author: /s/John S. Palmore Chief Justice

text:
    KENTUCKY BAR ASSOCIATION, Complainant, v. Lohren F. MARTIN, Jr., Respondent.
    Supreme Court of Kentucky.
    April 4, 1979.
    Leslie G. Whitmer, Director, Michael M. Hooper, Asst. Director, Kentucky Bar Ass’n, Frankfort, for complainant.
    Lohren F. Martin, Jr., London, for respondent.
   OPINION AND ORDER

The following decision of the Board of Governors of the Kentucky Bar Association is hereby adopted pursuant to and in conformity with SCR 3.370(8):

“FINDINGS OF FACT, CONCLUSIONS OF LAW, OPINION AND ORDER OF THE BOARD OF GOVERNORS OF THE KENTUCKY BAR ASSOCIATION

“On or about September 25, 1978, the respondent Lohren F. Martin, Jr., was charged with unethical and unprofessional conduct, specific charges being summarized as follows:

I. On or about May 27, 1975, respondent accepted a retainer fee in the sum of $43.00 from one Kenneth Bargo, to file a civil action against his employer. Respondent subsequently neglected this matter by failing to prepare and file the action. Further, although respondent agreed to return the retainer fee of $43.00, he failed to do so.
II. On or about May 20, 1975, Gary L. Helton employed respondent to represent him in Whitley Circuit Court on a charge of robbery in the first degree. On or about September, 1975, Gary Helton was indicted in Whitley County on a charge of burglary in the third degree and employed respondent to represent him in this case. Respondent subsequently neglected these legal matters entrusted to him by failing to take any action on behalf of his client to obtain a disposition of said criminal charges. Further, respondent accepted a retainer fee of $1,500.00 to defend each such charge, for a total of $3,000.00. Although many times requested to do so by the said Gary L. Helton, respondent has failed to refund any part of the said retainer fee.

“The charges were sent by certified mail to the respondent by the director of the Association, on September 25, 1978. Notice of said certified mail was given to respondent by the postal authorities on September 26, October 3, and October 11, 1978, but respondent failed to claim said certified letter, and it was returned to the Association. Subsequently, on October 19, 1978, Honorable Victor Fox, Chairman of the House of Delegates appointed an attorney, pursuant to SCR 3.270, to notify respondent of the nature and pendency of the charges.

“On December 18, 1978 the attorney filed his report, stating that on October 27, 1978, he had personally served the respondent with the charges. Respondent filed no response, therefore the charges may be taken as confessed, pursuant to SCR 3.220, inasmuch as respondent received actual notice, through personal service, of the nature and pendency of the charges.

“FINDINGS OF FACT

“Upon review of the investigative material, the Board of Governors finds the facts herein as follows:

I. On or about May 27, 1975, respondent Lohren F. Martin, Jr., accepted a retainer fee in the amount of $43.00 from one Kenneth Bargo to file a civil action for him. As of April 14, 1978, respondent neglected either to file the suit or to return the retainer fee, although requested to do so by his client.
II. a) In May of 1975, respondent accepted a retainer fee in the amount of $1,500.00 from one Gary L. Helton, to defend Mr. Helton on a charge of armed robbery in the Whitley Circuit Court. In September of 1975, respondent accepted a further retainer fee in the amount of $1,500 to represent the said Gary L. Helton on a charge of third degree burglary, presumably in the same court.
b) Subsequently, the said Gary L. Helton was convicted of a federal charge and sentenced to ten years in prison and incarcerated in the Federal Correctional Institution in Ash-land, Kentucky.
c) Mr. Helton frequently contacted respondent and asked him to secure some disposition of the aforesaid state charges under the Interstate Agreement on Detainers. Respondent always gave some excuse for not having attended to these matters, and in fact did not attend to them or properly represent his client in connection with them.
d) Finally, Mr. Helton secured dismissal of charges with the assistance of the prison authorities, and with little or no help from the respondent. The state charges were dismissed in January and February of 1978.
e) In March and April of 1978, Gary L. Helton made several unsuccessful attempts to contact respondent to secure a refund of all or part of the $3,000.00. Respondent’s failure to attend to these matters on behalf of his client, after having accepted a substantial fee for his services, caused his client needless worry and mental distress.

“CONCLUSIONS OF LAW

“By reason of the conduct hereinabove summarized, respondent is guilty of unprofessional and unethical conduct calculated to bring the bench and bar in disrepute, by reason of his neglect of legal matters for which he had been retained by his clients, and for which he had been paid in advance.

“DISCUSSION OF PUNISHMENT

“Having unanimously found the respondent guilty of the above charges, the Board of Governors considered the fact that the respondent was already under suspension for two years, because of a similar charge arising out of neglect of another client’s affairs, which had been entrusted to him. Therefore, the Board concluded that these were not isolated events.

“ORDER

“The Board concludes that respondent has been found guilty as charged and recommends that respondent, Lohren F. Martin, Jr., be suspended for three years from the practice of law, said suspension to run consecutively with the two-year suspension he is now serving.

BOARD OF GOVERNORS KENTUCKY BAR ASSOCIATION

(s) B. M. Westberry, President”

All concur except STERNBERG, J., who did not sit.

Entered April 4th, 1979

/s/John S. Palmore Chief Justice


source: Caselaw Access Project

author: CLAYTON, Justice.

license: Public Domain

text:
    William Michael KUZMIAK, Movant, v. Ellen FLOWERS, Administratrix of the Estate of Hubert David Flowers, Respondent.
    Supreme Court of Kentucky.
    April 10, 1979.
    Wayne J. Carroll, Hiram Ely, III, Ewen, MacKenzie & Peden, P.S.C., Louisville, for movant.
    Shelly T. Riherd, Riherd & Richardson, Glasgow, Thomas B. Givhan, John E. Spainhour, Shepherdsville, for respondent.
   CLAYTON, Justice.

Hubert David Flowers was killed on the Kentucky Turnpike in Bullitt County when he was struck by an automobile driven by the movant, William Michael Kuzmiak. Ellen Flowers, in her capacity as administra-trix of the decedent’s estate, instituted this wrongful death action against movant in the Bullitt Circuit Court. The evidence presented at trial was in conflict as to whether the decedent was struck while standing in the emergency lane or whether he stepped onto the highway into the path of movant’s vehicle. The state trooper investigating the accident discovered that the decedent had been drinking prior to the accident and directed that a blood sample be taken from the body. Tests conducted on the blood sample indicated that the decedent was intoxicated at the time of his death. The jury returned a general verdict in favor of Kuzmiak and judgment was entered accordingly. The Court of Appeals reversed, and we granted discretionary review.

The Court of Appeals ruled that admission of the results of the blood alcohol test into evidence constituted substantial error because: (1) the evidence of intoxication was irrelevant; (2) the integrity of the blood sample was not adequately established; and (3) the taking of the sample without consent violated the decedent’s constitutional right to protection from unreasonable search and seizure. We cannot agree.

First, since contributory negligence was at issue, evidence of intoxication was certainly relevant to whether the decedent exercised ordinary care for his own safety. As regards the integrity of the blood sample, our review of the record reveals that the tested blood was sufficiently identified as that of the decedent, and therefore a proper foundation was laid for its admission. Cf. Webb v. Stone, Ky., 445 S.W.2d 842, 844 (1969).

Concerning the third issue, we said in Woosley v. Central Uniform Rental, Ky., 463 S.W.2d 345, 349 (1971):

[I]t seems to us that there are other valid reasons for securing the information made possible by the taking of a blood sample from the body of a person killed in an automobile accident. There can be no doubt that one of the major concerns and most difficult problems of law enforcement is the safety of those who use the public highways of the state. To that end, police agencies not only may but should investigate the causes of accidents on the highways within their jurisdiction. Surely such information is necessary to the development of any successful program of accident prevention.

Our opinion in Woosley reflects a sound public policy in favor of facilitating law enforcement officers in their investigations of highway accidents. Based on that policy, we now hold that taking a blood sample from the body of any person killed in an automobile accident falls within the legitimate scope of an investigating law enforcement officer’s inquiry to seek out the cause of death. In this case the removal of the blood sample was part of the state trooper’s investigation of the accident, and did not amount to an unreasonable search and seizure. Therefore, the trial court did not err in admitting the blood alcohol test results into evidence.

The decision of the Court of Appeals is reversed, and the judgment of the Bullitt Circuit Court is affirmed.

All concur.

      . The “misgivings” mentioned in Woosley were misconstrued by respondent and the Court of Appeals. What we questioned in Woosley was the soundness of the common law rule set out in Streipe v. Hubbuch Bros. & Wellendorf, 233 Ky. 194, 25 S.W.2d 358 (1930), that evidence is not inadmissible because it was wrongfully or illegally obtained. For that reason we chose to base our decision on public policy, grounds upon which we had no misgivings.


author: LESTER, Judge.

text:
    Royce C. PULLIAM, Appellant, v. Eugene S. WIGGINS and Morris Rozen, Appellees.
    Court of Appeals of Kentucky.
    Dec. 1, 1978.
    Rehearing Denied Feb. 2, 1979.
    Discretionary Review Denied May 15, 1979.
    David E. Melcher, John Swinford, Swin-ford & Sims, Cynthiana, for appellant.
    Irene C. Steen, Wiggins & Steen, John D. Sword, Sword & Floyd, Richmond, for ap-pellees.
    Before HAYES, HOWERTON and LESTER, JJ.
   LESTER, Judge.

This is an appeal from the denial of a permanent injunction by which plaintiff-appellant sought to prohibit defendants-appel-lees from leasing or selling land in.a shopping center upon which there was to be a competing business maintained.

Sometime prior to 1967, Royce C. Pulliam attempted to buy a plot of land at the intersection of Lancaster Avenue and Richmond By-Pass Road in Richmond, Kentucky, from Earl B. Baker, the latter party then commencing development of his twenty acre plus tract. Before the transaction could be made, Baker found himself in financial difficulties, so he sold the property to a partnership which had as its trustees and operating managers the appellees, Wiggins and Rozen. It was Pulliam’s intention to install and operate a Frisch’s Big Boy drive-in restaurant facing on Lancaster Avenue at a point where it intersected with the By-Pass Road.

In their representative capacity and as part owners, Wiggins and Rozen started planning and later developing upon the Baker property what was to become known as University Center which, as a practical matter, was a shopping center. Pulliam leased the necessary ground from appellees on November 11, 1967, which was prior to any shopping center construction. Appellant drafted the lease. In order to get financing for his drive-in, appellant assigned his lease and mortgaged his improvements to the National Bank of Cynthiana.

The partnership, for whom appellees were trustees, which owned the shopping center consisted of, among others, Wiggins, Rosen, John Sword, Stanley Wylie, Ila Wylie, R. C. Tussey and two or more corporations. On May 4,1970, appellees, in their trustee capacity, deeded the land upon which appellant’s restaurant was situated to Stanley Wylie, Ila Wiley and R. C. Tus-sey, which conveyance was subject to appellant’s lease. Some four and a half years later, on November 13,1974, the Wylies and Tusseys conveyed the ground to Pulliam, with a portion of the deed providing that:

This property is subject (a) To the leasehold estate granted by first parties to Royce C. Pulliam by lease dated November 11, 1967 and recorded in Lease Book 11, Page 67, Madison County Court Clerk’s Office.

When appellant drafted his lease in 1967, he inserted as clause 17 a restriction to the effect:

17. Restrictions. It is understood and agreed that the Lessee is to build a drive-in restaurant of the Frisch’s Big Boy type and the Lessors agree and covenant that neither they, their heirs, assigns or nominees shall lease, assign or sell any other property owned by the Lessors and purchased from Earl B. Baker et al located on the Lancaster Road or Eastern ByPass in Richmond, Kentucky, for a similar type business. Lessors reserve the right to not more than one McDonald type restaurant on all of said property and to have other restaurants with inside service, provided that same shall be located in the shopping center proper.

Not long after Pulliam acquired title to his property he received the following letter, dated May 29, 1975, from Wiggins:

May 29, 1975
Hon. Royce C. Pulliam
Attorney at Law
Elks Building
Cynthiana, Kentucky 41031
Dear Royce:
Morris Rozen and I, as co-trustees, are in the process of completing a Lease Agreement under which we will lease the lot between Long John Silver’s and the Self-Service Gas Station for use as a “Bonanza Steak House”. This will be a restaurant operation with inside service and not a drive-in or carry-out type food operation.
Under the proposed Lease Agreement with these new tenants, we will pay a substantial part of, if not all of, the improvements to be constructed upon the demised property. It is our opinion that construction cost will greatly increase in the next few months and in order to avoid this increase we must proceed with construction within the next few days.
My purpose in writing this letter to you is to make you aware of our intentions as mentioned above so that if you believe we do not have the legal right to enter into this most advantageous lease you can immediately institute legal proceedings against us. Not hearing from you within the next ten days we will assume that you do not legally contest our right to make said lease, and we will act accordingly.
To make our position clear to you, we are sure that the restrictions in the lease we at one time had with you would not prohibit us from leasing our property for a restaurant catering to inside service. Furthermore, assuming such a restrictive covenant in a lease could be enforced in the face of recent anti-trust monopoly cases, it is our information that you have now purchased the property we formerly leased to you thereby causing a merger of the leasehold estate into the fee simple estate thereby eliminating the burdens and benefits of the Lease Agreement.
Please understand that our position in this matter is unyielding short of a Court Judgment, and that any delay would cause us great economic loss for which we would seek recovery.
Very truly yours,
/s/ Eugene S. Wiggins
ESW/js
cc: Morris Rozen
Dwight Groeman

Appellant replied that he thought there was “a definite question of appellee’s right to build another free standing restaurant” in the shopping center, so on October 24, 1975, he filed his complaint in the Madison Circuit Court which had as its basis, clause 17 of the 1967 lease.

The trial court sustained the defendants-appellees’ motion for summary judgment and in its entry held that the lease, a certain agreement between the parties of May, 1969, and the deed all merged into the fee grant instrument and that the particular restrictions sought to be retained were null-ities because there was no express reservation thereof. The court defined “shopping center proper” and found that the Bonanza Steakhouse was within the geographical ambit of the center. The court further determined that the Bonanza lessees were necessary parties.

The first assignment of error is the trial court’s application of the doctrine of merger. Under that theory of law, the lower tribunal determined that when appellant acquired the fee simple title to the Frisch’s Big Boy site that the provisions of the 1967 lease were merged therein and thus became nullities.

The theory of merger of estates arose out of the rule in Shelley's Case, 1 Co. 93b (1579-81) and has long been recognized in this jurisdiction. Logan v. Steele, 7 T.B.M. 101 (1828). One of the most succinct statements of the doctrine is found in Larmon v. Larmon, 173 Ky. 477, 191 S.W. 110, 112 (1917) quoting from Blackstone to the effect that:

“Whenever a greater estate and a less coincide and meet in one and the same person, without any intermediate estate, the less is immediately annihilated; or, in the law phrase, it is said to be merged, that is, sunk or drowned in the greater. Thus, if there be a tenant for years, and the reversion in fee simple descends to or is purchased by him, the term of years is merged in the inheritance, and shall never exist any more.”

(Citations Omitted)

To constitute a merger it is necessary that the two estates be in one and the same person, at one and the same time, and in one and the same right. Blackstone, supra; 10 R.C.L., P. 666; 16 Cyc. 667. While the rule is said to be inflexible at law equity will prevent or permit a merger of estates according to the intention of the parties and to protect the beneficial interests of the holder of the two estates. 2 Pom. Eq. Jur. (3d Ed.) § 788.

However, there can be no merger where it is contrary to the intention of the parties. Watson v. Trimble, 261 Ky. 253, 87 S.W.2d 359 (1935).

When appellees conveyed the land in question to the Wylies and the Tusseys and when they deeded to Pulliam, both instruments contained the language herein-above set forth which had the effect of incorporating by reference the provisions of the lease into the deeds. We can conceive of no reason why the parties would have inserted the language unless it was their intention that the provisions of lease remain in effect and not merge into the deed thereby losing their identity. Appellees urge us to adopt the position of Rayburn v. Stewart Calvert Co., 105 Wash. 575, 178 P. 455 (1919), that only the specified wording contained in that opinion would have the effect of retaining in one instrument the provisions of another, but we believe that any phrases or sentences that express the intention of the parties is sufficient to obviate the merger.

The next significant question presented for our determination is what is meant by the restrictions contained in paragraph 17 of the 1967 lease. After prohibiting appellees from permitting another “Frisch's Big Boy type” of restaurant to open on the property acquired from Earl B. Baker, the clause goes on to say:

Lessors reserve the right to not more than one McDonald type restaurant on all of said property and to have other restaurants with inside service, provided that same shall be located in the shopping center proper.

Attorney-appellant was the drafter of the document and it is axiomatic that a contract must be construed more strongly against the party who prepared it. Boyd v. Phillips Petroleum Company, Ky., 418 S.W.2d 736, 738 (1966).

It is not argued that the Bonanza Steakhouse operation is not an inside service restaurant nor is it urged that it is a similar type establishment as a Frisch’s. What is advanced is that Bonanza is situated on the north side of the complex (entering from Lancaster Avenue) in a row of buildings immediately behind appellant’s drive-in which should not be considered as being in the “shopping center proper.” Pulliam’s position is that the row of business houses on the south side of the connecting parking area (which structures face those wherein the steakhouse is located) is the shopping center proper, thus prohibiting appellees from placing the new restaurant in any place other than on the south side. Appellant’s testimony is quite uncertain as to what the developers of the center represented to him could comprise the future shopping center, and if he was unsure of the situation, we certainly cannot provide the facts necessary to sustain his position. It would be unrealistic, however, to say that a developer would construct a row of buildings on either side of a large parking area and then say one cluster of commercial establishments on one side of the vehicular area is in the shopping center while its counterpart on the other side is not part of the center.

The learned trial judge defined “shopping center proper” as the developed area, reachable by motor vehicles regularly visiting the shopping center by established roads and parking areas, as opposed to the undeveloped area or reserved area behind or away from the built up area. We do not believe we can improve upon the foregoing for the purposes of this appeal, but we direct interested parties attention to a group of definitions of shopping center collected in the 1978 cumulative annual pocket part (p. 46) of 39 Words and Phrases, “Shopping Center” and particularly those contained in Homer v. Dadesland Shopping Center, Inc., Fla., 229 So.2d 834, 836 (1969) and Dupont v. Planning and Zoning Commission of Town of Stratford, 156 Conn. 213, 240 A.2d 899 (1968). Therefore, regardless of what side of the parking area the Bonanza is located, we hold that it is in the shopping center proper. Moreover, since the steakhouse is an inside service type of restaurant, then there is nothing violative of the restriction contained in the lease.

The restriction involved herein is one designed to either eliminate drive-in competition and limit other types of food establishments in the same shopping complex. Our court of last resort has adopted the view in Keyes v. Carrick, Ky., 268 S.W.2d 397, 402 (1954) that:

It is an elementary rule of construction that a covenant or agreement by a lessor not to lease the retained property for the purpose of conducting a business in competition with the lessee must be positively expressed and, being in restraint of trade, must be strictly construed. The words relied upon as creating such a covenant should not be extended beyond their literal meaning, and if two constructions are possible, the one which does not limit the use of the property should be adopted. 51 C.J.S., Landlord and Tenant, § 238, p. 865.

With the resolution of the foregoing issues, we find it unnecessary to respond to other points raised by the parties with the exception of the comment that we find no error in the granting of summary judgment by the circuit court and no violation of CR 56.

The judgment is affirmed.

All concur.


author: HOGGE, Judge.

text:
    CITY OF LOUISVILLE, Division of Police, Appellant, v. Urania H. LAUN, and James R. Yocom, Commissioner of Labor and Custodian of the Special Fund, and Workmen’s Compensation Board, Appellees.
    Court of Appeals of Kentucky.
    Feb. 2, 1979.
    Discretionary Review Denied May 15, 1979.
    Stuart E. Alexander, Asst. Director of Law, Louisville, for appellant.
    Harris Berman, Louisville, for Urania H. Laun.
    Denis S. Kline, Asst. Counsel, Dept, of Labor, Louisville, for James Yocom.

      Kenneth E. Hollis, Gen. Counsel, Dept, of Labor, Frankfort, for Special Fund.
    Before VANCE, HOGGE and WHITE, JJ.
   HOGGE, Judge.

Urania H. Laun, a fifty-one (51) year old police officer employed by the City of Louisville for over twenty (20) years, was awarded total disability benefits by the Workmen’s Compensation Board as the result of a lung problem. Her employer, the Division of Police of the City of Louisville, appeals from the judgment of the Jefferson Circuit Court affirming the Board’s opinion and award. The issues raised by the appellant are whether Mrs. Laun’s condition is a work-related injury or an occupational disease, whether her claim is barred, and whether the Special Fund should have the principal share of liability for any work-related injury or disease which Mrs. Laun is found to have.

The record in this case indicates that when Urania Laun entered the police force, she was twenty-nine (29) or thirty (30) years of age and in apparent good health. From the time when she graduated from the Police Academy until 1968, she primarily worked out of the Youth Bureau. During Christmas season the police department began assigning Mrs. Laun to a shoplifting detail, which involved going in and out of heated stores into the winter weather, cheeking for shoplifters. She began experiencing colds and pneumonia during or at the end of these shoplifting details.

Mrs. Laun’s doctor, Dr. Van Vooren, discovered she was suffering from bronchiec-tasis, a dilation of the bronchus. Bronchiec-tasis is a condition caused by repeated infections, such as bronchitis and pneumonia. The problem was localized and an infected portion of the lung was removed.

In 1968 Officer Laun was promoted to sergeant, and began having some supervisory duties and desk work. She was still involved in the Christmas shoplifting detail, however.

Mrs. Laun’s problem had worsened by 1970, and the middle lobe of her right lung was removed. After a recovery period, she returned to work. She was taken off the shoplifting detail and all her work was performed indoors. She was promoted to lieutenant and became night supervisor in the juvenile department. She testified that she was able to perform those duties without major difficulty.

In September 1975 she was involved in policing activities in connection with busing problems. She was then transferred to the Fourth District as a platoon leader. The Fourth District, comprising part of the west end of Louisville, was described as having a smog problem. Mrs. Laun testified that she had to be on the street with the young officers who she supervised. There were break-ins and fires in the area, and warehouses had to be checked and burglar alarms investigated.

At the scenes of fires, the police protected the area until an arson squad could be summoned. This sometimes involved several hours. Smoke inhalation from the fires caused Mrs. Laun to vomit, cough up blood, and become ill with headaches. On one or more occasions, water from a fire hose froze on Mrs. Laun’s clothing. Mrs. Laun began to experience lung problems again. She had difficulty breathing and became exhausted easily. On August 1, 1976, she was hospitalized and on August 2,1976, she filed a workmen’s compensation claim.

Evidence from several medical experts was given before the Board. The evidence indicated that bronchiectasis is caused by repeated infections. Dr. Van Vooren, who had treated Mrs. Laun since 1966, stated that chronic exposure had caused Mrs. Laun to have repeated infections. He has advised her to avoid crowds, pollution, and quick temperature changes to protect the tissue left in her lungs. He stated that her condition had deteriorated when she was transferred from desk work with juveniles to that of being a patrol lieutenant. It was his opinion that she was totally and permanently disabled, and that her condition was progressive.

Dr. Ray Bryant, a thoracic surgeon, found that Mrs. Laun had bilateral bron-chiectasis, and could not do any strenuous work, such as the work of a police lieutenant. Dr. Bryant stated that the medical probability was that Mrs. Laun’s condition was related to her work, in which she was exposed to respiratory irritants more than the general public.

Dr. William Anderson did not believe that the bronchiectasis was a natural incident of the employment. He states that the most frequent cause of bronchiectasis is a defect in the musculature of the air ways, which is something with which people are born. However, the condition could be aggravated by smoke from fires and certain types of fumes from air pollution, and by going at regular intervals from warm stores into cold weather. Dr. Anderson believes that while Mrs. Laun could not perform strenuous duties, she could do desk work, although she would have difficulty and discomfort if there was cigarette smoking in the area.

At the conclusion of the taking of evidence, the Board concluded that Mrs. Laun was one hundred percent (100%) permanently disabled as a result of her injury. The Special Fund was dismissed as a party.

The first issue presented by the appellant concerns the Board’s finding that Officer Laun sustained a work-related injury. The appellant contends that bronchiectasis is not an injury as defined by KRS 342.620(1). In KRS 342.620(1), injury is defined as follows:

(1)“Injury” means any work related harmful change in the human organism, including damage to or loss of a prosthetic appliance, but does not include any communicable disease unless the risk of contracting such disease is increased by the nature of the employment. “Injury” when used generally, unless the context indicates otherwise, shall include an occupational disease. (Emphasis added.)

Appellant states that Mrs. Laun’s disease is the result of repeated respiratory infections such as colds, flu, and pneumonia, all of which are communicable diseases, and that it has not been shown that the nature of her employment increased the risk of contracting such disease. We cannot agree with this contention. We believe that the record contains ample evidence that Mrs. Laun was subjected to extremes of temperature, smoke, and smog beyond that experienced by the average member of the public. The frequent contact with respiratory irritants was caused by the nature of her employment. It required exposure to smoke and the outside elements well beyond that encountered in the usual errands and travel to and from work. In spite of appellant’s arguments to the contrary, we are compelled to conclude, as did the Board, that the principles in Haycraft v. Corhart Refractories Company, Ky., 544 S.W.2d 222 (1976), are quite applicable to this case.

We are not disturbed by the fact that the Board found that the injury occurred August 2, 1976, although no particular incident occurred at that time other than Mrs. Laun’s hospitalization due to the deterioration of her condition. “[Cjausation need not be localized in a single event. It is enough that the disability be fairly traceable, wholly or in part, to the work.” Haycraft, supra, at 224; Hudson v. Owens, Ky., 439 S.W.2d 565, 569 (1969).

We hold that the Board did not err in finding that the claimant suffered a work-related injury within the meaning of KRS 342.620(1), and we believe that this injury was in the nature of an occupational disease.

The next issue for our consideration is whether Mrs. Laun’s claim is barred by late filing. Appellant notes that Mrs. Laun developed bronchiectasis prior to 1970, and that by 1970 it was necessary that part of her lung be removed. She returned to work in a protected environment — desk work indoors. Appellant contends that manifest, overt partial disability existed more than two years prior to the filing of the claim in October, 1976.

The statute of limitations on filing of claims for disability resulting from an occupational disease is KRS 342.316. The relevant portion reads as follows:

The right to compensation under this chapter for disability resulting from an occupational disease shall be forever barred unless a claim is filed with the Workmen’s Compensation Board within three years after the last injurious exposure to the occupational hazard or after the employe first experiences a distinct manifestation of an occupational disease in the form of symptoms reasonably sufficient to apprise him that he has contracted the disease, whichever shall last occur . . . . (Emphasis added.)

The date of Mrs. Laun’s last injurious exposure was in 1976. It was during that year that she became occupationally disabled to perform the work which she had been assigned to do, and filed her claim. We note that there can be no claim or cause of action before the occurrence of a disability, Crawford v. V. & C. Coal Company, Ky., 432 S.W.2d 403 (1968), and that in Yocom v. Karst, Ky., 528 S.W.2d 697 (1975), the Supreme Court of Kentucky held that so long as a workman continues in full-time employment by the same employer, he cannot be considered to be disabled as far as an occupational disease is concerned. We hold that Mrs. Laun’s claim, which was filed almost immediately after she found it necessary to terminate her employment, was not barred.

The final issue for our consideration is whether the Special Fund should have a share of any liability for Mrs. Laun’s condition. The appellant contends that the Special Fund should not have been dismissed as a party and cites KRS 342.120 and KRS 342.316(13)(a). We believe that KRS 342.-316(13)(a), which would require the Special Fund to bear part of the liability for Mrs. Laun’s claim, is applicable in this case, for the reason that the record clearly shows that Mrs. Laun had an occupational disease which developed to the point of disablement only after an exposure of five or more years. We therefore hold that the Workmen’s Compensation Board erred in dismissing the Special Fund as a party.

The judgment is reversed for further proceedings consistent with this opinion.

All concur.


author: HOWERTON, Judge. GANT, Judge,

text:
    Thomas F. PEACH, Appellant, v. 21 BRANDS DISTILLERY, a Division of Foremost-McKesson, James R. Yocom, and Workmen’s Compensation Board, Appellees.
    Court of Appeals of Kentucky.
    Feb. 9, 1979.
    Discretionary Review Denied May 15, 1979.

      Phil Williams, Louisville, for appellant.
    Walter A. Ward, Lexington, for appellee, 21 Brands Distillery.
    Gemma Harding, Dept, of Labor, Louisville, Kenneth E. Hollis, Gen. Counsel, Dept, of Labor, Frankfort, for appellee, James R. Yocom.
    Before GANT, HOGGE and HOWER-TON, JJ.
   HOWERTON, Judge.

Peach appeals from a decision of the Franklin Circuit Court affirming an order of the Workmen’s Compensation Board dismissing his claim for failure to comply with the two-year statute of limitations, KRS 342.185. Peach raises two issues. First, he argues that his claim is not barred by the limitation, because the employer failed to notify him thirty days before the expiration of the time limit as required by KRS 342.-186, which was enacted after the alleged injury but before the end of the two-year limit. Peach also argues that the Special Fund is estopped from raising the limitation as a defense, because the Fund did not timely plead it.

Peach claims to have suffered a myocardial infarction on June 12, 1973, while on the premises of his employer, 21 Brands Distillery. He did not file a claim with the Workmen’s Compensation Board until thirty-seven months later on July 16, 1976, alleging at that time that the heart attack was in the course of his employment. The employer timely filed a defense of the statute of limitations while the Special Fund did not.

In July 1974, KRS 342.186 became effective. It requires that “[a]n employer shall notify any employee who has received an injury or illness of the statute of limitations applicable to the injury or illness, not later than thirty (30) days prior to the expiration date.” It is admitted by the employer that no such notice was given to Peach in this case.

The majority on this panel concludes that approval of appellant’s theory would require a retroactive application of KRS 342.186, because that statute was not in effect at the time of his injury. A retrospective law is one which creates and imposes a new duty in respect to transactions or considerations already past. 73 Am. Jur.2d Statutes § 348. Whether a statute is to operate retrospectively, or prospectively only, may depend on legislative intent, but courts apply a strict rule of construction against retrospective operation and presume that legislatures intended a prospective application, especially when new rights and duties are created. Id. § 350. Here we have no indication of legislative intent, and we must look at the nature of the statute itself.

Generally speaking, the law in this Commonwealth is that the statute in effect on the date of the injury is controlling. Maggard v. International Harvester Company, Ky., 508 S.W.2d 777 (1974). Maggard, however, was concerned with increased benefits by statutory change. We do note that some statutes which relate to remedies or modes of procedures are excepted from the general rule. 73 Am.Jur.2d Statutes § 354. Peach has directed our attention to Kiser v. Bartley Mining Company, Ky., 397 S.W.2d 56 (1965). In Kiser, the Court was of the opinion that if the original statute of limitations had not run by the time a new statute of limitations became effective, the applicable limitation period would be enlarged to the new limitation.

We are unable to agree with Peach’s contention that the situation faced by the Court in Kiser is analogous to the situation in the instant case. The change in Kiser provided a mere passive extension of time. We find the requirement in KRS 342.186 to be an additional duty or affirmative obligation. The nature of the statutory change in this case lies somewhere between those considered in Maggard and Kiser, and the new duty is more a part of the remedy or procedure than the creation of a new right or increase in liability. It is a duty, however, that the employer did not have at the time of the alleged injury, and there is no indication in the statute that the employer was required to set up new procedures or resurrect old records to comply with this new notice requirement for this old potential claim. We, therefore, decline to apply KRS 342.186 to causes in existence on its effective date.

Next, we conclude that Caldwell v. Bethlehem Mines Corporation, Ky., 455 S.W.2d 67 (1970), is dispositive of Peach’s allegation that the Special Fund is estopped from raising the statute of limitations as a defense. The Court stated in that case:

The question remains as to the effect of the failure of the Special Fund to make any plea of limitations. It is our opinion that since the plea made by Bethlehem was not personal to Bethlehem but was common to both of the defendants and went to the whole right of the claimant to recover at all, the plea inured to the benefit of the Special Fund as recognized ‘with practical unanimity’ as stated in the Annotation in 78 A.L.R. 939 and as quoted in Haddad v. Louisville Gas & Electric Company, Ky., 449 S.W.2d 916. (455 S.W.2d at 69.)

The judgment of the circuit court is affirmed.

HOGGE, J., concurs.

GANT, J., dissents.

GANT, Judge,

dissenting.

I disagree with the opinion of the majority. KRS 342.186, relied upon by the appellant, became effective June 21, 1974. Thus the statute was in effect for 11 months at the time the obligation created by this statute for notification to the employee arose. Although it is true that any statutes pertaining to the injury itself are those which are in effect at the time of the injury, those requiring notice must speak at the time the notice is required. This is no retroactive obligation on the employer but an obligation which existed by statute almost one year before the expiration of the time under the statute of limitations.

The employer, having failed to give notice required by a statute in effect at the time the notice was required, should be estopped from raising the defense of statute of limitations in accordance with KRS 342.186.


text:
    Jacob CARR, Jr., Rockcastle Villa Partnership and Carr Co. of Corbin, Inc., Appellants, v. Clyde BARNETT and wife, Minnie Lee Barnett, Wayne Stewart and wife, Ruby Stewart, Clyde Linville and wife, Margaret Linville, Roy G. Brown and wife, Flora Mae Brown, Appellees. Clyde BARNETT and wife, Minnie Lee Barnett, Wayne Stewart and wife, Ruby Stewart, Clyde Linville and wife, Margaret Linville, Roy G. Brown and wife, Flora Mae Brown, Cross-Appellants, v. Jacob CARR, Jr., Rockcastle Villa Partnership and Carr Co. of Corbin, Inc., Cross-Appellees.
    Court of Appeals of Kentucky.
    April 6, 1979.

      Robert L. Milby, Hamm, Taylor, Milby & Farmer, London, for appellants and cross-appellees.
    Carl R. Clontz, Clontz & Cox, Mt. Vernon, for appellees and cross-appellants.
    Before HOGGE, LESTER and VANCE, JJ.
   LESTER, Judge.

Plaintiffs below, appellees in the direct appeal, recovered a judgment awarding them damages for unauthorized removal of their dirt against Jacob Carr, Jr. and C. and C. Contracting Corporation, the latter of which is not a party to this appeal, and an order granting plaintiffs an easement by implication over land owned by Rockcastle Villa Partnership. However, those same parties were denied judgment permitting them to connect with certain utility lines installed by Jacob Carr, Jr. on land owned by the partnership. Carr Co. of Corbin, Inc. was dismissed as a defendant in the circuit court and nothing is requested against that entity before this tribunal.

Barnett, Stewart, Linville and Brown owned a fifteen acre tract of land abutting on Old Brodhead Road in Mt. Vernon. They entered into negotiations with Jacob Carr, Jr. to construct a housing project on part of the land, and in furtherance of the scheme, they formed a partnership in which they owned 4% and Carr and several others had 96%. Carr was to be the managing partner. Barnett and his co-owners conveyed the five acres of their tract that fronted on the highway to the partnership but failed to retain an easement for purposes of ingress and egress to the remaining land.

The prime contractor for the construction of the project was Carr Co. of Corbin, Inc. which, by way of brief, appellants claim is owned by Jacob Carr, Jr. C. and C. Contracting Corporation was the sub-contractor for grading and drainage work. During the last mentioned phase, additional fill dirt was required and after an unsuccessful attempt to obtain it elsewhere, Carr directed the foreman of C. and C. to get it from appellees’ adjoining land which was done to the extent of 917 cubic yards.

Prior to the conveyance of the land to the partnership, the appellees maintain there was a parol agreement whereby the partnership was to convey the access road and utility lines to the city so that the owners of the ten acres would be afforded ingress to their land and would be permitted to connect to water and sewer pipes. When the grantors made demand for the balance due on the purchase price of the five acre tract from Carr, he replied that he would pay only if Barnett and the others would surrender to him their interest in the partnership and bear a proportionate share of the cost of the street and the utilities. The plaintiffs below refused to comply and brought an action for the balance of the purchase price, damages for the removal of the dirt, an easement of necessity and for an order permitting them to connect to the utility services. The lower court agreed with the appellees in their first three contentions and a judgment was entered awarding them their money, an easement and damages against Carr personally and C. and C. Construction for the value of the fill dirt. However, the court refused permission to connect with the lines saying that such an act was prohibited by the Statute of Frauds.

C. and C. did not appeal, but Carr maintains that since he was acting as agent for the prime contractor, Carr Co. of Corbin, Inc., and no judgment was entered making it liable, then such a decision could not be reached as to him. He also maintains that the easement was improper when the grantors voluntarily executed a conveyance and failed to retain a right-of-way. On cross-appeal; the land owners contend the Statute of Frauds does not act as a bar to their agreement for connecting the pipes.

It is undisputed that Carr was aware of the boundary lines between the five acre and ten acre tracts, and in spite of his denials, the jury agreed with the landowners that there was no authorization given to Carr to go upon their land and remove the fill dirt. The direction given to C. and C.’s foreman to enter upon the abutting property and remove the dirt was tortuous in nature, and in the language of the Restatement (Second) of Agency § 343 (1958):

An agent who does an act otherwise a tort is not relieved from liability by the fact that he acted at the command of the principal or on account of the principal, except where he is exercising a privilege of the principal, or a privilege held by him for the protection of the principal’s interest, or where the principal owes no duty or less than the normal duty of care to the person harmed.

See the comments under § 348, as well as § 344 and § 351 to the effect:

An agent who directs or permits conduct of another under such circumstances that he should realize that there is an unreasonable risk of physical harm to others or to their belongings is subject to liability for harm resulting from a risk which his direction or permission creates.

Thus, we note that an agent is personally liable for his own tortuous acts even though performed within the scope of his employment and under conditions which impose liability upon the principal also. Kentucky-Tennessee Light and Power Co. v. Nashville Coal Co., 37 F.Supp. 728 (E.D.Ky.1941). But it has long been the law of this jurisdiction that the party harmed can look for reparation from the agent only without the necessity of proceeding against the principal. Pool v. Adkisson, 31 Ky. 110, 1 Dona 110 (1833).

We turn now to the issue concerning the easement. The applicable doctrine is found at 2 American Law oí Property § 8.38 at 259 and 260 (A. J. Casner ed. 1952), namely:

Among the circumstances which contribute to the inference that an easement was intended to be created is the need for an easement. If the need is very great, an inference will be drawn that an easement was intended to be created.
Cases of land entirely shut off from access to a highway by land of others present a quite clear case of implication. So clear is the implication that it will be made even in favor of a grantor who has conveyed part of his land in such a way as to leave the remainder without access to a highway.

See also Gaillard, Reservation of Easements by Implication, 22 Ky.L.J. 313 (1934).

We agree with appellant that “the law will imply an easement in favor of a grantee more readily than it will in favor of a grantor” as is recited in Himler Coal Co. v. Kirk, 205 Ky. 666, 266 S.W. 355 (1924); but reading that opinion in its entirety, we note that the court, quoting from McGurn v. L. & N. R. Co., 177 Ky. 835, 198 S.W. 222, 223 (1917), said:

. where there is a grant of land with full covenants of warranty, and without express reservation of easement, there can be no reservation by implication, unless the easement is strictly necessary ; the term “necessary” meaning there can be no other reasonable mode of enjoying the dominant tenement without the easement, (emphasis added)

In the case at bar, the tract upon which the housing project is situated separates appellees’ ten acres from Old Brod-head Road, and there is no evidence that the property can be reached without crossing appellants’ land. Therefore, the implied easement affords not a mere convenience as in Marrs v. Ratliff, 278 Ky. 164, 128 S.W.2d 604 (1939), but a necessary means of ingress and egress. The circuit court was correct.

We find no Kentucky authority which would require appellees to bear a part of appellants’ expense attendant upon the construction of the street, but if the roadway is not dedicated to the municipality and if the plaintiffs below create major maintenance problems, then that would be the proper subject for future consideration. For some general rules pertaining to easement repairs, see McManus v. Sequoyah Land Associates, 240 Cal.App.2d 348, 49 Cal.Rptr. 592, 20 A.L.R.3d 1015, 1023 (1966).

Upon cross-appeal, the plaintiffs below urge that the trial court erred in holding that the parol agreement as to connecting the sewer and water lines was violative of the Statute of Frauds. In the direct appeal, the appellant makes no mention of this issue and as cross-appellees, they filed no brief. Under such circumstances, we could invoke the penalties provided in CR 76.12(8)(c); however, we reverse the trial court on the merits.

Connecting with utility lines situated upon another’s property is a privilege to use his land and does not create an interest in that land, and therefore, is nothing more than a license. 2 American Law of Property, § 8.109 et seq. at 315. Thus, it can be created by parol, and the license being part of the consideration for cross-ap-pellees’ land, it cannot be revoked. Moreover, “[n]either the requirements of the common law respecting the use of sealed instruments in creating incorporeal interests nor the provisions of the Statute of Frauds relating to the creation of interests in land are applicable to their (licenses) creation.” 2 American Law of Property § 8.118 at 322 and Burgess v. Swetnam, 257 Ky. 64, 77 S.W.2d 385 (1935).

On direct appeal, the judgment is affirmed and upon cross-appeal, it is reversed.

All concur.


author: SEILER, Judge.

text:
    ARMCO STEEL CORPORATION, Respondent, v. STATE TAX COMMISSION, Appellant.
    No. 60512.
    Supreme Court of Missouri, en banc.
    March 13, 1979.
    As Modified On Court’s Own Motion April 10, 1979.
    Rehearing Denied May 17, 1979.
    John D. Ashcroft, Atty. Gen., Stanley Robinson, Asst. Atty. Gen., Jefferson City, for appellant.
    W. H. Bates, William K. Waugh, III, La-throp, Koontz, Righter, Clagett, Parker & Norquist, Kansas City, for respondent.
   SEILER, Judge.

This case involving the construction of revenue laws is a direct appeal pursuant to Mo.Const. art. V, § 3. The question to be determined is whether, under § 143.040-1, RSMo 1969, respondent Armco Steel Corporation was entitled only to a deduction for Missouri state income tax purposes in 1969 of Armco’s proportionate share of the federal income taxes for that year actually paid by it and its subsidiaries as shown in their consolidated federal return (which would be $12,010,748.42) or whether Armco was entitled to determine its deduction for federal income tax on the basis of what the federal income tax would have been had Armco reported as a separate entity ($17,-358,029.90).

According to the stipulation of facts filed in the circuit court, Armco is an Ohio corporation, authorized to do business in Missouri. None of its subsidiaries do business in Missouri. In 1969, Armco and its subsidiaries filed a consolidated federal tax return. Missouri did not permit the filing of a consolidated return in 1969, and Armco thus filed a tax return in Missouri as a separate corporate entity. In arriving at its Missouri tax liability, Armco, in accordance with its view of § 143.030-1, took a deduction of $17,358,029.90 for federal income tax.

The pertinent portions of § 143.040-1 stated:

“1. Each year, at the times and in the manner now or hereafter provided, a tax shall be levied upon, assessed against, collected from, and paid by every corporation ... in such percent, as now or hereafter provided, of the net income from all sources in this state during the preceding year . . From said income shall be deducted all of the ordinary and necessary expenses incurred in this state to produce said income, including . such portion of interest paid by the taxpayer and such portion of taxes on income assessed by the United States against the taxpayer as the gross income from all sources within this state shall bear to the gross income of the corporation from all sources.”

Armco justifies its action on the theory that while it filed a consolidated federal return, it had an agreement with its subsidiaries by which it was obligated to, and did, reimburse those subsidiaries which sustained losses for federal income tax purposes for 1969 for the tax benefits the inclusion of those loss members in the affiliated group provided the group in filing the consolidated federal return. As a result, Armco says it paid out a total amount equal to what it would have paid had it filed a separate federal return. Thus, it concludes, to disallow a deduction of an equal amount would be to increase its Missouri tax liability simply because members of the affiliated group outside Missouri sustained losses which lowered the amount of the group’s consolidated federal return liability.

The director of revenue, however, did not agree that the intercorporate payments constituted taxes assessed by the federal government. The director assessed Armco an additional amount for 1969, contending that Armco was assessed by the United States, and thus was entitled to deduct, only its proportionate part of the $12,010,-748.42 consolidated federal liability assessed against the affiliated group. The department of revenue confirmed the director’s assessment. Armco appealed to the state tax commission which affirmed, whereupon Armco appealed to the circuit court, which reversed the tax commission, and from this reversal the commission has appealed to this court.

The parties agree that the purpose of § 143.040 is to ascertain and tax the net income derived by a corporate taxpayer from its income producing activities in Missouri and that, since Armco is the only member of the affiliated group doing business in Missouri, Armco’s deductions should be the amount of federal taxes assessed against it for its income producing activities in Missouri. The question to be resolved then, is what is meant in § 143.040-1 by “[f]rom said income shall be deducted . such portion of taxes on income assessed by the United States against the taxpayer

Armco primarily contends that “assess” means that amount of federal tax which would be determined on its Missouri income and not the amount actually paid, citing the primary definition of “assess” given in Webster’s Third New Int’l Dictionary 131 (1971) as being “to determine the rate or amount of (as a tax, charge or fine)”; that if Missouri is to tax on a separate entity basis, it must permit deductions on that basis. To interpret “assess” to permit Missouri to do otherwise, would be inconsistent; logic requires that income and deductions be computed on the same basis and by the same accounting system.

In support of its interpretation of the statute, Armco cites Cities Service Gas Co. v. McDonald, 204 Kan. 705, 466 P.2d 277 (1970) which involved a similar fact situation. The court therein upheld the taxpayer’s claim that payments made to affiliated corporations should be deductible as federal taxes paid or incurred, concluding that as a result the government lost no money and the taxpayer paid no less money than would have been the case had an individual return been filed. However, that case is distinguishable in that a Kansas statute required that the deduction for federal taxes be computed on the same basis as that used to compute net income under the Kansas income tax act, that is, a separate return basis.

In addition, we find the reasoning followed in cases holding that only the amount of federal taxes actually paid may be deducted more persuasive. See Northern Natural Gas Co. v. Comm’r of Rev., 251 N.W.2d 125 (Minn.1977); Continental Telephone Co. of Utah v. State Tax Comm’n, 539 P.2d 447, 451 (Utah, 1975); Standard Oil Co. v. Alabama, 55 Ala.App. 103, 313 So.2d 532, 537 (1975); Trunkline Gas Co. v. Collector of Revenue, 182 So.2d 674 (La.App.1965), aff’d, 248 La. 1101, 184 So.2d 25 (1966). These cases considered and rejected arguments similar to Armco’s. Armco seeks to distinguish them on the basis that they concern statutes which refer to “taxes paid” rather than “taxes assessed”, and that the courts were influenced by state regulations supporting the result reached. While differences in the language of statutes in all the cases require that each be considered on its own facts, we note that “to assess a tax is to declare a tax to be payable”, Valle v. Fargo, 1 Mo.App. 344 (1876), from which it would follow that the taxes paid would presumably be the taxes assessed. Moreover, even if we accept Armco’s primary definition of assessed as “to determine the rate or amount of”, the amount “assessed” must be the rate or amount actually determined, and not the rate or amount which would have been determined had a separate federal return been filed.

Thus, we conclude that regardless that Armco expended an amount equal to what it would have expended had it filed a separate federal return, it was not assessed that amount. Section 143.040 was not designed to permit a corporation to deduct any expense which it may have incurred as a result of having filed a consolidated federal return, but only to permit it to deduct the actual assessment made against it in order to arrive at a more accurate approximation of its net income from its Missouri business activities. Whatever the business reason for the affiliates joining in the consolidated return, the payments Armco made to its affiliates still remained merely exchanges between affiliated corporations and not taxes assessed by or paid to the federal government.

This can perhaps best be illustrated by the following from Bittker and Eustice, Federal Income Taxation of Corporations and Shareholders, 15 (3d ed. 1971), which notes that the basic concept underlying the consolidated return provisions of the Internal Revenue Code:

“is that the consolidated group constitutes, in substance, a single taxable enterprise, despite the existence of technically distinct entities; as such, its tax liability ought to be based on its dealings with “outsiders,” rather than on intra-group transactions. This “single taxpayer” concept lies at the heart of the treatment, both past and present, of intercom-pany transactions which, in general, are eliminated in computing the group’s consolidated taxable income.”

As Bittker and Eustice go on to note, “[i]n effect, the results [of filing a consolidated return] are not unlike the “joint return” treatment of husband and wife.” Id. It is of course appropriate for a husband and wife to take advantage of any benefits which will accrue to them by filing a joint rather than individual returns, just as it is appropriate for Armco to utilize the consolidated federal return if to do so will work to its advantage. However, while a husband, who made a profit, may thus file a joint federal return with his wife, who incurred a loss, and thereby reduce their joint federal tax liability, this would afford no justification for the husband then to file an individual Missouri return and claim a right to a federal tax deduction of what his federal tax would have been had he filed an individual federal return. This would be so regardless of the fact that he paid his wife any federal tax savings he realized by her inclusion in the joint return. Such payments would be intra-family exchanges, and could not affect the amount of tax liability which was actually assessed on the federal return or which could be legally deducted on his Missouri return. While of course federal consolidated return provisions are quite complex, and intra-group payments must be taken into account for some purposes, such as the computation of earnings and profits, in a different manner than would be true of intra-family payments, the basic analogy holds.

Armco argues further, however, that § 143.200, RSMo 1969, provided that Missouri tax regulations “shall follow as nearly as practicable the rules and regulations prescribed by the United States government on income tax assessments and collections.” Armco then points out that § 1.1502-33(d)(2)(H) of the United States Treasury Income Tax Regulations, which deal with the apportionment of tax liability among members of a consolidated group in the ascertainment of earnings and profits, recognizes the method of allocation utilized by Armco in determining its federal tax liability. Be that as it may, the rule is that the director of revenue cannot interpret the statute in accordance with federal regulations if to do so will change the substantive rules of the Missouri statute. See Mobil Oil, 513 S.W.2d at 323 (where federal and Missouri statutes vary, so must their rules, despite § 143.200).

As to deductions, the general rule is that:

“[djeductions for income tax purposes are a matter of legislative grace. The burden is on the taxpayer seeking a deduction to demonstrate that he comes within the terms of a statute granting that privilege.” Mobil Oil Corp. v. State Tax Com’n of Missouri, 513 S.W.2d 319, 322-23 (Mo.1974).

Armco has failed to establish that § 143.-040-1 entitles it to deduct the amount of federal income tax for which it would have been liable had it filed as a separate entity. We thus conclude that the circuit court was incorrect in reversing the tax commission’s assessment. The judgment is reversed and the cause remanded for proceedings not inconsistent with this opinion.

MORGAN, C. J., BARDGETT, DONNELLY, RENDLEN, SIMEONE, JJ., and FINCH, Senior Judge, concur.

WELLIVER, J., not participating because not a member of the court when cause was submitted.

      . The Kansas statute, KGS 79-3202(8), G.S. 1949, provided: “[t]he word ‘paid’ means ‘paid or incurred’ or ‘paid or accrued’ and shall be construed in accordance with the method of accounting used as a basis for computing net income under this act.”


author: PER CURIAM: DONNELLY, Judge,

text:
    STATE of Missouri, Respondent, v. ALL STAR NEWS AGENCY, INC., Appellant (two cases).
    Nos. 60609, 60616.
    Supreme Court of Missouri, En Banc.
    April 10, 1979.
    Rehearing Denied May 17, 1979.

      Errol Copilevitz, Kansas City, Leonard J. Frankel, Clayton, for appellant.
    John D. Ashcroft, Atty. Gen., Steven D. Steinhilber, Asst. Atty. Gen., Jefferson City, for respondent.
   PER CURIAM:

This appeal involves two civil proceedings, consolidated here and at trial, wherein the State seeks forfeiture and destruction, under §§ 542.281 and 542.301.3, RSMo Supp. 1975 of magazines and movies seized from appellant. Appellant was a wholesale distributor of magazines and movies in St. Louis.

The statutes involved provide a civil procedure whereby the State may search for, seize, and destroy obscene material. In general terms they provide, where twenty or more items are at issue, for a four-stage process. First, upon application of the State to a court for a warrant to search for and seize obscene material, the dealer or exhibitor of the obscene matter must be given notice and an adversary hearing. Once notice is received, any removal or alteration of the material at issue is punishable by contempt. Second, an adversary hearing must be held before a search warrant for such material may issue. The purpose of the hearing is to determine whether there is probable cause to believe that the material is located where alleged and will ultimately be found to be obscene. Third, if a warrant issues, a determination of obscenity is made by an advisory jury. Fourth, the trial judge determines, after the jury verdict, whether the material is obscene or not obscene as a matter of law. If the material is obscene, an order of forfeiture and destruction issues.

The proceedings at issue in this appeal are virtually identical except that one involves the seizure solely of movie films while the other involves the seizure solely of magazines. Over 1,000 films were seized. Nearly 13,000 magazines were seized.

The first proceeding was commenced on September 9, 1977, by issuance and service upon appellant of a Notice of Adversary Hearing. The notice listed the material for which a search warrant was being sought and in substance stated, as provided by § 542.281.5, that “After service of notice of the hearing, intentional alteration, destruction, or removal of any matter, or duplicate of matter, described in the notice shall be punished as contempt of court.” A police officer was stationed at appellant’s warehouse to insure that no material was removed.

The adversary hearing began September 19, 1977. This proceeding involved movie films.

The second proceeding progressed similarly. It commenced on September 21, 1977, by issuance and service of a Notice of Adversary Hearing. The notice contained the same warning against removal or alteration of the material listed as in the proceeding involving movie films. A police officer was stationed at appellant’s warehouse to insure that no material was removed. The adversary hearing was held September 23, 1977. This proceeding involved magazines.

The cases pertinent to this appeal are Kingsley Books, Inc. v. Brown, 354 U.S. 436, 77 S.Ct. 1325, 1 L.Ed.2d 1469 (1957); Marcus v. Search Warrant, 367 U.S. 717, 81 S.Ct. 1708, 6 L.Ed.2d 1127 (1961); A Quantity of Books, et al. v. Kansas, 378 U.S. 205, 84 S.Ct. 1723, 12 L.Ed.2d 809 (1964); Heller v. New York, 413 U.S. 483, 93 S.Ct. 2789, 37 L.Ed.2d 745 (1973); and Roaden v. Kentucky, 413 U.S. 496, 93 S.Ct. 2796, 37 L.Ed.2d 757 (1973).

In our opinion, insofar as they pertain to the facts and issues on this appeal, the teachings of these cases are:

(1) that all materials alleged to be obscene are presumptively protected under the First Amendment.

(2) that, as a general proposition, no restraint on dissemination of presumptively protected material prior to a judicial adversary hearing on the question of probable obscenity is constitutionally permissible.

(3) that a prior restraint of one copy of each magazine or film alleged to be obscene may be permissible in order that a determination of the question of probable obscenity may be made.

(4) that the ultimate purpose of the taking of such copy (for use as evidence at a criminal trial; for use as evidence in an injunction proceeding; or for destruction) is irrelevant.

(5) that a restraint, prior to a judicial adversary hearing, of more material than is necessary for a determination of the question of probable obscenity is constitutionally impermissible.

In the instant case, there were restraints of all copies of magazines and movies in the warehouse between the time the notices of adversary hearing were served and the adversary hearings were held. There were prior restraints of materials presumptively protected under the First Amendment. This was constitutionally impermissible under the First, Fourth, and Fourteenth Amendments. Since a violation of these Amendments infected the proceedings, in order to vindicate appellant’s constitutional rights the judgments must be reversed, and the causes remanded for further proceedings not inconsistent with this opinion. Marcus, supra, 367 U.S., l.c. 738, 81 S.Ct. 1708.

The judgments are reversed and the causes remanded.

MORGAN, C. J., and BARDGETT, RENDLEN, SIMEONE and WELLIVER, JJ., concur.

DONNELLY, J., concurs in separate concurring opinion filed.

SEILER, J., concurs and concurs in separate concurring opinion of DONNELLY, J.

DONNELLY, Judge,

concurring.

These are the latest in a line of cases in which we deal with the question of obscenity by application of law announced by the United States Supreme Court. I concur, but, at the risk of being considered presumptuous, have some observations to make.

In Roth v. United States, 354 U.S. 476, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957), the United States Supreme Court began to seriously grapple with the question of obscenity. It would serve no useful purpose here for me to describe the twists and turns which culminated in Miller v. California, 413 U.S. 15, 93 S.Ct. 2607, 37 L.Ed.2d 419 (1973). It is enough to note that the author of Roth has reached the conclusion “that the time has come to make a significant departure” from the Roth approach. Paris Adult Theatre I v. Slaton, 413 U.S. 49, 73, 74, 93 S.Ct. 2628, 2642, 37 L.Ed.2d 446 (1973) (Brennan, J., dissenting).

For me, the problem of regulating obscenity involves an attempt to reconcile two competing interests: the right to speak freely and the right to privacy. The right to speak freely needs no explication from me. It is the favorite of all libertarians and has properly dominated the thinking of our people throughout the history of our Nation. The right to enjoy life (from which the right to privacy derives) has not received the literary attention it deserves.

In December, 1890, Samuel D. Warren and Louis D. Brandéis noted that “in very early times, the law gave a remedy only for physical interference with life,” but that later “there came a recognition of man’s spiritual nature, of his feelings and his intellect. Gradually the scope of these legal rights broadened; and now the right to life has come to mean the right to enjoy life,— the right to be let alone * * Warren & Brandeis, The Right to Privacy, 4 Harv.L.Rev. 193 (1890). Nearly thirty-eight years later, in different context, Mr. Justice Brandéis referred to “the right to be let alone — the most comprehensive of rights and the right most valued by civilized men.” Olmstead v. United States, 277 U.S. 438, 478, 48 S.Ct. 564, 572, 72 L.Ed. 944 (1928) (Brandeis, J., dissenting).

How does all' of this relate to obscenity? In my view, unsolicited obscenity is an assault on the spiritual nature, the feelings and the intellect of the individual. It is an assault on the right to privacy. It is an assault on the right to be let alone. When a person is exposed to obscenity involuntarily, it violates “the right most valued by civilized men.”

In my view, when obscenity is at issue, and a choice must be made between the right to speak freely and the right to privacy — the right to be let alone, the right to speak freely must yield.

If such concept were adopted, I would anticipate the following results:

(1) that obscenity would be protected by the First Amendment and that the right to communicate obscenity to prior consenting adults would be absolute. The right to be let alone can be waived and would be waived by prior consenting adults.

(2) that although obscenity were protected by the First Amendment, the right to communicate obscenity would be accommodated to the right of persons generally not to be exposed to it — to be let alone. This would give recognition to an overriding concern where state interests of protecting children and unconsenting adults were involved. See Redrup v. New York, 386 U.S. 767, 769, 87 S.Ct. 1414, 18 L.Ed.2d 515 (1967).

(3) that a new definition of obscenity would be adopted. If it were established law that the freedom to communicate obscenity to prior consenting adults is absolute, a definition of obscenity which would fully serve state interests of protecting children and uneonsenting adults would seem appropriate. Certainly, limiting proscriptions of offensive material to hard-core pornography would be grossly inappropriate. See Miller v. California, 413 U.S. 15, 93 S.Ct. 2607, 37 L.Ed.2d 419 (1973).

(4) that the essential problem in obscenity cases would shift from one of defining “obscenity” to one of defining “prior consent.” Hopefully, this problem would prove less intractable.

(5) that any prior restraint on the right to communicate obscenity would violate the First Amendment. See Emerson, The Doctrine of Prior Restraint, 20 Law & Con-temp.Prob. 648 (1955).

Of course, the scholars will recognize that the concepts I espouse today emanate from the writings of Sir William Blackstone (4 W. Blackstone, Commentaries 151-152):

“The liberty of the press is indeed essential to the nature of a free state; but this consists in laying no previous restraints upon publications, and not in freedom from censure for criminal matter when published. Every freeman has an undoubted right to lay what sentiments he pleases before the public; to forbid this is to destroy the freedom of the press; but if he publishes what is improper, mischievous, or illegal, he must take the consequence of his own temerity. To subject the press to the restrictive power of a licenser, as was formerly done, both before and since the revolution, is to subject all freedom of sentiment to the prejudices of one man, and make him the arbitrary and infallible judge of all controverted points in learning, religion, and government. But to punish (as the law does at present) any dangerous or offensive writings, which, when published, shall on a fair and impartial trial be adjudged of a pernicious tendency, is necessary for the preservation of peace and good order, of government and religion, the only solid foundations of civil liberty. Thus the will of individuals is still left free; the abuse only of that free will is the object of legal punishment. Neither is any restraint hereby laid upon freedom of thought or inquiry; liberty of private sentiment is still left; the disseminating or making public of bad sentiments, destructive of the ends of society, is the crime which society corrects.”

My views also reflect the provisions of the Missouri Constitution (Mo.Const. Art. I, §§ 2 and 8). However, it would serve no useful purpose to implement the Missouri Constitution so long as we are constrained by the approach of Roth and its successors.


author: BARDGETT, Judge.

text:
    Thomas P. McDERMOTT, Respondent, v. Gus O. NATIONS et al., as Members of the Board of Police Commissioners of St. Louis County, Missouri, Appellants.
    No. 60664.
    Supreme Court of Missouri, en banc.
    April 10, 1979.
    Rehearing Denied May 17, 1979.

      Marilyn K. Wallach, Asst. County Counselor, Thomas W. Wehrle, St. Louis County Counselor, Andrew J. Minardi, Associate County Counselor, Clayton, for appellants.
    Mark R. Bahn, James M. Martin, Rau & Martin, St. Louis, for respondent.
   BARDGETT, Judge.

This is an appeal from the Circuit Court of St. Louis County involving a petition for review of the disciplinary action taken by appellants, members of the Board of Police Commissioners of St. Louis County (board), reducing respondent’s rank in the St. Louis County Police Department and forfeiting 175 hours of respondent’s accumulated compensatory time. The circuit court entered its judgment upholding the reduction in rank. However, the court set aside the forfeiture of compensatory time on the ground that such was a “fine” in derogation of art. 1, sec. 31, Mo.Const., and ordered the board to reinstate respondent’s compensatory time. The board appeals.

The case involves the construction of art. 1, sec. 31, Mo.Const.; therefore, jurisdiction is in this court pursuant to art. 5, sec. 3, Mo.Const., as amended 1970.

Respondent Thomas P. McDermott is a St. Louis County commissioned police officer. On February 2, 1974, respondent, along with other police officers, was given a written promotional examination. During the examination, respondent was observed talking. A written report of the incident was prepared and forwarded to the St. Louis County Police Department Bureau of Internal Affairs. The department conducted an investigation of the matter and found respondent to have violated the department’s rules and regulations.

On February 26, 1974, respondent received from the board a letter of disciplinary action reducing respondent’s rank from patrolman-step 6 to patrolman-step 1 and ordering forfeiture of 175 hours of accumulated compensatory time.

Respondent appealed from the disciplinary action. A hearing was held on August 9 and 13, 1974. The hearing officer handed down findings on December 31, 1974. He found respondent had violated the rules and regulations of the department but recommended a reduction in the severity of the discipline. The board subsequently issued findings consistent with those of the hearing officer but concluded that the disciplinary action ordered was not unduly severe.

Respondent filed a petition for review pursuant to sec. 536.100, RSMo 1969, in the circuit court of St. Louis County. He asserted as grounds for reversal, inter alia, that the procedures afforded him at the hearing were unlawfully insufficient; that the conclusions of the hearing officer were unsupported by substantial and competent evidence; that the hearing denied him due process; and that the imposition of the forfeiture of compensatory time for services already rendered violated art. 1, sec. 31, of the constitution of Missouri.

The court sustained the reduction of respondent’s rank but set aside the forfeiture of the 175 hours of compensatory time as a “fine” in derogation of art. 1, sec. 31, Mo. Const., which prohibits the passage of any law delegating to any board or other administrative agency the “authority to make any rule fixing a fine or imprisonment as punishment for its violation”, and ordered the board to reinstate respondent’s compensatory time.

Two issues are presented on this appeal: (1) Does the supreme court lack jurisdiction over the appeal by reason of the fact that the board’s notice of appeal is from “a portion of the judgment”, and (2) does the forfeiture of 175 hours of accumulated compensatory time constitute the imposition of a “fine” by an “administrative agency” such as would violate art. 1, sec. 31, Mo.Const.

I.

Respondent contends that the supreme court does not have jurisdiction over this appeal because the board is appealing from only a portion of the judgment rendered below. Respondent relies on Anthony v. Morrow, 306 S.W.2d 581 (Mo.App.1957), which states the general rule that a party may appeal from a part of a judgment only “where that part is the result of the trial of issues distinct, entire, and sever-able from the other issues tried.” Id. at 583. He argues that the portion appealed from in the instant case is not severable and distinct from the rest of the judgment entered by the circuit court. Respondent supports his position by an analogy to the rules governing appeals from the magistrate courts. Only one judgment is authorized in magistrate court and any appeal must include all issues determined by the magistrate court in order to vest jurisdiction in the circuit court. See sec. 512.270, RSMo 1969; Preston Plumbing, Inc. v. Melman, 528 S.W.2d 524 (Mo.App.1975); Gloria Lee Realty Co. v. Madigan, 243 S.W.2d 118 (Mo.App.1951).

Appellant board counters that most of the authorities upon which respondent’s contentions are based consist of appeals from magistrate court decisions and that the analogy to these decisions is not appropriate. Appellant board concedes that by statutory mandate an appeal from a magistrate court’s judgment must be from the whole judgment; that no portion of such judgment is severable because the whole case is to receive a de novo hearing in the circuit court. It is the same as if the case had never been tried so far as this matter is concerned. However, appellant points to sec. 512.020 as the only statute governing the present appeal and contends that under that statute an appeal may be had from that distinct portion of a judgment by which a party has been aggrieved, and that such has been the case here.

The judgment of the circuit court disallowed only the imposition of the forfeiture of compensatory time; however, the judgment in toto disposed of all issues and parties and was, therefore, final for purposes of appeal. Appellant was aggrieved only with respect to that part of the judgment which held appellant had no power to deprive respondent of compensatory time. Since that part is severable and distinct from the whole the appeal is appropriate under sec. 512.020 and this court has jurisdiction. The point is overruled.

II.

Respondent contends that the forfeiture of compensatory time is equivalent to a “fine”, and as such is in derogation of art. 1, sec. 31, of the constitution. The circuit court agreed with respondent and set aside the forfeiture. Appellant board asserts that the circuit court erred in its determination that this exercise of the police board’s disciplinary power ran afoul of the constitutional prohibition. Admitting that forfeiture of accrued benefits here may be considered as equivalent to a monetary penalty, the board urges that the term “fine” in its particular context in the constitution is restricted to criminal penalties and, therefore, does not apply to what appellant calls a purely civil penalty imposed without regard to any criminal conduct.

The action imposing the forfeiture of 175 hours of accumulated compensatory time is outside the scope of the limitation of art. 1, sec. 31, Mo.Const. The legislative history of this section evidences an intention to exclude purely civil disciplinary action of police and fire departments from the meaning of the term “fine” as used therein.

In ordering a reduction in respondent’s rank and the forfeiture of 175 hours of compensatory time, the board was acting in its role of employer disciplining its employee. Appellant board derives its power to impose discipline on employee-patrolmen, such as respondent, from art. 6, sec. 18(a), Mo.Const., which authorizes St. Louis County to have a charter form of government. Section 4.270.7(5) of the county charter calls for the promulgation of police regulations and states that the Board of Police Commissioners shall “promulgate . . rules and regulations for the . . conduct and discipline of personnel of the department of police . . The St. Louis County Police Department Code of Discipline and Ethics, paragraph 6.31, provides that an offense against the code may be punished by, inter alia, discharge, reduction in rank, fine, and loss of accumulated compensatory time off.

The question is whether the forfeiture of compensatory time pursuant to the board’s disciplinary power violates the section of the constitution which provides: “That no law shall delegate to any commission, bureau, board or other administrative agency authority to make any rule fixing a fine or imprisonment as punishment for its violation.” Art. 1, sec. 31, Mo.Const. In other words, the issue is whether the delegation and exercise of the authority to discipline by fines violates, in this case, the particular constitutional limitation.

A threshold question is whether the challenged forfeiture of compensatory time can even be characterized as a “fine”; if not, there is no need to go on to determine the exact parameters of the term “fine” as used in its constitutional context. Appellant board suggests that a “fine” is a pecuniary punishment imposed on a person convicted of a crime or offense, citing Sawyer v. Barbour, 142 Cal.2d 827, 300 P.2d 187 (Cal.App.1956), and State v. Rumfelt, 241 N.E. 375, 85 S.E.2d 398 (1955). Accord, 36A C.J.S. Fines § 1 (1961).

In the instant case, the forfeiture involves no direct exaction of money from respondent for his behavior in the examination room. Concededly, it entails the loss of something of pecuniary value, but all pecuniary losses do not constitute a “fine”. For instance, suspension or reduction in rank both indirectly involve the loss of wages, yet no contention has been made that such would be “fines”. The St. Louis County Police Department Code of Discipline and Ethics, paragraph 6.31, provides as separate punishments available in disciplinary actions, “(c) fine” and “(f) loss of accumulated compensatory time off”.

On the other hand, the pecuniary loss due to the forfeiture of compensatory time, unlike the loss stemming from suspension or demotion, is a loss of an accrued benefit. In fact, the County Police Department has given actual cash payments for such accrued compensatory time on various occasions in the past. Consequently, the forfeiture could arguably be characterized as a type of a “fine”.

One other problem in characterizing the forfeiture of a pecuniary benefit as a “fine” is suggested by the language of Sawyer v. Barbour, supra, and State v. Rumfelt, supra. These cases indicate a criminal connotation may inhere in the use of the term “fine”. One Missouri case, Ex parte Alexander, 39 Mo.App. 108 (1890), appears to lend some support. In Alexander the court differentiated the civil usage of the word “forfeit” from the criminal usage. It stated that when “forfeit” was used in a criminal context, the meaning was equivalent to “fine”. The forfeiture of respondent’s compensatory time is a wholly noncriminal matter of simple discipline. Thus, if a monetary punishment is definable as a “fine” only if imposed after conviction of a criminal offense, the forfeiture cannot be characterized as a “fine”.

The word “fine”, however, has not been limited by all courts to purely criminal usage. The court in State ex rel. Howell County v. West Plains Tel. Co., 232 Mo. 579, 135 S.W. 20 (1911), discussed the use of the term “fine” in a corporations statute. Noting that “fine” is often used to indicate a criminal penalty, the court went on to state that “the mere use of the word ‘fine’ [does not make] it a criminal case.” Id. at 22. It pointed out that “the indiscriminate use of the words ‘penalty,’ ‘fine,’ and ‘forfeiture,’ make it difficult at times” to determine the form of action as respectively civil or criminal. Id. Therefore, the use of the term “fine” under some circumstances may include civil monetary punishments. It should be noted that this is consistent with the board’s own provision for the penalty of a fine in the Police Department Code of Discipline and Ethics. If “fine” has no noncriminal meaning, then that provision for imposition of fines would be superfluous. And so the forfeiture of respondent’s compensatory time, despite its noncriminal nature, should probably be characterized as a type of “fine”.

Assuming then that the forfeiture may be characterized as a “fine” of sorts, the central question remains whether it is the sort of “fine” contemplated by art. 1, sec. 31, of the constitution. Respondent’s argument that “a ‘fine’ is a ‘fine’ ” is superficially appealing, but unsound. The meaning of a term must be determined from the context in which it is used and from the intention of its draftsmen. See Ex parte Alexander, supra, 39 Mo.App. at 109. As was noted in State ex rel. Howell County v. West Plains Tel. Co., supra, 135 S.W. at 22, terms such as “fine” have been used indiscriminately at times by the legislature. However, a term expressing a constitutional limitation — as does “fine” in art. 1, sec. 31 — should be applied only as broadly as is intended by the constitution. The court has the duty to determine the intended parameters of the term and uphold the constitutionality of an otherwise valid action falling outside those parameters.

One construction of the term as used in the constitution is that it carries a criminal connotation. Art. 1, sec. 31, groups together the words “fine” and “imprisonment”. The constitutional debates appear to indicate that the type of “fine” contemplated is one which could be imposed in lieu of imprisonment, as well as one of which the nonpayment might result in imprisonment. See VI Debates of the Missouri Constitution 1943-44, p. 1779. This construction of “fine”, paralleling the definitions in State v. Dishman, 334 Mo. 874, 68 S.W.2d 797, 798 (1934), and 36A C.J.S. Fines § 1 (1961) — a pecuniary punishment imposed for the violation of a crime or misdemean- or — is consistent with the notion, also appearing in the debates, that the constitutional provision is meant to highlight the principle that to declare what shall constitute a crime and the punishment therefor is a power vested solely in the legislature and may not be delegated to an administrative body. See VI Debates, supra, at 1774; Missouri Constitutional Convention 1943-44, File No. 8, pp. 14-15.

Under this construction, the forfeiture of respondent’s accumulated compensatory time would not be a “fine” in derogation of art. 1, sec. 31. The St. Louis County Police Department Code of Discipline and Ethics does use some terms such as “punishment” and “offense”, often associated with criminal forms of action, but these should not be considered to transform the noncriminal nature of the disciplinary measures into criminal matters.

Fortunately, there is some specific guidance with respect to regulations governing the conduct of a commission’s own personnel in the legislative history of the constitutional provision. At one point in the debates, a great deal of concern was expressed regarding how the limitation of art. 1, sec. 31, would have impact upon the disciplinary procedures of the police and fire departments. One delegate noted that the Police Board of St. Louis had a set of disciplinary rules that provided for fines and other means of punishment. Debates, supra, at 1831. The delegate feared that the apparent breadth of the proposed provision might make such fines unconstitutional. The ensuing debate was quelled only when another delegate assured the convention that the matter of intradepartmental fines assessed by agencies such as the fire or police departments were not covered by the prohibition of art. 1, sec. 31, the delegate stating, Debates at 1836:

“[A] city and even the state itself [are] the same as any other employer and in their dealings with their employees all their laws and regulations, rules are merely a matter of contract of employment, and those so called fines are misnamed. They are merely part of a contract of employment between the city and the [policemen]. They have nothing to do with [this constitutional provision].”

Thus, the action imposing the forfeiture of 175 hours of accumulated compensatory time is outside the scope of the constitutional limitation.

The court holds that the appellant board’s action in ordering forfeiture of 175 hours of accumulated compensatory time is not a fine within the meaning of art. 1, sec. 31, Mo.Const., but is discipline the board is lawfully empowered to assess for violation of lawful rules promulgated by it.

The circuit court was in error in holding the board was constitutionally prohibited from assessing, as disciplinary punishment, the loss of compensatory time. This was the only ground stated by the court as the basis for its judgment.

The part of the judgment of the circuit court setting aside the appellant board’s order assessing a forfeiture of 175 hours compensatory time is reversed and the cause is remanded with directions to enter judgment in conformity with this opinion.

MORGAN, C. J., DONNELLY, REND-LEN, SEILER, SIMEONE, JJ., and FINCH, Senior Judge, concur.

WELLIVER, J., not participating because not a member of the court when cause was submitted.

      . This appeal was filed prior to January 2, 1979, the effective date of the 1976 amendment to art. 5, sec. 3, and, therefore, the court retains jurisdiction under the earlier provision.