DAIRY FACTORY CASE.

Stratford Evening Post, Volume XXXIX, Issue 26, 22 May 1914, Page 8

DAIRY FACTORY CASE.

A DISPUTED At tlio Supreme Court at New Plymouth yesterday, Aliiis and Sparrow, of London, proceeded against William Samiison and David ■) ■ Dnu-o iw £3102 3s Gd, alleged to be due on a guarantee in connection with the Ohara Dairy Co,, Ltd. Mr i). Hutclien, with Mr Donald (lyjlliam, appeared for the plaint ills, and Mr K. H. Northcote and Tvlr C. P, Finlay for the defendants. , }'„■ Hutciion, in opening the case for the plaintiff, stilted that in 1907 some of the settlers of Die Ohura district. including the defendants, were anxious to have a dairy factory in their district, and entered into negotiations with Messrs 10- Griffiths am; Co., of New Plymouth, the New Zealand representatives of Messrs. Mills and Sparrow, produce merchants in London, for the purpose of obtaining financial assistance, and finally an ■agreement was entered into, dated April IS, 1907. By ‘the agreement made between E. Griffiths and Co. and various settlers on the other part d was agreed that R. Griffiths and Co., who were really acting as agents for Mills and Sparrow, should erect and equip a factory at Nihoniho, and creameries at Mangapapa and Mangaroa, at the cost of the settlors, the co-operative dairy factory company should be formed, and that when the factories were erected a mortgage should be given by the settlers to secure payment of the amount advanced, on September I, 1907, with interest added at 7 percent. in the meantime. The plaintiffs proceeded to act upon the agreement. A site was procured for the settlers at Nihoniho, ami a factory was-erected, but they did not proceed with Die creameries at the time because they were told by the settlers that they did not wish to have the creameries erected jest at this time. As he had already said, the factory was erected _ and a cooperative company was formed or January 15, 1908. In pursuance of Dio original agreement, a mortgage was executed by the Company to secure payment. On December i, 191.2. of the sum of £2500, which was the amount which had up to Die time upon advances by Mills and Spaiiov for Die purpose of erecting the factory which was then in course of construction, and for the purpose of securing further advances which might bo made to or on behalf of the Company. By an instrument of the same date a number of the settlerexecuted and signed an agreement by which they also undertook to repay these monies and further advances. The terms of the agreement so far as Mills and Sparrow were concerned, wen' that the settlers, who were intending shareholders in the Company would guarantee payment of £2509 with interest and further advances and, indemnify Mills and Sparrow against 'Die default of the Company. In the. agreement of April, 1907, the settlers were the principal contractors they could not be guarantors because no company was then in existence. By the agreement of January. 1908, they became guarantors, the prineipad debtor being the dairy factory company which they had formed. The two defendants were parties to both i those agreements. They wore also shareholders in the dairy com paov. The hrst defendant, Air Sandison, was chairman of directors, and the other defendant, Mr Bruce, was also a director of the company. After the execution of this mortgage and agreement further advances were made from time to time by Mills and Sparrow for and on account of the dairy company, with the result tha! there was due on December 12 lasi in interest £3102 3s Gd. Tlie defendants, in the statement of defence which they first filed, admitted the mortgage and agreement of January, 1908, but they denied that there was any money due ami owing under the mortgage. in then amended statement of defene" filed a IViv days ago, after the ease had been set down for trial, they put- in various new defences. It was a very remarkable tiling that it had taken them some six years to discover that they had those defences. It was very remarkable that they did mb even discover it when they put in their first defence on February last, and lie suggested that it would be tin. 1 duty of the jury to criticise very carefully any evidence which the defendants might bring forward in support of these defences. The first was that there was no consideration for the execution of Die agreement of 1908. He did not know what defence they really intended to set up, and so could not say anything at this stage upon that point. The second defence was that it was made a condition between Mills and Sparrow and defendants and some of Die set tiers that all the settlers should consent and sign the agreement of DOS. hut Mr Griflit I s would say that no such agreement was entered into with him at all. So far as he was concerned there was no such condition. Tim la I Dog of evidence was not eon eluded when the Court adjourned.