SHARES IN COMPANY

Evening Post, Volume CXVI, Issue 33, 8 August 1933, Page 14

SHARES IN COMPANY

CLAIMS FOR REFUNDS

SHIPPING COMPANY VENTURE

(By Telegraph.—Press Association.) DUNEDIN,' August 7. i A case arising out of the attempted! formation of the Southern Pacific Shipping Company last year was heard in the Magistrate's Court bofore Mr.'J. R. Batholoroow, 8.M., when five of the provisional directors of the company were proceeded against by three plaintiffs who purchased shares but. did not get their money back' when the company failed to go to allotment. The plaintiffs we're Beginald Hanley Little, of Wellington, and Henry George Strong, and Eaymond Henry Strong, of Dunedin. The defendants were Sir Charles Statham, James Boss Clarke, Francis Charles Fulton Eeid, of Dunedin, Walter Joseph Jones, of Invercargill, and Hugh Valdemar Johansen, of Auckland. Little claimed to r.ecover £70 and the two Strongs £90. The statement -of claim sot out that the defendants, with William Chambers (Sydney) • and William H. Swanton (Melbourne) -were provisional directors of a, public company intended to be incorporated and to be called "Southern Pacific Shipping Co. of New Zealand, Ltd." A prospectus was issued, and it was stated that the nominal capital of the company was to be £250,000. Johansen was held out as the agent of the provisional'directors, and an office was .opened in Battray Street, Johansen furnishing it, and obtaining a staff. The company was never incorporated, and the defendants caused to be refunded to subscribers moneys paid by them, with the exception of moneys owing' to the plaintiffs. BeginaldLittle said that he paid £70 to the defendants upon representation from Johansen that he would be given a position oh oue of the proposed company's boats and that his wife would be allotted the. position of children's companion on one of the boats. Neither of these positions eventuated. .Henry Strong and Raymond Strong said that they respectively paid £.100 and £50 on representations that Henry Strong would be given a position as stoiemau and Baymond Strong as engineer in the company. The Strongs had been repaid £60. Mr. Hamer, for Johansen, said that Johansen was not defending tho case, but was consenting to judgment on certain terms. Johansen received money on.behalf of the proposed company, and it was not Mb duty to account for these moneys. His first contention was that he roceived the moneys personally, and that he was to allot some- of his own shares to the applicnnts who were plaintiffs, and Johansen was prepared to consent to judgment on those terms. After lengthy evidence had been heard the Magistrate said it'was clear that the plaintiffs must' bo nonsuited. The' prospectus was not issued before MaTch 24, 1932, and payments had been made before that time. Clearly they had not been made in pursuance of the prospectus. The plaintiffs were therefore thrown back on the question of authority. The question' was whether Johansen had authority to receive money on behalf: of the company.'_ It was clear he had no express authority, and there was no evidence to show tha| there was' implied authority. The directors were not. agents for each other. Johansen had certainly done some extraordinary thingsi on. his own motion, but others were not concerned with those acts'unless there was some authority, and that had. not been shown. On-the contrary, the other provisional directors seemed •to have been very much on the alert. They, had called Johansen to explain. certain actions, and when he failed to do so they called oh him to resign, thus ending his career, and preventing him abusing his position. The plaintiffs would be nonsuited, but judgment would be entered up against Johansen by consent for £100, and costs £18 9s'6fl.