First State Bank of DeQueen v. Gamble

Basil V. Hicks, Jr., Special Judge.

In this foreclosure proceeding Appellant sought recovery on a series of promissory notes and an associated mortgage. The factual matters were stipulated at both the hearings held in the case. Pertinent facts are set out below. Appellee’s spouse, Frank J. Gamble, III, was also a party to the proceeding, did not appear and has taken no appeal.

On April 8, 1980, July 16, 1980, August 27, 1980, and October 1, 1980, Frank J. Gamble, III, executed promissory notes in favor of Appellant. On December 26, 1980, both Frank J. Gamble, III, and his wife, Appellee, Anita Gamble, executed a promissory note in favor of Appellant. This obligation was secured by a real estate mortgage on property in Sevier County, Arkansas. Thereafter, on January 13,1982, Frank J. Gamble, III, executed another promissory note in favor of Appellant. Appellant sought recovery in the Chancery Court against Frank J. Gamble, III, on the notes individually executed by him, upon the joint obligation of Frank J. Gamble, III, and Appellee, and, in addition, foreclosure of the mortgage as security for all of the above obligations.

The parties stipulated at trial to the execution of various notes, and the mortgage, and to the amounts due thereunder, to default dates and to interest accruals. The matter was submitted to the Chancellor upon Appellant’s Complaint, Appellee’s General Denial and that Stipulation of Facts.

The Chancellor found that Frank J. Gamble, III, although duly served, failed to appear and defend. The relief requested against Frank J. Gamble, III, was granted. The Chancellor found for Appellant on the note executed by both parties. Appellant’s request for foreclosure of its mortgage was granted only with respect to the jointly executed note and attorney’s fees were assessed against Appellee and Frank J. Gamble, III.

Following entry of the Decree by the Court, Appellee timely filed a motion seeking a new trial or modification of the Decree as to interest accruing between the due date of the note and day of entry of the Decree and in addition, as to attorney’s fees awarded against the Appellee. In her motion, Appellee asserted that prior to the due date of the note a tender of principal and interest due had been made to Appellant and that there was no default due to Appellant’s wrongful refusal to accept tender of payment by Appellee. The motion also asserted that the property upon which Appellant held the mortgage was the separate property of Appellee. At hearing on this motion, the parties again stipulated as to the factual matters.

It was stipulated that the note in the amount of $29,556.99 was secured by the mortgage on Sevier County real estate and that the Court had ordered, under the terms of its Decree, foreclosure sale of that property. On or before the due date of that obligation in June, 1981, Appellee made a tender of payment of principal and interest on that obligation. Appellant refused the tender giving as reason for refusal its contention that the existing outstanding mortgage secured the other notes due Appellant and identified previously in the record and which were executed only by Frank J. Gamble, III.

Thereafter, on August 29, 1983, the Chancellor entered a modified Decree finding that Appellant wrongfully refused to accept the tender of payment from Appellee of the note dated December 26,1980, and that the amount tendered and refused on or before June 26, 1981, was $31,620.42. The Chancellor further determined that based upon the wrongful refusal of tender Appellee was discharged from further interest accrual on the note in question and should have relief\from the judgment for $1,300.00 in attorneys’ fees originally awarded by the Court.

Appellant takes its appeal from the modified Decree asserting that the trial court incorrectly allowed Appellee to raise in her motion the defense of tender which had not previously been pleaded prior to the entry of the original Decree and further, that the trial Court erred in denying interest to Appellant after Appellee’s tender because Ap-pellee’s tender was not unconditional.

We believe that the Chancellor was correct.

Under the Rules of Civil Procedure applicable in this case (specifically, rules 59 and 60) the trial Court is granted wide authority with respect to new trials, amendment and modification of judgments or decrees and with respect to relief from judgments, decrees or orders of the Court. We believe that the Chancellor’s actions here fit comfortably within the rules above cited and with existing case law. Courts have control of their judgments during the term in which they are made for sufficient cause, either upon application or upon their own motion, to modify or set them aside. Massengale v. Johnson, 269 Ark. 269, 59 S.W.2d 743 (1980). Although terms of Court have now been abolished, the principle applies to matters timely before the Court. The Court, in Massengale, supra, indicates that the Court’s power to make changes or modifications as in the instant case is inherent and plenary and exists without reference to any statute. This power is limited only by the Court’s sound discretion. Massengale, supra. We believe that the Court exercised here its sound discretion to reach a correct result following an appropriate motion taking into consideration all before it by way of the pleadings and factual stipulation. It appears obvious to us the Chancellor correctly considered and decided the matter based upon such facts as title to the property involved, Appellee’s execution of only one note, and Appellant’s position with respect to the application of the mortgage on Appellee’s property to the Frank J. Gamble, III, obligations. There has been no claim in this Court by Appellant that the Chancellor’s order was incorrect with respect to the application of the mortgage on Appel-lee’s property to the Frank J. Gamble, III, notes.

Appellant’s second point for reversal of the Judgment concerns the validity of Appellee’s tender of payment. The Uniform Commercial Code provides that in a case in which a tender is made, as stipulated in this case, that subsequent liability for interest and attorney’s fees is discharged. Ark. Stat. Ann. § 85-3-604 (Add. 1961). We have in the record before us a stipulation that a tender was made. This is a legal term of art and nothing in the factual stipulation indicates anything other than a valid tender. Appellee requested with her offer only such relief to which she was entitled which was release of the mortgage which secured the only note Appellee executed. Such an offer is not conditional as Appellant asserts. 74 Amjur 2d Tender § 26. Appellant was entitled only to recovery on the one note signed by both parties in connection with the real estate mortgage as the Chancellor correctly found and from which ruling there has been no appeal. Any renewal or continuation of the tender is not required since it would have been useless, in view of Appellant’s position. Tom Miller, et ux v. James E. Wiley d/b/a Wiley Real Estate, 257 Ark. 961, 521 S.W.2d 68 (1975).

We affirm.

Corbin, J., not participating. Cooper and Mayfield, JJ., dissent.