RESUMPTION OF SHARES

Manawatu Times, Volume XLIX, Issue 2308, 28 November 1925, Page 11

RESUMPTION OF SHARES

Important Point Decided

FARMER’S ACTION PAILS

[Per Press Association.s HAMILTON. Last Night,

An important judgment affecting shareholders of co-operative companies was delivered by Mr. Justice Herdman at Hamilton to-day.

At the September sitting of the Supreme Court,, James B. Whisker, I’armer, of Waihou, brought an action against the New Zealand Cooperative Dairy Co., In which no claimed payment of *£7B 7/-, representing sums which it was alleged had been wrongfully detained by defendant Company for calls. Plaintiff also asked that his name be removed from the share register of the company as the holder of 14 butter shares allotted him in August 1923. He further sought to have certain of the articles of association declared ultra vires, while he sought, in addition, to have certain of his shares in the Company resumed, or surrendered.

His Honour said it was certainly rover intended that a company shareholder, merely because' he happened to be a company shareholder, should be at liberty to issue an originating summons to have determined ror his and the company’s future guidance the validity of each of the company’s articles. If His Honour proceeded now to exercise hie discretion in the direction of making a declaratory order, ho would bo leading the shareholders in co-opomtlve companies to suppose that when no claim against them was made, or' when they had no claim against the company,, or when no dispute with the company had arisen, they were free* to come to that Court to ascertain the limits of their rights and obligationa under their company’s articles. In His Honour’s opinion, It was undesirable that he should so widely open the door, so ho thought that this was a case in which he should refuse to make a declaratory order. In dealing with plaintlrrs claim for the surrender of his shares, His Honour said the first observation he had to make was that he was not satisfied that plaintiff had made application to the company to accept the surrender of his shares, but assuming that such un application was made by him the company was not, in his opinion, bound to grant it. His Honour added: ”1 can find nothing which compels the company to grant an application and I can easily understand that unless the directors of such a company as this are authorised to exercise discretion when applications to surrender shares are made, serious financial difficulties may ensue. Whisker’s liberty to trade has not been restricted in any way. He remains the owner of shares which the company refuses to buy and he Is free to trade where he pleases and with whom he pleases. The only thing he cannot do is to compel the defendant company against its will and against the Interests of the company, to purchase his shares.” His Honour, in concluding. said judgment would be for the defendant bn~the matters left aa far ns His Honour could determine. The question of costs could be mentioned again.

SHAREMTLKING CONTRACTS.

ONLY VALID FOR TWELVE MONTHS. HAWERA, Last Night. An important decision affecting sharemilkers was delivered by the Magistrate, Mr. Barton. Portion of plaintiff’s claim in a civil action included a sum for bonus, which item was not allowed by the Magistrate. In nearly every case, a sharemilkcr makes his contract before the farming year commences. Therefore, in practically every case of a contract not being completed within twelve months of the time It was made, it comes within the Statute grounds ana is unforceablo, unless such a contract is in writing. This Is the effect of the Magistrate’s decision.