The Honolulu Advertiser from Honolulu, Hawaii • 10

THE FACIFIC COMMERCIAL ADVERTISER, HOKOLULU NOVEMBER 19, 1901. 10 IX THE SUPREME COURT OF THE TERRITORY OF HAWAII. October Term, lftOr. GULSTAX F. ROPERT, as r.

SOLOMON Ki KUKUI.1 KAUAI and HO II EE. Fix CAPTIONS FROM ClKCCIT CotTKT, FlRST ClJIOCTT. Scbmittei October 15, 1901. Decided Xovkmbkr 5, 1901. (jUlJBRAITH A5D PkRRT, AXD F.

M. HaTCH, OK THE Bar, in px.ace of Fkear, O.J., absext. The acceptance of a lease by the tenant for a part, or the bole, of the demised premises from a stranger ia an act Inconsistent with his datjr to the landlord and is a ground'of forfeiture of the estate created by the prior lease. The forfeiture may be waived by the landlord. If a forfeiture i3 to be enforced the tenant Is entitled to notice.

The commencement of an action of ejectment against the stranger and be tenant without causing the tenant to be Berved with process is I not notice to tfhe latter of the Intention of the landlord to declare a forfeiture. attornment to a stranger did not ipm facto terminate tlie lease from Sumner. That act' gave the landlord a right of action which he could assert or not at his pleasure. In Willison r. Watkins a quotation is made from Lord Redesdale showing clearly the obligation Hipon tlie landlord to assert forfeiture if he claimed one.

I1 Redesdale says: "That the attornment will not affect the right of the lessor so long as he has a rirht to consider the person holding possession as his tenant. Hut as he has the power, to punish the act of his tenant in disavowing the tenure by proceeding to eject him notwithstanding the lease; if he will not proceed with the forfeiture he has no right to affect the rights of tlurd persons on the ground that the possession was destroyed; and there must be a limitation to this as well as every other demand." The case on this point comes clearly within the rule laid down by this court in Rice p. Spooncr, 11 Haw. 331, where it is held "that a mere breach of condition does not of itself work a forfeiture. "It merely gives the grantor the right to enforce a forfeiture.

This right he may waive." It is not claimed that any act was done in assertion of the right of forfeiture against Ho Hee other than the filing of this suit. As Ho Hee was not served with process and made no appearance this cannot be said to be any notice to him of the plaintiffs intention to claim a forfeiture. The conclusion follows that at the time of the commencement of the suit the lease of IS 92 was valid and outstanding and a portion of the term unexpired. Tho right of possession was not in the plaintiff. The view wo have taken of this case renders the offers of proof made by the plaintiff immaterial.

The exceptions are overruled. T. McCants Sthrart and Holmes Stanley for plaintiff. Kinney, Ballon McClatmhetn for defendants. IN THE SUPREME COURT OF THE TERRITORY OF HAWAII.

Ootobkr Term, 1901. HARVEY R. LAWRENCE II. DEE, HARRY EVANS and CIIARLES J. FISILEL, on behalf of themselves and all other stockholders in the Kamalo Sugar Company, Limited, v.

FRANK HUSTACE, JOHN J. EGAN, FRANK H. FOSTER and THE KAMALO SUGAR COMPANY, LIMITED. Hi Appxai. from Circuit Judge, First Circuit.

SrBMrrrED OcrroBxa 12, 1901. Decided Novembkb 8, 1901. OPINION OF THE COURT BY M. HATCH, ESQ. OF 1S99, which said deed tho crave leave to.

refer to hereafter and offer the same in evidence. "(5) That the said defendants Frank Hustace, John J. Egan and Frank H. Foster did unlawfully combine conspire confederate and agree together to cheat and defraud the stockholders of the said Kamalo Sugar Company Limited and the said Kamalo Sugar Company Limited out of the sum of thirty-five thousand ($35,000.00) dollars, and accordingly on tlie 31st day of May A. D.

1S99 and after the receipt of further assessments the said defendants granted bargained sold and conveyed the said lands and premises so purchased by them aforesaid to the said Kamalo Sugar Company Limited for the stun of sixty thousand ($60,000.00) dollars and did make and execute a deed for the consideration. of sixty thousand dollars to the Kamalo Sugar Company Limited which said deed was acknowledged on tlie 3rd day of June A. D. 1899 and recorded in the said Registry Office on or about the 10th day of June A. D.

1S99 to which said deed the plaintiffs crave leave to refer and introduce in evidence hereafter. "(0) That tlie said defendants after having, "-entered in to-said conspiracy to cheat and defraud the Kamalo Sugar Company Limited and the stockholders therein falsely fraudulently and corruptly representing to the said stockholders of tho said Kamalo Sugar Company Limited that they had paid tlie said n. McCorriston and D. McCorriston tlie sura of sixty thousand ($60,000.00) dollars for the said lands and premises and in accordance therewith they caused to be inserted in tlie said deed-from H. McCorriston and D.

McCorriston to them the said defendants as a consideration for the purchase price of said lands the sum of sixty thousand ($00,000.00) dollars" (tlie words in brackets were, on motion of complainants, stricken out after the close of the evidence for failure of proof) "whereas in truth and in fact they had only paid tlie sum of twenty -five thousand ($25,000.00) dollars for the said lands and premises and by means of tlie false fraudulent and corrupt statements they obtained from the said Kamalo Sugar Company Limited the sum of sixty thousand ($00,000.) dollars as the purchase price for the said lands and premises; and the said defendants Frank Hustace, John J. Egan and Frank II. Foster entered into an agreement and arranged that the said lands and premises so purchased from II. (McCorriston and D. McCorriston le charged to tho Kamalo Sugar 'Company Limited at sixty tliousand ($60,000) dollars and it was so charged and entered upon the books of tlie said corporation and that tho surplus of thirty-five thousand ($35,000.00) dollars be divided between.

theni the Frank Hustace, John J. Egan and Frank II. Foster and the said money was so divided among the said defendants Frank Hustace, John J. Egan. and H.

Foster. That the said lands and premises so purchased from the said II. McCorriston and D. McCorriston was not worth more than the sum of twenty-five thousand ($25,000.00) "dollars and the sum of twenty-five thousand ($25,000.00) dollars is and was more than its market value; that' the said plaintiffs and other stockholders believing the statements and representations of the defendants Frank Hustace, John J. Egan and Frank H.

Foster as to the value of said lands and premises, and that they had paid the sum of sixty thousand ($60,000) dollars therefor relied thereon and subscribed for the shares of stock now held and owned by them in the said Kamalo Sugar Company Limited. "(7) That tlie said defendants Frank Hustace, John J. Egan and Frank II. Foster paid to the said IL McCorriston and I). McCorriston the sum of twenty-five thousand ($25,000.00) dollars in cash out of the money paid into the treasury of said company by the plaintiffs and other of the stockholders thereof as aforesaid and did also falsely wilfully and corruptly issue and deliver to the said II.

McCorriston and D. McCorriston paid up stock of the par value of twenty thousand ($20,000.00) dollars the property of tlie said Kamalo Sugar Company Limited which said twenty thousand ($20,000.00) dollars in cash and twenty thousand ($20,000.00) dollars in paid-up stock was the actual amount paid for tho said lands and premises so purchased from the said II. McCorriston and D. McCorriston as aforesaid. "(8) That tin? said twenty-thousand ($20,000.00) dollars of paid-up stock so issued and delivered to said II.

McCorriston and D. McCorriston as aforesaid was not the property of said defendants Frank Hustace, John J. Egan and Frank II. Foster and they had. no lawful right or authority to issue and deliver tlie said paid-up stock to the said H.

McCorriston and D. McCorriston as aforesaid and they tho said defendants wilfully and corruptly and with intent to cheat and defraud the said Kamal Sugar Company Limited and the stockholders thereof iseued and delivered the said stock secretly well knowing that they had no lawful right or authority so to do." Tlie remaining allegations were, in substance, that respondents Hustace and Foster were directors of the company and had control of tlie Board of Directors; that tho officers of tlie company were requested to institute proceedings to recover of tho three respondents first named the sum of thirty-five thousand ($35,000.00) dollars alleged in the bill to have been fraudulently converted and that such officers failed and refused so to do; and tli at tlie officers had issued a call for certain assessments on tlie assessable stock of the corporation, which assessments the complainants averred to le unnecessary, and had threatened to sell certain stock for non-payment thereof. The prayer was for an injunction to restrain the threatened sale of delinquent stock, "and further that tlie said defendants Frank Hustace, John J. Egan and Frank II. Fostor.be declared trustees for the Kamalo Sugar Company, limited, and that they he ordered by this Honorable Court to pay into the treasury of the said Kamalo Sugar Company, Limited, tlie sum of thirty- Gaxbraith ast Perry, and J.

W. Cathcart, THE BAB, IX PLACE OF FREAK, O.J., ABSENT. Certain amendments to a bill and answer were allowed after the close of the evidenee. Held, that these amendments presented a new and tiietloct issue not raised by the original pleadings and that, under the circumstances, it was error for the court to refuse to receive evidence offered "by the respondents in strpport of the averments of the amendments' to their answers and to enter a decree against the respondents without hearing such evidence. OPINION OF THE COURT BY PERRY, J.

(Galbraitih, dissenting.) The plaintiff comes to this court on exceptions. The errors complained of lire: (1) the granting of defendant motion for a non-suit at the close of plaintiff's evidence; (2) the of the- tri.il urt to reopen the case for the purpose of allowing the LuntifT to introduce additional evidence. The grounl fur the motion for non-suit was the failure of the evidence to Aow tlie right of pjssession of the premises in tlie plaintiff at the commencement of tlie action. It is admitted by plaintiff that if the evidence disclosed a valid outstanding lease the motion was properly allowed. Tho plaintiff instituted a suit in ejectment in the court below ia the month of Hay, 1899, against the defendants.

Ho Ico was not served with process and made no appearance in the suit. Tho defendant Kauai were served and appeared and defended. Tho evidence produced by the plaintiff disclosed the following facta: that in tlie year 1892 a lease was executed to Ho Hee for tlie premises in dispute and an additional area for a term of tort years, rent payable semi-annually; that Ho Hee paid rent under this' lease up to October, 1899; that in January, 1899, rent was paid to the plaintiff and that in October, 1899, tho bar was assigned, whether or not with, the consent of tho plaintiff does not clearly appear; that in the latter part of the year 1899 defendant Kauai asserted claim to a part of the leased premlsea and threatened Ho He if he did not take a lease from him to execute a lease to Japanese; that Ho Hee accepted a lease from Kauai for a part of the premises claimed by him; that Ho Hog excuses his act in taking this lease by contending that John Sumner, his lessor, had refused to give him any assurances that ho would protect him against tho claims of Kauai; that he, Ho Hee, specifically disclaimed any intention of or denying tho plaintiff's title by the acceptance of said lease from Kauai; that ho paid rent to both parties and recognized, so far as he could, the title of each and claimed to regard them both as good. It is contended by tlie plaintiff that the act of taking the lease by Ho Hee from Kauai was ipso facto a forfeiture of his from the plaintiff; that this act severed and terminated the relation of landlord and tenant between them and that from that time forward Ho He was a trespasser on the premises. Taking a lease from an adverse claimant by Ho Hee was an act inconsistent with his dutv to his landlord and would entitle tho landlord to enforce a forfeiture against the tenant for that reason, if tho landlord should elect to do so.

The law guards jealously tho possession which a landlord entrusts to his tenant. It places upon the tenant tlie absolute unqualified duty of preserving the possession for the landlord. Some cases go to the extent in the landlord's interest of declaring the attornment to a stranger void as against public policy. Byrne v. Beeson, 1 Douglas 179 Fuller r.

Street, 30 Mich. 237. "An attornment shall not inure or work to pass any interest to make a lad grant good, nor to give a man a tenancy by disf-eisin, intrusion or abatement." Shepherd's Touch. 254; Kurtz 24 Penu. St.

35; Perkins r. Potts, 73 X. V. 936. So carefully is this right of possession of the landlord guarded by tho law that a tenant is not allowed to dispute the title of his landlord until he has restored the landlord to possession of the premises; and this principle is strictly applied to all who deal with the tenant and obtain possession from or through him during the continuance of the original term.

Fleming v. Mills, 12 111. 264. The landlord, however, assert his right to insist upon a forfeiture. Tlie fact in the case at bar eaily distinguish it from lViiVf r.

IVatlins. 3 Peters 43 and Peyton c. Stilh, 5 Peters 435. In each of these- casw the tenant not onlv attorned to a stranger but refused to pay rent to his landlord and expressly repudiated the tenancy. Tlie positive and express repudiation of tlie tenancy was tlie circumstance which those cases led the court to hold the tenancy to be at an end.

In the absence of uch a direct repudiation we hold that the 1 -1 The complainants brought a bill in equity, the main allegations of which were as follows: that on or about tlie 8th day of May, 1899, the respondent corporation was organized with a capital stock of one million dollars divided into fifty thousand shares of the par value of twenty dollars each, that the said shares were purchased by a large number of persons residing in the Hawaiian Islands and elsewhere, and that tlie complainants became and are stockholders in tho corporation; that the respondents Hustace, Egan and Foster were tlie promoters of tlie corporation; '-(4) that on or about the 20th day of April, A. D. 1S99, and before tho incorporation of the said company the said defendants as such promoters held out and proposed to the said plaintiffs and their associates that a corporation should be formed for the purpose of raising and cultivating sugar cane and doing a general sugar plantation business on tho Island of Molokai, Hawaiian Islands, to be called and known as tho Kamalo Sugar Company, Limited, and tliat in order to do so if was necessary that intending stockholders in said proposed company should pay to said defendants a ten (10) per cent assessment on the capital stock of said company and that said plaintiffs and their associates did pay said assessments to the defendants and that on or about the 29 th day of April, A. D. 1899, and after the payment of said ten (10) per cent assessment the said defendants Hustace, Egan and Foster purchased certain lands and premises situated on said Island of Molokai belonging to H.

McCorriston and D. McCorriston both of whom reside on said Island of Molokai; end the said defend' ants Frank Hustace, John J. Egan and Frank II. Foster agreed to pay to the said II. McCorriston and D.

McCorriston the sum of twenty-five thousand ($25,000.00) dollars for the said lands and premises, and accordingly the said defendant did pay to the said H. McCorriston and D. McCorriston the said sum of twenty-five thousand ($25,000.00) dollar out of tlie moneys paid into the treasury of said company by the stockholders thereof and they tlie said defendants obtained a deed of said lands and premises from tlie said II. McCorriston and D. McCorriston which said deed conveyed the said lands and premises to the said three defendants and they the said defendants recorded the said deed in the office of tho Registrar of Conveyances in said Honolulu on or about tho 10th day of June, A.

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