author: BROWN, C. PER CURIAM.

text:
    FRANK ALBERS, Appellant, v. CITY OF ST. LOUIS.
    Division One,
    July 3, 1916.
    1. SPECIAL TAXES: Power of City. The city must look to its charter for its power to levy a special tax on land, and must abide by the limitations upon those powers which are therein expressed.

      2. -: -: Boulevard: Non-Abutting Property. The charter of St. Louis provides that the benefit district against which the cost of opening and establishing a boulevard may be assessed shall be limited to the property fronting or bordering on such boulevard; and if the highway is in fact a boulevard, '• and not a street, property which ■ does not front thereon cannot be legally assessed with special taxes for its establishment.
    -: Boulevard: Definition. The fact that the ordinance denominates the highway a boulevard does not make it such, nor does the fact that it denominates it a street make it a street. The judicial inquiry relates to things, not names. The word “boulevard*’ is used in its descriptive sense in the St. Louis charter, and means a way designed for pleasure as well as for commercial intercommunication, and having the scenic features which please rather than profit. A highway, lying entirely outside of the business portion of the city and needing no widening to accommodate its trafic, becomes a boulevard when widened from 60 to 200 feet and converted into a “service roadway 30 feet wide for general lawful purposes of public travel” and “a pleasure driveway, separated from said service roadway by space for planting trees and shrubbery,” on which there shall be no “other than pleasure driving.”
    4. -: -: Judgment in Condemnation: Finality As to Benefit Assessments. A judgment of the circuit court assessing damages for property taken in widening a street into a boulevard, and in assessing benefits against property within the benefit district not taken, according to the report of the commissioners and the publication notice of the city counselor, is not final as to benefits. The primary object of the proceeding is the condemnation of lands necessary to the widening of the street; incidentally, the benefit to lands not taken is assessed in the same proceeding. As to the land taken and the assessment of damages therefor, the judgment is final; as to the assessment of benefits against lands not taken, it is only prima-faeie evidence of the liability of the property-owner, and like other prima-facie evidence is rebut-table; and where the proceeding was in connection with the establishment of a boulevard, a property-owner whose lands do not front thereon may maintain an action to have cancelled special tax bills issued against them as a cloud thereon.
    Appeal from St. Louis City Circuit Court. — Hon. J. Hugo Grimm, Judge.
    Reversed and remanded.

      William L. Bohnenkamp and Benjamin H. Charles for appellant.
    (1) “A person injuriously affected by an ordinance may show that its passage was obtained by fraud or other unlawful means, or for an unlawful purpose; and the fraud which will invalidate an ordinance is shown by proof of fraud, defined to be the wilful doing of an unlawful act.” Kansas City v. Hyde, 196 Mo. 507, 7 L. R. A. (N. S.) 639; State ex rel. v.' Gates, 190 Mo. 555; Glasgow v. St. Louis, 107 Mo. 203; McQuillin on Mun. Corps., sec. 379, pp. 833, 835, sec., 2127, pp. 4526, 4527; 21 Am.’ & Eng. Encv. Law (2 Ed.), p. 978; People ex rel. v. Creiger, 138 111. 401. The unlawful, act pleaded in the case at bar was the attempted substitution of a benefit district, for the establishment of a boulevard, not recognized by the law; a district different from the benefit district fixed by the city’s charter for the boulevard. (2) The city’s charter fixed the benefit district for the creation of a boulevard, confining it to lands fronting or bordering thereon. St.. Louis Charter, art. 6, sec. 1 (Rombauer’s Code, 1912, p. 352). The petition charges that ‘‘Kingshighway Northeast” was widened and opened as a boulevard; and therefore no district other than that established by law could lawfully be designated. And no property outside such district fixed by the charter could be deemed to be benefited; and therefore could not be assessed with benefits. St. Louis v. Realty Co., 259 Mo. 136; Railroad v.. Portland, 25 Ore. 229. The notice of the city counselor that the commissioners had established a benefit district was, therefore, insufficient and illegal. It attempted to establish a benefit district not authorized by the charter. The designation of an unauthorized benefit district is fatal to the assessments. St. Louis v. Brinckwirth, 204 Mo. 305. (3) The repealing ordinance is void because of the city’s fraudulent intent to assess, for what was to be a boulevard in fact, property outside of the boulevard benefit district, on the pretense that the improvement was merely the widening of a street. Repealing the boulevard ordinance containing restrictions as to traffic was not conclusive that the street was not to be a boulevard. There could still be a boulevard without the restrictions prescribed in the boulevard ordinance. St. Louis v. Realty Co., 259 Mo. 135. A false recital in an ordinance is not conclusive. Kansas City v. Hyde, 196 Mo. 513. So also the implication in the repealing ordinance that the increase of width in Bircher Street was merely to widen that highway as a street is not conclusive. It may be shown that this widening was designed by the city to create a boulevard without complying with the boulevard provisions of the charter. The courts will look through any sham. Kansas City v. Hvde, 196 Mo. 513; Gas Co. v. Kansas City, 198 Fed. 515. And will not tolerate abuses of power. 22 L. R. A. (N. S.) 173; Bennett v. Marion, 106 Iowa, 632. (4) If the opening or widening oL a proposed street is but a part of a general scheme, the court should' know what that scheme is, in order to appreciate the value of the particular street in question. Kansas City v. Hyde, 196 Mo. 505; Kansas City v. Railroad, 230 Mo. 375. (5) If this “Kingshighway Northeast” was not intended to be a boulevard, then the amount of land taken for mere street purposes was excessive. The determination of the amount necessary for that purpose is subject to review by the courts. Bennett v. Marion, 106 Iowa,- 632; Grafton v. Railroad, 22 L. R. A. (N/ S.) 1. (6) The action of the court in the Baker case, approving the report of the commissioners fixes the amount of the tax, “but there is no further judgment.” St. Louis v. Brinckwirth, 204 Mo. 298. (7) St. Louis v. Baker was dual in character, (a) As to those defendants whose land was to be taken in the widening, the proceeding was a judicial one. (b) As to those whose land was not taken, but against which assessments were sought to be laid, the proceeding was merely a tax assessment proceeding. This distinction as to the duality of the condemnation provisions of the St. Louis charter runs through many of the recent cases. St. Louis v. Brinckwirth, 204 Mo. 297; St. Louis v. Calhoun, 222 Mo. 53; St. Louis v. Busch, 252 Mo. 220; Jefferson City v. Wells, 263 Mo. 251. (8) Even in those cases where this distinction is not made, the judgment, ■ so-called, as to assessments for benefits is not held to be final as to “the validity and regularity of the proceeding.” Eyssell v. St. Louis, 168 Mo. 620; St. Louis v. Eanken, 96 Mo. 497; St. Louis v. Eealty Co., 175 Mo. 67. (9) The petition attacks Ordinance .24224 as void, and thereby attacks the jurisdiction of the court in the Baker ease, both.as to the subject-matter and as to the person. The city virtually begs the question when it urges that the judgment in the Baker case is not subject to collateral attack.

      Charles H. Daues and Truman P. Young for respondent.
    (1) The judgment assessing benefits in the case of City of St. Louis v. James E. Baker, in the circuit court, was a final judgment fixing the benefits charge-, able against plaintiff’s property, and said judgment is not subject to collateral attack in this proceeding. St. Louis v. Eealty Co., 259 Mo. 149: Searcy v. Clay County, 176 Mo. 493. (2) The noice given to the owners of property to be assessed for benefits was sufficient to confer jurisdiction in the Baker case, and property owners within the district were charged with notice thereafter of all proceedings in the case. Eyssell v. St. Louis, 168 Mo. 612; Brinckwirth v. St. Louis, 204 Mo. 313; St. Louis v. Eealty Co., 259 Mo. 140; St. Louis v. Calhoun, 222 Mo. 53; 2 Lewis on Eminent Domain (3 Ed.), see. 585. (3) The repeal of ordinance number 22948, establishing a boulevard,. was not in violation of section 1 of article 6 of the city charter. St. Louis v. Christian Brothers College, 257 Mo. 541. (4) The question whether a highway shall be opened as a street or as a boulevard, is a question addressed to the legislative discretion of the city government, and is not subject to judicial review. St. Louis v. Brown, 155 Mo. 555.
   BROWN, C.

— This is a suit for the cancellation of certain special tax bills against the plaintiff’s land in the city of St. Louis, the apparent lien of which is alleged to be a cloud upon the title. The tax bills were issued .against seven parcels of land described in the petition, to the aggregate amount of $469.40, and are founded upon a special assessment of benefits to said land in a proceeding for the widening of Bircher Street from Euclid Avenue to Florissant Avenue in said city from 60 feet, its original width, to 200 feet, under ordinances which changed its name to King’s Etighway Northeast. None of the land fronted or bordered upon said street, which was outside the business district, and upon which there was little commercial traffic.

A general demurrer was sustained to the petition, and the plaintiff declined to plead further. Final judgment for defendant was entered, from which this appeal is taken.

The petition states, in addition to these general facts, that the defendant, by authority of a vote of the people of said city, duly authorized and issued its negotiable bonds in the sum of $500,000, to be exclusivély devoted to the establishing, opening and construction of King’s Highway Boulevard, to meet that portion of. the cost and expense which by law the defendant was required to pay, and that the proceeds of said bonds were paid into the treasury of tbe city. That thereupon the defendant ordained and passed a certain ordinance numbered 22,918, entitled, “An ordinance to change present Bireher Street from Euclid Avenue to Florissant Avenue into a boulevard, to be known as ‘King’s Highway Northeast,’ and to widen said boulevard, and to regulate the use of said boulevard, and to provide penalties for violating the provisions of this ordinance. ’ ’

Section one provided: “Bireher Street from Euclid Avenue to Florissant Avenue, in the city pf St. Louis, Missouri, is hereby changed into a boulevard to be known as ‘King’s Highway Northeast.’ ” Section two provided that said boulevard, “King’s Highway Northeast,” be widened to include certain parcels of land described, making its width 200 feet. It further provided that the present Bireher Street from Euclid Avenue to Marcus Avenue should be “a service roadway, for general lawful purposes of public travel,” and that from Marcus Avenue to Florissant Avenue there should be “service roadways 30 feet wide for general lawful purposes of public travel,” and “a pleasure driveway, separated from said service roadways by space for planting trees and shrubbery, and constructing sidewalks in a manner hereafter to be provided for by the Board of Public Improvements,” and that on the part of the boulevard restricted to pleasure driving, it should be unlawful to do or cause to be done any other than pleasure driving, or to use the same for certain general traffic set out at length in the ordinance. There were also other traffic restrictions unnecessary to mention.

It also stated that this ordinance was a part of a general scheme for the establishment of a boulevard extending northwardly and southwardly almost the entire length of the city. That although the proceeds of the sale of the $500,000 of bonds were lawfully applicable to the payment of the benefits which the defendant should be required to pay for the widening and opening of said King’s Highway as a boulevard and for no other purpose, a large part of it was used by defendant for other purposes and no portion 'was applied to the opening as a boulevard and widening of Bircher Street, although that was a part of the boulevard for the establishment and opening of which the said bonds were voted, issued and sold.

That the proceeds of the bonds having been exhausted without the expenditure of any .part thereof to pay the benefit assessment for which the city might be liable in the opening of that part of the King’s Highway Boulevard which included Bircher Street, the defendant city, for the purpose of raising the funds therefor by assessment against a benefit district to be formed for that purpose under the guise, of the subterfuge that this part of the King’s Highway Boulevard was a common street and not a boulevard within the meaning of its charter, passed on March 16, 1909, Ordinance No. 24,224, entitled, “An ordinance to repeal Ordinance Number Twenty-two Thousand Nine Hundred and Forty-eight, entitled, ‘An ordinance to change present Bircher Street from Euclid Avenue to Florissant Avenue into a boulevard, to be known as “Kingshighway Northeast,” and to widen said boulevard and to regulate the use of said boulevard, and to provide penalties for violating the provisions of this ordinance,’ approved March twenty-seven, nineteen hundred and seven, and to enact in lieu thereof, an ordinance to change the name of Bircher Street from Euclid Avenue to Florissant Avenue to ‘Kingshighway Northeast,’ and to establish, open and widen said Kingshighway Northeast from Euclid Avenue to Florissant Avenue.” The first section repealed the former ordinance and the second is as follows: “Bircher Street from Euclid Avenue to Florissant avenue is hereby changed to ‘Kingshighway Northeast.’ ”

Section three establishes the boundary of King’s Highway Northeast practically the same as the boulevard of the same name established by ordinance No. 22,948, and thereupon a proceeding was begun to condemn the land to be taken and establish the benefit-district upon which to assess the cost substantially as provided by the charter and ordinances of the city. The lands of plaintiff were included in this assessment. That the petition was sufficient in form and detail to present the questions which we shall notice in this opinion is not questioned by the parties in brief or argument.

I. The most important of these questions relates to the validity of the ordinance No. 24,224 under which this assessment is made. The city must look to its charter for its power to levy its tax, anc* abide by the limitations upon those powers which are therein expressed. It is presented in this case by the fact that the Legislature, in conferring upon it its charter powers, has authorized it to establish and open “boulevards” but has, in the same section (Sec. 1, art. 6), provided that the benefit district against which the cost of such opening may be assessed shall be limited to the property fronting or bordering on such' boulevard; while in cases of the opening of streets and alleys which do not come within the description of boulevards, the benefit district may include and the cost be levied upon other property in the neighborhood, as was done in this case. The plaintiff insists that his property is not subject to taxation for the establishment and opening of King’s Highway Northeast, because it is within the description of a boulevard, as used in the charter, and is consequently expressly excluded from the rule prescribed in case of those highways described in the same instrument as streets and avenues, in which the Legislature has prescribed another and totally inconsistent rule. It thus becomes the duty of the city to observe this distinction in substance as well as in name.

The word “boulevard,” in its descriptive sense, which is the sense in which it is used in the statute and with which we have to deal, is well understood, and implies a way designed for pleasure as well as for commercial intercommunication, and having the scenic features, which please rather than profit. Perhaps the definition we find in the New International Dictionary, “A broad avenue in or around a city, especially one decoratively laid out with trees, belts of turf, etc.,” is as expressive of its nature as anything that could be said. It is these aesthetic features which constitute the foundation of the special system of taxation applied by charter of the city of St. Louis. Their park-way features are especially available to those whose homes border them, while the scenic drive which they afford is available to the entire city as well as to those who reside a block away. Limitations imposed upon their commercial use make them less available in that respect to those who reside or do business in the neighborhood outside their immediate vicinity than ordinary well improved streets. For these and perhaps other reasons as good the Legislature has seen fit to impose the cost of establishing and opening them upon the adjoining owners and the city at large, and to exempt property which, like that of the plaintiff, receives little benefit from their establishment and maintenance. The Legislature has made the distinction, in the exercise of its constitutional powers and we can only inquire of its motives to aid us, when in doubt, to interpret its language. If, under the ordinance No. 24,224, King’s Highway Northeast is a “boulevard” within the legislative meaning of the word the city had no power to tax the land of plaintiff to pay the cost of opening it, for that power was not only withheld in the charter, hut its exercise was expressly forbidden. In considering the question we must remember that we have to do with things rather than with names, for the Legislature is as powerless to impose such an assessment for the opening of a boulevard by naming it a street as it would be to impose a special tax for a cemetery by naming it a park. The charter provision rests upon the thing itself and it cannot be disobeyed by the mere manipulation of the nomenclature in which its commands are expressed.

The petition avers that King’s Highway Northeast, while called in the ordinance a street, is in fact a boulevard, and that calling it a street is a mere subterfuge adopted by the Municipal Assembly for the purpose of evading the charter and gives several particulars which, in the opinion of the pleader, supports the general charge. It states, ■ in substance, that Bircher Street lay entirely outside the business portion of the city, and that it needed no widening to accommodate its traffic. To show that this was the opinion of the Municipal Assembly it cites the ordinance changing it to a boulevard, which devoted all the space outside its present width for purposes of ornamentation and pleasure, and made it a part of a general scheme for a park-way through the greater portion of an extensive and populous city. It then charges an interval of two years, during which the fund provided to meet the city’s portion of the cost of acquiring the additional lands expressly devoted to a pleasure drive-way and scenic features had become exhausted and the adoption of the present plan for acquiring the same land for the same ultimate purpose, by a fund to be raised by taxation upon the plaintiff’s land and that of others similarly situated. After this should be done the power of the Municipal Assembly to return it to the status of a boulevard and to provide for its improvement and use as such is ample and unquestioned. That the petition charges' that the additional land for which the plaintiff is called upon to assist in paying is not needed for any public use for which his land could be lawfully assessed, and that the proceeding, including the repealing ordinance, is a subterfuge to compel him and those whose lands are similarly situated to contribute the greater part of the cost of establishing and opening a boulevard, is plain, and is sufficient,to put the city to its defense upon the facts, unless- the plaintiff is foreclosed by the judgment of the circuit court in the condemnation suit in which the benefits were assessed against his land.

II. Looking at the section of the charter to which we have already referred, we observe that the proceeding in which this tax was assessed is dual in its character. Its primary and principal object is the condemnation of lands necessary to the opening of the street. For this purpose the court must proceed to obtain jurisdiction of the owners according to its uniform practice as prescribed by statute. Incidentally the benefits to lands not taken” are assessed in the same proceeding.- No process is issued out of the court for this purpose, but five days’ notice is given by the city counselor by publication that benefits to lands situated within certain limits will be assessed by the, commissioners on a day named. This is required, by ordinance, and not by any statute of the State, nor is it under the control of the court -in which the proceeding is pending. That this should constitute the foundation for a valid and final judgment at law fixing a lien upon the land of the o'wner is inconceivable, while it is easy to understand that it might well constitute the foundation for the valid assessment of a tax subject to the universal rule that its validity must depend upon the legislative power upon which it rests, and if there be a fair and reasonable doubt as to the existence of such power it must be resolved in favor*, of the taxpayer and against the municipality claiming it. This principle has lately been stated by this court with citations of its previous decisions which render their repetition unnecessary. [St. Louis v. Realty Co., 259 Mo. 126, l. c. 136.] In the appropriation to the public use, and the. assessment of the compensation and damages therefor, the court proceeds by regular judicial process, along the well defined lines of its constitutional jurisdiction “as to matters of .law and equity,” while in levying a special tax upon property to be benefited, to pay the amount of compensation and damages ascertained and awarded, it acts as an agency of the State in the exercise of the power of municipal taxation. [St. Louis v. Brinckwirth, 204 Mo. 280, l. c. 297-8; St. Louis v. Calhoun, 222 Mo. 44, l. c. 53; Jefferson City v. Wells, 263 Mo. 231.] This case furnishes an excellent illustration of the nature of this power. The court proceeds without process. Instead, the agent of the taxing municipality publishes a general notice of the most formal character, and upon the expiration o.f the time named in it goes to the court and asks its assistance through its commissioners, in assessing the tax. Under these circumstances it is natural that the Legislature should realize that the participation of a court of general jurisdiction in the proceeding might mislead as to the effect of the judgment, which it evidently did, and expressly declared its effect in the same section which authorized it. , It provides: “The sums to be paid by the owners of property especially benefited by the improvement, as ascertained by the commissioners, shall, when the report of the commissioners shall be confirmed by the court, as hereinafter provided, be prima-facie evidence of the liability of the property charged therewith to the extent and amount therein specified, and shall be and remain until paid, a lien from the date of the final judgment of the circuit court on the property so charged, and shall be collected as, provided by ordinance.” [Charter, art. 6, sec. 5.] The liability of the property to the assessment, that is to say, whether it comes within the description of property which may be charged with the cost of the land involved in the proceeding, including damages to land not taken, is the foundation of the right of the commissioners of the court to assess it, and the final judgment of the court is, as it should be, only prima-facie evidence of that liability. Prima-facie evidence means evidence that may be rebutted, and the object of the plaintiff in this suit is to attempt to rebut it by proof that his land does not come within that class.

III. It is suggested that the view we have taken is at variance with the decision of this court in St. Louis v. Christian Brothers College, 257 Mo. 541. The only question before the court and decided in that case was whether or not an ordinance establishing a boulevard could, before any proceeding had been taken , under it, be repealed without the written consent of persons owning two-thirds of the abutting land, and the point was decided in' the affirmative. "We are still satisfied with that result. "We are now deciding that in opening a boulevard, by whatever name it may be designated, the assessment of benefits to pay for land taken, and the damages to land not taken, must conform to the requirements of the charter with respect to the lands subject to assessment for that purpose, and that the averments of the petition are sufficient, as against a general demurrer, to present the question in this case.

The judgment of the circuit court is reversed and the cause remanded for further proceedings.

Railey, C., concurs.

PER CURIAM.

— The foregoing opinion of Brown, C., is adopted as the opinion of the court

All the judges concur.


source: Caselaw Access Project

author: BOND, J.

license: Public Domain

text:
    WEBER IMPLEMENT COMPANY, Appellant, v. ACME HARVESTING MACHINE COMPANY.
    Division One,
    July 3, 1916.
    1. REFEREE: Findings of Fact: Appeal. Where the case is neither an equitable suit nor one wherein a reference of the issues would have been compulsory under the statute, the findings of fact by the referee, if supported by any substantial evidence, are conclusive on appeal.
    2. -: -: No Appeal from Finding. The failure of the defendant, who the referee found had breached its contract, to appeal from the judgment of the trial court affirming the referee’s findings of fact, closes the door to any reinvestigation of the facts at its instance.
    3. BREACH OF CONTRACT: Damages: Loss of Profits. Damages for a breach of a contract are such as may fairly and reasonably be considered as arising either naturally (that is, according to the usual course of things) from such breach itself, or such as may reasonably be supposed to have been in contemplation at the time they made the contract, as the probable result of the breach. Thi.: rule does not include speculative profits or accidental or consequential losses, or losses of a fancied good bargain. It includes proximately caused or reasonably contemplated losses, and excludes the problematical profits of future bargains.
    4. -: -: -: Consummated Sales. Where a manufacturing company agreed to make and furnish to a wholesale jobber one thousand mowing machines of a certain brand, to be resold to users, and breached the contract, it is liable to the jobber for profits lost on so many of the machines as were actually sold by the wholesaler to his vendees, which it refused to deliver, but not for profits the wholesaler might have made on so many of the machines as were not sold or contracted for sale by him.
    5. -: -: —--: -: Duty to Minimize Loss. It is the duty of the party injured by a breach of a contract to take reasonable steps to minimize the loss; but it is not such party’s duty to alter the terms of his agreement for that purpose in the circumstances shown in this case.

      Appeal from Jackson Circuit Court. — Eon. O. A. Lucas, Judge.
    Reversed and' remanded (with directions).

      Morton Jourdan and Sparrow, Page & Rea for appellant.
    (1) The trial court was wrong in holding that profits are not recoverable and that appellant was only entitled to recover nominal damages. We recognize the well established general rule to be, as stated by the courts, that on failure of the vendor tó deliver goods according to contract, the ordinary measure of damages is the difference between the contract price and the market value of the goods at the time when, and the place where, they should have been delivered; but the courts recognize an exception to this rule, and it is this exception that is applicable to the facts of this case. Appellant sues here for special or consequential damages. If under the facts of a particular case, the difference between the contract price and the market value at the time and place of delivery of the goods, will compensate the injured party, the general rule above quoted should be, and is, applied by the courts; but what about the case, under the facts of which the difference between the contract price and the market value at time and place of delivery will not compensate the injured party? Such is the case at bar. This is not a case where appellant could have gone into the open market and bought the goods contracted for and the referee so found. These machines were not manufactured by anyone but respondent. Appellant tried to get them elsewhere, but was unable to do so. It is in such a case that the exception to the general rule applies. The profits which appellant expected to realize from a resale of these machines being that which induced it to enter into the contract of purchase with respondent, it is absurd to say that after respondent has violated its contract and refused to deliver the mowers, appellant can be reimbursed for any loss sustained by it by the difference in contract price of mowers and their market value at time and place of delivery. These profits were within the contemplation of the parties at the time the contract was entered into, and became therefore part and parcel of it. Respondent knew that appellant was purchasing these mowers for the purpose of resale. It knew that appellant expected to sell them at a profit. Knowing this fact, it also knew that if it failed to deliver the mowers, appellant would be deprived of the profits at which it not only expected to sell, but could and would have sold them, if delivered. Chalice v. Witte, 81 Mo. App. 92; Hadley v. Baxendale, 9 Exch. 341; Hammond v. Beeson, 112 Mo. 190; Lumber Co. v. Warner, 93 Mo. 374; Crescent Mfg. Co. v. .Nelson Mfg. Co., 100 Mo. .336. (2) Appellant in any event, is entitled to recover $1828.50, the amount of its lost profits on the 230 machines which it had actually sold at the time of respondent’s breach of its contract.

      New, Kennish & Krauthoff, Maurice H. Winger, Arthur Miller and P. E. Reeder for respondent.
    (1) Appellant under its amended petition was only entitled to nominal damages. Wall v. Ice Co., 112 ÍMo. App. 666; Northrup v. Cook, 39 Mo. 208; Warren v. Maher Mfg. .Co., 161 Mo. 124; Griffith v. Kansas City Co., 46 Mo. App. 539; Van Stone v. Hopkins, 49 Mo. App. 386; Cobb v. Whitsett, 51 Mo. App.'146; Bush v. Fisher, 85 Mo. App. 1; Halliday v. Lesh, 85 Mo. App. 285. Counsel attempts to evade the effect of the rule by claiming that appellant is suing for “special or consequential” damages; in other words, special damages, or profits which it would have made by a re-sale of the mowers in question. One insurmountable objection to this claim of appellant is that it does not plead any special facts or circumstances in the amended petition entitling it to the special damages contended for. Wilson v. Russer, 91 Mo. App. 275. (2) Appellant was not entitled to recover as its damages the probable profits it might have realized from a resale of the mowers. Gill v. Johnson, 84 Mo. App. 456; Bush v. Fisher, 85 Mo. App. 1; Halliday v. Lesh, 85 Mo. App. 285. (3) There was no competent' proof whatsoever to sustain the finding of the referee that appellant would have received a profit of $1,828.50, or any other definite amount. Doyle v. Turpin, 57 Mo. App. 84; Murphy v. St. Louis, 8 Mo. App. 483; Bersch v. Sander, 37 Mo. 104; Billups v. Daggs, 38 Mo. App. 367; Bean v. Miller, 69 Mo. 384.
   OPINION.

I.

BOND, J.

— This cause was appealed to the Kansas City Court of Appeals and transferred to this court for the reason that the amount involved exceeded the jurisdiction of that court.

The plaintiff, the Weber Implement Company, a Missouri corporation located at St. Louis, Missouri, and doing a jobbing business in farm machinery, on November 7, 1905, entered into a written contract with defendant, the Acme Harvesting Machine Company, an Illinois corporation, manufacturing farm machinery at Peoria, Illinois, whereby the latter agreed to manufacture certain mowing machines to be specially branded “Koenig Buckeye,” and the former agreed to purchase same at specified prices and dates of delivery during the years of 1906, 1907 and 1908.

By said contract it was agreed that pláintiff should order one thousand of the above mowers yearly, which were to he manufactured and ready for shipment not later than May first of each year.

In the clause setting out the manner and time of payment, the plaintiff agreed, upon receipt of a shipment of. mowers, to execute notes, without interest before maturity, payable one-third September tenth, one-third October tenth and the final third on November tenth, of each year, and which should be subject to a discount of three per cent for cash, if paid by July first of that year.

Defendant did not manufacture, nor did plaintiff receive, the specified number of mowing machines during the year 1906 and 1907; but there is no controversy here as to the damages growing out of the failure in this regard, for plaintiff limits its demand to a recovery of such damages as it sustained by reason of the failure to manufacture and deliver the one thousand machines covered by the contract for the third year, 1908.

On November 25, 1907, defendant wrote plaintiff, declining to furnish any of the thousand mowers which it had agreed to furnish during 1908, claiming that the contract of November 7, 1905, had been mutually abandoned and a new or modified contract entered into under date of October 12, 1907, and that plaintiff had violated the terms of the latter contract. Plaintiff insisted that the contract of November 7, 1905, had not been abandoned or modified, and instituted this action to recover damages in the sum of $7940, sustained by reason of defendant’s failure to manufacture and deliver the thousand mowers during the year 1908.

Plaintiff also alleged in its petition that it had suffered a further loss because of defendant’s breach of its contract in being prevented from making profits on the sale of kindred goods which of necessity would have been used with said mowers, including extras, repairs, fixtures, etc., and which would reasonably have amounted to the sum of $5250.

Defendant’s answer contained two counts, the first averring that the contract of November 7, 1905, had been abrogated and a new or modified contract entered into and that plaintiff had violated the latter contract, thereby releasing defendant from any liability. The second count was a counterclaim in which it was alleged the contract of 1905 had been abandoned; that plaintiff had violated the terms of this new contract, and as the result thereof defendant had been damaged in the sum of $15,093. In its last amended answer this counterclaim was abandoned and no evidence was offered in support of it.

By agreement of the parties the cause was referred to Judge Henry C. Tim monds to hear and report- on the facts and the law.

The referee thus stated the issues:

“The pleadings admit the execution of the contract of November 7, 1905, but they present the following primary issues:
“1. Was said contract mutually abandoned and a new or modified contract entered into in lieu thereof as alleged in defendant’s answer?
“2." Did defendant violate the contract of November 7th, as alleged in plaintiff’s ^petition?”

He then found as a fact:

“That the contract of November 7, 1905, wars not mutually abandoned and that no new contract was entered into in lieu thereof.
“That the defendant violated and broke said contract of November 7, 1905.”

On the question of damages the referee found that on November 25, 1907, defendant violated its contract by announcing to plaintiff its refusal to deliver any of the thousand mowers in 1908, but that defendant manifested a disposition to assist plaintiff in filling any reasonable orders it might have taken up to that time, and proposed to furnish the required number of mowers and shipping directions at once. The referee also held that, as a matter of law, it was plaintiff’s duty to have accepted this offer, notwithstanding the fact that the contract itself provided that said machines were to be sold on credit. The referee then found the loss at $1828.50, being what plaintiff would, have profited on the contemplated resale of two hundred and thirty inow’ers which defendant’s default prevented, and reduced it to the sum of $399.10, the difference being the amount plaintiff could have saved had it accepted defendant’s proposition to fill certain orders for cash.

Plaintiff filed its exceptions to the report of the' referee, and on, the' hearing' of these exceptions the trial court approved the referee’s findings of fact, but disapproved his conclusions of law and rendered judgment in favor of plaintiff for one dollar.

Plaintiff, after unavailing motions for new trial and in arrest of judgment, brings this cause here for review.

II. This being neither an equitable action nor one wherein a reference of the issues would have been compulsory under the statute (Reed v. Young, 248 Mo. l. c. 613, and cases cited), the findings °f facf by t^-e referee> if supported by any substantial evidence, are conclusive on ap peal. Moreover, the refusal of the respondent (defendant below) to appeal from the judgment of the trial court affirming the verdict of the referee on the issues of fact, closes the door to any re-investigation of the facts at the instance of respondent. This confines the inquiry on the present appeal to the errors asr signed by appellant (plaintiff below).

Appellant claims that under the issues and proofs, it was entitled to recover: First, for loss' of profits of a probable resale of tbe whole one thousand mowers which respondent failed to deliver in the year 1908; second, that in any event it was entitled to loss of profits on two hundred and thirty mowers which it had contracted to resell during that year, but was unable to deliver because of respondent’s breach of its contract to supply them. These questions will be determined in order.

III. The principle upon which profits prevented by a breach of a contract are recoverable, took root in the case-law of England and America, in a decision 1854 (Hadley v. Baxendale, 9 Exch. 1. c. 353) where it was said:

“Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, I. e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it.”

Shortly following (1859) in Smeed v. Foord (1 El. & El. l. c. 613, 120 Eng. Rep. Reprint, l. c. 1039), it appeared that a farmer was delayed in threshing his wheat by the failure of the promisor to deliver a threshing machine on a fixed date. In consequence of the delay the stacked wheat was substantially injured by rain. There was a verdict for five hundred pounds. The court (Lord Campbell, Chief Justice) discharged a rule on the plaintiff to show cause why the judgment should not be reduced and affirmed the full recovery for the reason that the case was governed by the ruling of Hadley v. Baxendale, supra, which he said, was “in accordance with the Code Napoleon, with Pothier, with Chancellor Kent and with all other authorities.” This observation of Lord Campbell was quoted by tbe Supreme Court of Maine (Virgin, J.) in Grindle v. Eastern Express, 67 Me. l. c. 322 et seq., citing the authorities supporting the statement and also adopting the ruling in Hadley v. Baxendale, which has now become the accepted statement of the law in America (8 R. C. L. 455, sec. 25, and cases cited) where. it had been previously announced by the learned author of the Commentaries on American Law, in his note to #page 480 (12 Ed.) in the following terms:

■ “Damages for breaches of contract are only those which are incidental to, and directly caused by, the breach, and may reasonably be supposed to have entered into the contemplation of the parties, and not speculative profits or accidental or consequential losses, or the loss of-a fancied good bargain.”

This is a perfect legal and logical statement of the principle governing breaches of contract and is a moral imperative in every ease embraced within its terms. It was only paraphrased in the case of Hadley v. Baxendale, supra, and limits the reach of redress, on the breach of the contract, to the proximately caused or reasonably contemplated losses and excludes the problematical profits of future bargains. Hence there is no merit in appellant’s first assignment of error.

In the matter in hand the contract contemplated resales by the jobbing-purchaser of the products agreed to be manufactured and delivered to it, and for that purpose a fixed time was prescribed within which the articles should be ready for delivery to the purchaser in order that it might turn them over in the performance of agreements for resales to the users of the machines. It was further agreed by the parties that such anticipatory resales by the buyer might be consummated through the delivery of the mowers by a direct shipment from the manufacturing plant in Peoria to the sub-vendees. This and the further fact that the payments were postponed so as,to allow the original purchaser to make them after having made delivery under resales, are sufficient to have apprised respondent of the specific object and purpose of the contract made with it for the supplial of machines of a particular kind. Hence it was impossible for the respondent to have been unaware that the mowers it agreed to manufacture were to be resold by the buyer on the faith of its agreement to manufacture and deliver them to the order and direction of the appellant. Evidently it was in the minds of the parties so contracting that a breach of the promise to deliver on the fixed date would entail a loss on the purchaser of all profits on all resales actually made by it in the meantime, and the learned referee correctly stated the law, on the facts showing a resale of two hundred and thirty mowers made by the appellant in reliance on the agreement of the respondent that a thousand would be delivered on or before May 1, 1908. The facts bring this transaction clearly within the ruling made in Hadley v. Baxendale, supra.

The record shows and the referee found that the net profit which appellant would have received on such resales would have been $1828.50; and in this sum judgment should have been recommended by the referee in favor of appellant.

While admitting that this was the measure of appellant’s damages, the referee deducted therefrom an amount by which appellant could have lessened the loss to itself, if it had accepted a new contract proffered by respondent when it refused to carry out its original agreement for the year 1908. This was error.

It is the unquestioned law that it is the duty of a party injured by the breach of a contract or by a' tort, to take reasonable steps to minimize the loss; but the rule has never been carried, in any well considered case, to the extent of requiring such party to alter its agreement under circumstances like those in the present case, which disclose that it did not have the pecuniary ability to make the cash payment prescribed by the delinquent party ; and- under the further circumstances that the article whose delivery was omitted, was not a commodity which could be purchased under its trade name in the marts of the country.

In the final analysis of this transaction, it is clear that the terms of their contract and the conduct of the parties performing it, necessarily informed them the direct consequence of a failure to deliver the “Koenig Buckeye” mowing machines on time, would be the infliction of a loss of whatever profits were re-' alizable on an intervening sale by the buyer. . This loss was not lessenable as to this particular product under the facts of this record and the findings of the referee, which were only in fault as to that conclusion.

The judgment is, therefore, reversed and the cause remanded, with directions to the trial court to enter a judgment in favor of the appellant for $1828.-50, bein¿ the profits actually prevented by respondent’s breach of its contract.

All concur, Woodson, J., result.


author: GRAVES, P. J.

text:
    NELLIE FAY v. ÆTNA LIFE INSURANCE COMPANY, Appellant.
    Division One,
    July 3, 1916.
    1. ACCIDENT INSURANCE: Passenger. If the insured would be classified as a passenger in an action against the carrier, he should likewise be deemed a passenger under the terms of an accident policy, unless it by its terms restricts the conditions.

      2. -: -: On Street Car. The plaintiff’s evidence showed that the insured had gone up the steps and through the station of a street railway company and when the street car stopped at the usual place and before it started he was in the act of stepping upon the steps thereof to become a passenger thereon, hut whilst he was on the steps or partially oh the steps the conductor closed the door (previously open) and gave the signal for the car to go forward, and it did go forward with the insured clinging to the handhold, one foot on the step, and so continued until he was mocked off by a structure on the side of the track. For defendant there was much evidence to the effect that the insured ran and tried to board a moving car after the door through which passengers were admitted had been closed. Held, that the evidence for plaintiff, if true, made the insured a passenger under an accident insurance policy promising double-indemnity if the injuries were sustained “while the insured is a passenger in or on a public conveyance provided by a common carrier for passenger service (including platform, steps or running hoard of railways or street railway cars),” and the credibility of the testimony was for the jury.
    3. -: -: Instruction: As Between Insured and Railway: As Between Insured and Insurance Company. An instruction which tells the jury that if the insured, “with the intention in good faith to become a passenger, had gone up the steps and through the station before the doors of said car were closed, and before said car had started he was in the ret of stepping upon the steps of said car to become a passenger, then he was a passenger on said ear,” stated the acts necessary to make the insured a passenger as between him and the railway company. And the next clause telling the jury that if the “insured was a passenger as above defined and had actually gotten onto the steps of said car and was standing thereon when he was caused to fall therefrom and to be killed by falling from said steps” then he “was a passenger on said car within the meaning of the terms of said insurance policy,” stated the necessary facts to make insured a passenger as between him and the insurance company under an accident policy which promised double indemnity if the injuries were sustained “while the insured is a passenger in or on a public conveyance provided by a common carrier for passenger service,” etc. And, so viewed, the two clauses are r\ot contradictory or misleading.
    4. -: Vexatious Delay: Separate Issue: Evidence Confined to Main Issue. Under the statute a plaintiff in an action on an insurance policy, if he desires to recover damages for vexatious delay, must have in his petition allegations showing that he is entitled to those damages, and these allegations then become a triable issue, and being such any evidence that tends to prove that issue is competent, whether such evidence tends to prove the main issue or not; and if there is sufficient evidence to support that issue, plaintiff is entitled to recover separate damages for such vexatious refusal to pay but only when he recovers on the policy. But evidence on that issue cannot be confined to matters and things which would tend to show defendant’s liability for the principal sum of the policy.
    5. -: -: Competent Evidence: After Plea of Release Withdrawn. Defendant, after pleading that the beneficiary had for a valuable consideration released it of all liability on the insurance policy and plaintiff has replied charging that said release was fraudulently obtained and asking for damages and attorney’s fees for vexatious delay, cannot avoid the introduction of competent evidence showing the vexatious delay, even if it tends to establish the charge of fraud, by withdrawing its answer and filing another from which all pleas of settlement and release are omitted.
    6. -: -: -: Fraudulent Release. Evidence that the defendant insurance company purposely delayed the payment of one half of th,e insurance policy by fraudulently procuring a release of the other half, is competent evidence on the issue, of vexatious delay.
    7. -: -: -: Inquiry from Railway Witnesses. In a suit on an accident insurance poli ;y for double indemnity on the ground that the insured was a passenger on a street railway o'", evidence that defendant went to the railway company to get the facts as to whether the insured was a passenger at the time he fell from the steps of the ear in the act of boarding it, and that that company husbanded the witnesses who would testify to facts showing that such relation did not exist, is competent evidence to establish vexatious delay, since, before refusing to pay, defendant should have made a fair investigation and not confined it to such facts as these witnesses might give.
    Appeal from Jackson Circnit Court. — Hon. William G. Thomas, Judge.
    Affirmed.

      J. C. Rosenberger, Rollin E. Talbert and F. R. Wolfers for appellant.
    (1) By the terms of the policy the relation of passenger and carrier must have existed to entitle plaintiff to double benefits and tbe insured, having at imminent risk of his life attempted to board this elevated ear after the carrier had closed the door and started the car and after the carrier had thereby signified that no passengers would be accepted, could not thereby make himself a passenger and plaintiff was not entitled to recover. Schepers v. Depot Co., 126 Mo. App. 665; Mathews v. Metropolitan, 156 Mo. App; 715; Anable v. Casualty Co., 73 N. J. L. 320, 74 N. J. L. 686; Wallace v Liability Co., 26 Ont. L. 10; Banta v. Casualty Co., 134 Mo. App. 222; Over-beck v. Insurance Co., 94 Mo. App. 453; Life Ins. Co. v. Vandecar, 86 Fed. 282. (2) See. 7086, R. S. 1909, providing penalties against insurance companies in certain cases is highly penal and should, be strictly construed. Shoe Co. v. Assurance Co., 178 S. W. 246; Mears Mining Co. v. Casualty Co., 162 Mo. App. 193; Casualty Co. v. Dorrough, 107 Fed. 393; Insurance Co. v. Ford, 131 S. W. 306; Insurance Co. v. Stancell, 127 S. W. (Ark.) 968. (3) By the terms of the statute the company cannot be penalized unless “it appear from the evidence” that the company “vexatiously refused to pay” and the company’s refusal, to be “vexatious,” must be “without reasonable or probable cause” for making a defense. The production by the company of substantial evidence to sustain its defense was a complete vindication of its good faith. Sec. 7068,' R. S. 1909; Blackwell v. Insurance Co., 80 Mo. App. 78; Weston v. Insurance Co., 191 Mo. App. 282; Rogers v. Insurance Co., 157 Mo. App. 671; Shoe Co. v. Assurance Co., 178 S. W. 246; Insurance Co. v. Sheppard, 85 Ga. 764. (4) The statute is aimed at frivolous defenses against just claims and not against companies which resort to the courts to protect themselves from claims against which they may have an honest and substantial defense. Authorities supra. (5) Where there is no evidence entitling plaintiff to recover the insurance or where the evidence on the merits greatly preponderates in favor of the company, the question of penalties is out of the case, and the trial'court should not submit such question to the jury. Shoe Co. v. Assurance Co., 178 S. W. 246; Rogers v. Insurance Co., 157 Mo. App. 671; Weston v. Insurance Co., 191 Mo. App. .282; Insurance Co. v. Sheppard, 85 Ga. 764; Renfro v. Insurance Co., 148 Mo. App. 258; Kahn v. Insurance Co., 187 Mo. App. 219. (6) The whole test of the good faith of the company’s refusal is the strength or weakness of its case as presented at the trial and it is erroneous to receive extrinsic and collateral evidence disconnected with the merits, directed solely to the issue of vexatious refusal. This is mere “side-wind evidence” preventing a fair trial. Insurance Co. v. Sheppard, 85 Ga. 764; Waddle v. Insurance Co., 184 Mo. App. 576; and authorities supra. (7) The court by receiving illegal, extrinsic and collateral evidence offered under the guise of proving vexatious refusal to pay frustrated a fair trial and enabled plaintiff to collect insurance to which she was not entitled, and a penalty besides. Insurance Co. v. Sheppard, 85 Ga. 764; and authorities supra. (8) The erroneous reception in evidence of the ex parte affidavits contained in the proofs of death' also the abandoned answer and motion of defendant, which were part of the court files, also the plaintiff’s release and the circumstances of its execution, and in permitting plaintiff ’s attorney to make wholesale and unfounded charges of fraud and bad faith created such atmosphere of hostility toward the defendant as to destroy its defense and prevent a fair trial, and was the procuring cause of the verdict in its entirety. The reception of such collateral and extrinsic evidence was a great abuse and perversion of the statute in question and was error. Insurance Co. v. Sheppard, 85 Ga. 764; Waddle v. Insurance Co., 184 Mo. App. 576. (9) It is error to receive in evidence court files in the cause as evidence of bad faith on the part of .the company. Waddle v. Insurance Co., 184 Mo. App. 576. (10) The withdrawal of the release as a defense by the filing of amended pleadings had no tendency to prove that defendant did not have a g’ood and valid defense, and it was error to receive in evidence said court files for any such*purpose. Authorities above. (11) The court erred in giving Instruction No. 2 for the plaintiff. Anable v. Casualty Co., 73 N. J. L. 320, 74 N. J. L. 686.

      T. J. Madden and Bird & Pope for respondent.
   GRAVES, P. J.

— Plaintiff is the widow of William H. Pay, deceased. Defendant issued to Pay an accident insurance policy on January 17, 1907. This policy was for $5000 and issued for one year, but was kept in force to the time of Pay’s accidental death, January 10, 1912, by annual renewals thereof. The policy provided for accumulations, and by a “rider” or subsequent agreement entered into by the company, at the date of Pay’s death the policy would and did amount to $7500.

The policy was payable to plaintiff, and for the accidental death of her husband, she under the terms of the policy as modified by this subsequent agreement or rider of date February 12, 1907, was entitled to $7500. In this policy was a double liability clause, which entitled plaintiff to recover double the amount, if Pay was accidentally killed whilst a passenger “in or on any railway passenger ear propelled by mechanical power.” This clause as originally found said nothing about a passenger riding upon the steps or platform of a car. The defendant, still bidding for business, in June 1910, broadened this double liability clause of its contract, so that thereafter the policy of Pay had incorporated therein the following:

“Double Indemnities.
“7. If such injuries are sustained by means as aforesaid while the insured is a passenger in or on a public conveyance provided by a common carrier for passenger service (including platform, steps or running-board of railway or street railway cars), . . . the amount to be paid under sections 1, 5 and 6 should be double the sum otherwise payable for such injuries.”

So that, in the language of the distinguished counsel for appellant, as found in the brief:

“On January 10, 1912, the date of insured’s death, the amount of his policy had increased from $5000 to $7500 through continuous renewal, in case •of his death from ordinary accident, and to $15,000 in case the injuries were sustained by him ‘while the insured is a passenger in or on a public conveyance provided by a common carrier for passenger service, including platform, steps or running-board of railway or street railway cars.’ ”

This amendment to the original policy (in insurance language calléd a “rider”) was not found by Mrs. Pay when she came to adjust the matter with defendant. It was not with the policy, but was afterward found in some of Mr. Pay’s private papers at his office. Mrs. Pay,1 through her counsel, settled with defendant for $7500, and gave defendant a receipt in full for all liability, without the knowledge of the existence of this supplemental agreement, or rider of June, 1910, by which the terms of the policy were amended as aforesaid. Shortly after the settlement this rider or amendment to the policy was discovered, and plaintiff demanded of defendant the additional sum of $7500, on the theory that deceased was a passenger upon the steps of a Metropolitan Street Railway car at the time of his accidental death. The defendant declined to pay this additional sum, and the instant suit followed. It should be noted that this change in the double liability clause, as above indicated, was ■ one being made on policies generally by defendant, and defendant bad full knowledge of this amendment to the policy, when it settled with Mrs. Fay for $7500.

The course of the pleadings may be of importance. Counsel for appellant has thus described the various steps in the pleadings, before issue wak finally made:

“In her petition (1) plaintiff pleads the provisions of the double-indemnity clause which limits its benefits to accidental injuries sustained ‘while the insured is a passenger’ and alleges (2) that William H. Fay was accidentally killed by falling from a street railway car of the Kansas City .Elevated Railway Company ‘on which be was a passenger;’ (3) alleges that thereby the company became liable to her for $15,000 ‘but said defendant instead of paying to this plaintiff the sum of $15,000, to which she was entitled, paid her only the sum of $7500, instead of said full amount of $15,000.’ ”

To this petition, defendant pleaded in bar of plaintiff’s action, the settlement and release executed by her in consideration of $7500, and as a further defense denied that Fay, the insured, was a passenger on the street car or that the plaintiff was entitled to any double indemnity or that defendant was in any way indebted to the plaintiff.

Thereupon plaintiff filed an amended petition with substantially the same allegations, but adding the allegation that “defendant has vexatiously refused to pay .the additional sum of $7500 to this plaintiff,” and prays judgment for $7500 and interest, and als® for $750 damages as a penalty for said vexatious refusal of defendant to pay plaintiff said $7500, and. for the further sum of $2500 as attorney’s fees.

To this petition defendant filed its former answer.

Thereupon, plaintiff filed her reply charging in general terms that the release had been obtained by fraud, making free use of the words “fraud” and “fraudulent,” but setting forth no facts from which fraud could be inferred. The gist .of these allegations is that at the time the company paid Mrs. Pay the $7500 s.h'e did not know she was entitled, as she claims, to $15,000, but that “defendant did know this and fraudulently concealed said fact.” In her reply, plaintiff also offered to return to the defendant the sum of $7500 received by her, said offer being set forth in the reply as follows:

“The plaintiff here now offers and tenders to said defendant said sum of $7500 alleged as such full satisfaction and discharge of plaintiff’s said claim and demand, as set forth in said second amended petition herein, and offers to comply with any order of the court with reference thereto.”

Plaintiff did not, however, with her reply making offer of restitution, pay the money into the court ór tender it to' the defendant, or do anything else to make her offer good.

Accordingly, on September 13, 1912, defendant filed in the court its formal motion in which it accepted plaintiff’s offer to rescind the release and to return the $7500 and praying that an order be made requiring plaintiff tó make good her offer by paying said $7500 into court, otherwise that her petition be stricken from the files. Defendant’s motion last above referred to was overruled by the court on November 9, 1912, and it took a term bill of exceptions.

Later on December 10th, the defendant filed an amended answer in which it formally of record withdrew its plea of settlement and release and narrowed the controversy down to the single issue as to whether or not Pay at the time he was injured was a passenger on the car, and therefore, whether she was entitled to the single indemnity of $7500 already admittedly paid to plaintiff, or whether she was entitled to a further payment of $7500 hy way of the double indemnity.

The company, by this answer, in effect expressed its willingness to litigate with Mrs. Fay her right to recover the additional $7500, notwithstanding defendant had already paid her $7500 in full settlement and although she had executed a release fully discharging the company, so that- she was thereby restored to her original cause of action, while at the same time retaining the fruits of the settlement.

But the plaintiff ,was not to be denied in her charges of fraud; although the release had been withdrawn as a defense by the amended answer and was no longer being pleaded as a defense, plaintiff filed a reply renewing the charge that defendant had procured*the release by fraud. '

This reply was filed after the trial began and under it and over defendant’s objections the court allowed plaintiff to introduce evidence in the effort to support such charges of fraud in the release, although no such issue was properly in the case. The court ruling:

“I .think, Mr. Rosenberger, that the character of the. testimony referred to, would be admissible under the reply which was filed in this case.”

And in arguing for the reception of this class of evidence plaintiff’s counsel said:

“The object and purpose of this testimony is to show the vexatious conduct of this defendant in refusing to pay this woman^s claim.”
“Fruitless objections were made throughout by defendant to the reception of this class of evidence and proper exceptions saved.”

We quote the foregoing, because it is a short and concise statement of the steps taken to get this case to an issue. The argumentative part of the statement as to the substance of the allegations of fraud, need not be strictly taken. On this the reply will best speak. Plaintiff obtained the following verdict:

“We the undersigned jurors, find the issues in' favor of the plaintiff and assess the amount of her recovery under said policy the sum of $7500 and $337.50 interest, and also assess the amount of $1250 as attorneys'’ fees.” (Here follow the signatures of ten jurors.)

From a judgment entered upon- such verdict, the defendant has appealed.

I. Defendant first insists upon its demurrer to the testimony, as we gather the contentions made. As the issues were finally made, the sole question on the merits of, the case was whether or not the deceased was a passenger upon the street car at the time of the fatal accident. This question turns upon the facts.

The sole question of fact was whether or not the deceased was boarding a street car before the car started, and whilst the door was yet open for the admission of passengers. The evidence for plaintiff tended to show that the car stopped at the usual place for the passengers to alight from such car, and to get on said car. That whilst the car was in this position, the deceased attempted to enter such car, but whilst he was on the step or partially on the step, the conductor closed the door (previously standing open) and gave the signal for the bar to go forward, and it did go forward, with deceased clinging to the handholds, with foot on step, until he was knocked to the street below by a structure on the side of the tracks. This structure was not far from where the car stopped and started. It was an elevated railroad passing over the street. For defendant there was much evidence to the effect that deceased ran and tried to board a moving car, after the door through which passengers were admitted had been closed. The evideuce for plaintiff made him a passenger, whilst that for the defendant did not. Much stress is placed upon the character of the two witnesses upon which the plaintiff relied to prove that deceased had done the things required by the law to make him a passenger. Likewise counsel for plaintiff attacks some of the evidence for the defendant. The weight and credibility of this evidence was for the jury, and they have determined it against the defendant. The matter was submitted on the following instruction:

“If the jury believe and find from the evidence that on January 10, 1912, the Kansas City Elevated Railway Company was a carrier of passengers for hire and used the railroad and car mentioned in the evidence for such purpose, ánd if you further find and believe from the evidence that on said day the employees of said Kansas City Elevated Railway Company in charge thereof stopped said car at or near a point where the tracks of said railway company cross the State line between the States of Missouri and Kansas for the purpose of receiving passengers, and if' you further find that William H. Fay, with the intention in good faith to become a passenger (if you so find) had gone up the steps and through the station at said State line and before the doors of said car were closed, and before said car had started, he was in the act of stepping upon the steps of said car to become a passenger thereon, then the court instructs you that said Fay was a passenger on said car. And if you further find and believe from the evidence that said Fay was a passenger as above defined and had actually gotten onto the steps of said car and was standing thereon when he was caused to fall therefrom and to be killed by falling from the said steps of said car at said point to the street below (if you so find), then said Fay was a passenger on said car within the meaning of the terms of said insurance policy and the additional benefit indorsement extending the benefits under said policy, and which are in evidence in this case. And if the jury further believe and find from the evidence that said Fay was caused to be so injured and he died as a direct result of said injuries, if any, received at said time and place, then the plaintiff is entitled to recover. And you are further instructed if you find for the plaintiff you will find for her in the sum of $7500, together with interest thereon at the rate of six per cent per annum from the date of demand of payment, if any, as shown by the evidence. . And if you further believe and find from the evidence that defendant has vexatiously, that is, without reasonable cause, refused to pay such amount or loss, then you may, in addition to the above amount and interest, allow the plaintiff damages not to exceed ten per cent on the above amount, and a reasonable attorney’s fee, but the amount which you may allow plaintiff, if any, for such attorney’s fee must not in any case exceed the sum of $2500.”

In so far as this instruction undertakes to outline the facts necessary to make deceased a passenger, it is correct. If, as a fact, the car was standing still, with its door open for the admission of passengers, and vfiiilst it was so standing the deceased started to enter the same, with the intent to ride thereon as a passenger, he was a passenger within the eyes of the law, although the employee of the railway closed the door upon him before he had fully entered such car. The stopping of the car and the opening of the door, was an invitation by the company to deceased to become a passenger, and when he (if he did) attempted to board such car whilst it was yet standing with door ajar, for the purpose of riding thereon, he, at that moment, became a passenger. [6 Cyc. 539.]

The word “passenger” in the policy has the ordinary accepted meaning. In other words if the deceased would be classified as a passenger in an action against the carrier, he should likewise be deemed a passenger under the terms of an accident insurance policy, unless the terms of the policy added some conditions. This policy required such passenger to at least be on the steps of the car.

We.shall not further follow the counsel upon either side in their assault upon witnesses. The jury weighed the testimony of these witnesses. It was shown that deceased had been crippled a few days before the fatal accident, and had to use a cane in walking. This cane was found near him when picked up after the accident. The jury were evidently loth to believe that a cripple had run and caught hold of a moving car in an attempt to fide.

The question of passenger or no passenger was fairly submitted for determination by the jury and their verdict is conclusive here upon that question.

II. This instruction supra given for plaintiff is criticized by counsel for appellant thus:

“This instruction was self-contradictory and misleading. It first erroneously told the jury that Fay was a passenger on this car if with the intention to become a passenger he approached the car and was in the act of stepping on the steps of said car, intending to become a passenger thereon. This was erroneous. By the terms of ihe policy plaintiff could not recover in this case unless the injuries were sustained ‘while the insured is a passenger in or on a public conveyance’ (see policy). In other words, by the terms of the contract it was essential that Fay should not only be a passenger, but that he should be either in or on the car. Neither his presence at the station nor the fact that heh was in the act of stepping on the steps of the car made him- a passenger on the car. His mere in ten-’ tion to get on the car was not equivalent to his being on the car. His actual presence on the car as a passenger was essential to a right of recovery. In the next sentence the court tells the jury that if they find that Fay was a passenger ‘as above defined’ and had actually gotten on .to the steps of the car, then insured was a passenger and plaintiff was entitled to recover. In other words, the court first told the jury that Fay was a passenger on the car if he was in the act of stepping upon it, which was erroneous, and the court then tells the jury that if he was in the act of stepping on the car and had actually gotten upon the step, then he was a passenger and to find for the plaintiff, and this latter, regardless of whether the car by that time had been started, its door was closed or not. The jury could very well have understood from this instruction that. the plaintiff had the right to recover if Fay was in the act of getting on the ear, even though he had not in fact gotten on it.
“We submit that the court tried this case upon a wholly erroneous theory in admitting affirmative and independent evidence of vexatious refusal to pay; that in no' event should that fatally prejudicial evidence have been admitted a.s part of the plaintiff’s case in chief; that the evidence' abundantly justified the defendant in contesting this claim, and therefore the court was not warranted in even submitting the question of vexatious refusal to the jury; that the court erred in refusing to withdraw that issue from the jury; that the errors committed permeated the whole trial and inhere in the verdict itself — not merely with respect to attorneys’ fees, but with .respect to the whole verdict.'
. “The judgment should accordingly be reversed.”

It does not appear that defendant could have been harmed by this instruction, because the instruction requires the jury to find that deceased “had actually gotten on the steps of said car and was standing thereon, when he was caused to fall” before the jury could find for the plaintiff.

The writer of the instruction evidently had in mind what acts were necessary to make deceased a passenger, as between him and the railroad company, and thus the first clause of the instruction. Technically as between deceased and the railway, he was a .passenger, whether he got on the steps or not, provided the other assumed facts were true. But as the policy required the passenger to he “in or on the car,” the writer added the clause, last quoted above which required the jury to find that this technical passenger, was actually on the car, as required by the policy. There is no substance in the complaint, and this contention of appellant is not sustained.

' III. i The most vehemently argued error in this record is thus stated in the conclusion of counsel’s able written argument in the brief. The contention is that, under section 7068, Revised Statutes 1909, the plaintiff should not be allowed to introduce evidence as tending to show vexatious refusal to pay a policy of insurance, unless such evidence was necessary and proper for the purpose of establishing plaintiff’s right to recover under the policy itself. To couch the question in counsel’s language we quote the brief thus:

“The whole test of the good faith of the company’s refusal is the strength or weakness of its case as presented at the trial and it is erroneous to receive extrinsic and collateral evidence disconnected with the merits, directed solely to the issue of vexatious refusal. This is mere ‘side-wind evidence’ preventing a fair trial.”

The statute reads:

‘ ‘ In any action against any insurance company to recover the amount of any loss under a policy of fire, life, marine or other insurance, if it appear from the evidence that such company has vexatiously refused to pay such loss, the court or jury m.ay, in addition to the amount thereof and interest, allow the plaintiff damages not exceeding ten per cent, on the amount of the loss and a reasonable attorney’s fee; and the court shall enter judgmnt for the aggregate sum found in the verdict.”

Whilst there may he some authority from other states, under statutes of those states, which would, lend some support to appellant’s contention, our statute cannot he so construed. Under our statute, if the plaintiff desires to recover the damages named therein, i. e. the ten per cent on the amount of the loss and the attorney’s fees, there must be appropriate allegations in the petition showing that plaintiff claims and is entitled to these damages, and such allegations must be sustained by the proof.

Numerous things done by the defendant might he evidence of a vexatious refusal to pay, and yet not have any hearing upon the right of. plaintiff to recover on the policy. Thus in Young v. Insurance Co., 187 S. W. 856, we held that the threat to litigate through the Supreme Court, if a settlement offered was not acceptéd, tended to show a spirit of vexatious delay. This threat did not prove plaintiff’s, case, hut it did prove an intent to vexatiously delay payment. But we need not mention instances. It stands to reason that under this statute plaintiffs must have in the petition allegations showing that he is entitled to these damages, and these damages become a triable issue in the case. As it is a triable issue, any evidence which tends to prove this particular issue is competent, whether such evidence tends to prove the main issue in the case or not. By main issue we me.an the plaintiff’s right to recover under the policy.

Of course if this issue as to these statutory damages is not made out by proof, it is the duty of the court, as in other cases, to take such issue from the jury by appropriate instruction. But if there is evidence by proof direct of vexatious refusal to pay, or if from all the evidence, facts and circumstances in the case, the jury has the right to infer a vexatious refusal to pay, then the issue should be submitted to the jury. The statute leaves the jury as the arbiter, if there are facts sufficient to carry the issue of vexatious delay to the jury. Nor could the plaintiff be precluded from introducing any competent evidence tending to show a vexatious delay in .payment. Such plaintiff is not confined, upon this issue, merely to matters and things which would tend to show defendant’s liability, for the principal sum of the policy, but he may offer any competent evidence upon this one issue, whether such evidence supports the main issue of liability on the policy or not. Certainly there can be no recovery upon the issue of vexatious delay, if there is no recovery under the policy, but if there is recovery on the policy then there may be a recovery of the.se statutory damages, if the jury so find, under evidence sufficient to support their verdict upon that issue.

This particular question, i. e., whether extrinsic evidence is admissible to sustain the allegation of vexatious, delay, is one of first impression in this State. The statute has been frequently under review, but not from this angle. In the very early case of Brown v. Insurance Co., 45 Mo. l. c. 227, we said:

“The whole question of vexatious refusal or delay is a matter of fact to be determined by the jury. ■They must make up their verdict on this issue by a general survey of all the facts and circumstances in the case; and if, upon a full consideration, they conclude that the refusal was unjustifiable and vexatious, the law authorizes them to assess the damages. The statute will not admit of the constructioii contended for by the counsel for the plaintiff in error, that before damages are allowed it must be explicitly proved by tbe plaintiff that tbe delay or refusal was vexatious. ’ ’

And tbis doctrine bas the later express approval of tbis court in Keller v. Insurance Co., 198 Mo. 440. In thq Brown case there was no extrinsic proof on the question of vexatious delay, as we gather it from tbe opinion, but Judge Wagner did not by tbe language used undertake tbe rule that proof on tbe question of vexatious delay must be limited to proof tending to show tbe right of plaintiff to recover upon tbe merits. It is there simply ruled that tbe jury should determine tbis question from tbe facts and circumstances in the case.

In that case there was a wholly untenable defense made upon tbe question of tbe validity of tbe policy, and it was evidently upon tbis matter that tbe court ruled there was sufficient evidence to submit tbe question to tbe jury.

, In tbe case at bar we rule that tbe allegation of vexatious delay in payment of tbe policy may be shown by any competent evidence, whether such evidence tends to establish tbe right to recover tbe policy amount or not. Tbis leaves but one question of serious import left, and that is tbe competency of tbe evidence offered in tbe trial upon tbe issue. That question we take' next.

IV. Recalling tbe statement of facts it will appear that defendant first pleaded settlement, to which plea plaintiff replied by alleging such settlement was fraudulently procured, and tendering in the reply tbe $7500 received in settlement. Later tbe defendant moved tbe court to compel plaintiff to pay into court tbe $7500 upon a return pf tbe receipts taken in settlement.' Tbis motion was overruled, and tbe defendants so framed their answer as to obviate tbe question of fraud in tbe release, if they could obviate that issue. In this last answer they did not plead settlement, hut denied liability. The plaintiff proved these pleadings on the theory that they tended to show a vexatious delay in payment. We think this evidence competent. It will not do to say that defendant magnanimously withdrew the issue of settlement merely to save plaintiff the trouble of trying to prove fraud in the execution of the releases. We use the term “releases” instead of “release” purposely, because when plaintiff brought in her policy and released all claims upon it for the $7500 she. was asked about the annual renewals issued by the company, and she not having them, they took a further release, as to them. The officer of the company also said that they had in mind the last rider pertaining to double liability when this settlement was made. The jury were entitled to all these facts. They might conclude that the issue of fraud in the settlement was skillfully withdrawn by defendant’s last answer to obviate a trial of an issue, which defendant feared in the case. The jury might reasonably conclude that this was but another link in the chain of vexatious delay.

Not only was this evidence proper, but if plaintiff could show that the defendant purposely delayed the payment of the last $7500, by fraudulently procuring the release, that evidence would also be proper upon the issue of vexatious delay. In Young v. Insurance Co., supra, we held that the fact that a fraudulent appraisement had been procured by defendant was a proper matter to be considered upon the issue of vexatious delay. So in this case the procuring of a fraudulent release (if such was done) for less than the full liability of defendant was a proper circumstance to be shown upon the issue of vexatious delay, and this is none the less true, because the showing of such fact might tend to prejudice the jury upon the main issue. If, as a fact, a fraudulent release was procured, it was the act of the defendant, and defendant should he estopped from saying that proof of its wrong-doing would prejudice the jury, if such proof is competent upon any issue in the case.

Plaintiff also showed that defendant went to the railway company to get the facts as to whether or not the deceased was a passenger, and that the railway company usually husbanded the witnesses. who would testify to facts showing that such relation did not exist between it and deceased, and that defendant’s agent making the investigation knew that such was the course of conduct upon the part of the railway company. We see no error in this evidence. Before refusing to pay on the ground that deceased was not a passenger, the defendant should have made a fair investigation of the facts. It should not have confined its investigation, as it seemingly did, to such facts as might have been given it by the railway company, which was vitally interested in the fact whether or not deceased was a passenger. Whether the railway was in the habit of getting one side of the controversy in such case, if such was a fact, and defendant’s knew of this habit, was certainly competent. Other points are raised, all of which we have examined, but the foregoing are all that we deem worthy of note in the opinion. We believe that there were facts sufficient to carry the issue of vexatious delay in payment to the jury, and its finding thereon is binding here. The judgment should be and is affirmed.

All concur; Bond, J., in result.