AN INTERESTING CASE.

New Zealand Tablet, Volume XI, Issue 34, 21 December 1883, Page 5

AN INTERESTING CASE.

(JPatea Mail, November 30 and December 3.) Colonial Land Settlement and Endowment Association v. Ntjtsfobd— Claim £6. Mr. Hamerton appeared for plaintiff, and said that this was a case under the Evidence Act. The defendant was a shareholder in the Association. The Association were trying to force a call on the shareholders which those in this district resisted, and this case was the outcome. Thomas Nutsford, the defendant, said : I am a watchmaker, residing at Patea. I was induced to take up shares in the Colonial Land Settlement and Endowment Association of New Zealand, Limited. I first heard of the meeting in Wanganui. There was a meeting called by Father Kirk to discuss the question of starting a fund for the education of Catholics, as the Government would not assist them. Owing to statements made by Mr. Lundon, Collector of Customs, with regard to Mr. Cook, the proposed manager, the meeting broke up without doing anything. Some time after this I came to Patea, and Father Grogan mentioned about the Association after service at the church. He recommended us to support it as a body. Father Grogan also stated that Mr. Cook, who was then at Patea, would be able to give us any information and receive applications. A great many took shares from Mr. Cook; I took ten. Father Grogan told me that Mr. Cook had informed him that 15,000 shares had been taken up. Document produced marked A was handed to me by Mr. Cook, and by endorsement on that document he authorised me to receive applications for shares. I stated at the time that it was a poor, paltry prospectus, and asked him if he had not another. He then handed me document marked B. I was induced to take the shares on the representation cf Father Grogan and Mr. Cook. I asked him with regard to the endorsement on document A what commission would be allowed on the sale of shares. He answered there was oo commission allowed, for economy's sake. I have never received any separate notice for any one of the four calls lam sued for. That produced is a copy of the Articles of Association and the Memorandum of Association. I have not received notice as specified in rule 90, on page 23. I did not receive a copy of the Articles until the end of July, 1883. That produced is the balance-sheet sent to me from Wellington. On receipt of balancesheet a meeting of shareholders was held in Patea, at which it was decided to send a delegate to Wellington to ask questions as to the report and balance-sheet. That produced is a copy of the notice I received under which Mr. ODea was sent to Wellington. I am not aware of any authority, nor have I heard of any, whereby the Company s money could be appropriatsd for bonuses. With regard to the item of £168 11s. Id, commissions, I am not aware of any authority for that. Mr. Cook told me there was none There is an item £460 2s. 9d., salaries, for which I am not aware that there is any authority in our regulations. With regard to the item '• To sundry creditors, £447 18s. 4d.," I cannot understand it. In regard to the direction of the Company prior to the meeting of July, the Hon. William Clifford, Mr. Charles, and Jas. Cook appear as the directors. By the memorandum the Hon. William Clifford had only 10 shaTes. By the regulations no one can be a director who has less than 50 shares. I am aware that the annual meeting was not over till after the 27th July. .All my calls as per summons were made before the conclusion of the meeting. I received the document produced as the result of tbe meeting. The Court here adjourned for an hour. f , °,n, n resumin & tQe examination of Mr. Nutsford was continued « as follows :—: — I first decided to pay no calls to the Company in consequence of a conversation I had with Mr. Mcllhone, then living in Wanganui wherein I ascertained that a petition had been sent in by a number of gentlemen to the Directors, requesting them not to allow Mr Cook to travel for the Company, as, from his conduct, he was not a tit person to travel for the Company, and, in consequence of this petition Mr. Cook returned Mr. Mcllhone's application money stating that the Directors refused to allot him any shares. This con yersation resulted from the petition they forwarded from Wangamu to Wellington. If Mr. Cook had represented the "Company triflv I would not have taken the ebares. *' James ODea deposed as follows : lam a carpenter and builder residing m Patea. I am a shareholder in the Company, to the amount of eight shares. I was acting agent for the Company here That produced is my authority. I first heard of the Company through cHL* Sffyil "^S?. o**0 ** an i Brovm add «*sed to Father urogan. Thm Waß on a Saturday. The next day at morning service

the Rev. Father Grogan stated that Messrs. Cook and Brown were Swp?f SBln # o S ce T ntryf . or^ harest ° the Company,' and stating the 2X« .F?. F ?J her , Gr °g an toldany who wished to take up shares to remain m the church after service. After service no one remained to take up shares except myself. Mr. Cook asked me to go with him 2L ~ aft f moon |? Ol ' d< ? to can ™ss for shares. I went, !nd we sold ? to , t T£? artle \ In^e evening Father Grogan stated he was !Xi£! ?„♦ hafc _ no .^res were taken up, and he held out further En»fif? IB'I 8 ' u e , i nduceni ents were that there would be an eventful benefit to shareholders, education of Catholic children, the advantage to the labouring classes in the acquisition of land, etc. The a prJ,v a T? a great many pe °P le took U P shares at tQ a* night's service. There was representations made to me by Mr. Cook as to awi" o^ o& ° f th ! Com P an y- H e said that there were 100,000 SfinnSi f 2 lOs - P^ share, but that it was only contemplated to ™}r2?£ Pers^e- . Mr.. Cook asked me that night if I would go he ™S VS ? T lth b , m . the foll ™*g day and show him where he would be likely to sell shares. I did so, and we were successful nearly everywhere we went. He went away to Hawera after three or four days, leaving me as agent, giving me a written authority, and also asserting in the Patea Mail my authority to act. After Mr. Cook left Patea he returned and had a conversotion with me. He told me he had dispensed with Mr. Brown's services, and sent him to c i™ Dg f w W M h b £ rd T& eDOUgh to pay his P assa S e - He said * c was aware that Mr. Mcllhont was as the head of the petition sent to fs*2??V£r^f.^tors calling him (Cook) back to Wellington. Cook said if Mcllhone did not keep quiet he would do the same with SnlV I K a9 £ c had Brown ia Wanganui. After this conversation Cook left for Hawera again. I next heard from Cook at AuckJand. I received letter produced. That was the first letter I got from him. Previous to this I had received the allotment paper produced. After comparing the dates of these documents lam certain I received the allotment paper first, and from Auckland. I received a number of others along with this one. J collected the money for this and the others, and sent a bank draft to Wellington through the Bank of New South Wales. ' When Mr. Cook appointed me agent he said the work was to be done economically, and he did not promise me any commission. When I wrote to him with the bank draft, I told mm I could not act as agent any longer, and recommended him to appoint a commission agent. The letter (produced) is the answer, in this letter he recommends I should pay local accounts without reference to the Directors. I next received letter (produced) requesting me to make a call. In this letter he recommends me to send the call direct to him withont registration. After I had refused to act for the Company I received a letter (produced) slating that was to have commission. That was the first intimation I had that I was to have commission. I received letter (produced) which stated tnat I was to have 6d commission per share for the shares sold by me, provided I collected the calls and proxies. Mr. Cook forwarded me a lot of proxy papers made out in his favour. On receipt of that letter I called a meeting of shareholders and pointed out to them the steps Mr. Cook had taken. After discussing the matter we decided that we would scratch out Mr. Cook's name and put in that of Bishop Redwood. We did so and sent the papers to Wellington. They were all duly signed by the shareholders. There were about 50 When tne proxies were lodged at the Company's office Mr. Cook said they could not be acted on, as the calls were not paid, and he rfejected them According to the rules of the Association he was justified in rejecting them. I was sent by the Patea shareholders to attend the meeting of shareholders in Wellington on the 25th July, which I did. This meeting was adjourned till the following day owing to the chairman not attending. There were six present at the meeting! The meeting was finished on the 26th. The report (produced) was considered at the meeting. One of my objects in attending the meeting was to ask questions on that report. After the minutes of the previous meeting had been read and confirmed, I asked the permission of the chairman to make a few remarks on the report and balance sheet To this Mr. Cook strongly objected, and called the attention of the chairmrn to my being out of order. The chairman, however, consented to my addressing the meeting. I asked the chairman what was the meaning of the first item under the heading Expenditure :— Bonus charges £25. Mr. Cook refused to answer at nrst, but on my insisting on an answer, the chairman told him he would have to reply. Mr. Cook said.it was given to a shareholder in shares so that he might act as a director of the Company I don't know the shareholder to whom the shares were given. I next asked as to the item Commissions, £168 Us Id, what it was, and who it went to. His reply was that it came to mo and my equals, the local agents m the various districts of New Zealand. In answer, I told the meeting that I was in a position to deny this, as I had applied to Mr. Cook for my commission and he had refused it. I asked about the item Salaries, £460 2s 9d. The Chairman's reply was, " I suppose it s for Cook. I then asked the chairman who fixed the salary, and he said " I suppose Cook himself." No other directors made any remark, nor did Mr. Cook contradict the statement. The next item I asked about was £100, directors' fees, which Mr. Cook said was nxed by the directors for themselves, but that none of them would accept of if. I did not ascertain from him where the money was at that time. Mr. Michael Bolun, whose name appears on the Articles of Association and also on the Memorandum of Association, informed me that he had no shares and that he had never taken up any in the Company, and that Mr. Cook had been to him and requested him to put his name m the book in order that he might get shares taken up as he travelled through the country. Previous to the meeting on the 26th, I had an opportunity of speaking to Mr. Richard Dignan, who is represented as being the holder of ten shares, and I asked him if he was a shareholder. He told that it was only a few days before I saw him that he had taken fifty shares. I gathered from bim that before, he took these filty shaTes he had none at all, also, that Mr. Cook had induced bim to take these shares in order that he might place him on lhe directory. It appears from the Articles of Memorandum that the Hon. W. Clifford, one of the first directors of the Company, has only ten shaTes, whereas by Rule 6, he should have at least 50. Messrs. Dignan and O'Brien informed me that they had advanced by bill to Mr, Cook the sum of £25 for expenses. They

gave me to understand that it was to be paid back by Company's money-as Cook collected it from the shareholders. dtetifeta nSf D : ? ?? m T \ Catho i ie Priest in the Patea and Hawera districts. Unfortunately I have 20 scares in this Company. I t?b^ r f5 Ir - (1 Gook v <*y well. I first met him at Waveriey! He g" th « of the Company, and asked me to explain and JhPr»^ greg^n On V argued that it would relieve witness ?k SPe t S aQd Cafcholics of the burden they had of educating ?® Ch t M T' I « x P laiQed *° the congregation, and I have been W^hiJTZ'ZT T ?t hebestof »7 recollection he said that Stl n^^P*- I mentioned this etatement to hZSSJE^'a ?? c*e * Sunday morning following I encouraged wtm^.J 1 "^ the congregation to take shares, but from what I heard and suspicions I had of .the man's character, I did not SwKThi T%T g \% atiOt \ tO take Q P Bhares ' He as^d me to act ni!?w d not do so beyond giving one receipt. He stated to Se gISSJ T*£ fSClllty for Bliarehol ders to re-sell their shares S^JSK 7^ 616 * ot satisfied. I held that out as an Soufd d fllf? d f eived - . Mr ' Cook Ba id that the best thing they Mr Cook ?Ml L aYe th fi; mone y refunded, and I replied, "Well, mSflfiSh,'" I11 w be + one o f the first to take mine; ill take it im' mediately. He turned away, and did not wish me good-bye. I £? a ? ge \ the mm u ne7 ' lam aware throu gh Mr. Cook that the oduc^tion clauses have been expunged from the Company's regula* wno?; lt!r e T d^° e^ hat^ ese clauses had been struck. g The remoted M?r w T^T* me to > oin the Company has been boTder fn thJpS° stated to me while in the district that no sharea^ZdiSSn/. could b 8 a director unless he held fif * Bhare8 ' This was all the evidence. Mr. Hamerton (smiling) : I am exceedingly sorry that your Sn&H ha ,t P fl ned ,-° h %° n l he BeQcb « *»» «» oughtToW no? be^dfourLd. 6 Bllpendiar y' but tt ™ fi * ed *» to-dayW could (Laughter?^ (ironicall y> : You look ™ry sorry, Mr. Hamerton. The Court then adjourned.