# Kansas City v. City of Raytown

> Supreme Court of Missouri · November 27, 1967 · 421 S.W.2d 504

URL: https://www.frixlaw.com/law-library/cases/5032691

## Case

- **Full name:** KANSAS CITY, Missouri, a Municipal Corporation, Plaintiff-Respondent v. CITY OF RAYTOWN, Missouri, a Municipal Corporation
- **Court:** Supreme Court of Missouri
- **Decided:** November 27, 1967
- **Citations:** 421 S.W.2d 504; 1967 Mo. LEXIS 736
- **Precedential status:** Published
- **Opinion:** Dissent by Storckman
- **Judges:** Finch, Storckman, Who
- **Cited by:** 4 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/5032691

## Opinion text

Dissenting Opinion
STORCKMAN, Judge.
I agree with the majority opinion that the cooperation agreement does not create an indebtedness within the meaning of Art. 6, § 26(b) and (d) of the Constitution and, hence, it is not invalid for that reason. But I cannot agree that the contract was subsisting at the time of the October 5, 1965, bond issue election or, on the record before us, that the funds derived from the proceeds of the bond issue can properly be used to finance the sewerage system contemplated by the cooperative agreement,
My reasons for this are twofold. First, the facts stipulated by the record demonstrate that by its terms and the declared intention of the parties the agreement had been nullified prior to the October 5 election. Secondly, if on this record the contract is construed as being interminable then it would amount to an unwarranted surrender of municipal rights by the city council of Raytown not authorized by the cooperative statutes and in violation of other statutory and constitutional provisions.
The plaintiff Kansas City filed its declaratory judgment action on January 14, 1966, over a month after the defendant Raytown had presented to the Water Pollution Board, organized under Chapter 204, RSMo 1959, V.A.M.S., plans to construct a sewerage system apart from and to the exclusion of the city of Kansas City. This was more than three months after the October 5, 1965, bond election, and seven months after Raytown adopted a resolution declaring that the contract was terminated. Raytown filed its answer on March 16, 1966, together with its motion for a summary judgment. On April 1, 1966, Kansas City filed its reply and a motion for summary judgment. Both parties filed suggestions in support of their positions at the time they filed their motions. The case was under submission with the trial court for almost a year. On March 21, 1967, there was a conference at which the trial court orally expressed to counsel for the parties its views on various questions involved. More will be said of this later. The judgment with which we are concerned was entered on April 6, 1967, and the appeal was taken to this court on April 11, 1967.
As indicated above, both parties filed motions for summary judgment as well as their formal pleadings. While no evidence was adduced at the hearing on March 21, 1967, the record discloses that further stipulations as to the facts were made as follows:
“THE COURT: * * * I don’t believe that there is any real conflict as to the facts in this case. The pleadings, the attachments to the motion of defendant and the motion of plaintiff each for summary judgment, together seem to give the full story as fully and completely as might be revealed by adducing the evidence at length.
*515 “Now I will turn to each of you and see if the Court has been in any way mistaken in this. First, does plaintiff contest anything that is factually asserted by the defendants collectively, meaning, of course, the City of Raytown through its Mayor and councilmen ?
“MR. MASON: Your Honor, on behalf of Kansas City we concur with the Court that the documents and exhibits that are attached to the pleadings and the facts that are pled in the pleadings are ones on which there is no dispute.
“With, and I say this, with only the exception that I do believe that the importance or the materiality of the various and sundry facts alleged and set forth not only in the pleadings but in the exhibits, the degree with which those will determine the issues as a legal matter I believe varies.
“THE COURT: I had no thought of causing either of you to waive your position with respect to the relevancy of any of these materials.
“I see you nodding, Mr. Raymond. Does that express your views?
“MR. RAYMOND: He may not agree as to some conclusions I drew, and I may not agree with some of his conclusions, but the facts are not in dispute, as I see it.
“THE COURT: Very well, that enables us to dispose of it, I believe, as effectively at this stage as we would after an evi-dentiary hearing.” Italics added.
Exhibit D, attached to plaintiff’s petition, is a copy of a resolution by the Board of Aldermen of Raytown approved June IS, 196S, which declared that the cooperation agreement was “totally inoperative, rescinded, repealed, null, void, and for naught held.” The exhibit makes this recital: “WHEREAS, another Cooperative Agreement for Sewer Service was entered into by Raytown, Missouri, with Kansas City, Missouri, on or about February 3, 1965, pursuant to Ordinance No. 112, Section XXI-B-5 of the Compiled Ordinances of Raytown, adopted February 2, 1965; said agreement being contingent upon the successful passage of a Sewer Bond proposal by the qualified voters of Raytown not later than April 15, 1965.”
The trial court at the hearing on March 21, 1967, in referring to this statement in Exhibit D, said:
“THE COURT: * * * I don’t want to be too free in my assumptions here, but since neither plaintiff nor defendants have further referred to this I shall likewise ignore it, unless counsel has some different position in the matter.
“MR. RAYMOND: I know nothing about it, your Honor.
“THE COURT: Then we will treat it as being that we are only concerned with the agreement executed by Raytown on November 5th and by Kansas City on December 7, 1964.”
While I do not regard the supplemental agreement as vital to the decision of the case, it is a part of the “full story” and is the only rational explanation of the second submission of the proposal to the voters. The trial court was not justified in ignoring it regardless of the response of defendants’ counsel. If there was any doubt about it, the matter should have been clarified at that point since a summary judgment should not be rendered “unless the prevailing party is shown by unassailable proof to be entitled thereto as a matter of law.” S.Ct. Rule 74.04(h).
In a footnote, the majority opinion passes lightly over the provisions in Section II (e) of the contract that the construction schedules “are contingent upon the authorization of a bond issue by Raytown in amount sufficient to finance improvements-outlined in sub-sections (f) and (g) of this-section not later than December 15, 1964”. The opinion ignores this limitation on the theory that it was for “the benefit and protection of Kansas City” which was the only one that could complain and it had *516 not done so. This treatment of the matter overlooks the basic facts and is contrary to applicable law as we shall later demonstrate. The formal execution of the contract by Kansas City, although dated December 7, 1964, was made pursuant to a Kansas City ordinance approved and authenticated as passed on October 30, 1964. A copy of this Kansas City ordinance is attached as Exhibit A to plaintiff’s petition. The contract was executed on behalf of Raytown on November 5, 1964. Thus it was known by Raytown on November 5 that it would have to hold an election for the approval of the bond issue on or before December 15, 1964. There was sufficient time to give notice of the bond election after the legislative bodies of each city had approved the agreement. Why Kansas City delayed in signing is not disclosed; nevertheless, the court is not warranted in ignoring the undisputed facts. The date mentioned in the cooperative agreement for holding the election is important as it bears on the binding effect of the contract as well as the intention of the parties. We do not agree that this or any other deadline date can be treated only for the benefit of Kansas City. To hold otherwise would impose on Raytown the obligation to continue indefinitely and interminably to hold elections until a bond issue was approved. This would be adverse to public interests. 17A C.J.S. Contracts § 398, p. 478; Shikles v. City of Clinton, Mo.App., 319 S.W.2d 9 .
Appellate courts review court-tried cases on both the law and the evidence as in suits of an equitable nature. S.Ct. Rule 73.01(d) ; Needles v. Kansas City, Mo., 371 S.W.2d 300, 307 [10]. We must review the entire record and make our own conclusions on the facts. The record shows and the plaintiff does not deny that a supplemental agreement was made in February 1965 extending the cooperation agreement for a second submission of the proposal not later than April 15, 1965. We must accept this factual statement as true and give it the weight to which it is entitled.
Section 16, Art. 6, of the Constitution is a specific grant of authority for municipalities and political subdivisions to enter into cooperative agreements with each other in the manner provided by law. School District of Kansas City v. Kansas City, Mo., 382 S.W.2d 688, 696 [11]. However, contracts made by a municipal corporation when lawfully authorized are no different from other contracts in that they are measured by the same standards and are subject to the same rights and liabilities. Burger v. City of Springfield, Mo., 323 S.W.2d 777, 783 [2].
In this case, both of the contracting parties are municipal corporations and each has the advantages and disadvantages of the mandatory provisions of § 432.070, RSMo 1959, V.A.M.S., which requires that contracts of municipal corporations must be in writing; any term or condition not included in the written contract has no validity. Needles v. Kansas City, Mo., 371 S. W.2d 300, 306-307 [5-9]; Burger v. City of Springfield, Mo., 323 S.W.2d 777, 782-783 [1, 2]. In making the supplemental agreement, both parties recognized that unless an extension of time for performing the contingency was agreed upon and reduced to writing, § 432.070 would render the cooperation agreement invalid and unenforceable by or against either party. The construction that the parties place on their contract as evidenced by their acts and conduct prior to controversy is strong evidence of their real intention. See 7A Missouri Digest, Contracts
Furthermore, unless the dates of December 15, 1964, and April 15, 1965, are given significance, the contract would at all times have been for an indefinite period and could have been terminated at will by either party. Sharp v. W. & W. Trucking Company, Mo., 421 S.W.2d 213 (No. 52, 600, decided November 13, 1967); Superior Concrete Accessories v. Kemper, Mo., 284 S.W.2d 482 ; Paisley v. Lucas, 346 Mo. *517 827 , 143 S.W.2d 262 ; 17 Am.Jur.2d Contracts § 486, p. 956; 17A C.J.S. Contracts § 398, p. 478. Termination was accomplished, or confirmed, by the resolution of June 15, 1965, adopted by the defendant and served on the plaintiff.
If the duration of the obligation of Ray-town to submit the proposal was not limited in some manner, the contention of the defendants that the cooperative agreement created a present unconstitutional indebtedness would be more plausible. Furthermore, § 70.260 recognizes that the right of termination exists and permits specific terms and conditions with respect thereto to be put in the contract, but it requires the party cancelling the contract to compensate the other for any cost or expense incurred. The statute provides: “Such contract may include and specify terms and provisions relative to the termination or cancellation by ordinance, order or resolution, as the case may be, of such contract or cooperative action and the notice, if any, to be given of such cancellation, provided that such cancellation termination shall not relieve any party participating in such contract or cooperative action from any obligation or liability for its share of the cost or expense incurred prior to the effective date of any such cancellation.” Nonpayment of charges and violation of certain restrictions are specified in the contract as grounds for terminating the agreement, and the provisions for arbitration in Chapter 435, RSMo 1959, V.A.M.S., are to be applied. However, neither the constitution, the statutes, nor the contract precludes termination on other grounds available under the general law. The arbitration provisions cannot oust the courts of their jurisdiction. Section 435.010.
The constitutional provision, § 16 of Art. 6, does not purport to authorize the imposition of an obligation in perpetuity upon municipalities which enter into cooperation contracts and the general assembly could not legislate contrary to the specific grant of power. Furthermore, the municipal cooperation statutes recognize that such an agreement may be discontinued or terminated on an equitable basis even after it is in operation. I would hold that the cooperation agreement had expired by its own terms and that it was definitely terminated by the Raytown declaration and resolution adopted on June 15, 1965.
Regardless of the legal status of the cooperative contract on October 5, 1965, the bond issue, approved on that day can only be related to an intention on the part of the voters of Raytown to construct a sewerage system of their own, independently of Kansas City. There is nothing in the record especially after April 1965 which can logically be said to indicate an intention on the part of the Raytown Board of Aldermen or voters to use bond issue funds to finance a cooperative sewerage system. The evidence is all to the contrary. When a proposition to borrow money is submitted to the people, the object for which the money is to be appropriated is an integral part of the proposition and is necessary to make the proposition intelligible. State ex rel. School District of Memphis v. Gordon, 223 Mo. 1 , 122 S.W.2d 1008 , 1012 [5]. This case also holds that the vote of the people on such a proposition is in the nature of a legislative act or “a local act.” See also Carson v. Oxenhandler, Mo.App., 334 S.W.2d 394, 406 [11]. Its form and substance must comply with the usual legislative standards and be subject to the usual rules of construction. The purpose is to prevent unjust and unfair maneuvering to defraud the people and defeat their real intention. See also 21A Missouri Digest, Municipal Corporations,
A latent ambiguity exists where the words used in a written instrument or proposition are unambiguous on the face of it but apply equally to two different things or subject matters. 12A Missouri Digest, Evidence, In that event evidence is admissible to determine which was intended. City of St. Louis v. Pope, 344 Mo. 479 , 126 S.W.2d 1201, 1209 [2,3]. The rule of evidence is not important in *518 this case, however, since all of the facts are stipulated in the record and may be considered to the extent that they are relevant and material.
In this legal situation the essential question to be determined is whether the legislative intention was that the funds derived from the October 1965 bond issue should be used to construct an independent sewerage system or one jointly with Kansas City. Meyering v. Miller, 330 Mo. 885 , 51 S.W.2d 65, 68 [2]. There is nothing on the face of the propositions stated or ballots used at the three special elections to indicate which was intended or to disclose that there was more than one plan in existence. There is, however, a difference in the statement of the October 1965 proposition when compared with the two previous ones. The amounts in the first two propositions submitted were the same, a total of $2,766,000. The October 1965 approved bond issue was for $75,000 more, or a total of $2,841,000. Proposition One in the first two elections was stated to be “for the purpose of acquiring rights-of-way, constructing, extending and improving the sanitary sewerage system of said City, including constructing mains, force mains, lift station and interceptor lines.” In the third and successful submission, the inclusion in Proposition One was for “constructing collection mains and interceptor lines, relief sewers, outfall lines, force mains, lift stations, and lagoon expansion.” Thus, we see in the third submission the objects included were increased. Collection mains, relief sewers, outfall lines and lagoon expansion were added, and the lift station was made plural.
Other significant facts to be considered are these. There was no written extension of the cooperative agreement beyond April 15, 1965. On June 15, 1965, the Raytown Board of Aldermen adopted a resolution reciting thaat the bond issue had been submitted twice and failed of adoption, that recently Kansas City officials had stated that there was a valid, existing cooperative sewer service agreement, that the Board was seeking “to refute and still said statements”, and, therefore, the cooperative agreement, including all of its terms “are hereby expressly and specifically declared to be totally inoperative, rescinded, repealed, null, void, and for naught held.” The minutes of the regular meeting of the Raytown Board of Aldermen held August 3, 1965, show that the mayor of Raytown proposed that a bond election be held on October 5 or October 19, 1965, and recommended that they proceed on the basis of “building Raytown Sewers for Raytown”. Alderman White then moved that the City “go on its own”, and that an election on a $2,800,000 sewerage bond issue be held on October 5, 1965, that the City “proceed on basis of going alone and with the intent of putting in all sewers necessary to sewer the City of Raytown.” The motion carried by a vote of 8 to 1. In the newspaper, Raytown News, of August 5, 1965, there appears the headline “Sewers without K. C. is aim — vote Oct. 5”. The news article stated that the Board of Aldermen had determined to “go it alone” without Kansas City, that two previous propositions based on the tie-in with Kansas City were defeated. The news article also reports statements by the mayor and various members of the Board, all of whom expressed a preference to build an independent system, except the dissenting member of the Board who believed it would be cheaper to cooperate with Kansas City. At a meeting of the Board of Aldermen on August 12, 1965, a formal ordinance was adopted ordering the election on October 5, 1965, for the purpose of submitting to the qualified voters of Raytown the two propositions described above. The clerk was also directed to publish the required three weeks’ notice and the form of the official ballot was set out in the ordinance. The bond issue was approved by the required majority of the voters on October 5, and on December 3, 1965, Raytown presented to the Missouri Water Pollution Board a statement of policy and other information relating to the construction, operation, maintenance *519 and repairs of a sanitary sewerage system for the City of Raytown separately, apart from, and exclusive of Kansas City. Action on the application has been withheld on objection by Kansas City.
If anything is certain on this record, it is that the voters of Raytown by their vote of October 5 did not intend to implement the cooperative agreement with Kansas City. Every act subsequent to April 1965 showed a purpose to solve their sewerage problem by acting alone and independently of Kansas City. To hold that the funds must be appropriated to finance the cooperative agreement is a manifest distortion of the legislative intention of this “local act”. If the cooperative agreement were still in effect, it cannot be said that the voters approved a bond issue intended to fulfill the condition and contingency necessary to make the contract operative. The cooperative sewerage plan may very well be a better and more economical one, but this court has no jurisdiction to do the thinking for the people of Raytown and to order the Board of Aldermen to enter into contracts and make appropriations contrary to the intention of the voters clearly expressed in the manner provided by law.
In a more familiar and commonplace setting, the principles involved would be recognized and present no problem. Suppose two men in similar businesses needed additional warehouse facilities. Mr. A owned suitable land and Mr. B agreed to supply financing for the building but had to borrow the money; they would also share existing facilities. They entered into a tentative agreement on November 5, 1964, which was contingent on B borrowing the money by December 15,1964. On December 1, B’s banker turned him down. Thereafter, it was agreed that the time for B to make his loan would be extended to April 15, 1965. B did not get around to seeing his banker, however, until April 27, when he was again turned down. After that B decided to build his own warehouse and notified A that their cooperative plans were ended. Thereafter, B presented his independent plans to his banker who liked the new project and agreed to make the loan. A re-enters the picture and claims B and his banker must use the proceeds of the loan commitment to finance the cooperative warehouse. Obviously, the contract never became effective and A would have no standing in court.
I also disagree with the majority opinion in that it gratuitously undertakes to decide issues not made by the pleadings or presented or briefed either here or in the trial court such as adjudicating the validity of the bonds issued. Such generous and expansive treatment is unsound and dangerous to the parties and the law. In this case we have repeatedly been reminded that a solution of the sewerage problem in Raytown is urgent and this court has cooperated by advancing the case on the docket, but more is involved than rendering an expedient decision. It may be an unhappy precedent for years to come.
The basic element involved here is whether the voters of Raytown intended to approve a bond issue to implement the cooperative agreement which the contract recognizes as indispensable to its effectiveness. This is the decisive and controlling issue. Efforts have been made to patch up the record in other ways, but there is bound to be more evidence of the legislative intention than has been produced.
The cause should be remanded for a full hearing in view of legal and factual deficiencies disclosed especially since this is a summary judgment procedure. Otherwise, on the present record, I would declare the issues in favor of the defendants and against the plaintiff.
For the reasons stated, I respectfully dissent.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/5032691. Public record. Not legal advice.