S.M. COURT.

Otaki Mail, 6 August 1923, Page 3

S.M. COURT.

OTAKI—THUBSDAY. TE HORO DAIRY v. R. J. KINO. This was a claim for £97 3s sd, being a. refund of loans of £SO and £35 plus interest at 7 per cent, from the respective dates of advance down to the lfth ■Time WZ'A. There were three cases of a similar nature before the Court. The incorporation of the company was admitted; also that defendant was a shareholder j and a supplier during 11*20-21 season, alio the payment to the defendant, and the demand for repayment by the company. The nature of contract of supply was shown by the course of dealing bciwceii the. company and the Suppliers; and was evinced by the balance sheet.-. The suppliers commodity was entrusted to the company with the mutual object of getting as nigh a price as pos- , siblc. A company of this sort, establish- ' eel a factory ia some dairying centre | iu,u lac cardinal principle was that the milk suppliers should be shareholders and thai all the net prolils should be divided amongst the shareholders who cere suppliers iu proportion to their Icliveries or butter fat. No written .grcemenf Cor supply had been entered ,juu. The supplici luoiv nis milk to the factory and in return received as big i payment as the directors could pay, having due regard to the financial position of the company. This appeared to be the nature of the contract existing between supplier and company .n most districts. These particular payments were not in the nature of the jsual periodical monthly payments made to each supplier. They were :oans to these individual suppliers on the security of a final pcymcut at the md of the season estimated at -ild. per lb. of butter fat and their continued supply. The Directors had anticipated that a final bonus of fid. per lb. butter fat would have been available and they jonsidered themselves safe in making these advance. The Id. bonus absorbed fi u et-f ISs 10d of the balance in the Appropriation Account of 1021, tho whole of which was shown in tho Appropriation Account of the 1922 B/tf. In this account the balance was £-1305 1-is . It was not shown as being available for distribution. Joseph George Harkness, of Te Horo, Chairman of Directors of Te Horo Dairy Company, Secretary Co-op. Dairy Producers Freezing Co. of N.Z., and c-.x Chairman of Wellington Harbour Board, stated: "I was appointed Chairman of Directors at tho general meeting in 1921. The cardinal principle of the company is that suppliers are shareholders in the company. No express agreement for supply is entered into. The suppliers send their milk to the plaintiff's factory on tho expectation of receiving tho best price that the company can pav having regard to their financial position. That as a matter of common practice the Directois authorise a monthly payment to the -aippliers on | ac-ount of the price which they expect to realise and at the end of the season when the produse has been realised a final payment is authorised if the financial position warrants it. Each season is made as self contained as possible by means of advances and bonuses. The company can only pay «ut :l final bonus if its position at the bank warrants it doing so. The company has always adopted that principle from its inception. The bonus is certainly not determined by the balance in the appropriation account. That balance is only a paper balance." Judgment was reserved.