author: WELBORN, Commissioner.

text:
    Joseph DeBOLD and Margaret DeBold, his wife, Plaintiffs-Appellants, v. John LESLIE and Katherine Leslie, his wife, Defendants-Respondents.
    No. 50345.
    Supreme Court of Missouri, Division No. 1.
    July 13, 1964.
    Motion for Rehearing or to Transfer to Court En Banc Denied Sept. 14, 1964.

      Charles M. Shaw, Clayton, for respondents.
    William R. Hirsch, Clayton, for appellants.
   WELBORN, Commissioner.

This is a dispute over a driveway. The plaintiffs-appellants sought to prevent the defendants-respondents from barricading a driveway and to quiet title in plaintiffs to a tract of ground on which a por-, tion of the drive was located. The trial court found for the defendants, without any findings of fact or conclusions of law. After an unsuccessful motion for new trial,, plaintiffs appealed to this court. Jurisdiction of the appeal is in this court because the petition sought a judgment which would determine title to real estate.

The site of the land in dispute is in St. Louis County, at the corner of Lackland and Schuetz Roads. On August 30, 1949, plaintiffs acquired a tract of some 1.105 acres at that location. Their lot was part of a tract of farm land, which, insofar as was shown, was never 'platted. At the time of the plaintiffs’ purchase, there was a new residence on the lot. A chat driveway-led from Schuetz Road, at its intersection with Lackland, to the house. According to plaintiffs, they did not have a survey of the lot made at the time of their purchase. They testified that the real estate agent through whom they purchased the lot showed them its boundaries and told them that their driveway was within the boundaries of the lot which they purchased. There was introduced into evidence a survey of the lot, made August 8, 1949, which showed that the northeast corner of the tract purchased by plaintiffs was at the intersection of Lackland and Schuetz Roads, and that plaintiffs’ lot actually did not front on Schuetz Road. The plat showed a rock drive leading to the house which was, for a greater portion of its length, within the boundaries of plaintiffs’ lot. However, near its terminus at the northeast corner of the lot, the drive curved slightly to the east to reach Schuetz Road. The survey showed that, at such point, the drive was beyond the boundaries of the plaintiffs’ lot. The plaintiffs denied having seen the 1949 survey before the present dispute arose in 1962.

In 1950, the defendants purchased a tract of land on Schuetz Road to the south of the plaintiffs’ lot. It was a part of the same tract as plaintiffs’ lot, but did not adjoin plaintiffs’ lot, there being an intervening tract which contained the above-mentioned portion of the driveway which was beyond the boundaries of plaintiffs’ lot. The defendants erected a residence on their lot and lived there until the time of the trial.

The plaintiffs lived in the house on the lot which they purchased continuously thereafter and used the driveway at all times until their use was interrupted in 1962. During this time, plaintiffs put new rock on the drive on three occasions and in the spring of 1962, they put an asphalt surface on the drive.

At the time of plaintiffs’ purchase of their lot, the house did not have an address by street and number. When address numbers were assigned by the post office, the number assigned to plaintiffs’ residence was 1945 Schuetz Road. They erected a mail box bearing that number. For three years prior to the trial, the mail box bearing the numbers “1945” had been at the south edge of the driveway at its intersection with Schuetz Road.

In 1956, the tract lying between plaintiffs’ and defendants’ lots was offered for sale. Apparently there was some discussion between the parties as to whether one or the other of them should purchase the tract. Plaintiffs were not interested in doing so, and defendants purchased. The testimony as to what transpired at that time with respect to the driveway was in direct conflict.

According to the plaintiffs, the Leslies said nothing to them about the driveway at the time of the 1956 purchase or thereafter until September or October, 1962.

The defendants testified that, prior to their purchase of the intervening tract, a survey was made which showed that a portion of the driveway used by plaintiffs was located thereon. The Leslies testified that they took the survey plat and went on the property with the DeBolds and showed them that, according to the survey, their driveway at Schuetz Road was located on the intervening tract. According to the Leslies, the DeBolds did not agree with the survey and the Leslies said that they would not purchase the tract until there was agreement on the boundary between the two tracts. According to Mrs. Leslie, Mrs. DeBold telephoned a few days later and told her that “Joe had conceded that the surveyor was right and that we could go ahead and sign the papers.”

The Leslies testified that they thereafter purchased the tract. Mr. Leslie testified that, shortly after their purchase of the tract, he and his wife were visiting the DeBolds and he told Mr. DeBold that “they could use * * * the drive, because we had no immediate plans for it.” Leslie was unable to recall DeBold’s reply, if any. Mrs. Leslie testified that her husband told DeBold, in her presence, that “he could use the driveway until the time came that we needed it for other purposes or as long as we didn’t use it otherwise.” She could not recall what, if any, reply DeBold made.

There was no evidence of any further discussion of the drive until 1962. Sometime prior to September, 1962, the Leslies sought to obtain a change in zoning from single family to business of the tract which they purchased in 1956. The DeBolds appeared at a meeting of the St. Louis County Planning Commission which heard the application of the Leslies and spoke in opposition to it. The Commission denied the requested change.

After the hearing, Leslie told DeBold, according to the latter, that he had “caused him to lose out on his change-over on property and I would have to move my driveway, and I said I wouldn’t do it.” According to Leslie, in September, 1962, he told DeBold that he was going to sell his property and that DeBold would have to move his driveway and DeBold agreed to do so. DeBold did have a . survey made, which again showed the location of a portion of the drive on the Leslie lot. Apparently DeBold took no steps to alter the location of the drive.

On Saturday afternoon, December 1, 1962, the DeBolds returned to their house and found a fence in the driveway along the surveyed line between the two lots. The fence was an extension of one that ran along the entire boundary between the two lots. Mrs. DeBold testified that she was angered at the presence of the fence and removed it. When she did so, Mrs. Leslie came on the scene with what Mrs. DeBold described as a “long gun” and ordered her to put the fence back. According to Mrs. Leslie, the “long gun” was a BB gun. After a few “stiff words,” Mrs. DeBold walked away, without replacing the fence. The next day, a heavier fence, with concrete posts, was in place in the driveway, preventing plaintiffs from making use of the drive.

In their petition in this case, plaintiffs claimed that, since the acquisition of their property in 1949, they had continuously used a strip of ground described as “a triangular area about 30 x 78 feet at the base, and at the entrance of said driveway.” The petition alleged that plaintiffs’ use was open, notorious and under a claim of right and title.

The petition sought an injunction against defendants’ blocking of the driveway, actual damages in the sum of $2,235, punitive damages of $5,000, and a decree quieting title in the triangular 30’ x 78' strip to plaintiffs.

Defendants denied that plaintiffs were the owners of the disputed tract and alleged that the plaintiffs’ use of the property was permissive in origin and character.

On this appeal, the plaintiffs urge that the trial court should have found that their use of the drive for a period in excess of ten years was of such nature as to vest title therein in them by prescription. They further contend that the evidence relied upon by defendants to show that plaintiffs’ use was permissive was insufficient to establish such fact. The respondents seek to support the judgment of the trial court on the basis of a permissive use.

We do not have the benefit of express findings of fact by the trial court. However, by its judgment and decree, the court found the issues for defendants and against the plaintiffs. Inasmuch as the plaintiffs’ evidence considered alone would have warranted a finding in their favor, we must conclude that the trial court accepted as credible the testimony of defendants regarding the events which transpired in 1956 when the intervening lot was purchased. On the basis of such evidence, the trial court presumably found that at that time the plaintiffs acknowledged that a portion of the driveway was beyond the boundary of their lot and that they used it thereafter by permission of the defendants granted at that time. On the basis of such findings, there could be in the plaintiffs neither title by adverse possession to (Dalton v. Willis, 360 Mo. 329, 228 S.W.2d 709, 711(3); 2 C.J.S. Adverse Possession § 149, page 711), nor easement by prescription over (28 C.J.S. Easements § 14d, page 655), the disputed area.

This case was tried in the court below as an equity matter. This court on review makes its own findings of fact and conclusions of law. Lukas v. Hays, Mo.Sup., 283 S.W.2d 561, 565(3); Spaeth v. Larkin, Mo.Sup., 325 S.W.2d 767, 771(3). However, resolution of the conflict in the oral testimony of the parties in this case must, in the absence of a substantial basis for a contrary conclusion, depend largely on the trial court’s superior opportunity to observe the witnesses as they testified. Townsley v. Thielecke, Mo.Sup., 349 S.W.2d 902, 906(2); Spaeth v. Larkin, supra. We are unable, on the record before us, to say that the trial court erroneously accepted the defendants’ version of the 1956 evidence and that he should have accepted the plaintiffs’. The only witnesses who testified to the essential issues were the parties themselves. Therefore, each of the witnesses was interested in the outcome .of the litigation and each testified in behalf of his or her respective interest. We find nothing in the documentary evidence or the circumstances of the case which would cause us to reject the trial court’s determination of the issue of credibility. Leimkuehler v. Shoemaker, Mo.Sup., 329 S.W.2d 726, 731 (5, 6).

Accepting, therefore, the defendants’ version of the 1956 events, we must conclude that the trial court properly found that the plaintiffs acquired no right by either adverse possession or prescription in the area in dispute. The testimony was adequate to show that, at that time, the plaintiffs acknowledged that the portion of the driveway .here in dispute was on the adjoining lot and not on their lot. Further, it showed that, upon the defendants’ acquisition of the lot, permission was given plaintiffs to use the driveway. Plaintiffs assert that the evidence in this regard was not cogent and convincing and that defendants failed to carry their burden of coming forward with evidence to rebut the presumption that plaintiffs’ use, having continued for more than ten years, was adverse and not permissive. See Dalton v. Johnson, Mo.Sup., 320 S.W.2d 569, 573(6). However, we find the evidence sufficient to meet the defendants’ burden. The evidence must 'be viewed in the light of the parties’ situation at that time. They were apparently friendly, co-operative neighbors then. They undoubtedly did not foresee the difficulties which would arise between the two families and did not purport to express their legal relationship in terms which a legal draftsman would have employed. Nevertheless, we find the testimony regarding the defendants’ statements sufficient to show that, insofar as the parties to this litigation are concerned, the plaintiffs’ use of the portion of the driveway which was on the defendants’ lot was by permission of the defendants. On such basis, the trial court properly found the issues for the defendants.

Although in their petition plaintiffs also alleged matters which might be taken to have asserted a claim of right-of-way by necessity, on their appeal they have not urged this claim and are deemed to have abandoned it. In re Off-Street Parking Facilities, Kansas City, Mo.Sup., 287 S.W.2d 866, 867(1); Heuer v. Ulmer, Mo.Sup., 273 S.W.2d 169, 170(1), (2).

Plaintiffs on the appeal do assert that they should be granted relief on the basis of estoppel in pais based upon defendants’ failure to object when, in 1962, the plaintiffs made improvements of a permanent nature on the driveway, including that portion here in question. However, again, accepting the defendants’ version of the 1956 events, plaintiffs must be charged .with having improved the drive with knowledge that a portion of it was not on their lot. In such circumstances, the failure of defendants to object at the time to the improvement would not operate as an estoppel. Mills v. Taylor, Mo.Sup., 270 S.W.2d 724, 729; Wilkinson v. Lieberman, 327 Mo. 420, 37 S.W.2d 533, 536(4, 5).

The judgment of the trial court is affirmed.

HOUSER, C., concurs.

PER CURIAM.

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

All of the Judges concur.


source: Caselaw Access Project

license: Public Domain

text:
    Henry G. SIEMER et al., Plaintiffs-Respondents, v. SCHUERMANN BUILDING & REALTY CO. et al., Defendants-Appellants. Henry G. SIEMER et al., Plaintiffs-Appellants, v. The METROPOLITAN ST. LOUIS SEWER DISTRICT, Defendant-Respondent, Schuermann Building & Realty Co. et al., Defendants.
    Nos. 49962, 50023.
    Supreme Court of Missouri, Division No. 1.
    July 13, 1964.
    Motions for Rehearing or to Transfer to Court En Banc Denied Sept. 14, 1964.

      Harry J. Stadin, J. Raymond Dyer, St. Louis, for respondents.
    Charles B. Kaiser, Charles Clardy, John J. Shanahan, St. Louis, for defendant, Metropolitan St. Louis Sewer District.
    Bertram W. Tremayne, Jr., A. Wimmer Carr, Tremayne, Joaquin, Lay, Batts & Carr, Clayton, for Schuermann Bldg. & Realty Co., defendants-appellants.
   WELBORN, Commissioner.

This is a class action by 12 named plaintiffs on behalf of themselves and other persons similarly situated, all purchasers of houses and lots in a subdivision in St. Louis County, to recover on behalf of each plaintiff and member of the class the sum of $200 which the defendant subdivision developers had deposited with the defendant Metropolitan St. Louis Sewer District under an agreement which provided that, in the event of approval of a bond issue for a trunk sewer, the deposit would be returned to the “persons owning such lots” on the date of the election. The bond issue was approved at an election held on February 7, 1956. The plaintiffs had, prior to that time, entered into purchase contracts for lots, but deeds were not executed for them until after the election. Metropolitan Sewer Disr trict returned the deposits to record owners. The deposits here in question were returned to the owner-developers as the record owners on February 7, 1956. The trial court found for the plaintiffs and entered judgment against the owner-developers for an aggregate of $19,400. The court dismissed the petition as to Metropolitan Sewer District at the close of all the evidence. The owner-developers appealed from the judgment in favor of the plaintiffs and the plaintiffs appealed from the judgment dismissing their petition against Metropolitan Sewer District.

The owner-developers in this case are corporations affiliated with the Schuermann Building & Realty Company. The original agreement between Metropolitan Sewer District (herein referred to as MSD) and Land Investment Corporation was dated February 15, 1955 and covered Blocks 1 to 12 in a subdivision known as Northland Hills. Subsequent agreements were entered into between MSD and Land Investment Corporation covering specific lots in Blocks 1-12, inclusive. Each of the agreements was in a form prescribed by MSD. The form of the agreement was the same as that recently considered by this court in Milton Construction & Supply Company v. Metropolitan St. Louis Sewer District, Mo.Sup., 352 S.W.2d 685. The purpose of the agreement was to provide financing of construction of either trunk sewers or sewage disposal facilities for the subdivision which the owner proposed to develop. Each of the agreements required the owner-developer to construct sanitary sewers within the subdivision which were to be, and eventually were in this case, transferred to MSD.

Paragraph 7 of the agreement provided: “Before any construction is started on any lot within the parcel or subdivision, the Contractor shall deposit with the District the sum of Two-Hundred dollars ($200.00), to be held by the District for each lot for which a sanitary sewer connection has been requested. The District shall deposit and hold such sums, together with such other sums similarly deposited, in a separate account in a bank or trust company, and shall disburse therefrom, on one of the following conditions: * * Five conditions are thereafter specified. A. If a trunk sewer is constructed at a cost not in excess of the total amount of the deposits, such deposits are to be used in paying the subdivision’s costs of planning and constructing the trunk sewer and any balance remaining after such full payment is to be refunded ratably to the persons owning the lots on the acceptance date of the completion of the trunk sewer. B. If the deposit is not sufficient to cover the cost of the trunk sewer and the difference is not enough to warrant issuance of bonds, the District may build the trunk sewer and pay for it by special benefit assessments. Special benefit assessment bills issued against each lot are to be credited with the amount deposited for the lot and the lot owner shall be liable for the amount in excess of the deposit for the lot. Condition C, which is the condition here involved, is as follows: “If the District finds that it is impracticable to finance the construction of a trunk sanitary sewer or sewers in the manner set out in either A or B, above, and the subdistrict in which the said subdivision is located shall vote for the construction of a trunk sanitary sewer to be financed by any form of obligation of the subdistrict, the amounts held on deposit for the benefit of each lot shall be refunded to the persons owning such lots on the date that the indebtedness is authorized by such vote.” Conditions D and E are not involved in this case and shed no light on the construction of the applicable portion of the agreement.-

Pursuant to the requirement of the agreement, either Land Investment Corporation or other Schuermann affiliated corporations to which the lots were subsequently transferred made deposits of $200 each for a total of 284 lots in Northland Hills. Sales of lots within the subdivision began shortly after the February, 1955 agreement between. MSD and Land Investment Corporation. The Schuermann Building & Realty Company acted as general contractor and sales agent for the affiliated corporations in the construction and sale of residences in the subdivision. The system of selling involved first a choice by the purchaser of the lot which he elected to buy and the selection of the type of house which was to be constructed upon it. At that time a deposit was made with the sales agent, Schuermann Building & Realty Company and a receipt issued therefor which by its terms granted the purchaser a 3-day option on the purchase of a designated lot and the residence to be constructed thereon for a specified sale price. Thereafter, the purchaser went to the office of Schuermann Building & Realty Company for execution of an “Earnest Money Receipt and Sale Contract” between the purchaser and the owner corporation, through Schuermann Building & Realty Company. This document acknowledged receipt of the earnest money deposited and described the property involved and thereafter recited “which property is this day sold” to the purchaser. The contract provided for the payment of the balance of the purchase price and for closing of the transaction “on completion of property.” If not closed because of default of purchaser, $200 of the earnest money was to be forfeited to the seller and the contract became void. Construction of the house began after the contract had been signed and upon its completion, the transaction was closed and a deed delivered to the purchaser.

On February 7, 1956, an election was held at which voters in the Maline Creek Sewer Subdistrict approved a bond issue for the trunk sewers contemplated by the agreement between MSD and Land Investment Corporation. Prior to the election, sales of lots in Northland Hills had been made in accordance with the above described method. Before February 7, 1956, 89 houses and lots had been transferred by warranty deed to the purchasers. On February 13, 1956, trustees of MSD met .and discussed the Maline Creek election. The Chairman of the Board of Trustees, Mr. John Bogdanor, who was also general manager of what was described as the “Schuermann complex,” presided at the February 13th meeting of the Board of Trustees. At that meeting, the trustees decided that no further escrow fees should be collected for lots within the Maline Creek watershed. They further ordered that all escrow fees previously collected be refunded in accordance with the respective escrow agreements. The number of such agreements does not appear. Apparently there were several such agreements in addition to that between MSD and Land Investment Corporation. The minutes of the meeting show that there was a discussion of the method for obtaining the names of owners-of lots in the subdivisions who would be entitled to refund of deposits. The minutes, recite: “Suggestion was made that we contact subdividers for the names and address, of owners in their subdivision as of midnight, February 7, 1956, so that we can then-have the Title Companies confirm the owners of such properties on that date.”

On February 23, 1956, Mr. John P. Mc-Cammon, general counsel for MSD, directed a letter to Land Investment Corporation in which he stated: “Under our agreements with you we are required to make refunds, to the persons who were the record owners on February 7, 1956 of each of the parcels of land listed above. It will greatly facilitate our work if you will be kind enough to-furnish us the names of your immediate grantees, and the dates on which you conveyed, after which we will be able to have-the titles run.”

Lists were prepared by Schuermann and the affiliated owner corporations showing the names of persons to whom lots within the subdivision had been transferred prior to February 7, 1956, as shown by the 'Schu-ermann records. No reference was made to the fact that contracts of sale had been entered into as of that date for the sale of lots on which the deeds had not been delivered-For each of the 89 lots which had been transferred by warranty deed prior to February 7, a $200 refund was made to the record owner. For each of the remaining 195 lots, a $200 refund was made to Schuer-mann or the affiliated owner corporations. Included among these 195 were 97 lots which were under sales contract, but which were not transferred to the purchaser until sometime after February 7, 1956. No contracts had been made on February 7 for the Temaining 98 lots. In their petition, plaintiffs sought originally to obtain the deposits on behalf of the purchasers of the 98 lots not under contract as of February 7. However, that claim was abandoned and no question is here raised as to Schuermann’s right to the refund of the deposits as to such 98 lots.

The trial court found that the plaintiffs and the class whom they represented were beneficiaries of a contingent third party ■contract between MSD and Land Investment Corporation and that, as purchase contract holders, they should be considered “persons owning” the lots on the date of the election and that they were entitled to the refunds under the agreement.

In reaching this conclusion, the court relied particularly upon what it described as a “pattern of salesmanship,” found to have been followed by Schuermann’s office staff •and salesmen. Such pattern was based upon the testimony of a number of lot purchasers that, either at the time they selected their lots at the subdivision or at the time of the sales contract, Schuermann’s salesmen or office personnel told them that $200 of the earnest money deposited by the purchaser for each lot would be placed in escrow for construction of the Maline Creek sewer and that, if the bond issue passed, the $200 would be returned to the purchaser. The salesmen and office personnel charged with making such statements denied having made them. Bogdanor testified that salesmen on the project were instructed to make no reference to a sewer deposit. No reference to it is found in any of the sales documents introduced into evidence. However, the court found that such representations had been made and that the “pattern of salesmanship was indicative of the construction that should be placed on the refund provisions of -the- February 15, 1955 contract.”

The court further found that MSD “was clearly not liable to plaintiffs. Rather, it had been imposed upon by Schuermann.” The court concluded that by turning the deposits paid by MSD oyer to “its lot selling subsidiaries (Schuermann Building & Realty Company)' had breached the third party beneficiary contract its subsidiary Land Investment Corp. had entered into with Metropolitan, by which Schuermann was bound. * * * All of its lot selling subsidiaries named as parties defendant who received the refunds became liable for money had (and) received in violation of the third party beneficiary contract of February 15, 1955, by which contract they were bound.” A joint and several judgment was entered against Schuermann Building & Realty Company for $19,400 and against the several selling corporations for the amount of the refund each received.

On this appeal, the appellant Schuermann corporations make numerous allegations of error. However, their primary contention is that the trial court erroneously construed the February 15, 1955 agreement between MSD and Land Development Corporation to mean that purchase contract holders on the date of the election were “persons owning * * * lots” on that date. Schuer-mann’s position is that only record owners were entitled to the benefit of the refund provisions of the agreement. They rely primarily upon the construction given the agreement by the parties to it. They point to the action of the Board of Trustees of MSD on February 13, 1956, as showing MSD’s construction of the refund provision. Schuermann asserts that any other construction which would have required MSD to “sift out the various equitable interests would be perilous indeed and unreasonable.”

MSD, as respondent in the appeal from the judgment dismissing plaintiffs’ petition as to it, of course seeks to sustain the construction which it gave the agreement in making the refunds thereunder. They state: “Certainly from the very outset, MSD, which had prepared the agreement, indicated that its construction of the phrase ‘persons owning’ was intended to apply to ‘record’ owners.”

On this appeal, we take the issues as presented by the parties. No question has been raised as to the nature of the beneficial interest claimed by the plaintiffs, i. e., whether they are donee, creditor, or incidental beneficiaries.

“It is undoubtedly true that a contract may be made by two or more people so that a third party or third parties will be beneficiaries of the agreement. It is likewise true that one who claims to be such beneficiary must show either from the contract itself or from evidence, that he is the beneficiary, intended by the parties or is a member of a class of beneficiaries intended by the parties.” Hoge v. Farmers Market and Supply Company of Las Cruces, 61 N.M. 138, 296 P.2d 476, 479.

The term “owner” or the equivalent phrase “person owning” does not' have a fixed, definite meaning. In its restricted sense, it means “legal owner.” In a broader sense, it means any person beneficially interested in property. Granite Bituminous Paving Co. v. Parkview Realty & Improvement Co., 168 Mo.App. 468, 151 S.W. 479. The restricted meaning has been given the term “owner” in construing various tax statutes employing the term. See Millerson v. T. W. Doherty Land & Cattle Co., Mo.Sup., 241 S.W. 907; City of St. Joseph ex rel. Swenson v. Forsee, 110 Mo.App. 127, 84 S.W. 98. On the other hand, equitable owners have been held to be within the term “owners” as used in the mechanics’ lien statutes (see Hertel Electric Company, Inc. v. Gabriel, Mo.App., 292 S.W.2d 95, 98(4); Vasquez v. Village Center, Inc., Mo.Sup., 362 S.W.2d 588, 596(13)) and in contracts of insurance (see Avery v. Mechanics Ins. Co. of Philadelphia, Mo.App., 295 S.W. 509, 512(1)).

In view of the different meanings which could properly be attributed to the phrase “persons owning” and in the absence of any other provision of the contract itself which sheds light on the question, we must look for other evidence of the meaning of the phrase intended by the parties to the agreement. They had the right to determine between themselves to whom the refunds would be paid. If their determination can be established, it should be given effect, insofar as claims based upon the agreement are concerned.

In arriving at the parties’ determination, all of the facts and circumstances surrounding its execution and the practical application of the agreement may be taken into’ consideration. However, the evidence in this case is quite limited insofar as the circumstances surrounding the agreement are concerned. We are told that the agreement was in a standard form prepared by MSD. Similar agreements were used with respect to other subdivisions. See Milton Construction & Supply Co. v. Metropolitan St. Louis Sewer District, Mo.Sup., 352 S.W.2d 685.

“A bilateral contract containing many mutual promises may contain one specific provision for the conveyance of property to a third person. The meaning and operation of that provision and the existence of an enforceable right in the third person as a donee beneficiary may depend upon the purpose for which the provision was included. If, as one of the parties knew when the contract was made, the other party alone caused the provision to be put in for a purpose of his own, the purpose and interpretation of that other party becomes the sole issue in determining the rights of the third person. It is then just as if the provision was in a unilateral contract of donation.” 3 Corbin on Contracts, Sec. 537, p. 52.

Here the provision for return of the deposit to the persons owning the lot on the date of the election was placed in the agreement by MSD. Although there is no evidence that Land Development Corporation objected to the provision, we note that, in the Milton case, supra, objection by the contractor to the provision was unavailing. MSD insisted upon it as a condition for its approval of sewer plans, necessary if the land in question was to be subdivided and lots sold. In such situation, we would accord considerable, if not controlling, effect to MSD’s interpretation of the language which it insisted upon.

According to the only evidence of MSD’s interpretation of the agreement, “persons owning” were record owners, only. Whether or not they so advised Schuermann prior to the election, they did so shortly thereafter and Schuermann did not suggest a different interpretation.

The plaintiffs question the effect of the MSD interpretation because of Bogdanor’s position as Chairman of the Board of Trustees of MSD and as general manager of the “Schuermann complex.” However, we find nothing in the record to support the assertion in plaintiffs’ brief that it was Bogdanor “who caused MSD to interpret ‘owners’ as ‘record owners.’ ” They assert that “there is plenty of evidence that Mr. Bogdanor did just that.” However, the only evidence which they cite to support their assertion is the minutes of the meeting of February 13, 1956, of the Board of Trustees of MSD, and Bogdanor’s statement, on cross-examination, that he was a member of the Board of Trustees and his affirmative reply to the question whether he was “an important official of the Schuer-mann complex.” Bogdanor unquestionably presided at the meeting of February 13, 1956, at which action was instituted to refund the deposits. However, there is no showing that Bogdanor in any manner dictated the action taken by the board or even that he participated in the discussion of the subject. We find no evidence which supports the charges that Bogdanor dictated the construction which MSD followed and that he did so in the interest of his private employer, Schuermann. The .testimony was that the Schuermann subdivision and all others on which refunds were made were all treated in the same manner. In such circumstances, we would reject the contention that the interpretation placed on the agreement by MSD was not a good faith expression of that agency’s idea of its meaning.

As above stated, the trial court, in its construction of the agreement, relied heavily on the “pattern of salesmanship” followed by Schuermann in the sale of the lots in Northland Hills. We find nothing in the record here to cause us to reject the trial court’s finding of fact, based on directly conflicting oral testimony, that Schuermann’s sales representatives and office personnel did tell purchasers that $200 of their earnest money deposit went for the sewer and would be refunded upon approval of the bond issue. However, there was no showing that this representation was based in any manner upon the terms of the agreement between MSD and Land Development Corporation. There was no showing that these representations were made with the knowledge of Schuermann officers familiar with the terms of the agreement. The only testimony on the subject was Bogdanor’s testimony that salesmen were instructed to say nothing regarding the sewer deposits. In such circumstances, we would not find such statements, even if made, evidence of Schuermann’s construction of the agreement, which, as promisee, under the contract, might be given controlling effect. 17A C.J.S. Contracts § 519(4), p. 977.

The trial court found that to permit Schuermann to retain the $19,400 in deposits involved in this case would result in their unjust enrichment. However, the court’s judgment was not a decree in equity, but was a judgment at law, finding that Schuermann Building & Realty Company, although not a party to the agreement between MSD and Land Development Corporation, had breached the agreement. Unjust enrichment is not a factor in such determination. Either the contract afforded the plaintiffs the right to the refund thereunder or it did not.

Further, there was no showing of any relationship between prices at which houses and low were sold in Northland Hills and the sewer deposit and refund. According to Bogdanor, the original basic price for a 2-bedroom house was $15,100. In December, 1955, the basic price was increased by $250.00. This was prior to the bond issue election. In March, 1956, after the bond issue election, there was another $250 increase in the basic price. According to Bogdanor, there were no increases or decreases in prices as far as the individual purchasers were concerned because of the sewer deposits. From this, we conclude that there was no showing that, as the court found, the plaintiffs were discriminated against. True, had they received their deeds prior to February 7, 1956, they would have received the $200 refund which purchasers with deeds did receive. However, comparison of this situation of the plaintiffs with those who purchased after the election shows that the plaintiffs did not fare badly by comparison with such purchasers, particularly those who purchased after the March, 1956 price increase.

In our opinion, the trial court erroneously concluded that the contract between MSD and Land Development Corporation gave the plaintiffs a claim to the refund of the $200 deposit. In our opinion, the plaintiffs failed to show that they were “persons owning” the lots on the date of the election, within the meaning of the contract.

Such conclusion practically disposes of plaintiffs’ appeal from the judgment in favor of MSD. However, there are two questions raised by plaintiffs which are not answered by this conclusion.

On their appeal plaintiffs contend that, regardless of the disposition of the Schuermann appeal, the trial court’s finding that the contract phrase “persons owning such lots” included plaintiffs and the-class whom they represent is, as to MSD,. the law of the case and that, MSD not having appealed, the finding is res adjudicata as to it. However, having been dismissed as a party defendant at the time of such judgment, MSD had no standing to appeal from the judgment in favor of the plaintiffs and against the Schuermann defendants. Section 512.020, RSMo 1959, V.A.M.S.; Panich v. Curtis, Owen, Fuller Corporation, Mo.App., 124 S.W.2d 619. On plaintiffs’ appeal from the judgment in-, its favor, MSD could assert whatever basis it felt would, on the record presented, sustain the judgment in its behalf. See Russell v. Union Electric Co., 238 Mo.App. 1074, 191 S.W.2d 278, 287(13-15).

On their appeal plaintiffs further contend that the trial court erred in entertaining Metropolitan’s motion to dismiss. Plaintiffs state that the trial court “should, as required by law, have disqualified itself from passing on that motion, being interested in the outcome of plaintiffs’ cause against Metropolitan by reason of the fact that, as required by law, it had, by a majority of its judges, approved the appointment of three of Metropolitan’s six Trustees, including that of John M. Bogdanor, the Chairman of Metropolitan’s Board of Trustees. Where, as here, a court is called upon to act judicially on a motion of a public corporation to dismiss plaintiffs’ petition as to it, and that court’s action on that motion involves passing on the conduct of three of that corporation’s six Trustees, whose appointments to executive position in that public corporation that court has affirmatively approved, public policy, as well as the rules of this court and the statutory law of this state, requires that court to step aside and call in another judge, of a court that has not approved such appointments, to sit in the case, or to request this court to transfer a judge, of a court that has not approved such appointments, to try that motion.”

This complaint is based upon the fact that MSD’s charter provides for a governing board of six trustees, three residents of the City of St. Louis appointed by the mayor with the approval of the majority of the judges of the Circuit Court of the City of St. Louis and three residents of St. Louis County appointed by the St. Louis County Supervisor with the approval of the majority of the judges of the Circuit Court of St. Louis County. Section 5.010, Plan of the Metropolitan St. Louis Sewer District. Bogdanor was a resident of St. Louis County and presumably was appointed pursuant to this procedure. Plaintiffs acknowledge that the trial judge who heard the cause took office after the events here in question occurred and that he had no part in the approval of the appointment of the trustees who acted, and particularly Bogdanor. However, the plaintiffs assert that a majority of the St. Louis County Circuit Court’s judges having found Bogdanor to have been honest, the same judge might be hesitant to find him otherwise and base MSD’s liability on that finding. They contend that, for these reasons, the trial court was, within the meaning of Civil Rule 51.04, V.A.M.R., “interested in the cause before him” and that he should have, therefore, disqualified himself without objection by the parties.

“To work a disqualification of a judge, the interest must be a direct, certain, and immediate interest, and not one which is indirect, contingent, incidental, or remote. Thus, a direct, apparent, substantial, immediate, or certain interest in the subject matter of the action disqualifies a judge, while an indirect, remote, unreal, uncertain, speculative, incidental, inconsequential, contingent, or merely theoretical, possible, or unsubstantial interest in it does not disqualify him.” 30A Am.Jur., Judges, Section 101, page 64. See Annotation, 10 A.L.R.2d 1307.

Here the alleged interest on the part of the trial court certainly was not direct, certain or immediate. The interest charged is speculative in the highest degree and would not call for the trial judge to disqualify himself. Odom v. Langston, 356 Mo. 1140, 205 S.W.2d 518, 520(7); State ex rel. Gentry v. Curtis, 319 Mo. 316, 4 S.W.2d 467, 475(19).

This conclusion disposes of the constitutional objection attempted to be advanced by the plaintiffs that they were denied due process of law under the Fourteenth Amendment to the Constitution of the United States because their cause was heard by a judge interested in its outcome. In any event, that objection is not properly before us, having been raised for the first time on appeal. Such procedure does not fulfill our requirement that a constitutional question be raised at the earliest possible moment in order to be preserved for appellate review. State ex rel. Kirks v. Allen, Mo.Sup., 250 S.W.2d 348, 349(1, 2).

The petition in this case was based on the theory that MSD and Schuermann were trustees, the latter of a constructive trust, of the sums deposited and returned, for the plaintiffs as equitable owners of the lots on the date of the election. However, the trial court considered the liability to the plaintiffs to be contractual, based upon the agreement between Land Investment Corporation and MSD. Accordingly, it entered a judgment at law for breach of such contractual obligation. We are of the opinion that our conclusion that no contractual obligation to plaintiffs arose from the agreement in question also disposes of the plaintiffs’ complaint, based upon a trust relationship. .

Insofar as an obligation might be predicated upon the representations found to have been made by Schuermann personnel to lot purchasers is concerned, we note that, in their brief, plaintiffs state: “The salesmen and office staff members did not make individual refund promises. If they did, those promises were invalid. The Earnest Money Receipt and Sales Contract provide that ‘no other verbal contract or understanding exists or representation has been made.’ ” There is no contention that the sewer deposit was expressly referred to in the earnest money receipts and sales contracts. In view of this position, we would see no object to remanding the cause to permit the plaintiffs to pursue a theory of recovery on the basis of the representations.

We, therefore, conclude that the portion of the judgment of the trial court, which is the basis of the appeal in Case No. 49,962 should be reversed, and that the order appealed from in Case No. 50,023 should be affirmed, and judgment entered, dismissing the petition herein as to all defendants.

HOUSER, C., concurs.

PER CURIAM.

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

All of the Judges concur.


author: PER CURIAM.

text:
    PRICE BROTHERS LITHOGRAPHIC COMPANY, a Corporation, Plaintiff-Appellant, v. AMERICAN PACKING COMPANY, a Corporation, Defendant-Respondent.
    No. 50548.
    Supreme Court of Missouri, En Banc.
    Sept. 14, 1964.

      Schuchat, Cook & Werner, Charles A. Werner, St. Louis, for appellant.
    Greensfelder, Hemker & Wiese, Mark R. Gale, St. Louis, for defendant-respondent
   PER CURIAM.

After an opinion by the St. Louis Court of Appeals this case was transferred here from that Court by our order of transfer. Section 10, Article V, Constitution of Missouri, V.A.M.S. The opinion of the St. Louis Court of Appeals appears at 372 S.W.2d 138.

This is an action to recover the amount due for certain printed food package labels ordered from and printed by plaintiff allegedly in accordance with a sales contract between the parties. The labels were being held in plaintiff's warehouse awaiting prearranged shipping instructions from defendant when defendant cancelled the order for reasons hereafter mentioned. We will continue to refer to the parties by their designation in the trial court. In its answer defendant admitted all material allegations of plaintiff’s petition and raised as its affirmative defense the existence and breach of an implied warranty of fitness of the labels for defendant’s particular use. On verdicts of the jury judgments were for the plaintiff for $5,365 and for defendant for $120 on the latter’s counterclaim. We are not concerned on this appeal with defendant’s counterclaim. Defendant’s motion for a new trial was sustained on the ground that the trial court erred in giving plaintiff’s verdict directing instruction No. 1, and the judgment for plaintiff was set aside and defendant granted a new trial on plaintiff’s claim. Plaintiff’s appeal to the St. Louis Court of Appeals followed. That Court remanded the case with directions that the trial court set aside its order granting the defendant a new trial and reinstate the judgment for the plaintiff. We reach the opposite result.

By the pleadings the issues were reduced to whether or not there existed an implied warranty of fitness of the labels for defendant’s use and, if so, whether that warranty was breached. The case was tried on the assumption and theory that these were the main issues to be determined, and plaintiff recognized this in the very beginning of the trial by offering evidence thereon as a part of its case in chief. This being so, and for reasons hereafter given, it was error prejudicial to defendant to submit plaintiff’s case upon the theory hypothesized in its verdict directing instruction which authorized and permitted recovery in total disregard of (by failure to even mention) these, the only real issues in the case.

A summary of the pleadings and a statement of the evidence, including summaries of testimony of the witnesses, appear in the opinion of the Court of Appeals at pages 140 to 143 of 372 S.W.2d, inclusive. We have the benefit of the transcript, briefs filed in the Court of Appeals, and Supplemental Briefs filed and oral arguments presented here.

The plaintiff contends that the court erred in sustaining the defendant’s motion for new trial. In addition to the specific reason mentioned in the trial court’s order sustaining the motion for new trial defendant preserves for review and urges points that the trial court erred in the admission and exclusion of certain evidence.

From the evidence we conclude that the facts are: Plaintiff is engaged in the business of manufacturing or producing printed paper labels for attachment to food containers. Defendant is engaged in the business of selling meat products to distributors and retailers. It prepares the meat products and packages them in clear plastic polyethylene containers which are then sealed with heat. To this container there is attached by heat sealing across one end a three-colored Si/s" x 6}£" paper label describing the contents of the container and displaying the trade name of the meat product as well as the name of the producer and, in some instances, the distributor. For some time defendant had been using labels printed by another which were satisfactory and adhered properly to defendant’s containers. Learning that plaintiff was a qualified and experienced producer of labels and would furnish the same quality label for defendant’s particular purposes at less cost than defendant had been paying, defendant entered into a contract with plaintiff agreeing that plaintiff would produce two million labels for defendant and hold and warehouse them subject to the latter’s understood needs and shipping instructions. Before the contract was signed by the parties defendant had furnished plaintiff with samples of labels it had been using which plaintiff agreed to duplicate. Plaintiff examined and analyzed the sample label furnished it by defendant, prepared the contract purporting to describe a like label on 80 pound paper, and then printed and warehoused the labels. Plaintiff knew that for the label to be of value to defendant it must adhere to defendant’s polyethylene container by sealing. Prior to printing, processing and warehousing, none of the printed labels as a completed product were examined or tested by defendant. Receiving shipping instructions, plaintiff removed from its warehouse and shipped 54,000 of the labels to defendant, for which shipment plaintiff was eventually paid. Defendant placed these labels in its production line for attachment to its containers filled with food. Many of these labels — too many according to defendant — would not adhere to the containers. Defendant immediately notified plaintiff of this fact. Thereafter over a period of several months many and various tests of the labels and the paper on which they were printed were made by plaintiff or by others at its direction. Plaintiff’s witnesses testified that in these tests the labels did adhere to defendant’s containers; defendant’s witnesses testified to the contrary. Because the labels would not adhere to its containers defendant wrote plaintiff terminating the contract; plaintiff sent defendant an unavailing statement for the labels remaining in its warehouse, and this action followed. An explanation as to why labels of this type would not adhere comes from one of plaintiff’s witnesses who said that if labels printed by different companies were intermingled, and one company’s labels adhered satisfactorily and the other’s did not, then either there is a difference in the label stock or in the temperature setting of the machinery which applied the labels to the containers. Another explanation comes from one of defendant’s witnesses who was defendant’s label supplier prior to the contract with plaintiff and at the time of the trial its present supplier. This witness said that his company had experimented with paper coated with offset enamel which has a special hard sizing in its coating to make it suitable for lithographic process of printing and paper coated with letter-press enamel which does not have as hard sizing in its coating; that paper coated either for lithographic or letter-press printing could be used, but his experience was that labels printed on paper coated with the special hard sizing would not adhere satisfactorily to polyethylene bags while those printed on letter press paper would.

We consider that the testimony of plaintiff’s witness, Maurice B. Fisher, is significant on the issue of whether an implied warranty of fitness existed. Here we have plaintiff’s sales promotion manager, a salesman with all that common everyday experience tells us that honored title means. His duties are not those of the art department, the analysis and testing department, or the production department. He is concerned primarily with finding, selling to and maintaining satisfied customers. The beginning of plaintiff’s negotiations with defendant was through a communication received by Mr. Fisher the first part of March, 1960, from his business friend, Mr. Ed. Hupp, a sales promotion representative of defendant, that the latter would like to have plaintiff furnish quotations on prices of their label products. With his letter Hupp sent Fisher two or three sample copies of labels being used by defendant. As a result, we find Fisher at the St. Louis office and plant of defendant on two occasions before the sale contract is entered into. On the first occasion, March 29, he met his friend, Hupp, who took him to the office of Mr. William G. Mueller, President of defendant. It was there this salesman explained and related to Mueller and Hupp the 130 years of continuous life and international business of Price Brothers in the manufacture and production of labels for food product containers to be distributed to the consumer, his employer’s many customers for whom it produced labels, his employer’s type of operation and equipment, its production facilities and methods of printing labels for food packages, as well as the fact that his employer could, and the “ways” it would duplicate and produce defendant’s present label in large quantities at a much cheaper price than the latter’s present supplier. There can be no reasonable doubt that at this meeting these representatives of the parties discussed the specific and special purpose for which the labels were to be used and the necessity that the label adhere to the polyethylene bag containing defendant’s meat products. Fisher said they discussed this matter, and shortly after his return home he wrote Mueller giving further evidence of this discussion. On April 8 he wrote confirming their discussions as to Price Brothers’ printing and American Packing Company’s labels. He went on to say, “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." (Emphasis ours.)

To this first meeting with defendant’s officers Fisher took with him a drawing or sketch of a label prepared by plaintiff’s art department slightly revised in art design from the label sample previously furnished him by Hupp. It was on this occasion he met Mr. Harold Fulton, defendant’s production manager. At the close of the visit with Mueller, Fulton took Fisher downstairs to secure for Fisher samples of labels defendant would have printed for and supply to its various distributors and to walk through and observe and have explained to him the function and operation of defendant’s production line, all of which Fisher says took about three minutes. On his return to plaintiff’s home in New Jersey, Fisher had an analysis made to determine the paper weight of the sample labels furnished him by Fulton at the March meeting and found it to vary between 70 and 80 pounds. He informed Mueller of this variance by telephone who said he would check with his then present label supplier and further advise Fisher. It was not until after the next meeting of these parties that Mueller informed him the supplier was furnishing 80 pound weight paper and on June 10 Fisher acknowledged this information by letter to Mueller. This letter and its significance will be referred to later.

In the meantime plaintiff secured from its supplier sheets of stock of 70 pound weight paper, coated on both sides, represented by Fisher as being the same as the samples furnished him. These were cut into pieces the same size as the labels then being used by defendant.

These label size unprinted pieces of paper were taken by Fisher to his May 13 meeting in St. Louis with Mueller and other representatives of defendant, when Mueller told him “they had decided to give us some of the business” and an order for two million labels was prepared and handed Fisher. During this visit Fulton and Fisher took these unprinted label size paper sheets downstairs where they were run through the production line, the result being that some adhered to the packaged bags and some did not. Those that did adhere were placed in a box and given to Fisher, and then Fulton and Fisher retired to Fulton’s office where they prepared a list of defendant’s customers for whom the latter would have special labels printed and determine the overall total number of labels required for a given period of time.

As related above, it was after this meeting that Mueller informed Fisher that defendant’s label supplier had been furnishing 80 pound paper, and it was thereafter that Fisher wrote his June 10 letter in which he states, in substance: We have experi-merited with the 70 pound and have decided that 80 pound paper perhaps would make a tighter seal and be stronger on your package ; that his company felt that this would positively give defendant the satisfaction it wanted; that although his company felt 70 pound paper would be heavy enough there could be no uncertainty with the 80 pound paper. The labels were printed, processed and warehoused on July 26 and 27 and, in early September, after the labels were “run” on defendant’s production line, Fisher returned to defendant’s plant where he said he observed that some of the labels did not adhere.

Defendant contends that the plaintiff’s verdict directing instruction No. 1 was erroneous because (1) it failed to hypothesize the issues of the alleged existence and breach of an implied warranty of fitness of the labels for defendant’s particular use, and therefore ignored that defense, (2) it failed to negative the pleaded, proven and submitted affirmative defense of breach of implied warranty, and therefore was in conflict with defendant’s verdict directing instruction No. 3, and, (3) it directed the jury to return a verdict for the plaintiff on the weight, rather than the preponderance or greater weight, of the evidence. A summary of instruction No. 1 is to be found in the opinion of the St. Louis Court of Appeals at pages 143-144 and of instruction No. 3 at pages 145-146 of 372 S.W.2d.

The very heart of the case and the crucial point on which it turns is whether or not, under the facts, a jury could find there was an implied warranty of fitness of the article purchased for defendant’s particular use and purpose. If there existed an implied warranty of fitness, the next question that would follow in course would be whether there was a breach thereof.

The circumstances under which the law will imply a warranty as a part of a contract of sale have been long well-established. When an article is ordered from the manufacturer or producer thereof to be produced for a particular use or purpose, this seller knowing the use to which it is to be put, and the article is produced and sold for that use, there is an implied warranty the article is fit for that use where the buyer relies, and under the circumstances had reason to rely, on the seller’s experience, skill and judgment. A fair presumption is that the manufacturer or producer, as distinguished from a distributor or retailer, knows the make-up and qualities of the materials and ingredients of the article and the processes of its production and is or should be informed of any faults in or characteristics of his materials or processing which would prevent its reasonably satisfactory use for the purpose for which it is intended. Such presumption is partly justified by the fact that the manufacturer or producer by his occupation holds himself out as competent and qualified to produce articles reasonably adapted to the purposes for which such or similar articles are designed and used. Therefore, when the buyer has no opportunity to examine or test the finished article before delivery of his order it is unreasonable to say that he relied and bought on his own judgment, or that he did not rely on the experience, skill and judgment of the seller. London Guarantee & Accident Co., Limited, of London, England v. Strait Scale Co., 322 Mo. 502, 15 S.W.2d 766, 768, 64 A.L.R. 936; Busch & Latta Paint Co. v. Woermann Construction Co., 310 Mo. 419, 276 S.W. 614; Interstate Folding Box Co. v. Hodge Chile Co., Mo.App., 334 S.W.2d 408; Lee v. J. B. Sickles Saddlery Co., 38 Mo.App. 201; Skinner v. E. F. Kerwin Ornamental Glass Co., 103 Mo.App. 650, 77 S.W. 1011; 46 Am.Jur., Sales, page 541, Section 356; 77 C.J.S. Sales §§ 325a and b, pages 1176, et seq. Where, however, the buyer examines or tests the article to determine its fitness for his intended use it would not be reasonable to say he relied on the judgment of the seller; instead, he would be relying on his own judgment. The reference in this rule to the opportunity of the buyer to examine or test refers to the article in its ultimate or finished state; not to the unfinished article. O. L. Gregory Vinegar Co. v. National Fruit Canning Co., 167 Ark. 435, 268 S.W. 598, l. c. 601. The evidence in this case is that the only examination or test that could be said to have been made by defendant was of plain white sheets of paper cut to the required size by plaintiff unprinted and unprocessed and not in their ultimate or finished state; and that many of these did not adhere.

Plaintiff contends that the above rule does not apply under the facts here and it invokes the rule, “[T]hat where a known, described, and definite article is ordered of a manufacturer [or producer], 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.” Interstate Folding Box Co. v. Hodge Chile Co., supra; London Guarantee & Accident Co. v. Strait Scale Company, supra; Century Electric Co. v. Detroit Copper & Brass Rolling Mills, 8 Cir., 264 F. 49; Grand Avenue Hotel Co. v. Wharton, 8 Cir., 79 F. 43. Plaintiff submits this rule in instruction No. 1. It contends that, considering the facts, the rule precludes reliance by the defendant on an implied warranty of fitness of the labels for defendant’s use. In other words, plaintiff urges that the label described in the contract of sale prepared by it is a known, described and definite article within the meaning of that rule and that it tendered that particular article; and, therefore, there was no implied warranty by plaintiff the article would be fit for its known intended use. The rule urged by plaintiff applies to known, that is, well-known or commonly used articles, described and specifically definite articles. As to such articles the knowledge of the buyer of the suitableness for his particular use of well-known and commonly used articles is presumed to be just as good as that of the seller. The doctrine of implied warranty rests in part upon the principle of superior knowledge and experience of the seller over the buyer. It cannot prevail where obviously such superiority does not exist. Berger Mfg. Co. v. Crites, 178 Mo.App. 218, 165 S.W. 1163; London Guarantee & Accident Co. v. Strait Scale Co., supra. Obviously the plaintiff as an experienced producer of labels, possessed superior knowledge over the defendant food packager pertaining to the adhering qualities to polyethylene bags of the various types of printing and paper coatings it could use in the production of labels. As to such processes and materials plaintiff knew that defendant was compelled to rely on its experience, skill and judgment. With samples of labels being used by defendant with satisfaction in its possession, with knowledge of the use to which they must be put to function as a label on defendant’s food package in the sense the italicized word is commonly used, with knowledge of the use to which this particular label must be put, with knowledge of the type container to which the article to be produced by it must attach and “make a complete seal with”, this plaintiff, representing itself to be and no doubt being, a manufacturer with a great many years of experience in the production of food package labels distributed in international commerce, prepared the contract of sale executed by the parties describing in its own words the label it proposed to duplicate. It is true plaintiff described a label — a well-known and commonly used article — and it described its size and paper weight. But a label fails in its inherent function for which it is intended to be used when it fails to attach and adhere to the container the contents of which it is designed to identify and describe, and at that point it is not a label. It is a label when it identifies and describes the content of the container of which it is a part by adhering. In Lee v. J. B. Sickles Saddlery Co., supra (38 Mo.App. l. c. 206), a case similar to that presented here, the author had occasion to quote from a rather succinct statement of Lord Ellenborough in Gardiner v. Gray and we quote an apt portion of those words, “The purchaser cannot be supposed to buy goods to lay them on a dung-hill.” This purchaser could not be supposed to buy labels to lay them on the city dump, and unless they would adhere to defendant’s package they would be good for little else. Here the plaintiff contracted to produce and sell an article of its own description to be used by the buyer for a known particular purpose; not just any article fulfilling that description, but one fit for the buyer’s particular purpose. The purpose for which the defendant required the label, i. e., to describe its product with a label securely attached to its product’s container, is the essential matter and the essence of plaintiff’s undertaking; not the label itself. Hunter v. Waterloo Gasoline Engine Co., Mo.Sup., 260 S.W. 970, l. c. 972.

The St. Louis Court of Appeals in Interstate Folding Box Co. v. Hodge Chile Co., supra, (334 S.W.2d l. c. 415) narrowly states the known, described and definite article rule relied upon by plaintiff. The rule is broader than as stated in the Hodge Chile case for although an article is desired for a particular purpose known to the seller, where the buyer justifiably relies upon the seller’s skill and judgment to furnish him an article suitable for his purpose, then a warranty of fitness is implied, even though the article is one known, described and definite. Williston on Sales, Volume 1, Sections 230 and 236; Davenport Ladder Co. v. Edward Hines Lumber Co., 43 F.2d 63 (8th Circuit, 1930).

The evidence would warrant the jury in believing and finding, (1) that the defendant was compelled to and did rely on the experience and skill of the plaintiff, and (2) that the label was purchased for a particular purpose known to plaintiff, and we hold the case falls under the rule that “where a manufacturer contracts to supply an article which he manufactures to be applied to a particular use of which he is advised, so that the buyer necessarily trusts to the experience, skill and judgment of the manufacturer, there is an implied warranty that the article shall be reasonably fit for the use to which it is to be applied.” And the evidence would warrant the jury in believing and finding that there was a breach' of the claimed warranty. Instruction No. 1 submitted by plaintiff does not reach the issues tried; it purported to cover the whole case, but ignored and totally disregarded the issues of whether there was an implied warranty and, if so, whether there was a breach of that warranty. Instruction No. 1 should have gone further; it should have submitted these issues and required a finding thereon favorable to plaintiff as a predicate to a verdict for the plaintiff. Instruction No. 3, submitted by defendant, covering these issues, does not cure these omissions in plaintiff’s verdict directing instruction. In fact, the two instructions are inconsistent and conflict with each other. Instruction No. 1 permits the jury to return a verdict for the plaintiff without finding against the defendant on the implied warranty issue; it permits a finding for the plaintiff irrespective of the fact that the jury may have also believed that the labels were purchased for a particular purpose known to plaintiff, that defendant was compelled to and did justifiably rely on plaintiff to supply labels for that purpose, and that the labels were not suitable for that use and purpose. The jury is left in a dilemma as to which of the conflicting instructions it should follow. Taylor v. Farmers Bank of Chariton County, 349 Mo. 407, 161 S.W.2d 243; Royle Mining Co. v. Fidelity & Casualty Co., 161 Mo.App. 185, 142 S.W. 438; Bixler v. Wagster, Mo.App., 256 S.W. 520; Perry v. Van Matre, 176 Mo.App. 100, 161 S.W. 643; Friend v. Jones, Mo.App., 185 S.W. 1159. The giving of Instruction No. 1 was error prejudicial to the defendant and the action of the trial court in setting aside the verdict and granting the defendant a new trial on plaintiff’s claim for the reasons given by the court was proper. Because of this holding, it is unnecessary that we discuss the other points urged by defendant as error in Instruction No. 1, or its points as to the admission or exclusion of certain evidence, for it is unlikely these questions will arise on another trial.

The action of the trial court in setting aside the verdict and judgment for the plaintiff on plaintiff’s claim and granting the defendant a new trial is affirmed and the cause is remanded for a new trial.


author: PRITCHARD, Commissioner.

text:
    Mazie GRANT, Respondent, v. William B. NEAL, d/b/a Beauty Steak Company, et al., Defendants, Milton Carpenter, State Treasurer, Custodian of Second Injury Fund, Appellant.
    No. 50385.
    Supreme Court of Missouri, Division No. 2.
    July 13, 1964.
    Motion for Rehearing or to Transfer to Court En Banc Denied Sept. 14, 1964.

      Emerson Foulke, Joplin, for respondent.
    Thomas F. Eagleton, Atty. Gen., Robert R. Northcutt, Asst. Atty. Gen., Jefferson City, for appellant.
   PRITCHARD, Commissioner.

Mazie Grant, the respondent, claimed and was allowed compensation by the Industrial Commission from the Second Injury Fund, § 287.220 (all statutory references are to RSMo 1959, V.A.M.S., unless otherwise indicated), for disability resulting from an injury to her left hand suffered during the course of her employment with the Beauty Steak Company of Joplin, Missouri. Previously her right hand had been .injured in approximately the same manner and for which compensation was paid. The appellant, State Treasurer and custodian of the Second Injury Fund, resisted respondent’s claim upon the ground that the same was not filed against the Second Injury Fund within one year from the date of the accident (or, as also stated by appellant, the claim was not filed within one year from the date of last medical payments made for or on behalf of the fund).

There is no statutory provision with respect to payments of medical expenses of an injured employee by an employer or anyone “for or on behalf” of the Second Injury Fund, so there could not be a limitation period therefor. Nor is the Second Injury Fund itself liable for such medical expenses. See Federal Mutual Insurance Company v. Carpenter, Mo., 371 S.W.2d 955, 958, in which it was held that § 287.220 does not relieve employers or their insurers from furnishing medical aid to arr employee under § 287.140(1), and that the Second Injury Fund does not include a provision for payment or apportionment of such expenses therefrom.

The referee (Mr. LaTowsky) who heard the case sustained appellant’s position that § 287.430 was applicable to respondent’s claim for compensation, and that because she did not file her claim within one year from the date of the accident against the Second Injury Fund she was barred. The final award of the Industrial Commission reversed the referee and allowed respondent compensation, which award was affirmed by the Circuit Court. We have jurisdiction by reason of said state officer, appellant, being a party. Mo.Const. Art. V, § 3, V.A.M.S.; Mossman v. St. Joseph Lead Co., Mo.App., 254 S.W.2d 241 (transferred, Mo., 265 S.W.2d 335).

The date of respondent’s first injury, which was occasioned by her catching the middle finger of her right hand in a “meat patty machine,” was October 22, 1956. A lump sum settlement was made on this claim prior to April, 1957. On April 16, 1957, claimant was again operating a meat patty machine and caught her left hand therein. Upon the second injury the employer-insurer furnished medical aid to respondent until December 27, 1957. On May 20, 1958, a little more than thirteen months after the second accident, respondent filed her claim which is now before this court against her employer, its insurer and the then State Treasurer, M. E. Morris, as custodian of the Second Injury Fund. This claim was settled by a compromise as between respondent and its insurer by a final lump sum payment which was approved by a referee (Mr. Wise) on November 23, 1959, which compromise recited that “This settlement not to preclude recovery against second injury fund.” The amount of additional compensation from the Second Injury Fund was determined by the Industrial Commission to be 2(4 weeks at $26.67 per week and $16.00 per week for respondent’s life, there having been paid to the date of the award by the employer and insurer (as per the settlement) $5,067.88 total.

§ 287.220 subd. 1 provides essentially that where an employee having a permanent partial disability, whether from compensable injury or not, receives a subsequent compen-sable injury resulting in additional permanent partial disability so that the degree or percentage of disability caused by the combined disabilities is greater than that which would have resulted from the last injury alone, the employer is liable only for the degree or percentage of disability (determined by the Commission or referee) resulting from the last injury had there been no preexisting disability. The balance of such disability shall be paid out of a special fund known as the Second Injury Fund, the custodian of which is the State Treasurer. By subsection 2 of this statute it is provided, “In all cases in which a recovery against the second injury fund is sought for permanent partial disability or for permanent total disability, the state treasurer as custodian thereof shall be named as a party, and shall be entitled to defend against the claim. * * * ”

§ 287.430 provides that “No proceedings for compensation under this chapter shall be maintained unless a claim therefor he filed with the commission within one year after the injury or death, or in case payments have been made on account of the injury or death, within one year from the date of the last payment. * * * ”

We agree with appellant that the Workmen’s Compensation limitation provision, § 287.430, supra, is applicable to claims against the Second Injury Fund when it is sought to impress that fund with the payment of compensation benefits although the Second Injury Fund statutes, §§ 287.220 et seq., do not have or expressly refer to any limitation period. This proposition was so held in the Texas and California cases cited below, the second or subsequent injury fund statutes of which states likewise in themselves do not refer to any period of limitation for the recovery of subsequent injury benefits. Thus, if an injured employee waited beyond the one-year limitation of time from the date of his accident or one year from the last payment of medical benefits, he would be barred from maintaining the proceedings against the fund the same as he would be barred in maintaining a proceeding against his employer and employer’s insurer for a first compensable injury. Appellant cites and relies upon the case of Industrial Accident Board v. Guidry, 162 Tex. 160, 345 S.W.2d 509. That case may be distinguished on its facts. There, Guidry (haying had a previous disability) had two proceedings relating to his claim for compensation for injury suffered in an accident which resulted in total disability. The first proceeding was timely noticed and filed, within six months (Texas general Workmen’s Compensation Act, § 4a, Art. 8307) from the date of injury, but was brought only against the insurer and the Second Injury Fund of Texas was not joined as a party. The Industrial Accident Board heard and considered the claim and an award of compensation was finally adjudicated. Guidry then sought the payment of the adjudicated claim against the Texas Second Injury Fund. It was held, and properly so, that he was barred inasmuch as he did not give the thirty-day notice and did not file his claim against the Second Injury Fund within six months after the occurrence of the injury. No such facts exist here. Respondent filed her claim against her employer, its insurer, and the State Treasurer as custodiáh of the Second Injury Fund within one year from the date of her last medical payments. See Subsequent Injuries Fund of State of California v. Industrial Accident Commission and Lois A. Patterson, Cal.Sup., 39 Cal.2d 83, 244 P.2d 889, where it was held that a claim for compensation .against the Subsequent Injuries Fund filed within five years after the date of the injury upon the ground that the original injury had caused new and further disability (Cal.Labor Code, § 5410) was timely. See also State of California Subsequent Injuries Fund v. Industrial Accident Commission, Ernest H. Busch, 198 Cal.App.2d 818, 18 Cal.Rptr. 458, where it was held that a claim against the Subsequent Injuries Fund which was filed more than five years from the date of the injury but within one year from the last payment of compensation was timely filed under Cal.Labor Code, § 5405 (b); and also applying Cal.Labor Code, § 5405(b) to the time of last voluntary furnishing of medical treatment, sec Subsequent Injuries Fund of State v. Industrial Accident Commission and Charles A. Ferguson, 178 Cal.App.2d 55, 2 Cal.Rptr. 646, and the case of State of California, Subsequent Injuries Fund v. Industrial Accident Commission and James W. Clubb, 155 Cal.App.2d 288, 318 P.2d 34, where it was held the employee was barred by the five-year statute, Cal.Labor Code, § 5410, by failing to file his claim against the Subsequent Injuries Fund within that time from his previous injury.

The views of the courts of Texas and California, and that of respondent here, are not inconsistent and we are in accord therewith. Consonant with the rule that Workmen’s Compensation laws are to be liberally and broadly construed to effectuate their purposes, Hacker v. City of Potosi, Mo., 351 S.W.2d 760; Blew v. Conner, Mo., 328 S.W.2d 626, and that the purpose of §§ 287.220, et seq., is to encourage the employment of the partially handicapped, Federal Mutual Insurance Company v. Carpenter, supra, we hold that respondent’s claim was timely filed against the Second Injury Fund under the general Workmen’s Compensation, limitations period, § 287.430, and she is not barred from maintaining such claim.'

We note that § 287.140(1) requires that the employer furnish medical aid to an injured employee. That section does not exempt medical payments for a second injury, and its purpose is to aid in rehabilitating an injured employee. Thus, by rendering medical treatment it is entirely possible that an injured employee will completely recover from the injury and all effects thereof. On the other hand, if there is residual permanent partial or total disability, those facts would not be known precisely during the course of medical treatment. As was pointed out in the California cases of Patterson and Ferguson, supra, “The question whether there will be aggravated permanent disability entitling an applicant to relief from the Subsequent Injuries Fund, like the question whether there will be any permanent disability, is one to which the answer may not appear until months after the injury.” To hold that respondent is barred because she did not file her claim against and make the Second Injury Fund a party within one year from her accident, where she has complied with the provision that her claim be filed within one year from the date of last medical payments, and did at that time make the State Treasurer a party, would be doing violence to the above-stated purposes of our Workmen’s Compensation Laws. The State Treasurer was made a party and did perform his duty of defending this one proceeding for compensation. The Second Injury Fund has not therefore been prejudiced. We cannot add to the limitation statute, § 287.430, the provision that the Second Injury Fund be notified at the time of the second injury. Appellant impliedly argues that such notice should be had. In disposing of that argument we again allude to the statements in the California cases of Patterson, Ferguson and Busch, supra, that “all provisions pertaining to periods of limitation, are peculiarly and primarily for the Legislature. If the attorney general is having difficulty in protecting the fund because of the circumstances appearing here such difficulty, however grave it may be, appears to be one which can be corrected only by the Legislature.” The foregoing discussed points are ruled against appellant.

There is sufficient competent evidence in the record to warrant the Industrial Commission making the award, and the facts found by the Commission support the award. See § 287.490. See also Corp v. Joplin Cement Co., Banc, Mo., 337 S.W.2d 252, 258 [5]. Here, respondent, age 43, testified that she successively caught her right and left hands in the hopper of the meat machine. At the time of the hearing the first injury had gotten worse; she could not make a bed, hold a tray, or cook. The right hand kept drawing, and she could not move her fingers. The hands were painful and were slowly getting worse; and it was necessary for her children to help her with housework and in dressing herself. Respondent has not worked since the second accident. The medical report of Doctor DeTar of Joplin shows a Dupuytren’s con-tracture of the right hand involving the second, third and fourth fingers. His final diagnosis and opinion was that respondent had total functional loss of the right and left hands, and that she had a total disability in both hands, which constituted her being totally disabled from working. So also were the conclusions of Doctors Schoeberl and Hurst. Causation of the total disability was established. These points are ruled against appellant.

In his last point appellant contends that the referee was without authority to hold a hearing to approve the compromise settlement between respondent and her employer and its insurer, and the fact that the latter parties were discharged also discharged appellant. No case is cited as to these contentions. However it is clear from a reading of the applicable statutes that the contentions are unmeritorious. § 287.220 provides for a separate liability of the employer and the Second Injury Fund. The employer is liable only for the degree or percentage of disability for the last injury had there been no preexisting disability; the Second Injury Fund is liable for the balance of the disability found to exist above that found for the last injury alone. The employer and employee are authorized to compromise and settle the claim under § 287.390. Significantly, the State Treasurer, with the advice and consent of the Attorney General under § 287.220 subd. 2, may also enter into compromise settlements as contemplated by § 287.390. Under these statutory authorities we are unable to see how either party would be prejudiced by a settlement of their separate liabilities and at different times by different referees.

The judgment is affirmed.

BARRETT and STOCKARD, CC, concur.

PER CURIAM.

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

All of the Judges concur.