Kansas Wheat Growers Ass'n v. Schulte

216 P. 311, 113 Kan. 672, 1923 Kan. LEXIS 191
CourtSupreme Court of Kansas
DecidedJune 9, 1923
DocketNo. 24,539
StatusPublished
Cited by38 cases

This text of 216 P. 311 (Kansas Wheat Growers Ass'n v. Schulte) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kansas Wheat Growers Ass'n v. Schulte, 216 P. 311, 113 Kan. 672, 1923 Kan. LEXIS 191 (kan 1923).

Opinion

The opinion of the court was delivered by

Harvey, J.:

This is a suit for an injunction by the Kansas Wheat Growers Association against one of its members. A restraining order was issued upon the filing of plaintiff’s verified petition. Upon the hearing for a temporary injunction, evidence was presented, and the injunction denied. From this ruling the plaintiff has appealed.

The Kansas Wheat Growers Association is a cooperative association organized not for profit and without capital stock. Its incorporation is authorized by chapter 148 of the Laws of 1921.. The statute states the purpose of such corporations as follows:

“In order to promote, foster, and encourage the intelligent and orderly-marketing of agricultural products through cooperation and to eliminate speculation and waste; and to make the distribution of agricultural products-as direct as can be efficiently done between producer and consumer; and to stabilize the marketing problems of agricultural products, this act is passed.”' (§1.)

The act provides, that twenty or more persons engaged in the-production of agricultural products may form an association to> engage in any activity in connection with the marketing of the agricultural products of its members. Under the terms and .conditions of its by-laws, the association may admit as members persons engaged in the production of agricultural products only, including [674]*674lessees and lessors who receive part of the crop as rent. The statute provides the terms of the articles of incorporation and for amendments to the charter, and requires each association within thirty days after its incorporation to adopt by-laws not inconsistent with the statute, and sets out what some of the by-laws must be. The affairs of the association are to be managed by a board of directors who may be chosen by districts, and their election, and also the election of the officers of the association, is provided for. Section 16 of the statute reads as follows:

“The association and its members may make and execute marketing contracts, requiring the members to sell, for any period of time, not over ten years, all or any specified part of their agricultural products or specified commodities exclusively to or through the association or any facilities to be created by the association. The contract may provide that the association may sell or resell the products of its members, with or without taking title thereto; and pay over to its members the resale price, after deducting all necessary selling, overhead and other costs and expenses, and other proper reserves; and interest not exceeding eight per cent per annum upon common stock. The by-laws and the marketing contract may fix, as liquidated damages, specific sums to be paid by the member or stockholder to the association upon the breach by him of any provision of the marketing contract regarding the sale or delivery or withholding the products; and may further provide that the member will pay all costs, premiums for bonds, expenses and fees in case any action is brought upon the contract by the association; and any such provision shall be valid and enforceable in the courts of this state. In the event of any such breach or threatened breach of such marketing contract by a member, the association shall be entitled to an injunction to prevent the further breach of the contract, and to a decree of specific performance thereof. Pending the adjudication of such an action and upon filing a verified complaint showing the breach or threatened breach, and upon filing a' sufficient bond, the association shall be entitled to a temporary restraining order and preliminary injunction against the member.”

Other provisions of the statute need not be specially noted. It is sufficient to say that the statute is an enabling act authorizing the incorporation of cooperative associations among producers of agricultural products for the best interest of the membership of the association and without profit to the association itself. -

This plaintiff was organized as a nonprofit cooperative association under the provisions of the statute referred to for the purpose of marketing wheat, and adopted by-laws in harmony with the statute. The by-laws provided, among other things, for the creation and maintenance, in each district and central localities, of informal local branches of the association, which should have their own [675]*675officers, who may attend meetings of the board of directors and act in an advisory capacity. There is an application for membership to, be signed by the members, which recites that the applicant has read the articles of incorporation, by-laws, and association agreement, and standard marketing agreement of the association, understands and accepts them as binding upon him in all their terms, and by which he agrees to perform all the obligations of the by-laws and marketing agreement. There was also a separate marketing agreement by which the member agreed to sell and deliver to the association all the wheat produced by or for him, or acquired by or for him, as landlord or lessee, during the years 1921, 1922, 1923, 1924 and 1925, except such as he might retain for seed to be sown by himself or to be sold for seed direct to wheat growers. The marketing agreement contains many provisions in accordance with the general plan of the organization, and provides that the agreement is one of a series, generally similar in terms, comprising, with all such agreements signed by individual growers, one single contract between the association and the growers, mutually and individually, obligated under all the terms thereof, and contains these provisions:

“(a) Inasmuch as the remedy at law would be inadequate; and inasmuch as it is now and ever will be impracticable and extremely difficult to determine the actual damage resulting to the association, should the grower fail so to sell and deliver all of his wheat; the grower hereby agrees to pay to the association for all wheat delivered, sold, consigned, withheld or marketed by or for him, other than in accordance with the terms thereof, the sum of twenty-five cents per bushel, as liquidated damages for the breach of this contract, all parties agreeing that this contract is one of a series dependent for its true value upon the adherence of each and all of the growers to each and all of the said contracts.
“(b) The grower agrees that in the event of a breach or threatened breach by him of any provision regarding delivery of wheat the association shall be entitled to an injunction to prevent breach or further breach hereof and to a decree for specific performance hereof and the parties agree that this is a contract for the purchase and sale of personal property under special circumstances and conditions and that the buyer cannot go to the open markets and buy wheat to replace any which the grower may fail to deliver.
“(c) If the association brings any action whatsoever, by reason of a breach or threatened breach hereof, the grower agrees to pay to the association all costs of court, costs for bonds and otherwise, expenses of travel and all expenses arising out of or caused by the litigation and any reasonable attorney’s fees expended or incurred by it in such proceedings, and all such costs and expenses shall be included in the judgment and shall be entitled to the benefit of any lien securing any payment thereunder.”

[676]

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Cite This Page — Counsel Stack

Bluebook (online)
216 P. 311, 113 Kan. 672, 1923 Kan. LEXIS 191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kansas-wheat-growers-assn-v-schulte-kan-1923.