TELEGRAMS.

Hawera & Normanby Star, Volume LI, Issue 9138, 10 July 1906, Page 5

TELEGRAMS.

A COMPANY CASE.

DISTRIBUTION OF PROFITS.

[press association.']

CHRISTCHURCH, July 9. In, the case Cowlishaw v. the Press Co., Christchurch,

Mr Stringer (continuing) gave the history of the establishment of the Press Co., amd said that when the preference shareholders had received a dividend of 8 per cent., then the deferred shareholders were fco receive a dividend up to 8 per cent., if the profits allowed it. If there were any surplus profits, this was to be equally divided between the two classes of shareholders. From 1892 to 1898 the dividend of 8 per cent, had been paid to preference shareholders, but none during that period to ordinary shareholders, and the money available for them had been left in the business. It was from this latter money that pJamtitis wanted the Counrt to declare they were entitled to receive a dividend of 8 per cent. Mr Stringer quoted authorities to show that plaintiff's action in agreeing year by year to the balance-sheets of the company, did not amount to acquiescence in the diversion of profits to permanent assets.

Mr Hosking, for the defendant company, contended that on a proper construction of the articles of association of the company, ordinary shsureholders had no right of action against the company for dividends that had not been declared by the directors; that the articles of association dealing with dividends were ambiguous, and that the directors, with the assent of the sharehold'etrs', bona fide placed one consistent construction upon them; that profits not declared as dividends had now been converted into' capital of the company, and could not now be distributed as dividends. The Court adjourned until to-morrow.