Pollard v. Fowler

• Decision Date: 08 November 1937
• Docket Number: 4-4798
• Parties: POLLARD v. FOWLER
• Court: Arkansas Supreme Court

109 S.W.2d 919

194 Ark. 823

POLLARD v. FOWLER

4-4798

Supreme Court of Arkansas

November 8, 1937

Appeal from Benton Chancery Court; Lee Seamster, Chancellor affirmed.

Decree affirmed.

Vol T Lindsey, for appellant.

Clyde T. Ellis, for appellees.

OPINION

SMITH J.

This suit was filed in the Benton chancery court September 29 1933, by Arthur B. Pollard against George L. Fowler and wife and N. M. Chinn and his wife, praying judgment on a note executed by George L. Fowler to the Inter-State Mortgage Trust Company on February 19, 1926, for the sum of $ 1,600, due February 1, 1933, bearing interest at 6 per cent. To secure the payment of this note a mortgage was executed by Fowler on a farm which he then owned in Benton county. Attached to the original note were 14 interest coupons, one in the sum of $ 44 and the other thirteen for $ 48 each, representing semi-annual interest due on the note as the coupons matured.

The complaint alleged the assignment to plaintiff of the note and mortgage on March 1, 1926, and that all interest had been paid thereon to February 1, 1932; one-half of the interest due August 1, 1932, and one-half the interest due February 1, 1933, and that no other payments had been made except the interest maturing prior to those dates. The mortgage was made an exhibit to the complaint, and showed that all the interest coupons had been detached except the one due in August, 1932, and another in February, 1933. It was alleged that the mortgage company became insolvent and was placed in bankruptcy in 1931, and that the trustee in bankruptcy had made a formal assignment of the mortgage to Pollard May 20, 1931. It was then--and not before--that the assignment was noted of record.

Fowler and wife made default, and filed no answer, but the defendants Chinn and his wife answered that they had purchased the mortgaged property from their codefendant, Fowler, under an assumption of payment of the notes secured by the mortgage, and that they had paid the mortgage company, as plaintiff's agent, all interest as it matured, together with $ 800 of the principal, and made tender of payment of the balance due. They also alleged tender of payment prior to the institution of the suit. The mortgage provided that any multiple of a hundred dollars might be paid on the principal at any interest-paying period, and they alleged such a payment in the sum of $ 800 had been made in August, 1928, to the mortgage company.

The court made a finding supporting the allegations of the answer and rendered a decree foreclosing the mortgage for the balance adjudged to be due, from which decree plaintiff has prosecuted this appeal.

The mortgage company's principal place of business was in Greenfield, Massachusetts, and its loans secured by mortgages, as in the instant case, were payable there. It operated a western branch office in Parsons, Kansas, and maintained a local office at Rogers, in Benton county, in charge of E. W. Dawkins, whose duties were to collect and remit payments both of principal and of interest. He had certain other duties such as seeing that insurance was maintained on mortgaged property where this was required by the mortgages. This agency of Dawkins continued until the mortgage company became a bankrupt.

All payments made by Chinn were made to Dawkins prior to the bankruptcy proceedings, after which they were made to the trustee in bankruptcy, and it is undisputed that when he paid the $ 48 interest due in August, 1928, he also paid $ 800 on the principal. This money was remitted to the mortgage company, and in due course Chinn received the mortgage company's receipt therefor.

Pollard was first advised of this payment in 1931, and on October 20th of that year wrote Chinn a letter, in which he stated that he had advised with his attorney, who would take the matter up with some attorney in this state, and that he would make Chinn a visit. The visit was made, and other correspondence was had between Pollard and Chinn. Pollard wrote Chinn in 1933 that he would accept a new mortgage and note for $ 800 if Chinn would have them properly made out and mailed to him. A new note and mortgage were prepared and mailed to and received by Pollard. The sufficiency of the new note and mortgage does not appear to have been questioned. Pollard did not record this mortgage, neither did he return it or the note, He testified, however, that he claimed no rights under either, and did not know what had become of them. Pollard bought other notes and mortgages from the mortgage company amounting altogether to about seven or eight thousand dollars. His practice was to deposit money with the mortgage company in multiples of $ 500, and when the company had notes to sell for the amount of his deposit, notes would be sent him and the mortgages securing them also if his purchase covered the entire indebtedness secured by a mortgage. He purchased the Fowler note and mortgage in this manner March 1, 1926, and both were delivered to him and remained in his exclusive possession until this suit was filed, although the mortgage was not formally assigned...