author: HOLMES, Judge.

text:
    FIRST DALLAS COUNTY BANK v. GENERAL MOTORS ACCEPTANCE CORPORATION and Everette Smith.
    Civ. 2906.
    Court of Civil Appeals of Alabama.
    Feb. 10, 1982.
    Rehearing Denied March 10, 1982.
    Joe T. Pilcher, Jr. of Pilcher & Pilcher, Selma, for appellant.
    Charles H. Sims, III, Selma, for appellees.
   HOLMES, Judge.

This is a case of first impression in Alabama involving the priority of conflicting security interests in an automobile.

General Motors Acceptance Corporation (GMAC) and First Dallas County Bank both claim a security interest in an automobile owned by Everette Smith. GMAC and the bank both requested a declaratory judgment to determine the status of title to the automobile and the priority of the liens asserted by them. An ore tenus hearing was held on the declaratory judgment action.

On April 30, 1981 the trial court held, in pertinent part, that GMAC was entitled to immediate possession of the automobile in question. On May 28, after the bank had requested a new trial, the trial court amended its original order to require that the vehicle be sold and the proceeds reported to the court. After the trial court amended its original order, the bank again made a motion for a new trial. This motion was denied and the bank appeals to this court.

The primary issue before this court is whether, in this instance, the bank is protected by the provisions of sections 7-9-307 and 32-8-60, Code of Alabama 1975. The trial court held that it was not protected by the above provisions. For the reasons hereinafter stated, this court concludes that the learned and distinguished trial judge erred in so holding.

The record reveals the following: On April 19, 1980, Julius Davis purchased a new 1980 Pontiac TransAm from Marion Motor Company. Though Davis was a used car dealer, there is evidence that he purchased this particular vehicle for his own personal use and not for resale. The installment sales contract/security agreement provided for payments over a period of forty-eight months and gave Marion Motor Company a security interest in the vehicle. Marion Motor Company subsequently assigned its security interest to GMAC. A certificate of title was issued pursuant to the Alabama Certificate of Title Act showing Julius Davis as owner and GMAC as first lienholder.

Davis kept the automobile for approximately seven months. During this time the automobile was apparently used by Davis as his own personal vehicle. On November 12, 1980, Davis sold the automobile to Everette Smith.

Smith obtained a loan from First Dallas County Bank for the purpose of obtaining funds with which to buy the vehicle. In order to procure this loan Smith entered into an installment sales contract-security agreement which gave the bank a security interest in the automobile. The proceeds of the loan were given to Davis in full payment of the purchase price of the automobile. Davis, however, did not pay GMAC the balance due on his loan, and, thus did not obtain from GMAC the original title on the vehicle. Consequently, GMAC retained the original title, along with the note, financing statement, security agreement and other loan documents furnished by Davis in connection with his loan.

GMAC subsequently learned that Davis had sold the automobile to Smith but had failed to pay GMAC. After notifying the bank of GMAC’s security interest, GMAC filed a conversion and detinue action against Smith and the bank. The bank filed an answer, cross-claim and counterclaim in which it denied liability, asserted that it was not in possession of the automobile, asserted claims against Smith for his liability to the bank, asserted claims against GMAC for abuse of process and sought a declaratory judgment to determine the priority of the conflicting security interests. Following a hearing on motions filed by the bank, GMAC amended its complaint to delete the bank as a defendant under the detinue and conversion counts of its complaint. GMAC added a count seeking a declaratory judgment to determine the priority of the security interests.

On April 27, 1981, an ore tenus hearing was held for the purpose of determining the legal aspects of the declaratory judgment counts. Following the hearing the trial court made a finding of fact and entered an order on April 30, 1981, within which the trial court held that GMAC was entitled to immediate possession of the automobile. By so holding, the trial court implicitly held that GMAC’s security interest took priority over the bank’s security interest.

The bank filed a motion for a new trial on May 7, 1981. As grounds for its motion the bank maintained that the trial court could not properly reach a decision based upon contested factual issues because Smith had demanded a jury trial.

Following a hearing on the bank’s motion the trial court amended its original order to require that the automobile be sold in a reasonably commercial manner and that the proceeds be reported to the court. The amendment did not change the original order regarding the priority of the security interests.

Both the bank and Smith filed motions for a new trial after the amended order was rendered. These motions were overruled and the bank appeals to this court from the amended order.

Preliminarily, the bank contends that the trial court erred in conducting an evidentiary hearing, making findings of fact and rendering a judgment in light of the fact that a jury trial had been requested.

According to rule 39(a)(1), A.R.C.P., when a jury trial has been demanded, there must be a trial by jury on all the issues so demanded unless “the parties or their attorneys of record, by written stipulation filed with the court or by an oral stipulation made in open court and entered in the record, consent to trial by the court sitting without a jury .... ”

Although a jury was clearly demanded, a review of the record reveals that the bank’s attorney consented to a trial by the court on the issue of lien priority.

As indicated above, the bank requested a declaratory judgment on the issue of lien priority. The record reveals that the bank’s attorney urged that this issue be determined as quickly as possible. In response to this urging, the trial court stated that it could have a hearing on the declaratory judgment on April 27. The bank’s attorney agreed to that date and further stated that lien priority was a legal issue that could be ruled upon at the April 27 hearing. A hearing was held on April 27. Although he did not present any witnesses, the bank’s attorney fully participated in the hearing through his right of cross-examination.

The foregoing clearly indicates that the bank’s attorney consented to a trial by the court on the issue of lien priority. The bank contends, however, that since a jury trial had been demanded, the trial court could determine the legal issues only. In order to determine the priority of the liens, which is a question of law, the trial court had to make some factual determinations. If it were not necessary to make some factual determinations, it would have been pointless to conduct a hearing and receive testimony. In this regard we again note that the bank’s attorney fully participated in the hearing.

Additionally, we note that the bank’s attorney at no time during the hearing ever objected to proceeding without a jury. In fact, this issue was raised for the first time in the bank’s motion for a new trial after the trial court had ruled adversely to the bank. Our supreme court has previously held that in order to preserve error for appeal there must be an objection and an adverse ruling at the trial level. Holt v. Davidson, 388 So.2d 548 (Ala.1980); Record Data International, Inc. v. Nichols, 381 So.2d 1 (Ala.1979).

For the foregoing reasons we conclude that the bank’s contention regarding the jury demand is without merit.

We now turn to the primary issue in this case. As indicated earlier, the bank contends that its lien has priority due to sections 7-9-307(1) and 32-8-60. GMAC obviously disputes this contention. Specifically, GMAC relies upon section 7-9-307(2), Code of Alabama 1975, to establish its priority.

Section 7-9-307(2) provides, in pertinent part, the following:

In the case of consumer goods, ... a buyer takes free of a security interest even though perfected if he buys without knowledge of the security interest, for value and for his own personal, family or household purposes ... unless prior to the purchase the secured party has filed a financing statement covering such goods.

GMAC, through able counsel, contends that the automobile was a consumer good when purchased by Davis and, furthermore, that the automobile remained a consumer good even though Davis placed it on his used car lot and sold it to Smith. Thus, according to GMAC, since the automobile was a consumer good when sold to Smith and since GMAC had properly perfected its security interest in the automobile prior to its sale, GMAC has priority over both Smith and the bank under section 7-9-307(2).

In order to resolve this issue we must examine the scope and proper applications of both subsections of section 7-9-307. Both subsections are basically designed to protect the consumer. The amount of protection offered by each subsection differs, however, and each subsection applies to a distinct and exclusive situation.

Section 7-9-307(1) provides as follows:

A buyer in ordinary course of business (subsection (9) of section 7-1-201) other than a person buying farm products from a person engaged in farming operations takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.

Though not specifically so limited, subsection (1) applies primarily to the sale of inventory. This limitation is apparent if section 7-9-307(1) is read in conjunction with certain definitions found in the Uniform Commercial Code. Subsection (1) protects only a “buyer in the ordinary course of business.” One can be a “buyer in the ordinary course of business” only if a purchase is made from someone who is in the “business of selling goods of that kind.” Section 7-1-201(9), Code of Alabama 1975. By definition, goods held for sale are inventory. Section 7-9-109(4), Code of Alabama 1975. See II G. Gilmore, Security Interests in Personal Property § 26.6 (1965); J. White & R. Summers, Handbook of the Law Under the Uniform Commercial Code § 25-13 (2d ed. 1980).

Subsection (1) allows a “buyer in the ordinary course of business” to take free of a security interest created by his seller because it is felt that such a buyer has the right to expect that a merchant has the power to sell the particular item and that the buyer will be able to retain the item free of any security interest created by the seller, Northern Illinois Corporation v. Bishop Distributing Co., 284 F.Supp. 121 (W.D.Mich.1968); Texas National Bank of Houston v. Aufderheide, 235 F.Supp. 599 (E.D.Ark.1964); 4 R. Anderson, Uniform Commercial Code § 9-307:11 (2d ed. 1971). In addition, it would be impractical to expect buyers to make a record search of financing statements each time they purchase an item in order to ensure that the item is not encumbered. Northern Illinois Corp. v. Bishop Distributing Co., supra; R. Braucher & R. Riegert, Introduction to Commercial Transactions 455 (1977). A final point that supports protecting “buyers in the ordinary course of business” is the fact that secured creditors who know that goods financed by them are inventory must expect that the goods will be sold and, consequently, that the “buyer in the ordinary course of business” should have superiority. 4 R. Anderson, supra, at § 9-307:8.

Like subsection (1), subsection (2) is applicable to a limited type of transaction. However, unlike subsection (1), subsection (2) provides only limited protection to the consumer. Subsection (2) was intended to apply only to transactions in which a purchaser buys consumer goods from someone who is not in the business of selling goods of that kind, i.e., a non-merchant. See section 7-2-104(1), Code of Alabama 1975. A close reading of the provision reveals that subsection (2) applies only if the goods involved are consumer goods in the hands of both the buyer and seller. New England Merchants National Bank of Boston v. Auto Owners Finance Co., 355 Mass. 487, 245 N.E.2d 437 (1969); Memphis Bank & Trust Co. v. Pate, 362 So.2d 1245 (Miss.1978); Everett National Bank v. Deschuiteneer, 109 N.H. 112, 244 A.2d 196 (1968).

A basic example of the type of transaction that subsection (2) was intended to apply to is a yard sale wherein one consumer sells secondhand goods to another consumer. Stated differently, subsection (2) applies to sales by amateurs to amateurs. II G. Gilmore, supra at § 26.12. A buyer in such a transaction takes free of a prior security interest only if, prior to the purchase, the secured party has filed a financing statement. Perhaps a secured creditor under subsection (2) is given more protection because, unlike the situation under subsection (1), a creditor having a security interest in consumer goods has no reason to expect that the goods will be sold.

Though we acknowledge that there is support in both cases and commentaries for GMAC’s contention that section 7-9-307(2) controls (Balon v. Cadillac Automobile Co. of Boston, 113 N.H. 108, 303 A.2d 194 (1973); II G. Gilmore, supra at § 26.8), it is apparent, in light of the above discussion, that the facts and circumstances of this case are not within the intended scope of section 7-9-307(2). Admittedly there is evidence to support the trial court’s finding that the automobile was a consumer good when purchased by Davis. There is also authority from other states for GMAC’s contention that the automobile remained a consumer good while in Davis’s possession. Franklin Investment Co. v. Homburg, 252 A.2d 95 (D.C.1969); Balon v. Cadillac Automobile Co. of Boston, supra; McGehee v. Exchange Bank & Trust Co., 561 S.W.2d 926 (Tex.Civ.App.1978). However, this is simply not a case of an amateur selling a used automobile to another amateur. Rather, it is a case of a used car dealer, a merchant, selling a used car to a purchaser in the ordinary course of the dealer’s business.

Since section 7-9-307(2) does not apply to these facts, we must hold that the outcome of this case must be governed by section 7-9-307(1). Applying section 7-9-307(1) to the facts of the instant case we conclude that Smith took the automobile free of GMAC’s security interest.

Viewed from Smith’s perspective, this decision is clearly appropriate. It is undisputed that Davis was engaged in the business of selling automobiles. Smith came to Davis’s lot and bought an automobile from him in the ordinary course of Davis’s business. Though it makes no difference under section 7-9-307(1), Smith neither knew of GMAC’s interest nor knew that it was perfected. Clearly Smith had a right to expect that Davis had the power to convey the automobile to him and that he could retain the automobile free of any security interest created by Davis. In addition, GMAC clearly knew that Davis was in the used car business and GMAC could have anticipated that Davis would sell the automobile at some future time.

In closing we briefly mention the Uniform Certificate of Title and Antitheft Act. Where motor vehicles are concerned, this Act rather than Article 9 of the U.C.C. governs the perfection of security interests. Sections 7-9-302(3)(b) and 32-8-66, Code of Alabama 1975. Section 32-8-60(3) of the Act is analogous to section 7-9-307(1) and provides as follows:

This chapter does not apply to or affect:
(3) A security interest in a vehicle created by a manufacturer or dealer who holds the vehicle for sale, but a buyer in the ordinary course of trade from the manufacturer or dealer takes title free of the security interest.

Based upon our previous determinations that Davis was a deal- r who held the vehicle for sale and that Smith was a buyer in the ordinary course of business, it is apparent under section 32-8-60(3) that Smith took the vehicle free of GMAC’s security interest. Thus, under both section 7-9-307(1) and section 32-8-60(3) GMAC’s security interest in the vehicle was extinguished. Consequently, the bank is now the only party with a valid lien on the vehicle.

This case is due to be reversed and remanded for entry of a judgment not inconsistent with the above.

REVERSED AND REMANDED.

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


source: Caselaw Access Project

author: TORBERT, Chief Justice.

license: Public Domain

text:
    Ex parte GENERAL MOTORS ACCEPTANCE CORPORATION. (FIRST DALLAS COUNTY BANK v. GENERAL MOTORS ACCEPTANCE CORPORATION and Everette Smith.)
    81-516.
    Supreme Court of Alabama.
    Jan. 7, 1983.

      Charles H. Sims, III, Selma, for petitioners.
    Joe T. Pilcher, Jr. of Pilcher & Pilcher, Selma, for respondent.
   TORBERT, Chief Justice.

General Motors Acceptance Corporation (GMAC), as plaintiff, filed an action against Everette Smith and First Dallas County Bank (Bank) with counts in detinue and conversion for the recovery of, or for the value of, an automobile in Smith’s possession but subject to conflicting claims of a security interest by GMAC and the Bank. By amendment, GMAC later deleted the Bank as a defendant with respect to the counts in detinue and conversion, but added a third count seeking a declaratory judgment that GMAC’s security interest had priority over the Bank’s. The Bank also sought a declaratory judgment determining the priority of the conflicting security interests. The lower court ruled in favor of GMAC. This court granted a writ of certio-rari to the Alabama Court of Civil Appeals after that court reversed the order of the circuit court for Dallas County.

This case arose out of a dispute as to whether Everette Smith took title to a 1980 Pontiac automobile free of GMAC’s security interest. The automobile in question was originally purchased by Julius Davis, for his personal use, from Marion Motor Sales in Marion, Alabama, on April 19, 1980. Davis made a down payment and financed the balance with the proceeds of a loan from GMAC. As required by the Alabama Uniform Certificate of Title and Antitheft Act, Code 1975, §§ 32-8-1 through -87, an application for certificate of title was filed, and subsequently a certificate for the automobile was issued showing Julius Davis as owner and GMAC as first lienholder. The terms of the agreement provided for 48 monthly installment payments beginning June 1, 1980.

Later in the year, on November 12, 1980, Smith purchased the automobile from Davis Motor Company, a business in Selma, Alabama, then owned and operated by Julius Davis. Smith made a small down payment and financed the balance of the purchase price with the proceeds of a loan obtained from the First Dallas County Bank. The loan gave the Bank a security interest in the automobile. In conjunction with that sale, Davis, an authorized title agent approved by the State Department of Revenue, filled out the appropriate title applications and delivered a copy to the purchaser. In so doing, Davis failed to note the prior lien held by GMAC. Davis did not pay GMAC the balance due on his loan and, thus, did not obtain from GMAC the original certificate of title on the vehicle. GMAC, upon discovering Davis had sold the car, filed its complaint.

The sole issue presented on this appeal is whether the Court of Civil Appeals erred in holding that Everette Smith and First Dallas County Bank were protected under Code 1975, §§ 7-9-307(1) and 32-8-60, thereby taking priority over GMAC’s security interest in that vehicle. We hold that that court did not err, and we affirm.

First, petitioner argues that Code 1975, § 7-9-307(1), is limited in its operation to “inventory and/or floor plan financing” arrangements. While these kinds of “financing” plans are typical of the situations contemplated by this section, we do not agree that the facts of this case fall outside its purview. That section provides:

“A buyer in ordinary course of business (subsection (9) of section 7-1-201) other than a person buying farm products from a person engaged in farming operations takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.”

Code 1975, § 7-9-307(1). This section refers to the definitional section, § 7-1— 201(9), which states:

“ ‘Buyer in ordinary course of business’ means a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind but does not include a pawnbroker. ‘Buying’ may be for cash or by exchange of other property or on secured or unsecured credit and includes receiving goods or documents of title under a preexisting contract for sale but does not include a transfer in bulk or as security for or in total or partial satisfaction of a money debt.”

Code 1975, § 7-1-201(9).

It is apparent that these sections apply to sales from inventory by a person who sells goods of that kind. We hold that the sale by Davis from his used car lot constituted a sale from inventory. Davis, owner of Davis ■Motor Company, was in the business selling goods of this kind. Smith’s purchase, evidenced by a bill of sale in the company’s name, falls within the literal language of the section.

GMAC argues that the car was a consumer good when it was sold to Davis and that it remained a consumer good regardless of the actions taken by Davis. This is not the case. White and Summers deal directly with this kind of situation:

“Note well that 9-109,does not classify goods according to design or intrinsic nature but according to the use to which their owner puts them. It follows that as use changes, either because the owner finds some new task for the goods or because an owner sells the goods to another who uses it for another purpose, the classification of the goods will also change.”

J. White & R. Summers, Uniform Commercial Code § 23-7 (2d ed.1980). (Emphasis added.)

In this case it is clear that Davis, the debtor, found a new use for the goods when he sold the car from the used car lot. When the car was placed on the lot it became inventory and thus falls within § 7-9-307(1). Code 1975, § 7-9-401(3), provides that the secured party’s perfection will continue when the classification changes; however, perfection is not the issue here. There is no comparable provision making § 7-9-307(1) inapplicable in these cases. While the secured party is not required to police the collateral to maintain perfection, he must do so in order to avoid § 7-9-307(1).

It is clear that § 9-307(1) of the U.C.C. was written to protect the consumer who purchases goods from a dealer by permitting the purchaser to take good title free of any security interest created by the seller.

“The rule reflects a belief that it would be impractical to expect buyers to search through the records of financing statements every time they purchased an item, even though they purchased in the ordinary course of their seller’s business, and that it would likewise be unacceptable to put the risk of loss on the purchaser when the seller defaults on a loan supported by a security interest in the goods. The secured party is in a better position to look out for himself in this situation than is the buyer.”

R. Braucher & R. Riegert, Introduction to Commercial Transactions, § 5-4 (1977). See also Antigo Co-op Credit Union v. Miller, 86 Wis.2d 90, 271 N.W.2d 642 (1978).

The second argument raised by GMAC is that if the Uniform Certificate of Title and Antitheft Act is not complied with the transfer and subsequent mortgage are null and void. However, the Act does not apply to a security interest created by a seller who holds a vehicle for sale.

Again, when Davis put the car on the used car lot it became a vehicle held for sale by a dealer. The policy considerations that mandate this result under Code 1975, § 7-9-307(1), require the same result under §§ 32-8-1 through -87.

Further, in the case before us, Davis, an authorized title agent, secured Smith’s signature on an application for certificate of title. Thus, it appears that Smith was justified in believing that Davis would submit the application to the Department of Revenue and secure the certificate on Smith’s behalf.

Thus, we hold that Smith is protected by Code §§ 7-9-307(1) and 32-8-60. When Smith purchased the car he took it free of GMAC’s security interest. Thus, the security agreement between Smith and First Dallas County Bank is a valid one, and the Bank, in effect, receives the benefit of Smith’s protection under Code 1975, § 7-9-307(1). The underlying policy of protecting both purchasers of collateral and secured parties is served by this approach. GMAC retains a security interest in the proceeds of the sale of the collateral received by Davis under Code § 7-9-203(2), and, in the event of the insolvency of this debtor, GMAC will remain a secured party as to those proceeds. The judgment of the Court of Civil Appeals is affirmed.

AFFIRMED.

MADDOX, FAULKNER, JONES, AL-MON, SHORES, BEATTY and ADAMS, JJ., concur.

EMBRY, J., not sitting.


text:
    Lloyd W. HAND v. Robert L. THORNBURG, D.M.D.
    Civ. 3251.
    Court of Civil Appeals of Alabama.
    Aug. 25, 1982.
    Rehearing Denied Oct. 6, 1982.
    Certiorari Denied Jan. 28, 1983
    Alabama Supreme Court 82-27.

      George M. Higginbotham, Bessemer, for appellant.
    Wade H. Morton, Jr., Columbiana, for appellee.
   EDWARD N. SCRUGGS, Retired Circuit Judge.

This case concerns the sufficiency of a bond for costs in order to perfect an appeal from a district court civil judgment to the circuit court.

On March 3, 1982 the district court rendered a judgment in the amount of $2,671.09 in favor of Dr. Thornburg and against Mr. Hand. Nine days later, upon a form authorized and promulgated by the Administrative Office of Courts, Mr. Hand gave notice of appeal to the circuit court from such judgment. The following was contained at the bottom of that form:

“SECURITY FOR COSTS
“We acknowledge ourselves security for costs of appeal. We hereby waive our right of exemption as to personal property under the Constitution of the Laws of Alabama.
“Date Executed 3-12 ,1982
“Date Piled March 12 ,1982
s/ Kyle Lansford_ Signature of Clerk/Register
s/ George M. Higginbotham Signature of Appellant Attorney
s/ Lloyd W. Hand Signature of Surety
s/ Jane Higginbotham Signature of Surety”

Except for the dates and four signatures, the balance of the form was printed. As to the three signatures appearing on the right side thereof, the top signature thereon was that of Mr. Hand’s attorney. Mr. Hand printed his name on the middle line and the bottom signature is apparently the signature of the attorney’s wife.

Dr. Thornburg filed a motion to dismiss the appeal upon the primary ground that it was improperly taken in that no legally sufficient bond for costs was given or filed in the cause. The learned trial court granted that motion.

It is essential that we discuss those essential requirements of an appeal from a civil judgment of the district court (other than from a small claims judgment) to the circuit court. First, the party taking the appeal must pay the docket fee for the new filing in the circuit court or be excused from such payment because of substantial hardship. §§ 12-19-70 and —71, Code 1975; Rule 7, Alabama Rules of Judicial Administration. Second, in order to perfect his appeal to the circuit court, it was necessary that Mr. Hand file in the district court a notice of appeal within fourteen days from the date of the judgment, or of the denial of any post-trial motion, “together with security for costs as required by law or rule.” § 12-12-70(a), Code 1975. No security for costs as to such appeals is provided by statute, but, by rule 62(de)(5), Alabama Rules of Civil Procedure, the appealing party is, thirdly, required to file a “bond for costs or affidavit of substantial hardship, approved by the court, in lieu of said bond.” That is the entire and sole provision as to any security for costs as to such an appeal. That bond for costs means that security is required for all of the costs of appeal, including those incurred in the district court and not just the costs in the circuit court. Clary v. Cassels, 258 Ala. 183, 61 So.2d 692 (1952). Oddly enough, there is no requirement that the bond for costs be approved by any court official. Neither is there a saving clause as to such bond for costs as exists in the Alabama Rules of Appellate Procedure, which have no application to an appeal from the district court to the circuit court.

Here, the circuit court docket fee was paid by Mr. Hand and his notice of appeal was timely filed. The question before us is whether the bond, as executed, was sufficient. It is Dr. Thornburg’s contention, through an exceptionally scholarly brief filed by his counsel, that the bond was faulty since Mr. Hand signed as his own surety and not as the principal thereon, citing Carr v. Samuels, 285 Ala. 170, 229 So.2d 920 (1970). He also contends that there is a vast difference between a “bond for costs” and “security for costs,” but no citation of Alabama authority is given as to any distinction in those two terms. Our research has revealed no definition of either term by an Alabama court. 21 Ala. Digest, Words & Phrases.

“Security for costs” is defined as the “[pjayment into court in the form of cash, property or bond by a plaintiff or an appellant to secure the payment of costs if such person does not prevail .... ” (Emphasis supplied). Black’s Law Dictionary 1217 (5th ed. 1979). A cost bond or bond for costs is therein defined to be “a bond given by a party to an action to secure the eventual payment of such costs as may be awarded against him. A bond which may be required of an appealing party in a civil case .... ” Black’s Law Dictionary 313 (5th ed. 1979). At a time when title 7, section 792 of the Code of Alabama 1940 required that an appeal be taken by the appellant giving “security for costs,” the supreme court repeatedly referred to such security as being an “appeal bond.” Dollar v. McKinney, 267 Ala. 627, 103 So.2d 785 (1958); McKinstry v. Thomas, 258 Ala. 690, 64 So.2d 808 (1953).

Any historical difference between those two legal terms, security for costs and bond for costs, is hardly applicable to rule 62(dc)(5), A.R.Civ.P. under prevailing legal procedural philosophy in Alabama. Myriad changes have been made in the past decade in an attempt to eliminate, or soften the effect of, ultra technical rules of civil trial and appellate procedures thereby striving for a just, speedy and inexpensive determination of each civil action upon its merits. While those revolutionary changes have not always accomplished their laudable goals, we do not believe that the supreme court had in mind any highly refined distinction between a “bond for costs” and “security for costs” when rule 62(dc)(5) was adopted. Further, § 12-12-70(a), Code 1975, uses the term “security for costs.” Mr. Hand’s use of the form developed by the Administrative Office of Courts was in compliance with that supreme court rule. A bond for costs is filed to secure the payment of the costs and that is exactly what the instrument here did.

“The appeal bond need not be signed by the parties appellant. All that is necessary is security for the costs.” Dollar v. McKinney, supra; McKinstry v. Thomas, supra. If Mr. Hand was not required to sign the bond in the first instance, the fact that he signed it as surety rather than as principal did not void that undertaking and was an inadequate ground for the dismissal of his appeal, for there remained two sureties thereon, his attorney and the attorney’s wife, and there is no contention that either of them was financially inadequate as security on that bond for costs. The requisite bond for costs was provided by the executed instrument here in question. The hardworking and studious trial court erred in dismissing Mr. Hand’s appeal. We must reverse.

Dr. Thornburg’s motion to dismiss Mr. Hand’s appeal to this court is overruled.

The foregoing opinion was prepared by retired circuit judge Edward N. Scruggs while serving on active duty status as a judge of this court under the provisions of § 12-18-10(e), Code 1975, and this opinion is hereby adopted as that of the court.

REVERSED AND REMANDED.

All the Judges concur.


author: WRIGHT, Presiding Judge.

text:
    The CITIZENS BANK v. Leonard PREUIT ESTATE and E.F. Mauldin d/b/a Preuit & Mauldin, a partnership.
    Civ. 3405.
    Court of Civil Appeals of Alabama.
    Nov. 24, 1982.
    Rehearing Denied Jan. 5, 1983.
    A.P. Reich, II of Speake, Speake & Reich, Moulton, for appellant.
    D.L. Martin, Moulton, for appellees.
   WRIGHT, Presiding Judge.

This is a U.C.C. Article 9 case requiring judicial interpretation of the filing requirements contained in § 7-9-403, Code of Alabama 1975.

Preuit and Mauldin (hereinafter Mechanic) was the plaintiff below in a suit seeking enforcement of a mechanic’s lien against Samuel Jones, Jr., defendant below, for work done on an International Harvester 416 Diesel Cotton Picker. Suit was filed pursuant to § 35-11-111, Code of Alabama 1975, seeking $7,310.82 for repairs on the cotton picker. The Mechanic joined the Citizens Bank (hereinafter Bank) as an involuntary plaintiff in the action because of its alleged interest in the cotton picker. A default judgment was entered against Samuel Jones for failure to answer and a hearing was had to determine the respective interests of the plaintiff and involuntary plaintiff.

On December 16, 1980, Jones had borrowed $8,500 from the Bank to buy the cotton picker. Wayne Anderton, vice president of the Bank, made the loan to Jones and executéd a security agreement. A financing statement listing an indebtedness of $8,500 was signed by Jones and Anderton and filed in January of 1981. Both the security agreement and the financing statement described the collateral as a “1975 International Cotton Picker, 2-Row Diesel, Ser. # 161587.” The security agreement was for a ninety-day term, expiring March 19, 1981. The financing statement contained no maturity date.

The original note was not paid and a renewal note was executed April 30, 1981, for $9,152.87, the amount of the original indebtedness plus interest. The renewal note listed the cotton picker as security and made reference to the original financing statement. No new financing statement was filed.

The renewal note matured on December 5, 1981, unpaid, and on April 2, 1982, a second renewal note was executed. The second renewal note listed an indebtedness of $19,989.90, and described the same cotton picker, as in the two previous notes, as collateral, together with descriptions of other collateral. The second renewal note expires December 15, 1982.

The complaint to enforce the mechanic’s lien was filed February 16, 1982 — after the expiration of the first renewal note and before the execution of the second. An order for attachment of the cotton picker was obtained. The complaint described the cotton picker as an “International Harvester 416 Diesel Cotton Picker Serial Number CH 886K.”

Obviously, the serial number listed on the Mechanic’s complaint is not the same as that listed on the security agreements and financing statement executed by the Bank. However, Anderton and Jones both testified that the cotton picker listed on those security agreements was the same as that attached by the sheriff pursuant to the attachment proceedings initiated by the Mechanic. Jones further testified that he owned four other cotton pickers.

Following a brief hearing the court announced from the bench that the Bank’s security interest was defective and that the Mechanic’s lien was entitled to priority in the subject collateral. The Bank requested a finding of fact which was refused. The final order was entered July 2, 1982. This appeal followed.

A statutory mechanic’s lien under § 35-11-110, Code 1975, is subordinate to a prior perfected security interest unless the contribution of labor or material was authorized by the secured party. Bryce Hospital Credit Union, Inc. v. Warrior Dodge, Inc., 50 Ala.App. 15, 276 So.2d 602 (1973). Thus, if the Bank had a perfected security interest at the time of the filing of the Mechanic’s complaint, it is superior to the mechanic’s lien.

The first issue raised on appeal is whether the financing statement as filed by the Bank, containing an incorrect serial number, sufficiently describes the collateral as required by § 7-9-402, Code 1975. Section 7-9-402(5) provides: “A financial statement substantially complying with the requirements of this section is effective even though it contains minor errors which are not seriously misleading.” The question raised here is whether an incorrect recitation of a serial number is seriously misleading. We answered that question in Associ ates Capital Corp. v. Bank of Huntsville, 49 Ala.App. 523, 274 So.2d 80 (1973). In that case a 1967 BSA motorcycle was involved as collateral for a note executed by the bank. The serial number of the motorcycle was incorrectly recited on the financing statement. We held that the description of the collateral was nevertheless sufficient.

According to § 7-9-110, Code 1975: “For the purposes of this article any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described.” In Associates Capital Corp, supra, this court held.

“The requirement of the description of the collateral is not for the purpose of informing [any] third party that the exact item which he is considering taking as security is already subject to a prior security interest, without further inquiry, though such could be the result of a full and complete serial number description. The requirement of ‘a description that reasonably identifies’ is satisfied if it reasonably informs third parties that a certain identifiable item ... belonging to or in the possession of a debtor may be subject to a prior security interest and that further inquiry is necessary.. .. Such is known as ‘notice filing.’ ”

49 Ala.App. at 526, 274 So.2d 80. In the absence of a showing of actual prejudice as a result of the erroneous serial number, such a mistake will not invalidate the financing statement. Still Associates, Inc. v. Murphy, 358 Mass. 760, 267 N.E.2d 217 (1971).

The final issue raised on appeal is whether a new financing statement must be filed each time a note is renewed where the original financing statement bears no maturity date and where the underlying obligation remains unpaid. Section 7-9-403, of the Code provides that a financing statement containing no maturity date is effective for five years from the date of the filing. The maturity date referred to in the statute is that of the underlying obligation, not of the consumer note. It is uncontra-dicted that five years have not passed from the date of the filing and that the underlying obligation remains unpaid.

The present fact situation is specifically addressed in 4 Anderson, Uniform Commercial Code § 9-403:7 (2d ed. 1971): “Where the financing statement does not specify any maturity date it continues effective even though in the meantime the original note has been paid off and a renewal note executed in its place.” The original obligation in the present case remained unpaid; no new obligation was created by the renewal. The “notice filing” requirement of § 7-9-402, Code 1975, was accomplished by the filing of the original financing statement, and no new filing was required because of the renewal. In re Cantrill Construction Co., 418 F.2d 705 (6th Cir.1969); See also § 7-9-402, Code 1975, official comment 2.

The judgment of the trial court is due to be reversed and judgment herein is rendered in favor of Citizens Bank in accordance with § 12-22-70, Code 1975.

REVERSED AND RENDERED.

BRADLEY and HOLMES, JJ., concur.


text:
    STATE of Alabama v. GEORGIA-FLORIDA-ALABAMA EQUIPMENT CO., INC.
    Civ. 3345.
    Court of Civil Appeals of Alabama.
    Dec. 8, 1982.
    Rehearing Denied Jan. 5, 1983.

      Charles A. Graddick, Atty. Gen., and Herbert I. Burson, Jr., Chief Counsel, Dept, of Revenue, and Asst. Atty. Gen., and B. Frank Loeb and John H. Burgess, Asst. Counsel, and Asst. Attys. Gen., for appellant.
    Gerald D. Colvin, Jr. of Bishop, Colvin & Johnson, Birmingham, and W. Guy Hard-wick of Hardwick, Hause & Segrest, Do-than, for appellee.
   WRIGHT, Presiding Judge.

This is an appeal from a lease tax assessment under § 40-12-220 to -227, Code of Alabama 1975.

After audit, lease tax assessment in the amount of $481,378.20, including penalty and interest, for the period of July 1, 1971 through September 30, 1979, was entered by the Alabama Department of Revenue (State) against Georgia-Florida-Alabama Equipment Co., Inc. (GFA). The assessment was appealed to circuit court. GFA and State filed motions for summary judgment with supporting exhibits and affidavits. After hearing and arguments, partial summary judgment was entered in favor of each party. State appealed.

The matter arose in the following manner: GFA is a corporation organized in 1957 in Houston County, Alabama, for the primary purpose of purchasing the stock of Georgia-Florida-Alabama Transportation Co., Inc. (GFAT), a trucking company, and leasing to it its equipment. GFAT was a close-held corporation, its stock being largely owned by one family. The stock of the family was purchased by GFA giving it control of GFAT. A lease contract was executed between the corporations in 1957 and continued in existence up to and during the period of assessment.

The statute taxing the leasing or renting of personal property was enacted by the Alabama legislature and became effective July 1, 1971. The act imposed a one and one-half percent tax on the gross proceeds of a lease of automobiles and trucks. In 1973, the legislature amended the exemption section of the original act. That amendment, as pertinent, is as follows:

“(1) The gross proceeds derived by the lessor ... from the leasing of tangible personal property are exempt from taxation when the lessor and lessee ... are wholly-owned subsidiary corporations of the same parent corporation or one is the wholly-owned subsidiary of the other; provided that the appropriate sales or use tax, if any was due, has been paid on such item of personal property.... ”

There is no dispute that GFA did not obtain a license from the State to engage or continue in the leasing business as required by the Act (§ 40-12-221, Code 1975) nor did it pay the lease tax levied by the Act (§ 40-12-222, Code 1975) for the audit period. However, GFA defends the assessment of the lease tax by claiming the exemption added to the Act in 1973 and set out herein above. Therefore the matter before the court below on the motions for summary judgment, and now here, was: under the evidence presented, does GFA qualify, as a matter of law, for the exemption?

The trial court found as a matter of law that GFA did qualify for the exemption from its effective date of September 16, 1973. It found that GFA owed the lease tax for the period from July 1, 1971 to September 16, 1973, in the amount of $84,-157.16. However, credit was given for the sales tax paid on equipment purchased and leased during the period from July 1, 1971 to September 16, 1973. That amount was determined to be $51,464.32. Judgment was then entered for the State in the amount of $32,692.00, plus interest as allowed by law. From that judgment the State appeals.

State first contends that summary judgment in favor of GFA is erroneous because there is a question of fact as to the entitlement of GFA to the exemption. We do not agree with State’s contention. We have carefully considered State’s contention and conclude that the factual evidence is not in material dispute. It is the legal conclusions which may be drawn from the facts which are disputed.

It is the evidence of GFA that in 1957, it purchased all of the stock in GFAT owned by the Dean family — a total of 1152 shares of the 1440 shares issued. Eleven hundred fifty of the shares were transferred to GFA. For a reason explained by GFA, but not fully understood by this court, two shares were transferred (one to each) to two of the incorporators of GFA. Those shares were endorsed in blank and delivered to GFA, where they have been since held. The remaining 288 shares were owned by two employees of GFAT. In 1959 GFA entered into an agreement to purchase those shares. Payment was subsequently made by checks of GFA. The certificates for those shares were cancelled on September 9, 1968, and a certificate issued for 288 shares to GFAT which has been held as treasury stock since that time. It is upon these facts that GFA submits that GFAT is legally its wholly owned subsidiary.

The State does not traverse these facts by its affidavits or evidence. The State submits that the records of GFAT show that GFA owns 1150 of the 1440 issued shares, one share is issued to C. Milton Adams, one share is issued to Marjorie Adams and GFAT is issued 288 shares of its own stock. Thus GFAT is legally not wholly owned by GFA.

Upon submission of these undisputed facts for summary judgment, it became the duty of the court to determine as a matter of law whether GFAT was or was not a corporation wholly owned by GFA under the exemption statute. This status of a case is that appropriate for consideration of summary judgment. Rule 56(c), A.R.Civ.P. Kutack v. Winn-Dixie Louisiana, Inc., 411 So.2d 137 (Ala.1982).

State next contends that the effect of the judgment for GFA was to determine disputed ownership of stock when apparent owners are not parties and cannot be made parties. This contention has no merit inasmuch as the dispute here is only between the State and the taxpayer for purposes of application of the statute involved. No one other than parties to an action can be bound by a judgment entered therein. Benson Hardware Co. v. Jones, 223 Ala. 287, 135 So. 441 (1931).

We will now return to the issue of whether the trial court correctly determined that GFAT is a “wholly-owned” subsidiary of GFA. We have found no definition of the term “wholly owned” as used in the statute. However, in the absence of a specific definition, it is a rule of construction that terms are viewed in light of their usual and ordinary meaning with consideration of the purpose and context of the statute where they are found. State v. International Minerals & Chemical Corp., 381 So.2d 60 (Ala.Civ.App.), aff’d, 381 So.2d 62 (Ala.1979). It is the opinion of this court that the term “wholly owned” in § 40-12-224, Code of 1975, means that all of the outstanding shares of stock of one corporation are owned, legally or equitably, and controlled by the other corporation. “Wholly” has been said to mean “completely,” “exclusively,” “entirely.” 45 Words & Phrases 167. “Owned” is a word of varied meaning depending largely upon where and in what context it is used. In this instance we presume the legislature intended it to have its natural and ordinary meaning. Lavretta v. L. Hammel Dry Goods Co., 243 Ala. 34, 8 So.2d 264 (1942). We consider such meaning to be: to have legal or equitable title-giving right of absolute control.

We have said, GFA holds by issuance 1150 shares of GFAT stock. It also holds two shares issued to Milton and Majorie Adams, two of its own shareholders, which were endorsed and delivered to it in blank. State, relying on Title 10, § 168, Code of 1940, contends such blank endorsement and delivery is insufficient. We note that the relied statute was repealed by enactment of the Uniform Commercial Code effective December 31, 1966. Section 7-8-307 of the Code then became effective and provides that as against the transferor the transfer without endorsement is complete upon delivery. Thus GFA became the owner of the two shares issued to the Adamses upon delivery. Of course, the affidavit of the Adamses admits that ownership. Eleven hundred fifty-two shares are thus established as “wholly owned.”

State contends that the remaining 288 shares of the original stock now admittedly held on the books of GFAT as treasury stock prevent GFAT from being a “wholly owned” subsidiary. This contention will not stand examination. Treasury stock may be issued but is not outstanding stock and may not be voted by the corporation. It is merely another property of the corporation owned by the outstanding stockholders and capable of resale. §§ 10-2A-2, -53, Code 1975; 18 C.J.S. Corporations § 212. It is to be seen therefore, that all of the outstanding shares of stock of GFAT are “wholly owned” by GFA as a matter of law under the facts and have been since prior to July 1, 1971.

The State has submitted copies of franchise tax reports of GFAT which show the 288 shares being carried as treasury stock with a reported cost of $46,258.00. The State argues that this refutes the contention of GFA that it paid for the purchase of the stock and thus is at least the equitable owner. Perhaps the tax report does present a scintilla as to who paid for the stock. However, any conflict on this issue is immaterial in view of the undisputed evidence that the stock is now treasury stock. As we have herein pointed out, treasury stock is nothing more than corporate property owned by the outstanding shareholders.

The second requirement of the exemption is that sales tax must have been paid on the property leased by the lessor corporation. That sales tax was paid by GFA on all equipment leased, including that purchased from July 1, 1971 to September 16, 1973, prior to the exemption, is undisputed. In fact, State made a sales tax audit for the period through 1975. Therefore the entry of summary judgment in favor of GFA as to the assessment after passage of the exemption was proper and is affirmed. With that finding, it must follow that the denial of summary judgment to the State on the assessment for the same period was not error.

The last contention of the State which seemingly questions the granting of summary judgment in favor of the State as to the assessment prior to the passage of the exemption is difficult to follow. The trial court found GFA liable for lease tax for the period from July 1, 1971 through September 16, 1973. However, it credited against that tax the amount of sales tax paid for the equipment purchased during that time. Presumably, the court’s reasoning was that if the State was going to claim and collect lease tax, it could not equitably retain the sales tax paid. Even prior to the enactment of the exemption, the purchase of personal property for leasing was a wholesale sale and exempt from sales tax if subject to the lease tax. § 40 — 23—1(a)(9)j, Code 1975. We find no error in the judgment.

Judgment is affirmed.

AFFIRMED.

BRADLEY and HOLMES, JJ., concur.

      . However, we do question the advisability of the disposition of a case by summary judgment where the entire evidence is before the court and the matter could be decided on the merits. We have noted several instances recently where the court sitting without a jury has the entire case before it as though for final judgment, yet grants summary judgment when it may be contended there are material facts in dispute. Such disposition may require reversal under law applicable to summary judgment and remandment for reconsideration on the same materials and evidence. This seems counterproductive in view of crowded dockets at both trial and appellate levels.

      . The franchise tax returns with attached balance sheets carry the treasury stock at cost as a deduction from shareholder’s equity, while showing 1440 shares issued at $100 par. Whether such is a proper accounting procedure is not relevant to this case.


author: BRADLEY, Judge.

text:
    Judy Martin SANDERS v. Richard Keith SANDERS.
    Civ. 3149.
    Court of Civil Appeals of Alabama.
    Jan. 5, 1983.

      William H. McDermott of McDermott, Slepian, Windom & Reed, Mobile, for appellant.
    T.M. Brantley, Bay Minette, for appellee.
   BRADLEY, Judge.

This is a divorce decree modification case.

The parties to this appeal were divorced on February 28, 1979. The divorce decree incorporated an agreement of the parties. One of the provisions of the agreed-to decree placed the two children of the parties in the custody of the mother and required the father to pay child support. Another provision required the husband to pay to the wife $300 per month for a period of one hundred forty-four months.

In September 1980 the wife filed a motion seeking a contempt citation against her former husband for his failure to return her minor son to her and his failure to make the alimony payments required by the divorce decree. The former husband replied by saying that the former wife had abandoned the minor son and had otherwise neglected him and was, therefore, not entitled to his custody. The former husband also said that the former wife had voluntarily agreed to a reduction of the alimony in gross and that he therefore did not owe the amount sought by her. The former husband then sought a modification of the divorce decree by asking that custody of his son be awarded to him and that the alimony provision of the divorce decree be modified to terminate the payments. He claimed that the alimony payments were to be applied to the house payments during the time the former wife lived in the house. However, she did not live in the marital home and it has since been sold.

After a hearing the trial court modified the former decree by awarding custody of the son to the father and by terminating the alimony payments because “the provisions of alimony contained in the original Decree of February 28, 1979, was for the purpose of defraying the house payment on property belonging jointly to the parties.” The former wife appeals from these aspects of the modification decree.

The former wife argues in brief that the provision in the agreement made a part of the divorce decree awarding her $300 a month for one hundred forty-four months must be treated as an alimony in gross award. If so treated, the provision cannot be modified after the expiration of thirty days.

It appears from the provision of the decree in question that the alimony award is in gross. Crawley v. Crawley, 358 So.2d 456 (Ala.Civ.App.1978). The award is for a certain amount each month for a specific number of months. The total amount of the award can be easily ascertained. Moreover, there is no provision for shortening the payment period, i.e. there is no provision for the payments to cease upon death or remarriage. The trial court concluded, however, that the alimony award was for the purpose of enabling the wife to make the mortgage payments on the marital home which was jointly owned by the parties.

The provision of the divorce decree relating to the marital house is as follows:

“The Defendant shall retain possession of the jointly-owned homeplace until she remarries or as long as she desires, whichever comes first. The Defendant shall be responsible for the house notes, taxes, maintenance and insurance on said home-place, during the period of her residency. In the event the Defendant elects to move from the jointly-owned homeplace or remarries, whichever comes first, the Plaintiff agrees to pay for all house notes, taxes, maintenance and insurance on the jointly-owned homeplace. In the event that the homeplace is sold, the equity and utility deposits or refunds shall be divided equally between the parties.”

The evidence is undisputed that the former wife moved out of the marital house the day after the divorce became final. Under the clear terms of the agreement, the former husband then was required to make the mortgage payments and pay the other expenses of maintaining the house. The evidence also shows that the house was subsequently sold.

There is absolutely nothing in the agreement in question that remotely suggests that the alimony award to the former wife was to be used to pay the mortgage expenses on the marital house. Former husband argues, however, that he and his former wife had an oral agreement that the payments were to be so used. The wife strongly disputes such contention. She says the written agreement incorporated into the divorce decree accurately reflects the agreement of the parties.

Even though such an oral agreement might have been made, it could not now change the terms of the written agreement made by the parties and incorporated into the divorce decree.

The general rule of contract law is that when the parties reduce their agreements to writing, the writing is the sole expositor of the transaction and the intention of the parties, in the absence of mistake, fraud or ambiguity. Gunnels v. Jimmerson, 331 So.2d 247 (Ala.1976). There is no contention in the instant case that fraud or mistake infected the written agreement or that it is ambiguous. Also, it is settled that where a written contract exists between the parties, parol evidence cannot be received to explain, contradict, vary, add to or subtract from its terms. Lightsey v. First National Bank, 273 Ala. 416, 142 So.2d 681 (1962).

The alimony provision in the divorce decree is an alimony in gross award and as such cannot now be modified. This aspect of the trial court’s judgment is reversed and the cause remanded for ascertainment of arrearage and the imposition of judgment for that amount in favor of the former wife.

Appellant’s other issue is that the trial court erred by changing custody of the minor son from the mother to the father. In support of her contention she argues that the record is devoid of evidence supportive of a modification of the child custody provisions of the divorce decree. We disagree.

The paramount consideration on petition for modification of custody provisions of a divorce decree is welfare of the minor child. Alsbrooks v. Barnes, 251 Ala. 684, 39 So.2d 234 (1949). The party seeking to modify a child custody provision of a divorce decree has the burden of proving a material change in circumstances since the last custody decree which has so affected the welfare and best interests of the child as to require a change in custody. Hallford v. Hallford, 390 So.2d 295 (Ala.Civ.App.1980). Also, the judgment of the trial court is presumed correct and such presumption cannot be rebutted except by a showing that the decision is plainly wrong. Field v. Field, 382 So.2d 1132 (Ala.Civ.App.1980). We conclude that the judgment is not plainly wrong.

In September 1979, after the son had returned from visiting the father, the father told the mother that the son wanted to live with him, and the mother agreed to let the son go live with his father for one school semester on a trial basis. The son had told his mother that he wanted to live with his father. In October 1979 the mother asked the father to return the child and he refused. The mother had the child just before Christmas for a few hours but she had not had him from then until the hearing in June 1980.

At the time of the hearing in June 1980 the mother was working for the police department in Gulfport, Mississippi. The other child was with her and they had been renting a room from Mr. and Mrs. Busby. The mother testified that she had recently rented a house for them to live in.

The evidence shows that while the mother was moving her belongings to Mississippi she left the two children with a friend, Alice Woodall, until the father could pick them up. The mother stated that she called the father and explained that she was moving and requested that he keep the children for a few days and until she could complete her move. The father denied that the mother told him that he was to get the children from Mrs. Woodall and keep them until the mother could complete her moving. The father did, however, get the children for a few days and then the children lived with their mother for about a month. They then went to live with their father for his month’s visitation. The children returned to their mother for the month of August. After visiting their father again for several days in September 1979, they returned to their mother’s. Shortly thereafter, the son returned to live with his father and has been with him ever since.

The trial judge stated that he had received home evaluation reports from the Florida and Mississippi welfare departments and they showed that the mother and father were good and proper people.

As noted above, the evidence is in conflict on the issue of abandonment and whether the mother agreed for the father to have custody of the son on a temporary basis. In Reaves v. Reaves, 399 So.2d 311 (Ala.Civ.App.1981), we said:

“We note the mother’s contention that she relinquished custody only temporarily when the child went to live with her father and that the parties agreed she would take the child back when she finished nursing school. The father denies that contention. If the trial court had found that the parties had agreed the father would take only temporary custody of the child, a different decision might have been mandated. The trial court, however, apparently was not persuaded by the mother’s argument.
“Put another way, there was a conflict in the evidence, the mother contending that she gave temporary custody of the child to the father, with the understanding that she would regain custody at such time as she completed nursing school. The father stated that there was no such understanding that he was to have only temporary custody. The trial court resolved the conflict and this court cannot substitute its judgment for that of the trial court. Sutton v. Sutton, 55 Ala. App. 254, 314 So.2d 707 (1975).”

We therefore conclude that we should not substitute our judgment for the trial court’s judgment on the issue of child custody.

That aspect of the trial court’s judgment modifying the child custody provision of the original divorce decree by placing the custody of the son with the father is affirmed.

Appellant’s request for an attorney’s fee on appeal is granted, and she is awarded $350 for such a fee.

AFFIRMED IN PART, REVERSED IN PART AND REMANDED WITH INSTRUCTIONS.

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


text:
    Tom Wilson HEREFORD v. Mazie Johnson HEREFORD.
    Civ. 3378.
    Court of Civil Appeals of Alabama.
    Jan. 5, 1983.

      Glenn F. Manning of Watts, Salmon, Roberts, Manning & Noojin, Huntsville, for appellant.
    David H. Meginniss of Hornsby, Blankenship, Robinson & Meginniss, Huntsville, for appellee.
   HOLMES, Judge.

This is a domestic relations case.

The parties to this appeal were divorced on March 23, 1982, in the Circuit Court of Madison County. After an ore tenus hearing, the trial court, in part, ordered a division of the marital assets.

Viewing the record with the attendant presumptions accorded the trial court’s action, the following is revealed:

At the aforesaid hearing, the husband testified that he owned a certain certificate of deposit in the face amount of $10,000 which had been automatically renewed according to its terms prior to the divorce hearing.

As part of the division of marital assets, the trial court ordered that the certificate of deposit be transferred to the wife. The decree also contained a provision ordering that all the documents necessary to transfer the interests of the parties be executed and all transfers made within sixty days from the date of the decree.

Neither party filed a motion for a new trial nor appealed the divorce decree.

Unknown to either the trial court or the wife, however, was the fact that eleven days prior to the rendering of the divorce decree, the husband cashed the certificate of deposit. This occurred after the husband’s testimony and after submission of the case but, as indicated, prior to the rendition of the decree. When it came time to transfer the marital assets pursuant to the decree, the husband informed the wife that he no longer possessed the certificate of deposit. It was the position of the husband that the award of the certificate was ineffectual as an award of property because the certificate did not exist on the date of the divorce decree.

Because the decree allowed the husband sixty days in which to transfer the property granted to the wife, she was not aware that the certificate had been redeemed until after the expiration of the time allowed for appeal.

The wife did, however, upon learning of the husband’s transactions, file a motion for relief from judgment pursuant to rule 60(b), A.R.Civ.P. This motion was filed on June 1, 1982, to wit, within four months after rendition of the decree.

At the hearing on the motion for relief from judgment, the husband testified that he had cashed the certificate in order to comply with whatever the court decreed and that most of the money actually went towards paying attorney’s fees. He further testified that he had not anticipated that the trial court would specifically award the certificate to the wife.

The trial court stated that it had been the court’s intention to award the wife the $10,-000 represented by the certificate of deposit and that to save the expense of redeeming a newly renewed certificate that it had been specifically awarded to the wife. The trial court also stated that, in its opinion, the husband had acted in good faith in cashing the certificate and that he had no motive in mind other than getting up some cash to meet the expenses of litigation.

In its order granting relief from judgment, the court found that it had incorrectly assumed from the evidence that the character and nature of the certificate of deposit would remain the same, and that it would be in possession of the husband at the time the decree was entered. The trial court additionally found that the fact of redemption of the certificate was known to the husband, but was not known to the wife or court and could not be ascertained through the use of reasonable diligence.

Accordingly, the trial court ordered that the husband pay the wife the sum of $10,-000 in lieu of the certificate of deposit. From this decree the husband appeals.

The husband, through able counsel, contends that the wife failed to present a valid 60(b) motion and that the trial court erred in granting the relief requested. We find no merit in that argument and, consequently, no error in the trial court’s decision.

This court finds that the wife’s motion was properly a 60(b) motion, and more specifically, that it was a 60(b)(6) motion.

Relief is justified under a 60(b)(6) motion when a party is able to meet two prerequisites to its application. First, the motion must be based on some reason other than those stated in 60(b)(1) through 60(b)(5), and second, the reason urged for relief must be such as to justify relief. Ex parte Hartford Ins. Co., 394 So.2d 933 (Ala.1981).

There is no serious contention that the reasons listed in 60(b)(1) through 60(b)(5) apply to the circumstances surrounding the instant appeal. In any event, this court does not find that the instant facts specifically fall within the parameters of 60(b)(1)— (5). See Rule 60(b), A.R.Civ.P.

Regarding the second requirement for the application of 60(b)(6), relief is justified only in those exceptional circumstances when the party can show the court sufficient equitable grounds to entitle him to relief. Nunn v. Stone, 356 So.2d 1212 (Ala.Civ.App.1978). A review of the record shows exceptional circumstances that would have worked a substantial injustice had the trial court not granted the requested relief.

The trial court has wide discretion in its determination of whether to grant a rule 60(b) motion, and it will not be reversed on appeal absent an abuse of discretion. Pierson v. Pierson, 347 So.2d 985 (Ala.1977). In the instant case, we cannot say that the trial court’s determination resulted in such an abuse.

The evidence shows that the husband testified to ownership of the certificate at the divorce hearing. The nature of the certificate was such as to lead the trial court to believe that it would remain in the husband’s possession. In fact, the evidence reveals that such would have been the case had the husband not taken the affirmative action of cashing the certificate.

It is undisputed that the husband redeemed the certificate without the trial court’s or the wife’s knowledge. Because the husband was given additional time in which to comply with the court’s orders, the fact that he cashed the certificate was not known until sixty days had expired from the date of the decree. Therefore, the time had run in which a rule 59(e) motion to amend could be filed. Time had also expired regarding an appeal. There was time, however, to file a 60(b) motion.

The evidence tends to show that the certificate of deposit was an important factor in the trial court’s equitable division of the marital assets. To deprive the wife of the $10,000 due to the husband’s affirmative actions would result in a substantial injustice. It also seems inequitable to enrich the husband in such a manner.

In view of the above, we find that the trial court properly exercised its discretion in granting relief pursuant to rule 60(b)(6), A.R.Civ.P.

The husband further contends that the wife’s motion did not allege facts sufficient to authorize relief. We find this contention to be erroneous.

The wife set out the fact of the divorce, the husband’s testimony regarding the certificate, and the fact she was awarded the certificate. The wife also set out the fact that the husband had cashed the certificate, unknown to anyone, and didn’t report it until sixty days after the date of the decree, too late for the thirty day requirement of rule 59 and too late for the forty-two days allowed for appeal. The wife set out even more in her motion, but we do not deem it necessary to go into detail. Suffice it to say that the wife’s motion contained enough particularity to put the husband on notice of the nature of the proceedings and the relief sought. Fraternal Order of Police, Strawberry Lodge No. 40 v. Entrekin, 294 Ala. 201, 314 So.2d 663 (1975). See also Rule 8, A.R.Civ.P.

Counsel for the wife has requested an attorney’s fee for his representation of the wife on this appeal. Such an award is discretionary with this court. Walker v. Walker, 56 Ala.App. 98, 319 So.2d 718 (1975). Considering all relevant factors, we hereby direct that the husband pay to the wife the sum of $350 for her attorney’s service on this appeal.

This case is due to be and is affirmed.

AFFIRMED.

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


text:
    Myrna Agnes KINSEY v. Herbert Peavy KINSEY.
    Civ. 3398.
    Court of Civil Appeals of Alabama.
    Jan. 5, 1983.

      Herndon Inge, Jr. of Inge, McMillan & Inge, Mobile, for appellant.
    Albert Seale and Frances R. Niccolai, Mobile, for appellee.
   HOLMES, Judge.

This is a domestic relations case.

The former wife appeals from an order of the Circuit Court of Mobile County which found, in part, that no arrearage of family support payments was owed by the ex-husband. The trial court additionally ordered the ex-husband to pay the sum of $160 per month as alimony to the ex-wife.

A review of the record reveals the following:

The parties to this appeal were divorced in 1973 after sixteen years of marriage. At the time of the divorce there were four minor children. Under the terms of the original decree, the husband was ordered to pay a lump sum of $800 per month for support of the family. There was no apportionment between alimony and .child support.

In February, 1982, the wife filed a petition seeking, among other things, that the husband be found in contempt of court for failure to pay support as provided in the decree. She testified at the hearing that her former husband had not made any of the $800 monthly payments since April of 1981 and that at the time of the hearing he was in arrears $9,600.

The wife also testified that she was currently employed at a hospital and had been employed for the last seven years. Her take home pay at the time of the hearing was $696 a month. The last of her house payments had been paid the previous year.

The four children were aged twenty-three, twenty-one, and the two youngest were nineteen. The nineteen year olds had just reached their majority shortly before the hearing. All four children attended college at the time of the hearing. Three of the four attended college away from home. Only one of the children was currently living at home full time while attending school. Three of the four had part time jobs at the time of the hearing.

The wife testified that although she didn’t pay for college expenses, she provided the children with spending money on occasions. She also provided groceries for them when they were at home with her.

The husband denied that he owed any back support and requested that the original decree be modified to reflect a change in circumstances.

The husband testified that he was a surgeon and that his income in 1981 was $35,-654 after taxes. He also testified that this was a substantial decrease over the two previous years when he earned approximately $90,000 a year. The husband attributed his decrease in income to a change in locations and hospitals.

Out of the $35,654 of income in 1981, the husband testified that he had given his children and former wife $16,401.36. He additionally stated that he had cancelled checks from the time in question showing that he had given the wife $4,749 and the children $11,652.36. He testified that this money went towards the children’s college tuition and books and their medical and living expenses.

The husband additionally stated that he owned two houses and some land, all of which are encumbered. One of the houses was being rented at the time of the hearing. The husband had remarried since his divorce and has one child. His present wife works as a nurse.

The husband in his request for modification of the divorce decree indicated the fact that all the children had now reached their majority and that the wife was now employed as substantial changes requiring modification.

The trial court, after an ore terns hearing, found that no arrearage existed and set alimony at the amount of $160 per month. From this decree the former wife through able and distinguished counsel appeals.

The wife contends on appeal that the trial court erred in ruling that there was no arrearage. She argues that the husband had unilaterally stopped payment after two of the children had reached their majority. She further argues that the accrued installments of support had become final judgments as of the date due and may be collected as other judgments.

In brief, the wife rejects the theory that the trial court can, in its discretion, grant a credit under certain circumstances that are applied to arrearage. She relies on two cases, Owens v. Owens, 412 So.2d 820 (Ala.Civ.App.1982), and McDaniel v. Winter, 412 So.2d 282 (Ala.Civ.App.1982), as being opposed to Nabors v. Nabors, 354 So.2d 277 (Ala.Civ.App.1978), which stands for the proposition that credits can be allowed under certain circumstances. This is not our understanding of the law as it applies to the issues of the instant case.

As we stated in Nabors v. Nabors, supra, the ultimate issue in a case such as the instant appeal is not whether the past due installments are considered as final judgments beyond the power of a trial court to modify, but rather (considering the evidence presented in this particular case) whether such “judgments” may be considered partially or totally paid and satisfied by way of credits applied against the arrearage.

The rule of law, simply stated, is this: When a divorce decree requires the husband to make periodic payments for the support of children and he has supported the children while they lived at home or away, the wife cannot recover payments for support during that period, nor during the period third persons were supporting the children. The husband, however, is given credit for those periods in which he supports the child or the child is self supporting. Nabors v. Nabors, supra. Put another way, the trial court, in determining an ar-rearage in support, can give a husband credit for amounts designated as child support for periods of time during which the child is no longer dependent on him for support. Wier v. Wier, 410 So.2d 78 (Ala.Civ.App.1982).

The wife’s reliance on Owens v. Owens, supra, and McDaniel v. Winter, supra, as a contradiction of the rule set forth in Nabors v. Nabors, supra, is misplaced. There are important distinctions that make Owens and McDaniel inapplicable in the instant case.

In McDaniel, custody of the two minor children was awarded to the mother. The father was ordered to pay $200 per month as child support pursuant to modification of the final decree. Some years later, the youngest son left the mother’s home and did not return. Thereupon, the husband unilaterally cut the support payments in half, paying only $100 to the mother. The trial court specifically found that under the circumstances of that case, the father was not entitled to a credit for the time the son lived with him.

In upholding the trial court’s decision in McDaniel, this court stressed the factual aspects (the father arbitrarily cut the payments by $100; the father acted unilaterally) in conjunction with the trial court’s judicial discretion. It is well settled that the award or denial of a credit against arrear-age is within the sound discretion of the trial court, and such a decision will not be reversed absent a showing of plain and palpable abuse. Wier v. Wier, supra. In McDaniel, the trial court, in its discretion, refused to give the husband credit on the arrearage for factual reasons.

In the instant case, there was evidence presented at the hearing that the husband continued to support the children during the period he had stopped sending payments directly to the wife. He did not unilaterally or arbitrarily reduce payments. In fact, the evidence tends to show that the husband contributed considerably more than he was legally required to under the terms of the divorce decree.

Owens is factually similar to McDaniel in that the husband unilaterally cut support payments in half after one of the two minor children had married and left the mother’s home. Again, this differs from the instant appeal and Nabors in respect to the father’s unilaterally and arbitrarily reducing payments.

We find no error in the trial court’s determination that no arrearage existed in the instant case. There was sufficient evidence to support the trial court’s decision.

The husband testified that he had can-celled checks from the time in question showing that he had given the wife $4,749 and the children $11,652.36. No matter how it is apportioned, this sum amounts to almost twice the claimed arrearage.

As noted above, the award or denial of a credit is within the sound discretion of the trial court, and such determination will not be reversed absent a showing of abuse. Wier v. Wier, supra. Under the circumstances of this case and in light of the evidence presented, we find no abuse of discretion concerning the trial court’s finding that no arrearage existed.

The wife next contends that the trial court erred in setting alimony at $160 per month. We find no error and affirm.

Modification of alimony based upon changed circumstances is within the sound discretion of the trial court and will not be reversed unless plainly and palpably wrong. Childress v. Childress, 378 So.2d 1147 (Ala.Civ.App.1979). We find no such abuse of discretion as to require reversal.

At the time of the original decree, the husband was employed as a surgeon and the wife was unemployed with four minor children at home. At the time of the modification hearing, the wife was employed making $696 a month take home pay. The house she was living in at the time of the hearing had just had the last payment made on it the year before. Of the four children, one was twenty-three, one twenty-one, and two nineteen at the time of the hearing and only one was living at home full time. In addition, the husband had recently suffered a substantial decrease in income due to a change in place of employment.

In view of the above, we cannot say the trial court abused its discretion in setting alimony and in finding no arrearage.

This case is due to be and is affirmed.

AFFIRMED.

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


text:
    GRIFFIN WOOD COMPANY, INC. v. Alexander and Mary JONES, Parents of Alexander David Jones, Deceased.
    Civ. 3399.
    Court of Civil Appeals of Alabama.
    Jan. 5, 1983.

      Dana E. Schmaeling of Webb, Crumpton & McGregor, Montgomery, for appellant.
    Jack Drake of Drake, Knowles & Pierce, Tuscaloosa, for appellees.
   BRADLEY, Judge.

This is a workmen’s compensation case.

On June 9, 1981 Alexander David Jones was killed in a work-related accident while he was working for Griffin Wood Company, Inc. He had been working for Griffin Wood Company for six weeks and was earning an average weekly wage of $147.

At the time of his death, employee was twenty years old and single. He lived with his parents, Alexander and Mary Jones. Alexander David Jones had worked at several jobs since graduating from high school in May 1980.

On September 11, 1981 employee’s parents filed a complaint in the Hale County Circuit Court seeking workmen’s compensation death benefits. They claimed benefits as dependents of the deceased employee. The defendant, Griffin Wood Company, in its answer, denied that plaintiffs were dependents within the meaning of the Workmen’s Compensation Act.

On May 10, 1982 a trial of this case was held. Depositions' of both plaintiffs were admitted into evidence and the deceased employee’s father testified at the trial.

Alexander Jones, Sr. stated at the trial that his son gave him at least half of every paycheck he received, including the jobs he held while in high school. This testimony contradicted the testimony Alexander Jones, Sr. had given in his deposition. In this prior testimony, he stated that his son did not give him any of the money the son made while in high school.

Alexander Jones, Sr. had no record of the amount of money his son had given him. Neither plaintiff knew the amount of money that they spent for their support.

The trial court entered a final decree finding the plaintiffs to be partial dependents of the employee. The court found plaintiffs entitled to a partial dependency of forty-eight percent.

From the judgment employer appeals and raises two issues. In considering these issues, we are guided by two principles of review for workmen’s compensation cases. First, this court, in reviewing workmen’s compensation judgments, will not weigh the evidence as to any facts found by the lower court. We are limited to a determination of whether there is any legal evidence to support the trial court’s findings. Davis-Day Timber Company v. Gentry, 54 Ala.App. 385, 309 So.2d 97 (Ala.Civ.App.1975). Secondly, the Workmen’s Compensation Act is to be- liberally construed and all reasonable doubt resolved in the employee’s favor. Mobile Liners r. McConnell, 220 Ala. 562, 126 So. 626 (1930).

Employer’s first contention is that there is no evidence that plaintiffs “regularly” received support from their deceased son and, therefore, the trial court erred as a matter of law in finding them to be partial dependents.

Section 25-5-64, Code 1975, defines a partial dependent as one “who regularly derived part of his support from the earnings of the deceased workman at the time of his death and for a reasonable period of time immediately prior thereto.” The receipt of contributions does not necessarily prove support. Such contributions must be used by the recipient to maintain himself in a manner to which he had become accustomed. Ex parte Sloss-Sheffieid Steel & Iron Co., 212 Ala. 3, 101 So. 608 (1924); American Tennis Courts, Inc. v. Hinton, 378 So.2d 235 (Ala.Civ.App.), cert. denied, 378 So.2d 239 (Ala.1979). Employer argues that the plaintiffs failed to prove that they “regularly” received support from the deceased employee.

Since the decedent’s employment history is comprised of several jobs held for short periods of time, employer contends that employee did not have regular employment during the year preceding his death. The contributions were, therefore, not regular. Employer also points out that plaintiffs had no knowledge of the amount they received from their son and no idea as to the time period he stayed on each job.

Evidence was presented at trial showing that the employee made contributions for his parents’ support out of each paycheck he received. The father testified that when Alexander David Jones was between jobs, he would cut wood for his neighbors and give his parents part of the money he received for doing this neighborhood work. It also appears from the record that employee was not without some type of work for any significant period of time. Moreover, there is testimony that the deceased son contributed at least one-half of his earnings to the support of his parents, and, since the son’s death, the parents have been forced to borrow money to pay their monthly bills. Consequently, we find that the evidence supports the trial court’s conclusion that employee regularly made contributions for his parents’ support and that they were partial dependents of their deceased son.

Employer’s final contention is that the trial court erred in finding plaintiffs entitled to a forty-eight percent partial dependency rate.

Section 25 — 5—60(l)(d), Code 1975, provides as follows:

“Partial dependents shall be entitled to receive only that proportion of the benefits provided for total dependents which the average amount of the earnings regularly contributed by the deceased employee to such partial dependent, at and for a reasonable time immediately prior to the injury, bore to the total income of the dependent during the same time.” (Emphasis added.)

Simply stated, this statute provides that a partial dependent is to receive benefits in the same proportion that the employee’s contributions bear to the dependent’s income for the same time period. Once this proportion is established, it is then applied to the amount a total dependent would receive. See § 25-5-60(l)(b), Code 1975.

Defendant contends that the evidence fails to support a dependency award of forty-eight percent. Employer argues that there is record evidence of the earnings of the deceased son from only two jobs held by him in the year prior to his death. There were other jobs held by the deceased son but no evidence as to the amount earned. The amount of earnings from these two jobs is $1,494. These earnings accrued within five and one-half months of the son’s death.

Employer says that if employee had contributed one-half of this amount to his parents’ support, his total contributions would be $747. Employer then suggests that this amount be compared to the father’s 1981 earnings of $10,000 to arrive at a dependency rate of 7.5 percent, which is a far cry from the 48 percent formulated by the trial court.

In the formulation suggested by the employer, a five and one-half month period of contributions by the deceased son is compared with the earnings of the father for the full calendar year of 1981. This is a misapplication of the law.

A more appropriate formulation as far as the employer is concerned would have been a comparison between the son’s contributions for the five and one-half months prior to his death with the father’s income for that same time period. It appears, however, that the trial court in arriving at the 48 percent dependency rate considered the contributions of the deceased son for the six weeks that he worked for Griffin Wood Company and the earnings of the father for that same six weeks period.

As stated in section 25-5-60(l)(d), Code 1975, the dependents are entitled to the proportion of contributions made at the time of deceased’s death and for a reasonable time prior thereto. The trial court, obviously, found the six weeks employee worked for defendant and made contributions to be a reasonable time. During this period, employee gave his father $75 to $100 of each weekly paycheck. The father earned $150 to $200 per week in this same time period.

“What constitutes a reasonable time is a conclusion of fact.” American Tennis Courts, Inc. v. Hinton, supra. If the employee was contributing to the support of his parents at the time of his death and for such time prior thereto as to raise a reasonable inference that he would continue, this is a reasonable time. American Tennis Courts, Inc. v. Hinton, supra. See also Ex parte Woodward Iron Co., 211 Ala. 111, 99 So. 649 (1924).

The record contains evidence that the son made contributions from all the jobs he held. This raises the inference that he would continue to make contributions to his parents. Since this court will not disturb the trial court’s finding if there is any evidence to support its conclusions, its judgment is due to be affirmed.

AFFIRMED.

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


author: PER CURIAM.

text:
    Joyce COKER v. FARMERS MUTUAL EXCHANGE.
    Civ. 3425.
    Court of Civil Appeals of Alabama.
    Jan. 5, 1983.

      Sherman B. Powell, Jr., of Powell & Powell and J. Tilden Dillard, Decatur, for appellant.
    Harvey Elrod of Hutson & Elrod, Decatur, for appellee.
   PER CURIAM.

The plaintiff sued the defendant on an open account. After a response by defendant and other proceedings a judgment was entered against the defendant. The defendant thereafter filed a rule 59, A.R. Civ.P., motion to vacate the judgment. The defendant’s motion was denied by the learned and distinguished trial judge and she appeals.

' The dispositive issue is whether the trial court abused its discretion in failing to vacate the judgment. We find such abuse of discretion as to require reversal and reverse and remand.

It is not necessary to set out in detail the facts surrounding this appeal. The pertinent facts are as follows:

The plaintiff sued the defendant. The defendant filed a motion to dismiss the plaintiff’s complaint. The case was then transferred from Morgan County to Lawrence County. The case was continued upon request of defendant.

Thereafter, on February 5,1982, a motion docket was held for the Lawrence County Circuit Court. Defendant and/or her attorney were notified of this setting. Neither the attorney nor the defendant appeared at the February motion docket. Apparently, the defendant’s motion to dismiss was denied at this time and without dispute the case was set for trial on March 23, 1982.

It is undisputed that neither the attorney nor the defendant received notification of the trial date. On March 23, 1982, the case proceeded to trial without the presence of defendant or her attorney and, on March 24, 1982, a judgment was entered against defendant.

Within thirty days after the judgment the defendant filed what is considered a rule 59 motion to vacate the judgment. In this motion, defendant’s attorney alleged he had not received notice of the trial date as required by the rules of civil procedure.

A hearing was held on defendant’s motion and the motion was thereafter denied. From this denial, defendant appeals.

It is clear that the granting or denying of a rule 59 motion rests largely in the discretion of the trial court. Sangster v. Sangster, 366 So.2d 1136 (Ala.Civ.App.1979). However, such action by the trial court is subject to review at the appellate level and the trial court’s action may be reversed where a legal right was abused and the record plainly and palpably shows the trial court is in error. Robertson Banking Co. v. Ebersole, 331 So.2d 278 (Ala.1976).

We note that defendant’s attorney is an “out of county” attorney, to wit, the case was tried in Lawrence County; the attorney is of Morgan County. The same attorney represented defendant from the initial pleading through this appeal.

Rule 40(b), A.R.Civ.P., provides as follows:

“(b) Notice. The clerk forthwith and, in no event more than 3 days after a case has been placed on the trial docket, shall notify all out of county attorneys of record by personal service, or by mailing a letter or by mailing a copy of the docket of the court.”

In this instance, it is without dispute that the out of county attorney was not notified of the trial date pursuant to rule 40(b). It is equally without dispute that within thirty days of a judgment being granted against the defendant, the out of county attorney’s client, the defendant, filed the appropriate motion to vacate the judgment.

This court does not believe the motion docket hearing in February is sufficient to obviate the requirements of rule 40(b). It is noted that rule 78, A.R.Civ.P., allows under certain conditions a trial court to deny motions to dismiss without oral hearings, etc.

None of the three methods of notification specified in rule 40(b) was complied with, i.e., there was admittedly no notice by personal service, by mailing a letter or by mailing a copy of the docket of the court, after the case was placed on the trial docket. The committee comments to rule 40(b) state that rule 40(b) “clearly places the duty upon the clerk to give prompt notice of a setting to all out of county attorneys.”

The Alabama Supreme Court in discussing a prior statute concerning the notification of out of county attorneys of a trial date stated as follows:

“ ‘Section 9487 of the Code is not a mere mirage to be dissolved into nothingness .... It is mandatory in its terms, and serves a useful purpose.... If a litigant may not rely upon the statute, then the statute has no field of operation, serves no useful purpose. While the Legislature was under no obligation to make provision for such notice as is prescribed by this statute, nevertheless it has done so, and in so doing has made it a part of due process of law.’ ”

Timmerman v. Martin, 234 Ala. 622, 623, 176 So. 198, 199 (1937).

While some of the supreme court language may not be appropriate in light of our present rules and otherwise might be somewhat harsh, certainly the theme of the above quoted language is worthy of note and consideration. The clear import of the language in Timmerman v. Martin, supra, is that litigants may rely on the rule which requires notice to the out of county attorney.

In view of the facts of this case, the language of rule 40(b), and the timeliness of defendant’s rule 59 motion, the trial court abused its discretion in failing to vacate the judgment and to thereby allow a trial where both parties upon proper notice can, if they desire, present evidence.

This case is due to be reversed and remanded for entry of a judgment not inconsistent with the above.

REVERSED AND REMANDED.

All the Judges concur.