SHARES FOR SALE

Hokitika Guardian, 1 December 1925, Page 4

SHARES FOR SALE

action against company. lIAM.ILTON, November 27. An important judgment affecting share-holders in co-operative companies was delivered by Mr Justice Herdman at Hamilton to-day. At the September sitting of the Supreme Court, James IL. Whisker, farmer, of Waihoti, brought an action against the New Zealand Co-operative Dairy Co., in which he claimed payment of 1“73.75, representing sums which, it was alleged, had been wrongfully detained by the defendant company for calls. Ho also asked that his name be removed from the share register of the company as the holder of I t butter shares allotted him in August I<)2;j. ||e further sought to have certain articles of association declared ultra vires, and in addition, to hate certain of his shares in the company resumed or surrendered. Jlis Honour said it was certainly never intended that a company shatoholder, merely because he happened to he a company shareholder, should lie al liberty to issue an originating summons to have, determined for bis and the company’s future guidance the validity of each of the company’s articles. In his Honour's opinion it was undesirable that lie should so widely open the door. He thought that thi* was a ease in which he should ret use to make a declaratory order.

Dealing with the plaintiffs claim lor a surrender ol his shares, his lIOIIOIH .-aid the first observation he had to make was that he was not satisfied that the plaintiff had made application to the company to accept surrender ol hi- shares, hut assuming that such an application was made by him, the company was not. in his opinion, hound to grant it. His Honour added: “ I can find nothing which compels the company to grant an application, and f can easily understand that unless the directors of such a company as this are authorised to exercise discretion when applications to surrender shares are made, serious financial difficulties may ensue. Whisker’s liberty to trade has not lioett restricted in any way. He remains the owner of shares which the company refuses to buy and he is I fee to trade where he pleases aad with whom he pleases. The only thing he cannot do is to compel the defendant eompanv against its will and against the interests of the company to purchase his shares.

His Honour, concluding, said that judgment would he for the defendant. The question oleo-t- could he tin ntioned again.