A DEAL IN BUTTER.

Taranaki Daily News, Volume LII, Issue 49, 23 March 1909, Page 4

A DEAL IN BUTTER.

'THE RECORD PRICE-AXD THE , AETER.UATH. i SUPREME COURT PItOCEEDIXGS. \ A case of interest to dairy companies . and to the. dairy farming community * generally was heard in the Supreme j Court yesterday before His Honor Mr. ', Justice Chapman, the litigation concern- ] ing the much-published sale of lot) ( boxes of the Mangorei Hairy Company's ( butter in August last at the price of is 4'/ 4 d per 10. The case was one in | which the Mangorei Co-operative Hairy . Company sued J. B. .MacKwan and Co., on a claim for .tllu:)- His ad damages for , breach of contract. The loss was occa- ', sioncd, it was claimed, by tile failure ol r the defendants to carry out an agreement to purchase, ISO boxes of butter from the plaintiff company at Is 4;/,d , per lli. This should have returned to the company .toliS los, but owing, it was alleged, to the breach of contract, the butler fetched only .C4U3 Is id, .Mr C. P. Skerrett, K.C., with him Mr guilliani, appeared fur the plaintiff, and Mr U. llutclieii lor the delendanls. After.outlining the nature of me evidence he intended to call, Mr Skerrett said he would submit that the parties were bound by the verbal contract ol sale, and nut by defendant's written confirmation of the purchase and sale. There was no justification for the defendants' refusal to accept Uc Duller, as it would be shown they had done. J.. W. darner, sectary lo the Mangorei Co-operative Hairy Company, Ltd., suiieil that on Blh August last Mr Arthur -MacEwan, representing the linn of J. 11. .MacEwan anil Co., interviewed the dairy company's directors at their meeting, and asked if they couiil sell him any August butter, saying that he required l.iU boxes, and asked the price. The chairman said the price was Is iy t d per lb, and he replied that lie though! it 100 high, but lliat, knowing the company had already bad an oiler for the nutter at the price, and that the butter was good, lie having previously dealt with it, he would accept the oiler, lie then asked that the milter „.oioii lie made fresh, and delivered as made, adding that instructions as to shipment wouid be sent from the Wellington oll'ice. Witness mentioned that as they were completing an order of OD boxes of unsalted for a Melbourne house he was airaid tncy would have to include 27 boxes of butter made on the last days of July. Mr MacEwan, in driving the bargain with the director,, urged that as this was a record price the directors should concede to him ttie usual charge of sixpence a box for freezing and grading, as that amount would be saved. The chairman replied saying the batter was worth the price. Hie bargain was made then, and was entered in the minutes. A rough minute was made ill the time, but was destroyed. The minute-book would be written up on the .Monday morning, 10th August. Tiie miuute-liook was put iu, and the witness swore that the entry concerning the contract was an exact copy of the roughly jotted note.j)l the proceedings, lie remembered receiving a written continuation of the contract from t.*,e linn. He did not notice that it omitted mention of the 27 boxes of July butter. 1 but he, did notice tin- inclusion of the words "lirsl grade." lie took no notice of it, for they had had large dealings with the Jinn and had had no trouble in settling. In the event of lmltcr being graded it was usual to grade it at port of shipment, it was usual I'or factories to sell winter output without grading, and this company sold the whole of last winter's output to various purchasers without grading. The defendant linn had purchased tile previous June output without grading. The next meeting ot

directors after the Bth August was on .Itli September. On Wednesday, 12th August, witness was notified by MacEwan that a shipment of butter was wanted the following day. He caused all butter on hand at the factory lo be branded "J. 11. il." over "W," 'and to be delivered at Xew Plymouth railway goods shed before 7.-1.) on the morning of tin- 14th, the defeixiaiits hf-rlng made .arrangements for its shipment by that day's steamer. Thirty-seven boxes of butter were delivered, and consigned to the defendants at Wellington. It had been already understood that there wils no grading included iu the contract, and there was no request made for 1 lie grading of that particular shipment. On 17th August 44 boxes were delivered at the railway goods shed, under instructions from the defendant company. After this delivery, Mr Robertson, ol the defendant company, interviewed witness, and said the first shipment of but-

ter had been refused by their client, on the ground that part of it was July make, and that it was not first grade, and that they had sent the butter to the meal export stores in Wellington, where it was graded second grade. He said he understood that the butter had a "turnipy" liavour. Told Robertson then

that the company had Ho liability with regard lo grade, according to the contract. Robertson suggested Hint the ,ccond shipment, of 44 boxes, should be graded at New I'lymoutli, and he rang up the (iovernment grrtdcr from witness' office, and asked him if he could come

to (own iiml (trade tin- Int. iit the rnilwav goods shed. The grader, .Mi- Johnstone, was quite willing, lint tin- butler was in tin- trucks, and (lie railway iiiilhorilics refused l„ unload it. lie wrote to MacKwan and Co.. iuforinhg them that the purchase and sale hail l.c-i'il aiaile without rcferenee to grade, that the i|iianlitv -old included 27 boxes of the .lnlv butter made within twelve days of the date of the sale, and that the defendant's representative had reipiesteil and been refused an allowance of the lid per hox .saved hy the fact, that the hotter had not been graded. Hcing willing to assist the defendants, he made an oll'er to aeeept a reduced price for some of the butter. Subseipieiillv he received a letter from the defendant linn's head office, statins that tin- butter was not of the ijnsilitv reipiired, anil that it included some of .lnlv make. Tile contract would be cam-cllcd. The butter held in cool store in Wellington, anil any further shipments would be at the plaint ill's own risk. On Tuesday, lStli August, witness and Mr .Morton, chairman of tin- dimtors, met .Messrs .MacKwan anil Robertson at witness' of-liee. Mr .Morion refused to accept any liability in respect, to grade, as the terms of the contract were that the butter was to be delivered fresh, and made a remark that had it, not Ik-cm that it was a falling market there would probably have been no complaint as to the quality. They replied.

-No." and that it was always at 11 time like this that their client's would endeavour lo liml a loophole to Upset a . contract. I'pou objection being raised I to the .lnlv butter witness told Kobcrtson and .MacKwan that it had been 11111 de 1 ipiite clear at the time of the sale that there would be 27 boxes of duly butter. On 24th August 54 boxes were graded 1-t grade at Motiiroa. lint MacKwan and Co. refused to take delivery. Oil 271 h August l"> boxes were graded Ist grade, and delivered, notilicd to the defendants on Unit date, and the defendants refused to lake delivery. On Ist September an arrangement was made that the (ill boxes of butler should he disposed „f bv defendants without prejiulieo. All the butler graded at New ■ ■lviiioiit.li was graded lirst grade. All that graded at Wellington was second grade. Cross-examined: lie could not -ay if liili boxes of August butler w:f on'lhe Ist September graded second grade. There was a considerable ipianlity of ungraded butler in the -lime purchase by defendants from the Mangorci Company. There was no sale note prepared in reference to (hat transaction. It was not a fact that butter intended for New Zealand trade was not frozen. Nearly all of it was frozen. His company had not paid anv cool storage fees for'a number of years. The Covcrnmeiit made 110 charge for grading; it was included in the charge for storage. The price of Is -l'/,il was a record price as far as he knew. |

Kohcrt Arthur .Morton, nf Kejuont Village, farmer, and cliiiinniiii of ilii,-,--tors of tin; Mangorci Dairv Co., gave evidence, in- corroborated the evidence of (lie previous witness as to 11n- manner of tbe purchase, anil said that the buyer, after demurring about the pviee asked, said "As T'm a hit of a sporting man, I'll lake it. even if I've gol to eat it myself." lie continued the request of the agent for a refund of the grading charges which were to lie saved owing to the fact that this line had not to he graded. Witness bad promised that (he directors would consider the reipiesl. and they decided not to grant it. lie remembered that at the conference on ISth August, Robertson remarked that at such a time as this, with a falling market. Ihev bad to look for trouble. The market, was falling. Butter exported was always graded at the port of shipment. Jusl before (his transaction a shionicut „f unsn.lt el but lev ordered bv Mr. -T. It. Scott for Melbourne was graded first grade at Xew Plymoulh end second urarte at Wellington next dav. If might be that this was due to I be butter, during the winter season, being shipped as ordinary cargo and with ordinary cargo, and not in (he refrigerating chamber: or (o a difference in the grading standards. The butter sold to Messrs MtieEwau and Co., was

a good class of winter butter. The standard of ijualily was always lower in winter than in summer butter; but the grader's standard did not change. It was not easy to get such a good iiavour in the winter, chielly because tile milk-suppliers were feeding their cows on artificial feed or on heavy green feed. Witness did say to .Mr A. MacEwan, "U it not a fuel. Mr. MacEwan, that lint for a failing market this question of quality would never have been raised!" He answered, "Yes, that is so." Witness then said, "If on the other hand, butter had gone up to Is (id, they would have been glad to have taken if!" MacKwan answered | "Yes." Cross-examined: A considerable amount of butter in the -Tunc shipments, sold to the same linn, was not graded. June butter was all store butter. All butter going into the freezing works at Motnroa was graded. In this sale the ( lpany agreed to deliver the best butler it could nrodnce at the time, and this was done, lie could not give ull'hand an instance of second-grade butter being delivered as lirsl. and a halfpenny per pound being allowed. He admitted that (lie company had lllli boxes ol August butter graded as second-grade, lie would mil. wiv lh.it the eompiinv could not, have delivered 'loll boxes of first-grade August htnicr to delcuuants, if graded at Sew Plymouth. Exclusive of the all hoses supplied to Mr. Scott, only li!l boxes of the companv's August butter- was <rradcd first-grade at New Plymouth. II was a very unusual thing for the company to make second-class butter, lie knew of these lllli boxes, hecaused he hail refreshed his memory dm--1 ing to adjournment. I'.v ■• f.0.b.. Xew Plymouth" was meant delivery either at the wharf or at the freezing works, and all charges defrayed by the shipping company to the steamer's side. •• Turnipy" butler might be first-grade. To Mr. Skerrett: Turnipy butter might be first-grade, I'or instance, on August , 24th there were 34 boxes of MacEwan and Co.'s contract graded first-grade with SSlApnints. the grader's note being •'flavor, im-linnl to be strong and feedy, texture greasy, but first-grade." Tie diil not sec the defendant' confirming .1 letter of Hllli August, until alter this dill'icultv.

Ceorge Marsh, farmer, of Egnmnt Village, and a director oi tne piamtilf company, said lie remembered the meeting on Sth Align,!, and the arrangement entered into iK'lween Mr. A. MacEwan and the directors, lie conlirined the account of the interview already placed before the Court.

Cross-examined: It was distinctly understood tliu I the butter was not to be graded. William Uncock, another of the then directorate, corroborated Ibis evidence. He particularly remembered the agent asking to have a shipment early iu the following week, and the manager, who was sitting at the table, said they already bad butler in boxes at the' factory. Air. MacEwan asked if it was good, and he was informed that it was part of the July make, but good. Then it was arranged to include it in the first shipment, it was specifically stated Hull there would be no need to send the butler through the grading works. To Mr. Ilutelieu: The butter was up to the usual standard, lie didn't inspect it. anil didn't even see il, lull he ftle butter turned out at the factory in August.

This closed the case for the plaintiff*. iMr. Hutchen. in opening, said the defendants relied upon their letter of August 10 confirming the contract, eon tending that as that letter was not. replied lo or questioned' (lie plaintilVs admitted il, contents as correct. He quoted a" authority on his contention. Arthur MacEwan. of Xew Plymouth; of the ilvtenilant firm, stated that in buying butter his linn bought on Hie basis of first grade. He remembered negotiating ivit.li the .Mangorei Co.'s directors for the purchase of 101 l boxes of August bulk butter at Is C/,d per Ih. f.0.b., Xew Plymouth Ihrcakwali"'. The month of July was never mentioned. When the contract was settled, his linn

at Wellington has sent, forward no shipping instructions. The parcel was bought, under instructions from Wellington. He assumed that the butter would be for local use, calling for weekly deliveries. It was assumed thai Trie first shipment would need to be sent by the first following steamer, and he asked, nfler completing the contract, how hiucli (lie company could send forward by the following' Tuesday. The reply was that there were already 27 boxes ready. There was no mention of July' 'butter, and nothing was said about sixpence a box being allowed. 11,. suggested that in the event of any direct shipments being made, the company allow the lirin Ihc rebate of any charges saved 'by butter not passing through the works. The directors refused.

This request was made upon the assumption that the jila in tiffs were to hear the cost of grading or storing at New Plymouth. It was not a gi nil rule to freeze butter intended for local coiisuinirtion. By the method adopted of despatchiii" the butler there was scarcely sullicient time allowed for " Cro-s-examined by Mr. Skerrett:

There was no direct reference to the quality of the butter at the interview, but it wa, always understood iu a purchase, unless otherwise mentioned, that the butter was to be first grade. Second-grade butter was purchased

sometimes, of course. He told the direi'lors Hint Ibis butter was purchased for local consumption. According to ordinary practice, butter purchased for local, consumption was graded. Tl depended on the source of supply, and the arrangements made. Butler from the. "eoi»C' wns always graded; that from Xew I'lymoutli. sometimes. Tl; was apparent in this case that butter for direct delivery would not lie graded. Thev did not freeze anv butter that was' not gradcil. They did not. to his knowledge, buy butter tor consumption iu the colony, and have it frozen.

Then does it not follow thai when liutler is bonglit by your firm for local consumption, mid not for shipment abroad, vou do not require to grade il ? - Witness gave two hesitating answers, and then said it was the custom of the firm to freeze liutter purchased for local consumption. At least, they did thai here, lie didn't know what 'thev did in Wellington.

Cross-examination continued: The inn Iter of Scott's contract for 5(1 boxes of August butter was mentioned ill tlie meeting. Tl was ipiite understood tint 27 lioxck were in stock. He -was not given to understand thai these boxes' were not of Angus! nuunifiu-turc. Ife would have obiecti-,1 to butter made in the last week- of duly, had he been I old of the intention to include it. Thf-v wanted fresh hultvr. lie would not sav the directors' testimony was i'nlse. ftit Would say tliat duly butter was no! meiilioned In his hearing. His firm was in Aiifrust selling May-dime Iml.tcr hought .from this company. Air. darner did not tell liim before (lie meeting, ami 1„-did not know, that the ii>l-,iinl ill's had builer on hand. HisMrm luul not replied lo Ihe plaintill's' letter oil 2lllh August. Thev had not wrilteu anv confirming letter in reference lo the purchase of flu- Muy-.lnne liutlcr from I In- conipanv. The directors for the lir-l -diipmcul were gi\cn after Ihe forwarding of til- letter'continuing the contract. Witness was | quite aware (lull the .111-st. shipment of hulter was mil -.railed, and he chipped

He-exiiiuincil: Under graded lor local consumption was charged onlv twopence a box at the Motiiroa Freezing Works.

At ll.il p.m. (lie Court adjourned (illId o'clock this morning.