58 BULJ^ETIN" 1106, IT. S. DEPARTMENT OF AGRICULTURE 
pool and after it is known what the total expenses of the association 
for the year will be. 
Marketing expenses are pooled either on a unit of product or on a 
dollar basis. Marketing expenses, even in the case of those partici- 
pating in pools of products that have a duration of less than one 
year, are usually on a yearly basis; and of course, this is fair, as 
expenses continue throughout the year and the association must be 
maintained. Broadly speaking, any pooling method for any of 
these things is valid provided that the members have consented 
thereto 27 either in the by-laws or contract. 
The right of an association to determine conclusively the grade 
of products received from its members, if authorized to do so by its 
by-laws or marketing contract, is established. 88 
The question of whether pooling or grading is properly done would 
appear to be open to question only in case of fraud or such gross 
mistake as to imply bad faith. 29 
Unless an association is authorized to pool products or expenses or 
gains or losses, it may not do so. In an Oregon case involving a 
milk association, the association attempted to apportion losses aris- 
ing on account of the fact that certain milk dealers had rejected 
milk. A member whose milk had been accepted and paid for by the 
dealer at the full sale price, objected to bearing any part of the loss 
on account of the rejected milk. He successfully sued the association 
and recovered the amount of the loss which the association sought 
to have him bear. 30 Of course, if the by-laws or marketing contract 
of an association provide for a certain method of pooling, this 
method and no other should be followed. 31 
EXCESS ADVANCES OR PAYMENTS 
Cooperative associations frequently make advances or partial 
" payments " to their members on receipt of their products. Now, 
in the event that the advances or payments made should exceed the 
amount to which the member is entitled, after deducting marketing 
expenses and all other authorized deductions from the amount re- 
ceived from the sale of his products, may the association recover the 
amount of such excess advances or payments from the member ? The 
answer is " Yes." The basis for the recovery is the doctrine that no 
man shall be allowed to enrich himself unjustly at the expense of 
another or shall be allowed to retain money that in " equity and good 
conscience " belongs to another. 32 
The simplest case in which this question could arise would probably 
be that of an association that functioned on a commission or brokerage 
27 Washington Co-op. Egg & Poultry Ass'n v. Taylor, 122 Wash. 466, 210 P. 806; 
McCauley v . Arkansas Rice Growers' Co-op. Ass'n, 171 Ark. 1155, 287 S. W. 419 ; Tobacco 
Growers' Co-op. Ass'n v. Jones, 185 N. C. 265, 117 S. E. 174, 33 A. L. R. 231 ; Martins- 
burg & Potomac Railroad Co. v. March, 114 U. S. 549. 
28 Washington Co-op. Egg & Poultry Ass'n v. Taylor, 122 Wash. 466, 210 P. 806; 
McCauley v. Arkansas Rice Growers' Co-op. Ass'n, 171 Ark. 1155, 287 S. W. 419 ; Mar- 
tinsburg & Potomac Railroad Co. v. March, 114 U. S. 549. 
29 Martinsburg & Potomac Railroad Co. v. March, 114 U. S. 549 ; New England Trust 
Co. v. Abbott, Ex'r, 162 Mass. 148, 38 N. E. 432, 27 L. R. A. 271; Berger Mfg. Co. v. 
Huggins, 242 F. 853 ; Citizens' Independent Mill & Elevator Co. v. Perkins, 52 Okl. 242, 
152 P. 443; Hayes Grain & Commission Co. v. Federal Grain Co., 169 Ark. 1072. 277 
S. W. 521 ; Arkansas Cotton Growers' Co-op. Ass'n v. Brown, Ark. , 16 S. W. 
(2d) 177. 
30 Steelman v. Oregon Dairymen's League, Inc., 97 Or. 535, 192 P. 790. 
81 McCauley v. Arkansas Rice Growers' Co-op. Ass'n 171 Ark. 1155, 278 S. W. 419, 
? 2 Jackson v. Creek, 47 Ind. App. 541, 94 N. E. 416. 
