SHARES FOR SALE.

Press, Volume LXI, Issue 18551, 28 November 1925, Page 19

SHARES FOR SALE.

ACTION AGAINST COMPANY. (press association tilbgbah.) . I HAMILTON, November 27. An important judgment affecting shareholders in co-operative companies was '■ delivered by Mr Justice Herdmnn at Hamilton to-day. * • At the September sitting of the Supreme Court James B. IVhisker, farmer, of Waibou, brought an action against the _ J»ew Zealand Cooperative Dairy Co., in which he elaimed payment of £7B 7s, vcpresentmg sums which, it was alleged, had been wrongfully detained by tho defendant company for calls. He also asked that his name be removed from the share register of the company as the holder of 14 butter shares allotted him in August, 1923. H«j- further sought to have certain of the articles of association declared ultra vires, and in ad dition, to have certain of his shares in the company resumed or surrendered. His Honour said it was certainly never intended that a company shareholder, merely because he happened to be a company shareholder, should be at liberty to issue an originating summons to have determined for his and the company's future .guidance the validity of each of the company's articles. If, his Honour proceeded, he were now to exercise his discretion in the direction of making a declaratory order, he would be leading shareholders in co-operativ« companies to suppose that when no claim against the/n was made, or when they had no claim agaiiiEl the companv. or when no dispute with the company had arisen, they were free to come to that Court to ascertain the limits of their rightß and oblieations under their company h articles. In hie Honour's opinion it was undesirable that ho should so widely open tnv door. He thought that this was a ease in which he should refuse to make a declaratory order. Dealing with the plaintiff's claim for a surrender of his shares, his Honour said the first observation he had to make was that he was not satisfied that the plaintiff had made application to the company to accept surrender of his shares, but assuming that such an application was made by*b:m. the company was not, in his opinion, bound to grant it. His Honour added: "X can find nothing which compels the company to grant an application, and I can easily understand that unless the directors of such a company as this are authorised to exercise discretion when applications to surrender shares are wade, serious financial difficulties may ensue. Whisker's liberty to trade has not been restricted in any way. He remains the owner of shares which the company refuses to buy. and he is free to trade where he pleases and with whom he pleases. The only thing he cannot do is to compel the defendant, company asainst its will arid against the interests of the company lo purchase his.shares." His Honour, concluding, said that judgment would be for the defendant. The question of costs could be mentioned again.