I concur in the decision reached in the principal opinion, and in all of its findings with but one exception.
[9] The principal opinion shows that Bilton, one of the plaintiffs, wanted to write the bondholders expressing his views opposing the extension. The list of bondholders and their addresses was in the sole custody of the corporate trustee of the mortgage indenture. Bilton requested the corporate trustee that it either furnish him a list of the bondholders or transmit a letter from him to the bondholders setting out his objections to the extension. In response to his request the corporate trustee referred him to the law firm which was representing both the apartment corporation and the stock trustees. This law firm had assisted the stock trustees in preparing their first letter to the bondholders which the corporate trustee had transmitted. *Page 229
On the advice of this law firm the stock trustees declined to recommend to the corporate trustee that it transmit Bilton's letter to the bondholders. The apparent ground of the stock trustees' refusal was that a statement in Bilton's proposed letter was not entirely correct. He stated therein: "We believe that a considerable portion, if not all of these bonds, are owned or controlled by one or more of the following persons, namely, Lucius Teter, or Frank W. Blair, or Oscar E. Buder, who are alsothe directors and officers of the corporation, and whose stock interest comes after our bonds." The true fact was that only one of those named, Buder, through the Buder syndicate, owned and controlled any bonds. So in stating the alternative that more than one of the stock trustees might own bonds, Bilton's belief was not precisely accurate.
We do not find the stock trustees suggested the proposed letter be corrected. Nor did they offer to recommend the mailing of the letter together with their own statement setting out the true fact. Their failure to cooperate becomes more significant when viewed in the light of their own letter later transmitted by the corporate trustee to the bondholders. In that letter they made a definite misstatement about the amount of bonds in which Buder had an equitable interest. They limited the amount to $105,000, the bonds acquired from the Central States Life Insurance [963] Company. They failed to disclose the additional $80,100 of bonds then owned by the Buder syndicate. So we find the stock trustees refusing to aid Bilton because his letter stated his belief which was not precisely accurate, and then procuring the aid of the corporate trustee in sending out their letter which was positively inaccurate.
Thus we find the stock trustees in a somewhat anomolous position. They, as representatives of the bondholders, were sending letters to the bondholders through the corporate trustee soliciting consents to an extension of the bonds. At the same time they refused on a highly technical ground to aid in opening the door to admit the views of a bondholder opposing the extension.
The effect of the refusal of the stock trustees was to prevent a full disclosure of the true picture to the bondholders whom they were representing. I think this was unfair on their part. This does not show high good faith in the use of their judgment.
Accordingly, I disagree with the findings of the principal opinion that such refusal did not disclose any unfairness on the part of the stock trustees. I think it did.
Clark, Conkling and Hyde, JJ., concur and concur in separate concurring opinion. *Page 230