The Hawaiian gazette., 1904-03-01

STOCK LAW
P arker and Desky|
Garry Their.
Points.

~ubISSe
/, Judge Robinson yesterday rendered
, decisions in the suits of the Orpheum
= Company, Ltd, respectively against
: Samuel Parker and Charles s. Desl<y.
In each case he grants the motion for
, a nonsuit.
In the Parker case the first count re-
, lates as cause of action promssory
note for $l00S.33, and the second count
, balance of SiSS alleged to be due on
assessments of So Il share on Orpheum
STOCK. 1T was admitted that the prom
issory note was given in payment of
u prior assessment on the same stock,
OF which defendant had subscribed for
$50 shares.
GROUNDS OF MOTION.
The motion for nonsuit was ON the
grounds that there had been no obliga-
ton or contract proved upon Mr.
Parker to accept any shares of the
| company, that he had not agreed to
pay anything, that 1t was contract
to purchase merchandise for $4,000 in
value and would not be binding unless
in writing, that there had been no writ
ten acceptance by Mr.. Parker of these
shares or any agreement to pay for
them; that the testimony showed
that the relation of stock
holder had been Cancelled by
the sale of shares at auction, and while |
the plaintiff had the election of RENE |
dies to hold Mr.. Parker he is no longer |
liable; that there had been no authori- |
cation shown by the corporation to sell |
stock for it, and that there was no per- |
sonal liability on the part of the stock
holder to pay assessments on the stock |
when the stock had been sold, or in
any event.
ONE POINT REJECTED
The court does not sustain a conten-
ton by defendant that no stock was
ever issued to him because his shares
were still attached to the stock book
and not receipted for There was evil
dence that Mr.. Parker asked Treasurer
Colburn to take care of the shares for
him, though MIR. Parker testified he
had no recollection of such conversa-
ton.
RELATION HAD CEASED.
the other ground namely, that the re-
lation of stakeholder had ceased with
the sale of his shares for delinquency
While the common law of England is
only in force under limitations in this
Territory, as he points out with refer
ences to Hawaiian decisions he comes
to this conclusions
still l am inclined to think that the
power given to the directors of any in
corporated company by Section 2O39,
Civil Laws of 1897 Is. l.. 1890, Sec. .,
Chap. 43), to sell at public auction
sufficient number of the shares of any
who shall neglect to pay
any assessment duly levied upon the
shares, until the whole par value has
been paid in, is not an exclusive RENE
dy, but is cumulative merely, and the /;
may, under our law, elect
either to foreclose and sell at public
auction a sufficient number of shares |
Of any stakeholder who shall neglect
to pay any assessment duly levied up t
on the shares until the whole par value c
has been paid in, or pursue it's com
mon law remedy by suit at law.
AN APPALLING CONTINGENCY. !
But 1t cannot consistently pursue
both remedies. And the reason Is ap-
parent, for If the corporation, the re-
membership of which com
Drised the owners and holders of but
title over half of the amount of stock ,
subscribed, could sell the
stock at delinquent sale for a 1.-THE of t
is par value, the corporation or its
members buying 1t in, and
,lso collect by suit at law the differ h
'nce between the amount realized at -
he sale and the par value of the stock
he value of the stock remaining in ID
he corporation, or purchased by it or I
is remaining members, could be adj I
anced and enhanced in value amazing
y, without rendering one cent of con-
;ideration to the original subscriber
whose stock had been sold. The re- l
ults of the recognition and applica- n
ion of any such principle of law +,
would be appalling.
"a forfeiture and sale of the shares
f stakeholder operates as "A remis- u
ion of the contract of membership and h
Wholly dissolves the delinquent MEM n
'er's connection with the company. :,
lie is not thereafter entitled to any of =
he privileges of membership and ought
ot to be compelled to bear any of the b
urdens which are incidental to that n
osition. Nor would 1t be just to COM ;,
eel "a shareholder whose shares have =
cen forfeited for non-payment of calls
D pay any portion of such calls re-
naming unpaid after giving credit for r.
he amount realized by the sale of the III
hares. If the charter of corporation j.,
imply authorizes forfeiture and sale
the shares of n shareholder for nom III
ayment of calls, and the agents of the W
ompany elect to pursue that remedy, tn
ne shareholder is discharged from liza ~,
ility for any calls remaining unpaid
Though the shares may sell for less az