A COURT JUDGMENT

Hokitika Guardian, 22 August 1931, Page 6

A COURT JUDGMENT

These gentlemen set about forming'*a company to pay them a handsome sum for taking off their hands a property which they had contracted to buy with that end in view. They bring the company 'into existence by means of the usual machinery. They appoint them- ! si Ives sole guardians and protectors of ! this creature of their, half-fledged an>l j just struggling into life, Bound hand j and foot while yet unborn by contracts | tending to their private advantage, and j so fashioned by its makers that it could ' only act by their hands and only see | through their eyes. They issue a prospectus representing that they had agreed to purchase the property for a sum largely in excess of the amount which they had, in fact, to pay. On the faith ot this prospectus they collect subscripj tions from a confiding and credulous I public. And then comes the last act. Secretly, and therefore dishonestly, tiny put into their own pockets the difference between the real and the pretended price. After a brief career the company is ordered to be wound up. In the course of the liquidation the trick is discovered. Mr Uluck-stein is called upon to make good a portion of the sum which he and his associates had misappropriated. Why Mr Uluekstein alone was selected for attack l do not know any more, than 1 know why he was only asked to pay back a fraction or the money improperly withdrawn from the coffers of the company. . .In these two matters Mr Gluckstein has been in my opinion extremely fortunate. But he complains that he may have a difficulty in -recovering from his co-directors their share of the spoil, and he asks that the official liquidator may proceed against his associates before calling upon him to make good the whole amount with which he has been charged. ,Mv 'Lords, th-.re may be occasions in which that would be a proper course to take. But I cannot think that this is a case in which any indulgence ought lo he shown to Mr Gluckstein. He, may or may not be able to recover a contribution from .those- who joined with him in defrauding the company. He can bring an action at law if he likes. II he hesitates to take that course or takes it and fails, then his only remedy lies in an appeal to that sense of honour which is popularly supposed to exist 'among j robbers of a humbler type. 1 Judgment of Edward Lord Macnaghten in Gluckstein v. Barnes: Law -Reports.