text:
    KANSAS STATE BANK, a Corporation, Respondent, v. J. W. STORMS and Storms-Green Construction Company, Appellants.
    No. 23873.
    Kansas City Court of Appeals. Missouri.
    Oct. 6, 1964.

      Donald B. Clark, Campbell & Clark, Kansas City, for appellants.
    Robert D. Youle, Daniel M. Dibble, Lath-rop, Righter, Gordon & Parker, Kansas City, for respondent
   SAMUEL A. DEW, Special Commissioner.

Plaintiff brought this action on alternative counts of conversion, money had and received and for an accounting. The suit involves the right to proceeds of a sale by defendants of two Euclid trucks included in a chattel mortgage held by the plaintiff. In a jury waived trial the plaintiff recovered a judgment for $7,000 of said proceeds. The counterclaim of defendant J. W. Storms was denied. Defendants have appealed.

Because several of the parties, issues, facts and much of the evidence appearing in this case appear also in two companion cases, the three actions were tried together, separate judgments were rendered, separate appeals taken and a single transcript of the evidence was filed in this court. The other companion cases are Fager and Friesen Insurance Agency, a partnership, v. J. W. Storms et al., No. 23,872, Mo.App., 382 S.W.2d 801, and State ex rel. Fager and Friesen Insurance Agency v. Storms-Green Construction Company et al., No. 23,874, Mo.App., 382 S.W.2d 812. The separate appeals in those cases will be separately determined by this court.

The parties in the instant case filed a limited stipulation of facts in the trial court. Such of these as we deem essential, along with such supplementary facts in evidence that may be material and undisputed will be stated herein. Additional facts applicable to this case and which are disputed will be referred to where considered proper. The court’s finding of facts will be cited where necessary.

This being a case tried without a jury, it is reviewed upon appeal as a suit in equity, with due deference to the trial court respecting the credibility of the witnesses. Rule 73.01(d), V.A.M.R. In such a case the Supreme Court has said:

“We review the case upon both the law and the evidence as in suits of an equitable nature, § 510.310(4), RSMo 1959, V.A.M.S., de novo on the whole record, making our own findings of fact, drawing our own conclusions of law, and rendering or directing the rendition of such judgment as equity and justice may require”. Carrier Corporation v. Royale Investment Co., Mo., 366 S.W.2d 346, 348.

The controversy between the parties in this case arose out of the tragic financial failure of one Dale Bloom. At all times pertinent to this case he was and for a long time had been engaged in the business of rock excavation conducted by and with large and special machinery owned by him and designed for such use, including the two Euclid trucks above mentioned.

The defendants were engaged under a general contract with the Missouri Highway Commission for the grading and preparation of a roadbed as a part of the improvement of Route #67 in St. Francois County, Missouri, referred to as the “Flat River job”. On November 23, 1957, defendants entered into a subcontract with Bloom for that part of the job that required the excavation and removal of rock from the roadbed. Thereupon Bloom brought upon the job site his heavy road machinery referred to which he used in his operations under his subcontract.

Delayed by several months of unfavorable weather conditions, hampered by unexpected rock structure of the character that requires unusual time, labor and expense in its removal, and impeded by consequent breakdowns of vital equipment, Bloom found himself by December, 1958, in a state of insolvency, with his job far from completion. As the prime contractors on the project, the defendants had the grave responsibility to the State of Missouri and to their sureties of completing the entire operations to which they had agreed. After extended conferences with Bloom, they considered the proposition of cancelling Bloom’s subcontract, assuming the remainder of the work thereunder, paying his accrued obligations on the job, employing him as superintendent on the project and continuing the use of his equipment on the job site. While considering such solution of the Bloom subcontract, defendant Storms sought information as to Bloom’s financial obligations. Defendants knew that Bloom had long been a customer of the plaintiff bank in his home town of Overbrook, Kansas, and had procured his insurance policies through officials of that bank as agents. While Bloom was operating under his subcontract, defendants had frequently remitted to the plaintiff bank to the credit of Bloom for the payment of his accompanying payroll lists. Defendant J. W. Storms therefore wrote the following letter on December 19, 1958:

“Mr. Emery Fager Kansas State Bank Overbrook, Kansas
“Dear Sir:
“As you know we have a contract in St. Francois County, on which Dale Bloom is a subcontractor. We are reviewing some of the financial aspects of our relationship and we would appreciate it if you would verify the following information which Mr. Bloom has furnished us with regard to loans owing your bank.
“2 — D8 Caterpillar Dozers s/n 2E1016, s/n 2U2206
“1 — Failing Rotary Drill mounted on International Truck, CPF 99633
Outstanding $15,000.00 “Would you please advise us the terms of payment on the above?
Yours very truly,
STORMS-GREEN CONSTRUCTION CO.
(S) J. W. Storms
J. W. Storms
JWS/B.”

Plaintiff, on December 24, 1958, replied as follows:

“Dec. 24, 1958
“Mr. J. W. Storms Kansas City, Mo.
“Dear Mr. Storms:
“In reply to your letter regarding- our loans to Mr. Bloom, I wish to say that the amount of the loan is correct and the security is also as stated, with some addition.
“We have had a mortgage on 2 Euclids but on an oversight, Dale got those included with some loans at Southgate State Bank at Prairie Village. So I have additional security on these two Euclids subject to $10M at the South-gate State Bank. The amount of our loan here is $15M.
“We have taken care of Dale on his Comp and Gen Liab insurance which has accumulated to slightly over $10M, which is putting us a little bind. But I have dealt with Dale so long, I want to help him thru this difficulty, as all of our dealings have been satisfactory. We have always found Dale to be one of the hardest working fellows in the business and has always been honest and square in his dealings here. Would there be any way he could squeeze any money out to pay on some insurance before Jan 1 ?
“You asked about the terms of payment on his note here and frankly I have agreed to go along with Dale until the job down there in Flat River is buttoned up. It has been impossible for him to keep on any payment schedule so we are just riding to the completion of the job and at that time will have to take another look at the picture.
“Best regards to you.
Cordially yours
(S) Emery E. Fager”.
(Italics ours.)

Investigation disclosed that Bloom’s note held by plaintiff and chattel mortgage securing it were dated December 31, 1957, and covered certain of Bloom’s road machinery, including the two Euclid trucks above mentioned, and two Caterpillar tractors; that the mortgage was recorded in Douglas County, Kansas, of which Bloom was a resident, January 6, 1958, and in St. Francois County, Missouri, where the chattels were located, on August 21, 1958. The note so held by the plaintiff had been in default since March, 1958, the due date of the first installment. Bloom was also greatly in debt for accumulated insurance premiums due officials of the plaintiff bank, Emery E. Fager and Max J. Friesen, cashier and assistant cashier, respectively, of the plaintiff bank, who conducted an insurance agency as partners and agents located in the premises of the bank. The two Caterpillar tractors had been surrendered to the plaintiff and sold by it for credit on the Bloom note and mortgage.

Southgate State Bank of Prairie Village, Kansas, referred to in plaintiff’s letter aforementioned as holding a later note and second chattel mortgage from Bloom secured by the same Euclid trucks in question, and also in default, had demanded the Euclid trucks of Bloom and had threatened to seize them. It was learned that the South-gate State Bank on September 20, 1958, had, in fact, loaned Bloom $10,000 for which he made a note for $10,613.10, inclusive of interest to maturity and insurance premiums, secured by chattel mortgage on the two Euclid trucks previously mortgaged to the plaintiff. The Southgate State Bank’s mortgage was recorded September 25, 1958 in Osage County, Kansas, only, and not in St. Francois County, Missouri, where the property was located. The Southgate State Bank then remitted $10,000 to the plaintiff bank as the actual proceeds of the Southgate State Bank’s loan and which, according to plaintiff’s evidence, was deposited by the plaintiff on Bloom’s instructions to Bloom’s checking account, and by him later checked upon until its exhaustion. No part of this deposit was appropriated by the plaintiff nor credited to Bloom’s defaulted note and first mortgage held by it.

Having received plaintiff’s letter above quoted, and Southgate State Bank threatening to seize the Euclid trucks which were vital to the completion of the highway contract, defendants then entered into an agreement with Bloom to cancel his subcontract, to take over the uncompleted part of the work covered by it, to assume his obligations on the job, to employ him as a superintendent there and to use his road machinery, on certain conditions, including the Euclid trucks, in the completion of the defendants’ prime contract. Thereupon defendant Storms purchased from the South-gate State Bank Bloom’s defaulted note and second mortgage held by it, for the face value thereof, $10,613.10. That note provided for 10 percent interest after maturity and no payments had been made by Bloom. The chattel mortgage securing the note provided, among other things, for the inclusion of the interest and for the costs and expenses of taking and sale of the Euclid trucks upon seizure after default, the same, as stated, being the trucks previously mortgaged to the plaintiff heretofore described. Subsequently, on May 13, 1960, after the completion of defendants’ prime contract, defendant Storms sold the two Euclid trucks for $17,000, conceded-to be the fair market value thereof.

Originally, the plaintiff sought, by its pleadings, to establish priority and right, by reáson of its prior note and first mortgage, to the entire $17,000 proceeds of defendants’ salé of the' Euclid trucks. In said four counts it' based its claim' on alleged conversion, money had and received and for an accounting.

The defendants, denying that plaintiff had a prior right to the proceeds of the sale of the Euclid trucks, pleaded a complete waiver by the plaintiff of such priority by plaintiff’s letter above quoted, upon which defendants hád állegedly relied in the purchase of the Southgate note and mortgage, then in default. Furthermore, the answer pleaded defendants’ right to interest accrued on the Southgate note, and various expenses incurred in the taking possession of, removing and sale of the Euclid trucks. There was substantial evidence that the defendants expended the total sum of $1092.56, consisting of $826.70 for repairs of the tires on all four wheels of both tractors; $65.86 for new parts for an oil kit on a Deisel engine in one of the trucks which was badly leaking oil; $100.00 for labor to install the same; and $100.00 for labor in construction of a ramp for loading the trucks at the river dock for delivery to the purchaser; that interest in the amount of $1680.55 had accrued on the note after maturity to the date of sale; that the total of such items, added to the principal of the note, constituted defendants’ claim of $13,386.11 out of the $17,000 proceeds of sale of the trucks, leaving $3613.89 due plaintiff, if it were entitled to any portion of such proceeds.

The answer further averred that by agreement among the plaintiff, the South-gate State Bank and Bloom, the proceeds of the note then held by the Southgate State Bank, considered as $10,000, were to be paid and were paid'to the plaintiff, which failed to credit the same to the prior Bloom note in its hands; that plaintiff also had failed to credit the Bloom note held by it with the proceeds of the sale of the two Caterpillar tractors arid other items of the Bloom mortgage held by it which plaintiff had already seized and sold; that plaintiff’s claim under the Bloom mortgage held by it had thus been satisfied. There was' eviderice, however, that plaintiff had seized and sold the Caterpillar tractors, both old models, ■ one at public auction for $2700, and one at private sale for $4500, after many attempts to get higher bids and earlier sales.

Defendant Storms'filed a counterclaim to 'recover alleged advancehiénts to Bloom through the plaintiff bank,' claiming such deposits were diverted by ' plaintiff to its own use, thereby compelling defendants to make further advancements for taxes, federal insurance, withholding taxes, unemployment compensation, all in the total sum of $3,973.03.

However, for the purposes of this appeal, the record shows that the trial court ruled, in part, that the letter written by the plaintiff to defendants on December 24, 1958, quoted and italicized hereinabove, relinquished to the defendants, as holders for value of the Bloom note and second mortgage purchased from Southgate, the prior right to the first $10,000 of the proceeds of any sale of the two Euclid trucks described in said second mortgage, “but did not give defendants any security lien thereon or right to possession”; that such letter did not, and was not intended to, subordinate plaintiff’s security interest and posses-sory right to said trucks and plaintiff’s right to the proceeds of the sale thereof, or to the accrued interest or insurance premiums covered by the Southgate note and second mortgage, or to the expenses of taking possession of or in selling the trucks. The court further found that defendants knew of plaintiff’s chattel mortgage and right of possession of the trucks * * * so that to the extent of the excess of the reasonable market value of said two Euclid trucks as of October 13, 1959, defendants and particularly defendant Storms, converted the property to which plaintiff had an immediate possessory right; that defendants converted $7,000 of plaintiff’s security property to their own use and benefit * * * ; that, alternatively, * * * plaintiff is entitled to recover from defendants under Count III of its petition for money had and received by defendants.for the use and benefit of plaintiff, the sum of $7,000.00”.

The court further found that the plaintiff had made bona fide sale of the Caterpillar tractors and had given proper credit therefor on the Bloom note held by it, with proper reductions for expenses and costs ($5,826.32); that the balance due plaintiff on such note with interest was $14,490.81; that plaintiff did not receive in its own right the $10,000 proceeds of the Bloom-Southgate loan, but received it only in its capacity as a bank and had deposited it to Bloom’s account; that the evidence did not establish that plaintiff should have earmarked any of Bloom’s credits or deposits for payroll or tax accounts nor that any of his accounts should have been segregated without his consent. Moreover, the court held that defendants had agreed to pay the withholding tax claimed; that plaintiff was entitled to judgment on defendant Storms’s counterclaim. Therefore, the court denied the counterclaim.

On this appeal plaintiff now concedes that its letter to defendant Storms of December 24, 1958, subjected $10,000 and that exact amount only, of the proceeds of the sale of the Euclid trucks under the South-gate note and second mortgage to the holder thereof, although it denies a complete subordination of its prior rights of possession and security. Plaintiff says in its brief that the letter, written by a layman, “merely agreed that, to protect Bloom for his oversight in double mortgaging the Euclids when it recovered and sold the security the Southgate note holders could have $10,-000 of the proceeds”. In effect the writer of the letter, cashier of the plaintiff bank, had so testified that such was his intent. He stated that he learned of the Southgate second mortgage from records of the Register of Deeds; that he was told by Bloom by telephone that the $10,000 would be sent to plaintiff to be deposited in his account; that he did so deposit it.

Plaintiff asserts that the writer of its waiver letter did not know that the South-gate note was for more than $10,000 principal (including interest to maturity), nor that it bore interest after maturity, or covered costs and expenses of possession and sale of the security after default; and it claims that the limitation to $10,000 represented the extent of plaintiff’s knowledge of Bloom’s obligations and the extent to which it was willing to protect him.

Defendants’ contention is that the court erred in awarding the plaintiff $7,000 of the proceeds of the sale of the Euclid trucks by defendants, and erred when it “failed to allow defendants for accrued interest and expenses of sale”, upon default as provided in the Southgate note and second mortgage. They argue that in plaintiff’s letter to defendants, its reference of “10M” to the note and mortgage held by Southgate State Bank was merely for the purpose of identification; that the use of the designation “10M at the Southgate Bank” was not intended nor understood to specify the exact amount of the plaintiff’s relinquishment, but rather as a mere reference to the particular loan to which the subordination referred and that such statement could reasonably be so construed and could be and was relied upon by the defendants, as shown by their evidence.

The plaintiff cites the language of Orr v. Mutual Life Ins. Co. (8th Cir. 1933) 64 F.2d 561, 565:

“One who waives a right is under no legal obligation so to do and he may determine to what extent or in what respect he will do so and if such extent or respect clearly appears neither can be expanded beyond such intention. Nor is it of legal consequence why he placed limitations upon the waiver provided such limitations clearly appear”.

See also 10 Am.Jur., Chattel Mortgages, Sec. 207.

Further elements of waiver are reviewed in Springfield Gas & Electric Co. v. Southern Surety Co., Mo.App., 250 S.W. 78, 81, citing as an illustration of waiver that when “ ‘one in possession of any right, whether conferred by law or by contract, and with full information of the material facts, does or forbears the doing of some things inconsistent with the existence of the right or his intention to. rely upon it; thereupon he is said t.o have waived it, and he is precluded from claiming anything by reason of it afterward.’ (citations) * * *. A consideration which is necessary to support a contract is unnecessary to support a waiver. A waiver may even take place in consequence of laches merely or in consequence of acting inconsistently with the idea of insisting upon the right which is waived, and may be shown by conduct as well as by express words. (citations). * * *. Waiver^ is ordinarily a question of fact, and depends largely upon the intention of the party. That intention, however, is not the secret intention of the party, but is the intention which is manifested by his conduct or his words in relation to the matter involved, (citations)”. Ziervogle v. Royal Packing Co., Mo.App., 225 S.W.2d 798, 803; Hayes v. Manning, 263 Mo. 1, 172 S.W. 897; Dunn v. Pickard, Mo.App., 284 S.W.2d 6, 9; Pennsylvania Casualty Co. v. Suburban Service Bus Co., Mo.App., 211 S.W.2d 524.

Applying the undisputed facts to the law as we have found it, we turn our attention to the extent of the plaintiff’s admitted waiver. That it did extend at least to the amount of $10,000 is now conceded.

The writer of the plaintiff’s waiver letter was an experienced banker; he was in fact the cashier of the plaintiff bank. He long had known Dale Bloom as a customer and substantial depositor in that bank. He was familiar with Bloom’s $15,000 note and chattel mortgage then in default, held by the plaintiff bank of which he was cashier. He knew of the large insurance account past due and owing to him and his assistant cashier from Bloom; he knew of Bloom’s financial difficulties in the road contract. He knew of and mentioned Bloom’s “other loans” from the Southgate State Bank. He had been notified by Bloom from the South-gate State Bank that $10,000 would be sent him for deposit in Bloom’s account at the plaintiff bank. He had deposited the same as instructed by Bloom. He had made plans to “go along with Dale until the job down there in Flat River is buttoned up”, and that “we are just riding to the completion of the job and at that time will have to take another look at the picture”. He knew that the Bloom note for $15,000 in his own bank provided for interest td maturity and 10 percent after maturity, and for costs and expenses upon possession taken and sale thereunder for default. In his letter he referred to that note held by his own bank as a note for “$15M”. In the same paragraph he referred to the note and mortgage purchased by defendants as a note for “10M”. It is a matter of common knowledge that bank loans represented by notes secured by chattel mortgages almost universally, if not always, draw interest and generally provide for expenses of possession and costs of sale.

The overwhelming evidence forces the conclusion that the plaintiff’s writer of the waiver letter to the defendant on December 24, 1958, with actual or implied knowledge of the full terms of the note and mortgage held by the Southgate State Bank, referred to by him, intended to subordinate plaintiff’s prior note and first mortgage on the Euclid trucks to Bloom’s later note and second mortgage to the Southgate State Bank to the extent of $10,000 of its principal, plus interest and expenses therein specified, and that the expression “10M” was not intended to limit such waiver to the exact sum of $10,000, but generally as a reference to or identification of the particular loan referred to. The court was therefore in error in ruling that the letter waived plaintiff’s right to $10,000 only of the proceeds of the sale of the two Euclid trucks, and in ruling that it did not include interest, costs and expenses of sale provided for in the Southgate note and mortgage.

The evidence is sufficient to support the court’s ruling on the deductions claimed by defendants to reduce the plaintiff’s balance on its Bloom account. Likewise we believe the proof justifies the court’s determination of defendant Storms’s counterclaim.

The judgment should be reversed and the cause remanded with directions to enter judgment for the plaintiff on its petition for $3613.89, with interest at 10 percent per annum from May 13, 1960, and for the plaintiff on the counterclaim of defendant J. W. Storms. The costs to be charged to the plaintiff. The Special Commissioner so recommends.

The foregoing opinion of SAMUEL A. DEW, Special Commissioner, is adopted as the opinion of the Court.

All concur.


source: Caselaw Access Project

author: SAMUEL A. DEW, Special Commissioner.

license: Public Domain

text:
    STATE of Missouri for the Use of FAGER AND FRIESEN INSURANCE AGENCY, Respondent, v. STORMS-GREEN CONSTRUCTION COMPANY et al., Appellants.
    No. 23874.
    Kansas City Court of Appeals. Missouri.
    Oct. 5, 1964.

      Donald B. Clark, Campbell & Clark, Kansas City, for appellants.
    Robert D. Youle, Daniel M. Dibble, Lathrop, Righter, Gordon & Parker, Kansas City, for respondent.
   SAMUEL A. DEW, Special Commissioner.

The plaintiff sued defendants on a contractor’s surety bond to recover premiums ■on insurance policies issued in connection with a highway construction subcontract. Judgment was rendered for plaintiff for $6187.74. Defendants have appealed.

This case is one of three companion cases tried together although not consolidated, involving many of the same parties and issues and much of the same evidence growing out of the grading and preparation of a roadbed for Route #67 in St. Francois ■County, Missouri, known as the “Flat River job”. The other two cases are: Kansas State Bank v. J. W. Storms et al., No. 23,-873, Mo.App., 382 S.W.2d 805 and Fager and Friesen v. J. W. Storms et al., No. 23,-872, Mo.App., 382 S.W.2d 801. Separate judgments were entered in the three cases, separate appeals taken therein, and a single transcript of record filed in this court. For a more general review of the background of the instant case, the case of Kansas State Bank v. Storms et al., supra, may be consulted.

The Fager and Friesen Insurance .Company is a copartnership, composed of Emery E. Fager and Max J. Friesen, operating an insurance agency, and located in the Kansas State Bank at Overbrook, Kansas, of which they were also cashier and assistant cashier, respectively. For convenience we shall refer to the use plaintiffs as the plaintiffs, as did the trial court.

The Storms-Green Construction Company is also a partnership, and was composed of J. W. Storms and Harvey C. Green of Kansas City, Missouri, hereinafter referred to as Storms-Green. The Clark Construction Company is a corporation of St. Joseph, Missouri, referred to as the Clark Company. The defendant Travelers Indemnity Company is a corporation, to be referred to as Travelers. The Hartford Accident and Indemnity Company, a corporation, mentioned in evidence, will be designated as Hartford.

In November, 1957, Storms-Green and the Clark Company entered into a contract with the Missouri Highway Commission to construct and to prepare a roadbed for the highway above mentioned. As required by Sections 107.170 and 227.100(4) RSMo 1949, V.A.M.S., Storms-Green and the Clark Company, as principals, and defendant Travelers executed a penal bond in the sum of $1,588,667.28, payable to the State of Missouri, conditioned, among other things, upon the payment of all obligations of defendant Storms-Green and the Clark Company in connection with said construction work, including the payment for “all insurance premiums, both compensation and all other kinds of insurance on said work”.

The defendants Storms-Green and the Clark Company divided the prime contract on the job, the former taking the roadbed construction part and the latter assuming the bridge work. Thereupon Storms-Green subcontracted the rock excavation to one Dale Bloom, a contractor specializing in such work and possessing machinery and equipment adequate for such purpose. Bloom thereupon moved his equipment onto the job site and began operations under his subcontract. Bloom himself was required by law to carry insurance on the job to cover liability for workmen’s compensation and other specified liabilities. The plaintiffs had, over the years, arranged for all of Bloom’s insurance on his various construction contracts through Hartford, with which they had an agency contract. As usual, they arranged insurance for Bloom from Hartford on his “Flat River” job.

After about one year of operations under his Flat River subcontract, and due to various unfortunate circumstances, Bloom became insolvent when his job was not yet nearly completed. Because defendants Storms-Green and the Clark Company, as prime contractors on the job, were responsible for the entire contract, they executed an agreement with Bloom, dated December 26, 1958, whereby they assumed the uncompleted portion of his subcontract, employed him as a superintendent on the job, agreed to pay all his obligations incurred under his subcontract chargeable to the job, and, with the use of his machinery and equipment under certain conditions, to finish the construction project as provided in the prime contract. Bloom testified that he did not tell the plaintiffs that such arrangement had been made although he had previously told them of such plans to so handle the situation.

Bloom’s past due account with the plaintiffs for insurance premiums in connection with his several contracts had reached the sum of $17,425.73, for which the plaintiffs had made demand without success. Of this amount plaintiffs claimed that $12,948.23 was applicable to Bloom’s Flat River job. This allocation was disputed by the defendants.

Under the plaintiffs’ agency agreement-with Hartford and in accordance with the admitted custom and practice between insurance companies and their agents or brokers, • the plaintiffs would solicit and submit to the company applications for insurance of the type desired which, if' au-thorizedby the insurance company, would be prepared, issued and delivered to the agent or broker upon his payment to the company of the premiums therefor, less commissions, and the agent or broker would then deliver the policy to the insured and charge the entire premium to the insured’s account. Under this modus operandi, the plaintiffs, as of December 26, 1958, had paid to Hartford $12,948.23, less commissions, for premiums which, according to plaintiffs’ evidence, applied on policies supplied to Bloom on his Flat River job, which balance was long past due and unpaid.

On January 1, 1959, Bloom executed and delivered to plaintiffs his note for $13,831.-65, secured by a chattel mortgage on certain items of his road equipment referred to, which note and mortgage were the subjects of said cause of Fager et al. v. Storms et al., No. 23,872, Mo.App., 382 S.W.2d 801, above mentioned. It was stipulated by the parties in this cause that such note and mortgage were given “for the purpose of securing payment of insurance premiums then due and owing by Dale Bloom and advanced and paid by plaintiffs to the Hartford Accident and Indemnity Company”. There was evidence that the amount of the note was a mere estimate and that future additions or deductions would be considered.

Pursuant .to the new agreement between Bloom and the defendants Storms-Green and Clark Company for the assumption by defendants of Bloom’s uncompleted subcontract he, as of January 1, 1959, ceased to be an independent contractor; his employees became defendants’ employees, and the same road equipment remained and was used on the job. Defendants deny that any of the policies written for Bloom after January 1, 1959, were authorized, and he so testified. Plaintiffs’ evidence tended to prove that- not only were they not advised that Bloom and the prime contractors had made the arrangement for the latter to complete-the subcontract but that in fact the location of the Bloom machinery remained unchanged; that a very small portion of Bloom’s insurance was ever ordered to be canceled; that certain charges on Bloom’s premium account were retroactive as of January 1, 19S9, because of the nature of the work under the subcontract. The court found on evidence adduced, that the correct balance due on Bloom’s account for premiums for insurance on the Flat River job to be $12,948.23, less a credit of $3870.-05 from the judgment of the court in said cause of Fager et al. v. Storms et al., No. 23,872, 382 S.W.2d 801, plus interest to January 1, 1963, on premiums not included in the face of the note, applicable to the Flat River job, $716.63, making a total of $6187.74 due the plaintiffs in this case.

Defendants’ first and principal point of error is, in effect, that the court erred in failing to find that the account which Bloom owed the plaintiffs was simply for money loaned to and advanced for Bloom and not for “insurance premiums” within the meaning of Section 107.170 RSMo 1949, as amended, V.A.M.S., and therefore plaintiffs were not beneficiaries under defendants’ performance bond and have no cause of action under Section 522.300 RSMo 1949, V.A.M.S.

As stated, Section 107.170 makes it the duty of officials and other agents of the state or certain subdivisions thereof in making contracts for public work, to require the contractor to furnish bond such as we have referred to herein. The pertinent language of that Section secures payment of “all insurance premiums, both compensation, and all other kinds of insurance, on said work”. Section 227.100 imposes the duty upon a contractor in the construction of a state highway to furnish such a bond to insure the fulfillment of his contract In connection with public work, Section 522.300 gives the right to sue on such bond to persons “furnishing material or performing labor, either as an individual or as a subcontractor for any contractor”, and to do so in the name of the state or subdivision thereof for his use and benefit.

The question whether a given claimant under the contractor’s performance bond provided for by such statute is a proper beneficiary of such a bond has challenged the judicial, acumen of this and other states. Berger Mfg. Co. v. Lloyd et al., 209 Mo. 681, 108 S.W. 52. The case of Audrain County ex rel. and to Use of First National Bank v. Walker et al., 236 Mo.App. 627, 155 S.W.2d 251, heavily relied on by defendants in this appeal, in its able and exhaustive main opinion and two discerning opinions concurring therewith, is an example of the meticulous consideration that must be given to the pertinent facts and statutory provisions involved in order properly to determine the right of a claimant to sue on such a bond. We note that case more fully hereinafter.

The plaintiffs vigorously argue that under the circumstances in evidence they “furnished insurance” to defendants’ subcontractor on the Flat River job within the meaning of the foregoing statutes. They maintain that their claim is not merely a case of money loaned to or advanced for Bloom, but it was insurance that plaintiffs procured for Bloom at his request for the highway job and for which1 they paid Hartford the premiums according to custom and later charged to Bloom’s account.

Defendants claim that under the facts in this case plaintiffs had no authority to “issue” insurance policies; that plaintiffs guaranteed no one against loss under any specified risk; that such protection can only be furnished by someone authorized by law to issue insurance contracts and guarantee against certain hazards; that policies handled by the plaintiffs were executed at the home office of Hartford and mailed to plaintiffs to be countersigned and delivered to Bloom; that plaintiffs were not parties to such contracts and plaintiffs’ obligations to Hartford for any premiums could have been eliminated by 30 days’ notice of cancellation. They say that the insurance was “furnished” by Hartford, which1 has been fully paid and what remains is simply a claim by the plaintiffs for funds loaned to Bloom. The contractor’s bond, they insist, does not extend to include a guaranty of repayment of such loans.

The defendants, by way of illustration, call attention to the fact that if Bloom had requested cancellation of any of his policies and Had demanded the unearned premiums to which he would be entitled, Hartford could not, without Bloom’s consent, comply by paying the unearned premiums to the plaintiffs; that the company could not refuse such refunds to Bloom on the ground of nonpayment by Bloom to the company. In other words, defendants’ theory is that, as between Bloom and Hartford, the “insurance premiums” had been paid, the policies remained in force, and the company had no claim against Bloom. They suggest further that the taking of Bloom’s note and chattel mortgage showed that the amount was a loan transaction. Plaintiffs’ claim, they say, is an obligation between Bloom and the plaintiffs in which Hartford had no interest because its premiums had been fully paid. To prevail, they say, the plaintiffs must show that they “furnished insurance” to Bloom on the job.

The general rule stated in 164 A.L.R. 783, is cited by defendants 'and reads as follows :

“The general rule that á claim for money loaned or advanced to a building or construction contractor is not within the coverage of the ordinary form of contractor’s bond conditioned for the performance of contract and the payment of all claims- for labor and material, even though the borrowed money has been wholly applied-to the payment of the cost-of labor and material actually going into the construction project, is- supported by several-later cases. Citing United States (for the) use (and Benefit) of Dorfman v. Standard Surety and C. Co., (1941; DC) (37 F.Supp. 323) and other cases”.

Defendants assert that such rule prevails in Missouri; and they rely heavily on the case of Audrain County ex rel. First National Bank of Mexico v. Walker et al., Mo.App., 155 S.W.2d 251, supra. In that case Audrain County had enteréd into a contract with one Walker, a contractor, to build a nurses’ home for that county. The contractor, before entering upon the performance of the contract, made and filed a performance bond, conditioned that the contractor would faithfully and properly perform the building contract. Walker, not being able to finance the cost of labor and materials on the job, arranged with the bank to supply him with funds therefor. Pursuant to that arrangement the bank advanced to Walker the total sum of $3094.46 in cash, which Walker used for the payment "of the cost of labor and materials on the job and which was not repaid to the bank. The bank sued on the performance bond for its claim for money so advanced and used. Among the defenses to the action it was contended and the appellate court held, that the bank was not such a person designated in the statute as would be entitled to sue on such a bond and that the bank did not furnish any of the items prescribed in the law. The judgment in favor of the bank was reversed on appeal upon the principle, that “* * * [a] bank furnishing money or funds to a building contractor with which for him to perform, or with which he does perform such building contract- is not within the contemplation of the Legislature as shown by the statutory provisions” (1. c. 255 of 155 S.W.2d).

The appellate court further said in the Audrain County case, supra, page 254 of 155 S.W.2d:

“The source of the funds with which performance of the contract was made neither creates nor destroys liability on the bond. The contract was performed just the same. In such situation, if. reimbursement to the bank is to be made, it must be from some source other than the bond given only to protect fulfillment or performance of a contract not pleaded or shown to have been broken, but on the contrary both pleaded and shown to have been performed with funds furnished by the bank. * * * Payment to a person furnishing money, regardless of the purpose for which such money was used, was not a requirement of performance of such contract”.

The court also said (page 256 of 155 S.W. 2d):

“It does not require construction or sophistry to see that in this instance the bare fact that the bank supplied Walker with funds with which to perform his contract, that such act on the part of the bank was not included in the provisions of the terms of the bond or of the statute in conformity with whidi such bond was given. * * * it seems perfectly clear that the Legislature and the parties to this bond had only in mind the protection, primarily at least, of the persons performing work or supplying the items and articles set forth in both the statute and the bond here.”

In the case of Camdenton Consolidated School District No. 6 of Camden County ex rel. W. H. Powell Lumber Co. v. New York Casualty Co., 340 Mo. 1070, 104 S.W.2d 319, a contractor had failed to pay the lumber company for material furnished for and used in a school building constructed by the contractor. At the outset Dawson, the contractor, had approached the lumber company with the suggestion that he might be awarded the contract if he could get financial backing. The representative of the lumber company had told him to “Go ahead and get the contract and he would take care of my payroll”. Dawson failed to complete the building. Action was brought on the contractor’s bond to recover the amount owing the lumber company. It had been agreed between the lumber company and Dawson that out of the payments made to him by the school board he would repay the lumber company for its advancements for the payroll. In addition to its lumber account, the lumber company had advanced to Dawson $4593.94 for his payroll, which was so used. Out of a payment of $5148.60 so made by Dawson to the lumber company, that company credited the full amount of the cash account to that account, and only $106.52 to the material account against Dawson. It was urged by the surety company that its equitable right to the extinguishment of its liability by the application of such cash payment by the contractor to the material account was superior to the right of the lumber company with knowledge of the source of the funds for such payment to apply most of same to the satisfaction of its cash account instead of applying it to the material account. The Supreme Court held, however, that under the facts the lumber company’s equitable right to the funds so repaid was superior to that of the surety, and sustained the judgment for the plaintiff except as to damages for vexatious delay and attorneys’ fees. The court further ruled that inasmuch as Dawson owed the lumber company for both accounts and did not direct the payment to be made to one or the other, the lumber company had a right to credit the accounts as it elected.

In the case of School District No. 18 of Caruthersville et al. v. McClure et al., Mo., 224 S.W. 831 (1920), a school district took over the completion of a school building which its contractor had not completed, and in doing so, expended a larger sum than the contract price. One item was $800 borrowed from a bank and used to meet the payrolls. The court said (page 834 of 224 S.W.) :

“The evidence tends to show that this money (borrowed from the bank)' was used to pay for labor done upon this school building. It was gotten for that purpose, and whilst notes were given with the order aforesaid as collateral, we are' inclined to the view that this item * * * was properly chargeable to the bond in suit. The money was actually paid for labor done upon the school building”.

It is apparent that the qualifications of a person to sue on a contractor’s performance bond given in connection with public work must be determined on the particular facts and statutory requirements involved in the particular case. If the statutory specification of the items protected by such bonds in Missouri be persuasive or determinative of the issue in early cases it must be noted that the amendment of Section 107.170 in Session Acts of 1933, p. 179, specifically added the present words: “ * * * and all insurance premiums, both compensation, and all other kinds of insurance, on said work * * * It is conceded in the present case that such insurance as such contractors are required by law to carry on such public work, must now be considered, for the purposes of the above statute, as material for the job.

The defendants and the plaintiffs, as well as the trial court, construe the language of Section 107.170 to extend the protection of the contractor’s bond to one “furnishing insurance” on the work, but defendants contend that such qualification is not met by an agent or broker advancing the premiums for such insurance. The plaintiffs’ position is that one who procures the required policies, pays the premiums therefor and delivers them to the contractor under the circumstances shown in evidence, is, within the meaning of that statute, “furnishing insurance.”

We think the purposes and intent of the quoted language of the statute in question were and are, primarily, to make more nearly certain the contractor’s compliance with the statutory insurance requirements on public work (Sec. 287.280 RSMo 1959, as amended, V.A.M.S.), and to make more secure the payment of the cost thereof, and, in so doing, to extend the protection of the contractor’s bond to one who, as insurer or authorized agent, has supplied and delivered to the contractor the insurance requested and required, in consideration of the payment to such person by the contractor of the stipulated premium. The fact is that by securing the “insurance premiums” the bond would thereby secure the “furnishing” of insurance, which is the real objective of the provision.

We think there is a substantial distinction between the case of a mere cash loan, on the one hand, to a contractor on a public job for the purpose of enabling him to meet a specific obligation imposed upon him by statute and so used by him, and;, on the other hand, the case of one who, at the request of the contractor, procures for him the particular type of material or article specified and required by law, paying the initial and periodic charges therefor according to prevailing custom, and, upon delivery of the same to the contractor, charging to his account the cost so paid, thus enabling the contractor to comply with the statutory requirement on such jobs. The desired effect of the statute is to facilitate the construction of public work and to furnish to those supplying labor and material to such construction the same measure of protection afforded by the mechanics’ lien law where the work is not public. State ex rel. Francesconi et al. v. Ætna Casualty & Surety Co., Mo.App., 350 S.W.2d 418. It was the further evident purpose of the statute to make the furnishing of insurance of the various types required, itself an item of contribution to the project, to be specifically included within the protection of the contractor’s performance bond.

If such bond does not extend its protection to an insurance agent who performs the services and supplies the required insurance policies under the circumstances here shown in evidence, and pays, upon the issue of the policies or renewal thereof, the initial or periodic premiums therefor, as required by the insurer and according to custom, then such contractor, by failing to pay the agent such premium account could, nevertheless, continue compliance with the statute as respects insurance on public work, and enjoy the protection of such policies, at the expense of such person so procuring the necessary insurance. To such a person the only immediate remedy would be involuntary cancellation of his customer’s policies, which would place the contractor in a position of noncompliance with the statutory insurance requirements. If such agent refrained from such drastic remedy as involuntary cancellation of the policies, then the contractor’s continued compliance with the statute respecting insurance would be dependent upon the agent’s voluntary credit. Such construction, in our opinion, is incompatible with the spirit, purpose and intent of the statute in question. It is our conclusion that the plaintiffs are proper beneficiaries under the bond sued upon.

The defendants next contend that the court erred in failing to find that the items of plaintiffs’ account against Bloom for insurance premiums after January 1, 1959, were for his personal insurance, or insurance against no existing hazards at all, or were issued without authorization by Bloom, or were duplicates of insurance already covered by defendants’ insurance, and that plaintiffs have no right to reimbursement for the premiums therefor advanced by them. The court’s findings on these items were supported by substantial evidence and we deem the balance found by the court as due the plaintiffs to be correct.

We find no error in the trial of the case affecting the merits and rule that the judgment be affirmed.

The foregoing opinion of SAMUEL A. DEW, Special Commissioner, is adopted as the opinion of the Court and the judgment is hereby affirmed.

All concur.


author: STONE, Judge.

text:
    Anna Maydeen KING, Plaintiff-Respondent, v. Everett KING, Defendant-Appellant.
    No. 8344.
    Springfield Court of Appeals. Missouri.
    Oct. 9, 1964.

      Douglas & Douglas, Neosho, for defendant-appellant.
    Graves & Graves, Neosho, for plaintiff-respondent.
   STONE, Judge.

On September 30, 1963, plaintiff Anna Maydeen King instituted this action hy the filing of her petition for separate maintenance. On the next day, defendant Everett King filed his answer and cross-hill, in which he sought a decree of divorce a vinculo matrimonii, i. e., an absolute divorce, on the sole statutory ground that plaintiff Maydeen “[had] absented * * * herself without a reasonable cause for the space of one year” [V.A.M.S. § 452.010], which is “the legal equivalent of ‘desertion’ as defined in textbooks and reported cases” [Nolker v. Nolker, Mo. (banc), 257 S.W. 798, 803] and is “commonly referred to as desertion.” Watson v. Watson, Mo.App., 291 S.W.2d 198, 200. Following trial on January 8, 1964, both plaintiff’s petition and defendant’s cross-bill were dismissed by the court. Defendant Everett has appealed, insisting that he was entitled to a decree of ■divorce upon his cross-bill. Since plaintiff Maydeen has not appealed, the propriety of the dismissal of her petition for separate maintenance is not before us. Davis v. Broughton, Mo.App., 369 S.W.2d 857, 858-859; Wilson v. Motors Ins. Corp., Mo.App., 349 S.W.2d 250, 251.

Everett, then 20, and Maydeen, then 17, were married in Pineville, McDonald County, Missouri, on June 2, 1933. Almost twenty-nine years later, to wit, on February 5, 1962, they separated in Diamond, Newton County, Missouri. No children had been born of the marriage. Nothing in the record suggests that, prior to the year before their separation, their marital bark had sailed through more troubled seas or had been buffeted by more tempestuous storms than those encountered in the ordinary domestic voyage. Everett had been in military service for three years during World War II, after his discharge had worked as a contractor for about four years, and for some eleven years prior to 1962 had been employed at Fort Crowder as an equipment operator with civil service status. While Everett thus had been engaged in providing for the family, Maydeen had been cast in the more prosaic, but nonetheless important, role of homemaker and housewife. That she had discharged her duties well was attested by Everett’s quick and complete agreement upon trial that she had “made [him] a good wife.” Likewise, Everett readily conceded that Maydeen had never told him that “she didn’t love [him]” and had never “failed to perform her marital duties.”

“A number of times” during a relatively brief period prior to their separation on February 5, 1962, the parties had “some trouble” but (in Everett’s words) “not real bad I wouldn’t say.” As Everett explained it, the trouble was Maydeen’s “just griping about this and griping about that.” But his testimony suggested that the root of the trouble was that “she felt I was having too much [evening] activity” outside the home, and her testimony definitely confirmed that. Maydeen stated that “he would be gone at least five nights a week, sometimes six,” and that she had obj ected to that as “most any woman would.” She believed, but without definite supportive proof, that Everett had been “running around with other women.” Apparently to her intuitive feminine mind that was the only reasonable or logical answer to the age-old provocative query (upon trial put by Maydeen to her cross-examiner), “what do men run around all the time at night away from home for?”

Conceding that he had been out five nights “possibly some weeks but not every week,” Everett offered an answer to the quoted query (insofar as it pertained to his own conduct) by relating his attendance at meetings of the Masonic Lodge, the Veterans of Foreign Wars, and the American Legion, with particular emphasis upon his activities as “chairman of the homecoming ■committee” for a celebration in October 1961 to honor one Tucker after his election to the office of state commander of the American Legion. But regardless of where •or how Everett had spent his evenings, it is reasonable to infer that many absences from home were motivated or prolonged by Tiis admitted feeling that “he just dreaded to ■come home of an evening,” because (so he ■said) of “what I would face when I would get there.” Maydeen’s physical condition and time of life may have contributed to the difficulty, for she had undergone a hysterectomy on April 5, 1961, was nervous and unable “to do anything at all” after returning home from the hospital, “had quite a time with the incision healing,” and still was unable to work when the parties separated on February 5, 1962.

The incident which culminated in separation occurred on the evening of Sunday, February 4. As Everett prepared to leave “supposedly” for the purpose of visiting a sick neighbor in the hospital, Maydeen expressed a desire to accompany her husband. In her words, “I could tell by the expression on his face he didn’t want me to go with him; in fact he just said he didn’t want me to go with him.” Everett’s trial version was that he had told his wife that she “could go along,” but that, when she said “yes, but you don’t want me to go,” he had replied, “well, I just won’t go.” In any event, an argument ensued in which May-■deen said in substance that she “had took all [she] could take of it” and “accused [Everett] of doing this and doing that,” ■insinuating that he was “going with other women.” As is usually true in such situations, “one thing led to the other” until (so Maydeen stated upon trial) “he told me that •one of us had to leave” and, being physically and financially unable to maintain the home alone (they were then living on a 17-acre tract), she had said that she would leave. Everett testified that he had told his wife "“now listen, you don’t have to leave,” but that she had insisted “I am not going to stay Fere.” That same evening both Maydeen and Everett talked over long distance with a niece in Dallas, and in another long distance call to Joplin Maydeen obtained information concerning bus schedules to Dallas. When she subsequently remarked that she did not have sufficient luggage to complete her packing, Everett volunteered that “in the morning we’ll go get you some suitcases”; and so he did. On the evening of Monday, February S, he put her on a bus at Joplin, and she went to Dallas where she visited for three weeks before returning to Neosho.

Thereafter, she lived in Neosho. Although the record is not definite and complete on this subject, she apparently worked most, if not all, of the time. Her first place of employment was the Big Spring Inn (the nature of her work there was not shown), and at the time of trial she was employed as a clerk at the Newton Hotel. Her gross salary there was $25 per week; her take-home pay, $21.79 per week. The hotel did not furnish her meals. She resided in an apartment, where the rental was $30 per month and she paid the utility bills. It appears that she lived alone.

Everett called at her apartment several times during the interval of some twenty-two months between the date of her return from Dallas and the time of trial. There were at least two conversations with respect to the property settlement upon which the parties reached general oral agreement without the aid of counsel and which, not reduced to writing and over-simplified in statement, was “to split everything down the middle.” Everett mentioned in evidence another occasion on which he had taken his wife to close the sale of the 17-acre tract and three occasions on which he allegedly had asked her whether “she needed any money” and she had replied in the negative. The record does not fix the exact date of any of these conversations, but it is clear that all of them related to financial matters and not to possible reunion or reconciliation.

Everett’s cross-bill sought a divorce on the sole statutory ground of desertion. To prove desertion, within the meaning of V.A.M.S. § 452.010, three elements must be established, namely, (1) cessation from cohabitation without reasonable cause for one year, (2) an intention on the part of the deserter not to resume cohabitation, and (3) absence of consent to the separation on the part of the deserted. Eschewing an unnecessary discussion of the first element and of the factor of “reasonable cause” inherent therein, it appears that the finding of failure to prove the second element was permissible and justified. Maydeen testified, and the trial chancellor well might have accepted her statement, that “I would have been back home if I had been asked to be.” In fact, it is reasonably inferable that Everett was cognizant of that, for, when opposing counsel put the question, “you know that Mrs. King would go back and live together as man and wife at any time, don’t you,” his indifferent reply was “under her terms,” and explanation of or elaboration upon this disinterested, meaningless rejoinder was neither sought nor offered.

But if there were doubt as to Everett’s failure to prove the first two elements, there is, in our view of the case, no reasonable basis to doubt the propriety of the finding that Everett failed to prove the third element, i. e., absence of his consent to the separation. The importance of this element is attested by numerous holdings that a spouse, who consents to or acquiesces in separation from the other, may not have a divorce on the statutory ground of desertion. Even though a deserting spouse may not have had just cause to have absented himself or herself from the other, and even though the deserted spouse may not have consented to separation in the first instance, nevertheless the absence does not constitute abandonment and will not ripen into statutory desertion, if the deserted spouse, within the statutory period of one year, acquiesces in the separation. And the fact that the deserted spouse neither sought nor evidenced any interest in reunion or reconciliation is an important circumstance indicative of such acquiescence.

When Mrs. Rosie Hunter, a close family friend, talked with Everett “shortly after the separation” for the praiseworthy purpose of helping the parties “get together and make a go of it * * *, Everett didn’t seem to think there was anything I could say or do that would help, that he hadn’t been happy at home for quite some time.” And on August 15, 1962 (about six months, after the separation), Everett plainly evidenced his desire to make the separation, final and permanent by filing a suit for divorce which, however, was dismissed prior to trial. Cf. Campbell v. Campbell, Mo.App., 281 S.W.2d 314, 319(5). In short,. “ ‘[t]here is nothing to satisfy us that the separation was against the will and wish of' [Everett] or that he was ever desirous that-it should cease.’ ” Boos v. Boos, 88 Mo.App. 530, 533; Scott v. Scott, 44 Mo.App. 600, 605(2). Rather, the inescapable import of the evidence is that the separation was not unwelcome or displeasing to him-.. but that he consented to and acquiesced in it. Price v. Price, Mo.App., 281 S.W.2d 307, 312(14); Plymate v. Plymate, Mo.App., 180 S.W. 29, 30(2).

In these circumstances, the judgment nisi denying a divorce to Everett on the statutory ground of desertion and dismissing his cross-bill was correct and should be affirmed. It is so ordered.

RUARE, P. J., and HOGAN, J., concur.

      . Parenteau v. Parenteau, Mo.App., 305 S.W.2d 723, 729(5); Smith v. Smith, Mo.App., 299 S.W.2d 32, 34(2); Crum v. Crum, Mo.App., 217 S.W.2d 715, 717(1); Parsons v. Albertson, Mo.App., 31 S.W.2d 211(1); Hall v. Hall, 77 Mo.App. 600, 607(2).

      . Nolker v. Nolker, Mo., 257 S.W. 798, 803 (8, 9); Simpson v. Simpson, 31 Mo. 24; Campbell v. Campbell, Mo.App., 281 S.W.2d 314, 318-319(4, 5) ; Price v. Price, Mo.App., 281 S.W.2d 307, 312(14), and cases collected in footnote 6.

      . Campbell, supra, 281 S.W.2d loc. cit. 318(4); Nicholson v. Nicholson, 214 Mo.App. 570, 581, 264 S.W. 82, 85(8); Creasey v. Creasey, 168 Mo.App. 68, 96-98, 151 S.W. 219, 227-228(6, 8); Davis v. Davis, 60 Mo.App. 545, 554-555(1); Droege v. Droege, 55 Mo.App. 481, 486.

      . Campbell, supra, 281 S.W.2d loc. cit. 318; Walthen v. Walthen, 101 Mo.App. 286, 73 S.W. 736; Boos v. Boos, 88 Mo.App. 530, 533; Rodgers v. Rodgers, 84 Mo.App. 197, 199; Droege, supra, 55 Mo.App. loc. cit. 485; Gilmer v. Gilmer, 37 Mo.App. 672, 675; Dwyer v. Dwyer, 16 Mo.App. 422, 424.


author: BROADDUS, Presiding Judge.

text:
    STATE of Missouri ex rel. TRANSPORT DELIVERY COMPANY, and John Groner Motor Carrier, Inc., Appellants, v. PUBLIC SERVICE COMMISSION of the State of Missouri, Respondent, W. M. Kersting, Intervenor.
    No. 24020.
    Kansas City Court of Appeals. Missouri.
    Oct. 5, 1964.
    Hendren & Andrae, John H. Hendren and John E. Burruss, Jr., Jefferson City, for appellant Transport Delivery Co.
    Rozier, Carson, Inglish, Nacy & Monaco, George A. Rozier, Jefferson City, for appellant John Groner Motor Carrier, Inc.
    Glenn D. Evans, Thomas J. Downey, Herman W. Huber, Jefferson City, for intervenor.
   BROADDUS, Presiding Judge.

This case originated with a complaint filed by Appellants under Section 386.390 RSMo 1959, V.A.M.S., against Intervenor, W. M. Kersting, before Respondent, Public Service Commission. After hearing, • the Commission entered its Order dismissing said complaint. Thereafter, the case was appealed by Writ of Review to the Circuit Court of Cole County, which affirmed the Respondent’s Order. Thereafter, an appeal was taken to this court.

Appellants, Transport Delivery Company and John Groner Motor Carrier, Inc., are motor common carriers of petroleum and petroleum products, holding authority from Respondent, Public Service Commission to transport such commodities in bulk, in tank vehicles. Appellant, Transport Delivery Company, holds its authority from the Commission under Certificate of Public Convenience and Necessity No. T-9110. Appellant, John Groner Motor Carrier, Inc., holds its authority under Certificate No. T-11258.

The Certificate of Appellant, Transport Delivery Company, authorizes it to transport petroleum and petroleum products in bulk in tank vehicles from the terminal near Mexico, Missouri, known as the Sinclair Petroleum Products Terminal to all points and places within an area consisting of approximately the eastern three-fourths of the State of Missouri.

Appellant, John Groner Motor Carrier, Inc., is authorized under its Certificate to transport petroleum and petroleum products in bulk in tank vehicles from the terminal near Mexico, Missouri, described above, to all points in this State.

In addition both carriers hold authority from Respondent under their respective Certificates to transport petroleum and petroleum products in bulk in tank vehicles from various other terminals throughout the State of Missouri to points in the State, including in some instances the town of Aux-vasse, Missouri, and points and places within 15 miles thereof.

Appellant, John Groner Motor Carrier, Inc., has been in the business of transporting petroleum and petroleum products in bulk in tank vehicles under the regulation of Respondent since May 1942. Its authority from the Sinclair Petroleum Products Terminal near Mexico was granted by an Order of Respondent Commission, which was effective August 31, 1957.

Appellant, Transport Delivery Company, or its President, E. R. Minshall, Jr., has been engaged in the transportation of petroleum and petroleum products in bulk in tank vehicles since 1936. The Company’s authority from the Sinclair Petroleum Products Terminal near Mexico, was obtain in 1940 by E. R. Minshall, Jr., and was transferred to the Company by Respondent’s Order in Case No. 12,651, on January 6, 1956.

Intervenor, W. M. Kersting, is presently the holder of Certificate of Public Convenience and Necessity No. T-254, which: was originally granted by Respondent Commission, to one Wilbur Stanley Foster on October 21, 1932. Certificate No. T-254 was what is sometimes referred to as a “grandfather” clause of the Missouri Bus. and Truck Law, Section 5277, p. 315, Laws-of Mo. 1931. (Section 5733, R.S.Mo. 1939). The authority as stated in the Commission’s Order of October 21, 1932, was as follows:

“That Certificate of Convenience and Necessity No. T-254 be and the same is hereby issued to Wilbur Stanley Foster of Auxvasse, Missouri, for authority to operate as a freight-carrying motor carrier over an irregular route as follows : Regular — Auxvasse over U. S. State Highway No. 54 to Junction with U. S. State Highway No. '40; thence over U. S. State Highway No. 40 to St. Louis and return with authority to pick up and discharge property at Auxvasse and St. Louis and no intermediate points. Irregular — Trade territory contiguous to Auxvasse, and from that territory to all points in Missouri and from all points in Missouri to that territory; subject to the limitations contained in the Missouri Bus and Truck Law of 1931 concerning the operation of a motor truck as a common carrier for hire over an irregular route.”

For a period of approximately two years prior to obtaining the Certificate mentioned above, Mr. Foster engaged in the transportation of freight by motor vehicle. During that time he was hauling cattle from Auxvasse, Missouri, to St. Louis, Missouri, and dry freight from St. Louis to Aux-vasse upon the return trip. He did not engage in the transportation of petroleum products in bulk and did not own or operate any equipment suitable to the performance of that service. Mr. Foster did haul some oil in barrels during the two year period prior to October 21, 1932.

By Order of Respondent, Commission, dated May 4, 1945, in Case No. T-9116 the authority held by Mr. Foster under Certificate No. T-254 was transferred to one J. T. Willis. During the time Mr. Willis held Certificate No. T-254, the authority was clarified by restatement thereof. On August 21, 1950, Respondent, Commission, •entered its Order restating the authority so that it read as follows:

“Between Auxvasse, Missouri, and points and places in Audrain, Boone and Callaway Counties, Missouri, except Mexico and Fulton, within 15 miles of Auxvasse, on the one hand, and all points in Missouri, on the other hand, subject to the limitations contained in Section 5723 R.S.Mo.1939, prohibiting irregular route operations between points on the regular route of an authorized motor carrier.”

Thereafter, Mr. Willis transferred the authority held under Certificate No. T-254 to Intervenor, W. M. Kersting. The transfer was facilitated by Respondent’s Order datcd December 11, 1959, in Case No. T-18,942.

Neither of Intervenor, Kersting’s predecessors, as holders of Certificate No. T-254, engaged in the transportation of petroleum products in bulk in tank vehicles, nor did they offer such service to the public. Both Mr. Foster and Mr. Willis engaged primarily in the transportation of livestock to St. Louis, Missouri and dry freight upon the return trip to Auxvasse, Missouri. To a limited extent Mr. Foster, the original holder of the Certificate and Mr. Willis, his successor, transported oil in barrels, but they never transported any gasoline or other petroleum products in bulk, and never owned or operated motor vehicle equipment suitable for the transportation of petroleum products in bulk.

On February 8, 1962, Intervenor, Ker-sting, filed a tariff with Respondent which was specifically applicable to the transportation of petroleum and petroleum products in bulk. Prior to the filing of such tariff by Mr. Kersting, no special commodity tariff applicable to the transportation of petroleum or petroleum products in bulk had been filed by Mr. Foster, Mr. Willis or Mr. Kersting. After filing the tariff applicable to petroleum and petroleum products in bulk, Intervenor, Kersting, acquired some tank vehicles to use in the transportation of those commodities, and began soliciting business. Specifically, Mr. Ker-sting has solicited business from the Sinclair Petroleum Products Terminal near Mexico.

On April 18, 1962, Appellants filed a Complaint before Respondent against In-tervenor, alleging in effect that Interven- or’s proposed operations in the transportation of petroleum and petroleum products in bulk were in excess of and beyond the scope of the authority held by Intervenor under Certificate No. T-254.

On April 19, 1962, Respondent entered its Order requiring Intervenor, Kersting, to satisfy or answer the complaint. Inter-venor filed an “Answer and Motion to Dismiss” on April 27, 1962. The case was set for hearing and was heard by Respondent, on June 21, 1962. The Respondent, Commission, issued its Report and Order dismissing the Complaint on December 17, 1962. Thereafter, Appellants filed “Motion for Rehearing”, which was denied by Order of the Commission dated April 5, 1963.

On March 4, 1963, Appellants filed their Petition for Writ of Review in the Circuit Court of Cole County. On the same date the Circuit Court of Cole County issued its Writ of Review directed to Respondent. The Circuit Court of Cole County heard the case on June 20, 1963. The Court entered its Order affirming the Order of Respondent in all respects on June 25, 1963.

Appellants contend that the circuit court erred in affirming the Order of the Commission in that the authority originally granted by Respondent, Commission, under Certificate No. T — 254 did not include authority to transport petroleum products in bulk because the authority was granted under the “grandfather” clause of the Missouri Bus and Truck Law, Sect. 5733, R.S. Mo. 1939, and the applicant Foster did not transport petroleum products in bulk on or before the date established by the statute.

A certificate of public convenience and necessity issued to a common carrier by motor vehicle under Section 390.051 RSMo 1959, V.A.M.S., or as transferred under the provisions of Section 390.111 RSMo 1959, V.A.M.S., which is applicable in this case, authorizing the transportation of property generally without restriction or exception as to commodities or facilities, as defined in Section 390.020(5) RSMo 1959, V.A.M.S., authorizes the transportation of any commodity capable of being moved by motor vehicle for which a common carrier has equipment to handle and for which appropriate rates are on file and approved, as in this instance.

The Respondent’s interpretation of a “property” or “general commodity” certificate held by a common carrier by motor vehicle is clearly set forth in Re Berns-koetter, 6 Mo.P.C.S. (N.S.) 117, 1. c. 120 r

Over the years the Commission has issued two general types of certificate of convenience and necessity, one of which is a specialized certificate, the-service authorized thereby requiring-special equipment specially trained employees and special handling of the commodities transported. Such a certificate specifically names the commodities to be transported and before it is granted it must be established to the-Commission’s satisfaction that the-movement of the commodity or commodities named is such as require the-specialized handling, equipment, etc.. Specialized certificates have been issued authorizing the transportation of petroleum products in bulk, liquid' petroleum gases, uncrated household' and office furniture, livestock, liquids- and chemicals of various descriptions which are transported in bulk, explosives, developed motion picture film,, heavy machinery and equipment, motor-vehicles, fresh meats and packing house-, products requiring refrigeration, etc.
“The other type of certificate issued' by this Commission is designated as a. ’general commodity’ certificate, and it. authorizes the transportation of any commodity capable of being moved by" motor vehicle. The commodities authorized to be transported are not specifically named, and the certificate is intended primarily to authorize the-transportation of the usual run of merchandise hauled by motor truck,, sometimes called ‘dry freight’. However, under current interpretation of such a certificate, it authorizes the carrier to conduct various specialized services, if it so chooses and files appropriate tariffs.” (Emphasis ours.)

It should be noted that the Appellant, Transport Delivery Company, was a party to that proceeding and did not challenge or appeal the Commission’s interpretation ■of a “general commodity” or “property’ ■certificate. See also, Re Schein Truck Lines, Inc., et al., 5 Mo.P.S.C. (N.S.) 160, 1. c. 163, where the Respondent Commission ■clearly states that the right of a carrier to transport “property” includes the right to xender specialized service as well.

Numerous cases of other general commodity carriers having obtained specialized equipment and filing tariffs for specialized transportation services are contained in the record made before the Commission.

It is clear that Intervenor is in compliance with the law, owns and operates the necessary specialized equipment and has on file and in force an approved tariff setting forth rates and charges as required.

In harmony with the Respondent Commission’s interpretation of a general commodity or property certificate is the interpretation of such a certificate by the Interstate Commerce Commission, in a case squarely in point with this proceeding. See, Coastal Tank Lines, Inc., et al., v. Charlton Bros. Transportation Company, Inc., No. MC-C-870, decided by the Interstate Commerce Commission on June 4, 1948, and reported in 7 Federal Carrier Cases, 31,512.05. On appeal the Commission was affirmed by the U. S. District Court, District of Columbia, February 10, 1953. See Coastal Tank Lines, Inc., et al., v. U. S. of America, et al., 9 Federal Carrier Cases 80,838.

Appellants do not cite or distinguish the above cases but resort to a host of cases involving many matters not germane or applicable. The contention lacks merit.

Appellants also contend that the trial court erred in affirming the Commission’s Order dismissing their complaint because Kersting and his predecessors abandoned any possible authority they ever had by virtue of Certificate T-254 to haul bulk petroleum products. This contention also lacks merit. There was no showing that Inter-venor Kersting or his predecessors ever abandoned the authority. On the contrary, the authority has been continuously exercised and in good standing with the Commission. The Certificate has never been dormant.

We fully agree with the following which appears in the Commission’s “Report and Order”:

“This case can be summed up as follows: A general commodity Certificate authorizes the transportation of any commodity capable of being moved by motor vehicle without specifically naming such commodities, and the holder of such a Certificate may conduct the various component specialized services, if he so chooses and files appropriate rates.”

The judgment of the circuit court sustaining the Order of the Commission should be affirmed. It is so ordered.

All concur.


author: HUNTER, Judge.

text:
    John B. CORBIN, Appellant, v. Harrison E. GALLOWAY, Respondent.
    No. 23967.
    Kansas City Court of Appeals. Missouri.
    Oct. 5, 1964.

      Donald B. Russell and Russell, Brown & Middleton, Nevada, for appellant.
    John M. Belisle and Belisle, McNabb & Kyser, Butler, for respondent.
   HUNTER, Judge.

Plaintiff-appellant, John B. Corbin, appeals from a judgment for the defendant-•respondent, Harrison E. Galloway, rendered by the Circuit Court of Bates County, Missouri, sitting without a jury. The action was a suit in ejectment and for damages of $2,400 based on plaintiff’s claimed ownership of certain strips of land in Bates County and defendant’s wrongful withholding of possession and cutting a hedge therefrom.

Plaintiff owned 100 acres of farm land, and defendant owned 562 acres of farm land contingent in part to the west and south sides of plaintiff’s land. Many years ago there was a public road known as the “old Papinsville Road”, which ran generally from the northwest corner of plaintiff’s 100 acre tract, south along the west side of it to the southwest corner thereof, then east along the south side of the tract to its southeast corner, and then south several miles to Papinsville. It is agreed that this road had been abandoned, the date being variously placed somewhere prior to 1920 to more than 84 years ago. The road had grown up in trees, brush and grass, and its exact location is in dispute although its general location as lying between the two farms is acknowledged.

Sometime around July, 1946, plaintiff and defendant discussed clearing the mentioned strips of land. While there is some dispute as to the precise agreement, defendant was to do the work and plaintiff was to pay “his part”. Plaintiff’s version is that defendant after clearing “this alley” was to “put a fence back on the (true division) line.” Defendant’s version of the agreement was that after clearing the “right-of-way” defendant was to put a fence “down through the middle” and that he, defendant, was to cut from a certain hedgerow what posts he needed for the fencing. According to defendant, plaintiff was to provide part of the fencing and pay half the cost of the job, and while plaintiff paid for clearing the brush he had paid nothing for building the fence.

After clearing the “strips” or “right-of-way” defendant built a fence down the middle of the “right-of-way”, (old Papins-ville Road) using possibly 100 posts cut from the mentioned hedgerow, and took possession to this fence.

As the issue shaped up during the trial, it was plaintiff’s position that the old Papins-ville Road having been abandoned for at least forty or more years the land became discharged of the easement and the absolute title to the land covered by the abandoned Papinsville Road reverted to that one of them whose predecessor in title had provided that “right-of-way” land. Plaintiff asserts that for a quarter of a mile the right-of-way land was given by his predecessor in title and was on one side of the established division line, and that for a quarter of a mile the right-of-way was given by defendant’s predecessors in title and was on the other side of the established division line.

Defendant concedes that the land in question is a strip or strips of ground which was used for many years as the old Papinsville Road and contends that once a strip of ground is used as a public road and a public road has been established either by use or judicial decree, before the adjoining landowners can acquire any rights by reversion-ary interest it is necessary that the road be closed by a judicial determination. More precisely, says defendant, once a public road is established the only method by which any reversionary interest can come into being is after a legal closing of the public road by the county court as provided by statute, Section 228.110, and not by mere abandonment of the road by the public. If this is so, then according to defendant, plaintiff has no right to eject defendant from the disputed half of the right-of-way he has fenced.

The trial court accepted defendant’s view and ruled that if a road is abandoned nonetheless the adjoining owners do not gain title to it unless there is a court proceeding actually closing it, or a judicial proceeding actually closing the road; and entered judgment for defendant.

Both parties acknowledge this is not an action to try or determine title as such, but is an action in ejectment. Accordingly, plaintiff must have a legal right to the possession of the property in question, and the appropriate relief, if merited, is a judgment for possession and damages.

It is the rule that in an ordinary action in ejectment in which no title relief is sought or granted, but rather the relief involved, as here, is the recovery of possession and damages, title to real estate is hut incidentally or collaterally involved, and .is not involved within the meaning of Article V, Section 3, Constitution of Missouri, V.A.M.S., hence appellate jurisdiction in this court. City of St. Charles v. De Sherlia, Mo., 303 S.W.2d 32; Ballenger v. Windes, 338 Mo. 1039, 93 S.W.2d 882.

This being a jury waived case our duty is to review it upon both the law and the evidence as in suits of an equitable nature. S.Ct. Rule 73.01, V.A.M.R.

Section 228.110 provides a statutory method for the vacating of roads by a proceeding before the county court to be commenced upon the filing of a petition or application by any twelve free holders of the township or townships through which the road runs. Section 228.190 provides, among other things, for the legal establishment of public roads and states, “ * * * and nonuser by the public for five years continuously of any public road shall be deemed an abandonment and vacation of the same.”

It is essentially defendant’s position that plaintiff can not in this proceeding successfully assert that the Papinsville Road has been abandoned except by first obtaining an order to that effect from the county court pursuant to Section 228.110. Plaintiff contends he can show in this ejectment action an abandonment of the road by showing five or more years continuously its nonuse by the public, as provided in Section 228.-190, supra.

We agree with plaintiff’s contention and rule that it is not necessary for plaintiff to first obtain a county court order of abandonment pursuant to Section 228.110 in ■order to prove in this action the abandonment of the public road. Abandonment of a public road (not a public or platted street) may be proved in a court proceeding between parties, such as this one in ejectment, as a part of a party’s necessary proof to support his action or his defense, by showing- “nonuser by the public for five years continuously”. Section 228.190.

In Johnson et al. v. Rasmus, 237 Mo. 586, 141 S.W. 590, an action in equity was brought to enjoin defendant from the alleged obstruction of a public road. The court noted that in 1887 a statute (Section 10, 446, Rev.St. 1909, forerunner to the present statute, Section 228.190) was adopted in this state fixing the length of time of nonuser (ten years now five years) sufficient to prove an abandonment of any public road. Said the court, loe. cit. 591: “ * * * the act of 1887 is a direct, clear, positive legislative provision, fixing the period of time within which the public by nonuser will be held to have abandoned a road or highway.” In speaking of proof, the court stated, “Proof of the abandonment of .a public highway may be shown by evidence of matters in pais, as well as by proceedings in court, or other public records.”

In Odom v. Hook, Mo.App., 177 S.W.2d 165, in a suit for injunction to prohibit the obstruction of an alleged public street or roadway the court sustained defendant’s defenses of abandonment of the street by nonuse, permitting in evidence the testimony of residents, although there had been no prior court proceeding closing it or holding it abandoned.

In State of Missouri ex rel. Carter County et al. v. Lewis, Mo.App., 294 S.W.2d 954, the Springfield Court of Appeals had before it an action for mandatory injunction to compel removal by defendants of obstructions to an alleged public road. The defense was that the road had been abandoned. In a well reasoned opinion the court ruled that where a road has become a public highway it remains so; that, loe. cit. 958: “absent vacation in a statutory proceeding under Chapter 228, such right of use thereafter could not have been divested except upon abandonment of the disputed road for ‘nonuser by the public’ for the period specified by statute, to-wit, now ‘five years continuously’ ”. This appears to be a recognization by that court that such nonuse by the public may be proved in the ordinary manner as a defense to an injunction suit and therefore, that it is not necessary to first go through a county court proceeding and obtain a county court order that the public road has been abandoned. Other cases carrying the same implication are, McEneny v. Gerlach, Mo.App., 142 S.W.2d 1095; Rosendahl v. Buecker, Mo.App., 27 S.W.2d 471(4). We have neither been cited to nor found any case holding that as between litigating parties the sole way to establish abandonment of a public road is to have obtained an order of the county court to that effect

Our duty is to ascertain the legislative intent as expressed in Sections 228.110 and 228.190. We are unable to read out of these sections the requirement that the only way to show abandonment of a public highway is by a proceeding in the county court under Section 228.110. Rather, Section 228.190 clearly provides that the fact of nonuse by the public for five years continuously of a public road shall be deemed an abandonment of it, and, impliedly that such fact may be proved in the same manner as any pertinent fact may be proved in litigation between parties where there is an issue of abandonment existing between the litigants.

Turning to the question of reverter upon abandonment, it is the firmly established rule in this state that if a public road or highway is taken wholly from one man’s property and such public road or highway is vacated, the land in fee reverts to the original owner, or his grantees, or successors in title freed from the public use or easement. Owners of other land abutting on the right of way who personally or through their chain of title never had any estate therein obtain nothing by the reverter upon such abandonment. Horn v. Muckerman, Mo., 307 S.W.2d 482(1); Neil v. Independent Realty Co., 317 Mo. 1235, 298 S.W. 363; American Steel & Wire Co. of New Jersey v. City of St. Louis, 354 Mo. 692, 190 S.W.2d 919(2).

Appellant also contends the trial court erred in refusing to receive in evidence a certain ancient plat showing the location of the Papinsville Road. We need not rule this question as it is well briefed and may not again arise in the same manner, if at all.

In their briefs the parties acknowledge the handicap of this court in endeavoring to do more than rule the broad issues presented. The transcript and accompanying exhibits are such as to preclude us from precisely locating or describing that portion of the Old Papinsville right-of-way given by plaintiff’s predecessors in title and now fenced and occupied by defendant. It is our decision that plaintiff is entitled to his prayed ejectment of defendant from that particular land.

It is necessary to reverse and remand this cause to the circuit court so that it can take appropriate action and enter its judgment in accordance with this opinion. If the parties by agreement provide the circuit court with a suitable description of the location of the Papinsville Road right-of-way provided by plaintiff’s predecessors in title and now fenced and occupied by defendant, hearing of further evidence in this cause will be unnecessary ; otherwise, it appears the circuit court will have need of additional evidence on this subject.

As to the issues of damages for wrongful conversion of hedge for fence posts our review of the record has convinced us that plaintiff has failed to carry the burden of proof therein, and, therefore, in accordance with that portion of the trial court’s judgment, is not entitled to any damages for the alleged conversion. Nor do we believe there has been any showing of the actual damage to plaintiff resulting from defendant’s wrongful possession of the disputed strips of land. However, plaintiff is entitled to $1.00 nominal damages for this wrongful possession. As ruled in Atkinson v. Smothers, Mo.App., 291 S.W.2d 645, the prevailing party is entitled to nominal damages without other proof than his right to possession.

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

All concur.

      . Unless otherwise designated statutory citations arc to V.A.M.S., 1959.

      . See, Winschel v. County of St. Louis, Mo., 352 S.W.2d 652.

      . In Winschel v. County of St. Louis, Mo. Sup., 352 S.W.2d 652, 655, the Supreme Court limited the language of the Johnson case and the ruling in Odom v. Hook, Mo.App., 177 S.W.2d 165, 171, by holding that Section 228.190 is not applicable to streets which have been dedicated in accordance with statute and specified on a recorded plat

      . Another provision in Section 228.190 concerning the establishment of a public road by ten years of public use and the expenditure of public money and labor for such period has been similarly construed. See, Wann v. Gruner, Mo., 251 S.W.2d 57; Liberty Township of Stoddard County v. Telford, Mo.Sup., 358 S.W.2d 842; Op.Atty.Gen. No. 27, Emerson, 5-24-54.


author: SPERRY, Commissioner.

text:
    RUPARD ASPHALT CO., Inc., Plaintiff-Appellant, v. James R. O’DELL et al., Defendants-Respondents.
    No. 24006.
    Kansas City Court of Appeals. Missouri.
    Oct. 5, 1964.

      Gene A. DeLeve and Casemore, Berman & DeLeve, Kansas City, for appellant.
    Wilson D. Hill, Richmond, for respondents.
   SPERRY, Commissioner.

This appeal is by plaintiff from a judgment dismissing its petition filed against defendants.

Plaintiff, Rupard Asphalt Company, Inc., was engaged in processing and selling asphalt for paving purposes. Defendant, James R. O’Dell, was engaged in the Asphalt Paving business; and defendants William Graham, Jr., Wayne Irons, Robert Coats, Lawrence Endsley, Glenn Pettus, and Glen Norris were members of the Board of Education of Elkhorn School District No. 7.

In its brief, under the heading of “Argument”, plaintiff states as follows:

“Plaintiff, in its petition, has alleged that respondents were members of the Board of Education of the Elkhorn School District R-7 in Ray County, Missouri; that the School District entered into a contract with James R. O’Dell doing business as the J. R. O’Dell Asphalt Paving Company for certain asphalt paving work at the R-7 School; that respondents caused or permitted the School District to make the contract with O’Dell without requiring him to furnish a bond conditioned in accordance with Sec. 107.170, R.S.Mo.1959; that plaintiff furnished and delivered 377 tons of hot mix asphalt and labor equipment to O’Dell for the work O’Dell was performing under his contract with the School District at the R-7 School; that the agreed price and reasonable value thereof was $3,694.76; that said sum was due July 13, 1962; and that no part of this sum has been paid although plaintiff has made numerous demands for payment on O’Dell and the respondents.”

This petition was filed on October 6, 1962. On October 18, 1962, the defendant members of the Board of Education filed their motion to dismiss the cause as to them. On May 15, 1963, the Court sustained this motion to dismiss, on the stated grounds that, as to defendant members of the Board of Education, no cause of action was stated.

On October 17, 1963, plaintiff filed motion to set aside the above order of dismissal. On October 21, 1963, the above motion to set aside the order of dismissal was argued by the parties, by their attorneys. The order of dismissal was ordered set aside for the reason that plaintiff had not been notified of its entry at the time it was made. The record shows that plaintiff, on that day, “voluntarily dismisses petition as to James R. O’Dell”.

The record shows the following, under that date:

“And now come defendants, with exception of defendant, James R. O’Dell, and file anew their Motion to Dismiss plaintiff’s petition. The motion is taken up by the Court, arguments by defendants’ and plaintiff’s counsel heard, and it is ordered by the Court that defendants’ school directors’ motion to dismiss plaintiff’s petition be, and the same is hereby sustained. Petion dismissed.”

On October 24, 1963, plaintiff filed notice of appeal, from that order of dismissal and judgment entered thereon.

This action is based on the provisions of Sec. 107.170 V.Á.M.S. The purpose of the statute is to afford a remedy to those persons who have a right to file a mechanic’s lien, except the material furnished or work done was for one contracting with a School District or other public corporation. Burton Machinery Co. v. Ruth, 194 Mo.App. 194, 186 S.W. 737. The Court also there held that the statute makes it the absolute duty of members of the Board of Education, in cases similar to this, to require a contractor to furnish such a bond as is mentioned in this statute; and that, on failure to perform that duty, such offending members of the board shall be personally liable to respond in damages to persons who may have thereby suffered loss.

Defendants contend that no cause of action was stated in the petition because the petition contained no allegation of facts to the effect that recourse by plaintiff against O’Dell, the contractor, was unavailing. It was not alleged that a judgment had been obtained against O’Dell, or that he was insolvent, bankrupt, or judgment proof. In Austin v. Ransdell, 207 Mo.App. 74, 230 S.W. 334, 335, in a similar situation we said :

“[5] We think that, before these defendants can be held upon the cause of action herein sought to be enforced, the plaintiff should show the material his assignor sold to the contractors, and that the same entered into the construction of the building. Again, plaintiff should, before requiring defendants to respond in damages, show affirmatively that recourse against the contractors is unavailing, and this was not done, at least so far as concerns George C. Wright, the son. So far as the record discloses, an execution on the judgment against him would obtain the money. If so, it is hard to see how plaintiff can demand of the individual members of the board that they pay the bill.”

Plaintiff cites no authority wherein a contradictory ruling waá made. Regarding the rule declared in the Austin case, supra, plaintiff says that the judgment therein was reversed and the cause was remanded for a new trial “on other grounds, i. e., because there was no evidence as to the amount of material sold the contractor or that the materials went into the building. The language is Austin v. Ransdell is, therefore, obiter dictum.”

We do not hold the language under consideration to be obiter dictum. The Court clearly stated two reasons as its grounds for reversing and remanding the case, and indicated that both stated grounds were good and valid. We hereby approve the decision in that case, on both grounds.

Plaintiff says that, in dismissing the petition without specifying that dismissal was without prejudice, such dismissal constitutes a dismissal with prejudice, under the provisions of Civil Rule 67.03, V.A.M.R. That is a correct assertion of the law. White v. Sievers, 359 Mo. 145, 221 S.W.2d (Mo.) 118, 122, 123.

However plaintiff says that it specifically requested leave to amend if the Court should find that an allegation of O’Dell’s insolvency was essential in order to state a cause of action. Plaintiff did make such a request in its “suggestions in opposition” to defendant’s first motion to dismiss. That motion to dismiss was sustained. However, plaintiff filed motion to set aside the order of dismissal on the ground that it was not notified of the hearing at the time it was acted upon. The Court considered plaintiff’s motion in that respect, sustained it, and set aside its order of dismissal.

After that was done, plaintiff voluntarily dismissed'as to O’Dell, the contractor; and the members of the Board of Education, the remaining defendants herein, filed- their motion to dismiss, which motion was sustained. Plaintiff did not, at any time, either prior to or after that action by the Court, ask leave to amend; nor did the Court make any entry indicating that such leave was granted, or otherwise.

It can not be said that failure on the part of plaintiff to amend its petition so as to state a cause of action under the ruling in the Austin case may be excused on the ground of its having made such a suggestion in its “suggestions”, filed when thé first motion to dismiss was filed by defendant members of the Board of Education. At that time. O’Dell was. also a defendant. Plaintiff was present in Court when that order of dismissal was set aside. Plaintiff, at the’ time voluntarily dismissed its cause of action as against O’Dell; and it was present when, immediately thereafter, these defendants filed their motion to dismiss the cause of action then standing against them alone. Plaintiff knew that the Court had dismissed the petition for failure to state a cause of action against members of the Board of Education and it knew that its petition, in that respect, was not strengthened after dismissal of O’Dell. By that dismissal plaintiff, apparently, abandoned any effort to plead or prove O’Dell’s unavailability for the collection -of its claim. It could have requested leave to amend, if it believed it could so amend with any hope of being able to establish the new facts necessary to be alleged. In any case, it made no such request and the Court committed no error in failing to grant such leave. We cannot convict the trial Court of error which is non-existent.

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.