Cooperatives in entering into contracts with third persons, as well as with their members, should keep the foregoing principles in mind. In an Oregon case it was held that the stipulated damages specified in a contract entered into by a dairy cooperative association with a dairy distributor amounted to a penalty.57

It has been held that the fact that a provision in a marketing agreement providing for liquidated damages is void because it does not conform to the statute under which the association is organized does not invalidate the entire contract.58

"SPECIFIC

Specific Performance

PECIFIC performance may be defined as the actual accomplishment of a contract by the party bound to fulfill it, for a decree for specific performance is nothing more or less than means of compelling a party to do precisely what he ought to have done without being coerced by a court.” 59

It should be borne in mind that the term "specific performance" is the name of an equitable remedy, by means of which a person is affirmatively compelled by the court to perform his contract. It is true that growers are frequently enjoined from disposing of their products outside the association of which they are members, in viola tion of their contracts; and this, generally speaking, results in the contract actually being performed; but, strictly speaking, this is not what is meant by the term "specific performance." The cooperative statutes that have been enacted by the States during recent years usually contain a provision stating that an association shall be entitled, in the event of a breach or threatened breach of its marketing contract, "to an injunction to prevent the further breach of the contract and to a decree of specific performance therof." 60

Many cases have been before the courts, involving the right of cooperative associations to the remedies of specific performance and injunction on account of the statutory provision in question. In Kansas it was held that the statutory provision was virtually mandatory on the court, at least under normal conditions, and that the

57 Dairy Co-operative Association v. Brandes Creamery, 147 Ore. 488, 30 P. 2d 338, 147 Ore. 503, 30 P. 2d 344.

58 Watertown Milk Producers' Cooperative Association v. Van Camp Packing Company, 199 Wis. 379, 225 N. W. 209, 226 N. W. 378, 77 A. L. R. 391.

59 25 R. C. L. 203.

See par. (b) of sec. 18 of the Bingham Cooperative Marketing Act of Kentucky, p. 381 of Appendix.

legislature was competent to enact a rule of this kind which was binding on the courts.1 In States other than Kansas substantially similar conclusions have been reached in cases involving the right of associations to the remedies of injunction and specific performance under the statutory provision in question.62

In many cases brought by cooperative associations against their members to prevent them from violating their contracts, the association in question has asked the court to enjoin the member from disposing of his products to third persons, without asking the court to decree the specific performance of the contract involved. Some of these cases are discussed under the heading "Injunctions."

Independent of a statutory provision entitling a cooperative association to the remedy of specific performance, will courts of equity thus compel members of cooperative associations to perform their contracts? The fundamental rule with respect to this matter is that no one is entitled to a decree for specific performance, an injunction, or other equitable relief where the remedy at law is plain, adequate, and complete. In general, courts of equity will refuse to grant a decree for specific performance or an injunction if compensation in money for the breach of the contract would constitute full and complete satisfaction. In the case of contracts involving personal property which can be easily purchased in the open market, usually no decree for specific performance will be granted. When a cooperative association is restricted by the statute under which it is formed, by its charter, or by its contract, to dealing only with its members, it cannot legally buy products to take the place of those which its members refused to deliver, and this fact has been referred to in some instances by the courts as constituting a reason why an association was entitled to have its contract with a member performed.68

61 Kansas Wheat Growers' Ass'n v. Schulte, 113 Kan. 672, 216 P. 311.

62 Lee v. Clearwater Growers' Ass'n, 93 Fla. 214, 111 So. 722; Texas Farm Bureau Cotton Ass'n v. Stovall, 113 Tex. 273, 253 S. W. 1101, reversing Texas Farm Bureau Cotton Ass'n v. Stovall, (Tex. Civ. App.), 248 S. W. 1109; South Carolina Cotton Growers' Co-op. Ass'n v. English, 135 S. C. 19, 133 S. E. 542; Rifle Potato Growers' Co-op. Ass'n v. Smith, 78 Colo. 171, 240 P. 937; Arkansas Cotton Growers' Co-op. Ass'n v. Brown, 168 Ark. 504, 270 S. W. 946; McCauley v. Arkansas Rice Growers' Co-op. Ass'n, 171 Ark. 1155, 287 S. W. 419; Warren v. Alabama Farm Bureau Cotton Ass'n, 213 Ala. 61, 104 So. 264; Harrell v. Cane Growers' Co-op. Ass'n 160 Ga. 30, 126 S. E. 531; Colma Vegetable Ass'n v. Bonetti, 91 Cal. App. 103, 267 P. 172; Nebraska Wheat Growers' Ass'n v. Smith, 115 Neb. 177, 212 N. W. 39; Brown v. Staple Cotton Co-op. Ass'n, 132 Miss. 859, 96 So. 849.

63

Oregon Growers' Co-op. Ass'n v. Lentz, 107 Ore. 561, 212 P. 811; Bishop v. Alabama Farm Bureau Cotton Ass'n, 215 Ala. 388, 110 So. 711; Manchester Dairy

Even though there is no provision in the law of a State specifically entitling an association to the remedies of specific performance and injunction against its members, the courts in some instances have held that associations were entitled to both these remedies.64

Although most of the cases that have come before the courts involving the right of an association to the remedy of injunction or specific performance, or both, have involved the purchase-and-sale form of contract, the courts have enforced agency contracts by these remedies.65

Associations formed in one State have frequently been held entitled to the remedies of injunction and specific performance in suits brought in other States.66

Outside the field of cooperation, the courts have upheld the right of commercial concerns to the remedies of specific performance and injunction with respect to oil, tomatoes, and pineapples," when it appeared that the products named could not be easily obtained in the open market. Some courts will refuse to decree the specific performance of a contract while enjoining the delinquent party from disposing of the products involved to third persons. Thus, the Supreme Court of Washington, independent of statute, in a cooperative case refused under the general principles of equity to decree the specific performance of the contract on the ground that it would call for constant supervision, but enjoined the member from disposing of his cranberries outside the association.70 A similar conclusion was reached by the Supreme Court of Oregon."1

System, Inc. v. Hayward, 82 N. H. 193, 132 A. 12; Dark Tobacco Growers' Co-op. Ass'n v. Dunn, 150 Tenn. 614, 266 S. W. 308; Kansas Wheat Growers' Ass'n v. Schulte, 113 Kan. 672, 216 P. 311.

64

Elephant Butte Alfalfa Ass'n v. Rouault, 33 N. M. 136, 262 P. 185; Manchester Dairy System, Inc. v. Hayward, 82 N. H. 193, 132 A. 12.

Elephant Butte Alfalfa Ass'n v. Rouault, 33 N. M. 136, 262 P. 185; Elmore v. Maryland & Virginia Milk Producers' Ass'n, Inc., 145 Va. 42, 132 S. E. 521, 134 S. E. 472.

Dark Tobacco Growers' Co-op. Ass'n v. Dunn, 150 Tenn. 614, 266 S. W. 308; Brown v. Staple Cotton Co-op. Ass'n, 132 Miss. 859, 96 So. 849; Elephant Butte Alfalfa Ass'n v. Rouault, 33 N. M. 136, 262 P. 185; Manchester Dairy System, Inc. v. Hayward, 82 N. H. 193, 132 A. 12; Nebraska Wheat Growers' Ass'n v. Norquest, 113 Neb. 731, 204 N. W. 798.

67 Texas Co. v. Central Fuel Co., 194 F. 1. See also: American Smelting & Refining Co. v. Bunker Hill & Sullivan Mining Co., 248 F. 172.

68 Curtice Bros. Co. v. Catts, 72 N. J. Eq. 831, 66 A. 935.

69 Hawaiian Pineapple Co., Ltd. v. Saito, 270 F. 749.

70 Washington Cranberry Growers' Ass'n v. Moore, 117 Wash. 430, 201 P. 773, 204 P. 811, 25 A. L. R. 1077.

71

"Phez Co. v. Salem Fruit Union, 103 Ore. 514, 201 P. 222, 205 P. 970, 25 A. L. R. 1090.

402026°-42- 13

66

'A

Injunctions

N injunction is an order issued by a court of equity, requiring a party to do or refrain from doing certain acts." 2 Injunctions are usually issued to prevent a threatened injury or to restrain the doing of wrongful acts. Generally speaking, it appears settled that cooperative associations are entitled to enjoin their members from disposing of their products to third persons in violation of their contracts. Many of the cooperative statutes contain a provision entitling associations formed under them to the remedy of injunction against their members to prevent the violation by them of their contracts. A number of cases are cited in the preceding section which are directly applicable here. Other cases are here cited in which associations enjoined their members without asking the court to decree the specific performance of the contract involved." Independent of statute, the courts have held in a number of instances that cooperative associations were entitled to enjoin their members from disposing of their products outside the association."

In a few cases involving extraordinary situations, the courts have denied associations the remedies of specific performance and injunc

72 22 Cyc. 740.

73

Tobacco Growers' Co-op. Ass'n v. Jones, 185 N. C. 265, 117 S. E. 174, 33 A. L. R. 231; Tobacco Growers' Co-op, Ass'n v. Spikes, 187 N. C. 367, 121 S. E. 636; Tobacco Growers' Co-op. Ass'n v. Battle, 187 N. C. 260, 121 S. E. 629; Tobacco Growers' Co-op. Ass'n v. Patterson, 187 N. C. 252, 121 S. E. 631; Potter v. Dark Tobacco Growers' Co-op. Ass'n, 201 Ky. 441, 257 S. W. 33; Burley Tobacco Growers' Co-op. Ass'n v. Devine, 217 Ky. 320, 289 S. W. 253; Elmore v. Maryland & Virginia Milk Producers' Ass'n, Inc. 145 Va. 42, 132 S. E. 521, 134 S. E. 472; Washington Wheat Growers' Ass'n v. Leifer, 132 Wash. 602, 232 P. 339; Northwest Hay Ass'n v. Hanson, 135 Wash. 47, 236 P. 561; Pierce County Dairymen's Ass'n v. Templin, 124 Wash. 567, 215 P. 352; Washington Co-op. Egg & Poultry Ass'n v. Taylor, 122 Wash. 466, 210 P. 806; Minnesota Wheat Growers' Co-op. Marketing Ass'n v. Huggins, 162 Minn. 471, 203 N. W. 420; Rifle Potato Growers' Co-op. Ass'n v. Smith, 78 Colo. 171, 240 P. 937; Nebraska Wheat Growers' Ass'n v. Norquest, 113 Neb. 731, 204 N. W. 798; Kansas Wheat Growers' Ass'n v. Charlet, 118 Kan. 765, 236 P. 657; Beaulaurier v. Washington State Hop Producers, Inc., 8 Wash. 2d 79, 11 P. 2d 559.

74

Oregon Growers' Co-op. Ass'n v. Lentz, 107 Ore. 561, 212 P. 811; Phez Co. v. Salem Fruit Union, 103 Ore. 514, 201 P. 222, 205 P. 970, 25 A. L. R. 1090; Washington Cranberry Growers' Ass'n v. Moore, 117 Wash. 430, 201 P. 773, 204 P. 811, 25 A. L. R. 1077; Grant County Board of Control v. Allphin, 152 Ky. 280, 153 S. W. 417; Owen County Burley Tobacco Society v. Brumback, 128 Ky. 137, 107 S. W. 710; Elephant Butte Alfalfa Ass'n v. Rouault, 33 N. M. 136, 262 P. 185; Manchester Dairy System, Inc. v. Hayward, 82 N. H. 193, 132 A. 12; Tobacco Growers' Co-op. Ass'n v. Jones, 185 N. C. 265, 117 S. E. 174, 33 A. L. R. 231.

tion. In an Alabama case 75 the court said that the statutory provisions relative to the equitable remedies under discussion were to "be constructed as contemplating the use of such remedies only in case they shall be found to consist with commonly accepted principles of right and justice," and the court, therefore, completely denied the association the remedies in question because of a mortgage held by a third person on the crop.

In a similar case arising in North Carolina 76 the court enjoined the member from disposing of his crop outside the association, subject to the right of a holder of the mortgage on the crop to demand and receive enough tobacco to satisfy the mortgage.

In another North Carolina case " the court refused an injunction because the association had not settled with the member in full for a crop previously delivered and it appeared that the member was obliged "to raise money for the necessary supplies of himself and family." In refusing the injunction the court called attention to the rule that under the general principles of equity "an injunction will not usually be granted or continued where 'it will do more mischief and work greater injury than the wrong which it is asked to redress'." In a Florida case in which an injunction was denied the Chancellor found that

the price of milk allowed and paid by plaintiff to the defendant is below the cost of production as shown by the testimony and that defendant was justified under the circumstances in withdrawing from the plaintiff association, to avoid irreparable loss and injury, and virtual confiscation of her property.

The Supreme Court of the State affirmed the lower court but held that this would not operate to prevent the association from recovering damages. 78

In a Tennessee case 79 in which the members of the association concerned were not made parties and in which it was not alleged that the third persons who had purchased milk of the members were insolvent, the court refused to enjoin them from buying milk of the

75

Bishop v. Alabama Farm Bureau Cotton Ass'n, 215 Ala. 388, 110 So. 711, 712. See also Lennox v. Texas Farm Bureau Cotton Ass'n, (Tex. Civ. App.), 16 S. W. 2d 413.

76 Tobacco Growers' Co-op. Ass'n v. Patterson, 187 N. C. 252, 121 S. E. 631. See also Tobacco Growers' Co-operative Ass'n v. Harvey & Son Co., 189 N. C. 494, 127 S. E. 545, 47 A. L. R. 928.

77 Tobacco Growers' Co-op. Ass'n v. Bland, 187 N. C. 356, 121 S. E. 636, 638, 639. 78 Miami Home Milk Producers' Association v. La Course, 117 Fla. 345, 158 So. 117, 118.

79

Knoxville Milk Producers' Association v. Blake, 171 Tenn. 283, 102 S. W. 2d 64.