author: SHANGLER, Presiding Judge.

text:
    Carolyn BROWN, Petitioner-Respondent, v. LABOR & INDUSTRIAL RELATIONS COMMISSION of Missouri and Division of Employment Security, Respondents-Appellants. and Rosetta OSBORNE, Petitioner-Appellant, v. LABOR AND INDUSTRIAL RELATIONS COMMISSION, Division of Employment Security, State of Missouri and Barnes Hospital, Respondents-Respondents.
    Nos. KCD 29432, KCD 29727.
    Missouri Court of Appeals, Kansas City District.
    Dec. 27, 1978.
    Motion for Rehearings and/or Transfer Denied Jan. 31, 1979.
    Application to Transfer Denied March 13, 1979.

      Sharon A. Willis, Kansas City, for Division of Employment Security in No. KCD 29432.
    Rick V. Morris, Jefferson City, for Division of Employment Security in both cases.
    Stanley J. Eichner, The Legal Aid Society of the City and County of St. Louis, St. Louis, for Osborne.
    Thomas J. McGrath, Jeffrey B. Rosen, Miller, Simmons, Moore <& Jung, P. C., Kansas City, for Brown.
    John F. Gillespie, Jefferson City, for Division of Employment Security in No. KCD 29727.
    Charles B. Fain, Jefferson City, for Labor and Ind. Relations Commission.
    Harvey Tessler, Goldstein, Tessler, Brown & Geigermann, P. C., Clayton, for Barnes Hospital.
    Before SHANGLER, P. J., SWOFFORD, C. J., and WASSERSTROM, J.
   SHANGLER, Presiding Judge.

These appeals present the same question of statutory meaning which, in each case, determines whether the decision of the Labor and Industrial Relations Commission to deny unemployment compensation benefits was contrary to the Employment Security Law [Chapter 288, RSMo 1969]. The appeals were argued contemporaneously, although separately, and are consolidated for opinion.

The facts are that each claimant, Brown and Osborne, held a part-time employment concurrently with a full-time employment, that each voluntarily left the part-time employment and was thereafter terminated from the full-time employment. Thereupon, each made claim for unemployment compensation benefits for the involuntary termination against the account of the full-time employer only, and each claim was denied by the Division of Employment Security on the same ground: that “the claimant had left her [part-time] work voluntarily without good cause attributable to her work or to her employer.” The part-time employer only, in each case, made protest to the claim but only part-time employer Barnes [claimant Brown] is a party on appeal.

The decision of the Division in each case was denied review by the Commission [which thereby was deemed to adopt the findings of the Appeals Referee of the Division for purposes of judicial review. § 288.-200.1, RSMo 1969]. Each claimant took an appeal to a circuit court with disparate results. The court with review of the Brown claim determined the Commission decision to deny benefits misconceived § 288.050 and was contrary to law. The court with review of the Osborne claim affirmed the Commission decision to deny benefits as in accordance with law and as based upon competent and substantial evidence.

The decision of the Commission to deny benefits rests on essential § 288.050:

1. [A] claimant shall be disqualified for . benefits until after he has earned wages equal to ten times his weekly benefit amount if the deputy finds
(1) That he has left his work voluntarily without good cause attributable to his work or to his employer except that he shall not be disqualified
(a) If the deputy finds he quit such work for the purpose of accepting a more remunerative job which he did accept and earn some wages therein; or
(b) If he quit temporary work to return to his regular employer.

It is the contention of the Commission that § 288.050 clearly expresses that a claimant who has left work voluntarily without good cause becomes disqualified for unemployment compensation benefits. It is the premise of the Commission, therefore, that work within § 288.050 and the matrix of the full Employment Security Law means any endeavor for pay, part-time or full-time, so that a voluntary separation for any concurrent employment without good cause disqualifies for benefits and does not restore eligibility until the claimant has earned wages equal to ten times the weekly benefit. The claimants contend, rather, that work within the statute means all employments, and since both continued to be employed after quittance from the part-time jobs, they remained eligible for benefits upon involuntary termination of the full-time employments in which they continued. In a word, the claimants understand the statute to mean that one who voluntarily leaves a part-time job, yet remains fully employed otherwise, has not left his work.

We frame the issue for our decision: Does one who works concurrently at part-time and full-time employments and leaves the part-time employment without good cause thereby become disqualified for employment benefits upon involuntary termination of the full-time employment?

The Employment Security Law does not directly address this question. There are intimations within the provisions of this intricate enactment and the judicial comments upon it that concurrent employments are not a contemplated subject matter of the law. The Employment Security Law declares the public policy that [§ 288.020]

Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this state resulting in a public calamity. The legislature, therefore, declares that in its considered judgment the public good and the general welfare of the citizens of this state require the enactment of this measure, under the police powers of the state, for compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own.
This law shall be liberally construed to accomplish its purpose to promote employment security both by increasing opportunities for jobs through the maintenance of a system of public employment offices and by providing for the payment of compensation to individuals in respect to their unemployment.

The manifold purposes declared by the Employment Security Act are, among others, to relieve against economic distress from involuntary unemployment and to facilitate reemployment. The enactment does not aid idlers or those who are not honestly open to the opportunity of the labor market. Golden v. Industrial Commission of Missouri, 524 S.W.2d 34, 36[1 — 6] (Mo.App. 1975). A person who leaves a part-time employment, but continues in a concurrent regular full-time employment, however, neither faces economic distress nor needs reemployment. These purposes of the law, given effect by the corollary of § 288.040.-1(1) & (2) that a claimant for unemployment benefits shall be available for work and earnestly seek work, have no relevance to a person who diligently maintains concurrent employments and then, for personal reason, gives up the fragmentary employment but remains fully employed.

The term unemployment as used in the Employment Security Law means lack of employment [A. J. Meyer & Co. v. Unemployment Compensation Commission, 348 Mo. 147, 152 S.W.2d 184[5] (1941)], a condition which results from the failure of industry to provide employment [Haynes v. Unemployment Compensation, 353 Mo. 540, 183 S.W.2d 77, 81[7-10] (1944)]. The public policy which girds the Employment Security Law that benefits shall be for persons unemployed through no fault of their own [§ 288.020.2], therefore, is not infringed by a quittance, voluntary or involuntary, from a part-time employment to retain a full-time employment done without design to give up wage rewards for compensated unemployment. Belle St. Bank v. Ind. Com’n Div. of Emp. Sec., 547 S.W.2d 841, 846[4] (Mo.App.1977).

The fallacy of the Commission decisions is that they accord the good cause condition of § 288.050 a relevancy to the claims of Brown and Osborne which the purposes of the Employment Security Law do not intend. This enactment promotes the general welfare by a scheme of benefits which operates to restore and maintain a minimum level of earnings. § 288.060; Swafford v. Industrial Commission, 462 S.W.2d 147, 151[2-5] (Mo.App.1970). The benefits issue when an insured worker is totally unemployed or only partially unemployed. Sections 288.030.23(a) & (b). In either case, the question is simply whether the earnings fall below a statutory minimum for want of employment. A worker in regular full employment [by self-evident definition] is neither partially or totally unemployed and so does not qualify for benefits under the enactment while the full employment persists. Section 288.040. Thus, the good cause of § 288.050 absolutely disqualifies for benefits when the voluntary separation from work results in unemployment but not, as of course, when the relinquishment of work does not result in unemployment. The decisions of the Commission to deny benefits for the involuntary unemployment of the claimants, therefore, contradict the dominant public policy of the enactment that the fund set apart by law for the purpose be used for the persons unemployed through no fault of their own. Section 288.020.1. This preponderant rationale, by the direction of the enactment, is to be given a liberal construction. Section 288.020.2. The disqualification provision that a claimant who leaves work voluntarily without good cause [§ 288.050], cognately, requires a strict construction. Citizens Bank of Shelbyville v. Industrial Commission, 428 S.W.2d 895, 897[4-6] (Mo.App.1968).

The claimants assert only against the full-time employers who do not contest payment of benefits. The part-time employers, Stix, Baer & Puller and Barnes Hospital, nevertheless protest. The claimants contend that the part-time employers have no interest or status to litigate and so the benefits should issue as a matter of law from the full-time employers. The procedure of the Commission, however, allows a claimant no initiative as between employers. By the agency practice, payments to a claimant deemed eligible are surcharged against the account of every base period employer, and a claimant deemed ineligible against any base period employer becomes ineligible for benefits as to all such employers.

The benefits for unemployment compensation issue as provided by the Employment Security Law. That enactment grants plenary authority to the Commission to make regulations for the fair administration of the law. Section 288.220.5. The practices adopted by the agency, however, fail to accommodate the disqualification provision of § 288.050 for voluntary termination of employment with the public policy of § 288.020.1 for payment of benefits to persons unemployed through no fault of their own in cases where the two employments were concurrent. These provisions, taken literally, result in conundrum in the absence of a system of regulation which separates the accounts of concurrent employers and withholds charges for benefits from the employer against whom the claimant had committed an act of disqualification.

The integral Employment Security Act interrelates eligibility and disqualification with the amount of benefits a worker may receive and the liability of employer to subscribe the benefits. [Section 288.100; see, generally, Estes, Protecting Your Business Client’s Employment Security Account, 18 J. of Mo. Bar 223 (1962)]. The ultimate tax liability of an employer is determined by the number of employees who claim against that account. The employer, however, is protected against the claim of an employee who has committed an act of disqualification against him. To implement this scheme the Commission is directed to “maintain a separate account for each employer” [§ 288.100.1(1)] and “by regulation [to] prescribe the manner in which benefits shall be charged against the accounts of several employers for whom an individual performed service in employment during the same calendar quarter or performed service in employment at the same time and the manner in which partial unemployment benefits shall be charged against the accounts of employers.” Section 288.100.-1(1) [Emphasis added.] Thus, the law not only contemplates that a worker involuntarily made unemployed shall have the benefit of compensation, but also that no employer — in this case, the part-time employers of claimants Brown and Osborne — directly affected by an act of disqualification of an employee shall suffer tax liability on that account.

The Commission justifies the practice to deny benefit absolutely to a worker who has committed an act of disqualification against any base period employer by reference to § 288.050.1 that a claimant who voluntarily leaves employment without good cause “shall be disqualified . for benefits” and does not have them restored “until after [the worker] has earned wages equal to ten times his weekly benefit.” The contention goes: by the literal statute the disqualification is for benefits without exception until the eligibility has been restored by the elapse of the requisite period of earned wages. This posture, however, neglects § 288.100, in pari materia, which defines the credits and charges to an employer account:

No benefits based on wages paid prior to the date of any act for which a claimant is disqualified under section 288.050 shall be chargeable to any employer directly involved in such disqualifying act. [§ 288.100.1(4)(a); emphasis added].

These statutes considered within a reasonable interrelationship intend that where the circumstances require — as when a worker voluntarily relinquishes a concurrent employment but remains fully employed — the predominant purpose of the enactment to furnish benefits for involuntary unemployment shall not be altogether denied but shall derive from those base period employers against whom the worker has not committed an act of disqualification. This in-tendment is made peremptory by the direction of § 288.100.1(1), also in pari mate-ria, that the Division “shall by regulation prescribe the manner in which benefits shall be charged against the accounts of several employers for whom an individual performed service in employment during the same calendar quarter or performed service in employment at the same time . . .” [Emphasis added.] The failure of the Commission to adopt a regulation for the exigency of concurrent employments, one voluntarily relinquished and the other involuntarily terminated, results in a practice which unfairly exercises the regulatory power and disserves the remedy the law intends.

The alternative remains: a procedure adopted under the authority of the Commission to regulate the administration of the law whereby, in cases of concurrent employments terminated first voluntarily and then involuntarily, no base period employer directly concerned with an act of disqualification by an employee shall suffer any liability to that employee.

We conclude that the decisions of the Commission to deny benefit altogether to claimants Brown and Osborne were contrary to law. The causes are remanded to the Commission for reconsideration of the claims in accordance with our direction that benefits be allocated to Brown and Osborne against the base period employers, except Stix, Baer & Fuller and Barnes Hospital, respectively.

The Brown appeal [KCD 29,432] raises another contention. In the circuit court the Commission moved dismissal of appeal on the ground that the court lacked jurisdiction over the subject matter or parties because the petition for judicial review by Brown failed to join Stix, Baer & Fuller as an interested and necessary party under § 288.100. The circuit court rules that since claimant Brown did not assert against part-time employer, Stix, Baer & Fuller, that employer had no status to protest the claim for unemployment compensation against the account of full-time employer, Western Electric, against which alone Brown claimed. The refusal to dismiss by the circuit court resulted in no prejudice to protester, Stix, Baer & Fuller, but not for the reason ascribed by that court.

The enactment provides that the Director or any other party aggrieved may have judicial review of a Commission decision by petition [§ 288.210]

served upon a member of the commission or upon such persons as the commission may designate . . . [SJuch service shall be deemed completed service on all parties, but there shall be left with the party served as many copies of the petition as there are defendants and the commission shall forthwith mail one such copy to each such defendant. [Emphasis added.]

That section provides also that the Division shall be a necessary party to any judicial action involving its decision. Another provision [§ 288.070.1] requires the Division to notify all base period employers of claims filed and constitutes any such employer who makes a written protest against allowance of benefit

an interested party to any determination allowing benefits during the benefit year until such time as the issue or issues raised by the protest are resolved by a determination or decision which has become final. [Emphasis added.]

Within this delineated procedure, the Division must notify any base period, whether proceeded against by the claimant or not, and an employer-protester remains an interested party until final disposition. In a case where the issue of compensation benefit goes to judicial review, § 288.210 imposes on the Commission the duty to notify the employer-protester-defendant by mail.

It is clear, then, that Stix, Baer & Fuller, an original protester against the compensation claim of employee Brown, remained an interested party in that subject matter until settled by final decision and was entitled to notice of the petition for judicial review of denial of that claim. The service by claimant Brown of the petition upon the Commission, however, was completed service on all parties by the effect of statute. [§ 288.210]. It was the duty of the Commission thereafter to forthwith mail one such copy to each such defendant —Stix, Baer & Fuller included. [§ 288.210]. Thus, the Commission has no ground to complain that an employer in interest has not been heard on review from a lapse for which the claimant has no responsibility. Although employer-protester, Stix, Baer & Fuller has been denied a right of procedure, the joinder of the Division as a necessary party on judicial review and the coincident interest of the Division with the employer-protester to sustain the decision to deny the claim for compensation protected the substantive right of Stix, Baer & Fuller against infringement. Our decision which excludes the part-time employers from liability in these special circumstances, therefore, works no detriment of property despite procedural irregularity.

In the Brown appeal [KCD 29,432] the Commission contends the final point of error that the circuit court improperly taxed the costs of the action against the Commission. The Labor and Industrial Relations Commission and the Division of Employment Security are representatives of the State of Missouri and not subject to assessment of costs in the proceeding. Dubinsky Brothers, Inc. v. Industrial Com’n of Mo., 373 S.W.2d 9, 16[7] (Mo. banc 1963).

The judgment in KCD 29,432 [the Brown claim] is modified to delete taxation of costs against the Commission and as modified is affirmed. The cause is remanded to the circuit court for further remand to the Industrial Commission for entry of award for unemployment compensation benefits in favor of claimant Brown and against full-time employer Western Electric.

The judgment in KCD 29,727 [the Osborne claim] is reversed. The cause is remanded to the circuit court for further remand to the Industrial Commission for entry of award of unemployment compensation benefits in favor of claimant Osborne and against full-time employer McDonnell Douglas Corporation.

All concur.

      . The claimant Brown held part-time employment with Stix, Baer & Fuller and full-time employment with Western Electric. The claimant Osborne held part-time employment with Barnes Hospital and full-time employment with the McDonnell Douglas Corporation.

      . The claimant Brown left her employment with Stix, Baer & Fuller because the part-time work, when added to her regular employment, injured her health. The claimant Osborne left her part-time employment with Barnes Hospital because the schedule of hours came into conflict with those required by her full-time employer which were changed and could not be accommodated by the part-time employer. Neither claimant Brown nor Osborne contends to have proved “good cause” for voluntary termination of the part-time employment.

      . The single decision which treats the question presented is McCarthy v. Iowa Employment Security Commission, 247 Iowa 760, 76 N.W.2d 201 (1956). That court, also, confronted the claim for benefits of a worker who had voluntarily left a part-time employment but who continued in a full employment, but was thereafter involuntarily terminated from that job. The Iowa Employment Security Law contained provisions of declaration of purpose and disqualification virtually identical with §§ 288.020.1 and 288.050, RSMo 1969. That court rested decision [1. c. 204] to award benefits to the claimant for the involuntary loss of full employment on the paramount public policy that a fund be set aside “for the benefit of persons unemployed through no fault of their own.”

      . “ ‘Base period’ means the first four of the last five completed calendar quarters immediately preceding the first day of an individual’s benefit year.” Section 288.030.2.

      . The direction of the statute is clear: “No benefits based on wages paid prior to the date of any act for which a claimant is disqualified under section 288.050 shall be chargeable to any employer directly involved in such disqualifying act.” Section 288.100.1(4)(a).

      . The literal § 288.070.1 which deems an employer-protester an interested party to any determination allowing benefits, on elementary principles of due process, must be understood to mean an issue which involves determination of the benefits against which the employer protests. It is evident that in the course of the determination process first by a Division deputy, then by the Appeals Tribunal, then by the Commission, and finally on judicial review, any determination or decision, either to award or deny benefits, can be reversed. The employer remains interested until final determination of that property interest.

      . The motions of defendant-claimant Brown for Damages For Frivolous Appeal under Rule 84.-19 and for Dismissal of Appeal or In The Alternative to Confirm Judgment of the circuit court for violation of Rule 84.04 are denied.


source: Caselaw Access Project

author: ROBERT R. WELBORN, Special Judge.

license: Public Domain

text:
    Alfa ELVIN, Plaintiff-Appellant, v. CITY OF KANSAS CITY, Missouri, Defendant-Respondent.
    No. KCD 29312.
    Missouri Court of Appeals, Kansas City District.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer Denied Jan. 31, 1979.
    Albert A. Riederer, Kansas City, for plaintiff-appellant.
    Aaron A. Wilson, City Atty., Barbara A. Schenkenberg, Asst. City Atty., Kansas City, for defendant-respondent.
    Before HIGGINS, Special Judge, Presiding, PRITCHARD, J., and WELBORN, Special Judge.
   ROBERT R. WELBORN, Special Judge.

Action by widow of fire fighter to recover for accrued sick leave benefits provided by ordinance of city-employer, Kansas City. Trial court found for city. Widow appeals.

On January 6, 1971, Oscar Elvin, a fire fighter employed by the City of Kansas City, was fatally injured while fighting a fire. Oscar Elvin was a permanent employee of the city and had been employed for more than six months at the time of his death.

Alfa Elvin, widow of Oscar, applied to the city for payment of accrued wages, sick leave and vacation time of her husband. Oscar had accrued 1451 hours of sick leave. The city paid Alfa $1797.62, which included $1117.34 for sick leave. The city computed the sick leave payment on the basis of one fourth of the accumulated sick leave.

Alfa, contending that she should have received sick leave payment for 50% of her husband’s accumulated leave, brought this action against the city to recover an additional $1117.34. The case was submitted to the circuit court on stipulated facts. That court found in favor of the city.

The question here presented is whether the court below correctly construed and applied Section A8.18(d) of the Administrative Code of the City of Kansas City. The provision in question provided:.

“(d) Conversion.
“Upon separation from the service, employees who have at least six (6) months of continuous service may convert accrued sick leave credit at the ratio of four (4) hours of sick leave credit to one hour of vacation leave credit. Employees who qualify for and retire with a normal retirement or with line-of-duty disability pension, shall convert accrued sick leave credit at the ratio of two (2) hours of sick leave credit to one hour of vacation leave credit.”

Appellant contends that she was entitled to receive benefits under the second sentence, under which she would be entitled to the benefit of the 50% conversion rather that the 25% rate under the first sentence.

Appellant acknowledges the obvious fact that the ordinance did not by its terms specifically spell out which conversion rate should be applied in the case of death of a fire fighter in the line of duty. Appellant argues that, if her husband had been less seriously injured, had lived and been retired with a disability pension, his accrued leave benefit would have converted on the 50% basis. She argues that it is only fair and logical to convert at the same ratio in the event of death in the line of duty. She invokes the principle stated in State ex rel. Jackson County v. Spradling, 522 S.W.2d 788, 791[1-4] (Mo. banc 1975):

“ ‘In determining the meaning of an ordinance * * * the courts generally seek to ascertain the intention of the lawmakers by giving the words used their ordinary meaning, by considering the entire act and its purposes, and by seeking to avoid unjust, absurd, unreasonable, confiscatory or oppressive results.’ ”

In that case, the court held that language susceptible of alternative constructions, one of which would have abrogated as to first class charter counties, the long-established policy of equal sharing by the state with all counties of the cost of assessing property for taxation, should not be so construed, particularly when there was no indication that the legislature intended to discriminate against such counties.

The problem with application of the holding of that case in the present situation is that there is no evidence of a long-established municipal policy in Kansas City which would shed light on the issue under consideration. Appellant does point out that by a subsequent amendment, enacted after this case arose, the conversion of unused sick leave at a two to one ratio for employees “who die while active employees” was expressly provided by the amended ordinance. Although subsequent legislative action may be looked to in attempting to ascertain “the established policy of the legislature as disclosed by a general course of legislation” (State ex rel. Jackson County v. Spradling, supra), the language of the enactment under consideration is the basic guide to a court in its construction of the enactment. “In construing a statute, the primary rule to be applied is to ascertain and give effect to the legislative intent from what the Legislature said and not from what things the Legislature intended to say or inadvertently failed to say.” Richards v. Stuckenberg, 478 S.W.2d 405, 408[2, 3] (Mo.App.1972). The subsequent more detailed categorization of benefits under the ordinance here in question is of significance insofar as the previous ordinance is concerned only insofar as the language of the latter can properly be found to admit of a construction consistent with the subsequent enactment.

Here, the ordinance under construction placed the recipients of accrued sick leave conversion benefits in two categories: 1. Employees separated from the service having at least six months of continuous service. 2. Employees qualifying for and retiring with normal retirement or line-of-duty disability pension. Appellant’s husband received neither normal retirement nor line-of-duty pension. To place him in that category would require the court, under the guise of construction, to add to that category persons dying in the line of duty. Inasmuch as the ordinance did provide a category covering such a person as appellant’s husband, this court cannot substitute its idea of logic or justice to alter the classification found in the ordinance. The appellant’s husband was separated from the service and did have six months’ continuous service. The appellant has received the benefits accorded persons in that category. The trial court properly concluded that appellant had received the benefits to which she was entitled.

Judgment affirmed.

All concur.


author: ANDREW JACKSON HIGGINS, Special Judge.

text:
    NATIONAL STARCH AND CHEMICAL CORPORATION, Plaintiff-Appellant, v. Theodore A. NEWMAN, Defendant-Respondent.
    No. KCD 29633.
    Missouri Court of Appeals, Kansas City District.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer Denied Jan. 31, 1979.
    Application to Transfer Denied March 13, 1979.

      Byron J. Beck, W. Anthony Feiock, Mark E. Johnson, Morrison, Hecker, Curtis, Ku-der & Parrish, Kansas City, for plaintiff-appellant.
    Howard F. Sachs, Spencer, Fane, Britt & Browne, Kansas City, for defendant-respondent.
    Before HIGGINS, Special Judge, Presiding, PRITCHARD, J., and WELBORN, Special Judge.
   ANDREW JACKSON HIGGINS, Special Judge.

Action for injunction and damages for breach of employment contract restriction against postemployment competition. Counterclaim for bonuses and termination and vacation pay. Appeal from summary judgment for defendant on plaintiff’s petition, final for purpose of appeal under Rules 81.05 and 81.06. For determination is whether Missouri law, as opposed to Georgia or New York law, applies with respect to the restrictive covenant; and, if so, whether the covenant is valid and enforceable under Missouri law. Reversed.

National Starch and Chemical is a Delaware corporation with its home office and principal place of business in New Jersey. It is engaged in nationwide manufacture and sales of industrial adhesives and has, among others, an established market in states comprising its sales district administered from offices in Kansas City, Missouri.

Theodore A. Newman commenced employment with National as a sales representative in New York in December, 1958. As a condition precedent to employment, he executed an employment agreement similar to the one in dispute. Shortly thereafter he was transferred to a sales district centered in Baltimore, Maryland, including surrounding states. In February, 1961, he was transferred to a sales district centered in Atlanta, Georgia, including Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee. He executed a second similar employment agreement on or about September 18, 1961.

The Employment Agreement (Sales Staff) in dispute, dated April 1, 1965, was executed by Mr. Newman in Atlanta, Georgia, and by National in New York, New York. It provides:

“SECOND : The employment hereunder shall be for one month from the date of this Agreement and thereafter until terminated by written notice given by either party to the other not less than two weeks prior to the date of termination specified in such notice. * * *
“FOURTH: A. The Employee agrees that for a period of two years after the termination of his employment (whether such termination be by the Employee or by National, and whether with or without cause) he will not for himself, or as a partner, agent or employee of any person, firm or corporation, solicit or accept any business or order for a competitive product (as hereinafter defined) from any customer of National with whom he dealt or transacted business on behalf of National, or with whom a salesman of National dealt or transacted business under his supervision or with his assistance. A competitive product shall mean any product competitive with or useable for substantially the same purposes as a product manufactured, sold or offered for sale by National during his employment with National. * * *
“NINTH: Any employment agreement heretofore made by the parties hereto is hereby terminated. Any reference, however, to dealing or transacting business with customers of National, or to inventions or improvements made or conceived during the employee’s employment, shall include dealings and transactions and inventions and improvements made or conceived during any period of his employment, whether prior to or subsequent to the date of this agreement.”

Mr. Newman’s sales territory as of April 1, 1965, included Alabama, Georgia, South Carolina, and Tennessee.

In November, 1965, Mr. Newman was promoted to district ■ sales supervisor and transferred to the sales district centered in Kansas City, Missouri, including Colorado, Illinois, Iowa, Kansas, Missouri, Montana, Nebraska, South Dakota, Wisconsin, and Wyoming. Sales in Missouri constitute approximately one half the sales in the district. National had eight salesmen in the district under Mr. Newman’s supervision. In February, 1968, Mr. Newman was promoted to district sales manager for the Kansas City District, a position he held until his termination. Since the transfer to Kansas City, Mr. Newman has lived, and still lives, in Kansas City, Missouri.

During the course of his employment, Mr. Newman acquired knowledge of National’s activities and methods of operation, including sales methods and procedures. He was introduced to and became acquainted with many of National’s customers and their requirements and problems. While in Kansas City, he received salary, bonuses, and other benefits including training and experience.

In 1975, National audited its employment agreements and found a number of employees under agreements which did not best reflect their current assignments and responsibilities. Mr. Newman was among such employees; and, on June 10, 1975, an Employment Agreement (Managerial Personnel) dated July 1, 1975, was forwarded to him for execution. He was requested in August and September, 1975, to execute the agreement but did not do so. It would have protected against disclosure of National’s trade secrets as there defined. On April 19, 1976, Mr. Newman gave notice of termination of his employment with National. National responded by letter of April 23, 1976, to advise Mr. Newman of the postemployment covenant in the 1965 employment agreement.

On April 21, 1976, Theodore A. Newman and Merle L. Houck, as general partners, and Metro Metals, Inc., Western Adhesives, Inc., and Wilson M. Liggett, as limited partners, formed the Missouri River Company, a Missouri limited partnership doing business as Western Adhesives of Missouri, with express purpose to engage in the manufacture and distribution of adhesive materials at wholesale and related activities. Mr. Newman holds the position of general manager-president. The Missouri River Company has employed five persons in addition to Mr. Newman and Mr. Houck. Western Adhesives of Missouri has a sales territory composed of Missouri, Kansas, Ohio, Illinois, and Colorado. Its business is conducted primarily in the Kansas City area. As a partner, agent, and employee of Western Adhesives of Missouri, Mr. Newman, his partners, agents, and employees are selling products in competition with National, and intend to continue to solicit and accept business and orders for competitive products from National’s customers. National has about fifteen or twenty per cent of the market in the Kansas City area. In numbers, National has some 640 customers in the area and sought protection over some 275 of them.

The court sustained defendant’s motion for summary judgment, and entered summary judgment against plaintiff on grounds: (1) The agreement in dispute was invalid and unenforceable under the applicable laws of New York and Georgia, and, consequently, invalid and unenforceable in Missouri; (2) the agreement was inapplicable to the managerial position held by defendant; (3) in any event, the agreement was so suppressive of postemployment competition and harsh as to be invalid under Missouri law.

Appellant contends the court’s judgment was erroneously entered for the reason that Missouri law, instead of Georgia or New York law, applies with respect to the restrictive covenant in the 1965 agreement because Missouri has the most significant relationship to the transaction and parties, and the covenant is enforceable under Missouri law. Appellant contends also that the restrictive covenant was binding on Mr. Newman after his promotions because no notice of termination was given until April 19, 1976, and there was no superseding agreement in force.

Respondent supports the trial court in its theory that the restrictive covenant was invalid and unenforceable under Georgia law and did not become enforceable by employee’s change of job and residence to Missouri situs. He asserts the judgment must be affirmed because there is neither reason nor authority for selecting Missouri law to test validity of the 1965 agreement. He contends also that the sales contract did not apply to him after his promotions and was not a proper subject for enforcement against him following his termination. Finally, he asserts the agreement is too restrictive for Missouri enforcement.

The trial court entered its summary judgment on the theory that the law of the place where the contract was made normally determines the validity of the contract, and determined that it was “made” in either New York or Georgia and was invalid under the law of either, and could not be “reincarnated” in Missouri.

The Restatement (Second) of Conflicts of Law (1971) applies in Missouri to both tort and contract actions. Kennedy v. Dixon, 439 S.W.2d 173 (Mo. banc 1969); American Institute of Marketing Sys., Inc. v. Brooks, 469 S.W.2d 932 (Mo.App.1971); Havenfield Corporation v. H & R Block, Inc., 509 F.2d 1263 (8th Cir. 1975). The Restatement promulgates rules which apply to particular contract situations and general principles which apply when none of the particular contract rules are suitable.

The court recognized the Restatement, albeit erroneously, in its determination that Georgia law applied under Section 196, which deals particularly with contracts for rendition of services. It provides that validity of such a contract is determined by the local law of the state where the contract requires that the services, or major portion, be rendered, unless, with respect to the particular issue, some other state has a more significant relationship to the transaction and the parties, in which event the local law of the other state will be applied.

The error in the court’s application of this section is demonstrated by Comment A to Section 196: “The rule applies if the major portion of the services called for by the contract is to be rendered in a single state and it is possible to identify this state at the time the contract is made. It is necessary that the contract should state where the major portion of the services is to be rendered or that this place can be inferred either from the contract’s terms or from the nature of the services involved or from other circumstances. For this reason, the rule of this Section is unlikely to aid in the determination of the law governing contracts for employment * * * to serve as a traveling salesman in two or more states. The same is true when the work called for by the contract can be done in any one of two or more states.”

The contract in dispute is silent with respect to place or places of employee’s performance. The business of the employer was national in scope; and the employee, at all times, including time of execution in Georgia, performed in a territory composed of two or more states. It is not possible to identify a single state where a major portion of services was to be rendered. Mr. Newman was thus typical of the traveling salesman described in Comment A to Section 196, and Section 196 is not determinative of the law governing his contract.

The general Restatement rule for application when the particular contract rule does not apply is Section 188:

“(1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6.
“(2) In the absence of an effective choice of law by the parties (see § 187), the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
“(a) the place of contracting,
“(b) the place of negotiation of the contract,
“(c) the place of performance,
“(d) the location of the subject matter of the contract, and
“(e) the domicil, residence, nationality, place of incorporation and place of business of the parties.
“These contacts are to be evaluated according to their relative importance with respect to the particular issue.
“(3) If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied, except as otherwise provided in §§ 189-199 and 203.”
Section 6 provides:
“(1) [A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.]
“(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include
“(a) the needs of the interstate and international systems,
“(b) the relevant policies of the forum,
“(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
“(d) the protection of justified expectations,
“(e) the basic policies underlying the particular field of law,
“(f) certainty, predictability and uniformity of result, and
“(g) ease in the determination and application of the law to be applied.”

The circumstances of this case warrant application of Section 188. The place of the contract in dispute was Georgia as to the employee and New York as to the employer. No place of employee’s performance was delineated and, at all times, performance and the subject matter of performance was in the states of employee’s sales territory, in the Atlanta district for some seven months and in the Kansas City district for ten years and six months. The employee’s domicile was in the central city of his districts. His competing business was established in Kansas City, and most of his solicitations of National’s customers was in Missouri. His competing company conducts no business in Georgia. The interests for protection by National are those in the Kansas City district and Missouri. The relative interest of Georgia and New York is slight, if existent at all; the competition in question bears no relation to Georgia or New York. Missouri’s relationship to the parties and the transaction is superior in significance in that its policy can be advanced and the contract upheld consistent with Comment B to Section 188: “Protection of the justified expectations of the parties is a factor which varies somewhat in importance from issue to issue. As indicated above, this factor is of considerable importance with respect to issues involving the validity of a contract, such as capacity, formalities and substantial validity. Parties entering a contract will expect at the very least, subject perhaps to rare exceptions, that the provisions of the contract will be binding upon them. Their expectations should not be disappointed by application of the local law rule of a state which would strike down the contract or a provision thereof unless the value of protecting the expectations of the parties is substantially outweighed in the particular case by the interest of the state with the invalidating rule in having this rule applied.”

The policy of Missouri is to enforce reasonable restrictive covenants which tend to protect Missouri businesses from unfair competition by former employees and to protect individuals engaging in business in Missouri from unreasonable restraints. See Holland Furnace Co. v. Connelley, 48 F.Supp. 543 (E.D.Mo.1942), a pre-Restatement case, where the employment agreement was made in Michigan for performance in the St. Louis, Missouri, area, including part of Illinois, and the restrictive covenant was invalid in Michigan. The former employee argued, as did Mr. Newman here, that the contract, invalid when made yet valid under Missouri law, was not enforceable. The court applied Missouri law to uphold and enforce the contract because the governmental interest of Missouri in enforcement of such contracts which are performed in Missouri outweighs any conceivable interest of Michigan.

In Missouri a restrictive covenant “is valid and enforceable if it is reasonable as to the employer, the employee and the public, when viewed in the light of the facts and circumstances of the particular case under consideration * * *. To be reasonable, the restraint usually must be qualified as to both time and area and must be no greater than fairly required for protection of the person for whose benefit it is imposed.” Prentice v. Rowe, 324 S.W.2d 457, 461 (Mo.App.1959). An employer such as National has a proprietary right in its stock of customers and their good will and such asset is protected against appropriation by an employee by enforcement of a reasonable covenant not to solicit or compete. Deck and Decker Per. Consultants v. Pigg, 555 S.W.2d 705 (Mo.App.1977); Chemical Fireproofing Corp. v. Bronska, 542 S.W.2d 74 (Mo.App.1976); Reed, Roberts Associates, Inc. v. Bailenson, 537 S.W.2d 238 (Mo.App.1976); House of Tools and Engineering, Inc. v. Price, 504 S.W.2d 157 (Mo.App.1973); Mills v. Murray, 472 S.W.2d 6 (Mo.App.1971); USA Chem, Inc. v. Lewis, 557 S.W.2d 15 (Mo.App.1977).

The time qualification or limitation in the contract in dispute is two years. This is reasonable under cases which have found limitation of three years after termination of employment reasonably restricted as to time. See, for example, House of Tools and Engineering, Inc. v. Price, supra; Mills v. Murray, supra; Thompson v. Allain, 377 S.W.2d 465 (Mo.App.1964); R. E. Harrington, Incorporated v. Frick, 428 S.W.2d 945 (Mo.App.1968).

The area or space limitation in Mr. Newman’s contract requires that he, for himself, or as a partner, agent or employee, not solicit customers of National with whom he or a salesman under his supervision dealt. Such restriction is not the usual geographical or territorial limitation present in many cases. See, for example, American Pamcor, Inc. v. Klote, 438 S.W.2d 287 (Mo.App.1969); House of Tools and Engineering, Inc. v. Price, supra; USA Chem, Inc. v. Lewis, supra. It is, rather, virtually identical to the restrictive covenant found reasonable in Mills v. Murray, supra. Such covenant provided that the employee “will not, for a period of three (3) years * * * solicit, contract for or render the same or similar services to any [person] who or which has been * * * a client of [the employer] serviced either by Employee or by [a person] supervised by Employee.” 472 S.W.2d l.c. 9. The covenant in dispute is reasonable for the reason: “The restraint of the restrictive covenant, limited as it is only as to time, is less stringent than many others imposing limitations of space as well as time (some up to five years) in non-competition and non-solicitation covenants of employment contracts which have been upheld and enforced * * *. [t]he restrictive covenant [is] reasonable to the employer, the employee, not inimical to the public interest and therefore enforceable in equity by injunction.” 472 S.W.2d l.c. 12. See also Comment, 41 Mo.L.Rev. 37, 43 (1976): “One method of limiting a post-employment restraint so as to be reasonable without having to establish a territorial restraint is to draft a covenant restricting former employees from soliciting clients of their former employer. Such a restraint appears to be treated as reasonable per se, because the goodwill of an employer clearly extends to his current stock of customers, and the employee is not forbidden from opening a competing business, even ‘at plaintiffs doorstep.’ ” Determination of the National customers serviced by Mr. Newman while employed by National should be readily available from sales records in possession of either or both parties.

It is interesting to note also that under the law of Georgia, Section 20-504 Georgia Code Annotated, which provides that “a contract [in general restraint of trade] which is against the policy of the law cannot be enforced,” covenants against competition in employment contracts are “tolerated * * * if strictly limited in time and territorial effect and otherwise reasonable considering the business interest of the employer sought to be protected and the effect on the employee.” See Orkin Exterminating Co., Inc. v. Pelfrey, 237 Ga. 284, 227 S.E.2d 251, 252 (1976), which determined the covenant there in question unenforceable as being too indefinite. Such covenants are not “void ab initio,” as stated by the present court, except in the language of one judge concurring specially, 227 S.E.2d l.c. 252. Despite the appearance of stricter consideration in Georgia, time limitation of two years has been held reasonable, Turner v. Robinson, 214 Ga. 729, 107 S.E.2d 648 (1959); as has territorial limitation against solicitation of customers of the former employer, Landmark Financial Services, Inc. v. Tarpley, 236 Ga. 568, 224 S.E.2d 736 (1976).

The trial court’s finding that the 1965 agreement “terminated, if not before, when Newman became District Sales Manager in Kansas City,” rests on the existence of the Employment Agreement (Managerial Personnel) form which National sought to have Mr. Newman execute in 1975.

This is not a sound reason for summary judgment against plaintiff in its attempted enforcement of the 1965 agreement. Both parties and the court are in agreement that the provisions of the 1965 agreement are clear and unambiguous, in which case there is no room for the implication of termination of the agreement made by the court, or for it to be “fairly construed” to the same end as urged by respondent. The contract in dispute was in effect “until terminated by written notice given by either party.” There was no such notice. When the terms of a contract are clear and unambiguous the contract will be enforced or given effect in accordance with its terms, and without resort to extrinsic evidence or construction. Willman v. Beheler, 499 S.W.2d 770 (Mo. 1973); Commerce Trust Co. v. Katz Drug Co., 552 S.W.2d 323 (Mo.App.1977).

Judgment reversed; cause remanded.

All concur.


author: TURNAGE, Judge.

text:
    Royce L. WILSON and Brenda S. Wilson, Plaintiffs-Respondents, v. ROYAL GLOBE INSURANCE COMPANY, Defendant-Appellant.
    No. KCD 29703.
    Missouri Court of Appeals, Kansas City District.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer Denied Jan. 31, 1979.
    Application to Transfer Denied March 13, 1979.

      Jerry M. Drewry, Phillip S. Smith, Jr., McKenzie, Williams, Merrick, Beamer & Wells, Kansas City, for defendant-appellant.
    Michael E. Reardon, Duncan & Russell, Kansas City, for plaintiffs-respondents.
    Before SOMERVILLE, P. J., and DIXON and TURNAGE, JJ.
   TURNAGE, Judge.

Royce and Brenda Wilson filed suit against Royal Globe Insurance Company on an automobile liability insurance policy for reimbursement of medical expenses. Both parties filed a motion for summary judgment and the court granted the Wilsons’ motion, entering judgment against Royal Globe.

On this appeal Royal Globe contends the court erred because it refused to give effect to an exclusion limiting medical expense payments provided by the policy. Reversed and judgment ordered in favor of Royal Globe.

An automobile liability insurance policy the Wilsons purchased from Royal Globe contained a provision for “medical expense coverage” in which Royal Globe agreed to pay reasonable medical expenses, subject to “exclusion (m),” in a separate section, which deducted from the medical expenses payable

that amount of any medical expense which is paid or payable to or on behalf of the injured person under the provisions of any (1) premises insurance affording benefits for medical expenses, (2) individual, blanket or group accident, disability or hospitalization insurance, (3) medical, surgical, hospital or funeral service, benefit or reimbursement plan, or (4) workmen’s compensation, or disability benefits law or any similar law.

The Wilsons and their two children were injured in an automobile accident while occupying the insured automobile and incurred medical expenses totaling $2,770.98. Wilson also had a policy with Blue Cross and Blue Shield affording coverage for the medical expenses resulting from the accident. Payment was received from Blue Cross for all but $377.69 of their expenses and Royal Globe then paid the Wilsons only the $377.69 which Blue Cross did not pay. Each party filed a motion for summary judgment, with the Wilsons asserting the invalidity of exclusion (m) while Royal Globe contended it was valid. The trial court denied Royal Globe’s motion for summary judgment and entered summary judgment for the Wilsons.

On this appeal Royal Globe contends the court erred as a matter of law in granting the Wilsons’ motion for summary judgment because the policy contained an exclusion couched in plain and unambiguous language that precluded the Wilsons from recovering any amounts paid by Blue Cross. “[Ajbsent ambiguities or phraseology reasonably susceptible of different interpretations or meanings, . . . courts should enforce the plain provisions of contracts, including contracts of insurance.” Eaglestein v. Pacific National Fire Insurance Co., 377 S.W.2d 540, 542[1—3] (Mo.App.1964).

Wilson does not contend the language employed is ambiguous or otherwise faulty, but only that under § 376.775, subd. 1(5), RSMo 1969 , exclusion (m) is invalid because it was not printed in the same provision as the medical expense coverage which it limited. Rather, the exclusion was printed in a later section of the policy under the heading “Exclusions. This policy does not apply:.”

The fatal defect in Wilson’s argument is that he attempts to classify the medical expense provision in Royal Globe’s policy as an individual accident and sickness policy under §§ 376.770-.795, the Uniform Individual Accident and Sickness Insurance Law. However, § 376.773 limits application of these sections constituting the uniform law to policies insuring generally against sickness or bodily injury or death by accident. Operation of the medical expense provision in the Royal Globe automobile liability policy now under consideration is contingent on the occurrence of specified accidents involving automobiles or highway vehicles. Thus, this medical expense provision is necessarily exempted from these sections constituting the uniform law.

Additional comparisons between the Royal Globe policy and requirements imposed by the sections designated as the Uniform Individual Accident and Sickness Law merely strengthen the conclusion that they do not apply in any way to the medical expense provision of the Royal Globe policy. For example, policies governed by these sections are limited to insuring only one person, except that § 376.775, subd. 1(3) permits a policy to cover an adult member of a family and other family members including the spouse and dependent children under the age of nineteen. In contrast, the medical expense provision in Royal Globe’s policy covers not only the named insured in the automobile policy, but also any person occupying the insured vehicle, and in certain circumstances even any person occupying a non-owned vehicle. Moreover, in addition to the limitation just discussed, § 376.777 lists 33 other provisions required to be included in every individual accident and sickness insurance policy unless the omission of any specific provision is approved by the superintendent of insurance. Such additional mandatory provisions are obviously not included in the Royal Globe medical expense coverage, nor does the record reveal any communication from the superintendent of insurance acknowledging this coverage as an individual accident and sickness policy and granting permission to omit or vary the 33 required provisions.

Legislative intent not to include provisions for medical expenses in automobile liability policies within the purview of §§ 376.770-.795 is further emphasized by the enactment of §§ 379.110-.120, RSMo 1975 Supp., to regulate cancellation of automobile insurance. Section 379.110 defines “policy” as used in these sections, as “an automobile policy providing automobile liability coverage, uninsured motorist coverage, automobile medical payments coverage, or automobile physical damage coverage insuring a private passenger automobile [Italics added].” Royal Globe’s policy, providing all the above enumerated coverage, is clearly within the definition of an automobile policy under § 379.110. The requirements of § 376.775, subd. 1(5), contrary to Wilson’s assertions, simply do not apply to the medical expense coverage in the automobile liability policy issued by Royal Globe.

Wilson also contends exclusion (m) is invalid as contrary to public policy, but he fails to explain the manner in which public policy suffers except to argue that it is socially desirable for motorists to have medical expenses fully covered by both automobile liability policies and other policies. An effort is also made to rely on such cases as Steinhaeufel v. Reliance Insurance Companies, 495 S.W.2d 463 (Mo.App.1973), in which a provision cutting down uninsured motorists coverage in automobile liability policies was declared invalid. However, cases such as Steinhaeufel are easily distinguished as being based on statutory requirements that certain coverage be afforded by uninsured motorists provisions. No such statutory requirement is applicable to the medical expense coverage in the present policy.

Considering the precise question here involved, Hartford Accident and Indemnity Co. v. Chiate, 13 Ariz.App. 321, 476 P.2d 527 (1970), upheld as valid and unambiguous a medical expenses exclusion identical to that in Royal Globe’s policy. The opinion noted that no case had been cited in which the disputed exclusion had been held invalid. Similarly, Wilson cites no cases in which the exclusion now under consideration has been declared invalid.

“It is the rule that except to the extent a statute may inhibit or public policy control, parties to an insurance contract are free to place such limitations and restrictions on the insurer’s liability as they may be willing to agree.” Webb v. State Farm Mutual Automobile Ins. Co., 479 S.W.2d 148, 150[1] (Mo.App.1972). No reason, either statutory or public policy, has been offered which successfully denigrates the validity of this exclusion. No reason is apparent to this court which would require the exclusion to be disregarded under the facts and circumstances of this case.

The judgment is reversed and the court is directed to enter judgment sustaining the motion for summary judgment of Royal Globe and denying the motion for summary judgment by Wilson.

All concur.

       All statutory references are to RSMo 1969 unless otherwise indicated.


text:
    STATE of Missouri, Respondent, v. Reginald CARTER, Appellant.
    No. 29878.
    Missouri Court of Appeals, Kansas City District.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer Denied Jan. 31, 1979.
    Application to Transfer Denied March 13, 1979.
    Clifford A. Cohen, Public Defender, Kevin R. Locke, Asst. Public Defender, Kansas City, for appellant.
    John D. Ashcroft, Atty. Gen., J. Michael Davis, Asst. Atty. Gen., Jefferson City, for respondent.
    Before HIGGINS, Special Judge, Presiding, PRITCHARD, J., and WELBORN, Special Judge.
   ROBERT R. WELBORN, Special Judge.

Appeal from judgment of conviction of armed criminal action. § 559.225, RSMo Supp.1976.

Reginald L. Carter was charged with robbery in the first degree and armed criminal action. He pleaded guilty to the robbery charge. After his motion to dismiss the armed criminal action charge on the grounds that it arose from the same act as was the basis for the robbery charge and that prosecution and conviction on both charges would violate the Double Jeopardy clause of the United States Constitution had been overruled, that charge was submitted to the court sitting without a jury on the facts admitted by the defendant upon his guilty plea to the robbery charge.

Defendant was sentenced to ten years on the robbery charge and five years on the armed criminal action charge, the sentences to run concurrently. The appeal is directed at the armed criminal action conviction.

Carter, in pleading guilty to the robbery charge, stated that he and an accomplice called a cab. They entered in a cab and after a short ride, Carter and his accomplice each produced a gun and said: “This is a robbery, stop the car and pull over.” Carter displayed a .25 automatic to the driver and the accomplice placed a .22 revolver at the driver’s head. They took the driver’s money and watch and left.

Appellant’s sole contention on this appeal is that the charge of armed criminal action “constituted a violation of double jeopardy proscriptions in that it subjected appellant to dual punishments for the same offense.” The state questions the adequacy of appellant’s preservation of his constitutional objection.

The state’s objection need not be pursued. The answer to appellant’s argument is found in the decision by the Missouri Supreme Court en banc in the case of State v. Treadway, 558 S.W.2d 646, 651-652[8-13] (1977). In that case, the defendant, convicted of robbery in the first degree, contended that conviction of armed criminal action stemming from the same acts placed him in double jeopardy. The court rejected the contention for the reason that “the two offenses are not the same in law, * *.”

Appellant asserts that the court’s analysis in Treadway was wrong and that proper analysis would sustain his contention. This court is bound to follow the latest decision of the Supreme Court which is Treadway. This court cannot correct any allegedly erroneous reasoning applied in that case.

Judgment affirmed.

All concur.


text:
    STATE of Missouri, Respondent, v. Fred Edson DAVIS, Appellant.
    No. 29881.
    Missouri Court of Appeals, Kansas City District.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer Denied Jan. 31, 1979.
    Application to Transfer Denied March 13, 1979.

      Clifford A. Cohen, Public Defender, L. D. Mayo, Jr., Asst. Public Defender, Kansas City, for appellant.
    John D. Ashcroft, Atty. Gen., John M. Morris, III, Asst. Atty. Gen., Jefferson City, for respondent.
    Before HIGGINS, Special Judge, Presiding, PRITCHARD, J., and WELBORN, Special Judge.
   ROBERT R. WELBORN, Special Judge.

Appeal from judgment of conviction on two counts of robbery in the first degree. A jury found Fred Davis guilty of the charges and he was sentenced, in accordance with the verdict, to five years’ imprisonment on each count. The sentences were ordered to be served consecutively.

At around midnight on November 13, 1976, Ms. Laurabelle Steffens and her sister, Ms. Viola Miller, were at the Fun House Pizza Parlor in Independence. They had eaten a sandwich in the pizza parlor and were there about an hour. Ms. Stef-fens’ attention had been drawn to two men seated in an adjoining booth and when she and her sister started to leave, the two men did likewise. When Ms. Steffens hesitated in order to take her car keys from her purse before leaving, the two men also hesitated. As Ms. Steffens got into the main hallway, she told her sister, “I think we are being followed.” Her sister told her, “You are just imagining.”

The women walked into the parking lot and were about halfway to Ms. Miller’s car when a voice behind them said: “Hand us your purse.” They turned. Ms. Steffens recognized the two men behind them as the men they had seen in the pizza parlor. The younger of the two men who was holding a knife took Ms. Steffens’ purse. Ms. Miller backed away and took her billfold from her purse and offered it to the older of the two men. He refused to take the billfold alone and demanded her purse which she gave to him. The women were told to get in their car and leave. The men entered an Oldsmobile parked on the parking lot.

As the men got into the car, the women began to scream. Ms. Miller told her sister to take the license number of the men’s car and she ran back into the pizza parlor, where she attracted the attention of patrons and employees. Ms. Steffens took the license number and ran back into the parlor. As she did so, her sister accompanied by several persons came out another door. When Ms. Steffens again went outside, she saw the older of the men lying on the ground with persons sitting on him. The younger man was not present.

An employee of the pizza parlor who went outside in response to Ms. Miller’s call saw two men in the Oldsmobile, trying to get it started. He and others tried to prevent the men from starting the auto. It did start and the men started to leave, but the car stalled. The employee and others dragged one of the men from the car and sat on him until police arrived. The employee testified that, as they were trying to get the man out of the car, he said, “Stay away or I’ll kill you.” The second man fled, pursued by two pizza parlor employees. He stopped a short distance away, saying, “I didn’t do anything.” The employees asked him to come back and wait for the police and he did so without objection. As he walked back he threw an object into the street, saying it was old ear keys. After the police arrived, a search of the area produced a knife. The two purses were found on the front seat of the Oldsmobile.

Police arrived at the scene and the men were placed under arrest. The older man was appellant Fred Davis. The younger man who had fled was William Sumner.

Davis was charged in separate counts with first degree robbery from Ms. Steffens and Ms. Miller. At his trial Ms. Steffens testified to the circumstances of the taking of the purses. Ms. Miller did not testify. There was testimony from the pizza parlor employees about their activity in assisting in the apprehension of the defendant and his companion.

Davis testified that Sumner was an acquaintance who had come to his house on the evening of November 13 and asked Davis to take him in search of a man who owed him some money. After looking for the man in various places, the two arrived at the Fun House Pizza Parlor where Davis ordered a sandwich. As they started to leave, Sumner was 12 or 14 feet ahead of Davis. He followed Sumner outside, past their car, and then noticed that two women ahead of Sumner had turned around. He saw that Sumner had a purse in his hands and that one of the women was “digging” in her purse. Davis asked the woman what she was doing and she said, “I’m getting out my billfold to give it to you.” He replied, “I do not want your billfold.” He turned to Sumner and said, “Put that purse on the ground and go to the car.” He turned around to talk to the woman and “ * * * the next thing I knew, the woman was taking off in the parking lot, screaming ‘Robbery’.” Davis said he started to the ear. Sumner was in the car. When Davis got into the car, a “crowd” of people came out of the pizza parlor. He said that he was just going to lock the car and sit there, but one door wouldn’t lock and the people opened it and started to pull him out of the car. He tried to start the car, but was pulled from it to the ground. He told a man who had his arm on Davis’s throat: “Hey, I give up. I’m not doing anything. Are you trying to kill me?” Davis denied that he took anyone’s purse and said that Sumner had not told him of any plan to rob anyone.

On his appeal, the first complaint is that the trial court erred in failing to dismiss the charges against appellant for the failure of the state to comply with the trial court’s discovery order. Rule 25.32.

In response to a defense discovery request, the prosecutor provided a copy of the police report of the incident. Several pages of the report were illegible. On February 11, 1977, a request for legible copy was unproductive, so a motion to compel discovery was filed February 28. The motion was sustained and the state was ordered to produce a legible copy of the police report by March 28. The order was ignored and on August 31, a motion to dismiss the charges for the prosecutor’s noncompliance was filed. On September 8, the prosecutor supplied defense counsel with a legible copy of the police report.

When the case came on for trial on September 26,1977, defense counsel brought up the motion to dismiss. He complained that the illegible report contained the names of three persons who had witnessed the events on the pizza parlor parking lot but that because the report furnished was illegible in part, he had been unable to ascertain the names of the three persons until the legible copy was finally furnished. At that time an investigator for defense counsel attempted to get in touch with two of the persons but he was unable to do so. No effort was made to talk to the third person. The trial court offered to give defendant a continuance to permit counsel to attempt to find and interrogate the three persons. After consulting with the defendant, defense counsel stated:

“Your Honor, at this time the defendant doesn’t feel that a continuance would cure the harm that has already been done. Defendant feels that having an opportunity to get in touch with these witnesses at this late date would not be of much value, considering the fact that in a few weeks it will have been an entire year since the alleged crime was supposed to have occurred. Defendant feels that rather than put off his trial any further, he would prefer to go to trial at this time.”

The court then overruled the motion to dismiss.

Appellant’s position here is that stated to the trial court. He contends that he was prejudiced by the delay of the disclosure of the three persons and that the prejudice could be remedied only by dismissal of the charges.

The imposition of sanctions under Rule 25.45 and the choice of the nature of the sanctions are matters for the discretion of the trial court. State v. Broyles, 559 S.W.2d 614, 615[1] (Mo.App.1977); State v. Moten, 542 S.W.2d 317, 320[2] (Mo.App. 1976). “Basically, the question is whether or not the failure to produce as required by the rules results in fundamental unfairness to the defendant. State v. Buckner, 526 S.W.2d 387 (Mo.App.1975).” State v. Moten, supra.

In this ease, the state offered no explanation or excuse for noncompliance with the discovery order. On the other hand, counsel for defense made no effort to enforce the order or in any manner call the court’s attention to the state’s delinquency for some five months. The order required production of the good copy of the police report by March 28. The first step to enforce the order was by way of the motion to dismiss, filed August 31. When the motion was filed, the state produced a legible copy of the report on September 8. Counsel for the defendant made only a small effort then to locate the persons named—a telephone call in an attempt to locate one and a personal visit looking for the other. Both efforts were unsuccessful and nothing was done about the third person.

In such circumstances, the offer by the trial court to grant a continuance, declined by appellant, and the overruling of the motion to dismiss were not an abuse of discretion.

Appellant’s argument that the passage of time necessarily damaged him because the witnesses’ memories would have become dim even if he had been able to locate them after the good report was furnished is wholly speculative. The trial court afforded him an opportunity to demonstrate the validity of that argument when he offered a continuance to permit defendant to determine whether or not such was the case. There having been no demonstration that appellant was deprived of favorable evidence by the state’s delay in complying with the discovery order, this court will not hold the trial court’s refusal to dismiss the charges an abuse of discretion.

Appellant next contends that the trial court erred in overruling his motion to dismiss at the close of all the evidence in the ease charging robbery from Viola Miller. He contends that there was insufficient evidence from which the jury could find that he, either acting alone or knowingly in concert with another, took Ms. Miller’s purse by violence to her person or by putting her in fear of some immediate injury to her person. Inasmuch as the charge was submitted on a theory of taking from Ms. Miller “by causing her to fear immediate injury to her person,” the inquiry will be limited to that basis.

Appellant’s argument is premised upon what he considers the rational approach of Ms. Miller upon the demand for her purse. Instead of complying immediately, she offered her billfold because she wanted to keep her purse with her car keys in it. According to Ms. Steffens, appellant insisted on the purse, so Ms. Miller gave it to him.

Appellant then notes that after the women were told to get into their car, they started to do so, but when Ms. Miller realized that she didn’t have her keys, she yelled to them that she had to have her keys. Appellant then notes that Ms. Miller did not become “hysterical” until the appellant and his companion started to leave.

This argument demonstrates only that Ms. Miller did act rationally when her purse was demanded. It de-emphasizes the fact that, although Ms. Miller did offer her billfold at first, she, in the end, surrendered the purse as demanded. Appellant offers no explanation for this action on her part. The only logical explanation and inference to be drawn from the evidence are that she surrendered her purse because of her fear of immediate injury if she did otherwise. “Fear of immediate injury * * * need not be expressly shown, e. g., State v. Underwood, 470 S.W.2d 485, 486 (Mo.1971), cert. den., 405 U.S. 928, 92 S.Ct. 980, 30 L.Ed.2d 802 * * * (1972). A presumption of fear will arise from evidence show ing some reasonable grounds therefor. State v. Ray, 354 S.W.2d 840, 843 (Mo.1962); State v. Tidwell, 500 S.W.2d 329 (Mo.App. 1973).” State v. Day, 560 S.W.2d 322, 323[1-3] (Mo.App.1977). The flourishing of a knife by one of the men would certainly afford reasonable grounds for fear on the part of Ms. Miller and her surrender of her purse is reasonably explained only on that basis.

Appellant finally contends that the court should have instructed the jury on stealing from the person. The answer to this contention is found in State v. Nylon, 563 S.W.2d 540, 543[9-12] (Mo.App.1978):

“Where there is substantial evidence that the taking of money occurred without violence or putting the victim in fear, the court should submit instructions to the jury allowing them to find defendant guilty of stealing. State v. Parker, 324 S.W.2d 717, 722 (Mo.1959). However, fear is presumed where a deadly weapon is used to obtain money. State v. Keeney, 425 S.W.2d 85, 89 (Mo.1968); State v. Ray, 354 S.W.2d 840, 843 (Mo.1962). Where the state provides evidence of all the elements of robbery, including fear, and defendant presents evidence showing only that he committed no crime, no instruction on stealing is required.” State v. Nylon, supra, at 543.

In this case, the state offered substantial evidence in proof of the robbery charge. The defense was that appellant did not participate in any taking of Ms. Miller’s purse. In such situation, no instruction on stealing from the person was required.

Judgment affirmed.

All concur.


text:
    Alvin S. LACKEY and Vivian Lackey, Plaintiffs-Respondents, v. Ted L. JOULE, Aretha F. Joule, Beverly Joule Daniels and Gary Leech, Defendants-Appellants.
    No. KCD 29947.
    Missouri Court of Appeals, Kansas City District.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer Denied Jan. 31, 1979.
    Application to Transfer Denied March 13, 1979.

      Harry T. Limerick, Jr., Columbia, for defendants-appellants.
    Hilda N. Petri, Columbia, for plaintiffs-respondents.
    Before SOMERVILLE, P. J., and DIXON and TURNAGE, JJ.
   TURNAGE, Judge.

Alvin S. Lackey and Vivian Lackey sought an injunction against Ted L. Joule, his wife, son and daughter to prohibit them from interfering with the continued use of a portion of a septic tank lateral underlying the Joule property. The court entered an injunction against the Joules and this appeal followed.

The Joules contend the finding of an easement by implication was not supported by the evidence and the evidence showed an agreement not to create such easement which prevents its existence. Affirmed.

In 1954 Joule and his wife constructed a house on the western part of a tract they owned in Columbia and occupied it until 1969 when they divided the tract and sold the house to Mrs. Haines. This house was served by an individual septic tank system built by Joule and located on the tract sold to Haines except for 10 feet of the laterals which ran under the adjoining portion of the tract retained by Joule. Both Joule and Mrs. Haines testified that at the time of the conveyance an oral agreement was made that the 10 feet of laterals underlying the tract retained by Joule would be removed by Haines any time Joule requested.

Haines later sold her tract to Bigley with nothing in the record to indicate Bigley was aware of any agreement between Joule and Haines concerning the 10 feet of laterals. Bigley conveyed to Heim, again without evidence of disclosure of any agreement concerning the lateral field and Heim sold to the Lackeys.

The Lackeys testified they knew the house was served by an individual septic tank system but not that the 10 feet of laterals extended onto the tract retained by Joule until Joule notified them that he was about to sell the adjoining tract and unless they severed the 10 feet of laterals he would sever them himself. This suit followed to prevent Joule from severing the laterals extending onto the tract he retained.

Lackey also introduced evidence by persons in the business of constructing individual septic and sewage disposal systems that because the Lackey tract was located on higher ground than any of the adjoining tracts and because of its size and soil composition, an individual sewage disposal system could not be constructed wholly on the Lackey tract. In short, these experts stated that since the existing system was the only one which would work so that water would not flow onto adjoining land, the 10 feet of laterals under the Joule tract was reasonably necessary. Joule introduced contradicting evidence that an individual sewage disposal system could be satisfactorily constructed wholly on the Lackey tract.

The trial court found an easement by implication existed for the 10 foot lateral field on the Joule tract and expressly found that the experts produced by Lackey were more believable than those produced by Joule. The court entered an order permanently restraining the Joules and their successors in title from terminating or interfering with the laterals under their property. The court further stated in its judgment that Joule should have disclosed it in writing if he had intended in the future to sever the 10 feet of laterals extending onto the tract he retained.

On this appeal Joule first contends the evidence does not support the finding of an easement by implication for the use of the 10 feet of the Joule property occupied by the laterals. In Causey v. Williams, 398 S.W.2d 190, 197[4, 5] (Mo.App.1965) the court set out the requirements for the creation of an easement by implication from pre-existing use as

(1) unity and subsequent separation of title; (2) obvious benefit to the dominant estate and burden to the servient portion of the premises existing at the time of the conveyance; (3) use of the premises by the common owner in their altered condition long enough before the conveyance and under such circumstances as to show that the change was intended to be permanent; and (4) reasonable necessity for the easement.

A review of the evidence with reference to these requirements reveals beyond question a unity and subsequent separation of title; Joule owned the whole tract and later divided it. There is no doubt as to an obvious benefit to the dominant estate Joule sold and a burden to the servient portion he retained which existed at the time of conveyance. Nor is there any doubt of the use of the premises by Joule long enough before the conveyance and under such circumstances to show the change was intended to be permanent; after the Joules built the house served by the disposal system in 1954, such system was continuously used by them until the conveyance which divided the tract in 1969. The reasonable necessity of the system, supported by the evidence referred to above and the testimony by sewage system experts, was expressly found by the court who heard and saw the witnesses. This court must give due regard to the trier of facts to judge the credibility of the witnesses. Jaeger v. Jaeger, 547 S.W.2d 207, 213[9, 10] (Mo.App.1977).

The evidence fully satisfies all of the requirements for the establishment of an easement by implication. Furthermore, an easement by implication for underground sewer pipes is a recognized application of the general rule. Romanchuk v. Plotkin, 215 Minn. 156, 9 N.W.2d 421 (1943), 25 Am.Jur.2d Easements and Licenses, § 30, p. 444, 58 A.L.R. 832.

Joule next argues the judgment is not supported by the evidence because Joule and Haines testified they orally agreed at the time of the conveyance that the use of the laterals on the adjoining Joule tract would be discontinued whenever Joule requested. Admittedly, this testimony was uncontradieted, but the deference which this court gives to the trier of facts to judge the credibility of witnesses applies even to uncontradicted evidence. Jaeger, supra. Thus, the trial court was not required to believe the uncontradicted testimony of Joule and Haines. From the judgment entered, it is apparent the court did not believe such testimony because the court is deemed to have found all fact issues in accordance with the result reached. Roth v. Roth, 571 S.W.2d 659, 664[2] (Mo.App. 1978). Since the court could not have found the existence of an easement by implication if it had found an express agreement relating to the matter (Causey, supra, at p. 198), the court obviously did not believe the testimony relating to the agreement.

Joule finally contends the court’s observation, that if Joule had intended to terminate use of the laterals he should have given notice in writing, his tantamount to holding that an easement by implication will be created unless a party expressly declares in writing that such easement does not exist. Joule’s construction of this part of the judgment is not justified. Basically, the court did not find an agreement that an easement by implication would not be created, but rather affirmatively found that such an easement had been created. It has already been demonstrated that the evidence fully supports such a finding and that the court apparently did not believe the testimony regarding the alleged oral agreement. Thus, the court did not declare the law to be that an easement by implication would be created unless expressly denied in writing. The court’s statement merely sheds light on its reason for not believing the testimony as to an agreement to discontinue use by observing that under the circumstances it was more likely that any such agreement would have been reduced to writing. The court evidently thought the absence of a writing as to the purported agreement militated against finding that such an agreement existed.

Since the judgment is supported by the evidence and did not erroneously declare or apply the law it is affirmed. Murphy v. Carron, 536 S.W.2d 30 (Mo.banc 1976).

All concur.


author: GUNN, Judge.

text:
    Walter E. SMITH and Louise Smith, his wife, Respondents, v. CITY OF FARMINGTON, a Municipal Corporation, Appellant.
    No. 39575.
    Missouri Court of Appeals, Eastern District, Division Three.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer to Supreme Court Denied Feb. 16, 1979.
    Application to Transfer Denied March 13, 1979.

      Colson & Wagner by Gary W. Wagner, James G. Freer, Farmington, for appellant.
    V. Kenneth Rohrer, Roberts & Roberts, Farmington, for respondents.
   GUNN, Judge.

Walter E. and Louise Smith brought a two count action in circuit court for money damages and injunctive relief based upon the City of Farmington’s (the City) interference with their right to peaceable enjoyment of their property. More specifically, raw sewage and polluted water periodically escaped from a sewer pumping station maintained by the City which was located near the plaintiffs’ land. As a result, a foul-smelling, potentially health hazardous discharge inundated the Smiths’ own residential lot, several lots which were to be developed by the Smiths for sale and a man-made lake behind the Smiths’ home. In the second count, the Smiths alleged that the City stacked long segments of drainage pipe on their land, further depriving them of its use and enjoyment. A jury returned a verdict in favor of the Smiths in the amount of $85,600 on Count I and $400 on Count II. The trial court was requested to file findings of fact and conclusions of law with regard to the equitable portion of Count I and ultimately entered judgment against the City, thereby permanently enjoining its employees from allowing discharge of sewage onto the Smiths’ property. From these judgments, the City appeals, citing as error the trial court’s refusal to sustain its objections to: (1) Smiths’ counsel’s questions during cross-examination concerning the City’s budget, and (2) Smiths’ counsel’s question during voir dire regarding insurance. We affirm in part and remand on the issue of damages only.

The City bases one complaint on an exchange between Smiths’ counsel and the Director of Public Works for the City during which, over objection, Smiths’ counsel was permitted to inquire as to the amount of the City’s budget.

The City submits that any testimony adduced concerning its financial worth is irrelevant, immaterial and prejudicial. In light of the City’s opening argument which ascribed its inability to solve its sewer problem in part to lack of funds, we must disagree. The determination of relevancy is a matter which rests solely within the discretion of the trial court, as does the admission or exclusion of rebuttal evidence. State v. Huff, 454 S.W.2d 920 (Mo.1970); State v. Taylor, No. 39,709 (Mo.App.St.L.Dist., Dec. 19, 1978); State v. Kerr, 548 S.W.2d 295 (Mo.App.1977). As the City opened the pathway to a discussion of its inability to pay, we find no abuse of discretion in allowing the plaintiffs to tread along that path. See, State v. Stamps, 569 S.W.2d 762 (Mo.App.1978). However, on retrial, as hereafter ordered, plaintiffs should forbear reference to the City’s finances unless relevant to a particular issue or initiated by the City.

However, the City’s second citation concerning insurance coverage is well taken and is ground for remand on the issue of damages. The City complains that the trial court erred when it failed to sustain an objection to the plaintiffs’ inquiry during voir dire regarding the relationship of the jury panel to insurance companies with whom the City held policies. Evidently there was a conference on this subject prior to the seating of the venire panel, but we are only provided with a synopsis of the proceeding in the record:

THE COURT: In conference, prior to the seating of the venire panel, Mr. Wagner [City’s attorney] objected to the asking of the insurance question. At that time the Court overruled the objection, and give him a bill of exception as to any question as to voir dire examination.
MR. ROBERTS: [Smiths’ attorney] May the record also reflect, Your Honor, that in regard to Mr. Wagner, if there was any person or corporation interested financially in the outcome of the case, Mr. Wagner responded to the effect that the two companies mentioned in voir dire examination had policies, but denied coverage, but the city was contending they had coverage.
MR. WAGNER: Now, Your Honor. That conversation was off the record as to what was contended. I think that the record should show that both insurance companies have denied coverage.
THE COURT: But at this point there has been no judicial determination. All right, let the record so reflect. Anything else?

The law is settled in Missouri that a party who wishes to examine a jury as to any relationship with his opponent’s insurance company must lay the foundation in conference prior to the voir dire and outside the jury’s hearing. Murphy v. Graves, 294 S.W.2d 29 (Mo.1956); Yust v. Link, 569 S.W.2d 236 (Mo.App.1978). At that time, the party’s counsel must establish the name of any insurance company with an interest in the case, thus evincing his good faith in exploring the subject later on voir dire. The City argues that plaintiff’s knowledge of the denial unjustifiably presupposes that the subsequent inquiry was made in good faith. We disagree. As long as the inquiry is made in accordance with the court’s instructions, it will necessarily be in good faith. Yust v. Link, supra; State ex rel. State Highway Commission v. Beaty, 505 S.W.2d 147 (Mo.App.1974). The trial court has broad discretion in controlling voir dire examinations. Williams v. State, 558 S.W.2d 671 (Mo.App.1977); State v. Hurd, 550 S.W.2d 804 (Mo.App.1977). The true issue before us, therefore, is whether or not the trial court abused its discretion. Considering the scanty record of the conference before us, we must conclude that it did. Under almost identical circumstances, this court has held that where an insurance company has denied liability, is not conducting the defense of the case and is not party to the pending suit — as apparently is the situation here — it is reversible error to permit the plaintiffs’ attorney to inquire as to whether any members of the jury panel have an interest in that insurance company. Bennett v. Cauble, 167 S.W.2d 959 (Mo.App. 1943). The result in Bennett was reached despite an admission by the defense counsel that he expected to pursue the claim with the insurance company under the terms of the policy if any judgment were recovered against his client.

But we find that the error here does not concern the issue of the City’s liability for damages — only the amount of damages. The record is conclusive that the City caused raw sewage with its offal to flow on the Smiths’ property since at least 1971. The City’s employees charged with responsibility for its sewer system candidly admitted that the faulty system had discharged its stinking putrescibles on the Smiths’ property and that the City had stored pipe on their ground.

Thus, we affirm the trial court’s determination as to injunctive relief granted, and the trial court’s and jury’s findings as to liability against the City are affirmed. The cause is remanded for trial on the issue of damages only as to both counts.

REINHARD, P. J., and CLEMENS, J., concur.

      . We will not consider two points raised by the City regarding the injunction, as they were not properly preserved for review, Fowler v. SH-S Motor Sales Corp., 560 S.W.2d 350 (Mo. App.1977); did not meet the requirements for “points relied on” as stated in Rule 84.04(d), Thummel v. King, 570 S.W.2d 679 (Mo. banc 1978), and would require us to review the merits of the trial court’s decision de novo in contradiction to the Supreme Court’s interpretation of Rule 73.01. Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976).


text:
    In re ESTATE of Paul WITTENBERG, Deceased. George W. CURRAN and David E. Horn, Co-Administrators of the Estate of Ella W. Salisbury, Deceased, c.t.a. d.b.n., Plaintiffs-Claimants-Appellants, v. Aldena WITTENBERG, Administratrix of the Estate of Paul W. Wittenberg, Deceased, Defendant-Respondent.
    No. 40308.
    Missouri Court of Appeals, St. Louis District, Division Three.
    Dec. 27, 1978.
    Motion for Rehearing and/or Transfer to Supreme Court Denied Feb. 16, 1979.
    Application to Transfer Denied March 13, 1979.

      George W. Curran, David E. Horn, St. Louis, for plaintiffs-claimants-appellants.
    Joseph A. Herbers, St. Louis, for defendant-respondent.
   GUNN, Judge.

Appellants as administrators of the estate of Ella W. Salisbury, c.t.a. d.b.n., filed claim in the St. Louis probate court for $70,999.97 plus interest against the estate of Paul Wit-tenberg. The probate court allowed $49,-533.99 with interest but classified the claims as 5th class. Appellants appealed the probate court’s order to the circuit court arguing that the claims should have been given equitable lien status and priority over non-equitable claims against the estate. The circuit court affirmed the probate court’s ruling and appellants appeal. We affirm.

The matter was submitted to the circuit court on a stipulation of facts, the substance of which was that Paul Wittenberg, acting in a fiduciary relationship as financial confidant to his aunt, Ella W. Salisbury, and executor of her estate after her death, had confiscated certain of her funds for his personal use. Appellants, as administrators of the estate of Ella Salisbury, claim an equitable lien on the assets of Paul Witten-berg’s estate after his death.

The standard of review guiding us in this suit in equity is that the trial court’s judgment is to be sustained unless: there is no substantial evidence to support it; it is against the weight of the evidence; it erroneously declares or applies the law. Roth v. Roth, 571 S.W.2d 659 (Mo.App.1978).

Owen v. Smith, 532 S.W.2d 538 (Mo.App. 1976), relied on by the trial court in its judgment, is felicitous to the issue before us. In Owen, the court applied its cachet to Restatement (Second) of Trusts § 202 (1959), which with comment o. on Subsection (2) provides:

(1) Where the trustee by the wrongful disposition of trust property acquires other property, the beneficiary is entitled at his option either to enforce a constructive trust of the property so acquired or to enforce an equitable lien upon it to secure his claim against the trustee for damages for breach of trust, as long as the product of the trust property is held by the trustee and can be traced.
(2) Except as stated in Subsection (1), the claim of the beneficiary against the trustee for breach of trust is that of a general creditor.
o. Necessity of tracing trust property. The claim of the beneficiary against the trustee for breach of trust does not of itself entitle him to priority over the general creditors of the trustee. Thus, if the trustee sells trust property and dissipates the proceeds, the beneficiary is not entitled to priority over other creditors of the trustee. The beneficiary is entitled to priority only if and to the extent that he can trace the trust property into a product. He must prove not only that the trustee once had the trust property, or property which is in whole or in part the product of the trust property. As has been stated, the mere fact that the trust property or its proceeds has been mingled with the trustee’s individual property in one distinguishable mass does not prevent the beneficiary from following the trust property and obtaining in part at least priority over the trustee’s general creditors. But if it is shown that the property or its proceeds has been dissipated so that no product remains, or if the beneficiary fails to prove that the trustee still has property into which the trust property is traceable, his claim is only that of a general creditor of the trustee.

Restatement of Restitution § 215, comment a. Subsection 1 (1937). See also, 76 Am.Jur.2d Trusts § 252 (1975).

The stipulation of facts contains no tracing of any of the alleged trust property into the Paul Wittenberg estate nor is there any suggestion of the commingling of Paul Wittenberg’s personal funds with his aunt’s. Thus, appellants have not shown that they have anything other than a general creditor’s lien, as the circuit court and probate court correctly found.

Cross v. Cross, 362 Mo. 1098, 246 S.W.2d 801 (1952), and Orr v. St. Louis Union Trust Co., 291 Mo. 383, 236 S.W. 642 (1921), relied on by appellants are not in point, for in each case it was clear that the fiduciaries had commingled the beneficiaries’ funds with their own. Not so here. As stated in Restatement of Restitution, supra, cited with approval in Owen v. Smith, supra:

(1) Except as stated in Subsection (2), [dealing with brokers] where a person wrongfully disposes of the property of another but the property cannot be traced into any product, the other has merely a personal claim against the wrongdoer and cannot enforce a constructive trust or lien upon any part of the wrongdoer’s property.

The stipulation of facts does not trace the alleged trust fund into property or mingled mass. Therefore, no equitable lien can be imposed on the assets of Paul Wittenberg’s estate.

Judgment affirmed.

REINHARD, P. J., and CLEMENS, J., concur.