Gilfillan v. Union Canal Co. of Pennsylvania - 109 U.S. 401 (1883)
U.S. Supreme Court
Gilfillan v. Union Canal Co. of Pennsylvania, 109 U.S. 401 (1883)
Gilfillan v. Union Canal Company of Pennsylvania
Argued April 20, 1883
Decided November 26, 1883
109 U.S. 401
1. A provision in an act for the reorganization of an embarrassed corporation which provides that all holders of its mortgage bonds who do not, within a given time named in the act, expressly dissent from the plan of reorganization shall be deemed to have assented to it and which provides for reasonable notice to all bondholders does not impair the obligation of a contract, and is valid.
2. When a corporation, being embarrassed, and owing money to its mortgage bondholders and to others, was authorized by the legislature from which it obtained its franchises to make settlement with its creditors on a plan which provided that all holders of its mortgage bonds who did not, within a fixed period, dissent in writing from the proposed settlement should be deemed to have assented, and when a large majority of such bondholders assented to such plan, and some dissented, and the plan went into operation. Held that a holder of such bonds who had due
notice, and opportunity to act, and who neither assented to nor dissented from the plan within the time, was bound by its terms as fully as if he had expressly assented to it.
Suit to recover interest on coupons of mortgage bonds. Judgment in the state court for the defendants.
The facts and the alleged causes of error are stated in the opinion of the Court.