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1997. The note further provided that the annual installment was
to be deemed paid (i.e, the installment amount was forgiven),
provided the dealer supply agreement and the rider remained in
full force and effect on the due date of the installment.
Mr. Zimmerman also executed, on petitioner’s behalf, a
mortgage security agreement and an assignment of rents dated July
1, 1996 (the mortgage). The mortgage secured petitioner’s
obligation to repay the Amoco advance with a lien on the 60th
Street property. The mortgage provided that in the event of a
transfer of the 60th Street property, at Amoco’s election, all
sums secured by the mortgage would become immediately due and
payable. The mortgage further provided that, in the event a
transfer occurred and Amoco did not elect acceleration of the
debt, then the transferee would be deemed to have assumed all of
petitioner’s obligations under the mortgage.
Although the mortgage stated that it constituted a “second”
priority lien on the property, it indicated that it was “superior
to any and all other liens.” Further, there were no other
mortgages on the property. The mortgage was recorded with the
Office of County Recorder, Washington County, Minnesota, on
August 26, 1996.
Amoco’s business practice was to enforce the collection of a
promissory note made by a dealer/borrower if the dealer defaulted
on the note. When a dealer abandoned a station, sold the
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