50 BULLETIN" 110 6, U. S. DEPARTMENT OF AGRICULTURE 
When an association is authorized to borrow money on products 
received from members, persons taking a lien on products after their 
delivery to an association as security for a loan made to it are as 
safe under an agency 79 as under a purchase-and-sale contract, because 
superior liens in either case acquired prior to delivery of the products 
would take precedence over those subsequently acquired; and any 
action affecting the products taken after the delivery of the products 
and after the granting of liens by the association would have to 
respect the liens given- by the association and conform to them. 
In the event an association that used a purchase-and-sale con- 
tract failed, having on hand products or the money derived from 
the sale of them, a question would arise whether the members under 
such contracts were merely common creditors along with other un- 
secured creditors or whether they were preferred creditors. Ap- 
parently they would be common creditors, as this is the general rule 
in analogous situations in which title to goods that have not been 
paid for has passed. 80 Again, when title to the products passes to 
an association, as is the case under the purchase-and-sale form, a 
creditor of the association after obtaining a judgment could seize a 
sufficient quantity of the products to satisfy his judgment. 81 
On the other hand, if an association operates with an agency 
marketing contract, members would not be common creditors in the 
event of failure of the association. On the contrary, they would be 
entitled to receive full returns in accordance with their contracts 
or the return of their products, although to do so might leave credi- 
tors of the association unpaid. Any other rule would mean that the 
property to which the members had title could be taken to satisfy 
debts of the association, and it is to be remembered that an association 
is an entity separate and apart from its members. Again the funda- 
mental rule is that property in the hands of an agent for the pur- 
pose of sale may not be seized by creditors of the agent to satisfy 
claims they have against him. 
If the papers defining the relationship between an association and 
its members do not state the capacity in which the association re- 
ceives and markets their products but simply provide for the mar- 
keting of their products by the association, the relationship is one 
of agency, and title to the products does not pass to the association. 82 
In a Maine case 83 in which the marketing contract did not specify 
whether it was a purchase-and-sale or an agency contract, a mem- 
ber's fruit froze after gathering but before delivery to the associa- 
tion. The court held that the contract was an agency contract and 
that the loss fell entirely on the grower. In a purchase-and-sale 
contract a provision could be included placing the risk incident to 
the deterioration and loss of the crop on the member even after title 
to it had passed to the association. 
WHEN MARKETING CONTRACTS BECOME EFFECTIVE 
Marketing contracts frequently contain a provision that they will 
not become effective until a certain acreage or number of contracts 
70 Phez Co. v. Salem Fruit Union, 103 Or. 514. 201 P. 222, 205 P. 970, 25 A. L. R. 1090. 
so McKenzie v. Roper Wholesale Grocery Co., 9 Ga. App. 185, 70 S. E. 981. 
8l McKenzie v. Roper Wholesale Grocery Co., 9 Ga. App. 185, 70 S. E. 981. 
82 Haarparinue v. Butter Hill Fruit Growers Ass'n, 122 Me. 138, 119 A. 116. 
83 Haarparinne v. Butter Hill Fruit Growers Ass'n, 122 Me. 138, 119 A. 116. 
