"NO FRAUD."

Press, Volume LXIII, Issue 19147, 2 November 1927, Page 5

"NO FRAUD."

SHARES IN COMPANY. CLAIM FOR REFUND OF MONEY. "X ivant to state here that I liave carefully considered the correspondence between all the parties, and as far as the defendant, ,T. S. Day, is concerned, I can find no tinge of fraud. It seems to have been an ordinary business transaction conducted by J. S> Day nnd Co., in an ordinary way," said E. D. Moslov, S.M., in the Magistrate's Court yesterday, giving reserved judgment in a case in which Neil James Morris, accountant, of Christchurch, proceeded against Wilson Bros., of Auckland, and J. 8. Day and Co., of Christchurch.

The plaintiff claimed from the defendants the sum of £3O plus £5 0s 9d interest. It appeared from the statement of claim and the correspondence, stated the judgment, that the defendants, Wilson Bros., were engaged as brokers in trying to float a company under tho name of "The New Zealand East Indies Co., Ltd." Day and Co. were acting for Wilson Bros, as Christchurch brokers, endeavouring to sell shares. A prospectus was issued, but the company did not appear to have -been successfully floated. The plaintiff applied to Day and Co. for 200 shares in the company and paid £SO by way of application money thereon. Two of the provisional directors in the proposed company applied to Day and Co. for a loan, and moneys amounting to £67 were lent to them. Day and Co. advised their priii-* cipals of the loans and under their instructions credited the application money against the loan moneys, Wilson Bros, treating the application money as having been received by them. The company not having gone to allotment, the plaintiff demanded from the defendants the return of the npplieatiou monev.

Mr Moslcy contended that under the circumstances, J. S. Day and Co. could not be successfully sued for the application money. The directors named in the prospectus, or some of them were liable to repay the money as well as the defendants, Wilson, who had not eutered any appearance to defend the action, judgment for the plaintiff against Wilson Bros, would bo given by default for the sum of £55 Os 9d and costs, judgment for tho defendants, J. S. Day and Co., with costs. As the question of the liability of Day and Co. was not without doubt, security on appeal was fixed at £ls los in case an appeal was sought. Wilson Bros, were unrepresented, Mr S. E. McCarthy appeared for the plaintiff, and Mr W. F. Tracy for the defendDay and Co.