author: MADDOX, Justice. TORBERT, Chief Justice

text:
    SANJAY, INC., a corporation v. DUNCAN CONSTRUCTION CO., INC., an Alabama corporation, et al.
    82-707.
    Supreme Court of Alabama.
    Dec. 9, 1983.
    Rehearing Denied Jan. 27, 1984.
    Rodney A. Max and Douglas J. Centeno of Denaburg, Schoel, Meyerson, Ogle, Zarz-aur & Max, Birmingham, for appellants.
    J.A. Keller of Keller, Cochran & Pitts, Florence, for appellee Duncan Const. Co., Inc.
    Donald H. Patterson of Patterson, Weathers & Jester, Florence, for appellee Sheffield Motel Enterprises, Inc.
   MADDOX, Justice.

This is an appeal from a summary judgment in favor of the plaintiff. The issue in this case is whether a foreign corporation can recover damages upon a cause of action based on contract if the foreign corporation was not qualified to do business in Alabama at the time the contract was made, but qualified before the performance of the contract was complete. The trial court held the foreign corporation could not recover damages. We affirm.

The trial court’s findings are pertinent here:

“(a) Duncan Construction Co., Inc., as Contractor, and City of Sheffield, Alabama (defined for the purposes of such contract as Sheffield Motel Enterprises, Inc.), as Owner, made and entered into an agreement dated December 3, 1980, for the construction of a motel in Sheffield, Colbert County, Alabama.
“(b) Under the terms of the contract dated December 3, 1980, (referred to in (a) above), Duncan Construction Co., Inc. agreed to engage Sanjay, Inc. for project manager for the construction of a motel in Sheffield, Alabama (Holiday Inn)— “the project.”
“(c) Thereafter on January 16, 1981, Duncan Construction Co., Inc. made and entered into a contract with Sanjay, Inc. for the furnishing of certain work, labor and materials in and about the construction of said motel in Sheffield, Alabama. In such contract Duncan Construction Co., Inc. is described as ‘Contractor’ and Sanjay, Inc. is described as ‘Subcontractor.’
“(d) All work and labor contemplated in both of said contracts mentioned above was for the construction of a motel in Sheffield, Alabama, i.e. such contracts were to be wholly performed within the State of Alabama.
“(e) At all times hereinabove mentioned, Sanjay, Inc. was a foreign corporation not qualified to do business in the State of Alabama. Sanjay, Inc. was a foreign corporation not qualified to do business in the State of Alabama at the time it commenced furnishing work, labor and materials in and about the construction of said motel in Sheffield, Alabama. Sanjay, Inc. did not qualify to do business in the State of Alabama until September 18, 1981, more than eight (8) months after it commenced furnishing work, labor and materials in and about the construction of such motel. [We would only add the contract continued to be performed until February of 1982, as shown by affidavits of the appellant.]
“The Court makes no findings of fact as to the following:
“(i) whether or not Sanjay, Inc. has any standing to sue under that contract dated December 3, 1980; and
“(ii) whether or not either of said contracts was executed within or without the State of Alabama;
for that it affirmatively appears that the subject matter of both contracts and the work contemplated thereunder were to be wholly performed within the State of Alabama and Sanjay, Inc. was a foreign corporation not qualified to do business in the State of Alabama on the date of the execution of said contracts and was not so qualified to do business in the State of Alabama when it commenced furnishing work, labor and materials in and about the construction of said motel in Sheffield, Alabama.
“Sanjay, Inc. has argued orally and in brief that the prefabricating of materials outside the State of Alabama for the sole purpose of ultimately being used in the construction of a motel in Alabama and the performance of accounting and engineering functions outside the State of Alabama necessitated by the performance of a contract to build a motel in the State of Alabama take this case outside the rule of law hereinafter set forth. The Court does not agree. If such were the ease, the public policy of this state as expressed in our Constitution and statutes could be flaunted by virtually any foreign corporation in the construction business. The Court takes judicial notice that many component parts of any structure to be erected in the State of Alabama are often fabricated outside the State of Alabama and any foreign corporation doing construction business in the State of Alabama will perform accounting and engineering functions outside the state. If such prefabricating and performance of ministerial functions outside the State of Alabama had the effect argued by Sanjay, Inc., the public policy of this state would be frustrated and defeated.
“Our appellate courts have consistently ruled that foreign corporations doing business in this state without lawful qualification cannot use our courts to enforce [their] contracts. Such interpretation applies whether the contract is void because made in this state under Section 10-2A-247 or whether made outside the state. Where the contract is to be performed in this state, as in the case sub judice, regardless of where entered into, and in the performance the non-resident corporation must engage in business in this state, although the contract is valid, the public policy of this state, as evidenced by the Constitution (Ala. Const., Art. XII, § 232), and statutes, compels the courts of this state to refuse their aid to such offending corporation in the enforcement of such contract or recovering benefits accruing thereunder. This Court need not consider whether or not any contract was void under § 10-2A-247 to reach the result herein set forth.”

Sanjay, Inc., the appellant, filed a mechanic’s lien in the probate court of Colbert County against Duncan Construction Company, the appellee, for $270,000. After this action was filed, Duncan filed a declaratory judgment action in the circuit court of Colbert County naming Sanjay, the City of Sheffield, and Sheffield Motel Enterprises, Inc. as defendants. Duncan sought to quash the mechanic’s lien and to recover $130,000 allegedly paid by Duncan to San-jay mistakenly, and sought a declaration that the contract between Duncan and San-jay was unenforceable and void.

Sanjay answered, asserted a counterclaim seeking enforcement of the lien, filed a cross-claim against the City of Sheffield, and joined Aetna Insurance Co. (the mortgagee) and Sheffield Motel Enterprises, Inc. as third-party defendants. Duncan and Sanjay each filed motions for summary judgment. After a hearing on August 20, 1982, the trial court granted Duncan’s motion and dismissed Sanjay’s counterclaim as based upon a void and unenforceable contract. On January 18, 1983, the City of Sheffield filed a motion for summary judgment. The trial court entered a summary judgment in favor of all parties and against Sanjay on the original complaint on March 24, 1983. Sanjay appealed from the summary judgment in favor of Duncan.

In its brief here, as at the hearing below, Sanjay candidly concedes that it was not qualified to do business in Alabama before and at the time the contracts were made. Sanjay did not qualify to do business in Alabama until eight months after work began on the motel, but did qualify approximately five months before the dispute arose.

First, we point out the standard of review in summary judgment cases: there must not be a genuine issue as to any material fact and the moving party must be entitled to summary judgment as a matter of law. Trust Company Bank v. State of Alabama, 420 So.2d 10 (Ala.1982); Reed v. Ray, 409 So.2d 814 (Ala.1982); Isbell v. City of Huntsville, 295 Ala. 380, 330 So.2d 607 (1976); Ala.R.Civ.P. 56(c). This is the same standard which the trial court must apply. Long v. Banker’s Life and Casualty Co., 294 Ala. 67, 311 So.2d 328 (1975).

Sanjay argues that issues of fact were in dispute. It claims that the situs of the making of the contract was in dispute and that there were some questions about the place of performance. Of course, material issues of fact must not be in dispute, Trust Company Bank, supra, but as the trial court correctly pointed out, it was not necessary to determine where the contract was executed, Boles v. Midland Guardian Co., 410 So.2d 82 (Ala.Civ.App.1982); Citizens National Bank v. Bucheit, 14 Ala.App. 511, 71 So. 82 (1916); see also Lee v. Great Northern Nekoosa Corp., 465 F.2d 1132 (5th Cir.1972); the only issue was the enforceability of the subcontract agreement. As the Bucheit court stated:

“Where the contract is to be performed in this state, although not entered into here, and in the performance the non-resident corporation must engage in business in this state, although the contract is valid, the policy of the state, as evidenced by the Constitution and statutes, compels the courts of the state to refuse their aid to such offending corporation in the enforcement of such contract or recovering the benefits accruing thereunder.”

Bucheit, supra, 14 Ala.App. at 514, 71 So. at 86 (1916).

The Bucheit court cited Alabama Western Railroad Company v. Talley-Bates Construction Co., 162 Ala. 396, 50 So. 341 (1909). In Talley-Bates, the Court opined:

“The statute requires that an instrument in writing shall be filed with the Secretary of State before engaging in or transacting any business in this state. Its purpose has been stated. That purpose is not to be accomplished by a filing at the pleasure of the corporation, or when it may be to its interest to appeal to the courts of this state. We may safely affirm that nothing short of a compliance before any business is engaged in or transacted in this state satisfies either the literal requirement of the statute and Constitution or their policy.” (Emphasis added.)

Talley-Bates, supra, 162 Ala. at 408, 50 So. at 344 (1909).

A foreign corporation cannot enforce a contract which is to be performed in Alabama if the foreign corporation has failed to qualify to do business in Alabama on or before the date the contract is made. The acts of Sanjay constituted doing business in Alabama. Boles v. Midland Guardian Co., supra; Kentucky Galv. Co., Inc. v. Continental Gas Co., Inc., 335 So.2d 649 (1976); see Talley-Bates, supra, wherein the foreign corporation attempted to avoid the prohibition by claiming it was not performing the contract, but had hired subcontractors to build a railroad in Alabama.

Sanjay next argues that the conduct of the appellee, Duncan, brings this case within the equity exception within Code 1975, § 10-2A-247(a):

“All contracts or agreements made or entered into in this state by foreign corporations which have not obtained a certificate of authority to transact business in this state shall be held void at the action of such foreign corporation or any person claiming through or under such foreign corporation by virtue of said void contract or agreement; but nothing in this section shall abrogate the equitable rule that he who seeks equity must do equity....”

This Court has previously spoken regarding this so-called equity exception of Code 1975, § 10-2A-247, in First Bank of Russell County v. Wells, 358 So.2d 435 (Ala.1978), wherein Justice Shores, speaking for the Court, stated:

“As this Court said in Jones v. Americar, Inc., 283 Ala. 638, 643; 219 So.2d 893, 896 (1969): ‘We think that which is prohibited in the Alabama statutes are suits on contracts by unqualified corpora-tions_’ We would add — and only such suits. This Court has consistently held that foreign, nonqualified corporations are not denied enforcement of property rights by our statute.” (Emphasis added.)

First Bank of Russell County, supra, 358 So.2d at 437 (Ala.1978); see Calvert Iron Works, Inc. v. Algernon Blair, Inc., 284 Ala. 655, 227 So.2d 424 (1969).

' This provision in the statute does not alter the law that an unqualified foreign corporation cannot recover on contract. As was said of the action in C.C. Products, Inc. v. Premier Industrial Corp., 290 Ala. 179, 275 So.2d 124 (1972), any way you slice it, the action in this suit was ex contractu.

Sanjay next argues that because it qualified to do business during the performance of the contract, it is entitled to recover on the contract. This argument is based upon language found in Day v. Ray E. Friedman and Co., 395 So.2d 54 (Ala.1981). The Day court relied upon Montgomery Traction Co. v. Montgomery Light and Water Power Co., 229 F. 672 (5th Cir.1916). In Day, supra, a commodities broker, not qualified to do business in Alabama at the time an employment contract was signed, brought suit against an employee on a promissory note signed by its employee after the broker had qualified to do business. The trial court granted summary judgment in favor of the foreign corporation and the employee appealed. On original hearing, we affirmed, in part, reversed, in part, and remanded. An application for rehearing was granted. The issue we were concerned with in Day, supra, was whether there was a scintilla of evidence in favor of the non-movant which would make summary judgment improper. We held that summary judgment was not proper based on several grounds. We must admit that there is language in Day, supra, which would suggest that a foreign corporation which qualifies to do business in this state during the performance of a contract is entitled to recover on the contract, but Day should be carefully read in view of the particular facts of that case. The law of this state is that a foreign corporation which has not qualified to do business in Alabama at the time of the contract cannot use Alabama courts to enforce that contract. In Sea Scaping Const. Co., Inc. v. McAtee, 402 So.2d 919 (Ala.1981), this Court stated the rule as follows:

“The bar created by the Constitution and statutes has been upheld when the pleadings and evidence showed that the foreign corporation had failed to comply with this state’s laws of qualification ‘before and at the date of the contract....’ Cable Piano Co. v. Estes, 206 Ala. 95, 89 So. 372 (1921). This position has been affirmed repeatedly. See, e.g., Calvert Iron Works, Inc. v. Algernon Blair, Inc., 284 Ala. 655, 227 So.2d 424 (1969); Computaflor Company, Inc. v. N.L. Blaum Const. Co., 289 Ala. 65, 265 So.2d 850 (1972); Birmingham Terminal Associates, Inc. v. United Produce and Products Equipment Co., Inc., 289 Ala. 80, 265 So.2d 863 (1972); C & C Products, Inc. v. Premier Industrial Corp., 290 Ala. 179, 275 So.2d 124 (1973) (such a contract does not give rise to any implied legal duty). See also Foxco Ind., Ltd. v. Fabric World, Inc., 595 F.2d 976 (5th Cir.1979).
“... [The Alabama view is] that compliance must occur when the contract was made.”

Sea Scaping Const. Co. v. McAtee, supra at 921.

In Day there were several reasons, not pointed out in the opinion, which authorized the foreign corporation to sue in Alabama courts. The contract sued upon was a promissory note executed by an employee of the foreign corporation, and the note was executed after the corporation had qualified to do business in Alabama. Some of the money Day owed the foreign corporation “consisted of debts Day incurred as a result of personal losses while trading in commodities_” 395 So.2d at 56. In view of the particular facts in Day, the result this Court there reached is sound, because in some instances a foreign corporation may use Alabama courts to enforce agreements for business performed in this state made by it at a time when it had not qualified to do business. Cf. Kentucky Galv. Co., Inc. v. Continental Gas Co., Inc., 335 So.2d 649 (Ala.1976), and Johnson v. M.P.L. Leasing Corp., 441 So.2d 904 (Ala.1983). The facts of Day more closely approximate those of the last cited cases.

Sanjay lastly argues the foreign corporation falls outside the bar because the contract involved interstate commerce, as was true in Kentucky Galv. Co., Inc., supra. The appellant, Sanjay, is correct when it states that where sufficient interstate commerce is involved, our Constitution and statutes cannot bar enforcement of contracts in Alabama courts by foreign corporations not qualified to do business in Alabama. Kentucky Galv. Co., Inc., supra; First Inv. Co. v. McLeod, 363 So.2d 774 (Ala.Civ.App.1978). The appellant is incorrect when it argues that it is not involved in sufficient intrastate commerce to bring it within the bar. See Computaflor Co. v. N.L. Blaum Const. Co., 289 Ala. 65, 265 So.2d 850 (1972); American Amusement Co. v. East Lake Chutes Co., 174 Ala. 526, 56 So. 961 (1911).

This case involves a contract for the performing of construction activities, the building of a motel in Alabama. There is a difference between “contracts requiring only the furnishing of materials, and contracts requiring the seller to perform construction activities.” Kentucky Galv. Co., Inc. v. Continental Gas Co., Inc., 335 So.2d at 651 (Ala.1976). (Emphasis added.) From the contract signed by the parties, along with the affidavits, it is obvious that more was involved in this contract than the mere “sale and delivery of materials” into Alabama. Kentucky Galv. Co., Inc., supra, 335 So.2d at 651.

Our Constitution and statutes have created a bar precluding enforcement of contracts made by foreign corporations that failed to qualify before and at the date of the contract, where the contract is to be performed in Alabama. Sea Scaping Const. Co., Inc. v. McAtee, 402 So.2d 919 (Ala.1981); Cable Piano v. Estes, 206 Ala. 95, 89 So.2d 372 (1921).

This Court, like its predecessors, recognizes the harshness of this rule; however, it is our duty to uphold the principles established by our Constitution and statutes. The judgment, therefore, must be affirmed.

AFFIRMED.

FAULKNER, JONES, SHORES, EM-BRY and BEATTY, JJ., concur.

TORBERT, C.J., and ADAMS, J., dissent.

ALMON, J., not sitting.

TORBERT, Chief Justice

(dissenting).

Alabama harshly deals with foreign corporations which fail to qualify to do business before entering into contracts here. Alabama is one of four states which permit a party to elect to hold void a contract with a non-qualified foreign corporation. This is the case even where the contract has been fully performed by the non-qualified foreign corporation. Calvert Iron Works, Inc. v. Algernon Blair, Inc., 284 Ala. 655, 227 So.2d 424 (1969). This statute creates both public policy and private rights. Where facts of a case do not conflict or interfere with, or defeat the public policy of our state, we should recognize that the private rights created by a statute are subject to equitable and legal doctrines which may bar their assertion. In this case, plaintiff has presented evidence that defendant should be equitably estopped from asserting Code 1975, § 10-2A-247(a), and § 232 of the Constitution. Since I find that the policy of the state is not impaired and in fact may be promoted by the application of estoppel, I respectfully dissent.

We have long recognized that a private party cannot waive, through equitable es-toppel or other means, the public policy of the state. See American Amusement Co. v. East Lake Chutes Co., 174 Ala. 526, 56 So. 961 (1911). Where “no considerations of public policy or morals are involved,” this Court has said that “[a] party may ... waive a rule of law, or statute, or even a constitutional provision.” Alabama Terminix Co. v. Howell, 276 Ala. 59, 62, 158 So.2d 915, 918 (1963). Hence, a statutory right can potentially be deemed to consist of two elements: public policy and private rights. In a given situation where the public policy of a statute is met or not invoked, only private rights remain. As we held in Alabama Terminix, private rights standing alone are subject to equitable estoppel, a form of waiver.

I. Public Policy.

In analyzing the public policy behind a statute, we must look to the potential reasons for passage which involve the public interest. Section 10-2A-247 and § 232 were aimed at protecting the public in several respects. First, the statute was directed at ensuring that foreign corporations pay taxes and fees. Code 1975, § 10-2A-247(b). Second, the statute attempts to make foreign corporations accountable in Alabama courts. A third possible justification is to insure that the foreign corporation is subject to some additional regulatory scheme.

Each of these justifications for § 10-2A-247 is satisfied when a foreign corporation subsequently qualifies to do business. Obviously, in such a circumstance, the state can compel payment of back taxes and the foreign corporation is subject to Alabama courts. As for other regulation, the foreign corporation’s past efforts are subject to regulatory review and sanction. To avoid the public policy lash of the qualification laws, the foreign corporation must prove that the subsequent qualification was not in anticipation of a specific legal action. Otherwise, the mutuality of remedy afforded by our public policy would be potentially impaired. See Sea Scaping Constr. Co., Inc. v. McAtee, 402 So.2d 919, 921 (Ala.1981). So long as the qualification occurs without the anticipation of litigation, our public policy is satisfied.

A final possible policy justification for the qualification laws is that the statute serves as a general deterrent to coerce foreign corporations to qualify before entering into contracts in Alabama. I question whether this argument can be given any weight. Only ignorant foreign corporations would disregard our qualification statutes when entering into in-state contracts; these corporations are obviously unaware of our public policy. Deterrence cannot operate unless the foreign corporation actually knows of Alabama policy. More importantly, disallowing assertion of equitable estoppel would deter beneficial conduct. Foreign corporations, subsequently realizing that they had contracted in violation of the qualification statute, would breach a contract rather than perform work and not be paid. In-state entities would be deprived of valuable bargains unless they would be willing to incur the loss of time and money for litigation. This “transaction cost” will, in reality, often leave our citizens without an effective remedy if we do not allow the foreign corporation to be paid for performing under a contract after subsequent qualification. Hence, § 10-2A-247 and § 232 do not serve the public interest as an alleged deterrent.

Recognizing that our qualification laws are “penal in its nature and in derogation of common law,” we construe them so as to exclude cases which do not clearly fall within it. Jones v. Americar, Inc., 283 Ala. 638, 643, 219 So.2d 893, 897 (1969). The public policy is satisfied by subsequent qualification not in anticipation of litigation.

II. Private Rights

The determination that subsequent qualification not in anticipation of litigation satisfies the public policy of the state does not by itself restrict the defense of § 10-2A-247 and § 232. Indeed, a party may assert the defense as a private right even though the policy behind the law is fulfilled. However, because subsequent qualification removes any policy concerns, a private party can waive his rights. Hence, subsequent qualification allows the foreign corporation to sue on a contract when the other party is equitably estopped from asserting the defense.

In the present case, Sanjay offered evidence that defendants knew Sanjay was not qualified and offered assistance to San-jay to make it “legal” to do the construction work in question. Sanjay allegedly relied on these representations in contracting and performing the construction work. If proven, such facts would constitute the basic elements of equitable estoppel. See Baker v. Hospital Corp. of Am,., 432 So.2d 1281, 1285 (Ala.1983); Mazer v. Jackson Ins. Agency, 340 So.2d 770 (Ala.1976). Since we recognize equitable estoppel as a defense in this situation, summary judgment on this issue was inappropriate.

We have reached a similar conclusion in an earlier case. In Day v. Ray E. Friedman & Co., 395 So.2d 54 (Ala.1981), this Court held that a party may, by his conduct, waive the contract defense of § 10-2A-247. In Day, the plaintiff, Ray E. Friedman & Co., was an Illinois corporation properly licensed by federal authorities to conduct business as a commodities broker. Friedman, in connection with opening a branch office in Birmingham, entered into a written contract with Day, who was to act as Friedman’s account executive in Birmingham. Friedman did not qualify to do business in Alabama until April 12, 1974, more than one month after signing the contract.

On September 30, 1974, Day and Friedman mutually agreed to sever their relationship. Before transferring his license to another brokerage house, Day was required under the rules of commodities exchanges to settle his debts with his former employer, Friedman. The employment contract provided that Day would guarantee to Friedman payment of account deficiencies incurred by Birmingham customers trading on margin. As a result of this guarantee, as well as personal losses allegedly incurred by Day, Day owed Friedman $8,745.34. To settle the debt, Day executed a promissory note for the amount of the indebtedness to Friedman.

Subsequently, Friedman filed suit to collect on the promissory note. Day’s answer alleged, inter alia, that the note was void “because of a failure of consideration on the theory that the underlying contractual obligation was void in Alabama at the time when Friedman was a foreign corporation which was not licensed to do business in Alabama.” 395 So.2d at 56. In an unanimous opinion on this issue, written by Justice Maddox, we found that Day’s conduct after Friedman qualified to do business constituted a waiver of the § 10-2A-247 defense. In affirming the trial court’s grant of summary judgment on this issue, we approved the language of the trial court’s decision.

“Following Friedman’s qualification to do business on April 12, 1974, Day continued as an employee of Friedman. When he terminated his employment with Friedman, Day executed a promissory note in the principal amount of $8,745.34, recognizing his obligation to Friedman with respect to his own and his customer’s debit balances. From the undisputed evidence in this case, the Court concludes that after Friedman had qualified to do business in Alabama, Day by his conduct recognized and adopted the employment agreement entered into by him with Friedman. It is then no defense to Friedman’s claim under the note that Friedman had failed to qualify to do business in Alabama at the time the employment agreement was executed. While Day in his supplementary affidavit denies that any part of the balance due under the note represents his own debit account balance, he does not deny that the same represents debit balances of customers procured by him for which he is liable to Friedman under the terms of the employment agreement. There is then ample consideration for the execution of the note.... ”

395 So.2d at 56-57. Although the Day holding does not expressly refer to equitable estoppel, the behavior involved created waiver and reliance, the essential characteristics of estoppel.

Presumably, the Court was unconcerned with the public policy issue in Day; indeed, like those in the present case, the facts in Day do not appear to invoke the policy concerns underlying § 10-2A-247, since Friedman subsequently qualified not in anticipation of specific litigation and was subject to relevant regulation. I do not entirely dismiss public policy concerns in the present case, recognizing the necessity of formally addressing the issue. • Only in this limited sense do I disapprove of Day’s approach.

The majority opinion attempts to distinguish Day from this case on three grounds. First, the contract sued upon in Day was a promissory note entered into after the foreign corporation qualified to do business. The issue was whether the note was void because of a failure of consideration related to the underlying agreement entered into at a time when Friedman was not qualified. In other words, the note would have been void if the contract which gave rise to the debt was itself void under § 10-2A-247. Therefore, the issue of the voidability of a contract entered into by a non-qualified foreign corporation was squarely before us in Day. The majority’s second ground for distinction is that some of the money owed by Day represented his personal losses while trading commodities. To the extent that Friedman was liable for the personal losses of Day, this liability was apparently the result of the underlying employment agreement. Therefore, the voidability of the contract, even as to Day’s personal losses charged to Friedman’s account, determined if there was any consideration for the note. The fact that Day owed money to Friedman for personal losses or debts arising from a guarantee can only flow from some contract relationship between the parties, fully subject to § 10-2A-247. Moreover, Day denied that he owned any money personally; summary judgment was only based upon the assumption that the account balance reflected money owed as a result of the contract guarantee. 395 So.2d at 56-57. Therefore, personal losses were not considered by the Court. The third distinction is an attempt to describe Friedman’s activities as interstate commerce and thus not subject to state regulation. See Johnson v. M.P.L. Leasing Corp., 441 So.2d 904 (Ala.1983). Friedman’s activities of setting up an Alabama office, hiring employees, and regularly selling commodity shares in Alabama clearly constitute intrastate involvement completely subject to state regulation.

Because the majority opinion fails to distinguish Day from this case, the reasoning in Day must apply here. Defendants’ alleged conduct in this case, like Day’s, constitutes a waiver of the defense under § 10-2A-247.

In the absence of a public policy behind enforcement of a statute in a given case, a private party’s rights under the statute may be waived. In the present case, I find that Sanjay’s subsequent qualification not in anticipation of litigation does not violate the public policy of Alabama. Because a party who accepts the benefits of a contract should not be allowed to escape the burdens, Smith v. Edward M. Thompson Agency, Inc., 430 So.2d 859, 862 (Ala.1983), I would reverse the summary judgment.

ADAMS, J., concurs.

      . Arkansas, Mississippi, and Vermont are the other three states. See Ark.Stat.Ann. § 64-1202 (1980 repl. vol.); Miss.Code Ann. § 79-3-247 (1972); Vt.Stat.Ann. tit. 11, § 2120 (1973).

      . Alabama’s law in this regard may be unique. For example, Arkansas allows suit on a contract when fully performed. Rose's Mobile Homes, Inc. v. Rex Fin. Corp., 383 F.Supp. 937 (D.Ark.1974).

      . In the construction industry, local regulation through building and occupancy permits does not involve the certification of authority required of foreign corporations under § 10-2A-247.

      . For example, assume X and Y bid on an Alabama construction project for A. X bids $300,000 while Y bids $310,000. X, a foreign corporation, signs a contract with A while not qualified to do business. As X prepares to perform, he discovers his error. Rather than risk the loss of $250,000 (the hypothetical cost of performance), he breaches the agreement with A.
      A can sue X for the benefit of his bargain, or $10,000. Of course, A cannot recover the costs of litigation which may exceed this amount. For a discussion of the "American rule” prohibiting fee shifting, see Rowe, "The Legal Theory of Attorney Fee Shifting: A Critical Overview,” 1982 Duke LJ. 651. Moreover, A may have lost time, money due to inflation, and other costs of rebidding.
      Although A might wish to endorse X’s subsequent qualification, X knows that A can later disavow his action when expedient, and the courts will declare the contract void. X will wisely refuse to perform and reduce his loss accordingly. Hence, disallowing application of equitable estoppel will cause our citizens to be faced with a losing proposition.


source: Caselaw Access Project

author: SHORES, Justice.

license: Public Domain

text:
    Hoyt CLARK and Wallace Coile v. John Michael COWART and David F. Byers, et al.
    82-731.
    Supreme Court of Alabama.
    Jan. 20, 1984.

      William E. Bright, Jr., Birmingham, for appellants.
    Richard H. Walston of Bradley, Arant, Rose & White, Birmingham, for appellee William Smith.
    William J. Baxley and Charles A. Dauphin of Baxley, Beck, Dillard & Dauphin, Birmingham, for appellees.
   SHORES, Justice.

Hoyt Clark and Wallace Coile, defendants, appeal from a decree voiding the issuance to them of stock in Birmingham Motel Associates, Inc. (Motel), and reapportioning shares of stock held by the remaining shareholders. We affirm.

Clark and Coile are involved in the business of motel syndication and sales. They and William Smith formed Birmingham Motel Associates for the purpose of purchasing the Birmingham Airport Motel. The purchase price was $800,000.00, of which $200,000.00 was paid at the closing on July 29, 1982. Out of the $200,000.00, the seller paid $12,500.00 each to Clark and Coile as a commission for the sale. The trial court found and the evidence supports its finding that the $200,000.00 was from the following investors:

Mike Cowart $25,000.00 — equity capital
William Smith 50,000.00 — equity capital
50,000.00 — loan to the corporation
Brian Price 50,000.00 — equity capital
Arthur Allen 25,000.00 — equity capital
$200,000.00 — Total

At the time of the hearing on December 20, 1982, the amount invested by each was as follows:

Mike Cowart $62,500.00 — equity capital
William Smith 50,000.00 — equity capital
(The loan was repaid.)
Brian Price 50,000.00 — equity capital
David Byers 37,500.00 — equity capital
Arthur Allen 25,000.00 — equity capital
$225,000.00 — Total

According to Cowart and Byers, plaintiffs, they were to receive 12.5% of the shares of stock in the corporation for every $25,000.00 invested, giving them title to 31.25% and 18.75% of the shares, respectively, at the time of the hearing. However, despite frequent requests, they never received stock certificates until December 19, 1982.

They also believed that Clark and Coile had contributed $50,000.00 and together held 50% of the shares. They were unaware of any other investors. Cowart and Byers knew that Smith, Price, and Allen (the Smith group) had contributed $125,-000.00 to the corporation, but believed the money to be a loan, not a capital investment in shares of stock.

Clark and Coile, in their testimony, portrayed the investments and holdings to be substantially different than Cowart and Byers contended that they were. They claimed that Cowart and Byers knew that $25,000.00 bought only a 5% interest and also knew that the investors included the Smith group. According to them, the breakdown of ownership of the stock was as follows:

Mike Cowart $50,000.00 10%
William Smith 50,000.00 10%
Brian Price 50,000.00 10%
Arthur Allen 25,000.00 5%
David Byers 25,000.00 5%
Hoyt Clark — 25%
W. Coile — 25%

Clark and Coile admitted that they had made no cash contribution for stock, but asserted that they each received 25% of the shares for services performed for the corporation. They defined those services as “finding the deal [i.e., purchase of the motel], negotiating the deal, [and] handling the structuring of the deal.”

Cowart and Byers testified that, by an agreement signed on September 27, 1982, by Clark, Coile, and Cowart, Cowart and Byers had an unconditional option to purchase all of Clark and Code’s stock for $100,000.00, giving Cowart and Byers 100% ownership of the stock. The transfer never took place. Instead, on December 16, 1982, one day after the option was to be exercised, Clark and Coile threatened to oust Cowart from his position as motel manager and assume the position themselves.

Cowart and Byers filed their complaint on December 16, 1982, requesting a temporary restraining order, preliminary injunction, and permanent injunction prohibiting Clark, Coile, the Smith group, and the corporation from interfering with the management of the motel. They also requested the trial court to order Clark and Coile to specifically perform the agreement of September 27 and transfer their shares to them. The trial court granted the temporary restraining order and held a hearing on the preliminary injunction and permanent injunction.

At the close of the ore tenus hearing, which produced sharply disputed evidence, the trial judge issued the following decree:

“ONE: There was no meeting of the minds or mutual understanding of the parties to the Agreement dated September 27, 1982 and it is, therefore, of no force or effect and not subject to an order of the Court requiring specific performance.
“TWO: There was no meeting of the minds of the parties as to all of the essential features of any contract, agreement, mutual understanding or general concept of the transaction involved and, therefore, none is enforceable between the parties.
“THREE: ‘Shares of stock’ are distinguishable from the certificates which represent them, they are personal property, and they become the property of the investors upon the payment of money to the corporation for the purchase of stock.
“FOUR: For labor or services to be consideration for the issuance of shares of stock, such labor or services must have actually been performed for the corporation. The services performed by Clark and Coile prior to the closing of the purchase of the assets of the Motel, for which Clark and Coile received a $25,-000.00 commission, were performed for the benefit of Clark and Coile, not the Motel. Clark and Coile performed no other services for the Motel for which shares of stock should be issued. Therefore, Clark and Coile own no shares of stock in the Motel.
“FIVE: The total investment in the Motel is $225,000.00 and the amount of investment and the percentage of stock ownership of each of the parties is as follows:
Cowart $62,500.00 27.8%
Smith 50,000.00 22.2
Price 50,000.00 22.2
Byers 37,500.00 16.7
Allen 25,000.00 11.1
$225,000.00 100.0%
The percentage of stock ownership came into existence upon the investment of money, and each party is entitled to have-certificates of stock representing his percentage of ownership. All currently outstanding certificates representing shares of stock in the Motel are cancelled, and the management of the Motel shall forthwith issue new certificates in accordance with the percentages set out herein.”

Clark and Coile appeal from this final decree. They argue that the trial court had no jurisdiction to grant the equitable relief of restructuring the corporation and that the evidence does not support the decree.

They first assert that the trial court had no equity jurisdiction to reissue the shares in the corporation because there was an adequate remedy at law available under § 8-6-19(a), Ala. Code 1975 (Alabama Blue Sky Laws). Section 8-6-19(a) allows a shareholder, who is fraudulently induced to purchase stock, “to recover the consideration paid for the security ... upon the tender of the security.” The availability of this remedy does not deprive the parties of the equitable remedy which they sought. By their complaint, they sought the issuance of shares in the corporation corresponding to their investment therein. Under the evidence, they are entitled to that relief under the facts of this case and are not required to proceed under § 8-6-1, et seq., even though they might have elected to do so.

The trial court had jurisdiction to order the issuance of shares in the corporation commensurate with the investment actually made by each contributor. Oden v. Vaughn, 204 Ala. 445, 85 So. 779 (1920). The fact that Cowart and Byers failed to specifically request such relief in their original complaint is of no consequence here, because they orally amended the complaint and requested this relief at the close of the hearing without objection from the appellants. A.R.Civ.P. 15(a).

We now examine the record to determine whether there is a factual basis for the decree.

The trial court held that the issuance of 50% of the stock in the corporation to Clark and Coile was illegal and void. Specifically, Judge Jack D. Carl stated:

“It is true that under Alabama law consideration for shares of stock may be paid, in whole or in part, by labor or services actually performed (Section 1Ó-2A-36(a) Code of Ala.1975), however, these services must have actually been performed, and future services shall not constitute payment or part payment for the issuance of shares in a corporation. (Section 10-2A-36(b) Code). Clark and Coile received a commission of $25,000.00 for their participation in the acquisition of the assets of the Motel. The Court finds that these services were performed for the benefit of Clark and Coile, not for the Motel. Any stock issued for these services was issued for no consideration and thus is void. [Rochell v. Oates, 241 Ala. 372, 2 So.2d 749 (1941) ]. This Court finds from the evidence that Clark and Coile provided no services in connection with any attempts to syndicate the Motel which would authorize the issuance of any shares of stock to them.”

The evidence supports this finding, Clark and Coile admitted that the seller approached them first to purchase the motel. It is also undisputed that Cowart initiated discussions with them regarding investment by him in the corporation and that Cowart subsequently introduced Byers to the project. Furthermore, Cowart and his lawyer worked on the plan for syndication, although it never did come to fruition. The trial court’s finding, and that part of its decree based thereupon, will not be disturbed, since it is supported by credible evidence and is not clearly erroneous. Crow v. Florence Ice & Coal Co., 143 Ala. 541, 39 So. 401 (1905).

Clark and Coile also claim there was no evidence to support the trial court’s finding that Cowart paid $62,500.00 and Byers paid $37,500.00 for shares of stock. They argue that all the evidence clearly indicates that the last $25,000.00 ($12,-500.00 each) Cowart and Byers paid was consideration for the option to purchase Clark and Coile’s stock for $100,000.00, as per the September 27 agreement. Judge Carl found that the September 27 agreement containing the option was void on the ground of mutual misunderstanding. Co-wart and Byers testified that the agreement demanded no consideration for the option. However, they claim the agreement did provide that Cowart and Byers could purchase another 12.5% interest in the corporation for $25,000.00, bringing their joint interest to 50%. This they claim to have done. Judge Carl was free to determine whether the $25,000.00 paid by Cowart and Byers bought an option, stock, or something else. He simply believed Co-wart and Byers. We will not disturb his finding.

After determining that Clark and Coile held no interest in the corporation and what amounts actually were contributed by the remaining investors, Judge Carl reapportioned the ownership of the corporation to comport with the amounts each investor actually paid for the purchase of stock. Judge Carl’s decision was equitable and fair. He treated the investors equally, giving each an interest in the corporation in direct proportion to the amount of his investment. The trial court has the power to mold its decree “so as to adjust the equities of all parties and to meet the obvious necessities of each situation.” Coupounas v. Morad, 380 So.2d 800, 803 (Ala.1980). Although Judge Carl did not give effect to either investment plan described by the parties, we affirm his decree. He could not give credence to the plan to grant a 12.5% interest for each $25,000.00 paid to the corporation, because that percentage would work only if the total investment were $200,000.00. Under that plan, at least one of the investors would not have received all of the shares to which he would be entitled. Likewise, if Judge Carl had given each a 5% interest for each $25,000.00 invested, Cowart and Byers would have received substantially less than the interest they had purchased.

We hold that the trial court had jurisdiction to grant equitable relief as sought by the complaint and that the record supports its findings of fact. The decree is proper, and we, accordingly, affirm.

AFFIRMED.

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


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

text:
    The FIRST NATIONAL BANK OF DOTHAN v. RIKKI TIKKI TAVI, INC.
    82-249.
    Supreme Court of Alabama.
    Jan. 27, 1984.
    James D. Farmer of Farmer & Farmer, Dothan, for appellant.
    No brief for appellee.
   TORBERT, Chief Justice.

The First National Bank of Dothan appeals from an order denying its motion for a new trial in an action on a promissory note against Rikki Tikki Tavi, Inc. The Bank contends the jury verdict awarding $32,667 to Rikki Tikki Tavi is against the great weight and preponderance of the evidence. We agree.

The Bank sold certain restaurant equipment securing a debt that was evidenced by the promisory note in question. The Bank applied the proceeds from that sale ($55,000) to the balance due on the note, and then sued for the deficiency. Rikki Tikki Tavi counterclaimed, alleging that the Bank’s sale of the collateral was not conducted in a commercially reasonable manner as required by Code 1975, § 7-9-504.

The trial court directed a verdict in favor of the bank on the original complaint. The question of “commercial reasonableness” was then submitted to the jury under the counterclaim of Rikki Tikki Tavi. It returned a verdict on the counterclaim, and judgment was entered accordingly.

The sole issue here is whether the verdict is so against the great weight and preponderance of the evidence as to require a new trial. Myers v. Evans, 287 Ala. 710, 255 So.2d 581 (1971).

Code 1975, § 7-9-504, authorizes a secured creditor to sell, lease, or otherwise dispose of any collateral in order to cover the balance due on a promissory note in the event of default by the debtor. “The principal limitation on the secured party’s right to dispose of collateral is the requirement that he proceed in good faith (Section 7-1-203) and in a commercially reasonable manner. See Section 7-9-504.” Code 1975, § 7-9-507, Comment 1. “[E]very aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable.” Code 1975, § 7-9-504(3). The sufficiency of the price obtained at a sale authorized by Code 1975, § 7-9-504, is one of the “terms” of the disposition, and is relevant to whether the sale was commercially reasonable. Associates Finance Company of Nebraska v. Teske, 190 Neb. 747, 212 N.W.2d 572 (1973); First National Bank of Bellevue v. Rose, 188 Neb. 362, 196 N.W.2d 507 (1972).

In First Alabama Bank of Montgomery v. Parsons, 426 So.2d 416 (Ala.1982), this Court held that in order for a debtor to establish a right to recover against a secured creditor under the provisions of Code 1975, § 7-9-507, in the absence of commercially unreasonable behavior amounting to bad faith, the debtor must prove both that an aspect of the disposition sale was commercially unreasonable and that such unreasonableness was the cause of the debt- or’s loss. In other words, the debtor must prove causation and damages, as well as commercial unreasonableness, in the absence of bad faith. Parsons, at 419.

After a careful review of the record, we conclude that the verdict, which necessarily found that the Bank’s conduct was commercially unreasonable, is against the great weight and preponderance of the evidence, and, therefore, we reverse and remand for a new trial. There was conflicting testimony concerning the market value of the collateral. Estimates from the experts testifying for both parties ranged from about $55,000 (the sale price) to about $220,000. However, disparity in price between the market value of the collateral and the price for which it actually sold is not “of itself sufficient to establish that the sale was not made in a commercially reasonable manner.” Code 1975, § 7-9-507(2). “If the secured party either sells the collateral in the usual manner in any recognized market therefor or if he sells at the price current in such market at the time of his sale or if he has otherwise sold in conformity with reasonable commercial practices among dealers in the type of property sold he has sold in a commercially reasonable manner.” Id. As it is undisputed that there is no recognized market for collateral of this kind in Dothan, Alabama, the issue is whether the bank otherwise sold in conformity with reasonable commercial practices among dealers in this kind of collateral.

Pierce Flatt, then executive vice president of the Bank, testified as to the procedure the Bank followed in arranging the sale. Notice of the sale was sent to Rikki Tikki Tavi and was published in a local newspaper. The bank contacted three local restaurant equipment dealers and obtained appraisals from two of them. The dealers making appraisals offered to buy the equipment at their appraised prices, which were substantially lower than the eventual sale price. The Bank notified officials of Rikki Tikki Tavi and asked if they knew of any potential buyers, and they answered that they were “looking.” This is in keeping with the rule that notice to the debtor is required, so that, among other reasons, he can protect his interest in the property by finding a buyer. Wells v. Central Bank of Alabama, N.A., 347 So.2d 114, (Ala.Civ.App.1977).

Representatives of two of the three restaurant equipment dealers who testified at trial said that they had never seen used restaurant equipment advertised in any trade journal, and that they do not advertise in any such journals. The other dealer testified that he had seen some advertisements for used restaurant equipment in trade journals, but that he did not advertise in such journals.

In an attempt to prove the bank acted unreasonably, Rikki Tikki Tavi presented evidence purporting to show the Bank failed to keep a list of parties inquiring about the collateral, failed to contact any restaurant brokers or dealers concerning the sale, and failed to advertise the sale in any trade journals. The evidence, however, furnishes only the barest inference that dealers in collateral of this type would have done any of those things that Rikki Tikki Tavi accuses the Bank of not doing. In other words, Rikki Tikki Tavi’s evidence tending to establish that the Bank’s conduct in the foreclosure sale was commercially unreasonable under the circumstances is not sufficient, as against the great weight and preponderance of the evidence to the contrary, to withstand the motion for new trial.

The only evidence presented which tends to establish that it may have been commercially reasonable to have advertised in trade journals is one dealer’s statement that he had seen some advertisements in trade journals for items of this kind. However, other dealers said they had not seen such advertisements, and all the dealers said that they did not advertise in such journals. The allegation that the Bank failed to contact restaurant equipment dealers is simply not supported by the evidence, because the evidence shows that at least three dealers were contacted. There is no testimony establishing that dealers usually keep lists of potential buyers that contact them.

After indulging all presumptions in favor of the verdict’s validity, and in light of the near total absence of testimony tending to establish that the Bank’s conduct in the sale was commercially unreasonable, we find that the overwhelming weight of the testimony establishes that the Bank did act in a commercially reasonable manner, and, therefore, that the motion for new trial should have been granted. See First Alabama Bank of Montgomery v. Parsons, 426 So.2d 416 (Ala.1982). The order denying a new trial is reversed and the cause remanded for a new trial on the debtor’s counterclaim.

REVERSED AND REMANDED.

MADDOX, JONES, SHORES, and BEATTY, JJ., concur.

ADAMS, J., concurs specially.

FAULKNER and EMBRY, JJ., dissent.

ALMON, J., not sitting.

ADAMS, Justice

(concurring specially).

I concur specially. Although I agree with the dissent that, although weak, there was sufficient evidence to submit the question of commercial reasonableness to the jury, I cannot agree that the debtor should recover on its counterclaim. Recovery is not only premised on the lack of commercial reasonableness, but the same must have proximately caused the debtor’s damages.

EMBRY, Justice

(dissenting).

After a careful review of the record, I conclude that Rikki Tikki Tavi proffered sufficient evidence to allow the jury to infer that the Bank conducted a commercially unreasonable sale, and that such unreasonableness caused Rikki Tikki Tavi financial loss. For example, Rikki Tikki Tavi introduced the testimony of two experts who appraised the collateral at the time of the sale. Their estimates were $175,000 to $220,000 and $150,000 to $160,000 respectively. Although the Bank refuted this testimony through its own experts, who appraised the collateral at approximately $55,000 (the sale price), such conflict in the evidence regarding the true market value of the collateral is clearly a question for the jury. First National Bank of Bellevue, 188 Neb. at 365, 196 N.W.2d at 510 (1972); Wells v. Central Bank, 347 So.2d 114 (Ala.Civ.App.1977). Additionally, where a large discrepancy exists between the sale price and the reputed market value, as is the case here, such discrepancy is relevant to the issue of causation. First Alabama Bank of Montgomery v. Parsons, 426 So.2d at 422 (Ala.1983).

In an effort to prove other commercially unreasonable aspects of the disposition sale, Rikki Tikki Tavi presented evidence proving that the Bank: Failed to keep a list of parties inquiring about the collateral; failed to contact any restaurant brokers or dealers concerning the sale; and failed to advertise the sale in any trade journals. Once again, whether these failures amounted to commercially unreasonable behavior is a question for the jury. Wells v. Central Bank, 347 So.2d 114 (Ala.Civ.App.1977). See also ITT-Industrial Credit Co. v. Milo Concrete Co., Inc., 31 N.C.App. 450, 229 S.E.2d 814 (1976).

It is well settled that jury verdicts are presumed correct and this presumption is strengthened when, as in the present case, the trial court has denied a motion for a new trial. Finance Inv. & Rediscount Co. v. Wells, 409 So.2d 1341, 1343 (Ala.1981); Harrison v. Mitchell, 391 So.2d 1038 (Ala.Civ.App.1980). I would hold the evidence presented by Rikki Tikki Tavi was sufficient to justify the jury in finding commercial unreasonableness as well as causation, and would therefore affirm the judgment of the trial court.

FAULKNER, J., concurs.


author: FAULKNER, Justice.

text:
    Jimmy Dee GRAHAM and Judy Johnson Graham v. Walter H. McKINNEY, Jr.
    82-577.
    Supreme Court of Alabama.
    Jan. 27, 1984.

      James K. Davis of Fite, Davis & Atkinson, Hamilton, for appellants.
    Bobby R. Newman of Nolen & Newman, Fayette, for appellee.
   FAULKNER, Justice.

This ease arose from a dispute between coterminous land owners over the boundaries separating their property. Appellants, plaintiffs below, contend that the trial court’s decree establishing the coterminous boundaries is erroneous as a matter of law. We affirm.

The Grahams’ (appellants’) land lies immediately northeast of the McKinneys' (ap-pellees’) land. The disputed boundaries are a north-south line, and an east-west line running east from the southern point of the north-south line.

The Grahams purchased their property in August of 1979. About six months later, the McKinneys purchased their property and engaged Mr. Chester A. Smith, a licensed and registered engineer and land surveyor, to conduct a survey (the McKinney survey) of their property. When completed, this survey indicated that the boundary line on the west side of the Graham property was several feet to the east, and the line to the south of the Graham property was several feet to the north, of the boundary lines claimed by the Grahams.

In order to settle the discrepancy, the Grahams filed suit against the McKinneys in the Circuit Court of Fayette County, Alabama, on March 5, 1982. The Grahams asked the court to establish the true coterminous boundary lines between their property and that of the McKinneys.

The trial court rendered a memorandum opinion and order on February 8, 1983, establishing the boundary lines to be the lines described by the McKinney survey.

The Grahams appealed to this court from that order, alleging: (1) the trial court erred by requiring appellants to establish the elements of adverse possession as to the disputed strip of land in order to prevail; and (2) the trial court’s order establishing the boundary lines according to the McKinney survey was palpably wrong and manifestly unjust. We do not agree.

At the outset, it appears that appellants have interpreted the trial court’s opinion incorrectly. The opinion did not require appellants to prove the elements of adverse possession in order to prevail as to their proposed boundary lines. Rather the lower court merely pointed out that appellants failed to meet their burden of proof under the theory of adverse possession so as to conclusively establish that the lines they assert are the true boundary lines.

In Kerlin v. Tensaw, 390 So.2d 616, 618 (Ala.1980), we stated:

“Boundary disputes are subject to a unique set of requirements that is a hybrid of the elements of adverse possession by prescription and statutory adverse possession. In the past there has been some confusion in this area, but the basic requirements are ascertainable from the applicable case law. In a boundary dispute, the coterminous landowners may alter the boundary line between their tracts of land by agreement plus possession for ten years, or by adverse possession for ten years_ [Citations omitted.] The rules governing this type of dispute are, in actuality, a form of statutory adverse possession. [Citations omitted].”

This language indicates that in a boundary dispute a coterminous landowner has at least two methods by which he himself can establish the true and correct boundary line, namely, (1) by agreement, or (2) by adverse possession. However, should the landowner fail to meet the burden of proof under either of these methods, it does not necessarily follow that the landowner is precluded from prevailing in the suit.

In Ray v. Robinson, 388 So.2d 957, 962-63, (Ala.1980) (quoting Stansell v. Tharp, 245 Ala. 270, 16 So.2d 857 (1944)), this court noted:

“The burden is not on either party as to the true location of the line in the sense that if the evidence is equally balanced he loses the controversy. While the bill sets out complainants’ contention as to the location of the true line, the primary burden which complainants carry is to sustain the allegations showing the controversy, and that a situation exists which invokes the equity power of the court to find and fix the location of the line in dispute.... If complainants do not satisfactorily show that their contention is correct as to the true line, the cause is not due to be dismissed, nor does it necessarily result in finding according to the contention of respondent; but the court will proceed to find the true line, whether it is as either party contends. They may both be wrong in respect to their contentions. See, Ford v. Beam, 241 Ala. 340, 2 So.2d 411; Edwards v. Smith, 240 Ala. 397, 199 So. 811; Baldwin v. Harrelson, 225 Ala. 386, 143 So. 558. See also Bryan v. W.T. Smith Lumber Co., 278 Ala. 538, 179 So.2d 287 (1965). If, on the basis of the pleadings and evidence presented at trial, a trial court is convinced that a controversy exists concerning the location of a boundary line, it is empowered to evaluate the evidence and reach a conclusive determination on the true location of the line; however, in doing so, it shall not be constrained by the pleadings to establish only a boundary line that is requested by either party. To the contrary, the court must proceed to find the true line, whether it is as either party contends. Stansell v. Tharp, supra; Deese v. Odom, 283 Ala. 420, 218 So.2d 134 (1969).” (Emphasis added.)

Reviewing the record, in light of the above-stated principles, this Court finds it clear that the trial court followed the law and proceeded properly in this case. The lower court tested the sufficiency of appellants’ contentions as to the true boundary lines. The court properly found that appellants had not met their burden of proving adverse possession as to the disputed area of land. Since there existed an obvious dispute as to the boundary lines, it became the responsibility of the trial judge to determine the true and correct lines, which he did.

Furthermore, the trial judge did not err in using the McKinney survey as the basis of his judgment. A judgment of the trial court establishing a boundary line between coterminous landowners need not be supported by a great preponderance of the evidence; the judgment should be affirmed if, under any reasonable aspect of the ease, the decree is supported by credible evidence. See Kirby v. Jones, 370 So.2d 250 (Ala.1979); Buckley v. Carroll, 366 So.2d 1094 (Ala.1978); Edwards v. Farmer, 285 Ala. 118, 229 So.2d 507 (1970).

In the present ease, the McKinney survey, which was conducted by a registered surveyor, while perhaps not conclusive, was certainly credible evidence.

Furthermore, in-reviewing the judgment of the trial court in actions involving boundary disputes between owners of coterminous land, the Supreme Court will not enter a reversal unless the judgment of the trial court is palpably erroneous and manifestly unjust. Ray v. Robinson, 388 So.2d 957 (Ala.1980); Jemison v. Belcher, 368 So.2d 849 (Ala.1979); Smith v. Nelson, 355 So.2d 359 (Ala.1978).

Reviewing the entire record and briefs in this case, we can find no palpable error or manifest injustice in the trial court’s decision. We hold, therefore, that the trial court did not err in establishing the true and correct coterminous boundaries of the property according to the McKinney survey. Thus, the trial court’s decision is affirmed.

AFFIRMED.

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


author: EMBRY, Justice.

text:
    George W. TIMMONS and Mary L. Timmons v. CITY OF PRICHARD, an Alabama Municipal Corporation.
    82-810.
    Supreme Court of Alabama.
    Jan. 27, 1984.
    Ronnie L. Williams, Mobile, for appellants.
    Otto E. Simon and J. Randall Crane of Simon, Wood & Crane, Mobile, for appellee.
   EMBRY, Justice.

This appeal by George W. Timmons, and wife Mary L. Timmons, is from a summary judgment entered in behalf of the City of Prichard in the Timmonses’ action seeking abatement of a nuisance. We affirm. The Timmonses’ complaint:

“Come now Plaintiffs in this action and state their complaint for abatement of a nuisance as follows:
“1. Plaintiffs have owned and resided on residential property located at 419 Hill Avenue, in the City of Prichard, County of Mobile, State of Alabama since on or about February 1, 1971.
“2. On or about May, 1979, defendants or their agents and employees constructed and thereafter maintained and operated a sewer line, known as the Zie-man Street Drainage Project, along the Southern line of plaintiffs’ property.
“3. In operating said drainage project defendants have unlawfully permitted and still unlawfully permit sewer waters and raw sewage from said sewer line to overflow onto plaintiffs’ property.
“4. As a result of said overflowing of sewage onto plaintiffs’ property, said property has been caused to be flooded with sewage several times each year since the construction of the drainage project. The most recent flooding occurred on January 13, 1982.
“5. As a result of said overflowing of sewage, plaintiffs’ property is virtually unsanitary several weeks of every year because of offensive and noxious odors filling the air and unclean and unhealthy materials covering their lawn.
“6. Plaintiffs have frequently requested defendants to correct the overflow problem, but defendants have failed or refused to take any action.
“7. Said overflow is continuing and recurrent and has reduced the value of plaintiffs’ property, is making it difficult for plaintiffs to enjoy their home.
“8. Unless enjoined and abated this condition will cause further damage to plaintiffs' property and result in a multiplicity of actions.
“WHEREFORE, Plaintiffs pray:
“1. That defendants be perpetually enjoined and restrained from maintaining or permitting the maintenance of said sewage system in such manner as to permit it to overflow onto plaintiffs’ home;
“2. For judgment against defendants in the amount of $50,000.00;
“3. For costs of this action; and
“4. For such other and further relief as the Court deems proper.
“JURY TRIAL DEMANDED.”

The City and the Board filed a joint motion for summary judgment supported by three affidavits. Plaintiffs filed nothing in rebuttal. Those affidavits demonstrate that the Board had no control or supervision over the construction, maintenance, or operation of the drainage project, a project administered by the City. The affidavit of Huggins:

“KENNETH HUGGINS, first being duly sworn, deposes and says as follows:
. “My name is Kenneth Huggins and I reside at 2101 Knollwood Dr., Mobile, Alabama 36609. I am the Superintendent of The Water Works and Sewer Board of the City of Prichard. I have held this position from March, 1978 until the present time. My qualifications are as follows:
“I graduated from Louisiana State University in 1965 with a B.S.C.E. (Civil Engineering) Degree.
“I worked for national contractors from 1965 to 1970 on various elevated highway and marine projects in Louisiana and Mississippi.
“In 1970, I came to Mobile to assist in the construction of the George C. Wallace Tunnel. Subsequently, my family and I chose to remain in Mobile as opposed to the vagabond life inherent in working with national contractors on large projects.
“I worked as an engineer/superintendent for two (2) local contractors prior to coming to The Water Works and Sewer Board five (5) years ago as the superintendent.
“I am making this affidavit in the case of George Timmons, et al. v. Prichard Water & Sewer Board and The City of Prichard.
“The Prichard Water & Sewer Board is a corporation existing under the laws of Alabama and supplies water to the residents of Prichard, Chickasaw and also provides sewer service for a portion of the residents of the City of Prichard, a copy of said articles of incorporation is attached hereto and made a part hereof [omitted from this opinion].
“I have been shown, by the Board’s attorney on this date, a contract dated the 14th day of March, 1977, between the City of Prichard and Polyengineering for the design and engineering of work to be done on what is commonly known as “The Zieman Street Drainage Project.” From the documents that have been shown to me, a portion of the contract that applies to the Plaintiff in this case is under EDA Grant No. 04-11-01633.
“I have also been shown a copy of a contract entered into by the City of Prichard and J.E. Harris Co., Inc., dated August 2, 1979, for the construction of the Zieman Street Drainage Project, under the EDA Grant No. 04-11-01633.
“The Water Works and Sewer Board of the City of Prichard is a separate corporation from the City of Prichard and had no part in the engineering, design or construction of the Zieman Street Drainage Project, which is the substance of the Plaintiff’s lawsuit.
“The staff of The Water Works and Sewer Board of the City of Prichard at no time exercised any supervision over the preparation of the plans or the construction of this project.
“Since the conception of this project in 1977, which was entered into between the City of Prichard and Polyengineering through the awarding of a contract on August 2, 1979, and through the construction of the total project, the staff of The Water Works and Sewer Board had no knowledge of the plans for nor the construction contract to relocate any water or sewer lines that were owned by The Water Works and Sewer Board.
“The Water Works and Sewer Board did not enter into and [was] not a part of these contracts or any other contracts relating to the Zieman Street Drainage Project. The Water Works and Sewer Board of the City of Prichard has not accepted any work done on the Zieman Street Drainage Project nor has the said Board maintained any lines that may have been a part of this contract.”

The affidavit of Wood:

“OWEN WOOD, first being duly sworn, deposes and says as follows:
“My name is Owen Wood and I reside at 4423 Westchester Court, Eight Mile, Alabama 36613. I have been a member of the Board of Directors of The Water Works and Sewer Board of the City of Prichard since October 16, 1972. Presently, I am Chairman of the said Board of Directors.
“I am making this affidavit in the case of George Timmons, et al. v. Prichard Water & Sewer Board and The City of Prichard.
“I have checked the records of The Water Works and Sewer Board of the City of Prichard and there is no contract between The Water Works and Sewer Board with any engineer or contractor for construction of what is known as the Zieman Street Drainage Project.
“I have been shown a copy of the contract entered into between the City of Prichard and Polyengineering dated March 14, 1977, for the plans and design of the Zieman Street drainage Project. I have also been shown a copy of the contract between the City of Prichard and J.E. Harris Co., Inc., for the construction of the Zieman Street Drainage project. Both of these contracts were let under an EDA grant to the City of Prichard numbered 04-11-01623.
“The Water Works and Sewer Board did not enter into and [was] not a part of these contracts or any other contracts relating to the Zieman Street Drainage Project. The Water Works and Sewer Board of the City of Prichard has not accepted any work done on the Zieman Street Drainage Project nor has the said Board maintained any lines that may have been a part of this contract.
“At the time of the above referred to lawsuit, The Water Works and Sewer Board of the City of Prichard had no knowledge of the plan, the construction nor the work done on the Zieman Street Drainage Project.”

The affidavit of Parsons:

“ARNOLD PARSONS, first being duly sworn, deposes and says as follows:
“My name is Arnold Parsons and I reside at 3 Crossway Drive, Mobile, Alabama 36608. I am the President of Polyengineering and have done engineering work for both the City of Prichard and The Water Works and Sewer Board of the City of Prichard.
I am making this affidavit in the case of George Timmons, et al. v. Prichard Water & Sewer Board and The City of Prichard.
“On the 14th day of March, 1977, Po-lyengineering and the Community Development Department of the City of Prich-ard entered into an agreement for the design and engineering work for the construction of what is known as the Zieman Street Drainage Project. A copy of this contract is attached hereto and made a part hereof [omitted from this opinion]. This contract involved an EDA Grant No. 04-11-01633.
“On August 2, 1979, the City of Prich-ard entered into a contract with J. E. Harris Company, Inc., for the construction of the Zieman Street Drainage Project, under EDA Grant No. 04-11-01633. An abbreviated copy of this contract is attached hereto and made a part hereof [omitted from this opinion].
“This project was strictly a City of Prichard Project and The Water Works and Sewer Board of the City of Prichard was not involved in the engineering, design or construction of this drainage project which is the substance of the Plaintiffs’ lawsuit.
“To my knowledge, The Water Works and Sewer Board of the City of Prichard had no knowledge of the plans, supervision or construction of this project.”

The dispositive issue on this appeal is whether the Timmonses’ action seeking to perpetually enjoin and restrain the City of Prichard from maintaining, or permitting the maintenance of, the sewage system in such manner as to permit it to overflow onto their home and property, was timely filed.

It was not timely filed. Neither a claim nor the suit was filed within the six-month period prescribed by § 11-47-23, Code 1975, from completion of the project in 1980 and the time damage commenced during that same year. C.F. Browning v. City of Gadsden, 359 So.2d 361 (Ala.1978).

Regarding the subject of this appeal in general, see Burge v. Jefferson County, 409 So.2d 800 (Ala.1982).

For the reasons stated, the judgment below is due to be, and it hereby is affirmed.

AFFIRMED.

TORBERT, C.J., and FAULKNER, AL-MON and ADAMS, JJ., concur.


text:
    Ex parte SOUTHWAY DISCOUNT CENTER, INC., a Domestic Corporation. (In re SUPER VALU STORES, INC., Successor to Chastain-Roberts Co. v. SOUTHWAY DISCOUNT CENTER, INC., et al.).
    82-925.
    Supreme Court of Alabama.
    Jan. 27, 1984.

      Virgil K. Sandefer, Birmingham, for petitioner.
    C. Lee Reeves and Charles R. Driggars of Sirote, Permutt, Friend, Friedman, Held & Apolinsky, Birmingham, for respondent.
   EMBRY, Justice.

This is a petition for the writ of mandamus directed to Honorable Ingram Beasley, Retired Circuit Judge. We deny the petition.

Plaintiff-respondent Super Valu Stores, Inc., filed suit against petitioner-defendant Southway Discount Center, Inc., alleging that Southway had defaulted on a note to Super Valu in the amount of $50,735.70 and on a separate $23,000 debt to Super Valu. Southway had, allegedly, based on the above debts, twice granted to Super Valu a security interest in all inventory items, once in 1974 and again in 1981. Super Valu contends both agreements are presently operative, and that the 1974 agreement (extended by a continuation statement filed with the Secretary of State in 1979) was in effect continuously to secure future advances to Southway, as well as prior loans.

When it filed suit, Super Valu simultaneously filed a motion for a writ of seizure of Southway’s inventory items. The trial court heard and granted that motion and the inventories were seized by Super Valu without any further notice to Southway.

Subsequent to the seizure of its inventories, Southway filed a motion for dissolution of the prejudgment seizure writ. Pursuant to Rule 64(b)(2)(C), ARCP, the trial court held a hearing to determine the issue whether there was good cause for the prejudgment writ to issue. No testimony was presented by either party; the trial court made its decision based solely on the consideration of the security agreements and an affidavit submitted by Super Yalu, although the documents were not formally introduced as evidence by Super Valu. Southway made no objection to the trial court’s consideration of those documents.

After denial of its motion for dissolution of the prejudgment seizure writ, Southway sought permission from this court to appeal that interlocutory order pursuant to Rule 5, ARAP, contending that Super Valu, because it had presented no testimony and because no documents had been admitted as evidence, had failed to meet its burden of proof of right to a writ as required by Rule 64. Permission to appeal that order was denied Southway by this court. South-way’s motion for reconsideration was also denied.

Immediately thereafter, Southway filed a motion for summary judgment against Super Valu, which was denied. It then petitioned this court for the writ of mandamus, raising the issues previously presented when seeking permission from this court to appeal the denial of the motion for dissolution of the prejudgment seizure.

Respondent Super Valu contends, and we agree, that mandamus is inappropriate under these circumstances.

It is elementary that the writ of mandamus is appropriate as a remedy only when there is a clear legal right and where there is no other adequate remedy. Ex parte Strickland, 401 So.2d 33 (Ala.1981). Mandamus cannot be used as a substitute for appeal. See, e.g., Echols v. Housing Authority of Auburn, 377 So.2d 952 (Ala.1979); Ex parte Furnace and Corrosive Services, Inc., 418 So.2d 891 (Ala.1981); Ex parte South Carolina Insurance Co., 412 So.2d 269 (Ala.1982).

In this case, after trial, if Southway loses on the merits, it will have the right of appeal, and one of the issues it may raise on appeal is the denial of the motion for summary judgment. A valid statutory bond has been posted by Super Valu for the protection of Southway, should it be judicially determined that Super Valu wrongfully, or erroneously, seized South-way’s inventory or any part thereof. Therefore, we do not think Southway can validly contend appeal is an inadequate remedy for any harm suffered as a result of alleged error by the trial court.

For the above reasons, we deny South-way’s petition for the writ of mandamus.

PETITION DENIED.

TORBERT, C.J., and FAULKNER, AL-MON and ADAMS, JJ., concur.


text:
    Wilbur FOUNTAIN v. Ophelia JACKSON and Willie G. Nobles.
    82-1078.
    Supreme Court of Alabama.
    Jan. 27, 1984.
    J. Milton Coxwell, Jr. of Coxwell & Cox-well, Monroeville, for appellant.
    N.S. Hare, Jr. of Hare & Hare, Monroe-ville, for appellees.
   FAULKNER, Justice.

Fountain appeals from an order of the trial court granting summary judgment to the defendants in an action seeking to have a certain instrument declared testamentary in nature and inoperative as a deed.

On January 12, 1956, Amos M. Nobles executed an instrument purportedly conveying an interest in certain lands located in Monroe County to Mrs. Willie Garlene Nobles. The instrument in question is a printed form warranty deed in which the blank spaces have been completed in handwriting. The parties stipulated that the instrument was prepared and handwritten by one Brutus H. Bailey, a layman not learned in the law. The instrument contains a Code form acknowledgment of Amos M. Nobles’s signature and the signatures of two witnesses. The instrument was filed in the Monroe County Probate Office on January 17, 1956, and a deed tax in the form of documentary stamps was paid thereon.

The instrument purports to presently convey the land described therein to Willie Garlene Nobles, but also contains the following handwritten language:

“This Conveyance Shall be Subject to The Following Conditions:
“1. Amos M. Nobles Shall Exercise Full Controll [sic] of this land as Long as He Shall Live
“2. In the Case of the Death of Willie Garlene Nobles During the Life Time of Amos M. Nobles This Deed Shall Become Null and Void.”

Amos M. Nobles predeceased Willie Gar-lene Nobles in September 1976. On September 14, 1976, Mrs. Nobles purportedly conveyed the subject property by warranty deed to Ophelia Jackson.

On November 16, 1982, Wilbur Fountain, an heir at law of Amos M. Nobles, filed suit against Willie Garlene Nobles and Ophelia Jackson, seeking to have the instrument executed by Amos M. Nobles declared testamentary in nature and, thus, subject to the law of wills, and inoperative as a deed. Defendants filed a motion to dismiss, which was denied. Plaintiff then filed a motion for judgment on the pleadings, and defendants filed a motion for summary judgment. Following a hearing on these motions, the trial court entered an order which stated, in part:

“Upon consideration of the pleadings, and process, the stipulations of the parties, the evidence offered in support of the said motions, and the arguments of counsel for both parties, the Court concludes that there is no dispute as to any material fact, and that the said instrument should be construed as a present conveyance of a future estate, that is, that a life estate was reserved in Amos M. Nobles and a vested remainder was created in the grantee, Willie G. Nobles. Accordingly, the Defendants are entitled to judgment as a matter of law.”

Fountain then filed his notice of appeal to this court.

Fountain argues, on appeal, that the trial court erred in granting summary judgment for defendants. He maintains that the ultimate factor in determining whether an instrument is a will or a deed is the intent of the executing party. He further argues that the intention of Amos M. Nobles as regards the nature of the instrument is not apparent from the language of the instrument on its face. Thus, he says, the court should have, in a full trial on the merits, proceeded to consider circumstances attendant to the execution of the instrument in order to determine the true intent of Mr. Nobles. We agree.

This court, in Smith v. Davis, 199 Ala. 687, 688-89, 75 So. 22 (1917), said:

“When a written instrument conveying real property may on its face operate either as a deed or as a will, it must be determined whether it is so executed as to operate as either; and then the controlling inquiry is, which operation and effect the maker intended it to have. That is to say, whether the maker intended to pass a present interest or estate to the grantee, or an estate to vest on the death of the maker or grantor. This intention is to be ascertained not only from the instrument itself, but from the facts and circumstances attending its execution. — Abney v. Moore, Adm’r, 106 Ala. 131, 18 South. 60; Elmore v. Mustin, 28 Ala. 309; Daniel v. Hill, 52 Ala. 430; Hall v. Burkham, 59 Ala. 349; Sharp v. Hall, 86 Ala. 110, 5 South. 497, 11 Am.St.Rep. 28; Dunn v. Bank, 2 Ala. 152.”

Furthermore, in Sharp v. Hall, 86 Ala. 110, 114, 5 So. 497, 499 (1888), the court stated:

“[A]ll the attending circumstances may be put in proof, as aids in determining whether the maker intended the paper should operate as a deed or a will, whenever it is so framed as to postpone actual enjoyment under it, until the death of the maker. Gillham v. Mustin, 42 Ala. 365; Daniel v. Hill, 52 Ala. 430; Campbell v. Gilbert, 57 Ala. 569; Jordan v. Jordan, 65 Ala. 301; Rice v. Rice, 68 Ala. 216; Lee v. Shivers, 70 Ala. 288; 1 Big. Jarman on Wills, 25; Gage v. Gage, 12 N.H. 371; Mealing v. Pace, 14 Ga. 596, 630; Symmes v. Arnold, 10 Ga. 506; Jackson v. Jackson, 6 Dana, 257.”

See also Seay v. Huggins, 194 Ala. 496, 500-01, 70 So. 113, 114 (1915).

The judgment is reversed and the cause remanded to the circuit court for trial. We opine that summary judgment was improper.

REVERSED AND REMANDED.

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


author: PER CURIAM. EMBRY, Justice

text:
    Harriet S. CROWLEY, Executrix of the Last Will and Testament of Vassie A. Smith, Deceased v. S.E. BASS and Mary Kathleen Bass.
    82-198.
    Supreme Court of Alabama.
    Jan. 27, 1984.
    Jack W. Smith of Smith & Smith, Do-than, for appellant.
    James W. Kelly of Kelly, Knowles & Lee, Geneva, for appellees.
   ON APPLICATION FOR REHEARING

PER CURIAM.

After further consideration of this case by the entire Court, the original opinion is withdrawn and the following is entered as the opinion of the Court.

This case involves an action filed by Harriet S. Crowley, executrix, to quiet title to real property owned and possessed by the decedent at the time of her death. The case was submitted on the pleadings and oral testimony before the court without a jury. The trial court entered a judgment which held that the instrument in question created an option which was “... not unenforceable pursuant to Section 35-4-76, Code of Alabama (1975),” and which was binding on the executrix and heirs of Vas-sie A. Smith.

Yassie Smith executed an instrument styled “Option to Purchase Property,” granting S.E. and Mary Kathleen Bass the right to purchase the real estate upon which Smith’s home was situated. The instrument provided that for a period of one year following Smith’s death the Basses were to have the unqualified option of purchasing the property described in the instrument for the sum of $10,000 and that Smith, her successors, heirs, executors, and assigns would be bound to carry out its terms. The parties in the instrument did not provide for any benefit to pass from the Basses to Smith to support her promise to sell the property.

On January 24, 1981, Yassie Smith died testate, and her will was duly probated. Letters testamentary were issued to Harriet S. Crowley, her granddaughter. In June of 1981, Crowley was advised that the Basses had elected to exercise the right granted in that “option” instrument executed by her grandmother, which instrument had been executed separately from her will.

Crowley filed her complaint against the Basses under the provisions of Code 1975, § 6-6-540, to quiet title to the property in dispute. She alleged that any instrument under which defendants might claim an interest in or title to the disputed property created no such interest or title because: such purported instrument had been rescinded by defendants; the purported option was testamentary in nature and did not satisfy the statutory requirements for a will; and “said instrument or instruments were not according to the requirements of the law and were in fact ilegally [sic] signed.” The Basses answered, asserting the validity of the option and alleging that they had exercised it within the time limitation specified and that they were ready, willing, and able to comply with its terms.

An option to purchase land is neither a sale nor an agreement to sell. “It is simply a contract by which the owner of property agrees with another that he shall have the right to buy the property at a fixed price within a certain time.” Holk v. Snider, 294 Ala. 318, 321, 316 So.2d 675, 677 (1975). In such a contract two elements exist: “[FJirst, the offer to sell which does not become a contract until accepted and, second, the completed contract to leave the offer open for a specified time.” McGuire v. Andre, 259 Ala. 109, 114, 65 So.2d 185, 189-90 (1953).

“A binding option contract requires a valuable consideration.” 8A J. Grimes, Thompson on Real Property § 4443, at 261 (1963). An option must be supported by some consideration to render it more than an offer revocable before acceptance. Bethea v. McCullough, 195 Ala. 480, 488, 70 So. 680, 683 (1916). The amount of the consideration is generally immaterial, but if an option is not supported by consideration, the offer is a mere gratuity which may be withdrawn at any time before acceptance. 8A J. Grimes, supra, § 4443, at 262-63.

The instrument in the present case provided that the defendants were to have the unqualified right of purchasing the property for the period of one year following Smith’s death. The death of an optionor before the exercise of the option causes the option to lapse if the option is unsupported by consideration. Cowin v. Salmon, 244 Ala. 285, 293, 13 So.2d 190, 197 (1943). An option does not lapse at the death of the optionor if it is supported by a valuable consideration, even though, it has not been exercised. The option executed by Smith, by its own terms, could not be exercised before her death, and it would be unenforceable against her estate in the absence of a valuable consideration.

While the trial court did not make a specific determination as to the issue of consideration, both parties present that issue in their briefs to this Court. Appellees assert that an option to purchase land will not fail for lack of consideration, because, they say, it comes within the purview of Code 1975, § 35-4-34. Section 35-4-34 provides:

“No deed or other conveyance creating or transferring any interest in land shall be invalid or ineffective because of the fact that it does not recite a good or valuable consideration or no such consideration exists or is given; provided that this section shall in no way affect any equitable rights or remedies of the parties to the deed or other conveyance.”

An option to purchase property does not fall within the intended area of operation of § 35-4-34. “In the absence of a manifested legislative intent to the contrary, or other overriding evidence of a different meaning, legal terms in a statute are presumed to have been used in their legal sense.” 2A D. Sands, Sutherland Statutory Construction § 47.30 (4th ed. 1973) (footnotes omitted). “Deed” and “conveyance” in their most common legal usage refer to a transfer of title to land from one person to another. Black’s Law Dictionary 301, 373 (5th ed. 1979). An option to purchase property does not transfer title to land, Shaffer v. Reed, 437 So.2d 98, 99 (Ala.1983), and does not come within the commonly used legal meaning of “deed” or “conveyance.”

It is a well established rule of statutory interpretation that the law favors rational and sensible construction, and statutes that can be interpreted to change longstanding principles of the common law are strictly construed. 2A D. Sands, Sutherland Statutory Construction § 45.12 (4th ed. 1973). We do not'believe the Legislature, in approving § 35-4-34, could have intended to abolish the long established requirement of consideration in contracts or options for the purchase of land. An option to purchase land does not come within the purview of § 35-4-34.

As mentioned earlier in this opinion, the trial court found the option binding on the estate of Yassie A. Smith, without a specific determination as to the issue of consideration. The judgment is reversed, and the case is remanded to allow the trial court to entertain the issue of consideration in light of this opinion.

REHEARING GRANTED; ORIGINAL OPINION WITHDRAWN; REVERSED AND REMANDED.

TORBERT, C.J., and MADDOX, FAULKNER, JONES, ALMON, SHORES, BEATTY and ADAMS, JJ., concur.

EMBRY, J., dissents.

EMBRY, Justice

(dissenting).

I.

The parties agree that Crowley’s action is a statutory one to quiet title. The allegations of her complaint acknowledge that the Basses claimed title or the right to title because of the option given them by Smith during her lifetime. Regarding the question of lack of consideration, not litigated below and permissibly raised here for the first time, in my view the Basses correctly contend that the provisions of § 35-4-34, Code 1975, dispel any doubt about that contention. Section 35-4-34 provides:

“No deed or other conveyance creating or transferring any interest in land shall be invalid or ineffective because of the fact that it does not recite a good or valuable consideration or no such consideration exists or is given; provided that this section shall in no way affect any equitable rights or remedies of the parties to the deed or other conveyance.”

II.

The option states, with regard to the exercise of it:

“1. The owner does hereby give and grant unto S.E. Bass and Mary Kathleen Bass an option to purchase the above described property for the sum of $10,-000.00 upon her death and this option shall be binding for a period of one year following her death during which time the said purchasers shall have the unqualified option of purchasing the above described property for the said sum of $10,000.00, and at the option of the purchaser, he may pay cash for the property or acquire a deed to the property from the Executor and execute a real estate mortgage and security note to pay for the property over a ten year period in monthly installments with interest at 5% per annum.”

The option was effective from the date of the execution thereof up to a period of one year following the death of Smith, or for a duration of seven years; thus satisfying the requirements of § 35-4-76(a), Code 1975:

“(a) No option to purchase any interest in land, other than an option limited in favor of a lessee and exercisable at a time not later than the end of the term of a lease or any extension or renewal thereof, or an option to repurchase reserved by the grantor in a deed, shall be valid or enforceable for a period of more than 20 years. If any such option may, by the terms of the instrument creating it, continue to exist for longer than 20 years, it shall terminate and cease to be enforceable 20 years after the time of its creation. Where the instrument creating any such option shall place no limit upon the duration of the option or otherwise state the terms controlling the duration of the option, the option shall cease to be enforceable two years after the time of its creation. This section shall not apply to options created prior to January 31, 1972.” (Emphasis added.)

Although the option was capable of running for more than twenty years, it did not in fact. It was effectively exercised during its stated duration and was enforceable.

III.

I agree with the Basses’ contention that the exercise of the valid and enforceable option executed in a manner sufficient to comply with the laws regarding conveyances of real estate is a claim of title to or interest in real property and is not a claim for payment of a debt, services rendered, or other claims governed by the Statute of Nonclaim: § 43-2-350, Code 1975. Analogous to the exercised valid option case are those situations in which this court has held it not necessary to file a claim against the decedent’s estate in order to preserve a specific lien upon a decedent’s property. For example, in Wadsworth v. Hannah, 431 So.2d 1186 (Ala.1983), where the deceased owner of real estate had intended to convey the property inter vivos to his daughters and their husbands and they had performed valuable services for the deceased as consideration for the anticipated transfer and in reliance thereon, as well as prepared the deeds for the decedent’s signature, this court found that the daughters and their husbands were vested with equitable title to the property in question. See also Traweek v. Hagler, 199 Ala. 664, 75 So. 152 (1917); Rives v. Cabel, 213 Ala. 206, 104 So. 420 (1925). These cases have not been overruled or modified. Also analogous is the right of redemption after foreclosure of a mortgage, again not required to be filed as a claim against the estate.

Accordingly, I would affirm the judgment below.


author: ESDALE, Clerk.

text:
    OPINION OF THE CLERK.
    Opinion No. 42.
    Supreme Court of Alabama.
    Feb. 3, 1984.
   ESDALE, Clerk.

RULE 7, ALABAMA RULES OF JUDICIAL ADMINISTRATION — FILING COSTS — APPLICATION FOR HEARING PURSUANT TO CODE 1975, § 32-13-4

Mr. Allen L. Tapley, Administrative Director of Courts, has submitted to me, as Clerk of the Supreme Court of Alabama, pursuant to Code 1975, § 12-2-19(d), the following inquiry:

“Whether the circuit or district court clerk would be authorized to collect the filing fee otherwise prescribed for civil cases in Section 12-19-71, from the owner, secured party, or lienholder upon his application to the Court for a hearing as provided in [Section 32-13-4, Code of Alabama, 1975.]”

My answer to the question is in the affirmative. Rule 7 of the Alabama Rules of Judicial Administration reads as follows:

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

“Consolidated fee structure” in Rule 7 means the fees prescribed in Chapter 19 of Title 12, Code of Alabama, 1975. See, Opinion of the Clerk, No. 11, 356 So.2d 636 (Ala.1978); Opinion of the Clerk, No. 21, 375 So.2d 1066 (Ala.1979). There is no provision under the consolidated fee structure providing for an express cost for the filing for a hearing pursuant to Code 1975, § 32-13-4, to determine if a motor vehicle is abandoned.

Section 32-13-4, Code 1975, to which the inquiry refers, reads in pertinent parts as follows:

“(a) Any automobile dealer, wrecker service or repair service owner, or any person or firm on whose property a motor vehicle is lawfully towed at the written request of a law-enforcement officer shall give written notice to the owner, secured parties of record, and known lienholders, if any, at least 30 days prior to the date of the sale of the motor vehicle advising of ... (5) the right of the owner, secured parties or lienholders to contest the right to sell such vehicle by the filing within 10 days before the date of the sale of the vehicle of an application for hearing to be conducted before the judge of the district court or circuit court of the county in which the sale is to be held. The application for hearing shall be on such a form as may be prescribed by the department of court management of the state of Alabama.
“(c) If no application for hearing is made by the owner, secured parties, or lien-holders, the vehicle may be sold at the time and place designated in the notice of sale. If application for hearing is made by the owner, secured parties, or lien-holders, then all such persons shall be joined as parties and the judge of the district court or circuit court shall conduct a hearing to determine if the vehicle is an abandoned vehicle as defined by this chapter and should be sold in the manner prescribed herein. The vehicle shall not be sold pending the decision by the district or circuit court judge. If the judge shall determine that the vehicle is abandoned and should be sold, the vehicle may be sold after notice of the date and place of the sale is given by newspaper publication as prescribed in section 32-13-3. If the hearing is conducted by the judge of the district court, any person aggrieved by the decision rendered by the judge of the district court may appeal to the circuit court of the judicial circuit wherein the hearing was held by filing notice of appeal in the time and in the manner prescribed by law.”

“Case” has been defined as a “state of facts which furnishes occasion for the exercise of jurisdiction of a court of justice.” State v. Montevallo Coal Mining Company, 29 Ala.App. 318, 197 So. 82, 85 (1940); Opinion of the Clerk, No. 11, 356 So.2d 636 (Ala.1978). The application for a hearing by the owner, secured parties, or lien-holders, is a request by the applicant, or applicants for the Court to exercise its jurisdiction to determine, if in fact, the motor vehicle in question is abandoned.

It is my opinion that the application for a hearing pursuant to Code 1975, § 32-13-4, is the filing of a case within the meaning of the term “eases filed” in Code 1975, § 12-19-71; and a docket fee shall be collected upon application for a hearing.