DIVIDING PROFITS.

Gisborne Times, Volume XXIII, Issue 1804, 10 July 1906, Page 2

DIVIDING PROFITS.

A DISPUTED POINT.

{Per Press Association.) Christchurch, last night.

The case of Oowlishaw and others v. the Press Company, Christohnroh, was resumed in the Appeal Court to-day. Mr Bell, for plaintiffs, quoted authorities in support of bis contention that the profits made by defendants from 1892 to 1898 should have been expended in paying dividends to ordinary shareholders, instead of being put into the business aud converted into oapital. Couneel quoted from the balance sheets to show that between 1891 and 1904 the assets of the company bad considerably increased, and the increase bad been built up out of annual profits after paying a dividend of 8 per cent, to preference shareholders. Plaintiffs wanted an account of the profits taken, and a declaration of the Court that the profits whioh should have been paid to ordinary shareholders, but which bad been used to build up the business of the Company belonged to ordinary shareholders. Mr Stringer followed, addressing the

Court on the question of the duties of the direotors in dealing with the profits of the Company. Later.— Iq the Appeal Court Mr Stringer gave the history of the establishment of the Press Company, and said that when the preference shareholders had received a dividend of 8 per cent., then the deferred shareholders were to receive a dividend up to 8 per cent, if the profits allowed it. If there were any surplus profits this was to be equally divided between tbe two classes of shareholders, From 1892 to 1898 a dividend of 8 per cent, had been paid preference shareholders, but none during that period to ordinary shareholders, and the money available for them had been left in tbe business. It was from this latter money that tbe plaintiffs wanted tbe Court to deolare that they were entitled to receive a dividend of 8 per cent. Mr Stringer quoted authorities to show that plaintiffs, in agreeing year by year to the balanoe sheets of the Company, did not amount to acquiesoeooe in the diversion of profits to permanent assets,

Mr Hosking, for the defendant Company, contended that on a proper construction of tbe artioles of association of the Company, ordinary shareholders had no right of action against the Company for dividends that had not been deolared by tbe direotors; that the artioles dealing with dividends were ambiguous, and the directors, with the assent of shareholders) had bona fide plaoed one consistent construction upon them ; that the profits not deolared as dividends had now been converted into oapital of the Company, and oould not now be distributed as dividends.

The Ooutt adjourned until to-morrow.