author: ROBERTSON, Justice,

text:
    Margaret C. WEEMS, Appellant, v. AMERICAN SECURITY INSURANCE COMPANY, Appellee.
    No. 54792.
    Supreme Court of Mississippi.
    May 2, 1984.

      William J. Johnson, Clinton, for appellant.
    David M. Sessums, Varner, Parker & Sessums, Vicksburg, for appellee.
    Before WALKER, P.J., and HAWKINS and ROBERTSON, JJ.
   ROBERTSON, Justice,

for the Court:

I.

This civil action has been brought by a mortgagee following a fire loss of the mortgaged and insured premises. The insurance company defended charging that there had been a material change of ownership or occupancy or a material increase of hazard, that the mortgagee had knowledge of these facts, and that the mortgagee failed timely to give notice of same.

A jury of the Circuit Court of Hinds County, Mississippi, returned a verdict in favor of the insurance company. On the evidence adduced at trial, we hold that a peremptory instruction should have been given in the insured mortgagee’s favor. Accordingly, the judgment below is reversed, and this action is remanded for a determination of damages and such other proceedings as may be appropriate.

II.

On December 14, 1981, John C. Barlow contracted with American Security Insurance Company (“American Security”) for fire insurance on Barlow’s home in the amount of $245,000. American Security was the Defendant below and is the Appel-lee here. The policy contained a standard mortgagee clause in favor of Margaret C. Weems. Mrs. Weems was the ex-mother-in-law of Barlow and was the holder of a $30,000 note from Barlow secured by a deed of trust on the home. Mrs. Weems was the Plaintiff below and is the Appellant here.

At the time the insurance contract was written Barlow was deeply in debt. Several* judgments had been enrolled against him. A federal tax lien had been filed against him. He had been indicted on two counts of forgery. Vicksburg College, the operation of which had for the past ten years been Barlow’s principal livelihood, had closed. At the time Barlow had no visible means of support.

On March 16, 1982, three months after the issuance of the policy in question, the insured premises burned to the ground. As mortgagee Mrs. Weems made claim on the policy. American Security denied the claim on grounds of an alleged change of condition or increase of hazard and the mortgagee’s failure to notify the insurance company thereof. Specifically, American Security invokes the language of the policy, mandated by Miss.Code Ann. § 83-13-9 (1972), which provides

“The mortgagee (or trustee) shall notify this company of any change of ownership or occupancy or increase of hazard which shall come to the knowledge of said mortgagee (or trustee) and, unless permitted by this policy, it shall be noted thereon and the mortgagee (or trustee) shall, on demand, pay the premium for such increased hazard for the term of the use thereof; otherwise this policy shall be null and void.”

As revealed by the record, the facts relevant to whether the above quoted policy provision should be called into the play are these: First, on March 5, 1982, 11 days prior to the fire, Barlow pleaded guilty to the two counts of forgery and was sentenced to serve two four-year terms running concurrently with each other. Of course, Barlow vacated the residence immediately thereafter as he went to jail. The next day, March 6, 1982, American Security received knowledge that Barlow had vacated the premises and gone to jail. This information did not come from Mrs. Weems; rather, it was obtained when American Security’s agent simply read about the matter in the newspaper. On March 6, 1982, the agent went to the jail to visit Barlow and advised Barlow that the policy would be cancelled. American Security in due course issued a notice of cancellation dated March 16, 1982, expressly providing that the policy would be can-celled on April 16, 1982.

The only other “changes” between December 14, 1981, the date the policy was originally issued, and March 16, 1982, the date of the fire, were (a) Barlow’s status had changed from one merely indicted for forgery to one finally convicted of forgery and (b) Barlow had fallen even further behind on his debts.

In spite of this evidence, the jury rejected Mrs. Weems’ claim and returned a verdict in favor of Defendant, American Security. Final judgment in favor of American Security was entered thereon. In due course Mrs. Weems’ alternative motions for judgment notwithstanding the verdict or for a new trial were overruled. This appeal has followed.

III.

Appellant Weems’ first assignment of error is that the trial court incorrectly saddled her with the burden of proving her compliance with the notice of change of circumstances or increase of hazard clauses of the policy. More specifically, Mrs. Weems argues that American Security’s reliance upon this policy clause amounts to an affirmative defense and, as such, American Security bore the burden of proof with respect thereto. American Security answers by arguing that the matter is not an affirmative defense at all but rather a provision of the policy, compliance with which the claimant must show as a condition precedent to recovery.

At trial Mrs. Weems requested jury instruction C-2 which reads as follows:

“The Defendant claims an affirmative defense which is explained in later instructions. The burden of establishing this affirmative defense by a preponderance of the evidence rests upon the Defendant.”

This instruction was denied, and Mrs. Weems assigns this denial as error.

We agree with Mrs. Weems that American Security bore the burden of proving noncompliance with the notice of change of circumstances or increase of hazard provision of the policy. We are dealing here with a condition subsequent. Corbin on Contracts Section 739. The clause in question provides that the policy shall become null and void, i.e., extinguished, as it relates to the mortgagee only upon the happening of a certain event. A contract that is conditioned to become void on a specified event is one subject to a condition subsequent. The burden of proving a condition subsequent rests upon the party seeking to show that the condition has occurred and that the obligation has been voided.

The point ultimately is of little consequence. The trial court did instruct the jury as follows:

“If you believe from a preponderance of the evidence in this case that there was at the time of the fire in question, an increase in either the physical or the moral hazards which came to the attention of the plaintiff, Margaret C. Weems, and that she failed to notify the insurance company thereof prior to the fire loss in question, then it will be your sworn duty as jurors to return a verdict for the Defendant.”

This instruction correctly placed upon American Security, as insurer, and as the party invoking the condition subsequent, the burden of proving by a preponderance of the evidence that the increase of hazard did occur, that it came to Mrs. Weems’ knowledge, and that she willfully failed to notify the company thereof. The instruction should have gone further and placed a similar burden on American Security on the change of ownership or occupancy issue. This error is of no moment in view of the disposition we make below.

IV.

The ultimate question is whether there was, as a matter of law, an issue for the jury on the question of whether a change of circumstances or increase of hazard had occurred of which Mrs. Weems had knowledge and of which she failed to notify American Security. In reviewing this case, we are of course mindful of the familiar strictures on our power to review jury verdicts. We are faced here with a jury verdict in favor of American Security which necessarily requires that all fact questions be taken as having been resolved in favor of American Security.

The request for a peremptory instruction or the subsequent motion for a judgment notwithstanding the verdict tests the legal sufficiency of the evidence supporting the verdict. Either asks the court to hold, as a matter of law, that the evidence is insufficient to support a verdict in favor of the non-movant. Where such a request has been made, the trial court must consider all of the evidence — not just the evidence which supports the non-movant’s case — in the light most favorable to the party opposed to the motion. The non-mov-ant must also be given the benefit of all favorable inferences that may reasonably be drawn from the evidence. If the facts and inferences so considered point so overwhelmingly in favor of the movant that reasonable men could not have arrived at a contrary verdict, granting the motion is required. On the other hand, if there is substantial evidence opposed to the motion, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motion should be denied and the jury’s verdict allowed to stand. See, e.g., General Tire and Rubber Co. v. Darnell, 221 So.2d 104, 105 (Miss.1969); Paymaster Oil Co. v. Mitchell, 319 So.2d 652, 657 (Miss.1975); City of Jackson v. Locklar, 431 So.2d 475, 478 (Miss.1983).

Before this familiar test may be applied, however, we must be clear of the primary rules which are to be applied to the facts. As indicated above, the Issue tendered is predicated upon the policy language mandated by Section 83-13-9. This clause is known as the standard union mortgage clause. It has been construed by this Court to be a separate contract of insurance entered into between the mortgagee and the insuror. See Hennessey v. Helgason, 168 Miss. 834, 151 So. 724 (1934); Mechanics and Traders Insurance Company v. Boise, 114 Miss. 165, 74 So. 821 (1917); Bacot v. Phoenix Insurance Company, 96 Miss. 223, 50 So. 729 (1909). Under such a clause, the mortgagee is entitled to the proceeds of the policy and his right to recover will not be invalidated by the act or negligence of the mortgagor of the insured’s property. No act or default of any person other than the mortgagee affects the rights of the mortgagee to recover in case of loss. Hartford Fire Insurance Company v. Associates Capital Corporation, 313 So.2d 404, 407 (Miss.1975).

The clause requires the mortgagee to notify the insurance company of a change of ownership or occupancy or an increase of hazard which shall come to the attention of the mortgagee. We emphasize, first, that before there is any duty to notify, there must have been a “change” or an “increase”. Unless one of these events has occurred, there can be no duty to notify and any failure of notification becomes of no consequence.

Second, before this condition subsequent shall be deemed to have occurred, the change of circumstances or increase of hazard must be substantial. By this we mean that the change must be such that the risk insured by the insurer is materially increased. See Wallace v. Employers Mutual Casualty Co., 443 So.2d 843, 849 (Miss.1983). A slight or insignificant change or increase will not operate to activate the notice provision of the mortgagee clause.

Third, the change of circumstances or increase of hazard must have occurred after the effective date of the coverage. Wallace v. Employers Mutual Casualty Co., 443 So.2d 843, 849 (Miss.1983). Circumstances and hazards existing at the time of coverage attaches, unless fraudulently concealed, are deemed known by the insurance company and risks incident thereto are deemed to have been considered and assumed.

Finally, the violation of this policy clause must have been a proximate cause of loss to the company; that is, the failure of the mortgagee to notify the insurance company of a material or substantial change of circumstances or increase of hazard must have been a proximate cause of the failure of the insurance company to cancel the policy or demand an increased premium. Where a substantial or material change of circumstances or increase of hazard has occurred and where the insurance company has actual and timely knowledge thereof, the failure of the mortgagee to provide knowledge cannot be said to have been the proximate cause of the insurer’s failure to act to protect itself.

Having well in mind the above-described rules of law, as well as the standards by which we must consider the facts where a jury verdict has been returned, we are left with no doubt but that a peremptory instruction should have been granted the mortgagee, Mrs. Weems, on the change of circumstances or increase of hazard issue. Barlow was deeply in debt on March 16, 1982, the date of the fire, but he was also deeply in debt on December 14, 1981, the date of issuance of the policy. The fact that one in debt at the time of policy is issued some three months is even further behind on essentially the same obligations does not constitute a substantial or material increase of hazard. Wallace v. Employers Mutual Casualty Co., supra, 443 So.2d at 849.

Barlow’s involvement with the forgery charge similarly does not constitute a material change or increase of hazard. At the time the policy was issued, Barlow was under indictment. That he was subsequently convicted surely does not constitute in this context a change of circumstances or increase of hazard.

Finally, the fact that the premises had become vacant does not on these facts constitute a change within the meaning of the policy. Assuming arguendo that it does, the insurance company had knowledge of this change within 24 hours after it occurred. There is no way Mrs. Weems’ failure, if any, to notify could have proximately caused or contributed to any loss suffered by the company. Indeed, the evidence reflects that within 24 hours of receiving notice that Mr. Barlow was in jail and that the premises had vacated American Security’s agent gave verbal notice to Barlow that the policy was being cancelled.

By way of summary, we hold that on the uncontradicted facts of this case, no material or substantial increase of hazard within the meaning of Section 83-13-9 or the language of policy occurred. Furthermore, any change of ownership or occupancy which occurred became known to the insurance company within 24 hours after it occurred and the insurance company in fact took prompt action to cancel the policy. The failure, if any, of Mrs. Weems as mortgagee to give notice of change of ownership or occupancy could not possibly have been the proximate cause of any loss sustained by American Security Insurance Company.

The verdict of jury is hereby set aside. The judgment rendered by the circuit court is vacated. The case is remanded to the Circuit Court whereupon that Court shall direct in favor of Appellant, Margaret C. Weems, and against Appellee, American Security Insurance Company, a verdict on the claim asserted by Mrs. Weems under the policy in question and shall conduct such further proceedings, including those regarding damages as may be appropriate and not inconsistent with what we have said herein.

REVERSED AND REMANDED.

PATTERSON, C.J., WALKER and ROY NOBLE LEE, P.JJ., and BOWLING, HAWKINS, DAN M. LEE, PRATHER and SULLIVAN, JJ., concur.


source: Caselaw Access Project

author: ROY NOBLE LEE, Presiding Justice,

license: Public Domain

text:
    SEISMIC PETROLEUM SERVICES, INC. v. Charles RYAN.
    No. 54809.
    Supreme Court of Mississippi.
    May 9, 1984.

      Don A. MeGraw, Jr., E. Gray Flora, III, Montgomery & Smith-Vaniz, Canton, Daniel J. O’Beirne, O’Beirne & Ball, Natchez, for appellant.
    Robert C. Latham, Adams, Forman, Truly, Ward, Smith & Bramlette, Natchez, for appellee.
    Before ROY NOBLE LEE, P.J., and BOWLING and ROBERTSON, JJ.
   ROY NOBLE LEE, Presiding Justice,

for the Court:

Seismic Petroleum Services, Inc. [Seismic] has appealed from a judgment entered against it in the Circuit Court of Adams County, Honorable Edwin E. Benoist, Jr., presiding, in favor of Charles M. Ryan for actual, statutory and punitive damages in the aggregate amount of $15,980, as a result of a trespass suit. Seismic assigns the following errors in the trial below:

(1) The lower court erred in overruling appellant’s motion for judgment notwithstanding the verdict and/or alternatively for remittitur, and/or alternatively, for a new trial.
(2) The lower court erred in denying appellant’s motion for the jury to view the subject property.
(3) The lower court erred in allowing the issues of statutory damages and punitive damages to go to the jury and should have given Instructions No. D-l and D-2.

Evidence favorable to Ryan indicates that prior to September 15, 1981, Seismic’s representatives contacted him to obtain permission for a seismograph crew to run a seismic line over approximately one-half (½) mile of the property. Ryan authorized the representative to enter the land for the purpose of a survey or determination where Seismic desired to run the line, but admonished him not to run the line without obtaining Ryan’s permission to do so.

The representatives never contacted him again or obtained a permit to run the line. Ryan discovered that the Seismic crew was on the property with its machinery and had started on the seismic line, and he sent his son to warn them not to continue the work without Ryan’s express permission. On September 15, 1981, the son, Danny Ryan, told the crewmen that they were trespassing on the property and that they needed to talk with appellee Ryan about it. Subsequent to that date, young Ryan saw evidence of cable and equipment indicating that the crew had come back upon the property, and on September 28,1981, at the request of his father, Danny Ryan complained to Deputy Sheriff Max Marler about the trespass. The deputy went to the property and arrested two Seismic employees for trespassing. Seismic still did not obtain a permit to go upon the property.

The two employees, who were charged with willful trespass, were released on bond obtained by the Seismic foreman and were told by the deputy not to go back on the property. Deputy Marler stated that on the next day he received a call complaining that seismograph employees had been back upon the property and, after Marler inspected the same, he found that additional equipment had been placed upon the property and wire had been laid since the previous day.

Seismic contended, and introduced evidence to the effect, that it was acting in good faith in going upon the property. Kenneth Coziar, vice president and part owner of Seismic, stated that, if the matter had come to his attention he would have talked to Ryan personally and could have moved the line around Ryan’s property and that Seismic thought it had a verbal permit to go upon the Ryan property. Seismic admitted that it had at least three (3) separate crews upon Ryan’s property at different times.

Edward H. Hamby, a professional forester, testified for Seismic that he inspected the property after the alleged trespass and found that there were 62 damaged trees, which included 37 one-inch trees, 11 two-inch trees, 13 four-inch trees, and one ten-inch tree with a scar. He estimated that a generous value of the damage was around 17 to 22 cords of wood of the lowest value specie for pulpwood with a value of about $22.00. Hamby made photographs of the property, the line, and the damage, and fourteen (14) photographs were introduced in evidence.

In rebuttal, Tom Middleton, registered forester, testified on behalf of Ryan. On October 30, 1982, he viewed the property to assess damage done by the seismograph crews, and stated that he found 201 trees cut and destroyed; that seventy-five percent (75%) were of commercial value, mostly red oak, sweet gum, hickory, and sassafras, and twenty-five percent (25%) were of “junk" species; that the path of the line cut was an average of six (6) feet wide; and that he found evidence of preparation made for drilling holes.

The lower court sustained a motion for partial directed verdict on actual damages, limited the amount to $180.00, and overruled motions for directed verdict on statutory damages and punitive damages. The jury returned a verdict finding that Seismic willfully trespassed upon the Ryan property, and awarded damages in the amount of $180.00 actual damages, $3,300 statutory damages (60 trees at $55.00 per tree), and $12,500 in punitive damages, for total damages of $15,980.

Motion for judgment notwithstanding the verdict, for remittitur and for a new trial was overruled.

I.

THE LOWER COURT ERRED IN OVERRULING APPELLANT’S MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT AND/OR ALTERNATIVELY FOR REMITTITUR, AND/OR ALTERNATIVELY FOR A NEW TRIAL.

The appellant contends that it acted in good faith in going upon the lands of appel-lee and running the seismograph line; that it did not willfully cut trees on the property and did not commit a willful trespass; and that the evidence did not support a verdict for statutory and punitive damages. Appellant cites the case of Strawbridge v. Day, 232 Miss. 42, 98 So.2d 122 (1957), where this Court said:

The phrase “good faith”, as used in a statute such as we have here, denotes honesty of purpose, freedom from intention to defraud or to deprive others of rights or property to which in equity and good conscience they are entitled. In order to avoid liability for the statutory penalty in a case of this kind the defendant is not required to prove freedom from negligence, but only that the trespass was not willful, or did not result from wantonness or recklessness. [232 Miss. at 52-53, 98 So.2d at 128]

Strawbridge correctly states the law on this type case, viz, that the trespass was not willful or did not result from wantonness or recklessness in order not to come within the statute. In the case sub judice, the evidence is overwhelming that the Seismic employees went upon appel-lee’s land without permission and in violation of appellee’s express admonition for them not to run a line until he had given his permission; that the employees went upon the land several times in complete and willful disregard of those instructions; that they took lines, heavy equipment and material for running a line approximately one-half (½) mile across the property; that two of the employees were arrested and charged with trespass, and, subsequently, other Seismic employees again went upon the land without permission; and that the evidence made out a case of willful, wanton and deliberate trespass upon the appellee’s property.

When a person is charged with committing a willful and wanton trespass and cutting trees upon another’s property without permission, the standard by which to measure him is whether or not a reasonable man under like circumstances would have gone upon the property, committed a trespass thereon and would have cut trees of the property owner.

The jury answers the question as to whether or not punitive damages should be imposed and the amount thereof. The statutory penalty for cutting trees and punitive damages for trespass upon the property bear a different relation and a different burden of proof. In an action for statutory damages, the law provides:

To establish the right of the owner prima facie, to recover under the provisions of this section, it shall not be required of the owner to show, by a preponderance of the proof, that the defendant or his agents or employees, acting under the command or consent of their principal, wilfully, recklessly, and knowingly cut such trees, but it shall only be required of the owner to show that such timber belonged to such owner, and that such timber was cut by the defendant, his agents or employees, without the consent of the owner, provided, the defendant may establish good faith as an affirmative defense as to the statutory penalty. Miss.Code Ann. § 95-5-3 (Supp.1983).

In an action for punitive damages because of trespass and damage upon real property, the proof must show that the trespass was willful, grossly negligent or wanton and punitive damages may be allowed as punishment for that trespass. In the present case, the issue of statutory damages and punitive damages for trespass were both submitted to the jury on proper instructions. In Day v. Hamilton, 237 Miss. 472, 478, 115 So.2d 300, 303 (1959), discussing statutory and punitive damages, the Court said:

Appellant asserts that the statutory remedy creating a specific penalty for cutting trees is exclusive, insofar as punitive or exemplary damages are concerned. Miss.Code 1942, Secs. 1074-1087. These statutes do not indicate any legislative intent that the statutory penalty would be the exclusive remedy. In fact, Sec. 1087 indicates the contrary. Statutes are not to be understood as effecting a change in the common law beyond that which is clearly indicated. 82 C.J.S. Statutes § 363; Burns v. Allen, 1947, 202 Miss. 240, 31 So.2d 125; Sanders v. Neely, 1944, 197 Miss. 66, 82, 19 So.2d 424. Appellant concedes that there are no decisions supporting his argument of an exclusive remedy under the statutes. Since they do not repeal by their terms the common-law remedy of the right to punitive, as well as actual, damages for a trespass resulting in the cutting of trees, the common-law remedy remains unaffected.

The principle was restated in Georgia-Pacific Corp. v. Blakeney, 353 So.2d 769 (Miss.1978), where we said that the rule is established that when the Court considers whether the defendant is entitled to a judgment as a matter of law, the Court considers the evidence in the light most favorable to plaintiff, disregards any evidence on the part of defendant in conflict with that favorable to the plaintiff, and if the evidence and reasonable inferences to be drawn therefrom would support a verdict for the plaintiff, the jury verdict should not be disturbed. See also Gee v. Hawkins, 402 So.2d 825 (Miss.1981) and Paymaster Oil Mill Co. v. Mitchell, 319 So.2d 652 (Miss.1975).

We think that all questions of damages constituted questions for the jury and we cannot say that the verdict was not supported by the evidence.

II.

THE LOWER COURT ERRED IN DENYING APPELLANT’S MOTION FOR THE JURY TO REVIEW THE SUBJECT PROPERTY.

At this point, we note that the appellant introduced fourteen (14) photographs in evidence. They showed fairly and accurately the area involved in the alleged trespass and had probative value. The question of viewing property is a matter within the sound discretion of the trial judge. In National Box Company v. Bradley, 171 Miss. 15, 28, 157 So. 91, 93 (1934), the Court said:

[A] request for a view should never be granted unless it appears reasonably certain that it will be of essential aid, not merely of some aid, to the jury in reaching a correct verdict, and that it is distinctly impracticable and inefficient to present the material elements to the jury by photographs, diagrams, maps, measurements and the like.

We are of the opinion that the evidence and exhibits fully disclosed the condition of the property and that the trial judge did not abuse his discretion in overruling the motion for the jury to view the premises.

III.

THE LOWER COURT ERRED IN ALLOWING THE ISSUES OF STATUTORY DAMAGES AND PUNITIVE DAMAGES TO GO TO THE JURY AND SHOULD HAVE GIVEN INSTRUCTION NO. D-l AND JURY INSTRUCTION NO. D-2.

The Instructions D-l and D-2 were peremptory instructions against the statutory penalty and punitive damages. D-l instructed that appellee could not recover the statutory penalty of damages for the destruction of the trees involved and D-2 instructed the jury that as a matter of law appellee was not entitled to recover punitive damages from the appellant. Clearly, those instructions were improper, under the evidence, and the lower court correctly refused them. In addition, the lower court granted appellant Instructions D-ll and D-12 which told the jury that in order to return a verdict for statutory damages, that the appellee was required to prove by a preponderance of the evidence that the appellant was guilty of willful trespass or was grossly negligent or indifferent or lacked good faith so clearly as to be equivalent of willfulness; and that appellee was not entitled to recover statutory or punitive damages unless appellee had proved by a preponderance of the evidence that the appellant was guilty of willful wrong or gross negligence. The issue of willful or wanton trespass was put squarely before the jury, and there is no merit in this assignment.

There being no reversible errors in the trial below, the judgment of the lower court is affirmed.

AFFIRMED.

PATTERSON, C.J., WALKER, P.J., and BOWLING, HAWKINS, DAN M. LEE, PRATHER, ROBERTSON and SULLIVAN, JJ., concur.

      . Ryan had a count of 270 damaged trees taken soon after the alleged trespass.


author: EMBRY, Justice.

text:
    Augustine MEAHER, Jr., et al. v. GETTY OIL COMPANY.
    82-705.
    Supreme Court of Alabama.
    April 6, 1984.

      Norton W. Brooker, Jr. of Lyons, Pipes & Cook, Mobile, for appellants.
    Rae M. Crowe, Dabney E. Bragg and David E. Hudgens of Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, for appellee.
   EMBRY, Justice.

This appeal concerns a suit for partial cancellation of an oil, gas, and mineral lease. The lessors, Augustine Meaher, Jr., et al. (Meahers) appeal from a partial summary judgment entered against them in favor of the lessee, Getty Oil Company (Getty). We affirm.

Facts

On 1 July 1970, the Meahers executed an oil, gas, and mineral lease in favor of the Getty Oil Company covering five tracts of land, totaling approximately 1,840 acres, in Mobile County, Alabama (hereafter Meaher lease). All five of the leased tracts are located in the Chunchula Field.

The lease provided for a primary term of five years from the date of execution “and as long thereafter as oil, gas or other mineral is produced from said land, or lands with which said land is pooled hereunder.”

Initially, each of the tracts or interests in the land covered by the lease were included within five separate competitive drilling and producing units established by order of the Oil and Gas Board in 1974. Each unit was drilled and developed so that a producing unit well was located within each unit.

Beginning in 1978, royalties paid to the Meahers attributable to the lease in question were substantial. However, the production level, and therefore royalties paid, on one particular tract of land covered by the lease, Section 10, began to decline. Between 1978 and 1980, the royalties paid to the Meahers, with respect to Section 10, fell from $16,015.91 to $4,337.81.

During this same period of time, plans were underway to unitize the entire Chun-chula Field into a single fieldwide unit. Under such a plan, production of the entire field was to be increased by converting from primary to secondary recovery methods. From September 1978 through May 1980, Getty personnel, as well as other working interest owners, conducted extensive engineering and geological studies of the Chunchula Field in an effort to define the field’s productive limits, develop the scientific basis and method for conducting secondary recovery operations, and develop a formula for participation in the unitized production of the field.

On 6 October 1980, Augustine Meaher, Jr., sent a letter to Getty informing them of his dissatisfaction with Section 10’s performance. Meaher complained that Section 10’s poor performance adversely affected its “deliverability,” which was a key factor in determining royalties under the impending unitization plan. Citing the tract’s failure to produce in paying quantities, as well as drainage to other wells, Meaher charged Getty with failure to act as a prudent operator. Meaher concluded by requesting that Getty either rework the well on Section 10 or commence redrilling operations on the section.

Getty had undertaken an acidization of the well on Section 10 in an effort to increase production in August of 1980; however, subsequent to receiving Mr. Meaher’s letter, Getty took no further action on the well.

On 29 January 1981 the Meahers filed suit against Getty, seeking both damages and cancellation of the lease with respect to Section 10. The Meahers alleged that Getty had breached the lease by failing to develop the Section 10 land tract and known mineral producing formations on or beneath Section 10. Additionally, the Meahers averred that Getty had breached its obligation to act as a prudent operator by: failing to explore and test Section 10; failing to protect the tract against drainage; failing to produce and market discovered minerals; and failing to protect the Meahers’ interest in the unitization plan of the Chunchula Field so as to insure that the plaintiffs receive their just share of production royalties from Section 10.

On 26 August 1982, the Meahers filed an amended complaint. In addition to realleg-ing the breach of the lease for failure to fulfill obligations created by express and implied covenants, the Meahers averred both that the lease had expired by its own terms and that the Section 10 land tract had been abandoned.

On 24 March 1983, the trial court granted partial summary judgment in favor of Getty “insofar as Plaintiffs seek to cancel or terminate the oil and gas lease.” The court further noted the lack of reason for delay and therefore entered final judgment in favor of Getty. Rule 54(b), ARCP. On 22 April 1983, the Meahers filed notice of appeal with respect to the trial court’s partial summary judgment.

I

The standard of review of a summary judgment is whether there is any evidence which, when viewed in a light most favorable to the nonmoving party, presents a genuine issue of material fact. ARCP 56; Ryan v. Charles Townsend Ford, Inc., 409 So.2d 784 (Ala.1981). Only where the non-moving party may not prevail under any set of proffered facts, under any cognizable theory of law asserted, is summary judgment appropriate, Harbour v. Colonial Fast Freight Lines, Inc., 336 So.2d 1100 (Ala.1976); Horton v. Northeast Alabama Regional Medical Center, Inc., 334 So.2d 885 (Ala.1976).

In light of the above, this court must consider whether partial cancellation of the Meaher lease, according to any cognizable theory of law asserted, under any set of facts presented, is appropriate. The Meah-ers rely upon three theories of law in support of their claim for cancellation: that the lease expired by its own terms; that Getty breached the lease by failing to adhere to its express and implied covenants; and that Getty abandoned the lease. We consider each theory separately.

II

The Meahers argue that the lease expired by its own terms with respect to the section 10 land tract when that tract ceased paying in commercial quantities. While they concede that at all relevant times production in paying quantities occurred on portions of the leased lands, the Meahers nevertheless contend that since it is disputed whether Section 10 was producing in paying quantities, summary judgment as to their claims for cancellation was improvidently entered.

This argument is based upon the cessation of production clause contained within the lease, which reads in pertinent part:

“[I]f after discovery of oil, gas or other mineral, the production thereof should cease from any cause, this lease shall not terminate if lessee commences additional drilling or reworking operations within sixty days thereafter. ...”

The Meahers conclude that since ample evidence was proffered indicating Section 10 had ceased production for more than 60 days, the lease, with respect to Section 10, terminated by its own provisions. We disagree.

The Meahers’ argument presupposes that cessation of production on Section 10 triggers the cessation of production clause respecting that tract of land. To the contrary, in the absence of a “Pugh” clause, production of oil, gas or minerals in paying quantities from any tract of land covered by a lease will hold the entire lease beyond the primary term by production. Jones v. Bronco Oil & Gas Co., 446 So.2d 611 (Ala.1984); Mize v. Exxon Corp., 640 F.2d 637 (5th Cir.1981) (interpreting Alabama law); see also Bernard v. Marathon Oil Co., 381 So.2d 1286 (La.App.), writ ref'd, 384 So.2d 793 (La.1980).

In Bronco, this court held, where a portion of the leased lands in question were located within a compulsory unit, that in the absence of a “Pugh” clause, production from anywhere on the lands within the unit preserves the validity of the lease beyond the primary term to both the leased lands within, and those outside, the unit. The rationale for this holding is twofold. First, lessors have the option of including within the lease a “Pugh” clause, see Bronco, which serves to make the lease divisible, imposing obligations upon the lessee on a unit-by-unit or tract-by-tract basis. See 4 E. Kuntz, The Law of Oil and Gas § 48.4 (1972); 4 H. Williams and C. Meyers, Oil and Gas Law, § 669.14 (1981).

Second, implied covenants to reasonably develop the leased lands, recognized to exist in every oil and gas lease, continue to obligate the lessee to develop all the leased lands, both within and without the producing unit. Jones v. Bronco Oil & Gas Co., supra. Mize v. Exxon Corp., 640 F.2d 637, 641 (5th Cir.1981); see also Sohio Petroleum Co. v. Miller, 237 La. 1015, 112 So.2d 695, 699 (1959).

We note that the Meaher lease is devoid óf any “Pugh” clause. In fact, by the express terms of the habendum clause, the lease is to be extended beyond the primary term as long “as oil, gas, or other mineral is produced from said land or lands with which said land is pooled hereunder.” We find no suggestion in this provision, or in any other provision included within the lease, that the obligation to produce is divisible. We hold that production in paying quantities on the remaining tracts of land included within the Meaher lease preserves the lease beyond its primary term through “production” as contemplated by the ha-bendum clause. Jones v. Bronco Oil & Gas Co., supra; Mize v. Exxon Corp., 640 F.2d at 641.

Ill

Finding that the Meaher lease was held by production does not conclude our inquiry. The Meahers allege that Getty breached the lease, respecting Section 10, by failing to adhere to several express and implied covenants recognized to exist in oil, gas, and mineral leases. The question before this court is whether cancellation is an available remedy for failure to comply with such implied covenants.

At the outset, we note that the Meahers have not produced any evidence to support a claim for breach of the covenant of further exploration. In contrast to the implied obligation to reasonably develop the leased land, the covenant of further exploration concerns the obligation to drill in potentially productive, but yet unproved, geological formations or strata. H. Williams and C. Meyers, Oil and Gas Law § 841 (abr. ed. 1981); see also Meyers, Implied Covenant of Further Exploration, 34 Tex.L.R. 553 (1956). This obligation arises chiefly from the policy against allowing the lessee to hold a valuable mineral lease for speculative purposes. 5 E. Kuntz, The Law of Oil and Gas, § 62.1 (1972).

The evidence presented in opposition to Getty’s motion for summary judgment concerned the proved formations of Section 10. For example, the Meahers complain of drainage and complain that Getty failed to rework or redrill on Section 10. Accordingly, it is not necessary for this court to consider the adoption of the implied covenant of further exploration, as the Meahers have failed to present any evidence to support such a claim.

The Meahers have alleged, and presented evidence supporting, the breach of implied covenants to reasonably develop the leased lands, to protect the lands from drainage, to produce and market discovered minerals, and to protect the Meahers’ interest in the unitization plan of the Chunchula field.

The appropriate remedy for breach of these implied covenants is a question of first impression for this court. Three views exist throughout the oil and gas producing jurisdictions. See generally R. Hemingway, Law of Oil & Gas §§ 8.10 — 8.-11 (1983). A minority of jurisdictions hold that the exclusive remedy for breach of implied covenants is damages. See e.g., Geary v. Adams Oil & Gas Co., 31 F.Supp. 830 (E.D.Ill.1940); Beer v. Griffith, 61 Ohio St.2d 119, 399 N.E.2d 1227 (1980); McCutcheon v. Enon Oil & Gas Co., 102 W.Va. 345, 135 S.E. 238 (1926). In the majority of jurisdictions, cancellation may be sought as a remedy for breach of implied covenants only upon a showing that damages are wholly inadequate. See e.g., Southwest Gas Producing Co. v. Seale, 191 So.2d 115 (Miss.1966); W.T. Waggoner Estate v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27 (1929); Alford v. Dennis, 102 Kan. 403, 170 P. 1005 (1918). Finally, a few jurisdictions allow cancellation as a remedy without first proving the inadequacy of damages. See e.g., Sapp v. Massey, 358 S.W.2d 490 (Ky.1962).

After reviewing the recognized authorities on the subject, we are of the opinion that the majority view is the most persuasive. Accordingly, we hold that an action for damages is the proper remedy for breach of the implied covenants to develop, produce, market, and prevent drainage. Only in the extraordinary circumstance where damages are wholly inadequate as a remedy will our courts, exercising equity jurisdiction, subject the lease to cancellation.

This view is consistent with two principles of law pervasive in our jurisprudence. First, implied obligations are to be treated as covenants rather than conditions subsequent and as such cannot support forfeitures or cancellation unless remedies at law are wholly inadequate. Lowery v. May, 213 Ala. 66, 104 So. 5 (1925). See also Schaefers v. Apel, 295 Ala. 277, 328 So.2d 274 (1976); Phillips v. Sipsey Coal Mining Co., 218 Ala. 296, 118 So. 513, 521 (1928). Second, the law disfavors forfeitures and the cancellation of an oil, gas, and mineral lease is nothing less than a forfeiture of a recognized and protected property interest. Superior Oil Co. v. Devon Corp., 604 F.2d 1063 (8th Cir.1979); Sinclair Oil and Gas Co. v. Bishop, 441 P.2d 436 (Okl.1968). Ionno v. Glen Gery Corp., 2 Ohio St.3d 131, 443 N.E.2d 504 (1983); HNG Fossil Fuel Co. v. Roach, 99 N.M. 216, 656 P.2d 879 (1982); Batex Ohio Co. v. LaBrisa Land & Cattle Co., 352 S.W.2d 769 (Tex.Civ.App.1961).

Moreover, our conclusion is supported by the historical analysis of two distinguished oil and gas commentators:

“In the early days of oil and gas law, the usual remedy sought and granted for breach of the protection [from drainage] covenant seems to have been cancellation. The doctrinal grounds for such relief are twofold. An implied covenant may be treated as an implied condition subsequent, for breach of which a lessor may reenter and terminate the lease. The support for this theory is weak, since traditionally courts have construed doubtful express provisions as covenants rather than conditions in order to avoid forfeiture. To find a condition by implication runs counter to this line of authority. The better ground for supporting cancellation is the power of equity to grant relief when the remedy of law is inadequate. In the early days of the oil industry, the legal remedy of damages often was inadequate because the scientific knowledge necessary to establish lessor’s loss was lacking....
“It is doubtful that this reason for adopting forfeiture as a remedy is valid today....”

5 H. Williams & C. Meyers, Oil and Gas Law § 825.1, p. 158-59 (1980).

Regarding the implied covenants of reasonable development, Williams and Meyers state:

“In most cases the legal remedy is adequate in the sense that damages can be ascertained within reasonable bounds of accuracy. Working in a proven field today, experts are usually capable of determining with reasonable certainty the volume of oil and gas in place, the probable production from a well and the duration of such production.”

Id., § 834, p. 231-32.

In the case at bar, the Meahers have not proffered any evidence suggesting that damages as a remedy would be wholly inadequate. Through expert testimony, the Meahers may prove the value of hydrocarbons lost due to drainage. Likewise, the Meahers may prove the financial loss suffered due to Getty’s failure to rework or redrill on Section 10. Lastly, the financial loss occasioned by a deficient participation factor, in the unitization agreement as based upon Section 10’s “delivera-bility,” may be calculated with certainty.

The Meahers have alleged, and very well may recover under, a valid claim for breach of implied covenants. However, a claim for damages, not cancellation, is their proper recourse.

IV

The third theory of law upon which the Meahers base their claim for cancellation is abandonment. We reject this argument in light of the conceded production in paying quantities on the remaining lands included within the Meaher lease. In the absence of express terms to the contrary within the lease, oil or gas production in paying quantities on portions of the leased lands will perpetuate the lease as a whole, and the lease may not be regarded as abandoned respecting any portion of the lease. Labbe v. Magnolia Petroleum Co., 350 S.W.2d 873 (Tex.Civ.App.1961), writ ref'd n.r.e.; see also W.T. Waggoner Estate v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27 (1929).

Thus, whether considered pursuant to a theory of expiration of the lease, breach of implied covenants, or abandonment, the evidence before the trial court presented no genuine issue of material fact respecting claims for partial cancellation. The judgment of the trial court is due to be, and is hereby, affirmed.

AFFIRMED.

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

      . The clause is named after the distinguished attorney accredited with its creation, Lawerence G. Pugh, Sr.
      One of its many variations may be found in 4 E. Kuntz, The Law of Oil and Gas § 48.4(a) (1972). It reads:
      "Notwithstanding anything to the contrary herein contained, the commencement of operations for drilling, the drilling or reworking of a well, or the production of oil, gas or other mineral from any well situated on lands included within a unit embracing a portion of the leased premises and other lands not covered hereby shall serve only to maintain this lease in force as to that portion of the leased premises embraced in such unit....”

      . Paragraph 9 of the Meaher lease includes an express covenant of reasonable development. It reads in pertinent part:
      "After the discovery of oil, gas or other mineral in paying quantities on said premises, Lessee shall reasonably develop the acreage retained hereunder_”
      Where an express covenant is contrary to those implied in the lease, the express covenant shall supersede the implied obligation. R. Hemingway, Law of Oil & Gas, § 8.4 (1983). However, the express provision in paragraph 9 is consistent in pertinent part with the implied covenant of reasonable development. It is not necessary, therefore, to consider the express and implied covenants separately.


author: ADAMS, Justice.

text:
    Lula Cade JOHNSON and Wash Cade, Jr. v. Willie James CADE.
    82-943.
    Supreme Court of Alabama.
    May 4, 1984.

      Mercería L. Ludgood of Figures & Lud-good, Mobile, for appellants.
    George J. Moore of Moore & Layden, and Thomas E. Bryant, Jr. of Bryant & McKnight, Mobile, for appellee.
   ADAMS, Justice.

Louise B. Cade died in 1975. She was survived by five children, Willie James Cade, Mary Louise Craig, Wash Cade, Jr., Lula Johnson, and Monica Cade, a minor. Willie James Cade was appointed administrator of her estate in 1979 by the Probate Court of Mobile County. Later, this action, commenced by Wash Cade, Jr., to require Willie James Cade, as administrator of the estate of Louise B. Cade, deceased, to sell or account for the use of two parcels of realty, was removed to the circuit court of Mobile County.

Wash Cade, Jr., Lula Johnson, and others appeal from the judgment of the circuit court declaring Willie James Cade to be the sole owner of all right, title, and interest in certain property, herein referred to as the “Cone Street property,” of which Louise B. Cade and her deceased husband, Wash Cade, Sr., were the record title holders. They raise two issues:

1. Whether Willie James Cade is es-topped from claiming ownership of the Cone Street property in this judicial proceeding as a consequence of having disclaimed ownership in an earlier divorce proceeding.
2. Whether the trial court erred in declaring that the Cone Street property is not a part of the estate of Louise B. Cade, deceased.

We decline to address the first issue raised by appellants. Though parts of Willie James Cade’s testimony at trial would seem to provide a factual basis for the assertion of estoppel by his having assumed an inconsistent position in another case, it is clear that appellants did not raise the issue in the trial court. Therefore, they are precluded from raising it on appeal. City of Rainbow City v. Ramsey, 417 So.2d 172, 174 (Ala.1982); Haskew v. Bradford, 370 So.2d 259, 262 (Ala.1979).

The facts of this case that are relevant to our determination of the second issue raised by appellants are as follows:

In 1962, Louise B. Cade and Wash Cade, Sr'., agreed to be the named grantees on the record title for the Cone Street property, for the purchase of which they gave a note and mortgage to Cobbs, Allen and Hall Mortgage Company, Inc. Willie James Cade and Mary Louise Craig testified that their parents acquiesced in this arrangement because Willie was unable to secure a loan for the purchase price of the property, which was $11,000.00. They also testified that Willie made the down payment of $700.00 for the property; appellants Wash Cade, Jr., and Lula Johnson testified that the down payment was made by Wash Cade, Sr. Additionally, both Willie and Wash Cade, Jr., testified that Willie was obliged to make all payments due on the note given by his parents, and that he was not required to pay rent for his use of the Cone Street property. Willie has lived on the property since its purchase in 1962.

It is undisputed that Willie made each monthly payment on the note when it was due. He also paid all ad valorem taxes and property insurance premiums for the property, and made extensive improvements thereto.

Willie secured an insurance policy on the life of his mother Louise B. Cade. He paid all premiums for the continuation of the policy. Upon the death of Louise B. Cade, the remaining balance of the mortgage indebtedness was retired with the proceeds of the policy.

Louise B. Cade and Wash Cade, Sr., made arrangements for a homeplace for their daughter, Lula Johnson, similar to those discussed above. They also had attempted to provide a home for Willie before the acquisition of the Cone Street property, but Willie had defaulted on a loan necessary for the purchase.

The appropriateness of the trial court’s judgment finding Willie to be the sole owner of all right, title, and interest in the Cone Street property depends upon whether he was entitled to have a resulting trust impressed on the property for his benefit. Based on our review of the appropriate law, which was not addressed by either party to this appeal, we conclude that the trial court’s judgment in Willie’s favor is due to be affirmed.

The case of Shirley v. McNeal, 274 Ala. 82, 145 So.2d 415 (1962), most clearly supports our conclusion in this case. In Shirley v. McNeal, this court recited the law that is applicable to the facts at hand. The court stated that in the case of “... a party to such purchase, who makes the cash payment, or his aliquot portion thereof, and becomes absolutely bound for the deferred installments, and thereafter pays the same, the deed being taken in the name of another, a resulting trust arises.” Shirley v. McNeal, 274 Ala. at 87, 88, 145 So.2d at 420. This court further stated that the facts which give rise to a resulting trust must be demonstrated with “full, clear and satisfactory” evidence. Id.

The trial judge listened to numerous witnesses’ extensive testimony concerning the ownership of the Cone Street property. There was considerable testimony to the effect that Willie made the down payment, though there was some evidence to the contrary. Moreover, both Willie and Wash Cade, Jr., indicated that Willie was obligated to pay the deferred installments on their father’s note.

Having reviewed the transcript of the testimony at trial, we think that there was clear and convincing evidence to support the trial court’s decision to exclude the property from the estate of Louise B. Cade, deceased. It was not manifestly unjust or palpably erroneous for the trial court to conclude that the property was deeded to Louise Cade and Wash Cade, Sr., merely as an accommodation for the appellee. See Satterfield v. Decker, 437 So.2d 506, 508 (Ala.1983); Haynie v. Byrd, 429 So.2d 973, 975 (Ala.1983). Therefore, we think the trial court’s decision to vest record title in Willie is due to be affirmed. Shirley v. McNeal, 274 Ala. at 88, 145 So.2d at 420.

For the foregoing reasons, the judgment of the trial court is affirmed.

AFFIRMED.

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


author: ALMON, Justice.

text:
    CH2M HILL SOUTHEAST, INC., a Corporation v. SANDERS LEAD COMPANY, INC., a Corporation.
    82-1045.
    Supreme Court of Alabama.
    May 4, 1984.

      Robert E. Sasser and John T. Alley, Jr. of Jones, Murray, Stewart & Yarbrough, Montgomery, for appellant.
    N.J. Cervera and Francis P. Ralph, Troy, for appellee.
   ALMON, Justice.

It is undisputed that the defendant, Sanders Lead Co., Inc., owed the plaintiff, CH2M Hill Southeast, Inc., the sum of $17,-865.29 for work and labor which the plaintiff performed for the defendant pursuant to several contracts between the parties. These contracts also provided that interest of 1% per month would be charged on all past-due accounts.

Based on the evidence, the trial judge properly granted summary judgment in favor of the plaintiff but apparently miscalculated the prejudgment interest which the plaintiff was clearly entitled to recover pursuant to these contracts. We therefore reverse the judgment of the trial court and remand for recalculation of the plaintiff’s prejudgment interest.

Additionally, we note that the contract also called for the losing party to pay reasonable attorney’s fees. It is unclear from the record exactly what transpired on this matter. We therefore remand for a hearing to receive evidence as to a reasonable fee for plaintiff’s attorney.

The judgment of the circuit court is reversed and the cause remanded for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

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


text:
    Michael McDUFFIE v. FIRST NATIONAL BANK OF TUSKALOOSA, Administrator of the Estate of E.D. McDuffie, deceased.
    82-732.
    Supreme Court of Alabama.
    May 11, 1984.

      William P. Gray, Jr. of Gray, Espy & Nettles, Tuscaloosa, for appellant.
    David L. Carroll of Rosen, Harwood, Cook & Sledge, Tuscaloosa, for appellee.
   ADAMS, Justice.

This is an appeal from a declaratory judgment. The First National Bank of Tuskaloosa, as administrator with will annexed of the estate of Ernest Dwight McDuffie (McDuffie), deceased, sought a determination as to whether certain property constituted assets of McDuffie’s estate. Glenn D. McDuffie and appellant, Michael H. McDuffie, are the only children of the deceased. Following a hearing on the matter, the trial court held the property to be assets of the estate. We affirm.

The lawsuit arose from the following facts:

On or about October 22, 1980, McDuffie executed a warranty deed purporting to convey certain real property, known as the “Three Branches” property, to Michael McDuffie. This instrument was witnessed by Pat Sanders, a secretary in McDuffie’s law firm, and was witnessed and notarized by Norma Holcombe, McDuffie’s law partner.

The next day, McDuffie executed another warranty deed. This one purported to convey an interest to Glenn McDuffie in certain property known as the “Fifth Avenue” property. This deed was witnessed and notarized by Miss Holcombe, and was also witnessed by Mary Johns, another secretary in the office. The deeds were never recorded.

It is undisputed that the deeds were not intended to be effective at the time they were executed. At that time, McDuffie instructed the people in his office that the deeds were not to be delivered, but were to be kept in the office until McDuffie decided that they should be delivered. Both secretaries testified as to these instructions, and both testified that, if McDuffie ever decided that the deeds should be delivered, they were unaware of it. Miss Holcombe died subsequent to McDuffie’s death, but prior to the hearing.

Because of illness, McDuffie left his law practice a few days before Christmas, 1980. His belongings were removed from his private office by office personnel. There is testimony that the deeds remained in the “closed files” of the office until after McDuffie’s death on January 23, 1981. McDuffie’s wife testified that in late December McDuffie visited the office and was looking for something, but did not say what he was looking for, and never mentioned any deeds.

Mark Stephens, a former law partner of McDuffie and Miss Holcombe, stated in court that, in early December 1980, McDuf-fie told him he had executed the deeds but did not want them to be effective at that time. McDuffie also stated to Stephens that he had given the deeds to Norma Holcombe to hold, and that they were not to be delivered.

Mrs. McDuffie, in her testimony, said that, on numerous occasions between early December 1980 and his death in late January 1981, McDuffie told her he wanted his two sons to have the two parcels of real estate. McDuffie never mentioned deeds to her. She was not aware that Glenn was to receive only a life estate in the Fifth Avenue property, with a remainder to McDuffie’s grandchildren. At one point in Mrs. McDuffie’s testimony, the following exchange took place between Mrs. McDuf-fie and the trial judge:

Mrs. McDuffie: I assumed it was all taken care of from the way he talked.
Court: You used those words several times. Is that the words he used, that it was all taken care of?
Mrs. McDuffie: Yes.

Another witness, a friend of Michael McDuffie, testified that it was her understanding that the Three Branches property had been given to Michael, but that she always left the room when the subject came up between Michael and his father, so that they could talk privately.

There was further testimony that Norma Holcombe came by McDuffie’s house every day after he stopped going to the office, but there was no evidence that he ever mentioned the deeds to her.

The trial court allowed into evidence certain memoranda attached to the deeds. These memoranda, purportedly written by Norma Holcombe, stated that the deeds had not been delivered.

The issues raised by the parties are, in substance, as follows:

1. Were the deeds executed by McDuffie, granting interests in real estate to his sons, ever effectively delivered?
2. Did the trial court commit reversible error in admitting into evidence the memoranda purportedly written by a deceased third party?

We are of the opinion that the grantee’s evidence fails to show delivery of the deeds and that the trial court did not commit reversible error in admitting into evidence the memoranda attached to the deeds. The judgment of the trial court is affirmed.

The trial court found that McDuffie “gave the deeds to the members of his law firm to hold for safekeeping pending a change in his intention.” The law of delivery in such a situation was summarized by this court in Chandler v. Chandler, 409 So.2d 780 (Ala.1981):

The well-settled, and equally well-understood, “sufficiency of delivery” principle, where delivery is made to a person other than the grantee or his agent, is discussed in Fitzpatrick v. Brigman, 130 Ala. 450, 30 So. 500 (1900):
“[T]he delivery must be so effectual as to deprive the grantor of the right to revoke it. For so long as he reserves to himself the locus penitentiae, there is no delivery — no present intention to divest himself of the title to the prop-erty_ [T]he grantor need not expressly reserve to himself this right to repent, but if his act upon which a delivery is predicated does not place the deed beyond his control, as a matter of law, then his right of revocation is not gone.
“... ‘The law does not presume, when a deed is handed to a third person, that it has been with the intention to pass title to the grantee. In order to make such an act a delivery to the grantee, the intention of the grantor must be expressed at the time in an unmistakable manner..’ — 5 Am. & Eng.Encyc.Law (1st ed.), note 4, on p. 448.” Cited with approval and applied in Culver v. Carroll, [175 Ala. 469, 57 So. 767 (1911)].

409 So.2d at 781. In that case this court went on to hold that there was effective delivery, based upon “J.W. Chandler’s unequivocal instruction to the third party to deliver the deed, upon his death, to his son J.P.” 409 So.2d at 782. In the case before us, however, there is no evidence that McDuffie ever communicated to anyone in his office any directions that the deeds were to be delivered. Therefore, under the law as set out in Chandler, supra, there was no effective delivery of the deeds.

The appellant argues that, because the deeds were kept in the files of the law firm of which McDuffie was a partner with directions that they should not be delivered until he gave further instructions, he never delivered the deeds to anyone for safekeeping. Therefore, they conclude, delivery is dependent on the intention of the grantor, derived from what he said and did at the time he executed the deed or subsequent to that time, regardless of the absence of specific instructions to a third party. See Watson v. Watson, 283 Ala. 214, 215 So.2d 290 (1968); Low v. Low, 255 Ala. 536, 52 So.2d 218 (1951).

In a case such as this, where a court has made findings of fact based on evidence presented ore tenus, those findings of fact will not be disturbed on appeal unless clearly erroneous or manifestly unjust. Gulledge v. Frosty Land Foods International, Inc., 414 So.2d 60 (Ala.1982). In the instant case the judge stated:

The evidence is clear and convincing that at the time of the execution, E.D. McDuf-fie did not intend for the deeds to be effectual and that the deeds were to be held in his office, in the event that he changed his mind and decided to deliver the deeds.
The evidence presented by counsel for the grantees is insufficient to show any change of intention by E.D. McDuffie and is, therefore, insufficient to meet the first requisite of a valid delivery, that of intention.

The trial court then went on to say:

The evidence supports the proposition that E.D. McDuffie gave the deeds to the members of his law firm to hold for safekeeping pending a change in his intention. There was no evidence presented which would show that E.D. McDuffie ever communicated any directions to the members of his law firm to deliver the deeds in question. Therefore, it is the finding of this Court that there was no effective gift of the property, inasmuch as there was no direction to the third party charged with the safekeeping of the deeds to deliver said deeds.

We conclude not only that the trial court’s findings of fact are not clearly erroneous or manifestly unjust, but that they are clearly supported by the evidence in the record.

The appellant finally argues that the admission of certain handwritten mem-oranda attached to the deeds was reversible error. The evidence indicates that these notes were written by Norma Hol-combe. We find the memoranda to be hearsay, which should not have been admitted into evidence by the court. However, we conclude that admitting the memoranda amounted to harmless error. Rule 45, A.R. A.P., states:

No judgment may be reversed or set aside, nor new trial granted in any civil or criminal case on the ground of misdirection of the jury, the giving or refusal of special charges or the improper admission or rejection of evidence, nor for error as to any matter of pleading or procedure, unless in the opinion of the court to which the appeal is taken or application is made, after an examination of the entire cause, it should appear that the error complained of has probably injuriously affected substantial rights of the parties.

More specifically, with regard to cases presented ore tenus, this court has said:

It has long been the rule that where a cause is tried by the court without a jury, the admission of illegal evidence raises the presumption of injury, and requires the reversal of the judgment unless the remaining evidence is without conflict and is sufficient to support the judgment.

Liberty National Life Insurance Co. v. Harrison, 274 Ala. 43, 145 So.2d 219 (1962) (emphasis added). While the admissible evidence in the case before us is given two different interpretations by the opposing parties, it is itself without conflict, and is sufficient to support the judgment. Thus, the judgment meets the test under either of the above-quoted rules, and need not be reversed because of the admission of the memoranda into evidence.

For all the above reasons, the judgment of the trial court is due to be, and it hereby is, affirmed.

AFFIRMED.

TORBERT, C.J., and FAULKNER, SHORES and EMBRY, JJ., concur.


author: ADAMS, Justice. TORBERT, Chief Justice

text:
    Gerald VINES v. The BIRMINGHAM BASEBALL CLUB, INC., et al.
    83-146.
    Supreme Court of Alabama.
    May 11, 1984.
    Victor L. Miller, Jr., Birmingham, for appellant.
    Ann McMahan Perry of Spain, Gillon, Riley, Tate & Etheredge, Birmingham, for appellees.
   ADAMS, Justice.

Gerald Vines, plaintiff below, appeals from a summary judgment rendered by the Circuit Court of Jefferson County in favor of the Birmingham Baseball Club, Inc. Vines contends that summary judgment is precluded by the existence of a genuine issue of material fact.

The pertinent facts of this case are as follows:

On August 6, 1982, appellant Vines attended a professional baseball game at Birmingham’s Rickwood Field in the company of his wife and another couple. He arrived at the field approximately twenty minutes before the start of the game between the Birmingham Barons and a visiting team. He purchased a ticket to the game at a ticket window, and went inside the ballpark to his seat, which was in the stands along the right side of the playing field, beyond the seating areas protected by screens. At some point during the game, Vines was struck in the head by a baseball batted by a Birmingham Baron. He suffered serious facial injuries.

Vines filed this action, alleging that the Birmingham Baseball Club breached its duty, as operator of the field, to reasonably care for the safety of spectators by failing to warn them of dangers incident to the sport of baseball. In addition to asserting that it owed no duty to Vines, the baseball club raised the affirmative defense that Vines had assumed the risk of being hit by a batted ball.

The baseball club filed a motion for summary judgment against Vines, once again asserting that Vines had assumed the risk of being struck by a batted ball. Following its initial overruling of the motion, the trial court granted the motion, based on its consideration of the supporting affidavit of the baseball club’s general manager “in connection with the entire court file.” After thorough review of the record, we affirm the judgment of the trial court.

In his affidavit in support of the baseball club’s motion for summary judgment, the club’s general manager stated that on the date of Vines’s injury there were several signs placed in open and obvious locations around Rickwood Field warning spectators of the dangers of being hit by a thrown or batted ball. He specified that the signs were near to the ballpark’s entrances, through one of which Vines must have passed to enter. He also stated that Vines could have chosen to watch the game from a seating area protected by a screen, but had not done so.

We think it was incumbent upon Vines to rebut the reasonable inference that he was alerted by the baseball club’s signs to the dangers incident to his viewing of the baseball game and that he voluntarily chose to sit in an unscreened seat; he should have responded to the club’s motion for summary judgment with specific facts showing that there were genuine issues for trial. Rule 56(e), A.R.Civ.P.; Harold Brown Builders, Inc. v. Jordan Co., 401 So.2d 36, 38 (Ala.1981). His failure to respond to the motion and the statements in the supporting affidavit put him in the perilous circumstance of having the trial court consider the issues of the case in light of the evidence adduced by the club, which included Vines’s answers to interrogatories and the affidavit of the club’s general manager. See Harold Brown Builders, Inc. v. Jordan Co., 401 So.2d at 38. We have studied that evidence and agree with the trial court that it presented no genuine issue as to any material fact.

For the foregoing reasons, the summary judgment of the trial court is due to be affirmed.

AFFIRMED.

FAULKNER and EMBRY, JJ., concur.

TORBERT, C.J., concurs specially.

ALMON, J., concurs in the result.

TORBERT, Chief Justice

(concurring specially).

I agree with the result of the majority opinion affirming summary judgment. Furthermore, I agree that the evidence un-disputedly shows that plaintiff assumed the risk of being struck. In addition, however, I am persuaded by defendant’s argument that no duty was owed to the plaintiff outside of those steps taken by defendant before the accident. Given that defendant fulfilled its duty, it is unnecessary to reach the question of assumption of risk because this defense presumes the existence of a risk created by defendant’s negligence. If defendant has satisfied its duty and therefore is not negligent, we must find for the defendant regardless of plaintiff’s assumption of risk.

There is authority for the proposition that owners of a baseball park owe certain duties to their patrons: to provide screened seats for those portions of the stands which are most often subject to the hazard of foul balls and screened seats for as many as may reasonably be expected to desire them; Anderson v. Kansas City Baseball Club, 231 S.W.2d 170, 173 (Mo.1950); Keys v. Alamo City Baseball Co., 150 S.W.2d 368, 371 (Tex.Civ.App.1941); and to properly maintain the screens and keep them free of defects; see, e.g., Edling v. Kansas City Baseball & Exhibition Co., 181 Mo.App. 327, 332, 168 S.W. 908, 910 (1914). Birmingham Baseball Club provided screened seating in the grandstand area. Plaintiffs did not contend that the screened seating was inadequate. Hence, Birmingham Baseball Club fulfilled this duty.

Plaintiff contends that Birmingham Baseball Club had a duty to warn him of the risk of foul balls. Alabama courts have not decided this precise question. Other jurisdictions have reached conflicting conclusions. Compare Jones v. Three Rivers Management Corp., 483 Pa. 75, 394 A.2d 546, 550 n. 5 (1978), Knebel v. Jones, 266 S.W.2d 470, 476 (Tex.Civ.App.1954), and Anderson v. Kansas City Baseball Club, 231 S.W.2d 170, 173 (Mo.1950), with Falkner v. John E. Fetzer, Inc., 113 Mich. App. 500, 502-03, 317 N.W.2d 337, 339 (1982). See also James, “Assumption of Risk,” 61 Yale L.J. 141, 148 (1952). See generally Gray v. Mobile Greyhound Park, Ltd., 370 So.2d 1384 (Ala.1979). Even if we were to accept plaintiff’s legal position, we would find that the signs and ticket stub warnings were sufficient to satisfy any duty owed by Birmingham Baseball Club. Indeed, plaintiff does not suggest any improvements that could be made in the warning. Nor does plaintiff contend that individual warnings were appropriate.

“It would have been absurd, and no doubt would have been resented by many patrons, if the ticket seller, or other employees, had warned each person entering the park that he or she would be imperiled by vagrant baseballs in un-screened areas. And yet that would have been defendant’s duty, if plaintiff’s contention is sound. We overrule that contention.”

Keys v. Alamo City Baseball Co., 150 S.W.2d 368, 371 (Tex.Civ.App.1941). Therefore, under plaintiff’s position, Birmingham Baseball Club satisfied its duty of care.

Finding no breach of defendant’s duty of care, this Court does not need to consider assumption of risk. While admittedly the defense of assumption of risk does involve consideration of several of the factors used in analyzing duty, the practical difference can be quite real.

“Whether or not the basis predicative of an assumption of risk, in a factual situation such as that before us, can more accurately be said to establish the absence of any duty on the part of the defendant which might give rise to negligence — so that the term ‘assumption of risk’ may have become ‘simply a left-handed way of describing a lack of duty’ ... — seems not greatly material, as respects this case at least. The lack of duty concept would, however, render unnecessary the pleading of assumption of risk as an affirmative defense, assuming such plea otherwise necessary.”

Baker v. Topping, 15 A.D.2d 193, 195-96, 222 N.Y.S.2d 658, 660-61 (1961) (citations omitted). I have written this special concurrence, moreover, to delineate, as clearly as possible, the basis for decision in tort law, an area plagued by overlap and confusion. Justice Embry provided the conclusion to my opinion when he addressed assumption of risk, duty, and the hazard of foul balls at a baseball game:

“One does not assume the risk of the flying baseballs because one knows that the balls are apt to come in contact with the cranium; it is because the ball park owes no duty to protect against the risks inherent in the nature of the activity taking place at that time, on that occasion.”

Employers Casualty Co. v. Hagendorfer, 393 So.2d 999, 1003 (Ala.1981) (EMBRY, J., concurring specially).


author: PER CURIAM. MADDOX, Justice

text:
    Ann ADCOCK & William A. Adcock, Sr. v. Janell WINDHAM, et al.
    83-148.
    Supreme Court of Alabama.
    May 11, 1984.

      William M. Hammond, Elba, for appellants.
    James Prestwood, Andalusia, for appel-lees.
   PER CURIAM.

The sole question on appeal is whether the trial court properly granted the defendants’ Rule 12(b)(6), Ala.R.Civ.P., motion which resulted in the dismissal of the plaintiffs’ negligence claim. We conclude that the trial court’s action was improper and reverse.

The plaintiffs are Ann Adcock and William A. Adcock, Sr., wife and husband. Ann Adcock, who was an employee of Columbia General Hospital and Nursing Home, Inc., in Covington County, filed a negligence action, for injuries that she alleged she received during the course of her employment, against Janell Windham, director of nurses, Jean Ray, assistant administrator of the nursing home, and Sybil Sox, administrator of the nursing home, as well as other named and fictitious defendants. The complaint also alleged, on behalf of William Adcock, a loss of consortium.

On June 16, 1983, the defendants filed a 12(b)(6) motion, which the trial court granted on August 1, 1983. The plaintiffs then, in timely fashion, amended their complaint, whereupon the defendants filed another 12(b)(6) motion. This motion was likewise granted by the trial court and the Adcocks now appeal.

The pertinent portion of the plaintiffs’ amended complaint was as follows:

“... [I]n May, 1982, [Ann Adcock] was working in Columbia General Hospital and Nursing Home, Inc., in Covington County, Alabama, caring for patients in the nursing home. Said plaintiff alleges that a fellow employee had restrained an elderly patient in a chair using improper restraints, no proper restraints being available or provided, and that said elderly patient got free of said improper restraints, stood up and began to fall whereupon said plaintiff caught said elderly patient. Said plaintiff was pulled down in keeping said elderly patient from falling to the floor whereupon said plaintiff was caused to suffer serious injury to her back and spine. Plaintiff further alleges that no proper patient restraints were provided for her and her fellow employees to use in restraining patients; that defendants knew that proper restraints existed and should have been provided; that in said absence of proper restraints, it was long-standing practice to use improper restraints; and that such use of improper restraints created a dangerous condition for both patients and employees such as plaintiff Ann Adcock. Said plaintiffs allege that the defendants were responsible for providing her with a safe workplace and for seeing that proper equipment, including proper patient restraints, was provided.”

The three essential elements of a complaint alleging negligence are: (1) a legal duty; (2) an injury; and (3) a breach of that legal duty which is the proximate cause of the injury. See T G & Y Stores v. Atchley, 414 So.2d 912, 914 (Ala.1982). The absence of any of these elements renders a complaint bad or the evidence insufficient. City of Mobile v. Havard, 289 Ala. 532, 536, 268 So.2d 805, 808 (1972).

Applying the elementary principles of tort law to the facts alleged in the complaint, we must first consider whether the complaint in its present form fails to state a claim upon which relief can be granted and, if so, whether the trial court correctly determined that the action could not be saved by any amendment of the complaint which the plaintiff could reasonably be expected to make.

In Bowling v. Pow, 293 Ala. 178, 301 So.2d 55 (Ala.1974), this Court set out the rule of law applicable when the trial court considers a motion to dismiss. There, the Court opined:

“The adoption of the Alabama Rules of Civil Procedure precludes us from testing the sufficiency of the complaint by a rule that formerly governed, that a complaint challenged by demurrer should be construed against the plaintiff, if the complaint is reasonably subject to such a construction. By adoption of the Alabama Rules of Civil Procedure, the opposite principle of construction obtains, following the established principle set forth in DeWitt [v. Pail, 366 F.2d 682, 686 (9th Cir.1966)], as follows:
“ ‘A complaint is not subject to dismissal upon the ground that it fails to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80; Marshall v. Sawyer, 9 Cir., 301 F.2d 639, 647. In applying this test it is to be borne in mind that the spirit of the Federal Rules of Civil Procedure requires us to construe the pleadings most strongly in favor of the pleader. Metropolitan Life Ins. Co. v. Fugate, 5 Cir., 313 F.2d 788, 795. A liberal construction of the pleadings is especially called for where they were prepared by a layman, Downing v. New Mexico State Supreme Court, 10 Cir., 339 F.2d 435, 436.’
“In 1 Lyons, Alabama Practice, Rules of Civil Procedure Annotated 96-97, is the following succinct statement of the controlling principle of construction of pleadings:
“ ‘Rule 8 is expressly intended to repudiate the long standing doctrine in Alabama of construing the pleadings strictly against the pleader, when ruling on demurrer. See Alabama Baptist Hospital Board v. Carter, 226 Ala. 109, 145 So. 443 (1933); Richards v. Richards, 98 Ala. 599, 12 So. 817 (1892); Childress v. Miller, 4 Ala. 447 (1842). According to Rule 8(f), the goal of the proposed rule is to construe the pleadings so as to do substantial justice. “In appraising the sufficiency of the complaint we follow ... the accepted rule that a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Dennis v. Village of Tonka Bay, 151 F.2d 411 (2d Cir.1944); 5 Wright and Miller, Federal Practice and Procedure, §§ 1220, 1286 (1969).’ ”

293 Ala. at 186, 301 So.2d at 62 (1974).

The proper dismissal of a complaint for failure to state a cause of action is rare in negligence cases. We conclude that it is not beyond doubt that plaintiffs can prove no set of facts in support of their claim; therefore, we hold that the court’s action in dismissing the complaint was improper in this case, and consequently, we reverse the judgment and remand the cause to the trial court for proceedings not inconsistent with this opinion.

REVERSED AND REMANDED.

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

MADDOX and FAULKNER, JJ., dissent.

MADDOX, Justice

(dissenting).

Although I am quite aware of the strict rule which we use to determine whether a complaint can be dismissed for failure to state a claim, it appears to me that as to the complaint in this case, which sets out in some detail how the alleged negligence occurred, dismissal was appropriate.

Under the facts as alleged in the complaint, I would hold that the defendants were not bound to anticipate or foresee that plaintiff Ann Adcock would be injured. Stated another way, she was not “a member of the foreseeable class and was [not] injured in the precise manner which the exercise of that degree of care imposed on the [defendants] would have protected her against.” Alabama Power Co. v. Taylor, 293 Ala. 484, 498, 306 So.2d 236, 249 (1975).

In Alabama, foreseeability is the cornerstone of proximate cause. Alabama Power Co. v. Taylor, supra. Moreover, when the facts of a case are such that reasonable men must draw the same conclusion, the question of proximate cause is one of law for the courts. City of Mobile v. Havard, 289 Ala. at 532, 538, 268 So.2d 805, 810 (1972); Morgan v. City of Tuscaloosa, 268 Ala. 493, 496, 108 So.2d 342, 345 (1959).

In City of Mobile v. Havard, this Court held:

“For an act to constitute actionable negligence, there must be not only some causal connection between the negligent act complained of and the injury suffered, but also the connection must be by a natural and unbroken sequence, without intervening, efficient causes, so that, but for the negligence of the defendant, the injury would not have occurred. The negligence must not only be a cause, it must be the proximate cause of injury. Western Railway of Alabama v. Mutch, 97 Ala. 194, 11 So. 894, 21 L.R.A. 316; Mobile City Lines, Inc. v. Proctor, 272 Ala. 217, 130 So.2d 388.
“Where it is determined that some pri- or negligent act merely created the condition or gave rise to the occasion and after the creation of said condition an intervening, independent agency produces an injury, the party guilty of the first negligent act is not liable because his negligence was but a remote cause of the injury. Louisville & N.R. Co. v. Maddox, 236 Ala. 594, 183 So. 849, 118 A.L.R. 1318; Watt v. Combs, 244 Ala. 31, 12 So.2d 189, 145 A.L.R. 667.”

289 Ala. at 538, 268 So.2d at 810.

I realize that a judgment dismissing a complaint is rarely appropriate in a negligence action; nevertheless, I would conclude from the facts as alleged by plaintiffs in their complaint, that there was no causal connection between the alleged failure of the defendants to provide proper chair restraints for nursing home patients and the injury complained of. Construing the allegations of the complaint favorably to the plaintiffs, it is undisputed that plaintiff Ann Adcock allegedly injured her back when she caught an elderly patient as the patient “began to fall” and “was pulled down in keeping said elderly patient from falling to the floor.” Although the restraints holding the patient may have been deficient, and although the patient’s actions in freeing herself, attempting to stand, and then falling, may have been reasonably foreseeable, I do not believe that this plaintiffs back injury was reasonably foreseeable. Clearly, she was not “injured in the precise manner which the exercise of that degree of care imposed on the [defendants] would have protected her against.” Alabama Power Co. v. Taylor, supra.

While the'issue of proximate cause is almost always one for the jury to decide after having been properly instructed, Roberts v. Meeks, 397 So.2d 111, 114 (Ala.1981), where each count of a complaint shows on its face that there is no causal connection between the alleged negligent act and the injury complained of, it is the duty of the trial court to dismiss the complaint for its failure to state a claim against the defendant upon which relief can be granted. See City of Mobile v. Havard, supra, 289 Ala. at 537, 268 So.2d at 809; Morgan v. City of Tuscaloosa, supra, 268 Ala. at 496, 108 So.2d at 345; see also Rule 12(b)(6), Ala.R. Civ.P.

For the reasons stated above, I think that the complaint in the instant action was insufficient to survive a motion to dismiss; therefore, I would affirm the judgment of' dismissal by the trial court.

FAULKNER, J., concurs.


author: JONES, Justice.

text:
    Ex parte REAL ESTATE FINANCING, INC. (In re Randell FORRESTER and Joyce Forrester v. REAL ESTATE FINANCING, INC.).
    83-503.
    Supreme Court of Alabama.
    May 11, 1984.
    A.J. Coleman, Decatur, Joseph Phillip Borg, Montgomery, for petitioner.
    C.B. Caine, Jr., Moulton, for respondents.
   JONES, Justice.

This is a petition for a writ of mandamus to direct Judge Billy C. Burney of the Lawrence County Circuit Court to transfer an action from Lawrence County to Morgan County. The writ is denied.

Randell and Joyce Forrester, residents of Lawrence County, instituted this action in Lawrence County Circuit Court against Real Estate Financing, Inc. (REF), a domestic corporation with its principal office in Montgomery. The Forresters alleged breach of contract, misrepresentation, negligence, and wantonness with regard to the handling of their loan application made by and through REF. REF moved for dismissal for improper venue, or, in the alternative, for transfer of the action to Morgan County Circuit Court. Following the denial of this motion, REF filed this petition for writ of mandamus.

The only question presented is the propriety of the trial court’s denial of REF’s motion to transfer the case from Lawrence to Morgan County. REF, in support of its petition, summarizes the facts thusly:

“At the time the purported cause of action arose, at the time of the filing of suit, and at all intervening times, REF had no office in Lawrence County, and was not represented by agent there. REF did not go to Lawrence County to take loan applications, and all loans secured by Lawrence County realty resulted from work done with applicants and builders through the Decatur, Morgan County office of REF. Loans secured by Lawrence County property constituted a small percentage of the total business handled by the Decatur office, and an infinitesimal part of the total REF loan business. Applications for loans made on Lawrence County property during the time in question were made at REF’s branch office in Decatur, Morgan County, Alabama, and all processing and work-up of the said loan applications was ' done in Morgan County. All papers essential to the processing and handling of such loans are handled by REF in Montgomery and where appropriate, [are sent] to HUD [United States Department of Housing and Urban Development] in Birmingham, Alabama or to individually assigned appraisers by HUD.”

Respondents emphasize that once a loan contract is approved a closing takes place, with execution of the appropriate documents, receipt of closing costs, and the recording of the mortgage, all of which are performed in Lawrence County by lawyers employed by REF for that purpose. Central to the Respondents’ position is the fact that their property, the subject matter of their HUD “235” loan application, lies in Lawrence County. Respondents further emphasize that, as an incident to each such loan closing, REF necessarily either satisfies the mortgage upon payment thereof, or effects a mortgage foreclosure for failure of payment, both of which, they say, are corporate acts performed by REF in Lawrence County.

In its reply brief, REF stresses the nominal degree of its activities with respect of Lawrence County residents:

“The affidavits of [REF employees] indicate that all of the activities of REF in connection with the Forresters occurred through the Decatur office in Morgan County where REF does business by agent, and this characterizes REF’s dealings with other loan applicants from Lawrence County. Over a fifteen year period only 53 loans were closed on Lawrence County property, constituting less than Vio of 1% of the total loans made by REF state-wide, with Lawrence County loans constituting not more than 4% of the business done by REF through its Decatur office in 1983, the year in which suit was filed.”

The applicable venue statute is Code 1975, § 6-3-7:

“A foreign corporation may be sued in any county in which it does business by agent, and a domestic corporation may be sued in any county in which it does business by agent or was doing business by agent at the time the cause of action arose; provided, that all actions against a domestic corporation for personal injuries must be commenced in the county where the injury occurred or in the county where the plaintiff resides if such corporation does business by agent in the county of the plaintiff’s residence.”

In order to decide the question of proper venue, we must first determine whether the lower court had sufficient facts before it to ascertain that REF was doing business in the county. See Ex parte Harrington Manufacturing, Inc., 414 So.2d 74 (Ala.1982); Ex parte Wilson, 408 So.2d 94 (Ala.1981). The Forresters contend that, because REF employs lawyers to close loans in Lawrence County, suit is properly brought there, pointing out that lawyers who close REF loans in Lawrence County are undoubtedly employed by REF for that purpose.

REF, on the other hand, takes the position that the employment of lawyers to close loans from time to time is insufficient to constitute “doing business by agent” in Lawrence County as required by the statute. REF reminds us that the authority of the forum to entertain an action under § 6-3-7 is founded upon the fact of agency—the express authority granted by the corporation to one to act for it in the doing of its business, Assured Growth Corp. v. Tomberlin, 334 So.2d 918 (Ala.Civ.App.1976); and that an agent employed for a specific purpose is a special agent and the fiduciary relationship of principal and agent, in a special agency context, applies only to the acts within their agreement. City Stores Company v. Williams, 287 Ala. 385, 252 So.2d 45 (1971).

In the abstract, we agree that a domestic corporation’s employment of a lawyer in private practice (as distinguished from corporate house counsel) on a case by case basis, involving the giving of legal advice and the rendering of legal services generally, does not constitute “doing business by agent” as contemplated by § 6-3-7. For a good statement of this rule, see 3 Am.Jur.2d Agency § 3 (1962). But the facts of this case, considered in the context of REF’s corporate purpose, remove REF from the confines of this abstract proposition.

While in one sense it may be said that REF has two corporate purposes—1) the obtaining and processing of loan applications; and 2) the closing of approved loans—in a more realistic sense, the former is only an administrative adjunct to the latter. In other words, the making of HUD-approved “235” loans is the very essence of REF’s corporate function.

It is not the rendering of strictly legal services by REF’s closing attorneys that tips the scales in favor of the trial court’s denial of Petitioner’s motion to transfer; rather, it is the accumulation of REF’s multiple corporate activities that ultimately consummate REF’s single corporate purpose: the lending of money in Lawrence County, to Lawrence County residents, secured by mortgages on the borrowers’ Lawrence County property; and attended by the receipt of closing costs in Lawrence County, the recordation of the mortgages in Lawrence County, and the satisfaction of the mortgages of record in the event of payment or foreclosure in the event of nonpayment.

Furthermore, although the record is silent on this point, the .trial court judicially knew, because of the nature and kind of the transaction, that REF necessarily performed additional corporate activities in connection with the inspection and approval of Respondents’ proposed building site, as well as inspections and supervision during, and upon completion of, construction, again, all in Lawrence County. To be sure, a contrary holding, under the circumstances of this case, would be the virtual equivalent of a judicial denial of REF’s corporate existence. See J.R. Watkins Co. v. Goggans, 242 Ala. 222, 5 So.2d 472 (1941).

Finding no error, we deny the writ.

WRIT DENIED.

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