Case Name: HARRELL v. CANE GROWERS CO-OPERATIVE ASSOCIATION
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1925-02-27
Citations: 160 Ga. 30
Docket Number: No. 4171
Parties: HARRELL v. CANE GROWERS CO-OPERATIVE ASSOCIATION.
Judges: All the Justices concur, except Gilbert, J., absent for providential cause.
Reporter: Georgia Reports
Volume: 160
Pages: 30–74

Head Matter:
HARRELL v. CANE GROWERS CO-OPERATIVE ASSOCIATION.
No. 4171.
February 27, 1925.

Opinion:
Per Curiam.
1. The title of the eo-operative marketing act (Acts 1921, p. 139) is sufficiently broad to include the provisions of sections 3, 4, 5, 15, and 23 of said act; and for that reason said sections are not void as in violation of article 3, section 7, paragraph 8, of the constitution of Georgia.
2. So much of section 15 of the acts of 1921, referred to in the preceding division, as seeks to authorize the by-laws and marketing contract to fix liquidated damages and to require the members to pay all costs, premiums for bonds, expenses and fees, as well as providing for injunction and a decree of specific performance, is not unconstitutional and void as being in conflict with article 1, section 4, paragraph 1, of the constitution of Georgia, in that the general laws of the State have provided for the issuing of temporary injunction, for the payment of court costs, and other provisions stated in said section.
3. An attack upon the entire act of the legislature mentioned in the preceding division, - and upon the contract upon which the suit was based, on the ground that they are null and void as being "in violation of article 4, section 1, paragraph 4, of the constitution, in that it was the intention of the plaintiff and the members forming the same to combine all of the cane products grown in southwest Georgia so as to be able to fix the price at which the cane would be sold, and be able to effect a corner of the syrup manufactured in southwest Georgia, so as to enable the association to dictate the price to be paid for such syrup by the canners who depended upon said crop for their material to operate their canneries," is insufficient to present any question for consideration, there being no section 1 in article 4 of the constitution.
Judgment affirmed.
All the Justices concur, except Gilbert, J., absent for providential cause.
Injunction. Before Judge Custer. Grady superior court. December 1, 1923.
The Cane Growers Co-Operative Association filed a petition against Guy Harrell, alleging that he had broken a contract by which he agreed to sell the association all the syrup made by him in the years 1922, 1923, 1924,' 1925, and 1926, by selling ten barrels of syrup in violation of the contract. The petition prayed that the defendant be required to specifically perform the contract except as to the portion of the syrup which had been sold, and that he be enjoined from any further violation of the contract. A copy of the contract was attached to the petition, as follows:
"Farmers' Co-Operative Cane Syrup Association. Offices: Cairo, Georgia.
"We organize a non-profit co-operative association to sell our syrup intelligently. — The undersigned propose to organize a nonprofit association, without capital stock, under the laws of the State of Georgia, for the purpose of promoting, fostering, and encouraging the business of marketing syrup co-operatively; for stabilizing markets; for co-operatively and collectively handling the problems of syrup growers and for other purposes. We agree with each other. — No outsiders in this contract. — We, the undersigned, in consideration of the premises, and of our mutual undertaking, and of the agreement of each and every party hereto, do hereby agree as follows, each for himself, and collectively for the express benefit of and as the association to be organized:
"We agree to be members. — 1. We will become members of the Farmers' Co-Operative Cane Syrup Association, a non-profit association without capital stock, to be organized under the laws of the State of Georgia. Only growers or landlords who have syrup to sell can be members. — 2. The association • may include in its membership any syrup grower or the landlord or tenant or lessor of land in Georgia on which cane is grown, provided the landlord or lessor receives all or part of the rental in syrup. Will have five directors. — The office will be at Cairo, Georgia. — 3. The affairs of the association will be controlled by a board of five directors, and the office of the association shall be at Cairo, Ga. Five directors are cane growers. — 4. There will be five districts.— (a) The members shall elect five directors from among members actually residing and growing cane in five districts, to be specified by the organization committee prior to the first primary elections, including in each district approximately one-fifth of the cane covered by the signers, without, dividing counties. Members shall hold primary elections to choose directors in each district. — 5; The members of each district shall meet' annually for a primary election, to be held in the district and conducted as, where, and when specified by the directors, and shall select one name in each district to be presented as the nominee to repr.' each district. Such nominees shall be elected as director the general meeting. Voting By Mail. — If unable to attend, the members may vote at such primary meeting by mail, on ballot prepared under direction of the Board of Directors. The first primary to select incorporating directors shall be held within thirty days after the minimum sign-up has been secured, as the organization committee shall direct. Districts always to be given lair representation. — 6. The directors, by a majority vote, at least twenty days prior 'to the primary meetings, each year thereafter, shall change the said districts and the counties included therein, so as to maintain at all times fair and equitable representation of the cane-producing counties and districts included in the membership. Board will have an executive committee. — (b) All officers and employees of the association who handle funds shall be adequately bonded. One man, one vote. — Every member of the association shall have one vote.
"Membership fee, three dollars. — Every member shall pay an entrance or membership fee of $3.00, associate members $5.00, payable as, how, and when the organization committee may determine.
"Association will have suitable articles of incorporation and bylaws. — The association shall confine itself to the problems and marketing of cane and cane products only and for its members only. It shall have suitable articles of incorporation and by-laws stating the purposes and powers of the association, the rights and duties of members, manner of forfeiture of membership, value of property interests on withdrawal or expulsion from membership, and any other necessary, pertinent or important points ,of organization, as determined by the organization committee.
"Organization committee. — The association shall be organized by an organization committee of eighteen members, which may increase its members, select its own chairman, vice-chairman, secretary and treasurer, and generally take such steps as it may deem advisable to secure subscribers for this agreement and the members of the association. T. M. Chastain, Chairman, Cairo, Ga.; S. P. Vanlandingham, Cairo, Ga.; Charles Whitfield, Calvary, Ga.; B. L. Hudson, Ochlocknee, Ga.; H. W. Griffin, Ochlocknee, Ga.; M. M. Blanton, Yaldosta, Ga.; W. C. Lineberger, Yaldosta, Ga.; S. E. Swilley, Quitman, Ga.; J. I. Bruce, Dixie, Ga. m 'i. by May 1st, 1922, signatures of cane-growers or persons
. -aile to membership covering at least twenty-five per 'cent, of thé' 1920 crop shall not have been secured for this agreement, the organization committee shall so notify every subscriber at his address noted below, prior to May 15th, 1922, and cancel his signature arid the agreement signed by him.
. "Binding agreement. — If signatures of the growers of twentyfiie'-per cent, of the syrup produced in the above-named counties shall be secured by the said date, May 1st, 1922, then this agreement shall be binding upon all the subscribers in all of its terms, and there shall be no right of withdrawal whatsoever. Starts with the 1921 crop, if sign-up secured. — If the signatures of twenty-five per cent, of the crop shall be secured by November 15, 1921, this contract shall go into effect at once and shall be binding upon the subscribers as to the 1921 crop in addition to those set forth in the Marketing Agreement. Statement of committee conclusive. — For all matters of production or signatures and for all statements of fact in connection herewith, the written statement of the organization committee, signed by its chairman, shall be absolutely conclusive, with or without notice to the subscriber.
"Committee keeps full accounts. — The organization committee shall keep a full, true, and detailed account of expenditures, including salaries, fees, and costs of every kind; and shall render a written report thereof to the board of directors of the association when organized; and shall thereupon turn over to the association any balance remaining in its hands and free of obligation. Treasurer bonded. — The treasurer of the committee shall be bonded.
"Funds, prorate if sign-up not secured. — If the signatures covering twenty-five per cent, of the syrup produced in the county herein specified shall not have been secured by May 1st, 1922, the funds on hand shall be prorated among the subscribers, after payment of all debts; and the accounts shall be audited by a public accountant and the report be made available for inspection by all subscribers.
"Committee authorized to go ahead. — We do hereby authorize the organization committee, as the representative of all the subscribers, to take such steps as it may deem proper to secure subscribers hereto; and when the adequate number is secured, to hold primary elections and have the signers select organizing directors from among growers subscribing hereto, and to take all steps necessary and advisable to organize the association. .
"Keep up organization work. — The association when organized shall make every reasonable effort to secure signatures of additional growers to the standard marketing agreement, to cover the largest possible percentage of the cane of this State.
"Warehousing. — After due investigation the association may cause a refining and canning corporation to be organized to handle, treat, process, warehouse or store any or all of the syrup delivered by members of the association. Appropriate name.— Such corporation shall have an appropriate name, and shall have common capital stock and preferred capital stock in amounts estimated as sufficient for their purposes by the directors of the association. Voting power in common stock. — Only members can own this. — The authorized common stock shall exceed in amount the authorized preferred stock. The common stock shall be sold or issued only to the members of the association at par. The common stock shall have all the voting power of the corporation. Preferred stock has no vote, but has guaranteed dividends. — Anybody can buy this. — The preferred stock shall be divided into five equal classes, all bearing eight per cent, cumulative dividends and having similar preferences, subject to retirement with a bonus of two per cent, at the rate of one class or one-fifty thereof annually, beginning with December, 1922. The preferred stock may be sold to any person, firm, or corporation whatsoever. Limitation on stock issues. — The original issue of preferred stock shall not exceed one dollar for each barrel of syrup of the 1920 crop, covered by the membership of that district; but this amount may be increased proportionally as the membership increases.
"Function of corporation and relations to marketing organizations. — The association shall make a cross-contract with the cor poration, providing substantially as follows: That the corporation shall handle,. treat, process, store, ship and deliver, all as required and directed by the association, the syrup delivered to it and at the order of the association. Such service will be on a nonprofit basis; and the corporation shall receive therefor only the actual costs of such operations and amounts apportioned over the operation of any one season, sufficient to pay a dividend of eight per cent, on the outstanding common stock and the dividends on the outstanding preferred stock and to retire the preferred stock, or one class thereof; and sufficient amounts for taxes, insurance, depreciation, betterments, and commercial and secondary charges, all as the directors of the association may instruct and limit the corporation, and not otherwise.
"Iiow you retire preferred stock. — The association shall retire each class of preferred stock and pay the dividends on the stock by deductions from the syrup of the members within the respective district.
"Growers get credit for all deductions to retire stock. — As the preferred stock is retired, the association will calculate the value of the contribution from the proceeds of each grower's syrup toward such retirement and towards the payment of dividends on the common and preferred stock, and the corporation will credit and issue from time to time each member common stock in an equivalent amount at the par value thereof, as soon as the aggregate deductions equal the value of one or more shares.
"Marketing agreement is here accepted. — The subscriber agrees, first, to execute, when requested by the association, a marketing agreement in terms substantially the same as those set forth in the agreement herewith embodied; or, second, at the option of the board of directors, to be bound by the terms of the following marketing agreement: For such purpose signature to this association contract shall be deemed to all effects the same as signature to this marketing agreement as acceptance of each and every provision thereof and herein, as of the exercise of the option by the board of directors. Notice thereof shall be mailed to each subscriber at his address as noted below.
"This is an application for membership. — The subscriber here applies for membership in the association, when organized, and expressly agrees that his signature to the association contract and to the marketing agreement herewith embodied, and to this ap plication for membership, shall be irrevocable, except as provided in paragraph 18, and that he so agrees, in order to induce other growers to sign this agreement for his benefit as well as their own general benefit and the public welfare. Acceptance of this application for membership and of the marketing agreement shall be deemed conclusive, upon the mailing of the notice by the association; and such mailing and notice shall be conclusively established by the affidavit of the Secretary of the Association.
"Member's agreement with association. — The Farmers' Cane Syrup Co-Operative Association, a non-profit association with its principal office at Cairo, hereinafter called the association, first party, and the undersigned grower, second party, agrees:
"This is for co-operative marketing. — 1. The grower is a member of the association and is helping to carry out the express aims of the association for co-operative marketing, for minimizing waste, and for stabilizing syrup markets in the interest of the grower and the public, through this and similar organizations undertaken by other growers.
"Grower sells syrup to association for five years. — 2. The association agrees to buy and the grower agrees to sell and deliver to the association all of the syrup produced [by?] or for him in Georgia during the years 1922, 1923, 1924, 1925, and 1926. Also 1921 in the event that this contract shall have obtained the requisite number of signatures by November 15th, 1921, to make it effective.
"If you have a crop mortgage. — 3. That syrup does not have to go to the association. — The growur expressly warrants that he has not heretofore contracted to sell, market, or deliver any of his said syrup to any person, firm, or corporation, except as noted at the end of this agreement. Any syrup covered by such existing contract or crop mortgage shall be excluded from the terms hereof for the period and to the extent noted, if the lienholder so enforces his right to possession.
"The association tells'you where to deliver. — 4. (1) All syrup shall be delivered at the earliest possible time after manufacturing, to the order of the association, at the warehouse, if the association controls a warehouse in that immediate district; or by shipment as directed to the association and by delivery of the indorsed warehouse receipts or bills of lading properly directed.
"Poor syrup is penalized. — (b) Any deduction or allowance or loss that the association may make or' suffer on account of inferior grade, quality, or condition at delivery, shall be charged against the grower individually.
"The association will try to standardize methods.— (c) The association shall make rules and regulations to standardize, grade, and class the quality of and the method and manner of handling syrup, and the grower agrees to observe and perform any such rules and regulations and accept the grading of the association.
"All syrup will be pooled for each year by type and grade. — 5. The association shall pool or mingle the syrup of the grower with syrup of a like variety, grade, and quality delivered by other growers. The association shall classify the syrup and its classification' shall be conclusive. Each pool shall be for a full season.
"Association will resell all syrup and pay net proceeds to grower. — Cost of operation and overhead will be deducted. But the association is forbidden to make any profit for itself. — 6. The association agrees to resell such syrup together with syrup of like variety, grade, and quality, delivered by other growers under similar contracts, at the best prices obtainable by it under market conditions; and to pay over the net amount received therefrom (less freight, insurance, and interest) as payment in full to -the grower and growers named in contracts similar hereto, according to the syrup delivered by each of them, after deducting therefrom, within the discretion o'f the association, the cost of handling, grading, and marketing such syrup and of reserves for credit and other general purposes (said reserves not to exceed two per cent, of the gross resale price). The annual surplus from such deductions must be prorated among the growers delivering syrup in that year on the basis of delivery.
"Every grower gets the' same price for like type and grade of syrup. — 7. The grower agrees that the association may handle, in its discretion, some of the syrup in one way and some in another; but the net proceeds of all syrup of like quality, less charge, costs, and advance shall be divided ratably among the growers in proportion to their deliveries to each pool, payments to be made from time to time until all the accounts of each pool are settled.
"The syrup will be sold anywhere. — For export or otherwise, where most profitable. — 8. The association may sell the said syrup, within or without this State, directly to consumers, brokers, or otherwise, at such times and upon such conditions and terms as it may deem profitable, fair and advantageous to the growers; and it may sell all or any part of the syrup to or through any agency, now established or to be hereafter established, for the cooperative marketing of the syrup of growers in other States throughout the United States, under such conditions as will serve the joint interest of the growers and the public; and any proportionate expense connected therewith shall be deemed marketing costs under paragraph 6.
"The association can raise money to make first payment to grower. — 9. The grower agrees that the association shall borrow money in its name on the syrup, by the issuance of commodity bonds or bearer certificates or through drafts, acceptances, notes, or otherwise, on any warehouse receipt or bills of lading, or upon any accounts for the sale of syrup or on any commercial paper delivered therefor. The association shall prorate the money so received among the growers equitably, as it may determine, for each district and period of deliveries.
"The association agrees to accept' drafts drawn against it by the grower for any amount specified and determined by it, upon delivery of syrup hereunder, and to assist the grower to discount such drafts, secured by the warehouse receipts, through the most advantageous banking system.
"Offices or plants wherever they are needed. — 10. The association may establish selling offices, warehouses, plants, marketing, statistical, or other agencies in any place.
"You can stop growing cane if you wish. — 11. The grower shall have the right to stop growing cane, and to grow anything else at any time at his free discretion; but if he produces any syrup during the term hereof, it shall all be included under the terms of this agreement and must be sold to the association, except what is consumed by the grower. You do not have to deliver any particular amount. — 12. Nothing in this agreement shall be interpreted as compelling the grower to deliver any specified quantity of syrup per year; but he shall deliver all the syrup produced or acquired by or for him. You deliver all the syrup you raise.— (a) This agreement shall be binding upon the grower as long as he produces syrup directly or indirectly, or has the legal right to exercise control of any commercial syrup or any interest therein during the term of this contract, (b) If this agreement is signed by the members of a copartnership, it shall apply to them and each of them individually in the event of the dissolution or determination of the said copartnership.
"You may make a crop mortgage. — The association will try to help you secure standard terms.— (c) If the grower places a crop mortgage upon any of his crops during the term hereof, the association shall have the right to take delivery of his syrup and to pay off all or part of.'the crop mortgages for the account of the grower and to charge the- same against him individually. The grower may place a crop mortgage upon his syrup, and agrees to notify the association prior to making any mortgage; and the association will advise the grower in any such transactions.
"Statistics are needed. — 14. From time to time the grower agrees to mail to the association any statistical data requested on all the forms provided for that purpose by the association.
"All contracts are alike. — 15. This agreement is one of a series generally similar in terms, comprising with all such agreements, signed by individual growers, or otherwise, one single contract between the association and the said growers, mutually and individually obligated under all of the terms thereof. The association shall be deemed to be acting in its own name; for all such growers, in any action or legal proceedings on or arising out of this contract.
"The grower authorizes the association to build warehouses if it needs them. — 16. (a) The grower hereby expressly authorizes
the association to deliver, to any warehousing corporation organized for co-operation with the association, any or all' of his syrup for handling, processing, or storing; and to charge against his syrup the prorated costs of such services and his prorated share of the funds necessary to create a reserve, equivalent to one class of its preferred stock annually, plus bonus, to retire the said class, or otherwise; and to pay the interest or advances and the dividends on all outstanding preferred stock.
"Any old syrup may be delivered to the association to sell. — 17. If the grower has on hand when this agreement goes into effect, tany syrup of the 1921 crop or previous crops, free of liens and capable of delivery, he shall deliver such syrup to the association as it may direct, to be graded by the association and marketed by it in pools wholly separated from all other deliveries here made, but generally in the manner herein above set forth.
"Do not break the contract. — This is expensive. — 18. (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 to sell and deliver all "of his syrup, the grower hereby agrees to pay to the association, for all syrup delivered, sold, consigned, withheld, or marketed by or for him, other than in accordance with the terms hereof, the sum of three dollars per barrel as liquidated damages for the breach of this contract, all parties agreeing that this contract is one of a series depending for its true value upon the adherence of each and all of the growers to each and all of the said contracts.
"We will get his syrup anyway.— (b) The grower agrees that in the event of a breach or 'threatened breach by him of any provision regarding delivery of syrup, the association shall be entitled to an injunction to prevent the breach or further breach 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 can not go to the open market and buy S3rrup to replace any which the grower may fail to deliver.
"Violators pay the costs of fighting them. — (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.
"The contract is complete on its face. — 19. The association is expressly authorized to exercise any or all of the grading, inspecting, marketing, or other powers or rights granted hereunder through any central agency to be organized for co-ordinating the activities of this and similar co-operative marketing associations in other States. The association shall, if possible, enter into a con-, tract for such purpose; and may agree to pool the products delivered hereunder with products of similar variety, grade, and quality, delivered to generally similar associations under marketing agreements substantially the same in effect as this agreement; and to unite with any such associations in the joint purchase, construction, lease, or use of terminal or other facilities, to assume obligations therefor. Any cost of maintaining such central agency shall be prorated among the said associations on the basis of the gross sales proceeds from the product delivered by them respectively, and shall be considered part of the costs and deductions provided for in paragraph 6.
"Read, considered, and signed by the grower, as of the date determined by the association contract in the State of Georgia."
"Minor changes may be made. — 18. These provisions are subject to minor modifications or amendments by the organization committee, on the suggestion of State officials or otherwise, so as to carry out the general purpose hereof. All contracts áre the same. — There are no favorites. — 19. It is expressly agreed that this instrument is one of a series substantially identical in terms. All such instruments shall be deemed one contract for the purpose of binding the subscribers, to the same extent as if all of the subscribers had signed only one such contract. 20. The parties agree that there are no oral or other conditions, promises, covenants, representations, or inducements in addition to or at variance with any of the terms hereof; and that this agreement represents the voluntary and clear understanding of both parties fully and completely.
"Do not sign without reading. Read, considered, and signed at Whigham, Ga., this 2 day of Feb., 1922.
"Grower — Guy Harrell, P. 0. Address, Whigham, County Grady. Production in 1920 was 170.
"Signature taken and membership fee received in form of cash $.......... Check $.......... by A. L. Mobley, Association Representative."
In his answer the defendant contended, that the plaintiff had breached the contract by failing to pay over the purchase-price of 234 barrels of syrup received by the association in the year 1922, or to make any statement of the defendant's account after having paid him $9.50 per barrel by way of two advancements, whereas the syrup was worth $12.50 per barrel or more; that the contract sued on was one in restraint of trade, and therefore void; that it was not authorized by the act under which the plaintiff purported to do business; and that the act under which the plaintiff was incorporated was unconstitutional, because: (1) the body of the act includes subject-matter not referred to in the caption; (2) it attempts to provide for the issuance of a mandatory injunction, the grant of which would be oppressive to the defendant. Upon a hearing the contract was introduced in evidence without objection ; and testimony was submitted in support of the allegations of the petition, showing that the defendant was a member of the association and in 1922 was vice-president thereof; that hé signed the contract; that thereafter he sold 30 barrels of syrup to a person other than the association; and that he had not delivered, but on the contrary refused to deliver, to the association any portion of the syrup made from caire grown by him in the year 1923. In addition to the allegations in the sworn answer, which was used -as evidence, the defendant testified, that he had at all times been ready to abide by the contract; that he had furnished the association with 234 barrels of syrup in 1922, each barrel containing 35 gallons or more, which had been sold by the association to a Columbus cannery for 36 cents per gallon, amounting to more than $3000; that he had received no money from the association, except an advance at one time of $8 per barrel and at another time $1.50 per barrel, although the association had received payment in full from the Columbus cannery; that the only accounting ever accorded him by the association was a statement by the secretary and treasurer that from the funds in hand he would probably receive an additional 50 cents per barrel; that the syrup made in 1923 was perishable in its nature, and likely to ferment and become unmarketable and less valuable if not sold by March 1, 1924; and that the defendant was solvent and amply able to respond in any damages which the association might recover against him for a breach of the contract and failure to deliver the syrup as agreed.
The trial judge granted the injunction as prayed, permitting, however; the defendant to retain possession of any syrup made in the year 1923, upon giving bond in the sum .of $500, conditioned upon his abiding the final judgment in the case. Exception was taken to this judgment.
8. P. Gain, for plaintiff in error.
Ira Carlisle and Hollins Randolph, contra.
Aaron Sapiro, Bryan & Middlebroolcs, and Pottle & Hofmayer, for persons at interest, not parties of record.