"KEY V. ARCHIBALD ARROL & SONS.
The record was closed by Lord Kincairney in an action in which William Key, brewers' agent and licensed victualler, Sunderland, sues the late firm of Archibald Arrol & Sons, brewers, Alloa and Glasgow, for payment of £11,250. The pursuer states that for several years prior to 1 November, 1893, he had certain dealings with the defenders. In 1893 the latter conceived a scheme to form their business into a limited liability company, and to acquire licenses houses in which to sell the beer manufactured by them. The annual profits from their business was only £1500 or thereby. The defenders were themselves unable to find the capital requisite for a floating their business, and they consulted the pursuer on the subject, as he was a person of experience and influence, with the view of floating the limited company. As a remuneration for introducing a person through whose a instrumentality a limited liability company would be incorporated, Walter Arrol offered to pay the pursuer a commission of 2.5 per cent on the nominal capital of the company to incorporated. The pursuer introduced to the defenders Mr Benjamin Smyrke, a chartered account in Sunderland, and through the efforts of the pursuer and Mr Smyrke the company of Archibald Arrol & Sons (Limited) was floated. The share capital was £250,000, with a debenture stock of £200,000, and on this total of £450,000 the persuer seeks a commission of £11,250, being at the rate of 2.5 per cent. The company has been a success from the date of its incorporation, and the defenders have reaped large benefits therefrom. In payment of the purchase price of their business the whole of the ordinary shares were allotted to them, and the annual income from these shares is not less than £9600. The defenders, who are William, Walter, and Archibald Arrol, in their defences, explain that prior to November, 1893, the pursuer had been a customer of the defenders. In 1891 they appointed him their traveller or agent for the sale of beer to the military authorities at Sunderland and elsewhere, and in connection with these matters they had certain meetings with him from time to time. They deny they entered into any arrangement with him to float the company. They refuse to pay him the sum sued for. They plead that, as the pursuer's averments are unfounded in fact, they ought to be assoilzied."
Glasgow Herald - Wednesday 26 May 1897, page 9.
It sounds to me as if Mr. Key was just chancing his luck.His description as "brewers' agent and licensed victualler" - basically pub landlord - make him seem an unlikely choice to help in complex financial arrangements. The company's claim that he just sold their beer seems more plausible.
2.5% seems a big commission for nothing more than finding an accountant. Especially given the amount of money involved in the flotation. As the article indicates, that £11,250 was more than the directors earned annually from the company. I'm not surprised they didn't want to pay him it.
The claim that the brewery had only been making £1500 a year doesn't seem to tally with the figures in the prospectus. There it said that the profit was over £20,000 in 1894. But that wasn't the profit of just the brewery. It included Meikle and Turnbull's northeastern pub business. It sounds as if that was responsible for the bulk of those profits. Which wasn't made entirely clear in the prospectus.
We do learn the motivation for the flotation: to acquire a tied house estate. The standard reason for English breweries to go public. But not Scottish ones. Bizarre that they chose to build an estate in England rather than Scotland. Perhaps they were worried about losing their outlets there as English brewers bought pubs like crazy.
Finally, the word "assoilzied". That's new to me. Sounds rather like a trouser accident. It was oddly disappointing to learn the true meaning: found innocent.