Detroit Properties Corp. v. Detroit Hotel Co.

On March 1, 1926, the Detroit Hotel Company executed a mortgage on certain real estate owned by it to the Union Trust Company as trustee to secure bonds to the amount of $4,100,000, bearing interest at 6% per cent. On March 8th following, it executed a second mortgage on the same property to the Guardian Trust Company as trustee to secure bonds in the sum of $1,500,000, bearing interest at 7 per cent. The purpose of these loans was to obtain money with which to build and equip a hotel on the property, and this was done; $1,425,000 Tace value of the 7 per cent, bonds were issued.

On August 12,…