MILK CHEQUE CASE.

Stratford Evening Post, Volume LV, Issue 91, 16 June 1925, Page 2

MILK CHEQUE CASE.

AN ASSIGNMENT. A N INTEK EST! NG POl NT. At the Stratford Magistrate's Court this morning, M. K. Hewitt (Mr Moss) proceeded against the Waingongoro Dairy Co. (Mr Coleman) to re cover £l2 12s lid, being the sum deducted from factory milk supplied t< pay for butter and cheese supplied t< a person who had given an assignment of the whole of his milk cheque In opening, Mr Moss said the sun claimed was small, hut there was a big principle involved. A dairy company had made deductions from t> {supplier's cheques, in spite of an or der on the cheques. If it was helci that plaintiff was entitled to judg ment then the value of assignments of milk cheques would disappear. W. A. Hewitt, husband of plaintiff said that in 1922 his wife financed oik Brecon on a farm at Cardiff, th» securities including an assignment ol Brecon's milk cheques. The com pany had made deductions without the consent of witness or of Mrs Hewitt The solicitor was instructed to make an assignment of the whole of Brecon's milk cheques. Witness had applied to the company for a refund, but this was refused. To Mr Coleman; The only arrangement made was that Brecon should get £lO per month out of the mill cheques. That was the suggestion oi .Brecon. He believed it was a general thing for companies to make de ductions, despite the fact that an order was in existence for the whole oi the cheque. He did not object to deductions being made for payment oi share capital because that increased the security. He thought it would be Unreasonable to object, to the deductions for share capital, despite the fact that his order was for thie whole of tlie mil!; cheque. To the Ikuich: Witness got information from the Dairy CV S office in November 7923, but did not make a claim till December, ,1924. Re-examined: If witness had known that the price of Brecon's buffer and cheese was being deducted he would have recovered it out of the ClO pei month paid to Brecon. Thin was all the evidence for the plaiutii?. In evidence tor the defence, F.W. Brecon said that the arrangement was that he should get £lO per month, with all farm allowances. which included butter and cliee.se from 1-liiO factory. Witness got butter find cheese from the. factory from the

I start, if lie had not got factory buij t» r and cheese he would consider bimI »e3f entitled to withhold from the I factory enough milk to enable him ic ! make the butter required. To Mr Moss; Mr and Mrs Hewitt visited witness' farm early in May. 192.3. Witness got, butter find cheese from +he factory after that—up to August Ist. lie had never paid the factory for butter and cheese taken after May. Witness presumed' he would by'allowed butter and cheese. The arrangement made with Mr Hewitt was that witness should yet £lO per month and usual farm allowances. No special mention was 'irarle-of IftOU^WH the factory.

Patrick Morresey. farmer. Cardiff, and chairman of directors of the Waingongoro Dairy Co., gave evidence that Brecon was a supplier at the factory for about a year. The terms between the company and suppliers were that the suppliers should send all their milk to the factory, except so much as would be required to make butter and cheese. Few suppliers did that—they sent all their milk, and got their butter and cheese from the factory. The practice was for the price of such butter and cheese to bo deducted from suppliers cheques. The invariable pract'ee was to deduct the price of butter and cheese taken, in spite of the t ,.et that an order was given for the whole of the supplier's cheque. He ha< never heard of any objeection to such deductions. The deductions had been made iii the case of other placet in which Mr Hewitt was interested and no objection had been made.

lo Mr Moss: There were now two assignments in hi s company similai to the one in tins ease—for the whole cheque. In the case of one M. Hewitt had agreed to the deductions. If a supplier took £lO worth of butter per month the factory would object. suspecting that the supplier was reselling the butter. But an ordinary family might reasonably use 61b ol butter a week.

Win. Power, secretary of the defendant company, produced a. statement of Brecon's supply to the factory. This showed that £2B lis 6d was deducted for share payments and £l3 12s lOd for butter and cheese supplied to Brecon. The gross amount due to Brecon was £560 17s 7d (including bonuses) and the net amount paid to Hewitt wa.s £5lB Us sd. It ui order was made foi paymtnt of the whole of a supplier'; cheque to another party, the amoum "• better and cheese taken by th( supplier was previously deducted. H< bad novor had an objection | 0 thi course Lv ~c followed. The company's articles provided thai ;.b-- =.i; p p!joi could only have an nmoiun <>\ butter and cheese '.-asonably required for the use .■] his family. To Mr Moss; The articles gave express ryuver for deduction from cheques for payment for shares, but express power was not yivon to male* deductions for butter and cheese sup P le 'l- !' '•'■'■l-- a custom to deduci f"'" b Uter and cheese, but witness' would not say a deduction would Ik justified for other goods supplied b.\ a daily factory. in his experience 'u-ders R n .., (,„ , .;!] ; Hi-rnies wer< roughly halt for the -. holp amo'ini and half for so in- proportion. V. s'ter Fasti-!'. secretary of I \v "trntford Dairy Co., ga».-i' evidence that T- were a |}ii'jrn number orders a »i ..t m.. mill* cheques oi the company's - ,P'' , .. If an order was held for [lie whole of the cheque, the amount for butter and cheese was first deducted. No ehjectirn had ever been made. The Government ord°r on a cheque •said "free of all deductions," bid in practice the company was allowed to deduct for share capital and do-

!iesti« supply of butler and dices' ihe company le.ii.sed i 0 accept tli Government orders if they excludet all deductions. Witness had hoc secretary of the company for abou seventeen years, and Imd never hai i complaint About these deductions !n that time there was olily one ques : ion raised. That was when a soli itor asked what deductions wen made, and he Mas quite satisfied wbei old that the only deductions were fo: mare capital and domestic butter a>u •heese supplied. Herbert LI. Betts, employed in th thee of Mr. T. 11. Penu, said he ha< >een engaged on dairy factory worl or ten years. The practice in hi' iffice was to deduct for butter an< •heese supplied, in spite of the orde. ieinjr for the whole of the cheque. Harold K. Abraham, manager o' he Stratford branch of Messrs New :on King, Ltd., said his firm receive i good many orders on suppliers nilk cheques. In the case of ai irder over the whole cheque the in -ariable practice was for the domesti supply of butter and cheese to be dc lucted by the factory. His firm tool he deduction as a matter of course le had never heard of a deductioi wing questioned. His firm woulc bject to deductions for general store supplied. To Mr Moss; He had been in th itrntford district for thirteen years. Addressing the Court Mr Colemai Said it was held for defendant thai st was agreed that Brecon shoulc lave usual farm allowances. It was lot a matter of law, but merely o .'act, as to whether this was actual]} so. It had a bearing on the cast .hat Brecon was not related to Hewitt is servant to master. Brecon was i reeholder and Hewitt a mortgagee Jntil recently Mr. Hewitt had beei manager of the N.Z. L. and M.A

Jo. for about a quarter of a century nicl the custom must have been wel cno'wn to him. It was laid down. .hat provisions of an agreement .night he presumed from an under stood usage of the district. Usag< night exist in any trade or calling aid might be restriced to a very smal, .•hiss of people. Usage cou!,tl be .ead into an agreement except where 50 doing was inconsistent with the ■est of the agreement. A person dealing in a certain market was sup t )Osed to make himself familiar with clic usage of that market, and hV could be held to a Usage, despite hit ignorance of its existence'. In the iron trade it had b'«;<.n held in one particular that the law was over-rid-lon by a u*age. He (counsel) would hold that the factory had the right tc iff-set Brecon's supply of butter and cheese against the holder of the ord er. Under his contract with the Factory Brecon was obliged! to take lip certain shares and: to supply al in's milk to the factory, except tin. amount required for Brecon's own re quirements of butter and cheese. this right of Brecon's was nowise »b iogated by the order to Hewitt Hewitt recognised the right of the company to deduct for share capital. In the legal aspect.it was an,.import. abt fact 'that all witnesses had sait! that factories always insisted on re covering the price of domestic supph of b.utter and cheese by deduction from the monthly milk cheque, de spite orders over the whole of the' cheque. Counsel went on to saj khai lie had examined all the law'reports of the Dominion since 1860 and he had not been able to fine one case, let alone a decision, on tin point in dispute in the present case and surely that was a remarkable fact. It was also contended for th defence that plaintiff was estopped if the evidence was accepted that tbi factory made deductions after Ma) 1023 which were not objected to b;. Hewitt. Hewitt did not make h' ;laim until a year had passed. Th< actory took power to recover fro 1 . Brecon's milk cheque all money owe. o it by Brecon, but by the delay if judgment went against the com pany, the company would he pre rented, in the circumstances of thr•ase, from recovering the amoum from Brecon. In his address, Mr Moss said M 'olentan had not allowed for the dii erenee, betweeu a usage and ; ju'stom. Mr Coleman said that if he hac lsed the word custom ho had done s< vrongiy. He was contending for us age. Mr Moss quoted an authority b show that usage could not be urge* against positive law. If usage was t be incorporated in an agreement, i' must be specifically agreed on as par )f the agreement. The rights untie ihe assignment in the present case :ounsel held, amounted to a deiinitt legal right, which no usage could over ride. The question involved in thp ase had caused a good deal of trouhl, i) the dairy industry, and the cas< '. ou!il do a, great deal of good if i ■leared up the position. Tha orde •.as against (he whole of the mill supplied, and if a supplier waived hii ight to retain milk for butter ant' •lieese, then Ihe whole of the proceed •f his supply of milk would be s'lbjeci to the order. The S.M. said lie would not see snucli difficulty in the east if flierwas not the deduction for shun japitnl. The order said that it re "envd to the whole of the proceeds o the milk supply, but actually : , de luelion was made for sliaic capita' uid no object inn was made, Mr Moss said thet Ihe rleduclioi l 'or share capital resulted from ai igrreiuent prior .., ,!,,. as>igurn >m iiliH-h put it on a flifl'f'rent plane.' T! '<' t; M «:ud he point was : Dn lie order mean what if said-' Mr Moss said tb ■■ order, mean' «-Jisit it -.-lid. >,m t 10..1)t II will vvoul, 'lave sued for the recovery ol tin lotlwoiion f.-,.- share eapkal if i| | m < none to somebody else. But actuallrfewill not the benefit of that dednc ' !mi - It was not fail' to assume tha be supply of milk by Brecon ' ■•lie supply of Inittcr and cheese li? 'he factory constituted one nofit'-atd \s to estoppel, to counsel's mind tin defendant was not prejudiced, as h. still had his common law retimdv If judgment went for defendant com oany it would cause ~, <>iv>at rlenl o' ncouvenience and prohablv interfer' .-really with financing dairy farm ing. The S.M. said the matter should

eallly bo decided by a lii dier Court. Mr Mobs: It is ilie tirsl case of Jie and in Taranaki. Mr Coleman: Jt is the first case in \ew Zealand. Summing up his remarks Mr Moss ■ Limed that Hewitt's ass gnment )ver the whole of the milk supplied >y Brecon gave luiil s» title equal to >ne under the Land Transfer Act. Decision was reserved.