AUCTIONEERS AT LAW

King Country Chronicle, Volume XXIV, Issue 3242, 13 December 1930, Page 5

AUCTIONEERS AT LAW

DISPUTE OVER COMMISSION PLAINTIFF COMPANY NONSUITED. Judgment was given at Hamilton yesterday by Mr. Justice Herdman in the case in which the Loan and Mercantile Agency Company ,Ltd. (Mr. F. A. Swarbrick), sought to recover from Abraham and Williams, Ltd. % (Mr. J. G. Gordon, Taumarunui), '£BB6 damages, representing the proceeds of the sale of sheep and commission alleged to be due under a “gentleman’s agreement.” In a written judgment His Honour stated that in the course of business it sometimes happened that a farmer or dealer, whose indebtedness to one firm was secured by a chattel security found it convenient to buy or sell stock through another firm. In such a case, it was usual for the lastmentioned company to charge the other firm with moneys advanced to buy the stock and to credit it with moneys received for stock sold. In return for this service a commission allowance was' made.

When stock was purchased on behalf of a person indebted to a rival firm it was understood that the latter was given two weeks’ time in which to decide whether it would assume liability, continued His Honour. If it elected not to do so it should notify the other firm in order that the latter might retake the stock and sell the same for its own protection. It was not proved, however, that this practice had become an established trade custom.

His Honour quoted a minute of a meeting of the Auckland Stock Auctioneers’ Association which read:— “Purchase of stock by secured clients of other companies. With regard to this item in the minutes it was mentioned. that the members of this association had an honourable understanding on similar lines to the Manawatu and other associations, but does not consider it wise to make it a binding agreement, as it might affect security.” It would be absurd to suppose that because a buyer was under financial obligations to a firm he was free to pledge its credit unconditionally and without limit, commented His Honour. He had gathered from one of the witnesses that the practice was not universally respected. In reviewing the circumstances which gave rise to plaintiff’s claim, His Honour stated that James Tatham, a client of the defendant company, had given the company a stock mortgage to cover advances which it might make him from time to time. Regarding the purchase of Tatham at Gisborne, His Honour was satisfied that Abraham and Williams, Ltd., had given him authority to buy 800. Early in 1929 Tatham bought another 1274 sheep in Whakatane through the plaintiff company, which sent an invoice to the defendant and debited the amount, £1731, in its own books.

“I cannot find in the correspondence or in the documents put in as evidence, or in the evidence of witnesses, any proof of a contact on the part of the defendant company to pay for the 1274 sheep,” said His Honour. . “The Gisborne purchase was an occurrence quite distinct from the purchase at Whakatane which was engineered by Tatham without the knowledge of the defendant company. - “I can find no proof of any contract on the part of the defendant company to pay Tatham’s debt. There is no evidence of any undertaking by the plaintiff company to forbear from suing Tatham in consideration of a promise made by the defendant company.” His Honour said he could not accept the view that the defendant company was liable. The plaintiff company had not proved the _ existence of a binding legal obligation on the part of the defendant company to pay Tatham’s debt incurred for the purchase of 1274 sheep, although a contract of sale and purchase, to which Tatham was a party, had been proved. His Honour said he had no option but to nonsuit the plaintiff company with costs as per scale, witnesses’ expenses and disbursements to be settled by the registrar.