Castle v. Kapena

5 Haw. 27
CourtHawaii Supreme Court
DecidedJanuary 2, 1884
StatusPublished
Cited by23 cases

This text of 5 Haw. 27 (Castle v. Kapena) is published on Counsel Stack Legal Research, covering Hawaii Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Castle v. Kapena, 5 Haw. 27 (haw 1884).

Opinion

Opinion op the Full Court by

McOully, J.

The petitioners set forth that they are citizens and taxpayers of the Kingdom; that they are informed and believe that the respondent, in his official capacity, has prepared and is now about to issue bonds to the amount of one hundred and thirty thousand dollars, purporting to be pursuant to the Act of August 5, 1882, taking in paym7nt therefor silver coins which are only about .eighty-two per cent, of the value of United States gold coin, [31]*31whereas it is prescribed by the statute that they shall be issued not below par in United States gold coin or its equivalent. That by the proposed issue the petitioners, as citizens and taxpayers, would be injured ; that they have made a demand which the respondent has refused; “ Wherefore your petitioners pray that a writ of mandamus do issue out of this Honorable Court, requiring the said Minister of Finance to accept for said bonds pnly United States gold coin or its equivalent, and not to accept therefor the silver coins aforesaid, and not to issue such bonds except for their par value in United States gold coin or its equivalent, and for further relief,” etc.

The return and answer of the respondent, denying the sufficiency in law and neglect of duty, etc., says that he is about to issue bonds to the amount and at the interest stated, and in accordance with the Act referred to by the petitioners; denies that his intended issue is below par, and avers that 'he is about to issue the bonds at par ; denies that it is his duty to issue said bonds only upon receipt of their equivalent value in United States gold coin; denies that he intends to receive or accept therefor coins of less value than the equivalent of the lawful money of this Kingdom, and (by amendment) avers that he is to receive for said bonds silver coin in half-dollar pieces of equal weight and fineness with United States silver coin of the same value, and lawful money of the Government of the Hawaiian Islands; and denies that he has refused any lawful demand.

It is evident that if the respondent were about to make a legal issue of bonds, the petitioners could obtain no order of the Court in restraint thereof. The Act referred to, which is Chap. XXIX of the Session Laws of 1882, provides by Section First as follows:

“ The Minister of Finance, under the direction of the King in Cabinet Council, is hereby authorized to borrow on the credit of the Hawaiian Government, from time to time, during the period of three years after the passage of this Act, such sums not exceeding in the whole the sum of two million dollars, for the purposes in this Act hereinafter set forth, for which sums the Minister of Finance may cause coupon bonds to be issued from time to time, for such amounts each as he may deem advisable, such bonds to be issued at not less than par, and to bear interest not [32]*32exceeding 6 per cent, per annum, payable semi-annually, and said bonds to be exempt from any Government tax whatsoever, and to be redeemable in not less than five nor more than twenty-five years, the principal and interest being payable in United States gold coin or its equivalent.”

The averment and argument of the petitioners is that the intended issue would be illegal, because issued at less than par-They aver that the silver coins, which the respondent admits he will receive, are worth only about 82 per cent, of the value-of United States gold coin, and the respondent does not deny this in his answer, and concedes in argument that such is the relative intrinsic value of these silver coins. The bonds are payable, principal and interest, in United States gold coin or its equivalent. What is their par value ?

Par is the Latin word for equal. It has been adopted into the English language, and continues to have the same meaning and no other. Webster’s Dictionary, in illustrating its meaning, says; “Bills of exchange are at par, above par, or below par. Bills are at par when they are sold at their nominal amount for coin or its equivalent.” Bouvier’s Law Dictionary uses the same terms.

Now, the nominal value, the value expressed in these bonds and their coupons, is-dollars, United States gold or its equivalent. When such bonds are issued or sold for the amount expressed in them, paid in United States gold or its equivalent, are t-hey sold above par ? And if they are sold for any sums of money, not being the same amount in such gold or its equivalent, are they sold at par Or below par ? These questions answer themselves ; but it is not" putting the case too strongly to say that eighty-two per cent, of a gold dollar is not equal or par to a gold dollar, although the eighty-two per cent, coin may, by usage or legal tender statute, circulate at a valuation of one hundred cents.

The statute under which these bonds may be issued determines the standard for their payment, irrespective of any other statute regulating currency, and their par value is the amount named in each bond in such expressed standard coin.

The question of the par value of bonds was considered in the case of “ The State of Illinois vs. Delafield,” 8 Paige, 526, and the [33]*33same; by appeal to the Court of Errors, in 2 Hill, 159, where the decree of the Chancellor was affirmed. Bonds of the State, issued for the purpose of making a canal, and by the statute required to be sold at not less than par, were sold by the defendant on credit, whereby the purchasers received interest for a term before the State received payment. This was held to be a sale at less than par, although it was shown that this allowance of interest was necessary to make up the cost of exchange in making the payment from New York to Illinois. Bronson, J., in delivering the opinion of the Court of Errors, says :

“The bonds were not to' be sold at their market value, if less than the nominal sum secured by them. They were six per cent, bonds in all markets, and the Commissioners were forbidden by their power — the statutes of Illinois — to sell them at less than their par value. This can, I think, mean nothing else than pound for pound or dollar for dollar.”

After quoting the .illustration above, taken from Webster, the learned Judge continues:

“ It is a question about par value, and if that does not mean in this case a dollar in money for every dollar of security, the wit of man cannot tell us what it does mean.”

It will be noticed that'the case at bar resembles in sundry particulars the case above stated. Our Act provides for a loan for certain purposes, which are specified, and what amounts from the loan may be applied to each, if the loan shall be made. The authority to the Minister is an authority to issue at not less than par. Our bonds are to be six per cent, bonds in all markets, and payable in United States gold coin. The language of the Court is a full reply to the argument made for the respondent, that a construction of the Act to require that these bonds be sold at par, in United States gold, or its equivalent, would defeat the statute, and therefore, to effectuate the statute for a loan, it must be construed so that a loan can be made; and that, as United States gold or its equivalent cannot be got for the bonds, something of less value mnst be taken. The Minister of Finance is not held to secure the sale of the bonds. It is only his duty, when directed by the King in Cabinet Council, to make the loan, [34]*34to offer it upon the terms and with the limitations prescribed by the statute, the sole authority for the bonds.

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Cite This Page — Counsel Stack

Bluebook (online)
5 Haw. 27, Counsel Stack Legal Research, https://law.counselstack.com/opinion/castle-v-kapena-haw-1884.