Case Name: NEWTON COUNTY BANK, LOUIN BRANCH OFFICE and B. T. (Jack) Amos v. Myrtis JONES
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1974-08-26
Citations: 299 So. 2d 215
Docket Number: No. 47381
Parties: NEWTON COUNTY BANK, LOUIN BRANCH OFFICE and B. T. (Jack) Amos v. Myrtis JONES.
Judges: RODGERS, P. J., and INZER, SMITH and SUGG, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 299
Pages: 215–225

Head Matter:
NEWTON COUNTY BANK, LOUIN BRANCH OFFICE and B. T. (Jack) Amos v. Myrtis JONES.
No. 47381.
Supreme Court of Mississippi.
Aug. 26, 1974.
Wells, Gerald, Brand, Watters & Cox, Jackson, B. T. Amos, Bay Springs, Scott P. Hemleben, Jackson, for appellants.
John M. Sims, Heidelberg, Paul G. Swartzfager, Laurel, for appellee.

Opinion:
BROOM, Justice:
Previously a majority of the court affirmed the decision of the Chancery Court of Jasper County. On petition for rehearing an opposite result was reached, and the former opinion of the court is withdrawn.
This is an appeal from a final decree of the Chancery Court of Jasper County which permanently enjoined appellant, Newton County Bank (Louin Branch), from foreclosing its deed of trust on homestead land of appellee, Mrs. Myrtis Jones. We now reverse and render.
Mrs. Myrtis Jones, the appellee, owned the fee simple title to the land in controversy. Her husband had only a homestead interest. She and he contemporaneously executed the deed of trust contract dated November 4, 1968 which stated that it would secure the original indebtedness in a specific sum. The instrument further stated in obvious, clear and unambiguous language that its purpose was:
[Fjurther to secure all loans and advances which Beneficiary has made or may hereafter make to the Grantor, or any one of them. (Emphasis added.)
Subsequently the bank made additional advances to the husband who gave additional security on cows allegedly owned by him. The cows were missing when the bank sought to replevy them. In obtaining the advances Mrs. Jones' husband acted alone and independently of further participation or knowledge on her part. Default was made in payment -of the indebtedness. The bank sought to foreclose its deed of trust against the land, but the lower court enjoined the foreclosure proceedings.
The decisive question before us is whether or not competent spouses may by a contemporaneously executed deed of trust contract permit the lien thereby created to be enlarged when one of such spouses procures a subsequent advance or additional loan from the beneficiary (lender) designated in the deed of trust contract. We conclude that Mrs. Jones, her husband, and the bank contracted in such a way in this case. This conclusion is clearly consistent with a long line of decisions rendered by this Court beginning in 1882. To rule otherwise now would in effect put attorneys, borrowers, and lenders on notice that no longer may they use as a dependable guide our published decisions which have not been overruled. With this in mind, reference is made to several cases wherein the court has spoken to the question before us.
In the early case of Smith v. Scherck, 60 Miss. 491 (1882), the court recognized that where a wife joins with her husband in executing a deed of trust on homestead property to secure a debt due by him, he, acting alone, may make a new promise before the debt is barred by the statute of limitations, and establish a new period for both the debt and the security to run. Similar interpretations of contractual rights in spouses occupying homestead property are noted in the following cases: McFarlane v. Plant, 185 Miss. 616, 188 So. 530 (1939); Herron v. Land, 151 Miss. 893, 119 So. 823 (1929).
In Walters v. Merchants & Manufacturers Bank of Ellisville, 218 Miss. 777, 67 So. 2d 714 (1953) the court held that a "dragnet clause," similar to the one in this case, which is clear and unambiguous in a deed of trust may cover subsequent loans made to either grantor (one) and is enforceable. In that case the facts were not significantly different from facts now before us although the court said in the subsequent case of Hudson v. Bank of Leakesville, 249 So.2d 371 (Miss.1971) that Walters, supra, "was not decided upon the theory of an increased encumbrance of the homestead by one of the parties, and that this question remains undecided by any decision of this Court." The quoted dictum from Hudson, supra, was not necessary to the decision there, which dealt with facts not similar to the instant case. Examination of Walters, supra, reveals that the lands involved therein which constituted the security were "the homestead of appellants." At different places in the Walters opinion, the court noted and pointed out the homestead feature of the case which dealt with reformation of a land description. In that case (as in the case at bar) the subsequent notes were signed by only the husband. The court ruled that the homestead property of the parties was encumbered by the deed of trust to the extent of the total indebtedness which included the additional loans obtained by the husband acting independently of his wife. Walters said:
. The dragnet clause here involved expressly covers "any and all debts that the said grantors or either of them may incur with or owe to the said beneficiary, . . . . " The parties clearly agreed that it would secure debts incurred by both of them and by either of them. No fraud is shown, and under the contract and the decisions we must enforce the provision as written. Limitations if any upon the use of that clause must stem from the Legislature and not from this Court. (218 Miss, at 784-785, 67 So.2d at 717-718.)
The clear thesis of Walters was to allow enlargement of the original deed of trust lien, though on homestead property, by subsequent action of the husband alone when he obtained additional money. Careful study of Mississippi Code Annotated sections 85-3-21, 85-3-45, 89-1-29 and 89-1-31 (1972) does not reveal that the Legislature intended to preclude spouses from jointly entering into a bargain and executing a deed of trust or contract encumbering homestead property owned by the wife, and incorporating within such instrument a "dragnet clause." The statutes simply require that such instrument be executed by both spouses. This was done by Mr. and Mrs. Jones. Of course, the original deed of trust under section 89 — 1— 31 would not be valid unless signed and acknowledged by the wife in cases where she is the owner. Also, under section 89-1-29 the wife of an owner of homestead property must sign deeds of trust, et cetera, executed by her husband (the owner), before the conveyance or encumbrance thereon is valid.
Our decision here is not contrary to Hudson v. Bank of Leakesville, supra. Hudson held that the dragnet clause could not include an indebtedness (for a chain saw) of one of the grantors in a deed of trust made to a third party (not the original lender) subsequent to the original deed of trust. Also pertinent is the case of Davis v. Crawford, 175 Miss. 493, 168 So. 261 (1936). There the court held that the additional advances were not covered by a deed of trust on homestead property. The reason for so holding was that the "dragnet clause" contained in the deed of trust of that case did not consist of language sufficiently clear to secure additional indebtednesses made to "either" of the grantors. In Davis the "dragnet clause" provided that the deed of trust would secure payment of the original indebtedness plus any further amounts that "may be advanced to them." (Emphasis added.) The plural term "them" indicated that both spouses would have to consent to any future enlargement of the deed of trust lien. Language used by the court in the Davis opinion clearly indicates that additional future advances would have been secured by the deed of trust if the "dragnet clause" had said advances would be covered if made to ONE of them rather than "to them."
The deed of trust before us explicitly states that its purpose was "to secure all loans and advances which the beneficiary has made or may hereafter make to the grantor, or any one of them" (emphasis added). Whoever originally composed it was obviously relying upon and tracking what the court said in Davis and Walters, supra. The quoted language is sufficiently clear and in such unambiguous and unmistakeable terms as to contemplate and secure additional "loans" obtained from the bank by Mr. Jones alone. Although Mr. Jones may not have acted prudently or in the best interest of himself or his wife when he incurred the additional indebted-nesses, the compelling legal aspect is that his action was precisely what she bargained for and contractually authorized him to do. Both spouses, being legally competent, had the right to jointly enter into the deed of trust contract which included the "dragnet clause." Mrs. Jones should not be allowed to escape the consequences she risked when she became signatory to such a contract. Such a clause as attacked here is not contrary to any statute cited. When inserted in a deed of trust, such a clause operates as a convenience and an accommodation to borrowing spouses. It makes available additional funds without both having to execute additional security documents, thereby saving time, travel, loan closing costs, costs of extra legal services, recording fees, et cetera.
When Mr. Jones alone obtained the advances or loans and signed promissory notes therefor he pledged certain cattle as additional security. Argument is asserted that when the cattle were treated as security for the advances, the bank in some manner surrendered or waived its security originally provided by means of the deed of trust. We are unable to find any fact in the record or any applicable legal authority whatever to support any theory that the bank lost, forfeited, gave up or waived any of its security granted it by the deed of trust. The additional security (cows which are mysteriously missing) does not defeat or operate in derogation of the clear and unambiguous language of the deed of trust.
Here Mrs. Jones reposed in her husband trust and confidence which resulted in her willingness to make the bargain evidenced by the deed of trust. In this manner she contractually allowed Mr. Jones to use her credit (secured by her property). Having bargained and contracted as she did, it would be unconscionable for us to hold that her land does not secure the funds loaned by the bank in reliance upon the contract. No charge or suggestion was made that the bank was the aggressor or that Mrs. Jones fell victim to a loan shark who defrauded or overreached her in any manner. She and her husband requested the original loan which was made on the expressed provision that it would be secured by the deed of trust. They covenanted with the bank that either of them could individually enlarge the deed of trust lien as was done. This Court rightly follows the rule that our statutes on homestead and exempt property should be "liberally" construed in favor of the exemptionist. Biggs v. Roberts, 237 Miss. 406, 115 So.2d 151 (1959). Creditors were warned in the Biggs decision "that the homestead is sacred ground," but in the same decision is the admonishment that the statutes directed at homesteads are "to be construed sensibly. . . . " Such a construction here does not permit the court to judicially amend the homestead statutes retroactively and thereby deny the appellant its right of foreclosure created by contract.
Applicable here is language found in Adkinson and Bacot Company v. Varnado, 91 Miss. 825, 47 So. 113 (1908) which dealt with homestead laws of this state. In discussing a mortgage under attack the court said that the husband and wife "had perfect liberty and freedom . to execute the mortgage or not."
The court later on in its opinion in that case said that the two spouses there "have by their own voluntary, solemn contract, founded on a valuable consideration, bargained away their homestead."
It was argued that for us to uphold the "dragnet clause" here would be to erode the homestead and allow the husband to do indirectly what he could not do directly. Such is not a valid argument because, in upholding the clause, we simply uphold a solemn contract, explicit in its terms. Mrs. Jones not only consented to it, but by means of it she affirmatively directed that her husband be authorized to enlarge the deed of trust security. By the contract, she assented to and ratified the contemplated additional loans. The parties complied with applicable statutes on homestead and exempt property and, as was said in the Adkinson case, supra, "bargained away" the homestead. Had it been Mrs. Jones' intent to limit the authority of her husband in any particular, she could have done so by appropriate language. She could have restricted his authority as to the amount, purpose, or use of additional funds, but no such restriction is before us.
Argument was also made that the exact total amount of a deed of trust lien must be fixed in the instrument creating the lien, and that any increase must be contemporaneously agreed upon and assented to by both spouses where homestead property is involved. Such increase may be assented to in advance as done here. In this manner both spouses frequently contract by clear language in deeds of trust or mortgages that the beneficiary (lender) may in the future pay taxes or insurance on their property if the borrowers fail to do so, or even make reasonable repairs to (if deemed necessary by the lender) the dwelling house on homestead property. The amounts or exact cost of such items cannot be ascertained at the time the deed of trust is executed. Such matters, as well as contemplated additional loans or advances, are subject to contract contemporaneously executed by both spouses as was done in this case.
We are unwilling to follow cases cited from foreign jurisdictions in order to read into Mississippi statutes unexpressed prohibitions. To follow such cases would in effect ignore the thread of prior well reasoned decisions of this Court which told borrowers, lenders, attorneys and the general public that "dragnet clauses" would be enforceable if properly executed and stated in clear and unambiguous language. The clause before us is not lacking in clarity in any respect. It clearly conforms to what the court said in Walters, Davis, and Adkinson, supra, and is not violative of any statute. Accordingly, we reverse the decree appealed from.
Reversed and rendered.
RODGERS, P. J., and INZER, SMITH and SUGG, JJ., concur.