Bleidt v. 555, Inc., 5--6123

• Decision Date: 15 January 1973
• Docket Number: No. 5--6123,5--6123
• Citation: 253 Ark. 766,489 S.W.2d 235
• Parties: , 11 UCC Rep.Serv. 1258 Valena BLEIDT, Appellant, v. 555, INC., Appellee.
• Court: Arkansas Supreme Court

Page 235

489 S.W.2d 235

253 Ark. 766, 11 UCC Rep.Serv. 1258

Valena BLEIDT, Appellant, v. 555, INC., Appellee.

No. 5--6123.

Supreme Court of Arkansas.

Jan. 15, 1973.

Rehearing Denied Feb. 12, 1973.

Boyett & Morgan, by Denny P. Petty, Searcy, for appellant.

Glenn F. Walther and Eichenbaum, Scott, Miller, Crockett & Bryant, Little Rock, for appellee.

BYRD, Justice.

Valena Bleidt appeals from an order holding that an open account owed by H.L.B. Enterprises, Inc. was protected by a security agreement. Mrs. Bleidt, a lien creditor of H.L.B. Enterprises, Inc. also complains of the allowance of an attorney's fee based in part upon the open account.

The record shows that January 9, 1970, H.L.B. Enterprises, Inc. executed an installment note in the principal amount of $10,000 payable to 555 Inc. The security agreement executed in ocnnection with the note provides:

'The security interest granted hereby is also to secure the payment of open account purchases by the Debtor from the Creditor, as hereinafter required. (Emphasis ours).

'The Debtor agrees to maintain at all times an inventory of merchandise . . .which was purchased from or through the Creditor, the cost price of which shall not be less than the unpaid principal balance of the note hereinabove mentioned. The Debtor agrees that any monthly current purchases deemed necessary to keep inventory to required figures and charged on separate monthly account will be paid promptly on the 10th day of each month, and failure to make such monthly settlement shall constitute breach of this Agreement and Creditor may declare the entire unpaid balance of said Note due and payable. . . .

'The Debtor agrees to purchase from the Creditor all his requirements for maintaining his inventory, regardless of brand, if such requirements can be furnished from lines normally carried by Creditor. Debtor also agrees not to stock any lines competitive to any lines distributed by Creditor. Failure of the Debtor to comply with this provision shall give the Creditor the right to mature the unpaid balance of the said Note.'

Appellant argues that under the terms of the Security agreement, the only thing secured is the unpaid balance of the note. We do not so construe the agreement. The phrase 'as hereinafter required' when used in connection with open account purchases, in our opinion, refers not only to the requirement that the inventory be maintained at not less than the unpaid balance of the note but also to the requirement...