Morrison Waite

“ Such bondholders are not, like stockholders in a corporation, necessarily bound, in the absence of fraud or undue influence, by the will of the majority, when expressed in the way provided by law, but they occupy, to some extent, an analogous position towards each other. The mortgage, with the issue and distribution of bonds under it, creates a trust, of which the selected mortgagee, or his duly-constituted successor, is the trustee, and the bondholders primarily, and the stock holders ultimately, the beneficiaries. ”

“ But it seems to us a proper exercise of legislative power to require a minority to act whenever such an arrangement is proposed, and to provide that all shall be bound who do not, in some direct way, within a reasonable time after notice, signify their refusal to concur. ”

“ As in the present case, a very large majority of the bondholders sometimes think it is for their own interests as well as of that of their associates to surrender a part of their rights and accept others instead, and they prepare and submit for execution an agreement, the object of which is to carry their plan into effect. No majority, however large, can compel a minority, small though it be, to enter into such the agreement against their will ”

“ Pursuant to this legislative authority, the contemplated agreement was entered into between the corporation, with the assent of its stockholders and the creditors. The notice required by the statute was given, and bondholders to the amount of only $85,000 out of the $2,500,000 filed in writing their refusal to concur. All the rest either assented in writing or failed to signify their dissent. At the time the agreement was made, Gilfillan, the plaintiff in error, owned $4,200 of the bonds of 1853, and the coupons thereon from November 1, 1857. ”

“ Vance, 108 U.S. --, [2 SUP. CT. REP. 854,] where it was held that an article in the constitution of Louisiana, adopted in 1868, which provided that existing secret mortgages and privileges should cease to have effect against third persons after the first of January, 1870, unless before that time recorded, did not impair the obligation of a contract between an infant and her natural tutor. ”