Ed V. Price & Co. v. Rouse Bros.

Citations

• 107 Miss. 785
• 66 So. 210

Syllabus

<p>Corporations. Insolvency. Preference to creditors. Giving security.</p> <p>Where a corporation owning land mortgaged to a bank, conveyed it to a director, who gave a new mortgage thereon, the proceeds of which were paid to the bank, which released its mortgage, in order that the new mortgage might be a first lien, it being agreed that a second mortgage should be made for the balance of tlie original debt, and the second mortgage was not given, but to carry the debt temporarily, the corporation gave its note endorsed by the directors, and the land was later sold, the purchaser assuming the senior mortgage and giving purchase money notes for the balance, which notes were pledged as security for the corporation note held by the bank; such pledges were not fraudulent as an attempt, while insolvent, to prefer the bank as a creditor of the corporation or to relieve its directors of liability, but was merely a substantial performance of the agreement to give a second mortgage.</p>