author: SHORES, Justice. FAULKNER, Justice

text:
    The BOULDER CORPORATION, an Alabama Corporation v. Fred E. VANN, Jr., et al.
    SC 1950.
    Supreme Court of Alabama.
    April 8, 1977.
    Rehearing Denied May 20, 1977.
    William M. Acker, Jr., Birmingham, for appellant.
    J. M. Breckenridge, Birmingham, for ap-pellees.
   SHORES, Justice.

Since 1964, Boulder or its principals have been involved in developing an area known as Cherokee Bend in the City of Mountain Brook. This property has been developed a section at a time. The entire area consists of some 750 acres. Involved in this litigation is a small section amounting to approximately 5V2 acres divided into four lots, which can be reached by Pine Mountain Road and Round Forest Drive.

In addition to this small parcel of property within the city limits of Mountain Brook, Boulder also owns a 20-acre tract which adjoins this small tract on the northern boundary. When Boulder first acquired this 20 acres, it was in Jefferson County. Thereafter, Boulder sought annexation to Mountain Brook which declined to annex the property. The 20 acres were subsequently annexed to the City of Irondale.

This litigation involves Boulder’s small tract located within the city limits of Mountain Brook. Boulder sought approval of a plat of this tract divided into four lots, which plat extends from Round Forest Drive to Boulder’s 20-acre tract, the southern boundary of which is the Mountain Brook city line.

The four lots involved, and for which plat approval was sought, were originally included in the 11th Sector Addition to Cherokee Bend. The current sector is designated as the 13th Sector. When approval of the 11th Sector was sought, the Planning Commission of Mountain Brook agreed to approve that plat only upon condition that the area comprising these four lots be eliminated from the subdivision. As originally submitted, the plat of the 11th Sector showed Round Forest Drive as ending in a cul-de-sac, these four lots being situated on the circle. When the Planning Commission insisted that these lots be eliminated as a condition to approval of the 11th Sector, the effect was to make Round Forest Drive a dead-end street abutting on the property of Boulder which is involved in this litigation. If the present plat is approved, it would have the effect of extending Round Forest Drive to a dead end abutting on the 20 acres owned by Boulder, now situated in the City of Irondale.

Boulder submitted a request for approval of the proposed plat of Sector B Addition to Cherokee Bend to the Mountain Brook Planning Commission on August 8,1975. A hearing on the proposal was held on September 15, 1975.

At that meeting, six members of the Planning Commission were present. A court reporter, at Boulder’s request, was present and recorded the proceedings. During the course of discussion on the proposed plat, the court reporter’s record shows that the Planning Commission admitted that it had refused to approve the 11th Sector unless the four lots composed of the present tract be eliminated.

At the September 15 meeting, as disclosed by the record made thereof by Boulder’s court reporter, there was a general discussion of whether traffic in the neighborhood would be increased if the plat was approved and, at one point, the attorney for the Planning Commission inquired whether Boulder would be willing to amend the plat to convert Round Forest Drive into a cul-de-sac ending short of the city limit line, which was the configuration of that street when the plat of the 11th Sector was rejected unless Boulder amended that proposed plat to eliminate the cul-de-sac.

Following the discussion, a vote was taken. Three of the members present voted to disapprove, two voted in favor and one abstained. No reason for the purported disapproval was stated.

Thereupon, Boulder filed an action for declaratory and other relief asking the court to declare that the proposed plat has in fact and in law been approved by the Planning Commission. When the defendants, members of the Planning Commission, asserted that mandamus was the exclusive remedy, the plaintiff amended its complaint and sought relief by way of mandamus. The complaint, as amended, also asserted that Boulder had never sought to dedicate to the City of Mountain Brook that portion of Round Forest Drive which would locate within the proposed 13th Sector and had never sought any commitment by the city to maintain the street. The only relief sought was approval of the plat.

The thrust of the complaint was to charge that the Planning Commission, which has exclusive jurisdiction and control over subdivisions of land in the City of Mountain Brook by virtue of Title 37, § 787, et seq., Code, had not legally disapproved the map according to the provisions of Title 37, § 799, because, (1) it was not disapproved within thirty days after submission; (2) the burden of disapproval is on the Planning Commission, requiring affirmative action by a majority of its nine members; (3) if a majority of nine is not required for disapproval, then a majority of those members present is required; (4) that the absence of any ground of disapproval on the records of the commission constitutes approval; and (5) that the Planning Commission was arbitrary and capricious in that it violated its own Subdivision Regulations and did not employ a fair standard or condition for approval or disapproval, which constituted a violation of the due process, equal protection and just compensation provisions of the Constitution of the United States.

The complaint was filed on October 13, 1975, and served on the defendants the same day. It contained the allegation that no ground for disapproval of the plat was stated in the records of the Planning Commission.

The defendants filed an answer: (1) Stating that the complaint failed to state a claim upon which relief could be granted; (2) denying the legal conclusions asserted in the complaint, but admitting the essential factual allegations; and (3) asserting that the plaintiff should have appealed the Planning Commission’s action to the City Council.

After the complaint was amended to include a petition for relief by way of mandamus, the defendants amended their answer to say that Boulder had not complied with state law on Subdivision Regulations in submitting the plat. This amended answer also alleged that:

“C. The Planning Commission after a hearing thereon, denied the plaintiff’s request for preliminary approval of Davis & Perkins Addition to Cherokee Bend, 13th Sector, and set out in the minutes of the Commission separate and several grounds therefor as follows:
“ ‘1. Traffic would be greatly increased.
“2. Residents in this area bought their homes with the understanding this area would not be opened up and the streets would be left dead end streets.
“3. The extension of Round Forest Drive into Irondale would disrupt the peace and tranquility of the neighborhood.
“4. Noise pollution would be increased.
“5. Round Forest Drive should end in a cul-de-sac within the Mountain Brook city limits.
“6. Round Forest Drive is a residential street and not a through street, and if not terminated in a cul-de-sac, Round Forest Drive would become a through street.
“7. Round Forest Drive is a “minor street” or a “local street” as defined in the Mountain Brook Subdivision Regulations.
“8. If Round Forest Drive is extended as proposed, such extension will destroy its character as a “minor street” or “local street”.
“9. The proposed extension of Round Forest Drive will create an unnecessary danger to the lives of children who as pedestrians use Round Forest Drive, Pine Mountain Road and/or Kennesaw Drive.
“10. The proponents failed or refused to declare the use they plan for the adjacent property in Irondale to which Round Forest Drive would connect.’ ”

The record before us shows that no meeting of the Planning Commission was held in October, 1975. The next meeting to be held after the September 15 meeting was held on November 3, 1975. The minutes of that meeting reveal the following:

“The Secretary read the minutes for the September 15, 1975 meeting and presented them for approval. Mr. Bolvig moved that the minutes as read be corrected to set out the grounds for the denial of preliminary approval of Davis & Perkins Addition to Cherokee Bend, 13th Sector, which grounds to be set out in said minutes immediately following the recordation of the vote on the motion to deny preliminary approval, were and are separately and severally as follows:”

The foregoing ten grounds were then set out. A motion to approve the minutes of the September 15 meeting as corrected was seconded and approved unanimously.

It is obvious from the above that minutes of the September 15 meeting had been prepared and that such minutes did not contain any grounds for the denial of approval of Boulder’s plat of 13th Sector.

The authority of the Planning Commission to exercise control over subdivision of lands within the municipality is derived from the legislature. Title 37, § 786, et seq., Code. It is authorized to adopt regulations not inconsistent with the statutes. The Mountain Brook Planning Commission has adopted such regulations. In exercising its function approving or disapproving any particular subdivision plat, the Commission acts in an administrative capacity, and is bound by any limitations on its authority contained in the legislation authorizing it to act, as well as any restrictions contained in its own regulations.

“In the area of subdivision control, a planning commission can exercise only those powers granted to it by charter or general statute. Where the commission exceeds such power, its action is void.” 2 Yokley, Zoning Law & Practice (3d Ed., 1976 Cumulative Supplement), § 12-3.

Title 37, § 799, Code, sets out the procedure and legal effect of approval of a subdivision plat. It provides in pertinent part:

“The planning commission shall approve or disapprove a plat within thirty days after the submission thereof to it; otherwise such plat shall be deemed to have been approved, and a certificate to that effect shall be issued by the commission on demand: Provided, however, that the applicant for the commission’s approval may waive this requirement and consent to an extension of such period. The ground of disapproval of any plat shall be stated upon the records of the commission. . . . ”

In Sandlin v. Goldstein, 264 Ala. 358, 87 So.2d 861 (1956), this court was called upon to construe this statute. In that case, the developer presented a plat of a proposed subdivision to the Planning Commission of the City of Huntsville on March 3, 1955. A public hearing was held on April 7, 1955. On June 2,1955, the developer demanded of the Planning Commission a certificate of approval of the plat. It refused to issue the certificate, and the developer filed a petition for mandamus against the members of the commission. The trial court refused to order the issuance of the certificate and the developer appealed. Justice Stakely, writing for the court, held:

“. . . Por more than thirty days after the submission of the aforesaid plat to the Commission for its approval or disapproval, the defendants as such commissioners have neither approved or disapproved said plat. .
“Upon a consideration of the matter . we feel that the language of § 799 ... is clear and explicit and that the legislature intended to provide the protection set forth in the act to the one filing the plat. . . .” (264 Ala. at 359, 87 So.2d at 862.)

The court went on to hold that, under those facts, the developer had shown a clear legal right to a certificate of approval and reversed the trial court for failure to so order.

It is clear, therefore, that this court, like most others, has held that statutes such as § 799 contain certain provisions for the protection of the property owner. The requirement that the commission approve or disapprove plats within a certain time is such a provision and is mandatory.

§ 799 contains two other such provisions: No plat shall be acted on by the commission without affording a hearing thereon and, if disapproved, the ground of disapproval shall be stated on the records of the commission.

Surely the legislature did not intend to compel a planning commission to make a decision on a subdivision plat until it had all of the pertinent facts before it. Nor is it reasonable to assume that the legislature mandated that a public hearing be held within thirty days of the filing of a plat. Obviously, such hearing must be set within a reasonable time, but it is only after the question is ripe for decision that the legislature requires approval or disapproval within thirty days. Such was the factual situation in Sandlin v. Goldstein, supra. There, the plat was filed with the commission on March 3. The public hearing was not held until April 7. However, mandamus issued to compel the issuance of a certificate of approval because the commission failed to act within thirty days after the hearing, and not because the hearing was set beyond thirty days of the date of filing.

Therefore, as we interpret § 799, in order to give meaning to all of its provisions, it seems clear that the legislature has mandated that a planning commission must either approve or disapprove a plat within thirty days after its submission. Because a public hearing is also mandated, it follows that a meaningful decision on whether to approve or disapprove cannot be made until such hearing has been conducted. Only after the required public hearing has been held is the planning commission in a position to approve or disapprove a plat submitted for a decision. It has thirty days thereafter in which to act. If it fails to do so, the plat is deemed approved. If it disapproves the plat, the ground for doing so must be stated in its record within thirty days of the date of • submission.

In the instant case, Boulder filed its plat and check for $65, the customary charge for processing a subdivision map, with the Planning Commission on August 8, 1975. On August 19, the commission issued notice of a public hearing to be held on September 15. Such hearing was held, at the conclusion of which three of the six members present voted to disapprove. No ground for such disapproval was stated in the commission’s records until November 3, after these proceedings were filed, seeking to have the court compel the issuance of a certificate of approval.

Like the petitioner in Sandlin v. Goldstein, supra, we think the petitioner here has shown a clear legal right to a certificate of approval of its plat, because the Planning Commission failed to act within the time and in the manner mandated by the legislature.

Because we hold that the mandatory requirement of the statute, that grounds for disapproval of the plat be stated within thirty days after submission to the commission, was not followed in this case, we pre-termit a discussion of the number of votes necessary to disapprove a subdivision plat.

Reversed and remanded for the entry of judgment consistent herewith.

REVERSED AND REMANDED.

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

BLOODWORTH and FAULKNER, JJ., dissent.

FAULKNER, Justice

(dissenting).

The majority holding says this: Planning Commission, you did not give your reasons for disapproving Boulder’s plat within 30 days after its submission to you. Therefore, the statute mandates that for this omission you must be deemed to have approved the plat. So, give Boulder a certificate.

The majority’s submission date (September 15) is contra to Boulder’s argued submission date (August 8) in brief.

Boulder says that it “submitted to the Planning Commission its request for approval of the 13th Sector on August 8, 1975. If the Planning Commission action on September 15, 1975, can be considered a denial . then the purported denial nevertheless came more than 30 days after August 8, 1975 . . .” The majority recognizes the fallacy of this argument. However, the trial judge, as well as the Planning Commission counsel got caught up in this web of miscalculation. Both mentioned the 30 days time period as beginning to run from August 8. The majority is, therefore, correct in saying the time frame began on September 15, the date of the public hearing; the plat was submitted then. It was filed on August 8.

The Commission acted on the submission of the plat on September 15 by disapproving it. There were 6 members present at the meeting. Three voted to disapprove; two voted for approval, and one member abstained. The minutes were corrected on November 3 to show the reasons for disapproval. The majority says that the reasons must be stated within 30 days after submission; if not, there is automatic approval of the plat under the statute. The statute says no such thing. Tit. 37, § 799 provides:

“Procedure; legal effect of approval of plat. — The planning commission shall approve or disapprove a plat within thirty days after the submission thereof to it; otherwise^ such plat shall be deemed to have been approved, and a certificate to that effect shall be issued by the commission on demand: Provided, however, that the applicant for the commission’s approval may waive this requirement and consent to an extension of such period. The ground of disapproval of any plat shall be stated upon the records of the commission.’’ (Emphasis added.)

The statute merely provides that the ground of disapproval shall be stated upon the records of the Commission. When? The logical answer is that the legislature intended the ground to be stated in the due course of Commission business. The majority’s approach is indeed unique to statutory construction. It not only goes beyond the terms of § 799, but also is inconsistent with other provisions of the article on city and regional planning. To hold that the legislature intended that if, on a vote of disapproval, no ground is stated on the record within thirty days, there is an automatic approval, means that, in some instances, the Commission would have to approve the minutes on the very day of the proceeding. The statute does not provide that the plat will be deemed approved because no grounds of disapproval are stated on the Commission records. The deemed approval comes about by the Commission’s failure to act. Sandlin v. Goldstein, 264 Ala. 358, 87 So.2d 861 (1956). Here, the Commission acted. But assume, arguendo, that the statute said emphatically that the ground of disapproval must be stated in the records within thirty days after submission. What do we have in this case? A declaratory action was filed on October 13, two days before the expiration of the 30-day period. (The 30 days after submission expired on October 15.) The suit was based upon an invalid vote of disapproval, no ground for disapproval stated, and arbitrary and capricious abuse of discretion. This date — October 13 — was the very day that Boulder had requested in its appeal to the City of Mountain Brook to “please put the Boulder Corporation on the City Council’s agenda for Monday night, October 13. If you think we need to bring any additional data with us, please ask Ann to let me know.” The letter was signed by H. M. Davis on behalf of Boulder. It was dated September 19.

After suit was filed on October 13, and service had on the same date, the City Council did not take up the Boulder appeal on the agenda for its October 13 meeting. It appears that Boulder was acting post haste to take legal action. Common courtesy should have been extended to the City Council for an opportunity to act.

It is my opinion that the legislature did not intend to require the Planning Commission to enter the grounds for its disapproval of a plat upon its records within 30 days after submission, but only that the grounds be stated upon the records in the due course of the business of the Commission. The remedy for a failure to state the grounds is not to declare the disapproval invalid. The proper remedy is mandamus to correct or to complete the minutes. City of Guntersville v. Walls, 252 Ala. 66, 39 So.2d 567 (1949). The developer would then have an opportunity to petition a court to determine whether the Commission acted arbitrary and capricious.

BLOODWORTH, J., concurs.


source: Caselaw Access Project

author: PER CURIAM. JONES, Justice FAULKNER, Justice

license: Public Domain

text:
    ALABAMA DAIRY COMMISSION, and Associated Milk Producers, Inc. v. DELVIEW MEADOW GOLD DIVISION, BEATRICE FOODS COMPANY, et al.
    SC 1814.
    Supreme Court of Alabama.
    April 15, 1977.
    Rehearing Denied May 20, 1977.
    Charles M. Crook, Montgomery, for Alabama Dairy Com’n.
    Henry C. Chappell, Jr., Montgomery, for Associated Milk Producers, Inc.
    Curtis H. Springer, Montgomery, for ap-pellees.
   PER CURIAM.

This appeal involves an order of the Alabama Dairy Commission which permits producers to share in the profits of sales of buttermilk made from milk powder.

Succinctly stated, Order 2-76 required that if a distributor receives surplus milk from the farmer, the distributor can use it in making buttermilk or not as he sees fit, but if he sells milk made from powder, he must pay for an equivalent portion of the farmer’s surplus milk as though such surplus milk had been used to make the buttermilk, that is, at the Class I price.

In order to compensate the distributor, in part, for this increased cost of manufacturing buttermilk from powder, the Commission increased the wholesale price of buttermilk, whether made from powder or fresh skim milk. In other words, the Commission continues to regulate the price of buttermilk whether made from powder or fresh skim milk. An example of how the Commission order would work is, as follows: Assume that during the month of June, a farmer ships 1,000 pounds of milk to a distributor. At the end of the month, the farmer’s pro rata share of the distributor’s sales are as follows: 600 pounds of the farmer’s milk was used to make homogenized milk (Class I) and 400 pounds was used to make yogurt, or was resold to a cheese manufacturer (Class II). The distributor’s records also show that it sold 300 pounds of buttermilk made from powdered milk. Under the old pricing structure, the farmers would have received the Class I price for 600 pounds of milk, and the Class II price for 400 pounds of milk. The distributor would have paid the farmer nothing from its buttermilk sales, and would have realized the entire profit, which the record before the Commission shows was considerable because the raw product cost of powder was unregulated but the sales price of buttermilk made from powder was regulated. Under the new regulation, the farmer gets to share in this profit. He would be paid for 900 pounds of milk at the Class I price, and 100 pounds of milk at the Class II price. The extra cost to the distributor is the difference between the Class I and Class II prices. In order to compensate the distributor for this increased cost, the Commission increased the wholesale price which he may charge the retailer.

Under the order, the farmer gets the Class I price for the distributor’s buttermilk sales only if the farmer at some point ships an equivalent amount of milk. The regulation does have a “carryover” provision, strenuously objected to by the distributors, which operates as follows: If a farmer has not shipped “surplus” milk equal to his share of the plant’s sales of buttermilk made from powder, he does not get paid for such share. However, he gets a “credit” which may be carried forward to succeeding months. If the farmer later ships “surplus” milk to the plant equal to his credited share of earlier sales of buttermilk made from powder, he gets the Class I price for this milk. The farmer never gets paid for milk he does not deliver, but under the “carryover” provisions, it is possible for a distributor’s buttermilk sales to give rise to a Class I price for “surplus” milk which was not delivered until after the month in which the buttermilk sales occurred.

Distributors, unhappy with Order 2-76, asked the Circuit Court of Montgomery County to review it. That court, citing this Court’s case of Dark’s Dairy v. Alabama State Milk Control Board, 278 Ala. 693, 180 So.2d 527 (1965), held it to be invalid, as being beyond the powers of the Commission. The Commission appealed. We reverse.

At first blush, it would seem that Dark’s Dairy would control this case because Dark’s Dairy, too, involved a classification and pricing order of the old Milk Board involving sales of buttermilk made from powder. However, it is apparent from a close reading of Dark’s Dairy that this Court did not hold in that case that a milk regulatory Commission was powerless, under all fact situations, to classify and regulate the price of buttermilk made from powder.

In Dark’s Dairy, the producers argued essentially what the Commission argues here, namely:

“Counsel for the producers argue in support of that portion of Order 1-63 now being considered, that unless the classification of non-fat buttermilk is on the 99% sales basis, a distributor could by reconstituting buttermilk from milk powder and other ingredients diminish his needs for fresh milk for buttermilk purposes, and thereby increase the amount of surplus milk with a resulting decrease in the blend price paid the'producer.”
This Court answered that argument, as follows:
“The record is devoid of evidence tending to show what percentage of non-fat or cultured buttermilk is manufactured from fresh milk or what percentage is reconstituted from milk powder and other elements. Without such evidence it must appear that the classification of non-fat buttermilk on the basis of the sales of 99% of all buttermilk, that is that made from fresh milk and that made from powder, etc., can only be deemed as arbitrary. It cannot be determined from the record why the figure was set at 99% of sales, rather than 95%, or 80%, etc.”

Here, unlike the situation in Dark’s Dairy, there was substantial evidence presented, and based on this evidence, the Dairy Commission made the following findings of fact:

“3. Approximately three-fourths of the buttermilk processed and distributed by licenses of the Commission is made from non-fat milk powder. In the absence of adequate regulations the sales of fluid buttermilk processed from non-fat milk powder are lost to producers.
“4. The cost of producing buttermilk from non-fat milk powder is less than producing buttermilk from fresh Class I skim milk. This cost difference creates the incentive to produce buttermilk from non-fat milk powder.
“5. Some distributors are producing buttermilk from fresh Class I skim milk and some are producing buttermilk from nonfat milk powder, thus creating a disparity of costs among distributor licenses.
“6. Present wholesale and retail prices for buttermilk do not adequately reflect the cost of producing said buttermilk using fresh Class I skim milk.
“7. Wholesale and retail prices for buttermilk can be adjusted to adequately reflect the cost of producing buttermilk from fresh Class I skim milk and give the consuming public an adequate supply of high quality buttermilk at a fair price. “8. The use of fresh Class I skim milk in the production of buttermilk will tend to stimulate more production of milk in Alabama.”

These findings are supported by the record and justify the classification and pricing action taken by the Commission, acting pursuant to the authority granted it by Section 20 of Act No. 408, Acts of Alabama, 1971, p. 1097, [carried as Title 22, § 223(1), Code of Alabama, 1940, Recompiled, 1958, (1973 Cumulative Supplement)], which provides, in part:

“When in the judgment of the dairy commission, it is necessary or advisable, due to seasonable fluctuations or other unstable conditions, in order to promote a proper balance between the supply of and the demand for milk, to fix a lesser minimum price for milk which is produced in excess of what is needed for fluid milk consumption, the dairy commission may establish the quantity of milk for which the distributor or milk dealer shall pay the fluid or base milk price, and may establish a lesser minimum price for milk which is produced in excess of what is needed for fluid milk consumption. For this purpose, the dairy commission may compute said quantity upon a uniform system of plant usage, classifying milk according to its various usage and establishing different minimum prices which the milk dealer or distributor shall pay for each classification, or the dairy commission may, if it deems it most advisable, establish a base surplus system, placing all milk sold by a plant for fluid milk consumption, including all milk as defined in the definition of fluid milk in one classification, establishing a minimum price therefor and all milk processed by such distributor or milk dealer into by-products into another classification, and fixing a lesser minimum price for said surplus milk so used in the byproducts classification, or the dairy commission may use a combination of both systems. The dairy commission shall have authority to use the different systems of classifications in different milk sheds or different localities of the state as it deems most advisable to carry out the provisions of this chapter. The dairy commission shall have the power to establish uniform rules and regulations for the apportionment of this quota of base milk among the various producers who furnish such distributors and milk dealers with their regular milk supply used for such purposes, and may adopt such systems for the apportionment of such base or higher price classification of milk among the several producers as it may determine to be the most just and equitable in the administration of this chapter. For this purpose, the dairy commission may require any milk dealer or distributor to supply necessary information about the quantity of milk received from the producers during a specified period of time, and any other information necessary for the determination of this matter. The dairy commission may determine the minimum price to be received by producers for milk within the quota of base or higher price classification of milk and for surplus milk or milk in excess of such producers quota. Each order fixing minimum price or handling charges may classify milk for forms, classes, grades, or use as the dairy commission may deem advisable and may specify the minimum price in each classification, grade or use as the dairy commission may determine. [Emphasis added.]”

If Order 2-76 is invalidated, it is reasonable to assume that the previous inequitable and inconsistent pricing system for buttermilk would continue under which a distributor would share a regulated wholesále price for buttermilk, whether made from powder or fresh skim milk, but would have an unregulated raw product cost, thereby throwing substantial quantities of fresh skim milk into the Class II price, and consequently injuring the producers. Order 2-76 attempted to remedy this inequity and inconsistency, and also attempted to stimulate milk production in Alabama. We find Order 2-76 is reasonable.

It is not the duty of the courts to devise the scheme for regulating the fluid milk industry. That job belongs to the Alabama Dairy Commission.

Our duty is to review the orders of the Dairy Commission under the rule of review set out in Alabama Jersey Cattle Club v. Alabama State Milk Control Board, 274 Ala. 611, 150 So.2d 711 (1963), as follows:

“* * * (1) Matters for the judicial tribunal are whether the order is unlawful, and what should be the legal conclusion from the facts found. (2) The review by certiorari includes a determination by the circuit court of whether the order is unreasonable based on the facts so found, but not a determination of whether the facts found by the board are true upon a consideration of the evidence. (3) Where there is some evidence on which to base such a finding, this satisfies the rule of review, as contemplated by the statute.”

After reviewing Order 2-76 under the rule enunciated in Alabama Jersey Cattle Club, we are of the opinion that the judgment of the circuit court is due to be reversed.

REVERSED AND REMANDED.

TORBERT, C. J., and MADDOX, AL-MON, SHORES, EMBRY and BEATTY, JJ., concur.

JONES, J., concurs in the result.

BLOODWORTH and FAULKNER, JJ., dissent.

JONES, Justice

(concurring in the result):

I concur in the result. I agree that Dark’s Dairy is not controlling in that the evidence lacking in Dark’s Dairy has been supplied in the case at bar. But this is not to say that I agree with those conclusionary statements in the majority opinion going to the overall authority of the Commission. In view of pending litigation, contesting on constitutional grounds the Dairy Commission’s legal existence, I reserve the expression of any opinion on the Commission’s power to exercise any regulatory authority over the dairy industry until these issues are presented in an adversary context. No such constitutional attack is here presented.

FAULKNER, Justice

(dissenting).

I dissent.

This case results from the fact that Bossy, the cow, and the consumer can not get together. At a time when she is producing the most milk, the consumer is drinking it the least. Surpluses, therefore, are created because Bossy can not be turned off. What to do, and how to compensate the producer for this surplus milk confronted the Commission. From its deliberation, Order No. 2-76 was adopted.

Order No. 2-76 permitted farmers, as well as distributors, to receive a share of the profits from sales of buttermilk made from powder and allowed the distributors to recoup most of the increased cost through an increase in their selling price. Producers are paid for the milk they deliver to a distributor according to the way the distributor uses the milk. Class I milk is sold by the distributor in fluid form and brings a higher price. Class II milk is that which is produced in excess of the Class I needs of the distributor and which, as a surplus, brings a lower price. Under Order No. 2 — 76 the distributor, if he received surplus milk, can use it in making buttermilk or he can use powder, but if he sells buttermilk made from powder, he must pay for an equivalent portion of the surplus milk as though the surplus milk had been used to make the buttermilk, i.e., at the Class I price. A carry-over provision allows a farmer, when he has not shipped surplus milk equal to his share of the plant’s sale of buttermilk made from powder, a credit which can be carried until he does ship surplus milk.

Some distributors, including Delview Meadow Gold, filed a petition for certiorari in the Circuit Court of Montgomery County, asserting that the regulation was beyond the power of the Commission, that it was unreasonable and violated the due process clause of the United States Constitution, and that it imposed additional costs on them, thereby reducing their profit margin. The petition for certiorari was granted and the lower court invalidated the order as being contrary to Dark’s Dairy v. Ala. Milk Control Bd., 278 Ala. 693, 180 So.2d 527 (1965). The Alabama Dairy Commission and Associated Milk Producers, Inc., a milk farmer cooperative, appeal this decree.

The issue here is whether the Alabama Dairy Commission in promulgating Order No. 2-76 exceeded its power and authority under Title 22, §§ 205-31, Code of Ala. 1940 (Recomp.1958) (as amended), invalidating the order.

The Circuit Court found that Order No. 2-76 was contrary to Dark’s Dairy and thus invalid. I agree with the lower court in holding that Dark’s Dairy is controlling.

In that case this court considered a Milk Control Board order classifying fat buttermilk on the basis of sales of 99% of all buttermilk rather than on the distributor’s usage of fresh milk. Order No. 2-76 is substantially similar to that earlier regulation, as both required distributors to account for sales of buttermilk as premium price sales, regardless of whether the buttermilk was made from fresh milk or powder.

The facts of the two cases are not significantly different. That here the Dairy Commission granted a concomitant price increase to allow the distributors to recoup most of their increased costs resulting from the new regulation, while it did not in Dark’s Dairy, is irrelevant to the question of arbitrariness of the order.

In Dark’s Dairy this court held that a regulation which results in producers being paid a premium price for milk that is surplus is beyond the power of' the Board. Order No. 2-76 would bring the same results and is, therefore, beyond the power of the Commission. It does not matter whether the distributors use powder to make buttermilk all the time or only when there is an insufficient supply of fresh milk; the distributors will have to pay a Class I price for milk whenever they make their buttermilk from powder, for whatever reason, whether greater profit, convenience or necessity. This violates § 223(1) which states in pertinent part:

“When in the judgment of the dairy commission, it is necessary or advisable, due to seasonable fluctuations or other unstable conditions, in order to promote a proper balance between the supply of and the demand for milk, to fix a lesser minimum price for milk which is produced in excess of what is needed for fluid milk consumption, the dairy commission may establish the quantity of milk for which the distributor or milk dealer shall pay the fluid or base milk price, and may establish a lesser minimum price for milk which is produced in excess of what is needed for fluid milk consumption. For this purpose, the dairy commission may compute said quantity upon a uniform system of plant usage, classifying milk according to its various usage and establishing different minimum prices which the milk dealer or distributor shall pay for each classification, or the dairy commission may, if it deems it most advisable, establish a base surplus system, placing all milk sold by a plant for fluid milk consumption, including all milk as defined in the definition of fluid milk in one classification, establishing a minimum price therefor and all milk processed by such distributor or milk dealer into by-products into another classification, and fixing a lesser minimum price for said surplus milk so used in the byproducts classification, or the dairy commission may use a combination of both systems.” (Emphasis added.)

The milk which the buttermilk distributor must buy under Order No. 2 — 76 is milk which is produced in excess of what is needed for fluid milk consumption and is thus due to come under the lesser minimum price, not the premium price. Whether the Commission computes the quantity of milk for which the distributor pays the fluid milk price upon a plant usage system, a plant sales system or a combination of both, Order No. 2 — 76 is arbitrary and unreasonable. The milk which the powder buttermilk distributors are required to purchase is neither used nor sold by the plant for fluid milk consumption but is nevertheless priced as such. The Commission lacks authority to pass an order that in effect makes distributors pay a premium price for milk not used in a premium product.

None of the arguments made by the Dairy Commission are sufficient to overrule Dark’s Dairy. Therefore, the Circuit Court properly decided this case on the basis of Dark’s Dairy.

I would affirm the trial court.

BLOODWORTH, J., concurs.


author: SHORES, Justice.

text:
    SENTRY INSURANCE COMPANY, a corp. v. PACIFIC INDEMNITY COMPANY, a corp., et al.
    SC 2017.
    Supreme Court of Alabama.
    April 22, 1977.

      Jack B. Porterfield, Jr., and Larry W. Harper of Dunn, Porterfield, Scholl & Clark, Birmingham, for appellant.
    Eugene D. Martensen and Thomas B. Huie, Birmingham, for appellees.
   SHORES, Justice.

K & K Company of Clearwater, Inc. (K & K), a general contractor, required cast iron pipe to be used from time to time in its construction projects in Florida. It bought pipe from McWane Cast Iron Pipe Company in Birmingham (McWane). On January 10, 1972, Jerry Agent, K & K’s employee, was sent to McWane in K & K’s truck to pick up a load of pipe. Agent parked the truck at McWane’s loading dock and McWane’s employees loaded the pipe onto the trailer. After it was loaded, Agent secured the load to the flat-bed trailer and left McWane’s yard to return to Florida. During the return trip, Agent was killed in an accident which occurred near Montgomery, Alabama.

Agent’s widow and child filed suit for wrongful death against McWane and K & K, among others. The complaint alleges that McWane was negligent in loading the truck without the truck having a header board as required by rules of certain governmental agencies and in improperly loading and/or binding the load onto the flatbed. When the accident occurred, the pipe moved into the driver’s compartment and caused or contributed to Agent’s death. Pacific Indemnity Company (Pacific) is McWane’s insurer. It is defending McWane in the damage suit brought by Mrs. Agent, but is doing so under protest and after having made demand upon Sentry Insurance Company (Sentry), K & K’s insurer, to assume McWane’s defense. Sentry has refused to defend McWane.

Pacific and McWane then brought a declaratory action against Sentry seeking an order construing the policy of insurance issued by Sentry to K & K. Pacific and McWane contend that McWane is an additional insured under Sentry’s policy.

The trial court, after considering stipulated facts, exhibits, depositions and the oral testimony of an employee of McWane, issued its judgment holding that McWane was an additional insured under Sentry’s policy and that, therefore, Sentry was required to defend McWane in the death action brought by Mrs. Agent. Sentry appealed from this judgment.

Sentry’s policy, after naming K & K as the named insured, contains the following provisions:

“I. COVERAGE C — BODILY INJURY LIABILITY
“The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
“C. bodily injury .
“to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use, including loading and unloading, of any automobile. . .
II. PERSONS INSURED
“Each of the following is an insured under this insurance to the extent set forth below:
“(a) the named insured;
“(c) any other person while using an owned automobile or a hired automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, but with respect to bodily injury or property damage arising out of the loading or unloading thereof, such other person shall be an insured only if he is:
“(1) a lessee or borrower of the automobile, or
“(2) an employee of the named insured or of such lessee or borrower;
“(d) any other person or organization but only with respect to his or its liability because of acts or omissions of an insured under (a), (b) or (c) above.”

We first determine whether McWane is an additional insured under 11(c) or 11(d) of Sentry’s policy.

Clearly, by the language contained in Section I of the policy, the company (Sentry) has obligated itself to pay all sums an insured becomes obligated to pay as damages for bodily injury arising out of the use of an insured automobile and “use” includes loading or unloading an insured automobile. It is equally clear, however, that under the provisions of 11(c), the policy restricts its liability under the loading and unloading clause by the following language:

“. . . but with respect to bodily injury or property damage arising out of the loading or unloading thereof, such other person shall be an insured only if he is:
“(1) a lessee or borrower of the automobile, or
“(2) an employee of the named insured or of such lessee or borrower;”

McWane contends that the loading and unloading provision contained in Section I of the Sentry policy broadens the term “use” in the policy. We agree.

In Fireman’s Fund Insurance Co. v. Canal Insurance Co., 411 F.2d 265, 268 (5th Cir.1969), the court held:

“The terms ‘loading’ and ‘unloading,’ as used in motor vehicle liability insurance policies, are not words of art. They are used to extend and expand the ordinary meaning of the word ‘use,’ and should be taken in their plain, ordinary and popular sense and given a meaning that will carry out the intent of the parties to the insurance contract.”

McWane says that although Sentry concedes that McWane was “using” K & K’s vehicle when it was loading the pipe, its insistence that coverage is afforded McWane only if McWane is a “lessee or borrower” while engaged in such loading, adds an additional requirement for one seeking coverage as a loader of the vehicle.

McWane asserts that Sentry has added an additional requirement in its policy requiring that one must qualify as a “lessee or borrower” to be covered under the policy if the injury occurs during the course of loading or unloading the insured vehicle, and says that this requirement was added to circumvent the Fireman’s Fund case. The policy involved in the Fireman’s Fund case did not contain the “lessee-borrower” requirement. That might well have been Sentry’s purpose, but the fact is that it has added this additional requirement in its policy and we are not at liberty to ignore it. The question is whether McWane was a “lessee or borrower” of the truck under the facts of this case.

Some few courts have dealt with policies containing the same or similar provisions.

In Gary Safe Company v. Transport Insurance Company, 525 S.W.2d 64 (1975), the Court of Civil Appeals of Texas construed the identical provision as contained in 11(c) of the Sentry policy. In Gary, one Reynolds, an employee (driver) of Braswell Motor Freight Lines, Inc., was injured while Braswell’s truck was being unloaded by employees of the consignee and Reynolds at its destination. The shipper of the safe, Gary Safe Company, and the consignee both claimed coverage under Braswell’s policy issued by Transport. The court denied coverage saying:

“. . . Gary Safe Company [the consignee did not appeal a summary judgment entered against it] was not a lessee or borrower of the Braswell delivery truck at the time of the accident, and, therefore, was not entitled to coverage . . .” (525 S.W.2d at 67)

The Court of Appeals of New York reached a similar result in Breen v. Cunard Lines Steamship Company, Limited, 33 N.Y.2d 508, 355 N.Y.S.2d 333, 311 N.E.2d 478 (1974). In that case, Breen, a truck driver for Wooster Express, sued Cunard for injuries he sustained while unloading Wooster’s truck on Cunard’s pier. Cunard then sued Liberty Mutual Insurance Company, Wooster’s liability carrier, claiming coverage under the loading and unloading provision. The New York Court held that under the provisions of the Liberty Mutual policy, which are the same as Sentry’s, as to bodily injury or property damage sustained in the process of loading and unloading coverage for liability to others was limited to a lessee or borrower of the vehicle. The court held that Cunard was neither a lessee nor a borrower of the Wooster truck during the unloading process and, therefore, was not covered under the policy.

In the instant case, Pacific and McWane argue that White v. Great American Insurance Company of New York, 343 F.Supp. 1112 (M.D.Ala.1972), should be followed.

In White, a truck driver for Arrow Truck Lines was injured while an Arrow truck was being loaded by employees of Union Camp on Union Camp’s premises. Union Camp’s general liability insurer brought an action for reimbursement against Arrow’s insurer claiming coverage under a “loading and unloading” provision identical to the one before us. (343 F.Supp. at 1115) The court held that Union Camp was within the coverage of the “loading and unloading” provision of the Arrow policy and said simply that “. . . The truck was either leased or borrowed for the purpose of loading. . . .” (343 F.Supp. at 1119)

Although the court’s conclusion in White seems to support Pacific and McWane’s contention, that case is factually distinguishable from the one before us. There, Union Camp hired the Arrow truck for the delivery of consigned goods. The truck was delivered to Union Camp to be loaded by employees of Union Camp for delivery to Union Camp’s customer. The loading was the initial step in the delivery of the consigned goods for which Arrow was paid. Therefore, it was at least arguable that, under those facts, Union Camp was a lessee or borrower of the vehicle during the loading process.

Under the facts in the instant case, McWane cannot be considered a lessee or borrower of the K & K truck. Obviously, it is not a lessee. At least one court has defined borrower as used in this policy.

In Broome County Co-Op. Fire Ins. Co. v. Aetna Life and Casualty Company, 75 Misc.2d 587, 347 N.Y.2d 778 (1973), the Supreme Court of New York held that the “loading and unloading” limitation was applicable in a situation where a person, confined to a wheelchair, was taken in her automobile to a friend’s house and was injured when the friend attempted to pull the wheelchair up a ramp into the house. That court stated that “. . .A ‘borrower’ of an automobile has been described as one who ‘uses the car for his own business or pleasure, and not for any purpose in which the owner is interested.’ . . .” (347 N.Y.S.2d at 784) The court went on to say that “. . . the term ‘borrower’ is generally understood to mean someone who has, with the permission of the owner, possession and use of the property of another for his own purposes.'' (347 N.Y.S.2d at 784)

In the instant case, McWane did not have possession of the K & K truck for its own purposes. We conclude, therefore, that McWane is not an additional insured under 11(c) of the Sentry policy.

McWane says if it is not covered under that provision of the policy it is covered under 11(d).

To qualify as an insured under 11(d), McWane’s liability must have been based on “acts or omissions” of K & K. The allegation in Shirley Agent’s complaint upon which McWane’s liability is based is as follows:

“14. Plaintiff avers that the defendants MCWANE CAST IRON PIPE COMPANY negligently loaded the said motor vehicle which JERRY DAVID AGENT was operating on the occasion made the basis of this suit in view of the fact that it contained no header boards or similar devices of sufficient strength to prevent the shifting and penetrating or crushing of the driver’s compartment located on said vehicle. Plaintiff further avers that said defendant negligently failed to have the load securely fastened or braced in such a manner as to prevent said load from shifting and penetrating or crushing driver’s compartment of said vehicle.”

There is nothing in this allegation which indicates that McWane is being charged with liability for acts or omissions of K & K or any other insured under the Sentry policy. McWane’s alleged liability is based on its own acts or omissions.

In Long Island Lighting Company v. Hartford Accident and Indemnity Company, 76 Misc.2d 832, 350 N.Y.S.2d 967 (Sup.Ct.1973), the court considered an identical policy provision. In that case, one Zirk, an employee of McGovern Sod Farms, Inc., was electrocuted when a truck he was driving came into contact with wires owned and maintained by Long Island Lighting Company (LILCO). Hartford insured McGovern under a policy containing the same language as is contained in Section 11(d) of the Sentry policy. LILCO sought to be declared an additional insured under the Hartford policy, arguing that because McGovern’s employee, an insured, drove the truck into the wires, his act led in sequence to the accident, resulting in the claim against LILCO. The court said:

“. . . the Court believes that there is a more circumscribed meaning to ‘because of’ [as used in 11(d) of the Sentry policy] than merely being a sequential link in the chain of events. The words imply a relationship connecting the culpable acts of persons using the vehicle to liability of another, who then becomes an ‘insured’. The phrase appears to include persons or organizations held in by way of vicarious liability for derelictions of McGovern, its employees, or a consensual user of the vehicle.
“The end result under Lilco’s interpretation would be bizarre. A wholly negligent instrumentality in an accident causing injury to a McGovern employee would then become an ‘insured’ under McGovern’s own policy simply because an employee’s totally faultless act was one sequential factor out of many events leading to an accident. Every person encountering McGovern’s staff would then potentially be an ‘insured’. . . . The end result is too odd to accept. . . . ” (350 N.Y.S.2d at 972)

The judgment appealed from is due to be and the same is hereby reversed and remanded.

REVERSED AND REMANDED.

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


author: ALMON, Justice.

text:
    Elgie CANNON et al. v. Walter B. CANNON, as Executor of the Estate of Mary Elizabeth Cannon, et al.
    SC 1784.
    Supreme Court of Alabama.
    April 29, 1977.
    Charles 0. Caddis, Birmingham, for appellants.
    Gerald D. Colvin, Jr., Birmingham, for appellees.
   ALMON, Justice.

This case involves a dispute within the Cannon family over certain real property. The issue is whether the testimony of certain witnesses is admissible under the Dead Man’s Statute, Tit. 7, § 433, Code of Alabama 1940, Recompiled 1958.

The property was originally owned by P. M. Cannon who died intestate in 1928. He left a widow, Mary Elizabeth Cannon, and six children. Joe C. Cannon, one of the six children, died in 1943 leaving a widow and four children. Between 1957 and 1960 all parties holding any interest in the real estate — i. e., the five living children of P. M. Cannon, their wives or husbands, the widow of Joe C. Cannon, his children, and their wives or husbands — transferred their interest by quit claim deed to Mary Elizabeth Cannon. In 1960 Mary Elizabeth Cannon executed a long-term lease of the property. During 1967 the lease was rewritten to provide that it would continue until 1990 with the right to renew until 2010; the rent automatically increased periodically. Mary Elizabeth Cannon died on April 18, 1974, leaving by will $500.00 to each of Joe C. Cannon’s children and the real estate in trust for the benefit of her five surviving children, the income of which would be divided equally among them. The trust is to last until the death of the last child or until the lease terminates.

Suit was filed by the widow and children of Joe C. Cannon against the other children of P. M. Cannon and their wives contending that the quit claim deeds should be reformed to convey only a life estate, not a fee, or in the alternative, that Mary Elizabeth Cannon constructively held the property in trust and that they are entitled to a one-sixth interest in fee, notwithstanding the provisions of Mary Elizabeth Cannon’s will. At trial the plaintiffs attempted to question certain witnesses regarding statements made by Mary Elizabeth Cannon about the conveyances. The trial judge sustained objections to these questions. Judgment was for the defendants.

The plaintiffs contend that the trial court erred because the testimony they attempted to elicit comes within at least one of two possible exceptions to the Dead Man’s Statute.

In Taylor v. First National Bank of Tuscaloosa, 279 Ala. 624, 189 So.2d 141 (1966), this court listed three conditions that are required to exist by the statute before a witness becomes incompetent to testify as to a statement made by the dead person:

“1. The witness must have a pecuniary interest in the result of the suit.
“2. His interest must be opposed to the interest of the party against whom he is called to testify.
“3. The estate of the deceased person who made the statement must be interested in the result of the suit.” Id. at 630, 189 So.2d at 146.

The appellants argue that either of the latter two requirements are not met. As to the second requirement, see Taylor, supra; Watson v. Watson, 283 Ala. 214, 215 So.2d 290 (1968); Faust v. Faust, 248 Ala. 660, 29 So.2d 133 (1947); Niehuss v. Ford, 251 Ala. 529, 38 So.2d 484 (1949). As to the third requirement, see Ambrose v. Vandeford, 277 Ala. 66, 167 So.2d 149 (1964); Slagle v. Halsey, 245 Ala. 198, 15 So.2d 740 (1944); Hanks v. Hanks, 281 Ala. 92, 199 So.2d 169 (1967); Hodges v. Hodges, 201 Ala. 215, 77 So. 741 (1918); Finch v. York, 294 Ala. 382, 318 So.2d 249 (1975).

Under the second requirement, the appellants contend that the defendants, called by them as witnesses, should be allowed to testify as to statements made by Mary Elizabeth Cannon because “[t]heir testimony would be contrary to their [own] interests and therefore not within the influence of Section 433 . . . .” Watson v. Watson, supra, at 216, 215 So.2d at 291.

The only defendants that indicated they had any statements to relate were Preston M. Cannon and Katherine Hardy Cannon. Preston’s and Katherine’s present interest in the real estate is a one-fifth interest held in trust until the last of Mary Elizabeth Cannon’s children die, or until the long-term lease on the property terminates, whichever comes sooner. If the appellants prevail in their suit to reform the deeds of Mary Elizabeth Cannon or to declare that she held the land in constructive trust, the interests of Preston and Katherine would be transformed from a one-fifth interest in trust to a one-sixth interest in fee. The question is whether such a change is opposed to their interest. Their present interests represent a larger piece of the property than they would receive should the appellants prevail; however, a one-sixth interest in fee may in some respects be more desirable than a one-fifth interest in trust. Quite possibly they will not be around to see the termination of the trust, and the fee will go to their heirs. Whether a one-sixth in fee is more desirable than a one-fifth in trust may turn on personal preference.

To Preston and Katherine, “a bird in the hand may be better than two in the bush.” Under the facts here presented, we cannot say that the interests of Preston and Katherine are not opposed to those of the other appellees.

The other contention is that the estate is not interested in the result of the suit. However, if the deeds were reformed to state that Mary Elizabeth Cannon took only a life estate, the property would pass outside the estate, clearly diminishing it. The appellants’ contention, though they cite no cases in support thereof, is apparently that if Mary Elizabeth Cannon took in constructive trust, the property would pass through the estate, and it would therefore not be increased or diminished.

In Walling v. Couch, 292 Ala. 33, 288 So.2d 435 (1973), a husband conveyed real estate to his wife (deceased) with the understanding that she would build a house on the property, and if the property were ever sold, the husband would receive back the value of the property. They subsequently divorced and she sold the property to third parties. The husband sued the estate and third parties alleging constructive trust. The court held that the Dead Man’s Statute rendered incompetent all testimony concerning conversations between the husband and his deceased wife respecting the alleged agreement.

In contradistinction is Finch v. York, supra, where a father (deceased) conveyed real estate to a son (appellant, defendant below) and a daughter (appellee, plaintiff below) with the alleged agreement that they would reconvey a one-half interest to two other daughters not then present. The son declined to make the conveyance, and was alleged to hold the property in trust. The court distinguished Walling and held that evidence of statements made by the deceased father were admissible under the Alabama Dead Man’s Statute because the estate would be neither increased nor decreased as a result of the suit. “In Walling the $10,000.00 was to come from the deceased’s estate and the estate was a party defendant.” Id. at 385, 318 So.2d at 251. See Coleman v. Kierbow, 212 Miss. 541, 54 So.2d 915 (1951).

The case before us is like Walling, not Finch. Although a constructive trust does not, at least in theory, alter the deed to make it void, it does not change the fact that the alleged interests of the appellants would still have to be withdrawn from the estate.

The decision of the trial court is therefore affirmed.

AFFIRMED.

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

      .Tit. 7, § 433, Code of Alabama 1940, Recompiled 1958:

        “Competency of parties as affected by interest. — In civil suit and proceedings, there must be no exclusion of any witness because he is a party, or interested in the issue tried, except that no person having a pecuniary interest in the result of the suit or proceeding shall be allowed to testify against the party to whom his interest is opposed, as to any transaction with, or statement by, the deceased person whose estate is interested in the result of the suit or proceeding, or when such deceased person, at the time of such transaction or statement, acted in any representative or fiduciary relation whatsoever to the party against whom such testimony is sought to be introduced, unless called to testify thereto by the party to whom such interest is opposed, or unless the testimony of such deceased person in relation to such transaction or statement is introduced in evidence by the party whose interest is opposed to that of the witness, or has been taken and is on file in the cause. No person who is an incompetent witness under this section shall make himself competent by transferring his interest to another.

      .P. M. Cannon died intestate on July 14, 1928, leaving the following survivors and heirs at law:
      1. His widow, Mary Elizabeth Cannon.
      2. A son, Joe C. Cannon, who died April 17, 1943, intestate leaving surviving him his widow, Elgie Cannon (appellant), sons Walter Col-burn Cannon (appellant) also known as Joe B. Cannon, Tony F. Cannon (appellant), Terry Wayne Cannon (appellant), and a daughter Patricia A. Cannon, now Patricia C. Shiflett (appellant).
      3. A daughter, Edna Cannon Kent (appel-lee), presently married to Raleigh B. Kent (ap-pellee).
      4. A son, Emmett S. Cannon, who died intestate on May 20, 1974, leaving surviving him his widow, Olera V. Cannon (appellee), and three daughters, Mary C. Gray (appellee), Virginia C. Fisher (appellee), and Barbara C. Thompson (appellee).
      5. A son, Walter B. Cannon (appellee, individually and as executor of Mary Elizabeth Cannon’s estate), whose present wife is Pauline Cannon (appellee).
      6. A daughter, Katherine Cannon, now Katherine Cannon Taylor Hardy (appellee).
      7. A son, Preston M. Cannon (appellee), whose present wife is Ida Lee Cannon (appel-lee).

      . A part of the suit which has not been appealed is a counterclaim filed by Preston, Katherine, and Ida Lee Cannon, the wife of Preston, who sought to have the trust declared void for lack of a proper purpose and to have the real estate vest directly in the beneficiaries of the trust.


text:
    LeBaron A. FOSTER v. Dr. Leon C. HAMRICK, as Chairman of the Alabama State Board of Medical Examiners.
    SC 2012.
    Supreme Court of Alabama.
    April 29, 1977.
    James H. Lackey, Mobile, for appellant.
    William J. Baxley, Atty. Gen., L. G. Kendrick, Asst. Atty. Gen., John T. Mooresmith, Sp. Asst. Atty. Gen., for appellee.
   ALMON, Justice.

On June 1, 1976, LeBaron A. Foster, M.D., pleaded guilty in the Circuit Court of Mobile County to one count of attempting to give away Phentermine Hydrochloride, and one count of attempting to give away Phenmetrazine Hydrochloride. Based on this conviction, the Alabama State Board of Medical Examiners summarily revoked, without a hearing, Foster’s Certificate of Qualification to practice medicine in the State of Alabama “pursuant to Tit. 46, § 277, Code of Alabama 1940 (Recomp.1958) (1972 Cum.Supp.)”

In Greenfield v. Hamrick, 341 So.2d 136 (Ala.1976), this court held that Tit. 46, § 277, is unconstitutional “insofar as it authorizes a revocation or suspension without notice and an opportunity to be heard.” This case is therefore reversed and remanded for a hearing as provided for by § 271 of Tit. 46, as amended by Act No. 161, 1975. We pretermit consideration of whether a medical doctor’s Certificate of Qualification can be revoked for an “attempt” under Tit. 14, § 42, Code of Alabama 1940, Recompiled 1958, rather than for giving away a controlled substance under Tit. 22, § 258(47) et seq., Code, supra.

REVERSED AND REMANDED.

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


author: BLOODWORTH, Justice.

text:
    Mary Mildred SIMPSON, as Executrix of the Estate of Robert H. Simpson, Deceased v. FIRST ALABAMA BANK OF MONTGOMERY, N.A., et al.
    SC 2069.
    Supreme Court of Alabama.
    April 29, 1977.
    Frank W. Riggs and Von G. Memory, Montgomery, for appellant.
    R. L. Ingalls and Charles N. Parnell, III, Montgomery, for appellee.
   BLOODWORTH, Justice.

Intervenor Mary Simpson appeals from the trial court’s denial of her petition to reform a deed. The appeal must be dismissed. Rule 54(b), Alabama Rules of Civil Procedure.

After securing the removal of the administration of the estate of Robert H. Simpson from the Probate Court of Montgomery County to Montgomery Circuit Court, plaintiffs, the First Alabama Bank of Montgomery, N.A., the Union Bank and Trust Company, Crescent Credit Corporation, and the Bank of Prattville, filed suit against Mary Simpson as Executrix of the Estate of Robert H. Simpson, her deceased husband. Plaintiffs alleged that they had filed claims against the estate totalling almost $30,000 and that the deceased was, at the time of his death, sole owner of a house and lot located on Vaughn Road in Montgomery. They seek, inter . alia, to have the court order the Executrix to sell the assets of the estate, including the Vaughn Road property, and to apply the proceeds to their claims.

Mary Simpson, individually, filed a petition of intervention in the pending action seeking to have the deed to the Vaughn Road property reformed. She alleged that it had been the intention of the parties that the property be conveyed to her and her husband as joint tenants with right of sur-vivorship.

The trial court granted her petition to intervene and held a hearing ore tenus on her petition for reformation of the deed. The trial court then entered an order denying her petition for reformation of the deed, and she appealed.

The trial court’s order disposed only of Mrs. Simpson’s petition for reformation and not of the claims of plaintiffs nor of their petition to sell the property to pay their claims.

We take note that this is a case involving multiple claims and multiple parties and that the order entered by the trial court adjudicated fewer than all the claims and the rights of fewer than all the parties. The trial court did not, as permitted by Rule 54(b), ARCP, expressly direct the entry of final judgment nor expressly determine that there was no just reason for delay. Consequently, the order is not a final order and will not support an appeal. Nelson-American Developers, Ltd., v. Enco Engineering Corp., 295 Ala. 185, 326 So.2d 103 (1976). See Wright & Miller, Federal Practice and Procedure: Civil § 2660.

The reason for the rule is noted in Nelson-American, supra :

“When there are multiple parties (as here) and multiple claims (as here) the rule requires such determination and direction for the reason that the order entered is interlocutory and ‘is subject to revision at any time before a judgment which adjudicates all the rights and liabilities of all the parties. Because it is subject to revision, it is not a final judgment and will not support an appeal.’

As we pointed out in Nelson-American, supra, and in Powell v. Republic National Life Insurance Co., 293 Ala. 101, 103, 300 So.2d 359 (1974):

“This holding is not to be construed as depriving appellant of a review of the order granting summary judgment by appeal from the final judgment ultimately entered in the cause nor as precluding the trial court from vacating its prior order and entering one in conformity with Rule 54(b). ...”

APPEAL DISMISSED.

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


author: JONES, Justice.

text:
    John Davis MANN v. Houston KEY et al.
    SC 2164.
    Supreme Court of Alabama.
    April 29, 1977.

      Ralph H. Ford and James P. Smith of Ford, Caldwell, Ford & Payne, Huntsville, for appellant.
    Loyd H. Little, Jr., for Cloud, Berry, Abies, Blanton & Tatum, Huntsville, for New Hope Town Council.
    Julian D. Butler, for Butler & Potter, Huntsville, for Kenneth Self.
   JONES, Justice.

This case involves a contest between two candidates for the office of mayor of the Town of New Hope.

In August of 1976, a primary was held to elect a mayor and Town Council for New Hope. There were three candidates for mayor, none of which received the required number of votes. A run-off was held between the top two vote-getters, John Davis Mann, the incumbent mayor, and Kenneth Self, an incumbent city councilman. The result was a tie vote.

On September 15, 1976, the Town Council met; Mann was absent and the remaining five councilmen present were J. C. Taylor, Houston Key, Self, Charles Swafford, and Johnny Cobb. The Council then attempted to elect a mayor pursuant to Tit. 37, § 34(54), Code, which states in pertinent part:

“If there should be a tie vote cast at any such run-off election then in such event the tie shall be decided by the municipal governing body. A vote for a particular candidate by a majority of the total membership of the governing body shall be necessary to decide the election in his favor. The municipal clerk shall file a copy of each certificate of election in the office of the judge of probate of the county in which the city or town is situated, and the judge shall file such certificate in the same manner that he files the declaration of the result of elections to county offices.

First, Mann was nominated and received the vote of three councilmen. Councilman Key voted against the election and Self abstained. Thus, Mann received only three votes. Next, Councilman Self was nominated, but the nomination died for lack of a second.

The Council met again on October 4, 1976, with all the members present. Mann presided as chairman of the meeting. Councilmen Brockway, Key, Paseur, Swaf-ford, and Turner were sworn into office as new members of the Council. Mann’s offer to be sworn in as mayor was refused. Houston Key pursuant to Tit. 37, § 428, Code, was selected as chairman pro-tempore and presided over the meeting. At the close of the meeting, Key announced that at the next meeting the present council would elect a mayor.

Mann’s petition for a temporary restraining order was granted by the trial Court prohibiting the Town Council from electing a new mayor. Kenneth Self intervened in the case and filed an answer to the complaint. The trial Judge then granted a motion to consolidate the hearing on the preliminary injunction with the trial on the merits. On November 5, the trial Court entered an order adverse to Mann, the incumbent mayor. Subsequently, our Court granted a motion for restoration of the injunction pending appeal, pursuant to Rule 8(b), ARAP.

Three issues are presented on appeal: (1) Whether the vote of three in favor of Mann was sufficient to elect him mayor. Stated differently, because Mann and Self themselves did not vote, does Tit. 37, § 34(54), Code, require a unanimous vote of the remaining four members of the Town Council? (2) If the votes of three Council members were insufficient to elect Mann mayor, does he hold over until his successor is elected? (3) If three votes were insufficient (whether or not Mann holds over), how does the Town Council proceed to fill the vacancy in the office of mayor?

It must be stated at the outset that municipal authority is delegated power, derived from the legislative power of the State. Mitchell v. City of Birmingham, 222 Ala. 389, 133 So. 13 (1931). Therefore, we are bound in our scope of review by the intent of the legislature.

Tit. 37, § 34(54), requires, in case of a tie vote, “ . . .a vote . . . by a majority of the total membership of the governing body . . . .” to break the tie. According to §§ 429(2) and 404 of Tit. 37, the governing body of a town the size of New Hope is composed of a mayor and five councilmen. Mann contends that the words “total membership” means the total number of members who are eligible to vote at the time the vote is taken; that he and Self were disqualified or ineligible to vote; and that, by reason of their disqualification, the “total membership” was reduced to four. We need not reach the question of whether Mann and Self were disqualified. Our decision is based upon the requirement of the statute that the vote must be by a “majority of the total membership of the governing body”.

The issue of what constitutes a majority of a city council was presented to the Court previously in Reese v. State, etc., 184 Ala. 36, 62 So. 847 (1913). In Reese, the statute in question stated in pertinent part:

“ ‘All elections of officers shall be made viva voce, and a concurrence of a majority of the whole number of elected members to the council shall be required.’ ” (Section 1192, Subsection 7, Code of Alabama 1907.)

In interpreting this section, the Reese Court stated:

“If [the legislature] had intended that a majority of a quorum or of the members constituting the council after a vacancy occurred should suffice, the Legislature would have said so; at least it would have omitted the words ‘the whole number of elected members to the council.’ We follow the plain language of the act.”

Appellant insists that, because the legislature. subsequently substituted the words “a majority of the total membership” for the previous words “a majority of the whole number of elected members”, Reese is distinguishable. We think not. If anything, the words “majority of the total membership” strengthen the rationale in Reese. This phrase would cover all members of the Council whether “elected” or “appointed.” Thus, we hold that on September 15, the New Hope Town Council failed to break the tie in the manner prescribed by Tit. 37, § 34(54). For a case interpreting a similar statutory provision, see Ezell v. City of Pascagoula, 240 So.2d 700 (Miss.1970).

Next, Mann contends that, assuming four votes were necessary for election, he nonetheless holds over pending the election of his successor. We agree with the trial Judge that Mann does not hold over. As stated in the final decree below:

“Plaintiff contends he should hold over, but there is no Alabama law allowing a mayor to hold over. The traditional language ‘ . . . shall hold office until his successor is elected and qualified’ is not used in the statutes relating to the office of the mayor.”
Moreover, § 428 of Tit. 37 provides: “In the event of a vacancy, from any cause, in the office of mayor, the president of the council shall fill the vacancy either from its own membership or from without the membership of the council.”

This provision for the filling of a vacancy in the office of mayor (here statutorily created through the operative effect of § 34(54)) further militates against a holdover by an incumbent mayor.

This brings us to the third and final issue: What is the procedure now to be followed by New Hope in electing a new mayor?

The trial Judge, in his final decree, answered the question thusly:

“Title 37, § 428, .Code of Alabama 1940 (Recomp. 1958) provides for the council to fill vacancies with an absolute minimum of statutory restriction. It further provides for a chairman pro-tempore to act for the mayor during his absence or disability. The council has such flexibility as to allow easy and expeditious filling of mayoral vacancies, thereby eliminating any practical need for holding over.”

It is our interpretation of this language that the trial Judge is of the opinion that a mayor may now be elected by a majority of the current council, i. e., three out of five. If the vacancy here in issue had not been created by the operative effect of another section of the Code (§ 34(54)), which itself provides for the method of election (majority of the total membership), we would be inclined to agree with the trial Court. To be sure, the most universally accepted common law rule, in the absence of a contrary statutory provision, is that a majority of any body constitutes a quorum for the transaction of business, and a majority of the quorum concurring is sufficient to take any particular action. Federal Trade Commission v. Flotill Products, Inc., 389 U.S. 179, 88 S.Ct. 401, 19 L.Ed.2d 398 (1967). But the vacancy with which we are here concerned was created by operation of a statute mandating a majority vote of the total membership, i. e., four out of six. Now, to fill that vacancy by the application of some other standard (three out of five) produces the anomaly of changing the rules in the middle of the contest.

Admittedly, the statute is silent as to the number or proportion of votes required to fill a vacancy, and thus we must interpret the statute to answer the inquiry. We have been cited to no authority, and we find none, to aid us in our search for this answer. But we are constrained to the conclusion that our interpretation of the “majority of the total membership” phrase in the tie-vote situation — which results in the creation of this vacancy now to be filled— must remain consistent; and that the votes of three out of four, which was insufficient to elect a mayor following the tie vote in the run-off election, cannot be resorted to in filling the vacancy thereby created.

One example will suffice to support our conclusion. Suppose, as here, the council voted three to one for Mann under § 34(54) —less than the required majority of the total membership (four of six). A vacancy was created as of the expiration of Mann’s old term of office — on October 4. Suppose further the council membership and its vote remained unchanged; is it reasonable to assume that the legislature intended the same three votes, insufficient to break the tie, suddenly to become sufficient to elect Mann as mayor for the new term?

Indeed, our affirmative answer to this question would lend credibility to the argument that this very vote, though insufficient to break the tie, was sufficient to fill the vacancy thereby created. In other words, if the council’s three to one vote failed to elect the incumbent mayor under § 34(54), it nonetheless had the legal effect of filling the vacancy by electing him under § 428. Surely, we must decline to accept such an interpretation as would render the legislative intent ludicrous. By the same force of reason we must reject the City’s contention that three votes, taken at a subsequent council meeting, are sufficient to fill this statutorily created vacancy.

Counsel for the City — because the members of the Town Council, and thus the votes, did change — contends for a different set of rules to allow three votes (three out of a total of five qualified council members) to elect a new mayor. The applicable rule must be palatable to both situations, and the only one that meets this test is the “majority of the total membership of the governing body” standard which we have already applied in creating the vacancy in the first instance. Therefore, we hold that the vacancy in the office of mayor of New Hope must be filled, whether “from its own membership or from without the membership of the council”, by a vote of the majority of the total membership of the governing body.

We are not to be understood by the latter holding as saying that in all events, under all circumstances, a vacancy can be filled only by a majority vote of the total membership. Our holding is limited to the peculiar facts in the instant case.

AFFIRMED AS MODIFIED.

BLOODWORTH, MADDOX, ALMON and EMBRY, JJ., concur.


text:
    Mrs. Ward H. FERRELL and Ward H. Ferrell, Jr. v. SHOMO LAND COMPANY, INC., a corporation.
    SC 2304.
    Supreme Court of Alabama.
    April 29, 1977.

      W. E. Garrett, Atmore, for appellants.
    Wendell C. Owens, Monroeville, for ap-pellee.
   BLOODWORTH, Justice.

The Ferrells appeal a judgment for Sho-mo Land Company in a boundary line dispute. We affirm.

Shomo Land Company, Inc., is holder of legal title to the SE Vi of the SW Vi, Section 32, Township 5 North, Range 4 East, in Monroe County. The disputed property is 9.45 acres of woodland in the northern portion of that forty. It lies between the north line of the forty and an old wire fence which runs east and west approximately 100 yards south of the north line. Mrs. Ward H. Ferrell and her son Ward H. Ferrell, Jr., own the land above the north line and claim the disputed property by adverse possession.

After “viewing” the disputed property, the trial judge held that the Ferrells failed to establish title by adverse possession to the old fence that the true boundary line between the lands of the parties is the government survey line. The Ferrells appeal.

One claiming title by adverse possession against the holder of legal title must, by clear and convincing evidence, show actual, clear, definite, positive, notorious, open, continuous, adverse^ and exclusive possession of a definite tract under a claim of right for the time prescribed by law. Knowles v. Golden Stream Fishing Club, Inc., 331 So.2d 253, 254 (Ala.1976).

On appeal, a judgment establishing a boundary will be affirmed if, under any reasonable aspect of the case, the decree is supported by credible evidence. The trial court will not be reversed unless there is a clear and decided preponderance of the evidence against its judgment. Edwards v. Farmer, 285 Ala. 118, 121, 229 So.2d 507 (1969).

We cannot say that the trial judge, who viewed the premises, erred in holding that the Ferrells did not satisfy their burden of proof. Neither can we say that the evidence which they offered to establish adverse possession is so clear and convincing as to clearly preponderate against the trial court’s conclusion.

AFFIRMED.

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


author: HOLMES, Judge.

text:
    Adelle MORRISSETTE et al. v. COMMERCIAL CREDIT CORPORATION, a corporation.
    Civ. 1049.
    Court of Civil Appeals of Alabama.
    April 20, 1977.

      Ronnie E. Keahey, Grove Hill, for appellants.
    Edward P. Turner, Jr., Chatom, for ap-pellee.
   HOLMES, Judge.

This is a detinue action for the recovery of a mobile home.

Commercial Credit Corporation, the plaintiff, obtained a judgment against the defendants. The defendants on appeal contend that the plaintiff, Commercial Credit Corporation, failed to prove the basic contract document was signed by the defendants or that the document, if signed by the defendants, was not a completed document at the time of their signature. We disagree and affirm.

It is necessary at the outset to give a brief history of the lawsuit. The original complaint was filed in May of 1971. To the complaint, the defendant filed an answer of non detinue and a special plea of non est factum. The matter was tried before the trial judge without a jury. This trial occurred in 1973. The judgment appealed from was entered in June 1976 and submitted to this court on the 4th of April 1977.

As noted above, it is the defendant’s contention that in view of his special plea of non est factum the plaintiff did not meet its burden of proof relative to the signing of the basic contract document and/or the signing of a completed or unaltered document.

Viewing the trial court’s decree with the attendant presumption of correctness, we find the judgment of the trial court is supported by the evidence.

One of the defendant-appellants testified as follows:

“Q Did you sign any papers on or about the 10th of October, 1966, when you made this purchase?
“A Yes, sir.
“Q Charles, I show you here a Retail Installment Contract that has been introduced in evidence and marked as Plaintiff’s Exhibit Number 1, and ask you if you can identify this?
“A It looks like our handwriting.
“Q Now, look here at Plaintiff’s Exhibit 1. Is your signature on that document?
“A Yes, sir.
“Q Is that the document that you signed down there on the occasion that we’re talking about?
“A I guess so.
“Q Is this your mother’s signature up above yours?
“A Right, That’s mine. There’s my mother’s.
“Q All right, Charles Morrissette, that’s your signature?
“A Yes, sir.
“Q Henry Lee Morrissette, is that your brother?
“A Yes, sir.
“Q Is that.his signature?
“A That’s right.
“Q And this Adelle Morrissette, is that your mother?
“A Yes, sir.
“Q And this Dorothy M. Slaughter signed below you, is that your sister?
“A That’s right.
“Q Is that her signature?
“A Yes, sir.
“Q All right, and you say this is the paper y’all signed that day?
“A I guess so, it looks like our signatures.
“MR. TURNER: All right, that’s all.”

This testimony can be viewed as direct evidence that the parties did in fact sign the questioned document. In any event, clearly an inference can be drawn from the quoted testimony that all parties did in fact sign the contract.

Direct evidence is not required by the law, and the trier of facts may indulge all reasonable inferences from the facts shown by the evidence, or which unbiased and rational minds can properly deduce from the facts proved. Southern Ry. Co. v. Gullatt, 158 Ala. 502, 48 So. 472 (1909). See also 9 Ala. Digest Evidence @=>595.

While we do not deem it necessary to this opinion to set out additional evidence regarding the signatures of the parties, we would further note that the testimony of an employee of plaintiff corporation is also supportive of the inference that the document was in fact signed.

Defendants additionally argue through able counsel that the document executed by the parties was not the completed document sued on by the plaintiff. They contend that the instrument was altered subsequent to its execution and that, consequently, they are not bound by the altered terms. We do not find the state of the record to be such that the trial court was bound to conclude that the document had in fact been altered. This is particularly true when viewing the record with the attendant presumption of correctness. See 2A Ala. Digest Appeal & Error @=1008(1).

Moreover, even assuming that the instrument was altered subsequent to its execution, the ruling of the trial court is sustainable. The record discloses that the defendants made at least one payment subsequent to their receipt of the “altered” contract. Payments on an altered instrument with knowledge of the alteration have been held sufficient to constitute ratification of that instrument by the payer. Green v. Harsh, 204 Ala. 520, 86 So. 392 (1920); Payne v. Long, 121 Ala. 385, 25 So. 780 (1899). See also Tit. 7A, § 3-407, Code of Alabama.

Finding no reversible error, this case is due to be and is affirmed.

AFFIRMED.

WRIGHT, P. J., and BRADLEY, J., concur.


author: WRIGHT, Presiding Judge.

text:
    FIRST SOUTHERN FEDERAL SAVINGS AND LOAN ASSOCIATION OF MOBILE, a corporation, etc. v. Warner A. BRITTON and Barbara Jean Britton.
    Civ. 1075.
    Court of Civil Appeals of Alabama.
    April 20, 1977.

      David R. Coley, III, Mobile, for appellant.
    Stephen R. Windom, Mobile, for appel-lees.
   WRIGHT, Presiding Judge.

We are confronted in this case with the validity vel non of a “due-on-sale” clause as found in modern real estate mortgages. The particular clause in the mortgage involved in this case is as follows:

“Fifth: Sale or Change in Possession of Property — The Mortgagor shall not sell or transfer title to the property described herein, nor allow or make any change in the possession, or character of possession, thereof, without the written approval of the Mortgagee, and any violation of this provision shall constitute a default hereunder, and, at the option of the Mortgagee, all amounts secured by this mortgage shall become due and payable. Should such written approval be granted, the Mortgagee shall have the right to make a reasonable charge for services in effecting the change of records reflecting the new ownership.”

This case arose under the following circumstances: Appellant loaned to the McDevitts in 1971 the sum of $14,700 at 8% interest. As security the McDevitts executed a mortgage upon real estate to appellant. In 1974 appellees Brittons entered into an agreement with the McDevitts for the purchase of the property, agreeing to assume payment of the balance due on the mortgage. When notified of the agreement and requested to approve the sale, appellant conditioned its approval. The condition imposed was as follows: Payment to it of ten points or per cent of the unpaid balance of the note ($1408.81) or payment of two points or per cent ($281.76) and an increase in the interest rate on the balance from 8% to 9%, and in either alternative, payment of a service charge of $35 for changing its records. The prevailing interest rate in the market for such loans at the time was 9%%. Unless appellees complied with one of the alternative conditions, appellant would withhold its consent and the sale would automatically constitute a default and accelerate the due date of the unpaid balance.

The Brittons paid the 10 points or $1408.81 plus the $35 service charge under protest. Approval of the sale and assumption of the mortgage was given by appellant. Demand was made for return of the money and refused. Suit was brought for recovery. The matter was presented to the court upon stipulation and affidavits. Judgment was for plaintiffs Brittons. Defendant First Southern Federal Savings and Loan Association of Mobile appealed.

In the beginning of our discussion of the contractual right of acceleration via a due-on-sale clause, we note that there are differences of treatment and conclusions as to application of such clause in the several jurisdictions which have considered the matter in recent years. 69 A.L.R.3d 713. However, we have found no jurisdiction which has declared such clause, as commonly used, to be invalid and void. Gunther v. White, 489 S.W.2d 529, 530 (Tenn.1973) and cases cited therein. The prevalent use of the ordinary due-on-sale clause is said to have arisen from the “ferocious competition” of the savings and loan associations for the home mortgage investment. Comment, Mortgages — A Catalogue and Critique on the Role of Equity in the Enforcement of Modern-Day “Due-on-Sale” Clauses, 26 Ark.L.Rev. 485 (1973). This cited article says further as follows:

“More recently, lenders are declaring defaults and accelerating upon failure of the borrower to obtain the written consent of the lender before the sale, transfer or further encumbrance of the mortgaged property. Under the terms of these written consent “due-on-sale” clauses, if the lender’s consent is not obtained, the mortgagor is deemed in default and the debt is declared immediately due and payable. As one might expect or have already experienced, a higher rate of interest can thereby be coerced from the mortgagor as a condition to the continued extension of credit or to the purchaser’s valid assumption of the original mortgage indebtedness.” 26 Ark.L.Rev. 485-86.

We do not contradict the statement that the prevalent use of the due-on-sale clause has come about since the beginning of the post-World War II housing boom and the concurrent inflationary spiral. Neither do we argue with the above-quoted statement that the clause has only recently been used as an instrument to coerce a mortgagor wishing to sell his property or a purchaser wishing to buy the equity of the mortgagor and assume his mortgage into paying points or agreeing to a higher rate of interest. However, we do not accept any inference that the due-on-sale clause is of recent origin, at least not in Alabama.

The Supreme Court of Alabama recognized both the validity and enforceability of a clause accelerating the maturity of the mortgage indebtedness upon a sale of the mortgaged property in the case of Tidwell v. Wittmeier, 150 Ala. 253, 43 So. 782 (1907). Such clause was upheld in that case in a court of equity against the equitable defense of an unreasonable condition in the mortgage. The court said, “This clause was put in the mortgage for a purpose and the parties thereto were bound by it. It is not within the power of this court to make contracts for parties.” 150 Ala. at 258, 43 So. at 783.

The court did not state nor speculate as to the purpose of the clause. Since the purpose of any mortgage is to obtain security for the loan and thereafter minimize the risks in repayment, it may be said that the purpose of all clauses in the mortgage is to protect the security of the mortgagee. The logical conclusion therefore is that any clause which does not unreasonably depart from such purpose is valid and enforceable. This appears to be a common thread in all the cases. In some courts the test is stated to be the reasonableness of the clause in relation to its effect upon the common law rights of alienation of property. Tucker v. Lassen Sav. & Loan Ass’n, 12 Cal.3d 629, 116 Cal.Rptr. 633, 526 P.2d 1169 (1974); Malouff v. Midland Fed. Sav. & Loan Ass’n, 181 Colo. 294, 509 P.2d 1240 (1973). In other courts the test is whether the invocation of the clause would be inequitable and unjust under the circumstances. That is, does the act of the mortgagor which triggers the invocation endanger the security or increase unanticipated risks? Tucker v. Pulaski Federal Sav. & Loan Ass’n, 252 Ark. 849, 481 S.W.2d 725 (1972); Clark v. Lachenmeier, 237 So.2d 583, (Fla.1970); Gunther v. White, supra.

Whether the propriety of acceleration of a mortgage through a due-on-sale clause is tested as a reasonable restraint on alienation of property or as a reasonable and equitable exercise of a contractual right in light of the purpose of the clause, does not strike us to be of great concern. We consider that the right of the mortgagee to exercise its option to accelerate payment because of a violation of a due-on-sale clause is to be recognized as is any bargained-for right in the contract. The purpose of the clause is to insure that the party originally bargained with and upon whose economic and financial situation and reputation money was loaned, credit extended and risk of repayment assumed, will remain as owner and in possession of the security. There can be no question but that the risk of waste, failure of maintenance and resultant deterioration in the property may be greatly increased by sale to one of whom the mortgagee knows nothing. The lending of money is a personal matter between lender and borrower. It cannot be said that the conditioning of the continuation of the relationship upon the retention of the ownership of the property standing as security for the debt is unreasonable or inequitable.

However, in this case, it is openly stated that the purpose of threatening to exercise the option of accelerating payment was to force an acceptance of an increase of the rate of interest for the remainder of the term of the mortgage. There is no indication that acceleration was due to the increase of risk or jeopardy to the security. The purpose of the clause was not being served by the threatened acceleration but the unrelated financial interest of the lender was the reason for the acceleration.

The terms of the clause give no indication that an interest of the mortgagee other than the protection of its security is to provide the reason for exercising the option to accelerate. We do not consider the right to exercise the option to be an arbitrary one. Such right is dependent upon the sale producing a threat to a legitimate interest of the mortgagee sought to be protected by the clause. Such legitimate interests are the protection and preserving of the security from waste and depreciation and the guarding against the moral risks or the reasonable possibility of having to resort to the security after default. Tucker v. Lassen Sav. & Loan Ass’n, supra.

We do not say that the mortgagee may not specifically contract for the option to accelerate in the event of sale unless the purchaser agrees to payment of increased interest up to the current rate at time of assumption of the unpaid mortgage balance. We do hold that such purpose may not be hidden behind a clause which is assumed to only provide protection for the security. If the clause is to be used to advance the financial interest of the lender through requirement of payment of a penalty or an increase in interest rate, such purpose must be openly stated and bargained for from the inception of the contract. If the condition for the approval of a sale may be hidden and be other than for the protection of the historical interest of the mortgagee, the mortgagor will be at the mercy of the mortgagee. It is therefore the opinion of this court that under the stipulation before the trial court, appellant had no justification for refusing consent to the transfer. The due-on-sale clause appearing in this mortgage may not be used as an instrument to require an increase in interest rate nor for collecting a penalty in order to prevent acceleration and foreclosure. We consider this holding not to be contrary to the decision of the Supreme Court in Tidwell v. Wittmeier, supra.

We find the second issue presented to have no bearing on the disposition of the appeal. We would further observe that the matter of standing of the plaintiffs, who were purchasers from the mortgagors and not parties to the contract, to bring the suit was not an issue in this case at any stage.

The judgment of the trial court is affirmed.

AFFIRMED.

BRADLEY and HOLMES, JJ., concur.