TAXI COMPANY SHARES.

New Zealand Herald, Volume LXVIII, Issue 20924, 14 July 1931, Page 11

TAXI COMPANY SHARES.

AMOUNT OF CALLS CLAIMED. WELLINGTON FIRM SUCCEEDS. SUM OF £125 AWARDED. < [BY TEI.EGEAPH. —PRESS ASSOCIATION.] WELLINGTON, Monday. Arising out of an allotment of 500 shares in Black and White Cabs, Ltd., of Wellington, to Mrs. Charlotte Emma Corbett, of Auckland, an action brought by the company against the shareholder for £l2§, tli« amount °f two calls made on the shares, was heard in the Magistrate's Court to-day before Mr. T. B. McNeil, S.M Defendant, for whom Mr. W. R. P. Moody, of Auckland, appeared', counterclaimed for £3OO, alleging misrepresentation on the part of an agent. The plaintiff company claimed that the defendant was in debt to the company for the third and fourth calls of 2s 6d each upon 500 shares. Interest on the amount was also claimed. Defendant contended in her counterclaim that on August 20, 1927, she applied for and paid tho application money and the premium on 500 shares in the capital of the company and that she was induced 4o do this on the representations of the plaintiff's agents. These representations, she alleged, she knew now to have been false and fraudulent. She had paid £312 10s in respect of the shares and counter-claimed for the return of £3OO of that sum. Increase in tho Capital. Opening the case for the plaintiff, Mr. Shorland said the sale of shares had been made at a time when the capital of the company was being increased. After obtaining the shares the defendant had paid the first and second calls. Thjs was not the case of a sale o'f shares, said counsel, but it was a case of a person applying for and being allotted shares.

Counsel submitted that it was not necessary to go into the truth or otherwise of the allegations made in the counterclaim, as the defendant's name was still on the register of the company, where it had been ever -since 1927. That fact alone precluded her from pursuing successfully her claim for damages. Mr. Moody said the defendant's evidence showed that a salesman had approached her and asked her to take some shares. She consulted her bankbook and after being told that the shares would not be called up to more than 10s, she saw what she could invest without exceeding her outlay of £250. Mr. Moody submitted that if misrepresentation was made by an agent, although not in the prospectus, repudiation could still be made. This was possible even if misrepresentation were innocently made. Effect ol the Authorities. The magistrate said he had not the slightest doubt that the effect of the authorities quoted by Mr. Shorland was that the plaintiff's 'claim must succeed. Plaintiff had proved the contract, making of the calls and the issue of the notice to the defendant. If the defendant had any ground at all for repudiation her proper step was to apply in the Supreme Court under the Companies Act to_ have her name removed from the share register. "I must give judgment for the plaintiff for £125, together with interest at 6 per cent, from the respective dates of third and fourth calls to the date of the judgment," said the magistrate. "The counter-claim must also fail, be cause it is clear that when a shareholder retains his shares he cannot bring an action against a company for misrepresentation. 1

After entering judgment for the plaintiff the magistrate remarked that he could not say there had be<fe any bad faith on the part of the company. "It may be that the salesmen were a bit exuberant," he said.