Candler v. Cromwell

• Decision Date: 26 February 1912
• Docket Number: 15,347
• Citation: 57 So. 554,101 Miss. 161
• Court: Mississippi Supreme Court
• Parties: M. A. CANDLER v. KING CROMWELL ET AL

57 So. 554

101 Miss. 161

M. A. CANDLER v. KING CROMWELL ET AL

No. 15,347

Supreme Court of Mississippi

February 26, 1912

APPEAL from the circuit court of Alcorn county, HON. J. H. MITCHELL Judge.

Suit by M. A. Candler against King Cromwell et al.

From a judgment for defendant, plaintiff appeals.

The facts are fully stated in the opinion of the court.

Affirmed.

Bennet & Sweat for appellant.

This trust deed does not show that it is given to secure future advances; but even though it did, it could be security for no more future advances than fifty dollars, the sum stated. "A trust deed to secure future advances is good to the extent of the amount specified when the advances are actually made." 28 A. and E. Ency. of Law (2 Ed.), page 754.

"When future advances are secured, parol evidence may be introduced to identify what advances were in fact intended by the parties, but when the amount of the future advances is specified and that amount was advanced, it has been held not competent to show by parol that the mortgage was intended also to secure a future indebtedness, so as to give a preference over junior incumbrances. 20 A. and E. Ency. of Law, (2 Ed.), page 929.

If this trust deed was given to secure future advances and the open and runing account was an account of advances made after the trust deed was given, the trust deed specifically limits it by stating that it was to be fifty dollars, more or less, the amount of advances which is to be secured.

"The consideration named does not limit the securities for which a mortgage may stand, if the intent to secure future advances is apparent from the whole instrument; but any mortgage to secure future advances may specifically limit the amount for which it shall stand as security, as by providing that such advances shall not exceed a certain named sum, and in that case, the lien of the mortgage shall be limited as against subsequent incumbrances to the designated amount, although as against the mortgagor, it may be good for the whole amount actually advanced." 27th Cyc., page 1072.

"A mortgage for a sum certain given in good faith as security for future advances is valid as against general credits of the mortgagor for advances not exceeding the sum specified in the mortgage; and also as against third persons acquiring interest in the mortgaged premises, conveyance, or judgment lien."

If this contract is construed so as to include one hundred and thirty-seven dollars it certainly will be construed to exceed the amount specified for the amount is specified to be fifty dollars, or less.

"A mortgage given to secure an unliquidated demand, or debts of a specified kind, or contracted for a particular purpose, and containing a limitation as to the total amount for which it is to stand as security, must be strictly construed in this respect, and cannot be enlarged; and when the debt is described as being about a certain amount, no indebtedness however fair and just, can be brought within its terms which is materially in excess of the sum mentioned." 27th Cyc., page 1060.

The debt described here is certainly described as being "about fifty dollars, for more or less" mean "about." The above authority holds that no amount however fair and just, which is materially in excess of that fifty dollars, can be brought within its terms. One hundred and thirty-seven dollars is very materially in excess of fifty dollars.

Our own court has never construed a trust deed just like this, but it has construed trust deeds very similar to it, and has stated what we conceive to be the law in this case. In Hillard et al., v. Cagle, 46 Miss. 341, the court said: "It is entirely legitimate to give a mortgage for a sum certain named in the deed, when that sum is intended to cover future advances. To the amount named, the security is valid as to third persons, but not beyon it."

In the case of Wilczinski v. Everman (54 Miss. 841, where the indebtedness stated in the mortgage was three hundred and fifty dollars and all other indebtedness which may be incurred, the court held that this was sufficient to cover all advances made and was a valid incumbrance, and said: "It is not necessary for a mortgage for future advances to specify any particular or definite sum which it is to secure. It is not necessary for it to be so completely certain as to preclude the necessity for all extraneous inquiry."

But in the case at bar, the sum of any advances was particularly and definitely stated, and sufficiently so as to preclude all extraneous inquiry. The appellant, Candler, had a right to rely on the sum specifically stated in the trust deed.

In the case of Gray v. Helms, 60 Miss. 131, the trust deed secured all future advances, but went on and stated that "this deed is made and intended to secure any advances on account of the crop of 1880, made after the maturity hereof, and not mentioned herein." The court said in construing that trust deed that this clause must limit the advances made after maturity to such as should be made on account of the crop of 1880, and that advances made in excess of that sum did not come within the security that it was impossible to give the latter clause any force or meaning, except to place this construction on it; that that clause was not inserted to enlarge the instrument, which needed no enlargement, but rather as a limitation for that which without it was too general and all embracing. We say, in regard to the case at bar, that in order to give the fifty dollars mentioned in the trust deed any force or meaning, the construction must be that any sum materially in excess of that amount is not within the security.

W. J. Lamb for appellees.

The sole question presented in this case is a construction of a clause in the trust deed given by King Cromwell to C. Ayers which clause is as follows:

"The first party (meaning King Cromwell) is justly indebted to the third party (meaning C. Ayers) in the sum of one hundred and eighty-four and ninety-five one hundredths, more or less, dollars, as evidenced by note of even date herewith, for $ 134.95, due Dec. 15, 1910, an open and running account for $ 50.00 more or less, as shown on books of third party."

On this open account Cromwell became indebted to C. Ayers in the sum of one hundred and thirty-seven dollars. Now, the question, is: Does this trust deed cover the one hundred and thirty-seven dollars, or does it only cover a few dollars more than fifty dollars. There is no other question presented in this appeal except this one issue, to-wit: Does the trust deed cover the one hundred and thirty-seven dollars? Our contention is that it does cover it. The contention of the appellant is that it does not cover it. The appellant could have, with ordinary diligence, ascertained how much the defendant, Cromwell, owed Ayers because the trust deed expressly provides for an open and running account of fifty dollars, more or less, as shown on books of third party.

In the case of Wilczinski v. Everman, the court says: "A mortgage to secure future advances which on its face gives information as to the extent and purpose of the contract so that a purchaser or junior creditor may by an inspection of the record and by ordinary diligence or prudence, ascertain the extent of the encumbrance, will prevail over the supervening claim of such purchaser or creditor as to all advances made by the mortgagee within the terms of such mortgage, whether made before or after the claim of such purchaser or creditor arose." Wilczinski v. Everman, 51 Miss. 846.

The trust deed was given not only to secure the note but to secure the future advances, and the case falls squarely within the doctrine announced in this case. The doctrine anounced in the above mentioned case was reiterated and announced by Justice Calhoun in the case of Melton v. Williams Co., 83 Miss. 630, where he says:

"As in Wilczinski v. Everman, 51 Miss. 841, it gives on its face information as to the extent and purpose of the contract so that a purchaser or junior creditor may, by an inspection of the record, or by ordinary diligence and common prudence ascertain the extent of the encumbrance." Melton v Williams Co., 83 Miss. 630. There can be no question but that a trust deed given to secure future advances is valid and binding and when put of record is notice to the world that is sufficient to put junior creditors or purchasers on inquiry. In so far as a lien is concerned, the appellant in this case is a junior mortgagee or creditor and there is no contention on the part of the appellant that his lien is paramount to the lien of C. Ayers, his only contention being that the mortgage only covers the open account for a few dollars more than the fifty dollars because of the expression "more or less." If the mortgage is a valid mortgage when it is given for future advances and the recording of the same is notice to the world and sufficient to put interested parties on...