author: BRADY, Commissioner.

text:
    PRICE BROTHERS LITHOGRAPHIC COMPANY, a Corporation, Plaintiff-Appellant, v. AMERICAN PACKING COMPANY, a Corporation, Defendant-Respondent.
    No. 31348.
    St. Louis Court of Appeals. Missouri.
    Oct. 15, 1963.
    Rehearing Denied Nov. 29, 1963.

      Schuchat, Cook & Werner, Charles A. Werner, St. Louis, for appellant.
    Grcensfelder, Hemker & Wiese, Mark R. Gale, St. Louis, for respondent.
   BRADY, Commissioner.

The parties will be referred to by their designation in the trial court. Plaintiff’s action sought recovery of the unpaid balance due for certain labels stored in plaintiff’s warehouse which the plaintiff had printed pursuant to a sales contract with the defendant. The defendant denied that any money was due the plaintiff and set up certain affirmative defenses which will be specifically referred to later. The defendant’s counterclaim sought recovery of the money paid for the labels already delivered, the cost of tests performed at defendant’s plant, and damages. The jury found for the plain-' tiff in the sum of $5,365.00 for the unpaid balance due on the undelivered labels, and for the defendant in the amount of $120.00 representing the cost of 3 tests made at the plant. Judgment was entered accordingly. Defendant’s timely motion for new trial was sustained by the trial court on the ground that it had erred in giving plaintiff’s verdict-directing instruction 1. The issues presented by this appeal go beyond that point, however, as the defendant, being the party to whom the new trial was granted, contends the trial court erred in excluding certain testimony offered by the defendant and in admitting into evidence plaintiff’s exhibits 5 and 6. These points are contained within the motion for new trial and thus are available to defendant in this appeal as grounds to sustain the trial court’s award of a new trial. White v. St. Louis Public Service Co., 364 Mo. 111, 259 S.W.2d 795; Mo.Digest, Appeal and Error, ‘&=>854(6). There are no issues presented in this appeal arising from the verdict for the defendant for the costs of the tests.

The defendant produced “Smoky Canyon Chipped Beef” in addition to its other products. This product consists of slices of beef placed in polyethylene pouches filled with nitrogen. These pouches are then sealed and labeled with a 5i/&" x 6}i", three-color label by means of a heat sealing machine. Defendant had not experienced trouble with the labels supplied by one of plaintiff’s competitors and consideration of price was the only factor bringing about the change to plaintiff’s labels.

A brief summary of the-pleadings will be helpful toward a clear understanding of the issues. Plaintiff alleged that it printed-2,-000,000 labels pursuant to a sales contract signed by both parties and that plaintiff had fully performed its obligations under that contract. The petition then alleges demand for payment upon the defendant and the defendant’s refusal to pay. Defendant admitted the contract and its refusal to pay for the labels, but pled that it was not indebted to defendant for any sum because defendant knew exactly what purpose these labels were to be put, the machinery and process that was to be used in accomplishing that purpose, and that “ * * * defendant relied on the plaintiff to furnish labels suitable for such purpose and use; that the labels furnished by plaintiff pursuant to such order were not fit for the defendant’s purpose or for the use to be made of them by defendant, nor were they fit for the purpose or use for which labels of that kind or description were generally intended; that as part of the contract referred to in paragraph 3 of plaintiff’s petition, plaintiff impliedly warranted that said labels would be suitable for the purpose for which defendant desired the same and were to be as suitable to be used by defendant on defendant’s machinery and equipment as were the labels procured from another source which defendant was using for the same purpose at the time said order was placed and said contract was entered into; and that, in addition, as part of the contract referred to in paragraph 3 of plaintiff’s petition, plaintiff impliedly warranted that said labels would be suitable for the purpose and use for which labels of that kind and description were generally intended.” Defendant’s counterclaim alleged the payment of $133.65 for labels delivered under the contract and which defendant contended were worthless. The counterclaim also alleged plaintiff’s agreement to pay all costs incurred by defendant in- testing plaintiff’s labels in the course of defendant’s production and gave those costs at $1,500.00. The defendant also sought recovery for $1,973.46 which it alleged to be the difference in the cost of labels it had to secure to replace those furnished by plaintiff and the cost of plaintiff’s labels had those labels been suitable “ * * for defendant’s purpose and use as plaintiff had impliedly represented and warranted they would be * *

Plaintiff’s sales manager, Fisher, was contacted by a friend of his who was employed by the defendant concerning a bid from plaintiff on the printing of Smoky Canyon labels. Upon being informed of plaintiff’s interest in submitting a bid, defendant’s employee sent several sample labels and information covering them to Fisher. The next month Fisher flew to St. Louis for a meeting with the president of the defendant company. The discussion at that meeting is not of importance to the issues here involved, but at the close of the meeting Fisher was introduced to Harold Fulton, defendant’s production manager, who took him to the label inventory area to get some representative labels imprinted with the names of the various distributors of Smoky Canyon Chipped Beef. Fisher testified that, while following Fulton to this area, he walked by the production lines but did not pay particular attention to them. On the other hand, Fulton testified that he briefly explained the production operation to Fisher as they walked along.

Upon his return to plaintiff’s plant in New Jersey, Fisher had the samples given him by Fulton calibrated and ascertained that some of the labels were printed on 70 pound paper while others were printed on 80 pound paper. Fisher then telephoned the defendant’s president, Mueller, who stated he would contact the present label supplier to ascertain what weight of paper was presently being used. Fisher then wrote a letter to Mueller, the pertinent parts of which follow:

“The purpose of this letter is to confirm the conversation we had in your office with regard to Price Brothers printing and Smoky Canyon Chipped Beef labels. These labels would be printed on a 70 lb. coated two sides paper with coating that would make a complete seal with your polyethylene bag. The price of the labels would be $2.50 per M for both the blanks and the printed labels, for those we could make in multiples of 25 M and more. The price for the blanks together with the finished imprinting for those labels which are for less than 25 M would be $3.05 per M.
“Price Brothers would duplicate all existing Cheef and private labels which áre presently in existence free of engraving and plate charges and we agreed that for all new private labels we would have a flat $75 per plate charge.”

On May 13, 1960, Fisher made a second trip to defendant’s plant bringing with him some sample labels for testing. The actual number of sample labels he brought and the procedures followed to test the labels is in dispute. Fisher’s testimony was that he brought 10-12 identical sample labels which he gave to Fulton who then left the room for a few minutes; that Fulton returned with the sample labels attached to pouches filled with defendant’s product; that the pouches were permitted to cool for a moment, were then tested, and all the labels were found to have satisfactorily adhered; and that Fulton then informed Mueller that the labels adhered satisfactorily. Whereupon Mueller told defendant’s purchasing agent to prepare a purchase order for 2,-000,000 labels. On the other hand, Fulton’s testimony was that Fisher brought about 250 sample labels with him which were in stacks of about 25 labels to each stack; that he and Fisher went to the production line where the labels were tested; that some of the labels adhered well and some did not; and that the labels that did adhere were stacked in a small box which Fisher took back to his New Jersey plant. A former employee of defendant also testified that Fisher was with Fulton when the sample la■bels were tested. However, it is undisputed that after the tests the purchasing agent prepared the purchase order for the labels and gave it to Fisher personally.

Following Fisher’s return to New Jersey with the purchase order, Mueller telephoned him and informed him that the present label supplier was using 80 pound paper. Fisher then wrote Mueller the following letter:

“Just a note to bring you up to date as to the progress on the Chief labels. We have experimented with the 70# paper which we used, and, even though the samples that I brought out to you seem to run satisfactory, we have decided on the basis of the information you gave me that your present source was giving you an 80# sheet, that this perhaps would make a tighter seal and be stronger on the package after it has been shipped from your plant. Therefore, we are taking the liberty of increasing your paper from 70# to 80# at no expense to you, and we feel that this will positively give you the satisfaction which you want.
“We still feel that the 70# paper would be heavy enough, however, there can be no uncertainty with the 80# paper and we are proceeding on that basis accordingly.”

On or about June 13, 1960, plaintiff sent defendant an acknowledgment of its purchase order signed by plaintiff’s vice president. This acknowledgment incorporated the change to 80 pound paper. On July 14, 1960, defendant’s purchasing agent signed this acknowledgment and returned it to plaintiff. It did not contain any information as to the specific machines or equipment used to seal the labels nor the temperature ranges used by defendant. This signed acknowledgment is referred to in the transcript as the “sales contract” or “contract of sale” and will be so referred to herein

Plaintiff ran the 2,000,000 labels, inspected them, and placed them in the warehouse to await shipping instructions from" defendant. In August of 1960, plaintiff shipped 54,000 labels pursuant to defendant’s instructions. Defendant’s testimony was that many of these labels would not adhere to the pouches filled with chipped beef. This required the defendant’s employees to open the pouches and return the chipped beef to the production line. Fulton testified that approximately 50% of the labels were not adhering to the pouches. He notified plaintiff who sent Fisher and Robert Craig, their sales representative, to St. Louis. However, on the day they .arrived at the plant, labels printed by other suppliers were being used. At Fisher’s request, some 20 of plaintiff’s labels were placed in the production line and Fisher testified that there was “ * * * some difficulty with the label 'adhering to the sealed bag.” Fisher and Craig advised defendant’s purchasing agent' that the problem was a technical one on which they did not feel qualified to give advice. They secured his permission to have a technician from the firm supplying plaintiff with paper for the labels visit the defendant’s plant. Fisher also secured 2 or 3 empty polyethylene bags which he gave to plaintiff’s production manager.

Mr. Lingo, the engineer from the paper company, visited defendant’s plant in September. He testified that during his visit Fulton took some of plaintiff’s labels and inserted them in the machines. Lingo’s testimony was that these labels adhered satisfactorily. On the other hand, Fulton insisted that on this occasion only 50% of the labels adhered satisfactorily while labels supplied by other printers and being run at the same time adhered satisfactorily. After repeated requests the defendant paid for the 54,000 labels that had been shipped in August but, although requested, it refused to give any instructions as to shipping the other labels. The defendant’s purchasing agent then wrote plaintiff terminating the sales contract and plaintiff sent defendant a bill for the labels remaining in plaintiff’s warehouse.

In the spring of 1961, plaintiff’s representative visited defendant’s plant on two occasions. What happened during the visits is in dispute. Craig, plaintiff’s sales representative, testified he was at the plant on February 27, 1961. Defendant was then running labels printed by another firm. These labels adhered very well. Plaintiff’s labels were then inserted and these also’ adhered very well for about 10 minutes. For the 10 or 15 minutes following, some of plaintiff’s labels did not adhere to the pouches. On April 5th, Craig returned to the defendant’s plant accompanied by Lingo, the paper company’s engineer. On this, occasion, both plaintiff’s labels and those printed by a competitor were being run and both adhered satisfactorily. Fulton’s testimony was that the occasion when Craig and Lingo'came to the plant the labels did not adhere satisfactorily but the labels printed by others did. He described the trouble with plaintiff’s labels as being without a pattern. As he put it, “For a period of time, possibly the first 10 minutes, they were running very fine, then all of a sudden the labels started to fall off. Not every one, but maybe one out of five, then it would get worse and then all of a sudden none would catch.”

The president of the printing company supplying labels to defendant, John Tuch-schmidt, testified that he was called to defendant’s plant in August of 1960 by Fulton,, defendant’s production manager. On this, occasion he observed that plaintiff’s labels were not adhering while labels his company had printed were.

The deposition of Mr. Dreeben was read into evidence. Dreeben was formerly a. production engineer with the manufacturer of the heat sealing machines used by defendant. His testimony was that on April 4, 1961 he conducted tests at the plant where the heat sealing machines are manufactured, using labels supplied by plaintiff’s production manager and represented to be labels printed by plaintiff and those printed' by a competitor. He used a total of approximately 25 labels in the test. The results were that both labels adhered satisfactorily and that there was no difference in the results regardless of what labels were used. Based on his test, it was his opinion that “ * * * there should be no difficulty —in adequately placing a header label of the type supplied by Price Brothers on the type bag used by American Packing Company.” His testimony was that if both labels were run through the machine at the same temperature and one adhered and one did not, then that fact could only be accounted for by differences in the paper on which the labels were printed.

Plaintiff was permitted to introduce into evidence its exhibit 5 which was a letter from the defendant’s purchasing agent requesting plaintiff to reconsider a specific condition of sale listed on the sales contract. This condition of sale required the defendant to hold plaintiff harmless from “ * * * any and all violations of Federal and/or State Food, Drug and Cosmetic Laws, Flag, Trademark and Copyright Laws, or from any subject matter required by law or prohibited by law that Buyer authorized printed or lithographed on or omitted from goods.” Plaintiff also introduced into evidence its exhibit 6 which was a follow-up letter asking plaintiff to reply to exhibit 5. Each of these exhibits was admitted into evidence over the defendant’s objection that they were neither relevant nor material to any issue in the case.

Defendant’s counsel repeatedly attempted to have Mueller, defendant’s president, testify as to conversations he had with Fisher, plaintiff’s sales representative, who negotiated the sales contract for plaintiff. Plaintiff objected to this testimony on the ground that it violated the parole evidence rule as it tended to contradict or vary the terms of the contract of sale. Paragraph 18 of that document reads as follows: “All understandings, either with Seller’s representative or Seller, are merged herein, and the same is not subject to any alteration of specifications, orally or through an agent’s act, except as approved in writing by an •officer of Seller’s company.” The objection was sustained and the defendant thereupon, made the following offer of proof:

“If the Court please, as an offer of proof, if the witness were permitted to respond to the last question addressed to him by counsel for the Defendant, the witness would state that in his conversations with Mr. Fisher Mr. Fisher informed the witness that Price Brothers would duplicate the label that American Packing Company was then using and that it would give satisfactory performance on the equipment of the Defendant and that Price Brothers was an experienced company in the label business. And further, that .the price for the Price Brothers’ labels would be substantially below what American Packing Company was paying to its then supplier for the same labels.”

The transcript discloses that following this offer of proof, the court inquired of defendant’s counsel if he was offering this testimony for the purpose of impeaching Fisher’s testimony. Defendant’s counsel replied that he was not as it was his recollection that Fisher had “ * * * stated all these things in his testimony.”

The plaintiff’s verdict-directing instruction 1 required the jury to find that a representative of defendant contacted plaintiff with reference to a quote on labels to be used by defendant; that plaintiff quoted on the labels; that plaintiff submitted a label to defendant which defendant tested on its production equipment; that defendant ordered two million labels; and that after the order was placed, the defendant informed plaintiff that the labels it was presently using were printed on 80 pound paper. The instruction then reads as follows:

“3. That plaintiff thereafter prepared a written sales contract containing known, described and definite terms including quantity, description of label, price, cutting size of label, color, weight of paper, coating, terms and conditions of the contract, warehousing information and delivery information; that an agent with authority to sign said sales contract signed on behalf of the plaintiff and that an agent with authority to sign said sales contract signed on behalf of defendant; and”

The instruction then hypothesized the production of 2,200,000 labels “ * * * of the description in the sales contract”; the tender of the labels and demand of pajunent by plaintiff; and defendant’s refusal to accept or pay for any of them’ except-the one shipment of 54,000 labels. The final paragraph of that instruction follows:

“5. .That if you so find from the weight,of' credible evidence the aforementioned facts, then you will find in favor of the plaintiff, and it will be your duty to return a verdict for the plaintiff and’against the defendant and fix damages as per instruction 6.”

• As stated at the beginning of this opinion, the .defendant urges .three reasons why the trial court’s order granting defendant a new trial should be affirmed. It contends that the trial court committed prejudicial error in the giving of instruction 1, in the admission of exhibits 5 and 6, and in sustaining plaintiff’s objection to Mueller’s testimony concerning his 'conversations with Fisher.

The defendant attacks instruction 1 upon 3 grounds. It contends the instruction ignores defendant’s defense of implied warranty ; that it is in conflict with defendant’s verdict-directing instruction 3; and that the giving of this instruction constituted reversible error due to the use of the phrase “the weight of credible evidence.” The argument advanced to support defendant’s contention that .instruction 1 wholly ignores the defense of implied warranty is that this instruction does not reach the issue of whether there was an implied warranty that plaintiff’s labels would adhere to the poly-ethelene bags used by defendant and whether- the labels did, in fact, adhere. The result, defendant contends, is that the jury was led to believe that plaintiff was entitled to a’ verdict even though it impliedly Warranted the labels would be reasonably suitable for defendant’s purpose and even though these labels were not, in fact, suitable. We cannot agree.

The plaintiff relies upon the case of Interstate Folding Box Co. v. Hodge Chile Co., Mo.App., 334 S.W.2d 408, where this court at- [1] and [2] stated the doctrine of implied warranty. At [5] on page 414 of 334 S.W.2d it was held that “The availability "of an implied' warranty of fitness depends on the facts showing that the buyer relied upon the skill, judgment and experience of the seller to select an article suitable for the buyer’s needs. 46 Am.Jur., Sales, Sec. 348, pp. 532, 533; 90 A.L.R. 411.” ’This court also held there can be no implied war ranty where either of two factual situations is shown by the evidence to exist since the presence of either factual situation necessarily negates reliance by the buyer upon the seller’s skill, judgment and experience. The first of these was where the buyer “ * * * makes an independent examination of the product and tests the product in order to determine its fitness for the intended use, there can be no implied warranty of fitness for a particular purpose. * * * ” Interstate Folding Box Co. v. Hodge Chile Co., supra, 334 S.W.2d 1. c. 414[3, 4], The defendant in the case at bar hastens to distinguish that case on the ground that in the instant case Fisher expressly acknowledged that none of the labels printed on the 80 pound paper were ever sent to the defendant for testing. In short, the fact is that in the instant case the labels tested were not the labels plaintiff furnished the defendant and for which it seeks payment. For this reason, defendant urges that in the instant case it cannot be held to have conducted such tests as would prevent reliance upon the seller’s skill, judgment and experience. We agree. However, the defendant’s argument leaves untouched the other factual situation which this court has held would prevent a showing of reliance upon an implied warranty of’fitness and, as plaintiff contends, it is upon the existence of that -factuál''situation-the-plaintiff bases its'attack upon the defense of implied warranty. In Interstate Folding Box Co. v. Hodge Chile Co., supra, 334 S.W.2d 1. c. 415[7], this court held:

“There is- another rule which bars defendant’s reliance on an implied warranty of fitness and it is,-that where a known, described, and definite article is ordered of a manufacturer, although it is stated by the purchaser to be required for a particular purpose, still, if the known, described, and definite thing be actually supplied, there is no warranty that it shall'answer the particular purpose intended by the buyer. (Citing cases.)”

It is obvious that paragraph 3 of plaintiff’s verdict-directing instruction 1 was drawn with the above-quoted ruling of this court clearly in mind. It is equally clear that paragraph 3 of instruction 1 hypothesizes the essential elements of a rule of law which this court has held will prevent reliance upon a theory of implied warranty. There is no contention that paragraph 3 of this instruction is not supported by the facts. There was never any dispute but that the requirements stated on the sales contract were fully complied with and that the defendant got the specific label described on that contract. That being so, it cannot be said that plaintiff ignored the issue of implied warranty. To the contrary, plaintiff’s instruction hypothesized facts which were supported by the evidence and, if found by the jury, met the issue of implied warranty head on and prevented a recovery under such a theory. Interstate Folding Box Co. v. Hodge Chile Co., supra.

The defendant also urges that the giving of this instruction constitutes reversible error because it fails to specifically negate the defense of implied warranty as required by Moore v. Ready Mixed Concrete Co., Mo., 329 S.W.2d 14. That same contention was presented in the case of Prevost v. Wilkin, Mo.App., 358 S.W.2d 417, wherein the court refused to extend the rule of the Moore case to a case involving the defense of accord and satisfaction. In Prevost v. Wilkin, supra, 358 S.W.2d 1. c. 421, the court held:

“In the first place the Moore case specifically declares a rule where the defense is contributory negligence. We find nothing to indicate it is announcing an instruction rule for all affirmative defenses. It may be contended, as appellants contend, that logic makes the rule equally applicable to all affirmative defenses. But the Moore opinion does not say so. It has long been the law in Missouri that all of the instructions given should be read and considered together in order to determine if the jury was misled or misdirected. The Supreme Court in Johnson v. Flex-O-Lite Mfg. Corp., 314 S.W.2d 75, 81, said:
“ ‘All of the instructions given in a case should be read together and as parts of a single charge in order to determine the correctness of the charge or the effect of any deficiency in a particular instruction, (citations)’.
“For this court to rule the case at bar as covered by the Moore opinion, would require us to go beyond its actual holding, by-pass the rule that all of the instructions be considered together and in effect further enlarge and extend the change promulgated by that opinion. We believe that if any such extension is made it should be by the Supreme Court rather than by this court.”

The same considerations compel us to refuse to extend the rule of the Moore case to the instant case involving implied warranty.

Neither can we hold this instruction erroneous because it is in conflict with instruction 3. That instruction embodied the defendant’s defense of implied warranty. It hypothesized that plaintiff knew of the purpose for which defendant intended plaintiff’s labels; that defendant relied upon the experience, skill and judgment of the plaintiff in ordering thesé labels; that the plaintiff’s labels did not adhere to the poly-ethelene bags; and that the defendant had to pay more for labels from its other supplier than it would have had to pay the plaintiff. Upon these findings, it directed a verdict for the defendant for the difference in the cost of the labels. It follows that instruction 3, hypothesizing facts to support defendant’s theory of implied warranty, would necessarily conflict with plaintiff’s verdict-directing instruction hypothesizing facts which, if found by the jury, would prevent recovery under such a theory. It was not erroneous to give the instruction for each of the parties was entitled to submit to the jury hypothesizations which, if found, authorized a recovery for it upon its theory of the case so long as the submissions made were supported by the evidence.

The defendant’s argument with regard to its remaining attack upon this instruction is based upon the use of the words "weight of credible evidence” in the last paragraph of instruction 1. Plaintiff candidly admits that the phrase should have read “the greater weight of the credible evidence” but urges that whatever error was created by the omission was cured by the use of the correct language in instruction 2, the burden of proof instruction. That instruction informed the jury that the plaintiff had the burden of proving its case against the defendant “ * * * by the preponderance or greater weight of the credible evidence”; that the defendant had the burden of proving its counterclaim “ * * * by the preponderance or greater weight of the credible evidence”; and that “By the term preponderance or greater weight of the credible evidence as used in these instructions, the court means evidence which you think is more worthy of belief than that offered in opposition.” There can be no doubt but that the burden of proof instruction was a correct statement. Bell v. Pedigo, Mo., 364 S.W.2d 613; Mo.Digest, Trial, <®=>234(7). The effect was to supplement and explain the incorrect statement in the last paragraph of instruction 1. Perry v. Stockhoff Supply Co., Mo., 356 S.W.2d 92. We are not to be understood as approving the language used by plaintiff, nor do we hold that in every case the use of the phrase here employed by plaintiff can be cured by other instructions. However, in the instant case, in view of the clear and repeated use of the correct terminology in instruction 2, we hold that the omission of the words “preponderance or greater” in instruction 1 does not render that instruction reversibly erroneous. We find no prejudicial error in the giving of instruction 1 and the trial court’s award of a new trial to the defendant cannot be sustained on that ground.

Two other points contained in the motion for new trial were urged upon this court by defendant as basis for sustaining the award of a new trial. These have to do with the trial court’s action in excluding Mueller’s testimony regarding his conversations with Fisher and in admitting into evidence plaintiff’s exhibits 5 and 6. These exhibits were letters from the defendant which plaintiff contended went to prove that defendant knew exactly what it ordered from the plaintiff by executing the sales contract. These points will not be ruled herein for the reason that it is well settled that any error in receiving or rejecting evidence will not cause a reversal where the verdict returned and judgment rendered were the only verdict and judgment which the law would uphold. Summers v. Peoples Elevator Co., Mo.App., 136 S.W.2d 81; Mo. Digest, Appeal and Error, 1056(6). Under the factual situation presented by this appeal, that is exactly the situation. As the defendant admits in its brief, “The facts hypothesized by that instruction [instruction 1] were not in dispute. If those facts alone authorized a verdict for plaintiff, then the trial court could — indeed should have directed a verdict for plaintiff.” As we have stated earlier in this opinion, the facts hypothesized in paragraph 3 of instruction 1 are essentially those that this court in Interstate Folding Box Co. v. Hodge Chile Co., supra, held constituted one of the two situations preventing the buyer from proving his reliance upon the seller’s skill, judgment and experience and thus from establishing the defense of implied warranty. The existence of facts preventing the defendant from availing itself of the defense of implied warranty being uncontested, it follows that any error which defendant seeks to present by these last two assignments cannot be prejudicial.

The trial court’s order granting a new trial should be set aside and the judgment for the plaintiff reinstated. The Commissioner so recommends.

PER CURIAM.

The foregoing opinion of BRADY, C., is adopted as the opinion of this court. The cause is remanded to the trial court with instructions to set aside its order granting the defendant a new trial and to reinstate the judgment for the plaintiff.

RUDDY, P. J, WOLFE, J, and WILLIAM M. KTMBERLIN, Special Judge, concur.


source: Caselaw Access Project

author: STONE, Judge. PER CURIAM.

license: Public Domain

text:
    James P. BAKER, Plaintiff-Appellant, v. MISSOURI NATIONAL LIFE INSURANCE COMPANY, Defendant-Respondent.
    No. 8198.
    Springfield Court of Appeals. Missouri.
    Sept. 30, 1963.
    Motions for Rehearing or to Transfer Overruled Nov. 11, 1963.

      Farrington & Curtis, Springfield, Thomas Strong, Springfield, for plaintiff-appellant.
    Milton B. Kirby, Springfield, Granoff, Levy & Craig, Kansas City, for defendant-respondent.
   STONE, Judge.

In this jury-waived, court-tried suit at law, plaintiff Baker of Springfield, Missouri, seeks to recover from defendant, Missouri National Life Insurance Company (hereinafter called the Company), renewal commissions on premiums paid during the months of July 1960 to January 1961, inclusive, on policies of insurance issued by the Company through the efforts of plaintiff as soliciting agent. From the judgment for defendant, plaintiff appeals. A detailed statement of facts is required for ah understanding of the issues.

By written contract dated April 25, 1956 (hereinafter referred to as the contract), the Company appointed plaintiff as general agent to solicit business in “Springfield and Southern Missouri.” After preliminary recitals and the statement of plaintiff’s appointment, the other contractual provisions were set forth in numbered paragraphs grouped under three headings. Twelve numbered paragraphs relating to the agent’s responsibilities were placed in “Part I” under "The Agent Agrees.” (All emphasis herein is ours.) Of these twelve paragraphs, we are concerned only with paragraph 1, by which the agent agreed “to produce a minimum of 5 applications each calendar month.” Three numbered paragraphs pertaining to the Company’s obligations were placed in "Part II” under “The Company Agrees.” Of these three paragraphs, only paragraph 3 is here important: “In accordance with the provisions of this contract, provided the General Agent has been continuously representing the Company for more than one year, renewal commissions, as herein specified, will be paid during his lifetime.” Other contractual provisions in seven numbered paragraphs were assembled in “Part III” prefaced by "It is further agreed and understood by the said Company and the said Agent.” Of these seven paragraphs, only paragraph 5 and a portion of paragraph 6 .are relevant to the instant controversy:

“5. If the Agent shall at any time fail to make report of collections, or fail to deposit or remit the funds of the Company in strict accordance with the terms hereof, or shall in any way injure or divert the business of the Company in said territory or elsewhere or shall violate any of the agreements herein contained, or shall be unsatisfactory or shall write an undesirable or unprofitable business for the.Company, the Company may, at its option, terminate this contract by giving five days’ notice in writing to the Agent, which action shall, release the Company from all liability hereunder, and all commissions or- other compensation accrued at the time (of) such termination, or thereafter to accrue, shall be forfeited to the Company as liquidated damages for such violation or action on the part of the Agent. This forfeiture is without prejudice to the Company’s rights to secure legal redress as it may deem necessary.
“6. * * * The Agent shall have the right to terminate this contract by giving five days’ notice in writing of his desire so to do and settlement and payment of any sums that may be due the respective parties.”

Plaintiff acted under the contract until his agency was terminated during the latter part of August 1960. The parties agree that the contract was terminated but they are in violent disagreement (as will hereinafter appear) as to which party terminated and what accomplished or worked the termination.

Although in many months, particularly during 1958 and 1959, plaintiff’s production barely reached the minimum of five applications, he produced not less than that number of applications each month during the period from May 1956 to January 1960. However, his production fell below five applications in February 1960 and thereafter declined further to three applications in March, two in April, one in May, one in June, none in July, and one in August. Upon trial, plaintiff offered two “reasons” for his decreased production, namely, (1) he “wasn’t feeling very well” during 1960 and (2) he was “unhappy” because the Company did not make available, as had been promised (so he said), another non-cancellable policy in the field of accident, health and hospitalization insurance, for which the overwhelming majority of applications produced by plaintiff were submitted. Plaintiff also testified that on two occasions, to wit, in March 1958 and “in the early Spring of 1960,” when he had complained that he did not want to make his “quota” by writing insurance cancellable at the Company’s option, Niman (the Company’s vice-president) had told him (plaintiff) to write the form of non-cancellable policy then offered by the Company and had assured him that the Company would not cancel the contract “on account of low production.” On the other hand, Niman denied having made any such statement and asserted that he frequently had discussed with plaintiff “the matter of his quota production” and that plaintiff “always promised * * * that he would do better and attempt to get his production up to quota and so forth and so on.” In any event, the Company continued to issue policies upon applications produced by plaintiff (few in number as they were), an exhibit prepared by the Company showing that as late as August 18, 1960, it had issued Policy No. 128722 to E. Hendricks upon an application solicited by plaintiff.

Throughout the life of the contract, the Company had sent to plaintiff about the fifteenth day of each calendar month a remittance for his renewal commissions on premiums paid during the preceding calendar month, and plaintiff admittedly received all renewal commissions due him on premiums paid during the period to and including the month of June 1960. However, he did not receive a remittance about the middle of August 1960 for renewal commissions on premiums paid during July; and, after waiting a few days, he made inquiry by memorandum dated August 20, 1960, and received at the Company’s home office in Kansas City on August 22, which .read as follows: “SUBJECT: July statement and renewal check. Since I have not received the above kindly check delay. Thanks.” Still having heard nothing from the Company concerning renewal commissions for July, plaintiff called Niman over long distance on August 24. Plaintiff’s version of this conversation was that, when he asked “what has happened to my renewals,” Niman said “you are not going to get no more renewals” but that he (Niman) did not state that the contract was cancelled or that plaintiff no longer represented the Company. Niman’s testimony concerning this conversation was: “I told him (plaintiff) over the phone, as I told him many times before, that the quota production was not being maintained and, as we previously discussed, unless he could maintain his quota production he was not entitled to renewals under the terms of the contract, and that, under the circumstances, not having maintained his quota prodiictian, he was not entitled to renewals. * * * I was pretty well tied up, and I think I told him on the'phone also I was going to write him to that effect. And I asked one of my associates to explain the situation to him and * * * to write him a letter and show it to me before he sent it out.” In response to a subsequent question as to whether he (Niman) had told plaintiff that the Company “was terminating the contract,” Niman said, “I did.”

Whatever the precise language of the conversation between plaintiff and Niman on August 24 may have been, plaintiff was (as he put it) “quite shook up” for a few minutes; and, on the same day, he wrote and dispatched by registered mail the following letter (omitting date, salutation and signature) addressed to the Company and received at its home office in Kansas City the following day, to wit, on August 25:

“This is Official Notice that I am electing to exercise my option, as provided in Part 111, paragraph 6, in the cancellation of my General Agents Contract, dated April 25, 1956. and this is due notice to that effect.
"“I am further demanding that amounts, delayed renewals due me and money accrueing from renewals he paid me promptly as per agreement.
■“No written complaints have reached me to date as to my performance, while under contract. While I am much displeased with failure of proper performance, on the part of the Company and this is my reason for cancellation of my Contract.”

Also on August 24, Hader (the Company’s assistant treasurer) wrote and mailed to plaintiff the following unsigned memorandum or letter typed on an “Interoffice Communication” form and captioned “SUBJECT Commission Statement”:

“This will acknowledge receipt of your memo of August 20, 1960 regarding your commission statement.
“As you know, we offer an outstandingly high commission rate in exchange for quantity and quality production. Your production has been of small quantity and lacking in quality, and in any event does not measure up to the minimum qualifications as stated in your contract.
“The non-performance has not been on our end; quite the reverse in that it has been on your side. We cannot continue living up to our side and getting very little or almost nothing in return.
“Inasmuch as you have not fulfilled your part of the agreement, we have no alternative than to discontinue ours.
“Further, at any time you show us that you are able to fulfill your end of the agreement and to continue to fulfill your end of the agreement, we shall be only too glad to fulfill ours.”

On August 26, Niman wrote and mailed to plaintiff the following letter (omitting date, salutation and signature) :

“This will acknowledge receipt of your letter dated August 24, 1960, which presumably is in reply to our telephone conversation of yesterday and in answer to Mr. Hader’s letter to you dated August 24, 1960.
“Mr. Hader summed up the situation very well in that you have not been meeting the minimum production qualifications stated in Part I, Paragraph I of your Agency Contract. I have on several occasions discussed production mínimums with you and as a matter or record our correspondence file shows many acknowledgments from you stating your intentions to do a better job, at least meet the minimum.
“You have not done this and as Mr. Hader’s letter' reads, we cannot continue to fulfill our obligation unless you fulfill yours. Therefore, we ask that you return all supplies together with your State License which is the property of the Company. A final accounting of any outstanding collections on premiums, applications or otherwise, must be reported to the Company immediately together with a cashable remittance to cover same.
“It is to your best interest to settle your affairs with the Company in an orderly manner and we must insist that you give this matter your strict and immediate attention and compliance.”

Plaintiff’s position is that he terminated the contract by his registered letter of August 24, 1960, received by the Company at its home office in Kansas City on August 25. Defendant’s theory (as spelled out in its brief) is that it terminated the contract by a “chain of events,” to wit, (1) by the oral statements of Niman in the course of his long distance telephone conversation with plaintiff on August 24, (2) by Hader’s unsigned memorandum or letter of August 24, and (3) by Niman’s letter of August 26 — all of which should (so the Company says) be treated “as one continuing transaction leading up to the confirmation of a termination of the contract by defendant (the Company)” because of plaintiff’s failure “to produce a minimum of 5 applications each calendar month.”

The contract, as drafted by the Company, plainly provided in Part III, paragraphs 5 an'd 6, for termination by the giving of ”notice in writing.” The nature of notice required by a contract depends upon the provisions of that contract [39 Am.Jur., Notice and Notices, § 11, p. 238] ; and the general rule is that, where the manner of exercising á power of termination is specified in a contract, notice will be effective only if given in the stated form, unless compliance with the contractual provision has been waived. 6 Corbin on Contracts, § 1266, loc. cit. 64-65; 17A C.J.S., Contracts, § 400, p. 487. So, “for the most part strict adherence to a requirement of writing is exacted” [1 Merrill on Notice, § 597, p. 653]; a.nd, when the contract calls for notice in writing, notice in the course of a telephone conversation is insufficient to satisfy the contractual requirement. Star-Chronicle Pub. Co. v. United Press Ass’ns., 8 Cir., 204 F. 217, 223 ; 66 C.J.S., Notice, § 16b, loc. cit. 656. Niman’s oral response (whatever it may have been) when plaintiff called him on August 24, 1960, obviously did not constitute, and was no part of, the “notice in writing” contemplated and required by the contract for termination thereof.

Passing to the second in the “chain of events” upon which the Company relies, namely, Hader’s unsigned memorandum or letter of August 24, we observe that the writer designated the “subject" of the memorandum as “Commission Statement” and, in the opening sentence, referred to “your (plaintiff’s) memo of August 20, 1960 regarding your commission statement.” After complaining that plaintiff’s production “in any event'does not measure up to the minimum qualifications as stated in your contract” and commenting that “inasmuch as you have not fulfilled your part of the agreement, we have no alternative than to discontinue ours,” the memorandum closed with the significant statement: "Further, at any time you show us that you are able to fulfill your end of the agreement and to continue to fulfill yowr end of the agreement, we shall be only too glad to fulfill ours.” To be effective, a notice of termination must be clear, definite, unambiguous and unequivocal, and it properly may not be so characterized “unless its meaning can be apprehended without explanation or argument.” 66 C.J.S., Notice, § 16a, loc. cit. 654. See also 17A C.J.S., Contracts, § 402, loc. cit. 489. Hader’s memorandum does not convey to us the thought or idea that the .writer thereby purposed to terminate plaintiff’s agency, but rather it suggests that Hader, in common with Niman, labored under the mistaken impression (to which we shall return later) that the Company’s contractual obligation to' pay renewal premiums to plaintiff was conditioned upon his production of not less than five applications each month and that plaintiff’s failure to meet that “quota production” in any given month automatically relieved the Company of any contractual obligation to pay renewal premiums for that month. In any event, Hader’s memorandum certainly was not a clear, definite, unambiguous and unequivocal notice of termination of the contract and had no efficacy as a notice of termination.

Part III, paragraph 6, of the contract accorded to plaintiff the right to terminate upon “five days’ notice in writing of his desire so to do and settlement and payment of any sums that may be due the respective parties.” There is no suggestion in the record that plaintiff owed any sum to the Company when, by his letter of August 24, 1960, he gave “Official Notice that I am electing to exercise my option, as provided in Part 111, paragraph 6, in the cancellation of my General Agents Contract, dated April 25, 1956.” We are of the opinion, and so hold, that plaintiff thereby terminated the contract as he had ’ a right to do. With the contract thus terminated by plaintiff, Niman’s subsequent letter of August 26 could not have worked a termination by the Company under Part III, paragraph 5, for the obvious reason that a contract already lawfully terminated cannot be terminated again.

It is true that, as the Company’s counsel emphasize, payment of renewal commissions to an agent usually contemplates and is associated with continúance of the agency, thus furnishing an incentive for the agent to maintain and service, as well as to solicit and procure, the business. King v. Raleigh, 100 Mo.App. 1, 7, 70 S.W. 251, 253. And we recognize and reiterate the firmly-established limitation that an agent is not entitled to commissions on renewal premiums paid after termination of his agency, unless his right to receive such commissions is expressly stipulated in or is clearly to be gathered from his agency contract. Christensen v. Prudential Ins. Co. of America, Mo.App., 204 S.W.2d 459, 462; Phillips v. American Nat. Assur. Co., 227 Mo.App. 1136, 1138, 58 S.W.2d 814, 815(1); Locher v. New York Life Ins. Co., 200 Mo.App. 659, 673, 208 S.W. 862, 866(2).

In most of the reported cases in this jurisdiction, the contract under consideration plainly provided or clearly indicated that the agent’s right to receive commissions on renewal premiums would cease upon termination of the agency. Arensmeyer v. Metropolitan Life Ins. Co., 254 Mo. 363, 370-372, 375-376, 162 S.W. 261, 263, 264(1); Christensen, supra, 204 S.W.2d loc. cit. 460, 462-463(2); Locher, supra, 200 Mo.App. loc. cit. 665, 676-677, 208 S.W. loc. cit. 863, 867-868; King, supra, 100 Mo.App. loc. cit. 4, 70 S.W. loc. cit. 252. And there are numerous cases in other jurisdictions involving agency contracts of that tenor and effect. E. g., Stagg v. Connecticut Mut. Life Ins. Co., 10 Wall. 589, 19 L.Ed. 1038; Butler v. New York Life Ins. Co., 45 Wash. 141, 87 P. 1119; Jacobson v. Connecticut Mut. Life Ins. Co., 61 Minn. 330, 63 N.W. 740; Fidelity & Deposit Co. of Md. v. Washington Life Ins. Co. of New York, D.C.Md., 193 F. 512, 513, and cases there collected. In fact, as the Supreme Court of Minnesota quite recently observed, “[ojrdinarily (after termination of his agency) the agent is denied renewal commissions by the express terms of his contract.” Ramseth v. City Agency, Inc., 264 Minn. 147, 118 N.W.2d 219, 222.

But, whether so stated specifically or not, it is implicit in all of the holdings that an agent’s “right to commissions on renewals depends entirely upon the terms of the contract existing between himself and the company * * * ” Christensen, supra, 204 S.W.2d loc. cit. 462. See 44 C.J.S., Insurance, § 162c, p. 843; 29 Am.Jur., Insurance, § 176, p. 571; annotation 79 A.L. R. 475; annotation 136 A.L.R. 160. And, where the agent has a right to such commissions under the contract, the courts should not be, and have not been, hesitant in recognizing and enforcing that right. Phillips v. American Nat. Assur. Co., 227 Mo.App. 1136; 58 S.W.2d 814; Mutual Ben. Health & Acc. Ass’n. v. LeMaster, 89 Ga.App. 870, 81 S.E.2d 484; Hale v. Brooklyn Life Ins. Co., 120 N.Y. 294, 24 N.E. 317.

Returning to the contract under consideration, we observe that the Company’s agreement in Part II, paragraph 3, was that, “in accordance with the provisions of this contract, provided the General Agent has been continuously representing the Company for more than one year, renewal commissions, as herein specified, will be paid during his lifetime.” The sole contractual limitation upon the obligation of the Company to pay “renewal commissions * * * during his lifetime” was the proviso that “the General Agent has been continuously representing the Company for more than one year,” and plaintiff’s right to renewal commissions was not conditioned upon his continuing faithful performance of his agreement in Part I, paragraph 1, “to produce a minimum of 5 applications each calendar month.”

The only provision in the contract for termination of the Company’s obligation to pay renewal commissions during plaintiff’s lifetime was that contained in Part III, paragraph 5: “If the Agent shall at any time * * * violate any of the agreements herein contained, * * * the Company may, at its option, terminate this contract by giving five days’ notice in writing to the Agent, which action shall release the Company from all liability hereunder, and all commissions or other compensation accrued at the time (of) such termination, or thereafter to accrue, shall be forfeited to the Company as liquidated damages * * * ” Assuming (as we have) the validity of the quoted provision, plaintiff’s failure to meet his “quota production” would have been a cause for which the Company might, at its option, have terminated the contract by giving five days’ notice in writing; but, as the contract plainly stated, it would have been the Company’s “action” in exercising its option to terminate by written notice, not plaintiff’s failure-to meet his “quota production,” which would have released the Company from further liability and would have “forfeited” plaintiff’s commissions, accrued and accruing. In other words, the contract under consideration was not one in which the parties agreed that plaintiff’s violation of a covenant would, automatically and without notice to him, terminate the contract and his right to receive renewal commissions [contrast Boyd v. American Nat. Ins. Co., 20 Tenn.App. 631, 103 S.W.2d 338, 339; Pankey v. Federal Life Ins. Co., 287 Ill.App. 132, 4 N.E.2d 642, 643]; and nothing in the contract suggests that defendant’s obligation to pay renewal premiums was a will-o’-the-wisp duty vanishing in those months in which plaintiff might not meet his “quota production.” For that matter, the Company actually continued regular monthly remittances for renewal commissions on all premiums paid through the month of June 1960, notwithstanding the fact that plaintiff had not produced as many as five applications in February 1960 or in any month thereafter.

In the final analysis, the Company’s defense in this action is simply that, by the aforesaid “chain of events” beginning with Niman’s oral statements when plaintiff called him on August 24, 1960, the Company terminated the contract pursuant to Part III, paragraph 5, and thereby was released from liability for payment of renewal commissions. But, as we have seen, the termination was by plaintiff under Part III, paragraph 6, which accorded to him the right to terminate at any time without penalty. The reason which prompted his exercise of that right was immaterial, where fraud vitiating that action was neither pleaded nor proved. Christensen, supra, 204 S.W.2d loc. cit. 463; Otto v. Imperial Cas. and Ind. Co., 8 Cir., 277 F.2d 889, 893-894(6). See also Kerr & Elliott v. Green Mountain Mut. Fire Ins. Co., 111 Vt. 502, 18 A.2d 164, 168.

In actions of this character, the shoe usually has pinched the other foot in that, as we have noted, agency contracts frequently provide for payment of renewal commissions only during continuance of the agency. In such cases, courts have answered agents’ pleas of hardship by pointing out in each instance that, if the contract was harsh, it nevertheless was one which the parties had a legal right to make and did make, and that the court could not disregard the language employed by the parties and rewrite the contract in accordance with the court’s notion of what might be fair and equitable. King, supra, 100 Mo.App. loc. cit. 7, 70 S.W. loc. cit. 253; Christensen, supra, 204 S.W.2d loc. cit. 464(5); Arensmeyer, supra, 254 Mo. loc. cit. 380, 162 S.W. loc. cit. 266; Boyd v. American Nat. Ins. Co., 20 Tenn.App. 631, 103 S.W.2d 338, 346; Bryant v. Continental Cas. Co., 58 Ga.App. 518, 199 S.E. 343, 349. In this action at law, it would seem to be appropriate to make similar response to the Company’s suggestion that we should sit “in the nature of a court of equity” and should not permit plaintiff by his termination of the contract under Part III, paragraph 6, to deny to the Company the right to exercise its option to terminate under Part III, paragraph 5.

If the parties had intended and agreed that plaintiff should have no right to renewal commissions upon his termination of the agency, it would have been a simple matter for the Company, which prepared the contract, so to have provided. In the absence of any such provision, the parties must be held to have meant what they said. Fabian v. Provident Life & Acc. Ins. Co., D.C.Minn., 5 F.Supp. 806, 808. Accordingly, we conclude that the trial court erred in denying plaintiff’s right to recover renewal commissions on premiums paid during the period in suit, i e., from July 1960 to January 1961 inclusive.

Plaintiff propounded interrogatories to defendant which elicited, concerning each policy issued pursuant to plaintiff’s solicitation and not lapsed prior to termination of the contract, specific information as to (a) the date of issuance, (b) whether the policy was still in effect on July 24, 1962 (the date on which defendant answered interrogatories), and (c) if not then in force, the last effective date of the policy. Using this information (admitted in evidence), plaintiff made a detailed compilation which showed that the renewal commissions allegedly due him on premiums paid during the period in suit were in the aggregate principal amount of $1,225.88. Plaintiff’s compilation was received in evidence subject to the sole reservation (as stated by one of defendant’s attorneys) that “when I get back to Kansas City I will check it further and I would like to reserve the right to call the court’s attention to any miscalculations —I imagine it would be negligible.” (The same attorney previously had commented that “we estimate it, without making calculations, that there is a thousand or twelve hundred dollars involved.”) The aforesaid evidence as to damages is the only evidence on this issue contained in the transcript on appeal, which bears the written approval of counsel for both parties. However, defendant’s counsel state in their brief that they submitted to the trial judge “Exhibit E showing a substantially lesser amount of premiums collected on policies for which plaintiff claims renewal commissions,” that “through some misadverfence” the transcript makes no reference to this “exhibit,” and that defendant now “is in disagreement with plaintiff regarding the amount of renewal commissions that would be due him if there were liability on the contract.”

But it is a trite commonplace of appellate procedure that we must take a record as it comes to us [Bennett v. Wood, Mo., 239 S.W.2d 325, 327(2); Prentice v. Williams, Mo.App., 324 S.W.2d 466, 469(2)] and that it may not be pieced out or supplemented by extraneous material not found in the transcript and not conceded by adversary counsel. City of Rolla v. Riden, Mo.App., 349 S.W.2d 255, 257(4). And we are reminded of the no less familiar procedural truism that our system of jurisprudence neither contemplates nor permits appellate determination of what was done in the trial court on the basis of statements in a brief, which find no support in the transcript and are not admitted by opposing counsel. Lubrication Engineers, Inc. v. Parkinson, Mo.App., 341 S.W.2d 876, 879(9), and cases collected in footnote 13. Since the only evidence on damages included in the approved transcript adequately reveals and clearly establishes the aggregate amount of renewal commissions owing to plaintiff on premiums paid during the period in suit, i. e., during the months of July 1960 to January 1961, inclusive, it becomes our plain duty to “dispose finally of the case on appeal.” Rule 83.13(c), V.A.M.R.

Therefore, the judgment for defendant is set aside and the cause is remanded with directions to enter judgment for plaintiff (a) in the principal sum of $1,225.88, (b) for simple interest thereon at six per cent (6%) per annum from and after February 27, 1961, the date of institution of suit, and (c) for costs, all in accordance with the prayer of plaintiff’s petition.

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

On Motions for Rehearing or to Transfer

PER CURIAM.

The only case cited in defendant’s motions for rehearing or to transfer is Zumwinkel v. Leggett, Mo., 345 S.W.2d 89. However, defendant’s counsel overlook the basic differentiating fact that, as is frequently true, the contract under consideration in Zum-winkel, supra, clearly indicated that the agent’s right to receive commissions on renewal premiums would cease upon termination of the agency, i. e., “ ‘ * * * the Company will allow * * * commissions on first premiums and on renewal premiums paid in cash to and accepted by the Company while the agent is authorized to solicit applications to the Company * * *.’ ” [345 S.W.2d loc. cit. 90] We were cognizant of Zumwinkel, supra, while our opinion in this case was in the course of preparation, but we did not then, and do not now; regard it as authority supporting instant defendant’s position. After careful reconsideration of the case in the light of defendant’s motions, we remain of the view that our opinion properly disposed of the appeal. Accordingly, defendant’s motions for rehearing or to transfer are overruled.


author: STONE, Judge.

text:
    Archie WILLIAMS and Foil Watkins d/b/a Louisburg Farm Supply, Plaintiffs-Respondents, v. Norman CASS and Betty E. Cass, Defendants-Appellants.
    No. 8199.
    Springfield Court of Appeals. Missouri.
    Oct. 24, 1963.

      Lilley & Cowan, Springfield, for defendants-appellants.
    Theo. G. Scott, Buffalo, for plaintiffs-respondents.
   STONE, Judge.

For materials alleged to have been furnished for erection of a dwelling house, plaintiffs, Archie Williams and Foil Watkins doing business as Louisburg Farm Supply, sought a personal judgment for $3,292.72 with interest against defendants, Norman Cass and Betty E. Cass, husband and wife, and a lien therefor upon their 320-acre tract on which the dwelling house was situate. Defendants’ motion for a directed verdict at the close of the evidence having been overruled, the jury returned a general verdict for defendants upon which judgment was entered. Thereafter, plaintiffs’ motion for new trial was sustained upon the sole ground that the verdict and judgment were against the weight of the evidence. On this appeal by defendants, the primary contention is that the trial court erred in granting a new trial because (a) plaintiffs’ petition did not state a cause of. action and (b) plaintiffs’ evidence was insufficient to make a sub-missible case in that (1) there was no showing that the materials were purchased “by defendants or their agent” and (2) there was “a total failure of proof as to the reasonable value of the merchandise involved.”

Some preliminary references to relevant legal principles may be helpful. As instant plaintiffs emphasize, a trial court is invested with broad inherent discretion to grant one new trial upon the ground that the verdict is against the weight of the evidence. But that discretion is to be exercised judicially, not arbitrarily ; and repeated pronouncements have made it crystal clear that the test as to whether there has been an arbitrary exercise of such inherent discretion is whether there was substantial evidence to have supported a verdict for the party or parties to whom the new trial was granted. Thus, the legal question on an appeal-by defendants from an order granting a new trial to plaintiffs on the ground that the verdict was against the weight of the evidence is the same legal question as that theretofore presented to the trial court by defendants’ motion for a directed verdict at the close of the evidence. ” . . . (P)laintiff has no right to a new trial when the evidence in her favor is not sufficient to take the case to the jury. ... A failure of evidence to support a verdict for plaintiff renders a case dead, and it cannot be resurrected by a motion for new trial.” Payne v. Reed, 332 Mo. 343, 347, 59 S.W.2d 43, 44(3) ; Rose v. Thompson, 346 Mo. 395, 401, 141 S.W.2d 824, 828. “To grant a new trial, on the ground that the finding was against the weight of the evidence, would be arbitrary if there was no evidence to weigh. Therefore, on appeal from such an order based on that ground, the appellate court will determine whether or not there was sufficient substantial evidence to sustain a verdict for the party to whom the new trial was granted.” Castorina v. Herrmann, 340 Mo. 1026, 1032, 104 S.W.2d 297, 300(15, 16); Rose, supra, 346 Mo. loc. cit. 401, 141 S.W.2d loc. cit. 828. See also Kiburz v. Loc-Wood Boat & Motors, Inc., Mo., 356 S.W.2d 882, 884 (2).

In the Fall of 1960, Norman E. Cass (hereinafter referred to as defendant Norman), “a preacher of the gospel” and farmer, had several discussions with one Samuel M. Martin, self-described upon trial as “a carpenter,” about' construction of a dwelling house on a 320-acre tract in Polk County, Missouri, owned by defendant Norman and his wife, Betty E. Cass (hereinafter referred to as defendant Betty). As a result of those discussions, Martin entered upon construction of the house on December 29, I960, and thereafter pursued this project until the house was completed about August 1, 1961. Martin admittedly drew, and his daughter typed, a construction contract (hereinafter referred to as the written contract) dated December 29, 1960, but actually prepared and signed about February 1, 1961. The written contract, reflecting all of the legal frailties of a layman’s “do-it-yourself” document, named defendant Norman as “owner” and Martin as “builder,” identified three attached drawings as “a part of and the basis of this agreement,” sketched the specifications in bare outline, and closed with the blunt statement “Total cost not to exceed $12,500.” The written contract contained no provision concerning the ordering of or payment for materials to be used in construction. There was no reference to defendant Betty in the written contract and she did not sign it.

Defendant Norman testified that the written contract “actually covers the entire building of the house”; that he regarded it as obligating him to pay $12,500 to Martin; and that, to the date of trial (September 24, 1962), he had paid to, or for the use and benefit of, Martin the aggregate sum of $12,901.63 and still had not settled for certain “extras.” According to Martin, his initial employment was under an oral agreement which he stated as “they wanted me to build them a house” —“they had the plans on it” — “he sáid he wanted me to buy the materials and take care of all that stuff, because he wouldn’t have time to fool with it.” Martin said, and defendant Norman agreed, that the latter desired and needed the written contract for use in connection with a loan application; but, regardless of what motivated preparation of the written contract, Martin confirmed the statement of counsel that it “set forth the deal.”

Before contracting with Martin, defendant Norman had showed him a cost estimate of needed materials which a Springfield lumber yard had prepared. Martin, who had been a customer of plaintiffs since they had begun business some eight years previously, thought that Louisburg Farm Supply (plaintiffs) would give “a better deal” on materials. Martin’s testimony was that defendant Norman responded, “Get it where we can get the best deal,” which Martin regarded as “permission” from both defendants to purchase the materials from plaintiffs. The recollection of defendant Norman was that “I told him (Martin) that it didn’t matter to me, wherever he bought the material.” In any event, Martin contacted plaintiffs and thereafter, during the period from January 6 to August 1, 1960, ordered numerous bills of materials. Although two-thirds of the seventy-two original tickets or invoices were billed to “Norman Cass — Sam Martin job” or to “Norman Cass,” ten of the tickets were billed otherwise (e. g., to “Sam Martin,” to “Martin & Cass,” or to “Cass & Martin”) and eight of them were billed to no one. No ticket bore the name of defendant Betty.

During the construction period, defendants had been in plaintiffs’ place of business (so defendant Norman said) on two occasions, to wit, during January and June 1961, or (so plaintiff Watkins stated) “several times.” Plaintiff Watkins’ testimony concerning defendants’ first call (on a date not fixed more specifically than that it was after deliveries of materials to the construction site had commenced) was that defendants “came in to pick out some material,” introduced themselves, “said that they were the ones that Sam Martin were building this house for and . . . that Sam would be paying the bills, asked if he was keeping paid up, which it was at the time, and . . . said they wanted it kept paid up close as they went along.” It may be observed parenthetically that plaintiffs’ original tickets or invoices show that, after deliveries to the construction site commenced, this account never was “paid up” or “paid up close,” the running balances on account (after crediting payments) carried forward on the original tickets having been $737.90 at the end of January 1961, $1,208.77 at the end of February, $2,009.26 at the end of March, $3,990.62 at the end of April, $1,758.02 at the end of May, $2,441.48 at the end of June, and $3,079.50 at the end of' July.

Plaintiff Watkins further stated that, when defendants subsequently came to plaintiffs’ place of business during the construction period, “they merely came in to pick out the type and quality of material that was being used” and “said that Mr. Martin would order out the amount they needed.” Defendant Norman conceded that, when he went to plaintiffs’ place of business to select materials, he was interested in their price and “did not want the house to exceed the $12,500.” From time to time during the construction period, defendant Norman paid “rather substantial sums” to Martin, and the undisputed evidence, as developed in plaintiffs’ case, was that all of the payments (which aggregated $4,500) upon the account in suit were made by Martin’s personal checks and that he also “paid all hands.” “Along toward the last” plaintiff Watkins made an unfruitful demand upon Martin to pay the materials account.

No copies of tickets or statements of account were mailed or delivered to defendants during the construction period; but, in response to their request, defendants were given copies of the tickets when they went to plaintiffs’ place of business in August 1961, after the house had been completed and after Martin had told defendant Norman that he (Norman) “still owed $3,200” to plaintiffs. Plaintiff Watkins’ version of what had occurred on this August visit by defendants was that “they . . . said that they understood they owed for some material there and wanted to know how much it was . . . that it run more than they expected it to but they had realized that they had used some more expensive material throughout the house than they intended to . . . and they couldn’t pay it all now, but would pay what they could and as soon as he sold some cattle he would pay the rest of it,” that defendant Norman “started to write me a check fbr something,” but that defendant Betty said “let’s don’t pay him anything now; let’s wait and see what we can get out of Sam Martin . . . .” Defendant Norman agreed, that he had taken his check book out of his pocket and explained that he had done so to write a check for $6.58 in payment for three small items purchased at that time. Plaintiffs’ ticket for those items and defendant Norman’s cancelled check were in evidence. Defendant Betty did not testify upon trial.

Under § 429.010, one who furnishes material “for any building, erection or improvements upon land . . . under or by virtue of any contract with the owner or proprietor thereof, or his agent, trustee, contractor or subcontractor, upon complying with the provisions of sections 429.-010 to 429.340, shall have ... a lien upon such building, erection or improvements, and upon the land belonging to such owner or proprietor on which the same are situated, to the extent of one acre . . . ” (All statutory references are to RSMo 1959, V.A.M.S., and all emphasis herein is ours.) In their lien claim filed with the circuit clerk [§ 429.080] and in their petition instituting this action [§ 429.-170], plaintiffs referred to the land on which the dwelling house was constructed and a lien was sought as “All of the East Half of Section (10), Township (33), Range (21)” in Polk County, Missouri; and the record reflects no effort to survey, locate, define or describe a tract no larger than one acre. Therefore, upon trial plaintiffs could not have been entitled to a judgment impressing a lien. § 429.010; Hertel Electric Co. v. Gabriel, Mo.App., 292 S.W.2d 95, 99-100. But since, as plaintiffs here point out, they might have been entitled to a personal judgment against defendants, even though their lien failed [Williams v. Porter, 51 Mo. 441, 442(2); Volz et al, Missouri Practice, Vol. 1, § 1242, p. 591; 36 Am.Jur., Mechanics’ Liens, § 284, p. 172], our further inquiry will be whether there was substantial evidence to have supported a verdict for a money judgment against defendants.

From the record as a whole and their brief on appeal, it is plain that plaintiffs’ theory is that defendants, acting by and through Martin as their agent, contracted for the materials. And indeed owners may contract for materials through an agent [Hydraulic Press Brick Co. v. R. B. Winn Contracting Co., Mo.App., 219 S.W. 681, 682(4)]; and, where that is done, the materialman may look directly to such owners for compensation and, in a suit to establish a lien therefor, it is not necessary to join the agent as a party. Spitcaufsky v. Guignon, Mo., 321 S.W.2d 481, 493(15). On the other hand, defendants insist that Martin did not act as their agent, but that his status was that of a contractor who acted in his own behalf. It would appear to be doubtful whether plaintiffs made a submissible case, particularly as against defendant Betty, on their theory that the materials were ordered by Martin as agent for defendants; but, since plaintiffs’ evidence was, in another respect, patently insufficient to have supported a verdict for them, we find it unnecessary to develop further factual details or to determine whether the issue of Martin’s agency vel non was submissible.

As their only verdict-directing instruction demonstrated and as their counsel specifically confirms on this appeal, plaintiffs sought to recover on quantum meruit. “Quantum meruit means ‘as much as he has deserved,’ and the burden is on the claimant to plead, prove, and have the jury instructed, that his charges are fair and reasonable.” Adams v. Smith, Mo.App., 307 S.W.2d 525, 527(1); Rodgers v. Levy, Mo.App., 199 S.W.2d 79, 82(8). See also Fitzgerald v. Schaefer, Mo.App., 216 S.W.2d 939(3). Bluntly put, the failure to prove the reasonable value of services rendered or materials furnished is fatal to recovery therefor in quantum meruit. Hutchinson v. Swope, Mo.App., 256 S.W. 134, 135(4); Enoch v. Frye, Mo.App., 363 S.W.2d 737, 741(5). To the same effect, see Wilson v. Berning, Mo. App., 293 S.W.2d 151, 155(7); Cheek v. National Life Ins. Co. of U. S. A., 200 Mo.App. 533, 207 S.W. 882(2); Gillen v. Haley, 185 Mo.App. 23, 171 S.W. 638.

In the case at bar, twenty-one typewritten pages of the transcript were required to list the multitude of items included in plaintiffs’ claim. Many of those items were described imperfectly or incompletely, and several of the original tickets or invoices reflected unexplained lump sum charges embracing several different items. We note also that the final balance on account shown on the last ticket or invoice was $3,079.50, whereas $3,292.72 was the principal amount for which plaintiffs sought judgment without explanation as to the obvious discrepancy. Certainly it could not be said that the reasonable value of these materials was a matter of common knowledge which the triers of the facts might have determined without the aid of evidence. Contrast Alimon v. Alimon, Mo.App., 314 S.W.2d 457, 462-463 (8); In re Hartle’s Estate, Mo.App., 236 S.W.2d 40, 41(1). However, plaintiffs’ petition contained no averment with respect to the reasonableness of their charges; and, more importantly, there was not a scintilla of evidence as to the reasonable value of the materials furnished or even that plaintiffs’ charges therefor were fair and reasonable.

Apparently recognizing the legal insufficiency of their petition and their proof, plaintiffs close with the plea that, “in furtherance of justice,” the order granting a new trial should be affirmed because, if afforded another opportunity, they could (so they state) make a submissible case. But this is not a case (such as most of those cited by instant plaintiffs, e. g., Byrne v. Prudential Ins. Co. of America, Mo., 88 S.W.2d 344; Knorp v. Thompson, 352 Mo. 44, 175 S.W.2d 889; Feinstein v. McGuire, Mo., 297 S.W.2d 513) in which our discretionary power to remand is invoked upon defendants’ appeal from a judgment for plaintiffs, or in which another trial is sought to afford to plaintiffs, who misconceived from the outset the applicability of the theory chosen by them, an opportunity to plead and follow an appropriate theory. E. g., O’Neal v. Mavrakos Candy Co., 364 Mo. 467, 263 S.W.2d 430, 432(6); Id., Mo.App., 255 S.W.2d 138, 142 (6); Houfburg v. Kansas City Stock Yards Co. of Maine, Mo., 283 S.W.2d 539, 546-548(15-17). And this is not a case in which plaintiffs were able to obtain a favorable verdict and judgment in the first instance, as in Prince v. Bennett, Mo., 322 S.W.2d 886, also cited in plaintiffs’ brief. In arguing this point, instant plaintiffs lose sight of the fact that defendants were victorious upon trial, and that, in our appellate consideration of whether the trial court erred in setting aside the judgment for defendants and thus depriving them of the fruits of their victory on the sole ground that the verdict and judgment were against the weight of the evidence, the determinative test is whether there was substantial evidence to have supported a verdict for plaintiffs and the legal question for our resolution thus becomes the same as that presented to the trial court by defendants’ motion for a directed verdict at the close of the evidence. See again cases cited in footnotes 3 and 4 and in accompanying text.

In the circumstances hereinbefore outlined, it is manifest that defendants’ motion for a directed verdict at the close of the evidence should have been sustained and that we cannot say that there was substantial evidence to have supported a verdict for plaintiffs. That being true, nothing in the record persuades us that we nevertheless should brush aside the applicable legal principles and, in the exercise of such judicial discretion as we may have in this area, should approve the order granting a new trial and remand the case that plaintiffs might have another opportunity to seek a favorable verdict at the hands of a different jury.

Accordingly, the order granting a new trial to plaintiffs is set aside and the cause is remanded with directions to reinstate the verdict and judgment for defendants.

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

      . Frager v. Glick, Mo., 347 S.W.2d 385, 387 (1); State ex rel. State Highway Com’n. v. Belvidere Development Co., Mo., 315 S.W.2d 781, 784(7); Dawson v. Scherff, Mo., 281 S.W.2d 825, 831(6); Rule 78.01, V.A.M.R.; V.A.M.S. § 510.330.

      . Madsen v. Lawrence, Mo., 366 S.W.2d 413, 416(5); Burr v. Singh, 362 Mo. 692, 699, 243 S.W.2d 295, 300; Graves v. Atchison, T. & S. F. Ry. Co., 360 Mo. 167, 169, 227 S.W.2d 660(1); Happy v. Walz, 358 Mo. 56, 59, 213 S.W.2d 410, 412 (1).

      . Madsen, supra, 366 S.W.2d loc. cit. 416; Carter v. Matthey Laundry & Dry Cleaning Co., Mo., 330 S.W.2d 771, 775(2); Berry v. Harmon, Mo., 323 S.W.2d 691, 693; McCann v. Burns, Mo., 308 S.W.2d 631, 633(1); Andres v. Brown, Mo., 300 S.W.2d 800, 801(2) ; Hendershot v. Minich, Mo., 297 S.W.2d 403, 411(22); Whalen v. St. Louis Public Service Co., Mo.App., 351 S.W.2d 788, 793; Lomax v. Sawtell, Mo.App., 286 S.W.2d 40, 42(3), and cases there cited.

      . Payne v. Reed, 332 Mo. 343, 347, 59 S.W.2d 43, 44(3) ; Lindsey v. Vance, 337 Mo. 1111, 1114, 88 S.W.2d 150, 151; Rose v. Thompson, 346 Mo. 395, 141 S.W. 2d 824, 828; Rosenblum v. St. Louis Public Service Co., Mo.App., 242 S.W.2d 304, 305(1); Hoefel v. Hammel, Mo.App., 228 S.W.2d 402, 407(5).


author: COLEMAN, Justice.

text:
    Hannah STRAWDER et al., Appellants, v. Jose Bueno PANTOJA, Appellee.
    No. 14202.
    Court of Civil Appeals of Texas. Houston.
    Oct. 24, 1963.
    Rehearing Denied Nov. 14, 1963.
    ■ Leonard C. Kahn, Houston, for appellants.
    Tom Alexander, Joseph H. Peck, Jr., Houston, Butler Binion, Rice & Cook, Houston, of counsel, for appellee.
   COLEMAN, Justice.

This is an appeal from a judgment rendered on an instructed verdict for the defendant in an automobile collision case.

The only question raised by this appeal is whether there was any evidence of probative force that appellee failed to keep a proper look-out and that such failure was a proximate cause of the collision made the basis of this case.

A short time prior to the collision Hannah Strawder, one of the appellants, and Jose Pantoja, appellee, were driving in opposite directions on West 6th Street in the City of Houston, Texas. Both parties halted their vehicles in response to a traffic light at the intersection of West 6th and Yale Streets. Marie Harrison, an appellant, was a passenger in the Strawder car. The only testimony relating to the actual collision was given by the appellants.

While the light facing them was red, and immediately prior to the time it changed to green, appellants observed the Anderson car about fifty feet away “zigzagging” or “Waddling” toward the intersection at a “good” fifty miles an hour. It did not appear that this car could stop short of the intersection. It was about five o’clock in the afternoon, and was not dark. Lights were not needed. There was nothing at the intersection which would have prevented appellee’s seeing the speeding automobile as it approached the intersection from his left. After the light turned green appellee’s automobile “jumped out” into the intersection and was struck at its left rear door by the Anderson vehicle and then appellee’s automobile struck .appellants’ car, which had not moved from its position at the intersection. After the accident appellee told Hannah Strawder that he wondered what she “was sitting there waiting on.”

Facts may be proved by circumstances as well as by positive testimony. The circumstances detailed above require that the issues of failure to keep a proper look-out and proximate cause be submitted to the jury.

It is argued that' appellee was not required to anticipate that the Anderson vehicle would fail to heed the red light and stop, since appellee entered the intersection before the Anderson vehicle did. We are unable to find direct testimony that appellee’s vehicle entered the intersection first. The Anderson vehicle was “zigzagging.” The width of the streets is not shown and there is no evidence establishing the point' of impact. A question arises as to whether we can assume that appellee entered the intersection first from the testimony that his car was struck on the rear' door by the Anderson car. However, we think that circumstance not of controlling importance. The testimony establishes that if appellee had looked to the left at any time after he stopped for the red light, he would have seen the Anderson car. A jury might have concluded that appellee should have realized that a collision was inevitable if he entered the intersection.

Appellee relies on such cases as Miller v. Tilton, Tex.Civ.App., 289 S.W.2d 426; Schuhmacher Co. v. Bahn, Tex.Civ.App., 78 S.W.2d 205; Buchanan v. Lang, Tex.Civ.App., 247 S.W.2d 445, and Bailey v. Tishlias, Tex.Civ.App., 348 S.W.2d 220. These cases hold that one is not required to anticipate that another will disregard stop signs or commit other acts of negligence. However, one may not close his eyes to an obvious danger “which would have been observed by a person of ordinary prudence similarly situated.” Lynch v. Ricketts, 158 Tex. 487, 314 S.W.2d 273. Appellee was not relieved of his duty to keep a proper look-out merely because he had the right of way. Skyline Cab Co. v. Bradley, Tex.Civ.App., 325 S.W.2d 176, writ ref., n. r. e.; Tips v. Gonzalez, Tex. Civ.App., 362 S.W.2d 422; Watts v. Dallas Ry. & Terminal Co., Tex.Civ.App., 279 S.W.2d 400; Todd v. LaGrone, Tex.Civ.App., 234 S.W.2d 99; Edson v. Perry-Foley Funeral Home, Tex.Civ.App., 132 S.W.2d 282.

The judgment of the trial court is reversed and the case is remanded ■ for a new trial.


author: McDONALD, Chief Justice.

text:
    MIDWEST OIL CORPORATION et al., Appellants, v. E. D. MENGERS et al., Appellees.
    No. 4179.
    Court of Civil Appeals of Texas. Waco.
    Oct. 31, 1963.
    Rehearing Denied Nov. 21, 1963.

      W. Scott Clark, Ft. Worth, for appellants.
    Beasley & Beasley, Beeville, for appel-lees.
   McDONALD, Chief Justice.

Plaintiffs, Midwest Oil Corporation, et al, instituted this suit against defendants Men-gers, et al, to establish the continued existence of a term royalty interest in 400 acres of land in Bee County, Texas.

On October 8, 1940 Charles Mengers, Sr. and wife owned the surface and minerals of the 400 acre tract; and on that date conveyed to W. Earl Rowe a nonparticipating royalty interest in such 400 acres for a term of “15 years from the date hereof and as long thereafter as oil, gas or other minerals, or either of them, is produced or mined from the lands described herein, in paying quantities. If at the expiration of 15 years from date hereof, oil, gas or other minerals, or either of them, is not being produced or mined from said land or any portion thereof in paying or commercial quantities, this contract shall be null and void and the grantee’s rights hereunder shall terminate.”

Plaintiffs derive their interest and rights from the royalty deed to Rowe. Defendants are the children and heirs of Charles Mengers, Sr. and wife.

On September 8, 1950, Mengers, Sr. and wife executed an oil and gas lease to one Gill, covering the 400 acres herein. Such lease provided:

“Where gas from a well producing gas only is not sold or used, lessee may pay as royalty $100. per well per year, and if such payment is made, it will be considered 'that gas is being produced within the meaning of paragraph 2 hereof.”.

Plaintiffs ratified such lease in 1952, but the reversion owners did not join in such ratification.

Such lease by mesne conveyances devolved to Skinner, Calvert, Newman and Anderson, who completed a gas well on the 400 acre tract in 1951, and same was shut-in on August 11, 1951, and remained shut-in until August' 21, 1959. Although shut-in gas royalty was paid plaintiffs during the period was shut-in, plaintiffs have not received any portion of the runs since marketing began on August 21, 1959.

Plaintiffs filed the instant case contending that under the facts, that the term royalty has not lapsed, but was extended beyond the 15 year term by the shut-in gas royalty payments, in the same manner it would have been extended, by production in paying and commercial quantities.

Trial was before the court without a jury, which rendered judgment that plaintiffs take nothing.

Plaintiffs appeal, contending that where the reversion owners execute, and the term owners ratify a lease containing a stipulation that payment of shut-in gas royalty shall constitute commercial production, and shut-in royalty is paid until marketing begins, the term royalty is extended thereby. Plaintiffs concede in their brief that if Archer County v. Webb, 161 Tex. 210, 338 S.W.2d 435 governs the fate of their term royalties; that same have lapsed. Plaintiffs urge that Southland Royalty Co. v. Humble Oil & Refining Co., 151 Tex. 324, 249 S.W. 2d 914, and Spradley v. Finley, 157 Tex. 260, 302 S.W.2d 409, govern disposition of the instant case, and that the rules enunciated in such cases operate to modify and enlarge the 15 year term the royalty interest was granted for herein.

We think that Archer County v. Webb, supra, governs the case at bar. We think the facts of the instant case identical with the facts of the Archer County case, with the exception that in the instant case the plaintiffs unilaterally executed a division order which contained words of ratification of the oil and gas lease. It is noted that the Mengers Sr., the reversion owners, did not join in the division order or ratification. In our view, the unilateral act of plaintiffs in ratifying the lease, can in no way take the instant case out of the rule of Archer County v. Webb.

The royalty deed provided for plaintiffs’ interest to continue for 15 years (which expired in 1955) or so long thereafter as oil or gas is produced in paying quantities. Archer County v. Webb, supra, holds that shut-in payments will continue the lease in force, but not the royalty intcrestj and noted, “It is the mineral deed, not the lease, which should have contained the provision securing to the term mineral owners the benefits of the shut-in gas well provision” (for plaintiffs’ contentions to prevail).

Our conclusion is that the term of the royalty deed was not extended beyond the 15 years by the execution-of the lease, and the fact that plaintiffs, by unilateral action, ratified such lease adds -nothing, and likewise. cannot extend the term of the mineral deed beyond the 15 years. See also Investors Royalty Co. v. Childrens Hospital, Tex. Civ.App. (n. r. e.) 364 S.W.2d 779.

The rule of Archer County v. Webb, supra, has become a rule of property as to the factual situation presented, and should not be changed, absent other controlling circumstances. Southland Royalty Co. v. Humble Oil & Refining Co., supra.

Plaintiffs’ contentions are overruled and the judgment of the Trial Court is affirmed.