author: MASSEY, Chief Justice.

text:
    Marion Bob POSEY et al., Appellants, v. Shirley POSEY, Appellee.
    No. 16594.
    Court of Civil Appeals of Texas. Fort Worth.
    Jan. 22, 1965.
    Rehearing Denied Feb. 19, 1965.

      Allred & London, and Renne Allred, Jr., Bowie, for appellants.
    Coffield & Jones, Bowie, and Ernest May, Fort Worth, for appellee.
   MASSEY, Chief Justice.

All proceedings below were by the trial court sitting without a jury.

At one time, during the course of the events culminating in the judgment from which this appeal has been taken, the father of Marion Bob Posey, an appellant, was alive and participating. Nina Posey, also an appellant, mother of Marion Bob Posey, succeeded to her husband’s interest as of the time of any judgment to which we may refer. For purposes of simplification in our explanation of events, we can safely treat the mother as having been in the position which was actually hers alone as of the date of the final judgment.

Shirley Posey, appellee, was formerly the wife of Marion Bob Posey. It was by cross-action that she sought and obtained a divorce.

Hereinafter the foregoing parties will be referred to as Marion Bob, Shirley, and Nina.

Pending on the docket of the District Court of Montague County, Texas, at one and the same time, were Causes Nos. 14,120 and 14,267. Under the issues made between Marion Bob and Shirley under Cause No. 14,120 was the matter of Shirley’s entitlement to a decree of divorce, and also the matter of the proper division of the community property of the parties. Nina was a party to that suit under Shirley’s allegations that some of the community property of herself and Marion Bob was in Nina’s hands and/or held by her as a trustee. Following a hearing on the merits of the divorce case, the trial court entered a decree wherein it was declared that Shirley was entitled to and awarded a divorce and custody of her children. An amount was also awarded to her as an attorney’s fee.

The decree did not purport to divide the “certain community property” treated as belonging to the parties, without identification made. As part and parcel of the decree the Court directed: “ * * * it would be to the best interest of the parties that a receiver be appointed with instructions to take charge of and sell such property and hold the proceeds thereof until further ordered by the court. * * * ” The Court proceeded to order the appointment of a disinterested attorney as the receiver to perform such duty. However, this attorney never qualified as a receiver and never undertook to perform any of the duties directed to be performed.

Under Cause No. 14,267 Nina was suing to collect debts evidenced by certain promissory notes executed by Marion Bob. From the record as a whole, it would appear that the latter was not asserting any defense to his mother’s suit. In any event, Shirley felt it advisable to intervene and advance all possible defenses which might operate to defeat Nina’s claim in order that the size of the community estate of herself and Marion Bob would not be unjustly diminished. She did intervene and became a party to the suit.

After the time of the interlocutory decree in the divorce case (Cause No. 14,120), the issues in the suit upon the matter of debt, evidenced by notes (Cause No. 14,267) had not yet been tried. The trial court entered an order consolidating the two cases under the latter number, for the dual purpose of determining for what, if anything, the parties might be entitled to judgment as against one another. It is from the judgment rendered under Cause No. 14,267, the consolidated case determining the property rights of all three of these parties, that Marion Bob and Nina have perfected a joint appeal. In its judgment the Court ignored the fact that there had been an earlier provision for a receiver. Since the person named as receiver never qualified it would be proper to treat such provision of the former decree as though no receiver had ever been named.

By their appeal Marion Bob and Nina have obviously waived any contention by either as against the other, although their interests would in law be adverse. The situation is such that Marion Bob must be treated as obligated to pay Nina at least as much as the amount awarded Nina in judgment as against him, though it might be our conclusion that Nina’s judgment as against him be excessive, — and Nina must be treated as entitled to no more as against Marion Bob than was awarded her by the judgment, though it might be our conclusion that Marion Bob had a greater obligation to her than was decreed.

The nature of the appeal is such that the ultimate matter for determination is whether Shirley was awarded property constituting no part of the community estate of Marion Boh and Shirley in that it belonged to Nina,- — and whether the court erred in its determination of the indentity and extent of the community property divided between Marion Bob and Shirley, and/or erred in the division thereof between them.

A substantial number of the points of error are overruled in view of our conclusion that the prior interlocutory judgment of divorce was part and parcel of the final judgment from which the appeal was perfected. The form of the judgment entered in the divorce case prior to the order of consolidation settled certain matters. In other words, pursuant to the grant of a divorce of the parties, all matters in controversy and made issues requiring determination pursuant to any final decree of divorce, except upon the matter of property division, were settled thereby. The decree was an interlocutory judgment which did not become final and appealable until the entry of judgment after the trial following the consolidation of the causes. Though Marion Bob and Shirley were thereby divorced, they were not divorced by a form of decree of which either could complain on any appeal, the case not having become “ripe for appeal” because of the persisting issues not then disposed of. The order of consolidation necessarily carried along with it, as part and parcel of the consolidated causes (and whether the parties, or the court, understood such legal result), the issues upon which a decree had been rendered in the form of an interlocutory judgment. That the interlocutory judgment did not affirm its character to be such was immaterial. It was interlocutory because issues made by the pleadings in the divorce case — those upon proper property division — remained and persisted as matter of dispute after the entry of the decree. These issues were not finally determined thereby, but were finally determined by the judgment which was rendered after the trial of the consolidated causes. See Vernon’s Ann.Civ. Tex.St, Article 4638, and cases annotated thereunder relative to when it is essential to finality of judgment decreeing divorce that property rights be adjudicated.

One point of error, obviously that of Marion Bob, contends that there was “no evidence” before the court which would justify a judgment of divorce in favor of Shirley. In this connection it was pointed out that the statement of facts contained no evidence bearing upon the matter of that cruel treatment on the part of Marion Bob, on account of which Shirley contended she was entitled to a divorce. Yet the certificate to the statement of facts, signed by all the attorneys in the case, recited that they “do hereby agree that the foregoing 322 pages, comprising Volumes I and II, constitute a full, true, and correct transcript in Question and Answer form of all the testimony and proceedings had, and all documentary evidence introduced during the trial of said cause.”

It is obvious from the whole record, and from the briefs of the parties, that some if not all the participants on the trial of the property matters had a distorted view of the legal situation. We have already explained that the decree of divorce was an interlocutory judgment which would not become final and appealable until by a further decree the community property of Marion Bob and Shirley was divided. Yet, these participants treated the interlocutory judgment as a final judgment rendered in an unrelated case, hence the form of the certificate to the statement of facts by which the attorneys purportedly agreed that it contained all the testimony.

In the statement of facts appears the testimony of Marion Bob. He is the only party on appeal who would be entitled to contest the granting of a divorce to Shirley. From such testimony it is obvious that Marion Bob was not only happy that he and Shirley be divorced, he considered himself wholly and completely divorced from her at the time of the trial of the property issues. Indeed, the testimony showed that as of the very time he was testifying he and another woman (not Shirley) had agreed to marry, although the nuptial date was not set.

The recitations of the interlocutory decree, the judgment awarding Shirley a divorce, showed that Marion Boh, in person, was present before the court at a hearing where the matter under consideration was the propriety of such an award. They further showed that the court’s decree was entered after having heard the pleadings, evidence, and argument of counsel.

It is obvious therefore that a completion of the statement of facts filed in this court, by a suggestion that a further statement of facts be furnished under the provisions of Texas Rules of Civil Procedure, rule 428, “Amendment: Record”, would demonstrate that there was some evidence of probative force to support the interlocutory judgment of divorce. We do not believe that an appellate court is obliged to order supplementation of the statement of facts under situations where to do so would accomplish no good object, but would merely increase the costs on appeal. Indeed, to do so in the instant situation would not be warranted unless it be made to appear at some stage of the proceedings, as upon a motion for rehearing, that even were such directed, yet the point of error under consideration would be such as should be sustained, thus requiring a reversal of the judgment with remand of the cause for at least a retrial of the issues upon Shirley’s entitlement to a divorce.

The point of error is overruled.

In none of the points of error has Marion Bob asserted that the division of property made in connection with pronouncement of a decree of divorce pursuant to V.A.T.S., Article 4638, “Division of property”, amounted to an abuse of discretion on the part of the court. There was no request for findings of fact and conclusions of law and none were filed. In the body of the judgment appealed from suclr. property as was awarded or apportioned to Shirley was so decreed “as her portion of' said community estate” (community property of Marion Bob and Shirley). Our-appellate courts have held that a trial court, is vested with wide discretion and that on. appeal a judgment dividing community-property should be sustained except when it clearly appears that there has been an: abuse of discretion. In view of the absence-of any complaint of abuse of discretion all' those remaining points of error, which-might be construed to contend that the trial', court erred in its award of community property to Shirley, avail Marion Bob' nothing. As between Shirley and Marion-Bob, we must hold that Shirley is entitled to receive the property awarded to her.. This does not mean, however, that Nina, is in any way hampered in her contention that Shirley was not entitled to any of the-property so awarded because such was not,, in fact, community property, — but belonged' to her.

Hence, of the remaining points of error only one remains to be considered from the standpoint of a complaint by Marion Bob. Therein he complains because the-trial court refused to permit him to malcecertain proof with reference to his inventory and appraisement filed pursuant to provisions of V.A.T.S., Article 4635, “Inventory and appraisement”, in view of demand made by Shirley. In connection therewith we note that Marion Bob never made or tendered an amended or corrected inventory and appraisement, and never at any time-plead that any mistake was made therein. Further, from an examination of Marion Bob’s bill of exceptions it is disclosed that, he did not deny that the property and ownership reflected therein was false or incorrect, but merely that he told attorney Lovette (Nina’s attorney), who prepared the instrument for him, that certain property reflected therein was not owned by him at the-time.- Considered as a point of error advanced by Marion Bob, it is overruled.

Considered as a point of error ad-vanced by Nina it is likewise overruled. We 'have already pointed out the failure under ■the bill of exceptions to establish that the inventory and appraisement was incorrect. Furthermore, the evidence established that Nina was a party to the suit, under Shirley’s •pleadings in cross-action for divorce, at -the time the inventory and appraisement was prepared and filed. Indeed, it seems that attorney Lovette, who prepared the same in behalf of Marion Bob, was Nina’s rather than Marion Bob’s attorney, and ■that his services were afforded because he was employed by Nina. Under these cir•cumstances Nina was charged with knowledge and notice of the existence and consents of the instrument at all material times.

The remaining points of error have relation solely to Nina’s complaints as against 'Shirley and the judgment. Nowhere is Nina complaining of Marion Bob, or because of any dispute arisen because of anything he received by the judgment with cor-responding denial of any right she believes Tierself entitled.

By two of the points Nina com.-plains because the judgment of the trial •court failed to give her a personal judgment against Shirley in connection with ■six notes, five having been given by and purporting to have been the obligation of Marion Bob prior to the date divorce proceedings were instituted, and one in connection with the balance owing on a note referred to as The Swinson Note. Nowhere in Nina’s pleadings is there any prayer for a personal judgment against Shirley. The points of error are overruled.

By a good many points of error Nina complains because of the award to Shirley of certain lots in various blocks in additions to the City of Bowie, all of which properties are to be found listed in the Inventory and Appraisement filed pursuant to divorce proceedings. As heretofore mentioned this instrument was filed at a time when Nina was a party to the litigation in which it was filed, and the same was prepared by her attorney though executed by Marion Bob. The points of error are overruled.

From what we have heretofore said it is our intention to and we do overrule all Nina’s points of error, save that which we will now proceed to discuss.

In the judgment rendered below the trial court, as part of the total properties found to constitute the community estate of Marion Bob and Shirley, awarded the latter an “One-half interest in $10,000.00 second Vendor’s Lien note executed by C. D. Swinson et ux, and payable on its face to Mrs. Nina Posey, described in Deed recorded in Vol. 477, page 506, Deed Records of Montague County, Texas.” Nina’s point of error with reference thereto amounts to a contention that there was “no evidence” that the balance owing on such note constituted any part of the community estate. If she is correct the judgment of the trial court was, of course, in error in awarding Shirley any interest therein. From the evidence it appears that about two-thirds of the principal owing on the note has been paid, though it is past due and there is some interest owing. Neither the note, nor the balance owing thereon, was listed in the Inventory and Appraisement which has been a previous subject of our discussion.

We sustain the point of error. It is somewhat difficult to describe with clarity the state of the evidence bearing upon the question of “no evidence”. Restated: the question is whether the events hereinafter narrated constitute evidence having probative force and effect which shows that a certain $10,000 note was, as of the time of its execution, the property of Marion Bob. If it was his property then it was a part of the community estate.

Nina held legal title to a parcel of property in the City of Bowie. She had a prospective purchaser therefor by the name of Levy. Marion Bob handled at least a portion of the negotiations leading up to the consummation of the sale to Levy. He participated in closing the transaction. By the closing Levy paid as the cash portion of the transaction the sum of $8,595.26. His check therefor was taken hy Marion Bob and deposited in one of his accounts. In addition to the title instrument delivered by Nina to Levy the latter demanded an additional instrument. It seems that there was an alleyway adjacent to the property, the boundaries of which might become the subject of a controversy between the property owner and the city. Against this contingency Levy desired protection. To satisfy him an indemnity agreement was executed by Nina (along with her then living husband) and Marion Bob. One paragraph thereof read, as follows: “The undersigned, Marion Bob Posey, hereby represents that he is an interested party in this transaction and expects to and will receive a consideration out of the purchase money and joins herein in a contractual capacity and not merely as a surety.”

The $8,595.26 delivered by Levy as “cash” was taken by Marion Bob and deposited in one of his accounts. There it remained until a later time when certain real estate became available for purchase. It was desired that a purchase thereof be made whereby title thereto was taken in the name of Nina. There is no evidence that in the acquisition of the legal title by Nina she did not receive the entire equitable title as well. However, in connection with the “cash” deliverable upon said purchase transaction Marion Bob withdrew $7,500.00, out of the account in which the $8,595.26 had been deposited, and delivered it to the grant- or who deeded the property to Nina. Marion Bob testified that the entire $8,595.26 deposited was Nina’s money, and that the $7,500.00 was a portion thereof (of Nina’s money he had deposited to his own credit). No explanation was ever made concerning any disposition of the difference between ■the $7,500.00 and the '$8;595.26.'

Later in time there appeared- a prospective purchaser for this same property (that property for the purchase of which the $7,500.00 had been expended). This prospect was a Mr. Swinson. Swinson purchased the property. Consummation of the sale and purchase and transaction involved Nina’s execution of a deed thereto conveying the property. Swinson’s consideration consisted in the delivery to Nina of $3,228.08 in cash, the delivery of a first Vendor’s Lien Note (secured by a Deed of Trust) to a financing institution, and in the delivery to Nina of a $10,000.00 second Vendor’s Lien Note. It is this $10,000.00 note, or the balance due or to become due thereon, which is the subject of the point of error. There was no evidence concerning an interest of Marion Bob in and to the $10,000.00 note not covered by our statement hereinabove.

We do not believe that there was-any evidence showing that Marion Bob and/or Shirley ever received any interest in the $10,000.00 note. If there was, the extent of such interest was not shown. This is true whether the test applied is as to whether it amounts to direct or indirect evidence. The burden of proof lay upon either Marion Bob or Shirley. Exigencies of the case were such that Shirley assumed such burden of proof. Our holding is that she did not successfully discharge it.

Judgment of the trial court is reformed so as to delete the award of any interest in the $10,000.00 Vendor’s Lien Note executed by C. D. Swinson, et ux, payable on its face to Mrs. Nina Posey described in Deed recorded in Vol. 477, page 506, Deed Records of Montague County, Texas, the owner thereof being Mrs. Nina Posey. As so reformed the judgment is affirmed.


source: Caselaw Access Project

author: CHAPMAN, Justice.

license: Public Domain

text:
    Mason SCOTT, Appellant, v. NUNN ELECTRIC SUPPLY CORPORATION, Appellee.
    No. 7434.
    Court of Civil Appeals of Texas. Amarillo.
    Jan. 25, 1965.
    Sanders, Scott, Saunders, Brian & Humphrey, Amarillo, for appellant.
    Clayton, Kolander, Moser & Templeton, Amarillo, for appellee.
   CHAPMAN, Justice.

This is an appeal by Mason Scott, defendant below, from a judgment for Nunn Electric Supply Corporation, hereinafter called Nunn Electric, in an action tried to the court. The suit was on an account for the purchase price of certain merchandise under a trust receipt financing arrangement between the supplier, Nunn Electric, and Mason Scott, and was for $3,219.71, plus reasonable attorney’s fees and expenses incurred in the prosecution of the suit. The case was tried to the court and judgment rendered for Nunn Electric in the amount pleaded, plus $200 attorney’s fees, a total of $3,419.71, together with 6% per annum interest from the date of judgment. It is from such judgment appeal is perfected to this court.

The account sued upon arose prior to September 6, 1962, the date on which appellant filed a statutory assignment for the benefit of his creditors under Articles 261 through 274 Vernon’s Ann.Tex.Civ.St. The record indicates he had made a common law assignment on June 4, 1962, and made a payment of $898.10 thereunder on July 25, 1962.

Article 261 of Title 12, designated in Vernon’s Civil Statutes as Assignments for Creditors, provides in part as follows: Every assignment made by a debtor for the benefit of his creditors shall provide for distribution of all his real and personal estate among all his creditors consenting thereto and shall be construed to pass all such estate whether specified therein or not except property exempt by law from execution. All emphases herein are ours.

Article 263 of such title provides:

“A debtor may make such assignment and shall thereupon stand discharged from all further liability to such consenting creditors on account of their respective claims. Such debtor shall not be discharged from liability to such creditor who does not receive as much as one-third of the amount due and allowed in his favor as a valid claim against the estate of such debt- or.”

Findings of fact and conclusions of law were made at the request of appellant, then additional and amended conclusions requested by appellant and made by the court.

The transcript and appellant’s brief appear to create a paradox. The former shows appellant requested additional and amended findings of fact and conclusions of law. He requested her to make the following conclusions of law:

“1. Article 263, Vernon’s Annotated Revised Civil Statutes, is unconstitutional.
“2. Nunn Electric Supply Corporation, in receiving and accepting 34% of the claim filed with the assignee, did not discharge the Defendant, Mason Scott, from the unpaid balance of the claim filed by Nunn Electric Supply-Corporation. Although Nunn Electric-Supply Corporation received 34% of its claim from the assignee, neither, under the statutes nor the common law did such acceptance by Nunn Electric-Supply Corporation discharge Mason. Scott, the Defendant, from the balance-of the indebtedness due Nunn Electric Supply Corporation.”

Then by brief he contends she erred in making the very conclusions he requested; i. e., in holding as a matter of law that Article 263 V.T.C.S. is unconstitutional in so far as it purports to discharge a debtor and that Nunn Electric in receiving and accepting 34% of the claim made by them: did not discharge appellant. She had not made these conclusions of law in her original findings and conclusions, so at least to that extent the additional conclusions were extended and added to the original conclusions of law made by the court.

Under this state of the record appellant was bound by the additional findings: requested, Waters v. Yockey, 144 Tex. 592,, 192 S.W.2d 769; Hood v. Adams, Tex.Civ. App, 334 S.W.2d 206 (N.W.H.), though we do not consider ourselves bound to> find Article 263 unconstitutional simply because the appellant requested the trial court to do so and she complied. That question as a constitutional question is not briefed.

Both parties in their briefs in discussing the question of whether that portion of Article 263 which seeks to discharge the debtor from any further liability to the consenting creditors refer to it as being unconstitutional, yet the cases they discuss refer to it as being suspended by the National Bankruptcy Act. Star v. Johnson, Tex.Civ.App., 44 S.W.2d 429, 432 (affirmed per curiam, 121 Tex. 195, 47 S.W.2d 608). We do not find it necessary to pass on its. constitutionality or whether the two terms are synonymous or not.

There are two types of assignments in Texas, the statutory assignment and the common law assignment.

Though he asks conclusions contrary thereto in his request for additional conclusions, appellant argues by brief he is discharged from any further unpaid portion of his indebtedness to appellee, a form of relief available through a voluntary petition in bankruptcy. Creditors’ Rights in Texas, p. 117; Bankruptcy Act, 11 U.S.C.A. § 32.

“The release provisions of the Texas statutory assignments have been held conditionally inoperative and suspended as an infringement upon the bankruptcy act.” Creditors’ Rights in Texas, p. 117; Dodgion v. J. M. Radford Grocery Co., Tex.Civ. App., 50 S.W.2d 837 (N.W.H.).

Our Supreme Court has held our Texas Assignment for Creditors Act was not suspended as an infringement upon the National Bankruptcy Act “except as to the provision that provides for the discharge of claims of consenting creditors who are paid as much as one-third thereof * * Star v. Johnson, supra. This “except” provision is included in Article 263, supra. We therefore hold the trial court was correct in the judgment rendered, though we are not passing on the constitutionality ofr the statute. Therefore, Article 263 wherein it purports to discharge appellant from the] claim sued upon is an infringement upon] the Bankruptcy Act and is inoperative and] suspended. *

It is settled law that state laws to the extent that they actually conflict with the Bankruptcy Act are suspended thereby. Sturges v. Crowninschield, 4 Wheat 122, 4 L.Ed. 529 (U.S.1819); Brown v. Smart, 145 U.S. 454, 12 S.Ct. 958, 36 L.Ed. 773 (1891); In re Wisconsin Builders Supply Company, 239 F.2d 649, certiorari den. Prentice v. Moskowitz, 353 U.S. 985, 77 S.Ct. 1286, 1 L.Ed.2d 1143.

There appears to be still another reason we must find the judgment of the trial court correct from the record. Article-261, supra, provides:

“Every assignment made by a debtor for the benefit of his creditors shall provide for a distribution of all of his real and personal estate among all his creditors consenting thereto, * * *. The term ‘real and personal estate’ shall not include property exempt by law from execution.”

The trial court found as a fact that appellant owns a one-fifth undivided interest in a 160-acre tract of land in Gray County-subject to execution, which finding is supported by probative evidence. That property was not included in the common law-assignment, if there was one, nor in the statutory assignment made.

Appellant’s last point asserts estoppel against appellee to claim a balance due by virtue of having accepted under the statutory terms of the assignment. Estoppel is one of the pleas required to be pleaded affirmatively, which was not done in this-case. Rule 94, Vernon’s Ann.Tex.Rule; City Lincoln Mercury v. Ybarra, Tex. Civ. App., 308 S.W.2d 67 (writ dismissed) ; Hutchinson v. Texas Aluminum Company, Tex.Civ.App., 330 S.W.2d 895 (writ dismissed).

“The pleader must allege the facts that are essential to the existence of estoppel with particularity and precision; no in-tendments are made in favor of the plea.” 22 T.J.2d, Estoppel, Sec. 20, p. 691 and cases there cited.

Our Supreme Court has said:

“ ‘In order to constitute an equitable estoppel or estoppel in pais there must exist a false representation or concealment of material facts; it must have been made with knowledge, actual or constructive, of the facts; the party to whom it was made must have been without knowledge or the means of knowledge of the real facts; it must have been made with the intention that it should be acted on; and the party to whom it was made must have relied on or acted on it to his prejudice.’ ” Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 932.

We do not believe appellant complied in his pleadings with these rules just stated.

Finding no reversible error, the judgment of the trial court is in all things affirmed.

      . Article 261 et seq. V.T.O.S.; Creditors’ Rights in Texas, p. 117.

      . Creditors’ Rights in Texas, p. 117; Hajek & Simieek v. Luck, 96 Tex. 517, 74 S.W. 305; Keating v. Vaughn, 61 Tex. 518.


author: ARCHER, Chief Justice.

text:
    ARMCO STEEL CORPORATION, Appellant, v. TEXAS EMPLOYMENT COMMISSION et al., Appellee.
    No. 11266.
    Court of Civil Appeals of Texas. Austin.
    Jan. 27, 1965.
    Rehearing Denied Feb. 17, 1965.

      Butler, Binion, Rice & Cook, Wm. Brantly Harris, Houston, for appellant.
    Waggoner Carr, Atty. Gen., J. H. Broad-hurst, Asst. Atty. Gen., Ernest Fortenberry, Austin, for appellee.
   ARCHER, Chief Justice.

This suit is by Armco Steel Corporation, an Ohio corporation having a permit to do business in Texas, against the State Treasurer, the Attorney General, the Texas Employment Commission and the individual members thereof, to recover an alleged overpayment of contributions made pursuant to the Texas Unemployment Compensation Act for the year 1961. At the conclusion of a nonjury trial the District Court entered judgment that the plaintiff take nothing.

The facts are largely stipulated. Appellant, Armco Steel Corporation (Armco) and two other Ohio corporations, The National Supply Company (National) and Union Wire Rope Corporation (Union), which were its wholly owned subsidiaries, merged effective at the close of business on December 31, 1960 and prior to the end of the calendar year. Appellant is the surviving corporation. Appellant by such merger acquired all of the organization, trade or business and all of the assets of each of National and Union. All three companies were employing units and employers having compensation experience within Section 7(c) of the Texas Unemployment Compensation Act, as amended, Tex.Rev.Civ.Stat. Ann. (Vernon 1962) Article 5221b-5(c). The required written applications were made for the transfer of the compensation experience of the predecessors, National and Union, to Post-Merger Armco, which applications were duly approved by The Texas Employment Commission.

Appellant paid contributions for the year 1961 in the sum of $239,123.72, based upon a contribution rate which was determined from compensation experience of Pre-Merger Armco ending September 30, 1960. If appellant had been allowed to have its rate determined on the basis of the combined compensation experience of Pre-Mer-ger Armco, National and Union, determined for the period ending September 30, 1960, such experience would have resulted in a lower contribution rate, an aggregate contribution of $209,233.26 and a saving to appellant of the amount in controversy herein, $29,890.46. Appellant duly made application for a refund of such amount, which was denied. Hence this suit for a refund, pursuant to Article 5221b-12(j) (2). At the outset it should be noted that the substantial evidence rule is not applicable, Rowan Oil Co. v. Texas Employment Commission, 152 Tex. 607, 263 S.W.2d 140 (1953).

Article 5221b-5(c) (7) provides in part:

“If an employing unit acquires all or a part of the organization, trade or business of an employer, such acquiring successor employing unit and such predecessor employer may jointly make written application to the Commission for that compensation experience of such predecessor employer which is attributable to the organization, trade or business or the part thereof acquired to be treated as compensation experience of such successor employing unit. * * * ”

Article 5221b-5(d) provides in part:

“The computation date for all experience tax rates shall be as of October 1 of the year preceding the calendar year for which such rates are to be effective, and such rates shall be effective on January 1 of the calendar year immediately following such computation date for the entire year; * *

The question is whether the Commission is required to ignore any succession which occurs after the “as of October 1” computation date.

We believe the court was justified in holding that appellant was not entitled to have its unemployment tax rate for 1961 determined on the basis of the combined compensation experience of National Union and Pre-Merger Armco, and is not entitled to an exception to the October 1 computation date. United States v. Munro-Van Helms Company, 243 F.2d 10, 13 (United States Court of Appeals, Fifth Circuit).

When Armco acquired the other two companies it was required to continue paying taxes at the rate then in effect for Arm-co only until the end of the year. A new rate was computed as of October 1, 1960.

The State agency has construed the statutes to make the appellant liable and such construction is entitled to great weight. 53 Tex.Jur.2d, Statutes, Sec. 177, p. 259; Flowers v. Texas Mexican Ry. Co., Tex. Civ.App., 174 S.W.2d 70; Clark v. Atlantic Pipe Line Co., Tex.Civ.App., 134 S.W.2d 322, er. ref.; Opinion Attorney General No. WW-1301.

The computation date for experience tax rates was changed to October 1, 1957 and since that time many rates have been computed and taxes collected in cases involving business acquisitions occurring during the last calendar quarter of the year. If the Commission’s interpretations of the statute is found to be erroneous, all such rates would have to be changed, and in some instances additional taxes would become payable and in other instances taxes would have to be refunded.

The Legislature has met in regular sessions and in called sessions since the tax computation date, and no changes were made.

The judgment of the trial court is affirmed.

Affirmed.


author: HYDE, Presiding Judge.

text:
    AUTOMAGIC VENDORS, INC., a Corporation, Respondent, v. M. E. MORRIS, Director of Revenue, State of Missouri, Appellant. SPOT SALES, INC., a Corporation, Respondent, v. M. E. MORRIS, Director of Revenue, State of Missouri, Appellant. COFFEE TIME, INC., a Corporation, Respondent, v. M. E. MORRIS, Director of Revenue, State of Missouri, Appellant.
    Nos. 50121-50123.
    Supreme Court of Missouri, En Banc.
    Feb. 23, 1965.
    Armstrong, Teasdale, Roos, Kramer & Vaughan, Bruce E. Woodruff, St. Louis, for Spot Sales, Inc., and Coffee Time, Inc.
    Kappel & Neill, Richard Wolff, St. Louis, for Automagic, Inc.
    Thomas F. Eagleton, Atty. Gen., Eugene G. Bushmann, Asst. Atty. Gen., Jefferson City, for appellant.
    Charles R. Judge, Dubail, Judge & Kil-ker, St. Louis, for amici curiae.
   HYDE, Presiding Judge.

These cases, consolidated for hearing in the Circuit Court, are petitions for judicial review of the administrative decisions of the Director of Revenue of the State of Missouri (see Chap. 536 and Rule 100) denying refunds of certain payments of sales taxes, paid under protest in accordance with the Sales and Use Regulations (see Sec. 144.270, subd. 1) involving construction of the revenue laws of this state. See Sec. 3, Art. V, Const., V.A.M.S. (Unless otherwise stated statutory citations are to RSMo 1959, V.A.M.S.) The court found petitioners entitled to the refunds claimed and entered judgment therefor, adjudging costs against the Director, who has appealed from this judgment.

The question for decision is the effect of the 1961 amendment to the sales tax law, establishing a bracket system for collection of sales taxes, on the liability of sellers to remit taxes to the Director.

Sec. 144.020 provided: “[T]here shall be and is hereby levied and imposed and shall he collected and paid: (1) Upon every retail sale in this state of tangible personal property a tax equivalent to two per cent of the purchase price paid or charged.”

Sec. 144.060 provided: “It shall be the duty of every person making any purchase or receiving any service upon which a tax is imposed by sections 144.010 to 144.510 to pay the amount of such tax to the person making such sale.”

Sec. 144.080 provided: “Every person receiving any payment or consideration upon the sale of property * * * shall, on or before the fifteenth day of the month following each calendar quarterly period of three months, make a return to the director of revenue of all taxes collected for the preceding quarter, or required to be collected for the preceding quarter, and shall remit the taxes so collected or required to be collected to the director of revenue.”

Sec. 144.100 provided: “2. The returns shall show the amount of gross receipts from sales, services and taxable transactions by the person and the amount due thereon during and for the period covered by the return and with the return the person shall remit to the director of revenue the amount of the tax due, including any and all moneys collected from a purchaser as sales tax.”

These sections were not changed in 1961 but the following new section 144.285 was adopted:

“Brackets for collection of tax.- — Notwithstanding the rate of taxes imposed by this chapter, and in order to avoid fractions of pennies, the following brackets shall be applicable to all two per cent taxable transactions :

“(1) On sales of less than twenty-five cents no tax shall be added;
“(2) On sales in amounts from twenty-five cents up to and including seventy-four cents, one cent shall be added for taxes;
“(3) On sales in amounts from seventy-five cents to one dollar, two cents shall be added for taxes; and
“(4) On sales in amounts of more than one dollar, two per cent shall be charged upon each dollar of price, plus the above bracket charges upon any fractional part of a dollar in excess of even dollars.
“No vendor or seller shall knowingly charge or receive from a purchaser as a sales tax any sum in excess of the sums prescribed in subdivisions one to four inclusive of Section 144.285.” Laws 1961, p. 634.

Before the enactment of this bracket system tokens were provided “to enable purchasers and recipients of taxable sales, services and transactions to pay the tax when the same amounts to a fractional part of one cent.” Sec. 144.270, subd. 2; see also Sec. 144.280. Authorization for tokens was repealed by the 1961 act and liquidation of tokens was required. Laws 1961, p. 634.

Petitioners sell merchandise through coin-operated vending machines making a large number of separate sales at less than twenty-five cents; two of them (Coffee Time and Spot Sales) sell no merchandise for more than seventy-four cents, so make sales only in the first two brackets specified in 1961 Sec. 144.285. The trial court agreed with petitioners’ contentions, making the following decisive findings and conclusions:

“3. That the Sales Tax Law, as amended, is in the nature of a transaction tax; i. e., computation of the tax is dependent upon the amount of sale or sales comprising one transaction; the Sales Tax Law, as amended, does not impose a tax on the total or gross sales or receipts of the seller.
“4. That the Sales Tax Law, as amended, imposes the duty to pay the tax on the purchaser; the seller’s liability is only to pay the tax collected or required to be collected.
“5. That in accordance with Section 144.285, R.S.Mo.Cum.Supp.1961, re-lators are not required to collect any sales tax, nor is any sales tax due, on transactions of less than twenty-five cents (25^), and therefore, relators are not required to remit to the Director of Revenue or the Department of Revenue any sales tax on said transactions.”

The State says: “There is general agreement between the parties upon the proposition that our sales tax is imposed upon the ‘purchaser’ while the ‘seller’ has the duty of collecting it. The real dispute in this lawsuit arises over petitioners’ insistence that a seller is only responsible for that amount of sales tax he is able to collect; ” but the State says “they have chosen a mode of doing business which virtually precludes them from in fact collecting any tax on their retail sales.” Nevertheless, as noted, Sec. 144.080 requires sellers to remit taxes “collected or required to be collected.” Whether or not the seller actually collects the tax from the buyer has no effect on the seller’s liability to remit to the Director. The decisive question is: What taxes are required to be collected by the seller? Whatever taxes the seller is required to collect, the seller is required to remit to the Director. Prior to the adoption of Sec. 144.285, the amount the seller was required to collect was “two per cent of the purchase price.” Sec. 144.020. As the State says, even under the mill token system, this could not be collected exactly, for example in sales under five cents, but the law of averages made it substantially accurate for the seller to remit two per cent of his gross sales.

The State argues that this principle should still be applied to sales at all amounts, saying that Sec. 144.020 is still the Section that imposes the tax and that remains “two per cent of the purchase price.” However, 1961 Sec. 144.285 says “[n\ot•mithstanding the rate of taxes imposed by this chapter * * * the following brackets shall be applicable to all two per cent taxable transactions.” It then says: “On sales of less than twenty-five cents no tax shall be added.” Is not this a change in tax imposed ? and does it not exempt sales of less than twenty-five cents from being taxable transactions ? It is our view that Sec. 144.-020 must be held to have been amended by the provisions of Sec. 144.285 to the extent that no tax is imposed on sales for less than twenty-five cents. We note that both Sec. 144.020 and Sec. 144.285 were materially amended in 1963 (Laws 1963, p. 196-197; 1963 Supp., Secs. 144.020 and 144.285) so that our construction of the 1961 provisions is not applicable to those now in force.

The State relies on the following cases: Stevens Enterprises, Inc. v. State Commission of Revenue and Taxation, 179 Kan. 696, 298 P.2d 326 (1956); W. S. Libbey Co. v. Johnson, 148 Me. 410, 94 A.2d 907 (1953); Piedmont Canteen Service, Inc. v. Johnson, 256 N.C. 155, 123 S.E.2d 582 (1962); F. W. Woolworth v. Gray, 77 N.D. 757, 46 N.W.2d 295 (1951); Calvert v. Canteen Company, Tex.Sup., 371 S.W.2d 556 (1963); Smoky Mountain Canteen Co. v. Kizer, 193 Tenn. 598, 247 S.W.2d 69 (1952); White v. State, 49 Wash.2d 716, 306 P.2d 230 (1957).

These cases involve different statutory provisions from ours and perhaps the one nearest to ours is the Calvert case (371 S.W. 2d 556) in which a tax of two per cent of the sale price was imposed to be collected by using the bracket system provided. The court, in ruling that sellers must remit two per cent of gross sales for the tax said: “It is only upon sales of fifty cents and multiples thereof that the tax paid by the consumer is the same as that collected by the retailer and paid to the Comptroller. The bracket system was utilized by the Legislature for collection purposes in contemplation of the fact that it is impossible for the retailer to add exactly two per cent to the sales price of every article sold. The law of averages was invoked to balance the impact of the tax upon retailer and consumer, and to permit the retailer to collect the tax from the consumer to the extent possible under the limitations of the bracket system.” We consider this principle to be applicable, under our Act, to sales for twenty-five cents or more because the tax collected on some of these sales will he more than two per cent although less than that on others, under our bracket system.

However, the Texas Act contained in V.A.T.S. Insurance Code, Art. 20.05 the following provision: "(B) Method Retailer Is to Use in Computing Tax. The limited sales tax levied under Article 20.02 hereof shall be computed and paid to the Comptroller on the basis of two percent (2%) of all receipts from the total sales of such tangible personal property sold by such retailer under said Article.”

We have no such provision in our sales tax statutes, so this Texas case is not applicable to our situation as to sales for less than twenty-five cents. It is interesting to note that our first sales tax was a gross receipts tax (Laws 1933-34 Extra Session, p. 155) but was changed to a tax collected from the purchaser at the next regular session of the General Assembly. Laws 1935, p. 411. The requirement to remit the taxes "collected or required to be collected” appears in that act as does the authorization of issuance and use of tokens for payment of the tax. Laws 1935, p. 417, Secs. 5 and 6. The 1961 Act, abolishing tokens and providing no tax should be added on sales of less than twenty-five cents, created a new and different situation. Therefore, the lack of any provision for remitting on the basis of two per cent of gross sales (as did the Texas Act) together with the language “notwithstanding the rate of taxes imposed * * * the following brackets shall he applicable to all two per cent taxable transactions,” and the positive provision that “no tax shall be added” on sales of less than twenty-five cents, seems to us to mean that such sales are not taxable. Thus our view is that since no tax is “required to be collected” on such sales, none is required to be remitted. We hold the trial court correctly ruled that petitioners are entitled to the refunds sought for taxes claimed to be due on sales for less than twenty-five cents.

The State contends that, in any event, the court erred in ruling it “pay the costs of this proceeding,” citing Murphy v. Limpp, 347 Mo. 249, 147 S.W.2d 420, 423; Hartwig-Dischinger Realty Co. v. Unemployment Compensation Commission, 350 Mo. 690, 168 S.W.2d 78, 82; State ex rel. State Social Security Commission v. Butler’s Estate, 353 Mo. 14, 181 S.W.2d 768, 771. In the Murphy case, involving the Unemployment Compensation Commission, we said (147 S.W.2d 1. c. 423) : “ ‘It is a general and well established rule apart from statute that costs are not recoverable from a state, in her own courts, whether she has brought suit as plaintiff or has properly been sued as defendant; or whether she is successful or defeated.’ Therefore, absent a statutory provision, the costs were erroneously assessed against the state.” This ruling was followed in the two other cases hereinabove cited; see also 14 Am.Jur. 22, Costs, Sec. 34; 81 C.J.S. States, § 234, p. 1345. Petitioners say the above-cited cases were before the adoption of the Administrative Procedure Act, Chap. 536, but point to no specific provision thereof authorizing costs to be taxed against the State. They cite only Sec. 536.140(6) providing “[a]ppeals may be taken from the judgment of the court as in other civil cases,” and Civil Rule 77.06 stating “the party prevailing shall recover his costs against the other party, except in those cases in which a different provision is made by law.” Neither of these provisions specifically imposes liability on the State for costs and we hold they are not sufficient to do so. Petitioners also cite State ex rel. Schneider’s Credit Jewelers v. Brackman, Mo.App., 260 S.W.2d 800, 813, but that case apparently was based on Reconstruction Finance Corporation v. J. G. Menihan Corp., 312 U.S. 81, 61 S.Ct. 485, 85 L.Ed. 595, which it cited, and which stated the principle “that in the absence of a contrary showing ‘it must be presumed that when Congress launched a governmental agency into the commercial world and endowed it with authority to “sue or be sued”, that agency is not less amenable to judicial process than a private enterprise under like circumstances would be’.” Here a State officer, and the collection of the State s revenue, is involved; not a governmental agency launched into the commercial world to function like a private enterprise. Therefore, we find no authority for a judgment for costs against the State.

The judgment in favor of petitioners for refunds of amounts paid as taxes on transactions of less than twenty-five cents is affirmed and it is reversed as to other matters adjudicated.

EAGER, C. J., STORCKMAN, HOLMAN, HENLEY, FINCH, JJ., and STONE, Special Judge, concur.

DALTON, J., not sitting.


author: EAGER, Chief Justice.

text:
    AUTOMATIC RETAILERS OF AMERICA, INC., (COFFEE TIME DIV.), a Corporation, Automagic Vendors, Inc., (formerly Automatique St. Louis, Inc.), a Corporation, Automatic Canteen Company of America, a Corporation, Apex Sales Company, a Corporation, Coca Cola Bottling Company of St. Louis, a Corporation, Service Vending Co., Inc., a Corporation, doing business as Midwest Vending, and Spot Sales, Inc., a Corporation, Respondents, v. M. E. MORRIS, Director of Revenue, State of Missouri, Appellant.
    No. 51033.
    Supreme Court of Missouri, En Banc.
    Feb. 23, 1965.
    Armstrong, Teasdale, Roos, Kramer & Vaughan, Kenneth Teasdale, Bruce E. Woodruff, Kappel & Neill, Richard Wolff, St. Louis, for respondents.

      Thomas F. Eagleton, Atty. Gen., Eugene G. Bushmann, Asst. Atty. Gen., Jefferson City, for appellant
    Sam Levin, Irving M. Malnik, St. Louis, for amicus curiae.
   EAGER, Chief Justice.

This is a suit for a declaratory judgment involving the construction of our Sales Tax Law, §§ 144.010-144.430, as amended by Laws 1963, pages 195-199. The respondents (plaintiffs) are owners and operators of coin-operated vending machines, and all are Missouri corporations. Basically, the controversy is whether they must pay sales taxes of 3% on the full gross receipts of their operations, or whether they may eliminate the tax on all sales transactions of less than 25 cents. The trial court found for plaintiffs in all respects and enjoined the defendant from collecting the additional sums he claimed. Up to that time plaintiffs had paid under protest the tax on sales of less than 25 cents.

Three of the present plaintiffs had also paid such taxes under protest under the law as it existed in 1961 and, after an adverse administrative ruling, they had separately sought reviews in the Circuit Court of Cole County. That Court reversed the decisions of the Director of Revenue on January 28, 1963, holding that the petitioners were not required to collect or pay any sales tax on transactions of less than 25 cents, and ordering refunds. The judgments were appealed and the causes consolidated here on appeal. Division One of this Court rendered an opinion affirming the Circuit Court (except as to costs) on July 13, 1964, but thereafter the consolidated cases were transferred to the Court in Banc. The opinion of Division One is adopted as the opinion of the Court in Banc concurrently with the filing of the present opinion, and it will occasionally be referred to herein as the prior opinion, 386 S.W.2d 897.

From the inception of our sales tax law until 1961 Missouri had operated, or had at least purported to operate, under a token or mill system in order to facilitate the collection of the 2% sales tax on small sales (less than 50 cents) and intermediate sales (between 50 cents and $1.00). In 1961 the legislature, for the first time, adopted a bracket system of collection, thus replacing the old token system; in 1963, concurrently with a raise in the tax rate to 3%, the legislature enacted a new bracket system.

We quote the pertinent portions of the respective bracket sections, 1961 and 1963, in that order:

“144.285. Brackets for collection of tax. —1. Notwithstanding the rate of taxes imposed by this chapter, and in order to avoid fractions of pennies, the following brackets shall be applicable to all two per cent taxable transactions: (1) On sales of less than twenty-five cents no tax shall be added; (2) On sales in amounts from twenty-five cents up to and including seventy-four cents, one cent shall be added for taxes; * * * 2. No vendor or seller shall knowingly charge or receive from a purchaser as a sales tax any sum in excess of the sums prescribed in subdivisions (1) to (4).”

“144.285. Brackets for collection of tax. —1. In order to permit sellers required to collect and report the sales tax to collect the amount required to be reported and remitted, but not to change the requirements of reporting or remitting tax or to serve as a levy of the tax, and in order to avoid fractions of pennies, the following brackets shall be applicable to all taxable transactions: (1) On sales of less than twenty-five cents no tax shall be added; (2) On sales in amounts from twenty-five cents up to and including fifty cents, one cent shall be added for taxes; * * * 2. No vendor or seller shall knowingly charge or receive from a purchaser as a sales tax any sum in excess of the sums prescribed in subdivisions (1) to (5).” We have already held in our prior opinion that under the 1961 law, no tax need be collected or remitted by the seller on transactions of less than 25 cents. The only question really remaining is whether the 1963 amendments, considered with' the act as a whole, indicate a contrary legislative intent. The legislature remained in session for several months after the decision of the Circuit Court in the prior cases.

At this point we must note various provisions of other sections of the act which we deem pertinent, as follows: Section 144. 020; “ * * * there shall be and is hereby levied and imposed and shall be collected and paid: (1) Upon every retail sale in this state of tangible personal property a tax equivalent to three per cent of the purchase price paid or charged, * *

“144.060. Purchaser to pay sales tax— penalty for refusal It shall be the duty of every person making any purchase or receiving any service upon which a tax is imposed by this chapter to pay the amount of such tax to the person making such sale or rendering such service; * *

“144.080. Seller responsible for tax— reports — tax upon sale — penalty 1. Every person receiving any payment or consideration upon the sale of property or rendering of service subject to the tax imposed by the provisions of this chapter, or required to make collection of the tax imposed by the provisions of this chapter, shall be responsible not only for the collection of the amount of the tax imposed on said sale or service, but shall, on or before the fifteenth day of the month following each calendar quarterly period of three months, make a return to the director of revenue of all taxes collected for the preceding quarter, or required to be collected for the preceding quarter, and shall remit the taxes so collected or required to be collected to the director of revenue. 2. The seller of any property or person rendering any service, subject to the tax imposed by this chapter, is directed to collect the tax from the purchaser of such property or the recipient of the service as the case may be. 3. The tax imposed by this chapter is a tax upon the sale, service or transaction and shall be collected by the person making the sale * *.” (Italics ours.)

“144.100 Returns filed with director— charge and time sales — correction of errors 1. Every person making or rendering any sales, service or transaction taxable under sections 144.010 to 144.510, except transactions provided for in section 144.070, individually or by duly authorized officer or agent, shall, on blanks designed and furnished by the director of revenue, make and file a written return with the director of revenue in the manner that he prescribes and at the times provided in sections 144.-080 and 144.090, respectively. 2. The returns shall show the amount of gross receipts from sales, services and taxable transactions by the person and the amount due thereon during and for the period covered by the return and with the return the person shall remit to the director of revenue the amount» of the tax due, including any and all moneys collected from a purchaser as sales tax.”

It is thus seen, and we so hold, that our sales tax is a transaction tax imposed upon the purchaser of tangible personal property. It is levied “upon every retail sale”; the duty to pay is upon “every person making any purchase * * * upon which a tax is imposed,” and the seller shall make a return and “shall remit the taxes so collected or required to be collected * * We may note here that our first sales tax was expressly enacted as a gross receipts tax imposed for the privilege of engaging in the business of retail sales. Laws 1933-1934, Extra Session, p. 155 et seq. This law was repealed in 1935 and replaced by a tax “upon every retail sale of tangible personal property * * Laws 1935, p. 411 et seq. It is significant to note that Missouri, after a trial of approximately one year, thus abandoned the idea of a privilege tax on gross receipts; it is also significant that the requirement on the seller to collect and remit was expressed in 1935 in almost the same language as it is expressed today, i. e., “ * * * and shall remit the taxes so collected or required to be collected to the State Auditor.” Laws 1935, p. 417, Section 5. The substantive law has remained the same until the institution of the bracket system in 1961.

In view of our concurrent opinion in the prior cases, the narrow question remaining is whether or not the change in § 144.285 made in 1963 (as quoted), when considered with the remainder of the law, requires those who sell goods at less than 25 cents to remit a 3% tax on the receipts from such sales. As already indicated, the trial court found and concluded: that the law as amended imposed a transaction tax, and that the primary duty to pay it was upon the purchaser; that the law did not levy a tax upon a seller’s gross receipts; that the duty of the seller was to remit the tax collected or required to he collected; that on sales of less than 25 cents there was no tax due, and the seller was neither required to collect nor remit any tax thereon. The Court enjoined the defendant from requiring plaintiffs to pay on any different basis. We sustained a motion requesting that this cause be heard by the Court in Banc, and we heard arguments concurrently with those in the prior cases.

The evidence showed that all of the plaintiffs (except Coca Cola) operated vending machines which dispensed articles at values both lesser and greater than 25 cents, in fact, from 5 cents to more than 50 cents; most of them operated single machines which dispensed items with values both above and below that figure. Representatives of the various plaintiffs testified to the percentages of their respective sales (for a given quarter or two quarters) which involved transactions of less than 25 cents; these figures varied from 100% in the case of Coca Cola Bottling Company, down to 35% for Apex Sales Company; the majority was from 51.1% to 78%. The evidence further showed: that it was impossible to purchase more than one item at a time from any machine, and that when any one item had been selected and delivered, it was impossible to return it; that no vending machine has been devised which is able to collect the sales tax. It was admitted that there is no way to tell whether one purchaser buys more than one item on the same occasion by successive transactions. The methods of computing the percentage of sales (or sales volume) under 25 cents varied somewhat; on machines which sold only items for 25 cents or more all receipts were accounted for; on machines selling only for less than 25 cents the tax was paid under protest; on machines handling both types of sales, computations were made of the inventories consumed on each type of product, and records kept of the collections from each machine; one or more plaintiffs apparently used repeated spot checks of the different inventories and collections in order to arrive at the percentage of sales under 25 cents. Some of the plaintiffs also operated cafeterias in which items were manually selected and a tax collected in the aggregate on the customer’s tray. That matter is not really involved here.

The State argues: that the tax is imposed at 3% on all retail sales, and that sub-paragraph 1(1) of the bracket section does not grant an exemption on sales under 25 cents; that the bracket system was adopted merely to permit an averaging in the collection and remittance of the tax and to help alleviate an “insoluble” problem in collection; that the intent of the act is to require the seller to remit 3% on his total gross receipts and to permit a reimbursement, as near as may be, through the averaging process of the bracket system; that the seller’s remittance is not to be limited to what he is able to collect, and that these plaintiffs are not entitled to any preferential treatment because they may have chosen a business involving so large a percentage of small sales; that the inability to collect the tax on sales under 25 cents should not and does not create an exemption; that plaintiffs have not borne the burden of showing accurately the number of sales each has made under 25 cents in each respective period; and, finally, that, as construed by the trial court, the act would be rendered unconstitutional as an arbitrary classification, because it would grant a “meaningless exemption,” and place varying rates upon different “individuals” (presumably purchasers). We note that in the prior cases the State stipulated as to the correctness of the dollar volume of transactions which each of the plaintiffs claimed represented its sales transactions under 25 cents.

The State relies upon the same cases which it urged in the prior cases. Despite our previous consideration of those cases, we have reconsidered all of them here. Those which directly involve sales taxes are based upon statutes materially different from ours. The case of Calvert v. Canteen Company, Tex.Sup., 371 S.W.2d 556, was discussed at length and expressly distinguished in our prior opinion. Some of the others involve statutes which expressly imposed levies upon gross receipts with the seller made responsible for the full remittance (White v. State of Washington, 49 Wash.2d 716, 306 P.2d 230; F. W. Woolworth Company v. Gray, 77 N.D. 757, 46 N.W.2d 295) ; others were specifically held to be imposed as privilege taxes upon the seller for the right to engage in the business of retail sales. (Piedmont Canteen Service, Inc. v. Johnson, Com. of Revenue, 256 N.C. 155,123 S.E.2d 582,91 A.L.R.2d 1127; State v. Woods, 242 Ala. 184, 5 So.2d 732; Stevens Enterprises, Inc. v. State Comm, of Revenue, 179 Kan. 696, 298 P.2d 326; W.S. Libbey Company v. Johnson, 148 Me. 410, 94 A.2d 907; Smoky Mountain Canteen Company v. Kizer, 193 Tenn. 598, 247 S.W.2d 69; Roth Drugs, Inc. v. Johnson, 13 Cal. App.2d 720, 57 P.2d 1022.) It is difficult for us to understand why the State cites such cases, except, perhaps, for the generalized discussions in some concerning the “averaging” of the impact of the tax by the use of a bracket system. None of the cases cited are persuasive in the present situation, and we return to an analysis of our own act, keeping in mind that we have concurrently held that, under the 1961 law, the seller need pay no tax on sales transactions of less than 25 cents.

No substantive change has since been made in any respect material here, except in the preamble of the bracket Section, 144.-285. The imposition (§ 144.020) is “Upon every retail sale in this state of tangible personal property * * * ”; it is made the duty of the purchaser to “pay the amount of such tax * * * ” (§ 144.060) ; the seller shall make returns (§ 144.080) of all taxes collected “or required to be collected” and shall remit "the taxes so collected or required to be collected * * * ”; the seller (§ 144.080) “ * * * of any property * * i subject to the tax imposed by sections 144.010 to 144.510, [which is for our purposes the whole of the chapter applicable to sales taxes] is directed to collect the tax from the purchaser * * * ” ; also, “The tax imposed by sections 144.010 to 144.510 is a tax upon the sale, service or transaction * * Section 144.100 (unchanged) requires every seller subject to the tax to file written returns in which1 he shall “show the amount of gross receipts from sales, services and taxable transactions * * * and the amount due thereon * * and * * * remit * * * the amount of the tax due, including any and all moneys collected from a purchaser as sales tax.” We especially note: that the seller is required to remit the taxes "collected or required to be collected"; that he is forbidden by § 144.285(2) from receiving as a tax any sum in excess of that permitted in the stated brackets; and that no tax whatever is imposed upon the seller by any provision of the act.

For clarity, we repeat here the preambles to the respective bracket Sections, 144.285: (1961) “Brackets for collection of tax. —1. Notwithstanding the rate of taxes imposed by this chapter, and in order to avoid fractions of pennies, the following brackets shall be applicable to all two per cent taxable transactions: * * *.” (1963) “Brackets for collection of tax. — 1. In order to permit sellers required to collect and report the sales tax to collect the amount required to be reported and remitted, but not to change the requirements of reporting or remitting tax or to serve as a levy of the tax, and in order to avoid fractions of pennies, the following brackets shall be applicable to all taxable transactions; * Jji * »

The 1963 section thus expresses the intent to permit sellers to collect the amount of tax required to be reported and remitted, but without changing the previous requirements of reporting and remitting. As we read the act, in general and specifically, sellers are only required to remit the taxes collected or required to be collected. The present bracket section (as did the 1961 section) expressly provides that "no tax shall be added” on sales of less than 25 cents; the section is made applicable "to all taxable transactions.” We hold that this section (as we have likewise held regarding the 1961 section) did and does modify § 144.020 to the extent that it exempts sales of less than 25 cents from the tax. In view of the substantive wording and effect of the various sections, we hold that the omission of the words of the 1961 preamble, “Notwithstanding the rate of taxes imposed by this chapter * * is not decisive; the same result follows from our construction of the act as a whole without that wording. If the legislature intended by the 1963 Amendment to impose a tax of 3% on the full gross receipts of a seller, it has failed to do so by any reasonable construction of the wording used. In passing, we note again that Missouri started with a gross receipts tax, but abandoned it almost immediately.

The State complains bitterly about the supposed impossibility in the collection of such taxes from the plaintiffs except upon a gross receipts basis. The Sales Tax Supervisor seems to have admitted on the stand that such collection, though difficult, would not be impossible. However, this Court is merely deciding the legal issue involved and, while we are not unconcerned with the administration of the law, our decision may not be controlled by the supposed difficulties inherent in it The evidence here indicates that these plaintiffs, and presumably all others in a like situation, can, by careful analysis and supervision, separate and classify their sales volumes so that a tax may be fairly and accurately paid. Such practices will continue to be subject to the scrutiny of the State, and we feel confident that it will exercise such supervision as will assure it of receiving tax payments in compliance with this opinion. We need not be concerned with the possible number of different purchases made by one purchaser on one occasion, for we are convinced that each purchase from a vending machine constitutes a separate transaction.

The argument made in passing that, as so construed, the bracket system would be unconstitutional, requires little discussion. This suggestion, renewed by reference to the State’s brief in the prior cases, is apparently based upon the claim that the act would thus establish an arbitrary classification and fix varying rates upon different individuals. The cited cases do not establish' any such proposition. The tax discussed in Stewart Dry Goods Company v. Lewis, 294 U.S. 550, 55 S.Ct. 525, 79 L.Ed. 1054 was a gross sales tax imposed upon merchants for the privilege of doing business, but upon a clearly discriminatory basis. If our legislature chooses to start the imposition of its sales tax at 25 cents, both as to the functions of purchasers and sellers, it is well within the bounds of its discretion to do so. There is no arbitrary classification, for all in the same situation are treated alike. The Court is making no distinction here in favor of vending machine operators, for it is dealing with' all retail sales transactions of less than 25 cents.

Lastly, the State argues at some length that the trial court exceeded its allotted discretion, if not indeed its jurisdiction, in enjoining defendant from the collection of the taxes which it claims are due. It will be wholly unnecessary to go into this question. We have held here that the State had and has no right to collect those taxes which the Court enjoined it from collecting. Under these circumstances, any possible excess of authority on the part of the trial court has become moot.

This opinion is being filed as soon as reasonably possible after the argument of the case in this Court in order to give the legislature an opportunity to take further action, if it so desires, at the current session. We note that the costs were not adjudged against the State, as indeed they should not have been.

The judgment is affirmed.

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

DALTON, J., not sitting.


author: STONE, Judge.

text:
    Dale ALCORN and Delmar Alcorn, Plaintiffs-Appellants, v. Handy MOORE and Bill Moore, Defendants-Respondents.
    No. 8365.
    Springfield Court of Appeals. Missouri.
    Jan. 22, 1965.

      Dwight Crader, Sikeston, for plaintiffs-appellants.
    Manuel Drumm, Sikeston, for defendants-respondents.
   STONE, Judge.

In this action at law, plaintiffs, Dale Alcorn and Delmar Alcorn, as licensed real estate brokers sought a commission of $2,500 for the alleged production of a prospect ready, able and willing to purchase a farm in Mississippi County, Missouri (hereinafter referred to as the spillway farm), owned by defendants, Handy Moore and Bill Moore. The jury being unable to agree upon a verdict, a mistrial was declared; and, by after-trial stipulation signed by all parties and interested counsel, it was agreed that the evidence upon trial should be transcribed and that the cause should be submitted to the trial judge for determination on that transcript with the subsequent judgment to “have full force and effect as if said cause was tried again before the court in its entirety.” Accordingly, on this appeal by plaintiffs from the judgment thereafter entered in favor of defendants, the case comes to us as a jury-waived, court-tried action.

“Around the last of November” 1962, Dub Crutcher, a licensed real estate broker in Stoddard County, Missouri, was seeking to locate a purchaser for a 300-acre farm in Scott County owned by Alton Evans (hereinafter referred to as the Evans farm). Evans had told Crutcher that “the^ Moore boys [defendants] were interested” in the Evans farm but that they wanted him (Evans) “to taire in” the spillway farm which he was unwilling to do. Reasoning that the Evans farm could be sold to defendants if a satisfactory sale of their spillway farm could be made, Crutcher talked with the Alcorn brothers (plaintiffs) who did more business in Mississippi County than he (Crutcher) did, and in turn Dale Alcorn contacted defendants and arranged for a meeting at plaintiffs’ office in Sikeston. At that meeting, defendants frankly expressed their interest in acquiring the Evans farm (then priced at $127,500), which had “a common border [boundary] for a mile” with a 300-acre farm already owned by them, but emphasized their financial inability to do so unless they could realize $100,000 net from sale of the spillway farm. The end result of the ensuing discussion was that plaintiffs were given oral authorization to list the spillway farm for sale at $102,500, of which $100,000 would be paid to defendants and $2,500 would be retained by plaintiffs as their commission.

Defendants suggested that Bertie Hale, who had cultivated the spillway farm since 1947, might be able to purchase it, and that, if he wanted the farm, they would like for him to have it. Hale indeed was interested ; and, within a few days, he and Lloyd Hall, a nearby landowner, entered into a written contract to purchase the farm for $102,500 conditioned, however, upon their ability to finance the purchase by obtaining a loan of $85,000 to be secured by a deed of trust covering not only the spillway farm but also a 70-acre tract owned by Hale and an 80-acre tract owned by Hall. With plaintiffs handling the details, Hale and Hall made a loan application to a major life insurance company, and loan representatives of that company interviewed the applicants and appraised the tendered security.

While this loan application was being processed and considered, W. C. Bryant, a landowner in the same area, heard that the spillway farm was for sale and called defendant Handy Moore, who referred him to plaintiffs. When shortly thereafter he talked with plaintiff Dale Alcorn, Bryant said (so Dale testified) that “if there are 254 acres in that [spillway] farm I’ll give $102,500 for it.” (All emphasis herein is ■ours.) With a confidence perhaps inspired by the expectation of collecting a “finder’s fee” of one per cent if the loan were made, plaintiffs were so sure that the loan application of Hale and Hall would be approved that they informed Bryant, and likewise told defendants, that the farm “was sold” to Hale and Hall. But “there is many a slip’ twixt the cup and the lip,” and the loan was not made because applicant Hall was unwilling to include more land (in addition to the 80-acre tract originally contemplated) in the deed of trust securing the loan. Consequently, the spillway farm was not sold to Hale and Hall, and plaintiffs here concede that “it is undisputed that Bertie Hale and Lloyd Hall were unable to complete the contemplated purchase.”

Defendant Handy said that he first heard that the sale to Hale and Hall would not he consummated when Hale told him (Handy) on the evening of December 17, 1962, that “the loan hadn’t gone through and * * * the deal was off.” Surprised by this word coming after the assurances plaintiffs had given him, defendant Handy immediately called plaintiff Dale, who confirmed what Hale had said and added “that he [Dale] sure was sorry about it.” At the same time, plaintiff Dale stated (so defendant Handy insisted upon trial) that “he didn’t have any other buyer for the farm now [then].”

Being anxious to sell the spillway farm so that defendants would be in position to acquire the Evans farm, defendant Handy “called a number of people that night [December 17]” when he learned that plaintiffs had not sold the spillway farm. He attempted to contact, but could not locate, W. C. Bryant. Among those with whom defendant Handy did talk that evening were “the Barker boys” (Jackie and Kelly H.), also landowners in the same area. After conferring with defendants personally on December 18, the Barkers agreed on December 19 to purchase the spillway farm for $100,000, and title to the farm thereafter was conveyed to them on February 27, 1963. The undisputed evidence was that plaintiffs had never contacted the Barkers, did not produce them as prospects, and had nothing to do with their purchase of the spillway farm.

On December 19, 1962, defendants’ attorney at Sikeston, dealing directly with Evans, contracted to purchase the Evans farm, title to which subsequently was conveyed to defendants on January 18, 1963. Although (so defendant Handy testified) Evans had “told [defendants] that nobody had his farm listed for sale,” defendants agreed to “participate” if Evans paid a broker’s commission; and defendants later contributed $900 to Evans, as one-half of the sum paid by him in settlement of a suit instituted by Dub Crutcher, Dale Alcorn and Delmar Alcorn to recover a commission for sale of the Evans farm.

In a conference with their attorney on December 19, 1962, defendants authorized and instructed him to notify plaintiffs “that their services would no longer be needed.” Being unable to locate plaintiffs at the moment, defendants’ attorney that day mailed to plaintiff Delmar a letter (admittedly received by the addressee) which expressed regret that the proposed sale of • the spillway farm to Hale and Hall could not be consummated, recited that “you apparently have no buyer available as of this date,” and notified plaintiffs that “my clients [defendants] herewith withdraw the property from your hands.” After defendants’ attorney and defendant Handy, with their wives, had dinner in Cape Girar-deau on the evening of December 19, the attorney (at Handy’s suggestion) completed a person-to-person long distance telephone call to plaintiff Dale, in the course of which the attorney “asked him if he had a purchaser for the farm in the spillway, which at the time he said he did not,” and then told him that plaintiffs’ agency was terminated. When plaintiff Dale was asked whether he had received this long distance telephone call, his memory (otherwise excellent) failed him in this fashion: “I sure can’t remember it if I did. * * * I thought I would but I sure don’t remember. The [spillway] farm was already sold. I don’t know that a telephone call would do any good.” That the person-to-person call was placed and completed on the evening of December 19 was confirmed by records of the Southwestern Bell Telephone Company. As to what was said in the course of that telephone conversation, the trial court reasonably could have accepted the positive declarations of defendants’ attorney who, although trial counsel, testified without objection. See Canons of Ethics, V.A.M.R. Rule 4.19.

Relying upon the general principle that brokers earn their commission when they produce a party ready, able and willing to deal on terms prescribed by or acceptable to their principal [Staples v. O’Reilly, Mo. App., 288 S.W.2d 670, 675(4); Sargent v. Wekenman, Mo.App., 374 S.W.2d 635, 639(6) ; Weber v. Larkin, Mo.App., 380 S.W.2d 956, 958(1)], plaintiffs’ theory of the case is that they produced such party in the person of W. C. Bryant. It may be conceded that Bryant was an “able” prospect in that he had the financial ability to have financed the purchase of the spillway farm. Sargent, supra, 374 S.W.2d at 639 (7); Weber, supra, 380 S.W.2d at 958(2); 12 C.J.S. Brokers § 85 b, 1. c. 193. But the contention that he also was “ready” and “willing” to deal on terms prescribed by or acceptable to defendants requires closer attention.

Returning to the record, we recall that, when Bryant talked with plaintiff Dale (at the suggestion of defendant Handy) and was told that the spillway farm “was sold” to Hale and Hall, Bryant’s statement (as reported upon trial by plaintiff Dale) was that "if there are 254 acres in that [spillway] farm I’ll give $102,500 for it.” Plaintiffs here assert that “the undisputed evidence” was that the spillway farm contained 254 acres, pointing specifically to the testimony of witness Turner, a loan representative of the insurance company which rejected the Hale-Hall loan application. However, Turner’s testimony as to acreage was by no means so positive and reassuring. It is true that “at a later date" (not definitely fixed in the transcript) Turner eventually came around to the personal belief that the total acreage in the spillway farm was “approximately 253 or 54.” But it appears that this was after the Hale-Hall loan application had been rejected. For, in earlier efforts to verify the acreage and legal description in the loan application by examination of ASC (Agricultural Stabilization and Conservation Service) maps and records, Turner had found that “their acreage was so much short” and there was such “a difference in the legal description” that he then “thought there was some discrepancy there”; and, when plaintiffs’' counsel inquired “did you get that cleared up,” Turner answered “not in connection with this [loan] application.” Furthermore, Turner’s testimony contained references to what examining counsel called “two disputed tracts” and Turner described as “the disputed acres * * * partially lying in woods” and “in the bayou” and not enclosed with fences, which said tracts contained “approximately 10 acres” and were not covered by defendants’ abstract. And, when Turner discussed with Hale, who had cultivated the spillway farm for 15 years, "what was included in the farm, the only thing that he [Hale] was fairly positive on was the number of cultivated acres” — a "number” which counsel did not undertake to elicit and Turner did not see fit to disclose. The transcript does not indicate that defendants ever made a more definite representation as to acreage than that the spillway farm contained “254 acres, more or less.”

Of more significance upon this inquiry as to whether Bryant was a “ready” and “willing” buyer was his own testimony. After his conversation with plaintiff Dale in which he (Bryant) had been told that the spillway farm “was sold” to Hale and Hall, Bryant nevertheless had sought further information as to acreage by turning to the same maps and records that Turner also had examined, namely, those in the ASC office, with the result that (in Bryant’s words) “the best we could determine it [the acreage] was 231." Bryant’s testimony plainly shows that, after his investigation at the ASC office, he had no reason to believe, and did not believe, that the spillway farm actually contained more than 231 acres. Even after the spillway farm had been sold to the Barkers, Bryant (not yet apprised of that sale) told defendant Handy, when he happened to see him in East Prairie, that “I [Bryant] couldn’t find but 231 acres in the farm.”

Bryant testified that, if he had been asked to contract for purchase of the spillway farm, he would have insisted upon a contractual provision limiting the permissible variation from 254 acres; that he would not have objected if the acreage had “just varied three or four acres”; that, however, “when you get land up around $400 an acre you have almost got to get pretty close to what you pay for”; and that, after his investigation indicated that the spillway farm actually contained about 231 acres, he certainly would not have paid $102,500 for it. When the blunt interrogation was put to Bryant, “on the knowledge you had at that time after Hále [and Hall] had been turned dowit [on their loan application] you weren’t ready and willing to pay $102,500, were you,” his unequivocal response was “no.” In further confirmation of this, Bryant testified that, after the Hale-Hall loan application had been rejected, he and Wendell Choate had agreed to “go partners” and offer to buy the spillway farm “if they [defendants] would reduce the price according to the acres between 254 and what they could show us was in it." Both Bryant and Choate believing that the spillway farm contained about 231 acres, “the way we had it figured [the sale price] would be around $92,000.”

Whether a broker has become entitled to a commission depends upon the terms of his contract [Spitcaufsky v. Guignon, Mo., 321 S.W.2d 481, 487(1) ; Wolcott v. Moser, 364 Mo. 443, 452, 262 S.W.2d 620, 625(4); Bowman v. Rahmoeller, 331 Mo. 868, 879, 55 S.W.2d 453, 458] and, of course, the owners may, by such contract, condition their liability for payment of a commission upon prescribed contingencies or events [Tant v. Gee, 348 Mo. 633, 638, 154 S.W.2d 745, 747(3); Staples, supra, 288 S.W.2d at 676(9); Clarkson v. Standard Brass Mfg. Co., 237 Mo.App. 1018, 1031, 170 S.W.2d 407, 414(3)], such as production of a prospective purchaser ready, able and willing to pay a stated price for the property. Rosenblatt v. Multin, Mo. App., 222 S.W.2d 587, 592; Hughes & Thurman v. Dodd, 164 Mo.App. 454, 459, 146 S.W. 446, 447. In the instant case, there is no reasonable room for doubt but that the agreement between plaintiffs and defendants was such that payment of a commission of $2,500 to plaintiffs was conditioned on sale of the spillway farm for $102,500 or production of a prospect ready, able and willing to purchase for that sum. Martin v. Mercantile Trust Co., Mo., 293 S.W.2d 319, 326(5), and cases there cited. In fact, plaintiffs do not contend to the contrary but rather assert, as we have said, that they did produce, in the person of W. C. Bryant, a prospect ready, able and willing to purchase for $102,500. But, viewed in the cold light of realism rather than in the thick fog of wishful thinking, Bryant’s own testimony did not present him as “ready” and “willing” to pay $102,500 for the spillway farm after the Hale-Hall loan application had been rejected; and, prior to that time, plaintiffs admittedly had informed all inquirers that the farm “was sold” to Hale and Hall. Furthermore, plaintiff Dale admitted that, after the single occasion on which Bryant had been in plaintiffs’ office and had been sent away with the word that the spillway farm “was sold” to Hale and Hall, plaintiffs had not contacted Bryant again.

Although not presented in their only “point relied on” [V.A.M.R. Rule 83.05(e)], plaintiffs correctly state, in the “argument” section of their brief, that an owner cannot defeat his broker’s right to a commission if he (the owner) is guilty of fraud or bad faith which prevents the broker’s performance in accordance with his contract. In each of the cases cited to this principle [Bowman, supra, 331 Mo. at 879, 55 S.W.2d at 458(7); Feinstein v. Glick, Mo.App., 116 S.W.2d 141, 144(1)], the owners had dealt directly with parties who first had been presented to the owners by the plaintiff broker. In the instant case, defendants dealt with the Barkers, who had never been contacted by plaintiffs and were not presented by them. Instant plaintiffs’ emphasis here is upon defendants’ alleged want of good faith in dealing directly with the owner in their purchase of the Evans farm. But this is an action at law, on the oral agreement between plaintiffs and defendants, for a commission for sale of the spillzvay farm; and, regardless of whether defendants’ conduct in connection with their purchase of the Evans farm evidenced “something less than good faith” (a question not here relevant and therefore not determined) such conduct certainly would not dictate a finding that defendants, in their sale of the spillway farm to the Barkers, were guilty of fraud or bad faith which prevented plaintiffs’ performance as brokers.

Plaintiffs’ contract neither granted an exclusive right to sell nor continued in effect for a fixed term. In the circumstances of the instant case, the applicable general principles are that, where a broker has not been given an exclusive right to sell, the owners may, without incurring liability to the broker, sell to a purchaser not produced by the broker, if such sale be made without the aid of a broker and before he has procured a ready, able and willing purchaser and has given notice thereof to the owners [Byers Bros. Real Estate & Ins. Agency, Inc. v. Campbell, Mo.App., 329 S.W.2d 393, 396(1); Cook v. Salisbury, Mo.App., 225 S.W. 112, 113(1); 12 C.J.S. Brokers § 75, p. 166; 12 Am.Jur.2d, Brokers, § 224, p. 965; annotation 88 A.L.R.2d 936, 941(3)] and that, where a broker’s agency is not for a fixed term or duration, it may be revoked and terminated by either party in good faith after the lapse of a reasonable time and upon notice to the other party. Evans v. Jacobson, Mo.App., 269 S.W.2d 156, 160(2); LaForce v. Washington University, 106 Mo.App. 517, 523-524(1), 81 S.W. 209, 211; George B. Loving Co. v. Hesperian Cattle Co., 176 Mo. 330, 351(1), 75 S.W. 1095, 1101. Recalling that both defendant Handy and defendants’ attorney testified positively that, after the Hale-Hall loan application had been rejected, plaintiff Dale had said that he had no ready, able and willing purchaser at that time, and mindful that plaintiffs’ agency as brokers then had continued for about three weeks during which defendants had in no wise hindered or interfered with plaintiffs’ performance [Evans, supra, 269 S.W.2d at 160], we are unwilling to hold, contrary to the judgment nisi, that defendants acted unreasonably or in bad faith in terminating the non-exclusive agency.

Although, in this court-tried action, it is our duty to “review the case upon both the law and the evidence as in suits of an equitable nature” [V.A.M.R. Rule 73.01(d) ; V.A.M.S. § 510.310(4)], the same antecedent statute and superseding rule direct that “[t]he judgment shall not he set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.” Coen v. Eldridge, Mo., 347 S.W.2d 207, 210(4) ; Beckemeier v. Baessler, Mo., 270 S.W.2d 782, 783(1). With appropriate respect for these basic principles of appellate review, we think the conclusion inescapable that the judgment for defendants should be affirmed. It is so ordered.

RUARK, P. J., and HOGAN, J., concur.


author: PLEAS JONES, Special Commissioner.

text:
    Helen Futrell LADD et al., Appellants, v. Katie Martin OVERCAST et al., Appellees.
    Court of Appeals of Kentucky.
    Feb. 12, 1965.
    Joseph S. Freeland, Paducah, for appellants.
    Waylon Rayburn, Murray, for appellees.
   PLEAS JONES, Special Commissioner.

This is an appeal from a judgment of the Christian Circuit Court dismissing appellants’ complaint upon the ground that their claim was barred by limitation.

The case presents only one question to be determined by the Court: Does KRS 413.-210 apply to an action brought by creditors of a decedent against his devisees only, where there is no personal representative at the time the action is commenced?

For a determination of this question, we will briefly review the facts:

Charles E. Ladd was indebted to T. O. Turner in the sum of $12,564.18. On April 23, 1954, Ladd conveyed to Turner approximately three hundred acres of land in Christian County, together with certain farm machinery and equipment. This conveyance was made to Turner in consideration of Turner’s written agreement that when he should sell the property, he would, after payment of his indebtedness, pay Ladd’s “family” any surplus derived from such sale. On May 22, 1954, Turner sold the real estate and personal property. On February 1, 1955, Turner died testate, and his will was duly probated. The executors named in the will proceeded to distribute the assets of the estate of Turner, made final settlement with the Calloway County Court and were discharged from further duties and liabilities under the trust.

On August 29, 1963, appellants, being the members of the “family” of Charles E. Ladd, filed suit in the Christian Circuit Court demanding judgment against appel-lees, who were members of the family and devisees of Turner, in the total sum of $11,583.47, plus interest on that amount to the date Turner received the money. Appellants contend that this sum represents the difference between the amount received by Turner when he sold the real estate and personal property and the amount of Ladd’s indebtedness to Turner. The trial court held that appellants’ suit was barred by the statute of limitations, and dismissed the complaint.

The statute relied upon by appellees and by the trial court in dismissing appellants’ complaint is KRS 413.210, which is as follows :

“No action upon a cause which accrued against a deceased person in his lifetime shall, when his estate has been distributed and divided, be brought against his heirs or devisees jointly with his personal representative after the expiration of seven years from his death.”

Appellants contend that KRS 413.210 does not apply to actions in which the personal representative is not joined as a defendant. In this case, the personal representatives were not joined because they had made final settlement and had been discharged long before this action was commenced.

Appellants also insist that the same considerations do not apply to actions brought against the heirs or devisees of Turner, since they have .received .the assets of the decedent and ought to remain subject to his liabilities, but we do not agree yrith appellants’ contention. This Court, in Yeiser v. Webb, 300 Ky. 26, 187 S.W.2d 831, clearly set forth its interpretation of KRS 413.210 in a discussion of KRS 396.070, when it said:

“It is provided in KRS 396.070 that heirs or devisees are chargeable with the liabilities of their decedents to the extent of assets received from them, and a creditor by suit in equity against the heirs or devisees may be adjudged a lien on any specific property descended or devised. Such an action must be brought within seven years after the death of the testator or of the decedent, KRS 413.210.”

We cannot perceive that the Legislature intended KRS 413.210 to apply only to those actions brought against a decedent’s “heirs or devisees jointly with his personal representative after the expiration of seven years from his death,” when the personal representatives have fulfilled their trust before the action is commenced. When KRS 413.210 is read in connection with KRS 413.200 and KRS 413.220(1), (2), and (3), it is obvious that the Legislature intended to require creditors to bring their actions on claims against the heirs and devisees of a decedent jointly with decedent’s personal representative, or against his heirs and devisees alone, within seven years of the death, if his personal representative has made final distribution and been discharged.

Appellants’ cause of action accrued during the lifetime of Turner on May 22, 1954, and an action could have been commenced from that date until the date of his death on February 1, 1955. An action against his personal representatives could have been brought from February 4, 1955, the date of their appointment, until they filed their final accounting and were discharged from their trust. Appellants could have commenced their action against the beneficiaries and devisees of the estate of Turner from the date of his death, February 1, 1955, until January 31, 1962, inclusive, within the seven year limitation. If the action had been filed before the personal representatives had made their final report and accounting and were discharged, they could have been joined as parties defendant, along with the heirs and devisees. They were not. The action was not commenced until August 29, 1963, which was 9 years, 3 months and 7 days from the date the action accrued, and it is therefore barred by limitations. KRS 413.210.

The judgment is affirmed.