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UNIFIRST FEDERAL SAVINGS AND LOAN ASSOCIATION and TOM B. SCOTT, III, TRUSTEE v. TOWER LOAN OF MISSISSIPPI

MAY 11, 1988

UNIFIRST FEDERAL SAVINGS AND LOAN ASSOCIATION and TOM B. SCOTT, III, TRUSTEE
v.
TOWER LOAN OF MISSISSIPPI, INC.



GRIFFIN, JUSTICE, DISSENTING TO DENIAL OF PETITION FOR REHEARING:

With deference, I respectfully dissent to the denial of the Petition for Rehearing.

On August 22, 1977, Mickey and Marilyn Ellzey executed a deed of trust, which listed Unifirst Federal Savings & Loan Association as the lender. The agreement read in part:

17. Transfer of the Property; Assumption. If all or any part of the Property or an interest therein is sold or transferred by Borrower without Lender's prior written consent, excluding (a) the creation of a lien or encumbrance subordinate to this Deed of Trust, (b) the creation of a purchase money security interest for household appliances, (c) a transfer by devise, descent or by operation of law upon the death of a joint tenant or (d) the grant of any leasehold interest of three years or less not containing an option to purchase, Lender may, at Lender's option, declare all the sums secured by this Deed of Trust to be immediately due and payable. (emphasis added)

 The majority, citing 12 C.F.R. 591.2 (b) (1984), now attempts to define the words "sold or transferred:"

 [A]ny conveyance of the real property held in

 trust or any right, title or interest therein, whether legal or equitable, whether voluntary or involuntary, by outright sale, deed, contract, leasehold, option or judicial foreclosure, private power of sale foreclosure, enforcement of any other lien or encumbrance, or any other forced sale or any other method of conveyance.

 The majority concludes that such a definition does not include the "granting of a lien, encumbrance or other security interest," but does include "enforcement, execution, or foreclosure of any such lien." (emphasis in the original).

 Significantly, 12 C.F.R. 591.2 (b) makes no such distinction between the grant and enforcement of a subordinate security interest; *fn1 rather, the majority, though admitting that the deed of trust's terms are "privately made law which may be enforced according to its tenor," imposes an artificial distinction between the grant and enforcement of a security interest, oblivious to the words that Unifirst chose to define its rights. *fn2

 In particular, the deed of trust held that the creation of a lien or subordinate encumbrance was an exception to the agreement's provision requiring Unifirst's prior written consent to any sale or transfer of the property. Regardless then of whether the majority now opines that the grant of a security interest fails to constitute a sale or transfer, it is clear that Unifirst and the Ellzeys understood it as such. *fn3

 Previously, this Court has required "clear and unequivocal" contract language to permit the acceleration of debt; consequently, if there is reasonable doubt concerning the contract's meaning, there is a preference against the acceleration of debt. Boatright v. Horton, 227 Miss. 698, 708-9, 86 So.2d 864, 868 (1956). See also, Frey v. Abdo, 441 So.2d 1383, 1385 (Miss. 1983). In this case, the chancellor found that the terms of the acceleration clause were not met. We who dissent agree. Obviously then, the contract's meaning is neither clear nor unequivocal, since there is reasonable doubt about its meaning.

 In addition, the record reveals that Unifirst accepted payments, totalling $3,997.38, from Tower Loan after Tower Loan's foreclosure on the property. Miss. Code Ann. 89-1-59 (Supp. 1987) reads,

 Where there is a series of notes or installment payments secured by a deed of trust, mortgage or other lien, and a provision is inserted in such instrument to secure them to the effect that upon a failure to pay any one (1) note or installment, or the interest thereon, or any part thereof, or for failure to pay taxes or insurance premiums on the property described in such instrument and the subject of such lien, that all the debt secured thereby should become due and collectible, and for any such reason the entire indebtedness shall have been put in default or declared due, the debtor, or any interested party, may at any time before a sale be made under the terms and provisions of such instrument, or by virtue of such lien, stop a threatened sale under the powers contained in such instrument or stop any proceeding in any court to enforce such lien by paying the amount of the note or installment then due or past due by its terms, with all accrued costs, attorneys' fees and trustees' fees on the amount actually past due by the terms of such instrument or lien, rather than the amount accelerated, and such taxes or insurance premiums due and not paid, with proper interest thereon, if such should have proper interest thereon, if such should have been paid by any interested party to such instrument. Any such payment or payments s reinstate, according to the terms of such instrument, the amount so accelerated, the same as if such amount not due by its terms had not been accelerated or put in default. (emphasis added)

 Tower Loan's payments to Unifirst included the amount past due, accrued costs, and attorney's fees. Therefore, Tower Loan, as an "interested party to such instrument," reinstated the debt under the statute.

 Finally, the majority notes that the law "allows a first mortgage lender to prohibit sale or transfer of the collateral without consent." Here, Unifirst expressly created an exception to this rule, allowing the Ellzeys to execute a second deed of trust on the property. As Chancellor Barnett stated in his opinion below: "[I]t would mean very little for the owner of the property to have the right to ...


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