Spreckels v. Nevada Bank

Henshaw, J. This is an appeal from an order dissolving a preliminary injunction.

The complaint charged the following facts: In 1894 C. A. Spreckels purchased of Claus Spreckels stocks and bonds of the Hawaiian Commercial and Sugar Company for the sum of seven hundred thousand dollars, payable one-half on or before January 4, 1895, .the other half on or before January 4, 1896. To secure these payments 0. A. Spreckels pledged collateral securities largely exceeding in value the amount of the debt. As additional security for this debt of C. A. Spreckels, plaintiff, Rudolph Spreckels pledged five thousand shares of the Paauhau Plantation Company, of the value of five hundred thousand dollars. This stock was pledged under an agreement with Claus Spreckels that it should not be transferred out of the owner’s name upon the books of the corporation until after maturity of the debt. In December, 1894, Claus Spreckels transferred and assigned the debt and its securities to the defendant bank, which took with notice of all conditions. The first moiety of the debt was paid when it became due, and defendant, under agreement, thereupon delivered to their respective owners one-half of the securities pledged as collateral. The half retained and still held by defendant is of more than twice the value of the unpaid debt. Defendant, before maturity of the principal debt, threatens to send, and, unless restrained, will send, the certificates of two thousand five hundred [275]shares of plaintiff’s stock out of the jurisdiction of the court and to a foreign country, the republic of Hawaii, and will surrender the same to, and cause them to be transferred upon, the books of the Paauhau Plantation Company out of plaintiff’s name, and into the name of defendant, or some of its agents. This will be done that said stock at the next election of officers of the Paauhau Company may be voted against the will and interest of plaintiff.

These threatened acts, if consummated, will impair plaintiff’s credit, will deprive plaintiff of control and the courts of this country of jurisdiction of the stock, will violate the contract of pledge by preventing plaintiff from redeeming it at will, will imperil plaintiff’s interests in the corporation, and impose extra burdens and large expenditures upon him by compelling him to go to a foreign jurisdiction to enforce his rights.

At the hearing of the motion to dissolve the preliminary injunction there were disputes upon certain questions of fact. It was denied that in the contract of pledge there was an agreement that the stock should not be transferred until after maturity of the principal debt. It was further denied that the defendant bank took with notice of any such agreement. And it was denied that its purpose in seeking to effect the transfer, which purpose was admitted, was anything other than to avail itself of its legal rights for its protection against possible impairment of its securities, should proceedings be instituted against plaintiff, and his property be subjected to seizure or attachment at the hands of the Hawaiian government, or some private creditor, without notice of the pledge. By the order of the court dissolving the injunction these questions of fact may be taken as having been resolved against the claim of plaintiff. They need not here be further considered.