Wier v. Kansas City

• Decision Date: 14 July 1947
• Docket Number: 40009
• Parties: Charles H. Wier, Individually and as Trustee for Floyd A. Hunt and Blanche King Park, Administratrix of the Estate of John S. King, Deceased, Appellants, v. Kansas City, Missouri, a Municipal Corporation
• Court: Missouri Supreme Court

204 S.W.2d 268

356 Mo. 882

Charles H. Wier, Individually and as Trustee for Floyd A. Hunt and Blanche King Park, Administratrix of the Estate of John S. King, Deceased, Appellants, v. Kansas City, Missouri, a Municipal Corporation

No. 40009

Supreme Court of Missouri

July 14, 1947

Rehearing Denied September 8, 1947.

Appeal from Jackson Circuit Court; Hon. Ben Terte, Judge.

Affirmed.

Marcy K. Brown, Jr., for appellants.

(1) A trust ex maleficio or in invitum is an implied or constructive trust resting upon public policy and arising whenever one acquires property for certain definite purposes and by fraud retains and claims the property and is unjustly enriched. Parker v. Blakley, 93 S.W.2d 981; Compton v. Farmers Trust Co., 279 S.W. 746; Thierry v. Thierry, 249 S.W. 946; Phillips v Jackson, 240 Mo. l.c. 355, 114 S.W. 118. (2) Under the admissions and evidence the City is subject to the machinery of such a trust because of malfeasance, official misconduct violation of a public trust, and because it acquired title to moneys paid by the Gas Company when subject to an equitable duty to convey it to appellants, on the ground that it would be unjustly enriched if it were permitted to retain such funds. Lucas v. Central Missouri Trust Co., 166 S.W.2d 1053; Canada v. Daniel, 157 S.W. 1032; Suhre v. Busch, 123 S.W.2d 8; Special Road District No. 4 v. Cantley, 8 S.W.2d 944; Elliott v. Landis Machinery Co., 139 S.W. 356. (3) Under the law and ordinances the money received from the Gas Company was a special fund dedicated to the purpose for which it was collected and may not be diverted, directly or indirectly, to any other purpose. Wood v. Kansas City, 62 S.W. l.c. 433; 44 C.J., sec. 4116, p. 1160; Memphis Gas Light v. Memphis, 30 S.W. 25; County v. King, 11 P. 178; Miller & Lux v. Batz County, 76 P. 42; Spaulding v. Arnold County, 6 N.Y.S. 336, affirmed 26 N.E. 295; County of Pike v. Cadwell, 78 Ill.App. 201. (4) The City may not be permitted to take advantage of its own wrong to the detriment of plaintiffs. Arthur T. Brink, Trustee, v. Kansas City, 198 S.W.2d 710, l.c. 716, and cases therein cited. (5) The court erred in refusing appellant's requested declaration of law No. VI and in granting respondent's declaration of law No. 2, under the law and the evidence. Sec. 1014, R.S. 1939, does not apply. Elliott v. Landis Machinery Co., 139 S.W. 356; Canada v. Daniel, 157 S.W. 1032; R.S. 1939, sec. 1031; Coleman v. Kansas City, 173 S.W.2d 572; Morgner v. Huning, 232 S.W. l.c. 91. (6) The court erred in refusing appellant's requested declaration of law No. IX and in granting respondent's declaration of law No. 1, in that deductions for salary deductions made under ordinance No. 303 were clearly illegal according to its express terms, and deductions made under ordinances No. 4484 and No. 4699 are void and inoperative as to appellants because grossly unreasonable, oppressive, unequal and unjust, because they set up forbidden discriminations and arbitrary classifications and are hence void to appellants. State ex rel. City of St. Louis v. Railway Co., 174 S.W. 73; City of Salem ex rel. Roney v. Young, 125 S.W. 857; City of Monett v. Campbell, 204 S.W. 32; City of Cape Girardeau v. Motor Co., 142 S.W.2d 1040. (7) Under such circumstances the partial invalidity of said ordinances as applicable to appellants may be adjudged, even if the ordinance in general is valid. Women's Kansas City St. Andrew Society v. Kansas City, 58 F.2d 592; Public Service Corp. v. Fairbanks-Morse, 19 F.Supp. 45; State ex inf. McKittrick ex rel. City of Springfield v. Water Company, 131 S.W.2d 525; Kansas City, etc. Co. v. Kansas City, 144 S.W. 1099; Ex parte Taft, 225 S.W. 457; Village of Nixa v. Wilson, 200 S.W. 703.

David M. Proctor, City Counselor, John J. Cosgrove and Dorothy F. Fardon, Assistant City Counselors, for respondent.

(1) There must be fraud, actual or constructive, to create a constructive trust, or there must be a confidential or fiduciary relationship. Nothing like this existed here. Little v. Mettwe, 338 Mo. 1223, 93 S.W.2d 100; Parker v. Blakley, 338 Mo. 1189, 93 S.W.2d 986; Gates Hotel Co. v. Davis, 331 Mo. 94, 52 S.W.2d 1011; Suhre v. Busch, 343 Mo. 170, 123 S.W.2d 8; Young v. Kansas City Life Ins. Co., 329 Mo. 130, 43 S.W.2d 1046. (2) A confidential relation existing between two persons does not extend to a third person dealing with one of them. 65 C.J. 487, sec. 230; MacDermot v. Hayes, 170 P. 616, 175 Cal. 95. (3) The agreement between Kansas City and the Gas Company, as contained in its franchise and, Ordinance No. 56134, was made for the sole benefit of Kansas City; hence, no constructive trust could arise in favor of plaintiff. 65 C.J. 455; Clester v. Clester, 135 P. 996; Tremont Coal Co. v. Perchik, 235 N.Y.S. 424, 171 N.E. 775. (4) The City could not lawfully enter into, and its employees could not lawfully rely upon, such an arrangement for the payment of salaries. State ex rel. Rothrum v. Darby, 345 Mo. 1002, 137 S.W.2d 532; 22 R.C.L. 524, sec. 216; 43 Am. Jur., p. 157, sec. 373, p. 160, sec. 378; Somerset Bank v. Edmund, 84 N.E. 64; Coggeshall v. Conner, 120 P. 559; Mason v. Manning, 150 S.W. 1020. (5) The five-year statute of limitation applies. Coleman v. Kansas City, 173 S.W.2d 572. (6) Salary reductions by ordinance are valid. State ex rel. Rothrum v. Darby, 345 Mo. 1002, 137 S.W.2d 532.

Van Osdol, C. Bradley and Dalton, CC., concur.

OPINION

VAN OSDOL

Appeal from a judgment in a case in which actions instituted by plaintiff and others were consolidated for trial. Thereafter, plaintiff, individually and as trustee filed an amended petition stating the claims of himself and of the other parties claimant whose claims were vested in him as trustee. The consolidated actions were originally instituted in the year 1940 by parties plaintiff, gas inspectors, who had been employed during the years 1927 to 1939 in the Public Works Department of defendant, municipality of Kansas City. The actions were upon claims for alleged "illegal deductions" from salaries of the various plaintiffs as gas inspectors. In the instant consolidated case the trial court rendered judgment for plaintiff; however, plaintiff has appealed and is contending the judgment rendered should have been greater in amount. The amount thus in dispute, including interest, is sufficient to vest this court with appellate jurisdiction.

Defendant Kansas City has admitted the alleged deductions were made. Some of the deductions were authorized by ordinance. Other deductions were made at the direction of City's manager. It is admitted by defendant City that it could not lawfully reduce the gas inspectors' salaries except by ordinance. Defendant City tendered plaintiff the amounts, and the trial court has rendered judgment for the amounts (with interest) of those deductions made otherwise than by ordinance and within the limitation period, five years (Sec. 1014 R.S. 1939, Mo. R.S.A., Sec. 1014) prior to the commencement of the original, now consolidated, actions. See Coleman v. Kansas City, 351 Mo. 254, 173 S.W.2d 572.

Gas inspectors' salaries and the salaries of other officers and employees of the Public Works Department of defendant City were provided and scheduled in Sec. 147 of Ordinance No. 52820 (Administrative Code), as amended November 29, 1926, by Ordinance No. 53794. The salaries so provided and scheduled were, in effect, reduced for a stated period by Ordinance No. 303, effective December 31, 1928. The ordinance provided the "reduction shall not apply . . . to salaries paid, or for which the City is fully reimbursed or provided specifically with funds therefor, by the Kansas City Gas Company, or by any of the privately owned Public Utility Companies operating in the City." Under Ordinance No. 3249, effective May 1, 1933, the annual salaries of gas inspectors, as scheduled in Sec. 147 as amended, were changed and revised downwardly. The Ordinance was in force and effect until the end of the City's fiscal year of 1939. Ordinances Nos. 4484 and 4699, effective respectively, February 16, 1937, and September 1, 1937, provided for the suspension of Sec. 147, as amended, for stated suspension periods during the year 1937, and reduced salaries for the periods stated. The recited purposes of the ordinances in reducing salaries were the "preservation of the peace, property, health, safety and morals of Kansas City", and to make the salaries "conform to and be within the anticipated revenue of the City for the present fiscal year."

Kansas City Gas Company has a franchise to supply gas to consumers of gas in Kansas City. By Sec. 10 of Ordinance No. 33887 (Kansas City Gas Franchise Ordinance), it is provided: "For the purpose of enforcing the provisions of this ordinance and securing the correct measurement of gas furnished under the same and proper pressure of said gas to produce the best obtainable results with the least consumption of gas, . . . the city shall have the right to provide, by ordinance, for the appointment of one or more inspectors or measurers of gas, and to prescribe their duties by ordinance, and to pass such ordinances as may be necessary to enforce the provisions of this ordinance. The city shall pay all costs and charges of such inspection and measurements, the same to be regulated and fixed by ordinance, including the salaries of said inspectors or measurers, and the grantees shall reimburse the city for all these charges, . . ."

By Sec. 100 of Ordinance No. 56134 (Revision of the General Ordinances of Kansas City), enacted August 20, 1928, it was provided, "Every person, company or corporation supplying gas to the city or its inhabitants, shall on or before the tenth of each month pay to the City Treasurer such sum of money as the city may have paid for...