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Smallwood v. Ellis Gin Co.
Citations: 10 Ark. App. 41; 661 S.W.2d 410; 1983 Ark. App. LEXIS 915Docket: CA 82-502
Court: Court of Appeals of Arkansas; November 30, 1983; Arkansas; State Appellate Court
An appeal has been filed regarding a chancery court decree involving a bank in Blytheville seeking judgment on a note and foreclosure of a mortgage executed by Charles and Carolyn Smallwood. The bank alleged that its mortgage was superior to those held by Planters Production Credit Association and Ellis Gin Company, which were also made parties to the suit, and claimed that Ellis Gin's mortgage was barred by the statute of limitations. Ellis and Planters responded with answers admitting and denying certain allegations while filing cross-complaints for foreclosure of their mortgages against the Smallwoods. The Smallwoods were served but did not answer any complaints, leading to a decree that granted judgments against them and established lien priorities, resulting in Ellis receiving a fourth lien on the Smallwood home. On the day of the foreclosure sale, the Smallwoods filed a motion arguing that Ellis's failure to deny the bank's statute of limitations allegation constituted an admission. They contended that this failure, along with the bank's pleadings, should benefit them by declaring Ellis's claim barred by limitations. The court denied the Smallwoods' motion, leading to the appeal. The appellate court disagreed with the Smallwoods' assertion that Ellis's failure to deny the bank's allegation was an admission. It clarified that the failure to deny did not affect Ellis's claim against the Smallwoods, as the statute of limitations is an affirmative defense that must be specifically pleaded by the party asserting it. Since the bank's plea of limitations was directed solely at its issues with Ellis, it did not serve as a defense against Ellis's claim against the Smallwoods. Thus, the Smallwoods had no valid defense to Ellis's claim based on the statute of limitations. Appellants argued that the bank's plea of limitations should benefit them, referencing Southland Mobile Home Corp. v. Winders and Firestone Tire & Rubber Co. v. Little, which established that a defense raised by one defendant can benefit another defendant in default if both are jointly liable. However, the court clarified that in this case, the bank's plea of limitations was personal and did not extend to the appellants. Citing Hall v. Bonville, the court explained that while a successful plea regarding a contract's validity can discharge all defendants, a plea focused on an individual’s discharge does not. Since the plea of limitations was personal to defendant Howell, the court concluded that it could not benefit the appellants and affirmed the judgment discharging both Howell and Bonville. Judges Cooper and Corbin concurred with the decision.