A COMPANY'S MANAGER.

Taranaki Daily News, 25 February 1922, Page 7

A COMPANY'S MANAGER.

CLAIM FOR PART OF PROFITS. •uorj-TTOossv Esajj—•qde.zfepx xg CASE IN SUPREME COURT. RUSSELL VERSUS STAINTON. A case involving payment for the services a«s manager of a buainees during the principal’s absence in the Expeditionary Force camp was commenced in the Supreme Court at New Plymouth yesterday before Mr. Justice Chapman. Herbert R. Russell proceeded against Stainton and Co. and P. V. Stainton asking for an adjustment of accounts. Mr. H. R. Billing appeared for plaintiff and Mr. C. H. Croker, with him Mr. A. A. Bennett for defendant. Mr. Billing explained that though the claim was against two defendants it was really an alternative one, and would probably develop into a claim against Stainton and Co.

Continuing, counsel said the case arose out of an agreement for the carrying on of the management of the company when Stainton was about to go into the Expeditionary Force eamp. An order that accounts be taken between the parties was sought in order to see what was due to Russell. The firm, which was incorporated under the name of Spedding and Stainton, Ltd., had a capital of £3OOO. JStainton held 1610 shares and Spedding 1390, but the latter’s share was afterwards gradually transferred to Stainton by Spedding, so that Staihton and the company became practically the same party. At the time in which the proceedings were concerned Stainton lived in New Plymouth and managed the business, and Spedding resided in Auckland.

When Stainton found that he would have to leave someone in charge of his business he thought of Russell, whom he had known, and he communicated with Russell with a view to securing his services. Plaintiff was then in Auckland in the employ of Wright, Stevenson and Co. In March, 1918, Stainton went to Auckland to see about Russell’s engagement and the matter was discussed between the two. The question of the past profits of the firm was mentioned, as it was understood that he was to better his position and would receive a portion of the profits. Certain particulars were given by Stainton and from that they assumed what the future profits were likely to be and approximately what remuneration Russell would get. Russell was invited to check the figures and appointed W. P , Nicoll, of New Plymouth, who was known to both parties, to act for him in New Plymouth. Nicoll investigated the company’s books and reported ti Russell, but unfortunately the figures were not now available, as plaint’ff had destroyed them. During the negotia- , tione in Auckland Spedding, the other partner, was also interviewed, but he did very little in this connection, saying he would be satisfied with whatever Stainton arranged. AN ORAL AGREEMENT.

In Auckland an oral agreement was actually made, the terms being that Ruesell was to commence as manager of Spedding and Stainton’e business from May 1, 1918, at £3*25 per year, plus one-third of the profits, after allowing Stainton £5OO out of the profits. The question of duration was discussed, and it was agreed that the arrangement should, be for at least twelve months, and it was also mentioned that it was probable it would go on longer, as Stainton would probably have occasion to continue it. There was a particular point which wduld have to be decided during the proceedings. Russell said that the motor business was expressly stated as part of the profits bearing concern and that when Nicoll investigated the books he also took into account the motor business. The defence contended, however, that Russel] was to take no share in the motor business.

In reply to His Honor, Mr. Billing admitted that on the face of it the arrangement seemed to be one between Stainton and Russell. He pointed out, however, that Stainton was really the agent of the company. Russel] took up duties on the date agreed upon (May 1, 1918). He was introduced to the company’s bankers as the manager and was authorised to sign cheques, and was also presented to the firm’s clients as the manager. Stainton went into camp in May and was in camp until just after the armistice. He returned from camp in December, ’9lB. On several occasions previously, however, he had been back in New Plymouth on furlough. When Stainton finally returned Russel] was in hospital suffering from influenza. Stainton visited Russell on occasions and discussed when the latter would be able to resume duties. Plaintiff was ordered to take a rest and went for a holiday, returning about the middle of January. He continued working for the firm until May, 1921. During that time there was no mention of any change in the agreement. The parties simply went on without discussing the matter at all. It was quite natural that Stainton, being the principal, took a part in the work. The fact of Stainton being present, however, in counsel’s opinion, did not alter the situation and cotfld not be said to be a secession of the engagement. Stainton further took advantage of Russell’s presence in entering into other ventures and was away from the business on many occasions. DIVISION OF PROFITS. With regard to the payment of profits, Russell did not make any claim for hie share until the time came for the severance of his connection with Stainton. Russell Wd not been worrying about this part, however, for he had borrowed money from the firm ( £75 in cash), and was also indebted for repairs These items stood in the books of the company, and no attempt was made to deduct any money from his weekly salary. Russell knew that these would be deducted when it came to the squaring up of the profits. All through there was no mention of Stainton getting a salary in addition to his £5OO out of the profits, but later Russell saw some entries in the books of items L • ing transferred to Stainton’s personal account as salary. This was shortly before plaintiff left. When he discov ered this he was not altogether satisfied and he made a point of endeavorinc to secure another position. He discussed with Stainton the question of leav ing and had a chance to go into a new business if he could start right away Consequently he endeavored to get s prompt cancellation of his engagement without any failing out. As the re suit Stainton gave him a letter author ising him to leave without affecting the terms of the engagement. Russel laft on May 31, 1921, and was

claiming profits for the terms of hie engagement. It was contended that plaintiff’s third share of the profits was at least £B6B, and he was prepared to accept judgment for that amount. The points His Honor would have to consider, Mr. Billing said, were (1) Whether plaintiff was entitled to a third of the profits during that period?; (2) Are the profits from the motor department to be included in the share?; (3) Is defendant entitled to pay himself a salary in addition to the £5OO in the agreement ? Plaintiff gave evidence on the above lines. In reply to Mr. Croker he said he was disappointed with the first year’s results. There were practically no profits, so far as his participation was concerned. There were heavy outgoings in November and December and nothing coming in, but he could not say what was the cause of it. He had not examined the balance-sheet to see where the leakages were. He discussed the matter with Stainton, who was in charge then. Cross-examination was proceeding ' when the Court adjourned till 9.30 toi day.