Court Opinion

ID: 9651065
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:04:35.328148+00
Date Added: 2024-06-11T18:12:29.446577
License: Public Domain

STONE, Circuit Judge.
I concur in the result of affirmance on the sole ground that these appellants are disqualified, by the provisions of the mortgage protecting their bonds, from bringing this action. The bonds upon their face stated that “the nature and extent of the security and the rights of the holders of the bonds issued, and the terms and conditions upon which the bonds are issued and secured” were set forth in the mortgage and that “all rights of action upon this Bond, except as otherwise provided in said Mortgage, are vested in the Trustees.” Section 15 of article 8 of the mortgage provided that no one or more holders of the bonds should have any right whatever to bring an action to affect or enforce rights under the mortgage except in the manner therein provided, and the manner therein provided required that the trustees should act, upon impulse from bondholders, only when 25 per cent, in amount of the outstanding bonds had made written request under certain conditions and situations as to notice set forth therein. It seems obvious that these conditions in the bond and the mortgage control the situation here. I have not found in the petition or any of the pleadings upon which the case was tried any legal reason for voidance or noneomplianee with this condition. It seems to me that upon this special defense the issue made by the pleading was whether there *405•was a provision of that sort in the bond and mortgage binding upon these appellants. If they wish to admit such existence and avoid its effect, they shonld have amended the petition to that effect. Not having done so, the issue thereon was one merely of denial. The evidence establishes the existence of such conditions without dispute, and therefore the denial is ineffective on the facts. In this situation, it seems to me the appellants must lose upon this issue. This issue goes to the root of their right to proceed under their bond contract and leaves them out of court.