Houston Dairy, Inc. v. John Hancock Mutual Life Insurance Company

AINSWORTH, Circuit Judge:

This is an appeal from a Mississippi diversity action in which appellant Houston Dairy, Inc. attempted to recover $16,000 sent to appellee John Hancock Mutual Life Insurance Company as a “Good Faith Deposit” on a loan application which Houston Dairy claims never became binding. At the conclusion of the nonjury trial, the district court ruled that there was a binding contract between the parties and that the $16,-000 deposit represented valid, liquidated damages forfeited by Houston Dairy when it breached the contract. We reverse.

I. Facts

John Hancock mailed a…