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A mortgage with a “dragnet clause” is an “offer” by the mortgagor to the bank to provide the security of the mortgage for advances of and when they were made. It can be said that the “offer” was not accepted by the bank when a subsequent advance was made because of a new security.
The Security and Pitfall of Dragnet Clauses. Published 01 October 2018, The Daily Tribune. The long and tight reach of a real estate mortgage contract is oftentimes amplified by the so-called Dragnet Clause. Otherwise referred to as Blanket Mortgage Clause, this ostensibly innocent stipulation extends the applicability of a contract of a real ...
The mortgage provision relied upon by appellant is known in American jurisprudence as a "dragnet" clause, which is specifically phrased to subsume all debts of past or future origin. Such clauses pursuant to the pronouncement of the Supreme Court in DBP vs. Mirang must be "carefully scrutinized and strictly construed." [12]
A mortgage containing a dragnet clause will not be extended to cover future advances, unless the document evidencing the subsequent advance refers to the mortgage as providing security therefor, or unless there are clear and supportive evidence to the contrary.
The parties having conformed to the "blanket mortgage clause" or "dragnet clause," it is reasonable to conclude that they also agreed to an implied understanding that subsequent loans need not be secured by other securities, as the subsequent loans will be secured by the first mortgage.
Petitioners assert that the mortgage contained a blanket mortgage clause or a dragnet clause, which stated that the mortgage would secure not only the loans already obtained but also any other amount that Luis Ramos may loan from PNB.
Jul 21, 2009 · Certain Real Estate Mortgage Contract contains a blanket clause also called the “dragnet clause” which has been recognized as valid and legal.
