The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1899-10-31

Continued from Page ~
to San Francisco for the purpose of
placing these shares.
Mr.. Dillingham; claimed that his
agreement with Soper and Valentine
could be cancelled by him Mt any time
prior to their selling the shares, and In
September, 1898, he notified them that
their authority to sell the shares was
cancelled.
Mr.. Dillingham; thcreupon proceed-
ed to dispose Of these 10000 shares In
Honolulu.
Soper and Valentine refused to rec
ognihe Dillingham's authority to can
eel their agreement and proceeded to
sell The shares in San Francisco.
These transactions resulted In two
sets CT claimants for these 10000
shares. one in San Francisco and one In
Honolulu.
The company had recognized the
Honolulu subscribers, entered their
names on the corporation books and &C.
cepted the first assessment from them.
On behalf of themselves and those to
whom they had sold stock, Soper and
Valentine thereupon brought suit
against Dillingham; and the company
for the purpose of obtaining compensa-
ton for the sale and to procure the
shares with which to carry out the
issuance of an Injunction prohibiting
the company from issuing the 10000
shares to the Honolulu subscribers.
Later the San Francisco subscribers
had filed similar suits in equity to Sc
cure the stock, an injunction being is
sued in each case against the company
prohibiting 1t from issuing shares to
the Honolulu subscribers.
The Soper suit was, after a trial OF
seven weeks In the Circuit Court, deci-
ded in favor Of Soper's views Of the
law. and the company was ordered to
issue the shares In question to the San
Francisco subscribers.
Dillingham; and the company had the
privilege Of appeal from this decision.
THE COMPROMISE PROPOSITION.
Meanwhile a proposition OF compro-
mise had been presented to Soper and
the San Francisco subscribers which
they were willing to accept.
So far as Dillingham's personal liza
.biiity to Soper was concerned that
would be settled by itself and had moth
ing to do with the company.
So far as the company was concerned
the compromise proposed was, that the
company should issue 10000 shares Of
assesable stock of a par value Of 81, OOO,-
900 to the Honolulu subscribers, the
San Francisco subscribers having been
decreed by the Circuit Court to be the
owners of the stock already authorized.
Too,
on behalf Of SOper when the litigation
first began and at that time was re-
fused by Dillingham; and the company
Later the San Francisco subscribers
had repeated the offer, which was
again refused.
The proposition now made is there
fore the third time that 1t has been up
for consideration.
The suggestion had been made that
the proposition was one to help Mr..
Dillingham; out Of hole.
Certainly neither Soper nor Valen-
tine nor the San Francisco subscribers
had that object In view. Each Of them
in his own interest lad agreed to the
compromise. 1t was cOld-blooded
business proposition for the company
to consider whether or not 1t was for
its interests to approve of the compro-
mise.
INTERESTS OF STOCK
HOLDERS.
The stockholders of the company
were divisible into three classes, each
having interests more or less distinct
from the other. The three classes are:
/. The so-called Dillingham; subscri
bers.
3. The holders of paid up stock. -
8. The holders of assessable stock
not involved in the litigation.
There could be no question but that
the compromise would be beneficial to
the Dillingham; subscribers.
There was decree Of court deciding
that they were not entitled to the stock
and that the San Francisco subscribers
were.
The burden was upon the Honolulu
to obtain recognition Of
their claim.
A measure which would give them
the stock would be therefore beneficial
to them.
THE STOCK NOT IN LITIGATION.
The distinct interest of the assess
able stock not In litigation from that
of the paid up stock and the Dilling-
ham stock consisted in the following
facts:
"a The Injunction of the court pre-
vented the company from issuing
shares to the Dillingham; subscribers.
(2) This gave the Dillingham; sub
scribers the right to refuse to pay their
unless they received the
stock or secured receipts therefor, and
a very large number Of them had 30 re-
fused.
90 The result of this situation was
that in order to enable the company to
continue its business. assessments had
to be levied more frequently In order
to secure money from owners Of the
stock not In litigation; or. In other
words. the company was able to call as
sessments from only one-half OF the as
sessable stock of the company; 60 per
cent. or 100000 of this had already
been levied, leaving only 100000 to be
collected.
The result was that the shares not
In litigation were being compelled to
nau mona thu N thair nrn a v,nnut oil