The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1901-12-30
BONDS NOT AFFECTED
HUMPHREYS McBRYDE ORDER
INNOCUOUS.
All Trust Deeds Supporting Bond Is
as to Judge Humphreys Motive

Judge Humphreys refusal to approve
the investment by guardian of part
of his wards estate In the bonds of the
Waialua Agricultural company or the
McBryde Sugar Company, was a sub
ject Of much comment today as soon
as the fact that he had disapproved
such investments became known.
The general opinion expressed was.
First that il was move on the part
of Humphreys to strike at w. A. Kin
ney, Individually and those vitally in
terested in these plantations generally
by attacking their property under the
guise of a court order; and,
Second, that Humphreys would fail in
this object.
c. NJ. Cooke while disclaimng any
opinion as to the motive for Humph-
reys order, if there were any other mo-
tive on his part than a desire to do his
duty in the administration of probate
matters said he did not think the or
der would have any effect on the mar
ket value of the securities.
So far as ! know he said. "all the
trust deeds supporting bond issues by
corporations in these Islands have prac-
tically the same provisiOnns. / know
that the trust deed supporting the PiO-
neer Mill bond issue has it, and l know
that others have it although / cannot
at this moment lay my hands on copies
Of them. All of these trust deeds and
bond issues have been submitted 10
lawyers for opinions as to their legal
sufIiciency, both by banks and invest
ors elsewhere. In the case of the Nc
Bryde and the Pioneer Mill bond issues
speaking of them because / have copies
of them, ii seems to me this provision is
an additional measure Of security to
the bord holder, as, in case the trustee
for any reason does not act the bond
holders can compel him to act.
Il suppose this order Of Judge Hum
phreys is appealable ana the Supreme
Court will finally decide it. But in
any event | cannot see that ii will have
ANY effect because investors have al
ready gone into the question of the
suificiency of the security and are
satisfied with it. | might repeat what ]
very recently wrote to an Eastern bank
in answer to business correspondence.
that there has never been default in in
terest or principal Of any bond issue by
a Hawaiian corporation"
Another man closely identified with
plantation interests, but who declined
to allowed his name to be used, said
Judge Humphreys order, whatever his
motive >in making it, could not injure
these securities. IAN the Island bond
issues have practically the same pro-
visions. 1t is a very general, almost
universal provision in trust deeds"
Wherever the trust relation exists,
courts of equity will protect the per-
sons for whose benefit the trust exists.
This is merely a provision that enables
majority Of the bondhoders to COM
pei the trustee to act. if he refuses.
! without going to court to compel him
to. If the trustee and a majority of
the bOndholders agree that there ought
not to be foreclosure, a minority ought
not to have the power to compel fore
/ closure without an order of court, and
a court of equity is always open to
them to protect their rights if they are
| jeopardized.
But if Humphreys is right, and mi
nority bondhOlders are not adequately
| protected, the plantations themselves
can easily remedy the defect and will
/ doubtless do so. Thih can be done by
another deed of trust remedying the
defect if it is one"
| S. NJ. Damon when approached this
morning on the subject did not care to
discuss the matter. Such matters of
moment as these" said Mr.. Damon
ARE always referred by us to our law
yers, | am not a legal luminary myself
and | cannot express an opinion i'm the
affair. The Oahu bond issue is on rec
| ord and may be seen. We always leave
such matters to the lawyers hands"
w. f.. Bowen of Castle q Cooke
adopted the same position of nOn-eX-
/ preston of opinion. "If Judge Hum
phreys has taken that stand" said Mr.
Bowen, well and good. / do not care
to say anything in the matter at all. %