TRUST DEED

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A species of mortgage given to a trustee for the purpose of securing a numerous class of creditors, as the bondholders Of a railroad corporation, with power to foreclose and sell on failure of the payment of their bonds, notes, or other claims. In some states, and in the District of Columbia, a trust deed or deed of trust is a security resembling a mortgage, being a conveyance of lands to trustees to secure the payment of a debt, with a power of sale upon default, and upon a trust to apply the net proceeds to paying the debt and to turn over the surplus to the grantor. A “trust deed” on real estate as security for a bond issue is, in effect, a mortgage on property executed by the mortgagor to a third person as trustee to hold as security foT^e mortgage debt as evidenced by the bonds, for the benefit of the purchasers of the bonds as lenders.