Horn

Ross Island Sand & Gravel Company filed a petition for reorganization under 77B of the Bankruptcy Act ( 11 U.S.C.A. § 207 ), wherein it claimed assets amounting to $2,880,022.17, and liabilities for the same amount, including $2,031,671.46 of liabilities to preferred and common stockholders. The principal liabilities, other than the capital liabilities, consisted of current indebtedness, amounting to $262,260.28, and a bonded debt of $488,100 secured by a trust deed. For convenience, the properties covered by the trust deed are divided into five parcels. Parcels 1, 2, and 3 consist of four hundred acres of land in and near the city of Portland, Or., -valuable for its sand and gravel content. Parcel 4 consists of the buildings, tools, etc., used in and upon said land in the conduct of the business of the petitioner in producing and selling its sand and gravel. Parcel 5 consists of certain shares of stock in the Beaver Portland Cement Company which owned .and operated a cement plant near Gold Hill, Or., and the entire capital stock of the Oregon Gravel Company which owns and conducts a sand and gravel business near Salem, Or. The stock of the Beaver Portland Cement Company above…

(dissenting).

The decision of the court is a commonsense and practical solution of this particular problem. In usual lay parlance it is an “equitable” solution. If the doctrine of de minimis were applicable I would concur, but here we are sitting as a court of equity dealing with legal rights. The decision substitutes a new contract for that of the bondholder though neither party has pleaded for reformation and the bondholder is not seeking a new contract giving him a lien essentially different from that of the trust indenture securing his bond.

If we have the power, whether discretionary or obligatory, to create a new contract between the debtor and a bondholder holding a very small percentage of the bonds, we would have such power if 24 per cent, of the bondholders were dis-sentient.

I do not believe Congress intended to or could confer on a court of equity the power to take from any bondholder the rights created by the securing trust indenture — say, that right at the sale to bid the bonds to their face value or the right to have provided insurance on the mortgaged properties or the right to interest and interest penalties, or the right to have the trustee take the burden of…