New Franklin School District No. 28 v. Bates

225 S.W.2d 769, 359 Mo. 1202, 1950 Mo. LEXIS 556
CourtSupreme Court of Missouri
DecidedJanuary 9, 1950
DocketNo. 41308
StatusPublished
Cited by8 cases

This text of 225 S.W.2d 769 (New Franklin School District No. 28 v. Bates) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Franklin School District No. 28 v. Bates, 225 S.W.2d 769, 359 Mo. 1202, 1950 Mo. LEXIS 556 (Mo. 1950).

Opinion

DALTON, J.

This is an action for a declaratory judgment to determine the disposition of a particular fund in the custody and control of the defendants. The trial court entered a declaratory judgment to the effect that the fund constituted 1 ‘ a penalty, forfeiture and fine collected for the breach of the penal laws of this state”; that its disposition was controlled by the provisions of Sec. 7 of Art. IX of the Constitution of Missouri 1945; and that defendants were under a legal duty to pay the fund into -the State Public School Moneys Fund and to distribute it in accordance with the laws governing the distribution of that fund. Defendants have appealed.

The fund in question, amounting to $2,090,000.00, was paid to the clerk of this court by certain insurance companies pursuant to a judgment entered by this Court on December 30, 1946. State on inf. Taylor v. American Ins. Co. (En Banc), 355 Mo. 1053, 200 S. W. (2d) 1. The amount received was paid to- the State Treasurer on April 28, 1947, and was by him placed to the credit of the General Revenue Fund of the State of Missouri in accordance with an opinion furnished by the Attorney General.

[1207]*1207Appellants assign error on the court’s action' in overruling their motion to dismiss the petition and in holding the disposition of the fund is governed by Sec. 7 of Art. IX, supra. Appellants contend that the first amended petition on which the cause was tried failed to show that plaintiffs-respondents had an interest in and to the fund; and that the disposition of the fund is not controlled by either Sec. 3 or Sec. 7 of Art. IX, Constitution of Missouri, 1945. Both contentions are based upon appellants’ construction of Secs.' 3 and 7 of Art. IX, supra.

By their answer, appellants prayed the court to “order and adjudge that the fund in question is properly held by them for the benefit of the general revenue fund of the State of Missouri subject to- appropriation therefrom by the General Assembly for general- public uses. ’ ’ Appellants concede that ‘ ‘ this court should render a judgment declaratory of all questions raised in the trial court.” Tietjens v. City of St. Louis (En Banc), 359 Mo. 439, 222 S. W. (2d) 70.

Section 7 Art. IX, supra, in part, provides: “. . . 'All interest accruing from investment of the county school fund, the clear proceeds of all penalties, forfeitures and fines collécted hereafter for any breach of the penal laws of the State, the net proceeds from the sale of estrays, and all other moneys coming into said funds shall be distributed annually to the schools of the several counties according to law. ’ ’

Appellants contend that said provision merely directs the annual distribution of certain funds to the schools of the sevéral counties according to law; that the section is “ directed to the accumulation and handling of funds in the various counties and townships of the state ’ ’; that it does not relate to the public school funds of the state or to funds under the control of or handled by any state officer; that the “penalties, forfeitures and fines” referred to are those arising from “causes and actions directly and specifically localized within the several counties” and not to those of State-wide concern, such as are originated by the Attorney General in his capacity as representative of the State; and that the sum in question, even if a penalty, forfeiture and fine, was not collected for a breach of the penal laws of the State. In view of the conclusions we have reached, it will only be necessary to consider the last contention.

Respondents offered in evidence-the pleadings and judgment in the case of State on inf. Taylor v. American Tns. Co., supra, the cause in which the fund was collected. There is no dispute- as to the type and kind of action. It was in the nature of quo warranto and the issues presented clearly appear from the opening paragraphs of the opinion of this court. The court found that “the said- respondents, and each of them, did enter into a conspiracy to cheat and defraud their policyholders and the State of Missouri, and did bribe the Superintendent of Insurance of the State of Missouri to com[1208]*1208promise and settle certain litigation effecting insurance rates in Missouri, and to recover certain impounded funds in rate litigation and to approve a new schedule of insurance rates, all as charged in the information filed; (and) that said acts of the respondents as set out constitute an abuse and misuse of their corporate franchises to do business in this State.” It was considered and adjudged by the court that each of the respondents “for such abuse and misuse of [its] corporate franchise” should pay as a penalty a fine in the sum therein specified. (200 S. W. (2d) 1, 49 et seq.).

The action.was instituted by the Attorney General by virtue of his office, upon his own information, in the exercise of his common law powers. State on inf. Taylor v. American Ins. Co., supra; State ex inf. Walker v. Equitable Loan and Inv. Ass’n., 142 Mo. 325, 335-338, 41 S. W. 916; State ex inf. McAllister ex rel. Manion v. Albany Drainage Dist., 290 Mo. 33, 56, 234 S. W. 339. It was a civil suit, not a criminal proceeding. State on inf. Taylor v. American Ins. Co., supra (200 S. W. (2d) 1, 39); State ex rel. Atty. Gen. v. Vail, 53 Mo. 97, 107; State ex rel. Norton v. Lupton, 64 Mo. 415, 417; 44 Am. Jur. 92, Quo. Warranto, Sec. 7. The respondents therein-were not entitled to a jury trial. State on inf. McKittrick v. Williams, 346 Mo. 1003, 144 S. W. (2d) 98, 105. The statutes of limitation applicable to civil actions alone applied. State ex inf. Major v. Arkansas Lbr. Co., 260 Mo. 212, 293, 169 S. W. 145; State on inf. Taylor v. American Ins. Co., supra.

The action was essentially based upon a breach of the implied contract- of- each of the several respondent corporations with the State. The nature of the action- was fully discussed and determined in the opinion of this court and authorities were cited. State on inf. Taylor v. American Ins. Co., supra (200 S. W. (2d) 1, 38-42); State ex rel. Walker v. Equitable Loan and Inv. Ass’n., supra (142 Mo. 325, 336). In State ex inf. Hadley v. Delmar Jockey Club, 200 Mo. 34, 70, 98 S. W. 539, the court pointed out .that “these proceedings are no longer recognized as criminal proceedings and have not been so recognized since the early days of the common law, but we have continually imposed what are 'called fines, a term no doubt coming down from the time when the proceeding was looked upon as a criminal proceeding. . . . The gist of each (misuser and usurpation) in quo warranto is the willful violation of the rights of the State under the implied contract, and not the violation of some criminal law, for we do not try criminal cases and affix criminal punishments in quo warranto proceedings. ’ ’

In the case of State ex inf. Hadley v. Standard Oil Co., 218 Mo. 1, 353, 116 S. W. 902, the court said: “In other words, the laivs of the State authorize and direct the Attorney-General to institute civil proceedings - by information in the nature of quo warranto against .any corporation to annul its charter and forfeit its franchises when[1209]*1209ever it has by misuser, nonuser or usurpation of power so conducted itself as to violate the laws of its -being .or the criminal laws-of..the State.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Missouri Gaming Commission v. Missouri Veterans' Commission
951 S.W.2d 611 (Supreme Court of Missouri, 1997)
Reorganized School District No. 7 v. Douthit
799 S.W.2d 591 (Supreme Court of Missouri, 1990)
Opinion No. (1989)
Missouri Attorney General Reports, 1989
Opinion No. 123-81 (1981)
Missouri Attorney General Reports, 1981
Opinion No. 71-81 (1981)
Missouri Attorney General Reports, 1981
Jacobs v. Leggett
295 S.W.2d 825 (Supreme Court of Missouri, 1956)

Cite This Page — Counsel Stack

Bluebook (online)
225 S.W.2d 769, 359 Mo. 1202, 1950 Mo. LEXIS 556, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-franklin-school-district-no-28-v-bates-mo-1950.