author: NYE, Chief Justice.

text:
    CITY OF CORPUS CHRISTI, Appellant, v. CORPUS CHRISTI POLICE OFFICERS ASSOCIATION and Norman D. Perry d/b/a Par Productions, Appellees.
    No. 1216.
    Court of Civil Appeals of Texas, Corpus Christi.
    Oct. 20, 1977.
    Rehearing Denied Nov. 10, 1977.

      J. Bruce Aycock, City Atty., Corpus Christi, for appellant.
    Bob Spann, Spann, Perry & Smith, Corpus Christi, for appellees.
   OPINION

NYE, Chief Justice.

The City of Corpus Christi appeals from a temporary injunction enjoining the city from enforcing its solicitations ordinance against the appellees. The City contends that the trial court’s ruling adjudicated the ultimate issue of the applicability of the solicitations ordinance to the Police Officers Association’s fund raising activity when it denied the City’s suit to require compliance with the ordinance. We do not agree that the trial court decided the issue on the merits. Rather, we affirm the judgment which maintained the status quo between the parties, leaving the ultimate issues for a trial on the merits.

The solicitations ordinance of the City of Corpus Christi and the procedures by which it is administered seek to regulate fund raising activities for charity or charitable groups in order to protect both the donating public and the recipient charitable organizations from channelling purportedly charitable donations into excessive promotional costs. A limitation of 20% of gross receipts is the presumed limit for reasonable costs of solicitation or promotion of a fund raising activity, subject to variation by the city’s Solicitations Commission upon showing that higher expenses are reasonable. Corpus Christi Code, Sec. 38-25(7).

The Police Officers Association is a nonprofit corporation composed of Corpus Christi police officers. The Articles of Incorporation adopted in 1955 define the purposes for which it was created:

The purposes for which the corporation is formed are the support of benevolent, charitable, educational or missionary undertakings, and in particular, the promotion and development of a friendly and fraternal spirit among all of the employees of the Police Department of the City of Corpus Christi, the advancement of their mutual interests, the provision for both moral and material aid to its members, the encouragement of athletics and social activities, and the increase generally of the efficiency of the individual members of the Department as public servants.

The types of activities which could be included in the organization’s list of purposes could not have included collective bargaining when the articles were adopted, but in 1973 the legislature granted cities having police and/or fire departments the right to adopt the provisions of Art. 5154c-l, Tex. Rev.Civ.Stat. (1973), which permits collective bargaining by these groups. On December 31, 1975, the Police Officers Association and the City of Corpus Christi entered into their first contract pursuant to the city’s adoption of the provisions of Art. 5154c-l, with the Police Officers Association acting as the bargaining unit. The Association therefore embraces a variety of activities, including charitable, fraternal, and collective bargaining.

Periodic fund raising projects are sponsored by the Association. The record shows the Association for the past two years has sought and received a permit from the city’s Solicitations Commission for the right to sell tickets to a dance, the proceeds of which were to be used for charitable purposes. In 1977 the application for a permit to sponsor a country-western show was presented, but the Solicitations Commission considered the contract between the Association and professional promoter Norman Perry d/b/a PAR Productions to be in violation of the solicitations ordinance regarding promotional costs, and requested a new contract to be drawn in conformance with the ordinance. An initial determination was made by the Solicitations Commission that a maximum of 25% of gross receipts could be paid in promotional costs.

The contract with PAR Productions provided for payment of promotional costs, then a division of profits as follows: (1) 10% to the Combined Law Enforcement Associations of Texas (CLEAT), (2) the next $5,000 to the Police Officers Association, (3) the next $5,000 to PAR Productions, and (4) an equal division of any remaining profits between the Association and PAR Productions. Rather than renegotiating the contract with PAR Productions on different terms as requested by the Solicitations Commission, the Association decided it was not subject to the ordinance because it was not soliciting gifts, nor was it raising money in the name of charity. It withdrew the application and, without a permit, it continued to sell tickets to the country-western show through the professional promoter pursuant to their original contract.

Early promotional efforts included requests for donations and listed charitable interests of the Association as potential recipients of the profits from ticket sales. This practice was stopped by the Association two weeks prior to the temporary injunction hearing. Telephone salespersons and advertisements were limited to stating that the funds would be used for the Police Officers Associations’ “general operating fund.” The Association contends that use of the term “general operating fund” adequately informed the public that net proceeds from ticket sales would be used to support its overall program, and not specifically directed to charitable interests outside the Association.

Both the Police Officers Association and the City filed suit. The City sought to temporarily restrain and enjoin the Association from further selling tickets without a permit, and to account and reimburse all funds collected without the permit. The Association sought a declaratory judgment to the effect that the solicitations ordinance is inapplicable and for an injunction to prevent the City from interfering with the sale of tickets or interfering with the performance of the country-western show. Both suits were consolidated for trial.

The trial court, sitting without a jury, rendered judgment in which: (1) the City’s prayer for injunction was denied; (2) the City was enjoined from interfering with the promotion and sale of tickets; (3) the Police Officers Association and PAR Productions were enjoined from representing that profits were to be used for anything except the Association’s general operating fund; (4) no solicitation of gifts or donations was to be made; (5) all receipts of less than $6.00 per order (the price of a single ticket) were to be treated as donations and refunded to the donors; (6) all promotional costs must be reasonable; (7) the promoter was to receive a maximum of 25% of gross receipts to cover his reasonable costs, with the excess held by the Association pending further determination by the court or a disposition on the merits; and (8) the City may give permits for advertisement of the show without constituting an admission against interest by the City.

The country-western show “went on” as scheduled. Therefore, some of the matters covered by the trial court’s judgment are now moot and will not be considered. In its first point of error, the City complains that the trial court erred because the evidence shows the Association comes within the solicitations ordinance, and therefore its prayer for injunction should have been granted and the Association’s should have been denied. The City strongly contends that the articles of incorporation of the Association define the Association as a charitable organization, and as such, all of its fund raising activities unequivocably fall within the purview of the ordinance, and that the Association’s previous applications for solicitation permits and previous methods of collecting funds prove its inherent nature as a charitable organization.

Whether the sale of tickets to raise funds for the general operating fund of an organization whose actual activities are both charitable and non-charitable is subject to the City’s solicitations ordinance is the ultimate issue to be decided on the merits. The judgment contains no finding concerning the applicability of the solicitations ordinance, and the denial of the City’s plea for a temporary injunction cannot be construed as such a finding.

The questions before the trial court in any temporary injunction hearing are whether the plaintiff shows probable injury if temporary equitable relief is denied, a probable right on the merits, and lack of an adequate remedy at law. As stated by the Supreme Court:

“In a hearing on an application for a temporary injunction the only question before the court is the right of the applicant to a preservation of the status quo of the subject matter of the suit pending a final trial of the case on its merits. . To warrant the issuance of the writ, the applicant need only show a probable right and a probable injury; he is not required to establish that he will finally prevail in the litigation. . . . Where the pleadings and the evidence present a case of probable right and probable injury, the trial court is clothed with broad discretion in determining whether to issue the writ and its order will be reversed only on a showing of a clear abuse of discretion. . There is no abuse of discretion in the issuance of a writ if the petition alleges a cause of action and the evidence adduced tends to sustain it.”

Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549 (1953). See also State v. Southwestern Bell Telephone Company, 526 S.W.2d 526 (Tex.Sup.1975), Inman v. Padrezas, 540 S.W.2d 789, 797 (Tex.Civ.App.—Corpus Christi 1976, no writ), Corpus Christi Classroom Teachers Association v. Corpus Christi Independent School District, 535 S.W.2d 429, 431 (Tex.Civ.App.—Corpus Christi 1976, no writ).

Because no judicial determination of the applicability of the solicitations ordinance has been made, the City is incorrect in asking this Court to reverse a judgment it contends was based on such a determination. Appellant’s first point is overruled.

The purpose of a temporary injunction is to preserve the “last actual, peaceable, non-contested status which preceded the pending controversy.” State v. Southwestern Bell Telephone Company, supra, Transport Co. of Texas v. Robertson Transports, supra. In this case, the last peaceable, non-contested status occurred before February 18, 1977, when the Police Officers Association withdrew its application for a permit. Prior to that time, the Association complied with the City’s request to apply for a permit by preparing and presenting an application. When the Solicitations Commission found the application unacceptable and the Association withdrew the application as unnecessary, the parties then stood in adversary positions. At that point, ticket sales and arrangements for staging the show were in progress. Not all expenses had yet been incurred, nor had sales been completed. Funds were not disbursed beyond the percentage permitted in the solicitations ordinance, nor were they available yet for distribution under the formula in the contract with the promoter. It is this status quo which the temporary injunction sought to maintain until the rendition of a final decision on the merits.

In its brief the City prayed for an injunction to stop ticket sales and cancel the show unless the Association complied with the ordinance and, in the alternative, for a declaration that the ordinance applies, and the funds be distributed accordingly. Thus, the City’s ultimate purpose would be satisfied if the funds were available to be disbursed under the restrictions of the ordinance if and when a judicial determination of the applicability of the solicitations ordinance were made.

The judgment of the trial court properly accomplished the preservation of the status quo by permitting the ticket sales to continue under the conditions stated in the judgment, and requiring the funds to be held in such a manner that they could be disbursed under either the ordinance or the contract, whichever was ultimately deemed applicable. There was no abuse of discretion in the denial of the City’s application for temporary injunction or the granting of the Association’s application.

In its second point of error, the City contends the trial court erred in admitting into evidence a letter and attachments purporting to be from the District Director of the Internal Revenue Service pertaining to the tax exemption of the Combined Law Enforcement Associations of Texas as a labor organization. The admissibility of this letter is immaterial to the disposition of this appeal because its relevance, if any, concerns only the ultimate issue of whether or not the Police Officers Association’s fund raising activity comes within the purview of the solicitations ordinance. Since this issue will not be decided until a ruling is made on the merits, it is not material to this appeal. Appellant’s second point of error is overruled.

The judgment of the trial court is AFFIRMED.

      . Sec. 38-22. Permit-Required; exception.
      No person shall be permitted to solicit or to accept alms or gifts in money, money orders, checks, merchandise, trade or any other thing or article representing monetary value, directly or indirectly, for or on behalf of any person or charitable, patriotic, social, religious or philanthropic organization in the city; nor shall any person promote or participate in any entertainment, benefit dance, fair, bazaar or any other type of organized social entertainment in the name of charity, patriotism, religion or philanthropy; nor shall any person sell or seek to sell by manually delivered handbills, advertisements or house-to-house contacts, articles or products of any nature whatsoever in the name of and for the alleged benefit of handicapped, disabled or underprivileged citizens of the city, without first acquiring a permit so to do as provided in this article. This section shall not be construed so as to require any organization to obtain a permit before soliciting funds from its own membership at any time or at any place within the city. (Code 1958, § 26-12)


source: Caselaw Access Project

author: YOUNG, Justice.

license: Public Domain

text:
    Bobby BRASELTON, Appellant, v. NICOLAS & MORRIS, Appellee.
    No. 1194.
    Court of Civil Appeals of Texas, Corpus Christi.
    Oct. 20, 1977.
    Rehearing Denied Nov. 10, 1977.
    James R. Harris, Harris, Cook, Browning & Barker, Corpus Christi, for appellant.
    Pat Morris, Nicolas & Morris, Corpus Christi, for appellee.
   OPINION

YOUNG, Justice.

The defendant, Bobby Braselton, appeals from a summary judgment awarding the plaintiff, Nicolas and Morris, recovery on a past due note against him. Braselton signed the note for $17,000 for payment of legal services rendered for his wife by Mr. Nicolas in the divorce of Bonnie and Bobby Braselton. The fee as originally agreed to by the parties was for $18,000 to be paid $1,000 in cash and $1,000 each month thereafter until paid in full without interest. We reverse.

To be entitled to a summary judgment the party calling for such must come forward with proper pleadings and proof that there are no genuine issues as to any material fact and that as a matter of law he is entitled to judgment. Tex.R.Civ.Proc. Rule 166-A (1977); Harrington v. Young Men’s Christian Ass’n of Houston, 452 S.W.2d 423 (Tex.Sup.1970). And all doubts as to the existence of genuine issues of fact are to be resolved against the movant. Great American R. Ins. Co. v. San Antonio PL Sapp. Co., 391 S.W.2d 41 (Tex.Sup.1965).

Viewed alone, plaintiff’s pleadings, motion for summary judgment and supporting proof entitled it to the judgment rendered. Defendant, however, in opposition to plaintiff’s motion filed affidavits setting forth the following facts: Mr. Nicolas represented Bonnie Braselton in the divorce proceeding entitled In the Matter of the Marriage of Bonnie Braselton and Bobby Braselton. On April 23, 1976, Mr. Braselton met with Mr. Nicolas in his office to complete the property division between the parties. Mr. Braselton was not represented by counsel during this meeting or in the divorce action. Mr. Nicolas represented $18,000 was a fair and reasonable fee for the services rendered and that Mr. Braselton believed that such fee was reasonable based on Mr. Nicolas’ representation. Mr. Braselton signed the promissory note solely in reliance upon plaintiff’s representation that the fee was fair and reasonable. Further James Harris, a practicing attorney for seventeen years in Corpus Christi and Nueces County, after his review of the services rendered by Mr. Nicolas, was of the opinion that the fee was excessive.

Defendant’s affidavits place in issue the question of a defense to a suit on a note between the original parties. Fraudulent inducement is clearly a defense to a suit on a note between the original parties. Viracola v. Dallas International Bank, 508 S.W.2d 472 (Tex.Civ.App.—Waco 1974, writ ref’d n.r.e.); Costello v. Sample, 470 S.W.2d 446 (Tex.Civ.App.—Waco 1971, writ ref’d n.r.e.). Fraud may be either actual or constructive. The latter is the breach of some legal or equitable duty which, irrespective of moral guilt, the law declares fraudulent because of its tendency to deceive others, to violate confidence, or to injure public interest. Archer v. Griffith, 390 S.W.2d 735 (Tex.Sup.1964); Mackintosh v. Texas Employers Insurance Ass’n, 486 S.W.2d 148 (Tex.Civ.App.—Dallas 1972, writ ref’d n.r. e.); Daves v. Lawyers Surety Corporation, 459 S.W.2d 655 (Tex.Civ.App. — Amarillo 1970, writ ref’d n.r.e.).

Defendant has alleged fraudulent inducement based on the plaintiff’s representation that the fee charged was not excessive. State Bar of Texas, Rules and Code of Professional Responsibility, DR 2-106(A) (1973) provides: “A lawyer shall not enter into an agreement for, charge, or collect an illegal or clearly excessive fee.” There exists, therefore, a lawfully imposed duty not to charge excessive fees. There also exists, from the defendant’s viewpoint, a cause of action for constructive fraud. It cannot be said, therefore, that as a matter of law the plaintiff is entitled to judgment on the note. There exists the issue of whether the fee charged is excessive.

Appellee, plaintiff here, urges that the resolution of this case is controlled by Lampkin v. Lampkin, 480 S.W.2d 35 (Tex.Civ.App.—El Paso 1972, no writ). In Lampkin, the former wife brought an action against her former husband for delinquent payments of $200.00 per month due under a property settlement agreement executed incident to their divorce. The appellate court there upheld the trial court’s granting of the former wife’s motion for summary judgment.

The case here is distinguishable in the following material respects. The plaintiff here was not a party to the settlement agreement as in Lampkin. Nor was the amount set out in the settlement agreement here (“Attorney’s fees in a reasonable sum . ”) as it was in Lampkin (“Two Hundred and no/100 . . . Dollars per month for the rest of her life . . . ”).

Of course, we are not holding that the plaintiff exercised fraud which induced the defendant to execute the note. Our holding is only that defendant has raised an issue of fact regarding that matter.

The judgment of the trial court is reversed and the cause is remanded for trial.

NYE, C. J., not participating.


author: LUKOWSKY, Justice.

text:
    Mason ROBINSON, Movant, v. MURLIN PHILLIPS & MFA INSURANCE COMPANY, Respondents.
    Supreme Court of Kentucky.
    Oct. 7, 1977.
    William L. Sullivan, Dorsey, Sullivan, King & Gray, Henderson, for movant.
    King, Deep & Branaman, Henderson, Wilson, Wilson & Plain, Owensboro, for respondents.
   LUKOWSKY, Justice.

This is an appeal from a judgment of the Henderson Circuit Court in which Robinson recovered $11,000.00 from Phillips and MFA. The Court of Appeals reversed in an opinion published at 548 S.W.2d 511 (1977). We granted discretionary review.

On Saturday night, November 14, 1971 Robinson attended a wedding party at the Sportsman’s Club located in rural Henderson County. About 11:00 p.m. the party broke up but Robinson, together with a small group of friends, remained until after midnight. During the course of the party Robinson consumed at least four highballs. As he left he felt a call of nature and upon investigation found that the restroom was occupied. He gave his car keys to his wife and told her that he thought he would walk home. He then walked out into an adjacent field, empty but for growth similar to sagebrush, to urinate.

Some five to ten minutes later Mrs. Robinson asked Phillips and one of the passengers in his car for assistance in locating her husband. Phillips then drove his car at a slow rate of speed into the field with his headlights on searching for Robinson. In doing so he ran over Robinson who was in the process of relieving himself. Robinson was facing away from the Sportsman’s Club in a “half knee” position (which we assume to be somewhere between erect and squatting). As a result of this incident Robinson suffered extensive bodily injuries.

Phillips was uninsured. MFA was Robinson’s automobile liability insurance carrier. In accord with the requirements of KRS 304.20-020 his policy contained uninsured motorist coverage in the amount of $10,-000.00. It also contained medical payments coverage in the amount of $1,000.00. MFA paid the full amount of the medical payments coverage to Robinson without complaint. Robinson sued Phillips for negligence and MFA on the policy. He sought judgment against Phillips for $50,000.00 and judgment against MFA for $10,000.00. MFA cross-claimed against Phillips and sought indemnity for any sums which it had paid or might be required to pay Robinson.

Phillips’ defense was a denial of negligence on his part and a plea of contributory negligence on the part of Robinson. MFA’s defense was that Robinson was not legally entitled to recover from Phillips and that, consequently, there was no liability under the provisions of the uninsured motorist coverage. MFA did not question the issuance of the policy, its limits or any of its terms and conditions.

The case was tried to a jury. The trial judge submitted these contested issues of fact to the jury:

1. The negligence of Phillips.
2. Whether Phillips’ negligence, if any, was a substantial factor in causing the accident and injuries.
3. The negligence of Robinson.
4. Whether Robinson’s negligence, if any, was a substantial factor in causing the accident and injuries.
5. The nature and extent of damages.

The trial judge also instructed the jury, over the objection of MFA alone, that if they made an award in favor of Robinson it should be against Phillips and MFA jointly and severally in any sum not to exceed $11,000.00, solely against Phillips for any amount in excess of $11,000.00 and that the $1,000.00 previously paid by MFA would be credited against the award for the benefit of MFA. He refused MFA’s request to instruct the jury on MFA’s right to recover from Phillips any sums that they might be required to pay to Robinson, maintaining that there was no factual dispute as to this matter and that it would be handled in the judgment.

The only assigned error worthy of discussion is whether the trial judge prejudiced the rights of MFA when he required the jury to make the first $11,000.00 of any award it might make joint and several against MFA and Phillips. The Court of Appeals seized on this as a ground for reversal and an opportunity to gratuitously articulate rules of technique for the trial of uninsured motorist cases with the alacrity and vigor of a bass taking the bait.

In Anglo-American jurisprudence the function of the jury is to decide contested issues of fact. In order to perform this function there is no need for jurors to know the legal effect of their resolution of contested issues of fact. 2 Palmore, Kentucky Instructions to Juries, sec. 13.01. The questions of whether an award should be joint or several or joint and several or whether there should be indemnity are questions of law once the issues of contested fact have been determined by the jury. They are properly subject to solution by the trial court in its judgment. The real issue here is not whether mentioning joint and several to the jury is an error but rather, conceding that this material has no place before the jury, whether such surplusage had any prejudicial effect of which MFA could properly complain.

In order to find this prejudice the Court of Appeals opined:

A. The limits of uninsured motorist coverage should not have been disclosed to the jury because such disclosure constitutes an open invitation to the jury to fix damages at the amount of the policy.

We concede that the policy limits are immaterial when, as here, there is no dispute about them and there is, consequently, no contested issue of fact for the jury to decide. But how this disclosure can be considered an error, much less a prejudicial error, is beyond us when this evidence was introduced by MFA through one of its own witnesses without any objection from Phillips.

B. The mention of joint and several liability permitted the attorney for the plaintiff to state in his final argument such phrases as: “ . . . if your judgment exceeds $11,000.00 . . . then the rest of it is against Mert, individually. We don’t want that.” And “He paid the premium and they took his premium to protect himself if he was injured by someone who did not have insurance. His own insurance now, he bought and paid for it and this is exactly what happened.”

These quotations are badly out of context. Putting these gems in their proper setting they read as follows: “Okay, they have refused to pay any part of the $10,-000.00. All right, the first instruction will tell you here that if your judgment exceeds $11,000.00, or the second instruction, then the rest of it is against Mert, individually. We don’t want that. The first instructions would authorize you to find $11,000.00. $11,000.00. Of which MFA Insurance Company will receive a credit, if you find $11,-000.00 they will receive a credit of $1,000.00, leaving the $10,000.00 which he bought and paid for. I think we are being extremely reasonable by simply asking you to return an amount which will not go anywhere toward putting him back on his feet but which is entirely reasonable as far as the defendant goes.” “Mason Robinson bought insurance. He bought insurance and paid for it to protect him in case he was injured by the negligence of someone who did not have insurance and that’s exactly what happened. He paid the premium and they took his premium to protect himself if he was injured by someone who did not have insurance. His own insurance now, he bought and paid for it and this is exactly what happened.”

We know of no rule of law which prohibits a plaintiff in closing argument from limiting the size of the verdict he requests to less than the amount demanded in the complaint or for that matter to less than the proof might otherwise justify or authorize. Taken at its worst the first quote is no more than a statement that the plaintiff would take a modest award for his claim. The second and footnote statements are no more than a correct statement of the principles of liability applicable to this case. Each clearly indicates that the duty of MFA to pay is predicated upon the negligence and carelessness of an uninsured motorist. In addition, neither Phillips nor MFA objected to these statements. The trial judge made no ruling. There is no error, much less prejudicial error.

All in all we are unable to comprehend how the use of the surplus words “jointly and severally” could have prejudiced MFA, or for that matter Phillips who did not object to their use, in the eyes of the jury in this case. They returned a verdict in which they found Phillips to be causatively negligent, Robinson not to be contributorily negligent and fixed damages in a sum far less than would have been justified by the evidence in the absence of the reduction in the demand made by Robinson’s counsel in his closing argument. The trial judge handled the question of indemnity adequately in his judgment.

We now turn our attention to the question of trial technique. The instruction proposed by the Court of Appeals is not appropriate, because it brings to the attention of the jury matters of law which are extraneous to its function of deciding contested issues of fact. In addition it is replete with error in regard to the nature and quality of causation. The best way to restrict the jury to its fact finding function and prevent its consideration of immaterial issues of law is for the trial judge to exercise the discretion granted him by CR 49.01 and submit only the contested issues of fact to the jury for their determination in a special verdict. 2 Palmore, Kentucky Instructions to Juries, secs. 13.09, 13.20; for examples see secs. 15.02,16.14,16.30. (1977). Once the jury answers these interrogatories the trial judge can easily apply the appropriate and sometimes complex law to the answers in his judgment.

' The decision of the Court of Appeals is reversed and the judgment of the Henderson Circuit Court is affirmed.

All concur.

      . The liability of MFA to Robinson is contingent upon the liability of Phillips to Robinson. Once the liability of Phillips is fixed he is primarily liable for the entire award and MFA is secondarily liable to the limits of its coverage. MFA is entitled to indemnity from Phillips to the extent of its payment of the award.

      . Another reference to this coverage not mentioned by the Court of Appeals is as follows: “We think we are being reasonable. This is the reason that he bought this insurance and exactly the thing happened. Exactly the thing happened that he bought the insurance for. He was injured through the carelessness and negligence of a person who had no insurance and he ought to be entitled to collect. Give him that small measure to try to make this man whole for a condition that is going to be with him as long as he lives and you can certainly bet on it.”


author: PARK, Judge.

text:
    Roland D. FOSTER and Venetia C. Foster, his wife, Petitioners, v. Honorable C. V. SANDERS, Judge, Bullitt Circuit Court, Fifty-Fifth Judicial Circuit, Respondent.
    Court of Appeals of Kentucky.
    July 8, 1977.
    Respondent’s Motion for Reconsideration Denied Sept. 28, 1977.
    Petitioner (Appellee) Motion to Dismiss Appeal Granted by Supreme Court Nov. 15, 1977.

      Norman R. Lemme, Pike, Lemme & Conway, Shepherdsville, for petitioners.
    Jean A. McMillen, Dept, of Transp., Bureau of Highways, Louisville, George Geo-ghegan, III, Asst. Atty. Gen., Frankfort, for respondent.
    Before GANT, PARK, and WILHOIT, JJ.
   PARK, Judge.

The petitioners, Roland D. Foster and Yenetia C. Foster, are the owners of land which the Commonwealth of Kentucky seeks to acquire for highway purposes in a condemnation proceeding presently pending in the Bullitt Circuit Court. Mr. and Mrs. Foster seek a writ of mandamus against the presiding judge of the Bullitt Circuit Court, contending that their property is being taken without due process of law because of the procedures being followed in the condemnation case.

A shopping center has been developed on a part of the land owned by the Fosters. The record in this original proceeding does not define with any clarity the various leases, mortgages and other interests in the Fosters’ property. Nevertheless, as a result of stipulations made by the parties during oral argument before this court, it is possible to give a general outline of the development of the shopping center. The major tenant, Houchens, Inc., holds a lease on a part of the shopping center. An affiliated corporation, Houchens Industries, Inc., asserts mortgage liens against portions of the shopping center. (Houchens Industries, Inc. apparently provided the construction money for the supermarket building leased by Houchens, Inc.) Other portions of the shopping center are leased to various so-called minor tenants. A portion of the property owned by Mr. and Mrs. Foster is undeveloped land which is not in any way utilized in the shopping center operation. A vendor’s lien and other mortgage liens are asserted against various portions of the Fosters’ property.

The condemnation proceeding is being prosecuted pursuant to the Eminent Domain Act of Kentucky, KRS 416.540 to 416.-670. Mr. and Mrs. Foster, all of the lessees in the shopping center, and all of the holders of liens were joined as defendants in that proceeding. The commissioners appointed by the circuit court made an award of $976,145.00. This award represented the commissioners’ finding of the difference between the fair market value of all of the property owned by Mr. and Mrs. Foster immediately before the taking and so much of their property as remains immediately after the taking. The commissioners did not make a separate valuation of each portion of the shopping center property, nor did the commissioners appraise the shopping center property separate from the undeveloped land. The Commonwealth has paid the sum of $976,145.00 into court. An interlocutory judgment has been entered by the circuit court pursuant to KRS 416.610, granting the Commonwealth the right to take immediate possession of the property sought to be condemned.

In the absence of an agreement by the defendants with respect to the division of $976,145.00 deposited by the Commonwealth with the court, the circuit court has refused the Fosters’ request that the fund be paid to them or applied to the lien debts. As some of the lessees and lienholders have objected to any payment to the Fosters or to other lien holders, the circuit court has taken the position that no portion of the fund should be paid out until the respective interests of the defendants in the award is determined by a jury.

Mr. and Mrs. Foster point out that interest continues to accrue on the lien debts during the pendency of the condemnation proceeding while their rental income from the shopping center will be terminated when the Commonwealth takes possession of the property pursuant to the interlocutory judgment. The Fosters’ dilemma is compounded by the fact that the circuit court has refused to make any temporary investment of the $976,145.00 fund being held by the court. Consequently, the fund will earn no interest for the defendants, and the Commonwealth will deny any liability for interest on the amount of the commissioners’ award for the period of time between the date of the deposit and the date of the final judgment following a jury trial. See KRS 416.620(5); Commonwealth, Department of Highways v. Citizens Ice and Fuel Co., Ky., 394 S.W.2d 903 (1965). The Fosters assert that they are being denied due process of law. We agree.

In discussing the requirement that just compensation be paid for any private property taken for public purposes, the starting point must be sections 13 and 242 of the Kentucky Constitution. Section 13 provides that no person’s property may be taken for public use “without just compensation being previously made to him.” The requirements of section 13 are amplified by section 242 of the Kentucky Constitution which provides:

“Municipal and other corporations, and individuals invested with the privilege of taking private property for public use, shall make just compensation for property taken, injured or destroyed by them; which compensation shall be paid before such taking, or paid or secured, at the election of such corporation or individual, before such injury or destruction. The General Assembly shall not deprive any person of an appeal from any preliminary assessment of damages against any such corporation or individual made by Commissioners or otherwise; and upon appeal from such preliminary assessment, the amount of such damages shall, in all cases, be determined by a jury, according to the course of the common law.” (emphasis added)

In construing sections 13 and 242, this state’s highest court has held that the owner must be paid or tendered compensation before his property may be “taken” for a public use. If the property is only “injured or destroyed” rather than “taken”, the damages need only be paid or “secured.” P. Bannon Pipe Co. v. Illinois Central R. Co., 203 Ky. 659, 262 S.W. 1110, at 1112-13 (1924); Williams v. Wedding, 165 Ky. 361, 176 S.W. 1176, at 1182 (1915).

Although the condemnor must pay or tender compensation to the owner prior to taking possession of the property being acquired, neither section 13 nor section 242 requires that possession be delayed until there has been a final adjudication of the amount of compensation. Section 242 recognizes that there may be a preliminary assessment of the amount of compensation to be paid with either party having their right to secure a final assessment of the amount of compensation by a jury. The drafters of the present constitution did not intend that public projects be delayed until a jury had made the final determination of the amount of compensation to be paid. Consequently, sections 13 and 242 have been construed to require that the con-demnor need only pay or tender to the owner the amount of the preliminary assessment of compensation as a prerequisite to taking possession of the land condemned. Barker v. Lannert, 310 Ky. 843, 222 S.W.2d 659 (1949). Under the Eminent Domain Act, the condemnor is entitled to take possession of the property at such time as the amount of compensation awarded by the commissioners is paid to the owner or to the clerk of the court. KRS 416.610(2)(c).

Kentucky’s constitutional requirement that compensation be paid prior to the taking of private property by eminent domain is consistent with the general rule allowing interest in the event that there is delay in the payment of compensation beyond the date of taking. As stated in 3 Nichols’ The Law of Eminent Domain, § 8.63 (3rd ed. 1976):

“The theory of the law is that when land is taken by eminent domain or when it is injured in such a way as to create a constitutional right to damages, payment for the land thus affected should be coincident with the taking or injury, and, if for any reason payment is postponed, the right to interest from the time that payment ought to have been made until it is actually made follows as a matter of strict constitutional right.”

The cases supporting this rule are collected in an annotation, 96 A.L.R. 18, at 150-206 (1935), supplemented in 36 A-L.R.2d 337, at 413-71 (1954). The Eminent Domain Act recognizes the owner’s right to interest in the event of delay in the payment of compensation beyond the date of taking. If the final amount awarded to the owner as compensation is greater than the amount of the commissioners’ preliminary award, the con-demnor is liable for interest on the amount of the increase from the date the condemn- or takes possession. If the original commissioners’ award is greater than the amount of compensation finally awarded, the owner is liable for interest on such excess unless the owner refused to accept payment of the preliminary award or declined to withdraw the amount deposited in court. KRS 416.-620(5). Compare Commonwealth, Department of Highways v. Whitledge, Ky., 406 S.W.2d 833 (1966), with Sloan v. Commonwealth, Department of Highways, Ky., 405 S.W.2d 294 (1966). If the condemnor pays the amount of the commissioners’ award to the clerk of the court, the condemnor has no further liability for interest on that sum. Commonwealth, Department of Highways v. Citizens Ice and Fuel Co., supra. The clerk of the court holds the award subject to the orders of the court. KRS 416.630.

Because the owner has lost the right of possession to the property being taken upon the payment of the commissioners’ award into court and because the owner has no claim to interest on the amount of the commissioners’ award, the legislature, in enacting the Eminent Domain Act, clearly contemplated that the owner may immediately withdraw the amount of the award. The only statutory exception to the owner’s right to withdraw the award is set forth in KRS 416.640 which provides:

“Where there are conflicting claimants to the land sought to be condemned apd all such parties are before the court, each claimant, for the purposes of the condemnation proceeding only, shall be deemed to be an owner, and the procedure for the condemnation of the land shall be as provided in KRS 416.550 to 416.670 except that, before the condemnor shall be entitled to take possession of the land, it shall be required to pay the compensation awarded therein to the circuit court clerk to be held for the benefit of, and paid over to such persons as may thereafter be determined to be entitled to receive it. In such cases, the claimants may have their rights determined in a separate action, but the filing of such action or its pendency shall in no wise stay or delay said condemnation proceedings.” (emphasis added)

It must be emphasized that KRS 416.640 deals with situations in which there are “conflicting claimants” to the property being condemned. The statute does not deal with the situation in which there are multiple owners of different interests in the land being condemned and the dispute is over the value of the respective interests.

In the present case, if there is a genuine issue with respect to the priority or validity of certain liens upon the Fosters’ property, then there would be “conflicting claimants” within the meaning of KRS 416.640. Until any such issues are finally determined, the portion of the commissioners’ award attributable to the lien claims should be retained by the court. To the extent that there are genuine issues with respect to the lien claims, the trial court did not err in refusing to pay out the entire amount of the commissioners’ award to Mr. and Mrs. Foster. Nor did the trial court err in refusing to pay specific lien claims.

A dispute over the priority or validity of liens would not justify the trial judge’s refusal to place the sum of $976,-145.00 at interest. There will be occasions when the commissioners’ award is so small, or the time before resolution of the conflicting claims is so short, that the trial court will be justified in refusing to direct the clerk to place the award at interest. In the present case, the trial judge’s refusal to place the sum of $976,145.00 at interest constitutes a clear abuse of discretion. When the Commonwealth takes possession of the property being condemned, Mr. and Mrs. Foster will lose the rental income from the property. At the same time, the interest on the lien debts against the property will continue to accrue. Considering the magnitude of the sum deposited by the Commonwealth, it is mandatory that the sum be placed at interest until such time as any genuine question of lien priorities can be resolved.

Although there may be a genuine dispute with respect to the priority or validity of the lien debts, there is no genuine issue with respect to the ownership of the various leasehold interests. With respect to the leasehold estates, the question is whether they have any compensable value under the principles laid down in Commonwealth, Department of Highways v. Sherrod, Ky., 367 S.W.2d 844, at 848-51 (1963). Neither the Commonwealth nor the commissioners have made any effort to allocate the award in accordance with the Sherrod case. In the absence of such an allocation, the lessees can not make an intelligent decision whether to file exceptions to the award as permitted by KRS 416.620. If no allocation of the award is made in accordance with the standards set forth in the Sherrod case, the lessees must necessarily file exceptions to the award. On the other hand, if an allocation is made, the lessee may be willing to accept the award thereby reducing the issues required to be tried before a jury.

The Fosters are in an even greater dilemma than the lessees. Their undeveloped land was valued with the shopping center property without any allocation being made between the two parcels. This procedure is directly in conflict with the holding in the Sherrod case that a leased parcel should be treated as an independent tract, separate and apart from the remainder of the owners’ property which was unleased. Id., 367 S.W.2d at 852. The value of the undeveloped and unleased land owned by Mr. and Mrs. Foster could be readily determined by the commissioners. Nevertheless, the undeveloped property was not separately valued, and Mr. and Mrs. Foster have no way of knowing what part of the $976,145.00 is attributable to the undeveloped tract of land.

Under federal procedure, the condemnor’s deposit of estimated compensation serves the same function as the deposit of the commissioners’ award under Kentucky practice. In United States v. 355.70 Acres of Land, 327 F.2d 630 at 632 (3rd Cir. 1964), the court considered the validity of a lump sum deposit covering several parcels of land being acquired by the United States. The court held:

“In deciding what is just compensation for a public taking of private property, courts normally determine and award the fair value of the property at the time of taking. But usually the taking occurs at the beginning of the condemnation proceeding, while the award comes at the end. This means that there is likely to be a substantial period during which the owner has neither his land nor equivalent value in money. In such circumstances, just compensation must include, in addition to fair value at the time of taking, an award for the intervening deprival. To supply this essential element of just compensation, Congress has required that the United States pay 6 per cent interest upon the value at taking from that date until the award is made and paid. 40 U.S.C. § 258a.
“Alternatively, the same section authorized the United States to eliminate or minimize this interval of deprivation and the attendant necessity for compensation in the form of interest by making an advance estimate of value and paying that sum into court at the time of taking for the immediate use of the owner or owners of the condemned land. * * *
“Where a single parcel is taken, a deposit of estimated compensation is obviously a tender of a specific sum in a way that makes it immediately available to anyone who can show clear title to that parcel. But rule 71A(b), Federal Rules of Civil Procedure, as promulgated in 1951, expressly authorizes the joinder of ‘separate pieces of property, whether in the same or different ownership’, in a single condemnation action. Such aggregation of takings does not alter the necessity that estimated compensation be explicitly tendered or readily calculable for each parcel individually in order that the deposit may have that characteristic of immediate availability which alone justifies the denial of interest between the taking and the ultimate award.
“A blanket estimate and deposit covering several parcels and not attended by allocation among them is not an effective tender of any sum for any parcel. * * As a practical matter, this meant that an ultimate determination of just compensation for each parcel was necessary before any owner could effectively claim a specific amount as his share of the deposit. In these circumstances, the unallocated sum was not a legally effective deposit within the contemplation of section 258a of Title 40 and, therefore, did not relieve the United States of its normal obligation to pay interest from the time of taking on the subsequent award.”

The case before the United States Court of Appeals for the Third Circuit involved several parcels owned by different persons. Nevertheless, the principles set forth in that opinion are applicable to the facts of this case.

While the Fosters are the fee owners of both the shopping center and the undeveloped land, recognition must be given to the fact that the shopping center was subject to a myriad of leases. So long as there is no allocation of the commissioners’ award, the undeveloped property necessarily becomes involved in the controversy between the Fosters and their lessees arising out of the shopping center. Even when common ownership exists, if contiguous parcels are devoted to separate unrelated uses, they must be treated as separate tracts for valuation purposes. Commonwealth, Department of Highways v. Rogers, Ky., 399 S.W.2d 706 (1965). See also Commonwealth, Department of Highways v. Sherrod, supra; cf. Jones v. Commonwealth, Department of Highways, Ky., 413 S.W.2d 65 (1967); Commonwealth v. Raybourn, Ky., 359 S.W.2d 611 (1962); City of Middlesboro v. Chasteen, 285 Ky. 427, 148 S.W.2d 295 (1941). Since there was no allocation of the award between tracts devoted to separate uses, the payment of the $976,-145.00 award into court does not relieve the Commonwealth of its obligation to pay interest between the date it takes possession of the property and the date that ultimate compensation is determined and paid.

Not only should there be an allocation of the commissioners’ award when there are separate tracts devoted to unrelated uses, there should also be an allocation of the award when there are separate interests in a single tract. For example, when a tract is subject to a lease, the value of the interest of the lessor and the value, if any, of the interest of the lessee can be readily ascertained by following the procedures set forth in the Sherrod case. When the interests of the lessor and the lessee can be readily determined, the commissioners’ award should be allocated between them. In Russian Orthodox Greek Catholic Church of North America v. Alaska State Housing Authority, Alaska, 498 P.2d 737 (1972), different persons owned different interests in the property being condemned. Relying heavily on the decision in United States v. 355.70 Acres of Land, supra, the Alaska Supreme Court held that the condemnor was under a duty to allocate a lump sum deposit between “readily recognizable separate interests” in the property being taken. The court held that an owner is entitled to interest from the date of taking if, due to no fault of his own, he is unable to withdraw his share of the deposit because the condemnor made a lump sum deposit when it was feasible to allocate the deposit among the separate interests.

If the separate interests of different persons in a single tract can be readily determined in accordance with the rules laid down in the Sherrod case, then the commissioners’ award should be allocated among the respective interests. On the other hand, the interests in a tract of land may be so numerous and complex that the owners can be deemed to be “conflicting claimants” within the meaning of KRS 416.640. In such cases, there is no burden on the condemnor to have the commissioners’ award allocated among the many complex conflicting interests. The condemnor is not liable for interest because of the delay required for a judicial determination of the share of each owner in the award. See United States v. 53¼ Acres of Land, 176 F.2d 255 (2d Cir. 1949), second appeal, United States v. City of New York, 186 F.2d 418 (2d Cir. 1951). Based upon the record before the court in this proceeding, this court is unable to determine whether it is feasible to allocate the commissioners’ award among the various interests in the shopping center, or whether the interests in the shopping center are so complex and interrelated that they should be deemed to be conflicting within the scope of KRS 413.-640. In determining whether allocation is feasible, the trial court must necessarily have some discretion. This court will not attempt to exercise the trial court’s discretion, but it should be pointed out that an allocation must ultimately be made by the jury in awarding compensation. In most cases, it will be no more difficult for the commissioners to allocate their award than it will be for the jury to make an allocation in its verdict.

If the trial court determines that allocation is feasible, then the order appointing the commissioners should provide the standards to be followed by the commissioners in making their award. For example, if the award must be allocated between lessor and lessee, the order appointing the commissioners and the form for the commissioners’ report should be substantially the same as the instructions and form verdict submitted to a jury under the principles set forth in the Sherrod case. The validity of an interlocutory judgment granting the condemnor possession of the property and the validity of the final judgment would not be affected by an erroneous determination that it was not feasible for the commissioners to allocate their award among the separate interests being taken, cf. Commonwealth, Department of Highways v. Johnson, Ky., 403 S.W.2d 691 (1966). If the failure to allocate the commissioners’ award was error, the owners can be awarded interest as compensation for denial of their right to withdraw their respective shares of the commissioners’ award.

If the commissioners’ award is allocated among the respective interests in the property being taken, each owner will have the right to withdraw his respective share of the award. In addition, each owner will be in a position to make an intelligent decision whether to file an exception to the award. If the amount finally awarded by the jury for any interest is less than the amount allocated by the commissioners’ award, the owner of that interest would be liable for any such overpayment plus interest on the amount of the overpayment.

If the jury award to the owner of an interest (such as a lessor) is greater than the amount that was allocated to him in the commissioners’ award, the condemnor will be liable to that owner for the deficiency plus interest on the amount of the deficiency. This is true even though there may have been an overpayment to the owner of another interest (such as a lessee) which cannot be recovered because that person has become judgment proof. The risk of loss of overpayment to the owner of a particular interest must fall on the condemnor. The problem is created by the condemnor’s election to take possession of the property being condemned prior to a final determination of just compensation. Socony Mobil Oil Co. v. State, 248 Ind. 680, 230 N.E.2d 530 (1967). Since the condemnor is required to pay the commissioners’ award prior to final judgment only as a means of obtaining immediate possession, the risk of loss should fall upon the condemnor rather than the other owners who had no choice in the matter.

Since the condemnor must bear the risk of loss in the event of overpayment, the condemnor should have the right to question the amount allocated to the owner of a particular interest. In such a case, the trial court may deny the owner the right to withdraw the full amount of his share of the award. If the owner of a particular interest is denied the right to withdraw the full amount of the commissioners’ award allocated to him because of the condemnor’s objection, then interest would be allowed on that part of the final award in excess of the amount the court permitted the owner to withdraw. United States v. 53V4 Acres of Land, supra; United States v. Certain Land in City of St. Louis, 41 F.Supp. 809 (E.D.Mo.1941), aff. sub nom. O’Donnell v. United States, 131 F.2d 882 (8th Cir. 1942).

In setting forth procedures to be followed in the condemnation of property in which there are multiple ownership interests, this court has been guided by the constitutional requirement that the owners be awarded just compensation. However, this court does not intend to suggest that the procedures set forth in this opinion represent the only constitutional method for awarding just compensation to the owners of multiple interests in a single tract of land. The problem has not been considered by the legislature, and the legislature is free to enact such procedures as it deems fair in accordance with the mandate of sections 13 and 242 of the Kentucky Constitution. Furthermore, the trial court must be vested with a substantial degree of discretion in such cases because it is impossible for this court to predict the particular interests which may be involved in future eminent domain proceedings.

Mandamus will ordinarily not issue in eminent domain proceedings for the purpose of controlling matters of procedure. In most cases, there will be an adequate remedy by appeal. In the present case, mandamus is justified. The trial court’s failure to place the award of $976,145.00 at interest during the pendency of the case made it certain that some party to the proceeding, whether it be the Commonwealth or the defendants, would sustain a substantial loss. There would be no adequate remedy by appeal.

For the foregoing reasons, the petition for mandamus is granted. The respondent is directed to reappoint commissioners to value the land being taken; to direct the commissioners to value separately parcels not united in ownership and use; to determine whether it is feasible to allocate the amount of the commissioners’ award with respect to the shopping center in accordance with the principles in the Sherrod case, and, if so, to instruct the commissioners accordingly; and to place at interest any amount of the commissioners’ award which is not distributed to the defendants in the pending condemnation proceeding. Any conflict respecting lien claims should be resolved in a summary manner. The liens should be paid as soon as possible so that the owners are not burdened with further interest payments after losing the right to the income from the property. The commissioners should, of course, be instructed to determine the fair market value of each tract without regard to the different interests therein. Only after the fair market value of a tract is determined should the commissioners make any attempt to allocate their award among the owners of the various interests in accordance with the rule in the Sherrod case.

All concur.

      . Commonwealth of Kentucky, Department of Transportation, Bureau of Highways v. Roland D. Foster, et al, Civil Action No. 5026, Bullitt Circuit Court.


author: HOWARD, Judge.

text:
    Jerry THOMAS, and his wife, Joyce Thomas, Appellants, v. CITY OF BEREA, Kentucky, Appellee.
    Court of Appeals of Kentucky.
    Oct. 14, 1977.
    Nicholas W. Williams, Berea, for appellants.
    James T. Gilbert, City Atty., Berea, for appellee.
    Before MARTIN, C. J., and COOPER and HOWARD, JJ.
   HOWARD, Judge.

This is an appeal from the Madison Circuit Court wherein plaintiff-appellee, City of Berea, Kentucky, was granted summary judgment against defendants-appellants, Jerry and Joyce Thomas.

Plaintiff-appellee, the City of Berea (hereinafter referred to as the City), filed suit against defendants-appellants, Jerry and Joyce Thomas (hereinafter referred to as Mr. and Mrs. Thomas), for a lien against the Thomas property based upon an unpaid assessment for street improvements.

The City is a municipal corporation of the fourth class and as such has the power to sue and to enact ordinances and laws to improve its streets and highways, and to levy and assess the costs thereof against the property abutting thereon, Chapter 94, Kentucky Revised Statutes.

The City of Berea, acting by and through its duly elected City Council, enacted a resolution on May 21, 1974, pursuant to KRS 94.292, providing for the improvement of Jefferson Street in the City. This resolution indicated that the cost of the improvement would be made at the expense of the abutting property owners; declared the improvement was a public “necessity”; and described in general terms the scope and specifications of the improvement project. This resolution however was not published.

Two readings of the ordinance to improve Jefferson Street were given at regular City Council meetings. On July 16, 1974, Ordinance No. 10-74 was enacted and subsequently published in the Berea Citizen on July 18, 1974. The City received bids on the project, pursuant to the Ordinance, and a contract was entered into. The contractor worked on the project during the winter of 1974 and through the spring and summer of 1975. The City Council set October 31, 1975, as the date of final inspection of the project and published a notification of this inspection in the Berea, Citizen on October 21, 1975.

After the inspection, the City Council accepted the contractor’s job and subsequently enacted Ordinance No. 1-76, accepting and confirming the improvement project and assessing the abutting property owners for their part of the cost of the project. Pursuant to KRS 94.309, the Thomas property was assessed in the amount of $1,747.53.

The contention of Mr. and Mrs. Thomas on this appeal is that the City of Berea did not comply with the applicable KRS provisions in order to be able to perfect a statutory lien against the property owners for assessments due and owing for the street improvements. The Thomases more specifically cite the failure of the City Council to publish the resolution; the discrepancies in the dates as stated in the Ordinance of Apportionment No. 1-76 and the dates the resolution and Ordinance No. 10-74 were enacted; and lastly, question whether this city improvement was, in actuality, an improvement to them.

The City of Berea did fail to follow the provisions of KRS 94.292 by not publishing the resolution as required. However, KRS 94.314 reads in part that:

. No error in the proceedings of the city legislative body shall exempt any property from the lien for the improvement tax, or the payment of the tax, after the work has been done and accepted. The city legislative body or the courts in which suits are pending shall make all corrections, rules and orders to do justice to all parties concerned.

The circuit court made the specific finding that the Thomases were sent a notice of the City’s intention to rebuild the street and to assess the costs against the abutting property owners when Ordinance No. 10-74 was published. To provide notice is the purpose of the provision requiring publication in KRS 94.292. There is no showing that the Thomases were prejudiced by the failure to publish the resolution and KRS 94.314 does not exempt them from paying the tax.

In Peicke v. City of Covington, 198 Ky. 683, 249 S.W. 1008 (1923) the court pointed out that the property owners could not stand by and allow the improvement to be completed without objection, and thereafter object to the apportioning of the cost. The court stated an appropriate remedy would be injunctive relief against the City.

In Ormsby v. City of London, 220 Ky. 148, 149, 294 S.W. 1025 (1927) the court stated:

This court has adopted the rule that a property owner cannot stand by and see a contractor improve the streets in front of his place under a contract with the city, until after the work has been completed and accepted by the city, and then attack the proceedings under which the work was done for irregularities which do not render the proceedings void. This rule applies where the city irregularly does something which it had a right to do, but failed to take the necessary steps to avoid irregularity.

This line of reasoning and KRS 94.292 clearly preclude the Thomases from raising as errors the non-publication of the resolution and the clerical discrepancies found so as to deny the City of Berea the right to assess the improvement tax.

In 94.292(3) the power of the City Council of Berea to determine what improvements are to be made is stated thusly:

Subject to the provisions of KRS 94.291 to 94.325, the city legislative body shall have full power to determine what public improvement shall be made, the extent and character of the improvement, the kind of material to be used, and the necessity for the improvement, and its determination shall be final. The city legislative body may do all things necessary to the proper execution and carrying out of any improvement.

Absent a showing of fraud or illegality, the decision of a legislative body to make improvements is not subject to judicial review. In Marz v. City of Newport, 173 Ky. 147,190 S.W. 670, 670-71 (1917) the court stated:

It is a fundamental rule that discretionary powers vested in public officers are not subject to judicial control, and that unless legal limitations exist, the power to open, improve, pave . . . (and) secure public improvements of all kinds is discretionary with the proper municipal authorities; and, if the governing law has been observed, their action in that respect is not subject to judicial review. . It is only in cases where the municipal authorities have acted fraudulently that their action can be reviewed by the courts.

The trial court made a specific finding of fact that no fraudulent or corrupt action on the part of the City had occurred in this matter. There being no genuine issue as to any material fact and the City of Berea being entitled to a judgment as a matter of law, the trial court was correct in granting summary judgment to the City of Berea. CR 56.01.

The judgment of the trial court is affirmed.

All concur.


text:
    CALLOWAY COUNTY FISCAL COURT and the Home Insurance Company, Appellants, v. Billy Dean WINCHESTER, CETA and its insurance carrier, Ohio Casualty Insurance Company, and the Workmen’s Compensation Board, Appellees.
    Court of Appeals of Kentucky.
    Oct. 14, 1977.

      W. Donald Overbey, Overbey, Overbey & Overbey, Murray, for appellants.
    M. Ronald Christopher, Hurt & Christopher, PSC, Murray, for appellee Billy Dean Winchester.
    Jonathan Freed, George R. Effinger, Boehl, Stopher, Graves & Deindoerfer, Pa-ducah, for appellees CETA and Ohio Cas. Ins. Co.
    Gemma M. Harding, Deputy Gen. Counsel for Appeals, Dept, of Labor, Louisville, Kenneth E. Hollis, Gen. Counsel, Dept, of Labor, Frankfort, for appellee James R. Yocom, Special Fund.
    Before HAYES, HOWARD and WIL-HOIT, JJ.
   HOWARD, Judge.

This is an appeal from the Calloway Circuit Court which affirmed an opinion and award of the Kentucky Workmen’s Compensation Board ordering appellant, Callo-way County Fiscal Court and/or its insurance carrier, The Home Insurance Company to pay Billy Dean Winchester both temporary total disability benefits and permanent partial disability benefits.

On July 30, 1974, appellee, Billy Dean Winchester (hereinafter called Winchester), fell off of a road grader while employed by the appellant, Calloway Fiscal Court (hereinafter called the Fiscal Court), who had placed its Workmen’s Compensation insurance with appellant, The Home Insurance Company (hereinafter called Home Insurance).

Winchester was initially examined by a local physician and was subsequently treated by Dr. Matthew Wood, a neurosurgeon at the Semmes-Murphy Clinic in Memphis, Tennessee. Home Insurance, after this accident, began making temporary total disability payments to Winchester and also paid all his attendant medical expenses. Home Insurance ceased making temporary total disability payments on November 23, 1974, when Winchester returned to light work.

Winchester did not return to work for his previous employer, the Fiscal Court, but rather was hired under the Comprehensive Employment Training Act (hereinafter called CETA) which is insured by the Ohio Casualty Insurance Company (hereinafter called Ohio Casualty). Winchester did, however, work at the Calloway County Road Department, a division of the Fiscal Court, under the CETA program. Winchester continued to work until March 9, 1975, at which time he sustained a further injury while mopping a floor which was one of the duties of his employment.

Following this second injury, Winchester filed an application for adjustment of benefits with the Workmen’s Compensation Board (hereinafter called the Board), against the Fiscal Court and Home Insurance. Winchester thereafter amended his original application to include CETA and Ohio Casualty as defendants, along with the Fiscal Court and Home Insurance.

It was the Fiscal Court’s position before the Board that Winchester’s disability was occasioned by the March 9, 1975 fall. It was CETA’s position that the March 9,1975 accident merely aggravated a pre-existing condition and initial injury that had manifested itself following the July 30, "974 accident.

The medical proof consists primarily of two medical depositions and a brief medical report made by the Board-appointed physician. The deposition of Dr. Matthew Wood, the neurosurgeon, shows that he felt that Winchester could go back to doing light work in November of 1974. Dr. Wood saw Winchester for final evaluation in January of 1975, at which time Dr. Wood told him to continue doing light work. Dr. Wood also prescribed valium (a muscle relaxer) and robaxin at this time. The deposition of Dr. Cully Cobb, a neurosurgeon of Nashville, Tennessee, shows that he believed the March 9, 1975 accident aggravated Winchester’s previous back injury which he had sustained on July 30, 1974. The medical report of the Board-appointed physician indicates that Winchester’s disability is solely attributable to the accident of July 30, 1974; the mopping incident being of “no consequence”.

On September 27, 1976, the Board entered an Opinion and Award holding that Winchester was entitled to receive both temporary total disability benefits and permanent partial disability benefits from appellant, The Fiscal Court. The appellants contend that the Board did not deal with the substantive issue as to who was Winchester’s employer on the date of his injury and that the Board completely ignored the principal issue of which employer was responsible for both benefits. After timely procedural steps below, this question is now before us for decision.

In the Board’s Opinion, this finding of fact is stated:

3) . plaintiff received an injury to his lower back and was temporarily totally disabled from July 30, 1974 to November 15, 1974. On November 15, 1974 he went back to work for defendant company at a different job where he made $112.50 per week. On March 9, 1975 he aggravated his injury when he mopped a floor and has not worked since.

Although the Board does not state precisely that Winchester was working for two different employers, it does distinguish between the two different injuries and labels the second injury as an aggravation of the first injury. The Board was also apprised of the fact that there were two different employers through the briefs submitted by all parties concerned. The Board decided therefore, based on the evidence presented, that appellant, the Fiscal Court, was solely liable for the payment of benefits to Winchester.

In the case of Brown v. Gregory and Workmen's Compensation Board, Ky., 398 S.W.2d 710, at page 711 (1966), the Court stated:

Appellant (employer) contends the Board failed to make sufficient findings of fact as required by KRS 342.275, specifically in not finding the amount of disability caused by trauma and the amount which resulted from a pre-existing condition. While the Board was remiss in not making specific affirmative findings of fact, it assessed appellant with full liability. Hence it is implicit in the award that no pre-existing condition, as that term is used in KRS 342.120, contributed to Gregory’s (employee) present disability. (Parenthetical inserts ours for clarification).

The Board’s finding that the second injury was an aggravation of the first injury was an implicit finding that the second injury did not result in any liability for the second employer, CETA. There is substantial medical evidence to support this finding of the Workmen’s Compensation Board. Therefore, the judgment of the trial court is affirmed.

All concur.


author: GANT, Judge.

text:
    James R. YOCOM, Commissioner of Labor and Custodian of the Special Fund, Appellant, v. Allie Mae HYLTON, widow of Hays Hylton, Deceased, Island Creek Coal Company, and Workmen’s Compensation Board, Appellees.
    Court of Appeals of Kentucky.
    Oct. 14, 1977.
    John Riehl, Jr., Asst. Counsel, Dept, of Labor, Louisville, Kenneth E. Hollis, Gen. Counsel, Dept, of Labor, Frankfort, for appellant.
    Harry R. Stamper, Lowe, Lowe & Stamper, William J. Baird, III, Baird & Baird, Pikeville, for appellees.
    Before GANT, VANCE and WILHOIT, JJ.
   GANT, Judge.

The sole issue on appeal is whether the presumption of dependency referred to in KRS 342.075(l)(a) with regard to a surviving spouse is conclusive or rebuttable.

Allie Mae Hylton, widow and dependent of Hays Hylton, filed her application seeking widow’s benefits on January 6, 1975, alleging that her husband died as a result of pneumoconiosis and a heart attack on October 11, 1974. Another application for dependency benefits was filed by the guardian of James Hays Hylton, the son of the decedent, alleging that his father died of pneumoconiosis and a heart attack.

The Board in its opinion and award of October 4, 1976, found that Hays Hylton died of a heart attack, that his wages were sufficient to justify the maximum award, and that he was survived by a dependent wife, the appellee, and a dependent son. The Board further found that the appellee was working at a hospital earning $2.10 per hour at the time of her husband’s death and had been so employed for approximately 11 years. From this evidence the Board determined that the appellee was 50% dependent upon the decedent. Of this 50% dependency, the Board apportioned 25% of the liability to the employer and the remaining 75% to the Special Fund.

The Pike Circuit Court increased the percentage of the appellee’s dependency upon her deceased husband to 100%, thus granting the appellee the sum of $55.80 per week rather than $27.90 per week as awarded by the Workmen’s Compensation Board. This appeal followed.

This controversy centers around KRS 342.075(l)(a) which provides in part:

The following persons shall be presumed to be wholly dependent upon a deceased employee:
(a) a surviving spouse upon a decedent whom the surviving spouse had not voluntarily abandoned at the time of the accident, or who having been abandoned by the decedent has not engaged in such conduct since his abandonment as would at common law constitute grounds justifying the abandonment of such wife by her husband or such husband by his wife.

Appellant submits that the abovemen-tioned provision creates a rebuttable presumption of dependency and that this presumption has been rebutted by having shown that the claimant was working and contributing to her own support at the time of decedent’s death. However, it is settled construction of the statute (KRS Section 4893, the predecessor to KRS 342.075) that the presumption of dependency and the cases to which it applies is conclusive upon the courts, as well as the Workmen’s Compensation Board. J. F. Hardymon Co. v. Kaze, 241 Ky. 252, 43 S.W.2d 678 (1931); Rockhouse Coal Co. v. Collins, 212 Ky. 137, 278 S.W. 540 (1925). The conclusive presumption of being “wholly” dependent cannot be defeated or otherwise contradicted by extraneous testimony in all cases where the dependent met the provisions of the section of the statute. Reynolds Metal Co. v. Glass, 302 Ky. 622, 195 S.W.2d 280 (1946). This Court has gone so far as to hold that the voluntarily abandoned wife of the deceased, from whom she had never been divorced, was conclusively presumed to be wholly dependent on him and entitled to compensation, even though she was not actually being supported by him at the time of his accidental death. Ritchie v. Katy Coal Co., 313 Ky. 310, 231 S.W.2d 57 (1950).

For the reasons stated above, the judgment of the Pike Circuit Court is affirmed.

All concur.


text:
    Goldia KIRK, Appellant, v. Betty HARMON, Appellee.
    Court of Appeals of Kentucky.
    Oct. 14, 1977.
    J. K. Wells, Wells, Porter & Schmitt, Paintsville, for appellant.

      John W. Kirk, John Kirk Law Offices, Inez, for appellee.
    Before MARTIN, C. J., and COOPER and HOWARD, JJ.
   HOWARD, Judge.

This is an appeal from the Martin Circuit Court which dismissed the complaint of plaintiff-appellant, Goldia Kirk, wherein she demanded that she be adjudged to be elected to the office of school board member, or in the alternative, that the election between her and defendant-appellee, Betty Harmon, be declared unfair and therefore set aside.

Plaintiff-appellant, Goldia Kirk (hereinafter referred to as Kirk) and defendant-appellee, Betty Harmon (hereinafter referred to as Harmon), were opposing candidates for election to the Board of Education of Martin County, District Four, in the general election held November 2, 1976. Harmon was declared the winner on the basis of a machine tabulation of 268 votes for Harmon and 264 votes for Kirk.

Four persons testified that they went to the polls on election day but were refused the right to vote because their names were not included on the list of voters for that precinct. These persons had been erroneously registered in another precinct because of clerical errors in the registration process. All four persons could have voted in the precinct in which they wanted to, had they visited the County Clerk’s Office on the date of the election and requested and received authorization from the election commission which was impanelled and present that date for the purpose of handling such occurrences. All four persons testified that they would have voted for Kirk.

Kirk argues that because these voters were denied the right to vote, Section 6 of the Kentucky Constitution, which provides that all elections be “free and equal”, was violated and therefore the election should be void.

The right to a recount or the right to contest an election and the procedure to be followed is purely statutory. Wilhoit v. Liles, 300 Ky. 564, 139 S.W.2d 851 (1945). KRS 120.065 provides that:

. If it appears from an inspection of the whole record that there has been such fraud, intimidation, bribery or violence in the conduct of the election that neither contestant nor contestee can be adjudged to have been fairly nominated, the court may adjudge that there has been no election, in which event the nomination shall be deemed vacant.

In Harrison v. Stroud, 129 Ky. 193, 110 S.W. 828 (1908), an election was voided based on the fact that approximately 20% of the voters were allowed to vote openly instead of by secret ballot as required by the Constitution of Kentucky. The court used strong language when it stated, at page 830, that “. . . transgressions of the election law which practically disfranchise enough votes offering to vote” render an election void. In Wells v. Wallace, Ky., 337 S.W.2d 18 (1959), the court found that no showing of intentional fraud, intimidation, bribery or violence was made, but voided an election based on the authority of Harrison v. Stroud, supra.

Kirk does not allege any fraud, intimidation, bribery or violence in the conduct of the election but rather alleges that because these four persons were not allowed to vote, the election should be set aside. In the instant case, however, these persons could have voted had they obtained authorization and certification from the election commission at the County Clerk’s Office. There were no transgressions amounting to disfranchising any persons, but rather clerical errors in the registration process which the voter, had he wished to, could have corrected and thereafter cast his vote.

There is no evidence in the record that a single person was unlawfully deprived of the right to east a vote for the candidate of his choice. There is no evidence which would authorize this court to deprive Harmon of the office to which she was elected. Stanley v. Goff, Ky., 324 S.W.2d 124 (1959). The judgment of the trial court is affirmed.

All concur.


author: HOGGE, Judge.

text:
    KENTUCKY CENTRAL LIFE INSURANCE COMPANY, Appellant, v. Charlie Mae WILLETT, Edna F. Willett and J. N. Whitsell, d/b/a J. N. Whitsell & Son, Appellees.
    Court of Appeals of Kentucky.
    Oct. 14, 1977.
    Merle C. Clark, Kincaid, Wilson, Schaef-fer & Hembree, Lexington, for appellant.
    J. Quentin Wesley, Wesley & Simpson, Ben B. Stockton, Jr., Sidney H. Hulette, Ruark & Hulette, Morganfield, for appel-lees.
    Before HOGGE, LESTER and HOWARD, JJ.
   HOGGE, Judge.

This is an appeal from a judgment in a suit filed by the appellant seeking a declaration of rights under a life insurance policy.

On September 15, 1968, during the marriage of the appellee, Charlie Mae Willett, to Paul L. Willett, an insurance policy on the life of Paul L. Willett was issued. Charlie Mae Willett was designated the primary beneficiary and the appellee, Edna F. Willett, mother of Paul L. Willett, was named as the contingent beneficiary.

Subsequent to the issuance of the life insurance policy, the marriage of Paul L. Willett and Charlie Mae Willett was dissolved. A property settlement agreement was entered and incorporated into the Decree of Dissolution of Marriage. However, neither the property settlement agreement nor the decree made reference to the aforementioned life insurance policy.

On February 16, 1976, Paul L. Willett died as a result of a gunshot wound inflicted during the course of a struggle. Elmyra Sue Johnson was tried and found guilty of reckless homicide in the death of Paul L. Willett. Thereafter, the appellant filed suit seeking a declaration of rights of the various claimants to the proceeds of the life insurance policy.

The trial court adjudged that the proceeds of the policy should be paid to Edna F. Willett, and further adjudged that the death was accidental so as to accrue to the beneficiary the rights under the double indemnity provisions of the policy.

First, the appellant contends that it was error for the trial court to hold that the divorce decree extinguished the ex-wife’s expectancy as the beneficiary in the decedent’s life insurance policy. The Court of Appeals has long held that the restoration statutes, KRS 403.060 and 403.065, compel that the interest of one spouse as the beneficiary of insurance on the life of the other is divested by divorce. BisseH v. Gentry, Ky., 403 S.W.2d 15 (1966).

However, those statutes have been repealed and are replaced by KRS 403.190. A comparison of the old and new statutes is necessary to determine whether this change has affected the law of this state. KRS 403.060(2) provided in part: “Upon final judgment of divorce . . . each party shall be restored all property . . .” (Emphasis ours.)

KRS 403.190(1) provides in part: “In a proceeding for dissolution of the marriage . . the court shall assign each spouse’s property to him.” (Emphasis ours.)

In construing KRS 403.060 and KRS 403.-065 in this regard, the court has, in effect, said that this contract right, or whatever, is embraced in the word “property” as used therein. In Warren v. Spurlock’s Adm’r, 292 Ky. 668, 167 S.W.2d 858 (1943) the court said:

. Our construction of the statutes is predicated upon the ground that the wife was named as beneficiary in consideration of the fact that she was the insured’s wife, that is, her interest was “obtained, directly or indirectly, from or through the other, during marriage, in consideration or by reason thereof,” as stated in Section 425 of the Code. That right — whatever its nature or degree— we have consistently held to be embraced by the term “property” as used in those statutes. The legislature has accepted this construction for 30 years. It must be regarded as the equivalent of a specific expression therein so far as contract rights acquired under it are concerned. The policy involved in this case was issued under that interpretation and it became in effect a part of it. [Emphasis ours.]

In KRS 403.190(1) the word property again appears, “. . . the court shall assign each spouse’s property to him.” Because of the construction placed by the court on “property”, and because the legislature continued the use of the word in the new statute without any limitations, we cannot find any intent on the part of the legislation to change the law in this regard.

Neither do we find that the change from the word “restore” to the word “assign” has had the effect of changing the well accepted rule that one spouse’s interest as beneficiary of the insurance on the life of the other spouse is terminated by their divorce. We do not assign any significance to whatever slight variation there may be in the meaning of those two words.

We accordingly hold that KRS 403.-190(1) does not alter or change the rule that divorce bars the spouse’s recovery as a designated beneficiary of life insurance policies on the other’s life. This holding is in accord with a very recent decision of this court on this same question, Denton v. Travelers Insurance Company, Ky.App., 555 S.W.2d 825 (1977) wherein it is stated, “We find no meaningful change in the effect of the new law.”

Accordingly, we are of the opinion that the dissolution of the marriage of Paul L. Willett and Charlie Mae Willett divested Charlie Mae Willett of any interest she had as beneficiary of the life insurance policy on her former husband.

Next, the appellant alleges that it was error for the trial court to conclude that the death of Paul L. Willett was the result of accidental means, as used within the meaning of the insurance policy, and, therefore, the double indemnity provision therein applied.

The general rule is that an effect is not accidental if the consequence of an act can be reasonably anticipated, or is the natural and probable consequence, or if the consequence is not unusual. National Life & Accident Insurance Company v. Jones, 260 Ky. 404, 86 S.W.2d 139 (1935).

In this case, the decedent and Elmyra Sue Johnson were seated in the front seat of an automobile. They began arguing, and the decedent started slapping his assailant. He then picked the gun off the seat and waived it around then laid it back on the seat. Elmyra Sue Johnson then picked up the gun and pointed it at the decedent. He then grabbed for the gun and in the struggle it discharged, killing him.

The question thus before us is whether the decedent, in grabbing for and struggling over the gun, should reasonably have anticipated that the gun may have discharged and that he may have been injured; was his injury the natural and probable consequence of his act; was it unusual that he was so injured? In our view, the decedent demonstrated a reckless disregard for an obvious danger and thereby contributed to his own fatal injury, and that same was not accidental.

Accordingly, that portion of the judgment holding that the rights of Charlie Mae Willett as beneficiary on the life insurance policy of her former spouse were extinguished by reason of their divorce is affirmed. That portion of judgment holding that the decedent’s death was the result of accidental means, is hereby reversed. This case is remanded for further proceedings consistent with this opinion.

All concur.