Case Title: First Nat. Bank, Cortez, Colo. v. First Interstate Bank, Riverton, N.A.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1988-06-16T00:00:00Z

Document:
First Nat. Bank, Cortez, Colo. v. First Interstate Bank, Riverton, N.A.1988 WY 85758 P.2d 1026Case Number: 86-283Decided: 06/16/1988Supreme Court of Wyoming
FIRST NATIONAL BANK, 
CORTEZ, COLORADO, A UNITED STATES BANKING CORPORATION, 
APPELLANT (PLAINTIFF)

v.

FIRST INTERSTATE BANK, 
RIVERTON, N.A., WYOMING, A UNITED STATES BANKING CORPORATION, 
APPELLEE (DEFENDANT).

Appeal from the District 
Court, FremontCounty, Robert B. Ranck, 
J.

Donald P. White 
of White & White, P.C., Riverton, Robert Duitch and Dean T. Ogawa of Duitch 
& Johnson, P.C., Colorado Springs, for appellant.

Joel M. Vincent 
of Hettinger, Leedy and Vincent, P.C., Riverton, for appellee.

Before BROWN, C.J., and THOMAS, CARDINE, URBIGKIT 
and MACY, JJ.

URBIGKIT, Justice.

[¶1.]     This appeal presents a 
UCC and FAA airplane security-interest-priority conflict between two lenders, 
and raises a question of the validity of antecedent-debt inclusion in document 
clauses variously labeled dragnet or anaconda. We reverse the trial court's 
finding that the first recorded security interest should be accorded 
priority.

[¶2.]     The rule here 
established is that an anaconda or dragnet clause, as a matter of notice to 
subsequent parties in interest or claimants to the encumbered asset, is valid in 
the absence of actual knowledge only if the additionally included existent 
indebtedness is expressly described in the security instrument which constitutes 
the filed notice. Under security-document notice requirements, any subsequent 
party claiming an interest should have constructive or actual notice of the secured total claimed to lose priority 
to the pre-existing dragnet clause included indebtedness.

[¶3.]     This is a case of first 
impression in Wyoming, and there is a paucity of authority 
where the conflict has arisen between creditors and not between the creditor and 
debtor. Additionally, this case, involving airplanes, invokes federal law in the 
preemptive filing requirement of federal statute, 49 U.S.C.App. § 1403, and 
state law priority effect under the Uniform Commercial Code.1

I. FACTS

[¶4.]     On August 7, 1981, 
Richard and Verlene M. Walker borrowed approximately $93,000 from First 
Interstate Bank of Riverton, N.A., Wyoming (First Interstate Bank). Their 
promissory note was secured by "Rigs." Renewed a second time on July 27, 1982, 
the Walkers then owed First Interstate Bank $77,000, as secured by "2 drilling 
rigs." On April 6, 1984, the Walkers again approached First Interstate Bank for 
a loan of $7,328, which was provided based upon security agreement encumbrance 
of the Walkers' airplane. That security agreement contained a dragnet clause, 
which the Walkers initialed separately, providing:

"In addition to the Note, 
this security agreement secures all amounts I owe to the Bank, whether now or 
later. This means that every loan I have now or get later is secured by this 
security agreement, as well as any other amount I may owe to Bank (such as an 
overdraft on my checking account)."

[¶5.]     Conforming to federal 
law, 49 U.S.C. App. § 1403, which requires the recording of all conveyances 
affecting titles to aircraft with the Federal Aviation Administration (FAA) in 
Oklahoma City, Oklahoma, First Interstate Bank filed the security agreement on 
May 9, 1984.

[¶6.]     On August 17, 1984, the 
Walkers contacted First National Bank of Cortez, Colorado (First National Bank), for a $58,836 
loan, and offered their plane as collateral on a second lien to the prior $7,328 
encumbrance. Relying on a title search of FAA records, which revealed only that 
dollar amount of prior encumbrance, First National Bank advanced the money, 
secured by the Cessna airplane collateral. This encumbrance document was filed 
with the FAA on September 12, 1984. Walkers next executed a supplementary 
security agreement in favor of First Interstate Bank in September, 1984, 
recorded in October, 1984, re-securing the August 7, 1981 note and expressly 
including the airplane as security. In more recent foreclosure activity, First 
Interstate Bank sold the airplane and retained all proceeds, and the trial court 
determined that the dragnet clause in the initial airplane security agreement 
secured not only the $7,328 loan but accorded additional security for the 
earlier $93,000 obligation as against the later First National Bank $58,836 
chattel security claim. A classic case of this kind of dragnet clause 
application is consequently presented, involving a prior indebtedness not 
directly referenced in document detail, and a later lender relying on the same 
security for loan collateral.

[¶7.]     The clause used by 
First Interstate Bank was all-inclusive: "all amounts I owe to the bank, whether 
now or later." The provisions invoke principles relating to after-acquired 
indebtedness as well as to previously existing debts. The philosophic difference 
is that the secured party can, in loan document, accurately enumerate any 
asserted existent indebtedness coverage at instrument execution date, to be 
contrasted with later incurred indebtednesses as, for example, overdrafts. 
Additionally, the UCC as enacted in Wyoming expressly provides for a 
future-advance clause in chattel mortgages:

"(e) Obligations covered 
by a security agreement may include future advances or other value whether or 
not the advances or value are given pursuant to commitment." Section 
34-21-923(e), W.S. 1977 [UCC 9-204].

For a discussion 
of this clause, see II Gilmore, Security Interests in Personal Property, Ch. 35, 
§ 35.5 at 931 (1965).

II. RELATION OF FEDERAL 
AND STATE LAW

[¶8.]     The United States 
Congress and succeeding case law has clarified that the supremacy clause and 
federal statutes control the fact of recording, but the effect of recording and 
sufficiency of the recorded instrument remain questions to be determined under 
state law.

[¶9.]     Section 503 of the FAA, 
49 U.S.C.App. § 1403, establishes the recording system and provides:

"(c) Validity of 
conveyances or other instruments, filing. No conveyance or instrument the 
recording of which is provided for by section 503(a) [subsec. (a) of this 
section] shall be valid in respect of such aircraft, * * * against any person 
other than the person by whom the conveyance or other instrument is made or 
given, his heir or devisee, or any person having actual notice thereof, until 
such conveyance or other instrument is filed for recordation * * *.

"(d) Effect of recording. 
Each conveyance or other instrument recorded by means of or under the system 
provided for in subsection (a) or (b) of this section shall from the time of its 
filing for recordation be valid as to all persons without further or other 
recordation * * *."

In 1964, 
Congress added section 506, and 49 U.S.C.App. § 1406 now provides:

"The validity of any 
instrument the recording of which is provided for by section 503 of this Act * * 
* shall be governed by the laws of the State, District of Columbia, or territory 
or possession of the United States in which such instrument is delivered, * * 
*."

In Matter of 
Gary Aircraft Corp., 681 F.2d 365, 368-369 (5th Cir. 1982), cert denied sub. 
nom. General Dynamics Corporation v. Gary Aircraft Corporation, 462 U.S. 1131, 103 S. Ct. 3110, 77 L. Ed. 2d 1366 (1983), the court provided the analysis:

"Without question, 
section 506 reserves some areas of regulation for the states by assigning 
question of `validity' to state law. At the same time, Congress has provided 
that exclusive means of recordation and has preempted state laws providing 
filing systems for interests in aircraft. [Citations.]

* * * * * *

"After considering the 
language of the FAA and the CAA as well as their legislative history, we 
conclude that the FAA does not displace state law assignment of priorities to 
interests in aircraft."

"* * * [E]very aircraft 
transfer must be evidenced by an instrument, and every such instrument must be 
recorded, before the rights of innocent third parties can be affected. 
Furthermore, because of these federal requirements, state laws permitting 
undocumented or unrecorded transfers are pre-empted, * * *." Philko Aviation, 
Inc. v. Shacket, 462 U.S. 406, 409-410, 103 S. Ct. 2476, 
2478, 76 L. Ed. 2d 678 (1983).

See also Bank of 
Lexington v. Jack Adams Aircraft Sales, Inc., 570 F.2d 1220 (5th Cir. 1978); 
Northern Illinois Corp. v. Bishop Distributing Co., 284 F. Supp. 121 (W.D.Mich. 
1968).

III. VALIDITY OF FILING - 
REASON AND EFFECT

[¶10.]  With priority of filing determinable 
under the federal statute, we then turn to the validity of filing as determined 
under the UCC and state law. The purpose of chattel security filing statutes is 
to provide notice, and any interpretative analysis should accord with that 
purpose. Lee, Protections and Priorities Under the Uniform Commercial Code, 17 
Wyo.L.J. 1 (1962); Rudolph, Secured Transactions Under the Commercial Code, 14 
Wyo.L.J. 220 (1960). It is noteworthy that neither author discussed the anaconda 
or dragnet relationship of filed instruments to pre-existing debts. See First 
National Bank of Rock Springs v. Ludvigsen, 8 
Wyo. 230, 56 P. 994, reh. denied 8 Wyo. 230, 57 P. 934 (1899). The business 
purpose inculcated in filing statutes is to permit continued business 
transactions with ascertainable knowledge of risk factors involved. If notice 
perfection is not provided, that commercial protection is denied and security 
lending risk analysis rendered unjustifiably indeterminate. We apply an 
interpretative analysis that advances legislative purpose, while recognizing 
that the text should be interpreted as written. Aldisert, The Judicial Process, 
§ 4 at 170 (1976).

[¶11.]  The notice-of-encumbrance problem is 
amplified in airplane cases, since access to filed documents located in Oklahoma 
City, Oklahoma, to examine the actual instrument is denied as could be possible 
by a quick trip to the local court clerk's office where other security documents 
are locally filed.

[¶12.]  Unfortunately, this record does not 
demonstrate what would be found if physical examination of the records at the 
FAA facility had been made since the court's declaratory judgment decision was 
rendered on a stipulated factual record consisting of copies of a few 
instruments. That record only demonstrates DOT-FAA form 8050-41(7-83) as filing 
acknowledgement, and that the pledge agreement security instrument document was 
"returned for your records, not needed for FAA files." Consequently, the record 
does not portray what could be determined by any physical examination at the 
filing depository.2

[¶13.]  In this case, the dragnet characteristic 
of the first filed count is not shown in dollar obligation. The result is that 
the document is uncommunicative to a later examining party for anything except 
as to the name of the encumbrancer and the one stated obligation. Consequently, 
other verification would be required to assure loanability as based on security 
status of unstated amounts with a contended priority.

[¶14.]  In answering this dilemma, it was argued 
that the lender must call the other lender for confirmation and analysis of 
security document status. Practical recognition of proof-risk factors implicit 
to both the maker and recipient of such telephone calls justifiably rejects 
legislative contemplation of this assumptive responsibility within the filing 
statutes. It is our conclusion that if the legislature wants to afford this 
responsibility to subsequent lenders or buyers, the directive must be more 
specifically stated in statute than is presently found. See Lee, supra at 
11.

[¶15.]  An easy alternative is available to the 
initial lender by inclusion of notation on security agreement or financing 
statement, in the line for amount secured, that also demonstrates inclusion of 
prior indebtednesses of whatever amount or anticipates future advances for a 
stated maximum. Likewise, a bold-faced addition to the normal printed forms 
could accommodate the same information in a fashion to state the dollar amount, 
so that examiners in Oklahoma 
City or indexing clerks in the local filing repository 
would recognize the total amount of security claimed.

IV. CHARACTER - 
CHARACTERISTICS OF DRAGNET-ANACONDA CLAUSES

[¶16.]  As diverse factual categories, these 
security cases present six separate factual relationships which to some degree 
determine alternatively the results achieved, in differentiation of future 
advances from pre-existing obligation, real estate from chattel security, and 
two-party from third-party issues which, in the latter case, raise notice and 
filing attributes. See differentiation noted, First Nat. Bank in Dallas v. 
Rozelle, 493 F.2d 1196, 1202, n. 3 (10th Cir. 1974); Safe Deposit Bank & 
Trust Co. v. Berman, 393 F.2d 401 (1st Cir. 1968). Additionally, mutations or 
differing circumstances of jointly owned property and third-party acquired 
indebtednesses add separate complexities. A somewhat different classification of 
the cases is found in Annotation, Debts Included in Provision of Mortgage 
Purporting to Cover All Future and Existing Debts (Dragnet Clause) - Modern 
Status, 3 A.L.R.4th 690, 695. See Wilson v. Ripley County Bank, Ind. App., 462 N.E.2d 263 (1984); Farmers Trust and Sav. Bank v. Manning, Ia., 311 N.W.2d 285 (1981); Bank of Woodson v. Hibbitts, Tex. App., 626 S.W.2d 133 (1981)3.

V. PRE-EXISTING DEBT - 
SUBSEQUENT SECURITY CLAIMANT

[¶17.]  Our decision will be confined to the 
factual structure presented of dragnet application to pre-existing debts 
invoking chattel security with an intervening subsequent, properly filed, 
security-interest claimant. The second lender had no actual notice of the 
pre-existing debt security claim of the prior lender, either by enumeration in 
security documents, or otherwise.

[¶18.]  The general principle is effectively 
articulated in National Bank of Eastern Ark. v. Blankenship, Ark., 177 F. Supp. 667, 673 (1959), aff'd sub. nom. National Bank of Eastern 
Ark. v. General Mills, Inc., 283 F.2d 574 (8th Cir. 
1960):

"While a provision in a 
mortgage that it shall be security for indebtedness other than the primary 
obligation described therein is valid, a reading of the Arkansas cases indicates 
that such provisions are not favorites of equity, and that they will be 
construed rather strictly. In this connection, in Berger v. Fuller, 180 Ark. 
372, 377, 21 S.W.2d 419, 421 [1929], the Court said: `Mortgages of this 
character have been denominated "anaconda mortgages" and are well named thus, as 
by their broad and general terms they enwrap the unsuspecting debtor in the 
folds of indebtedness embraced and secured in the mortgage which he did not 
contemplate, and to extend them further than has already been done would, in our 
opinion, be dangerous and unwise * * *.'

"The `other indebtedness' 
secured by a mortgage may be either antecedent or subsequent. Where it is 
antecedent, it must be identified in clear terms, and where it is subsequent, it 
must be of the same class as the primary obligation secured by the instrument 
and so related to it that the consent of the debtor to its inclusion may be 
inferred. * * *

* * * * * *

"* * * Where a mortgage 
is given to secure a specific debt named, the security will not be extended as 
to antecedent debts unless the instrument so provides and identifies those 
intended to be secured in clear terms, and, to be extended to cover debts 
subsequently incurred, these must be of the same class and so related to the 
primary debt secured that the assent of the mortgagor will be inferred. * * 
*

* * * * * *

"* * * `A debt created 
subsequent to the mortgage, being not yet in existence, may not in all cases be 
clearly indicated; whereas, antecedent debts may always be definitely stated, 
and for this reason the general expression, "other indebtedness," would usually 
be treated as referring not to an antecedent debt but to one subsequently 
incurred.'" Quoting from Hendrickson v. Farmers' Bank & Trust Co., 189 
Ark. 423, 73 S.W.2d 725 (1934).

See also the 
discussion in that case as restated on appeal, National Bank of EasternArk. v. General Mills, Inc., supra.4

[¶19.]  It is apparent that acquired 
indebtednesses as attempted to be enfolded into the anaconda provision in 
security priority has received adverse attention, whether justified in absence 
of intent of the parties or a different transaction consideration equally 
applied to antecedent and future-advance cases. Berger v. Fuller, 180 Ark. 372, 
21 S.W.2d 419 (1929), purchased pre-existing indebtedness; Thorp Sales Corp. v. 
Dolese Bros. Co., 453 F. Supp. 196 (W.D.Okla. 1978), quoting from National Bank 
of Eastern Ark. v. Blankenship, supra:

"`The "other 
indebtedness" secured by a mortgage may be either antecedent or subsequent. 
Where it is antecedent, it must be identified in clear terms, and where it is 
subsequent, it must be of the same class as the primary obligation secured by 
the instrument and so related to it that the consent of the debtor to its 
inclusion may be inferred.'" Thorp Sales Corp. v. Dolese Bros. Co., supra, 453 F. Supp.  at 200.5

[¶20.]  These principles afford a result in 
general application of the judicial attitude frequently stated to require 
careful scrutiny and strict construction as factually disproving concealment, 
haste, or artifice. Gates v. Crocker-Anglo Nat. Bank, 257 Cal. App. 2d 857, 65 Cal. Rptr. 536 (1968). See also First v. Byrne, 238 Ia. 712, 28 N.W.2d 509, 
172 A.L.R. 1072 (1947). Marine Nat. Bank v. Airco, Inc., 389 F. Supp. 231 
(W.D.Pa. 1975); Wong v. Beneficial Sav. and Loan Ass'n., 56 Cal. App. 3d 286, 128 Cal. Rptr. 338 
(1976). In pre-code and Art. 9 consideration, see II Gilmore, supra, at 
916.

[¶21.]  Following the leadership of the 
Blankenship cases, this category of anaconda cases was reconsidered in the third 
principal case of Sowder v. Lawrence, 129 Kan. 135, 281 P. 921, 922-923 
(1929):

"* * * The policy of the 
law with reference to the Recording Act is to thereby afford notice to the world 
as to the maximum amount of indebtedness against the property therein described. 
If a general clause of the kind and character found in this mortgage will afford 
a lien on the property for any and all private and secret obligations between 
the parties at the time of the execution of the mortgage, other creditors and 
subsequent purchasers would have no protection whatever.

"`A mortgage securing a 
debt of a fixed amount cannot be extended so as to become a lien for another and 
different indebtedness not expressed.' Jones on Chattel Mortgages, § 
91."

"The trust deeds on their 
face show that no antecedent indebtedness is specifically described. Thus the 
court was justified in finding that no antecedent debt was secured by the trust 
deeds, and that no intent was expressed that the other indebtedness clause was 
intended to secure debts primarily secured by the separate trust deeds." 
National Bank of EasternArk. v. General Mills, Inc., supra, 
283 F.2d  at 578.

Although in a 
case involving a future-advance question, the same principle was refined by the 
Hawaiian court in Akamine and Sons, Ltd. v. American Sec. Bank, 50 Haw. 304, 440 P.2d 262, 268 (1968):

"* * * Unless the prior 
or subsequent advance relates to the same transaction or series of transactions, 
the mortgage must specifically refer to it for the advance to be secured. This 
court will not assist a lending institution in an attempt to captivate a 
borrower by inclusion in a mortgage of a broad all inclusive dragnet 
clause."

Similarly 
reasoned, although it also included the different-person indebtedness question, 
in First v. Byrne, supra, 28 N.W.2d  at 512, the court determined:

"* * * We are left to 
assume the mortgage form was used without discussion of the particular clause in 
question and with no special regard having been given to its consequences - 
certainly with no express common intent or purpose as to the debt in 
question.

"No reason is suggested 
why this debt was not referred to in the mortgage if it was intended to be 
included. It would seem good faith required some mention of it."

[¶22.]  In United 
States v. Fahrenkamp, 312 F.2d 627, 630 (8th Cir. 1963), 
the federal court again followed the principles by citation of the Arkansas 
case:

"`Where a mortgage is 
given to secure a specific debt named, the security will not be extended as to 
antecedent debts unless the instrument so provides and identifies those intended 
to be secured in clear terms, and, to be extended to cover debts subsequently 
incurred, these must be of the same class and so related to the primary debt 
secured that the assent of the mortgagor will be inferred. The reason is that 
mortgages, by the use of general terms, ought never to be so extended as to 
secure debts which the debtor did not contemplate.' Hendrickson v. Farmers Bank 
& Trust Company, 189 Ark. 423, 434, 73 S.W.2d 725, 729 
(1934)."

See 
Archer-Daniels-Midland Co. v. North Arkansas Milling Co., 205 F. Supp. 524 
(W.D.Ark. 1961). See also Oklahoma's adoption of the 
specific-identification rule. First Nat. Bank of Ardmore v. Gillam, 134 Okla. 237, 273 P. 261 (1927); Farmers Nat. Bank of 
Cherokee v. De Fever, 177 Okla. 561, 61 P.2d 245, 247 
(1936):

"* * * [A] chattel 
mortgage, executed on a printed form in which was inserted, in one of several 
blank spaces provided therein for the insertion of a description of the 
obligations to be secured, a specific description, including the amount, of a 
note executed at the same time, did not secure, by force of a further printed 
provision in the mortgage that it was to stand as security for all other 
indebtedness and liabilities of the mortgagor to the mortgagee, another existing 
note not identified in the mortgage."

 

[¶23.]  The Utah court, in First Sec. Bank of 
Utah v. Shiew, Utah, 609 P.2d 952 (1980), considered a dragnet clause as "a 
standard boilerplate provision" inserted in the home mortgage where the purpose 
of the mortgage was to purchase the house, and the issue was whether that 
mortgage carried into security right a subsequently claimed cattle and feed 
loan. Although the case could be defined as lacking a scintilla of evidence 
posture, the court approved with extensive quotation of Osborne, Nelson, 
Whitman, Real Estate Finance Law, § 12.8, p. 773 (1979):

"`1. The mortgage will 
only secure advances made or debts incurred in the future. If the mortgagor 
already owes debts to the mortgagee at the time the mortgage is executed, it 
would supposedly be easy to identify those existing debts specifically; if they 
are not so identified, it is assumed that the parties did not intend to secure 
them.'"

[¶24.]  In a case where the security document 
specifically referenced both the prior indebtedness and the promissory note 
which evidence that debt, the Alabama court determined:

"It is the law in 
Alabama, 
however, that a dragnet clause which, although not itemizing the existing 
indebtedness, does, by clear and unequivocal terms, reference and include a 
specific and identifiable antecedent debt, extends the coverage of the security 
agreement to that antecedent debt. The dragnet clause, therefore, may be given 
the full effect of its terms." Dixie Ag Supply, Inc. v. Nelson, Ala., 500 So. 2d 1036, 
1040 (1986).

[¶25.]  It is apparent that the more carefully 
defined and refined cases recognize the difference between the validity of a 
dragnet transaction as a theory and a question as to the specificity or criteria 
required in bringing the particular indebtedness within the purview of the 
security document language. We would also follow that academic approach in 
recognizing the validity of anaconda-dragnet within its proper arena of 
commercial lending transactions, as a theory, and then assess a requirement of 
specificity, regularity, and detail.

VI. WYOMING 
STATUTE

[¶26.]  In this case, involving a third-party 
claimant, Wyoming laws regarding filings and notice 
acquire significance. Section 34-21-927, W.S. 1977, Request for statement of 
account or list of collateral, invading the field of actual notice if a copy is 
furnished to the succeeding interest holder, and § 34-21-931(c), W.S. 1977 (1987 
Cum. Supp.), which provides:

"The filing of a 
financing statement otherwise required by this article is not necessary or 
effective to perfect a security interest in property subject to:

"(i) A statute or treaty 
of the United States which provides for a national or international registration 
or a national or international certificate of title or which specifies a place 
of filing different from that specified in this article for filing of the 
security interest;

"(ii) The following 
statutes of this state, W.S. 31-2-101 through 31-2-105 and, except as otherwise 
provided in subsection (j) of this section, W.S. 31-2-501 through 31-2-508, but 
during any period in which collateral is inventory held for sale by a person who 
is in the business of selling goods of that kind, the filing provisions of this 
article (part 4) apply to a security interest in that collateral created by him 
as debtor; or

"(iii) A certificate of 
title statute of another jurisdiction under the law of which indication of a 
security interest on the certificate is required as a condition of perfection 
(W.S. 34-21-903(b) (9-103(2))."

[¶27.]  Residually applicable to this defined 
class are § 18-3-402(a)(ix), W.S. 1977 (1987 Cum. Supp.), outlining the duties 
of the county clerk:

"Keep in his office a 
general index, direct and inverted, in which he shall make correct entries of 
every instrument recorded or filed under appropriate headings, entering the 
names of the grantors and grantees in alphabetical order. He shall make correct 
entries in the index of every instrument required by law to be entered therein. 
He shall immediately note in the appropriate index, in the proper column and 
opposite the entry whenever any mortgage, bond or other instrument has been 
released or discharged from record, whether by written release or by recording a 
deed of release;"

and § 18-3-104, 
W.S. 1977, relating to copies of instruments and excerpts:

"Copies of all documents, 
writs, proceedings, instruments, papers and writings filed or deposited in the 
office of any district judge, county clerk or county treasurer and transcripts 
from books of record or proceedings kept by any such officers, with the seal of 
his office affixed, is prima facie evidence in all cases."

VII. CONVERSE 
AUTHORITY

[¶28.]  First Interstate Bank cites two cases as 
converse authority: Clovis Nat. Bank v. Harmon, 102 N.M. 166, 692 P.2d 1315 
(1984), and Personal Jet, Inc. v. Callihan, 624 F.2d 562 (5th Cir. 1980). 
Personal Jet is inapplicable, since the successful creditor was the only 
claimant with security interest properly perfected on the aircraft, wherein the 
court determined that the conflicting claimant did not have a document 
"sufficient to create a security interest." Clovis National involved protection 
of a guarantor, and included both pre-existing and after-acquired indebtednesses 
in a real estate mortgage relationship. Priority was granted mathematically, 
based on filing-date status, and the case includes no discussion of the 
anaconda-dragnet inquiries. That case is essentially the only authority which 
could sustain a contrary result, but lacks cogent inquiry or logical 
persuasion.

VIII. 
CONCLUSION

[¶29.]  We adopt the persuasive posture of the 
Blankenship cases requiring specification of the amounts in order for dragnet 
clauses to afford recording priority for pre-existing debt.

[¶30.]  The judgment is reversed, and the case is 
remanded for proceedings in accord herewith.

FOOTNOTES

1 Law journal 
consideration of the dragnet-anaconda application is particularly directed to 
the subject of future advances. Note, Future Financing Advances under the 
Uniform Commercial Code: Curbing the Abuses of the Dragnet Clause, 34 
U.Pitt.L.Rev. 691 (1973); Blackburn, Mortgages 
to Secure Future Advances, 21 Mo.L. Rev. 209 (1956); Note, Enforceability of 
"Dragnet Clauses" in Deeds of Trust: The CurrentState 
of the Law in Texas, 56 Texas L.Rev. 733 (1978); 
Note, Future Advance Clauses in Tennessee Construction and Effect, 5 
Mem.St.U.L.Rev. 586 (1975); Note, Mortgages Securing Future Advances - A Need 
for Legislation, 47 Iowa L.Rev. 432 (1961-62); Annotation, Debts 
Included in Provisions of Mortgage Purporting to Cover All Future and Existing 
Debts (Dragnet Clause) - Modern Status, 3 A.L.R.4th 690.

2 What is to be seen from 
the stipulated record is contained in a form completed as an examination 
certificate of records by Federal Aviation Title Company dated November 23, 1984 
which details for the involved airplane:

"(1) Ownership 
Registration Certificate:

"Name Walker, 
Richard L. DBA R & R Drilling Co.

Date Issued 
7-19-79

"Address 1018 
East Lincoln Riverton Wyoming 82501 Date Approved 
7-19-79

"Type of 
Ownership Individual

* * * * *

"(2) Liens and 
Encumbrances - Type: SECURITY AGREEMENT

"From Richard 
Walker & Verlene M. Walker DBA R & R Drilling

"To First 
Interstate Bank of Riverton, N.A.

"Assignment Date 
_________________________________

"Holder First 
Interstate Bank of Riverton, N.A. Date 4-06-84

"Address 

P.O. Box 
233 Filed 4-23-84 Riverton, Wyoming 82501 Recorded 5-08-84

"Original Amount 
$ 7,328.35 Document Number H41379

"ADDITIONAL 
INFORMATION

"SECURITY 
AGREEMENT

"FROM: Richard 
L. Walker DBA R & R Drilling Co.

"TO: First 
National Bank, Cortez, P.O. Drawer A, Cortez, CO 81321

"AMOUNT: 
$58,836.73

"DATED: 8-07-84 
FILED: 8-17-84 RECORDED: 9-14-84 DOCUMENT: #J30461

"SUPPLEMENTAL 
SECURITY AGREEMENT

"FROM: Richard 
Walker & Verlene M. Walker DBA R & R Drilling Co.

"TO: First 
Interstate Bank of Riverton, N.A.

"AMOUNT: 
$77,605.53

"DATED: 9-04-84 
FILED: 9-13-84 RECORDED: 10-05-84 DOCUMENT: # A185.

3 The most comprehensively 
litigated issue involving dragnet-anaconda is found for future advances as 
raising inquiry of similar or dissimilar transaction rules. Among the frequently 
cited cases which denominate the denial rule for dissimilar transaction are 
Freese Leasing, Inc. v. Union Trust & Sav. Bank, Stanwood, Ia., 253 N.W.2d 921, 3 A.L.R.4th 681 (1977); Emporia State Bank & Trust Co. v. Mounkes, 214 
Kan. 178, 519 P.2d 618 (1974); and John Miller Supply Co., Inc. v. Western State 
Bank, 55 Wis.2d 385, 199 N.W.2d 161 (1972). See also Marine Nat. Bank v. Airco, 
Inc., 389 F. Supp. 231 (W.D. Pa. 1975). ILlustrative cases include, National 
Acceptance Co. of America v. Blackford, 408 F.2d 20 (5th Cir. 1969); Beavers v. 
Le Sueur, 188 Ga. 393, 3 S.E.2d 667 (1939); Akamine and 
Sons, Ltd. v. American Sec. Bank, 50 Haw. 304, 440 P.2d 262 (1968); Matter of 
Estate of Simpson, Ia., 403 N.W.2d 791 (1987); Canal Nat. Bank v. Becker, Me., 431 A.2d 71 
(1981); Second Nat. Bank of Warren v. Boyle, 155 Ohio St. 482, 99 N.E.2d 474 (1951); Community Bank v. Jones, 278 Or. 647, 566 P.2d 470 (1977); 
First Sec. Bank of Utah v. Shiew, Utah, 609 P.2d 952 (1980); In re Grizaffi, 23 B.R. 137 (Bkrtcy.D. Colo. 1982).

Cases in future advance 
category stating a somewhat different rule with not necessarily similar results 
are essentially definable in clear-intent application and include Uransky v. 
First Federal Sav. & Loan Ass'n of Fort 
Myers, 684 F.2d 750 (11th Cir. 1982); In re Riss Tanning Corp., 468 F.2d 1211 (2d Cir. 1972); Kenneally v. Standard Electronics Corp., 364 F.2d 642 
(8th Cir. 1966); Ex Parte Chandler, Ala., 477 So. 2d 360 (1985); First Nat. Bank of 
Guntersville v. Bain, 237 Ala. 580, 188 So. 64 (1939); Mohler v. Buena 
Vista Bank and Trust Co., 42 Colo. App. 4, 588 P.2d 894 (1978); State Bank of 
Albany v. Fioravanti, 51 N.Y.2d 638, 438 N.Y.S.2d 947, 417 N.E.2d 60 (1980); 
Bloom v. First Vermont Bank & Trust Co., 133 Vt. 407, 340 A.2d 78 (1975).

4 Although not relevant 
now on the declaratory-judgment record, we would not necessarily afford priority 
to subsequent acquirers of interest if actual knowledge of the claimed dragnet 
debt security application did exist. See Dixie Ag Supply, Inc. v. Nelson, 
Ala., 500 So. 2d 1036 (1986).

5 Joint owners and 
collaterally involved parties invoke a similar negative construction under the 
purview of general principles of strict construction. Gates v. Crocker-Anglo 
Nat. Bank, 257 Cal. App. 2d 857, 65 Cal. Rptr. 536 (1968); Mohler v. Buena Vista 
Bank & Trust Co., supra, 588 P.2d 894 at n. 3; National Acceptance Co. of 
America v. Exchange Nat. Bank of Chicago, 101 Ill. App.2d 396, 243 N.E.2d 264 
(1968); Farmers Trust and Sav. Bank v. Manning, supra, 311 N.W.2d 285; In re 
Peterson, 27 B.R. 95 (Bkrtcy. M.D.Fla. 1983). Likewise, tort claims are not 
normally dragnetted to security priority. Trapp For Use and Benefit of First 
Mississippi Bank of Commerce v. Tidwell, Miss., 418 So. 2d 786 (1982).

BROWN, Chief Justice, 
specially concurring.

[¶31.]  I concur in the majority opinion only to 
the extent that it adds a very limited requirement for perfection of a security 
interest in collateral for antecedent debts. This is not a case dealing with a 
security interest in collateral based on a future advance. Further, as the 
majority notes in footnote 4, these facts do not present us with a subsequent 
lender who had actual knowledge of antecedent debt coverage of collateral. 
Keeping these caveats in mind, I would restate the holding to be: Security 
agreement clauses covering antecedent debt will only be enforced in Wyoming when the 
antecedent indebtedness is clearly identified on the financing statement as a 
dollar amount secured.

THOMAS, Justice, dissenting, 
with whom CARDINE, J., 
joins.

[¶32.]  I dissent from the majority disposition 
of this case, and I join in the keen and logical dissenting opinion of Justice 
Cardine. I offer a brief elaboration of the analysis of this case to sharpen the 
points made by Justice Cardine and to protest the impact of this case upon 
Wyoming law. I 
am constrained to wonder, as I am sure others will, "Whatever happened to the 
Uniform Commercial Code?"

[¶33.]  As I understand the holding of this case, 
First National Bank, Cortez, 
Colorado (Cortez Bank), having 
notice of the existence of a security agreement between the Walkers and First 
Interstate Bank of Riverton, N.A. (Riverton Bank), is excused from any 
requirement that it examine the security agreement or make further inquiry. If 
this is not the thrust of the majority decision, then we apparently are 
declaring invalid any clause in a security agreement that would purport to 
secure antecedent indebtedness. This latter disposition surely would be unique 
in the law.

[¶34.]  As Justice Cardine points out in his 
dissenting opinion, had the Cortez Bank examined the security agreement, as 
filed in the office of the County Clerk of Fremont County or in the file of the 
Federal Aviation Administration (FAA) or as furnished by the Walkers upon 
request, the instrument would have disclosed, without equivocation, the intent 
of the Walkers and the Riverton Bank to secure antecedent debts. Additional 
research in the office of the CountyClerk of FremontCounty or further inquiry of the Walkers 
should have disclosed the aggregate amount of any antecedent indebtedness. The 
majority opinion notes correctly that the validity of the security agreement, 
which was filed with the FAA, is controlled by state law. Unfortunately, the 
majority then fails to apply the appropriate Wyoming law. Instead, the majority decision 
affords substantive effect to what appears to be a certificate of examination of 
the records of the FAA by Federal Aviation Title Company, although there is no 
indication in the record that the information actually was obtained by the 
Cortez Bank. The majority then holds that, since the certificate of examination 
did not allude to any antecedent debt, the Riverton Bank is limited in priority 
to the dollar amount that the agents of the Federal Aviation Title Company chose 
to set forth on the face of the certificate. This result pertains despite the 
fact that the Riverton Bank had done all that it possibly could to comply with 
the requirements of the Uniform Commercial Code (U.C.C.), as adopted in Wyoming, 
and with federal law, and despite the fact that the majority opinion concedes 
the proposition that no substantive effect flows from the requirement of federal 
law that the security agreement be recorded with the FAA. It almost appears that 
the Riverton Bank is barred from its claim to the security in this instance by 
what simply may have been a mistake on the part of the Federal Aviation Company, 
a result that is difficult to understand or accept.

[¶35.]  Contrary to the holding of the majority, 
the law does not require that a security agreement recite the amount of the debt 
secured. See § 34-21-922, W.S. 1977 (1987 Cum.Supp.) (U.C.C. § 9-203); Clovis 
National Bank v. Harmon, 102 N.M. 166, 692 P.2d 1315 (1984); 8 R. Anderson, Uniform 
Commercial Code § 9-203:27 at 676 (1985). The statutes contain minimal 
requirements with respect to the enforceability and the attachment of a security 
interest. If the collateral is not in the possession of the secured party, it is 
necessary that the debtor have signed a written security agreement that contains 
a description of the collateral and manifests the intention of the parties to 
create a security interest in that collateral. WYHY Federal Credit Union v. 
Burchell, Wyo., 
643 P.2d 471 (1982); 8 Anderson, supra, § 9-203:17 at 669-670. If 
value has been given, and the debtor has rights in the collateral, the security 
interest attaches and becomes enforceable against the debtor with respect to the 
collateral as soon as all of the minimal requirements have been met. Section 
34-21-922, W.S. 1977 (1987 Cum.Supp.); Uniform Commercial Code (U.L.A.) § 9-203, 
Comment 1, 1972 Official Comment. Value as defined by § 34-21-120(a)(xliv) and 
(B), W.S. 1977, includes total or partial satisfaction of a pre-existing 
claim.

[¶36.]  The security agreement between the 
Riverton Bank and the Walkers met the requirement for giving of value, and it 
provided that all amounts owed to the bank, whether then existing or later 
advanced, were covered. The Cessna aircraft was described as the collateral. 
Section 34-21-120(a)(iii), W.S. 1977, contains a definition of agreement, which 
provides that the bargain of the parties may be found in the language used or by 
implication from other circumstances. At the time the security agreement was 
executed, the Walkers owed the Riverton Bank $93,000 on a promissory note that 
was made on August 7, 1981. It is clear that the parties intended the aircraft 
as collateral to secure the pre-existing debt. See Clovis National Bank v. 
Harmon, supra. Since the Walkers had rights in the collateral (the Cessna), and 
the agreement did not provide otherwise, the security interest of the Riverton 
Bank attached when the Walkers signed the security agreement of April 6, 1984. 
That security interest was perfected, according to law, on April 23, 1984, when 
the Riverton Bank filed the security agreement with the FAA. See Bank of 
Oklahoma, CityPlaza v. Martin, Okla.App., 744 P.2d 218 
(1987); In re Gelking, 754 F.2d 778 (8th Cir. 1985). Subsequently, the Cortez 
Bank perfected its security interest in the same Cessna by filing with the FAA, 
but the interest of the Riverton Bank was superior to that of the Cortez Bank, 
at least according to § 34-21-941(e)(i), W.S. 1977 (1987 Cum. Supp.). Although 
the Cortez Bank alleged otherwise in its pleadings, the only amounts claimed by 
the Riverton Bank relate to the existing indebtedness plus the new promissory 
note made when the Walkers signed the April 6, 1984 security agreement; no issue 
is present with respect to any priority that the Cortez Bank might have over a 
supplemental security agreement, which was signed by the Walkers on September 4, 
1984, and recorded with the FAA on October 5, 1984, after the perfection of the 
security interest of the Cortez Bank.

[¶37.]  The express concern of the majority with 
respect to lack of notice to the Cortez Bank, because of its conclusion that the 
FAA records do not contain sufficient information to advise subsequent creditors 
that an aircraft may be collateral for pre-existing debts, is not a material 
consideration. It is not clear from this record what information may be obtained 
from the files of the FAA. The record does establish that the Riverton Bank 
filed the April 6, 1984 security agreement with the FAA, and it was returned by 
the FAA stamped:

"RETURNED FOR YOUR 
RECORDS NOT NEEDED FOR FAA FILES."

The record also 
encompasses a document, addressed to the Riverton Bank, which is entitled 
"EXAMINATION CERTIFICATE OF RECORDS," prepared by the Federal Aviation Title 
Company and certifying information found in the records that it examined. It 
appears that the majority assumes that the only information contained in the FAA 
files is that reflected in the examination certificate and that, had the Cortez 
Bank examined the FAA records, it justifiably would have reached the conclusion 
that the Riverton Bank's security interest in the Cessna was limited to the 
amount advanced at the time the April 6, 1984 security agreement was signed. 
Even if one were to accept those assumptions, the concern with respect to the 
sufficiency of information in the FAA file to provide appropriate notice to 
subsequent creditors is not well founded. Filing with the FAA furnishes notice, 
and the opportunity to obtain the appropriate information is available to 
subsequent creditors in other ways.

[¶38.]  A federal filing system with respect to 
conveyances of aircraft was adopted for the purpose of providing a central 
source of information from which notice of transactions could be obtained 
through an indexing system. See Philko Aviation, Inc. v. Shacket, 462 U.S. 406, 103 S. Ct. 2476, 76 L. Ed. 2d 678 (1983). The function of the system is very similar to the notice provided 
through local filing systems for secured transactions. See In re Gelking, supra; 
Bank of Oklahoma, CityPlaza v. Martin, supra; Uniform Commercial 
Code (U.L.A.) § 9-302, Comment 8, 1975 Official Comment. In this instance, the 
information that is found in the "EXAMINATION CERTIFICATE OF RECORDS" is exactly 
the same as that which should be included in a financing statement. If the 
Cortez Bank had examined the FAA record, it would have known of the prior 
security interest in the Cessna in favor of the Riverton Bank, and it then would 
have had the opportunity to obtain all appropriate information.

[¶39.]  This court, in a number of instances, has 
recognized the difference between a financing statement and a security agreement 
and the requirements and functions of a financing statement. See, e.g., Landen 
v. Production Credit Association of Midlands, Wyo., 737 P.2d 1325 (1987); Sannerud v. First 
National Bank of Sheridan, Wyo., 708 P.2d 1236 (1985); Daly v. Shrimplin, Wyo., 610 P.2d 397 (1980); American National 
Bank of Riverton v. First National Bank of Lander, Wyo., 446 P.2d 968 
(1968). In Daly v. Shrimplin, supra, the court pointed out that a financing 
statement is filled to give constructive notice of a security interest in 
property. We noted that § 34-21-951, W.S. 1977, encompasses the formal 
requisites of financing statements, and we quoted the following with approval: 

"`* * * The purpose of 
the filed statement or agreement is to give the minimum information necessary to 
put a searcher on inquiry. The section contemplates that the complete state of 
affairs will be learned only after such inquiry. * * *' Bank of North America v. 
Bank of Nutley, 
94 N.J. Super. 220, 227 A.2d 535, 539 (1967)." Daly v. Shrimplin, supra, 610 P.2d  at 404.

In Landen v. 
Production Credit Association of Midlands, supra, we quoted the provisions of § 
34-21-951(a), W.S. 1977, which do not require that the amount of indebtedness be 
stated, but do require "an address of the secured party from which information 
concerning the security interest may be obtained * * *." All of that was present 
in this instance.

[¶40.]  The decisions of this court heretofore 
have been entirely consistent with the application of the U.C.C. as understood 
by the drafters, and respected authorities in this area of the law. Uniform 
Commercial Code (U.L.A.) § 9-402, Comment 2, 1981 Official Comment, from which § 
34-21-951, W.S. 1977, was drawn, says, in pertinent part:

"This section adopts the 
system of `notice filing' which proved successful under the Uniform Trust 
Receipts Act. What is required to be filed is not, as under chattel mortgage and 
conditional sales acts, the security agreement itself, but only a simple notice 
which may be filed before the security interest attaches or thereafter. The 
notice itself indicates merely that the secured party who has filed may have a 
security interest in the collateral described. Further inquiry from the parties 
concerned will be necessary to disclose the complete state of affairs. Section 
9-208 provides a statutory procedure under which the secured party, at the 
debtor's request, may be required to make disclosure. Notice filing has proved 
to be of great use in financing transactions involving inventory, accounts and 
chattel paper, since it obviates the necessity of refiling on each of a series 
of transactions in a continuing arrangement where the collateral changes from 
day to day. Where other types of collateral are involved, the alternative 
procedure of filing a signed copy of the security agreement may prove to be the 
simplest solution. Sometimes more than one copy of a financing statement or of a 
security agreement used as a financing statement is needed for filing. In such a 
case the section permits use of a carbon copy or photographic copy of the paper, 
including signatures. "However, even in the case of filings that do not 
necessarily involve a series of transactions the financing statement is 
effective to encompass transactions under a security agreement not in existence 
and not contemplated at the time the notice was filed, if the description of 
collateral in the financing statement is broad enough to encompass them. 
Similarly, the financing statement is valid to cover after-acquired property and 
future advances under security agreements whether or not mentioned in the 
financing statement."

In his work on 
the U.C.C., Anderson says:

"When a proper filing is 
made, third persons are presumed to have notice of and are subject to the 
provisions of the security agreement. A person is charged with possessing the 
information that could have been discovered had he made the inquiry suggested by 
the filing." 9 R. Anderson, Uniform Commercial Code, § 9-402:6 at 
448 (3d ed. 1985). (Footnotes omitted.)

Later, Anderson says:

"The financing statement 
only gives notice that a security interest is claimed in certain described 
collateral. There is no requirement that the financing statement identify the 
obligation that is secured by the secured transaction nor to state the terms of 
such obligation. As there is no requirement that the financing statement 
identify the debt, there is no requirement that the financing statement set 
forth the amount of the debt, that future advances may be made, or the maximum 
amount of the debt.

"Because the financing 
statement does not identify any particular debt as underlying the secured 
transaction, the one financing statement may cover many successive obligations 
of the debtor with respect to the described collateral, without regard to the 
fact that different obligations are involved, or that there has been a 
refinancing of the obligation underlying the original secured transaction. Thus 
one filing of a financing statement may cover all secured transactions between 
the debtor and creditor and there is no requirement that a new financing 
statement be filed every time that a later secured transaction is entered into." 
9 R. Anderson, Uniform Commercial Code, supra, § 9-402:22 at 462. (Footnotes 
omitted.)

[¶41.]  The function of the requirement that 
aircraft conveyances be filed with the FAA essentially is to provide notice 
similar to the notice provided by a financing statement. Had the Cortez Bank 
done what the U.C.C. contemplates, as it has been interpreted, and pursued 
inquiry through the Walkers in order to obtain copies of the security agreements 
or looked for filed security agreements in the office of the County Clerk of 
Fremont County, or if any existing microfilm copy of the security agreement at 
the FAA had been examined, the instrument clearly would have disclosed the 
intent of the Walkers and the Riverton Bank to secure antecedent debts. I 
perceive this to be the requirement imposed upon a competing creditor by virtue 
of Wyoming's 
version of the U.C.C. "The law is almost elementary that whatever puts a party 
on inquiry amounts to `notice.'" Rodin v. State ex rel. City of Cheyenne, Wyo., 417 P.2d 180, 195 (1966).

[¶42.]  There is no necessity to provide more 
protection to subsequent creditors than the legislature did in adopting the 
U.C.C. Yet the majority opinion extends additional protection contrary to the 
intention of the drafters of the U.C.C. that the duty of inquiry assigned to a 
subsequent creditor does not end with an investigation of the financing 
statement or even the security agreement. See Western State Bank v. Grumman 
Credit Corporation, 564 F. Supp. 9 (D.Mont. 1982). Section 34-21-927, W.S. 1977 
(1987 Cum.Supp.), adopted from § 9-208 of the U.C.C., sets forth the 
opportunity, provided by the legislature, for a debtor to obtain verification of 
the amount owed and the extent of the collateral. Other cases which have been 
decided under the U.C.C. and the Official Comments to § 9-208 of the U.C.C. 
demonstrate that subsequent creditors must utilize this avenue as well. Uniform 
Commercial Code (U.L.A.) § 9-208, Comment 2, 1981 Official Comment states, in 
pertinent part:

"The financing statement 
required to be filed under this Article (see Section 9-402) may disclose only 
that a secured party may have a security interest in specified types of 
collateral owned by the debtor. Unless a copy of the security agreement itself 
is filed as the financing statement third parties are told neither the amount of 
the obligation secured nor which particular assets are covered. Since subsequent 
creditors and purchasers may legitimately need more detailed information, it is 
necessary to provide a procedure under which the secured party will be required 
to make disclosure. On the other hand, the secured party should not be under a 
duty to disclose details of business operations to any casual inquirer or 
competitor who asks for them. This Section gives the right to demand disclosure 
only to the debtor, who will typically request a statement in connection with 
negotiations with subsequent creditors and purchasers, or for the purpose of 
establishing his credit standing and proving which of his assets are free of the 
security interest. The secured party is further protected against onerous 
requests by the provisions that he need furnish a statement of collateral only 
when his own records identify the collateral and that if he claims all of a 
particular type of collateral owned by the debtor he is not required to approve 
an itemized list."

Also see 8 R. 
Anderson, supra, § 9-208:7 at 20; 8 W. Hawkland, Uniform Commercial Code § 
9-208:01 at 567 (1986) ("Section 9-208, the mechanism chosen by the drafters of 
the Code for enabling interested parties to determine the existence and scope of 
any security interest, reflects a compromise between the legitimate needs of 
potential creditors and purchasers, the privacy rights of the debtor, and the 
legitimate commercial need of secured parties to be free from unwarranted 
inquiries." (Footnote omitted.))

[¶43.]  I am in complete accord with Justice 
Cardine's conclusion that a rule basically aimed at identifying the intent of 
parties to security agreements now is extended to benefit a competing creditor. 
With a minimum of diligence, the competing creditor could have discovered either 
that it was being misled by its borrowers or what the facts were if the 
borrowers did not understand them. The effect of the majority decision has to be 
that Wyoming 
lending institutions will be reluctant now to assist their existing debtors by 
increasing the amount of borrowing. They cannot rely upon a security agreement 
to give them priority with respect to antecedent indebtedness, and they may 
choose not to assume the burden of evaluating the file for intervening liens. I 
suggest that ultimately the citizens of Wyoming 
are going to suffer a detriment so that the First National Bank of Cortez, Colorado may have an advantage in this 
case.

[¶44.]  Finally, I note that a legislative 
enactment, which provided that:

"(b) Underlying purposes 
and policies of this act [U.C.C.] are:

"(i) To simplify, clarify 
and modernize the law governing commercial transactions;

"(ii) To permit the 
continued expansion of commercial practices through custom usage and agreement 
of the parties;

"(iii) To make uniform 
the law among the various jurisdictions." (Section 34-21-102(b), W.S. 
1977),

now is given a 
construction antithetical to that stated purpose. A law that was assumed to 
provide certainty now is afflicted with the uncertainty created by this court's 
interpretation. In this instance, that result is neither necessary, appropriate 
nor fair.

[¶45.]  I would affirm the judgment of the trial 
court in this case.

CARDINE, Justice, 
dissenting.

[¶46.]  I dissent.

[¶47.]  By promissory note dated August 7, 1981, 
Richard Walker and Verleen Walker borrowed from the First Interstate Bank of 
Riverton (FIBR) the sum of $77,605.63. By promissory note dated April 6, 1984, 
Richard Walker and Verleen Walker borrowed from FIBR the additional sum of 
$7,328.35, securing said loan with a security and pledge agreement upon a 1979 
Cessna airplane. The security and pledge agreement, in addition to securing 
repayment of the contemporaneous loan, also secured repayment of all existing 
and future debts owed the bank by the following clause in the security 
agreement:

"(Check and initial if 
applicable X /s RW VW.) In addition to the Note, this security agreement 
secures all amounts I owe to the Bank, whether now or later. This means that 
every loan I have now or get later is secured by this security agreement, as 
well as any other amount I may owe to Bank (such as an overdraft on my checking 
account)."

As indicated, 
the box was checked with an "x," and the initials "RW" and "VW" were signed in 
the blank space following. The security and pledge agreement was properly filed 
with the county clerk in FremontCounty and with the Federal Aviation 
Administration on the 9th day of May, 1984. On the 17th day of August, 1984, 
First National Bank, Cortez, Colorado, loaned Richard Walker and Verleen Walker 
the sum of $58,836.73, taking a security agreement in the same airplane and 
properly filing and recording on the 14th day of September, 1984, that security 
agreement with the Federal Aviation Administration. The airplane has been 
repossessed and sold. It is agreed that each party has properly recorded its 
mortgage and that FIBR is first in time and first recorded. The sole question 
presented is whether the prior recorded mortgage of FIBR securing all debts owed 
the bank secures the prior existing debt of August 7, 1981, in the amount of 
$77,605.63.

[¶48.]  The cases cited in the majority opinion 
are between a creditor and a borrowing debtor who claims that the parties did 
not intend that the security instrument be security for past existing debts. In 
those cases the general rule is that the intent of the parties control, and that 
is true whatever the form or designation of the instrument might be. Wyoming 
Discount Corp. v. Lamar, 
Wyo., 444 P.2d 620 (1968). If the 
intent of the parties was to provide security for past debts, the security 
instrument is held valid as providing such security. Thus it is 
said:

"The guiding principle in 
the construction of a `dragnet' clause in a mortgage is the determination of the 
intention of the parties. The question frequently resolves itself into whether, 
in view of the surrounding circumstances and the language employed in the 
mortgage, the parties intended the security of the mortgage to operate upon a 
pre-existing or subsequently created indebtedness not specifically described in 
the mortgage. Monroe County Bank v. Qualls (1929) 220 Ala. 499, 125 So. 615." 
Annot., Debts included in provision of mortgage purporting to cover unspecified 
future or existing debts ("dragnet" clause), 172 A.L.R. 1079, 1080 (1948). See 
also 55 Am.Jur.2d Mortgages §§ 137 and 142 (1971).

In this case 
there can be no question but that the parties to the security agreement, FIBR 
and the Walkers, intended that the security and pledge agreement secure the 
$7,328.35 being loaned and all amounts owed the bank at that time. Such intent 
is evidenced by the "x" marked in the box acknowledging the paragraph as 
applicable and initialing by the parties indicating agreement that the airplane 
be security for debts owed the bank. The intent of the parties is apparent on 
the face of the agreement and could not have been made more clear. Between the 
parties it is effective. An overwhelming majority of courts have upheld these 
clauses except where a contrary intention appears. In Frantz v. First National 
Bank & Trust Co. of Wyoming, Wyo., 687 P.2d 1159, 1162 (1984), we 
said:

"A security agreement is 
effective according to its terms between the parties and subsequent purchasers 
if properly perfected by filing. The subsequent purchasers are presumed to have 
notice and are, therefore, subject to the provisions of the 
agreement."

[¶49.]  This court acknowledged the validity of a 
provision in a security instrument securing other indebtedness in Lammey v. 
Producers Livestock Credit Corporation, Wyo., 463 P.2d 491 (1970), wherein the 
mortgage agreement provided security for other indebtedness that might arise or 
be created, and we held that the extension of a previous note and a note given 
for payment by the mortgagee of taxes and assessments constituted other 
indebtedness secured by the mortgage agreement.

[¶50.]  I would hold that the security and pledge 
agreement was effective between FIBR and the Walkers to provide a security 
interest in the airplane for past indebtedness because that was their intent; 
that the face of the security instrument clearly indicated the intent to secure 
a past indebtedness; that, as to third parties upon recording, the FIBR security 
agreement afforded a valid lien for past debts and, being first in time and 
first recorded, entitled FIBR to the first proceeds upon 
foreclosure.

[¶51.]  I find it anomalous that the majority 
opinion can accept as valid a dragnet clause that secures future indebtedness 
but is unable to acknowledge within the same clause an agreement to secure past 
indebtedness. With respect to future indebtedness, § 34-21-923(c), W.S. 1977 (§ 
9-204(3), UCC), provides:

"(c) Obligations covered 
by a security agreement may include future advances or other value whether or 
not the advances or value are given pursuant to commitment * * *."

The amount of 
future advances are unknown at the time the security instrument is executed. The 
amount of past debts owed are known. But what difference should that make? In 
this case, if instead of past indebtedness the debt had been a future advance, 
appellee would have prevailed. Appellant would have known no more about the 
amount of future debt owed, would have had a second lien and received nothing on 
foreclosure.

"According to the 
generally prevailing doctrine, advances made under a recorded mortgage given to 
secure future optional advances will not be denied priority in lien merely 
because the intervening encumbrancer could not have determined from the 
mortgage, without extraneous inquiry, the true amount of the indebtedness of 
advances secured thereby." 55 Am.Jur.2d Mortgages § 352 at 411 
(1971).

In either case, 
a second lender can only know from an examination of the security instrument 
that past and future indebtedness is secured and cannot know without further 
inquiry whether or not there exists past or future indebtedness. If there is a 
disadvantage, it is the same; why we should treat future indebtedness any 
differently than past indebtedness is difficult to understand. That is so even 
though past indebtedness can be ascertained.

[¶52.]  In passing, we must note that the filing 
with the federal aviation agency states:

"The security conveyance 
dated 4/6/84 covering the above collateral was recorded by the FAA Aircraft 
Registry on 5/8/84 as conveyance number H41379."

Appellant could 
have examined FIBR's mortgage on this airplane recorded with FAA and recorded in 
the Fremont County Clerk's office. Had they examined that document, they would 
have known that it contained a clause "x"ed as applicable and initialed by the 
Walkers agreeing that the airplane was security for past and future 
indebtedness. They would have known that making the loan upon this airplane 
might result in their having a second lien subject to a first lien of FIBR for 
past debts. This Colorado bank would have known that their lien would be second 
behind the first lien of FIBR. The New Mexico Supreme Court has held this to be 
the case. Clovis National Bank v. Harmon, 102 N.M. 166, 692 P.2d 1315 
(1984).

[¶53.]  The rule now adopted by this court, which 
invalidates the provision in a mortgage providing security for past 
indebtedness, stands alone among all the cases that have considered this 
question. That is true even of the Arkansas cases cited as authority for the 
majority opinion, for these cases concern only the rights between parties to the 
mortgage itself and do not deal with the rights of third-party lenders. 
Hendrickson v. Farmers' Bank & Trust Co., 189 Ark. 423, 73 S.W.2d 725 
(1934); Security Bank v. First Nat. Bank, 263 Ark. 525, 565 S.W.2d 623 (1978); National Bank of 
Eastern Arkansas v. General Mills, Inc., 283 F.2d 574 (8th Cir. 1960); Annot., Debts included in provision of mortgage 
purporting to cover all future and existing debts (dragnet clause) - modern 
status, 3 A.L.R.4th 690 (1981). The Arkansas cases give effect to the intent of 
the parties to the mortgage and secure past indebtedness if that intent is 
demonstrated by showing the amount of the past-due debt secured. I would hold 
the intent of the parties controlling, however demonstrated.

[¶54.]  I would affirm the decision of the 
district court.