The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1909-08-03
10 Save
S5989 In
Stamps

Oahu Railway & Land Co., Ltd, has
filed a brief in it's appeal from the as
sessment of $59S9 stamp duties made
by Treasurer Conkling upon docu-
ment rendered for record and stamped
with a 81 stamp. THE document is
an agreement" the brief sets forth,
between the Oahu Railway & Land
Company on the one part ard Walter
f. Frear and Robert w. Atkinson,
trustees, of the other part"
Among the circumstances related
are these:
The railway company issued a
trust mortgage January /, 1897, to Sc
cure an issue of bonds of the amount
of two million dollars bearing inter
est at six per cent per annum and
due on the first day of January, 1927.
This trust mortgage is duly recorded.
"On July l. 1909, the railway COM
pany took advantage of its option to
redeem said bonds to refund them at
five per cent. The reduction In the
rate of interest and new date at
right to redeem the bonds are the
only changes made in the terms of
the bonds They run for the remain
der of the term of the bonds already
issued and in all other respects are
Identical with the outstanding bonds.
Holders of the old bonds were given
the right to exchange them for the
new, paying a premium of one per
cent.
The new bonds being merely a re-
tunding issue, no new conveyance or
mortgage was necessary. but the rail-
way company and the trustees enter
ed into the present agreement where
by the property already in the hands
OF the trustees is held as security for
the refunding issue upon the same
trust, with the same powers and sub
ject to the same limitations as are
set forth in the trust mortgage al
ready in existence"
What is implied by the Language ar
the beginning is cOntended, namely
that the instrument is an agreement
and not a mortgage. "A mortgage is
the conveyance Of the legal title, but
III this case there is no conveyance,
the legal title being already in the
trustees. The original conveyance was
made in 1897 and the government has
received the stamp duty payable up-
on 1t. 1t is entirely competent for The
parties to modify ile trusts upon
which this property is held without
being subject to an additional stamp
duty as for new conveyance.
Kinney, Ballou, Prosser e. Anderson.
attorneys, close the brief by quoting
the case in re Bolte and Carter from
18th Hawaiian, which they say was
in two particulars much stronger
case in favor of the government than
the case at bar. In that case the
time of payment was extended from
1910 to 1916, thereby Increasing the
term of the original mortgage. Sec
ond, the agreement provided for a
transfer of the actual possession of
the land to the trustees of the mort
gage. These two circumstances. IL isl
said, made the instrument much more
in the nature of a mortgage than
that under consideration. Nevertbe-
less the court held:
"The decision of the Treasurer can
not be sustained. A mortgage is a
conveyance of property as security
In this case the mortgage was al
ready in existence and stamp duty had
ceen paid upon it. The instrument
IN question was not a mortgage. II
conveyed no property. 1t was merely
an agreement reducing the interest on
ana extending the payment Of the debt
secured by the mortgage already made
IN consideration of the mortgagor's
agreement after default that the trus-
lees should take possession and man |
age the property for the benefit of AN