NATIONAL LUMBER CO. v. ADVANCE DEVELOPMENT
732 S.W.2d 840 (1987)
293 Ark. 1
NATIONAL LUMBER COMPANY, Appellant,
ADVANCE DEVELOPMENT CORP., Vermont Place Properties, et al., Appellees.
Supreme Court of Arkansas.
July 13, 1987.
Thompson, Paddock & Llewellyn by: Richard L. Spearman, Fort Smith, for appellant.
Harper, Young, Smith & Maurras by; Robert Y. Cohen, II, Phillip Taylor, Jones, Gilbreath, Jackson & Moll by: Charles R. Garner, Jr., Fort Smith, Morril Harriman, Van Buren, Gean, Gean & Gean by: Lawrence W. Fitting, Fort Smith, for appellees.
HOLT, Chief Justice.
This appeal concerns a real estate development in Fort Smith known as Vermont Place Properties, the liability of general partners in a limited partnership, and priorities among mortgagees, mechanics and materialmen involved in the project.
Pat McGowan, Val Somers, and Brent Roberson were general partners in Vermont Place, a limited partnership, formed on January 20, 1984, for the purpose of developing a tract of land in Fort Smith by constructing duplexes on it to be either sold or rented. The partnership mortgaged the property for construction purposes. McGowan's separate company, Advance Development Corp., (Advance) was in charge of developing the project, including contracting with the materialmen and mechanics, hereinafter referred to as "suppliers." On September 3, 1984, Somers and Roberson discovered that McGowan had not been paying the suppliers nor making interest payments on the mortgages. Five DIRECT APPEAL
separate lawsuits, filed by the banks holding the mortgages and by the suppliers, were consolidated for trial. On February 14, 1986, the trial court found that McGowan, Advance, and the partnership had so merged their affairs that they were one and the same person. Therefore, appellant, National Lumber Company (National), and various other suppliers, were found to have valid liens because notice was not required pursuant to Ark.Stat.Ann. § 51-608.5. These liens, however, were held inferior to the bank's construction mortgages. Furthermore, the court held McGowan and his wife were individually liable for the debts but that Somers and Roberson were only liable to the extent of their original capital contributions. It is from that order that National brings this appeal. In addition, a cross-appeal was filed by Vermont Place and by some of the suppliers. We reverse the trial court's holding limiting the liability of Somers and Roberson and dissolve two of the supplier's liens. We affirm the remaining issues raised in both the appeal and the cross-appeal. The appeal will be discussed separately from the cross-appeal.
1. LIABILITY OF SOMERS & ROBERSON.
The chancellor held in pertinent part as follows:
1. That Pat McGowan, Advance Development Corporation and Vermont Place Properties Partnership so merged their affairs to the extent that they were one and the same person or entity when dealing with the lien holders in this action...