author: ADAMS, Justice. EMBRY, Justice

text:
    Ex parte BRITISH STEEL CORP., etc. (re Jean S. STAGGS, etc. v. BRITISH STEEL CORP., et al. Mary Ellen DOROTHY v. BRITISH STEEL CORP., et al. Agnes SCOGIN, etc. v. BRITISH STEEL CORP., et al. Lynn BATES, etc. v. BRITISH STEEL CORP., et al.)
    80-678 to 80-681.
    Supreme Court of Alabama.
    Sept. 20, 1982.
    Rehearing Denied Feb. 11, 1988.
    James H. Miller, III and C. William Gladden, Jr. of Balch, Bingham, Baker, Hawthorne, Williams & Ward, Birmingham, for petitioners.
    John W. Haley of Hare, Wynn, Newell & Newton, Birmingham, and James R. Knight of Knight & Griffith, Cullman, for respondents.
   ADAMS, Justice.

In these petitions, British Steel Corporation seeks a writ of mandamus, or other appropriate writ, directing respondent, the Honorable John N. Bryan, circuit judge, to dismiss the action against it for lack of in personam jurisdiction. Plaintiffs are the administratrices of their respective decedents, all Alabama residents, who were killed in the collapse of a cofferdam in Pickens County, South Carolina, on October 6, 1978. Plaintiffs filed their actions for wrongful death on or before October 5, 1979, in the Circuit Court for Jefferson County. Following the denial of its motion to dismiss, British Steel Corporation (BSC) seeks an appropriate writ to compel dismissal.

The dispositive issue on this appeal is whether the trial court properly entertained in personam jurisdiction over BSC. Central to this issue is the question of whether in personam jurisdiction can be asserted against BSC in the courts of this state in compliance with the Due Process Clause of the 14th Amendment to the United States Constitution. After carefully reviewing the facts and analyzing the issue presented, we conclude that the trial court was correct in allowing in personam jurisdiction against BSC, and, therefore, we deny the writ.

The event which gave rise to plaintiffs’ actions occurred when the Lake Keowee cofferdam collapsed, killing seven men. The cofferdam, located in South Carolina, was under construction at the time. Four actions are involved in this consolidated case and are the subjects of BSC’s petitions. Three of plaintiffs’ decedents were employees of Southern Construction and Engineering Company of Birmingham, Alabama. Southern Construction and Engineering Company was the general contractor for the project. The fourth decedent was a truck driver who also was employed by an Alabama employer. BSC, allegedly, manufactured and inspected the steel piling that formed the cofferdam’s outer shell. Plaintiffs brought actions against several defendants, including BSC, alleging various theories of liability which we need not examine. BSC was served by certified mail pursuant to Rule 4.2, Alabama Rules of Civil Procedure, which provides the bases and methods of out-of-state service.

BSC’s petitions, and the issue they raise, cause us to examine whether the facts in these cases allow in personam jurisdiction to be asserted against BSC in the courts of this state. The facts, as reflected in the record, overwhelmingly justify the assertion of in personam jurisdiction against BSC. No useful purpose, however, would be served in reviewing all of them. We, therefore, state and review the following facts which are sufficient for an understanding of these petitions.

BSC is a British corporation engaged in the manufacture and sale of steel products, which are sold internationally. Its principal place of business is London, England. BSC is not qualified to do business in Alabama. However, its wholly-owned subsidiary, British Steel Corporation, Inc., is qualified to do business in this state. British Steel Corporation, Inc., (Houston) is a New York corporation with its principal place of business in Houston, Texas. It solicits orders from buyers in the United States for BSC steel products. The record discloses that thousands of tons of BSC steel were shipped into Alabama from 1977 through 1979. The sale of that steel was made through Houston.

Michael Webber was BSC’s commercial manager for export sales from 1976-1980. He acknowledged, at deposition, that Houston was formed, and exists, to sell and distribute steel and steel products manufactured by BSC. Webber testified that BSC used Houston specifically for the purpose of selling its products in the United States. According to Webber, the final decision as to whether an order would be filled rested with BSC. Additionally, he testified that the entire administration of Houston reports regularly to British Steel Corporation International. Webber then explained that British Steel Corporation International, Ltd., reported to BSC.

Webber’s deposition also evidences the following facts showing the relationship between BSC and Houston. Webber, an employee of BSC, was “asked to join” the board of directors of Houston, which he did. Eric Walker is the man who asked him. Walker is chairman of the board of Houston. Like Webber, Walker is employed by BSC and is a native of England, where he resides. David Bonham holds the position of sales director with BSC. As in the cases of Walker and Webber, he is on the board of directors of Houston, and is a citizen and resident of England.

Richard Bledsoe is the general manager for distribution with L.B. Foster Company. He testified, at deposition, that L.B. Foster Company is located in Atlanta, Georgia, with a district sales office in Birmingham, Alabama. According to Bledsoe, the BSC steel piling used in the Lake Keowee project was purchased by Southern Construction and Engineering Company through L.B. Foster Company’s Birmingham office. Bledsoe explained that the steel was supplied from the company’s inventory throughout the United States, with the exception of a small amount contained in a customer’s inventory. He testified that the company placed its orders for BSC steel with Houston.

Kenneth Fontaine was an employee of BSC when the Lake Keowee cofferdam collapsed. At deposition he testified that, then, he held the position of “sections metallurgist.” Fontaine, who at the time of deposition was retired, testified that during the last few years of his employment with BSC, he was “more involved with investigating customer complaints than with [testing] the quality of steel,” which was his previous job. Fontaine made an on-site inspection of the piling at Lake Keowee for BSC after a complaint was received. Apparently, that complaint was made by Southern Construction and Engineering Company and L.B. Foster Company. Fon-taine explained that he understood Houston was the American selling agent for BSC.

We note several documents contained in the record which have bearing on the issue presented by these writs. BSC published two pieces of literature entitled “Steel Piling Products” and “Piling Handbook.” Both indicated that BSC would provide technical assistance and advice concerning its piling products to customers. Webber’s deposition reflects the fact that BSC prepares sales literature for Houston. The minutes of a special meeting of the board of directors of Houston, held on September 21, 1971, reveal that Houston was the collection agent for BSC. By resolution passed at a special meeting of the board of directors on October 10, 1975, T.B. Stone, the president of Houston, was authorized to request additional remuneration from BSC for Houston’s services during that fiscal year.

Pursuant to plaintiffs’ requests for admissions of fact, the following facts were established. BSC has sent agents into this state to transact business for it. BSC has availed itself of the opportunity of transacting business in Alabama. BSC “systematically and continuously ships goods manufactured by [it] into the State of Alabama and has done so since 1975.”

Against the factual background described above, we apply the law pertaining to in personam jurisdiction. Rule 4.2, A.R.C.P., under which BSC was served, “has been found to extend to the permissible limits of due process.” Bryant v. CEAT S.p.A., 406 So.2d 376 at 377 (Ala.1981), cert. denied, 456 U.S. 944, 102 S.Ct. 2008, 72 L.Ed.2d 466 (1982) (CEAT); Semo Aviation, Inc. v. Southeastern Airways Corp., 360 So.2d 936 (Ala.1978); Sells v. International Harvester Co., 513 F.2d 762 (5th Cir.1975). The United States Supreme Court has observed that where a defendant conducted business that was “sufficiently substantial” in a forum state, a cause of action unrelated to its activities in the forum could be asserted against it there. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). Similarly, in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the court remarked that “continuous corporate operations” within a forum could subject a corporate defendant to in personam jurisdiction on a cause of action arising outside the forum. In the case of a corporate defendant which maintains a parent-subsidiary relationship with another corporation, it is the rule that the parent’s use of the subsidiary in the forum “does not necessarily subject the parent to the jurisdiction [of the forum] .... ” Cannon Manufacturing Company v. Cudahy Packing Company, 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634 (1925).

This court recently recognized that a forum state may exercise in personam jurisdiction over a nonresident defendant so long as there are such minimum contacts that the suit does not offend “traditional notions of fair play and substantial justice.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)).

CEAT, at 377. Our review of the facts given above leads us to conclude that BSC’s activities are substantial and continuous so as to allow in personam jurisdiction to be asserted against it in causes of action which may have arisen outside of Alabama. BSC argues that it is not physically present in Alabama, does not regularly send its employees here, and is not present in this state through the activities of Houston. We find BSC’s argument to be at odds with the facts. It is clear that BSC has enjoyed the advantages of doing business in Alabama, and that its products systematically and continuously are shipped here. It is undeniable that Houston is a wholly-owned subsidiary of BSC which was organized, and continues to exist, to serve BSC in the sale and distribution of its steel and steel products. This court has commented that a “separate corporate existence will not be recognized where a corporation is so organized and controlled and its business conducted in such a manner as to make it merely an instrumentality of another ..,” Forest Hill Corporation v. Latter & Blum, 249 Ala. 23 at 28, 29 So.2d 298 at 302 (1947), quoted with approval in Woods v. Commercial Contractors, Inc., 384 So.2d 1076 (Ala.1980). Under the facts presented in this appeal, BSC has sufficient contacts with this jurisdiction to require it to defend the instant actions here.

Whether sufficient contacts exist so that the maintenance of a suit in Alabama does not offend reasonableness and fair play is to be determined on a case by case basis. Perkins v. Benquet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952).

CEAT, at 377.

BSC contends, nevertheless, that under the authority of CEAT, in personam jurisdiction over it cannot be maintained in the courts of this state. In CEAT, this court considered a fact situation where the plaintiff, an Alabama resident, purchased in Priceville, Alabama, a tire, which was made by the defendant. The tire exploded and injured plaintiff at a welding shop in Alabama. In personam jurisdiction was allowed against CEAT, an Italian corporation, even though it had no offices, employees, or property in this country. A Massachusetts corporation, Duddy’s, Inc., had a private contract with CEAT and dealt directly with its representatives in Italy. Apparently, Duddy’s, Inc., sold tires to David Tire Company in Birmingham, Alabama. Plaintiff purchased the tire that injured him in 1974. This court upheld in personam jurisdiction against CEAT, stating that it was forseeable from CEAT’s sales records that its volume of sales in Alabama might subject it to suit in this state.

BSC theorizes that the principal distinction between the instant case and CEAT is that in CEAT, the injury occurred in Alabama. BSC also points to the fact that the sale of the steel pilings was made through L.B. Foster & Company, a Georgia wholesale distributor. We are not convinced. In CEAT, this court stated that the exercise of in personam jurisdiction must not offend “reasonableness and fair play” and is “determined on a case by case basis.” CEAT, supra. In the instant cases, all decedents were Alabama residents. Plaintiffs also are Alabama residents. The general contractor for the project was an Alabama business. BSC conducts substantial and continuous business activities in Alabama. In view of all of the foregoing, we find that assertion of in personam jurisdiction against BSC does not offend the requisite elements of “fairness” and “reasonableness” required by the Due Process Clause of the 14th Amendment to the United States Constitution. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); International Shoe Co. v. Washington, supra.

BSC calls our attention to authorities from various federal courts, which, it argues, support its argument for dismissal. Without concluding that BSC’s cited cases would be followed by this court, we find them distinguishable from the fact situation presented by these petitions. BSC cites Kramer Motors, Inc. v. British Leyland, LTD., 628 F.2d 1175 (9th Cir.1980); Betar v. De Havilland Aircraft of Canada, LTD., 80 F.R.D. 400 (N.D.Ill.1977), reversed on other grounds, 603 F.2d 30 (7th Cir.1979), cert. denied, 444 U.S. 1098, 100 S.Ct. 1064, 62 L.Ed.2d 785 (1980); and, Murdock v. Volvo of America Corporation, 403 F.Supp. 55 (N.D.Tex.1975). These three cases involved situations where a parent corporation was found to be not subject to in personam jurisdiction in the forum state in spite of its subsidiary’s activities. In each case, the federal courts found the facts insufficient to establish the subsidiary as the parent’s agent or alter ego. It is sufficient to say, without reciting the particulars of each case, that the facts present in this appeal establish a closer parent-subsidiary relationship than in the cases cited by BSC. They are distinguishable in that respect.

BSC also cites Toro Company v. Balias Liquidating Company, 572 F.2d 1267 (8th Cir.1978) (Toro), for the proposition that it cannot be subject to jurisdiction in Alabama on an alter ego theory when the cause of action arises in another state. We disagree. In Toro, the Eighth Circuit Court of Appeals held that jurisdiction over two defendants did not exist in Minnesota. Plaintiff, Toro, a Minnesota corporation, sued a Texas corporation and its president. Toro alleged, among other things, that the corporation, and other named defendants, were part of a conspiracy that terminated its New York division which sold “Weed Eater” products. Although the defendant corporation conducted business in Minnesota, no jurisdiction was found to exist. The Eighth Circuit noted that there was no relationship between defendants’ Minnesota activities and the asserted cause of action. It cited Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), in explaining its reasoning:

Thus, when the claim sued upon is unrelated to the defendant’s forum activities, he may have “no reason to expect to be haled before [the forum state’s] court[s].” Shaffer v. Heitner, supra, 433 U.S. 186, 216, 97 S.Ct. at 2586. That is the conclusion we must reach in this case. The record reveals that [defendant’s] activities in Minnesota consisted by and large of the occasional visits of [defendant’s] regional sales manager to local distributors of Weed Eater products in connection with its agreement with Weed Eater, Inc. It is not without significance that these products were not distributed in Minnesota through Toro’s sales divisions. Finally, the district court found that [defendant] “ceased conducting any activity within [Minnesota] one year ago when it terminated its business relationship with Weed Eater.” Under these circumstances we hold that it would be so unreasonable as to be unconstitutional to require [defendant] to respond in Minnesota to Toro’s complaint on a cause of action arising out of events transpiring in New York and wholly unrelated to [defendant’s] activities in the state of Minnesota.

Toro, at 1271.

Shaffer v. Heitner involved an attempt by a non-resident of Delaware to bring a shareholder’s derivative action against officers and directors, past and present, of a corporation and its subsidiary in the courts of that state. The parent was incorporated in Delaware, and the subsidiary in California. Both had their principal place of business in Phoenix, Arizona. The activities which gave rise to plaintiffs cause of action took place in Oregon. Plaintiff attempted to assert in rem jurisdiction over defendants by utilizing a statute which allowed sequestration of property owned by a nonresident defendant. Under Delaware law, the stock of the parent corporation was regarded as being in Delaware and subject to seizure. The United States Supreme Court noted the basis of jurisdiction utilized in the Delaware courts:

The Delaware courts based their assertion of jurisdiction in this case solely on the statutory presence of appellants’ property in Delaware. Yet that property is not the subject matter of this litigation, nor is the underlying cause of action related to the property. Appellants’ holdings in Greyhound do not, therefore, provide contacts with Delaware sufficient to support the jurisdiction of that State’s courts over appellants. If it exists, that jurisdiction must have some other foundation.

Shaffer v. Heitner, 433 U.S. at 213, 97 S.Ct. at 2584, 53 L.Ed.2d at 703 (footnote omitted).

It found no other basis for jurisdiction. The United States Supreme Court concluded that there had been no showing that defendants, by their activities, subjected themselves to jurisdiction in Delaware. It commented further that defendants “have simply had nothing to do with the State of Delaware.” Shaffer v. Heitner, 433 U.S. at 216, 97 S.Ct. at 2586, 53 L.Ed.2d at 705.

The instant case is not one involving in rem jurisdiction or a fact situation analogous to that in Toro. As recited already, BSC’s activities and contacts with Alabama differ markedly from these considered in Shaffer v. Heitner and Toro. A different result, necessarily, must obtain.

A clear legal right, sought to be enforced, is one of the elements required for the granting of a writ of mandamus. Ex parte Dorsey Trailers, Inc., 397 So.2d 98 (Ala.1981); Ex parte Slade, 382 So.2d 1127 (Ala.1980); Martin v. Loeb & Company, 349 So.2d 9 (Ala.1977). BSC cannot show a clear legal right which it seeks to enforce. Accordingly, we deny the writ and affirm the judgment of the trial court.

Finally, we note that in reaching our decision, we have indulged no presumptions of correctness in favor of the judgment of the trial court. No oral evidence was taken by it. Therefore, this Court “sits in judgment on the evidence.” Hacker v. Carlisle, 388 So.2d 947 at 950 (Ala.1980); McCulloch v. Roberts, 292 Ala. 451, 296 So.2d 163 (1974); Redwine v. Jackson, 254 Ala. 564, 49 So.2d 115 (1950).

WRIT DENIED.

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

TORBERT, C.J., and FAULKNER and EMBRY, JJ., dissent.

EMBRY, Justice

(dissenting):

With one statement, contained in the last paragraph of the majority opinion, I can completely concur. We do, in fact, sit in judgment on the evidence in this case. The problem that confronts me is that I cannot find in that evidence support for the conclusion that in personam jurisdiction may be imposed upon British Steel Corporation by the Alabama courts.

It seems to me the majority opinion is premised upon an inference which in turn is employed to support successive inferences to arrive at the result reached by the majority. That result goes far beyond the permissible limits of due process and mistakenly and prematurely assumes the demise of all restrictions on the personal jurisdiction of state courts: to paraphrase Justice Faulkner, dissenting in Bryant v. Ceat S.p.A., 406 So.2d 376 at 380 (Ala.1981), where he quotes from Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958).

As stated by petitioner in supplemental brief:

“The principal distinctions between Ceat and the instant cases are that in Ceat the injury occurred in Alabama as did the sale of the alleged faulty product. Here, of course, the accident happened in South Carolina, a fact recognized by the Plaintiffs’ Complaint. Additionally, here, the sale of the materials was made by the Georgia office of L.B. Foster & Company, a wholesale distributor of steel, from its inventory and not as a result of an order placed with British Steel Corporation, Inc. (Houston) for the specific construction project.
“The marketing method in Ceat was significantly different from these cases. In addition to their U.S. company, Ceat Representative, the Italian company also had private brand contracts with three U.S. corporations who dealt directly with them in Italy. They delivered their tires directly to the wholesaler. The tire in question was presumably sold through one of these corporations, Duddy’s, to David Tire Company in Birmingham, Alabama, and ultimately purchased by the plaintiff in Priceville, Alabama. Here, not only does BSC market its steel by a different method, but this method has been tested against the constitutional requirements for in personam jurisdiction and jurisdiction was denied. Kramer Motors v. British Leyland, Ltd., 628 F.2d 1175 (9th Cir.1980).
“This Court in Ceat recognized three important facts to support its jurisdictional conclusion: the injury occurred in Alabama, the tire was purchased in Alabama, and the defendant regularly received financial benefit from Alabama by selling tires to David Tire Company. Here, the injury did not occur in Alabama, steel was not purchased in Alabama and the financial benefits factor is only indirectly applicable. BSC’s conduct, if any, in Alabama consists only of invoicing steel to Houston at its designated port of entry. Although some of this steel may find its way to Alabama companies, it would stretch Ceat beyond its elastic limit to suggest that this mere possibility meets the foreseeability test of the due process clause.”

Again quoting petitioner, we find the clear distinction made between the majority opinion in Ceat and this case:

“By contrast, when this Court held that Ceat’s conduct met the foreseeability criterion of due process, it did so by recognizing three important facts: occurrence of the injury in Alabama, occurrence of the sale in Alabama, and an organized effort by the defendant to service the Alabama wholesale tire market. Such is not the ease here and it follows that the foreseeability test has failed.
“But, the Plaintiffs contend that the third fact, sales in Alabama, will support in personam jurisdiction over an unrelated cause of action. This contention has been specifically rejected by the Supreme Court in World-Wide Volkswagen v. Woodson, 444 U.S. 286 [100 S.Ct. 559, 62 L.Ed.2d 490] (1980). There, the cause of action occurred in Oklahoma, but the Supreme Court held that the defendant did not seek to serve the Oklahoma market and, hence, it was not foreseeable that it would be haled into court there. In this kind of case, the Supreme Court recognized a two-pronged test to determine foreseeability. It said that the defendant must seek to serve the market in the forum state and its product must there be the source of injury.”

TORBERT, C.J., and FAULKNER, J., concur.

      . British Steel Corporation, Inc., is a wholly-owned subsidiary of British Steel Corporation International, Ltd. British Steel Corporation International, Ltd., in turn, is a wholly-owned subsidiary of BSC.

      . In his deposition, Webber referred to “British Steel Corporation International.” It is clear that the entity referred to is British Steel Corporation International, Ltd.

      . Betar v. De Havilland Aircraft of Canada, LTD., supra, only involved the issue of lack of effective service on the parent through service on the subsidiary.

      . “The stock was considered to be in Delaware, and so subject to seizure, by virtue of Del.Code Ann., Tit. 8, § 169 (1975), which makes Delaware the situs of ownership of all stock in Delaware corporations.” [Footnote omitted.] Shaffer v. Heitner, 433 U.S. at 192, 97 S.Ct. at 2573, 53 L.Ed.2d at 690.


source: Caselaw Access Project

author: JONES, Justice. TORBERT, Chief Justice JONES, Justice. EMBRY, Justice

license: Public Domain

text:
    FIRST ALABAMA BANK OF MONTGOMERY, N.A. v. Jim D. PARSONS, James L. Whitehead, and B & E Steel Services, Inc. Jim D. PARSONS, James L. Whitehead, and B & E Steel Services, Inc. v. FIRST ALABAMA BANK OF MONTGOMERY, N.A.
    80-750, 80-774.
    Supreme Court of Alabama.
    Sept. 24, 1982.
    On Rehearing Feb. 11, 1983.

      James A. Byram, Jr. and Eric G. Brug-gink of Steiner, Crum & Baker, Montgomery, for appellant.
    Jere L. Beasley of Beasley & Wilson, Montgomery, for appellees.
   JONES, Justice.

This case has been appealed once before. On the first appeal, the Court of Civil Appeals, 390 So.2d 640, reversing a summary judgment adverse to Plaintiff/Bank, held that, although the two individual Defendants, as guarantors, were debtors within the meaning of the U.C.C. (Code 1975, § 7-9-105(l)(d)), and thus entitled to notice pursuant to § 7-9-504(3), the failure of Bank to comply with the notice requirements did not, as a matter of law, bar Bank’s action for a deficiency judgment. Relying on Valley Mining Corporation, Inc. v. Metro Bank, 383 So.2d 158 (Ala.1980), the Court of Civil Appeals held that Bank’s commercially unreasonable behavior in its failure to comply with the notice of disposition of the secured property, while not acting as a total bar as a matter of law to Bank’s deficiency claim, was subject to Defendants’ right of set-off for damages due to Bank’s non-compliance.

At the conclusion of the evidence at the second trial, the trial court granted Bank’s motion for directed verdict as to certain of Defendants’ counterclaims for conversion; and the case went to the jury on Bank’s deficiency claim and Defendants’ counterclaims raising the commercial unreasonableness of the sale of the collateral, and also on Defendant Whitehead’s counterclaim for fraud. The jury returned a general verdict in favor of Defendants on Bank’s claim, and against Bank on Defendants’ counterclaims, awarding damages of $76,500.00.

On The Appeal

Bank’s appeal challenges certain trial court rulings relating to Defendants’ counterclaim for damages, which was based primarily on the alleged commercially unreasonable behavior of Bank in failing to comply with the notice provision of § 7-9-504(3). Defendants B & E and Parsons cross appeal, challenging the trial court’s grant of Bank’s motion for summary judgment as to Defendants’ conversion claim.

Because the applicable legal principles are set forth in the Court of Civil Appeals’ opinion on the first appeal of this case, citing Valley Mining Corporation, Inc., supra, no lengthy discussion of the issues raised on this appeal is necessary.

On the first appeal of this case, the Court of Civil Appeals, following the explicit language of part III of this Court’s opinion in Valley Mining stated:

“Application of the Valley Mining rule, which we are bound by, to the facts at hand leads us to the conclusion that both insufficient notice and total lack of notice are commercially unreasonable behavior, but that neither bars a secured party’s recovery of a deficiency judgment. The court in Valley Mining did note that damages resulting from the creditor’s failure to meet the notice requirement may be set off against the total deficiency.” First Alabama Bank of Montgomery, N.A. v. Parsons, 390 So.2d 640, 643 (Ala. Civ.App.1980), hereinafter Parsons I.

In the second trial, the trial judge instructed the jury accordingly:

“Now, the law says that not only should a person receive notice, but proper notice would contemplate that if there was a change in the time and that sort of thing, that there also should be proper notice. Now, in looking at that proper notice, the [Supreme] Court has said that insufficient notice of a default sale is commercially unreasonable behavior. They don’t say it’s a commercially unreasonable sale, but it says it’s commercially unreasonable not to give proper notice.
“Now, it goes on and further says that both insufficient notice and total lack of notice are commercially unreasonable behavior, but that neither bars a secured party’s recovery of a deficiency judgment. These are things that you can take into consideration, and that damages resulting from the creditor’s failure to meet the notice requirement may be set off against the total deficiency.”

We are in accord with the Court of Civil Appeals’ holding in Parsons I; nonetheless, we hold that the facts of this case did not warrant submission of Debtors’ counterclaims against Bank’s deficiency claim. “The principal limitation on the secured party’s right to dispose of collateral is the requirement that he proceed in good faith (U.C.C. 1-203) and in a commercially reasonable manner (U.C.C. 9-504).” U.C.C. 9-507, Comment 1.

While a total failure of notice is likely to be evidence of bad faith on the creditor’s part, insufficient notice, although commercially unreasonable, does not necessarily preclude the requisite good faith in collateral disposition. Further, while technical compliance with the U.C.C. provisions can lead to unjust results, so, too, can mere technical failure of compliance. Therefore, in cases of insufficient notice, as opposed to total lack of notice, an even closer examination of the evidence is warranted to determine the validity of counterclaims as a condition to the application of the Valley Mining set-off rule.

Notice of a sale of collateral should be sufficient to protect a debtor’s interests in the property. Turning to the record, we find that the evidence is without dispute that Bank originally furnished notice to Debtors. This notice would have satisfied the U.C.C. provisions had the sale proceeded privately any time after 12:00 noon, February 19,1979. But the sale was a public one, and herein lies Bank’s failure to comply with the notice requirements. See U.C.C. 9-504(3). Although the notice furnished was technically insufficient, barring the presence of bad faith or fraud on Bank’s part, the purpose of the U.C.C. provisions are fulfilled and Debtors’ counterclaims are unwarranted.

What evidence of damages by way of counterclaim is presented here? The record shows the collateral was sold for $12,500.00, and two weeks later resold for $18,000.00. Opinion testimony was offered fixing the value of the collateral at “$30,000.00 to $35,000.00.” In this respect the U.C.C. is explicit:

“The fact that a better price could have been obtained by a sale at a different time or in a different method from that selected by the secured party is not of itself sufficient to establish that the sale was not made in a commercially reasonable manner.” U.C.C. 9-507(2).

We are of the opinion, and so hold, that Debtors failed to show the actual market value of the collateral on the day it was sold was substantially higher than the $12,-500.00 selling price.

Except for the claim for conversion on behalf of B & E and Parsons—a point which is addressed under the cross appeal portion of this opinion—only Defendant Whitehead claims any damages independent of Bank’s notice violation. The substance of Whitehead’s fraud claim is that Bank advised him to “sit tight and don’t worry” because Bank would contact him “to tell [him] what the status of B & E was.” It is undisputed that subsequent to this conversation, Bank sent a letter to B & E, with copies to both Parsons and Whitehead, which complied specifically with Bank’s earlier representation to Whitehead to inform him of the status of the accounts. In addition to informing the parties that Bank had applied B & E’s checking account to the company’s past-due, unsecured loan, giving the specific amounts charged and the principal balance still due, the letter made demand for full payment of both notes and conditioned the nonpayment by a date certain upon Bank’s possession of the collateral. This evidence, when taken with all of the surrounding circumstances revealed by the record, is insufficient to support a reasonable inference of the requisite element of intent to deceive.

We hold, therefore, as to the appeal, that there was insufficient evidence to support a jury finding of damages on the counterclaims. Bank’s technical failure to comply with the notice requirements of the U.C.C., when balanced against its good faith conduct in protecting Debtors’ interests in the repossessed collateral, on the facts of this case, renders Debtors’ counterclaims invalid and the set-off rule inapplicable.

We emphasize that the basis for this holding is our finding, as a matter of law, that the quality of the Debtors’ proof—respecting the market value of the repossessed collateral—is insufficient to establish the requisite causal relationship between the failure of notice of the sale and Debtors’ alleged damages. We acknowledge that had the proof of value, for example, consisted of a standardized price list, established and recognized by the heavy machinery industry (such as the “Blue Book” used in the used car industry), so as to impugn the good faith of the public sale conducted by the Bank, a different situation would be presented.

Likewise, we would have no difficulty sustaining the counterclaim award if the debtors’ evidence respecting the property’s market value had furnished a factual inference that a prospective buyer stood ready, willing, and able to pay the increased price except for the lack of notice, thus establishing the requisite legal nexus between the alleged damages and the creditor’s violation of the notice requirement.

Where, as here, however, Debtors merely offered proof that the property sold for a higher price shortly after Bank’s sale and that the property had a higher market value, the causal relation link between the Debtors’ alleged loss and the Bank’s notice violation has not been established.

Unquestionably, if the Bank had complied with the notice requirement, the Debtors’ collateral post-disposition claim against the creditor, under the instant facts, would be foreclosed by the applicable provision of the U.C.C. We hold simply that evidence of higher valuation of the repossessed security, which falls short of impugning the good faith of the creditor’s disposition will not support a counterclaim in a suit for a deficiency judgment.

We remand this cause for a determination of Bank’s deficiency claim.

On the Cross Appeal

Debtors’/Appellees’ contention on cross appeal that the trial judge erred in not allowing the conversion count to go to the jury is without merit. The evidence is without dispute that Bank, pursuant to the loan agreement, applied the balance of B & E’s checking account to the debt on the unsecured loan. There is a total failure of proof on behalf of Debtors that such action on the part of Bank supports an actionable claim for conversion. Because our holding is based on an insufficiency of the evidence, we need not address Bank’s contention of res judicata.

As to the appeal, the judgment is reversed and remanded. As to the cross appeal, the judgment is affirmed.

AS TO THE APPEAL: REVERSED AND REMANDED.

AS TO THE CROSS APPEAL: AFFIRMED.

SHORES, EMBRY, BEATTY and ADAMS, JJ., concur.

TORBERT, C.J., and ALMON, J., dissent.

FAULKNER, J., recuses himself.

TORBERT, Chief Justice

(dissenting).

I dissent. Initially, I agree that the trial court correctly granted a directed verdict on the claim for conversion.

The trial court properly followed Valley Mining Corp., Inc. v. Metro Bank, 383 So.2d 158 (Ala.1980), in holding that the bank would have the right to a deficiency judgment following a sale of the collateral in a commercially unreasonable fashion, and that the appellees would be entitled to set off against the deficiency judgment any damages resulting to them because of the commercially unreasonable sale. Further, if the amount which would have been realized by a commercially reasonable sale is greater than the sale price plus the deficiency, the Bank would be liable on the counterclaim to the debtor for the difference. This holding is supported explicitly by the language of the Code.

“If the disposition has occurred the debtor or any person entitled to notification or whose security interest has been made known to the secured party prior to the disposition has a right to recover from the secured party any loss caused by a failure to comply with the provisions of this part.”

Ala.Code § 7-9-507(1) (1975) (emphasis added).

In the case before us, the debtors did produce some evidence of the price that would have been realized if the sale had been conducted in a commercially reasonable manner. Several witnesses testified concerning the value of the collateral. Sax-ton Raines, an experienced steel man, testified without objection that the truck-crane had a fair market value of $30,000 to $35,-000. Both Defendant Parsons and Defendant Whitehead testified that the fair market value of the collateral was $30,000 to $35,000. The Bank’s own loan file showed a value of $30,000. If the jury believed this testimony, then the sale at $12,000 of collateral worth at least $30,000 would have resulted in damages of $18,000 to the defendants. Since the defendants owed the Bank $6,000 on the deficiency, they should be entitled to recover $12,000 from the Bank.

The majority opinion appears to relate the debtor’s right to a set off and counterclaim for damages to a showing of bad faith on the part of the secured party in the disposition of the collateral. This approach would limit Valley Mining to those situations where there is bad faith and a commercially unreasonable sale of the collateral. Specifically, the majority writes, “Barring the presence of bad faith or fraud on bank’s part, the purpose of the U.C.C. provisions are fulfilled and debtor’s counterclaims are unwarranted.” I can find no support in the Code provisions or the case law for this dual requirement. The majority relies on a reference in Comment 1 of Ala.Code § 7-9-507 (1975), to the requirement that the secured party “proceed in good faith (Section 7-1-203) and in a commercially reasonable manner.” I would hold that a secured party is liable for damages sustained by the debtor where a sale is made in a commercially unreasonable manner because of the more specific code provision: “[Ejvery aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable.” Ala.Code § 7-9-504(3) (1975). Thus, I would affirm the judgment based on the jury verdict on the counterclaim for damages resulting from a commercially unreasonable sale of the collateral.

ALMON, J., concurs.

ON APPLICATION FOR REHEARING

JONES, Justice.

We granted rehearing to re-examine two aspects of our holding that the trial court erred in not directing a verdict for Bank on Debtors’ counterclaim seeking damages for a commercially unreasonable sale of the repossessed collateral.

In essence, the Debtors’ challenge to our holding is two pronged: 1) that our strict causation rule places on the debtor too heavy a burden to prove his counterclaim in light of our holding that failure of compliance with the notice requirements constitutes commercially unreasonable conduct as a matter of law; and 2) that, under our liberal test of evidence rule, we have applied the wrong standard of review for gauging the sufficiency vel non of the evidence.

In other words, Debtors complain that their right to counterclaim for damages in a creditor’s claim for a deficiency judgment, which right is grounded in the creditor’s failure to comply with the notice requirements, is rendered virtually futile if the debtors’ burden is to show by positive testimony that the Debtors’ loss is directly connected to, or flowed directly from, the creditor’s failure to comply with the provisions of the Act.

We cannot accede to this prong of the Debtors’ contention. Section 7-9-507 mandates our application of the causation test. We quote the pertinent language from subsection (1):

“If it is established that the secured party is not proceeding in accordance with the provisions of this part .... the debtor ... has a right to recover from the secured party any loss caused by a failure to comply.
...” (Emphasis added.)

Our original holding that the trial judge erred in not granting a directed verdict as to the counterclaim was grounded primarily on subsection (2) of § 7-9-507. This subsection explicitly states that disparity between the resale price and a price later shown to be obtainable is not sufficient, standing alone, to establish that the sale was not conducted in a commercially reasonable manner. Having previously determined that the Bank’s sale was otherwise conducted in good faith and in a commercially reasonable manner, we concluded that the evidence indicating the collateral had a higher market value than the sale price was insufficient as a matter of law to furnish a basis upon which a jury could infer a causal nexus between the alleged loss resulting from the only commercially unreasonable conduct present — the lack of notice.

It should be noted here that § 7-9-504(3) specifies that every aspect of the sale or disposition must be “commercially reasonable.” Once we have determined that a given sale was conducted in a commercially unreasonable manner, as we have here because of the lack of notice, and that there were no other aspects of the sale performed in a commercially unreasonable manner or in bad faith, as we also have done, then the only questions that remain are those of causation and damages. Therefore, subsection (2) of § 7-9-507 is inapplicable to the resolution of the causation and damages questions.

While we adhere to the strict causation rule, mandated by the statute and announced in the original opinion, our restudy of the record and the applicable U.C.C. provisions convinces us of the correctness of the second prong of the Debtors’ contention — that we applied the wrong standard of review of the evidence. We find that the evidence does support some inference of causal relationship between the lack of notice and the Debtors’ claim of damages. This evidence was sufficient to defeat a directed verdict motion; and, because of this, it is likewise sufficient to overcome a motion for J.N.O.Y. — the test being the same for the two motions. Bennett v. Cole [1982], 426 So.2d 832 (Ala.1982).

As to the causal element, however, we believe Bank’s post-judgment alternative motion for a new trial, grounded on the great weight and preponderance of the evidence, should have been granted. The Debtors, in their original brief, singled out the unreasonableness of the sale in two particulars: 1) the deficient notice; and 2) the insufficient sales price. The Debtors’ evidence of an insufficient sales price consists of expert testimony placing the market value of the disposed of collateral between $30,000 and $35,000, approximately three times the sale price, and indicating that the public sale purchaser almost immediately resold the equipment in the same market for $5,000 more than he paid for it, making almost a fifty percent profit.

Such a discrepancy, when substantial, is relevant to the issue of whether the lack of notice caused damage. A substantial disparity between the market value on the date of disposition and the sale price actually brought is evidence of damage caused by something, just as absence of any disparity would be evidence that there was no damage.

Although the evidence presented was not totally lacking of probative value as to the causal relationship between the Debtors’ damage and the lack of notice, such evidence, without more, was clearly against the great weight and preponderance of the evidence when balanced against the evidence showing the sale was conducted in good faith and was commercially reasonable in all other aspects.

If the Debtors’ evidence as to the disparity between the fair market value and the selling price was not greatly outweighed by the Bank’s evidence as to its good faith and commercial reasonableness in the other aspects of the sale, then the verdict should be upheld, there being sufficient evidence produced to allow a jury to infer causation. But here, even though Debtors have met their initial burden of producing enough evidence to defeat directed verdict and J.N. O.Y. motions, the probative value of such evidence is so slight in establishing causation, that a verdict based on such evidence, when weighed against the Bank’s evidence which vitiates the causal link, would be manifestly unjust and palpably wrong. First Alabama Bank v. Coker, 408 So.2d 510 (Ala.1982).

We emphasize that proof of defective notice, while sufficient of itself to constitute commercially .unreasonable conduct, does not of itself furnish a reasonable inference of a causal relationship between this sole defect in the sale and Debtors’ alleged damages. Rather, it is this lack of notice in combination with the substantial increase in sales price and the expert testimony of market value that meets the minimum test of sufficiency as to the causation element of Debtors’ counterclaim.

We emphasize further that Bank’s evidence of an otherwise commercially reasonable sale does not alter the fact that its failure to comply with the notice provision constituted commercially unreasonable conduct as a matter of law. To be sure, evidence that a sale was otherwise commercially reasonable is relevant to the causation issue, and it is on this issue that we have evaluated the preponderance of the evidence.

After indulging all presumptions in favor of its validity, we find that the verdict favorable to Debtors on their counterclaim is so against the great weight and preponderance of the evidence as to require that the judgment be set aside. See Chavers v. National Security Fire & Casualty Co, 405 So.2d 1 (Ala.1981). We conclude, therefore, that the trial judge ruled correctly in denying Bank’s motions for a directed verdict and for J.N.O.V, but erred in not granting Bank’s alternative motion for a new trial. The application for rehearing is granted as to the appeal; and the judgment as to the counterclaim is reversed and remanded for a new trial on Bank’s claim for deficiency and Debtors’ counterclaim, which is limited to compensatory damages, if any. As to the cross-appeal, the application for rehearing is overruled and the judgment is affirmed.

APPLICATION FOR REHEARING GRANTED AS TO APPEAL AND OVERRULED AS TO CROSS-APPEAL; REVERSED AND REMANDED AS TO COUNTERCLAIM; AFFIRMED AS TO CROSS-APPEAL; OPINION EXTENDED.

TORBERT, C.J., and SHORES, BEAT-TY, and ADAMS, JJ., concur.

EMBRY, J., dissents.

FAULKNER and ALMON, JJ., recuse themselves.

EMBRY, Justice

(dissenting):

By dissenting I wish to reiterate my views expressed this day in Marion v. Hall [MS. January 14, 1983] (Ala.1983). I have, upon reflection, concluded that I was in error when concurring with the majority on original deliverance.


author: TORBERT, Chief Justice.

text:
    Walter C. McKINNEY, Clara M. McKinney, James Archie Cox, Lottie Cox, Talton Kelley, and Avis Kelley v. N.R. YIELDING, Louise Yielding, Gary Yielding and Ann Yielding.
    81-455.
    Supreme Court of Alabama.
    Jan. 21, 1983.
    Nelson Vinson of Vinson & Guyton, Hamilton, for appellants.
    James K. Davis of Fite, Davis & Atkinson, Hamilton, for appellees.
   TORBERT, Chief Justice.

The plaintiffs in the case below were Walter C. and Louise Yielding, who are co-owners of a tract of land in Marion County, Alabama. They brought suit to establish the boundary line between their land and the lands of the defendants. The defendants were: Taitón and Avis Kelley, who owned the land immediately to the east of the Yielding land, James Archie and Lottie Cox, who owned a parcel of land immediately to the north of the Yielding land, and Walter C. and Clara M. McKinney, who also owned a parcel of land immediately to the north of the Yielding land.

The plaintiffs below claimed as their boundary line an old wire fence which ran the length of the eastern boundary and then turned west and ran the length of the northern boundary. The fence was in various stages of disrepair along these lines; however, it could be identified along the eastern and northern edges of plaintiffs’ land. The trial court, after hearing evidence presented ore terms, found for plaintiffs and established the boundary at the fence along the eastern and northern edges of the property. The defendants appeal that decision to this Court.

This Court has stated the following standard of review in boundary line disputes:

“In an appeal from a judgment establishing a boundary, such judgment will be affirmed if, under any reasonable aspect of the case, the decree or judgment is supported by credible evidence; that is to say, the trial court will not be reversed unless there is a clear and decided preponderance of the evidence against its judgment.”

McKnight v. Price Farms, Inc., 382 So.2d 560, 562 (Ala.1980). This is especially important in boundary line cases because of the frequent references to documentary evidence such as maps, and the references in the record to these exhibits. See, Pinson v. Veach, 388 So.2d 964 (Ala.1980). In Pinson, supra, we stated: “Where testimony is taken ore tenus in a suit to fix a boundary line, the findings of fact entered by the trial judge will be sustained if there is any credible evidence to support them.” 388 So.2d at 968.

The Yielding land lies in the NE 1/4 of the SW 1/4 of Section 8, Township 10 South, Range 13 West, Marion County, Alabama. Plaintiffs Yielding produced evidence that prior to 1918 their land was held by Harlan Lewis. From 1918 to 1948 the property was owned by Henry and Polly Bobo. In 1948 the Bobos conveyed the property to Archie Wiginton, who held it until 1951. In 1951 Wiginton conveyed the land to Andy Rayburn, who held it for five years. In 1956 Rayburn conveyed the property to Norma Lou and Roy Brooks, who conveyed the land in question to the Yieldings in 1959.

The fence on the east of the property lies east of the government survey lines by which the plaintiffs’ land is described in their deed, and the fence on the north lies north of the government survey lines by which their property is described. All three of the boundary disputes before the Court in this case resolve around a claim of title to the land in question by adverse possession. Each of these disputes will be examined in turn.

I

The first dispute for our consideration concerns the eastern boundary of the Yielding land. Immediately to the east of the Yielding land lies the tract of land currently owned by appellants Taitón and Avis Kelley.

The chain of title to the Kelley land begins with a patent from the United States government to Benjamin Kelley issued in 1913 for the NW 1/4 of the SE 1/4 of Section 8, Township 10 South, Range 13 West, Marion County, Alabama. Benjamin Kelley held the land from 1913 to the date of his death in 1948. In his will he gave a life estate in the property to his widow Annie Kelley and a remainder in fee to appellants Kelley. Annie Kelley held the property from 1948 to 1973 and upon her death in 1973, the Kelleys became the owners in fee and remained the owners at the time this suit was instituted in February of 1981.

Along the eastern boundary of the Yielding land, an old wire fence extended the length of the Yielding-Kelley boundary. According to a survey made in March of 1981 by Jack Loden, the fence lies east of the government survey line which describes the land in the Yielding deed. At issue in this portion of the appeal is this strip running north and south and lying between the line, as surveyed by Loden in 1981, and the old fence running from a “hickory tree” on the north to a “red oak tree” on the south.

The trial court made the following finding concerning this boundary:

“That the true boundary line between the lands of the Plaintiffs N.R. Yielding and Louise Yielding, Gary Yielding and Ann Yielding and the lands of the Defendants Taitón Kelley and Avis Kelley is described as follows, to-wit:
“ ‘Begin at a hickory tree which has old wire going west and north therefrom, which is near the NE corner of the NE 1/4 of SW 1/4 of Section 8, Township 10 South, Range 13 West; go thence south along an old fence a distance of approximately 1320 feet to a red oak tree which has old wire running west and north therefrom, which said point is the southerly terminus of the coterminous boundary between the lands of the Plaintiffs and the lands of the Defendants Taitón Kelley and Avis Kelley.’”

We have reviewed the record, including the exhibits introduced into evidence and affirm this portion of the trial court’s decree.

The deed from Norma Lou and Roy Brooks to the appellees describes the land by the governmental survey as the “NE 1/4 of the SW 1/4 of Section 8, Township 10 South, Range 13 West, containing 40 acres, more or less.” This Court has stated: Lewis v. Parsons, 263 Ala. 647, 649, 83 So.2d 220, 222 (1955). There was no evidence of any agreement between the parties. The appellees claim the land lying east of the government survey line by adverse possession rather than under the description contained in the deed.

“[W]e know of no authority which authorizes a court in a case of this kind to fix a boundary line different from that called for in the muniments of title unless a different line has been established by adverse possession or by agreement.”

The Kelleys argue that the Yieldings could not claim title by adverse possession by themselves or their predecessors in title because of the intervening life estate of Annie Kelley. Specifically they state that adverse possession cannot run against a re-mainderman during the lifetime of the life tenant, citing Hinesley v. Davidson, 335 So.2d 380 (Ala.1976), and Hammond v. Shipp, 292 Ala. 113, 289 So.2d 802 (1974). However, once adverse possession begins to run, the fact that there is a life tenant and subsequently a remainderman, does not toll the running of the time. Kidd v. Browne, 200 Ala. 299, 76 So. 65 (1917). This rule was applied by this Court to a boundary line dispute in Kubiszyn v. Bradley, 292 Ala. 570, 298 So.2d 9 (1974).

The question becomes, then, whether there was before the trial court sufficient evidence for a finding that the plaintiffs’ predecessor in title possessed the land adversely prior to the beginning of Annie Kelley’s life estate in 1948. At trial, Archie Wiginton, one of the plaintiffs’ predecessors in title, testified that when he purchased the property in 1948 the fence was standing on the east side of the land. Further, Ruby Nixon testified that the land in dispute was part of a pasture used by the tenants of Henry and Polly Bobo in 1936 and 1937.

This Court has stated, “The erection and maintenance of a fence is one of the clearest symbols of possession.” Kubiszyn v. Bradley, 292 Ala. at 575, 298 So.2d 9. Further, the use of the land in question for pasture would constitute actual possession, since the adverse claimant would be putting the land “to such use as it is reasonably adapted.” Kubiszyn, supra at 575, 298 So.2d 9. Thus, we cannot say that the ruling of the trial court was plainly erroneous or manifestly unjust; rather, it appears that the trial judge has correctly applied the law to the facts presented at trial. The period of adverse possession began to run prior to 1948 and was not interrupted by the intervening life estate of Annie Kelley.

II

The second area in controversy is the northern boundary between the lands of the Yieldings and the Coxes. The Yielding land, as stated previously, is described as lying in the NE 1/4 of the SW 1/4 of Section 8, Township 10 South, Range 13 West. The Cox land lies immediately to the north of the Yielding land, in the SE 1/4 of the NW 1/4 of Section 8, Township 10 South, Range 13 West. It is unnecessary to consider the chain of title to each parcel in great detail.

The Yieldings purchased their property in 1959. At the time of the purchase an old fence was in existence to the north of the government survey line.

There was testimony before the court that one of the Yieldings’ predecessors in title, Andy Rayburn, cultivated the land up to the fence from 1951 to 1956. This use was continued by Norma Lou and Roy Brooks during the period 1956-1959. Beginning in 1959 and for eight years thereafter Walter Yielding cultivated the land up to the fence and treated the fence as the boundary line. He replaced the old fence during this period, and after ceasing to cultivate the land he has used it for pasture for a period of 14 years. It is clear, then, that Yielding and his predecessors in title treated the land as their own from 1951 until the commencement of this case in 1981. We hold that there was sufficient evidence before the trial court to establish that the Yieldings had acquired title by adverse possession.

This case is complicated, however, by one additional fact. In October of 1976 the Yieldings sold to the Coxes a two-acre tract. ■ The deed to the tract described the property by some references to the government survey lines. Thus, with a holding by the trial court that the Yieldings acquired title to all of the land up to the fence by adverse possession, the Coxes were left owning a two-acre tract approximately 100 to 150 feet south of the fence.

The trial court purported to resolve this problem by moving the northern boundary of the two-acre tract from the north line of the NE 1/4 of the SW 1/4 up to the fence line:

“[T]he true boundary line between the lands of the Plaintiffs N.R. Yielding, and Louise Yielding and the lands of the Defendants James Archie Cox and Lottie Cox is described as follows, to-wit:
“ ‘Begin at a hickory tree which has old wire going west and south therefrom, which is near the NE corner of the NE 1/4 of SW 1/4 of Section 8, Township 10 South, Range 13 West, which is immediately North of an old wire fence, go thence westerly along said old wire fence a distance of approximately 340 feet, thence South 4 degrees 50 minutes East a distance of 210 feet; thence South 85 degrees 10 minutes West a distance of 396.19 feet to a point on the easterly boundary of Alabama Highway No. 187; which said point is the western terminus of the coterminous boundary between the lands of the Plaintiffs and the lands of the Defendants James Archie Cox and Lottie Cox.’ ”

We hold that the trial court was in error in fixing the northern boundary in this manner without a determination of the effect of the 1976 deed.

Appellants Cox direct the Court’s attention to the Yieldings’ failure to request reformation of the 1976 deed. However, under the Alabama Rules of Civil Procedure, the trial court is directed to “grant the relief to which the party in whose favor [the judgment] is rendered is entitled, even if the party has not demanded such relief in his pleadings.” A.R.Civ.P. 54(c). There was evidence before the trial court which would have justified reformation of the deed based upon mutual mistake. Palmer v. Palmer, 390 So.2d 1050 (Ala.1980). The trial court could not properly fix the boundary line in the manner it did without reforming the 1976 deed. Therefore this portion of the decree is reversed and remanded for proceedings consistent with this opinion.

Ill

Finally, we turn to the dispute involving appellants McKinney, whose land also lies to the north of the Yielding land. Both appellants McKinney and appellants Cox own land to the north of the Yielding land. These appellants’ parcels are both located in the SE 1/4 of the NW 1/4 of Section 8, Township 10 South, Range 13 West, Marion County, Alabama. The parcels are separated by Alabama Highway No. 187.

Prior to 1948 Henry and Polly Bobo owned the land currently held by appellants McKinney and the Yieldings. In 1948 they sold the southern portion of this land to Archie Wiginton, the Yieldings’ predecessor in title. They continued to hold the northern portion until 1966 when it was sold to appellants McKinney. During the period that Henry and Polly Bobo held the tracts in question a fence was built running west from Highway 187, dividing the two tracts. The southern tract was sold by the Bobos in 1948 to Archie Wiginton. Wiginton sold the tract in 1951 to Andy Rayburn. Rayburn sold the tract in 1956 to Norma Lou and Roy Brooks. When the Yieldings purchased the property in 1959 the fence was still standing. There was testimony before the trial court that Walter Yielding had cultivated the land up to the fence from 1957 as the tenant of Norma Lou and Roy Brooks until the Yieldings purchased the land from the Brookses in 1959. There was also testimony that Yielding continued to cultivate the land through 1968. The trial court could have properly considered the cultivation of the land by Walter Yielding as the tenant of the Brookses to be adverse to Henry and Polly Bobo. In addition, the continued cultivation by Yielding after he purchased the land from the Brookses, would result in the tacking of periods of adverse possession, thus meeting the 10-year period required by law. Thus, we cannot conclude that the trial court was in error in holding:

“That the true boundary line between the lands of the Plaintiffs N.R. Yielding and Louise Yielding and the lands of the Defendants Walter C. McKinney and Clara M. McKinney is described as follows, to-wit:
“ ‘Begin at an iron stake along an old fence line, said iron stake being near the NW corner of the NE 1/4 of SW 1/4 of Section 8, Township 10 South, Range 13 West, the NW boundary of Plaintiffs’ lands; go thence in an easterly direction along said old fence line to the westerly right-of-way of Alabama Highway No. 187, which said point of intersection is the eastern terminus of the coterminous boundary between the lands of Plaintiffs and the lands of Defendants Walter C. McKinney and Clara M. McKinney.’ ”

Thus, as to the McKinneys and the Kel-leys, there appears to have been sufficient credible evidence supporting the decree, and the decision of the trial court is due to be affirmed. The trial court erred in setting the northern boundary without considering the 1976 deed from the Yieldings to the Coxes and this portion of the decree is reversed and remanded.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

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


author: BRADLEY, Judge.

text:
    Debra Jane COSBY (Poe) v. Irma and Louie COSBY, and Louie Edward Cosby, II.
    Civ. 3303.
    Court of Civil Appeals of Alabama.
    Sept. 15, 1982.
    Rehearing Denied Oct. 20, 1982.
    Certiorari Denied Feb. 25, 1983 Alabama Supreme Court 82-100.

      Maryon P. Allen and Richard W. Bell of Bell, Yeager, Allen & Johnson, Pelham, for appellant.
    Huel M. Love, Talladega, for appellee.
   BRADLEY, Judge.

This'is a child custody ease.

Debra Jane Cosby Poe, the appellant, was married to Louie Edward Cosby II on August 24, 1973. One child was born of this marriage. On September 15, 1980 the couple was divorced. An agreement incorporated into the divorce decree gave custody of the child to the appellant.

On April 14,1981 the minor child’s paternal grandparents filed a complaint in the Circuit Court of Shelby County seeking custody of the child. Debra Jane Cosby Poe and Louie Edward Cosby II were named as defendants in the complaint. The grandparents-appellees alleged that there had been a material change of circumstances since the rendition of the divorce decree. Also, allegations were made that the appellant was an unfit mother and was not properly caring for the child.

Irma and Louie Cosby, the grandparents, also made a motion to enjoin the appellant from removing the child from the jurisdiction of this state. The motion was granted.

After a hearing in May 1981, the court found that there had been a material and substantial change in conditions since the divorce decree was rendered. Custody of the child was awarded to the grandparents and the appellant was granted visitation rights.

On January 8, 1982 appellant filed a rule nisi and a verified petition to modify in Shelby County Circuit Court. The court dismissed the rule nisi since the same basic allegations were made in the petition to modify. A modification hearing was held on April 13, 1982. Numerous witnesses, including a psychologist and the child’s school principal, testified at the trial.

Based on the testimony and evidence presented, the court found that the child had shown physical, emotional, and academic improvement. The court held that the continuation of the grandparents’ custodial rights was in the best interest of the child. It is from this decision that Debra Jane Cosby Poe appeals.

Appellant’s first contention is that the Circuit Court of Shelby County did not have jurisdiction to hear the original complaint for child custody filed by Louie and Irma Cosby back in 1981. In support of her contention the appellant relies, in part, on section 12-15-30(b), Code 1975, which states:

“(b) The [juvenile] court shall also exercise exclusive original jurisdiction of the following proceedings, which shall be governed by the laws relating thereto:
“(1) Proceedings to determine custody or to appoint a legal custodian or guardian of the person of a child when the child is otherwise before the court. This provision, however, shall not be construed to deprive other courts of the right to determine the custody or guardianship of the person of children when such custody or guardianship is incidental to the determination of cases pending in those courts. Such courts, however, may certify said questions to the juvenile court for hearing and determination or recommendation.”

In Rowe v. Hill, 365 So.2d 1247 (Ala.Civ.App.1979), this court was faced with a statutory jurisdictional argument similar to the one advanced by the appellant. We noted in Rowe that section 12-15-30 specifically provides that courts, other than juvenile courts, have jurisdiction to hear and decide child custody cases. We then recognized the language of Wise v. Watson, 286 Ala. 22, 236 So.2d 681 (1970), in which our supreme court said:

“In case of divorce of the parents, equity courts have inherent power to protect the welfare of the minor children born of the broken marriage and to make appropriate allowances for them, and, having once obtained jurisdiction over the children of divorced parents, the court retains jurisdiction during their infancy.” (Citations omitted.)

In view of Rowe, we hold that the Shelby County Circuit Court had jurisdiction to hear the child custody complaint. See also Collier v. Collier, 57 Ala.App. 208, 326 So.2d 769 (Ala.Civ.App.1976).

Appellants’ second contention is that the trial court erred by not granting her custody of the child. She argues that the evidence introduced in the 1981 custody proceeding did not conclusively demonstrate that a change was in the child’s best interest. No appeal was taken from that decree, hence this contention comes too late. Cochran v. Cochran, 289 Ala. 615, 269 So.2d 897 (1972).

As to the trial court’s refusal to grant appellant custody of her child, this court has consistently held that the determination of child custody is in the trial court’s discretion. “The exercise of such discretion after oral hearing of evidence will not be set aside unless it is so contrary and unsupported by the evidence as to appear clearly adverse to the best interest and welfare of the child.” Reaves v. Reaves, 399 So.2d 311 (Ala.Civ.App.1981). Our review of the record reveals evidence supporting the trial court’s findings. The child showed mental and physical improvement since being in the custody and care of his grandparents. It appears this custodial arrangement is in the child’s best interest.

Appellant and appellee have requested an attorney’s fee on appeal, and both requests are denied.

This case is due to be affirmed.

AFFIRMED.

WRIGHT, P.J., and HOLMES, J., concur.


text:
    Charles Edward McCLURE v. Connie Sue McClure CASSADY.
    Civ. 3382.
    Court of Civil Appeals of Alabama.
    Dec. 15, 1982.
    Rehearing Denied Jan. 19, 1983.
    David R. Donaldson, Birmingham, for appellant.
    No brief for appellee.
   BRADLEY, Judge.

Charles Edward McClure and Connie Sue McClure Cassady were divorced on the ground of incompatibility of temperament on August 1, 1974. The wife received custody of the couple’s one minor child, Scott, and the husband was given visitation rights. He was also ordered to pay $10 per week child support. The divorce decree recited that the husband was to “provide insurance for medical care of the said minor child through a Blue Cross Blue Shield Policy and shall furnish a current card to plaintiff for the minor child.” Subsequently, the husband filed a motion to modify, seeking custody of the child; and the wife filed a counterclaim, alleging that the husband was $300 in arrears in child support and that he had failed to provide medical insurance for their son. The court, in a judgment signed March 15, 1976, ordered that “[t]he defendant will furnish to the plaintiff immediately a card designating insurance coverage on his son.” The instant appeal arises from a contempt citation filed by the husband on February 4,1982, alleging that the wife had kept him from seeing his son and a counterclaim for contempt by the wife, charging that he was in arrears by $1,540 in child support and he had failed to supply her with evidence, i.e. a card, of present medical insurance coverage on the son and that she had incurred medical expenses of $3,164.17 for which the husband would be liable. After an ore tenus hearing in which neither party was found to be in contempt, the husband was ordered to pay an arrearage of $1,750 in child support. The court also found that he was liable for his son’s medical expenses and ordered him to pay $2,809.60. The husband has appealed to this court from that judgment.

The sole issue raised in the husband’s brief concerns the language in the modified divorce decree which required him to furnish an insurance card for his son to his former wife. It is his contention that this judgment did not obligate him to pay medical expenses incurred by his son but rather required that he furnish the card as evidence of insurance for medical expenses. The wife has failed to file a brief in reply.

The main thrust of the husband’s argument centers on our decision in Miller v. Miller, 361 So.2d 577 (Ala.Civ.App.1978), where we said:

“We must agree with the wife, however, that the paragraph of the judgment numbered ‘Seventh’ is so lacking in clarity as to be unenforceable. There is direction therein that the defendant husband ‘obtain and keep in full force and effect life insurance, with the minor child ... as primary beneficiary .... ’ There is no amount of insurance specified. We reverse Paragraph Seventh and remand for reconsideration and amendment as to the amount and kind of insurance to be obtained together with any other amendment thereto considered meet and proper by the trial court.”

It is the father’s contention that the trial court’s 1976 judgment which ordered him to provide his former wife with a medical insurance card for his son was satisfied when he, in fact, obtained medical coverage for his son and gave a card to his former wife. Testimony by the husband at trial indicated that he had provided medical insurance for his son until eight months before the hearing and that he intended to add his son to his policy within a week. He further testified that he had given an insurance card to his former wife. The husband argues that the judgment does not in any way obligate him to pay medical expenses incurred by the child.

In Miller we concluded that the provision of the decree requiring the maintenance of a life insurance policy for the benefit of the minor child lacked clarity because it failed to specify the kind and amount of insurance required of the father. In the case at bar there is no such lack of clarity, for it is obvious that the trial court’s prior decrees clearly required the father to maintain in force and effect a medical insurance policy for the benefit of his minor son and that he furnish his former wife evidence of such insurance in the form of a card from the respective insurer. The father was not required to pay all of the medical expenses incurred by his child but was required only to obtain a medical insurance policy. Nevertheless, the trial court did require the father to pay all of the child’s medical expenses after having found that the father had not maintained a policy of medical insurance for the benefit of the child. From the record it appears that the trial court concluded that the terms of the decrees in question were ambiguous and thus it was permitted to construe them. But, if the terms in question were not ambiguous, they should have been given their usual and ordinary meaning. Wise v. Watson, 286 Ala. 22, 236 So.2d 681 (1970).

In the case at bar the usual and ordinary meaning of the terms in question required the father to maintain medical insurance for the benefit of his son, not to pay all of the child’s medical expenses. Yet, the trial court did not find the father in contempt for failure to maintain medical insurance on his son as directed by the prior decrees and then did not require him to pay the medical expenses incurred by the child as compensation or as a fine for the benefit of the child as it could have done. See Carter v. State ex rel. Bullock County, 393 So.2d 1368 (Ala.1981). Instead the court required the father to pay all of the medical expenses that had been incurred by the child. Whatever may have been its reason for requiring the father to pay his child’s medical expenses, the trial court’s judgment will be upheld.

We said in Tucker v. Tucker, 403 So.2d 262 (Ala.Civ.App.1981) that:

“The obligation of a parent to support a minor child cannot be permanently removed by agreement, release or judgment, if circumstances require its re-invocation in the future. Moore v. Moore, 57 Ala.App. 735, 331 So.2d 742 (1976); Womble v. Womble, 56 Ala.App. 318, 321 So.2d 660, cert. denied, 295 Ala. 429, 321 So.2d 664 (1975); Donald v. Donald [50 Ala. App. 9, 276 So.2d 436 (1973) ]. One parent cannot permanently waive or release the other parent from their obligation to meet the needs of children for support as that need is shown to exist at the time. If the non-custodial parent is financially able to respond to those needs, it is the responsibility of the court, upon petition and proof, to cause them to do so.”

It is apparent from the record that appellant’s child had incurred the medical expenses in question, and it further appears that appellant is financially able to pay those medical expenses. We therefore conclude that the trial court did not err in requiring the father to pay the medical expenses incurred by his child.

AFFIRMED.

WRIGHT, P.J., and HOLMES, J., concur.


author: HOLMES, Judge.

text:
    H. Wade SEXTON v. TUSCALOOSA COUNTY CIVIL SERVICE BOARD.
    Civ. 3446.
    Court of Civil Appeals of Alabama.
    Jan. 5, 1983.
    Rehearing Denied Feb. 2, 1983.

      Perry Hubbard and James D. Smith of Hubbard, Waldrop, Tanner & deGraffen-ried, Tuscaloosa, for appellant.
    James G. Lee of Lee, Barrett & Mullins, Tuscaloosa, for appellee.
   HOLMES, Judge.

The appellant, H. Wade Sexton, appeals from an order of the Tuscaloosa Circuit Court affirming the action of the Tuscaloosa County Civil Service Board which demoted Sexton and suspended him without pay during the period of time that he had been dismissed from work by order of the board.

Sexton had been an employee of Tuscaloosa County for more than fifteen years. As a county employee, Sexton had all the rights and privileges accorded by Act No. 357, Acts of Alabama, Regular Session 1949, which Act establishes a civil service system for employees of Tuscaloosa County, Alabama. For the two and one-half years pri- or to the incident which led to this action he was superintendent of the county shop. As superintendent, he had charge of scrap metal at the shop. In 1978, he sold a truck engine for scrap for $100 and did not turn the money in to the county.

In May, 1979, the Tuscaloosa Probate Judge dismissed Sexton from his position. Sexton appealed his dismissal to the Tuscaloosa County Civil Service Board. After a hearing, the board ratified and confirmed the probate judge’s dismissal of Sexton.

During this time, Sexton was indicted for embezzlement of county property, and upon trial by jury was found guilty. This conviction was overturned in Sexton v. State, 392 So.2d 1239 (Ala.Cr.App.), cert. denied, 392 So.2d 1241 (Ala.1980). When the case was presented a second time to the Grand Jury, they rendered a no bill.

After the reversal by the Alabama Court of Criminal Appeals, the civil service board held a second hearing on the matter, and issued a modified order in January, 1982. This order, in pertinent part, said that “Sexton was foreman of the County shop at the time he committed the offense involved here, and as such shop foreman had a high degree of duty to protect County property, and that he clearly breached his duty by committing the act or acts complained of herein.”

Finding that it would not be in the best interest of the county to reinstate Sexton as superintendent, or foreman, the board nonetheless found he was a competent mechanic and should be allowed to return to work for the county as a mechanic.

In July of 1982, after hearing oral arguments of the attorneys and a review of the record, the Tuscaloosa Circuit Court affirmed the modified order of the civil service board. From this decree the appellant Sexton appeals, and we affirm.

Act No. 357, Acts of Alabama, Regular Session, 1949, provides in § 11 that:

“The [circuit] court shall affirm the decision of the Board unless it finds that the substantial rights of the petitioner have been prejudiced because the final decision of the Board was: (1) unsupported by substantial evidence in the record submitted; (2) in excess of the authority conferred by this Act on the Board; (3) violative of constitutional provisions; (4) arbitrary or capricious; or (5) affected otherwise by substantial error or injustice.”

In keeping with those standards, Sexton, through able counsel, contends the action by the civil service board was not supported by substantial evidence; that his due process and constitutional rights were violated; and that the actions of the board were arbitrary and capricious.

Sexton specifically contends the decision of the civil service board to reinstate appellant at a demoted position and to not award back pay was not supported by substantial evidence as required by the governing Act.

Our supreme court and this court have accepted as a definition of “substantial evidence” the following:

“ ‘1. Substantial evidence is a “rational basis for the conclusions approved by the administrative body.” ...
“ ‘2. Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” ...
“ ‘3. * * * substantial evidence is more than a scintilla and must do more than create a suspicion of the existence of a fact to be established. * * * “ ‘it means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion’ * * * and it must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury.” ... ’ ”

Morris v. City Commission of Birmingham, 263 Ala. 664, 668, 83 So.2d 717, 721 (1955); Peseau v. Civil Service Board of Tuscaloosa County, 385 So.2d 1310 (Ala.Civ.App.1980).

The governing Act in § 11 furthermore provides that no permanent employee may be removed or demoted except for “cause.” When used in such a context the term “cause” had been defined as meaning “reasons which the law and sound public policy recognize as sufficient warrant for removal, that is, legal cause, and not merely cause which the appointing power in the exercise of discretion may deem sufficient.” Peseau v. Civil Service Board of Tuscaloosa County, supra, at 1312. The cause must be “one which specifically relates to and affects the administration of the office, and must be restricted to something of a substantial nature directly affecting the rights and interests of the public.” Peseau v. Civil Service Board of Tuscaloosa County, supra, at 1312.

This court has previously held that the terms “substantial evidence” and “cause” contained in the Act must be considered together and applied together. Pe-seau v. Civil Service Board of Tuscaloosa County, supra. There must be a “cause” to discharge or demote a civil service employee, and that “cause” must be established at a hearing before the board by “substantial evidence.”

In the instant case, Sexton contends the “substantial cause” standard was not met once his conviction of embezzlement was overturned, and no longer constituted legal evidence. However, we held in a previous case, which also arose from a Tuscaloosa County Civil Service Board action, that “[t]he order of an administrative board is not to be vacated because of receipt of evidence, not admissible under general rules of evidence, so long as there is sufficient legal evidence to sustain the order.” Edmondson v. Tuscaloosa County, 48 Ala.App. 372, 265 So.2d 154 (1972). In this case there is other evidence aside from Sexton's conviction which supports the board’s action. Sexton himself admits he sold the engine and kept the money which allegedly would be spent on the coffee fund and on a fish fry. His defense was that, “I was carrying out just what had always been done.” There was testimony from several sources that it had been and was the common practice to sell scrap metal and use the proceeds for coffee and fish fries for county employees. This was apparently done despite the official procedure of turning the proceeds in to the clerk of the county commission. However, it is noted that in the instant case the money was not used for coffee or a fish fry but was retained by the employee.

Among the enumerated causes for dismissal or demotion in the Tuscaloosa County Civil Service Board, Rules of Conduct for Tuscaloosa County Employees (Nov. 4, 1974) are: “j. The use of county equipment or county supplies contrary to the policies and regulations made by the Tuscaloosa County Commission or the Department Head in the department in which he works. ... [and] ... n. Theft.”

Therefore, there is “substantial evidence,” i.e., his own admission, independent of the jury’s verdict, of “cause” to dismiss or demote Sexton. We are aware that testimony by several witnesses, including two county commissioners, indicates that what Sexton intended to do, i.e., use the money for a fish fry or to provide coffee was indeed no different than what commonly, though unofficially, had been done for several years. Nonetheless, such practice was apparently not the official procedure. In any event, the action of the employee in the matter, i.e., his retention of the money, could have been determined to be contrary to the “Rules of Conduct.”

Employee next contends that the actions of the board violated his constitutional rights, specifically his substantive due process rights. No claim was made that Sexton’s procedural due process rights were violated. The basis of his substantive due process claim is that since the substantial evidence requirement was not met, the board’s actions violated his constitutional rights by depriving him of property without due process. As indicated above, we find the substantial evidence requirement was met. Therefore, the due process argument which depends upon finding a lack of substantial evidence must fail.

Sexton next contends the board’s actions were arbitrary and capricious in that they are demoting him for doing what was apparently standard practice. A decision is not arbitrary where there is a reasonable justification for the decision or where the determination is founded upon adequate principles or fixed standards. State Department of Pensions and Security v. Whitney, 359 So.2d 810 (Ala.Civ.App.1978). Hence, where there is substantial evidence of a legal cause to demote a civil service employee, the action is not arbitrary or capricious.

The case is due to be affirmed.

AFFIRMED.

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


text:
    AUTO-OWNERS INSURANCE COMPANY, a corporation v. Johnny CULPEPPER, d/b/a National Car Rental.
    Civ. 3452-X.
    Court of Civil Appeals of Alabama.
    Jan. 12, 1983.

      John B. Givhan of Albrittons & Givhan, Andalusia, for appellant.
    Jerry E. Stokes,. Andalusia, for appellee.
   HOLMES, Judge.

The plaintiff, bailor, sued the defendant, bailee, and the bailee’s insurance carrier based upon an accident involving the bail- or’s automobile.

After a trial by jury, the plaintiff recovered a verdict in the amount of $250 against the defendant-bailee. On the plaintiff’s claim against the defendant-insurance company, the trial judge entered a judgment in plaintiff’s favor in the amount of $8,050.

From the above judgment, the defendant insurance company appeals, contending that the evidence and the insurance policy are as a matter of law contrary to the trial judge’s action.

Additionally,' the defendant insurance company contends that the statute of limitations prevents the plaintiff from recovering against the defendant insurance company-

The plaintiff cross-appeals, contending the trial court erred in failing to award plaintiff interest.

Viewing the record with the attendant presumptions accorded the trial court, the following is pertinently revealed:

In August, 1979, shortly after wrecking his own automobile, the defendant-bailee rented a car from the plaintiff. While driving this rented automobile through Florida, the defendant-bailee ran off the road and overturned the car causing damage to the vehicle. No other automobile was involved in the accident.

The defendant-bailee had signed an agreement with the plaintiff limiting his liability to $250 unless the contract was violated. The plaintiff had no collision insurance on his automobile at the time of the accident.

The plaintiff filed its original complaint on April 3, 1980 naming the bailee as defendant. After further pleadings, the defendant-bailee filed a motion to dismiss on February 3, 1982. He additionally sought judgment on the pleadings based on the grounds that plaintiff had failed to make the insurance company a party to the action. On April 26, 1982, the trial court denied the defendant-bailee’s motion and granted the plaintiff leave to add the insurance company as a party defendant.

The final complaint that framed the issues for trial stated plaintiff’s claim against the bailee as one based on negligence, or in the alternative, an action for breach of an express contract.

In two separate counts, plaintiff stated its claim against the defendant insurance company. In the first count, the plaintiff stated that it had rented an automobile to the defendant-bailee and that while in his care, the automobile was damaged. The complaint further stated that the defendant insurance company had issued an automobile insurance policy to the bailee which was in full force and effect on the day of the accident. The plaintiff then stated that it had made a demand on the insurance company to pay plaintiff under the terms of the policy but the insurance company had “failed and neglected to do so.”

The plaintiff’s second count against the insurance company realleged the allegations of the previous count and further alleged that a dispute existed between plaintiff and the defendants as to whether the insurance issued by the insurance company provided coverage on plaintiff’s automobile while being operated by the bailee.

Plaintiff then alleged “that the court should determine and declare the rights of the parties under the policy of insurance issued by defendant Auto-Owners Insurance Company to defendant Floyd Michael Mackoff, and should issue its order declaring that the automobile owned by the plaintiff was covered by the collision coverage provided by such insurance policy.”

The plaintiff sought $8,440 on the “negligence” claim against the bailee and $8,470 in damages on the “breach of contract” claim.

Against the insurance company the plaintiff sought $8,470 in damages.

At the trial, all parties stipulated that the insurance company had issued an automobile insurance policy to the defendant-bailee which was in full force and effect at the time of the accident. A copy of the policy was introduced into evidence.

The jury returned a verdict in favor of the plaintiff against the defendant-bailee and assessed damages at $250. In answer to a special interrogatory, the jury found that the bailee was not guilty of negligence at the time of the accident. No appeal was taken from this judgment.

On the declaratory judgment feature of the plaintiff’s complaint, the court found that plaintiff was afforded coverage under the terms of the insurance policy issued to the defendant-bailee. The trial court further ordered that the plaintiff recover $8,050 from the defendant-insurance company.

On appeal, the insurance company contends that the trial court erred inasmuch as the judgment was against the weight of the evidence. It is the insurance company’s position that interpretation of the insurance policy precludes coverage under the facts and circumstances of the instant case.

The insurance company’s specific argument is that the provision of the policy denying coverage to bailees applies to the instant facts and, therefore, plaintiff is not covered.

It is plaintiff’s position that the instant facts fall under the provisions providing collision coverage and what is known as “Drive Other Cars” or “Temporary Use of Substitute Automobile” coverage.

It is firmly established that in cases of this nature, contracts of insurance will be construed strictly against the insurer and liberally in favor of the insured. Life Ins. Co. of Georgia v. Miller, 292 Ala. 525, 296 So.2d 900 (1974); Mutual Life Ins. Co. of New York v. Lovejoy, 201 Ala. 337, 78 So. 299 (1918).

Keeping the above in mind, our review of the policy reveals that the trial court did not err in finding that plaintiff was covered by the policy.

Contrary to able counsel for defendant-insurance company’s contention, our interpretation of the provision concerning bailee is that it does not apply to the facts of the instant case. It appears that this provision was intended to apply to situations where the named insured acted as the bailor. Here, in the instant case, the named insured was the bailee.

The appropriate provision concerning collision coverage provides that the company will pay for loss consisting of damage to the automobile caused by accidental collision with another object or by accidental upset. There is no requirement that the claim be based upon negligence on the part of the named insured. All that is required is that the damages be caused by accidental collision or upset, as the record reveals happened in the instant case.

The insurance policy further contains a list of conditions, two of which are entitled “Drive Other Cars” and “Temporary Use of Substitute Automobile.” Under both conditions collision coverage applies subject to certain requirements and restrictions.

The condition entitled “Drive Other Cars” extends collision coverage to any other automobile not owned or furnished for regular use to the named insured.

This condition applies if the named insured is driving a private passenger vehicle and does not apply if there is any other insurance. It is indisputable that the defendant-bailee was named insured and that the automobile involved was a passenger vehicle. It is also indisputable that no other insurance applied to the situation.

The condition applying to the temporary use of substitute automobiles provides that when the automobile covered is withdrawn from normal use because of its breakdown, repair, servicing, loss or destruction, the coverage afforded by the policy shall be extended to another automobile not owned by the named insured while temporarily used as a substitute.

As was indicated previously, the bailee had rented the automobile in question because he had wrecked his a short time prior to this occasion.

Although we do not deem it necessary to detail all the requirements and restrictions contained in the relevant conditions, it is clear to us from the above that coverage could be afforded to the plaintiff under either condition.

Simply stated, the issue presented to the trial court was whether collision coverage applied under the terms of the insurance contract to the plaintiff’s automobile. Based upon the evidence presented, we cannot say the trial court erred in its determination that coverage did extend to plaintiff’s automobile. Insurance contracts, like other contracts, are to be given a rational and practical construction. Pullen v. Cincinnati Ins. Co., Inc., 400 So.2d 393 (Ala.1981); Alabama Farm Bureau Mutual Casualty Ins. Co., Inc. v. Presley, 384 So.2d 122 (Ala.Civ.App.1980). In view of the above standard, we find no error in the trial court’s judgment.

The insurance company next contends that plaintiff’s claim against them was barred by the one year statute of limitations.

The insurance company characterizes plaintiff’s claim as a negligent failure to pay grounded in tort law. We do not agree.

The allegations of a complaint are construed in a light most favorable to the plaintiff. Holley v. St. Paul Fire & Marine Ins. Co., 396 So.2d 75 (Ala.1981). Clearly, the claim against the insurance company is grounded in contract and neither party seriously contends that the trial court was without the “authority” to enter a judgment against one of the parties on the plaintiff’s claim against the insurance company.

The substance of the plaintiff’s complaint against the insurance company is whether the collision coverage provided by the insurance policy extends to plaintiff’s automobile and whether the insurance company’s failure to pay resulted in a breach of the contract. This falls clearly within contract law, and that being so, the applicable statute of limitations would be six years, not one year. Ala.Code § 6-2-34(4) (1975).

As indicated, the plaintiff on cross appeal, contends the trial court’s judgment should have included interest from August 16, 1979.

The relevant statute, Ala.Code § 8-8-8 (1975), provides that “[a]ll contracts, express or implied, for the payment of money, or other thing, or for the performance of any act or duty bear interest from the day such money or thing, estimating it at its money value, should have been paid, or such act, estimating the compensation therefor in money performed.” In an action for damages to a plaintiff’s automobile, this section allows interest on the damages. Roe v. Brown, 249 Ala. 425, 31 So.2d 599 (1947).

However, certain requirements must be met. “(1) The amount due must be certain; (2) the time when it is due must be certain; (3) the amount due and time of payment must be known to the debtor.” Roe v. Baggett Transportation Co., 326 F.2d 298, 301 (5th Cir.1963), quoting Grand Bay Land Co. v. Simpson, 207 Ala. 303, 92 So. 789 (1922).

In the instant case, the insurance carrier was not made a party to the action until April 26,1982 when plaintiff amended his complaint. In other words, the insurance carrier was not a party to this action until two years and eight months after the date plaintiff now claims interest is due from. Additionally, it is not clear from the record when a demand of any nature was made on the insurance carrier.

In light of the requirements that the amount due and time of payment must be known to the debtor, we cannot say the trial court erred in not awarding interest.

The case is due to be affirmed.

AFFIRMED.

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