Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1902-06-01


on the 9Th day of May, 1899. how or
when or by whom these parties were
elected to the respective offices in the
company does not appear from the
minutes Of the corporation or other ev.
idcnce. That the defendants were Civ.
on an opportunity to show, at the
hearing, the amount of money ex.
pended In promoting the corporation;
that the only proof given was by the
defendant Foster who showed an ex.
pcnditure Of $3.50; that some $50 1000
was paid 10 Hustace in response to
the notices sent the subscribers on
the first 10 per ccntum assessment to
the stock awarded; that after this
money was paid TO Hustace these dc.
PENDANTS in pursuance Of the resoi'i.
ton of April goth. appropriated $50. 900
Of this money and 1000 shares of the
paid up stock and from this amount
, they paid the McCorristOns in consld.
Grafton ior their land s25,OOO in cash
and one thousand shares OF paid up
stock: that the remainder OF the cash
$50. 00hi was divided among the de.
PENDANTS as follows: To Foster sl5..
900 cash and onc.half OF the stock and
to Ilustace tlO.O0O cash and one.fourth
OF stock and the same to Egan. That
the promoters did not disclose to any
of the allOttces of stoCA either before
or after the payment of the first as
s"ssment the amount they intended to
take as promoters fees and that Zone
of the stockholders outside of the in.
corporatnrs knew of the amount of the
profit made by the promoters or any.
thing on the subject: that the Compa.
ny issued prospectus IN September
1899. publishing the transactions Of
the promoters; that on May 18th. 1899.
when the affidavit accompanying the
articles OF incorporation was subsCrib
ed rcCiting that 10 per cent OF the cap.
ital stock had been paid in there had
not been dollar paid ON the 1890
held by Hustace as trustee. except
that paid by the plaintiffs and other
subscribers.
Finding Of Circuit Judge.
The Circuit Judge found that the dc.
PENDANTS HustaCe. Egan and Foster
did unlawfully combine. Conspirc and
confederate and agree together to
cheat and dcrraud the stockholders OF
the kamalo Sugar Company. Limited,
a Hawaiian corporation. out OF the
sum OF S35.OOO in cash and GOO0 shares
NJ the paid up stock of the said Ka
malo Sugar Company. Limited. as al
legged and charged in the plaintiffs bill
on file In this suit" The judge also
found that the value of the shares was
$50 at the time and that the conversion
of the money and stock was fraudulent
and void. and ordered the money and
stock. or its equivalent in cash. paid
to the clerk OF the court for the IA.
malo Sugar Company. Limited. The
Judge also allowed the attorneys for
the plaintiffs fee of 100000 for their
services rendered in said cause. The
defendants appealed. Numerous rea'
sons are urged for reversal OF the de-
cree appealed from. 1t will not bG
n - 10, 10
tail.
An Immoral Argument.
Much stress is laid upon the fact
that the time this company was organ
lied was one OF active expansion IN
the sugar industry; that speculation
ran riot and prosperity in all Of Its
delightful luXuriance was here; that
the major part OF the population OF
the Islands were eager and anxious tC
buy sugar stocks; that the plaintiff:
and others who bought shares in the
Kamalo Sugar Company. Limited. die
so without asking any questions ant
considered II a privilege to have shares
allotted to them; that the transaction
was all a gamble and when the excite
ment subsidized the plaintiffs discover
ed that they HAD failed to realize oil
their exaggerated expectations and b!
this suit seek to avoid the responsible
ity OF their own folly and TO shift tn,
burden of their losses to the defend
ants.
We are not much impressed Will
this argument. It finds as little sup
port in morals as in law. II "a NJ
doubt true that at the time in CUES
ton there was much reckless spccula
ton in corporation shares, but 1t wa
not given out by the defendants AM
we assume, in the absence of proof
that none Of the plaintiffs had an,
reason to believe or did believe tina
the Kamalo Sugar Company was OF
ganized as a lottery or a gambling en-
: terprise. The public who were invit
ed to buy the shares Of this compan
had a right to presume that II was pre-
NOTED az a legitimate enterprise 4
whose management. business integr
: ty. II not ability and prudence. were t
be important constituent elements
, Counsel have neglected to cite any al
thority supporting the assumption tina