Opinion ID: 1138261
Heading Depth: 1
Heading Rank: 2

Heading: did the dragnet clause of the deed of trust on lot 44 secure the separate debts of p.o. beard?

Text: A properly executed and unambiguous dragnet clause in a deed of trust is enforceable according to its terms. Kelso v. McGowan, 604 So.2d 726, 729 (Miss. 1992); Trapp ex rel. First Miss. Bank of Commerce v. Tidwell, 418 So.2d 786, 787, 792 (Miss. 1982). A dragnet clause is enforceable when both parties have agreed to the clause, and there was no fraud in the making of the contract. Walters v. Merchants & Manufacturers Bank, 218 Miss. 777, 785, 67 So.2d 714, 717-18 (1953). In the absence of allegations of fraud or ambiguities, the clause should be construed as written to cover subsequent debts created by one of the joint mortgagors individually. Id. There is no requirement that the co-tenants have knowledge of the existence of other debts, or each others' consent to the creation of debt and the attendant lien against the property, in order for the dragnet clause to be enforceable. Newton County Bank v. Jones, 299 So.2d 215, 219-20 (Miss. 1974); Holland v. Bank of Lucedale, 204 So.2d 875, 877 (Miss. 1967). On November 23, 1982, Nancy and P.O. borrowed approximately $46,000 from Iuka and executed a deed of trust granting Lot 44 as security for the loan. The deed of trust contained a dragnet clause asserting that the instrument incorporated all past and future debts owed jointly or severally by Beard and her husband. The facts of this case demonstrate that the dragnet clause was mutually agreed upon through the loan process employed by Iuka. The clause was clearly written to encompass the debts which P.O. owed Iuka individually. As there are no allegations of fraud or ambiguities surrounding the contract, the dragnet clause in the deed of trust validly granted Lot 44 to Iuka as security for all past and future debts owed by the Beards jointly or individually. This effectively included the individual debts of P.O. which were outstanding even before the 1982 loan was extended. Nancy Beard concedes this issue; instead, she argues that the Lot 44 deed of trust containing the dragnet clause was modified by subsequent agreement.