The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1902-07-26

for the $50 bonds issued and interest
thereon
Chief Justice Frear was disqualified
in the case, and his place was taken
by Judge w. A. Whiting. The follow
ing is the syllabus in the case:
Guardians or trustees in this Terri
tory are not restricted in the invest
ment of trust funds to public securities
or real estate mortgages.
Investment of trust funds in the
bonds of private Industrial corporations
may be made when such bonds are
amply secured by mortgage deed OF
trust on real estate and personal prop
erty, and are regarded with favor by
prudent men seeking investment OF
their own funds.
1.-THE condition in a trust deed secur-
ing bonds requiring the assent of ma
jority of the bondholders to compel the
trustees to proceed to foreclose for de-
fault in the payment of interest on the
bonds does not in the absence of ex-
press stipulation in the deed take from
the minority or single bondholder the
right to pursue the usual remedies in
court of equity.
This majority consent clause is not
delegation of authority by a trustee
who buys such bond.
"a purchase of bonds by a guardian
of a minor from a corporation of which
he is the treasurer and a director is
voidable at the election of "a cestue que
trust"
Justice Perry writes a concurring
opinion, making few notifications, OF
the unanimous decision.
Justice GaIbraith in his decision first
cites the report of the master in which
- - v1Io tot inY1 no.
good security for the bonds, and the
subsequent ruling of Judge Humphreys
disappearing the investment in $4,000
McBryde bonds, $4050 Waialua bonds,
and $500 Oahu Railway bonds.
Referring to the common law rule
relied upon by Judge Humphreys in
iisallowing the investments, the court
says:
TT does not appear from any of the
reported decisions of this court that
the rule of the common law relied on
has ever been adopted in these Islands.
It does appear that the rule has been
specifically denied and that in con-
tested case the court refused TO adopt
or follow the rule" The Banning case.
ath Hawaiian, is here cited, as given
above.
Speaking of the argument of Mr..
Dunno, which followed to a great ex-
tent the discussion of Judge Humph
reys as to the sugar industry in the
Islands, the court says:
1--WE do not share the fear expressed
by counsel for the dire disasters that
predicted to threaten wards and their es-
tstes unless the investment of their funds
is restricted to public securities and real
estate mortgages. The rule of the Ban
ming case has been the law of this juris-
diction for at least eight years. The
practical working of the rule for this
period has not verified the predictions of
evil made against its operation. II trust
funds have been dissipated and lost by
reason of this rule our notice has not
been called to specific instances.
I'm view of these facts and the absence
Of any government securities in this
Jurisdiction for the investment OF trust
funds and the general commercial, indus
trial and agricultural conditions prevail
ing here we do not realize that there is
any pressing necessity for change of
the rule.
Zone of the investments approved in
the Banning case was in bonds OF the
Kahuku plantation and another was in
the bonds Of the Oahu Railway and Land
Conapany-the last being the same bonds
that were disapproved by the court below
in this case The question was not raised
in the Banning case as to the form OF the