Rose v. W. B. Worthen Co., 4-2652.

• Decision Date: 03 October 1932
• Docket Number: No. 4-2652.,4-2652.
• Citation: 53 S.W.2d 15
• Parties: ROSE et al. v. W. B. WORTHEN CO.
• Court: Arkansas Supreme Court

53 S.W.2d 15

ROSE et al. v. W. B. WORTHEN CO.

No. 4-2652.

Supreme Court of Arkansas.

October 3, 1932.

Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor.

Proceeding by Pearl Dooley Rose against W. B. Worthen Company. From decree rendered, plaintiffs appeal.

Affirmed.

Carmichael & Hendricks, of Little Rock, for appellant.

E. G. Shoffner, of Little Rock, for appellee.

MEHAFFY, J.

This is the second appeal in this case. When the case was here before, we held that Act No. 195 of the Acts of 1927 (page 665) authorized administrators, executors, and guardians to borrow money for certain purposes and secure the same by mortgage upon the real estate belonging to the estate represented by them. We held, however, that there was no authority granted by the act to borrow money and secure the same by mortgage or deed of trust except for the purposes specified in the act, and that if money was borrowed and a mortgage executed for any other purpose than that expressed in the act, the order authorizing it and the mortgage executed in pursuance thereof were void. The decree of the chancery court was reversed and the cause remanded, with directions to enter a decree in accordance with the opinion of this court. Rose v. W. B. Worthen Co., 184 Ark. 550, 42 S.W.(2d) 1002.

After the case was remanded, it was again tried in the Pulaski chancery court and that court held that the mortgage was valid as to the following items: Recording fees, $5.25; continuation of abstract, $22.50; state and county taxes, $228.40; street improvement taxes, $160; sewer improvement taxes, $21.95; fire insurance premiums, $53; brokerage on loan, $5.77. Interest was allowed on these items at 7 per cent., amounting to $85.02. There was another item of $85 allowed for money paid to minors under the order of court, but there was no appeal from the allowance of $85 and it is not involved here.

This appeal is prosecuted to reverse the decree of the chancery court holding that the above items are secured by the mortgage and that they are authorized under Act No. 195 of the Acts of 1927.

Appellants insist, first, that the word "obligation" used in the statute means an obligation created by a contract which is a lien on the land, but that the word "obligation" does not include taxes. It is said by appellants that taxes are liens but not obligations secured by liens. Numerous authorities are referred to defining "obligation." Originally the term was limited to instruments under seal of a certain kind, such as a bond, and the obligation could at that time be created only by a written instrument. The word "obligation" now, however, is not so limited, but in the act of 1927 it is used in the sense of liability either created by contract or by operation of law. 46 C. J. 447-448; Elasser v. Haines, 52 N. J. Law, 10, 18 A. 1095. In order to arrive at the meaning as used in the statute, we must consider the connection in which it is used and the evident purpose of the Legislature in permitting mortgages and deeds of trust to be executed as prescribed by the statute. When we consider the whole act there seems to be no doubt that the Legislature intended to authorize administrators, executors, and guardians to borrow money to protect...