First Security Bank of Utah v. Shiew

609 P.2d 952 (1980)

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First Security Bank of Utah v. Shiew

Utah Supreme Court
609 P.2d 952 (1980)

SC

Facts

Bill and Linda Shiew (defendants) owned a home subject to a mortgage held by the First Security Bank of Utah (the Bank) (plaintiff). The mortgage agreement contained a dragnet clause purporting to make the home security for any future debts the Shiews owed the Bank. The Shiews obtained fire insurance from the Utah Farm Bureau Insurance Company (Utah Farm) (defendant). Subsequently, the Shiews obtained a second loan from a different branch of the Bank for a cattle-raising business. The loan was secured by the Shiews’ cattle, including after-acquired cattle. The loan agreement stated it constituted the entire agreement between the parties; the agreement did not refer to the previously issued home loan. The Bank brought suit on the second loan, stating all of the cattle were disposed of but a deficiency remained. The suit did not mention the home loan but sought a money judgment to cover the deficiency. The home had been destroyed by fire, and Utah Farm had paid the insurance proceeds to Linda Shiew. The Bank added Utah Farm as a defendant and amended its complaint to seek those proceeds. The trial court found in favor of the Bank, awarding a judgment against Utah Farm and the Shiews. Utah Farm appealed.

Rule of Law

Issue

Holding and Reasoning (Maughan, J.)

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