Jackson v. United States

Central Wholesale Market Company, a California corporation, owned certain property in the City of Los Angeles, consisting of feal estate and improvements, parts of which were held in fee and parts of which were leaseholds. The corporation in 1927 executed a mortgage and trust indenture on the above property to secure a bond issue. The company defaulted in its payments. Appellants are the duly qualified and acting members of Bondholders’ Protective Committee for Central Wholesale Market Company First Closed Mortgage Six and One-half Per cent Sinking Fund Gold Bonds, formed pursuant to a Bondholders’ Protective Agreement. Appellants, as members of said Committee, instituted this action.

At the time said Bondholders’ Agreement was entered into, there were outstanding $550,000 face value of defaulted bonds of Central Wholesale Marketing Company, of which amount $529,000 face value of bonds were deposited with the depositary, as provided in said Protective Agreement.

By the provisions of the Bondholders’ Agreement the Committee, as trustee, was vested with legal title to, and ownership of, all deposited bonds. No limitation is imposed on the powers of the Committee as the legal…