author: BARRETT, Commissioner.

text:
    FIRST NATIONAL BANK OF WEST PLAINS, Missouri, (Plaintiff) Respondent, v. I. N. KING and Sarah Lee King, His Wife, (Defendants) Respondents, Harold E. Reed and Dorothy M. Reed, His Wife, (Defendants) Respondents, Buck Pennington and Evaleen J. Pennington, His Wife, (Defendants) Appellants.
    No. 49307.
    Supreme Court of Missouri, Division No. 2.
    Jan. 14, 1963.

      Richard D. Moore, Hogan & Hogan, Robert E. Hogan, West Plains, for appellants.
    Esco V. Kell, West Plains, for respondents I. N. and Sarah Lee King.
    Green & Green, H. D. Green, West Plains, for respondents, Harold and Dorothy M. Reed.
   BARRETT, Commissioner.

This proceeding, initiated as an action for a declaratory judgment as to the duties of an escrow agent and the rights of the parties under a real estate contract, has now become a suit to quiet the title to real estate, an action for money had and received by reason of unjust enrichment and a suit of a general equitable nature including an accounting and an adjustment of rights between the parties. It is necessary to a complete understanding of the issues upon this appeal therefore to detail the background in which the litigation originated.

Buck and Evaleen Pennington and Harold and Dorothy Reed came to West Plains from the State of California in December 1959. It is not known whether any of them had had any previous acquaintance with Howell County or any prior experience with farming in Southwest Missouri or elsewhere. Buck and Mrs. Reed are brother and sister. The Reeds have three children and the Penningtons two. Almost immediately upon their arrival and for undisclosed reasons they entered into a written contract with I. N. and Sarah King to purchase their 300 acre farm for the price of $15,000. The signed contract was deposited with the First National Bank of West Plains as escrow agent for all the parties and upon fulfillment of the agreement the bank was to deliver the deposited deed to the Penningtons and Reeds, conveying to each couple a one half interest by the entirety. Upon the signing of the contract the purchasers, contributing equal sums, paid the Kings $1,000 and on January 1, 1960, made an additional payment of $5,500 and went into possession of the farm. There was a secured loan from the Federal Land Bank on which there was a balance due of $3,031.35, payable $159.33 a year together with 4% interest. The purchasers assumed and agreed to pay that obligation. This left a balance due on the purchase price of $5,468.65 and this sum the purchasers agreed to pay to the Kings in annual installments of $540.67 together with 6% interest on the unpaid balance.

In addition to the Reeds’ and Penning-tons’ contract with the Kings there was also an agreement and certain transactions among themselves. While not clearly spelled out in terms, the basic idea appears to have been that they would jointly, perhaps even in a full partnership, pay the purchase price, jointly improve, jointly operate and equally share in the expense and ultimately jointly own the farm and equally share in its profits. To initially carry out these purposes and particularly to start farm operations it was agreed that the Reeds and Penningtons would contribute equal sums to be deposited in a joint bank account. When the time came, however, Buck Pennington had no money and could not immediately furnish his half of the cash. They “put in * * * $50.00 apiece for groceries” and by the time they got to the bank “that was the end of my money.” Nevertheless, Reed deposited, according to Buck, $600 in their joint names and $600 in his own account. Reed says that he deposited $1,000 in their joint account and $700 in his own account “which I later spent for things that weren’t to be itemized, or deductible in that way, like operations and things of that nature.” It was anticipated that the Penningtons would sell their property in Atascadero, California, at which time they would contribute their proportionate share to the bank account.

In any event, the Reeds and the Pen-ningtons all moved into the unimproved farmhouse. From the joint bank account, according to Buck, they spent about $600 for lumber, general repairs and modernization of the house. They bought one cow, ten pigs and two hundred chickens. They sold a neighbor standing timber for which they received $300, each of them took $50 and Buck bought groceries, he does not know what became of the other $200. But in less than thirty days the Reeds and Penningtons were unable to get along with one another, for some reason they avoided a recitation of “the particulars” of their disagreement, and Buck decided that he would rather live in California. He sold their furniture to the Kings’ son-in-law and on February 8, 1960, returned to California. The Reeds stayed on and during the year 1960 attempted with most indifferent success to operate the farm.

During the year 1960 there were no further payments due under the contract with the Kings, but in January 1961 total payments of $868 were to be paid the bank. Reed says that a week before these payments were due he called Pennington in California and Pennington said that he would be in Howell County in ten days and would “settle things.” Buck claims that all the while he and Reed were negotiating with one another to either buy or sell their respective interests in the farm. But Reed’s demand was for $5,500 which Buck thought was more than he had in the farm and so he “left it hanging there.” He says, however, that both King and Reed knew that he had made an agreement to sell to some “third party.” And a man did talk to Reed, but “I advised him I was in a lot of trouble” and “if he wanted to go into something like that, he’d be in the same water with me.” King says that it was a day or so after he had resold the farm to Reed that this man talked to him about buying Buck’s interest. In any event, Buck returned to West Plains on January 27, 1961. He did not see or communicate with the Reeds. He did talk to Mr. King and admittedly informed him that he had returned with the intention of making his half of the payment but after returning had changed his mind and “decided to let the whole thing go.” King’s version of the conversation was that Buck came in and wanted to know how “I’d like to have * * * his part of the farm back, and I told him I didn’t want it * * * and he said, ‘Well, I am going to turn it back to you, anyway. * * * I brought the money with me, but I had a change of heart. I am not going to pay it.’ ” And, King says, “he gave me a reason — he said he couldn’t make a living here in Missouri, and he couldn’t get nothing off of the place if he stayed here, and he was just going to turn it back to me and have no more to do with it and was washing his hands clean of it * * Buck’s interpretation of this particular episode was this: “Well, I was so disgusted with it, I didn’t want to keep putting money into it and not get anything back. When I got back here, it was about six below. I was cold and disgusted and I thought I’d just let it go.” The upshot was that Pennington returned to California without tendering any of the payments then due on the contract.

Definite dates and terms were not established, whatever documents, contract or deed, may have been executed were not offered in evidence. But King says that on February 18, 1961, he sold the property to the Reeds. A mutual release was executed and the Reeds executed and gave King a quitclaim deed, and, according to Harold Reed, the Kings entered into a new contract selling the property to the Reeds for the original price of $15,000; “Of course, with the down payment taken into consideration.” Some time after this transaction Harold Reed made a trip to California and it was then that Pennington learned that the Kings had resold the property to the Reeds. And on March 8, 1961, Pennington telegraphed $434.40 to the bank in West Plains, one half the sum due under the original contract in January. But the Kings’ lawyer had instructed the bank to not accept any payments from the Penningtons and when the case was tried in October 1961 the bank had the Western Union check.

In the face of these events the First National Bank, as an escrow agent with no personal interest in the outcome, instituted this action for a declaratory judgment as to its duty and “to adjudge and define the rights of the parties defendants in and to said real estate and their rights under said contract.” The first parties to respond to this pleading were the Kings and on April 3, 1961, they filed an “interplea.” In this pleading they admit several of the allegations set forth in the declaratory judgment petition. They admit the payment of $6,500 on the original contract but assert that no payments were made after 1959 (they must mean after January 1960) and that therefore the purchasers were in default. The Kings then purport to set forth in the inter-plea a “claim” against the Penningtons. In this phase of the pleading they state that the Reeds and Penningtons failed to make the payments due on January 1, 1961, and therefore were in default. They allege that the Penningtons informed them that they did not intend to make the payments and returned a “written declaration” to that effect as well as “the stock certificate of their interest in said land” and by this action it is said they are estopped to assert an interest in the land. In this connection the Kings also alleged that the Reeds had executed and delivered to them “their title and interest in said land.” Their prayer for relief was an adjudication that the contract of December 3, 1959, be forfeited and that “all interest and title conveyed by said contract is vested” in them.

On August 14, 1961, the Penningtons responded with an answer, a separate inter-plea and a counterclaim against the Kings in which in general the right to a forfeiture of the contract is denied. In the interplea the facts as they have been previously outlined in this opinion were set forth, including the tender of $434.40, the second purchase of the farm by the Reeds, the Reeds’ continuous possession of the farm, its leasing and the sale of crops and timber. The Penningtons’ prayer for relief was for a decree of specific performance of the contract by the Kings or in the alternative that they be required to “reimburse defendants * * * the sums said defendants have paid under the terms of said contract,” $3,693 plus the tendered $434.40. As against the Reedf the Penningtons asked for an accounting or rents, receipts and the sale of timber.

On August 23 the Reeds responded with an answer to all claims and a counterclaim against the Penningtons. In general the answer and counterclaim set forth the substance of the facts as they have thus far been narrated in this opinion. They allege, however, payments to which the Penning-tons have made no contribution including their original bank deposits of $1,700 and in addition they assert the Penningtons’ failure to carry out other agreements. They too allege the Kings’ forfeiture of the contract and their purchase from the Kings in which they “received no credit for any part of the Penningtons’ original payments.”' Aside from a request for the dismissal of Penningtons’ claim their prayer is for a declaration of the Penningtons’ default and consequently of a forfeiture and finally a decree that they “are now the sole owners of the real estate” subject only to their present indebtedness to the Kings.

The trial court found that for a valuable consideration the Reeds and the Penning-tons had voluntarily rescinded the original contract of purchase with the Kings. The court therefore required the Kings to return to the Penningtons their note and deed of trust (which, incidentally, was not introduced in evidence). The court directed the return of their $434.40 Western Union check. The court required the Penning-tons to endorse and deliver to the Reeds two insurance checks, $115 and $48.52, for windstorm damage to the barn. At the same time the Reeds were required to pay the Penningtons $250, one half the price of all timber sold during their joint ownership of the farm. The court denied Pen-ningtons’ counterclaim, found that they had voluntarily rescinded the contract and were therefore not entitled to specific performance. And finally the court found and decreed that the Reeds were the owners “in fee simple title of the lands.”

The Penningtons alone have prosecuted an appeal to this court. Their brief and argument is directed almost wholly to that part of the decree which denies to them any relief whatever against the Kings. It is only in this inferential manner that their appeal concerns the Reeds. They claim that the court erroneously found a repudiation of the contract and assert that their failure to timely make or tender the pay-merits due in January 1961 would not work a forfeiture. They claim that they were erroneously denied specific performance because the Kings had not offered to restore the status quo and had attempted to rescind the contract while retaining all its benefits. And finally it is claimed that it was “wholly unfair and completely inequitable to allow the vendor (s) (Kings) to retain the purchase price paid by appellants, after rescission, when the vendor (s) had no damage.” Against this claim the Kings urge that by word and deed the Penningtons rescinded the contract and consequently are not entitled to either specific performance or a return of their part of the purchase price. The Reeds have joined with the Kings in this phase of the appeal, of course, and claim an abandonment and release of the contract. In addition the Reeds “earnestly contend” that the court erroneously found them indebted to the Penningtons in the sum of $250 on account of sale of the timber.

It has been deemed necessary to thus recite these details of pleading and of fact to point up the uniqueness of the case and the problems distinguishing it from all other cases. As indicated, many important documents together with their dates and terms — such as the Reeds’ second contract of purchase — were not offered in evidence. However, the original contract of purchase, between the Kings as sellers and the Reeds and Penningtons as purchasers, was offered in evidence, it was of course the basis and subject of this suit. In addition to the terms previously noted, the contract of December 3, 1959, does not expressly provide for a forfeiture of the contract or of payments made under it 'for failure to make payments when due. Neither is it provided that time of payment is of the essence of the contract. Instead this contract provides that if the purchasers fail to make payments when due the bank is authorized to return the deed to the sellers and the purchasers “shall become the tenants of the First Parties” and the sellers shall have the right to repossession of the property upon giving thirty days’ notice in writing. Obviously this is not an express provision that upon the vendees’ default and breach of the contract the vendors may “retain as forfeited all money paid on the contract.” Annotation 31 A.L.R.2d 8, 34-38.

Nevertheless, in contracts in which there is no express provision for forfeiture, “a vendor not in default may in the event of default by the vendee, amounting to a total breach, elect not only to abandon performance on his part but also to retain as forfeited all money paid to him on the contract * * 31 A.L.R.2d, l. c. 96. Also, on the theory that a party to a contract may not breach it and thereby secure some advantage to the detriment of the other party, a “vendee who, without breach on the part of the vendor, refuses to perform a contract for the purchase of real estate, cannot recover from the vendor either the amount paid on the purchase price, or a deposit by him as earnest money or as a forfeiture; the vendor being ready, able, and willing to perform upon his part.” (Emphasis supplied.) Annotations 59 A.L.R. 189, 194-195; 134 A.L.R. 1064. These general rules however are subject to numerous exceptions, qualifications and limitations. It is not necessary here to carefully note all the distinctions, it is sufficient to briefly indicate the nature of some of the limitations. If there is no express provision for a forfeiture the mere default of the vendee as to timely payments does not work a forfeiture (Plymouth Securities Co. v. Johnson (Mo.), 335 S.W.2d 142, 152), “some act or word in assertion of forfeiture being necessary to such a result, unless the circumstances peculiarly excuse it.” 31 A.L.R.2d, l. c. 112. This rule too has its qualifications, the vendor is excused from affirmatively declaring a forfeiture if the vendee in addition to his default labors under a misconception of his rights or expressly announces an abandonment of the contract. 31 A.L.R.2d, l. c. 114, 122; Leon v. Barnsdall Zinc Co., 309 Mo. 276, 274 S.W. 699. On the other hand, rescission usually contemplates a restoration of the status quo (Austin & Bass Builders, Inc. v. Lewis (Mo.App.), 350 S.W.2d 133) and, as indicated, readiness to perform is a prerequisite and the vendor’s immediate sale of the property to a third person may alter the matter, particularly if it constitutes a rescission. 31 A.L.R.2d, l. c. 125. The vendor does not render himself liable to account “at leas(e), where his act is a step in forfeiting the contract for the default of the vendee, and is done after giving notice of forfeiture, or making a demand for payment and giving notice of his intention to forfeit the contract if such demand is not complied with.” 59 A.L.R., l. c. 209. Although the facts were not comparable to the circumstances of this case these generalities have been recognized and applied in several cases in this jurisdiction. Norris v. Letchworth, 167 Mo.App. 553, 152 S.W. 421; Chamberlain v. Ft. Smith Lumber Co. (Mo.App.) 179 S.W. 740; Haynes v. Dunstan (Mo.App.) 104 S.W.2d 1025; Bennett v. Adams (Mo.App.) 238 S.W.2d 442. The courts as well as others have not always been consistent in the development and application of the rules, some of the criticisms may be noted in 59 A.L.R., l. c. 215, 134 A.L.R., l. c. 1066 and 31 A.L.R.2d, l. c. 15, 127-128.

It is not necessary here to examine the rationale of the rules or to attempt a reconciliation of the cases, this case does not plainly fall within either the cases or the rules. The Kings do not purport to have followed the terms of the contract, they did not give thirty days’ notice and treat the purchasers as tenants and they did not assert the right to repossession of the premises. Neither did they in the conventional manner assert a forfeiture. On the other hand, as far as the Penningtons were concerned, compliance with the contract and the general rules may have been excused on their part because Buck Pennington notified the Kings that he was disgusted, did not intend to make the payments and that “I’d just let it go.” In this connection and no doubt to carry out this purpose a quitclaim deed was mailed to the Penningtons in California. Buck and his wife signed the deed and mailed it to the bank in West Plains but they had not acknowledged the instrument and so it was again returned to them for complete execution. This time they simply retained the incompleted deed and left it in California when Buck came back to West Plains for the trial. As a part of the original transaction the Kings had endorsed to the Reeds and the Penningtons a “receipt for stock” in the National Farm Loan Association. Buck and his wife endorsed this certificate adding, “I Buck Pennington turn back to I. N. King and Sarah Lee King my interest in said stock.” In the letter transmitting the certificate Buck added, “Also you are entitled to half of the corn and Hay and whatever came out of the timber.” From this and other conduct it would appear that the Penningtons once treated the contract as abandoned as far as they and the Kings were concerned but again in this their obligations to the Reeds were ignored.

The difficulty in adjusting the rights of all the parties to the original contract arises however in what the Kings and Reeds, independently of the Penningtons, subsequently did. It was said, when the January 1961 payments came due, that the Reeds did not tender the sums due or make their proportionate part of the payments. Because of their failure to make the payments it was said that they also were in default. And, on February 18, 1961, the Kings and the Reeds entered into a mutual release (59 A.L.R., l. c. 218) of the original contract and the Reeds quitclaimed their interest in the farm to the Kings. The release does not refer to the $6,500 payments on tlie original contract and neither the new contract nor the new deed were offered in evidence. Reed says that his second purchase of the farm was for $15,000, “Of course, with the down payment taken into consideration.” Reed testified that the quoted language meant “just my portion of it,” that is, his portion of the down payment. He repeatedly insisted that in the new contract of purchase he did not receive credit for any sum the Penningtons had paid to the Kings under the original contract. Here, it may be noted, that the second sale to the Reeds is unlike the sales in any of the cited cases. The Kings did not retake possession of the property and then make a sale to a third party, a stranger to the original transaction (59 A.L.R., l. c. 209), the second sale was to one of the original contracting parties.

King says that when Reed informed him that Pennington was not going to make the payments, Reed “didn’t know what to do. He had his money for his halfSo King replied to Reed, “Well, Mr. Pennington wants to default; let him default. You won’t need to lose your part because he did his. In other words, I just guaranteed him his equity in the farm." In describing the second sale and his agreement with the Reeds, he said, “I just added Mr. Pennington’s loss onto Mr. Reed’s loan. He gave me a down payment on that, on the deed of trust, and a mortgage for the rest of- — Q. You mean you added Mr. Pennington’s loss onto Mr. — A. Well, Mr. Pennington defaulted. The Court: You mean that, Mr. King, that the balance M.r. Pennington owed on the obligation, you added it onto Reed? The Witness: That is right.” Later Reed said, “He gave me credit for the original down payment, but he didn’t give me credit for Buck’s half. The Court: He just gave you credit for what you paid? The Witness: That is right. The Court: — although he had collected from Mr. Pennington? The Witness: It is true. I didn’t want any — anyhow, it was a family affair, so I didn’t push — The Court: So, what you are doing, you are just picking up the payments that you and Pennington both owe? The Witness: No, I am picking up — The Court: — plus part of that that Pennington paid in? The Witness: Yes. ⅜ * ⅜ Mr. Green: What the Judge wants to know, and I want to, if I have got it clear, did you get any credit on the place for anything Pennington had paid on the place? The Witness: No credit at all.”

These are indeed ambiguous explanations, even if indisputable documentary evidence is unavailable, King and Reed know and can establish beyond doubt whether King gave Reed credit for any part of the Penningtons’ initial payments on the purchase price. This is important not alone as a matter of truth and fact but for its bearing on the general rules with respect to the law of vendor and vendee. In the second transaction Reed and King apparently ignore Pennington. Because of the Pen-ningtons’ default the Kings forfeit their partial payments. At the same time, because of the Reeds’ default, the Reeds and Kings mutually rescind the contract and then, consistently with the theory of rescission (but contrary to the theory and effect of forfeiture), give Reed credit for the payments he had made on the original contract. This not only presents an irreconcilable inconsistency of theories, but if in the second sale King charged Reed $15,000 for the farm; King will have had the unaccounted for windfall of the Penningtons’ payments because he does not claim to have sustained other than nominál damages by reason of Penningtons’ default. It is also in this respect that the case is unique — that the seller rescinds as to one joint purchaser and forfeits as to the other. In these circumstances the Penningtons are obviously not entitled as a matter of right to specific performance of the original contract. But for the reasons indicated and in these unique circumstances they are entitled to an accounting for that part of the $6,500 paid by them and received by the Kings.

This view of the controversy does not resolve the remaining Reed — Pennington problems. It would be most unreasonable to permit Pennington to breach if not repudiate what he seems to consider his severable part of the contract with the Kings and thus compel the Reeds either to buy his interest in the contract on his terms or likewise breach the contract with the Kings and run the risk of forfeiting not only their share of the down payments but also their expenditures in improving and operating the farm. Pennington claims that when he left Howell County in February 1960 he and the Reeds understood that they were no longer in “partnerships on paying for the livestock or the farming operation.” But of course he may not so readily rid himself of his contractual obligations, he too is in the inconsistent position of seeking enforcement of the contract against the Kings but at the same time ignoring his relationship to the Reeds. Pennington, admittedly, has not kept his bargain with his brother-in-law from the start. He did not make his half of the deposits in the joint bank account and he has made no contribution in either effort or money to the cost of operating or improving the farm. When he made a tender of one half of the payments due' on the purchase price in March 1961, he did not at the same time offer to comply with his bargain with the Reeds and sharé in the expenses,- burdens and losses. But, as indicated, these are all matters of an adjustment of rights and an accounting between the Reeds and the Pen-ningtons. Normally upon this appeal there would not only be a review de novo 'but this court would find the facts and ultimately give such judgment as “shall seem agreeable to law.” Sup.Ct. Rules 73.01(d), 83.13 (c), V.A.M.R. The Penningtons, understandably, do not complain of the judgment in so far as it relates to their problems with the Reeds, 'but as between these parties there was not a full-scale trial of the merits. The consequence is that upon this record it is not possible for this court to confidently find the facts and justly dispose of all the issues between the Reeds and the Penning-tons. The final result of such an adjustment and accounting, either in this court or upon another trial, may not differ materially from the judgment already entered by an experienced trial judge. Nevertheless, if the parties insist upon the resolution of their rights by litigation, it does not appear that all the available, relevant facts have been -presented or that all of the Reed-Pennington problems have been considered.

For the reasons indicated, the judgment is reversed and the cause remanded for such further action as the parties may deem necessary and appropriate.

BOHLING and STOCKARD, CC., concur.

PER CURIAM.

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

All of the Judges concur.


source: Caselaw Access Project

author: EAGER, Judge. STORCKMAN, Judge

license: Public Domain

text:
    Petition of the BOARD OF PUBLIC BUILDINGS of the State of Missouri, and John M. Dalton, Governor, Hilary A. Bush, Lieutenant Governor, and Thomas F. Eagleton, Attorney General, constituting the members of said Board. The BOARD OF PUBLIC BUILDINGS of the State of Missouri, and John M. Dalton, Governor, Hilary A. Bush, Lieutenant Governor, and Thomas F. Eagleton, Attorney General, constituting the members of said Board (Petitioners), Respondents, v. Joseph M. CROWE and Kathryn K. Crowe (Intervenors), Appellants.
    No. 49598.
    Supreme Court of Missouri, En Banc.
    Dec. 11, 1962.
    Motion for Rehearing Denied and Opinion Modified Jan. 14, 1963.

      Rozier, Carson, Inglish, Nacy & Monaco, Jefferson City, for appellants.
    Thomas F. Eagleton, Atty. Gen., J. Gordon Siddens, Asst. Atty. Gen.,' Robert B. Fizzell, Robert B. Fizzell, Jr., Norman E. Gaar, Stinson, Mag, Thomson, McEvers & Fizzell, Kansas City, for respondents.
   EAGER, Judge.

This matter arises from a petition filed under §§ 108.310-108.350 by the Board of Public Buildings of the State of Missouri seeking a pro forma decree authorizing the issuance of, and adjudicating the validity of, a series of $5,000,000 of revenue bonds. Two taxpayers intervened and, by their pleadings, raised the issues which are here for determination. Various constitutional points are directly involved.

By §§ 8.010 and 8.370-8.450 (largely Laws 1959, HB 241, §§ 1-9, and as amended in certain respects in 1961 as to §§ 8.010, 8.390 and 8.420, Mo.Cum.Supp.1961, p. 22), the legislature has provided in substance: that the petitioner Board is constituted “a body corporate and politic”; that it may acquire sites, construct, equip and operate as a “project” a public building or buildings in any city of 10,000 or more inhabitants; that it “may require” any or all state agencies which occupy rented or leased quarters in such a city to occupy space therein and to contribute “from funds appropriated for its support” a proportion of the rentals necessary from the project in a proportion based upon the number of square feet occupied; that the Board may issue and sell revenue bonds to raise funds for the estimated cost of the project, pledge the net income and revenues from the project to the payment of such bonds, and covenant to “fix, maintain and collect the reasonable rates and charges for the use of the project” (§ 8.400) such as in the judgment of the Board will provide sufficient revenues to operate and maintain the project, and to provide and maintain specifically named funds for the payment of the bonds, for a reserve, and for depreciation ; that such bonds shall not be deemed to be an “indebtedness” of the state or of the Board or of its individual members. Sundry more detailed provisions were enacted concerning the interest rate (not over 5%), maturities of bonds, the right to call the bonds, and the refunding thereof, if necessary. These provisions are not involved here. It was provided, however (§ 8.440)'' that the holder or holders of any bond orbonds might, by proper civil action, compel! the Board to perform all duties so imposed! upon it, including the “making and collecting of sufficient rates and charges * * and also to enforce the performance” of its. covenants made in issuing the bonds.

The Board, on December 14, 1961, unanimously adopted a detailed resolution finding that it was “necessary, advisable and! suitable” to acquire a site and erect an office building in Kansas City for the use of' the various state departments and agencies, operated there and now occupying rented' quarters, and that the estimated cost was-$5,000,000; and resolving: that revenue bonds should be issued and sold (setting forth specifically all the details and provisions thereof) to cover the cost; that all! such bonds should contain a provision that: they were “payable as to both principal and' interest and premium, if any, solely and only out of and are secured exclusively by pledge of the net income and revenues arising from the operation of said state office-building after providing for the costs of' operation and maintenance thereof”; that, such bonds should not be deemed to constitute an indebtedness of the state Pr of the-Board. The Board covenanted to build and maintain the building, authorized the setting-up of a construction fund and four other-special funds or accounts in the hands of the-State Treasurer to be administered .by action of the Board, and agreed to maintain the building as a revenue producing project,, and to set up such a schedule of reasonable-rates and charges as would produce income-in an amount sufficient to pay operating-costs and the principal and interest on the bonds. The Board also agreed that: “ * * it will cause said building to be occupied by the agencies and instrumentalities of the-State of Missouri, and by others if all of the space and facilities of the Project are-not immediately required by said agencies, and instrumentalities * * -*.” The resolution also contained provisions for declara-tion of default, the curing of defaults, and the enforcement of the rights of the bondholders by suit against the Board to require it to perform its obligations or to account, •or to enjoin unlawful acts. We have omitted many details in our discussion of this resolution, but they are unnecessary to a •decision.

The intervenors, appellants here, very •ably represented below and here, submit the following points: that the issuance of these bonds constitutes a liability of the state in •contravention of § 37, Art. 3, Mo.Constitution 1945, and that the statutes themselves are likewise unconstitutional; that, if the Board be considered a separate entity, then the issuance of such bonds would constitute a lending of the State’s credit in violation of §§ 38 and 39, Art. 3, Mo.Constitution; that the statutes in question constitute an unlawful delegation of legislative power in contravention of § 1, Art. 3 there•of; that the proposal, as exemplified in the resolution, violates § 36, Art. 3, which requires state funds to be deposited in the treasury; that it provides for the withdrawal of state funds in a method contrary to § 28, Art. 4; and, that the designation of the State Treasurer as custodian, if these are not state funds, imposes duties upon him not permissible under § 15, Art. 4. The trial court found and adjudged that neither 'the statutes, the resolution nor the issuance •of the proposed bonds were violative of the •Constitution and that all were valid.

We note at the outset that there is no "Missouri case which is of any direct assistance. Art. 3, § 37 of our Constitution provides, in applicable part, as follows: “The general assembly shall have no power to •contract or authorize the contracting of any liability of the state, or to issue bonds therefor, except * * (Here follow three exceptions with which we are not directly concerned.) The corresponding provision in our 1875 Constitution, § 44, Art. 4, was: “The General Assembly shall have no power to contract or to authorize the contracting of any debt or liability on behalf of the State, or to issue bonds or other evidences of indebtedness thereof, except in the following cases: * * Strangely, the debates in the 1875 Convention seem to shed no light upon the views of the delegates with reference to the applicable part of this section, although there was much discussion of the exceptions. (Debates Mo. Constitutional Convention 1875, Vol. VII, pp. 326 et seq.) In our 1944 Convention the Committee on Phraseology changed the former wording; essentially, the change merely eliminated the words “debt or” and left “liability.” A point, and probably the principal point, now made by appellants here is that our Constitution prohibits “liabilities” and not merely “debts" or “indebtedness” as do many other constitutions. They more or less concede that these revenue bonds would not constitute a state debt, which, they say, is “that which one is bound to pay to another or * * * a sum of money due from one person to another * * But they say that “liability” means “the state of one who is bound in law and justice to do something which may be enforced by action,” citing, Fidelity Coal Co. v. Diamond, 310 Ill.App. 387, 34 N.E.2d 123; Hyatt v. Anderson’s Trustee, 25 Ky. 132, 74 S.W. 1094, 1096; Behnke v. New Jersey Highway Authority, 13 N.J. 14, 97 A.2d 647, 654; 25 Words and Phrases “Liability” p. 62, et seq. Literally dozens of definitions may be found of the word “liability.” So far as the definitions are concerned, those interested may examine Black’s Law Dictionary, 4th Edition, citing multiple authorities, each with its own definition, and also the many corresponding definitions of the word “liable.” Generally, the word “liability” comprehends more than does the word “debt”; but any ensuing confusion arises, at least in large part, from a failure to consider the context and the precise type of “liability” under consideration. A common conception of the word is that it denotes present or future debt, fixed or contingent. (See the various definitions in Black, supra.) As stated in Erickson v. Grande Ronde Lumber Co., 162 Or. 556, 92 P.2d 170, loc. cit. 174, 94 P.2d 139: “The words ‘liabilities’ and ‘indebtedness’ would be deemed by Dean Goodrich as accordion words: they are capable of expanding and contracting in their connotations. They may mean present, current, future, fixed or contingent debts. Their meaning in each instance must be determined, not by looking in the dictionaries, but by reading the context, reviewing the transaction, and taking note of the subsequent conduct of the parties who used tlje equivocal words.” We note here that the prohibited “liabilities” are those which the legislature might contract, or authorize the contracting of, and that the issuance of “bonds therefor” is directly and immediately considered in the context; we also note that the exceptions which follow contemplate the assumption of contractual debts, presumably to be paid by general taxation, for the legislature is authorized to issue bonds and to provide for “an annual tax on all taxable property” sufficient to pay off any bonds issued under the section.

There was no such restriction upon the contracting of debts or “liability” prior to the adoption of the 1875 Constitution. See, generally, St. Louis Southwestern Railway Co. v. Loeb, Banc, Mo., 318 S.W.2d 246, 252, where it was said: “The state had invested heavily in railroad bonds (prohibited after 1865) and had lost millions in the liquidation of these, ending in 1868; cities, towns and counties still owned large amounts of railroad common stock in 1871.” Some of the railroads for which money was thus furnished were, in fact, never built. The principal restriction in the 1865 Constitution consisted (Art. 11, Sec. 13) of a declaration that the credit of the State should not be given or loaned in aid of any person “ * * nor shall the state hereafter become a stockholder in any corporation or association, except for the purpose of securing loans heretofore. extended to certain railroad corporations by the state.” Such misfortunes undoubtedly furnished the background-for the general restriction of legislative powers beginning in 1875. But, generally speaking,, the people were thus prohibiting the legislature from incurring obligations which would' or might require general taxation to liquidate.

Cases from various states are cited, pro- and con, involving somewhat similar situations. It will be impossible to discuss these in any detail. Most of them involved questions as to whether or not projects and enactments somewhat similar to ours infringed upon constitutional prohibitions against “indebtedness” or “debt” of the state. Some of the courts have proceeded upon the theory that the public body or agency created was a separate entity and that in any event its debt (if such there was) was not a debt of the state. Book v. State Office Building Commission, 238 Ind. 120, 149 N.E.2d 273; State ex rel. Fatzer, Atty. Gen., v. Kansas Armory Board, 174 Kan. 369, 256 P.2d 143; In re Opinion of the Justices, 252 Ala. 465, 41 So.2d 761; McArthur v. Smallwood, 225 Ark. 328, 281 S.W.2d 428; Holmes v. Cheney, 352 S.W.2d 943 (Arkansas); Geboski v. Montana Armory Board, 110 Mont. 487, 103 P.2d 679; State ex rel. Thomson, Atty. Gen., v. Giessel, 271 Wis. 15, 72 N.W.2d 577. Some of those cases and others, such as Preston v. Clements, 313 Ky. 479, 232 S.W.2d 85; Application of tire Oklahoma Capitol Improvement Authority, 355 P.2d 1028 (Okl.); State ex rel. Fatzer, Atty. Gen., v. Board of Regents of State of Kansas, 167 Kan. 587, 207 P.2d 373; Loomis v. Keehn, 400 Ill. 337, 80 N.E.2d 368; Kelley v. Earle, 325 Pa. 337, 190 A. 140, and Texas National Guard Armory Board v. McCraw, Atty. Gen., 132 Tex. 613, 126 S.W.2d 627, also hold that such revenue bonds do not constitute a debt within the meanings of the respective constitutional provisions. Missouri has so held with reference to municipal corporations and their constitutional debt limitations. (Sec. 26, Art. 6.) Dodds v. Kansas City, Banc, 347 Mo. 1193, 152 S.W.2d 128; City of Maryville v. Cushman, 363 Mo. 87, 249 S.W.2d 347.

Other cases have denied the validity of such legislative acts, generally holding them unconstitutional as in violation of debt limitations. Ayer v. Commissioner of Administration, 340 Mass. 586, 165 N.E.2d 885; State Office Building Commission v. Trujillo, 46 N.M. 29, 120 P.2d 434; State ex rel. Public Institutional Building Authority v. Griffith, 135 Ohio St. 604, 22 N.E.2d 200; Opinion of the Justices, 146 Me. 183, 79 A.2d 753; Washington State Building Financing Authority v. Yelle, 47 Wash.2d 705, 289 P.2d 355. In most of these, however, certain material facts were essentially different from those in our case. Thus, in the Opinion of the Justices (Maine) supra, the Office Building Authority had power to mortgage the real estate, it could only lease the building directly to the State, and the State obligated itself to pay all the rentals for a lease period of up to thirty years and until the bonds should be retired. The arrangement there was held, in fact, to constitute a mere instalment purchase. In the Yelle case, the statute purported to bind future legislatures to appropriate sufficient funds to pay the rentals over and above fees, etc. received by the agencies, and the leases were to run for thirty years; and, the court noted “* * * the far greater portion (of the rental money) will arise from a general levy” (parentheses and italics are ours). In Ayer et al. v. Commissioner, supra, the leasing by the Authority to the Commonwealth of Massachusetts for presumably twenty-three years was apparently mandatory, and the lease was to be automatically extended until the bonds were paid; also, the building was to become the property of the state when the bonds were paid, and the state was made directly liable for all deficiencies above the ordinary rentals (this being designated as “additional rent”) until an amount was realized sufficient to satisfy the bonds. There also the arrangement was held actually to be a “borrowing” on account of an instalment purchase. In Trujillo, supra, the court construed the term “debt,” in a constitutional sense to mean: “ ‘ * * * a debt pledging for its repayment the general faith and credit of the state or municipality, as the case may be, and contemplating the levy of 'a general property tax as the source -of fuiids with which to retire the same. * * * the debt whose contracting is inhibited is one which may engage the general taxing power of the state or municipality for its repayment.’ ” The court further noted, loc. cit. 448: “This would mean; so long as the agencies did not recede from the lease agreements under the one specified condition, that future legislatures would be bound to provide appropriations for payment of rentals. Such would not be within the conception of expense under a lease as current expense; and a legislature cannot tie the hands of another legislature.” The building was to be erected on state land, and the state was to appropriate the money, though from the building fund. The court queried —“How could the state appropriate money it did not own * * *?” Many other things were noted pointing to a direct state operation of the project, and, indirectly, to the assumption of a state debt. The Commission there actually had very limited authority. However, the court apparently had a little difficulty in distinguishing a previous case, State ex rel. Capitol Addition Building Commission v. Connelly, 39 N.M. 312, 46 P.2d 1097, 100 A.L.R. 878. In Griffith, supra, the facts involved, generally, improvements and additions to existing state buildings on state land, and the case is hardly applicable; and there the Department of Public Welfare was held to have an absolute obligation to liquidate the bonds, which were chargeable against its whole income.

Appellants have cited three cases as discussing constitutional limitations upon “liabilities” or “liability.” These are: Bell v. City of Fayette, 325 Mo, 75, 28 S.W.2d 356; McCutcheon v. State Building Authority, 13 N.J. 46, 97 A.2d 663; and Straughan v. City of Coeur D’Alene, 53 Idaho 494, 24 P.2d 321. In Bell, the question was whether the purchase of new equipment for a municipal light plant, to be paid for solely out of additional earnings, constituted an indebtedness in excess of the city’s current revenue under § 12, Art. 10 of the 1875 Constitution. The court held that it did not, noting that no special or general tax could he levied; it went on, however, to make the statements relied on here (largely as dicta and relying upon an Idaho case) to the effect that the city might he “liable” for a failure to carry out its contract and that this might conceivably be enforced by mandamus ; it further noted, however, that “such liability would not be a debt created by the contract.” The implication was that “liability” is broader than “debt,” and ordinarily this is true. We find nothing in the case which should be binding here or overly persuasive. McCutcheon, supra, involved the New Jersey constitutional provision forbidding, under certain conditions, the creation of “a debt or debts, liability or liabilities” of the State, as well as certain other provisions not material here. The essential holding was that under the peculiar facts there present the supposed leasing arrangement was a purchase by the state, but we fail to find that the decision was based upon any expressed distinction between liabilities and debts. Essentially, as we read the case, the obligation was held to be a debt. The court, although noting the presence of the term “liability,” said, loe. cit. 672, 673: “The course pursued here is at variance with the essential quality and meaning of the constitutional debt limitation. * * * By the device used in the case now before us, the constitutional debt-limitation provision would be subverted, and made utterly vain.” The Authority there could only lease to the state or its agencies, the contracts of the agencies were made binding upon them even in “the lack of an appropriation,” authority was given to mortgage the real estate, the state pledged that it would not .restrict the Authority’s rights, sites for buildings were to be selected by designated state officials, and the project contemplated twenty-year leases; also, the state convenanted that on each annual budget it would include the amount of the rentals required. Even upon these exaggerated facts there was a strong dissent by two judges. Straughan, supra,, involved the purchase by two cities of a. water system and a lighting system. The ultimate holding there seems to be that under the proposed contracts contingent debts of the cities might thereby be incurred which would require a general tax, and that the court thus construed the term “liability.”' We are not persuaded by these cases last discussed that the term “liability” as used' in our context, means anything more than, we have already indicated.

Appellants suggest also the existence of a liability of the state because the rentals will be paid from funds appropriated to the various state agencies and taken from revenue raised by taxation. We note here, that no rent can be paid by any agency (in the absence of other possible income) until and unless the legislature has seen fit to make an appropriation to it for its general support, operation, and maintenance for a. specific biennium. Nor, indeed, can any agency now pay its .rent until that has been done. When such an appropriation has: been made, the agency may use the money to pay rents (as they are doing now) or salaries, buy office supplies, etc. This-money, when so appropriated and received, has lost its character as general state revenue. See, generally, Opinion of the Justices, 252 Ala. 465, 41 So.2d 761, loc. cit. 763. And it is pure speculation to say that any legislature would impose more taxes-for future appropriations on account of this project, than it would otherwise do. It has been held that whether the rentals come from appropriated monies or from the public in fees, etc., is immaterial in so far as our question is concerned. State ex rel. Fatzer v. Armory Board, 174 Kan. 369, 256 P.2d 143; State v. Florida Development Commission, Fla., 84 So.2d 707, loc. cit. 708. And, as held in Loomis v. Keehn, 400 Ill. 337, 80 N.E.2d 368, 370, and State ex rel. Thomson v. Giessel, 271 Wis. 15, 72 N.W.2d 577, the appropriation and the payment by the state of money to pay current rents-do not create a debt; indeed, such is the necessary result of most of the other opinions sustaining enactments similar to this, and already cited.

We do not consider this as a contract of purchase by the state, as some courts, under different facts, have held. No periodic or aggregate payments are fixed; indeed, the Board is not required to enter into leases at all, much less leases for the full term of the bonds. The maturity of such bonds is left elastic in the act (not more than forty years) and provisions are made for refunding. Nor does it appear that the state will directly acquire title. And see, generally, Book v. State Office Building Commission, 238 Ind. 120, 149 N.E.2d 273; Kelley v. Earle, 325 Pa. 337, 190 A. 140; such also is the necessary effect of various other cases already cited.

Appellants have raised a question concerning the taking of title to any real estate acquired, suggesting that if title be taken in the name of the state (as, for instance, under § 8.240) the state would thus become the owner and the arrangement a purchase, with the state renting to its own agencies, thus an anomaly. Section 8.380, authorizing the Board to “acquire by purchase, lease, gift or otherwise * * * real or personal property,” and, indeed, to condemn property, appears to be ample authority for the Board to acquire a site in its own name as a “body corporate and politic.” For that purpose and to that extent it undoubtedly is an entity. Section 8.380 was enacted ten years after § 8.240 and would normally be controlling, at least in so far as it concerns the Board’s authority. We have no question involving the state’s title here, for on the resolution now adopted, the Board proposes to acquire a designated site in Kansas City not owned by the state, and presumably in its own name (and, as shown in a pleading filed, from the Land Qearance for Redevelopment Authority). Nor is it shown that title will now or in the future be transferred to the state.

We do not decide the principal question here upon the rather narrow argument that the Board is such a separate legal entity that its debt or liability is not that of the state. There is considerable authority for that position, as already indicated. We hold that “liability” here, as used in § 37, Art. 3, of our Constitution, means, in its true context, a contractual indebtedness, present or future, absolute or contingent, which will be or may be liquidated by general taxation. We do not consider that the power to enforce this contract created by the bonds and the resolution, as given to the bondholders, constitutes such an indebtedness as just defined. We can hardly conceive of a money judgment against the state or the Board in this situation, except for rentals collected and not properly accounted for.

The other points raised may be disposed of more briefly. We do not consider that §§ 8.370-8.450 constitute an improper delegation of legislative powers in violation of the separation of powers provided in our Constitution, or under § 1, Art. 3, defining the legislative powers. The principles governing this question are well established, though each case may vary on its facts. As stated by our court in State, on Inf. of Dalton v. Land Clearance for Redevelopment Authority, Banc, Mo., 270 S.W.2d 44, loc. cit. 56: “We conclude that the powers of Authority, as defined in the Act, including the power to prepare plans, to carry out these plans after they have received approval of the governing body, and to determine the fair price at which land within legislatively declared blighted or insanitary areas may be sold are administrative details and were properly delegated to Authority as an administrative agency of the governing body. See Ex parte Williams, 345 Mo. 1121, 139 S.W.2d 485, 491.” See, also, State ex rel. Priest v. Gunn, Banc, Mo., 326 S.W.2d 314, loc. cit. 321 et seq.; Spitcaufsky v. Hatten, Banc, 353 Mo. 94, 182 S.W.2d 86, 109, 160 A.L.R. 990; Borden Co. v. Thomason, Banc, Mo., 353 S.W.2d 735, 758; 16 C.J.S. Constitutional Law § 138, p. 575, and pp. 622-623. The courts of other states have, in several of the cases already cited, specifically denied this contention in the construction of statutes similar in nature. Book v. State Office Building Commission, 238 Ind. 120, 149 N.E.2d 273; Preston v. Clements, 313 Ky. 479, 232 S.W.2d 85; McArthur v. Smallwood, 225 Ark. 328, 281 S.W.2d 428; Holmes v. Cheney, 352 S.W.2d 943 (Ark.); Loomis v. Keehn, 400 Ill. 337, 80 N.E.2d 368; Geboski v. Montana Armory Board, 110 Mont. 487, 103 P.2d 679; Kelley v. Earle, 325 Pa. 337, 190 A. 140; Texas National Guard Armory Board v. McCraw, Atty. Gen., 132 Tex. 613, 126 S.W.2d 627. Our legislation sufficiently declares and defines the conditions under which the Board may act, its powers, and the legislative will; the detailed determinations may properly rest in the Board’s discretion.

It is also contended that the issuance of the bonds and the statutes under which they are proposed to be issued are violative of §§ 38(a) and 39, Art. 3 of the Mo. Constitution, in that such action would constitute a lending of the state’s credit. The prohibition is against a lending of credit to any “private person, association or corporation” (§ 38(a) or to “any person, association, municipal or other corporation” (§ 39). Appellants seem to concede that this argument would only be applicable if we should hold that the Board was an entity wholly separate and distinct from the state. We have not so held, and the point requires no further discussion.

Three points remain. Appellants say: (4) that the proposed resolution, and §§ 8.370-8.450 are violative of § 36, Art. 3, which requires that “All revenue collected and money received by the state” be deposited in the treasury; (5) that these statutes are violative of § 28, Art. 4 which provides the sole method of withdrawal of money from the state treasury, namely, by appropriation, certification and warrant; and (6) that the resolution designating the State Treasurer as “the custodian of funds” is violative of § 15, Art. 4, which provides that “No duty shall be imposed on the state treasurer by law which is not related to the receipt, investment, custody and disbursement of state funds.”

We may clarify the consideration of these points by stating that these monies are (or will be), of course, “state funds,” by way of contrast with private' funds'; but they will consist of the proceeds o'f the sale of the bonds and money received by the Boárd from state agencies solely as rent. These funds will not constitute any part of the general revenue. In State ex rel. Thompson v. Board of Regents, Banc, 305 Mo. 57, 264 S.W. 698, it was sought to force the respondents to pay into the treasury insurance money which they had collected; that action was taken pursuant to a provision of the 1875 Constitution similar to the present § 36, Art. 3. The court declined to issue the writ. In so doing, it defined “revenue” as follows: “By revenue, whether its meaning be measured by the general or the legal lexicographer, is meant the current income of the state from whatsoever source derived which is subject to appropriation for public uses.” We shall deal first with the rentals to be received. While the term “money” as used in § 36, Art. 3 is broader than revenue, the rent payments (when they reach the Board) will have already been withdrawn from the general revenue by regular appropriations, assigned to specific agencies or departments for their general support, and thus made subject to their disbursement; a portion of this money will thereafter be regularly requisitioned by the respective agencies and applied as rent. That final payment will, under the present proposal, presumably be made to the Board. In its hands and in the hands of the Treasurer as custodian these funds partake of the nature of a trust, for the Board has solemnly contracted their application to the stated purposes.

The existence of special funds in the treasury has long been recognized. State ex rel. Fath v. Henderson, 160 Mo. 190, 60 S.W. 1093. Indeed certain funds (as the state’s contributions to the Employees’ Retirement Fund) when once included in a regular appropriation are remitted directly to the respective Boards or Trustees for their own deposit and handling. See Sections 104.310-104.600. The rental funds in our case, having once been appropriated, requisitioned for the operations of the agencies, and paid to the Board, need not be appropriated again before being applied to the contracted purposes. The Board, while it is an agency of the state, has been constituted a “body corporate and politic” and certainly it has been made an entity for the purpose of holding funds in a separate capacity, as it may do with the real estate. The Board here has chosen to leave these funds in the custody of the State Treasurer, —but as custodian, as we understand, and not as a part of the treasury funds. This is proper under § 15, Art. 4 of the Constitution, and the Treasurer has expressed his cooperation. The Board will presumably order the funds applied, as contracted, by the custodian. We have held that the state has contracted no liability by reason of the issuance of these bonds or the adoption of the resolution of the Board. It would seem, therefore, that neither it nor those presuming to act in its behalf, should have the right to insist that the rentals should be put in the treasury and again appropriated in a useless circle.

The proceeds of the sale of the bonds stand upon a somewhat different footing. Broadly speaking, that is state “money.” It will not have been appropriated by the legislature at any time under the present resolution. We hold that this part of the Board’s money is subject to § 36, Art. 3, that it should be placed in the state treasury when realized, and appropriated to the Board for its use in the construction of the building and the attendant expenses. This money is also charged with a trust, but it differs from the rentals in that it would not have passed through the treasury at any time and would not have been withdrawn therefrom by appropriation. This, of course, will necessitate a modification of the resolution.

We recognize and approve the holding in State ex rel. Thompson v. Board of Regents for Northeast Missouri State Teachers’ College, 305 Mo. 57, 264 S.W. 698, that certain monies of the State College need not be paid into the state treasury. This holding was essentially based upon the idea that these institutions, although they are instrumentalities of the State, are not the State itself nor does the State act through them in its “sovereign capacity,” and that their funds (except appropriated monies) are not essentially “state money.” In defining the latter term the court said: * * * or, as aptly put by the respondent, state money means money the state, in its sovereign capacity, is authorized to receive, the source of its authority being the Legislature. * * * ” We have also noted the ruling in State ex rel. Curators of University of Missouri v. McReynolds, 354 Mo. 1199, 193 S.W.2d 611, to the effect that the Curators of the University had the implied power, even before the appropriate legislation was enacted, to issue revenue bonds for the building of dormitories. That opinion seems to infer that the Curators might handle the proceeds of such bonds as their own funds. On the other hand, this court held in State ex rel. McKinley Pub. Co. v. Hackmann, Banc, 314 Mo. 33, 282 S.W. 1007, that the Highway Commission was a “subordinate branch of the executive department,” even before the 1945 Constitution which expressly classifies it as such. And the proceeds of Highway Bonds go into the State Treasury as a trust fund and are appropriated for highway purposes. (Laws 1923, p. 45, § 118.)

We have no quarrel with any of those rulings, but we are convinced that in the present case the State is really acting in its “sovereign capacity” through the Board of Public Buildings to establish and maintain a home for its various departments and agencies. It would be hard to conceive of a more concrete example of the exercise of the State’s paramount, governmental functions than that exercised here through a Board which is actually a branch of its executive department. This project constitutes a function essentially different from those of the institutions of higher learning, and our ruling here is not applicable to their revenue bonds. (See Thompson, supra.) When the proceeds of the present bonds reach the treasury, they need not thereafter be appropriated under the provisions of subsections “first” to “eighth” of Section 36, for they constitute a trust fund. They should be appropriated solely to and for the use of petitioner, for its purposes and upon its order or orders.

Inasmuch as all this money is in the nature of a special state fund, we see nothing violative of the substantive intent and meaning of § 15, Art. 4 in designating the State Treasurer as the one to have custody of the funds. This applies to the rentals and, if the Board chooses, to the proceeds of the bonds after an appropriation has been made. The constitutional provision is that “No duty shall be imposed upon the state treasurer by law which is not related to the receipt, custody and disbursement of state funds.” The statutes in question do not provide that the State Treasurer shall be the custodian; in fact, they are silent as to the custody. The law has not imposed this duty on the Treasurer; and the prohibition runs against the legislature. There has certainly been no express violation of § 15, Art. 4 of the Constitution. There was no similar provision in the 1875 Constitution, and the background of the 1945 provision lies in the prior history of a building up of the power and patronage of elected officials by giving to them new functions and duties. One purpose of the new constitution was to limit and define the scope and duties of all executive officials (see § 12, Art. 4,) agencies, and departments, including elected officials. A similar prohibition was imposed as to the State Auditor (§ 13) and the Secretary of State (§ 14). We hold, upon the interpretation stated above, that by the present proposal the essential and substantive duties of the Treasurer are not altered or extended.

We thus deny the assertions of invalidity attributed to §§ 8.370-8.450; we also find the resolution of the Board to be valid except to the extent heretofore indicated. We certainly express no opinion concerning the wisdom of this venture or concerning the age-old argument about the desirability of being an owner or a tenant of real estate. Those problems, we may happily say, are for the legislature.

The judgment should be modified to the extent indicated in this opinion. Otherwise it is affirmed.

All of the Judges concur except STORCKMAN, J., who dissents in separate dissenting opinion.

STORCKMAN, Judge

(dissenting).

In my opinion the proceeds of the reve-, nue bonds in question are not “revenue collected and money received by the state” within the meaning of Art. III, § 36, of the Constitution of Missouri, and therefore need not go into the state treasury and be subject to appropriation. It is my view that the Board of Public Buildings is legally entitled to hold such proceeds in trust and to use them without appropriation for the purposes which the general assembly has previously authorized and designated by §§ 8.370 to 8.450, RSMo 1959, V.A.M.S. State ex rel. Thompson v. Board of Regents for Northeast Missouri State Teachers’ College, 305 Mo. 57, 264 S.W. 698, 699-700 [1-4]. I can see no valid distinction between the proceeds of the revenue bonds and the rental revenue of the completed office building which the Board is authorized to collect and apply to the payment of the bonds.

Therefore, I respectfully dissent from that portion of the opinion which holds to the contrary.

      . All statutory references are to RSMo 1959 and V.A.M.S. unless otherwise designated.

      . All references to the Missouri Constitution are to the present 1945 Constitution except where otherwise stated.


author: STORCKMAN, Judge.

text:
    CITY OF ST. JOSEPH, Missouri, Appellant, v. L. J. ROLLER, Respondent.
    No. 49273.
    Supreme Court of Missouri, Division No. 2.
    Jan. 14, 1963.
    Joseph G. Wood, City Counselor for City of St. Joseph.
    Ronald S. Reed, Reed & Reed,. St. Joseph, for Zola Anderson et ah, amicus curiae.
    Kranitz & Kranitz, St. Joseph, for respondent.
   STORCKMAN, Judge.

This proceeding involves the constitutionality of an ordinance of the City of St. Joseph, Missouri. It was commenced in the Police Court of St. Joseph by an information filed by the City Counselor against the defendant charging a violation of a city ordinance. The Police Court dismissed the information and the City appealed to the Circuit Court of Buchanan County where the defendant filed a motion to dismiss on the ground, among others, that the ordinance and the statute on which it was based were unconstitutional. The persons who appear here as amici curia also by leave filed a brief in the Circuit Court.

The transcript recites: “No evidence was offered or received on the Motion to Dismiss, and specifically Section 12-315, Municipal Code of the City of St. Joseph, 1949, as amended by General Ordinance 3179, enacted October 14, 1950, was neither offered nor received in evidence.” Nevertheless, the motion to dismiss was argued orally, written briefs were filed, and thereafter the court sustained the defendant's motion to dismiss. In connection with making the record entry of dismissal, the court dictated into the record a memorandum of the grounds of his ruling. The City’s motion for new trial was overruled and it appealed.

Since neither the ordinance nor any other evidence was introduced at the hearing of the motion to dismiss, the extent of the record before the trial court as well as this court will be apparent by reference to the pleadings. The information reads as follows:

“The undersigned city counselor for the City of St. Joseph, aforesaid, informs said court that the City of St. Joseph is a municipal corporation and a city of the first class, and that the above named defendant did, on or about the 12th day of August, 1961, and on divers other days within a year period thereto, violate an ordinance of said city, to-wit: Section 12-12, Chapter 315, Municipal Code of the City of Saint Joseph, Missouri, 1949 (or General or Special Ordinance Number , . . .) as amended, by then and there in said City of St. Joseph, Missouri, Violation city code Barber Law 12-12-315, at 7110 King Hill, 7:04 A.M. to the damage of said city in the sum of Five Hundred Dollars.”

The grounds alleged in defendant’s motion to dismiss are:

“1. That Sec. 12-315 of the Mu- ■ nicipal Code of the City of St. Joseph (Go 3179, 14 October 1950) is so vague, indefinite and uncertain as to be wholly invalid as a penal regulation.
“2. That said Sec. 12-315 is beyond the scope of the powers granted plaintiff under Sec. 71.750, RSMo 1959, and hence is ultra vires.
“3. That said Sec. 12-315 of the Code and Sec. 71.750 of the Statutes are class legislation, discriminatory in nature, deprive defendant of his property without due process of law, and hence are violative of Article I of the Constitution of Missouri of 1945, and of the Fourteenth Article of Amendment to the Constitution of the United States.
“4. That said Sec. 12.315 is not reasonably connected with the public health and general welfare, and so is an arbitrary and unreasonable exercise of the police power by plaintiff, and hence void.”

At the time the record entry of dismissal was made, the court dictated the following “MEMORANDUM OF COURT” into the record:

“The Couirt feels after reading the briefs and hearing the arguments of Counsel, that the statute upon which this ordinance is based, has no substantial or rational relation to the police powers of the State and does not simply regulate the hours of labor, but regulates the time of opening and closing shops.
“Further, if it is for the purpose of regulating competition, it is class legislation.
“WHEREFORE, the Motion to Dismiss is by the Court sustained on the grounds that the statute upon which the ordinance is based is unconstitutional.”

Jurisdiction of the appeal is in this court because the constitutionality of a municipal ordinance and the statute on which it is alleged to be based were presented by the motion to dismiss, and the trial court held the statute to be unconstitutional. Art. V, § 3, Constitution of Missouri, 1945, V.A.M.S.; Marshall v. Kansas City, Mo., 355 S.W.2d 877, 879[1]; Wooster v. Trimont Mfg. Co., 356 Mo. 682, 203 S.W.2d 411[1].

In their briefs both parties have gone outside of the record. The defendant in particular undertakes to explain his factual situation and inserts in his statement of facts what purports to be a copy of the ordinance pursuant to which the defendant was arrested. To this, the City properly objects in its reply brief. The parties have briefed the constitutional questions and the extent of the police powers of the state, but on the record before us we cannot reach and decide these issues.

Essentially, the situation in this case is the same as in City of Rolla v. Riden, Mo.App., 349 S.W.2d 255. The defendant Rid-en was charged with violating a city ordinance described by number, in that he sold milk in the City of Rolla without a permit. A jury found Riden not guilty and the city appealed to the circuit court where the defendant filed a motion to dismiss on the ground that the ordinance was void because it was in conflict with the laws of Missouri. The motion was sustained and the city appealed from the judgment of dismissal. In the Riden case, as here, the ordinance had not been put in evidence. The opinion of the Springfield Court of Appeals made an extensive examination and review of the decisions of the courts of this state and very properly held that “neither trial nor appellate courts may take judicial notice of municipal ordinances.” 349 S.W.2d loc. cit. 258. The court of appeals further concluded that the trial court should not have sustained the contention that the ordinance was void when it was not properly before the court. The judgment was reversed and the cause remanded.

Section 71.750, RSMo 1959, V.A. M.S., appears to be an enabling act which provides that cities, towns and villages are “empowered to pass, alter, amend and repeal ordinances to regulate the hours of closing of barber shops and beauty shops.” That much we know and no more. We take judicial notice of statutes but not of ordinances. Without the ordinance before us, we do not know its terms or if in fact one was enacted. We have no way of knowing if it was intended to be based on § 71.750. The trial court had no way of knowing that either because the ordinance was not in evidence, and the court could not take judicial notice of it. For all that appears, the ordinance, if there was one, may have had some ■other basis. The effect of sustaining the motion and dismissing the prosecution was to hold the ordinance invalid because the information shows that the defendant was being prosecuted for violation of an ordinance — not a statute. Without the ordinance being properly before the court, there was no legal basis for holding it void and dismissing the information.

We have given the memorandum of the court the effect of “a brief opinion containing a statement of the grounds for its decision” made pursuant to § 510.310 subd. 2, RSMo 1959, V.A.M.S., although the transcript does not show it was requested before final submission as required by the statute. It has been held that a memorandum filed without a request does not perform the function provided by the statute and does not take the place of evidence as a test of the correctness of the judgment. Easton Food Center, Inc., v. Beatrice Creamery Co., Mo.App., 119 S.W.2d 987, 989[ 1]. We mention this because there are several grounds in the defendant’s motion to dismiss besides the one referred to by the court.

As a bare minimum, the ordinance should have been introduced in evidence or agreed upon in this case. Without it the court erred in sustaining the motion and dismissing the information. City of Rolla v. Riden, supra. It might not be ámiss to observe that cases are often dismissed on the pleadings without a sufficient development of the material facts to justify the action taken. Ellis v. Wolfe-Shoemaker Motor Co., 227 Mo.App. 508, 55 S.W.2d 309; Burke v. City of St. Louis, Mo., 349 S.W. 2d 930; Pogue v. Smallen, Mo., 285 S.W.2d 915.

Courts generally do not pass on constitutional issues if the case may be properly disposed of otherwise. State ex rel. De Weese v. Morris, 359 Mo. 194, 221 S.W.2d 206, 209 [8], It would be mere guesswork to undertake the determination of the validity of the ordinance on the record before us.

The judgment is reversed and the cause remanded.

All of the Judges concur.