text:
    Bobby E. BONNETTE et ux., Plaintiff-Appellant, v. CENTURY READY-MIX CORPORATION, Defendant-Appellee.
    No. 13826.
    Court of Appeal of Louisiana, Second Circuit.
    March 26, 1979.
    En Banc. Rehearing Denied May 3, 1979.

      Smith & Hingle by Gilmer P. Hingle, Monroe, for plaintiff-appellant.
    Kostelka & Swearingen by C. Daniel Street, Monroe, Law Office of John S. C. Massey by John W. Grant, West Monroe, for defendant-appellee.
    Before BOLIN, PRICE and MARVIN, JJ.
   BOLIN, Judge.

Plaintiff sued defendant for damages resulting from the alleged faulty construction of a swimming pool. From judgment sustaining defendant’s motion for summary judgment, plaintiff appeals. Finding a genuine issue of material fact, we reverse and remand.

Plaintiff brought suit for damages alleging he contracted with defendant, Century Ready-Mix Corporation, to furnish him with cement and a cement finisher to complete a swimming pool at his residence. Plaintiff complained that the cement work remained unfinished, that the completed portion was done in a highly unsatisfactory and unwork-manlike manner, and that the cement in and around the pool was very rough and unsightly. He alleged the incomplete condition of the pool was caused by the negligence of defendant’s cement finisher and that he did not know whether the pool’s rough and unsightly condition was caused by a defect in the cement product or by the finisher’s actions.

In answer to the suit defendant maintained it merely sold the cement to plaintiff and denied responsibility for the actions of the finisher who was neither in its employ nor under its direction or control. By re-conventional demand defendant sought the unpaid price for the cement and attorney fees.

In a supplemental petition plaintiff alleged in the alternative that, in the event the court found the finisher was not defendant’s agent or employee, Century Ready-Mix was negligent in sending him an incapable and irresponsible independent contractor.

Defendant filed a motion for summary judgment on the ground there was no genuine issue of material fact insofar as plaintiff’s demands against it were concerned. Supporting affidavits and interrogatories were filed which were to the effect that the cement finisher was an independent contractor who had been hired by plaintiff and that the cement product was not defective.

Plaintiff’s affidavits in opposition to the motion were filed the day before the hearing but were not served on opposing counsel until the day of the hearing, at which time they were hand-delivered in court. The trial court refused to consider the affidavits because they were not timely served under La.Code of Civil Procedure Article 966. We find no error in this ruling. Acme Refrigeration of Baton Rouge, Inc. v. Caljoan, Inc., 346 So.2d 743 (La.App. 1st Cir. 1977); Jones v. Menard, 559 F.2d 1282 (5th Cir. 1977).

The trial court found defendant’s affidavits established that the finisher was an independent contractor who had been hired by plaintiff to work on the pool; that plaintiff only contracted with defendant for the latter to furnish cement; and that plaintiff admitted to defendant he had no complaint about the quality of the cement but was only dissatisfied with the workmanship of the cement finisher. The trial court concluded there was no genuine issue as to material fact and that defendant was entitled to judgment as a matter of law.

By this appeal plaintiff urges several grounds for reversing the summary judgment. We pretermit discussing all the grounds because defendant’s own affidavits fail to show that there is no genuine issue of material fact as to the unsightly condition of the pool area being caused by defective cement products.

In finding no genuine issue of material fact as to this claim, the trial court relied upon affidavits of two persons employed by defendant who went to plaintiff’s residence on the day the cement was delivered. These affiants stated they were told to go to plaintiff’s residence on that day because a problem had arisen at the pool site. When they arrived they found plaintiff and the cement finisher arguing about the quality of the workmanship. They stated plaintiff told them there was nothing wrong with the concrete and that he would pay for it and that he was only dissatisfied with the workmanship.

We think the trial court erred in reasoning that this statement allegedly made by plaintiff to defendant’s representative establishes the cement product is not defective. The statement, while against plaintiff’s interests, is not a judicial admission forfeiting his right to seek recovery on the basis that the cement product is defective. Plaintiff has no particular expertise with respect to the quality of cement. Moreover, the statements in the affidavits that plaintiff was satisfied with and would pay for the cement are contradicted by the fact that plaintiff made no such payments and defendant sought payment for the cement in its reconventional demand.

Although the trial court in reasons for judgment made no reference to the affidavit of Levins Thompson, which was submitted by defendant, we find that it too fails to show there is no defect in the cement product. Thompson, who is engaged in the swimming pool business, inspected the pool at plaintiff’s request. His affidavit states he found “nothing apparently wrong with the concrete itself.” The affidavit fails to state with any detail how Thompson arrived at this cryptic conclusion.

Any doubt as to the existence of a genuine issue of material fact should be resolved against the granting of a motion for summary judgment and in favor of a trial on the merits. Acme Refrigeration of Baton Rouge, Inc. v. Caljoan, Inc., supra; Ray’s Appliance & Air Conditioning v. Heard, 343 So.2d 435 (La.App. 3rd Cir. 1977). A fair reading of defendant’s affidavits leaves us with doubts as to whether there is a genuine issue of material fact as to the unsightly condition of the pool being caused by defective cement. This doubt should be resolved in favor of a trial on the merits.

The judgment sustaining the motion for a summary judgment is annulled and the case is remanded for further proceedings. All costs to await the final determination of the case.

      . In this petition plaintiff also named the cement finisher a defendant in the event the court should find his status that of an independent contractor. A sheriffs return in the record shows the finisher could not be located for service of process.


source: Caselaw Access Project

author: HALL, Judge.

license: Public Domain

text:
    Jimmy Davis ALLUMS, Plaintiff-Appellee, v. DIXIE METALS COMPANY, Defendant-Appellant.
    No. 13827.
    Court of Appeal of Louisiana, Second Circuit.
    March 26, 1979.

      Mayer, Smith & Roberts by Walter O. Hunter, Jr., Shreveport, for defendant-appellant.
    Fish & Montgomery by John W. Montgomery and Bruce M. Bolin, Minden, for plaintiff-appellee.
    Before HALL, MARVIN and JONES, JJ.
   HALL, Judge.

Defendants, Dixie Metals Company and its insurer, Travelers Insurance Company, appeal from a judgment finding plaintiff, Jimmy Davis Allums, totally and permanently disabled 'as a result of lead poisoning incurred while employed at defendant’s factory and ordering them to pay appropriate workmen’s compensation benefits, penalties and attorney’s fees. For the reasons expressed by the trial court in its written reasons for judgment and the reasons expressed below, we amend the judgment to increase the award of attorney’s fees and otherwise affirm.

Defendants contend the trial court erred in the following seven respects by:

(1) Determining plaintiff’s physical condition is the result of an occupational disease;

(2) Determining plaintiff is totally and permanently disabled;

(3) Excluding the results of blood tests administered to plaintiff during his employ- • ment;

(4) Excluding the majority of Dr. Donald R. Lynam’s testimony;

(5) Not requiring plaintiff to prove his case by an overwhelming preponderance of the evidence;

(6) Assessing defendants with statutory penalties and attorney’s fees; and

(7) Ordering weekly compensation benefits to begin on October 5, 1976, rather than after demand was made in June, 1977.

Plaintiff answered defendants’ appeal requesting an increase in attorney’s fees from $3,000 to $4,000.

Defendant recycles old batteries into nearly pure lead. First, the tops of the batteries are cut off and the plates are removed and smelted in a furnace. The smelting removes a substantial amount of the nonlead material. The resulting lead is placed in a 60-ton kettle, “lead pot”, where the lead is melted and the residual impurities are removed. The impurities are skimmed off the top of the molten lead by workmen using shovels. The lead is brought up to chemical specification and then poured into molds in preparation for delivery to the purchaser. The vapors and smoke from the furnace are routed through the “baghouse” where a succession of bags filter it to collect the flue dust. There is no filtering device for the lead pot. Flue dust contains lead. The evidence established flue dust was prevalent throughout the factory and was on the floor, water fountains, workers’ clothes and skin, and in the air.

Defendant recognizes the hazards of this recycling operation and takes many safety precautions. It requires the use of respirators by all employees with filter changes as needed, issues special clothing not to be removed from the plant, specially instructs employees concerning eating, drinking and smoking while on the job and requires bathing before leaving the premises. Defendant also administers blood tests on all of its employees periodically. Those with too high serum lead level and those whose serum lead level has significantly increased over the last test are reinstructed in the use of safety equipment and procedures or removed from the lead-laden environment altogether until their serum lead level returns to normal.

Plaintiff has been employed as a manual laborer in various jobs since he was 14. According to all the evidence, including testimony by defendant’s employees, he was an excellent worker. Plaintiff was employed by defendant for a little over two years from June 10, 1974, until October 4, 1976. However, he only actually worked for approximately I2V2 months of this period in three different segments because of a cervical neck injury he suffered while on the job which eventually required a cervical fusion.

Plaintiff first worked as a maintenance man for defendant. His responsibilities took him to all parts of the factory. On returning to work after his cervical fusion, plaintiff worked first in the baghouse and then skimming slag from the lead pot. Plaintiff finally left the employ of defendant because of a pay dispute. It is uncon-tradicted that plaintiff felt weak and was suffering some weight loss when he left and that he made no complaints in this respect to defendant.

Plaintiff, concerned about his weight loss, initially went to his family physician, Dr. Sidney Pittman. Dr. Pittman referred plaintiff to Dr. William R. Giddens in Shreveport who in turn referred plaintiff to Dr. Michael 0. Fleming of the Family Service Clinic of the LSU Medical School because of the reduced cost.

Dr. Fleming saw plaintiff on February 1, 1977. At that time he noticed plaintiff was suffering from symmetrical atrophy of the lower extremities, a loss of strength and endurance, but not sensation, and foot drop. On finding that defendant worked at a battery recycling factory, he arranged to have several tests administered. The blood test showed a serum lead level of 54 micrograms percent in plaintiff’s blood. Normal level for an industrial worker is around 60 micrograms percent. Dr. Fleming also administered a provocative test to determine the amount of lead in plaintiff’s body. This test consists of administering doses of peni-cillamine, a chelating agent designed to leach the lead out of the bones where the body stores it, and then taking a 24-hour urine sample. Plaintiff’s urinary lead was 118 micrograms per liter. Ten micrograms per liter is considered normal. Also, plaintiff’s serum lead level rose to 152 micrograms percent.

Dr. Fleming testified that initially the lead is absorbed into the blood and soft tissues, but at some point it becomes excessive and then is absorbed and stored in the bone in an inert form. The absorption rate is approximately ten times faster than the excretion rate, therefore, there is a build-up of lead in the bones. Based on the symptoms and the high amount of lead in the body of plaintiff, Dr. Fleming concluded plaintiff had suffered lead poisoning which resulted in lead neuropathy, a dissolution of the segments of the sheath surrounding the nerves so that the nerves can no longer transmit impulses. This lead neuropathy caused the symptoms mentioned above. Dr. Fleming administered penicillamine for three and one-half months in an attempt to remove the lead from plaintiff’s body and prescribed a physical therapy regime.

Dr. Fleming’s supervisor, Dr. Charles Sias, concurred in the diagnosis. Dr. Fleming and Dr. Sias were also of the opinion plaintiff has reached maximum improvement at this time and that he will never be able to hold any employment requiring endurance, strength, bending or squatting, that is, employment involving manual labor. Dr. Fleming testified that in his opinion the lead poisoning resulted directly from plaintiff’s employment at defendant’s factory.

The lay testimony shows conclusively that plaintiff had always been a healthy, active, hardworking individual. Defendant readily admits it was quite pleased with plaintiff’s performance as a worker. Upon plaintiff’s return to work after recovering from his cervical fusion, his health, strength and endurance began to steadily decline. This process continued and became acute after he ceased his employment in October, 1976. The lay testimony shows that plaintiff cannot sit in one place for a long time, that his legs constantly cramp, and that he cannot now perform simple tasks around the house such as mowing the grass and minor home repairs.

Considering these facts, we find the trial court was correct in finding plaintiff was suffering from an occupational disease which has totally and permanently disabled him. Thus, defendants’ first, second and seventh specifications of error are without merit.

Defendants’ medical evidence consisted of a report by Dr. H. Winston Brown who saw plaintiff only once after nearly a year of treatment and physical therapy. The report was admitted into evidence by stipulation in lieu of the doctor’s testimony. His report concluded “his symptoms suggest that he has depression and if such is the case, precisely how much of the problem can be attributed to lead toxicity as opposed to other factors seems indefinite, and difficult or impossible to determine.” He-also said “his present examination reveals no deficit of strength or sensation in the lower extremities. If he has had a peripheral neuropathy due to lead toxicity, the condition seems to have improved to the point that it is not presently clinically detectable.” Dr. Brown does not deny plaintiff could have had lead poisoning. The trial court found that his inconclusiveness as to plaintiff’s problem could have easily resulted from the fact plaintiff had been under physical therapy for nearly a year and had reached his level of maximum improvement. The deterioration of plaintiff’s condition would easily explain any depression. Dr. Brown’s report is inconclusive.

Defendants also sought to offer into evidence the results of five blood tests performed by defendant on the plaintiff during his employment. The blood samples were drawn by a nurse and then sent out of state to a certified testing laboratory that returned the results to defendant. There was no evidence of the laboratory’s handling procedures of the samples or their testing techniques and no way for plaintiff to cross-examine the persons performing the tests or probe the accuracy of the results of the tests. This evidence was correctly excluded. Defendants’ third specification of error is without merit.

Defendants assert the trial court erred in excluding the testimony of their expert, Dr. Lynam, whose testimony is included in the record as an offer of proof. He is an expert in environmental health research and is particularly qualified in the area of heavy metals in industry. He is also manager of the Environmental Health Department of the International Lead-Zinc Research Organization. Whether the exclusion was proper is an extremely close question. The trial judge excluded the testimony because defendants indicated they would try and elicit a clearly inadmissible medical opinion from Dr. Lynam. This court’s analysis of the offer of proof concludes his testimony only concerned the toxic effects of a given serum lead level on the human system in general, testimony we feel he was qualified to give. We, therefore, considered the offer of proof.

Basically, Dr. Lynam testified that if plaintiff had lead poisoning, at some point he would have exhibited a high serum lead level. His testimony is entitled to little weight in the ultimate determination of whether plaintiff suffered lead poisoning. He never examined plaintiff and admittedly is unqualified to diagnose his condition. He admitted it was possible, but not likely, that a person could incur lead poisoning even though his serum lead level was within acceptable levels. Also, there is no admissible evidence in the record of plaintiff’s serum lead levels during his employment. In the face of Dr. Fleming’s testimony and diagnosis and plaintiff’s symptoms, we find the consideration of Dr. Lynam’s testimony does not alter the judgment of the trial court.

Defendants also argue that LSA-R.S. 23:1031.1(D) requires plaintiff to prove the disease was contracted in the course of his employment by an overwhelming preponderance of the evidence because he had not been actively working for defendant for a continuous 12-month period. Assuming, arguendo, the correctness of defendants’ position, we find plaintiff has met his burden of proof by an overwhelming preponderance of the evidence.

The trial court also awarded plaintiff penalties and attorney’s fees for defendants’ arbitrary refusal to pay benefits without probable cause. The defendants cite plaintiff’s lack of complaint during the latter stages of employment, the termination of his employment due to pay difficulties, and the records of the results of his blood tests as being sufficient reason to refuse to pay compensation. Defendants admittedly received on June 2, 1976, demand for payment and proof of the claim relating Dr. Fleming’s diagnosis of “heavy metal poisoning” caused by plaintiff’s employment in defendant’s plant. When faced with this medical diagnosis, defendants were not reasonable in relying on their own conclusions drawn from the reasons stated above to refuse compensation. We, therefore, affirm the trial court’s award of penalties.

Plaintiff answered the appeal seeking an increase in the trial court’s award of attorney’s fees from $3,000 to $4,000 and an award for future medical expenses. We increase the award of attorney’s fees from $3,000 to $4,000 because of the additional services rendered in connection with the appeal. Plaintiff is not entitled to an award for future medical expenses under the Workmen’s Compensation Law. There is no liability for medical expenses until they are incurred. The right to assert a claim for future medical expenses is always reserved to the plaintiff and need not be specifically reserved in the judgment. Deshotels v. Fidelity and Casualty Co. of New York, 324 So.2d 895 (La.App. 3d Cir. 1975), writs denied 328 So.2d 376 (La.1976).

The district court judgment is amended to increase the attorney’s fees awarded from $3,000 to $4,000 and, as amended, is affirmed at defendants’ costs.

Amended, and as amended, affirmed.


author: JONES, Judge.

text:
    Marie Cascio KEMPER et al., Plaintiff-Appellant, v. B. L. DEARING, Defendant-Appellee.
    No. 13828.
    Court of Appeal of Louisiana, Second Circuit.
    March 26, 1979.

      Glenn F. Armstrong, Bossier City, for plaintiff-appellant.
    R. Perry Pringle, Shreveport, for defendant-appellee.
    Before BOLIN, HALL and JONES, JJ.
   JONES, Judge.

Plaintiffs, Marie Cascio Kemper, Victor Joe Cascio and Steve Cascio, bring this suit to annul a tax sale of property to defendant, B. L. Dearing, on May 7, 1973, which tax deed was recorded that date. Plaintiffs allege no notice of tax delinquency or proposed sale was served or mailed to them as required by law. The suit was filed May 5, 1978 and defendant was served by domiciliary service on May 10, 1978.. Defendant pled the peremptory exception of prescription asserting Art. 7, § 25(C) of the 1974 Constitution of Louisiana requires suits to annul tax sales be filed and service of process had within five years from recordation of the tax deed when no notice of sale has been served. The trial court sustained defendant’s exception of prescription. We affirm.

Plaintiffs are the heirs of Joe Cascio who died October 6, 1969 owning the following property:

6.12 acres being the West 201.96 feet of East 507.87 feet of the Southeast quarter of Southeast Quarter (SE/4 of SE/4) of Section 2, Township 18 North, Range 15 West, Caddo Parish, Louisiana.

Plaintiffs allege parish and state taxes for the year 1970 on the above described property were assessed in the name of Joe Cascio, deceased, and it was in this name at the time it was sold. Plaintiffs allege they received no notice of delinquency of taxes and the above described property was sold to defendant and the tax deed recorded on May 7, 1973. No notice of sale was served upon plaintiffs.

Plaintiffs contend the five year peremptive period of Art. 7, § 25 was interrupted when suit was instituted, i. e., filed, two days prior to the expiration of the five year period. Plaintiffs further contend “it must be served” in Art. 7, § 25(C) refers to service of notice of sale, not to service of proceedings to annul:

“(C) Annulment. No sale of property for taxes shall be set aside for any cause, except on proof of payment of the taxes prior to the date of the sale, unless the proceeding to annul is instituted within six months after service of notice of sale. A notice of sale shall not be served until the final day for redemption has ended. It must be served within five years after the date of the recordation of the tax deed if no notice is given.”

Plaintiffs contend if this court holds service of process must be made within the five year peremptive period, a tax purchaser could prevent a tax sale from being annulled by avoiding service of process.

Defendant contends Art. 7, § 25(C) requires that process in an annulment proceeding be served within five years of the date of the recordation of the tax deed when no notice of sale has been served on the tax debtor.

The sole issue on appeal is does Art. 7, § 25(C) of the Louisiana Constitution of 1974 require service of process of an annulment suit be made within five years from recordation of the tax deed when no notice of sale has been served on the tax debtor?

Art. 7, § 25 of the 1974 Constitution was enacted to replace the provisions of Art. 10, § 11 of the Constitution of 1921.

The pertinent provision of Art. 10, § 11 of the 1921 Constitution, providing for five year peremption for institution of suit to annul tax deed when no notice of sale is served on the debtor states:

“No sale of property for taxes shall be set aside for any cause, except on proof of payment of the taxes for which the property was sold prior to the date of the sale, unless the proceeding to annul is instituted within six months from service of notice of sale, which notice shall not be served until the time of redemption shall have expired and within five years from the date of the recordation of the tax deed, if no notice is given . . . ”

The jurisprudence has interpreted Art. 10', § 11 as though there was a comma after “expired”, so that “within five years from the date of the recordation of the tax deed, if no notice is given” related to the time in which “the proceeding to annul is instituted” requiring suits to annul be filed within five years of the recordation of the tax deed when no notice of sale is given. Collins v. Quinn, 366 So.2d 209 (La.App.2d Cir. 1978); Lipps v. Zor, Inc., 170 So.2d 915 (La.App.4th Cir. 1965).

LSA-R.S. 47:2228 was enacted pursuant to the constitutional mandate in Art. 10, § 11 to provide a method by which the tax purchaser could quiet title. A tax purchaser may bring suit to quiet title by serving notice of sale, i. e., petition and citation, after the three year redemption period from the recordation of the tax deed has expired. When this is done the tax debtor must institute his action to annul within six months of service. LSA--R.S. 47:2228 further provides that after the five year per-emptive period for annulling tax sales had elapsed, a tax purchaser may serve notice of sale by serving petition and citation in a suit to quiet title on the tax debtor and a tax debtor has ten days in which to answer, although the failure of the tax purchaser to serve such notice of sale would not affect his five year prescriptive title.

A review of the first three sentences of Paragraph C, § 25, Art. 7, establishes that the first sentence states when the suit to annul must be filed if a notice of sale has been served (“within six months after service of notice of sale”). The second sentence sets forth when the notice of sale may be served (“shall not be served until the final day for redemption”). The third sentence commencing with the pronoun “it” states the time frame within which the suit to annul must be served if no notice of sale has been given (“It must be served within five years after the date of the recordation of the tax deed if no notice is given”). The use of the pronoun it to refer to the subject (“proceeding to annul”) of the sentence, when it refers to a noun not contained in the preceding sentence is poor drafting, but in this situation a review of the first three sentences in Section C leaves no doubt that “it” contained in the third sentence refers to “proceeding to annul” contained in the first sentence. There is no true ambiguity. There would be ambiguity if “it” is construed to refer to “notice of sale ” contained in the second sentence, for in that situation the sentence would then read “A notice of sale (it) must be served within five years after the date of the recordation of the tax deed if no notice is given.” The problem would be to determine what notice the last five words of the sentence (if no notice is given) referred to.

The proper interpretation of the third sentence of Art. 7, § 25(C) requires service of process in a proceeding to annul must be within five years after recordation of the tax deed when no notice of sale is served on the tax purchaser by the tax debtor. To interpret this sentence to make it relate to notice of sale is to deprive the tax purchaser of a method of quieting title after the five year peremptive period has passed because he could no longer serve the notice of sale required by LSA-R.S. 47:2228. This interpretation would grant the tax debtor unlimited time for bringing suit to annul tax sales unless the tax purchaser has served notice of sale after the three year redemption period and prior to the five year peremptive period because there would be no five year prescriptive period applicable to those situations where no notice of sale has been served.

Our review of the proceedings of the Constitutional Convention as they related to the adoption of Art. 7, § 25 of the 1974 Constitution establish that no major substantive changes of Art. 10, § 11 of the 1921 Constitution were contemplated by that body. Our interpretation of this article in the 1974 Constitution requires the suit to be served within five years of recordation of the tax deed, whereas the 1921 Constitution required the suit to be filed within five years of recordation of the tax deed. This is not the traumatic change of eliminating the five year peremption period on suits to annul tax sales and creation of a five year peremption period for institution of suits to quiet tax titles which would have resulted from the interpretation of the controversial “it ” to relate to service of “notice of sale ”. Public policy requires that law provide rules to expedite quieting of tax titles. Cortinas v. Murray, 224 La. 686, 70 So.2d 589 (1954); Fellman v. Kay, 147 La. 953, 86 So. 406 (1920).

Plaintiff contends an interpretation of Art. 7, § 25(C) to require the service of the suit to annul within five years from date of recordation of the tax deed will permit the purchaser to avoid litigation of a questionable nullity by avoiding service of petition and citation to a point in time when five years have elapsed from the rec-ordation of the tax deed. Plaintiffs’ contention is without merit. C.C.P. Art. 5091 authorizes a court to appoint an attorney at law to represent an absentee “who cannot be found and served after a diligent effort, though he may be domiciled or actually present in the state . . . ” Moore v. Moore, 340 So.2d 404 (La.App.2d Cir. 1976).

AFFIRMED at appellant’s cost.

      . Art. 7, § 25(A), Louisiana Constitution of 1974; LSA-R.S. 47:2180.

      . Art. 7, § 25(C) of Louisiana Constitution of 1974; LSA-R.S. 47:2228.

      . LSA-R.S. 47:2228 — “After the lapse of three years from the date of recording the tax deed in the conveyance records of the parish where such property is situated, the purchaser, his heirs or assigns, may institute suit by petition and citation as in ordinary actions against the former proprietor or proprietors of the property, in which petition must appear a description of the property, mention of the time and place of the sale and name of officer who made same, reference to page of record book and date of recording tax deed, notice that petitioner is owner of the said property by virtue of said tax sale, and notice that the title will be confirmed unless a proceeding to annul is instituted within six months from date of service of the petition and citation. This suit shall be brought in the parish where the property is situated unless it lies in two or more parishes, in which case this suit may be instituted in either of such parishes. The petition and citation shall be served as in ordinary suits; provided, that if the former proprietor be a non-resident of the state, or unknown, or his residence be unknown, the court shall appoint a curator ad hoc to represent him and receive service, and'said curator shall receive for his services a reasonable fee to be fixed by the court in each suit, the same to be taxed as costs of suit. After the lapse of six months from the date of service of petition and citation, if no proceeding to annul the sale has been instituted, judgment shall be rendered quieting and confirming the title.
      In all cases where tax titles have been quieted by prescription of five years under the provisions of Section 11 of Article X of the Constitution of 1921, the purchaser or his heirs or assigns may, if he or they so desire, either obtain a judgment of the court confirming the title by suit in the manner and form as herein-above set out, except that the delay for answer shall be ten days instead of six months, or the purchaser or his heirs or assigns may, at his or their option, quiet the title by monition proceeding, as provided by law relative to sheriffs’ sales and tax sales; provided that the failure to bring suit shall in no manner affect such prescriptive titles.”

      . C.C.P. Art. 5251(1)


text:
    ARENSON INTERNATIONAL, INC., Plaintiff-Appellee, v. SHELVING SYSTEMS CORP. et al., Defendant-Appellant, American Bank & Trust Co., Intervenor.
    No. 13829.
    Court of Appeal of Louisiana, Second Circuit.
    March 26, 1979.

      Burnett, Sutton, Walker & Callaway, for intervenor.
    Hargrove, Guyton, Ramey & Barlow, Shreveport, for plaintiff-appellee.
    M. R. Payard, Jr., Bossier City, for defendant-appellant.
    Before BOLIN, HALL and JONES, JJ.
   JONES, Judge.

Intervenor, American Bank & Trust Company, appeals a judgment ranking plaintiff’s vendor’s lien superior to intervenor’s chattel mortgage, although the chattel mortgage was recorded prior to the sale which created the vendor’s lien. The judgment dismissed the intervention at interve-nor’s cost.

Plaintiff, Arenson International (USA), Inc., holder of a past due promissory note with an unpaid balance of $31,388, dated June 9,1976, brought this executory process proceeding against defendant, Shelving Systems Corporation. The note, secured by a chattel mortgage, was given for the price of office furniture sold by plaintiff to defendant in July, 1975. The sheriff seized the office furniture under writ of seizure and sale. American Bank intervened asserting it held a chattel mortgage on Shelving Systems’ inventory recorded March 12, 1975, which was superior in rank to plaintiff’s vendor’s lien and chattel mortgage recorded June 10, 1976. Intervenor prayed to be paid in preference and priority to plaintiff out of the proceeds of the sheriff’s sale.

In lieu of a trial, the parties submitted the case for decision on a joint stipulation of facts. American Bank’s chattel mortgage, securing a $75,000 promissory note executed by Shelving Systems on March 10, 1975, recorded March 12, 1975, on which $73,710 remained unpaid, was recorded pri- or to the credit sale of office furniture by plaintiff to defendant. American Bank’s floor plan mortgage described the property as follows:

“All of the masses or assemblages of inventory, and equipment contained, and to be kept, in the offices and warehouse of Shelving Systems Corporation located at 1023 Jack Wells Boulevard, Shreveport, Louisiana; it being intended, in accordance with R.S. 9:5351 that the lien of this mortgage shall cease as to all of such property disposed of by the mortgagor up to the time of foreclosure, but shall attach to the purchases made by mortgagor to supply the place of such property disposed of and to other after acquired additions to said masses or assemblages of said inventory, and . . . ”

The defendant had been engaged in the sale of only industrial shelving until it purchased the inventory of office furniture for resale in July, 1975.

The trial court found office furniture was a completely different type of movable from industrial shelving and concluded it was not covered by the floor plan mortgage of intervenor because office furniture was not purchased to supply the place of disposed of industrial shelving or after acquired additions to the original stock of goods within the terms of LSA-R.S. 9:5351. The trial court further held plaintiff’s vendor’s lien was superior in rank to interve-nor’s chattel mortgage recorded prior to the sale of office furniture to Industrial Shelving for the reason the vendor’s privilege arose before the chattel mortgage attached.

The issues on appeal are (1) did the description in the floor plan mortgage cover the after acquired office furniture which was a different type of merchandise from that originally held by Shelving Systems for resale as their “stock of merchandise” (2) if the floor plan mortgage attached to the office furniture did it prime the vendor’s lien?

Intervenor contends the trial court erred in failing to find the chattel mortgage attached to the office furniture in accordance with the terms of intervenor’s mortgage which provided “shall attach to other after acquired additions to said masses or assemblages of said inventory . .” The applicable part of LSA-R.S. 9:5351 which authorizes the floor plan chattel mortgage provides:

“In order to secure the performance of any obligation, including future advances, it shall be lawful by complying with the provisions of this part to mortgage any and every kind of movable property, materials . . including without limitation, stocks of merchandise in retail, wholesale or manufacturing establishments, even though the same may not be all of a similar nature or kind. In the case of stocks or merchandise, including those in retail, wholesale and manufacturing establishments, as well as all other movable property in bulk, but changing in specifics, the effect of the mortgage shall cease as to all articles disposed of by the mortgagor up to the time of foreclosure but shall attach to the purchases, made to supply their place and to other after acquired additions to the original stock of goods, merchandise or other things in bulk originally mortgaged to secure the debt.”

Intervenor contends its chattel mortgage meets the descriptive requirements of LSA-R.S. 9:5352 by stating the chattel mortgage covers inventory contained and to be kept in the offices and warehouse of defendant at a designated municipal address in Bossier Parish.

LSA-R.S. 9:5352 which provides the description requirements for the property included within a floor plan chattel mortgage provides in pertinent part:

“. . A chattel mortgage granted on any mass or assemblage of things, including without limitation, stocks of merchandise in retail, wholesale, or manufacturing establishments, permitted by R.S. 9:5351, whether owned at the time of execution of the mortgage or to be acquired thereafter and on such additions as may come from natural increase or otherwise, shall describe the same as all of a particular class or classes or grade or kind or type or species or dimensions or as a stock of merchandise to be kept at a certain location . . . ”

A review of the quoted portions of LSA-R.S. 9:5351 and 9:5352 establish they authorize a floor plan chattel mortgage on an inventory (a stock of merchandise) and additions to it described in no manner other than by designation of the location wherein it is to be “kept”. An examination of the description of the mortgaged property contained in intervenor’s floor plan chattel mortgage reflects that it contains no description of the property other than a designated location where the masses and assemblages of inventory were to be kept. This floor plan mortgage prepared in accordance with the requirements of R.S. 9:5351 and 9:5352 would have covered all movable property contained within defendant’s inventory kept at the designated location at the time the mortgage was executed, regardless of what classes, kinds or species of property might have been included within the inventory. This floor plan chattel mortgage attached to all property subsequently brought to the designated location and added to the masses and assemblages of inventory there located. Under these circumstances, the chattel mortgage applied to the industrial shelving contained in defendant’s inventory at the designated location when the chattel mortgage was executed and it further applied to the office furniture added to the inventory at the designated location contained in the chattel mortgage.

We observe that the provisions of the statutes authorizing the floor plan mortgage do provide for chattel mortgages covering particular classes or species of property, however, Industrial Shelving’s floor plan mortgage was not prepared on this format. The intervenor’s chattel mortgage was prepared to cover an inventory of property not described other than by designation of the location wherein it was to be kept. For this reason, the trial judge erred in finding that the added office furniture was not covered by the chattel mortgage because it was a different kind of property from the industrial shelving which was initially included within the inventory of defendant.

Intervenor asserts the trial court erred in ranking the vendor’s privilege superior to the chattel mortgage on property purchased after the chattel mortgage was recorded. Intervenor contends the chattel mortgage on the furniture was effective from the time of its recordation on March 12, 1975, and ranks higher than the vendor’s privilege which attached to the furniture at the time of the July 1975 credit sale. Interve-nor contends its chattel mortgage is superi- or under the clear terms of LSA-R.S. 9:5354 which provides:

“Every such mortgage shall be effective as against third persons from the time of filing in the proper offices, and the filing shall be notice to all parties of the existence of the mortgage, which shall be superior in rank to any privilege or preference arising subsequently thereto.”

The vendor’s privilege arose at the moment of perfection of the sale of the office furniture in July, 1975. The chattel mortgage did not attach to the furniture until it was delivered to the warehouse in August, 1975.

In the decision of United Novelty Co. v. Salemi, 68 So.2d 808 (La.App. 2d Cir. 1953), the court quoted with approval the following language from Smith v. Bratsos, 12 So.2d 241, 243, La.App., with regard to the time when the lien created by a chattel mortgage comes into effect:

“ ‘To bring into existence the lien and privilege established by the statute, strict compliance with its requirements must be pursued. Such liens and privileges, it is uniformly held, are stricti juris. All prerequisites to their birth must be strictly observed. This principle is firmly imbedded in the jurisprudence of this state since legalization of chattel mortgages.’ ”

A chattel mortgage attaches or comes into being under the provisions of R.S. 9:5352, which authorizes the creation of a chattel mortgage on a non-described “stock of merchandise” by a designation of the location where it is to be kept, when the stock of merchandise is brought to the designated location.

The recordation of the chattel mortgage on non-described property as authorized by R.S. 9:5352 does not tell third parties what property is subject to the chattel mortgage. It is the delivery of the merchandise to the designated location in the chattel mortgage which has the effect of providing a description of the property covered by the mortgage and giving notice to third persons that a lien has been created against the property. It is then that the chattel mortgage attaches to the property.

The vendor’s lien attached prior to “the existence of the mortgage” insofar as it was applicable to the office furniture and therefore, the provisions of R.S. 9:5354 ranks the vendor’s lien superior for the reason the chattel mortgage is only superior to any privilege or preference arising subsequent thereto.

An unrecorded vendor’s privilege on movable property is superior in rank to a subsequently executed and recorded chattel mortgage. Weiss v. Hudson Construction Company, 151 La. 1, 91 So. 525 (1922); Louisiana National Bank of Baton Rouge v. Wicker, 259 So.2d 646 (La.App. 1st Cir. 1972). It follows that a vendor’s lien on movable property which comes into existence before a previously recorded chattel mortgage attaches primes the chattel mortgage.

The judgment appealed from dismissed the intervention “at intervenor’s cost”. There exists a dispute between the parties as to what portion if any of the keeper’s cost incurred in connection with plaintiff’s seizure of the defendant’s furniture are included within “at intervenor’s cost”. The plaintiff called off the sheriff’s sale set for July 27, 1977 after the intervention was filed. The seized furniture which was to have been the subject of the sale cost less than $45,000 and therefore, could not possibly have brought enough at the sale to have satisfied the $75,000 chattel mortgage of the intervenor which was asserted to be superior to that of plaintiff’s vendor’s lien of $31,388. Intervenor’s lien was reflected as superior to plaintiff’s chattel mortgage on a mortgage certificate contained in the record dated July 19, 1977. The sheriff would not have sold the furniture because it would not have brought enough to pay the lien superior to the seizing creditor’s lien as required by C.C.P. Art. 2337:

“If the price offered by the highest bidder at the first or subsequent offering is not sufficient to discharge the costs of the sale and the mortgages, liens, and privileges superior to that of the seizing, creditor, the property shall not be sold.”

Under these circumstances plaintiff was justified in postponing the sale until it could be determined which lien was superior in rank. Because the dispute between plaintiff and intervenor as to the rank of their liens was the cause of the delay in the sale and therefore the increase in the keeper’s cost, we have concluded that it is equitable that they each be responsible for one-half of the keeper’s cost incurred while the’ intervention is pending.

For the reasons assigned, the judgment is AFFIRMED at appellant’s cost, provided, however, that keeper’s cost incurred while intervention was pending are assessed one-half to plaintiff and one-half to intervenor.

      . This trial court determination necessarily was based upon an alternative factual finding that the floor plan mortgage attached to the office furniture.

      . C.C.Art. 2456: “The sale is considered to be perfect between the parties, and the property is of right acquired to the purchaser with regard to the seller, as soon as there exists an agreement for the object and for the price thereof, although the object has not yet been delivered, nor the price paid.”
      C.C.Art. 3217: “The debts which are privileged on certain movables, are the following . (7) The price due on movable effects, if they are yet in the possession of the purchaser.”
      C.C.Art. 3227: “He who has sold to another any movable property, which is not paid for, has a preference on the price of his property, over the other creditors of the purchaser, whether the sale was made on a credit or without, if the property still remains in the possession of the purchaser.
      So that although the vendor may have taken a note, bond or other acknowledgement from the buyer, he still enjoys the privilege.”


author: PRICE, Judge.

text:
    Jack Clark McCURDY, II, Plaintiff-Appellee, v. Shirley Carlene Ammar McCURDY, Defendant-Appellant.
    No. 13834.
    Court of Appeal of Louisiana, Second Circuit.
    March 26, 1979.
    En Banc. Rehearing Denied May 3, 1979.

      Booth, Lockard, Jack, Pleasant & LeSage by James E. Bolin, Jr., Shreveport, for defendant-appellant.
    Walker, Holstead &. Smith by R. Wayne Smith, Ruston, for plaintiff-appellee.
    Before PRICE, MARVIN and JONES, JJ.
   PRICE, Judge.

The plaintiff-husband obtained a divorce from the defendant-wife on proof of adultery and was awarded custody of their two minor children. Defendant has appealed from the judgment awarding custody contending the trial court erred in making its determination on an erroneous interpretation of the prevailing jurisprudence, in improperly conducting the custody hearing in open court, and in denying defendant the opportunity to present evidence to show plaintiff’s unfitness to have custody of the children. Defendant asks that the judgment be reversed and she be awarded custody, or alternatively, the judgment be set aside and the case remanded to afford her proper hearing. We affirm for the reasons assigned.

The undisputed evidence establishes that on May 25, 1978, defendant left the matrimonial domicile on Lake Claiborne, near Homer, Louisiana, and began living with a male acquaintance in Bossier City. She continued this cohabitation from May 25, 1978, through the date of trial on October 30, 1978. During most of this period the two children resided in the apartment with defendant and her paramour although occupying a separate bedroom. .

Although defendant admits this unlawful cohabitation, she contends the trial judge was in error in depriving 'her of the custody of her four and eight-year-old sons primarily because of these circumstances. Defendant contends the court erroneously relied on the decision of this court in Monsour v. Monsour, 339 So.2d 488 (La.App. 2d Cir. 1976), which was later reversed by the Louisiana Supreme Court, 347 So.2d 203 (La.1977). This argument is not well taken. The trial judge, in his reasons for judgment, cited and relied on a number of cases holding that it is not in the best interest of children to award their custody to the mother where she has recently lived in open and public adultery with her paramour for a substantial period of time in total disregard for moral principles of society. The Louisiana Supreme Court decision in Mon-sour does not support defendant’s position. In Monsour the trial court awarded custody to the mother even though she had lived in cohabitation with her paramour for a substantial period of time. The trial court found her marriage to him prior to the custody hearing purged her prior conduct and it was in the child’s best interest to be with the mother. This court was reversed primarily because it disturbed the discretion of the trial court in a custody matter. The instant case is the reverse of Monsour as the trial court found the defendant’s conduct to be detrimental to the children’s welfare. The defendant in this case continued her unlawful relationship through the date of trial. There was also other evidence in this ease casting doubt on defendant’s ability to provide a stable environment which the trial court could have considered in rejecting defendant’s demand for custody.

We do not find the trial court’s award to be in conflict with the prevailing jurisprudence including the Louisiana Supreme Court decision in Monsour.

Defendant’s request for a remand is based on four factors: (1) she was required to go to trial without counsel; (2) there were interrogatories submitted by her original counsel which were not properly answered by plaintiff; (3) the custody hearing was not held in chambers as required by La.C.C. Art. 157; and (4) she was unduly restricted in her presentation of evidence to rebut plaintiff’s allegations that he was a fit person to have custody.

The record does not show any prejudice to the rights of defendant by the trial judge in relation to defendant’s failure to have counsel at trial. In view of the fact that two different attorneys had withdrawn from representation of defendant since the beginning of this litigation, the trial court gave defendant a delay of approximately two weeks after the withdrawal on October 13 of defendant’s last counsel to make further arrangements for representation. The court properly required the matter to proceed to trial on October 30 (some three months after date of filing) even though defendant had not employed additional counsel. There is no showing her lack of, counsel was due to financial inability as defendant spent between May 25 and the October trial date some $14,000 obtained from her part of the sale of community property and advances by plaintiff.

Defendant has further failed to show she was prejudiced because of the absence of a formal answer to the interrogatories propounded to plaintiff. Although the record is unclear in this regard, there is an indication that prior to the withdrawal of defendant’s latest counsel, some informal communication of the information sought was made at the suggestion of the court. In any event, there was no objection raised to proceeding with the trial on the merits without receipt of the information sought by the interrogatories.

Defendant next contends that the custody proceeding was null because it was held in open court which is in contravention of La.C.C. Art. 157. The recent amendment of this article does mandate that a custody hearing be held in chambers. This provision is apparently intended to afford privacy to the litigants in the sensitive area of determining fitness for custody of children. We see no reason why it could not be waived by the parties, and in the instant case, the agreement to try the custody issue along with the merits of the divorce action in effect waived the requirement that the custody hearing be held in chambers. We can see no prejudice in this matter as the evidence concerning defendant’s adultery and cohabitation presented in the divorce proceeding was also the principal evidence on which the custody determination was grounded.

Defendant’s argument that she was restricted in presenting evidence to rebut plaintiff’s allegations that he was a fit person for custody is based on the ruling of the court on ap objection made by plaintiff’s counsel to defendant’s attempt, in the absence of allegations in her responsive pleadings, to explain that her leaving plaintiff was not just to have an affair, but because of past acts of cruel treatment toward herself and the children by plaintiff. The court instructed defendant it would permit her to discuss events surrounding her leaving provided the time frame was within a reasonable period with reference to the time defendant left the domicile. Defendant was then allowed to narrate without interruption by the court or plaintiff’s counsel the accusations she advanced against plaintiff relating to excessive use of alcoholic beverages, physical abuse of and continued bickering with defendant in the presence of the children.

The only witness called by defendant to corroborate her testimony was the wife of her brother who lived in Longview, Texas, who was permitted to testify without restriction. This witness seldom visited in the home with the parties and had no direct knowledge of any of the accusations made against plaintiff by defendant. There is no showing that defendant had other witnesses present or subpoenaed to testify as to plaintiff’s unfitness which she was prevented from calling by the trial court’s ruling. The plaintiff did, on the other hand, present substantial evidence as to his fitness to have the custody of his children.

Under the circumstances shown we do not find defendant has shown sufficient prejudice to justify the annulment of the judgment and our remanding for the purpose of allowing her to present further evidence.

For the foregoing reasons, the judgment is affirmed at appellant’s cost.

      . Murray v. Murray, 220 So.2d 790 (La.App. 1st Cir. 1969); Tuggle v. Tuggle, 235 So.2d 166 (La.App. 2d Cir. 1970); and Johnson v. Johnson, 268 So.2d 114 (La.App. 3d Cir. 1972).

      . Although defendant has asserted in brief to this court that she has married her paramour since the divorce decree, this was not a factor presented to the trial judge and is not part of the record for review.


text:
    Nelma R. HARVEY v. Kirby Ford HARVEY.
    No. 51007.
    Supreme Court of Mississippi.
    April 25, 1979.
    J. Gordon Roach, Roach, McMillan & Welch, John Gordon Roach, Jr., McComb, for appellant.
    Statham, Watkins, Starrett & Mitchell, Lem E. Mitchell, Magnolia, for appellee.
    Before SMITH, P. J., and SUGG and COFER, JJ.
   Appeal from Chancery Court, Pike County; Bert H. Jones, Chancellor.

AFFIRMED.


text:
    William R. HILL v. Bettye B. HILL.
    No. 51184.
    Supreme Court of Mississippi.
    April 25, 1979.
    Ron C. Smith, Jackson, for appellant.
    Baine, Moore, Simmons & Thompson, Frank T. Moore, Jr., Jackson, for appellee.
    Before SMITH, P. J., and SUGG and COFER, JJ.
   Appeal from Chancery Court, Hinds County; James Arden Barnett, Chancellor.

AFFIRMED.


text:
    James F. McGILL, Jack Pentecost, Mrs. Jack (Daisy) Pentecost v. The FIRST MISSISSIPPI NATIONAL BANK.
    No. 51198.
    Supreme Court of Mississippi.
    April 25, 1979.
    James G. McIntyre, Jackson, for appellant.
    Thomas W. Sanford, Jackson, for appel-lee.
    Before ROBERTSON, P. J., and WALKER and LEE, JJ.
   Appeal from Circuit Court, Madison County; Rufus H. Broome, Judge.

AFFIRMED.


text:
    David BOKANYI v. Cynthia Brady BOKANYI.
    No. 51136.
    Supreme Court of Mississippi.
    April 25, 1979.
    William D. Boerner, Brookhaven, for appellant.
    Hobbs, Hobbs & Peeples, Ralph L. Pee-ples, Brookhaven, for appellee.
    Before SMITH, P. J., and SUGG and COFER, JJ.
   Appeal from Chancery Court, Lincoln County; Mike Carr, Chancellor.

AFFIRMED.


author: ALMON, Justice.

text:
    William Roberts WILSON, Jr. v. James D. BROOKS, Individually, and Pillans, Reams, Tappan, Wood, Roberts & Vollmer.
    No. 77-601.
    Supreme Court of Alabama.
    March 23, 1979.
    Rehearing Denied April 20, 1979.
    Malcolm Murphy, Lucedale, and Wm. Roberts Wilson, Jr., Pascagoula, for appellant.
    Sam W. Pipes, III, and Victor H. Lott, Jr., of Lyons, Pipes & Cook, Mobile, for appellees.
   ALMON, Justice.

This case involves an action by one attorney, Wilson, against another attorney, Brooks, and Brooks’ law firm. Summary judgment was granted for the defendants. We affirm.

Several theories of recovery are advanced by Wilson which he contends should entitle him to a reversal of the summary judgment and a trial on the merits. We have carefully analyzed each of his alleged causes of action and consider it necessary to discuss only two of them, malicious prosecution and abuse of process. During oral argument, Wilson’s counsel conceded that the complaint did not allege tortious interference with a contractual relationship.

It is generally considered that the following elements must be shown in order to maintain an action for malicious prosecution:

“ ‘(1) the institution or continuation of original judicial proceedings, either civil or criminal; (2) by, or at the instance of, the defendant; (3) the termination of such proceedings in plaintiff’s favor; (4) malice in instituting the proceedings; (5) want of probable cause for the proceeding; and (6) the suffering of injury or damage as a result of the action or prosecution complained of.’ ”

Turner v. J. Blach & Sons, 242 Ala. 127, 129, 5 So.2d 93, 94 (1941).

The chief distinction between abuse of process and malicious prosecution is that the former rests upon the improper use of a regularly issued process, whereas the latter has to do with the wrong in the issuance of the process or in causing the process to be issued. Clikos v. Long, 231 Ala. 424,165 So. 394 (1936); Dickerson v. Schwabacher, 177 Ala. 371, 58 So. 986 (1912).

The facts out of which this controversy arose are somewhat complicated because two other lawsuits are involved. The first case was in Federal District Court for the Southern District of Alabama in Mobile. The parties and their respective attorneys were: Indian Towing Company, represented by Mr. Samuel Exnicios, New Orleans, Louisiana and Mr. James Brooks, of Mobile, Alabama; Lumber Company of America, Inc., represented by Albert Sidney Johnston of Mississippi and William Roberts Wilson, Jr. of Mobile, Alabama; Mr. Don Durant, represented by Mr. Samuel Exnicios of New Orleans, Louisiana and Mr. James Brooks of Mobile, Alabama, and two other individuals, Martin Bender and David Reppuhn. (The record does not reveal who represented Bender and Reppuhn, and for our purposes, it is immaterial).

The record indicates generally that Mr. Don Durant owned substantial, if not controlling interests in both Indian Towing Company and the Lumber Company of America, Inc. and these two entities were represented by different counsel so as to preserve their separate rights and interests. Captain Andre Van Oosten was an officer of both Indian Towing Company and Lumber Company of America and acting in that capacity, Captain Van Oosten retained Albert Sidney Johnston of Mississippi to represent the Lumber Company of America.

Insofar as we can ascertain, Mr. Durant (or Lumber Company of America) either owned or claimed title to certain lumber which had been shipped from South America to New Orleans, Louisiana, and ultimately to Mobile, Alabama. It appears that Reppuhn and Bender also asserted a claim to this lumber and Indian Towing Company presented their claim for transportation of the lumber. During the trial of this case, Mr. Durant, acting on behalf of Lumbér Company of America settled the case for approximately $250,000.

The second lawsuit involved an action in the Mobile Circuit Court by Albert Sidney Johnston and William Roberts Wilson against Don Durant and Lumber Company of America. Johnston and Wilson sought payment for their services in the federal litigation, however, Durant not only denied their claim, but he also filed a $300,000 malpractice counterclaim against Johnston and Wilson. This counterclaim (dismissed with prejudice pursuant to a settlement agreement wherein Johnston and Wilson reduced their fee demands) was based on an affidavit by James Brooks, the attorney for Indian Towing Company and Don Durant in the federal litigation. In Brooks’ affidavit, he stated that

“the attorneys for the Lumber Company of America, Inc., whether Albert Sidney Johnston III, individually, or in concert with William Robert Wilson, Jr., did not meet the standard which might reasonably be expected of a practicing member of Mobile Bar, in the defense of this case, in that they did not properly prepare the case, were not familiar with the depositions, failed to examine various witnesses upon taking of depositions, and failed to adequately prepare a defense or offense in the case.”

Turning now to the instant case, as we construe the complaint, Wilson alleges that he was associated by Albert Sidney Johnston in a limited role to provide a mere conduit through which pleadings were filed and served, and that Brooks knew of this limited role in the federal litigation. The allegations in the complaint, viewed in light of the facts in the record appear to support the inference that Brooks not only persuaded Durant not to pay Johnston and Wilson, but also executed the affidavit to divert Durant’s attention from Brooks’ role in recommending the settlement of the federal suit.

Wilson contends that since Brooks knew about the pro forma nature of Wilson’s appearance in the federal case, he perverted legal processes by procuring the filing of the malpractice counterclaim against Wilson; that Brooks acted maliciously and with the ulterior motive to mislead Durant with respect to the unfavorable settlement in the federal litigation.

Portions of several affidavits and depositions tend to support Wilson’s position. Mr. Samuel Exnicios, Brooks’ co-counsel was deposed in New Orleans, Louisiana and a portion of his testimony follows:

Q. All right, sir. Do you know Mr. Robert Wilson, Bob Wilson?
A. Yes, sir.
Q. What was his involvement in the defense of these cases?
A. Well, Mr. Johnston, being an attorney from Mississippi, likewise needed local counsel to represent him before the service of proceedings, pleadings, etc., under the court rules in Alabama, and he was brought in for that purpose.
Q. Do you know what his duties were in relation to the defense of this suit for Lumber Company of America, Inc.?
A. Sole duties that I know of was to accept pleadings on our behalf, on behalf of, actually, Albert Sidney Johnston, and file them if we sent him anything.
Q. Was he to participate in the trial or defense of this cause?
A. Neither was he supposed to and neither did he do so. He did not participate on an active basis. He was a young lawyer. He was, at that time, there, at the time of the trial, but the litigation was quite complicated and he wasn’t ever fully acquainted with it that I know of.
Q. Was he supposed to be acquainted with it?
A. He was never, to my knowledge, supposed to be acquainted with the suit in any way, shape or form. We did not discuss the suit with him. He wasn’t to be taken into consideration in discussing the suit, and we never did.
* * * * * *
Upon the advice of Mr. Brooks to Mr. Durant and myself and Mr. Johnston, that the judge would not believe what Captain Van Oosten said, we told Mr. Durant that now (during the trial) is the best time to try to negotiate a settlement .
******
Q. At any time during the course of the trial of that suit, did Mr. Brooks ever express to you that Mr. Wilson was incompetent and not living up to or fulfilling his duties for the purpose for which he was employed?
A. Not to my knowledge. He never expressed any such question. In fact, it would have been beyond his interest to do so because Mr. Wilson and Mr. Johnston were working together, and Mr. Brooks and myself were working together; so it was not that we were looking over what he was doing, Mr. Wilson. He was only a figurehead for the purpose of meeting the requirements of the court, the local rules of the court. That’s all he was employed to do and that’s all he ever did and that’s all we ever expected him to do.
The deposition of Captain Andre Van Oosten is part of the record and he also testified as to Wilson’s limited role in the federal case.
Q. All right, sir. Does the affidavit also set out the employment of William Roberts Wilson, Jr., sir?
A. That is referred to. I see in here— The affidavit speaks for itself, but I did, in this situation, employ Mr. Johnston to represent Lumber Company of America; and he in turn, the way I understood it, employed Mr. Wilson, William Roberts Wilson, of Mobile, to file the documents in the Mobile Court.
Q. All right, sir. Were these attorneys employed under your direction and supervision?
A. Not Mr. Wilson, but Mr. Johnston was.
Q. To your personal knowledge, what was Mr. Wilson’s function?
A. All he did was file papers.
Q. Was he to participate in any way in the defense of Lumber Company of America?
A. Not that I was aware of.
Q. Was he to assist in the trial or settlement or progress of the case in any way?
A. I don’t think I ever heard him open his mouth.
Q. All right, sir. Do you know the reason why it was necessary to employ Mr. Wilson?
A. I understand that Mr. Johnston could not directly go into the federal court in Mobile and needed a local attorney to introduce him, or whatever you do in those cases.
Q. All right, sir; and to your knowledge was that the only and sole purpose for the employment of Mr. Wilson?
A. That’s all I understood him to be.
* * * * * *
Q. Now, do you know what the duties were of Mr. Wilson in that case?
A. Well, I said that before. He was supposed to submit paper work and that’s it.
******
Q. To your knowledge, did Mr. Wilson have anything to do with the settlement of that case?
A. No, he didn’t.

Captain Van Oosten’s affidavit, filed in the second suit heretofore referenced is consistent with his deposition.

I am ANDRE VAN OOSTEN. I am sometimes employed by Indian Towing Company, Inc., a corporation which is principally owned by Don Durant. For and on behalf of Lumber Company of America, I handled the employment of ALBERT SIDNEY JOHNSTON, III to represent Lumber Company of America, a corporation in a lawsuit which was pending against it in the United States District Court for the Southern District of Alabama, Southern Division and being Civil Action No. 74 — 268—T, Indian Towing Company v. Lumber Company of America, etc. The agreement with William Roberts Wilson, Jr., made by ALBERT SIDNEY JOHNSTON, III, understood to be that he was not to necessarily participate in the case, but was to be paid for the use of his name on pleadings. He later billed $500.00 for this service. Mr. Wilson’s only compensation was to be $500.00 for the use of his name in that Mr. Johnston, being licensed to practice law in the State of Mississippi, case being in the State of Alabama, needed to have an attorney associated with him who was licensed in the State of Alabama.

The affidavit of Albert Sidney Johnston, III, filed in this case, provides in pertinent part:

[S]ince I was not licensed to practice before the Bar of the United States District Court for the Southern District of Alabama it was necessary for me to obtain local counsel in order to file pleadings in said cause and participate therein.
I therefore, being duly authorized to associate local counsel, hired Wm. Roberts Wilson, Jr., Plaintiff herein, to represent the interest of Lumber Company of America, Inc. in the following specifically limited and distinct capacity:
Mr. Wilson was merely to undertake the signing of pleadings in said cause and he was further merely to sit in the courtroom during the trial of the said cause. For this, he was to charge a retainer fee of FIVE HUNDRED ($500.00) DOLLARS for signing the pleadings and handling pleadings which were to be filed through his office in Mobile, Alabama, plus time charges for mere presence in Court. Mr. Wilson did each and every one of the duties for which he was hired, fully, completely and competently.
On the other hand, I specifically instructed Mr. Wilson not to attend depositions, not to take depositions, not to participate in the active trial of the case in any manner, he was not to undertake discovery, research, preparation or any duties other than that immediately described above, he was not to give advice, opinions, legal or otherwise, he was not to consult with the parties to the lawsuit or the attorneys, and he was not to take any active role in the lawsuit whatsoever. Mr. Wilson gave no advice to Mr. Durant or anyone else whether or not a settlement should be made in any matter, he gave no recommendations as to whether or not any settlement should be made, and he discharged all duties as specified above properly, competently, and thoroughly.
All attorneys in the Federal Case, including James Brooks were aware of Mr. Wilson’s limited capacity in the Federal Case. There' was no way any of the Parties or Attorneys in the Federal case could have been unaware of Mr. Wilson’s limited capacity and acts.
I was the individual who hired Mr. Wilson. I was his only supervisor, I was lead counsel, he followed my directions and did each and every thing properly and satisfactorily that he was requested to do by me, which was limited to the signing of pleadings and attending Court sessions. (emphasis added)

As previously noted, termination of the proceeding in favor of the plaintiff is a prerequisite for successful malicious prosecution action. Turner, supra. In this regard, we consider Wilson’s complaint fatally defective. It is true that the malpractice counterclaim allegedly initiated by Brooks was dismissed with prejudice, but contrary to Wilson’s allegation, the dismissal of the counterclaim was part of the settlement agreement wherein Wilson, and presumably Johnston, reduced their fee demands. Thus, the termination of the previous litigation was not favorable in all respects and Wilson’s malicious prosecution action will not lie.

Addressing Wilson’s abuse of process claim, in the case of Tarver v. Household Finance Corp., 291 Ala. 25, 277 So.2d 330 (1973), it was established that “termination of the original suit in plaintiff’s favor is not an element of a cause of action for abuse of process.” We have noted that an abuse of process is the improper use of a regularly issued process but in this case, Wilson has alleged that Brooks’ extra-judicial actions, informing Durant that Johnston and Wilson improperly conducted the federal litigation, actually motivated Durant to file the malpractice counterclaim in the second suit. If that be the case, then the counterclaim was not regularly and rightfully issued within the definition set out in Clikos, supra; therefore the action for abuse of process will not lie.

It appears that the trial court properly granted the defendants’ motion for summary judgment and is due to be affirmed.

AFFIRMED.

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

      . These facts have been distilled from the depositions and affidavits of Samuel Exnicios, Andre Van Oosten, Albert Sidney Johnston and Don Durant.

      . The record indicated that Mr. Durant decided to settle the case after Mr. Brooks advised him that the Federal District Judge hearing the case would not believe the testimony of Captain Van Oosten. Mr. Exnicios testified in his deposition that Mr. Brooks had previously represented Captain Van Oosten in a case before this judge and “Mr. Brooks felt that the judge knew Captain Van Oosten and was not going to place any value on his testimony.”
      Captain Van Oosten, however, stated in his deposition that he had never testified before the judge presiding in that case and that the first time he had ever seen that judge was on the day of the trial.


author: PER CURIAM.

text:
    Clifford CLEVELAND and Lura S. Watson v. Nicholas S. HARE.
    78-25.
    Supreme Court of Alabama.
    April 20, 1979.
    R. L. Ingalls, Montgomery, for appellants.
    Nicholas S. Hare, Jr., Monroeville, for appellee.
   PER CURIAM.

The original opinion is withdrawn and the following corrected opinion is substituted therefor.

On April 25, 1978, appellants suffered summary judgment. On May 26,1978, they filed a “MOTION FOR RECONSIDERATION AND MOTION FOR STAY” which we consider to be a Rule 59 ARCP motion. This appeal is due to be dismissed for two reasons. First, the motion was filed more than 30 days after entry of judgment and therefore is untimely. Second, had the motion been timely filed, the appeal was not taken within 42 days after the motion was deemed denied by operation of Rule 59.1, ARCP. The trial court ordered a stay (pursuant to Rule 62(b), ARCP) and 45 days “to file specific reasons why this Court should reconsider its order of April 25, 1978.” We need not decide the effect of this order because, under State v. Wall, 348 So.2d 482 (Ala.1977), a post-trial motion is “pending” as of its date of filing.

Under Rule 59.1, the post-trial motion filed by appellants on May 26, 1978, could not remain “pending” more than 90 days. Because the motion was not disposed of by the trial court within the 90-day period and the period was not extended by express consent of all the parties, the post-trial motion was automatically denied August 24,1978 (90 days after its filing). Although the trial judge entered an order September 6, 1978, purporting to deny the motion, it was functus officio coming after the 90 days had run. Thompson v. Keith, 365 So.2d 971 (Ala.1978).

Thus, appellants’ appeal filed October 10, 1978, more than 42 days after August 24, 1978, was not timely and appellee’s motion to dismiss is due to be granted.

APPEAL DISMISSED.

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


author: EMBRY, Justice.

text:
    EMPLOYEES’ RETIREMENT SYSTEM OF ALABAMA, etc., et al. v. Lottie M. HEAD.
    77-604.
    Supreme Court of Alabama.
    April 20, 1979.
    William J. Baxley, Atty. Gen., John N. Pappanastos, Sp. Asst. Atty. Gen., Montgomery, for appellants.
    Joseph T. Carpenter, Montgomery, for appellee.
   EMBRY, Justice.

This appeal by the Employees’ Retirement System of Alabama, the members of its Board of Control, and its Board of Control, is from a judgment of the Circuit Court of Montgomery County holding that an optional retirement allowance elected by a member of the System was not abrogated by the death of the member prior to the effective date of his retirement.

We hold that the elected option was abrogated and therefore reverse.

Walter C. Head, Jr., an employee of the State of Alabama became eligible to retire and to this end, on 15 June 1976, applied for retirement effective 1 August 1976. On 30 June 1976 he elected to receive his retirement allowance under Code 1975, § 36-27— 16(d)(2):

“(d) Optional allowances. — With the provision that the election of an option shall be effective on the effective date of retirement, any member may elect prior to retirement to receive, in lieu of his retirement allowance payable throughout life, the actuarial equivalent, at that time, of his retirement allowance in a reduced retirement allowance payable throughout life with the provisions that:
* * * * * *
“(2) Option 2. — Upon his death, his reduced retirement allowance shall be continued throughout the life of and paid to such person as he shall nominate by written designation duly acknowledged and filed with the board of control at the time of his retirement;”

He nominated his wife, Lottie M. Head, as the recipient of the reduced allowance provided by (d)(2), Option 2 above.

On 19 July 1976, thirteen days before his effective date of retirement, Head died. Section 36-27-16(c)(2) of the Code of 1975 provides:

“(2) In the case of the death of a member eligible for service retirement pursuant to subsection (a) of this section, an allowance shall be paid to the surviving spouse in an amount that would have been payable if the member had retired immediately prior to his death and had elected option 3, as set forth in subsection (d) of this section;”

On the basis of this section, the system initiated payment to Mrs. Head under the provisions of Code 1975, § 36-27-16(d)(3), Option 3 which provides:

“(3) Option 3. — Upon his death, one half of his reduced allowance shall be continued throughout the life of and paid to such person as he shall nominate by written designation duly acknowledged and filed with the board of control at the time of his retirement * * * ”

The sum payable to her under the latter provision is substantially less than that payable under (d)(2) Option 2. She demanded payment under Option 2. The System refused her demand. She filed this action, which was tried to the court without a jury, resulting in judgment reading in part as follows:

“How harsh would be such a law if an employee did all that he could toward applying for an option such as option 2, when he had met all other requirements and but for the providence of God he was taken from this life [13] days prior to satisfying a technical interpretation of the law. It is the opinion of this Court that Sec. 36.27.16(d) should be considered most favorably to the complainant and it is the opinion of this Court that the deceased, Walter C. Head, Jr., did everything necessary to comply with the law to receive option 2 and, therefore, his widow, Lottie M. Head, is entitled to option 2, and it is
“ORDERED that the defendant Employees’ Retirement System of Alabama, et al. pay to Lottie M. Head under option 2 all moneys she would be entitled to in the past and future under the benefits earned by her deceased husband, Walter C. Head, Jr.”

The issue is whether the trial court erred to reversal in holding that Lottie M. Head is entitled to benefits under Option 2 of § 36-27-16(d).

The decision in this case turns on the correct interpretation of § 36-27 — 16(d). When this court is called upon to interpret a statute, the underlying consideration, always, is to ascertain and effectuate the intent of the legislature as expressed in the statute. Bagley v. City of Mobile, 352 So.2d 1115 (Ala.1977); Tillman v. Sibble, 341 So.2d 686 (Ala.1977). When the language of a statute is clear and unambiguous, there is no room for construction and a clearly expressed intent must be given effect. Boswell v. South Central Bell Telephone Co., 293 Ala. 189, 301 So.2d 65 (1974); Alabama Industrial Bank v. State ex rel. Avinger, 286 Ala. 59, 237 So.2d 108 (1970). In arriving at a determination of the intent of the legislature, the whole statute under construction should be examined and, if possible, each section should be given effect. Tillman v. Sibble, supra; State ex rel. Moore v. Strickland, 289 Ala. 488, 268 So.2d 766 (1972); City of Birmingham v. Hendrix, 257 Ala. 300, 58 So.2d 626 (1952).

There is no lack of clarity and no ambiguity in the language of § 36-27-16(d). It clearly states that the election of an option shall be effective on the effective date of retirement. The language is both mandatory and unequivocal. Section 36— 27 — 1(19) defines retirement as: “[withdrawal from active service with a retirement allowance or optional benefit in lieu thereof granted under the provisions of this article.” The stipulated facts in this case clearly show that Head’s effective date of retirement was 1 August 1976. Head died on 19 July 1976, before the effective date of his retirement. Therefore, according to the clear and unambiguous language of the statute, Head’s election of Option 2 benefits was not effective. His death abrogated his election of Option 2 benefits and made applicable § 36-27-16(c)(2), providing for Option 3 benefits.

At the time of his death, he was actively employed with the State, on its payroll and still making contributions, just as any other active employee member of the Retirement System. He had not “with-, drawn from service” nor was he in receipt of “a retirement allowance or optional benefit in lieu thereof.” Although eligible for retirement, Head died before his effective date of retirement; therefore, under the clear wording of the Code, Mrs. Head was and is entitled only to Option 3 benefits, dictated in these circumstances by § 36-27-16(c)(2) of the Code. Employee’s Retirement System of Ala. v. McKinnon, 349 So.2d 569 (Ala.1977). To some, our decision in this case may appear harsh. Obviously, it appeared to the trial court that it would be harsh to reach the result that this court has reached in this case. However, it is not this court’s function to usurp the role of the legislature and correct defective legislation or amend statutes under the guise of construction. See State v. Praetorians, 226 Ala. 259, 146 So. 411 (1933).

For the reasons assigned, the judgment below must be reversed and the case remanded to the trial court for entry by that court of judgment consistent with this opinion.

REVERSED AND REMANDED.

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


author: WRIGHT, Presiding Judge. HOLMES, Judge

text:
    STATE of Alabama, and Tom J. Ventress, as Director of the Department of Industrial Relations of the State of Alabama v. GIBSON’S BARBECUE.
    Civ. 1443.
    Court of Civil Appeals of Alabama.
    Sept. 27, 1978.
    Rehearing Denied Nov. 1, 1978.

      George C. Cocoris, General Counsel, State of Alabama, Dept, of Industrial Relations, Legal Division, Montgomery, for appellant.
    Forrest D. Herrington, Huntsville, for ap-pellee.
   WRIGHT, Presiding Judge.

Taxpayer, Gibson’s Barbecue, Inc., an employer under the unemployment compensation law was assessed an increased rate of contribution by the Department of Industrial Relations of the State of Alabama as a successor employer under § 25-4r-54(i), Code of Alabama (1975). After denial of administrative relief, taxpayer appealed to the circuit court. The circuit court, construing § 25-4-8(a)(4)a, Code of Alabama (1975), found as a fact that taxpayer was not a successor employer and reversed the assessment of the department.

The facts from which this matter arose were materially as follows: David Gibson and Beatrice Gibson had operated a barbecue take out business in Huntsville for many years prior to March 1976. The business account with the state unemployment compensation fund was in the name of “David Gibson’s Barbecue No. 1.” Its employment record was not good and its rate of contribution to the compensation fund was high. Jessie Sanford and John Hampton, as partners had also been in the barbecue business in Huntsville for many years. They had incorporated their business in 1975 as Gibson’s Barbecue, Inc., each owning fifty percent of the stock. Gibson’s Barbecue, Inc. had an excellent employment experience with the Department and thus a low contribution rate.

On March 9, 1976, Sanford and Hampton, as partners, entered into a contract with David and Beatrice Gibson to purchase the property, inventory and equipment of David Gibson’s Barbecue No. 1 as of April 1,1976. The Gibsons agreed not to compete in the barbecue business in Huntsville for a period of ten years except for the continued operation of David Gibson’s Barbecue No. 2 at another location.

Sanford and Hampton, as partners then executed a lease of the real estate purchased to Gibson’s Barbecue, Inc. for a term of five years beginning April 1, 1976. On April 1, Gibson’s Barbecue, Inc. took possession of the premises and operation of David Gibson’s Barbecue No. 1. It also received transfer of the equipment and inventory. There was no interruption of business. Six of the regular employees remained on the job. Only the management changed. In a few days, the public name of the business was changed to Gibson’s Barbecue, Inc.

The Department combined the benefit wage record of Gibson’s Barbecue, Inc. with the benefit wage record of David Gibson’s Barbecue No. 1 for the years 1974, 1975 and 1976 to calculate the contribution rate for Gibson’s Barbecue, Inc. for the year 1977. The combining of the poor experience of the old business with the excellent experience of Gibson’s, Inc. resulted in a large increase in the rate.

The only issue presented is whether the trial court erred in finding that Gibson’s Barbecue, Inc. was not, in fact, a successor employer to David Gibson’s Barbecue No. 1 under the statute.

Section 25-4 — 8(a)(4)a provides inter alia as follows:

“(a) ‘Employer’ as used in this chapter shall mean:
“(4) Any employing unit (whether or not an employing unit at the time of acquisition) which:
“a. Acquired the organization, trade, or business, or substantially all the assets thereof, of another employing unit which at the time of such acquisition was an employer subject to this chapter.”

The trial court stated in its judgment the following:

“That sufficiently different methods of dealing with employees as well as operating the business were employed by the plaintiff to warrant a determination by the court that an entirely new operation was commenced rather than the assumption of control of a previous operation.”

We are uncertain of the meaning of this statement. It appears the court concluded that if the new owner inaugurated business and management practices after taking over that were different from those of the former owner, it was not a successor employer under the statute. We are unable to accept that conclusion. If the statement of the court means that it concluded that the “organization” of the prior employer was not “acquired” within the meaning of the statute, we agree. Six of the former employees were retained by the new owner. However, none of those were management. It has been said that the management component of the business is the “vital, integral parts required for continued operation.” Michigan Employment Sec. Comm’n v. Arrow Plating Co., 10 Mich.App. 323, 159 N.W.2d 378 (1968).

It may be further said that there is insufficient evidence that the “trade or business” of the prior owner was acquired. Though the new owner continued to sell barbecue at the same location, using some of the same employees, the same equipment, and for a while, the same name, and offered its product and service to the general public as did its predecessor, such is not proof of acquiring the “trade or business.” Within the context of the statute, acquiring the “trade or business” implies a transferral of a specific market or clientele from the former to the new. Grand Rapids Dry Goods Co. v. Michigan Employment Sec. Comm’n, 348 Mich. 177, 82 N.W.2d 479 (1957); Michigan Employment Sec. Comm’n v. Arrow Plating Co., supra.

It is further indicated that the trial court based its conclusion upon a finding that Gibson’s Barbecue, Inc. was not a successor employer because it did not “directly” acquire substantially all of the assets of David Gibson’s Barbecue No. 1. Gibson’s submits this point upon the authority of the case of Pariseau Corporation v. State, 102 N.H. 364, 156 A.2d 753 (1959).

Pariseau was a case in which a corporation was claiming to be a successor employer so that it could secure the benefit of a favorable contribution rate held by the former owner. Our case involves an attempt to avoid an unfavorable rate by claiming not to be a successor employer. In Pariseau the contract for purchase of partial assets of a business was made by one corporation. The contract was assigned on the same day to another corporation, Pariseau, wholly owned by the first corporation and organized for the purpose of operating the business purchased. Pariseau contended the making of the contract to purchase by the parent corporation and the subsequent forming of a new corporation and assignment of the contract were merely procedural steps and it was, in fact, a successor corporation. The court found from the evidence that the first purchasing corporation had, in fact, operated the business purchased from opening in the morning until 2:00 P.M., before the Pariseau corporation was formed and the assignment made to it. Thus, there was no direct transfer of assets to Pariseau from the employing unit with the favorable rate, but rather the original purchaser had become an employing unit while it owned and operated the business for the few hours. Therefore, Pariseau did not directly acquire from the original owner. It is not necessary that we agree or disagree with the conclusion of Pariseau, for it is clearly distinguishable on its facts.

In this case, though the contract of purchase was made by a partnership, there is no evidence that the partnership ever became an employing unit by operating the business even for a few hours as in Pari-seau. The evidence is explicit that the lease was executed between the partnership and Gibson’s, Inc. and other arrangements for transfer of assets and employees made prior to April 1, 1976. The operation of the business and transfer of possession was from David Gibson’s Barbecue No. 1 to Gibson’s Barbecue, Inc. as of the opening for business-on April 1. There was no hiatus for change of operation or possession. The employees were employees of David Gibson’s Barbecue No. 1 on March 31 and employees of Gibson’s Barbecue, Inc. on April 1. The partnership was not an intervening employing unit. We believe the statute requires only a succession of employing units through the acquisition of substantially all of the assets. Gibson’s Barbecue, Inc. acquired substantially all of the assets of David Gibson’s Barbecue No. 1 by lease of the property and transfer or sale of equipment and inventory from the partnership. At the time of the acquisition, April 1,1976, David Gibson’s Barbecue No. 1 was an employer subject to the statute. The acquisition of ownership may be said to be procedurally indirect, but the succession of both ownership and operation was, in fact, direct and simultaneous. To hold otherwise would be to permit avoidance of the purpose of the statute.

We do not consider the fact that Gibson’s Barbecue, Inc. acquired substantially all of the assets by lease rather than purchase to affect the application of the statute. One can acquire assets of a business through a leasehold interest. Sea Crest Hotel, Inc. v. Director of Division of Employ. Sec., 330 Mass. 226, 112 N.E.2d 813 (1953); Chief Freight Lines Co. v. Industrial Comm’n, 366 S.W.2d 48 (Mo.App.1963).

It is the judgment of the court that the trial court erred in applying the law to the facts and its judgment is erroneous and must be reversed.

REVERSED AND RENDERED.

BRADLEY, J., concurs.

HOLMES, J., dissents.

HOLMES, Judge

(dissenting):

I respectfully dissent. The trial court found the taxpayer was not subject to the tax rate the State sought to impose upon him. I agree that the taxpayer is not subject to the tax rate the State seeks to impose upon him under § 25-4—54(i).

The majority opinion reaches an unfortunate result in that it unreasonably burdens the taxpayer with a tax rate which is not warranted by the facts, and it is contrary to the policies which underpin the unemployment system of this state.

Without reiterating the circumstances of this case, there is a fact of vital importance worthy of mention. Gibson’s Barbecue, Inc., as taxpayer, has maintained an excellent benefit wage record (experience rating) over an extended period of time in the past. This is clearly indicated by the record and, in fact, the State does not contend to the contrary. Given this fact, we do not have a situation before us in which a successor employer seeks to circumvent the spirit of §§ 25-4-54(i), and 25-4-8(a)4(a), Code of Ala.1975, by attempting to acquire the favorable tax treatment of a former employer, even though the successor would not himself be entitled to such favorable treatment. See, e. g., Annot., 22 A.L.R.2d 673 (1950). Nor do we have a situation in which a taxpayer is attempting to avoid payment of delinquent taxes; in fact, the taxpayer instituted this action in an effort to determine his reasonable tax rate prior to any assessment. The action became necessary because the State seeks, in large part, to impose the experience rating of the taxpayer’s predecessor upon the taxpayer, notwithstanding the fact that they had granted the taxpayer a favorable rate in years past.

To facilitate the discussion of my objections to the majority’s holding, a brief digression to the objectives of Alabama unemployment compensation system is appropriate.

The objectives of the unemployment tax are two: To prevent unemployment by inducing employers to stabilize their operations and to fund the payment of benefits for the unemployment that remains. Brandeis, The Employer Reserve Type of Unemployment Compensation Law, 3 Law & Contemp. Prob. 54, 56 (1936). The experience rating is the means employed by the State to accomplish these two ends. That is, the taxpayer has an incentive to reduce the incidence of his tax by reducing unemployment in his business while, at the same time, the rate of tax assessed against him is calculated to fund the system based upon a computation of the risk that his employees will become jobless. The tax must, of necessity, be differential in order to be an incentive and, accordingly, it is increased or decreased based on an analysis of the history of the employer’s employment stability.

Since the tax rate is differential, an employer is entitled to factually demonstrate he is entitled to a reduced rate of contribution based on an analysis of his “experience” with respect to unemployment or other factors bearing a direct relation to the unemployment risk. A. Arnold, Experience Rating, 55 Yale L.J. 218, 231 (1945). In order for the system to operate fairly to both employer and employee and achieve its objectives:

“[T]he measure that is used . . . [to calculate the experience rating] ought necessarily to reflect each employer’s performance in terms of the cost of unemployment which he places upon the fund, or of his performance in stabilizing his employment. . . .” [Emphasis supplied.]

Clearly, what is required is a balancing of interests. If the rate assessed is insufficient to cover the risk, then the system is inadequately funded; on the other hand, if the rate is greater than that necessary to meet the risk, the tax is no longer an incentive and becomes an unreasonable burden on the businessman.

In this instance, the State’s assessment serves as a penalty on the taxpayer. This is to be avoided as the court in Pariseau Corp. v. State, 102 N.H. 364, 156 A.2d 753 (1959), aptly noted:

“[I]t is considered advisable to reward an employer with good employment records by giving him a favorable rating and thereby reducing his payment . . . .” Id. 156 A.2d at 756.

Given the fact that the system seeks to balance the interest of both employer and employee, the State is precluded from assessing a rate which does not serve the ends of the system. Here, the State has chosen a rate which punishes rather than rewards and for this reason alone the tax rate assessed is unreasonable.

More importantly, the State’s calculation of the experience rating here bears no reasonable relationship to unemployment or other factors bearing a direct relationship to the risk of unemployment. That the tax rate must directly relate to the risk is demonstrated by the language in § 1602 of the Internal Revenue Code of 1939, which provides in part:

“[N]o reduced rate of contributions . is permitted to a person' . . . having individuals in his . employ except on the basis of his . . . experience with respect to unemployment or other factors bearing a direct relation to unemployment risk . . . .” 26 U.S.C.A. § 3303(a)(1) 1970. [Emphasis supplied.]

The mere fact that there has been a transfer of a business to a successor does not make the requirement that there be a factual basis to support the experience rating any less compelling. When the experience of the successor is likely to be that of his successor, his contribution should be that of his predecessor. See, e. g., Note, 60 Harvard L.Rev. 276, 277 (1946). Conversely, when the successor’s experience rating is likely to be much better than his predecessor, there is no factual basis to assign the predecessor’s rating to the successor. George v. Unemployment Comm’n, 3 Terry 558, 41 A.2d 465 (Del.Super.Ct.1945). As the court in George, supra, noted:

“Again, let it be supposed that the firm had a poor experience record of employment with a rate of three per centum or more, . . . and upon [transfer], the survivor continued to operate as before, it would be a harsh ruling to fasten the penalty on the successor.” Id. 41 A.2d at 468.

Here, the State has ignored the experience rating it previously assigned to the taxpayer and the facts upon which it calculated that rate. I believe the State now seeks to arbitrarily assign a rating based on another’s poor performance and this is both logically and factually impermissible.

The scope of the effect of the majority’s decision goes much further than its effect upon the instant taxpayer. As noted above, the first of the two goals of the system is to stimulate the reduction of unemployment by offering a tax rate decrease when the businessman demonstrates his intention and ability to sustain employment in his firm. The majority’s decision places this objective in jeopardy since it discourages the public policy in Alabama of encouraging job expansion. As stated in E. Schmidt, Experience Rating and Unemployment Compensation, 55 Yale L.J. 242 (1945):

“A tax upon the employer measured by payrolls is one of the worst types of taxes in terms of encouraging job expansion. The higher the wages, the higher the tax; The greater the number of workers, the greater the tax; every wage increase means a higher payroll tax; every worker added to the payroll means an extra tax. It is under experience rating coupled with effective employment stabilization that the employer’s incentive to avoid the payroll tax is reduced, because the employer may qualify for a reduced . . . rate ...” Id. at 246-47.

Another advantage accrues when the system of ratings operates as it should. Where payroll taxes are minimized as a consequence of the employer’s concerted effort to keep his employees on the job, the tax savings which result serve to facilitate business expansion. This expansion can be expected to contribute to a reduction in short term unemployment and cyclical unemployment as well. Id. at 250. Where, as here, the State assigns the taxpayer the poor rating of his predecessor, the economic advantages which the system seeks to foster are jeopardized.

For the foregoing reasons, I would hold that, in this case, as the trial court did, that the taxpayer is not within the application of § 25-4-54(i), Code of Ala.1975, and therefore, he should be assessed the favorable experience rating to which he has demonstrated he is entitled. The purpose of the statute would be fulfilled by so holding and, therefore, I would affirm the trial court’s action.


author: SHORES, Justice.

text:
    Ex parte GIBSON’S BARBECUE, INC.
    78-98.
    Supreme Court of Alabama.
    May 4, 1979.
   SHORES, Justice.

Writ quashed as improvidently granted.

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

ALMON and EMBRY, JJ., dissent.