HIRE-PURCHASE SYSTEM

Evening Post, Volume LXXXV, Issue 33, 8 February 1913, Page 9

HIRE-PURCHASE SYSTEM

' SUPREME COURT RULING. (BY TELEGRAPH— -frRKSS ASSOCIATION.) _ AUCKLAND, 7th February. Tho 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 has an important bearing on the law on the hire-purchase system. The case was between the Official Assignee in the estate of Thomas Wylie, a bankrupt farmer, and the Massey-Harris Company. Mr. J. R. Reed, K.C., and Mr. Walker appeared for the Official Assignee, and Mr. F. Earl, K.C., and Mr. Moore represented defendant. A motion under the Bankruptcy Act, 1908, • was made on behalf of the Official Assignee in, bankruptcy of the property of Thc»nas'\Wylie, j for an order declaring that a single-fur-I row disc plough, and & ht>e drill, taken Iby the company from Mr. Wylie 's farm I on 2nd November, 1911, were part of the bankrupt property passing to the Official Assignee, and for an order that the goods should be delivered or paid for to the Official Assignee. -The plough, and the drill were obtained from the company by bankrupt on "hire and purchase" agreements under which periodical payments were to be made and the 1 property was not to vest in Wylie till the full prices had been paid. The drill cost £37 and the plough £16 10s, and only the first instalments of £12 6s 7d and £8 respectively had been paid when the goods were seized. The principle governing such cases was, said his Honour, that where a man obtained credit upon goods which the true owner of the goods allowed him to have tindci: such circumstances as to induce others to trust the holder of the goods, then the true owner should be stopped from insisting upon his ownership, and from taking froTn the creditors a' part of the fund out of which they expected their debts to be paid. The presumption of ownership in such a case might be rebutted if it could be shown that there was a well-known usage or custom that goods might be in tho hands of other than the true owners. There was no reported case in New Zealand in which the "hire-purchase system," as applied to agricultural implements, had been before the Court. Thirty-eight affidavits which had been filed to prove the existence" of the custom failed to prove it, while others filed by the other side proved the contrary. The, Massey-Harris Company had failed to show the existence of the custom. The bankrupt was farming in a large way. His assets were nominally nearly £10,000 and his liabilities nearly £7000, and any creditor would reasonably and naturally suppose that the implements were his own property. His Honour added that persons part* ing with goods under a hue and' purchase agreement could get absolute protection if they registered the agreement. The motion of the Official Assignee was allowed, with costs.