STOCKBROKER AND CLIENT.

New Zealand Herald, Volume XLVI, Issue 14133, 7 August 1909, Page 6

STOCKBROKER AND CLIENT.

SHARE TRANSACTIONS.

VAGARIES OF THE MARKET..

WHEN TO BUY AND "WHEN TO SELL. At the Magistrate's Court yesterday, before Mr. 0. 0' Kettle, S.M., Alex. .T. Canning, warehouseman, sued his brother-in-law, William Gruar, stockbroker, to . recover the sum of £167 18s 4d, alleged to bo duo as the result of dealings in mining shares.

Dr. Bamfor'i (instructed by Mr. Pullon) appeared for the plaintiff, and Mr. M. G. McGregor defended. Counsel for plaintiff stated that under instructions from his client the defendant purchased 500 contributing shares in the Champion Mines, Limited, in July last year, the shares being registered in his own nam© as broker. He received instructions to soil in October, but did not do so, and subsequently quitted the shares without acquainting the plaintiff of the fact- Tho latter was shortly afterwards debited with an lid call. Defendant received instructions on October 9 to sell, and on October 10. ho actually disposed of 500 shares at 5s 7d. It was presumed that these were the plaintiff's shares, and counsel maintained that if, as a trustee, the defendant had operated in trust funds, he must explain his operations.

Mr. Kettle agreed that this was in accordance with elementary law.

The plaintiff stated in evidence that ho instructed the defendant in July, 1908, to procure for him 500 Champion shares. Ho paid 4s 8d for 400, and 4s 6d for the remainder. The total cost was £115 16s Bd, and ho paid partly by cheque for £62 ss, and partly in cash drawn from tho bank. Witness here admitted that he was confused in his figures, as the result of having also transacted in other shares. Ho admitted the correctness of the accounts put in by Mr. Gruar. Continuing, ho stated that in October defendant urged him to buy 600 May Queens at 2s 9d, and witness gave him £60 from tho.bank for tho purpose. Witness instructed defendant to sell his Champions at 5s 6d, although the latter had advised him to sell at 5s 4a. Witness was laid up for a few weeks at the residence of tho defendant, with whom ho lived, and was afterwards informed by his brother-in-law that tho shares had not risen above 5s 4d. Ho told defendant that tho newspapers had recorded sales at 5s 6d and 5s 7d, and defendant replied that the papers were not reliable. _ hen the shares had fallen to 5s 2d witness asked for advice, and was told by defendant to "stay where he was." The shares subsequently fell to 7d.

Under cross-examination, witness admitted that ho had mado a wrong statement in saying that ho had paid for the balance of the shares in cash. Ho did not remember making any cash payments to defendant with the exception of £62 5s (July 7, 1903), £60 (November 2), and £1 lis 6d (June 1). The £60 which he drew from the bank on November 2 was for the purchase of May Queens. Mr- McGregor: Did you not from time to time owe Mr. Gruar as much as £80 or £90?

Witness: Mr. Gruar placed mo in his debt on his own account.

Mr. McGregor: Was one of tho reasons for placing tho shares in Mr. Gruar's name because you had only partly paid for them? No, certainly not. Ho told me I could have the shares registered in my name, but said it would be better to have the registration in his.

Mr. Kettle reminded plaintiff that while tho Champions had cost him £115, ho said he only paid £62 ss. Witness replied that as the result of sales in Talismans and Kauris there was a balance due to him of £9 lis 10d.'

Mr. McGregor: The Kauris wore not j sold until- August. Witness, continuing, said that defendant had never advised him to sell at 5s fed, and ho (witness) had never refused to sell at that price. Neither did he instruct defendant in December to buy another' 500 Champion shares. Witness bought more Champions in January, through his brotlior-in-law, at 4s 2d. These fell to 7d. Defendant advised him to buy 600 May Queens in October, and when they fell in price told him (witness) that he had placed him in a hole, but would see him right. Witness told' defendant, on the latter's advice, to sell his 600 May Queens at 2s 6d, and put tho money into Junctions, when the latter were 265. When Junctions rose to 30s defendant advised him to sell, but as witness' suspicions were aroused.by hearing that defendant was advising others to buy Junctions he refused. Shortly after defendant sold his Junctions, and brought tho sale note to him, with the explanation that ho had sold because of a bad report from the mine. Two days later the shares were up to ; 345, and witness hearing that defendant had been buying Junctions all the time went to tho latter's office, and asked to see either tho cable or the sale noto for 32a 9d- Defendant bluffed him by shaking a bundle of papers at him, and subsequently gave witness a credit for £20, with the remark that he had acted unwisely. Defendant- told him he had better look after his own shares. Witness had been the registered owner of 736 shares in tho Champion Mines, Limited, since May 13, and ho had received and accepted the transfer from defendant, although he knew that the 500 shares had been sold in October. Tho shares were now 6d. On Thursday week last defendant offered to pay him the full amount. G. A. Buttle, chairman of the Auckland Stock Exchange, said tho registration of shares in brokers' own names was a common practice among all brokers. Mr. Kettle: Some method should be adopted for identifying shares. Witness said he was not aware of any custom which would justify a broker trafficking in a client's shares. Mr. Kettle: I suppose that sometimes more shares are sold than there are actually in a mining company? \ Mr. Buttle: I won't express an opinion as to that. (Laughter.) Witness, continuing, said that, according to his record book, defendant bought 225 Champions at 5s 6d on October 9. On the following day, at the first call, defendant bought 138 Champions at 5s 6d. On October 13 he had no record. Many transactions took place on tho floor of the Exchange, of which no record was kept. J. F- Buddie, secretary of tho Champion Mines, stated that on October .6 defendant had 460 shares, on October 9 732 shares, on October 20 223 shares, on October 21 323 shares, and on February 8 816 shares. Dr. Bamford maintained that defendant had not himself held 500 shares continuously between July, 1908, and Mav, 1909. Mr. McGregor stated that tho whole affair was a mare's nest, as he would bo able to prove conclusively that after transferrin)? 500 shares in October, defendant held 1223 shares in his own name.

Tho case -will be continued this morning.