The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1902-04-14
NEWS Of
THE COURTS
Davis Disagrees as
to McBryde
Bonds.
SAYS THEY ARE
GILT EDGED
Oahu Railway Bonds Also Com
mended-Rspid Transit Sued
for Damages.

George Davis and Judge Humphrey
disagree as to the wisdom OF invest
ment in McBryde Sugar Co. bonds FOL
trust funds. Saturday Davis, as mas
ter to examine the Bishop estate ac-
counts, appointed by Judge Gear. re-
ported that the McBryde bonds ''art
among the gilt-edge securities OF this
Territory" Judge Humphreys about
the same time filed his order disapprov-
ing the investment of A. w. Carter
made for Annie T. X. Parker, in the
McBryde bonds, and ordering him &c
pay the amount, $4,000. into the estate
An appeal was noted.
If Judge Gear follows out the report
OF his master, which seems conclusive
there will be another set of contradic-
tory decisions in the First Circuit
Court.
The Bishop Estate has a large
amount invested in both McBryde SUI
gar bonds and Oahu Railway bonds
and il was expected that, under Judge
Humphreys first ruling that none OF
these securities were safe as trust in
vestments, an unfavorable report
would be returned by masters. The
report of George Davis as master. com
ing at the same time as the Circui;
Courts attack upon the plantation, is,
therefore, rather surprise.
Davis disagreed with Judge Humph
reys' decision at the outset. quoting a
decision from the Hawaiian Supreme
Court, in the Banning case. wherein the
rule was laid down that in the alb
sence of a statute limiting the class of
securities in which trust funds may be
H. 81.
direct what securities only a trustee
may invest in so as to exonerate him in
case OF loss. This would trench upon
legislative functions"
Mr.. Davis speaks of the need of a
direct statute in this regard. and thsn
tells at some length of the Importance
OF the sugar industry, the large cor
porations and the stability OF their
business. He refers to the long leases
held by the plantations and the pru-
dence with which the corporations are
and the ample protection
for the investor against loss.
He says: THE first mortgage bonds
90 these great corporations are. in my
opinion, a safe investment. The as
sets shown in the evidence taken by
me on the several hearings and attach
ed to this report can lead TO but one
vestments are both permanent and
safe"
Speaking of a possible investment in
real estate mortgages, the master says
that the value of real estate is de-
pendent upon sugar. and the real es-
tate OF this country would not be a
safe investment If this great industry.
by any Unforeseen circumstances, was
crippled. or destroyed, or rendered I'M
Speaking OF Oahu Railway bonds.
Dir. Davis concludes:
1.-The bonds OF the Oahu Railway &
Land Company are redeemable in sew
EN- years. and in these times of great
depression and scarcity OF capital they
stand a premium OF from to 5 per
cent. An itemized statement of the as
sets OF this company included in the
deed Of trust with the company's valu-
alton thereon. is attached to this re-
port. i also find from the evidence that
the company is paying 6 per cent upon
L capital OF $4,000. 000
Il have no hesitation in recommend
ng to your honor that an investment
II trust funds in the bonds of the Oahu
& Land Company is a safe.
and prudent investment,
md that a trustee who invests in these
bonds acts with sound discretion, pru-
ience and faithfulness."
His estimate of McBryde bonds is
ust as enthusiastic. The amount in
rested in this corporations bonds was
Al $50. which Mr.. Davis finds to be
amply secured. He says that the as
tets OF the corporation are 81. Ss1, $50. |
md the mortgage bonds issued only |
$50, 0O0
The bondholders consequently are
protected by a surplus of about 50. 250,-
90. which would amply protect minor
ty bondholders, for even in case of a |
otal failure of the sugar industry, the !
master says that the McBryde prop
rty would yield an income of five per
ent upon half million dollars as a !
attic ranch alone. In this respect he
avs: 'On this plantation there was
ane enough in the ground this year
O pay the entire bonded Indebtedness.
'he holders OF these bonds are amply
protected The investment of the trust
unds by the trustees in the bonds of
his corporation I find was made with
and faithfulness. and the
rustees. in making such investment.
xercised a wise and sound discretion.
he evidence taken at the several hear
ngs is attached to this report. and
lust satisfy the most skeptical that the
icBryde Sugar Company's per cent
onds are among the gilt-edge securi-
les OF this Territory"
Mr.. Davis, in conclusion, says he has
xamined minutely the provisions of
he McBryde deed of trust, and finds
t meets all requirements OF the Unit
q States decisions. and is in a form
o give ample security to the minority
The security. he says. ex-
eeds the bond issue four or five times.
nd he thinks ii useless to speculate
pom the remote possibility of failure
Z the plantation.
SUES RAPID TRANSIT.
Robert II. Fuller has begun suit