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BLOCK v. MANSFELD MINING & SMELTING CO.

March 22, 1938

BLOCK
v.
MANSFELD MINING & SMELTING CO.



The opinion of the court was delivered by: MOSCOWITZ

MOSCOWITZ, District Judge.

These are two motions, one by the plaintiff for an order striking out the answer to the amended complaint and praying for summary judgment, and the other by the defendant for an order dismissing that portion of the amended complaint which seeks to recover the principal amount of the bonds and directing that partial summary judgment be entered in favor of the defendant.

It appears from the complaint that plaintiff claims to be the owner of five bearer coupon bonds issued by the defendant which were made payable May 1, 1941. Plaintiff seeks to recover the amount of such bonds together with interest at the rate of 7% per annum from November 1, 1931 to August 20, 1936. The bond to which reference is made in the complaint is as follows:

 "No.

 $1,000.

 "Mansfeld Mining and Smelting Company (Mansfeld Aktiengesellschaft fur Bergbau und Huttenbetrieb) Germany

 "Fifteen-Year 7% (closed) Mortgage Sinking Fund Gold Bond

 "Mansfeld Aktiengesellschaft fur Bergbau und Huttenbetrieb (Mansfeld Mining and Smelting Company), a corporation organized and existing under the laws of Germany (hereinafter called the 'Company', which term shall include any successor company or corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to the bearer hereof or, if this Bond be registered, to the registered owner hereof, on the first day of May, 1941 (unless before said date this Bond shall have been duly redeemed), at the principal office of Brown Brothers & Co., or their successors, as Fiscal Agents, in the Borough of Manhattan, City and State of New York, United States of America, the sum of One thousand Dollars ($1,000), in gold coin of the United States of America, of or equal to the standard of weight and fineness existing May 1, 1926, and to pay interest thereon from May 1, 1926, at the rate of seven per cent. (7%) per annum, in like gold coin, payable at said office, semi-annually on the first day of May and the first day of November in each year until the principal hereof be paid, but only according to the tenor and upon presentation and surrender of the respective coupons therefor, hereto annexed, as they severally mature.

 "Principal and interest, as above specified, shall be paid without deduction or withholding for any past, present or future taxes or charges of any nature of or in Germany or of any state, municipality or other taxing authority thereof or therein. Upon certain conditions and contingencies specified in the Indenture hereinafter mentioned, the rate of interest and the amount of principal which the Company is obligated to pay and which the holder hereof is entitled to be paid, will be increased over the above stated rate and amount to the end that the net sums receivable by the holder hereof by way of principal and interest after deductions or withholdings for certain taxes or charges referred to in such Indenture shall be at the above stated rate and in the above stated amount.

 "This Bond is one of duly authorized issue of coupon bonds of the Company, Known as its Fifteen-Year 7% (closed) Mortgage Sinking Fund Gold Bonds, limited to the aggregate principal amount of Three million Dollars ($3,000,000), all issued and to be issued under and pursuant to an Indenture (herein called the 'Indenture'), dated May 1, 1926, executed between the Company and its subsidiaries, Mansfeldsche Kaliwerke Aktiengesellschaft (Mansfeld Potash Company), Gewerkschaft Konsolidiertes Stolbergaches Kupferschieferbergwerk bei Stolberg am Harz (Stolberg Consolidated Copper Mining Company) and Mansfelscher Metallhandel Aktiengesellschaft (Mansfeld Metal Sales Company), and Allgemeine Deutsche Credit-Anstalt, as Trustee, and The New York Trust Company, as Co-Trustee, and all equally secured and to be secured by a Mortgage executed by the Company and the said subsidiaries in favor of Allgemeine Deutsche Credit-Anstalt, as Trustee. Reference is hereby made to the Indenture and all supplements thereto and to said Mortgage and all supplements thereto, for a description of the property mortgaged, the nature and extent of the security, the rights of the holders of the Bonds with respect thereto and the terms and conditions under which the Bonds are issued and secured.

 "The Bonds of this issue are subject to redemption as a whole at the option of the Company, or from time to time in part by lot, either at the option of the Company, or through operation of the Sinking Fund hereinafter mentioned, on (but not prior to) May 1, 1931, or on any interest payment date thereafter, at One Hundred two and one-half per cent. (102 1/2%) of the principal amount thereof if redeemed prior to May 1, 1933; at One hundred and two per cent. (102%) of the principal amount thereof if redeemed on or after May 1, 1933 and prior to May 1, 1935; at One Hundred one and one-half per cent. (101 1/2%) of the principal amount thereof if redeemed on or after May 1, 1935 and prior to May 1, 1937; at One hundred and one-half per cent. (100 1/2%) of the principal amount thereof if redeemed on or after May 1, 1939 and prior to the date of maturity expressed herein; together, in each case, with interest accrued to the date fixed for redemption; upon notice published once a week for six successive weeks in one daily newspaper of general circulation published, in the English language, in the Borough of Manhattan, City of New York (the first publication to be not less than forty-two days nor more than fifty days before the redemption date), on the conditions and in the manner provided in the Indenture.

 "The Company is required, on the conditions and in the manner set forth in and subject to the terms of the Indenture, to provide Brown Brothers & Co., or their successors, as Fiscal Agents for the service of the Bonds of this issue, with a Market Purchase Fund in the amount of $103,500 annually for five years, commencing May 1, 1927, applicable to the purchase of Bonds, if and to the extent that Bonds are obtainable at or below the principal thereof and accrued interest, and thereafter to pay to the said Fiscal Agents as and for a Sinking Fund, sums calculated as sufficient to provide, by annual purchase or redemption, commencing May 1, 1932, for the retirement of all of the remaining Bonds of this issue by maturity. In lieu of making cash payments as aforesaid to the Fiscal Agents, the Company may, as in the Indenture provided, deliver to the Fiscal Agents Bonds of this issue for cancellation.

 "In case an event of default as defined in the Indenture shall occur, this Bond may become or be declared due and payable at One hundred two and one-half per cent. (102%) of the principal amount hereof together with the interest accrued hereon, in the manner and with the effect provided in the Indenture.

 "This Bond shall pass by delivery unless registered as to principal in the owner's name on the books of the Company at the principal office of the Co-Trustee in the Borough of Manhattan, City of New York, such registration being noted hereon, after which no valid transfer hereof can be made except on said books until after registered transfer to bearer. But after such registered transfer to bearer this Bond shall again be transferable by delivery and shall be subject to successive registrations and transfers to bearer as before. Such registration shall ...


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