Penn Athletic Club Bldg. v. Commissioner
United States Tax Court
The petitioner, mortgagee-trustee for bondholders, after default and pursuant to a remedy provided in the mortgage, giving it a right to demand and receive a conveyance of the property and lease the same and apply proceeds upon the mortgage and expenses, gave such notice and received a deed to the property from the owner containing the usual expressions of absolute conveyance, but providing that the mortgage should continue in effect and title not merge with the mortgage.
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The petitioner, mortgagee-trustee for bondholders, after default and pursuant to a remedy provided in the mortgage, giving it a right to demand and receive a conveyance of the property and lease the same and apply proceeds upon the mortgage and expenses, gave such notice and received a deed to the property from the owner containing the usual expressions of absolute conveyance, but providing that the mortgage should continue in effect and title not merge with the mortgage. The debt was released. The parties did not intend the conveyance as absolute. The conveyance was necessary in order to…
1DissentHaRlan, J.
In January of 1941 the petitioner, as mortgagee-trustee for the first mortgage bondholders of the Penn Athletic Club Building, was confronted with a problem. The mortgagor, the Penn Athletic Club, had been in default under the terms of the mortgage for a period in excess of a year, and it owed real estate taxes on the mortgaged premises for the years 1939, 1940, and 1941 in the amount of $317,869.28 and was unable to meet even the minimum interest requirements under the mortgage. The Securities and Exchange Commission wanted to make a long term lease of the club building and was insisting…
2Cases cited2 opinions
- Holmberg v. Hardee TrusteesSupreme Court of Florida · 1925
- Swinson v. SodamanAppellate Court of Illinois · 1939