author: HENLEY, Judge.

text:
    Jorge A. ELLIOTT, Plaintiff-Appellant, v. Virgil W. HARRIS, Defendant-Respondent.
    No. 53009.
    Supreme Court of Missouri. En Banc.
    Jan. 8, 1968.
    Rehearing Denied Feb. 12, 1968.

      Jorge A. Elliott, Kansas City, pro se.
    Alder, Morrison & Rixner, John J. Alder, Kansas City, for defendant-respondent.
   HENLEY, Judge.

Joint action in one count by Jorge A. Elliott and Lewis W. Sanders against Virgil W. Harris to recover amounts paid defendant for the purchase of working interests in certain oil leases on lands in Elk county, Kansas. Plaintiff, Elliott, and defendant filed motions for summary judgment as to Elliott’s claim. The court denied Elliott’s motion and entered judgment for defendant against Elliott, from which the latter appealed to the Kansas City Court of Appeals. That court affirmed the judgment. On application of appellant we ordered the case transferred to this court. Article V, § 10, Constitution of Missouri, V.A.M.S.

We are met at the outset with the question of whether the judgment entered is final for the purposes of appeal since, so far as the record discloses, no disposition has been made of the claim of Sanders and the judgment entered was not specifically designated as final by the court. The general rule is that a judgment to be final and appealable must dispose of all parties and all issues in the case and leave nothing for future determination. It appears from the pleadings, however, that the two claims, although joined in the same action in one count, do not arise out of the same transactions or occurrences; the purchases of interests in the oil leases by the plaintiffs were not joint purchases of a joint interest in their joint names; they were separate purchases of separate interests as their separate property on different dates for different amounts; they were entirely separate and independent claims unrelated to each other. Respondent’s answer raised different defenses to each claim. A separate trial was held by the court on the claim of Elliott, and the judgment entered is deemed final for the purpose of appeal, the court not having ordered that it be held in abeyance pending disposition of the other claim. Civil Rule 82.06 (all references to rules are to Rules of Civil Procedure and V.A. M.R.); Lynch v. Webb City School District No. 92, Mo.App., 373 S.W.2d 193, 195 [1-3], and cases there cited.

For convenience we will hereafter refer to appellant as plaintiff and to respondent as defendant.

Plaintiff’s petition alleges, in substance, that between December, 1962, and June, 1963, he purchased from defendant in Missouri for $2,752.16 an undivided one-sixteenth working interest in an oil and gas lease on Kansas lands (hereinafter sometimes referred to as the Countryman lease); that the interest sold him is a security within the meaning of chapter 409, RSMo 1959, V.A.M.S., (The Missouri Securities Law; also known as Blue Sky Law) prohibiting the sale in this state of securities not registered; that the security was not registered and the sale was in violation of that chapter; that he has rescinded the contract of purchase, demanded return of his money and was refused. He prays judgment for the purchase price plus reasonable attorney’s fees as authorized by § 409.240. In his answer defendant admitted the sale, but denied generally other allegations of the petition. By way of special defense he pleaded that chapter 409 did not apply to the sale of this security, because the sale was an exempt transaction under § 409.050, subsection (9).

As indicated, both plaintiff and defendant filed motions for summary judgment, each motion being supported by the party’s affidavit. The motions were submitted on the pleadings, affidavits, and plaintiff’s interrogatories and defendant’s answers thereto.

Plaintiff states in his affidavit that for the money paid defendant he received defendant’s receipt and an operating agreement, and later from one Thomas Rainey an assignment of the interest purchased from defendant; that on March 6, 1964, (after suit was filed) he assigned all of his interest in the lease to defendant and demanded return of the amount previously paid, but that the demand was refused; that thereafter, on March 9, 1964, defendant executed an instrument wherein he agreed to accept an assignment of plaintiff’s interest for sale by defendant to Jones and Campbell, Inc., of Shawnee Mission, Kansas, for $1,000, less plaintiff’s proportionate share of an outstanding indebtedness against the lease; that he received from defendant $858.94, represented by defendant to be plaintiff’s share of the proceeds of the sale of his interest to Jones and Campbell, Inc.; that after deducting this $858.94 and the income received from his interest from the amount he paid for the interest, the balance due him from defendant is $1,692.59.

Plaintiff does not state by his affidavit specifically whether he did or did not accept the proceeds of the sale to Jones and Campbell, Inc., as in full payment of his previous demand, but a reasonable inference is that he did not. The instrument dated March 9 executed by defendant alone has a place for the signature of plaintiff as an “acceptance” of its terms, but his signature does not appear. We note at this point that although defendant, in his affidavit, refers to the instrument of March 9 executed by him alone as an “agreement” by plaintiff to reassign the Countryman lease “ * * * so it could be sold to a third party * * he does not assert therein that plaintiff accepted the $858.94 as in full payment of the balance allegedly due on the purchase price of the security. We note also at this point that defendant did not plead payment of this sum to plaintiff as an accord and satisfaction although he did plead that defense to the claim of the other plaintiff, Lewis W. Sanders.

Defendant further states in his affidavit that plaintiff did not offer to return the security to him for the amount paid, “ * * * even though [plaintiff] entered into a subsequent agreement * * * to reassign the leasehold so it could be sold to a third party * * *that he “ * * * did not violate the Missouri Securities Law as charged by separate plaintiff, Jorge A. Elliott, in his petition, * * *, for the particular reason that under Sec. 409.050 defendant did not issue or sell securities to ‘more than 15 persons in this state during a period of twelve (12) consecutive months’, as provided in sub-section (9) ;” that the sales of interests in the Countryman lease made by him were to buyers who represented that their purchase was for investment purposes, and that he accepted their representations as true.

By answers to interrogatories propounded by plaintiff, defendant stated that interests in the Countryman lease were sold to fourteen persons only, two of whom resided in Kansas; that after November, 1962, he had no interest in the Countryman lease; that he neither executed nor received an assignment of interest in the Countryman lease; that the interests in this lease were not registered with the Missouri Securities Commission; that plaintiff paid him the total sum of $2,752.-16 for an interest in the Countryman lease ; that he sold plaintiff’s interest in the lease to Jones and Campbell, Inc., for $1,000 and paid him that sum, less $153.53 as that interest’s proportionate share of indebtedness against the lease.

Plaintiff does not contend that the court erred in denying summary judgment in his favor; his contention is that the court erred in entering summary judgment in favor of defendant, because, he says, genuine issues exist as to material facts, and that defendant is not shown by unassailable proof to be entitled to judgment as a matter of law.

This court said in Maddock v. Lewis, 386 S.W.2d 406, at l. c. 408-409: “Under Rule 74.04(a) the party moving for summary judgment may file and serve supporting affidavits as respondents have done here. Under Rule 74.04(c) the adverse party (appellant here) may serve opposing affidavits and all affidavits are then considered along with the pleadings, depositions, and admissions on file, to determine if any genuine issue of fact remains. Reis v. Metropolitan St. Louis Sewer Dist., Mo., 373 S.W.2d 22, 27 [6], A summary judgment is a determination as a matter of law that there is no issue of fact to be tried, Swink v. Swink, Mo., 367 S.W.2d 575, 578 [3]; and ‘In no case shall a summary judgment be rendered on issue triable by jury * * * unless the prevailing party is shown by unassailable proof to be entitled thereto as a matter of law.’ Rule 74.04(h).

“We have recognized that Rule 74.04 is practically identical to Rule 56 of the Federal Rules of Civil Procedure, and we have found federal decisions construing Rule 56 to be persuasive in applying our Missouri Rule. Cooper v. Finke, Mo., 376 S.W.2d 225, 228 [1], We have held: ‘The appellate court as well as the trial court must view the record on summary judgment in the light most favorable to the party against whom the judgment is rendered.’ Cooper v. Finke, supra, l. c. 228 [2], ‘As its name indicates, a summary judgment is an extreme and drastic remedy and great care should be exercised in utilizing the procedure. Traylor v. Black, Sivalls & Bryson, Inc., 8 Cir., 189 F.2d 213, 216 [6] * * *. Although it is useful and beneficial in many situations, it cannot be substituted for a conventional trial of factual issues “unless the prevailing party is shown by unassailable proof to be entitled thereto as a matter of law.” ’ Cooper v. Finke, supra, l. c. 229 [3, 4]. In Armco Steel Corp. v. Realty Investment Co., 8 Cir., 273 F.2d 483, the court said, l. c. 484 [1-4]: ‘A genuine issue of fact exists for the purpose of avoiding a summary judgment whenever there is- the slightest doubt as to the facts (citing cases). As we have heretofore explained, summary judgment is a harsh remedy and, “ * * * should never be entered except where the defendant is entitled to its allowance beyond all doubt; only where the conceded facts show defendant’s right with such clarity as to have no room for controversy; with all reasonable doubts touching the existence of a genuine issue as to a material fact resolved against the movant; giving the benefit of all reasonable inferences that may reasonably be drawn from the evidence to the party moved against. ‘That one reasonably may surmise that the plaintiff is unlikely to prevail upon a trial, is not a sufficient basis for refusing him his day in court with respect to issues which are not shown to be sham, frivolous, or so unsubstantial that it would obviously be futile to try them.’ ” ’ ”

In connection with his contentions, plaintiff asserts that genuine issues exist as to whether defendant’s sale to him of an interest in the Countryman lease was a sale of a security of defendant’s own issue and, therefore, a transaction exempt from the requirement that the security be registered with the Commissioner of Securities before sale.

For a transaction to be exempt under § 409.050(9) the sale of unregistered securities must have been: (1) of securities of the seller’s own issue; (2) to not more than fifteen persons in this state during any period of twelve consecutive months; (3) to buyers who represent that they are taking for investment; and, (4) the seller must reasonably accept their representations as true. To bring himself within the exemption defendant must show the existence of all four of the above factors.

Defendant admits the sale to plaintiff of an unregistered security. His affidavit and answers to interrogatories support his position that the securities (interests in the same lease) were sold by him within the limited period to less than fifteen persons, all of whom represented that they were taking for investment; and, that he reasonably accepted their representations as true. Thus, he has shown the existence of three of the four factors necessary to qualify his sale to plaintiff as an exempt transaction. But, he has failed to show by unassailable proof that the security sold was of his own issue. On the contrary, the proof is that the security was not of his own issue. By his affidavit he said he “* * * did not issue * * * [the] securities * * * ” sold to plaintiff and thirteen others. By answer to interrogatories, he said that he did not execute the assignment of the security he sold plaintiff, and this is corroborated by plaintiff’s affidavit that the security purchased from defendant was assigned to him by one Thomas Rainey.

In his brief and in oral argument here, defendant seems to contend that the words “of its own issue” in § 409.050(9) have no significance as to him, because he was a mere salesman of securities “issued” by someone else. He cites no authority in support of this contention and we find none. Moreover, this argument is contrary to his special defense that the sale to plaintiff was a transaction exempted from the Missouri Securities Law by § 409.050(9). Summary judgment in defendant’s favor cannot be permitted to stand, because he has shown that his sale to plaintiff was not an exempt transaction.

Plaintiff contends also that a genuine issue of fact exists as to whether a tender of the security was made to defendant, as required by § 409.240. Defendant has not shown by unassailable proof that a proper tender was not made. Defendant’s assertion in his affidavit and answers to interrogatories that plaintiff did not tender or offer to return the security to him is countered by plaintiff’s assertion in his affidavit that he assigned the security to defendant and demanded return of the amount paid therefor, thus creating an issue as to that fact. Defendant contends that the only tender made to him by plaintiff was plaintiff’s assignment to him for the sole purpose of sale of the security to Jones and Campbell, Inc., and that this did not constitute a tender within the meaning of § 409.240. There is obviously a controversy over this material fact and we resolve the doubt in favor of the party against whom summary judgment was entered.

The judgment is reversed and the cause remanded.

All concur.

      . Section 409.020(12) defines securities as meaning any “ * * * fractional undivided interest in oil, gas, or other mineral rights * * See also: Gales v. Weldon, Mo., 282 S.W.2d 522, 526 [1].

      . All references to statutes are to Revised Statutes of Missouri, 1959, and V.A.M.S.

      . Section 409.240 provides, in substance, that every sale made in violation of this chapter shall be voidable at the election of the purchaser and the person making the sale shall be liable to the purchaser, upon tender to the seller of the securities sold, for the full amount paid together with reasonable attorney’s fees.

      . Section 409.050, subsection (9), provides that the provisions of the chapter do not apply to the sale of securities in transactions involving: “The issuance or sale by any person (notwithstanding the number of holders of securities of such person) of securities of its own issue to not more than fifteen persons in this state during any period of twelve consecutive months if the buyers represent that they are taking for investment and the seller reasonably accepts their representations as true. * * * ”


source: Caselaw Access Project

author:
PRITCHARD, Commissioner.
      PER CURIAM.

license: Public Domain

text:
    Harold R. HILL and Dorothy H. Hill, his wife, and Spirit of St. Louis Land Company, a Missouri Corporation, Appellants, v. SECURITIES INVESTMENT COMPANY OF ST. LOUIS, a Corporation, and Warren H. Wemhoener, Successor Trustee, Respondents.
    No. 52757.
    Supreme Court of Missouri, Division No. 2.
    Jan. 8, 1968.
    Motion for Rehearing or for Transfer to Court En Banc Feb. 12, 1968.

      Erwin Tzinberg, Richard A. Roth, Zier-cher, Tzinberg, Human Michenfelder, Clayton, for appellants.
    Jerome M. Rubenstein, William D. Rund, St. Louis, for respondents; Bryan, Cave, McPheeters & McRoberts, St. Louis, of counsel.
   PRITCHARD, Commissioner.

Plaintiffs individually and as sole stockholders of the Spirit of St. Louis Land Company sought by Count I of their petition to cancel a second deed of trust securing a promissory note for $267,957.45 for fraud in the inducement thereof. By Count II of their petition they sought to recover $131,743.48 payments applied by defendant, Securities Investment Company (SIC), upon said note, and by reason of failure of consideration and false representations they prayed for $100,000 punitive damages. Under Count III of the petition an injunction was sought against foreclosure of either the first or second deeds of trust (both held by SIC at the time suit was filed) during pendency of the claim under Count I. A temporary restraining order was granted against the foreclosures and was ordered continued with an additional bond. The injunction was dissolved upon final judgment which was against plaintiffs on all counts.

The relevant allegations of paragraph 4 of Count I of the petition (here paraphrased) are that SIC, through its officers and representatives, represented to plaintiff, Mr. Hill, that: (a) Astron Industrial Associates, Inc. of Florida had acquired the automotive and machinery business of Transcontinental Industries, Inc. of Georgia because Transcontinental had a prospective contract with Chrysler Corporation whereby Transcontinental’s business could be expanded substantially, but that $1,200,000 would be needed for the same; (b) $950,000 had been raised and if plaintiffs Hill executed a note to SIC for $250,-000 secured by a second deed of trust on St. Louis property (Howell Island) the additional $250,000 could be raised by SIC; (c) said funds would be required for 90 days only at which time at plaintiffs’ election the note and deed of trust would be cancelled or plaintiffs could acquire 250,-000 shares of Astron common stock at $1 per share; (d) when the Chrysler contract was announced the value of Astron’s stock would increase to at least $5 per share; (e) SIC was interested in making certain that the project was successful because it then had an investment in Astron; and (f) SIC had made audits of both Astron and Transcontinental and that they were in sound financial condition and that no risk was involved in the transaction.

With respect to the allegations of paragraph 4 of Count I above, Mr. Hill testified that he was approached in early August, 1964, by Harvey Carnes and Eugene Pontius, respectively of Quincy, Illinois, and Keokuk, Iowa, to become an investor in Astron. Carnes and Pontius were both directors and shareholders in Astron. Mr. Hill was a farmer-investor (being also a businessman in the sand and gravel business, a lumber business and a part owner of American Motors Inn of Missouri) and resided in Sikeston, Missouri. He farmed and cut timber on Howell Island, the land covered by the deeds of trust here involved. Mr. Hill was not at first interested but later became so when Carnes and Pontius indicated that it was possible to arrange financing so that no money would be required.

Upon Carnes’ arrangement, Mr. Hill and his then attorney, David McMahon, met with Mrs. Sylvia Weissman (a loan broker) prior to August 29, 1964. She told him she could get the money to purchase Astron stock from SIC. On August 29, 1964, Mr. Hill, Mrs. Weissman, Carnes, Pontius and McMahon met with Robert Levitt and James Corbett, assistant vice president and vice president of SIC, at the Ambassador Room of the St. Louis Municipal Airport. It is at this meeting that Mr. Hill contends the misrepresentations concerning Astron and Transcontinental were made. There, according to Mr. Hill, Mrs. Weissman explained that a loan could be made to buy stock — for an option on 250,000 shares of Astron which had an impending contract with Chrysler. That contract would make Astron’s stock go up in value considerably. Carnes and Pontius, who were coming in as purchasers, agreed. Levitt said he knew of Astron, that they (SIC) were doing business with one of its subsidiaries and wanted Astron to do well. They felt like the Chrysler contract would really cause Astron to go up in value several times. Corbett and Levitt said Astron’s financial condition was very good and Levitt said he had personally made some check or investigation of Astron’s records and those of the subsidiary (Transcontinental — later Transonic, a wholly-owned subsidiary corporation of Astron) and that they were in good shape; that SIC had loaned money to the subsidiary. It was not disclosed to Mr. Hill that Astron had guaranteed Transcontinental’s accounts to SIC, or that Transcontinental owed SIC over a million and a half dollars. Mr. Hill understood Astron was selling the stock to him; he relied absolutely upon the representations of Levitt and Corbett, and would not have made the purchase had he been told these things.

Corbett told Mr. Hill that SIC would require security. He offered some Arkansas property but from Mr. Hill’s financial statement Corbett picked out Howell Island in St. Louis County, being familiar with it and stating it would be acceptable. Mr. Hill stated that the required ninety-day note was rather short, and both Corbett and Levitt said it would not make any difference because when the Chrysler contract was announced Astron stock would go up and more money could be borrowed; that Mr. Hill could “wash it out.” The next meeting was on August 31, 1964, at SIC’s St. Louis office where Mr. Hill was told by Corbett that they could not make a loan to an individual — it had to be to a corporation. It was decided that the corporation name would be Spirit of St. Louis Land Company, and Mr. Hill, Mr. McMahon and his secretary flew to Jefferson City and completed that incorporation. Mr. Hill and his wife then deeded Howell Island to the corporation. The second deed of trust was prepared and it and a note, $265,957.45, were signed by Mr. Hill. He also signed (without reading) a guaranty of the loan, which he testified was an option agreement to purchase 250,000 shares of Astron stock according to what Levitt told him. The amount of the loan above $250,000 was for expenses and fees according to Mr. Hill. A discussion was had that the loan proceeds would enable Astron to qualify for the impending Chrysler contract. Corbett and Levitt both said it would be turned over to Astron when they had assurance that the Chrysler contract was consummated. Mr. Hill did not know until shortly before the institution of this suit that the $250,000 loan proceeds went to any company but Astron — he learned recently that it went through the subsidiary, Transcontinental or Transonic; and also that As-tron had guaranteed Transcontinental’s accounts to SIC, which was owed in excess of a millón and a half dollars. Mr. Hill first learned of the financial condition of Astron and Transcontinental in October, 1964, when he was told that the Chrysler contract had fallen through. He was advised by Mr. Reiter that Astron was suing Chrysler and when it recovered it would be all right again.

Contrarily to the essence of Mr. Hill’s aforesaid testimony and allegations, Robert Levitt, called by Mr. Hill as an adverse witness, testified that the purpose of the Airport meeting was to discuss a possible loan to Mr. Hill to purchase Astron stock. On August 29, 1964, Mr. Hill did not ask Levitt what he knew about Astron. Levitt did not recall saying that he was interested in Astron because he was making loans to Transcontinental, its subsidiary, and that both corporations were in good condition. At the Airport meeting Levitt did not tell Mr. Hill that he had gone into Astron’s financial condition, that it was sound, that he felt that it was a good investment for him and devoid of risk. He did not hear Corbett tell Mr. Hill those things. Levitt did not hear anyone from SIC tell Mr. Hill that ninety days after the note was executed at his option the note would be cancelled by SIC; or that the interest and maturity date in the note were only for the purpose of having the instruments in a condition where $250,000 could be borrowed on the strength thereof for Astron (as alleged in paragraph 5 of the petition); or that after the Chrysler contract was announced Astron’s stock would jump to $5 a share. Levitt denied: Telling Mr. Hill that if he and his wife executed a note to SIC for $250,000 an additional $250,000 would be raised by SIC for Astron’s expansion program. He did not make any statement that the proceeds of the Hill loan were to go to Astron. All he knew about where the money was going was that it was going to be used to purchase Astron stock.

Corbett also controverted Mr. Hill’s testimony as to what happened at the Airport meeting. He denied making any representations to Mr. Hill, or hearing Levitt do so, that Astron stock would be a good investment for him and that it was sure to go up in value; or that there would be no risk in his purchasing the stock. He denied telling Mr. Hill that the interest and maturity date were only for the purpose of having the instrument in condition whereby $250,000 could be borrowed on the strength of the note for Astron. The $250,000 was sent by SIC to the Barnett National Bank of Jacksonville, Florida, which disbursed the funds as hereinafter set forth.

Upon receipt of the $250,000 remittance from SIC, the Barnett National Bank issued its cashier’s check for that amount to Transonic Corporation on September 1, 1964. That check was endorsed to Transcontinental by C. V. Nalley, President. Plaintiffs’ Exhibit P, a letter from Transonic of September 1, 1964, shows that 475,000 shares were represented by certificate No. A-5791 in the name of that corporation. Nalley therein directed that 250,000 shares be transferred by the Barnett National Bank to Spirit of St. Louis Land Company and delivered to SIC; 25,-000 shares were to be transferred to Carnes and Pontius as joint tenants; and 100,000 shares each were to be transferred to the latter two individually. Nalley testified that the funds never went into Astron’s accounts, and the 475,000 shares were not purchased from Astron. (The shares of Mr. and Mrs. Hill’s corporation were pledged to SIC also as security for the loan.)

After becoming in default on the note secured by the second deed of trust to SIC, upon recommendation of his counsel at the time, Mr. Louis Shifrin, Mr. Hill executed (under duress, he claimed) Defendants’ Exhibit 7 on May 17, 1965. That document grants permission to SIC to purchase the first deed of trust at the time its holder was attempting to foreclose. It recites that the note secured by the second deed of trust is in all respects valid and enforceable in accordance with its provisions. Mr. Hill had made payments on the second deed of trust note after its maturity, and was unable to, or did not, refinance the loans. Mrs. Weissman testified that she had an oral commitment for a loan from the Bern Company, but Mr. Hill did not give her the necessary information to complete it.

The trial court made findings upon the evidence before it. In substance the conclusions were: That the motivation for Mr. Hill’s involvement in thé purchase of Astron stock came from Pontius and Carnes to be accomplished through a loan; the court was unable to find that the loan investment in Astron stock was made by Mr. Hill solely on the representations of Corbett and Levitt; Hill had already made up his mind as to the purchase and the (Airport) meeting was for the purpose of determining whether it would be accomplished through a loan. “Hill, under the circumstances, was not acting prudently in making an investment without the benefit of complete objective knowledge of the corporate situation. He was willing to go along, on the basis to be worked out by S.I.C. and his equity in Howell Island. * * * The Court is unable to conclude upon the evidence that Hill was influenced in making the loan upon any misrepresentations by the representatives of S.I.C. at the Airport meeting that there was an impending contract with the Chrysler Corporation that would result in the Astron stock increasing in value from $1.00 to $5.00 a share in 90 days, or that at Hill’s option the stock could be returned and the loan cancelled, or that the $250,000 was to be used for purchase of Astron stock directly from that corporation and to be used solely for expansion of Astron.”

The above recounted sharply conflicting testimony of the allegations of misrepresentation affords no basis for this court to overturn the considered findings of the trial court in respect thereof. In such case the appellate court will defer to the findings and conclusions of the trial court upon such conflicting evidence. Little v. Fox, Mo., 387 S.W.2d 532, 535 [2, 3]; Four-Three-O-Six Duncan Corp. v. Security Trust Co., Mo., 372 S.W.2d 16, 17 [1]. Plaintiffs contend, however, that the trial court found that Mr. Hill did not rely exclusively upon the representations made by SIC’s agents. Thus there is invoked by plaintiffs the rule “that it is not required that a party rely exclusively on a representation in order that there be liability, the law only requiring that the representation be a material factor influencing final action, the test being whether the injured party would have acted had he known the truth.” Cited is Hereford v. Unknown Heirs of Tholozan, Mo., 315 S.W.2d 412, 420 [5, 6]; Jeck v. O’Meara, 343 Mo. 559, 122 S.W.2d 897, 903 [7-9], and other cases and authority announcing that rule. However, the rule is not here applicable. The trial court’s finding was that Mr. Hill had already made up his mind to purchase Astron stock before the Airport meeting. The record bears out that finding. The trial court went on to say that it was unable to conclude that Mr. Hill was influenced in making the loan upon any misrepresentations of SIC representatives that there was an impending contract with Chrysler that would result in an increase of value in Astron stock from $1 to $5 a share in 90 days, or that at Mr. Hill’s option, the stock could be returned and the loan cancelled or that the $250,000 would be used to purchase stock from Astron directly and to be used solely for its expansion. Plaintiffs say that the trial court twice found that misrepresentations were made. It has not been pointed out in their brief any allusion of the trial court as to what the representations were or who.made them. A perusal of the entire finding and conclusion of the trial court does not reveal that. Rather, a fair construction of the entire entry is that there were no representations made by SIC representatives in the material aspects alleged. The further recitals are: “Although the parties immediately concerned, S.I.C., Carnes and Pontius had a common interest in enhancing the financial position of As-iron and Transcontinental, there is no evidence that they were acting in concert to defraud Hill; nor does the combination of facts presented offer convincing proof of a fraudulent design. For the reasons aforesaid, plaintiffs cannot prevail on an action of fraud.” The transcript shows that only Mr. Hill testified that Levitt and Corbett made representations, or “agreed” to representations made by others present as to Astron. As above indicated, Levitt and Corbett denied making any representations. Upon this conflicting evidence the trial court’s conclusion that there was no convincing proof of fraudulent design is not clearly erroneous and will not be set aside. Civil Rule 73.01, V.A.M.R.

The trial court made a further conclusion, however, with respect to concealment by SIC’s representatives, Levitt and Corbett, of the financial condition, known to them, of the Astron and Transcontinental corporations: “Plaintiffs’ case can only be made on the question of whether S.I.C., having superior knowledge of the corporate affairs of Astron and its subsidiary, Transcontinental, had an obligation to reveal the information within its control to Hill at the time he entered into the transaction.” It is this aspect of the case with which plaintiffs are mostly concerned in their remaining points on this appeal.

It appears without doubt that Levitt, being present at the Airport meeting, had some knowledge of the financial conditions of Astron and Transcontinental. C. V. Nalley testified that Corbett and Levitt audited Transcontinental’s books; that Levitt knew more about that company than he (Nalley) did. And rather conclusively significant is Levitt’s “Audit Report” of June 22, 1964, addressed to F. R. Reiter, President of SIC. That report describes the corporate relations among Astron, Transcontinental and Transonic, and indicates that an exhaustive investigation of conditions and factors influencing future business prospects of the two corporations was made. It was recited that Astron was planning to issue a $1.2 million debenture to provide additional working capital primarily for inventory financing. “Upon examining the balance sheet it is evident that Transcontinental is under-capitalized and short of working capital. This is due to overexpansion and will not be remedied until the $1.2 million debenture is issued and the company is able to generate an adequate cash flow.” And “Transcontinental Industries has tremendous sales potential. The big question is whether the company can obtain the additional financing required to exploit this potential. At present the company borders on insolvency and is unable to generate the funds required to provide the catalysts for its sales. The financing provided by Securities is supported by plenty of collateral. However, a company that is in as tight a current position as Transcontinental, bears close scrut-ing. No further advances other than, those already committed should be made to Transcontinental and Securities must insist upon the prompt payment of future obligations as they mature.” These quotations are illustrative of the knowledge which SIC had about Astron and Transcontinental.

Although there may exist facts and circumstances upon which there is a duty to disclose facts, Beil v. Gaertner, 355 Mo. 617, 197 S.W.2d 611; Ash Grove Lime & Portland Cement Co. v. White, 361 Mo. 1111, 238 S.W.2d 368; Vendt v. Duenke, Mo.App., 210 S.W.2d 692, no such facts and circumstances here exist. The purpose of Mr. Hill’s contact with SIC was to procure a loan in order that he might consummate his predetermined design to purchase Astron stock in this highly speculative venture. He did not look to SIC for advice or information concerning Astron or Transcontinental. “In the application .of the rule concerning the duty to speak, however, it must be pointed out that while one cannot properly withhold the truth from those who have reason to expect information from him, those who do not look to him for information and expect no disclosure from him cannot properly complain of his silence or successfully contend that he has suppressed the truth. In order that suppression of the truth may constitute fraud, there must be a suppression of facts which one party is under a legal or equitable obligation to communicate to the other and which the other party is entitled to have communicated to him.” 23 Am.Jur. Fraud and Deceit, § 78, p. 855. There is no evidence that Mr. Hill was under a delusion as to the facts; there was no relation of trust and confidence in the obviously arm’s length transaction of procuring a loan from SIC; and, finally, Mr. Hill being an experienced businessman, worth more than two million dollars, a “self made” man, as the record shows, it is fairly inferable that he did not use due diligence himself in ascertaining the facts. This further finding of the trial court is supported by the record and in reason: “By virtue of the audits and loan situations S.I.C. had superior knowledge of the financial condition of Astron and Transcontinental, but upon the record the court is unable to find Hill was relying on S.I.C. for anything other than a loan. The corporations at that time were operating concerns, the money, although transmitted so as to enhance the financial position of Transcontinental and indirectly As-tron, did not directly benefit S.I.C. Although it is charged that if Hill had complete knowledge he would not have entered into the transaction, this is an after the fact contention, not supported by the record.” Jones v. Arnold, 359 Mo. 161, 221 S.W.2d 187, is distinguishable on its facts although holding that there is a legal duty to disclose in instances of equality of condition and superior knowledge of the facts by one party. The fraud there was failure to inform defendant remaindermen of the pendency of a suit, to which they had a meritorious defense, which would have cut off their interests as “bodily heirs” remaindermen. Faust v. Parker, 204 Iowa 297, 213 N.W. 794, involved an affirmative misrepresentation of fact (and the speaker had a commission interest in the transaction — compare Cox v. Bryant, Mo., 347 S.W.2d 861). These cases, and others cited, are of no aid to plaintiffs.

The above holding that there was no duty to speak on SIC’s part disposes of the Point VI contention that its officers were not innocently silent. No trick or contrivance was shown by the evidence. In Messina v. Greubel et al., 358 Mo. 439, 215 S.W.2d 456, there was definitely inequality of position by defendants, corporate officers and directors, and plaintiff, a mechanic without business experience, additionally an employee of defendants. In Monsanto Chemical Works v. American Zinc, Lead & Smelting Co., Mo., 253 S.W. 1006, the fraudulent statement related to the contract between the parties for the purchase of sulphuric acid, not as here alleged — relating to the separate transaction of stock purchase.

The facts were found against plaintiffs on both Points VII and VIII, respectively: (1) That SIC was not guilty of fraud in not informing Mr. Hill upon learning that the stock was not being purchased from Astron (the conclusion is supported that Mr. Hill had determined to buy Astron stock regardless of its source); and (2) there was no conspiracy entered into by SIC officers to defraud plaintiffs.

Since there was no fraud clearly and convincingly proved, there is no merit in the contention of Point IX that Reiter, Cor-bett and Levitt were acting within the scope of their employment for SIC, it being liable for resultant damage; or Point X, that the acts of SIC’s agents were wilful, wanton or malicious entitling plaintiffs to punitive damages.

The judgment is affirmed.

BARRETT and STOCKARD, CC., concur.

PER CURIAM.

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

FINCH, P. J., DONNELLY and EAGER, JJ., and FULLER, Special Judge, concur.


author: SEILER, Judge. PER CURIAM:

text:
    Frank BARHORST et al., Appellants, v. The CITY OF ST. LOUIS, a Municipal Corporation, et al., Respondents.
    No. 52268.
    Supreme Court of Missouri, En Banc.
    Dec. 11, 1967.
    As Modified Feb. 12, 1968.
    Rehearing Denied Feb. 12, 1968.

      Grove G. Sweet, Sweet, Schwarz & McGhee, St. Louis, for plaintiffs-appellants.
    Thomas F. McGuire, City Counselor, Aubrey B. Hamilton, Assoc. City Counselor, Raymond A. Bruntrager, St. Louis, for defendants-respondents.
   SEILER, Judge.

Plaintiffs, consisting of twenty-eight individuals and one corporation, instituted this action for a declaratory judgment challenging the constitutionality of (1) the enabling legislation for what is known as the “St. Louis earning tax,” act approved April 21, 1954, Laws 1953, 2nd Ex.Sess., p. 14, now Secs. 92.110 to 92.200, RSMo 1959, V.A.M.S.; (2) the provision of the Charter of the City of St. Louis authorizing the earnings tax; and (3) the St. Louis ordinances imposing the tax. The trial court sustained defendants’ motion to dismiss the petition and plaintiffs have appealed.

The individual plaintiffs may be classified into two groups: (1) nonresidents of the City of St. Louis who have earned wages or received other compensation for services performed in said city, and (2) residents of the City of St. Louis who have earned wages or received other compensation for services performed either in or outside the said city. The corporate plaintiff had profits from its activities within the said city.

Plaintiffs first assert that the St. Louis ordinance, together with the provision of the Charter of the City of St. Louis and Secs. 92.110 to 92.200, Supp. RSMo 1965, V.A.M.S., are unconstitutional “in selecting earned income as the subject of taxation, to the exclusion of unearned income such as rents, dividends, interest and the like,” because they thereby adopt “an arbitrary and unreasonable classification” in violation of Sec. 3, Art. X, 1945 Constitution, V.A.M.S., (“Taxes * * * shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.”), and the equal protection clause of the Fourteenth Amendment to the Constitution of the United States.

Sec. 92.210, Supp. RSMo 1965, V.A.M.S., provides that certain charter cities, which include the City of St. Louis, are “hereby authorized to levy and collect, by ordinance for general revenue purposes, an earnings tax on the salaries, wages, commissions and other compensation earned by its residents; on the salaries, wages, commissions and other compensation earned by nonresidents of the city for work done or services performed or rendered in the city; on the net profits of associations, businesses or other activities conducted by residents; on the net profits of associations, businesses or other activities conducted in the city by nonresidents; and on the net profits earned by all corporations as the result of work done or services performed or rendered and business or other activities conducted in the city.” Neither the enabling act, the Charter provision, nor the ordinance authorizes the imposition of an earning tax on what has been termed “unearned income”. The ordinance does not purport to impose such a tax.

Although statements of the general principles applicable to this contention of plaintiffs may be found in numerous Missouri and other cases, a complete and inclusive statement is set forth in 84 C.J.S. Taxation § 36, as follows:

“As a general rule, within constitutional limitations, the state has power to classify persons or property for purposes of taxation, and the exercise of such power is not forbidden by the constitutional requirement that taxation be uniform and equal. So the legislature may arrange and divide the various subjects of taxation into distinct classes and impose different rates on the several classes, or tax one class to the exclusion of the others, without violating the requirement of equality and uniformity, and it may exercise wide discretion in selecting and classifying the subjects of taxation, provided the tax is uniform on all members of the same class, and provided the classification of the subjects of taxation is reasonable and provided the classification of the subjects of taxation, as has been held, is not arbitrary.”

See also the statement of this rule in State ex rel. Transport Manufacturing & Equipment Co. v. Bates, 359 Mo. 1002, 224 S.W.2d 996. 1000.

The power to classify for tax purposes- is primarily in the legislature and not in the courts, and laws should not be declared invalid unless it clearly appears that they transgress some constitutional provision. Aetna Cas. & Sur. Co. v. Smith, 36 Del.Ch. 391, 131 A.2d 168. There is no fixed standard or “precise yardstick” as to reasonableness of classification, Conard v. State, 2 Terry, Del., 107, 16 A.2d 121, but the classification cannot be “ 'palpably arbitrary.’” State ex rel. Transport Manufacturing & Equipment Co. v. Bates, supra. It is not necessary that the court perceive the precise legislative reason for the classification, and the legislature is not required to preamble or label its classification for tax purposes, or disclose the principles on which they are made. It is sufficient if the court, on review, may find them supported by “justifiable reasoning.” 84 C.J.S. Taxation § 36 at p. 121.

The issue thus becomes whether the classification by the legislature of “salaries, wages, commissions and other compensation earned,” without including “unearned” income from “rent, dividends, and interest and the like” (to use plaintiffs’ language), is so unreasonable and arbitrary as to fail to meet constitutional standards.

Plaintiffs cite no case precisely in point which supports their position. They rely primarily on the Bates case cited above, and cite several other cases in which general principles are stated. We reach the conclusion that the classification of “salaries, wages, commissions and other compensation earned” for purposes of a city earnings tax has a reasonable basis and is not arbitrary. Rent, dividends, and interest are derived primarily from property already subj ect to a city tax if within the jurisdiction, and a classification to avoid double taxation has been recognized as constitutionally sound, In re Miller’s Estate, 239 Wis. 551, 2 N.W.2d 256, 139 A.L.R. 1056. It was stated in Colchensky v. Oklahoma Tax Commission, 184 Okl. 207, 86 P.2d 329, “That the Legislature had the right to classify and place in different classes incomes derived from tangible and intangible sources has not been questioned and cannot be denied.”

The only case we have found that might be considered to be substantially in point is Marshall v. South Carolina Tax Commission, 178 S.C. 57, 182 S.E. 96, 98. In that case the tax was placed on income received from interest and dividends but not on income received from personal or professional service. The court said this: “The complaint also alleges that the act makes a hostile and arbitrary discrimination against persons whose income is received from interest and dividends and in favor of persons whose income is received from other sources, and thus creates an illegal classification. I do not think this objection sound. The Legislature has exceedingly broad powers in classifying subjects for taxation. * * * I think it is sufficient to say that the Legislature may put in one class and tax differently persons who receive interest and dividends from those who earn an income otherwise, that is, by personal or professional service. The plaintiff must be able to satisfy the court that the classification has its origin in nothing better than whim and fantasy and tyrannical exercise of arbitrary power, before the tax in question will be stricken down.” For these reasons we conclude that the classification in this case meets constitutional requirements and limitations.

Plaintiffs next assert that the earnings tax is arbitrary and void in that it “unreasonably discriminates between resident individual taxpayers and resident corporate taxpayers” because it taxes the “entire earned income of the individual, but only that earned in the City by the corporation.”

As to resident individuals the tax is imposed on compensation earned for services performed within and without the city. The tax as to corporations is imposed on “the net profits * * * as a result of work done or services performed or rendered, and business or other activities conducted in the city.”

Plaintiffs cite only Quaker City Cab Co. v. Commonwealth of Pennsylvania, 277 U.S. 389, 48 S.Ct. 553, 72 L.Ed. 927. We do not consider that case to be in point and controlling. There a tax was placed on the gross receipts of every transportation company only if owned by corporations but not if owned by individual or partnerships, and the tax was held to be discriminatory. That case presents no analogy between the classification there and the classification in this case. “ ‘The burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it,’ ” Walters v. City of St. Louis, banc, 364 Mo. 56, 259 S.W.2d 377, and plaintiffs have not done so in this case.

However, it is our conclusion that the classification is not subject to constitutional objections. It was expressly held in the Walters case, cited above, and in Walters v. City of St. Louis, 347 U.S. 231, 236, 74 S.Ct. 505, 509, 98 L.Ed. 660, 665, that a classification for tax purposes of earned income by individuals as against net profits of corporations was a reasonable and valid classification. In the latter case it was said: “* * * [T]he ordinance classifies incomes for taxation according to their sources, one category consisting of salary and wage income and the other of profits from self-employment or business enterprise. Classification of earned income as against earned profits is not uncommon * * * [i]t is a classification employed extensively in federal taxation * * * We cannot say that a difference in treatment of the taxpayers deriving income from these different sources is per se a prohibited discrimination.” The court then distinguished Quaker City Cab Co. v. Commonwealth of Pennsylvania on the basis that there was “discrimination between identical sources of revenue depending only on the unincorporated or incorporated character of the taxpayer. * * * Here the classification rests on the State’s view that wage or salary income is relatively fixed, predictable and certain, while profits of business are fluctuating and unstable.” Taxation of net income of a corporation limited to property owned or business done in the state is not an uncommon practice. 84 C.J.S. Taxation § 138, p. 277. Missouri state income tax on a Missouri corporation is limited to income from “sources in this state,” Sec. 143.040, while the income tax as to a resident individual applies to all income “from all sources,” Sec. 143.010, but with a deduction permitted for income on which tax is paid in another state, Sec. 143.160(5). When authorized classifications are made, a rigid rule of absolute equality of taxation between classes is not necessary. The classification in this case is not in violation of constitutional provisions.

Plaintiffs next contend that the enabling act is unconstitutional in that without any mention being made in the title of the act, the act purports to exempt from the tax certain insurance and express companies. They further assert that the effect of striking the exemption provision of the act is to broaden the act to include a coverage not intended, and for that reason the entire act is void, and the ordinance necessarily must fail. But as we see below such is not the case under the particular circumstances here.

The title of the act approved April 21, 1954, Laws 1953, 2nd Ex.Sess., p. 14, now Secs. 92.110-200, RSMo 1959, V:A.M.S., does not disclose the fact that the income referred to in Secs. 143.120 to 143.150, RSMo 1949, V.A.M.S., as not being subject to state income tax, shall not be taxable under any tax ordinance enacted pursuant to the enabling act. But the ordinance before us was not enacted pursuant to section 1 of the act, which provided that the city “is hereby authorized to levy and collect” an earnings tax, because that authority by the terms of the act expired April 15, 1957, at the latest. The 1% ordinance before us, novy part of Chapter 145 of the Revised Code of St. Louis, was not adopted until July 24, 1959. This ordinance derives from section 10 of the 1954 act, which made possible the submission to the voters of St. Louis of an amendment to the city charter giving the city power to levy an earnings tax, which amendment was adopted by the voters on September 30, 1954. In section 10 of the 1954 act the legislature said that any constitutional charter city with population in excess of seven hundred thousand could at any time prior to April 15, 1957, by charter amendment authorize its legislative body to impose “any tax defined under this Act” — that is, an earnings tax. This the legislature had power to do under Sec. 11(f), Art. X, 1945 Constitution. St. Louis accepted the offer, amended its charter, and has since acted under the charter as amended. Its ordinance, Sec. 145.080, provides that the income referred to in Secs. 143.120 to 143.150, RSMo 1949, as not being subject to the state income tax, shall not be taxable under the ordinance. Therefore, the income which the legislature did not want subject to the earnings tax is not being taxed by the ordinance imposing the St. Louis earnings tax. This result is not being reached by the section of the 1954 act which declared that such income was not taxable, section 6. It is reached by the ordinance, Sec. 145.080 of which provides that said income is not taxable under the ordinance. Plaintiffs argue that if section 6 is void, then, since it is an exemption, the entire 1954 act is void, because the effect of voiding an exemption but not voiding the entire act would be to leave the act with a coverage which the legislature did not intend, in fact expressly disclaimed. But does this result follow where the city, as here, avails itself of the opportunity to amend its charter by popular vote so as to authorize its own legislative body to impose the “tax defined” under the 1954 act? No, because the city is then levying the tax under the authority of the charter amendment and it does not necessarily follow that the coverage will be expanded beyond what the legislature intended. Here, for example, we see that it has not. We need not concern ourselves as to what the situation would be if the city were, under its charter authority, to attempt to tax such income. That situation is not before us and plaintiffs are in no position to complain about it. We therefore overrule plaintiffs’ contention that the earnings tax ordinance is unconstitutional on the ground that the entire 1954 act is void for failure to mention in the title the exemption of certain income.

Another contention made by plaintiffs is that the exclusion of certain income which is not subject to the state income tax from the coverage of the earnings tax also does violence to the unformity clause of the constitution, Sec. 3, Art. X; that, as plaintiffs put it, “ * * * this is a significant exemption, for buried in Section 143.120, R.S.Mo., amid non-profit, charitable and mutual co-operative organizations of one type or another, most of which would not have had ‘net profit’ in any event, is an exemption from state income tax for insurance companies which pay a premium tax and express companies which pay a gross receipts tax to the State”; that this is a classification not related to any proper purpose, which therefore destroys the uniformity of the tax in the territorial limits of the city. However, the earnings tax is for general revenue purposes and the city might decide that businesses which are sufficiently different that the state foregoes income tax from them and instead measures their tax in terms of percentages of gross premium receipts or gross receipts (as is done with insurance companies and express companies) are not suitable subjects for application of its earnings tax. It might be that the difficulty in determining what was “net profit” in the insurance or express company business caused the city to decide against including such businesses or assuming the task of examining their books and records to verify the accuracy of their returns. Having the power to impose an earnings tax, it follows that the city has certain incidental powers of classification and differentiation, Village of Beverly Hills v. Schulter, 344 Mo. 1098, 130 S.W.2d 532, 535; Springfield City Water Co. v. City of Springfield, 353 Mo. 445, 182 S.W.2d 613, 617; Airway Drive-In Theatre Co. v. City of St. Ann, (Mo.Sup.banc) 354 S.W.2d 858, 860. The city, for example, could decide that the earnings tax would apply only to taxpayers with earnings or net profits above $50, although some might thereby escape entirely. It might decide that below a certain point collection was not worth the administrative time and expense involved.

Plaintiffs argue that the city has no power to grant any exemption or exclusion unless expressly authorized by statute, which authorization they say is contained only in section 6 of the 1954 act which, as stated above, they contend is void. Plaintiffs cite State v. Hannibal & St. Joseph R. Co., 75 Mo. 208, and Vrana v. City of St. Louis, 164 Mo. 146, 64 S.W. 180. However, these cases involve situations where the city agreed with the railroad that in exchange for keeping the railroad’s shops in the city, or by acceptance of a dedication of streets to the city, no tax or assessment would be charged. It is clear the city would have no authority to grant this sort of exemption from taxation, but this is not the situation before us. While the city has not declared its precise reason for the exclusion under consideration, it is apparent the burden of the earnings tax falls alike on all persons who are in substantially the same situation, that there are valid grounds of distinction between the businesses whose income is excluded and those not, and that a reasonable basis exists for a difference in treatment. We overrule plaintiffs’ contention that the exclusion violates the uniformity clause.

Another proposition advanced by plaintiffs is that the penalty provisions of the ordinance are invalid because they provide for imprisonment for debt, in violation of Sec. 11, Art. I, of the 1945 Constitution, and because the penalty provisions exceed the grant of authority to the city by the state; that the taxpayer is required at the time of filing to pay the tax due, that without payment there can be no filing, that the alternative to filing is the city workhouse and that this is imprisonment for debt.

The ordinance makes it a violation of the Municipal Code, punishable upon conviction by fine or imprisonment, for a taxpayer to fail to make a return, or to permit the collector to examine his books and records, or knowingly to make a false return or to attempt to avoid full disclosure of earnings or profits. It also requires the taxpayer making the return, at the time of filing, to pay the collector the amount of tax shown due (a not unusual provision, as witness state and federal income tax practice), but attaches no penalty for failure to pay on time except 6% interest and a 1% per month penalty. Imprisonment for nonpayment of a fine for violation of the ordinance by failing to file a return would not constitute imprisonment for debt, Thunder Oil Company v. City of Sunset Hills, (Mo.Sup.banc) 349 S.W.2d 82, 89. The ordinance does not attempt to authorize imprisonment of a taxpayer for failure to pay the tax, nor does it make payment of the tax a condition precedent to filing, although it does require payment at the time the return is filed. Plaintiffs are correct that they cannot be barred from filing on time by refusal of the collector to accept the returns unless accompanied by payment in full, but such unauthorized practice or regulation by the collector does not invalidate the ordinance or the penalty section thereof, Walters v. City of St. Louis, (banc) 364 Mo. 56, 259 S.W.2d 377, 384-385.

As to plaintiffs’ assertion that the city has arrogated unto itself the power to impose a penalty for failure to file an earnings tax return and that no such authority has been granted the city in the enabling act, this is answered, as defendants point out, by the fact that both the enabling act and the charter amendment confer power upon the city to “collect” the tax. This gives the city power to require the filing of a return or other appropriate form of report. “Power to levy and collect taxes, it is commonly held, carries with it the implied power to employ the necessary and usual procedure to execute the power and collect the revenue contemplated by the grant of power to make the levy”, McQuillin, Municipal Corporations, 3rd Ed. (Revised), Sec. 44.131. Also, as defendants point out, Art. I, Sec. 1 (34) of its constitutional charter gives the city authority to impose a penalty to enforce its ordinances. We therefore rule this point against plaintiffs.

Judgment affirmed.

All concur.

On Rehearing

PER CURIAM:

Appellant’s motion for rehearing says that since Count II of the petition seeks an injunction against pending prosecutions, those of the plaintiffs who are under prosecution for violation of the ordinance do have standing to challenge the ordinance, charter amendment, and statute, on the basis of an unconstitutional discrimination even though they do not fit in the precise class discriminated against; that the opinion therefore has failed to pass on the claimed unreasonable distinction between resident individuals engaged in business who are taxed on their net profit whenever earned and incorporated companies which are taxed only upon their net profits from business conducted in the city; that the Walters v. City of St. Louis cases, referred to in the opinion, are not in point because they dealt merely with discrimination between taxing the gross salaries and wages of employed individuals on one hand, but only the net profits of the self-employed and business corporations on the other; that our present opinion holds in essence plaintiffs failed to sustain their burden of proof that the discrimination was in fact arbitrary and unreasonable, despite the fact that plaintiffs’ allegations in this regard were admitted by the motion to dismiss ; that the court should have, under the circumstances, returned the case for evidence to determine whether the classification can be shown to be arbitrary and unreasonable.

However, as appellants tacitly concede, and as the allegations of the petition expressly show, none of the plaintiffs claims to be an individual resident of St. Louis conducting a business from which he earned net profits outside as well as in the city. Hence, none could be directly adversely affected by the difference in treatment, assuming, without deciding, that such is unconstitutional. Therefore, plaintiffs are not in position to raise the point, Missouri Pacific Railroad Co. v. Morris (Mo.Sup. banc) 345 S.W.2d 52, 60, 88 A.L.R.2d 798; Ex parte Lockhart, banc, 350 Mo. 1220, 171 S.W.2d 660, 666; State v. Armour Pharmacy, Inc., (Mo.Sup.) 152 S.W.2d 67, 68; Stouffer v. Crawford (Mo.Sup.) 248 S.W. 581, 585. Appellant cites State v. Bengsch, 170 Mo. 81, 70 S.W. 710, 719 for the proposition that one under prosecution “may raise the question of the constitutionality of a discrimination which would invalidate the Act, even though he may not fit in the precise class discriminated against”. An examination of the Bengsch case, 70 S.W. l. c. 719, however, shows it involves the situation where the act in question “ * * * was framed and enacted as an entirety, and would not have received the legislative sanction but for the fact that it was intended to operate as a whole. Then, this being the case, any party prosecuted under the challenged act may raise the question of the unconstitutionality of a portion of the act, in the circumstances already related, and thereby show the invalidity of the whole * * *» (Emphasis added). In the Bengsch case the court held the act was invalid in its entirety.

But in the present case even if the portion of the original act, S.B. 3, Laws 1953, 2nd Ex.Sess., p. 14, approved April 21, 1954, which referred to an earnings tax “on the net profits of associations, businesses or other activities conducted by residents” were invalid, it would not make the balance of the act invalid. The group of taxpayers so described was only one of five different groups separately described, was probably the smallest numerically of all the groups, and very likely was not expected to produce a major part of the revenue. It was well known the City of St. Louis needed additional tax revenues, Walters v. City of St. Louis, banc, 364 Mo. 56, 259 S.W.2d 377, 380, and that the earnings tax provided by the 1951 act, H.B. 50, Laws 1951, p. 334, expired April 1, 1954. S.B. 3, supra, contained an emergency clause. We do not believe there is the slightest doubt but that the legislature would have enacted the other provisions of the 1954 bill without the one claimed by appellants to be void. We see no reason why the other provisions of the bill standing alone, are not complete and capable of being executed in accordance with the legislative intent without the allegedly void portion mentioned above. This being so, the rule announced in the Bengsch case is not available to appellants here. We note there is no severability clause in the 1954 or succeeding acts, but this is of no significance in determining whether the entire statute must fall, Sec. 1.140, RSMo 1959, V.A.M.S.; St. Louis County v. City of Florissant (Mo.Sup.) 406 S.W.2d 281, 285. We accordingly overrule appellants’ point above set out and discussed.

In the motion for rehearing, plaintiffs also point out that section 10 of the 1954 act was repealed in 1959, by S.B. 27, approved April 23, 1959. S.B. 27 increased the amount which could be levied from ½% to 1%. In lieu of section 10 it enacted a section to be known as 92.200 providing as follows:

“No ordinance enacted under this act shall be effective unless it is authorized pursuant to a charter amendment of such city; provided, that any ordinance authorized by charter and presently in effect shall remain in effect until an ordinance is adopted under the authority of this act.”

S.B. 27 did not affect the charter amendment, adopted by the St. Louis voters, September 30, 1954, or the ordinance carried forward thereunder, because the proviso in S.B. 27 specifically continued in effect any ordinance presently in effect and authorized by charter amendment. Then, pursuant to S.B. 27, on July 14, 1959, the voters of St. Louis adopted a charter amendment authorizing the increase from ½% to 1%. On July 24, 1959, an ordinance was enacted setting the rate at 1%, which ordinance, together with other ordinances pertaining to the earnings tax, became Chapter 145 of the Revised Code of St. Louis. This is the ordinance before us.

By S.B. 65, Laws 1961, p. 219, approved June 27, 1961, Secs. 92.170 and 92.200, RS Mo 1959, V.A.M.S., were repealed. A new Sec. 92.170 was enacted lowering the amount which an employer could retain as compensation for collection of employee’s taxes by withholding from 3% to 1 ½%. A new Sec. 92.200 was also enacted providing:

“No ordinance enacted under this act, except an ordinance limited to the purposes of section 92.170, shall be effective unless it is authorized pursuant to a charter amendment of such city; provided that any ordinance authorized by charter and presently in effect shall remain in effect until an ordinance is adopted under authority of this act.”

Pursuant to S.B. 65, St. Louis did enact an ordinance reducing the employer’s compensation for withholding from 3% to 1'½% November 1, 1961. It took no action on the earnings tax as such however, as the proviso in Sec. 92.200, as enacted by S.B. 65, continued the effect of the charter amendment adopted July 14, 1959, and the ordinances enacted pursuant hereto.

It is clear, therefore, that the St. Louis earnings tax has continued to exist by virtue of a charter amendment, first for and then for 1%, authorizing its legislative body to impose the tax defined by the 1954 act. The fact continues that the income which the legislature did not want subject to the earnings tax is not being taxed by the city and the fact also continues that this result is not being reached by Sec. 6 of the 1954 act, but by Sec. 145.080 of the ordinance. As stated in the original opinion we need not concern ourselves as to what the situation would be if the city were, under its charter amendment authority, to attempt to tax such income. We therefore, overrule plaintiff’s contention that the repeal of Sec. 10 of the 1954 act requires a change in the result of our decision.

As to the remaining portions of the motion for rehearing, it is fair to say they are either reargument of issues determined by the opinion or relate to matters which cannot be said to be material as to law or fact or to have been overlooked or misinterpreted by the court, see rule 83.16, V.A.M.R. The motion is therefore in all respects overruled.


author: ANDERSON, Presiding Judge.

text:
    AMERICAN INSTITUTE OF MARKETING SYSTEMS, INC., Plaintiff-Appellant, v. James R. FORD, Defendant-Respondent.
    No. 32994.
    St. Louis Court of Appeals. Missouri.
    Jan. 5, 1968.

      Love & Mann, David B. Lacks, Clayton, for plaintiff-appellant.
    Sheldon D. Grand, Clayton, for defendant-respondent.
   ANDERSON, Presiding Judge.

In this case American Institute of Marketing Systems, Inc., a Corporation organized and existing under the laws of the State of Missouri, sued James R. Ford, a nonresident of the State of Missouri. The action was in two counts. Count One was for breach of contract, and Count Two was for the balance alleged to be due on a promissory note executed by defendant in favor of plaintiff. Suit was filed December 16, 1966.

On March 22, 1967, defendant filed the following motion:

“Comes now Sheldon D. Grand and enters his appearance for defendant herein, specially, and moves to quash service of summons and return thereon, for the reason that defendant James R. Ford is not a resident of the State of Missouri and has never been personally served with process herein.”

The Sheriff’s return is not set out in the transcript, but it is stated in appellant’s suggestions filed in this Court that said return was as follows:

“I hereby certify that I have served the within summons in the County of St. Louis, State of Missouri, by delivery on the 16th day of February, 1967, a copy of the summons and a copy of the petition as furnished by the Clerk, to James R. Ford, defendant herein, by serving George M. Kinder.
Frank Malone, Sheriff By /s/ F. R. Horsfall, Deputy”

Appellant further states in said suggestions that in the contract sued on it was agreed that George M. Kinder of St. Louis County would serve as agent for defendant-respondent for the receipt of process for the enforcement of the contract. This contract though made a part of the petition by reference has not been lodged in this Court by appellant.

The motion to quash, heretofore mentioned was argued and submitted to the trial court of May 20, 1967. Plaintiff-appellant submitted its brief in opposition to said motion at said time, and defendant was granted 20 days to file his memorandum in support thereof without waiving his special entry of appearance.

The next entry shown by the transcript reads as follows:

“THEREAFTER, on 30th day of June, 1967, the Court, having duly considered same, entered its order as follows :
“ ‘Defendant’s motion to quash service of summons sustained. Costs against plaintiff.’ ”

On July 10, 1967, plaintiff filed its notice of appeal to this Court. Said notice reads as follows:

“Notice is hereby given that American Institute of Marketing Systems, Inc., above named, hereby appeals to the St. Louis Court of Appeals from the judgment and order entered in this action on the 30th of June, 1967.”

Defendant-respondent has filed in this Court a motion to dismiss the appeal for the reason that the ruling of the Court from which the appeal was taken is not such a final judgment as will support an appeal. This motion should be and is sustained. Color Process Co. v. Northwest Screenprint Co., Mo., 417 S.W.2d 934; State ex rel. Anonymous v. Murphy, Mo.App., 354 S.W.2d 42; Tobin Asphalt Products v. Henwood, Mo.App., 199 S.W.2d 415.

The appeal is dismissed.

RUDDY and WOLFE, JJ., concur.


author: STEINFELD, Judge.

text:
    W. S. SNYDER et al., Appellants, v. COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellee.
    Court of Appeals of Kentucky.
    Jan. 19, 1968.
    Marion Rider, Frankfort, for appellants.
    Robert Matthews, Atty. Gen., H. C. Smith, Asst. Atty. Gen., Perry R. White, Jr., Frankfort, for appellee.
   STEINFELD, Judge.

This is an appeal by the landowners from a judgment awarding them $25,600.00 for the taking of land from two farms in Franklin County for the construction of Interstate Highway 64, a limited access highway. They demand a new trial. We reverse.

Parcel 14 which is called the Bridgeport Farm was a highly improved dairy farm, with a ten acre tobacco base. It was generally rectangular in shape, contained 254 acres and was located on Highway 60 about one mile west of the Broadview Manor Subdivision and about one-half mile west of the State Fish and Game Farm. It fronted about 3,000 feet along U. S. 60 and extended southwardly from the highway a distance of about one-half mile. It contained many improvements such as a residence, tenant house, barns, silos and utility buildings. It was serviced by utilities and city water.

A portion of this tract, containing about 60 acres, extending from west to east across the south or rear boundary was taken on October 30, 1958, and a parcel containing approximately four acres lying south of the new right of way was cut off and left landlocked. No improvements were located on the areas landlocked or taken. The owners had operated a dairy farm on the 254 acres. According to the landowners’ evidence, 40 of the 60 acres taken were devoted exclusively to the raising of silage because this area could be plowed yearly without erosion.

The commissioners appointed in the county court proceeding which was filed on November 1, 1958, reported that the 60 acres taken from Parcel 14 had a value of $300.00 per acre or a total of $18,000.00, that the damage to the four acres which became landlocked by the taking was $800.-00 and that the damage to the remainder was $12,700.00. The total they awarded for this parcel was $31,500.00. From a judgment entered on December 1, 1958, in the county court pursuant to the commissioner’s report the Commonwealth timely appealed. KRS 177.087. The owners promptly filed an “Answer, Counter-Claim and Cross Appeal”. For reasons unknown to us the case was not tried until January and February 1966.

Before discussing the second tract called Parcel 23, which was located several miles from Parcel 14, we will deal with a claim of error which affects only Parcel 14.

The jury found that Parcel 14 was worth $80,000.00 before any was taken and $56,-000.00 thereafter, a difference of $24,000.00.

The Snyders contend that the lower court did not permit them to present any evidence as to the effect the taking of the 60 acres and severing the four acres had on the operation of the dairy farm. Dr. Snyder was asked to tell how the taking of the 64 acres affected his use of the farm. He answered, “it made it such that we were unable to find a plot of land on it that we could raise our silage corn.” The Commonwealth objected but the court ruled that he could testify to facts that would show- “where he was damaged by the taking in this particular * * * He was then asked to tell “what was the situation when you had only 190 acres left with your operation from an operational standpoint along as of the time * * * He complains because the court interrupted him and explained that they were trying the question of the difference in the fair and reasonable market value and not the operation of the dairy farm. Our holdings have been that “any evidence of diminished usability or versatility would be relevant and competent as a value affecting factor.” Com., Dept. of Highways v. Dennis, Ky., 408 S.W.2d 444, 447 (1966). The trial court correctly excluded the testimony with respect to Snyder’s operation of the farm. Com., Dept. of Highways v. Cottrell, Ky., 400 S.W.2d 228 (1966).

Parcel 23 (including Parcel 23A) contained 160 acres. It was bisected by the Old Harrodsburg Road and was located about one mile south of U.S. 60. Sixty acres were on the east side and 100 acres on the west side of the Old Harrodsburg Road. The 100 acre tract was not disturbed. Two and nine-tenths acres were taken from the southeast portion of the 60 acre tract and approximately 15 acres were severed. This severed part was the most southeastern part of the 60 acre tract. No improvements were taken except a pond.

The commissioners appointed in the county court proceedings reported that the 2.96 acres had a value of $250.00 per acre or a total of $640.00 and that the pond which was taken was valued at $800.00, that the severance damage amounted to $6,875.00' and that the loss of a fence caused damage of $330.00 making a total of $8,645.00. The same judgment which was entered in the county court with respect to Parcel 14 included this award. The appeal to the circuit court was from the entire judgment.

The jury declared that immediately before the taking on October 30, 1958, the value of Parcel 23 was $48,000.00 and that immediately thereafter the value was $46,-400.00 and that the difference was $1,600.00.

The owners contend that the lower court erred in permitting Mr. Robert Dean and Mr. Victor Williams, who testified for the Commonwealth, to place a value as of the date of trial on the 15 acre tract that was severed whereas the valuation date was the day on which it was taken. They point out that the property was taken as of October 30, 1958, and that the trial was not held until the end of January 1966. They argue that at the time of taking a controversy existed as to whether or not any provision had been made for an access road and that the plans were not completed until after the taking. The Commonwealth refers us to the petition and the exhibits filed with it in the county court, which it claims show this access road. The petition states that “Parcel 23A” was being acquired “for the purpose of constructing a Frontage Road”. The engineer for the Commonwealth referred to such a road when he answered that the frontage road serves the severed portion of Parcel 23 and that it was included in the original plans. Obviously, an access road from Highway 27 to the severed 15 acres was planned at the time of taking.

We have examined the testimony of the two witnesses and find no merit in appellants’ claim that the testimony referred to values at the time of the trial. Mr. Dean was asked the value of Parcel 23 “immediately prior to November 30, 1958 * * * ” and “the value of that property which remained immediately after November 30, 1958”. After asking Mr. Williams the value of “Parcel 23 immediately prior to November 30, 1958” and “immediately subsequent to November 30, 1958” he was told by counsel for the Commonwealth that “All of my questions * * * are based upon immediately prior to the taking and immediately after the taking.”

We now come to issues which involve both parcels. The Snyders contend “that the lower court went too far striking testimony of” their witness Dan Conley. Mr. Conley, who was exceptionally well qualified to state values (Com., Dept. of Highways v. Tyree, Ky., 365 S.W.2d 472 (1963); Com., Dept. of Highways v. Fister, Ky., 373 S.W.2d 720 (1963)) testified that the fair market value of Parcel 14 before the taking was $102,400.00 and the value of Parcel 23 at that time was $48,000.00. No objection was made to those answers. He also testified that the value of Parcel 14 after the taking was $53,800.00 and of Parcel 23 was $36,000.00. He was asked to explain how he arrived at the after taking values of the two parcels. In fixing the after taking value of Parcel 14 he said that he had considered the value of the 60 acres taken and the four acres which were severed. He estimated the damage or depreciation of the improvements by reason of the reduction in the size of the farm and concluded that a willing buyer would pay a willing seller $53,800.00 for that which remained. As he described each item of damage he ascribed to it the dollar figure which totaled to the reduction.

Counsel for the Commonwealth moved to strike Conley’s testimony as to the after taking values and to “admonish the jury not to consider his testimony”. He relied on Com., Dept. of Highways v. Sherrod, Ky., 367 S.W.2d 844 (1963). The court reserved its ruling. Conley was then asked to explain the basis on which he had fixed the after taking value of the remainder of Parcel 23. He said that the value of the 15 acres which were severed had been reduced one-half, the reduction in the total size of the farm had caused a reduction in the overall value and the loss of a pond caused additional damage. He placed dollar figures on each item, lumped them together for a total reduction of $12,000.00. The motions to strike and admonish were repeated at the close of Conley’s direct testimony. Again ruling was reserved.

He was cross-examined mainly with respect to Parcel 14. He said “When you appraise for anything, you’ve got to look at everything.” “I was supposed to estimate what the highway coming meant to the farm.” In explaining how he arrived at the reduction in value of that parcel to the extent of $48,600.00 he said the 60 acres taken and the four acres severed were worth $23,000.00 and the other reduction was arrived at as follows:

“A. I made 4 steps. One, I estimated the value of the 64. Then I proceeded on the other things that happened to the farm because of the 64. When I got through I said you’ve damaged this $48,600.00, and I’ve got a good reason for it, and I subtracted that from $102,-400.00 and got $53,800.00.”
******
“Q. And that represents your judgment of the market value of it?
A. That’s right.
Q. And you have merely explained the basis on which you arrived at your evaluation of what it would bring at a public sale?
A. Yes, sir.”

The court then ruled:

“(IN CHAMBERS)
THE COURT: On motion of the Commonwealth to strike the testimony of the witness Dan Conley, for whatever reasons were described in that motion, it is sustained to the extent that all but his testimony as to the before value of the farms from which the land was taken may be admitted, and the jury will be admonished that they may consider only that part of Mr. Conley’s testimony which fixes the value of the entire tract immediately before the taking at $102,-400.00 and they will not consider any of the balance of his testimony.”

The jury was admonished:

“Ladies and gentlemen, the testimony of the last witness you have heard, Mr. Dan Conley, has been stricken on motion of the Commonwealth for all purposes and to all matters except his testimony as to the value of the entire tract of land before the taking. For all other purposes and as to all other matters contained in his testimony, you will disregard and give no consideration to any of the matters about which he testified.”

The Snyders objected and they argue here that this ruling was prejudicial error and contrary to the law announced in Com., Dept. of Highways v. Mayes, Ky., 388 S.W.2d 125 (1965); Com., Dept. of Highways v. Garland, Ky., 394 S.W.2d 450 (1965); Com., Dept. of Highways v. Claypool, Ky., 405 S.W.2d 674 (1966). They also say that the testimony of this witness related to subjects other than values. The Commonwealth relies on Com., Dept. of Highways v. Mann, Ky., 387 S.W.2d 848 (1965).

Conley’s testimony included statements as to location, quality, improvements and suitable uses of these properties. No objection was made to the testimony relating to those subjects. An admonition should have been given for the reasons we will announce, but the one given was too broad.

Mr. Conley had been an appraiser for the Federal Land Bank for nine years and had appraised farm land continuously in all the counties in the area. In many cases he had appraised as many as five farms per day. He belonged to an organization which regularly studied farm values and he participated in the studies. After thoroughly describing the examination he had made of the two farms, the improvements thereon, and the uses of the properties, he stated his opinion as to the before taking values. He then stated what was taken away and what was severed. This testimony was proper and should not have been stricken. Com., Dept. of Highways v. Swift, Ky., 404 S.W.2d 467 (1966).

The statements to which the objections were valid were the dollar figures which he placed on the individual factors. Such testimony is incompetent on direct examination. Com., Dept. of Highways v. Tyree, Ky., 365 S.W.2d 472 (1965); Com., Dept. of Highways v. Sherrod, Ky., 367 S.W.2d 844 (1963); Com., Dept. of Highways v. Cardinal Hill Nursery, Inc., Ky., 380 S.W.2d 249 (1964); Com., Dept. of Highways v. Hopson, Ky., 396 S.W.2d 805 (1965); Com., Dept. of Highways v. Cottrell, Ky., 400 S.W.2d 228 (1966). It is proper, however, on cross-examination to delve into factors used by the witness to ascertain whether he has reached the values in a manner which we have approved. Com., Dept. of Highways v. Napier, Ky., 387 S.W.2d 861 (1965).

Since there will be another trial we consider it proper to answer the claim of appellants that Robert Dean was not qualified to testify as a valuation witness. He had taken a course in appraising and had accompanied another appraiser for several months before he appraised the property involved in this case. His short training and experience affects the weight of his testimony but was sufficient to qualify him to express his opinion as to values. Com., Dept. of Highways v. Musick, Ky., 400 S.W.2d 513 (1966); Com., Dept. of Highways v. Hudnall, Ky., 405 S.W.2d 293 (1966); Com., Dept. of Highways v. Brown, Ky., 415 S.W.2d 370 (1967).

The other points are not likely to arise again, therefore we consider it unnecessary to discuss them.

The judgment is reversed with directions to hold another trial.

All concur.


author: WADDILL, Commissioner.

text:
    James SULLIVAN, Appellant, v. AMERICAN SAW & TOOL COMPANY and the Workmen’s Compensation Board, Appellees.
    Court of Appeals of Kentucky.
    Jan. 19, 1968.

      Robert C. Carter, Carter & Meyers, Louisville, for appellant.
    Wilton R. Long, Jr., Hamilton, Hopson & Hamilton, Louisville, for appellees.
   WADDILL, Commissioner.

The Kentucky Workmen’s Compensation Board decided that appellant failed to establish that he was disabled within the meaning of the Workmen’s Compensation Act and therefore he was not entitled to an award of compensation. The circuit court affirmed. On this appeal it is contended that the Board’s decision “is not supported by substantial probative evidence and is contrary to the uncontradicted testimony and the applicable law.”

Appellant, twenty-eight years of age, was employed by the appellee, American Saw & Tool Company, from May 1963 to September 1964. His duties in this employment required him to daily inspect approximately 900 blades by placing them on a machine designed to reveal their defects. These blades were treated with a rust deterrent known as Kelite. Appellant was allergic to Kelite and this caused a condition to occasionally manifest itself on both forefingers and the middle finger of his right hand. Small blisters would appear on these fingers and when they healed the skin would become dry and hard. However, appellant was able to work and he lost no time from his job on this account. During September 1964 he became involved in a controversy with his foreman and apparently this quarrel resulted in his employment with appellee being terminated.

About a month thereafter appellant obtained a position with Brown and Williamson Tobacco Company at a substantially higher wage than he formerly received from appellee. This employment required him to supervise the work of approximately 75 people and to prepare certain records.

The change in employment and the complete withdrawal from Kelite has not as yet resulted in the cure of the rash on appellant’s fingers. Appellant testified that the irritated condition of his fingers caused some pain when he used them. However, he frankly conceded that the condition of his affected fingers improved when he followed the medical treatment which was prescribed and he also admitted that he had neglected to follow his physician’s advice.

Dr. M. T. Fliegelman, whose practice is limited to dermatology, testified that he had treated appellant’s skin rash on numerous occasions and he described it as small, red, scaly eruptions on the skin of three fingers. Dr. Fliegelman was of the opinion that the condition was of neurodermatitic origin and that the rash would respond to treatment if appellant would follow the prescribed medical treatment. Dr. Flie-gelman stated appellant’s chances of having recurrences of the rash were much greater than those of the average person and that, while appellant may be bothered by the rash, it is not disabling for the type of work that appellant was engaged in.

Appellant contends that the Board’s finding is not supported by substantial evidence. This contention embodies an improper test to be applied in the instant case because it overlooks the fact that appellant had the burden of persuading the Board to decide in his favor. Since he failed to do so the Board’s findings will not be disturbed unless a contrary finding is compulsory as a matter of law. Porter v. Goad, Ky., 404 S.W.2d 795; Lee v. International Harvester Company, Ky., 373 S.W.2d 418.

Appellant’s claim for compensation was based on a skin condition that the Board (affirmed by the circuit court) found to be non-disabling. It was conclusively shown that no wages were lost during his employment with the appellee company. Hence, to entitle him to compensation appellant must convince this court that: (1) the evidence requires a finding that the rash disabled him in an occupational sense and, having lost no wages, that he was discharged by appellee because of such disability; or, (2) he must establish that the occupational disease he allegedly contracted in appellee’s employment had impaired his capacity to perform his usual occupation. See Graves v. Merit Laundry & Dry Cleaning Co., Ky., 416 S.W.2d 736 and Leep v. Kentucky State Police, Ky., 366 S.W.2d 729.

The evidence falls far short of being of such conclusive character as to entitle appellant to an award of compensation as a matter of law. Moreover, there is a lack of convincing evidence that appellant was disabled or that he was fired as a result of contracting a skin rash. Neither did he establish to our satisfaction that his usual occupation requires him to work in industries where he would be further exposed to Kelite. In this connection there is nothing in this record that informs us as to composition of Kelite or that this substance is so generally used that appellant’s future employment opportunities will be lessened.

A review of the record and the applicable law convinces us that the Workmen’s Compensation Board and the circuit court correctly decided this case.

The judgment is affirmed.

All concur.


author: DAVIS, Commissioner.

text:
    Elvis POWELL, Appellant, v. Lucille POWELL, Appellee.
    Court of Appeals of Kentucky.
    Jan. 19, 1968.

      Joseph S. Freeland, Paducah, for appellant.
    R. L. Myre, Sr., Paducah, for appellee.
   DAVIS, Commissioner.

Elvis Powell appeals from an order denying relief on his plea for modification of a previous judgment relating to the custody of children and increasing the amount required to be paid by him for maintenance of the children. The appellant asserts that the order must be vacated because of the trial court’s failure to make findings of fact and conclusions of law, because of the court’s error in refusing to transfer custody of the children to appellant, and because of the increase in maintenance payments from $130 to $150 per month.

The parties were divorced by a judgment of the Livingston Circuit Court dated May 27, 1963. By the terms of the divorce judgment, custody of the two daughters of the parties, then aged eleven and five years, was granted to Lucille, and Elvis was directed to pay $130 per month for their maintenance.

On March 24, 1965, Elvis filed what he denominated as “Petition for Modification of Judgment,” in which he asserted entitlement of custody of the children on the basis that Lucille “* * * has entered into and now maintains an open and notorious immoral relationship with [a man] to whom she is not married, and by reason of which plaintiff is no longer a fit and proper person to have the custody of said children.”

Elvis also alleged that another change in circumstances had occurred by reason of Ms having remarried; he stated that his new home with his new wife would be a fit and proper place for the children to reside.

A full hearing was had respecting the allegations made by Elvis, and numerous witnesses were heard. There was no direct testimony tending to show any act of immorality or other improper conduct between Lucille and the alleged paramour. The evidence offered in behalf of Lucille was abundantly sufficient to warrant the trial court’s denial of the relief sought by Elvis.

The so-called “Petition for Modification of Judgment” was, in fact, a motion. CR 7.01 enumerates the allowable pleadings and limits them. There is no provision for a “petition” in CR 7.01. It is provided by CR 7.02 that an application to the court for an order shall be by motion. The paper filed by Elvis was such an application to the court; hence, it was a motion. By the terms of CR 52.01, the trial court was not required to state its findings of fact and conclusions of law. See LeBus v. LeBus, Ky., 408 S.W.2d 200. KRS 403.-070, dealing with applications for modification of custody orders, states that “ * * * upon the petition of either parent, the court may revise any of its orders as to the children * * However, even during practice under the former Civil Code, when a petition was equivalent to the present complaint, the “petition” mentioned in KRS 403.070 was treated as a motion. See Wolfe v. Wolfe, 242 Ky. 162, 45 S.W.2d 1043, and cases there discussed.

As respects the contention that the trial court erred in refusing to grant Elvis custody of the children, it suffices to say that the evidence presented to the court was sufficient to persuade it that the best interests of the children would he served by leaving their custody with Lucille. The evidence adduced by Elvis was not sufficient to impel a finding in favor of Elvis. The trial court did not abuse its discretion by denying Elvis’ motion to transfer custody of the children to him. Stillwell v. Stillwell, Ky., 420 S.W.2d 130.

We find no merit in appellant’s contention that the court erred in increasing the maintenance allowance for the children from $130 to $150 per month. Although there was a showing that appellant’s income was slightly less at the time of the hearing than it had been at the time of fixing the original amount of the allowance, it was also shown that the reasonable expenses incident to the maintenance of the children had substantially increased since the date pi the original judgment. We are unable to say that the allowance fixed was excessive in light of the circumstances presented in this record.

The judgment is affirmed.

All concur except OSBORNE, J., who did not participate in the consideration of this case.