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FAHRENKAMP v. DUNCAN

February 21, 1962

FRANK J. FAHRENKAMP AND FIERINA G. FAHRENKAMP, PLAINTIFFS,
v.
DUNCAN, DIECKMAN AND DUNCAN MINING COMPANY, A CORPORATION, DEFENDANT. UNITED STATES OF AMERICA, INTERVENOR, V. J.A. RIGGS TRACTOR CO. ET AL., DEFENDANTS ON INTERVENTION.



The opinion of the court was delivered by: John E. Miller, Chief Judge.

On May 11, 1961, the plaintiffs filed their complaint in the Chancery Court of Polk County, Arkansas, against the defendant corporation, seeking a judgment against the defendant for the sum of $18,178.14, and interest thereon, and for the foreclosure of a chattel mortgage executed by defendant to one C.C. Bell on March 4, 1959, and subsequently assigned by the said C.C. Bell to the plaintiffs.

The defendant, although duly served with summons, has not answered and is wholly in default.

On May 31, 1961, the intervenor, United States of America, filed its intervention in the state court and alleged therein:

    "The defendant, Duncan, Dieckman and Duncan Mining
  Company, has no other assets and is now out of
  business, has many judgment creditors and creditors
  who have liens on said chattels set forth in the
  plaintiffs' complaint."

Then follows a list of certain persons, firms and corporations that are alleged to be creditors of the defendant. Following the filing of the intervention in the state court, the intervenor removed the case to this court on June 2, 1961, and proceeded to file its complaint in intervention and alleged that it had filed certain tax liens for unpaid taxes in Scott and Polk Counties, Arkansas, against the defendant as follows: August 13, 1959, $2,207.07; September 9, 1959, $2,507.71; November 24, 1959, $1,189.97; August 17, 1960, $1,373.31, or a total of $7,278.06.

The intervenor also set forth in its intervention the names and addresses of the persons, firms and corporations to whom the defendant was indebted in various amounts represented by judgments, mortgages or other instruments. Summonses were issued on the intervention against said parties and most, if not all of them, have filed answers and claims herein, but the conclusion reached by the court makes it unnecessary to further consider the claims of any of them other than the plaintiffs and the intervenor.

The mortgage, plaintiffs' exhibit 1, was executed to secure the payment of the principal sum of $15,000.00 evidenced by a promissory note executed by defendant to the order of C.C. Bell, which note and mortgage, as above stated, were assigned by C.C. Bell to plaintiffs. Certain property is specifically described in the mortgage, and no one is contending that the plaintiffs are not entitled to a lien upon the property specifically described in the mortgage or to the proceeds of the sale of said property under the order of the court.

The mortgage also contains a provision intended to extend the lien of the mortgage to other property not specifically described therein. The material parts of the "dragnet" clause are: "* * * together with all equipment of any kind and character used in connection therewith, and all additions, betterments and repairs made or to be made to or upon said property, situated in the County of Polk and State of Arkansas * * *."

In paragraph IV of the complaint the plaintiffs alleged:

    "On or about August 21, 1959, Plaintiff advanced
  the sum of Three Thousand One Hundred Seventy-Eight
  and 14/100 Dollars ($3,178.14) to creditors of the
  Defendant company for the purpose of paying in full
  to such creditors debts owed them by the Defendant,
  and assuming from such creditors all security
  instruments held by them and all claim of such
  creditors in, upon and against the property of
  Defendant.
    "Particularly, Plaintiff would allege that he
  caused Draft No. 32583 to be issued by Unity Savings
  and Loan Association of St. Louis, Missouri, to
  Merchants National Bank, Automobile Department, Fort
  Smith, Arkansas, in the amount of Six Hundred
  Seventeen and no/100 Dollars ($617.00), for full
  payment of the debt of Defendant on the purchase and
  financing of the following property:

"Ford Loader NCA 840 Serial No. 144239

  Further, Plaintiff would allege that on the same
  August 21, 1959, he caused to be issued by the Unity
  Savings and Loan Association of St. Louis, Missouri,
  a draft numbered 32584 in favor of C.I.T. Credit
  Corporation — Memphis, Tennessee, in the amount of
  Two Thousand Five Hundred Sixty One and 14/100
  Dollars ($2,561.14), for full payment of the debt of
  Defendant in the purchasing

  and financing of the following property:
                "Caterpillar Loader
                  No. 933-11A1445
                "Caterpillar Loader
                  No. 933-11A1208
  these checks were issued the holders of conditional
  sale contracts covering the property described, and
  that in each instance Plaintiff assumed the security
  represented by such instruments against the Defendant
  corporation, and that since the time of payment of
  the said amounts, totalling Three Thousand One
  Hundred Seventy-Eight and 14/100 Dollars ...

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