LAW REPORTS.

Dominion, Volume 5, Issue 1297, 28 November 1911, Page 3

LAW REPORTS.

SUPREME COURT. ftOSS GOLDFIELDS COMPANY. . CALL RESISTED. SUIT TO ItJWTRAIX DIRECTORS. .'The affairs of the.Ross tloldfields, Ltd.. which have caused considerable interest from timo to lime, were mentioued iu the Supreme Court yesterday, before the Chief Justice {Sir Poberfc. Stout). In this case an injunction was applied for In restrain the directors from making a further call of If, per share. ' :lt from the proceedings that, on.Thursday morning, tho shareholders of 'the company had learned that, affer the meeting on Wednesday, tho directors had struck a call of 1?. per share, payable on December U next—three days before a general meeting. It was alleged that certain shareholders, whose confidence in the directors had been shaken, would refuse to pay. Other shareholders, believing that tho call was being made to prevent those who refused to pay from having, a vote at the general meeting, i forwarded to the directors a requisition (signed by ten shareholders), requiring them to call another meeting to consider the question of removing the present board from office. .. At the same, time it was pointed out that the directors' action in striking the call would disenfranchisa shareholders, and it was asked t.hat : the meeting should bo called'for December 8 —before disenfranchisement could take place. - In tho event of tho directors failing to. do as requested, the shareholders threatened an action to restrain them from, proceeding with the call. Xo reply being received, the action indicated was taken on Friday..to set the call aside, and to .restrain th(i directors from letting contracts until after tho meeting, oil the ground that the call was not struck in good faith. On' Saturday morning, .Mr. ,F. E. Fetherick, solicitor for the mpving shareholders, rcceiyed a reply -from', the. directors stating their intention .to. call '. the meeting for December li, and covering a copy of the resolution passed by ,Uie directors, on November 23,' striking the -call. Gfimnds for the' call were given as follow:— . ■ . The conditions of the company's finance ■■ -hiul outstanding.account:-..' *• Advice received from 'tho; company's' solicitor on. the West,. Coast, that men should. be.put on' to fulfil working,conditions if protection, of ;fhe; company's leases was not grafted by November 25- .(no reply .having' been from the Minister to 1 the request for protection). • ' That.a resolution had. been passed at a general meeting of shareholders ill the ' morniiig rcqi.ies.ling an expenditure of 1E'3500 for putting the plant in order. In. consequence, of this Mr. Petheviek appeared before tho Chief Justice yesterday to ask that the'case should stuml over until this morning, so that a reply could be received from his clients in Auckland as to whether they should proceed with the motion for an interim injunction (o.restrain the directors from commencing'work- until after tho meeting, as a. further requisition was'intended to be'lodged to-day, asking the directors, to call a meeting far December S or 9, (o ■ consider not'only their removal from office,- but other-matters affecting the policy of-the company. * In granting'the adjournment:.' his Honour said .that if there was cviricnco that his enll was. not boiia fide, ho would gTant the injunction. IS THE CONTRACT BINDING? LAND SALE. POSITION OF THE MOKTGAGEES. A rather involved ease' was that of Taylor v. Parkinson and Blyth; which came before the Chief Justice (Sir Robert Stout; iD the Supreme Court yesterday. The main question was whether tho defendants were bound by a. contract by the equity of redemption, which contract, they stilled, had been signed in eiror. As second mortgagees they had bet\n under the impression that thev were biddin"' tor the property itself. • That impressioS had been formed from the fact that the auctioneer had stated that ho would take his bids for what the propertv was worth per acre, and would then deduct the amount of the first mortgage from l the total price, requiring the 'purchaser to par the balance and take over tho'land > subject-to the first, mortgage. The action concerned a block of' land near Ohau. in the Manawatu district, comurising altogether some 2335 aeres, and known as Block SL, Tukehou, Sections 1, 2, 3, 3a i, and 5. ' .-The parties •to . the-acfion were John Honry Taylor, farmer. . of Muhunoa, Ohau, plaintiff, and Walter Fox Parkinsou and Harry Alexander Foster Blyth, farmers, of Ataahua, Canterbury defendants. Mr. Martin Chapman, K.C., with him I ell, appeared for tho plaintift, and Mr. 1. Stringer, K.C., with him Mr. M. s. Brown, for the defendants. T?ic Statement of Claim. In his statement of claim, Tavlor alleged that until December 21, 1310 he was the owner of' the 2335 acres mentioned above, and that there were, on that ( date tlireo mortgages, namely. (1) to J. iuM'Donald, to sccuro. JJ7753 ISs.; (2) to-detendants (Parkinson and Blvtli) to feeurft :J9a. 3d., and interest; (3) to Dalgety aud Co., Ltd., .to secure the amount then due on current account and t urthcr advances. ' The last-named morfcgage had since been released. : The mortgage to Parkinson and Blyth. contained a power of. sale in the event cf. default, non-observance of conditions, etc. Taylor, made such default as entitled Parkinsou - and Blyth to exercise this power oi n • i and Blyth asked the Registrar of the Supreme Court at Welingtoa to conduct the ,sale, and informed I liim that the sum, which they estimated f? be 'R L ; va * Uc 0 ' equity of redeum- , tion. ot the land,' was • <£2600. • Parkinsoii > bought the land at auction (subject to the uiortgago to M'Donald,, so Tavlor alleged( for JCD33/ 9s. Gd., being at the rate of J;i per. acre. Parkinson signed a contract stating that it was the "equitv of redemption" which foe had purchased, and this-was also signed by. the a-iictioueer as agent: for the.vendors. At the time of the sale_the amount due to J. R.M'Donald was. .67153' 18s„ and the amount due to Parkinson and Blyth by Taylor was ,£2500 15s. Sd., while Parkinson and Blvth were also ratified to the expenses of the sale. Taylor claimed thut as a result of the sale (1) Parkinson became the owner of the land subject, to the mortgage -to J. K". M'Ponald;' (2) that Parkinson and Blyth were entitled to deduct .the amount owing to them from tiny .£9337 !)s." Bd„ aud then to account lo him (Taylor) for tlie balance. ' Parkiusaii (so ii: was further alleged byTavlor) proceeded to outer into possession, aild to dispose of the land us absolute owner thereof, and agrc-ed to sell (subject to the mortgage) to Jiobert Wynn Fleming, subsequently arranging aii exchange of. the land against certain lands oinied by Flaming. By reason of siia'j sale arid exchange, it became unnecessary for Parkinson to take a transfer from the Registrar. and the defendants (Parkinson, and Blyth), purporting, to act under tho power of sale in- the mortgage and by direction of Parkinson (the purchaser at auction) transferred the land lo Fleming- Taylor contended that this execution by Parkinson ond Blyth of a transfer, purporting-to carry out a direct sale by them to Fleming, was a -colourable device for the purpose of endeavouring to avoid the effect of the sale through tho registrar, and to make (he transaction appeal- as if the sale through the registrar were validly abandoned and .nullified. 'I'aylor submitted that the power of sale did'not authorise any exchange and that the true nature of the dealings with tho land was a sale.by-auction to Parkinson, and a resale to- or exchange with Flom'ill"'. Taylor • therefore adked for . a declaration that, by virtue of tho sale, Parkinson became the purchaser, that nn account should be taken of all sums paid »r payable bv Parkinson and Blyth to Ihu date of the sale ,in connection with tliu first mortgage and .ot" tho sum payable to Parkinson and Blyth by virtue-of their own mortgage, aud that the.regis-trar-should adjust the expenses-and certify the -amount of the residue of ,£9337 ami interest at six percent. to be paid to the plaiiititt. There were alternative claims in one of j wticb Taylor taid that the land wa£

transferred under value In Fleming, ami that tlie value i;f tin' lam: was .£.'17.0111 (!o ,C>Xir 9s. lid.. anil 111" amount <>t I hi: lir.it niortg >»e )>•.) or mere. i-'llri! l'cr tplainti'V we 00. Clark, i,t J hi l SupicDi:' t'ourl still', .1. H. Tavlor. pl;iintilV. S- S. 0.-born, Henry Ails.dt, A. Murray, J. 11. .Murray, and I'. licvon, jiiuv. The Dcfcncc. The defence wn= n denial Ihat I'arkin>oll was I lie pin-L-lKi.-fi- of Die I,mil on the conditions mentioned in tin- statement <"| fl.'iim. It was admitted. lioivc\er. that Purkin.-on had been ;i biddi-r at; I Ik: lc <i.~ nit agent for hini.-eli' .'iml Myth. and it was stated (lr.it (lie auition''■jt lind Hiked bidders to bid al wh it tlicy IJioijj]), l I lie j>ro(>c-rt v iras worfh per Ai'.i'v fiuiount. of .1. I>. -M Donald's mortgage would be deducted Ironi the total prue. and the purchaser would have tu pay. the balance, and take over theland subject to -M'lJcii.'ilflV; mortgage. Parkinson nnd Bl.vtU .slate that Parkinson = bid of j;i per acre was made on these condition?, and that the. document (re ''the cijuit.y of redemption"'' Ui3t was signed by l'arkinfon and the auctioneer after the fain was signed by tliem in a common mistake, ami wan wholly void in effect. l'arkinson and Blylh admitted that Parkinson (actiug as agent for both defendants) had agreed to the exchange iut.li Vleming. aud. subsequent to that, Parkinson and Birth had tendered to the Registrar for execution by him a. transfer to ttiem of the land, subject, to the first mortgage, in consideration of the sum of Jil.jM lis. 6d.. being the difference between the amount of ,£1 per aero 'i' 5337 Ps. Cd.) bid bv Parkinson, and the amount of the first mortgage (4:7753 18s.>. Tho Registrar declined to execute the transfer on the ground that it was net iu accordance with the contract signed at the sale by auction. This was the first occasion oil which the defendants (Parkinson nnd Blytli) discovered the purport of tho contract signed by Parkinson, and thev after, wards notified Taylor that they 'refused to 1)0 bound by the contract, aud would treat it as a nullity. Further, Parkinsoil and Blytli said that the contract was rescinded by mutual consent, and thev denied that their action in the transaction with Fleming was a colourable device for the purposes alleged by Taylor. They further denied that the value of the land, was '.£17,091 or more, arid also denied other statements iu the claim. A counter-claim was made by Parkin-son-and, Blytli for ,EIG!)S fls. id., being balance and interest due under their mort-gage,-and'.they asked that the sale of the laud to defendants, or either of them, on the terms alleged, lie declared wholly'void. To this counter-claim' Taylor tiled a defence to tho effect that, in the circumstances the claim of Parkinson aud Blytli I was fully satisfied, and that any mistakes made in signing Ihe contract were the mistakes of Parkinson and Blytli and their age.it f'tlia auctioneer). Evidence for the defence was given by W. S. Bennett (Walgety and Co.), 0. H. Torritt (Abraham and' Williams), 11. A. Abraham (Abraham and Williams), J.'S. Jameson, auction clerk, W..J. .Simpson, farmer, and l'rank Bennett, surveyor. At 5 p.m. there were sfill several witnesses- to call,' and the further hearing was adjourned until 10 o'clock this morning. ■