Oliver Wendell Holmes, Jr.

“ As the claim of the Trust Company was put by the court of appeals upon the equitable right of creditors to be preferred to stockholders against the property of a debtor corporation, it is essential to inquire whether the appellant received any such property,-that is, whether it got by the foreclosure more than enough to satisfy the mortgage, which was a paramount lien. ”

“ In short, while it is true that reorganization plans often would fail if the old stockholders could not be induced to come in and to contribute some fresh money, and that the necessity of such arrangements should lead courts to avoid artificial scruples, still we are not prepared to say that the court of appeals was wrong in finding that there had been a transgression of the well-settled rule of equity in this case, or that it went further than to see that substantial justice should be done. ”

“ The Gulf Company's mortgage was to be foreclosed and a new company formed, which was to exchange its own securities for the stock and bonds of the Gulf, Dock, and Belt Companies, making a new mortgage to raise the necessary funds. The Gulf Company's mortgage was foreclosed, the appellant company was formed, issued its new securities, and in March and April, 1900, became the owner of the Gulf road and of most of the stocks and bonds of the old companies, including the Belt Company. ”