DISTRIBUTION OF PROFITS.

Taranaki Daily News, Volume XLVII, Issue 8153, 10 July 1906, Page 2

DISTRIBUTION OF PROFITS.

T A T'fTQT TELEGRAMS.

PEB I'BESS ASSOCIATION. Wellington, July 9. The case Coirlishaw and others v. the Press Company, Christchurch, was resumed in the Appeal Court to-day. Mr H. 1). Bell, for the plaintiffs, juoted authorities in support of the •ontentioa that the profits made by lefendants from 1892 to 1898 should have been exponded in paying divi. lends to the ordinary shareholders, instead ot being put into the business ind eonyerted into oapital. Counsel quoted from the balance-sheet to show that between 1891 and 1904, the assets of the Company had considerably increased, and the increase had been huilt up out of the annual profits after paying a dividend of 8 per cent, to the preference shareholders. Plaintiffs vanted an account of the profits taken, :md a declaration by the Court that profits which should haye been paid to he ordinary shareholders, but which >iad been used to build up the business >f the Company, belonged to the ordin. iry shareholders. Mr Stringer followed, addressing the Court on the question of the duties of lircctors in dealing with the profits of a company. Lateb. Mr Stringer gave the history of fte. establishment of the Press Co., and" said that when the preference shareholders had received a dividend of 8 !>er cent, then the deferred shareholders vere to receive a dividend up to 8 per ■cut., if profits allowed it. If there vere any surplus profits, this was to be equally divided between the two classes >f shareholders. From 1892 to 1898 lie dividend of 8 per cent, had bc<m paid to preference shareholders, but ionc during that period to ordinary shareholders, and the money available for them had been left in the business, tt was from this latter money that plaintiffs wanted the Court to declare they were entitled to receive a dividend >£ 8 per cent. Mr Stringer quoted luthorities to show that plaintiff's wition in agreeing year by year to the balance-sheets of the company, did tot imount to acquiescence in the diversion of profits to permanent assets. Mr Hosking for the defendant coin, pany, contended that on a proper construction of the articles of association >f the oompany, ordinary shareholders nad no right of aotion against the ■ompany for dividends that had not oeen declared by the directors; that -he articles of association dealing with lividonds were ambiguous, and that lie directors, with the assent of the •hareholders, bona fide placed one conustent construction upon them; that >rofits not declared as dividends had tow been converted into oapital of the ■ompany, and could not now be distributed as dividends. The Court adourned until to-morrow.