HIRE-PURCHASE SYSTEM

New Zealand Times, Volume XXXVII, Issue 8349, 8 February 1913, Page 6

HIRE-PURCHASE SYSTEM

■ Press Association. AUCKLAND, February 7. The importance of the recognition of a custom in settling legal difficulties was empuasised 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-Hams Co. Mr J. B. Heed', K.C., and Mr Wallier appeared for the Official Assignee and Mr P. Earl. K.C., and Mr Moore repre.jcnted defendants. . r The case was a motion, under the Bankruptcy Act, 1903, made on behalf of the Official Assignee in bankruptcy of the property of Thomas Wylie, for au order declaring that a single-furrow disc plough and a hoe drill taken by the . company from Mr Wylie's farm on November, and, 1911. were part of the bankrupt propertypassing to the Official Assignee, and tor au 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 the bankrupt on the “hire and purchase” agreements, under which periodical payments were to be made, and the properly was not to vest in Wylie till the full prices had been paid. The drill cost £37 aud the plough ,£l6 10s, and only the first instalments of £l2 6s 8d 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 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 from the creditors a part of the fund but 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 the goods might be in the hands of other than the true owners. There was no reported case in New Zealand in which the "hire and purchase” system as applied to agricultural implements had been before the court. Thirtyeight 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 £IO,OOO and his liabilities nearly £7OOO, and any creditor would reasonably and naturally suppose that the implements were his own property. His Honor added that persons parting with goods under a "hire and purchase” agreement could get absolute protection if they registered the agreement. The motion of the Official Assignee was allowed with costs.