author: STOULIG, Judge. REDMANN, Judge,

text:
    John T. D’ANTONI v. Edward EZZELL.
    No. 9227.
    Court of Appeal of Louisiana, Fourth Circuit.
    June 13, 1978.
    Cameron C. Gamble, New Orleans, for plaintiff-appellee.
    Stewart J. Kepper, Jr., New Orleans, for defendant-appellant.
    Before SAMUEL, REDMANN and STOULIG, JJ.
   STOULIG, Judge.

This is an appeal from a judgment awarding plaintiff John D’Antoni $17,200 plus interest and attorney fees in a suit on a promissory note. Defendant Edward Ezzell contends that plaintiff was not a holder in due course; therefore, the trial court erred in disallowing some and discrediting other testimony that would have supported a defense of failure of consideration.

The note in question is a bearer instrument dated March 17, 1969, payable on demand after date. Initially the note was given to E K C Marketing, Inc. (E K C), for a $10,000 loan received that date plus other sums the corporation had loaned prior to that time. E K C was a business venture that plaintiff, defendant, and one John See-ley incorporated in 1968 to sell vending machines. D’Antoni was to furnish the financing by either lending the corporation his personal funds or by guaranteeing the E K C bank loans. Ezzell was to sell the vending machines and Seeley was to do some sort of promotional work. By March 1969 Ezzell had borrowed substantial sums from the corporation, the largest single loan being $10,000 that was made the same day he signed the note. The note was given in exchange for the $10,000 advanced that day plus the other unpaid loans defendant previously had obtained from E K C.

On April 19, 1971, plaintiff and defendant, as directors and shareholders of E K C, agreed at a special meeting that the corporation would negotiate by delivery to the plaintiff the note and collateral mortgage of Edward Ezzell in satisfaction of the loans made by plaintiff toEKC (which the evidence established as being in excess of $20,000). At the same meeting D’Antoni turned over all of his stock in E K C to Ezzell.

Under R.S. 7:52, plaintiff undoubtedly is a holder in due course. It provides:

“A holder in due course is a holder who has taken the instrument under the following conditions:
(1) That it is complete and regular upon its face;
(2) That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact;
(3) That he took it in good faith and for value;
(4) That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.”-

The note, complete and regular on its face, was negotiated to plaintiff by delivery, and defendant’s testimony and also the exhibits establish D’Antoni gave value for the note. If there is any question of the good faith of plaintiff, the result reached by the trial court indicates that any factual dispute as to the good faith of D’Antoni was resolved in his favor.

Defendant also contends the note was held by plaintiff as a pledgee, but the record does not bear this out because the corporate minutes reflect authorization to transfer to D’Antoni the note at issue for a recited consideration. There is a notation that the bearer note at its inception was secured by the pledge of stock and a collateral mortgage note.

Even though R.S. 7:57 provides a holder in due course holds the instrument free from any defect of title and free from defenses, defendant was allowed considerable leeway in presenting evidence that he contends would support a failure of consideration. The evidence established there was an interrelationship between plaintiff, defendant and several corporations but none tended to establish defendant received no consideration for executing the note. In fact defendant himself ratified the transfer from EKCto plaintiff in his capacity as a shareholder and director.

For the reasons assigned, the judgment appealed from is affirmed.

AFFIRMED.

REDMANN, Judge,

concurring.

Plaintiff was the principal shareholder and the active manager of the business of the Corporation to which defendant gave the promissory note here sued on. Plaintiff was the human person who acted for the corporation on March 17, 1969 in making the $10,000 advance to defendant and in taking defendant’s $17,200 note. Plaintiff thus is not a holder in due course because he had all the knowledge that the corporation had. If any infirmity in the note exists, plaintiff is not a holder who “had no notice of any infirmity in the instrument”, La. R.S. 7:52 [N.I.L. § 52, then in force]; he had the “actual knowledge” required by R.S. 7:56 to constitute notice.

Plaintiff argues that the note never represented an indebtedness in that amount; that it and the collateral mortgage securing it were designed to protect him from other creditors. The corporate records, including the accountant’s financial report and the balance sheet as of May 31, 1969, establish that the corporation did not consider the $17,200 note an asset of the corporation. Instead, those summaries referred to “notes receivable” (actually, the sum of all items considered “loans”) in the total amount of $17,050 (of which only $16,550 was allegedly owed as of the date of the note, and of that $16,550 $1,050 does not purport to be loans in the corporate checkbook, and another $4,000 item is said by defendant not to be a loan). Whatever the purpose of the $17,200 note, it was not claimed as an asset by the corporation in its financial records.

Nevertheless, at the directors’ meeting of April 1971, defendant consented to the transfer by the corporation to plaintiff of his $17,200 note “in full payment” of the corporation’s “obligation” to plaintiff. The clear intent of that action, in which defendant joined, was to give plaintiff a $17,200 note, rather than merely to transfer to plaintiff the corporation’s claims against defendant for loans (by then, $21,050, of which some is disputed). That transaction may be assimilated to the issuance by the corporation, with defendant’s consent, of defendant’s note. The overall transaction included defendant’s becoming the sole shareholder in the corporation.

Although defendant pleaded failure of consideration, he did not establish it.

No reason appears that would justify refusing to give effect to the April 1971 transaction.

      . R.S. 7:57 provides: “A holder in due course holds the instrument free from any defect of title of prior parties, and free from defences available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon.”


source: Caselaw Access Project

author: GARSAUD, Judge.

license: Public Domain

text:
    FIRST NATIONAL MORTGAGE CORPORATION v. The MANHATTAN LIFE INSURANCE COMPANY.
    No. 9242.
    Court of Appeal of Louisiana, Fourth Circuit.
    June 13, 1978.

      Law Offices of Louis G. Dutel, Jr., Russell J. Nunez, Jr. and William J. Dutel, New Orleans, for plaintiff-appellant.
    Jones, Walker, Waechter, Poitevent, Carrere & Denegre, Herschel L. Abbott, Jr. and Robert B. Bieck, Jr., New Orleans, for defendant-appellee.
    Before SCHOTT, BEER and GARSAUD, JJ.
   GARSAUD, Judge.

This is an appeal from the maintaining of defendant’s exception of no cause of action. Plaintiff-appellant, First National Mortgage Corporation (FNMC) instituted suit to collect a termination fee of one percent of the outstanding loan portfolio services by plaintiff for defendant-appellee, Manhattan Life Insurance Company (Manhattan). Plaintiff’s petition alleged that such a termination fee was customary in the mortgage industry in Louisiana, although no mention of a termination fee was made in the servicing agreement between the parties. Defendant Manhattan, however, was given the unilateral right to terminate without cause upon ninety days’ written notice. Defendant argues that the servicing agreement was the complete contract between the parties, and thus that plaintiff had no cause of action for a termination fee not provided in the agreement.

Plaintiff-appellant FNMC is engaged in the business of mortgage banking, which involves making loans secured by mortgages, selling loans to institutional investors such as defendant Manhattan, and servicing the loans for the institutional investors. In furtherance of this purpose, in March 1965 FNMC entered into a servicing agreement with defendant Manhattan, under which FNMC would service loans sold to Manhattan for a fee to be agreed upon at the time the loan is placed with FNMC for servicing. The pertinent provisions of the servicing agreement are as follows:

“1. The Insurance Company plans to invest or already has invested in bonds, notes, mortgages and Deeds of Trust in the NEW ORLEANS & BATON ROUGE, LOUISIANA AND SOUTHERN MISSISSIPPI area. FIRST NATIONAL MORTGAGE CORPORATION is hereby appointed as Servicing Agent for all such securities received through it or placed with it by the Insurance Company for servicing.
“2. The Servicing Agent shall collect interest and principal payments as they accrue on the aforesaid securities and on or before the 20th of each month remit to the Insurance Company the sums collected, with a report of any arrearages. The Servicing Agent shall require payment of taxes by the owners and deposit in a trust fund in a bank account, not mingled with any funds of the Servicing Agent, all payments made by the owners on account of principal, interest, taxes and insurance. The said Servicing Agent will keep the Insurance Company advised as to the status of taxes on the properties securing said mortgage loans.
* * * * * *
“7. In consideration of such services, the Insurance Company will pay the Servicing Agent the servicing fee agreed upon at the time the security is placed with it for servicing, which the Servicing Agent may deduct from the interest on the loan, as and when it collects the same. The Servicing Agent, however, shall have ho direct or indirect interest in said loan.
“8. A breach by the Servicing Agent in the performance of this agreement in servicing any mortgage loans shall, at the option of the Insurance Company, terminate this agreement as to any and all mortgage loans then serviced hereunder, whereupon the rights and duties of the Servicing Agent, and its right to compensation hereunder shall immediately terminate and the Servicing Agent shall forthwith deliver to the Insurance Company a statement showing all payments by it collected pursuant hereto and a statement of all moneys held in trust by it for the payment of maintenance charges and other charges in respect to such mortgage loans, and shall immediately pay over to the Insurance Company all moneys so held.
“9. It is further understood and agreed that the Insurance Company may terminate this agreement at any time without cause, on 90 days’ written notice to the Servicing Agent, and the rights and duties of the Servicing Agent and its right to compensation hereunder shall terminate on the expiration of 90 days after the mailing to it of such notice and the Servicing Agent shall then deliver to the Insurance Company a statement showing all payments by it collected pursuant hereto, and a statement of all moneys held in trust by it for the payment of maintenance charges and other charges in respect to such mortgage loans and shall immediately pay over to the Insurance Company all the moneys so held.”

In resolving the question of whether the trial court erred in granting defendant’s exception of no cause of action, the following issues must be addressed: (1) whether the servicing agreement was void for error in the cause; and (2) whether the servicing agreement was a complete contract between FNMC and Manhattan, thus obviating the introduction of parol evidence to show custom and usage in the mortgage banking industry in order to recover a termination fee.

With respect to the question of error in the cause, the trial court was correct in sustaining an exception of no cause of action, as plaintiff petitioned for damages on the basis of this legal principle. Such a request is really inconsistent with the error-in-the-cause concept, as error in the motive or principal cause vitiates consent and invalidates the contract. La.Civ. Code Arts. 1823, 1825, and 1826; Marcello v. Bussiere, 284 So.2d 892 (La.1973); Cryer v. M & M Manufacturing Company, Inc., 273 So.2d 818 (La.1973). If the contract is null and void, the remedy is to rescind and to put the parties in the position in which they were prior to the attempted agreement. Thus, a request for damages based on this concept states no cause of action. Be that as it may, plaintiff nonetheless could not have amended under Article 934 of the Code of Civil Procedure to state a cause of action for rescission, as its argument for that remedy simply does not support a contention of error in the cause. It is based on the allegation that FNMC “took less on the sale with the understanding, and Manhattan was aware of this understanding, that it would receive a larger servicing fee over the life of the loan.” Whatever the understanding may have been, however, it was not written into the contract; rather, the contract gave to Manhattan the unilateral right to terminate the agreement without cause. The claimed error cannot be relied on to modify the clear language of the agreement, thus proscribing any viable amendment to the petition. Ardoin v. Central Louisiana Electric Company, Inc., 318 So.2d 5 (La.1975). As the court stated in Ardoin,

“Such a contention cannot stand in the face of the contract’s plain and unambiguous language. Nothing about the contract or, for that matter, the facts upon which it was based, indicates that there was error which would form the basis for avoiding the contract for lack of consent.
“A claimed error, as in the instant case, cannot have the effect of voiding a contract otherwise complete as to intent and purpose. Such a result impairs the sanctity of obligations and nullifies the effect of law to which they are entitled. . For when the intent of the parties is evident and lawful, no law can operate to enlarge or restrain that intent. . It follows from these principles that judges cannot refuse to apply the precise clauses of agreements legally formed even on the pretense of interpretation or equity. . . . ” (Citations omitted and emphasis added.] 318 So.2d at 8, 9.

Plaintiff next contends that the servicing agreement is not the complete contract between the parties, and thus that parol evidence of custom and usage in the industry is admissible. Specifically, plaintiff argues that because the servicing fee for each loan was to be determined at the time it was placed with the plaintiff for servicing, the Mortgage Loan Submission Form and the Mortgage Loan Approval Form, completed for each loan, constituted the completed contract. In addition, the contentions are that the servicing agreement is not a complete and valid contract because (1) it does not obligate the appellant to sell any fixed amount of loans to the appellee; (2) it does not obligate the appellee to purchase any loans whatsoever from the appellant; and (3) it does not fix any ascertainable terms for loans to be purchased. Thus, FNMC contends that as a contract the servicing agreement fails to meet the specificity requirements of Article 1886 of the Civil Code.

These arguments, however, overlook the basic purpose of the servicing agreement, which is to establish a relationship between FNMC and Manhattan to govern all loans to be sold and serviced between the parties. The arrangement was within the scope of Article 1771 of the Civil Code, with the servicing agreement constituting the principal contract, and each mortgage loan agreement being an accessory contract, which in no way reduced the completeness of the principal servicing agreement. Each mortgage loan agreement was executed pursuant to the terms of the servicing agreement. Thus, it can be said that there existed numerous contracts between the parties, consisting of both the principal servicing agreement and all of the separate mortgage loan agreements. None, however, provided for any termination fee, nor was there any allegation that either type of contract (the principal contract or the accessory contracts) contained such a termination fee. Consequently, custom and usage cannot be used to modify or complete the agreement. Civil Code Article 1963 states,

“When the intent of the parties is evident and lawful, neither equity nor usage can be resorted to, in order to enlarge or restrain that intent, nor can any law operate to that effect, unless it be some prohibition or other provision, which the parties had no right to modify or renounce.”

The intent is evident because the words are clear: “[T]he rights and duties of the Servicing Agent and its right to compensation hereunder shall terminate on the expiration of 90 days after the mailing to it of such notice . . ..” As this contract (the principal servicing agreement), then, is not ambiguous or incomplete, custom and usage will not be imported into it. Cf. Southern Bitulithic Co. v. Algiers Ry. & Lighting Co., 130 La. 830, 58 So. 588 (1912); Fee v. Vancouver Plywood Co., Inc., 331 So.2d 151 (La.App.3rd Cir. 1976). As the four corners of this instrument govern the relationship between the parties, and such instrument does not provide for a termination fee, the district court was correct in sustaining the exception of no cause of action.

Accordingly, the decision of the trial court is hereby affirmed.

AFFIRMED.


author: BOUTALL, Judge.

text:
    SENTRY INSURANCE COMPANY and Ruth Mattes and/or Ethel Adams v. Steven G. THOMAS.
    No. 9300.
    Court of Appeal of Louisiana, Fourth Circuit.
    June 13, 1978.

      Dan R. Dorsey, River Ridge, counsel for Sentry Ins. Co., et ais., plaintiffs-appellants.
    Daniel S. Foley, New Orleans, counsel for Steven G. Thomas, defendant-appellee.
    Before REDMANN, LEMMON and BOUTALL, JJ.
   BOUTALL, Judge.

Plaintiffs, an automobile driver, a guest passenger, and their insurer, appeal from a judgment dismissing their suit for personal injuries and damages on the basis that the defendant driver was not negligent.

This case arose from a rear-end automobile collision on River Road (La. 611-1) near its intersection with Coolidge Street in the Parish of Jefferson. Plaintiff Ruth Mattes had stopped her vehicle in response to the red traffic control signal behind four or five other automobiles, when her vehicle was struck from the rear without warning by a car driven by Steven G. Thomas proceeding in the same direction. Thomas sought to excuse himself from liability on the ground that his brakes failed without warning and he could not avoid the collision. The damages are stipulated.

Louisiana courts have recognized a jurisprudential rule that in order for latent defects to constitute a valid defense, the proof must be so strong that it excludes any other reasonable hypothesis with reference to the cause of accident except that it resulted solely from the alleged defects, and that it must establish that the driver was not aware of the defects and that the defects could not reasonably have been discovered and remedied by a proper inspection. See Metzger v. Scott, 224 So.2d 671 (La.App. 4th Cir. 1971); Davis v. Logarbo, 346 So.2d 306 (La.App. 4th Cir. 1977). The defendant in this case has not borne the heavy burden thus imposed upon him, and we conclude the trial judge erred by not imposing this heavy burden under the facts herein.

The defendant driver testified that he was going approximately 30 to 35 miles per hour when he first saw the vehicles stopped at the red light, at a distance of 100 feet. When 75 to 80 feet away he took his foot from the accelerator and pressed his brake pedal completely to the floor board without effect. He then began pumping his brakes and looking to the right and left to see if he could avoid collision, and slowed down to approximately 20 miles per hour before he collided straight into the back of the plaintiff vehicle. He testified that he did not think of using his emergency brakes until he was just prior to collision point. He could not turn left in the other lane because of approaching vehicles and could not turn right because there were fences and houses to the right. The trial court found that the defendant’s choice of action was not unreasonable in that the accident was unavoidable. Additionally, the court concluded that a picture of the scene did not reveal a fence but did reveal a hedgerow fairly close to the paved portion of the highway on defendant’s right, and since it could not be determined whether there were other obstructions, accorded defendant’s testimony full weight. Ordinarily, in a case where a driver is confronted with an emergency not of his own making, we would agree with the conclusions of the trial court. But the defendant in this case has the very heavy burden imposed upon him of exculpating himself from his own situation under the rule referred to above, and these conclusions are unwarranted under that rule of law.

In a number of cases we have announced that the failure of a motorist to use his emergency brake constitutes negligence and cause of the accident, if there is a reasonable opportunity to do so effectively after the ordinary foot brakes fail. Metzger v. Scott, supra; Davis v. Logarbo, supra; Sers v. South Central Bell Telephone Company, 304 So.2d 760 (La.App. 3rd Cir. 1974). Additionally we point out that there appears to be sufficient room for the defendant driver to have avoided collision by swerving towards the hedgerow, and that any doubt that the trial judge had as to whether the way was clear should have been resolved against the defendant, not in his favor. See for example Simon v. Ford Motor Company, 282 So.2d 126 (La.1973). We also note, consistent with that case, that the defective parts involved here, and indeed the entire car, were disposed of by the defendant and not available for any examination of plaintiff.

Although we have decided this matter on the facts with the application of the existing jurisprudential rule, we believe that a case such as this should properly be decided under the provisions of Louisiana Civil Code, Article 2317:

“Art. 2317 Acts of others and of things in custody.
Art. 2317. We are responsible, not only for the damage occasioned by our own act, but for that whieh is caused by the act of persons for whom we are answerable, or of the things which we have in our custody. This, however, is to be understood with the following modifications.”

We recognize that our courts have struggled with this problem in the cited cases, as well as many others mentioned therein. In the recent case of Baumgartner v. State Farm Mutual Automobile Insurance Company, 356 So.2d 400 (La.1978), in discussing the relative duty of automobile drivers and pedestrians, the Supreme Court stated at page 405:

“That is, the operator of a dangerous instrumentality, such as a motor vehicle, creates a great risk of injury to the life and limb of others. Thus he owes a duty to the public to protect it from that danger.”

We perceive no difference between the defect in the braking system of this automobile and the internal disease defect in the fallen tree in the case of Loescher v. Parr, 324 So.2d 441 (La.1975). However, we do not discuss this matter because of our factual resolution of the case stated above.

For the reasons assigned, the judgment appealed from is set aside and reversed, and there is now judgment in favor of Sentry Insurance Company against Steven G. Thomas in the sum of $5,392.99, and judgment in favor of Ruth Mattes in the sum of $100.00 against Steven G. Thomas, together with legal interest on both sums from date of judicial demand until paid, and for all costs of these proceedings.

REVERSED AND RENDERED.


author: DeSONIER, Judge.

text:
    SOUTH CENTRAL BELL TELEPHONE COMPANY v. Joseph BRANCH, Gladys Trepagnier and Gerald Armstrong.
    No. 9034.
    Court of Appeal of Louisiana, Fourth Circuit.
    June 14, 1978.

      Jones, Walker, Waechter, Poitevent, Carrere & Denegre, Thomas M. Nosewicz, New Orleans, for plaintiff-defendant in re-convention-appellant.
    Orlando G. Bendana and Wayne H. Carlton, Jr., New Orleans, for defendants-plaintiffs in reconvention-appellees.
    Before REDMANN, GARSAUD and De-SONIER, JJ.
   DeSONIER, Judge.

South Central Bell Telephone Company and their employee appeal as to quantum from a judgment rendered against them for personal injuries, medical expenses and loss of earnings by three defendants.

Judgment was rendered as follows:

GLADYS TREPAGNIER
General damages_$2,250.00
Dr. Reyes_ 126.00
X-rays_ 186.00
Therapy_ 525.00
Drugs_ 8.73
Diminished earning capacity_ 200,00
TOTAL_$3,290.73
GERALD ARMSTRONG
General damages_$1,500.00
Dr. Reyes _ 109.00
X-rays_ 146.00
Therapy (through May 5th)_ 300.00
Diminished earning capacity (3 months at $500.00)_ 1,500.00
TOTAL_$3,555.00
JOSEPH BRANCH
General damages_$1,500.00
Dr. Reyes_ 109.00
X-rays_ 164.00
Therapy_ 525.00
Diminished earning capacity_ 750.00
TOTAL_$3,048.00.

Appellants contend the awards for personal injuries and the charges for physical therapy are excessive, and the awards for diminished earning capacity are unwarranted.

Following the accident of March 12,1976, Ms. Trepagnier consulted Dr. Raul G. Reyes. She was seen by him on March 17, June 11 and 18, for injuries to the neck, head and back, and discharged on June 25, 1976. Treatment consisted of medication and physical therapy. She was examined on May 18, 1976 by Dr. Harold G. Stokes, a defendant orthopedic specialist. He concluded she may have sustained cervical and lumbar spine strains as a result of the accident, although he found “no evidence of nerve root compression or irritation and no mechanical basis for continued pain” (as to any of the three defendants).

Over a three-month, six-day period she received thirty-five physical therapy treatments, at $15 per treatment. Dr. Reyes advised Ms. Trepagnier to check with him every two weeks to determine her progress but, after the first visit, she did not return for over twelve weeks, during which time she continued physical therapy. The doctor did not approve of this and apparently did not know she was receiving therapy over the entire period. He strongly disapproved of such treatment without consultation with him every two weeks. There is evidence that although physical therapy may be beneficial for three or four weeks, after that period it could have a detrimental effect. In view of such testimony, we believe the award for physical therapy should be reduced from $525 to the sum of $105 for the first two weeks of therapy.

The $2,250 award for general damages is within the trial judge’s “much discretion”, Civil Code Art. 1934(3), for cervical and lumbar strain of over three-months duration.

As to the award for diminished earning capacity, Ms. Trepagnier had just been employed the day of the accident as a substitute teacher. She earns $22 per day. The accident occurred on a Friday as she was returning from the school board offices. She had been advised to phone the office Sunday to determine what school to report to on Monday. She did not work until Friday of the following week because of the accident. At the end of that time she went back to work. She missed additional time during the period she was under the doctor’s care, but was not sure how much, although she thought it was about three weeks. Dr. Reyes stated Ms. Trepag-nier’s symptoms were such that she could have remained out of work the entire six-week period.

Defendants’ position is that she was only a substitute teacher and therefore did not work steadily. In our opinion the award of $200 takes this into consideration and is not excessive or unreasonable under all of the circumstances.

Gerald Armstrong was treated by Dr. Reyes for neck and back strain on March 17, April 2 and 9, 1976. An emotional overlay interfered with treatment. Although he was not discharged, he discontinued visits to Dr. Reyes but continued with physical therapy, receiving twenty additional treatments after April 9, until September 20, 1976. Dr. Reyes did not approve and strongly opposed therapy without medical supervision. Dr. Stokes examined Armstrong on May 8, 1976 and Armstrong was seen by Dr. Hoerner, an orthopedic surgeon on October 27, 1976. Dr. Stokes again conceded that Armstrong may have sustained cervical and lumbar strain as a result of the accident. We find the trial court award of $1,500 is within its sound discretion.

The award for physical therapy does not condemn appellant to pay for the excessive treatment plaintiff received until September 20, 1976. It is clear from the judgment that the charges intended to be approved by the court are for therapy only until May 5, 1976, for which the actual total is $240. However, on April 9, Dr. Reyes told Armstrong to return in one week (which he did not do), and the patient should not recover for his self-prescribed therapy after that week ending April 16, at which time total charges were only $120.

Evidence relative to Armstrong’s earning capacity is that he was enrolled in a four-year-trainee program at Delgado College, working for Fischback & Moore as an electrical apprentice and attending college two nights per week. He received wages of $4.37 per hour for 40 hours per week. Armstrong had enrolled in the program in March, 1975, flunked the first term, repeated and passed, and failed the second term.

After January 27, 1976, six weeks before the accident, he did not report for work for reasons unexplained, and never again returned to electrical work. He missed four nights of school, of which two (March 15 and 17) were near the time of the accident. He was dropped from the program for non-progression on June 8, 1976.

Since there is nothing in the record to indicate the accident was the cause of Armstrong’s leaving the employ of the electrical firm, and since it is established that he accepted employment elsewhere (at a gift shop) by April 2, 1976, we find insufficient proof in the record to sustain an award for diminished earning capacity.

The trial court award for diminution of earning capacity is based on the theory that an unemployed injured party should receive an award for loss of capacity to earn, and that the time belonged to the injured party, who has a right to work and earn money. We agree that a person who regularly works, but who happens to be unemployed at the time of a disabling accident, suffers a loss of, and is entitled to special damages for, the wages he would probably have earned but for the accident. It is, however, the plaintiff’s burden to prove what his probable earnings would have been, and Armstrong did not prove any probable earnings. The law in this state is that where a tort victim has been unable to offer proof of lost wages, he cannot recover therefor.

In the instant case the reason Armstrong chose not to work had nothing to do with the accident, and we find no basis for recovery. Thus, we disallow the award of $1,500 for three months loss of earning capacity.

Joseph Branch was treated by Dr. Reyes for injuries to the neck, back, arm and shoulder. He was examined on March 17, July 11, and discharged July 23, 1976. He was examined by Dr. Stokes on April 28, 1976. Dr. Stokes once again agreed that Branch may have sustained cervical and dorsal spine strain and contusion to the right elbow as a result of the accident, but that he could work in an unrestricted manner, and there were no objective findings.

The award of $1,500 for general damages is within the trial court’s “much discretion”, C.C. Art. 1934 (3).

Concerning the physical therapy, Branch received therapy from March 18 through July 1, 1976. We conclude Dr. Reyes advised therapy, but expected Branch to be examined by him every two weeks. Dr. Reyes does not approve of therapy for extensive periods without periodic examinations by the physician. Consequently, it appears that the prolonged therapy was not approved by the doctor. We are thus of the opinion that Branch is not entitled to recover for the full charges for therapy treatment from the tort-feasors. We reduce the therapy award from the sum of $525 to the sum of $105 for the first two weeks.

Nor do we agree with the award of $750 to Branch for diminution of earning capacity. Branch was unemployed at the time of the accident. He had been fired from his job as supervisor of a crew cleaning job sites at a federally funded program for people who were otherwise unemployed, for gambling on the job. He was terminated following his arrest on February 27, 1976, several weeks before the accident. He moved to Georgia where he went to work as a barber.

We find insufficient proof in the record to sustain an award for diminution of earning power, and accordingly disallow the $750 award to Mr. Branch for that item.

For the reasons assigned, the judgment appealed from is amended to reduce the total amount' of the award to Gladys Tre-pagnier from the sum of $3,290.73 to the sum of $2,875.73; to reduce the award to Gerald Armstrong from the sum of $3,555 to the sum of $1,875; and to reduce the total amount of the award to Joseph Branch from the sum of $3,048 to the sum of $1,878. As thus amended, the judgment appealed from is affirmed.

AMENDED AND AFFIRMED.

      . South Central Bell instituted the suit against three defendants to compel them to submit to a physical examination for injuries allegedly received when a South Central Bell truck, driven by its employee, David Johnson, “rear-ended” a Volkswagen in which defendants were riding. Defendants answered and reconvened for damages for personal injuries against South Central Bell and the driver, Johnson.

      . 22 Am.Jur.2d, § 100.

      . Plescia v. Dunham, La.App., 319 So.2d 812; Reed v. Great American Insurance Company, La.App, 242 So.2d 6.


author: PER CURIAM.

text:
    Lawrence JOHNSON v. Robert L. COPPAGE, Individually and d/b/a Robert Coppage Real Estate.
    No. 9652.
    Court of Appeal of Louisiana, Fourth Circuit.
    June 15, 1978.
    Coleman, Dutrey, Thomson, Meyer & Ju-risich, Jack W. Thomson, New Orleans, for relator.
    Sherman F. Raphael, New Orleans, for respondent.
    Before REDMANN, LEMMON and BOUTALL, JJ.
   PER CURIAM.

Defendant employer filed a motion to require plaintiff, a workmen’s compensation claimant, to submit to a medical examination by a specified doctor. Plaintiff, who was being treated by a doctor of his choosing, agreed to the examination, but objected to the particular doctor on the basis that this was a “defendant’s doctor”. The trial court declined to order the examination, indicating it would appoint a doctor to perform the examination if the parties could not agree.

R.S. 23:1121 obliges an employee seeking compensation to submit himself to a reasonable medical examination by a doctor “provided and paid for by the employer, as soon after the accident as demanded”. We interpret the statute to grant the employer, who has the statutory right to “demand” an examination of the employee by a doctor “provided and paid for by the employer”, the right to select the doctor he provides and pays for.

Conceivably, exceptional circumstances may be shown to warrant an exception to this rule. However, the fact that a defendant selects a physician regarded by some as conservative or defense oriented is not a proper basis for denying the requested examination.

Accordingly, it is ordered that the trial court set aside its judgment denying the motion to require a medical examination and enter a judgment granting the motion.

WRIT GRANTED, MEDICAL EXAMINATION ORDERED.

      . If a conflict in medical evidence develops, the court, on application of either party (or presumably on its own motion under the proper circumstances), can order an examination by a physician appointed by the court,


text:
    Thomas E. TEMPLETON v. Charles A. HUBBARD.
    No. 50411.
    Supreme Court of Mississippi.
    June 21, 1978.
    Rehearing Denied July 19, 1978.
    Eaves & Eaves, John Arthur Eaves, Jackson, for appellant.
    Joe G. Moss, Raymond, Joe B. Moss, Jackson, for appellee.
    Before ROBERTSON, P. J., and SUGG and BROOM, JJ.
   AFFIRMED.


author: JONES, Justice.

text:
    Damon DENNIS, Jr. v. Annetta Renee SCARBOROUGH.
    SC 2593.
    Supreme Court of Alabama.
    April 28, 1978.
    Rehearing Denied June 30, 1978.
    Reggie H. Stephens, Mobile, for appellant.
    Michael Gillion and Philip H. Partridge, Mobile, for appellee.
   JONES, Justice.

This case raises an evidentiary question presented at trial: The admissibility of a portion of a police officer’s accident report which was allegedly admissible under the “past recollection recorded” exception to the hearsay rule. The trial Court ruled against admissibility. We reverse and remand.

On March 11, 1976, the Plaintiff-Appellant, Damon Dennis, Jr., was involved in an automobile accident with Appellee, Annetta Renee Scarborough, at the intersection of University and Airport Boulevards in Mobile. Dennis brought suit seeking recovery for personal injuries which he allegedly sustained from the collision.

At trial, Dennis sought to introduce part of the accident report of John W. Berkey, the investigating police officer. Dennis attempted to introduce only that portion of the report which allegedly recorded an admission made to Berkey by the Defendant. Berkey stated that he was not present when the collision occurred and, at trial, did not remember anything of his alleged interview with Scarborough. He did, however, recognize his signature and handwriting on the report. The trial Judge refused to permit the report to be introduced into evidence as a record of Berkey’s past knowledge. It is this ruling upon which this appeal is primarily founded.

Dennis’ primary argument concerns the admissibility of the report containing statements allegedly made to, and recorded by, Officer Berkey. We are not presented with a question relating to refreshing the witness’ present recollection. Instead, the witness stated that he had no present recollection of the event and must rely upon the report, and the facts stated therein, for his present testimony.

Ordinarily, the reports of investigating officers are not admissible in evidence. Nettles v. Bishop, 289 Ala. 100, 266 So.2d 260 (1972); and Vest v. Gay, 275 Ala. 286, 154 So.2d 297 (1963). See also § 32-10-11, Ala.Code 1975. They are deemed hearsay and do not fall within the “business records” exception to that exclusionary rule. Pike Taxi Co. v. Patterson, 258 Ala. 508, 63 So.2d 599 (1952). Therefore, to be admissible, that portion of the report sought to be introduced must come within the ambit of some other exception to the hearsay rule.

The exception attempted to be utilized here is that of “past recollection recorded.” The leading Alabama authority dealing with this subject is Acklen’s Executor v. Hickman, 63 Ala. 494 (1879). Our oft-quoted rule, as stated therein, provides:

“The law recognizes the right of a witness to consult memoranda in aid of his recollection, under two conditions:
“In the second class are embraced cases in which the witness, after examining the memorandum, cannot testify to an existing knowledge of the fact, independent of the memorandum. In other words, cases in which the memorandum failed to refresh and revive the recollection, and thus constitute it present knowledge. If the evidence of knowledge proceed no further than this, neither the memorandum, nor the testimony of the witness can go before the jury. If, however, the witness go further, and testify that, at or about the time the memorandum was made, he knew its contents, and knew them to be true, this legalizes and lets in both the testimony of the witness and the memorandum. The two are the equivalent of a present, positive statement of the witness affirming the truth of the contents of the memorandum . . . .” 63 Ala., at 498.

Stated otherwise, there are three requirements before a memorandum may be admitted into evidence under this exception. The witness must testify that he presently knows (or testifies to facts showing that he presently knows):

“(1) That he personally observed the event or facts referred to in the writing and that the writing was made or seen by the witness either contemporaneously with the event or when his recollection of the event was fairly fresh.
“(2) That he then knew the contents of the writing and knew such contents to be true and correct.
“Where the witness testifies that the writing is in his own handwriting, he may testify further that he knows from his general practice in making writings of that kind that what he wrote was true.
“(3) That he has no present recollection of the event other than his testimony to the matters stated in 1 and 2 above.” McElroy’s Alabama Evidence, § 116.03.

As stated above, the witness may recognize his own handwriting and affirmatively state that the contents of the document must be true because he would not have recorded them otherwise. See also Williams v. Riddlesperger, 227 Ala. 113, 148 So. 803 (1933). Berkey substantially stated this very fact. Furthermore, he indicated that the statement was made to him by the Defendant, Scarborough. Although Berkey had no present recollection of the event, he testified that he made the recording at the time of his investigation and that, at that time, he must have known the recording’s veracity (though not whether the statement itself was accurate) because he otherwise would not have written them down. Therefore, the predicate laid was sufficient.

A more precise predicate, perhaps, would be more proper. The witness’ habits and past knowledge, however, go toward the weight of his testimony, not its admissibility. To hold otherwise would unduly restrict the applicable rule of evidence.

Thus viewed, a second application of the hearsay rule becomes pertinent; i. e., whether the Defendant’s out-of-court statement may be introduced into evidence. It appears from the circumstances of this case that the statement constitutes an admission by the party Defendant and, as such, is admissible evidence of her negligence. McElroy’s Alabama Evidence, § 180.01. Of course, upon remand and retrial, the full circumstances of this admission may be elicited and, if possible, explained.

The judgment of the trial Court is reversed and the cause is remanded.

REVERSED AND REMANDED.

TORBERT, C. J, and MADDOX, SHORES and BEATTY, JJ., concur.


text:
    SECURITY INSURANCE COMPANY OF HARTFORD v. Solomon SMITH, Jr., Shell Oil Company, Inc., E. J. Allred, E. J. Allred d/b/a Jack’s Shell Truck Stop, Bert Morgan and J. D. Morgan d/b/a Morgan Oil Company.
    SC 2821.
    Supreme Court of Alabama.
    April 28, 1978.
    Rehearing Denied June 30, 1978.

      Larry W. Harper of Dunn, Porterfield, Scholl & Clark, Birmingham, for appellant.
    Samuel Maples, Birmingham, for appel-lee, E. J. Allred d/b/a Jack’s Truck Stop.
   JONES, Justice.

This appeal is from a declaratory judgment holding that Appellant, Security Insurance Company of Hartford, did not effectively cancel its insurance policy covering Appellee, Jack’s Truck Stop. We reverse and remand.

On June 29, 1973, E. J. Allred, Appellee-Owner of Jack’s Truck Stop, applied for a garage liability insurance policy with Security through the Jean Deese Agency, Inc., Security’s authorized agent. Several years prior to the date of application, though the physical location remained the same, the address of the truck stop was changed from Route 1 (Access Highway 65 and Alabama 69), Cullman, Alabama, to Route 12, Box 151, Cullman, Alabama 35055. The application, however, was completed and submitted with the former address, and this former address appeared on the declaration page of the issued policy. Subsequent to this time, the policy was amended so as to cover five vehicles owned by Allred.

During the life of the policy, various items of correspondence were mailed from both Security and Deese to Allred at the new address. Moreover, Allred’s checks, letters and envelopes all reflected this new address. Allred, however, never requested a change of the listed address in his policy.

Security decided to cancel the policy and, pursuant to the cancellation provision of the policy, mailed notification to this effect to Allred seventeen days prior to the effective date of cancellation — March 13, 1976. This notification was mailed to the address listed in the policy, but Allred testified he never received it. The policy provided, inter alia:

. This policy may be cancelled by the company by mailing to the named insured at the address shown in this policy, written notice stating when not less than 10 days thereafter such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice. The time of surrender or the effective date and hour of cancellation stated in the notice shall become the end of the policy . . ..”

On March 14, 1976, Solomon Smith was allegedly injured in a fire at Jack’s Truck Stop. It was only when Allred sought coverage under the policy that he learned of its cancellation. This suit to determine the effectiveness of the above-mentioned cancellation followed.

At trial, Security offered proof that it properly mailed the cancellation notice. Allred, however, contends the notice was mailed to an incorrect address (as his address had changed to Route 12, Box 151, Cullman) and that Security knew of this change. Thus, he contends, it is incumbent upon Security to prove his actual receipt of the cancellation 'notification.

Testimony of Allred shows he received mail addressed to any one of six different addresses — including both the new address and the address stated in the policy. He contended, however, that his “correct” one is the new “Route 12, Box 151,” address. The trial Court held that the policy had been mailed, but that it was mailed to an “ineorrect” address. Furthermore, the Court held that § 27-23-23, Code (1975), applied to this case and required notice of cancellation to be mailed 20 days before its effective date. Therefore, the cancellation was held ineffective.

It is well settled that an insurer setting up cancellation as a defense on a policy has the burden of proving by clear and convincing evidence that the notice of cancellation was properly mailed to the insured. Harrell v. Alabama Farm Bureau Mutual Casualty Insurance Co., 287 Ala. 259, 251 So.2d 220 (1971); United States Fidelity and Guaranty Co. v. Williams, 43 Ala.App. 205, 186 So.2d 738 (1966). Ordinarily, proof of actual receipt of such notice by the insured is not required. Harrell, supra. This is founded upon the presumption that a letter properly addressed with sufficient postage, and unreturned to the sender whose address is shown on the envelope, was received by the addressee. Harrell, supra; and Franklin Life Insurance Co. v. Brantley, 231 Ala. 554, 165 So. 834 (1936). If the letter is not received by the insured, however, it becomes a question of fact as to whether the notice was properly mailed. Harrell, supra.

In the case before us, the undisputed evidence shows that the cancellation notification was mailed to the address listed in the policy. The trial Court found that the letter was mailed, but held that such mailing was improper because it was sent to an “incorrect” address (the former address of Jack’s Truck Stop — Route 1 (Access Highway 65 and Alabama 69), Cullman, Alabama). Thus, the question before us is not whether the notice was mailed. Instead, it is whether the insurer properly mailed the notice when it sent the letter to the address shown on the policy, even though another address for Jack’s Truck Stop was known by the insurer. If Security mailed the notice to an “incorrect” address, the termination would be ineffective unless Security further proved actual receipt of the cancellation notification by Allred.

From the evidence presented, we cannot agree with the trial Court’s determination that the address to which the letter was mailed was “incorrect,” nor with its assertion that receipt was required and that § 27-23-23, Code (1975), applies to this case. Furthermore, we are not bound by that Court’s findings because our ore tenus rule of review does not obtain where, as here, the trial Court misapplied the law to undisputed facts. Dixie Auto Insurance Co. v. Lee, 288 Ala. 185, 258 So.2d 892 (1972); and City Stores Co. v. Williams, 287 Ala. 385, 252 So.2d 45 (1971).

As stated above, Allred testified that he received mail addressed in at least six different ways. Though the “Route 1” address may have been changed, Allred admitted he still received mail addressed in this manner. The “Route 12, Box 151,” address, through perhaps more proper, was but one of Allred’s mailing addresses. Security had knowledge of this new address, but this knowledge was only to the effect that Allred had another address — not that his correct address had changed and that the address on the policy was no longer effective. Moreover, in the several years in which the policy was in effect, Allred never sought to change the address stated in his policy.

Ordinarily, an insurer is justified in relying upon the address stated in an insurance policy. See 45 C.J.S. Insurance § 450. The law does not impose a burden upon the insurer to investigate and determine which, of several addresses an insured may utilize, is his “correct” address. See Gendron v. Calvert Fire Insurance Co., 47 N.M. 348, 143 P.2d 462 (1943). Had Security mailed the notice to the “Route 12, Box 151,” address, Allred could contend it had not complied with the terms of the policy. See Mutual Life Industrial Ass’n v. Scott, 170 Ala. 420, 54 So. 182 (1911). Certainly the law will not tolerate such a game of musical chairs. Though a party may have several addresses at which he receives mail, for purposes of cancellation of an insurance policy, only one address can be considered “correct.” That address is the address listed on the policy unless the insured notifies the insurer of a change of address, or unless knowledge of such change is attributed to the insurer. 43 Am.Jur.2d, Insurance, § 411; and 63 A.L.R.2d 570, §§ 4, 7, 9, and 11. Mere knowledge of additional addresses at which an insured receives mail does not constitute knowledge of a change of correct address. See Gendron, supra.

The evidence elicited at trial is insufficient to determine whether Allred had but one correct mailing address. Moreover, it cannot be determined whether Security had actual knowledge of the complete change to this new address.

Allred’s contention that § 27-23-23, Code (1975), requires a 20-day notice of cancellation under the type policy before us is also fallacious. That statute, while requiring 20-days’ notice under certain stated situations, provides, inter alia :

(l)(b) . . . provided, however, that this article shall not apply ... (2) To any policy insuring more than four automobiles; nor (3) To any policy covering garage . . . hazards . .

As stated, at the time of cancellation, Allred had five vehicles covered by this policy. Thus, it would appear the statute excludes its application i. -»der these circumstances. Moreover, even assuming this argument is inapplicable because at least two of the vehicles were trucks, the garage liability provision (under which Allred seeks coverage) is clearly severable and excluded by the statute. § 27-23-20(1)(b), Code (1975). Therefore, Security was not required to give 20-days’ notice of cancellation, but could, instead, mail notification 10 days before its effective date, as provided in the policy. Boston Insurance Co. v. Rash, 263 Ala. 201, 82 So.2d 177 (1955); Hanover Fire Insurance Co. v. Wood, 209 Ala. 380, 96 So. 250 (1923); and Mid-State Homes Inc. v. Cherokee Insurance Co., 51 Ala.App. 247, 284 So.2d 274 (1973). See also 45 C.J.S. Insurance §§ 449, 458.

Thus viewed, the judgment of the trial Court is due to be reversed and remanded.

REVERSED AND REMANDED.

TORBERT, C. J., and MADDOX, SHORES and BEATTY, JJ., concur.


text:
    C. H. CHICHESTER, Jr. v. The FIRST NATIONAL BANK OF BIRMINGHAM et al.
    77-398.
    Supreme Court of Alabama.
    May 26, 1978.
    Rehearing Denied June 30, 1978.
    John H. Lavette and L. Don Campbell, Jr., Birmingham, for appellant.
    W. Gerald Stone, of Stone, Patton & Kierce, Bessemer, for appellees, The First National Bank of Birmingham and Elizabeth S. Hudson, as Co-Trustees of the Estate of Dan R. Hudson, deceased.
    Frank M. Bainbridge and William O’Neal Whitt, Jr., of Bainbridge & Mims, Birmingham, for appellee, Julian I. Boriss.
   PER CURIAM.

This cause came on to be heard orally before the Court on appellees’ motion to dismiss the appeal under Rules 2 and 38 A.R.A.P., and after hearing the parties and carefully considering their contentions, the Court is of the opinion that the motion should be granted for the reasons that hereinafter appear.

The Court of Civil Appeals in the first appeal in this case, The First Nat. Bank of Birmingham et al. v. Chichester, 352 So.2d 1371 (Ala.Civ.App.1977) held:

“It is the opinion of the court that the legal evidence presented was insufficient to support a verdict upon any of the theories presented by plaintiff and the motion for directed verdict should have been granted. Dillon v. Nix, 55 Ala.App. 611, 318 So.2d 308 (1975).” [Emphasis ours.]

Whereupon, the cause was reversed and remanded. Petition for writ of certiorari to the Court of Civil Appeals was sought in this Court and the writ denied on December 22, 1977. See 352 So.2d 1376 (Ala.1977). After remand, appellees filed a motion in the trial court for summary judgment based upon the prior pleadings, the legal evidence and exhibits in the prior trial, and the opinion of the Court of Civil Appeals. The appellant filed no countervailing affidavits. The appellees’ motion for summary judgment was granted by the trial court based upon the pleadings, exhibits, and “legal evidence” in the first trial. Appellant then appealed to this Court from the order granting summary judgment. Since the Court of Civil Appeals held, on the first appeal, that the motion for directed verdict should have been granted, and no new evidence at all was submitted by affidavit of the appellant in the trial court, after re-mandment, the trial court was correct in granting summary judgment. Therefore, if there is any room for operation of Rules 2 and 38, A.R.A.P., this case would clearly seem to fall within the rules. The motion to dismiss is due to be granted. No damages are awarded. Only “single costs” are to be taxed.

MOTION TO DISMISS APPEAL GRANTED.

TORBERT, C. J., and BLOODWORTH, FAULKNER, ALMON and EMBRY, JJ., concur.


author: BEATTY, Justice. JONES, Justice

text:
    Pamella A. CUSTRED et al. v. JEFFERSON COUNTY, etc., et al.
    SC 2677.
    Supreme Court of Alabama.
    June 16, 1978.

      William L. Irons, Birmingham, for appellants.
    Edwin A. Strickland, Birmingham, for Jefferson County, appellee.
    Douglas P. Corretti and David F. Ovson, Birmingham, for Cross Creek, Ltd., appel-lee.
    William J. Baxley, Atty. Gen., and Henry H. Caddell, and Benjamin Cohen, Asst. At-tys. Gen., amicus curiae for the citizens of Alabama.
   BEATTY, Justice.

This is an appeal by plaintiffs, some seventy homeowners, from a judgment rendered in favor of Cross Creek, Ltd. (Cross Creek), a limited Alabama partnership.

The plaintiffs are homeowners (homeowners) living near the Patton Creek Wastewater Treatment Plant (Patton Plant) located in Hoover, Alabama. This sewage treatment plant was built in 1958 and is owned and operated by Jefferson County (County). In 1972 the County proposed a new sewage treatment plant for Patton Creek but the plans were never approved. Since 1972 homeowners from around the Patton Plant have registered many complaints about the increasing obnoxious odors emanating from the vicinity of Patton Creek, the fish kills and alleged health hazards caused by the treatment plant.

Patton Plant was designed to treat 3.0 million gallons per day (m. g. d.) of sewage but when the sewage flow exceeds 6.0 m. g. d. the excess bypasses the treatment facility and is dumped directly into Patton Creek. Patton Creek, which empties into Paradise Lake, thus receives raw untreated sewage when the sewage flow exceeds 6.0 m. g. d. And since 1975 the County has used a tanker truck to carry untreated sewage from the Patton Plant to another treatment plant.

On February 17,1976 the County enacted a resolution declaring a Sewer Moratorium for the Patton Plant. The pertinent provisions are:

WHEREAS, the Patton Creek Waste-water Treatment Plant has reached an overloaded condition, both hydraulically and organically, and effluent from this plant is not meeting requirements of the Environmental Protection Agency N.P.D. E.S. Interim Permit No. AL 0022942; and
WHEREAS, the County Commission has approved the construction of a temporary pumping station to pump approximately two million gallons of raw sewage from the Patton Creek collection system to the Cahaba River System in order to bring the Patton Creek Wastewater Treatment Plant back into its design parameters; and
WHEREAS, the Cahaba River Waste-water Treatment Plant will be near its design parameters when the additional two million gallons of sewage flow is pumped to it from the Patton Creek Basin; and
WHEREAS, any appreciable additional sewage flow beyond connections approved prior to 12:00 Noon on February 10, 1976, will place the Cahaba River Wastewater Treatment Plant in violation of its Interim Discharge Permit No. AL 0023027, as issued by the Environmental Protection Agency.
NOW, THEREFORE, BE IT RESOLVED BY THE JEFFERSON COUNTY COMMISSION as follows:
The following words and terms shall have the meanings hereby accorded them:
1. ‘Sewer connection moratorium’ shall mean the moratorium on sewer connections in Jefferson County, Alabama, as set forth in this resolution.
2. ‘Approval’ shall mean that approval of a subdivision plan by the appropriate department of Jefferson County, Alabama; the City of Hoover, Alabama; the City of Vestavia Hills, Alabama; the City of Mountain Brook, Alabama, and any other municipal corporation which issues such approval for subdivision approval.
3.‘Preliminary subdivision plan’ shall mean the initial required plan and drawing of a proposed subdivision submitted to the appropriate governmental authority for approval.
THERE IS HEREBY DECLARED, effective the 10th day of February, 1976, a sewer connection moratorium on the existing sewage system of the Patton Creek Wastewater Treatment Plant and the existing Cahaba River Wastewater Treatment Plant.
Provided, however, any sewer connections indicated on a preliminary subdivision plan which has received approval prior to February 10, 1976, shall be excluded from the sewer connection moratorium. Also excluded from the moratorium are sewer connections for unimproved lots within existing subdivisions which subdivisions have sewers installed to service the lots therein. Also excluded from the moratorium are sewer connections for improved lots which have installed approved alternate sewage disposal systems where said lot has sewer facilities adjacent thereto.
Provided, however, in the event that the average daily sewage flow to the Patton Creek Wastewater, Treatment Plant reaches 3.3 million gallons per day (after completion of the Patton Creek Relief Pumping Station and proposed diversion of two (2) million gallons of sewage per day to the Cahaba River Waste-water Treatment Plant), no further connections will be permitted whether or not connection permits have been issued.

In about March, 1976 the Jefferson County Moratorium Committee was established, apparently by the Commissioner of Public Works, to review applications for sewer connection permits and to make recommendations to the Public Works Director-County Engineer on whether the applications were properly exceptions to the moratorium.

Cross Creek, an alleged successor in interest to C.R.&S. Land Development Company (C.R.&S.), made a sewer permit request. Apparently C.R.&S., a dissolved corporation, and Cross Creek involved substantially the same investors. The Moratorium Committee granted it a sewer connection permit on January 12, 1977 for a proposed 133-unit apartment complex. Cross Creek also obtained a building permit from the City of Hoover on January 12, 1977. Although Cross Creek had not been formed until May 5, 1976 it claimed, through C.R.&S., to have received prior approval for a preliminary subdivision sewer plan. It has been estimated that when the proposed apartment complex is built it will add an additional 40,000 gallons of sewage daily to the Patton Plant.

After learning that Cross Creek had obtained both a sewer connection permit and a building permit, the plaintiff homeowners brought this action to enjoin construction of the apartment complex and to void Cross Creek’s sewer permit. The trial court initially granted an ex parte temporary restraining order to plaintiffs. Later, the plaintiffs amended their complaint asking for injunctive relief against Cross Creek to remedy an alleged public nuisance caused by the Patton Plant.

The trial commenced on March 23, 1977 but the trial, court interrupted the proceedings to appoint a special master, Southern Research Institute, to test the Patton Creek effluents and continued the trial until Southern Research Institute presented all of its findings. At several time intervals Southern Research Institute conducted tests at numerous test sites along Patton Creek and around Paradise Lake, analyzed the bacteriological samples and submitted reports to the trial court. After Southern Research Institute had finished its testing and submitted its reports, the trial concluded. The court entered an interim decree remanding all the evidence to the Moratorium Committee and the Commissioner of Public Works for the committee’s reconsideration of its prior issuance of Cross Creek’s sewer connection permit. The Moratorium Committee then filed its report approving Cross Creek’s sewer permit as an exception to the moratorium. Thereafter, the trial court determined that the action by the Moratorium Committee granting Cross Creek’s sewer connection permit was not arbitrary, capricious, fraudulent or the product of gross abuse; and accordingly it entered its final decree denying the plaintiff’s requested relief.

Among the issues raised by appellants are these:

1. Whether the trial court erred when it determined that the Moratorium Committee did not act unreasonably, arbitrarily or capriciously in issuing the sewer permit.

2. Whether the trial court erred in denying plaintiffs’ requested relief based upon the theory of nuisance.

The appellants argue that the trial court erred because (1) the Moratorium Committee acted arbitrarily and capriciously when it granted Cross Creek’s sewer permit as an exception to the Moratorium Resolution because Cross Creek had no sewer plans prior to the enactment of the moratorium (and because Cross Creek cannot be a successor in interest to C.R.&S. since its plans were not only different from the present plans but were never signed); (2) the Moratorium Committee acted arbitrarily in granting the sewer permit since the Moratorium Resolution was violated when the “appropriate governmental authority” did not approve Cross Creek’s building plans prior to the moratorium; (3) the Moratorium Committee acted arbitrarily in granting Cross Creek’s sewer permit because an express provision of the Moratorium Resolution was violated, which prohibits further sewer connections when the average daily flow reaches 3.3 m. g. d.; (4) the trial court excluded from evidence page fifteen of Southern Research Institute’s report and it was therefore not submitted to the Moratorium Committee for their consideration, and (5) administrative due process was violated when the Moratorium Committee did not hear the testimony presented at trial. However, all of these focus upon the trial court’s scope of review when it reviews the order of an administrative body.

A fundamental concept of judicial review of administrative action is that it is a limited review, delineated by statute and court-established standards which relate to the nature of the issues or questions open to judicial review. Alabama State Tenure Commission v. Mountain Brook Board of Education, 343 So.2d 522 (Ala.1976); 2 Am.Jur.2d §§ 612, 678. Cf. Alabama, Tennessee and Northern Railroad Co. v. U. S., 207 F.Supp. 638 (D.C.Ala.1962). In Nelson v. Mobile Bay Seafood Union, 263 Ala. 195, 82 So.2d 181 (1955), a case similar to the present controversy, the question was whether the trial court properly granted an injunction against the respondents who were dredging for seed oysters under a license granted by the Alabama Department of Conservation. In Nelson this Court cited with approval language contained in Carson Cadillac Corp. v. City of Birmingham, 232 Ala. 312, 167 So. 794 (1936):

‘It is well-settled that courts of equity, in the absence of fraud or gross abuse, will not interfere with the exercise of discretion by administrative boards in the determination of the necessity and requirements of public accomplishment, •much less control the judgment of such boards in respect to matters within the technical field of their duties and powers.’

Here no question was raised that the Moratorium Committee’s determination to grant Cross Creek a sewer permit was the result of fraud. However, assuming that arbitrariness or capriciousness is equivalent to gross abuse, then the question is whether the committee’s action is supported by a scintilla of evidence which will furnish an inference that Cross Creek was properly granted a sewer connection permit. The record discloses evidence that Cross Creek did have sewer plans, through C.R.&S., pri- or to the enactment of the moratorium and they were not only substantially the same as the present plans but were approved in 1969. It also discloses that the proper governmental authority, Jefferson County, approved Cross Creek’s building plans prior to the enactment of the sewer moratorium and prior to the annexation of the property by the City of Hoover.

Although there is evidence in the record that the average daily sewage flow on many occasions has exceeded the 3.3 m. g. d. limit established by the proviso in the Moratorium Resolution, the report of the Moratorium Committee states in substance that this provision is without effect because a condition precedent never occurred. That alleged condition precedent was that the Patton Creek Relief Pumping Station be built to transport sewage to another treatment plant and that two million gallons of sewage per day be diverted to the Cahaba River Wastewater Treatment Plant. Because the Moratorium Committee’s interpretation of the proviso is not a question of disputed fact, but rather a question of statutory construction, we must consider whether that interpretation was legally justifiable.

For purposes of construction the Moratorium Resolution is similar to an ordinance, and the interpretation of an ordinance is governed by the same rules of construction as a state statute. American Bakeries Co. v. City of Opelika, 229 Ala. 388, 157 So. 206 (1934); S. & S. Distributing Co. v. Town of New Hope, 334 So.2d 905 (Ala.1976). The general rule of construction is that where the language of a statute is unambiguous, the clearly expressed intent must be given effect, and there is no room for construction. Alabama Industrial Bank v. State ex rel. Avinger, 286 Ala. 59, 237 So.2d 108 (1970). Also, when the language is plain, it should be considered to mean exactly what it says. Alabama Industrial Bank v. State, supra.

The clearly expressed intent of the Jefferson County Commission is to invoke the moratorium against grantees of sewer connections permits only after the approved pumping relief station has been built and the total sewage inflow to Patton Plant reaches 5.3 million gallons per day. The intent of the Moratorium Committee to limit total sewage flow to 5.3 m. g. d. can be seen by the 3.3 m. g. d. limitation coupled with the 2.0 m. g. d. proposed diversion from Patton Plant. In the light of these rules and after considering the provision in question which unequivocally and plainly states that when “the average daily sewage flow . . . reaches 3.3 million gallons per day (after completion of the Patton Creek Relief Pumping Station and proposed diversion of two (2) million gallons of sewage per day . . .), no further connections will be permitted . . . we believe that the provision springs into effect only after the pumping relief station is built and two million gallons of sewage per day is diverted from the Patton Plant. Stated in another way, the language in the provision limiting sewer connections if the sewage flow reaches 3.3 m. g. d. does not become effective until the occurrence of the condition precedent. That condition precedent is that the Patton Creek Relief Pumping Station be built and two million gallons of sewage per day be diverted from the Patton Plant.

Therefore, the Moratorium Committee’s interpretation that the proviso is without effect due to the non-occurrence of the condition precedent is legally justifiable. And because the provision in the Moratorium Resolution was not violated, the Moratorium Committee did not act arbitrarily in granting Cross Creek’s sewer permit.

The appellants also contend that the trial court erred by excluding from evidence page fifteen of Southern Research Institute’s report. However, the trial court did not err in excluding page fifteen of the report from evidence because determinations of relevancy rest within the sound discretion of the trial court. McCurdy Concrete, Inc. v. L. Miller & Son, Inc., 57 Ala.App. 340, 328 So.2d 594 (1976). We have examined the excised page and find that it did not conform to the trial court’s request but contained conclusions. The trial court requested Southern Research Institute to furnish findings of fact, not conclusions.' Apparently the trial court felt there was a risk that if the excluded page were admitted into evidence and subsequently presented to the Moratorium Committee, the committee might have substituted the judgment of Southern Research Institute rather than making independently arrived at conclusions of their own. Therefore, we find that the trial court’s excluding page fifteen from evidence was not an abuse of discretion.

Appellants argue further that administrative due process was violated when the Moratorium Committee did not hear the testimony at trial. However, appellants have not cited us to any reference in the record nor have we found any evidence in the record tending to show that the Moratorium Committee did not consider the evidence on remand. Indeed, the report of the Moratorium Committee in response to the interim decree of the trial court shows that the committee met to reconsider Cross Creek’s sewer permit status in light of all the evidence. Contrary to the appellants’ position this raises a reasonable inference that the Moratorium Committee did consider the evidence adduce! And neither the record nor appellants’ brief contain any fact which impeaches this inference. Thus, we perceive no violation of administrative due process by the Moratorium Committee.

Finally, the appellants argue that the trial court erred because it did not adjudicate the question of nuisance. This position, however, overlooks the final decree of the trial court which denies plaintiffs’ requested relief as contained in their amended complaint and in their original complaint. Plaintiffs’ amended complaint sought injunctive relief for a public nuisance created by the Patton Plant and plaintiffs’ original complaint apparently sought injunctive relief for a private nuisance. Thus, the trial court did adjudicate the issues of public and private nuisance raised by the pleadings.

Furthermore, when the trial court hears evidence ore tenus its conclusions will not be disturbed on appeal unless palpably erroneous. Rice v. Hill, 278 Ala. 342, 178 So.2d 168 (1965). We have carefully reviewed the record and do not find that the trial court’s findings are palpably erroneous.

Although on this appeal none of the parties challenged Jefferson County’s authority to adopt the Moratorium Resolution, nevertheless it is apparent that this contest is one which deals, in part at least, with the governing authority of Jefferson County to make decisions which bind its constituency. At bottom the issue is more political than legal. Therefore, the question of whether or not the decisions made were appropriate more properly ought to be resolved in another arena.

Because there is no reversible error the cause is due to be, and is, affirmed.

AFFIRMED.

MADDOX, FAULKNER and EMBRY, JJ., concur.

TORBERT, C. J., and BLOODWORTH, J., concur in the result.

JONES, ALMON and SHORES, JJ., dissent.

JONES, Justice

(dissenting):

The general purpose of the Moratorium Resolution was to prevent further overburdening of the Patton Plant facility. Therefore, I believe that a reasonable construction of the provision in question is that it does not contain a condition precedent that a pumping relief station be built before the 3.3 m. g. d. flow limitation became effective. The interpretation, then, by the majority that the provision was void due to a failure of a condition precedent is erroneous. I cannot agree with the majority’s interpretation that the provision is void, and I would hold that it prohibits sewer connections even if permits have been issued when the average daily flow of sewage reaches 3.3 m. g. d.

I interpret the language in the second “Provided, however” paragraph as a limitation on the exception expressed in the foregoing paragraph of the Moratorium Resolution and not as a condition precedent to the operative effect of the moratorium. This interpretation is consistent with the general purpose of the Moratorium Resolution. In essence, the majority’s interpretation means that the county decreed that, should it build more treatment plants, it would limit the amount of sewage flow; but, until then, it would not place any limitations on the input in the system. I am unwilling to accord to the governing body of Jefferson County such frivolity of reasoning.

Counsel for Appellees argue, and I accept as accurate, the proposition that Jefferson County is vested with the sole and exclusive control of the Jefferson County sewage system, including the Patton Creek Wastewa-ter Treatment Plant. Amendment 73 to the 1901 Constitution of Alabama (1948).

I further agree with the majority that the Moratorium Resolution is a “reasonable and nondiscriminatory” exercise of the County’s authority as constitutionally prescribed. But minimum due process requirements mandate adherence to its own rules and regulations. See, generally, Lynnwood Property Owners Association v. Lands Described in Complaint, etc., et al [Ms.S.C. 2502, May 26, 1978], 359 So.2d 357 (Ala.1978).

Because there is undisputed evidence in the record that the average daily flow has exceeded the 3.3 m. g. d. limit, the Moratorium Committee erred in granting a sewage connection permit to Cross Ci-eek that would allow sewage connections to Patton Plant. Therefore, I would reverse the trial Court’s order affirming the action of the Moratorium Committee.

ALMON and SHORES, JJ., concur.


author: FAULKNER, Justice.

text:
    RELIANCE INSURANCE CO., a corp. v. JACK’S CONSTRUCTION CO., INC., a corp., et al.
    SC 2661.
    Supreme Court of Alabama.
    Feb. 24, 1978.
    Rehearing Denied July 14, 1978.

      Harvey Elrod, Decatur, for appellant.
    Julian Harris, Decatur, for appellee, Thornton Fleming.
   FAULKNER, Justice.

This action was for breach of a written indemnity agreement under which the shareholders of Jack’s Construction Co., the Jacksons and the Flemings, agreed to hold Reliance Insurance Co. harmless from claims in consequence of Reliance becoming surety for Jack’s upon performance and payment bonds. The trial court, after a hearing ore tenus, held that Reliance’s branch bond manager, Klein, had released the Jacksons and the Flemings from personal indemnity. We affirm.

Reliance executed bonds for Jack’s during the years 1964 through 1967, with the defendant, Fleming, and others as personal indemnitors. The bonds were written through a local agent, Your Insurance Man, of which Rex Rankin was president. In late 1966 or early 1967, Klein came to Decatur for a meeting with the indemnitors. At that meeting there was a general discussion of releasing the indemnitors. After examining Jack’s latest financial statement, Klein stated that he “saw no reason” why they should continue as indemnitors. As Rankin and Klein went out the door, Rankin commented, outside the hearing of the others, “Al, you are crazy as hell.”

There was no default on any bond written before this meeting, but afterward there was default on subsequently issued bonds in the amount of $18,672.

At trial, Rankin testified that Klein was the one with whom he dealt in securing authority to execute bonds; that Klein determined the conditions under which the bonds would be written, including whether personal indemnity would be required; that on occasions Klein terminated the right to continue bonds or deal with contractors; and that all of his bonding business was conducted with Klein. He also testified that Klein did not always require personal indemnity, though he knew of no instance in which personal indemnity was not required when a closed corporation, such as Jack’s, was involved. Rankin further testified:

“Q. I guess from what you said to Mr. Cline [sic] about ‘crazy as hell’ you regarded this conservation as being a little bit abnormal?
“A. Yes, sir.
“Q. Out of the ordinary course of business?
“A. Yes, sir.
“Q. What did you observe he was authorized to do at that point?
“A. Insofar as I was concerned, Mr. Cline [sic] was head of the bonding department.
* * * * * *
“THE COURT: Would I be right in the statement that when you made this comment to Mr. Cline [sic], you were, in effect, telling him you thought he was making an error in judgment?
“A. Yes, sir.
“THE COURT: Or was making one?
“A. Yes, sir.
“THE COURT: You didn’t agree with him, in effect, it was your own way of saying—
“A. Yes, sir.”

David Elgin, a claims attorney and bond salvage manager for Reliance, .also testified to the authority of a branch bond manager:

“Q. All right, sir. Branch Managers are in the corporate structure reporting to whom within Reliance?
“A. They would report to someone at the Home Office. The Branch Bonding Manager would be responsible to the Home Office under the bond underwriting. Mr. McDermott or Mr. Sedwick, whoever was Vice President at that time.
“Q. You are not in that particular department?
“A. Well, I’m associated with them. You can’t take one apart from the other. We are intertwined in all the problems— they are intertwined in all our problems.
“If I have to get recovery under an indemnity organization, obviously I have a problem if it doesn’t exist.
“Q. Are Branch Managers, normally and usually, involved with the active solicitation of business?
“A. Branch Bond Managers are in connection with the bonding underwriting. Branch Managers are involved in the total concept of the Branch Office. That would be casualty insurance and bonding, but the Branch Bond Manager is strictly to the bonding business.
“Q. The duties involved upon men is to get business?
“A. Yes.”

Reliance introduced a memorandum from the vice president of Reliance concerning the procedure and mechanics of securing indemnity in the proper form. Contained within that memorandum is the following:

. . [Situations sometimes arise where the indemnitor insists on eliminating or qualifying some of the provisions or limiting the scope of his indemnity. We do not encourage this. You have no authority to consent to any changes. Where they are necessary, get Head Office approval.”

There is no indication that such approval was obtained by Klein, nor that the defendants complied with paragraph 18 of the indemnity contract, which states:

“That the Agreement of Indemnity is continuing and will apply to all ‘Such Bonds’ which the Company may have executed or procured the execution of from time to time, and over an indefinite period of years; however, any Indemnitor may by written notice by registered or certified mail to the Bonding Department of the Company at its Head Office, 401 Walnut Street, Philadelphia, Pennsylvania, disavow his liability as to any bond or bonds which may be executed by the Company subsequent to fifteen days after receipt by the Company of such notice.”

After the alleged release, Reliance executed three additional bonds for Jack’s and obtained a personal financial statement from the indemnitors. Elgin testified that had the defendants been released, there would be no need for the statements, and that they would be unable to obtain the statements from released individuals. After default on these subsequently issued bonds, Reliance sent a series of demand letters to the Jacksons and the Flemings. In response to one of these letters, Jackson, as president of Jack’s, stated: “As for the balance of the endebtedness [sic] to said jobs, we will have the money for these in November, as we will be closing out enough jobs to take care of this matter.”

There are two issues presented for review in this appeal:

First, whether Klein, as branch bond manager, had authority to release the personal indemnitors, and whether he did release the indemnitors.

Second, whether Fleming and Rankin were disqualified from testifying because of the “Dead Man’s Statute.”

I

Although not disputing the validity of an oral release, Reliance strongly contends that the trial court was palpably erroneous in finding that Klein had authority to make such a release, citing the limitation upon Klein’s authority shown in the memorandum. Additionally, it argues that Klein’s statement did not constitute a release and relies heavily upon the subsequent acts of the parties to show that the statement was not interpreted as a release.

“An agent who is authorized to solicit and receive applications for fire insurance, and, at his discretion, to countersign and issue policies of insurance intrusted to him by the company for that purpose, must be regarded quoad hoc as the general agent of the company.” Sun Ins. Office of London v. Mitchell, 186 Ala. 420, 426, 65 So. 143, 145 (1914).

Hartford Accident & Indemnity Co. v. Oglesby, 293 Ala. 620, 308 So.2d 695 (1975). The evidence presented in this case, especially the testimony of Rankin, showed that Klein exercised similarly wide discretion in the bonding aspects of the business. There is no reason for treating a surety company and an insurance company differently in determining the authority of agents. Cincinnati Ins. Co. v. City of Talladega, 342 So.2d 331 (Ala.1977). Sufficient evidence was presented to support the trial court’s conclusion that Klein was a general bonding agent for Reliance. The only evidence tending to limit the scope of the agency was the memorandum, which limits only authority to alter or modify the terms of indemnification rather than limiting authority to require or not to require indemnity.

There is no contention that the defendants had notice of any limitations upon Klein’s authority.

While Rankin testified that he considered Klein’s release of the defendants out of the usual course of business, he also stated that “Insofar as I am concerned, Mr. Cline [sic] was head of the bonding department.” Clearly the question of whether Klein was a general agent of the company with at least the apparent authority to release the in-demnitors was for the trial court. Where the trial court makes a decree after hearing witnesses ore tenus, every presumption will be indulged in favor of the trial court, and its finding will not be disturbed unless palpably wrong. Hartford Accident & Indemnity Co., Shrivers v. Shrivers, 277 Ala. 400, 171 So.2d 109 (1965).

Likewise, the question of whether Klein did, in fact release the indemnitors was for the trial court. Jackson’s reply, as president, to Reliance’s demand letter is not inconsistent with a release from personal indemnity. Nor does the indemnitor’s compliance with the request for a personal financial statement preclude a finding of a release because both indemnitors owed the corporation money. Since the trial court’s finding that Klein’s statement that he “saw no reason” for them to continue as indemni-tors constituted a release was supported by the evidence, it is entitled to a presumption of correctness on appeal. Hartford Accident & Indemnity Co.

We find the trial court’s decree to be supported by the evidence.

II

Reliance contends that the testimony of both Rankin and Fleming is prohibited by the “Dead Man’s Statute” (Tit. 7, § 433, Code of Alabama of 1940 (Recomp.1958)), because Klein was deceased at the time of trial. We do not agree.

Rankin, having no pecuniary interest in the result of the suit, is not prohibited from testifying. In Manegold Admx. v. Massachusetts Life Insurance Co., 131 Ala. 180, 31 So. 86 (1901), this court stated that to disqualify a witness from testifying under this statute, his interest must be pecuniary and it must be involved in the suit so as to be affected by the judgment rendered in the case. There must be a conflict of interest between the dead and the living. See Alabama Gold Life Insurance Co. v. Sledge, 62 Ala. 566 (1878).

Fleming’s testimony was admissible under the exception recognized in Homewood Dairy Products Co., Inc. v. Robinson, 254 Ala. 197, 48 So.2d 28 (1950), where the court stated:

“In the matter here material several states have interpreted their statutes, respectively, which prohibit testimony by an interested witness as to a transaction with or statement by the deceased person under circumstances there stated. The concensus of opinion is that the transaction with or statement by a deceased person is not such within such statute when it was with him and one or more others associated with the deceased in the transaction, for such other one still' living may give his version of the transaction, and, therefore, the reason for the exclusion does not exist.”

Sheppard v. T. R. Miller Co., Inc. 332 So.2d 374 (Ala.1976); Lowery v. Stinson, 291 Ala. 415, 282 So.2d 244 (1973). The reason for the exclusion is also inapplicable here because Rankin, accompanying Klein as a Reliance agent, testified to his version of the transaction. There was no error in allowing the testimony of Fleming and Rankin.

AFFIRMED.

TORBERT, C. J., and BLOODWORTH, ALMON and EMBRY, JJ., concur.

      . Jack’s Construction Co., Inc. was originally a named defendant but was subsequently stricken as a party.


author: ALMON, Justice. FAULKNER, Justice

text:
    Myra BEVIS and Danny Bevis and St. Paul Fire and Marine Insurance Company v. L & L SERVICES and W. B. W. Pharmacy.
    SC 2466.
    Supreme Court of Alabama.
    June 30, 1978.
    Robert L. Gonce, of O’Bannon & Gonce, Florence, for appellants.

      Robert E. Jones, III, of Poellnitz, Cox, Robison, McBurney & Jones, Florence, for appellees.
   ALMON, Justice.

Myra Bevis brought suit for injuries she received from a defect in the back door steps of a building leased by her employer from the defendant-landlord, L & L Services, Inc. The trial court granted summary judgment for the defendant. The issue is whether the defendant-landlord had knowledge of the latent defect. We answer in the negative and affirm the judgment of the trial court.

The plaintiff, Myra Bevis, was an employee of W. B. W. Pharmacy. While entering the back door of the building, the steps partially gave way resulting in injury. The steps were constructed with concrete blocks with the holes in the blocks turned upward. These holes were covered with concrete. When Mrs. Bevis placed her foot on the steps, the concrete over a hole collapsed causing her to fall.

The prefabricated building was constructed by the defendant-landlord immediately prior to leasing to the Pharmacy. There are no other tenants in the building, and the steps in question were not a common entrance for anyone other than the Pharmacy.

By the terms of the lease, the landlord was to maintain and keep in good repair the plate glass, the outside walls, the roof, the air conditioner, the heating system, the hot water heater, and the parking area. The lease provided that the tenant was to maintain and keep in repair the remainder of the building.

The general rule is, absent a covenant to repair, a landlord is not liable to the tenant or the tenant’s servants or guests except for injuries resulting from latent defects known to the landlord at the time of the leasing, and which were concealed from the tenant. Chambers v. Buettner, 295 Ala. 8, 321 So.2d 650 (1975); Southern Apartments, Inc. v. Emmett, 269 Ala. 584, 114 So.2d 453 (1959); Uhlig v. Moore, 265 Ala. 646, 93 So.2d 490 (1957).

In other words, it seems settled by the weight of authority that the landlord is not liable in tort for injuries to said class [the tenants, his servants, guests, or others entering under his title], whether there be a covenant to repair or not, unless the defects existed at the time of the letting, were known to him, and which he concealed from the tenant. . . . ” Anderson v. Robinson, 182 Ala. 615, 620, 62 So. 512 (1913).

The issue therefore narrows to whether the defendant had knowledge of the defect.

This case is unlike other cases wherein the landlord is held to a reasonable standard of care to keep in good repair and safe condition those areas used in common by different tenants of the same premises. Mudd v. Gray, 200 Ala. 92, 75 So. 468 (1917); Allen v. Genry, 39 Ala.App. 281, 97 So.2d 828 (1957).

For purposes of summary judgment the defendant stipulated that the steps contained a latent defect.

Bevis seeks to impute knowledge of the defect to defendant through W. H. Johnson, the person who constructed the steps. The issue is whether W. H. Johnson is an agent of defendant or an independent contractor.

“It is the reserved right of control rather than its actual exercise that furnishes the true test of whether the relation between the parties is that of an independent contractor or of employer and employee — master and servant. Moore-Hanley Hardware Co. v. Williams, 238 Ala. 189, 189 So. 757.
“For one to be an employee, the other party must retain the right to direct the manner in which the business shall be done, as well as the results to be accomplished, or, in other words, not only what shall be done, but how it shall be done. Weeks v. C. L. Dickert Lumber Co., 270 Ala. 713, 121 So.2d 894 and cases there cited.” Solmica of Gulf Coast, Inc. v. Braggs, 285 Ala. 396, 232 So.2d 638 (1970).

W. H. Johnson constructed the foundation on which the pharmacy building rests and the outside steps in question. By affidavit, he states that he owns and operates a small contracting business principally engaged in roofing work, laying of concrete foundations, building sea-walls, and carpentry work. He has never been on the payroll of the defendant, although he has performed many jobs for it. He states that he works for many individuals and many different businesses.

Mr. Johnson was paid on a time-expended basis. Under such an arrangement, he gives an estimate of the time required and his corresponding cost estimate. Mr. Johnson secures his own help and pays and supervises them.

Mr. Bob Love, President of the defendant corporation, by affidavit stated that W. H. Johnson had done various kinds of work for the defendant. However, Mr. Johnson has never been on Mr. Love’s personal payroll or the defendant’s payroll. Mr. Johnson is hired to do jobs on a contractual basis; i. e., he is contacted about a specific job and he is paid according to the bill he submits. Mr. Johnson was to lay the foundation of the pharmacy building and to build steps on a time-expended basis. Mr. Love states that Mr. Johnson normally would be paid based on the number of concrete blocks laid. However, in this situation, the number of blocks was disproportionate to the time necessary to complete the job. Thus, Mr. Johnson was paid based on his estimate of time required for the job.

Mr. Love also states that no one from defendant corporation supervised Mr. Johnson and no one instructed him as to how the work was to be done.- If Mr. Johnson employed additional help, it would not affect the cost to defendant.

Bevis maintains that the issue of Johnson’s relation with defendant is a factual matter for the jury. Bevis relies heavily on Solmica of Gulf Coast, Inc. v. Braggs, supra. In Solmica, the court held that there was a scintilla of evidence requiring submission to the jury of the issue of whether the parties’ relationship was that of independent contractor or of employee and employer.

However, this case is clearly distinguishable from Solmica. There, the court noted that some of the tendencies of the evidence showed the alleged employer instructed the alleged employee as to the manner and method of performing the work; checked on work progress and instructed changes or corrections to be made; and dismissed or fired an employee for unsatisfactory work. There are no such tendencies of the evidence in this case.

Thus, the evidence before the trial court shows conclusively that Mr. Johnson was an independent contractor. There being no genuine issue as to any material fact, summary judgment was appropriate.

The judgment is therefore affirmed.

AFFIRMED.

TORBERT, C. J., and BLOODWORTH, SHORES and EMBRY, JJ., concur.

FAULKNER, J., dissents with whom MADDOX and BEATTY, JJ., concur dissenting.

FAULKNER, Justice

(dissenting).

I respectfully dissent.

I.

The majority opinion correctly states the rule of law absolving a landlord from liability unless the injury results from a latent defect known to him and concealed from the tenant. While this rule of law is of long standing in this State, it appears to me that the time has come to take a new look at it. The rule is arbitrary, and unreasonably shields a landlord from tort liability. If a court can adopt a rule of implied warranty of habitability as applied to a seller of a dwelling house, why can’t the same rule be applied to a landlord who leases a building to a tenant. The distinction is illogical and unrealistic.

Having spoken of my philosophical views on the rule regarding latent defects, I now come to the reason for this dissent.

Here, the landlord admitted the defect in the steps causing the injury, and repaired them at his expense. Moreover, the landlord by its president, Bob R. Love, testified . . .

“Q. Had you or anyone, to you [sic] knowledge, with L. & L. Services either examined these steps in the back before Myra Bevis says that she fell on August 24, 1974?
“A. I can’t say we inspected per se the steps. I noticed the steps when they were done and there was nothing wrong with them at that time.
“Q. Did you look at them at that time?
“A. I can’t say that I specifically looked at them. They were just nice steps.
“Q. You were out there though and don’t recall seeing anything wrong with them at that time?
“A. Not at the time, no.”

By this testimony an issue of fact was raised as to whether the landlord had knowledge of the defect in the steps.

II.

The manner in which the builder was to be paid did not ipso facto determine the issue of agent or independent contractor. Rather, the factual question continued to be whether the owner possessed any reserved power of control. If the plaintiff could prove any fact inferring such a power in the owner, then this would tend to prove agency rather than an independent contractor relationship between the builder and the owner, and then the knowledge of the agent-builder could be imputed to the owner. Because the summary judgment mov-ant has not eliminated this possibility, it was error to grant summary judgment. Folmar v. Montgomery Fair Company, Inc., 293 Ala. 686, 309 So.2d 818 (1975).

MADDOX and BEATTY, JJ., concur.