Henry v. Coe

• Decision Date: 11 March 1940
• Docket Number: 4-5832
• Citation: 137 S.W.2d 897,200 Ark. 44
• Parties: HENRY v. COE
• Court: Arkansas Supreme Court

137 S.W.2d 897

200 Ark. 44

HENRY v. COE

4-5832

Supreme Court of Arkansas

March 11, 1940

Appeal from Searcy Chancery Court; J. M. Shinn, Chancellor affirmed.

Decree affirmed.

W F. Reeves, for appellant.

Wm T. Mills, Wm. T. Mills, Jr., and Opie Rogers, for appellee.

OPINION

MCHANEY, J.

On July 10, 1920, H. M. Stephenson and wife borrowed from Conservative Loan Company $ 1,500 for which they executed and delivered their promissory note, due and payable August 1 1930, with interest from date at 6 per cent. payable annually, secured by a mortgage on 150 acres of lands in Searcy county. On September 7, 1920, said Stephenson and wife conveyed said lands by warranty deed to A. R. Henry for a consideration, as expressed in the deed, of $ 3,000, which deed contained this provision: "This deed is given subject to deed of trust of $ 1,500 to Conservative Loan Company." The note and the lien of the mortgage or deed of trust were thereafter and in due course sold and assigned to appellee who is now the undisputed owner thereof. Henry went into possession of said lands on his purchase and remained in possession until his death in October, 1933, and since then his widow and heirs at law, appellants herein, have been and still are in possession thereof.

Appellee brought this action of foreclosure on September 15, 1937, against appellants, and later by amendment, made Stephenson and wife parties defendant. The complaint alleged that A. R. Henry paid the interest coupons falling due up to and including December 1, 1928, and had paid on said note the sum of $ 30 on September 16, 1932, and $ 25 on March 21, 1933. Judgment was prayed in the sum of $ 2,560 in rem as against said lands. No personal judgment was sought against appellants or Stephenson. Appellants admitted the note, mortgage and conveyance to their ancestor, above set out, but denied that A. R. Henry had paid the interest or the payments alleged. They further alleged in their answer that A. R. Henry was a third party to the transaction between Stephenson and the Conservative Loan Company; that said note became due August 1, 1930, and that appellee did not indorse on the margin of the record of said mortgage said alleged payments within five years after August 1, 1930; and they, therefore, plead limitations in bar of the action.

Trial resulted in a decree for appellee foreclosing the lien of said mortgage and ordering said land sold for the judgment, interest and costs.

For a reversal of this decree, appellants rely on the provisions of §§ 9436 and 9465 of Pope's Digest, the former relating to agreements for the extension of the maturity date of debts secured by mortgage, etc "so far as the same affects the rights of third parties," and the latter relating to limitations to foreclose and providing that payments made before the bar of the statute shall not operate to revive the debt as to third parties, unless indorsed on the margin of the record of the mortgage. We think these statutes, as also the decision of this court in Hamburg Bank v. Zimmerman, 196 Ark. 849, 120 S.W.2d 380, strongly relied on by appellants, have no application here, as A. R. Henry was not a third party within the meaning of said statutes. While he did not assume and agree to pay the mortgage indebtedness, he bought subject to it, and his deed specifically provided that it was subject to the...