The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1901-05-31
.esa..a..ia .. .as -
FRAUD is
ALLEGED
Broker J. Q. Wood
Accused by a
Client.

J . Wood. who was formerly a
stock broker in this city, ana vino Is
Lat present making tour " Europe
/ has bpon made defendant IN SUIT
/ brought by James W Bergstrun, VINO
I charges fraud. to cancel pronlissory
note. Hnd applying for an injunction
| from the First Circuit court prohlDit'
I ing wood from negotiating the promis-
I sorry note, which amounts to s. 900 and
| tn compel him to return five shares OF
| Naiaua Agricultural stock and SIX
teen shares of the Bcrgstrom Music
Company stock.
The plaintim states that on OF about
May 90 1899 Wood was engaged IN the
business of stockbroking IN Honolulu.
and that on that date plaintth employ
ed defendant to purchase for his ac-
count % shares of paid-up stock oi
the Waialua Agricultural Company at
a price not to exceed 5000 "A share. and
that thereupon IL was agreed between
petitioner and defendant that upon the
contamination of such purchase peti-
tioner should give defendant his prom
issory note for the purchase price
| thereof, with interest at per cent,
| payable semi-annually, the note to be
paid two years after date, with the
privilege of extending the same one
year and that Wood should hold AS
collateral security the said twenty-five
shares of Waialua assessable, and six
teen shares of paid-up stock OF the
Bergstrom Music Company.
Wood notified Bergstrom on May 70
that he had purchased twenty-five
shares of Waialua stock at 5000 per
share who thereupOn delivered his
promssory note for $4,000, together
with the other shares mentioned.
Wood did not deliver the twenty-five
Waialua shares, but defendant beiiev-
ed Wood was holding them as collater-
al security on the note.
Petitioner alleges the truth to be,
that neither on the goth of May. 1899,
or at any other time whatever, did
defendant purchase for or on account
of petitioner said twenty-five shares of
paid-up stock of the Waialua Agricul-
tural Company, at 5000 per share. But
this petitioner alleges that said aileg-
ed purchase of said twenty five shares
of paid-up stock OF the Waialua COM
pany was false and pretended. and that
the acceptance of said promissory note
and collateral security of petitioner by
defendant was fraudulent on the part
of said defendant"
Bergstrom states that relying upon
Woods statement, and believing that
the purchase had actually been maze
! on his account. as alleged, he duly paid
the interest on the note up to and tn
Guiding the payment due on November
90 1900. In the month of November.
upon paying the installment or interest
due on November 20, to the Hawaiian
Trust and Investment Company. which
was the agent of Wood, who was then
travelling in foreign countries, he was
| informed by the trust company that
there were assessments due upon the
| shares of Waialua Agricultural stock
held by the agent of defendant as col
| lateral, other than the nve shares OF
| assessable Waialua stock upon which
Bergstrom had duly paid the assess
ments
Then, for the first time, Bergstrpm
states, he examined the shares OF stock
so held as collateral by Wood, and sap
posed to have been paid-up shares OF
stock purchased for Bergstrom. ana
found that the stock as represented by
the following certificates: No. $50. of
five shares, issued to Wood July 5. 1893.
five assessments paid No 862. for ten
shares of paid-up stock of the waIa-
lua company, issued to Wood July 10.
1899: No. 1901. for ten shares assessa
BILE stock, issued to Wood January 2.
1900, with five assessments.
On May TO- 1899, the market price or
paid-up shares of Waialua, as shown
by the published reports of the Homo
lulu Stock Exchange, was 1921 asked
vi July o. 1909, tic hct SdAut ct
assessable shares was los bid. and 1eTn
asked; of paid-up stock. 152h bid. and
$50 asked, and that upon that day
there was twenty-five shares of said
assessable stock, SO per cent paid
at 1917, and that upon July 10. 1899.
the market price of paid-up stock was
14S bid, and 1921 asked.
Bergstrom, upon being advised OF his
rights, elected to repudiate said pre-
tended purchase of stock Tor MIN on
May 20, 1899 and gave Wood due no
tice of such election. and requested
the immediate return and cancellation
Of his promissory note for $5.e08 and
the return of interest paid thereon. ana
the additional security. Wood refusing
to accede to Bergstrom's demands, no
titled Bergstrom to that effect. which
was received by the petitioner on April
%, 1901.
He says there is danger that defend
ant or some one in his behalf may
negotiate the promissory note to a
bona tide purchaser for value without
notice of the equities existing between
the parties, or that Wood may bring
an action for the principal, or some
one may hypothecate the five addition
al shares of Waialua and sixteen
shares OF Bergstrom music shares. and
| Bergstrom therefore asks to have the
same returned, together with the
promtssory note and the interest he
has already paid. amounting to $500.