PURCHASE AT AUCTION

Waikato Times, Volume 93, Issue 14536, 7 December 1920, Page 6

PURCHASE AT AUCTION

INTEREST MAY BE CHARfED. ON OVERDUE ACCOUNTS. The question of whether an auctioner is entitled to interest on money outstanding on stock purchased in a sale yard was argued before Mr 11. \. Young, S.M., at Hamilton, yesterday, in a case in which the Farmers' Co-opera-tive Auctioneering Company sued R. Daveney, farmer, of W'hangamata, for £ls 2s id for interest which it was claimed was due on the purchase money of a dumber of sheep bought by him at a sale at Coromandel early in the yea". Mr W. Gray appeared for the company, defendant being represented by Mr E. 11. Northcroft.

Mr Gray said the claim dated back to January, when defendant purchased 400 odd ewes at a sale at Coromandel for £320 4s. The sale was conducted by plaintiff company under the usual printed conditions. These conditions included a clause setting out that interest was chargeable on all accounts not paid within 14 days. This charging of interest on outstanding accounts, said counsel, was a well-established custom, not only in Waikato, but throughout the Auckland province, and he believed right throughout the Dominion. Defendant, from his previous dealings with the company knew what the custom was, as he had paid interest on stock accounts before, and therefore he must have gone to this sale knowing that it was being held under the usual conditions, which were posted up, and to which the auctioneer called attention prior to the commencement of the sale. Defendant every month had had a statement of accou-it rendered to him and had never once, until this action was brought, disputed the interest. The # case originally involved a much larger sum, and now by adjustments on both sides only the amount stated remained in dispute. John Gordon, retired farmer, said he tad a lifelong experience of stock buying. It was a condition of all stock sales that where financial accommodation was given to a purchaser that interest was charged after 14 days. Edward Heywood, manager of the Hamilton branch of the N.Z. Loan and Mercantile Agency Co., Ltd., said the printed conditions of sales were always exhibited in saleyards. • These stated that interest was to be charged on all accounts not paid within 14 days. In all cases where monthly accounts were sent out interest was included after 14 days. In paddock sales the custom was for the agent who took out the buyer to get both parties to sign a sale note, in.which it was mentioned that interest would be payable after 14 days. The invariable understanding between clients and auctioneering Arms was that interest had to be paid, and it was very seldom objected to. John Scott Fisher, farmer, of Cambridge, corroborated the evidence of previous witnesses that the custom of paying interest was very general, witness remarking that it was only a matter of commercial morality that It should be so.

His Worship: Is there such a thing as commercial morality? (Laughter.) Witness: There is with me, sir., „ W. Garr Rollett also gave evidence on similar lines. Thomas Albert Dunlop, auctioneer, employed by the Farmers' Auctioneering Company, who conducted the sale in question, gave details of the transaction. Defendant, he said, purchased 71 sheep during the actual auction, but the sale proper had closed when defendant purchased 331 sheep, for which lie had previously bid, under the reserve price. The deal was brought about by witness and was really part of the same sale. Mr Northcroft: Then these 331 sheep were a separate deal? Witness: Well, it was really part of the auction. We often sell lines in this way after an auction is closed.

Mr Northcroft: The auction had closed, you say. Did you get defendant to sign a sale note? Witness: There was no need for it; the clerk was there and booked it up.

Replying to His Worship, witness said the rate of commission charged on yard sales was 4 per cent, and 3 per cent, on paddock sales. The reason the additional 1 per-cent, was charged on yard sales was on account of the greater expense involved in arranging the sale and for the use of the yards. His Worship: Are the conditions the same on a private as on a yard sale? Witness: Yes, practically.

His Worship: Did you explain this to defendant in selling the 331 sheep. Witness: No; I didn't think there was any need: He knew the conditions. W. H. Hume, manager of the Farmers' Auctioneering Company, explained the practice of the company in regard to accounts. Immediately after a sale a statement was made up and sent out lo the client, showing the details of stock purchased, etc. • The client was allowed 14 days' grace, and if the account was not then settled interest was charged as from the date of purchase. Interest was calculated monthly and pencilled in on the ledger, the amount being entered in the journal every six months. Davcney's account showing Ihese interest charges would in the ordinary course be rendered monthly. The credits showed in the ledger leaf produced were for stock sold on his account, the practice of the company heing to credit an account which was in debit with such sales, but where a client's account was in credit these amounts were forwarded to the vendor. Witness was at Coromamlel on the date of the sale at which Davency purchased Ihe stock, and the conditions of sale were exhibited there. When stock was offered under the hammer and passed, but sold before leaving the yards, such sales were regarded as being made at auction and treated accordingly; this was tlio generally recognised custom. In the-present case 15s was offered for the sheep under the hammer, but they were subsequently sold for 16s. To Mr Northcroft: The interest was calculated on the daily balance, and thus it was compound interest. All the accounts were sent out at the end of each month, and they were listed in districts. The fact that Daveney's nam.' appeared on these district lists was evidence that his account was sent out with the rest. Stock sold before it left the yards, and after the auctioneer had left the rails, was recognised as having been sold by auction and under auction sale conditions. All farmers who had had transactions with auctioneering companies were fully cognisant of the fact that interest was charged on overdue accounts. Mr Northcroft called no evidence, but in a lengthy address contended that the company had not established that p. custom to charge interest existed. Mr ■ Gray replied, quoting a large number of authorities in favour of his contention that a custom had been established, and that the fact that ths defendan had not objected to the charge for interest, as shown on his account, amounted to his acquiescence thereto.

His Worship, in giving judgment for praintiff for £l9, £ls interest and £4 admittedly due, staled that the plaintiff had purchased stock at the company's auction sale and removed it. He had nol paid for same, but had allowed the claimant company to act as Ids banker, and it was only reasonable to expect [hat interest would be charged. Monthly accounts had been rendered,

showing these charges for interest, and though defendant had paid off some of the amount he had made no apportionment of the amount or entered any objection to the charge for interest, whilst on previous occasions he had acquiesced in these charges. All the conditions, circumstances and practice surrounding the transaction indicated .i promise to pay interest, and there wis nothing to lead the defendant to think that the plaintiffs were acting for him from pure love and affection. Judgment was given for plaintiff for the amount staled with £l2 5s lO.i costs.