WPC$ +RsRl$,CK,b?d҂1 |QErRP̲_D܅Lx %b|2HE8\;>ryQ60x_;\y˅X pRv -ެxFő:@1T\hV8 j@ScDPjiN^Q+WޖN{'w2GTvpBBu>`)`h2 wW'qZ6v+y))2 $}ErVZf28,(ps7G{%xݣ~{;xapꎊ*x;n90qO3$`P37(ӝ@$Cl||Oa+Y_bU!9GI yAk[M?.f)Pz6!N:)\3p$,W&CV[ŻaZ/77, b %\^ b 0nUCNwD4H\ zk m U!N  7    0 DONKJE*#,rV**Y00000000000000000b 0  B| | 0 D3=! D-p! 0K!! AS!;" 0# 0D# A#H*-s (`$.8dd8    ("  Z6Times New Roman Regular|&- ;`3|x C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt U(9 Z6Times New Roman Regular  R$$      6    _Thepartiesstipulatedthatthetrusteeinthefirstdeedoftrustsenttheholder/seconddeedoftrustacopyof  thenotice.Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5(#$  0   A R$$      1    _ Acreditagreementormortgageisforcommercialpurposes,whichisenteredinto:(1)Byanindividual,  partnership,trust,corporation,orotherlegalentitythatisengagedinbusinessoragriculturalendeavors;and(2)Solely t inordertofinancesuchendeavors._T.C.A._ԀXTXԀ#XXT#4728101(b)(1)(2). @ R$$      2    _Theremaybeotherreasonswhythefirstdeedoftrustisnotanopenendmortgage.See,e.g.,_T.C.A._Ԁ4728  101(10)(A)(C).Havingfoundthatthefirstdeedoftrustfailstoqualifyasanopenendmortgagebecauseitsecuresa t  commercialloan,wedonotfinditnecessarytodelveintothemeaningofa revolvingcreditagreement. Id .HP LaserJet 40500 { R$$      4    _Aspertinenttothefactsofthiscase,_T.C.A._ԀXTXԀ#XXT#4728101(6)definesan obligatoryadvanceas    8 ` anadvancewhichthecreditorisrequiredtomakebyagreementwiththeborrower, ` whetherornotasubsequenteventbeyondthecontrolofthecreditormayallowthe $t creditortocanceltheobligationtomakesuchadvance. R$$      7    _Thepropertysoldconsistedofsubdivisionlots. L R$$      8    _Obviouslythisisamistake.ThedebtwasthatoftheCoxes.Theparties,ineffect,stipulatedthatthiserror  wasnotmaterialandnotfatallydefectiveunderthefactsofthiscase.  R$$      3    _Whilenotcontrollingasamatteroflaw,thetitlegivenbytheCodeCommissiontoChapter28ofTitle47!   OpenendMortgagesandMortgagesSecuringFutureAdvances!clearlysuggeststhatChapter28dealswithmore t thanopenendmortgages. O R$$      5    _Initsbrief,theholder/seconddeedoftrustassertsthattheholder/firstdeedoftrust neverdeniedithadactual  noticeoftheseconddeedoftrust...priorto...makingthesubsequentnewloan...to[theCoxes].Wearenotsurewhat t theappelleemeanswhenitsays neverdenied.Isthisthesameassayingtheappellantagreedthatitknewofthe 8 existenceoftheseconddeedoftrust?Wedonotbelievethisiswhattheappelleeissaying.Furthermore,itisnotclear L whethertheappelleeisreferringtothetypeof actualnoticecontemplatedby_T.C.A._Ԁ4728103(c).Inanyevent,  therecorddoesnotshow actualnoticeandassertionsinbriefsdonotconstitutefactsthatwecanconsideronappeal.   Davisv.Hall ,920S.W.2d213,216(Tenn.Ct.App.1995).- -(|G2$$ !.8dd8         0   d(|3r$ !.8dd8     VVVV'dxd)!dxdx( $ Figure  1  ^_X`YE<<CLevel 1Level 2Level 3Level 4Level 5(|3r$ !.8dd8     ($$   1  X[Z&OLE 2.0 Box <=8C HKKKK !.8dd8     _  8TXXdd8  @ INTHECOURTOFAPPEALSOFTENNESSEE  @WW$ATKNOXVILLE# #Ԉ &   June27,2002Session L XTX #XXT#HOMEFEDERALBANK,FSB,OF_MIDDLESBORO_,KENTUCKYv. J FIRSTNATIONALBANKOF_LAFOLLETTE_,TENNESSEE,etal.XTX   ^ @@ AppealfromtheChanceryCourtforCampbellCounty  ^ @@No.15,421BillyJoeWhite,Chancellor  J FILEDSEPTEMBER10,2002 "  @@*AV) ` dE<` A   @@TTNo.E200102860_COA_ԄR3CV   AV) ` dE<` A       XTXXXTInthiscaseoffirstimpression,weareaskedtodeterminetheprioritybetween(1)afirstdeedoftrust  on12.58acresoflandinCampbellCounty!withasocalleddragnetclause!securingafully x advancedatinceptioncommercialloanof$235,040and(2)aseconddeedoftrustonthesame d property.Thefocusofthepartiesdisputeisupontheproceedsremainingfromaforeclosuresale P underthefirstdeedoftrustafterallobligationsrelatingtotheoriginalcommercialloanof$235,040 < hadbeenpaidinfull.Theholderofthefirstdeedoftrustclaimsthatitisentitledtoapplythese (x remainingproceedstopartiallysatisfyaseparatecommercialdebtowedtothebeneficiaryofthefirst d deedoftrust,whichdebtwasincurredaftertheseconddeedoftrustwasrecorded.Theholderof P theseconddeedoftrustdisagrees;itclaimsprioritytotheseremainingfundsbyvirtueofitsdeed < oftrust.Thetrialcourtfoundthattheobligationsecuredbytheseconddeedoftrusthaspriorityover ( thesubsequentdebt,whichdebtadmittedlyfallsunderthelanguageofthefirstdeedoftrusts  dragnetclause.Thetrialcourtalsofoundthatthenoticeoftrusteessalepublishedinconnection  withtheforeclosureonthesubjectpropertybytheholderofthefirstdeedoftrustwasdeficient.The  courtwentontoawardthebeneficiaryoftheseconddeedoftrust$30,931.85,beingthebalanceof  theproceedsfromtheforeclosuresaleafterthebeneficiaryofthefirstdeedoftrusthadbeenfully t  paidforallmoniesdueitinconnectionwiththeoriginalindebtednessof$235,040.Theholderof `!  thefirstdeedoftrustappeals,challengingbothofthetrialcourtsholdings.Theholderofthesecond L"! deedoftrust,ontheotherhand,arguesthatthetrialcourterredinrefusingtoawardprejudgment 8#" interest.Wevacatethetrialcourtsjudgmentandremandforfurtherproceedings.#XTXX XTF##XXT#XTX $$t# : Tenn.R.App.P.3AppealasofRight;JudgmentoftheChanceryCourt %L!% Vacated;CaseRemanded  &8"&   #XT#XTX.CharlesD.Susano,Jr.,J.,deliveredtheopinionofthecourt,inwhichHoustonM._Goddard_, ($( _P.J._,andD.MichaelSwiney,J.,joined. )$) C.Mark_Troutman_,_LaFollette_,Tennessee,fortheappellants,FirstNationalBankof_LaFollette_, +&+ TennesseeandC.Mark_Troutman_. p,',  \-(- JosephG._Coker_,_Jacksboro_,Tennessee,fortheappellees,HomeFederalBank,FSB,of  _Middlesboro_,Kentucky.  ~ OPINION #XXT#XTX t I. L  #XXT@#  XTX   XTXXXTAttrial,thepartiesstipulatedallofthematerialfacts.Thus,theonlyquestionsbeforeus $ t pertaintolegalissues. [_A]ppellate_Ԁcourtsreviewatrialcourtsresolutionoflegalissueswithout  ` apresumptionofcorrectnessandreachtheirownindependentconclusionsregardingtheseissues.  L   Rawlingsv.JohnHancockMut.LifeIns.Co .,78S.W.3d291,296(Tenn.Ct.App.2001).  8    OnDecember9,1997,RaymondL.Coxandhiswife,ElaineM.Cox,executedadeedof   trust( firstdeedoftrust)toC.Mark_Troutman_,trustee,securingpaymentofapromissorynoteto   FirstNationalBankof_LaFollette_,Tennessee( holder/firstdeedoftrust)intheprincipalamount   of$235,040.ThedeedoftrusttransferredintrusttheCoxes12.58acresknownasAlpineManor   subdivision.Thefullamountofthe$235,040loanwasdisbursedtoorforthebenefitoftheCoxes p onDecember8,1997.ThedeedoftrustwasrecordedintheofficeoftheCampbellCountyRegister \ ofDeedsonDecember10,1997. H   Aspertinenttotheissuesinthiscase,thefirstdeedoftrustcontainsthefollowinglanguage:  p   8 ` ...thisconveyanceismadeINTRUSTtosecurethefull,promptand H finalpaymentofanyandallindebtedness,principal,interest, 4 attorneysfeesandcosts,asmaybeprovidedininstruments   evidencingsuchindebtedness,orotherwise,noworhereafterowing   directlyorindirectly,or,asendorserorguarantorforotherstoFirst  NationalBank,hereinaftercalled Beneficiary,its(their)successors  andassigns,bytheundersigned,oranyofthem,andspecificallyfor,  butnotlimitedto,thefollowingpurpose,towit:Whereas,Raymond l L.Coxandwife,ElaineM.Cox,hereinaftercalled _Obligor_(s),are X  indebtedtotheBeneficiaryinthesumofTWOHUNDREDTHIRTY D! FIVETHOUSANDFORTYDOLLARSANDNO/100 0"  ($235,040.00)Dollars,evidencedbyONEpromissorynote(s) #l! describedasfollows:NOTEDATED12597FUNDED12897TO $X" BEPAIDINONEPAYMENTOFALLOUTSTANDING $D # PRINCIPALPLUSALLACCRUEDINTERESTONDECEMBER %0!$ 8,1998.TOPAYREGULARQUARTERLYPAYMENTSOF &"% ACCRUEDINTERESTBEGINNINGMARCH8,1998ANDALL '#& SUBSEQUENTINTERESTPAYMENTSAREDUEONTHE (#' SAMEDAYOFEACHQUARTERAFTERTHAT.THIS )$( INSTRUMENTINCLUDESANYRENEWALS,PARTSOF |*%) RENEWALS,OREXTENSIONS.h+&*` x` x Ї@%***    8 ` ThemaximumprincipalindebtednessforTennesseeRecordingTax  Purposesis$235,040.00.t` x` x   8 ` Now,if_Obligor_(s)shallpaythesum(s)aforesaidwhendue, L  accordingtothetermsofsaidnote(s)and/oranyandallrenewals, 8  modificationsandextensionsthereof,andanyotherdebtordebts $ t hereinsecured,thenthisinstrumentistobeofnofurtherforceor  ` effect. L ` x` x @%*** $    8 ` Incaseofsaleand/oranydefaultunderthisdeedoftrust,the   proceedscollectedshallbeappliedbytheTrusteeasfollows: ` x` x @%*** p   8 ` SecondTopaysaiddebtordebts,oranybalanceorbalancesthereof H thenremainingunpaid,includingallchargesthereon.4` x` x (Capitalizationinoriginal;emphasisadded).Theholder/firstdeedoftrustwasnotobligatedto  \ extendanyadditionalcredittotheCoxes,norweretheCoxesobligatedtoborrowanyadditional H fundsfromthebank. 4    `   Thepartiesstipulatedthefollowingwithrespecttothefirstdeedoftrust:     8 ` [it]isnotanopenendedDeedofTrustorotherinstrumentproviding  forfutureadvancesassetforthunder[#XTXX XT#_T.C.A._Ԁ]4728101at7.  Now,thatsthestatuteandgroupofstatutesthatdealwithopen l endedmortgagesandDeedsofTrustwhichareonresidential X  property XTXXXT.Itdoesnotrelatetocommercialproperty.Theremaybe D! somesimilarities,butthosestatutesarenotapplicableinthis 0"  situation.Weveagreedtostipulatethat.#l!` x` x @%*** $D #   8 ` Thiscaseisnotaboutanyrightsthatthedefendantswouldclaim &"% under[#XTXX XT](#_T.C.A._Ԁ] XTXXXTԀ4728101,whichisthegroupofstatuteswhichdeal '#& withopenendedDeedsofTrust,futureadvanceclauses,thatsortof (#' thing.)$(` x` x @%*** h+&* Ї  8 ` ...[#XTXX XTg*#_T.C.A._Ԁ] XTXXXTԀ4728101relatestoopenendedtransactionsandhasno  applicationtotheissuesinthiscase.` x` x #XTXX XT+#  OnMarch5,1999,theCoxesexecutedanotherdeedoftrust( seconddeedoftrust)to t JosephG. XTXXXT_Coker_,trustee,securingapromissorynotetoHomeFederalBank,FSB,of_Middlesboro_, ` Kentucky( holder/seconddeedoftrust)intheamountof$100,000.Theseconddeedoftrust L  conveyedintrustthesametractoflanddescribedinthefirstdeedoftrustaswellasotherrealty. 8  TheseconddeedoftrustwasrecordedonMarch5,1999. $ t   Theholder/firstdeedoftrustloanedtheCoxesanadditional$50,000onoraboutJuly8,  L  1999.Theholder/firstdeedoftrusttookanewdeedoftrustondifferentproperty.Itwasrecorded  8  onJuly8,1999.Thepartiesagreethatthenewdeedoftrustisanopenendmortgageasdefinedin $  #XTXX XTJ-#_T.C.A._Ԁ XTXXXTԀ4728101(a)(8)(2001).     WhentheCoxesdefaultedwithrespecttotheirobligationstotheholder/firstdeedoftrust,   thetrusteepublishedatrusteesnoticeofsaleandthereafterforeclosedonthe12.58acresdescribed   inthefirstandseconddeedsoftrust.Theholder/firstdeedoftrustappliedtheproceedsfromthe p foreclosuresalefirsttothepaymentoftheCoxesobligationswithrespecttotheinitialloanof \ $235,040.Afterthiswasdone,thereremainedproceedsof$31,931.85,whichtheholder/firstdeed H oftrustappliedtotheCoxesobligationtoitunderthepromissorynoteof$50,000executedinJuly, 4 1999.#XTXX XT1#  p  XTXXXT  II. H 4  Theholder/seconddeedoftrustsuedtheholder/firstdeedoftrust.Itsoughttorecoverthe    excessproceedsfromtheforeclosuresale,anamountwhichthepartiesstipulatedwasthe   aforesaid$31,931.85.    Followingahearingonthepartiesstipulations,thetrialcourtheldthattheobligationsecured  bytheseconddeedoftrusthadpriorityoverthe$50,000loanmadebytheholder/firstdeedoftrust l totheCoxesaftertheseconddeedoftrustwasrecorded.Itrenderedjudgmentfortheholder/second X  deedoftrustintheamountoftheremainingproceeds.Itdeniedtherequestoftheholder/second D! deedoftrustforprejudgmentinterest.#XTXX XT4# XTXXXT 0"    @@vv(III. $X" l8  Inadditiontostipulatingthefacts,thepartiesagreedastothecontrollingprinciplesoflaw. %0!$ Withonenotableexception,whichwewilldiscusslaterinthisopinion,theprinciplesstipulatedto &"% bythepartieswereandarecorrectlystatedbythem. '#&   Thepartiesagreethatthefirstdeedoftrustcontainswhatiscalleda dragnetclause.In )$( generalterms,a dragnetclauseinadeedoftrust |*%)  h+&*   8 ` isonewhich,onitsface,purportstoincludewithinthecoverageof  thedeedoftrustallpresentandfutureindebtednessowedbythe  borrowertothelenderinadditiontothespecificdebtbeingsecured  bythedeedoftrust.t` x` x  Inre_Lemke_ ,201_Bankr_.765,767n.2(_Bankr_.E.D.Tenn.1996).Suchclauseshavebeenfurther L  discussedasfollows: 8    8 ` Theterm dragnetclauseconnotesbreadthofreachandisthought  ` somethingmuchmorethanaconventionalfutureadvanceclause.  L  Futureadvancesareonesortofdebtincludedwithindragnetclauses.  8  Allsuchclausesareenforcedbyreferencetotheirlanguageandlaw $  andnottheirlabel.#XTXX XT78# XTXXXT ` x` x  _Shutze_Ԁv._Credithrift_ԀofAmerica,Inc .,607So.2d55,58n.1(Miss.1992).     Thepartiesintheinstantcasefurtheragree!andthelawiswellestablished!thatdragnet p clausesarevalidinTennessee.See,e.g., Williev.FirstAmericanNationalBank(InreWillie) , \ 157_Bankr_.623,62526(_Bankr_.M.D.Tenn.1993); Rogersv.FirstTennesseeBank,N.A. ,738 H S.W.2d635,63637(Tenn.Ct.App.1987); Duncanv.Claiborne_CountyBank_ ,705S.W.2d663, 4 66465(Tenn.Ct.App.1985).Thisprinciplewasstatutorilyconfirmedin1983:  p   8 ` (b)Anycontract,securityagreement,note,deedoftrust,orother H securityinstrument,inwritingandsignedorendorsedbythepartyto 4 bebound,thatprovidesthatthesecurityinterestgrantedthereinalso   securesotherprovisionsorfutureindebtedness,regardlessoftheclass   ofotherindebtedness,beitunsecured,commercial,creditcard,or  consumerindebtedness,shallbedeemedtoevidencethetrue  intentionsoftheparties,andshallbeenforcedaswritten;provided,  thatnothinghereinshalllimittherightofanypartytocontestthe l agreementonthebasisthatitwasprocuredbyfraudorlimittheright X  ofanypartytoassertanyotherrightsordefenseprovidedbycommon D! laworstatutorylawinregardtocontracts.0" ` x` x #XTXX XT>#_T.C.A._Ԁ XTXXXT4750112(b)(2001). $X"   DragnetclausesareenforceableinTennesseeifthepertinentlanguageisplainand %0!$ unambiguous. Johnsonv.MidlandBankandTrustCo .,715S.W.2d607,611(Tenn.Ct.App. &"% 1986).Ifthelanguageisplanandunambiguous,itmustbeenforcedaccordingtoitsterms. Id .at '#& 61112.Thoseterms mustbeconstruedaccordingtosenseandmeaningoftermsusedbythe (#' parties,andifsuchtermsareclearandunambiguous,theymustbetakenandunderstoodintheir )$( plain,ordinaryandpopularsense. Id .at611. |*%)  h+&*   Intheinstantcase,theholder/seconddeedoftrustconcedes,insomanywords,thatthe  languageofthefirstdeedoftrustisclearandunambiguousandthat,aswritten,thedragnetclause  encompassesthe$50,000loantotheCoxesinJuly,1999.Theholder/seconddeedoftrustfurther  acknowledgesthatasbetweentheholder/firstdeedoftrustandtheCoxes,theformercouldenforce t thedragnetclause. `   Whileconcedingthatthefirstdeedoftrustwasrecordedfirstandthushasageneralpriority 8  overthesubsequentlyrecordedseconddeedoftrust,see#XTXX XTF#_T.C.A._Ԁ XTXXXTԀ6626101,6626102,6626 $ t 105,theholder/seconddeedoftrustarguesthatthisprioritydoesnotextendtoaloan,i.e.,the  ` $50,000loan,madesubsequenttotherecordingoftheseconddeedoftrust.Thus,thequestionin  L  thiscaseisnotwhichofthelienscomesfirst;itisconcededthatthefirstdeedoftrustwasrecorded  8  first.Therealissueisthereachofthelienofthefirstdeedoftrustandwhetheritextendstothe $  $50,000loan.     @@ll)IV.   mO  Aswehavepreviouslynoted,thepartiesstipulatedallofthelawthattheybelievedtobe p pertinenttothestipulatedfactsinthiscase.Theirstipulationsastothelawincludedonepertaining \ toopenendmortgagesandthestatutoryschemefoundat#XTXX XT M#_T.C.A._Ԁ XTXXXT4728101,etseq.(2001).We H agreewithsomuchofthepartiesstipulationasstatesthatthefirstdeedoftrustisnotanopenend 4 mortgage.Thisisbecausean openendmortgageisdefinedbystatuteasa mortgagesecuringan  p openendcreditagreement,#XTXX XT5Q#_T.C.A._Ԁ XTXXXT4728101(a)(8),andan openendcreditagreementis  \ definedasa revolvingcreditagreementthatissecuredbyamortgageandthatisnotenteredinto H forcommercialpurposes. #  1      ׀#XTXX XTR#Ԁ_T.C.A._Ԁ XTXXXT4728101(a)(7)(emphasisadded).Thepartiesagreethatthe 4 firstdeedoftrustsecuresa commercialloan.Thus,itisclearthatthefirstdeedoftrustisnotan   openendmortgage. #  2           Thepartiesstipulation,however,goestoofar.Inadditiontostatingthatthefirstdeedof  trustisnotanopenendmortgage,itpurportstobindtheparties!aswellasthetrialcourtandthis  court!tothelegalpropositionthatthetotalityofthestatutoryschemefoundat#XTXX XTT#_T.C.A._Ԁ XTXXXT4728101 l  !110isnotapplicabletothefactsofthiscase. #  3      ׀Forreasonsthatwillbecomeclear,wefindand X  hold,contrarytothestipulation,thatcertainaspectsoftheaforesaidstatutoryschemeareapplicable  tothestipulatedfactsbeforeus.     Itisimportanttonotethat,inadditiontodefiningopenendmortgages,#XTXX XTW#_T.C.A._Ԁ XTXXXT4728101 t containsotherdefinitions,includingthatoftheword mortgage. Id .at(a)(4).A mortgageis ` definedasincluding amortgage,deedoftrust,orotherconveyanceofrealpropertysecuring L  obligations... Id .Thefirstdeedoftrustisobviously,bydefinition,amortgage.Thiswillbecome 8  importantaswefurtherpursuethemeaningandapplicationofthestatutoryschemeunderdiscussion. $ t   #XTXX XTEZ#_T.C.A._Ԁ XTXXXT4728102provides,inpertinentpart,asfollows:  L    8 ` Amortgagemayprovidethatitsecuresnotonlyexisting $  _indebtednesses_Ԁoradvancesmadecontemporaneouslywiththe   executionthereof,butalsofutureadvances,whetherobligatory,or   optional,orboth,andwhethermadeunderopenendcredit   agreementsorotherwise,tothesameextentasifsuchfuture   advancesweremadecontemporaneouslywiththeexecutionofthe p mortgage,...\` x` x (Emphasisadded).Itisfollowedby#XTXX XT\#_T.C.A._Ԁ XTXXXT4728103thataddressesthesubjectof advances 4 andthe priorityofsame.Whiletheword advancesisnotdefinedinthestatutoryscheme,we  p findthatithasawelldefinedmeaningwhenviewedinthecontextofthemattersunderdiscussion:  \   8 ` !n....4.Plural...5.a.Thefurnishingoffundsorgoodsoncredit.4` x` x TheAmericanHeritageDictionaryoftheEnglishLanguage18(WilliamMorrised.,1978).Tothe   sameeffectisWebstersIINewRiversideUniversityDictionary80(AnneH._Soukhanov_Ԁed.,1994).  Thus,weconcludethatthe$50,000loantotheCoxesonoraboutJuly8,1999,fallswithinthe  conceptof advances.Inusualparlance,aloantoabankcustomerissometimesreferredtoasan  advancetothecustomer. l   Intheinstantcase,thepartiesagreethattheholder/firstdeedoftrustwasnotobligatedunder D! theoriginalloanagreementto advancefundsinadditiontothe$235,040advancedonDecember 0"  8,1997.Thus,itisclearthattheloanof$50,000wasnotan obligatoryadvance #  4      ׀asthosewords #l! areusedinthefollowingstatute: $X"   $D #   8 ` (a)Thefollowingadvancesrelatebacktothetimeoftherecordingof   themortgage,andarepriorandsuperiortosubsequentencumbrances  andconveyances:` x` x   8 ` (1)Alladvances,whetherobligatoryoroptional,madeunderan ` openendmortgageinaccordancewiththischapter;L ` x` x   8 ` (2)Allobligatoryadvancesmadeunderanymortgagesecuringa $ t revolvingcreditagreementthatisnotanopenendcreditagreement  ` andunderanyobligatoryoroptionalextension,renewalor  L  amendmentofsuchrevolvingcreditagreement;provided,thatno  8  optionalextension,renewaloramendmentshallincreasetheadvances $  entitledtopriorityunderthissubdivisionabovethemaximumamount   entitledtopriorityundertheoriginalrevolvingcreditagreement;and ` x` x   8 ` (3)Allobligatoryadvancesmadeunderanyothermortgagesecuring   futureadvances.p` x` x   8 ` (b)Allobligatoryadvancesmadepursuanttoanoptionalincreasein H thecreditlimitofarevolvingcreditagreementthatisnotanopenend 4 creditagreementandpursuanttoanyobligatoryoroptionalextension,  p renewaloramendmentofsuchincreaseshallrelatebacktothetime  \ oftherecordingofthemortgagesecuringsuchrevolvingcredit H agreementandarepriorandsuperiortosubsequentencumbrancesand 4 conveyancesunlessthemortgageehasactualnoticeofanintervening   conveyanceorencumbrancepriortoincreasingthecreditlimit.Ifthe   mortgageehasactualnoticeofaninterveningconveyanceor  encumbrancepriortoincreasingthecreditlimit,allsuchobligatory  advancesshallrelatebacktothetimeoftheincrease.Forthepurpose  ofthissubsection, actualnoticemeansknowledgeinfactfromany l sourcebyanymeans.X ` x` x   8 ` (c)Optionaladvancesmadeunderanymortgagesecuringfuture 0"  advances,otherthananopenendmortgage,aresuperiorinpriority #l! toanyinterveningconveyanceorencumbranceunlessthemortgagee $X" hasactualnoticeoftheinterveningconveyanceorencumbranceprior $D # toexercisingthemortgageesoptiontomaketheadvance.Forthe %0!$ purposeofthissubsection, actualnoticemeansknowledgeinfact &"% fromanysourcebyanymeans.'#&` x` x #XTXX XT.`#_T.C.A._Ԁ XTXXXT4728103.Sincethiscasedoesnotinvolvean openendmortgageandsincethe$50,000 )$( loanonoraboutJuly8,1999,isnotan obligatoryadvance,itisclearthat#XTXX XTr#_T.C.A._Ԁ XTXXXT4728 |*%) 103(a)(1),(2)and(3)aswellassubsection(b)ofthatstatute,bydefinition,donotapplytothefacts h+&* oftheinstantcase.Thisleaves#XTXX XTs#_T.C.A._Ԁ XTXXXT4728103(c),whichweagainquoteforthepurposeof  emphasis:    8 ` Optionaladvancesmadeunderanymortgagesecuringfuture t advances,otherthananopenendmortgage,aresuperiorinpriority ` toanyinterveningconveyanceorencumbranceunlessthemortgagee L  hasactualnoticeoftheinterveningconveyanceorencumbranceprior 8  toexercisingthemortgageesoptiontomaketheadvance.Forthe $ t purposeofthissubsection, actualnoticemeansknowledgeinfact  ` fromanysourcebyanymeans. L ` x` x  Id .(Emphasisadded). $    Optionaladvancesaredefinedasanyadvancewhichisnotobligatory.#XTXX XTt#_T.C.A._Ԁ XTXXXT4728   101(9).Itfollowsthatthe$50,000loanmadebytheholder/firstdeedoftrustonoraboutJuly8,   1999,isanoptionaladvance.Fromwhatwehavesaid,itisclearthatthe$50,000loantotheCoxes   isan [_o]ptional_Ԁadvance[]madeunder[a]mortgagesecuringfutureadvances.#XTXX XTx#_T.C.A._Ԁ XTXXXT4728 p 103(c).Itis \   8 ` superiorinprioritytoanyinterveningconveyanceorencumbrance 4 unlessthemortgageehasactualnoticeoftheinterveningconveyance  p orencumbrancepriortoexercisingthemortgageesoptiontomake  \ theadvance.Forthepurposeofthissubsection, actualnotice H meansknowledgeinfactfromanysourcebyanymeans.4` x` x  Id .     Weconcludethatthe$50,000loanmaybe superiorinpriority, id .,totheseconddeedof  trustbyvirtueofthedragnetclause,i.e.,theclauseinthefirstdeedoftrustsecuringfutureadvances.    Wesay maybebecausetherecordbeforeusissilent #  5      ׀astowhethertheholder/firstdeedoftrust l had actualnoticeoftheseconddeedoftrust,which notice,asdefinedinthestatute, means X  knowledgeinfactfromanysourcebyanymeans. Id . Actualnoticeisclearlydifferentfrom D!  constructivenotice.See Moorev.Cole ,200Tenn.43,289S.W.2d695,698(1956).Becauseof 0"  thestateoftherecord,wefinditnecessarytovacatethetrialcourtsjudgmentandremandthis #l! mattertothetrialcourttodeterminewhethertheholder/firstdeedoftrusthad actualnoticeofthe $X" seconddeedoftrustwhenitloanedtheCoxesanadditional$50,000onoraboutJuly8,1999.See $D # #XTXX XTz#_T.C.A._Ԁ XTXXXT273128(2000).Ifitdidnot,theadvanceof$50,000 _relate[s_]backtothetimeofthe  recordingofthe[firstdeedoftrust]andis priorandsuperiorto[theseconddeedoftrust].#XTXX XTa#_T.C.A._   XTXXXT4728103(a).Theuseoftheword unlessin#XTXX XT#_T.C.A._Ԁ XTXXXT4728103(c)persuadesusthatthe  converseisalsotrue,i.e.,iftheholder/firstdeedoftrusthad actualnoticeoftheseconddeedof t trustwhenitmadethe$50,000advancetotheCoxes,itdoesnothavepriorityandtheholder/second ` deedoftrustisentitledtotheexcessproceeds. L    Weacknowledgethatwehaveignoredthepartiesstipulationthatthetotalityofthestatutory $ t schemeunderdiscussionisnotapplicabletothefactsoftheinstantcase.Wearenotboundby  ` stipulationspertainingtoquestionsoflaw. _Murvin_Ԁv._Cofer_ ,968S.W.2d304,309(Tenn.Ct.App.  L  1997).Certainly,wearenotrequiredtohonoronewhen,ashere,itisanerroneousinterpretation  8  ofthelaw. $  @)V.     Theholder/seconddeedoftrustcontendsthatitwasmisledbythenoticeoftrusteessale   underthefirstdeedoftrust.Whileacknowledgingthatithadactualknowledge  #  6      ׀oftheplace,date p andtimeoftheforeclosuresaleunderthefirstdeedoftrustinadvanceofthatsale,theholder/second \ deedoftrustpointsoutthatthenoticedidnotstatethatthesalewasbeingheldinanattemptto H collecttheCoxes$50,000obligation.Itcontendsthatthefailuretoincludeareferencetothe 4 $50,000loanledittobelievethattheholdersofthetwodeedsoftrustwereofthesamemind,i.e.,  p thatthepriorityofthefirstdeedoftrustdidnotextendtothedebtincurredaftertheseconddeedof  \ trustwasrecorded.Itisclearfromthepartiesstipulationsoffactthattheholder/seconddeedof H trustwasnotrepresentedatthesaleandthatitdidnotlearnuntilsometimeafterthesalethatthe 4 holder/firstdeedoftrustintendedtoassertitspriorityastothe$50,000loan.     Theholder/seconddeedoftrustalsopointsoutthatthenoticeoftrusteessaledoesnot  mentiontheseconddeedoftrust.Itcontendsthatitisamongthe partiesinterestedandthatthe  noticeoftrusteessalewasfurtherdeficientinthatitfailedtocomplywiththerequirementsof  #XTXX XT#_T.C.A._Ԁ XTXXXT355104(2001),specificallysubsection(a)(1)requiringthat [_t]he_Ԁadvertisementornotice l shall...[_g]ive_Ԁthenamesof...partiesinterested.Itcorrectlypointsoutthat#XTXX XT#_T.C.A._Ԁ XTXXXT355104(d) X  defines partiesinterestedtoincludethe recordholdersofany...deedoftrust.Theholder/second D! deedoftrustcontendsthattheabsenceofitsnamefromthenoticewasanadditionalfactorthatled 0"  ittobelievethatthesalewouldnotaffectwhatitbelievedwasitsprioritywithrespecttothe #l! subsequentloanof$50,000. $X"   Inthecourseofitsopinion,thetrialcourtalludedtotheallegeddeficienciesinthenoticeof %0!$ sale: &"%   '#&   8 ` Thispropertywassoldbyanoticeoftrusteessalewithoutany   specificnoticeorthenamingofthesecondmortgageholder,or  withoutanynoticetothemofadditionaldebtinexcessoftheoriginal  amount.t` x` x   8 ` TheCourtdoesnotbelievethat_that_Ԁ[sic]shouldbeoristhelawin L  thisstate.Theclausesarevalidinsomeinstances.ButIagreewith 8  Mr._Coker_,thatifthiswasavalidwayoffiling,thatseconddeedsof $ t trustwouldhaveabsolutelynovalidity.Iftheresnoticethatthefirst  ` DeedofTrustisextendingadditionalloans,ortheresanobligation  L  todoso,certainlyIthinkitwouldbevalid.AndIthinkbearingupon  8  thesamething,within,then,thenoticeoftrusteesof[sic]sale,had $  theybeennamedasapartyandgivennoticeofadditionaldebt. ` x` x   8 ` Butthelackofthosetwoitems,theCourtbelievesthattheplaintiff   shouldprevailuponthepriorityofthesecondDeedofTrustoverthe   additionalindebtednessclause.p` x` x   Theholder/seconddeedoftruststatedattrialthatitwasnotattemptingtoinvalidatethe H trusteessaleorthemultipledeedsdeliveredpursuanttoit. #  7      ׀Itsimplyarguesthatitwasmisledby 4 thenoticeandthatitshouldbeentitledtoreliefasaresult.  p   Inadditiontoinformationnotimplicatedbythefactsofthiscase,the advertisementor H noticeof#XTXX XT#T.C.A. XTXXXT355104isrequiredto: 4   8 ` (a)(1)Givethenamesoftheplaintiffanddefendant,orparties   interested;` x` x   8 ` (2)Describethelandinbriefterms,includingthestreetaddressif  available;` x` x   8 ` (3)Mentionthetimeandplaceofsale;l` x` x @%*** D!   8 ` (d)Forthepurposesofthissection, partiesinterestedincludes, #l! withoutlimitation,therecordholdersofanymortgage,deedoftrust, $X" orotherlienwhichwillbeextinguishedoradverselyaffectedbythe $D # sale...%0!$` x` x  Id . '#&   (#'   Astothefirstpointraisedbytheholder/seconddeedoftrust,thereisnothinginthestatute   requiringthatthe$50,000debtbereferencedasanobligation,thecollectionofwhichistobe  effected,orattemptedtobeeffected,throughtheforeclosuresale.Thisomissiondoesnotrunafoul  ofthestatutepertainingtonoticeofthetrusteessale. t   Thenoticeoftrusteessaleintheinstantcaseprovidesthatthefirstdeedoftrustisofrecord L   describ[ing]realestate,tosecurethepaymentofthefollowingindebtedness:onenoteofevendate 8  executedbyFIRSTNATIONALBANK, #  8      ׀intheoriginalamountof$235,040";that defaulthasbeen $ t madeinthepaymentofsaidindebtednessandotherprovisionsoftheTrustDeedhavebeen  ` violated;thattheholder/firstdeedoftrust hasdeclaredtheentireamountdueandpayableas  L  providedinsaiddeedoftrust;andhasdirectedthetrusteeto foreclosethedeedoftrust.  8  (Emphasisadded).Thenoticegoesontosaythattheproperty!describedbymetesandbounds! $  willbesoldatpublicauctiononaspecifieddateandataspecifiedtimeandplace inbaroftheright   andequityofredemptionandallotherrightsandexemptions,andsubjecttothefollowing   conditions:unpaidpropertytaxesandotherpriorencumbrancesofrecord.Thelastparagraphof   thenotice,followingthemetesandboundsdescription,includestheprovisionthat     8 ` [t]heproceedsfromthesaleoftheabovedescribedpropertyshallbe \ appliedinaccordancewiththeprovisionsoftheabovedescribed H DeedofTrust.4` x` x   Wefindandholdthatthenoticebeforeusconformstotherequirementsof#XTXX XT#_T.C.A._Ԁ XTXXXT355  \ 104inallrespectsexceptthatitdoesnotstatethenameoftheholder/seconddeedoftrustasrequired H by#XTXX XT:#_T.C.A._Ԁ XTXXXT355104(a)(1).However,theholder/seconddeedoftrustacknowledgesthatitreceived, 4 inadvanceofthesale,acopyofthenoticefromthetrusteenamedinthefirstdeedoftrust.Inour   judgment,theforwardingofsuchanoticetotheholder/seconddeedoftrustrendersthesubject   deficiencyinthenoticeharmless;inanyeventthereisnothinginthisfailuretowarrantachangein  thepriorityestablishedby#XTXX XTC#_T.C.A._Ԁ XTXXXT4728103(c).    Intheinstantcase,theholder/seconddeedoftrustwasonnoticethatapriordeedoftrustwas l tobeforeclosedonpropertyburdenedwiththelienoftheseconddeedoftrust.Itwasuptothe X  holder/seconddeedoftrusttodetermineitsrightsvisavisthoseoftheholder/firstdeedoftrustand D! todecidewhatifanyactionitshouldtakewithrespecttothesale.Itischargedwithnoticethatthe 0"  lawgivestheholder/firstdeedoftrustapriorityoverthesubsequentdeedoftrustastoobligations #l! encompassedbythedragnetclause.WeagreewiththefollowingobservationoftheMississippi $X" SupremeCourt. $D #   8 ` Thirdpartiesdealingwiththedebtor...aregivennoticebythepublic &"% recordthattherecordedliensecuresanyfutureadvances.Thosethird '#& partiesarechargedattheirperiltoinquireofthedebtorandprior (#' securedcreditors.Thedeviceofasubordinationagreementornotice  toterminatemaybeavailablebut,failingsomelegallyeffective  contractornoticerearrangingrank,thirdpartiescannotbeheardto  complainwhentheoriginalsecuredcreditorsfutureadvancesare t accordedthepriorityitspubliclyrecordedinstrumentimports.`` x` x  _Shutze_ ,607So.2dat63. 8  @ll)VI.  `   Sincethismatterisbeingremandedforfurtherproceedings,wedonotfinditappropriateto  8  addresstheholder/seconddeedoftrustsissuewithrespecttoprejudgmentinterest.Thatissueis $  _pretermitted_.   @MM(VII.     Thejudgmentofthetrialcourtisvacated.CostsonappealaretaxedtoHomeFederalBank, p FSB,of_Middlesboro_,Kentucky.Weremandthismattertothetrialcourtforfurtherproceedings, \ consistentwiththisopinion. H #XTXX XT#@*   `     h     _______________________________  p    `     h     CHARLESD.SUSANO,JR.,JUDGE