The Standard AND PEOPLE'S ADVOCATE. (PUBLISHED EVERY WEDNESDAY AND SATURDAY.) SATURDAY, JUNE 12, 1875.

Poverty Bay Standard, Volume III, Issue 280, 12 June 1875, Page 2

The Standard AND PEOPLE'S ADVOCATE. (PUBLISHED EVERY WEDNESDAY AND SATURDAY.)

SATURDAY, JUNE 12, 1875.

“We shall sell to no man justice or right: We shall deny to no man justice or right: We shall defer to no man justice or right.”

The decision at which the Directors of the “ Gisborne Permanent Land “ Building and Mutual Investment “ Society” have lately arrived, cannot be said to be in accord with the best interests of the Shareholders—at least, this is our view of the position they occupy on a question recently cropped up out of the proceedings of the Society. The Directors (so we are informed by the Secretary) passed a resolution on the 28th of May last declaring that out of the “ sum of money now about “to be borrowed, no more than £l5O “ will be advanced to any one person;” and that “ after this sum is expended “ the resolution in question will have no effect.” It were well that the Shareholders should be put in possession of the means whence this power, (claimed by the Directors to take upon themselves, by an arbitrary, ipse dixit law, to limit, alter, vary, and curtail the amount of benefit accruing in virtue of their shares) is derived. Rule No. 42—now discovered by practice to be imperfect—declares that whenever the disposable funds of the society amount to £lOO they shall be submitted to tender, &c.; and this is held by the Directors to limit the right of a tenderer to the said £lOO, and takes from him all priority of claim on any accruing funds in satisfaction of the full value of his shares. This is so palpably absurd on the face of it that a great injustice will be done to the Society if the decision of the Directors is permitted to be carried into effect. The clause quoted above reads thus:—

The disposable funds of the Society on amounting to £lOO shall be submit ted to tender amongst the members, and shall be allotted to the highest tenderer, wAo shall receive the whole or such part thereof as may be equal to the amount of the advance he is entitled to receive in respect of hie share or shares.

The obvious meaning of which is, that the “disposable” funds of the Society should not lie idle, but that when, and so soon as they shall reach £lOO, the law compels that sum to be put up to tender, but the rules do not say that, when the funds of the Society (as in the case of their augmentation by borrowing on purpose to meet urgent demands for money) reach more than £lOO, they are to be cut up into small sums of fifties and hundreds, at the caprice of the Direc-

torate; neither do they state that in the event of the receipts being above £lOO nightly, the lesser sum, and no more, is to parcelled out for tender. But, assuming that this interpretation is correct, whence, we again enquire, comes the authority for the Directors to work outside of it, and say that £l5O shall be themaximumof advances made to any one member ? Whence, also, their authority to pass a resolution, confining that limitation to one particular sum of money ? The case more particularly in point arises out of the demand for money by the shareholders being in excess of the fortnightly receipts of the Society, aud, under another rule, the Trustees are empowered to borrow —to mortgage the funds, in fact, to the extent of the next 12 months’ receipts— 1 if they “ shall deem it advantageous ” to do so, to meet that demand. The Trustees have done this. They are now in possession of £5OO, and we hold, and shall hold until convinced to the contrary, that it is ultra vires for the Directors to limit any shareholder, holding shares to a greater amount, to £l5O, if he laims for more.

The legal wording of the clause we have quoted, while it does not say that £lOO and no more shall be tendered for by any one person-at su»y one time, does not, on the other hand, deny the right of priority of claim to a larger amount should £lOO only be tendered for. • But we contend that, the moral aspect to be put upon its construction is, that in the event of £lOO being tendered for, a member shall, through the validity of his accepted tender, have an indefeasible right to the whole value of his shares if he elects to take it; the spirit of the rule rather facilitates members in obtaining the money for which they subscribe, than throws obstructions in the way of their doing so. If otherwise, how are they to “ receive “ the whole or such part thereof as may “be equal ” to the advance to which they are entitled ?” Shareholders very naturally enquire, “ what is the use of £lOO or so to a member if he requires double or treble that amount ? And those who say that to prevent a member from realising to the full value of his shares, is a breach of faith, have a good argument on their side. We are told that it is competent to'accept the smaller sums as instalments of the larger until all a member’s shares are satisfied. This would be right enough, but the Directors make it compulsory to go through the ordeal of fresh tenders for each amount, thus : Say the receipts are £2O a week, and A, wanting £3OO, tenders for, and obtains, the £lOO which it has taken five weeks to accumulate ; he waits five weeks longer, tenders for another £lOO, and is outbid ; he tenders a third time and, whether successful or not, he has wasted fifteen weeks, and has not yet got all he requires, besides having to pay interest at 10 per cent on the £lOO originally drawn. The rules are sadly imperfect, but this one, to which we have drawn attention, should be put right at once, and the validity of the Directors’ resolution tested without delay, if the Society is to succeed.

Notwithstanding the previously reported account of the Council's proceedings relative to the “ Highways Act,” of 1874, it appears that an amended Act has been deemed necessary. Part 2of the Act is now in force, without any predation, and all doubt is now removed as to the validity, past, present, and future of Road Boards under it. From the Southern Cross of the 29th ultimo we clip the following : — HIGHWAYS BILL. Mr. Wood moved the second reading of this Bill, and explained its object, which was to correct a technical flaw in the Act of 1874, and to validate past proceedings under the Act which, owing io the informality in question, were rendered invalid. The Bill was read a second time, passed through committee, and reported to the Council. Mr. Dargaville moved : That a respectful address be presented to the Superintendent, requesting him to issue a Proclamation in the Gazette bringing into operation the second part of the “ Highways Act, 1874.” A discussion ensued as to whether such a proclamation was necessary or not, and the motion was lost on a division of 21 to 12.