author: HOWARD, Judge.

text:
    Eugene N. FRANCIS, Respondent, v. NEW AMSTERDAM CASUALTY COMPANY, a Corporation, Appellant.
    No. 24424.
    Kansas City Court of Appeals. Missouri.
    Oct. 3, 1966.
    Karl F. Schmidt, Kansas City, Ronald Reed, St. Joseph, Morrison, Hecker, Cozad & Morrison, Kansas City, Reed & Reed, St. Joseph, of counsel, for appellant.
    R. A. Brown, St. Joseph, Brown, Douglas & Brown, St. Joseph, of counsel, for respondent.
   HOWARD, Judge.

This is a suit on a bond given pursuant to the requirements of the Packers and Stockyards Act, 1921, as amended, 7 U.S.C.A. § 181 et seq., and particularly Section 204 and the rules and regulations promulgated pursuant thereto by the United States Secretary of Agriculture. See Sections 201.29 and 201.31 of these regulations. Trial without a jury in the Circuit Court of Buchanan County, Missouri, resulted in a judgment for plaintiff in the sum of $8,568.-09. This court thus has jurisdiction of this appeal. We shall refer to the parties as they appeared below.

The principal in the bond was George Umphlet. He was in business at the St. Joseph Stockyards, both dealing for himself and acting as a broker or clearing agency for the dealings of others. He did not buy or sell for others on a commission basis, but bought and sold only for himself, principally, if not exclusively, sheep. In his capacity as a clearing agency for other dealers he paid for all of the livestock purchased by them at the St. Joseph Stockyards. He also received the proceeds of all sales made by these other dealers. For his services he charged a fee of fifty cents per head purchased; no fee was charged on sales.

The dealers who cleared through Umph-let, did not buy or sell for others on a commission basis. They only bought and sold on their own account, and sought to buy at a low price and sell at a higher price, thus making a profit on the spread between the price at which the cattle were bought and sold. The dealers with whom we are concerned herein dealt only in cattle and they were all successful dealers, making a profit.

The St. Joseph Stockyards was a posted stockyard under the Packers and Stockyards Act, 1921, as amended. It was thus required to comply with all the provisions of such act, and all dealers and market agencies operating at the stockyards were required to give bond. If the dealers did not give bond themselves, it was necessary that they clear their transactions through some one else who had given a bond. Umphlet gave such a bond, which was issued by the defendant, New Amsterdam Casualty Company, June 14, 1961. On the same date a rider was issued naming the dealers who were to clear their dealings through him. It is the claim of eight of these dealers against Umphlet, for which plaintiff brought this suit. Umphlet required each dealer to deposit'a certain amount of money with him (Umphlet) before the dealer was permitted to clear his trading through Umphlet. This requirement was roughly $20.00 for each head bought by the dealer, although it might be less for a dealer who was buying Stocker and feeder cattle, or calves, or light weight cattle. This deposit is referred to as “margin money”. Thus if the dealer desired to purchase up to ten head of cattle at a time, he must have on deposit with Umphlet at least $200.00 in margin money. If he desired to buy a greater number of cattle he was required to increase his deposit of margin money.

In his operations Umphlet deposited all his money in one bank account at the Drovers and Merchants Bank in St. Joseph, Missouri. This included Umphlet’s own personal funds and the margin money deposited with him by the various dealers. When any dealer bought cattle, Umphlet paid for them with a check drawn on this one bank account. When cattle were sold, Umphlet received the proceeds, which went into this one bank account. From this bank account, Umphlet also paid expense items incurred by the various dealers in connection with their trading. He also paid personal expenses of the various dealers, when requested to do so. The dealers also drew cash from Umphlet. One dealer witness expressed it as “just like pay day.” Mr. Umphlet maintained a line of credit at the Drovers and Merchants Bank. When the total purchases of Umphlet and the dealers required more money than he had in this one bank account, he would borrow sufficient money from the bank to cover the cost of the cattle purchased, and when the cattle were sold, and the proceeds received by Umphlet, the loan would be paid off. This borrowing and paying off loans was a daily occurrence. Shortly before closing time each day, the bank would advise Umphlet of his position, and he would borrow whatever amount of money was necessary.

Umphlet kept several different books of account. One ledger showed the margin account of each dealer, another showed in detail the trading account of each dealer. For each transaction this showed the number of head of cattle purchased, from whom purchased, the weight of the animals, the price at which they were purchased, and the total amount of the purchase. It also showed the expenses for brokerage, feed, yardage, commissions and incidentals and cash withdrawn from the account by the dealer. On the other side of this ledger was shown the number of head of cattle sold, to whom sold, the weight of the animals sold, the unit price and the gross price of the sale. This ledger also contained a running account showing the number of animals bought or sold, the number on hand, and a running balance of the dealer’s trading account. If the dealer had a loss in his tradings, he would be required to transfer credit from his margin account to his trading account, to make up such loss. If, on the other hand, the dealer showed a profit, and desired to expand his trading operations, he could transfer credit from his trading account to his margin account and thereby be qualified to purchase a larger number of animals and clear such purchase through Umphlet. Likewise, if his margin account became depleted, or if he desired to increase the scope of his operations, and did not have profit in his trading account, he would be required to deposit additional cash with Mr. Umphlet to maintain or increase his margin account.

Late in January, 1963, the bank refused to extend further credit to Umphlet and checks on his one bank account for the purchase of cattle, to the amount of several thousand dollars, were dishonored. This resulted in notice and cancellation of his bond, effective about February 18, 1963. When the checks were dishonored, Umph-let requested the dealers clearing through him to sell all the cattle they had on hand. This was done in the next three trading days and all amounts due for the purchase of cattle were paid. This hurried sale of all cattle on hand resulted in a sale on a disadvantageous market. When the books were closed out, each dealer showed a debit balance in his trading account, which in each instance was less than the amount standing to his credit in his margin account. This debit in the trading account was setoff against the credit in the margin account and each dealer has money owing to him in the amount of the final credit balance in his margin account. Umphlet was unable to pay these balances in the various margin accounts, and although demand therefor was made by each dealer, these amounts have not been paid. This suit was brought by the plaintiff Francis to collect the amounts thus due to the various dealers as specifically authorized by both the bond itself and the regulations.

The bond is conditioned, as to the activities of Umphlet as a clearing agency, as follows:

“(4) If the said Principal, acting in the capacity of broker or clearing agency, and thereby being responsible for the financial obligations of other registrants, viz : [names inserted by rider] shall (a) pay, when due, to the person or persons entitled thereto the purchase price for all live stock purchased by such other registrants ; (b) safely keep and properly disburse all funds coming into the hands of said Principal for the purpose of making such purchases and (c) safely keep, and faithfully and promptly account for and pay to the owners or their duly authorized agents the proceeds of sales of all live stock received for sale on a commission basis by such other registrants for whom said Principal acts as broker or clearing agency;”

Umphlet admitted that he owed the dealers the amounts shown on his books and was unable to pay them. The defendant surety refused to pay and on this appeal contends that it is not liable to the plaintiff, who sues on behalf of these dealers, for three reasons. It first contends that the dealers are not within the class protected by the bond, and that therefore any obligation of Umphlet to the dealers is not covered by the bond. It argues that the purpose of the Packers and Stockyards Act was to protect livestock producers and other third persons from packers and others who operated at the stockyards and thus promote the general welfare and protect the flow of livestock in commerce. It further contends that it was not the purpose of the act to protect the dealers from defalcation by Umphlet, and that the bond can be no broader than this purpose of the act under which the bond was required. We can not agree with these contentions.

Undoubtedly the broad purposes of the act were to promote the general welfare by protecting the flow of livestock ⅛ commerce, and those interested therein, from the discriminatory and monopolistic •practices found to have existed at the stockyards throughout the country. How-fever, nothing in the act limits its protection or the application of its provisions to those who are strangers to the stockyards or to those who are producers of livestock. In support of its contentions the defendant cites general statements found in Smeed v. Carpenter, CA9, 274 F.2d 414 and United States v. Wehrheim, CA8, 332 F.2d 469, that the purpose of the act -was to secure the free and unburdened flow of livestock from the producer to the -consumer, to protect livestock producers •and the public and thus promote the general -welfare. We find no fault with these general statements or with other similar statements found in such cases as Houfburg v. Kansas City Stock Yards Co. of Maine, Mo., 283 S.W.2d 539 and Bowles v. Albert Glauser Inc., D.C.E.D.Mo., 61 F.Supp. 428, where the court emphasized the purpose of the act to remedy abuses of unfair, monopolistic and discriminatory practices and to maintain open and free competition. All of these and other statements of purpose are couched in very general language and none of them purport to be definitive or all inclusive. In each case the court referred only to that aspect of the purposes underlying this statutory enactment which was pertinent to the fact situation before it. No case has been cited by counsel or found by us which purports to limit the scope of the act or the bonds given thereunder, so as to exclude these dealers from the obligations, benefits and protection thereof. The cases heretofore cited certainly do not do so and do not even tend in that direction. The act clearly governs the conduct of dealers and market agencies in their dealings with each other as well as in their dealings with livestock producers and members of the general public and we have no basis for excluding these dealers from the class of persons protected by the bond given pursuant to the requirement of the act and the regulations.

Furthermore, the contention of defendant that the coverage of the bond must be limited to the purposes of the act, regardless of the language used in the bond, is not persuasive. The Texas Court of Civil Appeals in Fireman’s Fund Insurance Company v. Abilene Livestock Auction Company, 391 S.W.2d 147, specifically decided to the contrary. This case pointed out the general principle that while the bond given pursuant to the act must be as broad as the act requires, the coverage granted by the language used in the bond may be broader than that required in the statute, and that the liability of the surety is as broad as the obligation created by the language used.

Thus we are left to a consideration of the language contained in the bond here in question to determine whether or not the dealers, whose claims are here to be determined, are covered by the provisions of the bond. As to the activities of Umphlet in operating as a clearing agency or broker, the bond covers payment of the purchase price for all livestock “purchased by such other registrants”. This last quoted language refers specifically to these dealers who are named in the rider. The bond is then conditioned that the principal shall “safely keep and properly disburse all funds coming into the hands of said principal for the purpose of making such purchases.” The words we have italicized clearly refer to purchases made by such other registrants, i. e., the dealers here being considered. Our question, therefore, is whether or not the claims of these registrants is for money which came into the hands of the principal, Umphlet, for the purpose of paying for purchases made by these dealers. We can only conclude that it is. The deposit of the margin money with Umphlet was an absolute prerequisite to such purchases. The dealer could not buy cattle at the St. Joseph Stockyards and have his purchases cleared through Umphlet unless and until he had deposited such margin money with Umphlet. Furthermore, the number of cattle that any dealer could buy was specifically limited by the amount of margin money on deposit with Umphlet. What did Umphlet do with this money? He put it in his one and only bank account. He paid for all purchases of cattle out of this bank account. The bank account was often completely depleted and it was necessary to borrow money to replenish it. As to the margin money deposited by any one dealer, it was paid out for the purchase of cattle, came back into the hands of Umphlet, and into his bank account, when such cattle were sold, and was paid out again for the next purchase of cattle, many times during the period covered by this bond. This is true for all the margin money in the aggregate as well as for the margin money of any one dealer, individually. Thus we can only conclude that the money was given to Umphlet for the purpose of making such purchases and that the money was in fact used by Umphlet for this purpose, time and time again.

We reach this conclusion after giving full consideration to the matter of the payment of expenses, etc., as urged by defendant. In addition to paying the purchase price of cattle, Umphlet also paid expenses incident to the business operations of the dealers. He also, from time to time, paid personal expenses of the individual dealers, and the dealers regularly drew down cash from their trading accounts. These expenses were recorded in detail in the ledger containing the trading account of each dealer. However, that did not affect the dealer’s margin account. During the time here in question each dealer drew in cash from the profits in his trading account, several times the amount of margin he had on deposit. We must not let the accounting entries obscure the facts as to what was actually done with the money. The margin money was deposited with Umphlet, as a condition precedent to the dealer being able to trade at the St. Joseph Stockyards and clear his dealings through Umphlet. Thus, when the dealer bought cattle it was, as to him, a partly, cash and partly credit transaction. The purchase price of the cattle was paid for with his margin money, as far as it would go, and the balance was loaned to the dealer by Umphlet. Umphlet received repayment of his loan when the cattle were sold, and, likewise, the margin money came back to Umphlet’s hands, plus any profit or less any loss.

Counsel has cited no case from Missouri construing bonds given under the Packers and Stockyards Act and our own research has revealed none. No cases from other jurisdictions have been found dealing with the factual situation here presented. However, there are cases from other jurisdictions construing other conditions of bonds given under the Packers and Stockyards Act, and they do throw some light on our problem. In Smeed v. Carpenter, CA9, 274 F.2d 414, the defendant purchased cattle at a market covered by the act. The market paid the seller of the cattle out of a separate fund maintained for that purpose and thereafter found that the defendant was unable to pay for the cattle he had purchased. It was held that the surety on the defendant’s dealers’ bond was liable for the price of the cattle. It should be noted that this liability on the bond was not to the producer or some other third party, but to the market agency. In Fireman’s Fund Insurance Co. v. Abilene Livestock Auction Company, Tex.Civ. App., 391 S.W.2d 147, a bonded dealer, registered at one stockyard, purchased cattle at another stockyard, which was also under the Packer and Stockyard Act. He failed to pay for the cattle he purchased. The court held that the surety on the dealer’s bond was liable for the price of the cattle so purchased, even though the purchase was made at a stockyard other than the one at which the dealer was registered. A similar result was reached by the Federal District Court for the Eastern District of Arkansas in Lewis v. Goldsborough, 234 F.Supp. 524. Here the dealer, who was registered at one stockyard, bought cattle at another stockyard, and gave his personal check for the purchase price. The check was dishonored and it was held that the surety on the bond of the broker through whom he cleared his transactions at the stockyards where he was registered, was liable for his purchase at another stockyard, even though the dealer did not attempt to clear such purchase through the broker. See also Hartford Accident and Indemnity Company v. Baldwin, CA8, 262 F.2d 202. These cases disclose that the courts which have considered the provisions of these stockyard bonds, have given a liberal construction thereto in favor of the persons having claims against the bond. Since we are here dealing with a compensated surety, this liberal construction is in conformity with the law of Missouri that the provisions of the bond will be construed, where construction is necessary, against the surety and in favor of the claimant. We believe that in conformity with the principles laid down in the cases heretofore cited that the dealers who are the actual claimants herein, are within the class protected by the bond and that their margin money was given to Umphlet for the purpose of purchasing cattle.

What we have already said largely disposes of defendant’s second contention, which is that the margin money was given to Umphlet as security to protect him against loss occasioned by a drop in the market and was not given for the purpose of purchasing cattle. The two cases cited by defendant in support of this contention considered the problem of whether a margin account represented an actual, bona fide buy and sell transaction or whether it was a gambling transaction wherein the margin money represented a wager that the market would go up or down. In each of these cases, the court held that the transaction represented bona fide purchases and sales and was not a gambling transaction. In the course of these opinions it was pointed out that the money deposited by the customer served to protect the broker from losses occasioned by a fall of the market, and was not a wager. These cases have no applicability to our problem. It is true that the margin money deposited with Umphlet did protect him from losses resulting from a drop in the market. However, that does not change the fact that the money was given and used for the purchase of cattle. This may be compared to the purchase of a house by means of a cash down payment and a mortgage securing a loan for the balance. If the mortgage must be foreclosed and the house sold to repay the loan, the down payment serves to secure the seller against a drop in the real estate market. However, this does not alter the fact that the money given as the down payment was used for the purchase of the house.

Lastly, defendant contends that much of the margin money for which plaintiff secured judgment below, was deposited with Umphlet prior to the execution of the bond here in question. This bond was issued June 14, 1961. Umphlet had been in business and had been acting as a clearing agency for these dealers for a considerable time prior to this date. Before this bond was issued, Umphlet had a bond written by the Hartford Company. Defendant contends that it can not be liable under this bond for any money deposited with Umphlet prior to the effective date of its bond. It cites no cases which are decisive on this point. However, it was early settled in Missouri law' that where there are successive bonds with different sureties on each, liability attaches to the surety on the bond which was in force at the time of the defalcation. See State, to Use of Smith v. Paul’s Executor, 21 Mo. 51; State, to Use of Southern Bank of St. Louis v. Atherton, 40 Mo. [209] 210; State, to Use of Pace v. Mc-Cormack, 50 Mo. 568. This comports with the general principles of the law of surety-ship as set out in 72 C.J.S. Principal and Surety § 110, page 590. It was specifically pointed out in the case of State, to Use of Blacker v. O’Neill, 114 Mo.App. 611, 90 S.W. 410, that in instances of successive bonds, liability did not attach when the funds came into the hands of the principal, but, liability was to be imposed upon the surety on the bond which was in force at the time of the defalcation.

Here the evidence shows that the various dealers made deposits of margin money, from time to time, both prior to and after the effective date of the bond upon which defendant is surety. Umphlet still had and was using all of the margin money shown in the margin accounts at the time this bond came into force. There had been no defalcation prior to the effective date of this bond. Each of the dealer witnesses testified that there was no failure on the part of Umphlet prior to January, 1963. Umphlet testified that everything was all right at the time of the execution of this bond and prior thereto. It was only when the bank refused to extend further credit to Umphlet and the business had to be closed out, that defalcation was made. It as only then that Umphlet failed to return the money in the margin accounts to the individual dealers. We, therefore, conclude that Umphlet’s defalcation occurred at a time when the bond on which defendant was surety, was in force.

From the foregoing it follows that the margin money of the various dealers was given to Umphlet for the purpose of making purchases of cattle by the dealers and that Umphlet failed to safely keep and properly disburse such funds; that, consequently the condition of the bond has been breached and defendant is liable therefor.

The judgment of the trial court in favor of plaintiff is affirmed.

All concur.


source: Caselaw Access Project

author: BLAIR, Judge.

license: Public Domain

text:
    John W. FOOTE, Respondent, v. Betty J. THOMPSON, Appellant.
    No. 24411.
    Kansas City Court of Appeals. Missouri.
    Oct. 4, 1966.

      Joseph A. Sherman, Deacy & Deacy, Kansas City, for appellant.
    Allan R. Browne, Ennis, Browne & Martin, Kansas City, for respondent.
   BLAIR, Judge.

A collision in the intersection of Guinotte Street and Park Avenue, in Kansas City, between an International truck operated by plaintiff, John W. Foote, and a Chevrolet automobile operated by defendant, Betty J. Thompson, gave rise to an action by plaintiff against defendant for personal injuries. Plaintiff submitted his case to the jury on humanitarian negligence and was awarded a verdict and judgment for $2,-000.00. Defendant’s motion for a new trial was overruled and she appeals. The rulings we now proceed to make will disclose that the questions presented by this appeal require no recital of the circumstances attending the collision or of any act or omission of either party which may have been responsible for it.

At plaintiff’s request, the trial court gave the jury the following instruction:

“INSTRUCTION NO. 3
Your verdict must be for the plaintiff, whether or not plaintiff was negligent, if you believe:
FIRST, plaintiff was in a position of imminent danger of being injured and was injured; and,
SECOND, defendant, by using the highest degree of care should have known of such position of imminent danger; and,
THIRD, at the moment when defendant first could have known of such position of imminent danger, defendant still had enough time so that by using the means available to defendant and with reasonable safety to defendant and all others, and by using the highest degree of care, defendant could have avoided injury to the plaintiff by either slackening her speed and swerving or stopping; and,
FOURTH, defendant negligently failed to so slacken defendant’s speed and swerve, or stop; and,
FIFTH, plaintiff’s damage directly resulted therefrom.” (Emphasis supplied.)

The challenges to this instruction are two-in number. The first is that the instruction, instead of employing the emphasized words “position of imminent danger”, should have employed the words “position of immediate danger". Defendant argues that to this extent the instruction departs from MAI N^>. 17.15, applicable to plaintiff’s case, in violation of Civil Rule 70.01 (b) (c), V.A.M.R., which is as follows:

“(b) Whenever Missouri Approved Instructions contains an instruction applicable in a particular case which the appropriate party requests or the court decides to submit, such instruction shall be given to the exclusion of any other on the same subject.
“(c) The giving of an instruction in violation of the provisions of this rule shall constitute error, its prejudicial effect to be judicially determined.”

MAI Instruction No. 17.15 does indeed employ the words “position of immediate danger” and plaintiff’s Instruction No. 3, employing instead the words “position of imminent danger”, does differ from it but only in this single respect. Our duty then is to determine whether the employment in plaintiff’s Instruction No. 3 of the words “position of imminent danger”, rather than the words “position of immediate danger”, even though this is error by force of Civil Rule 70.01(b) (c), was actually error prejudicial to the substantial rights of defendant. Civil Rule 70.01(c), declaring the “giving of an instruction in violation of the provisions of this rule shall constitute error” is not intended to be an arbitrary and inflexible command to courts to pronounce-every violation departing from applicable: MAI instructions reversible error. Such a. construction would obviously lead to absurd results so easily imaginable that it is needless for us to develop or multiply any of them. The violation must be prejudicial.. Is the violation here prejudicial?

Long ago our appellate courts began defining “imminent” danger or peril as “immediate” danger or peril when employed in negligence instructions. 32 Mo.Digest,. Words and Phrases, pp. 300, 302, and decisions cited. Both words have always been, held to be ordinary English words whose meaning is accurately and easily understood by juries of ordinarily intelligent laymen “without further definition”. Newman v. St. Louis Public Service Co., Mo., 244 S.W.2d 45, 48; Wilkerson v. Smith, Mo.App., 366 S.W.2d 511, 514; Welch v. McNeely, Mo., 269 S.W.2d 871, 876; Lafferty v. Wattle, Mo.App. 349 S.W.2d 519, 529; Henrickson v. Resnik, Mo.App., 390 S.W.2d 610, 618. Invariably our appellate courts have declared the words “imminent” and “immediate” to be synonymous words. Teague v. Plaza Express Co., 356 Mo. 1186, 205 S.W.2d 563, 566; Loyd v. Moore, Mo.App., 390 S.W.2d 951, 955; Lane v. Wilson, Mo.App., 390 S.W.2d 943, 947; Burks v. Wilson, Mo.App., 356 S.W.2d 121, 128; Vol. 22 Mo.Digest, Negligence, Our appellate courts still do. Calvert v. Super Propane Corporation, Mo. (1966) 400 S.W.2d 133, 140.

Holding in view the identical meaning ascribed to these words by our appellate courts, we cannot possibly rule that the substitution in plaintiff’s Instruction No. 3 of the word “imminent” for its legally identical twin “immediate” prejudiced the defendant by any measure. This challenge to this instruction is without merit.

The second challenge to plaintiff’s Instruction No. 3 is that it was “further erroneous in that it was in direct conflict with the defendant’s Instruction No. 7, which follows the approved form of converse instructions found in MAI 29.06(6), and utilizes the phrase 'position of immediate danger’. Thus, the two instructions submitted two different places of danger to be considered by the jury in determining liability”. In view of our ruling on the first challenge, we must rule that the plaintiff’s Instruction No. 3 and defendant’s Instruction No. 7, although one used the word “imminent” and the other the word “immediate”, submitted the same place of danger to be considered by the jury in determining liability and not different places. Dixon v. General Grocery Company, Mo., 293 S.W.2d 415, 421, cited by defendant, is of no relevance to what we are presently deciding. We have considered all authorities adduced by defendant. None persuades. Independent research develops nothing to support her. The second challenge is without merit.

Plaintiff’s Instruction No. 4 is also the subject of two challenges. It reads as follows:

“INSTRUCTION NO. 4
If you find the issues in favor of the Plaintiff, then you must award the plaintiff such sum as you believe will fairly and justly compensate the plaintiff for any injuries and damages you believe the plaintiff sustained and is reasonably certain to sustain in the future, as a direct result of the occurrence mentioned in the evidence.” (Emphasis supplied).

The first challenge is that Instruction No. 4 is erroneous due to the addition of the emphasized words “injuries and” which are not included in MAI No. 4.01 prescribed for use in actions for personal injuries and property damage. It is true that applicable MAI No. 4.01 employs only the word “damages” and not the emphasized words and to this extent plaintiff’s Instruction No. 4 violates Civil Rule 70.01(b) (c) supra, and is erroneous. As we have noticed, however, this error, standing alone, is not justification for reversal unless it prejudicially affected the substantial rights of the defendant.

The only suggestions defendant puts forward to convince that plaintiff’s Instruction No. 4 is of a prejudicial quality are embraced in its second challenge which reads: “Plaintiff’s Respondent’s instruction No. 4 is further erroneous by using the phrase ‘injuries and damages’. These words in combination become argumentative, confusing and suggest to the jury an award for double damages would be permissible and further permits the jury to speculate and guess as to the basis for an award to the plaintiff”.

The propriety of a questioned instruction must be considered in the light of the evidence and issues to which it relates. Jurgens v. Thompson, 350 Mo. 914, 169 S.W.2d 353, 357; Hold v. Terminal R. R. Ass’n of St. Louis, 356 Mo. 412, 201 S.W.2d 958, 963; Cantwell v. Cremins, 347 Mo. 836, 149 S.W.2d 343, 344; 27 Mo.Digest, Trial, ^285. The plaintiff’s petition alleged personal injuries only and prayed for nothing else. No suggestion is made by the defendant in her brief that any evidence disclosed any damages due plaintiff other than damages for his personal injuries. We have studied this record from end to end and in the whole of it we have discovered no slightest intimation that anyone participating in the trial suggested that plaintiff was claiming anything except an award for his personal injuries. No suggestion was made by anyone that plaintiff claimed any damages for the truck he was driving. No detailed description was given by any witness regarding the damages to either of the two colliding vehicles. No mention was made of what it would cost to repair either vehicle or of what might be the diminution in its market value following the collision. All participating in the trial agreed that plaintiff did not even own the truck he was driving and that it was owned by his employer who was not a party to the case. The opening statements and the arguments to the jury are not in the record, but we believe they would be if plaintiff had made any suggestion that the jury should award him any sum for anything except his personal injuries. Who can argue with any face or force that we are not justified in assuming that the evidence and issues were directed at no other damages than personal injuries? We make this assumption.

Instructions to juries must he read as an entirety and in combination, and we must look to all the instructions to ascertain if a jury composed of ordinarily intelligent laymen, reading all the instructions together, would be misled by plaintiff’s Instruction No. 4 in any of the respects suggested by the defendant. Machens v. Machens, Mo., 263 S.W.2d 724, 732; Bidleman v. Morrison Motor Freight, Mo.App., 273 S.W.2d 745, 750; McKeon v. Citizens’ Ry. Co., 43 Mo. 405, 407; 27 Mo.Digest, Trial, ®=>295(1), Raymond, Missouri Instructions, Vol. 1, Section 209. The trial court gave Instruction No. 8 (and no one asserts it is objectionable) which was prefaced by the customary information that nine or more jurors could return a verdict for either party; that a unanimous verdict needed only the signature of the foreman; and that a verdict by nine or more, and less than twelve, needed the signature of all jurors agreeing. In the same instruction, forms for verdict for both plaintiff and defendant were set forth. The form for a verdict for the plaintiff was as follows:

“If all of you agree upon a verdict, for plaintiff, it may be in the following form:
‘We, the jury, find the issues in favor of the plaintiff and assess plaintiff damages as follows:
For personal injuries $-
(here insert the amount or if none write the word “none”)
-Foreman.’ ”
After deliberation, the jury returned the following verdict: “We the jury find the issues in favor of the plaintiff and assess plaintiff damages as follows
for personal injuries $2000.00.
Foreman
Howard C. Sanders.”

Reading Instruction No. 8 and the form for verdict for the plaintiff it submitted, the plaintiff’s Instruction No. 4, as well as the verdict actually returned, we discover nothing in this combination to support defendant’s theory that plaintiff’s Instruction No. 4 suggested an award for double damages or that the jury could engage in speculation and guesswork regarding the basis for that award. We are convinced on this whole record, and by these instructions, and by the verdict, that a jury of ordinarily intelligent laymen would regard the words “injuries and damages” in plaintiff’s Instruction No. 4 as being in apposition to each other and synonymous and not as suggestive of two different awards, and that the jury in this case did so. The only ver- diet the jury was told it could return for plaintiff was one exclusively and expressly for personal injuries and nothing else. The verdict it did return was altogether responsive and was exclusively and expressly for personal injuries and nothing else. To adopt defendant’s suggestions that plaintiff’s Instruction No. 4 on this record misled the jury in any of the respects she claims, would he substituting shadow for substance, illusion for reality. Obviously there is no merit in either of the challenges to Instruction No. 4.

Even though plaintiff’s Instructions numbered 3 and 4 are erroneous to the extent we have pointed out, we discover no “prejudicial effect” in them, Civil Rule 70.01(b) (c), and no error in them “materially affecting the merits of the action”, Civil Rule 83.13 (b), and therefore we must affirm the judgment.

It is so ordered.

All concur.


author: HOGAN, Judge.

text:
    PUBLIC WATER SUPPLY DISTRICT OF PEMISCOT COUNTY NO. 1, a public corporation, Plaintiff-Appellant, v. Zula FOWLKES, Defendant-Respondent.
    No. 8500.
    Springfield Court of Appeals. Missouri.
    Oct. 11, 1966.

      James E. Reeves, Ward & Reeves, Ca-ruthersville, for plaintiff-appellant.
    Wendell W. Crow, Elbert L. Ford, Ford, Ford & Crow, Kennett, for defendant-respondent.
   HOGAN, Judge.

This appeal is taken from an order refusing specific performance of an alleged agreement by the defendant to convey certain interests in land to the plaintiff, upon plaintiff’s payment of the sum of $2,000.00 and the performance of certain other acts for the defendant’s benefit. The plaintiff is a county Public Water Supply District organized under and governed by the provisions of Sections 247.010 to 247.220. The defendant is an individual landowner upon whose property the plaintiff has undertaken to locate a well, a pipeline and certain auxiliary installations necessary to the sale and distribution of water. The case, is, in reality, an adjunct to a condemnation action, the course of which must be incidentally noted. Neither the corporate existence of the District nor its authority to exercise the power of eminent domain is in issue in this court.

At some time prior to April 27, 1964, the plaintiff Water District decided to locate a well and a pipeline on the defendant’s land. Initially, and apparently to avoid the necessity of condemnation, the District attempted to purchase the land and easement it needed by direct negotiation with Mrs. Fowlkes, but she refused to sell. The record evidence is that she was offered the sum of $2,000.00 at “a meeting up there at the bank one night.” Only a few, sparse details of this negotiation appear in the record; it does appear that defendant was told the District could condemn the necessary property rights, that they would pay her $2,000.00 for them, and that she refused. In any event, on April 27, 1964, the District declared it necessary to acquire the defendant’s property rights for its public purposes and authorized condemnation.

Shortly thereafter, the District filed a petition in condemnation in the circuit court. Among other things, the District pleaded its authority to exercise the power if eminent domain under the provisions of Section 247.050(7); that it was necessary for the plaintiff to acquire a one-acre tract (particularly described) belonging to the defendant “for the purpose of constructing, erecting and maintaining a water well, treatment house and other buildings”; and that an easement across an adjoining tract (also particularly described) “[was] needed and necessary for the purpose of * * * laying * * * a water pipe line.” The petition specifically recited that the plaintiff “cannot agree with the defendant owners * * * upon the proper compensation, if any, to be paid therefor * * * Though the defendant testified at one point that she was the sole record owner of the property involved, the plaintiff joined Mrs. Fowlkes’ husband, and later her tenant, one Billy Joe Sides, as defendants in the action. The defendant promptly obtained counsel, who filed a timely answer raising a number of defenses. The cause was set for trial on May 20, 1964.

Shortly after the defendant’s answer was filed, her attorney and counsel for the District had a telephone conversation “concerning primarily the possibility of working out a compromise settlement.” On May 5, 1964, Mrs. Fowlkes’ attorney wrote her a letter, “detailing and explaining” the proposed compromise; the substance of the letter was that the District was “to relocate the well on the east side of the drainage ditch that came out by her home, a payment of $2,000.00 to be made to her, and the district was to supply her without charge a water line to her home.” According to this attorney’s testimony, on “the Saturday night before May 21” (May 16), Mrs. Fowlkes called late in the evening, stating that she was dissatisfied with the District’s taking any of her property, but authorizing her attorney “to go ahead with [the compromise].” This attorney then advised counsel for the District of his discussions with Mrs. Fowlkes.

On May 20, the District’s Board of Directors held a meeting, the minutes of which recite that “ * * * Mr. and Mrs. Fowlkes [have] submitted the following proposition of settlement to the Board; that Mr. and Mrs. Fowlkes would withdraw their objections to the condemnation suit and convey [our emphasis] the one acre tract of land and easement described in the condemnation suit * * * ” upon the conditions we have described. The minutes further recite that the following resolution was adopted:

“RESOLVED, that the District compromise and settle its condemnation suit against Zula Fowlkes and B. M. Fowlkes, upon the following terms and conditions; the District shall acquire the property rights described in the Resolution authorizing the condemnation suit duly adopted by the Board on April 27, 1964, the District shall pay to Mr. and Mrs. Fowlkes the sum of Two Thousand Dollars ($2,000.00), the location of the acre tract of land shall be on the east side of the ditch and the District shall lay a water line to the home of Mr. and Mrs. Fowlkes, said line to be of the same size and type generally in use by other water users.”

On May 22, 1964, counsel for the plaintiff addressed a letter to Mrs. Fowlkes’ attorney, a copy of which was received in evidence. The letter states that on behalf of the District, there are enclosed 1) a check in the amount of $2,000.00; 2) a warranty deed “from your clients to the Water District for a square acre of land located on the East side of the drainage ditch”; and 3) a right-of-way easement for a water pipe.

Mrs. Fowlkes did not execute the instruments enclosed. Instead, in a somewhat intemperate letter, she advised her attorney that “I cannot (sic) sign those papers and you are not authorized to make any arrangements or deals for me. You’ve helped put me in bed sick.” Not unnaturally, counsel asked leave to withdraw, which was granted. On June 23, 1964, having employed new attorneys, the defendant filed amended responsive pleadings. On June 25, having added defendant’s tenant, Billy Joe Sides, as a defendant, the District obtained a decree in condemnation, which recited specifically that the plaintiff and the defendants had endeavored, but were unable, to agree upon the proper compensation to be paid. Commissioners were appointed and were ordered to assess defendant’s damages. On July 8, 1964, the commissioners filed their report, assessing defendant’s damages at the sum of $2,800.00. The amount of the award was deposited with the circuit clerk on July 8, and both the District and the defendant filed exceptions, requesting an assessment of their damages by a jury. After considering and rejecting a proposal by the defendant to accept the sum of $3,250.00 as damages for the taking, the District, on December 10, 1964, filed this action for specific performance. The petition in this case 'set out that after the institution of the condemnation proceeding the defendant had, through her attorney, agreed to compromise the issues for the sum of $2,000.00, and prayed that the court order and direct the defendant, upon the payment of $2,000.00, to transfer to plaintiff the interest sought to be acquired by the said condemnation suit, and that defendant be required to dismiss her exceptions to the said condemnation suit with prejudice. On December 28, 1964, the defendant put the matter at issue by filing an answer in which she denied generally the allegations in the petition, and pleaded that the purported agreement was in violation of the Statute of Frauds. It should be noted that when the instant action was tried, the original file in the condemnation case was introduced in evidence by the plaintiff, and the court was asked to take judicial notice of the proceedings and the decree in condemnation. It should be further noted that counsel for the District characterized this lawsuit as “ * * * an alternate on the exceptions.” Counsel continued: “If we threw these cases out, we would start over and have a hearing on the amount of damages to be awarded her [defendant], not on the question of whether she is going to convey title to said real estate.” At another point, counsel for the District stated that “we certainly don’t insist on any deeds. We are content to get whatever rights we may have under that condemnation. That is what we are acquiring here.”

We need not recite at length the evidence given upon the trial. The court heard, among other witnesses, Mrs. Fowlkes’ first attorney, and Mrs. Fowlkes. Mrs. Fowlkes’ attorney testified that she had authorized execution of the agreement in question and had then repudiated it. The substance of Mrs. Fowlkes’ testimony was that she had authorized settlement on such terms as would realize her a net payment, after expenses, of $2,000.00. Instead, she testified, her attorney had agreed to a gross settlement of $2,000.00, from which all her expenses had to be deducted. It was stipulated that the well and auxiliary buildings had in fact been located on the “east side of the ditch,” and the plaintiff tendered its willingness to install the water line called for in its resolution. As indicated, the trial court denied specific enforcement. No findings of fact'nor conclusions of law were requested, and none were volunteered.

We have had first to examine our jurisdiction of the appeal. As pleaded, the plaintiff’s action was for specific performance of a contract which, at least in its inception, looked to the execution of a conveyance of land. Ordinarily an action for specific performance of a contract to convey land involves the title to real estate in the appellate jurisdictional sense, and jurisdiction of an appeal in such an action is in the Supreme Court. Article V, Section 3, Constitution of 1945; Drake v. Hicks, Mo., 249 S.W.2d 358, 360[1]; McCrory v. Brinckmann, Mo.App., 379 S.W.2d 882, 883-884[1-3], The form of the action is not decisive, however; the determinative factor is whether the judgment sought or rendered directly determines title in some measure or degree adversely to one litigant and in favor of another. Albi v. Reed, Mo., 281 S.W.2d 882, 884 [1]; Domyan v. Dornin, Mo.App., 348 S.W.2d 360, 361 [1]. So in cases wherein the action has nominally been for specific performance, but the relief sought or rendered has not in fact directly affected or operated upon the title to real estate, it has been held that the Courts of Appeals have jurisdiction. Stephens v. Anth, Mo., 142 S.W.2d 1008 [2] ; Atkinson v. Smothers, Mo.App., 291 S.W.2d 645, 647-648[2-4], In this instance, the plaintiff’s theory of submission was that this action for specific performance was only an “alternate on the exceptions. If we threw these cases out, we would start over and have a hearing on the amount of damages to be awarded her, not on the question of whether she [defendant] is going to convey title to said real estate.” Plaintiff’s counsel also stated: “We certainly don’t insist on any deeds. We are content to get whatever rights we may have under that condemnation. That is what we are acquiring here.” Manifestly, the plaintiff sought no decree vesting title to the property in question in the District; rather, the plaintiffs object in this action was to secure an adjudication that the pleaded agreement bound Mrs. Fowlkes to accept the sum of $2,000.00 as damages for the appropriation of her property. The order and judgment of the trial court in no way affected the title to the property rights' in question, and both parties, so far as this record shows, accept the validity of the condemnation. We conclude that we have jurisdiction of the appeal.

The parties have briefed a number of points, and have vigorously and ably argued the case on its intrinsic merits. After prolonged consideration of the case, we have the view that the parties have considerably over-simplified it, and in our view there are grave impediments to the specific enforcement of the agreement in question other than those argued by the respondent. Space will be conserved, however, and we shall consider only those matters essential to a determination of the appeal in this court. Logsdon v. Duncan, Mo., 293 S.W.2d 944, 946 [ 1]; Macy v. Day, Mo.App., 346 S.W.2d 555, 559[5],

In the first place, it must be remembered that specific performance is not a matter of right, even when the plaintiffs evidence establishes a contract valid at law and sufficient for the recovery of damages. Eisenbeis v. Shillington, 349 Mo. 108, 114, 159 S.W.2d 641, 644[6]; Gottfried v. Bray, 208 Mo. 652, 660-661, 106 S.W. 639, 642[2], Ordering specific enforcement of a contract is a matter within the sound judicial discretion of the court. Miller v. Coffeen, 365 Mo. 204, 209, 280 S.W.2d 100, 102 [3, 4]; Anno., 65 A.L.R. 7, 22 (1930). Upon the record before us, it is not entirely clear what the District proposed to do in effecting its “compromise.” At one point in the record, counsel for the defendant stated that he understood the District was to have dismissed its condemnation action if Mrs. Fowlkes had executed the conveyances transmitted to her in the District’s letter of May 22, 1964. Again, the language of the District’s resolution of May 20 — “the location of the acre tract of land shall be on the east side of the ditch” — and the words of its letter of May 22 suggest that the plaintiff, as part of its proposed compromise, agreed to take an acre different from the one it originally proposed to condemn. Other parts of the record suggest it simply proposed to relocate the structures on the “east side of the ditch.” If in fact the District undertook, or meant to agree, to condemn only a specified tract, or to exercise its right of condemnation conditionally, we would have doubt that its agreement had a lawful object, for the power of eminent domain cannot be contracted away. But assuming, with some reserve, that the agreement involved is fairly comparable to those discussed in Croker v. Consolidated Service Car Co., Mo., 365 S.W.2d 524, and Landau v. St. Louis Pub. Serv. Co., 364 Mo. 1134, 273 S.W.2d 255, 48 A.L.R.2d 1200, as the plaintiff contends, still the plaintiff was required to show the good faith and equities of its own position, Frederich v. Union Electric Light and Power Co., 336 Mo. 1038, 1051-1052, 82 S.W.2d 79, 85, and the trial chancellor, in weighing the equities, was entitled to consider whether a decree of specific performance would work an unconscionable advantage to the plaintiff or would result in injustice. Frederich v. Union Electric Light and Power Co., supra, 336 Mo. at 1051-1052, 82 S.W.2d at 85; Rockhill Tennis Club of Kansas City v. Volker, 331 Mo. 947, 969, 56 S.W.2d 9, 19 [8]; Anno., supra, 65 A.L.R. at 69. The record before us is subject to the inference that before the plaintiff undertook condemnation, it attempted to purchase Mrs. Fowlkes’ land rights for $2,000.00, advising her that it had the power of eminent domain and would use it if she refused. The defendant refused to sell, and the District thereupon exercised its right of condemnation. Before it fully exercised that right, however, the District again attempted to acquire the necessary land rights from the defendant, and, according to its interpretation of the case, 'acquired the right to a conveyance of the land before the decree in condemnation was taken. However, the District did not seek any conveyance subsequent to Mrs. Fowlkes’ refusal to perform or act on its communication of May 22, 1964. Instead, upon representation that it could not agree with her upon the proper compensation to be paid, it obtained a decree in condemnation on June 25, 1964. The petition alleging the attempt to agree, and the decree finding that the parties had been unable to agree, were introduced in evidence upon this trial. As we have recited, the plaintiff looked upon this action as “an alternate to the exceptions.” The commissioners appointed assessed the defendant’s damages at the sum of $2,800.00, and the plaintiff paid this sum to the clerk of the circuit court. Thereafter, both the plaintiff and defendant filed exceptions, requesting an assessment of damages by a jury. Then on December 10, 1964, the plaintiff filed this action, seeking, among other things, to compel the defendant to dismiss her exceptions filed after the report of commissioners was accepted. No evidence was introduced in this case about the actual value of the land taken.

The record is thus subject to the further inference that the plaintiff District deferred asking specific enforcement under its contract, indeed represented that it could not agree upon the proper amount of compensation, and took no further action upon its proposal until it had ascertained that the commissioners’ award was in excess of the amount it had agreed to pay. The District then sought to foreclose a jury trial on the amount of damages, a right generally afforded defendants in condemnation cases, Mallette v. United States, 8 Cir., 137 F.2d 95, 97 [3], having blown hot and cold, as it were, as to whether it had an agreement or not, and having waited to see whether its condemnation action or its action for specific performance would be most advantageous. Equity does not permit a party to a contract to refrain from asserting his rights until it is clear the bargain is to his advantage, and then allow specific performance, if the delay has been prejudicial to the defendant. Suhre v. Busch, 343 Mo. 170, 191, 120 S.W.2d 47, 56[9] ; 49 Am.Jur. Specific Performance, Section 76, pp. 93-94. We have the view that the trial chancellor could reasonably have found that plaintiff’s delay in asserting its right to specific performance gave rise to a change of circumstances making it inequitable to grant specific performance, and could reasonably have exercised his discretion against the entry of such decree.

Such considerations aside, the trial court made its finding on conflicting evidence, and we should sustain its judgment unless the proof is palpably insufficient in clarity and cogency to warrant its finding. Cossairt v. Reich, Mo., 370 S.W. 2d 291, 294[2], One of the defendant’s principal arguments is that there was never any “meeting of the minds,” because the parties never actually agreed upon the true consideration to be paid by the plaintiff. It is true, as the respondent argues, that to make a valid contract the “minds of the contracting parties must meet upon and assent to the same thing in the same sense and at the same time,” Macy v. Day, supra, 346 S.W.2d at 558[1], and it is also fundamental that unilateral mistake of fact is a well-recognized ground for denial of specific performance. Frederich v. Union Electric Light and Power Co., supra, 336 Mo. at 1051-1052, 82 S.W.2d at 85 [6]; Anno., 15 L.R.A.,N.S., 81 (1908); 5 Willis-ton, Contracts, Sections 1425 and 1427, pp. 3989-3991, 3996-3998 (Rev. ed. 1937).

In this particular and respect, the essential controverted point is whether Mrs. Fowlkes intended, and authorized, her first attorney to compromise the amount of damages due her for the gross sum of $2,000.00, or whether she understood, and intended, that she should receive such settlement as would realize her the net sum of $2,000.00, after the payment of her attorney’s fee and other expenses. The attorney originally retained by the defendant testified, as we have stated, that he explained the nature of the proposed settlement (if that is the proper term) in clear and unambiguous terms; the import of his evidence was that Mrs. Fowlkes had at first agreed, but had later repudiated her agreement. However, the defendant testified that she had already been offered the sum of $2,000.00 for her land by the District before the condemnation action was commenced, and that her instruction to the attorney had been that “ * * * I was to get $2,000.00 net in payment for that acre.” Later, after her attorney had communicated with the District, and the check and conveyances were sent to her, the defendant discovered that she was expected to pay her attorney from the gross sum of $2,000.00, and that she would not realize the sum for which she was willing to compromise. Mrs. Fowlkes’ testimony also indicates that she had already paid for the water line, that she did not know that “the pump was to be on my place,” and it is inferable from her testimony that she did not understand that “they would have the right to dig in my land all up and down the length of the farm.”

It is true, as the appellant says, that much of the defendant’s testimony concerning the nature of her expenses, other than her attorney’s fee, is vague, but we cannot agree that her evidence is incredible and unworthy of belief. It must be remembered that there was no single written memorandum of this agreement; this is not a case in which the defendant claims, that she signed a written instrument without understanding it. Much of the communication between the defendant and the District, and the communication between her and her attorney, was oral, and we think it was for the trial court to decide whether these communications were sufficiently ambiguous that the defendant misunderstood the nature of the installation which the District proposed to locate on her property,, and whether the defendant agreed to compromise in the mistaken belief that she was to receive a net sum of $2,000.00, rather than the gross sum of $2,000.00. Mrs. Fowlkes also testified that she had already paid for the installation of her water line, and her evidence, if accepted, was that she was expected to compensate her tenant for his cotton crop, or that part of it which was destroyed by the plaintiff’s activity. There is precedent for the proposition that when the vendor, because of ambiguity in the communication of an offer, or acceptance, is misled to his detriment as to the true consideration to be paid, specific enforcement of a contract to convey land may be refused. Werner v. Rawson, 89 Ga. 619, 15 S.E. 813, 814—815 [1] ; Smith v. Toth, 61 Ind.App. 42, 111 N.E. 442, 444-445 [5]; Burkhalter v. Jones, 32 Kan. 5,. 3 P. 559, 564 — 565. But this case shows something more than that. We think it could reasonably be found that the defendant understood that she was to receive the net sum of $2,000.00 when she agreed to the compromise, and that she did not understand the full nature and extent of the-taking which the plaintiff proposed. The mistake of fact sufficient to justify refusal of specific performance need not be such as would avoid a contract at law, or evert such as would justify rescission or reformation of the contract. A mistake, it is said, which is entirely the defendant’s own, or that of his agent, and for which the plaintiff is not directly or indirectly responsible, may defeat specific performance. Jasper Co. Electric Ry. Co. v. Curtis, 154 Mo. 10, 24—25, 55 S.W. 222, 226. In this instance, we cannot say that the proof offered by the defendant was palpably insufficient in clarity and cogency to warrant the trial court’s finding, and the judgment is therefore affirmed.

STONE, P. J., concurs.

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

      . All references to statutes and rules are to the 1959 Revision V.A.M.S. and Y.A.M.R., unless otherwise noted.

      . At least within the limits of Section 247.050(7) and Section 247.210.

      . State ex rel. State Highway Commission v. Hammel, Mo., 372 S.W.2d 852, 853-854; City of Moberly v. Hogan, 317 Mo. 1225, 1230, 298 S.W. 237, 239 [1]; Herman v. Board of Park Commissioners, 200 Iowa 1116, 206 N.W. 35, 36-37 [4]; Burke v. Oklahoma City, Okl., 350 P. 2d 264, 267-268 [3]; 1 Nichols, Eminent Domain, Section 1.141 [4], pp. 31-33 (Rev. 3rd ed. 1964).

      . We do not rule on the necessity of making an attempt to agree upon the amount of compensation to be paid in this case. The applicable procedural statutes do not appear to impose any such duty. See Section 247.210; Sections 88.010 and 88.-013; Mayor, Councilmen and Citizens of Liberty v. Boggess, Mo., 321 S.W.2d 677, 680 [2]; City of Kirkwood v. Venable, 351 Mo. 460, 468, 173 S.W.2d 8, 13 [10].


author: WILLIAM M. KIMBERLIN, Special Judge.

text:
    Dolly B. JONES, Employee-Respondent, v. The BENDIX CORPORATION, Employer-Appellant, and The Fidelity and Casualty Company of New York, Insurer-Appellant.
    No. 24469.
    Kansas City Court of Appeals. Missouri.
    Oct. 3, 1966.
    Donald G. Stubbs, McKenzie, Williams, Merrick, Beamer & Stubbs, Kansas City, for appellant.
    Terence L. Connaughton, Kansas City, for respondent.
   WILLIAM M. KIMBERLIN, Special Judge.

This is a workmen’s compensation case. It is an appeal by the employer, Bendix Corporation, from a judgment of the Circuit Court of Jackson County, Missouri, affirming the final award of the Industrial Commission in favor of the employee, Dolly B. Jones, in the amount of $2,550.00, plus six per cent interest on any past due compensation from August 1, 1965.

The salient facts are that claimant, Dolly B. Jones, was a regular employee of the Bendix Corporation and had been for quite some period of time; that she lived at Buckner, Missouri and drove back and forth to work from her place of residence to the corporation plant in the southern part of Kansas City, Missouri; that she was to begin work in the mornings at 7:00 A.M.; that the gate to the plant opened at 6:30 in the morning. On the morning of July 31st, 1964, she left her home at approximately 5 :40 A.M. and arrived at the plant between 6:30 and 6:40 A.M. She walked into the plant, then to her locker room, then to the ladies restroom, combed her hair, and then went into the cafeteria to drink coffee. She had a regular table where she drank coffee in the cafeteria and on this particular morning went in and sat down at the table. She picked up her cup to take a drink of coffee and as she set the cup down the chair on which she was seated broke and she fell to the floor and was injured, primarily in her left leg and lower back. Someone got her another chair and she sat down and took another drink of coffee and then left and went upstairs. This incident occurred between 6:45 and 6:50 A.M. She went to her department and told the foreman of being injured and he sent her to first aid. She then went to see a nurse at some time between 7:20 and 7:30 A.M. The nurse then sent her to a medical doctor who saw her shortly after 8:00 A.M.

The cafeteria was located inside the plant area and was operated by company employees. It was the only available place to obtain food and drink within the area. The employer advertised the availability of these cafeteria facilities to the employees. Claimant introduced testimony of a psychologist who in substance testified that the availability of these facilities, where the employees could eat and drink, which the management had provided for that purpose, had a beneficial effect on the employees in that it enabled them to do better work and increased their efficiency.

The employer, Bendix Corporation, admitted plaintiff was injured on July 31st,. 1964, and makes no issue on appeal as to the amount of the compensation awarded. Hence no further statement of the facts is necessary. The sole issue raised on appeal by the employer is that the accident did not arise out of and in the course of the claimant’s employment, in that: (a) the accident occurred prior to the claimant’s working hours; (b) the risk of harm involved was not related to claimant’s employment and (c) the accident arose out of a purely social activity of the claimant.

The question whether or not a particular accident falls within the phrase “arising out of and in the course of the employment” within the meaning and intent of the Workmen’s Compensation Act many times is a delicate and troublesome one. It has been written many times in appellate court opinions that each case involving the question must be determined upon its own particular facts and circumstances, since no two cases are cast in the same factual mold.

The statutory law of this state, Section 287.800, R.S.Mo.1959, V.A.M.S., states that the Workmen’s Compensation Law should be liberally construed with a view to the public welfare, but as was held in Johnson v. Simpson Oil Company, Mo.App., 394 S. W.2d 91, this, “neither impinges upon the function and right of the Industrial Commission, as trier of the facts, to draw from the evidence such inferences as may be fairly and reasonably permissible * * * nor authorizes allowance of a claim lacking an essential element required by law.”

No case directly in point resolving this issue has been cited by counsel for the employer or employee, nor has independent research revealed any. Consequently, this court must analyze the factual situation and resort to well established rules of law in determining this knotty issue. Our essential function was stated in Blair v. At- mour and Company, Mo.App., 306 S.W.2d 84, as follows: “We review the whole record, including the legitimate inferences to be drawn therefrom, in the light most favorable to the award of the commission, and then determine whether the commission’s findings, if supported by competent and substantial evidence, are contrary to the overwhelming weight of the evidence.”

This court in Blair v. Armour and Company, supra, approved the following rule.

“In Larson’s Workmen’s Compensation Law, Vol. 1, Sec. 21.60, the general rule is announced that 'The course of employment, for employees having a fixed time and place of work, embraces a reasonable interval before and after official working hours while the employee is on the premises engaged in preparatory or incident acts, * * *. The rule is not limited to activities that are absolutely necessary; it is sufficient if they can be said to be reasonably incidental to the work.’ ”

In the case of Daniels v. Krey Packing Company, Mo., 346 S.W.2d 78, the Supreme Court of this state made the following pronouncement :

“The term ‘arising * * * in the course of his employment’, as used in the Act, does not require that the employee be directly engaged in the task with which he is primarily charged. It is only necessary to establish that the task in which the employee was engaged, and as a result of which he was injured, was incident to the conditions of his work or that he was injured in doing an act reasonably incidental to the performance of his duties, of which his employer might reasonably have knowledge or reasonably anticipate. Ricketts v. Story Laundry & Dry Cleaning Co., Mo.App., 155 S.W.2d 536, 539; Jackson v. Euclid-Pine Investment Co., 223 Mo.App. 805, 22 S.W.2d 849, 851. A case illustrative of these principles is that of Blair v. Armour & Company, Mo.App., 306 S.W.2d 84."

The first contention made by the employer in opposition to the claim is that the accident occurred prior to claimant’s working hours, and for that reason is not compensa-ble. This is not determinative of the issue as we must conclude from a study of the rules above announced. It is only necessary to establish that the claimant was injured while engaged at a task reasonably incidental to the performance of her duty, of which the employer might reasonably have knowledge or might reasonably anticipate. It is true the findings of the referee and the Industrial Commission are silent as to the exact time of the occurrence. The testimony established the time somewhere between 6:45 and 6:50 A.M. The claimant was to punch the clock and begin work at 7:00 A.M.

It is our view that the drinking of coffee by the employee in the morning immediately prior to embarking on her duties was reasonably incident to her work and that the employer might reasonably have known of or have anticipated such action. As to whether she was drinking coffee at 6:45 or 6:50 A.M. is of no moment. This point is without merit. The case of Dunnaway v. Stone & Webster Engineering Corporation, 227 Mo.App. 1211, 61 S.W.2d 398, cited by counsel for the employer, where the claimant fell off a barge into the water and drowned while fishing during the noon hour, is not in point and is of no aid to the employer. Likewise, the principle announced in DeMoss v. Evens & Howard Fire Brick Company, 225 Mo.App. 473, 37 S.W.2d 961, has no persuasive effect.

The second point made by the employer, that the risk of harm involved was not related to claimant’s employment, is likewise without merit. Employer’s counsel presented no supportive argument thereon.

The employer’s third point, that the accident arose out of purely social activity, requires more comment. The employer advances the argument that the claimant was doing something which was solely for her own personal or social benefit and that the drinking of coffee had no connection with her work. A case bearing materially on the determination of this issue is Thompson v. Otis Elevator Company, Mo.App., 324 S.W. 2d 755. Briefly, the facts were that a fe male employee was injured in the ladies lounge during the noon hour. Preparatory to applying cosmetics to her face she reached across a table to get her purse prior to sitting down in a chair. She stepped back to sit down in the chair which she had previously seen to be in an appropriate position, but in the meantime another employee, without claimant’s knowledge, had removed the chair and claimant fell to the floor and was injured. The court held the injury to be compensable. The rationale of the ruling was stated by the court as follows, 1. c. 758:

“The prevailing rule, as stated in 99 C.J.S. Workmen’s Compensation, § 220, p. 722, is this: ‘Acts necessary to the life, comfort, or convenience of an employee while at work are incidental to the service and an injury occurring while in the performance of such acts may be compensable.’ Further reference to that section shows the general rule to be that employees who minister to their personal comfort, within the time and space limitations of their employment, do not thereby necessarily leave the course of their employment. This rule is therein shown to cover such acts as satisfying thirst, seeking warmth, shelter or fresh air, heeding a call of nature, washing, resting or sleeping, using tobacco, and preparing to begin or quit work. Our courts have followed this principle.”
* ⅜ ⅜ ‡ ‡ ⅜
“A pause by an employee within reasonable limits of time and place to satisfy the needs of the body for food or drink, or even for refreshment, may well be considered as reasonably incidental to his work. Compare Markowitz v. National Headwear Co., 213 App.Div. 461, 210 N.Y.S. 673. See also 71 C.J. Workmen’s Compensation Acts, § 413, pp. 671-2.”

In the instant case claimant introduced the testimony of a psychologist to the effect that the providing of a cafeteria where the employees could have coffee has a beneficial psychological effect upon them; that it gives the impression the management is interested in the employees; that it puts them in a better frame of mind and results in their doing better work for the company. The claimant testified that drinking coffee in the morning tended to pep her up and to enable her to do better work. It should be emphasized the evidence showed that the cafeteria was provided by Bendix for the convenience and comfort of the employees; that there was no other place available in the locality where the employees could obtain food or drink; that it was not open to the public generally, but only to those having a legitimate reason for being on the premises; and, that it was advertised by the management to the employees as serving good meals at reasonable prices. It is obvious that the cafeteria was provided for the mutual benefit of the company and the employees, that its use by the employees was encouraged by the employer, that when claimant availed herself of the facilities so provided by seating herself and drinking coffee, she was acting both for her own benefit and that of her employer, and that those acts were reasonably incidental to commencement of her work.

It is our view, from the standpoint of mutual benefits, that this is a stronger case for holding the injury compensable than is the cosmetic case, Thompson, supra. Here claimant was satisfying her physical needs immediately prior to beginning work, as distinguished from beautification in the cosmetic case. The evidence fails to establish claimant was injured as a result of engaging in a purely social activity and this argument is ruled against the employer. See Conklin v. Kansas City Public Service Co., 226 Mo.App. 309, 41 S.W.2d 608.

The court has read the cases from other jurisdictions cited by counsel for the employer and finds them not in point and not persuasive on the issues here presented.

We rule that the commission’s findings, inclusive of the finding that claimant sustained an accident arising out of and in the course of her employment, and the resulting award, are adequately supported by competent and substantial evidence, are not contrary to the overwhelming weight of the evidence and are in accordance with a sound interpretation and proper application of the law. The judgment of the circuit court affirming the award of the commission is affirmed.

All concur.


author: SPERRY, Commissioner. PER CURIAM:

text:
    LINWOOD STATE BANK, a corporation, Respondent, v. TIME PLANS, INC., a corporation, Appellant.
    No. 24470.
    Kansas City Court of Appeals. Missouri.
    Oct. 3, 1966.
    Donald L. Mason, John J. Hager, Mason, Gant & Moran, Kansas City, for appellant.
    Alvin D. Shapiro, Stinson, Mag, Thompson, McEvers & Fizzell, Kansas City, for respondent.
   SPERRY, Commissioner.

This suit was instituted by plaintiff, Linwood State Bank, a corporation engaged in' a general banking business in Kansas City, against defendant, Time Plans, Inc., to recover a judgment against defendant on account of three checks issued by defendant to A A Auto Sales, a partnership. Said checks were alleged to have been endorsed by the payee and deposited to its credit in plaintiff bank. The drawer “stopped payment” of the checks by so notifying Park National Bank, upon which the checks were drawn. Trial to the court resulted in judgment for plaintiff in the total amount of the checks involved, the sum of $5,995.00, together with interest thereon from May 10, 1963, in the sum of $749.37, and for costs. Defendant appeals.

Plaintiff pleaded that defendant did, on or about May 6, 1963, make and sign its check No. 26611, with A A Auto Sales as payee, in the amount of $3,050.00, and did then and there deliver same to the named payee; that, on or about May 7, 1963, defendant did make and sign checks numbered 26619 and 26621, with A A Auto Sales as payee, in the amount of $1,195.00 and $1,-750.00, respectively, and did then and there deliver same to the named payee; that, on May 6, 1963 and on May 7, 1963, the payee deposited same, in the regular course of business, in its account with plaintiff; that the payee, for value received, did endorse said checks to the order of plaintiff; that plaintiff is now the lawful holder, in due course, and owner for value of said three checks; that, in the regular course of business, plaintiff presented said three checks for payment at Park National Bank, and was informed that defendant had stopped payment thereon and it refused to honor said checks; that, since May 10, 1963, defendant has willfully and wrongfully failed and refused to honor said checks, although demand for payment has been duly made; that there is now due and owing to plaintiff thereon the sum of $5,995.00, plus accrued interest from May 10, 1963.

Defendant filed answer denying each and every allegation of the petition and moved that same be “dismissed for failure to state a claim upon which relief can be granted”.

Plaintiff read into the record certain requests for admission, and the answers thereto, as made by defendant. Defendant admitted every material allegation of the petition as above set out. Plaintiff also offered substantial and documentary evidence in support of said allegations. Defendant offered testimony. Some of it tended to show that it learned, after delivering the checks to payee, that some of the security given to it by payee as consideration for the issuance of said checks was invalid, which is why payment was stopped.

In response to plaintiff’s written request for findings of fact and conclusions of law, the court found as follows:

“FINDINGS OF FACT
“1. On May 6, 1963, defendant made and signed its check No. 26611, with A A Auto Sales as payee, in the amount of $3,050.00, and delivered said check to said payee.
“2. After having endorsed same un-restrictedly, the payee deposited said check in its checking account at plaintiff Linwood State Bank on May 6, 1963; credit in the full amount of said check, $3,050.00, was immediately extended by plaintiff to the payee.
“3. On May 7, 1963, the defendant made and signed its checks No. 26619, in the amount of $1,195.00, and No. 26621, in the amount of $1,750.00 with A A Auto Sales as payee on each, and delivered said checks to said payee.
“4. After having endorsed them un-restrictedly, the payee deposited said checks in its checking account at plaintiff Linwood State Bank on May 7, 1963; credit in the full amount of said checks, or a total of $2,945.00, was immediately extended by plaintiff to said payee.
“5. In the regular course of business, plaintiff sent check No. 26611 to the drawee, Park National Bank, where it was presented for payment on May 10, 1963, but payment of said check was stopped by defendant.
“6. In the regular course of business, plaintiff sent checks Nos. 26619 and 26621 to the drawee, Park National Bank, where they were presented for payment on May 13, 1963, but payment of said checks was stopped by defendant.
“7. On May 6, 1963, and on May 7, 1963, when Linwood State Bank received the three checks in question and extended credit to A A Auto Sales in the full amount of said checks, it had no knowledge of any dispute between defendant and A A Auto Sales or of any infirmity in regard to said checks; said checks were complete and regular upon their face.
“8. Although defendant offered some evidence purportedly showing a partial failure of consideration as between A A Auto Sales and defendant, defendant has not borne its burden of proof to establish either fraud or a complete failure of consideration.
“9. While the final overdraft in A A’s account because of the dishonor and non-payment of the checks in question amounted to $4,886.76 (or $1,108.24 less than the full face amount of the checks), nevertheless, the evidence established, on a first-in-first-out basis, that plaintiff had paid out the full face amount of the three checks prior to any notice of stop payment and/or dishonor. Even if first-in-first-out would not be applicable, plaintiff paid full value for the checks in question in the amount of $5,995.00. Defendant did not in this case plead any right to said $1,108.24 arising out of its ■dispute with A A Auto Sales.
“CONCLUSIONS OF LAW
“1. (a) At the minimum, plaintiff is the owner of these instruments, having paid full value for same, to-wit: $5,~ 995.00.
“(b) Rule 55.10, Rules of Civil Procedure, requires that the defenses of failure of consideration and/or fraud be affirmatively pleaded. Defendant did not plead any affirmative defense. Plaintiff made proper and timely objection to all ■evidence concerning said defenses of failure of consideration and/or fraud; no request was made by defendant to amend its answer to allege such affirmative defenses. The Court, sitting without a jury, is free to, and did, receive all such evidence so objected to by plaintiff; but it is also free to, and did, disregard such evidence as would be inadmissible because of a failure to be pleaded.
“(c) Even if it had been properly pleaded and was in issue, defendant failed to prove fraud or a complete failure of consideration, and, in any event, failed to rebut the statutory presumption of a valuable consideration for these instruments. Sec. 401.024, R.S.Mo. [V.A.M.S.] Even though there was evidence of partial failure of consideration as between defendant and A A Auto Sales, such is not sufficient to defeat plaintiff’s right of recovery.
“(d) Having failed to plead and/or prove the defenses of fraud and/or a failure of consideration, defendant is liable to plaintiff, as owner, in the face amount of the three checks in question, plus interest from the date they were due.
“2. In the alternative, and in addition to Conclusion No. 1, the Court also concludes plaintiff was a holder in due course of said instruments, having fulfilled all requirements of a holder in due course, as set forth in Sec. 401.052, R.S.Mo., [V.A.M.S.], and there was no restrictive endorsement by the payee. There was no evidence to rebut the prima facie showing of plaintiffs status as a holder in due course. Even had defendant pleaded and/or proved the defenses of fraud and/or failure of consideration, plaintiff, as a holder in due course, would not be subj ect to such defenses.
“3. Either as owner (Conclusion No. 1) or as holder in due course (Conclusion No. 2), plaintiff is entitled to the full face amount of these three instruments, to-wit: $5',995.00, plus legal interest from May 13, 1963, to-wit: $749.-37”.

From an examination of the transcript herein we hold that the findings of fact made by the court are fully supported by the entire record. We find the facts to be as stated by the court.

Plaintiff paid out of depositor’s account checks drawn thereon in the full amount of the deposits here in controversy. This was done prior to any notice to it of defendant’s contention as to the infirmity of securities delivered to defendant by A A Auto Sales, payee, or of any notice that defendant had stopped payment on the checks. It is true that there remains in the depositor’s account, after payment of all checks drawn against the account and presented to plaintiff prior to its knowledge of defendant’s contention of infirmity or partial failure of consideration, $1,108.24. That does not affect plaintiff’s legal status; defendant did not plead, affirmatively or otherwise, as to this balance. We therefore approve of the court’s conclusions of law number 1 (together with subpara-graphs thereunder) and of numbers 2 and 3.

Defendant says that plaintiff received the deposits for collection and, at most, can be but an owner, not a holder in due course. Under the bank collection code, (which has since been repealed), assuming but not holding that it applies here, Sec. 402.030 R.S.Mo.1959, provides that when a bank received on deposit an item for collection, it is agent for the depositor; but it also provides that the bank shall have all of the rights of an owner thereof, against prior and subsequent parties, to the extent of the amount withdrawn prior to notice of infirmity. The trial court found that the full amount credited had been withdrawn prior to notice to plaintiff of “stop payment”, or of any dissatisfaction on defendant’s part. In Annotation,. 59 A.L.R.2d 1173, 1181, it is said:

“Sec. 4. PROCEEDS ENTIRELY WITHDRAWN.
Although the mere crediting by a bank of the proceeds of a negotiable instrument to the account of, a depositor does not generally constitute a giving of value so as to constitute the bank a holder in due course, it has almost universally been held or stated that when the bank permits its depositor to withdraw completely or otherwise employ the proceeds of the item deposited prior to receipt of any notice that payment has been stopped or that the instrument is defective, the bank has given value for the negotiable paper and is a holder in due course”.

Cited therewith is the case of Benton v. German-American National Bank, 122 Mo. 332, 26 S.W. 975; and Union National Bank v. Fox (Mo.App.) 9 S.W.2d 1070. See also Britton on Bills and Notes, 2d Ed., page 235.

Defendant did not offer any evidence tending to disprove the facts shown by plaintiff and such facts establish prima facie that plaintiff is a holder in due course under the terms stated in Sec. 401.052, R.S. Mo.1959, V.A.M.S. As a holder in due course plaintiff was not subject to any defenses that defendant had. Sec. 401.057, R.S.Mo.1959, V.A.M.S.

However, plaintiff was in any case, “owner” of the checks under the provisions of the Bank Collection Code, supra, and under the facts as found by the court. Farmers’ Exchange Bank of Missouri v. Farm & Home Savings & Loan Association, 332 Mo. 1041, 61 S.W.2d 717, 722, 723.

The judgment is affirmed.

MAUGHMER, C., concurs.

PER CURIAM:

The foregoing opinion of SPERRY, C., is adopted as the opinion of the court.

All concur.