author: HOUSER, Commissioner.

text:
    Charles DODWELL, a Minor, by His Mother and Next Friend, Virginia Dodwell Williams, Respondent, v. MISSOURI PACIFIC RAILROAD COMPANY, Appellant.
    No. 50390.
    Supreme Court of Missouri, Division No. 1.
    Nov. 9, 1964.
    Motion for Rehearing or to Transfer to Court En Banc Denied Dec. 14, 1964.

      Norman R. Jones, Kansas City, Griffin Smith, Little Rock, Ark., Donald E. Raymond, Kansas City, for respondent.
    Mark M. Hennelly, Charles P. Lippert, St. Louis, for appellant.
   HOUSER, Commissioner.

Charles Dodwell, a minor, filed suit pro ami against Missouri Pacific Railroad Company for personal injuries inflicted as a result of the alleged negligence of the railroad employees in blocking a public street crossing in North Little Rock, Arkansas, with its train for an excessive period of time under the city ordinance, and when plaintiff attempted to cross over the cars of said train negligently moving the train without warning plaintiff in any manner of the impending movement, as a result of which plaintiff’s leg was severed below the knee and he sustained other severe injuries. A trial jury awarded plaintiff $50,000. The railroad has appealed from the judgment entered upon the verdict.

From the evidence favorable to the prevailing party the jury could have found these facts: On June 8, 1960 plaintiff was 13 years old. His next birthday was July 28. He had just completed the eighth grade and was intending to go on to high school the following year. He had successfully completed all of his grades, was an “average” student, and had made A’s, B’s and C’s in his studies. He took part in sports, baseball, basketball, skating and swimming. He lived with his mother near the crossing where 10th Street crosses the Missouri Pacific tracks. Tenth Street leads from a residential area across two railroad tracks to a stairway extending from the Main Street viaduct. On the evening of June 8 plaintiff went swimming with other boys at the North Little Rock Boys’ Club. After the pool closed for the night plaintiff returned with another boy and swam for another 5 or 10 minutes, in violation of the rules. Plaintiff started home alone, taking a route over the Main Street viaduct to a point halfway across the viaduct where a stairway leads down from the viaduct to 10th Street below. Railroad tracks upon which switching operations are conducted are located beneath the viaduct. It takes from 5 to 8 minutes to walk from the beginning of the viaduct to the stairway and another 2 minutes to go down the stairway and reach the crossing. When plaintiff had traversed one fourth of the route over the viaduct he looked down and saw a stationary train sitting on the 10th Street crossing. Plaintiff descended the stairway and stood at the crossing, waiting to see if the train was going to move. He waited for a time variously estimated at from 2 to 6 minutes. It was dark, the time close to 10 p. m. He looked both to the north and to the south, but was unable to see either end of the train because of curves in the tracks. The train had been stopped at least 11 minutes and possibly as much as 15 minutes, to his knowledge. The train did not move, so he decided to cross over the train and go home. Before doing so he did not hear a bell sounded, or a whistle, or any type of warning. He walked to his left to the nearest coupling and, the train still not moving, started to crawl through the train, climbed up on the coupling, and “all of a sudden it [the coupling] popped,” the train moved suddenly and plaintiff fell off, sustaining the injuries which resulted in the necessity of amputation of his left leg 4 inches below the knee. During the year plaintiff lived in the area of the 10th Street crossing prior to the accident plaintiff observed people and vehicles using this crossing, and saw trains blocking the crossing sometimes two or three times a day, for periods varying from 5 minutes to 2 hours. Plaintiff observed that people “just go on through” when the crossing is blocked by trains; people of all ages, from 5 years on up. He saw adults climb over the coupler and crawl under the wheels, within a distance of 20 feet on either side of the crossing. Other witnesses who lived nearby had noticed both children and adults crossing over and climbing over and under standing trains, to avoid walking several blocks to get around trains blocking the crossing. Children used the crossing daily going to school and to the Boys’ Club. This situation obtained as far back as 1951 or 1952. He never saw a flagman there warning people of train movements and seldom heard a whistle sounded when a train moved off the crossing. No railroad crossing sign was posted there. Plaintiff knew of an alternate route from pool to home available to him, over the viaduct to the 7th Street exit, by which he could have avoided crossing the tracks, but he never used the other route; the route he took was shorter. In taking the route he followed that night he knew that he was walking to a blocked crossing, and that he would either have to wait for the train to move or go through the train. He knew that trains meant danger and that if he went through a train he might get hurt; that it was dangerous to crawl through a train. His mother had told him to stay off the trains. When he saw this train he knew it might be stopped there for a long time, possibly as long as an hour, and although he knew it was dangerous if he went through it he “didn’t believe the train would move from there.”

The railroad’s first point is that the court erred in not directing a verdict in its favor because plaintiff was guilty of contributory negligence as a matter of law at least equal to if not in excess of any negligence on the part of the railroad. (Under the comparative negligence statute, Arkansas Statutes, 1947, § 73-1004, a plaintiff may recover despite his contributory negligence, Tepel v. Thompson, 359 Mo. 1, 220 S.W.2d 23, 26 [7, 8], where his negligence is “of less degree” than that of the railroad employees.)

The accident occurred in the State of Arkansas and the laws of that state must be applied. Howie v. St. Louis S. W. Ry. Co., 360 Mo. 771, 230 S.W.2d 703. In the absence of judicial precedents in Arkansas of which we may take cognizance we must apply our own precedents. Stevens v. Missouri Pac. R. Co., Mo.Sup., 355 S.W.2d 122, 128.

Imprimis, the railroad disclaims any and all liability to plaintiff on the ground that he was a trespasser, and invokes the general rule that a railroad company owes trespassers no positive duty of care and only the negative duty not to wil-fully or wantonly injure them, or the duty to exercise ordinary care not to injure them after discovering their danger and inability to escape, citing the Arkansas cases of Adams v. St. Louis, I. M. & S. Ry. Co., 83 Ark. 300, 103 S.W. 725; Catlett v. St. Louis, I. M. & S. Ry. Co., 57 Ark. 461, 21 S.W. 1062; Cato v. St. Louis Southwestern Ry. Co., 190 Ark. 231, 79 S.W.2d 62; Missouri Pac. R. Co. v. Merrell, 200 Ark. 1061, 143 S W.2d 51; Allnutt v. Missouri Pac. R. Co., 8 F.2d 604 (8th Cir. 1925), and the Missouri case of Thrower v. Henwood, 351 Mo. 663, 173 S.W.2d 861. Whether plaintiff was a trespasser when he attempted to climb over the train depends upon whether he had a right to use the public crossing at that time. A city ordinance made it -unlawful for any railway company to block or obstruct any of the street crossings within the city limits for a longer period than five minutes at one time by either cars or locomotives. Under this ordinance the railroad had a right to occupy, block and obstruct the 10th Street crossing with its locomotive and cars for a period of five minutes. Its right to the occupancy of the crossing was temporarily exclusive and paramount to the traveling public’s right of free passage at the crossing, and during that period the public’s (and therefore plaintiff’s) right of free passage was temporarily suspended. Any person boarding the cars of the train during that period without a privilege to do so created by the railroad’s consent or otherwise would be a trespasser, under the cases of Central of Georgia Ry. Co. v. Chambers, 183 Ala. 155, 62 So. 724; Southern Ry. Co. v. Clark, 32 Ky.Law Rep. 69, 105 S.W. 384, 13 L.R.A.,N.S., 1071; Shea v. Chicago, M. St. P. and P. R. Co., 243 Wis. 253, 10 N.W.2d 135. Our conclusion that this is the law of Arkansas is supported by Cato v. St. Louis Southwestern Ry. Co., 190 Ark. 231, 79 S.W.2d 62, in which recovery was denied a widow and the heirs on the theory that their decedent was a trespasser in crawling under or between the cars of a live freight train just after it arrived in town and stopped, obstructing the principal thoroughfare, its engine still attached to the train, where deceased knew that the train would not be permitted to block the street except for a few minutes. During the period of the railroad’s paramount (and exclusive) right to the use of the crossing the only duty of the railroad to a trespasser would be that of due care after discovery of such person in a dangerous position, and not to injure him wilfully or wantonly. Cato v. St. Louis Southwestern Ry. Co., supra; Shea v. Chicago, M. St. P. & P. R. Co., supra. Different considerations apply where a train has obstructed a crossing for an unlawful period. Travelers seeking to use the public street are not then obliged to wait until the train is removed before continuing their business, Brown v. The Hannibal & St. Joseph R. R. Co., 50 Mo. 461, but have “the right to adopt some other means of effecting a crossing, and the company would be liable for any injury resulting in the attempt to cross, in the absence of contributory negligence * * St. Louis Southwestern Ry. Co. v. Christian, 164 Ark. 65, 261 S.W. 297, 262 S.W. 29. In St. Louis, I. M. & S. Ry. Co. v. Wells, 102 Ark. 257, 143 S.W. 1069, the following from 2 Thompson on Negligence, § 1674 was quoted with approval: “But after the train has obstructed the crossing beyond the length of time prescribed by statute or ordinance * * * then the railway company is guilty of an unlawful obstruction of the highway * * * [and] [t]he right of passage on the part of the public is restored.” In view of these pronouncements and of the general tenor of its opinions, we believe that the Supreme Court of Arkansas, confronted with this case in which the railroad had blocked and obstructed the crossing for more than five minutes, thus hindering travel thereon, would hold that the railroad train was in a place where it had no right to be and that the continued obstruction of the crossing was unlawful; that plaintiff was rightfully upon the crossing; that his attempt to pass the obstruction by climbing up on the cars did not classify him as a trespasser, Lake Erie & W. R. Co. v. Mackey, 53 Ohio St. 370, 41 N.E. 980; Texas & N. O. R. Co. v. Owens, Tex.Civ.App., 54 S.W.2d 848; Gesas v. Oregon Short Line R. Co., 33 Utah 156, 93 P. 274, 279; Littlejohn v. Richmond & D. R. Co., 49 S.C. 12, 26 S.E. 967; Mayer v. Chicago & A. R. R. Co., 63 Ill.App. 309; Krenzer v. Pittsburgh, C., C. & St. L. Ry. Co., 151 Ind. 587, 43 N.E. 649, 52 N.E. 220; Baltimore & O. R. Co. v. State, 141 Md. 520, 119 A. 244, and that he could recover for injuries negligently inflicted upon him by the railroad while crossing over the train, provided that in so doing he exercised ordinary care for his own safety under the circumstances. St. Louis Southwestern Ry. Co. v. Christian, supra; St. Louis, I. M. & S. Ry. Co. v. Wells, supra; Brown v. The Hannibal & St. Joseph R. R. Co., supra; Trent v. Norfolk & W. Ry. Co., 167 Ky. 319, 180 S.W. 792 [6]; 74 C.J.S. Railroads § 724 b, fns. 72, 73, p. 1335; 44 Am.Jur. Railroads § 504, p. 744; Thompson’s Commentaries on the Law of Negligence, Vol. 2, § 1674. The train having obstructed the 10th Street crossing for at least eleven minutes, under plaintiff’s testimony, we decline to declare as a matter of law that plaintiff was a trespasser.

This brings us to the railroad’s principal contention under its first point— that plaintiff was guilty of contributory negligence as a matter of law. The railroad cites the Arkansas cases of Curtis v. St. Louis & S. F. R. Co., 96 Ark. 394, 131 S.W. 947, and St. Louis-S. F. Ry. Co. v. McClinton, 178 Ark. 73, 9 S.W.2d 1060, and the Missouri cases of Hudson v. Wabash, W. Ry. Co., 101 Mo. 13, 14 S.W. 15, and Corcoran v. St. Louis, I. M. & S. Ry. Co., 105 Mo. 399, 16 S.W. 411. These cases, holding adult persons guilty of contributory negligence as a matter of law in crossing over a standing train which the adult knows or reasonably should know has an engine attached to it or about to be attached to it and is ready to move, are of little utility in passing upon the question whether this plaintiff, 13 years and approximately 10 months of age when he was hurt, should be declared guilty of contributory negligence as a matter of law. While infancy of a minor plaintiff does not preclude the defense of contributory negligence, Sams v. Pacific Indemnity Co., 170 F.Supp. 909 (W.D.Ark.1959), the standard for judging the conduct of a minor is not the ordinary care and prudence that would be exercised by an adult but only that ordinarily exercised by one of his age, intelligence, discretion, knowledge and experience under the same or similar circumstances. Patterson v. Bell, 204 Ark. 777, 164 S.W.2d 902; Missouri Pac. R. Co. v. Cox, 187 Ark. 104, 58 S.W.2d 421; Gates v. Plummer, 173 Ark. 27, 291 S.W. 816, 817 [2]; Kansas City Southern Ry. Co. v. Teater, 124 Ark. 1, 186 S.W. 294; Garrison v. St. Louis, I. M. & S. Ry. Co., 92 Ark. 437, 123 S.W. 657; Sams v. Pacific Indemnity Co., supra. This is also the rule in Missouri. See Hosford v. Clark, Mo.App., 359 S.W.2d 424, and Wilson v. White, Mo.App., 272 S.W.2d 1, and the many Missouri cases cited therein. “No arbitrary rule can be established fixing the age at which a child, without legal capacity for other purposes, may be declared wholly capable or incapable of understanding and avoiding the dangers to be encountered upon railway tracks. It is a question of capacity in each case.” Spillane v. Missouri Pac. R. Co., 111 Mo. 555, 20 S.W. 293, 1. c. 294. We restate with approval what was said in Burger v. Missouri Pac. R. Co., 112 Mo. 238, 20 S.W. 439, 1. c. 441, in a strikingly similar factual situation: “Common experience and observation teach us that due care on the part of an infant does not require the judgment and -thoughtfulness that would be expected of an adult person under the same circumstances. In the conduct of a boy, we expect to find impulsiveness, indiscretion, and disregard of danger, and his capacity is measured accordingly. A boy may have all the knowledge of an adult respecting the dangers which will attend a particular act, but at the same time he may not have the prudence, thoughtfulness, and discretion to avoid them which are possessed by the ordinarily prudent adult person. Hence the rule is believed to be recognized in all the courts of the country that a child is not negligent if he exercise that degree of care which, under like circumstances, would reasonably be expected of one of his years and capacity. Whether he used such care in a particular case is a question for the jury. Beach, Contrib.Neg. § 117; Eswin v. [St. Louis, I. M. & S.] Railway Co., 96 Mo. [290] 295, 9 S.W.Rep. 577; O’Flaherty v. [Union] Railway Co., 45 Mo. 70; Plumley v. Birge, 124 Mass. 57; Meibus v. Dodge, 38 Wis. 300; [Western 6 A.] Railroad Co. v. Young, 81 Ga. 397, 7 S.E.Rep. 912.”

We have found fifteen cases involving the question whether under varying factual situations boys, ranging in age from 6 to 17 years, were guilty of contributory neg-' ligence in crossing over or crawling under trains standing at crossings. In fourteen of the fifteen cases the question of contributory negligence was submitted to the jury, and in those instances in which the point was raised it was held to be a jury question and not one for the court to decide. In only one of the fifteen cases did the court hold the boy guilty of contributory negligence as a matter of law.

Plaintiff was in the first year of his teens. There is nothing to indicate that he was a precocious or unusually perceptive child for his age. His mother considered that he was an average student in school. Having lived in the neighborhood of the railroad yards for a year, however, and having almost daily observed trains stopped at this crossing, plaintiff was familiar with trains, had become accustomed to their stopping for considerable lengths of time at this crossing, and had doubtless lost the fear naturally associated with first experiences with trains. Plaintiff knew that this train had been standing stationary for from 11 to 15 minutes. He had seen trains stand still at this crossing for as much as 2 hours. It was 10 p. m. and the standing train was blocking his passage on his way home for the night. Many times he had seen people of all ages climb up over or go under trains blocking that crossing. Although he had been warned not to get on the trains and although some three years after the event he testified that he knew it was dangerous, it was for the jury to determine whether at the time he reasoned with respect to the danger. If he considered it at all, “the degree of danger would be as likely to attract as to repel him.” Rauch v. Lloyd & Hill, (1858) 31 Pa. 358, 371. He did wait for several minutes (from 2 to 6 minutes) for the train to move off the crossing but it remained stationary, which could have been regarded as an assurance that it was not going to move. He did look both to the north and to the south, we may presume for the purpose of determining whether there was a “live” engine attached to the train or an engine approaching to connect with the train. He heard no bell, whistle or other type of warning. He did not believe the train would move. “He acted like a child, and he is not to be judged as a man.” Rauch v. Lloyd & Hill, supra, 31 Pa., 1. c. 371. We doubt “whether most boys, grown familiar with trains of cars by daily observation, would not, in like circumstances, have acted as this boy acted. To many active and enterprising children, risks not absolutely appalling, are attractive; * * *. [T]he adjudged cases in the books show that children do frequently incur equal, or even greater, hazards. We cannot, therefore, account this boy’s conduct unnatural or extravagant.” Pennsylvania R. Co. v. Kelly, (1858) 31 Pa. 372, 378. Reasonable minds might differ as to the inferences to be drawn from his conduct; might find that plaintiff honestly, if mistakenly, believed that the train would not start, so that the danger from attempting to cross the train was not obvious and apparent to him, considering his intelligence, discretion, knowledge and experience; and might differ on the question whether he was guilty of negligence of more or less degree than the negligence of which the railroad employees may have been guilty.

Under the substantive law of Arkansas on the question of contributory negligence of minors; the reasoning in the foregoing cases, and the evidence favorable to plaintiff, we rule that it was for the jury and not for the court to determine the question of plaintiff’s fault, and there was no error in overruling the railroad’s motion for a; directed verdict on the ground that plaintiff was guilty of contributory negligence as a matter of law at least equal to, if not in excess of, any negligence established on the part of the railroad.

Another contention made by the railroad under this point is that plaintiff is bound by the testimony of his principal witness, Donna Warner, that the train was jerking when plaintiff first climbed thereon. Mrs. Warner testified by deposition that she was in a house at 922 Poplar Street, seventy-five yards from the cross-' ing, talking on the telephone; that she heard a train getting ready to start, making noises, jerking, “taking the slack up.” Because of the noise she went to shut the front door so she could hear better. She looked out and saw that the train was not moving — not rolling, “just jerking”; “just getting ready to start.” She saw plaintiff “getting on it,” some 10 to 15 feet from the crossing at 9th and Poplar. The boy was “on the train.” She thought he had one foot on a ladder. She closed the door, went back to the telephone and had barely sat down when she heard the boy screaming. She went to the front and saw him crawling, dragging himself, and screaming for help. The railroad contends that this testimony was uncontradicted and that plaintiff is bound by the uncontradicted testimony of his own witness; that this testimony shows that plaintiff boarded the train after it was “getting ready to go,” while it was “jerking” — jerking but not rolling; after the occurrence of sufficient noise to interfere with telephone conversations some distance from the crossing, and therefore sufficient to demonstrate that plaintiff was clearly guilty of contributory negligence as a matter of law when he climbed aboard a train that he must have known in advance was either moving or 'about-to move. In our opinion'Mrs. Warner’s testimony is contradicted by plaintiff’s testimony that the train was not moving; that he waited to see if it was going to move, and that when “it didn’t” move he started up on it; that before he started across the train he did not hear a bell sounded, a whistle, or any type of warning. Any type of warning would necessarily include the jerking noises attendant on preparation to start. The railroad’s contention must be disallowed under the rule that a party is not bound by the unfavorable testimony of one of his witnesses if that testimony is contradicted by that party’s other evidence, Reece v. Reed, Mo.Sup., 326 S. W.2d 67, 71 [5], and that the jury may believe all of the testimony of any witness or none of it, or may accept it in part and reject it in part. Young v. Kansas City Southern Ry. Co., Mo.Sup., 374 S.W.2d 150, 153 [3]; Burr v. Singh, 362 Mo. 692, 243 S.W.2d 295.

For its second point the railroad raises several objections to verdict-direct,ing Instruction No. 1. We will consider .those objections carried forward in the ¡argument portion of the brief. It is said that “a binding instruction must incorporate all of the essential conditions of the case,”, but it is not pointed out what essential conditions of liability are missing .except that in the last part of the argument it is objected that the instruction omits a requirement of a finding of knowledge of plaintiff’s presence on the train, an objection we treat in the next paragraph. It is argued that the instruction was in the .abstract and constituted a comment on the evidence, in that it referred to the violation of the ordinance. It is said that the violation of an ordinance is not negligence per se but only evidence of negligence and that violation of the ordinance was not a factor here because not the proximate cause of the accident; that the harm resulted from the alleged fact that a stopped train suddenly started forward and moved without warning to plaintiff. We find no error in declaring to the-jury that any train which is blocking any street crossing within the city limits of North Little Rock may not do so for longer than five minutes at one time, and in requiring the jury to find that defendant’s employees blocked a public street crossing with the train and allowed it to remain in a position to block the crossing for longer than five minutes at one time, as a prerequisite to a verdict for plaintiff. This was an essential basis fort the further requirement that the jury find that plaintiff climbed onto the train during the period the train remained there in excess of the allowable time limit. If there had been no' such requirement it could have been argued that the instruction failed to exclude the possibility that he was a trespasser at the time. The material objected to required a finding of facts which as a matter of law took plaintiff out of the classification of trespasser and gave him the right to mount the train for the purpose of climbing over and through it, in the exercise of his right of passage along the public street at that time and place.

The only other assigned error which was developed in the argument is that Instruction No. 1 is' erroneous for failure to require a finding that the railroad knew or should have known of plaintiff’s presence on the train. While this is the rule of liability with respect to trespassers it has no bearing on this case, for plaintiff was not a trespasser, under his evidence. The rule in Arkansas,' where a child is injured while attempting to cross a track upon which a train has been standing for a time beyond the lawful period, is that the railroad is “under duty to travelers who attempt to cross not to start the train without reasonable warning.” This rule was laid down in a case in which there was no evidence that the trainmen had knowledge of plaintiff’s presence on or about the train or in a place of danger. St. Louis Southwestern Ry. Co. v. Christian, 164 Ark. 65, 261 S.W. 297. The same rule obtains in Missouri. In Burger v. Missouri Pac. R. Co., 112 Mo. 238, 20 S.W. 439, it was held that a submissible case was made notwithstanding “[n]one of the men in charge of the train knew that plaintiff was at the time attempting to cross over it, or that he was about it, or in any wise in danger,” 20 S.W., 1. c. 440. In Thompson v. Missouri, K. & T. Ry. Co., 93 Mo.App. 548, 67 S.W. 693, it was held not error to refuse an instruction which told the jury that the defendant’s employees in charge of the train were under no obligation to give the plaintiff (attempting to pass between two cars of a freight train while it was blocking a public street) any warning unless they knew of his perilous condition. In 44 Am. Jur. Railroads § 504, p. 744, it is stated that “In such a case (where a railroad blocks a crossing for a longer time than the law permits), it becomes a question for the jury whether or not it is negligence for the company’s servants to move the train without giving timely warning of their intention to do so, and it is immaterial that they did not have notice that some particular person was in a position of danger (Parentheses and italics supplied.) And see Stratton v. Southern Ry. Co., 190 F.2d 917 (4th Cir. 1951), 27 A.L.R.2d 363. Notice of plaintiff’s presence on the train was not an element of his case, under plaintiff’s theory, and its omission from the required findings of fact in the verdict-directing instruction did not constitute error. To the extent that Cherry v. St. Louis & S. F. R. Co., 163 Mo.App. 53, 145 S.W. 837 [4], militates against the principle here announced it is not to be followed.

The judgment is affirmed.

WELBORN and HIGGINS, CC., concur.

PER CURIAM.

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

All of the Judges concur.

      . Cleveland, C. C. & St. L. R. Co. v. Keely, 138 Ind. 600, 37 N.E. 406; Trent v. Norfolk & W. Ry. Co., 167 Ky. 319, 180 S.W. 792; McMahon v. Northern C. Ry. Co., 39 Md. 438; Henderson v. St. Paul & D. Ry. Co., 52 Minn. 479, 55 N.W. 53; Burger v. Missouri Pac. R. Co., 112 Mo. 238, 20 S.W. 439; Thompson v. Missouri, K. & T. Ry. Co., 93 Mo.App. 548, 67 S.W. 693; Lake Erie & W. R. Co. v. Mackey, 53 Ohio St. 370, 41 N.E. 980, 29 L.R.A. 757; Phillips v. North Carolina R. R. Co., 257 N.C. 239, 125 S.E.2d 603; Rauch v. Lloyd & Hill, 31 Pa. 358; Pennsylvania R. Co. v. Kelly, 31 Pa. 372; Todd v. Philadelphia & R. Ry. Co., 201 Pa. 558, 51 A. 332; Chicago, R. I. & G. Ry. Co. v. Johnson, Tex.Civ.App., 111 S.W. 758; Brown v. Panhandle & Santa Fe Ry. Co., Tex.Civ.App., 294 S.W.2d 223; Gesas v. Oregon Short Line R. Co., 33 Utah 156, 93 P. 274, 13 L.R.A.,N.S., 1074; Carmer v. Chicago, St. P., M. & O. Ry. Co., 95 Wis. 513, 70 N.W. 560.


source: Caselaw Access Project

author: HOLMAN, Judge. EAGER, Chief Justice

license: Public Domain

text:
    FOREMOST DAIRIES, INC., a Corporation, and National Dairy Products Corporation, a Corporation, Respondents, v. Don THOMASON, Commissioner of Agriculture of Missouri, and Thomas F. Eagleton, Attorney General of Missouri, Appellants. NATIONAL DAIRY PRODUCTS CORPORATION, a Corporation, Respondent, v. Don THOMASON, Commissioner of Agriculture of Missouri, and Thomas F. Eagleton, Attorney General of Missouri, Appellants.
    No. 50046.
    Supreme Court of Missouri. En Banc.
    Dec. 14, 1964.

      Kuraner, Freeman, Kuraner, Oberlander & Lamkin, and Charles F. Lamkin, Jr., Kansas City, Wayne D. Hudson, General Counsel, Foremost Dairies, Inc., San Francisco, Cal., of counsel, for Foremost Dairies, Inc.
    Morrison, Heclcer, Cozad & Morrison and Martin J. Purcell, Kansas City, Richard L. Johnston, Chicago, Ill., of counsel, for National Dairy Products.
    Rozier, Carson, Inglish, Nacy & Monaco, John W. Inglish, Jefferson City, of counsel for both respondents.
    Thomas F. Eagleton, Atty. Gen., John H. Denman, Asst. Atty. Gen., Jefferson City, for appellants.
    Gray L. Dorsey, Chesterfield, Riddle, O’Herin & Newberry, Malden, amici curias.
   HOLMAN, Judge.

The respondents, Foremost Dairies, Inc., and National Dairy Products Corporation, instituted this action for a declaratory judgment to determine the validity of rules promulgated by the appellant, Don Thom-ason, Commissioner of Agriculture of Missouri, under the Unfair Milk Sales Practices Act, §§ 416.410-416.560, and for a determination of the validity, under the Act, of pricing systems for milk products employed or proposed to he employed by respondents. The trial court held the rules invalid and issued an injunction against their enforcement. The Commissioner of Agriculture and the Attorney General, who was also a party to the cause, have appealed from such judgment.

We have appellate jurisdiction because state officers, as such, are parties. Mo. Const. (1945), Art. V, § 3, V.A.M.S.

The appeal was originally heard in Division One. An opinion was prepared but failed of adoption and the case was transferred to Court en Banc. Additional briefs were filed and the cause was reargued and resubmitted. Portions of the aforementioned opinion are here adopted without the use of quotation marks.

The Unfair Milk Sales Practices Act prohibits the sale of milk or milk products at less than cost by various handlers in the milk distribution system “with the intent or with the effect of unfairly diverting trade from a competitor, * * * or of destroying competition, or of creating a monopoly.” §§ 416.415, 416.425, and 416.430. Discrimination in prices between any of the cities, towns, municipalities or counties in the state by processors or distributors, with similar intent or effect, in the sale of any milk product furnished from the same plant is prohibited. Differences in prices which reflect differences in transportation costs are not in violation of the prohibition. § 416.420. Combination sales of milk products with other products, at a combined price which is less than the aggregate of the prices for which each is offered for sale, are prohibited when done with the intent or effect above mentioned. § 416.435.

The sections of the Act primarily involved herein provide, in part, as follows:

Section 416.420. “1. No processor or distributor shall, with the intent or with the effect of unfairly diverting trade from a competitor, or of otherwise injuring a competitor, or of destroying competition, discriminate in price in the sale of any milk product furnished from the same plant between any of the towns, cities, municipalities or counties of this state; except that no violation results from different prices which reflect, in the case of a processor, the actual transportation cost from point of processing to point of sale, and, in the case of a distributor, the actual transportation cost from point of purchase to point of resale.”
Section 416.440. “1. No milk processor or distributor shall, with the intent or with the effect of unfairly diverting trade from a competitor, or of otherwise injuring a competitor, or of destroying competition, or of creating a monopoly, give or offer to give any milk product purchaser any rebate, discount, free service or services, advertising allowance, pay for advertising space used jointly, donation, free merchandise, rent on space used by the retailer for storing or displaying the milk processor’s or distributor’s merchandise, financial aid, free equipment, or any other thing of value ; except the bona fide return by a cooperative association to its members on a patronage basis of the savings realized on products sold and distributed to the members or patrons.
“2. Proof of the giving or offer to give anything of value is prima facie evidence of a violation of this section.
******
“6. This section does not prevent a discount of two per cent or less for payment on or before a certain date.”

Licenses are required of milk products manufacturers, processors and distributors. The licenses are issued by the Commissioner of Agriculture and violation of the Act is the basis for action by the commissioner to suspend or revoke such licenses. § 416.490. In addition, the commissioner is authorized to obtain injunctive relief against violations. § 416.450. A person injured by violation of the Act is authorized to sue to enjoin the violator and is given a right of action for triple damages. § 416.455.

Section 416.460 authorizes the Commissioner of Agriculture to promulgate rules' and regulations to carry out the purposes of the Act. Pursuant to this authority the commissioner promulgated the rules here challenged. They are as follows:

“10. In determining cost to the processor or distributor for retail sales, all retail stops and routes in a given area should be combined and averaged to obtain a uniform cost for such area.
“In determining cost to the processor or distributor for wholesale sales, all wholesale stops and routes in a given area should be combined and averaged to obtain a uniform cost for such area.
“11. Volume pricing is a discount in price and results in a discrimination in price between localities and is therefore prohibited under the Act.
“12. Public school districts, agencies and institutions of the State of Missouri and its political subdivisions are not within the purview of Sections 416.410 to 416.560, RSMo 1959, and sales of milk products to them are not regulated by the Unfair Milk Sales Practices Act.”

Insofar as Rules 10 and 11 are concerned, respondents’ petition charges essentially that such regulations prevented them from establishing volume price differentials; that, as applied to such pricing practice, those regulations are unreasonable, capricious, an abuse of discretion, beyond the powers of the commissioner and, therefore, void. The petition further charged that, if the Act is construed to authorize such regulations, the Act (for reasons therein specifically alleged) is to that extent unconstitutional. They also charge that, insofar as such regulations would be authorized by the Missouri Act, the Missouri law is in conflict with the Robinson-Patman Act (15 U.S.C. § 13) and is to that extent void. Rule 12 was attacked as unreasonable, arbitrary, capricious and beyond the authority of the commissioner.

Respondents are licensed under the Act as processors of milk products. This litigation is based primarily upon their operation in the Kansas City vicinity. Respondents’ evidence showed that in their operations various methods of distribution of milk and milk products are employed. They sell such products directly to consumers on home delivery routes. They deliver the products on wholesale routes to grocery stores, restaurants, and similar customers who purchase for resale. Some wholesale customers purchase the products at respondents’ plants and provide their own distribution system. Some wholesale customers purchase on a “drop shipment” basis whereby the customers purchase on a reduced delivery basis with deliveries less frequent than to other customers. The size of the customer’s purchase may vary from one quart of milk by a single retail customer to hundreds of quarts by wholesale customers.

Prior to the passage of the Unfair Milk Sales Law respondents and others similarly engaged sold milk and milk products at prices which varied according to the volume purchased and the method of delivery. The law became effective on August 29, 1959. On October 8, 1959, Mr. J. S. Williamson, then Commissioner of Agriculture, issued a communication addressed to all milk processing plants distributing milk in Missouri, which was received by the respondents. In this communication the commissioner stated: “Volume pricing is not prohibited provided it reflects the actual savings or efficiencies in relation to other volumes.”

Subsequently, on January 31, 1962, the present Commissioner of Agriculture, Mr. Thomason, issued a bulletin in which he stated that changes in the interpretation expressed on October 8, 1959, “might be proper at the present time.” The policy of the commissioner was expressed by Mr. Thomason as follows:

“4. Volume pricing is not prohibited provided it is not a discount in price and reflects the actual savings or efficiencies in relation to other volumes.
“5. All retail stops and routes in a given area should be combined and averaged to obtain a uniform retail cost for such area. All wholesale stops and routes in a given area should be combined and averaged to obtain a uniform wholesale cost for such area.”

In November 1961, National, operating through its Sealtest Division in Kansas City, placed in effect a system of pricing for sales on its home delivery routes of milk products under which all customers would be charged the same price for its products. However, a service charge was added, depending upon the volume of the customer’s purchase, per delivery. On the purchase of the equivalent of six quarts of milk or more, there was no service charge. On the equivalent of four or five quarts, the service charge was per quart and on three quarts or less lj£0 per quart.

On the basis of Rules 10 and 11, the commissioner declined to approve the proposed schedule and threatened to take action against Sealtest if it was placed in effect. Such threatened action produced this litigation.

In February 1962, Sealtest proposed to place in effect a wholesale “drop delivery” pricing plan under which customers would receive a “drop delivery savings * * * based upon dollar purchases on each delivery.” The schedule of “savings” was as follows:

“DOLLAR PURCHASE PER DELIVERY PER CENT SAVINGS
$ 0 14.99 None
15.00 — 21.99 3%
22.00 — 36.99 4%
37.00 — 59.99 5%
60.00 — 89.99 6%
90.00 —Over 7%”

The Commissioner of Agriculture notified Sealtest that, in his opinion, this system of “savings” conflicted with the Act and directed its discontinuance. The plan was discontinued.

On April 3, 1962, the commissioner promulgated Rules 10 and 11 here involved, which became effective on April 13, 1962. In May 1962, Sealtest resubmitted to the commissioner its proposed drop delivery savings pricing schedule and also an alternate pricing schedule under which the price of the product would vary, depending upon the number of cases purchased on cash delivery. An example of the schedule proposed is as follows:

Foremost Dairies, Inc., has a similar pricing system for its home deliveries. At the time of the hearing they had no wholesale volume prices, but previously their wholesale prices had given a graduated “savings,” depending upon the volume purchased, to a maximum of 7% reduction in list price.

According to respondents’ evidence their sales of milk on home delivery routes in the Kansas City area have declined considerably in recent years. Five years prior to this action Foremost had 96 home delivery routes in Kansas City. At the time of the hearing they had 44. Reduction in volume of sales was an estimated 60%. Sealtest in 1955 had 78 retail routes. At the time of the hearing they had 38, with a volume loss of 40%.

Respondents attributed the reduction in the home delivery business to the change in buying habits which had diverted a large volume of purchases to the supermarkets. They also attributed the reduction to the increased volume handled by independent distributors who purchased products from other processors and distributed them through non-union drivers with emphasis on sales to larger volume purchasers only. According to witnesses for both respondents, a retail price differential system was essential to the preservation of their retail home delivery routes.

Witnesses for the respondents testified that each of the companies had made detailed studies of distribution costs in the Kansas City area. Foremost made a study of retail distribution costs for the months of March and May 1962, which, according to them, were typical months. Costs were allocated either to the route or on a unit basis. Costs allocated to the former included all direct costs of the operation of the routes such as truck expenses, driver’s salary, supervisor’s salary, etc. Unit costs included such things as advertising, administrative expenses, and other items which could not be attributed directly to the route operation. On such basis, a cost figure of $.3993 per serve or customer stop and $.0228 per unit was arrived at. Using these figures, Foremost demonstrated that its average delivery and sales cost per unit ranged from $.4221 per unit for serves of one unit to $.0627 per unit for serves of ten units.

Sealtest presented evidence of a study of its retail delivery costs based on eighteen route days’ study in Kansas City. It showed a total cost for 1,512 deliveries of 6,395 units of $754.56 or $.1180 per unit. The delivery cost per unit per delivery varied from $.2606 per unit for delivery of one to three units to $.0621 per unit for delivery of six units and over. Sealtest also presented evidence of a study of wholesale delivery costs for the week ending December 3, 1960. The study showed an allocation of delivery costs to “Volume Per Delivery” brackets and a percentage of sales ranging from 30.19% on dollar sales from 0-$14.99 to 6.33% on dollar sales from $90-Over per delivery.

Dr. David A. Clarke, Jr., Professor of Agricultural Economics at the University of California, who had made extensive studies of the marketing of dairy products,, testified on behalf of respondents. Based, upon his study of the cost of milk delivery at wholesale and retail in the State of California and the problems of volume pricing, he expressed the opinion that uniform pricing per unit of milk, at wholesale and retail to the customer regardless, of the volume purchased, is “not only-unreal from the economic standpoint, but it presents some important problems of equity.” He stated his opinion that “fiat, pricing under conditions of differential' cost, leads to substantial pressures, which tend to distort the normal operation of the marketing system.” He stated that it. tended to produce “vertical integration,”' a system under which retail stores, particularly chain stores, have their own milk processing facilities. Such system removes, the larger customers from the market and leaves the remaining smaller customers to be served by regular distributors at increased cost. He also stated that flat pricing, tends to encourage unfair trade practices,, such as secret rebates and free financial' aid. Doctor Clarke distinguished between earned and unearned discounts. In the-former category he included discounts for cash and discounts related to volume, and in the latter “a secret rebate, under-the-counter deals, things of this kind, designed primarily to gain a competitive advantage, in the market situation.” In his opinion volume pricing in the dairy industry is not injurious to competition, but improves competition.

Dr. Charles B. Saunders, Associate Professor of Business Administration at the University of Kansas, testified that volume pricing is a common and accepted business practice throughout the business world. He expressed the opinion that the pricing of milk products to reflect differences in cost of processing, sale and delivery, resulting from different delivery methods and quantities sold, is “economically sound and defensible” and would not lead to destroying competition or unfairly diverting trade from competitors.

No evidence was offered by appellants.

The trial court found that the respondents’ volume pricing systems were the result of competitive conditions and that the price differentials which they afforded were “fully justified by differences in plaintiffs’ costs of serving such customers, and make only due allowance for differences in the cost of processing, sale and delivery resulting from the differing methods or quantities in which such products are sold and delivered. These pricing systems are applicable throughout the entire area of the State of Missouri served from plaintiffs’ plants, and do not differ from locality to locality.” The court further found that flat pricing would injure competition and that “no adverse effects upon the competitive situation in the sale of milk products have resulted from * * * introduction” of respondents’ volume pricing schedules.

The court stated the following conclusions of law:

“2. The systems of cost-justified volume pricing used by plaintiffs were not introduced with the intent of, and do not have the effect of, unfairly diverting trade from a competitor, or of otherwise injuring a competitor, or of destroying competition, or of creating a monopoly within the meaning of 416.420 or 416.440.
“3. The systems of cost-justified volume pricing shown in evidence and used by the plaintiffs do not constitute the giving or the offer to give a ‘discount’ within the meaning of 416.440. It was the legislative purpose in passing the Act, that the term ‘discount’ as used in that section should connote special and discriminatory concessions to individual customers, concessions which are not given pursuant to a system of cost-justified price differentials available to all customers.
“4. Such systems of cost-justified volume pricing do not constitute discriminations in price 'between any of the towns, cities, municipalities, or counties of this state’ within the meaning of 416.420. That section is without application to volume pricing systems which are the same in each town, city, municipality and county supplied by a plant.
“5. It was not the intent of the legislature that § 416.440 would require that all purchasers of milk products from a processor pay the same price, that is, that the housewife who has milk delivered to her door would pay the same price as the distributor who picks up the product at the dock.
“6. 416.420 and 416.440, if construed to prohibit cost-justified volume pricing, would be unconstitutional for the reason that they would constitute a special law where a general law could be made applicable, and would deny to plaintiffs the equal protection of the law, and would deprive them of their property without due process of law, all in violation of the provisions of Sections 2 and 10 of Article I, and Section 40(30) of Article III of the Constitution of Missouri, and of the 14th Amendment to the Constitution of the United States.
“7. 416.420 and 416.440, if construed to prohibit cost-justified volume pricing, would conflict with an Act of Congress, namely, the Robinson-Patman Act (15 U.S.C., Sec. 13), and to that extent be unconstitutional and void.
“8. Rule 11 of the Commissioner, and Rule 10 to the extent it prohibits such systems of cost-justified volume pricing, are beyond the powers of the Commissioner under the Act and are void, for the reasons hereinabove stated.
“9. Rule 12 of the Commissioner is beyond the powers of the Commissioner under the Act and is void.”

In Borden Company v. Thomason, Mo. Sup., 353 S.W.2d 735, the constitutionality of the Unfair Milk Sales Practices Act was upheld against an attack on numerous constitutional grounds. While the practice of volume pricing is mentioned in the Borden case, the court did not determine therein whether volume pricing is a “discount” within the meaning of § 416.440. At the time of that decision volume pricing was not prohibited by the official interpretation then in effect.

Upon this appeal it is the primary contention of appellants that the plain and unambiguous language of § 416.440 prohibits discounts and that volume pricing or quantity discounts (even though cost-justified) are, in fact, discounts and therefore are encompassed within the meaning of the word “discount” as used in said section. Respondents, on the contrary, assert that the prohibition was aimed only at discounts granted arbitrarily, usually secret “under-the-table” deals, and was not intended to prohibit uniform, cost-justified differential prices according to quantity purchased which are available to all customers.

The history and purposes of the Unfair Milk Sales Practices Act are discussed in Borden, supra. It was enacted upon the recommendation of an interim legislative committee following a series of destructive price wars in which milk had sold for as little as eight cents per half gallon in some areas. The committee concluded that legislation providing for marketing regulations was essential for the well being of the dairy industry, particularly for the protection of the small distributor and the preservation of the small dairy herds in this state. The primary purpose of the Act was to prevent the sale of milk products for less than cost. It also contains provisions prohibiting area price discrimination as well as rebates, discounts, allowances, etc. In general, in order to constitute a violation, all of the practices prohibited must be shown to have been done with the intent or effect of unfairly diverting trade from a competitor or of destroying competition or of creating a monopoly.

For reasons which will hereinafter appear, we have concluded that the word “discount,” as used in § 416.440, was not intended by the legislature to include volume pricing or quantity discounts which are cost-justified price differences available to all customers. It follows from the foregoing that the commissioner had no power under the Act to promulgate Rule 11 and it is therefore void.

In view of our stated conclusion it will be unnecessary to give further consideration to certain other alternative contentions which were presented to and decided by the trial court. They are (1) the fact question as to whether the cost-justified volume pricing practices used by respondents were introduced with the intent of, or had the effect of unfairly diverting trade, etc., (2) the question of whether §§ 416.420 and 416.440, if construed to prohibit cost-justified volume pricing, would be unconstitutional for reasons stated in the conclusions of the trial court, and (3) the question as to whether said sections, if construed to prohibit cost-justified volume pricing, would be to that extent void because in conflict with the Robinson-Patman Act.

Rule 11 reads as follows: “Volume pricing is a discount in price and results in a discrimination in price between localities and is therefore prohibited under the Act.” We interpret that rule as an effort by the commissioner to make volume pricing a violation of both of the sections under discussion. He provided that volume pricing is a discount in price, which could be a violation of § 416.440, and that it “results in a discrimination in price between localities,” which is prohibited by § 416.420. We are of the opinion that the commissioner was clearly in error in formulating the last-mentioned conclusion. It is our view that § 416.420 may not reasonably be construed to prohibit volume pricing. Statutes prohibiting locality discrimination in one form or another have been in effect for a considerable time. The general Missouri statute on this subject, § 416.120, was originally enacted in 1907 (Laws 1907, p. 234). Similar acts are in effect in a number of other states. See Annotations 52 A.L.R. 169, 163 A.L.R. 1124. Central Lumber Co. v. South Dakota (1912), 226 U.S. 157, 33 S.Ct. 66, 57 L.Ed. 164. The general object of such statutes is to prevent a large seller doing business in a number of localities in a state from lowering his prices temporarily in one area, and reimbursing himself for any loss incurred out of profits from higher prices received in another locality, until he had driven out his local or smaller competitors and obtained a monopoly of the business. We find no reported decision in which the suggestion has been advanced that these statutes prohibit the widely used practice (see Bruce’s Juices, Inc. v. American Can Co., 330 U.S. 743, 67 S.Ct. 1015, 91 L.Ed. 1219) of quantity discounts. Under a system of volume pricing the purchaser would pay the same price for the quantity purchased in each area. If we assume that a distributor sells milk in both Kansas City and Liberty at a price of 21 cents per quart or two quarts for 40 cents, we do not think that the legislature intended, by § 416.420, to provide that he is guilty of area price discrimination because a purchaser in Kansas City who bought two quarts paid less per quart than a purchaser in Liberty who purchased only one quart.

We will next discuss the question as to whether volume pricing is prohibited by § 416.440. Where the meaning of a statute is clear there is no occasion for its construction and the courts will apply it as written. However, when the meaning is doubtful it becomes the duty of the courts to construe it. It is elementary that the primary rule to be applied in the construction of a statute is to ascertain and give effect to the legislative intent. Taney County v. Empire District Electric Co., Mo.Sup., 309 S.W.2d 610.

As stated, appellants contend that the meaning of the word “discount” in § 416.440 is clear and unambiguous. They say that it means all discounts, including quantity discounts. That contention is considerably weakened by the fact that two commissioners obviously had great difficulty in arriving at that meaning. Commissioner Williamson ruled that cost-justified volume pricing was not prohibited by the Act. Subsequently, Commissioner Thomason reaffirmed that ruling but added the phrase, “provided it is not a discount in price.” We doubt that the added proviso changed the original ruling. Two months later the commissioner promulgated Rule 11 which stated that the Act prohibited all volume pricing. Ordinarily, in the interpretation of statutes, courts will give consideration to the administrative interpretation thereof. England v. Eckley, Mo.Sup., 330 S.W.2d 738. Here, however, in view of the difficulties encountered by the commissioner, we can give no weight to his final interpretation of the' Act as embodied in Rule 11. We have concluded that when the word “discount” in § 416.440 is considered in connection with the history and purposes of the Act, and in the light of the facts and circumstances existing in this case, its meaning is ambiguous and that it becomes our duty to construe said section.

Appellants also contend that in the construction of § 416.440 we should apply the maxim Expressio unius est exclusio alterius (expression of one thing is the exclusion of another). They point out that subsection 6 of that section permits a discount of 2% or less for payment on or before a certain date. It is argued that since one specific discount is exempted it should be inferred that all other discounts are included in the prohibitory provisions of the section. The quoted maxim, however, “is merely an auxiliary rule of statutory construction, to be applied with great caution; * * * is not of universal application, or conclusive as to the meaning of a statute; and it does not constitute a formula for construction to be arbitrarily applied.” 82 C.J.S. Statutes § 333b, (1953). When the weight to be accorded the rule in question is balanced against a consideration of the history and purposes of the Act, as well as certain other rules of construction hereinafter discussed, we cannot give it decisive effect.

In support of their contention as to the proper interpretation of § 416.440, respondents strongly rely on the maxim noscitur a sociis (it is known by its associates). “The rule or maxim is to the effect that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it. Under this rule of nos-citur a sociis, general and specific words, capable of analogous meaning, when used together, take color from each other, so that general words are restricted to a sense analogous to the less general, and the meaning of a word may be enlarged or restrained by reference to the object of the whole clause in which it is used.” 66 C.J.S. pp. 607, 608 (1950). The maxim has been applied in a number of cases in this state, including State v. Hyde, 297 Mo. 213, 248 S.W. 920 [3], State v. Hagen, Mo.App., 130 S.W.2d 250 [1], and State ex rel. Crutcher v. Koeln, 332 Mo. 1229, 61 S.W.2d 750 [9]. The rule applies to related clauses as well as related words. State v. Hagen, supra. In § 416.440(1), the prohibition is against giving any purchaser “any rebate, discount, free service or services, advertising allowance, pay for advertising space used jointly, donation, free merchandise, rent on space used by the retailer for storing or displaying the milk processor’s or distributor’s merchandise, financial aid, free equipment, or any other thing of value.” Disregarding for the moment the word “discount,” it will be noted that the other words and clauses all carry the connotation of a donation or a discriminatory gift. The words indicate the return of a part of the purchase price or the giving of something of value as an inducement to buy the seller’s products and thus to divert trade from a competitor, etc. Applying the maximum noscitur a sociisj in considering the meaning of “discount” in connection with the related words and clauses, would indicate that it refers to an arbitrary, predatory reduction in price which is made in order to obtain business and thus divert trade from a competitor. In the manner used, the word does not suggest any intent to prohibit the use of volume pricing policies which do no more than reflect varying distribution costs, sometimes characterized as earned discounts, which are available to all customers of the distributor. In purchasing a larger quantity at a lower price the buyer is not receiving something for nothing, but in return for a larger order is receiving an earned saving the distributor is able to achieve by reason of the quantity sold.

Another rule of construction we consider applicable is that the law “favors constructions which harmonize with reason, and which tend to avoid unjust, absurd, unreasonable or confiscatory results, or oppression.” Laclede Gas Co. v. City of St. Louis, 363 Mo. 842, 253 S.W.2d 832, 835. In that connection we have said that “in the construction of statutes which are not clear in meaning the results and consequences of any proposed interpretation of the statute may properly be considered as a guide as to the probable intent of the lawmaker from the language used.” Bragg City Special Road Dist. v. Johnson, 323 Mo. 990, 20 S.W. 2d 22, 25, 66 A.L.R. 1053. If we assume that volume pricing is prohibited by the Act, then respondents will be required to charge the same price per quart of milk for a single delivery of 1,000 quarts to a large supermarket as they would charge for 10' quarts delivered to a neighborhood grocer. Such a practice is entirely unrealistic and would lead to unfortunate results. It is clearly a discrimination against the large purchaser. Dr. Clarke testified that it would lead to “vertical integration,” which is the term applied when large retail and chain store outlets obtain their own processing and distribution facilities. Another result would be that many large distributors would discontinue selling to small-quantity purchasers and would sell to large-quantity purchasers only. The small purchasers would be required to buy from small distributors who would sell only to them and they would likely pay a higher price than would be charged under a system of volume pricing.

We also have in mind that volume pricing or quantity discounts is a practice which has been widely used in this nation throughout the history of our economy. It is economically sound and is not considered as an unfair competitive practice. “Quantity discounts are among the oldest, most widely employed and best known of discount practices. They are common in retail trade, wholesale trade, and manufacturer-jobber relations. They are common in regulated as well as unregulated price structures.” Bruce’s Juices, Inc. v. American Can Co., 330 U.S. 743, 745, 67 S.Ct. 1015, 1016, 91 L.Ed. 1219, 1223.

We are reluctant to attribute to the legislature an intent (in using the word “discount” in § 416.440) to prohibit the practice of cost-justified volume pricing in view of the widespread approval of that practice in •our economy and the damaging results which would flow from its elimination. Under the circumstances heretofore stated, we think that the legislature, if it had intended to prohibit cost-justified volume pricing, would have expressly so stated in •the statute.

As indicated, we rule that the Act did not .authorize the commissioner to promulgate Rule 11, and that rule is therefore void.

Very little is specifically said in any of the briefs concerning the validity of Rule 10, which reads as follows: “In determining cost to the processor or distributor for retail sales, all retail stops and routes in a given area should be combined and averaged to obtain a uniform cost for such area. In determining cost to the processor or distributor for wholesale sales, all wholesale stops and routes in a given area should be combined and averaged to obtain a uniform cost for such area.” The trial court concluded that said rule, to the extent it prohibits cost-justified volume pricing, is beyond the power of the commissioner under the Act and is, to that extent, void. That conclusion is undoubtedly correct. Since we have ruled that the Act does not prohibit cost-justified volume pricing it would necessarily follow that the commissioner would not have the authority to make a rule the effect of which would be to prohibit that practice. We can readily visualize that the application of the provisions of Rule 10 might result in the establishment of an artificial cost figure which would be higher than the price the distributor would charge the large volume purchaser under a cost-justified volume pricing system based upon the actual cost of delivery. In that situation the distributor or processor would be prohibited from using the volume pricing system because of the provision of the Act which prohibits the sale of milk products for less than cost. No doubt there are other ways in which Rule 10 would interfere with the operation of a volume pricing system but the foregoing is sufficient to serve as an example. It may be that some sort of satisfactory process could be devised to determine the average cost of. the product (see Borden, supra), but it should not be one which would prohibit the reasonable operation of a cost-justified volume pricing system. As stated, we approve the ruling of the trial court in regard to Rule 10.

Rule 12 reads as follows: “Public school districts, agencies and institutions of the State of Missouri and its political subdivisions are not within the purview of Sections 416.410 to 416.560, RSMo 1959, and sales of milk products to them are not regulated by the Unfair Milk Sales Practices Act.” We agree with the conclusion of the trial court that said rule is not authorized and is beyond the authority of the commissioner. In that respect, it is helpful to note the legislative history. In the Senate, two amendments to House Bill No. 255 were proposed which would have added to what is now § 416.445 exemptions covering sales “made to any school district in the State of Missouri” and sales “made to the State of Missouri or any of its political subdivisions.” Both of the proposed amendments failed of adoption (Senate Journal, 70th General Assembly, Monday, May 8, 1959, pp. 1089, 1091).

The rule relied upon by the appellants, i. e., that the state and its agencies are not within the purview of a statute unless an intention to include them is clearly manifest (Hayes v. Kansas City, 362 Mo. 368, 241 S.W.2d 888) is not applicable here. Primarily, the prohibitions of the Milk Act are directed to the seller of the product, not the purchaser. Insofar as it applies to the seller, the law is not prohibitory of acts by the state or its instrumentalities and is not a limitation upon the state. By limiting what the seller may do, the state or its political subdivisions may incidentally be affected in purchases which they make, but that fact does not require application of the rule contended for by the appellants. See Helena Automobile Dealers Ass’n v. Anderson, 110 Mont. 1, 98 P.2d 371. In that case the Montana Supreme Court held that state’s “Unfair Practices Act” prohibited sales below cost to the state. In so holding, the court said: “As before stated, the state is not mentioned in the Act. Whether the Act would apply to the state as a seller we need not now determine. It does not restrict the state or affect its legitimate interests as a buyer. The purpose to be accomplished by Chapter 80 can as well be defeated by sales to the state as to others. If sales below cost when made to individuals for the purpose of injuring competition and destroying competition are unlawful, then such sales to the state for thei same purpose are likewise unlawful — absent any express exception in favor of those selling to the state.” 98 P.2d 1. c. 372.

We approve other findings and conclusions of the trial court, with the exception-of those which we have heretofore specifically stated need not be considered upon this appeal.

For the reasons heretofore stated, the-judgment is affirmed.

STORCKMAN, DALTON, PIYDE, and HENLEY, JJ., concur.

LEEDY, J., concurs in result.

EAGER, C. J., concurs in result in separate opinion filed

EAGER, Chief Justice

(concurring in result).

The principal opinion finds it unnecessary to consider the constitutionality of Sections 416.420 and 416.440, although that question-was raised in the case. As a practical matter, it would seem to assume the constitutionality of the Act as a whole, though not necessarily of §§ 416.420 and 416.440. Borden Company v. Thomason et al., Mo., 353 S.W.2d 735. I recognize the principle that constitutional questions are ordinarily not decided unless it is necessary to do so ; with that in mind, I merely wish to reaffirm my previous views, as expressed in my dissent in Borden, supra, at a time when the constitutionality of the whole Act was directly in question. My view then and now was and is that the Act is unconstitutional in its entirety, and consequently that all Rules promulgated thereunder would necessarily fall. I have seen no reason to depart from those views as previously expressed.

      . All section citations refer to sections of RSMo 1959, V.A.M.S.


author: PRITCHARD, Commissioner. PER CURIAM.

text:
    Walter REBMANN, Respondent, v. Barbara Ernestine REBMANN et al., Appellants.
    No. 50443.
    Supreme Court of Missouri, Division No. 2.
    Nov. 9, 1964.
    Rehearing Denied Dec. 14, 1964.
    Lay & Ichord, Hiett & Becker, Houston, for -respondent
    Green & Green, H. D. Green, West Plains, for appellants.
   PRITCHARD, Commissioner.

Upon the theory of lack of delivery plaintiff sued to set aside his admittedly properly executed and acknowledged warranty deed- which granted to his four grandchildren, ¿11 minors at the time of execution of the deed, his 110 acres of land (to which he also prayed to have the title quieted) then owned by him.

The decree of the trial court was for plaintiff, and held that the deed in question was “void for the reason that there was no effectual valid delivery thereof.” Title to plaintiff’s land was also quieted by the decree. Defendants’ cross action in which they requested that their title be quieted as against plaintiff was denied. Defendants have appealed from the final decree against them.

Mr. Rebmann, the plaintiff, lives near Mountain Grove, Missouri, but in Texas County, upon the land involved in this suit. After plaintiff’s purchase of the 110 acres, he and his wife, Nellie L. Rebmann (who joined with him in executing and acknowledging the deed), lived together thereon until her death, which occurred on December 8, 1955.

In 1950, both plaintiff and his wife were ill, and on November 10,1950, they executed the warranty deed in question in their home, there acknowledging it before a notary public. Following the description in the deed is the sentence, “The said parties of the first part retain a life time dower in the above described property, and shall have full and complete control of said property during their lifetime.” Plaintiff testified that after the deed was made it was placed in a drawer in the writing desk of the home.

On direct examination plaintiff testified:

“Q. Now, then, after this deed was signed, why didn’t you deliver it to the defendants at that time, or part with it ?
“A. Well, it wasn’t intended to be. We just fixed it in case that if it got real bad now — -we was both poorly now and she was very old, not well at all — if it got to where — and we had a will made at the same time, fixed up our will, and we had it all there, and we had it fixed to where if we really got real bad, why we could — if we agreed on it, why we’d do whatever we wanted to about it. We kept it right there in the home.”

On December 13, 1950, the deed was recorded, and about that date plaintiff received it from the Recorder of Deeds in his mail. He testified that this was when he first learned that the deed had been recorded; he did not record the deed or take it to the Recorder’s office himself and he did not know how it became recorded; and he did not authorize anyone else to have the deed put on record. He never did deliver the deed to any of the defendants or to anyone, nor did he authorize anyone to do so. After plaintiff received the deed from the Recorder’s office he put it back in the desk drawer where it had been. At that time plaintiff and his wife had some disagreement or argument about the deed when he found it had been recorded. The deed since that time to the date of filing of the petition, November 21, 1962, has been in plaintiff’s possession.

On cross-examination plaintiff testified::

“Q. (by Mr. Green) Now, of course you understand what it means to make-a deed, don’t you, the purpose of it?.'
“A. Well, yes, I imagine. Yes, I cam see there.
“Q. And you know what the purpose and what it would mean if one was recorded, wouldn’t you?
“A. Well, that’s the way we change them; that’s right.
“Q. Yes, sir, And you and your wife-voluntarily made this conveyance — - these conveyances to the children,, these grandchildren; is that right?
“A. Yes, sir, we done it on our own,, ourselves.
“Q. And you had it acknowledged before a notary public; is that right?
“A. Yes, sir.
“Q. And that was in November off 1950?
“A. Well, I believe that’s right.
“Q. And in November of 1950 you say that you — the deed was returned to you-by the Recorder, through the mail, to-you?
“A. Well, it was returned at the mailbox ; yes.
“Q. Yes. Isay: Was that in November of 1950?
“A. Well, now, I’m not sure about: that date.
“Q. Well, how long — when would you: say it was delivered back to you?
“A. Well, I just don’t know. I don’t-know how long it was up here before it. was recorded, or when it was sent in..
“Q. Well, was it about that time? It was recorded — it shows it was recorded—
“MR. LAY: December.
“Q. (hy Mr. Green) In December •of 1950, the 13th day. And was it along about that time it was returned "to you?
'“A. Well, I — I — according to that it must have been; yes, sir.
“Q. And when you received it, of ■course you knew it had been placed on ■record, didn’t you?
“A. Yes, sir.
"“Q. And you knew, from your experience, that it was — being on record ■that it conveyed this property to these •grandchildren, didn’t you?
’“A. Well, no, I don’t think I did.
“Q. And that has been 13 years—
“A. Yes, sir.
“Q. —since that occurred ? Almost 13 years; is that right?
“A. Yes, sir.
“Q. And you have never taken any action whatsoever in connection with the deed of conveyance to set it aside or made any dispute about it until the last nine months; is that correct?
“A. Something like that; yes.”

Plaintiff further testified that he had never told the defendants that the deed had been made; he first learned that defendants knew the deed had been made and were making some claim thereunder some eight or nine months before the trial date (May 21, 1963), when defendant Harold Mac Rebmann made some statement to him to the effect that he was going to take over the farm.

Barbara Ernestine Rebmann, one of the defendants, testified that she was, at the time of trial, 24 years of age; Harold Mac Rebmann was 23; Robert Eugene Rebmann was 20; and Linda Carol Rebmann was 17. When she was age 14, 15 or 16, plaintiff told her that he and his wife had made arrangements that the place would be theirs — and that plaintiff had made statements to her that the place was theirs, subject to his life estate. Harold Mac Rebmann denied that he ever told plaintiff that he was going to take over the farm, but that the conversation they had was on a different matter. He recalled the statements made by plaintiff that he had made the place over to defendants.

Plaintiff’s deed was voidable, not void as he contends. See Branner v. Klaber, 330 Mo. 306, 49 S.W.2d 169, where the types of deeds which are absolutely void are set forth. Plaintiff’s suit, timely instituted, and if successful, would have had the effect of disaffirming his voidable conveyance. His testimony that he did not record his deed or authorize it to be recorded would have supported a conclusion that there was a surreptitious removal thereof by some person from his drawer, and a wrongful, unauthorized recording thereof. At that time plaintiff would have had the right to begin his suit to vitiate his recorded deed, and introduce evidence to show that by recordation there was no intent to deliver the deed, which is the controlling factor. Cleary v. Cleary, Mo., 273 S.W.2d 340, 345 [5-9], and cases and authority there cited. Although the recording of a deed (even by the grantor or at his instance) does not in itself operate as a delivery of the deed (Weigel v. Wood, 355 Mo. 11, 194 S.W.2d 40, 41 [1]; Cravens v. Rossiter, 116 Mo. 338, 22 S.W. 736, 737; 16 Am.Jur. Deeds, § 135, p. 513), such recording does create a presumption or a prima facie case of delivery in view of our recording statute, § 442.390, RSMo 1959, V.A.M.S. That statute imparts notice to the world of the contents of a recorded conveyance. See Chambers v. Chambers, 227 Mo. 262, 127 S.W. 86, 92. In the circumstances here presented, absent an effective rebutting objection upon plaintiff’s part, his deed upon the records would carry the title of the remainder interest to defendants upon cessation of plaintiff’s retained life estate.

The candid admission of plaintiff during the trial below is that the recordation of deeds is the way titles are changed. He must be held to that knowledge, and inasmuch as he had immediate actual notice of the wrongful and unauthorized recordation of his deed he would be held to the further knowledge that such deed would carry the title to the objects of his bounty, his minor grandchildren, unless he took steps to set aside the deed upon some valid ground.

Plaintiff did not immediately take steps to set aside his deed upon learning that it had been recorded. He waited almost twelve years to begin his suit. Defendants’ pleaded defense of the ten-year statute of limitations, § 516.010, RSMo 1959, V.A.M.S., is not a bar to plaintiff’s claim. Plaintiff was in possession; defendants, being apparent remaindermen not entitled to possession, have held nothing adversely to plaintiff. See Bramhall v. Bramhall, Mo., 216 S.W. 766, 770 [6], and cases there cited and quoted. The determinative question in this case therefore is whether by reason of his twelve years of silent acquiescence in the knowledge of his recorded deed, and of its ordinary legal effect, plaintiff is guilty of such laches (properly permitted by the trial court as an amendment made after the case was taken under advisement, to conform to the proof) as to be barred in maintaining his remedy to set aside his deed upon the ground of nondelivery. In our pursuit of the answer to this question we are not concerned with the merits of the issues of whether or not a delivery was intended at the outset, or'whether such a delivery, if not first intended, was later consummated by an implied ratification of the wrongful recordation by plaintiff’s long and silent acquiescence in the knowledge thereof. Laches, if applicable, is directed toward the enforcement of the plaintiff’s remedy.

The defense of laches, against the prosecution of stale demands, is not limited to cases where a detrimental change of position has been occasioned to a party by reason of delay. The kinds of prejudice usually invoked in support of a plea of laches involve a change of position resulting in financial loss, such as making expenditures upon property in improving it; increase in the value of property; and the intervening rights of third parties. 30 C.J.S. Equity § 118, p. 540. No such prejudice exists in this case. Defendants were apparent remainder-men under the deed at the outset, and have remained just so at all times. In addition, however, to the foregoing inequitable situations of prejudice resulting from a delay which bars relief, there is a further prejudice which has been held to bar a remedy. That is that there has been a loss of testimony and evidence because of the death of a party to the original transaction who was conversant with the transaction. In this case that party was the wife of plaintiff, Nellie L. Rebmann, who joined with him in executing the deed, and to whom a life estate in the land was also reserved or granted.

In the case of Lemoine v. Dunklin County, C.C., 46 F. 219 (affirmed 8 Cir., 51 F. 487, 2 C.C.A. 343), the fact that the witnesses who were conversant with the transaction of the issue of certificates of entry and sale of swamplands were since dead was, among other facts, supportive of the defense of laches. In Burdette v. May, 100 Mo. 13, 12 S.W. 1056, the plaintiffs brought suit to establish a resulting trust upon the ground that defendant entered the land in question in his own name when it should have been entered in the name of his mother, who was alleged to have furnished the money to buy the land. The proceedings were instituted 18 years after the death of the mother, who knew about the transaction. The court said, loe. cit. 12 S.W. 1057, “Courts of equity view with disfavor suits that are brought long after the transactions litigated have occurred, and long after death has sealed the lips of those familiar with occurrences so remote in point of time.” Price v. Boyle, 287 Mo. 257, 229 S.W. 206, was a suit to set aside a deed and for an accounting of a trusteeship. The case was brought five years, lacking one day, after termination of the trust, which occurred upon the death of the life tenant. The trustee died almost four years after the life tenant’s death. The court indicated doubt that a prima facie case was made by plaintiff, but went on to rest the decision denying relief upon the ground of laches, saying, loc. cit. 229 S.W. 209 [2, 3] : “Where a party rests upon his rights and fails to bring suit when he might have done so for a time •short of the period of limitations, in a proceeding in equity, the courts sometimes deny relief on the ground of an unreasonable delay, where circumstances intervene to work hardship upon the defendant in making his defense. Where, by reason of delay, evidence becomes unavailable, or important witnesses have died, and it "becomes impossible to ascertain the facts, laches will bar recovery. Casebolt v. Courtney [Mo.], 195 S.W. 746, and cases cited.” See also Thomason v. Beery, 361 Mo. 424, 235 S.W.2d 308, 311; 30 C.J.S. Equity § 119, p. 542; 19 Am.Jur. Equity, § 511, p. 355.

Nellie L. Rebmann, by plaintiff’s own testimony, must have known something about the intention of plaintiff in executing the deed. She was present in the home when the deed was returned to plaintiff; indeed, she and plaintiff had a disagreement or argument at that time concerning the recor-dation. The defendants, all being minors during the time their grandmother was living, are by her death occurring almost five years after recordation of the deed and plaintiff’s delay for that period of time, deprived of her version of the entire transaction. Plaintiff makes no attempt to explain his failure to bring his suit until after the death of his wife, who would have been a witness to the occurrences. There was no impediment whatsoever to his right to bring suit within the lifetime of his wife. We hold that plaintiff’s delay in prosecuting his claim is for an unreasonable length of time and the same constitutes laches upon his part which bars his relief to cancel his deed.

The decree is reversed and this case is ordered remanded with directions to enter a decree for defendants upon their cross action quieting title to their remainder interest, subject to plaintiff’s life estate.

BARRETT and STOCKARD, CC, concur.

PER CURIAM.

The foregoing opinion by PRITCHARD, C., is adopted as the opinion of the Court.

All of the Judges concur.