The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1906-07-24
DEAD BRICK
ENTERPRISE
Post Mortem lnvestiga-
ton of Honolulu
Clay Co.

Battle was joined before Judge Rob-
the Inflated attempt to establish a
brick-naking industry in Honolulu. C.
r. Hemenway. trustee in bankruptcy
of Honolulu Clay Co. Ltd, plaintiff,
in person and L. ]. Warren of Smith
& Lewis conducted the attack. E. a.
Mott-Smith, D. L. Wilmington and J.
Lightfoot variously represented the
defendants. these being the bankrupt
corporation. F. ]. Lowrey. Frank Hus-
tace, F. J. Amweg, o. L. Sorenson, J..
B. Rohrer, j. r. Burns, c. H. Cooke,
F. C. Atherton. w. Gehring. F. B.
Damon NJ. L. Smith. H. L. Kerr. c.
G. Ellison. F. L. Litherland, T, Nc
Giants Stewart, w. r. Castle Jr. and
a. \. Campbell.
The purpose Of the suit is to hold GER
tain owners Of. paid-up stock in the
company liable for its debts to a. pro-
portion of their respective holdings Of
stock. The proportion claimed is the
difference between the par value of
the stock in question and the actual
value of the property, real and per-
sonal, exchanged for it. 1t is contend
ed by plaintiff that such property was
over-valued hence that the holders of
the stock exchanged therefor are not
entitled to the limited liability of stock
holders beyond the point where the
face value of their shares covers the
actual valEe of the property. In other
words, that the excess of capital stock
held by them, as gagged by the worth
of the property, is to be regarded the
same as stock subscribed but not paid
for.
1t took most of the morning and some
of the afternoon sitting for reading of
pleadings on both sides. Defendants,
both in written and oral pIeadings,
made great many admissions, on the
strength of which and other technical
GROUNDS they had objections sustained
to considerable offerings of proof doc
umentary and oral. Registrar Merri-
ANS evidence was ruled out.
One admission was that the site Of
the brick works was put into the stock
deal as worth $4,000. the whole enter
prise being capitalized at $4,000. When
objection was made to evidence on the
value of the land, Mr.. Warren success
fully contended for it's admissiblity.
gift horses in the shape of admissions
from the defense and claimed the right
to show the real value of the whole
outfit in detail. The court having
overruled the objection, real estate ex-
perts were called by plaintiff
Cecil Brown had known the land for
many years and placed it's value at
$500 an acre. The area being 2.75
acres, the valuation by witness would
be $4325,
F. S. Dodge, manager of the Bishop
estate, valued the land at $1,000
j. Fl. Schnack. real estate dealer,
gave a valuation of $S775 and there was
a laugh when the court asked witness
if he could not put on some odd cents.
Witness admitted that he had sold lots,
back toward the mountain from the
brickyard, at a higher proportionate
value. Questioned about this he ex-
planned that his sales were of building
lots, while he valued the tract in ques-
ton as a tract. 1t was a difference,
in other words, between wholesale and
retail land valuations.
Judge Robinson brought in the ''cuss-
ing" topic of the day, raising a cir
culatory smile, when he suggested an
explanatory rider to one of Mr.. Browns
answers, thus:
You mean the conditions in Nuuanu
valley as they are today. without ref
erence to what may happen if that dam
gives way
H. L. Kerr, promoter of the COM
pany. was called before adjournment
for the day Objections of defendants
to his being questioned about the cost
of different items of the plant were
sustained
To speak generally, the defense to
the action is partly that, as "a going
concern the whole property at the
start of the works. was quite worth
the amount for which it was capitaIiz-
ed a sudden falling off in building
activity in Honolulu, however. pre-
vented the company from selling an
output large enough to yield a profit. !
The enterprise therefore came down