The Hawaiian gazette., 1902-04-15
NEWS Of
THE COURTS
Davis Disagrees as
to McBryde
Bonds.

ment In MCRryde sugar co bonds for
trust funds. Saturday Davis, as mas .
ter TO examine the Bishop estate ac- .
counts. appointed by Judge Gear. re-
ported that the McBryde bonds ARE
among the gili-edge securities of this
Territory" judge Humphreys about
the same time filed his order disapproy-
ing the Investment OF a. W. Garter
made for Annie T. X. Parker. I'm the
McBryde bonds, and ordering him to
pay the amount, $4,000 into the estate.
An appeal was noted.
II Judge Gear follows out the report
ot 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 boDds and oahu Rallsty bonds, .
and II was expected that, under Judge
Humphreys first ruling that none of
these securities we're safe as trust in
Nestments, an unfaNorablc report
would be returned by masters. The
report of George Davis as master. COM
ing at the same time as the Circuit
Courts attack upon the plantation, Is,
therefore, rather a surprise
Davis disagreed with Judge Humph
reys' decision at the outset, quoting
decision from the Hawaiian Supreme
Court in the Banning case, wherein the
rule was laid down that In the alb
sence Of statute limiting the class Of
securities in which trust funds may BE-
invested. the court cannot interfere to
direct what securities only a trustee
may invest In so as to eNonerate him In
case OF loss. This would trench upon
legislative functions"
ua - ba naaI ~ "A
direct statute in this regard, and then
tells at some length OF the Importance
of the sugar industry. the large cor
porations and the stability of their
business. lie refers 10 the long leases
held by the plantations and the pru-
dence with which the corporations are
conducted, and the ample protection
for the investor against iOss
He says "rhe first mortgage bonds
az 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
conclusion, and that Is that such in
yestments are both permanent and
safe"
Speaking of n possible investment I'm
real estate mortgages. the master says
that the value OF real estate IL de-
pendent upon sugar, and the real es-
tate OF this country would not be n
safe Investment IL this great industry
by any Unforeseen circumstances, was
crippled, or destroyed, or rendered un-
profitable"
Speaking OF oahu Railway bonds
Mr. Davis concludes:
THE bonds of the oahu Railway &
Land Company are redeemable in sew
.t, in tiuoaa az prpli
depression and scarcity of capital they
stand a premium OF from 60 pei
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. ! also find from the evidence thai
the company is paying per cent upor
a capital OF s4,00O,O0O.
Il have no hesitation in recommend
ing to your honor that an investmen
of trust funds in the bonds of the Oahl
Railway & Land Company IL safe
conservative and prudent Investment
and that trustee who invests In thes'
bonds acts with sound discretion. pru
dence and faithfulness"
His estimate OF McBryde bonds IL
just as enthusiastic. The amount in
vested in this corporations bonds wa'
$4l,S50, which Mr.. Davis finds to bt
amply secured. He says that the as
sets OF the corporation are H.sSl, 45O
and the mortgage bonds issued only
$750,000.
The bondholders consequently arr
protected by surplus of about S3,250
900, which would amply protect minor
ity bondholders, for even in case of {
total failure of the sugar industry tn
master says that the McBryde prop
.rtu iali n ~ N
cent upon half n million dollars as
cattle ranch alone. In this respect h
says: "On this plantation there wa
cane enough in the ground this yea
Ia pay the entire bonded Indebtedness
The holders OF these bonds are ampl
protected. The Investment OF the trus
funds by the trustees In the bonds q
this corporation | find was made wit
prudence and faithfulness. and tn
trustees, in making such inyestmen
exercised a wise and sound discretion
The evidence taken at the several hear
ings is attached TO this report. an
must satisfy the most skeptical that th
McBryde Sugar Company's 6. per eel
bonds are among the gIlt-edke secur
ties OF this Territory"
Mr.. Davis, in conclusion. says he hG
examined minutely the provisions
the McBryde deed of trust, and FIN,
IL meets all requirements OF the Uni
ed States decisions. and Is in a for
to give ample security TO the mlnori
bondholders. The security. he says, e,
oeeds the bond issue four or five time
and he thinks II useless to specula
upon the remote possibility OF fallu
OF the plantation.
SUES RAPID TRANSIT
Robert II. Fuller has begun 81
against the Honolulu Rapid Trani
Il Land Co. for so, 900 damages. for /
juries alleged to have been received
collision between an electric car a
tram car on February 22nd. 4
collision is said to have occurred at t