author: BOWLING, Justice, for the Court:

text:
    Harold G. TOLAR and Nell F. Tolar v. BANKERS TRUST SAVINGS & LOAN ASSOCIATION, State Farm Fire & Casualty Company, National General Insurance Company, and Citizens Bank of Columbia, Mississippi.
    No. 50642.
    Supreme Court of Mississippi.
    Sept. 27, 1978.
    Rehearing Denied Nov. 15, 1978.

      Emory E. Morgan, Columbia, for appellant.
    Bacon, Smith & Jernigan, Robert B. Henderson, E. Frank Goodman, William A. Bacon, Watkins & Eager, Yelia Ann Mayer, William M. Dalehite, Jr., Wise Carter Child Steen & Caraway, Jackson, for appellees.
    Before SMITH, WALKER and BOWLING, JJ.
   BOWLING, Justice, for the Court:

This cause originated in the Chancery Court of the First Judicial District of Hinds County. Appellee and cross-appellant, Bankers Trust Savings & Loan Association, filed its bill of complaint against State Farm Fire & Casualty Insurance Company, National General Insurance Company, the Citizens Bank of Columbia, and Harold G. Tolar and Nell F. Tolar. Later an intervention was permitted by Stuart Robinson, trustee in a deed of trust given by defendants, the Tolars, to complainant, Bankers Trust Savings & Loan Association. The purpose of the suit was to collect as mortgagee on policies of fire insurance allegedly covering the Tolar residence, and to foreclose the deed of trust and collect any balance due the complainant after any collection under the fire insurance policies.

All defendants filed cross-bills of complaint. Each insurance company contended that the other’s policy covered the loss and that its policy was not in force, for the reasons hereafter set out, at the time of the fire that destroyed the Tolar’s residence. The defendants, Harold G. Tolar and Nell F. Tolar contended that policies of fire insurance issued by both insurance company defendants were in force and proceeds were owed them as insureds thereunder. Citizens Bank of Columbia contended that it was entitled to payment of eighty percent of the indebtedness owed it by the Tolars; that this obligation was assumed by Bankers Trust Savings & Loan Association under a subordination agreement at the time of the original transaction.

The loan to the Tolars from Bankers Trust Savings & Loan Association was for the purpose of constructing a residence on approximately 82 acres of land about seventeen miles north of Columbia, Mississippi. Citizens Bank of Columbia agreed to advance partial interim financing for the construction. There was then an agreement between Bankers Trust Savings & Loan Association and the local bank that the Bank’s note and deed of trust under its loan would be subordinated to that of Bankers Trust. A condition of the subordination agreement was that the Loan Association would guarantee payment of eighty percent of any balance of the debt owed the bank.

Simultaneously, with the conclusion of the loan agreement, the Tolars purchased a policy of ordinary fire insurance in the principal amount of $16,000 from appellee National General Insurance Company. The loan transactions and the securing of the insurance policy were handled by the local manager of Bankers Trust Savings & Loan Association of Columbia. At all times, before, during and subsequent to the transactions involved in this cause, both Bankers Trust Savings & Loan Association and National General Insurance Company were wholly owned by Bankers Trust Company— the top executives being the same for all three companies. The local manager, in addition to being manager of the local office of Bankers Trust Savings & Loan Association, was the duly licensed agent for National General.

In April, 1974, the Tolar residence that had been constructed with the loan funds from Bankers Trust, was damaged by a flood from the adjacent Pearl River. The amount of this damage is rather hazy throughout the record made at the trial. Water rose inside the house approximately eighteen inches and remained there about twenty-four hours. Because of the damaged house, the Tolars temporarily moved to another residence in Columbia. From then until August, 1974, the Tolars, or certain members of the family, stayed in the damaged home for varying periods of time. During this period of time the Tolars applied for a disaster loan from the Small Business Administration. It is admitted that this was a fraudulent application. A letter was secured from an alleged expert to the effect that the home was a total loss in the amount of $35,000. The application itemized all items of furniture that were, according to the application, completely destroyed in the flood. It was alleged that the damage amounted to over $95,000. The Small Business Administration denied the Tolars’ application for the loan for financial reasons, not knowing at that time that the application was fraudulent. On August 19, 1974, the residence, together with whatever was in it, was completely destroyed by fire.

On August 14, 1974, the Tolars went to the place of business operated by Cavin, the local manager for Bankers Trust and National General, for the dual purpose of talking about the loan payments which then were in default and the securing of additional insurance on the residence and contents. There was no coverage on the contents under the National General policy. Cavin agreed to wait until October to give the Tolars a chance to catch up on the house payments. He would not agree to increase the fire insurance on the property. There was a discussion, as later we will set out in more detail, regarding the securing of other insurance by the Tolars. On the same day they went to the local office of Elmo Harrison, agent for State Farm Fire & Casualty Company, for the purpose of securing additional or other fire insurance. The conversations among these people resulted in the Tolars completing an application for fire insurance on the residence in the amount of $20,000 and on the contents in the amount of $10,000. Harrison immediately issued a binder under a comprehensive dwelling policy. As a result of their discussion, the policy was to name Bankers Trust Savings & Loan Association as loss-payee mortgagee under the terms of the policy. Harrison called Cavin and verified that his company, Bankers Trust Savings & Loan Association, had a deed of trust on the property.

The trial in the chancery court was held on July 7,1975. On December 15,1975, the trial court rendered an opinion finding that both insurance companies had policies that were in full force and effect at the time of the fire, and ordered payment to.;the insureds and the mortgagee. On February 28,1977, the court withdrew its opinion and rendered another opinion on May Í0, 1977. In this opinion, the chancellor held that the policy of National General had been can-celled and was not in force as to either the insureds or the mortgagee at the time of the fire. He held that the policy of State Farm was in force as to the mortgagee but that the insureds were not entitled to recover. His decree of September 12, 1977, was that the complainant was entitled to a judgment against State Farm to the extent of the coverage of $20,000. The court adjudicated that as of May 16, 1977, the debt owed the complainant was $23,296.90, with interest running at the rate of $3.75 per day.

The court found in its decree that State Farm was entitled to be subrogated to the rights of Bankers Trust Savings & Loan Association against all its debtors in the transaction. The decree held that Citizens Bank of Columbia was entitled to receive the sum of $2,450.05 under its subordination agreement with the complainant. ..The decree held that Harold G. Tolar and Nell F. Tolar were not entitled to recover anything from any party in the cause, and held that National General Insurance Company was not liable to either its insured or the mortgagee under its policy of insurance.

The Tolars and State Farm Fire & Casualty Company appeal; Bankers Trust Savings & Loan Association cross'-appeals. Questions in the appeal simply stated are: (1) Is State Farm Fire & Casualty Company liable under its policy to the alleged insureds, the Tolars, the mortgagee, either or both? (2) Is National General Insurance Company liable under its policy of insurance to either the insureds and mortgagee, or both?

THE POLICY OF STATE FARM FIRE & CASUALTY COMPANY .•

State Farm contends that its policy was void ab initio because of false and fraudulent representations made at the time the application was taken and the policy binder issued. The policy which was issued subsequent to the fire had the standard provision, towit:

1. Declarations: By acceptance of this policy the named insured agrees that the statements in the declarations are his agreements and representations, that this policy is issued in reliance upon the truth of such representations, and that this policy embodies all agreement existing between himself and this company or any of its agents relating to this insurance.
This entire policy shall be void, if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.

There can be no question but that if the Tolars induced Harrison to accept the application and issue the policy binder by fraudulent representations, the policy may be declared void by the insurer. 43 Am. Jur.2d; Insurance § 734 (1969); Casualty Reciprocal Exchange v. Wooley, 217 So.2d 632 (Miss.1969); Coffey v. Standard Life Insurance Co., 238 Miss. 695, 120 So.2d 143 (1960). The application to the State Farm agent was made on August 14, 1974, after the house had been flooded in April of that year. During the intervening time the To-lar family had not lived in the residence as a family unit. Admittedly an application had been made by Mr. and Mrs. Tolar for a disaster loan with Small Business Administration with the application stating that the building was a total loss because of the flood. No repairs of any kind had been made. All personal property that was in the house at the time of the flood was listed as destroyed. Even though it might be said that the Tolars were only attempting to defraud the disaster area lender, it is elemental that no insurance company having that information would have written a policy of fire insurance on the house. Even Mrs. Tolar admitted knowing that the policy would not have been written had Harrison been advised of the situation regarding the flooded home and the application for a loan alleging the total destruction of the house. We hold, therefore, that because of the fraudulent representations and conceal-ments by Mr. and Mrs. Tolar, State Farm’s policy was void as to them.

A different situation existed as to the mortgagee under the loss payable clause of State Farm’s policy. As we hereinbefore stated, Harrison called Cavin on the same day the insurance policy binder was issued and verified that Bankers Trust Savings & Loan Association had an outstanding deed of trust on the property. Harrison agreed to place the mortgagee’s name in the loss payable clause of the policy, and this was done. The policy was not issued or can-celled until after the fire occurred and after the check for the first annual premium had been received and cashed. The local agent made no inspection of the insured property.

The mortgage clause of the policy, pursuant to Mississippi Code Annotated section 83-13-9 (1972), provided that the coverage for the mortgagee “shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property

At the beginning of the trial in the lower court, appellant, State Farm, recognized its exposure under the mortgage clause and tendered into court the sum of $10,937.61 as a pro-rata share of the mortgagee’s claim at that time. Furthermore, at the time the policy binder was issued, the agent recognized that his policy probably would be substituted for an existing policy of another company. This was brought out by the Harrison-Cavin conversation the day the binder was issued.

Code section 83-13-9 further provides that the mortgage clause include the following:

Whenever this company shall pay the mortgagee (or trustee) any sum for loss or damage under this policy and shall , claim that, as to the mortgagor or owner, no liability therefor existed, this company shall, to the extent of such payment, be thereupon legally subrogated to all the rights of the party to whom such payment shall be made, under all security held as collateral to the mortgage debt, or may, at its option, pay to the mortgagee (or trustee) the whole principal due or to grow due on the mortgage with interest, and shall thereupon receive a full assignment and transfer of the mortgagee and of all such other securities.

We hold that State Farm is liable under the mortgage clause of its policy to the mortgagee, the only question remaining being whether the obligation is for the full amount of the policy or on a pro-rata basis with- another company.

THE POLICY OF NATIONAL GENERAL INSURANCE COMPANY

The lower court erroneously held that National General Insurance Company was not liable to either the insureds or the mortgagee under its policy. As hereinbefore seen, when the original loan was made and the original fire insurance policy issued, the policy did not include coverage for contents of the residence and only covered loss in the amount of $16,000, even though the loan on the property was in the principal sum of $20,500. It is undisputed that on August 14, 1974, Mr. and Mrs. Tolar went to the office of Cavin. The doubtful question is whether or not Cavin, during the conversation, was acting for the mortgagee, the insurance company, or both. He did not say which “hat” he had on at that time. He admitted that in addition to discussing the past due mortgage payments, the Tolars made a definite request that the insurance policy be changed to give them complete coverage. This was refused by Cavin, who then admittedly told the Tolars that they were at liberty to secure this insurance elsewhere. They immediately proceeded to the office of Harrison, State Farm’s local agent.

Cavin testified that after the Harrison-Cavin conversation on March 14, he notified “his company” that the National General policy should be cancelled. Admittedly, no notice was given the Tolars. The policy was not cancelled until September 4, 1974, when it was delivered by transmittal letter from the office of Bankers Trust Savings & Loan Association. The premium had been paid and accepted. No notice was given the mortgagee of cancellation by National General. The required 'mortgage clause under Code section 83-13-9 provides that upon cancellation,

[T]his policy shall continue in force for the benefit only of the mortgagee for ten (10) days after notice to the mortgagee of such cancellation and shall then cease and this company shall have the right on like notice to cancel this agreement.

The fire occurred prior to the expiration of this ten-day period, and, admittedly, without cancellation notice to the mortgagee. It is clear, therefore, that at the time of the fire the mortgage clause provision of National General’s policy was in full force and effect.

The question arises as to whether or not National General’s policy was in force as to the insureds, Mr. and Mrs. Tolar, at the time of the fire. We have heretofore seen that as to State Farm the Tolars clearly were guilty of fraudulent concealments and representations — which voided that policy as to them. The record is silent as to any fraud perpetrated by the Tolars as far as National General is concerned.' Admittedly, they were trying to defraud the Small Business Administration by contending that the flood damage was total, when, in fact, it was minimal. No misrepresentations were made by the Tolars to National General. The National General policy had not been cancelled. Witness B. L. Nolen, vice president and general manager of National General, testified that his company was requested to terminate the policy by Bankers Trust Savings & Loan Association on September 4. On cross-examination, this witness was asked:

Q. So you are telling me then that Bankers Trust had forwarded the escrow money for the policy premium to National General prior to the expiration of the policy to keep the policy in force?
A. That is correct.
Q. All right, so then when the letter of September 4 was written to you, the policy was still in force because you had the premium?
A. That is correct.

In addition to this witness, Cavin testified that after his conversation with Harrison he only “assumed” that the National General policy would be replaced. He further testified that after the conversation he did not even know how much insurance Harrison had written.

National General contends that its policy was cancelled “by operation of law” upon Harrison issuing State Farm’s binder on March 14. To substantiate this contention, National General relies on the case of Woolverine Insurance Co. v. Taylor, 312 So.2d 699 (Miss.1975). That case is not applicable to National General’s contention. There, Taylor, the insured, purchased a house trailer and financed it with the local bank. A policy of insurance was secured by Taylor. After the loan was fully paid, Taylor voluntarily requested that the policy be cancelled and he actually mailed the policy to the company several weeks before the trailer was destroyed by a wind storm. The facts were entirely different from the present case. The Taylor policy was can-celled when it was surrendered by Taylor.

In the present case, the Tolars had no information whatsoever that National General’s policy had been or was being can-celled. They had just had a conversation with the agent regarding the increase in coverage and the agent had agreed thereto. Admittedly, the policy was not cancelled until after the loss and then only by the mortgagee. There was no notice of cancellation after Cavin had agreed for the Tolars to secure other insurance, and he made no further contact with them after receiving notification from Harrison that this had been done.

We hold, therefore, that the National General Insurance Company policy was in full force and effect as to both the insureds and the mortgagee at the time of the fire loss. The question remains as to the respective liability of the two insurance companies. At the outset we are faced with an error of the lower court in adding twenty percent to the amount owed the mortgagee as attorneys’ fees. The only obligation for attorneys’ fees is set out in the note signed by Mr. and Mrs. Tolar. There is no judgment being rendered against the Tolars by this Court under the terms of the note. The principal judgment is against the two insurance companies under the original complaint filed by Bankers Trust Savings & Loan Association.

We hold, therefore, that the principal amount of indebtedness owed Bankers Trust Savings & Loan Association should be established as of the date of the final judgment and mandate of this Court, exclusive of attorneys’ fees. Judgment then will be rendered here against State Farm Fire & Casualty Company and National General Insurance Company, each in a pro-rata amount as the total insurance of each bears to the balance of the debt owed on said date. This decision is required by the statutory mortgage clause in each policy which provides that,

[I]n case of any other insurance upon the within described property, this company shall not be liable under this policy for a greater proportion of any loss or damage sustained than the sum hereby insured bears to the whole amount of insurance on said property issued to or held by any party or parties having insurable interest therein, whether as owner, mortgagee, or otherwise.

It is obvious that the full amount of National General’s policy will not be exhausted after paying its pro-rata share of the mortgagee’s debt. We hold that this policy is primary coverage as to the Tolars, and as the insureds were allowed to recover thereon, that any amount remaining shall be paid to the insureds, Harold G. Tolar and Nell F. Tolar, up to the limit of National General’s policy.

We further hold that State Farm Fire & Casualty Company is entitled to subrogation of all amounts paid by it against any debt, claim or lien held by or owed Bankers Trust Savings & Loan Association pursuant to any security instruments including the original note and deed of trust executed by the Tolars.

We hold that the original complainant, Bankers Trust Savings & Loan Association, is not legally entitled to attorneys’ fees for the reason that the only attorneys’ fees contracted for existed in the original note from the Tolars to Bankers Trust. Judgment is not being given under that instrument but only against the insurance companies under the policies of insurance by Bankers Trust as mortgagee.

We find that under the original subordination agreement between Citizens Bank of Columbia and Bankers Trust, the latter owes the former $2,059.05, plus legal interest, as found by the lower court. Bankers Trust Savings & Loan Association shall be subrogated to the rights of Citizens Bank of Columbia under its note and deed of trust.

It is necessary for computations of the amounts of the judgments consistent with this opinion be computed and there is not sufficient evidence in the record for this Court to make those computations. The cause is reversed and remanded to the lower court for additional hearing if necessary and the entering of final decrees consistent with this opinion.

The lower court costs and the cost of this appeal are taxed in three equal parts against State Farm Fire & Casualty Company, National General Insurance Company, and Harold G. and Nell F. Tolar.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

PATTERSON, C. J., SMITH, P. J., ROBERTSON, P. J., and SUGG, WALKER, LEE and COFER, JJ., concur.

BROOM, J., took no part.


source: Caselaw Access Project

author: COFER, Justice, for the Court:

license: Public Domain

text:
    GUARANTY MORTGAGE COMPANY OF NASHVILLE d/b/a Nashville Guaranty Mortgage Company and First American National Bank v. RYAN SUPPLY COMPANY.
    No. 50617.
    Supreme Court of Mississippi.
    Oct. 4, 1978.
    Rehearing Denied Nov. 15, 1978.
    Butler, Snow, O’Mara, Stevens & Canna-da, Robert C. Cannada, George H. Butler, Charles E. Gibson, Jackson, for appellant.
    Brunini, Grantham, Grower & Hewes, John A. Welsch, Jr., Jackson, for appellee.
    Before ROBERTSON, P. J., and SUGG and COFER, JJ.
   COFER, Justice, for the Court:

This is an appeal from the Chancery Court of the First Judicial District of Hinds County, wherein, under circumstances presently to be related, a final decree was rendered cancelling a foreclosure sale and adjudicating to appellee ground rents.

Ryan Supply Company (Ryan Supply), a Delaware corporation, qualified to do business in Mississippi, owned lands termed “Jacksonian Plaza” in the pleadings and trial and so hereinafter called. It, on October 28,1971, executed a lease on the ground described in the lease instrument, to the Kroger Company (Kroger), an Ohio corporation, doing business in Mississippi. Kroger accepted the lease and executed it as lessee or tenant therein on December 31, 1971. The lease is hereinafter referred to as the Kroger lease.

Paragraph 11 of the Ryan Supply lease to Kroger provides:

11. Tenant may assign or sublet all or any part of the demised premises at any time during the primary or renewal term, so long as it remains primarily responsible for paying rent as herein stipulated. (Emphasis supplied).

(The lease has a long primary term with liberal renewal privileges).

At the leasing, it was Kroger’s purpose to develop the land as a family shopping center with its own store and other businesses where general family needs might be purchased. It abandoned this family center purpose, however, and assigned the ground lease under the authority quoted above to Charles A. Watkins, doing business as Watkins Investments, the assignment being dated August 10, 1972. In this assignment it was agreed that “the assignor, however, remains primarily responsible as stipulated in paragraph 11 of said lease.” A rental consideration agreement, not necessary to this decision, was arrived at between Kroger and Watkins.

On October 11,1972, Watkins, doing business as Watkins Investments, assigned the Kroger lease to Watkins Tenn.-Miss., Incorporated. Watkins had theretofore entered into a store lease with Kroger, and the assignment by Watkins to Watkins Tenn.Miss., Inc., was made subject to the said store lease.

Paragraph 15 of the Ryan Supply-Kroger lease, in presently pertinent part, reads:

15. . . .
Tenant shall have the right to mortgage this lease, and to assign, pledge or hypothecate it as security for any such mortgage to any institutional investor authorized to make leasehold mortgage loans in this state.
Landlord agrees, upon request of Tenant, and within 15 days thereafter, to execute and deliver a mortgage so as to subject the reversionary interest of landlord in the demised premises to the lien of the mortgage procured by Tenant. The mortgage to be executed by the Landlord pursuant to this provision shall expressly provide that nothing contained therein shall create or impose any personal obligation, liability or responsibility on the part of the Landlord for the payment of any sums due thereunder or for the performance of any obligation or covenant on the part of anyone else to be performed thereunder.
It is understood and agreed by the parties hereto that nothing contained in this lease shall require or impose the obligation on Landlord to execute or sign any note or notes, the payment of which is or are secured by a mortgage to be executed by Landlord pursuant to this provision.

Watkins Tenn.-Miss., Inc., as assignee of the lease and with the authority provided in the part of the lease’s paragraph 15 quoted next above, negotiated a loan for $1,150,000 from Guaranty Mortgage Company, (Guaranty), a Tennessee corporation doing business as Nashville Guaranty Mortgage Company, due on or before six months from its date, October 17, 1972, with interest at 8 percent per annum. This loan was secured by a deed of trust of that date, wherein Ryan Supply joined, which deed of trust included Ryan Supply’s fee simple title to the ground in the Kroger lease and the assigned leasehold interest therein of Watkins Tenn.-Miss., Inc. Ryan Supply had as reflected above, bound itself to join in such mortgage to the extent only of giving its reversionary interest as security for the loan without making itself personally liable therefor. Called upon to make good its promise contained in said paragraph 15, Ryan Supply caused insertion therein of the following:

SPECIAL PROVISION: Without waiving any right and reserving unto itself every right secured to it by virtue of Paragraph (11) Eleven of that certain lease by and between the undersigned Ryan Supply Company and the Kroger Co., dated October 28, 1971, a memorandum of which is of record in Deed Book 1986, Page 394, the undersigned Ryan Supply Company does hereby subordinate its interest to this deed of trust and note to secure the indebtedness secured hereby, which subordination shall exist for the life of the indebtedness secured by said deed of trust; the said Ryan Supply Company hereby executes said deed of trust “to unconditionally mortgage the fee simple title as an inducement to Guaranty Mortgage Company of Nashville, a Tennessee corporation, d/b/a Nashville Guaranty Mortgage Company or other lending institution to make its loan, and the deed of trust that it is granting will continue for the life of this loan regardless of whether the leasehold may be terminated, and any conditions of the leasehold contrary to the Guaranty Mortgage Company of Nashville, a Tennessee corporation, d/b/a Nashville Guaranty Mortgage Company deed of trust are made subordinate thereto”; provided, however, that nothing contained herein shall create or impose any personal obligation liability or responsibility on the part of the Lessor, Ryan Supply Company, for the payment of any sums due hereunder or for the performance of any obligation or covenant on the part of anyone else to be performed hereunder.
******
In the event tenant shall default in the payment of sums due under the terms of this deed of trust or any other covenants contained herein, the Guaranty Mortgage Company of Nashville d/b/a Nashville Guaranty Mortgage Company, for and in consideration of the Ryan Supply Company subordinating its reversionary interest, agrees that they shall within 60 days or prior to the beginning of any foreclosure proceeding shall notify Ryan Supply Company of such default and Ryan Supply Company shall have the first option to cure said default and by so curing the default shall become the owner of the lease and the rentals and benefits accruing thereunder of Watkins Tenn.-Miss., Inc. with the Kroger Company * on the * or other mercantile stores
buildings located on the hereinabove described premises.

In its completed form above, the signature lines there appears the wording, “In testimony whereof witness the signature of the Grantor this 17th day of October. 1972.” followed by signatures as follows: “/s/ Charles A. Watkins. Watkins, Tenn.,-Miss., Inc. by Charles A. Watkins,” and “/s/ Thad J. Rvan. Ryan Supply Company by Thad J. Ryan, President.”

While the secured indebtedness involved herein was due, as shown hereinabove, six months after October 17, 1972, and default arose in the payment, there appears no activity between Watkins Tenn.-Miss., Inc. and Guaranty until June 19, 1974, on which date the debtor executed to Guaranty, or bearer a demand note for $1,150,000, “with interest at 2% over prime, based on New York’s Chase Manhattan Bank’s prime rate, with a floor of ten percent (10%) per an-num. Interest shall be payable monthly in advance from date hereof.” (After the new note someone in Guaranty’s office marked the old one “cancelled.”)

Ryan, testifying, had no knowledge that the new note just noticed had been executed, until about the time the foreclosure notice was given to him, as required in the special provisions in the deed of trust set out hereinabove. Both Watkins, Tenn.Miss., Inc., and Watkins personally became bankrupt and there was default in the indebtedness, thus secured and evidenced, and Guaranty caused foreclosure on the mortgage and became purchaser at the sale. Ryan attended the sale, is not shown to have articulated thereat any objections or questions as to the legality thereof, and, on the witness stand, testified that he did not bid on the property “because of the type construction of the buildings out there, because of the kind of leases that are on that property, Thad Ryan as a businessman could not offer $900,000 plus one. The third factor being the kind of taxes that the city has assessed against that property out there. Those — for those three reasons — primary reasons, it was not a business project as far as we were concerned. In fact, no one else was there that made any other offer. There was one offer made, one offer accepted and that buttoned it up — for the three reasons just outlined.”

(The foreclosure sale was on the 28th day of October, 1975, on which day trustee’s deed to the property was executed to Guaranty. Later in a transaction, Guaranty conveyed the land to its parent company, First American National Bank of Nashville, Tennessee (First American) and the perfected pleadings in this cause show Guaranty and First American as defendants.)

On December 5, 1975, Ryan Supply brought this suit praying cancellation of the deed of trust and the trustee’s deed to Guaranty as clouds on its title insofar as they affect the title and interest of Ryan Supply in Jacksonian Plaza, and that Guaranty be enjoined from interference with the payment of rentals to it under the lease to Kroger. On February 17, 1976, Ryan Supply amended its bill of complaint to include First American as a defendant and to cancel the conveyance of the property to it by Guaranty and to enjoin it as had been prayed against Guaranty.

As basis for its prayer for relief, Ryan Supply alleged that it was not a maker of the note or the indebtedness secured by the deed of trust here involved, but had “in fact, made its reversionary interest in Jacksonian Plaza collateral security for the debt of a third person and such property stands in the position of a surety for the maker thereof;” that it is informed and believes that the original note was not paid, and that, on June 19, 1974, Guaranty “accepted in lieu of the aforesaid note a demand note dated June 19,1974, in the principal amount of $1,150,000 payable on demand with interest at 2% over prime based on New York’s Chase Manhattan Bank’s prime rate with a floor of 10% per annum,” which change in the secured indebtedness was made without the knowledge or consent of Ryan Supply; that, in addition to the extension for the payment of the debt resulting from Guaranty’s failure to collect the debt in a reasonable time after its due date, acceptance of the June 19, 1974, note operated a material change and alteration of the indebtedness secured and of the surety’s contract in these certain respects at least: (1) it was an extension of time for payment; (2) it increased the interest at least 2 percent and more based upon the fluctuating interest rate in the note set out; (3) it provided a possibility of usury depending upon Chase Manhattan Bank’s prime rate; and (4) it substituted a non-negotiable note for one which purported to be a negotiable note, and that the effect of these changes was to discharge the deed of trust as to the interest of Ryan Supply.

It further alleged that in spite of Ryan Supply’s release resulting as above claimed, Guaranty refused to “execute the release and cancellation of the interest of Ryan Supply from said deed of trust and proceeded to attempt to foreclose such deed of trust by instruments which purport to cover the interest of Ryan Supply,” and Ryan Supply is entitled to have both the deed of trust and the trustee’s deed set aside and cancelled insofar as they affect Ryan Supply’s title and interest in Jacksonian Plaza.

It further alleged that its joinder in the deed of trust did not convey or assign to Guaranty any of Ryan Supply’s contractual rights with regard to Kroger as to the ground rents due to Ryan Supply from Kroger, and that the deed of trust to Guaranty carefully reserved to Ryan Supply its rental rights under paragraph 11, quoted early hereinabove, of its ground lease to Kroger, in spite of which Guaranty has demanded that Kroger pay to it all rents accruing under the lease. Asserting that the rents belong to Ryan Supply, even if title to the land has been divested from it, Ryan Supply would be entitled to injunction against Guaranty’s interference with the payment of the rents by Kroger to Ryan Supply.

For some length of time the rents have been paid in escrow or are otherwise held to await the outcome of the suit.

Guaranty and First American denied that Ryan Supply had joined in the deed of trust for some special purpose; admitted that Ryan Supply was not a maker in the note but asserted that Ryan Supply executed the deed of trust for valuable consideration and that it had obligated itself to do so, and denied that Ryan Supply had made its re-versionary interest “a collateral assurance security debt for a third person,” and further denied that the property stands in the position of a surety for the maker thereof, but alleged that Ryan Supply was obligated to include its said land for valuable consideration by virtue of its lease with Kroger, and charged that the execution of the mortgage by it was not to secure the obligation of another but in furtherance of an agreement largely for Ryan Supply’s own benefit.

Defendants Guaranty and First American averred that the $1,150,000 was advanced to be used for construction of improvements in Jacksonian Plaza, and that Ryan Supply knew that the loan was for the purpose of building a Kroger store and other improvements on the shopping center, and they denied that there was a change in the indebtedness and specifically that any change was made without the knowledge and consent of Ryan Supply.

At the conclusion of the testimony, the chancellor called for briefs, saying:

What would you Gentlemen like to do? Submit a short brief? I would like to have some time to study over it, and I wish you Gentlemen in your brief would help the court determine which one of these situations here are waived or if all of them are as to the paragraph 11. That’s the first thing he said without waiving any right. I wish you’d tell me how far it goes and you tell me when it stops.

In his opinion the chancellor noted that “the main issues before the court are the effect, if any, of the action of Guaranty Mortgage Company after the deed of trust signed by Ryan Supply as to releasing the reversionary interest of Ryan Supply from the deed of trust. It will be noted that there were some changes in the note as to the interest rates and so forth after the signature of Ryan Supply on said deed of trust.”

He took note of the submission of the briefs, and of Ryan Supply’s argument therein that Guaranty’s acts after the deed of trust had the effect of fully releasing Ryan Supply’s reversionary rights in Jacksonian Plaza from the deed of trust, observed that “there were some changes in the indebtedness before this Court as to extension of time, interest rates and a new note,” and without making a finding upon the issue of whether the reversionary interest was released, went to the demand of Guaranty for the Kroger rents and found for Ryan Supply as to this issue.

The chancellor’s decree thereon held, however, that:

10. Ryan Supply was a mere surety and the taking of the new note of June 19, 1974, by Guaranty Mortgage from Watkins Tenn.-Miss., Inc. constituted a material change and alteration in the indebtedness secured by the deed of trust which had not been consented to by Ryan Supply and discharged said deed of trust insofar as it affected the reversionary interest of Ryan Supply in Jacksonian Plaza,

and cancelled the deed of trust, trustee’s deed, and deed from Guaranty to First American as clouds upon Ryan Supply’s title insofar as they purport to affect Ryan Supply’s interest in the land, adjudged to Ryan Supply the recurring rents from Kroger under the lease, and enjoined Guaranty and First American from making further claim to the rents from Kroger arising from the lease.

On appeal therefrom, Guaranty and First American have assigned nine errors, which we believe may be condensed into two issues and these must be resolved in favor of appellants operating a reversal as to the efficacy of the foreclosure and as to whom the rents from Kroger, after foreclosure, belong. These issues are (1) whether Ryan Supply’s reversionary interest in the land was released from Guaranty’s deed of trust by the delivery by Watkins Tenn.-Miss., Inc. and Watkins, individually, of the June 1974 note, and its acceptance by Guaranty; and (2) if the foreclosure was legally done, whether Ryan Supply continued thereafter to be entitled to the Kroger rents.

Ryan Supply strongly urges that it was a mere surety, as found by the chancellor, and that the June 1974 note to Guaranty discharged it as such. It is argued, and correctly so, by appellants that Ryan Supply had a pecuniary interest in the transaction, of which this loan was a part and it was not a surety. That the construction of the shopping center bore for Ryan Supply a lively expectation of pecuniary and property gain is articulated in the testimony of Ryan Supply’s president Ryan on direct examination, when he was being interrogated on the subject of Kroger’s abandonment of its plan to develop the leased premises as a family center:

Q. So do I understand this that they sent you back a lease and then told you that they were not going to build a family center?
A. That is correct.
Q. Did they tell you they were not going to build the family center at any point before they sent you back the lease?
A. No, sir, had they told me that, I would never have executed the lease because the lease was executed on two considerations. The basic consideration which was the land rental, ' which was small, and the second consideration which was the building of some eighty, ninety thousand square feet of building facility that under the terms of the lease would revert to the realty in 25 years in the event that the first option was not exercised or any options thereafter. (Emphasis supplied).

This purpose of gain permeated the Kroger lease, wherein in its paragraph 15, as here-inabove set forth, it bound itself on Kroger’s request “to execute and deliver a mortgage so as to subject the reversionary interest of landlord in the demised premises to the lien of the mortgage procured by tenant . . . ” The same anticipation of gain was present when, as Ryan Supply had bound itself to do in the Kroger lease, it carried through and, reserving to itself only the Kroger paragraph 11 rent understanding, subordinated “its interest to this deed of trust and note to secure the interest secured hereby . . . ‘the said Ryan Supply Company hereby executed said deed of trust’ to unconditionally mortgage the fee simple title as an inducement to Guaranty Mortgage Company of Nashville, Tennessee ... to make its loan . .”

(Emphasis added).

While not shown in the early lines of the deed of trust as a grantor, Ryan Supply signed the instruments in lines providing for grantor’s signature or signatures.

Appellants cited Matthews v. Hinton, 234 Cal.App.2d 736, 44 Cal.Rptr. 692 (1965), as a case bearing close similarity to this case now under consideration. In that case appellants owned an area of unimproved land which they leased on a longtime basis to a lessee on a rental arrangement not here pertinent, giving the lessee power to sublet or assign the lease. The owners in the lease instrument agreed to subordinate their title and to join in any deed of trust given to secure construction loans for improving the leased property specially providing against personal liability for such loans. The lessee sublet the property to sublessees who desired to borrow money thereon for development purposes and to have the Matthews owners to subordinate their interest to a deed of trust. The loan was procured, secured by a deed of trust executed by the sublessees and their wives and the Matthews appellants, “all of whom were collectively designated as ‘[tjrustor.’ ” The Matthews owners did not sign the note evidencing the debt. The sublessees defaulted and the mortgagee began foreclosure proceedings which, despite a suit to enjoin sale, were carried forward to sale under the deed of trust. The Matthews parties bought back the property either at the sale or thereafter and filed in the injunction suit a cross-complaint charging that the mortgagee had wrongfully sold the property and sought an amount alleged to be the market price of the land. As allegations upon which they based their prayer for relief, they said that they were sureties only and that mortgagee should have resorted to other assets of the sublessees the principal debtors; that after execution of the deed of trust, the mortgagee lent to sublessees other money used for purposes other than construction of improvements on the land; that the total amount advanced exceeded the limitation in the subordination clause in the lease; and that the due date on the promissory note was extended without the Matthews’ consent, thus relieving them from liability.

On the Matthews’ appeal from a summary judgment against them the appellate court said:

The role in which appellants contracted is depicted on the face of the papers. Appellants were the owners of unimproved land. They leased it to a developer for 65 years for ground rentals aggregating $309,000. As lessors they had a direct financial interest in the construction of improvements which would produce income and ground rent. The lessees or sublessees might have attempted to put up their tenancy for years as security for construction loans. (See Chapman v. Great Western Gypsum Co., 216 Cal. 420, 425, 14 P.2d 758, 85 A.L.R. 917). A fee simple estate would be far more attractive security to a lender. For the promotion of their personal financial interests appellants agreed with their tenants to subordinate their reversionary estate to any future trust deed securing a construction loan. They fulfilled that agreement by means of a trust deed in which they joined with their tenants as “trustor.” In so doing, they contracted directly with the lender, exposing their reversionary interest to direct liability independently of auxiliary collection attempts against the borrowers. There was nothing in the trust deed to tell the lender that its power of sale was limited to the sublessees’ estate for years. The liability of appellants’ reversionary interest was primary, not secondary. In signing the trust deed as “trustor,” appellants as principals entered into a direct contractual relationship with Diamond for their own financial benefit. Having signed the trust deed as principals, they subjected their reversionary interest to primary liability.
(44 Cal.Rptr. at 696).

On the record herein, we are of the opinion that Ryan Supply was not a mere surety but was, to the extent of the special provisions in the deed of trust a,nd its joinder therein, subject to those special provisions, a grantor, and may not claim the rights and defenses available to sureties.

Should, however, it be considered that Ryan Supply’s participation in the deed of trust was only as a surety, it is aptly pointed out by appellants that when the 1974 demand note was executed and accepted, the debt secured by the deed of trust was in default and, therefore, the note evidencing it thereby became a demand note, and the 1974 note is specifically made payable on demand, therefore, granted no extension of time. 74 Am.Jur.2d, Suretyship, § 60 (1974). Appellant cites Industrial Loan and Investment Company v. Miller, 163 Miss. 288, 141 So. 587 (1932), and Graham v. Pepple, 132 Miss. 612, 97 So. 180 (1923), upon the authority of which they argue that to release a surety from liability because of extension of time of payment without his consent, the extension must be for a definite period of time, upon an express agreement, supported by a valuable consideration and the agreement must be an enforceable one against earlier suit by the creditor.

They cite and quote from Brown v. Prophit, 53 Miss. 649 (1876), and Love v. Clark, 171 Miss. 758, 762, 158 So. 484, 485 (1935), and reason therefrom that the changed increased interest likewise did not release Ryan Supply, if it was a surety.

In addition to these arguments, that-the 1974 note and its higher interest rate did not release Ryan Supply even if held to occupy the position of surety, we give some mention to the fact that in the deed of trust, except as to the Kroger rents, Ryan Supply “hereby executes said deed of trust ‘to unconditionally mortgage the fee simple title as an inducement to Guaranty . to make its loan . . . ’ ” Black’s Law Dictionary, p. 1694 (1968), defines the word “unconditional”.as “not limited or affected by any condition . . . ” Regardless of what specifically Ryan Supply had in mind in the execution of the deed of trust unconditionally, it is true that, if the chancellor’s decree is permitted to Stand, then Ryan Supply will have its land enhanced in value by the construction of upward of $1,000,000 of improvements thereon and appellants will be denied recovery of the amount they expended under the deed of trust. In reversing we are on solid ground in law, and are doing equity.

Reaching the issue as to the rents, it is repeated here that Kroger agreed, in its lease with Ryan Supply, to pay rents and to remain liable therefor, even though it might, as it did, exercise the authority in the lease to assign or sublet the land leased, and that, while complying with paragraph 15, of the lease document, by giving as security the land, Ryan Supply waived every right except that secured to it by paragraph 11 of the Kroger lease, (that making Kroger responsible for the rents).

The second phase of Ryan Supply’s bill of complaint and its prayer is the assertion by it that, even should the court find the foreclosure legal and valid, the deed of trust reserved to Ryan Supply the rents under paragraph 11 of the Kroger lease and it is, nevertheless, entitled to an injunction against Guaranty from interfering in any manner with the payments of said rents to Ryan Supply. It .prays relating thereto that Guaranty (and on amendment to make First American a defendant) that First American be enjoined and prohibited from interfering in any manner with the payment of rents under the Kroger lease to it, Ryan Supply.

Ryan Supply concedes that rents pass with the land unless reserved, but says that Ryan Supply expressly reserved the Kroger rents and is entitled to the relief sought with reference thereto. Appellants counter with the argument that the reservation of rents as provided in paragraph 11 of the Kroger lease and excepting them in the deed of trust to Guaranty could only be so long as Ryan Supply owned the lands. They further point to the provision of right to protect the reversionary interest in the land, which would retain to it' the rents thereon, through curing default, notice of which default the mortgagee was required to give and did give, in timely manner.

The general rule, as announced in 49 Am.Jur.2d, Landlord and Tenant § 530 (1970), is that the grantee of lands is entitled to rents accruing after the transfer. This general rule yields to the right thereto of the grantor where the rents have been reserved. Participation by Ryan Supply in the deed of trust to Guaranty was subject to the reservation to Ryan Supply contained in paragraph 11 of the Kroger lease. That paragraph authorized Kroger to “assign or sublet ... so long as it remains primarily responsible for paying rent as herein stipulated.” Neither paragraph 11 nor the deed of trust operated to cause the rents to be paid to Ryan Supply regardless of any change in its status as owner or otherwise of the land in the Kroger lease.

It is our conclusion that the record clearly warrants the decision that Ryan Supply was entitled to all rents accrued up to the foreclosure date, and the purchaser at the sale became entitled to all rents which accrued since that date.

The decision of the lower court is reversed and judgment will be rendered here for appellants on both the issues of validity of the foreclosure sale and of party or parties entitled to the Kroger lease rents.

At some point not clear in the record the parties began impounding the rents to await decision as to their disposition. We remand the case with directions that of the impounded rents, those which accrued before the foreclosure sale (October 28, 1975), be paid to Ryan Supply and those becoming due after the sale be disbursed to First American.

REVERSED AND JUDGMENT HERE FOR APPELLANTS; REMANDED FOR DISPOSITION OF RENTS HELD IN ESCROW.

PATTERSON, C. J., SMITH and ROBERTSON, P. JJ., and SUGG, WALKER, BROOM and LEE, JJ., concur.

BOWLING, J., takes no part.


author: PATTERSON, Chief Justice,

text:
    SYSTEM FUELS, INC., et al., Defendants-Appellants, v. Ado BARNES, Plaintiff-Appellee.
    No. 50599.
    Supreme Court of Mississippi.
    Oct. 18, 1978.
    Rehearing Denied Nov. 15, 1978.
    Green, Cheney, Hughes & McKibben, Dale H. McKibben, Jackson, Donald G. Kruger, Prentiss, for defendants-appellants.
    William E. Hathorn, Prentiss, for plaintiff-appellee.
    Before PATTERSON, C. J., and BROOM and LEE, JJ.
   PATTERSON, Chief Justice,

for the Court:

System Fuels, Inc., Triad Oil & Gas Company, and Clarkco Contractors, Inc. appeal from a judgment of $10,000 against them for damaging the property of Ado Barnes. The trial was conducted in the Circuit Court of Jefferson Davis County.

In the early part of 1977 the appellants constructed two small (gathering) pipelines across a 60-acre tract of land, the surface of which was owned by Ado Barnes. It was stipulated that System Fuels, Inc. held valid leases to the minerals beneath the tract which provided:

6. Lessee shall pay for damages caused by lessee’s operations to houses, barns, growing crops and fences. .

In addition, the deed conveying the property to Ado Barnes retained the mineral interest together with specific rights of exploration and development. It stated in part:

IN CONSIDERATION of the sum of Seven Hundred & No/100 Dollars, the receipt whereof is hereby acknowledged, the undersigned, J. J. NEWMAN LUMBER COMPANY, a corporation organized and existing under the laws of the State of Mississippi and domiciled at Hatties-burg, in said State, does hereby sell, convey and warrant specially unto Ado Barnes, of RFD 2, Box 10, Silver Creek, Mississippi, the hereinafter described property, excepting and reserving FOREVER unto itself, it’s successors and assigns, all of the oil, gas and all of the other minerals of every kind and character in, on or under said land, or that may be produced therefrom, together with the right of ingress, egress and regress at any and all times for the purpose of investigating, exploring, prospecting, drilling and mining for and producing oil, gas and all other minerals, laying pipe lines, building roads, tanks, power stations, telephone lines and other structures thereon to produce, save, take care of, treat, transport, own and remove said products, and housing it’s or their employees; said property being situated in Jefferson Davis County, Mississippi, described as follows, to-wit: (Emphasis added).

Witnesses for the parties testified to various distances in width necessary to a normal right-of-way required for a 4-inch pipeline as placed on Barnes’ property. The distances given varied between 32 and 50 feet and it was admitted by an engineer introduced by the defendants that the right-of-way varied from 30 to 185 feet in width. The witnesses of Barnes also testified the right-of-way was not cleared in the customary manner, was poorly done and the space needed for the right-of-way was grossly exceeded.

An expert in forestry testified for Barnes. He estimated the timber damaged and destroyed by the defendants had a reasonable value of $755.50. The defendants’ expert testified the timber damage was $176.20. Bill Harvey, a pipeline contractor, estimated eight to ten acres were affected by the pipeline construction and the total cost to restore the property to its former state would be $13,500.

William T. Banks, a civil engineer, surveyed and platted the right-of-way. He testified two tracts were involved (the 60 acres was composed of two tracts connected into an L-shape), one in Section 7, the other in Section 8. The right-of-way in Section 7 comprised 1.06 acres and that in Section 8, 2.67 acres. The acreage in Section 7 was timbered and that in Section 8 was timbered except for 0.29 acre which was an open field.

Marshall Forrester, President of defendant Triad and Vice-President of defendant Clarkco, testified Triad supervised the drilling, completion and operation of System’s wells in the area. The pipelines on Barnes’ property were constructed under his supervision and in his opinion were laid in agreement with prudence and common practice in the industry. According to him, the terrain was hilly and moderately timbered. On cross-examination he candidly admitted that Barnes was entitled to damages. The dispute concerns the amount.

The court granted a peremptory instruction for the plaintiff and instructed the jury somewhat as to the measure of damages. It returned a verdict of $10,000 for Barnes.

The appellants assign as error the granting of the peremptory instruction, several mistakes concerning the instructions on damages and contend the award was excessive.

The rule in determining whether the trial court properly granted a peremptory instruction is that all evidence favorable to the party against whom the instruction is granted is accepted as true together with all inferences that may be reasonably drawn therefrom and evidence conflicting with that favorable to the party opposing the instruction is not considered. First National Bank of Vicksburg v. Cutrer, 214 So.2d 465,(Miss.1968). In applying this rule we find no evidence in the record from which it can be said that the defendants’ use of their right to construct a pipeline upon plaintiffs land was reasonable except the entry for that purpose. Indeed, it portrays without contradiction their use of the vested right to construct the pipeline upon the land was unreasonable and excessive. This was recognized by Forrester, President of Triad and Vice-President of Clareo, the operator of System’s oil and gas-producing property in Mississippi. He supervised the laying of these lines and acknowledged that Barnes was entitled to damages. We conclude there was no error in granting the peremptory instruction.

We are of the opinion the instructions to the jury concerning the measure of damages were not as specific as they should have been. Broadhead v. Gatlin, 248 Miss. 386, 137 So.2d 909 (1962). However, we do not delve further into this assignment because it merges with the next which necessitates reversal so that a proper award of damages might be made.

The measure of damages proved by the plaintiff and which the jury by its verdict necessarily accepted, was the cost of restoration of the damaged area. However, this measure, although resulting in an unusually large verdict, would not include damages for the timber cut nor the saplings destroyed and the deprivation of timber growth due to the right-of-way easement to maintain the lines during the productivity of the wells. We think the statement in Chevron Oil Company v. Snellgrove, 253 Miss. 356, 364, 175 So.2d 471, 474 (1965), “It is sometimes a perplexing question as to the method to be used in proving damages to real property” not to be an understatement.

The present pipelines traverse land which is open, that covered with saplings and that with merchantable timber. In this circumstance the announcement in Sun Oil Company v. Nunnery, 251 Miss. 631, 170 So.2d 24 (1964), upon which the appellee relies, does not have application because it is directed to damages to realty temporary in nature. Although it is apparent that part of the open land damaged by the appellants is temporary and subject to being restored, as probably are the timbered lands necessary to the construction of the pipeline but not necessary for the right-of-way for maintenance, there remain damages for destroyed saplings and merchantable timber. We think the appellee’s reliance upon Sun Oil, supra, was misplaced since the measure of damages stated there does not reach the factual situation now presented.

The better rule, consistent with Sun Oil, supra, is that of Chevron Oil Company v. Snellgrove, 253 Miss. 356, 175 So.2d 471 (1965), in which we held in an unintentional trespass case that damages to the timbered lands injured in geophysical activity should have been measured by the before and after rule although we noted other exceptions to the rule. We stated:

As a general rule, the measure of damages in actions for permanent injury to land where there is no willful trespass is the difference in value in the before-and-after damage to the premises. . It is also true that where the land, or buildings located on the property, has been damaged but the property may be restored to its former condition at a cost less than the value determined by the diminution of the value of the land, the cost of restoration of the property, plus compensation for the loss of its use, may be the measure of damages. Mississippi Power Co. v. Harrison, 247 Miss. 400, 152 So.2d 892 (1963); Copiah Dairies, Inc. v. Addkison, 247 Miss. 327, 153 So.2d 689 (1963); Broadhead v. Gatlin, 243 Miss. 386, 137 So.2d 909 (1962); Long v. Magnolia Hotel Co., 236 Miss. 655, 111 So.2d 645, sugg. of error 114 So.2d 667 (1959); Sears, Roebuck & Co. v. Creekmore, 199 Miss. 48, 23 So.2d 250 (1945); Yorkshire Ins. Co. v. Brewer, 175 Miss. 538, 166 So. 361 (1936); Bowyer & Johnson Const. Co. v. White, 5 Cir., 255 F.2d 482 (1958). This rule, however, is usually confined to the introduction of evidence to show a reduction, and not an increase, of damages above the diminution in value of the land resulting from the injury. The damage for cutting and removing, or destroying, marketable trees, where the trespass is not willful, is generally held to be the value of the timber at the time and place where the trees were cut. Consumers Veneer Co. v. Chestnut, 210 Miss. 430, 49 So.2d 734 (1951); Anderson-Tully Co. v. Campbell, 193 Miss. 790, 10 So.2d 445 (1942); Teasley v. Roberson, 149 Miss. 188,115 So. 211 (1928); Fleming v. Dunigan Cooperage Co., 144 Miss. 769, 109 So. 851 (1926); Barclay v. Smith, 36 So. 449 (Miss.1904); Bond v. Griffin, 74 Miss. 599, 22 So. 187 (1897).
On the other hand, where the trees are not marketable as timber, or pulpwood, and have no value separate from the land, the measure of damages is the injury to the land that is caused by their destruction. Young timber, saplings or bushes, smaller than merchantable pulpwood, may have little value separate from the land. The land stripped of growing timber may have little value, but the standing timber and the land together may have considerable market value. The proper measure of damages for the destruction of small natural growth of timber would be the difference in value of the land before and after the injury. 87 C.J.S. Trespass § 121b(4), at 1080 (1954). Damages for destruction of “seedlings” on tree farms may be determined, however, by showing the cost of restoration, plus such injury as may be shown to have been done to the land. • See also Stigall v. Sharkey County, 213 Miss. 798, 57 So.2d 146, 58 So.2d 5 (1952). (253 Miss, at 364-365, 175 So.2d at 474-475)

As mentioned, we are considering damages to several categories of real property, more particularly merchantable trees, small natural growth, the ruts of heavy equipment and use in excess of reasonable need. After considering the evidence, and study concerning the proper measure of damages, we have reached the conclusion the measure more likely to be correct, though not exact, is the before and after rule because all damages may be considered within it which would not be true under the restoration rule. The plaintiff is not entitled to both methods. Chevron, supra. The cause is reversed and remanded for a new trial upon damages only. It is affirmed upon liability.

AFFIRMED AS TO LIABILITY; REVERSED FOR ASCERTAINMENT OF DAMAGES ONLY.

SMITH and ROBERTSON, P. JJ., and WALKER, BROOM, LEE, BOWLING and COFER, JJ., concur.

SUGG, J., took no part.


author: SHORES, Justice.

text:
    Felston HOSEY, Sr. v. SEIBELS BRUCE GROUP, SOUTH CAROLINA INS. CO., et al.
    No. 77-192.
    Supreme Court of Alabama.
    Sept. 29, 1978.
    Rehearing Denied Oct. 27, 1978.
    Samuel L. Adams of Adams & Bates, Dothan, for appellant.
    Alan C. Livingston of Lee & Mclnish, Dothan, for appellees.
   SHORES, Justice.

This is an action to recover on an insurance policy covering property located at 903 South St. Andrews Street, Dothan, Alabama. Felston Hosey, Sr. obtained the policy from the Seibels Bruce Group, particularly the South Carolina Insurance Company. By its terms, the policy was to remain in effect for ten months beginning October 4, 1974. It provided fire insurance in the amount of $24,000 for the dwelling, $2,400 in coverage for appurtenant structures, $12,000 in coverage for unscheduled personal property and $4,800 in coverage for additional living expenses.

The policy contained two provisions and a definition which are the focus of this controversy. These provisions state that:

1) “This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.”
2) “. . . Unless otherwise provided in writing added hereto this Company shall not be liable for loss occurring “(a) while the hazard is increased by any means within the control or knowledge of the insured . . . ”

Both of these provisions address statements by or conduct of the “Insured.” This term is defined as follows:

“8. DEFINITIONS . . .
“a. ‘Insured’ means
“(1) the Named Insured stated in the Declarations of this policy;
“(2) if residents of the Named Insured’s household, his spouse, the relatives of either, and any other person under the age of twenty-one in the care of any insured . . . ”

On the night of May 26, 1975, a substantial portion of the insured property was damaged by fire. Shortly thereafter, Mr. Hosey and his wife, Myrtle, prepared an itemized list of property which they claimed to have been either lost or damaged. This list contained several groups of property, including: (1) the dwelling, owned in fee simple by Mr. Hosey subject to mortgages held by the Jackson Company and James H. and Ann Byrd; (2) personal property owned by Mr. Hosey individually; (3) personal property owned by Mrs. Hosey individually; and (4) personal property owned by Mr. and Mrs. Hosey jointly. On October 8,1975, the Hoseys executed a “Sworn Statement in Proof of Loss” which stated:

“The said loss did not originate by any act, design or procurement on the part of your insured, or this affiant; nothing has been done by or with the privity or consent of your insured or this affiant, to violate the conditions of the policy, or render it void . . . ”

While settlement negotiations were continuing, South Carolina Insurance Company learned of a criminal arson investigation focusing on Mrs. Hosey and Quinton Johnson. Negotiations were terminated and the insurance company refused to pay the claims of either Felston or Myrtle Hosey. Subsequently, Mrs. Hosey and Johnson were convicted of the arson of the insured property. Mr. Hosey was neither charged nor implicated in the criminal proceedings concerning the arson.

Mr. Hosey brought this action alleging a breach of the insurance contract by both the Seibels Bruce Group and the South Carolina Insurance Company. The Seibels Bruce Group was released as a party defendant by the Pretrial Order of November 3, 1976, and the matter proceeded to trial by jury in the Circuit Court of Houston County.

At the close of the evidence, the trial judge charged the jury, in part, as follows:

“. . . Now, the first provision means that not only is the plaintiff, Mr. Hosey here, a — the plaintiff in this case, is one who is insured by the contract, but there are certain other parties who are also classified as insured persons under this contract. That includes his wife and members of the household. And the second provision I read means that if the plaintiff’s loss was a result of anything which he or his wife did or knew about or had control over which increased the hazard, which is a — the risk that the company had, was insuring against, causing the loss, then plaintiff would not be able to recover in this case.
“. . . So, what again you are really concerned with is whether or not there was any conduct on the part of the wife which would cause this policy to be avoided in payment by the insurance company because of what she [Mrs. Hosey] done— did. ...”

Out of the jury’s presence, but before it retired to consider its verdict, Mr. Hosey made the following objection to the court’s oral charge:

“We would respectfully object to the Court — that portion of the Court’s charge that stated that anything that the wife or other family member — members might have done to increase the hazard would have, would have avoided the policy and also that portion which specifically stated that conduct on the part of the wife could avoid the policy.”

The trial judge acknowledged Mr. Hosey’s objection and the record is clear that he understood the substance of this objection. He did not alter his previous charge to the jury.

The jury returned a verdict in favor of the insurance company. Mr. Hosey made a timely motion for new trial, which was denied, and filed a notice of appeal. He challenges only the propriety of the court’s oral charge to the jury. Appellees argue that the charge was correct; and even if it were not, say that the objection was too general to preserve error.

Rule 51, ARCP, provides in pertinent part, that:

“. . .No party may assign as error the giving or failing to give a written instruction, or the giving of an erroneous, misleading, incomplete, or otherwise improper oral charge unless he objects thereto before the jury retires to consider its verdict, stating the matter to which he objects and the grounds of his objection. . ” (Emphasis Added)

In the recent case of Feazell v. Campbell, 358 So.2d 1017 (Ala.1978), we emphasized the importance of stating the grounds upon which objection to the court’s oral charge is founded. In Feazell, the defendant objected to the oral charge but stated no grounds for the objection. On appeal, the charge was challenged as misleading. This court held that, because the defendant did not challenge the charge as misleading, she could not raise the point on appeal. Where an oral charge is misleading or confusing, strict adherence to the Rule 51 grounds-stating requirement is necessary in order to achieve the essential purpose of Rule 51, which is “. . .to give the trial court an opportunity to correct the instructions and to avoid the waste of time and money from reversals that result from oversight, technical omissions, or remedial [remediable] mistakes. . . .” Feazell v. Campbell, supra, at 1020; Gardner v. Dorsey, 331 So.2d 634, 636 (Ala.1976).

We continue to adhere to this principle but should not permit an overly rigid enforcement of the rule to inhibit the fundamental policy of the Rules of Civil Procedure to disregard technicality and form in order that the civil rights of litigants may be asserted and tried on the merits.

The plaintiff’s objection to the court’s charge sufficiently stated his disagreement with it. His contention was that to charge the jury that Mr. Hosey could not recover if the jury found that his wife caused the fire was a misstatement of the law. His objection made this point and properly preserved it for review here. We now turn to that issue.

Principles of public policy forbid recovery to an insured who fraudulently and intentionally sets fire to the property covered by an insurance contract. Owl & Turtle, Inc. v. Travelers Indem. Co., 554 F.2d 196 (5th Cir. 1977). However, the defense of arson or wilful burning will generally not operate to defeat an insured’s recovery under a fire insurance policy where, as here, there has been no finding that the insured directly set the fire, had knowledge and authorized its setting or later ratified the wrongful act. Orient Ins. Co. v. Parkhill, 170 F.2d 510 (5th Cir. 1948); Feibelman v. Manchester Fire Assur. Co., 108 Ala. 180, 19 So. 540 (1895).

Where the property of an insured is tortiously destroyed by his or her spouse, the wrongful conduct is not attributed to the insured solely by virtue of the marital relationship. Shearer v. Dunn County Farmers Mutual Ins. Co., 39 Wis.2d 240, 159 N.W.2d 89 (1968).

The insurance company contends that the law does not permit an innocent owner to recover on a policy of insurance where his co-owner/co-insured has wilfully set the jointly owned and insured property on fire. While some courts have so held, this rule has long been criticized as harsh and poorly reasoned. 5 Appleman, § 3594 (Rev. ed. 1969). Alabama has not previously directly addressed this issue. See Home Ins. Co. v. Pugh, 51 Ala.App. 373, 286 So.2d 49 (1973).

It has been accurately noted that:

“The ordinary person owning an undivided interest in property, not versed in the nice distinctions of insurance law, would naturally suppose that his individual interest in the property was covered by a policy which named him without qualification as one of the persons insured. . . ” Hoyt v. New Hampshire Fire Ins. Co., 92 N.H. 242, 29 A.2d 121, 123 (1942).

This assumption by an ordinary person is even more reasonable where, as here, he is the only named insured; Mrs. Hosey was an insured by definition. We think the view expressed in Howell v. Ohio Cas. Ins. Co., 130 N.J.Super. 350, 327 A.2d 240, 243 (1974), is reasonable:

“. . . With respect to a fire insurance policy covering the interests of more than one insured . . . the obligation of the carrier should be considered several as to each person insured, and the fraud or misconduct of one insured should not bar recovery by the innocent co-insureds to the extent of their respective interests in the property involved.”

Other states have also adopted this rule. Mechanics’ Ins. Co. v. Inter-Southern Life Ins. Co., 184 Ark. 625, 43 S.W.2d 81 (1931)— (landlord allowed to recover despite arson by co-insured tenant); Home Ins. Co. v. Cohen, 357 S.W.2d 674 (Ky.1962) — (partner allowed to recover despite arson by his co-insured partner); Simon v. Security Ins. Co., 390 Mich. 72, 210 N.W.2d 322 (1973)— (wife allowed to recover value of stolen property taken by her co-insured divorced husband); Pleasant v. Motors Ins. Co., 280 N.C. 100, 185 S.E.2d 164 (1971) — (father allowed to recover despite arson of his co-insured son); Hoyt v. New Hampshire Fire Ins. Co., supra — (an innocent tenant-in-common allowed to recover despite arson by his co-insured cotenant); Rent-A-Car Co. v. Globe & Rutgers Fire Ins. Co., 158 Md. 169, 148 A. 252 (1930) — (mortgagee allowed recovery despite arson of co-insured mortgagor); Phoenix Assur. Co. of N. Y. v. General Motors Acceptance Corp., 369 S.W.2d 528 (Tex.Civ.App.1963) — filing of a false proof of loss statement did not bar innocent co-insured’s recovery).

The insured interests of Mr. and Mrs. Hosey are severable; and neither the arson nor the fraud of Mrs. Hosey in filing a false proof of loss statement precludes recovery by Mr. Hosey to the extent of his interest in the insured property.

REVERSED AND REMANDED.

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


author: PER CURIAM.

text:
    The MOBILE COUNTY REPUBLICAN EXECUTIVE COMMITTEE et al. v. John E. MANDEVILLE, as Clerk, etc., et al.
    77-789.
    Supreme Court of Alabama.
    Oct. 23, 1978.

      William W. Stoudenmire, Charles S. White-Spunner, Jr., Michael A. Wermuth, Mobile, J. B. Sessions, III, Russellville, for appellants.
    Maury Friedlander of Marr & Friedlan-der, Mobile, for appellees, John E. Mande-ville, as Clerk of the Circuit Court, Mobile County, Ala. and John L. Moore, as Judge of Probate, Mobile County, Ala.
   PER CURIAM.

This appeal was taken from a September 13, 1978, order of the circuit court in a declaratory judgment action brought by the Mobile County Republican Executive Committee and its chairman against the appointing board established by § 17-6-1, Code of Alabama 1975. The appointing board consists of the Sheriff, Probate Judge and the Clerk of the Circuit Court of Mobile County, Alabama. As provided in § 17-6-3, Code of Alabama 1975, the defendant, Tom Purvis, Sheriff of Mobile County, was unable to serve as an appointing board member because he was a candidate for renomination to that office in the September 5, 1978, Democratic Primary Election. Jeff C. Mims was named to serve on the appointing board in Sheriff Purvis’s absence as provided in § 17-6-4, Code of Alabama 1975, and was made a party defendant in this action.

The Republican Executive Committee contends that it submitted a list of suggested election officers for the primary election as allowed by § 17-16-17, Code of Alabama 1975; and that the appointing board failed, neglected or refused to consider this list in the appointment of election officers. It contends that Alabama law requires the appointing board to name election officers for primary elections from lists provided by the respective political party executive committees and in equal proportion to the number of political parties participating in the primary election.

§ 17-16-17 controls this issue as it relates to the appointment of election officers in primary elections. This statute provides:

“Each candidate for nomination may, at least 25 days before the primary, present to the county executive committee of his party a list of election officers desired by him for any one or more of the districts, wards or precincts, and his county committee shall, so far as practicable, make up, from the list so presented to it, a list of names of election officers, six in number, for each district, ward or precinct, which it will nominate to the appointing board of the county for appointment as officers to conduct the primary election. The county committee shall present the list so made up by it to the appointing board of the county which appoints the election officers to conduct elections for state and county officers in November, or at any other lawful time, which appointing board, from the list so presented to it by the county committee, shall, if there be on said list the names of sufficient persons who are legally eligible, select and appoint the officers to conduct the primary election, observing the above rule as to representation wherever more than one party enters the primary; and, in the latter case, if a county committee has not given a sufficient number of names for a box, then the appointing board shall supply the deficiency from electors of that party. In the event the persons selected as officers fail to appear at the polling place on the day of the primary election at least one hour before the polls are scheduled to open, then their places shall be filled by such of those who have been named by such appointing board as do appear; and, in the event none so named appear by then, the voters present and qualified to participate in such primary election may, from among themselves, select officers to conduct such election in such district or precinct, and such substituted persons shall have the authority to conduct such elections and to be paid for their service in the same manner as if they had been originally appointed. All officers serving in such primary elections shall take the same oath required to be taken by officers of regular state elections and shall be subject to the same restrictions, limitations, penalties and conditions.”

The trial court held that § 17-16-17 was directory only and did not require the appointing board to appoint election officers in equal proportions from the lists submitted by the county executive committees. The trial court held, in part, that:

. . the appointing board, and their successors in office, shall give due consideration to each such list so presented to it, and in choosing the election officials at any primary or general election, exercise its discretion as to the selection of such election officers . . . .”

We affirm, but disagree with the trial court that § 17-16-17 controls the appointment of election officers who serve in general elections.

§ 17-16-17 admonishes the appointing board to appoint the election officers while “. . . observing the above rule as to representation wherever more than one [political] party enters the primary . . . .” The statute, however, is devoid of any rule to which this language can refer, as the trial court observed.

The Republican Executive Committee concedes, in brief, that this statute is ambiguous and subject to a number of interpretations; but asserts that if properly construed, the statute would mandate that appointments of election officers in primary elections be equally divided between candidates submitted by each political party participating in that primary.

Of course, when the plain meaning of a statute can be gleaned from its words, it should be so construed. State v. Commercial Loan Co., 251 Ala. 672, 38 So.2d 571 (1949); Van Houtan v. Black, 191 Ala. 168, 67 So. 1008 (1915). But where, because of ambiguous language or otherwise, the meaning is not clear on the face of the statute, we must determine its meaning. To accomplish this, courts frequently and properly look to the legislative purpose in enacting the legislation. State v. Union Tank Car Co., 281 Ala. 246, 201 So.2d 402 (1967).

One of the stated legislative purposes of § 17-16-17 is “. . .to allow candidates to nominate election officers . . . .” See Preamble, Act No. 1196, 1975 Acts of Alabama, approved October 10, 1975, Vol. IV, page 2349 (predecessor to § 17-16-17).

The legislature’s method of accomplishing this purpose is by allowing candidates to nominate prospective election officers through their respective county executive committees. The county executive committee serves as a conduit between the nominating candidates and the appointing board. The lists presented by the county executive committees are the means by which the candidates forward their nominations to the appointing board for consideration. Such nominations, when presented to the appointing board, must be considered by the board in making its selections. This, however, is the only mandatory provision of § 17-16-17 regarding the appointment of election officers.

The distinction between a mandatory provision and one which is only directory is that when the provision of a statute is the essence of the thing to be done, it is mandatory. Under these circumstances, where the provision relates to form and manner, or where compliance is a matter of convenience, it is directory. Rodgers v. Meredith, 274 Ala. 179, 146 So.2d 308 (1962); Board of Education of Jefferson County v. State, 222 Ala. 70, 131 So. 239 (1930). In making this determination, it is legislative intent, rather than supposed words, art such as “shall,” “may” or “must,” which ultimately controls. Morgan v. State, 280 Ala. 414, 194 So.2d 820, appeal dismissed, cert. denied, 389 U.S. 7, 88 S.Ct. 47, 19 L.Ed.2d 6 (1967). See also Belcher Oil Co. v. Dade County, 271 So.2d 118 (Fla.1972); Barton v. Atkinson, 228 Ga. 733, 187 S.E.2d 835 (1972); Sho-me Power Co. v. City of Mountain Grove, 467 S.W.2d 109 (Mo.App.1971).

There is no requirement, stated or which may fairly be implied, from the language of the statute that the appointing board is required to select the election officers to serve in primary elections from the respective executive committees’ lists in any particular ratio or proportion. The appointing board, of course, may not disregard such lists in making appointments; but, so long as it does not abuse its discretion in selecting the election officers from among the candidate’s nominations, it is in compliance with § 17-16-17.

§ 17-6-6, Code of Alabama 1975, controls the manner of appointment of election officers who serve in general elections. It provides:

“Each political party or organization having made nominations may, by the chairman of its state or county executive committee or nominees for office, furnish the appointing board a list of not less than three names of qualified electors from each voting place, and from each of said lists an inspector and clerk shall be appointed for each voting place; provided, that where there are more than two lists filed, the appointments shall be made from the lists presented by the two political parties having received the highest number of votes in the state in the next preceding regular election, if each of said parties present a list.”

On appeal, the Republican Executive Committee argues that § 17-6-6 mandates the appointment of election officers for the forthcoming general election composed fifty percent of Democrats and fifty percent of Republicans, since these two political parties received the highest number of votes in the next preceding regular election. We cannot agree.

This statute, like § 17-16-17, is not without ambiguity in its operative effect, although it has been held constitutional on its face. Hadnott v. Amos, 295 F.Supp. 1003 (M.D.Ala.1968), reversed on other grounds, 394 U.S. 358, 89 S.Ct. 1101, 22 L.Ed.2d 336 (1969). Section 17-6-6 allows any “. . . political party or organization having made nominations . . . .” to submit a list of suggested election officers but provides that appointment be made from “. . . lists presented by the two political parties having received the highest number of votes . . . .” If appointments were to be made on an equal proportionate basis between the two political parties receiving the most votes, as the Republican Executive Committee argues, why would the legislature permit the exclusion from consideration of persons submitted by all other political parties? We do not believe that the legislature intended to require the appointment of election officers in equal proportion nor did it establish any mathematical formula for such appointments. § 17-6-6, as we read it, simply requires the appointing board to make its selection of election officers from lists provided by the two major political parties.

We agree with the appellants that the statute does not require that consideration be given to the number of votes cast on behalf of a particular party. The purpose of this legislation, in our view, is to insure that elections be honestly conducted and does not compel the distribution of election officers among political parties in proportion to their voting strength. See State v. Board of Election Com’rs of Milwaukee, 240 Wis. 204, 3 N.W.2d 123 (1942).

We also agree with the Republican Executive Committee that Act No. 812, 1965 Acts of Alabama, Vol. II, page 1515, applicable only to Mobile County, in no way changes the method of appointing election officers as otherwise provided by law.

The result reached by the trial court is consistent with our interpretation of the applicable law. Its judgment is, therefore, affirmed.

AFFIRMED.

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


author: TORBERT, Chief Justice.

text:
    Garland L, KELLEY v. U. S. A. OIL CORPORATION et al.
    77-447.
    Supreme Court of Alabama.
    Oct. 27, 1978.

      S. P. Keith, Jr., Birmingham, for appellant.
    Stanley A. Cash, Huie, Fernambucq, Stewart & Smith, Birmingham, for appel-lee, U. S. A. Oil Corp.
    M. Clay Alspaugh of Hogan, Smith & Alspaugh, Birmingham, for appellee, Ray Dupree.
   TORBERT, Chief Justice.

Garland Kelley appeals the trial court’s grant of partial summary judgment as to claims for injuries he sustained from a gunshot wound while working for defendants. Since the summary judgment was not a final judgment, the appeal must be dismissed.

Appellant Kelley was employed by defendants, U. S. A. Oil Corporation and Ray Dupree, to work at a service station. While at work on October 29, 1975, Kelley was shot during a robbery of the station. On March 26, 1976, Kelley filed suit for personal injuries in the Jefferson County Circuit Court alleging negligence against U. S. A. Oil Corporation in failing to provide a reasonably safe place to work.

Kelley subsequently amended his complaint joining Ray Dupree as a defendant and adding counts under both the Employers Liability Act and the Workmen’s Compensation Act. Both defendants filed motions for summary judgment which were granted as to all claims except the workmen’s compensation claim against U. S. A. Oil Corporation. This claim was set for trial on April 10, 1978. On the morning of April 10 before trial, Kelley notified the trial court that he intended to appeal the grant of summary judgment. He was granted a continuance of the workmen’s compensation claim pending appeal.

To support an appeal, the order appealed from must be a final judgment. Ala.Code § 12-22-2 (1975); Powell v. Republic National Life Insurance Co., 293 Ala. 101, 300 So.2d 359 (1974). The order of the trial court provides as follows:

November 28, 1977.
On November 23,1977, motion for summary judgment on behalf of U. S. A. Oil Company, a Corporation, was submitted to the court to the plaintiff’s complaint, as last amended, based upon deposition of Garland L. Kelley, answers to interrogatories of Garland L. Kelley, and affidavit of Joe Saxon, and motion for summary judgment in behalf of the defendant Ray Dupree to the plaintiff’s complaint, as last amended, based upon the depositions of Garland L. Kelley and Marie Kelley, and the answers to interrogatories of Garland L. Kelley; and, the court having considered the said motions for summary judgment, the court is of the opinion that there is no genuine issue of a material fact as a matter of law; and that said motions are hereby granted as to all claims of the plaintiff against the defendants, except as to the plaintiff’s claim against U. S. A. Oil Company, a Corporation, which is based upon the provisions of the workmen’s compensation Act of the State of Alabama; and as to this particular claim, the motion for summary judgment on behalf of U. S. A. Oil Company, a Corporation, is overruled.
The Clerk is directed to set the case of Garland L. Kelley against U. S. A. Oil Company, a Corporation, Case No. 52991, on the non-jury docket of April 10, 1978, as a “special” before the undersigned judge.

Where there are multiple parties or multiple claims (as here), ARCP 54(b) provides that final judgment may be entered as to “one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.” In the absence of such a determination and direction, the action is not terminated as to any claim or party and the order is subject to revision. ARCP 54(b). Because such an order is subject to revision, it is not a final judgment. Nelson-American Developers, Ltd. v. Enco Engineering Corp., 295 Ala. 185, 326 So.2d 103 (1976).

In the instant case, the trial court granted summary judgment as to fewer than all of the claims and parties, but did not make an express determination of no just reason for delay or direct the entry of judgment. Therefore, the order was not a final judgment and the appeal must be dismissed ex mero motu. Powell v. Republic National Life Insurance Co., supra; Taylor v. Major Finance Co., 289 Ala. 458, 268 So.2d 738 (1972).

APPEAL DISMISSED.

MADDOX, JONES, SHORES and BEAT-TY, JJ., concur.


author: BEATTY, Justice.

text:
    Joseph HOLMES et al. v. Myrtis POWELL et al.
    77-506.
    Supreme Court of Alabama.
    Oct. 27, 1978.

      Robert W. Rieder, Jr., Huntsville, for appellants.
    Miles T. Powell, Joe B. Powell and J. N. Powell, Decatur, for appellees.
   BEATTY, Justice.

The plaintiffs, Myrtis Powell and Newton B. Powell, brought this boundary-line action against the defendants, Joseph Holmes, Jr. and Nelda Holmes. The Holmes' counterclaimed. After hearing the evidence ore tenas the trial court found in favor of the plaintiffs and fixed the boundary line. The defendants have appealed from that order.

The plaintiffs have filed a motion to dismiss the appeal on the ground that notice of appeal was not timely made.

The record supports the plaintiffs’ view. The date appearing on the judgment is March 24, 1978. The date on which that judgment was filed in the register’s office is March 27, 1978. Rule 4, ARAP requires that notice of appeal “shall be filed with the clerk . . . within 42 days . of the date of the entry of the judgment or order appealed from.” The phrase “entry of judgment” refers to the ministerial act of the clerk in spreading the judgment upon the record, as opposed to the “rendition of judgment” which is the judicial act of the court in pronouncing a judgment or an order. LeFlore v. State ex rel. Moore, 288 Ala. 310, 314, 260 So.2d 581 (1972); Application of Gleit, 178 Misc. 198, 33 N.Y.S.2d 629 (1942); Gow v. Multnomah Hotel, 191 Or. 45, 228 P.2d 791 (1951); Adamson v. Brady, 199 Okl. 55, 182 P.2d 748 (1947). Filing the judgment or order in the office of the clerk (or register) or compliance otherwise under Rule 58(c), ARCP constitutes “entry of the judgment” for purposes of computing the time within which notice of appeal must be filed. Accord, Gilbert v. Cliche, 379 A.2d 717 (Maine, 1977). Therefore the date on which the time for computation began to run in this case was March 28,1978. Forty-two days from that date was May 8,' 1978.

The plaintiffs’ motion to dismiss was accompanied by the certificate of the register stating that the notice of appeal received by her and filed in her office was received on May 9, 1978, one day later. It was contained in a certified mail envelope postmarked May 5, 1978.

Rule 3(a), ARAP states that “[I]n civil cases an appeal . . . shall be taken ... by filing a notice of appeal with the clerk of the trial court, within the time allowed by Rule 4.” The language of Rule 4 is equally mandatory. The language of neither permits the earlier postmark appearing upon an envelope to be a substitute for filing with the clerk. As Judge Holmes recently observed in Moutry v. State, 359 So.2d 388, 390 (Ala.Civ.App., 1978), a case dealing with a similar issue:

A document has not been filed until it has actually been received by the court; mere mailing is not enough. See Blades v. U. S., 407 F.2d 1397 (9th Cir., 1969).

See also Townsend v. Board of Building Appeals, 49 Ohio App.2d 402, 361 N.E.2d 271 (1976); Walsh v. Tucker, 454 Pa. 175, 312 A.2d 11 (1973).

Contrary to the defendants’ argument, Rule 25(a), ARAP does not apply to all filings, but only to filings in an appellate court. That rule does not allow a certified mailing date as this was to be deemed the filing date in a trial court. That express provision accommodates the lack of accessibility of those tribunals to parties who wish to file appellate papers, and one must note that the time requirements contained in that rule are not jurisdictional. See Rule 26(b) on enlargement of time. Nothing contained in Rules 3 and 4, ARAP suggests that similar treatment will be given to the mailing of a notice of appeal to the clerk of the trial court whose office, unlike that of the appellate court clerk, is the repository of all documents and records which must be collated and transmitted on appeal.

The defendants also request that, should we have disagreed with their argument that Rule 25(a) permits a certified mailing date to control the date upon which notice of appeal is filed, we nevertheless suspend the rules under Rule 2, ARAP and therefore allow such a practice to apply in this case. That is, we are not being requested to extend the time for filing, see Rule 2(b), ARAP but are being asked to decide that certified mailing in this instance was sufficient as a filing of notice of appeal. On that point the defendants concede that, but for their mistaken belief on the applicability of Rule 25(a), ARAP they easily could have taken the notice of appeal from Huntsville (where counsel for defendants was located) to Decatur (the location of the register’s office) a distance of only fifteen miles. They add that a notice mailed on May 5 from Falkville, as this was, “would ordinarily be expected to result in delivery” in Decatur, fifteen miles away, by May 8. Whether that conclusion is justified under present conditions we need not decide since it is obvious from a comparison of the Rules and the authorities that, in connection with filing a notice of appeal, the hazards of mail traffic have been studiously avoided.

A timely filing of the notice of appeal is jurisdictional, Morris v. Merchants National Bank, 359 So.2d 371 (Ala., 1978); Rule 3(a), ARAP, the sanction to be applied for an untimely filing being dismissal. Rule 2(a), ARAP. We have no alternative but to follow that mandate.

APPEAL DISMISSED.

TORBERT, C. J., and MADDOX, FAULKNER, JONES and SHORES, JJ., concur.