SHAREHOLDER AND DAIRY COMPANY.

Dominion, Volume 1, Issue 291, 2 September 1908, Page 5

SHAREHOLDER AND DAIRY COMPANY.

« IMPORTANT JUDGMENT. (B¥ TECiECItArn —I'ItESS ASSOCIATION.) Auckland, September 1. Mr. R. AV. Dyer, S.Mv, this morning gave judgment in the ease in which the Matakana Co-opcrativo Dairy Company, JjM., sought to recover £30 ss. Id. from J. Wotherspoon, of Whangarcpo, for loss sustained by plaintiffs by reason of the defendant-failing to supply the prescribed amount of butter-tat in terms of the articles and amended articles of association of'the plaintiff company, luo plaintiff company is a limited liability company, duly incorporated under tho Companies Act, 1882, with a capital of £5000 divided into 5000 shares of £1 each. Prior to Juno 1, 1003, defendant applied for and was allotted 20 shares in the company, and -was duly entered upon the company's register. Mr. J. Alexander appeared for the plaintiff company and Mr. Blomfiold for tho defendant. Til giving his judgment Mr. Dyer said that liy the original articles each shareholder was to hold as many shares as ho milked cows, such shares to bo paid by tho payment of 2s. Gd. per share on application,, and tho balance by the_ deduction of |d. per lb. of butter-fat supplied .by him to the company until tho amount of his shares was fully paid up. On December 19, 1905, the defendant's original shades wcro fully paid up. On March 30, 1907, tho defendant was allotted 20 now shares under the amended article Bc, which provided that as soon as tho shares of any shareholder should be paid up as provided by tho original article 8 it should be lawful for tho directors to allot to him more shares in tho company, not less in number than those originally allotted to him, to bo paid for by the deduction of gd. per lb. of butter-fat, and the shareholder should continuo to take a similar number of new shares from time to time as tho shares held by him wero paid up, and should pay for the samo as lastly provided until the 'liability of tho company was paid up. Tho present action was laid on articles Srt and 8b to recover alleged loss through defendant failing to supply tho required quantity of butter-fat. On July the directors declared a dividend of £5 por cent, on all fully paid-up shares, and in September, 1907, defendant was paid a dividend ; of £1 13s. Tho defendant, while admitting that ho failed to supply as much milk as lio should liavo supplied under the amended articles, contended that thoso amended articles wero ultra vires, and therefore invalid. 1 In the course of reviewing tho obligations of tho association and its limitations his Worship went on to express tho opinion that the amended articles had increased the liabilities of the shareholders beyond tho liability limited in 1 the memorandum of association, and that they were therefore ultra vires of the.memorandum, and void. Judgment was accordingly given for , the defendant with costs.'.