Mercantile Trust Co. v. Wilmot Road District - 275 U.S. 117 (1927)
U.S. Supreme Court
Mercantile Trust Co. v. Wilmot Road District, 275 U.S. 117 (1927)
Mercantile Trust Company v. Wilmot Road District
Argued October 26, 1927
Decided November 21, 1927
275 U.S. 117
1. A covenant in bonds secured by deed of trust that, in case of default, there shall be paid to the mortgage trustee, out of the proceeds of the mortgaged subject matter, and before the payment of the interest and principal of the bonds, a reasonable compensation to the trustee and to counsel it may find necessary to employ means that such payments shall be in addition to payment of the bondholders. P. 275 U. S. 118.
2. A statute creating a special improvement district, ordering an assessment of benefits and the laying of a tax to pay the cost of the improvement not exceeding the benefits assessed, and authorizing a board, in order to do the work, to borrow money on negotiable bonds and to mortgage the assessments for their repayment impliedly authorized the payment of reasonable fees to the mortgage trustee and its attorney, in case of foreclosure, out of the fund created by the assessments. So held where the fund sufficed to pay these costs and the bonds also. P. 275 U. S. 119.
12 F.2d 718 reversed.
Certiorari, 273 U.S. 676, to a decree of the circuit court of appeals affirming the district court in its refusal to allow payments for the services of a mortgage trustee and its counsel in a suit to foreclose a deed of trust mortgage. The mortgage, pursuant to a statute of Arkansas, covered the assessments on lands to be benefited by a highway to be built with the proceeds of the bonds.