Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1905-09-20
GIVES history Of
BANKRUPT CLAY CO.

A number of answers have been filed
in the suit Of Chas. II. Hemenway,
trustee in bankruptcy of the Honolulu
Clay Co., Ltd. bankrupt. VS.. Ho-
nolulu Clay Co., Ltd, +. J. Lowrey.
Frank Hustace, +. j. Amweg, D. l..
Sorenson, J. b. Rohrer, /. X. Burns.
C. II. Cooke. +. c. Anterior, w. Gehr-
ing F. b. Damon, NJ. l.. Smith, II. L..
Kerr, c. G.. Ellison. F. l.. Litherland,
7. McCants Stewart, w. Il. Castle, Jr..
and A. n. Campbell, whereby the trus-
tee endeavors to force the stockhold-
ers to pay up their stocks in order to
pay the creditors of the corporation.
+. J. Lowrey in his answer alleges
that the $50 shares Of stock were fully
raid for and that there is now nothing
due on account Of these shares for
which the property described in the
complaint was conveyed. Lowrey ad-
mits that the property Is not now
worth more than $4,000, but he states
that at the time the transfer Of the
stocks was made 1t was the honest be'
lief of the incorporators that the value
was $4,000. without any intention to
over-value or knowing that the valua-
ton was speculative, and denies that
the same was in fraud of the rights of
persons dealing with or lending credit
to the corporation. He admits, how
ever. that In the course of the COM
pany's operations 1t developed that the
value placed on the property at the
time Of the transfer was excessive.
Lowrey further denies that at the
time Of receiving the shares he knew
that they were not fully paid up, stat
ing that he received them In good faith
as fully paid up shares. He denies that
1t is necessary for Hemenway to col
lect and apply for the benefit of the
creditors any amount whatever on the
$50 shares as there is nothing unpaid
on them.
The answer filed by Frank Hustacc
is the same as that Of Lowrey.
A, n. Campbell states In his answer
that he is the attorney in fact Of w
r. Castle, Jr., but has not in his GUS
tody the Clay Company's books, which
were in Castles custody.
II. l.. Kerr in his answer states that
convinced that brick could be success
fully manufactured in Honolulu. He
further gives the history Of the start
ing Of the company as follows:
AT that time brick was selling In
Honolulu at from SIS to s22 per NJ. and
Honolulu was then using in the neigh.
borhood of 100000 bricks per month.
This respondent made general search
for clay beds on the Island OF oahu
and after experimenting with the clay
found in different parts Of the island
clay deposit was found In Nuuany
Valley, Honolulu, which was deter.
mined to be suitable for the manu-.
facture of brick, and it was decids<
to establish brick works there.
experts were secured and paid large
salaries, the Nuuanu valley land was
purchased and expensive machinery
imported.
THE brick yard so established was
capable of turning out 100000, 900
bricks of good quality, at the rate ~
| $3.50, 900 per month, at a cost not er
ceeding So per thousand, which would
at the then price Of bricks have given
profit to the company in the neigh
borhood of $4,000 per annum. A large
quantity of the brick had been made
and sold and n In roo ntit,, ran, oin
ed unsold, when 1t became necessary
/ that further capital should be invest
cd in the concern. This respondent
had at that time actually expended, In
cash, 100000 and over in the matter
OF said brick yard, and had made nc
charge for his services in the matter
"A corporation was formed undel
the name of the Honolulu Clay Co.
Ltd, and the property OF said brick
yard was sold to said corporation .,
set out in said bill, and this respond.
ent says that the sum of $4,000 givcS
In tho paid up stock Of said corpora
tion for said property was not an un
fair or inadequate price therefor, bu
on the contrary was a fair and rea
sonable frice therefor. The incorpora
tors Of said company received no cas'
for the property conveyed by them L
said company; but received only pai'
up stock, which is now worthless.
That some time after the incorpora
tion OF said company, building activi
ty in Honolulu suddenly ceased, an,
the company was unable to sell az,
dispose of the stock OF bricks manu-
featured by 1t. That the assessabl
stockholders OF the company were full
apprised of the amount OF paid u