author: CROSS, Judge.

text:
    CITY OF SALISBURY, Missouri, a Municipal Corporation, Plaintiff-Respondent, v. Gene NAGEL et al., Defendants-Appellants.
    No. 24599.
    Kansas City Court of Appeals. Missouri.
    Oct. 2, 1967.

      Robert Devoy, Brookfield, James J. Wheeler, Keytesville, for appellants.
    George S. Thompson, Salisbury, for respondent.
   CROSS, Judge.

Plaintiff, City of Salisbury, a city of the forth class, brought this action pursuant to Section 71.015 V.A.M.S., the so-called Sawyers Act, seeking a declaratory judgment authorizing it to annex adjoining territory consisting of three small tracts aggregating approximately 131 acres. The cause was instituted as a class action under provisions of Section 507.070 V.A.M.S. against twenty defendants alleged to be fairly representative of all the inhabitants and landowners of the area sought to be annexed. Thereafter by leave of court two additional parties intervened as defendants. Upon trial the court found the issues generally in favor of plaintiff and made specific findings (among others) “that this is a class action and that the defendants named herein and the defendant interveners joined herein provide adequate representation of all that constitutes a class who will be affected by this action as provided by Section 507.070 VAMS.”, and that “the annexation of the above described areas is reasonable and necessary to the proper development of the City of Salisbury and that said City of Salisbury has the ability to furnish normal municipal services to the aforementioned annexed areas within a reasonable time;”. In conformity with those findings judgment was entered authorizing annexation of the three proposed areas. Defendants have appealed.

The appeal raises issues as to whether the defendants named and who intervened provided adequate representation of all members of a class affected by the action, whether the trial court should have stricken plaintiff’s pleadings for failure to answer interrogatories, whether passage of the resolution for annexation was lawful, and whether the trial court’s finding that the proposed annexation was reasonable and necessary to the proper development of the city is supported by the evidence. In determining these questions we must view the case upon both the law and the evidence, weigh the evidence, and render such judgment as the trial court ought to have given. The judgment shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity .of the trial court to -judge the credibility of the witnesses. Civil Rule 73.01(d), V.A.M.R.; City of Creve Coeur v. Huddleston et al., Mo.App., 405 S.W.2d 536.

As their first point defendants contend the trial court erred by including in its findings the following recital: “On December 8, 1965, the day said cause was set for trial, there appeared before the court plaintiff represented by its attorney, George S. Thompson, and defendants Richard Gesling, Carl Freese, Gene Nagel, Charles F. Tadlock, Audra McClain, George Edward Williams, George T. Roling, Anna Grigsby, William Leber, Neil Davis and William Randolph, represented by their attorney, James J. Wheeler, and all other defendants zvere duly served or voluntarily entered their appearances but did not appear in person or by counsel and did not actively participate in the trial.” (Our italics.) Defendants insist that the quoted recital “is not supported by the evidence or this record,” in that “There is nothing in the record to show that any of the other defendants (those not specifically named), and certainly not any defendants representing a class, were either served or voluntarily entered their appearance.” Defendants are reminded that it is not the respondent’s burden to show that the finding in question is supported by the record. To the contrary, it is presumed that the finding is correct. Under that presumption defendants, as appellants, have the burden of affirmatively establishing the alleged error. 3 Mo.Digest 1, Appeal and Error, ‘©^900-901. The transcript before us contains no entry or recital that is incorrectly reflected by or inconsistent with the trial court’s finding. Consequently we rule that no error has been shown with respect thereto.

Defendants complain the court erred to their prejudice by refusing to strike plaintiff’s pleading “for failing to answer interrogatories.” The interrogatories in question are here quoted:

“29. State the total bank deposits in the City of Salisbury in the years of: (a) in 1900 (b) in 1910 (c) in 1920 (d) in 1930 (e) in 1940 (f) in 1950 (g) at the present time.
30. State the total saving deposits in the City of Salisbury in: (a) in 1900 (b) in 1910 (c) in 1920 (d) in 1930 (e) in 1940 (f) in 1950 (g) at the present time.
31. State the total number of bank clearings in: (a) in 1900 (b) in 1910 (c) in 1920 (d) in 1930 (e) in 1940 (f) in 1950 (g) at the present time.
34. State the total number of electricity users in: (a) 1920 (b) 1925 (c) 1930 (d) 1935 (e) 1940 (f) 1945 (g) 1950 (h) 1955 (i) the present time.
35. State the total number of water users in the years of: (a) 1920 (b) 1925 (c) 1930 (d) 1935 (e) 1940 (f) 1945 (g) 1950 (h) 1955 (i) at the present time.”

Plaintiff responded to the quoted interrogatories in the first instance by answers as follows:

“29. Information here sought not information peculiar to city and such information is as available to defendants as to plaintiff.
30. See 29 above.
31. See 29 above.
34. (a) unknown (b) unknown (c) unknown (d) unknown (e) unknown (f) unknown (g) unknown (h) unknown (i) unknown.
35. (a) unknown (b) unknown (c) unknown (d) unknown (e) unknown (f) unknown (g) unknown (h) unknown (i) unknown.”

Thereafter, on motion of interrogating defendants, the trial court ordered that plaintiff file more specific answers, pursuant to which plaintiff filed, on September 28, 1964, its “Second Answers” which included the following:

“In answer to interrogatory No. 29 plaintiff says it does not know the answers to said questions a, b, c, d, e, f, and g.
“In answer to interrogatory number 30 plaintiff says that it does not know the answers to questions a, b, c, d, e, f and g.
“In answer to interrogatory number 31 plaintiff says that it does not know the answers to questions a, b, c, d, e, f, and g.
“In answer to interrogatory number 34 plaintiff states that it does not know the answers to questions a, b, c, d, e, f, g, h, and i. Further answering plaintiff states that at the present time the Board of Public Works mails out 980 statements to electricity users.
“In answer to interrogatory number 35 plaintiff states that it does not know the answers to paragraphs a, b, c, d, e, f, g, h and i. Further answering plaintiff states that the Board of Public Works sends statements to approximately 750 water customers.”

Thereafter defendants filed and the court overruled their motion to strike plaintiff’s pleadings on the ground that the answers plaintiff had filed to the interrogatories submitted to it, inclusive of those numbered 29, 30, 31, 34 and 35, did not comply with the rule which requires full and complete answers to interrogatories.

In argument of this point defendants have virtually abandoned complaints directed against the sufficiency of plaintiff’s answer to interrogatories numbered 29, 30 and 31. They suggest no reason why the trial court should have taken punitive action against plaintiff because its answers to those questions went no further than to disclaim any knowledge relative to the amount of bank deposits, savings deposits and bank clearings in Salisbury at the “present time” or at various times during the previous sixty-five years. For that matter, it is clear to us that the trial court would have exceeded its authority in requiring additional answers or striking plaintiff’s pleadings on the ground that the answers were insufficient. Civil Rule 56.01 does not require a party to furnish information upon interrogation other than such as is “available” to him. The information necessary to answer Interrogatories Nos. 29, 30 and 31 “more fully,” (or even to any extent at all) was not reasonably available to plaintiff. The law does not require or permit plaintiff city to perform the ultra vires function of compiling and preserving statistical financial data of the kind about which defendants inquire. Further answers could have been made only on the basis of information obtained by interviewing the officers and employees of depository banks, and other financial institutions which are strangers to this suit, or by making an investigation into their books and records. “The court can not properly require a party to conduct such an investigation and any attempt to do so is in excess of the jurisdiction of such court.” State ex rel. Mid-America Pipeline Company v. Rooney, Mo.App., 399 S.W.2d 225.

Nor is it our opinion that any portion of plaintiff’s answers to interrogatories 34 and 35 constitutes “refusal of a party to answer any interrogatory” as basis for an order of court striking plaintiff’s pleadings. Although, as owner of municipal electric and water systems, the city could be expected to have reasonably current records showing the number of its own electric power and water consumers, it may not be assumed, or reasonably expected, that when the city filed answers to the interrogatories in 1964 there were any records still in its possession or information was available to it to show the number of such customers during the years from 1920 through 1950. The city’s answers disclose the total number of electricity and water patrons “at the present time,” i. e., as of September 28, 1964. In the same answers it is stated, under oath, that the city does not know the total number of electricity and water users in 1920, 1930, 1935, 1940, 1945, 1950 and 1955. Defendants do not attack the veracity of these verified answers. We therefore accept them as representations of the truth conclusively establishing that the information sought was not available to the city. Thus the matter is foreclosed. See State ex rel. Mid-America Pipeline Company v. Rooney, supra, and cases there cited.

Defendants challenge the legal sufficiency of the resolution to annex additional territory on the ground that no entry was made on the journal or in the minutes of proceedings of the board of aldermen to show the “ayes” and “nays” voted on the proposition — a procedure prescribed by Section 79.130 V.A.M.S. as requisite to enactment of a valid ordinance by a city of the fourth class. In fact the ayes and nays were not recorded, but the minutes of the meeting of the board at which the resolution was presented recite that all members of the board were present except one, and that the resolution to annex was adopted by a vote of 5 to 0.

Defendants argue that the terms “resolution” and “ordinance” are interchangeable and that a resolution is not effective unless passed in the manner provided by Section 79.130 V.A.M.S. for the enactment of ordinances. Defendants’ view that a resolution and an ordinance are the same thing is not shared by Missouri courts which have considered the question. In City of Cape Girardeau v. Fougeu, 30 Mo.App. 551, the court noted: “According to ordinary parliamentary practice, a resolution is a very different thing from a law or an ordinance. A resolution is merely a suggestion or direction in writing, concurred in by the two houses of the assembly, if there be two houses, or passed by one house, if there be but one, and not submitted to the executive for his approval. A resolution is ordinarily passed without the forms and delays which are generally required by constitutions and municipal charters as prerequisites to the enactment of valid laws or ordinances. It need be read but once and may be passed by a viva-voce vote, without calling the ayes and noes, whereupon, when engrossed, it becomes operative.” In Haskins v. City of DeSoto, Mo.App., 35 S.W.2d 964, the court held as follows: “Now it will not do to say, as defendant seems to argue, that a municipal corporation can act only through an ordinance, for the general law is quite to the contrary. Of course, in the large majority of instances the statutes do require the formality of an ordinance to warrant a city in exercising the power conferred upon it; and, where the statute so provides, there is no doubt that an ordinance authorizing it is a necessary condition precedent to the making of a valid and enforceable municipal contract. * * * However, the authorities hold that, in the absence of such statutory require-merits, that is, when the mode of contracting is not prescribed by statute or charter, as the case may be, no ordinance or resolution is necessary to the making of the contract, nor is it even essential that it be in writing. 44 C.J. 97; 19 R.C.L. 1060.”

Recent decisions of the Supreme Court have construed the term “resolution” as it is used in the Sawyers Act. In Julian v. Mayor, Councilmen and Citizens of the City of Liberty, Mo., 391 S.W.2d 864, the Supreme Court commented and ruled as follows: “ ‘The term “resolution” denotes something less formal than the term “ordinance”; generally it is a mere expression of the opinion or mind of the council concerning some matter of administration coming within its official cognizance, and provides for the disposition of a particular item of the administrative business of a municipal corporation. * * * A resolution is not a law, and in substance there is no difference between a resolution, order and motion.’ 37 Am.Jur. Municipal Corporations § 142; 62 C.J.S. Municipal Corporations § 411; Vol. 5 McQuillin, Municipal Corporations, § 15.02; Baker v. Lake City Sewer Dist., 30 Wash.2d 510, 191 P.2d 844; Mitchell v. Parshall, N. D., 108 N.W.2d 12; Kalamazoo Municipal Utilities Association v. City of Kalamazoo, 345 Mich. 318, 76 N.W.2d 1, 61 A.L.R.2d 583. In the absence of some express requirement, a resolution need not be in any set or particular form, 37 Am.Jur. Municipal Corporations § 145, and while a resolution ‘is a very different thing’ from an ordinance, City of Cape Girardeau v. Fougeu, 30 Mo.App. 551, 556, and will not suffice when action on the part of a municipality is required to be taken by ordinance, Schmoll v. Housing Authority of St. Louis County, Mo., 321 S.W.2d 494, 499, every ordinance necessarily includes all the essential elements of a resolution.

“Turning now to the language of the Sawyers Act, it provides that whenever the governing body of any city has adopted a resolution to annex, or stated another way, whenever the governing body of any city has expressed its intention to annex any unincorporated area of land, then ‘before proceeding as otherwise authorized by law or charter’ the declaratory judgment provided for therein shall be obtained. We consider it to be immaterial how that intention to annex is expressed, that is, by a resolution denominated as such, by a motion or order of the governing body of the city, or by an ordinance, which is more than but includes all the elements of a resolution. The name given to the action of the governing body is not the controlling factor. The clearly expressed intent of the Legislature in enacting the Sawyers Act was that any city to which the Act is applicable shall not proceed beyond the expression of intent to annex until it obtains the declaratory judgment therein required, and to hold otherwise would be to give an extremely technical construction to the words used, and would result in thwarting the obvious purpose of the statute. We hold in this case that the Sawyers Act by its terms is applicable to the City of Liberty, and that once the governing body thereof announced its intention to annex an unincorporated area of land, regardless of how that intention was expressed, the requirement of the Sawyers Act became mandatory, and constituted a condition precedent to the exercise of the delegated legislative authority to annex an unincorporated area.” Also see City of Hannibal v. Winchester, Mo.Sup., 391 S.W.2d 279.

We are persuaded by the foregoing authority to rule in this case that the mandatory formalities of procedure prescribed by Sec. 79.130 for passage of an ordinance have no application to the passage of a resolution and that therefore the recording of the ayes and nays was not prerequisite to the validity of the resolution here involved.

Defendants’ main point is a contention the trial court erred in finding that the proposed annexation was reasonable and necessary to the proper development of the city when there was no evidence to support such a finding. The question presented does not require this court to determine the advisability or propriety of the proposed annexation, since that is a matter of political decision resting within the legislative discretion of the city. “Judicial review of this discretion is limited to a determination to the reasonableness of the legislative action; and if there is a sufficient showing of reasonableness to make that question fairly debatable, then the legislative decision is conclusive. City of St. Joseph v. Hankinson, Mo., 312 S.W.2d 4(7); Julian v. Mayor, Councilmen and Citizens of the City of Liberty-Mo., 391 S.W.2d 864(3) ; In reaching our decision we may not overlook — -and we have not— the principle that in judicially determining the issue of reasonableness we must consider the comparative benefits and detriments to both the City and the area to be annexed. City of Olivette v. Graeler, Mo., 338 S.W.2d 827(16); City of Aurora v. Empire Dist. Elec. Co., Mo.App., 354 S.W.2d 45(4).” City of Creve Coeur v. Huddleston, Mo.App., 405 S.W.2d 536.

It is not feasible or necessary to digest in detail the large volume of evidence before us. Its substance insofar as it relates to our decision is here set out. The population of Salisbury in 1960, as shown by the census of that year, was 1787, an increase of 6% since the preceding census. The population figure for the current year was not available. The city’s municipal services include: an electric light and power system; a water system; a sewer system, inclusive of a disposal lagoon; a police department staffed by three regular and two extra police officers; a fire department with two fire fighting units and a regularly employed chief; a street department employing three men; a public library; and, a public park with recreational facilities. The city is in sound financial condition, has a current tax rate of $1.50, and has no need for or prospect of incurring additional bonded indebtedness. The downtown business district extends three blocks. It contains several vacant business buildings, none of which appear suitable for modern commercial purposes, being at least sixty years old and no wider than thirty feet. There are approximately eighty “vacant” lots in the city, inclusive of all properties which occupy more than one “lot” as that term is used in legal descriptions. There is no evidence to indicate whether any are available for sale. Although industries are presently seeking sites for location in the area, there appear to be none within the city suitable for industrial purposes. Highway 24 describes an arc generally around and close to the present northwestern and northern boundaries of the city. The Wabash Railroad lies south of Highway 24 and bisects the northern portion of the city.

The principal portion of the area proposed for annexation lies generally in a curve along both sides of Highway 24 as it sweeps around the northwestern and northern boundaries of the city. During the last twenty years, and ‘ particularly the last ten years, this area has undergone a very substantial development for commercial and industrial purposes. At the time of the trial a total of at least thirty-seven business establishments had been built and were operated in the area, including five restaurants; seven automobile service stations; three garages; three implement companies; two food markets; three veterinarian establishments, one being a small animal hospital; a laundry service; a feed store; a liquor store; a bowling alley; a rural gas service; a motel; a produce business; a junk and salvage yard; a sporting goods store; a trading post; a gas and oil bulk plant; a fertilizer plant; a trailer court; and, a furniture store. There are at least two suitable industrial sites in the proposed area, one of which has been under contract option. A substantial number of residences have been built in the area.

The city’s light and power service is presently available to the entire proposed area. Water service is available to consumers in the area who extend water lines from the city’s mains and pay a small monthly service fee. In some instances city sewers are in use by patrons in the area. All of the businesses, with one exception, and all of the houses within the area, receive one or more of the utility services furnished by the city (water, electricity or sewer) and several businesses enjoy all three services. The city presently furnishes to the proposed area, without cost, municipal services consisting of fire protection, police protection, and part time street maintenance, and provides street lighting in some portions of the area.

The evidence shows that the three utility services (electricity, water and sewers) are adequate to supply all of the proposed area in addition to the city itself. The water system is modern, is sufficiently capable of supplying “two to three times the need,” and its mains at the present time are within fifty feet of all potential users in the area. The sewer system is also modern and adequate to serve both the city and the area, and will be available to all area users. Other advantages would accrue to the proposed area from annexation. The city would be enabled to furnish improved police services, such as more frequent patrolling. If annexed, the area would receive better fire protection because both of the city’s fire trucks would then be available to it, whereas presently only one of the fire trucks is permitted by ordinance law to leave the city limits. Street lighting would be augmented to the area’s needs. All of the city’s street maintenance equipment would be available to service the streets of the area. No additional equipment is needed. By the foregoing evidence the city has satisfactorily demonstrated its ability to furnish normal municipal services to the proposed annexation area. City of St. Ann v. Buschard, Mo.App., 356 S.W.2d 567.

Defendants’ principal prong of defense is argument that “much of the area sought to be annexed is suited only for agricultural purposes.” This statement does not accurately reflect the record. The “agricultural” lands referred to consist of one three acre tract belonging to one Steinebach on which the owner feeds fifteen head of hogs and four calves; a small irregular tract lying along Highway 24 belonging to defendant Anna Grigsby; also two tracts lying alongside Highway 24 belonging to defendant Williams, one of which is a hog pasture, the other a field “you can cultivate” but which is not said to be in cultivation. We do not believe that any of the above described tracts should presently be classified as “agricultural” lands. As for the Williams tracts, for the past twenty years he has sold, from lands similarly located in the area and of like nature, numerous smaller tracts for commercial building sites at prices ranging from $1,000.00 to $1,500.00 an acre. It is apparent from his testimony that he values his remaining holdings at similar figures. The Steinebach and Grigsby parcels are similar in nature and location, i. e., immediately fronting upon Highway 24, and there is no reason to believe that their highest and best use would be other than for building sites in the area and that their market value for that purpose would be any less than the above prices received by Williams for his acreage. The evidence shows that farm land in the Salisbury area that is truly agricultural in its nature and use has a market value of no more than approximately $300.00 an acre. On this question the Supreme Court said in State ex inf. Major v. Kansas City, Banc, 233 Mo. 162, 134 S.W. 1007: “If land near a city is being held for prices far above any rural use, and men in that city are willing to pay for it prices far in excess of any rural use, that land is as fairly within the future development of the city as the judgment of those who are most interested can place it. * * * nor does it matter that a considerable part of the land is at present used for agriculture; as its value is derived from its prospective town use, and not from its present country use, it might properly be included within the city.” Also see State ex inf. Mallett ex rel. Womack v. City of Joplin, 332 Mo. 1193, 62 S.W.2d 393, where the court ruled to the effect that land, though used for agriculture, may lose its character as such when it attains a value far in excess of its real agricultural value, and thus become subject to annexation.

Defendants also argue that the annexation would be unreasonable because some structures which were built after the litigation was commenced are partially within and partially outside of the proposed area. No supporting authority is submitted. We believe this theory is unsound. In the first place, the reasonableness of the annexation proposed is for determination under the conditions shown to exist at the commencement of the suit. Secondly, if the law were as defendants suggest, any annexation proceeding could be defeated by building a structure partly in and partly outside the proposed area boundary line after the petition is filed and before trial.

As for the major portion of the proposed area, the evidence presents the familiar picture of a frequently recurring phenomenon spawned by this automotive age: a quasi-municipal community, principally commercial, partly residential, neg-ligably agricultural, that has spontaneously originated and developed alongside a major highway at the outskirts of an existing municipality. The community in this case has some attributes of a city, but lacks certain factors requisite to orderly growth and a healthy social structure. It is not able to furnish for itself the essential public services which only a governmental unit can provide, as the city is now doing. And, while it bears physical resemblance to a city, it has none of the municipal powers necessary for systematic development and to protect the various interrelated interests of its community membership.

For that matter it seems clear to us that the dvelopments in the proposed area represent an actual growth of Salisbury itself, especially in view of the city’s lack and need of industrial sites and suitable commercial buildings, and the adaptability of most, if not all, of the land in the area to town uses, which is reflected in its greatly increased value. Furthermore, as a matter of public policy, it is not unreasonable that Salisbury should have a voice in guiding the growth of this area “which is growing up in such a miscellaneous fashion on its doorstep,” City of St. Joseph v. Hankinson, Mo.Sup., 312 S.W.2d 4. These enumerated factors are universally held to favor annexation. “Sometimes one factor alone is of importance; sometimes several combine their weight to determine the matter.” State ex inf. Major v. Kansas City, Banc, 233 Mo. 162, 134 S.W. 1007. In Mauzy v. City of Pagedale, Mo.App., 260 S.W.2d 860, the court said: “In fact, there can be no hard and fast rule laid down for determining the reasonableness of a proposed extension; and a case of reasonableness is made when it appears that the land annexed is so situated as to be adapted to urban purposes, and as to be necessary or convenient to a proper exercise of the city government, even though a portion of the land may be as yet undeveloped or in use for agricultural pursuits.” For all these persuasive reasons we have concluded that the city has shown a reasonably immediate need for extension of its boundaries.

From the standpoint of the proposed area, its annexation to the city would give it the benefit of complete electric, water and sewer services as they are presently enjoyed by the city proper, the benefit of municipal government as a stabilizing factor of community life, and the benefit of improved services in police protection, fire protection, street lighting and maintenance, sanitation, health and welfare — all to be rendered on the basis of municipal obligation rather than as a courtesy or gratuity extended by the city.

The city has satisfied its burden in this case by proving that there is, at least, a debatable question whether the proposed annexation is reasonable and necessary to its proper development.

One more question remains for decision. Defendants charge the trial court with error in permitting plaintiff to maintain this suit as a class action, for the stated reason that plaintiff failed to prove the defendants were fairly chosen and adequately and fairly represented the whole class. It is not contended that plaintiff’s petition is insufficient to support such proof.

It is provided by the Sawyers Act that “Such action (for a declaratory judgment authorizing annexation) shall be a class action against the inhabitants of such unincorporated area under the provisions of section 507.070, RSMo [1949].” Subsection one of Section 507.070 provides, in part, that: “If persons constituting a class are very numerous or it is impracticable to bring them all before the court, such of them, one or more, as will fairly insure adequate representation of all may, on behalf of all, sue or be sued, * * Section 507.070 is supplemented by Civil Rule 52.09, which imposes the following requirement : “Whenever an action is instituted by one or more plaintiffs as representative or representatives of a class or against one or more defendants as representative or representatives of a class, the petition shall allege such facts as shall show that they or the defendants specifically named and served with process have been» fairly chosen and adequately and fairly represent the whole class. The plaintiff shall be required to prove such allegations, unless all of the members of the class have entered their appearance, and it shall not be sufficient to prove such facts by the admission or admissions of the defendants who have entered their appearance.” The foregoing requirements, both by statute and civil rule, are mandatory and not merely technical or directory. Campbell v. Webb, 363 Mo. 1192, 258 S.W.2d 595; Hribernik v. Reorganized School District R-3, Mo.App., 276 S.W.2d 596 (cited by defendants). Although various considerations have material bearing upon the question whether representatives of the class in an action under Section 507.070 have been fairly chosen and have afforded the class legally adequate representation, that question is to be determined from the particular facts appearing in each individual case. City of St. Ann v. Buschard, Mo.App., 299 S.W.2d 546; Sheets v. Thomann, Mo.App., 336 S.W.2d 701. The substance of defendants’ argument on this point, other than references to Section 71.015, Section 507.070, Civil Rule 52.09, and two Missouri cases, is that “There is no evidence as to how many farmers, how many merchants, how many service stations, are affected, and none as to other occupations. There is no evidence as to how those chosen to be served with process were selected, or as to their occupation or interest. For all the record shows, all of those served with process could represent but one single group and one single interest.” This argument is not consistent with the record, as will be demonstrated.

As noted heretofore, this suit was brought against twenty defendants, all of whom were either duly served with summons or entered their appearance. Contrary to defendants’ representation, there is evidence in the record amply sufficient to identify fourteen of those original defendants with respect to their business and property interests, as follows: Gene Nagel, filling station operator; Richard Gesling, feed store proprietor; Anna Grigsby, land owner; William Todd, owner of business building; George Edward Williams, owner of land from which lots have been sold for commercial and industrial purposes; Louis Sellmeyer, a landowner; Neil Davis, salvage yard operator; Russell Wright, filling station operator; Thomas Keen, a residence owner; William Leber, restaurant operator and sporting goods dealer; Audra McClain, implement dealer; Carl Freese, garage owner; William Sturm, bowling alley and restaurant operator and homeowner; George Roling, IGA store owner.

The record discloses that eleven of the twenty original defendants filed answer and otherwise resisted prosecution of this suit. Those active participants were defendants Carl Freese, Richard Gesling, Gene Nagel, Charles F. Tadlock, Audra McClain, George Edward Williams, George T. Rol-ing, Anna Grigsby, William Leber, Neil Davis and William Randolph.

The persistent and vigorous defense conducted by those eleven answering defendants, as shown by the record itself, is convincing proof that they were fairly chosen and did in fact adequately and fairly represent the whole class. At the outset they employed and have since been represented by able counsel of recognized ability. Prior to answer they attacked plaintiff’s petition by a motion to dismiss and a motion to make more definite and certain. Those motions were denied and thereafter they filed a joint answer. Next they filed “Defendants’ First Interrogatories” consisting of 52 questions. Dissatisfied with plaintiff’s answers thereto, they filed their “Motion to Compel Answers to Interrogatories”, pursuant to which, on order of the court, they received more specific answers to their “First Interrogatories.” Thereafter they filed a second “Separate” answer, which was followed by their “Motion to Strike Pleadings for Failure to Answer Interrogatories”, and in turn by their “Motion to Add, Drop and Substitute Parties,” and finally a second “Motion to Dismiss.” Three hundred pages of transcript devoted to the trial alone disclose a continued vigorous and ably conducted opposition to plaintiff’s efforts in this action, which is further manifested by their prosecution of this appeal. Since it is clearly apparent from the record before us that the proceedings herein were genuinely adversary, and in view of the wide diversification of business and property interests possessed by the named defendants, as shown by the evidence, we conclude that the plaintiff has satisfied its burden to show that its selection of defendants to represent the whole class has satisfied the law’s requirements and that the trial court did not err in so ruling. In reaching this result we have duly considered the case, City of Lebanon v. Holman, Mo.App., 402 S.W.2d 832, cited and relied upon by defendants, where the only active defendants to represent widely divergent property interests were a veterinarian, a retired undertaker and an automobile supply dealer who owned grazing land in the proposed area. Those facts are materially different from the facts before us. The cited case is not persuasive on the instant question.

The judgment is affirmed.

HOWARD, P. J., and L. F. COTTEY, Special Judge, concur.

      . Citing Crawford, Class Actions under the Missouri Code, 18 Kansas City L.Rev. 103; Class Actions under the Missouri Code, 3 St. Louis U.L.J. 391; 39 Am. Jur., Parties, Sec. 48, p. 922.


source: Caselaw Access Project

author: HOWARD, Presiding Judge.

license: Public Domain

text:
    Russell HORTON, Administrator of the Estate of Lettie Horton, Deceased, Appellant, v. ESTATE of Ben ELMORE, Deceased, Charles F. Elmore, Administrator W/W/A, Respondent.
    No. 24638.
    Kansas City Court of Appeals. Missouri.
    Oct. 2, 1967.

      George S. Thompson, Salisbury, for appellant.
    Edward W. Speiser, Salisbury, for respondent.
   HOWARD, Presiding Judge.

This case originated in the probate court of Chariton County, Missouri, wherein Let-tie Horton filed her petition for an order directing the administrator of the estate of Ben Elmore, deceased, to deliver to her a promissory note dated July 17, 1964 in the amount of $10,000.00, executed by F. B. Manion and Ruby F. Manion and payable to Ben Elmore or Lettie Horton as tenants by the entirety. Before this application could be heard, Lettie Horton died and her administrator was substituted as petitioner. Thereafter, the probate judge was disqualified and the matter was certified to the circuit court of Chariton County where a trial to the court sitting without a jury resulted in a judgment finding the issues for the defendant and against the plaintiff and declaring that the note was the property of the estate of Ben Elmore. Plaintiff has duly appealed to this court.

Plaintiff contends that the finding of the trial court was erroneous because, under the evidence, it should be that the note in question became the sole property of Lettie Horton on the death of Ben Elmore. The facts appear to be as follows. Ben Elmore was 84 years of age when he died April 28, 1965. He was a retired farmer and for a number of years had engaged in the business of loaning money and collecting the interest and principal on the notes evidencing such loans. He and Lettie Horton are described as having been sweethearts for over 30 years. They never married. At the time here pertinent, Ben Elmore owned an apartment building in which there were four apartments. He occupied one apartment and Lettie occupied another apartment. Lettie did not pay any rent for her apartment. She performed many errands for Ben and as one witness descibed it, she did his legwork. She took checks to the bank and cashed them for Ben and paid his utility bills and performed other similar minor services. She was 77 years old at the time of her death on January 20, 1966. Ben Elmore stated to several people that he was going td take care of Lettie as long as she lived and was going to leave her a life estate in the apartment house in his will. One witness with whom Ben discussed business matters advised him that the apartment house would not pay for itself and that Lettie could not maintain it unless Ben left her some money to take care of the apartment house.

For a number of years Ben Elmore had a $10,000.00 note from F. B. Manion. This note had been renewed several times. The first two or three notes evidencing this debt were made payable to Ben Elmore alone and were signed by Mr. Manion alone. A year prior to the making of the note here in question, which would have been in July of 1963, the note for this $10,000.00 debt was renewed and for the first time it was made payable to “Ben Elmore or Lettie Horton as tenants by the entirety". Marjorie Henry, the vice president and secretary of the Salisbury Bank, testified that “sometime ago” Lettie came into the bank with a note and told her that Ben Elmore wanted her (Lettie’s) name inserted in the note. She advised Lettie that this could not be done but that the note would have to be rewritten. She did not know what note Lettie had with her at that time.

On July 17, 1964, Ben Elmore went to F. B. Manion’s office and a new note was made. Ben Elmore told Manion that he wanted the note payable to “Ben Elmore or Lettie Horton as tenants by the entirety”. Manion called his office girl into his private office and, in the presence of Ben Elmore, instructed her now to type up the note. She wrote the note as instructed and returned it to Mr. Manion. Manion then signed it in Ben Elmore’s presence and the prior note was delivered to Manion who destroyed it immediately after Ben Elmore left with the new note. This note was “Due five years from date. Borrower to pay $2,000.00 per year on principal, with privilege to pay all or any part any interest paying date. Interest payable annually * * * Sometime later, probably two or three weeks, Ben Elmore sent Lettie with the note to Mr. Manion’s office to secure the signature of Mrs. Manion. Mr. Manion sent Lettie to his home with the note and his wife, Ruby Manion, then signed the note. This was the first time that Mrs. Manion had signed any of these notes.

When this note was made out, Ben El-more told Manion that he wanted Lettie to have the money for the upkeep of the apartment house. Manion testified that the upkeep of the apartment house was his (Ben Elmore’s) main thought.

After this was done, Ben stated to various witnesses that he had shown the note to Lettie and would like for her to have it but he was afraid she might misplace or destroy the note and he would keep the note himself. He stated that with Mrs. Manion’s signature, it was the best note in town and better than any they had at the bank. He stated that he had the house willed to Lettie for her lifetime and that he had left the note to Lettie. One witness testified that Ben told him the note was payable to Lettie. This witness also testified that Ben stated that he wanted the interest on the note as long as he lived. In the past, Manion had desired to pay off the debt but Ben Elmore would not let him do that, stating that he wanted the interest, not the principal.

After Ben Elmore went to the hospital for what turned out to be his last illness, a nephew, Charles F. Elmore, who became his administrator, was given a power of attorney to handle his business affairs. At this time, his sister-in-law and another nephew went to his apartment and unlocked his desk. In this desk they found a cigar box in which was a bundle of notes, including the Manion note here in question. These were taken from the desk to the bank where Charles Elmore placed them in a safety deposit box. Lettie Horton never made any claim to or demand for this note until her petition was filed in probate court January 12, 1966.

The manner in which this note is made payable, i. e. to “Ben Elmore or Lettie Horton as tenants by the entirety”, creates an ambiguity. In such circumstances, we must determine the intention of the parties from the instrument itself and from all of the surrounding circumstances. See Creek v. Union National Bank in Kansas City, Mo., 266 S.W.2d 737, and Mercantile-Commerce Bank & Trust Co. v. Kieselhorst Co., 350 Mo. 30, 164 S.W.2d 342. It is obvious that since Ben Elmore and Lettie Horton were not husband and wife, they could not hold title to this instrument as tenants by the entirety. Plaintiff contends that under all of the evidence, this court should determine that they held title as joint tenants with right of survivorship. He places most emphasis on the incident of survivorship. The use of the word “or” instead of the word “and” between the names of the two payees militates against a finding of joint tenancy. The word “or” means either one or the other; it does not mean both. See Jenkins v. Meyer, Mo., 380 S.W.2d 315; Longacre v. Knowles, Mo., 333 S.W.2d 67; and Hemphill v. Jackson, Mo.App., 306 S.W.2d 610. One aspect of a joint tenancy is that both parties presently have an ownership interest in the property held. Each one has a present interest in the property, it is not one or the other, it is both. This concept is directly contrary to the use of the word “or” in describing the payees of the note in question.

The use of the words “as tenants by the entirety” in relation to two people who are not husband and wife, is so incongruous to those who are cognizant of the true legal meaning of this phrase as to create confusion and to convey no definite intention. It may be evidence of an intention to create a joint tenancy with right of survivorship, see State ex rel. Ashauer v. Hostetter, 344 Mo. 665, 127 S.W.2d 697, and if the evidence of the surrounding circumstances is sufficient, the court on the basis of such evidence may determine that a conveyance to two people who are not husband and wife “as tenants by the entirety” may create a joint tenancy with right of survivorship. See Creek v. Union National Bank in Kansas City, Mo., 266 S.W.2d 737. However, standing alone, these words do not create a joint tenancy with right of survivorship. They only direct the attention of the court to the •evidence of the surrounding circumstances in an attempt to determine the intention of the parties.

We have no statute to create a presumption in this matter, such as is true as to bank accounts, savings and loan association accounts and real estate (see Sections 362.470, 369.150 and 442.450, RSMo 1959, V.A.M.S.). Therefore, we are left exclusively to the evidence adduced from which we must determine the intention of the parties. As was said in Longacre v. Knowles, 333 S.W.2d 67, l. c. 70, where the instrument is ambiguous as to the nature of the interest created, the courts will not, absent a showing of intent, construe it to create a joint tenancy.

In our review of this court tried case, we review the case upon both the law and evidence as in suits of an equitable nature. However, we are not authorized to set aside the judgment of the trial court unless it is clearly erroneous, and in reaching our conclusion we must give due regard to the opportunity of the trial court to judge of the credibility of the witnesses, Civil Rule 73.01, V.A.M.R. In the case at bar, the trial court found the issues for the defendant and that the note in question was the property of the estate of Ben Elmore and that Lettie Horton, and after her death her administrator, did not own the note. The evidence shows that Ben and Lettie had been sweethearts for over 30 years. His family did not approve of this relationship but it continued to exist. Ben provided Lettie with a rent-free apartment in his apartment house; they were frequently seen together, and she ran errands for him and did his legwork. There is no evidence of any cohabitation or as to the other details of their relationship. Ben often and repeatedly expressed the intention of taking care of Lettie and he stated his intentions to (and apparently he did) will her this apartment house for life. He also stated that he intended to leave her the note for the upkeep of the apartment house. Although Lettie knew about the note and had it in her physical possession when she took it to secure the signature of Mrs. Manion, the note was not left with Lettie but possession remained in Ben. It was found in his locked desk along with other notes which belonged only to Ben when he became incapacitated and his attorney in fact began to handle his affairs. There is no evidence that Lettie ever made any claim to ownership of this note for over 8 months after Ben’s death. No interest on this note was due until after Ben’s death but it was due in July of 1965 prior to the petition filed by Lettie in probate court on January 12, 1966. No interest was demanded or paid. Interest on prior notes, including the one which this note replaced and which was made payable in the same language as the note in question, was paid to Ben.

From all of this, we believe that the trial court could conclude that Ben intended to take care of Lettie during his lifetime and to provide for her after his death and that in willing her a life estate in the apartment house, together with leaving her the note for the upkeep of the apartment house, it was his intention to provide for her care after his death and that as to the note in issue, his intention was to make a testamentary disposition and not a gift effective on the date of the note. Such testamentary disposition can not be made in this manner because is does not comply with the statute of wills, Section 474.320, RSMo 1959, V.A.M.S. See Jenkins v. Meyer, Mo., 380 S.W.2d 315, and Longacre v. Knowles, Mo., 333 S.W.2d 67. This intention is not inconsistent with his use of the words “or” and “as tenants by the entirety”. “Or” is incompatible with a present joint interest. It is obvious that Ben Elmore did not understand the words “as tenants by the entirety”. However, it is not inconceivable that he believed that these words would pass the note to Lettie on his death and that he used such words for this purpose and not for the purpose of creating a present joint interest.

There is no real conflict in the testimony in this case; however, this does not exclude the issue of credibility as to which we must defer to the trial court. We do so. After careful study, we have concluded, on the basis of the foregoing analysis, that we cannot find that the ruling of the trial court is clearly erroneous. We therefore affirm the judgment.

All concur.


author: L. F. COTTEY, Special Judge.

text:
    Louise Dudley Leonard SWIFT, Respondent, v. Donald Lee LEONARD, Appellant.
    No. 24681.
    Kansas City Court of Appeals. Missouri.
    Oct. 2, 1967.

      Don Chapman, Jr., Chapman & Chapman, Chillicothe, for appellant.
    Robert F. Devoy, Brookfield, for respondent.
   L. F. COTTEY, Special Judge.

Respondent obtained a divorce from appellant in 1965 with custody of their three children (aged three, two and one at the time) and an allowance of $100 per month for their maintenance; but with no award of alimony. The decree makes no mention of any property settlement contract between the parties. There was such a contract, however, made and filed on the day of the divorce, and its construction and effect are at issue in the litigation now before us.

The contract recited that its provisions should “operate as a settlement in lieu of and in full payment of any permanent alimony” in the event “the parties become legally divorced.” It provided, “The husband agrees to convey the home located at 426 Peck Street, Brookfield, Missouri, to the wife,” and “shall pay * * * the note signed by the parties and secured by a deed of trust” on the property. This was the home in which the parties resided. It was owned by them as tenants by the entirety. During the marriage they had mortgaged it, and at the date of the divorce a balance remained owing on the note, payable in monthly installments of $58.85 each. Promptly after the divorce appellant conveyed the home to respondent, as agreed, and shortly thereafter she remarried and moved her new husband into it. Since the divorce appellant has made no payment on the mortgage debt.

Against that background, some eight months after the divorce, respondent filed a motion in the case which she labeled, “Motion for Modification and Alteration of Judgment for Child Support.” If that was indeed its guileless purpose, it approached the problem with unnecessary stealth. It barely mentioned the children. It made no reference to the decretal provisions for their custody and maintenance. It said not a word about their condition, or about their needs or the ability of appellant to supply them. Instead, after a general reference to the parties5 “separation agreement”— under which respondent acquired “the house at 426 Peck Street,” identified as “the actual residence of this plaintiff and the minor children” — it particularized on that provision whereby appellant undertook to retire the mortgage on the place. It fixed the principal balance of the debt at $5,258.-60, “payable in monthly installments of $58.85 each,” and recited that appellant “has failed and refused to make any payments on said note.” It then averred, “That further security for the payment of the aforesaid note is now proper and necessary to give assurance that said minor children will be provided and maintained with shelter.” That is the only statement in the motion that could be said to refer to the interests of the children in any way. And, as will presently appear, “security” for the payment of the debt was in fact neither sought nor obtained. The prayer of the motion was: “WHEREFORE, Plaintiff prays the court to make and enter its order altering and modifying its judgment and decree of divorce * * * by adding to said judgment and decree its order that defendant shall pay to the plaintiff the sum of $58.85 per month until such time as the principal sum and interest thereon is paid in full.” Appellant’s motion to dismiss for failure to state a claim on which relief could be granted was overruled, and the case came on for hearing.

The proof was as barren as the pleading. Respondent identified a copy of the parties’ contract relating to the home in which the children were still living, admitted that appellant had never been delinquent in his payments of $100 per month for their support, but complained that he had defaulted in the payment of the mortgage debt and that, in consequence, she had been obliged to refinance the loan to the extent of $412 to keep the property “from going back to the Bank.” Only this, and nothing more. There was no mention of the children save to identify them by name, age and place of residence. There was no hint of any change in their condition or needs. And the only evidence of appellant’s financial condition was that it had gone from bad to worse since the divorce. He had lost the upholstery business which he owned at the time of the divorce, had taken bankruptcy listing debts in excess of $15,000, had remarried, and was currently employed at a wage of $40 per week.

On the basis of that showing, the trial court entered an order increasing appellant’s monthly payments of child support by the magic figure of $58.85 per month. The amendment does not pretend to be concerned with “security” for the payment of the mortgage debt. No reference is made to that debt. No requirement is imposed on respondent to retire it, nor is appellant relieved of his contractual obligation to pay it, nor is its status affected in any other way. The order simply creates a new and additional and indefinitely continuing obligation for appellant to pay, under the pretext of providing for the necessities of the children and without any showing as to what their necessities are. At the same time, appellant’s motion for a reduction in the original award, based on proper allegation and undisputed proof of his own worsened financial condition, was denied. He appeals from both orders.

To obtain relief on motions of this kind it is incumbent on the movant to prove, and hence to plead, “new facts and a change of circumstances which create a situation not existing at the time of the original decree and therefore not subject to the court’s consideration at that time.” Roberts v. Roberts, Mo.App., 292 S.W.2d 596, 597-598. Such a motion “must state a claim upon which relief may be granted and must be based upon new facts, conditions and circumstances arising or coming into existence since the rendition of the prior decree.” Prudot v. Stevens, Mo.App., 266 S.W.2d 756, 758. “The relief which is asked is not that the decree be enforced as written, but that it be modified to meet the new conditions.” Samland v. Samland, Mo.App., 277 S.W.2d 880, 881. Used with reference to child maintenance awards, the term “new conditions” means either a change in the needs of the child, Long v. Long, Mo.App., 357 S.W.2d 243, 246, or in the ability of the father to supply them, Luplau v. Luplau, Mo.App., 117 S.W.2d 366, 367, or both, Bachler v. Bachler, Mo.App., 339 S.W.2d 846, 851. If the decree, “including the allowance for the support of the child,” has become final, and if for the purpose “any definite and specific amount has been awarded,” then “no court thereafter (has) power to modify that allowance save upon showing * * * changed conditions.” Read together, Luplau v. Luplau, supra, 117 S.W.2d 367, and Goldstein v. Goldstein, 237 Mo.App. 274, 165 S.W.2d 876, 879. The amended award in this case is not to be sanctioned on the basis of those authorities. It lacks both the pleading to authorize it and the proof to sustain it.

In this court, respondent argues that her husband’s contractual obligation to convey the home to her and retire the mortgage on it was not one for her benefit, or at least not exclusively so, but that it was intended by the parties, and somehow merged in the divorce decree, as a provision for the maintenance of the children, even though they were nowhere mentioned in connection with it and despite the fact the only consideration for it was her surrender of her right to alimony; hence, that it was susceptible of enforcement or amendment by the method she has pursued and in the manner the court has directed, upon no other proof than that the debt remains unpaid. It needs some imagination to put together a proposition like that out of the facts in the record before us; and more to sustain it. Cited in support of it, however, and fervidly argued as sustaining it in every particular, are Poolman v. Poolman, 8 Cir., 289 F.2d 332, and Henson v. Henson, Mo.App., 366 S.W.2d 1, which follows the lead of the Poolman case.

In both those cases, in contemplation of divorce, the husband had entered into a contract with his wife whereby he undertook to convey the family home to her and retire the encumbrance on it; and then had taken bankruptcy in an effort to relieve himself of that obligation. (The Poolman contract recited that it was in settlement of “all right of support and maintenance” of the wife, whereas the Henson contract contained no such provision and the wife had actually been awarded alimony; the distinction is not without significance, but there is no need to develop it here.) Afterwards, by an independent action in each instance, the wife sued the husband for the amount of his defaulted payments on the mortgage debt, and the issue in each case was whether his discharge in bankruptcy precluded her recovery. Held, in both cases, No. In each, the court cited Sec. 35 of the Bankruptcy Act which bars the discharge of any obligation for “maintenance or support of wife or child” (emphasis supplied), and held that the husband’s contract “evidenced a liability” for that type of obligation. We have no quarrel with that holding. The benevolence of the result inspires a reciprocal charity in analyzing it.

Enough has been said of those cases, and of the issue common to both, to relieve them of responsibility for controlling the outcome of this — except for one curious and incidental detail, to which respondent attributes the utmost importance. The quoted excerpt from the Bankruptcy Act used the words, “maintenance or support of wife or child.” The court in each case got around to saying, however, that the husband’s contract created an obligation for the wife and child. There’s the rub. To that casual substitution of conjunctions, “and” for “or,” respondent anchors her whole proposition. She insists it authorized the trial court, obviously at her option, to treat appellant’s contractual obligation in this case as one for the maintenance of the children, and to amend it summarily. Now it is one thing to construe the husband’s obligation under contracts of this kind as a provision for the future “support” of his wife, with whom the contract is made, to whom the property is conveyed without any restraint on its alienation or any condition requiring her to maintain it as a home for the children, and who, in consideration of it, surrenders her right to future support from him in any other form; such an interpretation has at least the merit of affording, by judicial construction, the same protection to the right she acquired as the Bankruptcy Act, by express provision, affords to the right she surrendered. But it is another thing entirely to construe the obligation as one for the maintenance of the children, who were not mentioned as beneficiaries of the conveyance, either in the contract or in the decree or in the deed itself, and who, having consequently acquired no legally recognizable interest in the property, could assert no legally enforceable right to have it cleared of encumbrance. We suspect that necessity was the mother (or at least the godmother) of the inventions in the Poolman case, whereby the same protection was extended to the wife’s contractual claim as the Act reserves for the right she expressly bargained away in exchange for it. But the children’s right to maintenance cannot be bartered away by the contract of the adult parties, Jenks v. Jenks, Mo.App., 385 S.W.2d 370, 377; hence no necessity for straining plain English in order to relieve them from the effects of a similarly improvident bargain can ever arise, because the contract would be a nullity to begin with. In any event, the use of “and” for “or” in both cases was unnecessary to the decision in either, and, for the reasons stated, we reject the implication respondent accords to it.

That brings us to the trial court’s denial of appellant’s motion for a reduction in the child maintenance award. In this connection, we disregard his assumption of obligations incident to his remarriage. Kleine v. Kleine, Mo.App., 111 S.W.2d 242, 244; Hargus v. Hargus, Mo.App., 222 S.W.2d 964, 966. His otherwise distressed financial condition, however, is a pointed and poignant argument on his behalf. The children reside in the home owned by their mother and occupied by her and her new husband, whose duty it is to maintain it for her comfort and shelter in any event. The proportion of that expense attributable to the presence of the children in the home cannot realistically be fixed at anything like three-fifths of the total. Added to that is the fact that they live in a rural community where $100 a month goes a good deal farther toward providing for their needs than it would in a metropolitan area. No elevated social position is to be maintained, no health problems are present, no school expense is involved. All this we have considered. We have even reflected, evanescently, on the possibility that the legislature and the courts may someday awaken to the fact that the concept of a relatively affluent wife disclaiming all financial responsibility for the support of her children, and shouldering off the whole burden of it on her husband, is an anachronism in present day society, and has been for two or three generations. Nevertheless, under the circumstances, we cannot say that the court abused its discretion in refusing to reduce the original award of $100 per month.

Respondent’s motion to dismiss this appeal, for appellant’s failure to comply with Civil Rule 83.05(b) and (c), V.A.M.R., is overruled. Ilis compliance with the Rule is indeed sketchy and inept; but not so inexcusably so as to deserve the maximum penalty.

The trial court’s order sustaining respondent’s motion to increase the award of child maintenance is reversed; the order denying appellant’s motion to reduce it is sustained.

All concur.


author: MAUGHMER, Commissioner.

text:
    Don JOHNSON, Appellant, v. W. O. MEDLOCK and Arvil Satterfield, d/b/a Mulberry Lumber Co., and W. D. McDowell, Respondents.
    No. 24672.
    Kansas City Court of Appeals. Missouri.
    Oct. 2, 1967.

      Robert C. Frith, Chillicothe, for appellant.
    Morris A. Shenker and R. J. Slater, St. Louis, for W. O. Medlock and Arvil Satterfield, d/b/a Mulberry Lumber Co.
   MAUGHMER, Commissioner.

Workmen’s Compensation case. The claimant, Don Johnson, was a log sawyer. While at work a tree limb fell on him. He suffered a broken back and other injuries. His claim for workmen’s compensation was filed against W. D. McDowell and against the respondents, W. O. Medlock and Arvil Satterfield, d/b/a Mulberry Lumber Company. There is no insurer liability coverage. After a hearing, the referee entered an award in the total sum of $10,099.55 against all three defendants. Mr. W. D. McDowell filed no application for review by the commission. The award and judgment as to him has become final and he is no longer an actual participant in this litigation. Mr. Medlock and Mr. Satterfield, d/b/a Mulberry Lumber Company, did apply for a review. The Industrial Commission in a 2-1 decision affirmed the award of the referee. An appeal to the circuit court resulted in a reversal. It is the appeal from that judgment which is before us.

It is claimant’s contention that he was a statutory employee of Mulberry. The only question presented is on the issue of liability. The scope of appellate review in a workmen’s compensation appeal is well stated in Long v. Mississippi Lime Co. of Missouri, Mo.App., 257 S.W.2d 167, 170. We quote from that opinion:

“An appellate court, in reviewing the evidence upon the basis of which the industrial commission made its award, must view the evidence in the light most favorable to the successful party below. Harper v. Home Imp. Co., Mo.Sup., 235 S.W.2d 558. Neither the circuit court nor the appellate court may substitute its judgment on the evidence for that of the commission. Both courts are authorized and bound to decide whether the commission reasonably could have made its findings and reached its result upon consideration of all of the evidence before it, i. e. whether the award made by the commission is supported by competent and substantial evidence upon the whole record, Constitution of 1945, Art. V, § 22, V.A.M.S. * * * and cases cited, and to set aside decisions clearly contrary to the overwhelming weight of the evidence”.

See also Liverman v. Wagner, Mo.App., 384 S.W.2d 107. However, we must also remember that plaintiff has the burden of proof to bring himself within the provisions of the Act. Shireman v. Rainen Home Furnishers, Inc., Mo.App., 402 S.W.2d 64, 67.

Section 83.05, V.A.M.R. requires (a) the statement of facts in appellant’s brief shall include specific page references to the transcript; (b) the points shall state what actions or rulings of the court are claimed to be erroneous and why the court was wrong. Setting out abstract statements of law without showing how they are related to any action or ruling of the court is not a compliance with this rule. Appellant’s statement of facts contain not a single page reference to the transcript. His points are three in number: (1) he says the Act covers Johnson whether he was an independent contractor or a subcontractor: (2) on appeal all reasonable inferences must be drawn in support of the commission’s finding and viewed in the light most favorable to its support: (3) McDowell and Mulberry, were engaged in a joint venture and Johnson was a statutory employee. The brief is not in compliance with the rule. However, we prefer to dispose of this appeal on the merits, rather than on the grounds of technical noncompliance.

The claimant, Don Johnson, lived near Chula, in Grundy County, Missouri. He said he had lived there “off and on all my life”. His father operated a saw mill in that area and at times claimant had worked for him although his occupation most of the time was cutting saw logs in the timber. A few months before the accident which occurred on May 25, 1964, he had been employed to cut saw logs by J. W. McDowell, originally a defendant in this lawsuit. At that time Mr. McDowell was sitting in a pickup truck which had the name “Mulberry Lumber Company” stamped on the side. Mr. Johnson said McDowell was hauling logs from north of Trenton to a saw mill in Chillicothe, Missouri. He said seven others besides himself were working on the Shull and Grossman land north of Trenton where he was hurt. Some of these “were driving trucks, some cutting, one operating the crawler”.

The claimant’s services were paid for by Mr. McDowell. He was paid 50 cents per hundred for cutting cottonwood (softwood) and 75 cents to 85 cents for cutting hardwood. It was his estimate that he earned about $100 per week. Immediately before the McDowell employment, claimant had been employed by Mr. Moore and Mr. Grise, doing the same kind of work, at the same pay and in the same general neighor-hood. None of these employers withheld any funds from his pay for income tax or for social security. In his work, Mr. Johnson used his own equipment, including chain saw, furnished the gas for its operation and made his own repairs. He never helped load the logs. He was paid with personal checks signed by Mr. McDowell. He selected his own hours for work — starting and quitting whenever he chose to do so. He was cutting hardwood (Elm) when he was injured. The evidence just recounted is, we believe, a fair summarization of plaintiff’s testimony.

Mary A. Jensen was called as a witness by claimant. She owned an acreage near Chula. On February 4, 1964, Mrs. Jensen and her husband leased a two acre tract therefrom to be used as a “saw mill and mill yard” for a monthly rental of $35. The written lease covering this transaction was signed by the Jensens and “J. W. McDowell”. In the body of the agreement the lessee is described as “J. W. McDowell, representing Mulberry Lumber Company of Mulberry, Arkansas”. Mrs. Jensen stated without objection that McDowell told her “he was leasing for the Mulberry Lumber Company, but it would be his saw mill, his personal saw mill” and he would operate it for the Mulberry Lumber Company.

Mr. Arthur Wilson is a real estate broker, living in Chillicothe, Missouri. He was the agent and writer of a timber sale contract made by E. G. Grossman and Jay Shull to J. W. McDowell. A copy of the sales contract is in evidence except the signatures which were apparently not decipherable by the court reporter. The body of the instrument recites that the agreement is between Grossman and Shull, parties of the first part, and “J. W. McDowell, party of the second part”. The contract also recites receipt of $1900 “in the form of a check drawn by Mulberry Lumber Company”. Mr. Wilson’s dealings in this matter were all with Mr. McDowell — none with Mulberry.

Mr. W. O. Medlock, one of the defendants, was called as a witness by claimant. He testified that in May, 1964, the Mulberry Lumber Company was a partnership, and that he and the defendant Arvil Satter-field were the partners. He said their one place of business was in Mulberry, Arkansas; that they employed about 50 persons there and owned five trucks and trailers. They leased a Chevrolet pickup, an International two-ton tractor and a John Deere crawler to J. W. McDowell, located in Livingston County, Missouri. He stated that McDowell never had been their employee, but that they financed him and others in their efforts to procure softwood lumber. He denied ever authorizing McDowell to act for Mulberry or use the name “Mulberry Lumber Company”. He said McDowell was to use the equipment to “log the timber to a saw mill which Ray Cunningham was operating out here on Highway 65” near Chillicothe. Mr. Med-lock said Cunningham ' kept the lumber until it was dry and the cottonwood was then loaded on Mulberry trucks and Cunningham was paid $60 per thousand feet for it. Cunningham sold the hardwood lumber to other purchasers. The witness admitted advancing a check for $1900 to McDowell for the purchase of a tract of timber. Mr. Medlock denied that Mulberry ever bought any logs in Missouri— only lumber. He said also that they bought only cottonwood lumber in Missouri. He said it was their practice to advance money as they did to McDowell and Cunningham and secure reimbursement in the form of lumber.

Edward D. Posey leased a tract to Ray Cunningham for operation of a saw mill. A short time later the mill was moved. A Mulberry truck came for the last of the lumber. Mr. Posey claimed four months’ rent was due and would not let the driver have the lumber unless and until the rent was paid. Mr. Posey said the driver called Mulberry and then gave Mr. Posey a check for the rent and moved the lumber.

Mr. W. O. Medlock also testified as a witness for defendants. He said they never bought hardwood lumber in Missouri because the price and the long heavy haul made it too expensive. It appears affirmatively and is uncontradicted that Mulberry is a manufacturing company and buys only finished lumber. There is no evidence that McDowell had any authority to act for Mulberry unless it be deduced from the fact that the Mulberry name was on one of the trucks he was using or from the fact that Mulberry advanced funds to him. Mulberry never bought any logs or lumber from McDowell, but rather from the Chillicothe Lumber Company (Cunningham), where McDowell’s production was sold and delivered. Section 287.040(1), V.A.M.S. provides:

“Any person who has work done under contract on or about his premises which is an operation of the usual business which he there carries on shall be deemed an employer and shall be liable under this chapter to such contractor, his subcontractors, and their employees, when injured or killed on or about the premises of the employer while doing work which is in the usual course of his business”.

This court in Shireman v. Rainen Home Furnishers, Inc., supra, 402 S.W.2d at page 68, listed the essential requirements for a statutory employee-employer relationship to come into being:

“Under this statute our courts have repeatedly held that three elements must be present before one can be held to be a statutory employee. The evidence must show (1) that the work was performed under a contract, (2) that the injury occurred on or about the premises of the employer, and (3) that the injury must have occurred while the employee was doing work in the usual course of employer’s business”.

In Baker v. Iowa-Missouri Walnut Log Co., Mo.App., 270 S.W.2d 73, 75, 76, 77, claimant was cutting logs in the timber when he was injured. The commission found for the employee, the circuit court reversed, but this court affirmed the commission award. In that case the alleged statutory employer was a log company engaged in the business of buying walnut logs, fabricating walnut timber and manufacturing gun stocks. Eldon Baker for and on behalf of the company, located walnut trees and purchased same for the company. He employed Earl Baker, the claimant, to process these trees into logs and stumps and to deliver them in company trucks directly to the log company for shipment by rail or truck. Earl Baker was Eldon Baker’s employee, and was injured while cutting walnut logs on a tract containing walnut timber which had been purchased by Eldon Baker for the log company. We quote excerpts from the opinion which indicates the court’s reasoning in ruling that the elements of a statutory employee relationship existed.

“The evidence clearly supports the conclusion that the Log Company owned these trees and the logs and stumps which were produced therefrom; that Eldon Baker did not own the trees, logs or stumps, and was not selling them to the Log Company; and therefore the relationship of vendor and vendee did not exist.
⅝ ⅜ ⅜ ⅜ ⅝ ⅜
“Under Section 287.040, subd. 1, if Eldon Baker was doing work for the Log Company, under contract, on or about the premises of the Log Company, and in an operation of the usual business which the Log Company was there carrying on, then the Log Company would be liable to Earl Baker, because the statute specifically provides that such person (Log Company) shall be liable to the ‘contractor, his subcontractors, and their employees, * * * ’.
“In Sargent v. Clements, 337 Mo. 1127, 88 S.W.2d 174, 178, and State ex rel. Potashnick v. Fullbright, 350 Mo. 858, 169 S.W.2d 59, 61, the court construed the word ‘premises’ as follows: ‘that “premises” as there used contemplates any place, under the exclusive control of the employer, where the employer’s usual business is being carried on or conducted, * * * >
⅜ ⅜ ⅜ ⅜ ⅜ ⅜
“In the Potashnick case, the court held that, in order for the premises to be under the exclusive control of the employer, the premises must be such that the public does not have an equal right to use them along with the independent contractor or his employees. In distinguishing other cases the court said, 350 Mo. 858, 169 S.W.2d 62: ‘In other cases cited, the principal employer, sought to be held, did have exclusive control of the premises, where the independent contractor was working, by lease or other arrangement with the owner of lands not being used for any public purpose; and he was not an invitee only * * * ’.
* * * * * *
“In defining the phrase ‘ “premises of the employer” the court said (Crabtree v. Ramsey), [Mo.App.,] 115 S.W.2d [14] 16: ‘[I]t appears to us that in order for an injury to be considered as happening on the premises of the employer, it must have occurred on property owned, leased, or controlled by the employer, * * * ’

We have read the cases cited by appellant and those referred to by the referee. Those opinions are not in disagreement with the holdings herein referred to. It seems clear from the evidence produced in the instant case that: (1) claimant’s work cutting logs (including hardwood logs) was not done under contract with Mulberry. His employment agreement was with McDowell. He was paid by McDowell and his product went to Chillicothe Lumber Company. It would require pure speculation to find that McDowell was authorized to contract with claimant on behalf of Mulberry, and that, therefore, Mulberry should be ruled to be his employer; (2) we are unable to conclude from the evidence presented that the cutting of logs on the Shull-Grossman or any other tract north of Trenton was on Mulberry’s premises or on premises under the exclusive control of Mulberry either through lease or by any other arrangement. McDowell owned the logs and sold them to Cunningham, who in turn processed them into lumber, a part of which (cottonwood) was sold to Mulberry. The timber sales contracts were with McDowell. The saw mill or storage lot was leased by McDowell from Mr. and Mrs. Jensen. The fact that Mulberry advanced funds to McDowell only shows advancement of funds. It cannot be construed as amounting to substantial evidence of agency or of an employer-employee relationship existing between McDowell and Mulberry; (3) Was the cutting of both hardwood and cottonwood logs by claimant “an operation of usual business which he (employer-Mulberry) there carries on” P The evidence affirmatively shows that Mulberry bought only lumber —not logs — bought only cottonwood and no hardwood. McDowell sold the logs not to Mulberry, but to others and Mulberry bought the finished and dried lumber product from those others mostly if not entirely from Mr. Cunningham.

We conclude that there was no substantial evidence adduced from which the commission could properly rule that claimant was a statutory employee of Mulberry. We believe, therefore, that the trial court was right when it overturned the finding of the commission.

The order and judgment of the trial court reversing the award of the Industrial Commission and remanding the cause to the Commission with directions to enter judgment for respondents, W. O. Medlock and Arvil Satterfield, d/b/a Mulberry Lumber Company, are affirmed.

SPERRY, C., concurs.

PER CURIAM:

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

All concur.


text:
    KANSAS CITY, Missouri, Respondent, v. LUZIER, INCORPORATED, Appellant.
    No. 24656.
    Kansas City Court of Appeals. Missouri.
    Oct. 2, 1967.
    Herbert C. Hoffman, City Counselor, Maurice E. Benson and George L. De-Bitetto, Asst. City Counselors, Kansas City, for appellant.
    Alvin D. Shapiro, Stinson, Mag, Thomson, McEvers & Fizzell, Kansas City, for respondent.
   HOWARD, Presiding Judge.

This is a suit brought by respondent city for additional license taxes, together with penalties, for the years 1957 to 1961, inclusive. The trial court gave judgment for the city for additional license taxes for the five years in the total amount of $5,836.30, but did not allow any penalty. Appellant has duly appealed to this court and we shall refer to the parties as they appeared below.

The case was submitted to the trial court, sitting without a jury, on a stipulation dictated into the record by the attorneys for the respective parties, together with certain documentary evidence introduced as exhibits. From this it appears that the defendant taxpayer is a manufacturer of cosmetics, with its place of business in Kansas City, Missouri. Its products are sold throughout the United States by door to door sales people referred to as “cosmetic consultants”. There are approximately 13,000 of these consultants. By the contract between defendant and the individual consultants, the consultants agree “to solicit orders for such [defendant’s] product from retail customers or consumers only, at list prices established by Luzier * * * This contract provides that the consultants are independent contractors and not employees of Luzier, and that Luzier will allow the consultants “to retain a commission of 33]/3% from retail customer prices on each order” sold by the consultant. On C.O.D. orders the consultant is required to collect from the customer an amount of money not less than his commission; when the order is. filled by Luzier it is either shipped directly to the customer, or to the consultant for delivery to the customer, and the balance of the price is remitted to Luzier at that time. The 33½% commission is not forwarded to Luzier but is retained by the consultant and Luzier is not obligated to pay anything to the consultant and does not do so.

Luzier contracted with the federal government for the years in question to pay the federal excise tax on behalf of the retail consultants on all sales of their products. Luzier also, during the years in question, undertook to and did pay to the various states in which the products were sold, on behalf of its consultants, the applicable sales or use tax on the retail price of the product sold. Its federal and state income tax returns for the years in question showed gross receipts in the amount of the total retail sales prices. The commissions retained by the consultants were, on these returns, deducted as part of the costs of doing business. Its profit and loss statement showed “sales (Net) Retail” in the amount of total retail sale prices for its product during the period. From this was deducted field commissions to arrive at its figure for “Wholesale sales”. From this figure for “Wholesale sales” were deducted its expenses to arrive at its profit or loss before taxes.

This controversy concerns solely and only the question of whether or not the commissions retained by the consultants should be included by Luzier as part of its “annual gross receipts” for the purpose of computing its manufacturer’s license tax due to the City.

The trial court concluded that such commissions were includable and on this conclusion based its judgment. The findings of fact and conclusions of law were, in pertinent part, as follows:

“FINDINGS OF FACT
The Court finds as matters of fact:
1. That the term ‘gross receipts’ is a broad term and the commissions in questions are included therein although defendant never receives physical control thereof.
2. That the defendant has constructive control of the commissions in question.
3. That the sales persons may be independent contractors but defendant dictates the terms to the sales persons on how moneys, including commissions, are to be handled and thereby the defendant has constructive receipt of such commissions.”
“CONCLUSIONS OF LAW
The Court concludes as a matter of law:
1. That the sales commissions in question are a part of defendant’s gross receipts and should be included in the amount due by defendant for its occupation licenses for the years 1957, 1958, 1959, 1960, and 1961.
2. That no penalties should be assessed against the defendant.”

The occupation license tax here in question arises under the provisions of Chapter 30 of the 1956 Revised Ordinances of Kansas City (and prior ordinances containing provisions which are identical for our purposes). Section 30.060 (all references to ordinances refer to the 1956 Revised Ordinances of Kansas City, Missouri, unless otherwise specified) provides that all occupation license taxes shall be annual licenses issued for a calendar year (with exceptions not here pertinent). Section 30.260 provides:

“Sec. 30.260. Businesses, etc., for zvhich license required. — Every corporation, company, association, joint stock company or association, partnership and person, their lessees, trustees or receivers appointed by any court whatsoever, engaged in any business, occupation, pursuit, profession or trade, or in the keeping or maintaining of any institution, establishment, article, utility or commodity, in this article and chapter specified shall procure and pay for a license therefor from the city, and such license fees shall be in the respective amount set out in this article and chapter, except as otherwise provided in this revision or other ordinance. (Ord. 17604, 4-2-54.)”

Section 30.1680 sets the tax rate for manufacturers at “Eighty-five cents per $1,000 of annual gross receipts; minimum per year . . . $15.00.”

Section 30.2830 provides:

“Sec. 30.2830. Computation of fee. The term ‘eighty-five cents (850) per $1,000/ or similar terms, as used in any section of this chapter, shall be construed to mean that the license fee or tax therein referred to shall be so computed upon the amount of the ‘gross annual business’ or ‘annual gross receipts’ of the business, trade, profession or occupation therein referred to, and the total of such computation shall constitute the amount of the license fee or tax per year * *

Section 30.2850 provides:

“Section 30.2850. Meaning of ‘annual gross receipts.’ For the purpose of this chapter, the words ‘annual gross receipts’ shall be taken to mean twelve times the average monthly gross receipts for the time during which any business in question shall have been conducted, or for the period of one year next preceding the date upon which the required license becomes due, * *

Thus our question is whether or not the commissions retained by the consultants come within the term “annual gross receipts” as used in these ordinances. There is no dispute that this money never, in fact, comes to Luzier. The consultants have a right to, and do, retain this 33½% of the retail sale price. Under the contract Luzier has no claim on this money. They cannot spend it, or borrow against it, or in any other way exercise dominion over it.

We are asked to hold that these commissions constitute “gross receipts” when they are never “received” by Luzier within the normal meaning of the word “received”. The word “receipt” has many meanings and its various meanings are normally governed by the context in which the word is used. 75 C.J.S. Receipt, p. 642, says of this word as follows: “Frequently the word is employed in the plural, as in the term ‘gross receipts,’ and when so used it signifies that which is received; that which comes in, in distinction from what is expended, paid out, sent away, and the like. When used in a commercial sense, ‘receipts’ is commonly understood to mean the taking in or receiving obligations or promises to pay, whether written or verbal, as well as cash.” In 38 C.J.S. Gross, page 1082, it is said concerning “gross receipts” : “Gross receipts. Ordinarily, the gross amount of cash received; but its construction and meaning depend on the context and the subject matter, and accordingly it may be construed to mean actual cash collected on particular obligations, together with moneys in hand due the obligors and credited on such indebtedness; the entire receipts without any deduction; ‘gross sales’, including the gross amount collected and uncollected of all the sales.” Webster’s New International Dictionary, Second Edition, among other definitions for the word “receipt” states its meaning to be: “that which is received; that which comes in, in distinction from what is expended, paid out, sent away, and the like; — usually in pi.; as, the gross receipts”.

In Laclede Gas Co. v. City of St. Louis, 363 Mo. 842, 253 S.W.2d 832, our Supreme Court en banc had before it a question of whether certain moneys actually received by the gas company were within the term “gross receipts” as contained in a similar taxing ordinance of the City of St. Louis. In this case, Mississippi River Fuel Corporation supplied natural gas in bulk to Laclede Gas Co., which distributed it to its customers. Mississippi River Fuel Corp. was in extended litigation over lower rates ordered by the Federal Power Commission. If Mississippi River Fuel Corp. was successful in its litigation Laclede would be required to pay the old higher rate; on the other hand, if the Federal Power Commission was sustained by the courts, the gas company would be liable only for the new lower rate. It collected the difference between the old higher rate and the new lower rate from its customers and segregated this difference pending the outcome of the rate litigation. The final decision was that .the lower rate prevailed, and the gas company then proposed to refund these segregated moneys representing the difference in rates to the customers from whom they had collected it, pursuant to an order from the Missouri Public Service Commission. A declaratory judgment suit was filed by the gas company against the city to determine whether or not these amounts so collected and held, and now to be refunded, were to be included as part of “gross receipts” upon which taxes would be paid to the city.

In considering the term “gross receipts” our Supreme Court said: “The word ‘gross’ appearing in the term ‘gross receipts,’ as used in the ordinance, must have been and was there used as the direct antithesis of the word ‘net’. In its usual and ordinary meaning ‘gross receipts’ of a business is the whole and entire amount of the receipts without deduction. 18 Words and Phrases, Perm.Ed., page 697.” The court further said: “The word ‘receipts’ appearing in the term ‘gross receipts,’ as used in the ordinance, connotes the monies received and taken in by plaintiff from the sale of gas in the city, as distinguished from the monies paid out or expended. But does this ordinance impose a 5% tax upon, and must the tax due the city be measured by every dollar received by plaintiff, even though a portion of the dollars so received by plaintiff do not benefit plaintiff at all, and constitute no yardstick by which to measure the gross income from ‘selling or distributing gas for heating, lighting, power or refrigeration?’ That question must be answered in the negative.”

The court concluded that the moneys taken in, which went into segregated accounts during the rate litigation and are now to be refunded to the customers, would not form part of the gross receipts of the company for tax purposes under the ordinance, even though such money did come into the physical possession of the gas company. The court said: “Consideration of the instant question, therefore, does not compel the ruling that the instant tax must be measured by every dollar of gross receipts without regard to the circumstances under which received, and with no regard whatever to the taxpayer’s right to keep and use all of such gross receipts in its business. And this is particularly true because under this character of ordinance the portion of gross receipts clearly intended to be made subject to the tax must bear a relation to the privilege of doing business within the city and to the right of plaintiff to retain and use the money so received and to benefit therefrom.” Its ultimate conclusion was: “We therefore rule that, as used in Ordinance 41325, the term ‘gross receipts’ means only such receipts from the sale of gas in said city as the plaintiff was entitled to retain and use for the benefit of its business and out of which receipts it could pay and discharge the obligations of its business. The above noted segregated monies did not fall within the term ‘gross receipts’ as used in Ordinance No. 41325.”

On the basis of the foregoing, it would appear to us that the commissions here in issue, which never came into the possession of Luzier, i. e. were never received by Luzier, are not within the meaning of “annual gross receipts” as used in the Kansas-City ordinances. Luzier could not use any of these funds for its own benefit.

In its brief, the city attempts to equate the term “annual gross receipts” as used in, its ordinance, with the “gross retail sale price” charged and collected by the consultants selling Luzier products. The simple answer to this is that the city tax is not imposed on the retail sale, it is imposed on the privilege of doing business within the city. The tax is not imposed upon the thousands of consultants in the United States, but is imposed on Luzier,, who does business in the city. The ordinance does not measure this tax by the total retail sales price, but instead measures-the tax by the “annual gross receipts” of Luzier.

The city emphasizes that Luzier reports total retail sales price to the federal goverment when it pays the federal excise tax on behalf of the retail consultants. It, likewise, reports total retail sales price when it pays state sales or use taxes to the various states on behalf of the retail consultants. In each instance the tax there in question is imposed on the sale itself. In each instance, the individual consultant, who makes the sale at retail,' would be liable for reporting and paying such tax on his total retail sales. However, for reasons of expediency, Luzier makes those various payments on behalf of the many consultants, and such taxes cán be reported and paid only on the basis of total retail sales price, since it is the sale itself on which the tax is imposed and it is the retail sales price by which the amount of the tax is measured. Thus the fact that Luzier so reported its total retail sales price for those purposes has no real significance in determining the amount of “annual gross receipts” for the purpose of measuring Kansas City’s occupation license tax. Likewise, the fact that Luzier reports total retail sales in its state and federal income tax is of no significance because the commissions retained by the consultants are deducted as a cost of doing business and the tax is imposed on the net taxable income and not on the gross. The resulting tax would be the same whether it is retail sales, less a deduction for commissions retained, which are reported, or whether only the amount actually received by Luzier is reported, and no deductions claimed for the commissions retained by the consultants. On the other hand, the use of the two different figures for federal excise tax and for federal income tax reports and for state sales tax and state income tax reports, could only lead to unnecessary confusion when the two are compared.

Again, the fact that in its profit and loss statement Luzier shows the total retail sales price, less commissions, in arriving at its figure for wholesale sales, before deducting its expenses, instead of showing only the net figure for wholesale sales has no significance. The resulting profit or loss is the same in either instance.

In its brief the city argues that the consultants do not work for nothing; that they must be paid in some way; and that thus Luzier receives benefits from the monies retained by the consultants as commissions the same as they would if the total retail sale price was remitted to Luzier and Luzier then paid a commission of 331/3% to the consultants. It then argues that, because of this benefit and because Luzier fixes the amount of commission to be retained by the consultants and because Luzier suggests or fixes the retail sale price of its products, Luzier constructively receives the total retail sale price, although the commissions are in fact retained by the consultants and never actually received by Luzier. The city does not cite any authority supporting this argument (except the California case of Anders v. State Board of Equalization, 82 Cal.App.2d 88, 185 P.2d 883, where the opinion is based on a construction of the wording of the stipulation on which the case was submitted, and which is not persuasive) nor does it cite any ordinance provision which would authorize the inclusion of such monies in “annual gross receipts”. We can see no significant difference between the situation presented in the case at bar and the retail mark-up over wholesale price, which is kept by the retailer. In either case the retailer (here the consultant) has a right to and does keep his mark-up (here the 33}/3% commission) and the manufacturing supplier (here Luzier) only has: a right to and only receives its wholesale price. We are not persuaded that the fiction of constructive receipt or control is applicable to the case at bar. •

Section 30.210 of the ordinances of Kansas City requires the taxpayer to include in his license application “the true amount of annual gross receipts of his business”. We conclude that this requirement was complied with when Luzier reported as annual gross receipts all of the moneys that it actually received from the sale of its products by its consultants. The commissions which were retained by the consultants were never received by Luzier and did not constitute part of its gross receipts. It follows that Luzier has properly reported its gross receipts and paid all taxes due thereon. Therefore, the judgment below is reversed.

All concur.