Watts v. Bonner

Citations

• 66 Miss. 629

Syllabus

<p>1. Trust-Deed. Given to secure future advances. Cancellation, when refused. Mights of parties.</p> <p>Where there is an agreement between a merchant and a customer, that the latter is to obtain certain advances from the former, and is to execilte a trust-deed to secure the indebtedness, and also that a collateral contract is to be entered into between the parties defining the rights of each, after receiving a large part of the advances and executing the trust-deed, the debtor cannot have cancellation of the same on the ground merely that the creditor has refused to sign and deliver the contract and to complete the advances. This is true although the trust-deed is taken by an agent of the creditor with the understanding that it shall go for naught if the contract is not executed as originally agreed upon. If in such case the debtor is damnified, he may secure a reduction from the amount actually advanced; but these facts do not entitle him to cancellation of the ti-ust deed.</p> <p>2. Same. Agreement to advance. Security fraudulently obtained. Not enforceable.</p> <p>In such case if the debt was contracted without any agreement for security, and the creditor obtains a mortgage or trust-deed under promise of future advances he does not intend to make, the security would be fraudulently obtained and therefore not enforceable. Gross v. McKee, 53 Miss. 536.</p> <p>3. Same. Martial failure to make a/lvrxnees. Security enforceable pro tanto. Damages recouped.</p> <p>But if the creditor takes a mortgage to secure a certain sum agreed and intended to be advanced, and fails to advance the entire amount, the security may nevertheless be enforced for the amount actually advanced, subject to the right of the debtor to have a reduction to the extent of any loss directly traceable to the breach of contract by the creditor and fairly within the contemplation of the parties as a natural result from such breach, and which could not by reasonable effort have been avoided by the par