BILLS AND NOTES - INCORPORATION BY REFERENCE - CLAUSE IN MORTGAGE LIMITING BONDHOLDER'S RIGHT TO SUE ON BOND
Plaintiff, a holder, sued for the principal of and interest on matured bearer bonds which were part of an issue secured by a trust mortgage. Each bond, which was otherwise negotiable, recited that it was secured by a mortgage, "to which indenture reference is hereby made for a statement of the rights of the holders of said bonds." The mortgage provided that all rights of action on the bonds were vested in the trustee and that no bondholder could sue on the primary indebtedness until he had fulfilled certain prerequisites relative to giving the trustee an opportunity to sue. These prerequisites had not been fulfilled and the defendant contended that this was a bar to the action. It was held that the bond was negotiable, and there being no notice on its face of a limitation of the right to sue on it, plaintiff was not bound by the provision in the mortgage. Cunningham v. Pressed Steel Car Co., 265 N. Y. S. 256 (1933).
BILLS AND NOTES - INCORPORATION BY REFERENCE - CLAUSE IN MORTGAGE LIMITING BONDHOLDER'S RIGHT TO SUE ON BOND,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol32/iss3/12