author: EAGER, Chief Justice.

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a corporation, Appellant, v. Billy Irene UNDERWOOD, Respondent.
    No. 50149.
    Supreme Court of Missouri, In Banc.
    April 13, 1964.

      Fred F. Wesner, and Wesner, Wesner & Meyer, Sedalia, for plaintiff-appellant.
    Gayles R. Pine, and Pine, Welling & Jones, Warrensburg, for respondent.
   EAGER, Chief Justice.

The original appeal in this case was decided by the Kansas City Court of Appeals, as shown by its opinion reported Mo.App., at 365 S.W.2d 761. This Court sustained an application for transfer.

Plaintiff-appellant issued to Edward Leon Underwood an “Automobile Policy” which contained provisions for indemnity of $5,-000 for death by accident, as more particularly specified. He died on February 17, 1960, and claim was made for such indemnity. Thereupon the insurer filed a declaratory judgment suit and Mrs. Underwood, as beneficiary, filed a counterclaim for the proceeds of the policy with interest, damages, and attorneys’ fees. The declaratory judgment action was subsequently dismissed without prejudice, and the case proceeded upon the counterclaim and a reply. Defendant recovered a verdict and judgment for the face amount of the indemnity, with interest, being a total of $5,425. In essence, 'this is a suit upon the contract with the parties plaintiff and defendant reversed. The pleadings were sufficient to raise all the issues which will be discussed. The policy was admittedly in force at the time of the death.

On Friday, January 29, 1960, Mr. Underwood was involved in what appeared to he a minor automobile accident in Jackson County, where he was then working. Another car slid into his car on an icy street inflicting some damage to the left side of his car. He stated at the time that he was not injured, although the hospital record of four days later stated that he noticed a pain in his back at the time; in any event he drove home. He and his wife were then living at Leeton, and he commuted home about twice a week. His wife testified that on his arrival home he was “real white” and was not “feeling well”; that he stayed at home that weekend, and his back hurt so badly that he did not sleep much. He went to work on Monday, but returned home during the afternoon and stated that he had been to see a doctor. On February 2, 1960, he entered the Holden Hospital with a provisional diagnosis of “unstable low back” and ■a possible rupture of an intervertebral disc; the final diagnosis was the same except that it corroborated the existence of a herniated lumbar disc. He was placed in traction, but his back pain continued. On February 15, 1960, he was taken to surgery for a “partial Hemi-laminectomy with Removal of Disc at L5 and a Spinal Fusion.” This, as we understand, meant the removal of a ruptured disc between the last lumbar vertebrae and the sacrum and the fusing of that area with a bone graft. Apparently both intravenous and inhalant anesthetics were used, but in any event the patient was under general anesthetics. The surgeon, his assistant and the anesthetist were osteopathic physicians. The ruptured disc, or the necessary portion of it, was removed and the locale was being prepared for the bone graft or fusion when the patient suffered a “cardiac arrest.” Radical restorative measures were instituted; the patient’s chest was opened surgically and the heart massaged; within 2-3 minutes the heart beat was restored. The chest was closed, the surgical site in the back was closed and restorative medications administered. The patient developed a form of convulsions, apparently mild, and he remained in a comatose or semi-comatose condition. On February 16 he was transferred to the Kansas City Osteopathic Hospital, but his condition gradually deteriorated and he died on the next day. He never really regained consciousness.

Two separate death certificates appear in our record, made by two different physicians. The one which the parties seem to accept as the official one states “Cause of Death” as follows:

Immediate cause (a) Myocardial Failure Conditions, if any, which gave Due to (b) Cerebral anoxia rise to above cause (a), stating Due to (c) Cardiac Arrest, the underlying cause last.
Part 11 Other significant conditions contributing to death but not related to the terminal disease condition given in Part 1 (a) Pt was being operated upon for back condition originating from auto accident - occurring - 1-29-60.”

An autopsy report was also in evidence; -this showed, among other diagnoses: severe .-interpulmonary hemorrhage, pulmonary edema, broncho-pneumonia, hemothorax, compression atelectasis, cerebral congestion and pulmonary thrombosis. It seems obvious that most'of these were lung complications. This report further stated: “From the standpoint of pathology death was due to anoxia when the oxygen cycle was interrupted in the lungs.” The “Final Diagnosis and Complications” stated on the record of the hospital where the insured expired, were: “(1) Acute myocardial and circulatory failure and, (2) Cerebral anoxia with cortical damage due to cardiac arrest 2— 15-60 at Holden, Missouri. COMPLICATIONS: (1) Interstitial emphysema, (2) Partial atelectasis of upper lung fields, (3) Pneumothorax.” Upon entry into the first hospital on February 2, 1960, it was noted that the rate, rhythm and intensity of the patient’s heart were regular, no murmurs, no rales, and normal area of dullness on percussion. This appears to have been a routine examination. From an X-ray a diagnosis of chronic bronchitis was made. Mrs. Underwood testified that her husband “was in good health” and that she had never known of his having “heart trouble” of any kind. His mother corroborated that testimony. ' ’

■" Und!er"the! specific 'policy provisions involved here the insurer agreed to -pay : * . * * ,. in, ¡event of the death qf each insured which shall result directly and independently of all other -causes from bodily injury caused by accident and sustained by the insured while occupying or through being struck by an automobile, provided the death shall occur: (1) within ninety days from the.date of. such accident, * * * Bodily Injury — means bodily injury, sickness or disease including death at any. time resulting therefrom. Insuring Agreement IV (which includes the above provisions) does not apply: * * * (b) to bodily injury or to loss caused by or resulting from disease except pu's forming infection which shall occur through bodily injury to which this insurance applies; * * (Insert in parentheses is ours.) It is substantially ■ conceded that the insured did suffer some bodily injury-on-January 29, I960-, - while occupying -his automobile, thus beginning the train of- events; -The-'issue is vdiethe'r 'that injury, under the terms of the policy •and our cases, operated as the requisite cause of his death. It should be noted that there was no medical or other expert testimony.

The plaintiff (appellant) presents these points: (1) that the Court erred in not sustaining its motion for a directed verdict and in failing to sustain its after-trial motion for judgment because: the evidence failed to show that the death resulted directly and independently of all other causes from bodily injury, and that this question was left in the realm of conjecture, without substantial evidence; the burden resting upon defendant required her to establish that cause of death by credible medical testimony and with “reasonable medical certainty”; the policy provisions are clear and unambiguous, and the courts may not rewrite them under the guise of construction. Defendant, answering, submits: that the death certificate made a prima facie case for her, establishing that the back injury was the “direct, proximate, efficient and producing cause” of the death; that the hospital records speak as though the physicians making them .were present and had testified, hearsay being thus obviated; that necessary medical or surgical treatment for a bodily injury and resulting in death, is not an intervening 'cause breaking the. causal connection, but constitutes á death from bodily injury within the meaning of' the policy; that insurer, having offered no evidence to rebut defend- ' ant’s prima facie case, cannot escape liabili- ''' ty by building “inference upon inference,” as to the related (and stated) causes of the death.

We may start with the proposition that the beneficiary of a policy of accident insurance always has the burden of proving a cause 'of death which is within the insuring provisions. Caldwell v. Travelers’ Ins. Co., 305 Mo. 619, 267 S.W.2d 907, 39 A.L.R. 56; Phillips v. Travelers’ Ins. Co. of Hartford, Conn., 288 Mo. 175, 231 S.W. 947; Gennari v. Prudential Ins. Co. of America, Mo., 335 S.W.2d 55; Boring v. Kansas City Life Ins. Co., Mo., 274 S.W.2d 233. This burden remains upon the beneficiary throughout the case (Boring, supra; Felker v. Metropolitan Life Ins. Co., Mo. App., 288 S.W.2d 26), although upon the establishing of a prima facie case the insurer may be required to go forward with evidence. Defendant insists here that she made a prima facie case and, since plaintiff produced no evidence, her case was sufficient to sustain the verdict. She cites the statute, § 193.170, RSMo 1959, V.A.M.S., to the effect that a death certificate is prima facie evidence of the facts stated therein, and also, Felker v. Metropolitan Life Ins. Co., Mo.App., 288 S.W.2d 26; Boring v. Kansas City Life Ins. Co., Mo., 274 S.W.2d 233. The principle is recognized; some of its limitations are stated in Callahan v. Connecticut General Life Ins. Co., 357 Mo. 187, 207 S.W.2d 279. The difficulty here lies in the inconsistencies and insufficiencies inherent in this particular certificate. The causes stated were (a) myocardial failure, (b) cerebral anoxia, and (c) cardiac arrest. When these are considered, along with the printed instructions, they clearly mean that the "underlying cause” was the cardiac arrest or heart stoppage, which led to the other complications stated in the certificate, and presumably to all, or nearly all, of those stated in the autopsy report. Cerebral an-oxia simply means a lack of oxygen in the brain. Thus, the heart arrest and impaired heart action (then and thereafter) resulted in a decreased and insufficient supply of oxygen to the brain and lungs with resultant congestion, sundry complications, and ultimate death. Defendant seeks her principal support from Part 11 of the certificate, namely: “Part 11. Other significant conditions contributing to death but not related to the terminal disease condition given in Part 1(a) Pt was being operated upon for back condition originating from auto accident — occurring—1-29-60.” So far as this case is concerned, the first (and printed) phrase, ending with “Part 1(a),” is inconsistent within itself, and so much so as to make it, and the following notations, meaningless without adequate medical explanation. One may not pick out the element of “contributing” and disregard the words “not related to.” In this situation we hold that the notations concerning the operation do not, in and of themselves, show that either the operation or the automobile injury was the cause of death. And even if we disregarded the inconsistency, defendant’s burden of proof would not be satisfied merely by a showing that the injury contributed to the death. Thus, the death certificate did not, in itself, make out a submissible case.

There can be little question here that the underlying cause of the death was the cardiac arrest. The pervading issue and question is, — what caused the cardiac arrest? True, it occurred during the operation, but no layman can state authoritatively that the operation or the anesthetic caused the arrest or, on the other hand, that the operation was merely coincidental. The jury was left to speculate. See, generally: Franklin v. Kansas City Public Service Co., 239 Mo.App. 151, 186 S.W.2d 546; Hutchison v. Aetna Life Ins. Co., 182 Or. 639; 189 P.2d 586; Vargo v. New York Life Ins. Co. (DC Md.), 180 F.Supp. 638. And lay testimony of prior apparent good health does not supply this deficiency. Frank v. Atlanta Life Ins. Co., Mo.App., 211 S.W.2d 940; Aetna Life Ins. Co. v. Kelley (CA 8), 70 F.2d 589; New York Life Ins. Co. v. Feinberg, Mo., 229 S.W.2d 531, 537; Hendricks v. National Life & Acc. Ins. Co., 240 Mo.App. 557, 210 S.W.2d 706; Adelsberger v. Sheehy, 332 Mo. 954, 59 S.W.2d 644. We hold that expert, medical evidence was necessary here to show the cause of the cardiac arrest. Defendant’s counsel insist, as already indicated, that the hospital records fill in this gap. We do not so interpret them. Assuming the propriety of the argument that the records speak with the same authority as would the doctors if they were on the stand, it is still true that nowhere do the records state the cause of the cardiac arrest. They do state its occurrence during the operation, the restorative measures used, and the various findings upon autopsy and otherwise, all leading back to the bare occurrence of the cardiac arrest.

Ordinarily such an injury as the insured suffered in this minor automobile accident would not result in death, even though a herniated disc ensued. There is authority, however, to the effect that proper and necessary medical or surgical treatment (including anesthetics) for an accidental injury does not break the chain of causation between the accidental means of the injury and the death, where the death is caused by the treatment or operation. 29A Am.Jur., Insurance, §§ 1219, 1220, pp. 361-362; Ballam v. Metropolitan Life Ins. Co., 295 Mass. 411, 3 N.E.2d 1012, 108 A.L.R. 1; Collins v. Casualty Co. of America, 224 Mass. 327, 112 N.E. 634, L.R.A.1916E, 1203; Gardner v. United Surety Co., 110 Minn. 291, 125 N.W. 264, 26 L.R.A.,N.S., 1004; Travelers’ Ins. Co. v. Murray, 16 Colo. 296, 26 P. 774, 25 Am.St.Rep. 267. Indeed, plaintiff seems to concede this principle, stating in its brief: “Surgery to correct and alleviate injury does not break the causal connection between the injury and death but to support recovery there must be that causal connection established between the injury and death." The cases which we have cited are not recent cases, and we find no such, but the principle is analogous to that which permits a recovery as for death by accidental means where the immediate cause of death is a disease which has, in turn, been directly caused by an accidental injury. See Mutual Benefit Health & Accident Ass’n v. Francis (CA 8), 148 F.2d 590; Aetna Life v. Kelley (CA 8), 70 F.2d 589; Bellows v. Travelers’ Ins. Co., Mo., 203 S.W. 978; Anderson v. Mutual Benefit Health & Accident Ass’n, Mo.App., 231 S.W. 75. It should be noted, however, that in such cases medical testimony has very generally (if not always) been produced to establish the causation.

We do not consider the principles just discussed as in anywise in conflict with the case of Caldwell v. Travelers’ Ins. Co., 305 Mo. 619, 267 S.W.2d 907, 39 A.L.R. 56, which has long been the Missouri law and which we now re-affirm. There it was held that a death from thrombosis and an intestinal obstruction, occurring as the result of an operation voluntarily sought and skillfully performed, was not a death resulting solely from accidental means, even though the result may have been unexpected and unforeseen. We are discussing now operations or treatment fairly shown by medical testimony to have been necessitated by an injury which was directly caused by accidental means. And we are not, hereby, abolishing the distinction between “accidental means” on the one hand, and an accidental result or a mere “accident,” on the other.

The present judgment might be reversed without remand. We have held, however, that where it appears that the evidence has not been fully developed, it is permissible to remand the case. We shall do so here, in order that defendant may develop by expert medical testimony, if so advised and if such testimony is available: (1) the medical necessity for the operation in question as the regular and proper treatment, and (2) the cause of the cardiac arrest, with its ensuing complications.

While no question is raised on this appeal concerning instructions, the parties might be well advised to consider the case of Gennari v. Prudential Ins. Co. of America, Mo., 335 S.W.2d 55, upon another trial. That case may be particularly applicable if the evidence develops either a pre-exist-ing causative disease, or some bodily infirmity or weakness. If a causative effect from the operation itself is developed, that element should be considered in the instructions. Plaintiff’s Instruction No. 6 omits all reference to the cause of the cardiac arrest, and defendant’s Instruction No. 2 omits all reference to the operation itself, a basic fact in the chain of circumstances.

The judgment is reversed and the cause remanded for further proceedings in accordance with this opinion.

All concur.


source: Caselaw Access Project

author: SPERRY, Commissioner. PER CURIAM:

license: Public Domain

text:
    THOMPSON et al., Plaintiffs-Appellants, v. James J. ALLAIN, Defendant-Respondent.
    No. 23809.
    Kansas City Court of Appeals. Missouri.
    Feb. 3, 1964.
    Floyd M. Sprague, Joseph K. Houts, Sprague, Wilcox & Houts, St. Joseph, Hale Houts, Thad C. McCanse, Houts, James, Randall, Hogsett & McCanse, Kansas City, for appellant.
    Richard T. Brewster and Paul C. Dugan, Kansas City, for respondent
   SPERRY, Commissioner.

Plaintiffs are partners, practicing medicine and surgery and conducting a Clinic in St. Joseph, Missouri, and surrounding territory, under the firm name of the Thompson, Brumm and Knepper Clinic, hereafter referred to as Clinic. Plaintiffs will be referred to as partnership. Defendant is a former member of the partnership but voluntarily resigned on June 2, 1962, and engaged in the practice of medicine and surgery at 2022 Swift, in North Kansas City, Missouri, for a monetary consideration. Plaintiffs instituted suit seeking to enjoin and restrain defendant from carrying on the practice of his profession within a fifty (50) mile radius of the corporate limits of St. Joseph, Missouri, alleging it to he in violation of the restrictive terms of the partnership agreement existing between the plaintiffs and defendant on the date of, and prior to, the latter’s voluntary resignation and withdrawal from the partnership. Judgment was for defendant and plaintiffs appeal.

This is an equity case. It is for trial de Novo. Our review is with deference to the findings of the trial chancellor on unreconcilable, directly conflicting verbal testimony, on fact issues; and his findings are usually sustained unless the.overwhelming weight of the evidence appears to be against them. The rule does not extend to evidence in the form of depositions or documents. Sebree v. Rosen, Mo., 349 S.W. 2d 865, 872. Plaintiffs, in their motion for a new trial, challenged the sufficiency of the evidence to support the judgment. They contend that, under the evidence, the judgment should have been for them. We will review the case upon both the law and the evidence and, if possible, give such judgment as the trial court should have given, as shall seem agreeable to law. Rejected testimony, if in the record and admissible, will be considered, and any incompetent testimony admitted or considered by the trial court will be disregarded. Minor v. Lillard, Mo., 289 S.W.2d 1, 2.

Dr. Thompson, a senior partner and a plaintiff, stated that plaintiffs constitute all of the senior partners of the Clinic, at this time; that defendant is an ophthalmologist (an eye specialist) ; that he became an employee in 1956, and became a senior partner in the Clinic January 9th, 1959; that witness and two other medical practitioners organized the Clinic in 1946; that their surgical practice, at that time, was located in St. Joseph but extended outward from one hundred (100) to one hundred fifty (150) miles, including Kansas City; that they intended adding to the membership of the partnership from time to time; that they adopted a covenant, binding on all members, not to engage in the practice of medicine or surgery, for a monetary consideration, for a period of three years after ceasing to be a partner, at any point within a radius of fifty (50) miles from the corporate limits of St. Joseph; that, thereafter, specialists in various categories of the medical practice were added as partners until the total membership was, at the time of the trial, twenty-three; that, since defendant’s resignation, there had been no ophthalmologist at the Clinic; that the Clinic has treated 109,000 individual persons since its establishment; that from 300 to 500 patients per day are being treated; that patients come from a radius of one hundred fifty (150) miles; that there was no criticism of defendant’s services ; that, when he intimated that he would resign, witness interviewed him, tried unsuccessfully to dissuade him, and was told that he would enter practice at Milwaukee, Wisconsin; that, when it was learned that defendant would practice in North Kansas City, he was told that such would be in violation of the restrictive covenant.

Various documents were introduced without objection, including the partnership agreement containing the restrictive covenant. It was signed by all of the then senior partners, including defendant, when he became a senior partner on January 9th, 1959. The partnership agreement, including the covenant, was re-executed by all partners, including defendant, in 1961, when a new partner was admitted.

The covenant provides, in part, as follows :

“In the event of the withdrawal or retirement from the partnership of any senior partner * * * or in the event of' the resignation, removal or discharge of' any staff member from the Clinic, such former senior partner or former staff member shall not for a period of three (3) consecutive years, commencing from the time when his membership in or employment by the partnership shall cease, engage or reengage in the practice of medicine and surgery for a monetary consideration in the City of St. Joseph, or in the County of Buchanan or elsewhere within a radius of fifty (50) miles from the corporate limits of the City of St. Joseph, Missouri * *

The evidence was to the effect that the corporate limits of St. Joseph were extended as of December 30th, 1958; that highway 29 was opened for travel in 1960, reducing the road distance between St. Joseph and 2022 Swift, North Kansas City, defendant’s present business address; that, prior thereto, the road distance between the two points was more than fifty (50) miles; that the distance, since December 30th, 1958,. has been less than fifty (50) road miles; that it is forty air miles from the center of St. Joseph to defendants office; that, from the perimeter of the corporate limits of St. Joseph to Seventy First Street and Bannister Road, in Kansas City, Missouri, (which is a further distance than is 2022 Swift, North Kansas City) it is fifty (50) air miles; that in 1961, when the defendant re-executed the partnership contract, including the covenant, the distance was less than fifty (50) miles both by road and air. Defendant stated that “radius” is a straight line drawn from the central point to the periphery of the circle. Of course, a mile along such a line would be the same as an air mile. Defendant voted, in September, 1959, with other staff members to enforce the restrictive covenant as to a former member of the staff who was withdrawing therefrom and who had requested suspension of the provisions of the covenant.

The restrictive covenant was not en-forcéd against Dr. Andrews who-left the Clinic in 1953, Dr. Sauer, 1954, and Dr. Schertz in 1955. All engaged in the medical practice in North Kansas City, without protest from plaintiffs. Dr. Schertz continued with the Clinic part time, for awhile after he was re-established. However, plaintiffs and defendant voted to enforce the covenant, in 1961, as against a resigning staff member, but there is no evidence as to where he proposed to practice his profession. Defendant stated that he was told by a senior partner, representing the partnership; when he first visited the Clinic to consider employment, that the covenant did not apply to North Kansas City; and that it was stated by a senior partner, at a board meeting of all partners, that the covenant did not apply to Kansas City or North Kansas City. Dr. Schertz testified similarly as to other board meetings. The phrase “twenty (20) mile radius” was interpreted by plaintiffs to mean road miles in connection with the use by partners of their private automobiles in their practice. Defendant was told by plaintiffs, prior to ■re-engaging in practice, that North Kansas City was within the fifty (50) mile zone, and that the covenant would be enforced. He stated that he thought they were bluffing. He denied that he was ever told that “miles” meant air miles. He stated that, during the thirty (30) days that he practiced at his new location, prior to being enjoined, he saw ninety-nine former Clinic patients, and a total of one hundred twenty one (121) from the area between St. Joseph and North Kansas City.

Contracts of this character, between physicians and surgeons, will ordinarily be enforced in equity on the grounds that, for breach of such a covenant, there is no adequate remedy at law, and that the obj ect of the contract can be attained only by the parties conforming expressly and exactly to its terms. 28 Am.Jur. Injunctions, page 626, par. 127; Glover v. Shirley, 169 Mo.App. 637, 155 S.W. 878, 879; Gordon v. Mansfield, 84 Md.App. 367, 373, 374.

In Daniel v. Goesl, 161 Tex. 490, 341 S.W.2d 892, a covenant of this character was enforced against a physician who retired from a partnership. The restriction covered one County in Texas and one in Arkansas. In Cogley Clinic v. Martini, 253 Iowa 541, 112 N.W.2d 678-681, there was a covenant prohibiting a physician who should retire from his association with the Clinic from re-engaging in practice in Council Bluffs, or within a radius of twenty five (25) miles thereof, for a period of three years. It was held to be reasonable and was enforced. In Lareau v. O’Nan, Ky., 355 S.W.2d 679, where a physician had contracted not to re-engage in practice in Henderson County within a period of five (5) years after having left employment with a Clinic. It was held to be a reasonable restriction and was enforced by injunction. In Beam v. Rutledge, 217 N.C. 670, 9 S.E.2d 476, the court enforced such a restrictive covenant against a physician leaving the employment of another physician. The restriction was as to the town of Lumberton or within one hundred (100) miles thereof, for a period of five (5) years.

According to the weight of authority, the contract here considered is reasonable and definite in its terms. However, defendant contends that he did not understand the restriction to include North Kansas City, when he joined the staff, that plaintiffs had so stated in open meetings of the partnership. If the word “miles” as used in the contract, means road miles, as defendant contends, then it was more than fifty (50) road miles between the two cities when defendant became an employee, and in 1959 when he became a partner. But, in 1961, all of the partners, including defendant, re-executed the contract. At that time the road mile distance to defendant’s office in North Kansas City was less than fifty (50) miles because of the opening of a new highway.

However, the language used, radius of fifty (50) miles, without qualification, could not mean road miles. Johnson v. McIntyre, 309 Pa. 191, 163 A. 291; Pennsylvania Threshermen & Farmers’ Mutual Casualty Ins. Co. v. Messenger, 181 Md. 295, 29 A.2d 653; LeMaine v. Seals, 47 Wash.2d 259, 287 P.2d 305, 311. It is common knowledge that roads do not extend from a given place in a straight line, to every point on the compass. This instrument cannot be rendered ambiguous by verbal statements made long prior to its execution in 1961. Material changes in the physical size of St. Joseph, and in the highway had occurred before 1961. Defendant was warned that, no matter what may have gone before, plaintiffs considered North Kansas City to be within the restriction and would enforce it. He chose to disregard the warning because he thought plaintiffs were bluffing. Plaintiffs delivered this warning as soon as they learned that defendant was not going to locate in Milwaukee, as originally planned, but was going to practice in North Kansas City, and before he had begun his new practice.

The fact that some of the plaintiffs did not invoke the covenant as to other retiring partners does not amount to a waiver as to defendant. The partnership, as it existed when previous members retired and located in North Kansas City, may have had good reasons for not having objected to such conduct. We are here concerned with the agreement as executed in 1961, and with the position taken by the partnership as it existed at the time defendant located his private practice in North Kansas City. Eichelsbach v. Harding, Mo.App., 309 S.W.2d 681, 686.

The judgment is reversed. It is the judgment of this court that defendant be, and is, enjoined and restrained from practicing as a physician and surgeon in North Kansas City, Missouri, within the corporate limits of St. Joseph, Missouri, and at any other location within a radius of fifty (50) air miles measured from the corporate limits of the City of St. Joseph, Missouri, for a period of three (3) years from and after the effective date of his resignation as a partner in the Clinic, June 2nd, 1962.

MAUGHMER, C., concurs.

PER CURIAM:

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

HUNTER, J., not participating.


author: CROSS, Judge.

text:
    STATE ex rel. DONIPHAN TELEPHONE COMPANY, Plaintiff-Appellant, v. PUBLIC SERVICE COMMISSION, Defendant-Respondent.
    No. 23950.
    Kansas City Court of Appeals. Missouri.
    April 6, 1964.

      Forrest C. Donnell, St. Louis, for appellant.
    Glenn D. Evans and Thomas J. Downey, Jefferson City, for respondent.
   CROSS, Judge.

This is an appeal from the judgment of the Circuit Court of Cole County affirming orders issued by the Public Service Commission in its Case No. 14,399, directing the Southwestern Bell Telephone Company to-furnish telephone service in an area, located) in Madison County, known as the “Three Mile Strip”. The case originated upon the petition of residents of the area requesting that they be afforded telephone service by Bell. In proceedings before the Commission the petitioners were opposed by Bell and also by respondent Doniphan Telephone-Company. The circuit court reviewed the Commission’s orders pursuant to Doniphan’s, application for a writ of certiorari or review. No review was sought by Bell. Don-iphan alone has appealed from the circuit court’s judgment of affirmance.

The appeal was originally directed to the-Supreme Court. Doniphan attempted to invoke that court’s jurisdiction on grounds-that the case involves the construction of" the Constitution of the United States and the Constitution of the State of Missouri.. The Supreme Court determined that the appeal presented no issue which would require-construction of a constitutional provision and that there did not appear to be any other basis for vesting jurisdiction in that court. Accordingly, the case wase transferred to-this court. See, State ex rel. Doniphan Telephone Company v. Public Service Commission of Missouri, Mo.Sup., 369 S.W.2d 572.

This proceeding was commenced before the Commission on January 4, 1960, by the-filing of an informal petition signed by W. R. Meyers and 48 other residents of the-three mile strip, in which they stated that they had no telephone service, that they wished to .have telephone service in their area and that it was their desire to have such service rendered to them by Bell through its Fredericktown exchange because they lived close to and transacted most of their business in the Fredericktown community.

The -three mile strip is a narrow piece of land, three miles deep, running along the extreme southern boundary of Madison County, beginning three miles east of Iron ■County and running east for a distance of 17i/2 miles. Fredericktown and Marquand are the two principal cities of Madison County, the former being the county seat. The greater portion of Madison County receives telephone service from Bell out of its ■exchange operated at Fredericktown. Bell's Madison County service area extends southward to the three mile strip but does not include it, although Bell has maintained five toll stations in the three mile strip for several years. Bell’s lines and service facilities extend at some points to within 100 yards of the three mile strip.

.The Doniphan Company operates in several counties out of several exchanges. On July 9, 1951, the Commission granted Doni-phan a certificate of convenience and necessity to render telephone service, among other places, in the town of Greenville and adjacent territory which included “that part of Wayne County north of Greenville to the Madison County line”. Some years later Doniphan’s president, Dee A. Rice, made a “visual survey” of the three mile strip area by driving over the territory, observing the houses and farms and talking to the people. On the basis of the survey, and on November 21, 1957, Doniphan filed with the Commission a “map” of the three mile strip with a schedule of rates applicable thereto. This was done without notice to the residents of the area, without a hearing, and without any accompanying or ensuing order issued by the Commission thereon. It is Doniphan’s claim that by so filing the map of the three mile strip, that territory became a part of its certificated' Greenville Exchange area. Doniphan has never rendered telephone service in the three mile strip and has not offered to furnish such service. Its nearest telephone line is nineteen miles distant from the area.

The Commission treated the petition filed herein as a complaint, and, upon due notice to Bell • and Doniphan, held two formal hearings in which both companies participated and opposed the petitioners. At the first hearing petitioners adduced evidence showing that: the residents of the three mile strip have never had telephone service; Fredericktown is the county seat of Madison County and is serviced by Bell; the Bell also services Marquand and its community; a majority of petitioners are employed in Fredericktown or Marquand and transact substantially all of their business and do their banking in those towns; they receive their police and fire protection and their medical, ambulance and undertaking services from Federicktown and Marquand; their children go to school at Marquand; petitioners desire telephone service but do not want to be served by Doniphan because, in that event, most of their calls to points within their own county would be “long distance” and require a toll charge; instead, it is their desire to be served by Bell through the Fredericktown exchange.

Doniphan' took the position at the hearing that the Commission should not order Bell to service the three mile strip area, and urged the Commission to hold the entire proceeding in abeyance until such time as it would take to put into effect a proposed program of general expansion, referred to by Doniphan as its “Comprehensive Plan”. Under this project Doniphan planned to add several exchanges in its territory, construct 250 additional miles of line and install certain new equipment, including several microwave stations and “modern” dial equipment. In order to effect this plan it was necessary that Bell and the American Telephone and Telegraph Company make certain “physical connections” with Doniphan’s lines. It was shown by Doniphan that it had filed a petition with the Federal Communications Commission praying for an order upon Bell and American requiring them to make the desired “physical connections”. The application is opposed by Bell, is still pending, and has not been docketed for«hearing. Doniphan also has on file an application to the Rural Electrification Administration for a loan of $1,000,000.00 which is necessary to carr.v out the Comprehensive Plan.

Doniphan represented to the Commission that if the Federal Communications Commission sustained its application and ordered Bell and American to make the necessary physical connections, and if Doniphan obtained the $1,000,000.00 loan from the Rural Electrification Administration, then, at some future time when the Comprehensive Plan might be completed and put into effect, Doniphan could provide telephone service in the three mile strip. This service would be furnished through a proposed new exchange in the one-store village of Clubb.

Otherwise, and under the conditions then presently existing, Doniphan could offer no practical plans for serving the area. Doni-phan’s President Rice testified that the cost of extending telephone facilities into the three mile strip would exceed the revenue that would be derived from the extension and that the company would be reluctant to furnish telephone service to petitioners under existing rules and conditions “because it would be a losing proposition to us at the very best” and because “it would be a heavy burden on the subscribers”. Rice admitted that construction cost charges might run as high as $500.00 or $1000.00 to each patron. He was unable to say “how long it would be before we would be able to offer them service”.

On August 10, 1960, the Commission issued a preliminary order directing Bell to make a survey of the area referred to as the three mile strip to determine the number of people who would actually become subscribers to Bell’s service, and to determine, in general, the feasibility of rendering that service to such subscribers. The order further provided that the Commission retain jurisdiction for the purpose of granting a certificate of convenience and necessity to Bell “if, in the opinion of the Commission, such service is found to be feasible and not confiscatory to that company”.

At a second hearing, held on February 20, 1961, Bell’s report was received and entered of record and further evidence was heard, directed principally to the question of the feasibility and cost of extending Bell’s lines into the three mile strip and the rendition of telephone service therein by that company. It developed from the evidence that Bell owns unused transmission line facilities sufficiently close to the three mile strip that it can further extend those facilities into that area and furnish service to petitioners without requiring them to make contributions in aid of construction. Following this hearing, and on May 19, 1961, the Commission entered a supplemental order directing Bell “to make use of its present unused facilities located along Highway 67, or in the Marquand area, in the southern part of Madison County and provide facilities in connection therewith to render telephone service to the Complainants therein located in the Three Mile Strip and furnish toll and Fredericktown Exchange service to said Complainants under the same conditions and rates that are now in effect throughout the Fredericktown Rural Exchange area”.

Doniphan complains here, as it has in prior proceedings, that the action taken by the Commission “was unreasonable and unlawful and impairs the constitutional rights of Doniphan Telephone Company”. These contentions will be disposed of without deciding any constitutional question. In transferring the case to this court, the Supreme Court said: “It is not necessary to construe any constitutional provision in order to determine that contention. It may be decided by a construction of the applicable statutes for the purpose of ascertaining whether the Commission exceeded its authority in making the orders”. State ex rel. Doniphan Telephone Company v. Public Service Commission of Missouri, supra.

The orders of the Commission in this case are prima facie lawful and reasonable. Section 386.270 V.A.M.S.; State ex rel. Egan v. Public Service Commission, Mo.App., 319 S.W.2d 917. As the complaining party prosecuting this appeal, Doniphan carries the burden to make a convincing showing that the orders complained of are unreasonable or unlawful. Section 386.430 V.A.M.S.; State ex rel. Chicago, Rock Island & Pacific Railroad Company v. Public Service Commission, Mo.Sup., 312 S.W.2d 791. The issues raised on this appeal are not triable de novo by this court. The reviewable question before us is whether the Commission’s orders are reasonable and lawful. Section 386.510 V.A.M.S.; State ex rel. City of West Plains v. Public Service Commission et al., Mo.Sup., 310 S.W.2d 925.

This appeal is squarely founded on the theory and premise that Doniphan is vested with a “property right” in the three mile strip, to-wit, the exclusive authority to render telephone service in that area, and that the Commission’s orders upon Bell to serve the area constitute an unlawful impingement upon that right and wrongfully deprive Doniphan of its “property”. In support of this proposition Doniphan argues that “The law contemplates monopoly operation of a telephone exchange in a given area”, and that “a certificate of convenience and necessity is not to be granted to another company for a territory which is already furnished adequate telephone service by a company over which the Public Service Commission has full jurisdiction”. Although conceding that the law does not vouchsafe a monopoly to the system which is already in the field, and that the law would favor the granting of identical authority to another utility to enter the same area if the utility which had pre-empted that area should be negligent, remiss or derelict in its duty to render service, Doniphan submits there has been no showing of negligence, remissness or dereliction on its part in discharging the trust it holds to afford telephone service. Therefore, says Doniphan, since there has been no forfeiture of its right to serve the subject area without competition, the Commission is not legally justified in directing Bell to enter and serve the territory.

All the foregoing directs inquiry to this fundamental question: What legal authority, if any, has been granted Doniphan to render its service in the three mile strip? Doniphan’s claim to the area is expressed in these words, quoted from its brief: “By order dated July 9, 1951, Doniphan Telephone Company was granted a Certificate of Public Convenience and Necessity to own, maintain and operate the Greenville exchange * * *. By the filing with the Public Service Commission of Map effective November 21, 1957, the Three Mile Strip was placed in the Greenville exchange of said company”. It is not disputed that on July 9, 1951, the Commission granted Doniphan a certificate of convenience and necessity for the Greenville exchange area, and that such certificate did not include the three mile strip. It is also a matter of record that on November 21, 1957, Doniphan filed a map of the three mile strip in the office of the Commission. It further appears from Doniphan’s own evidence that other than the affixation of its filing stamp, the Commission performed no act or made any order in respect to the map. There was no notice of the filing given to any person or utility and no hearing was held. It is argued by Doniphan (1) that the affixation of the filing stamp constituted approval of the map by the Commission and that thereby the three mile strip delineated thereon was placed in the Greenville exchange area and became a part thereof, and (2) that the Commission recognized such annexation by incorporating in its conclusions the clause “when this territory was placed in the Greenville exchange by the practice of filing a map including the area to be added * * ”. Summarizing, it may be said that Doni-phan’s claim of authority to serve the three mile strip rests solely upon two factors, to-wit: (1) the fact that in 1951 it was granted a certificate for its Greenville area (which did not include the three mile strip), and (2) the act of filing a map of the three mile strip in 1957.

It is not the law that a telephone utility is privileged to annex additional territory to its certificated service area by the simple act of filing a map. The legislature provided otherwise by its enactment of the Public Service Commission Law. That body of statutes provides a complete system of law for the regulation of public utilities by the commission it has created. Public Service Commission v. Kansas City Power & Light Co., 32S Mo. 1217, 31 S.W.2d 67. The legislature has seen fit to vest the Public Service Commission with exclusive authority to allocate the territory in which a particular utility may render service, by providing that the Commission shall pass upon the question of the public necessity and convenience for any new or additional company to begin business anywhere in the state, or for an established company to enter new territory. State ex rel. City of Sikeston v. Public Service Commission of Missouri, 336 Mo. 985, 82 S.W.2d 105; Public Service Commission v. Kansas City Power & Light Co., 325 Mo. 1217, 31 S.W.2d 67; State ex rel. Harline v. Public Service Commission of Missouri, Mo.App., 343 S.W.2d 177. This delegation of authority to the Commission, as it applies specifically to telephone utilities, was effected by Section 392.-260 V.A.M.S. This section is contained in Chapter 392 V.A.M.S., which applies specially to telephone and telegraph companies, and provides in part as follows: “No * * * telephone corporation hereafter formed shall begin construction of its * * * telephone line without first having obtained the permission and approval of the commission and its certificate of public convenience and necessity, after a hearing had upon such notice as the commission may prescribe”.

Section 392.260 V.A.M.S. has its counterpart in Section 393.170 V.A.M.S., contained in Chapter 393 of the Public Service Commission Law specially applicable to gas, electrical and water companies. Section 393.170 contains the following provisions: “1. No gas corporation, electrical corporation or water corporation shall begin construction of a gas plant, electric plant or water system without first having obtained the permission and approval of the commission. * * * 3. The commission shall have the power to grant the permission and approval herein specified whenever it shall after due hearing determine that such construction or such exercise of the right, privilege or franchise is necessary or convenient for the public service”.

In Public Service Commission v. Kansas City Power & Light Co., 325 Mo. 1217, 31 S.W.2d 67, the Supreme Court construed present Section 393.170, in connection with other pertinent provisions of the Public Service Commission Law, and reached the following conclusions:

“A reasonable construction of the Public Service Commission Act forces the conclusion that it was the intention of the Legislature to clothe the commission with exclusive authority to determine whether or not the furnishing of electricity to a given town or community is a public necessity or necessary for public convenience, and, if so, to prescribe safe, efficient, and adequate property, equipment, and appliances in order to furnish adequate service at reasonable rates and at the same time safeguard the lives and property of the general public, those using the electricity and those engaged in the manufacture and distribution thereof.
“If, as appellant contends, an electrical corporation which has a certificate of convenience and necessity to operate its plant in a given town or community might extend its lines to and furnish other communities with electricity without a certificate or authority from the commission, the purpose of the statute would be defeated. Under such a construction of the statute the commission would have no opportunity to determine whether or not public convenience and necessity demanded the use of electricity in the community to which the line was extended, and no opportunity to prescribe the safe and efficient construction of said extension or determine ■whether or not appellant was financially able to construct, equip, and operate such extension and furnish adequate service at reasonable rates in the new community, without crippling the service in the community where the commission had theretofore authorized it to operate”.

The same reasoning and logic applied by the Supreme Court in its decision from which we have above quoted, relative to an electrical company under the purview of Section 393.170, applies with equal force to telephone companies under Section 392.-260. These two statutes are similar in provisions and purposes. Both clearly contemplate that any right of the nature here claimed can be obtained only by securing a certificate of convenience and necessity from the Commission, after proper notice and a hearing. Since there is no showing by Doniphan that it has complied with these requirements, it is necessarily our conclusion that it has no authority to extend its telephone lines into the three mile strip and render telephone service in that area. Hence, we further rule that Doniphan possesses no property right whatsoever in the three mile strip. In arriving at these conclusions we have duly considered the single authority Doniphan has submitted, to-wit, the following quoted excerpt from the report of the Commission in Re Louisville Community Farmers, 5 Mo., P.S.C.(N.S.) S2, 84: “The service area maps previously described were filed with the Commission and by operation of law became effective. As such they are binding upon the Commission, the applicants and the utilities unless the Commission finds them to be unreasonable and arbitrary”. Nothing contained in the foregoing can be held to derogate the clear requirements of the Public Service Commission Law.

In ruling that Doniphan has no property right in the three mile strip, we have effectively disposed of Doniphan’s principal assignments, which, stripped of constitutional aspects, are to the effect that the Commission’s action unlawfully deprives Doniphan of its property and wrongfully tafees or damages its private property for public use without just compensation. A nonexistent property right cannot be violated or subjected to eminent domain.

Doniphan additionally complains that the action taken by the Commission in this case during the pendency of its application to the Federal Communications Commission “could adversely affect the prospects of Doniphan Telephone Company in said proceedings”. Even if it be assumed that the Commission’s action might adversely affect Doniphan’s chances of prevailing in the federal forum, we think that contingency has no relevance to this appeal. We find no merit in the assignment.

Doniphan’s remaining contention is a charge that the action of the Commission in denying Doniphan’s offer, made at the second hearing, to prove that it had “a proposal to make to the people in the Three Mile Strip which it deems to be better for the proposed customers than the provisions of the tariff itself” was unreasonable and improper and constitutes material and reversible error. This complaint was not contained in Doniphan’s application for a rehearing as a ground on which it considered the Commission’s action to be unlawful, unjust or unreasonable. It is provided by Section 386.500 V.A.M.S. that “Such application (to the Commission for a rehearing) shall set forth specifically the ground or grounds on which the applicant considers said order or decision to be unlawful, unjust, or unreasonable. No corporation or person or public utility shall in any court urge or rely on any ground not so set forth in said application”. By force of this statute, we are precluded from considering the assignment. State ex rel. City of West Plains v. Public Service Commission, Mo.Sup., 310 S.W.2d 925.

From our review of the record required by Doniphan’s appeal complaints, and particularly from the portions we have summarized and set out in this opinion, we are convinced that the orders issued by the Commission are based on competent and substantial evidence and are, therefore, reasonable. Moreover, considering the comprehensive authority to regulate telephone companies and their services that has been vested in the Commission by Sections, No. 386.250, No. 386.320, No. 392.260, No. 392.240, No. 392.250, No. 386.610, and No. 386.040, V.A.M.S., it is also our opinion that the Commission has not acted in excess of its statutory powers. Consequently, we find that the Commission’s orders in this case are lawful.

The judgment is affirmed.

All concur.


author: MAUGHMER, Commissioner. PER CURIAM.

text:
    EASTMAN KODAK STORES, INC., a Corporation, Appellant, v. Charles W. SUMMERS and Margaret Ann Summers, Respondents.
    No. 23901.
    Kansas City Court of Appeals. Missouri.
    April 6, 1964.

      Harry T. Limerick, Jr., Columbia, for appellant.
    Robert C. Smith, Smith & Lewis, Columbia, for respondents.
   MAUGHMER, Commissioner.

Plaintiff Eastman Kodak Stores, Inc., began this litigation with a replevin action against defendants for the recovery of photographic equipment which plaintiff had sold to defendants. This equipment originally cost more than $13,000 and there was a balance due of $11,400. Defendants counterclaimed, alleging breach of warranty and asking damages. The replevin action was tried to the Court and terminated in a judgment for plaintiff, from which no appeal has been taken. The counterclaim for damages was tried to a jury, resulting in a verdict and judgment for defendants in the sum of $7,000. The company’s appeal is before us for determination.

Eastman declared two points on its appeal and in the following exact phraseology: (1). “Motion for directed verdict by appellant should have been sustained”; (2) ■“Motion for new trial should have been granted”. Under its first point appellant says defendants failed to prove (a) breach of warranty and (b) loss of profit. Under its second point appellant says the Court erred in giving Instructions D-l and D-3, erred in refusing Instruction P-A and that ■“one juryman was not qualified”.

Plaintiff Eastman Kodak Stores, Inc., was engaged generally in the business of photography and the merchandising of photographic equipment. The defendants Charles W. and Margaret Ann Summers, husband and wife, were operators and owners of the Charles-Mar Studio in Columbia, Missouri. In the spring and summer of 1959, defendants discussed the purchase of a “film processing plant” with Mr. Ross Tunnell, manager of plaintiff’s St. Louis store. These negotiations resulted in the purchase by Mr. and Mrs. Summers from Eastman Kodak Stores of a film processing plant with automation equipment at a total cost of more than $13,000.

Mr. Summers testified that Eastman’s manager Tunnell told him he would receive technical training in the operation of the equipment and process, but that he received no such training; that he was promised the help of a qualified technician for at least two weeks, but that this expert stayed only two hours. He said Eastman agreed to complete installation and have the plant in operation by September 15, 1959, but installation was not completed until the last of September. Summers said Mr. Christensen, Eastman’s field representative, assured him the machine would do top quality work. Columbia is a school town and Eastman’s manager Tunnell admitted defendants needed to be in operation early in September, the beginning time of the school year. The technician furnished was Mr. Joseph C. Brunnert, who had commenced this type of work only one month earlier and this job was his first installation.

Mr. Summers described numerous defects and breakdowns attributable to either defective equipment or faulty installation, or both. He testified that the chemical tanks were hooked to the wrong outlets, resulting in brown films being developed, especially for Stephens College, which led to the loss of that valuable account; the electric motor burned out and a replacement was not delivered for several days; the timing device on the printer “broke down”, the plant drier and the numbering device which numbered each photograph and also the customers’ envelopes broke down numerous times; the picture cutting device was improperly mounted, cut the prints into little pieces and Summers finally got another company to install it properly; the leader belt broke and it took four days to secure a replacement; one of the solenoids was defective, so was the replenishing valve, and as a result it “caught fire”. He stated that the “plant had never run right” since it was installed and breakdowns were frequent over the more than two year period which elapsed from the time of purchase until the commencement of the replevin suit.

Joseph C. “Speedy” Brunnert, Eastman’s installing- expert, admitted that the “hoses were improperly installed causing contamination of the chemicals”; that they had trouble with the thermostat, the timer on the printer, the cutter; that the motor burned out and the chain drive on the processor did not function properly.

Mr. and Mrs. Summers testified that they lost numerous photo finishing accounts, including Stephens College, Crown Drugs, Campus Town Grocery, Miller’s Rexall Store, Barnett’s Drugs, Alsop-Turner, and others. They said each of these accounts was lost because of the breakdowns and defects which caused poor processing and unduly delayed service. Numerous representatives of these business customers confirmed the fact that they had taken their business elsewhere for these reasons.

Mrs. Summers was the bookkeeper for the Charles-Mar Studio. She testified from the books and records as to their photo finishing business for 1960, 1961 and 1962 from a financial statement and as follows: For the year 1960, gross receipts $6,513.29, expenses $4,502.06, leaving a profit of $2,-011.23. For 1961, gross receipts $1,590.51, expenses $4,848.21, for a loss of $2,257.70. For 1962, gross receipts $841.45, expenses $4,111.00 or a loss of $3,269.55,

Mr. and Mrs. Summers claimed special installation costs of $1,234.84 for electrical work, plumbing, lumber, carpentering, special photo material and telephone toll charges. Their studio apparently held onto a substantial part of their photo finishing business during 1960. In any event, the business was profitable for that year. However, they testified that the breakdowns continued and as a result they were unable to render prompt and efficient service. It was their testimony that their losses incurred in the operation of the photo finishing business for 1961 and 1962 totaled $6,378.70. It was their estimate that reasonable profits on the volume of business should have reached $4,022.46.

It is our belief that the record shows substantial and credible evidence that (1) Eastman warranted the quality of the equipment sold, represented it would be properly and expertly installed and that repairs and replacements would be promptly forthcoming. It might, we think, reasonably be expected that some defects or “bugs” would show up in connection with the installation and operation of an extensive and complicated equipment and process such as this one. However, the extent of defective equipment and the frequency of breakdowns far exceeds any reasonable expectancy. We approve the action of the trial court in submitting the case to the jury and in denying the motion for directed verdict.

The evidence set forth in some detail shows substantial damage was sustained by Mr. and Mrs. Summers as a result of this enterprise. Their actual cash outlay for special installation expense, special operating material, telephone toll charges to expedite repairs, and costs for'having films processed elsewhere, totaled $1,238.84. Their evidence as to actual losses on their photo finishing business resulting from this defective equipment which in turn resulted in lost accounts, totaled $6,368.70. These two elements of damages, without considering alleged loss of profits, amounted to more than $7,000, the amount of the verdict and judgment. We hold the verdict is not excessive and is supported by' the evidence.

Appellant complains specifically as to the giving of Instructions D-l and D-3 and the refusal of the Court to give Instruction P-A. We set out Instruction D-l:

“The Court instructs the jury that if you find and believe from the evidence;
“1. That Eastman Kodak Stores, Inc. orally warranted and represented to Charles W. Summers and Margaret Ann Summers that the photo finishing equipment mentioned in the evidence was reliable and would do top-quality photo finishing and that in the event that there were any difficulties with such equipment, it would promptly correct these difficulties; and
"2. That these representations and warranties were made to induce the Summers to purchase this equipment; and
“3. That these warranties did induce the Summers to buy the equipment and they would not have bought it except for these warranties; and
“4. That this equipment was not as warranted; that it repeatedly broke down so that the Summers were unable to give prompt and dependable photo finishing service to their customers; and
“5. That the Summers made repeated requests of the Eastman Kodak Stores Inc., to repair the equipment according to their warranties but that such repairs were not promptly made; and
“6. That as a direct result of such equipment not being in the condition warranted and the failure of Eastman Kodak Stores, Inc. to make prompt repairs as warranted, the Summers (were) damaged; then your verdict must be for the counterclaimants Charles W. Summers and Margaret Ann Summers and against Eastman Kodak Stores Inc.”.

Appellant says the instruction is defective because it does not require a finding that the respondents properly cared for and “maintained and lubricated” the equipment. The instruction required the jury to find affirmatively, that: (1) Eastman warranted and represented that the equipment was top quality and that the company would promptly correct any defects which developed; (2) that the Summers relied on the warranties; (3) the equipment was not first class but repeatedly broke down and that Eastman did not promptly repair and (4) that the Summers were damaged. We believe this instruction contains all the essential elements required by the issues as drawn in this case, is supported by the evidence and the Court did not err in giving it.

In Collins v. Rankin Farms, Mo. App., 180 S.W. 1053, 1054, the court said: “Each party is entitled to an affirmative submission of his theories of the case which are justified by the law”. If Eastman believed and had some evidence that the breakdowns were caused by Summers’s neglect and failure to lubricate or properly maintain the equipment it should have offered an instruction submitting that defense. However, during the trial Eastman neither contended nor offered any evidence that the breakdowns were caused by failure to lubricate or properly care for the equipment by Mr. Summers. Therefore such a defense was not properly submissible to the jury even if offered. There must be evidence presented upon which to base it before a factual defense may be submitted to a jury.

Instruction D-3 on the measure of damages authorized such an award as “will fairly and reasonably compensate them for their losses, if any, which they sustained as a direct result of the breach of warranties íjC 2¡S ‡ J)

In Martin v. Kansas City, Missouri, Mo., 340 S.W.2d 645, 650, the measure of damages instruction was phrased this way: “ * * * in such a lump sum ‘as will reasonably and justly pay or compensate him for the injuries and conditions directly resulting from the negligence of the defendant * * * ’ ”. The court approved this general instruction on the measure of damages and commented: “Moreover, defendant, if its counsel desired, had the privilege of tendering an instruction more particularizing or limiting the damages to be allowed by the jury, (citing cases)”. We overrule the exception as to Instruction D-3.

Eastman offered and the Court refused to give Instruction P-A. This instruction stated simply that if the Sum-merses “were not engaged in the photo finishing business prior to the purchase of the photo finishing equipment * * * then * * * there is no prior established business from which a loss of profits, if any, can be ascertained and the court instructs the jury to disregard any testimony as to loss of profit that was given in this case”. Loss of profit is a proper element of damage under a breach of contract or warranty.

In 25 C.J.S. Damages § 42, pp. 516, 517, the rule is stated this way:

“There may be a recovery for loss of profits shown to he the natural and probable consequence of the act or omission complained of, provided the amount thereof is shown with sufficient certainty.
* * * * * *
“The rule does not apply to uncertainty as to the amount of the profits which would have been derived, but to uncertainties or speculation as to whether the loss of profits was the result of the wrong, and whether any such profits would have been derived at all”.

New Deal Tire Co. v. Jarratt, Mo. App., 79 S.W.2d 744, is a case where plaintiff’s business was organized April 3, 1933 and it received the first defective shipment on April 12, 1933. Recovery of damages was permitted even though plaintiff’s business had just started. The court did not err in refusing to give Instruction P-A.

The verdict in this case was entered on January 30, 1963. On or about February 16, 1963, information came to the trial court that one of the jurors, Crutchfield, had in 1924, been duly adjudicated to be a person of unsound mind and had never been restored. On March 1, 1963, the Court, on its own motion, held a hearing and considered the propriety of granting a new trial because of this fact. At this hearing there was testimony to the effect that juror Crutchfield | operated a farm, bought and 1 sold livestock, transacted other farm business, and appeared to be normal. Dr. V. P. Dryer, the juror’s physician for many years, said he had treated Crutchfield for epilepsy but believed he was of sound mincLj The court refused to grant a new trial on account of juror Crutchfield. We cite some Missouri statutes which are pertinent to the question:

Section 494.010, V.A.M.S., Qualification of jurors.

“Every juror, grand and petit, shall be a citizen of the state, * * * so- ] her and intelligent, of good reputation, over twenty-one years of age and otherwise qualified”.

Section 494.050, V.A.M.S., Exceptions to qualifications, when taken, states:

“No exception to a juror on account of his citizenship, nonresidence, state or age or other legal disability shall be allowed after the jury is sworn”.

The verdict in this case was signed by 10 jurors. Nine jurors (excluding Crutch-field) could have returned a verdict, but authorities are numerous that a litigant is entitled not to just nine, but to a jury of twelve impartial qualified jurors. Moore v. Middlewest Freightways, Inc., Mo., 266 S.W.2d 578, 586. Technically, under the statute (494.050, supra) it was too late after the jury was sworn, to except to the juror’s “ * * * other legal disability * * * ”.

In State v. Barr, Mo.App., 20 S.W.2d 599, 600, the court allowed the verdict to stand where one juror was a minor and counsels’ voir dire inquiries had not revealed this disqualification.

In Allen et ux. v. Chicago, R. I. & P. Ry. Co. et al., 327 Mo. 526, 37 S.W.2d 607, 609, where two of the jurorg could neither read nor write, the court said:

“We have uniformly ruled that the qualification of a juror is a matter of exception, and where, as in this case, a party fails to question a juror as to his qualifications, when the juror is examined on his voir dire, and does not challenge such juror for 'cause, an cb-jection to such juror made after the jury is sworn comes too late”.

Courts are very reluctant to set aside jury verdicts when it later develops that one juror did not possess all of the technical qualifications. Verdicts will not be set aside on this account unless it appears that the losing parties’ rights were thereby impaired and substantial justice requires such action. If the rule were otherwise, verdicts might be ambushed and overthrown —sometimes willfully and by lying in wait— even in those cases where it clearly appears that a fair trial was had and no litigants’ rights were really prejudiced.

Wide discretion is vested in the trial court in determining whether or not a new trial should be granted in a case where a juror is probably not technically qualified or there is some question if he made a complete and frank disclosure on voir dire. Massman v. Kansas City Public Service Co., Mo., 119 S.W.2d 833, 838. We rule that the trial court did not abuse its discretion in denying a new trial because of the disclosures as to the juror Crutchfield.

Respondents have moved that the appeal herein be dismissed because appellant did not file its transcript within the time authorized. (Rules 82.18 and 82.19, Rules of Civil Procedure, V.A.M.R.) and because appellant’s brief contains abstract statements of law rather than a specification of the errors claimed as required by Rule 83.05. The motions by respondents under the facts of this case are not frivolous motions. Appellant is not in strict compliance with the rules, especially as to timeliness in the filing of the transcript. However, in the exercise of our appellate discretion, we have determined to rule this case upon the merits, rather than to consider and determine it upon the compliance or noncompliance with the prerequisite requirements for appellate review as contained in the rules cited above.

The judgment is affirmed.

SPERRY, C., concurs.

PER CURIAM.

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

All concur.


text:
    Fred CARAVEO, Plaintiff-Appellant, v. DUMAS-MILNER CHEVROLET CORPORATION, Defendant-Respondent.
    No. 23906.
    Kansas City Court of Appeals. Missouri.
    April 6, 1964.

      Arthur T. Stephenson, Stephenson, Henry & Schollars, Kansas City, for appellant.
    Downey, Abrams & Sullivan, Leo L. (Pat) McCormick, Kansas City, for respondent.
   SPERRY, Commissioner.

Plaintiff sued defendant for damages growing out of the purchase, by him from defendant, of a new Chevrolet Station Wagon. The cause of action submitted is based upon fraud and misrepresentations. From a judgment in favor of plaintiff in the sum of $3,670.85, actual damages, and for $2,500.00, punitive damages, defendant appeals.

The facts are not in dispute. On June 10th, 1958, plaintiff visited defendant’s place of business for the purpose of buying a new Chevrolet automobile. Defendant’s salesman showed plaintiff a new Nomad Station Wagon, equipped with “level aire suspension”. 1958 was the first year that General Motors had produced cars with level aire suspension but defendant’s salesman, Hicks, told plaintiff that level aire suspension was designed to keep the body level in a way similar to the way springs would do. Plaintiff knew nothing about this feature of the car and relied on what Mr. Hicks told him. Mr. Hicks also mentioned that a warranty accompanied all new cars. Plaintiff and his wife drove the car a short distance and he agreed to buy it. As consideration therefor he traded in his 1953 Mercury automobile, subject to encumbrance, and $200.00 cash. The agreed purchase price was $3,670.85, and the balance thereof, over and above the “trade in” and the $200.00, was paid by a note, secured by chattel mortgage, payable to defendant. Defendant sold the note to G. M. A. C., a finance company.

Plaintiff accepted delivery of the car at defendant’s place of business and drove it out. Plaintiff relied on defendant’s salesman’s representation to him that it was a new car and in good mechanical condition. He said that he would not have bought it but for those representations. A few minutes after having driven the car out of the defendant’s place of business, it began smoking. He stated that he called defendant’s service department and was told to close a valve and drive it to defendant’s shop. He stated that the back end went up and the front end went down; that he drove it slowly to defendant’s shop and was told there that the compressor had blown up; that he waited several hours while repairs were made; that within less than a week, a fan belt broke and he returned the car for repairs; that, afterward, it was just a series of fan belts, compressors, and valves; that he became afraid to drive it to his home; that, many times when the back end was up and the front end down, it would scrape gravel while going up hill; that he was constantly in the garage, sometimes at night; that such conditions continued during the entire five months that he kept the car, sometimes “two, three or four times a week; sometimes I was in there all afternoon waiting for it”, that sometimes the car “was sitting to one side” ; that it would sit right down on its axle; that he would have to start it up and let it run for thirty minutes to get it to rise up so that he could operate it; that, sometimes, after leaving it at defendant’s for repairs, he would get no further than a block therefrom, when a belt would come off; that this occurred on numerous occasions; that he would have to return to defendant’s garage and wait for repairs.

Plaintiff stated that, after he had had the car for three weeks and had no satisfactory service from it, he suggested to defendant’s salesman, Hicks, that he return the car and that defendant deliver to him his old car and rescind the transaction; that defendant refused to accede to this proposal but offered to sell plaintiff a different car if he would pay an additional $250.00; that plaintiff did not have that much money and retained the Station Wagon; and that no deal of any kind regarding a settlement was ever thereafter made or mentioned with or to defendant.

Plaintiff stated that, after he had had the car for about five months, after having made two payments on the note, and after having written to several officials of General Motors Company about its mechanical defects and its general unfitness as a motor vehicle, he notified G. M. A. C. that he would make no further payments on the mortgage and asked that the car be repossessed; that G.M.A.C. took possession of the car; that, later, demand was made upon him for payment of the entire balance of the note; that he does not know where the note is or what became of it.

A Mr. Johnson testified for plaintiff by deposition. He stated that he purchased this automobile from defendant in December, 1958, paying $3,000.00 therefor. He detailed, in several pages of testimony, the troubles he had with the automobile. In short, it performed for him in about the same unsatisfactory manner that it had operated for plaintiff. He stated that, when he bought it, the front fender was up and the back fender was down; that it was crooked; that the aire ride was out of adjustment; that defendant told him that it would take only a minor adjustment to fix it; that he later learned that it was not a minor adjustment that was needed; that defendant repaired it; that, three days later, it was sitting crooked again; that the “front fender was always up and the rear fender * * * was always down”; that this went on weekly, for from two and one half to three months; that the car was finally fixed, about three months and one week after he bought it.

Mr. Hicks, testifying for defendant, did not contradict any part of the above testimony but, on tile contrary, confirmed it as a whole.

Defendant contends that the Court erred in overruling its motion for directed verdict at the close of all of the evidence. It is so urged on the grounds that plaintiff’s own evidence showed an estoppel on his part to proceed against defendant in fraud after his voluntary rescission or abandonment of the contract; that his attempt to so proceed was an inconsistent remedy with his election to rescind the contract, thereby fixing not only his remedy but his damages, if any; that plaintiff, having elected to rescind, cannot later pursue a different remedy.

In this case, defendant’s pleading consisted of a general denial. It did not plead estoppel, as is required by the provisions of Section 509.090, R.S.Mo., 1959, V.A.M.S. At no time, by pleading or in any other manner, did defendant suggest its reliance on estoppel as a defense, even in its motion for a new trial. It appears for the first time in the brief.

Defendant contends that it is not necessary to plead estoppel if the facts establishing that defense appear in plaintiff’s own evidence as, it is claimed, it does appear here. It is not necessary, in this case, to rule this contention because it was not established by the evidence that plaintiff elected to rescind so as to bar an action based on fraud and misrepresentations. . ■ .

It is true that plaintiff, some three weeks after the contract of sale was made, offered to return the Station Wagon if defendant would restore him to his condition prior to the consummation of the contract. But that offer was rejected by defendant, who made a counter offer, which in turn, was rejected by plaintiff. The parties, thus, remained in the same position that they occupied prior to the offer and rejection of rescission. Neither had thereby suffered any detriment. Plaintiff, thereafter, made two monthly payments on his note and continued fruitlessly to drive his car to defendant’s shop for repairs, every few days. This conduct by plaintiff continued for more than four months following his rejected offer of rescission. He constantly sought action on the part of defendant, and from various officials of General Motors, to remedy the conditions which made the car virtually useless for the purposes for which he purchased it. Such conduct on plaintiff’s part is wholly inconsistent with renunciation or rescission of the contract.

To constitute an estoppel in pais, three things must occur: first, an admission, statement, or act inconsistent with the claim afterward asserted and sued on; second, action by the other party on the faith of such admission, statement, or act; and, third, injury to such other party, resulting from allowing the first party to contradict or repudiate such admission, statement, or act. An equitable estoppel cannot arise unless justice to the rights of others demand, its office being not to work a positive gain to a party, but to protect him from a loss which he could not otherwise escape, and hence should be limited to what is necessary to put the parties in the same relative position they would have occupied if the predicate of the estoppel had never existed. Waugh v. Williams, 342 Mo. 903, 119 S.W.2d 223, 226. Appellants position was not changed by plaintiff’s offer of rescission, which was rejected; nor by his voluntary surrender of the motor vehicle to the finance company. The' latter action probably was to-defendant’s benefit, rather than to its detriment. It probably resulted in mitigating the damage to defendant. An offer to rescind the sale in this case did not exhaust plaintiff’s right to elect another remedy. Marquis v. Pettyjohn, Mo.App., 212 S.W.2d 100, 104.

The judgment is affirmed.

MAUGHMER, C., concurs.

PER CURIAM:

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

All concur.


text:
    A. P. BAILEY, M. K. Crain and J. Ensign, Plaintiffs-Appellants, v. STATE FARMERS MUTUAL CASUALTY CO., a Corporation, et al., Defendants-Respondents.
    No. 23984.
    Kansas City Court of Appeals. Missouri.
    April 2, 1964.

      Stephen J. Millett, Kingston, Frank L. Pulley, Cameron, for appellants.
    Watson, Ess, Marshall & Engass, Kansas City, for respondents.
   SPERRY, Commissioner.

Plaintiffs, policy holders of State Farmers Mutual Tornado Insurance Company (hereafter referred to as Tornado), organized under the laws of Missouri, instituted this as a class action for and on behalf of themselves and all policy holders of the company to recover for Tornado Company, $700,000.00 alleged to have been illegally transferred from Tornado Company to State Farmers Mutual Casualty Company (hereafter referred to as Casualty Company), a Mutual Insurance Company organized under the laws of Missouri. The individual defendants in the caption were policy holders and constituted the board of directors of both Tornado and Casualty. Judgment was for defendants and plaintiffs appeal.

Plaintiffs allege that they are policy holders and stockholders of Tornado; that they bring this action for themselves and for the 91,000 other policy holders, as a class, and for Tornado; and that they are truly representative of the class. They do not state facts tending to show how they were selected, or why or how they are truly representative of the class. They do not state facts showing, nor do they allege, that they made demands upon defendants for restitution of the illegally transferred funds, prior to institution of this suit. They allege that they made no demand to secure relief, prior to institution of this action; and the evidence established that they did not make any effort, of any kind, to secure correction of the wrongful act for which redress is here sought.

This action is brought pursuant to the provisions of section 507.070, V.A.M.S., providing the remedy which plaintiffs seek. Paragraph two (2) thereof is as follows:

“2. In an action brought to enforce a secondary right on the part of one or more shareholders in an association, incorporated or unincorporated, because the association refuses to enforce rights which may properly be asserted by it, the petition shall aver that the plaintiff was a shareholder at the time of the transaction of which he complains or that his share thereafter devolved on him by the operation of the law. The petition shall also set forth with particularity the efforts of the plaintiff to secure from the managing directors or trustees and, if necessary, from the shareholders such action as he desires, and the reasons for his failure to obtain such action or the reasons for not making the effort.” (Emphasis ours).

The above section is now Civil Rule 52.08 (b), the second paragraph of which, in part follows:

“The petition shall also set forth with particularity the efforts of the plaintiff to secure from the managing directors or trustees, and, if necessary, from the . shareholders, such action as he desires, and the reasons for his failure to obtain such action or the reasons for not making such effort.”

It is similar to Federal Rule 23. 28 U.S.C.A. page 146.

The evidence disclosed that Tornado was, by law, restricted to writing insurance covering losses on property by windstorm; that, in 1956, the board of directors and other policy holders, became aware that the public desired “package” insurance which would cover all of their losses and liabilities; that it became desirable that its policy holders should be able to secure, from one company, insurance covering all of their risks; that ways and means of making such services available to Tornado’s policy holders, and to its future policy holders, were discussed at various policy holder meetings; that, December 5th, 1957, the State Farmer’s Mutual Casualty Company was licensed to do business in Missouri; that it was created by Tornado and was, in effect, subsidiary to Tornado; that, on February 20th, 1958, a meeting of policy holders was held at the home office of Tornado for the purpose of considering and acting upon a proposal to transfer money by loan, to Casualty Company, to provide it witfú funds required by law, and with an operating fund; that the entire body of policy" holders, including plaintiffs, was notified of this meeting, and of the proposal to be considered; that plaintiffs did not attend the meeting, although they lived within a few miles of the home office and that said meeting was attended by approximately a hundred policy holders; that the proposition hereinbefore mentioned was discussed in open meeting; that no one spoke against it; that it was moved, seconded, and voted by an overwhelming majority of those voting, that Tornado finance Casualty Company; that, prior to said meeting, the defendant directors had sought and obtained the advice and opinion of a lawyer, approving such procedure; that they had conferred with the Superintendent and other officials of the State Department of Insurance; that such department officials approved the plan; that the policy holders, at said meeting, voted instructions to Tornado directors to transfer $700,000.00 of Tornado’s funds to Casualty, to be used in financing it; that no policy holder suggested that such action was ultra vires the corporation; that said funds were, on February 24th, 1958, transferred to Casualty Company; that, on March 5th, 1958, plaintiffs filed this suit.

It is shown that each and every policy holder, including these individual director defendants, had one, and only one, vote to be cast at any meeting of policy holders, on any subject to be considered or acted upon at such meeting; that, if any person should cease to be a policy holder, he was no longer entitled to cast a vote, and had no further interest of any kind in Tornado; that these individual defendants received, as their sole remuneration for services, a modest per diem for attending meetings of policy holders, and of the board of directors. None of the defendants could profit to any further extent from the formation of Casualty, or from the fact that Tornado financed it with $700,000.00 of its funds, even though they were directors in hoth companies.

Before Tornado transferred any funds to Casualty, action was taken so as to make the directors of Casualty the same persons as were the directors of Tornado, and to provide that the interlocking directorate remain in effect until Casualty should have repaid Tornado the full sum to he transferred to it.

Ten days after this suit was filed, (March 15th, 1958), a special meeting of the hoard of directors of Tornado was held to consider what action to take. The minutes of the meeting recited that no policy holder had, prior to transfer of the funds, objected to or questioned the proposed transfer; that, if any objection had been made, the board would have seriously considered the matter; and that, if the objection appeared to “warrant”, the board would have refrained from further action. It was requested, by resolution, that Casualty cease from further action and incur no further expense. On the same date the board of Casualty adopted a resolution to comply with the above request of Tornado.

On March 22nd, 1958, Tornado requested Casualty to cease further operations and to refund to Tornado all funds which had been transferred to it. The board also discussed with counsel the matter of amending its charter so as to authorize Tornado to enter the Casualty Insurance business. On March 22nd, Tornado requested Casualty to wind up its business. On the same date Casualty withdrew its application (dated February 27th), for a license to do an insurance business, and authorized and directed return of $700,000.00 to Tornado. On March 28th, Casualty repaid more than $550,000.00 and, by June 1st, had repaid the entire $700,000.00. It was agreed, in open Court, that full restitution has been made. All that remains in controversy on this appeal is the question of whether or not plaintiffs are entitled to attorney’s fees.

The Court found that plaintiffs had wholly failed to comply with the provisions of section 507.070(2), supra, in that they had failed to demand intra-corporate relief from defendant directors, or from the stockholders of the corporation; or to offer evidence sufficient to excuse them for failure to do so.

The law is that, in order for minority stockholders to maintain a class action such as this, they must allege with particularity what steps they took prior to institution of the suit, to secure the relief sought. It is not sufficient to allege, as plaintiffs did here, as a legal conclusion, that relief was not demanded because it would have been a useless and futile thing. Vogeler v. Punch, 205 Mo. 558, 103 S.W. 1001, 1005-1006; Caldwell v. Eubanks, 326 Mo. 185, 30 S.W.2d 976, 979, 72 A.L.R. 621; Schick v. Riemer, 263 S.W.2d 51, 54. It is not enough to make proper allegations; it is necessary that they be proved. But, in this case, it is alleged that no demand for redress had ever been made “because and for the reason that such demand would be futile and unavailing and would be a useless thing or procedure.” That allegation is the same as no allegation. Vogeler v. Punch, supra, 103 S.W. 1006.

Minority stockholders are excused from making demand for redress where such demand would be vain and useless. Caldwell v. Eubanks, supra; Schick v. Riemer, supra. But that rule does not apply here for the reason that no demand was made nor was there any evidence offered which tended to prove that such a demand would have been unavailing. Plaintiffs say that it would have been useless to make demand because the directors were the wrongdoers. Demand should have been made in accordance with the statute and the rule. The stockholders controlled Tornado. The directors each had one vote, a total of nine votes. There were 91,000 stockholders, each having one vote. These individual defendants could not have defied the will of 91,000 stockholders, each with one vote.

This situation is unlike that in cases where the exception to the rule has been applied. Vogeler v. Punch, supra, 103 S.W. 1005.

The able trial judge also found that plaintiffs had failed to comply with the provisions of Civil Rule 52.09(a); that they failed to prove that they were fairly chosen and that they adequately and fairly represent the stockholders as a class. With that finding we agree. However, we need not further discuss that feature. What we have already said is sufficient to dispose of the case.

The judgment is affirmed.

MAUGHMER, C, concurs.

PER CURIAM:

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

BROADDUS, P. J., and HUNTER, J., concur.

CROSS, J., not sitting.