author: STOCKARD, Commissioner.

text:
    James E. CHANCE, Appellant, v. ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, a corporation, Respondent.
    No. 50416.
    Supreme Court of Missouri, Division No. 2.
    April 12, 1965.
    Motion for Rehearing or for Transfer to Court En Banc Denied May 10, 1965.

      Anthony P. Nugent, Sr., Anthony P. Nu-gent, Jr., Richard F. Adams, Winger, Nu-gent, Rayburn & Adams, Kansas City, for appellant.
    George L. Gordon, Sam D. Parker, Jack W. R. Headley, Joseph E. Stevens, Jr., Kansas City, for respondent.
   STOCKARD, Commissioner.

In this suit for personal injuries under the Federal Employers’ Liability Act, 45 U.S.C.A. § 51 et seq., plaintiff sought damages in the amount of $150,000. The jury returned a verdict for defendant and plaintiff has appealed. The issues on this appeal do not require a detailed statement of the evidence.

On June 19, 1960, plaintiff was employed by defendant as a switchman in the Argén-tine Switchyards in Kansas City, Kansas, at a place called the “bowl yard” where railroad cars from connecting lines were brought to be distributed to various tracks in the yard depending upon their destination. The procedure followed was for freight cars to be taken to the top or crest of a “hump” and cut loose and permitted to roll into the bowl yard. The speed of the freight cars was controlled by “retarders” regulated by defendant’s employees in control towers, who also guided the cars onto the proper track by operating mechanically the switching process. Plaintiff had performed work at track 45, and then walked northward to track 56, where a line of cars was to be pulled out of the yard. On track 55 there were two gondola or hopper cars located at a place where there was a curve. Plaintiff was asked by some member of the crew on track 56 to locate and replace the “skate,” a device to stop or prevent the movement of railroad cars. According to plaintiff, he then walked westward between tracks 55 and 56 to a point just past the first gondola car on track 55. He then saw the skate on the other side of track 56, and he stopped and turned around. He was facing southwest and “practically looking at the car” when he was struck by the first gondola car. He testified that at the time he was not touching or leaning against any car, and he was not in the coupling area between the cars, but was “approximately eight inches or so” distant from the side of the car. Although he was looking at the gondola car he did not see it swing outward or sideways. Plaintiff’s theory is that the first gondola car was struck by a freight car which had been routed onto track 55, and because of the excessive speed of the freight car at the time it struck the east end of the gondola car, the west end of the car was caused to swing outward or sideways and strike him. Defendant’s evidence established that the two gondola cars were loaded with sand weighing about 75 tons each. The freight car was loaded with flour weighing about 55 to 60 tons. When coming down off the hump and coupling into the standing gondola cars at a speed of four miles an hour, with a skate on the far end of the gondola cars, the freight car would cause the gondola cars to move about 20 to 25 feet. Defendant also introduced evidence that the maximum lateral movement of gondola cars is about two inches, and if they moved sideways or swung out as much as eight inches they would derail. Photographs of a gondola car show that at each end it is narrower in width by about four or five inches, with this narrowing extending back from each end about five feet.

Instruction No. 1, plaintiff’s verdict directing instruction, was as follows:

“The court instructs the jury that if you find and believe from the evidence that the plaintiff, Jim Chance, was in the employ of the defendant on June 19, 1960, and that on that day he was working as a switchman handling freight cars in the Bowl Yard of the defendant at the Argentine Yards in Kansas City, Kansas, and was working below and West of the so-called hump, and that as a part of his regular duties he was in a position on the curve between track 55 and track 56 and West of the 42nd Street Viaduct and that he was then and there violently struck by a hopper car standing on track 55 when it was struck by a car or cars which defendant had caused and permitted to roll off the hump Westward on track 55 at a speed in excess of that allowed by the defendant’s rules to-wit four (4) miles per hour, and at an excessive and dangerous rate of speed, and if you further find that, in so causing and permitting said car or cars to roll at such speed off the hump on track 55 and to strike the hopper car standing on track 55, the defendant failed to exercise ordinary care and was negligent and that plaintiff was injured as a direct and proximate result of said negligence, then your verdict must be in favor of the plaintiff and against the defendant.”

Defendant offered and the trial court gave, Instruction No. 7 which was as follows:

“The court instructs the jury that if you find and believe from the evidence that plaintiff was struck and injured by the movement of a car standing on Track 55 when cars standing on said Track 55 were moved by reason of another car coming off the hump and coupling into them, and if you further find that a speed of four miles per hour was a reasonable and proper speed for a car to so come off said hump and couple into said cars, and that a car so coming off said hump at a speed of four miles per hour and coupling onto said cars standing on said Track 55, would have caused said cars on Track 55 to move, and if you further find and believe that plaintiff was required to know the operating rules of defendant and that one of said rules required plaintiff to expect a movement of engines or cars on any track at any time in either direction, and if you further find that plaintiff placed himself in a position where he would have been so struck and injured by the movement of said cars on Track 55 caused by the coupling of a car coming off the hump at a speed of four miles per hour, then your verdict will be for the defendant, and this is true even though you may find and believe that said car coming off said hump was moving at a speed greater than four miles per hour.”

Plaintiff challenges this instruction by his Point II in his brief which, with the numbers in brackets added, was in its entirety as follows: “The court erred in giving instruction No. 7 at defendant’s request and over plaintiff’s objections in that said instruction [1] required no finding that plaintiff’s acts were negligent, [2] failed to exclude defendant’s negligence, [3] was contrary to the law, [4] did not require the jury to find it was the duty of defendant to exercise ordinary care, [5] required no finding of proximate cause and [6] was contradictory and confusing.”

Plaintiff’s Instruction No. 1 does not hypothesize where he contends he was in relation to the gondola car which struck him except that “he was in a position on the curve between track 55 and track 56.” Under this submission he could have been sufficiently in the coupling opening between the two gondola cars so that he would have been struck by the forward movement, or he could have been standing next to one of them. Therefore, this instruction is consistent with the factual contention of plaintiff that he was standing next to a car, and also with the factual contention of defendant that the gondola car could not have hit him unless he was standing in line with the forward movement of the car. Plaintiff’s submission of negligence on the part of defendant is limited by the instruction to a contention that defendant negligently permitted or caused the freight car to roll off the hump “at a speed in excess of that allowed by the defendant’s rules to-wit four (4) miles an hour, * * *." In other words, by this instruction plaintiff admits that a speed of four miles an hour, or less, of the freight car would not constitute negligence on the part of defendant. Whether or not defendant may or may not have been negligent in some other respect, plaintiff voluntarily limited his submission of negligence on the part of defendant to permitting the freight car to travel on track 55 at a speed in excess of four miles an hour, and that this negligence was a proximate cause of his injuries.

Defendant was entitled to meet the issues as formulated and submitted by plaintiff. Its position on this appeal is that it attempted to. do this by Instruction No. 7, which it contends is a converse instruction of causation. In a converse instruction the defendant may submit either the exact converse of plaintiff’s verdict directing instruction, Janssens v. Thompson, 360 Mo. 351, 228 S.W.2d 743, or the exact converse of any essential element of such instruction. Liebow v. Jones Store Company, Mo., 303 S.W.2d 660, 662. Such a converse instruction does not require affirmative testimony in support of it. Kimbrough v. Chervitz, 353 Mo. 1154, 186 S.W.2d 461, 464. The defendant “may also submit facts in an instruction, the existence of which would disprove, that is controvert, one or more of the essential factual elements of plaintiff’s case.” Liebow v. Jones Store Co., supra. Converse instructions are not limited to an attempt to converse the submission of negligence, but may, as above stated, converse any essential element, such as injury, Schaefer v. Accardi, Mo., 315 S.W.2d 230, or causation, as attempted in this case. What defendant has done by its Instruction No. 7 is to hypothesize a set of facts, admittedly supported by evidence, which if found by the jury would authorize a finding by the jury that the only negligence charged by plaintiff to have been committed by defendant was not a proximate cause of the injuries plaintiff received. The rationale of some cases under the Federal Employers’ Liability Act in respect to the inference of negligence on the part of a defendant may be considered to be strained, but an action under the act is based on negligence, and it must be negligence which is a proximate cause of plaintiff’s injuries for which he seeks damages.

We shall now examine separately each of the contentions made by plaintiff in his point wherein he challenges Instruction No. 7. An instruction conversing causation, or any other essential element of plaintiff’s submission in the case, need not require a finding by the jury that [1] “plaintiff’s acts were negligent.” This would inject contributory negligence on the part of plaintiff, and of course would, be improper in this case. Neither is it necessary that an instruction conversing causation [2] “exclude defendant’s negligence.” Of course, it must exclude defendant’s negligence as a proximate cause of plaintiff’s injuries, but Instruction No. 7 does that. Contentions [3] and [6] that the instruction “was contrary to the law” and “contradictory and confusing” are so general and indefinite that they present nothing for appellate review. Domijan v. Harp, Mo., 340 S.W.2d 728; O’Brien v. City of St. Louis, Mo., 355 S.W.2d 904, 908; Civil Rule 83.05 (e), V.A.M.R. Contention [4] is without merit because a converse instruction need not require the jury to find that defendant had the duty to exercise ordinary care, or whatever degree of care is ordinarily imposed on the defendant. Plaintiff’s verdict directing instruction covers this submission. It is not clear what is intended by contention [5]. Defendant’s theory and submission is that its negligence, if any, was not a proximate cause of plaintiff’s injury, and that is the result of the findings required by Instruction No. 7. Defendant certainly is not required in an instruction conversing causation to require a finding of causation. We necessarily conclude that there is no merit to any of the various contentions made by plaintiff in his point challenging Instruction No. 7.

From this examination of each contention made by plaintiff in his point, it is obvious that there is no contention, directly or by inference, that he objects to it on the basis that it injects contributory negligence as a defense to an action under the Federal Employers’ Liability Act. In fact, the complaint expressly made is that it does not require a finding that plaintiff was contributorily negligent. To retain its jury verdict defendant is required only to refute those objections properly and adequately presented by plaintiff. He is not required to defend against possible contentions not advanced by the appealing party. In addition, absent impelling circumstances, see Reyburn v. Spires, Mo., 364 S.W.2d 589, an appellate court should rule a case only on the issues presented by the parties, and should not convict a trial court of committing error when the contention of error was not presented to it in a motion for new trial and then preserved for appellate review. However, contrary to the specific assignment in his point, plaintiff argues in his brief that Instruction No. 7 injected contributory negligence as a complete defense, and pursuant to Civil Rule 79.04, V.A.M.R., we shall examine'this issue to determine whether we should exercise the discretionary review permitted by the rule.

In plaintiff’s argument we find this contention: “[I]t is extremely clear in reading the entire instruction that the defendant has availed himself of contributory negligence as a complete defense by the last clause of the instruction, to-wit: ‘and this is true even though you may find and believe that said car coming off said hump was moving at a speed greater than four miles per hour.’ ” We fail to see how this clause injects contributory negligence of the plaintiff as a defense. It pertains to acts or conduct of the defendant, not of the plaintiff. Although plaintiff does not so contend, it might be argued that the hypoth-esization that “plaintiff placed himself in a position where he would have been so struck and injured by the movement of said cars on track 55” impliedly injected contributory negligence on his part, but the instruction does not require or call for a determination by the jury of negligence on the part of plaintiff, and it does not authorize a verdict for defendant on the basis that this act of the plaintiff constituted negligence. We think Instruction No. 7 is too wordy, but its deficiency is in poor draftsmanship; not in substance. Any jury of reasonable understanding would conclude from this instruction that if plaintiff would have been struck and injured by the gondola car if the freight car which struck it had been going only four miles an hour, which the jury was required to find was a reasonable speed and which plaintiff admitted by his Instruction No. 1 would not have been a negligent speed, then the fact that the freight car was permitted by defendant to roll at a greater speed, the only negligence plaintiff has elected to charge against defendant, would not have been a proximate cause of plaintiff’s injuries. The jury was not required to make this finding but was authorized to do so based on its evaluation of the evidence. If plaintiff thought the instruction, because of its unnecessary wording, injected contributory negligence on his part as a defense, he did not so advise the trial court at the time the instruction was given, he did not so state in his assignment of errors in his motion for new trial, and he did not advise opposing counsel by making that contention in a point in his brief. In fact, as previously mentioned, his point contains an assertion to the contrary. He now makes the contention only by an argument in his brief unrelated to any point, and then in his argument he limits his contention to a phrase of an instruction which refers only to acts of the defendant, and which could not pertain to contributory negligence on his part. This is not a situation which calls for any further discretionary review on our part by reason of the provisions of Civil Rule 79.04, V.A.M.R. However, as previously noted, while the instruction contains unnecessary wording, it does not submit any acts of the plaintiff as constituting negligence, and it does not authorize a finding for defendant on the basis of contributory negligence.

Plaintiff also contends that the court erred in excluding evidence offered by plaintiff “to the effect that the railroad car involved in the accident was moving at ‘an excessive’ rate of speed.” The question asked the witness on deposition was this: “Well, how fast would you say that car or cars, whichever you say it was, a car or cars, how fast would say it or they were going?” The answer was permitted to be read to the jury except this phrase: “they were going an excessive rate of speed.” Defendant objected to the above phrase because it was a conclusion.

A person, when qualified, may be permitted to testify concerning the speed of a vehicle based on his observations, Brown v. Alton R. Co., 236 Mo.App. 26, 151 S.W.2d 727, but in this case the witness admitted that he was not a good judge of speed. However, here the witness was not giving his estimate of the speed of the car, but when admittedly not a good judge of speed purported to state his conclusion as to whether the speed of the freight car was “excessive.” This was improper for the reason assigned in defendant’s objection. It would have been the conclusion of the witness of the ultimate issue before the jury from an unqualified witness. See comparable situations in Trowbridge v. Fleming, Mo., 269 S.W. 610; Elms v. Kansas City Public Service Company, Mo., 335 S.W.2d 26. We note also that when the trial court sustained the objection it suggested, in answer to counsel’s contention that the answer was admissible in evidence, that counsel for plaintiff “show me a case” which so held, and counsel stated he would “have a trial brief” for the court, and that the case he was relying on was “by the Supreme Court of the United States.” The court then said: “I will reserve ruling on that question and we will read it later.” As far as shown by the record no trial brief was submitted, but the record does show that the court later refused to permit the answer to .be read to the jury. The cases cited to this court are all Missouri cases and are all distinguishable. No prejudicial error occurred.

The final point of plaintiff is that “Pleading, proof and instructing as to defendant railroad’s Rule ‘N’ violated the plaintiff’s constitutional rights to equal protection of the laws and was an unjust and unwarranted deprivation of plaintiff’s property rights without due process of law.” In addition to the fact that this point does not comply with Civil Rule 83.05(e), V.A.M.R., plaintiff does not have a point in his brief that the trial court erred in refusing to strike from defendant’s answer the reference to Rule N, and the record indicates that no such motion was made. Neither does plaintiff have a point in his brief that the court erroneously permitted proof of the contents of the Rule. We find no express mention of the Rule in any instruction, and there is no point in plaintiff’s brief that any instruction erroneously referred to the Rule. Finally, there is no reference whatever in plaintiff’s motion for new trial to any constitutional question, and for that reason any such issue is not preserved for appellate review. Witt v. City of Webster Groves, Mo., 383 S.W.2d 723; State ex rel. Williamson v. County Court of Barry County, Mo., 363 S.W.2d 691.

The judgment is affirmed.

BARRETT and PRITCHARD, CC., concur.

PER CURIAM:

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

All of the Judges concur.


source: Caselaw Access Project

author: HOUSER, Commissioner.

license: Public Domain

text:
    LAND CLEARANCE FOR REDEVELOPMENT CORP. v. Elmer G. DOERNHOEFER et al., In Re Apportionment Proceedings, A. & L. Dunn Mercantile and Loan Company, Lessee, Respondent, v. Jacob S. GOLLUB, Frieda Gollub, David Kirsch and Ethel Kirsch, Lessors, Appellants.
    No. 50693.
    Supreme Court of Missouri, Division No. 1.
    May 10, 1965.

      Armstrong, Teasdale, Roos, Kramer & Vaughan, Harry S. Kramer, Jr., William H. Webster, Fred Leicht, Jr., St. Louis, for respondent.
    John Grossman, St. Louis, for defendants-appellants.
   HOUSER, Commissioner.

This is one branch of proceedings brought by Land Clearance for Redevelopment Corporation against numerous property owners in St. Louis to condemn land for the Downtown Sports Stadium Urban Renewal Project. The owners of the fee, the lessee of a portion of the building involved, and the tax collector were named as defendants in the proceedings affecting Parcel 128, which consisted of a lot and 3-story business building located at the southeast corner of 6th and Pine Streets. Commissioners made one lump sum award of $190,000 as the value of the whole proper» ty without apportionment as between lessors, lessee and tax collector, all of whom claimed an interest in the property. No exceptions were filed. The award of $190,000 was paid into the registry of the court. The sum of $2,862 was allowed by the court and paid to the collector for real estate taxes due the city. This is a contest between the former owners of the fee, the lessors Jacob S. Gollub and David Kirsch and their wives, and the corporate lessee, A. & L. Dunn Mercantile & Loan Company, as to the proper apportionment as between them of the balance of $188,138. Tried to the court without a jury, judgment was rendered for lessee for $21,875. The former owners of the fee and their wives appeal, claiming that lessee is entitled to nothing, but if entitled to something the maximum allowable is $5,755. Accordingly, at least $16,120 is in dispute and we have jurisdiction. Art. V, Sec. 3, Mo. Const. 1945, V.A.M.S.; § 477.040, V.A. M.S.

The lease agreement was entered into July 27, 1950 for a term of 20 years at $750 monthly rental for the first 5 years and $800 for the next 15 years, with an option of renewal in lessee for an additional 10 years at the same rent and under the same terms and conditions by giving 6 months’ previous notice in writing of its intention to renew. At no time did lessee exercise its option to renew. Lessee occupied the first floor, balcony and basement of the building. Other tenants occupied portions of the second and third floors. Lessee paid $250 per year for steam heat; $100 per year for water. In connection with its occupancy of the premises lessee made improvements at a cost of approximately $60,000. The date of taking under the condemnation proceedings was March 11, 1963. At that time there remained unexpired approximately 7]/2 years of the original 20-year term of the lease. After March 11, 1963 lessee continued to occupy the premises under arrangement with condemnor for temporary occupancy at $800 per month and finally moved from the premises on June 22, 1963.

Lessee’s vice-president gave as his opinion that the value of the 7j4 years remaining of the original 20-year leasehold estate was $25,000 and that based upon 17j4 years the value was $50,000. Lessee produced two qualified appraisers who testified that the leasehold had a value of $40,000 and $35,000, respectively. Its first appraiser took into consideration the terms of the lease; the rental being paid for similar locations in the area; the length of time the lease had to run to expiration; the possible value of the privilege of renewal, which he valued at $1,000; the price being paid for similar type properties in the downtown area based on income; existing market conditions and future market trends. He testified that properties on the same side of 6th Street in the block north of the demised premises were commanding square foot rentals of $7.50, $5.40, $5 and $4.50, and that the fair rental value of the demised premises was $4.15 a square foot or $15,-000 a year. He confirmed his $40,000 evaluation by capitalization of income and by separately computing the present day value of the reversionary interest. Lessee’s second appraiser inspected the premises and familiarized himself with the terms of the lease. He was familiar with other comparable rental properties in the vicinity of 6th and Pine. He took into consideration the amount of money lessee spent improving the premises, which he said enhanced the value of the leasehold estate beyond the amount of the contract rental. His estimated value of $35,000 for the unexpired portion of the lease did not take into consideration the value of the option. While in his opinion the option had value, he did not assess its value.

Lessors produced two qualified appraisers. Their first appraiser stated that the economic rental of the property was $10,-600 per year, or $3.03 per square foot— $1,000 per year more than the rent reserved in the lease. This $1,000 per annum he called a leasehold savings, or profit of the leasehold interest. He arrived at the figure $10,600 by considering the property, the terms of the lease, the length of the unexpired term, what other comparable properties in the vicinity were renting for, adjusted to location, and other relevant factors. He projected the $1,000 over a period of 7% years, using an 8% factor under the Inwood table of discount, which brought the amount down to a present cash value of $5,500, $5,475 to be exact, as the value of the unexpired portion of the lease. Projected over a 17% year period, which assuméd that lessee exercised the option, he said the value would be $9,250. He testified that under the formula approved in City of St. Louis v. Senter Commission Co., 233 Mo.App. 804, 108 S.W.2d 1070, assuming an annual rental of the demised premises of $9,600 plus $4,375 received by lessors as rent from the 2nd and 3rd stories (the demised premises producing from 60 to 70% of the rentals), the unexpired portion of the leasehold would be without value; that there would be a negative value (that is, a value less than the amount of the rent). Lessors’ second appraiser, having thoroughly inspected the property, in answer to a hypothetical question, was of the opinion that the economic rental value of the demised premises was $10,650 per year, or $3.00 a square foot. Applying discount values he arrived at a leasehold value of $5,750 for 7)4 years; $9,700 for 17i% years. He also testified that the leasehold would have no value under the Senter case formula. He conceded that previously (at a time when the original lease term had 8 years to run) he had given an opinion in writing valuing lessee’s interest at $19,-610.59.

The trial court made findings of fact and conclusions of law; declared that the interests of landlord and tenant are to be determined from the evidence introduced showing the fair market value of the tenancy; that no arbitrary rule should be followed in arriving at such value; that the rule of the Senter case and of the prior case of McAllister v. Reel, 53 Mo.App. 81, aff. 59 Mo.App. 70, applied to this case, would result in an unconscionable division, falling short of the constitutional inhibition against the taking of private property for public use without just compensation. Relying upon City of St. Louis v. Brown, 155 Mo. 545, 56 S.W. 298; State of Mo. ex rel. State Highway Commission v. Douglass, Mo.App., 344 S.W.2d 281, and Edmund Realty Co. v. Walmer Bldg. Co., 8th Cir. (1941), 123 F.2d 54, as announcing the proper rule of apportionment, the court declared that the value of the leasehold should be determined from the testimony of qualified expert witnesses as that value which a buyer under no compulsion to purchase the tenancy would pay to a seller under no compulsion to sell, taking into consideration the period of the lease yet to run, including the unexercised right of renewal, the favorable and unfavorable factors of the leasehold estate, the location, type and construction of the building, the business of the tenant, comparable properties in similar neighborhoods, present market conditions and future market trends, and all other material factors that would enter into the determination of the reasonable market value of the property. The bonus value, sometimes referred to as the leasehold savings or profit, is the difference between the economic rental and the contract rental. The economic rental is the actual market value of the use and occupancy. In its memorandum opinion the court observed that lessors’ witnesses fixed the economic rental at $10,600. The contract rental was $9,600 per year. The court fixed the bonus value at $1,250. Multipying $1,250 by 17% years the court arrived at the figure $21,875 as the value of the leasehold, and rendered judgment for lessee for that amount.

On this appeal lessors’ first point (that judgment should have been entered for lessors awarding no damages) is based upon the proposition that the lease had no value. Lessors would adopt the formula applied in the Senter and McAllister cases, supra, the theory of which is that the lessee is entitled to nothing when the annual rent is more than 6% of the award over and above the obligations and burdens assumed by lessee. Taking the annual rental income from the entire building in 1956 as the basis of their computations, lessors figure that the $9,600 received from lessee constituted 73% of the annual rent from the whole building; that 73% of the $190,000 award is $138,700; that 6% of $138,700 is $8,322, and since lessee paid a rental of $9,600 per year it was paying an excess rental over the true value and therefore the unexpired term of the lease was without value. We agree with the trial court that it would be unconscionable to hold that the lease was without value on the basis of that formula. Such a result would fly in the face of the testimony on both sides of the case. Not only lessee’s but also lessors’ expert appraisers considered this lease favorable to lessee and that it had a reasonable value in excess of the annual rental of $9,600. Lessee’s vice-president so testified. None of the lessors disputed the fact that the lease had a bonus value.

The St. Louis Court of Appeals in Senter, applying the rule of McAllister, did not intend to lay down a rule of thumb to be generally applied in determining the rights of lessees where a lump sum has been awarded in condemnation. Edmund Realty Co. v. Walmer Bldg. Co., supra. Nor did that court in McAllister intend to lay down an inflexible and arbitrary rule applicable in all cases, for the court there said, 53 Mo.App., 1. c. 86: “This method of computation is only applicable to the particular facts of this case.” In Senter the proof showed there was no value to the leasehold interest. The lease had 80 years to run. The court referred to the uncertainty in the value of property over long periods of time; commented on the experience that property on the borderline of a business district in a large community may double or treble in value or shrink in value in equal proportion during a 99-year lease; pointed out that the most experienced real estate operators frequently differ in their views as to future values and the direction of trends of value. In such case the rule of McAllister might be the only available rule by which to test the conclusion that there was no value in the leasehold estate. It has no application in this case, in which lessors’ own experts freely conceded the undisputed fact that the lease had substantial value in excess of the contract rental. The court properly found that the leasehold interest had a bonus value entitled to constitutional protection.

Lessors’ next point is that the judgment was excessive for the reason that the court allowed lessee full value for the unexercis-ed option to renew for an additional term of 10 years. They say there was no evidence to support the judgment insofar as it makes an allowance for that period; that the evidence showed that the renewal option was of little or no value and that in any event an unexercised option to renew a lease being condemned for public use constitutes no interest in property for which a lessee is entitled to compensation.

In our judgment the circuit court properly allowed lessee a bonus value for the full 10-year renewal period in addition to a bonus value for the unexpired 7Yz years of the original term. The holder of an option to renew a lease has an interest in the land. “The right of renewal constitutes a part of the tenant’s interest in the land, and forms a substantial and integral part of the agreement, * * *." 51 C.J.S. Landlord and Tenant § 56, p. 596; Taylor’s Landlord and Tenant, 9th Ed., Vol. I, § 332; Penilla v. Gerstenkorn, 86 Cal.App. 668, 261 P. 488. It is a part of the estate granted, City Garage & Sales Co. v. Ballenger, 214 Ala. 516, 108 So. 257; “an interest in or encumbrance on the property.” United States v. Certain Parcels of Land, D.C., 55 F.Supp. 257, 264 [10], The provision for the 10-year renewal period is “as much a part of the lease as any other element therein.” Wright v. Logan, Mo.App., 25 S.W.2d 799, 802; Lee v. Armour Bldg. Co., Mo.App., 18 S.W.2d 102, 105. The option to renew is a right of value, entitled to constitutional protection. Lessee is entitled to the value of an option for renewal in addition to the value of the unexpired term of the lease.

Lessors object that lessee did not exercise its option to renew, citing cases which hold that a lessee with an unexercised option to purchase is not entitled to compensation upon condemnation of the leased premises. Without approving or disapproving and assuming for the purpose of the argument that those cases were correctly decided, they are not analogous. The holder of an unexercised option to renew a lease, having an interest in the land, is in a different position from that of the holder of an option to purchase who has no interest in the land before the exercise of the option.

Lessee having established a compensable right, the real question under this point is whether the court, in allowing the bonus value for the full 10-year renewal period, adopted a proper measure or quantum of damages. In arriving at just compensation in condemnation proceedings the damages awarded must be definite and certain; they are not to be based upon contingent, speculative and remote possibilities, but upon considerations of reasonable probability; the damages awarded should be those reasonably to be expected from the taking. Mo. Power & Light Co. v. Creed, Mo.App., 32 S.W.2d 783; City of St. Louis v. Senter Commission Co., 3 F.Supp. 308, affirmed Wabash Ry. Co. v. City of St. Louis, 64 F.2d 921; cert. denied 54 S.Ct. 88, 290 U.S. 668, 78 L.Ed. 577. Turning to the evidence, everything points to the fact that lessee would have exercised its option to renew the lease (absent condemnation) before the expiration of the 7-year period it had in which to do so. Lessee, the largest aqd oldest of the pawnbrokers of St. Louis (in business since 1873), was enjoying a favorable lease. Every witness interrogated on the subject testified that the lease had a value in excess of the contract rental. These estimates ran from $1,000 to $5,333 per annum. Lessee’s vice-president testified “We were very pleased with the location at Sixth and Pine.” The leased premises were in good condition, well adapted to lessee’s business necessities. Lessee had spent more than $60,000 on improvements. A pawnbroker’s business calls for a location “a bit off the most populated avenues” but close enough for easy access by walking or by streetcars. According to the evidence, people do not like to be seen making loans at a pawnshop; they prefer a “more obscure” location. Sixth and Pine, which was “on the fringe,” only 1 or 2 blocks from the major downtown shopping stores, was suited to lessee’s purposes. The cost of moving militated against a move. Lessee had been at 6th and Pine for 121,4 years. Lessee’s vice-president referred to the great number of years it takes to “build up the business” after moving from an established location and the considerable expense of remodeling and fitting newly acquired premises for the operation of the business. Lessee spent $75,317 for fixtures and structural improvements after moving from 6th and Pine. We find that there was more than a reasonable probability — that it was practically a certainty — that lessee would have exercised its option to renew the lease before the deadline. Lessee had until February 28, 1970 to exercise the option. Its right to do so was terminated by the condemnation proceedings. Under these circumstances the nonexercise of the option is immaterial; lessee is not to be denied the benefit of its bargain for not having given notice in writing of its intention to renew the lease, where its right to give such notice (with 7 years to run) was cut off by the condemnation proceedings. We are not to set aside a judgment in a case tried upon the facts without a jury unless clearly erroneous. § 510.310, subd. 4, V.A.M.S. Under the facts of this case we cannot say that it was error for the court to adopt the method it employed to arrive at the value of the option for renewal. On the contrary we approve the judgment insofar as it ascertained the annual value of the bonus and allowed for its loss through the 10-year renewal period.

Lessors contend that to be entitled to the bonus for the renewal period lessee should have exercised its option between the time the petition in condemnation was filed and the time of the taking. We think not, for the reason that lessee had a right or interest in the land arising out of the option provision in the lease; it was not necessary to exercise the option to acquire the right. Furthermore, the exercise of the option under these circumstances, with the building about to be demolished under pending condemnation proceedings, would have been a sham; a vain and futile exercise in opportunism; a transparent attempt to bolster the damages. State v. Parkey, Tex.Civ.App., 295 S.W.2d 457, 462 [6].

It is difficult to reconcile lessors’ contention that there is no testimony in the record to support the portion of the judgment allowing lessee full value for the additional 10-year period with lessors’ later statement in their brief emphasizing that the amount due lessee is “basically a question of law” (whether the leasehold was to be considered a 7^4 year lease or a 171/2 year lease) and the concession in their brief that “Under the law, we cannot and do not question the Court’s discretion in respect to the determination of the $1250.00 per annum found by the Court to be due plaintiff. This amount was arrived at by the Court in weighing the conflicting testimony in respect thereto, and, as a trier of the facts that was the Court’s prerogative, and, we are bound by it.” Certainly there was ample evidence to support the court’s determination of $1250 as the annual bonus value. Lessee’s vice-president estimated the value of the unexpired and renewal terms at $25,000 each, or $2500 per annum for the renewal and $3333 per annum for the unexpired term. Lessee’s two expert appraisers fixed the value of the bonus for the unexpired term at $35,000 and $40,000, respectively, or $4,666 to $5,333 per annum. Lessors’ own expert appraisers fixed the value of the annual bonus at $1000. The fixing of the amount of the annual bonus from the testimony of the four qualified expert witnesses and that of lessee’s vice-president was “preeminently the concern of the trier of the facts,” New Jersey Highway Authority v. J. & F. Holding Co., supra, 123 A.2d, 1. c. 29 [8], and in approving the $1250 figure we are giving due regard to the opportunity of the trial court to judge of the credibility of the witnesses. § 510.310, subd. 4, V.A.M.S.

Lessors’ next point is that the judgment is excessive for failure to- reduce the judgment to present cash value. Lessors’ argument is that the leasehold bonus would not have been realized in one lump sum, hut in a series of annual installments or accruals of $1250 over the next 7j/£ (we have concluded V71/2) years, but for the condemnation proceedings, and that the court should not commute these future benefits and award them presently in one lump sum at their full value, but should “apply a discount factor to arrive at the present worth of the market value as a lump sum payable in praesenti.” Sackman on “Valuation of Leasehold,” proceedings of Third Annual Institute on Eminent Domain, The Southwestern Legal Foundation (1961), p. 50. The majority of the courts have ruled that the fair and reasonable market value of the balance of the demised term is the full amount of the difference between the fair rental value of the leased premises for the unexpired term and the rent reserved in the lease. 29A C.J.S. Eminent Domain § 143 b; Sackman, supra, p. 49. The principle of commuting to present worth the difference between the rent reserved and the fair rental value of the lease for the unexpired term represents the minority view. It has been recognized, Orgel on Valuation Under Eminent Domain, 2nd Ed., Vol. I, § 122, p. 529, and applied by various authorities. McAllister v. Reel, supra; Dept. of Pub. Works & Buildings v. Metropolitan Life Ins. Co., 42 Ill.App.2d 378, 192 N.E.2d 607, 613; State v. Parkey, Tex.Civ.App., 295 S.W.2d 457 [1]; In re Real Property in Borough of Manhattan, City of New York, 19 A.D.2d 44, 241 N.Y.S.2d 44, 49 [7], Although the Kansas City Court of Appeals in Proceedings, etc. v. National Engineering & Mfg. Co., Mo.App., 274 S.W.2d 490, did not discuss the principle of discount, it approved an award which apparently was based upon testimony of a qualified appraiser reducing a total bonus value of $16,800 to a “present” value of $14,000.

We are of the opinion that the discount factor should be applied under the particular facts of this case; that this lessee is entitled only to the capitalized value of the bonus. The principle is that of an annuity. The method is the commutation to a lump sum of the series of periodic benefits which but for the condemnation proceedings would have accrued in the future, the enjoyment of which would have been delayed and withheld until by the passage of time the future dates of accrual arrived. The discounted sum, presently to be awarded in one lump sum, with a given rate of interest compounded, will equal the amounts which would have come due annually by the expiration of time under the operation of the lease. This will not award lessors a premium or result in their unjust enrichment, as claimed. On the contrary, to award lessee in praesenti the total amount of all accruals of bonus to come due in the future would be to allow lessee a premium and result in its unjust enrichment. An example of the injustice of presently awarding lessee the full amount in one lump sum will suffice. Take the last year’s bonus of $1250, which under the operation of the lease (absent condemnation) would not have enured to lessee’s benefit until August 31, 1980. To award to lessee that particular installment in full as of March 11, 1963 would give lessee its use 17Yz years in advance of the time lessee otherwise would have been entitled to it. To be fair about it that installment should be discounted to the sum which, compounded at the proper rate of interest, would equal $1250 by 1980. The evidence indicated that there is a universally accepted method of applying the principle of discount known as the Inwood table, described in detail by Laurence Sando in an article entitled “Appraisal of Leasehold Interests,” beginning at page 79 of the proceedings of the Third Annual Institute on Eminent .Domain, The Southwestern Legal Foundation (1961), particularly described and illustrated by example, beginning at page 85. This or some other formula shown by the evidence to be generally accepted should be applied, at the proper rate of interest, to discount to present value the bonus which would have been recovered in 17)4 annual accruals in the future. The award is excessive to the extent that it exceeds this amount.

Next, lessors ask for a reduction of the award based upon an unexpired term of 7)4 years, contending that the award should have been based upon an unexpired term of only 7 years, 2 months, since lessee occupied the premises for 4 months after the taking, paying the same rent to the condemning authority, to which it at-torned. The court did not err in failing to take this into consideration. The tenancy was terminated on the date of the taking, and a new tenancy was created by a written lease entered into between respondent and the condemning authority. Lessors were not parties to and were not affected by this agreement. They had no further interest in the premises, and the new tenancy had no effect upon the value of the leasehold on the date of taking.

Finally, lessors claim that the court erred in refusing to allow an offset of $400, which is the “undisputed value” of a safe door removed by lessee and which it is claimed was the property of lessors under the terms of the lease. It is sufficient to say that matters of offset are affirmative defenses which should be but were not pleaded. Civil Rules 55.09, 55.10, V.A.M.R.

The judgment on the merits, for respondent and against appellants, is affirmed. The award of damages ($21,875), not having been capitalized to present worth, is excessive, and that portion of the judgment is reversed, and the cause is remanded with directions to conduct a hearing, take evidence if necessary, apply the proper discount factor, based upon the proper interest rate, and render a new judgment for respondent and against appellants, as of January 31, 1964, for the sum so calculated.

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.

      . Compare the situation of the tenant who holds over after the expiration of a written lease. His mere possession, plus his expectation to renew the lease, does not constitute a compensable interest entitled to constitutional protection, in the absence of assent by the landowner to a new tenancy. Millhouse v. Drainage Dist. No. 48 of Dunklin County, Mo.App., 304 S.W.2d 54.

      . United States v. Petty Motor Co., 327 U.S. 372, 66 S.Ct. 596, 90 L.Ed. 729; United States v. Certain Parcels of Land, D.C., 55 F.Supp. 257; United States v. 425,031 Square Feet of Land, 3rd Cir., 187 F.2d 798; United States v. 70.39 Acres of Land, D.C., 164 F.Supp. 451; State ex rel. Morrison v. Carlson, 83 Ariz. 363, 321 P.2d 1025; Department of Public Works and Buildings v. Bohne, 415 Ill. 253, 113 N.E.2d 319; City of Ashland v. Kittle, Ky., 347 S.W.2d 522, 524; Mayor, etc. of Baltimore v. Rice, 73 Md. 307, 21 A. 181; Cobb v. City of Boston, 109 Mass. 438; Hercey v. Board of Chosen Freeholders, 99 N.J.Eq. 525, 133 A. 872; New Jersey Highway Authority v. J. & F. Holding Co., 40 N.J.Super. 309, 123 A.2d 25; In re Port of New York Authority (Lincoln Tunnel), 2 N.Y.2d 296, 159 N.Y.S.2d 825, 140 N.E.2d 740; City of Oklahoma City v. Garnett, Okl., 296 P.2d 766; North Pennsylvania R. Co. v. Davis & Leeds, 26 Pa. 238; State v. Parkey, Tex.Civ.App., 295 S.W.2d 457; City of Dallas v. Riddle, Tex.Civ.App., 325 S.W.2d 955 [9].

      . The court specifically declined to apply a discount or short rate to the amount of lessee’s loss, stating “The Court has not applied the so-called Inwood Table.”


author: HYDE, Presiding Judge.

text:
    ZEFF DISTRIBUTING COMPANY, Inc., a Corporation, Appellant, v. AETNA CASUALTY AND SURETY COMPANY, Inc., a Corporation, and Swade Insurance Company, a Corporation, Respondents.
    No. 50293.
    Supreme Court of Missouri, Division No. 1.
    April 12, 1965.
    Rehearings Denied May 10, 1965.

      Irving Achtenberg, Kansas City, Achten-berg, Sandler & Balkin, Kansas City, of counsel, for appellant.
    Douglas Stripp, Landon H. Rowland, Kansas City, Watson, Ess, Marshall & Eng-gas, Kansas City, of counsel, for respondent, Aetna Casualty & Surety Co., Inc.
    Morrison, Hecker, Gozad & Morrison, Karl F. Schmidt, Byron J. Beck, Kansas City, for respondent Swade Ins. Co.
   HYDE, Presiding Judge.

Action in two alternative counts, the first seeking recovery of $25,000.00 against Aetna Casualty and Surety Company, Inc. (hereinafter called Aetna) on a claimed insurance contract for loss from theft. The second count sought, if there was no insurance contract in effect, to recover the same amount from plaintiff’s insurance agent, Swade Insurance Company (hereinafter called Swade), for failure to keep insurance in effect. The court directed a verdict for Aetna and the jury’s verdict was for Swade. Plaintiff has appealed from the judgment entered for both defendants.

We first will rule on plaintiff’s claim of error for directing a verdict for Aetna but some of the facts stated on this issue will be material to plaintiff’s claims of error in the trial on the second count. Swade had for several years prior to 1959 handled about half of plaintiff’s insurance, while another agency had handled a substantial part. In 1959, Max Swade, president of Swade, told plaintiff’s president, Carl Zeff, that he could get plaintiff better rates on policies in a package deal including a jeweler’s block policy insuring against theft. Zeff told him to do so and on August 4, 1959, Swade obtained an oral agreement of Aetna, confirmed by letter of August 5, 1959, for coverage of $25,000.00 on jewelry stock of plaintiff in accordance with Aetna’s standard jeweler’s block policy. Plaintiff had not previously had this kind of theft policy but other insurance included replaced some policies plaintiff already had. Swade did not obtain and send in plaintiff’s completed application for this policy to Aetna until September 28, 1959, and before a policy was issued plaintiff sustained a loss by theft on October 1, 1959, in excess of $25,000.00. That loss was paid by Aetna and this suit is for a second theft loss on December 10, 1959, for which plaintiff claims another $25,000.00 due from Aetna. Carl Zeff, plaintiff’s president, said he did not know what companies had plaintiff’s insurance but relied on Swade, or other agencies, to keep his insurance in force and that it was their custom to pay all insurance premiums at the end of each year.

On October 8, 1959, a week after the first theft, Aetna’s Kansas City agent called Max Swade and told him Aetna wished to cancel the Zeff binder in view of the loss sustained, asking him to call as soon as the risk was replaced in another company. On October 23, 1959, Aetna’s agent again called Max Swade and told him Aetna would not cover beyond October 30, 1959, and that a binder would be sent for the period of October 1 to October 30 instead of issuing a policy. Plaintiff’s evidence was that none of its officers or employees knew anything about these conversations. However, a written binder (designated Binder No. 4) was issued on October 23, 1959, which stated the insurance was for a period of 87 days from August 4, 1959. This binder was found in plaintiff’s files and produced at depositions taken in this case. Carl Zeff said he never saw this binder until after the second loss and plaintiff’s bookkeeper did not recall seeing it until after the second loss. However, a proof of loss form for the first loss was signed, acknowledged and sworn to by plaintiff’s vice president, David Zeff, on November 12, 1959, which stated the insurance was by Binder No. 4 “to expire 10-23, 1959.” (The date of issuance instead of the date of expiration.) The loss for the first theft was not paid by Aetna until after the second burglary but Carl Zeff admitted he had a conversation with Max Swade (president of Swade) early in December before the second theft in which Max said “he thought that Aetna might want to get off the policy,” or “would probably want to get off but that he (Swade) would take care of it.” There were several variations of this conversation in Carl Zeff’s testimony but his version was that he was not told by Max Swade that Aetna was off the risk.

Plaintiff claims it made a submissible case against Aetna, considering the evidence most favorably to it. Plaintiff says burden of proof of cancellation was on Aetna; that Binder No. 4 even if timely received was not proper notice of cancellation; that Binder No. 4 was not effective because not accepted by plaintiff (because not signed by plaintiff on line for signature of insured); and that proof of loss signed by plaintiff did not establish cancellation prior to the second loss. Plaintiff also argues that cancellation could only be by the notice as stated in Aetna’s standard jeweler’s block policy (although none was ever issued) ; that the proof of loss was not notice of cancellation and was inadmissible because of Aetna’s admission that the only communication of termination was Binder No. 4; and that the significance of the proof of loss was for the jury to determine, saying the expiration date therein stated may have been inserted after it had been signed. However, there was no testimony that the proof of loss was not complete when executed by plaintiff; and David Zeff, plaintiff’s vice president, said when he signed it he saw the statement on it that it “has been carefully read and is a full, complete and true warranty,” and that he took it to' another office to be notarized. See Kirk v. Metropolitan Life Ins. Co., 336 Mo. 765, 81 S.W.2d 333, 341. Plaintiff further claims that Binder No. 4 was never intended as a contract of insurance “but as a method of cancellation of the existing oral binder and as a document upon which to base the payment of the prior loss.”

Aetna says this is not a cancellation case but rather a case where the insurance expired by its terms, prior to the second loss sustained by plaintiff; but plaintiff contends the written binder was intended to be a method of cancellation. The insurance began on a temporary basis (an oral binder confirmed by letter) pending written application which was delayed almost two months so that no policy was ever issued. It is said: “Such temporary insurance constitutes insurance for a reasonable time considering all the attendant conditions.” 29 Am.Jur. 595, Insurance, Sec. 205; see also annotation, 2 A.L.R.2d 959; 44 C.J.S. Insurance § 230, pp. 960, 961. When a loss having occurred so soon after the application was received, the application was never accepted but Aetna instead of issuing a policy issued its written binder fixing a definite expiration date of October 30, 1959. Thereafter, the prior expiration of this insurance binder was stated in the proof of loss executed by plaintiff on November 12, 1959. Aetna cites Seiderman v. Herman Perla, Inc., 268 N.Y. 188, 197 N.E. 190, 191, in which it was contended that a letter requesting return of a binder for cancellation within five days (which by its terms expired the next day after the letter was written) was an extension of the binder. The court held the insurance expired on the date stated in the binder, saying: “This is not a case of attempted cancellation of a policy or binder before it expired according to its terms, by the service of notice upon a broker.”

On the binder only, we do not consider the present case to be as strong a case as the Seiderman case (because here insurance began with an indefinite oral binder) but considering Binder No. 4 with the acknowledgment of termination in the Proof of Loss, we find the situation to be just as conclusive. Therefore, our view is that the court correctly directed a verdict for Aetna. Carl Zeff, while saying he never saw Binder No. 4 until long after the second theft, did say in his deposition that he thought it was received by Zeff in October 1959 because it was written in October. However, there is no doubt that the proof of loss, based on this binder and specifically referring to it, was executed on November 12, 1959, almost a month before the second theft, and stated an expiration date prior to that time. Although the date of the binder was given erroneously as its expiration date rather than the expiration date stated in the binder, this proof of loss was a clear acknowledgment that the insurance had expired prior to the date the proof of loss was executed. Since it was an acknowledgment of termination rather than a communication of termination, plaintiff’s contention concerning Aetna’s admission cannot be sustained. No policy was ever issued and under the circumstances the issuance of the written binder excluded any idea of issuance of a policy. Plaintiff knew that its application for a policy had been signed only three days before the first burglary so, when without the issuance of a policy, plaintiff’s vice president executed the proof of loss, referring to the written binder and showing an expiration date of the binder prior to the date of his execution of the proof of loss, plaintiff must be held to have acknowledged its insurance was under the binder and to have known that its temporary insurance had then expired by its terms. In Bernblum v. Travelers Insurance Co., 344 Mo. 217, 125 S.W.2d 844, 848, we held that a receipt signed by an alleged insured conclusively showed only a conditional acceptance so that the policy never became effective because there had not been compliance with the conditions stated in the receipt. Thus the beneficiary was held bound by the terms of the receipt. Likewise, in Tabler v. General American Life Ins. Co., 342 Mo. 726, 117 S.W.2d 278, 283, we held the annual date for premium payments stated in the policy accepted by the insured, and stated in an application for reinstatement afterwards signed by him, controlled over a later date on which the first premium payment was made. As we said in Wendorff v. Missouri State Life Ins. Co., 318 Mo. 363, 1 S.W.2d 99, 101, 57 A.L.R. 615: “When the proof is documentary, or the defendant relies on the plaintiff’s own evidential showing (or evidence which the plaintiff admits to be true), and the reasonable inferences therefrom all point one way, there is no issue of fact to be submitted to the jury.” See also Smith v. Prudential Ins. Co. of America, Mo.Sup., 300 S.W.2d 435, 440. On the documentary proof herein, plaintiff cannot be permitted to enforce this insurance agreement, after signing a statement that it had expired as the basis for collecting a loss under it.

On plaintiff’s claim against Swade, its evidence was that Swade had handled a substantial part of its insurance for about nine years prior to 1959, when Swade got the jeweler’s block insurance from Aetna; that plaintiff authorized Swade to place its insurance where Swade thought proper; that companies would be changed from time to time but plaintiff would not learn of the change until a new policy was received; and that plaintiff paid all insurance premiums to Swade once each year near the end of the year. Plaintiff’s evidence also showed that, prior to the second loss, plaintiff was never told by Swade, prior to October 30, 1959, that Aetna intended to cancel or thereafter that it had cancelled or that Swade was attempting to get insurance for plaintiff Lloyds in London through Sayre & Toso but had not obtained such insurance. Plaintiff calls attention to the following actions and dates (to which we have made some additions) to show negligence of Swade.

October 1, 1959 — First theft occurred

October 8 Aetna notified Swade that Aetna wanted to cancel and wanted to be told when Swade had obtained insurance for plaintiff elsewhere.

October 23 Aetna notified Swade Aetna would not cover beyond October 30.

October 27 First action by Swade. Its office manager, Stern, mailed request to Frost of Sayre & Toso to seek insurance for plaintiff.

October 28 Frost received request from Swade.

October 30 Aetna’s deadline to Swade.

November 2 Frost mailed proposal to London without inspection report.

November 9 Frost received cable from London requesting inspection report.

December 4 Frost mailed London inadequate inspection report (applicable to fire insurance not theft).

December 10 Second theft occurred.

December 12 London cabled Frost “unable proceed without inspection report requested.” „

December 21 Plaintiff sent check to Swade for $4650.84 for premiums due on all insurance for the year 1959.

December 23 Frost forwarded inspection report to London.

Thereafter, during the month of December, plaintiff obtained jeweler’s block insurance through another agency on a binder which was replaced by a policy within five weeks.

Both thefts were very much alike. There was no breaking into plaintiff’s building from the outside. It was assumed that someone had been hiding in the building when it was locked for the night. Each time there was a breakout from inside which set off the burglar alarm. Each time diamonds and watches were missing and many watch boxes were left piled on the floor. Other facts will be mentioned later in the opinion.

Swade contends that it was entitled to a directed verdict claiming (1) that plaintiff did not prove that failure (which it does not concede) to exercise reasonable skill, care and diligence was the proximate cause of plaintiff not having a policy which would have covered the second theft loss; (2) that plaintiff had notice on November 12, 1959, when it executed the proof of loss, that it was not covered by theft insurance of Aetna and there was no evidence that Swade had any duty to plaintiff which it breached prior to the second theft; and (3) that the proof of loss conclusively showing plaintiff had such notice, plaintiff’s evidence showed it could have avoided the second theft loss by applying for such a policy to another agency which later did get such insurance for it. As to the first, Swade argues that plaintiff did not prove the underwriters at Lloyds would have issued a policy covering plaintiff’s second loss hut actually proves the contrary, saying Swade was still attempting to obtain such a policy on December 10, 1959; citing Rovella v. Standard Acc. Ins. Co., 121 Conn. 134, 183 A. 377; Rayden Engineering Corporation v. Church, 337 Mass. 652, 151 N.E.2d 57; Holskin v. Hurwitz, 211 A.D. 731, 208 N.Y.S. 38; DeWees v. Cedarbaum, (Okla.) 381 P.2d 830; Rodgers Insurance Agency, Inc. v. Andersen Machinery, 211 Or. 459, 316 P.2d 497, 501. However, this overlooks plaintiff’s evidence that Swade agreed to keep it insured and did not tell plaintiff it was not insured.

Our view is that plaintiff made a submissible jury case. Swade knew on October 8, 1959 that Aetna would not continue to carry the insurance and was asked to notify Aetna as soon as the risk was replaced in another company. Plaintiff’s evidence showed that plaintiff was never informed of this, and even when on October 23rd Swade was told that Aetna would not continue its insurance beyond October 30th not only was plaintiff not informed but Swade did nothing to replace the insurance until October 27th when it wrote a letter to Sayre & Toso (received by them on October 28th) to get a policy from London. Moreover, Swade did not tell Sayre & Toso that Aetna would go off the risk on October 30th, nor inform plaintiff about this. “[A] broker or agent who, with a view to compensation for his services, undertakes to procure insurance for another, and, unjustifiably and through his fault or neglect, fails to do so, will be held liable for any damage resulting therefrom.” 29 Am.Jur. 561, Insurance, Sec. 163; see also Couch on Insurance 2d, Sec. 25:37. “An agent or broker who undertakes to procure insurance in accordance with instructions impliedly undertakes to give notice to the owner in the event of his failure to procure such insurance.” 29 Am.Jur. 562, Insurance, Sec. 164; see also Couch on Insurance 2d, Sec. 25:47. “An insurance broker, particularly one who acts as general agent for insured and who undertakes to keep the property insured from year to year, is under a duty to exercise good faith and reasonable dili= gence to procure the insurance on the best terms he can obtain; and in this connec tion proper diligence requires him to canvass the market and have adequate knowledge as to the different companies and terms available.” 44 C.J.S. Insurance § 172, p. 861; see also annotation, 29 A.L.R. 2d 171; Cunningham v. Holzmark, 225 Mo.App. 762, 37 S.W.2d 956; Harris v. A. P. Nichols Inv. Co., Mo.App., 25 S.W.2d 484; Kaw Brick Co. v. Hogsett, 73 Mo.App. 432; Couch on Insurance 2d, Sec. 25:46; Apple-man, Insurance Law and Practice, Sec. 8841. Our conclusion is that plaintiff’s evidence was sufficient to show failure of Swade to exercise reasonable skill, care and diligence in replacing the Aetna insurance.

Even so Swade contends this could not have been the proximate cause of plaintiff’s loss because plaintiff did not prove that the underwriters at Lloyds, London would have issued a jeweler’s block policy which would have covered plaintiff’s second burglary loss. Swade says the situation is the same as in the Rayden case, in which the court said (151 N.E.2d 1. c. 65) a verdict should be directed where there was no reasonable basis for concluding that such a policy would have been obtainable. See also DeWees v. Cedarbaum, 381 P.2d 1. c. 836. However, Swade is wrong in claiming its sole duty (under the evidence herein) was to get the insurance from Lloyds and also overlooks its slow start to do anything. In this case, plaintiff did show that the other Kansas City agency which carried some of plaintiff’s insurance did, after plaintiff’s second loss, get the coverage for plaintiff in an American company during December 1959 within five or six days after application and the next year got such a policy to replace it in the London market in a period of about five weeks. There was no such evidence in the Rovella case (183 N.E. 377) emphasized by Swade, in which insurance had been cancelled because the plaintiff therein was not a desirable risk. Furthermore, Swade’s witness, Frost of Sayre & Toso, who was handling the application to Lloyds said that Lloyds had developed the jeweler’s block policy and that it had been copied by American companies, so it appears that Lloyds did issue such policies. Thus it does not conclusively appear that plaintiff was uninsurable in any reputable company. See Ursini v. Goldman, 118 Conn. 554, 173 A. 789, 793. Swade did have evidence that plaintiff was a poor risk because of previous fire losses in the building and theft losses of other companies in which plaintiff’s owners had an interest; and that a jeweler’s block policy was difficult to obtain and only issued for agents producing a lot of other business. However, these were jury issues.

Swade’s other contentions (2), (3) do not require a directed verdict. Although plaintiff had notice of the expiration of the Aetna insurance on November 12th when the proof of loss was executed, nevertheless it was a jury issue as to whether plaintiff had notice that Swade had not procured insurance to replace it or would not do so very soon. At least, according to plaintiff’s evidence they were given no such notice or warning.

Plaintiff’s principal complaint is that Instruction No. 5, given at Swade’s request, was erroneous. Instruction No. 1, given at plaintiff’s request, was as follows: “The Court instructs the jury that if you find and believe from the evidence that on or about August 4, 1959, defendant Swade Insurance Company agreed for a valuable consideration to procure for plantiff and keep in effect Jeweler’s Block insurance in the amount of $25,000.00 on a stock of jewelry, including diamond rings and watches, belonging to plaintiff and located at the premises of plaintiff at 306 West 9th Street, Kansas City, Missouri; and if you further find and believe that said defendant did procure temporary Jeweler’s Block insurance in the amount of $25,000.00 on said stock aforesaid; and if you further find and believe that said temporary insurance terminated or was cancelled before December 10, 1959; and if you further find and believe that said defendant failed to exercise reasonable skill, care and diligence in failing to keep Jeweler’s Block insurance in effect for plaintiff on said stock aforesaid; and if you further find and believe that on or about December 10, 1959, a number of diamond rings and watches belonging to plaintiff were stolen from said premises and have never been recovered by plaintiff; and if you further find and believe that plaintiff suffered a loss from said theft due to the failure of said defendant to exercise reasonable skill, care and diligence to keep such insurance in effect, then your verdict shall be for the plaintiff.”

Instruction No. 5 was as follows: “The Court instructs the jury that if you find and believe from the evidence that following the cancellation by Aetna Casualty & Surety Company, defendant Swade Insurance Company attempted to place said Jeweler’s Block insurance through Sayre & Toso in the London Market and was attempting to do so on December 10, 1959, and that in so attempting, if you so find, defendant Swade Insurance Company was in the exercise of reasonable skill, care and diligence, and if you further find that the failure to keep said Jeweler’s Block insurance in effect was not a failure on the part of Defendant Swade Insurance Company to exercise reasonable skill, care and diligence, then your verdict must be in favor of defendant Swade Insurance Company and against the plaintiff.” (Emphasis ours.)

Plaintiff says the limitation “following the cancellation by Aetna” erroneously assumes an incorrect time when Swade’s duty arose; and also that the instruction erroneously assumes Swade’s sole duty was to attempt to place the insurance in the London market through Sayre & Toso. We find these criticisms to be meritorious because there was evidence from which the jury reasonably could find Swade’s duty commenced when it was told by Aetna on October 8th that it would cancel and asked to be notified as soon as the risk was replaced in another company and that Swade did nothing during the fifteen days prior to October 23rd or until four days after October 23rd when it was notified that the Aetna insurance would terminate on October 30th. Likewise, whether it was reasonable for Swade to rely solely on Sayre & Toso to place the insurance in the London market was an issue for the jury to be decided upon consideration of all the evidence, including availability of insurance by American companies, particularly in view of Swade’s late start to do anything. In this connection, Swade contends that it could only get insurance in London through a broker authorized to act there and that this gave it the right to appoint a subagent who would be the agent of plaintiff, citing Sec. 79, Restatement of Agency, Second, and 2 C.J.S. Agency § 136b (1), p. 1359, claiming any failure of Sayre & Toso to act promptly and in sending the wrong kind of inspection reports to Lloyds when inspection reports were requested would not be Swade’s responsibility. See also Couch on Insurance 2d, Sec. 25:14; 2 Am.Jur. 154— 163, Agency, Secs. 196-205. However, Swade was not employed by plaintiff solely to get this insurance on the London market and was not relieved of its own duty to keep plaintiff insured by sole reliance on Sayre & Toso to get it there without plaintiff’s knowledge or consent. It was not shown that plaintiff ever knew anything about Swade going to the London market. The vice of this instruction is that it authorized the jury to find that waiting until the Aetna insurance terminated, and then leaving it solely to Sayre & Toso to get new insurance without any notice of urgency or any effort to determine whether the insurance could be obtained elsewhere, was the exercise of reasonable skill, care and diligence. If this case is tried again, Swade should take this into consideration in preparing new instructions.

Swade also says plaintiff’s contentions overlook the last five lines of Instruction No. 5 beginning “and if you further find.” While this part alone could have been a converse of the principal finding required by Instruction No. 1, it does not cure the error in assuming that Swade’s duty only commenced following the cancellation by Aetna and that Swade could be relieved of its duty by relying solely on Sayre & Toso thereafter. Neither is it harmless as assuming an unnecessary burden because connected with the first part of the instruction by the conjunctive “and.” The trouble is that this instruction gives the jury an erroneous standard, as to the time when Swade’s duty began and what it was, for the purpose of determining whether Swade did exercise reasonable skill, care and diligence.

Swade further contends plaintiff has not properly preserved for appellate review the claim that Instruction 5 incorrectly stated the time when Swade’s duty began because not raised in the motion for new trial as required by Civil Rule 79.03, V.A. M.R. However, the motion for new trial does set out this entire opening part of Instruction 5 and says it is not a proper converse of Instruction 1 and also that it “minimizes the further duties and obligations with regard to keeping said insurance in effect.” The failure to act promptly on notice that the Aetna insurance would be can-celled and the sole reliance on Sayre & Toso without regard to their lack of promptness after the insurance had expired are so closely related in determining Swade’s duty that they should be considered together as one claim of error. Moreover, assuming either one as the extent of Swade’s duty gave the jury a false standard for determining reasonable skill, care and diligence. If the case is retried, it should be submitted on instructions which do not have such defects.

Of course if the jury believed that Swade did not agree to keep plaintiff’s insurance in effect as Swade had evidence to show, and as submitted in Instruction No. 6, a verdict for Swade would have been proper. That would also be tr,ue if the jury believed that, by the exercise of reasonable skill, care and diligence, Swade could not have obtained a jeweler’s block policy for them between the time Aetna told Swade it would cancel and the date of the second theft. Nevertheless, it was error to give an instruction worded so as to cut down that period and incorrectly state when Swade’s duty began and to submit as Swade’s full compliance thereafter an attempt to place the insurance through one broker without regard to what that broker did or failed to do.

Other claims of error involve alleged improper questions, cross-examination and argument concerning moral element of the risk, prior losses in other companies in which plaintiff’s officers were interested, and previous cancellation of insurance of one such company, as well as claimed misstatements of the law in argument and injection of improper and derogatory issues. As to some of these no objection was made, as to some others objections were sustained and some were not raised in the motion for new trial. If the case is retried, the parties should consider these claims and conduct the trial to avoid anything improper. However, we point out that plaintiff has the burden of proving the theft and the loss (as it recognized in its requested Instruction 1); and that matters reasonably affecting the risk involved are material to the issue of whether Swade could have obtained the insurance by the exercise of reasonable skill, care and diligence and thus the issue of proximate cause.

The judgment in favor of Aetna on Count I is affirmed and the judgment in favor of Swade on Count II is reversed and the cause remanded.

All concur.


author: HENLEY, Judge.

text:
    STATE of Missouri ex rel. Thomas F. EAGLETON, Attorney General, Relator, v. The Honorable Harry A. HALL, Judge of the Circuit Court of Jackson County, Missouri, at Kansas City, Division No. 10, Respondent.
    No. 50703.
    Supreme Court of Missouri, En Banc.
    April 12, 1965.
    Rehearing Denied May 10, 1965.

      Norman H. Anderson, Atty. Gen., Thomas F. Eagleton, former Atty. Gen., J. Gordon Siddens, Asst. Atty. Gen., Jefferson City, Theodore C. Beckett, Sp. Asst. Atty. Gen., Kansas City, for relator.
    Glen V. Graf and Roger S. Miller, Kansas City, for respondent.
   HENLEY, Judge.

This is an original proceeding in prohibition instituted in this court wherein relator, as Attorney General of Missouri, seeks to prohibit respondent, as Judge of Division 10 of the Circuit Court of Jackson County at Kansas City, from hearing or taking any further action in the case described in the next paragraph. Our provisional rule was issued April 13, 1964. In due time respondent filed his return and relator his reply thereto.

On July 13, 1961 Virginia Gray, et al., (hereinafter referred to as plaintiffs) as legatees and devisees under the will of Mayme B. Allison, deceased, filed a suit in the above-mentioned circuit court against Perrin D. McElroy, public administrator of Jackson County, Carl A. Neibling, Velma Beatrice Benson and the State of Missouri to set aside a codicil to the last will and testament of the deceased. By her will deceased gave to Neibling the right to occupy a room in her residence and to use the furniture, etc., therein for his life; to Velma Benson she gave her real property for life and an automobile; and to the plaintiffs, Virginia Gray, et al., she gave the residue of her estate. By the codicil she revoked the gifts to those plaintiffs, reaffirmed the specific gifts to Neibling and Velma Benson, and gave the residue of her estate to the State of Missouri. As grounds for setting aside the codicil plaintiffs alleged, in substance, undue influence of Neibling and lack of testamentary capacity of the testatrix. The will and codicil were admitted to probate November 10, 1960.

It is agreed that the state has not been served with process in the action to set aside the codicil.

On August 10, 1961, the state, appearing specially for the purpose of its motion only, moved to dismiss the state as a party, and also the action, on the grounds, (1) process had not been served on the state, and, (2) the court did not have jurisdiction of the state because the latter had not waived its sovereign immunity and had not consented to be sued. On October 25, 1961 a judge of the assignment division of the court sustained the motion to dismiss the state “as a defendant”, but overruled the motion to dismiss the action. More than two years later relator filed his petition for writ of prohibition.

After the state’s motion was ruled, defendant Neibling filed a motion to dismiss on the ground that plaintiffs had not secured and completed service of process on the state within sixty days after filing of their petition. This motion was overruled.

In his return, respondent alleges that relator, by and through his assistant, waived immunity of the state by appearing and participating in depositions taken by plaintiffs in the action to set aside the codicil. Denying the waiver in his reply, relator admitted that one Richard R. Greenlee, an employee of the attorney general, attended and participated in the taking of said depositions, but further alleged that Greenlee was employed solely as a tax investigator, was not an assistant attorney general, and did not have authority to represent the state.

The basic problem presented is whether respondent has jurisdiction to hear and determine the action to set aside the codicil in the absence of the state as a party defendant. Within that problem is the question of whether the state is a necessary party. Respondent’s contention that the state is not a necessary party is without merit for that contention was laid to rest and the question resolved more than one hundred years ago. In Eddie v. Parke’s Executor, 31 Mo. 513 (March Term, 1862) this court was presented with a like question. There the testator gave a small legacy to his daughter, one of the plaintiffs, and the residue of his estate to his grandchildren, the children of that daughter. The grandchildren were not made parties defendant in the action to contest the will. The trial court sustained the executor’s demurrer to the petition on the ground that the devisees under the will were not made parties. Affirming that judgment this court said “ * * * the only parties interested in the estate are the children of [plaintiffs]; yet neither of them are made parties to the proceeding, though the very object of the suit is to divest them of the property devised to them by their grandfather. No decree or judgment under such circumstances could have any force or effect, for a judgment is only operative against those who are made parties to the suit. * * .” Blatt v. Haile, Mo., 291 S.W.2d 85, 89 [3, 5]; Cole v. Smith, Mo., 370 S.W.2d 307, 308 [2].

Although the point sought to be made is not clear, we understand respondent argues also that the state does not have an interest in the estate of which it could be divested because a will or codicil is always subject to being set aside. The argument seems to be that the interest of the state as the sole legatee and devisee of the residuary estate was suspended when the suit to set aside the codicil was filed; therefore, the state did not have an interest of which it could be deprived. The argument is without merit. The state has a legal and a beneficial interest in the residual estate which it acquired upon the death of the testatrix. Section 473.260. (References to statutes are to RSMo 1959 and V.A.M.S.) The state is a necessary party to a complete determination of the action and without it any judgment entered would be only a partial determination thereof. Eddie v. Parke’s Executor, supra.

The rule is that the state, by reason of its sovereign immunity, is immune from suit and cannot be sued in its own courts without its consent. See Kleban v. Morris, 363 Mo. 7, 247 S.W.2d 832, 836 [2] and cases there cited; 81 C.J.S. States § 214, p. 1300. “A suit, involving property in which the state has an undoubted right or interest, and in which no effective decree can be rendered without binding the state itself, is a suit against the state and cannot be maintained without its consent. * * * ” 81 C.J.S. States § 216c, p. 1320. The respondent does not now have, and cannot acquire jurisdiction of the person of the state in the absence of a waiver by the state of its sovereign immunity and its consent to be sued. Without jurisdiction of the state as a party what could the court accomplish by proceeding to hear and determine the action to set aside the codicil? The three remaining defendants (the public administrator [although the record does not so show, we assume his only interest is that of personal representative of the deceased in the place of the executor appointed by the will], Neibling and Benson) take nothing under the codicil, the gifts to Neibling and Benson being provided for in the unat-tacked will. Consequently, the only person left whose rights can be affected by action of the court is the state. As stated, that person is not a party. And respondent is without jurisdiction to take any action the result of which would be to divest the state of its interest.

Respondent contends that albeit the state is not a necessary party, it is now in fact a party because it has waived its sovereign immunity and the service of process, and has entered its appearance. The basis for this contention is the appearance of an employee of the attorney general at and his participation in depositions taken by counsel for plaintiffs. Respondent does not cite authority in support of his basis for this contention and we find none. In 81 CJ.S. States § 214, pp. 1303-1304, it is stated that a voluntary general appearance by the state may constitute a waiver, “but consent or appearance by an officer, who has no authority to waive the immunity of the state, is ineffectual.” State v. Gulf Oil Corporation (Tex.Civ.App.), 166 S.W.2d 197 [1]. Who has authority to enter an effectual appearance for the state and consent that it be sued? This court held in Nacy v. Le Page, 341 Mo. 1039, 111 S.W.2d 25, 114 A.L.R. 259, that it was for the legislative branch to determine in what matters and in what manner the state could be sued. In State v. Gulf Oil Corporation, supra, it was held that not even the attorney general could enter an appearance that would confer jurisdiction since only the legislature may authorize a suit against the state. The attorney general is given authority by Section 33.560 to institute and prosecute necessary proceedings to protect the right or title of the state in gifts made to the state. Conceivably this could include the authority to enter an appearance for the state where that is necessary to protect its rights to gifts the acceptance of which is provided for In § 33.550. However, to say that the attorney general may have authority to enter the appearance of the state is not to say that his employee with authority only as an investigator of tax matters is empowered to waive the state’s immunity. In State on inf. of McKittrick, Attorney General, ex rel. Handlan v. Wilkie Land Co., Mo.App., 165 S.W.2d 432, 435 [2, 3] the St. Louis Court of Appeals held that an employee of the attorney general with authority only to collect delinquent taxes did not have power to act for the attorney general in a quo warranto proceeding. We hold that Greenlee did not have such authority as would empower him to enter an appearance for the state and that respondent does not, therefore, have jurisdiction of the person of the state.

The respondent argues in his brief that the rule of sovereign immunity has exceptions and limitations, but we find none applicable to the facts of this case. We have read the authorities he cites in support of this argument. None of them is authority for an exception or limitation to the rule; accordingly, we do not burden this opinion with further reference to those cases.

It might be argued that the principle of sovereign immunity is an archaic hangover not consonant with modern concepts of business morality and that it should be limited wherever possible. There may be substance to such viewpoint as applied to a situation where the state would inherit property under a will or codicil subject to a meritorious attack by heirs or others for lack of testamentary capacity of the testator, or on other grounds. But there are the strongest reasons of public policy for the rule of sovereign immunity. The state, in its capacity as representative of the people as a whole, should not be stopped in its tracks by any plaintiff who presents any disputed question of property. The recognized trend, particularly in the Federal Government, is to permit suits against the sovereign, but that trend, thus far, is given expression only by legislative enactment. And the decision whether to disturb that policy and extend the trend is for the wisdom of our General Assembly. Nacy v. Le Page, supra. It is a far different matter for the courts to give hospitable scope to the trend, and we decline to do so.

It might also be argued that since the state is no longer a party to the action whereat the writ is aimed it is no more than a stranger or interloper and is without standing to prosecute this proceeding. The conclusive response to that argument is that notwithstanding the fact that the state is technically a stranger to that action it has such interest therein that relator may seek and prosecute prohibition in its behalf. See State ex rel. Drainage District No. 8 of Pemiscot County v. Duncan, 334 Mo. 733, 68 S.W.2d 679, 684 [6], and cases there cited.

It is not necessary to a determination of the issues raised to rule at this point whether there is provision in our laws for service of process on the state in the suit to set aside the codicil. Both relator and respondent question whether § 506.150(4) and Civil Rule 54.06(d),- V.A.M.R. prescribe the manner of service. The fact remains service was not secured, and had it been respondent would still be faced with the plea of sovereign immunity.

Respondent further contends that the state could and should have appealed from the court’s order on its motion to dismiss the action to set aside the codicil; that the state had an adequate remedy by appeal; therefore, the extraordinary remedy of prohibition is not available. It will be recalled that the trial court sustained the state’s motion to dismiss it as a party but overruled the motion to dismiss the action, the order being in these words, “The motion of the State of Missouri to dismiss it as a defendant is sustained. Insofar as said motion may be construed as a motion to dismiss the petition and cause of action, it is specifically overruled.” The effect of this order is that the action was dismissed as to the state; it could have no other result. We will not speculate on the reason, if any, for the last sentence of the order. No matter what the reason, the state was not aggrieved by the order and could not appeal. § 512.020.

Because respondent would assume but does not have jurisdiction over the person of the state our provisional rule should be, and is, made absolute.

STORCKMAN, HYDE, HOLMAN and FINCH, JJ., and STONE, Special Judge, concur.

EAGER, C. J., concurs in result.

DALTON, J., not sitting.