SALE OF SHARES

Southland Times, Issue 25308, 11 June 1935, Page 4

SALE OF SHARES

1 CLAIM FOR BROKERAGE " CASE SETTLED J An echo of the recent change in ■ management of the Gore Rialto was ' heard in the Magistrate’s Court at Gore • before Mr W. H. Freeman, S.M., yes- > terday when a share salesman proceeded against a broker to recover ' commission payable as a result of disposing of the shares in the new company! The parties were Robert James Barnett, of Dunedin, salesman (Mr T. O’Shea), plaintiff, and John C. Ray. of Gore, broker (Mr R. B. Bannerman), defendant. The statement of claim set out that on February 12 plaintiff was employed by defendant as a salesman for the purposes of selling shares in the capital of a company to be known as the Rialto, Ltd., the remuneration being fixed at £3OO. The plaintiff duly carried out the terms of employment and on April 17 defendant paid to the plaintiff £9O. The plaintiff was prepared to give credit for the sum of £5O for commission due to the defendant in respect of selling shares in the F.A.M.E. Insurance and Guaranteed Incomes Ltd., and the sum of £l6O was claimed. Mr O’Shea, said that the history of the • case from the plaintiffs point of view was that he was advised by telephone by the defendant in February of the intention to float Green’s Rialto Ltd. into a public company with a capital of £12,000. The defendant asked the plaintiff to.come to Gore to assist him as broker, which the plaintiff did on numerous occasions. In the early discussions, at which there were present the plaintiff, the defendant, the auctioneer, John Richards and Archibald T. Pettigrew, garage manager, it was stated that the distribution of the company was 5000 preference shares and 7000 ordinary shares at £l' each. Brokerage was fixed at 5 per cent, on the whole capital of the company, this to be paid to Ray, a total of £6OO. Ray arranged with Barnett to split the brokerage equally. This was purely a verbal agreement. During the period up to the registration of the company, the plaintiff assisted with the sale of the shares, but following the registration of the company on March 1. the plaintiff noticed that a sum of £5OO was being allowed for brokerage. He immediately drew the defendant’s attention to this and on returning to Gore was shown an agreement from the solicitors for the company in which instead of £6OO for brokerage, the brokerage was to be 5 per cent, of the actual shares sold. He then went to the defendant’s office to have an agreement drawn up as between Ray, Richards and himself so as to secure his share. Richards assured the plaintiff that even though £5OO I was agreed on for brokerage in the prospectus, there would be no objection to £6OO, so the plaintiff proceeded with the sale of the shares. On April 7 plaintiff rang Ray who told him that a meeting had been held three days previously attended by Richards and Pettigrew who had decided to pay £143 for brokerage in final settlement. The

plaintiff said this was not good enough for him and visited Gore on April 9, going to defendant’s home. He drew up an agreement as to what had originally taken place, namely, that Ray was to receive 50 per cent, brokerage on £12.000, the plaintiff to share this on a 50-50 basis. Ray agreed that this was correct and signed the agreement. Subsequently certain discussions occurred between the plaintiff and Ray and also between Ray, Richards and plaintiff. There would be no question that it was understood that the full £6OO was to be paid. On April 17 defendant paid plaintiff £9O. advising that he had received only £lBO. Plaintiff accepted the £9O as part payment and held out for the balance, plaintiff refusing to be a party to accepting £lBO. After evidence by the plaintiff and other witnesses had been heard, Mr Bannerman asked for a non-suit on the grounds that the plaintiff’s agreement with Ray was on a 50-50 basis in which case Barnett’s share was 50 per cent, of the proceeds. He could not therefore claim more than Ray as broker actually received.

The Magistrate refused a non-suit on the grounds that Ray had signed an agreement setting out the position and evidence would need to be heard on that question. Mr Bannerman asked for a short adjournment and on resumption counsel announced that the case had been settled.