ON CONSIGNMENT ACCOUNT

Otago Daily Times, Issue 22544, 11 April 1935, Page 15

ON CONSIGNMENT ACCOUNT

TO THE EDITOR Sir. —What does it mean? From the dictionary “Given in Trust”; “To transmit for sale or custody.” “In mercantile law—Goods placed in an agent’s hands for sale or some oilier specified purpose.” In view of a recent decision it would be of public interest and informative to traders if you could give a definition of the expression, or perhaps considering its importance the Chamber of Commerce might state its interpretation. Traders generally have believed that the term “ Consignment Account ” protected them from fraudulent conversion. and that such conversion was an indictable offence. The recent decision makes it appear that an agent entrusted with goods on “ Consignment Account ” can sell them and convert the money to his own use without incurring liability other than an ordinary trade debt. If this is established. “Consignment Account” is meaningless. To the trading community the point is so important that the Chamber of Commerce, if in doubt, should obtain a declaratory judgment of the Supreme Court. —We are, etc., SOUTER AND CONWAY. Mosgiel, April 6. [No firm in good standing would repudiate or attempt to avoid payment in the case of goods received on consignment account. The consignor of goods on consignment account has no preferential claim in the event of a firm being unable to meet its liabilities, but tiiis docs not necessarily constitute fraudulent conversion.— Ed., O.D.T.]