Opinion ID: 1142570
Heading Depth: 1
Heading Rank: 4

Heading: erroneous assumption made

Text: The majority makes several arguments which do not apply to the case at bar. First, the majority makes this mistaken assumption: it is apparent Credithrift regarded the refinancing of July, 1983, as a `renewal of the [original] indebtedness' pursuant to the dragnet clause of the April 8, 1981, deed of trust. Later, regarding the 1985 deed of trust, it is stated: Credithrift again regarded the renewal and advance as within the dragnet clause of the 1981 deed of trust which it in no way cancelled or released, although it did take the precaution of a new deed of trust. The record does not indicate that Credithrift regarded its refinancing as renewals of prior deeds of trust; indeed, the record indicates that Credithrift thought just the opposite, that each time the Gentrys borrowed new money, they were required to pay off their prior note, to sign a new note and deed of trust in favor of Credithrift, and each new deed of trust was duly recorded. Richard D. Scott, manager of Credithrift, appeared as the only witness in the trial below. On cross-examination by Shutze's attorney, Scott testified: Q: Would you ever close a loan, say if you had a judgment on the Judgment Roll, and you knew it was there, would you close the loan anyway? A: (by Scott:) No. Transcript, vol. 2, p. 11. This testimony demonstrates that the parties regarded the 1981 and 1983 deeds of trust as extinguished and cancelled. If the 1985 loan had been secured by the 1981 deed of trust, Manager Scott would have had no reason to let the 1984 Shutze lien prevent him from making a new loan to the Gentrys. But even if, for the sake of argument, the 1981 note securing the 1981 deed of trust had not been paid, and if the 1983 and 1985 loans had been made, Shutze would still prevail (1) because the dragnet clause in the 1981 deed of trust was optional rather than obligatory; and (2) because of the intentions of the parties regarding the 1981 dragnet clause. A dragnet clause should not be given effect if it does not appear that the debt's inclusion in a deed of trust was intended or contemplated by the parties ... (T)he most important element for a Court to determine is: What was the intention of the parties when they executed these various instruments? Matter of Ladner, 50 B.R. 85, 91 (Bankr.S.D.Miss. 1985); Mohler v. Buena Vista Bank & Trust Co., 42 Colo. App. 4, 588 P.2d 894 (1978); United States v. American National Bank, 255 F.2d 504 (5th Cir.1958), cert. denied, 358 U.S. 835, 79 S.Ct. 58, 3 L.Ed.2d 72, rehearing denied, 359 U.S. 1006, 79 S.Ct. 1135, 3 L.Ed.2d 1034. It is elementary that we will construe a dragnet clause most strongly against the drafter/lender. Trapp v. Tidwell, 418 So.2d 786, 792 (Miss. 1982), citing Williams v. Life Ins. Co. of Georgia, 367 So.2d 922 (Miss. 1979). The 1983 and 1985 deeds of trust made no references or other attempts to relate back to, as renewals of, or as future advances under, the 1981 deed of trust. This further evidences the fact that Credithrift regarded the prior deeds of trust as being cancelled upon payment of the underlying debts in 1983 and 1985.