SUPREME COURT

Dominion, Volume 9, Issue 2803, 22 June 1916, Page 9

SUPREME COURT

CASH REGISTER CASE

ALLEGED REPUDIATION OF CONTRACT A case of considerable interest to commercial circles was heard "before' His Honour Sir Robert Stout, Chief Justice, and a special jury at iho Supreme Court yesterday morning.. The jury consisted of: Messrs Howard Eeid (toreman), F. Dyer, *red. It. Laisliley, Gr. E. Brown, Aug, uustofson, J. C. Brown, A. JI. Holmes, G. W. Kobinson, Win. Birnie, A. A. Phielps, E. B. Bristow, and W. C. Badden.

The case was one of alleged breach, of contract. _ The National Cask Register of Australasia, Ltd., for whom. Mr. Thos. Neave appeared, claimed the sum or ■£1206 fTom Messrs. C. Mi Eoss and Co., drapers, of Palmerston North, who, it was stated by counsel, had ordered 1 ten machines from tie plaintiff /company. Ihe defendants had given a signed order on the usual form of the company to one L. Sandberg, a commission agent in the employ of plaintiffs,- and' had paid .£l2O by way of deposit.' Defendants refused to take delivery, repudiated the contract, .and as the machines had been specially built for defendants, the action was brought to recover the whole price of the machines.

•Hr. T. - Young, v;ho appeared for the defendants, said that the contract was not a valid one—it had not been agreed upon by the parties; that the order was" procured by alleged sundry misrepresentations made by one. L. Sandberg. The defendants also contended that the machines, were not effective for the. purposes of defendants' business; and that the agent of the company had' wrongly represented. that similar machines had been installed by other firms in the same line of business, which it was alleged -was found to l>e untrue. His clients/ also wanted a refund of their deposit, .£l2O, and interest.

Mr. Noave, in presenting an amplification 'of plaintiff's . case, stated that the machines were ordered on June 9, 1915, and that tho agent'who took the order was entitled to receive a 30 per. cent, commission—on .he order from the National Cash Register . Company, Ltd., of Australasia, a firm distinct from the parent company in Dayton, Ohio, where the machines were made,' in that, it; was responsible for the,payment of all-ma-chines ordered; and the New Zealand branch was similarly situated. In anticipation of the order from C. M. Ross and* Co., a cablegram had been dispatched to Dayton on June 5 last year ordering the machines, and'when four days later the order was alleged to have been completed, a further confirming cablegram was sent, and-'further particulars were added as to the special make of the machines required. ■ ; ( this stage His Honour, asked: What is the dispute between you?" Mr. Neave: It is a-breach of contract and we claim damages. Mr. Young: We hold there w.ir no agreed or valid ' contract, Your Honour, and besides there.is a question of law.. His Honour: A question of law might havo been cleared away by a Judge without all this expense of : a special jury. Was- there any necessity for a special, case to determine a question of law? Mr. Neave related the" circumstances that led up to the necessity, in -his judgment, for a special case; anj. stated that over and abovo the question of law there were further issues involved; viz,,' alleged misrepresentation and fraud-. His Honour: It ?eems to me that the Court will hlave to decide .the. question of law, and leave the whole ease to the jury.

Mr. Young: It may please Your Honour to reserve the question of law. Mr. Neave proceeded to describe'the liegotiatioDs between' tho parties, . and read a long series-of correspondence that followed. -■ Counsel.. likewise -.took some time in explaining tho technical differences of, the .three .classes:,of the machines—eight of one and 0110 each\of two other classes —alleged "to have'been ordered by defendants. In concluding his opening remarks Mr. Neave said that the-differences between-,the machines ordered and the ordinary stock machines of the company's, standard makes were so great that their refusal By defendants made thorn- "dead stock;,' to plaintiffs. If they had been standnrd machines, the National Cash Register Co. 'would have taken the. machines' back and put them into stock. .

M'illiani B. Bennett, manager for Wellington of the National - Cash Register Co., said tliat he received an order signed by C. M. Ross and Co., from L. Sandbergi, ..the company's agentl 'It was for ten machines of special make, the mechanism being so 'constructed that the total sales-of three separate departments could be shown.. They were the first machines of their kind ordered for Aew Zealand. The machines were numbered consecutively for' the number of assistants who. could use them, and were so constructed that provision was made for recording goods sent out' on "appro." After a perusal of the books of the company for the past two years and a half the order given by the defendants was found to be the fiisfc three-drawer, ' five-counter machine ordered for New Zealand. !

To Mr. Young: The purohaso prioe paid to tho manufacturers was ,£SOS ss. 1d.,, tho freight amounted to .£2O, and tho duty to .£ll2 19s.—while the commission was ,£361 16s. He had tried to sell the machines. , which had been refused, but without success. To make them sakablo considerable alteration would have to bo made, but that would necessitate their "being shipped back to the manufacturers. The net profit of his company varied from-lj per cent.' to 6 per cent. Last year tho profit was 3J per 'cent. The company's salesmen were paid by results, and' were allowed 30 per cent, on sales.' The company had a factory in- Berlin, but' all his orders were executed at Dayton, Ohio. Sandberg had been credited with .£361 commission, and since had been debited with certain advances on account. He had not considered re-debiting' the amount of Sandberg's commission on this transaction. The Tule was for an "agent to do one of -two things—either to give twelve months' terms, or to' make the sale one of cash on delivery, less 5 per cent, discount.

Arthur T. Clarke, accountant, said had audited the National Cash Register Co., and the rate of profit, earned in 1913-14 to March 31, was 6.13. pfcr cent;, in 1914-15 1.21 per cent., and . in 1915-16 3.5 per cent. He had no mechanical knowledge of cash registers, but he believed the machines were automatic checks upon tho cash taken for goods sold by shop assistants.

His Honour: What has all this about the company's profits got to do with the sale or non-salo of the registers? • Mr. Young: The company's agent represented that the company only made 30. per cent., whereas the cost of- the machines was ,£GSO and tho price charged was JEl2o6—nearly 100 per cent., Your Honour. The company here only made a profit of 34 per cent., but the original' comoauy in America made tho original profit. The company's agent, he added, misrepresented tne position to his client. ' ;

A. T. Clarke, continuing his evidence, said the turnover in New- Zealand was J628,00l) for 1916. ' The.machines cost 49 per cent, of that amount, which was remitted to America, and <£7000 was disbursed in commissions in New Zealand. All the profits for the year of the Neir Zealand branch were 3i per cent. Imdwig Sandberg, described how ho canvassed Messrs.. Ross and Co. for eleven months beforo lie got the order signed for ton machines. He decribed the mechanism and ,working of the machines by diagrams; and : showed how. difficult it would be to alter tho machines ordered into stock patterns. To Mr.' Young: He did say to Mr. Rosa that unless he got the order before the 15th of the month the price would be raised, it may been 15 per cent. He would not say that that "pushed" tho defendants into the transaction;. 1 He was born in Breslau, Germany.' t>

H. C. Jessop, chief mechanic for the National Cash Register Co. in New Zealand, said the cost of -altering tho machines ordered by C. M. Ross, and Co. into standard machines would, in labour alone, run into J220.

This concluded tie case for the plaintiffs. -

Mr. T. Young, in his further statement of the defendants' case, observed that the alleip/d order was subject'to •.the approval of- the head .office, and if the company had desired to oppose this contract, instead. of being, anxious, to fulfil it, tliey could h'aye s«id that it was not ratified by head office; and if they,, were-entitled to use that against his clients, surely , his clients were , entitled to use the non-ratification I by the head office for their purposes .ateo. It was expressly stipulated on the letter headings, of the New Zealand branch and on tho alleged order, ."All orders subject to confirmation by head office." The head office was in Sydney, and from' there no ratification had reached his clients before they cancelled their order. Mr. Boss-had seven days after- the signing of the alleged contract,- written to the Wellington office of the company saying that lis would not want cash registers, and asked the company to deduct whatever expenses they had been put to from liis deposit and Temit him the balance. Yet, notwithstanding this, the plaintiffs went 011 with - the "order, knowing that it was cancelled.' Surely, said counsel, they were "responsible " for any loss they may have suffered. V • . Hubert Rafferty,. a commercial traveller in the service of the Lampson Dispatch Company, was formerly in the service of the National Cash Kegister. Co., described the registers, sent to Messrs.. Ross and Co. as-not suitable to-a large departmental store. They were jDlot even effective. They were, all right for small. stores, where the proprietor could ( supervise his two or three assistants. Tho case will be resumed at 10 o'clock this morning.