The Hawaiian gazette., 1902-03-21
WILL DRIVE
OFF BUYERS
Attorneys Who Do
Not Agree With
Humphreys.
nre.n Wednesday, daIlyl

ID tation viii meet today. II all can
get together for the consilera-
tion. not only Of the recent letter ~
the directors OF the corporation, but
as well to- take up the status of their
security In the light OF the order OF
sale signed by Judge Humphreys. In
the opinion of some Of the leading at
tornoys of the city the order OF sale is
not really one for the furtherau ce OF
the disposition OF the estate but To
prevent any sale. owing to the fact
that under the provisions OF the order
few men Of money would care TO pur-
chase a lawsuit, and that TINS would
be the direct result OF the sale uhuer
the conditions.
owing To the illness of S. NJ. Damon,
there has been no meeting of the bond
holders, although they were expected
tc get together Monday. The urgency
Of the case has appealed to all those
Interested. and there Is a chance that
the meeting will take wider form
than a mere consideration OF details,
md that members of the board of the
corporation will be asked to be present
at the meeting OF the bankers and at
torncys This is the more probable ow-
ing to the fact that the recent letters
from the plantation contain informa-
tion which is of great value In any con-
sidpiatiOn of the matter Whlle there
have been made statements that the
laborers would resist any attempt To
take of the cane until there had been
"a fun payment OF back advances, let
tiers from NJ. +. Scott and others are
To- the effect that the japanese were
10 meet with the leading white men,
20 consider what is to be done to help
the plantation. Mr. Scott has taken
loo OF the japanese into his coffee plan
tation for the purpose OF keeping them
about that they may be ready for work
II the mill is to be started.
The letters of Manager Covan, too,
say nothing of the possibility OF the
laborers making any trouble, but on
the other hand, he reports that iha
mechanics have continued I'm the work
of fitting up the mill, despite the dis
charge order of the receiver, and the
declaration that there would be no
money to pay them
one Of the leading attorneys OF the
city who has been consulted in the
matter of bonds, said last evening that
he could not understand the order of
Judge Humphreys. He continued: 1T
Is impossible to conceive that the court
should order that mortgage be
brought into court and cancelled, ana
the money put into the hands OF the
court for distribution. The mortgage
rs n primary lien on the property. and
II there Is any sale IL must be subject
to the bonds In fact IL the sale Is
had and the proceeds are not more
than sufficient to pay the bonds j be-
lieve the receiver viii have to whistle
for his fees and commissions. | cannot
see how any court by a scratch OF n
pen may confiscate the money OF a
bondholder. II that was the law OF
the land you could not sell an Hawaii
an bond for 10 cents on the dollar
Even the suggestion that "A court wants
TO make such ruling may have the ef-
feet upon our securities. Then. too
we have a statute defining the rights
OF a mechanics lien. ! do not believe
the court can repeal that law by any
order. | do not think there Is any
value to the order, and 1t does not In
any way affect my opinion of the worth
of the bonds
Another attorney OF standing here
and in the States as well, said that he
had never heard of such ruling. He
said the only debts which were consid-
cred 20 have priority. in his practice,
We're those incurred by receiver in
the protection of the security OF the
bondhoders. These were wide. even in
the case of a railroad, 1t being held by
Missouri Judge that claim for dam
ages. resulting from the operation OF
the line by the receiver, ranked before
the bonds, but that all general indebt-
e6ness was to be considered after the
bonds had been paid. He said that
he could not remember any parallel
for the order OF the first judge OF the
First circuit, ana tnat tnere must De
some mistake in the matter.
Receiver Wundenberg said yesterday
that the order was meant only to clear
away all mortgages and liens so that
In the event of a sale he could. under
the order, give clear and sufficient
title to the estate to the purchaser. He
said there must be recognized the pri-
GRITTY of all receivers claims. and that
in the event Of a sale for a sum less
than the amount of the bonds, the
mortgage would have to be cancelled
and the property cleared.
The order Of the court that all the
moneys resulting from the sale after
The payment Of the charges OF the re-
ceiver, should be paid into the court
for distribution, has aroused much dis
cussiOn of the right OF the court to as
sumo to direct any distribution OF such
funds when there Is in existence a
frst-mortgage bond.
A rev feature may be injected into
the entire discussion OF the case later.
An attorney said yesterday that he
Thought there might be even yet an at
tack made upon the legality OF the re-
ownership. The point he made, and
which he discussed only generally, was
that the proceedings being in equity,
and the compliments having claim on
ly on the sugar under contract, the
fact that there is no sugar may be
brought up to invalidate the entire re-
ownership proceedings. Should this be
done there would be threshlng out OF
the matter, and perhaps the result
would be that the receiver would lose
all that he advanced, as the setting
aside of the proceedings would leave
the officer of the court without any leg
on which to stand in the making OF
expenditures.