BUYING IN OF FRUIT

Hawera Star, Volume L, 19 February 1931, Page 5

BUYING IN OF FRUIT

CONDEMNATION BY JUDGE CHARGE AGAINST AUCTIONEER'S. (Bv Telegrapn—Press Association.) WELLINGTON, Feb. 18. The system of buying in _ fruit foi sale in country districts which forms the crux of the /prosecution of Laery and 00. was further discussed in the Supreme Court to-day when several .■passages occurred between the Chief Justice and Mi" Harteld Johnston, K.C. The finn is charged on five counts with failing to disclose pecuniary interest in a contract concerning the sale of bananas on behalf of the Department of External Affairs and on one count with rendering false account sales. “You certainly have not persuaded me and nothing you can say to me will persuade mo that an account sale such as this is not a false or untrue document,'’ said His Honour during the course of Mr Johnston’s argument. The admissibility of evidence that the system of buying in was a custom among auctioneers was argued yesterday. “If I hold that the practice is an honest and reasonable one and you prove the custom, you will be entitled to succeed,” said His Honour. “If I hold that the alleged practice is not reasonable or honest, then it cannot operate as a defence, and the whole question will be this—subject to any consideration of the Statute: What was the mandate to Laery and 00., Ltd., on the sale of these things? and whether the firm has returned the price it has received.”

Mr Johnston: It is hal'd to fight against presumptive condemnation. His. Honour: I am not making any condemnation.

Mr Johnston : Must I not prove the custom first? His Honour: I have no hesitation in saying that if the practice is what I understand; from documents in court, It may he that you will have great •diffiicuity in satisfying me the custom is one you can adopt . . . Do you submit that a practice which lias been allowed to arise through, .perhaps—l do not say so definitely in this case at present—a combination among certain mercantile men or traders in a, particular trade, when the practice is contrary to all principles of law and equity, is to be regarded as reasonable and honest? Do you go that far?

Mr Johnston : Yes, I go that far. His Honour: Well, I hope that the day will never come when the court will accept such a proposition. The evidence for the prosecution concluded, Mr Johnston submitted that there was no case to go to the jury. There had been no contract with a third party for the sale of the bananas, and any pecuniary interest was outside such a contract. To-day His Honour said lie was not unimpressed by Mr Johnston’s arguments, but lie was satisfied the course for him to adopt was to allow the hearing of the charge to continue. Mr Stevenson, appearing with Mr Johnston for the defence, outlined defendant’s case, saying that the practice of buying in had been in operation for upwards of 40 years. Any loss or profit. was borne by the company. Dealing with the charge under section 7, counsel said the account sales were the ordinary account sales which had been sent out over a. period of yeans in accordance with the firm’s custom. It was a custom well-known to growers and others and there was no intention to deceive.

Alfred Alexander Phelps, a director, ■of the company, described the practice of buying in. The country manager attended sales and bought the fruit lie might require. Sometimes lie arranged a. purchase. The lines -bought were charged at the highest auction price.

His Honour: It is one of the most, improper find .irregular things done. It. is a. practice which is contrary to Jaw, to equity—contrary to every principle •of commercial dealings, in fact. I want to make it plain that these observations do not affect what I consider to be the real question in this ease; they lo affect the setting up of this most reprehensible and obnoxious custom.’’ Turning to- witness, His Honour asked : “Do you say even now that you cannot see the impropriety of such a practice?” Witness: Ido not see that we have defrauded the Government of anything. His Honour: I did not ask vou that. Witness : It has been helpful to the business; it was absolutely necessary to follow snob a practice. Further evidence as to the openness :>1 the practice and its general observance among auctioneers was given and flic hearing was adjourned until the morning.