CLAIM AGAINST FARMER.

Gisborne Times, Volume XXVI, Issue 2285, 2 September 1908, Page 2

CLAIM AGAINST FARMER.

A QUESTION OF p BUTTER-FAT. [Press Association.] AUCKLAND, Sept. 1. Mr. Dyer, S.M., this morning gave judgment in the case in which the Mata'kana Co-operative Dairy Co., Ltd., sought- to recover £3O 15s Id from J. Wot-herspoon, of AVliangaripo, for loss sustained by plaintiffs by reason of the defendant failing to supply the prescribed amount of butter-fat in term's of the articles and amended articles of association of the plaintiff company. The plaintiff company is a limited liability company, duly incorporated under the Companies Act, 1882, with a capital of £SOOO, divided into 5000 shares of £1 each. Prior to Juno 1, 1903, defendant applied for and was allotted 20 shares in the company, and was duly entered upon the company’s register. Air. J. Alexander appeared for the plaintiff company, and Mr. Bloomfield for the defendant. In giving his judgment, Mr. Dyer said that by the original articles each shareholder was to bold as many shares as lie milked cows, such shares to he paid by the payment of 2s 6d per share on application and the balance by the deduction of |d per lb of butter-fat supplied by him to the company until the amount of his shares were fully paid-up. On December 19th, 1905, tlie defendant’s original shares were fully paid. On March 30tli, 1907, the defendant was allotted 20 new shares under the amended article 8 (c), which provided that as soon as the shares of any shareholder should be paid up, as provided by the original article 8, it should be lawful for the directors to allot to him more shares in the company not less in number than those originally allotted to him. to be paid for by the deduction of §d per lb of butter-fat, and the shareholder should continue to take a small number of now shares from time to time as the shares held by him were paid up, and should pay for the same as lastly provided until the liability of the company was paid up. The present action was laid on articles S A and S B to. recover alleged loss through, defendant failing to supply the required quantity of butter-fat. On July 1. 1907. the directors declared a dividend of £5 per cent on all fully paidup shares, and in September! 1907. the defendant was paid a dividend of £1 13s. The defendant, while admitting that he failed to supply as much milk as he should have supplied under the amended articles, contended that those q mended articles were ultra vires and therefore invalid. In the course of reviewing the obligations of tlie Association and its limitations, His Worship went on to express the opinion that the amended articles had increased the liabilities of file shareholders beyond the liability limited in the memorandum of association, and that they were therefore ultra vires of the memorandum and void. Judgement was accordingly given for the defendant with costs.