Court Opinion

ID: 8197344
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:20:48.667155+00
Date Added: 2024-06-11T16:40:45.111340
License: Public Domain

Per Curiam
(on motion for rehearing). It is earnestly contended by the respondents that the decision heretofore *54filed fails to give proper weight to the fact that the contract, upon its face, is clearly disclosed to be co-operative in character and that the decision opens the way to discrimination by the association against some of its members by putting them off the market for the benefit of other members.
In the interest of clarity, and in view of the fact that a new trial is made necessary by the decision, a further statement of the court’s view is considered to be advisable.
An examination of authorities on the subject of co-operative marketing indicates that co-operatives may take an almost infinite variety of forms, and that there is a type of co-operative existing mostly with respect to the business of selling milk which is of the same character that defendant contends this association to be. While such co-operative has obvious disadvantages in operation, and while it offers to its members less services than more ambitious undertakings in this direction, it nevertheless has the advantage that it can operate with smaller capital and a smaller charge to the members than the pooling type of co-operative. It offers to.its members ordinarily the means of inspecting and standardizing their product, as well as stabilizing the price by the control of the market. Such an association necessarily operates by contracting with dealers who have handling facilities for milk. It acts, therefore, as a marketing agent with the usual duties and responsibilities of such an agent.
It was held in the opinion in this case that the language of the contract will accommodate itself to the' meaning contended for by the defendant association, namely, that the co-operative was a co-operative of this sort. It does not follow, if the extrinsic evidence should establish this as the sense in which the language should be taken, that the association can deliberately or intentionally eliminate from the market a portion of the producers who are members in order that the remaining members may enjoy more favorable prices. *55The contract is not open to such a construction. Even though the sense or meaning contended for should be established, the association is obligated to exercise the same diligence and good faith to market the milk of one member that it exercises to market the milk of the other members. This is the cooperative principle as applied to this type of organization. It is violated when and if the association discriminates in the exercise of its sales efforts between members or groups of members, each of whom has an equal right to the exercise of these efforts. It is not violated if the association has exercised reasonable diligence in good faith and without discrimination. Any other rule would result in the immediate destruction of this form of co-operative, which is designed to give to producers of milk some of the advantages of cooperative action without the capital and expense incident to more ambitious undertakings.
A careful reconsideration of the other matters raised in the motion for rehearing convinces the court -that it should adhere to the determination originally made.
Motion for rehearing denied, with $25 costs.