MILK BONUS DISPUTE.

Stratford Evening Post, Volume XXXIV, Issue 81, 30 November 1912, Page 8

MILK BONUS DISPUTE.

FARMER AND ELTHAM CO-OP

An interesting case was hoard at the Eltham Magistrate’s Court on Wednesday before Mr Ken rick, when •]. Mehrtens, of Cheal Road, sued the Eltham Co-operative Dairy Company for alleged bonus on last rear s. milk supply. . Mr McVeagh for the plaintiff said the latter hiytl been supplying the company with milk for the last nine years, holding 45 original shares, and had at the request of the company taken out 20 additional shares. Hf made Ids shares over to li;s sons, anti ceased to supply on 20th May last and is now supplying the Ngaire. In the course of last season plaintiff sup plied milk, hut there was a cla m for Oil 19s 5d which had not been paid. On 10th September last a letter was sent to Mr Mehrtens requesting him to take np 66 additional shares. Their contention was that the plaintiff commenced and continued to supply under the original articles. Mr Spence, representing the defendants, sard the supply was stopped or 20th May, while there was an amended article on the 11th May. Mr McVeagh said that - article 8a was a permanent open offer. He brought evidence to show that a resolution could not be made retrospective. His client was not present at the meeting at which the amending article was passed, of course the article was not in operation before the 11th May, and he did not tlrnk it was after that date. The company had never paid any dividend on share capital. The complainant supplied 195.9671hs of butter-fat, or 17,000 gallons of milk, and that was more than sufficient to qualify him for butter payment.

Mr Mehrtens then gave evidence in rorrohoration of his advocate’s statement.

Mr Spence, or Stratford for the d'ffenc 0 sivd his friend _Mr J- McVonah claimed that • plaintiff shoulo l™i3P.mc share for every 300iraMj™; but that was not so. He should hon. one share for every 100 gallons., ~ Mr H. J. Barnard, secretary ot the Eltham Co-operative Hairy Company, eave evidence that toe plaintiff In received notice of the . meeting at which the special resolution had been passed. In answer to Mr witness said not all of the saarehoklprs had taken up the add tional shares IF any shares were forfeited they went to the benefit indirectly to the. shareholding suppliers. Answering Mi McYeagh: They had paid some of the suppliers that" were short in thenshares, who had left the district 11 fid). I By Mr Spence: There were others who had been refused payment on the same grounds as plaintiff. Mr H. D. Forsyth, chairman of directors of the defendant company, win the next witness. In answer to Mr Spence he said the. company might or might not pay supplementary bonuses, hut as a rule they made a supplementary payment in accordance with article Ba. In years they dealt with article 8a but this year they dealt with it as amended. In Mr Mohrtens’ case lus payment would have been £23, 15s 3d, had his shares been 131. They paid him G 5 one hundred and thirty-firsts of the bonus, or the milk his C 5 shares represented i;i the wording of the article. _ In an swer to Mr 51 cI each he _ said they contended that they had paid plain till equitably because he had not held sufficient shares to qualify for the whole of the milk supplied under the amended article. There was no such thing as any special contract to make any payment to any member for tnc butter he supplied during the year. L'iiey did not consider themselves bound by the article to divide the no, urefits to the whole of the suppliers To the host of his knowledge the share if all suppliers on the same footing is Mr Mchrteus had been forfeited. Ccrta’n ones had been paid, but that was under special circumstances. He admitted that he understood they had nid some. His opinion was that there were some who had been paid in full, hut those who had been paid in full had left the district.

Mr Spence declared all this was ir ■elevant, but Mr McVeagh said if hey paid these members the others

were victims of injustice. Witness said there were shareholding who were not suppliers. Having ia interest in the t-rupply yet they had lower to pass resolutions, but in this 553., however, that could not have icon. The object of increasing the mmber of shares was to provide '■ d for the erection of cheese factories nd cheese plant. There was no under lauding that a shareholder should ti. imseif to the company for ever. Mr Sp ence said they were claiming| m what they had not got: on shares drey had not taken up. Mr McVeagh: No. He declared they were claiming on butter-fat supplied ,Ie submitted that he had sufficient (■•hares under article Ba. Mr Spence, in stating thc ( case for the defence, explained the working ;f a dairy company, declaring that the company could please them solver •is to what they paid. On dune <3oth the directors .met and decided what supplementary payment or bomisthev should pay. “They said,” continued .Mr Spence, “ ‘now,’ Mr Mehrtens, there is an article stating how much you should hold, namely 131 shares, whereas yon only bold Go shares. Now, as you only bold Go shares, we can only pav von Go one hundred and thir-ty-firsts of the bonus.’ ” Or he might put it this way: “The company say yon have supplied 19,000 gallons ot milk durum the financial year ending June 30th.“’ You hold only 65 shares .in the company. In ficcordniico with article Ba, as amended, yon should_ hold 131 shares. Now we are declaring a supplementary , payment or bonus of .i 7d per lb for all‘ the butter-fat supplied during the last year. \ou must either take up the deficient shares, namely, GG, to justify your getting the whole of this bonus, or else we will only pay you the proportion thereof which has been justified by the shares you hold, i.e., 65 one hundred and thirty-firsts.” The company, he said, were fully justified in saving that to the plaintiff. His Worship said the next thing that had to he proved Was that the amended article should take effect. Mr McVeagh submitted that plaintiff had not brought this ease as a shareholder hut as a supplier.

Mr Spence submitted that his fr ond had no rights under the articles except as a shareholder. Mr McVeagh did not acknowledge this.

Mr Spence contended for the defonoo that there was no contract vyhatorer for nayment of bon us. hinder the amended articles t\lr Mehr.tens was deemed to he saying that lie should nnt he entitled to any proportion of tlie profits where Ir.s shares were not supported hy XoO gallons of milk. According to the Companies Act he was deemed to have signed swirl solemnly sealed these articles. When Mr Mohrtens joined the company he knew that

a proper foil of three-fourths of the ■shareholders could enforce upon shareholders a rule or regulation and he would have to submit to it. _ He tMr Speneo) contended in _ the first place that the amended article was not retrospective: that the directors might or might not declare that dividend at the end of the year, and in the second

place that this was not a retrospective article that it merely ind rated tin: method upon which a supplementary payment was to ho arrived at, while in too third place that even assuming that it was retrospective the statute made it cn and they would not alter that. The question that plaintiff sued as a creditor as apart from the articles was out of the question. Aleo in accepting the sum he had received he had, unfortunately for himself, waived his rights, as'he (Mr Spence) was prepared to prove. Mr McVeagh said with regard to the right to sue as a creditor plaintiff’s position was that lie claimed as a suppi er, and not as a shareholder, and ne was entitled, under article Ba, to a certain payment, holding a sufficient number of shares.

fhe Magistrate reserved his decision, stating that- it was a case to which lie would have to give some consideration. : —JMtham Argu».