THE HIRE-PURCHASE SYSTEM.

Dominion, Volume 6, Issue 1669, 8 February 1913, Page 6

THE HIRE-PURCHASE SYSTEM.

AN. IMPORTANT JUDGMENT. (By Telegraph—Press Association.) "■ Auckland February 7. The importance of the recognition of a custom .in settling legal difficulties was emphasised in a judgment delivered by Mr. Justice Cooper in a case which ha) an important bearing on tho law on the hire-purchase system. The caso was between the Official Assignee in the estate i X° m -. M Wylie, a bankrupt farmer, and the Massey-Harris Company. Mr. J. R. Reed, K.C., and Mr. Walker appeared for tho Official Assignee and Mr. F. Earl, P l ' r " Mo ° ro represented defendant. Pho caso was a motion under tho Bankruptcy Act, 1908, made on behalf of the Official Assigneo in bankruptcy of the property of Thomas Wylie, for an order declaring that'a single-furrow disc plough, ajid a hco drill, taken by tho company from Mr. Wylio's farm on November 2, 1911, were part of the bankrupt property passing to thp Offioial Ass'ffiieo, and for an order that the goods should bo delivered or paid for to tho Official Assignee. Tho plough.and the drill were obtained from the company by bankrupt on "hire-and purchase agreements under which periodical payments wero to bo made and the property was not to vest in Wylie till the full prices had-been .paid. Tho drill cost J237 and ■the plough £16 10s„ and only tho first instalments of .612- Gs. 7d. and .£8 respectively had been; paid when the goods were seized. The principle governing such cases was that where a man obtained credit upon goods which the true owner of the goods allowed him to have under such oircumstances as to induce others to trust tho holder of the goods, then the true owner should bo. stopned from insisting upon his ownership and from taking from ,the creditors a part of the-fund out of winch they expected their debts to be paid. The presumption of ownership in such a case might bo rebutted if it could bo shown that there was a well-known usage or custom that goods might be in TlfJi a u n S = ether than the true owners. Ihere.-was.no -reported case in New Zealand in which tho hire purchase system" i fl ,L" PP i! 1 f to agricultural implements had been befoie the Court. Thirty-eight affidavits which had been filed to prove the existence of the custom failed to provo it while others filed by the other side proved tho contrary. Tho Massey-Harris ■ Company lifttl failed to show the existence of iVwn";- Tl^J)ankn, Pt was farming in a largo way.„ His assets were noininal-i'-nna and his liabilities nearly f'* ? nd il" 5 ' cr<xhlor w o«1d reasonably and naturally supposa that the implell,s P r °J?? r ty. His Honour added that.. persons parting with goods under a luro and purchase scToem»nt could get absolute protection if they resfe. fe- ? a agreement. Tho motion of tho Official Assignee waa allowed, with costs.