author: BARDGETT, Judge.

text:
    STATE ex rel. Charles M. MITCHELL and Don C. Diven, Relators, v. CITY OF SIKESTON, Missouri, a Municipal Corporation, and City of Trenton, Missouri, a Municipal Corporation, Respondents.
    No. 59963.
    Supreme Court of Missouri, En Banc.
    Sept. 12, 1977.

      George W. Gilmore, Jr., Sikeston, Allan D. Seidel, Trenton, for relators.
    Manuel Drumm, Sikeston, Lawrence M. Berkowitz, Kansas City, for respondents.
    James C. Swearengen, Jefferson City, amicus curiae.
   BARDGETT, Judge.

This is an original proceeding in the nature of quo warranto brought by the rela-tors, Charles M. Mitchell and Don C. Diven, resident taxpayers and ratepaying users of the municipal electric systems of Sikeston and Trenton, Missouri, respectively. They were authorized to bring this action on behalf of the state by the attorney general. Relators instituted this action against respondents city of Sikeston and city of Trenton, both municipal corporations organized and existing as cities of the third class under the laws of the state of Missouri. Jurisdiction is in this court pursuant to art. V, sec. 4, Mo.Const.

The facts in this case have been stipulated by the parties. Sikeston in the past has purchased most of its electric power and energy needs from the Southwestern Power Administration (SPA) of the U. S. Department of Interior. SPA has informed Sike-ston that the present supply contracts will not be renewed as they expire. This means that by 1986 the SPA’s supply of power to Sikeston will be practically terminated.

In order to determine what it should do to provide for its future energy needs, Sike-ston employed Phelps & Hogland Engineering Co. of Raytown, Missouri, to advise the city of available alternatives. Phelps & Hogland prepared a “Feasibility Study” which stated its findings and recommendations. They found that Sikeston presently has an electric power requirement of approximately 40,000 kilowatts (kw), and this requirement has been increasing at over 9% per year. The present generating capacity is 15,000 kw which, according to Phelps & Hogland, is inadequate to meet the present and future needs of Sikeston. Furthermore, because of the reduction in the supply of power from the SPA, and the expected continued growth of Sikeston’s energy needs, it is necessary to find a new source of power for immediate and future requirements. The “Feasibility Study” concluded that the most economical and reliable means of supplying the increasing electrical needs of Sikeston was to build a large coal-fired steam generating plant and sell the surplus electric power and energy to other municipalities until Sikeston can utilize the entire output of the plant. It is projected that Sikeston will be utilizing the plant’s capacity in approximately 20 years.

Pursuant to the recommendations of the “Feasibility Study”, Sikeston has proposed to issue and sell up to $250,000,000 of Electric System Revenue Bonds (bonds) to pay the cost of purchasing and constructing a 235,000 kw coal-fired steam-electric generating plant to be owned exclusively by Sike-ston. The proposition to authorize the bonds was passed by the voters of Sikeston at the general election of November 2,1976.

The plan for construction of this generating plant calls for it to be completed and put into operation by June 1, 1981. Recognizing that it will not be using the plant’s entire output immediately, Sikeston plans to sell the surplus power during the 20-year period to eight other municipalities in Missouri, one of which is respondent city of Trenton, and to the Associated Electric Cooperative, Inc. (AEC).

Sikeston has entered into a cooperation agreement with the purchasing municipalities for the purpose of providing electric service to these cities and their inhabitants. This agreement provides that Sikeston will finance, construct, own, and operate the project and will provide and sell surplus electric power to the purchasing municipalities which will purchase the same. In furtherance of the cooperation agreement, Sikeston and the city of Trenton have entered into a “power sales contract” dated December 1,1976, which calls for the city of Trenton to purchase power from the city of Sikeston over a term of years. Substantially identical contracts were entered into with each of the other purchasing municipalities and the city of Sikeston. The length of each contract and the amount of power to be purchased vary with each purchasing municipality. All of the contracts are on a “take-or-pay” basis, meaning the purchasing municipalities would be obligated to pay for the power they have contracted to purchase regardless of whether they actually take and use the power and regardless of whether the power is available from the project. The obligations of the purchasing municipalities would be payable only from the revenues of their respective municipal electric systems and not from any tax revenues or general revenues of the municipalities.

Sikeston and AEC have executed a “letter of intent” in which they propose to enter into a “power sales, interconnection and operating agreement”. This agreement provides that AEC will purchase from Sikeston on a “take-or-pay” basis a portion of the temporary surplus output of the project. AEC also agreed to provide transmission services for the purchasing municipalities and standby power at such times as the project is out of service.

The aggregate revenues under the contracts with the municipalities and AEC are projected to be sufficient to pay the principal and interest on the bonds over the life of the bond issue. In addition Sikeston intends to set aside, out of the bond proceeds, reserve funds to provide for start-up operating expenses, acquisition of initial fuel inventory, initial debt service reserve requirements, and a reserve for renewals, replacements, and contingencies.

The relators challenge the authority of Sikeston and the purchasing municipalities to proceed with this project. The relators raise the following issues: (1) the construction of a power plant greatly in excess of the current needs of Sikeston violates the requirement that a city act only in furtherance of proper “public municipal purposes” because it only incidentally serves the residents of Sikeston, (a) Sikeston has exceeded the scope of its statutory authority to supply the city and its inhabitants with electric power, (b) a project of this size is not a proper area for municipal action in. the absence of specific legislative authority, (e) the project is a venture into a field of private business which is not a proper municipal purpose; (2) the issuance of the bonds and the sale and purchase of a portion of the output of the project violates secs. 28 and 25, art. VI, Missouri Constitution, which prohibit cities from lending their credit or granting public money or property to any private individual, association, or corporation; (3) the funding of reserves and start-up expenses for the project is an unauthorized use of bond proceeds; (4) the “power sales contracts” create an “indebtedness” of the purchasing municipalities in violation of art. VI, sec. 26(a), Missouri Constitution; and (5) the purchasing municipalities have violated art. VI, sec. 27, Missouri Constitution, because they entered the “power sales contracts” without first securing voter approval.

The first issue raised by relators is whether Sikeston’s act of constructing a power plant greatly in excess of its present needs is a proper public municipal purpose. It is a basic principle of municipal law that public funds may be expended only for proper public municipal purposes. Dysart v. City of St. Louis, 321 Mo. 514, 11 S.W.2d 1045 (Mo. banc 1928); State ex rel. City of Jefferson v. Smith, 348 Mo. 554, 154 S.W.2d 101 (Mo. banc 1941). The test of whether a public purpose is being served was stated in Dysart at 1047:

“But, though the principle that taxes may be levied for public purposes only is one of universal acceptance, its application is often, difficult. What constitutes a public use is not easy to define. State v. Orear, 277 Mo. 303, 210 S.W. 392; Halbruegger v. St. Louis, 302 Mo. 573, 262 S.W. 379. It is said: ‘In deciding whether, in a given case, the object for which the taxes are assessed falls on the one side or the other of this line, the courts must be governed mainly be the course and usage of the government, the objects for which taxes have been customarily and by long course of legislation levied, what objects or purposes have been considered necessary to the support and for the proper use of the government, whether state or municipal. Whatever lawfully pertains to this and is sanctioned by time and the acquiescence of the people may well be held to belong to the public use, and proper for the maintenance of good government, though this may not be the only criterion of rightful taxation. * * Perhaps the best test of rightful taxation is that the proceeds of the tax must be used for the support of the government or for some of the recognized objects of government, or directly to promote the welfare of the community. It may also be conceded that that is a public purpose from the attainment of which will flow some benefit or convenience to the public. In this latter case, however, the benefit or convenience must be direct and immediate from the purpose, and not collateral, remote or consequential. It must be a benefit or convenience which each citizen of the community affected may lay his own hand to in his own right, and take unto his own use at his own option, upon the same reasonable terms and conditions as any other citizen thereof.’ 26 R.C.L. 46.”

“It is well settled that the legislature where not forbidden by the constitution, has power to authorize a municipal corporation to own and operate any public utility such as is generally owned and operated in a city by public service corporations, for the purpose of supplying not only its needs [government’s] but also those of the inhabitants or residents of the municipality.” 12 McQuillin, Municipal Corporations, sec. 35.04, p. 396 (rev. ed. 1970); Lockhart v. Kansas City, 351 Mo. 1218, 175 S.W.2d 814 (Mo. 1943). In Missouri, municipalities are authorized to construct energy plants and supply energy pursuant to sec. 91.010, RSMo 1969. Furthermore, sec. 91.020, RSMo 1969, authorizes municipalities to sell to other municipalities, while sec. 91.030, RSMo 1969, allows other municipalities to purchase power from vendor municipalities. There is also no question that a municipality may sell surplus power to nonresidents or other municipalities without violating the proscription against expending public funds for other than public purposes. Taylor v. Dimmitt, 336 Mo. 330, 78 S.W.2d 841 (Mo. 1934); Speas v. Kansas City, 329 Mo. 184, 44 S.W.2d 108 (Mo. 1931).

In Speas the court concluded that a Kansas City charter provision which allowed the city to sell surplus water to nonresidents did not conflict with the public purposes doctrine. The court said at 113:

. . However, Kansas City is authorized by sections 8 and 11 of article 1 of its charter to acquire and to operate waterworks for public purposes only, and the acquisition or operation of waterworks by it for purposes other than public purposes, even though so authorized by its charter, would be in violation of section 3 of article 10 of the Constitution of Missouri, which says: ‘Taxes may be levied and collected for public purposes only.’ Is the charter power of Kansas City to supply water to nonresidents in conflict with its charter power to acquire and to operate waterworks for public purposes only or with the constitutional provision that taxes may be used for public purposes only? We think not, because the charter power of Kansas City to supply water to nonresidents may be exercised, as was doubtless intended by the framers of its charter, for the benefit of the city and its inhabitants. In other words, if Kansas City acquired and is operating its waterworks primarily for the purpose of supplying water for its own needs and the needs of its inhabitants, and is incidentally selling surplus water to nonresidents, without impairing the usefulness of its waterworks for said primary purpose, such exercise of its charter power to supply water to nonresidents is not inconsistent with its charter power to acquire and to operate waterworks for public purposes only, nor with the constitutional provision that taxes may be used for public purposes only. In this conclusion, we are amply supported by rulings in other jurisdictions.”

The issue presented by relators, therefore, is how much surplus can a municipality anticipate selling to other municipalities when the former is constructing a power plant, without violating the public purposes doctrine. The relators argue that because of the large surplus, i. e., the large amounts of power available to the purchasing municipalities, the risk of financial failure borne by Sikeston, and the speculative nature of the projections contained in the “feasibility study”, the primary benefit of this project is to the purchasing municipalities and not Sikeston. Relators cite only two cases, Dysart v. City of St. Louis, supra, and State ex rel. City of Jefferson v. Smith supra, to support their assertion that a municipality cannot sell a surplus of power of the magnitude proposed by Sikeston. Neither of these cases directly involved the issue present in the instant case.

Dysart involved a suit by a taxpayer to prevent the delivery of bonds voted by the taxpayers of St. Louis for the development of an airport. The plaintiff argued that an airport would not promote a public purpose because it would only serve a small minority of the residents. The court quoted the general language regarding public purposes and held the airport did serve a public purpose and the issuance of the bonds was authorized.

State ex rei. City of Jefferson was an action for mandamus to compel the state auditor to register bonds proposed by Jefferson City for the purpose of erecting an office building. This building was intended to house the state Unemployment Compensation Commission along with a few city offices. The court held this was not authorized because it was primarily for the benefit of the state and only incidentally for the municipality. The fact that the city intended to use a small portion of the building was only an incidental use intended to circumvent the public purposes requirement.

Respondents have directed the court’s attention to two Kentucky cases, Miller v. City of Owensboro, 343 S.W.2d 398 (Ky. 1961), and Wilson v. City of Henderson, 461 S.W.2d 90 (Ky. 1970), which we find persuasive on this issue. In Miller the city of Owensboro proposed to construct a generating plant with an initial capacity of 125,000 kw and with space for an ultimate capacity of 800,000 kw. The plant they then owned had a capacity of 22,500 kw while the requirements of the city and its inhabitants were 40,000 kw. It was projected that the energy needs of Owensboro were growing at 8.11% per year. The city planned to enter into a 30-year contract with Kentucky Utilities Company to purchase the surplus energy after the needs of the city had been met. Like Missouri, Kentucky statutes provide for the sale of power by one municipality to another, but the plaintiffs contended that the sale of such an extensive surplus violated the public purpose doctrine. The court held, however, that the sale of the surplus in Miller did not violate the public purpose doctrine because the large size of the plant was premised upon the anticipated future needs of the municipality. The Kentucky court stated at 401:

“The facts do not support the contention that the plan is primarily for the benefit of Kentucky Utilities Company. To the contrary, the record establishes to our complete satisfaction that the purpose of the plan is to provide, on the basis of a reasonable anticipation of future needs, a plant adequate to supply the energy demands of the city and its inhabitants for a substantial period of years; that it is a matter of sound economic planning to provide initially for a surplus capacity rather than to add to the plant on a piecemeal basis as the needs from time to time arise; that while the surplus capacity of the proposed new station will be substantial, the surplus will gradually diminish and within fifteen years it is probable that the entire capacity will be needed for city consumers; and that the sale of the surplus to Kentucky Utilities Company is an advantageous means of realizing a return on the excess capacity rather than letting it constitute an economic loss.”

In Wilson the city of Henderson proposed to construct a power plant with two generating units, each with a capacity of 175,000 kw. The present requirements of the city were 34,820 kw and the present capacity of the plant was 48,000 kw. The load-growth rate of Henderson was 10.98% per year and the evidence showed that within 20 years the firm capacity (175,000 kw) of the expanded plant would be needed by the city and within 30 years the capacity of the entire plant would be required. The city of Henderson agreed to sell the surplus to Big Rivers Rural Electric Cooperative Corporation. The court upheld this plan against the contention that it violated the public purpose doctrine, finding that Henderson’s plan was not significantly different from the plan authorized in Owensboro.

The court holds that the plan proposed by Sikeston serves a public purpose and is primarily for the residents of the city of Sike-ston. The relators would have us hold that because Sikeston may not need to use the capacity of this plant for 20 years and, during that period, plans to sell the surplus to others, it is not being constructed primarily for the benefit of Sikeston. Such a holding would compel Sikeston to build a plant that would be obsolete when it went on the line. During the oral argument, the amici power companies stated it is reasonable for power companies to anticipate power needs for 20 years when building a power plant.

In light of the evidence presented in this case by way of the “feasibility study”, we find that Sikeston’s plan does serve a municipal purpose. The “Summary of Findings and Recommendations” of the study show:

“. . . [T]hat the most economical course of action is to build a large coal fired steam plant and sell the excess capacity and energy to other Municipal Utilities and Associated Electric Cooperative.
“The size generating unit should be 235 MW in order to keep future rate increases reasonable and the cost of power competitive enough to readily market the surplus power and energy.
“After evaluating the various courses of action, we recommend that a 235 MW coal fired generating plant be built contingent on obtaining suitable contracts with other Municipal Utilities and Associated Electric Cooperative for the purchase of surplus power and energy from the plant.”

We are cognizant of the fact that individuals as well as communities are facing a crisis in the area of energy. Every day we are bombarded by this fact through the media and the daily costs of energy. Sike-ston has confronted this problem by planning for its projected energy needs. That is the thrust of this project — not the incidental sale of energy to other municipalities. In order to supply energy economically and for an extended period of time, Sike-ston had to build a plant larger than its present requirements. Furthermore, in order to make it initially economically feasible, it had to sell the surplus. The sale of the surplus is merely incidental to the need to plan for the future which we find serves a public purpose and primarily benefits the residents of Sikeston.

Relators next contend that Sikeston has exceeded the scope of its statutory authority in proposing to construct such a large plant. It is relators’ contention that secs. 91.010 and 91.020, RSMo 1969, do not contemplate the building of a municipal power plant with such an extensive surplus of energy which in turn will be sold to others.

Section 91.010 provides: “The city council of any city, town or village in this state shall have power to erect, maintain and operate waterworks, or to acquire waterworks by purchase and to operate and maintain the same, and to supply the inhabitants thereof with water; to erect, purchase, acquire, maintain and operate gas and power plants, electric light plants, ice plants or any other kind of plant or device for lighting purposes, or to acquire and own the same by purchase and to maintain and operate such plants and to supply the inhabitants of such cities, towns and villages with water, light, ice and power therefrom”

Section 91.020 provides: “Any city in this state, which owns and operates any electric light or power plant, may, and is hereby authorized and empowered to, supply electric current from its light or power plant to other municipal corporations for their use and the use of their inhabitants, and also to persons and private corporations for use beyond the corporate limits of such city, and to enter into contracts therefor for such time and upon such terms and under such rules and regulations as may be agreed upon by the contracting parties.”

Section 91.030, RSMo 1969, authorizes other municipalities to purchase power from vendor cities.

Relators argue that, although sec. 91.020 authorizes the sale of power, it only grants the authority to sell “normal excess incident to carrying out the fundamental object of supplying the city and its inhabitants with light and power”. Relators Correctly cite two general principles of law: (1) that municipalities are creatures of statute and only have those powers granted to them by the legislature, and (2) courts have generally followed a strict rule of construction when construing the powers of municipalities. These rules were expressed in Taylor v. Dimmitt, supra, as follows:

“. . . Even as to. governmental functions, Missouri cities have or can exercise only such powers as are conferred by express or implied provisions of law; their charters being a grant and not a limitation of power, subject to strict construction, with doubtful powers resolved against the city. ‘It is a general and undisputed proposition of law that a municipal corporation possesses and can exercise the following powers, and no others: (1) Those granted in express words; (2) those necessarily or fairly implied in, or incident to, the powers expressly granted; (3) those essential to the declared objects and purposes of the corporation — not simply convenient, but indispensable. Any fair, reasonable doubt concerning the existence of power is resolved by the courts against the corporation, and the power is denied.’ ” 78 S.W.2d at 843.

Relators rely primarily on Taylor to support their argument that the proposed project is beyond the statutory authority conferred upon Sikeston. Taylor, however, may be distinguished upon its facts. It involved a situation where the vendor municipality proposed not only to sell surplus power to nonresidents, but also to construct an electric transmission line outside the city. The parties conceded that the municipality had the power to sell the surplus energy but argued that the construction of transmission lines beyond the city limits was unauthorized. This court agreed holding that neither secs. 7642 nor 7643, RSMo 1929 (now secs. 91.020 and 91.030, RSMo 1969, respectively) authorized the vendor municipality to erect transmission facilities outside the city. Furthermore, sec. 7643 (91.030) explicitly gave this authority to the purchasing municipality, evidencing a desire on the part of the legislature to preclude vendor municipalities from this field.

Contrary to the situation in Taylor, we find that the plain meaning of sec. 91.010 gives a municipality the express authority to construct a power plant while sec. 91.020 gives a municipality express authority to sell power to others. There is no limitation in sec. 91.020 of the amount of power that a municipality can sell. Furthermore, no ambiguity is created by the language, “[a]ny city in this state, which owns and operates any electric light or power plant, may, and is hereby authorized and empowered to, supply electric current from its light or power plant to other municipal corporations . . . and also to persons and private corporations for use beyond the corporate limits of such city . . . .” This does not, however, allow a municipality to sell its entire power supply without providing for its own residents. It can only sell the excess over what its present needs are. 12 McQuillin, Municipal Corporations, sec. 35.33, pp. 454-455 (rev. ed. 1970). In Miller v. City of Owensboro, supra, and Wilson v. City of Henderson, supra, Kentucky held a statute similar to the.one in the instant case did not foreclose the sale of a large surplus to others. The size of the Sikeston power plant is reasonably related to its present and predictable future needs. The point is overruled.

Relators next contend that the sale of energy on the scale proposed by this project is a matter of statewide concern and, as such, is not a proper area for municipal action in the absence of express legislative authority. We have already stated that sec. 91.020 grants municipalities the express authority to sell surplus power to other municipalities. Unlike the instant case where the municipality has been granted express statutory authority, all the cases cited by relators in support of their argument deal with situations where there was a local ordinance which was passed without express authority or which conflicted with a state statute. These cases merely recognize the rules that municipalities are limited to those powers granted them by the state, and where local ordinances conflict with state statutes the latter is paramount. This point is without merit since we have already determined that Sikeston has express authority to engage in this project.

Relators also contend that the exercise of extraterritorial powers by a municipality has always been a controversial subject. Furthermore, they argue, the legislature has enacted the Public Service Commission law to regulate private utility companies while there is no such framework for municipal corporations engaged in the same activity. According to relators, the inference to be derived from this is that the legislature had no idea that municipalities would be engaged in power projects comparable to the one proposed by Sikeston. Re-lators suggest that the enactment of the Public Service Commission law indicates that the legislature intended to preempt municipal corporations from acting in the area of extraterritorial delivery of electric service.

In Public Service Commission v. City of Kirkwood, 319 Mo. 562, 4 S.W.2d 773 (Mo. 1928), the PSC argued that before Kirk-wood could supply water to residents outside its city limits it had to obtain a certificate of public convenience and necessity from the commission. The city had authority under secs. 9079 and 9083, RSMo 1919 (now secs. 91.010 and 91.050, RSMo 1969, respectively) to erect, own, and operate a water supply system and to sell the water to nonresidents. The court held the PSC had no authority to compel Kirkwood to obtain a certificate of public convenience and necessity and, furthermore, the enactment of the Public Service Commission law did not act to repeal the powers granted municipal corporations under other statutes. The court holds that relators’ contention is without merit because Sikeston has express authority to engage in the extraterritorial supplying of electric power.

Relators next contend this project is not a proper municipal purpose for Sikeston to undertake because it is a venture into private business. The question of whether a municipality is engaging in private business is not answered by simply determining if private businesses are engaged in the same activity. Relators quote extensively from State ex rel. City of Excelsior Springs v. Smith, 336 Mo. 1104, 82 S.W.2d 37, 39 (Mo. banc 1935), to support this general proposition. The court held, however, in that case that Excelsior Springs could equip, manage, and control the principal mineral springs and wells in that city without violating the private business proscription.

Relators once again cite Taylor, supra, and Missouri Public Service Co. v. City of Trenton, 509 S.W.2d 770 (Mo.App. 1974), for the proposition that Sikeston cannot engage in this venture. Both cases dealt with the power of a vendor municipality to build transmission facilities outside their corporate boundaries. They were decided on the basis that this power was not granted to vendor municipalities and not on the basis of the private business proscription as rela-tors contend.

In Bowman v. Kansas City, 233 S.W.2d 26 (Mo. banc 1950), Kansas City proposed to use public funds to construct, a parking garage. Plaintiffs challenged this on numerous grounds, one of which was that it violated the rule against municipalities engaging in private business. The court ruled against the plaintiffs saying at 35:

“The acquisition of land for and the establishment and operation of public off-street parking stations or garages by the defendant city being for a public use and for public purposes, the fact that such stations will compete with private enterprises is not material or decisive. It is well settled that, if it is in the public interest and for a public purpose, a city may be authorized by the state to engage in a business commonly carried on by a private enterprise; and in such case such city may levy a tax to support such business and compete with private interests engaged in a like activity. Puget Sound Power & Lt. Co. v. City of Seattle, 291 U.S. 619, 54 S.Ct. 542, 545, 78 L.Ed. 1025, rehearing denied 292 U.S. 603, 54 S.Ct. 712, 78 L.Ed. 1466.”

As we have previously stated, the project proposed by Sikeston is in the public interest and for a public purpose. This type of project is also expressly authorized by the legislature. Furthermore, the sales of surplus power to other municipalities are only incidental to the service rendered the residents of Sikeston, i. e., power for the present and future, regardless of the fact the sales are projected to occur over a 20-year period. The court holds that this project does not violate the private business proscription.

Relators next contend that the financing arrangement for this project constitutes a lending of credit by Sikeston as well as by the purchasing municipalities where each of these entities is contributing its credit to the others and to AEC through either the bonds or the power sales contracts. Relators assert this arrangement violates both secs. 23 and 25 of art. VI, Missouri Constitution.

Section 23 provides in part: “No county, city or other political corporation or subdivision of the state shall own or subscribe for stock in any corporation or association, or lend its credit or grant public money or thing of value to or in aid of any corporation, association or individual, except as provided in this constitution.”

Section 25 provides in part: “No county, city or other political corporation or subdivision of the state shall be authorized to lend its credit or grant public money or property to any private individual, association or corporation except as provided in Article VI, Section 23(a) and except that the general assembly may authorize any county, city or other political corporation or subdivision to provide for the retirement or pensioning of its officers and employees and the widows and children of deceased officers and employees and may also authorize payments from any public funds into a fund or funds for paying benefits upon retirement, disability or death to persons employed and paid out of any public fund for educational services and to their beneficiaries or estates; and except, also, that any county of the first class is authorized to provide for the creation and establishment of death benefits, pension and retirement plans for all its salaried employees, and the widows and minor children of such deceased employees.”

As authority for their contention, relators only quote the two constitutional provisions set forth supra. The weight of authority, however, is against the interpretation rela-tors espouse. There are two lines of cases which support the constitutionality of the instant financing arrangement. The first is that there is no lending of credit where revenue bonds are payable solely from the revenue derived from the project and not from taxes. As to the argument that the purchasing municipalities are lending their credit, the relators argue this theory finds support in New Liberty Medical & Hosp. Corp. v. E. F. Hutton & Co., 474 S.W.2d 1 (Mo.banc 1971). In that case a hospital district (the state entity) entered into a long-term lease to pay rentals which covered the principal and interest of debentures which in turn covered the cost of building and equipping a proposed hospital. The debentures were to be issued by a not-for-profit corporation which was set up to build, equip, and run the hospital.

As against the contention that this funding arrangement violated the sec. 25, art. VI, proscription against lending credit, the court in E. F. Hutton, quoting from State ex rel. Thomson v. Giessel, 271 Wis. 15, 72 N.W.2d 577, 584 (1955), said that the purpose of this provision “is to prohibit the state from acting as a surety or guarantor of the collateral obligation of another party. It is the promise by the state as a guarantor to answer for the debt of another that is proscribed by the state constitution.” 474 S.W.2d at 5.

In the instant case the purchasing municipalities have not agreed to act as guarantors of Sikeston⅛ project. To the contrary, they have negotiated at arm’s length to purchase power at certain rates to be paid out of the revenues produced in the purchasing municipalities from the sale of electricity alone. This does not violate the proscription against lending credit.

The same reasoning applies to Sikeston— it is not lending its credit to either the purchasing municipalities or AEC. The revenue bonds proposed by Sikeston are to be paid solely out of the revenues generated from the sale of electricity and not from money raised by taxation. The same contention raised by relators in the instant case was raised in Miller v. City of Owensboro, supra, and rejected. See also People ex rel. City of Salem v. McMackin, 53 Ill.2d 347, 291 N.E.2d 807 (Ill.1972), and Allen v. Tooele County, 21 Utah 2d 383, 445 P.2d 994 (1968).

The second theory under which the constitutionality of this funding arrangement may be sustained is that no violation of see. 23 or 25, art. VI, Missouri Constitution, occurs where the expenditure of public funds is for a public purpose. State ex rel. Farm Elec. Coop., Inc. v. State Env. I. A., 518 S.W.2d 68 (Mo.banc 1975); State ex rel. City of Boonville v. Hackmann, 293 Mo. 313, 240 S.W. 135 (Mo.banc 1922). In State ex rel. Farm Elec. Coop., the relator challenged the constitutionality of secs. 260.005 through 260.090, RSMo Supp.1973, as viola-tive of secs. 23 and 25, art. VI, Mo.Const. The statutes authorized the Environmental Improvement Authority to issue bonds to finance pollution control facilities which it in turn would lease or sell to private persons, firms, municipal corporations, etc. The bonds were to be paid for from the revenues derived from the sale or lease of the pollution control facilities. Dispensing with the challenge under secs. 23 and 25, art. VI, Mo.Const., the court said at 74, “[i]t has long been recognized in Missouri . that the constitutional prohibitions noted are not violated when money and property are expended or utilized to accomplish a ‘public purpose’.” The court has already concluded that this project serves a public purpose. For these reasons this point is overruled. See also Industrial Develop. Auth. of City of Pinal v. Nelson, 109 Ariz. 368, 509 P.2d 705 (1973), and People ex rel. City of Salem v. McMackin, supra.

Relators’ next point is that the funding of reserves and start-up expenses for the project is an unauthorized use of bond proceeds. Relators assert that the proceeds obtained from the issuance of revenue bonds may be used only for purposes both authorized by statute and approved by the voters. Relators concede that the use of the bond proceeds for the funding of reserves and start-up expenses was approved by the voters of Sikeston, but they claim this is not authorized by any statute. It is a general principle recognized in this state that a “constitutional grant to issue and sell revenue bonds carries with it by implication such other necessary powers as are needed to carry the granted authority into effect.” State ex rel. City of Fulton v. Smith, 355 Mo. 27, 194 S.W.2d 302, 305 (Mo.banc 1946).

We agree with the Kentucky court in Miller v. City of Owensboro, supra, that the provision for a reserve fund and start-up expenses is reasonably necessary to carry out the authority granted, i. e., the construction of a power plant, because it is necessary to put the plant on a sound operating basis. Furthermore, we also agree with the court in Miller when it concludes that these provisions are part of the “establishment” of the plant. In other words, the provisions for a reserve fund and start-up expenses is an integral part of the municipalities power granted by sec. 91.010 to “erect, purchase, acquire, maintain and operate gas and power plants, electric light plants, . . . The point is overruled.

Relators next contend the power sales contracts create an “indebtedness” on behalf of the purchasing municipalities in violation of art. VI, sec. 26(a) and (b), Mo. Const., because those contracts were not submitted for voter approval. Sec. 26(a) of art. VI, provides: “No county, city, incorporated town or village, school district or other political corporation or subdivision of the state shall become indebted in an amount exceeding in any year the income and revenue provided for such year plus any unencumbered balances from previous years, except as otherwise provided in this constitution.” Sec. 26(b) of art. VI, provides: “Any county, city, incorporated town or village or other political corporation or subdivision of the state, by vote of two-thirds of the qualified electors thereof voting thereon, may become indebted in an amount not to exceed five per cent of the value of taxable tangible property therein as shown by the last completed assessment for state or county purposes, except that a school district by a vote of two-thirds of the qualified electors voting thereon may become indebted in an amount not to exceed ten per cent of the value of such taxable tangible property.”

However, the obligation of the purchasing municipalities in this ease is not an “indebtedness” within the terms of art. VI, sec. 26(a)(b) of the constitution. The general rule on what constitutes an “indebtedness” within the meaning of art. VI, sec. 26(a), was stated in Scroggs v. Kansas City, 499 S.W.2d 500, 502 (Mo. 1973), which quoted from Grossman v. Public Water Supply Dist. No. 1, 339 Mo. 344, 96 S.W.2d 701, 706 (1936):

“It has been held repeatedly in this state that the constitutional limitation imposed by section 12, article 10 of the Missouri Constitution on the indebtedness a political corporation may incur, contemplates a debt which must be paid directly or indirectly by resort to taxation. State ex rel. Smith v. City of Neosho, 203 Mo. 40, 82, 101 S.W. 99, 109; Bell v. City of Fayette, 325 Mo. 75, 91, 28 S.W.2d 356, 361; Hight v. City of Harrisonville, 328 Mo. 549, 558, 41 S.W.2d 155, 158; Hagler v. City of Salem, 333 Mo. 330, 336, 62 S.W.2d 751, 754; State ex rel. City of Hannibal v. Smith, 335 Mo. 825, 833, 74 S.W.2d 367, 371; Sager v. City of Stanberry, 336 Mo. 213, 227, 78 S.W.2d 431, 438.
“It is likewise well established that the ‘special fund doctrine’ prevails in Missouri, and that an indebtedness of a city or other like political corporation payable only out of income derived from the property purchased is not a debt within the meaning of the above provision of the Constitution. State ex rel. City of Excelsior Springs v. Smith, 336 Mo. 1104, 1112, 82 S.W.2d 37, 40; State ex rel. City of Hannibal v. Smith, supra, 335 Mo. 825, loc.cit. 834, 74 S.W.2d 367, loc.cit. 371. But if the special fund pledged to the payment of the debt must be replenished by taxation, the contrary is true. Hagler v. City of Salem, supra; Hight v. City of Harrisonville, supra.

The proscription against municipal indebtedness without voter approval is only applicable in a situation where the municipality proposes to expend tax revenues. In the instant case the purchasing municipalities have no obligation to use tax monies to make the payments specified in the contract. To the contrary, the purchasing municipalities are obligated to make payments solely from the revenues of their electric systems, which places this situation within the parameters of the “special fund” doctrine. All the cases cited by relators involved situations where the municipality pledged tax revenues and are, therefore, distinguishable on that basis from the instant case.

Relators also contend that these contracts violate art. VI, sec. 26(b) of the constitution because the obligations of the purchasing municipalities are unconditional. Relators place particular reliance on New Liberty Medical & Hospital Corp. v. E. F. Hutton & Co., supra. That case is distinguishable, however, in that they proposed in addition to using the rentals from the hospital to use tax receipts from the hospital district and, therefore, brought it within the indebtedness provision of art. VI, sec. 26(a) and (b), whereas, in the instant case, no tax revenues will be used by the purchasing municipalities.

Relators’ final contention is that the purchasing municipalities are acting in violation of art. VI, sec. 27, Mo.Const., because they did not obtain voter approval of the “power sales contracts”. That section provides: “Any city or incorporated town or village in this state, by vote of a majority of the qualified electors thereof voting thereon, may issue and sell its negotiable interest bearing revenue bonds for the purpose of paying all or part of the cost of purchasing, constructing, extending or improving any of the following: (1) revenue producing water, gas or electric light works, heating or power plants; (2) plants to be leased or otherwise disposed of pursuant to law to private persons or corporations for manufacturing and industrial development purposes, including the real estate, buildings, fixtures and machinery; or (3) airports; to be owned exclusively by the municipality, the cost of operation and maintenance and the principal and interest of the bonds to be payable solely from the revenues derived by the municipality from the operation of the utility or the lease of the plant.”

Relators argue that the “power sales contracts” entered into by the purchasing municipalities provide the security necessary to market the Sikeston bonds and, as such, are comparable to “revenue obligations”. Art. VI, sec. 27, however, does not refer to “revenue obligations”, but instead specifically refers to “negotiable interest bearing revenue bonds”. Furthermore, these contracts are not being entered into by the purchasing municipalities for the purpose of constructing a power plant, but instead were entered into in order to purchase electricity. Relators’ point is overruled.

Relators’ information in the nature of quo warranto is dismissed.

MORGAN, C. J., and FINCH, DONNELLY, RENDLEN and SEILER, JJ., and KELLY, Special Judge, concur.

HENLEY, J., not sitting.


source: Caselaw Access Project

author: HENLEY, Judge.

license: Public Domain

text:
    DIRECTOR OF the DEPARTMENT OF REVENUE, JACKSON COUNTY, Missouri, Respondent, v. PARCELS OF LAND ENCUMBERED WITH DELINQUENT TAX LIENS, Appellant, and Jolijohn, Inc., Purchaser-Appellant.
    No. 59567.
    Supreme Court of Missouri, En Banc.
    Sept. 12, 1977.

      Ira K. Witschner, Kansas City, for appellant.
    Charles J. Fraas, Jr., Kansas City, Edward L. Pendleton, County Counselor, Kansas City, for respondent.
   HENLEY, Judge.

This is an appeal by Jolijohn, Inc. (Joli-john) from a judgment setting aside a deed (and judgments in a tax suit on which the deed is based) conveying to it real estate purchased at a tax sale. We affirm.

The tax suit, brought under the Land Tax Collection Act, was commenced by the Director of the Department of Revenue of Jackson county (Director) in May, 1974. The purpose of that action was to collect real estate taxes due taxing authorities by foreclosing the liens of delinquent tax bills upon several parcels of real estate, only one of which (parcel number C46-232) is involved in this appeal. On July 10, 1974, the delinquent taxes (and penalties) on this parcel were paid to the Director’s office and a receipt given therefor. Somehow the fact of payment was not entered on the tax records. Nor was the attorney representing the Director in the tax suit informed of the payment.

Thereafter, on January 3, 1975, a default judgment was entered foreclosing the tax liens and directing that the lands be sold by the Court Administrator of Jackson county at public sale. Pursuant to that judgment, the Court Administrator proceeded to sell this and other parcels on July 29,1975. As stated, parcel number C46-232 was sold to Jolijohn. On January 23, 1976, after a hearing, the sale was confirmed and the Court Administrator ordered to execute and deliver his deed therefor to Jolijohn.

Pursuant to that order the Court Administrator conveyed parcel C46-232 to Jolijohn on February 18, 1976. Sometime between that date and March 25, 1976, the Director learned that the delinquent taxes on this land had been paid in July, 1974, before entry of the judgment foreclosing the tax lien.

On March 25, 1976, the Director filed a motion in the tax suit praying that the judgment of foreclosure and judgment confirming the sale (insofar as they apply to parcel C46-232) and the Court Administrator’s deed based on those judgments be set aside and for naught held. Grounds for the relief sought were that the judgments and deed were the result “of irregularity, accident or mistake, to wit: Owner exhibited receipt for taxes.” Jolijohn filed objections to the Director’s motion, stating as reasons therefor “that the question of the delinquency of the subject tract of realty * * onclusively determined by the judgment of foreclosure * * * and that, therefore, under the authority of * * * Spitcaufsky v. Hatten, 353 Mo. 94, 182 S.W.2d 86, the decision as to the said delinquency of taxes is res adjudicata.”

As a part of its judgment setting aside the judgments and this deed, the court further ordered that the money paid by Joli-john be refunded to it.

Jolijohn contends that these judgments and the deed are not susceptible of being set aside on motion of the Director for several reasons; that they may be set aside only by direct attack in a separate suit in equity. Some of the reasons for this contention are that the court lacked jurisdiction to set aside the judgments, that no irregularity or mistake for which a judgment may be set aside appears from the face of the record, and that the judgments are res judicata of the facts alleged in the tax suit. The assertion that the court lacked jurisdiction to set aside the judgments is based on the fact that at the time the motion was filed more than 30 days had elapsed since they were entered. Therefore, says Jolijohn, the court lost control of the judgments under Rule 73.01 and could not set them aside on a motion based on irregularity or mistake even if such irregularity or mistake had appeared from the face of the record.

We have considered the cases cited by Jolijohn in support of its argument on these points, but find them not applicable to the facts in this case.

As stated, the taxes and penalties delinquent on this parcel when the suit was filed were paid before the judgment of foreclosure was entered. About this there is no dispute. This is a fact not known by the court when it entered the judgment of foreclosure, a fact which, if known, the Director contends, would have precluded entry of the judgment as to this land. Nor was it known then by the Director who, by his motion and evidence, has informed the court of an error of fact which, he contends, defeated the power of the court to enter the foreclosure judgment. He relies primarily on § 141.420 to support his position.

Subsection 1 of that section provides that an owner may redeem his real estate by paying the tax bill to the collector “at any time prior to the time of the foreclosure sale of such real estate * * Subsection 4 thereof provides, in pertinent part: “such payment shall operate as a release of the lien of the tax bill * * * and as a dismissal of the suit so far as such tax bill * * * [is] concerned.”

We treat the Director’s motion to set aside the judgments and deed as one in the nature of a writ of error coram nobis, an error of fact having been stated which may be, and is, demonstrated by extrinsic evidence. Murray v. United Zinc Smelting Corp., 263 S.W.2d 351, 354[2] (Mo. 1954); Rubbelke v. Aebli, 340 S.W.2d 747, 750-51[2] (Mo. 1960). In Norman v. Young, 301 S.W.2d 820[l-2] (Mo. 1957) the court said: “A motion in the nature of a writ of error coram nobis ‘is made to the trial court to correct errors of fact, not appearing on the face of the record, affecting the validity of proceedings which errors of fact were unknown to the party now seeking relief and to the court at the time of the disposition of the particular case, and which errors of fact, had they been known, would have prevented the rendition of the judgment.’ * * * ‘The motion or application is considered a new action—is in the nature of an independent and direct attack upon a judgment—with the purpose of revoking or annulling the judgment.’ ” 301 S.W.2d at 822.

The payment of the taxes before entry of the foreclosure judgment released the lien of the tax bill and effected a dismissal of the tax suit as to this parcel of land. Hence, contrary to the allegations of the Director’s tax suit, there was neither lien to enforce nor suit pending as to this land when the foreclosure judgment was entered. This error of fact as to the existence of a lien to enforce or a suit pending viable as to this parcel goes to the very heart of the power and right of the court to render the judgment of foreclosure as to this particular land. In a sense, this error of fact denied the court jurisdiction to proceed. The judgment of foreclosure was a nullity. It follows that without this judgment, the subsequent sale, the judgment confirming the sale, and the deed are without foundation and fall of their own weight.

One case upon which Jolijohn relies heavily, Spitcaufsky v. Hatten, supra, (353 Mo. 94, 182 S.W.2d 86), requires further mention. The case is cited in support of Jolijohn’s contentions that the judgments entered in this case are res judicata of the facts alleged in the tax suit, particularly the petition’s allegation that taxes on this land are unpaid and therefore delinquent. We quote the portion of that case referred to in Jolijohn’s brief: “We have in mind also that Lynbrook Gardens v. Ullmann, supra, 179 Misc. 132, 36 N.Y.S.2d [888] loc. cit. 892; Id., 265 App.Div. 859, 37 N.Y.S.2d 671, held a tax deed under the in rem procedure prescribed by Chap. 60, Consol. Laws, Art. 7-A, Title 3 of the New York Tax Law (on which our 1943 Act was modeled) could be impeached by establishing that the taxes for which the land was sold had previously been duly paid—this because the owner, knowing he had paid his taxes, would have no reason to scrutinize the delinquent tax lists; and also because there would be no cause of action and the court would have no jurisdiction, if the taxes had been paid. But, as in so many other instances that might be thought of, payment would be one of the underlying issues of fact on which jurisdiction would depend, and which the court would have power to decide. Since the Act makes the tax bills prima facie evidence that the taxes are delinquent as shown; and the decree rests upon a finding to that effect; we believe it would be res judicata.”

The Spitcaufsky case is a declaratory judgment action brought by the owners of special tax liens against the taxing authorities of Jackson county and Kansas City. It attacks on many and various grounds the constitutionality of the Land Tax Collection Act.

What is said by the court in the above quotation is in connection with a challenge to the finality of a decree authorized by the Act and the force and effect of its sections 23 (now section 141.480) and 28 (now section 141.580). The effect of section 16 of the Act (now section 141.420) and, more specifically subsection 4 thereof, on the finality of a judgment purporting to foreclose a lien for delinquent taxes on land on which the taxes have in fact been paid is not mentioned and, we assume, was not considered. However, in view of the broad language used in discussing and deciding the issue then being addressed, we cannot say, with confidence, the court did not decide indirectly the effect of section 16 contrary to today’s decision. Insofar as the two decisions conflict, Spitcaufsky is overruled.

The judgment is affirmed.

All concur.

      . Sections 141.210 to 141.810, RSMo 1969, applicable to class one counties. References to sections of statutes will be to the 1969 revision unless otherwise indicated.

      . The parties in this case (No. 59567) and in case No. 59800 (involving five other parcels of real estate bearing serial numbers IJK46-680, H46-611, IJK46-711, WXYZ46-1698 and WXYZ46-1691, and identical questions of law and fact, have agreed, and the court ordered, that the two cases be consolidated for hearing and disposition and that the decision and order entered in this case control and be entered in case No. 59800.

      . References to rules are to Missouri Supreme Court Rules.

        .Lawton-Byrne-Bruner Ins. Agency v. Air-Flight Cab Co., 479 S.W.2d 218 (Mo.App. 1972); McDaniel v. Lovelace et al., 439 S.W.2d 906 (Mo. 1969); Hamm v. Hamm, 437 S.W.2d 449 (Mo.App. 1969); Falcon Enterprises, Inc. v. Precise Forms, Inc., 509 S.W.2d 170 (Mo.App. 1974); Workman v. Anderson, 297 S.W.2d 519 (Mo. 1957); Spitcaufsky v. Hatten, 353 Mo. 94, 182 S.W.2d 86 (1944).


author: DONNELLY, Judge.

text:
    MANCHESTER FIRE PROTECTION DISTRICT et al., Appellants, v. ST. LOUIS COUNTY BOARD OF ELECTION COMMISSIONERS et al., Respondents, and City of Ferguson et al., Intervenors-Defendants-Respondents.
    No. 59481.
    Supreme Court of Missouri, En Banc.
    Sept. 12, 1977.

      R. John Bopp, Ballwin, for appellants.
    A. E. Nick, Ferguson, Stephen W. Woodard, St. Louis, for respondents.
   DONNELLY, Judge.

Plaintiffs are seven fire protection districts located in St. Louis County, Missouri, organized and operating under Chapter 321, RSMo 1969. The boundaries of all of the districts are partially overlapped by the boundaries of municipalities which offer fire services. The petition sought a declaratory judgment that Sections 321.650 through 321.685, RSMo Supp.1975, are invalid. The trial court denied relief. Plaintiffs appealed.

Plaintiffs first contend that because the provisions of Sections 321.650-321.685, supra, apply only in “any county of the first class having a charter form of government and not containing all or part of a city with a population of more than four hundred fifty thousand inhabitants” (presently St. Louis County), they constitute a special or local law where a general law can be made applicable, and are therefore unconstitutional under Mo.Const. Art. Ill, § 40(30).

The contention is without merit. In State ex rel. Fire District of Lemay v. Smith, 353 Mo. 807, 816-17, 184 S.W.2d 593, 595 (banc 1945) this Court upheld the validity of an act providing for the incorporation of fire districts in counties of 200,000 to 400,000 inhabitants, and said:

. . St. Louis County is the only county now within the population bracket stated in the act. Such fact alone does not make the act a special law for the reason the act will also apply to other counties which will attain the same population in the future. Where an act is potentially applicable to other counties which may come into the same class it is not a local law. Roberts v. Benson, 346 Mo. 676, 142 S.W.2d 1058. [(banc 1940)].”

Plaintiffs next contend that Sections 321.650-321.685, supra, are invalid because they were not passed in accordance with Mo.Const. Art. Ill, § 42, which requires publication of notice in each affected locality.

The contention is without merit. We have held that Sections 321.650-321.685, supra, do not constitute a special or local law.

Plaintiffs next contend that Sections 321.650-321.685, supra, are constitutionally void “by reason of * * * [their] conflicting standards, ambiguity and vagueness.”

Plaintiffs assert that the amount of payment to be made by the municipality to the fire protection district in the event of exclusion is inconsistently provided for in Sections 321.660 and 321.675. Section 321.-660 states generally that the municipality shall annually pay to the fire protection district for the fire services rendered an amount equal to that which would have been levied and collected on all taxable property in the area excluded for each year during which service is rendered. The excluded area is not to be subject to taxation by the fire protection district except for bonded indebtedness which existed prior to the time of exclusion. Section 321.675 states that the amount to be paid by the municipality to the fire protection district under 321.660 is to be the annual assessed value of all property subject to tax in the excluded area, multiplied by the annual tax rate as certified by the fire protection district (not including any portion of the tax rate for ambulance service or bonded indebtedness incurred prior to the exclusion) per $100 assessed valuation. These two sections are not in conflict. Section 321.675 is merely a qualification of the general statement of the amount to be paid to the fire protection district for fire services under Section 321.660. Both sections require payment only for fire services rendered, and exclude ambulance service and prior bonded indebtedness from the payments to be made by the municipality.

Plaintiffs further attack the statutes on grounds involving situations which could exist in areas which could overlap as a result of annexation elections held after September 28,1975. Appellants are all fire districts located in areas where boundaries overlapped on September 28,1975. We decline to rule these issues. To do so would be to render an opinion “which is merely advisory as to the state of the law upon purely hypothetical facts.” State ex rel. Chilcutt v. Thatch, 359 Mo. 122, 129, 221 S.W.2d 172, 176 (banc 1949).

The judgment is affirmed.

All concur.


author: FINCH, Judge.

text:
    Paul ZABOL, Plaintiff-Respondent, v. Manuel LASKY, Defendant-Appellant.
    No. 59998.
    Supreme Court of Missouri, En Banc.
    Sept. 12, 1977.

      Roberts P. Elam, Clayton, for plaintiff-respondent.
    Alan C. Kohn, St. Louis, for defendant-appellant.
   FINCH, Judge.

Plaintiff sought by this action in quantum meruit to recover $210,500 as a broker’s commission allegedly due for services rendered in connection with the sale of a building at 121 S. Meramec, Clayton, Missouri, to the Seven-Up Company. The case was submitted on the theory of a contract implied in law — i.e., the rendition of beneficial services with respect to the sale of said building with the expectation of compensation and the acceptance of the beneficial services by defendant when he knew or should have known that compensation would be expected. There was a jury verdict for plaintiff in the sum of $60,206, and defendant appealed to the Missouri Court of Appeals, St. Louis District, which reversed. On application we ordered the case transferred, and we now decide it as though here on direct appeal. We reverse.

Defendant contends that plaintiff did not make a submissible case and that for this reason the trial court erred in denying his motion for a directed verdict at the close of all the evidence. He bases this contention on two grounds. In the first place, he says that there was not sufficient evidence from which a contract to pay for services in connection with sale of the building could be implied. Next, he asserts that the evidence was not sufficient to show that acts of plaintiff referable to ultimate sale of the building were the efficient or procuring cause of the sale. The court of appeals reversed on the basis of defendant’s first contention, holding that the evidence established that plaintiff had been employed to lease space in the building, not to sell it, and that there was no evidence that he had performed any services for defendant in connection with sale of the building. For those reasons, the court of appeals concluded that no implied contract could be inferred to authorize a judgment in quantum meruit for services in connection with sale of the building and did not reach the second contention.

Plaintiff’s application for transfer was predicated upon an apparent conflict between the court of appeals’ decision and previous decisions of this court and other appellate courts regarding the sufficiency of evidence required to support a submission to the jury on a quantum meruit theory. However, after briefs and argument in this court, it became clear that in order to support his theory for recovery, the plaintiff, as a broker, was required to establish not only an implied contract to pay for his services but also that his acts with reference to the ultimate sale were the efficient or procuring cause thereof. We have concluded that even if we should hold that plaintiff did offer sufficient evidence from which the jury could infer a contract to pay the plaintiff if he produced a buyer rather than a lessee for the building, we would still be compelled to reverse the judgment on the basis that the plaintiff clearly failed to offer sufficient evidence from which the jury could infer that his acts were the ultimate or procuring cause of the sale under the standards long recognized in the appellate decisions of this state. It would therefore serve no useful purpose for us to decide the question of whether the evidence of services rendered was sufficient to make a submissible case for the jury on the existence of an implied contract, and we do not do so.

The record contains a great deal of inconsistent testimony concerning the existence of such an implied contract and, in view of our disposition, it would only add length and create confusion to attempt to relate all of the evidence relating to that difficult question in this opinion. Instead, only the facts essential to the determination of whether, even assuming an implied contract, the plaintiff was the procuring cause of the sale will be summarized.

In May 1963 defendant and his wife were in the process of constructing an office building for investment purposes in Clayton. The building was ten stories high, each floor containing approximately 10,000 square feet of rental space, and there were four floors below grade, each containing approximately 25,000 square feet of parking space. The exterior of the building was practically completed at that time, but the interior was unfinished and there were no tenants in the building.

Defendant Lasky began looking for someone to aid him in leasing space in the building. He met with plaintiff, a licensed real estate broker with several years experience, and orally contracted with him to take charge of the leasing operation. Plaintiff immediately moved from his downtown office to defendant’s office next to the building under construction. He was to work practically full time and was to receive a guaranteed draw of $200 per week which was to be offset against commissions on each lease he obtained of 1½ per cent of the gross amount of the lease, plus an override of ½ per cent on any lease obtained in conjunction with another employee of defendant. As explained by defendant, plaintiff’s commission would be calculated by applying the percentage agreed upon to the number of square feet leased times the price per square foot times the length in years. This was less than the usual commission for such services but the arrangement contemplated that defendant, rather than plaintiff, was to pay for such expenses as advertising and producing brochures.

Plaintiff commenced work in May 1963. He and defendant worked together to plan a program after which plaintiff undertook to carry it out. Both attended a restaurant convention in Chicago where they attempted to generate an interest in establishing a restaurant on the top floor of the building. Plaintiff contacted various insurance companies and also undertook to contact all those listed in a Chamber of Commerce book which he and defendant thought would contain the firms which were likely prospects. Plaintiff first would make a telephone contact with the company and, if any interest was shown in renting space, he followed up with a letter and brochure. If that resulted in an expression of interest, he undertook to make appointments for personal visits. He kept a card record of those contacts where any interest was shown in leasing, listing the person contacted and the status of the effort as to such company.

One of the businesses contacted by the plaintiff was the Seven-Up Company. After various preliminary contacts there, he talked by telephone to Howard E. Ridge-way, executive vice-president and the then acting president of the company. Plaintiff testified that he explained that he wanted to talk to Ridgeway about the Seven-Up Company leasing the building and that an appointment was made for Mr. Ridgeway to look at the building on July 16, 1963. Mr. Ridgeway, in a deposition which plaintiff introduced, testified that he told plaintiff when he called that Seven-Up was not interested in leasing but, when plaintiff insisted, he agreed to look at the building.

On July 16,1963, Ridgeway met plaintiff and defendant and toured the unfinished building, climbing the stairs to the top floor to permit Ridgeway to see the view from that point. There is variance in the testimony as to what occurred at that point. Plaintiff testified that he had been talking to Ridgeway about leasing the building but that when they reached the top, Ridgeway indicated an interest in buying. Both plaintiff and defendant responded that the building had been erected as an investment and that defendant was interested only in leasing, not selling. Contrary to what plaintiff stated, Ridgeway testified that a sale or offer to purchase was not discussed at the meeting on July 16. Defendant also testified that he did not remember any discussion of a sale at that meeting; but in testifying about a second meeting a few weeks later at Ridgeway’s office, he stated that Ridgeway “again asked me whether my building was for sale,” thereby indicating that there had at sometime been a prior conversation about a possible sale.

The parties agreed that at the July 16 meeting various possible leasing plans involving different portions of the building were proposed. At the end, it was decided that plaintiff would prepare and submit on behalf of the defendant various written proposals to Ridgeway. These were delivered to him by plaintiff and defendant on August 6, 1963.

There also is conflicting testimony regarding what transpired at the August 6, 1963, meeting of plaintiff, defendant and Ridgeway at the latter’s office. Plaintiff testified that Ridgeway indicated that he was leaning toward purchase but that he would not rule out the possibility of leasing and would take it up with the powers that should be consulted within the company. Plaintiff further testified that the question of a sale of the building was discussed at the meeting but that the defendant said he was not interested in selling and only wanted to lease the building.

Ridgeway testified that a discussion on leasing took place at the August 6 meeting but that he reiterated that Seven-Up was not interested in leasing. He described his response as an outright rejection of the lease proposition and said that there was no bargaining area left open at all. He also stated that either at that meeting or in a subsequent telephone call from defendant a few days later, he had said, “I don’t suppose you want to sell the building?” and defendant replied that he didn’t think so but would give it some thought. Ridgeway testified that defendant called him a week or so later and said he would consider selling. Ridgeway asked how much defendant wanted and was told $3,700,000. Ridgeway then told defendant that Seven-Up was not interested and that they were going ahead with their plans to build on their own property on Delmar.

Defendant testified that at the August 6 meeting he had quoted the price of $3,700,-000 but that he had previously stated that the building was not for sale and that the quoted price was only in response to an inquiry by Ridgeway in which he said, “Knowing the size of your building and so forth, what would a building like this sell for or what would be a price if you decided to sell?” Defendant replied that the price would be in the neighborhood of $3,700,000.

Plaintiff testified that after the meeting in Ridgeway’s office on August 6, defendant wanted him to continue calling on Seven-Up to try to arrange a lease. He did this, but shortly thereafter Ridgeway was getting tired of the contacts and told him on the telephone, “We are having a major meeting in June 1964 at which time I will call you back and let you know what decision we make.” Plaintiff wrote on his followup card, “to call back end of June 1964,” but, in fact, he did not call back and Ridge-way did not call him. He had no further conversation with Ridgeway or anyone else with the Seven-Up Company.

In October 1963, plaintiff terminated his employment with defendant (his last draw was October 10,1965). At that time, plaintiff had not secured any leases and there were no tenants in the building. There was one likely prospect, a brokerage firm, and plaintiff and defendant agreed that if that lease materialized, plaintiff’s commission thereon would be offset by the draw he already had received. Defendant also advised plaintiff that he could keep on looking for tenants, and if he was successful, defendant would pay him the full customary commission of six per cent on such leases. However, plaintiff went to work for someone else and did nothing with respect to leasing or selling the Lasky building after terminating his employment in October 1963.

Ridgeway testified in his deposition that he could recall no telephone call from plaintiff in which he stated that Seven-Up would need time to make up its mind about the 121 S. Meramec building. He went on to explain that during this period they had been besieged by people wanting Seven-Up to lease space, offering what the people calling thought were very favorable propositions, and that, in every instance, those propositions were turned down because they had their own property and by that time had had core drills made, had made plans to wreck one of the old buildings, had moved a warehouse and had started architectural work in connection with the building to be built on Delmar.

Ridgeway further testified that it wasn’t until the summer of 1964 that the possibility of another possible location again came up and that the question arose at that time as a result of other people in Clayton trying to figure out some way that they could get the Seven-Up Company to move to Clayton. He said there were all kinds of propositions made to them, including either building a building for them or leasing ground to them, and that, as a result, they looked at various properties in Clayton. Up to that time, however, they had not terminated their plans to build their own building at 1300 Delmar.

Ridgeway testified that in the course of these discussions in 1964 about possibly moving to Clayton he consulted Mr. Sidney Studt, a longtime personal friend, who was an experienced real estate broker in Clayton. He had several meetings with Studt who submitted two or three possible proposals for property other than the 121 S. Mera-mec building. Ridgeway then requested and received from Studt extensive specific information concerning the S. Meramec building, including the structure, foundation, and amount of loan outstanding thereon. These services were rendered by Studt to Ridgeway as a personal favor and without any payment or fee. Seven-Up then decided to see if it could buy the S. Mera-mec building and Ridgeway asked Studt to perform as an agent on that basis but with Seven-Up to pay no commission or fee, Studt’s compensation to be paid by the seller.

Three successive forms of contracts for sale were drawn in Studt’s office before a contract acceptable both to Lasky and to Seven-Up was agreed upon. These contracts named a Robert W. Simpson as purchaser. Lasky did not know that Simpson was acting as a straw party for Seven-Up until after a contract of sale had been executed. The contract called for a total purchase price of $3,525,000 with a commission of $100,000 to be paid by the seller to Studt. In addition, sellers were to convey an adjoining piece of property owned by them for $75,000. The contract was executed November 20, 1964, and the sale closed January 5, 1965. Shortly after November 20, plaintiff learned from a newspaper article that the S. Meramec building had been sold to Seven-Up. He then called defendant and inquired about a commission, but defendant took the position that plaintiff was not entitled to a commission and this suit followed.

The rule is well established in Missouri that, unless provided otherwise by the terms of a broker’s employment, he must prove, in a suit to recover a commission on a sale, that his acts with reference to that sale were the efficient or procuring cause of the sale. Taylor v. Vestal, 304 S.W.2d 820 (Mo.1957); Barnum v. Hutchens Metal Products, Inc., 255 S.W.2d 807 (Mo.1953); Rogers v. McCune, 283 S.W.2d 872 (Mo.App.1955); Real Estate Enterprises v. Collins, 256 S.W.2d 286 (Mo.App.1953). See also 12 C.J.S. Brokers § 91. In analyzing the evidence in this case to determine whether plaintiff’s evidence was sufficient to make a submissible case on whether his acts were the efficient or procuring cause of the sale to the Seven-Up Company, there are certain rules which govern our consideration of the testimony introduced. We, of course, must follow the well established rule that we consider the evidence and the reasonable inferences therefrom in the light most favorable to plaintiff, disregarding defendant’s evidence unless it aids plaintiff’s case. Woodford v. Illinois Central Gulf Railroad, 518 S.W.2d 712, 715 (Mo.App.1974). More importantly in this case, we must apply the rule that plaintiff is bound by his own testimony, unless corrected or explained, and that a party who has the burden of proof on an essential issue is bound by the uncontradicted testimony of his own witnesses, unless there are facts from which the jury may draw a contrary inference. Taylor v. Vestal, 304 S.W.2d 820, 823 (Mo.1957); Barnum v. Hutchens Metal Products, Inc., 255 S.W.2d 807, 808 (Mo.1953). An explanation of the application of the rule was given in Draper v. Louisville & Nashville Railroad, 348 Mo. 886, 156 S.W.2d 626, 633-34 (1941), as follows:

‘If A. put B. ,on the stand, and prove by him a certain state of facts, this does not preclude A. from putting C., D. or E. on the stand, and proving a different state of facts; but if A. puts B. on the stand as his only witness to prove a fact, and does prove it, then he is precluded from impeaching B., or from otherwise inviting the jury to disregard B.’s testimony. He may not avoid his dilemma in that way.’ [Citations omitted] . . . [S]ince a plaintiff has the burden of proof, if he puts on only one witness to prove a fact and his positive statement on direct testimony is that the fact is definitely one way, then the plaintiff cannot have the jury disregard his only direct evidence on the point and find that the fact is exactly the opposite on the basis of inferences from circumstances also stated in the testimony of this same witness. This is not so much a matter of being bound by what his witness says as it is a failure of proof of an essential fact.”

Plaintiff elected to introduce the deposition of Mr. Ridgeway, thereby making him plaintiff’s witness. Ridgeway unequivocally testified that he had no thought or intention of buying the S. Meramec building during 1963 while plaintiff was employed by defendant and that he had clearly so státed. The matter had not been postponed. He also stated that he had proceeded in 1963 and the first part of 1964 with steps looking toward construction by the Seven-Up Company of a building on its own lot on Delmar. He testified that after August or early September 1963 he had no contact with or communication from plaintiff or defendant about the building which defendant owned and that he became interested in Clayton in 1964 only because various persons there began to apply pressure on Seven-Up and its officers to locate in Clayton. At that time there was discussion of others building a building for Seven-Up or leasing ground to the company or other possible arrangements. As a result of this new effort and persuasion, Ridgeway contacted his longtime friend, Sidney Studt, as previously related, and began to explore various proposals and eventually began to consider the possibility of acquiring the S. Meramec building of defendant Lasky.

As indicated at the outset of this opinion, much of the controversy on appeal centered upon whether the defendant had impliedly contracted to pay the plaintiff if he was successful in procuring a sale rather than a lease of the building. However, even assuming an implied contract to pay for procuring a sale, the unequivocal and unrefut-ed testimony of plaintiff’s witness was that there was a total cessation in 1963 of all efforts to sell the building to Seven-Up and an abandonment by Seven-Up of the idea, if any be found to have existed, of buying the Lasky building. It refuted the idea of a mere suspension of negotiations in 1963. Plaintiff’s evidence, by way of Ridgeway’s testimony, was that the purchase made in the fall of 1964 was the result of the effort and pressure by others in Clayton in 1964 to persuade Seven-Up to locate there.

Under the rule stated in Draper, supra, plaintiff was bound by this uncontra-dicted testimony of his own witness, and he was not entitled to have the jury disregard his only direct evidence on this question and find the facts contrary to such evidence. Under Draper, the testimony of Ridgeway would be conclusive on plaintiff as to a lack of procuring cause. It follows that plaintiff’s evidence failed to make a submissible case on the issue of whether his acts referable to ultimate sale of the building were the efficient or procuring cause of the sale and that a verdict for defendant should have been directed. Such conclusion is consistent with various decisions of the appellate courts of this state.

In Barnum v. Hutchens Metal Products, Inc., 255 S.W.2d 807 (Mo.1953), defendants owned a large manufacturing plant at Lamar. In the fall of 1949, defendants mailed copies of a circular describing their plant and equipment to various brokers, including the plaintiff. Plaintiff testified that in early March 1950, he had been in contact with one Doyle, a corporate officer of a firm in Kansas City, concerning the company’s need for additional space. He showed various buildings and lots but they were unsatisfactory. Doyle remarked that if they had to move out of town, they might be better off moving to some small town adjacent to Kansas City. Plaintiff remembered the circular from defendants, and asked Doyle for permission to make further inquiry about the availability of the building at Lamar. On inquiry, he learned it was available for sale or lease, and plaintiff, on March 8, 1950, advised defendants that Doyle’s company was plaintiff’s prospective purchaser. On March 10, 1950, plaintiff wrote defendants advising that Doyle was out of town for a week but upon his return, plaintiff would advise defendants of Doyle’s interest. On Doyle’s return, plaintiff conveyed the information received from defendants, and Doyle said he would discuss it with his fellow officers and plaintiff was to call back. On April 1, 1950, Doyle advised plaintiff that his fellow officers felt there would be difficulty in getting families of key personnel to move to Lamar and that the matter should be dropped for the time being; but if a change was made, Doyle would contact plaintiff. Meanwhile, plaintiff had no further contact with defendants other than his inquiry for additional information in early March. On June 18, 1950, plaintiff learned that the plant at Lamar had been sold to Doyle. He demanded a commission of defendants, but they refused j;o pay and plaintiff sued.

As a part of his case, plaintiff introduced the deposition of E. A. Mabes, another broker. In that deposition, Mabes testified that he had received the circular about the Lamar property and had mentioned it on several occasions to Doyle but aroused no interest until late April or early May because Doyle had not wanted to leave Kansas City because of the wishes of his personnel. When Doyle finally did decide he had to move because he couldn’t find anything in Kansas City, Mabes convinced him that he should look at the Lamar plant. He flew down and looked at the plant and then had other plant personnel and his wife meet him there. A deal was made and the property purchased, defendants paying Mabes a commission. On this testimony, defendants received a directed verdict and plaintiff appealed.

The court recognized the general rules for payment of brokers’ commissions, noting that if the broker is the procuring cause, he is entitled to a commission even if the owner ultimately closes the deal or if another broker is employed to consummate the transaction. The court also stated that the question of whether the broker was a procuring cause ordinarily is a question for the jury. However, the court noted, where submissibility is in issue, the party with the burden of proof on an essential issue is bound by the uncontradicted, though adverse, testimony of his own witness unless there are facts from which the jury may draw a contrary inference. Id. at 808. The court determined on the issue of procuring cause that the plaintiff vouched for the creditability of Mabes’ testimony and, because it was not contradicted by any other witness, it could be considered as true. Consequently, the court found that by reason of Mabes’ testimony, the plaintiff’s evidence established that there was no factual basis from which to infer that Doyle really became interested in purchasing the property prior to the time Mabes insisted Doyle visit Lamar. The plaintiff’s evidence established that Mabes was the procuring cause and the directed verdict was proper.

In Real Estate Enterprises v. Collins, 256 S.W.2d 286 (Mo.App.1953), plaintiff had the exclusive agency to sell a property during a term ending August 9, 1949. During the preceding months, plaintiff attempted to induce the Carraras to buy the property for $35,000, but was unsuccessful. Plaintiff did submit to defendants an offer on behalf of the Carraras for $25,000 but that was promptly refused by defendants. Plaintiff attempted to persuade the Carraras to increase their offer but was informed they were no longer interested. Plaintiff then ceased to advertise defendants’ property. Later, after the exclusive agency was terminated, defendant owners called on the Carraras and renewed their interest in the property, which they subsequently sold to the Carraras in late October.

It was clear from the evidence that the Carraras had been induced by plaintiff to become interested in the property during the term of plaintiff’s contract and, hence, that services had been rendered. If the interest induced by plaintiff had been the procuring cause of the sale, plaintiff would have been entitled to a commission even though the sale was not consummated until after the termination of the agency. The issue was whether plaintiff’s efforts were the procuring cause of the sale.

Plaintiff’s case was submitted to the jury which rendered a verdict for defendant. In reviewing the case on appeal, the court of appeals held that the trial court should have directed a verdict for defendant. This was not dictum because the court found that an instruction challenged by plaintiff was erroneous and on that basis would have granted a new trial but for its conclusion that the evidence warranted a directed verdict. In deciding the case, the court declared, 256 S.W.2d at 289, that for one’s services to be the procuring cause of a sale,

“it is essential that his initial efforts in calling attention to the property shall have set in motion a series of events which, without a break in their continuity, and without interruption in the negotiations, eventually culminated in the sale. But where there is a definite break in the continuity of the negotiations amounting to an abandonment of the deal, and new forces thereafter enter which bring about a renewal of the negotiations and themselves become the effective cause of the sale, the initial efforts may not then be regarded as the proximate procuring cause so as to be the foundation on which to predicate a right to a commission. Young v. Stecher Cooperage Works, 259 Mo. 215, 168 S.W. 611; Westerman v. Peer Inv. Co., 197 Mo.App. 278, 195 S.W. 78; Good v. Robinson, 194 Mo.App. 453, 184 S.W. 955; Smith v. Allgier, 234 Mo.App. 392, 135 S.W.2d 43.”

In Rogers v. McCune, 283 S.W.2d 872 (Mo.App.1955), plaintiff brought an action in quantum meruit for recovery of a 'broker’s commission on the sale of land under a non-exclusive contract in which plaintiff was to receive any commission he could obtain over and above $80 net per acre to defendant. Plaintiff advertised the property and, as a result, one Landers made inquiry. Plaintiff was too busy to show him the farm that day but directed Landers to the farm and asked Landers to inform defendant that he had been sent by plaintiff. Landers inspected the farm but encountered only defendant’s wife, and he did not tell her he had been sent by plaintiff. Plaintiff called at Landers’ home a few days later and asked how he liked the farm. Landers replied that he did not like it and would not consider it at any price. Plaintiff had quoted him a price of $100 per acre but offered to submit a lower offer to defendant in Landers’ behalf. Landers again said he was not interested and would not have the farm at any price. Plaintiff left and thereafter did nothing to induce Lan-ders to change his mind.

Subsequently, Landers went to the county where defendant’s land was located, accompanied by his father-in-law, Albert Moss, and his brother-in-law, Wilson Moss. They contacted a real estate agent who showed them another farm, but they were not interested therein. The agent indicated he had other properties and when the three returned a week later, he took them to see defendant’s farm. Defendant was not present, and Landers said nothing at the time about having previously seen the farm. The Mosses subsequently purchased the farm for slightly less than $80 per acre. Defendant met Landers only after the contract was signed.

The jury rendered a verdict for defendant and plaintiff appealed. On appeal, the court held that a judgment should have been directed for defendant on the issue of procuring cause. It based its decision on the ground that plaintiff had no contact with the Mosses, that there was no evidence that Landers was acting as agent for Mosses and that it would be pure speculation to find that plaintiff’s efforts induced Landers to persuade the Mosses to buy. The court said, “Plaintiff failed to show an unbroken chain of causation necessary to satisfy the requirement of procuring cause, to wit, that plaintiff’s acts in their natural sequence, unbroken by any new and independent cause, resulted in the sale.” Id. at 878.

We have examined the cases cited by plaintiff on this issue but find them to be distinguishable. They do not justify a decision herein that plaintiff made a submissi-ble case on the issue of procuring cause of the sale.

Judgment reversed.

All concur.

      . The distinction between a contract implied in fact and one implied in law is stated in Bennett v. Adams, 362 S.W.2d 277, 280-81 (Mo.App. 1962).

      . This cáse was before this court previously for a ruling on the propriety of the action of the trial court in directing a verdict for defendant at the close of plaintiff’s opening statement. Zabol v. Lasky, 498 S.W.2d 550 (Mo.1973). In the course of that opinion, it was stated, although not necessary to the opinion, that “[w]hether there resulted a factual situation whereby under the law of quantum meruit appellant was entitled to compensation would ordinarily be a jury question.” That statement should not be considered as indicating that a trial court may not consider whether there was sufficient evidence introduced to make a sub-missible case in an action in quantum meruit. The prior Zabol opinion involved only the issue of whether the court properly directed a verdict at the end of plaintiffs opening statement. The court held that the petition was sufficient to state a claim upon which relief could be granted and that since plaintiff in his opening statement had not made admissions which affirmatively demonstrated as a matter of law that he was not entitled to recover and had not stated or admitted that the facts he did relate were all he would prove, the court had erred in directing a verdict on the basis of the opening statement. As the facts related herein indicate, the evidence now before us differs significantly from the allegations of the petition as summarized at 498 S.W.2d at 554.

      . Mr. Ridgeway died shortly before this case was tried in 1974, and plaintiff introduced as part of his case the deposition of Ridgeway which had been taken in 1965.