Armada State Bank v. Union Guardian Trust Co.
| Decision Date | 02 March 1933 |
| Docket Number | No. 33.,33. |
| Citation | 262 Mich. 487,247 N.W. 787 |
| Parties | ARMADA STATE BANK v. UNION GUARDIAN TRUST CO. (HATCH, Intervener). |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Wayne County; James E. Chenot, Judge.
Suit by the Armada State Bank against the Union Guardian Trust Company wherein William T. Hatch, receiver of the First National Bank of Dearborn, intervened. From the decree for plaintiff, defendant appeals.
Affirmed.
Argued before the Full Bench.Bulkley, Ledyard, Dickinson & Wright, of Detroit (Edward C. P. Davis and Glenn D. Curtis, both of Detroit, on the brief), for appellant.
George H. Heideman, of Detroit, for appellee Armada State Bank.
McLeod, Fixel, Abbott & Fixel, of Detroit, for receiver.
The facts are stipulated. The defendant is trustee under a trust mortgage dated August 1, 1927, given to secure an issue of first mortgage bonds, in the sum of $100,000. In it the mortgagor covenanted and agreed to deposit with the trustee semiannually a sum sufficient to pay the interest on the bonds and the federal income tax thereon, and-‘to deposit with the Trustee on the 15th day of August, 1929, and on the 15th day of each and every calendar month thereafter, up to and including July 15, 1936, an amount equivalent to one-twelfth of the principal falling due the next succeeding principal payment date.'
It was also said therein: ‘The intent hereof is that fifteen days before said respective interest, principal and tax payments, said sinking funds deposited shall be sufficient to meet the respective interest, principal and tax requirements in full, when due, with the exception of the principal requirement due August 1, 1937.'
Bonds amounting to $6,000 matured on August 1, 1931. All interest thereon was paid. The plaintiff is the owner of three of these bonds, amounting to $2,000. There was at that time in the sinking fund created by the above provision the sum of $3,067.05. It demanded payment of its pro rata share of this amount from the trustee, and, on its refusal to do so, filed the bill of complaint herein to enforce such payment, and had decree therefor, from which the defendant has taken this appeal.
In our opinion, but one construction can be placed upon the provisions in the mortgage above quoted. The mortgagor agreed to pay to the trustee, in annual installments, a sufficient portion of the mortgage debt to retire the bonds which matured on August 1, 1931. Had he done so, and had the $6,000 then been in the sinking fund in the hands of ...
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