Fort v. Black, 50 Ark. 256

Fort v. Black

50 Ark. 256 | Ark. | 1887

OPINION.

GockrilIj, C. J.

1. Chattel Mortgage: For future supplies within limited time. The mortgage was executed to secure the payment of a past due account and any sum that might become due for supplies to be furnished by mortgagees to the mortgagor by the first of October lowing. That security for advances to be made was limited to the amount that might be due on the day indicated, is obvious from the language of the mortgage. It recites that it was executed to secure the note due-October 1st, and “ all other indebtedness that might (may) then be due the parties of the first part.”

It is competent for the parties thus to limit the operation of the security, and when the time within which advances are to be made is limited by the terms of the mortgage, the instrument secures no advances made after the expiration of the time. 1 Jones Mort., sec. 377 ; Miller v. Whittier, 36 Me., 577; Johnson v. Anderson, 30 Ark., 745 ; Hughes v. Johnson, 38 Id , 285.

It follows that the account contracted by the appellant after October 1, 1883, was not secured by the-mortgage.

Cotton which was covered by the mortgage was turned over to the mortgagees to be sold, and from the sales made by them they received money enough to pay off the mortgage debt. They could not divert the money raised by sale of the mortgaged property from the dis-chargee of the mortgage debt without the assent ot the mortgagor. Greer v. Turner, 47 Ark., 17.

The only pretense that he did assent, must be sought for in the stipulation of the mortgage quoted below. When he executed the instrument he made his note to the mortgagees for two hundred dollars as security for the supplies furnished and to be furnished; but lest the amount to be advanced within the time limited might exceed two hundred dollars, the following provision was inserted : “All amounts in excess of said sum to be first paid before any part of first $200 is paid.” This stipulation must be construed with reference to the secured debt in excess of $200, and nothing is found in the context to authorize the mortgagees to apply the proceeds of the mortgaged property to the payment of a debt not contemplated by the mortgage.

2. Appropriation of payment. In point of fact, the mortgagees have never undertaken to make' an appropriation of any payment to the unsecured account in preference to the secured debt. This is shown by their statement of the mortgagor’s account as presented in evidence. It is an ordinary running account charging him with advances as they were made, beginning with the items due when the note was executed; and crediting him with the proceeds of cotton as sales were made. Balances were struck from time to time, showing that the payments were credited on the account generally, without reference to the security. This was an appropriation by the creditors of payment to the older items of the account, and resulted, just as the law would imply, in the absence of an active appropriation on their part, in the payment of the items in the order of their dates, Kline v. Ragland, 47 Ark., 111. The stipulation, above quoted, might have deferred the payment of the older items to the amount of $200, until the residue of the debt subsequently contracted was paid, but that is immaterial as the whole secured debt bas been paid. The mortgage having been discharged before there was any attempt to seize the mare under it, the court should have found for the appellant.

Reverse and remand.