The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1885-02-04


Before Chancellor Jrdd. Opinion Of he Cont.
The plaintiffs are assignees of Lee Chat, a
bankrupt.
On the 9th of March 1888, Chang Yau,
small trader in Hilo, after having heard that
Lee Chat, to whom he owed considerable
sum of money, had absconded the Kingdom,
made cbattel mortgage of all his stock of
dry goods, provisions, 4" and all other goods,
wares and merchandise now in my store on
Front ST., town of Hilo," to W. S. Akana and
Acho to secure four promissory notes in favor
of Akana amounting to $500 and one in favor
of Acho of $500. The notes and mortgages
were made payable on demand, and payment
of them all was demanded the next day,
March 2sth. Possession of the goods in the
store was taken by Akana a few days later
and sold at auction about month later, the
sale realizing about ST. 400. Judgment was
also confessed on these notes by defendant
Chang Yau in the Police Court of Honolulu.
The bill prays iHter ala that the mortgage
may be adjudged fraudulent and void as
against the plaintiffs. 1t is in evidence that
Chang Yau, some six or seven months pre-
vious, desiring TO open store in Hilo Dor
rowed $50. Of Akana (whose wife was his
cousin) TO pay for his retail license, and a
month later Akana advanced him $500 as capi-
tai. About this time Ali Yau came to Honolulu
and bought goods of Lee Chat and had them
marked in Akana's name. There is some tes-
| timony to the effect that Akana guaranteed OF
| became surety for this account, but am not
at liberty to consider it, for in an action tried
in this Court 10 hold Akana thus liable was
decided adversely 70 this position and it is
res ddjudicdtd. Lee Chat continued to send
goods as ordered to Chang Yau, and received
occasional remittances. After Leo Chat alb
seconded, his assignees in bankruptcy recov-
cred a judgment against Chang Yau for 50, :
600 and it is still unsatisfed. Meanwhile
Akana's wife loaned Chang Yau $500. and
Akana paid a bill Of $3.50 for lumber used in
| fitting up the store.
The amonnt of $500 for which Chang Yau
gave his note to Acho one day before the mort
gage was made, need not be considered, as
Acho was not served with process, being alb
sent in China hm
think it is clear from the evidence in the
case that Akana had reasonable cause to be-
lieve that Chang Yau was insolvent when he
| took the mortgage upon his stock in trade. Loo
Ngawk testifies that Akana admitted to him
that he knew that Chang Yau owed Lee Chat
over $4,000. Having married his cousin and
allowing him to have his goods sent in his name
and advancing him money for his license and fol
| fitting up his store, il cannot be supposed thai
in small town where the business was under
his daily observation he could taye been ig-
norant of the condition of Chang Yau's bust
ness. His haste in getting a mortgage execu-
ted, made by its terms payable on demand, af-
ter be heard that Lee Chat had absconded
leaving large Indebtedness, and knowing thai
prompt measures would be taken by Lee
Chats creditors to collect all available assets
his haste in taking possession, closing the
store and selling the goods are to my mind
all iRdicid of fraud. He certainly knew thai
the money he advanced to pay for license and
for Hitting up the store was not invested in
The goods he seized and which realized at an
auction sale more than his whole debt, and
that Chang Yau, was without capital except AZ
he supplied it and that the stock Of goods
was procured on credit, and that the shor
time Ia few mouths) in which he was in bust
ness had not suficed to enable Chang Yau tc
pay, his Hqnolulu creditor from his profits
cannot Consider him as = bona-fde pnr-
chaser projected by The statute.g #s -
pass now 70 another point made BY ths
compliments. The certificate Of acknowledge
neqt t1 the mortgage 10 asfollovs;s
Hilo, Hawaii
Hawaiian Isles. o o. ~ .
on this 27th day Of March, A. d. iss3 per.
sonally appeared before nc--known tC
me who acknowledged that be executed thu
foregoing instrument freely and voluntarily
and for tue uses and purposes therein SCI
! forth. Given under my hand and seal
d. II. HITCHCOCK, Notary Public.
The seal Of the rotary is mt affixed 70 IN
iustrnmenl This eefliHcaic does not loihpls
with the form pfsscfibea ~ Tie Act ii 81
in that it omits the substantial part, that the