Court Opinion

ID: 5213756
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:18:27.087609+00
Date Added: 2024-06-11T08:27:24.387036
License: Public Domain

Ingraham, J. (dissenting):
I do not concur with Mr. Justice McLaughlin. The clause of article II of the mortgage provides that “ whenever the mortgagor shall tender or cause to be tendered to the trustee, and whether before or after the maturity thereof, any of the underlying bonds, * * * the trustee, in exchange therefor, shall authenticate and' deliver to the mortgagor, or on its order, Refunding Mortgage Bonds to a face amount equal to the face amount of the Underlying -bonds so received by the trustee. * * * Unless . cancelled in accordance with the foregoing provisions hereof, and. until so cancelled, all undérlying bonds delivered to the trustee shall be held by the'trustee, without impairment of the lien of such, underlying bonds, as additional, security under this. indenture, and upon the trusts herein declared; and interest on the underlying, bonds, when and as received, shall forthwith be paid to the Mortgagor by the trustee.” I think it was here intended that the trustee should not be required to deliver refunding bonds except when bonds which were valid and which could be held by the trustee as additional security for the bonds issued under this mortgage were delivered. After a bond has been paid by the obligor and actually *473canceled it is no longer, strictly speaking, a bond, and what this provision of the mortgage intended to provide, as it seems to-- me, was that the underlying bond for which a refunding bond was to be issued was a live bond, which could be held by the trustee as additional security for the obligation issued under this mortgage. The parties must be assumed to have contracted in relation to the existing situation and the provisions of the mortgage to secure the underlying bonds. The provision that the lien of the underlying bonds for which refunding bonds were issued should be continued -in the hands of the trustee as security for the refunding bond was important for the security of the bonds issued under this mortgage for such underlying bonds which had been delivered to the trustee and were held by it would be entitled to participate in any foreclosure of the mortgage given to secure the underlying bonds. If but part of the underlying bonds had been paid off then it would have been an important additional security to the refunding bonds to allow the trustee-to participate in the proceeds of any sale under the mortgage to secure the'underlying bonds. I do not think, therefore, that the defendant was bound to deliver a refunding bond except upon delivery to it of a bond which was an actual existing obligation and which Was secured by one of the underlying mortgages.
I think, therefore, that the defendant is entitled to judgment.
Houghton, J., concurred.
• Judgment ordered for plain tiff as directed in opinion.