Imágenes de páginas
PDF
EPUB

subject to the mortgage, see Fidelity Trust Co. v. Staten Island Clay Co., 70 N. J. Eq., 550.

A chattel mortgage by a corporation, authorized by de facto stockholders only, is good as to third persons. Kane v. Lodor, 56 N. J. Eq., 268.

As to the rights of corporation creditors where the owner of the chattels sells them to the corporation and later mortgages the same, falsely representing that he is owner, see Ott v. Sutcliff, 60 Atl. Rep., 965.

A chattel mortgage is good as against the receiver without registry or affidavit. Kane v. Lodor, 56 N. J. Eq., 268.

A chattel mortgage may be made a lien on book accounts due and to become due. Buvinger v. Evening Union Printing Co., 72 N. J. Eq., 321. See also Nugent v. McNeil Shoe Co., 62 N. J. Eq., 583, 585.

Prima facie a mortgage executed under the seal of the company and signed by the vice-president is valid, and when it is attacked because of lack of authorization by the board of directors, the burden is upon the company to show clearly that the seal was affixed without authority of the board. And where the corporation has received the entire consideration of such a mortgage, it cannot dispute the validity of the mortgage because of absence of proof of formal resolution of the directors. Earle v. National Metallurgic Co., 76 Atl. Rep., 555.

When a corporation is the holder of a mortgage, the required affidavit may be made in its behalf by an officer thereof acting under authority of the corporation and possessed of the requisite knowledge to make such affidavit. An affidavit made by an administrative officer or by a duly authorized agent or attorney is the act of the corporation itself. American Soda Fountain Co. v. Stolzenbach, 75 N. J. Law, 721.

An affidavit by the vice-president is therefore the affidavit of the corporation and valid without allegation of specific authority. Id.

Foreclosure.

In a suit by the trustee to foreclose a corporate mortgage, when the bondholders are not parties, the court has no power to make them parties for the purpose of litigating questions regarding compromise of claims and reorganization of the company. Land Title & Trust Co. v. Asphalt Co. of America, 121 Fed. Rep., 587.

The right of a trustee for mortgage bondholders to foreclose is not affected by the fact that the corporation has power to make calls on unpaid stock. Land Title & Trust Co. v. Asphalt Co. of America, 127 Fed. Rep., 1; Land Title & Trust Co. v. Tatnall, 132 Fed. Rep., 305.

Claims between bondholders are not properly litigated in a suit

to foreclose. Mercantile Trust Co. v. U. S. Shipbuilding Co., 130 Fed. Rep., 725.

The right of foreclosure may be exercised by a bondholde although the mortgage provides for suit by the trustee. The power

of the trustee to foreclose is not exclusive. Schultze v. Van Doren, 64 N. J. Eq., 465; aff'd 65 Id., 764; McFadden v. Railroad Co., 49 N. J. Eq., 176; Railroad Co. v. Fosdick, 106 U. S., 47, 68.

Although cestui que trustent are necessary parties in suits to foreclose, it cannot be maintained that they are necessary in the sense that they are indispensable and that their absence would invalidate the decree. Ring v. New Auditorium Pier Co., 77 Atl. Rep., 1054.

It has been held that a trustee may foreclose without making any of the bondholders defendants where the parties would be numerous. Hackensack Water Co. v. Dekay, 36 N. J. Eq., 552; N. J. Franklinite Co. v. Ames, 12 N. J. Eq., 507; Bushey v. National State Bank of Camden, 72 N. J. Eq., 466.

A complainant who asks that a sale under foreclosure proceedings be set aside, even if he has a right to such an action in equity, must apply promptly after the sale. A notice by the trustee that he was about to foreclose, and unnecessary delay after he has been notified that the sale has taken place with the result that it is impossible to restore the affairs of the company, will bar his right to any relief.

Bonds.

There is no statutory limitation on the power of a corporation organized under this Act to issue bonds or debentures, whether secured by mortgage or otherwise.

Stockholders owing money to the corporation upon their subscriptions for stock have the right to buy and pay for the company's bonds, and either hold them or pass them upon the market. Bergen v. Porpoise Fishing Co., 42 N. J. Eq., 397.

The lien of the holders of mortgage bonds relates to the time when the mortgage was recorded, and is superior to a mechanic's lien, although the bonds themselves were not issued until after the erection of the building had been commenced. Central Trust Co. v. Continental Iron Works, 51 N. J. Eq., 605.

One who has accepted bonds of a corporation and sold them, and has afterward bought all the company's property at a receiver's sale, subject to all encumbrances, is estopped to deny the validity of the bonds. De Kay v. Voorhis, 36 N. J. Eq., 37; aff'd Id., 548.

Coupon bonds are negotiable securities. Boyd v. Kennedy, 38 N. J. Law, 146; Copper v. Jersey City, 44 N. J. Law, 634.

As to the distinction between current corporate bonds and bonds

that are overdue, as affecting the rights of holders thereof, see Midland R. R. Co. v. Hitchcock, 37 N. J. Eq., 549.

As to the power of one corporation to guarantee the bonds of another corporation, see Ellerman v. Chicago Junction Rys. &c. Co., 49 N. J. Eq., 217-247.

Where a new corporation is formed to take over the property of a corporation which has issued bonds, and where the new corporation is to issue bonds guaranteed by another company, the rights of a bondholder of the old company on foreclosure are discussed in Ring v. New Auditorium Pier Co., 77 Atl. Rep., 1054.

Validity of bonds informally issued.

A corporation having authority to execute bonds, and its proper officers having actually executed and delivered them, and it having received, retained and used the consideration for the bonds, and paid interest on the bonds for years, omission of a formal resolution authorizing their execution is no defence thereto. Pomeroy v. N. Y. Smelting & Refining Co., 48 Atl. Rep., 395.

Implied authority to issue bonds.

Express authority given by the stockholders and directors of a corporation to prepare and execute mortgages for the purpose of borrowing money gives an implied authority to prepare and execute bonds for payment of the money as one of the usual evidences of a loan, and execution of the mortgages, reciting the bonds, ratifies them. Pomeroy v. N. Y. Smelting & Refining Co., 48 Atl. Rep., 395.

A corporation is estopped to deny the validity of its bonds when they are issued to innocent holders and no defect appears upon the face of the mortgage which secured them, and when there is nothing to put an investor on inquiry as to any irregularity. It cannot set up the defence of no resolution of the board of directors authorizing the bonds. Schultze v. Van Doren, 64 N. J. Eq., 465; aff'd 65 Id., 764.

Presentation of coupons.

When a mortgage to secure the payment of the principal of certain bonds at a specified day and the interest thereon according to the provisions of coupons attached to the bonds, contains a covenant that at a fixed time after default in the payment of interest, and after demand, the principal shall become immediately due and the bonds and coupons are payable at a designated place, default in the payment of interest within the meaning of that covenant will result from the non-payment of the coupons, although not presented at the designated place and payment demanded. Security Trust & Safe Deposit Co. v. N. J. Paper Board & Wall Paper Mfg. Co., 57 N. J. Eq., 603.

Consideration.

The mere fact that property bought for $17,000 at sheriff's sale, on execution against a corporation, was resold to the reorganized corporation for $38,000, is not proof of fraudulent overvaluation, so as to affect the validity, as against the receiver of the latter corporation, of its bonds given on account of the transaction. Pomeroy v. N. Y. Smelting & Refining Co., 48 Atl. Rep., 395.

Bonds secured by unrecorded chattel mortgage valid.

Even if, under statutes making certain chattel mortgages void as against creditors, admissions therein as to indebtedness be not admissible against the creditors, the indebtedness, as an unpreferred claim, may be shown by the bonds attempted to be secured. Pomeroy v. N. Y. Smelting & Refining Co., 48 Atl. Rep., 395.

Rights of a Bondholder.

Equity will grant relief to a bondholder where the trustee under a corporate mortgage and other bondholders conspired to defraud him of his rights under the mortgage by having it foreclosed without notice to him and without making him a party, under a scheme to buy in the property on foreclosure sale and to issue new bonds. But where a bondholder is advised of his rights and is given the option along with the other bondholders, no equity will exist in his favor as against them. Ring v. New Auditorium Pier Co., 77 Atl. Rep., 1054.

Holders of bonds secured by a pledge of stock are entitled to have the stock continued in existence as security unless they have consented that other security may be substituted. Ikelheimer v. Consolidated Tobacco Co., 59 Atl. Rep., 363.

Where, by the terms of a mortgage, coupons have preference over the bonds to which they are attached, a party who advances money to the corporation to pay interest coupons and who receives the coupons in return for the advances, does not succeed to the interest of the bondholder in the coupons unless the bondholder understood or had reason to inquire that the party was buying the coupons and that the corporation was not paying for them. And where the coupons are taken up by the corporation which issued them, it is a question of fact whether or not there was a sale of the coupons to the persons who advanced money to take them up. Morton Trust Co. v. Home Telephone Co., 66 N. J. Eq., 106.

It was understood between the corporation and defendant that he should have a prior lien for moneys advanced, and a bond was drawn payable at a later date, but with the understanding that it could be entered at any time in order to secure defendant's claim as against any threatening creditors. Held, that upon ascertaining that the bond could not be entered at any time, the officers could execute new bonds expressive of the understanding without authorization of the directors. Bergen v. Rogers, 67 Atl. Rep., 290.

When corporate bonds have passed into the hands of innocent holders for what the corporation said they represented, it is too late for the corporation to complain if the company overvalued its own stock and put the bonds in circulation therefor. Hoskins v. Seaside

Ice Mfg. Co., 68 N. J. Eq., 476.

The fact that bonds are taken as collateral security for an existing debt does not make the holder any less a bona fide holder for value. Id.

A receiver had been appointed. An agreement was made to give each creditor four time notes. The receiver was discharged. Two of the creditors received no notes. Payment of the first series of the notes was defaulted. It was then proposed to issue corporate bonds and take up the notes. A majority of the creditors accepted, and bonds were issued to them, some retaining their notes and others being paid in cash. Held, that the creditors who took bonds issued to take up the notes were not bona fide holders. Skirm et al. v. Eastern Rubber Mfg. Co., 57 N. J. Eq., 179. See also Bank v. Sprague, 21 N. J. Eq., 530; Sewell v. R. R. Co., 9 Atl. Rep., 785.

One who advances money to a corporation to pay coupons on its bonds and who takes the coupons when they come in is not a purchaser of the coupons entitled to the preferences provided in the bond. Morton Trust Co. v. Home Telephone Co., 66 N. J. Eq., 106.

Although a mortgage provides that suit shall be brought by the trustee, bondholders are entitled to sue in their own names where the trustee declines. Schultze v. Van Doren, 64 N. J. Eq., 465; aff'd 65 Id., 764.

No statutory limitation as to amount of mortgage indebtedness.

The question is frequently asked whether there is any limitation under the laws of New Jersey on the amount of bonds or other indebtedness which a corporation may create. As to ordinary business corporations the statutes are silent, although railroad companies are limited in the amount of such indebtedness. This question is doubtless suggested by the provisions of the laws of some of the other states limiting the amount of bonded indebtedness to the amount of the paid-up capital stock. The general rule is stated in Barry v. Merchants' Exchange Co., 1 Sanford Ch. Rep. (N. Y.), 280, 310, where it was said: "It is in vain to look in our laws for any express restriction of corporations to the amount of their capital in the use of their credit. The history of those institutions in this country shows that no such restriction exists. The Legislature has sometimes interposed its authority by expressly limiting the use of the corporate credit, thus showing that unless so restricted it was unlimited."

V. To appoint and compensate agents.

The power to appoint officers and agents is ordinarily in the directors, but it may be delegated. It is not necessary that the ap

« AnteriorContinuar »