the affidavit was merely cumulative that, if any error there might have been, it was harmless. Matthew McIntosh contends that since he and his codefendants were the only other witnesses who testified to the facts set out in the affidavit, then Gilbert’s testimony was not cumulative, citing Smith v. Commonwealth, 301 Ky. 364, 192 S.W.2d 92, 93 (1946). Let us examine that authority.

In February, 1945, a murder charge against Tipton Smith was called for trial. His coindictee, Liza Cotton, was to have a separate trial. The defendant announced ready for trial, but the Commonwealth was granted a continuance. One of the witnesses for the defense, M. C. Smith, was present and recognized to appear at the May term of court, but he was drafted into the army in March, 1945. The defendant was unaware of the induction and unable to determine the location of his witness. Tipton Smith moved for a continuance or for permission to read the affidavit to the jury as to what would be the testimony of M. C. Smith. Both were denied and upon appeal, the conviction was reversed. In its opinion, the Smith court said:

In brief of Commonwealth it is claimed that the evidence of the absent Smith would have been merely cumulative. That position is not well taken in view of the fact that the only other defense witnesses who testified about the same facts as set out in the affidavit, were the defendant and Liza Cotton, who were under joint indictment. 192 S.W.2d at 93.

However, the court went on to say:

At a time when boys were being inducted into the Army by rapidly successive calls, to impose upon the defendant the duty of watching the calls of the draft board and the use of other means and methods to ascertain the time of call would be an unjustifiable requirement. The least that should have been done with this disabled veteran would have been to admit the affidavit subject to competency, and if the Commonwealth then elected to go to trial, thereafter to permit the reading of the affidavit. 192 S.W.2d 93-94.

Thus, we note that the court recognized the unjustifiable duty that would have been imposed upon the defendant in Smith, as well as suggesting a proper method for getting the affidavit to the jury. If we were to apply the rationale of Smith to the different facts in the case at bar, we would be overlooking the mandate of RCr 9.04 that an affidavit be furnished at the time of the motion for a continuance, as well as the duties imposed upon a defendant as are required by Cornwell, supra. In Smith, at least there was an affidavit available to admit, subject to competency, which would have permitted the Commonwealth to make its election as to whether to go to trial or not. In this case, there was no affidavit furnished until the close of all the evidence.

In Smith, there was a circumstance over which the appellant had no control, namely, the draft, and the inability to locate his witness. In this case, the appellants were fully aware that Gilbert was with them on July 2, 1977, and from that time until November 23, 1977, there is nothing in the record to indicate that any effort was made to find him. On the evening of November 22, 1977, appellants learned that their witness was in Grant County, Kentucky, and between that date and when they presented their evidence (Nov. 28th), no effort was made to communicate with him or for that matter to learn the result of their effort to subpoena him. We do not believe that Smith, supra, governs this appeal and we see no abuse of discretion in refusing the reading of the affidavit to the jury. If any, the error was harmless.

Without elaborating, the affidavit process, because it applies only to a defendant, might be constitutionally suspect for want of equal protection and reciprocal due process of law, for if the prosecution stipulates the contents of an affidavit, it must forego its procedural right of cross-examination. Cf. Wardius v. Oregon, 412 U.S. 470, 93 S.Ct. 2208, 37 L.Ed.2d 82 (1973).

Appellants, McIntosh and William Roberts, claim a denial of due process in that the court limited their questions upon voir dire examination of the potential jury. Some fifty-three veniremen were called and the defendants struck seventeen out of the possible eighteen allotted to them. Voir dire examination consumed eighty-five pages of transcript, which was seven more than necessary for the actual testimony.

Defense counsel sought to ask certain questions of particular jurors and the court imposed limitations, but since those particular panel members were excused by either the court, the prosecution, or the defense, we see no error on this issue. Complaint is further made that some general questions were refused, but in each instance, the court found fault not with the content but with the form of inquiry. In each instance, the court explained the interrogatory and rephrased it and no objections were made.

Appellants argue that wide latitude should be given in the examination of potential jurors, but a review of the transcript fails to demonstrate that any greater latitude could be extended by the court. It should be remembered that in this jurisdiction the examination of the panel by the attorneys is a privilege and not a right, RCr 9.38, and when counsel are permitted to conduct their own examinations, they may be restricted by the court, Woodford v. Commonwealth, Ky., 376 S.W.2d 526 (1964). It has long been the rule that the trial judge has broad discretionary power in ascertaining the fitness of jurors. Williams v. Commonwealth, 254 Ky. 647, 72 S.W. 31 (1934). There was no abuse in this cause.

Appellants McIntosh and William Roberts urge reversal because of ineffective assistance of counsel in that the three defendants had retained two lawyers to conduct their defense, possibly resulting in conflicts. We deem it unnecessary to resolve this with relation to the charge of wanton endangerment in view of our conclusion that the judgments of conviction must be reversed as to these appellants.

By way of brief, the defendants below argue that there was also doubt about whether they were the ones who interfered with the truck. Other than a temporary misidentification occasioned by not knowing the correct first names of the parties upon the part of one witness, there never was any doubt that all three of the appellants participated in the malicious mischief. Their sole defense was that they didn’t do it, and since they could all be observed in the commission of the act, we perceive no actual or potential conflict of interests.

Regarding what separate attorneys could or could not have argued at the sentencing state of the proceedings, we have no comment, for there was no transcript of those procedures and we are unprepared to say counsel were ineffective when we have no knowledge of what transpired. This point is too conjectural.

As a general rule, adequacy of counsel is not reviewable on direct appeal, Bishop v. Commonwealth, Ky., 549 S.W.2d 519 (1977), and any errors in that regard must be preserved at the trial level before an appellate court may deal with the subject (which was not done in the instant case). We have made some general comments upon the subject in order to avoid further judicial proceedings.

The last assignment of error is prosecutorial misconduct, based upon four instances during either cross-examination or summation. One alleged erroneous remark was made during final argument to which no objection was made and we are precluded from review. McDonald v. Commonwealth, Ky., 554 S.W.2d 84 (1977). Another complaint revolves around the prosecutor’s questioning about the .25 caliber pistol missing from the Brandenburg truck, implying that one or more of the appellants had taken it. Even though the Commonwealth made it clear that no one was charged for such a theft there is no prohibition against introducing evidence tending to prove the crime charged in spite of the fact that the testimony may also show the commission of another offense. Panky v. Commonwealth, Ky., 485 S.W.2d 513 (1972).

We have reviewed the two remaining points in the testimony and the argument and find no merit in appellants’ contentions, for there is no evident prejudice to their cases.

The judgments of conviction of Matthew McIntosh and William Roberts for wanton endangerment in the first degree are reversed, and in all other respects the judgments are affirmed.

All concur.


text:
    Herbert Donley BARTRUG, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    March 16, 1979.
    Discretionary Review Denied June 26, 1979.

      Alan Kent Akers, Bardstown, for appellant.
    Robert F. Stephens, Atty. Gen., Reid C. James, Asst. Atty. Gen., Frankfort, Richard S. Barlow', Commonwealth Atty., Bards-town, for appellee.
    Before Martin, C. J., and HOGGE and VANCE, JJ.
   MARTIN, Chief Judge.

Herbert Donley Bartrug, appellant, was indicted by the Nelson County Grand Jury on November 8, 1976, for the offense of murder in violation of KRS 507.020. Specifically the indictment charged that, “On or about the 15th day of June 1976, in Nelson County, Kentucky, the above named Defendant committed the crime of murder in that with intent to cause the death of another person, to-wit: Yvonne Hardin Thornsberry, he did shoot the said Yvonne Hardin Thornsberry with a .25 caliber automatic pistol from which wounds the said Yvonne Hardin Thornsberry did die.”

Appellant, who was wounded in the shooting incident, was transported that same day to the Veterans Administration Hospital in Louisville for treatment of his wounds. An arrest warrant and bench warrant charging the appellant with murder, issued on June 16, 1976, the day after the shooting, and on December 13, 1976, respectively, were not executed until March 22, 1977, the time of appellant’s return to Nelson County from the Veterans Administration Hospital.

Appellant was tried by jury in the Nelson Circuit Court on June 29-30,1977, adjudged guilty of first degree manslaughter and sentenced to the maximum term of imprisonment for that offense, twenty years. Final judgment was entered on July 13, 1977. Appellant was credited with forty-one days toward service of his maximum term of imprisonment for the time he spent in custody prior to his commencement of sentence. The record reveals no objection by the appellant to the final judgment at the time of sentencing.

Appellant appealed his conviction to the Kentucky Supreme Court. The crediting of time spent in custody prior to trial was not discussed or raised in that appeal. Appellant’s conviction was affirmed. Bartrug v. Commonwealth, Ky., 568 S.W.2d 925 (1978).

A pro se petition for federal habeas corpus relief based on that decision was filed in the United States District Court for the Western District of Kentucky at Louisville on August 24, 1978, and subsequently dismissed on October 6, 1978, as being devoid of a substantial federal question. Herbert Donley Bartrug v. Dewey Sowders, Superintendent, No. C 78-0337-L(B) (W.D.Ky. Oct. 6, 1978).

On June 2, 1978, appellant filed a motion in the Nelson Circuit Court to amend the judgment pursuant to CR 60.02. He sought credit on his sentence for the 278 days he spent at the Veterans Administration Hospital in Louisville. A hearing was conducted on this motion on June 12, 1978. An order overruling the motion was entered June 29, 1978. It is from this order that appellant appeals.

Arguing due process and equal protection grounds, appellant contends the trial court erred when it refused to credit him with 278 days toward the service of his maximum term of imprisonment. Although conceding that no warrant for his arrest was executed prior to his return to Nelson County on March 22, 1977, the appellant contends that the period of time he spent in the hospital recovering from a wound sustained in the incident resulting in his indictment for murder amounted to “custody,” and he was entitled to a crediting of this time under KRS 532.120(3).

Appellant argues the notification by the Kentucky State Police to the Veterans Administration Hospital in Louisville constitutes detention. They were advised appellant had outstanding an arrest warrant for murder and that they would appreciate notification upon his release from the hospital. However, Detective William Feltner testified at the hearing the hospital informed him they had no security and could hold no one against their will. There also was no court order outstanding requiring the hospital to hold or detain the appellant. Detective Feltner testified the hospital did no more than agree to notify him when the appellant could be released. He indicated he did not serve the warrant because he felt appellant’s physical condition precluded his leaving the hospital, and because the state police would have been required to guard him had the warrant been executed upon him while he was hospitalized.

KRS 532.120(3) provides:

Time spent in custody prior to the commencement of a sentence as a result of the charge that culminated in the sentence shall be credited by the court imposing sentence toward service of the maximum term of imprisonment. If the sentence is to an indeterminate term of imprisonment, the time spent in custody prior to the commencement of such sentence shall be consdiered for all purposes as time served in prison. (Emphasis added).

Unless there exists some constitutional or statutory limitation, the sentencing power in Kentucky is discretionary with the trial judge. Tarrance v. Commonwealth, Ky.App., 548 S.W.2d 147 (1977). Based upon the mandatory language of this statute, the word “shall” precludes any discretion on the part of the trial court in crediting time for preconviction custody. KRS 446.010(29). The issue before us is whether the appellant’s stay at the Veterans Administration Hospital constituted custody within the meaning of KRS 532.-120(3).

The word “custody” is defined in KRS 520.010(2) as “restraint by a public servant pursuant to a lawful arrest, detention, or ah order of court for law enforcement purposes . . . In the present case there was neither a lawful arrest, nor detention, nor an order of court. The request by Detective Feltner that he be notified when the appellant would be released from the hospital, and the hospital’s agreement to do so, did not amount to the restraint contemplated by the “in custody” as provided in KRS 532.120(3).

Appellee does not suggest that one cannot be “in custody” in a hospital setting. Had the appellant been arrested prior to his hospitalization, or at any time during his hospitalization, he would have been entitled to credit for that period of time in which he was in custody, provided he was not free on bond, had been released on his own recognizance, or otherwise released pending trial. However, the Commonwealth had no duty to execute the warrant at the time of its issuance. There is no constitutional right to be arrested. Hoffa v. United States, 385 U.S. 293, 310, 87 S.Ct. 408, 17 L.Ed.2d 374 (1966).

This issue is one of first impression in the Commonwealth; however, several jurisdictions have held that time spent in a hospital while under arrest or involuntarily confined must be credited toward service of the term of imprisonment. People ex rel. Higgins v. Close, 12 Misc.2d 176, 176 N.Y.S.2d 711 (1958); People v. Cowsar, 40 Cal.App.3d 578, 115 Cal.Rptr. 160 (1974); People v. Gravlin, 52 Mich.App. 467, 217 N.W.2d 404 (1974); State v. La Badie, 87 N.M. 391, 534 P.2d 483 (1975). See generally Annot., 77 A.L.R.3rd 262 (1977), entitled “Time Credit for Preconviction Custody,” § 16(b), pp. 262-266.

However, in the present case there was no arrest made prior to the appellant’s release from the hospital. He was confined under no court order. His coming and going was limited only by his physical condition. There was no legal restraint upon appellant, and he could have left the hospital at any time. Had he left, the Commonwealth could not have charged him with an escape offense under KRS Chapter 520.

North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969), is of little assistance in resolving the issue now before this court. It dealt with constitutional restrictions upon the implementation of a harsher sentence upon retrial and conviction, not the situation presented by the present case. However, even accepting appellant’s argument in this regard, he has not shown that his hospital stay amounted to custody within the meaning of KRS 532.-120(3).

Appellant has conceded that the issuance of an arrest warrant is insufficient to constitute custody. Certainly, therefore, the hospital’s simple consent to notify the state police when the appellant would be released was also insufficient to constitute custody. He was not confined to the Veterans Administration Hospital, nor was he there for the purpose of punishment, nor as part of his punishment for the commission of a crime with which he was charged. Thus there was no custody related to his guilt for which he need be given credit as time served.

The judgment of the Nelson Circuit Court is affirmed.

All concur.


author: HAYES, Judge.

text:
    OHIO SECURITY INSURANCE COMPANY, Appellant, v. Francis W. DRURY and Insurance Company of North America, Appellee. MOTORIST MUTUAL INSURANCE COMPANY, Appellant, v. EQUITY MUTUAL INSURANCE COMPANY, Appellee.
    Court of Appeals of Kentucky.
    April 6, 1979.
    Discretionary Review Denied June 26, 1979.

      Lee E. Sitlinger, John L. Bennett, Hogan, Taylor, Denzer & Bennett, Louisville, for appellant, Ohio Sec. Ins. Co.
    William A. Miller, Louisville, John H. Rompf, Jr., White, McCann & Stewart, Winchester, for appellant, Motorist Mut. Ins. Co.
    Kenneth L. Anderson, Woodward, Hob-son & Fulton, Louisville, for appellee, Ins. Co. of North America.
    Elwood Rosenbaum, Natalie S. Wilson, Eblem, Milner, Rosenbaum & Wilson, Lexington, for appellee, Equity Mut. Ins. Co.
    Kevin A. George, Eli J. George, Jr., Louisville, for appellee, Francis W. Drury.
    Before HAYES, REYNOLDS and WIL-HOIT, JJ.
   HAYES, Judge.

These two cases have been heard together by this court because they have a common issue, that being, whether a reparations obligor which has paid basic reparations benefits, or personal injury protection [hereinafter called PIP] to the party not-at-fault in the automobile accident is entitled by KRS 304.39-070 to a recovery of those benefits from the liability insurer of the tort-feasor. The trial courts, in both cases, answered affirmatively, and so do we.

In the Ohio Security Insurance Company case appellee Drury’s automobile was hit from the rear by an auto driven by Wessel. Drury was insured by appellee, Insurance Company of North America [hereinafter called INA], the basic reparations obligor. Wessel was insured by Ohio Security under a policy which provided $10,000.00 coverage for bodily injury caused by the negligence of Wessel.

Drury collected the maximum basic reparation benefits ($10,000.00) under the policy he had with INA and he then filed a cause of action against Wessel for $60,000.00 for injuries suffered in the accident.

Ohio Security offered to settle out of court with Drury for the Wessel policy limits of $10,000.00. INA intervened under authority of KRS 304.39-070(3) and asked for recovery from Ohio Security of the $10,-000.00 INA had paid Drury in PIP benefits.

The trial court, in a thorough and well-reasoned opinion, determined that Ohio Security owed Drury the $10,000.00 limits (it was stipulated that Drury’s case was worth far in excess of the $10,000.00 limits) under Wessel’s liability policy, and Ohio Security owed INA the $10,000.00 basic reparation benefits INA had previously paid to Drury. In effect Ohio Security was required to pay out $20,000.00 on a policy with a limit of only $10,000.00.

In the Motorist Mutual Insurance Company case, the automobile of Lillian Hatton was struck from the rear by a vehicle driven by Billie Farris, against whom Hatton subsequently filed a law suit demanding $146,500.00 for the permanent injuries she sustained in the accident. Farris was insured for liability by Motorist Mutual to a $25,000.00 limit. Hatton was insured by Equity Mutual Insurance Company for basic reparation benefits of $10,000.00.

Equity Mutual intervened in the suit by Hatton against Farris and asked that the benefits it had paid Hatton be reimbursed by Motorist Mutual. Prior to trial, the Hat-ton claim against Farris was settled for $23,000.00. The trial court thereafter signed a judgment ordering Motorist Mutual to pay Equity Mutual the $10,000.00 Equity Mutual had paid to Hatton as basic reparation benefits. In effect, Motorist Mutual paid out $33,000.00 on a policy with a $25,000.00 exposure.

It is not disputed by any of the parties in either the Ohio Security case or the Motorist Mutual case that the clear language of the particular insurance policy involved limits the total bodily injury liability to $10,-000.00 for Ohio Security and $25,000.00 for Motorist Mutual. Notwithstanding that policy language, the question is whether the Kentucky Motor Vehicle Reparations Act (No-Fault), KRS 304, Subtitle 39, requires the insurance liability carrier to satisfy the claim of an injured claimant against its insured tort-feasor up to the maximum limits of its policy and in addition satisfy the claim of the injured claimant’s reparation obligor in the amount it had paid in basic reparation benefits to its insured.

The particular statute involved here is KRS 304.39-070, in effect on the date of the accident. It reads as follows:

“Secured person” — Obligor’s rights to recovery.
(1) “Secured Person” means the owner, operator or occupant of a secured motor vehicle, and any other person or organization legally responsible for the acts or omissions of such owner, operator or occupant.
(2) A reparation obligor which has paid or may become obligated to pay basic reparation benefits shall be subrogat-ed to the extent of its obligations to all of the rights of the person suffering the injury against any person or organization other than a secured person.
(3) A reparation obligor shall have the right to recover basic reparation benefits paid to or for the benefit of a person suffering the injury from the reparation obligor of a secured person as provided in this subsection, except as provided in KRS 304.39-140(3).

KRS 304.39-070 then goes on to establish the two ways in which the reparations obli-gor may assert its claim.

Section (4) of this statute was enacted in 1978 and became effective June 17, 1978, which date was long after the accident in both cases and after the judgment was entered. Section (4) has no application to the instant case. KRS 446.080(3).

This appears to be a case of first impression in Kentucky. The parties cite neither Kentucky nor foreign cases on point. We have been unable to locate any, except possibly the case of Criterion Insurance Company of Washington D.C. v. Commercial Union Insurance Company, 89 Misc.2d 36, 390 N.Y.S.2d 953 (1976). Although the New York Law, found in N.Y.Ins.L. Art. XVIII, §§ 670-678 and in particular § 674, is somewhat different from KRS 304.39-070 in wording, its effect is nearly the same.

In Criterion, supra, X was operating an automobile insured by Commercial Union under the New York No-Fault Act. X’s auto collided with Y’s auto which was insured by Criterion under the New York No-Fault Act. Thus both parties were “covered persons” under the New York Law. X was seriously injured, and he had received first party benefits (PIP) from Commercial in the amount of $35,579.00. Commercial demanded arbitration and reimbursement from Criterion of the PIP benefits Commercial had paid to X. Criterion, which had only a $10,000.00 bodily injury liability coverage on Y, argued that any interpretation of the statute (Section 674) which required it to pay any sums in excess of the $10,000.00 limits impairs the obligation of its contract with Y, who only purchased and paid for the limited coverage as noted.

The New York court held that the obligation of an insurer under Section 674 to reimburse another insurer for payments of first party benefits is not limited by the underlying limits of the at fault owner’s liability coverage. The mandate of the New York statute is clear and Criterion necessarily assumed the obligation imposed by the statute by writing insurance in New York.

Both Ohio Security and Motorist Mutual contend that Section (3) is a protective statute for secured persons in that the secured person is protected from claims by an injured claimant’s reparation obligor where the secured person’s bodily injury policy limits are less than sufficient to satisfy the common law claim of the injured claimant and the subrogation claim of the reparation obligor.

The trial court, in Ohio Security determined that KRS 304.39-070(3) creates a separate right of recovery in the basic reparation obligor, and the purpose of the statute is to allocate, still under a fault concept, the ultimate responsibility for the benefits paid to injured parties. With this reasoning we agree.

Motorist Mutual urges that since it has paid $23,000.00 out of its $25,000.00 limits on bodily injury liability coverage, Equity is entitled to the remaining $2,000.00 and no more, for there is no policy provision from which to pay the additional $8,000.00 Equity is demanding. The answer to that is that, Motorist Mutual, by writing insurance in Kentucky, makes itself amendable to the provisions of the Kentucky Law and necessarily assumes the obligations of KRS 304.39-070(3), notwithstanding the provisions of its contract with Parris. Equity’s claim against Motorist Mutual is not entirely one of subrogation, but rather is reimbursement by virtue of the provision of the statute, or by operation of law.

Motorist Mutual cites Ammons v. Winklepleck, Ky.App., 570 S.W.2d 287 (1978), and Pennsylvania Manufacturer’s Association Insurance Co. v. Government Employees Insurance Co., 136 N.J.Super. 491, 347 A.2d 5 (1975), aff'd. 72 N.J. 348, 370 A.2d 855 (1977). Neither case is applicable to the instant cases.

The sole question in Winklepleck, supra, was whether the insurance company was entitled to a set off or credit on its bodily injury liability coverage for all amounts paid to the injured claimant under the PIP coverage. There was only one basic reparation obligor involved. KRS 304.39-070 had no application.

In Government Employees Insurance Co., supra, the New Jersey statute, N.J.S.A. 39:6A-9, read thus:

Any insurer paying benefits in accordance with the provisions of section 4 and section 10, personal injury protection [benefits], regardless of fault shall be subrogated to the right of any party to whom it makes such payments, to the extent of such payments. Such subro-gatpon] insurer may only by intercompa-ny arbitration or by intercompany agreement exercise its subrogation rights against only the insurer of any person liable for such damages in tort provided, however, that such insurer may exercise its subrogation rights directly against any person (not insured).,

The basic reparation obligor, Pennsylvania Insurance Company, had paid PIP benefits to the injured claimant in the amount of over $6,000.00. Government Employees Insurance Company, [hereinafter called G.E.I.C.] the tort-feasor’s carrier had only a $20,000.00 limits liability policy with the tort-feasor. Pennsylvania Insurance sought a declaratory judgment to determine its subrogation rights against G.E.I.C.

In this case of first impression in New Jersey upon the issues of the impact of the PIP provisions of the No-Fault Law upon the responsibility of a tort-feasor’s insurance carrier for payment of a PIP subrogation claim, the New Jersey court held that the involvement of G.E.I.C. in the claim of the injured passenger, or the carrier subro-gated to that passenger, is measured exclusively by its undertaking within the ambit of liability features of its policy. There was nothing written into the No-Fault, Law that expanded that liability with respect to third party claims.

Motorist Mutual urges us to adopt the holding as applicable to its case against Equity. But for Section (3) of KRS 314.39-070, we might agree. Based solely upon the theory of subrogation, Hatton, Equity’s insured, has no rights against Farris, Motorist’s insured, because Farris’ tort liability for basic reparation benefits has been abolished to the extent paid. State Farm Mutual Automobile Insurance Co. v. Fletcher, Ky., 578 S.W.2d 41 (1979). KRS 304.39-060(2)(a). Therefore Equity would have no claim against Motorists. However, by operation of law, through Section (3) of KRS 304.39-070, Equity is given a right of re-coupment of its loss against Motorists. New Jersey does not have such a provision in its No-Fault Law. Therefore, Pennsylvania Manufacturer’s Association Insurance Co. v. Government Employees Insurance Co., supra, is not applicable to the instant cases.

As a side issue, Motorist Mutual complains that the trial court erred when it failed to permit it to file an amended answer to the intervening complaint filed by Equity. When Equity first intervened, it asked for only $5,000.00 in damages because that sum was all it had expended at the time. At the time of trial it had expended an additional amount equal to its policy limits of $10,000.00. As we review the record on this issue, the amended intervening complaint did not change or present any new issue in the case, and was by agreement of the parties and in accordance with CR 15.01. The trial court also correctly denied Motorist Mutual’s amended answer to the amended intervening complaint, as the answer was tendered ten days after the trial of this matter. In any case the amended answer to the intervening complaint and the amended answer to the amended intervening complaint both set up Motorist Mutual’s policy provisions as a defense. We, by this decision, have determined the provisions in Motorist Mutual’s policy have no real bearing on the rights of Equity granted by virtue of KRS 304.39-070(3).

The judgments in both cases are affirmed.

All concur.

      . N.Y.Ins.L., Art. XVIII, § 674, Settlement between insurers: Any insurer liable for the payment of first party benefits to or on behalf of a covered person shall have the right to recover the amount of such benefits so paid from the insurer of any other covered person if and to the extent that such other covered person would have been liable, but for the provisions of this article, to pay damages in an action at law.


author: GANT, Judge.

text:
    GRANT COUNTY FISCAL COURT and Ralph C. Pettit, Property Valuation Administrator of Grant County, Kentucky and Grant County Board of Education and Grant County Board of Supervisors, Appellants, v. Clifford McGEE and Lillian McGee, his wife and R. C. Ford, Trustee, Appellees.
    Court of Appeals of Kentucky.
    May 18, 1979.

      Otto Daniel Wolff, Covington, for Grant County Fiscal Court, Ralph Pettit and Grant County Bd. of Supervisors.
    John A. Hartman, William E. Fletcher, Walton, for Grant County Bd. of Ed.
    William F. Threlkeld, Williamstown, for Clifford and Lillian McGee.
    D. K. Floyd, Kentucky, for R. C. Ford.
    Before GANT, HOWARD and HOWER-TON, JJ.
   GANT, Judge.

This case involves the formula for assessing taxes on mineral estates, the Fiscal Court, Property Valuation Administrator, Board of Education and Board of Supervisors of Grant County, Kentucky, appealing from the judgment of the circuit court of that county reversing the Board of Tax Appeals.

Appellees Clifford McGee and Lillian McGee purchased by mineral deeds 15/i6 of the minerals under 32,345 acres in Grant County on a farm by farm basis for $1.00 per acre and an agreement to drill several wells, including a deep one. These purchases were made in the 1950’s. In 1964, after numerous unsuccessful shallow wells, the McGees sold Ford a u/i6 interest in the minerals for $0.50 per acre and an agreement to drill the deep well, the McGees retaining ¼6 of the minerals. The deep well was also unsuccessful in producing oil or gas.

In 1969, Ford sold his 14/i6 interest in the minerals under a 455-acre tract for $10.00 per acre and the McGees sold their ¼6 interest for $0.68 per acre. In the same year, Ford sold his 14/i6 interest under 109 acres for $10.00 per acre and the McGees sold their ½6 interest in the same for $0.62 per acre. Prior to these two sales, Ford had not listed his mineral estate at all for taxes, while the McGees had listed theirs at $200.00. On the basis of these sales, the Property Valuation Administrator assessed the Ford interest at $0.5175 per acre for the years 1965-1968 inclusive and $10.00 per acre for the years 1969 and 1970 on the remaining lands. The McGees were reassessed for 1970 at the $0.68 and $0.62 rate on their remaining lands. The Grant County Board of Supervisors and the Board of Tax Appeals upheld these assessments, but were reversed by the circuit court which fixed the Ford assessment at $0.50 per acre and the McGees at $0.03571 per acre.

The parties hereto stipulate, and of course it is the law, that all property must be assessed at its fair cash value based on the price it would bring at a fair voluntary sale. Kentucky Constitution § 172. This has been refined and defined by many court decisions. The most quoted rule appears in the case of Kenmont Coal Co. v. Perry County Board of Supervisors, 262 Ky. 764, 91 S.W.2d 47, 48 (1936): “That value [fair cash value], we have decided, is the price which would be agreed upon by a party who desired to, but was not compelled to buy it and an owner who, desired to, but was not compelled to sell it.” The phrase “fair cash value” has become interchanged with the phrase “fair market value.” The dilemma in this case is the determination of the market value of the mineral estates of the appellees under these circumstances.

Unquestionably, sales furnish strong evidence upon which to base an assessment. As the court stated in Evans v. Allen, 305 Ky. 728, 205 S.W.2d 514, 516 (1947):

The sale price of property is not, under all circumstances, the sole criterion for the guidance of the assessing authority in fixing the value for taxation purposes, but where the property is sold or at near the assessment date and the sale is fair and voluntary the sale price is the best evidence of the property’s “fair cash value, estimated at the price it will bring at a fair voluntary sale.”

It should be noted that the above language was taken from a case in which the entire property had been sold, not a mere fraction, as in the case at bar. Most, if not all, of the cases utilizing the sale price have been from cases in which the entire property, or at least a large majority of the entire property, has been sold.

The evidence before the Board of Tax Appeals consisted in part of the testimony of the PVA. His evidence was that his assessment was based entirely on the two sales above referred to. He testified that he did not know whether there was a willing buyer or seller, that he had no experience in appraising mineral estates, that to his knowledge there was no production of minerals on any of the land, and that in his assessment of all this property on the surface estate he made no reduction because of the mineral severance.

For the appellees, the testimony of Ford was that of the owners of the 445-acre tract had secured an offer for their farm and entered into a contract for its sale “at what he considered an extra good price.” The buyer would not purchase the farm without the mineral rights and Ford finally agreed to sell his rights for $10.00 an acre, which the owners of the surface readily paid. Ford testified that he tried to secure an exchange of other minerals rather than sell the mineral estate but that time would not permit. The second, involving the 109-acre tract, was sold under similar circumstances. A realtor friend of Ford had a contract to sell this property and a prospective purchaser who insisted on the mineral rights. Again Ford was reluctant to sell, but sold for $10.00 an acre in order that the entire estate could be sold.

Following this testimony, there was evidence from two qualified experts that the full value of the mineral rights was $0.50 per acre. We feel that the trial court properly stated our position in this case when, in applying the standard set out in Evans v. Allen, supra, he stated:

If we apply this standard, and it is the only standard applicable in this type of case, to the testimony in this case, we find that while the Property Valuation Administrator knew the price at which two isolated parcels out of the entire block had been sold, he did not inquire and did not know if the purchasers were under a compulsion to buy and made no attempt to ascertain and did not know if the sellers desired to sell. We further find from the uncontradicted evidence of the property owners that the buyers of the mineral estates had contracted to convey fee simple title to the parcels in questions and thus were under a compulsion to buy and the sellers were in a position where they did not desire to sell but were willing to sell at a grossly overinflated price.

The lower court further cited from the case of Helman v. Kentucky Board of Tax Appeals, Ky.App., 554 S.W.2d 889 (1977), in which this Court held that under similar circumstances the testimony of the PVA had no probative value.

The lower court felt that the case of Department of Revenue v. Anaconda American Brass Co., Ky., 435 S.W.2d 65 (1968), was dispositive of this case. This was a case in which the company had purchased a 139-acre tract at an inflated price in order to secure 50 acres upon which to expand its plant. They protested the assessment at sale price because they felt that since the landowner would not merely sell them the 50 acres but insisted upon the sale of the whole tract, and because of their desperate need for the 50 acres, the sale price did not truly reflect the value of the property. The language in that case, although the case is readily distinguishable on its facts, would seem to us to state the law in Kentucky, that being that the sale price of property is not in all circumstances the sole criterion for fixing the fair cash value, and that the circumstances of the sale must be examined to determine the emphasis to be placed upon the sale price.

This Court further feels that there was an element herein which was not touched upon by the lower court and with which we are considerably troubled. It is our opinion that before we can consider fair market value it must be established that there is, in fact, a market. The sales herein constituted 1.7%, or about Vm, of the property owned by the appellees. This falls far short of establishing that there is a market for this property. As the court stated in the case of Board of Supervisors of City of Frankfort v. State National Bank of Frank fort, 300 Ky. 620, 189 S.W.2d 942, 946 (1945):

In the absence of a market for stock or any other property, the estimates of value must, of course, be upon theories deducible from the various elements that enter into its value. Thus we have recognized in several cases the existence of classes of property of a special nature and of real value which are not capable of being marketed and no market for it exists, and which of necessity require the resort to other and unusual methods of ascertaining the taxable value.

We recognize that this property in question has basically two different values. One is its value for potential sale in order to quiet title or pass fee simple title. We do not feel that two isolated sales over a 25-year period of ownership prove that there is a market for this in this category. There was no proof entered in this record that other persons owning property in this 32,-000-acre holding had any desire whatsoever to quiet their title or any need to do so in order to obtain loans or to sell this property. Thus, it would seem that the only market for this property would fall in its second potential, that of its value for mineral purposes. Having failed in the first category to establish a market, the assessing body could rely only upon its value as established by the expert witnesses herein, that of $0.50 per acre for the Ford interest and $0.03571 for the McGee interest.

Accordingly, the judgment is affirmed.

All concur.