Opinion ID: 1387897
Heading Depth: 2
Heading Rank: 1

Heading: release agreement

Text: United argues that the judge erred in finding that First Equity was entitled to a release of the lots as requested. United contends that paragraph A of the release portion of the mortgage (set forth above) could only be construed to mean that release would occur on a per lot as opposed to a per acre basis. United further contends that the per lot release was to be based on the second subdivided plan as prepared by Properties setting forth 78 lots as opposed to First Equity's plan setting forth 101 lots. First Equity contends that the release provisions provided a price per acre on which any release was to be valued and that the release included nothing to indicate that it was restricted to a per lot basis pursuant to the second plan. United contends that allowing release through a valuation on a per acre basis would have resulted in impairment of its security interest because the land for which First Equity sought release was the more desirable street front acreage, leaving the less desirable rear lots as the only remaining collateral. Accordingly, United asserts that it rightfully withheld release. While security agreements are for the benefit of the mortgagee, partial release agreements are for the benefit of the mortgagor. Lambert v. Jones , 540 S.W. (2d) 256, 259 (Tenn. App. 1976). [Such] clauses are bargained for by the borrower and are paid for by him in one manner or the other. Therefore, [there is] no reason ... for such clauses to be construed as if they were designed to protect the lender. Id. If a mortgagee intends to retain control over the parcels selected for release, additional words indicating that intention should be set forth in the agreement. Leisure Campground & Country Club Limited Partnership v. Leisure Estates , 280 Md. 220, 228, 372 A. (2d) 595, 600 (Md. App. 1977). When, however, the release is silent as to which party may select parcels to be released, it is implied that the mortgagor has this right. Here, the release agreement did not provide United with authority to choose which lots were acceptable for release. Further, the agreement did not include any reference to a particular subdivision plan. The right to select lots for release belonged to First Equity. Further, we are not persuaded by United's argument that it had a right to refuse release on the basis of impairment of its collateral. Even accepting this as a viable defense, United failed to introduce evidence to support this claim because it introduced nothing to show that the remaining lots were not saleable or lacked value. We hold that the release provision, which was not drafted on a per lot as opposed to a per acre basis, and which included no restriction on release, nor reserved power in United to choose lots to be released, entitled First Equity to release of the lots as requested.