Kesling v. Bank of America National Trust & Savings Ass'n

This appeal is brought from a district court decision vacating the order of a referee in bankruptcy. Appellants claim error in the court’s literal interpretation of a so called “dragnet clause” in a trust deed securing a loan from appellee. The clause provided that the total indebtedness secured included any sums which appellants might owe to appellee bank, whether incurred in the past, at the time of execution of the trust deed, or subsequently.

The clause became of consequence with the failure of a company owned by appellants. Prior to the execution of the trust deed, appellants had issued…