10 . BULLETIIsr 1106, U. S. DEPARTMENT OF AGRICULTURE. 



law must be general in its application and not aim at a particular 

 member.25 As indicating the possible scope of by-laws, a Nebraska 

 case is interesting. It was held that a corporation not organized 

 for profit and whose capital stock was fully paid up could lawfully 

 require annual dues from its members.^^ An invalid by-law, if not 

 opposed to public policy, is generally enforced as a contract be- 

 tween the members and between the corporation and its members. 

 For instance, if the members of an association adopt what purports 

 to be a by-law, but which is void for the reason that the corpora- 

 tion or association is not empowered by the law of the State in 

 which it is incorporated or by its charter to adopt the particular 

 by-law, it will, as a general rule, be enforced as a contract.^^ The 

 term " constitution " is frequently used in connection with by-laws. 

 So far as an incorporated association is concerned, it is not believed 

 that the expression has any place. A " constitution " has been held 

 to be only a by-law with an inappropriate name and in no sense a 

 charter.^^ 



DIRECTORS AND OFFICERS. 



After an incorporated cooperative association or other corporation 

 has been created, it is then necessary to elect directors and officers 

 through whom the association may conduct its business. In some 

 States the directors and officers for the first year or for the purpose 

 of initiating the work of the corporation are chosen before incor- 

 poration, but this is not usually required or done. The directors 

 are elected by the members of the association for a given length of 

 time which is sometimes specified in the law of the State. The 

 directors, in turn, as a rule, elect the officers, who are usually chosen 

 from among their number. Unless a statute requires, it is not 

 necessary that the directors should be stockholders or members of 

 the association. 



The directors and officers of a cooperative association or other 

 corporation are required to act honestly and fairly in conducting 

 the affairs of the corporation. A director or officer must be open 

 and aboveboard in his transactions with the corporation. He must 

 not take advantage of his position to drive an unjust bargain with 

 the corporation or its stockholders. It is his duty to use his best 

 efforts to promote the interests of the stockholders or members of 

 the corporation, and he can not acquire any adverse interests. The 

 injunction that " No man can serve two masters " is recognized by 



» Budd V. Multnomah St. R. Co., 15 Oreg. 413, 15 Pac. 659. 

 26 Omaha Law Library Ass'n. v. Cornell, 55 Neb. 396, 75 N. W. 837. 



^ strong V. Minnesota Automobile Trade Ass'n., (Minn.) 186 N. W. 800 ; New Eng- 

 land Trust Co. V. Abbott, 162 Mass. 148, 38 N. E. 432, 27 L. R. A. 271. 

 28 Supreme Lodge K. P. v. Kutscher, 179 111. 340 ; 53 N. E. 620. 



