CORPORATIONS - RATE OF INTEREST ON BONDS AND INTEREST COUPONS AFTER MATURITY

Authors

Abstract

Defendant issued a series of coupon junior income bonds with interest at 5 per cent payable from income at such times as directors deemed prudent. The bonds and some of the coupons not having been paid at maturity, defendant maker redeemed them thereafter with interest to the redemption date at the contract rate (5 per cent). Plaintiff, holder of bonds and coupons, sues to recover the legal rate of interest (6 per cent) after maturity of bonds and coupons. Held, (1) The local law where payable will be followed as to interest on the bond after maturity (in Massachusetts this is the contract rate before maturity) ; (2) Interest on the coupons, if negotiable, detached or not, will be at the legal rate where payable. Sears et al v. Greater New York Development Go. (C. C. A. Mass. 1931) 51 F.(2d) 46.

Recommended Citation

CORPORATIONS - RATE OF INTEREST ON BONDS AND INTEREST COUPONS AFTER MATURITY, 30 Mich. L. Rev. 305 (1931).
Available at: https://repository.law.umich.edu/mlr/vol30/iss2/21