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Money Store Investment Corp. v. Summers2/9/2005
e timely inquired as to why National City had failed to release its mortgages. Thus, it was Money Store's failure to take appropriate precautions to protect itself that led to its difficulty here. Because Money Store failed to avail itself of the resources available for its own protection and directs us to no evidence of any scheme by Summers' creditors to perpetrate fraud, we do not find that the trial court's order applying the dragnet clauses to be error on this basis.
Finally, Money Store argues that tacking Phillips' judgment to the assigned mortgages was error because pursuant to statute, a priority claim could be made for no more than $42,000. Money Store cites Indiana Code § 32-29-1-10 as limiting "to the maximum amount stated in the mortgage" for "future advances" the first mortgage holder's priority in the face of intervening mortgage liens. According to Money Store, only one of the mortgages contained a dragnet clause - the one executed on August 2, 1995 - which contained the mandatory statutory phrase "maximum amount of future advances." Money Store's Br. at 17. Thus, it asserts,
if National City had, on the date of its assignment to Phillips, made a new loan advance of $206,000 - the "new" amount Phillips seeks to add to the mortgages - such advance would have been entitled to priority over the intervening Money Store mortgage only to the extent of the $42,000.
Id.
The statute provides as follows:
(a) In addition to any other obligation secured by a mortgage, a mortgage may also secure (1) future obligations and advances up to the maximum amount stated in the mortgage . . . .
(b) The lien of a mortgage with respect to future advances, modifications, extensions, and renewals referred to in subsection (a) has a priority to which the mortgage otherwise would be entitled . . .
I.C. § 32-29-1-10. Courts are obliged to respect the plain language of a statute. Sholes v. Sholes, 760 N.E.2d 156, 159 (Ind. 2001). We find it would be a tortured construction to find that the statute gives lien priority only to the amount indicated in an express mortgage provision concerning future obligations, such as "future obligations and advances are limited to/cannot exceed ____." The plain meaning of the statute is that the mortgage may secure future obligations and advances up to the maximum amount stated in the mortgage, and that such future obligation would be secured at the same level of priority as the mortgage itself. The mortgages containing dragnet clauses specified a maximum mortgage amount of $42,000, $60,000, and $225,000 respectively. Thus, the statute does not bar tacking Phillips' judgment to the assigned mortgages.
2. Estoppel
Money Store claims that equitable estoppel bars Phillips' enforcement of the mortgages assigned to her by National City. Money Store begins from the premise that an assignee takes a mortgage subject to all the claims, equities and defenses available against the original mortgage holder, citing Egbert v. Egbert, 235 Ind. 405, 132 N.E.2d 910, 918 (1956). See also 20 I.L.E. Mortgages § 72 (2001). Money Store reminds us that National City's September 14, 2000 transmission to Harlan stated that its mortgages would be released upon payment of the amounts indicated. Money Store then asserts that it (1) "lacked knowledge or the means of knowing" that National City's mortgages might be claimed in the future to secure additional debt; (2) "relied on National City's promise to release its mortgages in exchange for the payoffs" indicated; and (3) "acted on its reliance by changing its position prejudicially" in that it advanced loans to Summers and Mangy Moose totaling more than $90
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