Richard H. Sikes v. L. & N. Consultants

On August 25, 1972, Lomas & Nettleton Financial Corporation loaned $2,314,645.00 to First National Development Company. The money was used by First National, as intended by the parties, to acquire 34.86 acres located in the City of Dallas and to develop the land into lots for the construction of 250 townhouses to be known as Preston Square. The loan was evidenced by First Nationals promissory note dated August 25, 1972; and it was secured by First Nationals deed of trust which was recorded on August 28, 1972. The trust deed conveyed the 34.86 acres which would be developed into the 250 townhouse lots; and it recited that in addition to the note of August 25, 1972, it secured "all other indebtedness, of whatever kind or character, owing or which may hereafter become owing" by First National to Lomas & Nettleton. At the time of the acquisition and development loan on August 25, 1972, First National and Lomas & Nettleton contemplated a future loan to finance construction of the initial 36 townhouses. This was accomplished on November 30, 1973, when Lomas & Nettleton loaned $1,700,000.00 to First National for that purpose. The loan was evidenced by First Nationals promissory note bearing that date. Under those facts the dragnet clause in the deed of trust of August 25, 1972, and the contemplated future loan at that time and its later fulfillment the indebtedness evidenced by the November 30, 1973, promissory note was also secured by the August 25, 1972, deed of trust. Moss v. Hipp, (Tex.1965) 387 S.W.2d 656, 658.