Underwriting

“ Best efforts underwriting refers to an underwriting form through which securities company sells the securities as a proxy of an issuer and returns all the securities unsold to the issuer upon expiration of the underwriting period. ”

“ The brokers would then take the men seeking the underwriting to the offices of the guarantee companies and arrange for guaranteeing the bonds on payment of a fee of 1 per cent of the amount of underwriting. ”

“ The transfer agent is usually paid about twice as much as the registrar. Compensation for acting as manager of an underwriting syndicate may be a fixed sum or a commission, according to the provisions of the underwriting agreement. For acting as depositary under plans of reorganization, assignee, or receiver, a lump sum is usually paid covering all services. Agency work of various sorts is paid for in accordance [Pg 269] with the usual practice in the business which is undertaken; a fixed sum, or a fixed sum and a commission, or a commission only, may be received. ”

“ If a man acted as buyer, or lender, for another, he incurred liabilities, for which he could not indemnify himself, unless he had secured from his principal a deed empowering him so to act. But, if without such power of attorney, A had acted for B, and bought a house, or field, of C, and had the conveyance made out to B, of course paying C; or had lent money to C, in the name of B; and the transaction had been completed, by sealing the deed of sale or bond; then B was the owner of the field, or house, or the creditor for the loan. ”

“ Justice Story show that the receiving a note as security for a debt, or forbearance to sue a present claim or debt, or an exchange of securities, or becoming a surety, or doing any other act at the request or for the benefit of the maker or indorser, will constitute a sufficient consideration for note as well as the payment of money, or the making of advances, or giving credit, or the discharge of a present debt, or the performance of work or labor at the request of the party. ”

“ When proceedings are brought in any court by a licensee for the recovery of a loan or the enforcement of a contract for a loan or any guarantee or security given for a loan, and the court is satisfied that the interest or late interest charged in respect of the loan is excessive and that the transaction is unconscionable or substantially unfair, the court shall re-open the transaction and take an account between the licensee and the person sued. ”

“ In Angell and Ames on Corporations, sect. 534, it is said,--
'When an original subscriber to the stock of an incorporated company, who is so bound to pay the instalments on his subscription from time to time as they are called in by the company, transfers his stock to another person, such other person is substituted not only to the rights, but to the obligations, of the original subscriber, and he is bound to pay up the instalments called for after the transfer to him. The liability to pay the instalments is shifted from the outgoing to the incoming shareholder. ”

“ The formalities to be observed resemble in many respects those imposed in the case of the granting of a special settlement. The loan or company has to be of sufficient magnitude and importance. Such documents as the prospectus, which must have been publicly advertised, the articles of association, which are the rules of the company, the allotment book, showing the extent to which the securities have been publicly issued, the banker's pass-book, certified copies of contracts and concessions, have all to be deposited. ”

“ Another view is that the underwriter impliedly undertakes to repay sums which the law may require the assured to pay towards averting losses which would, by the contract, fall upon the underwriter. Expenses voluntarily incurred by the assured with that object are expressly made repayable by the sue and labour clause of the policy. It might well be implied that payments compulsorily required from the assured by law for contributions to G.A., or as salvage for services by salvors, will be undertaken or repaid by the underwriter, the service being for his benefit. ”

“ For example, if a trustee should, in violation of his trust, contract to sell the land to A, receiving the purchase money at the time, or should make an equitable mortgage by deposit of the title-deeds, and should afterwards, in discharge of his obligation, convey the legal title to A, the latter could not be charged with the prior equity; [67] for one who takes a legal title in discharge of a claim against the transferrer is a purchaser for value. ”

“ No public service corporation shall hereafter issue for any purposes connected with or relating to any part of its business, any stocks, certificates of stock, bonds, notes, or other evidences of indebtedness, to an amount exceeding that which may from time to time be reasonably necessary for the purpose for which such issue of stock, certificates of stock, bonds, notes, or other evidences of indebtedness may be authorized. ”

“ A trust company acting as receiver is better able than an individual to furnish additional capital, if amply secured, and thus successfully to meet the difficulties which withdrawal of credit and restricted capital have temporarily brought upon an otherwise prosperous business. The courts authorize the issue of receivers' certificates to provide funds for purchase of equipment and the proper maintenance of the property and conduct of the business when the creditors are benefited by such expenditures. ”

“ The fifth section provides that any assignee to whom such sum of money or personal property is by indorsement made payable, or, he being dead, his executor or administrator, may in his own name institute and maintain the same kind of action for the rocovery thereof against the person making and executing the note, bond, bill, or other instrument in writing, or against his heirs, executors, or administrators, as might have been maintained against him by the obligee or payee, in case it had not been assigned. ”

“ When a contract is proposed between factors, or between a factor and any other creditor, to pass property for an antecedent debt, it is not a sale in the legal sense of that word or in any sense in which it is used in reference to the commission which a factor has to sell. ”

“ When a debtor wishes to pawn promissory notes, bills of exchange, stocks, obligations, or claims upon other persons, he shall deliver to the creditors the notes, bills of exchange, certificates of stock, or other evidence of the claims or rights so pawned ”

“ Bon a fide holders of the certificates might demand that the certificates should be paid out of the future earnings of the company, or that they should be converted into stock whenever the company should be authorized to increase their capital to an amount sufficient for the purpose, and that they should have a pro rata share in the distribution of whatever assets may remain at the dissolution of the company. ”

“ Such questions concern blockade, contraband, domicile, nationality, neutrality, &c.
The usual procedure in the offer and acceptance of a risk is as follows: The intending insured (principal or broker) offers the risk by showing to the underwriter a brief description of the venture in question, called in Great Britain a slip, in Course of business. America an application. The underwriter signifies his acceptance of the whole or of a part of the value exposed to perils by signing or initialling the slip, putting down the amount for which he accepts liability. ”

“ Stable and immutable rules are necessary to give confidence to those who receive such securities in the usual course of business, when indorsed in blank, or made payable to bearer, so that if such a bill or note is made without consideration, or be lost or stolen, and afterwards be negotiated for value to one having no knowledge of such facts, in the usual course of business, his title shall be good, and he shall be entitled to collect the amount. ”

“ It appeared that when the Union Loan & Trust Company desired to rediscount or sell notes it sent out a circular offering them at a considerable discount, and reciting, "In every case we hold good and sufficient security from the maker;" but it did not appear that the holders of notes, the creditors represented by the assignee, took them on the faith of any pledge of the securities in question. ”

“ Each member of a partnership is the agent of all, and all the others are the agents of each, and all or each would have authority to settle debts by the assignment of property of the firm. If, then, one becomes indebted to the firm on an open account, the firm, on the principles before mentioned, could assign or negotiate the debt, and so give the assignee a right of action in his own name. ”

“ As assignee the trust company takes possession of the property assigned for the purpose of carrying out the terms of the deed of assignment in the interest both of the assignor and the creditors of the assignor. The deed of assignment is an acknowledgment of an embarrassed or insolvent condition, and the efforts of the assignee are directed to realizing as much as possible from the assets intrusted to its management. ”

“ If a debtor shall, directly or indirectly, in contemplation of the filing of a petition by or against him, pay money or transfer property to an attorney and counselor at law, solicitor in equity, or proctor in admiralty, for services to be rendered, the transaction shall be re-examined by the court on petition of the trustee or any creditor, and shall only be held valid to the extent of a reasonable amount, to be determined by the court, and the excess may be recovered by the trustee for the benefit of the estate.' 30 Stat. ”

“ We think, however, that the words in the deed of trust, 'at the option of said third party,' the payee or holder of the notes, refer not only to foreclosure, but equally to the clauses in the notes and in the deed of trust relating to the maturity of the principal, in the case of a default in the payment of interest. In other words, the principal, in either of the contingencies named, might become due and payable in advance of the time specifically named in the respective notes, at the option of the payee or holder. ”

“ If, within the meaning of the statute, interest is 'paid' simply by including it in a renewal note, it would follow that, as soon as the usurious interest is included in a renewal note, the borrower or obligor could sue the lender or obligee, and 'recover back * * * twice the amount of the interest thus paid,' when he had not, in fact, paid the debt, nor any part of the interest as such. ”

“ Section 57h provides: 'The value of securities held by secured creditors shall be determined by converting the same into money according to the terms of the agreement pursuant to which such securities were delivered to such creditors or by such creditors and the trustee, by agreement, arbitration, compromise, or litigation, as the court may direct, and the amount of such value shall be credited upon such claims, and a dividend shall be paid only on the unpaid balance. ”

“ The receiver is, indeed, appointed to close up the association,-that is to say, to wind up its business, get in its assets, and pay its debts, and, if need be, to enforce the personal liability of its shareholders for all its 'contracts, debts, and engagements,'-but the corporation lingers while this is being done, and, on occasion, when the receiver has discharged his duty with the satisfactory results enumerated, and assets remain, an agent may be chosen, who may sue and be sued, in the name of the association, in the conduct of the final liquidation. ”

“ That report should state the amount of assets to be distributed, the amount collected from the original defendants, also the other amounts collected by the Receiver from persons not in the decree; whether the amounts collected from the parties respondent are sufficient to pay each of the original parties complainant? if not, how much to each; how much other assets have been collected by the receiver, and how much would be coming to each creditor on the hypothesis that all the assets are to be divided among all the creditors equally. ”

“ Such receiver, under the direction of the comptroller, shall take possession of the books, records, and assets of every description of such association, collect all debts, dues, and claims belonging to it, and, upon the order of a court of record of competent jurisdiction, may sell or compound all bad or doubtful debts, and, on a like order, may sell all the real and personal property of such association, on such terms as the court shall direct; and may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders. ”

“ That when a state, a corporation, or an individual publish to the world their willingness to accept payment of their debts in the issues of a bank, it amounts to a contract, by implication, with the public, and each individual composing it, to guaranty the notes issued by said bank, and that this contract runs with, and is attached to, said notes, in the hands of the bearer, provided the notes were issued before such offer is withdrawn. ”

“ To purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of any bonds or other securities or evidences of indebtedness created or issued by any other corporation or corporations association or associations, of the state of New Jersey, or of any other state, territory, or country, and while owner thereof to exercise all the rights, powers, and privileges of ownership. ”