text:
    Rosie Lee Sutton WOLFE v. Willie Mae SUTTON et al.
    No. 50952.
    Supreme Court of Mississippi.
    March 7, 1979.
    Rehearing Denied March 21, 1979.
    William L. Waller, W. O. Dillard, Jackson, for appellant.
    Al D. Eatmon, Jackson, for appellees.
   Appeal from Chancery Court, Hinds County; J. C. Stennett, Chancellor.

Before ROBERTSON, P. J., and WALKER and LEE, JJ.

AFFIRMED.


source: Caselaw Access Project

author: SHORES, Justice.

license: Public Domain

text:
    JEFFERSON COUNTY, Alabama, a Political Subdivision of the State of Alabama v. Jacob Harold REACH.
    77-494.
    Supreme Court of Alabama.
    Dec. 22, 1978.
    Rehearing Denied March 2, 1979.

      Gregory T. Bittner, Birmingham, for appellant.
    J. Wm. Thomason, Birmingham, for ap-pellee.
    W. Gerald Stone, Bessemer, for Personnel Board of Jefferson County, Alabama, as amicus curiae.
   SHORES, Justice.

Jacob Harold Reach had been employed as a deputy sheriff for Jefferson County, Alabama, for six years prior to his dismissal by the sheriff on July 24, 1975. Reach was given a written statement of the reasons for his dismissal but was not given a hearing prior to termination. After his dismissal, he filed notice of appeal with the Personnel Board of Jefferson County on August 1, 1975. He also brought an action, based on 42 U.S.C. § 1983, in federal district court seeking injunctive relief and damages from Jefferson County, Sheriff Melvin Bailey and the Personnel Board.

At the outset of the Personnel Board hearing, Reach moved for summary reinstatement based on Sheriff Bailey’s failure to conduct a pre-termination hearing. The Board took the motion under consideration but indicated its view that the denial of due process in Reach’s dismissal was relevant only to whether back pay was justified upon a finding that Reach should be reinstated “on the evidence.” The Board never addressed this motion again.

After a full evidentiary hearing on October 27, 1975, the Personnel Board issued its order holding Reach’s dismissal proper. Reach appealed this decision to a three-judge panel as provided in Vol. 14, Code of Alabama app., § 666 (Recompiled 1958). On June 7, 1976, while the Personnel Board’s decision was pending before the circuit court panel, the federal court rendered its decision in the § 1983 action declaring Reach’s July 24th dismissal void as a violation of due process. The federal court specifically declined to award back pay, citing Thurston v. Dekle, 531 F.2d 1264, 1269 (5th Cir. 1976).

In response to the federal court’s decision, Sheriff Bailey reinstated Reach on June 16, 1976.

On September 1, 1976, the circuit court panel ordered the cause remanded to the Personnel Board “ . . . for further proceedings consistent with the due process directives contained in [the federal court’s] opinion.” Since that time, the Personnel Board has taken no further action in the remanded cause.

Reach petitioned both the Personnel Board and Jefferson County for back pay for the period July 24,1975, through June 7, 1976. The Personnel Board denied his petition; Jefferson County ignored it. Subsequently, Reach filed the instant action on October 25, 1976, against Jefferson County seeking damages for his wrongful dismissal of July 24, 1975. Sheriff Bailey and the Personnel Board were joined as defendants but were later dismissed as parties upon their respective motions. On March 24, 1978, judgment was rendered for Reach against Jefferson County in the sum of $12,454.50 and costs. Jefferson County appealed from that judgment.

Jefferson County contends that Reach’s claim for damages is a tort action and that the one-year statute of limitations provided in Code of Alabama, Title 7, § 26 (Recompiled 1958) (now § 6-2-39, Code of Alabama 1975), had run before this action was filed. Reach counters that his claim is ex contrac-tu and is thus controlled by Code of Alabama, Title 7, § 21 (Recompiled 1958) (now § 6-2-34, Code of Alabama 1975), and was timely commenced within that provision’s six-year period.

The distinction between a claim ex contractu and one ex delicto is found in the nature of the grievance. Where the wrong results from a breach of a promise, the claim is ex contractu. However, if the wrong springs from a breach of a duty either growing out of the relationship of the parties, or imposed by law, the claim is ex delicto. Sewell v. Grand Lodge of Int’l Ass’n of Mach. & Aero. Workers, 445 F.2d 545 (5th Cir. 1971), cert. denied 404 U.S. 1024, 92 S.Ct. 674, 30 L.Ed.2d 674 (1972); United States F. & G. Co. v. Birmingham Oxygen Serv., Inc., 290 Ala. 149, 274 So.2d 615 (1973); Paul v. Escambia County Hospital Board, 283 Ala. 488, 218 So.2d 817 (1969); Vines v. Crescent Transit Co., 264 Ala. 114, 85 So.2d 436 (1956).

The wrong of which Reach complains is that his dismissal from the Sheriff’s Department, without being afforded a hearing, violated due process of law under both the Alabama Constitution and the United States Constitution. Clearly, this wrong arises from a breach of duty imposed by law. As such, Reach’s claim for relief is ex delicto and is subject to the one-year statute of limitations.

The one year began to run on July 24, 1975, the day on which both the injury and wrongful act occurred. Michael v. Parsons, 589 F.2d 853 (5th Cir. 1978); Brotherhood of Locomotive Firemen & Eng. v. Hammett, 273 Ala. 397, 140 So.2d 832 (1962). Because Reach’s action was not filed until October 25, 1976, the claim is barred unless the one-year statute of limitations was tolled or suspended. Was the statute tolled by Reach having sought administrative review or by commencing his action in the federal court?

Vol. 14, Code of Alabama app., § 666 (Recompiled 1958), provides in part:

“An appointing authority may dismiss or demote an employee holding permanent status for just cause whenever he considers the good of the service will be served thereby, for reason stated in writing, served on the affected employee, and a copy furnished to the director, which action shall become a public record. The dismissed or demoted employee may within ten days after notice, appeal from the action of the appointing authority by filing with the board and the appointing authority a written answer to the charges. The board must order a public hearing of such charges, and if the board finds the employee not guilty, the board shall order the reinstatement of the employee under such conditions as the board may determine. If the board finds the employee guilty, the board shall determine whether the employee shall be dismissed, demoted, suspended, or otherwise disciplined. . . . ”

While Reach was not limited to review of his alleged wrongful dismissal by the Personnel Board, his election to do so tolled the statute of limitations during the pendency of the administrative proceedings. Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, rehearing denied, 494 F.2d 1296 (5th Cir. 1974); Coppotelli v. Howlett, 76 F.R.D. 20 (E.D.Ill.1977); Hunter v. United States, 417 F.Supp. 272 (N.D.Cal.1976); National Cowboy Hall, etc. v. State, etc., 579 P.2d 1276 (Okl.1978); A. Teichert & Son, Inc. v. State, 238 Cal.App.2d 736, 48 Cal.Rptr. 225 (1965).

In moving for reinstatement before the Board based on a failure to conduct the required pre-termination hearing, Reach questioned the propriety of the dismissal from which he appealed. By doing so, he sought a determination that his dismissal was invalid and that he was entitled to reinstatement with back pay to July 24, 1975. The effect of this motion was to place before the Personnel Board the same grievance, claimed against the same party, as he now raises. We hold that the one-year period was tolled as of that date, October 16, 1975.

Jefferson County next contends that the trial court erroneously dismissed indispensable parties, the Personnel Board and its Director, and the judgment should, therefore, be reversed. The County claims that the Personnel Board and its Director are made indispensable parties by the operation of Vol. 14, Code of Alabama app., § 668 (Recompiled 1958), which reads in part:

“It shall be unlawful for the fiscal officer of either a county or any municipality affected by this subdivision to draw, sign, issue or authorize the drawing, signing, or issuing of any warrant on the treasurer or other disbursing officer of either the municipality or the county for the payment of or for the treasurer or other disbursing officer to pay any salary or compensation to anyone holding any position subject to the provisions of this subdivision unless the estimate, payroll, warrant, or account for such salary or compensation containing the name of the person to be paid shall bear the certification of the director of personnel, that the person or persons named in the estimate, payroll, warrant, or account are holding hereunder and are legally entitled to receive the sums stated therein. . .

Reach had not received a certificate of entitlement to salary or compensation from the Director of the Personnel Board. The County submits that relief cannot be granted without either the necessary certificate or the Director and the Board before the court. In support of its position, the County cites Bryant v. Hallmark, 257 Ala. 677, 60 So.2d 855 (1952). In Bryant, the court considered the claim of a city employee seeking payment for services rendered during hours in which he worked overtime. Because the employee had not been certified to receive payment by the Director of the Personnel Board, as required by § 668, supra, he could not prevail. As noted by the Bryant court, the employee’s remedy was provided by § 668, “ . . . ‘If the director wrongfully withholds certification of the payroll voucher or account of any employee, such employee may institute a proceeding to compel the director to certify such payroll voucher or account.’ ” (257 Ala. at 678, 60 So.2d at 856)

While we agree with the Bryant decision, it is inapplicable to the instant case. The claim presented in Bryant was one in assumpsit or implied contract. Bryant, supra at 679, 60 So.2d 855. It was based on a right to receive compensation earned by the employee. Reach’s claim is ex delicto. He seeks damages for the injury caused by the failure to afford him due process resulting in his wrongful dismissal. He is not required by § 668 to secure the certification of the Director of the Personnel Board as a prerequisite to the recovery of such damages. Therefore, neither the Personnel Board nor its Director is an indispensable party.

Finally, the County argues that the trial court’s judgment should be reversed because there was no intentional violation of due process and such an award of back pay would be inequitable. The County submits that, in dismissing Reach, all of the requirements of the Civil Service Rules and Regulations were obeyed. It is emphasized by the County that, prior to Reach’s action in federal district court, there was no judicial or legislative pronouncement that a pre-termination hearing was a prerequisite to the dismissal of a deputy sheriff. See: Guthrie v. Civil Service Board of the City of Jasper, 342 So.2d 372 (Ala.Civ.App.1977); Simpson v. Van Ryzin, 289 Ala. 22, 265 So.2d 569 (1972). Therefore, the County submits that the position espoused in Jinks v. Mays, 464 F.2d 1223 (5th Cir. 1972), should be adopted and damages for back pay denied.

We disagree. The trial court found that Reach had been dismissed without a pre-termination hearing and that he thereby suffered lost wages. This dismissal has been held a violation of due process by the federal district court and we also recognize it as a wrongful act. To deny Reach damages would be to hold that if one injures another by a wrongful act done in good faith, the wrongdoer may escape liability.

We agree with the County, however, that the trial court erred in awarding back pay from July 24, 1975, the date of Reach’s wrongful dismissal, to June 7, 1976, the date of his reinstatement by Sheriff Bailey. The damage award should have covered only the period from July 24, 1975, to October 27, 1975, the date on which the Personnel Board made its decision to dismiss Reach after he was given a full evidentiary hearing.

The wrong of which Reach complains is his dismissal from employment without an opportunity to respond to the charges of misconduct. The proper period for measuring damages is the time during which he was denied wages beginning on the day of his wrongful dismissal and ending on the day the Personnel Board filed its decision after affording him a full hearing. Thurston v. Dekle, supra at 1269; Barber v. State Personnel Board, 18 Cal.3d 395, 134 Cal.Rptr. 206, 556 P.2d 306 (1976); Skelly v. State Personnel Board, 15 Cal.3d 194, 124 Cal.Rptr. 14, 539 P.2d 774 (1975); Arnett v. Kennedy, 416 U.S. 134, 94 S.Ct. 1633, 40 L.Ed.2d 15 (1974); Tudor v. University Civil Service Merit Board, 131 Ill.App.2d 907, 267 N.E.2d 341 (1971).

Therefore, we affirm the trial court’s order awarding damages but reverse and remand for a determination of the amount of damages due for the period in which Reach was improperly denied his wages, i. e., from July 24, 1975, to October 27, 1975.

AFFIRMED IN PART: REVERSED IN PART AND REMANDED.

JONES, EMBRY and BEATTY, JJ., concur.

MADDOX, J., concurs in result.


author: JONES, Justice. MADDOX, Justice EMBRY, Justice

text:
    Joyce T. THOMAS v. LIBERTY NATIONAL LIFE INSURANCE COMPANY, a Corp.
    77-560.
    Supreme Court of Alabama.
    Jan. 26, 1979.
    Rehearing Denied March 9, 1979.

      William H. Mills, of Rogers, Howard, Redden & Mills, Birmingham, for appellant.
    Ralph B. Tate, William N. Ray, John S. P. Samford, Birmingham, for appellee.
   JONES, Justice.

Appellant, Ms. Joyce Thomas, was the named beneficiary of four industrial life insurance policies issued by Appellee, Liberty National Life Insurance Company. Ms. Thomas filed suit in the Circuit Court of Jefferson County to recover interest on the face amount of the policies accruing between the dates when proof of loss was submitted and when the face amount of the policies was paid. The complaint alleged that Liberty National has paid Ms. Thomas the face amount of the policies, but no interest, and that Liberty National had a consistent practice of not paying interest on the benefits due on industrial life insurance policies.

The complaint sought certification as a class action on behalf of all beneficiaries similarly situated. The complaint was amended to add an allegation that the aggregate claim of the class exceeds the sum of $500. Ms. Thomas’ individual claim is less than $80.00.

Liberty National filed a motion for summary judgment. The trial Court concluded the Defendant’s motion was due to be granted for either of two reasons:

(1) The circuit court lacked subject matter jurisdiction in that the matter in controversy did not exceed $500 because the Plaintiff’s individual claim did not exceed that sum and the individual claims of the class members may not be aggregated to reach the jurisdictional amount.

(2) A beneficiary of a life insurance policy, as a matter of law, may not recover interest on the face amount of the policy from the time proof of loss is filed until the time the claim is actually paid, if the payment of the principal has been made by the insurer and accepted by the beneficiary.

We reverse and remand.

I.

The first issue in this case is whether the circuit court has jurisdiction in a class action where the individual claims of the members of the Plaintiff class are for less than $500, but where the aggregate sum claimed exceeds that amount (damages in the amount of $1,000,000 are sought for the potential class as a whole). We hold that the circuit court has jurisdiction in a class action so long as the aggregate “amount in controversy” exceeds $500.

Initially, we recognize the holding of Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969), construing F.R. Civ.P. 23. In Snyder the Supreme Court of the United States held that aggregation of claims was not to be allowed in order to meet the $10,000 minimum amount for invoking Federal diversity jurisdiction. It is true, as a general rule, that we look at the construction placed on the Federal Rules of Civil Procedure by the Federal courts in order to interpret the present Alabama Rules of Civil Procedure, because our rules are based on, and in a large part an adaptation of, the Federal rules. See, Committee Comments, ARCP 1. We note, however, the holding in Snyder is not applicable to the jurisdiction of State courts no matter how well it fits into the Federal scheme of things. Judson School v. Wick, 108 Ariz. 176, 494 P.2d 698 (1972). Indeed, the Snyder Court reasons:

“Suits involving issues of state law and brought on the basis of diversity of citizenship can often be most appropriately tried in state courts.”

Our instant holding, then, in providing an appropriate forum for the trial of these state law issues, is totally consistent with the rationale of Snyder.

The underlying premise for the Snyder decision is that the Federal District Court is a court of limited jurisdiction. See 28 U.S.C., § 1331, et seq. Its jurisdiction is especially limited in diversity cases. See, 28 U.S.C., § 1332. To the contrary, our circuit courts are courts of general jurisdiction. The Constitution of Alabama of 1901, amend. 328, § 6.04, provides:

The circuit court shall exercise general jurisdiction in all cases except as may otherwise be provided by law.

On the other hand, § 6.05 provides for the establishment of the district court system, stating:

“The district court shall be a court of limited jurisdiction . . . .”

While the circuit court system has been long established as the court of general jurisdiction in our State, the legislation implementing the district court system, § 12-12-1, et seq., Ala.Code 1975, states that the District Court of Alabama is a trial court of limited jurisdiction, established and effective January 16, 1977. There is no question that prior to the creation of the district court system in this State the circuit court would have had jurisdiction over the present class action.

It has been held that every doubt is resolved in favor of retention rather than divestiture of jurisdiction. Furthermore, there is a presumption against divestiture of jurisdiction from a court to a lower court. Paley v. Coca-Cola Co., 389 Mich. 583, 209 N.W.2d 232 (1973); see also, 21 C.J.S. Courts § 92. Gould v. Hayes, 19 Ala. 438 (1851), held that the original jurisdiction of the Court of Chancery is not affected by the statutory jurisdiction conferred upon the orphan’s court, except where prohibitory or restrictive words are used in denying to the Court of Chancery the exercise or continuance of its jurisdiction. Stated alternatively, the holding in this case is that there is a presumption against divestiture of jurisdiction.

We find that, where the various statutes governing the jurisdiction of the district court and the circuit court are read together, there is no clear and unequivocal showing of an intent by the legislature to divest the circuit court of subject matter jurisdiction in class actions. This is true whether or not any individual plaintiff can recover the minimum $500 jurisdictional amount, so long as the aggregate claim of the plaintiff class is in excess of $500. The district court system was not established, nor is it equipped, to handle the complexities of a class action. Our present Unified Court System was established in order to expedite the business of the judiciary and to afford speedy, just and inexpensive relief to parties involved in a lawsuit. The District Court Committee Comments, ARCP 23, specifically provide:

The complexities of class actions and the jurisdictional limitations of the district court make it necessary to withhold applicability of Rule 23 [to the district court]. Of course the circuit courts do not have jurisdiction for claims of less than $500.00 and the only sensible solution to this jurisdictional problem would be to permit the aggregation of claims in the circuit court to exceed the $500.00 limitation.

While the Committee Comments are not binding, we find them highly persuasive in this instance. There is no plain and adequate remedy for numerous small claims involving similar questions of law and fact in the district court. Thus, we cannot impute an intent on the part of our legislature to deprive litigants, such as the potential class involved in this case, of a common forum to seek relief for their common complaint, which, though small individually, is quite large in the aggregate.

We think that the spirit of both our present rules of procedure allowing class actions, and the statutory provisions setting forth the jurisdiction of the courts in this State, mandate that aggregation be allowed in order to meet the jurisdictional amount of the circuit court. Our decision today is not in conflict with ARCP 82 in that we have in no way enlarged the jurisdiction of the circuit court by construction of a rule of procedure, but have only interpreted the jurisdictional statute in this State to allow aggregation of claims in class actions for jurisdictional amount purposes.

II.

Having determined that the Circuit Court has jurisdiction over this action, we turn to the second issue involved in this case: Whether a beneficiary of a life insurance policy, after acceptance of the principal amount, can recover interest on the face amount of the policy from the time proof of death is accepted until the time the claim is paid. We hold that Appellant’s claim to recover interest in this case is not barred as a matter of law.

Section 8-8-8, Ala.Code 1975, provides:
All contracts, express or implied, for the payment of money, or other thing, or for the performance of any act or duty bear interest from the day such money, or thing, estimating it at its money value, should have been paid, or such act, estimating the compensation therefor in money, performed.

It is well settled that, under this section, interest on the principal due on an insurance policy is properly payable from the date that proof of death was accepted by the insurer. North Carolina Mutual Life Insurance Co. v. Terrell, 227 Ala. 410, 150 So. 318 (1933). See also State Farm Mutual Automobile Insurance Co. v. Reaves, 292 Ala. 218, 292 So.2d 95 (1974) (interest payable covering period between filing of proof of loss and date of judgment against insurer).

Appellee does not dispute that interest is generally owed from the time proof of death is submitted. Appellee argues, however, that, where interest is provided for otherwise than under contract, it does not constitute a distinct claim recoverable after the acceptance of the principal.

This Court has a long history of cases holding that, where a statute governs the rights, obligations, and duties of an insurer or insured, that statute is read into and becomes a part of the insurance contract. See, e. g., Ginsberg v. Union Central Life Insurance Co., 240 Ala. 299, 198 So. 855 (1940) (§ 27-15-18, Ala.Code 1975, Incontestability Clause); State Farm Mutual Automobile Insurance Co. v. Reaves, 292 Ala. 218, 292 So.2d 95 (1974) (§ 32-7-23, Ala.Code 1975, Uninsured Motorist Statute); General Mutual Insurance Co. v. Ginn, 283 Ala. 470, 218 So.2d 680 (1969) (§ 27-14-7, Ala.Code 1975, Effect of Misrepresentation in Policy Application).

In Aetna Life Insurance Co. v. Wade, 210 Ala. 170, 97 So. 636 (1923), in construing § 8-8-8, Ala.Code 1975 (then § 4620, Alabama Code of 1907), this Court stated:

“The law existing at the time of the issuance of this policy entered into and became a part of the contract, and under the provisions of the foregoing statute we think interest was demandable from the time the policy was due and payable by virtue of the contract entered into.” (Emphasis added.)

It is apparent that § 8-8-8, Ala. Code 1975, became a part of the insurance contract and, therefore, became a contractual right. The law is settled that if interest is provided for by contract, a separate action for interest may be maintained even after acceptance of the principal amount. Semmes Nursery, Inc. v. McDade, 288 Ala. 523, 263 So.2d 127 (1972); Alabama City, G. & A. Ry. Co. v. City of Gadsden, 185 Ala. 263, 64 So. 91 (1913).

Admittedly, this State has a long line of cases distinguishing statutory interest from contractual interest. Westcott v. Waller, 47 Ala. 492 (1872); Hunnicutt Lumber Co. v. Mobile & Ohio Railroad Co., 2 Ala.App. 436, 57 So. 73 (1911); Louisville & Nashville and N. R. R. Co. v. Elmore and Brame, 10 Ala.App. 627, 65 So. 695 (1914). These cases are in line with the general rule regarding the collectability of interest. At 47 C.J.S., Interest, § 71, it is stated:

“Where interest is provided for by contract and is due and payable, it constitutes a specific claim for which an independent action may be brought . On the other hand, where interest is recoverable otherwise than under contract, it does not constitute a distinct claim and can only be recovered with the principal by action.”

We have carefully considered these cases and disagree with the reasoning that allows the collection of interest after the acceptance of principal when the right to interest is expressed in the contract, but not when the right to interest is mandated by statute. We have searched in vain and find no basis for the distinction, especially in the light of our cases which would read the statute into the contract, making it a part of the agreement.

We note Liberty National does not contend that the principle of accord and satisfaction is here applicable; and we agree that this principle cannot be invoked to bar recovery. Indeed, the principle of accord and satisfaction would be a more viable defense if the action sought to establish the right to contractual interest after the acceptance of the principal amount— both parties being equally aware of their rights. See, 1 Am.Jur.2d, Accord and Satisfaction, § 1, at 301.

If we were to rule that interest could not be collected under the circumstances as alleged by Appellant in this case, we would effectively allow insurers to escape from a statutorily imposed obligation, without any remedy for Appellant, short of returning the check for the payment of the principal amount and filing a suit seeking to regain this principal along with the small amount of interest owed for the short period from the filing of proof of loss until the tender of the face amount of the policy. It is unreasonable to expect a beneficiary or an insured to take such costly and time-consuming measures, that is, to forego immediate acceptance of the principal amount in order to pursue at his own expense his remedy for the relatively small additional amount of interest.

Accordingly, the trial Court erred in granting summary judgment.

REVERSED AND REMANDED.

FAULKNER and BEATTY, JJ., concur.

MADDOX and ALMON, JJ., concur as to Part I and dissent as to Part II.

EMBRY, J., dissents as to Part I and concurs as to Part II.

TORBERT, C. J., and SHORES, J., re-cuse.

BLOODWORTH, J., not sitting.

MADDOX, Justice

(concurring in part; dissenting, in part).

I concur that the claims could be aggregated, but I am constrained to follow what the majority concedes is the majority rule that “where interest is recoverable otherwise than under contract, it does not constitute a distinct claim and can only be recovered with the principal by action.” I think that is the intent of § 8-8-8, Code of Ala. 1975, and that this statutory provision was not written into the contract, as the majority holds.

ALMON, J., concurs.

EMBRY, Justice

(concurring in part and dissenting in part):

I concur with the majority opinion where it holds that a beneficiary of a life insurance policy can recover interest on the face amount of the policy from the time proof of death is accepted until the time the claim is paid.

I respectfully dissent from that portion of the majority opinion holding the circuit court has jurisdiction over a class action in which each of the individual claims of the members of the class is for a sum less than $500, but in the aggregate exceeds that amount. In Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969), the United States Supreme Court refused to allow aggregation of claims to meet the federal jurisdictional amount set by Congress. Justice Black, writing for the majority, held that to allow aggregation of claims would defeat the congressional purpose of setting a jurisdictional amount requirement. He also said that it would run counter to Rule 82, F.R.C.P. which provided that “[tjhese rules shall not be construed to extend or limit the jurisdiction of the United States district courts . . .

There is no valid distinction between this case and our own. Our Rule 82(a), A.R.C.P. provides “These rules shall not be construed to extend or limit the jurisdiction of the courts of Alabama.” The legislature, pursuant to § 6.04 of Amendment No. 328 to the Constitution of 1901, has seen fit to limit the general jurisdiction of the circuit courts in civil cases to those in which the matter in controversy exceeds $500. § 12-11-30(1), Code 1975. Clearly, to allow an aggregation of claims to meet this amount would extend the jurisdiction of the circuit court beyond that intended by the legislature.

I dissent from the majority opinion which allows aggregation and permits the circuit court to entertain the aggregated claims as a class action. I would leave the individual claims to be pursued in the Small Claims Court. Therefore, I would affirm the judgment below regarding aggregation.


text:
    Donald E. SANFORD, as Executor of the Estate of Ann Simerly Stair, Deceased v. WESTERN LIFE INSURANCE COMPANY.
    77-635.
    Supreme Court of Alabama.
    Jan. 26, 1979.
    Rehearing Denied March 2, 1979.
    Joseph G. L. Marston, III, Prattville, for appellant.
    Richard B. Garrett, Montgomery, for ap-pellee.
   SHORES, Justice.

This is an appeal by Donald E. Sanford, as Executor of the Estate of Ann Simerly Stair, his mother. He claims error in two of the trial court’s rulings: 1) The striking of a fraud count because “ . . . the cause of action did not survive the death of Ann Simerly Stair, pursuant to § 6-5-462 of the 1975 Code of Alabama,” and 2) the striking of his demand for damages for mental anguish and physical suffering in the contract count. We affirm both rulings by the trial court.

Relevant portions of Sanford’s complaint are as follows:

“COMPLAINT
“This is a civil action to recover actual and special damages resulting from either the breech [sic] by the Defendants of a certain insurance contract or from a fraud perpetrated on the Plaintiff’s Testatrix by the Defendants or both, as more particularly appears below:
“A.
“THE PARTIES
“The following are parties to this suit:
“1. The Plaintiff, Donald E. Sanford, is a resident of Prattville, Autauga County, Alabama. He brings this suit as Executor for the Estate of Ann Simerly, who will be hereinafter referred to as ‘Mrs. Stair’ and who resided in Prattville, Autauga County, Alabama, immediately prior to her death on or about July 16, 1977. By order of the Honorable Probate Court of Autauga County, Alabama, the Plaintiff was named as Executor of the Estate of Mrs. Stair on July 27, 1977.
“2. The Defendant, Western Life Insurance Company, which will be hereinafter referred to as ‘Western Life’, is a Minnesota Corporation licensed to do business in Alabama and maintains a business office and does business at 472 South Lawrence Street, Montgomery, Montgomery County, Alabama.
“3. The Defendant, St. Paul Life Insurance Company, which will be hereinafter referred to as ‘St. Paul Life’, is a Minnesota Corporation licensed to do business in Alabama and maintains a business office and does business at 472 South Lawrence Street, Montgomery, Montgomery County, Alabama.
“4. The Defendant, The St. Paul Life and Health Insurance and Investment Products, Incorporated, which will be referred to hereinafter as ‘St. Paul Investments’, whose true name and other identity is unknown to the Plaintiff but which will be supplied by amendment when they become known, receives mail at the following address: C/O Western Life Insurance Company, P.O. Box 78, St. Paul, Minnesota, 55102. St. Paul Investment is not licensed to do business in Alabama, but the Plaintiff believes that St. Paul Investment does business in Alabama through the other Defendants.
“5. On the basis of various communications with the Defendants, the Plaintiff believes that the Defendants are affiliated and do business under the name ‘The St. Paul’.
“B.
“THE INSURANCE POLICY OR CONTRACT
“1. On or about October 5, 1967, Mrs. Stair entered a certain insurance contract or policy, which will be hereinafter referred to as ‘the policy’. A copy of the policy is attached hereto marked as Plaintiff’s Exhibit ‘A’.
“2. Under the policy the Defendants agreed, in consideration of a certain annual premium to be paid by Mrs. Stair in monthly installments, to pay Mrs. Stair a benefit in the event that she became totally disabled as a result of sickness.
“3. From October 5, 1967, until her death on or about July 16, 1977, Mrs. Stair paid the premium set by the policy in each of the agreed upon monthly installments, and the policy remained in full force and effect until the latter date.
“C.
“THE CAUSE OF ACTION
“1. On or about February 22, 1977, Mrs. Stair became totally disabled within the meaning of the policy as a direct result of a sickness, and remained totally disabled for the remainder of her life.
“2. A proper claim was made by Mrs. Stair to the Defendants for the benefits referred to in Part ‘B’, 2, above, but the Defendants refused to pay said benefit except for a brief period during which Mrs. Stair was hospitalized.
“3. The reason given by the Defendants for their refusal to pay the promised benefit was that Mrs. Stair was retired.
“4. (a) If the policy did, in fact, cover Mrs. Stair’s disability, not withstanding her retirement, then:
“(i) in failing to pay the said benefits, the Defendants breeched [sic] the contract, or, in the alternative,
“(ii) the Defendants defrauded Mrs. Stair of the benefits due her under the policy.
“(b) If because of her retirement Mrs. Stair’s disability was not covered by the policy, then, in that event, the Defendants perpetrated a fraud on Mrs. Stair in that the Defendants by their words, actions and ommisions [sic] falsly [sic] led Mrs. Stair to believe that notwithstanding her retirement, she would have the right to the benefits if she became disabled within the meaning of the policy as a result of sickness and, as a result of said false belief induced in her by the Defendants and in reliance thereon, Mrs. Stair took certain actions, including purchasing the policy from the Defendants, paying the Defendants a premium of $13.07 each month from October of 1967 until her death in July of 1977, and desisted from certain other actions, including making other arrangements for her disability during her retirement, all to her detriment.
“D.
“DAMAGES
“1.
“DAMAGES FOR BREECH [sic] OF CONTRACT OR FOR FRAUD WITH REGARD TO BENEFITS
“If Mrs. Stair’s disability was in fact covered by the policy, notwithstanding her retirement, then; as a result of the Defendants’ breech [sic] of the policy or fraud with regard to the benefits, Mrs. Stair was deprived of her benefits and suffered grave mental anguish, the latter resulting in physical suffering as follows:
“(a) Actual damages:
“(1) Benefits due under the policy:
4.5 months disability - $900.00
Less paid by the Defendants - $120.00
Total $780.00
“(2) For mental anguish $75,000.00
“(3) For physical suffering 25.000.00
“Total actual damages $100,780.00
“(b) Punitive Damages for fraud of benefits - $1,007,800.00
“Therefore, the plaintiff demands judgment in the amount of $1,108,580.00.”

Before addressing the merits of this appeal, we must clarify the posture in which this matter is presented. This action was commenced after the death of Ann Simerly Stair. All of the defendants except Western Life Insurance Company were dismissed. Sanford has since abandoned his claim that Western Life fraudulently induced Stair to buy the policy and keep it in force. Western Life has admitted liability in the amount of $780.00 based on the claim for benefits and partial summary judgment was entered accordingly. That order was not appealed. We now proceed to the merits.

Sanford asserts a claim for relief for “fraud of insurance benefits.” For the purposes of this discussion, we assume, without deciding, that such a claim exists in Alabama. In essence, Sanford’s claim for relief is identical to the tort of “bad faith,” recognized in California and defined as follows:

“Every contract contains an implied in law covenant of good faith and fair dealing; this covenant provides that neither party will interfere with the rights of the other to receive the benefits of the agreement. (Gruenberg v. Aetna Ins. Co., supra, 9 Cal.3d 566, 574, 108 Cal.Rptr. 480, 510 P.2d 1032; Communale v. Traders & General Ins. Co., 50 Cal.2d 654, 658, 328 P.2d 198, 68 A.L.R.2d 883.) Breach of the covenant provides the injured party with a tort action for ‘bad faith,’ notwithstanding that the acts complained of may also constitute a breach of contract. (Crisci v. Security Ins. Co., supra, 66 Cal.2d 425, 430, 58 Cal.Rptr. 13, 426 P.2d 173; Fletcher v. Western National Life Ins. Co., supra, 10 Cal.App.3d 376, 401, 89 Cal.Rptr. 78.) The cause of action is applicable to all insurance contracts, including policies of title insurance. (Kapelus v. United Title Guaranty Co., 15 Cal. App.3d 648, 653, 93 Cal.Rptr. 278.)” Jarchow v. Transamerica Title Ins. Co., 48 Cal.App.3d 917, 940, 122 Cal.Rptr. 470, 486 (1975).

The fountainhead of such a claim would be that the defendant insurance company has breached its duty of good faith and fair dealing by interfering with Stair’s right to receive the benefits of the policy.

Because Stair died before this action was commenced, the trial court ruled that her action did not survive under § 6-5-462, Code of Alabama 1975, which reads:

“In all proceedings not of an equitable nature, all claims upon which an áction has been filed and all claims upon which no action has been filed on a contract, . express or implied, and all personal claims' upon which an action has been filed, except for injuries to the reputation, survive in favor of and against personal representatives; and all personal claims upon which no action has been filed survive against the personal representative of a deceased tort-feasor.”

Sanford contends this ruling was error because his fraud claim constituted an action “on a contract” as contemplated by the statute. We disagree.

In asking redress against Western Life for defrauding Stair of insurance benefits, Sanford necessarily avers a breach of duty imposed by law whether that duty be of good faith, fair dealing or honest disclosure; although such a duty, if it exists, must arise from the relationship of the parties as created by the insurance contract. This does not mean, however, that an action for breach of this duty is one “on a contract.” Rather, the contract merely establishes the relationship from which such a legally imposed duty could spring. See, e. g.: Sewell v. Grand Lodge of Int’l Ass’n of Mach. & Aero Workers, 445 F.2d 545 (5th Cir. 1971), cert. denied, 404 U.S. 1024, 92 S.Ct. 674, 30 L.Ed.2d 674 (1972); United States Fidelity & Guaranty Co. v. Birmingham Oxygen Service, Inc., 290 Ala. 149, 274 So.2d 615 (1973); Paul v. Escambia County Hospital Board, 283 Ala. 488, 218 So.2d 817 (1969); Vines v. Crescent Transit Co., 264 Ala. 114, 85 So.2d 436 (1956).

The fraud action brought by Sanford is ex delicto in nature. As such, it does not survive in favor of the personal representative of a deceased person under the provisions of § 6-5-462, supra. Standard Accident Ins. Co. v. Whitset, 270 Ala. 334, 118 So.2d 922 (1960).

We are not persuaded by Sanford’s argument that Western Life is estopped to raise the non-survival of Stair’s claim. He asserts: 1) That the insurance contract contains a provision which prevented Stair from bringing an action for sixty days; 2) that even if this provision were waived, Stair had a contractual right not to bring her action within the sixty-day period; and 3) that the placing of such a provision in the contract was sufficient affirmative conduct by Western Life to invoke the doctrine of estoppel. The contract contains the following provision:

“No action at law or in equity shall be brought to recover on this Policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this Policy . .

The language of this provision contemplates an action ex contractu “to recover on this Policy.” It addresses only the time in which an action to recover on the contract may be commenced and does not limit the rights of a party to bring an action sounding in tort. The provision could not have been invoked to prevent Stair from bringing an action ex delicto against Western Life, and it cannot be relied upon to excuse her delay. We cannot accept the notion that the mere placing of a provision into a contract is sufficient affirmative conduct to invoke the doctrine of estoppel so as to affect the rights of the litigants in an action to which the provision has no application.

Finally, we consider Sanford’s contention that it was error to strike his demand for damages for mental anguish and physical suffering resulting from Western Life’s breach of the insurance contract. He has carefully surveyed the Alabama decisions allowing recovery of such damages in actions on contracts. Alabama Water Service Co. v. Wakefield, 231 Ala. 112, 163 So. 626 (1935)—(breach of contract to provide water service); Becker Roofing Co. v. Pike, 230 Ala. 289, 160 So. 692 (1935)—(breach of warranty regarding roofing of residence); F. Becker Asphaltum Roofing Co. v. Murphy, 224 Ala. 655, 141 So. 630 (1932)—(breach of warranty regarding roofing of residence); Nashville, C. & St. L. Ry. v. Campbell, 212 Ala. 27, 101 So. 615 (1924)—(breach of contract to deliver a passenger to a certain railroad station); Pullman Co. v. Meyer, 195 Ala. 397, 70 So. 763 (1916)—(breach of contract to provide special accommodations).

As a general rule, mental anguish is not a recoverable element of actual damages growing out of a breach of contract. Birmingham Water Works Co. v. Vinter, 164 Ala. 490, 51 So. 356 (1910). Certain exceptions to this rule have been stated in the cases relied upon by the appellant. F. Becker Asphaltum Roofing Co., supra. In that case, the following rationale for the exception was quoted with approval from 8 R.C.L. page 529, § 83:

“ . . ‘Yet where the contractual duty or obligation is so coupled with matters of mental concern or solicitude, or with the feelings of the party to whom the duty is owed, that a breach of that duty will necessarily or reasonably result in mental anguish or suffering, it is just that damages therefor be taken into consideration and awarded.’ . . ” (224 Ala. at 657, 141 So. at 631.)

We agree with the trial court that this case does not fall within an exception to the general rule.

Nothing more being shown for reversal, the judgment appealed from is affirmed.

AFFIRMED.

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


author: FAULKNER, Justice.

text:
    MONTGOMERY COUNTY COMMISSION et al. v. Walker HOBBIE, Jr., etc.
    78-199.
    Supreme Court of Alabama.
    March 2, 1979.

      Morris S. Dees, Montgomery, for appellant, T. J. Hendrix.
    J. Knox Argo, Montgomery, for Montgomery County Commission, appellant.
    Charles A. Graddick, Atty. Gen. and Mary Jane LeCroy, Asst. Atty. Gen., Montgomery, for appellee.
   FAULKNER, Justice.

Plaintiffs appeal from an order of the Circuit Court of Montgomery County holding an act of the Alabama Legislature constitutional. Because the Act was not published in accordance with constitutional mandate, we reverse.

Plaintiffs in this suit are plaintiffs and also defendants in a federal action in which on November 15, 1978, the U. S. District Court for the Middle District of Alabama declared the at-large system for election of the Montgomery County Commission unconstitutional. Hendrix v. McKinney, 460 F.Supp. 626 (M.D.Ala.1978). The parties were given 180 days to submit a joint apportionment plan. Preliminary to submitting that plan, plaintiffs filed suit to have Act 468 of the 1977 Legislature declared null and void as violative of § 106 of the Alabama Constitution, and to enjoin the Probate Judge of Montgomery County from conducting elections under the Act. The Circuit Court upheld the Act as a general law with local application to which § 106, Ala.Const., was not applicable.

Act 468 reads as follows:

“AN ACT
“Relating to counties having populations of not less than 150,000 nor more than 180,000 inhabitants according to the 1970 or any subsequent federal decennial census, to redivide such counties into districts for the purpose of electing the county governing bodies.
“Be It Enacted by the Legislature of Alabama:
“Section 1. The provisions of this act shall apply only in counties having populations of not less than 150,000 nor more than 180,000 inhabitants according to the 1970 or any subsequent federal decennial census. Must reside in his district at least six months prior to seeking district election and only those people that reside in each district shall be eligible to vote in said district [sic].
“Section 2. Any county to which this act applies is hereby divided into five districts numbered 1, 2, 3, 4 and 5 for the purpose of electing members of the county governing body. The five districts shall be described as follows:
“District “No. Description Total Percent of Population Deviation
“1 In the county to which this act applies: 33,642 + 0.25
Tract 1 1,215
Tract 2 4,545
Tract 3 Except ED 34 2,272
Tract 4 Except ED 38, 39, 41 5,859
Tract 6 Except Blocks 403, 404, 411 501, 511 of ED 99; ED 100 4.447
“District Total “No. Description Population Percent of Deviation
“1 In the county to which this act applies: — Continued
Tract 7: Except Blocks 108, 202, 204 205, 805, 306 of Ed 124; ED 125, 126 and Blocks 401, 402 403, 407, 408 of ED 127 2,894
Tract 14: ED 137, except Blocks 409, 411, 412, 413, 414, 514, 515, 516 515
Tract 15: ED 120, 121, 122, 123 2,958 Montgomery North Division:
All except ED 18, 20, 21 5,763
Tract 9 3,174
District 1 is composed primarily of Legislative District 77, except as amended below:
Deletions: Tract 5 ED 50; Blocks 409, 410, 411, 412, 413, 414, 514, 515, 516, from ED 137; Tract 14 ED 183 from Tract 26 ED 161, 162, from Tract 53, ED 185, 186 187 from Fairview Division
Addition:
Tract 9
“2 In the county to which this act applies: 33,587 + 0.09
Tract 22: ED 156, 158 1,875
Tract 24: ED 73, Blocks 207, 208, 210, 211, 212, 213, 214, 301, 302, 303, 304 412
Tract 29 1,354
Tract 31 3,775
Tract 32 1,348
Tract 56: ED 145, 146C 413
Tract 53 751
Montgomery Division 3,027
Montgomery North Division:
ED 18, 20, 21 888
Mitylene Division 1,481
Mount Meigs Division 2,318
Pike Road Division 3,775
Pine Level Division 1,798
Ramer Division ' 3,155
Hope Hull Division: ED 196, 197, 198 199, 199B 6,995
Fairview Division: ED 185, 186, 187 221
District 2 is composed primarily of Legislative District 78, except as amended below:
Deletions: ED 157, Tract 22, Crenshaw County portion, and ED 117 of Montgomery North Division.
Additions: Montgomery Division:
Tract 18 ED 163
Tract 19 ED 184
Tract 25 ED 164
Tract 27 ED 182
Tract 9 ED 165
Tract 30 ED 166, 167
Tract 20 ED 173
Tract 23 ED 170
“District Total Percent of “No. Description Population Deviation
“2 In the county to which this act applies: — Continued
Tract 28 ED 178
Tract 33 ED 181
Tract 53
Hope Hull Division ED 200
Fairview Division ED 185,
186, 187
“3 In the county to which this act applies: 33,447 -0.33
Tract 3: ED 34 1,202
Tract 4: ED 38, 39, 41 3,731
Tract 5 3,547
Tract 16 5,163
Tract 17 6,622
Tract 18 4,005
Tract 19 2,773
Tract 25 2,507
Tract 26 1,907
Tract 27 1,953
Tract 51: ED 25 B 27
Tract 54: ED 24 10
District 3 is composed primarily of Legislative District 79, except- as amended below:
Deletions: Montgomery Division:
Tract 18 Ed 163
Tract 19 ED 184
Tract 25 ED 164.
Tract 27 ED 182
Additions: ED 50 from Tract 5
ED 183 from Tract 26
“4 In the county to which this act applies: 33,645 + 0.26
Tract 10 6,820
Tract 11 9,351
Tract 12 5,373
Tract 23: ED 76, Blocks 504, 505, 506, 508; ED 74, Ed 75 2,249
Tract 24: Except ED 73, Blocks 207 208, 210, 211, 212, 213, 214, 301, 302, 303, 304 4,670
Tract 30 1,432
Fairview Division: Except Ed 185,186, 187,190, 191, 192, 193 3,750
District 4 is composed primarily of Legislative District 80, except as amended below:
Deletions: Tract 9, Tract 13 ED 133
Additions: Fairview Division: Except ED 185, 186, 187, 190, 191, 192, 193 Tract 23: ED 74, ED 75, ED 76, Blocks 304, 504, 505, 506, 508
“5 In the county to which this act applies: 33,469 -0.27
Tract 6: Blocks 403, 404, 411, 501, 511 of Ed 99; ED 100 482
Tract 7: ED 125, 126; and Blocks 401 402, 403, 407, 408 of ED 127;
“District Total Percent of “No. Description Population Deviation
“5 In the county to which this act applies: — ’Continued
and Blocks 108, 202, 204, 205 305, 306 oí ED 124 CO <£> o
Tract 13: ED 130, 131, 132, 133, 134 to UK o
3,628 Tract 14: ED 135, 136, 138, 139 and Blocks 409, 410, 411, 412, 413 414, 514, 515 of ED 137
2,793 Tract 15: ED 117, 118, 119
4,431 Tract 20
4,377 Tract 21
6,121 Tract 22: Ed 151, 152, 153, 154, 155, 157
2,116 Tract 23: Except ED 75, ED 75, Blocks 304, 504, 505, 506, 508 of ED 76
2,545 Tract 28
2,736 Tract 33
District 5 is composed primarily of Legislative District 81, except as amended below:
Deletions: Montgomery Division
Tract 20 ED 173
Tract 23 ED 170
Tract 28 ED 178
Tract 33 ED 181
Additions: Tract 6: Blocks 403, 404,
411, 501, 511 of ED 99
Tract 7: Blocks 108, 202,
204, 205, 305, 306, of ED
124; ED 125; Blocks 401,
402, 403, 407, 408 of ED 127
Tract 13: ED 133; Blocks
409, 410, 411, 412, 413, 414,
514, 515, 516 of ED 137
Tract 22: ED 157
“All tract, districts and enumeration districts (ED’s) referred to herein are those adopted pursuant to the decree of August 31, 1973 from the United States District Court for the Middle District of Alabama, Northern Division entitled Sims, Farr, United States et a 1. vs. Amos, Pelham, Owen, et a 1.
“The members of the county governing body of any county to which this act applies shall hereafter be elected from the five districts hereby created, one representative from each district.
“Attached herto as Appendix I [not included in this opinion] is a color-coded map, and each colored district will substantially correspond to the appropriate district herein described.
“Section 3. All laws or parts of laws which conflict with this act are hereby repealed.
“Section 4. This Act shall become effective January 1, 1980 upon its passage and approval by the Governor, or upon its otherwise becoming a law.
“Approved May 11, 1977.
“Time: 1:30 P.M.
“I hereby certify that the foregoing copy of an Act of the Legislature of Alabama has been compared with the enrolled Act and it is a true and correct copy thereof.
“Given under my hand this 12th day of May, 1977.
“JOHN W. PEMBERTON “Clerk of the House”

Incorporated into the Act was a color-coded map of Montgomery County.

The Act was introduced by Rep. Alvin Holmes of Montgomery in response to a 1976 ruling by the District Court that the at-large system of election unconstitutionally diluted the black vote in Montgomery. Hendrix v. Joseph, No. 74-262-N (M.D.Ala., Feb. 26, 1976); remanded 559 F.2d 1265 (5th Cir. 1977). That ruling was stayed pending appeal. Act 468 was not published in Montgomery County although there was extensive publicity and public debate over the proposed legislation.

Section 106 of the Alabama Constitution provides in pertinent part:

“No special, private, or local law shall be passed on any subject not enumerated in section 104 of this Constitution, unless notice of the intention to apply therefor shall have been published, without cost to the state, in the county or counties where the matter or thing to be affected may be situated, which notice shall state the substance of the proposed law and be published at least once a week for four consecutive weeks in some newspaper published in such county or counties, or if there is no newspaper published therein, then by posting the said notice for four consecutive weeks at five different places in the county or counties prior to the introduction of the bill; and proof by affidavit that said notice has been given shall be exhibited to each house of the legislature, and said proof spread upon the journal. The courts shall pronounce void every special, private, or local law which the journals do not affirmatively show was passed in accordance with the provisions of this section.” (Emphasis added.)

It is admitted that this section was not complied with in the instant case. The question instead is whether or not § 106 is applicable at all. Defendants assert that Act 468 is a general law with local application and it is therefore constitutional. If, however, Act 468 is a local law it is clearly void for failure to comply with § 106.

In Belcher v. McKinney, 383 So.2d 136 (Ala.1976), we reiterated the three tests which must be met if an act based on a population classification is to be a general act: (1) “There must be a substantial difference in population; (2) the classification must be made in good faith; and (3) the classification must be reasonably related to the purpose sought to be achieved by the act.” 333 So.2d at 139, citing Reynolds v. Collier, 204 Ala. 38, 85 So. 465 (1920). In addition the act must have application to a shifting class, i. e., “there must exist a possibility of application to other counties which may come within the classification fixed by the statute.” Belcher, supra at 140; Brittain v. Weatherly, 281 Ala. 683, 207 So.2d 667 (1968); State ex rel. Camp v. Herzberg, 224 Ala. 636, 141 So. 553 (1932). The act cannot be “so hedged about with limitations as to amount to a designation rather than a classification.” Camp, supra at 639, 141 So. at 554; Brittain v. Weatherly, supra.

Under these principles of law it is readily apparent that Act 468 is not a general law. The Act relies primarily on the census tracts unique to Montgomery County to establish the voting districts. It refers to the legislative districts of Montgomery County and incorporates a color-coded map of the county. These designations, which could never be applicable to any other county, compose the bulk of the Act. To hold these details severable, as defendants urge us to do, would eviscerate the Act and make it wholly ineffectual in accomplishing its purpose. Act 468 is clearly a local law and under the mandate of § 106 we have no alternative but to pronounce it void for lack of proper publication.

REVERSED AND RENDERED.

TORBERT, C. J., and BLOODWORTH, MADDOX, JONES, ALMON, SHORES, EMBRY and BEATTY, JJ., concur.


author: MADDOX, Justice.

text:
    Randolph M. DODSON v. David J. FANNON et al.
    77-380.
    Supreme Court of Alabama.
    March 9, 1979.
    J. W. Goodloe, Jr., of Vickers, Riis, Murray & Curran, Mobile, for appellant.
    Ralph Loveless, Mobile, for appellees.
   MADDOX, Justice.

This appeal involves the alleged violation of a restrictive covenant.

Several owners of lots in Hampton Downs Subdivision in Mobile sued Dodson, who owned Lot 1 in the subdivision, alleging that Lot 1 was subject to certain restrictive covenants, and that Dodson constructed a dwelling, a stable and a fence on the lot in violation of the restrictive covenants. Plaintiffs sought damages and an injunction prohibiting completion and occupancy of the dwelling unless certain plans and specifications were submitted and approved in accordance with the restrictive covenants. The principal violation of the covenants complained of, and the issue which we address, involves the use by Dodson of wood veneer exterior, instead of 60% brick veneer, as required by the covenants.

The trial court found that the wood siding and fencing were in violation of the covenants but that other alleged violations were waived by the subdivision’s “Architectural Control Committee.” The court ordered Dodson to submit building plans to the architectural committee for the modification of the house so as to include the minimum of 60% brick veneer.

The evidence shows that the owner of the subdivision was originally Hampton Downs, Ltd., a limited partnership composed of Dale Cady, as general partner, and the plaintiffs/appellees here, as limited partners. In early 1976, a dispute arose among the partners, which led to a lawsuit by the limited partners against the general partner, and the subsequent disruption of the partnership. One result of this lawsuit was that Cady was authorized to accept, for the partnership, offers on certain lots. He was the sole member of the Architectural Control Committee for a brief time. Dodson purchased Lot 1, the subject of this controversy, during this period.

Dodson testified that in negotiating with Cady over this purchase, he expressed concern to Cady over the restrictive covenants inasmuch as he desired to use a wood siding on his house instead of brick veneer, and that his purchase would be contingent upon his being able to use wood siding. He further testified that Cady told him that this would pose no problem, and that he definitely had authority to approve all plans. The plans were later examined at Cady’s office, because at that time, Cady Development Company was to construct the house.

Dodson paid $13,500 to Hampton Downs, Ltd. for the lot and received a deed executed by Cady as general partner. For reasons not relevant here, Dodson constructed the house himself. Between January and March, 1977, Dodson built a barn upon the lot with wood siding, even though the restrictive covenants required the siding of outbuildings to conform with the dwelling. In March, 1977, construction of the house was begun. By May, work was 65% to 70% complete, and the wood siding had been installed. Fannon, one of the appel-lees, knew these facts in June, 1977. Early in July, 1977, Dodson moved into the house, and on August 16, 1977, the carpet was installed at which time all work stopped. Dodson contends that the house was complete at this time. On September 2,1977, a V.A. inspector inspected the house and found that it was not complete for V.A. purposes; he found, among other things, a need for touch-up painting, splashblocks and a doorbell. However, on September 27, a local real estate appraiser was of the opinion that the house was complete in connection with a loan appraisal.

Dodson says he received no complaint or communication from the plaintiffs/appel-lees regarding the siding on his house until he was served with process on September 15, 1977, of this suit which was filed on August 30, 1977.

All parties agree that this appeal concerns only the question of whether the wood siding on the house violates the restrictive covenant. The parties limit their discussion to four issues.

The issue which is determinative of this appeal is whether or not the house was completed within the meaning of paragraph 22 of the restrictive covenants, and if so, was the brick veneer provision “deemed to have been complied with” under the provisions of that paragraph?

Paragraph 22 provides:
“PROCEDURE: The Committee’s approval or disapproval as required in these covenants shall be in writing. In the event the Committee or its designated representatives, fails to approve or disapprove within 30 days after plans and specifications have been submitted to it, or in any event, if no suit to enjoin the construction has been commenced prior to the completion thereof, approval will not be required and the related covenants shall be deemed to have been complied with.”

Appellant Dodson contends that the trial court erred in concluding that the house was not complete at the time suit was filed, because he says that when one is construing a restrictive covenant, the term “completion” should not be construed by the same stringent standards applied by a V.A. inspector in determining whether to approve a loan. He says that the V.A. standards are necessarily more strict that the standards required by the restrictive covenant. He states that the house was unquestionably substantially complete at the time suit was filed so that under paragraph 22 of the covenant concerning 60% brick veneer, a “related” covenant, should be “deemed to have been complied with.”

Appellees contend that paragraph 22 should not be construed to allow “substantial completion” rather than “completion.” They argue that the V.A. inspector’s findings should control especially since many of the features which he found incomplete were not minor, and that the appraiser’s findings are irrelevant, coming four weeks after suit was filed. Appellees insist that the ore tenus rule compels this Court to uphold the findings of the trial court.

Appellant answers appellees’ argument and says that the appraiser’s findings are, in fact, relevant since no work had been done on the house between August 16, and his inspection on September 27. He also contends that for purposes of paragraph 22, all the incomplete features of the house were minor and that the language of that paragraph was included in the restrictions in recognition of the inequities that could develop if suit were filed after completion of a house. If “completion” is given the strained interpretation insisted upon by ap-pellees, he contends, the very purpose of paragraph 22 would be rendered ineffectual and meaningless. We agree with appellant.

Appellant further argues that the approval of his plans by the Architectural Control Committee was an effective approval of the wood siding or waiver of the brick veneer provision. He also contends that Cady’s actions in assuring him that wood siding was permissible constituted an effective estoppel. He also claims that the suit was barred by laches, filed as it was after the house was completed. We express no opinion on appellant’s further arguments, because of our agreement with him on his main argument that the house was complete insofar as the restrictive covenant was concerned.

We hold that the word “complete,” when used in restrictive covenants of this nature, means that the building has reached that stage in its construction when it can be put to the use for which it is intended, that is, it is substantially complete. Here, all the house lacked was some touch-up painting, splashblocks and a doorbell, and other minor things. The owner had already moved in.

The trial court obviously applied a strict definition to the word “complete” in making his findings. In this he erred.

REVERSED AND REMANDED.

BLOODWORTH, JONES, SHORES and BEATTY, JJ., concur.


text:
    NEUMILLER FARMS, INC. v. Jonah D. CORNETT et al.
    77-504.
    Supreme Court of Alabama.
    March 9, 1979.

      Charles M. Scott, Fort Payne, for appellant.
    Charles A. McGee of Traylor & McGee, Fort Payne, for appellees.
   SHORES, Justice.

Jonah D. Cornett and Ralph Moore, Sellers, were potato farmers in DeKalb County, Alabama. Neumiller Farms, Inc., Buyer, was a corporation engaged in brokering potatoes from the growers to the makers of potato chips. The controversy concerns Buyer’s rejection of nine loads of potatoes out of a contract calling for twelve loads. A jury returned a verdict of $17,500 for Sellers based on a breach of contract. Buyer appealed. We affirm.

From the evidence, the jury could have found the following:

On March 3, 1976, the parties signed a written contract whereby Sellers agreed to deliver twelve loads of chipping potatoes to Buyer during July and August, 1976, and Buyer agreed to pay $4.25 per hundredweight. The contract required that the potatoes be United States Grade No. 1 and “chipt [sic] to buyer satisfaction.” As the term was used in this contract, a load of potatoes contains 430 hundredweight and is valued at $1,827.50.

Sellers’ potato crop yielded twenty to twenty-four loads of potatoes and Buyer accepted three of these loads without objection. At that time, the market price of chipping potatoes was $4.25 per hundredweight. Shortly thereafter, the market price declined to $2.00 per hundredweight.

When Sellers tendered additional loads of potatoes, Buyer refused acceptance, saying the potatoes would not “chip” satisfactorily. Sellers responded by having samples of their crop tested by an expert from the Cooperative Extension Service of Jackson County, Alabama, who reported that the potatoes were suitable in all respects. After receiving a letter demanding performance of the contract, Buyer agreed to “try one more load.” Sellers then tendered a load of potatoes which had been purchased from another grower, Roy Hartline. Although Buyer’s agent had recently purchased potatoes from Hartline at $2.00 per hundredweight, he claimed dissatisfaction with potatoes from the same fields when tendered by Sellers at $4.25 per hundredweight. Apparently the jury believed this testimony outweighed statements by Buyer’s agents that Sellers’ potatoes were diseased and unfit for “chipping.”

Subsequently, Sellers offered to purchase the remaining nine loads of potatoes from other growers in order to fulfill their contract. Buyer’s agent refused this offer, saying “. . . ‘I’m not going to accept any more of your potatoes. If you load any more I’ll see that they’re turned down.’ T can buy potatoes all day for $2.00.’ ” No further efforts were made by Sellers to perform the contract.

At the time of Buyer’s final refusal, Sellers had between seventeen and twenty-one loads of potatoes unharvested in their fields. Approximately four loads were sold in Chattanooga, Tennessee; Atlanta, Georgia; and local markets in DeKalb County. Sellers’ efforts to sell their potato crop to other buyers were hampered by poor market conditions. Considering all of the evidence, the jury could properly have found that Sellers’ efforts to sell the potatoes, after Buyer’s final refusal to accept delivery, were reasonable and made in good faith.

This case presents three questions: 1) Was Buyer’s refusal to accept delivery of Sellers’ potatoes a breach of contract? 2) If so, what was the proper measure of Sellers’ damages? and 3) Was the $17,500 jury verdict within the amount recoverable by Sellers under the proper measure of damages?

§ 7-2-703, Code of Alabama 1975 (UCC), specifies an aggrieved seller may recover for a breach of contract “Where the buyer wrongfully rejects . . . goods . . .” (Emphasis Added) We must determine whether there was evidence from which the jury could find that the Buyer acted wrongfully in rejecting delivery of Sellers’ potatoes.

A buyer may reject delivery of goods if either the goods or the tender of delivery fails to conform to the contract. § 7-2-601, Code of Alabama 1975. In the instant case, Buyer did not claim the tender was inadequate. Rather, Buyer asserted the potatoes failed to conform to the requirements of the contract; i. e., the potatoes would not chip to buyer satisfaction.

The law requires such a claim of dissatisfaction to be made in good faith, rather than in an effort to escape a bad bargain. Shelton v. Shelton, 238 Ala. 489, 192 So. 55 (1939); Jones v. Lanier, 198 Ala. 363, 73 So. 535 (1916); Electric Lighting Co. v. Elder Bros., 115 Ala. 138, 21 So. 983 (1896).

Buyer, in the instant case, is a broker who deals in farm products as part of its occupation and, therefore, is a “merchant” with respect to its dealings in such goods. § 7-2-104, Code of Alabama 1975. In testing the good faith of a merchant, § 7-2-103, Code of Alabama 1975, requires “ . . . honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” A claim of dissatisfaction by a merchant-buyer of fungible goods must be evaluated using an objective standard to determine whether the claim is made in good faith. Because there was evidence that the potatoes would “chip” satisfactorily, the jury was not required to accept Buyer’s subjective claim to the contrary. A rejection of goods based on a claim of dissatisfaction, which is not made in good faith, is ineffectual and constitutes a breach of contract for which damages are recoverable.

We next consider the proper measure of damages under the UCC. One of the remedies available to aggrieved sellers is the recovery of “ . . . damages for nonacceptance (section 7-2-708) . . . .” § 7-2-703, Code of Alabama 1975.

The measure of damages available through § 7-2-708, Code of Alabama 1975, is:

“(1) Subject to subsection (2) and to the provisions of this article with respect to proof of market price (section 7-2-723), the measure of damages for nonacceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in this article (section 7-2-710), but less expenses saved in consequence of the buyer’s breach.
“(2) If the measure of damages provided in subsection (1) is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in this article (section 7-2-710), due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.”

Buyer contends the jury verdict was excessive in view of § 7-2-708(1), Code of Alabama 1975. Based on a “per hundredweight” calculation, Buyer suggests the proper damage formula would be the difference between the contract price ($4.25 per hundredweight) and the “market price at the time and place for tender” (stipulated to be $2.00 per hundredweight); netting damages of $2.25 per hundredweight of potatoes in the rejected nine loads. We disagree.

On its face, the Code restricts the use of the subsection (2) measure of damages to those cases in which “.. . the measure of damages provided in subsection (1) is inadequate to put the seller in as good a position as performance would have done . .” It is implicit within this provision, however, that, in order to employ the damage formula of subsection (1), there must not only exist a market for the contracted goods, but also the aggrieved seller must have a legal obligation to enter that market in his effort to avoid the foreseeable adverse consequences of buyer’s breach of contract. Unless there is both a market and an obligation to enter it, the subsection (1) measure of damages is functionally inadequate and the aggrieved seller may seek redress through application of the measure of damages provided in subsection (2). See generally: Timber Access Industries Co. v. U. S. Plywood-Champion Papers, Inc., 263 Or. 509, 503 P.2d 482 (1972).

In the instant case, at least some market for potatoes existed; but we must consider whether Sellers had a legal obligation to sell the rejected nine loads of potatoes in that market. Clearly, if Sellers had such an obligation, subsection (1) will control; and, if no obligation existed, Sellers may look to subsection (2) to provide the formula by which their damages are to be measured.

Generally, the damages recoverable by a nonbreaching party will be measured as though that party had made a reasonable effort to avoid the foreseeable adverse consequences of the breach. In doing so, however, the nonbreaching party is not required to expose himself to undue risk, expense or humiliation. Brotherhood of Railroad Trainmen v. Barnhill, 214 Ala. 565, 108 So. 456 (1926); Whiting v. Dodd, 39 Ala.App. 80, 94 So.2d 411 (1957). See also Restatement of Contracts § 336(1) (1932). Moreover, the rule does not require an aggrieved party to sacrifice a substantive right or forego an advantageous opportunity for the benefit of the breaching party. Richard v. A. Waldman & Sons, Inc., 155 Conn. 343, 232 A.2d 307 (1967). See also 22 Am.Jur.2d, § 34, page 57.

The jury apparently concluded that, although Sellers made reasonable and diligent efforts to sell as many loads as possible, only four loads of potatoes could be sold of the seventeen to twenty-one loads in Sellers’ fields, at the time of tender. To expect Sellers to give priority to selling those potatoes allocated to Buyer’s contract, rather than selling the unallocated portion of their inventory, would be to require them to forego an advantageous opportunity and sacrifice a substantive right. Such is not the law. Had Sellers’ inventory consisted solely of the potatoes allocated to Buyer’s contract or had Sellers failed to act reasonably to sell their entire inventory, they would have failed to meet the obligation imposed by the avoidable consequences rule. However, under the circumstances here presented, Sellers had no obligation to enter the market with those potatoes allocated to Buyer’s contract. Absent such a legal obligation, the measure of damages provided in § 7-2-708(1), supra, is inadequate. Sellers may recover damages as measured by § 7-2-708(2), Code of Alabama 1975.

The contested portion of Sellers’ contract calls for the payment of $4.25 per hundredweight of potatoes contained in nine loads, each of which contained 430 hundredweight; totaling $16,447.50. Additionally, Sellers claim interest of $1,480.20 for eighteen months, and $62.00 freight expenses incurred due to Buyer’s breach. They contend that the total amount which they might have recovered was $17,989.78; and that the jury verdict should stand, because it does not exceed this amount.

The subsection (2) damage formula allows Sellers to recover “ . . . the profit (including reasonable overhead) from full performance by the buyer . incidental damages provided in this article (section 7-2-710), due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.” Under the facts of this case, we need not consider the ramification upon the subsection (2) damage formula of “due credit for payments,” or “proceeds of resale.” We now consider whether the jury’s verdict is compatible with a damage award based on Sellers’ “profit (including reasonable overhead),” “costs reasonably incurred” and “incidental damages” provided in § 7-2-710, Code of Alabama 1975.

The proper application of the subsection (2) measure of damages has received reflective consideration in R. Childres & R. Burgess, Seller’s Remedies: The Primacy of UCC 2-708(2), 48 N.Y.U.L.Rev. 833 (1973). The authors define profit as “ . . .an economic term, expressed in dollar amounts, representing the excess of that received [or which ought to have been received] over that expended in the business transactions or operations, the latter being also expressed in dollar amounts.” Childres & Burgess, supra at 838.

The total amount expended in performance of a contract is composed of “fixed costs” and “variable costs.” The “fixed costs,” sometimes called “overhead,” are those relatively stable expenses which are essential to performance and which continue even if the performance of a specific contract is temporarily halted. Recovery of overhead, to the extent that it is reasonably incurred, is specifically allowed as part of the award for profit by subsection (2). Childres & Burgess, supra at 846.

The “variable costs” are those expenses, incurred in reliance on the contract, which may be identified to a specific contract and which, if the contract were not to be performed, could be avoided. This element usually includes such items as the costs of material and labor which go directly to the production of the contract goods. If the breach occurs at a time when the aggrieved seller has already incurred variable costs, recovery for these damages is allowable as part of “costs reasonably incurred” under subsection (2). Childres & Burgess, supra at 860. We note, however, that the variable costs which an aggrieved seller might have avoided by diligent and reasonable efforts are not “reasonably incurred” and may not be recovered under § 7-2-708(2), supra.

Suffice it to say that there is evidence in the record from which the jury could reasonably conclude that the Sellers substantially performed their part of the bargain and had incurred substantially all of the expenses incidental to performance on their part. This being so, the jury’s verdict of $17,500 was within those damages recoverable by Sellers as a consequence of Buyer’s breach of contract.

AFFIRMED.

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


author: FAULKNER, Justice. MADDOX, Justice

text:
    Lisa WALKER, a minor, etc. v. Samuel B. GARRIS.
    77-647.
    Supreme Court of Alabama.
    March 9, 1979.

      Edward P. Turner, Jr. and Marc E. Bradley, Chatom, for appellant.
    Jerry A. McDowell, Mobile, for appellee.
   FAULKNER, Justice.

Walker brought suit individually and as next friend for injuries suffered by his daughter, Lisa, when she fell from and was run over by a flat-bed trailer being used for a hayride. The trial court granted verdicts for the defendant on all but one count of the complaint. We reverse and remand.

Thirteen year old Lisa and 15-25 other children were participants in a hayride held by Garris for a church youth group. For the hayride, Garris provided a flat-bed trailer 16'7" long, 7'6" wide, and 26" off the ground. Bales of hay were placed down the center of the trailer with the children sitting around them towards the edge of the trailer. There were no fenders over the trailer’s wheels, and there were no sides, railings, or handholds. Garris, accompanied by another adult, pulled the trailer with his pick-up down a dirt road and then down a county road where the accident occurred.

It was disputed what instructions, if any, were given the children about riding safely on the trailer before the hayride began. No adults were on the trailer with the children during the hayride. There was testimony that some of the children at various times were dangling their feet over the edge and jumping on and off the trailer as it moved at a slow speed. Neither were they observed nor instructed to stop by the adults, who remained in the pick-up until the accident occurred. It was never clear, exactly, how the accident occurred, except that Lisa somehow got off the trailer and was run over by it.

Plaintiff’s amended complaint alleged four claims for relief: (1) negligent operation of a motor vehicle; (2) wanton operation of a motor vehicle; (3) “negligently conducting the hayride so as cause, allow or permit plaintiff to fall off and be run over;” and (4) wantonly conducting the hayride. Garris raised the guest statute as one of his defenses. At the close of plaintiffs’ case defendant’s motion for a directed verdict was granted as to the negligent operation count, the “negligently conducting the hayride” count, and the “wantonly conducting the hayride” count. The jury received the case on a theory of wanton operation of a motor vehicle only and, after a dynamite charge, returned a verdict for Garris. Plaintiffs’ motion for new trial, which was denied, asserted as error the directed verdicts on the two negligence counts. The trial court, apparently, held that these were both barred by the guest statute. On appeal, we are confronted with two questions: (1) whether our guest statute can be applied to bar recovery by a child of thirteen years, and (2) whether the guest statute is applicable at all to a count for “negligently conducting a hayride/’

THE GUEST STATUTE

Our guest statute, § 32-1-2, Code 1975, provides:

“The owner, operator or person responsible for the operation of a motor vehicle shall not be liable for loss or damage arising from injuries to or death of a guest while being transported without payment therefor in or upon said motor vehicle, resulting from the operation thereof, unless such injuries or death are caused by the willful or wanton misconduct of such operator, owner or person responsible for the operation of said motor vehicle.”

This Court has never before considered the effect of this statute upon minors in general. Several of our eases have properly applied the statute against minors over the age of fourteen. See e. g. Boggs v. Turner, 277 Ala. 157, 168 So.2d 1 (1964); Shirley v. Shirley, 261 Ala. 100, 73 So.2d 77 (1954). But since “the relationship between the host and guest is consensual in nature and involves some acceptance by the guest of the relationship and its attendant hazards,” Crovo v. Aetna Casualty and Surety Co., 336 So.2d 1083 (Ala.1976), we are now urged to hold that whether or not children under the age of fourteen are subject to the guest statute is to be determined by the jury based on the individual child’s capacity to consent.

We agree with plaintiffs that this construction of the statute is the better one. As pointed out in Green v. Jones, 136 Colo. 512, 319 P.2d 1083 (1958), the guest statute is in derogation of the common law and as such should be strictly construed. We have emphasized before the consensual nature of the statute, and the need for the potential guest to be able to accept, and appreciate the possible hazards that may arise from a given situation. Crovo, supra. Misrepresentations on the part of the driver may nullify the relationship, just as a “guest’s” protests may convert him into a passenger. Crovo, supra. Thus consent, and, therefore the ability to consent, is a major factor in the operation of the guest statute, even though individuals generally give no thought to the statute’s effect when they ride in another’s car.

We hold that the applicability of the guest statute to a child under fourteen is a jury question.

Thus it was for the jury to decide whether or not Lisa was capable of consenting to be a guest within the meaning of § 32-1-2. Plaintiffs’ first count for negligent operation of a motor vehicle should have been allowed to go to the jury with proper instructions.

NEGLIGENT SUPERVISION

It appears that the trial court found that the guest statute was applicable to the third count of plaintiffs’ complaint as well. We disagree. That count stated in pertinent part:

“1. The Plaintiffs allege that on September 13, 1975 the Defendants were operating a motor vehicle on or along the Carson Road ... at said time and place the Defendants were pulling behind said motor vehicle a wagon or trailer on which said wagon or trailer a large number of minor children were riding on a hay ride, and the Plaintiffs allege that at said time and place the Plaintiff, Lisa Walker, the minor daughter of the Plaintiff, L. A. Walker, was riding on said wagon or trailer which was being pulled behind the vehicle being operated by the Defendants.
“2. The Plaintiffs allege that Defendants so negligently conducted said hay ride on said highway at said time and place so as to cause, allow or permit the Plaintiff, Lisa Walker, to fall off of and be run over by said wagon or trailer.”

These allegations are sufficient to state a claim for relief under Standifer v. Pate, 291 Ala. 434, 282 So.2d 261 (1973). In that case we held that a volunteer babysitter on her own premises owed a duty of due care in supervising a child under her care and control, thereby overruling Nelson v. Gatlin, 288 Ala. 151, 258 So.2d 730 (1972). In Standifer we noted that the gist of the action is negligent supervision. When an individual undertakes the control and supervision of a child, reasonable care must be exercised to protect that child from injury, irrespective of compensation. Garris was under no obligation to hold a hayride for these children, but once he undertook to do so he was under a duty to conduct the hayride properly by providing a suitable conveyance for the hayride and by controlling and supervising the children so as to protect them from injury. The guest statute is inapplicable to a claim for negligent supervision of children even though the instrumentality which inflicted the harm may have been a “motor vehicle.” The duty is to supervise the children properly, and an individual should not be allowed to escape liability simply because the child is injured by a motor vehicle rather than a hot pan of grease as in Standifer.

Sufficient evidence was presented for a jury to find that Garris was negligent in the manner in which he conducted the hayride. Consequently, the jury should have received the case on the third count of plaintiffs’ complaint as well as the first count.

REVERSED AND REMANDED.

BLOODWORTH, JONES, ALMON, SHORES, EMBRY and BEATTY, JJ., concur.

MADDOX, J., concurs specially, with whom TORBERT, C. J., concurs.

MADDOX, Justice

(concurring specially).

I concur in that aspect of the opinion which holds that the plaintiff was entitled to have her third count (negligent supervision) go to the jury.

I disagree with the majority’s treatment of the guest statute. The age of the guest, in my opinion, has no bearing. Cf. Kent v. Coleman Company, 285 Ala. 288, 231 So.2d 321 (1970), (small child, as a social guest, burned on a furnace).

TORBERT, C. J., concurs.


author: BLOODWORTH, Justice.

text:
    CHOCTAW COUNTY et al. v. ALABAMA PUBLIC SERVICE COMMISSION (Two cases). BUTLER TELEPHONE CO. v. ALABAMA PUBLIC SERVICE COMMISSION.
    77-655, 77-725 and 77-725X.
    Supreme Court of Alabama.
    March 9, 1979.

      Maurice F. Bishop, Birmingham, William L. Utsey, Butler, for appellants, Choctaw County, The Cities of Butler and Pennington, and the Choctaw County Farm Bureau.
    Mark Ezell, Butler, Robert C. Black, Montgomery, for appellee and cross-appellant, Butler Telephone Co., Inc.
    Carl L. Evans, Montgomery, for appellee, Alabama Public Service Commission.
   BLOODWORTH, Justice.

This is a consolidated appeal by Choctaw County, Cities of Butler and Pennington, and the Choctaw County Farm Bureau from two orders of the Alabama Public Service Commission (Commission) granting Butler Telephone Company (Butler) an increase in its non-recurring charges and an increase in its rates and charges for exchange (local) telephone service. Butler cross-appeals from the order granting an increase in exchange (local) telephone rates.

Butler applied on December 2, 1977, for an increase in non-recurring charges (installation charges, long cord charges, etc.), Commission Docket No. 17477. The Commission suspended operation of the new charges through June 21, 1978, in accordance with § 37-l-81(b) Code 1975. Butler then applied on December 21, 1977, for an increase in exchange (local) telephone service rates, Commission Docket No. 17484. The Commission suspended operation of these rates until July 20, 1978. Appellants Choctaw County, the Cities of Butler and Pennington, and the Choctaw County Farm Bureau intervened in both petitions.

All parties were given notice that both petitions would be heard together, and a hearing on both petitions was held on April 5, 1978. Butler presented its case, and there was some preliminary cross-examination and some testimony presented by the intervenors. The Commission continued the proceedings for further cross-examination by the intervenors.

On June 12, 1978, without any further testimony, the Commission issued an order in Docket No. 17477 approving the $4,234 increase in non-recurring charges. Interve-nors then appealed.

Another hearing was held on July 6,1978, limited to Docket No. 17484. The interve-nors completed presentation of their testimony and cross-examination. On July 20, 1978, the Commission issued an order approving an increase in exchange local service rates of $28,269, substantially less than the $63,348 applied for. Intervenors appealed and Butler cross-appealed.

NON-RECURRING CHARGES

Intervenors argue that they were denied due process in Docket No. 17477 because they had no opportunity to complete their testimony and cross-examination after Butler had presented its evidence. They also contend that the service rates approved in Docket No. 17484 are excessive because the Commission should have adjusted Butler’s expenses to eliminate extravagant and improvident salaries and other items paid to officers and directors of Butler and should have adjusted Butler’s income to reflect additional revenue received by it under a tariff concurrence with South Central Bell.

Butler states in brief that no hearing is required by § 37-1-81 Code 1975 and that the Commission records show that applications for approval of non-recurring charges are seldom set for hearing. Butler also contends that the approved exchange (local) service rates are not sufficient to give an adequate return on equity or rate base.

We conclude that a hearing was required in this instance and that the intervenors were denied their right to a fair hearing.

The Commission has discretion to suspend the operation of a new rate schedule for up to six months in order “to make such investigation as, in its opinion, the public interest requires * * *.” § 37-1 — 81(b) Code 1975. Even if no complaint is made, the Commission may make an investigation, provided that “no order affecting such rates [in effect or proposed] shall be entered by the commission without notice and a hearing.” § 37-1-83 Code 1975.

It is further provided that in any instance where the Commission decides to conduct an investigation, it must fix a time and place for public hearings. § 37-1-85 Code 1975. Moreover, every person or organization affected may by petition intervene and become a party before the Commission. § 37-1-87 Code 1975; Mobile County Gas District v. Mobile Gas Service Corp., 284 Ala. 664, 227 So.2d 565 (1969). Those who intervene have the right to be heard, as do other parties, through themselves or counsel in any hearing or investigation conducted by the Commission. §§ 37-l-86(a), -88 Code 1975.

We conclude that, once the Commission decides to suspend operation of the proposed charges or rates in order to conduct an investigation, the foregoing statutes evidence an intent to provide a full, fair, and public hearing for all parties. Clearly, the right to intervene and be heard, as set forth in these provisions, may not be abridged, in the interregnum, by the issuance of an order approving the increased charges or rates before the intervenors have completed their testimony and cross-examination.

Because the intervenors were not allowed to finish their presentation at the hearing, the order issued in Commission Docket No. 17477 is vacated and this cause is remanded.

EXCHANGE (LOCAL) TELEPHONE SERVICE RATES

Both the intervenors and Butler are dissatisfied with the Commission’s order in Docket No. 17484 approving an increase in exchange (local) telephone service rates. Intervenors argue that the Commission did not take into account certain factors which would increase Butler’s income, causing the percentage return on equity and rate base to be higher than the approved percentage. Butler, on the other hand, contends that the approved rates of return are not high enough.

There is no dispute regarding the amount of the rate base, $1,694,617. Butler requested an increase in exchange (local) telephone service rates totaling $63,348. The approved increase is $28,269. This increase coupled with the $4,234 increase in non-recurring charges yields a rate of return on rate base of 6.09 percent and a rate of return on equity of approximately 12.50 percent, as calculated by the Commission.

The general principles governing our review of an appeal in a rate case are set forth in State v. Alabama Public Service Commission, 293 Ala. 553, 560-61, 307 So.2d 521, 527 (1975):

“The limits and standards of our review on appeal from an order of a circuit court upholding an order of the Alabama Public Service Commission[] stated as follows in Floyd & Beasley Transfer Co., Inc. v. Alabama Public Service Commission, 276 Ala. 130, 159 So.2d 833:
“ ‘ * * * The order of the Commission is taken as prima facie just and reasonable, Title 48, Sec. 82, Code of 1940, and the burden is on the party who would upset the order of the Commission. Alabama Public Service Commission v. Atlantic Coast Line R. Co., 253 Ala. 559, 45 So.2d 449. Also, findings of the Commission will not be overturned if supported by legal evidence of substantial weight and probative force. Alabama Public Service Commission v. Higginbotham, 256 Ala. 621, 56 So.2d 401; Alabama Public Service Commission v. Nunis, 252 Ala. 30, 39 So.2d 409; North Alabama Motor Express v. Rookis, 244 Ala. 137, 12 So.2d 183. * * * This Court has made it clear in the Rookis case, supra, as well as in the case of Alabama Public Service Commission v. Crow, 247 Ala. 120, 22 So.2d 721, that courts must guard against a substitution of their own judgments of findings of fact for the judgment of the Commissioners. 4: * * >
“See also Hiller Truck Lines, Inc. v. Alabama Public Service Commission, 292 Ala. 161, 290 So.2d 649, citing with approval the above statement from Floyd & Beasley v. Alabama Public Service Commission, supra.
“The legislature has committed to the Alabama Public Service Commission matters of vast public interest. Among these powers are the regulation of utilities and their rates, and the regulation of transportation over both railroads and highways. Presumptions are indulged in favor of the orders of the Commission. Alabama Public Service Commission v. Redwing Carriers, Inc., 281 Ala. 111, 199 So.2d 653.”

Intervenors state that the Commission failed to consider exorbitant salaries paid and additional income due from a South Central Bell rate increase. We find that they have not carried their burden in this respect. The questioned items were presented to the Commission through the testimony of several witnesses. From aught that appears in the record, the Commission did consider those items, which the intervenors argue that it did not consider, and as a result granted an increase substantially less than that sought by Butler.

Another point raised by intervenors is that Butler paid dividends of $50,000 in 1976 and $205,000 in 1977 on common stock with a book value of only $30,000. This intervenors say, demonstrates the “plunder” of a small utility company by its shareholders at the expense of the public.

However, the record discloses that there were large retained earnings existing at the time the present shareholders purchased Butler Telephone Company, that no dividends had been paid since the formation of the company to reduce these excessive retained earnings (on which Butler was forced to pay a tax by the Internal Revenue Service), and that these accumulated dividends were reflected in the purchase price paid for the company.

What we have said regarding intervenors’ contentions answers Butler’s arguments as well. In sum, there is substantial evidence in the record to support the Commission’s approval of an increase in exchange (local) telephone service rates, an increase which, incidentally, is less than one half the amount sought by the utility.

Despite our finding that the Commission’s order in Docket No. 17484 is supported by substantial evidence, we vacate that order and remand to the Commission to consider the effect, if any, which the proceedings in Docket No. 17477 will have on the rates of return on rate base and equity. Since the non-recurring charges were included in the total income used to determine the rates of return, any change in the amount of non-recurring charges in Docket No. 17477 will cause a change in the income and rates of return in Docket No. 17484.

The Commission’s orders in Docket No. 17477 and Docket No. 17484 are vacated and these causes remanded for further proceedings in accordance with this opinion.

VACATED AND REMANDED WITH DIRECTIONS.

All the Justices concur.

      . The new statute providing for direct appeals from the Commission to the Supreme Court does not change our standards of review. § 37-1-144 1978 Supp. to Code 1975. See also Alabama Gas Corp. v. Wallace, 293 Ala. 594, 308 So.2d 674 (1975).