COMPANY SHARES.

Waikato Times, Volume 114, Issue 19012, 1 August 1933, Page 4

COMPANY SHARES.

ACTION BY LIQUIDATOR.

ATTEMPT TO ENFORCE PAYMENT*

DECISION RESERVED

An action to compel a shareholder to pay a share in cash was brought in. the Hamilton Magistrate’s Court this morning before Mr S. L- Paterson, S.M., by Valintine’s Ltd., (in liquidation) against Thomas Gordon Reynolds, accountant, of Hamilton. . Mr’ H. G. M. Norris, for plaintiff, explained that although only £i was involved in the claim the magistrate’® decision would affect the payment of £99 by another shareholder. Until 1923, E. N. Valintine carried on a business in Hamilton as a garage' proprietor and motor dealer.- In April, 1928, it was agreed to sell the business to --a private company consisting of Valintine, his wife and. defendant. Mr Norris said no money was paid Intoithe company by Mrs Valintine or Reynolds for .the shares whioh were allotted to them. The company went into voluntary liquidation in July, 1932, and F. W. Packard, of Auckland, was appointed liquidator. Defendant was placed by the liquidator on the list of contributories, and was liable for £1 for one £1 share. Defendant had not paid cash and the liquidator therefore sued for it. The decision would affect the payment of £99 by Mrs Valintine, who was also placed on the list of contributories. Mr Norris submitted that the payment for the shares must be in money or money’s worth. ' Mr W. J. King, for the defendant, said it appeared that plaintiff contended that because nothing had been done by defendant to have his name removed from the list of contributories therefore there was conclusive liability on the part of the- shareholder to pay for the share. Mr. King contended that the list of . contributories was prima facie evidence and not conclusive evidence of liability. His Worship agreed. Agreement Entered Into* Mr King stated -that at Valintine’s request Reynolds prepared a balancesheet : for the company and assessed' the value of assets over liabilities at £4OOO. For the sake of convenience three -shareholders were deemed necessary for the company. An agreement w r as entered into by which Valintine took 3900 fully-paid shares and £IOO in cash, Mrs Valintine took 99 £1 shares and Reynolds took one £1 share. However, Valintine did not-receive his £IOO cash from the company; Mrs Valintine did not contribute £99, nor Reynolds £i.

It Was agreed, added counsel, that £IOO cash payable to Valintine was to be retained in the company as a cash payment on the shares allotted to Mrs Wallntine and Reynolds. In other words, Instead of Mrs Valintine and Reynolds paying in £IOO It was agreed that the money remain in the company. .. • J •

In evidence,, defendant confirmed his counsel’s outline of the position, He had always regarded that his share and Mrs Valintine’s shares were fully paid. 1 ■ . ■ ' Cross-examinfed defendant could not state whether a resolution confirming, the arrangement was passed by the company, 'lie did not know whether there was a share register. Further details of the arrangement .were given by Edward Newton Valintine. lie had understood that by not drawing £IOO the capital of the company would be left intact and the shares of his wife and Reynolds would be fully-paid. ' .

After legal argument the magistrate reserved his decision.