text:
    FRANK B. COLEMAN, Trustee of Estate of GEORGE D. ALLEN PAPER COMPANY, Appellant, v. NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY.
    Division One,
    March 4, 1918.
    1. INSURANCE POLICY: Change, in Beneficiary. If the insured expressly reserves no right to change the beneficiary in a life insurance policy, the beneficiary named is vested with an interest of which he cannot be deprived- without his consent.

      2. -:-: Act of Corporation: By Verbal Consent of Directors. A document attested by the corporate seal and ostensibly signed by the president and attested by the secretary, which purports to be the act of the corporation and to authorize a change in the beneficiary of an insurance policy issued upon the life of the president, naming the company as beneficiary, is not conclusive, but only raises a presumption that the officers acted within their authority, and puts upon the objector the burden of showing the contrary. But the consent of the directors separately obtained and not given in a board meeting is not equivalent to formal action of the board; and where there is no evidence that the board, as such, took any action regarding the policy, but testimony that it did not, the presumption arising from such document will not warrant an instruction to find that the change in the beneficiary was made with the consent of the corporation.
    3. -: -: Rights of Creditors. Where the insured has died, and the life policy has thereby matured and the fund is due the beneficiary, and the only question is whether the attempt of the corporation, named as beneficiary, to change the beneficiary to the insured's wife, was valid, questions of the right of an insured to transfer a policy made payable to his estate or assigns are not involved, and cases holding that creditors are not defrauded when an insolvent debtor transfers, a policy on his .life, payable to himself or his estate, if the policy has, at the time of the transfer, no cash value, are likewise inapplicable. [Distinguishing Judson v. Walker, 155 Mo. 166, and Burlingham v. Crouse, 228 U. S. 459.]
    4. -: -: Exclusive Control of Corporation: Jury Question: Inference. Evidence tending to prove that the president of a cox-poration controlled and managed its affairs, if oral, is not conclusive, but its credibility is still a matter for the jury; and, besides, even if the jury might find that he controlled and mana'ged ■ the general business of the corporation without let or hindrance, a finding of that fact might not warrant the inference of authority to change the beneficiary in an insurance policy on his own life which named the company as beneficiary, to his wife, and even if the facts warrant the inference it is for the jury to make it, and not the court by sustaining a demurrer.
    5. -: -: Estoppel: Pleading. The answer of an insurance company which admits the issuance of the original policy upon the life of the president of a corporation, in which the corporation was named as beneficiary, and which expressly provided that the president reserved no right to change the beneficiary, and which avers that the corporation “duly released all interest” in the policy and, together with the president, “duly requested defendant to substitute’’ the president’s wife as beneficiary in the place and stead of said corporation, and that defendant, pursuant to said request, in August issued a policy insuring the president’s life in favor of his wife, that he died on December 4th, and that on December 24th defendant paid to bis said wife the amount of the policy, pleads the legal defense that the corporation legally authorized the change of the beneficiary, and does not plead estoppel, or laches relied upon as estoppel; and in this case, neither estoppel nor laches is available unless pleaded.
    6. -: -: -: Demurrer. If neither estoppel nor laches is available unless pleaded, and neither is pleaded, and the plea is not waived, and the facts tending to prove estoppel and laches are not all admitted, but depend in essential particulars upon the testimony of witnesses whose credibility is for the jury, the giving of a peremptory instruction to find for defendant is error.
    7. -: -: Ratification: Demurrer. Evidence of ratification is not enough to authorize a demurrer. In the absence of a showing conclusively establishing the facts making out ratification, that question of fact, like any other, is for the jury.
    Appeal from St. Louis City Circuit Court. — Hon. Daniel D. Fisher, Judge.
    Reversed and remanded.

      Grant & Grant and Leahy, Saunders & Barth for appellant.
    (1) The beneficiary in a life insurance policy has a vested interest when the insured does not reserve the right to change the beneficiary, and this is particularly true when the policy provides: “It is agreed that the insured has no interest in this policy, the beneficiary being the sole owner thereof.” Both these facts were true in the instant case, and the policy was payable to the George D. Allen Paper Company, and all premiums were paid by it. Therefore, it could not be assigned without the consent of the company, or, even with its consent, in fraud of its creditors, and the attempted substitution of a new policy just prior to the insured’s death, making his wife the beneficiary was null and void and in fraud of the creditors of the company, (a) Where the beneficiary has a vested interest in a life insurance policy, it cannot be assigned or changed 'without his consent. Casualty Co. v. Kacer, 169 Mo. 313; Bank v. Hume, 128 U. S. 1. e. 209; 3 Am. & Eng. Ency. Law (2 Ed.), 923. (b) An insuranee policy cannot be assigned in fraud of the insured’s creditors or, in fraud of the creditors of the beneficiary, where such beneficiary has a vested right. Pullis v. Robison, 73 Mo. 210; Bank v. Ins. Co., 24 Fed. 769; Bank v. Life Ins. Co., 24 Fed. 770; Burton v. Farinholt, 86 N. C. 260; Catchings v. Marilove, 39 Miss. 655; Friedman v. Fennell, 94 Ala. 570; McKown’s Estate, 198 Pa. St. 96; Bank v. McLean, 84 Mich. 628; Bank v. Moore, 83 App. Div. (N. Y.) 419; Stokoe v. Cowan, 21 Beav. 640; Schondler v. Wace, 1 Campbell 487. (c) Business insurance taken out on the life of an officer of the corporation for the benefit of the corporation is an asset of the corporation. “It is not a mere contract of indemnity, but a contract to pay to the beneficiary a certain sum of. money in the event of death.” Insurance Co. v. Board, Armstrong & Co., L. R. A. 1915 F, p. 979; Keckley v. Glass Co., 86 Ohio St. 2113. (d) Gifts by a husband of his own property, while insolvent, to a wife are by operation of law void as to creditors and constructively fraudulent." Storage Co. v. Kuhlmann, 238 Mo. 698;-Jordan v. Buschmeyer, 97 Mo. 94; Cole v. Cole, 231 Mo. In the instant case, the husband did not give his own property, but gave the most valuable asset of the corporation to his wife without consideration, and in fraud of the company’s creditors, (e) Even assuming, which we deny, that both the Insurance Company and the creditors are equally innocent in this matter, still the Insurance Company,. knowing the terms of its own policy, and knowing that it was a corporate asset of large' value, could, by investigation, have protected both itself and' the creditors of the company, and it was under no' obligation to substitute another policy in favor of the wife of the president of the company, and thereby deprive the company of a valuable asset. Having done so, it must bear the consequences, and the equities of the creditors in this situation are far stronger than the claim of the company for protection from its own mistake. Rice v. Graffman, 56 Mo. 436; Bank v. Bank, 71 Mo. 185; State v. Bank, 115 N. "W. 937; Bank v. 0!Connel, 23 Mo. App. 165; Wade v. Bank, 73 App. 501; Cupples v. Whelan, 61 Mo. 587. (f) Even if the Insurance Company could not have ascertained by a mere examination of the company’s books that the company was insolvent at the time of the 'attemped transfer of the policy, still such transfer under the statute was null and void as to creditors, because in fraud of their rights. No matter how innocent a person may be, still he cannot be a party to a transfer, without consideration, of the assets of an insolvent person in fraud of the rights of creditors. If ignorance or innocence were a defense, it is safe to say that the statute prohibiting fraudulent conveyances, would be meaningless. Sec. 2881, R. S. ’ 1909; Hurley v. Taylor, 78 Mo. 239; Childers v. Pickenpaugh, 219 Mo. 448; Bank v. Nichols, 202 Mo. 323. (2) The board of directors never authorized Allen to execute the release to Rhoda Allen and the surrender of the policy to the defendant company. While the president of a business corporation is its chief executive officer, yet his powers are those -connected with acts of an ordinary nature' which, by usage or necessity, are incident to his office. He may bind the corporation only by contracts in matters arising in the usual course of business. Sparks v. Transfer Co., 104 Mo. 531. Even if it had been shown that the three directors had severally assented to Allen signing the surrender, it would not have been a valid act of the board of directors. Brinkerhoff v. Boyd, 192 Mo. 613; Hill v. Mining Co., 119 Mo. 9. (3) Where an , agent of a corporation exercises his authority in favor of himself, or as in this casé, in favor of his wife, his act is presumptively void and the burden is on the recipient to overcome the presumption. The primary question in such case is not whether the officer had. power' to do an act of that character, but did the agent have authority to execute in the name of the corporation the instrument in question. The burden is on the other'person to show authority. Bank -v. Edwards, 243 Mo. 553; Baird v. Grannis, 208 Mo. 434; Sáfety Vault Co. v. Boynton, 19 C. C. A. 118, Rankim-.v. Inv. Co., 238 Mo. 406; Botts v. Wallace, 146 U. S. 689; Bank v. Inv. Co., .163 Mo. App. 369. (4) Transfers by a husband in favor of a wife, even of his own property, if he is insolvent, are by operation of law void as to creditors and constructively fraudulent. Ice Co. v. Kuhlmann, 238 Mo. 698; Jordan v. Buschmeyer, 97 Mo. 94; Cole v. Cole, 231 Mo. 1; Johrndt v. Reuter H. & S. Co., 112 Mo. App. 341; Pressed Brick Co. v. Schnoenieh, 65 Mo. App. 283.

      Nagel & Kirby for respondent.
    (1) The surrender of the original policy by the Paper Company was its corporate act, because: (a) It was duly executed by the president of the company with the corporate seal affixed, attested by the secretary. A corporation which delivers a contract purporting on its face to be lawfully executed, in reliance upon which the parties change their situation without notice of defects in preliminary proceedings, is estopped as against them from denying its validity. Zabriskie v. Railroad, 23 How. 381; Terminal R. & W. Co. v. Trust Co., 82 Fed. 124; Platt v. Hitchcock .County, 139 Fed. 929; Aurora v. Gates, 208 Fed. 101. (b) The Paper Company was a “one-man” corporation, and Allen, having been held out to the world as being the corporation, his act in executing the surrender was the act of the corporation. Cutter Co. v. Meyer, 64 Mo. App. 527; Mfg. Co. v. Clarke, 96 Wis. 469; Tyler Estate v. Hoffman, 146 Mo. App. 510; Moore v. Gaus Company, 113 Mo. 98; Rosenbaum v. Gilliam, 101 Mo. App. 126; Sparks v. Transfer Co., 104 Mo. 531; Jones v. Williams, 139 Mo. 1; Madden v. Paroneri Co., 75 Mo. App. 358; Commercial Hotel v. Brill, 123 Wis. 638. (c) The surrender of the policy was consented to by all the stockholders, and was ratified by the board of directors of the Paper Company by its failure to disaffirm the same at meetings held after Rhoda Allen had become a member of the board, and when every member of the board had actual knowledge of the transaction. Bank v. Shoemaker, 68 Mo. App. 592; Kelsey v. Bank, 69 Pa. St. 426; Thompson on Corporations, sec. 2015; 3 Morawetz, sec. 228; Gordon v. Preston, 1 Watts, 385; Chontean v. Allen, 70 Mo. 325; Bank v. Fricke, 75 Mo. 178. (2) Whether solvent or insolvent, the Paper Company had the power to consent to the surrender, and the title to the policy passed, such surrender being voidable only to the extent that creditors may have had a right to impeach it. (3) The original policy, having no surrender value and being worthless, was not an asset of the corporation of which creditors were defrauded, even if it be assumed that the Paper Company was insolvent at the time of the surrender. Barbour v. Ins. Co., 23 Atl. (Con.) 151; Steeley v. Steeley, 64 S. W. (Ky.) 642;-Ins. Co. v. Ins. Co., 203 Pa. St. 82; Mittelburg v. Harrison, 11. Mo. App. 136, 90 Mo. 444; Judson v. Walker, 155 Mo. 166; Sternberg v. Levy, 159 Mo. 617; 20 Cyc. 350, 416. (4) Under the Bankruptcy Act a trustee has no right whatsoever to a policy which has no cash surrender value, and where the policy has a cash surrender value at the time of the filing of the petition in bankruptcy, the trustee can claim no more than such cash surrender value, although the entire .proceeds became, available before adjudication. Burlingham v. Crouse, 228 U. S. 459; In re Buelow, 98 Fed. 86; Morris v. Dodd, 50 L. R. A. 33.
   BLAIR, J.

Coleman is tnistee in bankruptcy of the estate of the George D. Allen Paper Company.

This is an appeal from an order overruling a motion to set aside a nonsuit taken when the trial court instructed for defendant in an action on a policy of insurance on the life of George D. Allen, president of the George D. Allen Paper Company, which company was the beneficiary in the policy as first issued. The question is whether the evidence required a submission of the case to the jury.

I. ' The policy expressly provided that Allen reserved no right to- change the beneficiary. Under the general rule that fact vested in the beneficiary an interest of which it could not be deprived without its consent.

There is no direct evidence that the board of directors of the Paper Company had formally authorized any change in the policy or that they had so conferred an agency upon the corporate officers to do so. There is in evidence a document attested by the corporate seal and ostensibly signed by Allen, as president, and Cavanagh, as secretary, of the Paper Company, which purports to be the act of the corporation and to authorize the change made. This writing is not conclusive. An instrument shown to be signed by the officers of a corporation and having the corporate seal affixed ordinarily raises a presumption that the officers acted within their authority and puts upon the objector the burden of showing the contrary. [St. Louis Public Schools v. Risley, 28 Mo. L. c. 419; Musser v. Johnson, 42 Mo. l. c. 79; City of Kansas v. Railroad, 77 Mo. 185; Koehler v. Iron Co., 67 U. S. l. c. 717; Pac. St. Bk. v. Coats, 205 Fed. 621; Chandler v. Hart, 161 Cal. l. c. 421, 423; 2 Thompson on Corporations, sec. 1928.] There were three stockholders. They were also the three directors, Allen, Cavanagh and Dana. Dana testified he agreed to the change some time in August after Allen told him it was to be made. The consent of the directors separately obtained and not given in a board meeting is not equivalent to formal action of the board. [Brinkerhoff Zinc Co. v. Boyd, 192 Mo. l. c. 613; Hill v. Rich Hill Coal Mining Co., 119 Mo. 9; 7 R. C. L. p. 439, Sec. 427; Sec. 3347, R. S. 1909.] There was no testimony that the board, as such, ever took any action regarding the policy, but testimony it had never done so. In these circumstances it cannot be held the presumption from the instrument warranted the instruction to find for respondent.

II. Counsel state in their briefs that the trial court gave the peremptory instruction on the authority of Judson v. Walker, 155 Mo. 166. The principal clues^on discussed concerns the applicability of the principle of that decision to the facts in this case.

, In that ease the facts were that Walker took out two policies on his life in 1888 and a third in 1891. All were payable to himself, his estate or assigns. The third policy Walker surrendered in January, 1894, and took in lieu a policy payable to his wife, if living; otherwise, to him or his estate. Four days later, the company consenting, he assigned the other policies to his wife and her children. All policies were kept alive, and in August, 1895, Walker died insolvent. His wife and five children survived him. Judson’s claim antedated the transfers of the policies and his judgment against Walker was recovered in January, 1895. He sued the wife and children to subject the policy proceeds to the payment of his judgment. He alleged the transfer was fraudulent as to him. The court held he could recover the cash surrender value of the policy at the date of transfer, plus the premiums thereafter paid, less the $500 premium exemption to which the statute entitled Walker; and that creditors can reach only the excess over $500 per annum paid by a debtor on policies and cannot reach the part of the proceeds of the policies produced by such excess. It was expressly held Walker had the absolute right to dispose of the original policies as he saw fit, subject to the qualification stated; that he could make any change he chose which did not defraud his creditors of rights under the rule laid down.

In that case, prior to the changes made in 1894 there was no third person named as beneficiary. Walker retained control as stated. In the instant case the policy insured the life of Allen, but named the Paper Company as the beneficiary and expressly stated Allen did not reserve the right to change the beneficiary. The company took a vested interest in the policy which neither Allen nor the Insurance Company could destroy. This is so well settled that it need not be discussed. In that case creditors of the insured sued. In this case the trustee of the beneficiary sues. The policy in this case matured on Allen’s death, in December, 1910. The fund- became due to the owner of the policy. The question is, who was the beneficiary when Allen died? The question is not whether the company could have transferred the policy, hut, under the pleadings, whether it had consented to a change of beneficiary. The Walker case is inapplicable.

■ Further, eases holding that -creditors are not defrauded when an insolvent debtor transfers a policy on his life, payable to himself or his estate, if the policy has, at the time of transfer, no cash value, are likewise inapplicable. There is no question here between Allen and his creditors, nor between the Paper Company and its creditors. Nor is the decision in Burlingham v. Crouse, 228 U. S. 459, in point. In that case, Section 70a of the Bankruptcy Act was construed and applied. The value of the policy when the petition in bankruptcy was filed was important. The policy was then still in force and the insured yet alive. In this case when the bankruptcy proceedings were begun Allen had died, ánd the policy had thereby matured and the fund was due the beneficiary. The question to which the case again returns is whether Mrs. Allen or the Paper Company was the beneficiary in the policy on .December 4, 1910. There is no question of exemption in this case; no question of the value of an unmatured policy upon the life of an insolvent debtor, nor of the right < of a creditor of such an one to take over a policy on his life and continue it by paying subsequent premiums thereon. The trustee’s rights being those of the Paper Company, the question in this case is simply whether that company had in any way deprived itself of the right to recover on the policy.

III. Respondent contends the evidence shows Allen at all times controlled and managed the affairs of the corporation and that this enabled him to bind it in changing the beneficiary in the policy. First, the ev^ence tending to prove Allen’s exercise personal control was oral. It was not conclusive. Its credibility was for the trier of the facts. Second, though the trier of the facts might find Allen controlled and managed the general business of the company without let or hindrance, yet the facts found might not warrant the inference of authority to change the beneficiary in an insurance policy. [Sparks v. Dispatch Trans. Co., 104 Mo. l. c. 540.] Even if the facts found warranted such an inference, it was for the trier of the facts to imply therefrom the authority to act in the particular case. [Sparks v. Dispatch Trans. Co., 104 Mo. l. c. 539, 540; Sec. 2993, R. S. 1909.] The evidence of Allen’s control did not, therefore, justify the court in sustaining the demurrer.

IY. Did the corporation ratify the change or did it estop itself to set up want of authority in Allen and Cavanagh?

Allen, Cavanagh and Dana were the only stockholders and only directors of the company in August, 1910, when the change was made. The evi(jence tends to show that the two former, president and secretary, respectively, of the company, executed in its apparent behalf and sealed with the. corporate seal a document whose sufficiency, on its face, to justify respondent in making the change of beneficiary is not questioned. While no action of the board of directors, as a board, supports this document, yet the evidence tends to show each of the three directors, they being all the stockholders, had knowledge of the proposed action and all consented to it; Allen and Cavanagh by signing the instrument officially, and Dana orally," according to his testimony. Upon the faith of this document, according to the evidence, respondent changed the beneficiary, substituting Allen’s wife for the company. . These men remained the only directors and stockholders until the middle of September or the first of October, 1910. At that time Dana was succeeded by Mrs. Allen. For the quarterly premium due in September, 1910, Allen gave his personal note, and the Insurance Company’s agent advanced the cash to his company. December 3, 1910, this note, without respondent’s knowledge, was paid through a bank with the Paper Company’s money. December 4, 1910, Allen died. Cavanagli, in connection wit]! the proofs of loss, made affidavit that none other than Mrs. Allen had any interest in the policy. December 23, 1910, the company paid Mrs. Allen the face of the policy and a post mortem dividend, aggregating $50,241.50. At no time, according to the evidence for respondent, did any stockholder, director or other person suggest to the Insurance Company that there was any want of authority for the execution of the instrument in question. There was evidence pro and con on the question whether the company was insolvent in August, 1910, but there is no evidence respondent had any knowledge of such insolvency, if it existed. Such is the tendency of the evidence upon the question of ratification and estoppel.

(a) In this case if the Paper Company is estopped, then is the trustee estopped? [Pott & Co. v. Schmucker, 84 Md. l. c. 556.]

The answer admits the issuance of the original policy and the change of name of the Paper Company. It avers that the Paper Company. ‘ ‘ duly released all its interest in the” policy and, together with Allen, “duly requested defendant to substitute one Rhoda Allen, wife of said George D. Allen, as beneficiary in the place and stead of said Paper Company;” that Allen and the Paper Company “duly surrendered” the policy, and that defendant, pursuant to said request, on August 29, 1910, issued a policy, under the same number and for the same amount, insuring Allen’s life in favor of Rhoda Allen instead of in favor of the Paper Company; that Allen died December 4, 1910, and that defendant on December 24, 1910, paid Rhoda Allen the amount of the policy, $50,241.50.

This is a plea that the Paper Company legally authorized the change of beneficiary. Neither estoppel nor laches, relied upon as estoppel, is pleaded. In this case neither could be relied upon without being pleaded. [Turner v. Edmonston, 210 Mo. l. c. 428; Blodgett v. Perry, 97 Mo. l. c. 272, 273; State ex rel. v. Ry. Co., 140 Mo. l. c. 555; Cockrill v. Hutchinson, 135 Mo. l. c. 75.] Nor was there a waiver of the plea. [McDonnell v. DeSoto Sav. & Bldg. Assn., 175 Mo. l. c. 275.] For this reason and because the facts tending to prove estoppel and laches are not all admitted hut depend in esential particulars upon the testimony of witnesses whose credibility was for the jury, the giving of the peremptory instruction cannot be sustained on this phase of the case.

(b) While. ratification' is equivalent to antecedent authority and may bé shown under a general allegation that the- act is that of the principal (McLachlin v. Barker, 64 Mo. App. l. c. 526), yet there is not a sufficient basis of conclusively established facts to inquire, as a matter of law, that the court find a ratification. [Calumet Paper Co. v. Haskell Show Ptg. Co., 144 Mo. l. c. 338; Tyrell v. Railroad, 7 Mo. App. l. c. 299; Campbell v. Pope, 96 Mo. l. c. 473; First National Bank v. Fricke, 75 Mo. l. c. 184.] That there is evidence of ratification .is not enough. In the absence of a showing conclusively establishing the facts making out ratification, that question of fact, like any other, is for the jury.

Y. It is quite clear from the preceding paragraphs that there is no ground upon which, we can direct a judgment for appellant. The judgment is reversed and the cause remanded for further proceedings not out of harmony with this opinion.

All concur, except Bond, P. J., absent.


source: Caselaw Access Project

author: FARIS, J.

license: Public Domain

text:
    THE STATE ex rel. MISSOURI PACIFIC RAILWAY COMPANY and BENJAMIN F. BUSH, Receiver, v. PUBLIC SERVICE COMMISSION, Appellant.
    In Banc,
    March 5, 1918.
    1. INTERSTATE TRAIN: Inadequate Service: Power of Commission. The Public Service Commission is vested with plenary power to compel an interstate train to stop at a certain town on the company’s line, if the company is not already furnishing reasonable, proper iand adequate interstate service to the town and locality.

      2. -: -: California. A modification by the circuit court of the order of the Public Service Commission requiring a certain interstate passenger train to stop “at California on flag either to take on or to let off passengers to or from any point on the railroad whereat said train stops as by its schedule provided” by relieving the company of the necessity to stop “except to put off passengers from St. Louis,” is, after a review of the many facts in evidence, approved.
    3. -: -: Stopping a't Smaller Towns. The fact that the interstate train which the mayor asks the Public Service Commission to compel the company to stop at California stops on flag at the small towns of Berger and Morrison is of no importance in determining whether California already has adequate interstate service.
    Appeal from Cole Circuit Court. — Hon. A. W. Walker, Judge.
    Affirmed.

      Alex. Z. Patterson and James D. Lindsay for appellant.
    (1) It is the duty of a common carrier to give adequate local service, that is, a service equal to reasonable requirements, regard being had to the size of the place, the demand for transportation, the cost of the proposed service, and all the other facts having a bearing upon the relative convenience and necessity and the relative cost of the service. 33 Cyc. 639; State ex rel. v. Atkinson, 192 S. W. 86; Sec. 47, subdiv. 2, and Section 51, Public Service Commission Act, Laws 1913; Railroad v. Wharton, 207 U. S. 335; Railroad v. Railroad Comm., 237 U. S. 220; Railroad Comm. v. Railroad, 70 So. 645. (2) An order requiring the stopping of a train, although an interstate train in character, is not to be regarded as a direct or unauthorized regulation-of interstate commerce, if the order when tested by a fair consideration of the adequacy of local facilities appears not unreasonable. Railroad Comm. v. Railroad, 203 IT. S. 335;.Railroad v. Ohio, 173 U. S. 285; Herndon v. Railroad, 218 IT. S. 135; Railroad v. North Carolina Comm., 206 U. S. 1.

      James F. Green and H. H. Larimore for respondents.
    (1) A railroad company must provide such train service as will meet the necessity of the general public, but the extent of its duty in this regard varies as to the exigencies of the traffic, and the manner in which it shall conduct its business, including the number and frequency of trains, rests largely in the discretion of the company. 31 Cyc. 639; People v. Railroad, 64 N. E. 788; Railroad v. People, 11 N. E. 247. (2) It is a reasonable regulation on the part of a railroad company that certain trains shall not stop at all stations, provided there are enough to serve the purpose of local travel. 33 Cyc. 640; Hutchinson v. Railroad, 52 S. E. 263. (3) When adequate facilities for local passenger traffic are otherwise provided, a state law requiring railroads to add to such service through or limited trains engaged in interstate commerce may be void, and is void when it operates as a burden on such commerce. Norfolk v. Railroad, 176 Pac. 172; Reynolds v. Railroad, 110 Pac. 668; Railroad v. Public Service Comm., 216 Fed. 252; Ohage v. Railroad, 200 Fed. 128; Railroad v. Railroad Comm., 237 U. S. 220.
   FARIS, J.

This is an appeal by the Public Service Commission from a judgment rendered in the circuit court of Cole County, whereby an order made by the Public Service Commission was modified.

Upon a hearing by the Public Service Commission of a complaint filed by A. B. Cole, as mayor of the city of California, against the Missouri Pacific Railway Company, and Benjamin F. Bush, the receiver’ thereof, wherein a better and more adequate interstate-train service was prayed for, the Public Service Commission (hereinafter referred to as the Commission) made therein, so far as is pertinent to the points involved, the below order, to-wit:

“Now after due deliberation it is ordered: That the defendants, the Missouri Pacific Railway Company, and B. F. Bush, Receiver of the Missouri Pacific Railway Company, be required from and after the effective date of this order and until the further order of this Commission to regularly stop their eastbound Passenger Train No. 2 at California, Missouri, and to stop their westbound Passenger Train No. 5 at California, Missouri, on flag; that is, to take on passengers for points beyond California, Missouri, where stops are made by said.trains, or to let off passengers boarding said trains at other points at which such trains stop.”

Upon the hearing before the Commission, the defendants therein, who are the relators here (and are hereinafter for brevity so styled), in effect conceded in their testimony the justness of the order of the Commission, as to the stop thereby required to be made at California by relators’ eastbound Passenger Train No. 2, and in the exceptions which relators filed to the finding and order of the Commission no complaint is made of such part of said order as refers to Train No. 2.

Upon the entering by the Commission of the order above recited, and following the conventional procedure in that behalf, defendants sued out a writ of certiorari in the circuit court of Cole County; wherein, the regular judge of said court having disqualified himself, Judge A. W. Walker, of the Ninth Circuit, was called in and sat upon the trial as special judge, and on a hearing therein de novo rendered the below judgment, to-wit:

“Now at this day this cause comes on for final determination and the court finds that the order of the Public Service Commission is lawful and reasonable in all respects except that portion requiring Train No. 5 to stop on flag to take on passengers for points beyond California, Missouri, where stops are made by said trains at other points at which such trains stop as set forth in the latter part of paragraph 1, and that said portion of said order is unreasonable in requiring said train to stop except on flag or request for passengers from St. Louis to California, Missouri, as set forth in plaintiff’s motion to modify.
“It is therefore ordered and adjudged that this cause be reversed and remanded to the Public Service Commission for further consideration.”

From this judgment the Commission, after the usual motions and procedure, has appealed. The evidentiary facts, since they are in our view decisive of all of the questions involved herein, will be found in the discussion of the law, which we think ought to apply to the case.

This case turns wholly upon the facts. For the law, so far at least as concerns its general terms, is well-settled. The rule in such cases has been repeatedly stated; never more- clearly qnd carefully per^aps, certainly never more authoritatively, than by the Supreme Court of the United States in the case of Mississippi Railroad Comm. v. Illinois Central Railroad, 203 U. S. l. c. 344, where it was said:

“Upon the principles decided in these cases, a state railroad commission has the right, under a-state statute, so far as railroads are concerned, to compel a company to stop its trains under the circumstances already referred to, and it may order the stoppage of such trains if the company does not otherwise furnish proper and adequate accommodation to a particular locality, and in such cases the order may embrace a through interstate train actually running and compel it to stop at a locality named. In such case, in the absence of Congressional legislation covering the subject, there is no illegal or improper interference with the interstate commerce right; but if the company has furnished all such proper and reasonable accommodation to the locality as fairly may be demanded, taking.into consideration the fact, if it be one, that the locality is a county seat, and the amount and character of the business done, then any interference with the company (either directly by statute, or by a railroad commission acting under authority of a statute) by causing its interstate trains to stop at a particular locality in the State, is an improper and illegal interference with the rights of the railroad company, and a violation of the commerce clause of the Constitution. ’ ’

The identical general rule is stated in the later case of Herndon v. Railroad, 218 U. S. l. c. 156, as also in divers other cases decided by the Supreme Court of the United States, which is empowered to speak upon this subject the decisive and authoritative and last word. [Illinois Central Railroad Co. v. Illinois, 163 U. S. 142; Gladson v. Minnesota, 166 U. S. 427; Lake Shore & Mich. So. Ry. Co. v. Ohio, 173 U. S. 285; Cleveland, C., C. & St. L. Ry. Co. v. Illinois, 177 U. S. 514; Atlantic Coast Line v. Wharton, 207 U. S. 328; Chicago, Burlington & Quincy Ry. Co. v. Railroad Comm. of Wisconsin, 237 U. S. 220; Atlantic Coast Line v. North Carolina Corp. Comm., 206 U. S. 1; Oregon R. R. & Nav. Co. v. Fairchild, 224 U. S. 510; Railroad v. Public Service Comm., 216 Fed. 252; Ohage v. Northern Pacific Ry. Co., 200 Fed. 128.]

In the case of Chicago, Burlington & Quincy Railroad Co. v. Railroad Comm. of Wisconsin, supra, at page 226, is was said:

“In reviewing the decision we may start with certain principles as established: (1) It is competent for a State to require adequate local facilities, even to the stoppage of interstate trains or the re-arrangement of their schedules. (2) Such facilities existing — that is, the local conditions being adequately met — -the obligation of the railroad is performed, and the stoppage of interstate trains becomes an improper and illegal interference with interstate commerce. (3) And this, whether the interference be directly by the Legislature or by its command through the orders of an administrative body. (4). The fact of local facilities this court may determine, such, fact being necessarily involved in the determination of the Federal question whether an order concerning an interstate train does or does not directly regulate interstate commerce, by imposing an arbitrary requirement.”

Applying the above rules to the conceded facts of this case we conclude that the modification ordered to be made by tbe court nisi in tbe order of tbe Commission was a proper one and that the judgment below ought to he affirmed. This modification, as by reference to the statement of facts will more clearly appear, consisted in relieving the railroad from the necessity of having to stop its westbound train (No. 5), except to put off passengers from St. Louis to California. The order as made by the Commission required the stopping of this train at California on flag either to take on or to let off passengers to or from any point on the railroad whereat said train stopped as by its schedule provided. So that the train service furnished by relators to California as required by the order of the Commission, as that order was modified by the judgment appealed from, is graphically shown by the below schedule and time-table:

W estbound.

Train Leave No. St. Louis Leave Jefferson City Arrive California -

1 9:00 a. m. 12:10 p. m. 1:06 p. m. (Stops)

3 10:10 p. m. 1:50 a. m. 2:33 a. m. (Stops)

5 7:10 p. m. 10:35 p. m. 11:10 p. m. (Passes)

7 2:20 a. m. 5:20 a. m. 5:35 a. m. (Passes)

21 7:00 a. m. 4:00 p. m. 4:43 p. m. (Stops)

37 5:30 a. m. 6:17 a. m. (Stops)

95 11:15 a. m. 1:06 p. m. (Stops)

Eastbound.

No. Train Leave Leave California Jefferson City Arrive St. Louis

2 3 12' p. m. (Stops) 3:55 p. m. 7:30 p. m.

4 2 33 a. m. (Stops) 3:20 a. m. 7 :25 a. m.

6 1 06 p. m. (Stops) 1:55 p. m. 5 :30 p. m.

10 2 58 a. m. (Passes) 3:43 a. m. 7:50 a. m.

22' 12 30 p. m. (Stops) 2:45 p. m. 7:25 p. m.

38 9 58 p. m. (Stops) 10:45 p. m.

94 8 55 a. m. (Stops) 10:30 a. m.

Trains 94 and 95 are local freight trains, carrying passengers. Trains No. 21 and 22 are local passenger trains, making all stops between Kansas City and St. Lonis. Trains No. 37 and 38 are local trains between Kansas City and Jefferson City only, but train No. 37 connects at Jefferson City for California with Fast-Mail Train No. 7 from St. Louis.

The proof adduced upon the hearing shows that California is the county-seat of Moniteau County, which county, we judicially know, had according to the Federal census of 1910, 14,375 population. According to this same census California had in 1910 a population of 2,154, though the complaint filed and the witnesses offered gave its present population as “approximately 2500.” It is located on the line of the relators’ railroad 350 miles west of St. Louis, 25 miles west of Jefferson City, and 38 miles east of Sedalia. Except Kirkwood, Washington, and Jefferson City, it is (according to the Federal census) the most populous town on relators’ railroad between St. Louis and Sedalia. It is situated in a prosperous agricultural county, which has a population density of a little over 34 persons per square mile. It serves as a railroad station for a number of smaller towns, situate on the north and on the south of it, among which is the town of Latham, where a sanitarium of some importance is located. The town of California has three banks, two large mills, one elevator, a wholesale saddlery, and quite a number of other large mercantile and business establishments, and as it is the county seat of Moniteau County all of the usual courts of record are held therein regularly.

In addition to relators’ passenger business in and out of California, a large freight business, especially in the- transportation of live stock, is done there, and since it has only the one railroad, relators get the whole of the transportation business of the town of whatever kind. From May 1, 1915, to April 30, 1916, relators sold 27,570 tickets to outgoing passengers at its California office, for which they were paid $21,931.88. During the months of March, April, and May, 1915, there' were sold at California to passengers for St. Lonis, an average of 91 tickets each month. For the corresponding period in the year 1916, the average monthly sale of such tickets to St. Louis, was (85. In the same months there were sold at St. Louis to passengers for California, a monthly average of 76 tickets for the year 1915, and 72 for the year 1916. During these same months in the year 1915, there were sold at California to .passengers whose destination was Jefferson City, a monthly average of 578 tickets: while for the year 1916, the monthly average of such sales was 528 tickets.

We deem it not important to set out the number of tickets sold at Jefferson City to those desiring to return to California, as it is near enough for our purpose to assume that they all got back. To go further into this inquiry would mayhap create the impression that we are judicially attaching undue credence and weight to the frivolous suggestion of counsel for relators that the arid status of California induced many parched pilgrims to turn their eyes and feet toward Jefferson City as the nearest and moistest oasis when looking toward the east. However much the suggested consideration might- aid in explaining an apparent loss of business, by permitting us to attribute an obvious annual decrease in passenger traffic to the beneficent influence of increasing temperance, we can not entertain it here.

The evidence taken before the Commission showed that Train No. 5 (about whose stop west-bound, as our statement of the case foreshadows, this whole appeal turns), is an interstate- mail train, which renders in part the service necessary to carry out a recently awarded Government contract for transporting the mails destined to Oklahoma and the Southwest. And in this connection it was further shown that to burden this train with a flag stop, for all passengers of the sort mentioned, would' often render this train too late for its required mail connections at Kansas City, and thereby hinder and delay this mail service.

Against these contentions no countervailing proof was offered; nor any argument advanced, except that Train No. 5 stopped on flag at Berger and Morrison, which are small towns on relators’ railroad situate in Franklin County and Osage County, respectively. On this contention it was shown that Train No. 5 does stop on flag at the above small villages to let off or on any passengers, or anyone who desires to take passage to or from these stations to any other station whereat by regular schedule this train stops. So it was urged that since the town of California is concededly much larger in population and of greater business importance than either Berger or Morrison, the fact of these flag stops at these smaller places is well-nigh conclusive proof of an unreasonable preference.

Such a contention has but negligible, if any, merit in it, and is manifestly of but little account as an argument. It is not one of the tests to be applied to the determination of the reasonableness or unreasonably ness of the order made by the Commission. It is in probative weight practically upon a parity with the argument that since an acre of land in Saline County is worth $200, an acre of land in the Ozark Mountains must also be worth $200. In short, the argument fails to take into consideration existing conditions (other than mere local population and volume of business) of territory and .total population served, the distance between neighboring stations east and west on the line; as well as others. For Berger and Morrison are undoubtedly entitled to some service. It might well be that the train which would otherwise furnish such requisite service could not conveniently do so on account of the necessity of making a connection with another line, or that the weight of the equipment of such train would cause a loss of time in stopping utterly incommensurate with the income produced by the stop. In other words the argument in such a comparison is of no decisive weight, because of the well-night insuperable difficulty of bringing to its consideration a parity of conditions for the comparison.

By the order, as modified by the judgment appealed from, the daily service in west-bound traffic given to the town of California consists of four passengers trains from St. Louis. Three of these stop regularly. The other one (No. 5) stops whenever it has passengers from St. Louis to California. The schedule of one other of 'these trains (called No. 21 in the record) is apparently broken by a three or four-hour lay-over at Jefferson City. The daily eastbound service is rendered by four passenger trains, all of which make regular stops at California. One of these is what is called a local passenger train, making regular stops at practically all stations, but is nevertheless a through or interstate train. There is also daily each way one .local freight train, which carries passengers; also each way a local passenger train which daily runs to and from Kansas City to Jefferson City, and which makes both eastbound and westbound stops at California; but, since as we gather from the record these local freight trains and intrastate passenger trains afford only local service, and the burden of the complaint here is concerning adequate through or interstate service, we need not take these freight trains or intrastate passenger trains into consideration. However, the schedule of the westbound one of these intrastate passenger trains, is arranged in such wise as to connect at Jefferson City with relators’ fast-mail train (No. 7) going West, so as .to permit passengers from St. Louis, and other points destined to California, to use the fast-mail train, and its Pullman service, as far as Jefferson City, and then almost without delay to use the' local intrastate passenger train for the remainder of the trip.

While we agree that the Commission is vested with plenary authority to compel the relators to stop a presently operated interstate train at California, if relators are not otherwise already furnishing reasonable, proper, and adequate interstate service to that town and locality, we are yet, upon the facts, of the opinion that such reasonable, proper and adequate service will be furnished upon the order made by the Commission, as this order was required to be modified by tbe judgment of the circuit court. Let that judgment be affirmed.

All concur.

      (*Stops to let off passengers from St. Louis to California. The word “Passes” signifies that the train does not stop.)


author: WILLIAMS, J.

text:
    MARIE E. KAYSER et al. v. BOARD OF EDUCATION OF CITY OF ST. LOUIS and BEN BLEWETT, Appellants.
    In Banc,
    March 5, 1918.
    1. PUBLIC SCHOOLS: Equal Opportunities: Admission to Teachers’ College: Examinations. All persons within the constitutional age limit who possess the required qualifications for receiving the course of study offered in a teachers’ college if it is in full sense a public school, and located in the district, are entitled to equal opportunity of becoming students in said college; but this does not mean that the school board, by prescribing a rule that graduates of its own high schools may be admitted without examination, while graduates of other schools must submit and pass reasonable examinations as to their qualifications, is unjustly discriminating against the graduates of such other schools. The two methods of testing the qualifications of applicants relate to different conditions, and both are reasonable.
    2. -: -: Examination: Discrimination: Limited to Highest Grades. A school board does not have the right to exclude applicants to a public high school, which is a free school in the constitutional sense, by a system of competitive examinations whereby admission is made dependent, not upon the applicant’s ability to pass a better examination than other applicants, but to make “the highest averages in the examination.” That would be an unjust discrimination. But query: Can one who has not-passed or submitted to any examination raise the point that a rule limiting entrants to those who have made “the highest grades in the examination” is unjust discrimination against her?
    3. --: Teachers’ College: Entrants Limited to Highest Grade: Reasonable Regulation. A rule of the school board requiring those who desire entrance to a teachers’ college to submit to a reasonable examination as to their qualifications and declaring that “from those passing the examination the number admitted to the college will be determined by the prospective need of new teachers in the ' public elementary schools of St. Louis and. will be made up of those making the highest averages in the examination” is not an unreasonable regulation or an unconstitutional discrimination. The teachers’ college, even though it be supported by the public school fund mentioned in the Constitution, is not a public school in the same sense that elementary schools are public schools — open alike to all students of school age — but is one of limited attendance, and being such the school board may exercise a reasonable discretion in 'prescribing the terms by which the number may be limited, and if its rule is free from arbitrary and unreasonable prescriptions it is not subject to judicial alteration. A teachers’ training school is not maintained primarily for the immediate benefit of the students therein, but for the purpose of obtaining a sufficient force of trained teachers based upon the needs and requirements of the grade and high schools.
    4. -:--: Power of Board to Maintain. A teachers’ training school, if not a part, is at least a permissible instrumentality, of the public school system of a great city, and the School board, in maintaining the system, has, at least, an implied power to expend such an amount of the school funds in training teachers as the best interests and the necessities of the public schools in the city require.
    Appeal from St. Louis City Circuit Court. — Hon. Thomas G. Hennings, Judge.
    Reversed.

      Robert Burkham for appellants.
    (1) A rule requiring the examination of applicants coming from other schools is valid if the Harris Teachers’ College is a “free public school.” Creyhon v. Board of Education, 163 Pac. (Kan.) 145. (2) A rule requiring the examination of applicants coming from other schools is valid, as the Harris Teachers’ College is not a “free public school.” It is hut an instrumentality conducted by the Board of Education for the benefit of the St. Louis public school system. The institution is, therefore, not open to all, but admittance thereto may constitutionally he determined by such reasonable regulations as the board may from time to time adopt. Regents v. Painter, 102 Mo. 464; Gordon v. Carnes, 47 N. Y. 616; Normal School v. Auditors, 97 Ya. 233; School District v. Bryan, 51 Wash. 498; State ex rel. v. Preston, 79 Wash. 286; Dickinson v. Edmundson, 178 S. W. (Ark.) 930.

      Kinealy & Kinealy for respondents.
    (1) School funds provided for in the Constitution can he used only for the maintenance of the State University and the constitutionally directed free public schools. Constitution, art. 9, sees. 1 and 6. (2) The Board of Education has no powers except such as are given it by law, and those are to conduct the free public schools provided for in the Constitution. R. S. 1909, sec. 11035; State ex rel. v. Tracy, 94 Mo. 217; Pleller v. Stremmel, 52 Mo. 309. (3) The hoard has broad powers as to the establishment of schools and is not limited to any grade of instruction. Roach v. Public Schools, 7 Mo. App. 567. (4) The designation of schools as “common” or “public” has nothing to do with their grade hut simply indicates that they are part of the school system of the State. 35 Cyc. 811; Roach v. Public Schools, 77 Mo. 484; Board of Regents v. Painter, 102 Mo. 464. (-5) Rules for admission to public schools must give equal opportunities for entrance to all persons having like qualifications. State ex rel. v. McChesney, 237 Mo. 670; State ex rel. v. Clvmer, 164 Mo. App. 671; Trustees etc. v. The People, 87 111. 303. (6) The Harris Teachers’ College cannot be considered a “teacher factory” instead of a school because: (a) The board is not empowered to use public school funds for the purpose of conducting anything hut a public school, much less a “factory” of any kind, (h) The statute specifically provides how teachers shall be obtained and that is an implied prohibition against “manufacturing” them. R. S. 1909, sec. 11035. (c) The hoard’s own rules classify the Harris Teachers’ College as a “school” conducted under its Department of Instruction.
   WILLIAMS, J.

By this suit, instituted in the circuit court of the city of St. Louis, respondents seek to have declared null and void certain rules and regulations made by the defendant concerning the admission of students to the Harris Teachers’ College conducted by the defendants in the city of St. Louis, and to enjoin the defendants from enforcing said regulations against respondent Marie E. Kayser.

Defendants filed a demurrer to the petition, which was overruled, and the defendants refusing to plead further a decree was entered granting the relief prayed. Thereupon defendants duly appealed.

The petition, caption omitted, is as follows:

“Plaintiffs state that the defendant Board of Education of the city of St. Louis is a corporation duly organized and existing under and by virtue of the laws of the State of Missouri and by law is vested with the general and supervising control, government and management of the public schools and public school property in the said city of St. Louis, and the defendant Ben Blewett is the Superintendent of Instruction duly appointed by the Board of Education and duly qualified and acting as such; that defendant Board of Education, under authority granted it by law, adopted, and at the times herein referred to had in force, rules for the government, regulation and management of the public schools and public school property in said city and for the transaction of its business; that said • board maintains, conducts and operates a large number of schools for different purposes and of different classes and characters in accordance with the provisions of Rule 42 of its said rules, reading as follows, viz:
“ ‘RULE 42
‘Kinds of Schools
“ ‘Section I. The Board of Education shall maintain schools for white and for colored children.
“ ‘Sec. II. These schools shall be of the following kinds:
“ ‘A. District School and Kindergarten.
“ ‘B. High School. ,
“ ‘C. School for Training of Teachers.
“ ‘D. Evening District School.
“ ‘E. Evening High School.
“ ‘F. Vacation School.
“ ‘G. School for Defectives.
“ £H. School for Neglected and Dependent Children.
££ £I. School for Delinquent Children.
££ ‘Sec. III. To provide for the training of teachers for the grades and Kindergartens for white children, there shall be maintained a Teachers’ College.
“ ‘Sec. IV. For the training of teachers for the grades and kindergartens for colored children, there shall be maintained a course o in connection with the High School for colored youth.
“ ‘Sec. V. The Superintendent of Instruction shall prescribe the conditions for admission to, and graduation from, the Teachers ’ College, and the training course for teachers for grades and kindergartens for colored children, provided that the candidates for admission to them shall have educational qualifications at least equivalent to those required to complete a four years’ High School course.
“ ‘ See. VI. The High School course shall include the four grades of the public school course following the district school course.’
“Plaintiffs state that the defendants conduct the department of education under their control and in said schools divided into several divisions in accordance with the provisions of the Rule 43 of said rules, reading as follows, viz:
“ ‘RULE 43
“ ‘Section 1. The Department of Instruction shall be organized under the following divisions:
“ ‘(1) Harris Teachers’ College..
“‘(2) Kindergarten and district schools—
(a) For white pupils.
(b) For colored pupils.
“‘(3) High Schools—
(a) Por white pupils.
(b) Por colored pupils.
“ ‘(4) Evening Schools—
(a) Por white pupils.
(b) For colored pupils.
“ ‘ (5) Special School for the deaf.
“ ‘ (6) Special schools for individual instruction.
“ ‘(7) Open-air schools.
“ ‘(8) Industrial school.
“ ‘(9) Summer term—
Harris Teachers ’ College
High Schools.
Grades.
Grade manual.
“‘(10) Music.
“‘(11) Drawing.
“‘(12) Penmanship.
“‘(13) Physical Training.
“‘(14) Manual Training.
“ ‘ (15) School hygiene.
“‘(16) Compulsory attendance.
“‘(17) Educational museum.’
“Plaintiffs state that the defendants conduct, and at all the times herein stated conducted, district schools for students up to what is known as the eighth grade of instruction, and five high schools for imparting instruction in the four grades following the district school course; and that defendants conduct, and at the times herein mentioned conducted, one teachers’ training-school, known as the Harris Teachers’ College, for students having educational qualifications at least equivalent to those required to complete a four years ’ high school course.
“Plaintiffs state that for the purposes and uses of' said Harris Teachers ’ College and for conducting, maintaining and operating same, the defendant Board of Education purchased a large parcel of ground in the said .city of St. Louis and about the year 1904 erected and equipped thereon a building, all at a total cost of over two hundred thousand dollars, and annually expends over thirty-five thousand dollars for maintaining same and over twenty-five thousand dollars for salaries for teachers employed therein; and that all of the said funds expended by said board in the acquisition of said lot and the erection of said building and the maintenance and conduct of' said school were and are the proceeds of public taxes received by said defendant, and levied, assessed and collected in accordance with law for the maintenance of the free public schools provided for in and by the Constitution and law of the State of Missouri.
“Plaintiffs further state that on or about May 14, 1912, the defendant Ben Blewett, as such Superintendent of Instruction, and purporting to act under and by virtue of authority in him vested by law and in accordance with the provisions of section Y of the aforesaid Eule 42 of the said Board of Education, formulated and prescribed certain regulations, requirements and conditions for the admission of students to said Harris Teachers’ College, reading as follows, viz:
“ ‘Women, graduates of the St. Louis Public High Schools whose record places them within the standing of the highest two-thirds' of their respective classes, will be admitted to the College without examination.
“ ‘Other graduates of the St. Louis Public High Schools and graduates of other high schools on the accredited list of the North Central Association of Colleges and Secondary Schools and of High Schools whose equipment and course of study are up to this standard, may be admitted to the Harris Teachers’ College of St. Louis under the following conditions; (1) For those who wish to enter the college an examination will be held at the college building. (2) Written application for permission to take this examination must be sent to the principal of the college. This application must be accompanied by a certificate of graduation from some high school of the above-described standard. (3) All candidates must pass a physical examination. (4) They must also be examined in the following subjects: English composition and literature; algebra to quadratics; plane geometry; general history; two of the following sciences — -physics, chemistry, botany, physiology, physiography and zoology;.and one of the following languages —Latin, Greek, French and Spanish. In this examination the candidate must make an average of seventy-five per cent, and not less than fifty per cent, in any subject. (5) From those passing this ^examination, the number admitted .to the college will be determined by the prospective need of new teachers in the public elementary schools of St. Louis, and will be made up of those making the highest averages in the examination.
“ ‘Those admitted will be required to sign an agreement to teach at least two years in the public schools of St. Louis, if appointed and continued in the service by the Board of Education. Continuance in the course will be dependent upon satisfactory work. There will be no charge for tuition, text-books or incidentals.’
■ ‘ ‘ Plaintiffs state that said regulations, requirements and conditions so formulated and prescribed by defendant Blewett as aforesaid were submitted ,to and approved by the defendant Board of Education on or about May 14, 1912, and ever since have been and are now enforced by defendants, and no persons are admitted to said Teachers’ College as students except under and in accordance with said requirements, conditions and regulations; that by the St. Louis Public High Schools therein mentioned is meant the high schools maintained and conducted by the defendants as aforesaid; that under and by virtue of said requirements, regulations and conditions, places in said Harris Teachers’ College to the number of two-thirds of the graduates of the public high schools conducted by the defendants are illegally and wrongfully withdrawn from the public and appropriated to the use of said graduates of said pub-lie high schools; that under and by virtue of said regulations, two-thirds of the graduates from said public high schools are admitted to said Teachers’ College without test or examination and all other persons seeking to become students in said school are wrongfully and unlawfully discriminated against by being required to file a written application and get leave to take an examination for admission, and by being required to take the examination in said regulations set forth and by the right to such admission being even then dependent upon the opinion of the said Superintendent of Instruction as to the prospective need of new teachers in the public elementary schools of said city of St. Louis; that said regulations, requirements and conditions are unreasonable and are violative of and repugnant to sections 1 and 6 of article 11 of the Constitution of Missouri and to the laws of Missouri relating to the public schools, and the defendants have no power or authority under the Constitution and laws of Missouri to adopt or enforce same.
“Plaintiffs state that plaintiff Ferdinand C. Kayser is and has been for a great many years a tax-paying citizen, householder and head of a family, residing in said city of St. Louis and paying public taxes in excess of one hundred and fifty dollars per annum'; that plaintiff Marie E. Kayser is the unmarried daughter of plaintiff Ferdinand C. Kayser, residing with him and a member of his family, and is under twenty years of age; that she has educational qualifications equivalent to those required to complete a four years’ high school course, and has completed such a course in a school of a grade and standing equal to’ that of said public high schools conducted by defendants, and is a graduate of such school and is in every way competent and qualified to pursue the course of study prescribed and taught by défendants in said Harris Teachers’ College, but she is not a graduate of the public high schools conducted by defendants.
“Plaintiffs state that they desire that plaintiff Marie E. Kayser should become a student in said Harris Teachers’ College, but that defendants wrongfully and illegally have refused and still refuse to admit her to said school as such student except under and in accordance with the aforesaid unreasonable and illegal regulations, requirements and conditions prescribed and enforced by defendants, as aforesaid, for the admission of students to said school, and refuse to admit her as two-thirds of the graduates of said public high schools are admitted, and refused to admit her unless she files a written application and takes and passes the examinations provided for in said illegal regulations, requirements and conditions, and not even then unless the prospective need of new teachers in the elementary public schools shall, in the opinion of defendant Blewett, require it.
“Plaintiffs therefore pray the court to order, adjudge and decree the aforesaid regulations, requirements and conditions for admission of students to said Harris Teachers’ College illegal, null and void as being unreasonable and violative of the'laws of the State of Missouri relating to public schools, and of sections 1 and 6 of article 11 of the Constitution of Missouri; to order,' adjudge and decree that defendants be enjoined from enforcing same against plaintiff Marie E. Kayser; to order, adjudge and decree that defendants be enjoined from enforcing as against plaintiff Marie E. Kayser any rule, requirement, regulation or condition for admission to said Teachers’ College as a student therein which does not give equal opportunities for such admission to all persons possessing equal qualifications therefor; to order, adjudge and decree that plaintiff Marie E. Kayser is duly qualified to become a student in said Harris Teachers’ College, or that defendants make such tests of her qualifications to become such as to the court shall seem reasonable, and that thereupon the defendants be ordered and directed to admit her as a student in said school; and to grant plaintiffs such other and further relief in the premises as shall be equitable and just.”

I. We are somewhat at a loss to know the exact theory upon which respondents seek the relief prayed, but, as we gather it from the brief, it may be stated in general terms as follows: That since Article 11 Section 1, Constitution of Missouri, provides for the establishment and maintenance of “free public schools for the gratuitous instruction of all persons in this State between the ages of six and twenty years” and since Section 6 of the same article provides that the- annual income from the State School Fund, together with portions of the revenue which shall be appropriated for school purposes, “shall be faithfully appropriated for establishing and maintaining the free public schools . . . and for no other uses or purposes whatever,” and since the Harris Teachers’ College of the city of St. Louis is maintained by^ the use of a portion of the school fund mentioned in the Constitution, it necessarily follows that Harris Teachers’ College is a public school in the sense that all persons having the required qualifications for admission as students therein should be admitted under the application of uniform regulations; that respondent Marie E. Kayser possesses the required qualifications for admission as a student therein, but that the rules concerning admission prescribed by the Board of Education of said city unjustly discriminate against her and deny to her the use of said school, as by the above constitutional provisions provided.

If the Harris Teachers’ College is a public school, in the sense that the grade and high schools of said city are public schools, then all persons within the constitutional-age limit, possessing the required qualifications for receiving the course of instruction therein offered, should have an equal opportunity of- becoming students therein.

This would not mean, however, that the school board, in prescribing a rule that graduates of its own schools would be admitted without examination, while others who had graduated or finished courses elsewhere should pass a reasonable examination, had unjustly discriminated against the persons' so required to pass such reasonable examination test. This identical point was recently passed upon in a well reasoned opinion by the Supreme Court of Kansas. [Creyhon v. Board of Education, 163 Pac. 145, not yet officially reported.]

In that case the school board of the city of Parsons, by rule, provided that applicants having a county superintendent’s diploma or a certificate of graduation from the eighth grade of the Parsons city schools or any other public school of equal rank, should be admitted as students in its high school, without examination; but that all other applicants should be required to pass an examination test. The court in holding that said rule did not deny, to those required to take an examination, the equal protection ,of the law, said:

‘ ‘ That children of suitable age are entitled to attend the public schools at the place of their residence is not doubted, but the department to which they are to be assigned is a matter to be determined under appropriate regulations adopted by the governing body. The board of education is charged with the duty of making rules for ■ the government of the city schools. [Gen. Stat. 1915, sec. 9108.] It is proper, if not absolutely necessary, that some provisions should be made for determining whether an applicant who presents himself for admission to a particular department has had the preliminary training to justify his assignment thereto. Two obvious methods for accomplishing this result present themselves. One is to test the prospective pupil’s actual qualifications by an examination; the other is to act upon the presumption in his favor arising from the character of the schools he has attended. There is room for the exercise of individual judgment as to the manner and extent to which the latter method should be applied. There is a fair basis for the classification of schools in this respect, and making a certificate of graduation from schools of one class a substitute for an examination of a pupil, while denying that effect to such a certificate from schools of another class. Por instance, if the hoard had seen fit to dispense with an examination in the case of graduates of the schools in the city, while requiring it of the graduates of outside schools of a similar kind, a just basis for the distinction could be found in the fact that the board could more conveniently determine the quality of work done by a school that was near at hand than by one at a distance. And such a distinction might reasonably be made between the public schools of the city and other schools located therein, because the board of education, having full control of the management of the public schools, would necessarily be fully advised of the character of work they were doing, so that further examination of their graduates would be superfluous. The same character of difference, though of less degree, exists between public and private schools, in whatever part of the State they may be situated. While the board of education of Parsons has no control over public schools outside of the city, its schools are a part of the same general system, all portions of which are subject to official visitation and regulation. The board has means for investigating and determining the evidential value of a certificate of graduation from a public school anywhere in Kansas, that are not available with respect to any school not under public management. The courses of study, the general methods pursued, the establishment of standards, are subject to legal regulation, How far in a particular instance they are conformed to may always be determined by investigation conducted as a matter of right. However efficient a private school may actually be, the board does not have, and cannot have, the same facilities for satisfying itself on the point. Any opportunity afforded it for investigating the question would depend upon courtesy and not upon law; would be a privilege and not a right. And while it might well avail itself of such an opportunity and treat the diploma of such-a school as a substitute for an examination if in its judgment the information acquired justified that course, a court can not control its action in that regard.”

Applying then the logic of the Kansas case which in our opinion is sound, to the one at bar, it follows that even though Harris Teachers’ College is a free public school in. the popular sense, of the word, yet the said rule of the Board of Education of the city of St. Louis, requiring examinations of certain applicants, would not be held to be an unfair discrimination against such applicants.

But proceeding further, and still assuming that the Harris Teachers’ College is a public school in the same sense as a grade or high school is, what should be said with reference to sub-division 5 of the rule set forth in the petition, vizi: “(5) From those passing this examination the number admitted to the college will be determined by the prospective need of new teachers in the public elementary schools of St. Louis and will be made up of those making the highest averages in the examination:”

Here we see that the rule provides for limiting the number .even of those qualified to receive the training offered, and when applied may possibly exclude many who have passed the required examinations.

If the school is a free public school in the popular sense, then it would inevitably follow, that as to one thus excluded, the rule would work an unfair discrimination. It does not occur to us that a school board would have the right to exclude prospective students from a public high school by a system of competitive examinations, thereby making the admission dependent, not upon the ability of the application to pass the test of a reasonable examination, but upon his ability to pass a better examination than his neighbor.

But respondent, in her petition, does not allege that she had passed the required examination but had been denied admission, by reason of the exercise of the power of limitation contained in subdivision 5 of the rule above mentioned, and, for that reason, is possibly not in a position to urge that point as a ground of relief. We have thought it advisable to mention the points, however, for the purpose of developing the issues and to lead to a better understanding of the propositions to follow.

II. But does it necessarily follow that merely because the Harris Teachers’ College is supported by the public school funds' mentioned in the Constitution, it is a public school in the same sense that the grade and high schools of said city are public schools, open to all alike and its number of students limited only by the number of qualified applicants for admission? We think it does not necessarily so follow.

And does it necessarily follow that if the said Teachers’ College is not open to the whole public as are the grade and high schools, that its existence is not justified by the above mentioned constitutional provisions? Here again we third?; it does not necessarily so follow.

Respondents, as we gather their theory, do not undertake to say that the support of such a school is not warranted under the Constitution. The respondents are not attempting in this proceeding to destroy or prevent the operation of the school, but are attempting only to have the daughter (one of the respondents) become a student therein; and, in their brief, respondents recognize that the capacity of the school, its purposes and objects no doubt considered, must, to some extent, be limited. We quote the following from respondents’, brief, page 20:

“In conclusion, we submit that defendants have the right to maintain the Harris Teachers’ College, but that they have no right to restrict admission to the school to any particular class of persons in the community. The regulations must be general in character so as to give all persons who come within the sphere of its activities, that is, have equal qualifications for pursuing the course of study therein taught, equal opportunities for admission. This can be readily done by requiring all persons seeking admission to take the-same examination and applying tbe same tests to all applicants alike. If the places'in the school are limited then such a common examination is almost imperative since there is no other impartial way of determining which of the applicants, to the number of places available, are the best qualified.” (Italics oúrs.)

It would appear to us that if it be conceded that tbe school is one of limited attendance and that the school board would have the right to deny any qualified applicant, whether by competitive examinations, as suggested by respondents, or otherwise, the conclusion would inevitable follow that it is not a public school in the same sense that the grade or high schools are public schools. And if it be conceded that the attendance may be limited, who is to determine the requirements- as to limitation? Undoubtedly the school board of said city under the statute giving it the right to make rules “for the government, regulation and management of the public schools in such city.” [Sec. 11031, Revised Statutes 1909.] In the exercise of that duty they would be entitled to exercise' a reasonable discretion in the matter and, absent arbitrary or unreasonable action, their decision in matters of that kind should, we think, be controlling.

Conceding then, arguendo, that the attendance of said school must be limited and that the school board may fix reasonable regulations as to admission, is the regulation in the present instance, which permits the best two-thirds of its high school graduates to enter without examination while all others can -enter only by examination, an unjust discrimination against those who must take an examination?

If, as we have seen above, in the Kansas case, such a regulation governing entrance to a public high school (where every qualified applicant has, in a sense, an equal right, under the law to enter) is not an unjust discrimination against those required to pass an examination, it can not be said that such, a rule governing admission to a teachers’ training school (where the applicant does not enter as a matter of right, based upon qualification, but enters in conformity with a reasonable policy of administration based' upon the needs and requirements of the purposes for which the school is established) would work an unjust discrimination against the applicant required to pass an examination.

We are, therefore, unable to discover wherein respondents have stated a cause of action justifying the relief sought.

We are of the opinion that the' school board has the right to establish and maintain the teachers’ training school and to limit its attendance to the demands reasonably necessary to insure a well qualified teaching force for its grade schools. That it at least has the implied, power in “maintaining” the public schools of said city to expend such amount in training future teachers as the best interests of the public schools in said city and the necessities of the situation may require. We are also of the opinion that money so expended is expended for the purpose of “maintaining the public schools” of said city within the meaning of the above mentioned constitutional mandate; that such a school so conducted is not a public school in the popular sense that grade or high schools aré public schools, and, therefore, open to all of the qualified public alike, but that it is a part of, or at least a permissible instrumentality of, the public school system of said city, and that the expenditure is justified because the results attained are supposed to redound to the direct benefit of the public schools of said city and to every child attending the same; that the school is not created, primarily, for the benefit of the immediate students therein, thereby differing in character from the grade or high schools; but for the benefit of the entire system of grade schools in said city and as a valuable auxiliary thereto; that while it is true the students attending said school do receive a personal benefit therefrom, yet such personal benefit is not one that the applicant has a right to demand, but comes only incidentally in the working out of the greater objects sought to be attained, which greater objects, alone, justify the creation and maintenance of such a school.

We are, therefore, of the opinion that the decree entered by the learned trial court should not have been entered and that the same should be reversed. It is so ordered.

PER CURIAM: — The foregoing opinion by Williams, J.., in Division Two is hereby adopted by the Court in Banc.

Graves, G. J., Walker and Blair, JJ., concur; Bond, Paris and Woodson, JJ., dissent.