author: COOPER, Judge.

text:
    CITY OF ELIZABETHTOWN, a Municipal Corporation, Appellant, v. HARDIN COUNTY FISCAL COURT et al., Appellees.
    Court of Appeals of Kentucky.
    March 25, 1977.
    Rehearing Denied June 3,1977.
    John L. Arnett, Elizabethtown, Donald E. Skeeters, Radcliff, for appellant.
    James N. Scudder, Elizabethtown, for ap-pellees.
    Before COOPER, REYNOLDS and VANCE, JJ.
   COOPER, Judge.

This case is on appeal from the Hardin Circuit Court which judgment held that the Hardin Fiscal Court could withdraw extraterritorial jurisdiction from the City of Eliz-abethtown Planning and Zoning Commission.

By resolution adopted by the Fiscal Court of Hardin County on March 11, 1970, and pursuant to KRS 100.131 the Fiscal Court granted to the City of Elizabethtown Planning and Zoning Commission extraterritorial jurisdiction extending two miles from the city limits. On April 16, 1970, the Eliza-bethtown Planning and Zoning Commission accepted that jurisdiction stating that said jurisdiction was for the purpose of planning and zoning. Thereafter, the Elizabethtown Planning and Zoning Commission exercised planning and zoning authority over the area adjacent to the City of Elizabethtown in Hardin County for a distance of two miles from the city limits. On March 8,1976, the Fiscal Court of Hardin County adopted a resolution in an attempt to withdraw the extraterritorial jurisdiction granted to the City of Elizabethtown Planning and Zoning Commission on March 11, 1970.

KRS 100.131 reads as follows:
An independent city planning unit may exercise extraterritorial jurisdiction for the purposes of subdivision regulations and, with the consent of the fiscal court, other regulations up to five (5) miles from all points upon the city’s boundary, but not beyond the county boundary, nor within the boundary of any city not in such planning unit, provided, however, that where the extraterritorial jurisdiction of planning units overlap, the boundary shall be midway between them. The jurisdiction of joint and regional planning units shall be coterminous with their political boundaries. Nothing herein, however, shall prevent any planning unit from making planning studies of areas located outside its jurisdiction.

It is clear from the statute that the City of Elizabethtown has a statutory discretion in assuming reasonable subdivision regulations up to five (5) miles from all points of the city boundary. However, any other regulatory power can only be exercised with the continuing consent of the governing body of the county wherein that city lies.

In the present case the authority for planning and zoning exercised by the City of Elizabethtown is dependent upon the consent of the Fiscal Court of Hardin County. This Court has held that a Fiscal Court acting in a legislative capacity may at any time revoke a prior order where no contract rights are affected. Crittenden County Court v. Shanks, 88 Ky. 475, 11 S.W.2d 468 (1889); Crick, County Judge v. Rash, 190 Ky. 820, 229 S.W. 63 (1921). Therefore, we hold that the Hardin Fiscal Court could withdraw extraterritorial planning and zoning jurisdiction from the City of Elizabeth-town pursuant to its resolution of March 8, 1976.

We affirm.

All concur.


source: Caselaw Access Project

author: GANT, Judge.

license: Public Domain

text:
    Ronnie MEADOWS, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    No. CA-56-MR.
    Court of Appeals of Kentucky.
    May 13, 1977.

      Jack Emory Farley, Public Defender, Com. of Ky., Larry H. Marshall, Asst. Public Defender, Frankfort, for appellant.
    Robert F. Stephens, Atty. Gen., Miles H. Franklin, Asst. Atty. Gen., Com. of Ky., Frankfort, J. Albert Jones, Commonwealth’s Atty., 2nd Judicial District, Padu-cah, for appellee.
    Before GANT, LESTER and PARK, JJ.
   GANT, Judge.

Appellant was convicted of Burglary in the First Degree under Ky.Rev.Stat. 511.-020. This appeal was taken alleging two errors; the first was that evidence of other crimes was admitted at the trial and, second, that the conviction, if any, should have been of Third Degree Burglary rather than First Degree Burglary.

The particular crime charged in this case resulted from a break-in at a dwelling house, a house trailer, which was unoccupied at the time, at which the Appellant stole a shotgun and several shells, together with certain other property. During the trial, in order to prove the possession of the shotgun which was later seen by a witness, Charles Grief, the Commonwealth Attorney asked Mr. Grief if he had seen the Appellant before this trial, apparently intending to elicit the answer that he had seen the Appellant in his home when he was holding the gun on him, and Mr. Grief answered that he had seen him “at the murder trial.” Objection was made to this reference and the trial court admonished the prosecutor, out of the hearing of the jury, that there should be no further evidence concerning the murder.

Subsequently, in questioning the witness Grief concerning a lunch box which was left at his home, the prosecutor asked the witness if he had seen the lunch box before, apparently intending to prove that it had been found at his house, to which the witness answered that he had seen the lunch box “when they carried my wife out of the house.” Objection was made to this statement and on both of these occasions a mistrial was requested but the court overruled the motion and admonished the jury not to consider the statements.

In isolation, these two statements might have been some cause for concern to this Court in considering the case. However, in view of the total evidence, if they were erroneous at all they were certainly harmless. The Supreme Court of the United States has stated:

In reviewing criminal cases, it is particularly important for appellate courts to relive the whole trial imaginatively and not to extract from episodes in isolation abstract questions of evidence and procedure. Frankfurter, J., concurring in Johnson v. United States, 318 U.S. 189, 202, 63 S.Ct. 549, 555, 87 L.Ed. 704, 714 (1943).

We can hardly concur with the allegation of the Appellant that the prosecutor was guilty of misconduct. In the first place, the answers volunteered by the witness Grief were not responsive to the questions and the prosecutor can hardly be accused of misconduct when a witness makes unresponsive answers of a voluntary nature.

To put this entire matter in proper perspective, an examination of the bill of particulars requested by counsel for the Appellant at the trial level indicates just how careful the prosecutor was. The bill of particulars indicates that in the late afternoon or early evening of May 24, 1975, the Appellant broke into the mobile home, which burglary was the subject of this particular action, and stole a shotgun, a watch, a lunch box, automobile keys, shotgun shells and shotgun slugs. The bill of particulars then sets out that between this incident and five o’clock in the morning the Appellant stole three separate vehicles and sometime between 5:40 a.m. and 5:45 a.m. on May 25, 1977, the witness, Charles Grief, was awakened by hearing voices from the kitchen of his home. He heard his wife scream and simultaneously heard a shot He picked up a pistol and confronted the Appellant, who then fled from the house, Mr. Grief finding his wife’s dead body on the floor of the kitchen where a shotgun had blown off a part of her forearm and left a hole in her chest of such size that the coroner could remove the shotgun wadding by placing his hand into the wound. The bill of particulars further outlines that the Appellant confessed to all these crimes, the burglary, the three car thefts and the murder; that he took the sheriff to the place where he had hidden the gun; that he had the watch on his person, and that the lunch box which was left at the home of Mr. Grief during the murder contained the car keys belonging to the various vehicles and to the persons whose home had been burglarized and further contained his parole papers. Under these circumstances, this Court considers it remarkable that Mr. Grief was able to be even partially objective in testifying in this case and considering the wealth of evidence at the command of the prosecutor, he can hardly be accused of misconduct. The confession was not read, as it contained references to the other crimes; no reference was made to the parole papers of the Appellant which were found in the lunch box. In fact, virtually none of the available evidence was presented to the jury except as it related to the burglary itself. The Appellant herein is not unlike the young man who confessed to killing his mother and father and asked for mercy on the grounds that he was an orphan.

It is probable that all of these indictments could have been consolidated for trial on proper motion, as they represented a series of events which took place in approximately twelve hours or less and were interconnected to the extent that the gun stolen in the burglary was used to murder Mrs. Grief.

The second ground urged for reversal is that under the circumstances of breaking into a temporarily unoccupied dwelling and stealing a gun a conviction of Burglary in the First Degree was not justified. The applicable statute is Ky.Rev.Stat. 511.020 which states as follows:

(1) A person is guilty of burglary in the first degree when he knowingly enters or remains unlawfully in a dwelling with the intent to commit a crime and when:
(a) In effect entry or while in the dwelling or in immediate flight therefrom, he or another participant in the offense:
1. Is armed with explosives or a deadly weapon; or
2. Causes physical injury to any person who is not a participant in the crime; or
3. Uses or threatens the use of a dangerous instrument against some person who is not a participant in the crime; or
(b) The entering or remaining occurs at night.
(2) Burglary in the first degree is a Class B felony. (Emphasis added).

The Appellant makes an excellent argument seeking to differentiate between being “in possession” of a deadly weapon and being “armed” with a deadly weapon, giving us the definition of possession as meaning “to have actual physical possession or otherwise to exercise actual dominion or control,” and armed as being defined as “furnished or equipped with weapons of offense or defense.” It is the opinion of this Court that under the applicable law of this Commonwealth and under the circumstances where it is used statutorily, there is virtually no difference between being in possession of a deadly weapon and being armed with a deadly weapon.

Under Ky.Rev.Stat. 515.020, relating to Robbery in the First Degree, we find the law as follows:

(1) A person is guilty of robbery in the first degree when, in the course of committing theft, he uses or threatens the immediate use of physical force upon another person with intent to accomplish the theft and when he:
(a) Causes physical injury to any person who is not a participant in the crime; or
(b) Is armed with a deadly weapon: or
(c) Uses or threatens the immediate use of a dangerous instrument upon any person who is not a participant in the crime.
(2) Robbery in the first degree is a Class B felony. (Emphasis added).

The case law in Kentucky has never differentiated between these two factors when it relates to the use of a gun in accomplishing an armed robbery. The present law in Kentucky makes a distinction between a deadly weapon and a dangerous instrument. It is armed robbery merely to be armed with a deadly weapon but a dangerous instrument must be used or threatened. This was true under the old statute but the case law clearly made such a distinction. The case of Owens v. Commonwealth, 187 Ky. 207, 218 S.W. 719, 720 (1920) stated as follows:

The established rule on the subject is that where the weapon is of such character as to admit of but one conclusion in that respect, the question whether or not it is deadly ... is one of law; but where the weapon employed is such that its deadly character depends upon the manner and circumstance of its use, the question is one of fact for the jury. See also Napier v. Commonwealth, Ky., 356 S.W.2d 755 (1962); Murphy v. Commonwealth, 255 Ky. 676, 75 S.W.2d 341 (1934). It is best stated in the commentary to the

Kentucky Penal Code where the author states, “If a robber is armed with a ‘deadly weapon,’ i. e., one having no usefulness other than as a weapon, he is a robber in the first degree; if he is armed with a ‘dangerous instrument,’ i. e., an object having legitimate uses, he is a robber in the first degree only if he uses or threatens to use the instrument.”

Certainly a 20-gauge shotgun is one having no usefulness other than as a weapon. Appellant also urges that there was no evidence in the instant case that this gun was, in fact, a deadly weapon and yet complains that any reference may have been inadvertently made to the fact that it was used to murder a victim in a subsequent crime.

It is admitted in Appellant’s brief that the difference between first and second degree burglary and third degree burglary are “aggravating factors that are considered sufficiently indicative of an offender’s potential dangerousness to warrant sanctions greater than those established for burglary in the third degree.” Certainly the possession of a deadly weapon inside a dwelling or any other building during the course of a burglary or while fleeing therefrom is “indicative of . potential dangerousness.”

It should also be noted that this matter was submitted to the jury under instructions covering both First Degree Burglary and Third Degree Burglary and that the Appellant was convicted by the jury of the offense declaring him to be armed with a deadly weapon.

For the reasons above stated, the judgment of the lower court is affirmed.

All concur.


author: LESTER, Judge.

text:
    John H. REISERT and Brian D. Schaefer, Appellants, v. APPLE VALLEY RESORT, INC. and Otto F. Knop, Appellees.
    Court of Appeals of Kentucky.
    May 13, 1977.

      James W. Bryant, Schaefer & Airhart, Louisville, for appellants.
    John P. Rogers, Prank E. Haddad, Jr., Louisville, for appellees.
    Before HOWARD, LESTER and WIL-HOIT, JJ.
   LESTER, Judge.

John H. Reisert and Brian D. Schaefer in their complaint against Apple Valley Resort, Inc. and William P. Clarkson, III, individually alleged that they had contracted with Apple Valley to purchase a condominium, that Clarkson, the President and a director of Apple Valley, in his capacity as agent, represented that the plaintiffs could receive the return of their deposit after inspecting the condominium unit and that after the inspection, the defendants wrongfully, fraudulently and in bad faith refused to return the deposit. The plaintiffs requested the rescission of all transactions between the plaintiffs and the defendants, the refund of all monies paid by plaintiffs to defendants with interest and exemplary damages. Upon defendant’s motion of April 5,1976, the circuit court on April 26th ordered plaintiffs to file a more definite statement by May 19, 1976. On June 21, 1976, the court granted defendant’s motion to dismiss the complaint as to Apple Valley on the ground that plaintiffs had failed to file a more definite statement.

In this appeal, we need only consider the obligation of a party to respond to an order that he file a more definite statement under CR 12.05.

The appellee in its notice and motion, pursuant to CR 12.05, listed the following as defects in the complaint which made it unreasonable to expect it to file a responsive pleading:

1. The plaintiffs alleged that Otto F. Knop is the successor in interest of the defendant corporation, but they did not state what is a successor in interest.
2. The plaintiffs did not specify the agents who made the certain inducements except for William F. Clark-son, III.
3. The plaintiffs failed to file or state with particularity the written representations which caused the inducements.
4. The plaintiffs did not allege who holds their monies, the amount thereof or the terms and conditions of the deposit.
5. The plaintiffs did not file the contract or state with particularity its terms and conditions.
6. Although the plaintiffs alleged that they have performed all conditions of the contract required to be performed by them, they have not filed the contract or stated with particularity its terms and conditions.
7. The plaintiffs have not stated with particularity any of the facts constituting fraud, bad faith or illegality.
8. The plaintiffs have not alleged the terms and conditions of the commitments which the defendants refused to honor.

After a hearing on this motion, which the parties attended, the court ordered appellants to set forth sufficient details in their complaint to elucidate these 8 points by May 19th. The appellants, on April 9,1976, gave notice that they intended to take the depositions of Clarkson and Knop on April 15th. Again, on April 19th, the appellants gave notice that they would take the depositions of Clarkson and Knop on April 19th, but this time they instructed Clarkson and Knop to bring “any and all contracts, memorandums (sic), letters, deposit agreements and any and all other written material relating to the matters alleged in the complaint including, but not limited to, the contracts, representations and agreements referred to therein”. Nothing in the record reflects whether the appellants made any discovery. On May 28th, Apple Valley moved to dismiss. Appellants, on June 7th, pursuant to CR 34.01, requested appellee to produce the contract and on June 11th, pursuant to CR 36.01, requested both appel-lee and Clarkson to admit that Otto F. Knop was the successor to Apple Valley. The court dismissed the complaint on June 21st and on June 23rd, appellants sought relief from the judgment under CR 60.02 on the ground that counsel for appellants did not appear to argue the motion to dismiss because medication caused him to oversleep. The court denied this motion.

The appellants take the position that we should reverse because the court required them to make a more definite statement as to information peculiarly within the appel-lee’s knowledge. Nothing in the record indicates whether the appellants voiced this objection to the court below, but in any event, CR 12.05 justifies the dismissal because the rule clearly demands that the party whom the court orders to make a more definite statement reply to the order.

CR 12.05 permits a party entitled to file a responsive pleading, but who cannot reasonably be required to do so due to the vagueness of the pleading to which he wishes to respond to “move for a more definite statement before interposing his responsive pleading”. The Rule goes on to state that:

(t)he motion shall point out the defects complained of and the details desired. If the motion is granted and the order of the court is not obeyed within 10 days after service of notice of the order or within such time as the court may fix, the court may strike the pleading to which the motion was directed or make such order as it deems just.

The Rule functions only to enable a party to determine the nature of the claim or defense and should not be used, as the appellants correctly maintain, to compel the disclosure of matters within the knowledge of the moving party. Great Atlantic & Pacific Tea Co. v. Smith, 281 Ky. 583, 136 S.W.2d 759 (1940) Clay, Ky. Prac., 3rd Ed. Civil Rule 12.05 at 214 (1974). However, a party waives his objection of surprise to evidence developed during trial and authorized by the pleading, but which he may not have anticipated due to the vagueness of the pleading, if he did not move for a more definite statement. Higgins Investments, Inc. v. Sturgill, Ky., 509 S.W.2d 266 (1974); Rucker v. Rainwater, Ky., 449 S.W.2d 753 (1970); Scott v. Farmers State Bank, Ky., 410 S.W.2d 717 (1967). Although a complaint clearly states a cause of action, the trial court in ruling on a CR 12.05 motion has to decide whether the defendant has been supplied with enough information to set up all his defenses and prepare for trial in an orderly fashion. As pointed out in Alvey v. Kern, Ky., 354 S.W.2d 516, 517 (1962), the construction of the rule to accomplish substantial justice “rests largely in the discretion of the trial court”. Consequently, when the court grants such a motion, the party opposed to the motion does not fulfill his responsibility to the trial court by simply ignoring its order.

In complying with the Rule, appellee set out eight purported defects. The court in granting appellee’s motion in effect agreed as to the vagueness of appellants’ complaint in these respects. The court gave appellants a period of time to fill in these gaps. Not only did the appellants not file a more definite statement, they did not explain to the court why as to each of the eight factors they could not supply more details. The Rule provides that if “the order of court is not obeyed . . . within such time as the court may fix, the court may strike the pleading to which the motion was directed or make such other order as it deems just.” Ordinarily, the dismissal of the complaint would seem to be a harsh result, but in view of the utter neglect of appellants in this case to make any sort of response to the court’s order, we do not feel that the court below abused its discretion.

The judgment is affirmed.

All concur.


text:
    LOUISVILLE AND NASHVILLE RAILROAD COMPANY, Appellant, v. DEPARTMENT OF REVENUE, Commonwealth of Kentucky, and the Kentucky Board of Tax Appeals, Appellees.
    Court of Appeals of Kentucky.
    May 13, 1977.
    Marion Rider, Frankfort, Robert C. Moore, Louisville, for appellant.
    William P. Sturm, Atty., Legal Staff, Dept, of Revenue, Frankfort, for appellees.
    Before COOPER, HOGGE and REYNOLDS, JJ.
   COOPER, Judge.

Appellant filed with the Department of Revenue a claim for refund of sales and use taxes paid by it for the period from July 1, 1960, through September 30, 1964, the amount of which was ultimately established to be $99,388.83.

Appellant, Louisville and Nashville Railroad Company, a Kentucky corporation, operates an interstate railroad system traversing thirteen states through nine operating divisions. Each operating division extends into more than one state. Six of these operating divisions have trackage in Kentucky.

During the period in question, Appellant purchased certain roadway machinery and equipment, including repair and replacement parts, from manufacturers outside Kentucky for use in its system-wide maintenance of way operations. After purchase, some of this machinery and equipment was brought to Louisville, Kentucky, for inspection and application of maintenance of way equipment numbers. The machinery and equipment then continued without being unloaded to a designated division for unloading and use. Other machinery was shipped by the manufacturer direct to the designated division location. No record was maintained as to the place of initial or subsequent use of such equipment other than the division within which it was being used at a given time.

The Department of Revenue determined the percentage of such equipment to be subject to the Kentucky Sales and Use taxation by a formula using the percentage of total system operating expenses of the Appellant applicable to Kentucky. The Department of Revenue used the same percentage formula in determining the amount of repair and replacement parts to be allocated to Kentucky for determining the tax. involved.

The repair or replacement parts are installed on such equipment at Appellant’s repair shops located in Louisville and Paris, Kentucky, and Boyles, Alabama. Eighty-seven percent (87%) of the equipment repaired in Kentucky is shipped outside of the state after such repairs have been completed.

It is Appellant’s position that the roadway machinery and equipment, as well as repair and replacement parts, are not taxable because such property was used in the furtherance of interstate commerce, and that the tax would place undue burden upon such commerce. It further urges that such machinery and equipment was exempt as rolling stock under KRS 139.480(1). The Department of Revenue contended that such machinery and parts were taxable under KRS 139.320, which imposes a use tax upon machinery and equipment brought into this State for construction or repair of steam or electric railway systems.

The issues considered are (1) whether certain roadway machinery and equipment, including their repair and replacement parts, purchased by Appellant outside the Commonwealth of Kentucky for use in maintaining its multi-state railroad right-of-way are exempt from Kentucky use taxation by virtue of the fact that (a) under KRS 139.-480(1) such equipment constitutes “rolling stock, including materials for the construction, repair, or modification thereof . used or to be used in interstate commerce”, or (b) that the taxation of such equipment violates Article 1, Section 8 of the Federal Constitution as an impermissible burden on interstate commerce.

The controversy is limited as to whether or not L & N’s roadway machinery and equipment plus repair and replacement parts for that equipment are exempt from taxation on the basis the assessment levied here (1) is a burden on interstate commerce and (2) violates KRS 139.480(1).

The Kentucky Board of Tax Appeals by order No. K-1631, dated May 8, 1969, held that, under the facts presented, the language used in KRS 139.480(1) was not broad enough to justify its application to the machinery and equipment, or repair and replacement parts for such machinery, used by L & N to repair and maintain its multi-state track and right-of-way. The Board further found that the taxation of such items of equipment presents no undue burden upon interstate commerce, even though it may affect to some degree the cost of conducting such business.

The Board also found that materials withdrawn by the Appellant from its stores at the South Louisville shops for the construction, repair or modification of its locomotives and rolling stock, and electricity, coal and water used in general shop operations were not exempt from Kentucky use taxation under KRS 139.480(1).

By order entered on July 6, 1976, in Civil Action No. 76438, the Franklin Circuit Court sustained that portion of the Order of the Board of Tax Appeals which upheld the taxation of Appellant’s roadway machinery and equipment including repair and replacement parts. The lower Court remanded to the Board of Tax Appeals the remaining issues in order that the Board might make written findings as required by KRS 131.160.

Much has been said by both parties concerning “rolling stock” including materials used, or to be used, in interstate commerce.

All words and phrases in a statute shall be construed according to the common and approved usage of language such as found in a common dictionary. KRS 446.080(4). Black’s Law Dictionary defines “rolling stock” as the portable or movable apparatus and machinery of a railroad, particularly such as moves on the road, VIZ., engines, cars, tenders, coaches and trucks.

The ordinary, everyday meaning of “rolling stock” does not encompass the Appellant’s roadway machinery equipment and materials used for maintenance, but applies to locomotives, flat cars, box cars, coaches, cabooses and coal cars.

We take the position that the term “materials” as used in KRS 139.480(1) includes only those items which become a component part of the locomotive or rolling stock being constructed, repaired or modified.

KRS 139.480(1) also requires “rolling stock” to be used in “interstate commerce”.

In 68 Am.Jur.2d, Sales and Use Taxes § 190 (1973), the following statement is made in reference to sales and use taxes:

Unlike the situation existing with respect to sales tax statutes, the decisions relating to use tax statutes have for the most part been consistent in holding that, in their application to tangible personal property carried into the state and there brought to rest permanently, or merely halted for a moment before resuming its interstate course or character, taxes upon the privilege of use, storage, or consumption within the state do not impose an unconstitutional burden on interstate operations or instrumentalities.

The landmark United States Supreme Court decision in Southern Pacific Company v. Gallagher, 306 U.S. 167, 59 S.Ct. 389, 83 L.Ed. 586 (1939) holds precisely this. The facts in Southern Pacific as stated by the Court through Justice Reed at 306 U.S. 172, 59 S.Ct. 391, 83 L.Ed. 590 were as follows:

The Appellant, the Southern Pacific Company, a Kentucky corporation, handles intrastate, interstate and foreign commerce over its railroad system which traverses a number of states and connects with the lines of carriers covering the continent. The findings and stipulation of facts show continual extrastate purchases of tangible personalty for the operation of the road; rails, equipment machinery, tools and office supplies. Some of the purchases are used in the general offices of the Corporation, located in California, for the supervision of the wide-flung activities; others are for material kept in readiness as a stand-by supply to replace or repair equipment damaged, destroyed or worn out in the operation of the road; and still others are to make improvements, replacements or extensions pursuant to previously determined plans and specifications. Few, if any, of the supplies are stored for long term needs. Storage is merely incidental to protection until use, as office supplies in a closet or an extra frog at a section tool house. For construction or reconstruction upon a large scale, special orders are given and arrangements made, so that the material is fabricated for a particular use in the transportation facilities, shipped to its California destination and installed upon arrival. To avoid delay and cost the movement from loading to final placement is as nearly continuous as managerial efficiency can contrive. While some articles are capable of general use, the major purchases of rails, repair parts and supplies for the maintenance and operation of the system are adapted only to railroad use. The purchases are paid for out of railroad operating capital and move on company material waybills, without transportation charge. All purchases may be said to be dedicated to consumption in the interstate transportation business of appellant. No new rolling stock is involved. Subsequent to repairing and reconditioning, rolling stock moves again in interstate transportation, as do cars after being stocked with supplies. The California tax on storage or use, it is said, cannot apply to these articles, as such a tax would be an unconstitutional burden upon the facilities of interstate commerce, of which the articles are a part.

In holding that the rails, equipment, machinery and tools were subject to California’s use tax, the Court at 306 U.S. 176, 59 S.Ct. 393, 83 L.Ed. 593 stated:

In the present case some of the articles were ordered out of the state under specification suitable only for utilization in the transportation facilities and installed immediately on arrival at the California destination. If articles so handled are deemed to have reached the end of their interstate transit upon “use or storage”, no further inquiry is necessary as to the rest of the articles which are subjected to a retention, by comparison, farther removed from interstate commerce. We think there was a taxable moment when the former had reached the end of their interstate transportation and had not begun to be consumed in interstate operation. At that moment, the tax on storage and use — retention and exercise of a right of ownership, respectively — was effective. The interstate movement was complete. The interstate consumption had not begun.

The roadway machinery and materials not exempt had a “taxable moment” in Kentucky. It will be noted that approximately thirty-five percent (35%) of the total was taxed in Kentucky, and in the absence of records no counter formula for taxation was offered by the Appellant.

If the findings of a state administrative agency are supported by substantial evidence it should not be disturbed.

We have examined the record in this case, and have determined that the assessment levied is not a burden on interstate commerce and does not violate KRS 139.480(1).

The judgment is affirmed.

All concur.


text:
    M. J. ALLGIER, d/b/a Berry Soap and Chemical Company, Appellant, v. Leonard BRUSH and Woodenware Company and Walter T. Adams, Appellees.
    Court of Appeals of Kentucky.
    May 13, 1977.

      Henry J. Burt, Jr., Louisville, for appellant.
    Adrian F. O’Bryan, Stanley R. Badesch, Louisville, for appellees.
    Before HOWARD, LESTER and WIL-HOIT, JJ.
   LESTER, Judge.

This appeal arises out of a suit by appellant for breach of contract to purchase a business, in which the circuit court determined that the appellee, Leonard Brush and Woodenware Company, through its president, Walter T. Adams, had completed its acquisition of Berry Soap and Chemical Company from appellant, M. J. Allgier, without any further obligation. For the sake of convenience, we shall refer to the business entities as Berry Soap and Leonard Brush.

In early 1968, appellant, Allgier, learned that the Department of Highways, Commonwealth of Kentucky, was acquiring rights of way for the interstate system which would involve his premises which factor, together with his age and desire to retire, caused him to search for a purchaser of his business only and he eventually found Leonard Brush. Allgier represented Berry Soap to be a profitable venture earning net profits of between $15,000.00 and $20,000.00 in previous years while for the immediate past twelve month period, the net had been but $10,000.00 because of a drop in the price of grease. Without any further investigation, Adams accepted Allgier’s representations as to the condition of the company and proceeded to personally draft a contract to purchase which will be designated as the May, 1968, contract. Leonard Brush would not pay appellant a sum certain for his business but rather elected to continue marketing Berry Soap products and to pay the seller 50% of the gross profit for a period of seven years plus an annual $1,500.00 consultant’s fee and $600.00 per year as travel, entertainment and auto expenses. There is nothing to indicate if Allgier was to perform any services for Leonard Brush such as servicing his former accounts nor what his duties might have been as a consultant. There were other provisions of the contract which are of little import to this appeal.

In June of 1968, Allgier commenced moving Berry Soap into a new Leonard Brush building and during the course of the operation, Adams discovered a paper reflecting that Berry Soap had sustained a loss of $1,963.13 during the first four months of 1968 contrary to appellant's statement that his business had been “very profitable.” It also developed that Berry Soap had sustained a net loss during the 1967 business year. Adams notified Allgier by telegram dated June 17, 1968, that the contract was cancelled because of “fraud, misrepresentation and deceitful actions.” The court below determined that Allgier apparently acquiesced in the rescission because he testified that the parties worked without a written contract for about a month coupled with the fact that appellant consulted his lawyer about drafting a new similar document. On the other hand, Allgier argues to this Court that he did not so acquiesce because he contended with Adams that they had a contract and that Leonard Brush was going to live up to it.

Between June 19, 1968 and July 2, 1968, Allgier executed several documents which appellees set out in the exhibit section of their brief and numbered five, six and seven which indicate that the parties continued to do business.

The plaintiff below based his original complaint upon an alleged agreement of July 18, 1968, whereby Leonard Brush would purchase Berry Soap for the sum of $30,000.00 provided that within seven years that sum could be paid out of 50% of the gross profits of Berry products and Leonard Brush products sold to Allgier’s customers. At the conclusion of the seven year period, if the $30,000.00 had not been realized under the gross profits formula, then Allgier would cancel any balance thereof in consideration of the payment of one dollar. In addition, appellant was to continue as an employee-consultant and out of his 50% of the gross profits, he was to receive $125.00 per month as a consultant’s fee and $50.00 for each similar time period for entertainment, travel and automobile expenses. As in the former contract, there is nothing specific contained in the second document to indicate what particular duties Allgier was to perform, if any. There are other provisions of the July agreement but we do not consider it necessary to this decision to recite them herein.

The second agreement was professionally drafted with provision at the end for signatures but it never was formally executed by the parties. Attached to the complaint as an exhibit was a document bearing the following language:

The foregoing agreement is acceptable to the Leonard Brush Company provided no change is made whatever in wording or punctuation that would Alter agreement in anyway whatever.
Dated 7-18-68 (s) W. Adams
Agreement accepted as it is written on 7-18-68.
By (s) M. J. Allgier

On September 13, 1968, appellant signed the following paper which we will hereafter refer to as the partial release:

(LETTERHEAD OF LEONARD BRUSH & WOODENWARE CO.)
September 13, 1968
In accepting this check # 8401 in the amount of $979.76, I hereby release the Leonard Brush Company of all obligations to me or my estate.
Leonard’s obligation to me in the future will be ½ of the Gross Profits after 9-1-68 as described in the original contract but ½ of Gross Profit after 9-1-68 will be on sales to Berry Soap customers only.
Leonard further agrees to notify me of any order to Berry Soap customers that it does not intend to fill.
(s) M. J. Allgier

From June, 1968, until June 2, 1972, the parties worked under what they believed to be a binding contract but on the last mentioned date, appellees notified appellant that the agreement was cancelled and All-gier commenced this litigation against Leonard Brush and Adams, individually.

With relation to the contract of May, 1968, we are of the opinion that where a party is induced to enter into a transaction with another party that he was under no duty to enter into by means of the latter’s fraud or material representation, the transaction is voidable as against the latter. Restatement of Contracts § 476 (1932); 17 Am.Jur.2d Contracts § 151; and Central States Fire Insurance Company of Wichita, Kansas v. Holland, 219 Ky. 727, 294 S.W. 489 (1927). However, the party must have been injured by the fraud or misrepresentation. Kentucky & West Virginia Power Co., v. Gilliam, 210 Ky. 820, 276 S.W. 983 (1925). There is nothing in the record to indicate that appellees were damaged or injured in any manner by Allgier’s misrepresentations especially when we recall that not even two full months expired between the date of the contract and the purported rescission.

When the record is considered as a whole, there is established a definite pattern with little deviation from the basics of the transaction. There is a sale of a business for an indefinite purchase price having a limitation of $30,000.00. The method of payment is 50% of the gross profits from the merchandising of specified products which did vary in July, 1968, with the addition of 50% of the gross profit of Leonard Brush items sold to appellant’s customers. During the entire period involved, Allgier was to receive $1,500.00 per year as a consultant’s fee and $600.00 annually for related expenses. The formula for determining the 50% gross profit was altered slightly between the first contract, the second agreement and the termination of the association but nevertheless, the basic premise of 50% remained. At no point was the sale of Berry Soap to appellees ever set aside or any assets thereof returned to Allgier. Leonard Brush manifested an intention to do so but it, in fact, never did and, if anything, forged ahead with the entire transaction. Appellees might have intended a rescission of the original agreement but their actions were indicative of continuing with the transaction and we believe the principles of Hampton v. Suter, Ky., 330 S.W.2d 402 (1959) enunciated by Commissioner Stanley govern here. He wrote:

(W)e believe Hampton was deceived as to the profits made in the previous year, but believe he had ample opportunity to learn from the books what the profits were; and not long afterward he did definitely learn the real fact. He was then put upon an election to abide by the contract and condone the deceit or to act with reasonable promptness to repudiate and seek to rescind the trade. But he retained and operated the business for some time after he learned or had ample opportunity to learn the true state of facts. Hampton is chargeable with having made an election to abide by the contract, so far as concerns that misrepresentation. Having once determined such an election, he could not thereafter be relieved of the obligations placed upon him by the terms of the contract, although such an election does not ordinarily deprive one of a right to claim damages. Dunn v. Tate, Ky., 268 S.W.2d 925.

•Having resolved that there was no voidance of the May contract and that during the course of the dealings of the parties mutual modification thereto was made resulting in an uninterrupted transaction and relationship extending from 1968 to mid 1972, we conclude that a determination of the validity of the July agreement is unnecessary. The position that we are dealing with one transaction is fortified by the language of the second document coupled with the actions of the parties in that there is a sale followed by a consideration which extended over a period of four years.

Leonard Brush only continued its relationship with Allgier so that it could acquire Berry Soap by a means other than paying a set purchase price. Under these circumstances, we find it appropriate to consider all the instruments in the construction of this contract. 17 Am.Jur.2d Contracts § 264, at 668-669 (1964) Breckinridge County v. Beard, 233 Ky. 823, 27 S.W.2d 427 (1930). Furthermore, regardless of whether the July contract formed a binding agreement on its own, its terms retained the basic form of the May contract although they served to place Allgier on a better footing. Therefore, the September partial release becomes highly significant because in it Allgier releases Leonard Brush from all obligations to him or his estate except that after 9-1-68, appellant would receive one-half of the gross profits on the sales to Berry Soap customers only. This partial release delineates the performance that Leonard Brush owed Allgier because of “the elementary general principle that either party to a contract may waive any of the provisions made for his benefit.” 17 Am.Jur.2d Contracts § 390, at 835 (1964). Since that partial release referred specifically to the May contract clearly Leonard Brush’s duty to perform accordingly extended for the period set out in the May contract. Torian v. Hibbs’ Ex’x, 196 Ky. 784, 245 S.W. 502 (1922). We hold then that appellant does have a cause of action for those gross profits which he can show owed him under the partial release up until June 1, 1975.

We reverse the judgment below and remand the case for further proceedings consistent with this opinion.

All concur.


author: HOWARD, Judge.

text:
    John TURNER and Ruby Carol Butcher, Appellants, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    May 13, 1977.
    Lowell E. Spencer, Prestonsburg, for appellants.
    Robert F. Stephens, Atty. Gen., B. F. Radmacher, III, Asst. Atty. Gen., Frankfort, for appellee.
    Before HOWARD, LESTER, and PARK, JJ.
   HOWARD, Judge.

The appellants were jointly indicted July 8, 1975, by the Floyd County grand jury under Indictment No. 4253 charging a violation Ky.Rev.Stat. Ch. 242.230 and more specifically stated: “possession of alcoholic beverages for purposes of sale in local option territory”. The appellants were found guilty by the jury on May 3, 1976, and their punishment was fixed at sixty (60) days in the county jail and a $100.00 fine.

The principal witness for the Commonwealth was Sheriff Joe Wheeler Lewis who testified that on July 8, 1975, he had in his possession a search warrant directing him to search the premises known as “Butcher’s Market” and any vehicles found at that location in Floyd County. Sheriff Lewis, along with two deputies, proceeded to the location of Butcher’s Market passing a car owned by the appellant, John Turner. Sheriff Lewis followed the car to the location of Butcher’s Market and he observed Mr. Turner placing a case of beer on the ground and at the same time the Sheriff observed a white male of approximately 22 or 23 years of age with monies in his hand talking to John Turner. Sheriff Lewis then placed the appellant, John Turner, under arrest and proceeded into the market from which he had heard some noise. Upon entering the market, he observed the appellant, Ruby Carol Butcher, behind the counter breaking open two (2) fifths (5ths) of Maker’s Mark liquor. The seals on the bottles were unbroken. Later on the Sheriff found a cooler behind the building with twenty-one (21) cans of beer in it. The appellants lived on the searched premises.

All parties concede that John Turner was drunk on this occasion and that the breathalizer test ran .22 and he paid a fine for the offense of drunken driving. The defense in the case rested upon the contentions of the appellants that all of this alcohol was the private property of John Turner and was not in their possession for the purpose of sale. The testimony of the deputies supported the testimony of the Sheriff in most respects and coupling this testimony with that indicating that the appellants were known “bootleggers”, we conclude there was sufficient evidence to go to the jury and to sustain its verdict.

Next the appellants complain of the comments of the Commonwealth Attorney in regard to an affidavit submitted by the appellants, and sworn to by John Turner relative to the evidence that a couple of witnesses would testify to if they were present. The Commonwealth Attorney rebutted his testimony and commented in front of the jury to the effect that while it was agreed that the parties would testify as set out in the affidavit, if they were present, the Commonwealth did not concede that the statement was the truth. The appellants cite no authority which would indicate that this procedure was improper and prejudicial.

The appellants rightfully complain of the introduction of the search warrant and the affidavit for the search warrant. There was information written on the warrant by the Sheriff as to Turner’s other offenses committed at the time. In the affidavit which was read to the jury the following appears:

On Monday, July 7,1975, at approximately ten O’Cloek P.M., he was informed by a male person that on July 3, 1975, at approximately five O’Clock P.M., he purchased from John Turner at Butcher’s Market near the Jenny Wiley Dam, Floyd County, Kentucky one case of twelve ounces Schlitz Beer for which he paid said John Turner twelve dollars. I have known the informer for sometime and have received reliable information from the same person on several occasions before this date. I refuse to name the informer for fear of his future use, safety, and welfare.

This was Commonwealth’s Exhibit # 1 and was signed by the Sheriff. This Court feels that the introduction of this search warrant and affidavit over the objections of the defendants-appellants was so prejudicial that we are compelled to reverse this case for a new trial. The manner in which this warrant and affidavit was brought before the jury amounts to permitting the jury to consider hearsay evidence involving incompetent and prejudicial matters. In Vanmeter v. Commonwealth, 232 Ky. 404, 23 S.W.2d 594 (1930), a similar set of facts to this case was involved and the court had this to say about the introduction of the search warrant:

But it is insisted that the affidavit made for the purpose of procuring the search warrant stated that the defendant possessed intoxicating liquor, and which affidavit was introduced at the trial over the objections and exceptions of defendant. It requires no argument to show that the affidavit made to procure the search warrant was and is wholly incompetent to prove the guilt of the defendant on his trial of an indictment procured upon the evidence found by the officers who executed the warrant. The affidavit in this case was relevant only for the purpose of establishing the validity of the search warrant, a preliminary question to the admission of discoveries of the officers who executed it. On the issue of any fact to establish defendant’s guilt, it was and is the rankest hearsay, and violates defendant’s constitutional right to be confronted face to face with the witnesses against him, and the court erred in admitting the affidavit as evidence to prove defendant’s guilt on the trial of the indictment against him.

Furthermore, we have a constitutional question here and the error in admitting this evidence was not harmless beyond a reasonable doubt. Henry v. Commonwealth, Ky., 316 S.W.2d 864 (1958).

Further complaint was made by the appellants to the introduction in the evidence of other offenses committed by the defendants-appellants. We think that on the retrial of this case that the Commonwealth’s attorney should refrain from attempting to introduce evidence of other offenses. Since we are reversing on another ground we will not discuss these points further.

One other question in this case concerns the seizure of the 1974 Pontiac vehicle that was owned and operated by the appellant, John Turner. There is no order in the record indicating that this automobile was ordered to be sold or that the bond executed by the appellants be forfeited. Therefore, there does not appear to be any appealable order in regard to the 1974 Pontiac automobile.

The judgment of the trial court is reversed for a new trial as to both defendants.

All concur.


author: HOGGE, Judge.

text:
    Woody BRUNDIGE, Appellant, v. The SHERWIN-WILLIAMS COMPANY and the Continental Insurance Company, Appellees.
    Court of Appeals of Kentucky.
    May 13, 1977.

      Hal Warren, Warren & Warren, Fulton, for appellant.
    Thomas A. Nanney, Miller & Nanney, Fulton, for appellee.
    Before HOGGE, WINTERSHEIMER and VANCE, JJ.
   HOGGE, Judge.

This appeal arises from an action for damages allegedly resulting when appellee wrongfully enjoined appellant from operating his retail paint business. Upon motion, the Circuit Court granted summary judgment and entered an order dismissing the action.

Appellant was employed by appellee for approximately 10 years and was party to an agreement whereby he agreed not to open a competing business within 30 miles of Fulton, Kentucky for a period of one year following the termination of his employment with appellee. In June or July of 1975 Sherwin-Williams relocated their place of business to another site in Fulton. Soon thereafter appellant rented the old place of business of Sherwin-Williams and, in August, quit his employment with that company to open a business selling paint and related items at the old location. On October 16 Sherwin-Williams obtained a temporary restraining order preventing appellant from opening his paint store. On October 30 a hearing was held and the Circuit Court denied appellee’s motion for a temporary injunction and ordered that the temporary restraining order be dissolved.

At that time, the Circuit Court found that appellee had failed to demonstrate that it would suffer such immediate and irreparable injury as would justify extraordinary relief, and suggested that the appropriate remedy would be an action on the contract. Appellant thereafter brought this action to recover on the injunction bond, posted by appellees, for damages suffered as a result of his being wrongfully prohibited from opening his business while the temporary restraining order was in effect, including lost profits and attorney’s fees. Upon ap-pellees’ motion, a summary judgment was granted upon the grounds that lost profits are, as a matter of law, too speculative to properly be the subject of damages where a new business is involved.

Appellant claims that, if there was any uncertainty involved, it related to the amount of loss, not whether any loss was sustained. Appellees rely on the case of Holliday v. Sphar, 274 Ky. 556, 119 S.W.2d 656 (1938); wherein the court repeated the general rule that, if the business is not an established one, the anticipated profits are too remote and speculative to properly be the subject of damages.

However, the business involved in the Holliday case, supra, was a gasoline station in a time and place when the profits to be anticipated from such a business were truly speculative. The rule set forth in the Holli-day, supra, case was quoted from an early Virginia case, Whitehead v. Gape Henry Syndicate, 111 Va. 193, 68 S.E. 263 (1910), involving a fishing operation which, by its very nature, is speculative. Furthermore, the court in Holliday found that the plaintiff in that ease never had any previous experience in the business he proposed to conduct, and that he did not have any reasonable hope of making a profit.

A more detailed explanation of the rule is set forth in 22 Am.Jur.2d Damages § 173, at 245, n. 16, wherein it is stated:

Profits are denied in the case of a new business, because they fail to meet the test of certainty. If, in the particular case, it is possible to show, by competent evidence and with reasonable certainty, that profits would have been made and the amount of those profits, they can be recovered.

It may be significant that our research does not disclose that the Holliday opinion has ever been followed or even cited by our Court during the 29 years since it was written.

In the cases where the issue of lost profits has arisen, our Court has followed a more flexible standard. In two post Holli-day decisions the Court has held that lost profits may, not must, be determined on the basis of past experience. Time Finance Company, Inc., v. Beckman, Ky., 295 S.W.2d 346 (1956); Eastern Kentucky Lumber & Development Company v. Waddell, Ky., 239 S.W.2d 68 (1951).

Prior to the Holliday decision, the rule in Kentucky was that recovery for lost profits was governed by the same standards as other damages; if there was any evidence, the question was for the jury. Caudill v. John P. Gorman Coal Company, 242 Ky. 294, 46 S.W.2d 93 (1932); Union Cotton Company v. Bondurant, 188 Ky. 319, 222 S.W. 66 (1920).

In the Union Cotton Company case, supra, as well as Avondale Heights Company v. Proctor, 224 Ky. 188, 5 S.W.2d 1054 (1928), the court allowed awards for lost profits despite the fact that the enterprises injured were in no way established businesses.

In the much more recent case of Kellerman v. Dedman, Ky., 411 S.W.2d 315 (1967), the Kentucky Court of Appeals once again allowed an award of lost profits to an enterprise that was in no way an established business. In that case the “business” was an auction of farm property. The plaintiffs were not auctioneers, but were engaged in the business of farming rather than in the business of selling farm machinery. The Court, nevertheless, upheld an award for lost profits where one partner in the farm had discouraged bidding. In that case, the Court, quoting from Essock v. Mawhinney, 3 Wis.2d 258, 88 N.W.2d 659 (1958), stated at page 317:

‘ * * * it is now generally held that the uncertainty which prevents a recovery is uncertainty as to the fact of damage and not as to its amount and that where it is certain that damage has resulted, mere uncertainty as to the amount will not preclude the right of recovery * * ‘The requirement of certainty does not prevent the drawing of reasonable inferences from the facts and circumstances in evidence; and where a tort is of such a nature as to preclude the ascertainment of the amount of damages with certainty, it is enough if the evidence shows the extent of the damages as a matter of just and reasonable inference, although the result is only approximate.’

In Flame Coal Company v. United Mine Workers, 303 F.2d 39 (6th Cir. 1962), the federal Court, quoting from Story Parchment Company v. Paterson Parchment Paper Company, 282 U.S. 555, 562-563, 51 S.Ct. 248, 250, 75 L.Ed. 544, 548 (1931), stated:

Where the tort itself is of such a nature as to preclude the ascertainment of the amount of damages with certainty, it would be a perversion of fundamental principles of justice to deny all relief to the injured person, and thereby relieve the wrongdoer from making any amend for his acts. In such case, while the damages may not be determined by mere speculation or guess, it will be enough if the evidence show the extent of damages as a matter of just and reasonable inference, although the result be only approximate.

The Court in the Flame Coal case, supra, cited the Eastern Kentucky Lumber, the Union Cotton, and the Time Finance cases, supra, and stated that Kentucky law was not inconsistent with the above statement.

Thus, while the Holliday decision has never been overruled, neither has it been followed. Decisions, both before and after the Holliday case, indicate that Kentucky does not adhere to the rigid rule set forth in that case, at least in situations where the tort itself has made it impossible to determine the exact amount of damages with certainty-

In the case of Smith v. Onyx Oil & Chemical Company, 218 F.2d 104, (3rd Cir. 1955) the Court was faced with a claim for lost profits where a breach of contract had resulted in the loss of sales of an undeveloped product. The court in that case, citing the great enthusiasm on the part of the plaintiff, and the efficiency of the product, stated at page 111: “We do not think this is a case where it can be said that there would have been no profit to Smith had the contract been performed. We think there would have been some profit. As to the amount, we do not see that our estimate can be any better than that of the trial judge ...”

In the case before us, unlike the Holliday case, the appellant had substantial experience in the retail paint sales business; he undoubtedly had a reputation in the community as a man of experience; his place of business was the same building where a business like his had been located for some time; he did open his business almost immediately after the injunction was dissolved; and he made a profit his first month and every month thereafter for the first six months he was in business. Accordingly, we are of the opinion that the Holliday case is not controlling.

As in the Smith case, supra, we do not think this is a case where it can be said that there would have been no profit. We think the facts and circumstances give rise to a reasonable inference that there would have been some profit. Furthermore, it cannot be denied that it was the act of the appellee that prevents an exact determination of the profits lost by the appellant. We are, therefore, constrained by the weight of case law to reverse the judgment of the Fulton Circuit Court.

Appellant also alleges that it was error for the Circuit Court to grant summary judgment when the issue of whether appellee should be liable for the attorney fees incurred by appellant was yet to be determined. The trial court held that, in actions of this type, attorney fees are not recoverable as a matter of law. With this conclusion, we agree. Kentucky law on this issue is quite clear. Attorney’s fees are not recoverable in an action on an injunction bond where injunctive relief was the only relief sought. Grant County Board of Education v. Baston et al., Ky., 251 S.W.2d 880 (1952).

Affirmed in part; reversed in part.

This case is remanded to the Fulton Circuit Court for further proceedings consistent with this opinion.

All concur.