author: STERNBERG, Justice.

text:
    Julia Mason KIDWELL and Edgar Kidwell, her husband, Appellants, v. Ernie MASON and Myrtle Mason, his wife, Appellees.
    Supreme Court of Kentucky.
    April 11, 1978.
    Joseph E. Lambert, Mount Vernon, for appellants.

      Jerry J. Cox, Clontz & Cox, Mount Vernon, for appellees.
   STERNBERG, Justice.

The 12-year marriage of Julia and Ernie was dissolved by a decree of the Rockcastle Circuit Court on March 22, 1974. During their marriage they acquired two tracts of land in their joint names. The trial judge concluded that the effect of these two deeds was to convey an undivided one-half interest to each of them. The decree dissolving the marriage made no provision for the assignment of any property. (KRS 403.-190). It merely.dissolved the marriage and restored Julia to the use of her maiden name. Both parties have married and the spouse of each is a party to this proceeding.

On March 27, 1976, Julia filed a suit seeking a sale of the property and a division of the proceeds. (KRS 389.020). Ernie filed an answer and counterclaim in which he alleged that Julia, by her action and conduct in the dissolution of marriage action, was estopped to and had waived any interest or claim she may have in or to these properties. Ernie also moved the judge of the Rockcastle Circuit Court to redocket the divorce action and to correct the judgment entered therein so as to order Julia to execute a deed to him for any and all interest she may have in or to these properties. The two actions were consolidated. A summary judgment was entered on July 7,1976, ordering Julia to make such a conveyance within thirty days from the date of the judgment.

An appeal was taken to the Court of Appeals of Kentucky, where the action of the trial judge was affirmed. A motion for discretionary review was granted by this court on September 13, 1977.

In his opinion the trial judge presented and discussed the factual background leading up to the entry of the decree of March 22, 1974. The court, however, stated the issue to be as follows:

“The question presented to the Court is whether the decree of dissolution of marriage of March 22, 1974, amounted to a -final settlement of property rights between Mrs. Kidwell and Mr. Mason thereby precluding any further claims by Mrs. Kidwell to the property including a claim to have it sold as asserted in the instant action.”

In affirming the judgment of the Rock-castle Circuit Court, the Court of Appeals, by an opinion rendered March 11, 1977, said:

“ * * * It is our opinion that the record sustains the finding of the trial court that Mrs. Mason waived her interest in any marital property held by the parties during their marriage. * * * ”

The appellants state the issues as follows:

“A. Are the two tracts of land in controversy marital property?
B. Did the 1974 judgment in the prior divorce proceeding settle marital property rights and preclude appellant, Mrs. Kidwell, from bringing her action for division thereof?
C. Did statements of appellant, Mrs. Kidwell, in the prior divorce proceeding effectively transfer her rights to division of marital (real) property to appellee, Mr. Mason?
D. Was the ‘understanding’, if any, made by the parties unconscionable as to appellant, Mrs. Kidwell?”

We are at once faced with Ping v. Denton, Adm’x etc., Ky., 562 S.W.2d 314 (rendered February 21, 1978), which is disposi-tive of this appeal. In considering the propriety of making restoration of property subsequent to the entry of a final decree where no reservation of that issue was provided for in the decree, after quoting from KRS 403.190, we said:

“This statute mandates the trial judge to assign each spouse’s property to him. Like other issues of fact, the interests of James and Iva were proper for inquiry and adjudication. The decree of dissolution of marriage, including the assignment of property, like other civil judgments became final ten days after its decree. CR 59.02 and 59.04. Thus, unlike KRS 403.060 and 403.065, it does not leave open for subsequent inquiry the rights of either or both that have not been adjudicated upon the final determination of the controversy. The insurance policy, with Iva as the named beneficiary, existed at the time their marriage was dissolved and the decree entered. It also was the proper subject of inquiry and adjudication. Any interest that either James or Iva may have had in or to any property, estate or interest of the other, which remained undisposed of by the trial judge, is in the posture as if the court had so adjudged their respective interests.”

The judgment of March 22, 1974, has the same effect as if the trial judge had specifically written therein that Julia and Ernie each owned an undivided one-half interest in and to the subject property.

We are of the opinion that both the trial judge and the Court of Appeals of Kentucky erred in attempting to modify the decree of March 22, 1974.

The judgment is reversed for proceedings consistent with this opinion.

All concur.


source: Caselaw Access Project

author: HOWARD, Judge. WILHOIT, Judge,

license: Public Domain

text:
    Janice CRUMPLER, Appellant, v. Margaret WINKLER and Peggy Todd Columbia, Appellees.
    Court of Appeals of Kentucky.
    Nov. 11, 1977.
    Rehearing Denied April 21, 1978.

      Leslie Rosenbaum, Eblen, Milner, Rosen-baum & Wilson, Lexington, for appellant.
    Douglas E. Johnson, Lexington, for ap-pellee, Margaret Winkler.
    J. Peter Cassidy, Jr., Moloney & Moloney, Lexington, for appellee, Peggy Todd Columbia.
    Before HAYES, HOWARD and WIL-HOIT, JJ.
   HOWARD, Judge.

This is an appeal from the Fayette Circuit Court by defendant-appellant, Janice Crumpler, from the judgment which allows plaintiff-appellee, Margaret Winkler, to recover from defendant-appellant, Crumpler, and from the judgment which denies recovery of defendant-appellant, Crumpler, against defendant-appellee, Peggy Todd Columbia.

This controversy arises out of an automobile accident which occurred in Lexington, Fayette County, Kentucky, on January 3, 1973. One of the automobiles was being driven by defendant-appellant, Janice Crumpler (hereinafter called Crumpler), in which her mother, plaintiff-appellee, Margaret Winkler (hereinafter called Winkler), was a passenger. The other automobile was being driven by defendant-appellee, Peggy Todd Columbia (hereinafter called Columbia). Winkler, the passenger, filed suit against Crumpler and Columbia, the two drivers; a jury trial was had and the jury awarded Winkler a judgment against Crumpler in the amount of $5,104.97.

Crumpler was traveling north on Shropshire Avenue, which is a “stop” or inferior street. Columbia was traveling west on Seventh Street, a “through” or superior street. Seventh Street is approximately 29 feet wide and does not have lane markings. The first part of Seventh Street, as approached by the Crumpler automobile headed north, was a parking lane. Although for the 100 feet going east on Seventh Street, a no parking zone was designated, all parties admit that a car was parked close to or near the corner of Shropshire Avenue on Seventh Street. The remaining portion of Seventh Street was taken up by two traffic lanes, one for eastbound traffic and one for westbound traffic.

Crumpler alleges that she stopped once by the stop sign located on Shropshire Avenue. Then, as she could not see around the parked car, she moved out further; came to a complete stop in order to check the Seventh Street traffic; and was then hit by Columbia. Winkler testified that after the car in which she was riding made the second stop, she saw the Columbia vehicle approaching about 3 or 4 car lengths away. Winkler testified that the Columbia vehicle was in the middle of the traffic lanes for Seventh Street. Winkler further testified that after she saw the Columbia vehicle approaching, she looked across the street; saw a car turning right off Shropshire on to Seventh; and then looked back at the Columbia vehicle and the collision then occurred.

This must be contrasted with the testimony of Columbia who testified she was on the right side of Seventh Street at the time of the impact. Columbia candidly admits she did not see Crumpler’s vehicle prior to the collision although she maintains that she kept a lookout straight ahead as she approached and entered the intersection.

A disinterested witness placed the collision about in the middle of the intersection and the police report places the Crumpler vehicle after the accident in part of the westbound lane on Seventh Street.

Crumpler raises seven points on appeal. Crumpler states that Winkler should not be allowed recovery against Crumpler because Winkler judicially admitted Crum-pler was not at fault and also for the reason that there is no evidence presented in the case that Crumpler was negligent. We hold that the testimony of Winkler was such as to constitute a judicial admission that Crumpler was not at fault and therefore Winkler should not be allowed recovery for the following reasons.

Winkler testified that Crumpler had made a complete dead stop; that Columbia had run into them; that the automobile had not gone halfway across Seventh Street; and that Crumpler did nothing wrong and was not to blame for the accident. Wink-ler’s testimony was deliberate and unequivocal.

In Sutherland v. Davis, 286 Ky. 743, 151 S.W.2d 1021 (1941), the court states at page 1024:

We believe the law to be that admissions fatal to his cause given in the testimony of a party to an action on the trial of the case should be viewed in the light of all the conditions and circumstances proven in the case; and unless all such circumstances and conditions give rise to the probability of error in the party’s own testimony, he should not be permitted to avert the consequences of his testimony by the introduction of, or reliance on, other evidence in the case.

In Nunnellee v. Nunnellee, Ky., 415 S.W.2d 114 (1967), a grandmother, the passenger of the car her granddaughter was driving, testified that the stop light was green and that her granddaughter was operating the automobile at a reasonable speed. This was held to be an admission entitling the granddaughter to a directed verdict. This was in light of the jury finding that the granddaughter had run the red light and caused the accident.

The trial court erred in not directing a verdict for Crumpler on Winkler’s claim against her. Since defendant-appellant moved for judgment n. o. v., the trial court shall enter judgment accordingly.

Crumpler’s next point on appeal concerns the failure of the court to direct a verdict in her favor against Columbia. It is obvious from the testimony that there is a conflict concerning the location of the accident and whose automobile was the cause of the accident. Since reasonable minds could differ as to the conclusion of who was at fault in causing the accident, the question becomes a jury issue. The motion for directed verdict was properly denied.

Crumpler contends next that the trial court erroneously instructed the jury in the following instruction which reads that: “The defendant, Crumpler, had the right to proceed cautiously into the intersection until she reached a point at which her vision was unobstructed, and in so doing, it was her duty to exercise the highest degree of care having regard for the safety of other vehicles or persons.” The instructions define “highest degree of care” as “that additional degree of care which would be exercised by a reasonably prudent person under like or similar circumstances to those in this case because of any higher risk or danger of injury to others.”

KRS 189.330(5) sets out what a driver of a vehicle must do in obedience to a stop sign. “He shall proceed cautiously, yielding to vehicles not so obliged to stop which are within the intersection or approaching so closely as to constitute an immediate hazard, but may then proceed.”

There is nothing in the statute that requires a motorist who is moving from an inferior highway or street into a superior one to exercise the “highest degree of care”. Negligence is the failure to exercise ordinary care and we find no authority, nor are we cited any, that would require the giving of a different standard in cases of this kind. We hold that the giving of this instruction was prejudicial error and that a new trial must be given.

Crumpler raises some other points as possible errors but we do not agree and, as the case will be reversed for a new trial, we will not discuss them.

The case is reversed for further proceedings consistent with this opinion.

HAYES, J., concurs.

WILHOIT, J., dissents.

WILHOIT, Judge,

dissenting.

I respectfully dissent from so much of the majority opinion as holds that appellee Winkler may not recover against the appellant because that appellee’s testimony constituted a judicial admission that the appellant was not at fault. I do not believe that the cases relied upon by the majority in support of this decision are applicable to the facts of this case. Further, considering the facts which were in dispute in this case and Mrs. Winkler’s testimony, it cannot be said that upon the whole case a verdict in her favor would be unconscionable. Coldiron v. Mattick, Ky., 488 S.W.2d 362 (1972); Bryant v. Corley, Ky., 455 S.W.2d 566 (1970).


author: ROBERT R. WELBORN, Special Judge.

text:
    Betty Sue SHERIDAN et al., Plaintiffs-Respondents, v. James T. McBAINE et al., Defendants-Appellants.
    No. KCD 28446.
    Missouri Court of Appeals, Kansas City District.
    Feb. 27, 1978.
    Motion for Rehearing and/or Transfer Denied April 3, 1978.

      Howard F. Sachs, Spencer, Fane, Britt & Browne, Kansas City, for defendants-appellants.
    J. Turner Jones, Homer G. Watson, Columbia, for plaintiffs-respondents.
    Before WELBORN, Sp. J., Presiding, SHANGLER, J., HIGGINS, Sp. J.
   ROBERT R. WELBORN, Special Judge.

This action began in the Boone County Circuit Court as a suit to quiet title and for rent and possession of the premises. A corporate defendant, Windrush Corporation, counterclaimed for specific performance of an agreement by the decedent who had owned the premises to convey the property to the corporation in return for stock in the corporation. Defendant Thomas, who, with his wife, was defendant in the suit for rent and possession, alternately sought declaration that joint venture existed between himself and decedent with respect to the property and asked for an accounting, etc. Defendant Thomas also counterclaimed for value of work and labor on premises. Upon trial to court, judgment was entered quieting title as prayed for and for possession of premises with rent at rate of $166.67 per month from date of judgment until surrender of possession. Court found against corporate defendant on its counterclaim and against defendant Thomas on his claim of joint venture. Judgment was entered in favor of defendant Thomas for $13,953 for work and labor on the premises. Defendants Thomas and corporate defendant appeal.

At the time of his death in February, 1973, John Crane was the owner of 310 acres of land fronting on the Missouri River near Easley in Boone County. A small portion of the land was in the river bottom but the greater part was upland hill country, overlooking the river.

Crane built a house on the property around 1950 and lived there with his family of a wife and six children. They operated a dairy farm for a time and later raised beef cattle. Crane’s wife died and he remarried in 1966 and moved to the residence of his new wife in Columbia. He continued to run stock on the farm until May, 1971, when he had a stroke.

Crane also worked as a night watchman at the University of Missouri beginning around 1957 or 1958. Presumably he then became acquainted with Dr. Lloyd B. Thomas, a professor of chemistry at the University. In 1969, Crane contracted to sell Doctor Thomas some 194 acres of the farm, but the transaction was not completed and Doctor Thomas forfeited $10,000 earnest money to Crane.

Doctor Thomas remained interested in the property. In December, 1971, Crane executed a “Request For Cost-Sharing” under the Rural Environmental Assistance Program for funds to construct a dam and lake on the property. The dam was intended to provide a road to make access to remote areas of the farm feasible. The application was in the name of “Crane and Thomas” and the address shown was that of Thomas’s residence in Columbia.

Crane told his brother that he had been considering getting into a corporation with an unnamed person who would provide money for building a road and- selling off part of the farm.

On July 5, 1972, Crane and Thomas executed a “Subscription Agreement” whereby they agreed to cause a corporation to be known as “Windrush Corporation” to be formed. The Crane farm was to be sold to Windrush at a value of $80,000 for 800 shares of stock of the corporation. Thomas was to transfer stocks and bonds valued at $80,000 to Windrush in return for 800 shares of its stock. The subscription agreement was conditioned upon the adoption by Windrush at its first board of directors meeting of a “Plan To Offer Stock,” incorporating the undertaking of the parties. The two concluding paragraphs of the “Subscription Agreement” read as follows:

“This agreement shall be binding upon the executors, administrators, heirs, and assigns of the parties hereto.

“This Subscription Agreement is hereby expressly conditioned upon the adoption by the corporation of the Plan described in paragraph 3 hereof, and if the corporation fails to adopt said Plan then this Agreement shall be of no effect.”

On July 5, 1972, Crane and Thomas executed Articles of Incorporation for “Wind-rush Corporation.” They were the incor-porators. Thomas was designated registered agent and the registered office was the farm property. The articles authorized the corporation to hold, develop and sell real estate. A board of directors of two members was provided. The articles were filed in the office of the Secretary of State and a certificate of incorporation issued September 22, 1972.

On the same date that the articles of incorporation were executed, Crane gave Thomas an option to purchase three parcels of land totalling some 10 plus acres out of the farm. Crane had previously, on June 15, 1972, executed a warranty deed to the Thomases for one of the tracts covered by the option, containing 3.29 acres. That deed was recorded May 1, 1973.

The Thomases sold their residence in Columbia and, on October 1, 1972, they moved to the house on the Crane farm. The house had been occupied by a renter for six to eight months sometime previously. The prior tenants had left the house in bad repair, with many windows broken. Doctor Thomas had started working on the farm in the fall of 1971 and worked weekends on the grounds. In the spring of 1972, he began working on the house, restoring it to livable condition.

The abstracts to the farm were brought up to date as of October 16, 1972, and plans were made for the first meeting of the shareholders of Windrush. However, Crane suffered a second stroke in December, 1972, and died on February 25, 1973, about ten days before the date set for the meeting, and it was never held.

The Thomases continued to live and work on the farm. On September 23, 1973, demand for rent payment upon delivery of possession on behalf of the Crane heirs was served on the Thomases.

On December 28, 1973, quiet title action was filed by the Crane heirs, the children of Mr. Crane. Numerous defendants were named, including the Thomases and Wind-rush. A second count of the petition sought rent and possession against the Thomases. Only the Thomases and Wind-rush answered the petition. They filed a joint answer and counterclaim. By Count I of the counterclaim, Windrush asked for specific performance of the subscription agreement. By Count II, Doctor Thomas alleged an oral agreement with John Crane for a joint venture for the improvement and development of the farm. It prayed for an accounting and termination of the joint venture. By Count III, Thomas alleged that pursuant to agreement with Crane he had undertaken to improve the farm and had advanced in that regard work and materials valued at $25,590.15. Recovery of that amount was sought.

At the trial, a son of John Crane and the administrator of his estate, testified to his father’s operation of the farm. His testimony minimized the work the Thomases had done at improving the house and the land. He testified that, after his stroke, his father told him that “Mr. Thomas was trying to get him into a corporation with him,” but the witness knew nothing of what had been done in that regard.

On behalf of defendants, a brother of the decedent testified that his brother had discussed with him the formation of a corporation to develop and sell off part of the farm land.

Crane’s widow, who had no interest in the farm by reason of an antenuptial agreement, testified as a witness for defendants. She stated that she had heard her husband and Thomas discuss construction of a dam on the farm. She knew about the formation of the corporation and stated that her husband had planned to attend the shareholders’ meeting, but his stroke and death intervened.

Thomas and his wife testified in detail to the labor and materials provided by them on the farm beginning in December, 1971. According to Mrs. Thomas, the house was in bad shape, particularly the kitchen. They replaced about 20 broken windows. They made a “usable” kitchen, with sink and cabinets, and replaced the kitchen floor. They built screens and storm windows, painted the interior and replaced part of the roof.

Mrs. Thomas was aware of the formation of the corporation and knew that a date had been set for the first meeting of shareholders, but it was not held because of Crane’s illness and death.

She said that some bulldozing had been done on the dam, but that the work had been stopped by one of Crane’s sons. According to Ms. Thomas the dam was planned to permit construction of a road to the back part of the property which was to be developed for home sites. The Thomases were to provide the funds for improvement and development of the property.

Mrs. Thomas and her husband testified in detail to materials and machines and tools furnished by them in work on the farm and to 1740 hours work by Doctor Thomas and his son-in-law on the farm. Doctor Thomas testified that he held $80,000 in stocks at the time fixed for the first meeting of shareholders and that he still had the stocks at the time of trial, “holding it in escrow for the formation of the corporation.”

Following the trial, the court entered judgment in favor of plaintiffs on Counts I and II of their petition, against Windrush on Count I of the counterclaim, against Thomas on Count II and in favor of Thomas on Count III. Thomas and Windrush appeal.

In the first point on this appeal, appellant Windrush argues that the trial court erred in refusing to order specific enforcement of the subscription agreement to convey property to the corporation in return for stock therein. The trial court is not to be found to have erred on this score. Apart from the absence of compliance with the expressed condition of the subscription agreement for approval by the corporate directors of the plan to offer stock (see 18 C.J.S. Corporations § 315, p. 814 (1939)), a very real problem exists in this regard because, although lack of capacity to sue was not pleaded, the corporate records of Wind-rush, placed in evidence without objection, reveal that the charter of that corporation was forfeited by the Secretary of State on January 15,1974, for failure of the corporation to file its annual registration report and anti-trust affidavit. § 351.525, RSMo 1969.

Alternatively it is contended that the trial court erred in failing to grant relief under Count II of the defendants’ counterclaim by which Doctor Thomas asserted the existence of a joint venture between himself and Crane with respect to the property in question.

The evidence clearly demonstrated that John Crane and Doctor Thomas had arrived at a definite agreement for the development of the Crane property, with Crane providing the land upon which an $80,000 value had been placed and Doctor Thomas providing the money for the project in the form of securities of a value equal to the value of the land. It is also clear, as argued by respondents, that the parties contemplated that a corporation would be employed as the operative entity. However, for reasons beyond the control of Thomas, the corporate structure was not perfected. That does not preclude the relief sought by Thomas in Count II of the counterclaim. “[T]he legal relation which (corporate) promoters bear to each other, if there be more than one in equality of standing, is ordinarily that of partners or joint adventurers; * * *.” 1 Fletcher, Cyclopedia of Corporations, § 191, p. 664 (1974 Revised Volume). See Refrigeration Engineering Co. v. McKay, 4 Wash.App. 963, 486 P.2d 304, 311[14] (1971); Schuette v. Winternitz, Colo.App., 498 P.2d 1183, 1185[5-7] (1972). Although as argued by respondents, Crane was disdainful of a partnership operation, nevertheless he entered into the arrangement with Doctor Thomas which the law considers a joint venture. An actual intention in that regard is not essential to a finding of a joint venture. DeFabio v. Mackey, 493 S.W.2d 355, 359[2] (Mo.App.1973).

By the terms of the subscription agreement, Crane clearly intended a transaction which was to be binding upon his heirs, the respondents here. Respondents have advanced no equities which should stand in the way of the consummation of the transaction. They do assert the Statute of Frauds as a defense to any finding of a joint venture. However, the requirement of the statute with respect to lands is satisfied by the subscription agreement which describes the property involved, the consideration, the parties and it is signed by the parties. Wheeler v. Blanton, 253 S.W.2d 497, 499[1][2] (Mo.App.1952). The agreement of the parties to form a corporation, which gives rise to the joint venture finding, is likewise shown by the subscription agreement.

Respondents also argue that a finding of joint venture in the case is inconsistent with the rule that such an arrangement ordinarily exists for only a limited time, limited to a single, specific transaction, citing Jeff-Cole Quarries, Inc. v. Bell, 454 S.W.2d 5, 16[14 — 15] (Mo.1970). These are factors for consideration, not preclusive of the existence of a joint venture. Had the corporate arrangement been concluded, the joint venture relationship in this case would have terminated after limited duration. However, in the circumstances of this case, its continued existence becomes necessary and does not refute the existence of the relationship.

The judgment of the trial court on Count I of plaintiffs’ petition is set aside. Upon remand a new judgment on that count shall be entered, recognizing the interest of Doctor Thomas in the property as above determined. The judgment in favor of plaintiffs on Count II is reversed.

The judgment in favor of plaintiffs on Count I of defendants’ counterclaim is affirmed. The judgment in favor of plaintiffs on Count II of defendants’ counterclaim is reversed and the cause remanded for further proceedings in accordance with the prayer of defendants’ counterclaim. Plaintiffs have not appealed from the judgment in favor of defendants on Count III of defendants’ counterclaim. However, any accounting under Count II will necessarily take into consideration the recovery by defendants under that count.

Judgment affirmed in part; reversed and remanded in part for further proceedings.

All concur.


author: DIXON, Judge.

text:
    J. LOUIS CRUM CORPORATION, a Missouri Corporation, et al., Plaintiffs-Appellants, v. ALFRED LINDGREN, INC., a Missouri Corporation, et al., Defendants-Respondents.
    No. KCD28497.
    Missouri Court of Appeals, Kansas City District.
    Feb. 27, 1978.
    Motion for Rehearing and/or Transfer Denied April 3, 1978.

      Larry M. Woods, Sapp, Woods & Orr, Columbia, Jon M. Wickwire, James J. Tan-sey, Walstad, Wickwire, Peterson & Gavin, Vienna, Va., for plaintiffs-appellants.

      Gene C. Morris, Rogers, Field, Gentry, Benjamin & Robertson, Kansas City, for defendants-respondents, Alfred Lindgren, Inc., Charles Parsons Const., Inc., Parsons-Lindgren Joint Venture and The Pennsylvania Ins. Co.
    Roy F. Carter, Morris, Larson, King, Stamper & Bold, Kansas City, B. Daniel Simon, Brown, Wright, Willbrand & Simon, Columbia, for defendant-respondent Havens Steel Co.
    Before PRITCHARD, P. J., SWOFFORD, C. J., and DIXON, J.
   DIXON, Judge.

Plaintiffs appeal from the trial court action in the dismissal of two counts of their petition against separate defendants. A third count remains pending in the court below. Defendants filed a motion to dismiss on the ground that the orders appealed from were not final appealable orders because of the pending Count III. Upon the briefs submitted, the motion to dismiss was denied.

The dispute arises out of multiple contracts for the construction of the Hearnes Multi-Purpose Complex on the Columbia campus of the University of Missouri. A general statement of the various contracts and the relationship of the parties is necessary for an understanding of the issues.

The work to be constructed was a very large athletic facility, herein referred to as the “project.” The contracts involved were originally between the Curators of the University and three contractors. J. Louis Crum Corporation was awarded the prime contract for the mechanical work on the project. Crum subcontracted portions of the work to Harold G. Butzer, Inc. and to Owens-Corning Fiberglass Corporation. All plaintiffs will be referred to as “Crum.” Alfred Lindgren, Inc. was awarded the contract for the general construction of the project. Lindgren entered into a joint venture with Charles Parsons Construction, Inc. to perform Lindgren’s contract. The joint venture will be referred to as “Lind-gren.” Various subcontractors were involved, but the issues here presented involve only one such subcontractor, Havens Steel Company, Havens having contracted with Lindgren to furnish and install the structural steel for the project.

During the course of the work on the project, a large crane being used by Havens to place structural steel collapsed. This caused substantial damage to the partially completed structure. The collapse did not directly injure the work of Crum, but the claims for damage are predicated upon added costs accruing to Crum as a result of delays incident to the damage.

Count I, dismissed below, was a claim sounding in contract by Crum as plaintiff against Lindgren as defendant. Count II was a claim sounding in tort by Crum as plaintiff against Havens and The Pennsylvania Insurance Company, which was Lind-gren’s surety. Because of the disparate nature of the theories of the parties to the separate counts, they will be dealt with separately.

I

In Count I, Crum pleaded that Lindgren was the general contractor under a “prime” contract and that Crum was the mechanical contractor under a “prime” contract, both such contracts being with the University; further, that Crum subcontracted certain steel erection to Havens and that Pennsylvania executed a performance bond for Lindgren. It was further alleged that each of the prime contracts contained paragraphs 9c and 9d in relevant part as follows:

“No contractor shall delay any other contractor by neglecting to perform his work at the proper time. Each contractor shall be required to coordinate his work with other contractors so as to afford others reasonable opportunity for execution of their work. Any costs caused by defective or ill-timed work, including liquidated damages if same are prescribed, shall be borne by contractor responsible therefor.” , •
“Each contractor shall be responsible for damage to Owner’s or other contractor’s property done by him or men in his employ through his or their fault or negligence. If any contractor shall cause damage to any other contractor, the contractor causing such damage shall upon notice of any claim settle with such contractor by agreement or arbitration.”

Crum alleged that a crane under the exclusive management and control of Lind-gren and Havens collapsed, causing damage to the partially completed structure which resulted in disruption and delay in the performance of Crum’s work under its contract. It was then pleaded that the acts of Lindgren and Havens were a breach of a contractual duty assumed by Lindgren un7 der its contract conditions 9c and 9d, and Lindgren is liable for damages suffered by Crum as a result of the breach. Pennsylvania, it is also alleged, is responsible for the damage by reason of its surety bond.

Crum contends that it is a third-party beneficiary of the contract between Curators and Lindgren and that Lindgren’s failure to promptly and on schedule perform its work was a breach of its contractual duty.

Lindgren and Pennsylvania contend that the relied-upon provisions do not create any liability for consequential damages. It appears that no direct damage occurred to the work of Crum. Pennsylvania contends first that there is no liability under Lindgren’s contract and, hence, no liability on the part of Pennsylvania. Further, Pennsylvania contends that even if Lindgren is liable to Crum, it did not insure to Crum the performance of the contract.

As Crum notes, in reviewing a petition which has been dismissed on motion, the facts well pleaded are taken as true and the pleader is entitled to all favorable inferences from the facts. Parker v. Sherman, 456 S.W.2d 577 (Mo.1970). Nor is a pleader relegated to a narrow construction of the pleadings. In the face of a motion to dismiss, .the pleading is to be given a reasonable intendment. Zuber v. Clarkson Const. Co., 363 Mo. 352, 251 S.W.2d 52 (1952). And the reasonable inferences from the facts pleaded will also be taken in support of the petition. Fitzpatrick v. Federer, 315 S.W.2d 826 (Mo.1958).

The first issue to be determined is the status of Crum as a third-party beneficiary. Lindgren and Pennsylvania do not directly counter this claim, but content themselves with a recital of the principles of contract construction and the assertion that a third-party beneficiary takes the contract as he finds it, all of which may be conceded.

As Crum contends, the primary question of the status of Crum as a third-party beneficiary is to be determined upon the intention of the parties. That intention may be gleaned from the situation of the parties, the facts and circumstances attending the execution of the contract, and the apparent purpose the parties intend to accomplish. Black and White Cabs of St. Louis, Inc. v. Smith, 370 S.W.2d 669 (Mo.App.1963). Lindgren argues that the contract is clear and unambiguous and the situation and circumstances of the parties is not to be considered. That position is much too narrow a view for the issue presented here. By the very nature of third-party contracts, the situation of the parties is an essential factor in determining the rights and duties under the agreement. In the instant case, Crum pleads that it is a “prime” or original contractor with the Curators and that Lindgren occupies the same position under an identical contract. Those contracts were intended to accomplish the overall project in a timely fashion. When the language of the contract set forth above is examined in that factual matrix, it appears that the prime contractor’s agreement to perform in a timely fashion ran to the Curators and required that each contractor complete its work in a timely fashion and not impede the work of other contractors.

That coordinate obligation of Lindgren, the general contractor, and Crum, the mechanical contractor clearly imposed by the nature of the project a reciprocal relationship. That one of these contractors could delay the work of the other is clear from the provisions of the contracts dealing with such delay. That the Curators desired to shift the cost of such delay to the party causing the delay is equally apparent.

Crum cites and relies upon M. T. Reed Const. Co. v. Virginia Metal Products Corp., 213 F.2d 337 (5th Cir. 1954), and Visintine & Co. v. New York, Chicago & St. Louis R. Co., 169 Ohio St. 505, 160 N.E.2d 311 (1959), in support of its theory of recovery.

Virginia Metal Products Co. is a case which, although filed in the federal courts, involved the application of the law of Mississippi. In that case, three separate and substantially identical contracts were awarded by the State of Mississippi to construct a library at the state university. These were a general contract, a contract for shelving, and a plumbing and heating contract. The opinion characterizes the contracts as follows:

“These contractors agreed in their respective contracts to coordinate their work and cooperate with each other so as to facilitate and expedite the completion of the building.” 213 F.2d at 337-8.

Further recitals in the opinion disclose that the contracts contained agreements to coordinate work similar to and that any cost of defective or ill-timed work should be borne by the party responsible therefor.

The general contractor brought an action against the contractor responsible for the shelving and recovered a jury verdict. The trial court set aside the verdict on the ground that the general contractor was but an incidental beneficiary of the contract between the shelving contractor and the state and could not maintain an action on that contract.

The Fifth Circuit Court of Appeals reversed, holding that the plaintiff was a direct beneficiary of the contract between the state and the shelving contractor. The language and reasoning of the court is pertinent to the instant case. The court said:

“The building could not have been completed without such mutual obligation on the part of each of the contractors, and the obligation so to do was a part of the consideration that induced each of the contractors to undertake its particular job at the agreed price.” 213 F.2d at 338. “ . . . [T]he contract in suit made the several contractors direct beneficiaries of the contractual provision that any contractor would be liable for any actual damages inflicted upon another contractor on this job because of the breach of any duty assumed under the contract by the contractor.” 213 F.2d at 339.

Lindgren attempts to distinguish the case by asserting there was no mishap or negligence and that the court relied upon other provisions of the contract not pleaded here. The fact remains, however, that the court announced as a matter of substantive principle that mutually reciprocal contracts in a construction project give rise to a cause of action for delays and damage to other contractors upon the failure of another contractor to honor the basic commitments of the contract with the owner which causes damage to other contracting parties.

Visintine is likewise a situation where the state had contracted with separate contractors for an overall project, each of the contractors to perform portions of the work and in a time sequence. The court described it as follows:

“ ‘The nature of the work was such that none of the parties could perform its part in a single operation, but numerous ones were required and the time when each was to be performed was specified and spelled out in the plans and specifications agreed upon.’ ” 160 N.E.2d at 312.

The plaintiff Visintine brought its action based on the failure of the railroad company defendants to perform the work under their contract in a timely and proper fashion. The court approached the case as one involving a third-party-beneficiary theory by the plaintiff to recover upon the contracts between the defendants and the State of Ohio. The court held that the allegation of the plaintiff that it was the duty of all contractors to cooperate and coordinate their work gave rise to reciprocal rights and duties under the contracts and that the plaintiff was a third-party beneficiary and sustained the petition of the plaintiff against demurrer, but affirmed the lower court in sustaining a demurrer to a tort cause of action.

Visintine is remarkably similar on its facts to the instant case and presents again an analysis of law which demonstrates a substantive principle permitting recovery under contractual relationships such as exist and are pleaded in the instant case. The settled law in Missouri is that upon a motion to dismiss if the facts pleaded give rise to a substantive principle upon which recovery may be had, then the petition will be upheld as stating a cause of action. Williamson's Estate v. Williamson, 380 S.W.2d 333 (Mo.1964).

Examining the pleading in the instant case, it appears to invoke substantive principles under established law in Missouri.

Thus, if Crum was a third-party beneficiary, Crum was entitled to bring an action on the contract between Lindgren and the Curators. The authority cited, Virginia Metal Products and Visintine, are persuasive on this issue.

Under all the circumstances, Crum, as a third-party beneficiary of the agreement between Lindgren and the Curators, was entitled as much as the Curators to a timely performance and the coordination of work of Lindgren. The language of the contract, “Any costs caused by defective or ill-timed work, . . ., shall be borne by contractor responsible therefor,” makes it clear that consequential damages from the failure to properly coordinate the work were within the contemplation of the parties when the contract was executed. It follows Crum’s petition states a cause of action against Lindgren.

The issue with respect to Pennsylvania must be resolved to the contrary. The surety bond guaranteed the completion of the project to the Curators. There is nothing in the agreement to indicate an intention to indemnify anyone but the Curators upon the basic obligation of the bond performance by Lindgren. The fact that Crum is a third-party beneficiary of the contract between Lindgren and the Curators under the provisions of the contract relating to the coordination of efforts and the costs of delays does not make it a third-party beneficiary of the separate agreement between Pennsylvania and the Curators providing for payment to the Curators if Lindgren failed to perform the contract. As to that branch of the case, there would initially have to be a pleading that Lindgren failed to perform his contract to build. Audrain County v. Walker, 236 Mo.App. 627, 155 S.W.2d 251 (1941). Upon the second portion of the surety bond, it is equally clear that the petition states no cause of action against Pennsylvania.

The argument by Crum is to the effect that the intent of Lindgren, the Curators, and Pennsylvania was to guarantee all of the promises and undertakings of Lindgren and, therefore, the obligation of Lindgren to pay Crum for materials furnished and labor costs arose out of Lindgren’s breach of contract. Before that argument would have any vitality, Crum would necessarily have to be a third-party beneficiary of the performance portion of the Pennsylvania bond. In Wilbur Waggoner Equipment Rental v. Bumiller, 542 S.W.2d 32 (Mo.App.1976), the court squarely considered the issue of whether a contractor could be a third-party beneficiary under a performance bond and the court held that under a purely performance bond, no third party status arose in an unpaid claim for labor and materials. The court distinguished in that case those cases where the bond specifically provided indemnity for the payment for labor and material furnished in the performance of the contract.

This bond does provide for indemnity for unpaid claims for labor and material furnished. No part of the cause of action asserted by Crum in Count I is within the provisions of the surety bond for payment for wages or material furnished. The only material Crum claims was furnished was an additional condenser coil to replace one that was frozen by the alleged failure of Lind-gren to furnish heat. That claim is part of Count III not before this court at this time. The balance of Crum’s claim is for increased costs because of delay which resulted in a diminishment of its profit or creation of an outright loss. There is no claim that Crum has not received from the Curators its full contract price for the work performed.

Properly analyzed, the bond creates an obligation to pay claims for labor and materials furnished which would be the obligation of Curators if Lindgren defaulted in payment. The theory urged against Pennsylvania is at war with the basic theory of Crum’s case against Lindgren that the prime contract shifted the cost of delay from the Curators to Lindgren. The payment portion of the bond for unpaid materials and labor is dictated by Section 107.170 RSMo 1969, which extends to workmen and suppliers the same measure of protection as the lien statutes afford under private construction projects. As a contractor, to claim this protection Crum would need to show that some portion of its contract price or an agreed upon addition to the contract work remained unpaid. Crum argues it furnished labor and materials that “arose ” out of Lindgren’s breach. Measured as it must be, for the purposes of the bond, that additional cost is a part of its “contract” price to the Curators and is not the kind of claim which Section 107.170 RSMo 1969 is intended to protect. It follows that Crum states no cause of action against Pennsylvania upon the bond.

II

Summarized but given the most liberal intendment, the allegations of Count II may be stated as follows. Crum (and its co-plaintiffs) were licensed contractors to perform mechanical work on the Project under a prime contract by Crum. Lindgren (and its joint venturer) were general contractors on the project. Both prime contracts with Curators provided for identical completion dates and were identical in all terms except division of work. The contracts contained Paragraphs 9c and 9d, set forth above. Havens was a subcontractor of Lindgren and, in the performance of that subcontract to érect steel, was using a crane which was under the exclusive management and control of Havens and Lindgren.

The crane collapsed, damaging the roof, damaging the structure, delaying Crum’s work, and causing additional costs. The crane was, by reason of the negligence, fault, and carelessness of Lindgren and Havens, caused to fall. Such a crane mishap does not occur if those in charge use due care, and the defendants Lindgren and Havens possess superior knowledge of the cause of the occurrence.

Plaintiff then further alleged that as a direct and proximate result of the negligence that delay, disruption and resequenc-ing of plaintiff’s work occurred and, as a result, the plaintiff was caused to incur additional labor and material costs.

This collage of allegations of tort and contract is caused by the incorporation by reference in Count II of the allegations of Count I. Despite the ambiguous nature of the pleading in Count II, all of the parties concur that it is an attempt to plead a cause of action sounding in tort.

Crum claims that Lindgren and Havens owed a common law duty to Crum to act in such a way as to not injure plaintiffs. The arguments of the parties focus upon Westerhold v. Carroll, 419 S.W.2d 73 (Mo.1967) and Aluma Kraft Manufacturing Co. v. Elmer Fox & Co., 493 S.W.2d 378 (Mo.App.1973). Crum asserts these cases create a cause of action in it for the negligent performance of the contract between Lindgren and the Curators.- Lindgren argues there is an insufficient nexus or connection and that the imposition of a duty in this case would restrict and embarrass the making of contracts by burdening the contract with potential liability to third parties. Havens, on the other hand, argues that there is no duty on the part of Havens based on any pleaded contract and that Crum has pleaded only a negligent interference with contract cause of action as to Havens. Havens asserts that cause of action is not recognized in Missouri.

First considering the application of. West-erhold and Aluma Kraft Manufacturing Co., they represent a line of cases which create liability in tort where a negligently majle representation is relied on by a third party resulting in damage. They are direct kinsmen of Glanzer v. Shepard, 233 N.Y. 236, 135 N.E. 275 (1922), where buyers, in reliance upon a negligently made weight certificate, were permitted to recover against the weighmaster.

Liability in such cases has been found in three situations: first, where the negligent actor has knowledge of the specific injured party’s reliance (Aluma Kraft Manufacturing Co., supra); second, where the plaintiff is a member of a group that the negligent actor seeks to influence (Granherg v. Turnham, 166 Cal.App.2d 390, 333 P.2d 423 (1958)); and, third, in cases where the negligent actor has special reason to know that some member of a limited group will rely on the information misrepresented. M. Miller Co. v. Central Contra Costa Sanitary Dist., 198 Cal.App.2d 305, 18 Cal.Rptr. 13 (1961). Other courts have denied recovery in this last category of cases. Texas Tunneling Company v. City of Chattanooga, 329 F.2d 402 (6th Cir. 1964). The case law referred to above has been adopted by the Restatement (Second) of Torts § 552 (1964).

Westerhold and Aluma Kraft Manufacturing Co. do not support the plaintiff’s position. There is no allegation of representation to afford a basis for the application of those cases or Restatement (Second) of Torts § 552 (1964).

What Crum seeks by this argument is an extension of the rule of these cases to a negligent act which interferes with a contract of the plaintiff. The case law in Missouri contains statements following the general rule that the law does not protect a contractual interest from mere negligent interference. Frank Horton & Co., Inc. v. Diggs, 544 S.W.2d 313, 316 (Mo.App.1976), where the cases supporting that proposition are cited and the rationale given that such a remedy would unduly burden freedom of action and impose too severe a penalty for inadvertence. The entire spectrum of case law and treatises in this area is examined in a note entitled, Negligent Interference with Contract: Knowledge as a Standard for Recovery, 63 Va.L.Rev. 813 (1977), where it is suggested the tort of negligent interference with contracts be recognized and recovery be limited to those situations where the tortfeasor had knowledge of the risk of harm to the plaintiff. Even if this rationale were adopted, Crum’s pleading would fail in the instant case as to Havens because no special knowledge by Havens of the risk of harm to Crum is even intimated. As to Lindgren, if the plaintiff’s theory that it is a joint tortfeasor be accepted, then it is likewise true that no facts are pleaded, and no inference arises that Lindgren was aware of the special risk of delay arising from the claimed negligence.

The cases cited by Crum in support of its tort theory are inapposite since they are all cases where a negligent act arising out of the performance of a contract results in physical harm.

Crum has not appealed from the order dismissing Count II as to Pennsylvania, and that issue is concluded.

Lindgren asserts that the petition should be dismissed because there is no such entity as the joint venture described in plaintiff’s petition. The motions which are addressed in this opinion were filed on behalf of the joint venture, and no issue was made by those motions as to a lack of capacity. Rule 55.13 requires such an issue be raised by specific negative averment in the pleadings. The point is denied.

The cause is affirmed as to the trial court’s dismissal of Count II, the trial court’s dismissal of Count I as to Pennsylvania is affirmed, and the trial court’s dismissal of Count I as to Lindgren is reversed, and the cause is remanded with directions to reinstate Count I of the petition as to Lindgren only.

All concur.


author: SHANGLER, Presiding Judge.

text:
    In the Matter of the Formation of the Community Care Nursing Home District. OPPONENTS TO the PETITION FOR FORMATION OF the COMMUNITY CARE NURSING HOME DISTRICT, Appellants, v. PETITIONERS FOR FORMATION OF COMMUNITY CARE NURSING HOME DISTRICT, Respondents.
    No. KCD 28880.
    Missouri Court of Appeals, Kansas City District.
    Feb. 27, 1978.
    Motion for Rehearing and/or Transfer Denied April 3, 1978.

      Richard J. Blanck, Conway & Blanck, Boonville, for appellants.
    Inglish & Calhoun, John W. Inglish, J. Rockne Calhoun, California, for respondents.
    Before SHANGLER, P. J., WASSER-STROM, J., and MASON, Special Judge.
   SHANGLER, Presiding Judge.

A petition for the formation of a nursing home district was brought in the County Court of Cooper County under the provisions of §§ 198.200 to 198.350, RSMo 1969. In accordance with the procedures of statute, the court conducted a hearing after notice and determined the petition was not proved by competent and substantial evidence and so did not support a call for election. On review the circuit court reversed the decision of the county court, determined that the proof on the petition met the requirements of law, and ordered that an election be called.

The appellants are electors resident in the townships within the proposed district who object to the petition. On this appeal the objectors contend the circuit court was without power to review the county court judgment because the transcript of that proceeding was not filed within the statutory time. They contend also that there was not sufficient proof to support elements of the statutory proceeding.

As to the first point: § 49.230, RSMo 1969, provides that appeals from quasi-judicial orders of county courts shall be made within ten days of decision, and that within thirty days after the appeal is taken [unless the matter be continued for cause] “the county court . . . shall certify to the circuit court all documents and papers on file in the matter, together with a transcript of the evidence, decision, findings and order, which become the record of the cause.” [Emphasis added] Objectors read In Re Village of Lone Jack, 419 S.W.2d 87 (Mo.banc 1967) to construe § 49.230 to place the onus of the certification of the record of the County Court proceeding on the party who seeks the review. That case determines, not the appeals procedure of § 49.-230, but the procedure of § 49.225 for a stenographic record. That case held [1. c. 90] that a judicial proceeding by the Court could not be reviewed without a transcript of the evidence — and that since § 49.225 makes such a record as available to one party as to the other, a litigant who seeks review under the Administrative Procedure and Review Act [Chapter 536] must ensure the stenographic preparation of the evidence.

The objectors excerpt from the opinion [1. c. 90]:

“ . . . Parties desiring that their interests be reviewed in accordance with § 536.140 will see to it that the full record necessary for proper review is certified to the initial reviewing court . . . ”

to mean that an appellant from a decision of the county court must not only prepare the record but ensure its certification by the county court to the circuit court within thirty days of appeal. The plain language of § 49.230, however, directs that the county court shall certify the record to the circuit court, and indeed, it would be neither decorous nor effective to impose on a litigant the initiative to authenticate a judicial proceeding. The question posed, and decided, in Lone Jack was merely that the party who seeks review from a quasi-judicial proceeding before the county court must make provision for the transcription of the evidence so that a proper record can be certified to the court of review. In fuller context — as the excerpt explains — there can be no significant determination whether an administrative order is supported by competent and substantial evidence in the absence of a record which fully shows the proceedings.

The dispute as to whom the law rests the duty to certify the.record to the circuit court arises because that procedure was not perfected within thirty days after the appeal was taken — the statutory period. The proponents of the petition, who suffered the adverse decision of the county court, gave a timely order for the transcription of the evidence and thereafter obtained an extension of time for that purpose from the circuit court with jurisdiction of the appeal. The transcript and other documents in the cause were before the county court which, nevertheless, neglected to certify the record to the circuit court within the time directed by law. It was not until proponents of the petition — then appellants — sued out a writ of mandamus against the county court that the certification was perfected to the court of review. The law requires only that an appellant provide for the transcription of the testimony of witnesses, a duty the proponents of the petition acquitted. The initiative to certify the full record was with the county court. The [then] appellants cannot be charged with the intransigence to perform a duty the law imposes upon another.

The objectors attempt two other points which reduce to the basic contention that the proponents failed to prove two elements of the petition: the municipalities within the proposed area and the assessed valuation of the proposed district. There is no issue as to the three other components of proof required by § 198.210 to form a nursing home district: the name, a description of the territory to be embraced, and the population — which shall not be less than two thousand inhabitants.

There was no attempt to prove that Pilot Grove, Otterville and Blackwater, the municipalities the petition describes to fall within the proposed district, are sited there. There was competent proof by metes and bounds, however, that Blackwater, Pilot Grove, Lamine, Clear Creek, Lebanon and Otterville townships are within Cooper County and embraced in the proposed district. An appellate court may take judicial notice from the County Subdivisions, Townships and Places depiction of the 1970 Census [Exhibit No. 2] that Pilot Grove, Otter-ville and Blackwater are municipalities within the townships of the same designations.

The statute requires also that the petition shall set forth “the assessed valuation of the area which shall not be less than $2,500,000”. The proponents pleaded $10,-158,852 for the area encompassed by the petition. The objectors contend that there was no substantial evidence for that critical element of proof and so the requirements of statute were not met and the judgment of the circuit court which sustained the petition and called an election was an error of law.

The proponents undertook this salient proof by the testimony of Chamberlin, former Assessor of Cooper County. All their other evidence on this issue was essentially supportive and not independently probative of the assessed valuation of the area proposed for the nursing home district. The objectors gave no evidence in rebuttal, so the decision on the petition rests altogether on the competency of the Chamberlin testimony.

The method employed to prove the assessed valuation of the proposed nursing home district proceeded on this logic:

The boundary of the proposed district encompassed six townships: Lebanon, Pilot Grove, Otterville, Clear Creek, Blackwater and Lamine. These townships [and hence the proposed nursing home district] fell within three school districts: Pilot Grove, Otterville and Blackwater. The tax rolls were not classified by township but were arranged by school district, so that the actual taxes apportioned and paid over to each school district were readily shown. The witness Chamberlin, who was called by the proponents for this testimony, concluded that although an assessed valuation of the six townships which constituted the proposed nursing home district was possible of precise determination, because the tax records were not arranged as to township, that procedure would be tedious. He concluded also that since the statute required only $2,500,000 be proved for an area which — as former Assessor — he knew far exceeded that base, he could properly use the readily known tax receipts from the three school districts which the six townships [and hence the proposed nursing home district] fell to extrapolate the proportionate value attributable to the six townships and so come to a valid assessment for the proposed district.

On these premises, witness Chamberlin received from the deputy county clerk the contents of tax records verbally “certified” to him as the receipts apportionable to the three school districts within which the six townships lay. These tax books contained the records for entire Cooper County and had been received by the county clerk from the county assessor. Chamberlin gave over to Ms. Scott, then County Collector, the tax totals payable to the three school districts, verbally accounted to him by the deputy county clerk and, by a formula not in dispute here, Ms. Scott calculated the assessed value of the three school districts at $11,158,852. From this base, witness Chamberlin took into account that the area of the three school districts exceeded that of the six townships and made allowance for the overlap by the subtraction of $1,000,000 from the assessed valuation of the school districts, and so derived his proof that the value of the proposed area was $10,158,852 as pleaded. The witness acknowledged that the extrapolation of value for the area outside the townships was merely an estimation.

The proponents of the petition argue that the law does not require a precise proof of assessed valuation, which although possible is not feasible, but that substantial compliance with the statutory elements suffices. This argument confounds evidence with proof. Evidence is merely the means to proof. Proof results from evidence which convinces the mind of an ultimate fact. Wicecarver v. Mercantile Town Mutual Ins. Co., 137 Mo.App. 247,117 S.W. 698, 702[11] (1909); 20 Am.Jur.2d Evidence, § 2. Not all that convinces and so tends to prove an issue constitutes legal evidence, however; it must also be admissible in a court of justice. Hearsay evidence is of a species not competent to prove a fact, and therefore inadmissible. Shaw v. Terminal Railroad Association of St. Louis, 344 S.W.2d 32, 35[1] (Mo.1961). That is because such evidence derives value, not from the credit of the witness upon the stand, but — at least in part — from the veracity and competency of some other source not open to cross-examination. State v. Gorden, 356 Mo. 1010, 204 S.W.2d 713, 714[3] (1947). The case for the proponents of the petition rests on a hearsay, and therefore fallible, postulate: that the verbal recount to witness Cham-berlin by the deputy county clerk of the tax record receipts payable to the three school districts was a source of lawful proof to calculate the assessed valuation of the school districts and, ultimately, the extrapolation of the value for the proposed nursing home district. The validity of this evidence did not rest altogether on the trustworthiness of witness Chamberlin, but on the veracity of the deputy county clerk and, primarily, upon the records which her descriptions purported to reflect. That testimony was incompetent hearsay, objected to as such, and was without probative effect.

Although county courts are no longer judicial tribunals in the constitutional sense but have become administrative bodies [Article 5, § 1; Article 6, § 7, Mo. Const.1945; Rippeto v. Thompson, 358 Mo. 721, 216 S.W.2d 505, 507[3, 4] (1949)], the fundamental rules of evidence appertain when the courts act in the judicial function. In that function, hearsay evidence does not constitute competent and substantial evidence essential to the validity of the final decision. State ex rel. Horn v. Randall, 275 S.W.2d 758, 763[7 — 9] (Mo.App.1955).

The proponents failed another proof: there was no substantial evidence as to the contours of the three school districts and how those bournes differed from those of the proposed nursing home district. The boundary of the six combined townships were shown by metes and bounds. The boundary of the three school districts were shown by an exhibit [No. 9] which was admitted “subject to its irregularities”. There was no evidence — other than that deducible by translation of metes and bounds of the townships description to the representation by map of the school districts — of the extent of the overlap between the two areas.

We agree with the proponents that the law does not require perfect proof, but only that proof by the most certain evidence the circumstances admit. We agree also that under these circumstances, where the precise proof of assessed valuation of the proposed district would require a laborious, line by line calculation of each taxpayer of the component townships, the method of proof by extrapolation adopted by the proponents — if based on competent evidence — suffices to reach the ultimate fact with reasonable certainty. The basic evidence upon which the proof of the petition rests, however, is hearsay and substitu-tionary, even though the documentary best evidence was available. It is apparent from the proceedings that competent evidence to prove the assessed valuation of the proposed nursing home district is available to the proponents from tax records and official descriptions of the encompassed townships and school districts. We remand the cause to afford them opportunity to prove the petition.

Accordingly, the judgment of the circuit court which found, as a matter of law, that the petition was proved by substantial and competent evidence on the whole record is reversed with directions that the cause be remanded to the County Court of Cooper County for a new trial on the petition.

All concur.

      . The tax records by which witness Chamberlin attempted to prove the assessed valuation of the proposed district were Railroad and Utility Assessment and Tax Book [Exhibit No. 4], the Personal Property Tax Book [Exhibit No. 5] and the Real Estate Tax Book [Exhibit No. 6]. These tax books were for entire Cooper County, classified as to school district, but not as to township. The status of each exhibit as evidence is doubtful, because each of them was received for some “limited purpose” or with other proviso. The school district map [Exhibit No. 9], intended to corroborate the extrapolation by witness Chamberlin of the value between the townships-school districts overlap and so derive the assessed valuation of the proposed nursing home district, was received “subject to its irregularities”. There were no findings and so no indication of the effect given to this evidence by the County Court — or for that matter by the Circuit Court which determined the evidence for the petitioners as a matter of law. These tentative rulings on the exhibits were made by the Cooper County prosecutor who — presumably on his understanding of the duty imposed on his office to the county court by § 56.070, RSMo 1969 — not only exercised the judicial function as to which evidence was admissible, but ruled objections and also systematically cross-examined witnesses for the proponents. This practice was not contested on appeal.


author: ANDREW JACKSON HIGGINS, Special Judge.

text:
    MECHANIC’S TOOL SALES, INC., Plaintiff-Respondent-Appellant, v. FEDERATED MUTUAL INSURANCE COMPANY, Defendant-Appellant-Respondent.
    Nos. KCD 29207 and 29248.
    Missouri Court of Appeals, Kansas City District.
    Feb. 27, 1978.
    Motion for Rehearing and/or Transfer Denied April 3, 1978.
    Carson, Monaco, Coil & Riley, P. C., Ronald R. McMillin, Jefferson City, for Mechanic’s Tool Sales, Inc.
    Hendren & Andrae, Kelly Pool, Jefferson City, for Federated Mut. Ins. Co.
    Before WELBORN, Special Judge Presiding, and PRITCHARD, J., and HIGGINS, Special Judge.
   ANDREW JACKSON HIGGINS, Special Judge.

Action on insurance policy by Mechanic’s Tool Sales, Inc., to recover damages for loss of property by theft and 10% additional damages for vexatious delay and for attorney’s fees. Judgment following trial to the court was for plaintiff for $7,000 damages for loss of property.

Appeal (29,207) by Federated Mutual Insurance Company contending: (I) Plaintiff’s loss occurred while the property was in care, custody or control of salesmen with recovery limited by the policy to $4,000; (II) The loss did not occur while the property was in transit and, if the persons in care, custody or control of same were not salesmen, recovery is limited to $2,000. Appeal (29,248) by Mechanic’s contending: (I) Neither person in care, custody or control of property was a salesman and plaintiff is entitled to $10,000; (II) Vexatious delay penalties should have been awarded because defendant had no reasonable basis for denial of plaintiff’s claim.

The contentions present a question of the extent of liability under undisputed facts. Affirmed.

Mechanic’s Tool Sales, Inc., Cuba, Missouri, is a family business with all stock owned by Edward Shapiro, his son Bruce, and their wives, engaged in the sale of mechanics’ tools.

Sales are made to “wagon jobbers” or route salesmen who in turn sell at retail to automobile supply houses and garages in Missouri and Illinois. Sales are made from special walk-in vans where merchandise is displayed on racks, and prospective purchasers enter the van to select the merchandise they wish to buy. Plaintiff owned seven to nine vans, all insured under the policy in issue.

Salesmen retain part of the purchase price, the percentage depending upon whether the salesman secures his own financing or is financed by plaintiff. Salesmen are not on the company’s payroll; they manage their individual businesses and pay their own withholding tax. Plaintiff established salesmen’s territories. Some salesmen leased vans from plaintiff.

On November 20, 1973, two of plaintiff’s vans were stolen while parked overnight at a motel in St. Louis. One van contained merchandise valued at $17,621.88; the other contained merchandise valued at $10,931.08. The vans were under operation by Bruce Shapiro, plaintiff’s vice president, and Richard Crossman, its route supervisor, who, for two weeks, had been servicing two routes upon which salesmen had discontinued their relationship with plaintiff. “Servicing” a route consisted of collection of regular credit payments to maintain plaintiff’s cash flow, selling tools, maintaining service on previous sales to maintain customer contact during search for a replacement salesman, and generally doing the things done by regular salesmen. They spent evenings interviewing prospective replacement salesmen.

Both Mr. Shapiro and Mr. Crossman occasionally and temporarily serviced routes left vacant by a terminated salesman. Mr. Shapiro was ordinarily involved in company management; Mr. Crossman was generally involved in selection of salesmen and generation of sales in all the company’s territories. Neither received sales commissions as part of their compensation.

Defendant’s policy provided:

“II. LIMITS OF LIABILITY
“Subject to the provisions with respect to the Company’s percentage of the total of the limits of liability for all contributing insurance, coverage under this form applies to each of the following for which a limit of liability is specified.
* * *
“B. Property at locations not owned, leased, operated or regularly used by the insured, except property covered under * * * 0
“$10,000 in the aggregate at all such locations, not to exceed $1000 at any one location * * *.
“C. Property in the following situations:
“1. $5000 on property in transit (other than property in the care, custody or control of salesmen) on any one vehicle owned, operated or leased by the insured.
“2. $2000 on property in the care, custody or control of any salesman away from the insured’s premises 9k * * »

The court, in arriving at its judgment for plaintiff for $7,000, necessarily found that either Bruce Shapiro or Richard Crossman was plaintiff’s salesman and the other was not; and that plaintiff’s lops occurred while its property was in transit. Such findings and judgment are to be sustained unless there is no substantial evidence to support them, unless they are against the weight of the evidence, or unless they erroneously declare or apply the law. Rule 73.01, as construed, Murphy v. Carron, 536 S.W.2d 30, 32[1-3] (Mo. banc 1976).

The evidence shows that Mr. Shapiro and Mr. Crossman were, in many respects, similarly engaged on behalf of plaintiff, including sales, at the time of its losses. There were, however, notable differences. The losses were from two separate vans, one in the care, custody and control of Mr. Shapiro, an executive officer of plaintiff, temporarily involved with continuity of sales, the other in the care, custody and control of Mr. Crossman, an employee of plaintiff responsible for sales. The policy places a greater risk on property in custody of salesmen, and does not define “salesman,” in which case the distinction permitted the court to determine from extrinsic evidence that Mr. Shapiro was not, and that Mr. Crossman was, a salesman in custody of plaintiffs property. Cf. Cann v. M & B Drilling Co., 480 S.W.2d 81, 86 (Mo.App.1972), cited under Section 409.401, V.A.M.S., which distinguishes executive officers from “salesmen” for purposes of the Missouri securities law. In the circumstances, defendant’s liability was properly calculated at $5,000 for the loss from Mr. Shapiro’s van and $2,000 for the loss from Mr. Crossman’s van.

The evidence shows that the property lost through the theft of plaintiff’s vans was property that was loaded in the vans at Cuba, there to remain until delivered or sold to a customer on a sales route or returned to plaintiff’s warehouse in Cuba. Such permitted the court to determine that the property in Mr. Shapiro’s van was “in transit” in satisfaction of policy situation II, C, 1. See Rupp v. Hanover Fire Ins. Co., 311 S.W.2d 58 (Mo.App.1958), where a tank-truckload of gasoline was “in transit” until delivery had been completed which would not oiicur until the gasoline had been discharged and the hose disconnected, and fire occurring when the truck was partially unloaded was covered by defendant’s policy. Cf. Whitehall Company, Ltd. v. New Hampshire Ins. Co., 361 Mass. 865, 281 N.E.2d 234 (1972), where shipment of merchandise stolen while at rest for two weeks at its ultimate destination was not “in transit” for purposes of insurance coverage; Simons v. Niagara Fire Ins. Co., 398 S.W.2d 833 (Tex.Civ.App.1966), where insured’s grain stored in third person’s elevator and removed by truck by unauthorized persons was not “in transit”; and San-Nap-Pak Mfg. Co. v. Firemen’s Ins. Co., 47 N.Y.S.2d 542 (1944), where goods damaged by flood while loaded on insured’s truck but in the warehouse on Saturday prior to delivery on Monday were “in storage” and not “in transit.”

This record demonstrates a genuine dispute and thus reasonable cause for defendant to require an adjudication in which case there is no error in the court’s refusal to award damages for vexatious delay. Whited v. Nat. Western Life Ins. Co., 526 S.W.2d 364, 369 (Mo.App.1975).

Judgment affirmed.

All concur.


author: TURNAGE, Judge.

text:
    STATE of Missouri, Plaintiff-Respondent, v. James Allen MERRIETT, Defendant-Appellant.
    No. KCD 29287.
    Missouri Court of Appeals, Kansas City District.
    Feb. 27, 1978.
    Motion for Rehearing and/or Transfer Denied April 3, 1978.

      Glen A. Dietrich, Larry L. Zahnd, Zahnd & Dietrich, Maryville, for defendant-appellant.
    John D. Ashcroft, Atty. Gen., Nannette Laughrey, Asst. Atty. Gen., Jefferson City, for plaintiff-respondent.
    Before SOMERVILLE, P. J., and DIXON and TURNAGE, JJ.
   TURNAGE, Judge.

James Merriett was convicted of burglary in the second degree and stealing. §§ 560.-070 and 560.156, RSMo 1969. The jury assessed punishment at two years imprisonment on each charge.

On this appeal Merriett contends the evidence is insufficient to sustain the conviction, the information was improper because it contained an erroneous statute number, and the verdict was not in proper form. Affirmed.

The evidence would justify the jury in finding the following facts. The West Nod-away School District owned a 3-M Thermo-fax copy machine located in the Quitman Elementary School. In December, 1975, the officials at Quitman noticed a window and door pane had been broken. Outside the broken window a book of instructions regarding the Thermofax machine was found. It was not until school resumed in January that the copy machine was discovered to be missing. School officials testified the building had been locked and secured at the time the broken glass was discovered and no one had permission to enter or remove any property.

A short time later a deputy sheriff acting on a tip discovered the copy machine in the trunk of a car belonging to Floyd Olson. Olson testified Merriett had borrowed his car and later told Olson he “got” the copy machine from the Quitman School and placed it in the trunk of Olson’s car.

On appeal the facts in evidence and the favorable inferences to be drawn therefrom must be considered in the most favorable light to the State and all evidence and inferences to the contrary must be disregarded. State v. Franco, 544 S.W.2d 533, 534[1-4] (Mo. banc 1976). Under the rule it is apparent the jury could have found Mer-riett committed the burglary at the Quit-man School and stole the copy machine and placed it in Olson’s trunk.

Merriett, however, argues the insufficiency of the evidence on the basis the evidence was wholly circumstantial and there was no evidence to place Merriett at the scene of the burglary. The flaw in Merriett’s argument is his characterization of the evidence as being circumstantial. The admission by Merriett that he “got” the copy machine from the Quitman School was direct evidence because it was an admission on the part of Merriett. State v. Cox, 352 S.W.2d 665, 670[2, 3] (Mo.1961).

The jury was entitled to infer from this statement that Merriett broke and entered the school and stole the machine when this admission is taken with the evidence of the forcible entry into the school and the direct evidence that the copy machine was stolen therefrom. This case does not fall within the rule applicable to circumstantial evidence cases because it is not based upon circumstantial evidence but on direct evidence.

Merriett next contends the information was fatally defective because it referred to § 560.045 which proscribes the breaking into of a dwelling house. The body of the information fully described the building which had been broken into and entered as a school building and identified the owner as the West Nodaway School District. Merriett could not have been misled as to the identity of the building with which he was charged with breaking and entering. The citation of any statute was unnecessary and the citation to an erroneous statute number will be considered as surplusage. State v. Aston, 412 S.W.2d 175, 182[13] (Mo.1967). There was no prejudice shown by the reference to the erroneous number and none is discerned.

Merriett finally contends the verdict of the jury was not in proper form, was equivocal and indicated an obvious compromise as to his guilt or innocence. Merriett’s argument is based on a statement added to the conventional verdict form by the jury “and the jury recommends leniency.” Mer-riett concedes the case law in Missouri is contrary to his position but argues the verdict was an obvious compromise and equivocal. Merriett does not demonstrate how he arrives at the compromise or equivocal nature of the verdict apart from the statement concerning leniency.

A reference by the jury to leniency in their verdict was held to be surplusage in State v. Churchill, 299 S.W.2d 475, 479[14, 15] (Mo.1957). Absent any showing as to how the inclusion of the recommendation for leniency in this verdict resulted in any prejudice to Merriett, the rule in Churchill should be followed.

The judgment is affirmed.

All concur.