The Honolulu republican. [volume] (Honolulu, T.H.) 1900-1902, 1901-06-28
IMPORTANT POINTS
JUD|rIILT DECIDED
Arise in Settlement
of J. w. Winters
Estate.
lDKIaIsTalIoR LOSES THE CASE
EXCEPTION TO RULE REQUIRING
TRANSFERS or SHARES TO
BE REcoRDED.
Three Justices Write Separate opin-
ions But Two coneur-Unanimous
Opinion Refuses Relief to Victim
of Broken Faith.


OElBAldi SUBMISSIONS were male 70
the Supreme Court in which B. L.
Marx, administrator of the estate of
]. w. Winter. deceased, was plaintiff
and Phoebe A Parmelee and Bishop
& Co. respectively. were defendants.
The facts in both cases being similar
and the law question involved being
the same, they were argued and sub
mitted together.
Justice Galbraith writes the opinion
of the court in the matter, Chief Jus
tice Frear writing a separate opinion
concurring with the former Justice
Perry dissents from his colleagues
Winter in his lifetime executed and
delivered to HOLSTER & Co., partner
ship, his promissory note for s., 900
and deposited with the payee as col
lateral security a certificate for thirty
shares of the Hollister Drug Co., Ltd,
the stock being owned by Winter and
the certificate in his name. The GER
tificate was also endorsed in blank
before delivery to the Pledge. At
taehed to the note was written
agreement by Winter providing that.
il the note and interest were not paid
at maturity, HOLSTER & Co. might dis
pose of the security at public or pri-
vate sale, with or without previous
notice, and from the proceeds pay the
entire debt and charges, the balance
if any to be paid to Winter or his rep
resentatives upon demand. The agree
ment also provided that il the prin-
cipal and interest should be paid, the
certificate of stock should be return
ed to Winter HolIister & Co. assign
ed the note to Mrs. Parmelee and de-
livered it to her with the power of
agreement before mentioned. No new
certificate was issued nor was any
entry or record of the pledge of the
stock made in the stock book of the
Hollister Drug Co. Mrs. Parmelee's
claim for s2406 on the note with in
terest against the estate of Winter
was allowed by the administrator.
The estate OF Winter was insolvent
and the administrator claimed the
possession of the pledged certificate
and the right to sell It for the benefit
of all of the creditors.
Bishop & Co. come in with claim
on a note of Winter for $500 secured
by sixty other shares of Hollister
Drug Co. deposited as collateral. The
circumstances are the same as in the
other case Bishop & Co.'S claim for
1924 was allowed by the administra
tor.
Section 2016 Civil Laws reads:
Whenever the capital stock of any
corporation is divided into shares, and
h.
transfers of the shares may be made
by endorsement and delivery of the
certificate. The endorsee shall be
entitled to a new certificate upon sur
rendering the old one. And no such
transfer shall be valid, except be-
tween the parties thereto. until such
new certificate shall have been obtain
ed or the transfer shall have been re-
corded on the books of the corpora
ton so as to show the date OF the
transfer. the parties thereto. their
place of abode. and the number and
description of the shares transferred. ;"
The foregoing states the entire dou-
bic case and the questions of law sub
mitted to the court were these. ex-
pressed as to the Parmelee case and
understood as to the Bishops bank
case:
l. In whom does the legal title to
said shares of stock stand?
2. Is the plaintiff, as such admin
istrator. entitled to the possession of
said shares of stock. and has he the
right to sell the same for the equal
benefit Of all the creditorsg
5. Is the defendant to be regarded
as a secured creditor. with the right
to sell said collateral security for the
satisfaction of her own claim2
No claim Of fraud is made. nor is It
pretended that any one of the parties
10 either OF the transactions did not
act in the utmost good faith 1t was
claimed BY the administrator. how
ever. that the PLEDGES by their laches
and neglect forfeited any claim and
right they might have had to hold the
stock by their failure to comply with
the terms OF the statute above quoted.
They had the right to have the stock
transferred on the books OF the Hol-
lister Drug Co. in their respective
names but neglected to avail them
selves OF that right
The majority Of the court holds that.
under the circumstances submitted.
the legal title to the stock passed to
the PLEDGES and they have the right to
sell the stock and apply the proceeds
70 the payment Of the debt. interest
and costs. accounting 10 the admin
istrator for the excess II any.
Il is further decided BIZ the major
it, that Section 2ofs. Civil Laws.
above quoted was ensefe5 r,arssrr-