Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1902-04-20
QUESTION OF JURISDICTION.

QUESTION OF JURISDICTION.
Judge Humphreys, discussing the
scope OF Hawaiian judicial authority
over trust investments. says:
I'm Bannings case, Ilaw. 453, which
Is relied upon as an authority for the
guardian, certain investments made
by the trustee under the will of Ban.
ming in the bonds of private corpora.
tons were approved, but 1t appears
from the testimony in that case, from
the stenographic report of the argu.
ments of counsel. the BRIEFS and the
&c cision of the Court, that the cues.
ton just discussed was neither argu.
cd, considered nor decided. nor does
tho question appear to have been de-
cided in any of the cases cited by the
counsel or the Court in the Banning
CASE
But" he says further on. "in so far
IS the Banning case holds that a fidu-
ciary may invest trust funds in the
bonds or other securities of private
agricultural, mercantile or industrial
corporations and that the courts Of
equity and probate In this Territory
cannot without trenching upon legis.
lrtive functions, direct the trustee as
to what securities he may invest in,
the court must and does respectfully
decline to follow that decision. The
Court has never considered that the
decisions of the Supreme Court of Ha.
wall antedating Cne annexation of the
Islands by the United States, are bind
inG upon II, barring OF course such dc
Cisions as may have construed stat.
utes still in force, and such other de.
Cisions as may nave established ruIes
,G property. BY Sec. > OF An Act to
Re organize the Judiciary Department
passed by the Hawaiian Legislature in
1892, II is declared that the common
law OF England as ascertained by Eng.
lish and American decisions is hereby
declared to be the common law of the
Hawaiian Islands in all cases, except
as otherwise stated expressly
bv the Hawaiian constitution
or laws or fixed by Hawaiian
judicial precedent or establish.
81 by Hawaiian National usage. The
existence of this statute-its applica.
ton to the investment of trust funds
by those who are entrusted with them
was not considered by the Court in the
Banning case. II was admitted that
there was not (nor is there now any
constitutional or statutory provision
in Hawaii limiting the investment OF
tlGst funds, nor does it appear that
such investments were fixed by Judi.
cial precedent prior to the Banning
case, or by national usage.
That investments of trust funds in
the bonds of private corporations
were not permissible at common law
IL conceded by the authorities which
hold that such investments may be
made. The Banning case seems to
have been based largely upon certain
Massachusetts decisions which Ger.
tdinly do sustain the investment OF
hust funds in the bonds of private
corporations where such corporations
have recognized standing in the com
munity and have demonstrated their
eGility to successfully do the things
which they were created to do. But
the Massachusetts courts in common
with the courts Of other jurisdictions
and with the text writer's mem. dis dis
approve of investments in the bonds
OF new corporate enterprises the sue
cess OF which depends upon number
Of remote and purely speculative con
tiEgencies."
EXAMPLE OF MASSACHUSETTS.
Regarding the example of Masss
, chusetts the decision has the following
, 10 say:
. Nov, there must be some reason
, iOI the most unusual, and because 1t IL
unusual, the striking position of the
Massachusetts Court in regard to trus
|, funds. ! find that, according to Tho
"a Statistical Abstract OF the U. S
prepared by the Treasury Department
, there Is deposited in the saving,
banks alone in Massachusetts tn,
enormous sum of 1888 S45, 10000 NOR,
I than three times the amount on de
pCsit in the neighboring state of Con
l hecticut, more than four times tn,
/ amount on deposit in the great stat
, Of Pennsylvania and more than eigh
; times the amount on deposit in simila
) Institutions in any other state in tn
. Union, with the exception of NeN
! York, and vastly more than the En-
, pire state in proportion to population
. This immense sum is on deposit in tn
| savings banks alone, and. of course
=. does not include the large sums depC
r sited with Trust companies and Con
I mcrcial banks, This pregnant fac
3 alone is enough to show that Their