author: BARDG1TT, Judge.

text:
    Maurice S. KINGSLEY, Appellant, v. Albert J. BURACK et al., Respondents.
    No. 59081.
    Supreme Court of Missouri, En Banc.
    April 14, 1976.

      William C. Maier, Dubail, Judge, Kilker & Maier, St. Louis, for appellant.
    Gideon H. Schiller, Ackerman, Schiller & Schwartz, Clayton, for respondents.
   BARDG1TT, Judge.

Plaintiff-appellant’s action was dismissed by the trial court for failure to join a necessary party and an appeal was taken to the Missouri court of appeals, St. Louis district, where, by opinion, the order of dismissal was affirmed. On application of appellant, the case was transferred here by order of this court because the circuit court’s ruling and the court of appeals opinion presented a serious challenge to the scope of S.Ct.Rule 52.04 as amended effective December 1, 1972, Art. V, sec. 9, Mo.Const.1945, as amended. S.Ct.Rule 83.03.

On September 20, 1973, plaintiff-appellant (hereinafter plaintiff) sued defendants alleging plaintiff was the owner of a one-half interest in an apartment complex; that plaintiff entered into an oral contract with his co-owner (unnamed) whereby each co-owner was to supply fifty percent of the purchase price of the complex and each was to receive fifty percent of the rents and profits therefrom; that in June 1973 defendants Buracks, individually and as agents of the Alson Real Estate Co., knowingly and wilfully represented to the tenants of the apartments that they were the authorized managers of the apartments knowing the same to be false, and pursuant to such misrepresentations collected rents from the tenants and deposited same to the account of Alson which money was due to plaintiff; that plaintiff demanded the defendants cease the misrepresentation and remit to plaintiff fifty percent of the rents collected but defendants have wilfully refused to do so; that since June 1973 to date of suit, plaintiff was damaged in the sum of $3,000 per month. Plaintiff prayed judgment for $12,000 plus $3,000 per month from October 1973 until defendants ceased the false representation and punitive damages of $50,000 against each defendant.

On November 27,1973, defendants filed a verified motion to dismiss denying plaintiff’s allegations that he was an individual owning a one-half interest in the apartment complex; that the unnamed co-owner alleged in plaintiffs petition is plaintiff’s wife Shirley; that the sole interest of plaintiff in the complex is that of joint tenant, and sought dismissal on the ground that the action could not be maintained without joining plaintiff’s wife, the joint tenant, as a necessary party.

On December 6, 1973, the trial court entered the following order: “Defendants’ Verified Motion to Dismiss argued, submitted and sustained. Plaintiff granted thirty days within which to join joint tenant as a party plaintiff or defendant, otherwise cause shall stand as dismissed.” Plaintiff then appealed the order of dismissal.

Since the verified motion to dismiss was undenied, it constituted competent evidence as to the facts stated therein. Litzinger v. Pulitzer Publishing Company, 356 S.W.2d 81, 87[2] (Mo.1962); Rule 55.28.

The verified motion established that the unnamed co-owner was plaintiff’s wife and their interest in the premises was that of joint tenants.

We will not undertake to categorize the nature of plaintiff’s suit on the record before us as it is not necessary to do so. There have been no motions attacking the petition nor any responsive pleadings filed. The only motion filed by defendants sought dismissal for failure to join the co-owner joint tenant. It appears that the case was dismissed solely for failure to join the co-owner.

Plaintiff contends the trial court had no authority to dismiss for nonjoinder under Rule 52.06, entitled “Misjoinder and Non-joinder of Parties”, which provides:

Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately.

The substantive provision of 52.06 prohibits dismissal for misjoinder. It does not prohibit dismissal for nonjoinder. The word “nonjoinder” appears in the title because the rule, in part, provides that parties may be added by order of court on motion of a party or on the court’s own initiative. If a party is to be added, it is obvious that such party was not a party under the original pleadings — not having been joined (non-joinder) in the original petition. Rule 52.06, therefore, does not, in itself, either authorize or prohibit dismissal for nonjoinder.

Plaintiff cites Mercantile Trust Company v. Chase Hotel, Inc., 510 S.W.2d 807 (Mo.App.1974). There the circuit court dismissed a two-count petition on three grounds, one of which was failure to join a defunct corporation as a defendant. In the opinion the court of appeals held, inter alia, that misjoinder is not a ground for dismissal citing Rule 52.06 which is, of course, correct, and after ruling on other issues reversed and remanded for further proceedings. It appears from the factual statement that the case involved nonjoinder rather than misjoinder, and so Rule 52.06 was probably not the applicable rule, but the other and more important issues upon which the decision of the court of appeals was based make it clear that the result reached was correct and would have been the same even if the court had considered the joinder issue under Rule 52.04 rather than Rule 52.06.

The point is overruled.

Rule 55.27(a)(7) provides that a party may raise by motion or responsive pleading failure to join a party under Rule 52.04. When the issue is whether the suit should proceed or be dismissed for failure to join a person as a party (nonjoinder), Rule 52.04 is the procedural rule which controls the matter.

Rule 52.04 provides:

(a)Persons to be Joined if Feasible. A person shall be joined in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant.
(b) Determination by Court Whenever Joinder not Feasible. If a person as described in subdivision (a)(l)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent party being thus regarded as indispensable. The factors to be considered by the court include: first, to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; second, the extent to which by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for non-joinder.
(c) Pleading Reasons for Nonjoinder. A pleading asserting a claim for relief shall state the names, if known to the pleader, of any persons as described in subdivisions (a)(l)-(2) hereof who are not joined, and the reasons why they are not joined.
(d) Exception of Class Actions. This rule is subject to the provisions of Rule 52.08.

The record in this case does not show the basis upon which the trial court dismissed the action other than in a conclusionary sense — failure to join plaintiff’s wife Shirley as a plaintiff or defendant. Nor does it reveal that the trial court considered the matter upon the criteria set forth in Rule 52.04.

Defendants seek to uphold the trial court’s dismissal upon the basis that plaintiff and his wife are joint owners of the apartment complex; that the nonparty joint tenant is, therefore, a “necessary” party and, consequently, and as a matter of law, an indispensable party. This position is arrived at by restricting the consideration to be given to the issue of dismissal under Rule 52.04 for nonjoinder to the conceptual aspects of a joint tenancy. Defendants’ position disregards the pragmatic approach required by the rule and equates “necessary” with “indispensable”. The rule proceeds on the basis that a person may be conceptually necessary but nevertheless allows the suit to proceed unless the absent party is pragmatically indispensable in the particular ease. Whether or not a person is an indispensable party must be determined by applying the criteria of the rule, and the finding of indispensability is the end result — not the starting point.

Rule 52.04 is virtually the same as Rule 19 F.R.Civ.P. with references to jurisdiction and venue eliminated. The identifications of the comparable paragraphs and phrases of both rules by number and letter are also the same which makes comparison between the two a bit easier. Rule 19 F.R.Civ.P. was adopted by the United States Supreme Court in February 1966, effective July 1, 1966. In 1968, about five years before Rule 52.04 became effective in Missouri, the United States Supreme Court decided Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 773, 19 L.Ed.2d 936 (1968), which is the leading case construing Rule 19 F.R.Civ.P.

Numerous federal cases have been decided following Provident Tradesmens. See Vol. 28 U.S.C.A. Rule 19 and pocket part supplement. Since Rule 52.04 is practically the same as Rule 19, it is appropriate to use federal precedents as a guide to application of Rule 52.04. Conrad v. California Unemployment Insurance App. Bd., 47 Cal.App.2d 237, 120 Cal.Rptr. 803 (1975); cf. Adams Dairy Company v. National Dairy Products Corp., 293 F.Supp. 1135 (W.D.Mo.1968); State v. Anderson, 515 S.W.2d 534 (Mo. banc 1974).

One of the leading cases which relied upon and incorporated much of the language of Provident Tradesmens is Wright v. First National Bank of Altus, Oklahoma, 483 F.2d 73 (10th Cir. 1973), in which the court of appeals reversed the district court’s dismissal of an action under Rule 19 F.R. Civ.P. for failure to join a party. At 74-75, the court stated:

Rule 19, F.R.Civ.P., provides in its ¶ (a) for joinder if feasible and in its ¶ (b) for determination by the court of action to be taken when joinder is not feasible. A decision to proceed under ¶ (a) is a decision that the absent person is merely “necessary” while a decision to dismiss under ¶ (b) is a decision that the absent party is “indispensable.” Provident Tradesmens Bank v. Patterson, 390 U.S. 102, 118, 88 S.Ct. 733, 19 L.Ed.2d 936.
In its judgment of dismissal the district court found that Altus “is a necessary party to the action.” This is not enough to justify dismissal. The plain wording of ¶ (b) permits dismissal only when a party is indispensable. Accordingly, the dismissal violates the rule and cannot stand.
If the use of the word “necessary” was a mere inadvertence, and nothing shows that it was, the question is whether the other conditions of ¶ (b) have been met. It there says that the court shall determine “whether in equity and good conscience the action should proceed among the parties before it,” and in making such determination four factors are to be considered. These are (1) prejudice to the absent party or to those already parties, (2) the lessening or avoiding of prejudice by protective provisions in the judgment, by shaping relief, or by other measures, (3) the adequacy of the judgment which might be entered in the person’s absence, and (4) the adequacy of a remedy if the action is dismissed for nonjoinder.
The trial court made no determination whether “in equity and good conscience” the case could proceed. It said “complete relief cannot be afforded the remaining parties for all the reasons set out in Rule 19, FRCP; that Plaintiffs have an adequate remedy in State Court upon the dismissal of the Petition in this case; * ⅜ *11 These conclusionary statements are of no value because the court finds no facts to support them. In Provident Tradesmens Bank v. Patterson, 390 U.S. 102, 119, 88 S.Ct. 733, 743, 19 L.Ed.2d 936, the Court said:
“Rule 19 does not prevent the assertion of compelling substantive interests; it merely commands the courts to examine each controvery [sic] to make certain that the interests really exist. To say that a court ‘must’ dismiss in the absence of an indispensable party and that it ‘cannot proceed’ without him puts the matter the wrong way around: a court does not know whether a particular person is ‘indispensable’ until it has examined the situation to determine whether it can proceed without him.”
As far as the record before us shows, the trial court made no such determination. It did not comply with the rule.

In Provident Tradesmens, the United States Supreme Court further pointed out that a determination that a nonjoined person is a “necessary” party does not end the inquiry. The Supreme Court said at 108, 88 S.Ct. at 737, “We may assume, at the outset, that Dutcher [the nonjoined person] falls within the category of persons who, under sec. (a), should be ‘joined if feasible’.” As pointed out in Wright v. First National Bank, supra, a decision under par. (a) that a party should be “joined if feasible” is a finding that he is a “necessary” party but not a determination that he is “indispensable”. The determination of indispensability or not is yet to be made and is to be made under par. (b).

So it is seen that Rule 19 F.R.Civ.P. and our Rule 52.04 anticipate that a non-joined person may conceptually and actually be a “necessary” party but that the action will nevertheless proceed without him unless he is found to be indispensable by applying the criteria of par. (b). The considerations set forth in par. (b) are pragmatic.

Defendants’ argument starts with the fact of a joint tenancy and points out that each joint owner has an interest in the subject of the action; that a payment to one of several joint obligees will usually discharge the obligation; that disposition of the action without a joinder of the joint tenants might impede the absent party’s ability to protect his or her interest and might cause the defendants to incur substantial risk of multiple or inconsistent obligations, and that all joint owners of real property must be parties to a suit to recover a claim arising out of the ownership of the property.

The court does not know the basis upon which the trial court ordered joinder and dismissed for failure to join. The court of appeals opinion reasoned that since the ownership of the complex was a joint tenancy the absent owner was a necessary party and on that basis sustained the trial court’s dismissal order.

Conceptually, all of the foregoing may well represent the various aspects or incidences of a joint tenancy and upon inquiry being made in a particular case may result in a finding that the nonjoined owner should be joined under 52.04(a). But this finding will not, of itself, warrant dismissal under the rule.

As noted supra, the finding that a non-joined person is a necessary party does not mandate dismissal. It requires consideration of whether the nonjoined person is indispensable in the practical circumstances of the particular case.

Whether or not the nonjoined co-owner’s interest or the interest of defendants will be prejudiced by proceeding; whether or not protective measures can be utilized to lessen or avoid prejudice; whether or not a judgment rendered in the nonjoined person’s absence would be adequate; and whether or not the plaintiff will have any adequate remedy if the action is dismissed, are all questions requiring consideration under 52.04(b) and, so far as this record is concerned, no consideration has been given to them.

In other words, Rule 52.04(b) comes into play after it is determined that the absent person is a necessary party and it is not feasible to join him as a party. If a person is found to be a necessary party under 52.04(a) and it is feasible to join him, then, of course, he must be joined.

In Keene v. Chambers, 271 N.Y. 326, 3 N.E.2d 443 (1936), plaintiffs sued for rent, taxes, and other sums due under a lease against their tenants. Chicago Title & Trust Co. was, in effect, one of the lessors by reason of an assignment of rents having been made to it by one of the owners. Plaintiffs had requested Chicago Title & Trust Co. to join with them but the request was refused. Defendants moved to compel the joinder of Chicago Title which motion was denied.

The New York Court of Appeals affirmed saying that if their then joinder rule applied, plaintiffs would be barred completely from any remedy to enforce defendants’ obligation under the lease because plaintiffs could not sue in Illinois, as defendants were not residents of that state, and New York had no jurisdiction over Chicago Title & Trust Co. Therefore, any order to make Chicago Title & Trust Co. a party would be futile and meaningless. The court said at 444-445, “To command a party to be brought in where there is no process to bring him in and no jurisdiction over him lacks sense. . . . Where any of such parties are without the state and cannot be served or brought into the action effectually, they need not be parties, and an order would be improperly granted which directed that they be made parties. ... If the plaintiffs collect the entire rent they must of course account to their cotenant for the latter’s share.”

Keene is noted as an example of a situation where, in Missouri, the absent person would probably be considered a necessary party under 52.04(a) but joinder may not be feasible under 52.04(b) upon the pragmatic considerations set forth therein.

Hypothetically speaking, it may appear in a particular case that one of the joint tenants is in another country and refuses to join in the action, or his whereabouts is totally unknown. If a plaintiff joint tenant cannot maintain any action to collect rents from the manager of the building or from the tenants without doing the impossible— joining the other owner — then he has no remedy and the wrong simply continues.

Rule 52.04(b) seeks to remedy such a situation by requiring a purely pragmatic inquiry to be made so that substantial justice can be done in spite of the conceptual incidences of a joint tenancy which perhaps would otherwise procedurally prevent the righting of a substantive wrong.

In the instant case, as in Wright v. First National Bank of Altus, Oklahoma, supra, “[a]s far as the record before us shows, the trial court made no such determination. It did not comply with the rule.” 483 F.2d at 75.

The result is that the trial court’s judgment of dismissal must be reversed and the cause remanded for further proceedings consistent with Rule 52.04 and this opinion.

The plaintiff in the instant case alleged the existence of a joint tenant but failed to state the information required under Rule 52.04(c). However, the failure to so plead does not appear to be the basis for the trial court’s order of dismissal and we will not assume to the contrary. On remand, plaintiff should amend his petition to comply with the appropriate rules and the matter can then proceed in accordance with Rule 52.04.

It is not to be inferred from this opinion that this court has adjudicated any question reference plaintiff’s petition or his alleged cause of action other than the particular issue on this appeal which is whether the dismissal was proper on this record under Rule 52.04.

The judgment of dismissal is reversed and the cause remanded for further proceedings consistent with Rule 52.04 and this opinion.

SEILER, C. J., and MORGAN, HOLMAN, HENLEY and FINCH, JJ., concur.

DONNELLY, J., dissents.

      . Ru1e references are to Missouri Rules of Court 1976 and V.A.M.S.; the numbers were in effect during pendency of this action.

      . For history and explanation of Rule 19 F.R.Civ.P., see Law of Federal Courts, 2d Ed., secs. 70, 71, by Charles Alan Wright.


source: Caselaw Access Project

author: HENLEY, Judge. DONNELLY, Judge

license: Public Domain

text:
    STATE of Missouri ex rel. CHAN SIEW LAI, Relator, v. Honorable Jack A. POWELL, Judge, Respondent.
    No. 59269.
    Supreme Court of Missouri, En Banc.
    April 14, 1976.
    Rehearing Denied May 5, 1976.
    Lincoln J. Knauer, Jr., Farrington, Curtis, Strong, Knauer & Hart, Springfield, for relator.
    Wayne C. Smith, Jr., and Nicholas R. Fiorella, Springfield, for respondent.
   HENLEY, Judge.

This is an original proceeding in which relator seeks to prohibit respondent from maintaining a temporary injunction enjoining a bank from paying its cashier’s check held by relator.

The injunction suit out of which this proceeding arose was filed April 22, 1975, in the circuit court of Greene county by Nathaniel Gunn, doing business as Cameo-Nixa (hereinafter Gunn) against the Empire Bank of Springfield (hereinafter the Bank). The allegations of the petition are, in substance, that Kin Tak Hong, also known as Chao Kin Tak (hereinafter Kin Tak), a broker of Hong Kong, represented to Gunn that he (Kin Tak) had a contract with others (unidentified in the record) whereby they agreed to purchase 60,000 metric tons of UREA, a fertilizer, and pay therefor $400.00 per metric ton, for delivery at an Indonesian port within one year; that relying upon these representations, he (Gunn) entered into a contract with Kin Tak in December, 1974, in which he agreed to sell and deliver, upon receipt and acceptance of a valid commercial letter of credit, and Kin Tak agreed to buy upon the above-stated terms and conditions not less than 60,000 metric tons of UREA. In connection with this agreement, Gunn and Kin Tak also entered into a supplemental contract in which it was agreed that Gunn would pay to Kin Tak certain “partial payments to be credited to the total amount [of commissions] to be earned by * * * Kin Tak” as broker. The petition further alleges (1) that 10,000 metric tons of UREA was thereafter sold, paid for and delivered in accordance with the contract and on April 17, 1975, pursuant to the supplemental contract, Gunn purchased from the Bank and it issued its cashier’s check for $150,000.00 payable to the order of Kin Tak, the latter having represented to him that the balance of the 60,000 tons of UREA would be purchased and paid for as provided in the contract; (2) that at the time of this representation Kin Tak knew, and had known since March 1975, that the contract of purchase had been cancelled by his customers and that he would not perform the balance of his contract with Gunn; (3) that after Gunn learned that the contract for purchase of UREA had been cancelled by Kin Tak’s customers he (Gunn) notified the Bank to stop payment on the check which, in the meantime, had been delivered to its payee by Gunn; (4) that by reason of the cancellation of the contract and this fraud practiced upon him by Kin Tak, he (Gunn) will suffer great loss and irreparable damages unless the Bank is enjoined from paying the cashier’s check; (5) that Gunn has no adequate remedy at law, because “all potential defendants are nonresidents of [this country] and [because of] the tremendous expense, delay and difficulty in the institution of [suits in] courts wherein the laws may not be the law under which these parties contracted”. In its answer, the Bank admitted issuance of the cashier’s check for $150,-000.00 payable to the order of Kin Tak, stated it had no knowledge regarding other allegations of the petition, and asked the court to make such order as the law required.

Shortly after respondent had issued a temporary injunction, the relator herein, Chan Siew Lai, intervened in the injunction suit and filed pleadings (a motion to dismiss and a petition) claiming, inter alia: (1) that he is the holder of the check and entitled to receive payment of the amount thereof; (2) that Gunn is without standing to sue to enjoin payment because not a party to the contract (evidenced by the cheek) between the Bank and the payee or the latter’s as-signee; (3) that the court is without jurisdiction to enjoin payment by the Bank under § 400.4-303, RSMo 1969; (4) that the petition fails to state facts showing loss or irreparable injury would be suffered by Gunn if payment is not enjoined, or to show that Gunn is without an adequate remedy at law; (5) that the petition should be dismissed and the temporary injunction dissolved.

There was no response by Gunn or the Bank to these allegations of intei venor-re-lator’s petition.

After presentation by intervenor (relator here) of his motion to dismiss the petition and dissolve the injunction, respondent announced that he would maintain the temporary injunction unless prohibited from doing so. Thereafter, relator sought and this court issued its provisional rule in prohibition. We now determine that the provisional rule should be made absolute.

Relator relies primarily on § 400.4-303, contending that under that section of the Uniform Commercial Code and in light of allegations that the fraud practiced was not upon the Bank but upon Gunn, respondent is without authority to terminate or suspend by injunction the Bank’s duty to pay its cashier’s check, and that in maintaining the injunction respondent is acting in excess of his jurisdiction. That section of the Code provides, in pertinent part, as follows:

“Any * * * stop-order received by [or] legal process served upon * * * a payor bank, whether or not effective under other rules of law to terminate [or] suspend * * * the bank’s * * * duty to pay an item * * * comes too late to so terminate [or] suspend * * * such * * * duty if the * * * stop-order or legal process is received or served * * after the bank has done any of the following:

(a) accepted or certified the item; * *.”

“Accepted,” as used in § 400.4-303(l)(a) means “acceptance” as that word is defined in § 400.3-410(1): “Acceptance is the drawee’s signed engagement to honor the draft as presented.”

A cashier’s check, unlike an ordinary check, is a check drawn by a bank on itself and is accepted by the mere act of its issuance. First National Bank of Kansas City v. Produce Exchange Bank of Kansas City, 338 Mo. 91, 89 S.W.2d 33, 39 (1935); 5B Michie, Banks and Banking (permanent edition), § 251; State of Pennsylvania v. Curtiss National Bank, etc., et al., 427 F.2d 395, 398-399 [1-3] (5th Cir. 1970). It is sometimes, as here, purchased by a party from a bank for issuance payable to the order of another as payee. Thus, when issued, it becomes the primary obligation of the bank (rather than the purchaser) to pay it from its own assets upon demand, and the purchaser has no authority to countermand a cashier’s check because of fraud allegedly practiced on the purchaser by the payee. Sections 400.3-413(1), 400.3-410(1), and 400.4-303(1)(a); State of Pennsylvania v. Curtiss National Bank, etc., et al., supra, at 398-399; Meador v. Ranchmart State Bank, 213 Kan. 372, 517 P.2d 123, 127-128 (1973).

The nature and usage of cashier’s checks in the commercial world is such that public policy does not favor a rule that would permit stopping payment of them. It is aptly stated in National Newark & Essex Bank v. Giordano, 111 N.J.Super. 347, 268 A.2d 327 (1970): “A cashier’s check circulates in the commercial world as the equivalent of cash. * * * People accept a cashier’s check as a substitute for cash because the bank stands behind it, rather than an individual. In effect, the bank becomes a guarantor of the value of the check and pledges its resources to the payment of the amount represented upon presentation. To allow the bank to stop payment on such an instrument would be inconsistent with the representation it makes in issuing the check. Such a rule would undermine the public confidence in the bank and its checks and thereby deprive the cashier’s check of the essential incident which makes it useful. People would no longer be willing to accept it as a substitute for cash if they could not be sure that there would be no difficulty in converting it into cash.”

The stop order given by Gunn and the legal process issued in connection with the injunction suit were received by and served upon the Bank after it had issued the cashier’s check and came too late to terminate or suspend the Bank’s obligation to honor and pay it. Furthermore, the fraud allegedly practiced on Gunn by Kin Tak, if true, afforded him no standing or authority to countermand the Bank’s obligation to pay its check on demand; his remedy is by action against Kin Tak.

Gunn’s petition alleges facts which show not only that he has no claim for injunctive relief against the Bank, but also that none can be stated by amendment. Hence, in maintaining the temporary injunction respondent would be acting in excess of his jurisdiction, for which prohibition will lie. State ex rel. Stifel, Nicolaus & Co. v. Clymer et al., Judges, 522 S.W.2d 793, 798[3] (Mo. Banc 1975), and cases there cited.

The provisional rule is made absolute.

SEILER, C. J., and MORGAN, HOLMAN, BARDGETT and FINCH, JJ., concur.

DONNELLY, J., dissents in separate dissenting opinion filed.

DONNELLY, Judge

(dissenting).

In Missouri, the right of appeal is given by statute. Section 512.020, RSMo 1969. Historically, this statute has been construed as directing generally that appeals may be taken only from final orders or judgments.

In State ex rel. Smith v. Greene, 494 S.W.2d 55 (Mo. banc 1973), this Court effectually repealed § 512.020, supra, and held that the writ of prohibition may be utilized as a device for taking an appeal from an interlocutory order or judgment.

I must recognize, therefore, that the principal opinion is following precedent when it intrudes into the judicial process at the trial level. However, I note that as recently as March 8, 1976, in State ex rel. McCurley v. Hanna, 535 S.W.2d 107 (Mo. bane 1976), this Court cited State ex rel. Schaper v. Stussie, 487 S.W.2d 49, 51 (Mo.App.1972) for the proposition: “Prohibition is no substitute for appeal nor is it a device to correct trial errors or rulings.” I would submit that, in the present state of affairs, pronouncements such as these are confusing. They perpetuate myths.

I respectfully dissent.

      . References to sections of the statutes will be to this revision unless otherwise indicated. Section 400.4-303 is a part of the Uniform Commercial Code, Laws of Missouri, 1963, pp. 510-638.

      . An order by one party (drawer) directing a bank (drawee) to pay on demand a fixed sum of money to a third party (payee). Section 400.3-104.


author: DONNELLY, Judge. MORGAN, Judge.

text:
    Joseph J. ENRIGHT, Appellant, v. KANSAS CITY, Missouri and Robert Kipp, Respondents, and The School District of Kansas City, Missouri and the School District of Independence, Missouri, Intervenors.
    No. 59102.
    Supreme Court of Missouri, En Banc.
    April 14, 1976.
    Rehearing Denied May 5, 1976.

      Kevin E. Glynn, Kansas City, for appellant.
    Dan G. Jackson, III, Asst. City Atty., Aaron Wilson, City Atty., and Lawrence B. Saunders, Asst. City Atty., Kansas City, Lee Vertís Swinton, Sp. Counsel, Kansas City, for respondents.
   DONNELLY, Judge.

In this suit for injunctive relief and declaratory judgment, plaintiff Joseph H. En-right, a citizen, resident, consumer of retail goods and taxpayer within the corporate limits of the City of Kansas City, contests the authority of the City to grant City funds to school districts, or portions of school districts, lying within the corporate limits of Kansas City. The source of such funds is a city sales tax approved by referendum vote of 29,077 in favor and 24,450 against on August 6, 1974.

The question in the case was posed by the trial court as follows:

“Does the city have such powers? If it does, it is by virtue of subsection (39) of Section 1 of Article I of the Charter or by the reenforcement of Article VI, Section 19(a) of the Constitution of Missouri, an amendment adopted October 5, 1971.”

The trial court was of the opinion that the City of Kansas City has such powers and dismissed plaintiff’s petition. He appealed.

Article VI, § 19(a) of the Constitution of Missouri reads as follows:

“Any city which adopts or has adopted a charter for its own government, shall have all powers which the general assembly of the state of Missouri has authority to confer upon any city, provided such powers are consistent with the constitution of this state and are not limited or denied either by the charter so adopted or by statute. Such a city shall, in addition to its home rule powers, have all powers conferred by law.”

Article I, § 1(39) of the Home Rule Charter of Kansas City provides, “subject only to the necessary extent of the limitations imposed by the Constitutions and Laws of the United States and the State of Missouri,” that Kansas City shall have the power:

“To acquire, provide, operate and maintain charitable, educational, comfort, rec-reative, curative, corrective, detentive, penal and other institutions, departments, functions, facilities, instrumentalities, conveniences and services of any and every kind and character for any public or municipal use or purpose.”

We make the following observations:

(1) The general authority to impose a sales tax is expressly given the City by §§ 94.500-94.570, RSMo 1969. Therefore, we need not, and do not, decide whether Art. VI, § 19(a), supra, gives a city authority to impose a particular tax, or form of tax, without express authorization from the General Assembly. Cf. Mo.Const., Art. X, § 1, which provides that the taxing power may be exercised by cities (“political subdivisions” under Mo.Const., Art. X, § 15) “under power granted to them by the general assembly * * *.” (Emphasis ours.)

(2) The general power to impose a sales tax has never been granted school districts (also “political subdivisions” under Mo.Const., Art. X, § 15) by the General Assembly. See Mo.Const., Art. X, § 11(f), which reads as follows:

“Nothing in this constitution shall prevent the enactment of any general law permitting any county or other political subdivision to levy taxes other than ad valorem taxes for its essential purposes.”

(3)The primary sources of funding for school districts are ad valorem taxes (Mo. Const., Art. X, § 11(b) and 11(c); §§ 164.011 and 164.021, RSMo Supp.1973) and state revenue (Mo.Const., Art. IX, § 3(b)). “Money donated to the school districts shall be placed to the credit of the fund where it can be expended to meet the purpose for which it was donated and accepted.” (Emphasis ours.) § 165.011, RSMo 1969.

(4) The City does not have authority, under Art. VI, § 19(a), supra, to provide in its charter for its operation of public schools within its corporate limits. This power is denied it by statute. Sections 162.471, RSMo 1969, and 162.261, RSMo Supp.1973, expressly provide that the “government and control” of each school district involved here shall be vested in the board of directors of such school district.

(5) Article VI, § 25 of the Constitution of Missouri generally denies a city the authority to grant public money “to any private individual, association, or corporation * * (Emphasis ours.)

(6) We find no constitutional or statutory provision which expressly denies the City authority to donate money to the school districts.

In view of the above, we conclude that the taxing power of the school districts is presently limited to the imposition of ad valorem taxes but that there are no constitutional or statutory restrictions on sources from which the school districts may receive funds. We also conclude that the City was expressly authorized to impose the sales tax and that it has such powers to distribute the funds realized from the sales tax as are given it by Art. VI, § 19(a), supra, and its Charter.

In our opinion, the powers asserted by the City in Article I, § 1(39) of its Charter are permitted by and are consistent with the grant of powers made a charter city by Art. VI, § 19(a) of the Constitution of Missouri. Therefore, the question in this case is whether the giving of the money to the districts is permissible under authority of Article I, § 1(39) of the Charter. It asserts the power to “ * * * provide * * * educational * * * functions * * * and services of any and every kind and character for any public or municipal use or purpose.”

The parties agree that “there was a public question about the inability of the school district of Kansas City, Missouri, to continue to operate because of the lack of available funds.” A financial crisis existed in the Kansas City School District. In these circumstances, we believe the giving of funds by the City to the school districts served a “public or municipal use or purpose.”

We hold that the City of Kansas City has authority to grant City funds to school districts, or portions of school districts, lying within its corporate limits.

We emphasize, however, that our holding is a limited one. It has been said: “To any extent that one man is compelled to pay in order to relieve others of a public burden properly resting upon them, his property is taken for private purposes, as plainly and as palpably as it would be if appropriated to the payment of the debts or the discharge of obligations which the person thus relieved by his payments might owe to private parties (citing St. Charles v. Nolle, 51 Mo. 122; Wells v. City of Weston, 22 Mo. 384). ‘By taxation,’ it is said in a leading case, ‘is meant a certain mode of raising revenue for a public purpose in which the community that pays it has an interest. * ⅝ V” 1 Cooley, Taxation (4th ed.) § 314, p. 653. It is essential to our holding in this case that we can reasonably say that the people of Kansas City have an interest in assuring the viability of the public schools which educate the children within their community.

The judgment is affirmed.

SEILER, C. J., and HOLMAN and FINCH, JJ., concur.

MORGAN, J., dissents in separate dissenting opinion filed.

BARDGETT and HENLEY, JJ., dissent and concur in separate dissenting opinion of MORGAN, J.

MORGAN, Judge.

I respectfully dissent.

It would not be difficult to commend the city officials of Kansas City for seeking to alleviate a “financial crises” of the Kansas City School District. When the method used however is contrary to the existing law in Missouri, this court should not place a stamp of approval on it regardless of how worthy the objective. The solution should come from the General Assembly or the patrons of the school district.

My reasons for dissenting are:

1.As provided in Article VI, § 19(a) (all references being to the 1945 Missouri Constitution), charter cities can exercise only those powers that “are consistent with the Constitution of this State.” Financing of public schools by revenue derived from municipal taxes is inconsistent with Article IX, § 1(a), which provides, in part: “A general diffusion of knowledge and intelligence being essential to the preservation of the rights and liberties of the people, the general assembly shall establish and maintain free public schools . . .” (Emphasis added.) The General Assembly has and continues at this time to perform that duty by following Article IX, § 5, which calls for the establishment and preservation of a public school fund for maintaining free public schools (with the high priority of appropriation found in Article III, § 36) plus such ad valorem taxes as are authorized by Article X. Maintenance of public schools by the method in question, in my opinion, is totally inconsistent with that planned by the citizens of this state as now expressed in their constitution. In Grant v. Kansas City, 431 S.W.2d 89 (Mo. banc 1968), this court articulated the meaning of the word “consistent” in Article VI, § 19(a). After the observation was made, l.c. 92[1], that “. . it is sometimes difficult to determine whether a function should be classified as governmental or corporate,” this court did declare that governmental functions are retained by the state unless delegated elsewhere. The constitution of this state makes the establishment and maintenance of public schools a priority governmental function — thus, it is with the state. I have found nothing by research or by reference in the principal opinion delegating that duty to municipalities.

2. Financing of public schools is not a proper subject for municipal taxation. As said in Kansas City v. Frogge, 352 Mo. 233, 176 S.W.2d 498, at 503 (1944): “The state by granting to plaintiff city the right to adopt and frame a charter for its own government did not confer upon plaintiff city the right to assume under its charter all of the powers which the state may exercise within the city, but conferred the right to assume those powers incident to it as a municipality. There are governmental powers, the exercise of which is essential to the prosperity and welfare of the people of a city, yet are not essentially appertaining to city government. These powers, unless delegated by the state, are reserved in the state to be exercised by it.” Regardless of the scope of power that might be given by implication to a charter city, such powers are limited to and must appertain to corporate (municipal) functions. A taxpayer of the city has the right to demand that municipal taxes be used solely for city purposes.

3. The principal opinion is predicated, at least in part, on the statement therein that: “(6) We find no constitutional or statutory provision which expressly denies the City authority to donate money to the school districts.” I would respectfully suggest that the conclusion noted is not only not authority for the decision reached, but that it dictates the opposite result under the law of this state. Taxation is based on the power to tax. For instance, as said in United Air Lines, Inc. v. State Tax Commission, 377 S.W.2d 444, l.c. 448[3-6] (Mo. banc 1964): “In a taxing statute there must be specific authority, or authority necessarily implied, for the imposition of a tax upon any particular property.” Of the many cases so holding, perhaps it was stated most emphatically in Leavell v. Blades, 237 Mo. 695, 141 S.W. 893, l.c. 894 (1911), by Judge Lamm when he said: “When the tax gatherer puts his finger on the citizen, he must also put his finger on the law permitting it.”

4. I am convinced that the word “educational” found in Article 1, § 1(39), of the Kansas City Charter was not used in the context which the city and district now give to it. Many cities provide libraries and other facilities of an educational nature, but it is inconceivable that those drafting the charter or the voters approving it contemplated paying taxes to finance the public schools.

5. At the risk of being heretical, I would suggest that the plan approved in the principal opinion effectively disenfranchised the patrons and voters in the school district. Notwithstanding the vote of the taxpayers of the school district, a tax has been imposed upon them now for purposes which they rejected.

6. In effect, the principal opinion approves taxation by the city for financing of public schools but renounces any authority in the city to operate or control the public schools. With the latter I wholly agree, but would suggest that this court need not hide its eyes from what has become a fact of life, i. e., control follows the source of money in any public activity.

7. Taxing residents of Kansas City and dividing the revenue with school districts (operating schools outside the city limits of Kansas City) speaks for itself.

Finding taxation by the city for public school purposes illegal, I would disapprove the same.


author: MORGAN, Judge.

text:
    Joseph J. GUASTELLO, Respondent, v. DEPARTMENT OF LIQUOR CONTROL, State of Missouri, Appellant.
    No. 59146.
    Supreme Court of Missouri, En Banc.
    May 5, 1976.

      John C. Danforth, Atty. Gen., by Michael Boicourt, Jefferson City, for appellant.
    Lawrence F. Gepford and Daniel J. Matu-la, Kansas City, for respondent.
   MORGAN, Judge.

The sole issue in this case requires that we determine the effect, if any, a gubernatorial pardon has on a “license” disabling statute.

The facts are not in dispute. On July 28, 1961, respondent pleaded guilty to two charges of selling intoxicating liquor on Sunday and was fined a total of $500. On November 22, 1972, he received a full gubernatorial pardon. Thereafter, upon application he was issued a package liquor license by the Supervisor of Liquor Control for the State of Missouri, with an expiration date of June 30, 1973. Prior to that date, an application for renewal was filed, and the Supervisor denied the same on the basis of the 1961 convictions.

Pursuant to § 311.700, RSMo 1969, a judicial review was had and the trial court reversed the Supervisor’s order by reason of the pardon. On appeal, the trial court was affirmed by the Court of Appeals, Kansas City District, in a per curiam opinion wherein it was concluded that: “Damiano v. Burge, 481 S.W.2d 562 (Mo.App.1972), controls the present case.” At the request of the Department of Liquor Control, the cause was transferred to this court for the purpose of re-examining the existing law reference the question heretofore posed.

The statute involved is § 311.060(1), which reads, in part:

No person shall be granted a license hereunder unless such person is of good moral character . . . and no person shall be granted a license . . . who has been convicted, since the ratification of the twenty-first amendment to the Constitution of the United States, of a violation of the provisions of any law applicable to the manufacture or sale of intoxicating liquor .

Under the quoted segments of the statute, two disabling factors are present: (1) lack of good moral character, or (2) a conviction under a liquor law. In the instant case, it is agreed that denial of a license was based solely on ground number two, i. e., a liquor law conviction.

It is agreed generally that there are three views as to the effect a pardon has on the fact of conviction and the convicted person’s guilt (moral character of the recipient thereof). Punishment, if not previously administered, is eliminated under each view.

View # 1 is that conviction and guilt are both wiped out and obliterated. Thus, it makes the offender as if he had not committed the offense in the first place.

View # 2 is that the fact of conviction is obliterated but the guilt remains. Under this view, if disqualification is based solely on the fact of conviction the eligibility of the offender is restored. On the other hand, if good character (requiring an absence of guilt) is a necessary qualification, the offender is not automatically once again qualified — merely as a result of the pardon.

View # 3 is that neither the fact of conviction nor the guilt are obliterated— only the punishment. Under this view, a pardon would have no effect whatsoever on disqualification statutes like that in question. The sole effect would be to excuse any portion of the punishment not then suffered — plus, perhaps, removal of certain “civil disabilities.”

In Hughes v. State Board of Health, 348 Mo. 1236, 159 S.W.2d 277 (1942), this court considered a case wherein a physician’s license was revoked on the statutory ground of “bad moral character” following his conviction for a crime involving moral turpitude. Hughes appealed on the ground that he had been pardoned. This court held, l.c. 279, that: “It cannot be construed as restoring good character.” More specifically, at l.c. 280, it was concluded that: “Clearly the conviction of respondent [Hughes] of the crime of using the mails to defraud constituted evidence of bad moral character sufficient to sustain the action of the board in revoking his license. Respondent did not contend otherwise, but relied on the pardon to overcome the effect of the conviction. This he may not do.” (Emphasis added.) Whether or not a pardon also obliterates the fact of conviction was not decided as that issue was not relevant to a decision. Cf: Theodoro v. Department of Liquor Control, 527 S.W.2d 350 (Mo. banc 1975).

Thus, at the time Damiano v. Burge, supra, was decided by the Court of Appeals, Kansas City District, in 1972, there was no controlling opinion by this court on the precise issue, i. e., the effect a pardon has on the fact of conviction reference disability statutes. Nevertheless, the court went on to resolve the problem and we quote a portion of the reasoning found in that opinion, l.c. 564-565, to wit:

“The effect of a pardon for various purposes has been very heavily debated, and the courts of this country have reached diverse results. We need not explore the ramifications of those arguments in all of the varied manners in which they have arisen. It is sufficient to confine ourselves to the relatively narrow problem involved here: in the case of an application for an office or license which is prohibited to one who has been convicted of a crime, does a pardon reestablish eligibility?

“The intensive debate on this subject was initiated by the decision of the United States Supreme Court in Ex parte Garland, 4 Wall. 333, 18 L.Ed. 366, which arose immediately following the Civil War. In that case, the petitioner was an attorney who had been enrolled to practice before the United States Supreme Court prior to the war. During the Civil War, his state seceded and he served in the Confederate Legislature. After the war, he obtained a presidential pardon for his participation in the war. However, Congress enacted a statute requiring all members of the Bar to take an oath that they had not participated in the rebellion. Petitioner, of course, was not in a position to honestly take that'oath, and he filed suit to be permitted to practice notwithstanding. The United States Supreme Court held that the pardon completely wiped out the petitioner’s offense, and therefore, eliminated the necessity of the oath. In that connection, the court held as follows, l.c. 380, 18 L.Ed. 366:

“ ‘Such being the case, the inquiry arises as to the effect and operation of a pardon, and on this point all the authorities concur. A pardon reaches both the punishment prescribed for the offence and the guilt of the offender; and when the pardon is full, it releases the punishment and blots out of existence the guilt, so that in the eye of the law the offender is as innocent as if he had never committed the offence. If granted before conviction, it prevents any of the penalties and disabilities consequent upon conviction from attaching; if granted after conviction, it removes the penalties and disabilities, and restore him to all his civil rights; it makes him, as it were, a new man, and gives him a new credit and capacity.

“ ‘There is only this limitation to its operation: it does not restore offices forfeited, or property or interests vested in others in consequence of the conviction and judgment.’

“The broad language used by the Court in the Garland opinion proved to be the source of the extensive disagreement. As early as 1915, the argument between the courts had become so heated that Professor Williston published an article ‘Does a Pardon Blot Out Guilt?’, 28 HLR 647, attempting to reconcile the diverse holdings. Professor Williston reviewed the many eases which had already been decided up to the date of his article on this subject. He, like many of the judges who had written on the subject, disapproved of the broad language of the Garland opinion. However, Professor Williston suggested that the seeming conflict of the decisions could be reconciled upon the following distinction, stated at page 653 of his article:

“ ‘The true line of distinction seems to be this: The pardon removes all legal punishment for the offence. Therefore if the mere conviction involves certain disqualifications which would not follow from the commission of the crime without conviction, the pardon removes such disqualifications. On the other hand, if character is a necessary qualification and the commission of a crime would disqualify even though there had been no criminal prosecution for the crime, the fact that the criminal has been convicted and pardoned does not make him any more eligible.’

“The fundamental distinction suggested by Professor Williston has been generally accepted and followed by the courts since the date of his article.”

An application to transfer the cause, after opinion, was denied by this court on July 17, 1972. Consistent therewith, we now approve and adopt as our own the reasoning found therein and the conclusion reached. In other words, we adopt View # 2 as being the most compatible, of the three alternatives, with the power of an executive to pardon and the realities of life. As noted in the Damiano opinion, such a result is consistent with the holding of this court in Hughes v. State Board of Health, supra, to the extent the instant question was considered in the latter case.

The state predicates much of its brief on the contention the liquor industry is so unique and distinctively different that a pardon for convictions relating to the same should have no effect thereon. It is a sufficient answer to point out that this court is not free to approve, nor even consider, the rationale suggested. The Constitution of Missouri in Article 4, § 7, in part, provides: “The governor shall have power to grant . . . pardons, after conviction, for all offenses except treason and cases of impeachment . . Consistent therewith is § 549.010, RSMo 1969, which states: “In all cases in which the governor is authorized by the constitution to grant pardons, he may grant the same, with such conditions and under such restrictions as he may think proper.” Our task is to consider only the legal “effect” of a pardon. Since the offense involved was not one of the two excepted in the constitution, the power to grant the pardon is beyond challenge.

It is mentioned that an affirmance in this case “would be to tempt the [Supervisor] always to rely on ‘good moral character’ language in licensing statutes rather than more specific provisions requiring showings of actual convictions of specific laws in order to take adverse action on a license.” Suffice it to say that we do not care to ascribe to the Supervisor any desire to review the qualifications of an applicant inconsistent with the existing facts and laws of this state.

It is suggested that some comment should be made as to the effect of today’s decision on the holdings in State v. Asher, 246 S.W. 911 (Mo.1922); State ex rel. Stewart v. Blair, 356 Mo. 790, 203 S.W.2d 716 (banc 1947); and State v. Durham, 418 S.W.2d 23 (Mo.1967). They stand for the proposition that if a defendant is pardoned after conviction, he remains subject to the Habitual Criminal Act if he later commits a criminal offense. It would seem apparent that if a defendant is pardoned after conviction and, as decided today, that conviction is thereby obliterated, such “obliterated conviction” could not be used as the basis for subjecting defendant to the Habitual Criminal Act if he later committed a criminal offense. Accordingly, from this time forward, the holdings in Asher, Blair and Durham, to the extent they conflict with this opinion, should no longer be followed.

The trial court correctly ruled that denial of a license to respondent solely because of the prior convictions was unauthorized.

The judgment is affirmed.

All concur.

      . See 58 A.L.R.3d 1194. It is difficult to place each case in a specific category due to uncertainty as to the precise issue involved and whether or not references to “guilt” were to “legal guilt” or “moral guilt.”

      . Ex parte Garland, 4 Wall. (71 U.S.) 333, 380, 18 L.Ed. 366 (1866); State ex rel. Cloud v. Election Board of State, 169 Okl. 363, 36 P.2d 20 (1934); Morris v. Hartsfield, 186 Ga. 171, 197 S.E. 251 (1938); In re Stephenson, 243 Ala. 342, 10 So.2d 1 (1942); In re Gowland, 174 La. 351, 140 So. 500 (1932); Ex parte Crisler, 159 Miss. 247, 132 So. 103 (1931); Stone v. Oklahoma Real Estate Commission, 369 P.2d 642 (1962).

      . Apparently consistent with View # 2 are the following cases: Slater v. Olson, 230 Iowa 1005, 299 N.W. 879 (1941); Commissioner of Metropolitan Dist. Com. v. Director of Civil Service, 348 Mass. 184, 203 N.E.2d 95 (1964); In re Lavine, 2 Cal.2d 324, 41 P.2d 161 (1935); Hogan v. Hartwell, 242 Ala. 646, 7 So.2d 889 (1942); People ex rel. Symonds v. Gualano, 124 Ill.App.2d 208, 260 N.E.2d 284 (1970); State ex rel. Dean v. Haubrich, 248 Iowa 978, 83 N.W.2d 451 (1957); In re Meyerson, 190 Md. 671, 59 A.2d 489 (1948); In re Kaufmann, 245 N.Y. 423, 157 N.E. 730 (1927); and Hankamer v. Templin, 143 Tex. 572, 187 S.W.2d 549 (1945).

        . Ridgeway v. Catlett, 238 Ark. 323, 379 S.W.2d 277 (1964), and State ex rel. Atty. Gen. v. Irby, 190 Ark. 786, 81 S.W.2d 419 (Ark. 1935), cert. den. 296 U.S. 616, 56 S.Ct. 136, 80 L.Ed. 437.


text:
    In the Matter of the ESTATE of Nancy Burch PARKER, Deceased. James H. BERNARD, Executor, et al., Appellants, v. Leah BURCH et al., Respondents.
    No. 59242.
    Supreme Court of Missouri, En Banc.
    May 5, 1976.

      Warren E. Slagle, Slagle & Bernard, Kansas City, for appellants.
    Charles Spooner, North Kansas City, Gary R. Titus, Independence, for respondents.
   MORGAN, Judge.

This cash involves a dispute over a savings account in The Farmers Trust Company of Lee’s Summit, Missouri, originally owned by Nancy (Burch) Parker, now deceased. Her executor filed an affidavit under § 473.340, RSMo 1969, to discover assets, namely, the bank account in question. The bank filed an interpleader petition in Probate Court naming Leah Burch and Bernice Hamilton as claimants — both filed interpleader claims.

The Probate Court found in favor of the executor, and Leah Burch and Bernice Hamilton appealed. Thereafter, the Circuit Court reversed in favor of Leah Burch after finding her to have been the sole joint tenant of the account with deceased and now owner of the whole by survivorship. The executor and Bernice Hamilton appealed to the Court of Appeals, Kansas City District, which reversed in favor of the executor. Upon application of Leah Burch, the cause was transferred to this court and will be considered as on original appeal. Rule 83.09.

On August 18, 1959, Russell Parker and Nancy Parker, husband and wife, opened the account with an initial deposit of $10,-000. This was a joint account with right of survivorship. One additional deposit was made to the account by the Parkers on January 5, 1961. All other additions were by way of interest credited. Russell Parker died on March 2, 1962, at which time the bank indicated the same on the ledger sheet and signature card. It was the only account in the bank maintained by the Par-kers and it bore no account number — a practice followed by the bank at that time, but since changed. The widow, Nancy Parker, died on October 24, 1970, and the Savings Account Passbook, still in the name of “Russell Parker or Nancy Parker,” was found among her possessions at her residence.

Two signature cards, in addition to the original card of the Parkers signed in 1959, were found in the alphabetical signature card file at the bank. All cards are of the same form. On the front side, authorized signatures (for withdrawal purposes) are recorded; on the back side, is found the form used for designation of joint or surviv-orship accounts.

The first additional card shows the authorized signatures to be Nancy Parker, Leah Burch and Bernice Hamilton. The signature of Hamilton has been partially erased and stricken. On the reverse (ownership) side, the signatures are shown as the same with that of Bernice Hamilton crowded in (where there are no lines) to the left of the other two.

The second additional card shows the authorized signatures to be Nancy Parker, Robert M. Norfleet and Bernice Hamilton. On the reverse (ownership) side, the signatures are shown as Nancy Parker and Bernice Hamilton.

Both cards show “Date opened — 4/27/70” and the first shows “Card Ret-d — 5/1/70” and the second “Card ret’d 5/5/70.”

There is no dispute as to the authenticity of the signatures. Robert M. Norfleet testified that he signed the card (for withdrawal purposes) at Mrs. Parker’s request at a time when hers was the only signature on the card. Otherwise, there was no evidence as to the date or circumstances surrounding the execution of these cards or how, when or by whom they were placed in the bank’s signature card file. The cards do not bear the initials of any officer in the place designated “O.K. by _” and the executive officer of the bank testified that neither he nor any other officers of the bank, authorized to approve the cards, knew of their existence prior to the death of Mrs. Parker. He further testified that there was nothing on the cards or in the bank records to relate the cards to the account in question, other than the fact that they contained Nancy Parker’s name and signature and she had only one account in the bank. Somewhat in explanation, he also testified that: “ . . . sometimes an employee can take a card out, and have it signed, and brought back. Usually it is initialed in most cases. * * ⅜ at this time, we did not have an account number since we’re getting so many we’re now numbering accounts.” His testimony also reflects that little attention was given to keeping passbooks current.

Mr. Norfleet, who claimed nothing by reason of his name being on the signature card, testified: that the Parkers and Burch-es had for years owned and operated a greenhouse together; that he had worked for them for over thirty-five years; that Mr. Burch was a brother of Mrs. Parker; that Parkers had always said the money “would go” to the Burches; that Mrs. Parker was “furious” when she discovered she had signed a paper giving Bernice Hamilton a power of attorney, and that she did not want her to come in her house again.

Another witness, a cousin of Leah Burch, testified that Mrs. Parker said on one date she had discovered Bernice Hamilton going through her purse.

An attorney, Ben R. Swank, Jr., testified that he was asked to prepare, and have executed, a revocation of a power of attorney given the day before by Mrs. Parker to Bernice Hamilton. He testified that: “She [deceased] advised me that she believed Mrs. Hamilton was trying to obtain a part of her assets or her estate, against her will.” When he delivered a copy of the revocation to Mrs. Hamilton, as well as the bank, “She advised me, at that time, that she did not object to the revocation of the power of attorney. She said she was only trying to help.” He further testified that: “I asked her [and a bank official] to deliver the power of attorney, which had been delivered previously to the bank, which was being revoked by the new instrument. I was advised by them that it had been already withdrawn from the bank’s records, and destroyed.” It was established also that Bernice Hamilton’s father was a cousin of deceased, Nancy Parker.

By a codicil to her last will and testament, dated October, 1970, Nancy Parker had given “everything” to Leah Burch. Therein, no mention was made of the questioned savings account.

The original passbook issued to Parkers contained the following: “This book is accepted and all deposits are made subject to the By-Laws of the Bank as herein printed and made a part of this contract.” In the back of the passbook, under the heading “Rules and Regulations for Savings Deposits,” is found: “Each depositor on opening an account agrees to be governed by all of the rules and regulations of the Bank concerning deposits.” A printed portion of the signature cards provides: “I hereby agree to the By-Laws, rules and regulations of the above mentioned bank, governing deposits made in its checking department now — or hereafter adopted by said bank."

Based on such evidence, the trial court found that the deceased (Nancy Parker) “never authorized anyone to place inter-pleader Hamilton’s name on the account.” Judgment was then entered in favor of Leah Burch after she was found to be the sole and only owner of the savings account by virtue of survivorship.

The relevant statutory provision is § 362.-470 (under the chapter title of “Banks and Trust Companies”), RSMo 1969, to-wit:

When a deposit is made by any person in the name of the depositor and any one or more other persons, whether minor or adult, and in form to be paid to any one or more of them, or the survivor or survivors of them, the deposit thereupon and any additions thereto made by any of these persons, upon the making thereof, shall become the property of these persons as joint tenants, and the same, together with all interest thereon, shall be held for the exclusive use of the persons so named, and may be paid to any of them, or to the survivor or survivors of them; and the payment and the receipt or acquittance of the one to whom the payment is made shall be a valid and sufficient release and discharge to the bank or trust company, whether any one or more of the persons named is dead or alive, for all payments made on account of such deposit prior to the receipt by the bank or trust company of notice in writing signed by any one of the joint tenants not to pay the deposit in accordance with the terms thereof. If more than two persons are named as such depositors and one of them dies, the deposit becomes the property of the survivors as joint tenants.

The executor, in seeking reversal, argues: (1) that no joint tenancy account was created by Nancy Parker with either claimant because no “deposit” was ever made in connection with the claimed change of ownership of the account — thus, § 362.470 does not apply; and (2) that any attempted change of ownership in the account, if such in fact occurred, was an “attempted testamentary disposition” of the same.

Claimant Bernice Hamilton asserts that the statute does apply; that the bank account records show a compliance therewith; that the “presumption” of a valid joint account “was not rebutted by competent or admissible evidence.”

Claimant Leah Burch asserts that the judgment of the trial court was correct, because: (1) the evidence established that a statutory joint tenancy was created in accordance with § 362.470; and, (2) the judgment entered is consistent with the opinion of this court in In Re Estate of LaGarce, 487 S.W.2d 493 (Mo. banc 1972).

The court in LaGarce reviewed the difficulty “courts have had in determining the validity and effect of statutory joint accounts,” stemming primarily from efforts to equate the same with common-law doctrines, and therein established a degree of order by declaring at pages 500, 501 of 487 S.W.2d, that:

We have concluded that the heretofore indicated construction placed upon our joint account statutes is erroneous and has been misleading to depositors who have complied with said statutes. Our courts have placed limitations thereon and have added requirements thereto which are not contained in the statutes and are not warranted. Section 369.150 specifically and unqualifiedly provides that if the certificate is issued in the statutory form the account “shall become the property of such persons as joint tenants and shall be held for the exclusive use of the persons so named and may be paid to any person named therein, or the survivor.” There is nothing in the statute which would warrant the conclusion that a rebuttable presumption is created that the deposit shall become the property of such persons as joint tenants and that it may be shown by competent evidence that it was not a joint tenancy even though the statutory form had been complied with. The statute says it “shall become the property of such persons as joint tenants.” The limitations were placed upon the statute by judicial interpretation apparently resulting from a consideration of common-law principles. It is our view that the statute creates what might be described as a statutory joint tenancy which should be given effect without consideration of the strict common-law requirements mentioned in the cases. In the case before us we are particularly interested in the rights of the surviving depositor. Upon the death of the depositor who furnished the money, we cannot see any reason why the surviving joint tenant should not be held to be the owner of the deposit even though the donor may have intended to retain the beneficial interest in the account during his lifetime. It is true that such an arrangement is somewhat of a testamentary nature, but we see no reason why the statute of wills should prevail over equally valid statutes relating to deposits in banks and savings and loan institutions. As indicated in 21 Journal of the Missouri Bar 894, “ANOTHER VIEW OF JOINT BANK ACCOUNTS,” by Charles B. Blackmar, the courts have approved a number of arrangements with testamentary purpose which transfer money and property without the use of a will. The statute is clear and needs no construction. It is our view that if the statute is complied with, in the absence of fraud, undue influence, mental incapacity, or mistake, the survivor will become the owner of the account. Depositors have a right to expect the statute to be enforced according to its plain language.

It should be noted that although La-Garce involved an account in a savings and loan association (§ 369.150) and the present account was in a bank or trust company (§ 362.470), the law pertaining thereto is applicable in each instance as the statutes “in all material respects . . . are the same.” (487 S.W.2d at 499).

We do not believe that either argument of the executor, appellant, is meritorious. First, no case has been cited nor has our own research revealed any case limiting the dictates of § 362.470 to “new” deposits of new money. In fact, when an individual account is converted to one involving joint tenancy of two or more persons it would not be improper to say that by transfer a “new” deposit had been made to a “new” account. Either event would make the statute controlling. Second, the evidence does not establish conclusively that the deceased promoted an unacceptable testamentary disposition. The law in this connection may be found in that portion of the opinion in LaGarce heretofore quoted.

The basic question is — Was a joint tenancy created?

It is agreed that the relationship between a bank and its depositor is generally that of a debtor and creditor to be governed by that contractual relationship. The “contract” as expressed in the passbook and forms on the signature cards incorporates only the bank’s “By-Laws, rules and regulations.” There is no testimony or other evidence that initialing of an “OK” by an officer of the bank fell into either of the three categories. The record reflects that it was only a “policy” that the bank “usually” followed. In this case, the bank had constructive, if not actual, knowledge of the form in which the depositors desired the account to be held — as reflected on the signature cards in the bank’s possession. The result would be no different if the necessity for an initialed “OK” by an officer was part of the so-called contract. The general rule is that conduct by a party to a contract which increases the risk that a condition precedent thereto will not be satisfied, and which is beyond the reasonable expectations of the other party, is wrongful and excuses the condition. Signatures of all involved were on forms provided to create joint accounts in the possession of the bank. Failure of the bank to perform its function would be beyond the “reasonable expectations” of the other parties. The trial court correctly found that a joint tenancy account had been created by compliance with the statute.

The certainty created by LaGarce was conditioned upon the absence of “fraud” (among other things); and, the trial court in this case concluded that Bernice Hamilton fell within that exception. There is nothing in the record or in arguments submitted to this court which would suggest that the finding should have been otherwise.

The judgment of the trial court is affirmed.

All concur.

      . She was identified as a former employee of the bank in charge of signature cards for savings accounts.


author: DONNELLY, Judge.

text:
    Lucille V. MURPHY, Respondent, v. Cecelia CARRON and Paul Carron, Appellants.
    No. 59167.
    Supreme Court of Missouri, En Banc.
    May 5, 1976.
    See also Mo.Sup., 536 S.W.2d 39.

      John A. Schneider, Hillsboro, for appellants.
    Mrs. Alice L. C. Kramer, Brunson, Holl-ingsworth & Associates, Hillsboro, for respondent.
   DONNELLY, Judge.

In this court-tried case, Lucille Y. Murphy seeks to recover money which she asserts was loaned by her to Cecelia Carrón and Paul Carrón. The trial court entered judgment in favor of plaintiff and against defendants in the amount of $9,100. The Carrons appealed to the St. Louis District of the Court of Appeals, which affirmed. The cause was transferred here by order of this Court. We decide the cause “the same as on original appeal.” Mo.Const., Art. V, § 10.

We ordered the transfer of this case and two other cases (In re Novak, Mo., 536 S.W.2d 33; and Roth v. Flieg, Mo., 536 S.W.2d 39) primarily to consider and put to rest as soon as possible questions which have arisen about the scope of review in court-tried civil cases since the revision of our Rule 73.01, effective January 1, 1975.

Before its revision, Rule 73.01(d) provided, in part, that on appeal of a case tried by the court without a jury:

“The appellate court shall review the case upon both the law and the evidence as in suits of an equitable nature. The judgment shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.” (Emphasis added.)

In the revision, the italicized portion of the rule was deleted.

Rule 73.01, as revised, provides in subdivision 3, in part, that on appeal of a ease tried by the court without a jury:

“(a) The court shall review the case upon both the law and the evidence as in suits of an equitable nature.
“(b) Due regard shall be given to the opportunity of the trial court to have judged the credibility of witnesses.”

It is suggested, on the one hand, that by deletion of the words italicized above, the Court abandoned the “clearly erroneous” standard of review and adopted a “de novo” standard of review. It is suggested, on the other hand, that Rule 73.01 still requires that review be “as in suits of an equitable nature” and that the “clearly erroneous” standard is an essential part of the scope of review of suits of an equitable nature.

We must recognize that the law in Missouri as to the scope of appellate review of suits of an equitable nature is in a state of confusion, largely as a result of an attempted use of de novo and clearly erroneous in the same standard of review. Those interested will find the cases in Vol. 3A, Missouri Digest, Appeal and Error, It is essential now that the Bench and Bar of Missouri be given some sense of direction on the question.

Accordingly, appellate “review * * * as in suits of an equitable nature,” as found in Rule 73.01, is construed to mean that the decree or judgment of the trial court will be sustained by the appellate court unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. Appellate courts should exercise the power to set aside a decree or judgment on the ground that it is “against the weight of the evidence” with caution and with a firm belief that the decree or judgment is wrong. The use of the words de novo and clearly erroneous is no longer appropriate in appellate review of cases under Rule 73.01.

On November 18,1970, Lucille V. Murphy and Cecelia Carrón went to the Tower Grove Savings and Loan Association. Lucille V. Murphy drew out $10,000 in the form of a cashier’s check and signed it over to Cecelia Carrón. Cecelia Carrón endorsed the check and deposited it in a joint account held in the Pevely bank with her husband Paul Carrón. The money was expended through two payments to building contractor Ralph Williams for remodeling the Car-rón home in Pevely.

Was the transaction, in legal effect, a loan or a gift?

In the case of In re DeGheest’s Estate, 362 Mo. 634, 646, 243 S.W.2d 83, 90 (1951), this Court defined a “loan” as “the delivery of a sum of money to another under a contract to return at some future time an equivalent amount with or without an additional sum agreed upon for its use; and if such be the intent of the parties the transaction will be deemed a loan regardless of its form.”

The evidence is conflicting. The trial court considered the transaction a loan and not a gift. We have reviewed the evidence and defer to the findings and conclusion of the trial court.

Was the loan an installment loan or a demand loan?

Cecelia Carrón, after testifying that Lucille V. Murphy actually gave her the cheek at a restaurant where they went to eat after they left the Tower Grove Savings and Loan Association, further testified as follows:

“Q. Did you say anything to her at that time in regard to payment back of the money?
“A. Yeah. I’d told her before and I told her that day too.
“Q. What did you tell her?
“A. I told her that I appreciated it very much, the help that you’ve given me, and that I was going to, willing to pay her back the hundred dollars a month as long as I was able or I could.
“Q. What did she say in response to that?
“A. She said that-—well, she actually didn’t want to because she felt like she wanted to give this to me. But, I insisted in telling her that she might need the money later on.”

We are of the opinion this was a demand loan because there was no agreement as to the time of payment. The general rule is that “ * * * when no time is fixed for the payment of a debt, the debt is payable on demand * * * .” Diehl v. Council of Zion Evangelical Lutheran Church, 162 Pa.Super. 167, 56 A.2d 113, 115 (1948); White v. Meiderhoff, 281 S.W. 98, 99, 100 (Mo.App.1926).

Was a demand for payment made?

The evidence is undisputed that an attorney, in behalf of Miss Murphy, made demand for payment of the loan; and that at the time of demand, a total of $900 had been paid Miss Murphy.

Did Paul Carrón participate in the borrowing of the money or in the promise to repay?

Lucille V. Murphy testified as follows:

“Q. All right. And Mr. Paul Carrón, did you have any conversation with Mr. Paul Carrón about this money and the payment of it?
“A. Yes, Mr. Paul Carrón came down and gave me a big kiss for giving it to them ”
Paul Carrón testified as follows:
“Q. Mr. Carrón, did you have any conversation with Mrs. Murphy prior to this check being presented to your wife?
“A. Not prior, no.
“Q. You weren’t there at the bank or the restaurant or anything like that? A. No, I was not.
“Q. All this was between your wife and Mrs. Murphy, is that correct? A. Yes, that’s true.”

We have reviewed the record and must conclude that Paul Carrón did not participate in the borrowing of the money or in the promise to repay. There is ample evidence that he benefited from the transaction. The money delivered by Lucille Y. Murphy to his wife, Cecelia, was used to improve their home. The receipt of such benefits by Paul Carrón would be relevant if recovery were sought under an implied agency theory. Cf. Dierks & Sons Lumber Co. v. Morris, 404 S.W.2d 229 (Mo.App.1966); Kaufmann v. Krahling, 519 S.W.2d 29 (Mo.App.1975); Murphy v. Olds, 508 S.W.2d 249 (Mo.App.1974); E. C. Robinson Lumber Co. v. Lowrey, 276 S.W.2d 636 (Mo.App.1955). However, we must take the evidence and the case as we find it. No assertion has been made at trial or on appeal that Paul Carrón should be held liable on an implied agency theory. In any event, the evidence adduced in this case is not sufficient to sustain such a theory of recovery.

The judgment is affirmed as to Cecelia Carrón and reversed as to Paul Carrón. The cause is remanded with directions to enter judgment in favor of plaintiff and against Cecelia Carrón in the amount of $9,100.