author: MADDOX, Justice.

text:
    FLINT CITY NURSING HOME, INC. v. James Daniel DEPREAST, as Administrator of the Estate of William B. Depreast, Deceased.
    79-652.
    Supreme Court of Alabama.
    Sept. 25, 1981.
    Rehearing Denied Nov. 6, 1981.

      John S. Key of Eyster, Eyster, Key & Tub, Decatur, for appellant.
    Dan F. Nelson and James D. Whitmire of Brewer, Lentz, Nelson & Whitmire, Decatur, for appellee.
   MADDOX, Justice.

Plaintiff James Daniel Depreast, as administrator of the estate of William B. De-preast, deceased, filed suit against Flint City Nursing Home, Inc., and alleged that the deceased, William B. Depreast, while a patient at the nursing home, fell from a window and sustained injuries which caused his death. In his complaint, the administrator charged that the nursing home was negligent or wanton in causing or allowing the deceased to fall from the window.

In its answer, and subsequently at the pre-trial hearing, the nursing home stipulated that plaintiff’s intestate died as a result of injuries sustained when he fell from a window, but the nursing home denied that it failed to exercise reasonable care for the deceased’s safety. The trial was before a jury, which returned a verdict in favor of the plaintiff in the sum of $225,000.

The primary issues determinative of the appeal involve evidentiary questions, viz.: (1) Did the trial court err in admitting evidence concerning the licensure status of the nursing home and its administrator at the time of and prior to the accident?

(2) Did the trial court err in admitting evidence that the Alabama State Department of Health had cited the nursing home for various deficiencies?

I

We first discuss the issue of whether the trial court erred in admitting evidence concerning the licensure status of the nursing home and its administrator at the time of and prior to the accident. While we have been unable to locate any Alabama decision which specifically addresses the question of the admissibility of evidence of the licen-sure status of a business or enterprise or its administrator when the question posed is whether that business or enterprise exercised reasonable care on the occasion of the accident, we determine that this Court’s case of Lindsey v. Barton, 260 Ala. 419, 70 So.2d 633 (1954), which involved the admissibility of evidence that a motorist did not possess a driver’s license, presented a similar question and is persuasive. The central question tendered to the Court in Lindsey concerned the action of the trial court in refusing to admit evidence proffered by the defendants that while driving his car at the time of the accident, the plaintiff did not have a driver’s license. The Court discussed the question of the admissibility of that evidence, as follows:

“Under Title 36, § 59, Code 1940, a driver’s license is required of anyone operating a motor vehicle on the highways of this state; § 63 provides for an examination of the driver prior to the issuance of such license and § 69 makes it a misdemeanor to drive a vehicle without a driver’s license. The argument is advanced that on the issue of contributory negligence, evidence that the plaintiff, in violation of Title 36, § 59 et seq., did not have a driver’s license was admissible. We are aware of the divided authority in other jurisdictions bearing on this question. It is res novo with us.
“The appellants contend that violation of a statute is negligence per se in Alabama, Watts v. Montgomery Traction Co., 175 Ala. 102, 57 So. 471, 472, and that since the appellee’s driving without a license was in violation of Title 36, § 59 et seq., on an issue of contributory negligence such violation is conclusively negligence and evidence thereof should necessarily be admitted and is proper on the question of the competency of the driver.
“Mr. Justice Anderson in the Watts v. Montgomery Traction Co. case, supra, cited 29 Cyc. 438 as authority for the rule that ‘the statute * * * violated * * * [in order to be negligence per se] must have been enacted for the benefit of the party who seeks to invoke its violation as distinguished from the public generally or a class to whom the ordinance necessarily applies.’ And in 29 Cyc. 438 there appears the following statement: ‘It is necessary, however, that the duty imposed be for the benefit of the person injured * * and where the duty is plainly for the benefit of the public at large the individual acquires no new rights by virtue of its enactment. Whether a liability arising from the breach of a duty prescribed by a statute * * * accrues for the benefit of an individual specially injured thereby, or whether such liability is exclusively of a public character, must depend upon the nature of the duty enjoined and the benefits to be derived from its performance.’ (Emphasis added).
“Some statutes have been held to have been passed for the benefit of particular individuals only and not for the benefit of the public. In this situation, the breach of the statute is negligence per se only if the party invoking such violation is within the class sought to be protected by the statute. Louisville & N. R. Co. v. Murphree, 129 Ala. 432, 29 So. 592; Central of Georgia R. v. Sturgis, 149 Ala. 573, 43 So. 96.
“It would seem that the statute requiring a driver’s license imposes a duty for the benefit of the public at large and the individual defendant therefore, would acquire no new rights by virtue of its enactment, nor would a violation thereof by the plaintiff, although a criminal offense, inure to the benefit of the defendant so as to be pleaded as contributory negligence against the plaintiff in an action for damages arising from an auto collision between them.
“Moreover, there was no evidence in this case nor any offer to show evidence by the appellants-defendants tending to prove a causal relationship between the plaintiff’s injuries and the plaintiff’s alleged violation of the statute in failing to have a license. This is equally true of the evidence of the refusal upon application to grant the plaintiff a driver’s license. By the weight of authority and the better reasoning as we see it, under the facts here presented, evidence that the driver was not licensed as required by statute is inadmissible unless there is some causal relationship between the injuries and the failure to have a license. Upon like reasoning the rejection of the evidence of the refusal upon application to grant the plaintiff a driver’s license was proper. See DeVite v. Connecticut Co., 112 Conn. 670, 151 A. 320; Davis v. Gordon, 183 Md. 129, 36 A.2d 699, 156 A.L.R. 1109 (Evidence that defendant’s license had been revoked before the accident in question improperly admitted.); Dervin v. Frenier, 91 Vt. 398, 100 A. 760; Lindsay v. Cecchi, 3 Boyce 133, 80 A. 523, 35 L.R.A., N.S., 699; Lutfy v. Lockhart, 37 Ariz. 488, 295 P. 975; Speight v. Simonsen, 115 Or. 618, 239 P. 542, 43 A.L.R. 1149; Mahowald v. Beckrich, 212 Minn. 78, 2 N.W.2d 569; Opple v. Ray, 208 Ind. 540, 195 N.E. 81; Strandt v. Cannon, 29 Cal.App.2d 509, 85 P.2d 160; Ross v. Pennsylvania R. Co., 106 N.J.L. 536, 148 A. 741. Prichard v. Collins, 228 Ky. 635, 15 S.W.2d 497 (All evidence with reference to failure of driver to be licensed wholly immaterial.) See also Huddy, 15-16 Ency. of Automobile Law 364, § 193; McElroy, The Law of Evidence in Alabama, § 41, p. 14; Gregory, ‘Breach of Criminal Licensing Statutes in Civil Litigation,’ 36 Corn.L.Q. 622.
“We hold, therefore, that the rejection of evidence that the plaintiff had tried and failed to get a driver’s license and that he had never had one was proper.”

This Court reached a similar result in Giles v. Gardner, 287 Ala. 166, 169, 249 So.2d 824 (1971):

“Assignment of error two is predicated on the trial court’s overruling of the defendant’s objection to admitting into evi-. dence the defendant’s lack of a driver’s license. The only witness presented in behalf of the defendant was the defendant’s mother, who had given her son permission to use the car on the day the accident occurred. On cross examination, counsel for plaintiff asked, ‘You knew that he didn’t have a driver’s license didn’t you?’ Then, without a ruling on the objection, the trial court asked, ‘Did he have a driver’s license?’ There was further objection and the trial court overruled the objection and the witness answered, ‘No.’
“Before such evidence is admissible there must be established a causal connection between the failure to have a license and the injuries received in the accident. Lindsey v. Barton, 260 Ala. 419, 70 So.2d 633. In Chattahoochee Valley Railway Company v. Williams, 267 Ala. 464, 103 So.2d 762, proof of revocation of a driver’s license was held inadmissible absent a showing of a causal connection between such revocation and the injuries received from the accident. The existence or non-existence of a driver’s license does not establish the competency or incompetency of a driver. Commercial Union Ins. Co. of N.Y. v. Security Gen. Ins. Co., 282 Ala. 344, 211 So.2d 477. In the instant case, no such causal connection is shown. Furthermore, we are of the opinion that the admission into evidence of the failure of the defendant to possess a driver’s license was prejudicial error which requires a reversal. See Madison v. State, 40 Ala.App. 62, 109 So.2d 749, cert. denied 268 Ala. 699, 109 So.2d 755, holding that reversible error was committed in admitting evidence of the revocation of the defendant’s driver’s license in a case where defendant was convicted of manslaughter; and see also, Stanford v. State, 40 Ala.App. 220, 110 So.2d 641, holding that reversible error was committed in allowing testimony that the defendant had no driver’s license. That case was a criminal prosecution for leaving the scene of an accident. Although the instant case is civil, we think that the evidence admitted was prejudicial error necessitating a reversal of the judgment.”

Although Lindsey and Giles both involved a failure of the person involved to have a driver’s license, we think both cases are especially instructive on the legal issue presented in this case — the admissibility of evidence of the failure of a business or person, such as a regulated nursing home and its administrator, to have a license, when the question of actionable negligence on a specific occasion is at issue. As we read Lindsey, and the later case of Giles, evidence that one who is required to have a license by law does not have one, would be admissible only if:

(1) The statute which requires the license was enacted for the benefit of the person who seeks to invoke its violation as distinguished from the public generally or a class to whom the statute necessarily applies, and

(2) There was a causal connection between the failure of the person or business required to be licensed and the injuries suffered.

The plaintiff contends that the evidence was admissible under the two-prong test set out in Lindsey. We have studied plaintiff’s arguments very closely and we conclude that the two-prong requirement mentioned in Lindsey was not met in this case. The statutes which were enacted to regulate and require nursing homes and their administrators to be licensed, were enacted under the police power to provide for the public health, welfare and safety, and are designed to protect the public generally from incompetent, unethical, and unscientific practitioners in nursing home care. Cf. Dent v. West Virginia, 129 U.S. 114, 9 S.Ct. 281, 332 L.Ed. 623 (1889). As this Court held in Lindsey, with regard to the requirement that persons who operate a motor vehicle on the highways of the state must have a driver’s license, we hold that the statutes which regulate nursing homes impose a duty for the public at large. Any individual person injured, therefore, would acquire no new rights by virtue of the enactment of the statutes. Lindsey, 260 Ala. at p. 422, 70 So.2d 633. Furthermore, we find no showing of a causal connection between the licensure status of the nursing home and its administrator at the time of and prior to the accident and the injuries received by the plaintiff’s intestate.

II

The next issue is whether the trial court erred in admitting evidence that the Alabama State Department of Health had cited the nursing home for various deficiencies.

Unquestionably, the nursing home had been cited on previous occasions for many deficiencies. The deficiencies were as follows:

1. A safe and sanitary environment for patients and personnel does not exist.
2. Special care for patients. Patients with personality problems are not housed in a manner so as to prevent them from disturbing or even hurting other patients.
3. Maintenance is poor on building.
4. Several windows have loose screens or no screens.
5. Missing window screens and paucity of room air conditioners virtually insures inability to maintain comfortable room temperature.
6. The call system for the patient beds does not operate.
7. The nursing home does not have sufficient housekeepers to keep the building clean.
8. Windows and window sills contain accumulation of dust and grit for more than a day’s duration.
9.Unsanitary conditions and offensive odors encountered in any area or section of the facility are indisputable facts that there are insufficient personnel assigned to this department.
10. The nurses’ notes do not consistently include pertinent observations relative to the care rendered, i.e., the patient’s response and progress to rehabilitative nursing being provided. The notification of the physician and family at the time of significant changes of the patient [sic],
11. The governing body has not appointed an administrator who functions in a manner so as to plan, organize and direct the enforcement of rules and regulations to assure the health, care and safety of the patients and the protection of their personal rights.
12. This individual is not a licensed nursing home administrator, nor does he have administrative experience in a health care setting.
13. The facility’s administrator has not planned ongoing liaison among the governing body, medical and nursing staff, and other professional and supervisory staff of the facility.
14. The governing body has not enforced rules and regulations necessary for the health, care and safety of the patients.
15. The facility’s policy relating to notification of physician, next-of-kin and other responsible persons in case of change in patient’s status are [sic] not appropriately written to assure that proper notification is made.
16. The education program is not effective as evidenced by the lack of proper orientation of its employees for disaster preparedness, lack of fire drills, lack of orientation and training for dietary employees, unsanitary practices of dietary employees and poor maintenance and storage throughout the facility.

Plaintiff, contending that the evidence of these citations was admitted for the purpose of showing that the defendant nursing home had notice of the dangerous condition of the premises, summarizes his argument for the admissibility of his evidence, as follows:

“The details of Mr. Depreast’s tragic death shock the conscience and strain the imagination. The nursing home was operated and maintained in an incompetent, deplorable manner. It was a death trap for the elderly because the administration failed to implement and enforce basic standards of nursing care for the safety and well-being of its elderly patients. The facility was run down and in a poor state of repair. Insufficient personnel were provided to care for the patients and maintain the nursing home. Employees were not adequately trained in patient care procedures. Nurses and aides failed to record important observations and changes in patients’ conditions. Appropriate means were not provided for the blind to identify hazardous areás. Problem patients were not housed in a special room to prevent them from harming themselves or others. There was a shortage of restraining devices and patients requiring restraints were sometimes tied down with bed sheets or not restrained at all. The patient call system was not operative. The beds did not have side rails which could be raised to contain the patients. The air conditioning system was constantly broken down, making it necessary to raise the second floor windows for ventilation. There were no protective devices provided to prevent patients from going out the windows, except for screens, and some of . those were always missing or loose.
“While Mr. Depreast was a patient at the nursing home, the State Health Department repeatedly notified the nursing home that its nursing care was improper in all the above areas. Even after these numerous warnings, the dangerous conditions continued to exist at the nursing home throughout Mr. Depreast’s stay, exhibiting total disregard for the nursing care and safety of Mr. Depreast.
“This shocking state of affairs which existed at Flint City Nursing Home in May 1978 can be traced directly to the negligent entrustment of the management and patient care of the nursing home to Clarence Shelton, who was totally untrained, inexperienced and incompetent.
* * * * * sft
“Mr. Depreast’s death was a proximate consequence of the overall mismanagement of the facility. This nursing home was a death trap for elderly patients like Mr. Depreast. His death was directly caused by a multitude of violations of the minimum standards of care established by state and federal laws for the care of nursing home patients.”

Plaintiff argues that “evidence of deficiencies found by the State Department of Health was admitted for the purpose of showing notice to the nursing home of dangerous conditions existing at the nursing home and inadequate policies and procedures relative to the care and well-being of its patients.” Plaintiff argues that the trial court had discretion to decide whether or not to permit these deficiencies to be shown and that the evidence of the deficiencies was allowed for “the limited purpose of showing notice to the nursing home, and [the court] so instructed the jury during the trial.” Plaintiff is correct. The court did instruct the jury that evidence of past deficiencies was admitted for the purpose of showing notice.

Plaintiff contends that in view of the instruction which limited the jury’s consideration of the evidence no prejudicial error was shown. Because the court did instruct the jury as it did, this case presents a difficult question on the presence or absence of prejudice. Plaintiff is correct in contending that evidence of knowledge by an alleged tort-feasor of a defective condition is admissible to show that notice was brought home to him of the defective condition. The rule of law is that, in an action for injury, under certain circumstances, especially when knowledge of the defective condition may be an issue, evidence of notice to the alleged tort-feasor, prior to the accident and suit, of the alleged dangerous condition, is relevant to the issue of negligence. Alabama Great Southern Railway Company v. Choate, 184 Ala. 636, 64 So. 78 (1913). On the other hand, good or bad character of a party in a civil action which is offered as tending to show that party’s conduct on a specified occasion, is generally excluded. C. Gamble, McElroy’s Alabama Evidence, § 34.01, p. 60. Nevertheless, the alleged defect, the notice of which was brought home to the tort-feasor, must have been one which proximately caused or proximately contributed to the injury or death complained of.

Applying the above-stated rule to the facts of this case, we determine that deficiencies which are numbered 5, 7, 8 and 15, were inadmissible. With regard to the other deficiencies we express no opinion, especially since the cause must be reversed on another point. If the case is re-tried, the question of admissibility of these other deficiencies may not arise, and if the question does arise, the parties and the court may well handle the matter differently than the matter was handled in the first trial.

CONCLUSION

We have made a full and fair examination of the record in this case, and we have carefully researched Alabama law regarding the evidentiary questions posed on this appeal, and we are convinced that the trial court (1) erred in admitting evidence which related to the licensure status of the nursing home and administrator and, (2) under the facts of this case, erred in admitting evidence concerning deficiencies numbered 5, 7, 8 and 15, which deficiencies were noted by inspectors of the Health Department, even though the court gave a limiting instruction with regard to the effect of the evidence of those deficiencies.

Even though we reverse the case, we are compelled to point out that the record contains sufficient evidence from which the jury could have found that the defendant was negligent on the occasion complained of, without considering the evidence we hold should not have been admitted. We would be reluctant to reverse the judgment of the trial court and order a new trial in this case except for the fact that we are not convinced that the admissibility of the evidence which we have determined should have been excluded did not affect the measure of damages assessed by the jury; therefore, we conclude that the nursing home is entitled to a new trial. Because of the judgment we reach on the evidentiary issues, we do not discuss the nursing home’s contention that the verdict was excessive, but we should not be understood as agreeing with the nursing home’s contention that the verdict was excessive. We only hold that the admission of the prejudicial evidence could have affected the size of the verdict, and because of that fact, we cannot apply the harmless error rule. Rule 45, A.R.A.P.

The judgment of the trial court is due to be reversed and the cause remanded.

REVERSED AND REMANDED.

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

FAULKNER and ALMON, JJ., not sitting.

      . “THE COURT: In conjunction with the objections that have been made and the offers of evidence concerning deficiencies. You have heard me limit several items, ladies and gentlemen, in the testimony in the face of objection, and I will give you this instruction as concerns these alleged notices from the Department of Public Health: You may consider deficiencies cited by the Department of Public Health to the end that such would logically tend to put the defendant or its agents on notice — if you are reasonably satisfied that they had such a tendency. You should not consider them as being true. That would be hearsay. You should not consider any deficiency that you are not reasonably satisfied from the evidence logically tended to notify the defendant that specific conditions existed which might proximately cause injury to a patient if not corrected.
      “You have heard me say several times I will let it in on the purpose of notice. They are allowed for that purpose, and not for the purpose of the truth of what is in them.
      “The statements made by someone would have a tendency to notify somebody of an existing condition if a jury was reasonably satisfied after it was over with and had all the evidence that the reasonable [sic] conditions existed, whether the truth of what the person said was so or not.
      “It is not allowed for the purpose of bolstering up or supporting that position. It is allowed only for the purpose of notice.
      “With that instruction, I will let you go ahead.


source: Caselaw Access Project

author: ALMON, Justice. JONES, Justice

license: Public Domain

text:
    ALABAMA POWER COMPANY, a Corporation and Asplundh Tree Expert Company, A Corporation v. Sam E. RAGLAND and Annette J. Ragland. Sam E. RAGLAND and Annette J. Ragland v. ALABAMA POWER COMPANY, a Corporation and Asplundh Tree Expert Company, a Corporation.
    80-212, 80-213.
    Supreme Court of Alabama.
    Sept. 25, 1981.
    Rehearing Denied Nov. 6, 1981.
    Edward S. Allen of Balch, Bingham, Baker, Hawthorne, Williams & Ward, Birmingham, and Lee Bains, Bessemer, for appellants/cross-appellees.
    James B. Kierce, Jr. of Stone, Patton & Kierce, Bessemer, for appellees/cross-appel-lants.
   ALMON, Justice.

Alabama Power Company (Alabama Power) and Asplundh Tree Expert Company (Asplundh), defendants below, appeal from a judgment on a jury verdict granting Sam and Annette Ragland (the Raglands), plaintiffs below, $50,000 damages in trespass. Alabama Power and Asplundh contend that the trial court erred in its application of the law on Alabama Power’s “right and authority to remove outside of [its] right-of-way such timber as may injure or endanger by shading, falling or otherwise any of its works. . .Code 1975, § 10-4-320(9) (See also § 37-4-130). This code section is the source of easements which Alabama Power has acquired since the early twentieth century to cut “danger trees” from the land such as that now owned by the Raglands.

This case has been to this Court once before. Ragland v. Alabama Power Company, 366 So.2d 1097 (Ala.1978). On that appeal this Court reversed a summary judgment for Alabama Power because the Court found there to be genuine issues of material fact which made summary judgment inappropriate. At the trial after remand, the trial court gave instructions to the jury which relied heavily upon the phrase “concrete threat of injury” as quoted in the prior opinion of this Court from Collins v. Alabama Power Company, 214 Ala. 643, 108 So. 868 (1926). We hold that the instructions as given placed too great a burden of proof on Alabama Power, that the full trial of the case dispelled the factual issue found in the prior appeal, and that the trial court should therefore be reversed.

The Raglands acquired a two-acre plot near Bessemer in 1968 and built a house on it in 1971. This land adjoined land on which Alabama Power had a right-of-way and on which it ran three high-voltage transmission lines, the closest of which was only a few feet from the Raglands’ property. When building his house, Mr. Ragland left standing some pine trees that blocked the view of the power lines from his house.

In November, 1975, Mr. Ragland received a letter from Alabama Power giving him notice that the company would be cutting trees along its right-of-way. Sometime later, Kenneth A. Berry (Berry), a supervisor of line clearing for Alabama Power, came to the Raglands’ house to show Mr. Ragland which trees they would be cutting. Mr. Ragland threatened to shoot anyone who came on the property to cut trees. After this “a deputy sheriff came out and delivered a paper stating that they did have that right, or it was on the deed that they had the right to cut the trees.” Mr. Ragland called an attorney, who told him to have Berry call him (the attorney) before cutting the trees. Nevertheless, when Berry came with employees of Asplundh to the property on December 19, he refused to call Mr. Ragland’s attorney and proceeded to cut down fifteen trees and top two others. An off-duty deputy sheriff accompanied them; Mr. Ragland took photographs of the operation.

After the trees were cut, Mr. Ragland hired Edward H. Givhan (Givhan), an experienced forester, who inspected the stumps and other conditions about the Raglands’ property in October of 1976. It was his affidavit which was the source of the factual dispute relied upon in our opinion, and he testified at trial to the same effect about topography, weather conditions, and health of the trees and his opinion that these trees did not pose a concrete threat of injury to the transmission lines.

Givhan’s testimony on cross-examination, however, points out a significant inconsistency. He testified that part of his business was to make appraisals of property for Alabama Power and the Tennessee Valley Authority (TVA) for acquisition of rights-of-way and condemnations:

A ... We make an evaluation of the property and the timber and then also make an evaluation of trees that are classed as danger trees.. . .
. .. And the forester makes a judgment of any trees that would fall and strike the power line or come within a certain distance. I believe for the Alabama Power Company it is within five feet.
. .. Then you make an evaluation of the land based on comparable land sales, and the same way with the timber.
Q And what else do you do?
A Make an evaluation of the trees that are classed as danger trees.
Q Outside the right-of-way?
A Yes, sir. It would be almost, depending on the type of the trees and the height of the topography, whether the tree would fall and hit the conductor.

This testimony indicates a double standard for danger trees: when working for Alabama Power, Givhan considered height almost exclusively; when working for the Raglands, he also considered health of the trees, neighboring trees, and weather conditions. Furthermore, this testimony indicates that the price paid for the danger tree easement, which was reflected in the record title to the property bought by the Rag-lands, took into consideration Alabama Power’s long-standing five-foot rule.

Other parts of Givhan’s testimony undercut his conclusion that these trees posed no concrete threat of injury. Whereas his affidavit indicated that these trees would withstand 80-mile-per-hour winds, he testified that tornado winds reach up to 300 miles per hour, that tornados come through the area, and that the trees would be no match for such winds. He also testified that trees in the area are threatened by cronartium, or red orange rust, and by pine beetles. In fact, Mr. Ragland cut down four pine trees on the property in 1979 which were infested with pine beetles.

Statistics presented by Alabama Power graphically show that the ad hoc determination espoused by the Raglands and made by Givhan would have disastrous effects on electric service reliability and costs in Alabama. For distribution lines, those which run along the streets and serve only a small number of customers, Alabama Power clears only dead or leaning trees; for larger scale transmission lines, such as those involved here, Alabama Power cuts any tree that would fall within five feet of the nearest conductor. (The federal courts, in Tennessee, at least, apply this same five-foot rule for TVA “danger tree” easements.) United States v. An Easement and Right of Way, 182 F.Supp. 899 (M.D. Tenn. 1960). Witnesses for Alabama Power testified that their records showed 1807 tree-caused outages on 5000 miles of distribution lines in 1975 and 5 tree-caused outages on 500 miles of transmission lines. For a fifteen-year period 95-96% of tree-caused transmission line outages were caused by live trees, 4-5% by dead or diseased trees. It is clear, therefore, that if Alabama Power has to make a tree-by-tree determination of “concrete threat of injury” based on the health of the tree and other arguable factors, the efficiency of tree-clearing operations will be substantially reduced and outages will probably increase. Alabama Power will also be subject to suit from any disgruntled property owner who does not agree that his trees pose a threat to neighboring lines. On the other hand, if we allow Alabama Power to continue using its five-foot rule, property owners will have a definite standard by which to trim their trees.

The problems in this case stem from our reversal of the trial court’s earlier summary judgment in favor of Alabama Power. Our quotation from Collins v. Alabama Power Company, 214 Ala. 643, 108 So. 868 (1926), caused the trial judge to give the jury only one definition of “danger trees”: “trees which by reason of size or condition and contiguity to the Alabama Power Company right-of-way involved a concrete threat of injury to the Alabama Power Company transmission lines.” In effect, the instructions given the jury and its verdict in response changed this to size and condition.

This Court’s earlier opinion made it clear that we reversed based on the burden placed on the party moving for summary judgment. Ragland v. Alabama Power Company, 366 So.2d 1097, at 1099. We now hold that the factual development at trial proved that the ascertainable standard which Alabama Power has developed is the only practicable method for determining what is a “danger tree.” The conflicting evidence offered by the Raglands’ and Alabama Power’s forestry experts only proves that the probability of a particular tree falling in a particular direction is not scientifically ascertainable, and so can provide no guidance to Alabama Power in exercising its duty to maintain its lines in a safe condition. Alabama Power Company v. Taylor, 293 Ala. 484, 306 So.2d 236 (1975); Blackwell v. Alabama Power, 275 Ala. 123, 152 So.2d 670 (1963); Alabama Power Company v. Matthews, 226 Ala. 614, 147 So. 889 (1933).

Decisions of this Court subsequent to Collins have discussed “danger trees” without relying specifically on the phrasing used in Collins. See e.g., Thompson v. Alabama Power Company, 336 So.2d 1102 (Ala. 1976); Alabama Power Company v. Henson, 237 Ala. 561, 187 So. 718 (1939). The opinion in Thompson made specific reference to the code sections cited at the beginning of this opinion and referred to “danger trees” as “fall line trees”; in Henson, the phrase used was “trees as they grow high enough to endanger the line.” In reliance upon our prior opinion in this case, however, the trial court refused to give a requested instruction based on the statutory definition and two instructions that the verdict should be for the defendants if the jury was reasonably satisfied from the evidence that trees within falling distance of transmission lines pose a concrete threat of injury to them.

It is evident, therefore, that the jury was led to believe that Alabama Power Company was required to prove more than its size and contiguity measurements. We cannot fault the trial court for attempting to conform to our prior opinion. However, the evidence showed conclusively that all of the trees cut were “danger trees” as a matter of law. Therefore, the case is due to be reversed and rendered and a judgment is entered here in favor of Alabama Power.

REVERSED AND RENDERED.

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

JONES, J., concurs specially.

JONES, Justice

(concurring specially).

I concur with the opinion. Perhaps, however, our opinion ought to be more explicit on one additional point. Both of the Code sections referred to (§§ 10-4-320(9) and 37-4-130) conclude with similar language: “. . . and for that purpose may acquire such timber ... by condemnation.”

In other words, the Power Company has no right to acquire a right-of-way pursuant to its statutory (public use) right of condemnation and then exceed the bounds of the way acquired by taking additional property without compensation. Here, the record is clear that is not what happened. The deed conveying the right-of-way included the further right to “. . . cut and keep clear all trees and undergrowth and other obstruction on said strip and danger trees adjacent thereto where necessary.”

The primary issue of fact, then, as properly stated in the opinion, is whether or not' the Power Company exceeded the grant which it acquired (and paid for) pursuant to the statutory right of eminent domain.

      . The Raglands’ cross-appeal is rendered moot in view of our decision in the Alabama Power appeal.

      . Alabama Power sought to introduce contracts with tree-cutting companies using this guideline which went back to 1948. The trial court excluded the exhibits because they were offered to prove adverse possession and, although the same right-of-way was covered in the contracts, there was no evidence that trees on the Raglands’ lot had actually been cut.

      . Alabama Power does not top trees except ornamental trees close to houses; the two trees topped in this case were the farthest from the lines. Nevertheless, a property owner could presumably retain his trees by trimming them himself.


author: TORBERT, Chief Justice.

text:
    Ralph P. EAGERTON, Jr., Individually and as Commissioner of Revenue, State of Alabama. v. GULAS WRESTLING ENTERPRISES, INC., et al.
    80-271.
    Supreme Court of Alabama.
    Sept. 25, 1981.
    Rehearing Denied Nov. 6, 1981.

      Charles A. Graddick, Atty. Gen., and Herbert I. Burson, Jr., Counsel, Dept, of Revenue and Asst. Atty. Gen., and Bill Thompson, Asst. Counsel, Dept, of Revenue and Asst. Atty. Gen., for appellant.
    J. Gusty Yearout of Lorant, Harris & Yearout, Birmingham, for appellees.
   TORBERT, Chief Justice.

The appellees, Gulas Wrestling Enterprises, Inc., et al., filed a declaratory judgment action for a determination as to the constitutionality of Code 1975, §§ 41-9-90 through -126, and Act No. 80-121, Acts of Alabama, 1980. The appellees’ complaint alleged that the statutory provisions were unconstitutional on the grounds that the licenses, fees and taxes imposed by the statutes deny them due process and equal protection of the law and that the statutes are discriminatory and confiscatory and provide for double taxation. Further, the complaint alleged that the statutes violate Art. I, § 22; Art. IV, § 73; and Art. IV, § 93, of the Alabama Constitution. The trial court held the statutes in question unconstitutional. From the adverse ruling, Eagerton, in his capacity as Commissioner of Revenue appeals.

The Alabama Legislature passed Act No. 80-121, Acts of Alabama, 1980, in response to a report prepared by the Department of Examiners of Public Accounts of the State of Alabama. The trial court record discloses that the examiners, in their report pertaining to the operation of the Boxing and Wrestling Commission as established by Code 1975, §§ 41-9-90 through -103, and §§ 41-9-120 through -126, reached the following conclusions:

The three member Boxing and Wrestling Commission was created in 1939 to regulate and control professional boxing and wrestling in Alabama. The Commission operates solely from its receipts and receives no appropriation from the legislature.
The powers and duties prescribed to the Commission gives [sic] them almost unlimited and total control over every aspect of boxing and wrestling. Such a situation could easily be abused.
The Commission has no full-time employees. It has appointed a secretary who is responsible for keeping a record of Commission meetings, collecting revenue and issuing licenses and permits. Compensation for this position is $100.00 a month.
The Commission is authorized by statutory provision to collect a gross admission receipts tax on all boxing and wrestling matches except those held by educational institutions and military organizations. If a boxing or wrestling match is sponsored by a patriotic organization chartered by authority of a special act of the Congress of the United States, the amount of tax collected by the Commission is 10% rather than 17V2%. One promoter’s representative revealed that it was their policy to always be sponsored by a patriotic organization, thus saving llh% Commission tax.
Two wrestling matches were attended for purposes of this review. Violations of the Commission’s enabling legislation and Rules and Regulations were noted. Permits to hold the matches were not in accordance with Commission Rules and Regulations. One ticket taker’s license had expired, and seven of twelve wrestlers at one match did not have current licenses with them at the time of the scheduled match.
The Commission owns a substantial amount of office equipment even though it has no full-time employees. Most of the equipment is located at the American Legion Headquarters in Montgomery and is used by the Legion on a regular basis. Maintenance agreements on much of this equipment used by the Legion are kept in effect by the Commission.
One half of all monies received by the Commission is paid to the American Legion. This is in conflict with the Code of Alabama 1975, § 41-9-91. The total overpaid to the American Legion for the past two fiscal years is in excess of $65,-000.00. Additionally, the provision which authorizes a portion of the Boxing and Wrestling Commission’s receipts be paid to the American Legion may be in conflict with the Alabama Constitution of 1901.
. The Commission is in violation of its Rule # 18 which requires that tickets of different prices must be printed on cardboard of different and distinctive colors with admission prices shown on same. The Commission has not enforced the pre-printing of tickets which show the total price and sales tax on each ticket, therefore, an erroneous and smaller Boxing and Wrestling Tax is being collected by the Commission.

The Act, passed by the Legislature in 1980, repealed Code 1975, §§ 41-9-90 through -95 inclusively and §§ 41-9-97 through -126 inclusively, “so as to terminate the existence and functioning of the Alabama Boxing and Wrestling Commission and to amend section 41-9-96 . . . . ” 1980 Acts of Alabama, No. 121. The effect of the 1980 Act, in addition to abolishing the Boxing and Wrestling Commission, is to (1) establish a state athletic commission; (2) retain the licenses, permits and taxes relating to boxing and wrestling, but make the commissioner of revenue responsible for the collection and administration thereof; (3) offer to sell to the American Legion, department of Alabama, all furniture and equipment belonging to the discontinued Boxing and Wrestling Commission, after appraisal, with all other supplies and other belongings of the discontinued commission to be transferred to the commissioner of the department of revenue; (4) waive all debts incurred by the American Legion, department of Alabama, to the state regarding the disposition of funds collected by the Boxing and Wrestling Commission between October 31, 1977, and the enactment of the 1980 bill; and (5) continue to require that one-half of the monies collected from the fees, licenses and taxes, after expenses, be paid to the American Legion, department of Alabama, with the remaining half to be paid into the state general fund.

We find that there are three principal issues dispositive of this appeal:

1. Whether the state has the authority to require that boxing, sparring and wrestling events be regulated through the use of permits, licenses and taxes;

2. Whether Article IV, § 73, of the Alabama Constitution was violated because a two-thirds vote of both Houses of the Legislature was not obtained in the passage of Act No. 80-121; and

3. Whether the portions of the Act dealing with the American Legion, department of Alabama, are severable from the remainder of the Act.

As a general proposition, it is settled law that the state has the police power to regulate through the use of permits, licenses and taxes.

We do note that the power to tax is essentially an attribute of sovereignty conferred by the people, through the constitution, on the state, and is vested in the legislative department. American Bakeries Co. v. City of Huntsviiie, 232 Ala. 612, 168 So. 880. The legislature has the broadest range and powers in establishing classifications or subclassifications for the purpose of license and excise taxes. State v. Pure Oil Co., 256 Ala. 534, 55 So.2d 843. Further the legislature in classifying subjects for taxation is not required to state the grounds for classification. State v. Pure Oil Co., supra. Legislative classifications in tax matters are presumably valid, the burden being on the challenger to prove that such a classification or subclassification does not rest on a reasonable basis and such statutes are not to be deemed unconstitutional or invalid if any state of facts can be conceived which would support the subject of the tax. Glass v. Prudential Ins. Co. of America, 246 Ala. 579, 22 So.2d 13; Johnson v. State ex rel. City of Birmingham, 245 Ala. 499, 17 So.2d 662; State v. Pure Oil Co., supra.
Furthermore particular privileges, occupations, classes or subclasses of businesses may be licensed and taxed and other privileges, occupations or businesses need not be included and can be entirely exempt therefrom. Henry v. Shevinsky, 239 Ala. 293, 195 So. 222; State v. Pure Oil Co., supra.
In other words the classification of occupations and privileges for taxation is largely a matter of legislative discretion, and it will not be interfered with by the courts as being in violation of the rules of equality and uniformity unless it is palpably arbitrary and unreasonable and unless there is no conceivable state of facts which would support it. State v. Pure Oil Co., supra; Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327; Frazier v. State Tax Commission, 234 Ala. 353, 175 So. 402, 110 A.L.R. 1479.
A license tax on certain manufacturers or certain types of manufacturers is not uncommon and such statutes have been upheld as a valid exercise of the legislative power to tax and to classify. Touart v. American Cyanamid Co., 250 Ala. 551, 35 So.2d 484; Alaska Fish Salting & By-Products Co. v. Smith, 255 U.S. 44, 41 S.Ct. 219, 65 L.Ed. 489.

Haden v. Watson, 270 Ala. 277, 281, 117 So.2d 694, 696-97 (1960).

Appellees contend that boxing and wrestling are being singled out as the only sports to be regulated. It is our opinion that the state has the authority to regulate boxing, sparring and wrestling regardless of the absence of, or the existence of, lesser regulations imposed on other sporting events in the state.

The basic tenet of the equal protection clause is not that all persons must be treated equally, but rather that all persons similarly situated must be treated equally. See, Hayes v. Missouri, 120 U.S. 68, 7 S.Ct. 350, 30 L.Ed. 578 (1887). In this case, there is no suspect class nor any fundamental right involved. The equal protection clause does not take from the state the power to establish classes in which to regulate through forms of permits, licenses and taxes. States are allowed a wide range of discretion as long as that which is enacted by the legislature has some reasonable basis and is not purely arbitrary.

Since the members of a legislature necessarily enjoy a familiarity with local conditions which this Court cannot have, the presumption of constitutionality can be overcome only by the most explicit demonstration that a classification is a hostile and oppressive discrimination against particular persons and classes.

Madden v. Kentucky, 309 U.S. 83, 88, 60 S.Ct. 406, 408, 84 L.Ed. 590 (1940). “Similarly, it has long been settled that a classification, though discriminatory, is not arbitrary nor violative of the Equal Protection Clause of the Fourteenth Amendment if any state of facts reasonably can be conceived that would sustain it.” Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522, 528, 79 S.Ct. 437, 441, 3 L.Ed.2d 480 (1959). “The burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it.” Madden v. Kentucky, 309 U.S. at 88, 60 S.Ct. at 408. Appellees have not offered any evidence that the regulation of boxing, sparring and wrestling is arbitrary, nor have they shown that there is no conceivable rational basis for the statutory regulation. The privilege taxed is that of engaging or participating in wrestling, sparring or boxing in Alabama, and the regulation is imposed upon that privilege, not the privilege of engaging in a sporting event. See, Barron-Leggett-Electric, Inc. v. Department of Revenue, 336 So.2d 1124 (Ala. Civ. App), cert. denied, 336 So.2d 1128 (Ala. 1976). The Alabama Legislature has the authority to regulate wrestling, sparring and boxing in the manner prescribed in Act No. 80-121 and we believe the legislation has a rational basis and is not arbitrary.

However, while the Legislature has the power to regulate wrestling, sparring and boxing, the distribution, by the Legislature, of one-half the monies to the American Legion was improperly accomplished and violates Art. IV, § 73, of the Alabama Constitution. This provision of our state constitution reads as follows: “No appropriation shall be made to any charitable or educational institution not under the absolute control of the state. .. except by a vote of two-thirds of all the members elected to each house.” There are 105 members of the Alabama House of Representatives. The evidence shows that the vote in the House on the bill enacted as Act No. 80-121 was Yeas 67; Nays 0. This was not a two-thirds vote.

The record also shows that the American Legion, department of Alabama, is a charitable organization that has engaged since 1920 in the following programs:

Rehabilitation
Supporting programs in the Veterans Administration hospitals. A continued program assisting the veteran and the veteran’s family.
Youth Programs
Boys State; Boys Scouts; Oratorical Contest; Baseball; ROTC (College and High School); City & County Government; 4-H Club.
Scholarship Program
The American Legion and the American Legion Auxiliary maintain forty-nine scholarships in colleges throughout Alabama.
Law Enforcement Officer and Fireman Program
A statewide program promoting recognition of the important role that law enforcement officials and the firemen of Alabama play in keeping our state secure.
Historical Commission
The Historical Commission is continuously marking and monitoring veterans’ graves throughout the state of Alabama of Alabama veterans of all wars in which Alabama has been engaged. Some burial sites and cemeteries have been completely restored. Plaques and markers have been placed at many historical sites in Alabama. More than 1,000 plaques and markers have been placed during 1979-80.

The American Legion, department of Alabama, is a voluntary association, incorporated as a non-profit veterans organization. Chapman v. American Legion, 244 Ala. 553, 556, 14 So.2d 225 (1943). Therefore, the American Legion, department of Alabama, is a charitable organization not under the absolute control of the state. While the Legislature had the power to designate the American Legion, department of Alabama, as a recipient of one-half the monies collected, our constitution requires that the bill be passed by a two-thirds vote of all of the members in each House. This was not done. Therefore, the appropriation to the American Legion, department of Alabama, is constitutionally deficient.

The question that remains is whether the appropriation to the American Legion, department of Alabama, can be severed from Act No. 80-121 or whether the entire Act must fall.

The Act in question contains a severability clause. We must decide whether the remaining portions of Act No. 80-121 can be given effect without the invalid provisions. In order to resolve this issue, it is necessary to consider the primary focus of the Act, that is, its purpose. If the primary purpose of the Act was to provide a source of revenue for the American Legion, department of Alabama, the entire Act must fall. If, however, the primary purpose of the Act was to regulate wrestling, sparring and boxing and the provisions in the Act can still operate after excising the unconstitutional part, the remaining portions of the Act can remain in effect.

We believe that the primary purpose of the Legislature in enacting the 1980 law was to continue the regulation of boxing, sparring and wrestling. In 1939, the Alabama Legislature enacted Act No. 489 which prohibited boxing, sparring and wrestling matches and exhibitions except those regulated, supervised and controlled by the Alabama Boxing and Wrestling Commission. The 1939 commission was appointed by the governor. Permits and licenses were required as in the 1980 Act. No reference whatsoever to the American Legion, department of Alabama, appeared in the 1939 Act. See, 1939 Acts of Alabama, No. 489. The designation of the American Legion, department of Alabama, as recipient of a portion of the monies collected from the regulation of boxing, sparring and wrestling occurred in 1973. The Alabama Legislature in that year amended the 1939 Act to provide for the payments to the American Legion. See, 1973 Acts of Alabama, No. 1241. These amendments passed the Legislature with the necessary two-thirds vote. See, 1973 Alabama House Journal, at 5193; 1973 Alabama Senate Journal at 2458.

It is apparent that the Legislature, after considering the problems in the operation of the Boxing and Wrestling Commission, acted on the recommendation of the Sunset Committee (see, Code 1975, §§ 41-20-1 through -16) and revised the commission. The Legislature by enacting Act No. 80-121 sought to restructure the commission regulating boxing, sparring and wrestling through the establishment of a state athletic commission. The establishment of a new commission was well within the power of the Legislature and is constitutional. This Court should not contravene the clear intent of the Legislature, which is to regulate boxing, sparring and wrestling. We cannot, however, determine whether the Legislature would adjust the dollar amounts for permits, licenses and taxes established for the regulation of boxing, sparring and wrestling in light of our holding that the procedure of designating one-half of these monies to the American Legion, department of Alabama, is unconstitutional. Classifying and fixing the measure of a regulatory tax are legislative and not judicial functions. The Legislature may decide the amount of money to be charged for permits, licenses and taxes and to distribute such funds in accord with its determination.

The remaining issues raised by appellees concerning Art. I, § 22, and Art. IV, § 93, of the Alabama Constitution need not be decided in view of our decision on the principal issues considered herein.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

All Justices concur.

      . The designation “department of Alabama” is a classification of the Alabama membership by the national organization; the organization is not an auxiliary of the State of Alabama.


author:
EMBRY, Justice.
      TORBERT, Chief Justice

text:
    POLLUTION CONTROL-WALTHER, INC. & C-E Walther, Inc. v. Louis E. BELZER, et al. Louis E. BELZER, et al. v. POLLUTION CONTROL-WALTHER, INC., et al.
    79-936, 79-949.
    Supreme Court of Alabama.
    Oct. 2, 1981.
    Rehearing Denied Nov. 6, 1981.

      Hobart A. McWhorter, Jr. and Scott M. Phelps of Bradley, Arant, Rose & White, Birmingham, for appellants.
    Sydney Lavender and Alan W. Heldman of Johnston, Barton, Proctor, Swedlaw & Naff, Birmingham, for appellees.
   EMBRY, Justice.

These appeals are from a judgment, made final by entry of a Rule 54(b), ARCP, order, declaring and imposing a constructive trust on funds accrued to defendants-employers’ Salaried Employees Incentive Bonus Plan in favor of the plaintiffs-employees. We affirm.

Pollution Control-Walther, Inc. (PCW) was organized in 1972 to design, fabricate, and construct precipitators for removing pollutants from smoke and furnace discharges. In January of 1976, PCW posted written notice to its salaried employees of a Salaried Employees Incentive Bonus Plan (the Bonus Plan). The notice stated the terms of the plan in four typewritten pages. It stated that PCW recognized that it “benefits materially from the efforts of its salaried employees and recognizes its need for an incentive to stimulate continued growth [of the company]. . . . ” The objective stated was “to make the best place to work and the maximum profits from every opportunity”

For “each project closed during the accounting year” an independent certified public accounting firm was to make a statement of profit and submit it to the Executive Committee (of the Board of Directors of the employer). The Bonus Plan detailed the schedule and procedure by which that committee would determine the bonus and gave, as an example, a schedule of profit percentage to be contributed to the bonus fund monies derived from the TVA Widows Creek project, which project began in 1974 and was declared to be the first project subject to the Bonus Plan.

The Bonus Plan description ended, however, with the following qualifications:

Based on the development of the incentive bonus fund, distribution will be made in a discretionary manner based on salaries, job assignment, and performance with regard to the project concerned. No employee, participant, or other person shall have any claim or right to be granted an award under this plan.
This plan shall be administered by the Executive Committee which shall have full power and authority to interpret, construe and administer this plan and any part thereof and the Compensation Committee’s interpretation and constructions thereof, and actions thereunder, shall be binding and conclusive on all persons for all purposes.
This plan may be amended, suspended, terminated or reinstated in whole or part by the Executive Committee.

In March 1976 PCW began crediting an “accrued bonuses” account and correspondingly debiting a “bonus expense” account.

On 18 April 1977, PCW sold its assets to Combustion Engineering, Inc., which operated C-E Walther, Inc. (CEW) as a wholly-owned subsidiary. CEW assumed all rights and duties of PCW and continued to post credits to the accrued bonuses account. That account stood at $458,000 as of the asset transfer; until 25 October 1977, when the Executive Committee of CEW voted to terminate the Bonus Plan, the accrued bonus account stood at $597,000. It was then debited, as of 31 December 1977, to a zero balance with two offsetting credits, one against the bonus expense account in the amount of $139,000 accrued under CEW, and the other against a “license account” in the amount of $458,000 accrued under PCW. No bonuses had ever been paid under the Plan.

On 15 February 1978, Louis Belzer and sixteen other salaried employees of PCW filed an action seeking a declaration that PCW, its successors and assigns, held the funds in the Bonus Plan in trust for the benefit of the plaintiffs and all other persons in an asserted class. The trial court, after a determination hearing, declined to certify the claims as a class action but allowed a large number of other individuals to join the action as plaintiffs. CEW was later added as a defendant; the plaintiffs also added counts sounding in contract, fraud, for work and labor done, and conversion, but the equitable claim regarding the constructive trust was the only one tried and the subject of the Rule 54(b) judgment from which this appeal is taken.

PCW and CEW defended, and this appeal focuses chiefly, on the grounds that the conditions set out in the Bonus Plan had not been satisfied and the entries in the accrued bonuses account do not represent a segregated fund that could constitute a trust res. Regarding the first contention, the main thrust of the argument is that none of the projects in question had been completed and the Executive Committee had never exercised its discretionary functions by establishing a bonus factor and approving bonus payments to individual employees.

Upon consideration of the record in its entirety, we find no merit in the companies’ contentions but, to the contrary, an ample basis upon which to affirm the trial court’s judgment favorable to the employees.

There is sufficient evidence of record that the employees relied upon the Bonus Plan. As an example, Rodney Lewis testified he was told during his interview for a job at PCW that the Bonus Plan was offered in lieu of a retirement plan, and at a point in time after he came to work for PCW the manager of projects told him he had accumulated three thousand dollars under the Plan. Peter Meredith, hired as administrative manager in 1973, testified he was told in late 1974 that a bonus plan would be offered as an incentive for employees to work hard for the salary they were being paid to make the company successful. Further, that he was told to point out the Bonus Plan during hiring interviews, that he was denied a raise but told that “once we all participated in this plan, we would all receive money that would overcompensate us for our hard times now.”

PCW made other assurances to its salaried employees that sums were accumulating in the Bonus Plan which would be paid out when contracts were completed. Numerous employees talked to those employed in the accounting department, and the Vice-President for Finance, and were told generally or specifically that money would be coming to them because of the Plan. The Proxy Statement issued by PCW in March 1977 included a note that a percentage of income before taxes, realized on certain contracts completed during the fiscal year, would be set aside in a fund for distribution to participants; the amount through 31 March 1976 being $121,000, and for the following nine months, $206,000. These sums plus the $131,000 accrued in the first three months of 1977 constituted the $458,000 upon which the trust was imposed by the trial court. Furthermore, bookkeeping entries specifying bonuses accrued to individual employees were begun under the plan and completed, by order of the trial court, after entry of the judgment establishing the trust.

PCW and CEW argue that no bonuses were due under the Plan because the projects were not completed when CEW terminated the Plan in November of 1977. The project managers for each project testified, however, that each job had been invoiced, paid, and in some cases, put on stream by the customer before this date. Most of the contracts were not closed because testing remained to be done; while this could perhaps be construed as “incomplete” under the Plan itself, under the evidence the court below could properly find that the jobs were substantially complete. The employees had done the work motivated by the Plan and CEW had arbitrarily cancelled the plan as to projects that had been performed under the Plan incentive.

We have no trouble disposing of the argument made by PCW and CEW that there was no trust res. In support of this contention, they rely on the decision of this court in Ex parte Morton, 261 Ala. 581, 75 So.2d 500 (1954), for the proposition that the accounting records do not represent a fund upon which the court may impose and establish a trust. In that case, this court held a constructive trust could not be imposed upon credit extended by a bank to other parties. The facts here differ: PCW’s accounting records corresponded to actual funds received from its customers. It cannot rely on the fact that it failed to segregate funds in a separate account, which it represented it would do. There were indeed funds coming in; witnesses testified that invoices had been paid. In fact, the • “Gross Margin” (roughly corresponding to profit) realized on the eight projects in question, more than doubled: from nearly four million dollars in the original budgets to well over eight million dollars in the estimated final budget.

Under these and other facts developed below, the trial court’s judgment declaring and imposing a constructive trust should and must be allowed to stand.

... A constructive trust is a creature of equity which operates to prevent unjust enrichment. A constructive trust will be found when property has been either acquired by fraud, or where in the absence of fraud it would not be equitable to allow it to be retained by him who holds it. Sims v. Reinert, 285 Ala. 658, 235 So.2d 802 (1970); Putnam v. Putnam, 274 Ala. 472, 150 So.2d 209 (1963). The issue of whether or not a constructive trust results is one of fact and as stated previously where the evidence is heard ore tenus the trial court’s finding of fact will not be disturbed unless it is clearly erroneous or manifestly unjust. . . .

In re Estate of Moore, 349 So.2d 1107, 1108 (Ala.1977). See also Cherpes v. Cherpes, 279 Ala. 346, 185 So.2d 137 (1966).

The judgment may be enforced against CEW because it assumed PCW’s liabilities with full knowledge of the Bonus Plan accruals. The trial court did not, however, award the $139,000 which accrued to the plan under CEW. Because the order does not mention this sum and the employees cross-appeal from the denial thereof, we must remand for consideration of this issue. If the trial court finds that CEW effectively undertook to continue the Bonus Plan established by PCW, the trust fund should be increased appropriately. If, on the other hand, the trial court does not find that equity dictates enforcement of the trust for the period of CEW’s management, the relief granted in the .prior order is all to which plaintiffs are entitled.

Accordingly, the judgment below is due to be affirmed in part and reversed and remanded in part for further proceedings in conformity with this opinion.

AFFIRMED AS TO THE APPEAL, REVERSED AS TO THE CROSS-APPEAL AND REMANDED.

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

TORBERT, C.J., dissents.

TORBERT, Chief Justice

(dissenting).

I dissent. A constructive trust arises when the legal title to property is obtained by someone in violation of an express or implied duty to another who is equitably entitled thereto and when the property thus obtained is held hostile to the beneficiary’s rights of ownership. See, Fowler v. Fowler, 205 Ala. 514, 516, 88 So. 648 (1921). The defendant must have been under an equitable duty to give the plaintiff the benefit of the property, the effect being to place the defendant in the same position as an express trustee over the property with the plaintiffs being the beneficiaries of a trust containing the disputed property. See, G. Bogert, The Law of Trusts and Trustees, § 471 (Rev.2d ed. 1978). In establishing a constructive trust a court is applying the incidents of an express trust for equitable purposes. See, G. Bogert at § 471. One primary requirement for the establishment of a constructive trust is that the plaintiff must identify specific property as the res of the trust to which he is entitled. Mere breach of contract does not entitle plaintiff to a constructive trust. G. Bogert at § 471.

In McKey v. Paradise, 299 U.S. 119, 57 S.Ct. 124, 81 L.Ed. 75 (1936), the Supreme Court reviewed a case where a manufacturing company agreed to make certain deductions from the wages of its employees and to pay over such amounts deducted to an employee welfare association. The company accurately recorded the deductions on its books. Later the company went into bankruptcy. The Supreme Court found no adequate basis for the conclusion that a trust existed. The relationship involved was that of employer and employee evolving into a debtor-creditor relationship rather than a trustee-beneficiary relationship. In McKey, as in the case discussed here, there was no accumulation on designation of any fund containing property which could constitute the res of a trust. “There was no fund segregated or set up by special deposit or in any manner.” 299 U.S. at 122, 57 S.Ct. at 125. The assets of the company in McKey, like the assets of the defendant involved in this case, remained as they were before, general assets. See, 299 U.S. at 122, 57 S.Ct. at 125.

In Ex parte Morton, 261 Ala. 581, 75 So.2d 500 (1954), this Court held that in order to enforce a constructive trust there must have been a tangible form of identifiable property before the res of a constructive trust can be determined to exist. 261 Ala. at 592-93, 75 So.2d 500. Plaintiffs have not established that tangible property was placed in a fund or otherwise set aside to meet the obligations of the alleged employment contracts. All plaintiffs have shown is that an accounting entry was made to recognize the existence of the alleged contractual obligations of defendants. This is not enough to establish the res of a trust. Therefore, I would hold that an accounting entry without more cannot establish the existence of tangible property in order to become the res for a constructive trust.

The fact that the failure to pay proceeds from an incentive bonus plan breached a contractual obligation cannot transform the defendant into a trustee. I would reverse.


author: BEATTY, Justice. FAULKNER, Justice

text:
    Dalton BRYANT v. CEAT S.p.A.
    80-234.
    Supreme Court of Alabama.
    Oct. 2, 1981.
    Rehearing Denied Nov. 6, 1981.

      Stephen D. Heninger of Hare, Wynn, Ne-well & Newton, Birmingham, for appellant.
    Juliet G. St. John of St. John & St. John, Cullman, for appellee Ceat S.p.A.
   BEATTY, Justice.

Plaintiff, Dalton Bryant, appeals from the order of the Circuit Court for Morgan County which granted the motion of defendant, Ceat S.p.A., an Italian corporation, for summary judgment on grounds that the contracts of the corporation with this state are insufficient to support in personam jurisdiction under our long-arm statute, Rule 4.2, ARCP. We reverse and remand.

On July 12, 1976, Ralph Speegle took his truck to plaintiff Bryant’s welding shop to have it repaired. While Bryant was evaluating the repairs needed, he laid a clipboard on the tire. The tire exploded, severely injuring Bryant. The evidence indicates that the tire was recapped at least twice before the explosion. Bryant filed suit seeking damages against Speegle and numerous parties, including Ceat S.p.A. (Ceat), the Italian manufacturer of the tire.

The only issue on this appeal is whether in personam jurisdiction over Ceat may be asserted consistently with the Due Process Clause of the Fourteenth Amendment. Alabama’s long-arm statute is codified in Alabama Rule of Civil Procedure 4.2. That statute for substituted service has been found to extend to the permissible limits of due process. Sells v. International Harvester Co., Inc., 513 F.2d 762 (5th Cir. 1975); Semo Aviation, Inc. v. Southeastern Airways Corp., Ala., 360 So.2d 936 (1978).

The Supreme Court of the United States recently reaffirmed the principle that a forum state may exercise in personam jurisdiction over a nonresident defendant so long as there are such minimum contacts that the suit does not offend “traditional notions of fair play and substantial justice.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)). Whether sufficient contacts exist so that the maintenance of a suit in Alabama does not offend reasonableness and fair play is to be determined on a case by case basis. Perkins v. Benquet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). The facts of the present case support our finding that Ceat’s contacts are sufficient to subject it to in personam jurisdiction in Alabama.

Although Ceat has no offices, employees or property in the United States, its wholly owned subsidiary, Ceat Representative Office, Inc. (Ceat Representative) has offices in New York and Ohio. The four employees of Ceat Representative solicit sales to wholesalers in the United States of tires manufactured under Ceat’s own brand name. The tires are sent directly from Italy to the wholesalers.

Three corporations in the United States have private brand contracts with Ceat. One is located in Massachusetts, one in New York, and the other in California. These corporations deal directly with representatives of Ceat in Italy, not with Ceat Representative.

In 1974 Ceat, pursuant to its contract with the Massachusetts corporation, Dud-dy’s, Inc., manufactured the tire in question along with others of the same type. The brand name of the tire is “Tyrino,” indicating the tire was produced exclusively for sale by Duddy’s, Inc. The shipment records for that specific type tire to Duddy’s in 1974 show that 1,224 tires were destined for distribution by Duddy’s to thirteen different locations in nine different states. Although Ceat denies any knowledge of the subsequent movement of those tires, John H. Porosky, a vice president of Ceat Representative, testified that he knew Duddy’s was a nationwide concern with tire sales of twenty million dollars per year. In 1973, Ceat sold over 5,000 “Tyrino” tires to Dud-dy’s for distribution in the United States, and in 1974 over 2,000.

The most important fact in this case and the one which clearly establishes Ceat’s contacts with this state is that Ceat’s sales records show that in 1972 invoices for 4,300 tires were sent to David Tire Company in Birmingham, Alabama, presumably on order from Duddy’s. In 1973, an additional 9,284 tires were invoiced to David Tire Company. Ralph Speegle, in 1974, purchased the tire in question in Priceville, Alabama.

Despite facts indicating to the contrary, Ceat claims that it was not “foreseeable” that it would be subject to suit in Alabama. Ceat relies upon the recent clarification by the Supreme Court of the United States on the degree of foreseeability necessary to determine whether the exercise of in per-sonam jurisdiction by a state is permissible. In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Court stated that in order to find the foreseeability element of due process the defendant’s conduct within the state must be such that he “reasonably anticipates being haled into court there.” Id. at 297, 100 S.Ct. at 566. A comparison of the facts in World-Wide Volkswagen with those in the instant case will illustrate that Ceat’s conduct met the foreseeability criterion of due process.

In World-Wide Volkswagen, New York residents who had purchased an automobile from a New York retailer were injured in Oklahoma while driving to a new home. The Court held that due process would not permit Oklahoma to assert jurisdiction over the New York retailer of the automobile or New York wholesaler who sold to retailers in New York, Connecticut and New Jersey. The Court pointed out that the “foreseeability” element of due process was lacking. There was no evidence of record that any automobile distributed by World-Wide was sold to retail customers outside the tri-state area. In other words, there was no evidence of a sale to a retailer in Oklahoma, the state where the injury occurred.

The facts in the instant case differ materially from those in World-Wide Volkswagen. Besides the injury which occurred in Alabama to an Alabama resident, this case has sales of Ceat’s tires made by a wholesaler to an Alabama retailer. An Alabama consumer purchased the tire in question in Alabama. Thus, Ceat established “contacts” with this state and should have been able to reasonably anticipate being haled into court here.

The plaintiffs in World-Wide Volkswagen had also sued the German manufacturer of the automobile, Audi, which never contested jurisdiction. Nonetheless, through dictum, the Court imposed jurisdiction upon the German manufacturer when it stated:

Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other states, it is not unreasonable to subject it to suit in one of those states if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum state does not exceed its powers under the due process clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state. [Emphasis added.] [444 U.S. at 297-298, 100 S.Ct. at 567.]

The facts of the present ease fall within the above dictum which clearly recognizes that jurisdiction over a foreign corporation such as Ceat, an Italian manufacturer, is constitutional. The record shows that Ceat, in addition to the private brand contracts with wholesalers in Massachusetts, New York and California, maintains sales of its tires in numerous other states. In any event Ceat, by selling its tires to wholesalers without restrictions, must have been aware that further distribution to retailers would take place. Thus, as described in World-Wide Volkswagen, Ceat “delivered] its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state.” Through the wholesaler of its tires, Ceat, at least indirectly, served the market for its product in Alabama and “it is not unreasonable to subject it to suit” in this state.

The Fifth Circuit, in Oswalt v. Scripto, Inc., 616 F.2d 191 (5th Cir. 1980), relied upon the World-Wide Volkswagen holding and dictum when it upheld jurisdiction under the Texas long-arm statute over a Japanese manufacturer which sold lighters to a United States distributor, Scripto, Inc., with knowledge that Scripto sold the lighters to a nationwide market. Ceat claims that the case at bar is distinguishable from Oswalt because Ceat lacked knowledge that Dud-dy’s is a nationwide concern. Ceat was aware, however, that Duddy’s did “serve the market for its product in other states.” Thus, according to the World-Wide Volkswagen dictum, a finding of service by Dud-dy’s to a nationwide market is not essential for the imposition of jurisdiction over Ceat.

This Court has sustained jurisdiction over foreign manufacturers in other products liability cases. In Mann v. Frank Hrubetz & Co., Inc., Ala., 361 So.2d 1021 (1978), we held that it does not violate due process to require the manufacturer to defend a products liability suit in that state (Alabama) where the accident occurs. Any hardship in defending the product in Alabama is an attribute of foreign trade. The facts of Mann and the cases discussed in that opinion, particularly Sells v. International Harvester Co., 513 F.2d 762 (5th Cir. 1975); Duple Motor Bodies, Ltd. v. Hollingsworth, 417 F.2d 231 (9th Cir. 1969); and Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961), support the long-standing proposition that it is not “offensive to fair play or substantial justice or an undue burden on foreign trade to require a manufacturer to defend his product wherever he himself has placed it, either directly or through the normal distributive channels for trade.” Mann, 361 So.2d at 1024. See also Schoel v. Sikes Corp., 533 F.2d 930 (5th Cir. 1976).

We hold, therefore, that the trial court erred in granting the motion of the defendant Ceat for summary judgment based upon lack of jurisdiction over the person, and we remand the cause to that court for further proceedings not inconsistent with this opinion.

REVERSED AND REMANDED.

MADDOX, JONES, ALMON, SHORES and ADAMS, JJ., concur.

FAULKNER, J., with whom TORBERT, C. J., and EMBRY, J., concur, dissents.

FAULKNER, Justice

(dissenting).

I dissent. The majority’s opinion that Ceat is subject to in personam jurisdiction is incorrect for two reasons. First, the record contains no evidence whatsoever of Ceat’s present contacts with the United States, this region, or this state. Second, the contacts of Ceat with this state via an independent contractor, Duddy’s, over eight years ago are insufficient to justify exercising jurisdiction over Ceat.

A plaintiff’s allegation of jurisdiction is generally sufficient to sustain the forum’s power over a defendant. Nevertheless, once jurisdiction is challenged, the plaintiff bears the burden of establishing a nonresident defendant’s contact with the state. Rosemound Sand & Gravel Co. v. Lambert Sand & Gravel Co., 469 F.2d 416 (5th Cir. 1972). Discovery techniques are available to explore the extent of a defendant’s contacts with the forum state. See Budde v. Ling-Temco-Vought, Inc., 511 F.2d 1033 (10th Cir. 1975); H. L. Moore Drug Exchange Inc. v. Kline & French Laboratory, 384 F.2d 97 (2nd Cir. 1967); Associated Metals & Minerals Corp. v. S. S. Geert Howaldt, 348 F.2d 457 (5th Cir. 1965). Plaintiff simply did not sufficiently explore Ceat’s contacts with the forum. The only evidence cited by the majority of Ceat’s present contacts is the testimony of John H. Porosky that he “believed” Duddy’s to be a nationwide concern. Porosky is an employee of a subsidiary of Ceat and is not responsible for private brand contracts of Ceat. Porosky is not privy to the business records of Duddy’s nor did he attempt to introduce any business records into evidence. There is no evidence of where tires are distributed in the United States, where retailers of Ceat tires are located, or whether any Ceat tires have been sold in Alabama in the past eight years. Ceat and Duddy’s may be nationwide concerns, but this Court can only rely on the evidence presented in the record. We may not properly assume that a defendant has contacts with the state.

The Due Process Clause serves the primary function of protecting a defendant against the burden of litigating in an inconvenient forum. Although the permissible limits of due process have expanded in recent years, “it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts.” Hanson v. Denckla, 357 U.S. 235, 251, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 858 (1958). The Due Process Clause “gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

The majority fails to address the question of when jurisdictional contacts are measured. I believe the Due Process Clause of the Constitution is offended by holding that a defendant is subject to jurisdiction on the basis of its contacts eight years prior to institution of a suit against it. The principal contacts relied on by the majority to justify the assertion of jurisdiction over Ceat are contacts occurring eight years ago. The majority notes that Ceat sold tires to Duddy’s in 1974, who distributed to retailers in nine states. The only tires sold in Alabama by Duddy’s were sold in 1972 and 1973. Clearly, Ceat could not foresee being liable to suit in Alabama eight years later, a period beyond the normal life of a tire. By foregoing the privilege of conducting activity in Alabama for eight years, Ceat should gain assurance that it would not be liable to suit in Alabama.

Ceat has no offices, employees or property in the United States. Plaintiff failed to prove that Ceat has any contacts with the forum. Due process requires that Ceat be protected from the burden of litigating in Alabama, a state which has no constitutionally cognizable contacts with Ceat.

I would therefore affirm the trial court’s dismissal of the action against Ceat on the basis of a lack of in personam jurisdiction.

TORBERT, C. J., and EMBRY, J., concur.

      . We do not address the propriety of granting a motion for summary judgment, Rule 56, ARCP, as compared to a Rule 12(b)(2), ARCP, motion to dismiss for lack of jurisdiction over the person.