author: PER CURIAM. TORBERT, Chief Justice

text:
    Ex parte Randy OWEN, et al. (In re DARE PRODUCTIONS, INC., a corporation v. Randy OWEN, Teddy Gentry, Jeffrey Cook, and Mark Herndon, d/b/a “Alabama,” etc., et al.)
    82-381.
    Supreme Court of Alabama.
    Aug. 12, 1983.

      William D. Scruggs, Jr. and Jere C. Seg-rest, Fort Payne, for petitioners.
    Wade H. Baxley and Charles H. McDou-gle, Jr. of Ramsey & Baxley, Dothan, for respondents.
   PER CURIAM.

This action was filed in Houston County by the plaintiff, Dare Productions, Inc., a corporation, against individual defendants Randy Owen, Teddy Gentry, Jeffrey Cook, and Mark Herndon, d/b/a “Alabama,” an unincorporated association; Wild Country, Inc., a corporation; Morris & Associates, Inc., a corporation; and Dale Morris. The complaint sought damages for an alleged breach of contract, fraud and deceit.

All defendants filed a joint motion to dismiss the case or, in the alternative, to have it transferred to the Circuit Court of DeKalb County. This motion was based on the following grounds:

1. The four individual defendants are all residents of DeKalb County;

2. Wild Country, Inc., is an Alabama corporation whose principal place of business is in DeKalb County;

3. Morris & Associates, Inc., is a Tennessee corporation with its principal place of business in Davidson County, Tennessee;

4. Dale Morris is an individual and resident of Davidson County, Tennessee;

5. “Alabama” is not a legal entity, but to the extent that it is an association, the association exists in DeKalb County;

6. Neither Wild Country, Inc., Dale Morris & Associates, Inc., nor the four individual residents of DeKalb County maintain offices or conduct business in Houston County;

7. The contract sued upon was executed in Nashville, Tennessee, and its intended place of performance as shown by the contract was Salem, Virginia;

8. The alleged fraud or misrepresentations, if any, occurred in Tennessee.

Affidavits were filed by both sides, and the following facts were established.

Dale Morris & Associates, Inc., is a Tennessee corporation of which Dale Morris is a stockholder, officer, and director. Dale Morris & Associates, Inc., is not qualified to do business in the State of Alabama, but it is the exclusive talent agent for Owen, Gentry, Cook, and Herndon, d/b/a “Alabama,” a country music group of professional musicians which has for the past several years performed on a regular basis throughout Alabama and the nation.

The group “Alabama” performed two concerts in Houston County, Alabama, in 1981. Dempsey Eugene Cooper of Dothan was one of the promoters of these concerts, and he had some discussion in Houston County with Dale Morris of Dale Morris & Associates, Inc., about future dates that the group “Alabama” had available for concerts. The discussions continued by telephone and, finally, a contract was negotiated between Ken Cormier Productions, Inc., and Owen, Gentry, Cook, and Herndon, d/b/a “Alabama,” whereby “Alabama” agreed to perform in concert on October 30, 1981, at the Salem-Roanoke Valley Civic Center in Salem, Virginia, and Ken Cormier Productions, Inc., agreed to pay “Alabama” $38,500 as consideration for their services. The parties agreed by contract that Ken Cormier Productions, Inc., had the right, at its option, to videotape the performance and to market these video rights, in which case “Alabama” was to receive $25,000 plus 25% of the gross sales of the video rights. Ken Cormier Productions, Inc., paid $7,000 to “Alabama” as a deposit to assure performance.

Ken Cormier Productions, Inc., changed its name to Dare Productions, Inc., the plaintiff in this case, on September 14,1981. Thereafter, it and “Alabama” through its agent Dale Morris & Associates, Inc., entered into a contract replacing the earlier contract between Ken Cormier Productions, Inc., and “Alabama.” Under the replacement contract, plaintiff agreed to pay “Alabama” $31,500 as consideration to perform in Virginia, and the parties also agreed that the plaintiff had the right, at its option, to videotape the performance and to market these rights, in which ease “Alabama” was to receive $25,000 plus 25% of the gross sales. Plaintiff paid “Alabama” and Wild Country, Inc., a combined total of $56,500 under the replacement contract.

“Alabama” performed in concert in Salem, Virginia, on October 30, 1981, in the Salem-Roanoke Valley Civic Center, leased by the plaintiff. The performance was videotaped by the plaintiff, which thereafter attempted to market the videotapes, until it was informed that Wild Country, Inc., and “Alabama” are and were at all times relevant to the contract made with Ken Cormier Productions, Inc., and the plaintiff, under a contract with RCA corporation, which gave RCA the exclusive right to market and distribute video rights of “Alabama” and Wild Country, Inc.

RCA demanded that the plaintiff cease and desist from any effort to market the video rights, and attorneys for Dale Morris & Associates, Inc., also informed plaintiff that it did not have authority to market the video rights acquired under the contract.

Based upon these facts, the trial court denied the motion to dismiss or, in the alternative, transfer venue to DeKalb County. The defendants then filed this petition for writ of mandamus, in which they describe the relief sought in the following manner:

“The Defendants seek an Order from the Supreme Court of Alabama directing the Honorable Ron Story, Circuit Judge, to transfer the case to the Circuit Court of DeKalb County, Alabama, the only location where venue is proper as to the Defendants.
“The Defendants, Dale Morris and Dale Morris Associates, Inc. solemnly represent to this Court as previously represented to the Circuit Court below that the question of jurisdiction over the non resident Defendants is raised as to the question of venue and jurisdiction of the Circuit Court of Houston County, Alabama, and that if this cause is transferred to the Circuit Court of DeKalb County, Alabama, Dale Morris and Dale Morris Associates, Inc., will not again raise the question of jurisdiction in that Court but will fully submit by appropriate answer to the Circuit Court of DeKalb County, Alabama.”

The defendant/petitioners’ argument is, upon careful analysis, directed to three separate issues, each controlled by different rules.

First, we address their argument that the Circuit Court of Houston County lacks in personam jurisdiction over Dale Morris, a resident of Tennessee, and Dale Morris & Associates, Inc., a Tennessee corporation not qualified to do business in Alabama. These two defendants are subject to that court’s jurisdiction if they come within any of the provisions of A.R.Civ.P. 4.2(a)(2), which controls this issue. In the language of the rule, they are subject to this state’s jurisdiction if they have sufficient contacts with this state so that subjecting them to suit here does not offend due process. The rule provides, in part:

“(2) Sufficient Contacts. A person has sufficient contacts with the state when that person, acting directly or by agent, is or may be legally responsible as a consequence of that person’s
“(A) transacting any business in this state;
“(B) contracting to supply services or goods in this state;
“(C) causing tortious injury or damage by an act or omission in this state including but not limited to actions arising out of the ownership, operation or use of a motor vehicle, aircraft, boat or watercraft in this state;
“(D) causing tortious injury or damage in this state by an act or omission outside this state if the person regularly does or solicits business, or engages in any other persistent course of conduct or derives substantial revenue from goods used or consumed or services rendered in this state;
“(I) otherwise having some minimum contacts with this state and, under the circumstances, it is fair and reasonable to require the person to come to this state to defend an action. The minimum contacts referred to in this subdivision (I) shall be deemed sufficient, notwithstanding a failure to satisfy the requirement of subdivisions (A)-(H) of this subsection (2), so long as the prosecution of the action against a person in this state is not inconsistent with the constitution of this state or the constitution of the United States.”

Both Dale Morris and Dale Morris & Associates, Inc., have contacts with the State of Alabama sufficient to meet the test of Rule 4.2(a)(2). Dale Morris arranged the concert in Dothan. He was physically present in Dothan during the performance. His agency was paid on behalf of the group “Alabama” there and partly negotiated there the contract sued upon here. In addition, Dale Morris & Associates, Inc., is, according to Dale Morris’s affidavit, the exclusive agent for the group “Alabama,” which has performed and continues to perform innumerable concerts in the State of Alabama, each of which results in financial gain to Dale Morris & Associates, Inc., as well as to Dale Morris individually. It cannot be said that Dale Morris and Dale Morris & Associates, Inc., a corporation, have not transacted business in the State of Alabama.

It certainly does not offend traditional notions of fair play and substantial justice to require these defendants to defend this action in Alabama. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); Ex parte British Steel Corp., 426 So.2d 409 (Ala.1982); Bryant v. Ceat S.p.A., 406 So.2d 376 (1981); cert. den., 456 U.S. 944, 102 S.Ct. 2008, 72 L.Ed.2d 466 (1982); Semo Aviation v. Southeastern Air ways Corp., 360 So.2d 986 (1978); Sells v. International Harvester Co., 513 F.2d 762 (5th Cir.1975).

The second and most forceful argument advanced by the petitioners relates to venue, as distinguished from jurisdiction. In fact, they offer to waive any objection to jurisdiction if the case is transferred from Houston to DeKalb County for trial. We again acknowledge that some of our cases have not been clear in distinguishing jurisdiction and venue. In City Stores Co. v. Williams, 287 Ala. 385, 252 So.2d 45 (1971), the Court quoted with approval the following from Pepperell Mfg. Co. v. Alabama National Bank, 261 Ala. 665, 75 So.2d 665 (1954):

“ ‘The terms “jurisdiction” and “venue” are often confused and loosely used. In its pure sense “jurisdiction” means the power of a court to entertain and consider a cause, and render a binding judgment therein. “Venue” refers to the court in which for the sake of convenience or policy considerations the cause is to be tried.’ ”

What then is the law in this state with regard to venue in a suit against a foreign corporation not qualified to do business in this state but, in fact, doing business here? Section 6-3-7, Code 1975, states that a foreign corporation may be sued in any county in which it does business by agent. This statute, however, applies only to foreign corporations which are qualified to do business in the state. It is not applicable to a foreign corporation which does business within this state, but does not qualify to do so. St. Mary’s Oil Engine Co. v. Jackson Ice & Fuel Co., 224 Ala. 152, 138 So. 834 (1931). Nor does § 232 of the Constitution apply to fpreign, unqualified corporations. That constitutional provision and the statutes implementing it require foreign corporations to have a known place of business and to designate an agent upon whom process may be served.

A foreign, unqualified corporation doing business in Alabama may be sued in any county in this state when effective service of process has been obtained. Johnson Publishing Co. v. Davis, 271 Ala. 474, 124 So.2d 441 (1960); and St. Mary’s Oil Engine Co. v. Jackson Ice & Fuel Co., supra.

Dale Morris & Associates, Inc., is a foreign, unqualified corporation, which actually does business within the State of Alabama. It was properly served under A.R.Civ.P. 4.2(b)(1). Thus, venue in Houston County is proper.

Prior to the adoption of the Alabama Rules of Civil Procedure and with them the merger of law and equity, joinder of parties and causes of action was very limited. If there was a joinder of more than one defendant, the predecessor of § 6-3-2 (Code 1940, Tit. 7, §§ 54, 294) provided that venue was proper if the action was commenced at the residence of one of the defendants. With the adoption of the rules, joinder of claims and parties became much less restrictive, requiring a less restrictive rule with respect to venue in cases involving multiple claims and parties. This resulted in Rule 82(c), A.R.Civ.P.:

“(c) Venue Where Claim or Parties Joined. Where several claims or parties have been joined, the suit may be brought in any county in which any one of the claims could properly have been brought. Whenever an action has been commenced in a proper county, additional claims and parties may be joined, pursuant to Rules 13,14, 22 and 24, as ancillary thereto, without regard to whether that county would be a proper venue for an independent action on such claims or against such parties.”

Venue being proper in Houston County as to Dale Morris & Associates, Inc., a corporation, it is proper as to all defendants. Roland Pugh Mining Co. v. Smith, 388 So.2d 977 (Ala.1980).

Finally, the petitioners argue that venue is improper in Houston County because the contract sued upon was executed in Nashville, Tennessee, and the place of performance was Virginia.

If there were no additional contacts with the State of Alabama than the contract sued upon, we might agree that this state lacked jurisdiction over the defendants, although the contract was partially negotiated in Alabama. However, as noted earlier, the corporate defendant’s contacts with the State of Alabama were substantial and far greater than partially negotiating this one contract here.

The petitioners’ argument in this regard is more related to the applicable law which should be applied to the merits of the case.

Whether the courts in Alabama have in personam jurisdiction over a defendant in an action for breach of contract is a different question from what law governs the merits of the case. On the latter issue, Alabama follows the traditional view that a contract is governed as to its nature, obligation, and validity by the law of the place where it was made, unless the parties intend the law of some other place to govern, or unless it is to be wholly performed in some other place. New York Life Ins. Co. v. Scheuer, 198 Ala. 47, 73 So. 409 (1916). We cannot say, given the limited facts before us, what law should be applied in this case. We can and do hold, however, that the Circuit Court of Houston County has jurisdiction over the defendants and that the trial court properly denied the motion for transfer to DeKalb County.

The petition for writ of mandamus is denied.

WRIT DENIED.

All the Justices concur, except TOR-BERT, C.J., who dissents.

TORBERT, Chief Justice

(dissenting).

From the holding of the majority, that venue being proper in Houston County as to Dale Morris & Associates, Inc., it is proper as to all defendants, I respectfully dissent. The majority opinion in effect determines the venue rights of Alabama residents to be secondary to those of a foreign corporation not qualified to do business in this state. This is a result never intended by our statutes, case law, or Rules of Civil Procedure.

The instant case involves a multiparty action in which resident individual and corporate defendants are joined with non-resident individual and corporate defendants. Traditionally the joinder of claims and of parties in this state has been very limited; however, with the passage of the Alabama Rules of Civil Procedure and the consequent merger of law and equity, joinder has become much less restrictive. Rule 82(c), A.R. Civ.P., set forth in the majority opinion, covers venue where claims or parties are joined. It was designed to provide for a more liberal joinder policy than had previously existed in Alabama. Rule 82(c), A.R. Civ.P. (committee comments). I do not think, however, that this liberalizing policy was intended to be carried to the extent that the majority takes it today. Both the Alabama Constitution and the Code of Alabama provide that rules promulgated by this Court “shall not ... affect the jurisdiction of circuit and district courts or venue of actions therein.” Ala. Const, of 1901 amend. 328, § 6.11; Code 1975, § 12-2-7(4). Therefore, the only legal effect of the Rules of Civil Procedure is simply to set forth, and perhaps clarify, the statutes and case law of this state as to venue.

Embodied in Rule 82(c) is the general rule that venue good as to one defendant is good as to all. Roland Pugh Mining Co. v. Smith, 388 So.2d 977 (Ala.1980); Medical Service Administration v. Dickerson, 362 So.2d 906 (Ala.1978). This rule should not be absolute. It is subject to the limitation that a foreign corporation qualified to do business in the state can only be sued in a county in which it does business, regardless of whether it is sued jointly with someone in another county as to whom venue in that county is good. Ex Parte Western Union Telegraph Co., 200 Ala. 496, 76 So. 438 (1917); Alabama Warehousing Co. v. Hyatt, 26 Ala.App. 117, 154 So. 313 (1934). Also, this Court in Hodges v. General Shale Products Corp., 346 So.2d 416 (Ala.1977), overruling Van Dyke v. Battle, 1 Stewart 218 (Ala.1827), held that venue in a civil action against more than one defendant may be changed as to one defendant without changing venue as to all.

This case presents us with a confronta- ■ tion between two general principles of law regarding venue. Dale Morris & Associates, Inc., is a Tennessee corporation not qualified to do business in the State of Alabama. The law in this state with respect to venue as to such a defendant is that a foreign, unqualified corporation doing business in the state may be sued in any county where service of process has been made. St. Mary’s Oil Engine Co. v. Jackson Ice & Fuel Co., 224 Ala. 152, 138 So. 834 (1931); Johnson Publishing Co. v. Davis, 271 Ala. 474, 124 So.2d 441 (1960). In conflict with this rule is the law in this state with regard to venue in actions against resident individuals. Residents of this state have a right to be sued in suits ex-contractu in the county of their residence. Code 1975, § 6-3-2(a)(2); Rule 82(b)(1)(A). Four of the defendants joined in this action maintain permanent residences in DeKalb County, Alabama.

The majority found that Dale Morris & Associates, Inc. actually does business within the state and was properly served with process under A.R.Civ.P. 4.2(b)(1). Thus, venue as to it was proper in Houston County. The majority then applied Rule 82(c) to find venue proper as to all the defendants. Certainly the venue rights of residents are superior to those of a foreign corporation not qualified to do business in this state. As I stated in my dissent in Ex Parte Cummings, Gazaway & Scott, Inc., 386 So.2d 732 (1980) (Torbert, C.J. dissenting), “It is my opinion that the correct rule is that ‘One who resides in the state is not to be denied the right to be sued in the county wherein he resides by being joined with a defendant who is not a resident of the state, although the venue is proper as to such person.’ 92 C.J.S. Venue § 100 at 809 (1955).” Since non-resident individual defendants and unqualified foreign corporations are treated similarly, St. Mary’s Oil Engine Co. v. Jackson Ice & Fuel Co., supra; Rule 82(b)(2), A.R.Civ.P., that rule should be construed to mean that one who resides in the state is not to be denied the right to be sued in the county wherein he resides by being joined with a defendant which is a foreign corporation not qualified to do business in the state, although the venue is proper as to such corporation.

As we said in Jefferson County Savings Bank v. Carland, 195 Ala. 279, 282, 71 So. 126, 127 (1916), “The privilege, which a resident of this state has, of being sued in the county of his permanent residence, is personal to him.” The decision reached by the majority is not in accord with this statement and discriminates against our own residents. Alabama case law did not contemplate this unfair result, nor do I believe this Court intended such when it adopted the Rules of Civil Procedure.

The trial court, aside from denying the defendants’ original motion, had three alternatives: dismissal, which is not called for in this instance, transfer of the case as to all the defendants, or transfer of the case as to the defendants as to whom venue was improper. Hodges v. General Shale Products Corp., supra. I would grant the writ petitioned for and order the case transferred to the proper county, i.e., DeKalb, based upon the venue rights of our residents.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    STATE of Alabama and Harry Lyon v. Hubert TAYLOR.
    82-725.
    Supreme Court of Alabama.
    Aug. 12, 1983.

      I. Harry Lyon, Pelham, for appellants.
    William A. Jackson, Birmingham, for ap-pellee.
   PER CURIAM.

Governor George C. Wallace appointed his wife’s brother, Hubert Taylor, to a vacancy on the Court of Criminal Appeals. Harry Lyon, the appellant here, filed a quo warranto action, contending that the appointment violated § 41-1-5, Code 1975. The trial court held that § 41-1-5, Code, this state’s Anti-Nepotism Act, did not apply to judicial appointments. Lyon appealed. We affirm.

The Governor is authorized by the Constitution to fill vacancies in judicial offices. Governor Wallace appointed Fred C. Folsom to the office of circuit judge of the Thirty-Second Judicial Circuit in October 1972. Folsom was related to the Governor, by marriage, within the fourth degree of affinity, as computed by the civil law rule. Owen v. State, 255 Ala. 354, 51 So.2d 541 (1951) (the Nolan Chart of Relationships and Degrees of Kindred is set out in that opinion).

At that time, the qualifications for judges were contained in Article VI, § 154, Constitution of 1901:

“Chancellors and judges of all courts of record shall have been citizens of the United States and of this state for five years next preceding their election or appointment, and shall be not less than twenty-five years of age, and, except judges of probate courts, shall be learned in the law.”

At that time, as now, the Anti-Nepotism Act, then codified at Tit. 55, § 15(1), Code 1940, as amended, and now found at § 41— 1-5, Code 1975, read as follows:

“No officer or employee of the state or of any state department, board, bureau, committee, commission, institution, corporation, authority or other agency of the state shall appoint any person related to him within the fourth degree of affinity or consanguinity to any job, position or office of profit with the state or with any of its agencies. Any person related to the appointing authority within the prohibited degree shall be ineligible to serve in any capacity with the state under authority of such an appointment, and any appointment so attempted shall be void. Whoever violates this section is guilty of a misdemeanor and shall be punished by a fine not to exceed $500.00 or by imprisonment not to exceed one year, or both. This section shall not apply, however, in the case of an appointment of a person to a position in the classified service of the state made from the register of persons eligible as certified by the state director of personnel.”

The Governor posed two questions to the Court, viz., whether the anti-nepotism statute violated the Constitution either by placing a legislative limitation on the constitutional qualifications of a circuit judge or by legislatively restricting the constitutional authority of the Governor to appoint circuit judges. Responding to these questions, the Justices said:

“Nepotism statutes, being highly penal, must be strictly construed. 67 C.J.S. Officers § 22, p. 133.
“This court has not construed our Anti-Nepotism Statute, Act No. 588, Acts of Alabama 1963, Vol. 2, p. 1285, listed in the 1958 Recompilation as Tit. 55, § 15(1). We opine that the intent and purpose of the statute is to prohibit the appointment or employment by the appointing authority of persons related to him who will serve in subordinate jobs, positions or offices of profit in the State government. Historically, that has been the reason for the enactment of such statutes throughout the United States.
“A circuit judge is a member of the Judicial Branch of the government which, under our Constitution is a separate and equal branch of the government. A judge is not subordinate to the Executive Branch of the government or the Legislative Branch of government. Once appointed, he is not responsible to the appointing authority, the Governor, or to the Legislature and neither the Governor nor the Legislature exercises any control or supervision over an appointed circuit judge. His appointive term is limited by Section 158 of the Constitution, and any subsequent and consecutive tenure is dependent on his election by the people.
“It is our opinion that the Legislature has no authority to restrict by statute the qualifications for circuit judges stated in Section 154 of the Constitution, or to impair the right of appointment of judges by Section 158 of the Constitution.
“It is, therefore, our opinion that Act No. 588 does not apply to a gubernatorial appointment of a circuit judge, and if the proposed appointee meets the constitutional qualifications for that office, he may be appointed to it.
“We are not to be understood as opining that Act No. 588 is invalid or unconstitutional. There is a proper field for its operation. But it, like all statutes, must be deemed to be limited by, and subservient to, the provisions of our State Constitution.
“Therefore, where the Constitution confers upon the Governor the power to make appointments to judicial office, and further specifies the qualifications of those eligible for such appointment, the Legislature cannot limit, by statute, those qualifications included in the Constitution, either directly or indirectly.
“Conversely, when the qualifications for appointees for positions in State government, either Executive, Legislative or Judicial, are not specified in our Constitution, then the Legislature is free to set for such appointees, any reasonable qualifications as it may deem advisable.”

Opinion of the Justices, 291 Ala. 581, 584, 285 So.2d 87 (1973).

The current constitutional provision setting out the qualifications for judges is found at Amendment 328, § 6.07, Constitution. It provides:

“Judges of the supreme court, courts of appeals, circuit court and district court shall be licensed to practice law in this state and have such other qualifications as the legislature may prescribe. Judges of the probate court shall have such qualifications as may be provided by law.”

The appellant argues that the adoption of Amendment 328, the Judicial Article, in December 1973, destroys any validity the foregoing opinion might have had as precedent and further argues that the readoption of the Anti-Nepotism Act by adopting the 1975 Code makes it applicable to judicial appointments.

We cannot agree with this argument. In Opinion of the Justices, supra, the purpose of the statute was said to be served, making it inapplicable to judicial appointments, by the fact that a judge is not subordinate, and cannot under the Constitution be subordinate, either to the executive or to the legislative branch. Neither can exercise any control or supervision over a judge, once appointed. Thus, the perceived evil which the Anti-Nepotism Act seeks to address does not arise in judicial appointments. The constitutional requirement of strict separation of powers between an executive department, a legislative department, and a judicial department supplies in a more fundamental and forceful way protection against any interference by the appointing authority with an appointed judge.

By eliminating a citizenship requirement and an age requirement from the constitutional list of qualifications and vesting in the legislature authority to prescribe additional qualifications, the framers of the new Judicial Article left to the legislature the prerogative to enlarge upon the constitutional qualifications of judges, so long as such additional qualifications are reasonable and so long as such legislation does not impinge on other provisions of the Constitution, specifically Article III, § 42.

We hold that § 41-1-5, Code 1975, does not apply to judicial appointments for the reasons stated. The judgment of the trial court is affirmed.

AFFIRMED.

All the Justices concur, except MADDOX, J., recused.


author: SHORES, Justice.

text:
    UNION SPRINGS TELEPHONE COMPANY, INC. v. ALABAMA PUBLIC SERVICE COMMISSION, et al.
    81-731.
    Supreme Court of Alabama.
    Aug. 12, 1983.

      Oakley Melton, Jr. and Michael S. Jackson of Melton & Espy, Montgomery, for appellant.
    Mark D. Wilkerson, Montgomery, for ap-pellees.
   SHORES, Justice.

Union Springs Telephone Company (Union Springs or the Company) appeals from an order of the Alabama Public Service Commission (the Commission) dated May 25,1982, and running to some eighty pages, in which the Commission denied in its entirety the application by Union Springs for a $263,000 increase in its rates for telephone services. On application of Union Springs, the Court granted supersedeas in the amount of $250,000, pending disposition of the appeal.

Counsel for the Commission and for Union Springs with admirable cooperativeness agreed upon an appellate expert (authorized by Rule 33A, Alabama Rules of Appellate Procedure), the Honorable Charles A. Zielinski, whose services have clarified and simplified the issues to be decided by this Court. Both sides agree that his definitions of the issues are accurate and objective. The Court is grateful for his assistance and for that of Professor Francis McGovern, who obtained a grant from the National Science Foundation, which made it possible for the Court to have this valuable assistance.

As noted by the expert, the contested issues in this case involve Union Springs’ cost of service, that is, the costs incurred by Union Springs to provide service to its customers. A regulated utility’s cost of service consists of two basic components: a reasonable return on its property devoted to public service, its “cost of capital”; and its operating expenses, including taxes and depreciation. The property upon which the Company is permitted to earn a specific rate of return is its statutory rate base. Generally, the statute defines rate base as the reasonable value of its property devoted to the public service, calculated by its original cost, less the accrued depreciation. Ala. Code 1975, § 37-1-80. Operating expenses are calculated on the basis of a test period, which is usually the most recent twelvemonth period for which there are complete expense data, adjusted for known and measurable changes occurring outside the test year.

The expert observed correctly that since a regulated utility’s cost of service should not exceed its revenues, an increase in rates is generally required if revenues are less than costs.

The extent of the rate increase, referred to commonly as the additional revenue requirement, is usually determined by multiplying the proper total rate by an appropriate rate of return, adding the resulting figure to a suitably adjusted test year operating expense figure, and comparing the result to a suitably adjusted test year revenue figure. The extent to which the indicated costs exceed the indicated revenues constitutes the company’s additional revenue requirement and, thus, the magnitude of the rate increase.

In the order of the Commission in this case, the Commission made numerous adjustments to the rate base and test year operating results submitted by Union Springs in support of its application for a rate increase. After making these adjustments, the commission found a revenue excess and refused to allow any rate increase. On appeal, Union Springs challenges most of these adjustments, but without waiving its objections to other adjustments, concedes that, if we reverse the Commission’s adjustments on four of the contested items, those four adjustments (if reversed) would be sufficient to make up the Company’s revenue deficiency and, thus, support the rate increase as sought, thereby enabling the Court to withhold consideration of other adjustments.

Two of these adjustments were to the rate base, and two were adjustments to operating results.

The Rate Base Adjustments

1. Unamortized Investment Tax Credits.

The expert’s summary of this issue, with which we agree, follows:

“Section 46 of the federal Internal Revenue Code grants taxpayers, including public utilities, a tax credit on money invested in certain property. Generally, investment tax credits may either be ‘normalized’ or ‘flowed through’ for regulatory accounting and ratemaking purposes. When credits are flowed through, the entire amount of the tax benefit is generally credited to the utility’s income statement in the year in which it is received, decreasing the company’s revenue requirement by that amount. When the credit is normalized, it is generally amortized over thé depreciable life of the investment to which the credit applies. Section 46(f) of the Internal Revenue Code prevents a regulated utility, such as Union Springs, from taking the investment tax credit if any part of the credit is used: (1) to reduce the utility’s expenses for ratemaking purposes; or (2) to reduce the utility’s rate base, unless the reduction is restored no less rapidly than ratably. [The reduction is restored rat-ably if it is restored in proportion to the depreciation of the item of plant to which it applies. Reg. § 1.46-6(g)(2). Alternatively, if the utility so elected within ninety days of the enactment of this provision in 1971, it may use the credit to reduce expenses, but not more rapidly than ratably, and then it may not use the credit to reduce rate base.]
“The regulations implementing Section 46(f) state that expenses will be deemed reduced if the credit is treated as operating income, since an increase in revenues has the same ratemaking effect as a decrease in expenses: the utility’s revenue requirement is reduced. 26 C.F.R. § 1.46-6(b)(4)(ii). In addition, rate base will be considered reduced if the credit is treated in any way other than as though it were capital supplied by common shareholders, since assigning a lower cost of capital rate to the amount of the credit is equivalent to reducing rate base. 26 C.F.R. § 1.46 — 6(b)(3)(ii). Thus, while the investment tax credit is designed to reduce a utility’s federal income taxes, it is not intended also to reduce the income on which those taxes are based.”

Union Springs carries an amount of un-amortized investment tax credit on its books. It proposed to reduce its rate base by the full amount of the unamortized credits. Additionally, it proposed that further amortization would not be credited to income. The Commission in its order rejected Union Springs’ proposal and included the amount of unamortized federal tax in the Company’s rate base and stated that the investment tax credit would be treated as operating income.

The Commission in this case conceded at oral argument that recent “rulings of the Internal Revenue Service subsequent to the Commission order ... actually show that the Commission decision in regard to investment tax credit was incorrect.” At the prehearing conference held in this ease subsequent to oral argument and after the expert’s report had been received, the attorney for the Commission again acknowledged, insofar as the investment tax credit treatment by the Commission was concerned, that this Court’s decisions in General Tel. Co. of the Southeast v. Alabama Public Service Commission, 424 So.2d 1288 (Ala.1982), and Continental Tel. Co. of the South v. Alabama Public Service Commission, 427 So.2d 981 (Ala.1982), require the Commission to observe amendments to the FCC Uniform System of Accounts, unless it modifies its rules. The Commission accordingly now agrees with Union Springs that $224,290, the amount of the unamortized investment tax credits should be removed from the rate base. Therefore, that part of the Commission’s order is reversed.

2. Telephone Plant Under Construction.

Union Springs agrees with the Commission that a telephone plant under construction is properly included in its rate base, but objects to the Commission’s including in the rate base, with a corresponding increase in operating revenues, $10,977 for interest during construction (I.D.C.). Again, the Commission now concedes that the FCC Uniform System of Accounts permits the treatment of I.D.C. which the Company followed, and, therefore, the Commission erroneously adjusted this item. Under the Uniform System of Accounts (USOA), interest during construction should be computed only on items of plant requiring more than six months of construction. ¶ 31.100.2, F.C.C. U.S.O.A: The Commission concedes that Union Springs was justified in treating I.D.C. as it did in its application and that the Commission was not justified in making the adjustment to this item in its order. Therefore, the order is reversed in this regard.

Adjustments to Operating Results

1. Depreciation.

The expert summarized this issue substantially as follows:

In the past, Alabama telephone companies have been authorized to use only the straight-line whole-life method of depreciation. This was also true of telephone companies regulated by the FCC. Under this method, plant equipment was depreciated according to the average service life of a vintage group of that class of equipment.

In 1980, the FCC amended Part 31 of its USOA to permit telephone companies regulated by the FCC to use either of two alternative methods of depreciation: Equal Life Group (“ELG”) and remaining-life. The ELG methodology is a refinement of the vintage group depreciation that groups plant items by their expected life spans, rather than by broader average service life classifications. The remaining-life method is more flexible than whole-life depreciation. It permits the recovery of the cost of a plant item that is retired earlier than had been anticipated.

The FCC explained the difference between whole-life and remaining-life depreciation as follows:

“The essential difference between whole-life and remaining-life depreciation rate calculations is that the former attempts to determine that annual charge that would be appropriate in the event that the current predictions of whole-life (estimated future life added to current experienced or expired life) were in fact correct. The remaining-life process proceeds on the premise that the current prediction of remaining or prospective life is correct and attempts to allocate any unrecovered or unallocated costs over that time period. That is, the original cost less accumulated reserve, or net un-recovered cost is divided by the prospective remaining-life in order to determine the annual future charges to expense.”

Property Depreciation, 83 F.C.C.2d 289 (1982).

Both ELG and remaining-life depreciation are thought to provide better matching between capital recovery and plant retirement than whole-life depreciation. Remaining-life is especially useful in periods of rapid technological advances in which estimates of service life tend to change as equipment becomes obsolete sooner than expected.

The Company proposed depreciation rates based on remaining-life and ELG depreciation methods. The Commission rejected the Company’s proposal and insisted that depreciation expenses be determined according to the straight-line whole-life methodology then prescribed by Commission policy.

The Company argues that remaining-life depreciation is authorized by the 1980 amendments to the FCC’s USOA. In Continental Tel. Co. of the South v. Ala bama Public Service Commission, supra, the Court held that the Commission’s 1968 adoption of the USOA included subsequent amendments, 427 So.2d at 986. With respect to remaining-life depreciation, we said:

“It is agreed by all parties that the whole life method of depreciation is currently applied to all utilities operating in Alabama. We refuse to mandate that the Commission utilize the particular accounting method suggested by Continental rather than the one presently used.”

427 So.2d at 991.

The Continental opinion was released on December 22, 1982. Coincidentally, on that exact date the FCC adopted its opinion and order in Docket No. 79-105, which was released on January 6, 1983. By that order the FCC overruled its prior decision in Amendment of Part 81, Uniform System of Accounts, 89 F.C.C.2d 1094 (1982), in which it held that §§ 220(a) and 220(b) of the Communications Act of 1934, as amended, 47 U.S.C. 220(a) and 220(b), did not preempt state commissions from applying different accounting and depreciation procedures for purposes of intrastate ratemaking proceedings. In its December 22, 1982, order, the FCC stated:

“Thus, we find it imperative to declare today that inconsistent state prescribed depreciation rates are preempted by the Communications Act and are accordingly void. The existence of a state statute preventing a state commission from adopting a particular method does not affect this determination. When federal preemption is involved, there is no difference between a statute and a regulation of a state commission. Both must fall in the face of overriding federal concerns and policies.”

The Commission now concedes that under the decisions of this Court in General Tel. Co. of the Southeast v. Alabama Public Service Commission, supra, and Continental Tel. Co. of the South v. Alabama Public Service Commission, supra, it must follow amendments to the USOA adopted by the FCC. It contends, however, that the FCC order entered December 22,1982, just quoted from, does not apply to intrastate telephone companies such as Union Springs, but applies only to interstate companies such as AT & T. We cannot agree with this construction of the order. It seems to us to be much broader and, although it was entered in a case involving interstate companies, it does not rest upon that narrow ground. This seems clear from the separate statement of Commissioner Fogarty, who said:

“Having dissented from the Commission’s original decision declining to preempt State accounting and depreciation rules inconsistent with those prescribed by the FCC [Amendment of Part 31, Joint Dissenting Statement of Commissioners Joseph R. Fogarty and Anne P. Jones, 89 F.C.C.2d 1109-1111 (1981)], I am pleased that the Commission has reconsidered this issue and acted to preempt such inconsistent State regulation.
“As this Order establishes in detail, a true reading of the statutory language and legislative history of Section 220(b) of the Communications Act clearly demonstrates that Congress intended FCC depreciation rules and policies to control the field.
“Even if preemption were not explicitly mandated by Section 220(b), the effective implementation of our proeompeti-tive federal telecommunications policies dictates that inconsistent State depreciation regulation be preempted by this Commission. We cannot ‘defer to the States’ on capital recovery issues. Telephone companies must be able to recover their cost of capital in a timely and effective manner if they are to price their services efficiently and to improve and expand their facilities to meet the challenges of competition and technologic innovation.
“This preemption imperative is not merely theoretical. Too many States (e.g., Alabama, Louisiana, Nebraska, Ohio, New Jersey, Michigan, Arkansas) have already refused to recognize the critical necessity of the FCC’s cost recovery principles. The resulting depreciation rate differentials are alarming: GTE of Ohio has indicated that it will be denied $7 million in capital recovery this year if the State of Ohio’s disparate depreciation treatment is allowed to prevail.
“The FCC cannot ignore the detrimental impacts of inconsistent State treatment of depreciation if our procompeti-tive policies are to have any integrity and viability. This Commission now recognizes that preemption is both mandated as a matter of law and essential as a matter of policy, and our action today has my full endorsement and support.”

We now hold, as we declined to do in Continental, that the Commission must allow remaining-life depreciation and, of course, note that it does so by its order entered on November 12, 1982. Even so, the Commission argues that its order disallowing the remaining-life methodology by Union Springs in this case should not be reversed, because Union Springs did not support its use of that method by the evidence. It argues that Union Springs presented insufficient data to justify its requested depreciation rates. The Company presented two expert witnesses, both of whom testified that the use of the whole-life method of depreciation had resulted in under depreciation and that the adoption of the remaining-life method would be more equitable in that it more closely approaches the realities of the remaining useful life of an item. The Commission did not offer any evidence to the contrary, and we think it would be unreasonable to require the Company to comply with the criteria set out in the generic order, which the Commission contends simply tracks the FCC criteria for obtaining approval for use of remaining-life method, when that order was not in existence at the time the Company sought approval of this method of depreciation.

The Commission’s counsel inquired of the appellate expert at the prehearing conference “whether allowing Union Springs to use the remaining-life depreciation in this case wouldn’t mean that future customers would have to pay for the deficiency that was created in previous years.” The expert responded that as a matter of “intergenera-tional equity,” any time there is a change in depreciation, that sort of thing can happen, but that is the result of failure to accurately predict the future. We do not think this is a sufficient reason for disallowing remaining-life depreciation methodology. The law does not require perfect prescience in this area any more than it does in other areas. It is conceded by all parties that remaining-life depreciation is a commonly accepted method, recognized in the business community generally. The FCC has now determined that it is an acceptable method for telephone companies. Union Springs offered reasonable evidence to support its use in this case, and that evidence was not disputed. Therefore, we hold that the Commission erred in disallowing remaining-life depreciation.

2. Expensing of Station Connections.

Again, the appellate expert’s summary of the position of the parties is accepted as accurate by both sides. It follows:

In the terminology of the telephone industry, a “station connection” generally consists of the material and installation cost of connecting a customer’s telephone instruments to the telephone transmission network. Under the USOA prior to 1981, the costs of station connections were capitalized and, therefore, recovered over a period of time and from the entire customer body. Ratemaking generally followed this accounting treatment and kept the charges for connecting a new customer to the network lower than they would have been if each new customer had to pay the full cost of connection at the time of connection.

In 1980, the FCC amended Part 31 of the USOA to require all telephone companies subject to its jurisdiction to account for the portion of station connection costs incurred to install inside wiring as expenses. First Report and Order in CC Docket No. 79-105, 85 F.C.Cüd 818 (1980). For ratemaking purposes, of course, expenses are recoverable immediately from the customer. Under the FCC amendment to the USOA, telephone companies could implement the change immediately (a “flash-cut” basis) or phase it in over four years.

Union Springs sought to change the accounting treatment of its station connections, in accordance with the FCC’s change in the USOA, on a flash-cut basis.

Again, the Commission rejected the proposal, stating that it was not required to follow the FCC amendments to the USOA. It now concedes that it must, as the Court held in Continental Tel. Co. of the South v. Alabama Public Service Commission, supra, where the Court, speaking through Justice Maddox, said: “[T]he Commission should have allowed expensing of station connections consistent with the recent amendment of the USOA.” 427 So.2d at 991.

By its order of November 12, 1982, the Commission has authorized Alabama telephone companies to file tariffs reflecting the accounting for station connection costs related to inside wiring and the installation of telephone sets as expenses. We hold that the Commission erred in disallowing the expensing of station connections as proposed by the Company and reverse its order in that regard.

In summary, we reverse the order of the Commission on the following four adjustments: remaining-life depreciation, interest during construction, investment tax credit, and expensing of station connections. We remand this case to the Commission for its action on its original order to conform to this opinion.

REVERSED AND REMANDED.

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


author: MADDOX, Justice.

text:
    Annie L. STOREY v. Curtis PATTERSON and Phyllis Patterson.
    82-328.
    Supreme Court of Alabama.
    Aug. 19, 1983.

      Charles P. Gaines of Gaines, Cleckler & Goodrich, Talladega, for appellant.
    Julian M. King of McCrary & King, Tal-ladega, for appellees.
   MADDOX, Justice.

This is a trespass action brought by a lot owner against the owner of a coterminous lot. This controversy arises over Annie L. Storey’s house and concrete driveway which, according to the subdivision plat and a land survey, encroached approximately twelve feet upon the undeveloped lot owned by Curtis Patterson and Phyllis Patterson, the plaintiffs. Storey raised several affirmative defenses to the trespass action, including adverse possession, estoppel, bar, and waiver. She also counterclaimed, alleging adverse possession of the concrete driveway area. She also sought relocation of the coterminous boundary line to the northern edge of the driveway.

The trial court first heard testimony on October 14, 1982, on Storey’s motion for summary judgment, which was based upon her claim to title by virtue of adverse possession. The trial court denied the motion and on November 2, 1982, the case was submitted to the trial court for a determination of the factual issues, because neither party requested a jury.

The trial court, hearing the evidence ore tenus, found that the concrete driveway constituted a continuing trespass and issued a mandatory injunction restraining Storey “and her agents, servants, or employees from allowing or suffering the driveway to be maintained, located, or situated” on the Pattersons’ property. The trial court further ordered Storey to remove the driveway and “to restore the underlying property to the same or similar condition existing prior to the encroachment.” From this judgment and subsequent denial by the trial court of her motion for a new trial or alternative relief from the judgment, Storey now appeals.

FACTS

Defendant/appellant, Annie L. Storey, is the record owner of Lot No. 6 of Block E, of the resubdivision of Blocks D and E of Frazier Subdivision, in Talladega County, Alabama. She bought Lot No. 6 in 1966 from Mr. Frazier, the developer, began construction of a house on Lot No. 6 in 1966, and moved there in 1968.

In 1977, Storey, with the assistance of Fred Cass and Hilbert Cass, poured a concrete driveway from Baker Street, which runs north and south in front of her house. The house itself is slightly over Storey’s northern boundary line, but the driveway is completely over the property line as described in the conveying instruments.

In 1977, Lot No. 7 of the same resubdivision, in which the southern boundary line is coterminous with Storey’s northern boundary line, was owned by Otha Fields. Fields conveyed Lot No. 7 to Curtis Patterson and Phyllis Patterson, plaintiffs/appellees, on August 17, 1978.

None of the deeds representing these conveyances was introduced at trial; however, witnesses testified that the deeds conveyed particular lots of the Frazier subdivision, as recorded in the Talladega County probate office, and a survey of the lots was performed by registered engineer Sidney E. Jones on June 28, 1978. This evidence was sufficient to show the location of the coterminous boundary line described in those conveyances.

Storey contends on appeal that she has title by adverse possession to land up to a line ten feet north of the house; that the Pattersons are barred, or estopped, or have waived their right to bring their suit in trespass, because they waited four years to file their complaint; and, finally, that the mandatory injunction is a manifestly unjust remedy. We affirm.

I

We see no error in the trial court’s decision to deny Storey relief based upon the defenses of bar, estoppel, and waiver. Trespass is both a legal action and an equitable action, Sherer v. Burton, 393 So.2d 991 (Ala.1981), and the applicable statutory limitations period for trespass to real property is six years. Code 1975, § 6-2-34(2). The Pattersons purchased Lot No. 7 in 1978, after the concrete driveway was built, and brought the action in 1982, well within the limitations period. Similarly, there is no merit to her contention that the trespass claim was equitably barred by laches, because the trial court could have concluded that Storey failed to show harm or prejudice resulting from the four-year delay. See Lipscomb v. Tucker, 294 Ala. 246, 314 So.2d 840 (1975) (mere delay is not sufficient for the defense of laches, but special facts which make the delay culpable must appear).

Furthermore, Storey failed to show that she relied to her detriment upon any conduct or declarations of the Patter-sons. Reliance is an essential element of estoppel. Traders and Farmers Bank of Haleyville v. Central Bank of Alabama, 294 Ala. 622, 320 So.2d 638 (1975).

Finally, we see no evidence which would have supported Storey’s defense of waiver, i.e., that the Pattersons intentionally relinquished their right to a trespass action simply by waiting four years to bring it. See O’Neal v. O’Neal, 284 Ala. 661, 227 So.2d 430 (1969).

II

The trial court was justified in finding that Storey failed to establish her claim of adverse possession to the strip of land upon which she poured the concrete driveway.

In Bussey v. Bussey, 403 So.2d 907, 909 (Ala.1981), this Court stated:

“[W]here a coterminous landowner holds actual possession of a disputed strip under a claim of right openly and exclusively for a continuous period of ten years, believing that he is holding to the true line, he thereby acquires title up to that line, even though the belief as to the correct location originated in a mistake, and it is immaterial what he might or might not have claimed had he known he was mistaken. Sylvest v. Stowers, 276 Ala. 695, 166 So.2d 423 (1964).” (Emphasis supplied.)

Such possession must be shown by clear and convincing evidence, Boren v. Roberts, 423 So.2d 208 (Ala.1982), because every presumption is in favor of the holder of legal title. Casey v. McIntosh, 361 So.2d 1040 (Ala.1978); Prestwood v. Hunt, 285 Ala. 525, 234 So.2d 545 (1970).

To prove a claim of title by adverse possession, the claimant must offer evidence to show the exact boundaries of the land he is claiming. T.R. Miller Mill Co. v. Ralls, 280 Ala. 253, 192 So.2d 706 (1966); Chastang v. Chastang, 141 Ala. 451, 37 So. 799 (1904). A court may not arbitrarily choose a boundary line between two parcels of property, Wills v. Blackwell, 386 So.2d 427 (Ala.1980), and such possession cannot be left to speculation and conjecture, Miller v. Jones, 280 Ala. 612, 196 So.2d 866 (1967).

The claimant here certainly has not presented clear and convincing evidence of a definite tract to which she claims title. She testified that in 1966, she thought the true line was at a pine tree. That tree has since been cut down, and the evidence is now disputed as to the exact former location of that pine tree. Despite Storey’s trial testimony as to what she thought was the true line, she claimed in her motion for summary judgment that the northern boundary line of Lot No. 6 “runs ... along the north line of the concrete driveway,” which, according to the subdivision plat and the Jones survey, is approximately twelve feet beyond the record line. Furthermore, she asks this Court, in her brief, to remand this case “with directions to establish the common boundary line ten feet north of Annie Storey's home.” (Emphasis added.) We note here that even if we did disagree with the trial judge on his findings of fact, we would not substitute our judgment for his. Ratliff v. Giorlando, 343 So.2d 506 (Ala.1977).

There is also disputed testimony as to the use of the claimed strip of land. Storey claims to have used the same area as a dirt driveway since she built the house. Other witnesses’ testimony and an aerial photograph taken in 1969 indicate, however, that Storey parked her car in front of her house rather than to its north side. Her own witness, Fred Cass, testified that the wooden forms he helped lay for the driveway extended six or seven feet farther north of any dirt tire tracks.

The trial court had the opportunity to observe the witnesses and hear their ore tenus testimony. Because adverse possession is considered to be a question of fact, Ratliff v. Giorlando, 343 So.2d 506 (Ala.1977); Barnett v. Millis, 286 Ala. 681, 246 So.2d 78 (1971)], we will uphold a trial judge’s finding on disputed facts, where evidence is presented ore tenus, unless it is palpably erroneous or manifestly unjust. Kendall v. Bay La Launch Community Association, Inc., 413 So.2d 1050 (Ala.1982). Based upon the evidence presented, we do not believe the trial court’s finding that Storey failed to sustain her adverse possession claim was palpably erroneous or manifestly unjust.

Ill

The mandatory injunction compelling removal of the concrete driveway and restoration of the underlying property was not a manifestly unjust remedy for the harm the Pattersons were suffering. Sto-rey’s lot is 85 feet wide, while the Patter-sons’ lot is only 80 feet wide. Consequently, the court could have concluded that the twelve-foot-wide encroachment reduced what already was a small residential lot to a lot not suitable for residential purposes, and that the encroachment thus permanently impaired the Pattersons’ use and enjoyment of their property, making the issuance of the injunction appropriate. In Smith v. Morris, 181 Ala. 279, 61 So. 276, 280-81 (1913), this Court stated:

“The rule is familiar that when injuries to realty are permanent, continuous, and of frequent occurrence, tending to ‘destroy the substance of the inheritance, or ruin the estate, or permanently impair its future use and enjoyment in the manner in which the owner has been accustomed to use and enjoy it, pecuniary compensation is inadequate/ and a court of equity will interfere and award an injunction to prevent such injuries. Hooper v. Dora Goal Mining Co., 95 Ala. 235, 10 South. 652.” (Emphasis added.)

For the foregoing reasons, the decision below is due to be affirmed.

AFFIRMED.

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

      . Storey’s attorney told the court at trial that Storey had already complied with the mandatory injunction by removing the driveway.


author: ALMON, Justice.

text:
    Donald Leroy BLY and Joan Bly v. AUTO OWNERS INSURANCE COMPANY.
    81-778.
    Supreme Court of Alabama.
    Aug. 26, 1983.

      Edward L. Ramsey, Birmingham, for appellants.
    Robert E. Cooper of Rives & Peterson, Birmingham, for appellee.
   ALMON, Justice.

This is an appeal from a summary judgment in which the plaintiffs were denied coverage under a homeowners insurance policy issued by the defendant.

Donald and Joan Bly brought suit against Timber Specialists, Inc., and Auto.Owners Insurance Company. The plaintiffs alleged that their house had been damaged by vibrations when Timber Specialists operated heavily loaded logging trucks on a nearby road.

Auto Owners denied liability for the alleged loss and moved for summary judgment. The trial court granted the motion and entered a final judgment pursuant to Rule 54(b), A.R.Civ.P.

The pertinent provisions of the policy are as follows:

“PERILS INSURED AGAINST
“This policy insures against direct loss to the property covered by the following perils as defined and limited herein:
“7. Vehicles, but excluding loss to fences, driveways and walks caused by any vehicle owned or operated by an occupant of the premises.
“ADDITIONAL EXCLUSIONS
“This policy does not insure against loss:
“2. caused by, resulting from, contributed to or aggravated by any earth movement, including but not limited to earthquake, volcanic eruption, landslide, mudflow, earth sinking, rising or shifting

We first consider whether the damage allegedly caused by the vibrations from Timber Specialists’ trucks constitutes a direct loss from vehicles under the “Perils Insured Against” portion of policy. Although the policy does not mention physical contact, the insurer insists that direct loss from vehicles requires physical contact between the vehicle involved and the property covered.

We find that the word “direct” means “immediate” or “proximate” and is not synonymous with physical contact. Such was the decision in Western Assur. Co. v. Hann, 201 Ala. 376, 78 So. 232 (1917), a case in which a policy insured “against all direct loss or damage by fire.”

“In the first place, it is argued that importance should be attached to the use of the word ‘direct’ as used in the policy insuring plaintiff ‘against all direct loss or damage by fire.’ It has been held, however, and we think correctly so, that the word ‘direct,’ used in this connection in such policies, means merely ‘immediate’ or ‘proximate’ as distinguished from ‘remote.’ ”

Western Assur. Co., supra, 201 Ala. at 378, 78 So. 232 (citations omitted).

Direct loss from vehicles means that a vehicle (or vehicles) must be the proximate cause of the loss, the meaning of “proximate” being the same as in the law of negligence. If the vibrations from Timber Specialists’ trucks were in fact the proximate cause of damage to the insureds’ home, as a matter of law the damage qualifies as a direct loss from vehicles within the “Perils Insured Against” portion of the policy-

The second question is whether the policy unambiguously excludes the alleged loss as “caused by, resulting from, contributed to or aggravated by any earth movement

The policy in one clause expressly covers direct loss caused by “vehicles.” Then, in another clause, the policy excludes coverage for “any earth movement.” The exclusion states that it includes but is not limited to “earthquake, volcanic eruption, landslide, mudflow, earth sinking, rising or shifting .... ” We must decide whether the vibrations caused by the vehicles come within the terms of the “earth movement” exclusion.

“It is a general rule of construction that exceptions to coverage must be interpreted as narrowly as possible in order to provide maximum coverage for the insured. Further, such exceptions must be construed most strongly against the company drafting and issuing the policy.” Employers Insurance Co. of Alabama, Inc. v. Jeff Gin Co., 378 So.2d 693, 695 (Ala.1979); Westchester Fire Insurance Co. v. Barnett Millworks, Inc., 364 So.2d 1137 (Ala.1978); American Liberty Insurance Co. v. Soules, 288 Ala. 163, 258 So.2d 872 (1972).

In Cook v. Continental Insurance Co., 220 Ala. 162, 124 So. 239 (1928), rev’d on rehearing, 220 Ala. 164, 124 So. 241 (1929), this Court held that an exclusion from fire insurance coverage for damage caused by an explosion did not apply where explosives were used to stop the spread of a fire in a neighboring building. The Court held that the explosion was not the type contemplated in the exclusion, but was more like damage from water or chemicals used to put out a fire. In reversing the original judgment on rehearing, the Court explicitly relied on the rule of construing exceptions favorably to the insured.

In the instant case, the enumerated types of earth movement are all natural phenomena. While the policy states that the exclusion is not limited to the specified types of earth movement, it can be reasonably concluded that the intent was to include other natural phenomena involving earth movement. This conclusion is supported by the rule of ejusdem generis, “which ordinarily limits the meaning of general words and things to the class or enumeration employed.” Merchants’ National Bank of Mobile v. Hubbard, 220 Ala. 372, 375, 125 So. 335 (1929); Sims v. Moore, 288 Ala. 630, 264 So.2d 484 (1972); Olsson v. Nelson, 248 Ala. 441, 28 So.2d 186 (1946).

The policy is at best ambiguous as to whether the vibrations caused by the passing vehicles constitute “earth movement” within the meaning of the exclusion. The trial court should have construed the exception narrowly to provide maximum coverage under the rules cited above and found that the damages from the vibrations were not excluded from coverage.

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

REVERSED AND REMANDED.

TORBERT, C.J., and FAULKNER, EM-BRY and ADAMS, JJ.


author: FAULKNER, Justice.

text:
    Joe SCOTCH v. Emris HURST, et al.
    81-891.
    Supreme Court of Alabama.
    Aug. 26, 1983.

      Michael J. Romeo, Birmingham, and Oliver P. Head of Wallace, Ellis, Head & Fowler, Columbiana, for appellant.
    Ralph E. Coleman, Birmingham, for ap-pellee.
   FAULKNER, Justice.

Defendant, Joe Scotch, appeals from an order denying his motion for new trial or amendment of judgment and from trial judgment quieting title to certain lands in plaintiffs, Emris Hurst, Harriet Clarke, and Peggy Arthur. We affirm in part; reverse in part; and remand.

In 1946, Harry Hurst purchased approximately thirty-five acres of land in Shelby County, Alabama, taking a warranty deed from George Huddleston. Hurst gave Hud-dleston a purchase money mortgage on the land to finance the purchase. In 1947, while the property was still under mortgage, Hurst and his wife, Juanita Hurst, sold a parcel of the property, containing approximately five acres, to Paul and Aldie Kelley, Juanita Hurst’s parents. The Hursts continued to make the mortgage payments on the land, including the parcel sold to the Kelleys.

Harry Hurst died intestate in 1949, leaving as his heirs his widow, Juanita Hurst, and three children, Emris O’Neal Hurst, Harriet Hurst (Clarke) and Peggy Hurst (Arthur). The children were ages 12 years, 10 years, and 4 years, respectively, at the time of their father’s death.

Following Harry Hurst’s death, Juanita Hurst and George Huddleston entered into an agreement, dated December 28, 1949, which stated:

“Said Huddleston is to foreclose the certain mortgage executed by Harry E. Hurst on April 20, 1946 to said Huddle-ston with reasonable promptness and is to buy in the property at the mortgage sale. He is thereupon to execute to Mrs. Juanita Hurst a warranty deed to that part of the land shown by her tax assessment with a clause excepting the right of redemption from the warranty.”

Purportedly, the agreement was entered into to enable Juanita Hurst to keep her home and a portion of the property. It is unclear, from the record, whether the mortgage was even in default at the time of the foreclosure.

The terms of that agreement were not . strictly followed, but the alleged intention of the agreement was accomplished through a series of transactions between Juanita Hurst and George Huddleston. In January 1950, Huddleston foreclosed on the Hurst mortgage and purchased the property himself at the foreclosure sale. On January 30, 1950, Huddleston executed a foreclosure deed to himself which described all of the property covered by the mortgage except the five-acre parcel previously sold to the Kelleys by the Hursts. The following day, January 31, 1950, Huddleston executed a statutory warranty deed conveying the property déscribed in the foreclosure deed to Juanita Hurst. The warranty deed states that Mrs. Hurst “has expressed the desire to redeem such lands from said foreclosure sale and has paid and satisfied to the undersigned George Huddleston the sum required to redeem said land.” The warranty deed reads:

“To have and to hold to the said Mrs. Juanita Hurst all as fully as can or should be under the exercise by her of her statutory right of redemption as widow of said Harry E. Hurst, her heirs and assigns forever.”

There is no evidence that Mrs. Hurst paid anything to redeem the property, nor is it shown that Mr. Huddleston required any payment. An examination of the record shows that the children of Juanita Hurst contributed nothing to the cost of said redemption nor were they asked by Mrs. Hurst to contribute.

Also on January 31, 1950, Juanita Hurst executed a warranty deed to George Hud-dleston conveying back to him the largest portion of the land she had just redeemed, approximately 25 acres, reserving for herself a small portion, about 5 acres, including her log cabin.

Later that year, 1950, Juanita Hurst married one James Foster. Following the marriage, in 1951, Juanita Hurst Foster conveyed the parcel containing the log cabin (except a small portion thereof) to her parents, the Kelleys and, in exchange, the Kel-leys conveyed to her the parcel of land (except a small portion thereof) that they had bought from Harry and Juanita Hurst. Several years later, on September 23, 1960, for some reason not reflected in the record, the Kelleys again executed a deed for the same parcel (the one they bought from the Hursts) to Juanita Hurst Foster and, that same day, Mrs. Foster conveyed the property to defendant, Joe Scotch.

Mr. Huddleston, in 1953, conveyed the 25-acre tract to W.B. McWilliams, and Mr. McWilliams, in 1955, conveyed that tract to Mid-South Development Corporation. Mid-South also acquired title to the 5-acre parcel containing the log cabin by subsequent deeds from the Kelleys to Harry W. Cowl and from Cowl to Mid-South in 1955.

Mid-South, having rejoined title to most of the original Hurst tract, then roughly subdivided the property, together with an adjoining 40-acre tract, and filed a subdivision plat of “Lincoln Park” in the Shelby County Probate Office in 1955. Mid-South executed deeds conveying various lots within the subdivision to other individual grantees, including one to Mrs. Aldie Kelley, Juanita Foster’s mother.

In 1960, Mid-South conveyed title to approximately 30 acres of the property originally owned by Hurst to Joe Scotch. As previously stated, Scotch had bought the other 5 acres of the original Hurst property from Juanita Hurst Foster, so that in 1960 he purportedly held and still holds title to all the original Hurst property (except very small portions thereof as previously noted). The original Hurst property is the subject of this lawsuit and Joe Scotch is a defendant in that regard.

The record shows that since 1960, Mr. Scotch has visited the original Hurst property very infrequently and has made no improvements thereon. Mr. Scotch did testify that he had either given or sold one lot from the property to his son and his son had built a house thereon.

The plaintiffs, Emris Hurst, Harriet Clarke, and Peggy Arthur lived on the property as children and moved away as they grew up. In 1955 Emris Hurst joined the Navy and remained away from the property until 1974, when he retired from service.

Between 1955 and 1974, Emris returned a few times to see his mother. Harriet Clarke married and moved away from the property in 1959. As for Peggy Arthur, the record merely shows that she married and moved away from the property sometime before 1960. The daughters also came back to the property for infrequent visits to their mother.

The testimony indicates that from the time they were children, plaintiffs thought that they held title to all of the original Hurst property subject to a life estate in their mother, Juanita Hurst Foster. Emris Hurst testified that he returned to the property in 1974, intending to build a house thereon. At that time he noticed that roads had been cut through the property without the family’s permission and that houses had been built on or near the edge of the property.

Mr. Hurst testified that after inspecting the property he went immediately to the Shelby County Courthouse to inquire about the improvements. He was informed that Mid-South Development Corporation had sold the property to various individuals. Mr. Hurst realized at that time that he needed to do something to protect his interest, and that of his sisters, in the property. He immediately sought legal counsel in Co-lumbiana, but was refused representation. Mr. Hurst then hired an attorney from Birmingham who purportedly worked on the case for three years before the Hurst family fired him. Mr. Ralph Coleman, who was then retained by the family as their attorney, filed suit on their behalf on May 16, 1979, to quiet title in them to all of the original Hurst property. Joe Scotch and Mid-South Development Corporation were named as defendants to the suit, along with several fictitious parties. The various individuals who had bought lots in the “Lincoln Park” subdivision from Mid-South were not made parties to the lawsuit. Mid-South failed to answer the complaint. In his answer Scotch pleaded the general issue and argued that plaintiffs’ cause of action was barred by the statute of limitations, prescription, laches, and that plaintiffs had no interest in the property because they failed to make contribution to their mother when she redeemed the property.

The trial judge, after hearing the evidence ore ten us, found in favor of plaintiffs on all counts and quieted title to the property in Emris Hurst, Harriet Clarke, and Peggy Arthur, subject to a life estate in their mother, Juanita Foster.

Defendant Joe Scotch is before this court appealing the final judgment and the trial court’s denial of his motion for new trial or amendment of judgment. Scotch’s first argument on appeal is that the trial court erred in finding that the redemption from the mortgage foreclosure in 1950 by Juanita Hurst, in her name alone, was a redemption for her children, the remaindermen, as well as for herself and that, in this ease, the remaindermen were not required to make contribution in order to secure their remainder interest. We do not agree.

It is well-settled that, in Alabama, a life tenant who redeems property after a foreclosure sale redeems for the benefit of the remaindermen as well as for herself. See Sullivan v. Parker, 228 Ala. 397,153 So. 858 (1934); Garrett v. Snowden, 226 Ala. 30, 145 So. 493 (1933); Rushton v. McLaughlin, 213 Ala. 380, 104 So. 824 (1925). It is axiomatic, therefore, that following redemption Mrs. Hurst held the property for herself and for the benefit of her children, the remaindermen. Any subsequent conveyance by Mrs. Hurst after execution of the redemption deed passed the property subject to the remaindermen’s interests.

Concerning contribution, there is authority for the proposition that the remainder-men have a duty to contribute to the expenses of redemption within a reasonable time. See Draper v. Sewell, 263 Ala. 250, 82 So.2d 303 (1955); Ward v. Chambless, 238 Ala. 165, 189 So. 890 (1939); Rushton v. McLaughlin, supra. Other cases state that the life tenant has a right to seek contribution or to interplead the remaindermen to contribute. See Garrett v. Snowden, supra; Abney v. Abney, 182 Ala. 213, 62 So. 64 (1913). A search of the available authority indicates that in every case either the life tenant was seeking contribution from a re-mainderman or claiming full title to the property due to the remainderman's failure to contribute. There are no cases in Alabama where a third party asserts lack of contribution in defense of title.

Under either line of authority, it seems clear that, in the instant case, the remaindermen have not lost their interests for failing to offer contribution. First, the life tenant, Juanita Hurst, did not ask, demand, interplead or in any way require contribution from her children at the time of redemption or anytime thereafter. Second, the remaindermen were minors at the time of the redemption and no guardian ad litem was appointed to protect their interests. Furthermore, Mrs. Hurst conveyed the property, purportedly in fee, on the same day she redeemed it, giving the children no notice or opportunity to offer contribution.

Moreover, the record indicates that Mrs. Hurst paid nothing to Mr. Huddleston to redeem the property; therefore, the re-maindermen may be considered to have paid their share of the cost of redemption, i.e. nothing. Appellant’s assertion that Mrs. Hurst paid “her right under the law to redeem” the 25-acre portion from the mortgage foreclosure is without merit, since she did in fact redeem the entire parcel (except for the parcel sold to the Kelleys, which had been left out of the foreclosure deed) as the redemption deed indicates. Although it appears that Mrs. Hurst’s conveyance of a 25-acre parcel back to Mr. Huddleston was in payment of the redemption, neither the redemption deed, the warranty deed, nor any other legal document or agreement confirms this assertion. Furthermore, the redemption deed states that Mrs. Hurst had paid the “sum required” to redeem before the warranty deed to the 25-acre parcel was executed. We conclude that, under the facts presented here, the trial court did not err in its finding that the life tenant, Mrs. Hurst, redeemed the property for the benefit of the remaindermen, as well as for herself, and that the children did not lose their interest in the property due to failure to contribute.

Appellant further asserts that the trial court erred in its finding that appel-lees’ claim was not barred by laches. While appellant concedes the general rule that remaindermen have no duty to remove a cloud on their remainder interest during the life of the life tenant, he cites Duncan v. Johnson, 338 So.2d 1243 (Ala.1976), for the proposition that this case falls within an exception to the general rule.

In Duncan, supra, the court stated:

“Our cases, we think, are to the effect that in the absence of some special equity in an interest in property in addition to that of one’s interest as a life tenant, or a tenant pur autre view, and knowledge of some reasonable notice thereof on the part of the remainderman, there is no duty on the remainderman to institute a proceeding to remove a cloud upon title of the remainderman, and the rights of the remainderman as such are not destroyed by the mere expiration alone of a period of time, whether ten years, twenty years or longer.”

Duncan v. Johnson, supra, at 1254. Appellant argues that circumstances peculiar to this case, namely the presence of a mortgage foreclosure, a redemption in the name of the life tenant alone, and subsequent deeds purporting to convey full title to the property over a twenty-nine year period, combined to impose the “special equity,” described in Duncan, supra, upon the appel-lee-remaindermen. He further argues that the “special equity” having been imposed, the appellees had a duty to diligently assert their claim to the remainder, even before termination of the life estate, or be barred by laches from such assertion.

As we noted in Hinesley v. Davidson, 395 So.2d 1, 3 (Ala.1981), a precise and unambiguous definition of “special equity” is elusive and, again, we are not called upon to set the outer limits of the objective effect of the “special equity” exception.

A reading of the cases in which a “special equity” has been imposed generally indicates that the purpose of the exception is to protect subsequent purchasers or transferees who take title to land without any record notice of a remainder interest. A good statement of this policy is found in Ussery v. Darrow, 238 Ala. 67, 72, 188 So. 885, 889 (1939), which states that the “special equity” exception applies to

“a situation where the records and chain of title are all such as that they not only purport to pass the entire fee and all interests, but taken alone in fact do so, and when the only matter which will create a different result is collateral, not shown or suggested by the chain of title, nor public records judicially known, or to which the record refers. There is then an inchoate right which must be asserted to prevent the title from passing in fact as it purports to pass on its face. It resembles a cloud on a title.
“The principle is distinguishable from one which applies when a life tenant undertakes to convey the remainder, but it does not have that effect because the chain of title shows that he only has and can only convey a life estate. A remedy under such circumstances by the remain-derman to clear the situation is available but not obligatory, because the public need not be misled.”

See also Wragg v. City of Montgomery, 245 Ala. 362, 17 So.2d 173 (1944); Dallas Compress Company v. Smith, 190 Ala. 423, 67 So. 289 (1914).

In the instant case, the original redemption deed taken by Juanita Hurst Foster suggests on its face that she does not have title in fee to the redeemed land. The deed conveys the property:

“To have and to hold to the said Mrs. Juanita Hurst all as fully as can or should be under the exercise by her of her statutory right of redemption as widow of said Harry E. Hurst, her heirs and assigns forever.”

This provision on its face gives notice to the public that Mrs. Foster might not have fee simple title to the land in question, and a search of the records by a subsequent purchaser would easily reveal this possibility of infirm title. Consequently, the need to invoke the special equity exception in this case is obviated since the underlying policy consideration, i.e., protection of innocent purchasers, does not apply.

We hold, therefore, that no “special equity” exists under these facts which would require the appellees to act to protect their remainder interests before the death of the life tenant. Accordingly, the lower court did not err in its finding that the appellees’ claim was not barred by laches.

Appellant’s final contention is that the trial court erred in its finding that appellees were to be given title to the 5-acre parcel which Harry and Juanita Hurst sold to Paul and Aldie Kelley from the original Hurst property. Appellant claims title to this parcel not through the mortgage foreclosure proceedings but through a different source of title. Appellant contends that appellees did not meet their burden of proving title superior to the title of appellant to this parcel of land. We agree.

The record shows that the 5-acre parcel sold to the Kelleys by the Hursts was not affected by the mortgage foreclosure proceeding. The parcel was conveyed to the Kelleys before the foreclosure proceedings, apparently still subject to the mortgage. The mortgage foreclosure deed, however, did not include the parcel in its description of the foreclosed property. The property described in the foreclosure deed was sold and the mortgage covering the whole of the original Hurst property was satisfied. Also, the redemption deed taken by Juanita Hurst did not include a description of the five-acre parcel. The Kelleys, therefore, held title to their parcel unencumbered following the mortgage sale.

The parcel, except a small portion thereof, was then validly conveyed by the Kel-leys to Juanita Hurst Foster and by Mrs. Foster to appellant Joe Scotch. The record shows that appellees did not present evidence sufficient to defeat appellant’s title to the five-acre parcel sold to the Kelleys by the Hursts. The decision of the lower court giving title to the 5-acre parcel which was not affected by the mortgage foreclosure sale is erroneous and is due to be reversed.

After a careful examination of the record and consideration of the briefs and arguments of counsel for both sides, the court affirms the decision of the lower court as stated herein and reverses the decision only as it affects the 5-acre parcel sold to the Kelleys by the Hursts; and the cause is hereby remanded for further proceedings consistent with this opinion.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

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


author: ADAMS, Justice.

text:
    Virginia F. RANKIN v. FIRST NATIONAL BANK OF ALABAMA.
    82-19.
    Supreme Court of Alabama.
    Aug. 26, 1983.

      James L. Shores, Jr. and Gary A. Moore, Fairhope, for appellant.
    Allan R. Chason of Chason & Chason, Bay Minette, for appellee.
   ADAMS, Justice.

This is an appeal from a final judgment of the Circuit Court of Baldwin County in favor of the defendant, First National Bank of Alabama (First National). The plaintiff, Virginia F. Rankin, sought a judgment declaring that a promissory note and two mortgages securing payment of the note were void as to her. The note and mortgages had been executed by the plaintiff and her husband in favor of First National, in order to refinance pre-existing indebtedness.

In her complaint the plaintiff alleged that First National had fraudulently concealed the fact that the instruments executed by her were, in reality, real estate mortgages. At trial, the plaintiff also sought relief based on an alleged lack of consideration flowing to her for the execution of the mortgages. And, on appeal, Rankin asserts that she executed the mortgages as a result of the undue influence of her now deceased husband. Prior to a consideration of these claims, we must address plaintiff’s assertion that the trial court erred both in rejecting a request for a protective order and in admitting into evidence the transcript of a deposition upon oral examination of William B. West, the former employee of First National who allegedly concealed the nature of the instruments executed by the Rankins. Rankin sought the protective order because of her alleged financial inability to be represented by counsel at the taking of the deposition.

Rankin acknowledges that matters concerning the discovery conducted by the parties are within the sound discretion of the trial court. Ex Parte Allstate Ins. Co., 401 So.2d 749 (Ala.1981). On appeal, then, we limit our review to a determination of whether the trial judge has abused his discretion. Plaintiff contends that the trial judge did abuse his discretion in this case.

Rankin’s motion for a protective order and subsequent motion to suppress the deposition were based on her alleged financial inability to have counsel present in South Carolina, where the deposition was taken. Plaintiff requested that discovery should be had by less costly written interrogatories or by telephone conference. Counterbalanced against these considerations was First National’s certain need for comprehensive testimony from its former employee regarding the loan transaction with the plaintiff, in which he represented the defendant. There can be no doubt that oral examination was the means best suited to accomplishing this purpose. See 8 Wright & Miller, Federal Practice and Procedure: Civil § 2039 n. 66 (and accompanying text) (1970 & Supp.1982). The trial judge heard the arguments of counsel on plaintiff’s motions and subsequently overruled them. We do not think that such action or the subsequent admission into evidence of the deposition constituted an abuse of the judge’s discretion. As we recently said in Ex Parte Old Mountain Properties, LTD., 415 So.2d 1048 (Ala.1982):

Each request for a protective order must be considered on its own facts and equities; the trial court is in a better position to consider and weigh those factors than an appellate court. This court will not reverse the trial judge’s determination of such discovery issues ... unless there is a clear showing that the trial judge abused his discretion in making his decision.

415 So.2d at 1050.

No such clear showing of abuse was presented by Rankin. Having considered a matter of threshold importance, we turn to a consideration of the plaintiff’s initial claim that a former employee of the defendant fraudulently concealed material information from her at the time the note and mortgages in question were executed.

Our analysis begins with the recognition that fraud, when alleged in a complaint, “must be clearly and satisfactorily proved by the party seeking relief upon that basis.” Shepard Realty v. Winn-Dixie Montgomery, 418 So.2d 871, 874 (Ala.1982). Moreover, “in a fraud case, no presumption arises from the fact that a confidential relationship exists and the burden is on the plaintiff to plead and prove the fraud.” Johnson v. Keener, 370 So.2d 265, 268-69 (Ala.1979). Therefore, Rankin could not rely on a presumption of fraud based on a confidential relationship that existed between her husband and herself when they executed the instruments in dispute. Rankin was obliged to prove fraud with certainty in every material respect. Ingram v. Horn, 294 Ala. 353, 317 So.2d 485 (1975). After a thorough review of the record below, we are not persuaded that plaintiff satisfied her burden of proof.

Rankin also contends that no valid consideration was given to her in return for the execution of the mortgages in question. She insists that she was not obligated to First National at the time the mortgages were executed, and that pre-existing debts of her husband could not serve as valid consideration for her obligation under the mortgages. The trial court found to the contrary. Having carefully considered the record, we conclude that there was evidence presented on which the trial judge could have based its findings. According to the deposition of William B. West, Rankin was obligated with her husband on a $6,000.00 note, payment of which was past due when the mortgages were executed. First National’s forbearance from suing on the debt “may constitute a sufficient consideration for a mortgage.” Russell v. Russell, 270 Ala. 662, 668, 120 So.2d 733, 738 (1960), citing 59 C.J.S. Mortgages § 92. Such forbearance would be additional consideration for the new mortgage, “[i]t [being] well settled by the authorities that a mortgage or pledge given as security for the pre-ex-isting debt of the mortgagor or pledgor is valid and binding upon that consideration alone, and requires no new or additional consideration to support it.” B.C. Bynum Mercantile Co. v. First National Bank of Anniston, 187 Ala. 281, 283, 65 So. 815, 815 (1914). Cf. Kittle v. The Sand Mountain Bank, 437 So.2d 1000 (Ala.1983) (stating that “where the mortgagor is a stranger to the debt, and there is no other consideration, [a mortgage] is void for want of consideration”) citing B.C. Bynum Mercantile Co. v. First National Bank of Anniston, Id.

We now address Rankin’s allegation that her husband exercised undue influence over her at the time of the execution of the note and mortgages. We find that this theory was utilized by the plaintiff neither in her pleadings nor at trial. In addition, we are not satisfied that the record contains any evidence from which we could conclude that the plaintiff’s husband had exercised undue influence over her. Therefore, we conclude that it would be unfair to the defendant if we allowed Rankin to rely on this theory of recovery for the first time on appeal. See Johnson v. Keener, 370 So.2d at 270.

For the foregoing reasons, we affirm the judgment of the trial court.

AFFIRMED.

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


text:
    Windal SATTERFIELD, a/k/a W.S. Satterfield v. Carl H. DECKER.
    82-163.
    Supreme Court of Alabama.
    Aug. 26, 1983.

      Arthur Fite, Jr. of Fite, Davis and Atkinson, Hamilton, for appellant.
    Jerry Guyton of Vinson & Guyton, Hamilton, for appellee.
   ADAMS, Justice.

This appeal comes from a final judgment of the Circuit Court of Marion County in favor of the plaintiff, Carl H. Decker. Decker sued W.S. Satterfield on a promissory note for $60,000.00. Satterfield answered, stating that he never received any money from Decker in consideration for the execution of the note, and did not owe Decker anything. After hearing the evidence without a jury, the court granted judgment for the plaintiff in the full amount of the note, plus 10% interest and 10% attorney’s fee, as provided in the note. Satterfield then filed a motion for new trial, a motion for findings of fact, or, in the alternative, to alter, amend or vacate the judgment, and a motion for involuntary dismissal. The court failed to rule on any of the motions within ninety days, and they were deemed denied pursuant to Rule 59.1, A.R.Civ.P.

The defendant raises two issues on appeal:

1. Did the trial court err to reversal in failing to grant the defendant’s post-trial motion for findings of fact?
2. Was the evidence presented at trial insufficient to support the judgment of the trial court?

We answer both questions in the negative, and affirm.

The background of the lawsuit is as follows:

On November 6,1978, Satterfield entered into a written employment contract with Marvin Storm. Storm was to work for the Cherokee Company, of which Satterfield was the sole owner. Under the terms of the contract, Storm was to negotiate and secure financing and do other acts required to pursue the claims of certain Indians in Canada, as well as run the day-to-day operations of the Cherokee Company. Storm was a partner in Control Financial Group (Control). Another partner of Control contacted Decker with regard to securing financing for the Cherokee Company, and Decker agreed to lend Satterfield $60,-000.00. Satterfield evidently anticipated that another $40,000.00 would be forthcoming from Decker, because on December 11, 1978, Satterfield executed two promissory notes in favor of Decker, one for $60,000.00 and one for $40,000.00. The notes were payable in full, with interest, two years from the date on which they were executed. At the same time he executed a pledge agreement, pledging 250 shares of stock in Southeastern Pottery Company. Satter-field indicated that the stock was worth $300,227.99. The Southeastern Pottery Company was dissolved by Satterfield on March 29, 1980.

On December 12, 1978, Decker wrote a check payable to Control for $60,000.00. The check stated on its face: “for financing Indian land claims in Northern Alberta.” Control deducted a finder’s fee of $7,500.00 and wrote a check payable to the Cherokee Company for $52,500.00. Storm, along with Janie Barrilliaux, who is Satterfield’s sister and an officer of the Cherokee Company, and Cindy Barrilliaux, who is Satterfield’s niece and also an officer of the company, took this check to a bank and opened an account in the name of the Cherokee Company. Storm states that this was done at Satterfield’s direction. Satterfield says that he never saw the check. The evidence shows that checks on this account, which had to be signed by two of the three people opening the account, were written to pay, among other things, Storm’s salary for one month of $15,000.00, Storm’s expenses in going to Canada of $3,000.00, and $15,000.00 to Indian chiefs. Satterfield acknowledged during the trial that he personally received checks from the account for $10,000.00 and $5,000.00.

Storm’s employment contract with the Cherokee Company was terminated by Sat-terfield in February of 1979.

A letter from Satterfield to Decker written May 9, 1979, on Cherokee Company stationery, was introduced into evidence. This letter states in pertinent part:

This will confirm our telephone conversation of March 5, 1979 and May 10, 1979, wherein I advised you that I was still interested in completing the transaction wherein you are to lend me an additional $40,000.00, making a total loan of $100,-000.00. As we advised you, if the total commitment is not funded, the transaction in which the money was to be used might not be able to be completed, resulting in a large loss to me.

Satterfield testified that he had filed suits against Decker, Storm and Control to have the notes set aside. These suits are evidently pending in California and Texas.

We look first to the issue of whether the trial court was in error in failing to grant Satterfield’s motion for findings of fact. Rule 52(a), A.R.Civ.P., states:

In all actions tried upon the facts without a jury or with an advisory jury, the court may upon written request and shall when required by statute, find the facts specially and state separately its conclusions of law thereon, and judgment shall be entered pursuant to Rule 58 ....

Satterfield has cited to us no statute requiring findings of fact in this case, and we know of none. Thus, we conclude that, under the rule, the trial court has the discretion to decide whether to grant the request for findings of fact. Rule 58(b), A.R.Civ.P., states that the judgment of the trial court will be sufficient if it indicates an intention to adjudicate considering the whole record, and if it indicates the substance of the adjudication. The judgment in this case meets the above standards, and, thus, is sufficient under Alabama law.

As to the question of the sufficiency of the evidence, our standard of review of cases heard ore tenus has been stated many times. Where a trial court, sitting without a jury, hears evidence ore terns, its judgment will not be disturbed on appeal unless it is plainly and palpably erroneous. Haynie v. Byrd, 429 So.2d 973 (Ala.1983); Zirlott v. Radcliff, 406 So.2d 879 (Ala.1983); Caudle v. Ellison, 401 So.2d 38 (Ala.1981). The trial judge was in a position to listen to the witnesses and observe their demeanor. We do not deem it necessary to set out in detail the conflicting testimony elicited at trial. We find that a review of the record discloses ample evidence to support the trial court’s decision holding Satterfield liable under the terms of the promissory note. Therefore, the judgment of the trial court is due to be, and it hereby is, affirmed.

AFFIRMED.

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