24 BULLETIN 1106, U. S. DEPARTMENT OF AGEICULTURE. 



Tlie apjpellant makes three principal contentions: First, that the contract 

 is void at common law as against public policy ; second, that it is contrary 

 to Article 12, Section 22 of the constitution of this State, which is the section 

 covering the matter of monopolies and trusts, and, third, that the contract is 

 void as being in contravention of the Sherman Antitrust Act, passed by 

 the Federal Congress on April 2, 1890. 



The contract was upheld as against the various contentions re- 

 ferred to, and an injunction issued restraining the defendant from 

 disposing of his cranberries outside of the association. The contract 

 involved was one of 60 similar contracts. 



An Alabama case,'^® a California one,''^ and two New York deci- 

 sions^" also support the validity of such contracts. In lowa^^ and 

 Colorado ^^ the decisions indicate that liquidated damage clause 

 provisions in such contracts are invalid in those States on the 

 ground that they operate to restrain trade unlawfully. For a dis- 

 cussion of this proposition the reader is referred to the sections 

 dealing with liquidated damages and antitrust matters. 



POLLING: RIGHT TO DETERMINE GRADE. 



A provision in a crop contract authorizing a cooperative associa- 

 tion to pool the products of the various members with whom it has 

 contracts is undoubtedly valid. It is a proper subject for con- 

 tract. Of course, the question of whether the pooling was done 

 fairly and in accordance with the contract is a different matter. 

 The association would be liable to a member in case it failed to 

 act in good faith and in accordance with the terms of the contract, 



A stipulation in a contract giving a cooperative association or 

 one or more of its officers or agents the right to determine conclu- 

 sively the grade and quality of produce delivered under it appears 

 to be valid. This doctrine is subject to the qualification that the 

 officers or agents must act honestly and in good faith. In a case 

 decided by the Supreme Court of the United States,^^ 



^sEx Parte Baldwin County Producers Corporation, 203 Ala. 345, 83 So. 69. 



™ Anaheim Citrus Fruit Ass'n. v. Yeoraan, (Oalif.) 197 Pac. 959. 



s« Bullville Milk Producers Ass'n v. Armstrong, 178 N. Y. S. 612 ; Castorland Milk 

 and Cheese Ass'n. v. Shantz. 179 N. Y. S. 131. 



^ Reeves v. Decorah Farmers Cooperative Society, 160 Iowa 194, 140 N. W. 844, 

 44 L. R. A. (N. S.) 1108 ; Ludewese v. Farmers M. C. Co., 164 Iowa 197, 145 N. W. 475. 



^^ Burns v. Wray Farmers' Grain Co., 65 Colo. 425, 176 Pac. 487. 



83 Martinsburg & Potomac R. R. Co. v. March, 114 U. S. 549. 



A contract for the construction of a railroad provided that the company's engineer 

 should in all cses determine questions relating to its execution, kinds of work to be done, 

 and the compensation earned by the contractor at the rates specified ; that his estimate 

 should be final and conclusive ; and that whenever the contract shall be completely 

 performed on the part of the contractor, and the said engineer shall certify the same 

 in writing under his hand, together with his estimate aforesaid, the said company shall, 

 within thirt3f days after the receipt of said certificate, pay to the said contractor, in 

 current notes, the sum which according to this contract shall be due. 



