The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1892-07-28

luIS SnOWluS III COulu NC duHulttSu
that Chun Hoy was authorized to
loan money November 1st, 1890,
which would be a very liberal con-
of his authority, he must
be held strictly to the Limitation
expressed in the letter, "to those
who have good standing" He
would be held to this rule if there
were no such words of limitation,
for one holding trust funds with a
general power to invest, is usually
limited to regular investments, as
they are called, which are securities
having a recognized status as re-
CARDS safety and reliability.
A trustee departing from
this rule, especially il he consults
his own interests rather than those
of his principal, is liable unless he
can show special authority for such
action. In the case of Chun Hoy,
his defense does not show a mitiga-
ting circumstance or scintilla OF
excuse for his transaction with Hop
per. A few days after his princi-
pal had sailed for China, and while
he was owing large amounts in the
neighborhood of $50, 900 to the de-
PENDANT Hopper, and his whole
property was mortgaged therefor,
he loaned himself 9,600.79 of the
plaintiffs money giving no security
therefor except his note of hand
payable in two years with interest
at seven per cent. This money is
paid to Hopper on account of his
debt, and instead of obtaining re-
leases of the membranes on his
estate by virtue of this payment,
for the benefit of the plaintiff, the
mortgages are kept intact and the
payment of his debt is made the
occasion for new advances from
Hopper, presumably under the Sc
curity of the old mortgages referred
to. This transaction was not re-
ported by him to Along for some
six months later, and then only in
answer to Afong's Inquiries, he
having heard of it through third
parties.
The defendant Chun Hoy defends
the transaction by saying that his
plantation was ample security for
the repayment of the amount. The
defendant Hopper, however, says
in his answer that 'sif the payment
set forth in the complaint had not
been made, this defendant upon no
consideration would have advanced
such further amounts, (new adj
vances) which would have brought
the Indebtedness of said Chun Hoy
to over $4,000, and entirely out
side of the limits of said mortgages,
and which amount would not be
and cannot be properly secured by
the securities named in said mort
cages" From which we may con-
clude that what was not good secu-
rity for further advances by Hopper
could hardly have been good for a
loan from Along.
1t further appears by the en-
dorsement on the note, of payment
on account of the principal while it
was still in Chun Hoy's possession
aud before any of it was due, j. e.,
in January and February, 1891, that
he regarded it as an accommodation
loan for his own benefit rather than
regular investment according to
the terms of the note. This view
of the matter is fully supported by
Chun Hoy's letter to Along written
in May, 1891, in which he uses the
following language: "You further
state that you don't understand
about the money that 1 drew from
Bishops banking account for the
payment of Mr.. Hopper's account
and so forth. But this Is how il
was, I, your nephew, temporarily
borrowed it for the payment of Mr.
Hopper's account. You instructed
me to keep the said money and re-
NIT it when the premium was ia
vorable, but at that time the pre-.
MUM was only 10 per cent. OF
Whereabouts and / did not know how
long to wait. Because there is nc
interest if the money is kept in the
bank, I therefore used my discre.
ton with it; that is, first for my
benefit, second to your benefit. ]
have carefully given thought about
this matter but you are as rich as q
millionaire and l consider this as a
small amount to you" Then fol-
lows a string of sentimental moral
izing including a request that the
plaintiff would overlook the matter.
After this frank confession and
apology further comment is hardly
necessary. 1t is interesting that
this defendant in his letter values
his plantation at 100000 and
MORE" while in his Testimony
taken for this case, he values it sat
between 500, 1000 and $50, O00."
] therefore find that there was a
misapplication of funds by Chun
Hoy and that he is liable to Along
therefor, unless Along ratified the
transaction by accepting Chun Hoy's
note. This is an unsecured note
for $50, 600.79 payable in two years
from November 1st, 1890, with int
crest payable annually at seven per
cent. 1t was delivered by Chun
Hoy to S. M. Damon, the plaintiffs
new attorney, with other docu-
ments belonging to the plaintiff and
was receipted for under the follow
ing description: ga document pur-