A DEAL IN SHARES.

New Zealand Herald, Volume LXI, Issue 18763, 17 July 1924, Page 6

A DEAL IN SHARES.

ARGUMENT IN APPEAL. CLEAVE AGAINST WAIRAKEI. [BY TELEGRAPH. —PEZSS ASSOCIATION.'] WELLINGTON. Wednesday. The Court of Appeal was to-day engaged considering an appeal from a decision of Mr. Justice Herdman, delivered at Auckland in April, of Arthur Cleave, of Auckland, printer, against Wairakei, Ltd - ... After a lengthy trial, lasting five days. the company succeeded in effect in obtaining against Cleave as upon claims for £6265, while Cleave in a counter-claim in effect si i ceeded against the company as upon a claim for £2057. The claim of the company arose out of certain transactions in shares of the respondent company, in which Cleave was concerned. Mr. Myers, K.C., opening for the appellant, dealt with transactions in wl i h Cleave sold 5000 shares which had been allotted to him by the directors as part of hi 3 commission to one L. C. Johnson. Johnson's cheque for the moneys due on allotment (15s per share) being dishonoured, Cleave had paid the allotment money himself to the company, whose directors had decided to let him step into the shoes of Johnson. Cleave then sold these shares. to various purchasers who obtained transfers which were approved by the company which received altogether from Cleave and these various purchasers 20s in the £ for the shares, but afterwards claimed to recover and did recover from Cleave the sum of £1250, the 5s per share allotment monays on 5000 shares, on the ground that »iie shares could have been and should have been issued at par. In effect, Mi - . Myers contended, the company had recovered by the action £6250 for 5000 £1 shares, but was entitled only to £5000. Mr. Myers therefore contended that that part of the judgment which awarded the company the £1250 was wrong. For respondent, Mr. Richmond contended that Cleave was a trustee of the assets of the company. Johnson's shares, he said, were illegally allotted, and his application was a bogus one. His cheque was dishonoured three months after the application, but the uompany was not notified till much later. Cleave could have notified the company that the cheque had been dishonoured and got it to cancel the allotment. Johnson's name was put on the register and there was no doubt he became a member. Johnson's name was not properly taken off the register, and that being so, he was still a member, so the company had allotted his shares in error to other people. The directors had no right to sell for 15s shares to a fellow director which he had already sold for £1 before they were allotted to him. The case stands part heard.