Mermelstein v. Thermoid Co.

Third Circuit

Mermelstein v. Thermoid Co.

85 F.2d 913, 1936 U.S. App. LEXIS 4275

CourtCourt of Appeals for the Third Circuit

DecidedSeptember 23, 1936

DocketNo. 5564

StatusPublished

Cited by2 cases

This text of 85 F.2d 913 (Mermelstein v. Thermoid Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Mermelstein v. Thermoid Co., 85 F.2d 913, 1936 U.S. App. LEXIS 4275 (3d Cir. 1936).

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Opinion

BUFFINGTON, Circuit Judge.

In the court below Milton E. Mermelstein, owner of twelve five-year 6 per cent, sinking fund gold notes issued by the Thermoid Company, brought suit against such company to recover such matured bonds. [914]*914Thereupon the latter moved to dismiss on the ground that plaintiff had no individual cause of action, but was bound by the provision that the individual bondholders had no right of action until the trustee had neglected to institute proper proceedings by way of remedy at the request of 25 per cent, in principal amount of outstanding notes. On the other hand, the plaintiff contended that, by virtue of a particular maturity provision in the bond, he had an unrestricted cause of action on maturity default After the case was decided the same clause came m question m a suit m the Court of Errors and Appeals of New Jersey, and it was there held that the individual stockholders could maintain a suk . -

, ., After argument and serious consideration, we are constrained to agree with the conclusion reached by the Court of Errors and Appeals of New Jersey in the case of Bullowa v. Thermoid Company, reported in 114 N.J.Law, 205, 176 A. 596

The bonds were issued by a New Jersey corporation, the highest court of that state has construed the contract in its able and exhaustive opinion, and, after protracted study and careful consideration, we are constrained to adopt its view. So regarding the judgment below is reversed and the cause remanded for procedure in due course in accord herewith.

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BUFFINGTON, Circuit Judge.

In the court below Milton E. Mermelstein, owner of twelve five-year 6 per cent, sinking fund gold notes issued by the Thermoid Company, brought suit against such company to recover such matured bonds. [914]*914Thereupon the latter moved to dismiss on the ground that plaintiff had no individual cause of action, but was bound by the provision that the individual bondholders had no right of action until the trustee had neglected to institute proper proceedings by way of remedy at the request of 25 per cent, in principal amount of outstanding notes. On the other hand, the plaintiff contended that, by virtue of a particular maturity provision in the bond, he had an unrestricted cause of action on maturity default After the case was decided the same clause came m question m a suit m the Court of Errors and Appeals of New Jersey, and it was there held that the individual stockholders could maintain a suk . -

, ., After argument and serious consideration, we are constrained to agree with the conclusion reached by the Court of Errors and Appeals of New Jersey in the case of Bullowa v. Thermoid Company, reported in 114 N.J.Law, 205, 176 A. 596

The bonds were issued by a New Jersey corporation, the highest court of that state has construed the contract in its able and exhaustive opinion, and, after protracted study and careful consideration, we are constrained to adopt its view. So regarding the judgment below is reversed and the cause remanded for procedure in due course in accord herewith.

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85 F.2d 913, 1936 U.S. App. LEXIS 4275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mermelstein-v-thermoid-co-ca3-1936.

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