Preston C. Clayton

This case concerns the calculation of the cost basis of real property (the "Hood Corner") acquired by First National Bank of Birmingham in a 1926-1927 exchange, for purposes of determining the bank's net income and resulting Alabama excise tax liability for financial institutions in 1944. The State Department of Revenue assessed the property's cost at $299,872.50, leading to a claimed profit on its 1943 sale, while the bank argued for a higher basis reflecting additional consideration given in the exchange. The court held that the substance of the transaction showed the bank provided extra value beyond cash and assumed mortgages—specifically by transferring another building below its market value—so the total cost basis was $899,872.50. It therefore reversed the lower court's decree affirming the assessment and remanded for entry of judgment in the bank's favor for the resulting tax overpayment. The decision turned on construing the overall contracts and deeds to determine the true economic cost, without regard to the form of the exchanges or the absence of an excise tax statute in 1926-1927.

taxesbusiness & regulatoryproperty

This case involved buyers of a house and lot suing the sellers for damages based on alleged misrepresentations by the sellers' agent about the house being well-built with good materials, the septic tank functioning properly to handle all sewage, and a ditch on the property containing only rainwater except during heavy rains. The jury returned a verdict for the plaintiffs awarding $2,500, which included both compensatory and punitive damages. The Alabama Supreme Court held that the evidence did not support an award of punitive damages due to lack of proof of intent to deceive or reckless knowledge of falsity by the agent, but found the evidence sufficient to uphold compensatory damages for the misrepresentations, and thus conditioned affirmance of the judgment on a remittitur reducing it to $1,500.

propertytorts & liability

This case involved an Alabama corporation operating in both Alabama and Mississippi that claimed a credit against its Alabama corporate income tax for taxes paid to Mississippi on out-of-state income, pursuant to Section 390 of Title 51 of the Alabama Code. The State Department of Revenue used a formula limiting the credit to a proportion of the total Alabama tax based on the ratio of Mississippi gross income to total gross income, resulting in an assessment of additional tax. The taxpayer challenged the assessment, and the trial court overruled the state's demurrer. The Alabama Supreme Court affirmed, holding that the statute provides a credit up to the amount of Alabama tax that would be due on the out-of-state income at Alabama rates without the additional gross-income proportion limitation imposed by the Department, and that the Department lacks authority to add such a restriction by administrative rule.

taxesbusiness & regulatory

In Montgomery City Lines, Inc. v. Davis, the plaintiff sought damages for personal injuries to her back, knee, and neck sustained when the defendant's bus rear-ended her stopped car, with the defendant's liability admitted so that only the amount of damages remained at issue. The trial court entered a $8,000 judgment for the plaintiff, which the defendant appealed on grounds that the verdict was excessive due to jury passion or prejudice, constituted an improper quotient verdict, and resulted from the erroneous refusal of certain jury charges. The Alabama Supreme Court affirmed, reasoning that conflicting expert testimony on the extent and permanence of the neck injuries created a jury question, the verdict was not shown to be a gambling or quotient verdict under applicable precedents, and the refused charges were either covered by the oral charge or properly denied.

torts & liability

The case involved Mittie Harrison appealing a decree disallowing her $5,000 claim against the estate of her deceased mother-in-law for groceries, cooking, maid service, utilities, and personal care provided over the last six years of the decedent's life. The Supreme Court of Alabama affirmed the lower court's decision to reject the claim after it was contested by other heirs in the administration proceedings transferred to equity. The court reasoned that testimony was conflicting on the decedent's health needs and financial support from others, the claimant's evidence was limited by the dead man's statute, and the delay in asserting the claim created a strong presumption against its validity, with the trial court's ore tenus findings presumed correct on appeal.

family lawpropertyprocedure

This case involved a dispute between a husband and wife over the division of real and personal property, including land, cattle, and farm equipment in Mobile County, Alabama. The wife sought an accounting and division based on 1944 contracts and a prior equity decree, while the husband claimed the contracts were abrogated by the couple's remarriage and resumption of cohabitation, asserted sole ownership of certain assets, and sought a resulting trust or half-interest in property titled in the wife's name based on his contributions. The circuit court awarded the disputed property to the wife, and the Alabama Supreme Court affirmed. The court reasoned that the 1944 contracts and decree remained in effect, that no resulting trust arose in favor of the husband because a gift to the wife is presumed when he furnishes funds for property titled in her name, and that the trial court's findings after ore tenus testimony were entitled to deference given conflicting evidence. The husband could not relitigate issues that should have been raised by appeal from the 1944 decree.

family lawproperty

This case involved competing petitions for letters of administration on the estate of Mary Jane Speed in the Probate Court of Jefferson County, Alabama. Lena Burnett, the former guardian, petitioned as a friend and creditor, while Robert C. Garrison, the county administrator, petitioned and was nominated by the non-resident heirs. The probate court denied Burnett's petition after finding she was not a creditor and granted Garrison's under the discretionary provision of the statute. The Alabama Supreme Court affirmed, holding that Burnett failed to establish a statutory preference under Title 61, §81, as next of kin were disqualified non-residents and she was not the largest creditor, allowing the court to appoint any qualified person under subdivision 4.

propertyprocedure

The case involved the conviction of L.V. Smith for second-degree murder after he shot and killed Donald Hamby from his truck, with disputed testimony over whether Hamby was pointing a pistol at Smith at the time. On appeal, the Alabama Supreme Court identified trial errors, including the improper admission of evidence about a second pistol located in Birmingham, which allowed the jury to draw impermissible inferences that the deceased lacked any weapon during the incident. The court also addressed but did not decide claims of cumulative prosecutorial misconduct from statements and questions. It reversed the conviction and remanded for a new trial due to these evidentiary issues.

criminal lawprocedure

The case involved John H. McCray, Jr.'s conviction for manslaughter, where he appealed on grounds including the trial judge's remarks to the jury during deliberations about possible parole, good-conduct deductions, and time actually served. The Alabama Supreme Court held that such instructions were improper because they invited the jury to consider factors outside the evidence, such as actions by parole boards or other state authorities that might reduce a sentence. Drawing on precedents like Peterson v. State and Cobb v. State, the court reasoned that a jury must base its verdict and punishment solely on the trial evidence without regard to potential future reductions, as this could diminish their sense of responsibility. The court reversed the Court of Appeals' judgment and remanded the case.

criminal lawprocedure

This case is an ejectment action brought by the heirs of David H. White against the personal representatives and devisees of his widow, Julia A. White, over title to the White Hotel property in Thomasville, Alabama. Mr. White died intestate in 1923 without issue, leaving record title in his name; Mrs. White remained in continuous possession, operating the hotel until her death in 1948, and her successors claimed she had acquired title by adverse possession or prescription. The trial court submitted the adverse possession issue to the jury and entered judgment for the defendants, but the Alabama Supreme Court reversed and remanded, holding that the jury charge was erroneous because it omitted the statutory requirements under Code of Alabama 1940, Title 7, Section 828 (color of title recorded for ten years, annual tax listing, or derivation by descent cast or devise) and incorrectly treated the widow's possession as potentially ripening under descent cast, since a widow is not an heir.

propertyprocedure

The case involved a petition for leave to file a writ of error coram nobis by a defendant convicted of murder, alleging that the solicitor's and sheriff's offices had suppressed evidence that could have been used to challenge the voluntariness of his confessions and to show that another person had confessed to the crime. The court dismissed the petition. It reasoned that the matters raised either were or could have been discovered and presented at the original trial through due diligence by counsel, that no dominating fraud by officials was shown to have impaired the judgment, and that the claims did not establish a meritorious basis for attacking the conviction or a valid defense.

criminal lawprocedure

This case involved a dispute over coverage under an automobile insurance policy's comprehensive provision for damage to a car that was taken without permission by the owner's son and wrecked in an accident. The policy excluded losses from collision or upset but included coverage for vandalism, and the insurer denied the claim while the insured argued the damage resulted from vandalism. The trial court submitted the vandalism issue to the jury, which returned a verdict for the plaintiff, and the appellate court affirmed the judgment. The court interpreted 'vandalism' according to its popular meaning to include wanton or reckless acts leading to destruction, rather than requiring specific intent to damage the vehicle, and held that the circumstances supported submitting the issue to the jury. The son's mental capacity to commit a wanton act was also a question for the jury based on the evidence presented.

propertybusiness & regulatory

The case involved a vegetable producer and packer in Alabama who refused to allow state agriculture department inspectors onto his premises to examine packages under Act No. 977 of 1951, which mandates inspection, grading, and labeling of certain fresh fruits and vegetables to improve quality for market competition. The State filed a bill seeking a temporary injunction to compel access for enforcement, which the circuit court granted and refused to dissolve. On appeal, the Alabama Supreme Court affirmed the injunction, holding that equitable relief is available to protect public welfare and ensure effective regulatory enforcement even when the underlying statute includes criminal penalties, as an injunction offers a more complete remedy than prosecution alone.

business & regulatorycriminal law