Defendants were officers and directors of the Lincoln Trust Company, which was acting as trustee for the holders of certain bonds secured by a mortgage. Among other things, the trust instrument provided that the Trust Company should foreclose whenever a breach of the conditions of the mortgage should occur. The mortgagors defaulted on interest payments, but the Trust Company nevertheless advanced the amount of the interest to the bondholders without notifying them that the mortgagors had defaulted, the concealment being apparently for the purpose of maintaining the market value of the bonds. In an action brought by the successor trustee against the officers of the original trustee (the original trustee itself being insolvent); held, defendants were liable for damages for breach of trust in not foreclosing the mortgage and in not giving notice of the default. First Trust Co. of Lincoln v. Carlsen, (Neb. 1935) 26r N. W. 333.
CORPORATIONS-LIABILITY OF OFFICERS OF CORPORATE TRUSTEE FOR BREACH OF TRUST,
Mich. L. Rev.
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