IMPORTANT TO MINING COMPANIES. A DUNEBDIN DECISION. (BY TELEGRAPH—OWN CORRESPONDENT.)

Te Aroha News, Volume VI, Issue 297, 8 September 1888, Page 6

IMPORTANT TO MINING COMPANIES. A DUNEBDIN DECISION. (BY TELEGRAPH — OWN CORRESPONDENT. )

Dunedin, Sept. 5. The case of the Wareatea Goldinining Company, -v. Win. Nahr, of Wesbporfc which was a claim for £10, payable on allotment of 200 shares' was decided by Mr Carew yesterday. The main facts proved or admitted at the hearing were as follow : In the month of August, 188/ it was proposed by certain persons, amongst others Messrs Geo. Allen, W-. Hay Dickson, William Gregg, Walter Hislop,- Charles McQueen, W. P. Street and Robert Waterston,to form a company under the name of " The Wareatea Gold Mining Company (Limited)," and to register the eaid Company under the Mining Ace, 1886. The piospectus was issued, but there was no evidence as to who prepared it or under whose authority it was 3 prepared, or that it was ever issued or that it came to the knowledge ol the delendant. On the sth August, 1887, W. J\ Street, James Allen, Li. Paterson, and \V. Hislop, four of the pc sons named in (ho said prospectus, met and re.M>hed, "That the piospectiib should be adopted, and that the peieons who appeared inhere as directors should be the directors of the proposed Company ior t.velve months."' On the 10th of October, 1887. the defendant signed an application for shares in the proposed Company in the following form: — "Application for shares Weatport, October 10th, 1887/ To the directors of the Warealea Uold Mining (Company) Limited : Gentle men, — I request you to allot me 200 shares in the Wareatea Gold MiningCompany (Limited), and I hand you here"-with-the sum of £5, being deposit ot 6d per share. I agree to accept the said shares or any smaller number you may allot to me, sabjecb to the rules of the Company, and I hereby authorise you toplacemynameon the register of members in respect to the shaies which may be allotted to me —\\ m. Nahk." The defendant sent the application to the interim Secretary of the proposed Company, and paid with the application a deposit of 6d per share. On the 18th October, 1887, William Gregg, Walter Hislop, and R. A. Paterson, three of the persons named in the prospectus, met, and allotted to the defendant the whole of the shares applied for by him. Notice of allotment was immediately afterwards given to, the defendant. On 6th December, 1887, the Company was registered, and a certificate of registration issued. The defendant did not make any payment in respect to the shares applied for by him beyond the amount paid by him on his application. On the 18th May, 1888, an extraordinary meeting oi the shareholders in the Company was held, when the first directors were elected, and rules for the management and purposes of the Company were made. The defendant did not attend this meeting in person or by proxy. No rules had been previously made either before or after the registration of the Company. After a long legal argument His Worship reserved his judgment, which he gave yesterday in the following terms : Assuming h'reb that the shares were properly allotted to the defendant, by what right can theplaintiffcompany claim allotment money V All that the cvi dence shows is that one of the terms of the prospecous was that Is per share was to be paid on allotment, bub in this case there is no evidence to connect the defendant with the, prospectus, if it is not referred to in the printed form of application for shares, and it has not been shown that he knew anything about the prospectus. JJhere is no agreement by the defendant to pay allotment money, no rules of the Company providing that it shall be paid, and clearly the directors have no power to levy contributions except in the way of callts and in the manner provided by the Mmm« Companies Act. I think upon these grounds the defendant is entitled to judgment. There are also other reasons upon which I think the plaintiff company could not re j cover. The application is addressed to the directors of the Wareatea Goldmining Company, Limited, and Mr Paterson said in his evidence that when he acted with the other promoters in allotting the shares he thought the.Company was registered as it had been arranged it was to be. As a matter of -fact the Company was not registered till about two months after the allotment took place. It eeems the application for shares was intended to be dealt with by the directors of a company then supposed to be incorporated, and not by gentlemen who were only -promoters ot an intended company, and, -therefore, the allotment by them is not' binding upon the applicant. Assuming that the application for shares was properly dealt with by the promoters of the Company and that upon allotment bhe defendant was liable for allotment money, then it became due on the' date of allotment, bufc clearly not to the plaintiff Company, because it had no existence bill two months afterwards. So if due at all 'it must be due to the promoters, and there is nothing in the Mining Companies Act that gives a company the right to sue in 'such a case, and I can find nor authority in favour of it, Plain till' nonsuited with' "cost*. Leave 10,' appeal was given. - * •