A MINING SHARE CASE.

Evening Star, Issue 12028, 28 October 1903, Page 6

A MINING SHARE CASE.

AN IMPORTANT DECISION,

At- the S.M, Court this morning Mr E. H. Carew gave judgment in rite Case the Vulcan Gold Dredging Company, Limited” m liquidation (Mr Hosking) w Bell (Mr Sim) as follows:—-

The plaintiff company, in liquidation, iue to recover a number of calls on 150 shares of which the defendant is registered as owner. Mr Hosking intimated at the opening of the case that only the claim for allotment money and one' call made by the liquidator would he proceeded with.' The ease is defended on several grounds : That (lie defendants applications for the shares were withdrawn before allotment and before notice of allotment was posted. That no notice of the meeting at, which the allotment was made was given to Mr Macdonald. one of the directors; that he knew nothing of the meeting, and did not attend it. .That defendant was induced to make application lor shares by a misrepresentation of the sub-brokers at Timaru that the claim owned by tile Vulcan Company was next hut one to the Royal Ninon, whereas in fact it was twelve or fourteen miles oistant from it. The evidence shows that, the allotment of .shares was made on the evenmg of February 22. 1900, that Air J. J. uatrmy was the broker who received all the applications for shares from other brokers and applicants, and that lie passed tnem over to Mi - Black, the interim secretary r,f the company. The date is not tmed. but it was probably on hj ehruarv 21. On February 22 Mr Dtmkford and A'lr Simmonds, brokers, of Timaru, by whom defendant's applications for shares had been transmitted to Mr Ramsay, telegraphed to Air Ramsay withdrawing" the applications. These telegrams, the evidence shows, would have reached Air Ramsay s office certainly long before the meeting of directors, which was held at Air Ramsay’s office, took place. If the contents of these telearams were communicated to the directors "before they allotted shares to the defendant, the withdrawal would take effect Air Ramsay says he has no recollection of having seen these telegrams, but if ho did before the shares were allotted he is confident he would have made their contents known to the directors, and he was present at the meeting when the allotment was made. Mr Ramsays firm wrote to Air Dunsford on February 25: “The Vulcan Company was registered before we got vonr wire and letter, and the shares are allotted. Allotment notices will g 0 out to-dav ” The v?^ 1 !v sdglled ™ tbR “ ama of the'finn by Mr Matbewson. Mr Ramsay’s partner and as it was a busy time Mr Ramsay may not have seen the telegrams, but it seems dear they must have been received at his office before any allotment took place. The questioa is now whether, under the circumstances, notice to the broker is without any proof that the withdrawal was communicated to either the interim secretary or the provisional directors. Slattery’s case (Irish Reports of Equity) was quoted as an authority that notice of withdrawal given to the broker hinds the. cmnjyipv. hut-dm'

| that case Inn s. the broker. was also the i manager and pimup-i .iilicvt cf ibe enmt pany. and T think i was not his position • as broker that bound tA ; tompuuy. it is | proveu by >1; A*ac s«m» ! d, then a director i of the rouipauy, that be received no notice of the first meeting of directors.—that is, the meeting at ■which the shares were allotted. The minute book, however, shows that the proceedings were confirmed at a subsequent meeting. It is said in Palmer’s Company I aw. page 150 ; “ Sometimes by an accidental omission to give notice to some-one director a meeting is irregular, hut the directors nevertheless transact business on behalf of the company—e.g., allot shares, malm contracts.” Where there has been such an irregularity a subsequent regularly constituted meeting can always ratify and •anfina what has been dene fay the irregular board, and it will then be valid ab initio. The authority given for this is the Portuguese Copper Companv. 45 C.D., 26, and the Land Credit Company. 4 Ch. 475. I think the subsequent confirmation of the minutes ratified what had been done bv tbe irregular meeting. Mr Hosking admits there was misrepresentation by the subbrokers as to the locality of the claim, but contends it is too late to raise that defence after liquidation is commenced, and, furtlier. as an ar&w or to a]i tlie points raised, that defendant informed the secretary to the company he would hold the shares, and that his election to do so is binding. On this point there is, first, Mr Bell s letter of d.'s/00 to Mr Lunsford withdrawing bus application. This letter was forwarded to Mr Ramsay by Mr Lunsford on the same date; Mr Ramsay, replying to Mr Lunsford on 9/5/00, said : “ However, as Mr Bell thinks he has a grievance, and we liave no desire to have any grumbling, we will give him fifty Britan n bus to soothe his feelings. It is a great, favor to get these, as you know, and they are worth 3s i>remium now. Of course, he mut?t keep Vulcans. Britannia is a claim near Island B.ock. We have kept fifty- for vou also, and we post under separate cover" forms of application, etc.” Mr Bell admitted be applied tor fifty Britannias through Mr Lunsford, that they were allotted to him. and he sold at a profit. When Mr Bell made that application there can be no doubt he know of that paragraph in Mn Hamsav s letter, and he accepted the advantage of what was a conditional offer—if he kept the Vulcans lie should nave, as a solace to his feeliugs, the Britannia shares. Then, a few weeks afterwards, about the end of March, Mr Lwll saw Mr Black, the secretary to the company. They both agree as to the firstportion °f their conversation, that Mr Bell told Mr Black he had no intention of paving any calls on the Vulcan shares, and that Mr Black said that the claim was better than he (Mr Bell) thought; but from that potnt their evidence differs materially. Mr Bell says: ” I did not alter mv decision. I did not say I would hold the shares, or anything that could be construed into that.” Mr Black says; “ I sbowed him the prospectus and the map of gold dredging claims and the position of tbe Vulcan, and told him tne claim was thought a great deal more of by old miners than what he had imagined it to be. We had a long talk about dredging stock, and he left quite satisfied to keep the Vulcan shares. I told him the Vulcan was a real good claim, and I mentioned several persons names who had mined in that locality, and he was satisfied, and said he won id hold tbs shares. He said he was not able to pay the calls, and I told him we would not be very hard, and anvway he (•ould gut out at a premium before June.” Then there is the evidence of Mr Simmonds, the broker, of Timaru. through whom Air Bell had applied for fifty of the Vulcan shares. He says Mx Bell called upon him before be (Mr Bell) went to Dunedin, and be told him lie would like to get out of Lis Vulcan shares if possible: that subsequently when Mr Bell returned from Duned’u they again spoke, about Vulcan shares, that he could not remember tbe actual conversation, but Mr Bell seemed satisfied then to keep the shares. He said if Mr Bell had not kept the fifty shares he would have loot his commission, but he was quite, satisfied from the conversation that Mr Bell would keep the shares and not throw them "P- On April 14 Mr Bell wrote to Mr Black, ret erred to their conversation of a fortnight before, and a conversation with Air Ramsay. He wrote that he certainly understood that his name had been taken off the register, and requested him to take it off. Mr Black replied on .April 25 : " You mention explaining matters to me personally. What, you did do was to rav that vou could not afford to hold them, but afterwards changed your mind, and before you left the office decided to hold, them until June for a premium.” This evidence shows that Mr Bell, by accepting an offer of Britannia shares, was bound in honor, so far as Air Ramsay was concerned, to retain the A ulcan shares, and Air -Simmond's evidence goes to fupjtorr the probability of Air Black s evidence that Afr Bell before leaving bjs office express'd his intention to keep the j A ulcan shares. Mr Bell's name was on the ! register: T find that his notice of with- | drawal did not reach the directors or secretary before notice of allotment was posted, | and if Air Bell knew of any grounds upon j which the allotment was voidable he told the secretary at the interview at the end | of March t hat lie would hold the shores; | and having so elected, and having been ie- : cognised by the directors as a shareholder, j he is hound by his election. Judgment for 1 plaintiff for £ls, costa of court 26c, wkj nesses oOs, cost of examination of witnesses £6. professional costs 265. Leave to appeal was granted.