SUPREME COURT ACTION

Evening Star, Issue 18253, 18 April 1923, Page 5

SUPREME COURT ACTION

TRANSACTION IN SHARES.

[Pin United Press Association.]

AUCKLAND, April \S, Judgment for the defendants was pronounced by Mr Justice Stringer in the Auckland Supreme Couji, action m which George Ilo.v William M'Donahl sought a decree against the Wairakoi, Limited, for cancelling an allotment to him of 3,000 shares, and for an order that the company return the money paid by him in respect of such shares. His Honor held that the statutory conditions precedent to the .valid allotment of the shares under section 95 of the Companies Act had not been observed. The directors bad improperly proceeded with the allotment. Plaintiff was entitled to repudiate his contract to take - the shares on the ground that the condition which he laid down had not been fulfilled—namely, that 40,000 shares must be applied for. The court held that such condition meant applications upon which allotments could properly be made, and the elimination of 3,000 shares applied for by C. L. Johnstone, whose cheque was dishonored at the date of the allotment, made the condition unfulfilled ; but the plaintiff knowing the facts delayed too long in taking action. This long delay, coupled with his subsequent payment or moneys due on the shares, and his having acted as a director of the company, operated as an election on 1 his part to retain the shares. Judgment was therefore given ior the defendant company.