CO-OPERATIVE DAIRY COMPANIES.

Taranaki Daily News, 22 April 1919, Page 3

CO-OPERATIVE DAIRY COMPANIES.

RELATIONSHIP WITH SUPPLIERS,

A acse of considerable importance to dairy companies and suppliers was heard at Palmerston Magistrate's Court, wlien the Whakaronga Dairy Company claimed from J, B. and A. Cooper, farmers, Whakaronga, the sum of £2O, representing a call of 2s on each of 200 shares made by the company on its milk-supply-ing shareholders.

It was contended on behalf of the defendants that they had been perfectly willing to become milk-supplying shareholders, and had supplied milk till, a.s counsel put it, they had been absolutely driven away by the action of the directors in deducting one penny per lb on butter-fat supplied by them until such time as they would consent to sign an agreement binding (hem to supply the Whakaronga factory. The defendants were technically ' non-supplying shareholders, and were now sued as such, but they had been prevented from continuing as suppliers by the act* or the directors. When the directors persisted in making the deduction the defendants discontinued supplying the company. They had originally taken over the share's from the party from whom they had purchased their farm. The company had put through the transfer of these shares to the defendants without making any mention of their having to sign an agreement binding them to supply "the Whakaronga factory for a certain term. The defendants were now supplying Nathan's factory, and the shares in question were absolutely unsaleable, They were not entitled to dividends and they got no benefits from them On the grounds of "equity and good conscience" counsel submitted that the defendants should not be made to pay the calls on these shares. Combating this argument, Mr. Fitzherbert said the defendants had refused to carry out their obligations. There was no reason why they should be treated differently from other shareholders ami exempted from signing the customary agreement.

In giving judgment for the plaintiff his Worship commented that the whole basis on which co-operative dairy companies would carry out their operations was that of assured supplies of milk. In the ease in question, on the formation of the company, the shareholders had found it necessary to give nn undertaking to supply all their milk to the Wlmkaronga factory. The defendants had bought the shares of their own fre•■ will, and there was no reason why they should be placed on a different footing from other suppliers. They must meet the calls made on account of the' shares they held. / ,