Hollan v. American Bank of Commerce & Trust Co.

• Decision Date: 25 May 1925
• Docket Number: (No. 4.)
• Citation: 272 S.W. 654
• Parties: HOLLAN et al. v. AMERICAN BANK OF COMMERCE & TRUST CO.
• Court: Arkansas Supreme Court

272 S.W. 654

HOLLAN et al. v. AMERICAN BANK OF COMMERCE & TRUST CO.

(No. 4.)

Supreme Court of Arkansas.

May 25, 1925.

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor.

Suit by the American Bank of Commerce & Trust Company against Claud Hollan and others. Decree for plaintiff, and defendants appeal. Affirmed.

Snodgress & Snodgress, of Little Rock, for appellants.

Moore, Smith, Moore & Trieber, of Little Rock, for appellee.

McCULLOCH, C. J.

This is an action to foreclose a mortgage executed by appellants to appellee on certain real property in the city of Little Rock. The mortgage was executed on April 3, 1920, to secure the payment of two notes of that date, each for $2.000, payable one year after date, with interest. The mortgage also contained the following clause:

"This deed of trust shall be security for any other indebtedness of whatever kind or character that may be owing by grantor to said American Bank of Commerce & Trust Company up to the time of foreclosure of this deed of trust, whether then matured or not, but the lien therefor shall be subordinate to the lien for the indebtedness herein specifically described."

When the notes became due there was an agreement extending the date of maturity until October 3, 1921.

In April, 1921, appellants became further indebted to appellee as indorsers on two negotiable promissory notes, executed by one Williams to appellants, and by them sold and indorsed over to appellee. Liability of appellants on these two notes was established by a judgment at law rendered in favor of appellee prior to the institution of the present action, and the amount of that indebtedness was, at the time of the decree below, $972.21. The only point at issue in the case was whether or not the indebtedness described above, in addition to the two notes specifically mentioned in the mortgage, fell within the terms of the mortgage and were secured thereby. The court decided in favor of appellee on that point, and rendered a decree foreclosing the mortgage, both as to the notes and additional indebtedness. There was a junior mortgagee who was made party and has not appealed. No question is involved as to priority between the junior and senior mortgagees.

It is first contended by counsel for appellants that the language of the mortgage should be interpreted to refer only to indebtedness incurred up to the date of the maturity of the two notes described in the mortgage. Placing that interpretation on the language of the mortgage does not help appellant's cause, for, according to the undisputed evidence, there was an agreement extending the date of the maturity of the notes to a date beyond the time that the additional indebtedness was incurred. But we are of the opinion that the construction contended for by counsel for appellants is not the correct one. In the case of Fort v. Black, 50 Ark. 256, 7 S. W. 131, there was involved the interpretation of a mortgage to secure a promissory note and to secure "supplies furnished and to be furnished," and this court held that the mortgage covered only advances made up to the date of the maturity of the note. In later cases involving mortgages, using broader language, we have held that the mortgage covered any indebtedness up to the time of the foreclosure. Each instrument, of course, must be interpreted according to its particular language, and, in order to interpret the present mortgage in accordance with the contention of counsel for appellants, it would be necessary to wholly...