THE GOLDEN CAWSEWAY COMPANY.

Otago Witness, Issue 1891, 1 May 1890, Page 12

THE GOLDEN CAWSEWAY COMPANY.

At the Resident Magistrate** Court on tha 23rd before Mr Oarew, George S. Brodriok sued Walter Hislop for the suta of £50. Plaintiff alleged that on the 15th July defendant sold him, at tho price of £ 5 0,600 shares in a company called the Golden Causeway Quartz Mining Company, of Nenthorn ; that plaintiff paid the £.50 j that there is no euch company as that mentioned; that plaintiff was Induced to purchase the shares through fraudulent tnlsrepreientatlon ; and that the floating of srsih compauy has bean abandoned. Mr Jameß appeared for pUintiff, attd Mr W. D. Stewart for defendant. Mr James asked that an amendment in the particulars of demand might be allowed, by substituMnc "August" for " July/ " s Mr Stewart had po olvjecb'on, Mr James, in opeuin- the case, said that it was agreed between the parties that pla : ntiff should buy and defetreant sell 500 promoter*' .shares in the 52J25V ,kT v V An ordinary share transfer was signed by both parties and sent to the legal manager, whose name appeared on the prospectus, Mr Leilie ttormau; and plaintiff forwarded the 2» ed per share required. No scrip was, however, is.ued; ahd after plaintiff had repeatedly applied, bub in vain, he began to suspect that everything was nob in order, and h*d the register searched, with the result that h. found the company had nob been registered. Plaintiff had not got his iorip. the company had not bsen registered, and plaintiff therefore said that the consideration had failed, that he had not got »hat he bought, and he asked to have his money refunded. Mr Stewart admitted the prospectus, bub not bhftfc defendant was responsible for ib. Leslie A. Norman said that steps wore taken to nave the Golden Causeway Company registered, hut they were not carried to completion. He was the proposed legal manager of the proposed compauy. He had seen the prospectus produced. Mr Hulop was not present at tha meut,iu|( of promoters at which the prospectus was drawu up. Some of the shares were to be allotted to the promoters. Mr u'slop whi to have been broker. Witness' nam« was in toe application for re^istiation for 2't.< 00 shares, wluoa he held as trustee for the compmy. He acted for soma time as legal mauagpr T.ie whole capital of the company had not b.-en tubacribed Abjut 2000 or 3000 shares w^ra ap.lied lor, but not allotted bo far as witness know, fn nuly on« case, so far as he knew, had the application money been returned. Tnat, w«» v c«aa in which i.he applicant asued witness to trans er h s money to the Islind Block Extended. Wituess could not aa .• who appointed Mr Harlow secretary !o the partnership, or whether he was appointed. Witness had had several transactions in buying nnd selling promoters' sharej iv the caupwv. Slmres were otten sold before a oompany was registered. He had handed over all papers in connection with the compiny to Mr Harlow To Mr Stow,irt : It wsb about t^o months after the a2ud of July brfore wit,ne3s knew that the certihcate of reglatrntiou had not isbued. A purchase of promoters' shares tokos the risk of the company floating. Tlidb is done every day in Duuedin. Assuming a company to be icjistered, as witness ab ro erf™ bslieved ie W! *'* t>l9 t«a&fer was in the n^f' M -'* iUbe J r - *'oputy-reKiatrar of the Supreme 1 f^ y^ r °T U " cd ,c aa WicAHon for regisiration dated 2 -tu Juiy 1659. Tho nectary Gazstte and newspaper notices wore not lodged. V\itu ?B3 h"d heard nothing ot tho co.m.any from tho 29th July to last Monday week, when Mr Norman came in with the nr.ti.ms au<l asked t.o have registration completed. Witness remarked that the notices were nearly niue m ufchs old. m.d th.it he did nob feel iusiilied in issuing a curtilioate without consult!;]" Mr Gordon, the registrar. Yesterday morning Mr Gordon intimated that having read tho act and thought the matter over, he could not take the notices., and must decline to issue a certificate. Another cbjaation was that Mr .Norman, when applying for fucorponitlon, admitted that '■ ■ •■ i. l^u^er conn ectod wit!i the company.

George A. Harlow. of Nenthorn, produced a trarrtferof shares from defendant to pfalutiff. Witness was not connected with the company 'fmther tha'ii that he had obliged the claiinu. ldera Uv shotting a shaft Slink for them. He bad issued t\le circular produced, signing himself on. ori-o as " secretary." hut, it did not appear what he was secretary of ; aud ap to another Circular produced, the words "le^i? ! ma'nnger " after his signature meant 'nothing. They were 'printed and not erased. Witness also produced minutes of meetings of tho company held at Nenthorn in January fast. The:e w» no record of a meeting after the 25th January. Witness sent out notices for a meeting on the" 29th March, but only two or three attended ; there was no quorum, Witness was Instructed by Mr Kinnoy, Mr M'Bride, Mr Prendergast, and other shareholders to call these meetings. He was under the impression that the company was registered, aud that he was legal manager after the 25th January. He was then voted £8 for the purpose of registering the new COittpa'&y, of 14,000 shares at 10s each. Mr Brodrlck #&s down on the list for a call on a quartet shaV6\ Mr Stewart explained that liiis was a quarter of one of the holder's interest*, each owner being allotted 1000 Bhftret> Ifc tub new company. Witness said that since he had taken over fche company nothing had been done but to ainfc the nhaft. To Mr Stewart: It was finished abjut the I~A February, and Che call was made t6 pay the 'contractor. George S.Brodrtek> plaintiff, stated bbafe f.bo'utth'e middle of August he asked 'the defendant if he had any promoters' shares Ift. the Golden Causeway Company, \wA that it he had, he (plaintiff) would pop-* fltMypnruWe thftitti Defendant replied thnl he Eafl, Wvd offered plaintiff 500 shares, which \\<s pv'.rclia'ed. xMendftnt said he could get plainttff hoo promoters' sh«r>3s at Is discount-that w£b 2s per share, 3s being p*id up. Plaintiff tojrt trtm he would take them, nnd the same day cr the dny after the riefeudant brought the transfer 'produced, and he gave him a cheque fnr £f>o> riaintiff then filled up the transfer and slgnr^ his name to it. He also got it stamped atttt sent ft for registration, addressed to Mr Nortasn, NfenttiOrd, as, according to the pronpectUß» Mr ftorman was the legal manager. He saw the prospectus kt one of me broker's offtc©B» After he sent the transfer for registration he received a rtply stating that a fee of 2s 6d would bo required) and he oant the, 2s 6d, with a request to send Ijitn the sorip. He did not hpaV anything further alrout the matter for some months. In February he received a call notioe, hnd he was under the impression that he replied to the notioe stating that he was not the holder of a quarter Share. He never got any scrip for the shares. He first knew that tlie company was not registered on the 3rd A£rtl. He had an idea a month or two previous to that that the company was not registered. Ho saw Mr Hislop and he said that there had beoh some mistake, and that Mr Norman had not carrfea the matter through. To Mr Stewart : Tiiafe morutnfc Mr Hislop off/rocl to refer the matter to the fjl.- ck Exchange, but plmijtiff refused to do fco, a's 'it, had gone too tar. He knew the company wns not 'floated \Vhen he bought the shares. Tint it wftfe ntated tunu i here wns no doubt tUifc 11 would Go. He had no knowledge of any custoiVi fn whiolU.h'e seller ha<l to refmd where a company did not float. To his Worship : Plaintiff was always tinker tho irHpression that the conip-tny could be reßiufcered before it was floated, and that another registration would be necessary afterward*, This concluded the oaso for the plaintiff. Mr Stewart, for the ttetetfee-, said thfc't s'6 Tar as Mr Htalop win o<mc*jfrted he had .acted with the utmost eandiur toa-fthla Mr BroarirA. He had made no T»i*«DV6sentat.i6n to Mr Brodriok. and (r, was i'nV possible to s^wnafi came of action the I»MfV had. Mr. Brodriok & >Gw as much as My Ht4op about this projected company. The latto? ad what wai oonsftititly done in Dnnedtn— namely, sold promoter' shares in a projected company, which minht or might not float. Mr Brodriok took the risk of tho company floating. If it did not float, ho wr-u'd make a loss j if it did float, he would make a hatidBorne profit. It was one of those speculative Iranfeactions which were constantly being made\ The cv idence would not at all support the Sliarge of misrepresentation against Mr Hisiop. Mr Oarewi I think the question really Is this 1 : Was the transfer between the parties a tvansfer ot shares ill A. registered company ? tit James : I abandon the iWattd' '0t misrepresentation. Mr Stewarts It is Vsulte evident that Mr Brodriok cannot Buriceed upon the other branch of the case, be6ause before he can seek to recover his money back he must tender a transfer to üb» There his, however, been no tender of any transfer. Mr Oarew : There is a trafisFer, that it right enough ; only the company does not exist. Mr Stewart t The question of the company being registered or hofi Is not material. The plaintiff agreed to take 500 promoters' shares in a company to toe floated. That being bo, that represents onesixtieth part of the interest of the promoters in the propo.-ed company. He proceeded to say that the application for registration showed that Mr Hislop was entitled to 1000 shares \A the company • and the real test of the.case was this^ Was a person who bought promoters' Shares fen'titled to have the sale cancelled if the company did not float ? His Worship \ it that we're the onlj point i should have no hesitation iv Saying ttftt Sr Hrodrickhad ?1^ BB 4#4 # Ju? t0 ° k , fc he,f^lc oi floating. The point Ifeitly is this : Ooiiid the defendant give plaintiff what he sold— that ia, 500 shares in the Golden Causeway Oompiny ? Mr Stewart submitted that plaintiff got an iuterest in the assets of the company to that extent, ihe points he would ask his Worship to make u note of were these : Ist, that before plaintiff could reßctnd the contract he must tender or return to defandant the transfer he got in exrji'alige for his cheque ; 2nd, that plaintiff was OBbopped, owimj to delay, from aiklng for a rescission of the coutraot ; aud 3rd, that plaintiff KOt whit was azretd to.be given him, and there had not been an entire failure of consideration. The question of misrepresentation was, Of course, abandoned. Ab this efcage it waß agreed, on defendant's application, to adjourn tho further hearing of the case for a week.