The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1902-04-21
XPLAINS
HIS ACTION
The First Judge
Disapproves
Bonds.
PLANTATIONS NOT
GOOD PROPtRTI. S
Eben Low Makes Answer to Rob
ert Kinds Allegation Con-
corning Low Ranch.

Judge Humphreys has filed his decision
disappearing the investment in McBryde,
Oahu Railroad and waialua bonds by A.
W. Carter. as guardian of the Annie T.
X. Parker estate. The total amount with
which the guardian is charged is $40, 800.
The court also appoints j. j. Dunno as
guardian ad Item to protect the inter
ests of the minor when the case comes
up on appeal in the Supreme Court.
The decision OF the court is lengthy
covering thirtytwo typewriter pages. In
his decision Judge Humphreys says:
THE investment OF the funds of his
ward in the bonds of Tie Waialua Agri-
cultural Co.. Ltd. by the guardian in this
case, and particularly the large sum in
vestGd in the bonds of the McBryde Sugar
Co, Ltd, cannot be defended upon any
principle or authority; the investment in
the securities of the latter (McBryde
company especially deserves to be char
acterized as unauthorized extravagant,
improvident. reckless, and breach of
trust in view of the guardians admis
sion that at the time OF the investment
he had neither examined an abstract OF
title of the property alleged to be owned
by the company, nor read the trust deed
by which the bonds are alleged to be
cured. and in view of the further and
significant fact that he purchased by far
the greater part of them from corpo-
ration in which he was director and of
which he was treasurer. to-wit: the
American Sugar Company. AS faith
full, prudent, diligent. cautious. watchful
and conservative fiduciary it was his duty
to have examined the title to the prop
erty alleged to be pledged as security
for the bonds in question and to have
carefully and critically examined the
terms OF the deed of trust"
"A. w. Carter is the man who since
the McBryde investment was made. was
pronounced by Judge Humphreys as a
fit successor to himself in case he should
retire from the bench, that statement be-
ing made in an interview
AS regards the Banning case, upon
which Judge Gear relies in his opinion
sustaining the investment in McBryde
bonds in the Bishop estate, the court
says.
But in so far the Banning case
holds that fduciary may invest trust
funds in the bonds other securities Of
private agricultural. mercantile or indus
trial corporations and that the courts Of
equity and probate in this Territory can
not, without trenching upon legislative
functions, direct the trustee to what
securities. he may invest in, the court
must and does respectfully decline to fol-
low that decision. The court has never
considered that the decisions of the Su-
preme Court of Hawaii antedating the
of the Islands by the United |
States, are binding upon IL, barring. of |
course, such decisions as may have con- |
strued statutes still in force, and such |
other decisions as may have established |
rules OF property. By Sec. of AN Act |
to Reorganize the Judiciary Department.
passed by the Hawaiian Legislature in !
1892. il is declared that the common |
law of England as ascertained by English |
and American decisions is hereby declared |
TO be the common law of the Hawaiian |
Islands in all cases. except as otherwise
stated expressly by the Hawaiian consti-
tuition laws or fixed by Hawaiian IN
iicial precedent or established by Ha- /
Taiian National usage The existence of
this statute-its application to the in
'estment of trust funds by those who are
with them. was not considered
oy the court in the Banning case. IT
vas admitted that there was not (nor is
here now any constitutional or statu-
DRY provision in Hawaii limiting the in
Of trust funds. nor does II ap-
bear that such investments were fixed
~ judicial precedent prior to the Ban
ling case, or by National usage"
The court comments also upon the pro-
'ision in the trust deed. as not protect
ng the minority bondholders He refer.
lso to the speculative values OF suear
plantations. and cites Maunalei and the
American Sugar Company as instances of
oss through such specuiations. Then the
ourt says:
we wish sall worthy corporate enter
rises success; at the same time we In
end to protect with all of the safe
yards OF law and equity the dependents
pon this court. The cl.mor OF stock
nanipulators cannot move us from our |
osition; the threat OF promoters inspires
= with no terror; the groan OF the widow
nd the cry OF the orphan does fill US
nth Unreasonable pity. and having an
we single to their welfare we do not in
end that corporations with alleged Sc
urities. having an alleged gilt-edge but | |
back Of grosser metal. shall break into s
he vaults OF the court and take from II T
he funds Of fduciaries. As matters now
tand there is but one way to get such
lnds out of these vaults and that is to
mploy dynamite in liberal quantities
hen the police are asleep. If tie Mas 7