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

text:
    MOBILE PRESS REGISTER, INC., a corporation, et al. v. Jimmy FAULKNER.
    77-329.
    Supreme Court of Alabama.
    April 6, 1979.
    As Corrected On Denial of Rehearing May 11, 1979.

      C. B. Arendall, Jr., and Edward S. Sledge, III, Mobile, for appellants.
    Irvin J. Langford of Howell, Johnston, Langford, Finkbohner & Lawler, M. A. Marsal of Seale, Marsal & Seale, Mobile, and Owen, Ball & Wills, Bay Minette, for appellee.
   EMBRY, Justice.

This appeal, by Mobile Press Register, Inc., a corporation and its business manager and publisher, W. J. Hearin, is from a judgment entered against them on a jury verdict in favor of Jimmy Faulkner for the sum of $25,000 in a libel action. We reverse.

The issues for review are manifold. Among them are these crucial questions;

1. Was the issue of plaintiff Faulkner’s status as either a private person, public official or public figure, improperly submitted to the jury?

2. Assuming Faulkner’s status to be either of those enumerated in one above, did the trial court err in instructing the jury regarding the current law of libel applicable to the status of plaintiff and the facts of the case?.

We shall address these issues in light of the landmark decision of New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), its progeny, and the current law of libel in Alabama.

This action arose as a result of the publication of four news articles by the Mobile Press Register. The articles were published between 29 May 1975 and 18 December 1975. In essence they stated: (1) Faulkner, when stepping down as Chairman of North Baldwin County Hospital Board, gave public indication that he was leaving the hospital in good financial condition when in fact a fiscal crisis was occurring; (2) Faulkner, while President of Bay Minette Mills, Inc., had promised investors that its bonds were a good investment, but then refused to pay off the bonds and threatened to discontinue paying interest if bondholders attempted to convert their bonds to common stock; (3) Faulkner, as Chairman of the Bay Minette Industrial Dévelopment Board, had a conflict of interest in his business and public enterprises, made a false oath that he had no interest as stockholder, director, etc., and had no intention of acquiring such interest in Den-Tal-Ez Manufacturing Co., Inc., but after the proceeds of a bond issue of the Board in the amount of 2.5 million dollars went to Den-Tal-Ez, Faulkner was named a director of that company; and (4) Faulkner, while a legislator in the early 1950’s had sponsored a presently unpopular captive county road bill for Baldwin County over objection of the County Commission.

On the basis of these publications Faulkner filed a four count complaint alleging that each article libeled him by the meaning conveyed to the reader by the innuendo alleged in, counts one, two and four and by means of the words alone contained in the third article. He alleged damage to character, that he was held up to public hatred, contempt and ridicule, together with monetary losses. The defendants answered, denying they had libeled Faulkner and asserting four additional defenses: (1) failure of Faulkner’s complaint to state a claim upon which relief could be granted; (2) truth; (3) fair comment; and (4) qualified privilege. After the jury returned a verdict for Faulkner, defendants moved for judgment notwithstanding the verdict and in the alternative for a new trial. The trial court denied their motions and then this appeal was perfected.

I

We can dispose of this appeal of a libel action, in which punitive and compensatory damages are claimed, by deciding the threshold issue of whether Faulkner was a public official or public or private figure. This issue must be resolved first because the manner of its resolution determines what elements of proof are necessary for recovery. New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), and its progeny mandate that no public figure may recover compensatory or punitive damages for libel unless actual malice as defined in Sullivan is proved: a publication made with actual knowledge of its falsity or made with reckless disregard of its truth or falsity. If plaintiff be a private figure, he or she need not prove Sullivan malice unless punitive damages are claimed. Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). Consequently, whether plaintiff must prove Sullivan malice in addition to the other elements of libel depends on determination of his status, as a matter of law, which must be made by the trial court. Rosenblatt v. Baer, 383 U.S. 75, 86 S.Ct. 669, 15 L.Ed.2d 597 (1966); Browning v. Birmingham News, 348 So.2d 455 (Ala.1977). In the trial of a libel action, at the close of all the? evidence, the trial court must first determine as a matter of law whether the plaintiff is a public official or a public or private figure. Without making this determination the trial court cannot know how to properly instruct the jury.

In this case the trial court charged the jury that it was to determine from the evidence whether Jimmy Faulkner was a public figure. Defendants timely objected to this instruction. This erroneous instruction alone requires reversal. However, we will inquire further into the record in order to determine whether, as a matter of law, the plaintiff is, in fact, a public figure.

The United States Supreme Court has defined public figures to be:

“ * * * [those who are] involved in the resolution of important public questions or, by reason of their fame, shape events in areas of concern to society at large.” ■ Curtis Publishing Co. v. Butts, supra, 388 U.S. at 164, 87 S.Ct. 1975 at 1996.
“ * * * Those who, by reason of the notoriety of their achievements or the vigor and success with which they seek the public’s attention, are properly classed as public figures * * *
“ * * * [those who] have assumed roles of especial prominence in the affairs of society. Some occupy positions of such persuasive power and influence that they are deemed public figures for all purposes. More commonly, those classed as public figures have thrust themselves to the forefront of particular public controversies in order to influence the resolution of the issues involved. In either event, they invite attention and comment.” Gertz v. Robert Welch, Inc., supra, 418 U.S. at 342, 345, 94 S.Ct. at 3008-3009.

Thus the threshold issue is resolved by an examination of the plaintiff’s standing in society and his activity in the public arena.

An examination of the evidence in this case reveals that few men have obtained the prominence in their community as has Jimmy Faulkner. Throughout his life he has maintained an active role in civic and political activities. His career in public life began approximately 40 years ago when he was elected Mayor of the City of Bay Minette. He was later elected a delegate to the Democratic National Convention and in 1950 he was elected to the State Senate where, in his first year, he was named Outstanding Freshman Senator. He continued to serve until 1954 when he then unsuccessfully sought to be elected Governor. In 1958, he again ran unsuccessfully for Governor.

For over 40 years, he has been and still is Secretary-Treasurer of the Baldwin County Democratic Executive Committee. He became a member of the State Democratic Executive Committee in the early 1950’s. He was a stand-in speaker for former Governor Wallace in a Wallace campaign for nomination as the Democratic Party candidate for President of the United States during the latter’s convalescence from gunshot wounds, and spoke on Wallace’s behalf throughout the South and Midwest. He also played a major role in the 1972 Democratic Party National Convention.

Plaintiff was appointed Trustee of the Alabama Girls Industrial School in 1948. In 1971, he was appointed to the State of Alabama Industrial Development Board and has served as its Vice Chairman. He has been a Director of the Alabama State Chamber of Commerce since 1947. He has been a member of the Board of the Alabama Cancer Society for some 12 or more years and is Chairman of the Board of Trustees of Alabama Christian College. He has been on the Gulf States Seafood Commission. Faulkner is on governmental boards too numerous to list. He testified he knows of no other person in Baldwin County who has served on, or is still serving on, as many governmental boards as he. He served as Chairman of the Junior College Committee, regarding location in the City of Bay Minette of what was then called Yancey State Junior College. This public institution has since been renamed in his honor and is now known as James F. Faulkner State Junior College.

Faulkner has owned several newspapers and radio stations. He continues to write editorials for The Baldwin County Times, as well as occasional news articles, and has served as President of the Alabama Press Association and has been named “Journalist of the Year.” Faulkner has made public addresses on many different subjects at many different functions and continued to do so even during the year of the trial of this action: 1977.

Faulkner’s activities in the public arena both past and present are so diverse that any one of them of itself possibly could cause him to be a public figure. The following activities relevant to Faulkner’s career have been held to be determinative factors in other jurisdictions regarding public figure status: conducting a radio program, holding press conferences, making public appearances, being outspoken on subjects of public interest, Williams v. Trust Co. of Georgia, 140 Ga.App. 49, 230 S.E. 45 (1976); being an unsuccessful candidate for political office, Perkins v. Mississippi Publishers Corp., 241 So.2d 139 (Miss.1970); being chairman of a City Republican Committee, News-Journal Company v. Gallagher, 233 A.2d 166 (Del.1967); being chairman of a campaign committee, Thompson v. Evening Star Newspaper Company, 129 U.S.App.D.C. 299, 394 F.2d 774 (1968), cert. den. 393 U.S. 884, 89 S.Ct. 194, 21 L.Ed.2d 160; and being a newspaper publisher and attempting to influence public opinion through editorials, Gibson v. Maloney, 231 So.2d 823 (Fla.1970). For further examples, see Adams v. Frontier Broadcasting Company, 555 P.2d 556, 560 n. 4 (Wyo.1976).

The key to resolution of this issue lies not only in each individual factor, but also in their sum. They are component parts as well as indicators of Jimmy Faulkner’s fame. Public figures are “numerous and include artists, athletes, business people,’ dilettantes, anyone who is famous or infamous because of who he is or what he has done.” (emphasis added). Cepeda v. Cowles Magazines and Broadcasting, Inc., 392 F.2d 417, 419 (9th Cir. 1968); Rosanova v. Playboy Enterprises, Inc., 411 F.Supp. 440 (S.D.Ga.1976).

Simply put, Jimmy Faulkner is a famed figure throughout Alabama. There can be no question but that Jimmy Faulkner was, and is, a public figure. He occupies a position of such power and influence that he must be deemed a public figure for all purposes. Even had we not so found, we would hold he is a public figure with regard to the published news articles. Of the allegedly libelous articles, one referred to activity of Faulkner while he was a public official. The other three articles commented on his conduct while chairman of: a public hospital governing board; a public industrial development board; and a nonprofit industrial development board which sold bonds to the public. One who is not a public figure for all purposes may be a public figure for limited purposes. Gertz v. Robert Welch, Inc., supra, 418 U.S. at 351, 94 S.Ct. 2997. In this case Faulkner’s status and activity make him a public figure both by virtue of his fame for who he is and what he has done as well as regards the published news articles.

Faulkner contends that even if this were once true, he no longer remains a public figure for any purpose. We disagree. The fact that he has not held or run for public office since 1958 does not necessarily lead to the conclusion that he has lost his public figure status. He has since held public and private positions of influence and power and has thrust himself into public controversies to influence their outcome. The mere lapse of time is not decisive in any event. The press is entitled to make historical comment on past controversial issues involving persons who were public figures at the time. See Time, Inc. v. Johnston, 448 F.2d 378 (4th Cir. 1971); Meeropol v. Nizer, 381 F.Supp. 29 (S.D.N.Y.1974). The activities of Faulkner discussed in the articles were matters in which Faulkner was involved, were of public interest, were controversial subjects and therefore were legitimate topics for comment. The article about the captive county road legislation concerned the actions of a State Senator while in office and remains open for future debate.

Nor do we agree with Faulkner’s contention that he is not a public figure because his membership on various city and county boards is nonremunerative. See Gertz v. Robert Welch, Inc., supra, 418 U.S. at 351-52, 94 S.Ct. 2997. His status as a public figure did not arise solely from his membership on various governing boards. Most probably his appointment to the boards was a result of his prominence. However, even if his status depended only on these memberships, he would, in this case, be a public figure. Three of the published articles were directly concerned with the functioning of these boards. Clearly, Faulkner was a public figure in controversies regarding them.

II

Since we hold Faulkner to be a public figure as a matter of law we must reverse for that reason alone. Because Faulkner was a public figure, additional proof was required for recovery. We assume arguen-do, without so holding, that the articles were false and defamatory of Faulkner. We will not address the issue of whether or not defendants would have prevailed under their fair comment doctrine defense. See E. Seelman, Law of Libel and Slander in the State of New York, Vol. 1, pp. 282-334 (1964); 50 Am.Jur.2d, Libel and Slander §§ 289-295 (1970).

The trial court submitted the issue of whether Faulkner was a public figure to the jury and charged the jury that if it determined Faulkner was a public figure, he could only recover upon proof of malice. Concerning malice, the trial court gave the jury the following written instruction requested by Faulkner and objected to by appellants:

“The Court charges the jury that actual or express malice may be shown by evidence of previous ill will, or hostility, or threats, or rivalry, or other actions, or former libels or slanders emanating from the defendants, or by the violence of the defendant’s language, or the mode and extent of publication, including the recklessness of the publication.”

This instruction is erroneous in two respects. First, it fails to contain the constitutional requirement that the jury must find by clear and convincing evidence that the articles were published with Sullivan malice, that is, with actual knowledge of their falsity or with reckless disregard of their truth or falsity. Second, the instruction indicates that the additional burden required in the case of a public official or figure is met upon proof that the articles were published with ill will or evil intent.

The trial court was apparently confused about the multisense term “malice.” See Black’s Law Dictionary, pp. 1109-10 (4th ed. 1951). Although the United States Supreme Court has used the term “actual malice,” it is clear from Sullivan and it progeny that the term as used by that Court is synonymous with, and only with, “knowledge of falsity or reckless disregard of truth or falsity.” Rosenblatt v. Baer, 383 U.S. 75, 86 S.Ct. 669, 15 L.Ed.2d 597 (1965); Washington Post Co. v. Keogh, 125 U.S.App.D.C. 32, 365 F.2d 965, 20 A.L.R.3d 972 (1966). This is because a false and defamatory publication may be made purposefully to do harm, yet if it is made without knowledge of its falsity and without reckless disregard of its truth or falsity, the defamed public figure may not recover. The rationale for this rule was stated in Garrison v. State of Louisiana, 379 U.S. 64, 73, 85 S.Ct. 209, 215, 13 L.Ed.2d 125 (1964):

“ * * * even where the utterance is false, the great principles of the Constitution which secure freedom of expression in this area preclude attaching adverse consequences to any except the knowing or reckless falsehood. Debate on public issues will not be uninhibited if the speaker must run the risk that it will be proved in court that he spoke out of hatred; even if he did speak out of hatred, utterances honestly believed contribute to the free interchange of ideas and the ascertainment of truth. * * ”

Accordingly, we hold the trial court committed reversible error in failing to properly instruct the jury concerning Sulli van malice. Although not necessary for reversal we note the trial court also erred in giving, over objection of appellants, instructions submitted by Faulkner which indicated that if they found that the articles exposed Faulkner to public ridicule or contempt, the law would presume damages. These instructions were erroneous because, absent a finding of Sullivan malice, damages may not be presumed. Gertz v. Robert Welch, Inc., supra, 418 U.S. at 347-349, 94 S.Ct. 2997; Bryan v. Brown, supra, at 583.

We now proceed to consider the contention of the appellants that their motion for judgment notwithstanding the verdict should have been granted because the verdict was unsupported by clear and convincing evidence showing the publication was made with Sullivan malice. Careful examination of the record by this court substantiates this contention. There is no semblance of clear and convincing evidence showing appellant, Mobile Press Register, Inc., published the articles knowing they were false or' with reckless disregard of whether they were false or not.

Our decision being as it is, we pretermit discussion of the numerous other claimed errors which occurred during the trial of this case. The judgment below as to each defendant is reversed and this action remanded.

REVERSED AND REMANDED.

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

JONES, J., concurs specially.

SHORES, J., not sitting.

BEATTY, J., concurs in result.

JONES, Justice

(concurring specially):

I concur in the holding of the majority. The “public figure” issue is relevant only to the claim of compensatory damages — as to the punitive damages, it is immaterial whether the plaintiff is a public or private figure.

ON REHEARING

EMBRY, Justice.

Opinion corrected. Application for Rehearing overruled.

MADDOX, Justice.

On rehearing, I concur that the application for rehearing should be overruled, because the trial judge incorrectly charged the jury on Sullivan malice; however, I believe that Herbert v. Lando, - U.S. -, 99 S.Ct. 1635, 60 L.Ed.2d 115 (1979), which was released after this Court released the original opinion in this case, is authority for the proposition that even though hostility, ill will and evil intent are not the equivalent of Sullivan malice, proof of them could be relevant and material on the issue of Sullivan malice.

JONES, Justice.

On rehearing, I extend the remarks expressed in my specially concurring opinion to include the following: While hostility, ill will, and evil intent are not the equivalent of Sullivan malice, proof of these elements, under appropriate circumstances, may be admissible on the issue of Sullivan malice. Herbert v. Lando, - U.S. -, 99 S.Ct. 1635, 60 L.Ed.2d 115 (1979).

APPENDIX A

May 29, 1975

Many residents turning to other medical facilities

Bay Minette Infirmary in trouble

By RUSTY REIN and SANDRA BAXLEY Press Staff Reporters

BAY MINETTE, Ala. — The Bay Minette Infirmary is in serious trouble and needs help.

Though optimism surrounded the announcement of plans for the 55-bed facility in 1967, many north .Baldwin County residents are now turning to other hospitals in southwest Alabama for medical care.

A study by The Mobile Press of hospital financial records and minutes of the North Baldwin County Hospital Board (a public, tax-supported corporation which operates the facility) shows:

Consistent financial losses throughout the five-year history of the hospital.

Repeated requests by the hospital’s auditor to improve bookkeeping or risk losing patients.

A drastic drop in patients from an average daily census of 40.2 in October, 1972, to 17 last month.

Inability of the board to satisfy the five doctors in the area with hospital conditions.

Refusal by Blue Cross of Alabama to pay $2,000 in requested reimbursements because of “lack of supporting data” and “weakness in internal control and operating procedures.”

Regular turnover of hospital administrators (three in the five-year history of the facility).

Refusal by two of the five physicians to admit patients in the hospital.

Allegations by physicians that the board is not working for the betterment of the hospital.

An apparently illegal meeting by the Baldwin County Commission which resulted in the appropriation of a $50,000 grant to the hospital.

At least one occasion when some hospital bills were not paid for at least a six-month period.

Serious consideration of constructing a 98-bed nursing home despite warnings by the hospital’s administrator of a financial crisis.

A hospital inspection report which noted a large number of incomplete medical records.

Low morale among hospital employes which included a threat of a walkout by the Inhalation Therapy Department.

An offer by the hospital’s certified public accountant, after three years of recommendations about haphazard bookkeeping, to train employes working with accounts or insurance claims.

A warning by the same accountant that almost 15 per cent of the hospital’s insurance claims were taking more than 120 days to process instead of the normal 30 days.

The North Baldwin County Hospital Board was incorporated on Oct. 24, 1967, by James H. Faulkner Sr., Charles A. Bod-den and James A. Wurst with the 'consent of the Baldwin County Commission.

Since then, a two-mill property tax levied in the north part of Baldwin County has resulted in about $300,000 given the board for operation of the hospital.

Regular grants have also been given the hospital by county, state and federal governments.

Faulkner served as chairman of the hospital board until December, 1973, when his term expired. Faulkner wa,s succeeded in the chairmanship by his long-time associate, Bodden. Bodden has since resigned from the board and was replaced last week as chairman by Albert Thompson of Bay Min-ette.

When Faulkner left the board he gave public indication that he was leaving the hospital in good financial condition but board minutes show a fiscal crisis was occurring at the time of his departure.

On Dec. 4, 1973, at the meeting when Faulkner announced he was leaving the hospital board, Clifford Wood, the hospital’s certified public accountant, stated the hospital was in “serious financial trouble.”

Minutes show the board decided to ask the Baldwin County Commission for financial assistance at a meeting the same day in the doctors’ lounge of the hospital. A $50,000 grant was approved by the commission in an apparent illegal executive session, according to hospital board minutes.

“The County Commission came to the hospital and met with the committee,” the minutes said, “Mr. Thompson was the Hospital spokesman and explained our financial crisis to the commissioners.

“The Commissioners went into executive session to discuss the matter. Later the committee members were invited back into the meeting and were advised that the hospital was approved for a grant of $50,000.

“The Commission also announced that Mr. C. A. Bodden was reappointed for another term on the hospital Board. Two new appointees to the hospital Board were Mr. Charles Strong and Mr. Lauren Jones.” (referring to Laurens Jones)

Alabama’s Public Meetings Laws forbid executive sessions or secret meetings v. public boards or commissions except “when the character or good name of a woman or man is involved.” The law provides a fine of between $10 and $500 for violation of the statute.

When contacted today by The Mobile Press, Thompson agreed that the facts in the story are accurate reports of the situation, but said he wished attention had been given to the hospital throughout its short life.

“We do have problems,” he said, “but there are a lot of good things you haven’t mentioned.

“You haven’t mentioned the number of people who have been helped, or how hard members of the board and volunteer groups have worked.”

Thompson said all the problems of the hospital would be solved if “more doctors would send more patients. We just don’t have enough patients to pay for the services we need to offer.”

Financial losses and decreases in the patient load at the hospital have resulted in serious fiscal problems at the hospital during the last two years.

Minutes show the hospital suffered a loss of $28,749.20 from Oct. 1, 1973, to March 31, 1974.

Recent financial records show the hospital has lost another $32,178.57 from Oct. 1, 1974, to April 30 of this year. The records show $17,480.90 of the loss came last month when the hospital recorded its lowest average daily census (17) in its history.

These disheartening figures come after the first year of the hospital’s history in which a profit was made — 1974.

In 1974 the hospital made $35,436.14, which still left it with a fund balance deficit of $157,468.57.

In 1971, first year of operation, it lost $99,465.74.

In 1972 it lost $22,912.62.

In 1973 it lost $39,425.30.

Hospital Board secretary Jones said the reason it was operating at a loss was because of the low patient load.

Everyone agrees on the fact.

In the 1971 audit, accountant Clifford Wood warned “Over 100 patients’ bills contained errors. People were very outspoken about this. Continued loss of confidence and respect could cause the people to go elsewhere. This would mean financial disaster.”

Disharmony among the board, physicians and employes in the past two years apparently led to the recent resignation of Burt Davidson, the third hospital administrator in the history of the facility.

When contacted by The Mobile Press for comment, Davidson said that he did not feel it would do any good to comment.

One of the hospital board members (who has requested to remain unidentified) told The Mobile Press that the “state of confusion” in which the hospital has been since its inception has come from “a lack of know-how on the parts of all concerned.”

The member said he hopes the recent appointment of a doctor (Dr. George Halli-day) to the board will make the physicians more content and will help things run more smoothly.

He said it was not employe dissatisfaction with Davidson which led to his resignation so much as doctor dissatisfaction.

The members said the board is now trying to hire an administrator trained in a school in Birmingham.

The board member said, in reference to the construction of a nursing home addition, “We were hoping it might improve conditions but the doctors wouldn’t agree.”

Present members of the hospital board, in addition to Thompson, Jones, Strong and Dr. Halliday, are Doris Hodgson, John McMillan Sr., Luella Ferguson, Dick Johnson and Robert Wills. Mrs. Lee Mitchell serves as an ex officio member and publicity director.

Though minutes of board meetings show continued doctor dissatisfaction, physicians in the town are apparently mollified by Dr. Halliday’s appointment to the board.

Dr. David Davis is not presently admitting patients to the hospital, but a spokesman said yesterday he will rejoin the hospital staff in mid-summer.

Since February he has referred patients to Mobile or to another doctor if they required hospitalization, according to his spokesman.

Dr. Tyler Nichols would not discuss specifics at the hospital, saying he had left the hospital staff for “personal reasons” but was back on it again now.

He said he was not completely satisfied, but that complete satisfaction would be “stagnation.”

Unless something is done about the current state of the Bay Minette Infirmary, the future of hospital service to North Baldwin County residents remains uncertain.

June 12, 1975

Invested in Baldwin firm

Bondholders still awaiting repayment

EDITOR’S NOTE — This is the first article in a two-part series dealing with industrial financing in Baldwin County.

By SANDRA BAXLEY and RUSTY REIN Press Staff Reporters

BAY MINETTE, Ala — Though three and one-half years past due, some Bay Minette Mills, Inc., bondholders are still awaiting repayment of bonds purchased more than 13 years ago.

At that time, $141,600 in bonds were brought by 178 Bay Slacks employes, businessmen and community leaders who were relying on promises by Bay Minette Mills president James H. Faulkner that the bonds would be a good investment.

Bay Minette Mills had been described as a type of civic corporation interested in promoting industry in Baldwin County.

One direction in which Bay Minette Mills turned to help Baldwin County industry was Bay Slacks.

The bonds were to be redeemed in 1971 according to large type on the cover of the bonds. Smaller type on the inside stated Bay Minette Mills could at that time redeem the bonds for common stock in the corporation instead of for cash.

But when the year arrived in which the bonds were to be paid, Faulkner sent bondholders a two-page letter asking them not to cash in their bonds or exchange them for common stock in the corporation.

What he wanted them to do was just to sit tight.

Not many people had read the small type saying bonds could be exchanged for common stock instead of money if Bay Minette Mills so desired.

And not many of those who had read it remembered it.

Therefore, there were a lot of disgruntled people around, according to bondholders.

There wasn’t much they could do, however, because the letter from Faulkner threatened to stop paying the six per cent interest the bonds had been paying if bondholders demanded bonds be exchanged for common stock.

Here’s how the letter put it:

“Even though the bonds state they may be transferred for common stock, . the directors voted unanimously to ask you to please continue holding your bonds in their present status. By doing this, it will assure, if nothing unforeseen happens, that you will continue to receive six per cent interest each year.

“To transfer the bonds to common stock,” the letter continues, “will make it impossible for your corporation (Bay Minette Mills) to continue paying this interest rate because it will change from an interest expense to a dividend, and we’ll be forced to pay taxes on it, while at present we are tax exempt on bonds.

“Although we have been able to pay stockholders six per cent in the past, there is no assurance that this can be continued in the future. It cannot, if the bonds are transferred to common stock.”

Faulkner’s letter did hold out a glimmer of hope, however.

He said officers of Bay Minette Mills had been in contact with the parent company of Bay Slacks, BVD and the Glen Alden Company of New York, and had asked them to redeem “all” the bonds.

The letter from Faulkner to the bondholders stated:

“Your officers have worked diligently during the past several months attempting to get the parent company of Bay Slacks, BVD and the Glen Alden Company of New York City, to buy the building and land where they are now located, redeem all of the stock and bonds and at the same time expand the building (which they are interested in doing). Although they have indicated an interest in doing this, they have not taken the step as of this time. We are hopeful this will happen.”

But a letter Faulkner had written to BVD official Darryl Chason some 16 days before the bondholder letter did not ask BVD to buy “all” the bonds.

It only asked him to buy the $22,400 in bonds held by employes or widows of employes.

The 75 owners of the other $119,200 would be asked to hold their bonds for an indefinite time.

Faulkner wrote Chason:

“If your company could buy these bonds (of employes and widows of employes) from the 103 local owners, it would reduce the holders to only 75. We would ask the 75 who own $119,200 to continue holding their bonds for an indefinite period. Since most of these are businessmen they realize the importance of the operation of Bay Slacks. I am confident most of them will be agreeable.

“If you can do this it will greatly relieve local pressure and be excellent public relations on the part of your fine company. It means you would own $22,400 more equity in the local property which is worth twice the original investment.

“I am enclosing a complete list of the bondholders and the 103 have a cross mark to the left of their names.”

Earlier in Faulkner’s letter to Chason he had told Chason why Bay Minette Mills could not pay off the bonds.

“Of course, we do not have any cash to pay off these bonds,” the letter stated.

More than three years have passed and bondholders have still not received any communication from Bay Minette Mills that the situation has changed or if cash is available to pay off the bonds.

As of Dec. 30, 1971, officers of Bay Minette Mills were Faulkner, Bruce Beveridge, C. A. Bodden and Allan C. Mott.

Serving with these four as directors of the corporation were J. T. Bradley Jr., Emmanuel Davidson and Albert Thompson.

such as the one above, which were issued by Bay Minette Mills, Inc., more than 13 years ago today remain unpaid, despite being three and one-half years past due. In a letter to bondholders written at the time the bonds matured in 1971, corporation president James H. Faulkner said he did not want the bondholders to exercise either of the two actions available — getting cash for the face value of the bonds or converting them to common stock in the corporation.

June 13, 1975

Records of panel are cited

Baldwin board’s deals in conflict?

EDITOR’S NOTE — This is the second of two articles dealing with Baldwin County industrial financing. The first article appeared in yesterday’s issue of The Mobile Press.

By RUSTY REIN and SANDRA BAXLEY Press Staff Reporters

BAY MINETTE, Ala. — The City of Bay Minette Industrial Development Board has provided millions of dollars to finance new and expanding industries in north Baldwin County.

The board, a public panel appointed by the Bay Minette City Commission, decides which industries qualify for tax-exempt, industrial board financing.

Records of the board show several instances in which board members are involved in possible conflicts of interest.

One of the board’s largest bond issues— $2.5 million — went to Den-Tal-Ez Manufacturing Co., Inc., a subsidiary of Den-Tal-Ez, Inc., in'Des Moines, Iowa.

Board records include a notarized statement by all nine members of the industrial board which pledges none of the members have an interest “as stockholder, officer, director, partner, or otherwise” in either Den-Tal-Ez Manufacturing Co., Inc., or Den-Tal-Ez, Inc.

The statement also contains a pledge that board members had “no plans or intention to acquire any such interest (in Den-Tal-Ez) during his tenure as a member” of the industrial board.

Among those signing the statement was industrial board chairman James H. Faulkner. The statement was dated May 8, 1972 — the same date the lease agreement for the bond issue was signed.

About three months later, in August, 1972, Den-Tal-Ez president Hal Pearson announced that Faulkner had been named to the board of directors of Den-Tal-Ez, Inc.

Another Bay Minette Industrial Development Board project involved financing totaling $720,000 between the board and Southern Aluminum Castings Co.

Baldwin County Probate Court records show Norborne C. Stone, a member of the industrial board, was one of the incorpora-tors of Southern Aluminum Castings Co.

The financing for Southern Aluminum Castings Co. was done in two parts, according to board records. The first part was for $650,000 and the second part was for $70,000.

The second loan was financed through the First National Bank of Bay Minette, according to a letter in board records which was written in May, 1974. The letter was signed by bank president Marvin Kelly, who is also a member of the industrial board.

Another board record, a letter dated Sept. 19, 1968, illustrated a procedure for a company to follow if it wishes to work with the industrial board.

The letter was written to E. E. Davis of Meadow Sportswear, Inc., in New York and was from Thornton, Farish and Gauntt, Inc., a nationally known Alabama securities firm.

Meadow Sportswear owned a plant in Bay Minette which was leased to it by Bay Minette Mills, Inc. Faulkner, C. A. Bodden, J. B. Beveridge and Emmanuel Davidson, all members of the industrial board, are also directors of Bay Minette Mills, Inc.

“This will confirm the several conversations with Mr. Faulkner and our conversation this morning,” the letter said.

“As we understand,” the letter continued, “you are considering an expansion of the existing Bay Minette plant which is currently being leased by you from Bay Minette Mills, a local civic type corporation, for $1,300 per month.

“As reported to you, we recently completed a $2,000,000 issue in Bay Minette through the utilization of the Industrial Development Board of the City of Bay Minette, of which Mr. Faulkner is chairman.

The letter then discussed two possible expansion approaches which Meadow Sportswear was contemplating. One possibility was to obtain an industrial board bond issue for $250,000 for a new facility. The second possibility was to obtain a larger bond issue to buy the existing facility from Bay Minette Mills as well as construct an expanded facility.

Thornton, Farish and Gauntt said there was no question of legality on the first approach, just mechanical procedures. “We would have to either acquire the land or get a long term lease in favor of the Industrial Development Board,” the letter said.

“As to approach No. 2,” the letter continued, “It will be necessary to have a showing that this acquisition and expansion will result in increased job opportunities.

“As you can see, the Alabama law is very flexible and I can state that in Bay Minette we can pretty well ‘tailor make’ this to suit your needs, also no approval of any court, election, State All Board, etc. is required. All (underlined) approval is done in one meeting with Mr. Faulkner and the Board.”

The Mobile Press Register

Baldwin County Edition

Thursday, December 18, 1975

‘Captive county’ action is pushed

By MARTHA M. SIMMONS Press Register Reporter

BAY MINETTE, ALA. — Local legislators met with the Baldwin County Commission Tuesday to explain their motives for setting up a committee to study Baldwin’s “captive county” road program, and to urge commissioners to move ahead with the project.

Senator L. D. “Dick” Owen and Representative John McMillan were accompanied to the meeting by study committee members Buck Day, who is chairman, George Kaiser and P. M. Walker. They asked for the commission’s opinions and help in getting the project started.

“Y’all are late in asking,” Commissioner Bill McMillan commented, adding the legislators had neglected to inform the commission of their intentions. He said he was “hurt” that the commission knew nothing about the legislators’ intent to form the committee until it was reported in the newspaper.

Rep. McMillan admitted the resolution to do a study had been conceived in the final days of the last legislative session. He said it was modeled after a bill being sponsored for another captive county questioning the value of the state handling all phases of the captive county’s road building and maintenance. He said he and other local legislators thought it was a good idea for Baldwin since so many citizens and officials here are dissatisfied with the present system.

Since there was not enough time to meet the public notification requirements to make the proposal an act, Rep. McMillan said, it passed as a resolution. Because only an act can be funded through the legislature, the county was informed' several weeks ago it was expected to pay for the study. However, attorneys advised the commission that it was not legal for them to finance the study. To this, the legislators responded that it would be easy enough to pass the whole thing as an act in the next special session and get funding for it, but urged the commission to get on with the project without further delay.

That problem essentially resolved, several commissioners demanded representation on what legislators billed as simply a fact-finding committee. Solons agreed to consider the commission ex-officio members, but balked at adding any more representatives to the group. The study was supposed to be non-partisan and merely a presentation of facts about the captive county system, — “fair representation” should not enter into it they said.

Just the same, contended Commissioner Bill McMillan, the commission ought to get to pick their own members of the study group just as the legislators had chosen theirs. Rep. McMillan reminded Comm. McMillan that the study was, however, intended to be used by the legislature since it will take a legislative act to make whatever changes in the system may be deemed necessary. After a mildly heated exchange, the legislators agreed to the additions if Rep. Dan Kinsey, who was not present, concurred with the change. He did, and the commissioners were asked to make their choices for the positions known by the end of the day.

Late Tuesday, Commissioner Neil Lauder —who had favored leaving the study committee the way it was — said the other commissioners had chosen James H. Faulkner Sr., A. G. Allegri and Charles Barnhill to represent them on the committee.

Jimmy Faulkner was a state legislator when the captive county program was initiated back in the early 1950’s. In fact, Faulkner had sponsored the bill which put Baldwin under the captive program over the objections of the county commission serving at that time. For various reasons, most of them financial, the captive program was beneficial to Baldwin for nearly 20 years. But in 1972, when Marion Wilkins assumed the position of district engineer for the highway department, roadbuilding activities dropped sharply and have been going a*- a snail’s pace ever since, much to the aggravation of Baldwin citizens and county commission. The commission shells out over $1 million per year in gasoline taxes to finance the program here; a program they are convinced they are not getting their money’s worth from.

One point that Rep. McMillan and Comm. McMillan did agree on was that if the study committee’s findings indicate the road program should be taken over by the county, the assumption of these new duties could necessitate a fulltime county commission. Said Comm. McMillan, “I don’t know if that wouldn’t be the best thing for the county.”

APPENDIX B

§ 580A. Defamation of Public Official or Public Figure

One who publishes a false and defamatory communication concerning a public official or public figure in regard to his conduct, fitness or role in that capacity is subject to liability, if, but only if, he
(a) knows that the statement is false and that it defames the other person, or
(b) acts in reckless disregard of these matters.

§ 580B. Defamation of Private Person

One who publishes a false and defamatory communication concerning a private person, or concerning a public official or public figure in relation to a purely private matter not affecting his conduct, fitness or role in his public capacity, is subject to liability, if, but only if, he
(a) knows that the statement is false and that it defames the other,
(b) acts in reckless disregard of these matters, or
(c) acts negligently in failing to ascertain them.

      . See e. g. Time, Inc. v. Firestone, 424 U.S. 448, 96 S.Ct. 958, 47 L.Ed.2d 154 (1976); Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974); Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971); Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967); Rosenblatt v. Baer, 383 U.S. 75, 86 S.Ct. 669, 15 L.Ed.2d 597 (1966). See also Browning v. Birmingham News, 348 So.2d 455 (Ala.1977); Bryan v. Brown, 339 So.2d 577 (Ala.1976); Loveless v. Graddick, 295 Ala. 142, 325 So.2d 137 (1975). See Comment, Libel Law: A Confused and Meandering State of Affairs, 6 Cum.L.Rev. 667 (1976).

      . A captive county in this context is one where county road construction, engineering and maintenance are relegated to the State Highway Department.

      . See Appendix A for full text of the publications.

      . “Actual Malice” is a misnomer. As defined by the United States Supreme Court in Sullivan, it connotes neither the common meaning of “malice” nor the meaning attached to it in other areas of the law. For the reasons discussed in part II of this opinion we refer to this kind of malice as “Sullivan malice.”

      .See Appendix B for the law according to Restatement, Second, Torts, concerning liability of one who defames a public official, public figure, or private person.


source: Caselaw Access Project

author: ALMON, Justice.

license: Public Domain

text:
    William B. McGUIRE, Individually and d/b/a McGuire Realty Co. and American Liberty Insurance Co. v. Ronald A. WILSON.
    77-400.
    Supreme Court of Alabama.
    June 22, 1979.
    Rehearing Denied July 20, 1979.

      Larry W. Harper of Dunn, Porterfield, Scholl & Clark, Birmingham, for appellants.
    Wilbor J. Hust, Jr., of Zeanah, Donald & Hust, Tuscaloosa, for appellee.
   ALMON, Justice.

This appeal is from an order granting the appellee’s motion for a summary judgment. We reverse.

The appellant, William B. McGuire is engaged in the business of building and selling homes. In connection with this enterprise, McGuire acquired insurance coverage with appellant, American Liberty Insurance Co. under a “builder’s risk” policy. Broadly speaking, American Liberty undertook to insure McGuire against losses incurred during construction.

In December, 1975, McGuire and the ap-pellee, Ronald A. Wilson, entered into a contract for the sale of a residence in Northport, Alabama. This contract was contingent upon Wilson and his wife obtaining an FHA mortgage loan.

Prior to obtaining the FHA loan, the Wilsons moved into this residence pursuant to a lease provision in the real estate sales contract. Within a week, a fire occurred at the residence and the appellants alleged that this fire was caused by Wilson’s negligence. The fire caused $22,421.77 in damages. This damage was repaired by McGuire and the sale was subsequently consummated according to the terms of the sales contract. American Liberty paid McGuire for the damages, evidently on the assumption that these damages were covered by the “builder’s risk” insurance policy. The appellants filed this action in December, 1976, seeking to recover $22,421.77 from Wilson for the damages which they alleged were caused by Wilson’s negligence.

In a related action, Southern Guaranty Insurance Company sought a declaratory judgment as to whether it was required to defend Wilson under the terms of a homeowners policy which it had issued to Wilson. The trial court in the declaratory judgment action ruled that Southern Guaranty Insurance Company was required to defend the appellee, Ronald A. Wilson, in this case and to pay any judgment rendered against Wilson up to the limit of Wilson’s homeowners policy with Southern Guaranty.

The appellee, Ronald Wilson, filed a motion for summary judgment in this ease and that motion was granted. The order granting summary judgment provided in pertinent part:

The court finds that the plaintiff, William B. McGuire, is not a proper party plaintiff and is not a real party in interest and, therefore, there is no question of any material fact concerning the claim of William B. McGuire and the defendant is entitled to a judgment against plaintiff, William B. McGuire, as a matter of law.
The court further finds that the claim of plaintiff, American Liberty Insurance Company is one based upon subrogation but the court finds that there is no genuine question of any material fact and that the plaintiff, American Liberty Insurance Company, has no right of subrogation against this defendant and further the court is of the opinion that subrogation should not be applied in this case against the defendant and, therefore, the defendant is entitled to a judgment as a matter of law.

McGuire and American Liberty have appealed, asserting the following grounds for reversing the judgment of the trial court: there are questions of material fact which preclude the granting of a motion for summary judgment and this Court should allow a quasi-contractual recovery against the ap-pellee (and his insurer) to prevent unjust enrichment.

The appellants suggest that there are disputed factual questions with respect to the following points:

1. whether the fire was negligently caused by the appellee;
2. whether the appellee was a lessee under the sales contract or a vendee in possession;
3. whether obtaining an FHA mortgage at 8% interest was a condition precedent to the enforceability of the sales contract; and
4. whether the conduct of the parties implied a contract whereby the appel-lee was to pay for the cost of repairs.

In view of the decision we reach in this case, we need not treat each of these alleged factual discrepancies extensively. The summary judgment standard embodied in Rule 56, ARCP is conjunctive. There must not only be an absence of genuine issue as to material fact, but there must also be circumstances entitling the moving party to judgment as a matter of law. Regardless of how the factual issues may be ultimately resolved in this case, the record does not support the judgment of the trial court that as a matter of law, American Liberty is not entitled to a subrogation claim against the appellee.

Although the order of the trial court does not indicate why American Liberty’s subro-gation claim was denied, the appellee, asserts that there are four independent theories that will sustain the judgment of the trial court.

The first of these theories is that the insurer, American Liberty, can obtain no greater rights against the appellee than the insured, McGuire has. The appellee contends that after the fire, McGuire could only claim the balance of the purchase price from the appellee. Notwithstanding the fact that the premises were repaired and the sale was subsequently consummated, the appellee contends that since the balance of the purchase price was tendered and accepted, the insured’s claim against Wilson was extinguished and therefore the insurer’s claim was also extinguished.

The appellee relies heavily on Alabama Farm Bureau Mutual Ins. Serv. v. Nixon, 268 Ala. 271, 105 So.2d 643 (1958). Nixon had entered a contract to buy property from Buckelew for $7,000. Buckelew insured the property in his own name with Alabama Farm Bureau Mutual Insurance Service and after Nixon had paid $5,000 of the purchase price, improvements on the property were heavily damaged. Alabama Farm Bureau Mutual paid Buckelew $2,000, the balance of the purchase price and attempted to subrogate itself to the rights of Buckelew against Nixon to recover $2,000 from Nixon. This Court denied the insurer’s subrogation claim reasoning that “when Buckelew received the proceeds of the insurance he had no further claim against Nixon . . . and thus there is no right to which appellant may be subrogated.” The Court pointed out that to allow the insurer to claim against the purchaser, Nixon, would require the purchaser “to pay for that which he does not receive.” Thus, to summarize Nixon, by refusing the insurer’s subrogation claim, the purchaser paid $5,000 for property originally worth $7,000 that had sustained $2,000 worth of damage. The seller received $7,000 for the property he had contracted to sell for $7,000; $5,000 from the purchaser and $2,000 from his insurer. The insurer paid the seller $2,000, the extent of the seller’s loss, in accordance with the terms of the policy.

Nixon held, in effect, that the payment of the insurance proceeds to the seller extinguished the seller’s claim against the purchaser, and absent a viable claim of the seller against the purchaser the insurer was not entitled to subrogation. It is significant to note that, in Nixon, the risk of casualty loss to the property in question was neither discussed nor decided.

In this case the appellee unequivocally states in his brief that

a vendor incurs the risk of loss of a building until the vendee takes possession or accepts the premises. At that point the risk of loss shifts to the vendee. Whether the premises are damaged with or without the fault of the vendee, he is responsible and is not absolved from his contractual obligation.
Wilson was the equitable owner of the house when the fire occurred because he was a vendee in possession. [Citation omitted.] Therefore, the risk of loss by fire had shifted to him, and McGuire had no obligation to rebuild the property. McGuire’s only claim against defendant was for the balance of the purchase price.

The appellee concedes that he bore the risk of loss in this case irrespective of fault, yet he attempts to avoid this loss despite allegations that the loss was caused by his negligence. The appellee clearly will succeed in avoiding this loss if the insurer is not allowed to subrogate his claim in this case.

Nixon, supra, does not require such a result, especially since it has been limited to its particular facts. ABC Supermarket, Inc. v. American Employers Ins. Co., 283 Ala. 13, 214 So.2d 291 (1968). ABC Supermarket, supra, quoted a pre-Nixon case, Hackett v. Cash, 196 Ala. 403, 72 So. 52 (1916) with approval.

Where a policy of fire insurance is upon the interest of the mortgagee, and does not accrue to the benefit of the mortgagor, the insurance company has a right to pay the mortgage and take an assignment or to become subrogated to the right of the mortgagee in case there is no assignment. 283 Ala. at 22, 214 So.2d at 298.

While we are not to be understood as strictly equating a vendor under a conditional sales contract with a mortgagee, the legal principles underlying an insurer’s subrogation claim are analogous.

In City of Birmingham v. Walker, 267 Ala. 150, 101 So.2d 250 (1958), this Court noted that

[t]he general rule is that when an insurer pays the insured in accordance with the insurance contract for a loss of property proximately resulting from fire caused by the actionable misconduct of a third party, the insurer becomes, by the doctrine of equitable subrogation, the owner, pro tanto, of the claim of the insured against the third party. If such payment only partially reimburses the insured for the loss, the insurer is subrogat-ed only to the extent of the amount paid, and the insured remains the owner of the claim for the unreimbursed amount of the loss. If such payment by the insurer fully reimburses the insured for the property loss, then the insurer is subrogated to the entire right of insured against the third party.
This doctrine is based on the theory that the insurer is a surety for the third party, who is the principal obligor to the insured, and so, upon the principle that one who has paid a debt for which another is primarily liable should be substituted for and have the rights of the primary creditor against the primary debtor, the insurer, with respect to the claim of insured against the third party tort-feasor, is held to be substituted for the insured to the extent of the amount so paid by the insurer. The equity of such principle is said to be that the insured has only one claim and is entitled to one payment only, and that the loss should ultimately fall on the third party who caused it. 267 Ala. at 154-155, 101 So.2d at 253.

In light of this general rule, we are unable to hold as a matter of law that American Liberty is precluded from asserting a subrogation claim against the appellee. It does not appear that the appellant McGuire’s election to apply the insurance proceeds to the reconstruction of the damaged house bars American Liberty’s equitable subrogation claim at the summary judgment stage in this proceeding.

The second proposition cited by the appel-lee as grounds for sustaining the judgment of the trial court is that Wilson, as the equitable owner of the property, had an insurable interest in the property and was therefore an insured under the “builder’s risk” policy between American Liberty and McGuire. It is the appellee’s position that McGuire collected the insurance proceeds and held them in trust for Wilson. Since Wilson was the beneficiary of the trust fund, he was an insured and American Liberty has no right of subrogation against its own insured.

A purchaser under a lease-sale contract has an insurable interest, Commercial Union Fire Ins. Co. of N. Y. v. Parvin, 279 Ala. 645,189 So.2d 330 (1966) and the courts have held that where the seller receives insurance proceeds, he does hold them in trust for the benefit of the purchaser. Nixon, supra ; Annot. 64 A.L.R.2d 1402 (1959). It has never been held, so far as we can find, that the purchaser’s beneficial interest in the insurance proceeds elevates his status to that of named insured. Birmingham Fire & Casualty Company v. Lewis, 272 Ala. 685, 133 So.2d 876 (1961). In Lewis, supra, this Court made the following observation:

Hence, when one holding property in mortgage, pledge, or hypothe-cation, as security merely, obtains insurance upon it, he simply strengthens his security, and obtains indemnity against its impairment by the casualty insured against. The insurer in such cases is held to be a guarantor, or indemnifier of the insured, that the debt or duty shall not become lost or forfeit, by the destruction of the security or pledge. If the debt be paid, or duty performed, then even a destruction of the property insured gives no right of action against the insurer. And if, in case of fire, the insurer indemnifies the assured by paying the loss, such insurer thereby becomes subrogated to the rights of the creditor or lienee against the debtor and may compel payment, in reimbursement of the loss it had paid.

272 Ala. at 689, 133 So.2d at 880, quoting Commercial Fire Ins. Co. v. Capital City Ins. Co., 81 Ala. 320, 323-24, 8 So. 222, 223 (1886).

We are clear that American Liberty is not attempting to subrogate a claim against its insured.

The appellee also argues that American Liberty is not entitled to subrogation because they made a voluntary payment for a loss that was not actually included in the coverage that American Liberty provided McGuire and that a volunteer is not entitled to recover through a subrogation claim. The appellee asserts that American Liberty’s “builder’s risk” coverage ceased when the premises were accepted, or in the alternative, that since the builder’s risk policy contained an “excess insurance” clause, any insurance paid under the builder’s risk policy was voluntary.

With regard to the appellee’s point concerning the cessation of coverage upon the purchaser’s acceptance, we note the maxim that ambiguous provisions in insurance policies are to be construed most strongly against the insurer, Life Ins. Co. of Georgia v. Miller, 292 Ala. 525, 296 So.2d 900 (1974). We cannot say as a matter of law that American Liberty would have prevailed under this cessation of coverage provision had McGuire brought an action against his insurer. The record is not sufficiently clear at this point as to whether Wilson had “accepted” this property within the meaning of the insurance policy, i. e., final acceptance as a vendee in possession, or whether he had accepted the property as a lessee under the lease provision inserted in the sales contract. This is a matter that will have to be resolved at a trial on the merits.

With regard to the “excess insurance” clause in American Liberty’s builder’s risk policy, this clause provides in pertinent part that:

e. In case other valid and collectible insurance exists on any property hereby insured at the time and place of loss, the insurance under this policy shall be considered as excess insurance and shall not apply or contribute to the payment of any loss until the amount of such other insurance shall have been exhausted . . . [emphasis added].

Without deciding whether this clause applies to insurance held by someone other than the named insured, we do not believe that there is other collectible insurance in this case insofar as the appellant, McGuire, is concerned. It is true that in a collateral declaratory judgment action, it was held that Wilson’s homeowners insurer, Southern Guaranty, would have to defend Wilson and pay any judgment rendered against him arising out of this loss. However, the collectibility of this other insurance is contingent upon an ultimate determination that Wilson is liable to the appellants. Thus, American Liberty’s payment to McGuire was not in derogation of its rights under the excess insurance clause so as to make American Liberty a volunteer.

The appellee cites Couch on Insurance 2d, § 61.54 (1966) at 270 in support of the proposition that subrogation is not permitted for volunteers even when the voluntary nature of the payment is subsequently determined in a judicial proceeding. In this same section, however, it is noted that “any doubt as to the applicability of this principle is construed in favor of the insurer and the nonexistence of a volunteer status.” Couch, supra, at 271. The declaration of this principle is laudable and it is clearly intended to encourage insurers to pay their insureds for claimed casualty losses even where coverage is arguably questionable. Thus, the resolution of American Liberty’s status as a volunteer was inappropriate in a summary judgment proceeding. We, of course, express no opinion as to whether American Liberty’s payment may ultimately be determined to have been a voluntary payment, but we do hold that the record does not sustain such a finding at this point.

Finally, the appellee notes that subrogation is not a matter of strict right, but that subrogation is to be applied after a consideration of the facts of each case. Nixon, supra.

In this regard, it has been stated in 83 C.J.S. Subrogation § 2b, that

subrogation is not strictly a remedy, but rather ... an equitable principle through which the benefit of remedies is obtained . . . Subrogation is closely akin to, if not a part of, the equitable principle of “restitution” and “unjust enrichment.” (footnotes omitted)

At 83 C.J.S. Subrogation § 5a, the text states that subrogation “is applied where demanded by the dictates of equity, justice and good conscience . . . .”

In this case the insurer has paid a claim to its insured for a loss that was allegedly caused by a third party’s negligence. Irrespective of fault, the third party has acknowledged that he bore the risk of loss and yet he seeks to avoid it by denying the insurer’s subrogation claim.

We believe that although it is not clear that the appellant, American Liberty, will ultimately prevail in this case, summary judgment is an inappropriate vehicle for disposing of its claim at this stage.

It does, however, appear from the record that the appellant McGuire has no further pecuniary interest in the outcome of this litigation; therefore, the granting of the defendant’s motion for summary judgment as to McGuire was proper. Rule 17(a), ARCP.

AFFIRMED IN PART; REVERSED IN PART AND REMANDED.

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


author: SHORES, Justice.

text:
    The HARTFORD INSURANCE GROUP, a corp. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a corp., et al.
    78-126.
    Supreme Court of Alabama.
    June 29, 1979.
    William T. Mills, II, of Dunn, Porterfield, Scholl & Clark, Birmingham, for appellant.
    William W. Goodrich and Ralph D. Gaines, Jr., of Gaines, Cleckler & Robbins, Talladega, for appellee, State Farm Mut. Auto. Ins. Co.
    James M. Sizemore, Jr., Sylacauga, for appellee, Janice A. Lambert.
    David D. Wininger, Birmingham, for Glenn Joiner, amicus curiae.
   SHORES, Justice.

This case presents an insurance coverage question. The policy is a family automobile policy which was originally issued to Robert L. Atkinson and described the owned vehicles as a 1971 LTD and a 1974 Ford Pickup. Robert drove the pickup and his wife, Ann, drove the LTD. During the policy period, Robert and Ann separated and Ann became the named insured by endorsement to the policy which also deleted coverage on the pickup and added a 1971 Oldsmobile. This automobile was driven by Janice Lambert, the Atkinsons’ twenty-year-old daughter, who lived with her mother. Title to this car was in Mrs. Atkinson. Janice Lambert was involved in an accident in January, 1977, while driving this automobile and it was declared a total loss. The Hartford paid the loss with its check made payable to Mrs. Atkinson and Janice. Janice bought a 1971 Mercury Cougar with the proceeds of this check. The bill of sale to this automobile was to Mrs. Atkinson and Janice. The Mercury was not added to the Hartford policy as an owned automobile. Janice was involved in a second accident in the Mercury in April of 1977. The Hartford denied coverage on the ground that the Mercury was not an automobile acquired by the named insured and, therefore, was not a newly acquired automobile under the terms of the policy.

State Farm Mutual Automobile Insurance Company, insurer of the automobile with which Janice collided while driving the Mercury, brought this action for declaratory judgment against The Hartford asking for a declaration that The Hartford was obligated to defend Janice Lambert. The trial court held that The Hartford was obligated to defend Janice Lambert and it appealed. We affirm.

The Hartford argues that the trial court erred in holding that the Mercury was covered under the policy based on the policy’s definition of an “owned automobile.” According to the policy, the term “owned automobile” means:

“(a) a private passenger, farm or utility automobile described in this policy for which a specific premium charge indicates that coverage is afforded,
“(b) a trailer owned by the named insured,
“(c) a private passenger, farm or utility automobile ownership of which is acquired by the named insured during the policy period, provided
“(1) it replaces an owned automobile as defined in (a) above, or
“(2) the company insures all private passenger, farm and utility automobiles owned by the named insured on the date of such acquisition and the named insured notifies the company during the policy period or within 30 days after the date of such acquisition of his election to make this and no other policy issued by the company applicable to such automobile . . .”

Hartford argues that the trial court failed to make a finding that the second automobile was purchased by the named insured, Mrs. Atkinson; and, further, that the evidence will not support such a finding. It is Hartford’s position that, unless Mrs. Atkinson, either individually or jointly with Janice Lambert, purchased and held an interest in the second automobile, it could not be a replacement automobile covered by the “newly acquired automobile clause” of the policy.

The trial court specifically found that the Mercury was a replacement automobile under the policy. The final judgment contains the following findings of fact:

“That the Defendant, Lambert, had an Oldsmobile automobile insured under a policy of insurance issued by the Defendant, Hartford. The automobile was involved in a collision and was determined by the Defendant, Hartford, to be a total loss. In fact, the Defendant, Hartford, offered to find a replacement automobile for the Defendant, Lambert, or in the alternative pay the Defendant, Lambert, the sum of $1,650.00 on the basis of the said Oldsmobile being a total loss. The Defendant, Lambert, accepted the payment for the total loss. The day she picked up the check from Defendant, Hartford’s agent, Mr. Jones, she advised him that she had picked out a Mercury automobile and was on her way to purchase it with the check that she received from the Defendant’s agent. This notice to the Defendant’s agent constituted adequate notice to the Defendant, Hartford, that the Oldsmobile was being replaced by the Mercury automobile. There was no return of any premium by the Defendant, Hartford, to the Defendant, Lambert. That the policy issued by the Defendant, Hartford, specifically covering the Oldsmobile that was destroyed, afforded coverage on the Mercury automobile that was obtained as a replacement.”

Accordingly, the trial court ordered:

“That the Defendant, The Hartford Insurance Group, is the insurer of Defendant, Janice A. Lambert, under policy number 20 GA 309274 in accordance with the terms and provisions of said policy and liable to defend the actions or claims pending against Janice A. Lambert and arising out of an automobile accident while the said Janice A. Lambert was operating the Mercury automobile.”

There is evidence in the record to support a finding that Mrs. Atkinson, the named insured, acquired the Mercury as a replacement for the previously covered Oldsmobile. It is of no consequence that this may have been done in concert with her daughter. See American Indemnity Co. v. Davis, 155 P.Supp. 47 (M.D.Ga.1957).

Hartford finally contends that the trial court erred in sustaining objection to a question put to Janice Lambert regarding a statement made by her to a Hartford representative. Hartford argues that the trial court incorrectly applied the provisions of Section 1 of Act No. 826, Acts of Alabama 1965, page 1548, approved September 2, 1965. Assuming, without deciding, that Act No. 826, supra, is valid, there is no reversible error on this point. The Hartford did not make an offer of proof regarding the alleged statement. ARCP 43(c) states:

“In an action tried by a jury, if an objection to a question propounded to a witness is sustained by the court, the examining attorney may make a specific offer of what he expects to prove by the answer of the witness. The court may require the offer to be made out of the hearing of the jury. The court may add such other or further statement as clearly shows the character of the evidence, the form in which it was offered, the objection made, and the ruling thereon. In actions tried without a jury the same procedure may be followed, except that the court upon request shall take and report the evidence in full, unless it clearly appears that the evidence is not admissible on any ground or that the witness is privileged.”

As stated in the Committee Comments, “Rule 43(c) simply gives a party a right to place in the record for appellate purposes, the proof he was denied the opportunity to adduce at the trial level after the objection has been sustained against him.” Rule 43(c) was not intended, nor does it abrogate the need, for an offer of proof under appropriate circumstances. Under this rule, the law remains as stated. Cherry v. Hill, 283 Ala. 74, 77, 214 So.2d 427 (1968), citing Burnett v. Garrison, 261 Ala. 622, 631, 75 So.2d 144 (1954):

“ ‘It is necessary in order to review a trial court’s ruling sustaining objection to a question which does not on its face show what is the expected answer, that attention be called to the proposed answer and show that such answer would be relevant evidence . . .

See, e. g., Greer v. Eye Foundation, Inc., 286 Ala. 63, 237 So.2d 456 (1970); Killingsworth v. Killingsworth, 283 Ala. 345, 217 So.2d 57 (1968), appeal after remand, 284 Ala. 524, 226 So.2d 308 (1968); Stewart v. Weaver, 264 Ala. 286, 87 So.2d 548 (1956).

The judgment appealed from is affirmed.

AFFIRMED.

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

      . The bill of sale shows: “SOLD TO Ann Atkinson Janice (Atkinson) Lambert”


author: BEATTY, Justice.

text:
    COMMERCIAL UNION ASSURANCE COMPANY, a division of Commercial Union Insurance Company of New York v. The GLASS LINED PIPE COMPANY, INC., a corporation.
    78-206.
    Supreme Court of Alabama.
    June 29, 1979.

      Bert P. Taylor of McDaniel, Hall, Parsons & Conerly, Birmingham, for appellant.
    Alexander W. Jones, Jr. of Pritchard, McCall & Jones, Birmingham, for appellee.
   BEATTY, Justice.

This is an appeal by Commercial Union Assurance Company from a declaratory judgment which held that Commercial Union was obliged by a policy of insurance to defend The Glass Lined Pipe Company, Inc. in an action brought in Minnesota against it. We reverse and remand.

The policy in question was of a type described as a Comprehensive General Liability Insurance, insuring against bodily injury and property damage liability. Under those coverages the contract recites:

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
Coverage A. bodily injury or
Coverage B. property damage
to which this insurance applies caused by an occurrence .

An “occurrence” is defined in the policy as:

[A]n accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured; .

“Property damage” is defined in the policy as:

(1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period. .

One of the general liability hazards insured against was a “products hazard,” defined in the policy as including:

[Pjroperty damage arising out of the named insured’s products or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs away from premises owned by or rented to the named insured and after physical possession of such products has been relinquished to others.

The policy also expressed certain exclusions from liability:

This insurance does not apply:
(p) to damages claimed for the withdrawal, inspection, repair, replacement, or loss of use of the named insured’s products or work completed by or for the named insured or of any property of which such products or work form a part, if such products, work or property are withdrawn from the market or from use because of any known or suspected defect or deficiency therein;

The Minnesota action arose out of the construction of a sewage disposal plant. Hayes Contractors, Inc. was a subcontractor on that job installing pumps, valves, pipe, hangers, supports and related mechanical systems. Hayes used cast iron pipe supplied by American Cast Iron Pipe Company which, under Hayes’ directions, sent the pipe to Glass Lined for installation of a glass lining inside the pipe according to a purchase order from Hayes which was accepted by Glass Lined. Following shipment of this pipe and installation of a portion of it, a dispute arose over the quality of the glass lining. Ultimately Hayes sued Glass Lined for damages based upon negligence, breach of warranties, and injuries to business reputation. The damages claimed were amounts of money to compensate Hayes for costs of transportation, relining the pipe, and exemplary damages.

Commercial Union declined to defend the Minnesota action, and Glass Lined brought this suit for declaratory relief. The trial court decided, among other things, that Exclusion (p), excluding damages for certain events when the insured’s products or work or property are withdrawn from the market or use, was inapplicable because the subject matter was not withdrawn by the insured; and that the defendant, Commercial Union, was obligated to defend Glass Lined in the Minnesota action and to pay any judgment against Glass Lined arising from the negligence and/or the breach of warranties claims.

The defendant insurance company has appealed from that decree on the ground that the evidence undisputedly establishes that the claims asserted by the plaintiff are specifically excluded under the policy.

Initially we recite some pertinent language from Aetna Insurance Co. v. Pete Wilson Roofing & Heating Co., 289 Ala. 719, 723, 272 So.2d 232, 235 (1973):

The law in Alabama is clear that insurance companies have the right, in the absence of statutory provisions to the contrary, to limit their liability and write policies with narrow coverage . It is also true that the courts must enforce insurance contracts as written and cannot defeat express provisions in a policy, including exclusions, by judicial interpretation. . . . (citations omitted) [Cf. Westchester Fire Ins. Co. v. Barnett Millworks, Inc., Ala., 364 So.2d 1137 (1978)]

In Aetna the subject matter of the suit was a roof constructed and unconditionally guaranteed by a subcontractor. Subsequently the roof leaked and the subcontractor was sued. His contractual liability carrier denied coverage under a policy exclusion identical to (p) here. Because the complaint claimed damages resulting from the contractor’s repair and replacement of the roof constructed by the insured subcontractor, this Court held that an exclusion ((p) here) specifically applied because the roof in question was the subcontractor’s “product.”

In its criticism of the aptness of Aetna to this case, the plaintiff notes that the policy in Aetna was a contract liability policy rather than a products liability policy as is the case here. It is true that the cause of action in Aetna was based upon a contractual liability policy, whereas the claim against the plaintiff here is based upon a comprehensive general liability policy. The decision in Aetna, however, was not governed by the type of policy but rather upon the language of the specific exclusion contained in the policy.

Were the damages claimed in the Minnesota suit “for the withdrawal, inspection, repair, replacement, or loss of use of the named insured’s products or work completed by the named insured”? The record requires an affirmative answer to this question. In addition to the allegations of the complaint alluded to earlier, the deposition of Dale Bickerstaff, the Hayes project manager of this job, was admitted into evidence. He testified that his decision controlled the issue of whether or not the pipe furnished by Glass Lined would be used, and that he would be familiar with the damages sustained by his firm in the event that pipe could not be used. In explaining those damages he referred to the necessity of shipping that pipe to another company in Pennsylvania, having the glass lining replaced, and shipment back for installation. He said “we had to tear out a large part of the material . . . already installed” and “provide personnel and machinery to . inspect every single piece of pipe over again on the project.” Some was reinstalled; the other was shipped to Pennsylvania, with shipping charges and additional material charges incurred thereby. Some of the pipe originally ordered from Glass Lined was paid for but never shipped. Some of the inferior pipe was installed only after Hayes gave the owner-builder a credit, at the expense of Hayes. Damages were also sustained due to a delay in construction, and for extra work performed in additional inspections. Because of general injury to Hayes’ reputation and goodwill, damages were also claimed, as well as attorneys’ fees. He also stated that when the unacceptable pipe was relined, seventy-five per cent of the actual pipe was re-used, and in the case of the remainder he determined that it was “more economical” to purchase new pipe. According to Bickerstaff, “There are two problems: One, it [the pipe] didn’t meet specifications; two, was workmanship of the installation of the glass.” He conceded that there was no damage caused to any other parts of the project because the pipe did not function properly. No walls were taken down and no damage was done to the pipe itself. He added that the pipe in question was to be used to pump effluent from sewage, and was not to be used until the plant was completed.

According to this evidence it is clear that the damages claimed by Hayes were “for the withdrawal, inspection, repair, replacement, or loss of use of . . .or work completed by the named insured.” Each of the items of damage claimed by Hayes relates to and arises from these specified circumstances.

Glass Lined insists, however, that Exclusion (p) refers only to situations in which the products are withdrawn by the insured, and that is the interpretation placed upon the exclusion by the trial court. We cannot approve such a construction. The language is clear and unambiguous. There are no words of limitation concerning the identity of the party who might withdraw the products or work completed from the market. This conclusion is strengthened by the last portion of the exclusion which deals with “any property of which such products or work form a part . . . .” That portion itself accommodates the circumstance of a withdrawal by a purchaser of the insured’s product who uses that product as a component part of his own and who withdraws his product due to a defect in a component supplied by the insured. Chambers Gasket & Mfg. Co. v. General Ins. Co. of America, 29 Ill.App.3d 998, 331 N.E.2d 203 (1975), is a case in point. A valve manufacturer purchased a supply of gaskets which it installed in its finished products. The gaskets proved defective and so the valve manufacturer sued the manufacturer of the gaskets. The action was based upon breaches of express and implied warranties and negligence, and sought damages measured by the value of the gaskets and the cost of repairs. The gasket manufacturer’s insurance policy was “Blanket Liability Insurance.” Coverage was denied and that decision was upheld in both the trial court and on appeal. It is significant that the policy contained an exclusion in the exact language of Exclusion (p) here. On appeal the Illinois court noted that the policy in question was a liability policy, not one insuring either the property or the work of the insured. “A liability policy,” it stated, “is not intended to cover customer dissatisfaction or refunds made on the defective product itself,” and thus the cost of the gaskets was not covered. On the cost of replacing the gaskets already installed, that court referred to an exclusion dealing with property damage due to repairing or replacing defective goods manufactured by the insured which effectively removed coverage. It could have applied the exclusion in issue here (p) with equal force, however, because it stressed the fact that there was no destruction of or damage to the valves.

Hamilton Die Cast, Inc. v. United States F. & G. Co., 7 Cir., 508 F.2d 417 (1975) is an even closer case. Die Cast had agreed with a sporting goods company to supply the latter with tennis rackets meeting certain specifications and qualities. The sporting goods company later sued Die Cast, claiming damages because it could not supply its demand due to an insufficient supply, it was required to refund the purchase prices of defective rackets, and its business reputation was damaged. Die Cast’s insurance carrier, under its comprehensive general liability policy, denied a defense and coverage, and this denial was upheld in the trial court and on appeal.

One of the two reasons given by the court for upholding the denial of coverage dealt with the application of an exclusion exactly like (p) here:

[D]amages claimed for the withdrawal of the Named Insured’s products . . . or of any property of which such products or work form a part, if such products, work or property are withdrawn . . . from use because of any known or suspected defect or deficiency therein.

This exclusion, it was held, was

“designed to exclude from coverage costs incurred by the withdrawal of goods from the market. . . .” Under the language of Exclusion N [(p) here], it is immaterial that the withdrawal was not by the insured, [emphasis added]

Finally, in both brief and argument the appellee contends that the exclusions here seek to avert liability from the very occurrences for which the policy was procured. We cannot agree. The effect of Exclusion (p) is to exclude claims for damages caused by the purchaser’s withdrawal of the insured’s products from use due to a deficiency in them. Such a result does not affect other possible instances of product liability, such as those in which damage occurs to a person, or to property other than the product of the insured itself. Wollard Aircraft Equipment, Inc. v. Traficant, Fla.App., 266 So.2d 56 (1972).

We have concluded that Exclusion (p) is applicable under the pleadings and evidence in this case to exclude the obligation of Commercial Union to defend the Minnesota action brought by Hayes against Glass Lined or to pay any judgment rendered therein. This conclusion pretermits consideration of points raised dealing with other terms of the insurance policy. The trial court’s decree must be, and is, reversed and the cause is remanded.

REVERSED AND REMANDED.

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


author: MADDOX, Justice.

text:
    Thelma Louise VAUGHN, Georgia Freeda Rorex, Jerry Lynn Gibson Ingram, Jimmy Sue Rollins, Charles David Johnson, Roy Lee Johnson and Lucy Johnson v. Walter THOMAS and Jo Ann Thomas.
    78-200.
    Supreme Court of Alabama.
    July 13, 1979.

      John F. Proctor, of Thomas & Proctor, Scottsboro, for appellants.
    Jack Livingston, Scottsboro, for appel-lees.
   MADDOX, Justice.

In this land partition suit, the trial judge found that the subject 40 acres of land jointly owned by the parties could not be equitably partitioned in kind among all the parties; he ordered it sold for division.

Two basic issues are presented:

(1) Was a former action involving the same land res judicata?

(2) Was there evidence to support the trial court’s finding that the land could not be equitably divided?

The subject tract was originally owned by Joe Johnson and his wife, Gladys. Gladys died in 1935. Joe Johnson remarried. His second wife, Lou, is also deceased.

In 1968, Joe Johnson, a widower, sold the subject tract to Walter Thomas and his wife, Jo Ann Thomas, who is the daughter of Joe Johnson by his second marriage.

The parties are as follows:

Appellants are the children and grandchildren of Joe Johnson and his first wife, Gladys. Appellees, Walter and Jo Ann Thomas, are the purchasers from Johnson. In 1971, Thelma Louise Vaughn, Georgia Freeda Rorex and Johnny Jacob Johnson, children of Joe and Gladys Johnson, commenced an action against Walter Thomas, Jo Ann Thomas and Joe Johnson, seeking to have the 40 acres sold for division. This cause was dismissed on the basis that some of the plaintiffs were remaindermen and as such could not force a sale for division against a life tenant.

The present suit was filed in July, 1978, by the appellees against Thelma Louise Vaughn, Georgia Freeda Rorex and the children of Johnny Jacob Johnson, deceased, Jimmy Sue Rollins, Charles David Johnson, Roy Lee Johnson, Jerry Lynn Gibson Ingram and Lucy Johnson.

After considering the evidence and pleadings, the judge determined that the property could not be equitably divided in kind and that its sale was necessary to accomplish an equitable division. He then established the respective interests of the parties and ordered the Clerk of the Court to sell the real estate at public outcry.

The former action was filed by some of the appellants who were remaindermen, but neither of them was entitled to posses-sory rights in the real estate in question. The trial court correctly held in the former action that they could not maintain an action for partition. Duncan v. Johnson, 338 So.2d 1243 (Ala.1976), Ganus v. Sullivan, 267 Ala. 16, 99 So.2d 204 (1957). That action would not bar the present action, however, in which plaintiffs holding a possesso-ry interest sought a sale for division.

The appellants also contend that the trial court erred in finding that the property in question could not be equitably partitioned in kind between the parties. We must disagree again.

The appellees placed into evidence testimony taken before the register in the former case. A review of this testimony shows that the judge’s findings are well supported by the evidence. Furthermore, the parties stipulated in open court that division in kind was impossible. A party cannot try his case on one theory and then appeal on a separate theory. Bailey v. City of Mobile, 292 Ala. 436, 296 So.2d 149 (1974).

AFFIRMED.

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

      . The names of defendants Jerry Lynn Gibson Ingram and Lucy Johnson were subsequently corrected by the trial court to read Jerry Lynn Ingle and Luanna Johnson Sexton, respectively.

      . Appellants posted a supersedeas bond staying the sale pending the outcome of this appeal.


author: WRIGHT, Presiding Judge.

text:
    Ronald Lee SCRIBNER v. The STATE of Alabama.
    Civ. 1788.
    Court of Civil Appeals of Alabama.
    May 2, 1979.
    Rehearing Denied June 20, 1979.

      Roger C. Appell, Birmingham, for appellant.
    Charles A. Graddick, Atty. Gen. and Karen Neal Daniel, Asst. Atty. Gen., for the State of Alabama.
   WRIGHT, Presiding Judge.

Defendant, Ronald Lee Scribner, was found to be the father of an illegitimate child in a paternity proceeding brought in the family court. His appeal to circuit court was dismissed for failure to timely file notice of appeal in accordance with § 26-12-8, Code of Alabama (1975). The only issue for our consideration is whether, the filing of written notice of appeal with the judge of the family court satisfies the requirements of the statute. We find that it does not and affirm.

After an adverse determination against defendant in the family court, he gave oral notice of appeal. Subsequently, defendant’s counsel filed written notice of appeal with the clerk of the circuit court, and sent letters to the trial judge of the family court and to the deputy district attorney indicating an intent to appeal. The state based its motion to dismiss on the defendant’s failure to timely file notice of appeal in the family court. The statute governing is § 26-12-8, Code of Alabama (1975):

“The state of Alabama or the reputed father may appeal from any final judgment rendered under Section 26-12-4 by the court in which the proceeding originated within 10 days after rendition thereof by filing written notice of such appeal within said prescribed period with the clerk of the circuit court to which said appeal is taken and in the court rendering the judgment. . . . ”

This statute was construed in the case of LeFlore v. State ex rel. Moore, 288 Ala. 310, 260 So.2d 581 (1972), where it was said that an appeal is not a matter of vested right, but by the grace of statute, and must be perfected pursuant to the time and manner prescribed in the controlling statute, and if the requirements of such statute are not met, the appeal must be dismissed.

In the present case, the clerk of the family court would have been the proper filing officer. Filing cannot be complete until notice is delivered to the proper filing officer. Moutry v. State, 359 So.2d 388 (Ala.Civ.App.1978); Rule 5(e), ARCP.

Because of defendant’s failure to timely file notice of appeal with the clerk of the family court in accordance with the statute, the circuit court’s jurisdiction never attached, and the trial court properly dismissed defendant’s appeal.

AFFIRMED.

BRADLEY and HOLMES, JJ., concur.


text:
    Ex parte Ronald Lee SCRIBNER.
    78-698.
    Supreme Court of Alabama.
    July 27, 1979.
   MADDOX, Justice.

WRIT DENIED.

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


author: HOLMES, Judge.

text:
    Gary L. ROGERS v. ALABAMA STATE TENURE COMMISSION et al.
    Civ. 1727.
    Court of Civil Appeals of Alabama.
    July 11, 1979.
    Joseph E. Carr, IV, Montgomery, for appellant.
    Hobson Manasco, Jr., Haleyville, for Alabama State Tenure Commission, et al., ap-pellees.
   HOLMES, Judge.

This is a teacher tenure case.

The Board of Education of Winston County notified the teacher that the teacher’s employment contract was not being renewed. Several reasons were stated as to why the Board was not renewing the contract. One of the reasons stated was the teacher failed to meet certification requirements as Driver Education teacher.

The teacher contested the cancellation and a hearing was held before the Board. The Board thereafter cancelled the teacher’s contract. The teacher appealed the cancellation to the Tenure Commission. The Tenure Commission affirmed the Board of Education’s action and entered in pertinent part the following decision:

Upon consideration of the record, as well as briefs and oral argument of counsel for the teacher and the Board, the Tenure Commission finds that the teacher’s failure to meet certification requirements for the 1977-78 school year furnished good and just cause for the cancellation of his contract. Hence, the action of the Winston County Board of Education is hereby sustained.

The teacher then petitioned, by writ of' mandamus, the Circuit Court of Winston County. The circuit court denied the petition and appeal was taken to this court.

The dispositive issue on appeal is whether the Board’s action in cancelling a teacher’s contract for failure to meet certification requirements for a driver education teacher is “good and just cause” within the meaning of § 16-24-8, Code of Ala.1975. We find that it is and affirm.

In Ellenburg v. Hartselle City Bd. of Ed., Ala.Civ.App., 349 So.2d 605, 609-10 (1977), Judge Bradley, speaking for this court, stated the following:

“[G]ood cause” in a statute of this kind [Tenure Act] is by no means limited to some form of inefficiency or misconduct on the part of the teacher dismissed, but includes any ground put forward by a school committee in good faith and which is not arbitrary, irrational, unreasonable, or irrelevant to the committee’s task of building up and maintaining an efficient school system. Limited only by the statutory provision that they must be good and just causes, the jurisdiction and discretion to determine what these causes may be rests in the hands of the school authorities.

Viewing the record with the attendant presumption, we find that in order to teach driver education in Alabama, teachers are required by the State Department of Education to earn three credits per year in an approved program until eighteen hours are accumulated. The teacher, in this instance, had obtained some credits but did not obtain credits for the year 1977-78. He was notified of this deficiency.

Additionally, there was evidence that the public high schools of Alabama must offer an approved driver education course. Further, students in the public schools are required to complete an approved course in driver education prior to graduating. There was also evidence that because the teacher failed to earn the required credits, Winston County’s driver education program was not approved. The reason for the disapproval was “this instructor (teacher) does not have the necessary courses to be approved.”

Under the standard as stated in Ellen-burg, supra, the Board had “good cause” to terminate the employment contract of the teacher.

In addition to the above, the teacher, through able counsel, contends that the teacher was denied “procedural due process and a fundamentally fair hearing.”

We do not deem it necessary nor pertinent to specifically write to these contentions. Suffice it to say we have carefully reviewed the record. The record reveals that proper notice of the reason for cancellation was given the teacher. See EHen-burg, supra. Additionally, all other procedural requirements of Alabama Teacher Tenure law were adhered to.

The case is due to be affirmed.

AFFIRMED.

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