Some Legal Phases of Corporate Financing, Reorganization And Regulation
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^ Mr. Justice Brewer in his opinion said (p. 927) : "There is no wide discretion vested in the chancellor which permits him to disturb contract rights — rights of property," and quoted the language of the United States Supreme Court in Kneeland v. American Loan Co.,^ where it said (p. 97) : " ' One holding a mortgage debt upon a railroad has the same right to demand and expect of the Court respect for his vested and con- tracted priority as the holder of a mortgage on a farm or lot. . . . We em...phasize this fact of the sacredness of contract hens, for the reason that there seems to be growing an idea that the chancellor, in the exercise of his equitable powers, has unlimited discretion in this matter of the displacement of vested hens.' " Mr. Justice Brewer goes on to say, referring to the Plan of Reorganization (p. 929) : "Now, that may be a wise business proposition, and if the court had power to take hold of these things and do for the people, who are mortgage bondholders, that which it thinks best for them, we might have no hesitation in sustaining this ; but every man in this country decides questions in respect to his own property for himself." There have, of course, been not infrequent instances in which the courts have successfully interfered with the execu- tion of plans of reorganization, but, in every case, upon the 1 Merchants Loan & Trust Co.
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