Gholam Reza Safaeih v. Reza Alizadegan

Syllabus

The parties entered into an agreement in which the defendant provided funds and theplaintiff used those funds to trade stocks. At one point, the defendant agreed to make a$50,000 loan to the plaintiff so that the trading could continue. The agreement wasevidenced by a promissory note in which the plaintiff agreed to repay the loan and to shareany losses incurred. The loan was secured by a deed of trust executed on the plaintiff'sresidence. Subsequently, the parties lost approximately $210,342. The plaintiff then fileda declaratory judgment action in which he claimed that the deed of trust was void becausethe loan funds had never been disbursed. The defendant filed an answer and counterclaimalleging that the plaintiff owed him the balance of the loan plus interest. He also soughtreimbursement for a portion of the losses that the parties had incurred. The chancery courtdetermined that the defendant had never disbursed the loan funds. Accordingly, it held thatthe deed of trust and the portion of the promissory note which required repayment of theloan balance were void due to a lack of consideration. However, the chancery court alsoheld that the portion of the promissory note in which the plaintiff agreed to share losseswas effective and left the defendant entitled to damages. The plaintiff appeals. We affirm.