A century-long saga is coming to an end as court administrators shut down the Damon Trust, a Hawaiian legacy estate once valued at nearly $900 million.

The estate’s trustees have filed a court petition asking for approval of a settlement with two of the dissident beneficiaries and are seeking to finalize and wind down the remainder of the estate. The hearing is scheduled for Nov. 1.

If all proceeds according to plan, the last of the remaining money in the trust — about $15 million — will be distributed to 30 beneficiaries  in the next few months, according to court documents filed in the probate court in Hawaii’s First Circuit. Another $8 million will go to expenses.

The Damon Trust is one of the last important institutions tying old Hawaii to new Hawaii, stretching from the original agricultural and maritime economy to the era of modern global financial transactions conducted over the internet. Aspects of the family story closely resemble the scenes and settings in the book and movie “The Descendants.”

Buildings at Moanalua Gardens Damon. Moanalua Gardens cottage, a wooden structure located at Moanalua Gardens.
A former cottage belonging to King Kamehameha V graces the the former estate of Samuel Mills Damon, today’s Moanalua Gardens, the home of a controversial financier who inherited the land from an heir of King Kamehameha. Cory Lum/Civil Beat

“The Damon estate was a critical element bridging Hawaiian history,” said James Wright, a retired attorney who formerly represented Damon beneficiaries. “It took us from the kingdom, to the republic, to the territory, to statehood. It was essential to what Hawaii became.”

The often brilliant, frequently eccentric members of the Damon family, meanwhile, played central roles in Hawaii’s political and economic history, often embroiled in vexatious litigation and frequently touched by tragedy.

From the very beginning, the creation of the estate was controversial.

It started with Princess Bernice Pauahi Bishop, who was one of the last remaining descendants of King Kamehameha. As her relatives died off one by one, valuable lands that they had owned were bequeathed to her.

Bernice Pauahi Bishop was the granddaughter of King Kamehameha
A noted philanthropist, Bernice Pauahi Bishop left lands that led to the creation of Kamehameha Schools. She also left an unusually large bequest to Samuel Mills Damon. Bishop Museum

The princess had been raised and educated by Christian missionaries and she married a white businessman, Charles Reed Bishop. Like many of the alii, they had no children.

In Bernice’s will, she directed that the bulk of her estate be used to fund education for Hawaii’s children, the bequest that led to the founding of the Bishop estate and Kamehameha Schools. The Bishop Museum was created later to house the cultural artifacts she had inherited.

But shortly before Bernice’s death, she added an amendment to her will containing 17 items. No. 9 on that list was a particularly valuable bequest to a man she called “my friend,” Samuel Mills Damon, her husband’s young business partner.

She left him a giant parcel of land known as the ahupuaa of Moanalua, more than 9,000 acres, comprising two valleys that ran from the Koolau mountain range down to the sea, west of downtown Honolulu. That area is now home to Tripler Army Medical Center, Mapunapuna, Salt Lake, parts of the Daniel K. Inouye International Airport and the beautiful and scenic Moanalua Gardens, known for its large trees.

Damon, who was born in Hawaii in 1845, was not a missionary descendant but had religious ties. The Hawaiian Kingdom was an important maritime center and Damon’s father, Samuel Chenery Damon, had served as pastor at the Seamen’s Bethel Church on the waterfront. The senior Damon was respected for doing work widely viewed as thankless, greeting ships as they arrived in port and taking needy, ailing and disabled sailors under his wing.

Damon’s mother, Julia Mills Damon, was also beloved as head of the Strangers’ Friend Society, a leading local charity. Her grandfather had been Samuel Mills, one of the founders of the American missionary movement, who had befriended the famous Hawaiian Henry Opukahaia in New England, according to a recently published book “Partners in Change.”

To religious people, Samuel Mills Damon’s name carried particular cachet as a connection to the earliest missionary efforts that linked Hawaii and New England.

But the younger Damon showed more aptitude for money lending than soul seeking. He and Charles Reed Bishop, Bernice’s husband, worked together to build up a financial institution that later became known as First Hawaiian Bank. Over the years, they invested in real estate, railroads and sugar plantations.

By the time of Bernice’s death in 1884, Bishop was in his 60s and increasingly reliant on Damon, who was 20 years younger. Damon was also asked to serve as a trustee for the Bishop Estate and co-executor of Bernice’s will.

Samuel M. Damon became a prominent financier in Hawaii.
Samuel M. Damon’s wealth increased markedly as a result of a bequest of more than 9,000 acres of land from Bernice Pauahi Bishop, the granddaughter of King Kamehameha. Bishop Museum

Many Hawaiians were startled to learn that Bernice had bequeathed such an important set of lands to a young white businessman. There was a lot of speculation about it over the years, recalls Oswald Stender, a former trustee of the Bishop Estate and the Office of Hawaiian Affairs.

Some people thought it was a deal set up by Bishop and Damon or a strategy to ensure protection of Bernice’s properties, or perhaps it was a love triangle of some sort between the three people.

“No one was sure what story was true,” Stender said.

As Damon continued building his own financial empire over the next decades, he took up residence at an estate at Moanalua, where he was active as a botanist growing plants and trees at the site. He also found time to serve on the Bishop Trust, as a member of King Kalakaua’s privy council and as a finance minister for the kingdom and later for the territory.

He also became famous for the role he played in convincing Queen Liliuokalani to give up her throne without a fight. Hawaii became, in short order, a republic, then a territory of the United States.

Vast Moanalua Holdings

The lands at Moanalua, which were the home of a string of productive fishponds, were a core part of Damon’s financial holdings. Under Hawaiian law, property owners had to take the rights of long-time tenants on the land into account, but the American legal system placed a higher premium on individual private ownership rights. Controlling the fishing rights would permit landowners to displace Hawaiians who had previously lived on the lands and fished there.

Damon sued the territorial government. In April 1904, he won a favorable court ruling from the U.S. Supreme Court that likened Damon’s exclusive rights to those of the previous owners of the land, Kings Kamehameha IV and V. The court ruling cleared the way for marshy areas previously used for fishing to be filled in and converted to other commercial uses.

The next year, numerous other wealthy estates, including those of Victoria Ward, Oahu Railway & Land Co., John De Fries, Emma Kaleleonalani, Abigail K. Campbell and J.M. Monsarrat, successfully claimed for themselves similar exclusive fishing rights, citing the Damon decision.

Later that year, Damon’s elder son was murdered in a dispute over a lantern. The young man had become inexplicably enraged at a Puerto Rican worker who had taken a lantern. Damon was alleged to have struck the man several times. The worker became angry and reportedly stabbed Damon to death.

The murderer, Jose Miranda, was convicted by a jury and executed within a month of the slaying.

Damon withdrew from public life and spent more time at his Moanalua estate, tending his garden. Over time, he began to exhibit some unusual behavior.

Hitachi Tree at Moanalua Gardens Damon. Scores of visitors from Japan pose fronting the ‘Hitachi’ tree located at Moanalua Gardens. The Hitachi tree is a symbol of the Hitachi groups advertisement campaign from the 1970s and is featured in their television ads.
Moanalua Gardens is a popular tourist attraction where many Japanese visitors go to view an unusually large tree that is a symbol of the Hitachi Group in Japan. The tree is featured in their television ads. Cory Lum/Civil Beat

“He was crazy, he was goo-goo and his affairs had to be managed,” recalls Roger Rose, a Harvard-educated, long-time historian at Bishop Museum, now retired, who has read many of Damon’s personal letters.

In 1914, Damon wrote out his will. It was noted at the time that it was written in an irregular way, without any ordinary punctuation.

Damon died in 1924, leaving behind a widow, three surviving children and five grandchildren. More grandchildren were born later.

At his death, Damon was greatly mourned by the Chamber of Commerce and influential territorial political figures. According to court documents, his estate was valued at $3 million at his death, or the equivalent of $45 million in value in 2019, allowing the trust to begin distributing some $90,000 a year to beneficiaries, equal to $1.35 million today.

Damon was particularly praised for a generous act of philanthropy, which was his decision to leave his scenic Moanalua Gardens parkland to the public. On July 14, 1924, the Honolulu Star-Bulletin described the bequest to the people as including “the gardens near Fort Shafter, the golf course, the polo grounds,” as “a place where the public is welcome,” with maintenance costs to be paid by the estate and not from public funds.

Legal Fights That Spanned Decades

The area’s historic and cultural status was later the centerpiece of the legal battle fought by two of his granddaughters to force the U.S. Department of Transportation to move H-3 away from the Damon property. Moanalua also became the home of a popular hula competition, the Prince Lot Hula Festival, which has since moved to Iolani Palace.

Within the family, litigation ensued over what portion of the estate should go to each child. Families who had more children thought they should get more of the money than those who had fewer. Ultimately the money was divided out to Damon’s children, with grandchildren from smaller families getting more than those who came from larger families.

The family’s inheritance was at the core of other legal disputes as well, including a bruising legal battle over filling in Salt Lake and paving it over for development, which environmentalists opposed. Once again, the Damon family was on the winning side of that dispute and construction went forward, according to the book “Land and Power In Hawaii.”

In 1994, with Damon’s grandchildren nearing the ends of their lives, the trustees began to consider terminating the trust. They had a plan that would have permitted the trust to avoid taxes on the sale of assets, but intense infighting had erupted that made it  impossible for the cousins to find agreement.

In the meantime, business went on.

In December 2003, the Damon estate sold about 200 acres of land east of the airport at Mapunapuna to a Massachusetts-based real estate investment trust, which paid $480 million for it.

More than 180 long-established small businesses operated on leased land on the property. Soon afterward, tenants were reporting their rents had doubled or tripled and some said they would be forced out of business. By 2009, the conflict had turned into a bitter legal battle covered closely by local newspapers.

The trust also sold two walnut ranches and real estate on the Big Island around the same time, according to court documents.

The estate was finally scheduled to terminate on Nov. 9, 2004 at the death of Damon’s last surviving grandchild, Joan Damon Haig.

The trust hit its peak valuation in December 2004 at $888 million, according to court documents. It generated some $30 million to $40 million annually for beneficiaries, according to the documents.

But the wind-down of the estate dragged on as interfamily disputes continued to simmer. The trustees have engaged in mediation since 2014 with Christopher Damon Haig and Myrna B. Murdoch, the ex-wife of estate trustee and beneficiary David M. Haig and the mother of one of the estate’s other beneficiaries.

According to recent court filings, settlements have now been reached with Haig and Murdoch, allowing the trustees to shut down the trust for good.

The beneficiaries of the settlements include 18 Hawaii residents, including nine on Oahu, seven on Maui and two on the Big Island, and nine people or trusts whose accounts are administered on the mainland, mostly in California. Three nonprofit groups are also listed as beneficiaries — the Nature Conservancy, the Maui Arts & Cultural Center and Seabury Hall, a private school in Makawao, Maui.

Over the years, the trust has provided a lucrative living for hundreds of attorneys, tax advisors and financial consultants in the state. They have spent years of their lives litigating family disputes and thousands of hours of government time has been spent resolving them.

At 10 a.m. on Nov. 1, if all goes as planned, the parties will hash things out before Judge R. Mark Browning.

Once again, they will gather in court.

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