Knowlton v. Ripley County Memorial Hosp.

Decision Date12 January 1988
Docket NumberNo. 14901,14901
Citation743 S.W.2d 132
PartiesBuren KNOWLTON, et al., Plaintiffs-Appellants, v. RIPLEY COUNTY MEMORIAL HOSPITAL, et al., Lucille Parmeter, Personal Representative, Estate of Charles E. Sparger, Deceased, Defendants-Respondents.
CourtMissouri Court of Appeals

Ted M. Henson, Jr., Poplar Bluff, for plaintiffs-appellants.

Andrew C. Bullard, Kennett, for defendants-respondents.

MAUS, Judge.

The appellants in this action are residents and taxpayers of Ripley County. The respondents are the trustees of Ripley County Memorial Hospital (Hospital) and the Personal Representative of the Estate of Charles F. Sparger, a deceased physician. The appellants seek to establish a contract between the Hospital and the physician is invalid and restrain payments by the Hospital to the personal representative in satisfaction of that contract.

The parties have not questioned the jurisdiction of this court. Nonetheless, it is the duty of this court to consider that issue. The Supreme Court has exclusive jurisdiction in all cases involving the construction of revenue laws of this state. Mo. Const. Art. V, § 3 (amended 1982). That provision encompasses questions concerning the disbursement of tax funds, as well as the imposition of taxes. State v. Cribb, 364 Mo. 1122, 273 S.W.2d 246 (banc 1954). Also see Regal-Tinneys Grove Special Road District of Ray County v. Fields, 552 S.W.2d 719 (Mo. banc 1977). However, that constitutional provision does not require transfer when the law has been construed and an appeal can be disposed of by the application of that construction. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888 (Mo. banc 1978); Browning-Ferris Ind. of Kansas City v. Dance, 671 S.W.2d 801 (Mo.App.1984). As demonstrated in this opinion, this appeal can be disposed of by the application of decisions of the Supreme Court. This court has jurisdiction of this appeal.

The record before this court is sketchy. Primarily, that record consists of facts alleged in the pleadings and established by a responsive pleading or the absence thereof. In addition, there were oral stipulations by counsel when the cause was submitted to the trial court. From that background, the following is a condensation of the determinative facts.

The contract referred to was dated February 16, 1981, and essentially provided for the Hospital's employment of Dr. Sparger as a practicing physician for a period of ten years from April 17, 1981, to April 17, 1991. The Hospital was to pay Dr. Sparger a regular fixed annual salary in semimonthly installments. The amount of the regular annual salary was subject to prescribed annual increases and cost of living adjustments in the latter seven years of the contract. In addition, when the income of the Hospital produced by the services of Dr. Sparger in a contract year exceeded a designated amount, as incentive compensation, the Hospital was to pay a prescribed percent of the excess to Dr. Sparger.

Dr. Sparger performed under the contract from its inception on April 17, 1981, to the date of his death on December 11, 1982. Thereafter, an audit demonstrated that by reason of incentive compensation, the Hospital was indebted to the Estate of Charles F. Sparger in the amount of $72,068.83.

In July, 1984, the Hospital filed a petition for a declaratory judgment in the Circuit Court of Pemiscot County. The defendant was the Personal Representative of the Estate of Charles F. Sparger, Deceased. Count I of that petition sought a determination of the validity of the employment contract of February 16, 1981. Count II alleged that in the event the employment contract "is a valid contract, the parties have agreed to enter into a certain installment contract." A copy of the installment contract was attached. Count II sought a declaration that if the employment contract was determined to be valid, the installment contract "is a valid contract, binding the parties thereto." The installment contract attached to that petition has not been made a part of the record. Presumably, it was identical to an installment contract dated September 11, 1984, between the Hospital and the Personal Representative. That contract provides the Hospital will pay the Personal Representative the incentive compensation of $72,068.83, with interest at 10%, in monthly installments of $2,000 per month.

The record before the court does not include a copy of the answer to the declaratory judgment petition, if any, filed by the Personal Representative. On July 17, 1984, the case was called by the Circuit Court of Pemiscot County. A transcript shows the defendant entered her appearance. The parties waived venue and agreed to a trial by the court. They stipulated to the facts alleged in the petition. Upon that stipulation, without argument, discussion of the issues or the citation of authorities, the court stated as follows: "All right. Now, the Court will find that your, that your Contract referred to as Exhibit B, I mean A, attached to the Petition, is valid and binding on the parties. And, the Court will further find that your Contract to be entered into, which is Exhibit B, will be valid and binding on the parties." A written judgment to that effect was filed and entered that day.

In the present action the appellants presented the testimony of a reporter for a newspaper published in Ripley County. His testimony included the following. He learned the Hospital's attorney was "going to seek a judge's opinion on the contract." He asked the hospital board when and where that was to occur. The board did not know. The reporter then called the hospital's attorney. He testified that the attorney "would not tell me where the argument before a judge was going to take place." He learned of the Pemiscot County judgment several days after it had been entered.

The trial court in this action determined that the judgment of the Circuit Court of Pemiscot County was res judicata on the issues presented by the appellants. It therefore adjudged the employment contract and the installment contract to be valid.

The basic point presented by the appellants is the employment contract of February 16, 1981, is "invalid because said agreement calls for the payment of money by a county hospital over a ten year period exceeding in each year the revenue provided for each year." They argue this is obvious and cite no authority other than Art VI, § 26(a) Mo. Const. (1945). In a subsidiary point the appellants assert the declaratory judgment of July 17, 1986, is not res judicata because it was obtained by collusion and the individual trustees were not party defendants in that action.

In response, the respondents make no argument and cite no authority to establish the employment contract does not violate Art. VI, § 26(a). Rather, they contend the appellants abandoned their basic point by failing to cite authority in support thereof. By the balance of their argument and citation of authorities, the respondents seek to establish that the declaratory judgment is res judicata on the issue of the validity of the employment contract of February 16, 1981.

The determination of the trial court that the declaratory judgment is res judicata of the issue presented by the appellants cannot be sustained. The appellants, as residents and taxpayers of Ripley County, have sufficient interest to assert the employment contract and expenditure of funds by the Hospital are contrary to the law and the Constitution. Russell v. Callaway County, 575 S.W.2d 193 (Mo. banc 1978); Worlledge v. City of Greenwood, 627 S.W.2d 328 (Mo.App.1982). A judicial stamp of approval resulting from the essentially ex parte summary proceedings in Pemiscot County in which only the contracting parties were participants cannot bar the rights of the appellants.

The requirements concerning joinder of necessary parties generally applicable to civil actions pending before a circuit judge are stated in Rule 52.04. Rule 87.04, specifically applicable to an action for a declaratory judgment, in part provides: "When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceedings." No decision in this state has been cited or found determining whether or not Rule 87.04 prescribes a scope of joinder of necessary parties broader than declared by Rule 52.04. See Annot., Declaratory Judgments: Parties, 71 A.L.R.2d 723 (1960). Cf. Spencer v. Village of DeKalb, 408 S.W.2d 78 (Mo.1966). In that declaratory judgment action, to establish the validity of a bond issue, it was said that holders under a prior bond issue had an "interest which would be affected by the declaration." Id. at 81. Also see Reed v. City of Bartlesville, 510 P.2d 1013 (Okla.App.1973); Barry Laboratories, Inc. v. Wisconsin State Bd. of Pharmacy, 26 Wis.2d 505, 132 N.W.2d 833 (1965). Also, no decision in this state has been cited or found determining whether or not Rule 87.04 prescribes a limitation upon the doctrines of res judicata and collateral estoppel not generally applicable to judgments in civil actions. See 71 A.L.R.2d 723, supra; New Castle County v. Sterling Properties, Inc., 379 A.2d 1125 (Del.1977). Because the respondents' contention of res judicata has no merit under principles applicable to judgments in civil actions generally, these issues need not be decided.

The generally applicable principle dealing with the scope of res judicata arising from judgments for or against a public body in respect to its constituency has received the following expression In the absence of fraud or collusion a judgment for or against a municipal corporation, county, town, school or irrigation district, or other local governmental agency or district, or a board or officers properly representing it, is binding and conclusive on all residents, citizens and taxpayers in...

To continue reading

Request your trial
10 cases
  • In re Bond Issuance of Greater Wenatchee Reg'l Events Ctr. Pub. Facilities Dist.
    • United States
    • Washington Supreme Court
    • 25 Octubre 2012
    ...in succeeding periods in exchange for property, goods, or services to be provided during those periods”); Knowlton v. Ripley County Mem'l Hosp., 743 S.W.2d 132, 136–37 (Mo.App.1988) (holding that contingency exception applies to employment contract contingent on services performed, just lik......
  • Investors v. Kan. City Downtown Streetcar Transp. Dev. Dist.
    • United States
    • Missouri Court of Appeals
    • 24 Diciembre 2013
    ...of warrants issued by drainage district, where the issues had been litigated in a prior proceeding); Knowlton v. Ripley Cnty. Mem'l Hosp., 743 S.W.2d 132, 135 (Mo.App.S.D.1988). We recognize that Powell arises in a different context. In Powell and related cases, a person or entity similarly......
  • Equitable Life Assur. Soc. of U.S./Marriott Hotels, Inc. v. State Tax Com'n of Missouri, Nos. 62286
    • United States
    • Missouri Court of Appeals
    • 20 Abril 1993
    ...application of a prior supreme court construction, the supreme court does not have exclusive jurisdiction. Knowlton v. Ripley County Mem. Hosp., 743 S.W.2d 132, 133 (Mo.App.1988). Even if the supreme court has not addressed the argument directly, jurisdiction is not exclusive if the argumen......
  • Clements v. Pittman
    • United States
    • Missouri Supreme Court
    • 14 Febrero 1989
    ...parties are in privity depends mostly on their relationship to the subject matter of the litigation. Knowlton v. Ripley County Memorial Hospital, 743 S.W.2d 132, 135 (Mo.App.1988). However, privity is not established because the parties are interested in the same question or in proving or d......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT