OFFICE OF Ti-iE ATTORNEY GENERAL OF ‘TEXAS
AUSTIN:

. 'icaorsble C&o. Ii. QSm?parb,Psy, 2 J- 

## 16

:icnorable

Goo. Es.3lleppax&Psg33

%‘h%coEtcn l6 to be dellvemd to the Ass+. CiSEiQn u1thout anj ~rovzslon f3P its Pet;lm; the Asscclatlon ln auth~rlwd to have fib cottca baadIed, pmwssed md stored; it is nut'korlzed to 

### bomov nunsy oa, pool, sad aoil tba cotton; Ln other woti6, Lb Asaoelatlon 16 authorized to exerci,se all aota of onmrship cm%2 th.6cottcn 

### after Its 

### delivarg,subject only to tae Vii)thud pmsoribed COPd.eteraFTllagits pice.”

# I
17 /

lkmorsblo (30. X. Sheppmd, Pajgb4



### A~~oolatlm at 

### the tlse 

### of the Cellrsr7 of hi3 p&aduce and desp1.t~the fcot that the agreemeAtvlth t!! &3soo5.atlonla ccuchsd in tswa of “salr end delivs;r*3,” the SupremeCo& has held that contrsota of this klzx3do not involve an “absolute sale,” a%d *has said Lbt the Asaooiatlon aots xcerol~ 2.3a selling. agent sor its ri?erdbeTa. Thus in f3X38 Certified Cottonased areedors’ AJmoclatlcmV. Aldr1dge, 61 3. Y. (2d)

‘79, tb Court said at pp. 824333

WI0 oon8t;ruotioA of this CoAtraot osy be based upon ore oardlnal rule; viz., What VW t?leIntentian of the partlea thereto vhexloonmw8d in cmneation vith the hiszorg **0r** the class of legislation and the puqmsea sou&xt to be nttsined? that is the natme of the title by vhLch an J88OOihtiXl holds proprty’ vhlch it la narkshlsl3 for its hmnbers? To Vhat CZ’tentdo%8it act in its OVX' Corporate r:zht aid to w&t extent Is a fZduc%aq cap city? 9x3 l.At?ultlonof the parties to J contreat vlll oontml. If necesaaq?, to g1ob effoot to the Intention of the ptwtier courhl will brush saida mere foamand e.xaMne the instmrmentaa a vhols), in the 1-t 017 the naturs and csxoumst8ncesof ths tPans~tloll, w1t.b
a villv of ascertaining the true int8Atlnu of the paW.es esFcw%d in the instrumant. CoO~eMtivs zlil&rbting a8soaletloAa and t.blr o_p9ration8have brought th8l.r share of mzf groblwm

, TPx9y

have taken thsFt*place IA the bua~~ess vorld, rrnddeslox-a, mmf?~~tu~bre, cr.0busk~e88 m%n in @A@'- XY wlp;r tb%iP cca;rrsodditles.The low and t!z%contracts srecutad tkemmnderauthorize the oraociatian to rcnrk0kend se11 ‘co ayloultural prcdmtr of 1ta Denlb%r8. The asaoblatlozlIS zads the tigSAtOf 1:s WSFI~~I'S t0 -S th8fP >FO&IOtS; it is given the autioritj to borrov nor?q on the prodzrots and to pledge 8am an aeourit-jy Sor ails of Ita obllgatlona, It also haa thb rl$t to diotrlbute the noney so box-ored a8 adva~css equitably amongthe 

### b--ceders ia ?coportion tp tbelr delivery to the assool3tlon,

. J:

m.noraSle Gee. II. Seapazd, page 5

OSsay us4 6iayprt tbreof in it3 busbmss oper6tioAa. The tlttt.4 of the ccaimcdltleaIn pl.acsd Sa the as8oalatlon to carry out thesfi yarpor4s. The authority 0an5wred upon t&a as8ool8tlm Is A4c4saapg for it to operata erzdfunction auco4safully~ It ha8 no ss8sta axcepk the canmoditles dellvwred to it by the msmbsssof the aaeooiatlcxa. It i8 8 AOAstock ti nonprofit ooncern, and ltmunt depccndSolirly for its existonce upon the contmiota tie tith its ambern. '30acoa@.Lsh this ad, the I,qs$slotum has announcedthat ftuusth8Adls 0Aly th4 psoduota of :tslR4mbms, 

### and will not couqttma~ce a dItied a~ervice ‘bypotitt* it to h8Adlo th+ produoto
or noAuleIabers.
'The afd of the gwt f"2n*nclsl instltl.ltions of tzIt3

country in essential to the
auccesa oi these nsaociations. The sasoaiatlonnust have fln6nof3l aasI.stanoe before It can fonotfon, Fmdthe ageA musthsve paver to pool ?mdas11 tba ocasxx3lt~.w it osfosa SOSsale or plsdgs Sara4a8 34cur4ty. 30s “si4sa pusperer there 18 no 1lalt8t1cn 65 to the suthosltq conferred uponth0 s3sociotian. ThwSaxxiess33 a gsoup Som th4 a~soo?atfon, 6ucjsppolnt It to aot 8a thalr aelmlg qe+nt. TheJ tun OYDSt0 th0 8SSO- 

### ~lntlon thefs coansoditl.esto be pooled zmd Sold sn the z#rket to tb beat sdvantages. Sov(~ver, the 0PSicera 0P the ssaoolation have the oontsolllxq deci~1or.a as to when a?&hov the asle Shall be EL%%. %-I.28 p4l~ nits t.343

assooL3tlcm to glace the oomaodlif%8 in iia hands **for SSl4**  **Vhan** the **cOndf** tlms ore Ssvorable, and arevents a dzqkg **on** the market of commoditisl for vhLch them la no demand. 'by t% tams OS the oontmat the grover hss surm~oxwd control over the o&e of hi3 grxhct, .Szdt&F&y to this 4Xt4Atha3 

## 18

## pw 6

¶.laportant

element of

.._ ..m

## 20

lnten!Aox.iof themmben tocreateat2wecooperative markatZ.ii assooiation, under tlio potters tuuaueralxxlby inu and by tSe cootnatrr, t-2perfarm certain aervicsa exolusllrelg for its members,and to hold l-3 tao rsos or t Isltentlon that tha delivery of the need co t?ze aosooFation was an absoluco aa30 would aestroo It as A co-oporatin Ixum!Cet~ aasoufation. The menbe~~hsvs oonrerrttd on this cusoolatlcll,
es ttrsitreelU3lg a@&, such title to the cotton3eed vzth ~lwlary povem to handls and bie,pore of aamo,but the sssoal3t’%onbarrdIes tlas,procoeds theroof for the ‘behsflt of itseU axl its

mt3a~ra l see sohlBon Y. staple cotton cw-op. Asa%, 142‘mar. 312, 107 so. 2; T~bCbCCOGrimers* Cc-o& Ararn wwSow%, ~185 33.C. 255, Xl7 5. 23. 174, 33 

### A. L. R. 231; ~Darpartnne V. ihttsr Ii111Z'mit iPnr9m' Asr‘n, 1228%. 138, 119 A. ll61 Phar:Co. v. Ss1e.m F-t Won, Icl3


### or. 514, 201 P. 222, 205

### P. 970, 25 h. L. 33. 10900; c~hdga~.uv .SBV~~W r0r abma;?3r, 1923, p* 91.# (Xi@aals added)
Sootion 19 of Arc;Zola VIII of our ConsWtuutlnnpro.. vlder 3
“arm produots in tha t?andaOf the prs ,ducer, snd fl3ullly aupplled for hgpe &LJId iparn use, a.roexempCfrom all taxatiaz.83zM.l othe.rvlss direated by a two-thirda vote of all tie iaf#d%WB @?b?diOd tQ both hOUB%B Of the L.CQiSbbturs."
Fl-z?a L.egislaturo ha8 never by e tuc-th%rda vote of all srerPbers OP bid21 hou~fi~ 3.mpo~eds tax on rim imnhcts in the handr 0r the producer,

In vit!in of t5a owst~otlm giV#Zt by OUT CoUrta to arranomento of the tgpe mds~ ~onsldaration, ve feel that t%e p?easlts tivolv9d irt Lao hstsnt qumJtim a.re still *ran%pmducts in the hsnde of the producsr~ withIn the me- of the &wre-quoted prorisiorr snd a3 such my not be tcwed. The obvious purf;we 0i seeti0n 19 WBB t0 gmv=t th ii320dtion 0rHonorable ~0. H. &sppwd~ ~a~3 8

3 tax on ,40x-u

producta vhen swh tax vould beti dlmmUy upon the producer of such products. This purpose cannot be accompl3.shedif ttuea are levted upon goods held aa ars the peanut-s i.n the instantaituation, for the burdenof such taxes vould inll dirmtly qnm the ~raducem of such goodal. Coneaquently, notuithrt~ th3 faut thst lags1 .tltla to the peanuto Is vsstsd in the corporation mther than .tn t&3 pPDdu~~)rs,you are xwspectfully advised that tha mwmto are r,ot subject to taxation axidyour westion ia ivlsversd In the nega?civa.

Wua)tU that tha furegokqx sntisfactor%lp pour i.lquFrJ, v9 -Peaah

YOUM very truly ansY3rs