author: LEE, Justice,

text:
    George G. MANSELL v. Herman GROSS, Administrator of Estate of Hugh M. Allen, Deceased.
    No. 49373.
    Supreme Court of Mississippi.
    May 18, 1977.
    Robert N. Brooks, Carthage, for appellant.
    Harold W. Davidson, Carthage, for appel-lee.

      Before GILLESPIE, ROBERTSON and LEE, JJ.
   LEE, Justice,

for the Court:

George G. Mansell appeals from a decree entered in the Chancery Court of Leake County holding that a fiduciary relationship existed between Mansell and Hugh M. Allen, and cancelling a deed of conveyance executed by Allen in favor of Mansell.

Mansell contends that (1) the court erred in holding that the burden was on appellant to show that grantor executed the deed of his own independent consent and action, since the burden of proof of mental incapacity was incumbent upon appellee, and (2) the finding of the court was against the overwhelming weight of evidence in that there was nothing to show the grantor was incompetent on the date of the execution of the deed.

The deed in question was executed January 5, 1974, by Hugh M. Allen, covering eleven and two-thirds (11%) acres of land with an appraised value of twenty-three thousand dollars ($23,000). At the time, Allen was ninety-four (94) years of age and had been a patient in the hospital for approximately three (3) months. He suffered from a urinary tract infection, an ear infection, arthritis, dehydration, arteriosclerosis, and was unable to walk and to feed himself. He was administered shots, and various medicines were prescribed for him. One physician testified that at times Allen was competent and at times he was incompetent, but he would not give an opinion as to Allen’s competency on the deed date. Another physician testified that Allen was not competent to transact business during his entire stay in the hospital, and he had recommended that a guardian be appointed for him. Appellant and his own attorney testified that on the deed date Allen knew what he was doing.

Allen was unmarried, his beneficiaries consisting of nine (9) nephews and nieces. Mansell was one of the nephews. During Allen’s stay in the hospital, Mansell remained with him every other night, and attended his needs, he looked after and cultivated the land in question, he had previously driven Allen places in an automobile, and it was commonly known that Man-sell was a “favorite” of Allen. Mansell testified that, although Allen declined to sell a part of the land to Mansell’s daughter just prior to entering the hospital, he told Mansell that he wanted him to have the land. Mansell went to his own attorney, retained him to prepare a deed, the attorney brought the deed to the hospital, Allen signed same with an almost illegible handwriting, the attorney acknowledged the deed, and Mansell filed same for record without advising any member of the family about the transaction. Allen’s personal attorney was not consulted, nor did Allen receive any independent counsel or advice from any other person.

The chancellor found that Allen was suffering from both physical and mental weaknesses as a result of his advanced age and infirmities, that grantor reposed confidence in Mansell and relied upon him in personal and business matters, and that a confidential and fiduciary relationship existed between them.

This Court held that a fiduciary relationship existed in In Re Estate of Bilello, 317 So.2d 916 (Miss.1975), and stated the following:

“In finding that there was a confidential or fiduciary relationship between the testatrix and her sister Lelia in the present case, the chancellor had before him substantial testimony showing that their relationship was more than sibling consanguinity. Evidence established that the testatrix visited Lelia almost every morning and frequently visited her again in the afternoon. The evidence supported the chancellor’s finding that the testatrix was ‘an alcoholic and was weak in mind and body’ when the will was drawn.
* * * * * *
As the chancellor recognized, the relationship between the testatrix and Lelia was not a conventional fiduciary relationship in a strict sense but, as stated in Ham v. Ham, 146 Miss. 161, 173, 110 So. 583, 584 (1926) quoting 2 Pomeroy, Equity Jurisprudence (4th ed.) § 956:
‘It is settled by an overwhelming weight of authority that the principle extends to every possible case in which a fiduciary relation exists as a fact, in which there is confidence reposed on one side, and the resulting superiority and influence on the other. The relation and duties involved in it need not be legal, it may be moral, social, domestic, or merely personal.’ ” 317 So.2d at 918-919.

See also Jones v. Singley, 242 So.2d 430 (Miss.1970) and Croft v. Adler, 237 Miss. 713, 115 So.2d 683 (1959).

We are unable to say that the chancellor’s finding of a fiduciary relationship was against the overwhelming weight of the evidence or was manifestly wrong. The fact that Allen may have had a close relationship or fiduciary relationship with other members of his family did not preclude such a relationship with the appellant.

Since there was a fiduciary relationship, a presumption arose that the deed executed by Allen to Mansell was invalid and the burden of overcoming the presumption was upon Mansell.

In Ham v. Ham, 146 Miss. 161, 110 So. 583 (1926), the rule, followed in subsequent cases, was stated as follows:

“When such a relation exists, and the parties thereto—
‘consciously and intentionally deal and negotiate with each other, each knowingly taking a part in the transaction, and there results from their dealing some conveyance or contract or gift, * * * the principle literally and directly applies. The transaction is not necessarily voidable, it may be valid, but a presumption of its invalidity arises which can only be overcome, if at all, by clear evidence of good faith, of full knowledge, and of independent consent and action.’ 2 Pomeroy Equity Jurisprudence (4th Ed.) § 957.
The burden of overcoming this presumption is on the party claiming under the conveyance, contract, or gift. Meek v. Perry, 36 Miss. 190; Hitt v. Terry, 92 Miss. [671] 710, 46 So. 829.” 146 Miss. at 173. 110 So. at 584-585.

We are of the opinion that the chancellor was not manifestly wrong in holding the appellant failed to meet the burden of proving that Allen was free from undue influence and that he had the mental capacity to execute the deed on January 5, 1974.

The judgment of the lower court, therefore, is affirmed.

AFFIRMED.

GILLESPIE, C. J., PATTERSON and IN-ZER, P. JJ., and SMITH, ROBERTSON, SUGG, WALKER and BROOM, JJ., concur.


source: Caselaw Access Project

license: Public Domain

text:
    J. D. VARNADO v. Linda Mae MITCHELL et al.
    No. 49405.
    Supreme Court of Mississippi.
    May 18, 1977.
    L. Terrell Simpson, Poplarville, for appellant.
    Williams, Williams & Montgomery, E. Bragg Williams, III, Poplarville, for appel-lees.
   Appeal from Chancery Court, Pearl River County; Howard L. Patterson, Jr., Chancellor.

Before INZER, P. J., and SMITH and BROOM, JJ..

AFFIRMED.

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


text:
    Greg E. MILSTID v. STATE of Mississippi.
    No. 49666.
    Supreme Court of Mississippi.
    May 18, 1977.
    Alfred Lee Felder, Pascagoula, for appellant.
    A. F. Summer, Atty. Gen. by Karen Gil-foy, Asst. Atty. Gen., Jackson, for appellee.
   Appeal from Circuit Court, Harrison County; J. Ruble Griffin, Judge.

Before INZER, P. J., and WALKER and BROOM, JJ.

REVERSED AND REMANDED.

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


text:
    Freddie Lee WRAGGS v. STATE of Mississippi.
    No. 50007.
    Supreme Court of Mississippi.
    May 18, 1977.
    Noel D. Crook, Ruleville, Ben L. Saucier, Indianola, for appellant.
    A. F. Summer, Atty. Gen. by Henry T. Wingate, Sp. Asst. Atty. Gen., Jackson, for appellee.
   Appeal from Circuit Court, Sunflower County; Arthur B. Clark, Jr., Judge.

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

AFFIRMED.

GILLESPIE, C. J., INZER, P. J., and SMITH, ROBERTSON, SUGG and BROOM, JJ., concur.


text:
    Danna Marie THOMPSON, a minor by her next friends William D. Saucier, Sr. and Murdess Marie Saucier v. C & J BUY AND SELL, d/b/a Alton Nettles and Charles N. Grice.
    No. 49327.
    Supreme Court of Mississippi.
    May 18, 1977.
    James J. Sideris, Gulfport, for appellant.
    Graves, Riley & Meadows, Richard B. Graves, II, Gulfport, for appellee.
   Appeal from Circuit Court, Harrison County; Floyd J. Logan, Judge.

Before INZER, P. J., SMITH and BROOM, JJ., and J. C. FEDUCCIA, Commissioner.

AFFIRMED.


text:
    Walter A. LOFTON v. GLASS CONTAINER CORPORATION et al.
    No. 49404.
    Supreme Court of Mississippi.
    May 18, 1977.
    James M. Abram, Patricia A. Catchings, Jackson, for appellant.
    Daniel, Coker, Horton, Bell & Dukes, Roger C. Clapp, Jackson, for appellees.
   Appeal from Circuit Court, Rankin County; Rufus W. Broome, Judge.

Before PATTERSON, P. J., and SUGG and WALKER, JJ.

AFFIRMED.


text:
    Ottway BARBEE (alias Jack E. Haley) v. STATE of Mississippi.
    No. 49920.
    Supreme Court of Mississippi.
    May 18, 1977.
    Ottway Barbee, pro se.
    A. F. Summer, Atty. Gen., by Wayne Snuggs, Sp. Asst. Atty. Gen., Jackson, for appellee.
   Appeal from Circuit Court, Leflore County; Arthur B. Clark, Jr., Judge.

Before PATTERSON, P. J., and SUGG and WALKER, JJ.

AFFIRMED.


text:
    DON BASS COMPANY v. TRANS-GLOBAL METALS, INC.
    No. 49445.
    Supreme Court of Mississippi.
    May 18, 1977.
    Binder, Lucas & Lohrmann, Jerome L. Lohrmann, William B. Howell, Jackson, for appellant.
    Brunini, Grantham, Grower & Hewes, Richard W. Dortch, Lawrence E. Allison, Jr., Jackson, for appellee.
   Appeal from Chancery Court, Hinds County; James Arden Barnett, Chancellor.

Before GILLESPIE, C. J., and ROBERTSON and LEE, JJ.

AFFIRMED.


text:
    Charles M. WATSON v. V. M. MOORE et al.
    No. 49440.
    Supreme Court of Mississippi.
    May 18, 1977.
    John L. Walker, Jr., Jackson, for appellant.
    John H. Downey, Eaves & Eaves, John Arthur Eaves, William A. Allain, Jackson, for appellees.
   Appeal from Circuit Court, Hinds County; Russel D. Moore, Judge.

Before GILLESPIE, C. J., and ROBERTSON and LEE, JJ.

AFFIRMED.


text:
    Homer BOUNDS v. STATE of Mississippi.
    No. 49712.
    Supreme Court of Mississippi.
    May 18, 1977.
    J. W. Kellum, Sumner, for appellant.
    A. F. Summer, Atty. Gen. by Wayne Snuggs, Sp. Asst. Atty. Gen., Jackson, for appellee.
   Appeal from Circuit Court, Quitman County; J. C. Feduccia, Judge.

Before INZER, P. J., and SMITH and BROOM, JJ.

AFFIRMED.


text:
    Percy JENKINS v. OGLETREE FARM SUPPLY COMPANY et al.
    No. 49764.
    Supreme Court of Mississippi.
    May 18, 1977.
    Laurel G. Weir, Philadelphia, for appellant.
    Joe Clay Hamilton, Meridian, for appel-lee.
   Appeal from Circuit Court, Newton County; O. H. Barnett, Judge.

Before PATTERSON, P. J., and WALKER and BROOM, JJ.

AFFIRMED.


text:
    S & S CONSTRUCTION COMPANY, INC. v. J. W. GUNN et al.
    No. 49474.
    Supreme Court of Mississippi.
    May 25, 1977.
    Price & Krohn, James E. Price, Corinth, for appellants.
    Marion D. Roten, Thomas E. Pegram, Jr., Ripley, for appellee.
   Appeal from Chancery Court, Tippah County; William H. Anderson, Chancellor.

Before PATTERSON, P. J., and SUGG and WALKER, JJ.

AFFIRMED.


author: EMBRY, Justice. EMBRY, Justice.

text:
    BANKERS LIFE AND CASUALTY COMPANY, a corp. v. Nell Davenport LONG.
    SC 1907.
    Supreme Court of Alabama.
    March 11, 1977.
    Rehearing Denied May 6, 1977.
    Ollie L. Blan, Jr., Spain, Gillon, Riley, Tate & Etheredge, Birmingham, for appellant.
    Leo E. Costello, Birmingham, for appel-lee.
   EMBRY, Justice.

The question in this case is whether or not an application for issuance of a life insurance policy contained sufficient information about applicant’s medical history to create a duty that the insurer inquire further into applicant’s medical history so the failure to do so would preclude insurer avoiding the policy on the ground of misrepresentation. We answer that there was sufficient information to put insurer on notice and therefore affirm judgment in behalf of the beneficiary.

Nell Long brought suit to recover the proceeds of a life insurance policy on her deceased husband. In her first action to recover, the jury awarded her $10,000, the stated value of the policy. The Court of Civil Appeals reversed and remanded for a new trial on the ground that the judgment rendered was so plainly contrary to the preponderance of the evidence as to be palpably erroneous. Bankers Life and Casualty Co. v. Long, 48 Ala.App. 570, 266 So.2d 780 (1972). On second trial, the insurer, Bankers Life, was granted summary judgment which was affirmed by the Court of Civil Appeals, Long v. Bankers Life and Casualty Co., 54 Ala.App. 604, 311 So.2d 324 (1974). This court reversed and remanded on the ground that the Appeals Court had applied the wrong standard of review in testing a motion for summary judgment in a retrial proceeding. Long v. Bankers Life and Casualty Co., 294 Ala. 67, 311 So.2d 328 (1975) and by that court remanded for new trial, 54 Ala.App. 729, 311 So.2d 331.

Upon new trial, Mrs. Long was rendered a $13,000 verdict in her favor. Bankers Life filed motion for judgment notwithstanding the verdict or for new trial, which was denied. Bankers Life appealed.

Bankers Life contends the insured, William B. Long, failed to list on an application for life insurance, prior diseases, visits to doctors and hospitalizations which were material to and increased the risk of loss to the insurer, thereby entitling Bankers Life to rescind and avoid the policy.

The decedent made written application for the policy in 1968. By the terms of the policy, the application, executed by decedent, insured, and the policy constituted the contract of insurance. The alleged misrepresentations in the application appear as follows:

“2. Has this person been hospitalized or had any medical or surgical treatment or checkups in the past 5 years? Yes
“If answer is ‘yes’ give full details below
"Sickness or Date Duration Operation Defect
"Hepatitis 1-12-66 6 mos. None
"Doctor's name and address Dr. Arthur M. Freeman c/o Medical Arts Bldg. Birmingham, Ala.
“3. Is this person in good health and free from any physical or mental impairment or disease? Yes”

Title 28, § 6, Code of Ala. (1940), which ' was repealed January 1, 1972, but was in effect when this cause of action arose and is therefore applicable in this case, provided:

“No written or oral misrepresentation, or warranty therein made, in the negotiation of a contract or policy of insurance, or in the application therefor or proof of loss thereunder, shall defeat or void the policy, or prevent its attaching, unless such misrepresentation is made with actual intent to deceive, or unless the matter misrepresented increase the risk of loss.”

After Mr. Long’s death, an investigation revealed that Mr. Long had been hospitalized and treated for cirrhosis of the liver during three visits to the hospital in Í966, totaling 93 days, and spread over an eight month period from January to August. Mr. Long died of cirrhosis of the liver.

Bankers Life contends that the evidence is undisputed that Mr. Long had cirrhosis of the liver at the time he made application for the policy; that he had been hospitalized and treated for cirrhosis prior to the application; had knowledge of the disease at the time of application; and that, had this information been listed in the application, Bankers Life would not’have issued the policy.

The rule in Alabama is that to defeat an insurance policy on the ground of misrepresentations in the application it must appear: (1) the misrepresentations were false, (2) made with actual intent to deceive or the matter misrepresented increased the risk of loss and (3) the insurer relied on them to its prejudice. Liberty National Life Insurance Co. v. Trammell, 255 Ala. 1, 51 So.2d 174 (1949).

An insurance company is entitled to all material information bearing upon the obligation it undertakes in issuing a policy. Liberty National Life Insurance Co. v. Hale, 285 Ala. 198, 230 So.2d 526 (1969).

Our law on this subject is in accord with the general rule that an intentional misrepresentation by the applicant of material facts relied on by the insurer permits the insurer to avoid the policy. The well recognized exception to this rule is: the policy is not avoided if the insurer knows the true facts, or the falsity of the statements, or has sufficient indications that would put a prudent person on notice so as to induce an inquiry which, if done with reasonable thoroughness, would reveal the truth. New York Life Insurance Co. v. Strudel, 243 F.2d 90 (5th Cir.Fla. 1957); 43 Am.Jur.2d, Insurance, § 741, p. 727.

The application asked for Long to give any hospitalization, medical, or surgical treatment within the past five years preceding the application. He listed his hospital stay as one six-month hospitalization beginning January 12,1966, when in reality there were three separate stays amounting to a little more than three months during the six month period. The medical records show that during the first two hospitalizations the diagnosis rendered was cirrhosis, alcoholic hepatitis, hepatitis and alcoholism. The third visit produced a diagnosis of cirrhosis of the liver. Hepatitis and cirrhosis are conditions or diseases of the liver, both varying as to the manner in which they affect the liver, what causes them, and the symptoms they produce. From Long’s medical record, it appears that he suffered from both conditions and that they were due to a common cause, alcoholism.

In addition to listing the fact that he had been hospitalized for hepatitis, Mr. Long also gave the name and address of his doctor. He failed to list cirrhosis together with hepatitis, as a sickness from which he suffered, and he affirmatively stated he was free from physical disease. However, in light of the information that was given— hospitalization, hepatitis, doctor’s name and address—we believe there was sufficient notice that he had suffered from, and was treated for, a liver disease, to put the insurer on sufficient notice to impose a duty of inquiry.

The insurer knew Long had been hospitalized in 1966 for a disease of the liver. The evidence is not contradicted that when Long completed the application the liver function tests to which he had been subjected showed his liver to be functioning normally. His physician informed him of this and that he, Long, seemed to be doing quite well in every way. Long had every right to believe that his liver disease was under control and thus the jury had ample evidence before it to conclude that he was not guilty of fraud in completing the application. The insurer also possessed the name and address of Long’s doctor through whom it can reasonably be assumed more information as to his condition would be made readily available; the application also contains consent for the insurer to obtain information and records about Long from any doctor or hospital.

Viewing the evidence in this posture we find this case to be within the stated exception to the general rule and therefore the insurer is not entitled to avoid the policy.

The judgment of the trial court is affirmed.

AFFIRMED.

BLOODWORTH, JONES and ALMON, JJ., and SIMMONS (Retired Circuit Judge sitting by designation of the Chief Justice), concur.

ON REHEARING

EMBRY, Justice.

The contentions of Bankers Life in its application for rehearing may be summarized as: Within the purview of Code of Ala., Tit. 28, § 6, Long, in his application for the policy, made a misrepresentation in writing, with actual intent to deceive, or misrepresented facts about his health that increased the risk of loss for which he was seeking insurance, or both. These contentions are not accurate.

As noted in the original opinion, Long answered “yes” to the question of whether he had been hospitalized or had any medical or surgical treatment or checkups within a five year period prior to his application. He gave Dr. Freeman’s name on the application. Dr. Freeman testified that on 6 March 1968 he discussed with Long the latter’s state of health. This was the day before Long completed his application. Dr. Freeman further stated he dictated a letter to Long on 8 March, following the discussion of 6 March, in which was contained the statement “ * * * All of your laboratory tests for liver disease are now within normal limits * * *.” On the basis of this and other evidence, certainly the jury had the right to conclude both that Long neither believed he was otherwise than in good health, and free from physical or mental impairment, and he made no misrepresentation with intent to deceive.

Bankers Life argues that our decision is irreconcilable with Herricks v. Mutual Life Insurance Co. of New York, 294 Ala. 446, 318 So.2d 683. Herricks is easily distinguishable from this case. Herricks was on appeal from summary judgment entered in behalf of the insurer. Herricks, had answered “no" to questions in the application:

“6. Are you, so far as you know:
a) In impaired physical or mental health?
b) Under any kind of medication or any diet?”

On the other hand, Long not only answered “yes” to whether he had been hospitalized or treated, he gave his doctor’s name, what he believed that he had suffered with in the past, but also answered truthfully, according to what he had been told by his doctor, about his health as of the date of his application.

APPLICATION FOR REHEARING OVERRULED.

BLOODWORTH, JONES and ALMON, JJ., and SIMMONS (Retired Circuit Judge sitting by designation of the Chief Justice), concur.


author: BEATTY, Justice.

text:
    Charles A. BOSWELL, etc. v. Christopher C. WHATLEY, etc., et al.
    SC 2073.
    Supreme Court of Alabama.
    April 22, 1977.
    Rehearing Denied June 3, 1977.

      William J. Baxley, Atty. Gen., Willard W. Livingston, Counsel, Dept, of Revenue and Asst. Atty. Gen., Philip C. Davis, Asst. Counsel, Dept, of Revenue and Asst. Atty. Gen., Ron J. Bowden, Asst. Counsel, Dept, of Revenue and Asst. Atty. Gen., John J. Breckenridge, Asst. Counsel, Dept, of Revenue and Asst. Atty. Gen., for appellant.
    Sam M. Johnston, Jr., and Robert G. Kendall, III, Johnston, Johnston & Kendall, Mobile, for appellee, Mobile Gas Service Corp.
   BEATTY, Justice.

This is an appeal from the denial of a permanent injunction against the Alabama Public Service Commission whose orders, it was contended, violated the terms of the Uniform Disposition of Unclaimed Property Act. We reverse and remand.

On March 23, 1976 the Alabama Public Service Commission issued its order to Mobile Gas Service Corporation directing that company to follow a certain procedure in making refunds to its customers. Those refunds resulted from orders of the Federal Power Commission directing United Gas Pipeline Company, the supplier, to make refunds for gas sold to Mobile Gas Service Corporation, and by it to its customers, during the period June 1, 1971 through April 5, 1974. The aggregate sum to be refunded was $792,036.00, plus interest earned, less expenses incurred in obtaining the refunds and the distributions.

Specifically, the order of March 23, 1976 stated:

The Commission desires that all of the net refunds, after the expenses herein-above allowed, shall be paid to customers of the utility and no portion thereof shall be allowed to remain in any special account or be otherwise retained by Petitioner, nor shall any such funds be allowed to escheat to the State of Alabama whereby customers of Petitioner are deprived of the benefits of the refunds hereby directed.
After the expenses hereinabove allowed, the entire principal and interest received from United shall be paid to customers of Petitioner and no portion thereof shall be allowed to remain in any special account or be otherwise retained by Petitioner, nor shall any such funds be allowed to escheat to the State of Alabama.
Refunds made to existing customers shall be based upon the test period consumption hereinabove directed in Paragraph 3 and shall exhaust the funds received from United from refunds. Any refunds made to former customers not covered under the test period shall be paid out of the contingency funds by check. If said refunds by check exceed the contingency fund, such excess shall be treated as a current operating expense of the Petitioner. If there is any excess in said contingency fund, it shall be handled as set out in Paragraph 8 of this Order.
All funds now remaining from the refunds ordered by the Commission on January 15, 1965, Informal Docket U-2127 and on July 26, 1972, Informal Docket U-2504, together with the sum of $2,500.00 from this refund, shall be held by Petitioner as a contingency fund from which to pay refunds claimed by prior customers or other claims not covered by this Order which Petitioner is found to be legally obligated to pay. In the event that such fund is insufficient to pay such claims, further amounts paid by Petitioner shall be treated as a current operating expense of the Petitioner. In the event that such fund is not completely expended, any remaining funds shall be held by Petitioner for distribution to its customers in accordance with future refund orders of this Commission.

The Commission amended its earlier order and made the following statements:

. No portion thereof shall accrue to the benefit of the Petitioner, nor shall any funds be allowed to escheat to the State of Alabama whereby customers of Petitioner are deprived of the benefits of the refunds thereby directed.
Because the amount involved will average less than $5.00 per customer, the Commission desires to preserve said fund from unnecessary expense. To this end the Petitioner is directed to credit the April, 1976 bills of its then existing residential and commercial customers a refund based upon mcf consumption and to use a test period of the six-month period ending February 29,1976. Except as further provided herein, only customers served during said six-month period who comply with the requirements of this order shall be entitled to said refunds, and no other present or former customers shall be entitled to receive any portion thereof.
. It is the intent of this Commission that all funds received by the utility from United from any refunds, present or past, after allowable expenses, shall be under the control of this Commission and shall be distributed to customers of the utility in accordance with this and with future orders of the Commission and no portion thereof shall accrue to the benefit of the utility, nor shall the orders of the Commission be so construed as to provide for any “unclaimed” funds which could escheat to the State of Alabama.

Following the issuance of this order, Mobile Gas began distributing this refund and continued until a temporary restraining order was issued. Mobile Gas moved to dissolve the temporary restraining order, and after a hearing on that motion the trial court dissolved it and issued a preliminary injunction which, after a hearing on the merits, was dissolved. The request for a permanent injunction was denied, and this appeal followed from the final decree issued on April 27, 1976. The decision was originally appealed to the Court of Civil Appeals and subsequently transferred to this Court.

The Commissioner of Revenue contends that the order of the Public Service Commission contravenes the terms of the Uniform Disposition of Unclaimed Property Act, Title 47, §§ 314-342, Alabama Code. Specifically, he maintains that the portions of the order not allowing the funds to es-cheat, and not allowing the orders to be “so construed as to provide for “unclaimed” funds which could escheat” is void as beyond the power of that body to declare, and because those portions of the order attempt to repeal the express provisions of Title 47, § 317, Alabama Code.

The appellees, on the other hand, maintain that this action by the Commissioner of Revenue against the Public Service Commission is a collateral attack upon its properly performed rate-fixing authority; that there was no proof of any threatened substantial injury or the absence of a legal remedy which would have justified the issuance of an injunction, and that, in any case, no injunction could have issued without impaneling a special court of three judges.

The matter of the circuit court’s power to issue the injunctive relief requested, without a special three-judge panel having been convened, was decided in Ex parte Alabama Textile Manufacturers Association, 283 Ala. 228, 215 So.2d 443 (1968). After reviewing the nature of orders as they apply to the statutes governing appeals by public utilities, this Court held that the injunction cases referred to in Title 48, § 101(1) do not apply to orders of the Alabama Public Service Commission dealing with “rates, fares or charges.” Because the order in question affects refunds of “charges” based upon “rates,” a three-judge court need not have been convened.

There is no question about the power of the legislature to legislate on the subject of abandoned property and its disposition, Sheppard v. Dowling, 127 Ala. 1, 28 So. 791 (1899); Newberry v. City of Andalusia, 257 Ala. 49, 57 So.2d 629 (1952), nor can that power be delegated. Wallace v. Board of Education of Montgomery County, 280 Ala. 635, 197 So.2d 428 (1967). Under its police power the legislature has created the Alabama Public Service Commission with specified powers and duties; however, like all statutory creations granted authority in derogation of common law, it has only the authority granted upon a strict construction of the statute creating it. Alabama Great Southern R. Co. v. Alabama Public Service Commission, 210 Ala. 151, 97 So. 226 (1923).

The statutes empowering the Commission with authority to regulate utilities, to fix their rate charges, and to determine their fair net return do not authorize the Commission to extinguish the property rights of those who are served by those regulating utilities. In particular, the legislature has chosen to eliminate from the language of the statutes containing the Commission’s powers any reference to unclaimed or abandoned property. That specific subject is encompassed in the Uniform Disposition of Unclaimed Property Act which, inter alia, expressly provides in Section 317:

The following funds held or owning [owing] by any utility are presumed abandoned:
(b) Any sum which a utility has been ordered to refund and which was received for utility services rendered in this state, together with any interest thereon, less any lawful deductions, that has remained unclaimed by the person appearing on the records of the utility entitled thereto for more than two years after the date it became payable in accordance with the final determination or order providing for the refund.

From the literal terms of this statute it is clear that the legislature has recognized the existence of a property right in sums “held or owing” by a utility. These become “abandoned” (after applying interest earned and deductions) at the expiration of two years following the refund order in which they are applicable, and as such their dispositions are governed by directions contained in Section 324 and those sections which follow it. In view of this plain legislative declaration, it is legally impossible for the Commission to declare, as it has attempted in its amended order, that its order shall not be “so construed as to provide for any ‘unclaimed’ funds,” for this would arrogate to the Commission a legislative power not only outside its authority but one plainly having been exercised by the legislature itself.

The powers of the Commission to determine whether refunds should be made, and to identify those customers to whom they should be made, are not in issue here; indeed, the appellant in brief concedes this much. But once the Commission makes a “final determination or order providing for a refund,” to use the statutory language, those customers, known or unknown, easily identified or difficult to locate, are entitled to their share which constitutes a chose in action. Peavy Lumber Company v. Murchison, 272 Ala. 251, 130 So.2d 338 (1961). Should these remain unclaimed for more than two years, the provisions of the Uniform Disposition of Unclaimed Property Act control them.

It follows, therefore, that the portion of the Public Service Commission’s order of April 8, 1976 which attempts to circumscribe, if not abrogate, the effect of Title 47, § 317, is void, and being void, is subject to this collateral attack by the Commissioner of Revenue. Alabama Water Co. v. City of Attalla, 211 Ala. 301, 100 So. 490 (1924).

The general principle which militates against the issuance of injunctive relief against a government agency cannot apply when such an agency acts outside its powers to threaten irreparable injury. Lehmann v. State Board of Public Accountancy, 208 Ala. 185, 94 So. 94 (1922). The complaint in this case incorporated the Commission’s orders of March 23, 1976 and April 8, 1976. These referred to funds received by the utility (Mobile Gas) from refunds, present or past, and “funds now remaining from refunds ordered by the Commission on July 26, 1976, Informal Docket U-2504. . .” These allegations, together with those to which we have alluded earlier, threaten irreparable injury to the Commissioner of Revenue, since without in-junctive relief he may be rendered unable to perform his obligations under the Unclaimed Property Act on behalf of those claimants, known or unknown, whose present property interests he is obliged to secure. Moreover, without injunctive relief, the terms of the order of April 8, 1976 could cause a situation which would thwart the Commissioner of Revenue, for there might be no funds available to former customers who could not be located within two years, but who would be eligible to make claims to the Commissioner thereafter.

For these reasons, the decree of the circuit court is reversed and the cause is remanded to that court for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

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


author: SENTELL, Clerk.

text:
    OPINION OF THE CLERK, Supreme Court of Alabama.
    No. 1.
    Supreme Court of Alabama.
    April 26, 1977.
   SENTELL, Clerk.

RULE 7, ALABAMA RULES OF JUDICIAL ADMINISTRATION DOCKET FEE ON PETITIONS TO MODIFY A FINAL DECREE

Mrs. Delores N. Pritchett, Circuit Clerk of Etowah County, has submitted to me the following inquiry:

Would you please advise me in writing as to what authority, if any, I have to collect a Docketing Fee on Petitions to Modify a Final Decree?

My answer to this question is given pursuant to the authority conferred on the Clerk of the Supreme Court by Section 6-105, Act. No. 1205, Acts of Alabama, 1975 Regular Session.

It is my opinion that Rule 7, Alabama Rules of Judicial Administration, considered with Sections 16-109, 16-110 and 16-111, Act No. 1205, supra, authorizes a circuit clerk to collect a docketing fee on petitions to modify a final decree.

The Alabama Rules of Judicial Administration, effective January 16, 1977, were adopted by the Supreme Court of Alabama on October 14,1976, pursuant to the authority granted by Section 6.11 of the Judicial Article (Amendment 328 to the Constitution of Alabama).

Rule 7, supra, is as follows:

Fees for Miscellaneous Filings
Any filing for which there is no express cost under the consolidated fee structure shall be treated as an original filing for cost purposes.

In my opinion, the words “Any filing” in Rule 7 have reference to the words “Cases filed” in Section 16-lll(c) of Act No. 1205, and should be read in connection with that section.

The part of Section 16-111, supra, pertinent to this opinion, reads as follows:

Amount of docket fees to be collected in civil cases.—
The docket fees which shall be collected in civil cases are:
* * * * * *
* * * * * *
(c) thirty-five dollars for cases filed in the circuit court; * * *
* * * * * *

In a legal sense, “case” is generally understood as meaning a judicial proceeding for the determination of a controversy between parties where rights are enforced or wrongs are prevented or redressed. State v. Montevallo Coal Mining Co., 29 Ala.App. 318, 197 So. 82, 85; Ex Parte Chesser, 93 Fla. 590, 112 So. 87, 90.

The filing of a motion to alter, amend or vacate a judgment under Rule 59(e), of the Alabama Rules of Civil Procedure, is not a “filing” under Rule 7, Alabama Rules of Judicial Administration.

In my opinion, a proceeding to modify a final decree, such as a decree of divorce concerning monthly alimony payments, child support and child custody on the basis of a change of circumstances since the final decree, is a case within the meaning of the words “cases filed” in Section 16-111(c), supra; and that a filing of a petition in such a proceeding is a “filing” under Rule 7, Rules of Judicial Administration.


author: JONES, Justice.

text:
    Dorothy H. CARON and Central Insurance Agency of Mobile, Inc. v. Ruth K. TEAGLE and Charles D. Teagle.
    SC 2115.
    Supreme Court of Alabama.
    April 29, 1977.
    Daniel G. Sayers, Marr & Friedlander, Mobile, for appellants.
    Charles C. Partin, III, Bay Minette, for appellees.
   JONES, Justice.

This case involves a dispute over title to property. Ruth and Charles Teagle, plaintiffs below, contracted to purchase from Central Insurance Agency and Dorothy Caron four lots which we will refer to as lots 11, 13, 16, and 18. Deeds to these lots were conveyed pursuant to separate agreements. There was one deed per lot, each of which recites a sales price of $14,200 and acknowledges receipt of $1400 as paid, leaving a balance of $12,800. The balance of the purchase price on all four lots was to be paid in monthly installments of $723.84. The Teagles made all of these payments, commencing in September of 1973 and. continuing through January, 1975. In addition to the down payment, the total amount expended by the Teagles was $12,305.26, including interest.

At trial, the Teagles testified that during August of 1973, September, November, and December of 1974, and January and February of 1975, oral agreements were entered into by the Teagles and Caron. The effect of these agreements was that either the Carons (Dorothy and husband, Frank) would refund all of the principal and interest to the Teagles or the Carons would allow the Teagles to apply the money paid to one lot of the Teagles’ choice. Caron denies that any meetings occurred except the meeting of February, 1975, at which the Teagles executed and delivered deeds conveying each of the four lots back to the original grantors.

The Teagles further testified that during the November, 1974, meeting, Frank Caron told them that they could apply all the money paid to date on one lot of their choice and the Teagles chose lot 11. In February, according to the Teagles, Frank Caron told them to meet him and bring their vendor’s lien deeds. Caron was to bring a deed to lot 11. At this meeting, Caron told the Teagles that it was necessary for them to give him their deeds and convey to him their equity in the four lots before he could release the lien on lot 11.

The Teagles testified that, notwithstanding their full compliance with this oral agreement reached between the parties, Caron refused to vest them with a fee simple title in lot 11.

Caron, as previously stated, denies that any such agreement existed. He testified that the only option offered the Teagles was the “payment of interest only during a certain period of time.” This, according to Caron, the Teagles refused and, instead, returned the lots. Furthermore, Caron testified that he only allowed the Teagles to return the lots so that he would not have to institute foreclosure proceedings against the Teagles.

This declaratory judgment action was tried ore tenas before the trial Judge. In their complaint, the Teagles asked the trial Judge to (1) declare the deed, transferring their interest to Caron, void because it was not acknowledged before an officer authorized to take acknowledgments; or, in the alternative, declare it void for lack of consideration, and (2) declare that the Teagles are possessed of an equity in lot 11 and are entitled to receive a deed upon payment of the balance due under the contract of purchase. Finally, the Teagles had a request for general equitable relief.

Caron’s answer denied that any oral agreement had been made, and, alternatively, that any oral agreement would be void because of the Statute of Frauds.

Upon completion of the trial, the Teagles were allowed to amend their complaint to include an action for fraud. The Carons duly objected. The trial Judge ordered the Carons and Central Insurance Agency to convey title in lot 11 to the Teagles upon the payment of $1,367.33 — the balance due on lot 11 if the Teagles applied the money previously paid on the four lots. The trial Judge further ordered the Teagles to convey their equitable interests in the rest of the lots back to the Carons and Central Insurance. In essence, the trial Judge ordered that the February, 1976, agreement be specifically performed.

The issue is twofold: (1) Whether the trial Judge was correct in allowing the Tea-gles to amend their complaint at the close of the evidence, and (2) if not, are there any other grounds supported by the evidence which would allow us to affirm the trial Judge? We answer “No” to both questions.

I.

Rule 9(b), ARCP, states the rule for pleading fraud as follows:

“In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be plead with particularity.”

An examination of the Committee Comments to Rule 9(b) reveals that the purpose of this rule is to give fair notice to the opposing party. There seems to be little doubt that the Teagles’ original complaint, prior to amendment, did not satisfy this notice requirement. Counsel for the Tea-gles contend that the trial Judge was empowered to permit the amendment pursuant to Rule 15(b), ARCP. Under this rule, if the party opposing the amendment objects, but fails to persuade the court that he will be prejudiced in maintaining his claim or defense, the Court must then grant leave to amend the pleadings to conform to the evidence. See 6 Wright & Miller, Federal Practice & Procedure, Civil, § 1495 (1973).

It is obvious that the Carons failed to persuade the trial Judge that prejudice would result from the amendment. We think, however, that, under the circumstances of this case, prejudice necessarily resulted. The two rules must be considered together. The purpose of Rule 9(b) is to provide adequate notice to the opposing party of any claim for fraud so that he may properly prepare his case, and 15(b) recites that an amendment may be allowed over the objection of the opposing party only when the trial judge is satisfied that no prejudice results.

Thus, when these rules are read together — in harmony — and applied to the facts of this case, it becomes apparent that the defendants were indeed prejudiced. The Tea-gles’ complaint — to which an answer was filed and on which issue was joined — contains no reference to an allegation for fraud. To allow the Teagles to amend their complaint under Rule 15(b) to include a claim for fraud at the close of the evidence would subvert the purpose and intent of Rule 9(b).

This is not to say that, under all circumstances, Rule 15(b) precludes the addition by amendment of theories or claims not covered by the original pleadings, nor pleadings at the time of trial (including pre-trial orders). Indeed, we are not to be understood as holding that, under appropriate circumstances, a claim for fraud could not be added by amendment even after trial under Rule 15(b). Certainly, by the very terms of the rule, where the issue of fraud “[has been] tried by express or implied consent of the parties” — and thus no prejudice results — it would not be error to allow the moving party to amend his claim to conform to the evidence pursuant to 15(b). See, e. g., Associate Financial Service Co., Inc. v. First National Bank of Mobile, 292 Ala. 237, 292 So.2d 112 (1974).

But where, as here, the defendants had no notice by way of pleadings, either before or during trial, of any claim of fraud, and the record affirmatively shows that the defendants did not consent, expressly or impliedly, to a trial of this issue, we are constrained to hold that the trial Court erred in allowing the amendment. It necessarily follows, then, that the trial Court’s decree cannot be sustained under this aspect, or theory, of the case.

II.

Thus, we are faced with a second issue: Whether there is any competent evidence which would support another theory for recovery. The only other theory advanced by the Teagles, and the only one we can find, is that this was an oral agreement without the Statute of Frauds. With this, we cannot agree. We can find no evidence in the record to support the findings that the Teagles have satisfied Tit. 20, § 3, Code. This statute requires:

“In the following cases, every agreement is void, unless such agreement, or some note or memorandum thereof, expressing the consideration, is in writing, and subscribed by the party to be charged therewith, or some other person by him thereunto lawfully authorized in writing:
* * *
“(5) Every contract for the sale of lands, tenements or hereditaments, or of any interest therein, except leases for a term not longer than one year, unless the purchase money, or a portion thereof be paid, and the purchaser be put in possession of the land by the seller.”

The exception to this rule is if (1) payment of the purchase price has been made after the alleged oral agreement, and (2) actual possession by the purchaser. See Reynolds v. Bryant, 281 Ala. 372, 202 So.2d 734 (1967); Quinlivan v. Quinlivan, 269 Ala. 642, 114 So.2d 838 (1959).

There is no evidence which shows that the Teagles made any payments after the alleged oral agreement of February 22, 1975, or that they were in actual possession of lot 11.

Counsel for the Teagles seeks to avoid the operative effect of the Statute of Frauds by asserting that this was not in fact an agreement for the sale of interest in land; that the sale had occurred in the original transaction as evidenced by the four deeds; and that this subsequent agreement was, in reality, a modification of the earlier contract whereby the Teagles, for the payment of the balance due on a single lot, were to retain title to lot 11 and reconvey title to the remaining three lots. In other words, the Teagles contend that the February, 1975, oral agreement is not voided by the Statute of Frauds because it was in substance, though not in form, a contract for recission and not a contract for sale of land.

Although this argument is ingenious and in the highest tradition of our adversary system, we are constrained to reject it. The Teagles’ own version of the transaction is to the effect that they conveyed all four lots back to the original grantors with the understanding that, upon payment of the balance of the full purchase price for one lot, the Carons and Central Insurance Agency would reconvey to them lot 11. While the total effect was to cancel or rescind portions of the earlier transaction, its accomplishment was by way of conveyance of title to real property, and this is the essence of the subject matter embraced in the Statute of Frauds. To be sure, the evidence of the “swearing match” manifested in the record of these proceedings is the policy reason on which the Statute of Frauds is grounded. Kyle v. Jordan, 196 Ala. 509, 71 So. 417 (1916).

Because we find that the order permitting the amendment to include fraud constituted error, and because we can find no evidence to support the trial Judge’s decree on any other reasonable aspect of the claim, the case is reversed and remanded.

REVERSED AND REMANDED.

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

      . Although this fact is garnered from the trial Court’s decree, the record is unclear as to how the court arrived at this figure. At any rate, the parties do not appear to disagree on this point.

      . Counsel for appellees forthrightly acknowledge that there were only two theories available to the trial Court under the evidence upon which the final decree can be sustained:
      (1) Fraud, which is dependent upon the propriety of the trial Court order allowing the injection of the claim by amendment following the close of the evidence.
      (2) Breach of the agreement to convey lot 11, which is dependent upon the operation vel non of the Statute of Frauds.

      . Because this case is being remanded for a new trial, we deem it inappropriate to discuss in detail the evidentiary basis for the claim of fraud.


text:
    W. F. HAMILTON v. Dorothy Villar MAYER et al.
    SC 2221.
    Supreme Court of Alabama.
    April 29, 1977.

      Eric G. Bruggink, of Hardwick, Hause & Segrest, Dothan, for appellant.
    Edward Jackson, Dothan, for Robert H. Hamilton, individually and as executor.
   JONES, Justice.

This appeal presents a single issue: When there is insufficient personal property for the payment of the debts of an estate, does the executor have the sole and exclusive right to sell the real estate for the payment of the debts? Or, stated in the context of appellant’s contention, does a complaint for “Sale of Real Estate and Division of Proceeds,” filed in circuit court by a devisee who. is not the executor under the will, take priority, because of an earlier filing, over a “Petition for Sale of Personal and Real Estate for Payment of Debts and Division,” alleging insufficiency of personal property for payment of debts?

We answer: “Yes,” the executor under the will does have the exclusive right under these circumstances to administer the estate, including the selling of the realty for the payment of debts and expenses of administration and division of the net proceeds among the devisees; “No,” the prior filing in circuit court of a bill for sale and division does not, under these circumstances, take priority or pre-empt the executor’s right to administer the estate. We affirm.

A brief factual statement will clarify this issue. On December 22, 1975, Maggie Rogers died leaving a will naming as devisees Dorothy V. Mayer, Robert H. Hamilton, William P. Hamilton, and Porter H. Hamilton. On February 17, 1976, Letters Testamentary were granted to Robert H. Hamilton as executor. The testator owned at the time of her death a house and two lots and miscellaneous personal property. The value of the claims filed against the estate exceeded the value of the personalty.

At 11 o’clock in the morning on August 30, 1976, William F. Hamilton filed in the Circuit Court of Houston County a sworn complaint for the “Sale of Real Estate for Division of the Proceeds.” At 4:01 p. m., August 30, 1976, Robert H. Hamilton filed in the pending estate in the Probate Court of Houston County a sworn “Petition for Sale of Personal and Real Estate for Payment of Debts and Division,” alleging that the personal property was insufficient to pay the claims, debts, and expenses of the administration of the estate and asking for authority, as executor, to sell the personal and real property to pay the claims and expenses of administration and to distribute the remaining proceeds under the terms of the will. On August 31, 1976, William F. Hamilton petitioned for removal of the administration of the estate to the circuit court. This appeal challenges the circuit court’s order granting the executor’s motion to dismiss the complaint of William F. Hamilton.

We agree with the appellant that it is well settled that when there is no need for real estate to be sold to satisfy the administration of the estate, an heir (or devisee) has a right to a sale for division. Likewise, if an heir petitions the circuit court for the removal of the administration from the probate court, the circuit court may do so to better administer the estate.

Tit. 61, § 243, Code, provides:

“Lands may be sold by the executor, or by the administrator with the will annexed, for the payment of debts, when the will gives no power to sell the same for that purpose, and the personal estate is insufficient therefor.”

Boyte v. Perkins, 211 Ala. 130, 99 So. 652 (1924), interprets this and related statutes:

“All the real estate of a decedent, subject to dower and homestead, is assets of the estate subject to the payment of debts, if the personalty is insufficient for that purpose. The administrator is a trustee charged with the duty to take possession of the real estate, rent it, and, in due course, sell it, if need be, for the payment of debts.
H * * *
“On the face of these statutes it appears there may be occasion to sell the property, incapable of division but of greater value than the homestead right, and that this sale shall be in course of administration — that is to say, by the administrator in the execution of the trust imposed by law. There are two occasions when the administrator is empowered to sell the lands of the decedent. One is for division among the heirs of the estate, when the lands cannot be equitably divided. In that case one or more adult heirs must become the actor by filing a written consent to the sale. [Tit. 61, § 245, Code.] The other is when the personal property is insufficient to pay debts, and it is necessary to resort to the lands for that purpose. This duty is mandatory, part of the general duty to faithfully administer the estate. In this proceeding the administrator represents the creditors as opposed to the heirs or the ‘widow claiming to retain them until dower is assigned.’ Clark v. Knox, 70 Ala. 607, 622 (45 Am. Rep. 93). This does not mean he owes no duty to the heirs in the conduct of the sale and disposition of the proceeds. In that regard he is trustee for the heirs also. Their interest may be of greatest concern — as in the case of a solvent estate where they stand to lose most by any default of the administrator.
“As long, however, as there are outstanding debts to be paid, and no personal property to pay them, it is his duty to intercept the rents and sell the lands, if need be, to pay creditors. He cannot be controlled by the heirs, nor take orders from them. The duty and responsibility is upon the administrator.”

In Ex parte Stephens, 233 Ala. 167, 170 So. 771 (1936), one of the heirs filed a Bill for Sale for Division. Subsequently, an administrator was appointed by the probate court who filed a petition alleging the insufficiency of the personalty to pay debts and praying for the sale of the real estate. The Stephens Court held that the administrator alone can sell the real property for the payment of debts; that the removal of an administration to the circuit court does not eliminate a petition filed in the probate court by the personal representative; and that, upon request, the circuit court may proceed with the personal representative’s petition to sell the real property for payment for debts. See also Austin v. Eyster, 242 Ala. 402, 6 So.2d 892 (1942).

Counsel for William F. Hamilton, appellant, has cited a line of cases exemplified by Nelson v. Atkins, 215 Ala. 88, 109 So. 882 (1926), which held that an heir, by virtue of an earlier filing, is entitled to partition of the real property regardless of the pending administration. Ex parte Stephens addresses itself to Nelson, saying:

“The respondent seems to think that the case of Nelson et al. v. Atkins, 215 Ala. 88, 109 So. 882, supports his contention. We do not think so. It is rather an authority supporting the conclusion here reached. In that case, there was no petition pending by the administrator for the sale of the lands for the payment of debts; and no suggestion was made by the administrator that a sale of the land in the administration proceedings would be necessary ‘on any account.’ ”

For a recent case giving priority to the first to file, where there were no debts to be paid from the sale of the realty, see Estate of Autry v. McDonald, Ala., 332 So.2d 377 (1976).

By amendment to the original petition, William F. Hamilton claims a special equity, alleging that the executor has taken personal property belonging to the Estate out of Alabama. We have been directed to no authority, nor have we found any, that holds an heir or devisee is without sufficient remedy within the pending administration for such an alleged wrongdoing of the personal representative of the Estate. Infidelity on the part of the executor is fully redressable in the pending administration, and such an allegation gives no right of itself for the maintenance by devisee of a petition for sale and division; nor is the position of the devisee enhanced by a prayer in the petition for the payment of the debts of the estate. This latter prerogative is a responsibility belonging exclusively to the one to whom the administration of the Estate has been entrusted — the executor.

The two rules — (1) priority for first to file where there are no debts, and (2) exclusive right of personal representative where personalty is insufficient to pay debts — are both grounded in and totally consistent with the fundamental law of property. In order that real property be vested in someone at all times, title vests immediately upon death of the fee holder, whether title passes by will or statutory intestacy.

If there are no debts, the personal representative may, upon certain conditions (consent of an heir), bring partition proceedings, but such right is not superior to that of an heir or devisee. In other words, the first to file takes priority in like manner as in any other partition proceeding. On the other hand, if the sale of real property is required for the payment of debts, the right of the personal representative to possession of realty for purposes of administration, when such right is asserted, dominates and intercepts the descent of lands to the heirs. Ex parte Stephens, supra. The orderly administration of judicial proceedings, coupled with the statutorily imposed responsibilities upon the personal representative for the faithful discharge of his duties, mandates this latter exception to, or variance from, the first-stated rule.

AFFIRMED.

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


text:
    OPINION OF THE CLERK, Supreme Court of Alabama.
    No. 3.
    Supreme Court of Alabama.
    May 4, 1977.
   SENTELL, Clerk.

RULE 7, ALABAMA RULES OF JUDICIAL ADMINISTRATION FILINGS FOR DOCKET FEE- PURPOSES

Mr. Charles Y. Cameron, Administrative Director of Courts, has requested my interpretation “of which filings are contemplated by Rule 7 of the Alabama Rules of Judicial Administration as being original filings for docket fee purposes.”

My answer to this inquiry is given pursuant to the authority conferred on the Clerk of the Supreme Court by Section 6-105, Act No. 1205, Acts of Alabama, 1975 Regular Session, to give his opinion in writing on any question of the interpretation of any rule of administration promulgated by the Supreme Court.

It is my opinion that Rule 7, Alabama Rules of Judicial Administration, considered with Sections 16-109, 16-110 and 16-111, Act No. 1205, supra, contemplates that a petition to modify a final decree and a petition for rule to show cause in a contempt proceeding shall be treated as an original filing for docket fee purposes; and that the filing of a third-party complaint shall not be treated as an original filing.

The Alabama Rules of Judicial Administration, effective January 16, 1977, were adopted by the Supreme Court of Alabama on October 14,1976, pursuant to the authority granted by Section 6.11 of Article VI of the Constitution of Alabama, as amended (Amendment 328 to the Constitution of Alabama).

Rule 7, supra, is as follows:

Fees for Miscellaneous Filings —
Any filing for which there is no express cost under the consolidated fee structure shall be treated as an original filing for cost purposes.

In my opinion, the words, “Any filing,” in Rule 7 have reference to the words, “Cases filed,” in Section 16-111(c) of Act No. 1205, supra, and should be read in connection with that section.

The part of Section 16-111, supra, pertinent to this opinion, reads as follows:

Amount of docket fees to be collected in civil cases.—
The docket fees which shall be collected in civil cases are:
. (c) thirty-five dollars for cases filed in the circuit court .

This opinion is not intended to cover all proceedings in which a question may arise as to the filing fee under Rule 7, Rules of Judicial Administration. The three cases discussed are illustrative of my opinion that in order for a filing fee to be charged under Rule 7, Rules of Judicial Administration, the proceeding must constitute a “case” within the meaning of Section 16-111.

Petition to Modify a Final Decree

Please see Opinion No. 1, dated April 26, 1977, wherein I stated that in my opinion a proceeding to modify a final decree such as a decree of divorce concerning monthly alimony payments, child support and child custody on the basis of change of circumstances since the final decree, is a case within the meaning of the words,- “Cases filed,” in Section 16-111(c), supra, and that a filing of a petition in such a proceeding is a “filing” under Rule 7, Rules of Judicial Administration.

Petition for Rule to Show Cause in a Contempt Proceeding

The rule in Alabama concerning contempt proceedings has been stated as follows:

It has been held that a proceeding to punish for other than direct contempt is a distinct and independent proceeding as much so as a new suit and necessitates the giving of notice of all proceedings. Robertson v. State, 20 Ala.App. 514, 521, 104 So. 561, 567 (1924); International Brotherhood of Electrical Workers et al. v. Davis Constructors and Engineers, Inc., et al., Ala.1976, 334 So.2d 892; See also Musgrove v. U. S. Pipe & Foundry Company, 290 Ala. 156, 274 So.2d 640 (1972).

In Alabama, disobedience to the order of a court is an indirect contempt, whereas, contempt committed within the presence or so near the court as to interrupt its proceedings is a direct contempt. See In re Tarpley, 293 Ala. 137, 300 So.2d 409.

In my opinion, a proceeding for contempt for failure to comply with the decree of a court is a “case” within the meaning of the words, “Cases filed,” in Section 16-111(c), supra, and the filing of a petition for rule to show cause in such a proceeding is a “filing” under Rule 7, Rules of Judicial Administration.

Third-Party Complaint

Rule 14, Alabama Rules of Civil Procedure, provides for third-party practice. It states, among other things, the following:

At any time after commencement of the action a defending party, as a third-party plaintiff, may cause a summons and complaint to be served upon a person not a party to the action who is or may be liable to him for all or part of the plaintiff’s claim against him.

Since Rule 14, Alabama Rules of Civil Procedure, is based on Rule 14, Federal Rules of Civil Procedure, it is proper to give attention to the way that the federal courts have treated Rule 14.

It has been held that a proceeding on a third-party plaintiff’s claim under Rule 14 is an ancillary proceeding incidental to the main action and that no separate ground of jurisdiction is required. United States v. Acord et al., 10 Cir., 209 F.2d 709. The great weight of authqrity is in accord with this holding. 3 Moore’s Federal Practice, ¶ 14.26 (2nd Ed.)

The United States Circuit Court of Appeals for the Fifth Circuit, in Falls Industries, Inc. v. Consolidated Chemical Industries, Inc., 258 F.2d 277 (1958), made it clear that the third-party proceeding is not a separate case in these words:

Its purpose is to reduce litigation by having one lawsuit do the work of two.

An impleader under Rule 14 requires that the liability of a third party be dependent upon the outcome of the main claim. United States v. Joe Grasso & Son, Inc., 380 F.2d 749 (5th Cir., 1967); Falls Industries, Inc. v. Consolidated Chemical Industries, Inc., supra; Southeast Mortgage Company v. Mullins, 514 F.2d 747 (5th Cir., 1975).

It is significant that the United States District Courts do not charge a filing fee on the filing of third-party complaints under Section 1914, Title 28, U.S.Code, which provides as follows:

The clerk of each district court shall require the parties instituting any civil action, suit or proceedings in such court, whether by original process, removal or otherwise, to pay a filing fee of $15, except that on application for a writ of habeas corpus the filing fee shall be $5.

Section 16-110, Act No. 1205, Acts of Alabama, 1975 Regular Session, provides for the collection of the consolidated filing fee at the time of filing. A third-party proceeding is not considered an independent case unless there is a severance under Rule 21, Alabama Rules of Civil Procedure. Key v. Robert M. Duke Insurance Agency et al., Ala.1976, 340 So.2d 781; Central of Georgia Railway v. Riegel Textile Corp., 426 F.2d 935, 8 A.L.R.Fed. 701 (5th Cir., 1970).

In my opinion, a third-party proceeding is not a “case” within the meaning of the words, “Cases filed,” in Section 16-111(c), supra; and a filing of a third-party complaint is not a “filing” that authorizes a docket fee at the time of filing under Rule 7, Rules of Judicial Administration.


author: FAULKNER, Justice.

text:
    The PENSION FUND OF the CHRISTIAN CHURCH v. William S. LUCAS.
    SC 1965.
    Supreme Court of Alabama.
    May 6, 1977.

      Roscoe Roberts, Jr., Watts, Salmon, Roberts, Manning & Noojin, Huntsville, for appellant.
    Philip A. Geddes, Huntsville, for appellee.
   FAULKNER, Justice.

This is an appeal from a judgment awarding a member of a pension plan the contributions made by the member to the plan, plus those made by the church on behalf of the member. We reverse.

The sole issue in this case is whether Lucas is entitled to the contribution made by the church on his behalf, upon his withdrawal from the pension plan. The answer is, no, he is not.

Under the pension plan a member contributes 3% of his salary, and the church contributes an amount equivalent to 9% of the member’s salary.

Lucas joined the plan in 1959. On December 1, 1972, he left the church, and elected to leave his contributions with the fund. As of that date he had contributed $2,807.34 and the church had contributed $8,454,12 on his behalf, making a total of $11,261.46 in contributions to the fund.

In July, 1974, Lucas filed suit in assump-sit demanding refund to him of $11,261.46. The pension fund, by answer, said it would tender him the contribution made by him, should he elect to “withdraw or disavow his election.”

Section III of the plan provides for the payment of dues (contributions) by the member and the church as follows:

“1. MEMBER DUES: The dues of ' the member shall be amounts equivalent to 3 per cent on the monthly salary basis,
“2. CHURCH DUES: The dues of the church, or other salary-paying organization (hereinafter referred to as church), shall be amounts equivalent to 9 per cent of the monthly salary basis.”

Section IV 3. a. provides for return of member dues upon termination of service:

“3. TERMINATION OF SERVICE: a. A member ceases to be eligible for active membership by withdrawal from the active service of Disciples of Christ, and he may, upon his demand or upon the action of the Trustees, at any time after such withdrawal receive a sum equal to the total amount of his basic member dues payments, with interest credits at such rates as shall have been fixed from time to time by the Trustees, and he shall have no further claim upon the Fund.”

We hold that Lucas is not entitled to refund of the amount contributed on his behalf by the church. We find no evidence of any undue influence, fraud or mistake, as stated in brief by Lucas.

REVERSED AND RENDERED.

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


text:
    Shirley CALDWELL and Joe Edward Caldwell v. BROWN SERVICE FUNERAL HOME et al.
    SC 2023.
    Supreme Court of Alabama.
    May 6, 1977.
    Rehearing Denied June 3, 1977.

      Gordon L. Ladner, Lipscomb & Lipscomb, Bessemer, for appellants.
    James B. Kierce, Jr., Stone, Patton & Kierce, Bessemer, for appellee.
   FAULKNER, Justice.

This is an appeal from a summary judgment for the defendant entered in an action by Shirley and Joe Caldwell, a divorced couple, against Gwin-McCollum Funeral Home, Inc. for breach of contract. We reverse and remand.

In September, 1973, the Caldwells sought the services of Gwin-McCollum Funeral Home, Inc. for the burial of their 8 year old son. Joe Caldwell signed a statement and an invoice for the purchase of a casket and a vault and for various itemized services for a total of $860.00.

Following the graveside service, but while the Caldwells and others were present, employees of the funeral home attempted to lower the casket into the vault. The vault was too small and the Caldwells had to return the next day for another service and burial. Shirley Caldwell was allegedly adversely affected by the delay and testified in her deposition that as a result she experienced insomnia, nervousness, headaches and general depression and was unable to work for a period.

The lower court granted the funeral home’s motion for summary judgment and the Caldwells appeal.

The dispositive issue is whether the Cald-wells are barred from bringing this action. We hold that they are not and that the summary judgment is due to be reversed and remanded.

The Caldwells clearly allege in their complaint a breach of contract action.

“The plaintiff need state only a claim for relief containing a short and plain statement of the claim showing that the pleader is entitled to relief and a demand for judgment for the relief to which he deems himself entitled. Applying this to a breach of contract action, the plaintiff need only allege the existence of a valid and binding contract . . . .” Berry v. Druid City Hosp. Bd., 333 So.2d 796 (Ala.1976) (citations omitted).

Section 2-315 of the Alabama Commercial Code provides that,

“Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying oh the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.”

Here the funeral home knew that the Cald-wells were purchasing a vault for the casket of their son and that they were relying on the seller’s judgment to furnish suitable goods. As a professional in this business, the seller could be expected to be aware of any size requirements for the vault to hold the casket which the seller also sold. This implied warranty of fitness was neither excluded nor modified in any way by the funeral home. Moreover, under § 2-715 of Title 7A, the Caldwells may be entitled to incidental and consequential damages resulting from the funeral home’s breach.

We hold that the funeral home has not shown as a matter of law that the Caldwells cannot prove their case. The party moving for summary judgment must clearly establish that the other party cannot recover under any discernible circumstances. Folmar v. Montgomery Fair Company, Inc., 293 Ala. 686, 309 So.2d 818 (1975).

REVERSED AND REMANDED.

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


author: PER CURIAM. JONES, Justice

text:
    In the Matter of Kenneth R. CAIN v. The BOARD OF COMMISSIONERS OF the ALABAMA STATE BAR.
    SC 2071.
    Supreme Court of Alabama.
    May 6, 1977.
    Rehearing Denied June 3, 1977.
    George E. Trawick, Ariton, for petitioner.
    William H. Morrow, Jr., Montgomery, Gen. Counsel, for Board of Commissioners of the Alabama State Bar.
   PER CURIAM.

Attorney Kenneth R. Cain petitions for review of a ruling of the Board of Commissioners of the Alabama State Bar finding him guilty of professional misconduct and suspending him from the practice of law for 18 months without automatic reinstatement. We affirm.

On December 5,1975, the Grievance Committee of the Alabama State Bar filed 58 disciplinary charges against Cain. The Board, after studying the Grievance Committee’s exhibits and the transcript of testimony taken before a specially appointed commissioner and hearing oral arguments by Cain and William H. Morrow, Jr., General Counsel for the Alabama State Bar, dismissed or found Cain not guilty of 39 of the charges and found him guilty of 19 charges.

Cain was found guilty of five violations each of Rules 27 and 33, Buies Governing the Conduct of Attorneys in Alabama, for misappropriation of the funds of a client:

“No person heretofore or hereafter admitted to practice law in Alabama, shall
* * * * >ft sf:
“27. Misappropriate the funds of his client, either by failing to pay over money collected by him for his client, or by appropriating to his own use funds entrusted to his keeping, provided the circumstances attending the transaction are such as to satisfy the Board that the attorney acted in bad faith or with fraudulent purpose.
* * * * 5{C #
“33. Be guilty of any deceit or wilful misconduct in his profession. * * * ”

Cain was also found guilty of nine violations of DR 1-102(A)(4), Code of Professional Responsibility of the Alabama State Bar, for false testimony before the Grievance Committee:

“(A) A lawyer shall not:
(4) Engage in conduct involving dishonesty, fraud, deceit, or misrepresentation, nor be guilty of wilful misconduct. * * * ”

There follows a brief account of the acts upon which the action of the Board is predicated.

Cain formed the Mighty Tidy Company, an Alabama corporation. Although Cain sold his interest in Mighty Tidy to his law clerk shortly before the events in question, he continued, at all times pertinent to this inquiry, to dominate and control the company. He admitted in his testimony that Mighty Tidy was his alter ego.

As attorney for Audrey Brenda Walding in a divorce suit, Cain prepared a trust agreement dated February 27,1973, naming himself as trustee for the minor children of Mrs. Walding and providing that Mr. Wald-ing would pay to him as trustee $7,500. On or about March 2, 1973, Mr. Walding’s attorneys delivered to Cain a check in the sum of $7,500, payable to him as trustee for the children. The divorce court incorporated the trust agreement into the final decree of divorce on March 13, 1973.

On March 16, Cain negotiated the check at the First National Bank of Birmingham, the payee bank, and received a cashier’s check for $6,500 and $1,000 in cash.

On March 19, Cain negotiated the $6,500 cashier’s check at the Enterprise Banking Company, Enterprise, Alabama, and received a cashier’s check for $4,500 and $1,000 in cash. He deposited $1,000 to the checking account of Mighty Tidy.

On March 23, Cain negotiated the $4,500 cashier’s check at the Enterprise Banking Company, $3,500 being deposited to the checking account of Mighty Tidy and $500 to the checking account of the Walding Trust and $500 being received in cash.

In 1974, an action for an accounting was filed against Cain by Mr. Walding. Cain claimed that he had invested the trust funds in accounts receivable of Mighty Tidy. The trial court found that the purported investments were improper and permitted the beneficiaries to surcharge Cain. The trial court also disallowed some of the payments which Cain had made to Mrs. Walding as not being for the benefit of the children. The Court of Civil Appeals affirmed the trial court’s judgment, holding, inter alia, that Cain had violated his fiduciary duty by self-dealing. Walding v. Walding, 56 Ala.App. 181, 320 So.2d 687 (1975).

Before the Grievance Committee, Cain testified that he had discussed with Mrs. Walding the various ways in which the trust funds might be invested and that he had recommended the purchase of accounts receivable from Mighty Tidy because he could control the actions of Mighty Tidy’s president and knew that he would do what was necessary to protect her interest.

The Board of Commissioners found Cain guilty of the following acts of misappropriation:

(1) depositing $1,000 on March 19, 1973, to the account of Mighty Tidy;
(2) depositing $3,500 on March 23, 1973, to the account of Mighty Tidy;
(3) receiving $1,000 in cash on March 16, 1973;
(4) receiving $1,000 in cash on March 19, 1973; and
(5) receiving $500 in cash on March 23, 1973.

Cain was also found guilty of falsely testifying to the following before the Grievance Committee:

(1) that $7,276.98 of the trust funds were used to purchase accounts receivable of Mighty Tidy;
(2) that the entire proceeds of the cash- . ier’s check for $4,500 were used to purchase accounts receivable of Mighty Tidy for the trust;
(3) that Mighty Tidy executed a group assignment of $4,500 of accounts receivable to the trust;
(4) that the entire proceeds of a cashier’s check for $2,776.98 were used to purchase accounts receivable of Mighty Tidy for the trust;
(5) that Mighty Tidy executed a group assignment of $2,776.98 of accounts receivable to the trust.
(6) that none of the proceeds of the $7,500 check were received in cash, but all were converted into cashier’s checks;
(7) that the entire proceeds of a cashier’s check for $2,776.98 were delivered to Mighty Tidy and that none of the proceeds went through any bank account held by Cain individually or otherwise;
(8) that when the $7,500 check was negotiated no cash was received for any portion of it, but the entire proceeds were dealt with exclusively by certified checks; and
(9) that he never personally purchased any merchandise for Mighty Tidy and paid for it by cash, check, or otherwise.

Cain does not deny that he made the alleged statements, except for the last one, or that they were false, but claims that they were honest mistakes resulting from his poor recordkeeping and the great volume of cases he had been handling.

Cain’s contentions before this Court may be summarized as follows:

(1) He was deprived of property, viz., the right to continue the practice of law, without due process of law, (a) because the charges filed against him were so prolix, redundant, repetitive, and vague as to prejudice him before the Board and to make his defense unnecessarily difficult and (b) because an attorney’s right to a fair trial in disbarment proceedings entitles him to have the evidence actually heard by the trier of facts and he was denied that right in spite of a timely request.
(2) While what he did is largely undisputed, there is insufficient evidence of bad faith, fraudulent purpose, or' intent to deceive to overcome the presumption of his innocence.

We do not believe that Cain was denied due process for either of the reasons he has given.

First, although the charges filed against him were rather lengthy, we cannot say that they were so prolix, redundant, repetitive, or vague as to prejudice Cain. In several instances, more than one charge was based on a single alleged act of Cain, but in each of those instances, each separate charge alleged the violation of a different rule. There were also numerous different wrongful acts alleged. The lengthiness of the charges could have been avoided only by omitting some of the alleged wrongful acts or by combining some of the charges. The former alternative would have placed a premium on the proliferation of wrongful acts; the latter would have served no purpose and might even have impaired the effectiveness of the notice to Cain of the charges against him.

We agree with the General Counsel’s reply to Cain’s second ground for arguing that he was denied due process. Because a disciplinary proceeding against an attorney is neither civil nor criminal, but is sui gen-eris, and is not a typical adversary proceeding between litigants, but is a judicial inquiry by this Court acting through the Board of Commissioners, an accused attorney is afforded a fair trial if the trier of facts, i. e., the Board, reads a transcript of the testimony of the attorney and other witnesses. See Mildner v. Gulotta, 405 F.Supp. 182, 195 (E.D.N.Y.1975), aff’d mem. 425 U.S. 901, 96 S.Ct. 1489, 47 L.Ed.2d 751 (1976); In re Richards, 333 Mo. 907, 63 S.W.2d 672, 675-77 (1933).

To Cain’s second contention, the General Counsel replies that the circumstances attending the transactions and testimony in question clearly justified the Board’s finding that Cain acted in bad faith, with fraudulent purpose, or with intent to deceive.

The only factual issues presented are whether Cain acted in bad faith or with fraudulent purpose and whether he testified with intent to deceive, or, as Cain has put it, whether he acted from “cupidity or stupidity.”

What this Court said In re Stuart, 257 Ala. 184, 186, 57 So.2d 874, 876 (1952), is pertinent to a determination of these issues:

“In considering the question, we are not dealing with legal niceties, but the measure of good faith to be accorded by an attorney to his client and whether he has properly demeaned himself toward those high standards and trusts which inhere in his calling. Decision is not to be gauged by technical accuracies. The standard of ethics required of him is of a much higher character than is required in customary business dealings, where the parties deal at arm’s length.
“And whether petitioner’s misconduct was animo felónico with respect to the money entrusted to him or was just a natural, habitual deficiency in his requisite regard for and devotion to the interests of his clients is of no moment in considering his guilt vel non in violating our rules of conduct; the end result was the same. He acted in bad faith in the circumstances shown in failing to discharge his trust with regard to the monies entrusted to him and thereby subjected himself to disciplinary action for a violation of the rules. . . .”

In the present case, Cain’s failures to live up to this high standard are manifold. If Cain did, as he claims, use the trust funds to purchase accounts receivable of Mighty Tidy, he engaged in self-dealing. This self-dealing was, as the Court of Civil Appeals held and as every attorney knows, a violation of his fiduciary duty. Furthermore, he failed to fulfill his absolute duty to give his client a full, detailed, and accurate account of all money and property entrusted to him and to justify all transactions pertaining to that money or property. He failed to keep complete and accurate books and records. See Smiley v. Board of Commissioners of Alabama State Bar, 286 Ala. 216, 230, 238 So.2d 716 (1970).

Cain’s own admissions are overwhelming proof that he was guilty of appropriating to his own use funds entrusted to him, under circumstances indicating, at least, bad faith.

The circumstances of this ease also support the Board’s finding that Cain was guilty of giving false testimony with intent to deceive the Grievance Committee. Assuming that the trust funds were used to purchase accounts receivable of Mighty Tidy, the only way that Cain could have hoped to avoid being found guilty of professional misconduct was to convince the Grievance Committee that he did not control or dominate Mighty Tidy and was not guilty of self-dealing and that he could account for the trust funds and was not guilty of failing to keep complete and accurate records.

Although he now admits that Mighty Tidy was his alter ego, he attempted, in his testimony before the Grievance Committee, to disassociate himself from Mighty Tidy and was evasive in answering questions concerning his relationship to the company. Also, he made positive statements concerning his disposition of the funds even though he could not support those statements by his records. He made the statements with certainty, hoping, no doubt, that the accounting would stand up and thus leave the false impression that he had kept proper records. We note also that Cain’s testimony before the Grievance Committee was not his first attempt to give an accounting.

On the basis of the record before us and the arguments of counsel, we must conclude that the Board of Commissioners’ findings that Cain was guilty of misappropriation of a client’s funds and of wilfully giving false testimony before the Grievance Committee are well supported by the evidence. The action of the Board is affirmed.

We decline the invitation of the General Counsel, who contends that the misconduct of which Cain was found guilty warrants more severe discipline and who urges this Court to modify the Board’s action to make the discipline commensurate with the gravity of the offenses.

AFFIRMED.

All the Justices concur, except TOR-BERT, C. J., not sitting, and JONES, J., concurring in the result.

JONES, Justice

(concurring in the result):

I concur in the result to affirm the 18-month suspension without automatic reinstatement. I would uphold the finding of guilty for misappropriation of client’s funds, but I would reverse the finding of guilty for giving false testimony. Cain’s statements before the grievance committee were not altogether accurate; they were carelessly and irresponsibly made; but, in my opinion, this is insufficient to ground a finding of “false” testimony.

On the other hand, I am sorely tempted to follow the urging of the Bar’s General Counsel to increase the penalty meted out by the Bar Commissioners. The misappropriation of which Cain is guilty is without mitigating or extenuating circumstances. Any attempt to justify such gross misconduct on the grounds that the client was not, in fact, injured thereby seems only to magnify the wrongdoing. I am inclined to believe that the Commission topk this unwarranted defense into account in limiting the sentence to an 18-month suspension. It is hard to justify so light a sentence for so serious an act of professional misconduct.

In light of the “without automatic reinstatement”, however, I reluctantly agree to affirm.

      . These rules were in effect prior to May 6, 1974, the date of adoption of the Code of Professional Responsibility, 293 Ala. XXIII, et seq.

      . Adopted May 6, 1974, 293 Ala. XXIII, et seq.

      . It should be noted that DR 9-102(B)(4), Code Of Professional Responsibility, omits the requirement of Rule 27, supra, that misappropriation be committed “in bad faith or with fraudulent purpose.”

      . Walding v. Walding, supra.


author: SHORES, Justice.

text:
    Dorothy DaPonte TRABITS v. The FIRST NATIONAL BANK OF MOBILE, Alabama, etc.
    SC 2082.
    Supreme Court of Alabama.
    May 6, 1977.

      Irvin J. Langford, Howell, Johnston, Langford, Finkbohner & Lawler, Mobile, for appellant.
    Thomas A. Hamilton, Hamilton, Butler, Riddick & Latour, Mobile, for appellee.
   SHORES, Justice.

This is the second appeal by Mrs. Trabits from decrees rendered in the trial court in favor of the First National Bank of Mobile, as Trustee of the Paul Danner Trust. On the first appeal, Trabits v. First National Bank of Mobile, 295 Ala. 85, 323 So.2d 353 (1975), this court reversed the trial court’s granting the bank’s motion to dismiss the complaint filed by Mrs. Trabits and remanded the cause for a hearing on the merits.

It is Mrs. Trabits’ contention that the trust created by her father in 1943, on the occasion of her twenty-seventh birthday, should now be terminated because the second object of the trust, the preservation of the corpus for the benefit of Mrs. Tra-bits’ children and grandchildren, has become impossible because she has not had any children and because it is now medically impossible for her to have children.

She also argues that because it is impossible for her to have children, and having had none, the right to the income and the beneficial interest in the remainder of the trust has become merged in the life tenant, Mrs. Trabits, and that she is the only person who has any interest in the trust. She argues that since the trust is not a spendthrift trust, and inasmuch as the life interest and the remainder interests have merged in her, the trust should be terminated, and the entire trust estate turned over to her.

Alternatively, she asks that, if the court denies her request to terminate the trust, it modify the same, so that all of the income derived therefrom is paid to her in monthly installments.

The record shows that on three occasions after the creation of the trust, Mr. Danner directed the trustee to increase the monthly payments, first to $125 per month, then to $150 per month and, finally, to $400 per month, which last amount is being paid to Mrs. Trabits at the present time. The record also shows that for the past three years, the trust has produced an income, which averages approximately $200 per month over and above that paid to Mrs. Trabits or, in other words, the trust estate for the past three years has produced an average monthly income of some $600.

After a hearing on remand, the trial court denied the relief sought by Mrs. Tra-bits and again she appealed.

The trust established by Mr. Danner is irrevocable, and the pertinent provisions are as follows:

“FIRST, To invest and reinvest the same; to collect and receive the interest, dividends and income therefrom; to pay to the said Dorothy Danner, daughter of the Grantor, as long as she lives, $100.00 per month out of the income and/or principal. In the event the net income received during any calendar year should exceed the aggregate of the monthly payments made to said Dorothy Danner, any excess is to be added to and become a part of the corpus of the trust estate. If at the time of the death of the said Dorothy Danner there shall be living a child or children of her, or descendants of deceased children of hers, then the Trustee shall divide the remainder of the corpus of the trust fund, including all accumulated income therefrom, into separate equal shares so that there will be exactly enough of said shares to set apart one of said shares for each of the children of the said Dorothy Danner then living, and one of said shares for the living descendants of each of said deceased children of Dorothy Danner. If, at the time of the death of Dorothy Danner, she leaves no child or children, or a child or children of any deceased child surviving her, then the trust together with any accumulations thereon shall be paid over to the executor or administrator of Dorothy Danner.
“SECOND, The Grantor shall have the right to add to the Trust Fund from time to time as he may desire any additional monies, property . . . the Grantor, upon delivery of any additional securities, monies, property, or other evidences of indebtedness to the trustee, may amend the instructions with reference to the monthly payments to be made to the beneficiary by instructing in writing the additional amount of monthly payments to be made because of the additions to the corpus of the trust.”

It is the responsibility of the courts, when called upon to construe a trust, to determine the intention of the settlor, which is the law of the trust, and “[I]f the nature, subject matter and objects are reasonably ascertainable and the scheme not inconsistent with some established rule of law or public policy, that intention must control and the courts will sustain and give it effect. . . .” Stariha v. Hagood, 252 Ala. 158, 163, 40 So.2d 85, 89 (1949); citing Thurlow v. Berry, 249 Ala. 597, 32 So.2d 526 (1947), and Hodge v. Joy, 207 Ala. 198, 92 So. 171 (1922).

In remanding this case for further proceedings, this court said:

“The successful assertion of the theories upon which the beneficiary relies in seeking a modification or termination of the trust is dependent upon a judicial finding that the objects of the trust are those set out in her complaint. According to the Restatement (Second) of Trusts § 337, comment e at 159 (1959), if the trust purposes are expressed in the trust instrument, ‘a different purpose cannot be shown by extrinsic evidence.’ On the other hand, if the trust purposes are not expressly stated, they may be construed from the language of the trust language [sic] with the aid of extrinsic evidence of circumstances surrounding the creation of the trust. Id. Our reading of the trust instrument in this case has not revealed an express statement of the purposes of the trust. Moreover, it would be inappropriate at this juncture for this Court to speculate as to the set-tlor’s possible purposes, since that is a matter properly reserved for resolution in the trial court in the first instance.” (295 Ala. at 89, 323 So.2d at 357.)

The trial court, after hearing extrinsic evidence of the circumstances surrounding the creation of the trust in this case, has determined that the purposes are not those contended for by Mrs. Trabits. In other words, the trial court, in refusing to terminate or modify the trust, has disagreed with Mrs. Trabits’ contention that, because she has demonstrated by competent evidence that she is incapable of bearing children, the second object of the trust, i. e., preservation of the corpus for the benefit of her child or children, has failed. We agree with the trial court.

It is quite clear from the trust instrument that Mr. Danner provided for the contingency that his daughter might die without having a child or children. The trust instrument expressly provides: “. . . If, at the time of the death of Dorothy Danner, she leaves no child or children, or a child or children of any deceased child surviving her, then the trust together with any accumulations thereon shall be paid over to the executor or administrator of Dorothy Dan-ner.”

By this language, the settlor has made provision for the disposition of the trust estate in the event his daughter .dies without having produced children or grandchildren. The instrument, in effect, gives his daughter a power of appointment by will of the corpus if she fails to produce children. Failing the exercise of that power of appointment, it is the settlor’s direction that the corpus be paid over to the administrator of his daughter’s estate for distribution to her heirs. There is nothing offensive to law or public policy in this scheme of disposition. It is our duty, therefore, to uphold it.

Mrs. Trabits urges us to follow other jurisdictions in refusing to follow the common law presumption that the possibility of issue is never extinct as long as a person lives. She concedes that the prevailing trend in the United States has been to treat that presumption as conclusive or absolute, and to apply it even though the facts in a particular case would seem to support a contrary conclusion. See 98 A.L.R.2d 1286. The better view, she contends, is to recognize that modern medicine has reached a point where it can now be established scientifically that a person is incapable of bearing children, and that courts should recognize that fact. That argument might have some appeal under circumstances different from those presented here.

We simply can see no application of the common law rule, or the so-called modern rule, in this case, because the settlor anticipated the contingency that his daughter might not produce children, and provided for that contingency. It was his purpose and intent that the corpus of the trust, in the event his daughter produced no children, should be paid over to the executor of his daughter, if she died leaving a will, and if not, then to her administrator.

Where there is an expressed intention that a trust shall continue during the lifetime of a specified person, the desire of the beneficiaries to terminate it cannot prevail over the expressed intention of the settlor. 76 Am.Jur.2d, Trusts, § 76.

Mrs. Trabits argues, however, that because she has made a will and has left her estate to an organization which promotes causes which her father violently disagreed with, it would be his preference that the trust terminate rather than to have the corpus of the trust estate pass under her will. We are not persuaded by this argument, and indeed are not permitted to speculate on what the settlor might have done had he been able to forecast the future. We can only look to circumstances existing at the time the trust instrument was executed. Thomas v. Reynolds, 234 Ala. 212, 174 So. 753 (1937). It is clear that at the time Mr. Danner executed the trust instrument involved in this case, in 1943, it was his intention to provide for a monthly income for his daughter, for life, and upon her death the corpus “. . . together with any accumulations thereon ... . ” was to be paid over to any “living child or children of her”; but if she leaves no child or children (or their descendents), then to her executor or administrator.

Clearly, by this language, the life estate and the remainder estates have not merged, as contended by Mrs. Trabits. Nor do we agree' with her contention that the trust is a passive one. Hence, we need not decide whether a trust terminates in Alabama where the remainder and life interests meet • in the same person. Mrs. Trabits is the life tenant; but she is not, by the terms of the trust, the remainderman.

We agree with the trial court’s conclusion that the trust is not due to be terminated or modified as sought by Mrs. Trabits. Because it would serve no purpose in this litigation, we pretermit any discussion of the rule against perpetuities.

AFFIRMED.

MADDOX, FAULKNER, EMBRY and BEATTY, JJ., concur.