JUDGMENT FOR PLAINTIFE.

Otago Witness, Issue 2416, 28 June 1900, Page 19

JUDGMENT FOR PLAINTIFE.

At the Magistrate's Court on Monday judgment was given in the case, Thomas M'Cracken v. Charles- Mitchell (Cromwell), claim £31 17s 6d, for a breach of contracWn failing to deliver 25 fully paid-up shares in the Halfway House Di edging Company sold by defendant xo plain-tiff-on the 21st October, the amount of clajm being the difference between the contract price ■and their market value on the 23rd April, when they were bought at defendant's risk: — The telegrams produced and dpfendant's evidence put in by plaintiff piove a sale by defendant on October 21, 1599, of 25 vendors' shares in the Halfway House Dredging Company at 22s per share. Plaintiff prepared a transfer, and forwarded it to defendant for execution, who' signed and returned i + to Dunedin through a bank, with instructions not to give it up without payment of a draft for the price of tihe shares attached to the transfer. The plaintiff, finding no scrip with the draft, made inquiries at the company's office, and found that no vendors' shares had been issued. Plaintiff then endorsed on the draft "Shares not allotted; scrip not issued, ' and he did not honour the draft. Plaintiff says he also wrote to the defendant, but the letter is missing, and is not in' evidence. The next is a letter from defendant, dated 18th November, 1899 : " Your memo, of .the 13th to hand. At the time of my agreeing to sell you 25 vendors' shares in the above xsompany at 22s I was under the impression that you would have paid for them as soon as an agreement was signed by both parties ; the shares to be transferred as soon as allotted. •If you agree to accept them on these terms ■you can send up an agieement to that effect, otherwise I withdraw them." Plaintiff replied: "Yours of tJhe 18th inst. to hand. As soon as you are ready to deliver these shares I' am prepared to pay for them. I bought and you sold, and the purchase is delayed throtigh you not holding the shares. No fault of mine. You cannot withdraw them. The shares are mine, and in allowing you time to deliver them I am showing you a lenience that few brokers would do. As a matter of fact, I could compel instant delivery, but I have no desire to press you ; but to talk of withdrawing is pure nonsense. You cannot do it." The head note to Hunt v. Gunn (13 Common Bench Reports, 226) reads : " A contract to deliver shares in a joint stock company does not require the actual delivery of scrip certificates, which are the mere indicia of property, but the party contracting ,to deliver the shares sufficiently performs' his engagement whe-i he places the other in the position of being the legal owner of them. Now, the plaintiff sold shares, but none having been allotted to him he was unable to carry out his contract, which was to give plaintiff a, legal title to 25 shares, but he required plaintiff to pay cash, and' wait for a proper title till Borne future time ; and the meaning of his letter of November IS is that if plaintiff would not agree to those^ terms he (defendant) would withdraw from his engagement. That was a disiinct breach of contract plaintiff could have at once sued upon. Plaintiff wrote in reply the •letter I have already quoted, and again on the 20th January requesting defendant to push on the allotment. On March 8 he telegraphed: " Half ways allotted now; please deliver the 25 shares"; and agam on March' l4: "I have finally to request delivery Halfways ; reply immediately," Defendant made no reply to any of these communications, and evidently intenj3ed his letter of the 18th November to be hia jultimatum, and that unless plaintiff consented to the terms he proposed he (the defendant) .•withdrew the shares; in other words, would not carry out his contract. The whole difficulty arose through defendant, who probably acted in the first instance from ignorance, selling shares that had not yet been allotted to him, and omitting to provide, a& hi should

have done, for future delivery, and siibsequently, when he knew his position, attempting to insist upon cash payment without dehveiy of the shares. The offer of plaintiff to hold over both payment and delivery was perfectly fair. The measure of damages will be the difference between the price at which the shares 'were purchased on October 10 and the price after November 18, when defendant wrote that unless plaintiff agreed to the terms he then offered lie withdrew the shares. The evidence shows that there were no vendors' shares — that is, fully-paid shares — to be bought before March 8, because none had been allotted before .then. All that could be bought was an interest like defendant offered plaintiff, ■ hut which he had a right to refuse. To place himself in the position the defendant wrongly deprived him of plaintiff had to wait till shares were allotted in March 8, as none were procurable before, but I think the plaintiff should have bought as near as he could to that day, and had no right to lie by with, as he says, a steadily rising market until April 23. Now there is no evidence of the price about March 8, and the nearest I can get is February 7, when 25 shares were sold for the defendant at 40s each. These must have been shares in the same sense as offered to the plaintiff. Plaintiff has sworn that there has been a steady rising market for Halfway House shares. ' This is sufficient to satisfy me that the market value of the shares about March 8 would not be less than 40s each, and the difference' between that and the. price at which nlaintifi purchased is 18s. Judgment for plaintiff for £22 10s, with costs (£6 16s). — Mr J. White appeared for the plaintiff, and Mr W. C. MacGregor for the 'defendant.