BILLS AND NOTES-BONDS PAYABLE AT OFFICE OF TRUSTEE WHICH BECOMES INSOLVENT AFTER DEPOSIT ACCORDING TO AGREEMENT BUT BEFORE BONDS PRESENTED

By the terms of a trust mortgage securing a large bond issue the debtor agreed that it would punctually pay the principal and interest of every bond according to the terms of the bond and coupons and would "deposit the necessary funds for such purpose with the trustee at least five days prior to the respective due dates." For the maturities of March 1st and September 1st, 1931, the requisite funds were deposited. Plaintiff's coupons of March and his bonds and coupons of September were not presented on the due dates and not until after the trustee had failed and closed its doors in October. In an action to recover judgment against the debtor for the amounts of such coupons and bonds, held, the obligations had been discharged by payment to the trustee as agent of the bondholders. Morley v. University of Detroit, 269 Mich.

216, 256 N. W. 861 (1934).