BUTTER-FAT PAYMENTS.

New Zealand Herald, Volume LX, Issue 18533, 18 October 1923, Page 7

BUTTER-FAT PAYMENTS.

DAIRY' COMPANY SUED. DRIED MILk"fACTORY FUND., QUESTION OF ASSENT AT ISSUE. A claim in. respect of xnilk and J«Jgj , fat payments was heard by JTu.fac» Stringer in the Supreme Court. yert£day. Alfred Arthur Brook &*<£:£ Anderson) sought to recover £44.«£ £153 12s 3d tor milk supplied by him .n 1920 and 1921 respectively to, >hooam- . bridge Co-operative Dairy Company, Ltd. (Mr. A. H. Johnstone). . ~,-«• Defendants contended that planrUß . agreed "to accept 44 fully paid-up,dares for the first' item, and that he. ; had agreed, in regsrd to the other item, that these moneys should be retained,* by the directors for the,. purpose of payment m - regard to a dried milk factory., Defendants contended that plaintiff • had ■ asIsented to a resolution passed at & special ,i j meeting convened to authorise such de--1 duction. (Plaintiff slated that he did not con- ' sent, to the' retention, of'money bv the v defendant company. ■ . > . \ .■-• Cross-examined, plaintiff said he re- v came a shareholder in the -company in, he *■ thought, 1916, holding about. 162 shares. He could not remember being S present at a meeting of.' ; shareholders j when the company decided to r ! erect , % •;..; ! dried milk factory. He remembered the I decision to erect the factory, and he ob-;v;■ ! tained the' contract. ' -Plaintiff admitted, his signature, to a joint and several guarantee .to a bank in' respect/of a -um of money for the defendant company's ducd milk factory account. He signed because p ■ "they were all signing ;-. it." He did not; *;■ .: know, that the original j estimate for ■•; -be factory was £33,000,' but he learned thafi , . it actually cost over £100,000. He did not remember a meeting of guarantors at , which one of the resolutions was m re- ; ■ gard to a levy of Sd pound ■baiinittar*.;; : - fat. 'Ho. did not think he: remained very long at that meeting. v v ;'■;''"../ lie -examined, plaintiff said he was quite clear lie did not assent, at a meeting held l on June 30,.;19k!1, to a reso.ution authorising. the directors of the com- .V; pany to : retain 3£d a,pound Cipro mc'.ejs-. - due to "supliers, for the' purpose of the dried milk factory. ■ Percy y William : Stanley, a shareholder" and supplier to defendant company, said he rememberedi when'; the -3£d was dis-' cussed, The; resolution was . carried -with certain dissentients. _ '-"... " Case For The Defence. ... '

I Mr. Johnstone stated that when the | -company / decided ; to J build a dried .milk ! factory, dried milk 1 was 'at a fabulous /price, and it was believed this might , s prove to .be a solution ;to the difficulties \ of Waikato farmers. It was decided to borrow £33,000 from < the bank* su-d a joint/and several guarantee, signed-"by 156' shareholders, including ; plaiati(r, was given:,- It later became necessary .to increase I the borrowing to £63,000, Til »'*' a matter of fact,- the ' factory actually cost early i: double that amount; : As the '/ban declined to advance more than/£63.',|>o, the shareholders' agreed to a . diversion up to 5d per lb. on butter-fat during.■ the,/ ; season for completing the factory. _' A , special . resolution J. authorising th-. directors to retain 3£d per lb. ' from the cheques to suppliers was ; passed; ;- ~ Edward Allen, formerly chairman of defendant company, said -they decided :lo go in for dried milk in 1918, and to erect the factory. The shareholders said they ~ ■ ; would go-to; other companies if they did *■ .- "not go in for dried milk. / They arnt.ge.d. for. the money, £33,000, from - the .bank on- the /joint:, and several guar an m?, : and on security over the old .property, - ; Plaintiff was/at most -of the / meetings: t It was apparent in April, 1921,, that the shareholders would nave to liiid .'-a- ; in. I Ho reported at a meeting that; >Ivcy had ! sold ■ their better output to the ■-. Imperial Government at 2s 6d per. lb-, and romted . out that they had a great chance cf paying off their liability.- He then stated that, even if they paid out sd, the SupI pliers would be gettintr over 2s d'vioi-nj. I. . Cross-examined, /-'witness said there had been trouble between the directors and the ■;-.-,■ ./■'■ shareholders; that, resulted- in .a; special -.:■ . audit and ( they all resigned. ( His Honor said the point ho was con- :j , cerned with was whether the diversions were made lawfully and whether plaintiff .. was bound. Company Chairman Gives Evidence. Mervyn Wells, chairman of the defeudant company since ,1921, stated that he knew plaintiff was aware that : the. 314 ". was being retained. , _ . ■•-*. -. Cross-examined, witness said:* was not prepared to contradict plaintiff when: he said he put up his. hand.as against the motion, but if he did he thought lie would t have been^ioticed. .;. , To His Honor, witness said l £28,000 was raised by the 3£d per lb, retained. - » : Percy Granville Harvey, secretary to.-rlc- [■ fendant ; company, said "the item, of; £44 ijj ■ • : represented ~-a balance that .would -be duo • to plaintiff in the ordinary way/ -if: id at 'pound bonus: had- been paid, but' it- Was ' ; put into shares: by resolution. '. ThetVr?.;as L never any sum of cash available for plain- \. tiff/ nor was there ever any appropriation. / - of an amounts that -would entitle plaintiff to £44 in money. . -' •.- ■,-/- -Cross-examined; .witness said that if . uo dried milk factory had been in course of- .'•'. , • erection, or'if the company had not/owed other money, the ■ money would have been ' > !■■ 1 available for distribution among share- ;- holders. The shaxes were allotted to plaintiff in 1921. plaintiff'■ made no application *: for them. They; took it that, as the resolution had been passed without dissent, uo / application v was necessary. Interest ~ had been/paid on ■those! shares at 5: per cent, for 1921 and 1922. ' , . '. % Question of Obligation. > ■ His Honor remarked that the chairman at the meeting at which the ; proposal -as . to diversion .was being voted on seemed I to have taken particular care to ascertain 'if there were anv dissentients, and.if so, ;

V>IIVJ tilery vycic. • - **. u*» w»» .. > rf *. ....- taken and then they took people standing up. ;': Then .dissentients j were invited to come * forward ; if they did not choose to ■-, ■ com© forward at the' meeting they could record their ; names at the office. Seeing . that they took all these precautions, plawji:tiff being present < and not making himself - ;-. known as a dissentient, was there not an obligation upon him' to say " You are - wrong; -I dissented from the first,. ■; ; Mr. Anderson:" Not-necessarily. < : , His Honor:,' Does not it • go, to minimise his statement, that'he -'did dirsent ? • . - . Mr. Anderson: He was under no obliga- • , lion. ... -■;-.", His Honor: I think ho was under an obligation. He is a shareholder as ' well. ••• as ; a supplier. . •'■'■■• Mr. Anderson "'. said that plaintiff was; a creditor so far as this money <. was con- : cerned. The company should have communicated with all shareholders and have •> ■ obtained their assent or dissent. ■ Plaintiff had now taken steps to recover,, and it, was not as if there had'been a long delay " in making the demand.. They had plaintiff's statement that he dissented. IBs Honor said he was not sure whither it was net a ; mental t reservation.;: . ■■<-■.; Mr. Anderson said Brook had stated that. be put up his hand, and it was.quite impossible after- Vecordingjjis.dissent:in';that - way lie might have left, the meeting.:. He was '■;under no obligation to remain. '".'' "•"■■;.'■.. :; His Honor reserved his decision, '■'•",'