BRUCE'S OATMEAL MILL.

Temuka Leader, Issue 1907, 22 June 1889, Page 3

BRUCE'S OATMEAL MILL.

At the District Court, Timaru, lasfc "Wednesday, before His Honor Judge "Ward, two applications were made by the liquidators, Messrs Sparrow and Hercus, of Dunedin, to have settled (1) list of claims against the comp|ny, and (2) list of contributories (persons liable to pay up on shares allotted to them, and amounts they should be made liable for). Mr W. D. Stewart, of Dunedin, appeared with Mr Knubley to make the applications, and Messrs Perry, White, Hay, and Raymond appeared for certain shareholders to watch the proceedings in their behalf. Mr Stewart opened with a history of the concern since its formation in 1886 with nominal capital of £6OOO in £IOO Bhares. In August, 1887, it was decided to increase the capital by the shareholders duplicating their shares, provided 75 per cent, of the shareholders agreed to it. The 75 per cent, agreed. He referred specially to sonAe of the shareholders. These were, JSpvJßruce, to whom had been allotted six fully paid up shares in part payment for the property he sold the company; Mr Brayshaw, who received three fully paid up shares for a section of land, and Messrs Reid and Gray, who received one fully paid up share in payment for an engine. There were three classes of shareholders; first, those who had sold preperty to the company, taking fully paid up shares in payment. The authorities seemed to be quite clear that in such cases the shareholder remained liable to pay cash to the full amount if the company was wound up, unless the contract were specially registered with the registrar of joint stock companies. This would apply to Bruce, Reid and Gray, Brayshaw, and Drysdale. Another class were those of the 75 per cent, who agreed to duplicate their shares, to whom extra shares were allotted and notice of allotment posted. The third class were those who not only had the additional shares allotted to them, but who took the scrip for them and sold their shares. The liquidators made no claim against those who did not sign the agreement to duplicate, except so far as any of them had not paid up on the original Bhares. The directors on finding the company losing money sold their shares to Mr Christie, of Oaraaru, who had since been convicted of. fraudulent bankruptcy and resigned, thus throwing over the other shareholders. He had never heard of an instance of directors treating their co-shareholders in this manner. Then Messrs Rhedes and Dawson got a mortgage to the bank transferred to them, and put in a claim that swamped any chance of paying a dividend. They bought' in for £2OOO the concern which cost £6OOO, and voted themselves ofi the list of shareholders so that.the other shareholders would have to bear all the burden.

Mr Perry said all that would be explained, The evidence of James Bruce was taken. His evidence dealt principally with transactions prior to the formation of tie company. "W". ft. Quinn, secretary, gave evidence as to the duplication of the shares. One share was transferred to witness by Mr Bruce without consideration, in order, as Mr Hay said, to make up the 75 per cent of shareholders. He produced minutes showing that at a meeting held in August, 1888, the directors, Messrs Rhodes (chairman), Plante, Dawson, Balfour, and Drysdale, were aware of the state of the company, and passed the transfer of the shares to Christie, and resigned. Messrs Raymond (for Mr Armitage) aW Play (for Mr Brayshaw) said they would have to ask for an adjournment, a 'i-their clients were out of the colony at present. The,, matter was allowed stand over.

In cross-examination, the witness Quinn said that several of the names on the agreement to duplicate shares in August) were not shareholders until the following February. Out of 29 shareholders 10 of them refused to duplicate their shares on the 20th August, 1887, so that 75 shareholders did not agree to the duplication. Subsequently Mr Brace's transferred shares to his wife, son, and daughter, and they counted. The liabilities of the concern when it ceased operations were £6OO or £7OO. The directors tried to get the shareholders to wind up in July, but they only laughed at them. The directors, after the shareholders refused to wind up, sold their shares so as to enable tbem to retire, and compel the shareholders to wind up or put more capital in. The case was continued all day yesterday, and was not concluded.