Idaho-Oregon Light & Power Co. v. State Bank of Chicago

[1] (after stating the facts as above). The controversy in the court below concerned the disposition of 825 of the first mortgage bonds claimed to be owned by the Railway Company. Its right to hold 107 of those bonds was attacked on the ground that the certification of the trustee and delivery of the same to the Power Company were unauthorized under the terms of the trust deed, in that they were certified and delivered after default in the payment of an installment of interest due on the bonds already *42 sold. There is no prohibition in the trust deed against issuing the bonds under those circumstances, and such a prohibition is not fairly to be implied from its terms. We find no error in the conclusion which the court below reached upon that branch of the case; the court ruling that those bonds were duly and legally certified, and delivered as collateral, and were held by the Railway Company as collateral, and reserving the right to determine the status, title, and ownership of those bonds in another proceeding. The remainder of the 825 bonds in controversy were issued in two groups, one of 440 and one of 278, in September and December, respectively, 1912.

By September, 1912,…