Opinion ID: 1142570
Heading Depth: 1
Heading Rank: 1

Heading: priority of liens controlled by statute

Text: The majority contends that the 1985 loan by Credithrift, consisting of a new note and deed of trust, could be considered an advance under the 1981 deed of trust. This contention is not persuasive because the granting of the new loan in 1985, and the recording of a new deed of trust to secure the loan, by operation of law cancelled and extinguished the 1981 and 1983 deeds of trust, including the dragnet clauses therein contained; indeed, all rights thereunder were barred by operation of law. Mississippi has a wealth of statutes pertaining to the issues in this action, and such statutes dictate the result we must reach. One such statute provides: § 89-1-49. Payment extinguishes mortgage. Payment of the money secured by any mortgage or deed of trust shall extinguish it, and revest the title in the mortgagor as effectually as if reconveyed; except, however, that this section shall have no application to security agreements executed under the Mississippi Uniform Commercial Code nor to security interests created by such security agreements. SOURCES: Codes, 1880, § 1207; 1892, § 2452; 1906, § 2782; Hemingway's 1917, § 2286; 1930, § 2152; 1942, § 873; Laws, 1968, ch. 495, § 1, eff. from and after March 31, 1968. Miss. Code Ann. § 89-1-49 (Supp. 1991) (emphasis supplied). By the clear language of this statute, when the Gentrys paid off their 1981 loan by taking out a new loan in 1983, the 1981 deed of trust, including its dragnet clause, was extinguished as a matter of law, as effectually as if the property had been reconveyed. Again in 1985, when the Gentrys paid off their 1983 loan by taking out a new loan, the 1983 deed of trust, including its dragnet clause, was extinguished, as effectually as if the property had been reconveyed. Thus, by operation of law, the 1981 and 1983 deeds of trust were no longer in existence, having been completely extinguished at the time the loan each secured was paid off; therefore dragnet clauses in either of the two previous deeds of trust were likewise extinguished. The next pertinent statute provides: § 89-5-21. Satisfaction to be entered on the record. Any mortgagee or cestui que trust, or assignee of any mortgagee or cestui que trust, of real or personal estate, having received full payment of the money due by the mortgage or deed of trust, shall enter satisfaction upon the margin of the record of the mortgage or deed of trust, which entry shall be attested by the clerk of the chancery court and discharge and release the same, and shall bar all actions or suits brought thereon, and the title shall thereby revest in the grantor. And if such mortgagee or cestui que trust, or such assignee, by himself or his attorney, shall not, within one month after request, cancel on the record the said mortgage or deed of trust the beneficiary shall forfeit the sum of fifty dollars, which can be recovered by suit on the part of the party aggrieved, and if after request, he fails or refuses to make such acknowledgment of satisfaction, the person so neglecting or refusing shall forfeit and pay to the party aggrieved any sum not exceeding the mortgage money, to be recovered by action; but such entry of satisfaction may be made by anyone authorized to do it by the written authorization of the mortgagee or beneficiary, duly acknowledged and recorded, and shall have the same effect as if done by the mortgagee or beneficiary. SOURCES: Codes, Hutchinson's 1848, ch. 42, art. 1 (33, 34); 1857, ch. 36, art. 14; 1871, § 2297; 1880, § 1206; 1892, § 2451; 1906, § 2781; Hemingway's 1917, § 2285; 1930, § 2155; 1942, § 876; Laws, 1948, ch. 233, § 1. Miss. Code Ann. § 89-5-21 (Supp. 1991) (emphasis supplied). Thus the position Credithrift urges today was completely barred, and the title to the property revested in the Gentrys, the grantors, as a matter of law. Section 89-1-49 is self-executing, and § 89-5-21 further states that all actions are barred thereon, and provides for forfeiture against Credithrift for failure to cancel. It is elementary that a judgment duly obtained and timely recorded shall be a lien upon all property of the Gentrys within the county where so enrolled, from the date of rendition thereof, and shall have priority according to the order of such enrollment, as provided for by statute: § 11-7-191. Lien of enrolled judgment. A judgment so enrolled shall be a lien upon and bind all the property of the defendant within the county where so enrolled, from the rendition thereof, and shall have priority according to the order of such enrollment, in favor of the judgment creditor, his representatives or assigns, against the judgment debtor and all persons claiming the property under him after the rendition of the judgment ... Miss. Code Ann. § 11-7-191 (Supp. 1991) (emphasis supplied). Thus the chancellor erred when he held that the dragnet clause in the 1981 deed of trust was effective when in fact it had been completely extinguished by operation of law, Miss. Code Ann. § 89-1-49 (Supp. 1991).