National Union Mortgage Corp. v. Potomac Consolidated Debenture Corp.

During the period preceding the nation-wide depression which broke in 1929, what were commonly known as mortgage companies sprang into existence and proved to be attractive outlets for millions of dollars then held by investors. The plan under which these companies operated was that of issuing bonds against the security of mortgages upon real and leasehold property held by them and selling these bonds to the investing public. To add to the attractiveness of the class of investments above indicated, the companies elicited the co-operation of surety corporations, to the end that the latter, for…