First National Bank of Mineral Springs v. Hayes-Mckean Hardware Co.

• Decision Date: 19 November 1928
• Docket Number: 274
• Citation: 10 S.W.2d 866,178 Ark. 429
• Parties: FIRST NATIONAL BANK OF MINERAL SPRINGS v. HAYES-MCKEAN HARDWARE COMPANY
• Court: Arkansas Supreme Court

10 S.W.2d 866

178 Ark. 429

FIRST NATIONAL BANK OF MINERAL SPRINGS v. HAYES-MCKEAN HARDWARE COMPANY

No. 274

Supreme Court of Arkansas

November 19, 1928

Appeal from Sevier Chancery Court; C. E. Johnson, Chancellor affirmed.

Decree affirmed.

Feazel & Steel, for appellant.

Lake Lake & Carlton, for appellee.

OPINION

MCHANEY, J.

On November 15, 1926, one Joe Smith, being indebted to the appellee in the sum of $ 649.16 for borrowed money, executed his note therefor, secured by a mortgage on certain lands containing the following clause: "And it is further stipulated that, in case the said Joe E. Smith and Gladys Smith shall make default in payment of taxes, or assessments for local improvements or other purpose, or of keeping said buildings insured as aforesaid, then the said Hayes-McKean Hardware Company or legal representatives may pay such taxes and assessments and effect such insurance, and the amount so expended therefor, with interest at ten per cent. per annum from date of such expenditure until repaid, shall be considered a sum the repayment of which is intended to be hereby secured."

The mortgage was recorded on the date of its execution. On February 11, 1927, appellant secured a judgment against said Smith, in the circuit court of Sevier County, in the sum of $ 333.51. Thereafter, on March 23, 1927, appellee was forced to redeem the land covered by its first mortgage from tax forfeiture for State, county and road improvement district taxes, which it paid in the sum of $ 480.15, and at that time required said Smiths to execute another mortgage securing the payment of said taxes. Appellant caused an execution to issue on its judgment against Smith, in August, 1927, and had same levied upon the land covered by said mortgage, and on September 24, 1927, the sheriff sold Smith's interest therein to appellant.

On the 18th day of November, 1927, appellee instituted this action in the chancery court to foreclose its first mortgage against Smith, in which appellant was made a party defendant, and in which it prayed that all rights of appellant in the land which it claimed by reason of the execution sale be canceled in so far as it affected the rights and interests of the appellee. The court entered a decree foreclosing the mortgage for the full amount of Smith's indebtedness to appellee, and making its lien superior to that of appellant.

The only question presented by this appeal for our determination is the priority of the respective liens of the parties appellant claiming that its judgment lien was superior to appellee...