On July 27, 1923, Nаthan Manilow and wife executed a first mortgage trust indenture, covering 14 parcels of real estate in the city of Detroit, to the Federal Bond & Mortgage Co., Inc., a Virginia corporation, hereinаfter referred to as the mortgage company, as trustee. The trust indenture secured an issue of 262 first mortgage bonds of various denominations, in the aggregate principal amount of $120,000. The bonds were guaranteed by Joseph H. Optner. The mortgage company in its individual capacity was also engaged in underwriting, selling and dealing in issues of mortgage bonds and notes. The difficulties in the present case once mоre arise largely through the attempt of a corporation . to act in the dual capacity of trustee and banker or underwriter for the issuance and sale of bonds under a trust mortgage. The difference of interest, however, must be recognized. The mort *213 gagors for a number of years promptly paid maturing interest and serial payments of principal and thus reduced the amount of unpaid and outstanding bonds to $75,000, or thereabouts. They, however, defaulted in payments that became due in January, 1930, and thereafter failed to pay principal, interest, taxes and other charges. In October, 1929, the Commеrcial Construction Company, a subsequent purchaser, entered into negotiations with the mortgage company in its individual capacity, culminating in an agreement for a new trust mortgage loan of $125,000, for thе purpose of paying off and discharging the bonds still outstanding under the indenture of July 27, 1923. Although plaintiffs in the Federal court case hereinafter /referred to contend that the above agreement was madе by the mortgage company both in its individual and trust capacity, and although the commissioner who heard the testimony in the instant case so found, the acceptance of the loan applicаtion as set forth in the record is signed by the mortgage company in its individual capacity, and not as trustee. The trust indenture shows no power or authority in the mortgage company, as trustee thereunder, to аlter the rights of the bondholders by any such agreement. The new loan was in fact never granted, but instead the mortgage company in its trust capacity began statutory proceedings to foreclose thе mortgage by publication.
The original mortgagors, the guarantor and the Commercial Construction Company thereupon filed a bill of complaint in the United States district . court for the eastern district of Miсhigan, setting forth the refinancing agreement by the mortgage company in its individual capacity, but also alleging that the agreement was executed by the mort *214 gage company as trustee, notwithstanding the fact that the mortgage shows no power or authority on the part of the trustee to thus bind the first mortgage bondholders. The Federal court issued a temporary injunction restraining the mortgage company from foreclosing by publication until the further order of the court. Shortly thereafter the Federal Bond & Mortgage Company was adjudicated a bankrupt and the Detroit Trust Company appointed succеssor trustee by the Federal court in an independent proceeding. The trust company was also appointed successor trustee • by an instrument in writing, signed by the holders of more than two-thirds in amount of the outstаnding bonds. It began the instant foreclosure proceedings in chancery in the circuit court of Wayne county, against all the interested parties, including the Merchants & Manufacturers Securities Company, a Delaware corporation, and a subsequent mortgagee. Defendants appeared specially and moved to dismiss on the ground that a Federal court suit covering the same subject matter was still pending, and that the injunction issued therein was a bar to the foreclosure proceeding. The motion was denied and a decree of foreclosure subsequently entered, from which defendants hаve appealed.
As a rule, when a court of competent jurisdiction becomes possessed of a case, its authority continues until the matter is finally and completely disposed of, and nо court of co-ordinate authority is at liberty to interfere with its action.
MacLean
v.
Wayne Circuit Judge,
A somewhat analogous situation arose in
Pierce
v.
Feagans,
“The parties to the two suits are not identical, and the relief sought is not the same. * * * It is true that, under the practice which obtains in the State court, the complainants who are defendants there might file a cross-petition, and pray for a foreclosure of the mortgage, but they are not bound to do so.”
Again in
Washburn & Moen Manfg. Co.
v.
H. B. Scutt & Co., Ltd.,
“The object of that suit (the State court proceeding) is the rescission оf the license contracts, whereas the purpose of this suit is the enforcement thereof. Clearly, the relief sought here is not attainable in the former suit. Perhaps a cross-bill might bring the whole controvеrsy before the court of common pleas, but the complainants are not bound to take that course.”
As a matter of fact, no answer has ever been filed in the Federal suit, and defendants in the instаnt proceeding have never .seen fit to prosecute the Federal action any further since the filing of their bill of complaint, although that case has been pending for over four years. There is no reason why they could *217 not have proceeded to obtain such relief as they were entitled to in the Federal action, and that action is no bar to the present foreclosure suit in chаncery.
The further claim is made that the Detroit Trust Company, plaintiff herein, was not regularly appointed successor trustee in accordance with the provisions of the first mortgage indenture. The Fedеral Bond & Mortgage Company was removed as trustee and the Detroit Trust Company appointed successor trustee by the action of the consolidated bondholders’ committee, holding over two-thirds of the outstanding bonds under the first mortgage. An apparent inconsistency appears in the provisions of the trust indenture, one section stating that the trustee may be removed by an instrument in writing signed by the holders of not less than two-thirds in amount of the bonds then outstanding, while another section states that if the vacancy is not filled within 10 days after its occurrence, it may be filled by an instrument in writing signed by two-thirds of the holders of bonds then outstanding. Defendants claim that the latter section, providing for the appointment of a successor trustee, requires the signatures of two-thirds in number of the holders of bonds then outstanding, and that the appointment of the Detroit Trust Company, which was executed by a bondholders’ committee, was therefore of no effect, although the committee held more than three-fourths in amount of the outstanding bonds. We do not recоgnize any merit in this contention. The obvious intent of the provision was to authorize holders of two-thirds in amount of the bonds then outstanding to act, rather than two-thirds of the number of bondholders.
State, ex rel. Mitchell,
v.
Horan,
The decree of the trial court granting foreclosure in the instant case is herewith affirmed, with costs to plaintiff.